<PAGE>
================================================================================
FORM 10-Q
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, 1996
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)
5100 EAST SKELLY DRIVE, SUITE 800
TULSA, OKLAHOMA 74135
(Address of principal executive office) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER:
(918) 660-0050
AT THE CLOSE OF BUSINESS ON NOVEMBER 1, 1996, THERE WERE 13,636,364 SENIOR
PREFERENCE 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
- ----- -----
================================================================================
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TERRA NITROGEN COMPANY, L.P.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31, SEPTEMBER 30,
1996 1995 1995
------------- ------------ -------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 54,546 $ 71,490 $ 43,019
Accounts receivable 8,546 28,426 41,912
Inventory - finished products 12,007 12,201 15,162
Inventory - materials and supplies 17,078 9,882 9,529
Prepaid expenses 3,643 6,001 5,604
-------- -------- --------
Total current assets 95,820 128,000 115,226
Net property, plant and equipment 172,827 177,358 174,196
Distribution reserve fund 18,480 18,480 18,480
Other assets 14,285 14,285 9,188
-------- -------- --------
Total assets $301,412 $338,123 $317,090
======== ======== ========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable and accrued liabilities $ 34,396 $ 29,488 $ 24,136
Customer prepayments 2,462 15,517 3,437
Current portion of long-term debt 1,285 1,504 1,356
-------- -------- --------
Total current liabilities 38,143 46,509 28,929
Long-term debt and capital
lease obligations 3,585 4,198 4,907
Other long-term obligations 1,060 1,060 1,060
Partners' capital 258,624 286,356 282,194
-------- -------- --------
Total liabilities and partners' capital $301,412 $338,123 $317,090
======== ======== ========
</TABLE>
See accompanying notes.
<PAGE>
TERRA NITROGEN COMPANY, L.P.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER UNIT AMOUNTS)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------------- -----------------------------
1996 1995 1996 1995
------------- ------------ ------------- -------------
<S> <C> <C> <C> <C>
Revenues $81,961 $85,285 $277,463 $279,311
Other income 296 189 480 411
------- ------- -------- --------
Total revenues 82,257 85,474 277,943 279,722
Cost of goods sold 44,572 45,608 129,495 137,526
------- ------- -------- --------
Gross profit 37,685 39,866 148,448 142,196
Operating expenses (2,799) (3,748) (9,156) (13,604)
------- ------- -------- --------
Operating income 34,886 36,118 139,292 128,592
Interest expense (465) (158) (711) (1,602)
Interest income 1,462 1,151 4,982 3,672
------- ------- -------- --------
Net income $35,883 $37,111 $143,563 $130,662
======= ======= ======== ========
Net income allocable to
limited partners' interest $24,595 $27,195 $ 94,654 $ 96,678
======= ======= ======== ========
Net income per limited
partnership unit $ 1.31 $ 1.45 $ 5.03 $ 5.14
======= ======= ======== ========
</TABLE>
<PAGE>
TERRA NITROGEN COMPANY, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
----------------------------
1996 1995
------------- ------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $143,563 $130,662
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 8,526 8,222
Amortization of deferred finance fees 29 27
Changes in operating assets and liabilities:
Receivables 19,880 (13,851)
Inventories (1,512) 5,338
Prepaid expenses 2,358 (374)
Accounts payable, accrued liabilities and
customer prepayments (13,637) (10,868)
Other 1,748 124
======== ========
NET CASH PROVIDED BY OPERATING ACTIVITIES 160,955 119,280
NET CASH USED IN INVESTING ACTIVITIES:
Capital expenditures (5,771) (3,339)
FINANCING ACTIVITIES:
Repayment of long-term debt (832) (36,187)
Partnership distributions (171,296) (85,347)
-------- --------
NET CASH USED IN FINANCING ACTIVITIES (172,128) (121,534)
-------- --------
NET DECREASE IN CASH AND CASH EQUIVALENTS (16,944) (5,593)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 71,490 48,612
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 54,546 $ 43,019
======== ========
</TABLE>
See accompanying notes.
<PAGE>
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, 1995. 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 which 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. The
prior years' financial statements have been reclassified to conform to current
year presentation.
Net income per limited partnership unit is computed by dividing net
income, less a 34% and 26% share allocable to the General Partner for the nine
months ended September 30, 1996 and 1995, respectively, by 18,808,778 limited
partner units, composed of 13,636,364 Senior Preference Units ("SPUs")
(6,000,000 Junior Preference Units automatically became SPUs on December 31,
1995, pursuant to the terms of the Agreement of Limited Partnership of TNCLP),
and 5,172,414 Common Units. The net income allocated to the General Partner
increased to 34% during the nine months ended September 30, 1996 due to the
increase 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 that Available Cash for such taxable year was distributed to the
General Partner and the Limited Partners. 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 to
the extent that distributions of Available Cash exceed specified target levels
that are significantly above the Minimum Quarterly Distribution ("MQD") of
$.605 per quarter per unit. Available Cash for the nine months ended September
30, 1996 increased $55.7 million over the nine months ended September 30, 1995
due primarily to the reduction in 1995 Available Cash as a result of the
repayment of its $35 million term loan out of cash flow from operations during
the 1995 period, and an increase in 1996 Available Cash as a result of the
impact of TNCLP's participation in an accounts receivable securitization
facility (see Note 7) entered into during the third quarter of 1996 and due to
higher net income in 1996.
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). In
addition, a Reserve Amount equal to $18.5 million has been previously funded to
support
<PAGE>
distributions of the MQD on the SPUs. At September 30, 1996, the Reserve Amount
remained fully funded. During the Preference Period, ending December 31, 1996,
Senior Preference and Common Units participate equally in cash distributions
after each class of Units has received the MQD subject to the General Partner's
right to receive cash distributions.
The quarterly cash distributions declared on the Units and to the General
Partner applicable to 1996 and 1995 were as follows:
<TABLE>
<CAPTION>
Senior Preference Units Common Units General Partner
------------------------- ------------------------- -------------------------
Total ($000s) $ Per Unit Total ($000s) $ Per Unit Total ($000s) $ Per Unit
------------- ---------- ------------- ---------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C>
1996:
First Quarter 22,227 1.63 8,431 1.63 13,022 --
Second Quarter 33,000 2.42 12,517 2.42 27,883 --
Third Quarter 24,136 1.77 9,155 1.77 15,685 --
1995:
First Quarter 15,545 1.14 5,897 1.14 3,795 --
Second Quarter 23,591 1.73 8,948 1.73 14,904 --
Third Quarter 20,045 1.47 7,603 1.47 9,995 --
Fourth Quarter 26,045 1.91 9,879 1.91 18,290 --
</TABLE>
3. Cash and cash equivalents
The Partnership has a demand deposit with an affiliate that represents
excess Partnership cash deposited with Terra Capital, Inc., the parent of the
General Partner. The deposit is due on demand and at September 30, 1996 the
interest rate of 6.2% was based on the cost rate as calculated under the
accounts receivable sale agreement. The amount of the demand deposit included
in cash and cash equivalents was $37.9 million at September 30, 1996.
4. Conversion of SPUs
Pursuant to the provisions of the Agreement of Limited Partnership of
TNCLP, the Preference Period for TNCLP will end on December 31, 1996. At the
end of the Preference Period, for a 90-day period commencing on the date the
General Partner mails notice to the Senior Preference Unitholders that the
Senior Conversion Date (the last day of the Preference Period) has occurred,
the holders of all SPUs will have the right, subject to satisfaction of
exchange listing requirements, to elect to convert their SPUs into Common Units
on a one-for-one basis, effective as of the Senior Conversion Date, by
delivering to the General Partner a conversion notice. Any SPUs for which a
conversion notice is not received during such 90-day period will remain SPUs.
Those units that remain SPUs and do not convert into Common Units will continue
to be entitled to the MQD, but will not participate with the Common Units in
any additional distributions.
After the Preference Period, the Reserve Amount will be maintained only to
support distributions on any remaining SPUs. The Reserve Amount will be
maintained in the amount of the lesser of (1) $18.5 million or (2) the amount
equal to four quarters of MQDs on all SPUs outstanding.
<PAGE>
5. Redemption of SPUs
After the Preference Period, any or all of the SPUs may be redeemed at the
option of the Partnership, exercised in the sole discretion of the General
Partner, upon at least 30 but not more than 60 days' notice at a price equal to
Unrecovered Capital plus accrued arrearages, if any. Unrecovered Capital, as
further defined in the Partnership Agreement, means an amount equal to the
excess of (i) the initial public offering price per SPU ($21.50) over (ii) the
sum of all distributions made in respect of an SPU out of Available Cash
constituting Cash from Interim Capital Transactions. If after giving effect to
an anticipated redemption, fewer than 1.0 million SPUs would be held by non-
affiliates of the General Partner, the Partnership must redeem all such SPUs if
it redeems any SPUs.
6. Natural gas costs
The Partnership's natural gas procurement policy is to effectively fix or
cap the unit cost of approximately 40-80% of its natural gas requirements for
the upcoming 12 months and up to 50% of its natural gas requirements for the
subsequent two-year period using supply contracts, financial derivatives and
other forward pricing techniques to gain some protection against natural gas
price increases on the spot market. These contracts are based on a designated
price, which price is referenced to market natural gas prices or appropriate
NYMEX futures contract prices. The Partnership frequently uses prices at the
Henry Hub in Louisiana as the index price. Natural gas supplies for the
Partnership's two production facilities are purchased from various suppliers for
each plant location. This creates a location basis differential between the
contract price and the physical price of natural gas. Accordingly, the use of
financial derivatives may more than offset the change in the price of physical
gas.
As of September 30, 1996, the Partnership had effectively fixed or capped
the price of a substantial portion of its natural gas requirements for 1996,
1997 and 1998, consistent with its policy mentioned above. As a result of such
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 may incur costs above the
spot market price as a result of such policies. The Partnership has entered into
firm contracts to minimize the risk of interruption or curtailment of natural
gas supplies. Unrealized gains from forward pricing positions totaled $11.3
million as of September 30, 1996. As of September 30, 1995, unrealized losses
from forward pricing positions totaled $4.0 million.
For the nine months ended September 30, 1996, natural gas hedging
activities produced cost savings of approximately $28.4 million. Conversely, for
the comparable 1995 period, natural gas hedging increased cost by approximately
$15.1 million.
<PAGE>
7. Accounts Receivable Securitization
On August 20, 1996, TNCLP and certain affiliates of the General Partner,
through Terra Funding Corporation ("TFC"), an affiliate of the General Partner
and a limited purpose corporation, entered into an agreement with a large
financial institution to sell an undivided interest in its accounts receivable.
Undivided interests in new receivables may be sold as amounts are collected on
previously sold interests. The discount on the accounts receivable sold is
included in interest expense in the Consolidated Statements of Income.
8. New accounting standards
In March 1995, the Financial Accounting Standards Board issued SFAS No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed of", which establishes accounting standards for such
assets. The Partnership adopted SFAS No. 121 effective January 1, 1996 and there
was no material impact on the Partnership's consolidated financial position or
results of operations.
In June 1996, the Financial Accounting Standards Board issued SFAS No. 125,
"Accounting for Transfers and Servicing of Financial Assets and Extingushments
of Liabilities", which establishes accounting and reporting standards for such
transfers. The Partnership will adopt SFAS No. 125 effective January 1, 1997.
Management does not expect that there will be a material impact on the
Partnership's consolidated financial position or results of operations.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1996, COMPARED WITH THE THREE MONTHS ENDED
SEPTEMBER 30, 1995
Volumes and prices for the three month periods ended September 30, 1996 and
1995 were as follows:
<TABLE>
<CAPTION>
1996 1995
------------------------- ------------------------
Sales Average Sales Average
Volumes Unit Price Volumes Unit Price
(000 tons) ($/ton) (000 tons) ($/ton)
------------------------- ------------------------
<S> <C> <C> <C> <C>
Ammonia 104 164 123 173
UAN 585 85 460 92
Urea 94 160 132 165
</TABLE>
Revenues for the quarter ended September 30, 1996 declined $3.2 million, or
4%, compared with the quarter ended September 30, 1995 primarily due to lower
sales prices. Sales prices for all products were down between 3% and 7% compared
with the prior year quarter. In addition, sales volumes for urea and ammonia
decreased 29% and 15%, respectively, while UAN volumes increased 27% compared
with the same period in 1995. Urea and ammonia sales volumes declined primarily
due to a turnaround performed at the Blytheville Plant and reduced shipments for
wheat pre-plant application during the third quarter of 1996. UAN sales volumes
increased due to the late spring planting season that continued into the third
quarter and due to increased fall dealer demand.
Cost of goods sold as a percentage of revenues was 54% for the 1996
quarter, a slight increase from the third quarter of 1995 as the lower nitrogen
sales prices were offset by lower natural gas costs. While spot natural gas
prices were approximately 56% higher during the third quarter of 1996 compared
with the same period in 1995, the Partnership's gas procurement activities,
which include forward pricing techniques, decreased its overall cost of natural
gas by 4% compared with the 1995 quarter. During the third quarter of 1996, the
Partnership realized gains on forward pricing transactions of $5.7 million
compared with losses of $4.3 million recorded in the 1995 quarter.
Operating expenses decreased $0.9 million, or 25%, compared with the 1995
quarter primarily due to lower data processing, legal, incentive compensation
and employee benefit expenses. In addition, severance and relocation expenses
were lower during the 1996 period.
Interest expense increased $307,000 over the comparable 1995 period
primarily due to the discount on accounts receivable sold under the accounts
receivable securitization facility entered into during the third quarter of 1996
(see Note 7).
<PAGE>
Interest income increased $311,000, or 27%, compared with the 1995 period
due to higher levels of cash and short term investments.
NINE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED WITH THE NINE MONTHS ENDED
SEPTEMBER 30, 1995
Volumes and prices for the nine month periods ended September 30, 1996 and 1995
were as follows:
<TABLE>
<CAPTION>
1996 1995
------------------------ -------------------------
Sales Average Sales Average
Volumes Unit Price Volumes Unit Price
(000 tons) ($/ton) (000 tons) ($/ton)
------------------------ -------------------------
<S> <C> <C> <C> <C>
Ammonia 311 183 327 206
UAN 1,731 95 1,522 95
Urea 312 180 358 86
</TABLE>
Revenues for the nine months ended September 30, 1996 were virtually
unchanged from the comparable 1995 period as higher UAN sales volumes were
offset by lower sales prices and volumes for urea and ammonia. UAN sales volumes
increased 14% primarily due to an approximate 12% increase in corn acres planted
during 1996. The increase in planted acres was due in part to low grain
inventories, high grain prices and passage of the 1996 Farm Bill which ended
government acreage reduction and production control measures, allowing farmers
more flexibility in planting. In addition, demand for fall dealer requirements
occurred earlier in 1996 compared with the requirements for fall 1995. Erratic
weather patterns reduced ammonia and urea applications during the 1996 period.
Wet weather in parts of the corn belt during the 1996 planting season created
unfavorable conditions for ammonia application. The wet weather combined with
reduced demand for use in the manufacture of phosphate fertilizers and lower
industrial demand caused ammonia prices to decline approximately 11% from 1995.
Urea and ammonia sales volumes were also impacted by a scheduled turnaround
performed at the Blytheville Plant during the third quarter of 1996 and reduced
shipments for wheat pre-plant application during 1996.
Cost of goods sold as a percentage of revenues decreased to 47% for the
1996 period from 49% for the 1995 period, despite slightly lower sales prices,
reflecting the favorable impact of the Partnership's natural gas procurement
activities. The Partnership's forward pricing activities decreased its overall
cost of natural gas by 26% compared with the 1995 period. Spot natural gas
prices were 45% higher during 1996 due to cold weather during the first quarter
of 1996 which caused spot natural gas prices to increase and remain high during
the second and third quarters as natural gas storage levels were replenished.
During 1996, the Partnership realized gains on natural gas forward pricing
transactions of $28.5 million.
Operating expenses decreased $4.4 million, or 33%, compared with the nine
months ended September 30, 1995 as a result of severance payments made during
1995 versus none in 1996 and lower 1996 incentive
<PAGE>
compensation expenses due to changes in profit sharing plans. In addition, data
processing, legal and employee benefit expenses were lower during 1996.
Interest expense declined $891,000 in the nine months ended September 30,
1996, compared with the same period in 1995 primarily due to the repayment of
the Partnership's $35 million term loan during the second quarter of 1995.
Interest income increased $1.3 million during 1996 due to higher levels of
cash and short-term investments.
CAPITAL RESOURCES AND LIQUIDITY
Net cash provided by operating activities for the first nine months of 1996
was $161.0 million, an increase of $41.7 million over the same period in 1995,
principally due to higher net income and the proceeds received from the accounts
receivable securitization program entered into during the third quarter of 1996.
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. At September 30, 1996, the Operating Partnership also had $25
million of unused borrowing capacity under its revolving credit facility. 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.
Available Cash for the nine months ended September 30, 1996 increased $55.7
million over the nine months ended September 30, 1995 due primarily to the
repayment of its $35 million term loan during the 1995 period, proceeds from the
accounts receivable securitization facility and higher net income in 1996. On
October 21, 1996, the General Partner announced a cash distribution of $24.1
million ($1.77 per Unit) to holders of the SPUs of record as of November 6,
1996, payable on November 27, 1996, based on Available Cash for the quarter
ended September 30, 1996. A cash distribution of $9.2 million ($1.77 per Unit)
on the Common Units, and a cash distribution of $15.7 million to the General
Partner based on Available Cash for the quarter ended September 30, 1996, were
also declared. There were no accumulated distribution arrearages for any Units
as of September 30, 1996. At September 30, 1996, the Reserve Amount remained
fully funded. During the first nine months of 1996, the Partnership paid $171.3
million in distributions to its Partners.
Accounts receivable declined $19.9 million from the December 31, 1995
balance due to the accounts receivable securitization facility entered into in
the third quarter of 1996.
Customer prepayments declined $13.1 million from the December 31, 1995
balance due to the normal seasonal drawdown by customers of product purchased in
prior periods. Certain customers prepay for product
<PAGE>
during the fall and winter months to take advantage of favorable pricing
conditions. The customers then take delivery of the product as needed during the
spring planting season.
CAPITAL EXPENDITURES
Capital expenditures totaled $5.8 million for the first nine months of
1996. In the remainder of 1996, the Partnership plans to spend approximately
$4.0 million.
ENVIRONMENTAL MATTERS
The Partnership is subject to federal, state and local environmental,
health and safety laws and regulations, particularly relating to air and water
quality. In the course of its ordinary operations, the Partnership has and will
generate wastes which may fall within the definition of "hazardous substances"
under federal or state laws. The Partnership's production facilities and storage
locations require ongoing operating expenditures in order to remain in
compliance with environmental regulations. These operating costs consist largely
of such items as electrical and chemical usage, waste disposal, laboratory
analysis, fees for outside consultants and contractors, and salaries for
environmental employees.
Based on its current knowledge, the Partnership does not expect capital
expenditures relating to environmental matters to have a material adverse effect
on its results of operations, financial condition, capital resources, liquidity
or cash flow. Based on information presently available, the Partnership does not
expect that any further material capital expenditures will be required to comply
with existing environmental regulations. Based on such regulations, the
Partnership does not believe that it will be required to make any material
environmental remediation expenditures in the foreseeable future.
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
10.54 - Consent and Amendment No. 2 dated as of July 31, 1996 to
Amended and Restated Credit Agreement, filed as Exhibit
4.5 to the Terra Industries Inc. Form 10-Q for the period
ended September 30, 1996 (File No. 1-8520), is
incorporated herein by reference.
10.55 - Receivables Purchase Agreement dated as of August 20,
1996 among Terra Funding Corporation, Terra Capital,
Inc., Certain Financial Institutions and Bank of America
National Trust and Savings Association, filed as Exhibit
10.12 to the Terra Industries Inc. Form 10-Q for the
period ended September 30, 1996 (File No. 1-8520), is
incorporated herein by reference.
10.56 - Purchase and Sale Agreement dated as of August 20, 1996
among Terra International, Inc., Terra Nitrogen, Limited
Partnership, Beaumont Methanol, Limited Partnership,
Terra Funding Corporation and Terra Capital, Inc., filed
as Exhibit 10.13 to the Terra Industries Inc. Form 10-Q
for the period ended September 30, 1996 (File No.
1-8520), is incorporated herein by reference.
27 - Financial Data Schedule. (EDGAR only)
(b) Reports on Form 8-K:
None.
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/ Erik L. Slockers
-------------------------------------
Erik L. Slockers
Vice President, Controller
(Principal Accounting Officer)
Date: November 14, 1996
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND> This Schedule contains summary financial information extracted from
the consolidated statement of financial position of Terra Nitrogen Company, L.P.
as of September 30, 1996 and the related consolidated statement of income for
the nine months then ended.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 54,546
<SECURITIES> 0
<RECEIVABLES> 8,546
<ALLOWANCES> 0
<INVENTORY> 29,085
<CURRENT-ASSETS> 95,820
<PP&E> 264,762
<DEPRECIATION> (91,935)
<TOTAL-ASSETS> 301,412
<CURRENT-LIABILITIES> 38,143
<BONDS> 3,585
0
0
<COMMON> 0
<OTHER-SE> 258,624<F1>
<TOTAL-LIABILITY-AND-EQUITY> 301,412
<SALES> 277,463
<TOTAL-REVENUES> 277,943
<CGS> 129,495
<TOTAL-COSTS> 129,495
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 711
<INCOME-PRETAX> 143,563
<INCOME-TAX> 0
<INCOME-CONTINUING> 143,563
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 143,563
<EPS-PRIMARY> 5.03
<EPS-DILUTED> 0
<FN>
<F1> due to the nature of the partnership, this represents partners capital
</FN>
</TABLE>
