Preliminary Third Quarter Results

Management currently expects 2009 third quarter revenues to be approximately $347.0 million, approximately 23% lower than 2009 second quarter revenues of $453.5 million and approximately 56% lower than 2008 third quarter revenues of $790.2 million. This decline is primarily due to lower nitrogen products selling prices and sales volumes, due generally to depressed UAN selling prices and customers' reluctance to replenish inventories. Weaker agricultural and industrial demand related to the overall economic slowdown contributed to these results.

Management currently expects 2009 third quarter operating income to be approximately $54.2 million, approximately 59% lower than 2009 second quarter operating income of $131.9 million and approximately 74% lower than 2008 third quarter operating income of $209.5 million. The expected decrease in operating income is largely due to lower gross profits from the Company's major products -- ammonia, UAN and ammonium nitrate -- than those realized in both the second quarter of 2009 and the third quarter of 2008. This decrease in operating income was also attributable to a curtailment of ammonia production at the Donaldsonville, Louisiana facility for the entire month of July 2009 as well as a three week periodically scheduled major maintenance at the Verdigris, Oklahoma plant and a two week maintenance-related outage at the Donaldsonville, Louisiana facility in September 2009. Management currently expects equity earnings of GrowHow UK to approximate $4.9 million in the third quarter of 2009. Aggregate equity earnings from the North American and United Kingdom joint ventures should approximate $11.1 million and aggregate cash distributions received from these joint ventures should approximate $15.3 million in the third quarter of 2009.

Management currently expects that 2009 third quarter net income attributable to Terra Industries Inc. will be approximately $45.9 million, approximately 43% lower than 2009 second quarter net income attributable to Terra Industries Inc. of $80.5 million, as lower income tax expenses offset a significant amount of the decline in operating income. The 2009 third quarter effective tax rate reflects benefits related to the reorganization of Terra's subsidiary operations during the fourth quarter of 2008, and the expected utilization of state and federal tax credits.