8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 10, 2009

TERRA NITROGEN COMPANY, L.P.
(Exact name of registrant as specified in its charter)

Delaware	033-43007	73-1389684
(State or other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

Terra Centre 600 Fourth Street, P.O. Box 6000 Sioux City, Iowa	51102-6000
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (712) 277-1340

(Former name or former address if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On February 10, 2009, Terra Nitrogen Company, L.P. issued a press release setting forth Terra Nitrogen Company, L.P.’s fourth quarter and full year 2008 earnings and announcing a cash distribution. A copy of the press release is furnished herewith as Exhibit 99.1.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

(c) Exhibits

99.1 Press Release issued February 10, 2009 reporting fourth quarter and full year 2008 results and announcing a cash distribution.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, 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: Its:	Terra Nitrogen GP Inc. General Partner

/s/ John W. Huey

John W. Huey
Vice President, General Counsel and
Corporate Secretary

Date: February 10, 2009

EXHIBIT INDEX

Exhibit Number	Description
99.1	Press release issued February 10, 2009, announcing fourth quarter and full year 2008 results and announcing a cash distribution.

EX-99.1

Exhibit 99.1

Terra Nitrogen Company, L.P.
600 Fourth Street
P.O. Box 6000
Sioux City, IA 51102-6000
www.terraindustries.com

NEWS

For immediate release Contact: Joe A. Ewing
(712) 277-7305
jewing@terraindustries.com

Terra Nitrogen Company, L.P. reports fourth quarter and full-year results,
declares cash distribution

Sioux City, Iowa (February 10, 2009)—Terra Nitrogen Company, L.P. (TNCLP) (NYSE: TNH) today reported net income of $104.4 million, $65.7 million of which is allocable to Common Units ($3.55 per Common Unit), on revenues of $225.2 million for the fourth quarter ended Dec. 31, 2008. This compares with net income of $67.8 million, $66.4 million of which is allocable to Common Units ($3.59 per Common Unit) on revenues of $197.6 million for the 2007 fourth quarter. For 2008, TNCLP reported net income of $422.4 million, $275.7 million of which is allocable to Common Units ($14.90 per Common Unit), on revenues of $903.0 million, compared to net income of $205.8 million, $201.7 million of which is allocable to Common Units ($10.90 per Common Unit) on revenues of $636.3 million for 2007.

TNCLP also announced a cash distribution for the quarter ended Dec. 31, 2008, of $2.97 per common limited partnership unit payable Feb. 27, 2009, to holders of record as of Feb. 17, 2009. Cash distributions depend on TNCLP’s earnings, which can be affected by nitrogen selling prices, natural gas costs, seasonal demand factors, production levels and weather, cash requirements for working capital needs, and capital expenditures. Cash distributions per limited partnership unit also vary based on increasing amounts allocable to the General Partner when cumulative distributions exceed targeted levels. Those targeted levels were attained in the 2008 first quarter.

Analysis of results
Fourth quarter
TNCLP’s improvement in fourth quarter earnings over those of the 2007 fourth quarter was due to higher nitrogen products selling prices, partially offset by lower sales volumes and higher natural gas costs. Strong third quarter demand resulted in the higher nitrogen selling prices that carried over into some fourth quarter sales. The lower sales volumes were due to depressed nitrogen demand in the fourth quarter caused by the global economic slowdown and unfavorable weather. Natural gas costs were affected by global energy price volatility. From the 2007 to the 2008 fourth quarter, TNCLP’s:

• Ammonia and urea ammonium nitrate (UAN) selling prices increased by 78 and 46 percent, respectively.

• Ammonia and UAN sales volumes decreased by 37 and 20 percent, respectively.

• Natural gas unit costs increased by 46 percent.

The fourth quarter 2008 broad-based economic decline reduced 2008 year-end Cornbelt ammonia and UAN spot prices by approximately 25 percent compared to year-end 2007 spot prices. Due to the late fourth quarter pricing pressures, TNCLP recorded $5.8 million on fourth quarter charges related to derivative and inventory valuation.

Full year
TNCLP’s full-year earnings improvement over last year was due to higher nitrogen products selling prices, partially offset by lower sales volumes and higher natural gas costs. Full-year results were generally affected by the same factors affecting fourth quarter results. From 2007 to 2008, TNCLP’s:

• Ammonia and UAN selling prices increased by 62 and 47 percent, respectively.

• Ammonia and UAN sales volumes decreased by 13 and 2 percent, respectively.

• Natural gas unit costs increased by 26 percent.

Forward natural gas position
TNCLP’s forward purchase contracts at Dec. 31, 2008, fixed prices for about 31 percent of its next 12 months’ natural gas requirements at $31 million above published forward markets at that date. TNCLP has entered into these forward gas positions to secure margins on nitrogen products sold forward at fixed prices.

About TNCLP
Terra Nitrogen Company, L.P. is a leading manufacturer of nitrogen fertilizer products.

TNCLP Distributions
This release serves a qualified notice to nominees and brokers as provided for under Treasury Regulation Section 1.1446-4(b). Please note that 100 percent of the Partnership’s distributions to foreign investors are attributable to income that is effectively connected with a United States trade or business. Accordingly, the Partnership’s distributions to foreign investors are subject to federal income tax withholding at the highest effective tax rate.

Forward-looking statements
Certain statements in this news release may constitute “forward-looking” statements within the meaning of the Private Litigation Reform Act of 1995. Forward-looking statements are based upon assumptions as to future events that may not prove to be accurate. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Actual outcomes and results may differ materially from what is expressed or forecasted in these forward-looking statements. As a result, these statements speak only as of the date they were made and TNCLP undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Words such as “expects,” “intends,” “plans,” “projects,” “believes,” “estimates,” and similar expressions are used to identify these forward-looking statements. These include, among others, statements relating to:

• financial markets,

• general economic conditions within the agricultural industry,

• competitive factors and price changes (principally, sales prices of nitrogen products and natural gas costs),

• product mix,

• the seasonality of demand patterns,

• weather conditions,

• environmental and other government regulation, and

• agricultural regulations.

Additional information as to these factors can be found in TNCLP’s 2007 Annual Report/10-K, in the sections entitled “Business,” “Legal Proceedings,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in the Notes to the consolidated financial statements.

# # #

Terra Nitrogen Company, L.P. news announcements are also available on Terra Industries’ Web site, www.terraindustries.com.

(Tables follow)

Terra Nitrogen Company, L.P.
Condensed Consolidated Statements of Income
(in thousands except per-unit amounts)
(unaudited)

	Three Months Ended					Years Ended
	December 31,					December 31,
	2008			2007		2008			2007
Revenues:
Product revenues	$	225,083		$	197,491	$	902,578		$	635,510
Other income		146			69		439			798
Total revenues		225,229			197,560		903,017			636,308
Costs and expenses:
Cost of goods sold		118,687			123,315		470,805			414,686
Gross profit		106,542			74,245		432,212			221,622
Operating expenses		2,917			8,069		15,750			21,169
Income from operations		103,625			66,176		416,462			200,453
Interest expense		(82	)		17		(327	)		(324	)
Interest income		891			1,591		6,250			5,653
Net income	$	104,434		$	67,784	$	422,385		$	205,782
Net income allocable to Common Units	$	65,654		$	66,431	$	275,712		$	201,670
Net income per Common Unit	$	3.55		$	3.59	$	14.90		$	10.90

Nitrogen Volumes and Prices

Note: All UAN data are expressed on a 32% nitrogen basis.

	2008				2007
	Sales		Average		Sales		Average
	Volumes		Unit Price		Volumes		Unit Price
	(000 tons)		($/ton) 1		(000 tons)		($/ton) 1
Fourth quarter
Ammonia		81		707		128		397
UAN		420		366		527		250
Full year
Ammonia		303		616		349		380
UAN		1,980		330		2,013		224

Natural Gas Costs/MMBtu²

Three Months Ended				Years Ended
December 31,				December 31,
2008		2007		2008		2007
$	10.54	$	7.24	$	8.59	$	6.84

1.	After deducting outbound freight costs.
2.	Including effect of settled hedged natural gas position.

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

	December 31,
	2008			2007
Assets
Cash and cash equivalents	$	154,681		$	246,140
Accounts receivable		38,053			49,635
Inventory		57,207			19,343
Prepaid expenses and other current assets		11,815			4,906
Total current assets		261,756			320,024
Property, plant and equipment, net		68,208			71,289
Other long-term assets		11,442			22,473
Total assets	$	341,406		$	413,786
Liabilities and partners’ capital
Accounts payable and accrued liabilities	$	24,844		$	41,866
Customer prepayments		45,067			154,644
Derivative hedge liabilities		43,315			7,959
Total current liabilities		113,226			204,469
Other long-term liabilities		871			2,218
Total liabilities		114,097			206,687
Partners’ Capital
Limited partners’ interests, 18,502 Common Units and 184 Class B Common Units authorized and outstanding		218,918			221,726
General partners’ interest		39,172			(9,928	)
Accumulated other comprehensive income (loss)		(30,781	)		(4,699	)
Total partners’ capital		227,309			207,099
Total liabilities and partners’ capital	$	341,406		$	413,786