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Agrium Reports Solid Second Quarter Earnings

August 3, 2016 - ALL AMOUNTS ARE STATED IN U.S.$


/EINPresswire.com/ -- CALGARY, AB--(Marketwired - August 03, 2016) - Agrium Inc. (TSX: AGU) (NYSE: AGU) announced today its 2016 second quarter earnings, with net earnings attributable to equity holders of Agrium of $564-million ($4.08 diluted earnings per share) compared to $674-million ($4.71 diluted earnings per share) in the second quarter of 2015. The reduction in net earnings this quarter was driven primarily by continued weakness in global nutrient prices. This was partially offset by solid demand for crop inputs, lower costs and strong margins within our ag-retail distribution business.

Highlights:

  • Second quarter adjusted net earnings were $578-million or $4.18 per share (see page 2 for adjusted net earnings reconciliation)1.
  • Retail earnings results were the second highest in history and in line with our guidance, due to strong margins which were supported by our proprietary product lines, lower costs and an increase in normalized comparable store sales.
  • Wholesale delivered solid operational results due to industry-leading nitrogen margins, higher overall production and sales volumes and lower costs.
  • Agrium has acquired 33 retail locations with expected annual sales in excess of $230-million on a year-to-date basis. In addition to these completed transactions, Agrium is currently working on the completion of the Cargill and another retail acquisition which together would add over 30 locations and represent over $300-million of expected annual sales. As a result, Agrium will easily surpass the pace of retail acquisitions over the past couple of years.
  • Agrium has invested $15-million into Finistere Ventures Fund II, a leading AgTech venture fund focused on identifying and investing in early-to-growth stage companies within plant nutrition, biologicals, seed technology, digital agriculture and novel farm systems.
  • Annual guidance range has been revised to $5.00 to $5.30 diluted earnings per share due to the weak outlook for nutrient prices (see page 3 for guidance assumptions and further details).

"Agrium reported solid second quarter results driven by lower costs and strong margins across most of our business portfolio, supported by a stable cash flow from our retail operations. Our steadfast focus on operational excellence continues to deliver results and we believe our strategy and assets will create long-term shareholder value," commented Chuck Magro, Agrium's President and CEO.

"We also made excellent progress on our growth and innovation strategy this quarter. We surpassed the number of retail locations acquired annually over the past couple of years and have a full pipeline of acquisitions and new build opportunities remaining in 2016," added Mr. Magro. "Our recent investment in Finistere supports our agricultural innovation and technology strategy which will be instrumental in meeting the challenge of feeding a growing global population, providing our customers with new products and solutions, and generating future earnings growth for shareholders," concluded Mr. Magro.

1 Effective tax rate of 27.5 percent for the second quarter and first half of 2016 used for the adjusted net earnings and per share calculations. These are non-IFRS measures which represent net earnings adjusted for certain income (expenses) that are considered to be non-operational in nature. We believe these measures provide meaningful comparison to the earnings of other companies by eliminating share-based payments expense (recovery), gains (losses) on foreign exchange and related gains (losses) on non-qualifying derivative hedges and significant non-operating, non-recurring items. These should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with IFRS and may not be directly comparable to similar measures presented by other companies.

ADJUSTED NET EARNINGS RECONCILIATION

----------------------------------------------------------------------------
                         Three months ended           Six months ended      
                           June 30, 2016               June 30, 2016        
----------------------------------------------------------------------------
                                    Net                         Net         
(millions of U.S.              earnings     Per            earnings     Per 
 dollars, except per             impact   share              impact   share 
 share amounts)       Expense (post-tax)     (a)  Expense (post-tax)     (a)
----------------------------------------------------------------------------
                                    565    4.08                 568    4.09 
----------------------------------------------------------------------------
Adjustments:                                                                
----------------------------------------------------------------------------
  Share-based                                                               
   payments                13         9    0.07        17        12    0.09 
----------------------------------------------------------------------------
  Foreign exchange                                                          
   loss  net of non-                                                        
   qualifying                                                               
   derivatives              6         4    0.03         8         6    0.04 
----------------------------------------------------------------------------
Adjusted net                                                                
 earnings (b)                       578    4.18                 586    4.22 
----------------------------------------------------------------------------
(a) This represents diluted per share information attributable to   equity  
    holders of Agrium.                                                      
(b) Effective tax rate of 27.5 percent for the second quarter and   first   
    half of 2016 was used for the adjusted net earnings and per share       
    calculations.                                                           

MARKET OUTLOOK

Agricultural and Crop Input Fundamentals

  • Agricultural prices were volatile over the past quarter. Crop prices increased through mid-June, driven by declining South American corn and soybean production estimates, but crop prices declined again in July due to higher than expected planted acreage and very favorable growing conditions across North America. There is potential for production of U.S. corn and soybeans to set record highs, barring a significant deterioration in growing conditions in August and September.
  • While this has pressured crop prices, grower sentiment has been supported by the potential for strong crop yields and we expect robust fungicide and nutritional demand in order to preserve yield potential.
  • Wet conditions across most North American growing regions have created an ideal environment for disease development and delayed herbicide applications. This factor and the desire by growers to protect strong yield potential are expected to support strong fungicide and herbicide demand this summer.
  • Strong crop development this year is likely to result in high levels of nutrient removal from soils and is expected to support fall application demand.

Nitrogen

  • Nitrogen prices have been pressured due to slow demand from India and seasonal pricing pressure. Indian urea imports in 2016 have been 19 percent below last year's levels; however, the import pace is expected to improve in the second half of the year.
  • Chinese urea exports were down 25 percent in the first half of 2016, as Chinese export prices have been uncompetitive with most international markets and domestic production has been declining continuously since March 2016.
  • U.S. offshore urea imports over the past three months are down approximately 30 percent compared to a year ago as North American prices have been below import parity levels.
  • Nitrogen buyers have managed inventories carefully entering a period when there is the potential for new capacity to come on-stream. We expect this will lead to pent-up demand becoming apparent closer to the North American seasonal application period.

Potash

  • End users have managed inventories carefully over the past year, which has pressured potash producer shipments but depleted inventory levels among end users globally.
  • Deliveries in the second half of 2016 are expected to be supported by a number of positive factors, including the normal seasonal upturn in demand and the recent supply agreements with China and India which have provided increased certainty to the market. In Brazil, firm domestic crop prices have supported stronger than expected demand so far in 2016 and North American retail inventories are believed to be below average levels.
  • We do not expect any additional capacity to come on-stream in the second half of 2016. Global effective potash capacity is now more than 2 percent below where it was in 2014, largely due to the recent capacity closures.

Phosphate

  • Indian diammonium phosphate (DAP) imports are down close to 40 percent in the first half of 2016, due partly to high domestic inventories at the beginning of the year. The weak Indian demand has been a source of pressure on the market; however, the demand outlook for the remainder of 2016 is more positive as the monsoon season progresses and reductions in the maximum retail price are expected to be positive for grower demand.
  • Another source of pressure has been Brazilian phosphate imports, which have not improved from depressed 2015 levels. The demand outlook for the second half is positive given the firm crop price environment in Brazil and the fact that import demand for other nutrients has increased year-over-year.
  • Chinese exports of DAP and monoammonium phosphate (MAP) were down 31 percent in the first half of 2016. We expect that the pace of Chinese phosphate exports will increase in the second half of 2016, but continue to be below 2015 levels.
  • In the first half of 2016, the U.S. phosphate market was pressured by exports being down 15 percent and imports into the U.S. up more than 40 percent year-over-year. This was partly offset by production being lower and domestic shipments being higher than the first six months of last year. Similar to other products, we expect a return to a more normal fall application window to support strong second half U.S. phosphate shipments.

2016 ANNUAL GUIDANCE

Based on our Market Outlook, Agrium expects to achieve annual diluted earnings per share of $5.00 to $5.30 in 2016 compared to our previous estimate of $5.25 to $6.25. We have lowered our annual guidance range due to an expected weak pricing environment for all nutrients, partially offset by expected continued strong performance by our Retail business and lower year-over-year costs. The second half 2016 diluted earnings per share range based on the annual guidance range is weighted over 80 percent to the fourth quarter.

Our estimates of nitrogen and potash production remain between 3.5 million to 3.7 million and 2.3 million to 2.4 million tonnes, respectively.

We are anticipating strong demand for Retail crop nutrient sales tonnes this fall and have narrowed our expectation for Retail EBITDA1 between $1.1-billion to $1.15-billion, and Retail nutrient sales tonnes between 9.8 million to 10.2 million tonnes.

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

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

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

2016 ANNUAL GUIDANCE RANGE AND ASSUMPTIONS

----------------------------------------------------------------------------
                                                          Annual            
                                                         Low           High 
----------------------------------------------------------------------------
Diluted EPS (in U.S. dollars)                          $5.00          $5.30 
----------------------------------------------------------------------------
Guidance assumptions:                                                       
----------------------------------------------------------------------------
Wholesale:                                                                  
----------------------------------------------------------------------------
  Production tonnes:                                                        
----------------------------------------------------------------------------
    Nitrogen (millions)                                  3.5            3.7 
----------------------------------------------------------------------------
    Potash (millions)                                    2.3            2.4 
----------------------------------------------------------------------------
Retail:                                                                     
----------------------------------------------------------------------------
  EBITDA (millions of U.S. dollars)                   $1,100         $1,150 
----------------------------------------------------------------------------
  Crop nutrient sales tonnes (millions)                  9.8           10.2 
----------------------------------------------------------------------------
Other:                                                                      
----------------------------------------------------------------------------
  Tax rate                                                28%            27%
----------------------------------------------------------------------------
  Sustaining capital expenditures (millions of                              
   U.S. dollars)                                        $500           $550 
----------------------------------------------------------------------------
  Total capital expenditures (millions of U.S.                              
   dollars)                                             $800           $900 
----------------------------------------------------------------------------
  Canada/U.S. foreign exchange rate                    $1.30          $1.34 
----------------------------------------------------------------------------
  NYMEX gas price ($/MMBtu)                            $2.65          $2.25 
----------------------------------------------------------------------------

MANAGEMENT'S DISCUSSION AND ANALYSIS

August 3, 2016

Unless otherwise noted, all financial information in this Management's Discussion and Analysis (MD&A) is prepared using accounting policies in accordance with International Financial Reporting Standards (IFRS) and is presented in accordance with International Accounting Standard 34 - Interim Financial Reporting. All comparisons of results for the second quarter of 2016 (three months ended June 30, 2016) and for the six months ended June 30, 2016 are against results for the second quarter of 2015 (three months ended June 30, 2015) and six months ended June 30, 2015. All dollar amounts refer to United States (U.S.) dollars except where otherwise stated. The financial measure cash operating coverage ratio used in this MD&A is not prescribed by IFRS. Our method of calculation may not be directly comparable to that of other companies. We consider this non-IFRS financial measure to provide useful information to both management and investors in measuring our financial performance. This non-IFRS financial measure should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with IFRS. Please refer to the section entitled "Non-IFRS Financial Measures" of this MD&A for further details, including a reconciliation of such measure to its most directly comparable measure calculated in accordance with IFRS.

The following interim MD&A is as of August 3, 2016 and should be read in conjunction with the Consolidated Interim Financial Statements for the three months and six months ended June 30, 2016 (the "Consolidated Financial Statements"), and the annual MD&A and financial statements for the year ended December 31, 2015 included in our 2015 Annual Report to Shareholders. The Board of Directors carries out its responsibility for review of this disclosure principally through its Audit Committee, comprised exclusively of independent directors. The Audit Committee reviews, and prior to publication, approves this disclosure, pursuant to the authority delegated to it by the Board of Directors. No update is provided to the disclosure in our annual MD&A except for material information since the date of our annual MD&A. In respect of Forward-Looking Statements, please refer to the section titled "Forward-Looking Statements" in this MD&A.

2016 Second Quarter Operating Results

CONSOLIDATED NET EARNINGS

Financial Overview                                                          
                                                                            
----------------------------------------------------------------------------
                    Three months ended June 30,  Six months ended June 30,  
(millions of U.S.                                                           
 dollars, except per                                                        
 share amounts and                            %                           % 
 where noted)         2016   2015 Change Change   2016   2015 Change Change 
----------------------------------------------------------------------------
Sales                6,415  6,992   (577)    (8) 9,140  9,864   (724)    (7)
----------------------------------------------------------------------------
Gross profit         1,525  1,708   (183)   (11) 2,079  2,292   (213)    (9)
----------------------------------------------------------------------------
Expenses               677    682     (5)    (1) 1,156  1,191    (35)    (3)
----------------------------------------------------------------------------
Earnings before                                                             
 finance costs and                                                          
 income taxes          848  1,026   (178)   (17)   923  1,101   (178)   (16)
----------------------------------------------------------------------------
Net earnings           565    675   (110)   (16)   568    689   (121)   (18)
----------------------------------------------------------------------------
Diluted earnings per                                                        
 share                4.08   4.71  (0.63)   (13)  4.09   4.78  (0.69)   (14)
----------------------------------------------------------------------------
Effective tax rate                                                          
 (%)                  27.5     30   (2.5)   N/A   27.5     29   (1.5)   N/A 
----------------------------------------------------------------------------
Sales and Gross Profit                                                      
                                                                            
----------------------------------------------------------------------------
                 Three months ended June 30,    Six months ended June 30,   
(millions of                                                                
 U.S. dollars)       2016      2015    Change      2016      2015    Change 
----------------------------------------------------------------------------
Sales                                                                       
----------------------------------------------------------------------------
  Retail            5,791     6,160      (369)    8,081     8,423      (342)
----------------------------------------------------------------------------
  Wholesale           882     1,174      (292)    1,531     2,041      (510)
----------------------------------------------------------------------------
  Other              (258)     (342)       84      (472)     (600)      128 
----------------------------------------------------------------------------
                    6,415     6,992      (577)    9,140     9,864      (724)
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
Gross profit                                                                
----------------------------------------------------------------------------
  Retail            1,279     1,264        15     1,681     1,635        46 
----------------------------------------------------------------------------
  Wholesale           201       409      (208)      354       643      (289)
----------------------------------------------------------------------------
  Other                45        35        10        44        14        30 
----------------------------------------------------------------------------
                    1,525     1,708      (183)    2,079     2,292      (213)
----------------------------------------------------------------------------
  • Retail's sales decreased primarily as a result of lower crop nutrient prices. Retail's gross profit increased for both the second quarter and first half of 2016 despite lower sales due to an increase in higher-margin proprietary product sales.
  • Wholesale's sales and gross profit decreased compared to the second quarter and first half of last year primarily due to lower realized selling prices, which were consistent with weak benchmark prices.

Expenses

  • General and administrative expenses decreased by $4-million (6 percent) and $16-million (12 percent) for the second quarter and first half of 2016, respectively, compared to the same periods last year as a result of reduced payroll and office expenses.
  • Our share-based payments expense increased by $7-million and decreased by $34-million in the second quarter and first half of 2016, respectively, compared to the same periods last year due to the movements in our share price.
  • We completed the sale of our non-core Purchase for Resale terminals resulting in a gain on sale of assets of $38-million in the first quarter of 2015.
  • Earnings from associates and joint ventures increased in the second quarter and first half of 2016 as we recorded our share of Profertil S.A. ("Profertil")'s reversal of a gas tariff provision. We also recorded a $6-million loss related to our share of the losses in Canpotex Limited ("Canpotex") as it cancelled its plan to build an export terminal in British Columbia. Additionally, we terminated a distribution agreement with one of our U.S. distributors and incurred costs of $8-million in the second quarter of 2016.
  • For further breakdown on Other expenses see table provided below:
Other expenses breakdown                                                    
----------------------------------------------------------------------------
                      Three months ended             Six months ended       
                           June 30,                      June 30,           
(millions of                                                                
 U.S. dollars)       2016      2015    Change      2016      2015    Change 
----------------------------------------------------------------------------
Loss on foreign                                                             
 exchange and                                                               
 related                                                                    
 derivatives            6         1         5         8         -         8 
----------------------------------------------------------------------------
Interest income       (16)      (16)        -       (29)      (33)        4 
----------------------------------------------------------------------------
Gain on sale of                                                             
 assets                 -         -         -         -       (38)       38 
----------------------------------------------------------------------------
Environmental                                                               
 remediation and                                                            
 asset                                                                      
 retirement                                                                 
 obligations            3         -         3         5         9        (4)
----------------------------------------------------------------------------
Bad debt expense       21        25        (4)       29        32        (3)
----------------------------------------------------------------------------
Potash profit                                                               
 and capital tax        5         5         -         8        10        (2)
----------------------------------------------------------------------------
Other                  32        11        21        41        13        28 
----------------------------------------------------------------------------
                       51        26        25        62        (7)       69 
----------------------------------------------------------------------------

Depreciation and Amortization

Depreciation and amortization breakdown

----------------------------------------------------------------------------
                                        Three months ended June 30,         
----------------------------------------------------------------------------
                                                    2016                    
----------------------------------------------------------------------------
                                 Cost of                  General           
                                 product                      and           
(millions of U.S. dollars)          sold   Selling administrative     Total 
----------------------------------------------------------------------------
Retail                                 1        67              -        68 
----------------------------------------------------------------------------
Wholesale                                                                   
----------------------------------------------------------------------------
  Nitrogen                            23         -              -        23 
----------------------------------------------------------------------------
  Potash                              31         -              -        31 
----------------------------------------------------------------------------
  Phosphate                           13         -              -        13 
----------------------------------------------------------------------------
  Wholesale Other (a)                  6         -              1         7 
----------------------------------------------------------------------------
                                      73         -              1        74 
----------------------------------------------------------------------------
Other                                  -         -              3         3 
----------------------------------------------------------------------------
Total                                 74        67              4       145 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                        Three months ended June 30,         
----------------------------------------------------------------------------
                                                   2015                     
----------------------------------------------------------------------------
                                 Cost of                  General           
                                 product                      and           
(millions of U.S. dollars)          sold   Selling administrative     Total 
----------------------------------------------------------------------------
Retail                                 2        64              -        66 
----------------------------------------------------------------------------
Wholesale                                                                   
----------------------------------------------------------------------------
  Nitrogen                            20         -              -        20 
----------------------------------------------------------------------------
  Potash                              13         -              -        13 
----------------------------------------------------------------------------
  Phosphate                           11         -              -        11 
----------------------------------------------------------------------------
  Wholesale Other (a)                  3         -              2         5 
----------------------------------------------------------------------------
                                      47         -              2        49 
----------------------------------------------------------------------------
Other                                  -         -              4         4 
----------------------------------------------------------------------------
Total                                 49        64              6       119 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                         Six months ended June 30,          
----------------------------------------------------------------------------
                                                    2016                    
----------------------------------------------------------------------------
                                 Cost of                  General           
                                 product                      and           
(millions of U.S. dollars)          sold   Selling administrative     Total 
----------------------------------------------------------------------------
Retail                                 3       130              2       135 
----------------------------------------------------------------------------
Wholesale                                                                   
----------------------------------------------------------------------------
  Nitrogen                            36         -              -        36 
----------------------------------------------------------------------------
  Potash                              51         -              -        51 
----------------------------------------------------------------------------
  Phosphate                           23         -              -        23 
----------------------------------------------------------------------------
  Wholesale Other (a)                  7         -              1         8 
----------------------------------------------------------------------------
                                     117         -              1       118 
----------------------------------------------------------------------------
Other                                  -         -              6         6 
----------------------------------------------------------------------------
Total                                120       130              9       259 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                         Six months ended June 30,          
----------------------------------------------------------------------------
                                                   2015                     
----------------------------------------------------------------------------
                                 Cost of                  General           
                                 product                      and           
(millions of U.S. dollars)          sold   Selling administrative     Total 
----------------------------------------------------------------------------
Retail                                 3       118              2       123 
----------------------------------------------------------------------------
Wholesale                                                                   
----------------------------------------------------------------------------
  Nitrogen                            38         -              -        38 
----------------------------------------------------------------------------
  Potash                              27         -              -        27 
----------------------------------------------------------------------------
  Phosphate                           24         -              -        24 
----------------------------------------------------------------------------
  Wholesale Other (a)                  8         -              2        10 
----------------------------------------------------------------------------
                                      97         -              2        99 
----------------------------------------------------------------------------
Other                                  -         -              8         8 
----------------------------------------------------------------------------
Total                                100       118             12       230 
----------------------------------------------------------------------------
(a) This includes product purchased for resale, ammonium                    
    sulfate,Environmentally Smart Nitrogen® (ESN) and other products. 
  • Depreciation and amortization expense increased in second quarter and first half of 2016 as we increased our sales volumes from the ramp-up of production at our Vanscoy potash facility.

Effective Tax Rate

  • The effective tax rate of 27.5 percent for both the second quarter and first half of 2016 was lower compared to the effective tax rates of 30 percent and 29 percent for the second quarter and first half of 2015, respectively, due to a decrease of income earned in high-taxed jurisdictions.

BUSINESS SEGMENT PERFORMANCE

Retail                                                                      
                                                                            
----------------------------------------------------------------------------
                                            Three months ended June 30,     
(millions of U.S. dollars,                                                  
 except where noted)                     2016           2015         Change 
----------------------------------------------------------------------------
Sales                                   5,791          6,160           (369)
----------------------------------------------------------------------------
Cost of product sold                    4,512          4,896           (384)
----------------------------------------------------------------------------
Gross profit                            1,279          1,264             15 
----------------------------------------------------------------------------
EBITDA                                    744            713             31 
----------------------------------------------------------------------------
Selling and general and                                                     
 administrative expenses                  598            612            (14)
----------------------------------------------------------------------------
  • Retail reported near-record second quarter and first half gross profit and EBITDA, despite total sales being lower year-over-year as a result of depressed nutrient prices. The increase in gross profit was due to strong margins across most product lines and a reduction in selling, general and administration costs contributed to this quarter's results.
  • Total Retail selling and general and administrative expenses were down $14-million from the second quarter of last year. Our continued focus on operational excellence resulted in our cash operating coverage ratio being down 4 percentage points on a rolling four quarter basis over the same period last year and strong results for the current quarter.
  • U.S. operations experienced solid demand this quarter for all major crop inputs and benefited from higher sales of proprietary products. This resulted in a $35-million increase in our U.S. EBITDA. Our Canadian operations achieved a slightly higher EBITDA over the second quarter of last year, as lower general and administrative expenses more than offset a slight reduction in gross profit.
  • Internationally, South American EBITDA increased by $7-million due to strong crop protection gross profit and lower general and administrative expenses, while Australian EBITDA was down $9-million compared to the prior year, primarily due to lower fertilizer volumes in the region.
Retail sales and gross profit by product line                               
----------------------------------------------------------------------------
                                   Three months ended June 30,              
                                                               Gross profit 
                            Sales            Gross profit          (%)      
----------------------------------------------------------------------------
(millions of U.S.                                                           
 dollars, except                                                            
 where noted)         2016   2015 Change   2016   2015 Change   2016   2015 
----------------------------------------------------------------------------
Crop nutrients       2,190  2,608   (418)   433    454    (21)    20     17 
----------------------------------------------------------------------------
Crop protection                                                             
 products            2,250  2,169     81    471    457     14     21     21 
----------------------------------------------------------------------------
Seed                   926    982    (56)   181    164     17     20     17 
----------------------------------------------------------------------------
Merchandise            162    174    (12)    28     27      1     17     16 
----------------------------------------------------------------------------
Services and other     263    227     36    166    162      4     63     71 
----------------------------------------------------------------------------

Crop nutrients

  • Total crop nutrient sales were 16 percent lower this quarter compared to the same period last year due primarily to significantly lower prices across all nutrients.
  • Total crop nutrient volumes were slightly lower this quarter, compared to the same period last year, primarily as a result of the early spring in the U.S., which resulted in strong volumes in the first quarter. Year to date, nutrient sales volumes are 3 percent higher in the U.S. compared to the prior year. In Canada, second quarter nutrient sales volumes were up 5 percent compared to the same period last year. However, they were down 3 percent when compared to the first six months of the year, after a slow first quarter and a large increase in pulse crop acreage this year which requires less nitrogen fertilizer. In South America, nutrient volumes were up 26 percent during the quarter and 19 percent for the first six months of the year due to an improved political environment in Argentina which is supportive of the agricultural industry.
  • Total crop nutrient gross profit was lower by 5 percent this quarter due to a slight reduction in per tonne nutrient margins this year and to an early start to the spring season which shifted volumes into the first quarter. North American nutrient margin per tonne was similar to last year, despite average nutrient selling prices being 16 percent lower this year. As a result, gross profit as a percentage of sales rose to 20 percent this quarter, compared to 17 percent in the second quarter of 2015.

Crop protection products

  • Total crop protection sales were up 4 percent this quarter, and were higher in all regions as weather conditions supported crop protection applications.
  • Crop protection margins as a percentage of sales this quarter were similar to last year's levels, supported by a higher proportion of proprietary product sales this quarter.
  • Proprietary crop protection sales as a percentage of total crop protection sales this quarter increased 2 percent over the prior year.

Seed

  • Seed sales were down 6 percent this quarter compared to the same period last year, as significant seed volumes were drawn into the first quarter due to the early start to spring seeding.
  • Total seed margins as a percentage of sales this quarter increased 3 percentage points compared to the same period last year. The significant increase in margins was due to strong volumes and margins for our proprietary seed products and increased sales of treated seed. The acreage shift to corn and cotton in 2016 also resulted in higher volumes of these seeds this year, which have higher margins than other crops.

Merchandise

  • Merchandise sales decreased 7 percent compared to the same period last year primarily due to lower fuel volumes and pricing in Canada.
  • Gross profit as a percentage of sales increased 1 percent this quarter, primarily due to a reduction in the lower-margin Canadian fuel business.

Services and other

  • Sales for services and other was up 16 percent this quarter, primarily due to higher livestock marketing sales in Australia as a result of higher cattle prices.
Wholesale                                                                   
                                                                            
----------------------------------------------------------------------------
                                            Three months ended June 30,     
(millions of U.S. dollars,                                                  
 except where noted)                     2016           2015         Change 
----------------------------------------------------------------------------
Sales                                     882          1,174           (292)
----------------------------------------------------------------------------
Sales volumes (tonnes 000's)            2,736          2,644             92 
----------------------------------------------------------------------------
Cost of product sold                      681            765            (84)
----------------------------------------------------------------------------
Gross profit                              201            409           (208)
----------------------------------------------------------------------------
EBITDA                                    254            429           (175)
----------------------------------------------------------------------------
Expenses                                   21             29             (8)
----------------------------------------------------------------------------
  • Total sales were lower than the same period last year due to lower global fertilizer prices across all nutrients. Lower prices were partially offset by higher sales volumes, primarily from increased potash availability resulting from the post expansion ramp-up of production at the Vanscoy facility.
  • Lower sales were further offset by a reduction in fixed costs this quarter compared to the same period last year as a result of our ongoing cost review process.
Wholesale NPK product information                                           
----------------------------------------------------------------------------
                                  Three months ended June 30,               
                        Nitrogen            Potash            Phosphate     
----------------------------------------------------------------------------
                    2016  2015 Change  2016  2015 Change  2016  2015 Change 
----------------------------------------------------------------------------
Gross profit (U.S.                                                          
 dollar millions)    148   270   (122)   16    68    (52)    5    29    (24)
----------------------------------------------------------------------------
Sales volumes                                                               
 (tonnes 000's)    1,168 1,223    (55)  697   509    188   305   290     15 
----------------------------------------------------------------------------
Selling price                                                               
 ($/tonne)           337   451   (114)  194   327   (133)  526   665   (139)
----------------------------------------------------------------------------
Cost of product                                                             
 sold ($/tonne)      210   231    (21)  172   193    (21)  508   563    (55)
----------------------------------------------------------------------------
Gross margin                                                                
 ($/tonne)           127   220    (93)   22   134   (112)   18   102    (84)
----------------------------------------------------------------------------

Nitrogen

  • Nitrogen gross profit was down 45 percent compared to the same period last year primarily due to significantly lower global benchmark nitrogen prices, partially offset by lower cost of production.
  • Sales volumes were slightly lower than the same period last year due primarily to an extended planned outage at the Borger facility, and a strong pull of ammonia volumes in the first quarter of 2016. UAN sales volumes were also lower due to the divestiture of the West Sacramento upgrade facility at the end of 2015.
  • Realized selling prices per tonne were down 25 percent compared to the same period last year due to lower international and domestic nitrogen prices.
  • Cost of product sold per tonne was 9 percent lower than the same period last year due to lower natural gas prices.
Natural gas prices: North American indices and North American Agrium prices 
----------------------------------------------------------------------------
                                                 Three months ended June 30,
(U.S. dollars per MMBtu)                                2016           2015 
----------------------------------------------------------------------------
Overall gas cost excluding realized derivative                              
 impact                                                 1.28           2.34 
----------------------------------------------------------------------------
Realized derivative impact                              0.48           0.05 
----------------------------------------------------------------------------
Overall gas cost                                        1.76           2.39 
----------------------------------------------------------------------------
Average NYMEX                                           1.95           2.67 
----------------------------------------------------------------------------
Average AECO                                            0.97           2.16 
----------------------------------------------------------------------------

Potash

  • Potash gross profit declined 76 percent compared to the same period last year due to downward pressure on potash benchmark prices.
  • Lower selling prices were partly offset by higher sales volumes this year. Sales volumes were 37 percent higher than the same period last year, as second quarter volumes last year were impacted by the ramp-up of our Vanscoy potash facility expansion. International sales volumes were 47 percent higher than the second quarter of last year, due to Agrium's higher Canpotex allocation in 2016 and higher product availability.
  • Realized selling prices have contracted sharply over the past year, with international selling prices down 37 percent period-over-period and an even larger decline of 41 percent in North American markets.
  • Cost of product sold per tonne was 11 percent lower than the same period last year. The lower costs are predominately due to the higher production volumes associated with the ramp-up of our Vanscoy facility expansion and a weaker Canadian dollar.

Phosphate

  • Phosphate gross profit was 83 percent lower than the same period last year due predominately to lower realized selling prices. Higher sales volumes and lower cost of product sold per tonne partially offset the impact from the significant decline in prices.
  • Sales volumes were up 5 percent compared to the second quarter of 2015, as phosphate sales were slightly delayed this year.

Wholesale Other

Wholesale Other: gross profit breakdown                                     
----------------------------------------------------------------------------
                                            Three months ended June 30,     
(millions of U.S. dollars)               2016           2015         Change 
----------------------------------------------------------------------------
Ammonium sulfate                           20             21             (1)
----------------------------------------------------------------------------
ESN                                        12             14             (2)
----------------------------------------------------------------------------
Product purchased for resale               (1)             1             (2)
----------------------------------------------------------------------------
Other                                       1              6             (5)
----------------------------------------------------------------------------
                                           32             42            (10)
----------------------------------------------------------------------------
  • Gross profit from Wholesale Other was 24 percent lower than the same period last year due predominately to lower realized selling prices for all Other products, partially offset by higher ammonium sulfate and ESN sales volumes.

Expenses

  • Wholesale expenses decreased by $8-million in the current quarter. This was primarily due to a reversal of a gas tariff provision in Profertil, resulting in a $21-million increase to our earnings from associates and joint ventures. This was partially offset by a $6-million loss related to our share in Canpotex's losses from the cancellation of its export terminal in British Columbia.

Other

EBITDA for our Other non-operating business unit for the second quarter of 2016 had a net expense of $5-million, compared to net earnings of $3-million for the second quarter of 2015. The variance was primarily due to a higher share-based payments expense of $7-million as a result of the movement in our share price.

FINANCIAL CONDITION

The following are changes to working capital on our Consolidated Balance Sheets for the six months ended June 30, 2016 compared to December 31, 2015.

----------------------------------------------------------------------------
(millions of                                                                
 U.S. dollars,                                                              
 except where       June  December                        Explanation of the
 noted)         30, 2016  31, 2015  $ Change  % Change    change in balance 
----------------------------------------------------------------------------
Current assets                                                              
  Cash and cash      307       515      (208)      (40%)  See discussion    
   equivalents                                            under the section 
                                                          "Liquidity and    
                                                          Capital           
                                                          Resources".       
                                                                            
----------------------------------------------------------------------------
  Accounts         3,638     2,053     1,585        77%   Sales during the  
   receivable                                             spring season     
                                                          resulted in higher
                                                          Retail trade and  
                                                          vendor rebates    
                                                          receivable.       
----------------------------------------------------------------------------
  Income taxes        95         4        91     2,275%   First half tax    
   receivable                                             installments paid 
                                                          exceeded the first
                                                          half tax provision
                                                          in Canada.        
----------------------------------------------------------------------------
  Inventories      2,605     3,314      (709)      (21%)  Inventory drawdown
                                                          due to increased  
                                                          seasonal sales    
                                                          activity.         
                                                                            
----------------------------------------------------------------------------
  Prepaid            131       688      (557)      (81%)  Drawdown of       
   expenses and                                           prepaid inventory 
   deposits                                               due to increased  
                                                          seasonal sales    
                                                          activity in the   
                                                          spring.           
----------------------------------------------------------------------------
  Other current      124       144       (20)      (14%)  -                 
   assets                                                                   
----------------------------------------------------------------------------
Current                                                                     
 liabilities                                                                
  Short-term       1,069       835       234        28%   Increased         
   debt                                                   financing for     
                                                          working capital   
                                                          requirements.     
----------------------------------------------------------------------------
  Accounts         3,830     3,919       (89)       (2%)  -                 
   payable                                                                  
----------------------------------------------------------------------------
  Income taxes       128        82        46        56%   First half tax    
   payable                                                provision exceeds 
                                                          the first half tax
                                                          installments paid 
                                                          in the U.S.       
----------------------------------------------------------------------------
  Current            107         8        99     1,238%   Increase relates  
   portion of                                             to $100-million   
   long-term                                              7.7 percent       
   debt                                                   debentures due in 
                                                          2017.             
----------------------------------------------------------------------------
  Current             74        85       (11)      (13%)  -
   portion of                                                               
   other                                                                    
   provisions                                                               
----------------------------------------------------------------------------
Working capital    1,692     1,789       (97)       (5%)                    
----------------------------------------------------------------------------

LIQUIDITY AND CAPITAL RESOURCES

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

As of June 30, 2016, we have sufficient current assets to meet our current liabilities.

Summary of Consolidated Statements of Cash Flows

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

----------------------------------------------------------------------------
                                              Six months ended June 30,     
(millions of U.S. dollars)               2016           2015         Change 
----------------------------------------------------------------------------
Cash provided by operating                                                  
 activities                               438            796           (358)
----------------------------------------------------------------------------
Cash used in investing                                                      
 activities                              (574)          (914)           340 
----------------------------------------------------------------------------
Cash used in financing                                                      
 activities                               (25)           (89)            64 
----------------------------------------------------------------------------
Effect of exchange rate changes                                             
 on cash and cash equivalents             (47)             6            (53)
----------------------------------------------------------------------------
Decrease in cash and cash                                                   
 equivalents                             (208)          (201)            (7)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Cash provided by     -- $176-million decrease in cash resulting from greater
 operating              taxes paid in the first six months of 2016 compared 
 activities             to 2015.                                            
                                                                            
                     -- $50-million decrease in cash due to higher interest 
                        payments made in the first half of 2016 resulting   
                        from the timing of interest paid on debt.           
----------------------------------------------------------------------------
Cash used in         -- Lower capital expenditures compared to the first    
 investing              half of 2015 due a decreased spending on our Vanscoy
 activities             potash facility and Borger expansion projects.      
----------------------------------------------------------------------------
Cash used in         -- Lower cash used in financing as $100-million share  
 financing              repurchases were made in the first half of 2015.    
 activities                                                                 
----------------------------------------------------------------------------
Capital Spending and Expenditures (a)                                       
----------------------------------------------------------------------------
                                     Three months ended   Six months ended  
                                          June 30,            June 30,      
----------------------------------------------------------------------------
(millions of U.S. dollars)               2016      2015      2016      2015 
----------------------------------------------------------------------------
Retail                                                                      
----------------------------------------------------------------------------
  Sustaining                               28        38        75        92 
----------------------------------------------------------------------------
  Investing                                10         8        19        17 
----------------------------------------------------------------------------
                                           38        46        94       109 
----------------------------------------------------------------------------
  Acquisitions(b)                          81        24       175        84 
----------------------------------------------------------------------------
                                          119        70       269       193 
----------------------------------------------------------------------------
Wholesale                                                                   
----------------------------------------------------------------------------
  Sustaining                              102        87       151       127 
----------------------------------------------------------------------------
  Investing                                87       206       155       501 
----------------------------------------------------------------------------
                                          189       293       306       628 
----------------------------------------------------------------------------
Other                                                                       
----------------------------------------------------------------------------
  Sustaining                                1         1         2         2 
----------------------------------------------------------------------------
  Investing                                 2         1         2         1 
----------------------------------------------------------------------------
                                            3         2         4         3 
----------------------------------------------------------------------------
Total                                                                       
----------------------------------------------------------------------------
  Sustaining                              131       126       228       221 
----------------------------------------------------------------------------
  Investing                                99       215       176       519 
----------------------------------------------------------------------------
                                          230       341       404       740 
----------------------------------------------------------------------------
  Acquisitions(b)                          81        24       175        84 
----------------------------------------------------------------------------
                                          311       365       579       824 
----------------------------------------------------------------------------
(a) This excludes capitalized borrowing costs.                              
(b) This represents business acquisitions and includes acquired working     
    capital; property, plant and equipment; intangibles; goodwill; and      
    investments in associates and joint ventures.
  • Our investing capital expenditures decreased in the second quarter and first half of 2016 compared to the same periods last year due to the ramp-up of our Vanscoy potash facility in the second quarter and first half of 2015 combined with decreased spending for the Borger project.
  • Subsequent to June 30, 2016, we entered into a binding purchase agreement with Cargill AgHorizons (U.S.) to acquire 18 ag-retail locations located across the northern U.S. Corn Belt region. The acquisition is expected to close by the end of the third quarter of 2016 subject to customary closing conditions and regulatory clearances.
  • We expect Agrium's capital expenditures for the remainder of 2016 to approximate $220-million to $325-million. We also expect to require approximately $175-million to complete our previously announced acquisitions. We anticipate that we will be able to finance the announced projects through a combination of cash provided from operating activities and existing credit facilities.

Short-term Debt

  • Our short-term debt of $1-billion at June 30, 2016 is outlined in note 5 of our Summarized Notes to the Consolidated Financial Statements.
  • Our short-term debt increased by $234-million during the first half of 2016, which in turn contributed to a decrease in our unutilized short-term financing capacity to $1.8-billion at June 30, 2016.

Capital Management

  • Our revolving credit facilities require that we maintain specific interest coverage and debt-to-capital ratios, as well as other non-financial covenants as defined in our credit agreements. We were in compliance with all covenants at June 30, 2016. Our ability to comply with these covenants has not changed since December 31, 2015.

SHARE REPURCHASES

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

There were no shares repurchased under the NCIB for the first half of 2016 or the period from July 1, 2016 to August 3, 2016.

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

OUTSTANDING SHARE DATA

Agrium had 138,175,400 common shares outstanding at July 29, 2016. At that date, the number of common shares issuable pursuant to stock options outstanding (issuable assuming full conversion, where each stock option granted can be exercised for one common share) was 937,528.

SELECTED QUARTERLY INFORMATION                                              
                                                                            
----------------------------------------------------------------------------
(millions of U.S.                                                           
 dollars,             2016   2016   2015   2015   2015   2015   2014   2014 
except per share                                                            
 amounts)               Q2     Q1     Q4     Q3     Q2     Q1     Q4     Q3 
----------------------------------------------------------------------------
Sales                6,415  2,725  2,407  2,524  6,992  2,872  2,705  2,920 
----------------------------------------------------------------------------
Gross profit         1,525    554    900    696  1,708    584    732    665 
----------------------------------------------------------------------------
Net earnings from                                                           
 continuing                                                                 
 operations            565      3    200     99    675     14     70     91 
----------------------------------------------------------------------------
Net loss from                                                               
 discontinued                                                               
 operations              -      -      -      -      -      -    (19)   (41)
----------------------------------------------------------------------------
Net earnings           565      3    200     99    675     14     51     50 
----------------------------------------------------------------------------
Earnings per share                                                          
 from continuing                                                            
 operations                                                                 
 attributable to                                                            
 equity holders of                                                          
 Agrium:                                                                    
----------------------------------------------------------------------------
  Basic and diluted   4.08   0.02   1.45   0.72   4.71   0.08   0.46   0.63 
----------------------------------------------------------------------------
Loss per share from                                                         
 discontinued                                                               
 operations                                                                 
 attributable to                                                            
 equity holders of                                                          
 Agrium:                                                                    
----------------------------------------------------------------------------
  Basic and diluted      -      -      -      -      -      -  (0.13) (0.28)
----------------------------------------------------------------------------
Earnings per share                                                          
 attributable to                                                            
 equity holders of                                                          
 Agrium:                                                                    
----------------------------------------------------------------------------
  Basic and diluted   4.08   0.02   1.45   0.72   4.71   0.08   0.33   0.35 
----------------------------------------------------------------------------
Dividends declared     122    121    121    120    125    112    112    107 
----------------------------------------------------------------------------
Dividends declared                                                          
 per share           0.875  0.875  0.875  0.875  0.875  0.780  0.780  0.750 
----------------------------------------------------------------------------

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

NON-IFRS FINANCIAL MEASURES

Financial measures that are not specified, defined or determined under IFRS are non-IFRS measures unless they are presented in our Consolidated Financial Statements. The following table outlines our non-IFRS financial measure, its definition and why management uses the measure.

----------------------------------------------------------------------------
                                                    Why we use the measure  
Non-IFRS financial                                   and why it is useful to
 measure                  Definition                 investors              
----------------------------------------------------------------------------
Cash operating coverage   Cash operating coverage   Assists management and  
 ratio                     ratio represents gross    investors in           
                           profit excluding          understanding the costs
                           depreciation and          and underlying         
                           amortization less         economics of our       
                           EBITDA, divided by        operations and in      
                           gross profit excluding    assessing our operating
                           depreciation and          performance and our    
                           amortization.             ability to generate    
                                                     free cash flow from our
                                                     business units and     
                                                     overall as a company.  
----------------------------------------------------------------------------
Retail cash operating coverage ratio                                        
----------------------------------------------------------------------------
                                               Rolling four quarters ended  
                                                         June 30,           
(millions of U.S. dollars, except as noted)             2016           2015 
----------------------------------------------------------------------------
Gross profit                                           2,774          2,791 
----------------------------------------------------------------------------
Depreciation and amortization in cost of                                    
 product sold                                              6              6 
----------------------------------------------------------------------------
Gross profit excluding depreciation and                                     
 amortization                                          2,780          2,797 
----------------------------------------------------------------------------
EBITDA                                                 1,116          1,016 
----------------------------------------------------------------------------
Operating expenses excluding depreciation and                               
 amortization                                          1,664          1,781 
----------------------------------------------------------------------------
Cash operating coverage ratio (%)                         60             64 
----------------------------------------------------------------------------

CRITICAL ACCOUNTING ESTIMATES

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

CHANGES IN ACCOUNTING POLICIES

The accounting policies applied in our Consolidated Financial Statements for the three and six months ended June 30, 2016 are the same as those applied in our audited annual financial statements in our 2015 Annual Report.

BUSINESS RISKS

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

CONTROLS AND PROCEDURES

There have been no changes in our internal control over financial reporting during the three months ended June 30, 2016 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PUBLIC SECURITIES FILINGS

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

FORWARD-LOOKING STATEMENTS

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

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

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

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

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

OTHER

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

A WEBSITE SIMULCAST of the 2016 2nd Quarter Conference Call will be available in a listen-only mode beginning Thursday, August 4th, 2016 at 8:00 a.m. MT (10:00 a.m. ET). Please visit the following website: www.agrium.com.

                                AGRIUM INC.                                 
                   Consolidated Statements of Operations                    
                                (Unaudited)                                 
                                                                            
                                     Three months ended   Six months ended  
                                          June 30,            June 30,      
----------------------------------------------------------------------------
(millions of U.S. dollars,                                                  
 unless otherwise stated)      Notes     2016      2015      2016      2015 
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
Sales                                   6,415     6,992     9,140     9,864 
----------------------------------------------------------------------------
Cost of product sold                    4,890     5,284     7,061     7,572 
----------------------------------------------------------------------------
Gross profit                            1,525     1,708     2,079     2,292 
----------------------------------------------------------------------------
Expenses                                                                    
----------------------------------------------------------------------------
  Selling                                 574       585       988     1,015 
----------------------------------------------------------------------------
  General and administrative               62        66       117       133 
----------------------------------------------------------------------------
  Share-based payments                     13         6        17        51 
----------------------------------------------------------------------------
  Earnings from associates and                                              
   joint ventures                         (23)       (1)      (28)       (1)
----------------------------------------------------------------------------
  Other expenses (income)          4       51        26        62        (7)
----------------------------------------------------------------------------
Earnings before finance costs                                               
 and income taxes                         848     1,026       923     1,101 
----------------------------------------------------------------------------
  Finance costs related to                                                  
   long-term debt                          50        50       102        87 
----------------------------------------------------------------------------
  Other finance costs                      20        18        38        37 
----------------------------------------------------------------------------
Earnings before income taxes              778       958       783       977 
----------------------------------------------------------------------------
  Income taxes                            213       283       215       288 
----------------------------------------------------------------------------
Net earnings                              565       675       568       689 
----------------------------------------------------------------------------
  Attributable to                                                           
----------------------------------------------------------------------------
    Equity holders of Agrium              564       674       566       686 
----------------------------------------------------------------------------
    Non-controlling interest                1         1         2         3 
----------------------------------------------------------------------------
Net earnings                              565       675       568       689 
----------------------------------------------------------------------------
                                                                            
Earnings per share                                                          
 attributable to equity                                                     
 holders of Agrium                                                          
----------------------------------------------------------------------------
  Basic and diluted earnings                                                
   per share                             4.08      4.71      4.09      4.78 
----------------------------------------------------------------------------
  Weighted average number of                                                
   shares outstanding for                                                   
   basic and diluted earnings                                               
   per share (millions of                                                   
   common shares)                         138       143       138       143 
----------------------------------------------------------------------------
See accompanying notes.                                                     

Basis of preparation and statement of compliance

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

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

                                AGRIUM INC.                                 
              Consolidated Statements of Comprehensive Income               
                                (Unaudited)                                 
                                                                            
                                     Three months ended   Six months ended  
                                          June 30,            June 30,      
----------------------------------------------------------------------------
(millions of U.S. dollars)     Notes     2016      2015      2016      2015 
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
Net earnings                              565       675       568       689 
----------------------------------------------------------------------------
  Other comprehensive (loss)                                                
   income                                                                   
----------------------------------------------------------------------------
    Items that are or may be                                                
     reclassified to earnings                                               
----------------------------------------------------------------------------
      Cash flow hedges             3                                        
----------------------------------------------------------------------------
        Effective portion of                                                
         changes in fair value             17        (4)       (6)      (20)
----------------------------------------------------------------------------
        Deferred income taxes              (4)        1         3         5 
----------------------------------------------------------------------------
      Share of comprehensive                                                
       (loss) income of                                                     
       associates and joint                                                 
       ventures                            (1)        -         1        (5)
----------------------------------------------------------------------------
      Foreign currency                                                      
       translation                                                          
----------------------------------------------------------------------------
        (Losses) gains                    (26)       57       153      (238)
----------------------------------------------------------------------------
        Reclassifications to                                                
         earnings                           -         1         -         1 
----------------------------------------------------------------------------
                                          (14)       55       151      (257)
----------------------------------------------------------------------------
    Items that will never be                                                
     reclassified to earnings                                               
----------------------------------------------------------------------------
      Post-employment benefits                                              
----------------------------------------------------------------------------
        Actuarial losses                  (24)        -       (24)        - 
----------------------------------------------------------------------------
        Deferred income taxes               7         1         7         1 
----------------------------------------------------------------------------
                                          (17)        1       (17)        1 
----------------------------------------------------------------------------
  Other comprehensive (loss)                                                
   income                                 (31)       56       134      (256)
----------------------------------------------------------------------------
Comprehensive income                      534       731       702       433 
----------------------------------------------------------------------------
Attributable to                                                             
----------------------------------------------------------------------------
  Equity holders of Agrium                533       730       700       431 
----------------------------------------------------------------------------
  Non-controlling interest                  1         1         2         2 
----------------------------------------------------------------------------
Comprehensive income                      534       731       702       433 
----------------------------------------------------------------------------
See accompanying notes.                                                     
                                AGRIUM INC.                                 
                        Consolidated Balance Sheets                         
                                (Unaudited)                                 
                                                                            
                                              June 30,          December 31, 
------------------------------------------------------------ ---------------
(millions of U.S.                                                           
 dollars)                Notes          2016           2015            2015 
------------------------------------------------------------ ---------------
Assets                                                                      
------------------------------------------------------------ ---------------
  Current assets                                                            
------------------------------------------------------------ ---------------
    Cash and cash                                                           
     equivalents                         307            647             515 
------------------------------------------------------------ ---------------
    Accounts receivable                3,638          3,556           2,053 
------------------------------------------------------------ ---------------
    Income taxes                                                            
     receivable                           95              3               4 
------------------------------------------------------------ ---------------
    Inventories                        2,605          2,868           3,314 
------------------------------------------------------------ ---------------
    Prepaid expenses and                                                    
     deposits                            131            119             688 
------------------------------------------------------------ ---------------
    Other current assets                 124            138             144 
------------------------------------------------------------ ---------------
                                       6,900          7,331           6,718 
------------------------------------------------------------ ---------------
  Property, plant and                                                       
   equipment                           6,832          6,506           6,333 
------------------------------------------------------------ ---------------
  Intangibles                            635            669             632 
------------------------------------------------------------ ---------------
  Goodwill                             2,023          2,004           1,980 
------------------------------------------------------------ ---------------
  Investments in                                                            
   associates and joint                                                     
   ventures                              665            603             607 
------------------------------------------------------------ ---------------
  Other assets                            52             68              54 
------------------------------------------------------------ ---------------
  Deferred income tax                                                       
   assets                                 44             65              53 
------------------------------------------------------------ ---------------
                                      17,151         17,246          16,377 
------------------------------------------------------------ ---------------
Liabilities and                                                             
 shareholders' equity                                                       
------------------------------------------------------------ ---------------
  Current liabilities                                                       
------------------------------------------------------------ ---------------
    Short-term debt          5         1,069            681             835 
------------------------------------------------------------ ---------------
    Accounts payable                   3,830          4,038           3,919 
------------------------------------------------------------ ---------------
    Income taxes payable                 128            110              82 
------------------------------------------------------------ ---------------
    Current portion of                                                      
     long-term debt                      107              1               8 
------------------------------------------------------------ ---------------
    Current portion of                                                      
     other provisions                     74             88              85 
------------------------------------------------------------ ---------------
                                       5,208          4,918           4,929 
------------------------------------------------------------ ---------------
  Long-term debt                       4,412          4,533           4,513 
------------------------------------------------------------ ---------------
  Post-employment                                                           
   benefits                              162            146             124 
------------------------------------------------------------ ---------------
  Other provisions                       338            329             336 
------------------------------------------------------------ ---------------
  Other liabilities                       54             81              85 
------------------------------------------------------------ ---------------
  Deferred income tax                                                       
   liabilities                           491            446             383 
------------------------------------------------------------ ---------------
                                      10,665         10,453          10,370 
------------------------------------------------------------ ---------------
  Shareholders' equity                                                      
------------------------------------------------------------ ---------------
    Share capital                      1,762          1,812           1,757 
------------------------------------------------------------ ---------------
    Retained earnings                  5,839          5,864           5,533 
------------------------------------------------------------ ---------------
    Accumulated other                                                       
     comprehensive loss               (1,119)          (891)         (1,287)
------------------------------------------------------------ ---------------
    Equity holders of                                                       
     Agrium                            6,482          6,785           6,003 
------------------------------------------------------------ ---------------
    Non-controlling                                                         
     interest                              4              8               4 
------------------------------------------------------------ ---------------
    Total equity                       6,486          6,793           6,007 
------------------------------------------------------------ ---------------
                                      17,151         17,246          16,377 
------------------------------------------------------------ ---------------
See accompanying notes.                                                     
                                AGRIUM INC.                                 
                   Consolidated Statements of Cash Flows                    
                                (Unaudited)                                 
                                                                            
                                     Three months ended   Six months ended  
                                          June 30,            June 30,      
----------------------------------------------------------------------------
(millions of U.S. dollars)               2016      2015      2016      2015 
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
Operating                                                                   
----------------------------------------------------------------------------
  Net earnings                            565       675       568       689 
----------------------------------------------------------------------------
  Adjustments for                                                           
----------------------------------------------------------------------------
    Depreciation and amortization         145       119       259       230 
----------------------------------------------------------------------------
    Earnings from associates and                                            
     joint ventures                       (23)       (1)      (28)       (1)
----------------------------------------------------------------------------
    Share-based payments                   13         6        17        51 
----------------------------------------------------------------------------
    Unrealized (gain) loss on                                               
     derivative financial                                                   
     instruments                          (61)      (13)       22        13 
----------------------------------------------------------------------------
    Unrealized foreign exchange loss                                        
     (gain)                                83       (51)      (41)      (10)
----------------------------------------------------------------------------
    Interest income                       (16)      (16)      (29)      (33)
----------------------------------------------------------------------------
    Finance costs                          70        68       140       124 
----------------------------------------------------------------------------
    Income taxes                          213       283       215       288 
----------------------------------------------------------------------------
    Other                                  (7)        6        (1)      (19)
----------------------------------------------------------------------------
  Interest received                        15        16        29        33 
----------------------------------------------------------------------------
  Interest paid                           (51)      (48)     (140)      (90)
----------------------------------------------------------------------------
  Income taxes (paid) received            (24)       (7)     (165)       11 
----------------------------------------------------------------------------
  Dividends from associates and                                             
   joint ventures                           1         1         2         2 
----------------------------------------------------------------------------
  Net changes in non-cash working                                           
   capital                               (828)     (947)     (410)     (492)
----------------------------------------------------------------------------
Cash provided by operating                                                  
 activities                                95        91       438       796 
----------------------------------------------------------------------------
Investing                                                                   
----------------------------------------------------------------------------
  Business acquisitions, net of cash                                        
   acquired                               (81)      (24)     (175)      (84)
----------------------------------------------------------------------------
  Capital expenditures                   (230)     (341)     (404)     (740)
----------------------------------------------------------------------------
  Capitalized borrowing costs              (7)       (8)      (12)      (23)
----------------------------------------------------------------------------
  Purchase of investments                 (18)      (43)      (41)      (85)
----------------------------------------------------------------------------
  Proceeds from sale of investments        46        27        64        45 
----------------------------------------------------------------------------
  Proceeds from sale of property,                                           
   plant and equipment                      6         4        10        54 
----------------------------------------------------------------------------
  Other                                    (5)        6        (8)       11 
----------------------------------------------------------------------------
  Net changes in non-cash working                                           
   capital                                 (8)      (74)       (8)      (92)
----------------------------------------------------------------------------
Cash used in investing activities        (297)     (453)     (574)     (914)
----------------------------------------------------------------------------
Financing                                                                   
----------------------------------------------------------------------------
  Short-term debt                         426       422       222      (738)
----------------------------------------------------------------------------
  Long-term debt issued                     -         -         -     1,000 
----------------------------------------------------------------------------
  Transaction costs on long-term                                            
   debt                                     -         -         -       (14)
----------------------------------------------------------------------------
  Repayment of long-term debt              (4)       (2)       (6)      (15)
----------------------------------------------------------------------------
  Dividends paid                         (122)     (114)     (241)     (223)
----------------------------------------------------------------------------
  Shares issued                             -         -         -         1 
----------------------------------------------------------------------------
  Shares repurchased                        -      (100)        -      (100)
----------------------------------------------------------------------------
Cash provided by (used in) financing                                        
 activities                               300       206       (25)      (89)
----------------------------------------------------------------------------
Effect of exchange rate changes on                                          
 cash and cash equivalents                (67)       23       (47)        6 
----------------------------------------------------------------------------
Increase (decrease) in cash and cash                                        
 equivalents                               31      (133)     (208)     (201)
----------------------------------------------------------------------------
Cash and cash equivalents -                                                 
 beginning of period                      276       780       515       848 
----------------------------------------------------------------------------
Cash and cash equivalents - end of                                          
 period                                   307       647       307       647 
----------------------------------------------------------------------------
See accompanying notes.                                                     
                                 AGRIUM INC.                                
               Consolidated Statements of Shareholders' Equity              
                                 (Unaudited)                                
                                     Millions                               
                                           of                               
(millions of U.S. dollars,             common          Share       Retained 
 except per share data)                shares        capital       earnings 
----------------------------------------------------------------------------
December 31, 2014                         144          1,821          5,502 
----------------------------------------------------------------------------
  Net earnings                              -              -            686 
----------------------------------------------------------------------------
  Other comprehensive income                                                
   (loss), net of tax                                                       
----------------------------------------------------------------------------
    Post-employment benefits                -              -              1 
----------------------------------------------------------------------------
    Other                                   -              -              - 
----------------------------------------------------------------------------
  Comprehensive income (loss),                                              
   net of tax                               -              -            687 
----------------------------------------------------------------------------
  Dividends ($1.655 per share)              -              -           (237)
----------------------------------------------------------------------------
  Non-controlling interest                                                  
   transactions                             -              -              - 
----------------------------------------------------------------------------
  Shares repurchased                       (1)           (12)           (88)
----------------------------------------------------------------------------
  Share-based payment                                                       
   transactions                             -              3              - 
----------------------------------------------------------------------------
  Reclassification of cash flow                                             
   hedges, net of tax                       -              -              - 
----------------------------------------------------------------------------
June 30, 2015                             143          1,812          5,864 
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
December 31, 2015                         138          1,757          5,533 
----------------------------------------------------------------------------
  Net earnings                              -              -            566 
----------------------------------------------------------------------------
  Other comprehensive income                                                
   (loss), net of tax                                                       
----------------------------------------------------------------------------
    Post-employment benefits                -              -            (17)
----------------------------------------------------------------------------
    Other                                   -              -              - 
----------------------------------------------------------------------------
  Comprehensive income (loss),                                              
   net of tax                               -              -            549 
----------------------------------------------------------------------------
  Dividends ($1.75 per share)               -              -           (243)
----------------------------------------------------------------------------
  Non-controlling interest                                                  
   transactions                             -              -              - 
----------------------------------------------------------------------------
  Share-based payment                                                       
   transactions                             -              5              - 
----------------------------------------------------------------------------
  Reclassification of cash flow                                             
   hedges, net of tax                       -              -              - 
----------------------------------------------------------------------------
June 30, 2016                             138          1,762          5,839 
----------------------------------------------------------------------------
                                     Other comprehensive income (loss)      
                               ---------------------------------------------
                                         Comprehensive                      
                                               loss of                      
                                            associates                      
                                    Cash           and     Foreign          
(millions of U.S. dollars,          flow         joint    currency          
 except per share data)           hedges      ventures translation    Total 
----------------------------------------------------------------------------
December 31, 2014                    (27)          (11)       (605)    (643)
----------------------------------------------------------------------------
  Net earnings                         -             -           -        - 
----------------------------------------------------------------------------
  Other comprehensive income                                                
   (loss), net of tax                                                       
----------------------------------------------------------------------------
    Post-employment benefits           -             -           -        - 
----------------------------------------------------------------------------
    Other                            (15)           (5)       (236)    (256)
----------------------------------------------------------------------------
  Comprehensive income (loss),                                              
   net of tax                        (15)           (5)       (236)    (256)
----------------------------------------------------------------------------
  Dividends ($1.655 per share)         -             -           -        - 
----------------------------------------------------------------------------
  Non-controlling interest                                                  
   transactions                        -             -           -        - 
----------------------------------------------------------------------------
  Shares repurchased                   -             -           -        - 
----------------------------------------------------------------------------
  Share-based payment                                                       
   transactions                        -             -           -        - 
----------------------------------------------------------------------------
  Reclassification of cash flow                                             
   hedges, net of tax                  8             -           -        8 
----------------------------------------------------------------------------
June 30, 2015                        (34)          (16)       (841)    (891)
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
December 31, 2015                    (56)          (17)     (1,214)  (1,287)
----------------------------------------------------------------------------
  Net earnings                         -             -           -        - 
----------------------------------------------------------------------------
  Other comprehensive income                                                
   (loss), net of tax                                                       
----------------------------------------------------------------------------
    Post-employment benefits           -             -           -        - 
----------------------------------------------------------------------------
    Other                             (3)            1         153      151 
----------------------------------------------------------------------------
  Comprehensive income (loss),                                              
   net of tax                         (3)            1         153      151 
----------------------------------------------------------------------------
  Dividends ($1.75 per share)          -             -           -        - 
----------------------------------------------------------------------------
  Non-controlling interest                                                  
   transactions                        -             -           -        - 
----------------------------------------------------------------------------
  Share-based payment                                                       
   transactions                        -             -           -        - 
----------------------------------------------------------------------------
  Reclassification of cash flow                                             
   hedges, net of tax                 17             -           -       17 
----------------------------------------------------------------------------
June 30, 2016                        (42)          (16)     (1,061)  (1,119)
----------------------------------------------------------------------------
                                                                            
                                       Equity           Non-                
(millions of U.S. dollars,         holders of    controlling          Total 
 except per share data)                Agrium       interest         equity 
----------------------------------------------------------------------------
December 31, 2014                       6,680              7          6,687 
----------------------------------------------------------------------------
  Net earnings                            686              3            689 
----------------------------------------------------------------------------
  Other comprehensive income                                                
   (loss), net of tax                                                       
----------------------------------------------------------------------------
    Post-employment benefits                1              -              1 
----------------------------------------------------------------------------
    Other                                (256)            (1)          (257)
----------------------------------------------------------------------------
  Comprehensive income (loss),                                              
   net of tax                             431              2            433 
----------------------------------------------------------------------------
  Dividends ($1.655 per share)           (237)             -           (237)
----------------------------------------------------------------------------
  Non-controlling interest                                                  
   transactions                             -             (1)            (1)
----------------------------------------------------------------------------
  Shares repurchased                     (100)             -           (100)
----------------------------------------------------------------------------
  Share-based payment                                                       
   transactions                             3              -              3 
----------------------------------------------------------------------------
  Reclassification of cash flow                                             
   hedges, net of tax                       8              -              8 
----------------------------------------------------------------------------
June 30, 2015                           6,785              8          6,793 
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
December 31, 2015                       6,003              4          6,007 
----------------------------------------------------------------------------
  Net earnings                            566              2            568 
----------------------------------------------------------------------------
  Other comprehensive income                                                
   (loss), net of tax                                                       
----------------------------------------------------------------------------
    Post-employment benefits              (17)             -            (17)
----------------------------------------------------------------------------
    Other                                 151              -            151 
----------------------------------------------------------------------------
  Comprehensive income (loss),                                              
   net of tax                             700              2            702 
----------------------------------------------------------------------------
  Dividends ($1.75 per share)            (243)             -           (243)
----------------------------------------------------------------------------
  Non-controlling interest                                                  
   transactions                             -             (2)            (2)
----------------------------------------------------------------------------
  Share-based payment                                                       
   transactions                             5              -              5 
----------------------------------------------------------------------------
  Reclassification of cash flow                                             
   hedges, net of tax                      17              -             17 
----------------------------------------------------------------------------
June 30, 2016                           6,482              4          6,486 
----------------------------------------------------------------------------
See accompanying notes.

AGRIUM INC.
Summarized Notes to the Consolidated Financial Statements
For the three and six months ended June 30, 2016
(millions of U.S. dollars, unless otherwise stated)
(Unaudited)

1. Corporate Management

Corporate information

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

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

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

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

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

2. Operating Segments

Segment information by business unit       Three months ended June 30,      
----------------------------------------------------------------------------
                                                      2016                  
----------------------------------------------------------------------------
                                       Retail Wholesale  Other (a)    Total 
----------------------------------------------------------------------------
Sales - external                        5,780       635         -     6,415 
----------------------------------------------------------------------------
      - inter-segment                      11       247      (258)        - 
----------------------------------------------------------------------------
Total sales                             5,791       882      (258)    6,415 
----------------------------------------------------------------------------
Cost of product sold                    4,512       681      (303)    4,890 
----------------------------------------------------------------------------
Gross profit                            1,279       201        45     1,525 
----------------------------------------------------------------------------
Gross profit (%)                           22        23                  24 
----------------------------------------------------------------------------
Expenses                                                                    
----------------------------------------------------------------------------
  Selling                                 570         8        (4)      574 
----------------------------------------------------------------------------
  General and administrative               28         8        26        62 
----------------------------------------------------------------------------
  Share-based payments                      -         -        13        13 
----------------------------------------------------------------------------
  (Earnings) loss from associates                                           
   and joint ventures                      (3)      (21)        1       (23)
----------------------------------------------------------------------------
  Other expenses                            8        26        17        51 
----------------------------------------------------------------------------
Earnings (loss) before finance costs                                        
 and income taxes                         676       180        (8)      848 
----------------------------------------------------------------------------
  Finance costs                             -         -        70        70 
----------------------------------------------------------------------------
Earnings (loss) before income taxes       676       180       (78)      778 
----------------------------------------------------------------------------
  Depreciation and amortization            68        74         3       145 
----------------------------------------------------------------------------
  Finance costs                             -         -        70        70 
----------------------------------------------------------------------------
EBITDA (b)                                744       254        (5)      993 
----------------------------------------------------------------------------
Segment information by business unit      Three months ended June 30,       
----------------------------------------------------------------------------
                                                      2015                  
----------------------------------------------------------------------------
                                       Retail Wholesale  Other (a)    Total 
----------------------------------------------------------------------------
Sales - external                        6,144       848         -     6,992 
----------------------------------------------------------------------------
      - inter-segment                      16       326      (342)        - 
----------------------------------------------------------------------------
Total sales                             6,160     1,174      (342)    6,992 
----------------------------------------------------------------------------
Cost of product sold                    4,896       765      (377)    5,284 
----------------------------------------------------------------------------
Gross profit                            1,264       409        35     1,708 
----------------------------------------------------------------------------
Gross profit (%)                           21        35                  24 
----------------------------------------------------------------------------
Expenses                                                                    
----------------------------------------------------------------------------
  Selling                                 580         9        (4)      585 
----------------------------------------------------------------------------
  General and administrative               32         6        28        66 
----------------------------------------------------------------------------
  Share-based payments                      -         -         6         6 
----------------------------------------------------------------------------
  (Earnings) loss from associates                                           
   and joint ventures                      (3)        -         2        (1)
----------------------------------------------------------------------------
  Other expenses                            8        14         4        26 
----------------------------------------------------------------------------
Earnings (loss) before finance costs                                        
 and income taxes                         647       380        (1)    1,026 
----------------------------------------------------------------------------
  Finance costs                             -         -        68        68 
----------------------------------------------------------------------------
Earnings (loss) before income taxes       647       380       (69)      958 
----------------------------------------------------------------------------
  Depreciation and amortization            66        49         4       119 
----------------------------------------------------------------------------
  Finance costs                             -         -        68        68 
----------------------------------------------------------------------------
EBITDA (b)                                713       429         3     1,145 
----------------------------------------------------------------------------
(a) Includes inter-segment eliminations.                                    
(b) EBITDA is earnings (loss) from continuing operations before finance     
    costs, income taxes, depreciation and amortization.
Segment information by business unit        Six months ended June 30,       
----------------------------------------------------------------------------
                                                      2016                  
----------------------------------------------------------------------------
                                       Retail Wholesale  Other (a)    Total 
----------------------------------------------------------------------------
Sales - external                        8,058     1,082         -     9,140 
----------------------------------------------------------------------------
      - inter-segment                      23       449      (472)        - 
----------------------------------------------------------------------------
Total sales                             8,081     1,531      (472)    9,140 
----------------------------------------------------------------------------
Cost of product sold                    6,400     1,177      (516)    7,061 
----------------------------------------------------------------------------
Gross profit                            1,681       354        44     2,079 
----------------------------------------------------------------------------
Gross profit (%)                           21        23                  23 
----------------------------------------------------------------------------
Expenses                                                                    
----------------------------------------------------------------------------
  Selling                                 980        16        (8)      988 
----------------------------------------------------------------------------
  General and administrative               50        16        51       117 
----------------------------------------------------------------------------
  Share-based payments                      -         -        17        17 
----------------------------------------------------------------------------
  (Earnings) loss from associates                                           
   and joint ventures                      (7)      (22)        1       (28)
----------------------------------------------------------------------------
  Other expenses (income)                   5        45        12        62 
----------------------------------------------------------------------------
Earnings (loss) before finance costs                                        
 and income taxes                         653       299       (29)      923 
----------------------------------------------------------------------------
  Finance costs                             -         -       140       140 
----------------------------------------------------------------------------
Earnings (loss) before income taxes       653       299      (169)      783 
----------------------------------------------------------------------------
  Depreciation and amortization           135       118         6       259 
----------------------------------------------------------------------------
  Finance costs                             -         -       140       140 
----------------------------------------------------------------------------
EBITDA                                    788       417       (23)    1,182 
----------------------------------------------------------------------------
Segment information by business unit       Six months ended June 30,        
----------------------------------------------------------------------------
                                                      2015                  
----------------------------------------------------------------------------
                                       Retail Wholesale  Other (a)    Total 
----------------------------------------------------------------------------
Sales - external                        8,404     1,460         -     9,864 
----------------------------------------------------------------------------
      - inter-segment                      19       581      (600)        - 
----------------------------------------------------------------------------
Total sales                             8,423     2,041      (600)    9,864 
----------------------------------------------------------------------------
Cost of product sold                    6,788     1,398      (614)    7,572 
----------------------------------------------------------------------------
Gross profit                            1,635       643        14     2,292 
----------------------------------------------------------------------------
Gross profit (%)                           19        32                  23 
----------------------------------------------------------------------------
Expenses                                                                    
----------------------------------------------------------------------------
  Selling                               1,003        20        (8)    1,015 
----------------------------------------------------------------------------
  General and administrative               58        16        59       133 
----------------------------------------------------------------------------
  Share-based payments                      -         -        51        51 
----------------------------------------------------------------------------
  (Earnings) loss from associates                                           
   and joint ventures                      (4)        3         -        (1)
----------------------------------------------------------------------------
  Other expenses (income)                  (4)       (8)        5        (7)
----------------------------------------------------------------------------
Earnings (loss) before finance costs                                        
 and income taxes                         582       612       (93)    1,101 
----------------------------------------------------------------------------
  Finance costs                             -         -       124       124 
----------------------------------------------------------------------------
Earnings (loss) before income taxes       582       612      (217)      977 
----------------------------------------------------------------------------
  Depreciation and amortization           123        99         8       230 
----------------------------------------------------------------------------
  Finance costs                             -         -       124       124 
----------------------------------------------------------------------------
EBITDA                                    705       711       (85)    1,331 
----------------------------------------------------------------------------
(a) Includes inter-segment eliminations.                                    
Segment                                                                     
 information -                                                              
 Retail                          Three months ended June 30,                
----------------------------------------------------------------------------
                             2016                          2015             
---------------------------------------------- -----------------------------
                   North               Retail    North                      
                 America International     (a) America International Retail 
---------------------------------------------- -----------------------------
Sales - external   5,038           742  5,780    5,405           739  6,144 
---------------------------------------------- -----------------------------
      - inter-                                                              
       segment        11             -     11       16             -     16 
---------------------------------------------- -----------------------------
Total sales        5,049           742  5,791    5,421           739  6,160 
---------------------------------------------- -----------------------------
Cost of product                                                             
 sold              3,893           619  4,512    4,286           610  4,896 
---------------------------------------------- -----------------------------
Gross profit       1,156           123  1,279    1,135           129  1,264 
---------------------------------------------- -----------------------------
Expenses                                                                    
---------------------------------------------- -----------------------------
  Selling            484            86    570      489            91    580 
---------------------------------------------- -----------------------------
  General and                                                               
   administrative     20             8     28       23             9     32 
---------------------------------------------- -----------------------------
  Earnings from                                                             
   associates and                                                           
   joint ventures     (2)           (1)    (3)      (2)           (1)    (3)
---------------------------------------------- -----------------------------
  Other expenses                                                            
   (income)           16            (8)     8       15            (7)     8 
---------------------------------------------- -----------------------------
Earnings before                                                             
 income taxes        638            38    676      610            37    647 
---------------------------------------------- -----------------------------
  Depreciation                                                              
   and                                                                      
   amortization       63             5     68       57             9     66 
---------------------------------------------- -----------------------------
EBITDA               701            43    744      667            46    713 
---------------------------------------------- -----------------------------
(a) Included within the Retail business unit is a separate Financial        
    Services operating segment with total sales of $4-million and EBITDA of 
    $4-million.
Segment                                                                     
 information -                                                              
 Retail                           Six months ended June 30,                 
----------------------------------------------------------------------------
                             2016                          2015             
---------------------------------------------- -----------------------------
                   North               Retail   North                       
                 America International     (a) America International Retail 
---------------------------------------------- -----------------------------
Sales - external   6,835         1,223  8,058    7,178         1,226  8,404 
---------------------------------------------- -----------------------------
      - inter-                                                              
       segment        23             -     23       19             -     19 
---------------------------------------------- -----------------------------
Total sales        6,858         1,223  8,081    7,197         1,226  8,423 
---------------------------------------------- -----------------------------
Cost of product                                                             
 sold              5,399         1,001  6,400    5,789           999  6,788 
---------------------------------------------- -----------------------------
Gross profit       1,459           222  1,681    1,408           227  1,635 
---------------------------------------------- -----------------------------
Expenses                                                                    
---------------------------------------------- -----------------------------
  Selling            821           159    980      834           169  1,003 
---------------------------------------------- -----------------------------
  General and                                                               
   administrative     35            15     50       40            18     58 
---------------------------------------------- -----------------------------
  Earnings from                                                             
   associates and                                                           
   joint ventures     (6)           (1)    (7)      (3)           (1)    (4)
---------------------------------------------- -----------------------------
  Other expenses                                                            
   (income)           22           (17)     5       12           (16)    (4)
---------------------------------------------- -----------------------------
Earnings before                                                             
 income taxes        587            66    653      525            57    582 
---------------------------------------------- -----------------------------
  Depreciation                                                              
   and                                                                      
   amortization      124            11    135      109            14    123 
---------------------------------------------- -----------------------------
EBITDA               711            77    788      634            71    705 
---------------------------------------------- -----------------------------
(a) Included within the Retail business unit is a separate Financial        
    Services operating segment with total sales of $4-million and EBITDA of 
    $4-million.
Segment information -                                                       
 Wholesale                             Three months ended June 30,          
----------------------------------------------------------------------------
                                                  2016                      
----------------------------------------------------------------------------
                                                       Wholesale            
                             Nitrogen Potash Phosphate  Other (a) Wholesale 
----------------------------------------------------------------------------
Sales - external                  296     85       110       144        635 
----------------------------------------------------------------------------
      - inter-segment              98     50        50        49        247 
----------------------------------------------------------------------------
Total sales                       394    135       160       193        882 
----------------------------------------------------------------------------
Cost of product sold              246    119       155       161        681 
----------------------------------------------------------------------------
Gross profit                      148     16         5        32        201 
----------------------------------------------------------------------------
Expenses                                                                    
----------------------------------------------------------------------------
  Selling                           3      2         1         2          8 
----------------------------------------------------------------------------
  General and administrative        3      1         1         3          8 
----------------------------------------------------------------------------
  Earnings from associates                                                  
   and joint ventures               -      -         -       (21)       (21)
----------------------------------------------------------------------------
  Other expenses (income)          16     14        (1)       (3)        26 
----------------------------------------------------------------------------
Earnings (loss) before income                                               
 taxes                            126     (1)        4        51        180 
----------------------------------------------------------------------------
  Depreciation and                                                          
   amortization                    23     31        13         7         74 
----------------------------------------------------------------------------
EBITDA                            149     30        17        58        254 
----------------------------------------------------------------------------
Segment information -                                                       
 Wholesale                             Three months ended June 30,          
----------------------------------------------------------------------------
                                                  2015                      
----------------------------------------------------------------------------
                                                       Wholesale            
                             Nitrogen Potash Phosphate  Other (a) Wholesale 
----------------------------------------------------------------------------
Sales - external                  415    112       118       203        848 
----------------------------------------------------------------------------
      - inter-segment             138     54        74        60        326 
----------------------------------------------------------------------------
Total sales                       553    166       192       263      1,174 
----------------------------------------------------------------------------
Cost of product sold              283     98       163       221        765 
----------------------------------------------------------------------------
Gross profit                      270     68        29        42        409 
----------------------------------------------------------------------------
Expenses                                                                    
----------------------------------------------------------------------------
  Selling                           4      2         1         2          9 
----------------------------------------------------------------------------
  General and administrative        2      1         1         2          6 
----------------------------------------------------------------------------
  Earnings from associates                                                  
   and joint ventures               -      -         -         -          - 
----------------------------------------------------------------------------
  Other expenses (income)           8      6         1        (1)        14 
----------------------------------------------------------------------------
Earnings (loss) before income                                               
 taxes                            256     59        26        39        380 
----------------------------------------------------------------------------
  Depreciation and                                                          
   amortization                    20     13        11         5         49 
----------------------------------------------------------------------------
EBITDA                            276     72        37        44        429 
----------------------------------------------------------------------------
(a) Includes product purchased for resale, ammonium sulfate, ESN and other  
    products.
Segment information -                                                       
 Wholesale                              Six months ended June 30,           
----------------------------------------------------------------------------
                                                  2016                      
----------------------------------------------------------------------------
                                                       Wholesale            
                             Nitrogen Potash Phosphate  Other (a) Wholesale 
----------------------------------------------------------------------------
Sales - external                  469    133       190       290      1,082 
----------------------------------------------------------------------------
      - inter-segment             175     93       100        81        449 
----------------------------------------------------------------------------
Total sales                       644    226       290       371      1,531 
----------------------------------------------------------------------------
Cost of product sold              401    196       265       315      1,177 
----------------------------------------------------------------------------
Gross profit                      243     30        25        56        354 
----------------------------------------------------------------------------
Expenses                                                                    
----------------------------------------------------------------------------
  Selling                           7      4         2         3         16 
----------------------------------------------------------------------------
  General and administrative        7      3         2         4         16 
----------------------------------------------------------------------------
  (Earnings) loss from                                                      
   associates and joint                                                     
   ventures                         -      -         -       (22)       (22)
----------------------------------------------------------------------------
  Other expenses (income)          22     20         3         -         45 
----------------------------------------------------------------------------
Earnings before income taxes      207      3        18        71        299 
----------------------------------------------------------------------------
  Depreciation and                                                          
   amortization                    36     51        23         8        118 
----------------------------------------------------------------------------
EBITDA                            243     54        41        79        417 
----------------------------------------------------------------------------
Segment information -                                                       
 Wholesale                              Six months ended June 30,           
----------------------------------------------------------------------------
                                                  2015                      
----------------------------------------------------------------------------
                                                       Wholesale            
                             Nitrogen Potash Phosphate  Other (a) Wholesale 
----------------------------------------------------------------------------
Sales - external                  633    137       228       462      1,460 
----------------------------------------------------------------------------
      - inter-segment             235     96       145       105        581 
----------------------------------------------------------------------------
Total sales                       868    233       373       567      2,041 
----------------------------------------------------------------------------
Cost of product sold              455    158       299       486      1,398 
----------------------------------------------------------------------------
Gross profit                      413     75        74        81        643 
----------------------------------------------------------------------------
Expenses                                                                    
----------------------------------------------------------------------------
  Selling                           8      3         2         7         20 
----------------------------------------------------------------------------
  General and administrative        5      3         3         5         16 
----------------------------------------------------------------------------
  (Earnings) loss from                                                      
   associates and joint                                                     
   ventures                         -      -         -         3          3 
----------------------------------------------------------------------------
  Other expenses (income)           6     11        13       (38)        (8)
----------------------------------------------------------------------------
Earnings before income taxes      394     58        56       104        612 
----------------------------------------------------------------------------
  Depreciation and                                                          
   amortization                    38     27        24        10         99 
----------------------------------------------------------------------------
EBITDA                            432     85        80       114        711 
----------------------------------------------------------------------------
(a) Includes product purchased for resale, ammonium sulfate, ESN and other  
    products.
Gross profit by product line            Three months ended June 30,         
----------------------------------------------------------------------------
                                        2016                   2015         
----------------------------------------------------- ----------------------
                                      Cost of                Cost of        
                                      product  Gross         product  Gross 
                                Sales    sold profit   Sales    sold profit 
----------------------------------------------------- ----------------------
Retail                                                                      
----------------------------------------------------- ----------------------
  Crop nutrients                2,190   1,757    433   2,608   2,154    454 
----------------------------------------------------- ----------------------
  Crop protection products      2,250   1,779    471   2,169   1,712    457 
----------------------------------------------------- ----------------------
  Seed                            926     745    181     982     818    164 
----------------------------------------------------- ----------------------
  Merchandise                     162     134     28     174     147     27 
----------------------------------------------------- ----------------------
  Services and other (a)          263      97    166     227      65    162 
----------------------------------------------------- ----------------------
                                5,791   4,512  1,279   6,160   4,896  1,264 
----------------------------------------------------- ----------------------
Wholesale                                                                   
----------------------------------------------------- ----------------------
  Nitrogen                        394     246    148     553     283    270 
----------------------------------------------------- ----------------------
  Potash                          135     119     16     166      98     68 
----------------------------------------------------- ----------------------
  Phosphate                       160     155      5     192     163     29 
----------------------------------------------------- ----------------------
  Product purchased for resale     52      53     (1)    104     103      1 
----------------------------------------------------- ----------------------
  Ammonium sulfate, ESN and                                                 
   other                          141     108     33     159     118     41 
----------------------------------------------------- ----------------------
                                  882     681    201   1,174     765    409 
----------------------------------------------------- ----------------------
Other inter-segment                                                         
 eliminations                    (258)   (303)    45    (342)   (377)    35 
----------------------------------------------------- ----------------------
Total                           6,415   4,890  1,525   6,992   5,284  1,708 
----------------------------------------------------- ----------------------
                                                                            
----------------------------------------------------- ----------------------
Wholesale share of joint                                                    
 ventures                                                                   
----------------------------------------------------- ----------------------
  Nitrogen                         40      37      3      45      39      6 
----------------------------------------------------- ----------------------
  Product purchased for resale      -       -      -      12      12      - 
----------------------------------------------------- ----------------------
                                   40      37      3      57      51      6 
----------------------------------------------------- ----------------------
Total Wholesale including                                                   
 proportionate share in joint                                               
 ventures                         922     718    204   1,231     816    415 
----------------------------------------------------- ----------------------
Gross profit by product line             Six months ended June 30,          
----------------------------------------------------------------------------
                                        2016                   2015         
----------------------------------------------------- ----------------------
                                      Cost of                Cost of        
                                      product  Gross         product  Gross 
                                Sales    sold profit   Sales    sold profit 
----------------------------------------------------- ----------------------
Retail                                                                      
----------------------------------------------------- ----------------------
  Crop nutrients                3,029   2,462    567   3,519   2,939    580 
----------------------------------------------------- ----------------------
  Crop protection products      3,081   2,489    592   2,962   2,397    565 
----------------------------------------------------- ----------------------
  Seed                          1,302   1,070    232   1,290   1,086    204 
----------------------------------------------------- ----------------------
  Merchandise                     279     232     47     316     269     47 
----------------------------------------------------- ----------------------
  Services and other (a)          390     147    243     336      97    239 
----------------------------------------------------- ----------------------
                                8,081   6,400  1,681   8,423   6,788  1,635 
----------------------------------------------------- ----------------------
Wholesale                                                                   
----------------------------------------------------- ----------------------
  Nitrogen                        644     401    243     868     455    413 
----------------------------------------------------- ----------------------
  Potash                          226     196     30     233     158     75 
----------------------------------------------------- ----------------------
  Phosphate                       290     265     25     373     299     74 
----------------------------------------------------- ----------------------
  Product purchased for resale    149     145      4     296     288      8 
----------------------------------------------------- ----------------------
  Ammonium sulfate, ESN and                                                 
   other                          222     170     52     271     198     73 
----------------------------------------------------- ----------------------
                                1,531   1,177    354   2,041   1,398    643 
----------------------------------------------------- ----------------------
Other inter-segment                                                         
 eliminations                    (472)   (516)    44    (600)   (614)    14 
----------------------------------------------------- ----------------------
Total                           9,140   7,061  2,079   9,864   7,572  2,292 
----------------------------------------------------- ----------------------
                                                                            
----------------------------------------------------- ----------------------
Wholesale share of joint                                                    
 ventures                                                                   
----------------------------------------------------- ----------------------
  Nitrogen                         65      58      7      66      61      5 
----------------------------------------------------- ----------------------
  Product purchased for resale      -       -      -      38      37      1 
----------------------------------------------------- ----------------------
                                   65      58      7     104      98      6 
----------------------------------------------------- ----------------------
Total Wholesale including                                                   
 proportionate share in joint                                               
 ventures                       1,596   1,235    361   2,145   1,496    649 
----------------------------------------------------- ----------------------
(a) Includes financial services products.
Selected volumes and per tonne                                              
 information                               Three months ended June 30,      
----------------------------------------------------------------------------
                                                      2016                  
----------------------------------------------------------------------------
                                                          Cost of           
                                        Sales   Selling   product           
                                       tonnes     price      sold    Margin 
                                       (000's) ($/tonne) ($/tonne) ($/tonne)
----------------------------------------------------------------------------
Retail                                                                      
----------------------------------------------------------------------------
  Crop nutrients                                                            
----------------------------------------------------------------------------
    North America                       4,133       462       361       101 
----------------------------------------------------------------------------
    International                         715       390       366        24 
----------------------------------------------------------------------------
  Total crop nutrients                  4,848       452       363        89 
----------------------------------------------------------------------------
                                                                            
Wholesale                                                                   
----------------------------------------------------------------------------
  Nitrogen                                                                  
----------------------------------------------------------------------------
    North America                                                           
----------------------------------------------------------------------------
      Ammonia                             394       443                     
----------------------------------------------------------------------------
      Urea                                503       303                     
----------------------------------------------------------------------------
      Other                               271       249                     
----------------------------------------------------------------------------
  Total nitrogen                        1,168       337       210       127 
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
  Potash                                                                    
----------------------------------------------------------------------------
    North America                         440       219                     
----------------------------------------------------------------------------
    International                         257       152                     
----------------------------------------------------------------------------
  Total potash                            697       194       172        22 
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
  Phosphate                               305       526       508        18 
----------------------------------------------------------------------------
  Product purchased for resale            192       272       277        (5)
----------------------------------------------------------------------------
  Ammonium sulfate                        114       296       120       176 
----------------------------------------------------------------------------
  ESN and other                           260                               
----------------------------------------------------------------------------
Total Wholesale                         2,736       322       248        74 
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
Wholesale share of joint ventures                                           
----------------------------------------------------------------------------
  Nitrogen                                133       305       285        20 
----------------------------------------------------------------------------
  Product purchased for resale              -         -         -         - 
----------------------------------------------------------------------------
                                          133       305       285        20 
----------------------------------------------------------------------------
Total Wholesale including                                                   
 proportionate share in joint                                               
 ventures                               2,869       322       251        71 
----------------------------------------------------------------------------
Selected volumes and per tonne                                              
 information                              Three months ended June 30,       
----------------------------------------------------------------------------
                                                      2015                  
----------------------------------------------------------------------------
                                                          Cost of           
                                        Sales   Selling   product           
                                       tonnes     price      sold    Margin 
                                       (000's) ($/tonne) ($/tonne) ($/tonne)
----------------------------------------------------------------------------
Retail                                                                      
----------------------------------------------------------------------------
  Crop nutrients                                                            
----------------------------------------------------------------------------
    North America                       4,144       550       446       104 
----------------------------------------------------------------------------
    International                         722       454       421        33 
----------------------------------------------------------------------------
  Total crop nutrients                  4,866       536       443        93 
----------------------------------------------------------------------------
                                                                            
Wholesale                                                                   
----------------------------------------------------------------------------
  Nitrogen                                                                  
----------------------------------------------------------------------------
    North America                                                           
----------------------------------------------------------------------------
      Ammonia                             441       584                     
----------------------------------------------------------------------------
      Urea                                471       419                     
----------------------------------------------------------------------------
      Other                               311       313                     
----------------------------------------------------------------------------
  Total nitrogen                        1,223       451       231       220 
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
  Potash                                                                    
----------------------------------------------------------------------------
    North America                         334       371                     
----------------------------------------------------------------------------
    International                         175       243                     
----------------------------------------------------------------------------
  Total potash                            509       327       193       134 
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
  Phosphate                               290       665       563       102 
----------------------------------------------------------------------------
  Product purchased for resale            282       369       367         2 
----------------------------------------------------------------------------
  Ammonium sulfate                         96       386       164       222 
----------------------------------------------------------------------------
  ESN and other                           244                               
----------------------------------------------------------------------------
Total Wholesale                         2,644       444       289       155 
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
Wholesale share of joint ventures                                           
----------------------------------------------------------------------------
  Nitrogen                                114       395       338        57 
----------------------------------------------------------------------------
  Product purchased for resale             32       351       341        10 
----------------------------------------------------------------------------
                                          146       386       339        47 
----------------------------------------------------------------------------
Total Wholesale including                                                   
 proportionate share in joint                                               
 ventures                               2,790       441       292       149 
----------------------------------------------------------------------------
Selected volumes and per tonne                                              
 information                                Six months ended June 30,       
----------------------------------------------------------------------------
                                                      2016                  
----------------------------------------------------------------------------
                                                          Cost of           
                                        Sales   Selling   product           
                                       tonnes     price      sold    Margin 
                                       (000's) ($/tonne) ($/tonne) ($/tonne)
----------------------------------------------------------------------------
Retail                                                                      
----------------------------------------------------------------------------
  Crop nutrients                                                            
----------------------------------------------------------------------------
    North America                       5,653       459       364        95 
----------------------------------------------------------------------------
    International                       1,155       376       351        25 
----------------------------------------------------------------------------
  Total crop nutrients                  6,808       445       362        83 
----------------------------------------------------------------------------
                                                                            
Wholesale                                                                   
----------------------------------------------------------------------------
  Nitrogen                                                                  
----------------------------------------------------------------------------
    North America                                                           
----------------------------------------------------------------------------
      Ammonia                             624       427                     
----------------------------------------------------------------------------
      Urea                                822       316                     
----------------------------------------------------------------------------
      Other                               463       256                     
----------------------------------------------------------------------------
  Total nitrogen                        1,909       338       210       128 
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
  Potash                                                                    
----------------------------------------------------------------------------
    North America                         703       217                     
----------------------------------------------------------------------------
    International                         450       163                     
----------------------------------------------------------------------------
  Total potash                          1,153       196       170        26 
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
  Phosphate                               525       553       505        48 
----------------------------------------------------------------------------
  Product purchased for resale            489       304       297         7 
----------------------------------------------------------------------------
  Ammonium sulfate                        171       294       118       176 
----------------------------------------------------------------------------
  ESN and other                           415                               
----------------------------------------------------------------------------
Total Wholesale                         4,662       328       252        76 
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
Wholesale share of joint ventures                                           
----------------------------------------------------------------------------
  Nitrogen                                216       301       270        31 
----------------------------------------------------------------------------
  Product purchased for resale              -         -         -         - 
----------------------------------------------------------------------------
                                          216       301       270        31 
----------------------------------------------------------------------------
Total Wholesale including                                                   
 proportionate share in joint                                               
 ventures                               4,878       327       253        74 
----------------------------------------------------------------------------
Selected volumes and per tonne                                              
 information                               Six months ended June 30,        
----------------------------------------------------------------------------
                                                      2015                  
----------------------------------------------------------------------------
                                                          Cost of           
                                        Sales   Selling   product           
                                       tonnes     price      sold    Margin 
                                       (000's) ($/tonne) ($/tonne) ($/tonne)
----------------------------------------------------------------------------
Retail                                                                      
----------------------------------------------------------------------------
  Crop nutrients                                                            
----------------------------------------------------------------------------
    North America                       5,579       540       442        98 
----------------------------------------------------------------------------
    International                       1,174       431       400        31 
----------------------------------------------------------------------------
  Total crop nutrients                  6,753       521       435        86 
----------------------------------------------------------------------------
                                                                            
Wholesale                                                                   
----------------------------------------------------------------------------
  Nitrogen                                                                  
----------------------------------------------------------------------------
    North America                                                           
----------------------------------------------------------------------------
      Ammonia                             616       569                     
----------------------------------------------------------------------------
      Urea                                819       420                     
----------------------------------------------------------------------------
      Other                               549       316                     
----------------------------------------------------------------------------
  Total nitrogen                        1,984       437       229       208 
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
  Potash                                                                    
----------------------------------------------------------------------------
    North America                         483       378                     
----------------------------------------------------------------------------
    International                         211       240                     
----------------------------------------------------------------------------
  Total potash                            694       336       228       108 
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
  Phosphate                               572       652       522       130 
----------------------------------------------------------------------------
  Product purchased for resale            830       356       347         9 
----------------------------------------------------------------------------
  Ammonium sulfate                        178       362       150       212 
----------------------------------------------------------------------------
  ESN and other                           420                               
----------------------------------------------------------------------------
Total Wholesale                         4,678       436       299       137 
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
Wholesale share of joint ventures                                           
----------------------------------------------------------------------------
  Nitrogen                                166       399       367        32 
----------------------------------------------------------------------------
  Product purchased for resale            117       321       309        12 
----------------------------------------------------------------------------
                                          283       367       343        24 
----------------------------------------------------------------------------
Total Wholesale including                                                   
 proportionate share in joint                                               
 ventures                               4,961       432       301       131 
----------------------------------------------------------------------------

3. Risk Management

Commodity price risk                                                        
                                                                            
Natural gas derivative financial instruments outstanding (notional amounts  
in millions of MMBtu)                                                       
----------------------------------------------------------------------------
                       June 30,                       December 31,          
------------------------------------------- --------------------------------
                         2016                             2015              
------------------------------------------- --------------------------------
                     Average    Fair value            Average    Fair value 
                    contract     of assets           contract     of assets 
           Notional price (a) (liabilities) Notional price (a) (liabilities)
------------------------------------------- --------------------------------
Designated                                                                  
 as hedges                                                                  
------------------------------------------- --------------------------------
  AECO                                                                      
   swaps         61     2.97           (46)       74     2.78           (56)
------------------------------------------- --------------------------------
                                       (46)                             (56)
------------------------------------------- --------------------------------
(a) U.S. dollars per MMBtu. 
                                    Fair value of assets (liabilities)      
                               ---------------------------------------------
Maturities of natural gas                                                   
 derivative contracts                    2016           2017           2018 
----------------------------------------------------------------------------
Designated as hedges                      (11)           (17)           (18)
----------------------------------------------------------------------------
Impact of change in fair value of natural gas                               
 derivative financial instruments                  June 30,    December 31, 
------------------------------------------------------------ ---------------
                                                       2016            2015 
------------------------------------------------------------ ---------------
A $10-million impact to other comprehensive                                 
 income requires movement in gas prices per                                 
 MMBtu                                                 0.23            0.28 
------------------------------------------------------------ ---------------
Use of derivatives to hedge exposure to natural gas market price risk       
----------------------------------------------------------------------------
Term (gas year - 12 months ending                                           
 October 31)                          2016      2017      2018      2019    
----------------------------------------------------------------------------
Maximum allowable (% of forecast                                            
 gas requirements)                      75        75        75        25 (a)
----------------------------------------------------------------------------
Forecast average monthly natural                                            
 gas consumption (millions of            9         9         9         9    
 MMBtu)                                                                     
----------------------------------------------------------------------------
Gas requirements hedged using                                               
 derivatives designated as hedges       25        25        21         -    
 (%)                                                                        
----------------------------------------------------------------------------
(a) Maximum monthly hedged volume may not exceed 90 percent of planned      
    monthly requirements.

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

Currency risk

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

----------------------------------------------------------------------------
                                                 June 30,                   
----------------------------------------------------------------------------
                                                   2016                     
----------------------------------------------------------------------------
                                                      Average    Fair value 
                                                     contract     of assets 
Sell/Buy                        Notional Maturities  price (a) (liabilities)
----------------------------------------------------------------------------
  Forwards                                                                  
----------------------------------------------------------------------------
    USD/CAD                           87       2016      1.30             - 
----------------------------------------------------------------------------
    CAD/USD                        1,911       2016      1.29            12 
----------------------------------------------------------------------------
    USD/AUD                           75       2016      1.43             5 
----------------------------------------------------------------------------
    AUD/USD                           55       2016      1.41            (3)
----------------------------------------------------------------------------
  Options                                                                   
----------------------------------------------------------------------------
    USD/CAD - buy USD puts            55       2016      1.30             2 
----------------------------------------------------------------------------
    USD/CAD - sell USD calls          96       2016      1.40            (1)
----------------------------------------------------------------------------
    USD/AUD - buy USD puts             -          -         -             - 
----------------------------------------------------------------------------
                                                                         15 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                               December 31,                 
----------------------------------------------------------------------------
                                                   2015                     
----------------------------------------------------------------------------
                                                      Average    Fair value 
                                                     contract     of assets 
Sell/Buy                        Notional Maturities  price (a) (liabilities)
----------------------------------------------------------------------------
  Forwards                                                                  
----------------------------------------------------------------------------
    USD/CAD                          190       2016      1.38            (1)
----------------------------------------------------------------------------
    CAD/USD                        1,805       2016      1.35            45 
----------------------------------------------------------------------------
    USD/AUD                           73       2016      1.42             2 
----------------------------------------------------------------------------
    AUD/USD                          143       2016      1.43            (3)
----------------------------------------------------------------------------
  Options                                                                   
----------------------------------------------------------------------------
    USD/CAD - buy USD puts             -          -         -             - 
----------------------------------------------------------------------------
    USD/CAD - sell USD calls           -          -         -             - 
----------------------------------------------------------------------------
    USD/AUD - buy USD puts            59       2016      1.38            (1)
----------------------------------------------------------------------------
                                                                         42 
----------------------------------------------------------------------------
(a) Foreign currency per U.S. dollar.                                       
                               June 30,                  December 31,       
                     --------------------------- ---------------------------
                                 2016                        2015           
                     --------------------------- ---------------------------
                         Fair value                  Fair value             
                     ------------------          ------------------         
                                       Carrying                    Carrying 
                      Level 1  Level 2    value   Level 1  Level 2    value 
----------------------------------------------------------------------------
Financial instruments                                                       
 measured at fair                                                           
 value on a recurring                                                       
 basis                                                                      
----------------------------------------------------------------------------
  Cash and cash                                                             
   equivalents              -      307      307         -      515      515 
----------------------------------------------------------------------------
  Accounts receivable                                                       
   - derivatives            -       23       23         -       48       48 
----------------------------------------------------------------------------
  Other current                                                             
   financial assets -                                                       
   marketable                                                               
   securities              21      100      121        20      122      142 
----------------------------------------------------------------------------
  Accounts payable -                                                        
   derivatives              -       39       39         -       29       29 
----------------------------------------------------------------------------
  Other financial                                                           
   liabilities -                                                            
   derivatives              -       15       15         -       33       33 
----------------------------------------------------------------------------
Financial instruments                                                       
 measured at                                                                
 amortized cost                                                             
----------------------------------------------------------------------------
  Current portion of                                                        
   long-term debt                                                           
----------------------------------------------------------------------------
    Debentures              -      104      100         -        -        - 
----------------------------------------------------------------------------
    Floating rate                                                           
     debt                   -        7        7         -        8        8 
----------------------------------------------------------------------------
  Long-term debt                                                            
----------------------------------------------------------------------------
    Debentures              -    4,809    4,371         -    4,464    4,469 
----------------------------------------------------------------------------
    Fixed and                                                               
     floating rate                                                          
     debt                   -       41       41         -       44       44 
----------------------------------------------------------------------------

There have been no transfers between Level 1 and Level 2 fair value measurements in the six months ended June 30, 2016 or June 30, 2015. We do not measure any of our financial instruments using Level 3 inputs.

4. Expenses

                                     Three months ended   Six months ended  
Other expenses                            June 30,            June 30,      
----------------------------------------------------------------------------
                                         2016      2015      2016      2015 
----------------------------------------------------------------------------
Loss on foreign exchange and related                                        
 derivatives                                6         1         8         - 
----------------------------------------------------------------------------
Interest income                           (16)      (16)      (29)      (33)
----------------------------------------------------------------------------
Gain on sale of assets                      -         -         -       (38)
----------------------------------------------------------------------------
Environmental remediation and asset                                         
 retirement obligations                     3         -         5         9 
----------------------------------------------------------------------------
Bad debt expense                           21        25        29        32 
----------------------------------------------------------------------------
Potash profit and capital tax               5         5         8        10 
----------------------------------------------------------------------------
Other                                      32        11        41        13 
----------------------------------------------------------------------------
                                           51        26        62        (7)
----------------------------------------------------------------------------

5. Debt

                                                     June 30,  December 31, 
-------------------------------------------------------------- -------------
                                                         2016          2015 
-------------------------------------------------------------- -------------
                           Maturity  Rate (%) (a)                           
-------------------------------------------------------------- -------------
Short-term debt                                                             
-------------------------------------------------------------- -------------
  Commercial paper             2016         0.94          950           632 
-------------------------------------------------------------- -------------
  Credit facilities                         4.82          119           203 
-------------------------------------------------------------- -------------
                                                        1,069           835 
-------------------------------------------------------------- -------------
(a) Weighted average rates at June 30, 2016.                                

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

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

Louis Brown, Analyst, Investor Relations
(403) 225-7761
Contact us at: www.agrium.com


Distribution channels: Agriculture, Farming & Forestry, Chemicals