Agrium Inc.
TSX : AGU
NYSE : AGU

Agrium Inc.

November 05, 2013 18:45 ET

Agrium Reports Third Quarter Results

CALGARY, ALBERTA--(Marketwired - Nov. 5, 2013) -

ALL AMOUNTS ARE STATED IN U.S.$

Agrium Inc. (TSX:AGU) (NYSE:AGU) announced today consolidated net earnings ("net earnings") of $76-million ($0.52 diluted earnings per share) for the third quarter of 2013, compared with net earnings of $129-million in the third quarter of 2012 ($0.80 diluted earnings per share).

The 2013 third quarter results included a pre-tax share based payments recovery of $21-million ($0.11 diluted earnings per share), a write-down on our Hanfeng Evergreen Inc. investment of $12-million ($0.08 diluted earnings per share) and a loss of $2-million ($0.01 diluted earnings per share) on natural gas and other hedge positions. Excluding these items, net earnings would have been $73-million ($0.50 diluted earnings per share).(1)

(1) Third quarter effective tax rate of 25 percent was used for adjusted diluted earnings per share calculation, excluding the write-down on Hanfeng Evergreen Inc. as there was no tax impact.

"Agrium's Retail business unit had one of its strongest third quarters on record, with EBITDA2 of $147-million. This was driven largely by high usage of crop protection products and related application services in our North American market. The late growing season in North America, combined with uncertainty in the fertilizer markets caused many customers to delay crop nutrient purchases," commented Mike Wilson, Agrium's President and CEO.

2 See "Additional and Non-IFRS Measures" in our 2013 third quarter Management's Discussion and Analysis.

"Additionally, unplanned lost production due to outages at our Redwater and Carseland facilities reduced product availability in the third quarter and will impact fourth quarter sales volumes. This is expected to impact fourth quarter earnings by approximately $0.20 per share," added Mr. Wilson.

"Despite any short term factors or market fluctuations, we continued to demonstrate our confidence in the ability of the business to generate excess cash flow through the commodity cycle by substantially increasing the dividend in the third quarter and continuing to execute on our share buy-back program," concluded Mr. Wilson.

Agrium is providing guidance for the fourth quarter of 2013 of $0.80 to $1.25 diluted earnings per share. This excludes gains or losses on foreign exchange and derivative hedge positions, Retail operating results for acquired Viterra assets and related integration costs and purchase price adjustments, and share-based payments expense in our estimated fourth quarter results.3

3 See disclosure in the section "Outlook, Key Risks and Uncertainties" in our 2013 third quarter Management's Discussion and Analysis and additional assumptions outlined on the following page.

MANAGEMENT'S DISCUSSION AND ANALYSIS

November 5, 2013

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 third quarter of 2013 (three months ended September 30, 2013) are against results for the third quarter of 2012 (three months ended September 30, 2012). All dollar amounts refer to United States ("U.S.") dollars except where otherwise stated. Certain financial measures in this MD&A are not prescribed by IFRS, and are defined in the "Additional and Non-IFRS Financial Measures" section of this MD&A.

The following interim MD&A is as of November 5, 2013 and should be read in conjunction with the consolidated interim financial statements for the three and nine months ended September 30, 2013 and 2012 (the "Consolidated Financial Statements"), and the annual MD&A and financial statements for the year ended December 31, 2012 included in our 2012 Annual Report to Shareholders to which readers are referred. 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 where an item is not material or there has been no material change from the discussion in our annual MD&A. In respect of Forward-Looking Statements, please refer to the section entitled "Forward-Looking Statements" after the "Outlook, Key Risks and Uncertainties" section of this MD&A.

The major assumptions made in preparing our fourth quarter guidance are outlined below and include but are not limited to:

  • North America weather patterns will support normal fall applications;
  • Wholesale realized selling prices through the fourth quarter of 2013 will approximate current benchmark prices except for selling prices on volumes already committed under programs;
  • North America Wholesale produced fertilizer sales volumes will approximate sales volumes in the same quarter of 2012;
  • North America Wholesale anticipated sales volumes are approximately 75 percent committed at fixed prices in the fourth quarter of 2013;
  • Utilization for Wholesale's potash and phosphate facilities will average approximately 88 percent in the fourth quarter of 2013 compared to 86 percent in the same quarter of 2012;
  • Utilization for Wholesale's North American nitrogen facilities will average approximately 75 percent in the fourth quarter of 2013 compared to 95 percent in the same quarter of 2012, due to outages at our Redwater and Carseland nitrogen facilities this year;
  • Retail North America fertilizer margin percentages will be higher than the 14 percent realized in the fourth quarter of 2012;
  • Retail North America chemical margin percentages will be lower than the 48 percent realized in the fourth quarter of 2012;
  • Retail North America fertilizer sales volumes will be slightly higher than in the same quarter of 2012;
  • The average NYMEX gas price will not deviate significantly from approximately $3.90 per MMBtu; and
  • Guidance issued excluding the fourth quarter effects of:
    • Share-based payments;
    • Gains or losses on foreign exchange and derivative hedge positions; and
    • Retail operating results for acquired Viterra assets and related integration costs and purchase price adjustments.

2013 Third Quarter Operating Results

CONSOLIDATED NET EARNINGS

Agrium's 2013 third quarter consolidated net earnings ("net earnings") were $76-million, or $0.52 diluted earnings per share, compared to net earnings of $129-million, or $0.80 diluted earnings per share, for the same quarter of 2012.

Financial Overview
(millions of U.S. dollars, except per share amounts Three months ended September 30, Nine months ended September 30,
and where noted) 2013 2012 Change % Change 2013 2012 Change % Change
Sales 2,869 2,832 37 1 13,109 13,175 (66 ) (1 )
Gross profit 641 739 (98 ) (13 ) 3,079 3,375 (296 ) (9 )
Expenses 505 543 (38 ) (7 ) 1,644 1,712 (68 ) (4 )
Earnings before finance costs
and income taxes ("EBIT") 136 196 (60 ) (31 ) 1,435 1,663 (228 ) (14 )
Net earnings 76 129 (53 ) (41 ) 964 1,144 (180 ) (16 )
Diluted earnings per share 0.52 0.80 (0.28 ) (35 ) 6.50 7.21 (0.71 ) (10 )
Effective tax rate (%) 25 22 N/A 3 27 27 N/A -

Sales

Sales increased by $37-million to $2.9-billion for the third quarter of 2013 and decreased $66-million to $13.1-billion for the first nine months of 2013 compared to the third quarter and first nine months of 2012, respectively. Factors that affected our performance during the third quarter of 2013 compared to the third quarter of 2012 include the following:

  • Retail sales increased by 15 percent to $2.1-billion as there was a return to a more regular seasonal crop input demand for the current quarter compared to the 2012 earlier spring season which shifted sales typically earned from the third quarter into the first half for crop nutrients and crop protection products. The increase was complemented by incremental sales from recently acquired Retail locations;
  • Wholesale sales decreased by 24 percent to $752-million due to lower realized sales prices across all products, lower urea sales volumes resulting from plant outages at our nitrogen facilities which lowered product available for sale and lower phosphate sales volumes; and
  • Advanced Technologies ("AAT") sales decreased by 14 percent to $108-million largely due to lower Environmentally Smart Nitrogen ("ESN") volumes and sales prices as a result of the soft urea market.

Gross Profit

Our gross profit for the third quarter of 2013 was $641-million, a decrease of $98-million compared to the third quarter of 2012. The main drivers of this variance consist of:

  • Wholesale's gross profit decreased by $176-million to $123-million for the third quarter of 2013, compared to the third quarter of 2012 primarily as a result of weaker sales prices for urea, phosphate and potash coupled with lower sales volumes of urea and phosphate due to production outages and weaker market conditions; and
  • Retail's gross profit increased by $73-million to $511-million for the third quarter of 2013, compared to the third quarter of 2012 as a result of increased crop protection sales volumes due to a return to regular seasonal demand compared to last year's early spring season which shifted sales traditionally earned in the third quarter into the second quarter of 2012. In addition, there was an increase in gross profit on application services which is consistent with increased volumes in crop nutrients and crop protection products.

Expenses

Expenses decreased $38-million for the third quarter of 2013 compared to the third quarter of 2012. This difference is primarily a result of the following items:

  • A $74-million favorable change in share-based payments, with a $21-million share-based payments recovery in the current quarter compared to a $53-million charge in the same period last year (see section "Other" for further discussion); and
  • A $30-million decrease in other expenses included a favorable change related to environmental remediation and asset retirement obligation expenses incurred in the third quarter of 2012 of $49-million with no corresponding charge in the third quarter of 2013. This was partially reduced by a $12-million unfavorable change in other expenses caused by the recognition of an impairment in our investment in Hanfeng Evergreen Inc. ("Hanfeng").

The above decreases were partially offset by:

  • An increase in Retail selling expenses of $48-million which was driven by increased sales activity this quarter and costs associated with Retail locations acquired in 2012 (see section "Retail" for further discussion); and
  • Decreased earnings of $32-million from Wholesale's equity accounted investment in Argentina (see section "Wholesale" for further discussion).

The following table is a summary of our other expenses (income) for the third quarter and first nine months of 2013 and 2012, respectively.

Three months ended Nine months ended
September 30, September 30,
(millions of U.S. dollars) 2013 2012 2013 2012
Realized loss (gain) on derivative financial instruments 12 2 (2) 26
Unrealized gain on derivative financial instruments (10) (3) (14) (17)
Interest income (20) (30) (51) (65)
Foreign exchange loss 1 3 27 14
Environmental remediation and asset retirement obligations 1 66 5 78
Bad debt (recovery) expense (6) 6 20 30
Potash profit and capital tax 3 - 15 13
Other 35 2 45 2
16 46 45 81

Effective Tax Rate

The effective tax rate was 25 percent for the third quarter compared to 22 percent for the same period last year due to an increase in income earned in higher taxed jurisdictions. The effective tax rate was 27 percent for the first nine months of 2013 and remained unchanged as compared to the same period last year.

Retail

Retail reported third quarter sales of $2.1-billion, an increase of 15 percent compared to sales of $1.8-billion reported in the same quarter last year. Gross profit was $511-million in the third quarter of 2013, a $73-million increase from last year's third quarter. Similarly, Retail reported EBITDA of $147-million, up from $121-million reported in the third quarter of last year. Stronger year-over-year sales and gross profit results were evident across all products and services, despite lower average nutrient prices and margins this year. This was due to a more normal summer growing season in the U.S. relative to the drought conditions experienced in the same period last year and incremental sales from recently acquired Retail locations.

Crop nutrient sales were $654-million this quarter, compared to $634-million in the third quarter of 2012. A 14 percent increase in nutrient sales volumes in the quarter were largely offset by lower nutrient prices. Gross profit for crop nutrients was $116-million this quarter, an increase of $5-million compared to the $111-million reported in the third quarter of 2012. Total crop nutrient margins as a percentage of sales were 17.7 percent in the third quarter of 2013, just slightly higher than the 17.5 percent reported in the same quarter last year. However, per tonne nutrient margins were down 9 percent from the third quarter of 2012.

Crop protection sales were $1.1-billion in the third quarter of 2013, compared to $872-million in sales in the same period last year. The increase was driven primarily by greater sales volumes of fungicides and herbicides. Gross profit this quarter was $248-million, an increase of $46-million over the $202-million reported in the third quarter of 2012. This is attributable to increased volumes and a favorable product mix. Total crop protection margins as a percentage of sales were 23 percent this quarter, up slightly from the same period last year. 2013 year-to-date crop protection margins as a percentage of sales were 21 percent, on par with the same period last year.

Seed sales were $69-million in the third quarter of 2013, up 23 percent from the $56-million reported in the third quarter of last year. In North America, higher seed sales were partly due to the later spring planting season, which shifted some sales volumes into the third quarter. This particularly affected soybean sales volumes, as the delayed spring wheat harvest subsequently delayed the double crop planting of soybeans. Gross profit was $30-million this quarter, up from the $28-million reported last year. Seed margins as a percentage of sales were 43 percent in the third quarter of 2013, marginally lower from the same period for 2012. Year-to-date in 2013, seed sales are up 7 percent and margins are slightly higher at 18 percent than the same period last year.

Sales of merchandise in the third quarter of 2013 were $122-million, compared to $105-million in the same period last year. Gross profit for this product line was $19-million this quarter, compared to $17-million reported in the third quarter of 2012. The improvement is related to additional sales volumes in animal health and other livestock-related products in Australia.

Services and other sales were $205-million this quarter, compared to the $167-million reported in the third quarter of 2012. Gross profit was $98-million in the third quarter of 2013, compared to $80-million for the same period last year. These increases relate to a shift in earnings from the second quarter to the third quarter in North America and are consistent with the higher North American nutrient and crop protection sales volumes.

Selling expenses as a percentage of sales was 19.7 percent in the third quarter of 2013 which is down marginally from the 20 percent reported in the same period last year. Retail selling expenses were $416-million for the third quarter, compared to $368-million in the same period last year. The majority of this variance was due to increased costs resulting from recent acquisitions as well as an increase in variable people costs consistent with the higher sales and earnings in the third quarter.

Wholesale

Wholesale's 2013 third quarter sales were $752-million, down $234-million from the same quarter last year. Gross profit was $123-million this quarter, compared to $299-million in the third quarter of 2012. Wholesale reported EBITDA of $130-million in the third quarter of 2013, down from the $348-million reported in the same period last year. Wholesale's Adjusted EBITDA1 was $143-million this quarter, compared to $376-million reported in the same period last year. Wholesale EBIT this quarter was $198-million lower than in the third quarter of last year. Wholesale's results this quarter were impacted by lower realized sales prices across all products, as well as lower phosphate and nitrogen sales volumes due to outages at our Carseland and Redwater nitrogen facilities in addition to slow market demand.

1Adjusted EBITDA is defined as earnings (loss) before finance costs, income taxes, depreciation and amortization and before finance costs, income taxes, depreciation and amortization of joint ventures.

Nitrogen gross profit in the third quarter of 2013 was $76-million, compared to $215-million in the same quarter last year. Nitrogen sales volumes were 636,000 tonnes in the third quarter of 2013, down 183,000 tonnes from the same period last year, partly due to outages at our Carseland and Redwater nitrogen facilities. Realized sales prices for all nitrogen products were lower than the third quarter of last year, with urea realized sales prices down 23 percent, or $133 per tonne year-over-year. Nitrogen cost of product sold was $331 per tonne this quarter, compared to $255 per tonne reported in the third quarter of 2012. The increase was primarily due to expenses associated with the outages at our Carseland and Redwater facilities, which equated to approximately $35-million, and higher natural gas costs. Our average nitrogen gross margins were $119 per tonne this quarter, compared to $262 per tonne in the same period last year.

Agrium's average natural gas cost in cost of product sold was $2.78/MMBtu this quarter ($3.16/MMBtu including the impact of realized losses on natural gas derivatives), compared to $2.46/MMBtu for the same period in 2012 ($2.72/MMBtu including the impact of realized losses on natural gas derivatives). Hedging gains or losses are included in other expenses and not cost of product sold, thus are not part of the calculation of gross profit. The U.S. benchmark (NYMEX) natural gas price for the third quarter of 2013 was $3.60/MMBtu, compared to $2.81/MMBtu in the same quarter last year. The AECO (Alberta) basis differential was a $0.91/MMBtu discount to NYMEX in the third quarter of 2013, compared to the $0.62/MMBtu discount in the third quarter of 2012.

Potash gross profit for the third quarter of 2013 was $27-million, compared to $23-million reported in the same quarter last year. The increase was primarily driven by higher sales volumes and lower cost of production, partly offset by significantly lower sales prices. The increase in volumes and lower cost of production was a result of a return to a traditional two week turnaround at our Vanscoy facility in the third quarter, compared to last year's eight week planned turnaround associated with our brownfield expansion project. International sales volumes were 84,000 tonnes this quarter, up from the 43,000 tonnes reported in the third quarter of last year, but below the previous three year average of 174,000 tonnes (2009-2011 period). Domestic sales volumes were 181,000 tonnes this quarter, compared to 117,000 tonnes in the third quarter of 2012 and above the previous three year average of 160,000 tonnes (2009-2011 period). The higher sales volumes were largely offset by a 31 percent reduction in realized sales prices compared to the prior year. Potash cost of product sold was $246 per tonne this quarter compared to $363 per tonne reported in the third quarter of 2012, due to the shorter turnaround this year. Gross margin was $103 per tonne in the third quarter of 2013, compared to the $140 per tonne in the same quarter of 2012.

Phosphate gross profit was $7-million in the third quarter of 2013, compared to $47-million in the same quarter last year. The decrease resulted from a combination of lower realized sales prices, higher cost of production and lower sales volumes due to weaker market conditions. Phosphate sales volumes this quarter were 192,000 tonnes, a 26 percent decline from the third quarter of last year, due to a slow start to the fall season. Realized phosphate sales prices were $633 per tonne this quarter, a $70 per tonne decrease from the $703 per tonne realized in the same quarter last year. Phosphate cost of product sold was $595 per tonne in the third quarter of 2013, an increase from $519 per tonne in the same period last year. The increase was primarily a result of higher rock costs associated with the switch to imported rock, as well as higher ammonia costs. Gross margin was $38 per tonne in the third quarter of 2013, compared to $184 per tonne in the same period last year.

Gross profit from ammonium sulfate and other was $12-million this quarter, a reduction of $5-million from the same period last year as a result of lower realized sales prices.

Product purchased for resale gross profit was $1-million this quarter, compared to a loss of $3-million in the third quarter of 2012.

Wholesale expenses in the third quarter of 2013 were $32-million, compared to $10-million in the third quarter of 2012. The higher net expense was primarily due to lower earnings from our equity investment in Argentina, as the Profertil S.A. ("Profertil") facility faced lower global urea prices and an increase in gas supply interruptions this year. The facility experienced 57 days of downtime this quarter compared to 24 days in the third quarter of last year, which reduced production and tonnes available for sale as well as increased costs per tonne.

Advanced Technologies

AAT reported a quarterly gross profit of $12-million in the third quarter of 2013, a decrease of $16-million from the $28-million reported in the same period last year. EBITDA was a loss of $5-million in the third quarter, a $9-million decrease from the same period last year, including Courtright coating facility closure costs amounting to $5-million recorded in the third quarter of 2012. The lower year-over-year results were primarily due to weak ESN demand as a result of weak grower demand related to volatility in the agricultural and crop input markets and a later fall application season than last year.

Other

EBITDA for our Other non-operating business unit for the third quarter of 2013 was a loss of $28-million, compared to a loss of $157-million for the third quarter of 2012. The favorable change was primarily driven by:

  • A $74-million favorable change in share-based payments, where there was a $21-million recovery in the third quarter of 2013 compared to a $53-million charge in the third quarter of 2012. This was largely caused by a depreciation of our share price during the third quarter of 2013 compared to an appreciation of our share price during the third quarter of 2012;
  • A $49-million favorable change in environmental remediation and asset retirement obligation expenses incurred in the third quarter of 2012 with no corresponding charge in the third quarter of 2013; and
  • A $21-million increase in gross profit for the three months at September 30, 2013 compared to the three months at September 30, 2012 which reflected less inter-segment inventory held in our Retail business unit not yet sold to external customers.

The above factors were partially offset by a $12-million impairment of our investment in Hanfeng.

FINANCIAL CONDITION

The following are changes to working capital on our Consolidated Balance Sheets in the nine-month period ended September 30, 2013 compared to December 31, 2012.


(millions of U.S. dollars, except as noted)
September 30,
2013
December 31,
2012
$ Change % Change Explanation of the change in balance
Current assets
Cash and cash equivalents 255 658 (403) (61%) See discussion under the section "Liquidity and Capital Resources"
Accounts receivable 2,982 2,224 758 34% Increased Retail sales activities resulted in higher Retail trade and vendor rebates receivable partially offset by lower Wholesale receivables resulting from lower sales
Income taxes receivable 68 32 36 113% Increased refunds expected in Canada and the U.S.
Inventories 2,845 3,094 (249) (8%) Decreased crop nutrients and seed attributed to the domestic seasonal sales cycle where inventory is highest at year end and the third quarter is lowest after seasonal sell-through
Advance on acquisition of Viterra Inc. 764 1,792 (1,028) (57%) Glencore International plc ("Glencore") completed the sale of Viterra Inc.'s ("Viterra") minority interest in the Medicine Hat nitrogen facility to CF Industries Holdings Inc., the proceeds of which were repaid to Agrium to reduce the advance
Prepaid expenses and deposits 185 740 (555) (75%) Drawdown of prepaid inventory where typically Retail prepays for product at year end and takes possession of inventory throughout the year coupled with lower fertilizer prepayments during the year as lower market prices negate the need for prepayment at fixed prices
Other current assets 103 - 103 N/A Increase in marketable securities
Current liabilities
Short-term debt 792 1,314 (522) (40%) Repayment of short-term multi-jurisdictional facility partially offset by draws used for operations
Accounts payable 2,943 3,479 (536) (15%) Drawdown of customer prepayments during the year, where typically customers enter into prepay agreements during the fourth quarter ahead of the spring application season, offset by a combination of increased trade payables due to timing and accrued liabilities due to capital projects
Income taxes payable - 137 (137) (100%) Final payment of the 2012 Canadian taxes made in the first quarter of 2013
Current portion of long-term debt 52 518 (466) (90%) Repayment of floating rate bank loans along with South American debt that matured in the first half of 2013, partially offset by reclassifications from long-term debt
Current portion of other provisions 76 108 (32) (30%) Legacy site environmental remediation liability reclassified to non-current based on updated spending projections
Working capital 3,339 2,984 355 12%

LIQUIDITY AND CAPITAL RESOURCES

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:

Nine months ended September 30,
(millions of U.S. dollars) 2013 2012 Change
Cash provided by operating activities 543 1,097 (554 )
Cash used in investing activities (454 ) (922 ) 468
Cash (used in) provided by financing activities (470 ) 300 (770 )
Effect of exchange rate changes on cash and cash equivalents (22 ) 50 (72 )
(Decrease) increase in cash and cash equivalents (403 ) 525 (928 )

The sources and uses of cash for the nine months ended September 30, 2013 compared to the nine months ended September 30, 2012 are summarized below:

Cash provided by operating activities - Drivers behind the $554-million source of cash decrease
Use of cash $180-million decrease in consolidated net earnings.

$181-million decrease in non-cash items, resulting primarily from a change of $161-million in share-based payments coupled with an increase in deferred income taxes recovery of $40-million. This was offset by an increase in depreciation and amortization of $33-million and a decrease in earnings from associates and joint ventures of $30-million during the first nine months of 2013.

$217-million increase in non-cash working capital. The increase was primarily driven by a greater decrease in accounts payable offset by a lower increase in accounts receivable and greater decrease in prepaid expenses and deposits during the first nine months of 2013 versus the first nine months of 2012. The large decrease in payables for the year is due to the high customer prepayments payable and high capital projects accruals outstanding at the beginning of the year.
Cash used in investing activities - Drivers behind the $468-million use of cash decrease
Source of cash $932-million increase provided from the repayment of the advance to Glencore.

$21-million decrease for acquisitions due to fewer Retail tuck-in acquisitions occurring during the first nine months of 2013 versus the first nine months of 2012.

$65-million increase for proceeds received on disposal of investments.
Use of cash $407-million increase in capital expenditures primarily related to the Vanscoy potash expansion project.

$141-million increase in investments purchased.
Cash (used in) provided by financing activities - Drivers behind the $770-million use of cash increase
Source of cash On May 28, 2013, we issued $500-million of 3.5 percent debentures due June 1, 2023 and $500-million of 4.9 percent debentures due June 1, 2043.
Use of cash $886-million due to the repayment of $491-million in short-term debt during the first nine months of 2013 compared to cash provided by short-term debt of $395-million during the first nine months of 2012.

$520-million repayment of long-term debt during the first nine months of 2013.

$109-million increase in dividends paid during the first nine months of 2013 resulting from increasing the 2013 first quarter dividend to $0.50 per share from $0.225 per share in 2012. In addition, Agrium announced the declaration and payment of dividends on a quarterly basis starting in 2013, which resulted in doubling the cash outflow for the period.

$233-million increase for the purchase and cancellation of common shares under our normal course issuer bid during the first nine months of 2013.
Capital Expenditures
Nine months ended
September 30,
(millions of U.S. dollars) 2013 2012
Investing capital 856 475
Sustaining capital 391 365
Total 1,247 840
Our investing capital expenditures increased in the first nine months of 2013 compared to the first nine months of 2012 due to increased activity on the Vanscoy potash expansion project.
Short-term Debt
Our short-term debt at September 30, 2013 is summarized as follows:
(millions of U.S. dollars) Total Unutilized Utilized
Multi-jurisdictional facility expiring 2017 2,500 1,960 540
European facilities expiring 2013 353 159 194
South American facilities expiring 2013 - 2014 140 82 58
2,993 2,201 792
Outstanding letters of credit 116
Remaining capacity available 2,085

OUTSTANDING SHARE DATA

The number of Agrium's outstanding shares at October 31, 2013 was approximately 144.5 million. At October 31, 2013, the number of shares issuable pursuant to stock options outstanding (issuable assuming full exercise, where each option granted can be exercised for one common share) was approximately nil.

SELECTED QUARTERLY INFORMATION *
(millions of U.S. dollars, 2013 2013 2013 2012 2012 2012 2012 2011
except per share amounts) Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4
Sales 2,869 7,016 3,224 3,157 2,832 6,772 3,571 3,177
Gross profit 641 1,722 716 987 739 1,851 785 1,045
Net earnings from 76 747 141 354 129 860 155 327
continuing operations
Net earnings 76 747 141 354 129 860 155 193
Earnings per share from
continuing operations
-basic 0.52 5.02 0.94 2.34 0.80 5.44 0.97 2.05
-diluted 0.52 5.02 0.94 2.34 0.80 5.44 0.97 2.04
Earnings per share
-basic 0.52 5.02 0.94 2.34 0.80 5.44 0.97 1.20
-diluted 0.52 5.02 0.94 2.34 0.80 5.44 0.97 1.20

* 2012 results have been restated to reflect the adoption of IFRS 11 Joint Arrangements requiring equity accounting for joint ventures. 2011 results have not been restated.

The agricultural products business is seasonal in nature. Consequently, comparisons made on a year-over-year basis are more appropriate than quarter-over-quarter. Crop input sales are primarily concentrated in the spring and fall crop input application seasons, which are in the second quarter and fourth quarter. Crop nutrient inventories are normally accumulated leading up to each application season. Our cash collections generally occur after the application season is complete.

BUSINESS ACQUISITION

We acquired certain agri-products assets of Viterra from Glencore on October 1, 2013. The acquired assets include over 200 retail farm centers in Canada and Australia. We have engaged an independent valuation firm to assist us in determining the fair value of the assets acquired, liabilities assumed, including contingent liabilities and provisions, and related deferred income tax impacts. The valuation is in progress; however a provisional purchase price allocation is not yet available due to the inherent complexity of the valuations and the short time frame following the closing date. We expect the excess of the estimated fair value of the net assets acquired over the purchase price will result in a purchase gain in the three months ended December 31, 2013. Refer to note 4 of the Summarized Notes to the Consolidated Financial Statements for further information.

NORMAL COURSE ISSUER BID

On May 14, 2013, the Toronto Stock Exchange ("TSX") accepted Agrium's notice of intention to make a normal course issuer bid ("NCIB") whereby Agrium may purchase up to 7,472,587 common shares on the TSX and New York Stock Exchange during the period from May 21, 2013 to May 20, 2014 with a daily purchase limit of 133,301 common shares on the TSX. During the nine months ended September 30, 2013, we purchased approximately 2.7 million shares at an average share price of $87 for total consideration of approximately $233-million under our NCIB. From October 1, 2013 to October 31, 2013, we purchased approximately 2.2 million shares at an average share price of $85 for total consideration of approximately $191-million. Refer to note 10 of the Summarized Notes to the Consolidated Financial Statements for further information.

ADDITIONAL AND NON-IFRS FINANCIAL MEASURES

In the discussion of our performance for the quarter, in addition to the primary measures of earnings and earnings per share reported in accordance with IFRS, we make reference to EBITDA (earnings (loss) before finance costs, income taxes, depreciation and amortization) and Adjusted EBITDA (earnings (loss) before finance costs, income taxes, depreciation and amortization and before finance costs, income taxes, depreciation and amortization of joint ventures). We consider EBITDA and Adjusted EBITDA to be useful measures of performance because income tax jurisdictions and business segments are not synonymous and we believe that allocation of income tax charges distorts the comparability of historical performance for the different business segments. Similarly, financing and related interest charges cannot be allocated to all business units on a basis that is meaningful for comparison with other companies.

EBITDA and Adjusted EBITDA are not recognized measures under IFRS, and our method of calculation may not be comparable to other companies. In addition, these measures should not be used as alternatives to earnings before finance costs and income taxes ("EBIT") as determined in accordance with IFRS.

The following table is a reconciliation of EBITDA and Adjusted EBITDA to EBIT:

Three months ended Three months ended
September 30, 2013 September 30, 2012
(millions of U.S. dollars) Retail Wholesale AAT Other Consolidated Retail Wholesale AAT Other Consolidated
Adjusted EBITDA 147 143 (5 ) (28 ) 257 121 376 4 (157 ) 344
Equity accounted
joint ventures:
Finance costs - 7 - - 7 - 22 - - 22
and income
taxes
Depreciation and - 6 - - 6 - 6 - - 6
amortization
EBITDA 147 130 (5 ) (28 ) 244 121 348 4 (157 ) 316
Depreciation and 56 39 8 5 108 52 59 7 2 120
amortization
EBIT 91 91 (13 ) (33 ) 136 69 289 (3 ) (159 ) 196
Nine months ended Nine months ended
September 30, 2013 September 30, 2012
(millions of U.S. dollars) Retail Wholesale AAT Other Consolidated Retail Wholesale AAT Other Consolidated
Adjusted EBITDA 791 1,052 25 (53 ) 1,815 827 1,424 26 (261 ) 2,016
Equity accounted
joint ventures:
Finance costs - 21 - - 21 - 25 - - 25
and income
taxes
Depreciation and - 9 - - 9 - 11 - - 11
amortization
EBITDA 791 1,022 25 (53 ) 1,785 827 1,388 26 (261 ) 1,980
Depreciation and 166 151 22 11 350 145 142 20 10 317
amortization
EBIT 625 871 3 (64 ) 1,435 682 1,246 6 (271 ) 1,663

Supplemental Information 5, Selected Financial Measures, also provides certain ratios that are not recognized measures under IFRS and our method of calculation may not be comparable to that of other companies. Ratio definitions are provided in Supplemental Information 6, Accompanying Notes to Supplemental Information. Return on operating capital employed and return on capital employed presented in Supplemental Information 5 are measures classified as additional IFRS financial measures, where they reflect Consolidated Agrium. We consider these measures to provide useful information to both management and investors in measuring our financial performance and financial condition.

CRITICAL ACCOUNTING JUDGMENTS AND ESTIMATES

We prepare our financial statements in accordance with IFRS, which requires us to make assumptions and estimates about future events and apply significant judgments. We base our assumptions, estimates and judgments on our historical experience, current trends and all available information that we believe is relevant at the time we prepare the financial statements. However, future events and their effects cannot be determined with certainty. Accordingly, as confirming events occur, actual results could ultimately differ from our assumptions and estimates. Such differences could be material. For further information on the Company's critical accounting judgments and estimates, refer to the section "Critical Accounting Judgments and Estimates" of our 2012 annual Management's Discussion and Analysis, which is contained in our 2012 Annual Report. Since the date of our 2012 annual Management's Discussion and Analysis, there have not been any significant changes to our critical accounting judgments and estimates.

CHANGES IN ACCOUNTING POLICIES

Effective January 1, 2013, Agrium adopted IFRS 11 Joint Arrangements whereby the classification and accounting of our investment in Profertil and other joint arrangements previously accounted for using the proportionate consolidation method are accounted for using the equity method. 2012 figures have been restated and additional information has been provided in the Supplemental Information tables to display the results of our joint ventures. Adjusted EBITDA has been added to show our results before finance costs, income taxes, depreciation and amortization of our joint ventures. Refer to note 3 of the Summarized Notes to the Consolidated Financial Statements for further information.

For information regarding changes in accounting policies, refer to the section "Accounting Standards and Policy Changes Not Yet Implemented" of our 2012 annual Management's Discussion and Analysis, which is contained in our 2012 Annual Report.

BUSINESS RISKS

The information presented on Enterprise Risk Management and Key Business Risks on pages 74 - 77 in our 2012 Annual Report has not changed materially since December 31, 2012.

CONTROLS AND PROCEDURES

There have been no changes in our internal control over financial reporting during the quarter ended September 30, 2013 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 2012 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.

OUTLOOK, KEY RISKS AND UNCERTAINTIES

Global production of almost all major field crops is expected to increase in 2013/14, driven primarily by improved growing conditions in the U.S. and former Soviet Union. While official revisions to U.S. corn and soybean yields were not made in October due to the U.S. government shut-down, reports from the field indicate that yields are at or above expectations. In Western Canada, yields of almost all of the major crops are expected to break records this year. Stronger yields help offset the financial impact from lower crop prices and also increased nutrient removal, which are expected to support strong North American application rates in the 2013/14 fertilizer year. Crop nutrient costs are also more affordable than they have been over the recent past.

Strength in demand for crop protection products is expected to continue to be strong in the fourth quarter and into next spring. Growth in demand for crop protection products continues to be supported by increased use of alternative active ingredients to glyphosate in order to counter increased weed resistance to glyphosate, as well as the continued trend toward greater use of fungicides. As harvest wraps up, growers are evaluating 2013 yield results in order to make decisions on 2014 seed varieties.

Nitrogen prices have been relatively steady over the past couple of months at levels close to Chinese production costs. Nitrogen prices receive support given the Chinese urea low tax export season ended October 31, 2013 and Chinese export volumes in November and December are expected to be lower than they were in 2012. Indian urea import demand has been significantly higher than 2012 levels, driven by a favorable monsoon season. U.S. offshore urea imports were approximately 40 percent behind 2012 levels in the third quarter of 2013 while U.S. corn area is expected to decline in 2014, which may result in a 2 percent to 4 percent reduction in nitrogen demand this year. The net impact of these factors is an expectation for a higher pace of U.S. urea imports in the coming months to meet short-term demand.

The potash market has been impacted by significant market uncertainty throughout the third quarter, leading to reduced prices and cautious purchasing behavior that has extended into the fourth quarter in most international markets. Several factors contributed to the uncertainty, including the dissolution of the Belarusian Potash Company, the delay in second half Chinese supply agreements, and the timing of deliveries on Indian contract purchases. Global potash fundamentals remain challenging entering the fourth quarter of 2013 on continued elevated inventories and the expectation that the pace of Brazilian potash imports may decline given an expected reduction in the size of the second corn crop which is planted in January. The outlook for U.S. demand in the fourth quarter of 2013 is more positive as fall potash application rates are expected to be solid.

Phosphate prices declined throughout the third quarter of 2013, as buyers purchased product on a just-in-time basis and global market conditions are likely to remain under pressure in the fourth quarter. Indian demand has been a major source of uncertainty, as the devaluation of the Indian rupee and delayed government subsidy payments have been barriers to imports. While Brazilian DAP/MAP imports set a full-year record by the end of September, the pace of imports is expected to slow in the fourth quarter. However, U.S. phosphate application rates are expected to be supported by high crop yields and affordable nutrient prices.

Forward-Looking Statements

Certain statements and other information included in this MD&A constitute "forward-looking information" and "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 MD&A, 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: future crop and crop input volumes, demand, margins, prices and sales; business and financial prospects; dividends and other plans, strategies, objectives and expectations, including with respect to future operations of Agrium and proposed acquisitions and divestitures and the growth and stability of our earnings. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from such forward-looking statements.

All of the forward-looking statements are qualified by the assumptions that are stated or inherent in such forward-looking statements, including the assumptions listed below. 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 key assumptions that have been made in connection with the forward-looking statements include Agrium's ability to successfully integrate and realize the anticipated benefits of its already completed and future acquisitions, including the recently completed acquisition of the Agri-products business of Viterra.

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 economic, market and business conditions, weather conditions including impacts from regional flooding and/or drought conditions; crop prices; the supply and demand and price levels for our major products; 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, as well as counterparty and sovereign risk; 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 United States. There is a risk that the Egyptian Misr Fertilizer Production Company nitrogen facility in Egypt may not be allowed to proceed with the completion of the two new facilities. Additionally, there are risks associated with Agrium's acquisition of AWB, including litigation risk resulting from AWB having been named in litigation commenced by the Iraqi Government relating to the United Nations Oil-For-Food Programme. Furthermore, there are risks associated with our acquisition of the Agri-products business of Viterra, including: timing and costs of the associated integration of the retained Viterra business, the size and timing of expected synergies could be less favorable than anticipated; disruption from the acquisition making it more difficult to maintain relationships with customers, employees and suppliers; our efforts to integrate Viterra's business into our existing business could result in the disruption of our ongoing business 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 United States.

The purpose of our guidance for the fourth quarter of 2013 included herein 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 MD&A 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 Retail supplier of agricultural products and services in North America, South America and Australia and a leading global Wholesale producer and marketer of all three major agricultural nutrients and the premier supplier of specialty fertilizers in North America through our Advanced Technologies business unit. Agrium's strategy is to provide the crop inputs and services needed to feed a growing world. We focus on maximizing shareholder returns by driving continuous improvements to our base businesses, pursuing value-added growth opportunities across the crop input value chain and returning capital to shareholders.

A WEBSITE SIMULCAST of the 2013 3rd Quarter Conference Call will be available in a listen-only mode beginning November 6th, 2013 at 9:30 a.m. MST (11:30 a.m. EST). Please visit the following website: www.agrium.com.

AGRIUM INC.

CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED

September 30, 2013

AGRIUM INC.
Consolidated Statements of Operations
(Millions of U.S. dollars, except per share amounts)
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
2013 2012 2013 2012
Restated Restated
(note 3) (note 3)
Sales2,869 2,832 13,109 13,175
Cost of product sold2,228 2,093 10,030 9,800
Gross profit641 739 3,079 3,375
Expenses
Selling436 389 1,404 1,298
General and administrative64 143 234 402
Earnings from associates and joint ventures(11)(35)(39)(69)
Other expenses (note 5)16 46 45 81
Earnings before finance costs and income taxes136 196 1,435 1,663
Finance costs related to long-term debt26 23 69 67
Other finance costs9 7 48 26
Earnings before income taxes101 166 1,318 1,570
Income taxes25 37 354 426
Net earnings76 129 964 1,144
Attributable to:
Equity holders of Agrium76 127 966 1,140
Non-controlling interest- 2 (2)4
Net earnings76 129 964 1,144
Earnings per share attributable to equity holders of
Agrium (note 6)
Basic earnings per share0.52 0.80 6.50 7.22
Diluted earnings per share0.52 0.80 6.50 7.21
See accompanying notes.
AGRIUM INC.
Consolidated Statements of Comprehensive Income
(Millions of U.S. dollars)
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
2013 2012 2013 2012
Net earnings76 129 964 1,144
Other comprehensive income (loss)
Items that may be reclassified to earnings
Available for sale financial instruments
Losses(5)- (4)-
Foreign currency translation
Gains (losses)74 110 (169)97
Associates and joint ventures income (loss)- 1 1 (1)
69 111 (172)96
Items that will not be reclassified to earnings
Post-employment benefits
Actuarial gains (losses)48 - 48 (22)
Deferred income taxes(15)- (15)6
33 - 33 (16)
Other comprehensive income (loss)102 111 (139)80
Comprehensive income178 240 825 1,224
Attributable to:
Equity holders of Agrium178 236 827 1,219
Non-controlling interest- 4 (2)5
Comprehensive income178 240 825 1,224
See accompanying notes.
AGRIUM INC.
Consolidated Statements of Cash Flows
(Millions of U.S. dollars)
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
2013 2012 2013 2012
Restated Restated
(note 3) (note 3)
Operating
Net earnings76 129 964 1,144
Items not affecting cash
Depreciation and amortization108 120 350 317
Earnings from associates and joint ventures(11)(35)(39)(69)
Share-based payments(21)53 (35)126
Unrealized gain on derivative financial instruments(10)(3)(14)(17)
Unrealized foreign exchange (gain) loss(2)(1)2 (9)
Deferred income taxes(5)(23)(69)(29)
Other14 73 32 89
Dividends from associates and joint ventures12 - 27 3
Net changes in non-cash working capital84 (351)(675)(458)
Cash provided by (used in) operating activities245 (38)543 1,097
Investing
Acquisitions, net of cash acquired(7)(5)(56)(77)
Repayment of advance on acquisition of Viterra Inc. (note 4)- - 932 -
Capital expenditures(475)(343)(1,247)(840)
Investments in associates and joint ventures- (20)- (10)
Purchase of investments(140)(4)(148)(7)
Proceeds from disposal of investments65 - 65 -
Other(23)(3)(53)(48)
Net changes in non-cash working capital7 31 53 60
Cash used in investing activities(573)(344)(454)(922)
Financing
Short-term debt325 311 (491)395
Long-term debt issued- - 1,010 21
Transaction costs on long-term debt- (1)(14)(1)
Repayment of long-term debt(1)(6)(520)(7)
Dividends paid(75)(79)(224)(115)
Shares issued- - 2 7
Shares repurchased(171)- (233)-
Cash provided by (used in) financing activities78 225 (470)300
Effect of exchange rate changes on cash and cash equivalents11 56 (22)50
(Decrease) increase in cash and cash equivalents(239)(101)(403)525
Cash and cash equivalents - beginning of period (note 3)494 1,913 658 1,287
Cash and cash equivalents - end of period255 1,812 255 1,812
Included in operating activities
Interest paid42 42 116 98
Interest received20 30 51 65
Income taxes paid137 206 592 351
Included in investing activities
Interest paid18 8 40 17
See accompanying notes.
AGRIUM INC.
Consolidated Balance Sheets
(Millions of U.S. dollars)
(Unaudited)
September 30, December 31,
2013 2012 2012
Restated Restated
(note 3)(note 3)
Assets
Current assets
Cash and cash equivalents255 1,812 658
Accounts receivable2,982 3,009 2,224
Income taxes receivable68 67 32
Inventories2,845 2,571 3,094
Advance on acquisition of Viterra Inc. (note 4)764 - 1,792
Prepaid expenses and deposits185 261 740
Other current assets103 - -
7,202 7,720 8,540
Property, plant and equipment (note 10)4,370 3,142 3,484
Intangibles638 628 636
Goodwill2,259 2,298 2,349
Investments in associates and joint ventures614 640 627
Other assets114 54 99
Deferred income tax assets80 77 70
15,277 14,559 15,805
Liabilities and shareholders' equity
Current liabilities
Short-term debt (note 7)792 603 1,314
Accounts payable2,943 2,775 3,479
Income taxes payable- 111 137
Current portion of long-term debt (note 7)52 522 518
Current portion of other provisions76 128 108
3,863 4,139 5,556
Long-term debt (note 7)3,014 1,573 2,069
Provisions for post-employment benefits134 202 184
Other provisions423 425 413
Other liabilities60 74 79
Deferred income tax liabilities532 570 584
8,026 6,983 8,885
Shareholders' equity
Share capital1,858 2,001 1,890
Retained earnings5,493 5,465 4,955
Accumulated other comprehensive (loss) income (note 9)(101)105 71
Equity holders of Agrium7,250 7,571 6,916
Non-controlling interest1 5 4
Total equity7,251 7,576 6,920
15,277 14,559 15,805
See accompanying notes.
AGRIUM INC.
Consolidated Statements of Shareholders' Equity
(Millions of U.S. dollars, except share data)
(Unaudited)
Accumulated
Millions other
of comprehensive Equity Non-
common Share Retained income (loss)holders of controlling Total
shares capital earnings (note 9)Agrium interest equity
December 31, 2011158 1,994 4,420 10 6,424 4 6,428
Net earnings- - 1,140 - 1,140 4 1,144
Other comprehensive (loss) income, net of tax
Post-employment benefits- - (16)- (16)- (16)
Foreign currency translation- - - 96 96 1 97
Associates and joint ventures- - - (1)(1)- (1)
Comprehensive income, net of tax- - 1,124 95 1,219 5 1,224
Dividends- - (79)- (79)- (79)
Non-controlling interest transactions- - - - - (4)(4)
Share-based payment transactions- 7 - - 7 - 7
September 30, 2012158 2,001 5,465 105 7,571 5 7,576
December 31, 2012149 1,890 4,955 71 6,916 4 6,920
Net earnings (loss)- - 966 - 966 (2)964
Other comprehensive (loss) income, net of tax
Available for sale financial instruments- - - (4)(4)- (4)
Post-employment benefits- - 33 - 33 - 33
Foreign currency translation- - - (169)(169)- (169)
Associates and joint ventures- - - 1 1 - 1
Comprehensive income, net of tax- - 999 (172)827 (2)825
Dividends- - (259)- (259)- (259)
Non-controlling interest transactions- - (3)- (3)(1)(4)
Shares repurchased(2)(34)(199)- (233)- (233)
Share-based payment transactions- 2 - - 2 - 2
September 30, 2013147 1,858 5,493 (101)7,250 1 7,251
See accompanying notes.

AGRIUM INC.

Summarized Notes to the Consolidated Financial Statements

For the nine months ended September 30, 2013

(Millions of U.S. dollars, except per share amounts)

(Unaudited)

1. Corporate Information

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 operations globally from our Wholesale head office in Calgary, and our Retail and Advanced Technologies head offices in Loveland, Colorado, United States.

Agrium (with its subsidiaries) operates three strategic business units:

  • Retail operates in North and South America and Australia, and sells crop nutrients, crop protection products, seed and services directly to growers.
  • Wholesale operates in North and South America and Europe, and produces, markets and distributes three primary groups of crop nutrients: nitrogen, potash and phosphate for agricultural and industrial customers around the world.
  • Advanced Technologies ("AAT") produces and markets controlled-release crop nutrients and micronutrients in the broad-based agriculture, specialty agriculture, professional turf, horticulture, and consumer lawn and garden markets.

Basis of preparation and statement of compliance

These consolidated interim financial statements ("interim financial statements") were approved for issuance by the Audit Committee on November 5, 2013. We prepared these interim financial statements in accordance with International Financial Reporting Standards applicable to the preparation of interim financial statements as issued by the International Accounting Standards Board, including International Accounting Standard 34 Interim Financial Reporting. They 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 2012 Annual Report, available at www.agrium.com.

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

2. Significant Accounting Policies

Except as described below, the accounting policies applied in this consolidated interim financial report are the same as those applied by Agrium in our 2012 Annual Report. The following changes in accounting policies will be reflected in our 2013 Annual Report.

Standard/
Interpretation
Description Date and method of adoption Impact
IFRS 9 Financial Instruments replaces previous guidance on the classification and measurement of financial assets, which will be classified on initial recognition at either amortized cost or fair value, with gains and losses on remeasurement recognized in earnings, except for recognition in other comprehensive income on election for equity instruments that are not held for trading. The new guidance also revises standards for financial liabilities under the fair value option and for derivatives linked to unquoted equity instruments. The effective date has been deferred indefinitely. We are studying the impact of early adoption as permitted by the standard on a retrospective basis. We expect that initial adoption will have an impact on our financial statements, since it will be adopted retrospectively; however, we are not able to reasonably estimate the impact at this time.
IFRS 10 Consolidated Financial Statements implements a single model based on control for the preparation and presentation of financial statements. It introduces a new definition of control, requiring power over the investee; exposure, or rights, to variable returns from involvement with the investee; and the ability to use power over the investee to affect the amount of returns. This model also applies to investments in associates (IAS 28). January 1, 2013; retrospectively There has been no material impact on adoption.
IFRS 11 Joint Arrangements requires us as a party to a joint arrangement to recognize our rights and obligations arising from the arrangement. Our joint arrangements under IFRS 11 will be classified as joint ventures, requiring equity accounting. January 1, 2013; in accordance with IFRS 11 See note 3 for impact on adoption.
IFRS 12 Disclosure of Interests in Other Entities will require us to disclose information that allows users to evaluate the nature, impact of and risks associated with our interests in joint arrangements, associates and other entities. January 1, 2013 We will add disclosures about our interests in other entities on adoption in our annual financial statements.
IFRS 13 Fair Value Measurement provides a single set of requirements to be applied to all fair value measurements, replacing the existing guidance dispersed across many standards. It provides a definition of fair value as a market-based measurement, along with enhanced disclosures about fair value measurements. January 1, 2013; prospectively There has been no material impact on adoption.
IAS 19 Employee Benefits provides users with a clearer picture of the commitments resulting from defined benefit plans (DBPs) by eliminating the corridor approach, requiring presentation of gains and losses related to DBPs in other comprehensive income, and adding enhanced disclosure requirements. January 1, 2013;
retrospectively
We eliminated the corridor approach on adoption of IFRS. The balance of requirements have been adopted in 2013 with no material impact. We will provide new disclosures required by IAS 19 in our annual financial statements.
IFRS 7 Offsetting Financial Assets and Liabilities contains new disclosure requirements for amounts offset or subject to master netting arrangements. January 1, 2013 There has been no material impact on adoption.
IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine establishes when the costs incurred to remove mine waste materials to gain access to mineral ore deposits during the production phase of a surface mine should lead to the recognition of an asset, and how that asset should be measured. January 1, 2013 There has been no material impact on adoption.

3. Impact of Application of IFRS 11

Upon the application of IFRS 11, effective January 1, 2013 and with retrospective application to January 1, 2012, we reviewed and assessed the legal form and terms of contracts of our investments in joint arrangements. The application of IFRS 11 has changed the classification and subsequent accounting of our investment in Profertil S.A. and other joint arrangements, previously accounted for using the proportionate consolidation method. Under IFRS 11, Profertil S.A. and other joint arrangements are classified as joint ventures and our interest is accounted for using the equity method.

Three months Nine months
ended ended
Impact of IFRS 11 on net earningsSeptember 30, September 30,
2012 2012
Decrease in sales(130)(250)
Decrease in cost of product sold(71)(157)
Decrease in gross profit(59)(93)
Decrease in selling and general and administrative expenses(2)(8)
Decrease in other expenses- (1)
Decrease in other finance costs(2)(3)
Decrease in income taxes(20)(22)
Increase in earnings from associates and joint ventures(35)(59)
Impact on net earnings- -
Impact of IFRS 11 on assets and liabilitiesSeptember 30, 2012 December 31, 2012
As As
previously As previously As
reported Adjustments restated reported Adjustments restated
Current assets7,901 (181)7,720 8,712 (172)8,540
Property, plant and equipment3,354 (212)3,142 3,698 (214)3,484
Investments in associates and joint ventures414 226 640 382 245 627
Other assets55 (1)54 130 (31)99
Current liabilities4,237 (98)4,139 5,647 (91)5,556
Long-term debt1,607 (34)1,573 2,115 (46)2,069
Other liabilities75 (1)74 80 (1)79
Deferred income tax liabilities605 (35)570 618 (34)584
Cash and cash equivalents1,864 (52)1,812 726 (68)658
Three months Nine months
ended ended
Impact of IFRS 11 on cash flowsSeptember 30, September 30,
2012 2012
Decrease in cash provided by operating activities(53)(38)
Decrease in cash used in investing activities8 26
Increase in cash provided by financing activities26 19

4. Business Acquisition

We acquired certain agri-products assets of Viterra Inc. ("Viterra") from Glencore International plc ("Glencore") on October 1, 2013. The acquired assets include over 200 retail farm centers in Canada and Australia.

We will allocate the majority of assets acquired and liabilities assumed to the Retail business unit. Benefits of the acquisition include expansion of geographical coverage for the sale of crop inputs in Canada, acquisition of a significant customer base and talented workforce, the value of synergies between Agrium and Viterra, and cost savings opportunities.

We have engaged an independent valuation firm to assist us in determining the fair value of the assets acquired, liabilities assumed, including contingent liabilities and provisions, and related deferred income tax impacts. The valuation is in progress; however a provisional purchase price allocation is not yet available due to the inherent complexity of the valuations and the short time frame following the closing date.

We expect the excess of the estimated fair value of the net assets acquired over the purchase price will result in a bargain purchase gain in the three months ending December 31, 2013. We believe that a bargain purchase gain is likely considering the circumstances surrounding the acquisition, including: the motivation of other parties to the transaction to announce the agreement without delay; and Glencore's intention to divest of assets that were not strategic to its operations with a "made in Canada" solution that included favorable terms to us because of our immediate and direct ability to integrate, control, manage and obtain synergies from the acquired assets compared to other bidders due to our unique vertically integrated operating strategy. Before finalizing our estimates of fair values and concluding that a bargain purchase gain is appropriate, we will complete a rigorous review of the assets acquired and liabilities assumed to determine if we should recognize any additional assets or liabilities. We will also review IFRS 3 Business Combinations when determining the measurement of identifiable assets acquired and liabilities assumed at the acquisition date.

Acquisition-related costs of $9-million were recorded in other expenses during the nine months ended September 30, 2013 (2012 - $4-million).

The purchase price and other adjustments will be recorded as a reduction of the advance on acquisition of Viterra Inc.

5. Other Expenses
Three months ended Nine months ended
Other expensesSeptember 30, September 30,
2013 2012 2013 2012
Restated Restated
(note 3) (note 3)
Realized loss (gain) on derivative financial instruments12 2 (2)26
Unrealized gain on derivative financial instruments(10)(3)(14)(17)
Interest income(20)(30)(51)(65)
Foreign exchange loss1 3 27 14
Environmental remediation and asset retirement obligations1 66 5 78
Bad debt (recovery) expense(6)6 20 30
Potash profit and capital tax3 - 15 13
Other35 2 45 2
16 46 45 81
6. Earnings per Share
Attributable to equity holdersThree months ended Nine months ended
of AgriumSeptember 30, September 30,
2013 2012 2013 2012
Numerator
Net earnings for the period76 127 966 1,140
Denominator (millions)
Weighted average number of shares outstanding for basic and diluted earnings per share147 158 149 158
7. Debt
September 30, December 31,
2013 2012
Restated
(note 3)
Total Unutilized Utilized Utilized
Short-term debt
Multi-jurisdictional facility expiring 20172,500 1,960 540 1,100
European facilities expiring 2013353 159 194 192
South American facilities expiring 2013 - 2014140 82 58 22
2,993 2,201 792 1,314
Outstanding letters of credit 116
Remaining capacity available 2,085
September 30, December 31,
2013 2012
Restated
(note 3)
Long-term debt
Floating rate bank loans due 2014 - 201556 106
Floating rate bank loans due 2013- 460
7.7% debentures due 2017100 100
6.75% debentures due 2019500 500
3.15% debentures due 2022500 500
3.5% debentures due 2023500 -
7.8% debentures due 2027125 125
7.125% debentures due 2036300 300
6.125% debentures due 2041500 500
4.9% debentures due 2043500 -
Other21 21
3,102 2,612
Unamortized transaction costs(36)(25)
Current portion of long-term debt(52)(518)
3,014 2,069

In April 2013, we increased the total capacity available under our multi-jurisdictional facility from $1.6-billion to $2.5-billion and extended the term by one year to 2017.

On May 28, 2013, we issued $500-million of 3.5 percent debentures due June 1, 2023 and $500-million of 4.9 percent debentures due June 1, 2043.

Our base shelf prospectus permits up to an additional $1.0-billion of common shares, preferred shares, subscription receipts, debt securities or units until April 2014. Issuance of further securities under the base shelf prospectus requires filing a prospectus supplement and is subject to availability of funding in capital markets.

8. Financial Instruments
Fair value of financial instrumentsLevel 1 Level 2 Total
September 30, 2013
Fair value through profit or loss
Cash and cash equivalents255 - 255
Foreign exchange derivative financial instruments(3)- (3)
Gas and power derivative financial instruments1 1 2
Available for sale116 - 116
September 30, 2012
Fair value through profit or loss
Cash and cash equivalents1,812 - 1,812
Gas and power derivative financial instruments(20)8 (12)
Available for sale33 - 33
December 31, 2012
Fair value through profit or loss
Cash and cash equivalents658 - 658
Foreign exchange derivative financial instruments- 4 4
Gas and power derivative financial instruments(15)- (15)
Available for sale40 - 40

We determine fair value for financial instruments classified as Level 1 using independent quoted market prices for identical instruments in active markets. Fair value for financial instruments classified as Level 2 is estimated using quoted prices for similar instruments in active markets or prices for identical or similar instruments in markets that are not active, or using valuation techniques that are based on industry-accepted third-party models, which make maximum use of market-based inputs.

We determine the fair value of foreign exchange derivative contracts using the income approach. We determine the fair value of gas and power derivative contracts using the market approach. Inputs to fair value determinations include, but are not limited to, current spot prices and forward pricing curves for natural gas and power, current published interest rates and foreign currency exchange rates, market volatility, our own credit risk and counterparty credit risk.

We monitor the availability of observable market data to assess the appropriate classification of financial instruments within the fair value hierarchy. Changes in economic conditions or market liquidity generally drive changes in availability of observable market data. Changes in availability of observable market data, which also may result in changing the valuation technique used, are generally the cause of transfers between Level 1, Level 2 and Level 3. There have been no transfers between Level 1 and Level 2 fair value measurements in the reporting period ended September 30, 2013 (September 30, 2012 - no transfers). We do not measure any of our financial instruments using Level 3 inputs.

Fair value and carrying value of long-term debtSeptember 30, 2013
Carrying
Fair value value
Long-term debt
Debentures - amortized cost3,145 3,025
Floating rate debt - amortized cost77 77
3,222 3,102

Fair value of long-term debt is determined based on comparable debt instruments. Carrying value of floating rate debt and all other financial instruments approximates fair value due to the short-term nature of the instruments.

9. Accumulated Other Comprehensive Income
Available for
sale financial
Foreign
currency
Associates and Total accumulated
other comprehensive
instruments translation joint ventures income (loss)
December 31, 2011(1)11 - 10
Gains (losses)- 96 (1)95
September 30, 2012(1)107 (1)105
December 31, 2012- 74 (3)71
(Losses) gains(4)(169)1 (172)
September 30, 2013(4)(95)(2)(101)

10. Additional Information

Property, plant and equipment

During the nine months ended September 30, 2013, we added $804-million to assets under construction at our Vanscoy Potash facility.

Dividends
September 30,
2013
Declared
EffectivePer share Total Paid to Shareholders Total
December 14, 20120.50 NA January 17, 2013 75
February 22, 20130.50 75 April 18, 2013 74
April 9, 20130.50 74 July 18, 2013 75
September 23, 20130.75 110 October 17, 2013 NA

Share capital

During the nine months ended September 30, 2013, we granted to officers and employees 395,759 Tandem Stock Appreciation Rights with a grant price of $101.13 and 193,511 Performance Share Units.

Our authorized share capital consists of unlimited common shares without par value and unlimited preferred shares.

Normal Course Issuer Bid

During the nine months ended September 30, 2013, we purchased two million shares at an average share price of $87 for total consideration of $233-million under our Normal Course Issuer Bid ("NCIB"). From October 1, 2013 to October 31, 2013, we purchased two million shares at an average share price of $85 for total consideration of $191-million. Under the NCIB, we may purchase for cancellation up to 5 percent of our currently issued and outstanding common shares until May 20, 2014. 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.

11. Operating Segments
Three months ended Nine months ended
September 30, September 30,
2013 2012 2013 2012
Restated Restated
(note 3) (note 3)
Sales
Retail
Crop nutrients654 634 3,941 4,028
Crop protection products1,059 872 3,693 3,433
Seed69 56 1,163 1,084
Merchandise122 105 384 392
Services and other205 167 630 567
2,109 1,834 9,811 9,504
Wholesale
Nitrogen286 424 1,309 1,468
Potash93 80 457 465
Phosphate122 183 495 596
Product purchased for resale210 254 891 1,037
Ammonium sulfate and other41 45 224 219
752 986 3,376 3,785
Advanced Technologies108 125 448 438
Other(100)(113)(526)(552)
2,869 2,832 13,109 13,175
Inter-segment sales
Retail3 3 14 18
Wholesale87 100 475 475
Advanced Technologies10 10 37 59
100 113 526 552
Net earnings
Retail91 69 625 682
Wholesale91 289 871 1,246
Advanced Technologies(13)(3)3 6
Other(33)(159)(64)(271)
Earnings before finance costs and income taxes136 196 1,435 1,663
Finance costs related to long-term debt26 23 69 67
Other finance costs9 7 48 26
Earnings before income taxes101 166 1,318 1,570
Income taxes25 37 354 426
Net earnings76 129 964 1,144
September 30, December 31,
2013 2012
Restated
(note 3)
Total assets
Retail8,375 8,338
Wholesale5,116 4,262
Advanced Technologies453 545
Other1,333 2,660
15,277 15,805
AGRIUM INC.
Supplemental Information 1a
Results by Segment
(Millions of U.S. dollars)
(Unaudited)
Three months ended September 30,
2013
Advanced
Retail Wholesale Technologies Other Total
Sales- external2,106 665 98 - 2,869
- inter-segment3 87 10 (100)-
Total sales2,109 752 108 (100)2,869
Cost of product sold1,598 629 96 (95)2,228
Gross profit511 123 12 (5)641
Gross profit (%)24 16 11 22
Selling416 10 14 (4)436
General and administrative29 13 11 11 64
Earnings from associates and joint ventures(3)(8)- - (11)
Other (income) expenses(22)17 - 21 16
EBIT (1)91 91 (13)(33)136
EBITDA (2)147 130 (5)(28)244
Adjusted EBITDA(2)147 143 (5)(28)257
Three months ended September 30,
2012 (3)
Advanced
Retail Wholesale Technologies Other Total
Sales- external1,831 886 115 - 2,832
- inter-segment3 100 10 (113)-
Total sales1,834 986 125 (113)2,832
Cost of product sold1,396 687 97 (87)2,093
Gross profit438 299 28 (26)739
Gross profit (%)24 30 22 26
Selling368 9 14 (2)389
General and administrative26 11 12 94 143
(Earnings) loss from associates and joint ventures(3)(33)- 1 (35)
Other (income) expenses(22)23 5 40 46
EBIT (1)69 289 (3)(159)196
EBITDA (2)121 348 4 (157)316
Adjusted EBITDA(2)121 376 4 (157)344
(1)Earnings (loss) before finance costs and income taxes.
(2)Certain measures presented in this table are not recognized measures under IFRS and our method of calculation may not be directly comparable to similar measures presented by other companies. We believe these supplemental non-IFRS measures provide useful information to management, investors and securities analysts in measuring our operating and financial performance and facilitating comparison from period to period as well as to peers and industry averages. Refer to Supplemental Information 6 for further explanations.
(3)Restated for the application of IFRS 11 Joint Arrangements requiring equity accounting for joint ventures.
AGRIUM INC.
Supplemental Information 1b
Results by Segment
(Millions of U.S. dollars)
(Unaudited)
Nine months ended September 30,
2013
Advanced
Retail Wholesale Technologies Other Total
Sales- external9,797 2,901 411 - 13,109
- inter-segment14 475 37 (526)-
Total sales9,811 3,376 448 (526)13,109
Cost of product sold7,782 2,439 371 (562)10,030
Gross profit2,029 937 77 36 3,079
Gross profit (%)21 28 17 23
Selling1,343 28 42 (9)1,404
General and administrative85 50 34 65 234
(Earnings) loss from associates and joint ventures(7)(34)1 1 (39)
Other (income) expenses(17)22 (3)43 45
EBIT (1)625 871 3 (64)1,435
EBITDA (2)791 1,022 25 (53)1,785
Adjusted EBITDA(2)791 1,052 25 (53)1,815
Nine months ended September 30,
2012 (3)
Advanced
Retail Wholesale Technologies Other Total
Sales- external9,486 3,310 379 - 13,175
- inter-segment18 475 59 (552)-
Total sales9,504 3,785 438 (552)13,175
Cost of product sold7,535 2,488 353 (576)9,800
Gross profit1,969 1,297 85 24 3,375
Gross profit (%)21 34 19 26
Selling1,238 27 41 (8)1,298
General and administrative89 32 36 245 402
Earnings from associates and joint ventures(7)(60)(2)- (69)
Other (income) expenses(33)52 4 58 81
EBIT (1)682 1,246 6 (271)1,663
EBITDA (2)827 1,388 26 (261)1,980
Adjusted EBITDA(2)827 1,424 26 (261)2,016
(1)Earnings (loss) before finance costs and income taxes.
(2)Certain measures presented in this table are not recognized measures under IFRS and our method of calculation may not be directly comparable to similar measures presented by other companies. We believe these supplemental non-IFRS measures provide useful information to management, investors and securities analysts in measuring our operating and financial performance and facilitating comparison from period to period as well as to peers and industry averages. Refer to Supplemental Information 6 for further explanations.
(3)Restated for the application of IFRS 11 Joint Arrangements requiring equity accounting for joint ventures.
AGRIUM INC.
Supplemental Information 2
Product Lines
(Millions of U.S. dollars)
(Unaudited)
Three months ended September 30, Nine months ended September 30,
2013 2012 (3) 2013 2012 (3)
Cost of Cost of Cost of Cost of
product Gross product Gross product Gross product Gross
Sales sold (1)profit Sales sold (1)profit Sales sold (1)profit Sales sold (1)profit
Retail (2)
Crop nutrients654 538 116 634 523 111 3,941 3,280 661 4,028 3,362 666
Crop protection products1,059 811 248 872 670 202 3,693 2,911 782 3,433 2,708 725
Seed69 39 30 56 28 28 1,163 949 214 1,084 887 197
Merchandise122 103 19 105 88 17 384 320 64 392 320 72
Services and other205 107 98 167 87 80 630 322 308 567 258 309
2,109 1,598 511 1,834 1,396 438 9,811 7,782 2,029 9,504 7,535 1,969
Wholesale
Nitrogen286 210 76 424 209 215 1,309 766 543 1,468 686 782
Potash93 66 27 80 57 23 457 226 231 465 202 263
Phosphate122 115 7 183 136 47 495 424 71 596 444 152
Product purchased for resale210 209 1 254 257 (3)891 876 15 1,037 1,014 23
Ammonium sulfate and other41 29 12 45 28 17 224 147 77 219 142 77
752 629 123 986 687 299 3,376 2,439 937 3,785 2,488 1,297
Advanced Technologies
Turf and ornamental74 63 11 67 57 10 252 208 44 251 210 41
Agriculture34 33 1 58 40 18 196 163 33 187 143 44
108 96 12 125 97 28 448 371 77 438 353 85
Other inter-segment eliminations(100)(95)(5)(113)(87)(26)(526)(562)36 (552)(576)24
Total2,869 2,228 641 2,832 2,093 739 13,109 10,030 3,079 13,175 9,800 3,375
Wholesale equity accounted joint
ventures:
Nitrogen73 64 9 124 68 56 162 124 38 207 120 87
Product purchased for resale21 19 2 27 24 3 84 79 5 74 68 6
94 83 11 151 92 59 246 203 43 281 188 93
Total Wholesale including equity accounted joint ventures846 712 134 1,137 779 358 3,622 2,642 980 4,066 2,676 1,390
(1)Includes depreciation and amortization.
(2)International Retail sales were $582-million (2012 - $602-million) and gross profit was $111-million (2012 - $114-million) for the three months ended September 30. International Retail sales were $2,059-million (2012 - $2,001-million) and gross profit was $341-million (2012 - $353-million) for the nine months ended September 30.
(3)Restated for the application of IFRS 11 Joint Arrangements requiring equity accounting for joint ventures.
AGRIUM INC.
Supplemental Information 3a
Selected Volumes and Sales Prices
(Unaudited)
Three months ended September 30,
2013 2012 (1)
Cost of Cost of
Sales Selling product Sales Selling product
tonnes price sold Margin tonnes price sold Margin
(000's)($/tonne)($/tonne)($/tonne)(000's)($/tonne)($/tonne)($/tonne)
Retail
Crop nutrients
Domestic754 589 677 612
International411 511 349 634
Total crop nutrients1,165 561 461 100 1,026 619 509 110
Wholesale
Nitrogen
Domestic
Ammonia224 543 214 560
Urea234 441 391 574
Other178 346 214 372
Total nitrogen636 450 331 119 819 517 255 262
Potash
Domestic181 395 117 564
International84 251 43 333
Total potash265 349 246 103 160 503 363 140
Phosphate192 633 595 38 260 703 519 184
Product purchased for resale566 372 371 1 650 390 395 (5)
Ammonium sulfate77 333 196 137 73 393 200 193
Other33 32
Total Wholesale1,769 425 355 70 1,994 494 344 150
Wholesale equity accounted joint ventures:
Nitrogen
International172 422 369 53 241 517 284 233
Product purchased for resale55 382 344 38 64 432 376 56
227 412 362 50 305 496 302 194
Total Wholesale including equity accounted joint ventures1,996 424 357 67 2,299 495 339 156
(1)Restated for the application of IFRS 11 Joint Arrangements requiring equity accounting for joint ventures.
AGRIUM INC.
Supplemental Information 3b
Selected Volumes and Sales Prices
(Unaudited)
Nine months ended September 30,
2013 2012 (1)
Cost of Cost of
Sales Selling product Sales Selling product
tonnes price sold Margin tonnes price sold Margin
(000's)($/tonne)($/tonne)($/tonne)(000's)($/tonne)($/tonne)($/tonne)
Retail
Crop nutrients
Domestic5,222 605 5,267 625
International1,442 544 1,208 612
Total crop nutrients6,664 591 492 99 6,475 622 519 103
Wholesale
Nitrogen
Domestic
Ammonia836 657 860 608
Urea933 519 1,080 590
Other716 385 823 375
Total nitrogen2,485 527 309 218 2,763 531 248 283
Potash
Domestic622 449 564 553
International565 314 387 395
Total potash1,187 385 190 195 951 489 213 276
Phosphate741 668 572 96 816 730 543 187
Product purchased for resale2,039 437 430 7 2,284 454 444 10
Ammonium sulfate247 410 195 215 244 420 214 206
Other242 230
Total Wholesale6,941 486 351 135 7,288 519 341 178
Wholesale equity accounted joint ventures:
Nitrogen
International360 449 343 106 399 519 301 218
Product purchased for resale218 385 362 23 185 401 367 34
578 425 350 75 584 481 322 159
Total Wholesale including equity accounted joint ventures
7,519

482

352

130

7,872

517

340

177
(1)Restated for the application of IFRS 11 Joint Arrangements requiring equity accounting for joint ventures.
AGRIUM INC.
Supplemental Information 4
Depreciation and Amortization
(Millions of U.S. dollars)
(Unaudited)
Three months ended September 30,
2013 2012 (1)
Cost of General Cost of General
product and product and
sold Selling administrative Total sold Selling administrative Total
Retail1 53 2 56 1 47 4 52
Wholesale
Nitrogen16 13
Potash11 11
Phosphate10 29
Product purchased for resale1 -
Ammonium sulfate and other1 2
39 - - 39 55 - 4 59
Advanced Technologies5 - 3 8 4 - 3 7
Other- - 5 5 - - 2 2
Total45 53 10 108 60 47 13 120
Nine months ended September 30,
2013 2012 (1)
Cost of General Cost of General
product and product and
sold Selling administrative Total sold Selling administrative Total
Retail4 154 8 166 4 125 16 145
Wholesale
Nitrogen52 46
Potash39 30
Phosphate41 56
Product purchased for resale1 1
Ammonium sulfate and other4 4
137 - 14 151 137 - 5 142
Advanced Technologies13 - 9 22 11 - 9 20
Other- - 11 11 - - 10 10
Total154 154 42 350 152 125 40 317
(1)Restated for the application of IFRS 11 Joint Arrangements requiring equity accounting for joint ventures.
AGRIUM INC.
Supplemental Information 5 (1)
Selected Financial Measures
(Millions of U.S. dollars, unless stated otherwise)
(Unaudited)
Rolling four quarters ended September 30,
2013 2012
Retail Consolidated Agrium Retail Consolidated Agrium (2)
Return on operating capital employed (%)16 19 17 26
Return on capital employed (%)8 14 9 17
Average non-cash working capital to sales (%)20 17 20 16
Operating coverage ratio (%)72 52 70 52
EBITDA to sales (%)8 15 8 16
September 30,
2013 2012
Retail Consolidated Agrium Retail Consolidated Agrium (2)
Non-cash working capital2,720 3,061 2,688 2,894
Domestic measuresRolling four quarters ended September 30,
2013 2012
Retail Retail
Return on operating capital employed (%)21 22
Return on capital employed (%)11 11
EBITDA to sales (%)9 9
(1)Certain measures presented in this table are not recognized measures under IFRS and our method of calculation may not be directly comparable to similar measures presented by other companies. We believe these supplemental non-IFRS measures provide useful information to management, investors and securities analysts in measuring our operating and financial performance and facilitating comparison from period to period as well as to peers and industry averages. Refer to Supplemental Information 6 for further explanations.
(2)Restated for the application of IFRS 11 Joint Arrangements requiring equity accounting for joint ventures.
AGRIUM INC.
Supplemental Information 6
Accompanying Notes to Supplemental Information
IFRS Financial Measure Definition
Average non-cash working capital to sales (1) Rolling four quarter average non-cash working capital divided by sales.
Operating coverage ratio (1) Selling, general and administrative expenses, earnings from associates and joint ventures and other expenses, divided by gross profit.
Non-cash working capital (1) Current assets less current liabilities, excluding cash and cash equivalents, advance on acquisition of Viterra Inc., other current assets, short-term debt, current portion of long-term debt and current assets and liabilities of discontinued operations.
Definition Usefulness of Additional or Non-IFRS Financial Measure
Additional IFRS Financial Measure (As defined in Canadian Securities Administrators' Staff Notice 52-306 (Revised))
Return on operating capital employed(1) Last 12 months' EBIT less income taxes at a tax rate of 27 percent (2012 - 28 percent) divided by rolling four quarter average operating capital employed. Operating capital employed includes non-cash working capital, property, plant and equipment, investments in associates and joint ventures and other assets. Used to measure operating performance and efficiency of our capital allocation process.
Return on capital employed(1) Last 12 months' EBIT less income taxes at a tax rate of 27 percent (2012 - 28 percent) divided by rolling four quarter average capital employed. Capital employed includes operating capital employed, intangibles and goodwill. Used to measure operating performance and efficiency of our capital allocation process.
Non-IFRS Financial Measure
EBITDA to sales Earnings (loss) before finance costs, income taxes, depreciation and amortization divided by sales. Used to measure operating performance earnings and cash flow we generate from each dollar of sales.
EBITDA Earnings (loss) before finance costs, income taxes, depreciation and amortization. Used to measure operating performance.
Adjusted EBITDA Earnings (loss) before finance costs, income taxes, depreciation and amortization and before finance costs, income taxes, depreciation and amortization of joint ventures. Used to measure operating performance.
(1)These measures are IFRS measures or additional IFRS measures when calculated using information included in our consolidated financial statements. They are classified as non-IFRS measures when calculated using information from our Retail segment because the specific components are not included in our financial statements or notes.

Contact Information

  • Agrium Inc.
    Richard Downey
    Vice President, Investor & Corporate Relations
    (403) 225-7357

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

    Agrium Inc.
    Louis Brown
    Analyst, Investor Relations
    (403) 225-7761
    www.agrium.com