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Agrium's First Quarter Affected by Delayed Start to U.S. Spring Season; Announces Dividend Increase of 12 Percent

2015-05-05 19:41 ET - News Release

CALGARY, ALBERTA -- (Marketwired) -- 05/05/15

ALL AMOUNTS ARE STATED IN U.S.$

Agrium Inc. (TSX:AGU) (NYSE:AGU) announced today its 2015 first quarter earnings results, with net earnings of $14-million ($0.08 diluted earnings per share) this quarter compared to $3-million ($0.02 diluted earnings per share) in the first quarter of 2014. The higher earnings were supported by strong margins and operating rates for nitrogen products in Wholesale, while some first quarter Retail earnings were pushed into the second quarter as a result of the delayed start to the spring season in the U.S. this year.

Highlights:


--  First quarter adjusted net earnings of $19-million or $0.12 per share(1)
    (see page 2 for adjusted net earnings reconciliation) 
--  Strong nitrogen performance contributed to Wholesale gross profit of
    $234-million compared to $171-million in Q1 2014 
--  Retail gross profit of $371-million compared to $387-million in Q1 2014,
    impacted by slow start to U.S. spring season, shifts earnings into Q2 
--  Announced a 12 percent increase to dividend, now $3.50 per share on an
    annualized basis 
--  Repurchased $75-million or approximately 712,000 shares since the
    beginning of April  
--  First half guidance range of $4.75 to $5.25 diluted earnings per share
    and updated 2015 annual guidance range narrowed to $7.00 to $8.25
    diluted earnings per share 

Agrium's Board of Directors also announced today it has approved an increase to Agrium's dividend by 12 percent, or $0.38 U.S. per common share to a total dividend of $3.50 U.S. per common share on an annualized basis. Based on the closing price of Agrium's shares on the NYSE on Tuesday, May 5, 2015, this represents a dividend yield of 3.4 percent. The increased dividend is expected to be paid in quarterly installments of $0.875 U.S. and the next $0.875 U.S. per common share dividend has been declared by the Board of Directors and will be paid on July 16, 2015 to shareholders of record on June 30, 2015.(2)

"Agrium's first quarter results were impacted by a late start to the spring season in the U.S. this year. All indications are that Agrium will deliver strong second quarter results on solid crop input demand now that the spring application season is fully underway and given we have made excellent progress ramping up production from our expanded potash facility over the past month. We continue to position our operations and asset mix to support higher cash flow and capital returns over time irrespective of any short term headwinds. The increase in the dividend and recent share buy-back activity demonstrates our commitment to this strategy and to our shareholders," commented Chuck Magro, Agrium's President and CEO.


(1) First quarter effective tax rate of 26 percent used for adjusted net    
    earnings and per share calculation. 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 non-qualifying derivative hedges. 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) All dividends paid by Agrium Inc. are, pursuant to subsection 89(14) of 
    the Income Tax Act, designated as eligible dividends. An eligible       
    dividend paid to a Canadian resident is entitled to an enhanced gross-up
    and dividend tax credit.                                                

ADJUSTED NET EARNINGS RECONCILIATION


                                                Net earnings                
                                      Expense         impact                
                                     (income)     (post-tax)   Per share(1) 
                               (USD Millions) (USD Millions)    (USD/share) 
----------------------------------------------------------------------------
                                                          14           0.08 
----------------------------------------------------------------------------
Adjustments                                                                 
----------------------------------------------------------------------------
  Share-based payments expense             45             33           0.23 
----------------------------------------------------------------------------
  Gain on sale of Purchase for                                              
   Resale assets                          (38)           (28)         (0.19)
----------------------------------------------------------------------------
  Gain on derivatives net of                                                
   foreign exchange                        (1)                              
----------------------------------------------------------------------------
Adjusted net earnings(2)                                  19           0.12 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

UPDATED 2015 ANNUAL GUIDANCE

Based on our Market Outlook, Agrium expects to achieve annual diluted earnings per share of $7.00 to $8.25 in 2015 compared to our previous estimate of $7.00 to $8.50 per share. We have narrowed the guidance range primarily based on the impact of higher Chinese urea exports on global urea prices, margin pressure on seed sales and the expected impact on crop input expenditures associated with a reduction in U.S. corn acres this year. We are issuing earnings guidance of $4.75 to $5.25 diluted earnings per share for the first half of 2015 indicative of a strong spring season despite earlier weather related delays.

We have reduced our estimate of nitrogen production tonnes to reflect our plan to dispose of our West Sacramento upgrade facility announced subsequent to March 31, 2015. Our estimate is now 3.5 million to 3.7 million tonnes for the year as all other facilities are in line with our previously disclosed production range.

Our Retail EBITDA(3) for 2015 is now expected to be from $1.15-billion to $1.22 billion. The slight narrowing of the range from our previous estimate is due to some seed margin pressure this year, a reduction in U.S. corn acres and a slightly lower fertilizer pricing environment in 2015.

We have updated our finance costs range for 2015 to $230-million to $250-million to reflect the incremental interest expense related to our $1-billion bond issuance in February 2015. Our estimates of the Canada/U.S. foreign exchange rate and NYMEX for 2015 have been narrowed from our original estimates based on current market conditions.

This guidance and updated additional measures and related assumptions are summarized in the table on page 3. Guidance excludes the impact of share-based payments expense (recovery), gains (losses) on foreign exchange and non-qualifying derivative hedges. Volumetric and earnings estimates assume normal seasonal growing and harvest patterns in the geographies where Agrium operates.4

(1) Represents diluted per share information attributable to equity holders of Agrium.

(2) First quarter effective tax rate of 26 percent used for adjusted net earnings and per share calculation.

(3) Earnings (loss) from continuing operations before finance costs, income taxes, depreciation and amortization. This is a non-IFRS measure. Refer to Additional IFRS and non-IFRS Financial Measures on page 12.

4 For further assumptions related to our guidance, see disclosure in the section "Market Outlook" in our 2015 first quarter Management's Discussion and Analysis.


2015 ANNUAL GUIDANCE RANGE AND ASSUMPTIONS                                  
----------------------------------------------------------------------------
                                                           Annual           
                                                          Low           High
----------------------------------------------------------------------------
EPS                                                    $7.00          $8.25 
----------------------------------------------------------------------------
Guidance assumptions                                                        
----------------------------------------------------------------------------
Wholesale                                                                   
----------------------------------------------------------------------------
Production tonnes                                                           
----------------------------------------------------------------------------
  Nitrogen (millions)(1)                                 3.5            3.7 
----------------------------------------------------------------------------
  Potash (millions)                                      1.9            2.2 
----------------------------------------------------------------------------
Retail                                                                      
----------------------------------------------------------------------------
  EBITDA (billions)                                    $1.15          $1.22 
----------------------------------------------------------------------------
  Crop nutrient sales tonnes (millions)                  9.7           10.2 
----------------------------------------------------------------------------
Other                                                                       
----------------------------------------------------------------------------
  Finance costs (millions)                              $250           $230 
----------------------------------------------------------------------------
  Tax rate                                               28%            27% 
----------------------------------------------------------------------------
  Sustaining capital expenditures (millions)            $500           $550 
----------------------------------------------------------------------------
  Total capital expenditures (billions)                 $1.2           $1.3 
----------------------------------------------------------------------------
  Canada/U.S. foreign exchange rate                     1.20           1.30 
----------------------------------------------------------------------------
  NYMEX gas price ($/MMBtu)                            $3.50          $2.50 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
(1) Nitrogen production tonnes reduced to reflect disposal of West          
    Sacramento upgrade facility                                             

MANAGEMENT'S DISCUSSION AND ANALYSIS

May 5, 2015

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 2015 (three months ended March 31, 2015) are against results for the first quarter of 2014 (three months ended March 31, 2014). All dollar amounts refer to United States ("U.S.") dollars except where otherwise stated. The financial measures EBITDA and Adjusted EBITDA used in this MD&A are not prescribed by IFRS, or in the case of EBIT, is an Additional IFRS financial measure. Our method of calculation may not be directly comparable to that of other companies. We consider these non-IFRS financial measures to provide useful information to both management and investors in measuring our financial performance and financial condition. These non-IFRS measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with IFRS. Refer to page 12, "Additional IFRS and Non-IFRS Financial Measures" for further details, including a reconciliation of such measures to their most directly comparable measure calculated in accordance with IFRS. The following interim MD&A is as of May 5, 2015 and should be read in conjunction with the Consolidated Interim Financial Statements for the three months ended March 31, 2015 (the "Consolidated Financial Statements"), and the annual MD&A and financial statements for the year ended December 31, 2014 included in our 2014 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 where 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 "Market Outlook" section of this MD&A.

2015 First Quarter Operating Results

CONSOLIDATED NET EARNINGS

Agrium's 2015 first quarter net earnings from continuing operations were $14-million or $0.08 diluted earnings per share from continuing operations compared to net earnings from continuing operations of $12-million or $0.08 diluted earnings per share from continuing operations for the same quarter of 2014.


Financial Overview                                                          
                                                                            
----------------------------------------------------------------------------
                                          Three months ended March 31,      
(millions of U.S. dollars, except                                           
 per share amounts and where noted)      2015      2014    Change  % Change 
----------------------------------------------------------------------------
Sales                                   2,872     3,079      (207)       (7)
----------------------------------------------------------------------------
Gross profit                              584       556        28         5 
----------------------------------------------------------------------------
Expenses                                  509       503         6         1 
----------------------------------------------------------------------------
Earnings before finance costs and                                           
 income taxes ("EBIT")                     75        53        22        42 
----------------------------------------------------------------------------
Net earnings from continuing                                                
 operations                                14        12         2        17 
----------------------------------------------------------------------------
Net loss from discontinued                                                  
 operations                                 -        (9)        9      (100)
----------------------------------------------------------------------------
Net earnings                               14         3        11       367 
----------------------------------------------------------------------------
Diluted earnings per share from                                             
 continuing operations                   0.08      0.08         -         - 
----------------------------------------------------------------------------
Diluted loss per share from                                                 
 discontinued operations                    -     (0.06)     0.06      (100)
----------------------------------------------------------------------------
Diluted earnings per share               0.08      0.02      0.06       300 
----------------------------------------------------------------------------
Effective tax rate (%)                     26        29       N/A       N/A 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Sales and Gross Profit                                                      
                                                                            
Sales and gross profit variance by business unit                            
                                                                            
----------------------------------------------------------------------------
                                                  Quarter to date change    
(millions of U.S. dollars)                             Sales   Gross profit 
----------------------------------------------------------------------------
Retail                                                    31            (16)
----------------------------------------------------------------------------
Wholesale                                               (194)            63 
----------------------------------------------------------------------------
Other                                                    (44)           (19)
----------------------------------------------------------------------------
                                                        (207)            28 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Sales

Retail sales increased by $31-million for the first quarter of 2015 compared to the same period last year primarily due to higher sales volumes for crop protection products in the U.S. and Australia and slightly higher sales for crop nutrients and seed. Wholesale sales for the first quarter of 2015 decreased compared to 2014 as a result of lower potash sales volumes attributable to lower opening inventory and lower production volumes associated with the start-up of the Vanscoy expansion project. Product purchased for resale had lower sales as a result of the strategic review in 2014 that lead to exiting portions of this business, but contributed higher gross profit during the quarter.

Gross Profit

Our gross profit for the first quarter of 2015 increased by $28-million compared to the first quarter of 2014. The main drivers of this variance consisted of:


--  Wholesale's gross profit increased by $63-million to $234-million
    primarily due to lower natural gas costs and manufacturing cost
    efficiencies and higher realized selling prices for ammonia and
    phosphate. 
--  Retail's gross profit decreased by $16-million to $371-million due to a
    slow start to the spring season, a crop shift in planted acres, and
    competitive pressures which impacted our seed, application, and crop
    protection margins this quarter. 

Expenses

General and administrative expenses decreased in the first quarter of 2015 compared to the same period last year as we began to realize reductions related to our Operational Excellence program.

Share-based payments

Due to a larger share price increase and stronger share performance relative to our peers during the current quarter, our share-based payments increased by $14-million compared to the same period last year.

The Board of Directors approved changes to our share-based payment plan effective January 1, 2015. Refer to note 6 of our Summarized Notes to the Consolidated Financial Statements for further details.

Other Expenses (Income)


----------------------------------------------------------------------------
                                               Three months ended March 31, 
(millions of U.S. dollars)                              2015           2014 
----------------------------------------------------------------------------
Gain on derivatives not designated as hedges                                
 net of foreign exchange                                  (1)           (35)
----------------------------------------------------------------------------
Interest income                                          (17)           (11)
----------------------------------------------------------------------------
Gain on sale of assets                                   (38)             - 
----------------------------------------------------------------------------
Environmental remediation and asset retirement                              
 obligations                                               9             (2)
----------------------------------------------------------------------------
Bad debt expense                                           7              5 
----------------------------------------------------------------------------
Potash profit and capital tax                              5              3 
----------------------------------------------------------------------------
Other                                                      2              - 
----------------------------------------------------------------------------
                                                         (33)           (40)
----------------------------------------------------------------------------
----------------------------------------------------------------------------

In the first quarter of 2015, we began to designate all of our natural gas derivatives as qualifying hedges for accounting purposes. During 2014, we designated only certain longer-term derivatives as hedges, none of which settled in 2014. We now record all gains and losses from these natural gas derivatives initially to equity, and subsequently to cost of product sold when we sell the related product. Previously, we recorded these natural gas derivative gains and losses to other expenses, resulting in the change in 2015 compared to 2014, which included natural gas derivative gains of $32-million.

In the first quarter of 2015, we completed the sale of our Niota and Meredosia storage and distribution facilities resulting in a gain on sale of assets of $38-million. We also announced our intention to divest the West Sacramento nitrogen upgrade facility which will reduce capital cost, working capital and is not expected to impact net earnings.

Environmental remediation and asset retirement obligation expense increased by $11-million due to an increase in our environmental remediation provision for our phosphate legacy sites.

Effective Tax Rate

The effective tax rate on continuing operations was 26 percent for the first quarter of 2015 compared to 29 percent for the same period last year due to an increase in income earned from low tax jurisdictions.

BUSINESS SEGMENT PERFORMANCE

Retail

Retail reported first quarter sales of $2.3-billion, which is slightly above the $2.2-billion reported in the same quarter last year. Gross profit was $371-million in the first quarter of 2015, down from $387-million in last year's first quarter. Retail reported an EBITDA loss of $8-million compared to earnings of $17-million in the first quarter of last year. Retail's results were impacted by a late start to the spring season in the eastern and southern U.S., which has pushed North American earnings into the second quarter. International sales and gross profit were down in the current quarter as a result of lower merchandise sales and nutrient margins in Australia and weaker crop protection sales in South America. The first quarter saw a similar split between North American and International gross profit as the same period last year.

Total crop nutrient sales were $911-million this quarter, up slightly from $896-million in the first quarter of 2014. A 3 percent increase in total sales volumes was partially offset by marginally lower nutrient prices in the first quarter. Higher nutrient volumes were due to strong demand in the Western U.S. and from tuck-in acquisitions over the past year. Gross profit for crop nutrients was $126-million this quarter, down marginally compared to the $128-million reported in the first quarter of 2014, while per tonne margins also declined slightly from $70 per tonne in the first quarter of 2014 to $67 per tonne this quarter. The slight reduction in margins was due to the stronger relative growth in volumes in lower margin international and Canadian markets, while nutrient margins in the U.S. were up year-over-year.

Crop protection product sales were $793-million in the first quarter of 2015, compared to $730-million in the same period last year. The higher sales were attributable to increased volumes, primarily of lower margin glyphosate used for early weed control in areas where it was too wet to till. Gross profit was $108-million this quarter, compared to $105-million reported in the first quarter of 2014. Crop protection margins as a percentage of sales were 13.6 percent this quarter compared to 14.4 percent in the same period of 2014 due to a shift in sales mix to lower margin products, as well as a higher relative percentage of sales in lower margin regions such as Canada due to application delays in certain regions of the U.S.

Seed sales were $308-million in the first quarter of 2015, up slightly from $298-million reported in the first quarter of last year. The increase in sales was driven by a slight increase in volumes in the U.S. this quarter as farmers prepared in advance for the spring season. This was partly offset by lower sales in Canada due to timing of purchases and the impact of the lower Canadian dollar compared to the same period last year. Gross profit was $40-million this quarter compared to $46-million for the same period last year, as competitive sales and crop mix shift impacted margins. Planted acres of corn are expected to be lower in 2015 compared to last year, and the spring delays have mainly impacted corn growing regions. These factors caused a lower percentage of higher-margin corn seed sales in the first quarter. As a result, seed margins as a percentage of sales were 13.0 percent in the first quarter of 2015, a reduction from the 15.4 percent reported in the first quarter of 2014.

Sales of merchandise in the first quarter of 2015 were $142-million, compared to $186-million in the same period last year. Gross profit for this product line was $20-million this quarter, down slightly from $24-million in the first quarter of 2014. Merchandise results were impacted by lower demand and selling price for fuel in Western Canada, as well as decreased demand for fencing and water equipment in Australia.

Services and other sales were $109-million this quarter, compared to the $122-million reported in the first quarter of 2014. Gross profit was $77-million in the first quarter of 2015, compared to $84-million for the same period last year. These decreases were largely due to a later than usual start to the spring application season across much of the eastern and southern U.S. and the timing of livestock shipments in Australia.

Selling expenses as a percentage of sales were 18.7 percent in the first quarter of 2015 which is down from the 19.5 percent reported in the same period last year stemming from operational excellence initiatives and from the lower Canadian dollar. Retail selling expenses were $423-million for the first quarter, compared to $436-million in the same period last year. This variance was due to lower employee-related costs and the overall improvement in the cost structure of Australia, lower fuel costs for rolling stock expenses and lower depreciation charges.

Wholesale

Wholesale's 2015 first quarter sales were $867-million, down from the $1.1-billion reported in the same quarter last year primarily due to lower potash sales volumes and a decision to reduce the low-margin purchase for resale business. Gross profit was $234-million this quarter, compared to $171-million in the first quarter of 2014. Wholesale Adjusted EBITDA was $286-million in the first quarter of 2015 compared to $237-million reported in the same period last year. The increase in earnings was primarily due to significantly lower cost of production for our nitrogen and phosphate facilities, as a result of lower natural gas costs, improved operating rates and efficiencies and the impact of a weaker Canadian dollar on related fixed costs.

Nitrogen gross profit for the first quarter of 2015 was $143-million compared to $90-million in the same quarter last year. Nitrogen production in the quarter was about 5 percent higher than the same quarter last year due to higher operating rates. Sales volumes were 761,000 tonnes, a slight decrease from the 792,000 tonnes in the same quarter last year due to lower opening inventories in the current period. Overall realized nitrogen sales prices were $414 per tonne, a $10 per tonne decrease from the same period in 2014. The decrease was due to lower urea benchmark prices, as record Chinese global urea exports in the first quarter of 2015 contributed to weakened international prices. Nitrogen cost of product sold was $226 per tonne this quarter, compared to $311 per tonne for the same period last year. The decrease was a result of significantly lower natural gas costs, a weaker Canadian dollar which lowered production costs reported in U.S. dollars and stronger operating rates and efficiencies. Average nitrogen gross margins were $188 per tonne this quarter, compared to $113 per tonne in the same period last year.

As of January 1, 2015, we have designated all of our natural gas derivatives as hedges(1), with realized gains and losses now recorded to cost of product sold (which also includes transportation and administration costs). Nitrogen cost of product sold for the first quarter of 2014 would have been $288 per tonne if realized gains from natural gas derivatives had been applied on a comparative basis.

Agrium's average natural gas cost was $2.93/MMBtu this quarter ($2.52/MMBtu excluding the impact of realized losses on natural gas derivatives) compared to $4.29/MMBtu ($5.02/MMBtu excluding the impact of realized gains on natural gas derivatives) for the same period in 2014. The average U.S. benchmark (NYMEX) natural gas price for the first quarter of 2015 was $2.96/MMBtu, compared to $4.90/MMBtu in the same quarter last year. The AECO (Alberta) basis differential was a $0.74/MMBtu discount to NYMEX in the first quarter of 2015, an increase from the $0.56/MMBtu discount in the first quarter of 2014.

Potash gross profit for the first quarter of 2015 was $7-million, compared to $46-million reported in the same quarter last year. Sales volumes were 185,000 tonnes this quarter compared to 428,000 tonnes in the first quarter of 2014. The decrease in sales volumes was a result of the initial ramp-up of production volumes in the quarter after completing the tie-in of the Vanscoy one million tonne expansion project in December of 2014 and very low opening inventory in 2015. Average realized potash sales prices were $361 per tonne compared to $298 per tonne in the same period last year. Both North America and international realized sales prices were 10 to15 percent higher than the same period last year combined with a higher proportion of our sales this quarter sold into the North American market. Gross margin per tonne was impacted by higher costs related to the ramp-up of production, which were allocated over lower sales volumes. This was partially offset by the impact of a weaker Canadian dollar on fixed costs in the current period compared to the same period last year.

Phosphate gross profit was $45-million in the first quarter of 2015, compared to $2-million in the same quarter last year. Phosphate sales volumes were 282,000 tonnes in the first quarter of 2015, compared to 308,000 tonnes in the same quarter last year. Realized phosphate sales prices were $639 per tonne this quarter compared to $544 per tonne in the same period last year, due to strong market conditions and tight supply. Phosphate cost of product sold was $481 per tonne in the first quarter of 2015, a decrease of $55 per tonne compared to the same period last year as a result of higher production rates, lower ammonia and rock costs, fixed cost savings and the impact of the weaker Canadian dollar on fixed costs. Gross margin in the first quarter of 2015 was $158 per tonne compared to $8 per tonne in the same period last year.

Wholesale's Other, which includes product purchased for resale, ammonium sulfate, Environmentally Smart Nitrogen ("ESN®", hereinafter referred to as "ESN") and other gross profit was $39-million this quarter compared to $33-million in the same quarter of 2014. Ammonium sulfate gross profit was $16-million this quarter, $4-million higher than same period last year due to higher realized sales prices and lower input costs. ESN gross profit was $12-million compared to $10-million in the first quarter of 2014. This increase was due to higher volumes and lower ammonia input costs partially offset by lower realized sales prices for ESN in the current quarter. Product purchased for resale gross profit for the first quarter was $3-million higher than the same period last year due to higher margins in the current period.

Wholesale expenses in the first quarter of 2015 were $9-million higher compared to the same period last year. The increase was related primarily to the $32-million gain from natural gas derivatives in the first quarter of 2014 and recorded in other expenses, and an $11-million increase in environmental remediation estimates. This was largely offset by a $38-million gain on the sale of non-core Purchase for Resale terminals this quarter.


(1) In the prior year, unrealized and realized gains and losses on          
    derivatives not designated as hedges were included in other expenses.   

Other

EBITDA for our Other non-operating business unit for the first quarter of 2015 was a net expense of $88-million, compared to a net expense of $68-million for the first quarter of 2014. The increase was due to the following:


--  a $19-million higher gross profit elimination for the first quarter of
    2015 compared to the first quarter of 2014. This is the result of an
    increase in margin per tonne in 2015 on intercompany inventory held by
    our Retail business unit compared to a decrease in the first quarter of
    2014 coupled with higher intercompany inventory at the end of the first
    quarter of 2015; and, 
--  a $14-million increase in share-based payments expense. 

FINANCIAL CONDITION

The following are changes to working capital on our Consolidated Balance Sheets for the three-month period ended March 31, 2015 compared to December 31, 2014.


----------------------------------------------------------------------------
(millions of                                                                
 U.S. dollars,                                             Explanation of   
 except as      March 31,  December                        the change in    
 noted)              2015  31, 2014  $ Change  % Change    balance          
----------------------------------------------------------------------------
Current assets                                                              
  Cash and cash       780       848       (68)       (8%)  See discussion   
   equivalents                                             under the section
                                                           "Liquidity and   
                                                           Capital          
                                                           Resources".      
----------------------------------------------------------------------------
  Accounts          2,045     2,075       (30)       (1%)  -                
   receivable                                                               
----------------------------------------------------------------------------
  Income taxes        112       138       (26)      (19%)  Receipt of income
   receivable                                              tax refunds.     
----------------------------------------------------------------------------
  Inventories       4,820     3,505     1,315        38%   Seasonal Retail  
                                                           inventory build- 
                                                           up in preparation
                                                           for the spring   
                                                           season.          
----------------------------------------------------------------------------
  Prepaid             315       710      (395)      (56%)  Drawdown of      
   expenses and                                            prepaid inventory
   deposits                                                as Retail took   
                                                           delivery of      
                                                           product in       
                                                           anticipation of  
                                                           the spring       
                                                           season.          
----------------------------------------------------------------------------
  Other current       123       122         1         1%   -                
   assets                                                                   
----------------------------------------------------------------------------
Current                                                                     
 liabilities                                                                
  Short-term          265     1,527    (1,262)      (83%)  Proceeds from the
   debt                                                    issuance of      
                                                           debentures were  
                                                           used to repay    
                                                           commercial paper 
                                                           and credit       
                                                           facilities.      
----------------------------------------------------------------------------
  Accounts          5,672     4,197     1,475        35%   Retail inventory 
   payable                                                 purchases and    
                                                           customer         
                                                           prepayments made 
                                                           in anticipation  
                                                           of the spring    
                                                           season.          
----------------------------------------------------------------------------
  Income taxes          4         5        (1)      (20%)  -                
   payable                                                                  
----------------------------------------------------------------------------
  Current               1        11       (10)      (91%)  -                
   portion of                                                               
   long-term                                                                
   debt                                                                     
----------------------------------------------------------------------------
  Current              88       113       (25)      (22%)  -                
   portion of                                                               
   other                                                                    
   provisions                                                               
----------------------------------------------------------------------------
Working capital     2,165     1,545       620        40%                    
----------------------------------------------------------------------------
----------------------------------------------------------------------------

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:


----------------------------------------------------------------------------
                                       Three months ended March 31,         
(millions of U.S. dollars)               2015           2014         Change 
----------------------------------------------------------------------------
Cash provided by operating                                                  
 activities                               705            761            (56)
----------------------------------------------------------------------------
Cash used in investing                                                      
 activities                              (461)          (483)            22 
----------------------------------------------------------------------------
Cash used in financing                                                      
 activities                              (295)          (467)           172 
----------------------------------------------------------------------------
Effect of exchange rate changes                                             
 on cash and cash equivalents             (17)            (3)           (14)
----------------------------------------------------------------------------
Decrease in cash and cash                                                   
 equivalents from continuing                                                
 operations                               (68)          (192)           124 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Cash and cash equivalents used                                              
 in discontinued operations                 -            (17)            17 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Analysis of cash flows for the three months ended March 31, 2015

Cash flows provided by operating activities decreased due to a smaller growth in accounts payable during the first quarter of 2015 compared to the first quarter of 2014 as a result of softer market conditions and outlook on fertilizer pricing.

Other key changes in our cash flows in the first quarter of 2015 were capital expenditures and financing. We incurred capital expenditures of $318-million for our Vanscoy potash facility ramp-up and our Borger nitrogen expansion project and we repaid short-term debt of $1.2-billion primarily from the proceeds of the issuance of $1-billion of debentures. Dividend payments were $109-million for the three months ended March 31, 2015.


Capital Expenditures                                                        
                                                                            
----------------------------------------------------------------------------
                                                     Three months ended     
                                                         March 31,          
(millions of U.S. dollars)                               2015           2014
----------------------------------------------------------------------------
Sustaining capital                                         95            114
----------------------------------------------------------------------------
Investing capital                                         304            345
----------------------------------------------------------------------------
Total                                                     399            459
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Our investing capital expenditures decreased in the first three months of 2015 compared to the first three months of 2014 due to the completion of the tie-in of our Vanscoy potash facility expansion in the fourth quarter of 2014, partially offset by increased expenditures relating to the Borger nitrogen expansion project. We incurred investing capital expenditures amounting to $197-million and $121-million for the Vanscoy facility ramp-up and the expansion of the Borger nitrogen facility, respectively. We expect the remaining capital spending to approximate $900-million to $1-billion in 2015.

Short-term Debt

Our short-term debt of $265-million at March 31, 2015 is outlined in note 5 of our Summarized Notes to the Consolidated Financial Statements.

Our short-term debt decreased by $1.3-billion during the three months ended March 31, 2015, which primarily increased our unutilized short-term financing capacity to $2.6-billion as at March 31, 2015.

Capital Management

During the quarter, we issued $550-million of 3.375 percent debentures due March 15, 2025 and $450-million of 4.125 percent debentures due March 15, 2035. The debentures were issued under our base shelf prospectus, which permits issuance in Canada and the U.S. of up to $2.5-billion of common shares, debt and other securities less the offering price of securities issued between the 2014 filing date of the base shelf prospectus and May 2016. Issuance of further securities under the base shelf prospectus requires filing a prospectus supplement and is subject to availability of funding in capital markets.

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, 2015.

NORMAL COURSE ISSUER BID

On January 22, 2015, 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 7,185,866 common shares on the TSX and New York Stock Exchange during the period from January 26, 2015 to January 25, 2016. From April 1, 2015 to May 5, 2015, we purchased approximately 712,000 shares at an average share price of $105 for total consideration of $75-million. There were no share repurchases during the three months ended March 31, 2015. Shareholders can obtain a copy of the NCIB notice submitted to the TSX from Agrium without charge upon request.

OUTSTANDING SHARE DATA

Agrium had 143,029,081 outstanding shares at May 5, 2015. At that date, under our stock option plans, shares expected to be issued for options outstanding were negligible.


SELECTED QUARTERLY INFORMATION                                              
                                                                            
----------------------------------------------------------------------------
(millions of U.S.                                                           
 dollars, except per   2015   2014   2014   2014   2014   2013   2013   2013
 share amounts)          Q1     Q4     Q3     Q2     Q1     Q4     Q3     Q2
----------------------------------------------------------------------------
Sales                 2,872  2,705  2,920  7,338  3,079  2,867  2,796  6,908
----------------------------------------------------------------------------
Gross profit            584    732    665  1,599    556    740    629  1,699
----------------------------------------------------------------------------
Net earnings from                                                           
 continuing                                                                 
 operations              14     70     91    625     12    110     80    744
----------------------------------------------------------------------------
Net (loss) earnings                                                         
 from discontinued                                                          
 operations               -    (19)   (41)    (9)    (9)   (11)    (4)     3
----------------------------------------------------------------------------
Net earnings             14     51     50    616      3     99     76    747
----------------------------------------------------------------------------
Earnings per share                                                          
 from continuing                                                            
 operations                                                                 
 attributable to                                                            
 equityholders of                                                           
 Agrium:                                                                    
----------------------------------------------------------------------------
  Basic and diluted    0.08   0.46   0.63   4.34   0.08   0.74   0.54   5.00
----------------------------------------------------------------------------
(Loss) earnings per                                                         
 share from                                                                 
 discontinued                                                               
 operations                                                                 
 attributable to                                                            
 equity holders of                                                          
 Agrium:                                                                    
----------------------------------------------------------------------------
  Basic and diluted       -  (0.13) (0.28) (0.06) (0.06) (0.08) (0.02)  0.02
----------------------------------------------------------------------------
Earnings per share                                                          
 attributable to                                                            
 equity holders of                                                          
 Agrium:                                                                    
----------------------------------------------------------------------------
  Basic and diluted    0.08   0.33   0.35   4.28   0.02   0.66   0.52   5.02
----------------------------------------------------------------------------
----------------------------------------------------------------------------

The agricultural products business is seasonal in nature. Consequently, comparisons made on a year-over-year basis 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 generally occur after the application season is complete.

ADDITIONAL IFRS AND NON-IFRS FINANCIAL MEASURES

Certain financial measures in this MD&A are not prescribed by IFRS. We consider these financial measures discussed herein to provide useful information to both management and investors in measuring our financial performance and financial condition.

In general, an additional IFRS financial measure is a measure relevant to understanding a company's financial performance that is not a minimum financial statement measure mandated by IFRS. A non-IFRS financial measure generally either excludes or includes amounts not excluded or included in the most directly comparable measure calculated and presented in accordance with IFRS. Non-IFRS financial measures are not recognized measures under IFRS and our method of calculation is unlikely to be directly comparable to that of other companies. These non-IFRS measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with IFRS.

The following table outlines our additional IFRS financial measure, its definition and how management assesses such measure.


----------------------------------------------------------------------------
                                                    Why We Use the Measure  
Additional IFRS                                      and Why it is Useful to
 financial measure        Definition                 Investors              
----------------------------------------------------------------------------
EBIT                      Earnings (loss) from      Provides management and 
                           continuing operations     investors with         
                           before finance costs      information for        
                           and income taxes.         comparison of our      
                                                     operating results to   
                                                     the operating results  
                                                     of other companies.    
                                                     These measures         
                                                     eliminate the impact of
                                                     finance and tax        
                                                     structure variables    
                                                     that exist between     
                                                     entities.              
----------------------------------------------------------------------------

The following table outlines our non-IFRS financial measures, their definitions and usefulness, and how management assesses each measure.


----------------------------------------------------------------------------
                                                    Why We Use the Measure  
Non-IFRS financial                                   and Why it is Useful to
 measures                 Definition                 Investors              
----------------------------------------------------------------------------
EBITDA                    Earnings (loss) from      Refer to EBIT. EBITDA is
                           continuing operations     also frequently used by
                           before finance costs,     investors and analysts 
                           income taxes,             for valuation purposes 
                           depreciation and          when multiplied by a   
                           amortization.             factor to estimate the 
                                                     enterprise value of a  
                                                     company. EBITDA is also
                                                     a component in the     
                                                     determination of annual
                                                     incentive compensation 
                                                     for certain management 
                                                     employees, and in      
                                                     calculation of certain 
                                                     of our debt covenants. 
----------------------------------------------------------------------------
Adjusted EBITDA           EBITDA before finance     Useful in evaluating our
                           costs, income taxes,      business performance by
                           depreciation and          including our          
                           amortization of joint     proportionate share of 
                           ventures.                 joint ventures in      
                                                     operating results.     
----------------------------------------------------------------------------

RECONCILIATIONS OF ADDITIONAL IFRS AND NON-IFRS FINANCIAL MEASURES


Adjusted EBITDA and EBITDA to EBIT                                          
                                                                            
----------------------------------------------------------------------------
                                                Three months ended          
                                                  March 31, 2015            
(millions of U.S. dollars)             Retail Wholesale  Other Consolidated 
----------------------------------------------------------------------------
Adjusted EBITDA                            (8)      286    (88)         190 
----------------------------------------------------------------------------
Equity accounted                                                            
joint ventures:                                                             
  Finance costs and income taxes            -         1      -            1 
----------------------------------------------------------------------------
  Depreciation and amortization             -         3      -            3 
----------------------------------------------------------------------------
EBITDA                                     (8)      282    (88)         186 
----------------------------------------------------------------------------
Depreciation and amortization              57        50      4          111 
----------------------------------------------------------------------------
EBIT                                      (65)      232    (92)          75 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Adjusted EBITDA and EBITDA to EBIT                                          
                                                                            
----------------------------------------------------------------------------
                                                Three months ended          
                                                  March 31, 2014            
(millions of U.S. dollars)             Retail Wholesale  Other Consolidated 
----------------------------------------------------------------------------
Adjusted EBITDA                            17       237    (68)         186 
----------------------------------------------------------------------------
Equity accounted                                                            
joint ventures:                                                             
  Finance costs and income taxes            -         4      -            4 
----------------------------------------------------------------------------
  Depreciation and amortization             -         2      -            2 
----------------------------------------------------------------------------
EBITDA                                     17       231    (68)         180 
----------------------------------------------------------------------------
Depreciation and amortization              72        53      2          127 
----------------------------------------------------------------------------
EBIT                                      (55)      178    (70)          53 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

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 2014 annual MD&A, which is contained in our 2014 Annual Report. Since the date of our 2014 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 Interim Financial Statements for the three months ended March 31, 2015 are the same as those applied in our audited annual financial statements in our 2014 Annual Report, with the exception of changes in accounting estimates described in note 9 of our Summarized Notes to the Consolidated Financial Statements for the three months ended March 31, 2015.

BUSINESS RISKS

The information presented in the "Enterprise Risk Management" section on pages 64 - 68 in our 2014 Annual Report and under the heading "Risk Factors" on pages 22 - 31 in our 2014 Annual Information Form has not changed materially since December 31, 2014.

CONTROLS AND PROCEDURES

There have been no changes in our internal control over financial reporting during the quarter ended March 31, 2015 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 2014 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.

MARKET OUTLOOK

Record global crop production in 2014 and a sizeable Southern Hemisphere crop this year has weighed on international crop prices. The start of the spring application season in North America was delayed due to wet weather across the southern and eastern United States but seeding rates started to catch up in late April, and as of early May, were above the historical average. Drier conditions in the Northern Plains and Western Canada are expected to support strong seeded acreage and related crop input demand in these regions this year compared to recent history. This is particularly important for our Wholesale nitrogen sales and Canadian Retail operations. California is in a drought situation, which is expected to reduce acreage of some row crops this year, but high fruit and vegetable prices have supported crop input demand. U.S. corn acreage expectations have decreased slightly over the past month as a result of the delayed spring season in the Southern and Eastern U.S. If U.S. crop yields come in at or below trend levels this year we expect crop prices to firm up in the second half of 2015.

The late start to the season in the Southern and Eastern U.S., combined with lower crop prices, resulted in delays in decisions regarding seeding and crop protection product use, pushing sales into the second quarter. Some growers have been more discerning regarding genetic traits and in some cases have selected older, lower-priced varieties. The later planting season is expected to support demand for retail services in the second quarter as growers focus on getting the crop inputs in place in a compressed season.

Global crop nutrient demand was relatively strong in late 2014 and early 2015 as buyers purchased product ahead of the Northern Hemisphere spring season. This led to comfortable inventory levels heading into the spring season and has contributed to recent weakness in global nutrient pricing. The significant decline in the value of most non-U.S. currencies relative to the U.S. dollar has lowered the cost of production for many non-U.S. producers and raised the cost of crop inputs in some local currencies. However, overall the lower currencies have been a net benefit for growers in these regions due to higher crop prices in local currencies.

China exported just over four million tonnes of urea in the first quarter of 2015, more than double the volume exported in the same period of 2014. Exports were supported by strong import demand from the United States and India. Ukrainian urea production and exports increased over the past few months, further adding prilled urea supplies to global trade. In recent weeks, Chinese nitrogen producers have resisted further price declines, indicating that urea prices are near the cost-based floor level and that the pace of Chinese exports is expected to slow relative to 2014 levels in the coming months.

The delay in concluding Chinese and Indian potash supply agreements resulted in other potash buyers postponing purchases which pressured global potash prices in the first quarter of 2015. The North American potash market was also impacted by the delayed spring and higher offshore potash imports this year. Global phosphate demand has slowed in recent weeks, which has put some pressure on international and domestic pricing. Brazilian phosphate demand has begun relatively slow in 2015, but domestic deliveries improved in March and the import pace is expected to increase in the coming months. Analysts expect that Indian potash and phosphate demand will increase again in 2015.

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 document 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: the payment of an increased dividend; Agrium's delivery of strong second quarter results and that our operations and asset mix will support higher cash flow and dividends over time; second quarter earnings; second quarter and annual diluted EPS; 2015 capital spending expectations; and our market outlook for the remainder of 2015 including anticipated supply and demand for our products and services, expected market and industry conditions with respect to planted acres, 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, 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 the remainder of 2015; 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 project's approach. Also refer to the discussion under the heading "Key Assumptions and Risks in Respect of Forward-Looking Statements" in our 2014 annual MD&A, 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 economic, market and business conditions; weather conditions including impacts from regional flooding and/or drought conditions; crop 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; the risk that work on the Egyptian Misr Fertilizers Production Company S.A.E. nitrogen facility expansion in Egypt may be interrupted again and may not be completed on the timelines currently anticipated or at all; 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 recent 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 United States including those disclosed under the heading "Risk Factors" in our Annual Information Form for the year ended December 31, 2014 and under the headings "Enterprise Risk Management" and "Key Assumptions and Risks in respect of Forward-Looking Statements" in our 2014 annual MD&A.

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 nine million tonnes and with competitive advantages across all product lines. Agrium retail-distribution has an unmatched network of over 1,300 facilities and over 3,000 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 2015 1st Quarter Conference Call will be available in a listen-only mode beginning Wednesday, May 6, 2015 at 7:30 a.m. MST (9:30 a.m. EST). Please visit the following website: www.agrium.com.


                                AGRIUM INC.                                 
                   Consolidated Statements of Operations                    
            (Millions of U.S. dollars, except per share amounts)            
                                (Unaudited)                                 
                                                                            
                                                    Three months ended      
                                                        March 31,           
----------------------------------------------------------------------------
                                                        2015           2014 
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
Sales                                                  2,872          3,079 
----------------------------------------------------------------------------
Cost of product sold                                   2,288          2,523 
----------------------------------------------------------------------------
Gross profit                                             584            556 
----------------------------------------------------------------------------
Expenses                                                                    
----------------------------------------------------------------------------
  Selling                                                430            444 
----------------------------------------------------------------------------
  General and administrative                              67             69 
----------------------------------------------------------------------------
  Share-based payments (note 6)                           45             31 
----------------------------------------------------------------------------
  Earnings from associates and joint ventures              -             (1)
----------------------------------------------------------------------------
  Other income (note 3)                                  (33)           (40)
----------------------------------------------------------------------------
Earnings before finance costs and income taxes            75             53 
----------------------------------------------------------------------------
  Finance costs related to long-term debt                 37             19 
----------------------------------------------------------------------------
  Other finance costs                                     19             17 
----------------------------------------------------------------------------
Earnings before income taxes                              19             17 
----------------------------------------------------------------------------
  Income taxes                                             5              5 
----------------------------------------------------------------------------
Net earnings from continuing operations                   14             12 
----------------------------------------------------------------------------
Net loss from discontinued operations                      -             (9)
----------------------------------------------------------------------------
Net earnings                                              14              3 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Attributable to:                                                            
----------------------------------------------------------------------------
  Equity holders of Agrium                                12              2 
----------------------------------------------------------------------------
  Non-controlling interest                                 2              1 
----------------------------------------------------------------------------
Net earnings                                              14              3 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Earnings per share attributable to equity                                   
 holders of Agrium (note 4)                                                 
----------------------------------------------------------------------------
  Basic and diluted earnings per share from                                 
   continuing operations                                0.08           0.08 
----------------------------------------------------------------------------
  Basic and diluted loss per share from                                     
   discontinued operations                                 -          (0.06)
----------------------------------------------------------------------------
  Basic and diluted earnings per share                  0.08           0.02 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
See accompanying notes.                                                     
                                                                            
                                AGRIUM INC.                                 
              Consolidated Statements of Comprehensive Income               
                         (Millions of U.S. dollars)                         
                                (Unaudited)                                 
                                                                            
                                                    Three months ended      
                                                        March 31,           
----------------------------------------------------------------------------
                                                        2015           2014 
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
Net earnings                                              14              3 
----------------------------------------------------------------------------
  Other comprehensive loss                                                  
----------------------------------------------------------------------------
    Items that are or may be reclassified to                                
     earnings                                                               
----------------------------------------------------------------------------
      Cash flow hedges                                                      
----------------------------------------------------------------------------
        Effective portion of changes in fair                                
         value                                           (16)             - 
----------------------------------------------------------------------------
        Deferred income taxes on changes in                                 
         fair value                                        4              - 
----------------------------------------------------------------------------
        Reclassifications to earnings                     11              - 
----------------------------------------------------------------------------
        Deferred income taxes on                                            
         reclassifications to earnings                    (3)             - 
----------------------------------------------------------------------------
      Share of comprehensive (loss) income of                               
       associates and joint ventures                      (5)             1 
----------------------------------------------------------------------------
      Foreign currency translation                                          
----------------------------------------------------------------------------
        Losses                                          (295)          (106)
----------------------------------------------------------------------------
  Other comprehensive loss                              (304)          (105)
----------------------------------------------------------------------------
Comprehensive loss                                      (290)          (102)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Attributable to:                                                            
----------------------------------------------------------------------------
  Equity holders of Agrium                              (291)          (103)
----------------------------------------------------------------------------
  Non-controlling interest                                 1              1 
----------------------------------------------------------------------------
Comprehensive loss                                      (290)          (102)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
See accompanying notes.                                                     
                                                                            
                                AGRIUM INC.                                 
                        Consolidated Balance Sheets                         
                         (Millions of U.S. dollars)                         
                                (Unaudited)                                 
                                                                            
                                         March 31,             December 31, 
----------------------------------------------------------------------------
                                         2015           2014           2014 
----------------------------------------------------------------------------
Assets                                                                      
----------------------------------------------------------------------------
  Current assets                                                            
----------------------------------------------------------------------------
    Cash and cash equivalents             780            592            848 
----------------------------------------------------------------------------
    Accounts receivable                 2,045          2,143          2,075 
----------------------------------------------------------------------------
    Income taxes receivable               112            106            138 
----------------------------------------------------------------------------
    Inventories                         4,820          4,789          3,505 
----------------------------------------------------------------------------
    Prepaid expenses and                                                    
     deposits                             315            379            710 
----------------------------------------------------------------------------
    Other current assets                  123            124            122 
----------------------------------------------------------------------------
    Assets held for sale                    -            230              - 
----------------------------------------------------------------------------
                                        8,195          8,363          7,398 
----------------------------------------------------------------------------
  Property, plant and equipment                                             
   (note 8)                             6,177          5,193          6,272 
----------------------------------------------------------------------------
  Intangibles                             660            724            695 
----------------------------------------------------------------------------
  Goodwill                              2,027          1,970          2,014 
----------------------------------------------------------------------------
  Investments in associates and                                             
   joint ventures                         595            639            576 
----------------------------------------------------------------------------
  Other assets                             69            114             78 
----------------------------------------------------------------------------
  Deferred income tax assets               72             78             75 
----------------------------------------------------------------------------
                                       17,795         17,081         17,108 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Liabilities and shareholders'                                               
 equity                                                                     
----------------------------------------------------------------------------
  Current liabilities                                                       
----------------------------------------------------------------------------
    Short-term debt (note 5)              265            397          1,527 
----------------------------------------------------------------------------
    Accounts payable                    5,672          5,721          4,197 
----------------------------------------------------------------------------
    Income taxes payable                    4              2              5 
----------------------------------------------------------------------------
    Current portion of long-                                                
     term debt                              1             54             11 
----------------------------------------------------------------------------
    Current portion of other                                                
     provisions                            88            115            113 
----------------------------------------------------------------------------
    Liabilities held for sale               -             59              - 
----------------------------------------------------------------------------
                                        6,030          6,348          5,853 
----------------------------------------------------------------------------
  Long-term debt (note 5)               4,534          3,058          3,559 
----------------------------------------------------------------------------
  Post-employment benefits                144            131            151 
----------------------------------------------------------------------------
  Other provisions                        332            410            367 
----------------------------------------------------------------------------
  Other liabilities                        75             35             69 
----------------------------------------------------------------------------
  Deferred income tax                                                       
   liabilities                            393            514            422 
----------------------------------------------------------------------------
                                       11,508         10,496         10,421 
----------------------------------------------------------------------------
  Shareholders' equity                                                      
----------------------------------------------------------------------------
    Share capital                       1,823          1,820          1,821 
----------------------------------------------------------------------------
    Retained earnings                   5,402          5,139          5,502 
----------------------------------------------------------------------------
    Accumulated other                                                       
     comprehensive loss                  (946)          (376)          (643)
----------------------------------------------------------------------------
    Equity holders of Agrium            6,279          6,583          6,680 
----------------------------------------------------------------------------
    Non-controlling interest                8              2              7 
----------------------------------------------------------------------------
    Total equity                        6,287          6,585          6,687 
----------------------------------------------------------------------------
                                       17,795         17,081         17,108 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
See accompanying notes.                                                     
                                                                            
                                AGRIUM INC.                                 
                   Consolidated Statements of Cash Flows                    
                         (Millions of U.S. dollars)                         
                                (Unaudited)                                 
                                                                            
                                                    Three months ended      
                                                        March 31,           
----------------------------------------------------------------------------
                                                        2015           2014 
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
Operating                                                                   
----------------------------------------------------------------------------
  Net earnings from continuing operations                 14             12 
----------------------------------------------------------------------------
  Adjustments for                                                           
----------------------------------------------------------------------------
    Depreciation and amortization                        111            127 
----------------------------------------------------------------------------
    Earnings from associates and joint                                      
     ventures                                              -             (1)
----------------------------------------------------------------------------
    Share-based payments                                  45             31 
----------------------------------------------------------------------------
    Unrealized loss (gain) on derivative                                    
     financial instruments                                26            (14)
----------------------------------------------------------------------------
    Unrealized foreign exchange loss (gain)               41             (2)
----------------------------------------------------------------------------
    Interest income                                      (17)           (11)
----------------------------------------------------------------------------
    Finance costs                                         56             36 
----------------------------------------------------------------------------
    Income taxes                                           5              5 
----------------------------------------------------------------------------
    Other                                                (25)            12 
----------------------------------------------------------------------------
  Interest received                                       17             12 
----------------------------------------------------------------------------
  Interest paid                                          (42)           (32)
----------------------------------------------------------------------------
  Income taxes received (paid)                            18            (36)
----------------------------------------------------------------------------
  Dividends from associates and joint ventures             1              1 
----------------------------------------------------------------------------
  Net changes in non-cash working capital                455            621 
----------------------------------------------------------------------------
Cash provided by operating activities                    705            761 
----------------------------------------------------------------------------
Investing                                                                   
----------------------------------------------------------------------------
  Acquisitions, net of cash acquired                     (60)           (16)
----------------------------------------------------------------------------
  Capital expenditures                                  (399)          (459)
----------------------------------------------------------------------------
  Capitalized borrowing costs                            (15)           (23)
----------------------------------------------------------------------------
  Purchase of investments                                (42)           (26)
----------------------------------------------------------------------------
  Proceeds from sale of investments                       18             12 
----------------------------------------------------------------------------
  Proceeds from sale of property, plant and                                 
   equipment                                              50              - 
----------------------------------------------------------------------------
  Other                                                    5            (22)
----------------------------------------------------------------------------
  Net changes in non-cash working capital                (18)            51 
----------------------------------------------------------------------------
Cash used in investing activities                       (461)          (483)
----------------------------------------------------------------------------
Financing                                                                   
----------------------------------------------------------------------------
  Short-term debt                                     (1,160)          (349)
----------------------------------------------------------------------------
  Long-term debt issued                                1,000              - 
----------------------------------------------------------------------------
  Transaction costs on long-term debt                    (14)             - 
----------------------------------------------------------------------------
  Repayment of long-term debt                            (13)           (10)
----------------------------------------------------------------------------
  Dividends paid                                        (109)          (108)
----------------------------------------------------------------------------
  Shares issued                                            1              - 
----------------------------------------------------------------------------
Cash used in financing activities                       (295)          (467)
----------------------------------------------------------------------------
Effect of exchange rate changes on cash and                                 
 cash equivalents                                        (17)            (3)
----------------------------------------------------------------------------
Decrease in cash and cash equivalents from                                  
 continuing operations                                   (68)          (192)
----------------------------------------------------------------------------
Cash and cash equivalents used in discontinued                              
 operations                                                -            (17)
----------------------------------------------------------------------------
Cash and cash equivalents - beginning of                                    
 period                                                  848            801 
----------------------------------------------------------------------------
Cash and cash equivalents - end of period                780            592 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
See accompanying notes.                                                     
                                                 
                  AGRIUM INC.                    
Consolidated Statements of Shareholders' Equity  
 (Millions of U.S. dollars, except share data)   
                  (Unaudited)                    
                                                                            
                                                                            
                                                                            
                                     Millions                               
                                           of                               
                                       common          Share       Retained 
                                       shares        capital       earnings 
----------------------------------------------------------------------------
December 31, 2013                         144          1,820          5,253 
----------------------------------------------------------------------------
  Net earnings                              -              -              2 
----------------------------------------------------------------------------
  Other comprehensive                                                       
   income (loss), net of                                                    
   tax                                                                      
----------------------------------------------------------------------------
    Other                                   -              -              - 
----------------------------------------------------------------------------
  Comprehensive income                                                      
   (loss), net of tax                       -              -              2 
----------------------------------------------------------------------------
  Dividends                                 -              -           (108)
----------------------------------------------------------------------------
  Non-controlling                                                           
   interest transactions                    -              -              - 
----------------------------------------------------------------------------
  Impact of adopting IFRS                                                   
   9 at January 1, 2014                     -              -             (8)
----------------------------------------------------------------------------
March 31, 2014                            144          1,820          5,139 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
December 31, 2014                         144          1,821          5,502 
----------------------------------------------------------------------------
  Net earnings                              -              -             12 
----------------------------------------------------------------------------
  Other comprehensive                                                       
   income (loss), net of                                                    
   tax                                                                      
----------------------------------------------------------------------------
    Other                                   -              -              - 
----------------------------------------------------------------------------
  Comprehensive income                                                      
   (loss), net of tax                       -              -             12 
----------------------------------------------------------------------------
  Dividends                                 -              -           (112)
----------------------------------------------------------------------------
  Share-based payment                                                       
   transactions                             -              2              - 
----------------------------------------------------------------------------
March 31, 2015                            144          1,823          5,402 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
See accompanying notes.                                                     

                                                                            
                                     Other comprehensive income             
                         ---------------------------------------------------
                                Comprehensive                               
                                      loss of                               
                                   associates   Available                   
                           Cash           and    for sale     Foreign       
                           flow         joint   financial    currency       
                         hedges      ventures instruments translation Total 
----------------------------------------------------------------------------
December 31, 2013             -            (7)         (8)       (264) (279)
----------------------------------------------------------------------------
  Net earnings                -             -           -           -     - 
----------------------------------------------------------------------------
  Other comprehensive                                                       
   income (loss), net of                                                    
   tax                                                                      
----------------------------------------------------------------------------
    Other                     -             1           -        (106) (105)
----------------------------------------------------------------------------
  Comprehensive income                                                      
   (loss), net of tax         -             1           -        (106) (105)
----------------------------------------------------------------------------
  Dividends                   -             -           -           -     - 
----------------------------------------------------------------------------
  Non-controlling                                                           
   interest transactions      -             -           -           -     - 
----------------------------------------------------------------------------
  Impact of adopting IFRS                                                   
   9 at January 1, 2014       -             -           8           -     8 
----------------------------------------------------------------------------
March 31, 2014                -            (6)          -        (370) (376)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
December 31, 2014           (27)          (11)          -        (605) (643)
----------------------------------------------------------------------------
  Net earnings                -             -           -           -     - 
----------------------------------------------------------------------------
  Other comprehensive                                                       
   income (loss), net of                                                    
   tax                                                                      
----------------------------------------------------------------------------
    Other                    (4)           (5)          -        (294) (303)
----------------------------------------------------------------------------
  Comprehensive income                                                      
   (loss), net of tax        (4)           (5)          -        (294) (303)
----------------------------------------------------------------------------
  Dividends                   -             -           -           -     - 
----------------------------------------------------------------------------
  Share-based payment                                                       
   transactions               -             -           -           -     - 
----------------------------------------------------------------------------
March 31, 2015              (31)          (16)          -        (899) (946)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
See accompanying notes.                                                     

                                                                            
                                                                            
                                                                            
                                                                            
                                       Equity           Non-                
                                   holders of    controlling          Total 
                                       Agrium       interest         equity 
----------------------------------------------------------------------------
December 31, 2013                       6,794              2          6,796 
----------------------------------------------------------------------------
  Net earnings                              2              1              3 
----------------------------------------------------------------------------
  Other comprehensive                                                       
   income (loss), net of                                                    
   tax                                                                      
----------------------------------------------------------------------------
    Other                                (105)             -           (105)
----------------------------------------------------------------------------
  Comprehensive income                                                      
   (loss), net of tax                    (103)             1           (102)
----------------------------------------------------------------------------
  Dividends                              (108)             -           (108)
----------------------------------------------------------------------------
  Non-controlling                                                           
   interest transactions                    -             (1)            (1)
----------------------------------------------------------------------------
  Impact of adopting IFRS                                                   
   9 at January 1, 2014                     -              -              - 
----------------------------------------------------------------------------
March 31, 2014                          6,583              2          6,585 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
December 31, 2014                       6,680              7          6,687 
----------------------------------------------------------------------------
  Net earnings                             12              2             14 
----------------------------------------------------------------------------
  Other comprehensive                                                       
   income (loss), net of                                                    
   tax                                                                      
----------------------------------------------------------------------------
    Other                                (303)            (1)          (304)
----------------------------------------------------------------------------
  Comprehensive income                                                      
   (loss), net of tax                    (291)             1           (290)
----------------------------------------------------------------------------
  Dividends                              (112)             -           (112)
----------------------------------------------------------------------------
  Share-based payment                                                       
   transactions                             2              -              2 
----------------------------------------------------------------------------
March 31, 2015                          6,279              8          6,287 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
See accompanying notes.                                                     

AGRIUM INC.

Summarized Notes to the Consolidated Financial Statements

For the three months ended March 31, 2015

(Millions of U.S. dollars, unless otherwise stated)

(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 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.

Agrium operates two business units:


--  Retail: Distributes crop nutrients, crop protection products, seed,
    merchandise and services directly to growers through a network of farm
    centers in two geographical segments: 
    --  North America, including the United States and Canada; and 
    --  International, including Australia and South America. 
--  Wholesale: Operates in North and South America and Europe producing,
    marketing and distributing crop nutrients and industrial products
    through the following businesses: 
    --  Nitrogen: Manufacturing in Alberta, Texas and Argentina; 
    --  Potash: Mining and processing in Saskatchewan; 
    --  Phosphate: Mining and production facilities in Alberta and Idaho;
        and 
    --  Other: Marketing nutrient based products from other suppliers in
        North and South America and Europe, and producing blended crop
        nutrients and ESNr (Environmentally Smart Nitrogen) polymer-coated
        nitrogen crop nutrients. 

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.

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 5, 2015. We prepared these interim financial statements in accordance with International Accounting Standard 34 Interim Financial Reporting. These 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 2014 Annual Report, available at www.agrium.com.

2.Operating Segments


Segment information by business unit      Three months ended March 31,      
----------------------------------------------------------------------------
                                                      2015                  
----------------------------------------------------------------------------
                                       Retail Wholesale   Other(1)    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 (2)                                 (8)      282       (88)      186 
----------------------------------------------------------------------------
Share of joint ventures                                                     
----------------------------------------------------------------------------
  Finance costs and income taxes            -         1         -         1 
----------------------------------------------------------------------------
  Depreciation and amortization             -         3         -         3 
----------------------------------------------------------------------------
Adjusted EBITDA (3)                        (8)      286       (88)      190 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Segment information by business unit      Three months ended March 31,      
----------------------------------------------------------------------------
                                                      2014                  
--------------------------------------------------------------------------- 
                                       Retail Wholesale   Other(1)    Total 
----------------------------------------------------------------------------
Sales - external                        2,227       852         -     3,079 
----------------------------------------------------------------------------
      - inter-segment                       5       209      (214)        - 
----------------------------------------------------------------------------
Total sales                             2,232     1,061      (214)    3,079 
----------------------------------------------------------------------------
Cost of product sold                    1,845       890      (212)    2,523 
----------------------------------------------------------------------------
Gross profit                              387       171        (2)      556 
----------------------------------------------------------------------------
Gross profit (%)                           17        16                  18 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Expenses                                                                    
----------------------------------------------------------------------------
  Selling                                 436        11        (3)      444 
----------------------------------------------------------------------------
  General and administrative               28        10        31        69 
----------------------------------------------------------------------------
  Share-based payments                      -         -        31        31 
----------------------------------------------------------------------------
  (Earnings) loss from associates                                           
   and joint ventures                      (1)        -         -        (1)
----------------------------------------------------------------------------
  Other (income) expenses                 (21)      (28)        9       (40)
----------------------------------------------------------------------------
(Loss) earnings before finance costs                                        
 and income taxes                         (55)      178       (70)       53 
----------------------------------------------------------------------------
  Finance costs                             -         -        36        36 
----------------------------------------------------------------------------
(Loss) earnings before income taxes       (55)      178      (106)       17 
----------------------------------------------------------------------------
  Depreciation and amortization            72        53         2       127 
----------------------------------------------------------------------------
  Finance costs                             -         -        36        36 
----------------------------------------------------------------------------
EBITDA (2)                                 17       231       (68)      180 
----------------------------------------------------------------------------
Share of joint ventures                                                     
----------------------------------------------------------------------------
  Finance costs and income taxes            -         4         -         4 
----------------------------------------------------------------------------
  Depreciation and amortization             -         2         -         2 
----------------------------------------------------------------------------
Adjusted EBITDA (3)                        17       237       (68)      186 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Includes inter-segment eliminations.                                    
(2) Earnings (loss) from continuing operations before finance costs, income 
    taxes, depreciation and amortization.                                   
(3) During the three months ended March 31, 2015, the chief operating       
    decision maker revised its internal reports to include Adjusted EBITDA. 
                                                                            
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 income                             (3)            (9)           (12)
----------------------------------------------------------------------------
(Loss) earnings before income                                               
 taxes                                    (85)            20            (65)
----------------------------------------------------------------------------
  Depreciation and amortization            52              5             57 
----------------------------------------------------------------------------
EBITDA                                    (33)            25             (8)
----------------------------------------------------------------------------
Adjusted EBITDA                           (33)            25             (8)
----------------------------------------------------------------------------
----------------------------------------------------------------------------

                                                                            
Segment information - Retail           Three months ended March 31,         
----------------------------------------------------------------------------
                                                   2014                     
----------------------------------------------------------------------------
                                        North                               
                                      America  International         Retail 
----------------------------------------------------------------------------
Sales - external                        1,716            511          2,227 
----------------------------------------------------------------------------
      - inter-segment                       5              -              5 
----------------------------------------------------------------------------
Total sales                             1,721            511          2,232 
----------------------------------------------------------------------------
Cost of product sold                    1,438            407          1,845 
----------------------------------------------------------------------------
Gross profit                              283            104            387 
----------------------------------------------------------------------------
Expenses                                                                    
----------------------------------------------------------------------------
  Selling                                 349             87            436 
----------------------------------------------------------------------------
  General and administrative               17             11             28 
----------------------------------------------------------------------------
  Earnings from associates and                                              
   joint ventures                           -             (1)            (1)
----------------------------------------------------------------------------
  Other income                             (1)           (20)           (21)
----------------------------------------------------------------------------
(Loss) earnings before income                                               
 taxes                                    (82)            27            (55)
----------------------------------------------------------------------------
  Depreciation and amortization            63              9             72 
----------------------------------------------------------------------------
EBITDA                                    (19)            36             17 
----------------------------------------------------------------------------
Adjusted EBITDA                           (19)            36             17 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
                                                                            
Segment information -                                                       
 Wholesale                           Three months ended March 31,           
----------------------------------------------------------------------------
                                                2015                        
----------------------------------------------------------------------------
                                                       Wholesale            
                          Nitrogen    Potash Phosphate  Other (1) 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 
----------------------------------------------------------------------------
  Loss from associates                                                      
   and joint ventures            -         -         -         3          3 
----------------------------------------------------------------------------
  Other (income) expenses       (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 
----------------------------------------------------------------------------
Share of joint ventures                                                     
----------------------------------------------------------------------------
  Finance costs and                                                         
   income taxes                  1         -         -         -          1 
----------------------------------------------------------------------------
  Depreciation and                                                          
   amortization                  3         -         -         -          3 
----------------------------------------------------------------------------
Adjusted EBITDA                160        13        43        70        286 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

                                                                            
                                                                            
Segment information -                                                       
 Wholesale                          Three months ended March 31,            
----------------------------------------------------------------------------
                                                2014                        
----------------------------------------------------------------------------
                                                       Wholesale            
                          Nitrogen    Potash Phosphate  Other (1) Wholesale 
----------------------------------------------------------------------------
Sales - external               255        83       112       402        852 
----------------------------------------------------------------------------
      - inter-segment           81        45        55        28        209 
----------------------------------------------------------------------------
Total sales                    336       128       167       430      1,061 
----------------------------------------------------------------------------
Cost of product sold           246        82       165       397        890 
----------------------------------------------------------------------------
Gross profit                    90        46         2        33        171 
----------------------------------------------------------------------------
Expenses                                                                    
----------------------------------------------------------------------------
  Selling                        3         2         1         5         11 
----------------------------------------------------------------------------
  General and                                                               
   administrative                2         2         2         4         10 
----------------------------------------------------------------------------
  Loss from associates                                                      
   and joint ventures            -         -         -         -          - 
----------------------------------------------------------------------------
  Other (income) expenses      (33)        6        (1)        -        (28)
----------------------------------------------------------------------------
Earnings (loss) before                                                      
 income taxes                  118        36         -        24        178 
----------------------------------------------------------------------------
  Depreciation and                                                          
   amortization                 20        13        13         7         53 
----------------------------------------------------------------------------
EBITDA                         138        49        13        31        231 
----------------------------------------------------------------------------
Share of joint ventures                                                     
----------------------------------------------------------------------------
  Finance costs and                                                         
   income taxes                  4         -         -         -          4 
----------------------------------------------------------------------------
  Depreciation and                                                          
   amortization                  2         -         -         -          2 
----------------------------------------------------------------------------
Adjusted EBITDA                144        49        13        31        237 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Includes product purchased for resale, ammonium sulfate, ESN and other  
    products.                                                               
                                                                            
Gross profit by                                                             
 product line                      Three months ended March 31,             
----------------------------------------------------------------------------
                                 2015                       2014            
----------------------------------------------------------------------------
                                Cost of                    Cost of          
                                product    Gross           product    Gross 
                         Sales     sold   profit    Sales     sold   profit 
----------------------------------------------------------------------------
Retail                                                                      
----------------------------------------------------------------------------
  Crop nutrients           911      785      126      896      768      128 
----------------------------------------------------------------------------
  Crop protection                                                           
   products                793      685      108      730      625      105 
----------------------------------------------------------------------------
  Seed                     308      268       40      298      252       46 
----------------------------------------------------------------------------
  Merchandise              142      122       20      186      162       24 
----------------------------------------------------------------------------
  Services and other       109       32       77      122       38       84 
----------------------------------------------------------------------------
                         2,263    1,892      371    2,232    1,845      387 
----------------------------------------------------------------------------
Wholesale                                                                   
----------------------------------------------------------------------------
  Nitrogen                 315      172      143      336      246       90 
----------------------------------------------------------------------------
  Potash                    67       60        7      128       82       46 
----------------------------------------------------------------------------
  Phosphate                181      136       45      167      165        2 
----------------------------------------------------------------------------
  Product purchased                                                         
   for resale              192      185        7      294      290        4 
----------------------------------------------------------------------------
  Ammonium sulfate,                                                         
   ESN and other           112       80       32      136      107       29 
----------------------------------------------------------------------------
                           867      633      234    1,061      890      171 
----------------------------------------------------------------------------
Other inter-segment                                                         
 eliminations             (258)    (237)     (21)    (214)    (212)      (2)
----------------------------------------------------------------------------
Total                    2,872    2,288      584    3,079    2,523      556 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
Wholesale share of                                                          
 joint ventures                                                             
----------------------------------------------------------------------------
  Nitrogen                  21       22       (1)      27       18        9 
----------------------------------------------------------------------------
  Product purchased                                                         
   for resale               26       25        1       21       20        1 
----------------------------------------------------------------------------
                            47       47        -       48       38       10 
----------------------------------------------------------------------------
Total Wholesale                                                             
 including                                                                  
 proportionate share                                                        
 in joint ventures         914      680      234    1,109      928      181 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
                                                                            
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 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

                                                                            
                                                                            
Selected volumes and per tonne                                              
 information                               Three months ended March 31,     
----------------------------------------------------------------------------
                                                       2014                 
----------------------------------------------------------------------------
                                                          Cost of           
                                        Sales   Selling   product           
                                       tonnes     price      sold    Margin 
                                       (000's) ($/tonne) ($/tonne) ($/tonne)
----------------------------------------------------------------------------
Retail                                                                      
----------------------------------------------------------------------------
  Crop nutrients                                                            
----------------------------------------------------------------------------
    North America                       1,400       502       421        81 
----------------------------------------------------------------------------
    International                         426       453       418        35 
----------------------------------------------------------------------------
  Total crop nutrients                  1,826       491       421        70 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Wholesale                                                                   
----------------------------------------------------------------------------
  Nitrogen                                                                  
----------------------------------------------------------------------------
    North America                                                           
----------------------------------------------------------------------------
      Ammonia                             179       498                     
----------------------------------------------------------------------------
      Urea                                382       441                     
----------------------------------------------------------------------------
      Other                               231       339                     
----------------------------------------------------------------------------
  Total nitrogen                          792       424       311       113 
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
  Potash                                                                    
----------------------------------------------------------------------------
    North America                         292       342                     
----------------------------------------------------------------------------
    International                         136       204                     
----------------------------------------------------------------------------
  Total potash                            428       298       191       107 
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
  Phosphate                               308       544       536         8 
----------------------------------------------------------------------------
  Product purchased for resale            805       365       360         5 
----------------------------------------------------------------------------
  Ammonium sulfate                         92       306       172       134 
----------------------------------------------------------------------------
  ESN and other                           211                               
----------------------------------------------------------------------------
Total Wholesale                         2,636       403       338        65 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
Wholesale share of joint ventures                                           
----------------------------------------------------------------------------
  Nitrogen                                 62       433       282       151 
----------------------------------------------------------------------------
  Product purchased for resale             64       328       320         8 
----------------------------------------------------------------------------
                                          126       380       302        78 
----------------------------------------------------------------------------
Total Wholesale including                                                   
 proportionate share in joint ventures  2,762       401       336        65 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
3. Expenses                                                                 
                                                    Three months ended      
Other expenses                                          March 31,           
----------------------------------------------------------------------------
                                                        2015           2014 
----------------------------------------------------------------------------
Gain on derivatives not designated as hedges,                               
 net of foreign exchange                                  (1)           (35)
----------------------------------------------------------------------------
Interest income                                          (17)           (11)
----------------------------------------------------------------------------
Gain on sale of assets                                   (38)             - 
----------------------------------------------------------------------------
Environmental remediation and asset retirement                              
 obligations                                               9             (2)
----------------------------------------------------------------------------
Bad debt expense                                           7              5 
----------------------------------------------------------------------------
Potash profit and capital tax                              5              3 
----------------------------------------------------------------------------
Other                                                      2              - 
----------------------------------------------------------------------------
                                                         (33)           (40)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
4. Earnings per Share                                                       
                                                    Three months ended      
Attributable to equity holders of Agrium                March 31,           
----------------------------------------------------------------------------
                                                        2015           2014 
----------------------------------------------------------------------------
Numerator                                                                   
----------------------------------------------------------------------------
  Net earnings from continuing operations                 12             11 
----------------------------------------------------------------------------
  Net loss from discontinued operations                    -             (9)
----------------------------------------------------------------------------
  Net earnings                                            12              2 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Denominator (millions)                                                      
----------------------------------------------------------------------------
  Weighted average number of shares                                         
   outstanding for basic and diluted earnings                               
   per share                                             144            144 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
5. Debt                                                                     
                                                                            
                                                      March 31, December 31,
----------------------------------------------------------------------------
                                                           2015         2014
----------------------------------------------------------------------------
                              Maturity   Rate (%) (1)                       
----------------------------------------------------------------------------
Short-term debt                                                             
----------------------------------------------------------------------------
  Commercial paper                2015           0.57       144        1,117
----------------------------------------------------------------------------
  Credit facilities                              4.85       121          410
----------------------------------------------------------------------------
                                                            265        1,527
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Weighted average rates at March 31, 2015.                               

During the three months ended March 31, 2015, we issued $550-million of 3.375 percent debentures and $450-million of 4.125 percent debentures due March 2025 and March 2035, respectively. The debentures were issued under our base shelf prospectus, which permits issuance in Canada and the United States of common shares, debt and other securities up to $2.5-billion, less the offering price of securities issued between the 2014 filing date of the base shelf prospectus and May 2016. Issuance of further securities under the base shelf prospectus requires filing a prospectus supplement and is subject to the availability of funding in capital markets.

6. Share-based Payments

In December 2014, the Board of Directors approved changes to the Stock Option Plan applicable to awards granted subsequent to January 1, 2015. Share-based payments granted to officers in Canada will consist of performance share units ("PSUs") and stock options without cash-settled tandem stock appreciation rights. The Stock Option Plan provides for settlement through the issuance of common shares. We determine the fair value of stock options on their grant date using the Black-Scholes model. Eligible non-officer employees will receive PSUs and restricted share units ("RSUs"). All PSU awards will include an additional performance metric based on free cash flow per share. RSU awards entitle the holder to receive the value of a common share plus accumulated dividends at the end of the three-year vesting period. We settle RSU awards in cash, with fair value determined using the Black-Scholes model.

During the three months ended March 31, 2015, we recorded $45-million (2014 - $31-million) of share-based payments expense. We granted the following share-based compensation awards to officers and employees.


                                                                            
Award type                                              Number   Grant price
----------------------------------------------------------------------------
Stock options                                          449,149        115.87
----------------------------------------------------------------------------
Stock appreciation rights                               72,370        115.87
----------------------------------------------------------------------------
Share units                                            273,163           N/A
----------------------------------------------------------------------------
----------------------------------------------------------------------------

7. Financial Instruments

Commodity price risk

Natural gas derivative financial instruments outstanding (notional amounts in millions of MMBtu)


----------------------------------------------------------------------------
                                                 March 31,                  
----------------------------------------------------------------------------
                                                   2015                     
----------------------------------------------------------------------------
                                                      Average               
                                                     contract               
                                                        price    Fair value 
                                                     (USD per     of assets 
                                Notional  Maturities    MMBtu) (liabilities)
----------------------------------------------------------------------------
Not designated as hedges                                                    
----------------------------------------------------------------------------
  NYMEX swaps                          -           -        -             - 
----------------------------------------------------------------------------
  AECO swaps                           -           -        -             - 
----------------------------------------------------------------------------
                                                                          - 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Designated as hedges                                                        
----------------------------------------------------------------------------
  NYMEX swaps                          2        2015     2.79            (1)
----------------------------------------------------------------------------
  AECO swaps                          92 2015 - 2018     2.90           (37)
----------------------------------------------------------------------------
                                                                        (38)
----------------------------------------------------------------------------
----------------------------------------------------------------------------

----------------------------------------------------------------------------
                                               December 31,                 
----------------------------------------------------------------------------
                                                   2014                     
----------------------------------------------------------------------------
                                                      Average               
                                                     contract               
                                                        price    Fair value 
                                                     (USD per     of assets 
                                Notional  Maturities    MMBtu) (liabilities)
----------------------------------------------------------------------------
Not designated as hedges                                                    
----------------------------------------------------------------------------
  NYMEX swaps                          1        2015     3.83            (1)
----------------------------------------------------------------------------
  AECO swaps                          10        2015     3.40           (10)
----------------------------------------------------------------------------
                                                                        (11)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Designated as hedges                                                        
----------------------------------------------------------------------------
  NYMEX swaps                          -           -        -             - 
----------------------------------------------------------------------------
  AECO swaps                          69 2015 - 2018     3.32           (25)
----------------------------------------------------------------------------
                                                                        (25)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
                                       Fair value of assets (liabilities)   
Maturities of natural gas derivative                                        
 contracts                               2015      2016      2017      2018 
----------------------------------------------------------------------------
Designated as hedges                       (4)      (15)      (10)       (9)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Impact of change in fair value of natural gas                               
 derivative financial instruments                   March 31,   December 31,
----------------------------------------------------------------------------
                                                         2015           2014
----------------------------------------------------------------------------
A $10-million impact to net earnings requires                               
 movement in gas prices per MMBtu                           -           1.23
----------------------------------------------------------------------------
A $10-million impact to other comprehensive                                 
 income requires movement in gas prices per                                 
 MMBtu                                                   0.95           0.19
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Use of derivatives to hedge exposure to natural gas market price risk       
----------------------------------------------------------------------------
Term (gas year - 12 months ending                                           
 October 31)                             2015      2016      2017      2018 
----------------------------------------------------------------------------
Maximum allowable (% of forecasted                                          
 gas requirements)                         75        75        75     25 (1)
----------------------------------------------------------------------------
Forecasted average monthly purchases                                        
 (millions MMBtu)                           8         9         9         9 
----------------------------------------------------------------------------
Gas requirements hedged using                                               
 derivatives designated as hedges                                           
 (%)                                       32        25        25        17 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) 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 forward contracts is identical to the hedged risk, and accordingly we have established a hedge ratio of 1:1. 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 forward contracts designated as hedges to other comprehensive income.

Currency risk

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


----------------------------------------------------------------------------
                                                 March 31,                  
----------------------------------------------------------------------------
                                                   2015                     
----------------------------------------------------------------------------
                                                                 Fair value 
                                                                  of assets 
Sell/Buy                             Notional     Maturities   (liabilities)
----------------------------------------------------------------------------
Not designated as hedges                                                    
----------------------------------------------------------------------------
  Forwards                                                                  
----------------------------------------------------------------------------
    USD/CAD                                20           2015              - 
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    CAD/USD                               928           2015              2 
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    USD/AUD                                17           2015             (3)
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    AUD/USD                                 5           2015              - 
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  Swaps                                                                     
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    USD/AUD                                41           2015             (4)
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    AUD/USD                                36           2015              6 
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  Options                                                                   
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    USD/CAD                               275           2015             (3)
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    CAD/USD                                20           2015              - 
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                                                                         (2)
----------------------------------------------------------------------------
----------------------------------------------------------------------------

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                                               December 31,                 
----------------------------------------------------------------------------
                                                   2014                     
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                                                                 Fair value 
                                                                  of assets 
Sell/Buy                             Notional     Maturities   (liabilities)
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Not designated as hedges                                                    
----------------------------------------------------------------------------
  Forwards                                                                  
----------------------------------------------------------------------------
    USD/CAD                                 -              -              - 
----------------------------------------------------------------------------
    CAD/USD                             1,675           2015             31 
----------------------------------------------------------------------------
    USD/AUD                                33           2015             (3)
----------------------------------------------------------------------------
    AUD/USD                                12           2015              - 
----------------------------------------------------------------------------
  Swaps                                                                     
----------------------------------------------------------------------------
    USD/AUD                                26           2015             (1)
----------------------------------------------------------------------------
    AUD/USD                                21           2015              2 
----------------------------------------------------------------------------
  Options                                                                   
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    USD/CAD                                 -              -              - 
----------------------------------------------------------------------------
    CAD/USD                                 -              -              - 
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                                                                         29 
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                                   March 31,              December 31,      
                           -------------------------------------------------
                                     2015                     2014          
                              Fair value               Fair value           
                           ----------------         ----------------        
Financial instruments                                                       
 measured at fair value on                 Carrying                 Carrying
 a recurring basis         Level 1 Level 2    value Level 1 Level 2    value
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Cash and cash equivalents        -     780      780       -     848      848
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Accounts receivable -                                                       
 derivatives                     -      10       10       -      33       33
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Other current financial                                                     
 assets - marketable                                                        
 securities                     20     103      123      24      70       94
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Accounts payable -                                                          
 derivatives                     -      19       19       -      18       18
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Other financial liabilities                                                 
 - derivatives                   -      31       31       -      22       22
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Other financial instruments                                                 
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Current portion of long-                                                    
 term debt                                                                  
----------------------------------------------------------------------------
 Floating rate debt -                                                       
  amortized cost                 -       1        1       -      11       11
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Long-term debt                                                              
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 Debentures - amortized                                                     
  cost                           -   4,976    4,468       -   3,879    3,483
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 Fixed and floating rate                                                    
  debt - amortized cost          -      66       66       -      76       76
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There have been no transfers between Level 1 and Level 2 fair value measurements in the three months ended March 31, 2015 or March 31, 2014. We do not measure any of our financial instruments using Level 3 inputs.

8. Additional Information

Property, plant and equipment

At the end of 2014, we completed a major turnaround to tie in the expansion project at our Vanscoy potash facility. The assets related to the expansion project became available for use during the three months ended March 31, 2015 resulting in the transfer of $2.6-billion from assets under construction to buildings and improvements, and machinery and equipment.

During the three months ended March 31, 2015, we added $197-million to assets under construction at our Vanscoy potash facility to facilitate the ramp-up of annual capacity by one million tonnes and $121-million to assets under construction at our Borger Nitrogen facility.


Dividends                                                                   
                                  March 31,                                 
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                                    2015                                    
----------------------------------------------------------------------------
                Declared                                   Paid to     Total
--------------------------------------------------                          
Effective                     Per share     Total     Shareholders          
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December 11, 2014                  0.78       112 January 21, 2015       109
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February 24, 2015                  0.78       112   April 16, 2015       N/A
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Normal course issuer bid

In January 2015, the Toronto Stock Exchange accepted our Normal Course Issuer Bid ("NCIB"). Under the NCIB, we may purchase for cancellation up to 5 percent of our currently issued and outstanding common shares until January 25, 2016. 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. From April 1, 2015 to May 5, 2015, we purchased 711,648 shares at an average share price of $105.39 for total consideration of $75-million.

9. Significant Accounting Policies

Except as described below, the accounting policies applied in these interim financial statements are the same as those applied in our 2014 Annual Report.

Changes in Accounting Estimates

As at January 1, 2015, we changed the method of depreciation for the Vanscoy potash facility mining and milling assets from the straight-line basis to the units of production basis. These assets will be depreciated based on the shorter of estimates of reserves or service lives. The change in method of depreciation reflects our expectations of changes in the expected pattern of consumption of the future economic benefits of the assets based on a review of our Vanscoy potash facility. In December 2014, the Vanscoy potash facility completed a major turnaround and recommenced production in an expanded facility that added approximately 50 percent to its existing capacity. The change in estimate is accounted for prospectively. The current and expected reduction in depreciation expense is 2015 - $32-million and 2016 - $12-million.

As at January 1, 2015, based on a review of the expected timing of future expenditures, we revised our estimate for decommissioning costs of our nitrogen assets. The revision in estimate decreased our asset retirement obligation provision by $55-million and decreased our property, plant and equipment by $55-million. The current reduction in depreciation and accretion expense for the three months ended March 31, 2015 is $1-million. The expected reduction in depreciation and accretion expense is $4-million in each of the years 2015 through 2018.

Contacts:
Investor/Media Relations:
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
Contact us at: www.agrium.com

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