Market Overview

Agrium's Solid First Quarter Results Driven by Strong Operating Performance

Share:

CALGARY, AB --(Marketwired - May 03, 2016) - Agrium Inc. (TSX: AGU) (NYSE: AGU) announced today its 2016 first quarter earnings results, with net earnings attributable to equity holders of Agrium of $2-million ($0.02 diluted earnings per share) compared to $12-million ($0.08 diluted earnings per share) in the first quarter of 2015. The reduction in net earnings was driven by weaker selling prices across all nutrients. This was largely offset by excellent results achieved from our Retail operations and strong Wholesale operational performance.

Highlights:



-- First quarter adjusted net earnings were $7-million or $0.05 per share
(see page 2 for adjusted net earnings reconciliation)(1).
-- Retail achieved the second highest EBITDA(2) for a first quarter, with
strong margins across all major product lines.
-- International Retail delivered strong results, with South America
achieving record first quarter EBITDA, and Australia reaching record
first quarter in local currency.
-- Wholesale continues to achieve impressive operational performance. This
quarter, nitrogen margins remained strong despite much lower benchmark
prices.
-- Agrium acquired 27 Retail locations through acquisitions in Canada and
the U.S., adding expected annual incremental EBITDA of over $11-million.
-- We achieved a 6 percent reduction in consolidated selling, general and
administrative costs compared to the same period last year,
demonstrating the ongoing results of our Operational Excellence
initiative.
-- 2016 annual guidance range has been revised to $5.25 to $6.25 diluted
earnings per share due to the weak outlook for nutrient prices (see page
4 for guidance assumptions and further details).
-- Agrium will be hosting an Investor Day on June 8, 2016 in Toronto. For
full details and to register for the event, please visit
www.agrium.com/investors.



"Agrium's first quarter results once again highlight the resilience of our business model," commented Chuck Magro, Agrium's President and CEO. "Our Retail business achieved impressive first quarter EBITDA, with strong margins across all major product lines. Our Wholesale business unit continued to demonstrate excellent operating performance and capitalized on our extensive competitive advantages," added Mr. Magro.

(1) First quarter effective tax rate of 29 percent used for adjusted net earnings and per share calculations. These are non-IFRS measures which represent net earnings adjusted for certain income (expenses) that are considered to be non-operational in nature. We believe these measures provide meaningful comparison to the earnings of other companies by eliminating share-based payments expense (recovery), gains (losses) on foreign exchange and related gains (losses) on non-qualifying derivative hedges and significant non-operating, non-recurring items. These should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with IFRS and may not be directly comparable to similar measures presented by other companies.
(2) Earnings (loss) from continuing operations before finance costs, income taxes, depreciation and amortization.




ADJUSTED NET EARNINGS
RECONCILIATION

----------------------------------------------------------------------------
Three months ended
March 31, 2016
----------------------------------------------------------------------------
Net earnings
(millions of U.S. dollars, except impact
per share amounts) Expense (post-tax) Per share (a)
----------------------------------------------------------------------------
3 0.02
----------------------------------------------------------------------------
Adjustments:
----------------------------------------------------------------------------
Share-based payments 4 3 0.02
----------------------------------------------------------------------------
Foreign exchange loss net of
non-qualifying derivatives 2 1 0.01
----------------------------------------------------------------------------
Adjusted net earnings (b) 7 0.05
----------------------------------------------------------------------------





(a) This represents diluted per share information attributable to equity
holders of Agrium.
(b) First quarter effective tax rate of 29 percent was used for the adjusted
net earnings and per share calculations.




MARKET OUTLOOK

Agricultural & Crop Input Markets



-- U.S. grower margins and grower sentiment have improved over the past
month. This was a result of U.S. new crop corn futures having increased
by approximately 5 percent from the lows at the beginning of April,
while new crop soybean prices have increased by 16 percent since early
March and are now at the highest level since December 2014. As a result,
growers' prospective 2016 cash margins are up from 2015 levels, the
first year-over-year improvement in two and four years respectively.
-- The United States Department of Agriculture's (USDA) Prospective
Plantings report estimated that U.S. growers intend to plant 93.6
million acres of corn, which would be an increase of 5.6 million acres
or about 6 percent from 2015 levels. Agrium believes corn acreage
expansion this year will be closer to 5 percent, as soybean prices have
strengthened in response to damaging rains during harvest in Argentina.
-- According to the most recent USDA forecasts, U.S. acreage of corn,
soybean and cotton could increase by over 6 million acres, supporting
crop input and services demand in 2016. However, in Canada it is
expected that pea and lentil acreage will expand by almost 2 million
acres, which could negatively impact Western Canadian demand for
nitrogen this year.
-- The spring season across North America began early, which tends to
support higher acreage levels, as well as the premium for North American
crop nutrient prices. This has been most evident on nitrogen products.
It also tends to bring forward timing of crop protection product
applications. In Western Canada, there are some regional concerns about
dryness as precipitation has been below normal the past two months.
-- The value of the U.S. dollar has weakened relative to most other global
currencies since the beginning of 2016, but non-U.S. currency values
still remain weak on a historic basis. A relatively weak currency
shields non-U.S. growers from the impact of low global crop prices and
has supported relatively high crop acreage outside of the U.S. This is
primarily why Brazil had such a strong acreage of second crop corn this
year which supported stronger than expected crop nutrient shipments in
Brazil to start 2016.



Nitrogen Outlook



-- North American nitrogen prices increased beginning in February 2016,
driven by a relatively early start to the spring application season,
combined with relatively low volumes of offshore imports.
-- In January to February 2016, U.S. offshore imports of urea were down
close to 40 percent compared to the same period of 2015.
-- Due to the poor 2015 fall application season in the U.S. and the high
corn acreage intentions for 2016 projected by the USDA, U.S. spring
nitrogen applications are expected to be historically high.
-- Nitrogen projects in North America are expected to continue to ramp up
in 2016, which is expected to keep buyers tentative entering the fill
season in the second half of the year.
-- Chinese urea exports were down by 1.5 million tonnes in first quarter of
2016 from Q1 2015 levels due to strong domestic demand in China and low
export urea prices to begin 2016. Chinese urea production levels in the
first quarter of 2016 were relatively flat to the same period of 2015,
but did decline about 10 percent from the high levels in the fourth
quarter of 2015.
-- Indian urea imports were lower in the first quarter of 2016 than they
were a year ago. However, India recently called a tender for imports for
its 2016/17 year. While imports are expected to decline from record 2015
levels, they are expected to be historically high, particularly if the
monsoon season is above-average, as projected by the India
Meteorological Department.



Potash Outlook



-- A number of factors combined to pressure the North American potash
market in the first quarter including: the poor fall application season,
which created a bottleneck in the supply chain with potash being stored
in warehouses rather applied in the fall;; and above-average offshore
imports of potash.
-- While first quarter 2016 North American offshore imports of potash were
down close to 50 percent from 2015 levels, they were still above any
other year since 2011. U.S. potash prices are below other global import
levels, which are expected to continue to pressure imports relative to
2015 levels.
-- Brazilian potash demand has been a positive surprise to start 2016, with
first quarter imports up over 20 percent from the first quarter of 2015.
The uncertainty over the Brazilian political and economic situation will
be a source of uncertainty for the remainder of 2016.
-- China has yet to sign 2016 potash supply agreements, which continues to
add uncertainty to the global potash market. Chinese import volumes will
be an important driver of the potash market in the second half of 2016.
-- The Indian government announced modest changes to the Nutrient Based
Subsidy (NBS) for potash in 2016/17, which improves the import economics
and should support improved import demand in the second half of 2016.



Phosphate Outlook



-- North American phosphate demand is projected to be relatively strong in
the spring of 2016 due to the poor fall application season and relative
stability in prices, which have increased from the January 2016 lows.
-- Chinese phosphate exports have declined compared to 2015 levels, in part
because of lower import demand from India.
-- Similar to potash, the changes in the NBS for phosphate in India appear
positive for second half diammonium phosphate demand, but most analysts
expect reduced demand in 2016 from 2015 levels.



2016 ANNUAL GUIDANCE

Based on our Market Outlook, Agrium expects to achieve annual diluted earnings per share of $5.25 to $6.25 in 2016 compared to our previous estimate of $5.50 to $7.00. We have lowered the guidance range due to a challenging pricing environment for all nutrients and expectations for a stronger Canadian dollar, partially offset by lower natural gas costs and continued strong performance by our Retail business. We are issuing earnings guidance of $4.00 to $4.30 diluted earnings per share for the first half of 2016.

We have reduced our estimate of potash production to 2.3 to 2.4 million tonnes.

Retail crop nutrient sales tonnes for 2016 are now expected to be from 9.8 million to 10.3 million tonnes. The slight widening of the range from our previous estimate is due to a forecasted increase in U.S. planted corn acres.

Our estimates for the Canada/U.S. foreign exchange rate and NYMEX for 2016 have been updated based on current market conditions.

This guidance and updated additional measures and related assumptions are summarized in the table below. Guidance excludes the impact of share-based payments expense (recovery), gains (losses) on foreign exchange and non-qualifying derivative hedges and significant non-operating, non-recurring items. Volumetric and earnings estimates assume normal seasonal growing and harvest patterns in the geographies where Agrium operates.

2016 ANNUAL GUIDANCE RANGE AND ASSUMPTIONS




----------------------------------------------------------------------------
Annual
Low High
----------------------------------------------------------------------------
Diluted EPS (in U.S. dollars) $5.25 $6.25
----------------------------------------------------------------------------
Guidance assumptions:
----------------------------------------------------------------------------
Wholesale:
----------------------------------------------------------------------------
Production tonnes:
----------------------------------------------------------------------------
Nitrogen (millions) 3.5 3.7
----------------------------------------------------------------------------
Potash (millions) 2.3 2.4
----------------------------------------------------------------------------
Retail:
----------------------------------------------------------------------------
EBITDA (millions of U.S. dollars) $1,075 $1,175
----------------------------------------------------------------------------
Crop nutrient sales tonnes (millions) 9.8 10.3
----------------------------------------------------------------------------
Other:
----------------------------------------------------------------------------
Operational tax rate 28% 27%
----------------------------------------------------------------------------
Sustaining capital expenditures (millions of U.S.
dollars) $500 $550
----------------------------------------------------------------------------
Total capital expenditures (millions of U.S. dollars) $800 $900
----------------------------------------------------------------------------
Canada/U.S. foreign exchange rate $1.31 $1.36
----------------------------------------------------------------------------
NYMEX gas price ($/MMBtu) $2.65 $2.05
----------------------------------------------------------------------------




MANAGEMENT'S DISCUSSION AND ANALYSIS

May 3, 2016

Unless otherwise noted, all financial information in this Management's Discussion and Analysis (MD&A) is prepared using accounting policies in accordance with International Financial Reporting Standards (IFRS) and is presented in accordance with International Accounting Standard 34 - Interim Financial Reporting. All comparisons of results for the first quarter of 2016 (three months ended March 31, 2016) are against results for the first quarter of 2015 (three months ended March 31, 2015). All dollar amounts refer to United States (U.S.) dollars except where otherwise stated.

The following interim MD&A is as of May 3, 2016 and should be read in conjunction with the Consolidated Interim Financial Statements for the three months ended March 31, 2016 (the "Consolidated Financial Statements"), and the annual MD&A and financial statements for the year ended December 31, 2015 included in our 2015 Annual Report to Shareholders. The Board of Directors carries out its responsibility for review of this disclosure principally through its Audit Committee, comprised exclusively of independent directors. The Audit Committee reviews, and prior to publication, approves this disclosure, pursuant to the authority delegated to it by the Board of Directors. No update is provided to the disclosure in our annual MD&A except for material information since the date in our annual MD&A. In respect of Forward-Looking Statements, please refer to the section titled "Forward-Looking Statements" in this MD&A.




2016 First Quarter Operating Results

CONSOLIDATED NET EARNINGS
Financial Overview

----------------------------------------------------------------------------
Three months ended March 31,
(millions of U.S. dollars, except per share
amounts and where noted) 2016 2015 Change % Change
----------------------------------------------------------------------------
Sales 2,725 2,872 (147) (5)
----------------------------------------------------------------------------
Gross profit 554 584 (30) (5)
----------------------------------------------------------------------------
Expenses 479 509 (30) (6)
----------------------------------------------------------------------------
Earnings before finance costs and income
taxes 75 75 - -
----------------------------------------------------------------------------
Net earnings 3 14 (11) (79)
----------------------------------------------------------------------------
Diluted earnings per share 0.02 0.08 (0.06) (75)
----------------------------------------------------------------------------
Effective tax rate (%) 29 26 N/A N/A
----------------------------------------------------------------------------






Sales and Gross Profit

----------------------------------------------------------------------------
Three months ended March 31,
(millions of U.S. dollars) 2016 2015 Change
----------------------------------------------------------------------------
Sales
----------------------------------------------------------------------------
Retail 2,290 2,263 27
----------------------------------------------------------------------------
Wholesale 649 867 (218)
----------------------------------------------------------------------------
Other (214) (258) 44
----------------------------------------------------------------------------
2,725 2,872 (147)
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Gross profit
----------------------------------------------------------------------------
Retail 402 371 31
----------------------------------------------------------------------------
Wholesale 153 234 (81)
----------------------------------------------------------------------------
Other (1) (21) 20
----------------------------------------------------------------------------
554 584 (30)
----------------------------------------------------------------------------






-- Retail's sales and gross profit increased for the first quarter of 2016
compared to the same period last year primarily due to higher crop
protection product and seed sales from early spring application season
and increased corn acreage. This was coupled with better margin rates on
our major product lines due to effective price management, change in
product mix and higher proprietary product sales.
-- Wholesale sales and gross profit decreased compared to the first quarter
last year primarily due to lower realized selling prices, which were
consistent with benchmark prices and the scale back of our Purchase for
Resale business. This was partially offset by the increase in potash
sales volumes due to higher utilization rates in the first quarter of
2016.



Expenses



-- General and administrative expenses decreased by $12-million (18
percent) for the first quarter compared to the same period last year as
a result of reduced payroll and office expenses related to our ongoing
Operational Excellence program.
-- Share-based payments expense was lower by $41-million compared to first
quarter of last year primarily due to a decrease in Agrium's share price
in the first quarter of 2016.






Other expenses breakdown
----------------------------------------------------------------------------
Three months ended
March 31,
(millions of U.S. dollars) 2016 2015
----------------------------------------------------------------------------
Loss (gain) on foreign exchange and related
derivatives 2 (1)
----------------------------------------------------------------------------
Interest income (13) (17)
----------------------------------------------------------------------------
Gain on sale of assets - (38)
----------------------------------------------------------------------------
Environmental remediation and asset retirement
obligations 2 9
----------------------------------------------------------------------------
Bad debt expense 8 7
----------------------------------------------------------------------------
Potash profit and capital tax 3 5
----------------------------------------------------------------------------
Other 9 2
----------------------------------------------------------------------------
11 (33)
----------------------------------------------------------------------------






-- We completed the sale of our non-core Purchase for Resale terminals
resulting in a gain on sale of assets of $38-million in the first
quarter of 2015.






Depreciation and Amortization







----------------------------------------------------------------------------
Three months ended March 31,
----------------------------------------------------------------------------
2016
----------------------------------------------------------------------------
Cost of General
product and
(millions of U.S. dollars) sold Selling administrative Total
----------------------------------------------------------------------------
Retail 2 63 2 67
----------------------------------------------------------------------------
Wholesale
----------------------------------------------------------------------------
Nitrogen 13 - - 13
----------------------------------------------------------------------------
Potash 20 - - 20
----------------------------------------------------------------------------
Phosphate 10 - - 10
----------------------------------------------------------------------------
Wholesale Other (a) 1 - - 1
----------------------------------------------------------------------------
44 - - 44
----------------------------------------------------------------------------
Other - - 3 3
----------------------------------------------------------------------------
Total 46 63 5 114
----------------------------------------------------------------------------



--------------------------------------------------------------------------
Three months ended March 31,
--------------------------------------------------------------------------
2015
--------------------------------------------------------------------------
Cost of General
product and
(millions of U.S. dollars) sold Selling administrative Total
--------------------------------------------------------------------------
Retail 1 54 2 57
--------------------------------------------------------------------------
Wholesale
--------------------------------------------------------------------------
Nitrogen 18 - - 18
--------------------------------------------------------------------------
Potash 14 - - 14
--------------------------------------------------------------------------
Phosphate 13 - - 13
--------------------------------------------------------------------------
Wholesale Other (a) 5 - - 5
--------------------------------------------------------------------------
50 - - 50
--------------------------------------------------------------------------
Other - - 4 4
--------------------------------------------------------------------------
Total 51 54 6 111
--------------------------------------------------------------------------





(a) This includes product purchased for resale, ammonium sulfate,
Environmentally Smart Nitrogen® (ESN) and other products.

Effective Tax Rate





-- The effective tax rate of 29 percent for the first quarter of 2016 was
higher compared to the effective tax rate of 26 percent for the same
period last year due to the increase in the Alberta provincial statutory
tax rate and the tax treatment of losses on derivative financial
instruments.



BUSINESS SEGMENT PERFORMANCE




Retail

----------------------------------------------------------------------------
Three months ended March 31,
(millions of U.S. dollars, except where
noted) 2016 2015 Change
----------------------------------------------------------------------------
Sales 2,290 2,263 27
----------------------------------------------------------------------------
Cost of product sold 1,888 1,892 (4)
----------------------------------------------------------------------------
Gross profit 402 371 31
----------------------------------------------------------------------------
EBITDA (a) 44 (8) 52
----------------------------------------------------------------------------
Selling expense as a percentage of sales (%) 18 19 (1)
----------------------------------------------------------------------------





(a) Earnings (loss) from continuing operations before finance costs, income
taxes, depreciation and amortization.






-- Retail reported record first quarter sales and the second highest first
quarter gross profit and EBITDA in history. The strong results were due
to strong margins across our major product offerings and lower operating
costs, an early start to the spring application season in the U.S. and
record results in our South American operations.
-- Total Retail selling expenses as a percentage of sales decreased by 1
percent compared to the same period in the prior year due to ongoing
network optimization and the impact of currency valuations in our
international businesses.
-- U.S. operations experienced strong demand this quarter for all major
crop inputs, supported by missed fall applications in 2015 due to poor
weather, the early spring season this year and grower intentions to
expand acreage of crop input intensive crops such as corn and cotton in
2016. Our Canadian business experienced a relatively slow first quarter
which is historically its quietest period during the year, while the
second quarter is traditionally the busiest.
-- Internationally, South American EBITDA increase of $7-million was a
significant improvement compared to the same period last year as a
result of favorable growing conditions and improved agricultural
policies in Argentina. Australia reported record Australia dollar EBITDA
due to strong demand for crop protection, seed and other services but
were slightly below last year on a U.S. dollar basis.






Retail sales and gross profit by product line
----------------------------------------------------------------------------






Three months ended March 31,
Gross
Sales Gross profit profit (%)
---------------------------------------------------
(millions of U.S.
dollars, except where
noted) 2016 2015 Change 2016 2015 Change 2016 2015
----------------------------------------------------------------------------
Crop nutrients 839 911 (72) 134 126 8 16 14
----------------------------------------------------------------------------
Crop protection products 831 793 38 121 108 13 15 14
----------------------------------------------------------------------------
Seed 376 308 68 51 40 11 14 13
----------------------------------------------------------------------------
Merchandise 117 142 (25) 19 20 (1) 16 14
----------------------------------------------------------------------------
Services and other 127 109 18 77 77 - 61 71
----------------------------------------------------------------------------




Crop nutrients



-- Total crop nutrient sales were 8 percent lower compared to the same
period last year due to lower global prices across all nutrients.
-- Total crop nutrient volumes were 4 percent higher this quarter across
our Retail operations compared to the same period last year. Volumes
were 15 percent higher in the U.S. due to an early spring application
season and 9 percent higher in South America due to favorable weather
conditions. In Canada and Australia, growers were conservative given the
uncertainty over nutrient and agricultural markets as well as dry
conditions in some areas.
-- Total crop nutrient gross profit increased 6 percent due to a
combination of higher-value product mix, including continued growth of
our higher-margin proprietary nutritional products, increased nutrient
volumes and higher margins per tonne for nutrients. Gross profit as a
percentage of sales rose from 14 percent in the first quarter of 2015 to
16 percent this quarter.



Crop protection products



-- Total crop protection sales were up 5 percent this quarter as North
American growers took advantage of the favorable weather to apply
herbicides to control weeds, which were prevalent due to the early
spring and wet weather last fall which limited post-harvest herbicide
applications. In Australia, sales were higher compared to the same
period last year due to early rains in the western growing regions and
increased sales of proprietary products, despite competitive pricing
pressure on glyphosate and herbicides.
-- Crop protection margins as a percentage of sales increased 1 percent,
primarily due to higher-margin product mix this quarter.
-- Proprietary crop protection product sales as a percentage of total crop
protection sales increased 3 percent compared to the same period in the
prior year.



Seed



-- Seed sales were up 22 percent this quarter compared to the same period
last year, primarily due to the expected increase in 2016 planted
acreage for corn and cotton in the U.S. and the early planting window.
-- Total seed margins as a percentage of sales increased 1 percent compared
to the same period in the prior year due to seed sales mix and strong
sales of higher-margin proprietary product seed. The proportion of
proprietary seed sales was 3 percent higher than in the first quarter of
2015 and margins for proprietary seed were also higher year-over-year.



Merchandise



-- Merchandise sales decreased 18 percent compared to the same period last
year primarily as a result of lower fuel pricing and demand in Canada,
and lower animal health sales in Australia.
-- Gross profit as a percentage of sales increased 2 percent this quarter,
primarily due to a reduction in the lower-margin Canadian fuel business
compared to the prior year.



Services and other



-- Sales for services and other was up 17 percent this quarter, due mainly
to the early spring application season in the U.S. and higher real
estate and livestock marketing revenue in Australia.






Wholesale

----------------------------------------------------------------------------
Three months ended March 31,
(millions of U.S. dollars, except where
noted) 2016 2015 Change
----------------------------------------------------------------------------
Sales 649 867 (218)
----------------------------------------------------------------------------
Sales volumes (tonnes 000's) 1,926 2,034 (108)
----------------------------------------------------------------------------
Cost of product sold 496 633 (137)
----------------------------------------------------------------------------
Gross profit 153 234 (81)
----------------------------------------------------------------------------
Expenses 34 40 (6)
----------------------------------------------------------------------------
Gain on sale of assets - 38 (38)
----------------------------------------------------------------------------






-- Total sales were lower than the same period last year, as realized sales
prices were pressured by lower nutrient prices globally. Total sales
volumes were lower than the same period last year due to a lower volume
of product purchased for resale tonnes as we continued to scale back
this business.






Wholesale NPK product information
----------------------------------------------------------------------------
Three months ended March 31,
Nitrogen Potash Phosphate
-----------------------------------------------------
2016 2015 Change 2016 2015 Change 2016 2015 Change
----------------------------------------------------------------------------
Gross profit (U.S.
dollar millions) 95 143 (48) 14 7 7 20 45 (25)
----------------------------------------------------------------------------
Sales volumes (tonnes
000's) 741 761 (20) 456 185 271 220 282 (62)
----------------------------------------------------------------------------
Selling price
($/tonne) 338 414 (76) 199 361 (162) 589 639 (50)
----------------------------------------------------------------------------
Cost of product sold
($/tonne) 209 226 (17) 168 324 (156) 499 481 18
----------------------------------------------------------------------------
Gross margin ($/tonne) 129 188 (59) 31 37 (6) 90 158 (68)
----------------------------------------------------------------------------




Nitrogen



-- Nitrogen gross profit was down 34 percent compared to the same period
last year predominately due to significantly lower global benchmark
nitrogen prices, which were partially offset by lower cost of
production.
-- Sales volumes were slightly lower than the same period last year, as
Western Canadian dealers were slow to commit to nitrogen purchases early
in the season. However demand in the U.S. was strong due to the early
start to the spring application season, which supported increased
ammonia sales volumes.
-- Realized selling prices per tonne were down 18 percent compared to the
same period last year due to weaker global market conditions impacting
benchmark nitrogen prices.
-- Cost of product sold per tonne was 8 percent lower than the same period
last year due to lower natural gas prices and lower fixed costs per
tonne during the quarter.






Natural gas prices: North American indices and North American Agrium prices
----------------------------------------------------------------------------
Three months ended
March 31,
(U.S. dollars per MMBtu) 2016 2015
----------------------------------------------------------------------------
Overall gas cost excluding realized derivative impact 1.61 2.52
----------------------------------------------------------------------------
Realized derivative impact 0.33 0.41
----------------------------------------------------------------------------
Overall gas cost 1.94 2.93
----------------------------------------------------------------------------
Average NYMEX 2.05 2.96
----------------------------------------------------------------------------
Average AECO 1.53 2.22
----------------------------------------------------------------------------




Potash



-- Potash gross profit doubled compared to the same period last year. The
reduction in realized selling price this quarter was offset by lower
cost of product sold per tonne and significantly higher sales volumes
given that the same period last year was impacted by the ramp-up of our
Vanscoy potash mine expansion.
-- Sales volumes increased by 271,000 tonnes compared to the same period
last year and by 28,000 tonnes compared to the first quarter of 2014.
2014 is a more comparable period given the Vanscoy ramp-up was underway
in the first quarter of 2015, which impacted available sales volumes.
-- Realized selling prices have contracted sharply over the past year, with
international sales prices down 22 percent and an even larger decline in
North American markets.
-- Cost of product sold per tonne was 48 percent lower than the same period
last year and 12 percent lower than the first quarter of 2014. The lower
costs are predominately due to the higher production volumes associated
with the completion of our Vanscoy mine expansion and the weaker
Canadian dollar.



Phosphate



-- Phosphate gross profit was 56 percent lower than the same period last
year, due to a combination of lower benchmark selling prices, lower
sales volumes and a slight increase in cost of product sold on a per-
tonne basis relative to the same period last year.
-- Sales volumes were 22 percent lower than the same period last year due
to slow spring demand in Canada and the Western U.S., as dealers in
these regions delayed purchasing due to higher supply in the market.




Wholesale Other
----------------------------------------------

Wholesale Other: gross profit breakdown
----------------------------------------------------------------------------
Three months ended March 31,
(millions of U.S. dollars) 2016 2015 Change
----------------------------------------------------------------------------
Ammonium sulfate 10 17 (7)
----------------------------------------------------------------------------
ESN 8 11 (3)
----------------------------------------------------------------------------
Product purchased for resale 5 7 (2)
----------------------------------------------------------------------------
Other 1 4 (3)
----------------------------------------------------------------------------
24 39 (15)
----------------------------------------------------------------------------






Wholesale Other: gross profit breakdown
----------------------------------------------------------------------------
Three months ended March 31,
(millions of U.S. dollars) 2016 2015 Change
----------------------------------------------------------------------------
Ammonium sulfate 10 17 (7)
----------------------------------------------------------------------------
ESN 8 11 (3)
----------------------------------------------------------------------------
Product purchased for resale 5 7 (2)
----------------------------------------------------------------------------
Other 1 4 (3)
----------------------------------------------------------------------------
24 39 (15)
----------------------------------------------------------------------------






-- Gross profit from Wholesale Other was down 38 percent over the same
quarter last year. This was predominately due to lower realized sales
prices for ammonium sulfate and ESN, in line with other nitrogen
products, and lower sales volumes partly related to the scale back in
our product purchased for resale operations.



Expenses



-- Wholesale expenses decreased by $6-million (15 percent) after adjusting
for a $38-million gain on the sale of non-core purchase for resale
terminals that was included in the results from the same period last
year.



Other

EBITDA for our Other non-operating business unit for the first quarter of 2016 had a net expense of $18-million, compared to a net expense of $88-million for the first quarter of 2015. The variance was primarily due to the following:



-- $41-million lower share-based payments expense due to a decrease in our
share price in the first quarter of 2016
-- $20-million lower gross profit elimination expense primarily due to
lower margin per tonne on inter-segment inventory held at the end of the
first quarter of 2016
-- $6-million (19 percent) lower general and administrative expenses due to
ongoing benefits from our Operational Excellence program and the lower
Canadian dollar



FINANCIAL CONDITION

The following are changes to working capital on our Consolidated Balance Sheets for the three months ended March 31, 2016 compared to December 31, 2015.



----------------------------------------------------------------------------

(millions of U.S. March
dollars, except where 31, December $ % Explanation of the
noted) 2016 31, 2015 Change Change change in balance
----------------------------------------------------------------------------
Current assets
Cash and cash 276 515 (239) (46%) See discussion under
equivalents the section
"Liquidity and
Capital Resources".

----------------------------------------------------------------------------
Accounts receivable 2,200 2,053 147 7% Increased Retail
trade receivables
consistent with the
start of the spring
season.
----------------------------------------------------------------------------
Income taxes 61 4 57 1,425% First quarter tax
receivable installments paid
exceeded the first
quarter tax
provision.
----------------------------------------------------------------------------
Inventories 4,524 3,314 1,210 37% Seasonal Retail
inventory build-up
in preparation for
the spring season.

----------------------------------------------------------------------------
Prepaid expenses and 254 688 (434) (63%) Drawdown of prepaid
deposits inventory as Retail
took delivery of
product in
anticipation of the
spring season.
----------------------------------------------------------------------------
Other current assets 152 144 8 6% -
----------------------------------------------------------------------------
Current liabilities
Short-term debt 629 835 (206) (25%) Decrease primarily
due to seasonally
lower working
capital
requirements,
partially offset by
increased financing
for capital
investments.
----------------------------------------------------------------------------
Accounts payable 5,309 3,919 1,390 35% Retail inventory
purchases and
customer prepayments
made in anticipation
of the spring
season.
----------------------------------------------------------------------------
Income taxes payable 1 82 (81) (99%) 2015 tax accrual was
paid.
----------------------------------------------------------------------------
Current portion of 108 8 100 1,250% Increase relates to
long-term debt $100-million 7.7
percent debentures
coming due in 2017.
----------------------------------------------------------------------------
Current portion of 81 85 (4) (5%) -
other provisions
----------------------------------------------------------------------------
Working capital 1,339 1,789 (450) (25%)
----------------------------------------------------------------------------




LIQUIDITY AND CAPITAL RESOURCES

Agrium generally expects that it will be able to meet its working capital requirements, capital resource needs and shareholder returns through a variety of sources, including available cash on hand, cash provided by operations, short-term borrowings from the issuance of commercial paper, and borrowings from our credit facilities, as well as long-term debt and equity capacity from the capital markets.

As of March 31, 2016, we have sufficient current assets to meet our current liabilities.

Summary of Consolidated Statements of Cash Flows

Below is a summary of our cash provided by or used in operating, investing, and financing activities as reflected in the Consolidated Statements of Cash Flows:




----------------------------------------------------------------------------
Three months ended March 31,
(millions of U.S. dollars) 2016 2015 Change
----------------------------------------------------------------------------
Cash provided by operating activities 343 705 (362)
----------------------------------------------------------------------------
Cash used in investing activities (277) (461) 184
----------------------------------------------------------------------------
Cash used in financing activities (325) (295) (30)
----------------------------------------------------------------------------
Effect of exchange rate changes on cash and
cash equivalents 20 (17) 37
----------------------------------------------------------------------------
Decrease in cash and cash equivalents (239) (68) (171)
----------------------------------------------------------------------------







----------------------------------------------------------------------------
Cash provided by operating activities - drivers behind the $362-million
decrease
----------------------------------------------------------------------------
Use of cash -- $159-million decrease in cash related to taxes is due to
the 2015 final tax payments being higher than the 2014 final
tax payments.

-- $47-million decrease in cash due to higher interest
payments made in the first quarter of 2016 resulting from the
timing of interest paid on debt issued during 2014 and 2015.
----------------------------------------------------------------------------
Cash used in investing activities - drivers behind the $184-million decrease
in use
----------------------------------------------------------------------------
Use of cash -- Lower capital expenditures than the first quarter of 2015
due to the ramp-up of our Vanscoy potash facility coupled with
decreased spending for the Borger project.
----------------------------------------------------------------------------
Cash used in financing activities - drivers behind the $30-million increase
in use
----------------------------------------------------------------------------
Use of cash -- In 2015, we generated $1-billion of cash through long-term
debt issuance and paid back $1.2-billion in short-term debt.
In 2016, we paid $240-million in short-term debt. There was no
debt issuance in 2016.
----------------------------------------------------------------------------







Capital Spending and Expenditures (a)
----------------------------------------------------------------------------
Three months ended
March 31,
----------------------------------------------------------------------------
(millions of U.S. dollars) 2016 2015
----------------------------------------------------------------------------
Retail
----------------------------------------------------------------------------
Sustaining 47 54
----------------------------------------------------------------------------
Investing 9 9
----------------------------------------------------------------------------
56 63
----------------------------------------------------------------------------
Acquisitions(b) 94 60
----------------------------------------------------------------------------
150 123
----------------------------------------------------------------------------
Wholesale
----------------------------------------------------------------------------
Sustaining 49 40
----------------------------------------------------------------------------
Investing 68 295
----------------------------------------------------------------------------
117 335
----------------------------------------------------------------------------
Other
----------------------------------------------------------------------------
Sustaining 1 1
----------------------------------------------------------------------------
Total
----------------------------------------------------------------------------
Sustaining 97 95
----------------------------------------------------------------------------
Investing 77 304
----------------------------------------------------------------------------
174 399
----------------------------------------------------------------------------
Acquisitions(b) 94 60
----------------------------------------------------------------------------
268 459
----------------------------------------------------------------------------





(a) This excludes capitalized borrowing costs.
(b) This represents business acquisitions and includes acquired working
capital; property, plant and equipment; intangibles; goodwill; and
investments in associates and joint ventures.






-- Our investing capital expenditures decreased in the first quarter of
2016 compared to the same period last year due to the ramp-up of our
Vanscoy potash facility in the first quarter of 2015 combined with
decreased spending for the Borger project.
-- We expect Agrium's capital expenditures for the remaining three quarters
of 2016 to approximate $600-million to $700-million. We anticipate that
we will be able to finance the announced projects through a combination
of cash provided from operating activities and existing credit
facilities.



Short-term Debt



-- Our short-term debt of $629-million at March 31, 2016 is outlined in
note 6 of our Summarized Notes to the Consolidated Financial Statements.
-- Our short-term debt decreased by $206-million during the three months
ended March 31, 2016, which in turn contributed to an increase in our
unutilized short-term financing capacity to $2.2-billion at March 31,
2016.



Capital Management



-- Our revolving credit facilities require that we maintain specific
interest coverage and debt-to-capital ratios, as well as other non-
financial covenants as defined in our credit agreements. We were in
compliance with all covenants at March 31, 2016. Our ability to comply
with these covenants has not changed since December 31, 2015.



SHARE REPURCHASES

We are allowed to purchase for cancellation, on the Toronto Stock Exchange (TSX) or New York Stock Exchange an aggregate of 6,908,450 common shares (5 percent) of our outstanding shares. Repurchases may be made under a Normal Course Issuer Bid (NCIB) approved by the TSX until February 18, 2017. The actual number of shares purchased will be at Agrium's discretion and will depend on market conditions, share prices, Agrium's cash position and other factors.

There were no shares repurchased for the three months ended March 31, 2016 or the period from April 1, 2016 to May 3, 2016.

Shareholders can obtain a copy of the NCIB notice submitted to the TSX from Agrium without charge upon request.

OUTSTANDING SHARE DATA

Agrium had 138,175,400 outstanding shares at April 29, 2016.




SELECTED QUARTERLY INFORMATION

----------------------------------------------------------------------------
(millions of U.S.
dollars, 2016 2015 2015 2015 2015 2014 2014 2014
except per share amounts) Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2
----------------------------------------------------------------------------
Sales 2,725 2,407 2,524 6,992 2,872 2,705 2,920 7,338
----------------------------------------------------------------------------
Gross profit 554 900 696 1,708 584 732 665 1,599
----------------------------------------------------------------------------
Net earnings from
continuing operations 3 200 99 675 14 70 91 625
----------------------------------------------------------------------------
Net loss from
discontinued operations - - - - - (19) (41) (9)
----------------------------------------------------------------------------
Net earnings 3 200 99 675 14 51 50 616
----------------------------------------------------------------------------
Earnings per share from
continuing operations
attributable to equity
holders of Agrium:
----------------------------------------------------------------------------
Basic and diluted 0.02 1.45 0.72 4.71 0.08 0.46 0.63 4.34
----------------------------------------------------------------------------
Loss per share from
discontinued operations
attributable to equity
holders of Agrium:
----------------------------------------------------------------------------
Basic and diluted - - - - - (0.13) (0.28) (0.06)
----------------------------------------------------------------------------
Earnings per share
attributable to equity
holders of Agrium:
----------------------------------------------------------------------------
Basic and diluted 0.02 1.45 0.72 4.71 0.08 0.33 0.35 4.28
----------------------------------------------------------------------------




The agricultural products business is seasonal. Consequently, year-over-year comparisons are more appropriate than quarter-over-quarter comparisons. Crop input sales are primarily concentrated in the spring and fall crop input application seasons. Crop nutrient inventories are normally accumulated leading up to each application season. Our cash collections from accounts receivables generally occur after the application season is complete, and our customer prepayments are concentrated in December and January.

NON-IFRS FINANCIAL MEASURES

Financial measures that are not specified, defined or determined under IFRS are non-IFRS measures unless they are presented in our Consolidated Financial Statements. Accordingly, we have not identified any non-IFRS financial measures. We presented EBITDA in our 2015 annual consolidated financial statements and accordingly, it is not a non-IFRS measure. Effective January 1, 2016, management no longer considers "Adjusted EBITDA" in evaluating our business performance and expects to focus more on our other key earnings measures.

CRITICAL ACCOUNTING ESTIMATES

We prepare our financial statements in accordance with IFRS, which requires us to make judgments, assumptions and estimates in applying accounting policies. For further information on the Company's critical accounting estimates, refer to the section "Critical Accounting Estimates" in our 2015 annual MD&A, which is contained in our 2015 Annual Report. Since the date of our 2015 annual MD&A, there have not been any material changes to our critical accounting estimates.

CHANGES IN ACCOUNTING POLICIES

The accounting policies applied in our Consolidated Financial Statements for the three months ended March 31, 2016 are the same as those applied in our audited annual financial statements in our 2015 Annual Report.

BUSINESS RISKS

The information presented in the "Enterprise Risk Management" section on pages 63 - 66 in our 2015 annual MD&A and under the heading "Risk Factors" on pages 23 - 34 in our Annual Information Form for the year ended December 31, 2015 has not changed materially since December 31, 2015.

CONTROLS AND PROCEDURES

There have been no changes in our internal control over financial reporting during the three months ended March 31, 2016 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PUBLIC SECURITIES FILINGS

Additional information about our Company, including our 2015 Annual Information Form is filed with the Canadian securities regulatory authorities through SEDAR at www.sedar.com and with the U.S. securities regulatory authorities through EDGAR at www.sec.gov.

FORWARD-LOOKING STATEMENTS

Certain statements and other information included in this document constitute "forward-looking information" and/or "financial outlook" within the meaning of applicable Canadian securities legislation or constitute "forward-looking statements" within the meaning of applicable U.S. securities legislation (collectively, the "forward-looking statements"). All statements in this news release other than those relating to historical information or current conditions are forward-looking statements, including, but not limited to, statements as to management's expectations with respect to: updated 2016 annual guidance, including expectations regarding our diluted earnings per share; capital spending expectations for the remaining three quarters of 2016; expectations regarding performance of our business segments in 2016; and our market outlook for the 2016, including nitrogen, potash and phosphate outlook and including anticipated supply and demand for our products and services, expected market and industry conditions with respect to crop nutrient application rates, planted acres, crop mix, prices and the impact of currency fluctuations and import and export volumes. These forward-looking statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from such forward-looking statements. As such, undue reliance should not be placed on these forward-looking statements. The purpose of the outlook provided herein is to assist readers in understanding our expected and targeted financial and operating results, and this information may not be appropriate for other purposes.

All of the forward-looking statements are qualified by the assumptions that are stated or inherent in such forward-looking statements, including the assumptions referred to below and elsewhere in this document. Although Agrium believes that these assumptions are reasonable, this list is not exhaustive of the factors that may affect any of the forward-looking statements and the reader should not place an undue reliance on these assumptions and such forward-looking statements. The additional key assumptions that have been made include, among other things, assumptions with respect to Agrium's ability to successfully integrate and realize the anticipated benefits of its already completed and future acquisitions and that we will be able to implement our standards, controls, procedures and policies at any acquired businesses to realize the expected synergies; that future business, regulatory and industry conditions will be within the parameters expected by Agrium, including with respect to prices, margins, product availability and supplier agreements; the completion of our expansion projects on schedule, as planned and on budget; assumptions with respect to global economic conditions and the accuracy of our market outlook expectations for 2016 and in the future; the adequacy of our cash generated from operations and our ability to access our credit facilities or capital markets for additional sources of financing; our ability to identify suitable candidates for acquisitions and negotiate acceptable terms; our ability to maintain our investment grade rating and achieve our performance targets; and our receipt, on time, of all necessary permits, utilities and project approvals with respect to our expansion projects and that we will have the resources necessary to meet the projects' approach. Also refer to the discussion under the heading "Key Assumptions and Risks in Respect of Forward-Looking Statements" in our 2015 annual MD&A and under the heading "Market Outlook" in this document, with respect to further material assumptions associated with our forward-looking statements.

Events or circumstances that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to: general global economic, market and business conditions; weather conditions, including impacts from regional flooding and/or drought conditions; crop planted acreage, yield and prices; the supply and demand and price levels for our major products may vary from what we currently anticipate; governmental and regulatory requirements and actions by governmental authorities, including changes in government policy, government ownership requirements, changes in environmental, tax and other laws or regulations and the interpretation thereof, and political risks, including civil unrest, actions by armed groups or conflict, regional natural gas supply restrictions, as well as counterparty and sovereign risk; delays in completion of turnarounds at our major facilities; gas supply interruptions at the Egyptian Misr Fertilizers Production Company S.A.E. nitrogen facility expansion in Egypt; the risk of additional capital expenditure cost escalation or delays in respect of our Borger nitrogen expansion project and the ramp-up of production following the tie-in of our Vanscoy potash expansion project; and other risk factors detailed from time to time in Agrium reports filed with the Canadian securities regulators and the Securities and Exchange Commission in the U.S. including those disclosed under the heading "Risk Factors" in our Annual Information Form for the year ended December 31, 2015 and under the headings "Enterprise Risk Management" and "Key Assumptions and Risks in respect of Forward-Looking Statements" in our 2015 annual MD&A.

The purpose of our expected diluted earnings per share guidance range is to assist readers in understanding our expected and targeted financial results, and this information may not be appropriate for other purposes.

Agrium disclaims any intention or obligation to update or revise any forward-looking statements in this document as a result of new information or future events, except as may be required under applicable U.S. federal securities laws or applicable Canadian securities legislation.

OTHER

Agrium Inc. is a major producer and distributor of agricultural products and services in North America, South America, Australia and Egypt through its agricultural retail-distribution and wholesale nutrient businesses. Agrium supplies growers with key products and services such as crop nutrients, crop protection, seed, and agronomic and application services, thereby helping to meet the ever growing global demand for food and fiber. Agrium produces nitrogen, potash and phosphate fertilizers, with a combined wholesale nutrient capacity of over ten million tonnes and with competitive advantages across all product lines. Agrium retail-distribution has an unmatched network of over 1,400 facilities and more than 3,800 crop consultants. We partner with over half a million grower customers globally to help them increase their yields and returns on more than 50 different crops. With a focus on sustainability, the company strives to improve the communities in which it operates through safety, education, environmental improvement and new technologies such as the development of precision agriculture and controlled release nutrient products. Agrium is focused on driving operational excellence across our businesses, pursuing value-enhancing growth opportunities and returning capital to shareholders. For more information visit: www.agrium.com.

A WEBSITE SIMULCAST of the 2016 1st Quarter Conference Call will be available in a listen-only mode beginning Wednesday, May 4th, 2016 at 8:00 a.m. MT (10:00 a.m. ET). Please visit the following website: www.agrium.com.




AGRIUM INC.
Consolidated Statements of Operations
(Unaudited)


Three months ended
March 31,
----------------------------------------------------------------------------
(millions of U.S. dollars, unless otherwise
stated) Notes 2016 2015
----------------------------------------------------------------------------

Sales 2,725 2,872
----------------------------------------------------------------------------
Cost of product sold 2,171 2,288
----------------------------------------------------------------------------
Gross profit 554 584
----------------------------------------------------------------------------
Expenses
----------------------------------------------------------------------------
Selling 414 430
----------------------------------------------------------------------------
General and administrative 55 67
----------------------------------------------------------------------------
Share-based payments 5 4 45
----------------------------------------------------------------------------
Earnings from associates and joint ventures (5) -
----------------------------------------------------------------------------
Other expenses (income) 4 11 (33)
----------------------------------------------------------------------------
Earnings before finance costs and income taxes 75 75
----------------------------------------------------------------------------
Finance costs related to long-term debt 52 37
----------------------------------------------------------------------------
Other finance costs 18 19
----------------------------------------------------------------------------
Earnings before income taxes 5 19
----------------------------------------------------------------------------
Income taxes 2 5
----------------------------------------------------------------------------
Net earnings 3 14
----------------------------------------------------------------------------
Attributable to
----------------------------------------------------------------------------
Equity holders of Agrium 2 12
----------------------------------------------------------------------------
Non-controlling interest 1 2
----------------------------------------------------------------------------
Net earnings 3 14
----------------------------------------------------------------------------

Earnings per share attributable to equity holders
of Agrium
----------------------------------------------------------------------------
Basic and diluted earnings per share 0.02 0.08
----------------------------------------------------------------------------
Weighted average number of shares outstanding
for basic and diluted earnings per share
(millions of common shares) 138 144
----------------------------------------------------------------------------
See accompanying notes.




Basis of preparation and statement of compliance

These consolidated interim financial statements ("interim financial statements") were approved for issuance by the Audit Committee on May 3, 2016. We prepared these interim financial statements in accordance with International Accounting Standard 34 Interim Financial Reporting. These interim financial statements do not include all information and disclosures normally provided in annual financial statements and should be read in conjunction with our audited annual financial statements and related notes contained in our 2015 Annual Report, available at www.agrium.com.

The accounting policies applied in these interim financial statements are the same as those applied in our audited annual financial statements in our 2015 Annual Report.




AGRIUM INC.
Consolidated Statements of Comprehensive Income
(Unaudited)


Three months ended
March 31,
----------------------------------------------------------------------------
(millions of U.S. dollars) Notes 2016 2015
----------------------------------------------------------------------------

Net earnings 3 14
----------------------------------------------------------------------------
Other comprehensive income (loss)
----------------------------------------------------------------------------
Items that are or may be reclassified to
earnings
----------------------------------------------------------------------------
Cash flow hedges 3
----------------------------------------------------------------------------
Effective portion of changes in fair
value (23) (16)
----------------------------------------------------------------------------
Deferred income taxes 7 4
----------------------------------------------------------------------------
Share of comprehensive income (loss) of
associates and joint ventures 2 (5)
----------------------------------------------------------------------------
Foreign currency translation
----------------------------------------------------------------------------
Gains (losses) 179 (295)
----------------------------------------------------------------------------
Other comprehensive income (loss) 165 (312)
----------------------------------------------------------------------------
Comprehensive income (loss) 168 (298)
----------------------------------------------------------------------------
Attributable to
----------------------------------------------------------------------------
Equity holders of Agrium 167 (299)
----------------------------------------------------------------------------
Non-controlling interest 1 1
----------------------------------------------------------------------------
Comprehensive income (loss) 168 (298)
----------------------------------------------------------------------------
See accompanying notes.







AGRIUM INC.
Consolidated Balance Sheets
(Unaudited)


March 31, December 31,
-------------------------------------------------------------- -------------
(millions of U.S. dollars) Notes 2016 2015 2015
-------------------------------------------------------------- -------------
Assets
-------------------------------------------------------------- -------------
Current assets
-------------------------------------------------------------- -------------
Cash and cash equivalents 276 780 515
-------------------------------------------------------------- -------------
Accounts receivable 2,200 2,045 2,053
-------------------------------------------------------------- -------------
Income taxes receivable 61 112 4
-------------------------------------------------------------- -------------
Inventories 4,524 4,820 3,314
-------------------------------------------------------------- -------------
Prepaid expenses and deposits 254 315 688
-------------------------------------------------------------- -------------
Other current assets 152 123 144
-------------------------------------------------------------- -------------
7,467 8,195 6,718
-------------------------------------------------------------- -------------
Property, plant and equipment 6,712 6,177 6,333
-------------------------------------------------------------- -------------
Intangibles 645 660 632
-------------------------------------------------------------- -------------
Goodwill 1,988 2,027 1,980
-------------------------------------------------------------- -------------
Investments in associates and joint
ventures 637 595 607
-------------------------------------------------------------- -------------
Other assets 54 69 54
-------------------------------------------------------------- -------------
Deferred income tax assets 52 72 53
-------------------------------------------------------------- -------------
17,555 17,795 16,377
-------------------------------------------------------------- -------------
Liabilities and shareholders' equity
-------------------------------------------------------------- -------------
Current liabilities
-------------------------------------------------------------- -------------
Short-term debt 6 629 265 835
-------------------------------------------------------------- -------------
Accounts payable 5,309 5,672 3,919
-------------------------------------------------------------- -------------
Income taxes payable 1 4 82
-------------------------------------------------------------- -------------
Current portion of long-term debt 108 1 8
-------------------------------------------------------------- -------------
Current portion of other provisions 81 88 85
-------------------------------------------------------------- -------------
6,128 6,030 4,929
-------------------------------------------------------------- -------------
Long-term debt 4,415 4,534 4,513
-------------------------------------------------------------- -------------
Post-employment benefits 132 144 124
-------------------------------------------------------------- -------------
Other provisions 337 332 336
-------------------------------------------------------------- -------------
Other liabilities 76 75 85
-------------------------------------------------------------- -------------
Deferred income tax liabilities 402 393 383
-------------------------------------------------------------- -------------
11,490 11,508 10,370
-------------------------------------------------------------- -------------
Shareholders' equity
-------------------------------------------------------------- -------------
Share capital 1,759 1,823 1,757
-------------------------------------------------------------- -------------
Retained earnings 5,414 5,402 5,533
-------------------------------------------------------------- -------------
Accumulated other comprehensive loss (1,113) (946) (1,287)
-------------------------------------------------------------- -------------
Equity holders of Agrium 6,060 6,279 6,003
-------------------------------------------------------------- -------------
Non-controlling interest 5 8 4
-------------------------------------------------------------- -------------
Total equity 6,065 6,287 6,007
-------------------------------------------------------------- -------------
17,555 17,795 16,377
-------------------------------------------------------------- -------------
See accompanying notes.








AGRIUM INC.
Consolidated Statements of Cash Flows
(Unaudited)


Three months ended
March 31,
----------------------------------------------------------------------------
(millions of U.S. dollars) 2016 2015
----------------------------------------------------------------------------

Operating
----------------------------------------------------------------------------
Net earnings 3 14
----------------------------------------------------------------------------
Adjustments for
----------------------------------------------------------------------------
Depreciation and amortization 114 111
----------------------------------------------------------------------------
Earnings from associates and joint ventures (5) -
----------------------------------------------------------------------------
Share-based payments 4 45
----------------------------------------------------------------------------
Unrealized loss on derivative financial
instruments 83 26
----------------------------------------------------------------------------
Unrealized foreign exchange (gain) loss (124) 41
----------------------------------------------------------------------------
Interest income (13) (17)
----------------------------------------------------------------------------
Finance costs 70 56
----------------------------------------------------------------------------
Income taxes 2 5
----------------------------------------------------------------------------
Other 6 (25)
----------------------------------------------------------------------------
Interest received 14 17
----------------------------------------------------------------------------
Interest paid (89) (42)
----------------------------------------------------------------------------
Income taxes (paid) received (141) 18
----------------------------------------------------------------------------
Dividends from associates and joint ventures 1 1
----------------------------------------------------------------------------
Net changes in non-cash working capital 418 455
----------------------------------------------------------------------------
Cash provided by operating activities 343 705
----------------------------------------------------------------------------
Investing
----------------------------------------------------------------------------
Business acquisitions, net of cash acquired (94) (60)
----------------------------------------------------------------------------
Capital expenditures (174) (399)
----------------------------------------------------------------------------
Capitalized borrowing costs (5) (15)
----------------------------------------------------------------------------
Purchase of investments (23) (42)
----------------------------------------------------------------------------
Proceeds from sale of investments 18 18
----------------------------------------------------------------------------
Proceeds from sale of property, plant and equipment 4 50
----------------------------------------------------------------------------
Other (3) 5
----------------------------------------------------------------------------
Net changes in non-cash working capital - (18)
----------------------------------------------------------------------------
Cash used in investing activities (277) (461)
----------------------------------------------------------------------------
Financing
----------------------------------------------------------------------------
Short-term debt (204) (1,160)
----------------------------------------------------------------------------
Long-term debt issued - 1,000
----------------------------------------------------------------------------
Transaction costs on long-term debt - (14)
----------------------------------------------------------------------------
Repayment of long-term debt (2) (13)
----------------------------------------------------------------------------
Dividends paid (119) (109)
----------------------------------------------------------------------------
Shares issued - 1
----------------------------------------------------------------------------
Cash used in financing activities (325) (295)
----------------------------------------------------------------------------
Effect of exchange rate changes on cash and cash
equivalents 20 (17)
----------------------------------------------------------------------------
Decrease in cash and cash equivalents (239) (68)
----------------------------------------------------------------------------
Cash and cash equivalents - beginning of period 515 848
----------------------------------------------------------------------------
Cash and cash equivalents - end of period 276 780
----------------------------------------------------------------------------
See accompanying notes.








AGRIUM INC.
Consolidated Statements of Shareholders' Equity
(Unaudited)






Other comprehensive
income (loss)
--------------------
Comprehensive
loss of
Millions associates
of Cash and
(millions of U.S. dollars, common Share Retained flow joint
except per share data) shares capital earnings hedges ventures
--------------------------------------------------------------------------
December 31, 2014 144 1,821 5,502 (27) (11)
--------------------------------------------------------------------------
Net earnings - - 12 - -
--------------------------------------------------------------------------
Other comprehensive
income (loss), net of
tax
--------------------------------------------------------------------------
Other - - - (12) (5)
--------------------------------------------------------------------------
Comprehensive income
(loss), net of tax - - 12 (12) (5)
--------------------------------------------------------------------------
Dividends ($0.78 per
share) - - (112) - -
--------------------------------------------------------------------------
Share-based payment
transactions - 2 - - -
--------------------------------------------------------------------------
Reclassification of cash
flow hedges, net of tax - - - 8 -
--------------------------------------------------------------------------
March 31, 2015 144 1,823 5,402 (31) (16)
--------------------------------------------------------------------------

--------------------------------------------------------------------------
December 31, 2015 138 1,757 5,533 (56) (17)
--------------------------------------------------------------------------
Net earnings - - 2 - -
--------------------------------------------------------------------------
Other comprehensive
income (loss), net of
tax
--------------------------------------------------------------------------
Other - - - (16) 2
--------------------------------------------------------------------------
Comprehensive income
(loss), net of tax - - 2 (16) 2
--------------------------------------------------------------------------
Dividends ($0.875 per
share) - - (121) - -
--------------------------------------------------------------------------
Share-based payment
transactions - 2 - - -
--------------------------------------------------------------------------
Reclassification of cash
flow hedges, net of tax - - - 9 -
--------------------------------------------------------------------------
March 31, 2016 138 1,759 5,414 (63) (15)
--------------------------------------------------------------------------
See accompanying notes.





Other comprehensive
income (loss)
---------------------


Foreign Equity Non-
(millions of U.S. dollars, currency holders of controlling Total
except per share data) translation Total Agrium interest equity
----------------------------------------------------------------------------
December 31, 2014 (605) (643) 6,680 7 6,687
----------------------------------------------------------------------------
Net earnings - - 12 2 14
----------------------------------------------------------------------------
Other comprehensive
income (loss), net of
tax
----------------------------------------------------------------------------
Other (294) (311) (311) (1) (312)
----------------------------------------------------------------------------
Comprehensive income
(loss), net of tax (294) (311) (299) 1 (298)
----------------------------------------------------------------------------
Dividends ($0.78 per
share) - - (112) - (112)
----------------------------------------------------------------------------
Share-based payment
transactions - - 2 - 2
----------------------------------------------------------------------------
Reclassification of cash
flow hedges, net of tax - 8 8 - 8
----------------------------------------------------------------------------
March 31, 2015 (899) (946) 6,279 8 6,287
----------------------------------------------------------------------------

----------------------------------------------------------------------------
December 31, 2015 (1,214) (1,287) 6,003 4 6,007
----------------------------------------------------------------------------
Net earnings - - 2 1 3
----------------------------------------------------------------------------
Other comprehensive
income (loss), net of
tax
----------------------------------------------------------------------------
Other 179 165 165 - 165
----------------------------------------------------------------------------
Comprehensive income
(loss), net of tax 179 165 167 1 168
----------------------------------------------------------------------------
Dividends ($0.875 per
share) - - (121) - (121)
----------------------------------------------------------------------------
Share-based payment
transactions - - 2 - 2
----------------------------------------------------------------------------
Reclassification of cash
flow hedges, net of tax - 9 9 - 9
----------------------------------------------------------------------------
March 31, 2016 (1,035) (1,113) 6,060 5 6,065
----------------------------------------------------------------------------
See accompanying notes.








See accompanying notes.






AGRIUM INC.
Summarized Notes to the Consolidated Financial Statements
For the three months ended March 31, 2016
(millions of U.S. dollars, unless otherwise stated)
(Unaudited)




1. Corporate Management

Corporate information

Agrium Inc. ("Agrium") is incorporated under the laws of Canada with common shares listed under the symbol "AGU" on the New York Stock Exchange (NYSE) and the Toronto Stock Exchange (TSX). Our Corporate head office is located at 13131 Lake Fraser Drive S.E., Calgary, Canada. We conduct our operations globally from our Wholesale head office in Calgary and our Retail head office in Loveland, Colorado, United States. In these financial statements, "we", "us", "our" and "Agrium" mean Agrium Inc., its subsidiaries and joint arrangements.

We categorize our operating segments within the Retail and Wholesale business units as follows:



-- Retail: Distributes crop nutrients, crop protection products, seed and
merchandise and provides services directly to growers through a network
of farm centers in two geographical segments:
-- North America: including the United States and Canada
-- International: including Australia and South America
-- Wholesale: Produces, markets and distributes crop nutrients and
industrial products through the following businesses:
-- Nitrogen: Manufacturing in Alberta and Texas
-- Potash: Mining and processing in Saskatchewan
-- Phosphate: Mining and production facilities in Alberta and Idaho
-- Wholesale Other: Purchasing and reselling crop nutrient products
from other suppliers to customers in the Americas and Europe;
producing blended crop nutrients and Environmentally Smart Nitrogen®
(ESN) polymer-coated nitrogen crop nutrients; and operations of
joint ventures and associates



Additional information on our operating segments is included in note 2.

Seasonality in our business results from increased demand for our products during planting seasons. Sales are generally higher in spring and fall.




AGRIUM INC.
Summarized Notes to the Consolidated Financial Statements
For the three months ended March 31, 2016
(millions of U.S. dollars, unless otherwise stated)
(Unaudited)

2. Operating Segments







Segment information by business unit Three months ended March 31,
---------------------------------------------------------------------------
2016
---------------------------------------------------------------------------
Retail Wholesale Other (a) Total
---------------------------------------------------------------------------
Sales - external 2,278 447 - 2,725
---------------------------------------------------------------------------
- inter-segment 12 202 (214) -
---------------------------------------------------------------------------
Total sales 2,290 649 (214) 2,725
---------------------------------------------------------------------------
Cost of product sold 1,888 496 (213) 2,171
---------------------------------------------------------------------------
Gross profit 402 153 (1) 554
---------------------------------------------------------------------------
Gross profit (%) 18 24 20
---------------------------------------------------------------------------
Expenses
---------------------------------------------------------------------------
Selling 410 8 (4) 414
---------------------------------------------------------------------------
General and administrative 22 8 25 55
---------------------------------------------------------------------------
Share-based payments - - 4 4
---------------------------------------------------------------------------
(Earnings) loss from associates and
joint ventures (4) (1) - (5)
---------------------------------------------------------------------------
Other (income) expenses (3) 19 (5) 11
---------------------------------------------------------------------------
(Loss) earnings before finance costs and
income taxes (23) 119 (21) 75
---------------------------------------------------------------------------
Finance costs - - 70 70
---------------------------------------------------------------------------
(Loss) earnings before income taxes (23) 119 (91) 5
---------------------------------------------------------------------------
Depreciation and amortization 67 44 3 114
---------------------------------------------------------------------------
Finance costs - - 70 70
---------------------------------------------------------------------------
EBITDA (b) 44 163 (18) 189


Segment information by business unit Three months ended March 31,
----------------------------------------------------------------------------
2015
----------------------------------------- ----------------------------------
Retail Wholesale Other (a) Total
----------------------------------------- ----------------------------------
Sales - external 2,260 612 - 2,872
----------------------------------------------------------------------------
- inter-segment 3 255 (258) -
----------------------------------------------------------------------------
Total sales 2,263 867 (258) 2,872
----------------------------------------------------------------------------
Cost of product sold 1,892 633 (237) 2,288
----------------------------------------------------------------------------
Gross profit 371 234 (21) 584
----------------------------------------------------------------------------
Gross profit (%) 16 27 20
----------------------------------------------------------------------------
Expenses
----------------------------------------------------------------------------
Selling 423 11 (4) 430
----------------------------------------------------------------------------
General and administrative 26 10 31 67
----------------------------------------------------------------------------
Share-based payments - - 45 45
----------------------------------------------------------------------------
(Earnings) loss from associates and
joint ventures (1) 3 (2) -
----------------------------------------------------------------------------
Other (income) expenses (12) (22) 1 (33)
----------------------------------------------------------------------------
(Loss) earnings before finance costs and
income taxes (65) 232 (92) 75
----------------------------------------------------------------------------
Finance costs - - 56 56
----------------------------------------------------------------------------
(Loss) earnings before income taxes (65) 232 (148) 19
----------------------------------------------------------------------------
Depreciation and amortization 57 50 4 111
----------------------------------------------------------------------------
Finance costs - - 56 56
----------------------------------------------------------------------------
EBITDA (b) (8) 282 (88) 186





(a) Includes inter-segment eliminations.
(b) EBITDA is earnings (loss) from continuing operations before finance
costs, income taxes, depreciation and amortization.








AGRIUM INC.
Summarized Notes to the Consolidated Financial Statements
For the three months ended March 31, 2016
(millions of U.S. dollars, unless otherwise stated)
(Unaudited)






Segment information - Retail Three months ended March 31,
----------------------------------------------------------------------------
2016
----------------------------------------------------------------------------
North
America International Retail
----------------------------------------------------------------------------
Sales - external 1,797 481 2,278
----------------------------------------------------------------------------
- inter-segment 12 - 12
----------------------------------------------------------------------------
Total sales 1,809 481 2,290
----------------------------------------------------------------------------
Cost of product sold 1,506 382 1,888
----------------------------------------------------------------------------
Gross profit 303 99 402
----------------------------------------------------------------------------
Expenses
----------------------------------------------------------------------------
Selling 337 73 410
----------------------------------------------------------------------------
General and administrative 15 7 22
----------------------------------------------------------------------------
Earnings from associates and joint
ventures (4) - (4)
----------------------------------------------------------------------------
Other expenses (income) 6 (9) (3)
----------------------------------------------------------------------------
(Loss) earnings before income taxes (51) 28 (23)
----------------------------------------------------------------------------
Depreciation and amortization 61 6 67
----------------------------------------------------------------------------
EBITDA 10 34 44
----------------------------------------------------------------------------



Segment information - Retail Three months ended March 31,
----------------------------------------------------------------------------
2015
----------------------------------------------------------------------------
North
America International Retail
----------------------------------------------------------------------------
Sales - external 1,773 487 2,260
----------------------------------------------------------------------------
- inter-segment 3 - 3
----------------------------------------------------------------------------
Total sales 1,776 487 2,263
----------------------------------------------------------------------------
Cost of product sold 1,503 389 1,892
----------------------------------------------------------------------------
Gross profit 273 98 371
----------------------------------------------------------------------------
Expenses
----------------------------------------------------------------------------
Selling 345 78 423
----------------------------------------------------------------------------
General and administrative 17 9 26
----------------------------------------------------------------------------
Earnings from associates and joint
ventures (1) - (1)
----------------------------------------------------------------------------
Other expenses (income) (3) (9) (12)
----------------------------------------------------------------------------
(Loss) earnings before income taxes (85) 20 (65)
----------------------------------------------------------------------------
Depreciation and amortization 52 5 57
----------------------------------------------------------------------------
EBITDA (33) 25 (8)
----------------------------------------------------------------------------








AGRIUM INC.
Summarized Notes to the Consolidated Financial Statements
For the three months ended March 31, 2016
(millions of U.S. dollars, unless otherwise stated)
(Unaudited)






Segment information -
Wholesale Three months ended March 31,
----------------------------------------------------------------------------
2016
----------------------------------------------------------------------------
Wholesale
Nitrogen Potash Phosphate Other (a) Wholesale
----------------------------------------------------------------------------
Sales - external 173 48 80 146 447
----------------------------------------------------------------------------
- inter-segment 77 43 50 32 202
----------------------------------------------------------------------------
Total sales 250 91 130 178 649
----------------------------------------------------------------------------
Cost of product sold 155 77 110 154 496
----------------------------------------------------------------------------
Gross profit 95 14 20 24 153
----------------------------------------------------------------------------
Expenses
----------------------------------------------------------------------------
Selling 4 2 1 1 8
----------------------------------------------------------------------------
General and
administrative 4 2 1 1 8
----------------------------------------------------------------------------
(Earnings) loss from
associates and joint - - - (1) (1)
ventures
----------------------------------------------------------------------------
Other expenses (income) 6 6 4 3 19
----------------------------------------------------------------------------
Earnings (loss) before income
taxes 81 4 14 20 119
----------------------------------------------------------------------------
Depreciation and
amortization 13 20 10 1 44
----------------------------------------------------------------------------
EBITDA 94 24 24 21 163
----------------------------------------------------------------------------


Segment information -
Wholesale Three months ended March 31,
----------------------------------------------------------------------------
2015
----------------------------------------------------------------------------
Wholesale
Nitrogen Potash Phosphate Other (a) Wholesale
----------------------------------------------------------------------------
Sales - external 218 25 110 259 612
----------------------------------------------------------------------------
- inter-segment 97 42 71 45 255
----------------------------------------------------------------------------
Total sales 315 67 181 304 867
----------------------------------------------------------------------------
Cost of product sold 172 60 136 265 633
----------------------------------------------------------------------------
Gross profit 143 7 45 39 234
----------------------------------------------------------------------------
Expenses
----------------------------------------------------------------------------
Selling 4 1 1 5 11
----------------------------------------------------------------------------
General and
administrative 3 2 2 3 10
----------------------------------------------------------------------------
(Earnings) loss from
associates and joint - - - 3 3
ventures
----------------------------------------------------------------------------
Other expenses (income) (2) 5 12 (37) (22)
----------------------------------------------------------------------------
Earnings (loss) before income
taxes 138 (1) 30 65 232
----------------------------------------------------------------------------
Depreciation and
amortization 18 14 13 5 50
----------------------------------------------------------------------------
EBITDA 156 13 43 70 282
----------------------------------------------------------------------------






(a) Includes product purchased for resale, ammonium sulfate, ESN and other
products.








AGRIUM INC.
Summarized Notes to the Consolidated Financial Statements
For the three months ended March 31, 2016
(millions of U.S. dollars, unless otherwise stated)
(Unaudited)






Gross profit by product line Three months ended March 31,
----------------------------------------------------------------------------
2016 2015
------------------------------------------------------ ---------------------
Cost of Cost of
product Gross product Gross
Sales sold profit Sales sold profit
------------------------------------------------------ ---------------------
Retail
------------------------------------------------------ ---------------------
Crop nutrients 839 705 134 911 785 126
------------------------------------------------------ ---------------------
Crop protection products 831 710 121 793 685 108
------------------------------------------------------ ---------------------
Seed 376 325 51 308 268 40
------------------------------------------------------ ---------------------
Merchandise 117 98 19 142 122 20
------------------------------------------------------ ---------------------
Services and other 127 50 77 109 32 77
------------------------------------------------------ ---------------------
2,290 1,888 402 2,263 1,892 371
------------------------------------------------------ ---------------------
Wholesale
------------------------------------------------------ ---------------------
Nitrogen 250 155 95 315 172 143
------------------------------------------------------ ---------------------
Potash 91 77 14 67 60 7
------------------------------------------------------ ---------------------
Phosphate 130 110 20 181 136 45
------------------------------------------------------ ---------------------
Product purchased for resale 97 92 5 192 185 7
------------------------------------------------------ ---------------------
Ammonium sulfate, ESN and
other 81 62 19 112 80 32
------------------------------------------------------ ---------------------
649 496 153 867 633 234
------------------------------------------------------ ---------------------
Other inter-segment eliminations (214) (213) (1) (258) (237) (21)
------------------------------------------------------ ---------------------
Total 2,725 2,171 554 2,872 2,288 584
------------------------------------------------------ ---------------------

----------------------------------------------------------------------------
Wholesale share of joint
ventures
------------------------------------------------------ ---------------------
Nitrogen 25 21 4 21 22 (1)
------------------------------------------------------ ---------------------
Product purchased for resale - - - 26 25 1
------------------------------------------------------ ---------------------
25 21 4 47 47 -
------------------------------------------------------ ---------------------
Total Wholesale including
proportionate share in joint
ventures 674 517 157 914 680 234
------------------------------------------------------ ---------------------








AGRIUM INC.
Summarized Notes to the Consolidated Financial Statements
For the three months ended March 31, 2016
(millions of U.S. dollars, unless otherwise stated)
(Unaudited)






Selected volumes and per tonne
information Three months ended March 31,
---------------------------------------------------------------------------
2016
---------------------------------------------------------------------------
Cost of
Sales Selling product
tonnes price sold Margin
(000's) ($/tonne) ($/tonne) ($/tonne)
---------------------------------------------------------------------------
Retail
---------------------------------------------------------------------------
Crop nutrients
---------------------------------------------------------------------------
North America 1,520 450 369 81
---------------------------------------------------------------------------
International 440 354 328 26
---------------------------------------------------------------------------
Total crop nutrients 1,960 428 360 68
---------------------------------------------------------------------------

---------------------------------------------------------------------------
Wholesale
---------------------------------------------------------------------------
Nitrogen
---------------------------------------------------------------------------
North America
---------------------------------------------------------------------------
Ammonia 230 398
---------------------------------------------------------------------------
Urea 319 338
---------------------------------------------------------------------------
Other 192 265
---------------------------------------------------------------------------
Total nitrogen 741 338 209 129
---------------------------------------------------------------------------

---------------------------------------------------------------------------
Potash
---------------------------------------------------------------------------
North America 263 215
---------------------------------------------------------------------------
International 193 177
---------------------------------------------------------------------------
Total potash 456 199 168 31
---------------------------------------------------------------------------

---------------------------------------------------------------------------
Phosphate 220 589 499 90
---------------------------------------------------------------------------
Product purchased for resale 297 326 310 16
---------------------------------------------------------------------------
Ammonium sulfate 57 289 113 176
---------------------------------------------------------------------------
ESN and other 155
---------------------------------------------------------------------------
Total Wholesale 1,926 337 258 79
---------------------------------------------------------------------------

---------------------------------------------------------------------------
Wholesale share of joint ventures
---------------------------------------------------------------------------
Nitrogen 83 296 247 49
---------------------------------------------------------------------------
Product purchased for resale - - - -
---------------------------------------------------------------------------
83 296 247 49
---------------------------------------------------------------------------
Total Wholesale including
proportionate share in joint
ventures 2,009 335 257 78
---------------------------------------------------------------------------



Selected volumes and per tonne
information Three months ended March 31,
----------------------------------------------------------------------------
2015
----------------------------------------------------------------------------
Cost of
Sales Selling product
tonnes price sold Margin
(000's) ($/tonne) ($/tonne) ($/tonne)
----------------------------------------------------------------------------
Retail
----------------------------------------------------------------------------
Crop nutrients
----------------------------------------------------------------------------
North America 1,435 511 431 80
----------------------------------------------------------------------------
International 452 394 366 28
----------------------------------------------------------------------------
Total crop nutrients 1,887 483 416 67
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Wholesale
----------------------------------------------------------------------------
Nitrogen
----------------------------------------------------------------------------
North America
----------------------------------------------------------------------------
Ammonia 175 529
----------------------------------------------------------------------------
Urea 348 422
----------------------------------------------------------------------------
Other 238 320
----------------------------------------------------------------------------
Total nitrogen 761 414 226 188
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Potash
----------------------------------------------------------------------------
North America 149 393
----------------------------------------------------------------------------
International 36 226
----------------------------------------------------------------------------
Total potash 185 361 324 37
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Phosphate 282 639 481 158
----------------------------------------------------------------------------
Product purchased for resale 548 349 336 13
----------------------------------------------------------------------------
Ammonium sulfate 82 335 134 201
----------------------------------------------------------------------------
ESN and other 176
----------------------------------------------------------------------------
Total Wholesale 2,034 426 311 115
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Wholesale share of joint ventures
----------------------------------------------------------------------------
Nitrogen 52 408 429 (21)
----------------------------------------------------------------------------
Product purchased for resale 85 310 297 13
----------------------------------------------------------------------------
137 347 347 -
----------------------------------------------------------------------------
Total Wholesale including
proportionate share in joint
ventures 2,171 421 313 108
----------------------------------------------------------------------------






AGRIUM INC.
Summarized Notes to the Consolidated Financial Statements
For the three months ended March 31, 2016
(millions of U.S. dollars, unless otherwise stated)
(Unaudited)

3. Risk Management






Commodity price risk

Natural gas derivative financial instruments outstanding (notional amounts
in millions of MMBtu)
----------------------------------------------------------------------------
March 31,
----------------------------------------------------------------------------
2016
----------------------------------------------------------------------------
Average
contract Fair value
price of assets
Notional Maturities (a) (liabilities)
----------------------------------------------------------------------------
Designated as hedges
----------------------------------------------------------------------------
AECO swaps 67 2016 - 2018 2.97 (74)
----------------------------------------------------------------------------
(74)
----------------------------------------------------------------------------
(a) U.S. dollars per MMBtu.



Commodity price risk

Natural gas derivative financial instruments outstanding (notional amounts
in millions of MMBtu)
----------------------------------------------------------------------------
December 31,
----------------------------------------------------------------------------
2015
----------------------------------------------------------------------------
Average
contract Fair value
price of assets
Notional Maturities (a) (liabilities)
----------------------------------------------------------------------------
Designated as hedges
----------------------------------------------------------------------------
AECO swaps 74 2016 - 2018 2.78 (56)
----------------------------------------------------------------------------
(56)
----------------------------------------------------------------------------
(a) U.S. dollars per MMBtu.







Fair value of assets
(liabilities)
--------------------------
Maturities of natural gas derivative contracts 2016 2017 2018 2019
----------------------------------------------------------------------------
Designated as hedges (31) (24) (19) -
----------------------------------------------------------------------------







Impact of change in fair value of natural gas
derivative financial instruments March 31, December 31,
--------------------------------------------------------------- ------------
2016 2015
--------------------------------------------------------------- ------------
A $10-million impact to other comprehensive income
requires movement in gas prices per MMBtu 0.20 0.28
--------------------------------------------------------------- ------------






Use of derivatives to hedge exposure to natural gas market price risk
----------------------------------------------------------------------------
Term (gas year - 12 months ending October 31) 2016 2017 2018 2019
----------------------------------------------------------------------------
Maximum allowable (% of forecast gas requirements) 75 75 75 25 (a)
----------------------------------------------------------------------------
Forecast average monthly natural gas consumption
(millions of MMBtu) 9 9 9 9
----------------------------------------------------------------------------
Gas requirements hedged using derivatives designated
as hedges (%) 25 25 21 -
----------------------------------------------------------------------------





(a) Maximum monthly hedged volume may not exceed 90 percent of planned
monthly requirements.




For our natural gas derivatives designated in hedging relationships, the underlying risk of the derivative contracts is identical to the hedged risk, and accordingly we have established a ratio of 1:1 for all natural gas hedges. Due to a strong correlation between AECO future contract prices and our delivered cost, we did not experience any ineffectiveness on our hedges, and accordingly we have recorded the full change in the fair value of natural gas derivative contracts designated as hedges to other comprehensive income.



AGRIUM INC.
Summarized Notes to the Consolidated Financial Statements
For the three months ended March 31, 2016
(millions of U.S. dollars, unless otherwise stated)
(Unaudited)


Currency risk

Foreign exchange derivative financial instruments outstanding (notional
amounts in millions of U.S. dollars)





March 31,
----------------------------------------------------------------------------
2016
----------------------------------------------------------------------------
Average Fair value
contract of assets
Sell/Buy Notional Maturities price (a) (liabilities)
----------------------------------------------------------------------------
Not designated as hedges
----------------------------------------------------------------------------
Forwards
----------------------------------------------------------------------------
USD/CAD 10 2016 1.34 -
----------------------------------------------------------------------------
CAD/USD 1,883 2016 1.33 (50)
----------------------------------------------------------------------------
USD/AUD 76 2016 1.43 7
----------------------------------------------------------------------------
AUD/USD 48 2016 1.43 (4)
----------------------------------------------------------------------------
Options
----------------------------------------------------------------------------
USD/CAD - buy USD puts 38 2016 1.37 2
----------------------------------------------------------------------------
USD/CAD - sell USD calls 53 2016 1.50 -
----------------------------------------------------------------------------
USD/AUD - buy USD puts 6 2016 1.32 -
----------------------------------------------------------------------------
(45)
----------------------------------------------------------------------------
Designated as hedges
----------------------------------------------------------------------------
Forwards
----------------------------------------------------------------------------
CAD/USD 158 2016 1.37 (8)
----------------------------------------------------------------------------
AUD/USD 26 2016 1.38 (2)
----------------------------------------------------------------------------
(10)
----------------------------------------------------------------------------
(55)
----------------------------------------------------------------------------

December 31,
----------------------------------------------------------------------------
2015
----------------------------------------------------------------------------
Average Fair value
contract of assets
Sell/Buy Notional Maturities price (a) (liabilities)
----------------------------------------------------------------------------
Not designated as hedges
----------------------------------------------------------------------------
Forwards
----------------------------------------------------------------------------
USD/CAD 190 2016 1.38 (1)
----------------------------------------------------------------------------
CAD/USD 1,805 2016 1.35 45
----------------------------------------------------------------------------
USD/AUD 73 2016 1.42 2
----------------------------------------------------------------------------
AUD/USD 143 2016 1.43 (3)
----------------------------------------------------------------------------
Options
----------------------------------------------------------------------------
USD/CAD - buy USD puts - - - -
----------------------------------------------------------------------------
USD/CAD - sell USD calls - - - -
----------------------------------------------------------------------------
USD/AUD - buy USD puts 59 2016 1.38 (1)
----------------------------------------------------------------------------
42
----------------------------------------------------------------------------
Designated as hedges
----------------------------------------------------------------------------
Forwards
----------------------------------------------------------------------------
CAD/USD - - - -
----------------------------------------------------------------------------
AUD/USD - - - -
----------------------------------------------------------------------------
-
----------------------------------------------------------------------------
42
----------------------------------------------------------------------------





(a) Foreign currency per U.S. dollar.








March 31, December 31,
------------------------ ------------------------
2016 2015
------------------------ ------------------------
Fair value Carrying Fair value Carrying
---------------- ----------------
Level 1 Level 2 value Level 1 Level 2 value
--------------------------------------------------- ------------------------
Financial instruments
measured at fair value on
a recurring basis
--------------------------------------------------- ------------------------
Cash and cash equivalents - 276 276 - 515 515
--------------------------------------------------- ------------------------
Accounts receivable -
derivatives - 9 9 - 48 48
--------------------------------------------------- ------------------------
Other current financial
assets - marketable
securities 20 129 149 20 122 142
--------------------------------------------------- ------------------------
Accounts payable -
derivatives - 100 100 - 29 29
--------------------------------------------------- ------------------------
Other financial
liabilities - derivatives - 38 38 - 33 33
--------------------------------------------------- ------------------------
Financial instruments
measured at amortized
cost
--------------------------------------------------- ------------------------
Current portion of long-
term debt
--------------------------------------------------- ------------------------
Debentures - 105 100 - - -
--------------------------------------------------- ------------------------
Floating rate debt - 8 8 - 8 8
--------------------------------------------------- ------------------------
Long-term debt
--------------------------------------------------- ------------------------
Debentures - 4,533 4,370 - 4,464 4,469
--------------------------------------------------- ------------------------
Fixed and floating rate
debt - 45 45 - 44 44
--------------------------------------------------- ------------------------




There have been no transfers between Level 1 and Level 2 fair value measurements in the three months ended March 31, 2016 or March 31, 2015. We do not measure any of our financial instruments using Level 3 inputs.



AGRIUM INC.
Summarized Notes to the Consolidated Financial Statements
For the three months ended March 31, 2016
(millions of U.S. dollars, unless otherwise stated)
(Unaudited)

4. Expenses





Three months ended
----------------------------------------------------------------------------
Other expenses March 31,
----------------------------------------------------------------------------
2016 2015
----------------------------------------------------------------------------
Loss (gain) on foreign exchange and related derivatives 2 (1)
----------------------------------------------------------------------------
Interest income (13) (17)
----------------------------------------------------------------------------
Gain on sale of assets - (38)
----------------------------------------------------------------------------
Environmental remediation and asset retirement
obligations 2 9
----------------------------------------------------------------------------
Bad debt expense 8 7
----------------------------------------------------------------------------
Potash profit and capital tax 3 5
----------------------------------------------------------------------------
Other 9 2
----------------------------------------------------------------------------
11 (33)
----------------------------------------------------------------------------






5. Share-based Payments



During the three months ended March 31, 2016, we granted the following share-based compensation awards to officers and employees.



Award type Number Grant price
----------------------------------------------------------------------------
Stock options 514,779 84.37
----------------------------------------------------------------------------
Stock appreciation rights 88,147 84.37
----------------------------------------------------------------------------
Share units 315,315 N/A
----------------------------------------------------------------------------







6. Debt






March 31, December 31,
--------------------------------------------------------------- ------------
2016 2015
--------------------------------------------------------------- ------------
Maturity Rate (%) (a)
--------------------------------------------------------------- ------------
Short-term debt
--------------------------------------------------------------- ------------
Commercial paper 2016 0.87 508 632
--------------------------------------------------------------- ------------
Credit facilities 4.69 121 203
--------------------------------------------------------------- ------------
629 835
--------------------------------------------------------------- ------------





(a) Weighted average rates at March 31, 2016.




FOR FURTHER INFORMATION PLEASE CONTACT:

FOR FURTHER INFORMATION:
Investor/Media Relations:
Richard Downey
Vice President, Investor & Corporate Relations
(403) 225-7357

Todd Coakwell
Director, Investor Relations
(403) 225-7437

Louis Brown
Analyst, Investor Relations
(403) 225-7761

Contact us at: www.agrium.com

View Comments and Join the Discussion!