10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2015
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                                    to

Commission file number 033-43007

TERRA NITROGEN COMPANY, L.P.

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)	73-1389684 (I.R.S. Employer Identification No.)
4 Parkway North, Suite 400 Deerfield, Illinois (Address of principal executive offices)	60015 (Zip Code)

Registrant's telephone number, including area code: (847) 405-2400

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes    o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files. x Yes    o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer x Accelerated filer o Non-accelerated filer o (Do not check if a smaller reporting company) Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o Yes    x No

At the close of business on August 5, 2015 there were 18,501,576 common units outstanding.

TERRA NITROGEN COMPANY, L.P.

TABLE OF CONTENTS

PART I—FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)
	Consolidated Balance Sheets	1
	Consolidated Statements of Operations	2
	Consolidated Statements of Partners' Capital	3
	Consolidated Statements of Cash Flows	4
	Notes to Unaudited Consolidated Financial Statements	5
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	20
Item 4.	Controls and Procedures	20
PART II—OTHER INFORMATION
Item 6.	Exhibits	22

TERRA NITROGEN COMPANY, L.P.

PART I. FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS

	(unaudited)
	June 30, 2015		December 31, 2014
	(in millions, except for units)
ASSETS
Current assets:
Cash and cash equivalents	$	72.0	$	113.0
Due from affiliates of the General Partner	23.2		25.2
Accounts receivable	0.3		0.4
Inventories	9.4		9.6
Prepaid expenses and other current assets	2.4		0.3
Total current assets	107.3		148.5
Property, plant and equipment, net	306.0		259.4
Other assets	8.4		7.9
Total assets	$	421.7	$	415.8
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable and accrued expenses	$	21.2	$	32.4
Due to affiliates of the General Partner	1.8		4.2
Other current liabilities	0.5		3.6
Total current liabilities	23.5		40.2
Other liabilities	1.5		0.7
Partners' capital:
Limited partners' interests, 18,501,576 Common Units authorized, issued and outstanding	316.7		302.7
Limited partners' interests, 184,072 Class B Common Units authorized, issued and outstanding	2.4		2.2
General partner's interest	77.6		70.0
Total partners' capital	396.7		374.9
Total liabilities and partners' capital	$	421.7	$	415.8

See accompanying Notes to Unaudited Consolidated Financial Statements.

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TERRA NITROGEN COMPANY, L.P.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

	Three months ended   June 30,				Six months ended   June 30,
	2015		2014		2015		2014
	(in millions, except per unit amounts)
Net sales:
Product sales to an affiliate of the General Partner	$	153.2	$	167.2	$	279.5	$	344.5
Other income from an affiliate of the General Partner	0.2		0.2		0.3		0.3
Other income	0.2		0.1		0.4		0.4
Total	153.6		167.5		280.2		345.2
Cost of goods sold:
Materials, supplies and services	43.4		57.4		97.4		122.0
Services provided by affiliates of the General Partner	6.5		5.9		14.1		11.5
Gross margin	103.7		104.2		168.7		211.7
Selling, general and administrative services provided by affiliates of the General Partner	4.0		3.8		7.9		7.7
Other general and administrative expenses	0.4		0.3		2.5		1.0
Net earnings	$	99.3	$	100.1	$	158.3	$	203.0
Allocation of net earnings:
General Partner	$	37.1	$	40.7	$	58.0	$	82.2
Class B Common Units	0.9		1.0		1.5		2.0
Common Units	61.3		58.4		98.8		118.8
Net earnings	$	99.3	$	100.1	$	158.3	$	203.0
Net earnings per Common Unit	$	3.31	$	3.16	$	5.34	$	6.42

See accompanying Notes to Unaudited Consolidated Financial Statements.

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TERRA NITROGEN COMPANY, L.P.

CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL

(unaudited)

	Common Units			Class B Common Units			General Partner's Interest			Total Partners' Capital
	(in millions)
Partners' capital as of December 31, 2013	$	264.5		$	1.5		$	43.0		$	309.0
Net earnings	118.8			2.0			82.2			203.0
Distributions	(94.6		)	(1.5		)	(60.0		)	(156.1		)
Partners' capital as of June 30, 2014	$	288.7		$	2.0		$	65.2		$	355.9
Partners' capital as of December 31, 2014	$	302.7		$	2.2		$	70.0		$	374.9
Net earnings	98.8			1.5			58.0			158.3
Distributions	(84.8		)	(1.3		)	(50.4		)	(136.5		)
Partners' capital as of June 30, 2015	$	316.7		$	2.4		$	77.6		$	396.7

See accompanying Notes to Unaudited Consolidated Financial Statements.

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TERRA NITROGEN COMPANY, L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

	Six months ended   June 30,
	2015			2014
	(in millions)
Operating Activities:
Net earnings	$	158.3		$	203.0
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	15.4			14.1
Unrealized (gain) loss on derivatives	(5.6		)	7.6
Loss on disposal of property, plant and equipment	1.2			—
Changes in operating assets and liabilities:
Accounts receivable	0.1			0.4
Inventories	0.2			(1.9		)
Accounts payable and accrued expenses	(7.0		)	(3.8		)
Due to/from affiliates of the General Partner	(0.4		)	2.3
Other assets and liabilities	0.7			(1.2		)
Net cash provided by operating activities	162.9			220.5
Investing Activities:
Additions to property, plant and equipment	(67.4		)	(27.4		)
Net cash used in investing activities	(67.4		)	(27.4		)
Financing Activities:
Partnership distributions paid	(136.5		)	(156.1		)
Other	—			(8.0		)
Net cash used in financing activities	(136.5		)	(164.1		)
(Decrease) increase in cash and cash equivalents	(41.0		)	29.0
Cash and cash equivalents at beginning of period	113.0			86.9
Cash and cash equivalents at end of period	$	72.0		$	115.9

See accompanying Notes to Unaudited Consolidated Financial Statements.

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TERRA NITROGEN COMPANY, L.P.

Notes to Unaudited Consolidated Financial Statements

1. Background and Basis of Presentation

Terra Nitrogen Company, L.P. (TNCLP, we, our or us) is a Delaware limited partnership that produces nitrogen fertilizer products. Our principal products are anhydrous ammonia (ammonia) and urea ammonium nitrate solutions (UAN), which we manufacture at our facility in Verdigris, Oklahoma.

We conduct our operations through an operating partnership, Terra Nitrogen, Limited Partnership (TNLP or the Operating Partnership, and collectively with TNCLP, the Partnership). Terra Nitrogen GP Inc. (TNGP or the General Partner), a Delaware corporation, is the General Partner of both TNCLP and TNLP and owns a consolidated 0.05% general partner interest in the Partnership. The General Partner is an indirect, wholly-owned subsidiary of CF Industries Holdings, Inc. (CF Industries), a Delaware corporation. Ownership of TNCLP is comprised of the general partner interests and the limited partner interests. Limited partner interests are represented by common units, which are listed for trading on the New York Stock Exchange under the symbol "TNH," and Class B common units. As of June 30, 2015, we had 18,501,576 common units and 184,072 Class B common units issued and outstanding. CF Industries through its subsidiaries owned 13,889,014 common units (representing approximately 75% of the total outstanding common units) and all of the Class B common units as of June 30, 2015.

We are a master limited partnership (MLP). Partnerships are generally not subject to federal income tax, although publicly-traded partnerships (such as TNCLP) are treated as corporations for federal income tax purposes (and therefore are subject to federal income tax), unless at least 90% of the partnership's gross income is "qualifying income" as defined in Section 7704 of the Internal Revenue Code of 1986, as amended, and the partnership is not required to register as an investment company under the Investment Company Act of 1940. As we currently satisfy the requirements to be treated as a partnership for federal income tax purposes, no federal income taxes are paid by the Partnership.

On May 6, 2015, the Internal Revenue Service (IRS) published proposed regulations on the types of income and activities which constitute or generate qualifying income of MLP. The proposed regulations would have the effect of limiting the types of income and activities which qualify under the MLP rules, subject to certain transition provisions. The proposed regulations include as activities that generate qualifying income processing or refining and transportation activities with respect to any mineral or natural resource (including fertilizer), but reserve on specific proposals regarding fertilizer-related activities. Any change in the federal income tax treatment of income from fertilizer-related activities as qualifying income could have a material impact on the taxation of the Partnership and could have a material adverse impact on unitholder distributions. We continue to monitor these IRS regulatory activities.

The accompanying unaudited interim consolidated financial statements have been prepared on the same basis as our audited consolidated financial statements for the year ended December 31, 2014, in accordance with accounting principles generally accepted in the United States for interim financial reporting. In the opinion of management, these statements reflect all adjustments, consisting only of normal and recurring adjustments, that are necessary for the fair representation of the information for the periods presented. The unaudited interim consolidated financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. Operating results for any period presented apply to that period only and are not necessarily indicative of results for any future period.

The preparation of the unaudited interim consolidated financial statements requires management to make use of estimates and assumptions that affect the reported amount of assets and liabilities, revenue and expenses and certain financial statement disclosures. Actual results could differ from these estimates. Significant estimates and assumptions in these unaudited interim consolidated financial statements include net realizable value of inventories, environmental remediation liabilities, environmental and litigation contingencies, useful lives of property, plant and equipment, and the assumptions used in the evaluation of potential impairment of property, plant and equipment.

The accompanying unaudited interim consolidated financial statements should be read in conjunction with our audited consolidated financial statements and related disclosures included in our 2014 Annual Report on Form 10-K filed with the SEC on February 26, 2015.

Throughout this document, the term "affiliates of the General Partner" refers to consolidated subsidiaries of CF Industries, including TNGP.

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TERRA NITROGEN COMPANY, L.P.

2. New Accounting Standards

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers, which supersedes the revenue recognition requirements in Accounting Standards Codification (ASC) 605, Revenue Recognition. This ASU is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments. Additionally, information concerning the costs to obtain and fulfill a contract, including assets to be recognized, is to be disclosed. In July 2015, the FASB voted to defer the effective date of this ASU to December 15, 2017 for interim and annual reporting periods beginning after that date. Early adoption of the standard as of December 15, 2016 (for interim and annual reporting periods beginning after that date) is permitted by the FASB. We are currently evaluating the impact of the adoption of this ASU on our consolidated financial statements.

3. Agreement of Limited Partnership

We make quarterly distributions to holders of our general partner interest and limited partner interests based on Available Cash for the quarter as defined in our agreement of limited partnership. Available Cash is defined generally as all cash receipts less all cash disbursements, less certain reserves (including reserves for future operating and capital needs) established as the General Partner determines in its reasonable discretion to be necessary or appropriate. Changes in working capital affect Available Cash as changes in the amount of cash invested in working capital items (such as increases in inventory and decreases in accounts payable) reduce Available Cash, while declines in the amount of cash invested in working capital items increase Available Cash. During the six months ended June 30, 2015 and 2014, we declared and paid partnership distributions of $136.5 million and $156.1 million, respectively.

We receive 99% of the Available Cash from the Operating Partnership and 1% is distributed by the Operating Partnership to the General Partner. Cash distributions from the Operating Partnership generally represent the Operating Partnership's Available Cash from operations. Our cash distributions are made 99.975% to common and Class B common unitholders and 0.025% to the General Partner except when cumulative distributions of Available Cash exceed specified target levels above the Minimum Quarterly Distributions (MQD) of $0.605 per unit. Under such circumstances, the General Partner is entitled to receive Incentive Distribution Rights.

On August 5, 2015, we announced a $2.36 cash distribution per common limited partnership unit, payable on August 31, 2015 to holders of record as of August 17, 2015. In the second quarter of 2015, we exceeded the cumulative MQD amounts and will distribute Available Cash as summarized in the following table:

	Income and Distribution Allocation
	Target Limit		Target Increment		Common Units		Class B Common Units		General Partner		Total
Minimum Quarterly Distributions	$	0.605	$	0.605	98.990	%	0.985	%	0.025	%	100.00	%
First Target	0.715		0.110		98.990	%	0.985	%	0.025	%	100.00	%
Second Target	0.825		0.110		85.859	%	0.985	%	13.156	%	100.00	%
Third Target	1.045		0.220		75.758	%	0.985	%	23.257	%	100.00	%
Final Target and Beyond	>1.045		—		50.505	%	0.985	%	48.510	%	100.00	%

The General Partner is required to remit the majority of cash distributions it receives from the Partnership, in excess of its 1% Partnership equity interest, to an affiliated company.

As of June 30, 2015, the General Partner and its affiliates owned 75.3% of our outstanding units. When not more than 25% of our issued and outstanding units are held by non-affiliates of the General Partner, as was the case at June 30, 2015, we, at the General Partner's sole discretion, may call, or assign to the General Partner or its affiliates, our right to acquire all, but not less than all, such outstanding units held by non-affiliated persons. If the General Partner elects to acquire all outstanding units, we are required to give at least 30 but not more than 60 days' notice of our decision to purchase the outstanding units. The purchase price per unit will be the greater of (1) the average of the previous 20 trading days' closing prices as of the date five days before the purchase is announced or (2) the highest price paid by the General Partner or any of its affiliates for any unit within the 90 days preceding the date the purchase is announced.

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TERRA NITROGEN COMPANY, L.P.

4. Net Earnings per Common Unit

Net earnings per common unit are based on the weighted-average number of common units outstanding during the period. The following table provides a calculation for net earnings per common unit for the three and six months ended June 30, 2015 and 2014:

	Three months ended   June 30,				Six months ended   June 30,
	2015		2014		2015		2014
	(in millions, except per unit amounts)
Basic earnings per Common Unit:
Net earnings	$	99.3	$	100.1	$	158.3	$	203.0
Less: Net earnings allocable to General Partner	37.1		40.7		58.0		82.2
Less: Net earnings allocable to Class B Common Units	0.9		1.0		1.5		2.0
Net earnings allocable to Common Units	$	61.3	$	58.4	$	98.8	$	118.8
Weighted-average Common Units outstanding	18.5		18.5		18.5		18.5
Net earnings per Common Unit	$	3.31	$	3.16	$	5.34	$	6.42

There were no dilutive TNCLP units outstanding for the three and six months ended June 30, 2015 and 2014.

5. Inventories

Inventories consisted of the following:

	June 30, 2015		December 31, 2014
	(in millions)
Finished goods	$	6.1	$	7.8
Materials and supplies	3.3		1.8
Total	$	9.4	$	9.6

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TERRA NITROGEN COMPANY, L.P.

6. Derivative Financial Instruments

Derivative financial instruments are executed on our behalf by an affiliate of the General Partner to reduce our exposure to changes in commodity prices for natural gas. Natural gas is the largest and most volatile component of the manufacturing cost for nitrogen-based fertilizers.

The derivatives that we use are primarily natural gas fixed price swaps and options traded in the over-the-counter (OTC) markets. The derivative contract prices are based on NYMEX future prices based on physical delivery of natural gas at the Henry Hub in Louisiana, the most common and financially-liquid location of reference for derivative financial instruments related to natural gas. However, we purchase natural gas for our manufacturing facility from suppliers whose prices are based primarily on the ONEOK index (based on physical delivery of natural gas in Oklahoma, rather than at the Henry Hub). This creates a location basis differential between the derivative contract price and the price we pay for physical delivery of natural gas. Accordingly, the prices underlying the derivative financial instruments we use may not exactly match the prices of natural gas we purchase and consume. These natural gas derivative contracts are scheduled to coincide with our anticipated purchases of natural gas used to manufacture nitrogen products during those future periods. We use natural gas derivatives as an economic hedge of gas price risk, but without the application of hedge accounting.

We report derivatives on our consolidated balance sheets at fair value. Changes in fair value are recognized in cost of sales in the period of change. Cash flows related to natural gas derivatives are classified as operating activities.

The gross fair values of derivatives on our consolidated balance sheets are shown below. All balance sheet amounts from derivatives arise from natural gas derivatives that are not designated as hedging instruments. For additional information on derivative fair values, see Note 7—Fair Value Measurements.

	June 30, 2015			December 31, 2014
	(in millions)
Derivative Assets
Unrealized gains in other current assets	$	1.9		$	0.1
Unrealized gains in other assets	1.2			—
Total derivative assets	3.1			0.1
Derivative Liabilities
Unrealized losses in other current liabilities	(0.5		)	(3.6		)
Unrealized losses in other liabilities	(0.6		)	—
Total derivative liabilities	(1.1		)	(3.6		)
Net derivative assets (liabilities)	$	2.0		$	(3.5	)

The effect of derivatives in our consolidated statements of operations is shown below. All amounts arise from natural gas derivatives that are not designated as hedging instruments and are recorded in cost of goods sold.

	Three months ended   June 30,						Six months ended   June 30,
	2015			2014			2015			2014
	(in millions)
Unrealized mark-to-market gains (losses)	$	2.6		$	(4.9	)	$	6.5		$	(8.9	)
Realized (losses) gains	(0.8		)	4.9			(5.4		)	14.8
Net derivative gains	$	1.8		$	—		$	1.1		$	5.9

As of June 30, 2015 and December 31, 2014, we had open derivative contracts for 40.0 million MMBtus and 7.6 million MMBtus, respectively, of natural gas. For the six months ended June 30, 2015, we used derivatives to cover approximately 72% of our natural gas consumption.

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TERRA NITROGEN COMPANY, L.P.

As of June 30, 2015 and December 31, 2014, the aggregate fair value of the derivative instruments with credit-risk-related contingent features in a net liability position were $1.1 million and $3.6 million, respectively, which also approximates the fair value of the maximum amount of additional collateral that would need to be posted or assets needed to settle the obligations if the credit-risk-related contingent features were triggered at the reporting dates. At both June 30, 2015 and December 31, 2014, we had no cash collateral on deposit with counterparties for derivative contracts. The credit support documents executed in connection with International Swaps and Derivatives Association (ISDA) agreements generally provide the right to set off collateral against amounts owing under the ISDA agreements upon the occurrence of a default or a specified termination event.

The following table presents amounts relevant to offsetting of our derivative assets and liabilities as of June 30, 2015 and December 31, 2014:

	Gross and net amounts presented in consolidated balance sheets(1)			Gross amounts not offset in consolidated balance sheets
				Financial instruments		Cash collateral received (pledged)		Net amount
	(in millions)
June 30, 2015
Total derivative assets	$	3.1		$	1.1	$	—	$	2.0
Total derivative liabilities	1.1			1.1		—		—
Net derivative assets	$	2.0		$	—	$	—	$	2.0
December 31, 2014
Total derivative assets	$	0.1		$	0.1	$	—	$	—
Total derivative liabilities	3.6			0.1		—		3.5
Net derivative liabilities	$	(3.5	)	$	—	$	—	$	(3.5	)

_______________________________________________________________________________

⁽¹⁾  We report the fair values of our derivative assets and liabilities on a gross basis on our consolidated balance sheets. As a result, amounts recognized and net amounts presented are the same.

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TERRA NITROGEN COMPANY, L.P.

7. Fair Value Measurements

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents assets and liabilities included in our consolidated balance sheets that are recognized at fair value on a recurring basis, and indicates the fair value hierarchy utilized to determine such fair value as of June 30, 2015 and December 31, 2014.

	Balances as of June 30, 2015
	Total			Quoted Market Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
	(in millions)
Cash and cash equivalents	$	72.0		$	72.0	$	—		$	—
Unrealized gains on natural gas derivatives	3.1			—		3.1			—
Total assets at fair value	$	75.1		$	72.0	$	3.1		$	—
Unrealized losses on natural gas derivatives	$	(1.1	)	$	—	$	(1.1	)	$	—
Total liabilities at fair value	$	(1.1	)	$	—	$	(1.1	)	$	—

	Balances as of December 31, 2014
	Total			Quoted Market Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
	(in millions)
Cash and cash equivalents	$	113.0		$	113.0	$	—		$	—
Unrealized gains on natural gas derivatives	0.1			—		0.1			—
Total assets at fair value	$	113.1		$	113.0	$	0.1		$	—
Unrealized losses on natural gas derivatives	$	(3.6	)	$	—	$	(3.6	)	$	—
Total liabilities at fair value	$	(3.6	)	$	—	$	(3.6	)	$	—

Cash and Cash Equivalents

As of June 30, 2015 and December 31, 2014, our cash and cash equivalents consisted primarily of money market mutual funds that invest in U.S. government obligations.

Natural Gas Derivatives

The derivative instruments that we use are primarily natural gas fixed price swaps and options traded in the OTC markets with multi-national commercial banks, other major financial institutions and large energy companies. The derivatives are traded in months forward and settlements are scheduled to coincide with anticipated gas purchases during those future periods. These contracts settle using NYMEX futures prices and accordingly, to determine the fair value of these instruments, we use quoted market prices from NYMEX and standard pricing models with inputs derived from or corroborated by observable market data such as forward curves supplied by an industry-recognized unrelated third party. See Note 6—Derivative Financial Instruments for additional information.

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TERRA NITROGEN COMPANY, L.P.

8. Property, Plant and Equipment, Net

Property, plant and equipment, net consisted of the following:

	June 30, 2015		December 31, 2014
	(in millions)
Land	$	1.6	$	1.6
Buildings and improvements	14.4		8.1
Machinery and equipment	530.0		401.4
Construction in progress	14.0		109.2
	560.0		520.3
Less: Accumulated depreciation and amortization	254.0		260.9
	$	306.0	$	259.4

During the three and six months ended June 30, 2015, we recorded losses of approximately $0.2 million and $1.2 million, respectively, on the disposal of certain machinery and equipment, which is included in other general and administrative expenses on our consolidated statements of operations.

Plant turnarounds—Scheduled inspections, replacements and overhauls of machinery and equipment at our continuous process manufacturing facility are referred to as plant turnarounds. The expenditures related to turnarounds are capitalized in property, plant and equipment when incurred. The following is a summary of plant turnaround activity:

	Six months ended   June 30,
	2015			2014
	(in millions)
Net capitalized turnaround costs:
Beginning balance	$	16.7		$	22.7
Additions	30.7			0.3
Depreciation	(5.0		)	(3.2		)
Ending balance	$	42.4		$	19.8

Scheduled replacements and overhauls of machinery and equipment include the dismantling, repair or replacement and installation of various components including piping, valves, motors, turbines, pumps, compressors, heat exchangers and the replacement of catalyst when a full plant shutdown occurs. Scheduled inspections are also conducted during full plant shutdowns, including required safety inspections which entail the disassembly of various components such as steam boilers, pressure vessels and other equipment requiring safety certifications. Internal employee costs and overhead are not considered turnaround costs and are not capitalized.

9. Related Party Transactions

TNCLP and TNGP have no employees. We have entered into several agreements with a subsidiary of CF Industries relating to the operation of our business and the sale of the fertilizer products produced at our Verdigris facility. We believe that each of these agreements is on terms that are fair and reasonable to us.

General and Administrative Services and Product Offtake Agreement

Pursuant to the Amendment to the General and Administrative Services and Product Offtake Agreement (the Services and Offtake Agreement), the Partnership sells all of its fertilizer products to an affiliate of the General Partner at prices based on market prices for the Partnership's fertilizer products as defined in the Services and Offtake Agreement. Title and risk of loss transfer to an affiliate of the General Partner as the product is shipped from the plant gate. The Services and Offtake Agreement is effective for annual terms starting as of January 1st and will be extended automatically for successive one-year terms unless terminated by one of the parties prior to renewal.

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TERRA NITROGEN COMPANY, L.P.

Directly Incurred Charges

Since we have no employees, we rely on employees from an affiliate of the General Partner to operate our Verdigris facility. As a result, the payroll, payroll-related expenses and benefits, such as health insurance and pension, incurred by an affiliate of the General Partner, are directly charged to us. Payroll, payroll-related expenses and other employee-related benefits directly charged to us for the three and six months ended June 30, 2015 were $6.5 million and $14.1 million, respectively, and for the three and six months ended June 30, 2014 were $5.9 million and $11.5 million, respectively. We report these expenses as services provided by affiliates of the General Partner in cost of goods sold.

Allocated Charges

CF Industries, together with its affiliates, also provides certain services to us under the Services and Offtake Agreement. These services include production planning, manufacturing management, logistics, procurement, accounting, legal, risk management, investor relations and other general and administrative functions. Allocated expenses charged to us for the three and six months ended June 30, 2015 were $4.0 million and $7.9 million, respectively, and for the three and six months ended June 30, 2014 were $3.8 million and $7.7 million, respectively. We report these expenses as selling, general and administrative services provided by affiliates of the General Partner.

Amounts Due to/from Affiliates of the General Partner

We receive cash and make expenditures directly from our cash accounts. Because we sell our products to and receive payroll and other related services from affiliates of the General Partner, the affiliates of the General Partner continue to be both debtors and creditors to us. As of June 30, 2015 and December 31, 2014, we had a net balance due from affiliates of the General Partner of $21.4 million and $21.0 million, respectively.

Spare Parts Sharing Agreement

Affiliates of CF Industries own and operate nitrogen fertilizer complexes that utilize some equipment that is similar to equipment at our Verdigris nitrogen complex. Each of the various manufacturing complexes maintains spare parts for use in its facilities. In the event that an unplanned need arises and to help minimize manufacturing downtime, we have entered into a spare parts sharing agreement that permits spare parts to be shared among the manufacturing complexes from time to time. Parts that are borrowed from another complex under the agreement are either refurbished and returned to the lender or replaced.

Leases

We entered into an amended and restated lease with an affiliate of the General Partner under which the ammonia assets in our terminal in Blair, Nebraska are leased by the affiliate. The lease is effective for a five-year term ending on December 31, 2018, and the affiliate of the General Partner has options to renew for three additional five-year terms. The quarterly lease payment is $100,000, subject to an annual inflation adjustment, and additional rent will be paid equal to all costs, expenses, and obligations incurred by the affiliate of the General Partner related to the use, occupancy and operation of the terminal.

We also have leased certain of our rail cars to an affiliate of the General Partner for quarterly market-based rental payments of $3,600 per car. This lease was effective initially for a one-year term and is extended automatically for successive one-year terms unless terminated by either party thereto prior to renewal.

We recognized rental income for the three and six months ended June 30, 2015 and 2014 of $0.2 million and $0.3 million, respectively.

12

TERRA NITROGEN COMPANY, L.P.

ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

You should read the following discussion and analysis in conjunction with Terra Nitrogen Company, L.P.'s (TNCLP, we, our or us) annual consolidated financial statements and related notes, which are included in our 2014 Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on February 26, 2015, as well as our Unaudited Consolidated Financial Statements and the related Notes thereto contained in Part I, Item 1 of this report.

The section entitled "Risk Factors" contained in Item 1A of our Annual Report on Form 10-K filed with the SEC on February 26, 2015, and similar discussions in our other SEC filings, describe some of the important risk factors that may affect our business, financial condition, results of operations and/or liquidity. You should read and consider carefully those risks, in addition to the other information in this report and in our other filings with the SEC.

We conduct our operations through an operating partnership, Terra Nitrogen, Limited Partnership (TNLP or the Operating Partnership, and collectively with TNCLP, the Partnership). Terra Nitrogen GP Inc. (TNGP or the General Partner), a Delaware corporation, is the General Partner of both TNCLP and TNLP and owns a consolidated 0.05% general partner interest in the Partnership. The General Partner is an indirect, wholly-owned subsidiary of CF Industries Holdings, Inc. (CF Industries), a Delaware corporation.

CF Industries, through its subsidiaries, is a global leader in nitrogen fertilizer manufacturing and distribution, serving both agricultural and industrial customers. CF Industries operates world-class nitrogen fertilizer manufacturing complexes in the central United States and Canada and distributes nitrogen fertilizer products through a system of terminals, warehouses, and associated transportation equipment located primarily in the midwestern United States.

Throughout this document, the term "affiliates of the General Partner" refers to consolidated subsidiaries of CF Industries, including TNGP.

Dependence on CF Industries

We are dependent on CF Industries for our success in a number of respects. An affiliate of CF Industries is obligated to take all of the production from our Verdigris manufacturing complex. Affiliates of CF Industries provide certain services to us, including production planning, manufacturing management, logistics, procurement, accounting, legal, risk management, investor relations and other general and administrative services. For additional information concerning CF Industries, refer to CF Industries' filings with the SEC on Form 10-K, Form 10-Q and current reports on Form 8-K, and for further information regarding transactions with CF Industries, please refer to Notes to Unaudited Consolidated Financial Statements, Note 9—Related Party Transactions.

Introduction

In this discussion and analysis, we explain our business in the following areas:

• Company Overview;

• Results of Operations; and

• Liquidity and Capital Resources

Company Overview

TNCLP is a Delaware limited partnership that produces nitrogen fertilizer products. Our principal products are anhydrous ammonia (ammonia) and urea ammonium nitrate solutions (UAN), which we manufacture at our facility in Verdigris, Oklahoma.

TNCLP and TNGP have no employees. An affiliate of the General Partner provides certain services to us under the Amendment to the General and Administrative Services and Product Offtake Agreement (the Services and Offtake Agreement). Pursuant to the Services and Offtake Agreement, the Partnership sells all of its fertilizer products to an affiliate of the General Partner at prices based on market prices for the Partnership's fertilizer products as defined in the Services and Offtake Agreement. Title and risk of loss transfer to an affiliate of the General Partner as the product is shipped from the plant gate. For further information regarding our agreements with the General Partner, see Notes to Unaudited Consolidated Financial Statements, Note 9—Related Party Transactions.

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TERRA NITROGEN COMPANY, L.P.

Results of Operations

Consolidated Results

We reported net earnings of $99.3 million for the three months ended June 30, 2015 on net sales of $153.6 million, compared with net earnings of $100.1 million for the three months ended June 30, 2014 on net sales of $167.5 million. Net earnings per common unit for the three months ended June 30, 2015, were $3.31 compared with $3.16 for the three months ended June 30, 2014.

We reported net earnings of $158.3 million for the six months ended June 30, 2015 on net sales of $280.2 million, compared with net earnings of $203.0 million for the six months ended June 30, 2014 on net sales of $345.2 million. Net earnings per common unit for the six months ended June 30, 2015, were $5.34 compared with $6.42 for the six months ended June 30, 2014.

The following table shows our results of operations for the three and six months ended June 30, 2015 and 2014:

	Three months ended June 30,											Six months ended June 30,
	2015			2014			2015 vs. 2014					2015			2014			2015 vs. 2014
	(in millions, except as noted)
Net sales	$	153.6		$	167.5		$	(13.9	)	(8	)%	$	280.2		$	345.2		$	(65.0	)	(19	)%
Cost of goods sold	49.9			63.3			(13.4		)	(21	)%	111.5			133.5			(22.0		)	(16	)%
Gross margin	103.7			104.2			(0.5		)	—	%	168.7			211.7			(43.0		)	(20	)%
Gross margin percentage	67.5		%	62.2		%	5.3		%			60.2		%	61.3		%	(1.1		)%
Selling, general and administrative expenses	4.4			4.1			0.3			7	%	10.4			8.7			1.7			20	%
Net earnings	$	99.3		$	100.1		$	(0.8	)	(1	)%	$	158.3		$	203.0		$	(44.7	)	(22	)%
Net earnings allocable to Common Units	$	61.3		$	58.4		$	2.9		5	%	$	98.8		$	118.8		$	(20.0	)	(17	)%
Net earnings per Common Unit	$	3.31		$	3.16		$	0.15		5	%	$	5.34		$	6.42		$	(1.08	)	(17	)%
Sales volume (tons in thousands):
Ammonia	126			71			55			77	%	221			169			52			31	%
UAN(1)	354			470			(116		)	(25	)%	663			1,000			(337		)	(34	)%
Total	480			541			(61		)	(11	)%	884			1,169			(285		)	(24	)%
Average selling prices (dollars per ton):
Ammonia	$	505		$	488		$	17		3	%	$	503		$	445		$	58		13	%
UAN(1)	$	252		$	282		$	(30	)	(11	)%	$	253		$	269		$	(16	)	(6	)%
Natural gas costs:
Purchased natural gas costs (per MMBtu)(2)	$	2.46		$	4.36		$	(1.90	)	(44	)%	$	2.64		$	4.66		$	(2.02	)	(43	)%
Realized derivatives loss (gain) (per MMBtu)(3)	0.08			(0.49		)	0.57			N/M		0.31			(0.71		)	1.02			N/M
Natural gas costs (per MMBtu)	$	2.54		$	3.87		$	(1.33	)	(34	)%	$	2.95		$	3.95		$	(1.00	)	(25	)%
Production volume by product (tons in thousands):
Ammonia(4)	282			273			9			3	%	481			579			(98		)	(17	)%
UAN(1)	389			482			(93		)	(19	)%	681			1,002			(321		)	(32	)%

_______________________________________________________________________________

N/M - Not Meaningful

⁽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.

⁽⁴⁾  Gross ammonia production, including amounts subsequently upgraded on-site into UAN.

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TERRA NITROGEN COMPANY, L.P.

Second Quarter of 2015 Compared to the Second Quarter of 2014

We commenced a planned turnaround of an ammonia plant and a UAN plant in the first quarter of 2015, together representing approximately one-half of the production capacity of the Verdigris nitrogen complex. The ammonia plant turnaround was completed in the first quarter of 2015 and the UAN plant turnaround, including certain follow-on maintenance, was completed in the second quarter of 2015. These turnarounds reduced production in the second quarter of 2015. Second quarter 2015 sales of UAN were impacted due to the lower production, which increased the volume of ammonia that was sold in the second quarter.

Our net sales for the second quarter of 2015 were $153.6 million, a decrease of $13.9 million, or 8%, from the second quarter of 2014 net sales of $167.5 million, due primarily to a decrease in UAN sales volume due to lower production as a result of the turnaround and lower average selling prices for UAN, partially offset by an increase in both the volume and average selling prices for ammonia.

Ammonia selling prices increased by 3% from the second quarter of 2014 to $505 per ton in the second quarter of 2015. The increase in ammonia selling prices was due primarily to selling into a strong ammonia spot market due to a strong ammonia fertilizer application season. Ammonia sales volume increased from 71,000 tons in the second quarter of 2014 to 126,000 tons in the second quarter of 2015 as a result of an early spring application window.

UAN selling prices declined by 11% to $252 per ton in the second quarter of 2015. UAN sales volume decreased by 25% in the second quarter of 2015 to 354,000 tons from 470,000 tons in the second quarter of 2014 reflecting the impact of the turnaround and, to a lesser extent, the impact of weak North American demand for UAN as certain customers switched to ammonia from UAN.

The following table shows the components of cost of goods sold and the average cost of goods sold per ton for the three months ended June 30, 2015 and 2014:

	Three months ended June 30,
	2015			2014		2015 vs. 2014
	(in millions, except per ton amounts)
Realized natural gas costs	$	25.5		$	38.1	$	(12.6	)	(33	)%
Unrealized mark-to-market (gains) losses on natural gas derivatives	(2.6		)	4.9		(7.5		)	N/M
Payroll-related expenses	6.5			5.9		0.6			10	%
Other	20.5			14.4		6.1			42	%
Total cost of goods sold	$	49.9		$	63.3	$	(13.4	)	(21	)%
Average cost of goods sold per ton	$	104		$	117	$	(13	)	(11	)%

_________________________________________________________________________

N/M - Not Meaningful

The average cost of goods sold decreased to $104 per ton in the second quarter of 2015 from $117 per ton in the second quarter of 2014. The 11%decrease in the average cost of goods sold per ton was due primarily to lower realized natural gas prices and the effect of an unrealized net mark-to-market gain on natural gas derivatives, partially offset by the impact of higher maintenance costs for certain activities that were performed during the turnaround and higher payroll-related expenses for employees working on turnaround activities. Realized natural gas costs decreased $1.33 per MMBtu from $3.87 per MMBtu in the second quarter of 2014 to $2.54 per MMBtu in the second quarter of 2015. We recorded a $2.6 million unrealized net mark-to-market gain on natural gas derivatives for the second quarter of 2015, compared to a $4.9 million unrealized net mark-to-market loss for the second quarter of 2014.

Our gross margin was $103.7 million in the second quarter of 2015 compared to $104.2 million in the second quarter of 2014. The gross margin in the second quarter of 2015declined slightly from the same quarter of 2014 primarily due to lower UAN sales volume and lower UAN average selling prices, mostly offset by higher ammonia sales volume and ammonia selling prices and lower realized natural gas costs. Gross margin as a percentage of net sales increased to 67.5% during the second quarter of 2015 from 62.2% during the second quarter of 2014.

Total selling, general and administrative expenses, including other general and administrative expenses, were $4.4 million in the second quarter of 2015 compared to $4.1 million in the second quarter of 2014.

Our net earnings were $99.3 million in the second quarter of 2015, a decrease of $0.8 million, or 1%, as compared to $100.1 million in the second quarter of 2014.

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TERRA NITROGEN COMPANY, L.P.

Six Months Ended June 30, 2015 Compared to Six Months Ended June 30, 2014

Our net sales for the six months ended June 30, 2015 were $280.2 million, a decrease of $65.0 million, or 19%, from net sales of $345.2 million for the six months ended June 30, 2014. This decrease was due primarily to a decrease in UAN sales volume attributable to lower production as a result of the turnarounds, partially offset by higher ammonia sales volume.

Ammonia selling prices increased by 13% from the six months ended June 30, 2014 to $503 per ton in the six months ended June 30, 2015. The increase in ammonia selling prices was due to a tighter U.S. producer inventory position as we entered 2015. Ammonia sales volume increased from 169,000 tons in the six months ended June 30, 2014 to 221,000 tons in the six months ended June 30, 2015 as a result of the impact of the turnaround which increased the amount of ammonia available for sale. Additionally, an early spring application window, together with customer preferences for ammonia contributed to the increase.

UAN selling prices declined by 6% to $253 per ton in the six months ended June 30, 2015. UAN sales volume decreased by 34% in the six months ended June 30, 2015 to 663,000 tons from 1,000,000 tons in the six months ended June 30, 2014 due to the impact of the turnarounds in the first half of 2015.

The following table shows the components of cost of goods sold and the average cost of goods sold per ton for the six months ended June 30, 2015 and 2014:    

	Six months ended June 30,
	2015			2014		2015 vs. 2014
	(in millions, except per ton amounts)
Realized natural gas costs	$	51.2		$	81.5	$	(30.3	)	(37	)%
Unrealized mark-to-market (gains) losses on natural gas derivatives	(6.5		)	8.9		(15.4		)	N/M
Payroll-related expenses	14.1			11.5		2.6			23	%
Other	52.7			31.6		21.1			67	%
Total cost of goods sold	$	111.5		$	133.5	$	(22.0	)	(16	)%
Average cost of goods sold per ton	$	126		$	114	$	12		11	%

_________________________________________________________________________

N/M - Not Meaningful

The average cost of goods sold per ton increased to $126 per ton in the six months ended June 30, 2015 from $114 per ton in the six months ended June 30, 2014. The 11%increase in the average cost of goods sold per ton was due primarily to lower production levels due to the turnarounds, the impact of higher maintenance costs for certain activities that were performed during the turnarounds and higher payroll-related expenses for employees working on turnaround activities, partially offset by lower natural gas costs. Overall, cost of goods sold decreased by 16% from the six months ended June 30, 2014 to $111.5 million in the six months ended June 30, 2015 due primarily to lower sales volume and lower natural gas prices. Realized natural gas costs decreased $1.00 per MMBtu from $3.95 per MMBtu in the six months ended June 30, 2014 to $2.95 per MMBtu in the six months ended June 30, 2015. We recorded a $6.5 million unrealized net mark-to-market gain on natural gas derivatives for the six months ended June 30, 2015, compared to a $8.9 million unrealized net mark-to-market loss for the six months ended June 30, 2014.

Our gross margin was $168.7 million in the six months ended June 30, 2015 compared to $211.7 million in the six months ended June 30, 2014. The gross margin in the six months ended June 30, 2015declined20% from the six months ended June 30, 2014 primarily due to lower sales volume as a result of reduced production due to the turnaround activities. Gross margin as a percentage of net sales decreased to 60.2% during the six months ended June 30, 2015 from 61.3% during the six months ended June 30, 2014.

Total selling, general and administrative expenses, including other general and administrative expenses, were $10.4 million in the six months ended June 30, 2015 compared to $8.7 million in the six months ended June 30, 2014 due primarily to a loss on the disposal of certain machinery and equipment during the first half of 2015.

Our net earnings were $158.3 million in the six months ended June 30, 2015, a decrease of $44.7 million, or 22%, as compared to $203.0 million in the six months ended June 30, 2014. Net earnings decreased primarily due to the lower gross margin.

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TERRA NITROGEN COMPANY, L.P.

Liquidity and Capital Resources

Our principal funding needs and uses of cash are working capital, plant turnaround costs, capital expenditures, and quarterly distributions. Our cash and cash equivalents balance as of June 30, 2015 was $72.0 million, a decrease of $41.0 million from $113.0 million as of December 31, 2014. See further discussion below under "Cash Flows." Our cash and cash equivalents consist primarily of money market mutual funds that invest in U.S. government obligations.

Because we sell our products to, and receive payroll and other related services from, affiliates of the General Partner, the affiliates of the General Partner continue to be both debtors and creditors to us.

Cash Flows

The following table summarizes our cash flows from operating, investing and financing activities for the six months ended June 30, 2015 and 2014:

	Six months ended   June 30,
	2015			2014
	(in millions)
Total cash provided by (used in):
Operating activities	$	162.9		$	220.5
Investing activities	(67.4		)	(27.4		)
Financing activities	(136.5		)	(164.1		)
(Decrease) increase in cash and cash equivalents	$	(41.0	)	$	29.0

Operating Activities

Net cash provided by operating activities was $162.9 million for the first six months of 2015 compared to $220.5 million for the same period of 2014. The $57.6 milliondecrease was due primarily to the $44.7 milliondecrease in net earnings. Net earnings included depreciation and amortization expense of $15.4 million and $14.1 million during the six months ended June 30, 2015 and 2014, respectively, and an unrealized net mark-to-market (gain) loss on derivatives of $(5.6) million and $7.6 million, respectively.

Investing Activities

Net cash used in investing activities was $67.4 million for the first six months of 2015 compared to $27.4 million in the first six months of 2014. The $40.0 million increase in cash used in investing activities in 2015 was due primarily to higher capital expenditures in the first six months of 2015 due to the plant turnarounds. See further discussion below under "Capital Expenditures."

Financing Activities

Net cash used in financing activities was $136.5 million for the first six months of 2015 compared to $164.1 million in the first six months of 2014, and primarily consists of distributions paid to our unitholders. The distributions paid are based on "Available Cash," as defined in our agreement of limited partnership. See further discussion below under "Partnership Distributions."

Capital Expenditures

Capital expenditures totaled $67.4 million during the six months ended June 30, 2015 as compared to $27.4 million during the six months ended June 30, 2014, with the increase primarily resulting from the completed turnarounds. We expect to make capital expenditures in the range of $80 million to $90 million in 2015. Capital expenditures are made to sustain our asset base, to increase capacity, to improve plant efficiency and to comply with various environmental, health and safety requirements. Due to the size, scope and timing of capital projects, certain projects require more than a year to complete. Planned capital expenditures and turnarounds are subject to change due to delays in regulatory approvals and/or permitting, unanticipated increases in cost, changes in scope and completion time, performance of third parties, adverse weather, defects in materials and workmanship, labor or material shortages, transportation constraints, and other unforeseen difficulties. Capital expenditures reduce the Available Cash for unitholder distributions.

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TERRA NITROGEN COMPANY, L.P.

General Partner

The General Partner is an indirect, wholly-owned subsidiary of CF Industries. Under the General Partner's governing documents, neither we nor the General Partner may make any bankruptcy filing (or take similar action) without the approval of the General Partner's independent directors, except in specified circumstances if there are not two independent directors on the General Partner's board of directors.

Partnership Distributions

We make quarterly distributions to holders of our general partner interest and limited partner interests based on Available Cash for the quarter as defined in our agreement of limited partnership. Available Cash is defined generally as all cash receipts less all cash disbursements, less certain reserves (including reserves for future operating and capital needs) established as the General Partner determines in its reasonable discretion to be necessary or appropriate. Changes in working capital affect Available Cash, as changes in the amount of cash invested in working capital items (such as increases in inventory and decreases in accounts payable) reduce Available Cash, while declines in the amount of cash invested in working capital items increase Available Cash. During the six months ended June 30, 2015 and 2014, we declared and paid partnership distributions of $136.5 million and $156.1 million, respectively.

We receive 99% of the Available Cash from the Operating Partnership and 1% is distributed by the Operating Partnership to the General Partner. Cash distributions from the Operating Partnership generally represent the Operating Partnership's Available Cash from operations. Our cash distributions are made 99.975% to common and Class B common unitholders and 0.025% to the General Partner except when cumulative distributions of Available Cash exceed specified target levels above the Minimum Quarterly Distributions (MQD) of $0.605 per unit. Under such circumstances, the General Partner is entitled to receive Incentive Distribution Rights.

On August 5, 2015, we announced a $2.36 cash distribution per common limited partnership unit, payable on August 31, 2015 to holders of record as of August 17, 2015. In the second quarter of 2015, we exceeded the cumulative MQD amounts and will distribute Available Cash as summarized in the following table:

	Income and Distribution Allocation
	Target Limit		Target Increment		Common Units		Class B Common Units		General Partner		Total
Minimum Quarterly Distributions	$	0.605	$	0.605	98.990	%	0.985	%	0.025	%	100.00	%
First Target	0.715		0.110		98.990	%	0.985	%	0.025	%	100.00	%
Second Target	0.825		0.110		85.859	%	0.985	%	13.156	%	100.00	%
Third Target	1.045		0.220		75.758	%	0.985	%	23.257	%	100.00	%
Final Target and Beyond	>1.045		—		50.505	%	0.985	%	48.510	%	100.00	%

The General Partner is required to remit the majority of cash distributions it receives from the Partnership, in excess of its 1% Partnership equity interest, to an affiliated company.

General Partner Option to Effect Mandatory Redemption of Partnership Units

At June 30, 2015, the General Partner and its affiliates owned 75.3% of our outstanding units. When not more than 25% of our issued and outstanding units are held by non-affiliates of the General Partner, as was the case at June 30, 2015, we, at the General Partner's sole discretion, may call or assign to the General Partner or its affiliates, our right to acquire all, but not less than all, such outstanding units held by non-affiliated persons. If the General Partner elects to acquire all outstanding units, we are required to give at least 30 but not more than 60 days' notice of our decision to purchase the outstanding units. The purchase price per unit will be the greater of (1) the average of the previous 20 trading days' closing prices as of the date five days before the purchase is announced or (2) the highest price paid by the General Partner or any of its affiliates for any unit within the 90 days preceding the date the purchase is announced.

Derivatives

We purchase natural gas at market prices to meet production requirements at our manufacturing facility. Natural gas prices are volatile, and our natural gas acquisition policy allows us to establish derivative positions that are associated with anticipated natural gas requirements. The derivatives that we use are primarily natural gas fixed price swaps and options traded in the over-the-counter markets.

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TERRA NITROGEN COMPANY, L.P.

Natural gas derivatives involve the risk of dealing with counterparties and their ability to meet the terms of the contracts. The counterparties to our natural gas derivatives are multi-national commercial banks, other major financial institutions and large energy companies. For derivatives that are in net asset positions, we are exposed to credit loss from nonperformance by the counterparties. Credit risk is controlled through the use of multiple counterparties, credit limits, credit monitoring procedures, cash collateral requirements and master netting arrangements.

Contractual Obligations

At June 30, 2015, there were no material changes to the Partnership's contractual obligations, critical accounting policies or off-balance sheet arrangements presented in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the year ended December 31, 2014.

Proposed Internal Revenue Service Regulation Impacting Master Limited Partnerships

We are a master limited partnership (MLP). Partnerships are generally not subject to federal income tax, although publicly-traded partnerships (such as TNCLP) are treated as corporations for federal income tax purposes and therefore are subject to federal income tax, unless at least 90% of the partnership's gross income is "qualifying income" as defined in Section 7704 of the Internal Revenue Code of 1986, as amended, and the partnership is not required to register as an investment company under the Investment Company Act of 1940. As we currently satisfy the requirements to be treated as a partnership for federal income tax purposes, no federal income taxes are paid by the Partnership.

On May 6, 2015, the Internal Revenue Service (IRS) published proposed regulations on the types of income and activities which constitute or generate qualifying income of a MLP. The proposed regulations would have the effect of limiting the types of income and activities which qualify under the MLP rules, subject to certain transition provisions. The IRS proposed regulations include as activities that generate qualifying income processing or refining and transportation activities with respect to any mineral or natural resource (including fertilizer), but reserve on specific proposals regarding fertilizer-related activities. Any change in the federal income tax treatment of income from fertilizer-related activities as qualifying income could have a material impact on the taxation of the Partnership and could have a material adverse impact on unitholder distributions. We continue to monitor these IRS regulatory activities.

19

TERRA NITROGEN COMPANY, L.P.

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to the impact of changes in the price of natural gas which we use in the manufacture of our nitrogen fertilizer products. Because natural gas prices are volatile, we manage the risk of changes in natural gas prices through the use of derivative financial instruments.

The derivative instruments that we use are primarily natural gas fixed price swaps and options. These contracts settle using NYMEX futures prices, which represent the basis for fair value at any given time. The derivatives are traded in months forward and settlements are scheduled to coincide with anticipated natural gas purchases during those future periods.

As of June 30, 2015 and December 31, 2014, we had open derivative contracts for 40.0 million MMBtus and 7.6 million MMBtus, respectively, of natural gas. A $1.00 per MMBtu increase in the forward curve prices of natural gas as of June 30, 2015, would result in a favorable change in the fair value of these derivative positions of $36.8 million, and a $1.00 per MMBtu decrease would change their fair value unfavorably by $36.3 million.

ITEM 4.    CONTROLS AND PROCEDURES

(a)    Disclosure Controls and Procedures.    TNGP's management, with the participation of TNGP's Principal Executive Officer and Principal Financial Officer, has evaluated the effectiveness of the Partnership's disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)) as of the end of the period covered by this report. Based on such evaluation, TNGP's Principal Executive Officer and Principal Financial Officer have concluded that, as of the end of such period, the Partnership's disclosure controls and procedures are effective in (i) ensuring that information required to be disclosed by the Partnership in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms and (ii) ensuring that information required to be disclosed by the Partnership in the reports that it files or submits under the Exchange Act is accumulated and communicated to TNGP's management, including TNGP's Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

(b)    Internal Control Over Financial Reporting.    There have not been any changes in the Partnership's internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended June 30, 2015 that have materially affected, or are reasonably likely to materially affect, the Partnership's internal control over financial reporting.

20

TERRA NITROGEN COMPANY, L.P.

FORWARD-LOOKING STATEMENTS

From time to time, in this Quarterly Report on Form 10-Q as well as in other written reports and oral statements, we make forward-looking statements that are not statements of historical fact and may involve a number of risks and uncertainties. These statements relate to analyses and other information that are based on forecasts of future results and estimates of amounts not yet determinable. These statements may also relate to our future prospects, developments and business strategies. We have used the words "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "predict," "project," and similar terms and phrases, including references to assumptions, to identify forward-looking statements in this report. These forward-looking statements are made based on currently available competitive, financial and economic data, our current expectations, estimates, forecasts and projections about the industries and markets in which we operate and management's beliefs and assumptions concerning future events affecting us. These statements are not guarantees of future performance and are subject to risks, uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control. Therefore, our actual results may differ materially from what is expressed in or implied by any forward-looking statements. We caution you not to place undue reliance on any forward-looking statements. We do not undertake any responsibility to release publicly any revisions to these forward-looking statements to take into account events or circumstances that occur after the date of this document. Additionally, we do not undertake any responsibility to provide updates regarding the occurrence of any unanticipated events which may cause actual results to differ from those expressed or implied by the forward-looking statements contained in this report.

Important factors that could cause actual results to differ materially from our expectations include, among others:

• risks related to our reliance on one production facility;

• the volatility of natural gas prices in North America;

• the cyclical nature of our business and the agricultural sector;

• the global commodity nature of our fertilizer products, the impact of global supply and demand on our 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 our products against which we 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 requirements;

• our inability to predict seasonal demand for our products accurately;

• risks involving derivatives and the effectiveness of our risk measurement and hedging activities;

• limited access to capital;

• acts of terrorism and regulations to combat terrorism;

• risks related to our dependence on and relationships with CF Industries;

• deterioration of global market and economic conditions;

• risks related to our partnership structure and control of the 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 the General Partner for operating, capital and other requirements;

• the conflicts of interest that may be faced by the executive officers of the General Partner, who operate both us and CF Industries; and

• tax risks to our common unitholders and changes in our treatment as a partnership for U.S. or state income tax purposes.

For the detailed discussion of factors that might affect our performance, see Item 1A, "Risk Factors," of our Annual Report on Form 10-K, filed with the SEC on February 26, 2015.

21

TERRA NITROGEN COMPANY, L.P.

PART II. OTHER INFORMATION

ITEM 6.    EXHIBITS

A list of exhibits filed with this report on Form 10-Q (or incorporated by reference to exhibits previously filed or furnished) is provided in the Exhibit Index on page 24 of this report.

22

TERRA NITROGEN COMPANY, L.P.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	TERRA NITROGEN COMPANY, L.P.
	By:	TERRA NITROGEN GP INC. as General Partner
Date: August 6, 2015	By:	/s/ W. ANTHONY WILL
		W. Anthony Will President and Chief Executive Officer, Chairman of the Board (Principal Executive Officer)
Date: August 6, 2015	By:	/s/ DENNIS P. KELLEHER
		Dennis P. Kelleher Senior Vice President and Chief Financial Officer (Principal Financial Officer)

23

TERRA NITROGEN COMPANY, L.P.

EXHIBIT INDEX

Exhibit No.	Description
10.1	Form of Terra Nitrogen GP Inc. Non-Employee Director Phantom Unit and Deferred Compensation Plan, amended and restated as of April 28, 2015.
31.1	Certification of the Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of the Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of the Principal Executive Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of the Principal Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101	The following financial information from Terra Nitrogen Company, L.P.'s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, formatted in XBRL (eXtensible Business Reporting Language): (1) Consolidated Balance Sheets, (2) Consolidated Statements of Operations, (3) Consolidated Statements of Partners' Capital, (4) Consolidated Statements of Cash Flows and (5) the Notes to Consolidated Financial Statements

24

EX-10.1

Exhibit 10.1

Terra Nitrogen GP Inc.

Non-Employee Director Phantom Unit and Deferred Compensation Plan

(Amended and Restated as of April 28, 2015)

1.Purpose of this Plan.

The purpose of this Terra Nitrogen GP Inc. (“TNGP”) Non-Employee Director Phantom Unit and Deferred Compensation Plan (the “Plan”) is to attract and retain qualified Non-Employee Directors to serve on the Board, to align the interests of the Non-Employee Directors with those of the common unit holders of Terra Nitrogen Company, L.P. (“TNCLP”), and to provide Non-Employee Directors with an opportunity to satisfy the TNGP unit ownership guidelines by deferring the receipt of certain compensation earned as a director. This Plan shall be unfunded for tax purposes and for purposes of Title I of ERISA. The Plan is intended to comply with all applicable laws, including Section 409A of the Code, and related Treasury guidance and regulations, and shall be operated and interpreted in accordance with this intention.

2.Definitions.

“Account” means an unfunded deferred compensation account established for a Participant.

“Board” means the board of directors of TNGP or any successor thereto.

“Change in Control” means a change in ownership or effective control of TNCLP or a change in the ownership of a substantial portion of the assets of TNCLP, each as defined in accordance with Section 409A.

“Closing Price” means, as of any date, (i) the closing sales price per Common Unit (A) as reported on the New York Stock Exchange - Composite Transactions for such date or (B) if the Common Units are listed on any other national stock exchange, as reported on the stock exchange composite tape for securities traded on such stock exchange for such date or, with respect to each of clauses (A) and (B), if there were no sales on such date, on the closest preceding date on which there were sales of Common Units or (ii) in the event there shall be no public market for the Common Units on such date, the fair market value per Common Unit as determined in good faith by the Board.

“Code” means the Internal Revenue Code of 1986, as amended.

“Common Units” means common units representing limited partner interests of Terra Nitrogen Company, L.P.

“Deferred Phantom Unit” means a Phantom Unit that has been deferred under this Plan.

“Director” means an individual who is a member of the Board.

“Distribution Closing Price” means, (i) for a Distribution Date that is based on a Participant’s Separation from Service, the average of the Closing Price for the 20 trading days immediately preceding such Participant’s Separation from Service and, (ii) for a Distribution Date that is based on a Change in Control, the Closing Price on the date of the consummation of the transaction, provided that if Common Units are surrendered in the Change in Control transaction for the right to receive a cash payment, the Distribution Closing Price shall be an amount in cash equal to the value per Common Unit received in the transaction by holders of Common Units.

Exhibit 10.1

“Distribution Date” means the earlier of (i) a Participant’s Separation from Service and (ii) a Change in Control of TNCLP.

“Effective Date” means the date on which the Board adopts the Plan, or such later date as is designated by the Board.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“Grant Date” means the date of the resolution of the Board, or otherwise determined by the Board, granting Phantom Units to a Participant.

“Non-Employee Director” means an individual who is a Director and who does not receive compensation for services as an employee of TNGP or any of its affiliates.

“Participant” means a Non-Employee Director who holds Phantom Units or elects to defer payment with respect to Phantom Units pursuant to the Plan.

“Phantom Unit” means an award that entitles the holder to a cash payment equal to the value of a TNCLP common unit.

“Section 409A” means Section 409A of the Code and the related Treasury guidance and regulations.

“Section 457A” means Section 457A of the Code and the related Treasury guidance and regulations.

“Removal for Cause” means a Participant’s Separation from Service as a Non-Employee Director to TNGP or any success thereto following such Participant’s (i) willful and continued failure to substantially perform the Participant’s duties as Non-Employee Director (other than any such failure resulting from the Participant’s incapacity due to physical or mental illness) or (ii) the willful engaging by the Participant in conduct which is demonstrably and materially injurious to the Company or its subsidiaries, monetarily or otherwise.  For purposes of clauses (i) and (ii) of this definition, (x) no act, or failure to act, on the Participant’s part shall be deemed “willful” unless done, or omitted to be done, by the Participant not in good faith and without reasonable belief that the Participant’s act, or failure to act, was in or not opposed to the best interest of the Company

“Separation from Service” means a termination of a Participant’s services as a Non-Employee Director to TNGP or any successor thereto for any reason, whether voluntary or involuntary, including by reason of a Participant’s death, provided that any such termination of service must constitute a “separation from service” within the meaning of Section 409A.

“Vesting Date” means the earlier of (i) a Participant’s Separation from Service that is other than a Removal for Cause or (ii) the one-year anniversary of the Grant Date, or such other date as specified by the Board.

3.Effective Date; Eligibility.

This Plan shall become effective as of the Effective Date. All Non-Employee Directors shall be eligible to receive Phantom Units and participate in the Plan.

Exhibit 10.1

4.Grants of Phantom Units; Terms and Conditions of Phantom Units.

(a)The Board may grant Phantom Units to a Non-Employee Director pursuant to a resolution it adopts that sets forth (i) the number of Phantom Units awarded to such Non-Employee Director (by formula or otherwise) and (ii) the Vesting Date of such Phantom Units.

(b)In the event of a cash distribution to holders of Common Units the record date for which is during the period beginning on the Grant Date and ending on the Vesting Date, each Participant who holds Phantom Units shall be entitled to receive an additional number of Phantom Units equal to (A) the number of Phantom Units that he or she holds as of the date on which such distribution is paid to holders of Common Units (the “Payment Date”) divided by the Closing Price per Common Unit on the Payment Date multiplied by (B) the value per Common Unit of the cash distribution. Each additional Phantom Unit that a Participant receives pursuant to this Section 4(b) shall be subject to all terms and conditions set forth in this Plan, including the right to receive additional Phantom Units with respect thereto, as provided in this Section 4(b).

(c)Subject to Section 4(e), on the Vesting Date, for each Phantom Unit that a Participant holds that is not otherwise deferred pursuant to Section 5, he or she will be entitled to receive a lump-sum cash payment equal to the average Closing Price per Common Unit for the 20-trading-day period that immediately precedes the Vesting Date. The cash payment described in this Section 4(c) shall be paid to such Participant within 45 days following the Vesting Date.

(d)Subject to Section 4(e), in the event of a Change in Control prior to the Vesting Date, for each Phantom Unit that is held by a Participant, such Participant will be entitled to receive a lump-sum cash payment, not later than the 10th day following the consummation of the Change in Control, equal to the Closing Price on the date the Change in Control is consummated, provided that if Common Units are surrendered in the Change in Control transaction for the right to receive a cash payment, such Participant shall instead be entitled to receive an amount in cash equal to the value per Common Unit received in the transaction by holders of Common Units.

(e)If the date of a Participant’s Separation from Service that is a Removal for Cause is prior to the earlier of (i) the Vesting Date and (ii) the date of a Change in Control, the Phantom Units shall be forfeited.

5.Election of Deferral.

(a)On or before December 31 of any year in which the Plan is in effect, each Non-Employee Director shall be entitled to make an irrevocable election to defer receipt of payment with respect to all or a specified portion of the Phantom Units that may be awarded to such director during the following year. Such election shall be made by delivering written notice to TNGP, in accordance with Section 13(e), setting forth the Participant’s irrevocable election as to the percentage of the Phantom Units that may be awarded to such Participant during the following year to be deferred and credited to the Participant’s Account. Any election to defer receipt of payment with respect to Phantom Units must be with respect to at least 25%, and may be up to 100%, of the total number of Phantom Units that may be awarded during the applicable year. Any such election shall become irrevocable as of December 31 of the year of election. The election set forth in such notice shall be given effect only for the year to which the election relates.

(b)A newly elected Non-Employee Director may elect to defer receipt of payment with respect to all or a portion of Phantom Units that may be awarded to such director during the remainder of

Exhibit 10.1

the calendar year in which such director joins the Board. Such election shall be made by delivering written notice to TNGP, in accordance with Section 13(e), setting forth the Participant’s irrevocable election as to the percentage of Phantom Units that may be awarded to such Participant during the remainder of the calendar year to be deferred and credited to the Participant’s Account. Any such election shall be made within 30 days following the date of such director’s election to the Board and shall be effective with respect to Phantom Units awarded on and after the first day of the month next following the date on which such election by such director becomes irrevocable and ending on the next following December 31. Any such election shall become irrevocable as of the 30th day following the date of such director’s election to the Board. The election set forth in such notice shall be given effect only for the year to which the election relates.

6.Deferred Compensation Accounts.

(a)Deferred Phantom Units shall be credited to a Participant’s Account on the date upon which the Phantom Units subject to the applicable election pursuant to Section 5 would otherwise become payable to the Participant. The number of such Deferred Phantom Units to be credited to a Participant’s Account shall be equal to the product of (i) the total number of Phantom Units that vest and would otherwise become payable on such date (including Phantom Units earned as a result of cash distributions to Common Unit holders) if they had not been deferred and (ii) the percentage of Phantom Units that the Participant elected to defer with respect to the year during which the Phantom Units were awarded.

(b)In the event of a cash distribution to holders of Common Units the record date for which is during the period beginning on the date the Deferred Phantom Units are credited to a Participant’s Account and ending on the Distribution Date, an additional number of Deferred Phantom Units shall be credited to a Participant’s Account equal to (i) the total number of Deferred Phantom Units credited to the Participant’s Account as of the Payment Date divided by the Closing Price per Common Unit on the Payment Date multiplied by (ii) the value per Common Unit of the cash distribution. Each additional Deferred Phantom Unit that is credited to a Participant’s Account pursuant to this Section 6 shall be subject to all terms and conditions set forth in this Plan, including the right to receive additional Deferred Phantom Units with respect thereto, as provided in this Section 6 and shall be distributed in accordance with Section 7.

7.Method of Distribution of Deferred Compensation.

(a)Except as otherwise provided in Section 12(d), no distribution of Deferred Phantom Units may be made except as provided in this Section.

(b)On a Participant’s Distribution Date, such Participant shall become entitled to payment with respect to all of the Deferred Phantom Units in such Participant’s Account.

(c)In the event the Distribution Date is based on a Participant’s Separation from Service, for each Deferred Phantom Unit, the Participant shall be entitled to receive a lump-sum cash payment, within 45 days following the Participant’s Separation from Service, equal to the Distribution Closing Price.

(d)In the event the Distribution Date is based on a Change in Control, for each Deferred Phantom Unit, the Participant shall be entitled to receive a lump-sum cash payment, not later than the 10th day following the consummation of the Change in Control, equal to the Distribution Closing Price.

(e)A Participant may not elect to change the Distribution Date.

Exhibit 10.1

8.Participant’s Rights in Account.

A Participant shall not have any interest in the Deferred Phantom Units credited to his or her Account until they are distributed in accordance with this Plan. All amounts deferred under the Plan shall remain the sole property of TNGP, subject to the claims of its general creditors and available for its use for whatever purposes are desired. With respect to amounts deferred, a Participant shall be merely a general creditor of TNGP, and the obligation of TNGP hereunder shall be purely contractual and shall not be funded or secured in any way.

9.Administration.

This Plan shall be administered by the Board or a committee appointed by the Board to administer, interpret and make determinations under the Plan. The Board shall be authorized to interpret this Plan, to establish, amend and rescind any rules or regulations relating to this Plan and to make any other determinations which it believes necessary or advisable for the administration of this Plan. The Board may correct any defect or supply any omission or reconcile any inconsistency in this Plan in the manner and to the extent the Board deems desirable to carry it into effect. Any decision of the Board shall be final, binding and conclusive.

10.Adjustment in Event of Changes in Capitalization.

In the event of any change in the outstanding Common Units by reason of any unit split, unit dividend, recapitalization, merger, consolidation, reorganization, combination or exchange of units or other similar event, the Board may in its discretion, either equitably adjust the number of Common Units to which outstanding Phantom Units or Deferred Phantom Units relate, in any such manner as may be necessary, in the Board’s discretion, to avoid enhancement or diminution of rights of Participants.

11.Amendment and Termination.

(a)The Plan may at any time be amended, modified or terminated by the Board; provided, however, that no distribution of benefits shall occur upon termination of this Plan unless applicable requirements of Section 409A have been met. No amendment, modification or termination shall, without the consent of a Participant, adversely affect such Participant’s rights with respect to the Phantom Units or the Deferred Phantom Units accrued in his or her Account.

(b)Notwithstanding any provision of this Plan to the contrary, in light of the uncertainty with respect to the proper application of Section 409A and Section 457A, the Board reserves the right to (i) adopt such amendments to the Plan and appropriate policies and procedures, including amendments and policies with retroactive effect, that the Board determines necessary or appropriate to preserve the intended tax treatment of the Phantom Units and the Deferred Phantom Units deferred under the Plan and/or (ii) take such other actions as the Board determines necessary or appropriate to avoid the imposition of an additional tax under Section 409A or Section 457A. In any case, each Participant shall be solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on such Participant in connection with this Plan (including any taxes and penalties under Section 409A or Section 457A), and neither TNGP nor any of its affiliates shall have any obligation to indemnify or otherwise hold the Participant harmless from any or all of such taxes or penalties.

Exhibit 10.1

12.Section 409A.

(a)It is intended that the provisions of this Plan comply with Section 409A, and all provisions of this Plan shall be construed and interpreted in a manner consistent with the requirements for avoiding taxes or penalties under Section 409A.

(b)Neither a Participant nor any of a Participant’s creditors or beneficiaries shall have the right to subject the Phantom Units or the Deferred Phantom Units in such Participant’s Account to any anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment. Except as permitted under Section 409A, any amounts payable to a Participant or for the benefit of a Participant with respect to the Phantom Units or the Deferred Phantom Units in such Participant’s Account may not be reduced by, or offset against, any amount owing by the Participant to TNGP or any of its affiliates.

(c)If, at the time of a Participant’s separation from service (within the meaning of Section 409A), (i) such Participant shall be a specified employee (within the meaning of Section 409A and using the identification methodology selected by TNGP from time to time) and (ii) TNGP shall make a good faith determination that an amount payable under this Plan constitutes deferred compensation (within the meaning of Section 409A) the payment of which is required to be delayed pursuant to the six-month delay rule set forth in Section 409A in order to avoid taxes or penalties under Section 409A, then TNGP shall not pay such amount on the otherwise scheduled payment date but shall instead pay it, without interest, on the first business day after such six-month period.

(d)If necessary to comply with a domestic relations order, as defined in Code Section 414(p)(1)(B), pursuant to which a court has determined that a spouse or former spouse of a Participant has an interest in the Participant’s Phantom Units or Deferred Phantom Units, the Board shall have the right to immediately distribute the spouse or former spouse’s interest in the Participant’s Phantom Units or Deferred Phantom Units, as applicable, to such spouse or former spouse, to the extent permitted by Section 409A.

13.Miscellaneous.

(a)Common Unit Ownership Guidelines. Deferred Phantom Units will be counted towards the common unit ownership guidelines with respect to the Participant.

(b)No Right to Nomination. Nothing contained in this Plan shall confer upon any Director the right to be nominated for re-election to the Board.

(c)Withholding. TNGP shall have the right to deduct from any award under this Plan any federal, state or local income or other taxes required by law to be withheld with respect to such award, as it may deem necessary or appropriate, in its sole discretion.

(d)Governing Law. This Plan shall be governed by and construed in accordance with the laws of Delaware, without regard to conflicts of laws principles.

(e)Notices. All communications to TNGP shall be sent to the following address:

Terra Nitrogen GP Inc.

4 Parkway North, Suite 400

Deerfield, Illinois

Attn: General Counsel

Exhibit 10.1

All communications to a Participant shall be sent to the last known address of the Participant.

EX-31.1

TERRA NITROGEN COMPANY, L.P.

Exhibit 31.1

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, W. Anthony Will, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Terra Nitrogen Company, L.P.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	August 6, 2015	/s/ W. ANTHONY WILL
		W. Anthony Will President and Chief Executive Officer, Chairman of the Board of Terra Nitrogen GP Inc., general partner of Terra Nitrogen Company, L.P. (Principal Executive Officer)

EX-31.2

TERRA NITROGEN COMPANY, L.P.

Exhibit 31.2

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Dennis P. Kelleher, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Terra Nitrogen Company, L.P.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	August 6, 2015	/s/ DENNIS P. KELLEHER
		Dennis P. Kelleher Senior Vice President and Chief Financial Officer of Terra Nitrogen GP Inc., general partner of Terra Nitrogen Company, L.P. (Principal Financial Officer)

EX-32.1

TERRA NITROGEN COMPANY, L.P.

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Terra Nitrogen Company, L.P. (TNCLP) for the quarterly period ended June 30, 2015 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, W. Anthony Will, President and Chief Executive Officer of Terra Nitrogen GP Inc., the general partner of TNCLP, hereby certify pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and

2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of TNCLP as of and for the periods covered in the Report.

/s/ W. ANTHONY WILL
W. Anthony Will President and Chief Executive Officer, Chairman of the Board of Terra Nitrogen GP Inc., general partner of Terra Nitrogen Company, L.P. (Principal Executive Officer)
Date:	August 6, 2015

EX-32.2

TERRA NITROGEN COMPANY, L.P.

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Terra Nitrogen Company, L.P. (TNCLP) for the quarterly period ended June 30, 2015 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Dennis P. Kelleher, Senior Vice President and Chief Financial Officer of Terra Nitrogen GP Inc., the general partner of TNCLP, hereby certify pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and

2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of TNCLP as of and for the periods covered in the Report.

/s/ DENNIS P. KELLEHER
Dennis P. Kelleher Senior Vice President and Chief Financial Officer of Terra Nitrogen GP Inc., general partner of Terra Nitrogen Company, L.P. (Principal Financial Officer)
Date:	August 6, 2015

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Net Earnings per Common Unit (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Net earnings per limited partner common unit
Net earnings	$ 99.3	$ 100.1	$ 158.3	$ 203.0
Weighted-average Common Units outstanding	18,500,000	18,500,000	18,500,000	18,500,000
Net earnings per Common Unit (in dollars per unit)	$ 3.31	$ 3.16	$ 5.34	$ 6.42
Dilutive TNCLP units outstanding	0	0	0	0
General Partner
Net earnings per limited partner common unit
Net earnings	$ 37.1	$ 40.7	$ 58.0	$ 82.2
Less: Net earnings allocable to General Partner	37.1	40.7	58.0	82.2
Common Units | Class B Common Units
Net earnings per limited partner common unit
Net earnings	0.9	1.0	1.5	2.0
Net earnings allocated	0.9	1.0	1.5	2.0
Common Units | Common Units
Net earnings per limited partner common unit
Net earnings	61.3	58.4	98.8	118.8
Net earnings allocated	$ 61.3	$ 58.4	$ 98.8	$ 118.8

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Agreement of Limited Partnership

6 Months Ended

Jun. 30, 2015

Partners' Capital Notes [Abstract]

Agreement of Limited Partnership

Agreement of Limited Partnership

We make quarterly distributions to holders of our general partner interest and limited partner interests based on Available Cash for the quarter as defined in our agreement of limited partnership. Available Cash is defined generally as all cash receipts less all cash disbursements, less certain reserves (including reserves for future operating and capital needs) established as the General Partner determines in its reasonable discretion to be necessary or appropriate. Changes in working capital affect Available Cash as changes in the amount of cash invested in working capital items (such as increases in inventory and decreases in accounts payable) reduce Available Cash, while declines in the amount of cash invested in working capital items increase Available Cash. During the six months ended June 30, 2015 and 2014, we declared and paid partnership distributions of $136.5 million and $156.1 million, respectively.

We receive 99% of the Available Cash from the Operating Partnership and 1% is distributed by the Operating Partnership to the General Partner. Cash distributions from the Operating Partnership generally represent the Operating Partnership's Available Cash from operations. Our cash distributions are made 99.975% to common and Class B common unitholders and 0.025% to the General Partner except when cumulative distributions of Available Cash exceed specified target levels above the Minimum Quarterly Distributions (MQD) of $0.605 per unit. Under such circumstances, the General Partner is entitled to receive Incentive Distribution Rights.

On August 5, 2015, we announced a $2.36 cash distribution per common limited partnership unit, payable on August 31, 2015 to holders of record as of August 17, 2015. In the second quarter of 2015, we exceeded the cumulative MQD amounts and will distribute Available Cash as summarized in the following table:

	Income and Distribution Allocation
	Target Limit		Target Increment		Common Units		Class B Common Units		General Partner		Total
Minimum Quarterly Distributions	$	0.605	$	0.605	98.990	%	0.985	%	0.025	%	100.00	%
First Target	0.715		0.110		98.990	%	0.985	%	0.025	%	100.00	%
Second Target	0.825		0.110		85.859	%	0.985	%	13.156	%	100.00	%
Third Target	1.045		0.220		75.758	%	0.985	%	23.257	%	100.00	%
Final Target and Beyond	>1.045		—		50.505	%	0.985	%	48.510	%	100.00	%

The General Partner is required to remit the majority of cash distributions it receives from the Partnership, in excess of its 1% Partnership equity interest, to an affiliated company.

As of June 30, 2015, the General Partner and its affiliates owned 75.3% of our outstanding units. When not more than 25% of our issued and outstanding units are held by non-affiliates of the General Partner, as was the case at June 30, 2015, we, at the General Partner's sole discretion, may call, or assign to the General Partner or its affiliates, our right to acquire all, but not less than all, such outstanding units held by non-affiliated persons. If the General Partner elects to acquire all outstanding units, we are required to give at least 30 but not more than 60 days' notice of our decision to purchase the outstanding units. The purchase price per unit will be the greater of (1) the average of the previous 20 trading days' closing prices as of the date five days before the purchase is announced or (2) the highest price paid by the General Partner or any of its affiliates for any unit within the 90 days preceding the date the purchase is announced.

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Property, Plant and Equipment, net (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Property, plant and equipment, net
Document Period End Date		Jun. 30, 2015
Gross property, plant and equipment	$ 560.0	$ 560.0		$ 520.3
Less: Accumulated depreciation and amortization	254.0	254.0		260.9
Net property, plant and equipment	306.0	306.0		259.4
Loss on disposal of property, plant and equipment	0.2	1.2	$ 0.0
Net capitalized turnaround costs:
Beginning balance		16.7	22.7
Additions		30.7	0.3
Depreciation		(5.0)	(3.2)
Ending balance	42.4	42.4	$ 19.8
Land
Property, plant and equipment, net
Gross property, plant and equipment	1.6	1.6		1.6
Buildings and improvements
Property, plant and equipment, net
Gross property, plant and equipment	14.4	14.4		8.1
Machinery and equipment
Property, plant and equipment, net
Gross property, plant and equipment	530.0	530.0		401.4
Construction in progress
Property, plant and equipment, net
Gross property, plant and equipment	$ 14.0	$ 14.0		$ 109.2

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Fair Value Measurements (Details) - Recurring basis - USD ($) $ in Millions	Jun. 30, 2015	Dec. 31, 2014
Quoted Market Prices in Active Markets (Level 1)
Fair value measurements
Cash and cash equivalents	$ 72.0	$ 113.0
Unrealized gains on natural gas derivatives	0.0
Total assets at fair value	72.0	113.0
Significant Other Observable Inputs (Level 2)
Fair value measurements
Unrealized gains on natural gas derivatives	3.1	0.1
Total assets at fair value	3.1	0.1
Unrealized losses on natural gas derivatives	(1.1)	(3.6)
Total liabilities at fair value	(1.1)	(3.6)
Total
Fair value measurements
Cash and cash equivalents	72.0	113.0
Unrealized gains on natural gas derivatives	3.1	0.1
Total assets at fair value	75.1	113.1
Unrealized losses on natural gas derivatives	(1.1)	(3.6)
Total liabilities at fair value	$ (1.1)	$ (3.6)

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Related Party Transactions (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2015 USD ($)	Jun. 30, 2014 USD ($)	Jun. 30, 2015 USD ($) Term $ / Car	Jun. 30, 2014 USD ($)	Dec. 31, 2014 USD ($)
Related party transactions
Document Period End Date			Jun. 30, 2015
Affiliate of General Partner
Related party transactions
Payroll, payroll-related expenses and other employee related benefits	$ 6,500,000	$ 5,900,000	$ 14,100,000	$ 11,500,000
Due From (To) Affiliates, Net	21,400,000		$ 21,400,000		$ 21,000,000
Services and Offtake Agreement | Affiliate of General Partner
Related party transactions
Extended term of agreement			1 year
Services and Offtake Agreement | CF Industries
Related party transactions
Allocated expenses	4,000,000	3,800,000	$ 7,900,000	7,700,000
Lease Agreements | Affiliate of General Partner
Related party transactions
Rental income received	$ 200,000	$ 200,000	$ 300,000	$ 300,000
Lease Agreements | Affiliate of General Partner | Ammonia assets
Related party transactions
Term of agreement			5 years
Related Party Transaction Number of Extensions Possible in Agreement Term | Term			3
Base quarterly rent of leased asset			$ 100,000
Lease Agreements | Affiliate of General Partner | Rail cars
Related party transactions
Extended term of agreement			1 year
Term of agreement			1 year
Quarterly rent per leased asset (in dollars per car) | $ / Car			3,600

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New Accounting Standards

6 Months Ended

Jun. 30, 2015

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

New Accounting Standards

New Accounting Standards

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers, which supersedes the revenue recognition requirements in Accounting Standards Codification (ASC) 605, Revenue Recognition. This ASU is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments. Additionally, information concerning the costs to obtain and fulfill a contract, including assets to be recognized, is to be disclosed. In July 2015, the FASB voted to defer the effective date of this ASU to December 15, 2017 for interim and annual reporting periods beginning after that date. Early adoption of the standard as of December 15, 2016 (for interim and annual reporting periods beginning after that date) is permitted by the FASB. We are currently evaluating the impact of the adoption of this ASU on our consolidated financial statements.

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CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Jun. 30, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 72.0	$ 113.0
Due from affiliates of the General Partner	23.2	25.2
Accounts receivable	0.3	0.4
Inventories	9.4	9.6
Prepaid expenses and other current assets	2.4	0.3
Total current assets	107.3	148.5
Property, plant and equipment, net	306.0	259.4
Other assets	8.4	7.9
Total assets	421.7	415.8
Current liabilities:
Accounts payable and accrued expenses	21.2	32.4
Due to affiliates of the General Partner	1.8	4.2
Other current liabilities	0.5	3.6
Total current liabilities	23.5	40.2
Other liabilities	1.5	0.7
Partners' capital:
General partner's interest	77.6	70.0
Total partners' capital	396.7	374.9
Total liabilities and partners' capital	421.7	415.8
Common Units
Partners' capital:
Limited partners' interests, 18,501,576 Common Units authorized, issued and outstanding; 184,072 Class B Common Units authorized, issued and outstanding	316.7	302.7
Class B Common Units
Partners' capital:
Limited partners' interests, 18,501,576 Common Units authorized, issued and outstanding; 184,072 Class B Common Units authorized, issued and outstanding	$ 2.4	$ 2.2

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Operating Activities:
Net earnings	$ 158.3	$ 203.0
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	15.4	14.1
Unrealized (gain) loss on derivatives	(5.6)	7.6
Loss on disposal of property, plant and equipment	1.2	0.0
Changes in operating assets and liabilities:
Accounts receivable	0.1	0.4
Inventories	0.2	(1.9)
Accounts payable and accrued expenses	(7.0)	(3.8)
Due to/from affiliates of the General Partner	(0.4)	2.3
Other assets and liabilities	0.7	(1.2)
Net cash provided by operating activities	162.9	220.5
Investing Activities:
Additions to property, plant and equipment	(67.4)	(27.4)
Net cash used in investing activities	(67.4)	(27.4)
Financing Activities:
Partnership distributions paid	(136.5)	(156.1)
Other	0.0	(8.0)
Net cash used in financing activities	(136.5)	(164.1)
(Decrease) increase in cash and cash equivalents	(41.0)	29.0
Cash and cash equivalents at beginning of period	113.0	86.9
Cash and cash equivalents at end of period	$ 72.0	$ 115.9

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Property, Plant and Equipment, net (Tables)

6 Months Ended

Jun. 30, 2015

Property, Plant and Equipment [Abstract]

Schedule of property, plant and equipment, net

Property, plant and equipment, net consisted of the following:

	June 30, 2015		December 31, 2014
	(in millions)
Land	$	1.6	$	1.6
Buildings and improvements	14.4		8.1
Machinery and equipment	530.0		401.4
Construction in progress	14.0		109.2
	560.0		520.3
Less: Accumulated depreciation and amortization	254.0		260.9
	$	306.0	$	259.4

Summary of plant turnaround activity

The following is a summary of plant turnaround activity:

	Six months ended   June 30,
	2015			2014
	(in millions)
Net capitalized turnaround costs:
Beginning balance	$	16.7		$	22.7
Additions	30.7			0.3
Depreciation	(5.0		)	(3.2		)
Ending balance	$	42.4		$	19.8

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Agreement of Limited Partnership (Details) $ / shares in Units, $ in Millions		6 Months Ended
	Aug. 05, 2015 $ / shares	Jun. 30, 2015 USD ($) $ / Unit	Jun. 30, 2014 USD ($)
Agreement of limited partnership
Declared partnership distributions | $		$ 136.5	$ 156.1
Cash partnership distributions paid | $		$ 136.5	$ 156.1
Available cash received from operating partnership (as a percent)		99.00%
Number of average trading days' closing prices used to determine the purchase price of outstanding units of non-affiliates		20 days
Number of days before the purchase announcement is made, as a basis for determining the purchase price of outstanding units of non-affiliates		5 days
Minimum
Agreement of limited partnership
Percentage of ownership of non-affiliates of the General Partner allowing majority owner to acquire outstanding units held by non-affiliated persons		25.00%
Notice period for making decision to purchase the outstanding units		30 days
Maximum
Agreement of limited partnership
Notice period for making decision to purchase the outstanding units		60 days
Minimum Quarterly Distributions
Agreement of limited partnership
Target Limit		0.605
Target Increment		0.605
Income and distribution allocation (as a percent)		100.00%
First Target
Agreement of limited partnership
Target Limit		0.715
Target Increment		0.110
Income and distribution allocation (as a percent)		100.00%
Second Target
Agreement of limited partnership
Target Limit		0.825
Target Increment		0.110
Income and distribution allocation (as a percent)		100.00%
Third Target
Agreement of limited partnership
Target Limit		1.045
Target Increment		0.220
Income and distribution allocation (as a percent)		100.00%
Final Target and Beyond
Agreement of limited partnership
Income and distribution allocation (as a percent)		100.00%
Final Target and Beyond | Minimum
Agreement of limited partnership
Target Limit		1.045
Common and Class B Common Units
Agreement of limited partnership
Cash distribution made, excluding when cumulative distribution is specified, (as a percent)		99.975%
Common Units | Minimum Quarterly Distributions
Agreement of limited partnership
Income and distribution allocation (as a percent)		98.99%
Common Units | First Target
Agreement of limited partnership
Income and distribution allocation (as a percent)		98.99%
Common Units | Second Target
Agreement of limited partnership
Income and distribution allocation (as a percent)		85.859%
Common Units | Third Target
Agreement of limited partnership
Income and distribution allocation (as a percent)		75.758%
Common Units | Final Target and Beyond
Agreement of limited partnership
Income and distribution allocation (as a percent)		50.505%
Class B Common Units | Minimum Quarterly Distributions
Agreement of limited partnership
Income and distribution allocation (as a percent)		0.985%
Class B Common Units | First Target
Agreement of limited partnership
Income and distribution allocation (as a percent)		0.985%
Class B Common Units | Second Target
Agreement of limited partnership
Income and distribution allocation (as a percent)		0.985%
Class B Common Units | Third Target
Agreement of limited partnership
Income and distribution allocation (as a percent)		0.985%
Class B Common Units | Final Target and Beyond
Agreement of limited partnership
Income and distribution allocation (as a percent)		0.985%
General Partner
Agreement of limited partnership
Available cash distributed from operating partnership to General Partner (as a percent)		1.00%
Cash distribution made, excluding when cumulative distribution is specified, (as a percent)		0.025%
Partnership equity interest (as a percent)		1.00%
Percentage of outstanding units owned by the General Partner and its affiliates		75.30%
Period within which highest price is paid for any unit preceding the date the purchase is announced used to determine the purchase price of outstanding units of non-affiliates		90 days
General Partner | Minimum Quarterly Distributions
Agreement of limited partnership
Income and distribution allocation (as a percent)		0.025%
General Partner | First Target
Agreement of limited partnership
Income and distribution allocation (as a percent)		0.025%
General Partner | Second Target
Agreement of limited partnership
Income and distribution allocation (as a percent)		13.156%
General Partner | Third Target
Agreement of limited partnership
Income and distribution allocation (as a percent)		23.257%
General Partner | Final Target and Beyond
Agreement of limited partnership
Income and distribution allocation (as a percent)		48.51%
Subsequent Event
Agreement of limited partnership
Cash distribution declared per common limited partnership unit (in dollars per unit) | $ / shares	$ 2.36

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Background and Basis of Presentation

6 Months Ended

Jun. 30, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Background and Basis of Presentation

Background and Basis of Presentation

Terra Nitrogen Company, L.P. (TNCLP, we, our or us) is a Delaware limited partnership that produces nitrogen fertilizer products. Our principal products are anhydrous ammonia (ammonia) and urea ammonium nitrate solutions (UAN), which we manufacture at our facility in Verdigris, Oklahoma.

We conduct our operations through an operating partnership, Terra Nitrogen, Limited Partnership (TNLP or the Operating Partnership, and collectively with TNCLP, the Partnership). Terra Nitrogen GP Inc. (TNGP or the General Partner), a Delaware corporation, is the General Partner of both TNCLP and TNLP and owns a consolidated 0.05% general partner interest in the Partnership. The General Partner is an indirect, wholly-owned subsidiary of CF Industries Holdings, Inc. (CF Industries), a Delaware corporation. Ownership of TNCLP is comprised of the general partner interests and the limited partner interests. Limited partner interests are represented by common units, which are listed for trading on the New York Stock Exchange under the symbol "TNH," and Class B common units. As of June 30, 2015, we had 18,501,576 common units and 184,072 Class B common units issued and outstanding. CF Industries through its subsidiaries owned 13,889,014 common units (representing approximately 75% of the total outstanding common units) and all of the Class B common units as of June 30, 2015.

We are a master limited partnership (MLP). Partnerships are generally not subject to federal income tax, although publicly-traded partnerships (such as TNCLP) are treated as corporations for federal income tax purposes (and therefore are subject to federal income tax), unless at least 90% of the partnership's gross income is "qualifying income" as defined in Section 7704 of the Internal Revenue Code of 1986, as amended, and the partnership is not required to register as an investment company under the Investment Company Act of 1940. As we currently satisfy the requirements to be treated as a partnership for federal income tax purposes, no federal income taxes are paid by the Partnership.

On May 6, 2015, the Internal Revenue Service (IRS) published proposed regulations on the types of income and activities which constitute or generate qualifying income of MLP. The proposed regulations would have the effect of limiting the types of income and activities which qualify under the MLP rules, subject to certain transition provisions. The proposed regulations include as activities that generate qualifying income processing or refining and transportation activities with respect to any mineral or natural resource (including fertilizer), but reserve on specific proposals regarding fertilizer-related activities. Any change in the federal income tax treatment of income from fertilizer-related activities as qualifying income could have a material impact on the taxation of the Partnership and could have a material adverse impact on unitholder distributions. We continue to monitor these IRS regulatory activities.

The accompanying unaudited interim consolidated financial statements have been prepared on the same basis as our audited consolidated financial statements for the year ended December 31, 2014, in accordance with accounting principles generally accepted in the United States for interim financial reporting. In the opinion of management, these statements reflect all adjustments, consisting only of normal and recurring adjustments, that are necessary for the fair representation of the information for the periods presented. The unaudited interim consolidated financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. Operating results for any period presented apply to that period only and are not necessarily indicative of results for any future period.

The preparation of the unaudited interim consolidated financial statements requires management to make use of estimates and assumptions that affect the reported amount of assets and liabilities, revenue and expenses and certain financial statement disclosures. Actual results could differ from these estimates. Significant estimates and assumptions in these unaudited interim consolidated financial statements include net realizable value of inventories, environmental remediation liabilities, environmental and litigation contingencies, useful lives of property, plant and equipment, and the assumptions used in the evaluation of potential impairment of property, plant and equipment.

The accompanying unaudited interim consolidated financial statements should be read in conjunction with our audited consolidated financial statements and related disclosures included in our 2014 Annual Report on Form 10-K filed with the SEC on February 26, 2015.

Throughout this document, the term "affiliates of the General Partner" refers to consolidated subsidiaries of CF Industries, including TNGP.

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CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares	Jun. 30, 2015	Dec. 31, 2014
Common Units
Limited Partners' interests, common units authorized	18,501,576	18,501,576
Common units issued	18,501,576	18,501,576
Common units outstanding	18,501,576	18,501,576
Class B Common Units
Limited Partners' interests, common units authorized	184,072	184,072
Common units issued	184,072	184,072
Common units outstanding	184,072	184,072

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Agreement of Limited Partnership (Tables)

6 Months Ended

Jun. 30, 2015

Partners' Capital Notes [Abstract]

Summary of available cash distribution

In the second quarter of 2015, we exceeded the cumulative MQD amounts and will distribute Available Cash as summarized in the following table:

	Income and Distribution Allocation
	Target Limit		Target Increment		Common Units		Class B Common Units		General Partner		Total
Minimum Quarterly Distributions	$	0.605	$	0.605	98.990	%	0.985	%	0.025	%	100.00	%
First Target	0.715		0.110		98.990	%	0.985	%	0.025	%	100.00	%
Second Target	0.825		0.110		85.859	%	0.985	%	13.156	%	100.00	%
Third Target	1.045		0.220		75.758	%	0.985	%	23.257	%	100.00	%
Final Target and Beyond	>1.045		—		50.505	%	0.985	%	48.510	%	100.00	%

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2015	Aug. 05, 2015
Document and Entity Information
Entity Registrant Name	TERRA NITROGEN CO L P /DE
Entity Central Index Key	0000879575
Document Type	10-Q
Document Period End Date	Jun. 30, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q2
Entity Common Stock, Shares Outstanding		18,501,576

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Net Earnings per Common Unit (Tables)

6 Months Ended

Jun. 30, 2015

Earnings Per Unit [Abstract]

Schedule of calculation for net earnings per common unit

The following table provides a calculation for net earnings per common unit for the three and six months ended June 30, 2015 and 2014:

	Three months ended   June 30,				Six months ended   June 30,
	2015		2014		2015		2014
	(in millions, except per unit amounts)
Basic earnings per Common Unit:
Net earnings	$	99.3	$	100.1	$	158.3	$	203.0
Less: Net earnings allocable to General Partner	37.1		40.7		58.0		82.2
Less: Net earnings allocable to Class B Common Units	0.9		1.0		1.5		2.0
Net earnings allocable to Common Units	$	61.3	$	58.4	$	98.8	$	118.8
Weighted-average Common Units outstanding	18.5		18.5		18.5		18.5
Net earnings per Common Unit	$	3.31	$	3.16	$	5.34	$	6.42

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CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Net sales:
Other income	$ 0.2	$ 0.1	$ 0.4	$ 0.4
Total	153.6	167.5	280.2	345.2
Cost of goods sold:
Materials, supplies and services	43.4	57.4	97.4	122.0
Gross margin	103.7	104.2	168.7	211.7
Other general and administrative expenses	0.4	0.3	2.5	1.0
Allocation of net earnings:
Net earnings	$ 99.3	$ 100.1	$ 158.3	$ 203.0
Net earnings per Common Unit (in dollars per unit)	$ 3.31	$ 3.16	$ 5.34	$ 6.42
Affiliate of General Partner
Net sales:
Product sales to an affiliate of the General Partner	$ 153.2	$ 167.2	$ 279.5	$ 344.5
Other income	0.2	0.2	0.3	0.3
Cost of goods sold:
Services provided by affiliates of the General Partner	6.5	5.9	14.1	11.5
Selling, general and administrative services provided by affiliates of the General Partner	4.0	3.8	7.9	7.7
General Partner
Allocation of net earnings:
Net earnings	37.1	40.7	58.0	82.2
Common Units | Class B Common Units
Allocation of net earnings:
Net earnings	0.9	1.0	1.5	2.0
Common Units | Common Units
Allocation of net earnings:
Net earnings	$ 61.3	$ 58.4	$ 98.8	$ 118.8

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Derivative Financial Instruments

6 Months Ended

Jun. 30, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Derivative Financial Instruments

Derivative financial instruments are executed on our behalf by an affiliate of the General Partner to reduce our exposure to changes in commodity prices for natural gas. Natural gas is the largest and most volatile component of the manufacturing cost for nitrogen-based fertilizers.

The derivatives that we use are primarily natural gas fixed price swaps and options traded in the over-the-counter (OTC) markets. The derivative contract prices are based on NYMEX future prices based on physical delivery of natural gas at the Henry Hub in Louisiana, the most common and financially-liquid location of reference for derivative financial instruments related to natural gas. However, we purchase natural gas for our manufacturing facility from suppliers whose prices are based primarily on the ONEOK index (based on physical delivery of natural gas in Oklahoma, rather than at the Henry Hub). This creates a location basis differential between the derivative contract price and the price we pay for physical delivery of natural gas. Accordingly, the prices underlying the derivative financial instruments we use may not exactly match the prices of natural gas we purchase and consume. These natural gas derivative contracts are scheduled to coincide with our anticipated purchases of natural gas used to manufacture nitrogen products during those future periods. We use natural gas derivatives as an economic hedge of gas price risk, but without the application of hedge accounting.

We report derivatives on our consolidated balance sheets at fair value. Changes in fair value are recognized in cost of sales in the period of change. Cash flows related to natural gas derivatives are classified as operating activities.

The gross fair values of derivatives on our consolidated balance sheets are shown below. All balance sheet amounts from derivatives arise from natural gas derivatives that are not designated as hedging instruments. For additional information on derivative fair values, see Note 7—Fair Value Measurements.

	June 30, 2015			December 31, 2014
	(in millions)
Derivative Assets
Unrealized gains in other current assets	$	1.9		$	0.1
Unrealized gains in other assets	1.2			—
Total derivative assets	3.1			0.1
Derivative Liabilities
Unrealized losses in other current liabilities	(0.5		)	(3.6		)
Unrealized losses in other liabilities	(0.6		)	—
Total derivative liabilities	(1.1		)	(3.6		)
Net derivative assets (liabilities)	$	2.0		$	(3.5	)

The effect of derivatives in our consolidated statements of operations is shown below. All amounts arise from natural gas derivatives that are not designated as hedging instruments and are recorded in cost of goods sold.

	Three months ended   June 30,						Six months ended   June 30,
	2015			2014			2015			2014
	(in millions)
Unrealized mark-to-market gains (losses)	$	2.6		$	(4.9	)	$	6.5		$	(8.9	)
Realized (losses) gains	(0.8		)	4.9			(5.4		)	14.8
Net derivative gains	$	1.8		$	—		$	1.1		$	5.9

As of June 30, 2015 and December 31, 2014, we had open derivative contracts for 40.0 million MMBtus and 7.6 million MMBtus, respectively, of natural gas. For the six months ended June 30, 2015, we used derivatives to cover approximately 72% of our natural gas consumption.

As of June 30, 2015 and December 31, 2014, the aggregate fair value of the derivative instruments with credit-risk-related contingent features in a net liability position were $1.1 million and $3.6 million, respectively, which also approximates the fair value of the maximum amount of additional collateral that would need to be posted or assets needed to settle the obligations if the credit-risk-related contingent features were triggered at the reporting dates. At both June 30, 2015 and December 31, 2014, we had no cash collateral on deposit with counterparties for derivative contracts. The credit support documents executed in connection with International Swaps and Derivatives Association (ISDA) agreements generally provide the right to set off collateral against amounts owing under the ISDA agreements upon the occurrence of a default or a specified termination event.

The following table presents amounts relevant to offsetting of our derivative assets and liabilities as of June 30, 2015 and December 31, 2014:

	Gross and net amounts presented in consolidated balance sheets(1)			Gross amounts not offset in consolidated balance sheets
				Financial instruments		Cash collateral received (pledged)		Net amount
	(in millions)
June 30, 2015
Total derivative assets	$	3.1		$	1.1	$	—	$	2.0
Total derivative liabilities	1.1			1.1		—		—
Net derivative assets	$	2.0		$	—	$	—	$	2.0
December 31, 2014
Total derivative assets	$	0.1		$	0.1	$	—	$	—
Total derivative liabilities	3.6			0.1		—		3.5
Net derivative liabilities	$	(3.5	)	$	—	$	—	$	(3.5	)

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⁽¹⁾  We report the fair values of our derivative assets and liabilities on a gross basis on our consolidated balance sheets. As a result, amounts recognized and net amounts presented are the same.

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Inventories

6 Months Ended

Jun. 30, 2015

Inventory Disclosure [Abstract]

Inventories

Inventories

Inventories consisted of the following:

	June 30, 2015		December 31, 2014
	(in millions)
Finished goods	$	6.1	$	7.8
Materials and supplies	3.3		1.8
Total	$	9.4	$	9.6

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Background and Basis of Presentation (Details) - shares	6 Months Ended
	Jun. 30, 2015	Dec. 31, 2014
Common Units
Common units and interest in the partnership
Common units issued	18,501,576	18,501,576
Class B Common Units
Common units and interest in the partnership
Common units issued	184,072	184,072
General Partner
Common units and interest in the partnership
Ownership interest in the partnership (as a percent)	0.05%
CF Industries | Common Units
Common units and interest in the partnership
Common units owned through subsidiaries	13,889,014
Percentage of outstanding units owned through subsidiaries	75.00%

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Inventories (Tables)

6 Months Ended

Jun. 30, 2015

Inventory Disclosure [Abstract]

Schedule of inventories

Inventories consisted of the following:

	June 30, 2015		December 31, 2014
	(in millions)
Finished goods	$	6.1	$	7.8
Materials and supplies	3.3		1.8
Total	$	9.4	$	9.6

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Related Party Transactions

6 Months Ended

Jun. 30, 2015

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

TNCLP and TNGP have no employees. We have entered into several agreements with a subsidiary of CF Industries relating to the operation of our business and the sale of the fertilizer products produced at our Verdigris facility. We believe that each of these agreements is on terms that are fair and reasonable to us.

General and Administrative Services and Product Offtake Agreement

Pursuant to the Amendment to the General and Administrative Services and Product Offtake Agreement (the Services and Offtake Agreement), the Partnership sells all of its fertilizer products to an affiliate of the General Partner at prices based on market prices for the Partnership's fertilizer products as defined in the Services and Offtake Agreement. Title and risk of loss transfer to an affiliate of the General Partner as the product is shipped from the plant gate. The Services and Offtake Agreement is effective for annual terms starting as of January 1st and will be extended automatically for successive one-year terms unless terminated by one of the parties prior to renewal.

Directly Incurred Charges

Since we have no employees, we rely on employees from an affiliate of the General Partner to operate our Verdigris facility. As a result, the payroll, payroll-related expenses and benefits, such as health insurance and pension, incurred by an affiliate of the General Partner, are directly charged to us. Payroll, payroll-related expenses and other employee-related benefits directly charged to us for the three and six months ended June 30, 2015 were $6.5 million and $14.1 million, respectively, and for the three and six months ended June 30, 2014 were $5.9 million and $11.5 million, respectively. We report these expenses as services provided by affiliates of the General Partner in cost of goods sold.

Allocated Charges

CF Industries, together with its affiliates, also provides certain services to us under the Services and Offtake Agreement. These services include production planning, manufacturing management, logistics, procurement, accounting, legal, risk management, investor relations and other general and administrative functions. Allocated expenses charged to us for the three and six months ended June 30, 2015 were $4.0 million and $7.9 million, respectively, and for the three and six months ended June 30, 2014 were $3.8 million and $7.7 million, respectively. We report these expenses as selling, general and administrative services provided by affiliates of the General Partner.

Amounts Due to/from Affiliates of the General Partner

We receive cash and make expenditures directly from our cash accounts. Because we sell our products to and receive payroll and other related services from affiliates of the General Partner, the affiliates of the General Partner continue to be both debtors and creditors to us. As of June 30, 2015 and December 31, 2014, we had a net balance due from affiliates of the General Partner of $21.4 million and $21.0 million, respectively.

Spare Parts Sharing Agreement

Affiliates of CF Industries own and operate nitrogen fertilizer complexes that utilize some equipment that is similar to equipment at our Verdigris nitrogen complex. Each of the various manufacturing complexes maintains spare parts for use in its facilities. In the event that an unplanned need arises and to help minimize manufacturing downtime, we have entered into a spare parts sharing agreement that permits spare parts to be shared among the manufacturing complexes from time to time. Parts that are borrowed from another complex under the agreement are either refurbished and returned to the lender or replaced.

Leases

We entered into an amended and restated lease with an affiliate of the General Partner under which the ammonia assets in our terminal in Blair, Nebraska are leased by the affiliate. The lease is effective for a five-year term ending on December 31, 2018, and the affiliate of the General Partner has options to renew for three additional five-year terms. The quarterly lease payment is $100,000, subject to an annual inflation adjustment, and additional rent will be paid equal to all costs, expenses, and obligations incurred by the affiliate of the General Partner related to the use, occupancy and operation of the terminal.

We also have leased certain of our rail cars to an affiliate of the General Partner for quarterly market-based rental payments of $3,600 per car. This lease was effective initially for a one-year term and is extended automatically for successive one-year terms unless terminated by either party thereto prior to renewal.

We recognized rental income for the three and six months ended June 30, 2015 and 2014 of $0.2 million and $0.3 million, respectively.

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Fair Value Measurements

6 Months Ended

Jun. 30, 2015

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents assets and liabilities included in our consolidated balance sheets that are recognized at fair value on a recurring basis, and indicates the fair value hierarchy utilized to determine such fair value as of June 30, 2015 and December 31, 2014.

	Balances as of June 30, 2015
	Total			Quoted Market Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
	(in millions)
Cash and cash equivalents	$	72.0		$	72.0	$	—		$	—
Unrealized gains on natural gas derivatives	3.1			—		3.1			—
Total assets at fair value	$	75.1		$	72.0	$	3.1		$	—
Unrealized losses on natural gas derivatives	$	(1.1	)	$	—	$	(1.1	)	$	—
Total liabilities at fair value	$	(1.1	)	$	—	$	(1.1	)	$	—

	Balances as of December 31, 2014
	Total			Quoted Market Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
	(in millions)
Cash and cash equivalents	$	113.0		$	113.0	$	—		$	—
Unrealized gains on natural gas derivatives	0.1			—		0.1			—
Total assets at fair value	$	113.1		$	113.0	$	0.1		$	—
Unrealized losses on natural gas derivatives	$	(3.6	)	$	—	$	(3.6	)	$	—
Total liabilities at fair value	$	(3.6	)	$	—	$	(3.6	)	$	—

Cash and Cash Equivalents

As of June 30, 2015 and December 31, 2014, our cash and cash equivalents consisted primarily of money market mutual funds that invest in U.S. government obligations.

Natural Gas Derivatives

The derivative instruments that we use are primarily natural gas fixed price swaps and options traded in the OTC markets with multi-national commercial banks, other major financial institutions and large energy companies. The derivatives are traded in months forward and settlements are scheduled to coincide with anticipated gas purchases during those future periods. These contracts settle using NYMEX futures prices and accordingly, to determine the fair value of these instruments, we use quoted market prices from NYMEX and standard pricing models with inputs derived from or corroborated by observable market data such as forward curves supplied by an industry-recognized unrelated third party. See Note 6—Derivative Financial Instruments for additional information.

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Property, Plant and Equipment, net

6 Months Ended

Jun. 30, 2015

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment, Net

Property, Plant and Equipment, Net

Property, plant and equipment, net consisted of the following:

	June 30, 2015		December 31, 2014
	(in millions)
Land	$	1.6	$	1.6
Buildings and improvements	14.4		8.1
Machinery and equipment	530.0		401.4
Construction in progress	14.0		109.2
	560.0		520.3
Less: Accumulated depreciation and amortization	254.0		260.9
	$	306.0	$	259.4

During the three and six months ended June 30, 2015, we recorded losses of approximately $0.2 million and $1.2 million, respectively, on the disposal of certain machinery and equipment, which is included in other general and administrative expenses on our consolidated statements of operations.

Plant turnarounds—Scheduled inspections, replacements and overhauls of machinery and equipment at our continuous process manufacturing facility are referred to as plant turnarounds. The expenditures related to turnarounds are capitalized in property, plant and equipment when incurred. The following is a summary of plant turnaround activity:

	Six months ended   June 30,
	2015			2014
	(in millions)
Net capitalized turnaround costs:
Beginning balance	$	16.7		$	22.7
Additions	30.7			0.3
Depreciation	(5.0		)	(3.2		)
Ending balance	$	42.4		$	19.8

Scheduled replacements and overhauls of machinery and equipment include the dismantling, repair or replacement and installation of various components including piping, valves, motors, turbines, pumps, compressors, heat exchangers and the replacement of catalyst when a full plant shutdown occurs. Scheduled inspections are also conducted during full plant shutdowns, including required safety inspections which entail the disassembly of various components such as steam boilers, pressure vessels and other equipment requiring safety certifications. Internal employee costs and overhead are not considered turnaround costs and are not capitalized.

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New Accounting Pronouncements and Changes in Accounting Principles (Policies)

6 Months Ended

Jun. 30, 2015

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

New Accounting Standards

New Accounting Standards

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers, which supersedes the revenue recognition requirements in Accounting Standards Codification (ASC) 605, Revenue Recognition. This ASU is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments. Additionally, information concerning the costs to obtain and fulfill a contract, including assets to be recognized, is to be disclosed. In July 2015, the FASB voted to defer the effective date of this ASU to December 15, 2017 for interim and annual reporting periods beginning after that date. Early adoption of the standard as of December 15, 2016 (for interim and annual reporting periods beginning after that date) is permitted by the FASB. We are currently evaluating the impact of the adoption of this ASU on our consolidated financial statements.

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2015

Fair Value Disclosures [Abstract]

Schedule of assets and liabilities that are recognized at fair value on a recurring basis

The following table presents assets and liabilities included in our consolidated balance sheets that are recognized at fair value on a recurring basis, and indicates the fair value hierarchy utilized to determine such fair value as of June 30, 2015 and December 31, 2014.

	Balances as of June 30, 2015
	Total			Quoted Market Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
	(in millions)
Cash and cash equivalents	$	72.0		$	72.0	$	—		$	—
Unrealized gains on natural gas derivatives	3.1			—		3.1			—
Total assets at fair value	$	75.1		$	72.0	$	3.1		$	—
Unrealized losses on natural gas derivatives	$	(1.1	)	$	—	$	(1.1	)	$	—
Total liabilities at fair value	$	(1.1	)	$	—	$	(1.1	)	$	—

	Balances as of December 31, 2014
	Total			Quoted Market Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
	(in millions)
Cash and cash equivalents	$	113.0		$	113.0	$	—		$	—
Unrealized gains on natural gas derivatives	0.1			—		0.1			—
Total assets at fair value	$	113.1		$	113.0	$	0.1		$	—
Unrealized losses on natural gas derivatives	$	(3.6	)	$	—	$	(3.6	)	$	—
Total liabilities at fair value	$	(3.6	)	$	—	$	(3.6	)	$	—

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Inventories (Details) - USD ($) $ in Millions	Jun. 30, 2015	Dec. 31, 2014
Inventory Disclosure [Abstract]
Finished goods	$ 6.1	$ 7.8
Materials and supplies	3.3	1.8
Total	$ 9.4	$ 9.6

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CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL - USD ($) $ in Millions	Total	General Partner	Common Units Common Units	Class B Common Units Common Units
Partners' capital at Dec. 31, 2013	$ 309.0	$ 43.0	$ 264.5	$ 1.5
Increase (Decrease) in Partners' Capital
Net earnings	203.0	82.2	118.8	2.0
Distributions	(156.1)	(60.0)	(94.6)	(1.5)
Partners' capital at Jun. 30, 2014	355.9	65.2	288.7	2.0
Partners' capital at Dec. 31, 2014	374.9	70.0	302.7	2.2
Increase (Decrease) in Partners' Capital
Net earnings	158.3	58.0	98.8	1.5
Distributions	(136.5)	(50.4)	(84.8)	(1.3)
Partners' capital at Jun. 30, 2015	$ 396.7	$ 77.6	$ 316.7	$ 2.4

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Net Earnings per Common Unit

6 Months Ended

Jun. 30, 2015

Earnings Per Unit [Abstract]

Net Earnings per Common Unit

Net Earnings per Common Unit

Net earnings per common unit are based on the weighted-average number of common units outstanding during the period. The following table provides a calculation for net earnings per common unit for the three and six months ended June 30, 2015 and 2014:

	Three months ended   June 30,				Six months ended   June 30,
	2015		2014		2015		2014
	(in millions, except per unit amounts)
Basic earnings per Common Unit:
Net earnings	$	99.3	$	100.1	$	158.3	$	203.0
Less: Net earnings allocable to General Partner	37.1		40.7		58.0		82.2
Less: Net earnings allocable to Class B Common Units	0.9		1.0		1.5		2.0
Net earnings allocable to Common Units	$	61.3	$	58.4	$	98.8	$	118.8
Weighted-average Common Units outstanding	18.5		18.5		18.5		18.5
Net earnings per Common Unit	$	3.31	$	3.16	$	5.34	$	6.42

There were no dilutive TNCLP units outstanding for the three and six months ended June 30, 2015 and 2014.

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Derivative Financial Instruments (Details) MMBTU in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2015 USD ($) MMBTU	Jun. 30, 2014 USD ($)	Jun. 30, 2015 USD ($) MMBTU	Jun. 30, 2014 USD ($)	Dec. 31, 2014 USD ($) MMBTU
Derivative financial instruments
Unrealized mark-to-market gains (losses)			$ 5,600,000	$ (7,600,000)
Open derivative contracts for natural gas (in MMBtus) | MMBTU	40.0		40.0		7.6
Percentage of natural gas consumption covered by derivatives			72.00%
Aggregate fair value of the derivative instruments with credit-risk-related contingent features in net liability position	$ 1,100,000		$ 1,100,000		$ 3,600,000
Cash Collateral for Borrowed Securities	0		0		0
Total derivative assets
Gross and net amounts presented in consolidated balance sheet	3,100,000		3,100,000		100,000
Gross amounts not offset in consolidated balance sheet
Financial instruments	1,100,000		1,100,000		100,000
Cash collateral received	0		0		0
Net amount	2,000,000		2,000,000		0
Total derivative liabilities
Gross and net amounts presented in consolidated balance sheet	1,100,000		1,100,000		3,600,000
Gross amounts not offset in consolidated balance sheet
Financial instruments	1,100,000		1,100,000		100,000
Cash collateral pledged	0		0		0
Net amount	0		0		3,500,000
Net assets (liabilities)
Gross and net amounts presented in consolidated balance sheet	2,000,000		2,000,000		(3,500,000)
Natural gas derivatives not designated as hedging instruments
Derivative financial instruments
Derivative Asset, Current	1,900,000		1,900,000		100,000
Unrealized gains in other current assets	3,100,000		3,100,000		100,000
Derivative Liability, Current	(500,000)		(500,000)		(3,600,000)
Derivative Asset, Noncurrent	1,200,000		1,200,000		0
Unrealized losses in other current liabilities	(1,100,000)		(1,100,000)		(3,600,000)
Derivative Liability, Noncurrent	600,000		600,000		0
Net derivative assets (liabilities)	2,000,000		2,000,000		$ (3,500,000)
Unrealized mark-to-market gains (losses)	2,600,000	$ (4,900,000)	6,500,000	(8,900,000)
Realized (losses) gains	(800,000)	4,900,000	(5,400,000)	14,800,000
Net derivative gains	$ 1,800,000	$ 0	$ 1,100,000	$ 5,900,000

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Derivative Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of the gross fair values of derivatives on balance sheet

The gross fair values of derivatives on our consolidated balance sheets are shown below. All balance sheet amounts from derivatives arise from natural gas derivatives that are not designated as hedging instruments. For additional information on derivative fair values, see Note 7—Fair Value Measurements.

	June 30, 2015			December 31, 2014
	(in millions)
Derivative Assets
Unrealized gains in other current assets	$	1.9		$	0.1
Unrealized gains in other assets	1.2			—
Total derivative assets	3.1			0.1
Derivative Liabilities
Unrealized losses in other current liabilities	(0.5		)	(3.6		)
Unrealized losses in other liabilities	(0.6		)	—
Total derivative liabilities	(1.1		)	(3.6		)
Net derivative assets (liabilities)	$	2.0		$	(3.5	)

Schedule of effects of derivatives in consolidated statements of operations

The effect of derivatives in our consolidated statements of operations is shown below. All amounts arise from natural gas derivatives that are not designated as hedging instruments and are recorded in cost of goods sold.

	Three months ended   June 30,						Six months ended   June 30,
	2015			2014			2015			2014
	(in millions)
Unrealized mark-to-market gains (losses)	$	2.6		$	(4.9	)	$	6.5		$	(8.9	)
Realized (losses) gains	(0.8		)	4.9			(5.4		)	14.8
Net derivative gains	$	1.8		$	—		$	1.1		$	5.9

Schedule of offsetting of derivative assets and liabilities

The following table presents amounts relevant to offsetting of our derivative assets and liabilities as of June 30, 2015 and December 31, 2014:

	Gross and net amounts presented in consolidated balance sheets(1)			Gross amounts not offset in consolidated balance sheets
				Financial instruments		Cash collateral received (pledged)		Net amount
	(in millions)
June 30, 2015
Total derivative assets	$	3.1		$	1.1	$	—	$	2.0
Total derivative liabilities	1.1			1.1		—		—
Net derivative assets	$	2.0		$	—	$	—	$	2.0
December 31, 2014
Total derivative assets	$	0.1		$	0.1	$	—	$	—
Total derivative liabilities	3.6			0.1		—		3.5
Net derivative liabilities	$	(3.5	)	$	—	$	—	$	(3.5	)

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⁽¹⁾  We report the fair values of our derivative assets and liabilities on a gross basis on our consolidated balance sheets. As a result, amounts recognized and net amounts presented are the same.