-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DfrRqGJ9IE41rq5H6cF0PQKeydCM8DDeRSSst8Km/VYlImvsVMHnk8yDLmpQwBvB LDs62OT3+ZwUKfPQqMELOQ== 0000950131-98-006017.txt : 19981116 0000950131-98-006017.hdr.sgml : 19981116 ACCESSION NUMBER: 0000950131-98-006017 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19981113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TERRA NITROGEN CO L P /DE CENTRAL INDEX KEY: 0000879575 STANDARD INDUSTRIAL CLASSIFICATION: AGRICULTURE CHEMICALS [2870] IRS NUMBER: 731389684 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 033-43007 FILM NUMBER: 98746518 BUSINESS ADDRESS: STREET 1: TERRA CENTRE 600 FOURTH STREET STREET 2: PO BOX 6000 CITY: SIOUX CITY STATE: IA ZIP: 51102-6000 BUSINESS PHONE: 7122771340 MAIL ADDRESS: STREET 1: TERRA CENTER 600 FOURTH STREET STREET 2: PO BOX 6000 CITY: SIOUX CITY STATE: IA ZIP: 51102-6000 10-Q 1 FORM 10-Q =============================================================================== FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 __________________________________ (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended September 30, 1998 OR [ ] 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 1-10877 TERRA NITROGEN COMPANY, L.P. (Exact name of registrant as specified in its charter) Delaware 73-1389684 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) Terra Centre PO Box 6000, 600 Fourth Street Sioux City, Iowa 51102-6000 (Address of principal executive office) (Zip Code) Registrant's telephone number: (712) 277-1340 At the close of business on October 30, 1998, there were 18,501,576 Common Units outstanding. 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 No - --- --- =============================================================================== PART I. FINANCIAL INFORMATION TERRA NITROGEN COMPANY, L.P. CONSOLIDATED BALANCE SHEETS (in thousands) (unaudited)
September 30, December 31, September 30, 1998 1997 1997 ------------- ------------ ------------- ASSETS Current assets: Cash and cash equivalents $ 16 $ 31,268 $ 8,120 Accounts receivable 1,718 4,007 8,028 Inventory -- finished products 35,389 19,241 26,603 Inventory -- materials and supplies 16,253 11,437 13,294 Prepaid expenses and other current assets 1,597 2,311 2,409 - ------------------------------------------------ -------- -------- -------- Total current assets 54,973 68,264 58,454 Net property, plant and equipment 166,817 169,533 170,986 Other assets 13,136 16,031 18,515 - ------------------------------------------------ -------- -------- -------- Total assets $234,926 $253,828 $247,955 ================================================ ======== ======== ======== LIABILITIES AND PARTNERS' CAPITAL Current liabilities: Short-term note payable $ 18,778 $ --- $ --- Accounts payable and accrued liabilities $ 21,321 26,524 37,445 Customer prepayments 84 4,746 304 Current portion of long-term debt and capital lease obligations 1,105 1,070 1,059 - ------------------------------------------------ -------- -------- -------- Total current liabilities 41,288 32,340 38,808 Long-term debt and capital lease obligations 8,439 8,966 9,527 Long-term payable to affiliates 5,521 4,687 --- Other long-term obligations 1,060 1,060 1,060 Partners' capital 178,618 206,775 198,560 - ------------------------------------------------ -------- -------- -------- Total liabilities and partners' capital $234,926 $253,828 $247,955 ================================================ ======== ======== ========
See accompanying notes. 2 TERRA NITROGEN COMPANY, L.P. CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per unit amounts) (unaudited)
Three Months Ended Nine Months Ended September 30, September 30, 1998 1997 1998 1997 ------- ------- -------- -------- Revenues $33,306 $76,732 $182,327 $255,952 Other income 303 388 1,029 948 - ------------------------------------------------------------------------------- Total revenues 33,609 77,120 183,356 256,900 Cost of goods sold 26,851 54,993 136,776 157,756 - ------------------------------------------------------------------------------- Gross profit 6,758 22,127 46,580 99,144 Operating expenses 2,124 3,192 7,636 9,394 - ------------------------------------------------------------------------------- Operating income 4,634 18,935 38,944 89,750 Interest expense (422) (553) (1,647) (1,571) Interest income 460 337 1,342 3,269 - ------------------------------------------------------------------------------- Net income $ 4,672 $18,719 $ 38,639 $ 91,448 =============================================================================== Net income allocable to limited partners' interest $ 4,581 $14,394 $ 30,491 $ 64,480 =============================================================================== Net income per limited partnership unit $ 0.25 $ 0.78 $ 1.65 $ 3.46 ===============================================================================
See accompanying notes. 3 TERRA NITROGEN COMPANY, L.P. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited)
Nine Months Ended September 30, 1998 1997 -------- --------- Operating activities: Net income $ 38,639 $ 91,448 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 9,217 8,862 Changes in operating assets and liabilities: Receivables 2,289 3,026 Inventories (20,964) (10,199) Prepaid expenses 714 (56) Accounts payable, accrued liabilities and customer prepayments (9,865) (19,917) Change in other assets 2,895 --- Other 837 7,116 - ------------------------------------------------------------------------------------------ Net cash provided by operating activities 23,762 80,280 Net cash used in investing activities: Capital expenditures (6,503) (7,158) Financing activities: Proceeds from elimination of distribution reserve fund --- 18,480 Borrowings under revolving credit agreement or from Affiliates 18,778 7,000 Repayment of long-term debt and capital lease obligations (493) (612) Redemption of Senior Preference Units --- (6,605) Partnership distributions (66,796) (130,027) - ------------------------------------------------------------------------------------------ Net cash used in financing activities (48,511) (111,764) - ------------------------------------------------------------------------------------------ Net increase in cash and cash equivalents (31,252) (38,642) Cash and cash equivalents at beginning of period 31,268 46,762 - ------------------------------------------------------------------------------------------ Cash and cash equivalents at end of period $ 16 $ 8,120 ==========================================================================================
See accompanying notes. 4 TERRA NITROGEN COMPANY, L.P. Notes to Consolidated Financial Statements (unaudited) 1. Basis of Presentation The consolidated financial statements contained herein should be read in conjunction with the consolidated financial statements and notes thereto contained in the Terra Nitrogen Company, L.P. ("TNCLP") Annual Report on Form 10-K for the year ended December 31, 1997. TNCLP and its operating partnership subsidiary, Terra Nitrogen, Limited Partnership (the "Operating Partnership"), are referred to herein, collectively, as the "Partnership". The accompanying unaudited consolidated financial statements reflect all adjustments that are, in the opinion of management, necessary for the fair statement of the results for the periods presented. All of these adjustments are of a normal and recurring nature. Results for the quarter are not necessarily indicative of future financial results of the Partnership. Net income per limited partnership unit is computed by dividing net income, less a 24% and 31% share allocable to the General Partner for the nine months ended September 30, 1998 and 1997, respectively, by 18,501,576 limited partner units. The net income allocated to the General Partner decreased to 24% during the nine months ended September 30, 1998 due to the reduction in Available Cash distributed to the General Partner. According to the Agreement of Limited Partnership of TNCLP, net income is allocated to the General Partner and the Limited Partners in each taxable year in the same proportion as Available Cash for such taxable year was distributed to the General Partner and the Limited Partners. If there is no cash distribution, net income or loss is allocated to the Limited Partners and the General Partner based on their respective ownership percentages. Distributions of Available Cash are made 98% to the Limited Partners and 2% to the General Partner, except that the General Partner is entitled, as an incentive, to larger percentage interests (up to 50%) to the extent that distributions of Available Cash exceed specified target levels. Available Cash for the nine months ended September 30, 1998 decreased $8.1 million from the nine months ended September 30, 1997 due primarily to lower net income in 1998. In addition, 1997 Available Cash included $18.5 million from the elimination of the Reserve Amount during 1997 (see Note 2). 2. Distributions to Unitholders The Partnership makes quarterly cash distributions to Unitholders and the General Partner in an amount equal to 100% of its Available Cash (as this and other capitalized terms are defined in the Partnership Agreement). 5 The quarterly cash distributions paid to the Units and to the General Partner applicable to 1998 and 1997 were as follows:
Senior Preference Units Common Units General Partner ---------------------------------------------------------------------------------- Total (000s) $ Per Unit Total (000s) $ Per Unit Total (000s) $ Per Unit ------------ ---------- ------------ ---------- ------------ ---------- 1998: First Quarter $ -- $ -- $21,647 $1.17 $ 3,431 $ -- Second Quarter -- -- -- -- -- -- Third Quarter -- -- 31,822 1.72 9,895 -- 1997: First Quarter 186 .605 27,752 1.50 10,477 -- Second Quarter 186 .605 18,872 1.02 1,835 -- Third Quarter -- -- 44,034 2.38 26,686 -- Fourth Quarter -- -- 5,366 .29 109 --
The distributions paid in the first and second quarters of 1997 to the holders of the Senior Preference Units ("SPUs") represented an amount equal to the minimum quarterly distribution ("MQD") for each quarter. Non- converting SPU holders were not entitled to participate in cash distributions in excess of the MQD after December 31, 1996. The Reserve Amount of $18.5 million (included in cash and cash equivalents at March 31, 1997) was distributed out of Available Cash on May 27, 1997 to holders of the Common Units and to the General Partner. Since the non- converted SPUs were redeemed on May 27, 1997, the Reserve Amount was no longer required to be maintained. 3. Cash and cash equivalents The Partnership has demand deposit and demand note with an affiliate to allow for excess Partnership cash to be deposited with or funds to be borrowed from Terra Capital, Inc., the parent of the General Partner. The balance is due on demand and at September 30, 1998 the interest rate was 7.1%. The amount of the demand note was $18.8 million at September 30, 1998. 4. Natural gas costs The Partnership's natural gas procurement policy is to effectively fix or cap the price of between 40% and 80% of its natural gas requirements for one-year period and up to 50% of its natural gas requirements for the subsequent two-year period through supply contracts, financial derivatives and other forward pricing techniques. These contracts reference physical natural gas prices or appropriate NYMEX futures contract prices. Contract physical prices are frequently based on the Henry Hub Louisiana price, but natural gas supplies for the Partnership's production facilities are physically purchased from various suppliers which often creates a location basis differential between the contract price and the physical price of natural gas. Accordingly, the use of financial derivatives may not exactly offset the change in the price of physical gas. The contracts are traded in months forward and settlement dates are scheduled to coincide with gas purchases during that future period. 6 The Partnership has entered into firm contract to minimize the risk of interruption or curtailment of natural gas supplies. Additionally, the Partnership has entered into forward pricing positions for a substantial portion of its natural gas requirements for the remainder of 1998, 1999 and 2000, consistent with its policy. As a result of its policies, the Partnership has reduced the potential adverse financial impact of natural gas price increases during the forward pricing period, but conversely, if natural gas prices were to fall, the Partnership will incur higher costs. Unrealized gains from forward pricing positions totaled $9.4 million and $29.2 million as of September 30, 1998 and 1997, respectively. The amount recognized by the Partnership will be dependent on prices in effect at the time of settlement. For the first nine months of 1998 and 1997, natural gas hedging activities produced cost savings of approximately $5.5 million and $15.1 million, respectively, compared with spot prices. 7 Management's Discussion and Analysis of Financial Condition and Results of Operations RESULTS OF OPERATIONS Three months ended September 30, 1998, compared with three months ended September 30, 1997 Volumes and prices for the three-month periods ended September 30, 1998 and 1997 were as follows:
1998 1997 ---------------------------- ----------------------------------- Sales Average Sales Average Volumes Unit Price Volumes Unit Price (000 tons) ($/ton) (000 tons) ($/ton) ------------ ----------- ------------- --------------- Ammonia 83 128 122 175 UAN 207 64 562 73 Urea 77 121 116 122
Revenues for the quarter ended September 30, 1998 declined $43.5 million, or 56%, compared with the same quarter in 1997 due to lower nitrogen prices and volumes for all Partnership products. Surplus worldwide nitrogen production continued to put pressure on prices during the 1998 quarter resulting in price reductions of 27%, 12% and 1% for ammonia, UAN and urea, respectively, compared with the 1997 quarter. Volumes were less than the comparable quarter a year ago due to customers' decisions to delay purchases to fill storage and lower demand for winter wheat acres due to drought conditions and the impact of poor wheat prices. Cost of goods sold as a percentage of revenues increased to 80% for the 1998 quarter from 71% in the 1997 period primarily due to the lower nitrogen selling prices as gas costs increased only slightly during the 1998 quarter compared with the 1997 quarter. The Partnership's natural gas forward pricing activities produced $.4 million in cost savings during the 1998 period compared with $4.0 million in the 1997 quarter. Interest income increased $123,000 compared with the 1997 period due to lower average levels of cash and short-term investments in 1998. 8 Nine months ended September 30, 1998, compared with nine months ended September 30, 1997 Volumes and prices for the nine-month periods ended September 30, 1998 and 1997 were as follows:
1998 1997 ----------------------- ----------------------- Sales Average Sales Average Volumes Unit Price Volumes Unit Price (000 tons) ($/ton) (000 tons) ($/ton) ---------- ---------- ---------- ---------- Ammonia 301 141 375 189 UAN 1,455 67 1,525 85 Urea 339 124 364 150
Revenues for the nine months ended September 30, 1998 declined $73.5 million, or 29%, compared with the 1997 period due to lower nitrogen prices and volumes for all Partnership products. Surplus worldwide nitrogen production caused nitrogen prices to fall from prior year levels by 25%, 21% and 17% for ammonia, UAN and urea, respectively. Worldwide urea prices have declined due to a lack of purchases by China, a major purchaser of urea in the world markets. Increased urea production in China and the addition of increased nitrogen production in other parts of the world have led to an oversupply of nitrogen and caused prices to decline from prior year levels. Year-to-date sales volume decreases were primarily attributable to the third quarter customer delays in purchasing to fill storage and lower demand caused by drought conditions and lower crop prices. Cost of goods sold as a percentage of revenues increased to 75% for the first nine months of 1998 compared with 61% for the 1997 period primarily due to the lower nitrogen selling prices as gas costs decreased only slightly during the nine months ended June 30, 1998. The Partnership's natural gas forward pricing activities produced $5.5 million in cost savings during the 1998 period compared with $15.1 million for the nine months ended September 30, 1997. Interest income decreased $1.9 million compared with the 1997 period due to lower levels of cash and short-term investments from lower earnings and due to the elimination of the Reserve Amount as a result of the redemption of the non- converted SPUs during the second quarter of 1997. 9 Capital Resources and Liquidity Net cash provided by operating activities for the first nine months of 1998 was $23.8 million, a decrease of $56.5 million compared with the 1997 period. The reduction in cash provided by operating activities was principally due to lower net income in 1998. The Partnership's principal needs for funds are for support of its working capital, distributions to Partners, and capital expenditures. The Partnership intends to fund such needs primarily from net cash provided by operating activities and, to the extent permitted thereunder, from funds available under the Operating Partnership's revolving credit facility. Under certain circumstances an affiliate of the Partnership may advance funds to the Partnership under a demand note. At September 30, 1998, the Operating Partnership had $18.0 million of unused borrowing capacity under its revolving credit facility, and had $18.8 million outstanding under a demand note with an affiliate. The Partnership believes that such sources of funds will be adequate to meet the Partnership's working capital needs, make quarterly distributions to Partners and fund the Partnership's capital expenditures for at least the next twelve months. Quarterly distributions to the Partners of TNCLP are based on Available Cash for the quarter as defined in the Agreement of Limited Partnership of TNCLP. Available Cash is defined generally as all cash receipts less all cash disbursements, adjusted for changes in certain reserves established as the General Partner determines in its reasonable discretion to be necessary. Distributions on the Common Units are cumulative to the extent that, for any calendar quarter, if a distribution of at least $.605 is not paid to the holders of the Common Units, the amount of the shortfall (plus any arrearages from prior quarters) will be paid out of Available Cash in subsequent quarters before any incentive distributions are paid to the General Partner. During the first nine months of 1998, the Partnership paid $66.8 million in distributions to its Partners. As of September 30, 1998, there is no distribution arrearage for the Common Units. On October 22, 1998, Terra Nitrogen Company, L.P. announced there would be no cash distribution for the quarter ended September 30, 1998 since there was no Available Cash for distribution for the quarter. Finished products inventory increased $16.1 million and $8.8 million from the December 31, 1997 and the September 30, 1997 balances, respectively, primarily due to substantially lower than anticipated UAN sales volumes during the third quarter of 1998. Accounts payable and accrued liabilities declined $16.1 million from the September 30, 1997 balance principally due to the timing of cash transfers between the Partnership and its affiliates. Customer prepayments declined $4.7 million from the December 31, 1997 balance. Certain customers prepay for product during the fall and winter months to take advantage of generally favorable pricing conditions. The customers then take delivery of the product as needed during the spring planting season. Capital Expenditures Capital expenditures totaled $6.5 million for the first nine months of 1998. For the remainder of 1998, the Partnership plans to spend approximately $1 million. Plans for 1998 include urea storage and loading improvements at the Blytheville plant and environmental control, equipment replacement and efficiency improvements at both plants. 10 Year 2000 Issue The Year 2000 issue concerns computer programs that use only the last two digits to identify the year in date fields. If not corrected, many of these computer programs could fail or produce erroneous results on or before January 1, 2000. This issue affects virtually every company. The Partnership has assigned dedicated resources to address its Year 2000 issues. Most, but not all, of the Partnership's management information systems environment have been assessed for Year 2000 issues and some remedial actions have been identified in these assessed areas. The impact of remedial actions for areas where an assessment has already been completed is not expected to be material to the Partnership. Some of these actions have already been completed at minimal cost. The Partnership plans to complete in the first quarter of 1999 an organization- wide review of all possible computing functions, including the process control systems and instrumentation in the manufacturing facilities. The Partnership is also assessing Year 2000 issues in relation to its customers, suppliers and other constituents because the actions or inactions of such third parties may materially affect the Partnership. General contingency planning efforts have recently been initiated for precautionary purposes. The Partnership anticipates that it will complete all assessment, remediation, testing and contingency planning efforts for Year 2000 issues in the third quarter of 1999 with no material adverse consequences or material costs to the Partnership. However, the costs or consequences of incomplete or untimely resolution of Year 2000 issues by the Partnership or third parties could have a material adverse affect on the Partnership. Limited Call Right If at any time not more than 25% of the Common Units are held by non-affiliates of the General Partner, either TNCLP, the General Partner or its affiliates may call all such outstanding units held by non-affiliated persons in accordance with the terms of the TNCLP partnership agreement. TNCLP is required to give at least 30 but not more than 60 days notice of its decision to purchase the outstanding Common Units. The purchase price per unit is required to be the greater of (1) the average of the previous twenty 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 90 days preceding the date the purchase is announced. The General Partner and its affiliates own 69% of the Common Units as of October 31, 1998. Under existing authorization of the board of directors of Terra Industries, Inc., the indirect parent of the General Partner, additional Common Units may be purchased on the open market and through privately negotiated transactions by affiliates of the General Partner to bring this ownership level above 75%. Although TNCLP and its affiliates reserve the right to consider in the future whether to acquire all of the Common Units, they do not have any present plan or intention to do so. 11 FORWARD LOOKING PRECAUTIONS --------------------------- Information contained in this report, other than historical information, may be considered forward looking. Forward looking information reflects Management's current views of future events and financial performance that involve a number of risks and uncertainties. The factors that could cause actual results to differ materially include, but are not limited to the following: general economic conditions within the agricultural industry, competitive factors and price changes (principally, sales prices of nitrogen and methanol products and natural gas costs), changes in product mix, changes in the seasonality of demand patterns, changes in weather conditions, changes in agricultural regulations, and other risks detailed in the Corporation's Securities and Exchange Commission filings, in particular the "Factors that Affect Operating Results" section of its most recent Form 10-K. Part II. Other Information Item 5. Other Matters On October 15, 1998 Minorco, the majority shareholder of Terra Industries, Inc., announced its intention to sell its stake in Terra Industries by early 1999. Terra Industries is the indirect parent of the General Partner and the indirect majority owner of approximately 70% of Terra Nitrogen Company, L.P. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits: 10.68 Amendment No. 1 dated as of September 30, 1998 to the Amended and Restated Credit Agreement dated as of March 31, 1998 among Terra Capital, Inc.; Terra Nitrogen, L.P.; Nations Bank, N.A.; The Chase Manhattan Bank; and Citibank, N.A., filed as Exhibit 4.5 to Terra Industries Inc. Form 10-Q for the period ended September 30,1 998 (File No. 1-8520), is incorporated herein by reference. 10.69 Demand Promissory Note dated August 26, 1998 from Terra Nitrogen, L.P., as Payor, to Terra Capital Inc. 27 Financial Data Schedule. (EDGAR only) (b) Reports on Form 8-K: None. 12 SIGNATURE 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 CORPORATION as General Partner By: /s/ Francis G. Meyer ------------------------------ Vice President (Principal Accounting Officer) Date: November 12, 1998 13 EX-10.69 2 DEMAND PROMISSORY NOTE DATED AUGUST 26, 1998 DEMAND PROMISSORY NOTE ---------------------- August 26,1998 FOR VALUE RECEIVED, the undersigned, Terra Nitrogen, Limited Partnership, a Delaware limited partnership (the "Payor"), HEREBY PROMISES TO PAY ON DEMAND to the order of TERRA CAPITAL, INC., a Delaware corporation (the "Company"), the aggregate principal amount of all advances made hereunder by the Company at its sole discretion to the Payor outstanding at the time of such demand, together with interest (computed on the basis of a year of 360 days) on the principal amount hereof from time to time outstanding from the date hereof until such principal amount is paid in full, such interest to be payable on demand and on the final day when such principal amount becomes due, at a rate per annum equal to the sum of (a) the Applicable Margin (as defined in the Company's Amended and Restated Credit Agreement with Citibank N.A. as agent dated March 31, 1998 as in effect from time to time) and (b) the Eurodollar Rate as defined therein in effect on the date of this Demand Promissory Note for the initial calendar month and as of the first business day for each other calendar month during which interest accrues. The Payor also agrees to pay on demand all costs and expenses, if any, including reasonable and documented counsel fees and expenses, in connection with the enforcement (whether through negotiations, legal proceedings or otherwise) of this Demand Promissory Note. Both principal and interest hereunder are payable on the day for payment thereof (whether upon demand or otherwise) in lawful money of the United States of America to the Company at the Company's executive offices in Sioux City, Iowa (or at such other location specified by the Company), in same day funds. Whenever any payment hereunder shall be stated to be due on a day other than a business day, such payment shall be made on the next succeeding business day, and such extension of time shall in such case be included in the computation of payment of interest. All advances made by the Company to the Payor hereunder and all payments made on account of principal hereof shall be recorded by the Company and, prior to any transfer hereof, endorsed on the grid attached hereto which is part of this Demand Promissory Note. This Demand Promissory Note shall be governed by, and construed in accordance with, the laws of the State of Iowa. TERRA NITROGEN, LIMITED PARTNERSHIP By: Terra Nitrogen Corporation Its: General Partner By: /s/ F. G. Meyer ------------------------------- Name: Francis G. Meyer Title: Vice President EX-27 3 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from Terra Nitrogen Company, L.P. 10-Q, and is qualified in its entirety by reference to such financial statements. 1,000 9-MOS DEC-31-1998 JAN-01-1998 SEP-30-1998 16 0 1,718 0 51,642 54,973 282,403 115,586 234,926 41,288 8,439 0 0 0 178,618 234,926 182,327 183,356 136,776 136,776 0 0 1,647 38,639 0 38,639 0 0 0 38,639 1.65 0 Due to the nature of the partnership, this represents partners capital.
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