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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-Q



ý

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the quarter ended September 30, 2010ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period
from                             toCommission file number 033-43007


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

Delaware

73-1389684(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer Identification No.)4 Parkway North, Suite 400
Deerfield, Illinois

60015(Address of principal executive office)

(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. ý 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. o 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 o

Accelerated filer ý

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    ý No

At the close of business on November 5, 2010 there were 18,501,576 Common Units outstanding.



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Table of Contents



TERRA NITROGEN COMPANY, L.P.

TABLE OF CONTENTS



PART IFINANCIAL INFORMATIONItem 1.

Financial StatementsConsolidated Balance Sheets

3Consolidated Statements of Operations

4Consolidated Statements of Cash Flows

5Consolidated Statements of Partners' Capital

6Notes to the Consolidated Financial Statements

7Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

16Item 3.

Quantitative and Qualitative Disclosures about Market Risk

22Item 4.

Controls and Procedures

22PART IIOTHER INFORMATIONItem 5.

Other Information

24Item 6.

Exhibits

24


2

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Table of Contents

TERRA NITROGEN COMPANY, L.P.

PART I. FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS

(in millions, except for units)

(unaudited)
September 30,
2010

December 31,
2009ASSETSCurrent assets:Cash and cash equivalents

$
101.1

$
24.8Due from affiliate





3.8Accounts receivable, less allowance for doubtful accounts of $0.0 and $0.8


23.1


23.9Inventories, net


23.4


29.5Prepaid expenses and other current assets


0.8


5.4Total current assets


148.4


87.4Property, plant and equipment, net


83.2


79.1Plant turnarounds, net


14.0


8.4Other assets


7.2


6.9Total assets

$
252.8

$
181.8LIABILITIES AND PARTNERS' CAPITALCurrent liabilities:Accounts payable and accrued liabilities

$
36.5

$
23.4Due to affiliate


2.9


Customer prepayments


33.6


16.4Total current liabilities


73.0


39.8Noncurrent liabilities


0.4


0.7Contingency (Note 12)Partners' capital:Limited partners' interests, 18,501,576 Common Units authorized and outstanding


186.1


152.8Limited partners' interests, 184,072 Class B Common Units authorized and outstanding


0.3


(0.1
)General partner's interest


(7.0
)

(14.6
)Accumulated other comprehensive income





3.2Total partners' capital


179.4


141.3Total liabilities and partners' capital

$
252.8

$
181.8


See
Accompanying Notes to the Unaudited Consolidated Financial Statements.

3

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Table of Contents

TERRA NITROGEN COMPANY, L.P.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per unit amounts)

(unaudited)

Three Months Ended
September 30,

Nine Months Ended
September 30,2010

2009

2010

2009Revenues:Product revenues

$
136.0

$
101.4

$
421.3

$
409.1Other income





0.1


0.4


0.5Total revenues


136.0


101.5


421.7


409.6Costs and expenses:Cost of goods sold


96.8


79.7


273.5


274.7Gross margin


39.2


21.8


148.2


134.9Selling, general and adminstrative expenses


3.8


4.5


12.1


13.9Earnings from operations


35.4


17.3


136.1


121.0Interest expense


(0.3
)

(0.1
)

(0.4
)

(0.3
)Interest income


0.1


0.1


0.1


0.7Net earnings

$
35.2

$
17.3

$
135.8

$
121.4Allocation of net earnings:General Partner

$
9.0

$
5.2

$
34.6

$
42.8Class B Common Units


0.3


0.2


1.3


1.2Common Units


25.9


11.9


99.9


77.4Net earnings

$
35.2

$
17.3

$
135.8

$
121.4Net earnings per Common Unit

$
1.40

$
0.64

$
5.40

$
4.18


See
Accompanying Notes to the Unaudited Consolidated Financial Statements.

4

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TERRA NITROGEN COMPANY, L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

(unaudited)

Nine Months Ended
September 30,2010

2009Operating ActivitiesNet earnings

$
135.8

$
121.4Adjustments to reconcile net earnings to net cash flows from operating activities:Depreciation and amortization


11.9


12.4Non-cash loss (gain) on derivatives


6.7


(0.2
)Changes in operating assets and liabilities:Receivables


0.8


19.1Due to/from affiliate


6.7


Inventories


6.1


35.6Accounts payable and customer prepayments


24.1


(21.9
)Other assets and liabilities


0.7


(6.2
)Net cash provided by operating activities


192.8


160.2Investing ActivitiesAdditions to property, plant and equipment and plant turnaround expenditures


(21.4
)

(23.7
)Net cash used in investing activities


(21.4
)

(23.7
)Financing ActivitiesPartnership distributions paid


(94.5
)

(220.5
)Debt origniation fees


(0.6
)

Net cash used in financing activities


(95.1
)

(220.5
)Increase/(decrease) to cash and cash equivalents


76.3


(84.0
)Cash and cash equivalents at beginning of year


24.8


154.7Cash and cash equivalents at end of period

$
101.1

$
70.7


See
Accompanying Notes to the Unaudited Consolidated Financial Statements.

5

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TERRA NITROGEN COMPANY, L.P.

CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL

(in millions)

(unaudited)

Common
Units

Class B
Common
Units

General
Partner's
Interests

Accumulated
Other
Comprehensive
Income

Total
Partners'
Capital

Comprehensive
IncomePartners' capital at January 1, 2010

$
152.8

$
(0.1
)
$
(14.6
)
$
3.2

$
141.3Net earnings


99.9


1.3


34.6





135.8

$
135.8Change in fair value of derivatives











(3.2
)

(3.2
)

(3.2
)Comprehensive income
















$
132.6Distributions


(66.6
)

(0.9
)

(27.0
)




(94.5
)Partners' capital at September 30, 2010

$
186.1

$
0.3

$
(7.0
)
$


$
179.4




Common
Units

Class B
Common
Units

General
Partners'
Interests

Accumulated
Other
Comprehensive
Income

Total
Partners'
Capital

Comprehensive
IncomePartners' capital at January 1, 2009

$
217.9

$
1.0

$
39.2

$
(30.8
)
$
227.3Net earnings


77.4


1.2


42.8





121.4

$
121.4Change in fair value of derivatives











31.8


31.8


31.8Comprehensive income
















$
153.2Distributions


(135.0
)

(2.1
)

(83.4
)




(220.5
)Partners' capital at September 30, 2009

$
160.3

$
0.1

$
(1.4
)
$
1.0

$
160.0


See
Accompanying Notes to the Unaudited Consolidated Financial Statements.

6

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TERRA NITROGEN COMPANY, L.P.

Notes to Consolidated Financial Statements (Unaudited)

1. Background and Basis of Presentation

Terra Nitrogen Company, L.P. (TNCLP, our, we, or us) is a manufacturer of nitrogen fertilizer products. TNCLP and its operating partnership subsidiary, Terra Nitrogen, Limited
Partnership (Operating Partnership), are referred to herein, collectively, as the "Partnership." Our principal products are anhydrous ammonia (ammonia) and urea ammonium nitrate solutions (UAN), which
we manufacture at our facility in Verdigris, Oklahoma. We operate in one principal industry segmentNitrogen Products, which is based upon the guidance provided in the Segment Reporting
topic of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (Codification).

Terra
Nitrogen GP Inc., the Partnership's general partner (the General Partner), is a wholly-owned subsidiary of Terra Industries Inc. (Terra). On April 15,
2010, Terra became an indirect, wholly-owned subsidiary of CF Industries Holdings, Inc. (CF) pursuant to an agreement and plan of merger between CF and Terra, dated as of March 12, 2010.
As a result of the acquisition, the General Partner became a wholly-owned subsidiary of CF. CF's acquisition of Terra has not impacted the recorded basis of any of the assets or liabilities of the
Partnership.

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, 2009, 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 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 in these consolidated financial statements include net
realizable value of inventories, environmental remediation liabilities, environmental and litigation contingencies, the cost of sales incentives, useful lives of property, the evaluation of
impairments of property and allowances for doubtful accounts receivable.

2. Summary of Significant Accounting Policies

For a complete discussion of the Partnership's significant accounting policies, refer to the notes to our
audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2009, filed with the SEC on March 3, 2010.

3. New Accounting Standards

Following are summaries of accounting pronouncements that either were adopted recently or may become applicable to our consolidated financial statements. It should be noted that the
accounting standards references provided below reflect the FASB Accounting Standards Codification, and related Accounting Standards Updates (ASU).

7

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TERRA NITROGEN COMPANY, L.P.

Notes to Consolidated Financial Statements (Unaudited) (Continued)

3. New Accounting Standards (Continued)

Recently Adopted Pronouncements

In June 2009, the FASB issued an accounting standard that revises the rules for consolidating variable interest entities (ASU
No. 2009-17). This standard changes how a reporting entity determines when to consolidate an entity that is insufficiently capitalized or is not controlled through voting (or
similar rights). The determination is based on, among other things, the other entity's purpose and design and the reporting entity's ability to direct the activities of the other entity that most
significantly impact the other entity's economic performance. The standard also requires a company to provide additional disclosures about its involvement with variable interest entities and any
significant changes in risk exposure due to that involvement. We adopted this standard as of January 1, 2010. The adoption of this standard did not have a material impact on our consolidated
financial statements.

In
June 2009, the FASB issued a standard that amends the requirements for transfers of financial assets (ASU No. 2009-16). This standard removes the concept of
a qualifying special-purpose entity and removes the exception from applying these rules to qualifying special purpose entities. It also changes the requirements for de-recognizing
financial assets and requires additional disclosures about a transferor's continuing involvement in financial assets. We adopted this standard as of January 1, 2010. The adoption of this
standard did not have a material impact on our consolidated financial statements.

In
January 2010, the FASB issued a standard pertaining to fair value disclosures (ASU No. 2010-6) that requires a reporting entity to disclose separately the
amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and describe the reasons for the transfers, and to disclose separately certain additional
information about purchases, sales, issuances, and settlements of Level 3 fair value measurements. This standard also requires an entity to provide disclosures about the valuation techniques
and inputs used to measure fair value for both recurring and nonrecurring fair value measurements for Level 2 and Level 3 items. The standard is effective for interim and annual
reporting periods beginning after December 15, 2009, except for the Level 3 disclosure of activity, which is effective for fiscal years beginning after December 15, 2010. We
adopted the effective portions of this standard as of March 31, 2010. The adoption of the effective portions of this standard did not have a material impact on our consolidated financial
statements.

4. Agreement of Limited Partnership

We make quarterly distributions to our partners 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, adjusted for changes in certain reserves established as the General Partner determines in its reasonable discretion to be necessary. In the nine months ended
September 30, 2010 and 2009, we paid partnership distributions of $94.5 million and $220.5 million, respectively.

We
receive 99% of the Available Cash from the Operating Partnership and 1% is distributed to its general partner (who is also our 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 Unitholders and Class B Common Unitholders and
0.025% to our General Partner except when cumulative distributions of Available Cash exceed specified target levels above the Minimum Quarterly Distribution (MQD) of $0.605 per unit. Under such
circumstances, our

8

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Table of Contents

TERRA NITROGEN COMPANY, L.P.

Notes to Consolidated Financial Statements (Unaudited) (Continued)

4. Agreement of Limited Partnership (Continued)

General
Partner is entitled, as an incentive, to larger percentage interests or Incentive Distribution Rights (IDRs).

On
November 4, 2010, we announced a $1.40 cash distribution per common limited partnership unit, payable on November 29, 2010 to holders of record as of November 15,
2010. In the third quarter, we exceeded the cumulative MQD amounts and will distribute Available Cash as summarized in the following table:

Income and Distribution AllocationTarget
Limit

Target
Increment

Common
Units

Class B
Common
Units

General
Partner

TotalMinimum 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.

At
September 30, 2010, 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, we, at the General Partner's sole discretion, may call, or assign to the General Partner or its affiliates, our right to acquire 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 and (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.

5. Net Earnings per Common Unit

Basic and diluted earnings per Common Unit is based on the weighted-average number of Common Units outstanding during the period. The following table provides a reconciliation for basic

9

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TERRA NITROGEN COMPANY, L.P.

Notes to Consolidated Financial Statements (Unaudited) (Continued)

5. Net Earnings per Common Unit (Continued)

and
diluted earnings per Common Unit for the three and nine month periods ended September 30, 2010 and 2009:

Three Months Ended
September 30,

Nine Months Ended
September 30,2010

2009

2010

2009(in millions, except per-unit amounts)Basic earnings per Common Unit:Net earnings

$
35.2

$
17.3

$
135.8

$
121.4Less: Net earnings allocable to Class B Common Units


0.3


0.2


1.3


1.2Less: Net earnings allocable to General Partner


9.0


5.2


34.6


42.8Net earnings allocable to Common Units

$
25.9

$
11.9

$
99.9

$
77.4Weighted average units outstanding


18.5


18.5


18.5


18.5Net earnings per Common Unit

$
1.40

$
0.64

$
5.40

$
4.18


There
were no dilutive Common Units outstanding for the three and nine month periods ended September 30, 2010 and 2009.

6. Inventories, Net

Inventories consisted of the following:

September 30,
2010

December 31,
2009(in millions)Materials and supplies

$
13.2

$
9.1Finished goods


10.2


20.4Total

$
23.4

$
29.5


7. Derivative Financial Instruments

We enter into derivative financial instruments, including swaps, basis swaps, purchased put and call options and sold call options, to manage the volatility of in natural gas prices. We
report derivatives on the balance sheet at fair value. If the derivative is not designated as a hedging instrument, changes in fair value are recognized in the statement of operations in the period of
change. Cash flows related to natural gas derivatives are reported as operating activities.

Prior
to the acquisition of Terra by CF, we generally classified our natural gas derivatives as cash flow hedges if all of the following conditions were met: The item to be hedged
exposed us to currency,
interest or price risk; it was probable that the results of the hedge position substantially offset the effects of the risk; and the hedge designation occurred at the inception of the hedge. If the
derivative was designated as a cash flow hedge, and to the extent such hedge was determined to be effective, changes in fair value were reported as a component of accumulated other comprehensive
income (AOCI) in the period of change, and subsequently recognized in earnings in the period the offsetting hedged transaction occurred.

10

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TERRA NITROGEN COMPANY, L.P.

Notes to Consolidated Financial Statements (Unaudited) (Continued)

7. Derivative Financial Instruments (Continued)

In
the second quarter of 2010, we discontinued hedge accounting in order to align our accounting policy with CF's. At that time, all open cash flow hedges were de-designated,
resulting in changes in fair value thereafter being recognized in the statement of operations. The remaining balance in AOCI relating to derivatives that were originally designated as cash flow hedges
was reclassified into earnings as derivatives settled during the three months ended June 30, 2010.

The
gross fair values of derivatives on our Consolidated Balance Sheets are shown below. At September 30, 2010, all balance sheet amounts arise from commodity derivatives that are
not designated as hedging instruments. At December 31, 2009, all balance sheet amounts arose from commodity derivatives that were designated as cash flow hedges. For additional information on
derivative fair values, see Note 8Fair Value Measurements.

September 30,
2010

December 31,
2009(in millions)Unrealized gains in other current assets

$


$
3.4Unrealized losses in other current liabilities


(7.1
)

Net unrealized derivative gains (losses)

$
(7.1
)
$
3.4


At
September 30, 2009, we determined that a portion of certain derivative contracts were ineffective for accounting purposes and, as a result, we recorded a $0.8 million
charge to cost of sales for the nine month period ended September 30, 2009. At September 30, 2009, we excluded a portion of the loss on certain derivative contracts from the
effectiveness assessment and, as a result, reported a $1.1 million credit to cost of sales.

11

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TERRA NITROGEN COMPANY, L.P.

Notes to Consolidated Financial Statements (Unaudited) (Continued)

7. Derivative Financial Instruments (Continued)

The
following table presents the effect of our commodity derivative instruments on the Consolidated Statements of Operations for the three and nine months ended September 30, 2010
and 2009.

Three Months Ended September 30Amount of
Gain (Loss)
Reclassified
from AOCI
into IncomeAmount of
Gain (Loss)
Recognized
in OCI





Amount of
Gain (Loss)
Recognized
in IncomeLocation of Gain (Loss)
Reclassified from AOCI
into Income(a)

Location of Gain (Loss)
Recognized in Income2010

2009

2010

2009

2010

2009(in millions)$


$
(0.6
)
Cost of Sales

$


$
(2.7
)
Cost of Sales

$
(7.2
)
$
0.3




Nine Months Ended September 30Amount of
Gain (Loss)
Reclassified
from AOCI
into IncomeAmount of
Gain (Loss)
Recognized
in OCI





Amount of
Gain (Loss)
Recognized
in IncomeLocation of Gain (Loss)
Reclassified from
AOCI into Income(a)

Location of Gain (Loss)
Recognized in Income2010

2009

2010

2009

2010(b)

2009(c)(in millions)$


$
(15.1
)
Cost of Sales

$
3.2

$
(47.0
)
Cost of Sales

$
(6.7
)
$
0.3


(a)Gain
(loss) recognized in AOCI, net of amounts reclassified from AOCI into earnings. In the three months ended June 30, 2010, $4.0 million of
losses were reclassified into earnings related to cash flow hedges that were de-designated as a result of the discontinuance of hedge accounting.(b)For
the nine months ended September 30, 2010, the amount of gain (loss) recognized in earnings includes a $4.0 million loss in the second
quarter related to reclassification from AOCI into earnings following the discontinuance of hedge accounting. Amounts representing the ineffective portion of the hedging relationships and amounts
excluded from the assessment of hedge effectiveness prior to the discontinuance of hedge accounting were insignificant.(c)For
the nine months ended September 30, 2009, the amount of gain (loss) recognized in earnings represents ($0.8) million related to the
ineffective portion of the hedging relationships and $1.1 million related to amounts excluded from the assessment of hedge effectiveness.


At
September 30, 2010, we had open derivative contracts for 10.4 million MMBtus of natural gas. For the nine months ended September 30, 2010, we used derivatives to
cover approximately 55% of our natural gas consumption.

We
purchase natural gas at market prices to meet production requirements at our manufacturing facility. Natural gas market prices are volatile and we effectively hedge a portion of our
natural gas production requirements through the use of swaps and options. These contracts reference physical natural gas prices or approximate NYMEX futures contract prices. Contract prices are
frequently based on prices at the Henry Hub in Louisiana, the most common and financially liquid location of reference for financial derivatives related to natural gas. However, we purchase natural
gas for our manufacturing facility at locations other than Henry Hub, 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

12

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TERRA NITROGEN COMPANY, L.P.

Notes to Consolidated Financial Statements (Unaudited) (Continued)

7. Derivative Financial Instruments (Continued)

not
exactly offset the changes 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.

Our
derivatives do not have credit risk related contingent features that would require us to settle the derivatives or post collateral upon the occurrence of a credit event.

8. 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 sheet that are recognized at fair value on a
recurring basis, and indicates the fair value hierarchy utilized to determine such fair value as of September 30, 2010 and December 31, 2009.

Balance as of
September 30,
2010

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

$
101.1

$
101.1

$


$
Total assets at fair value

$
101.1

$
101.1

$


$
Unrealized losses on natural gas derivatives

$
(7.1
)
$


$
(7.1
)
$
Total liabilities at fair value

$
(7.1
)
$


$
(7.1
)
$





Balance as of
December 31,
2009

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

$
24.8

$
24.8

$


$
Unrealized gains on natural gas derivatives


3.4





3.4


Total assets at fair value

$
28.2

$
24.8

$
3.4

$



Following
is a summary of the valuation techniques for assets and liabilities recorded in our consolidated balance sheet at fair value on a recurring basis:

Cash and Cash Equivalents

As of September 30, 2010 and December 31, 2009, our cash and cash equivalents consisted primarily of U.S. Treasury Bills
with original maturities of three months or less and money market mutual funds that invest in U.S. government obligations.

Natural Gas Derivatives

The derivative instruments that we currently use are primarily natural gas swap contracts. These contracts settle using NYMEX futures
prices, which represent fair value at any given time. The contracts are traded in months forward and settlements are scheduled to coincide with anticipated gas purchases during those future periods.
Quoted market prices from NYMEX are used to determine the

13

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TERRA NITROGEN COMPANY, L.P.

Notes to Consolidated Financial Statements (Unaudited) (Continued)

8. Fair Value Measurements (Continued)

fair
value of these instruments. See Note 7Derivative Financial Instruments for additional information.

9. Property, Plant and Equipment, Net

Property, plant and equipmentnet consists of the following:

September 30,
2010

December 31,
2009(in millions)Land

$
1.6

$
1.6Building and improvements


6.9


6.9Plant and equipment


251.9


246.5Construction in progress


11.5


4.6271.9


259.6Less: Accumulated depreciation, depletion and amortization


188.7


180.5$
83.2

$
79.1


10. Plant Turnarounds, Net

Plant turnaroundsScheduled inspections, replacements and overhauls of plant machinery and equipment at our continuous process manufacturing facility are referred to as plant
turnarounds. The expenditures related to turnarounds are capitalized when incurred. The following is a summary of plant turnaround activity for the nine months ended September 30, 2010 and
2009:

Nine months ended
September 30,2010

2009(in millions)Net capitalized turnaround costs:Beginning balance

$
8.4

$
5.2Additions


9.1


7.4Depreciation


(3.5
)

(5.0
)Ending balance

$
14.0

$
7.6


Scheduled
replacements and overhauls of plant 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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TERRA NITROGEN COMPANY, L.P.

Notes to Consolidated Financial Statements (Unaudited) (Continued)

11. Revolving Credit Facility

Effective September 28, 2010, we terminated our $50 million revolving credit facility (the facility). Under the facility interest was charged at a variable rate plus a
fixed margin (London Interbank Offer Rate (LIBOR) plus 300 basis points). Under the facility, available borrowing was generally based on eligible cash balances, 85% of eligible accounts receivable and
60% of eligible finished goods inventory, less outstanding letters of credit. Borrowings under the credit facility were secured by substantially all of our working capital. The facility also required
us to adhere to certain limitations on additional debt, capital expenditures, acquisitions, liens, asset sales, investments, prepayments of subordinated indebtedness, changes in lines of business and
transactions with affiliates. At September 28, 2010, there were no amounts outstanding under the facility.

12. Contingency

In October 2007, a request for information was received from the U.S. Environmental Protection Agency (EPA) pursuant to Section 114 of the Clean Air Act with respect to
CF's (formerly Terra's) nitric acid plant at Port Neal, Iowa. Subsequently, a proposal was made to the EPA to resolve a number of potential Clean Air Act violations associated with prior modifications
at nine of the nitric acid plants, including our Verdigris facility. Negotiations with the EPA have been ongoing since May 2008 with respect to a proposed consent decree that, if finalized,
will require compliance with
significantly lower nitrogen oxide emission standards. It is expected that compliance with these emission limits will require new or upgraded selective catalytic reduction systems and continuous
emission monitors at our facility. Although agreement in principle has been reached with the EPA with respect to the standards and modifications, the final terms of the consent decree to resolve this
matter are continuing to be negotiated.

13. Related Parties

On September 29, 2010, we entered into an Amendment to the General and Administrative Services and Product Offtake Agreement (the Amendment) with CF Industries, Inc. (CF
Industries), Terra and the General Partner.

Effective
as of July 1, 2010, the Amendment changes the Amended and Restated General and Administrative Services Agreement among Terra , the General Partner and TNCLP, dated as of
October 23, 2007 (the Terra Services Agreement), to assign all of Terra's rights and obligations under the Terra Services Agreement to CF Industries and amend the cost of the services to be
provided to TNCLP by CF Industries by replacing the prior variable cost allocation with a fixed quarterly fee of $3.5 million, subject to annual inflation adjustment. The fixed quarterly fee is
in addition to costs and expenses incurred by CF Industries that are directly attributable to TNCLP.

Also,
pursuant to the Amendment, beginning at a future effective date to be agreed by the parties and announced at a later date, TNCLP will sell all of its fertilizer products to CF
Industries at prices to be determined based on the then current market prices for TNCLP products as defined in the Amendment. The Amendment is effective for a one-year term from the
effective date and will renew automatically for successive one-year terms unless terminated by any of the parties.

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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 our Unaudited Condensed Consolidated Financial Statements and
the related Notes thereto contained in Part I, Item 1 of this report. The information contained in this Quarterly Report on Form 10-Q is not a complete description of
our business or the risks associated with an investment in our Common Units. We urge you to review carefully and consider the various disclosures made by us in this report and in our other reports
filed with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2009 and subsequent reports on Form 8-K and
Form 10-Q, which discuss our business in greater detail.

The
section entitled "Risk Factors" contained in Part II, Item 1A of our Quarterly Report on Form 10-Q filed with the SEC on August 6, 2010, 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
carefully consider those risks, in addition to the other information in this report and in our other filings with the SEC.

Terra
Nitrogen GP Inc., the Partnership's general partner (TNGP or the General Partner), is a wholly-owned subsidiary of Terra Industries Inc. (Terra). On
April 15, 2010, Terra became an indirect, wholly-owned subsidiary of CF Industries Holdings, Inc. (CF) pursuant to an agreement and plan of merger between CF and Terra, dated as of
March 12, 2010. As a result of the acquisition, the General Partner became a wholly-owned subsidiary of CF. CF's acquisition of Terra did not impact the recorded basis of any of the assets or
liabilities of the Partnership.

Dependence on CF

We are dependent on CF in a number of respects. CF provides all of our management, natural gas purchasing and hedging, selling and
administrative services and operates our facilities through the General Partner. CF and its wholly-owned subsidiaries, have more debt and debt
service requirements than we do. Although CF is affected by most of the factors that affect us, CF's higher level of debt could put them at greater risk than us in the event of adverse business
conditions. Our results of operations and financial condition might be materially adversely affected by financial difficulties at CF, default by it or its subsidiaries on their debt or their
bankruptcy. For additional information concerning CF, refer to CF's filings with the Securities and Exchange Commission on Form 10-K, Form 10-Q and current
reports on Form 8-K.

Introduction

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



Company Overview

Terra Nitrogen Company, L.P. (TNCLP, we, our, or us) is a Delaware limited partnership that produces and distributes nitrogen
fertilizer products primarily to the agriculture industry. We conduct our business through an operating partnership, Terra Nitrogen, Limited Partnership (TNLP or the

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TERRA NITROGEN COMPANY, L.P.

Operating
Partnership, and collectively with TNCLP, the Partnership). The General Partner is the general partner of both TNLCP and TNLP and owns a consolidated 0.05 percent general partner
interest in the Partnership. The General Partner is an indirect, wholly-owned subsidiary of CF. We are a
leading nitrogen producer in North America serving agricultural and industrial customers, by producing approximately 1.0 million tons of anhydrous ammonia (ammonia) annually, of which
approximately 0.7 million tons are upgraded into approximately 1.9 million tons of 32% urea ammonium nitrate solutions (UAN).

Our
principal products are ammonia and UAN, which we manufacture at our Verdigris, Oklahoma facility. Verdigris is the second largest UAN production facility in North America. Our
location is well suited to serve customers in the Cornbelt. Our plant has a natural gas basis advantage as compared to producers who obtain natural gas priced at Henry Hub. The plant is served by the
OneOK (Panhandle) gas pipeline.

Results of Operations

Consolidated Results

We reported net earnings for the three months ended September 30, 2010 of $35.2 million on revenues of
$136.0 million compared with net earnings for the three months ended September 30, 2009 of $17.3 million, on revenues of $101.5 million. Net earnings per Common Unit for
the three months ended September 30, 2010 was $1.40 compared with $0.64 for the three months ended September 30, 2009.

We
also reported net earnings for the nine months ended September 30, 2010 of $135.8 million, on revenues of $421.7 million, compared with net earnings for the nine
months ended September 30, 2009 of $121.4 million, on revenues of $409.6 million. Net earnings per Common Unit for the nine months ended September 30, 2010 was $5.40
compared with $4.18 for the nine months ended September 30, 2009.

The
following table shows the results of operations for the three and nine month periods ended September 30, 2010 and 2009:

Three months ended September 30,

Nine months ended September 30,(in millions, except per unit amounts)

2010

2009

Change

Percent

2010

2009

Change

PercentNet sales

$
136.0

$
101.5

$
34.5


34
%
$
421.7

$
409.6

$
12.1


3
%Cost of goods sold


96.8


79.7


17.1


21
%

273.5


274.7


(1.2
)

0
%Gross margin


39.2


21.8


17.4


80
%

148.2


134.9


13.3


10
%Gross margin percentage


28.8
%

21.5
%

7.3
%

34
%

35.1
%

32.9
%

2.2
%

7
%Selling, general and administrative expenses


3.8


4.5


(0.7
)

(16
)%

12.1


13.9


(1.8
)

(13
)%Operating earnings


35.4


17.3


18.1


105
%

136.1


121.0


15.1


12
%Interest income (expense), net


(0.2
)




(0.2
)

NM


(0.3
)

0.4


(0.7
)

(175
)%Net earnings

$
35.2

$
17.3

$
17.9


103
%
$
135.8

$
121.4

$
14.4


12
%Net earnings allocable to Common Units

$
25.9

$
11.9

$
14.0


118
%
$
99.9

$
77.4

$
22.5


29
%Net earnings per Common Unit

$
1.40

$
0.64

$
0.76


119
%
$
5.40

$
4.18

$
1.22


29
%


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TERRA NITROGEN COMPANY, L.P.

Sales Volumes and Prices

The following table shows our ammonia and UAN sales volumes and prices for the three and nine month periods ended September 30,
2010 and 2009:

Three months ended September 30,

Nine months ended September 30,2010

2009

2010

2009Volumes
(000 tons)

Unit Price
($/ton)(2)

Volumes
(000 tons)

Unit Price
($/ton)(2)

Volumes
(000 tons)

Unit Price
($/ton)(2)

Volumes
(000 tons)

Unit Price
($/ton)(2)Ammonia


87

$
366


58

$
249


240

$
342


246

$
394UAN(1)


485

$
181


517

$
136


1,499

$
193


1,295

$
208Cost of natural gas ($ per MMBtu)(3)




$
4.29




$
3.53




$
4.67




$
4.97


(1)The
nitrogen content of UAN is 32% by weight.(2)After
deducting outbound freight costs of $16.3 million and $16.5 million for the third quarters of 2010 and 2009, respectively, and
$48.8 million and $41.9 million for the first nine months of 2010 and 2009, respectively.(3)Includes
the cost of natural gas purchases and realized gains and losses on natural gas derivatives.


Third Quarter of 2010 Compared to the Third Quarter of 2009

Our net sales for the third quarter of 2010 were $136.0 million, an increase of $34.5 million, or 34%, from the third
quarter of 2009 net sales of $101.5 million. The increase was due to increases in average UAN and ammonia sales prices of 33% and 47%, respectively, and an increase in ammonia sales volume of
50%, partially offset by a decline in UAN sales volume of 6%.

Our
gross margin was $39.2 million in the third quarter of 2010 compared to $21.8 million in the third quarter of 2009. Gross margin as compared to prior year increased due
to the realization of higher fertilizer prices, partially offset by an increase in natural gas prices. The third quarter natural gas unit costs, net of derivative gains and losses, increased from
$3.53 per MMBtu in 2009 to $4.29 per MMBtu in 2010. The gross margin as a percent of sales increased to 28.8% from 21.5%.

We
enter into forward sales commitments by utilizing forward pricing and prepayment programs with customers. We use derivative instruments to hedge a portion of our natural gas
requirements. The use of these derivative instruments is designed to fix natural gas costs for production required for forward sales commitments. Effective in the second quarter, we discontinued the
use of hedge accounting for derivative instruments. This change has not affected our gas purchasing decisions, hedging approach or cash flows. For the three months ended September 30, 2010, we
recognized an unrealized mark-to-market loss of $7.2 million due to a decline in forward natural gas prices while our forward positions increased during the quarter.

Selling,
general and administrative costs were $3.8 million in the third quarter of 2010, a decline of $0.7 million from the third quarter of 2009. The decline is primarily
due to lower corporate expenses allocated from our General Partner.

Interest
expense increased in the third quarter of 2010 due to fees we incurred to extend the waiver on our revolving credit facility through September 28, 2010.

Our
net earnings were $35.2 million in the third quarter of 2010, an increase of $17.9 million, or 103%, as compared to $17.3 million in the third quarter of 2009.
Net earnings increased primarily due to higher gross margin and lower selling, general and administrative expenses in the quarter.

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TERRA NITROGEN COMPANY, L.P.

Nine Months Ended September 30, 2010 Compared to Nine Months Ended September 30, 2009

Our net sales for the nine months ended September 30, 2010 were $421.7 million, an increase of $12.1 million, or
3%, from the nine months ended September 30, 2009 net sales of $409.6 million. The increase was primarily due to a 16% increase in UAN sales volume, partially offset by 7% and 13%
declines, respectively, in UAN and ammonia average sales prices as compared to the first nine months of 2009.

Our
gross margin was $148.2 million for the nine months ended September 30, 2010 compared to $134.9 million for the nine months ended September 30, 2009.
Natural gas unit costs for the first nine months of 2010, net of derivative gains and losses, decreased 6% from $4.97 per MMBtu in 2009 to $4.67 per MMBtu in 2010. The decrease in natural gas prices,
plus the impact of higher volumes in UAN were partially offset by the impact of lower selling prices and unrealized mark to market losses of $6.7 million, which increased gross margin as
compared to the prior year. The gross margin as a percent of sales increased to 35.1% from 32.9%.

Selling,
general and administrative costs were $12.1 million for the nine months ended September 30, 2010, a decrease of $1.8 million as compared to the same period
in 2009. This is primarily due to lower corporate expenses and lower expenses allocated from the General Partner since we entered into an amended services agreement, effective July 1, 2010. See
Note 13 to the Notes to Unaudited Consolidated Financial Statements included herein.

Interest
income decreased for the nine months ended June 30, 2010 due a reduction of the average investment balance as compared to the nine months ended September 30, 2009.

Our
net earnings increased to $135.8 million for the nine months ended September 30, 2010, an increase of $14.4 million, or 12%, as compared to $121.4 million
for the nine months ended September 30, 2009. Net earnings increased primarily due to higher gross margin and lower selling, general and administrative expenses.

Liquidity and Capital Resources

Our principal uses of cash are for operating expenses, working capital, capital expenditures and quarterly distributions. Cash and cash
equivalents were $101.1 million at
September 30, 2010. During the first nine months of 2010, cash and cash equivalents increased by $76.3 million from December 31, 2009.

Our
cash receipts are generally collected by CF. Cash receipts, net of cash payments made by CF, are transferred to us weekly. Because of this cash collection and distribution
arrangement, CF is a creditor to us.

Cash Flows

The following table summarizes our cash flows from operating, investing and financing activities for the nine months ended
September 30, 2010 and 2009:

Total cash provided by (used in)(dollars in millions):

2010

2009Operating activities

$
192.8

$
160.2Investing activities


(21.4
)

(23.7
)Financing activities


(95.1
)

(220.5
)Increase (decrease) in cash and cash equivalents

$
76.3

$
(84.0
)


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Table of Contents

TERRA NITROGEN COMPANY, L.P.

Operating Activities

Net cash provided by operating activities for the first nine months of 2010 was $154.4 million and $38.4 million of
working capital changes. The $154.4 million includes $135.8 million of net earnings, adjusted for non-cash expenses of $11.9 million of depreciation of property, plant
and equipment and amortization of deferred plant turnaround costs and $6.7 million of mark to market losses on derivatives.

Investing Activities

Our investing activities used $21.4 million of cash in the first nine of 2010 for additions to property, plant and equipment,
and plant turnaround expenditures.

Financing Activities

During the first nine months of 2010, we paid distributions of $94.5 million to our unit holders. The distributions paid are
based on "Available Cash," as defined in our Agreement of Limited Partnership. See Note 4 to the Notes to Unaudited Consolidated Financial Statements included herein.

Revolving Credit Facility

Effective September 28, 2010, we terminated our $50 million revolving credit facility (the facility). Under the facility
interest was charged at a variable rate plus a fixed margin (London Interbank Offer Rate (LIBOR) plus 300 basis points). Under the facility, available borrowing was generally based on eligible cash
balances, 85% of eligible accounts receivable and 60% of eligible finished goods inventory, less outstanding letters of credit. Borrowings under the credit facility were secured by substantially all
of our working capital. The facility also required us to adhere to certain limitations on additional debt, capital expenditures, acquisitions, liens, asset sales, investments, prepayments of
subordinated indebtedness, changes in lines of business and transactions with affiliates. At September 28, 2010, there were no amounts outstanding under the facility. In the absence of this
facility, the General Partner believes that the Partnership has adequate available cash, short-term investments and cash from operations to fund its working capital needs.

General Partner

The General Partner is an indirect, wholly-owned subsidiary of CF. 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 Partners' independent directors.

Partnership Distributions

We make quarterly distributions to our partners 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, adjusted for changes in certain reserves established as the General Partner determines to be
necessary in its reasonable discretion. We paid distributions of $94.5 million and $220.5 million in the nine months ended September 30, 2010 and 2009, respectively.

We
receive 99% of the Available Cash from the Operating Partnership and 1% is distributed to its General Partner. Cash distributions from the Operating Partnership generally represent
our Available Cash from operations. Our cash distributions are made 99.975% to Common Unitholders and 0.025% to our 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

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TERRA NITROGEN COMPANY, L.P.

circumstances,
our General Partner is entitled, as an incentive, to larger percentage interests or Incentive Distribution Rights (IDRs). Pursuant to our Agreement of Limited Partnership, earnings
allocable to the limited partners and General Partner is based upon the distributions of Available Cash for the year.

On
November 4, 2010, we announced a $1.40 cash distribution per common limited partnership unit, payable on November 29, 2010 to holders of record as of November 15,
2010. In the third quarter we exceeded the cumulative MQD amounts and will distribute Available Cash as summarized in the following table:

Income and Distribution AllocationTarget
Limit

Target
Increment

Common
Units

Class B
Common
Units

General
Partner

TotalMinimum 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 September 30, 2010, the General Partner and its affiliates owned 75.3% of our outstanding units. When not more than 25% of
the issued and outstanding units are held by non-affiliates of the General Partner, as was the case at September 30, 2010, we, at the General Partner's sole discretion, may call, or
assign to the General Partner or its affiliates, our right to acquire 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 and (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.

Cash Transactions with Affiliates

Our cash receipts are generally received by CF on our behalf and our cash disbursements are generally made by CF on our behalf. Cash
receipts, net of cash payments made
by CF, are transferred to us on a weekly basis. As a result of this cash collection and distribution arrangement, CF is a creditor to us.

Derivatives

We account for derivatives under ASC 815Derivatives and Hedging.
Under this standard, derivatives are reported on the balance sheet at fair value. Prior to the second quarter of 2010, we generally classified our natural gas derivatives as cash flow hedges, whereby
the effective portion of the change in fair value was reported as a component of accumulated comprehensive income and was subsequently recognized in earnings in the period the offsetting hedged
transaction occurred. Beginning in the second quarter of 2010, we discontinued hedge accounting but continue to use derivatives as an

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TERRA NITROGEN COMPANY, L.P.

economic
hedge of gas price risk. Accordingly, changes in the fair value of the derivatives are recorded in earnings as the changes occur. This change has increased volatility in reported earnings.

Contractual Obligations

There were no material changes outside the ordinary course of business 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 period ended December 31, 2009.

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 products. Because
natural gas prices are volatile, we seek to protect against significant adverse natural gas price movements. We manage the risk of changes in
natural gas prices through the use of physical gas supply contracts and derivative financial instruments covering a period not exceeding three years.

The
derivative instruments that we have used are natural gas swaps and options. These contracts settle using NYMEX futures prices, which represents fair value at any given time. The
contracts are entered into with respect to gas to be consumed in the future and settlements are scheduled to coincide with anticipated natural gas purchases during those future periods.

As
of September 30, 2010 and December 31, 2009, we had open derivative contracts for 10.4 million MMBtus and 6.1 million MMBtus, respectively, of natural gas,
a substantial portion of which relate to sales that had been contracted to be sold at a fixed price in the future. An overall $1.00 per MMBtus change in the forward curve prices of natural gas would
change the pre-tax unrealized mark-to-market gain/loss on our September 30, 2010 derivative positions by $10.4 million.

ITEM 4.    CONTROLS AND PROCEDURES

Our Principal Executive Officer and Vice President and Corporate Controller (who is currently performing the functions of our principal
financial officer) have concluded, based on their evaluation as of the end of the period covered by this report, that our disclosure controls and procedures are effective to ensure that information
required to be disclosed in the reports that we file or submit under the Exchange Act are recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms.

Changes in Internal Control Over Financial Reporting

Except as noted below, there was no change in our internal control over financial reporting during the period covered by this report
that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

In
the second quarter of 2010, CF completed its merger of Terra and Terra Nitrogen GP Inc. with and into a wholly-owned subsidiary of CF Industries. We are currently
integrating policies, processes, technology and operations for the combined company and will continue to evaluate our internal control over financial reporting as we develop and execute our
integration plans. Until the companies are fully
integrated, we will maintain the operational integrity of each company's legacy internal controls over financial reporting.

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TERRA NITROGEN COMPANY, L.P.

FORWARD-LOOKING INFORMATION IS SUBJECT TO RISK AND UNCERTAINTY

Certain statements in this report may constitute "forward-looking" statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements are based upon assumptions as to future events that may not prove to be accurate. 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 we undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future events or otherwise, except as otherwise required by law.

Words
such as "expects," "intends," "plans," "projects," "believes," "estimates," and similar expressions are used to identify these forward-looking statements. Forward-looking
statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. These risks, uncertainties and assumptions include, among others,
statements relating to:



Additional
information as to these factors can be found in our 2009 Annual Report on Form 10-K and in our subsequent Quarterly Reports on Form 10-Q.

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TERRA NITROGEN COMPANY, L.P.

PART II. OTHER INFORMATION

ITEM 5.    OTHER INFORMATION.

Richard A. Hoker, Vice President and Corporate Controller of the General Partner, is signing the certifications attached to this
Quarterly Report on Form 10-Q and dated November 5, 2010, as the person performing the functions of the Company's principal financial officer. As previously announced, the
General Partner's chief financial officer and principal financial officer resigned effective as of September 20, 2010, and the General Partner has not yet appointed a successor.

ITEM 6.    EXHIBITS

(a)   Exhibits:

10.1

Amendment to the General and Administrative Services and Product Offtake Agreement between CF Industries, Inc., a Delaware corporation, Terra Industries Inc., a Maryland corporation, Terra
Nitrogen GP Inc., a Delaware corporation and Terra Nitrogen Company, L.P., a Delaware limited partnership, dated September 28, 2010. (incorporated by reference to Exhibit 10.1 to TNCLP's Form 8-K dated September 29,
2010 (Commission File No. 003-43007))31.1

Certification of the Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2

Certification of the Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1

Certification of the Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2

Certification of the Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002


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Table of Contents

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 PartnerDate: November 5, 2010

By:

/s/ STEPHEN R. WILSON Stephen R. Wilson President and Chief Executive
Officer, Chairman of the Board
(Principal Executive Officer)Date: November 5, 2010

By:

/s/ RICHARD A. HOKER Richard A. Hoker Vice President and Corporate Controller
(Principal Accounting Officer)


25

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