Agrium Reports Third Quarter Earnings

CALGARY, AB--(Marketwired - November 03, 2016) - Agrium Inc. (TSX: AGU) (NYSE: AGU) announced today its 2016 third quarter results, with a net loss attributable to equity holders of Agrium of $41-million ($0.29 diluted loss per share) compared to net earnings of $101-million ($0.72 diluted earnings per share) in the third quarter of 2015. The reduction in net earnings was driven by lower year-over-year nutrient pricing, low pest and disease pressure in the U.S. which limited the demand for crop protection products and application services this growing season, a delayed harvest across North America related to wet weather, and one-time costs primarily related to the proposed merger with PotashCorp.

Highlights:

• Third quarter adjusted net loss was $17-million or $0.12 diluted loss per share. Adjusting for non-operational legal costs, guidance relevant earnings would be a loss of $4-million or $0.03 diluted loss per share (see page 2 for adjusted net earnings and guidance relevant earnings reconciliations)¹.
• We completed several larger retail acquisitions that added 37 locations in North America this quarter alone, bringing our year-to-date total to 70 locations and representing approximately $500-million of expected annual sales. These recent acquisitions added to our costs this quarter, with the benefits expected to be realized starting in 2017.
• Agrium reported significant progress towards its Operational Excellence initiatives in the third quarter with Wholesale cash selling and general and administrative costs down 26 percent compared to the same period last year. Retail also achieved further cost reductions (excluding acquisitions in 2016) which increased Retail EBITDA² to sales from 8 percent to 9 percent and decrease Retail's cash operating coverage ratio³ by 2 percentage points on a year-to-date basis.
• Annual guidance range has been revised to $4.60 to $5.00 diluted earnings per share largely due to wet weather across Western Canada and the eastern U.S. (see page 3 for guidance assumptions and further details).

"Agrium continues to focus on what we can control during these times of market weakness," commented Chuck Magro, Agrium's President and CEO. "I am particularly pleased with the results of our operational excellence initiatives. Our focus on growing our Retail business continues, with 70 locations acquired year-to-date, representing approximately $500-million of expected incremental annual sales. Looking out for the rest of the year, we expect solid demand for crop nutrients; however, growers have experienced poor fall weather in Canada and pockets of the U.S. which has impacted harvest progress and ammonia applications," added Mr. Magro.

"Our proposed merger with PotashCorp is a transformational opportunity to create a world class integrated global supplier of crop inputs and services. This merger creates benefits and opportunities that neither company could achieve on its own and will unlock significant value for shareholders of both companies. By generating meaningful synergies, and producing significant combined cash flows, the new company will be positioned for further growth, while benefiting customers, suppliers, shareholders, communities and other stakeholders," concluded Mr. Magro.

1	Effective tax rate of 27 percent for the third quarter and 28 percent for the first nine months of 2016 were used for the adjusted net earnings, guidance relevant 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 and our guidance by eliminating share-based payments expense (recovery), gains (losses) on foreign exchange and related gains (losses) on non-qualifying derivative hedges and significant non-operating, non-recurring items. These should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with IFRS and may not be directly comparable to similar measures presented by other companies.
2	Earnings (loss) from operations before finance costs, income taxes, depreciation and amortization.
3	This is a non-IFRS measure. Refer to section "Non-IFRS Measures".

ADJUSTED NET EARNINGS AND GUIDANCE RELEVANT EARNINGS RECONCILIATIONS

		Three months ended						Nine months ended
		September 30, 2016						September 30, 2016
(millions of U.S. dollars, except per share amounts)		Expense		Net earnings (loss) impact (post-tax)		Per share(a)		Expense		Net earnings  impact (post-tax)		Per share(a)
				(39	)	(0.29	)			529		3.80
Adjustments:
	Share-based payments	5		4		0.03		22		16		0.12
	Foreign exchange loss  net of non-qualifying derivatives	2		1		0.01		10		7		0.05
	Merger and related costs	17		12		0.09		17		12		0.09
	IT outsourcing costs	7		5		0.04		7		5		0.04
Adjusted net earnings (b)				(17	)	(0.12	)			569		4.10
Additional items not included in earnings guidance:
	Non-operational legal costs	18		13		0.09		18		13		0.09
Guidance relevant earnings (b)				(4	)	(0.03	)			582		4.19

(a)	Diluted per share information attributable to equity holders of Agrium
(b)	Effective tax rates of 27 percent for the third quarter and 28 for the first nine months of 2016 were used for the adjusted net earnings, guidance relevant earnings and per share calculations.

MARKET OUTLOOK

Agricultural and Crop Input Fundamentals

• For the third time in four years, the United States Department of Agriculture (USDA) projects record production for both global grain and oilseed production and for U.S. corn and soybeans.
• Crop prices and grower margins weakened throughout much of the third quarter. While favorable weather supported high yields, growers have been conservative with crop input purchases, which has pressured demand and prices for most crop input products.
• Despite the expected record production levels, U.S. corn prices have been supported in recent weeks by robust export demand as export sales of corn are up 85 percent compared to prior year levels.
• U.S. harvest is progressing at a near-average pace signifying a wider fall application season versus the previous three years if weather cooperates. However, the Western Canadian harvest has been stalled by early snowfall and cool temperatures, which may negatively impact fall ammonia demand.

Nitrogen

• Urea prices were relatively stable in the third quarter, whereas both UAN and ammonia prices declined.
• In recent weeks urea prices have increased driven by sizeable Indian urea imports and lower than expected export availability out of China. Chinese urea producers' operating rates have been reduced due to lower global prices and higher costs, resulting from an almost 60 percent increase in Chinese bituminous coal prices.
• U.S. offshore urea imports are down approximately 65 percent so far in the 2016/17 fertilizer year, as prices were below import parity throughout much of the third quarter. Domestic production has increased, and is expected to increase further in late 2016 and early 2017. However, the reduction in U.S. imports is expected to exceed the growth in domestic supply, and we anticipate a need for increased imports in late 2016 and early 2017.

Potash

• The signing of potash contracts with buyers in India and China during the third quarter provided increased confidence to potash buyers globally and led to strong demand in order to refill depleted downstream inventories.
• The emergence of pent-up demand over the past couple of months has tightened the available supply from producers for the remainder of 2016.
• Brazilian potash imports were up 21 percent year-over-year in the third quarter and are now ahead of the record 2014 pace on a year-to-date basis.
• We expect demand to continue to be strong for the remainder of 2016, particularly if fall weather allows for a normal fall application season in the U.S. as the past three years have all been below-average due to weather.

Phosphate

• Weak Indian diammonium phosphate (DAP) imports and recent lack of demand from Brazil have maintained pressure on the phosphate market. While the pace of purchases from India and Pakistan increased in the second half of 2016, it has not been enough to provide support in phosphate markets.
• While demand has been disappointing, the outlook for the remainder of 2016 and early 2017 is more positive due to reportedly tight phosphate inventories in Brazil and prospects for a year-over-year improvement in U.S. fall demand.

2016 ANNUAL GUIDANCE

Based on our Market Outlook, Agrium expects to achieve annual diluted earnings per share of $4.60 to $5.00 in 2016 compared to our previous forecast of $5.00 to $5.30. We have lowered our annual guidance range due to the persistent weakness in global nutrient prices, and low demand for crop protection products and application services during the third quarter. Notwithstanding the current weather issues in Western Canada, our outlook for the fourth quarter is predicated upon a strong North American fall season driving high fertilizer application rates.

The lower end of our nitrogen production guidance was increased to 3.6 million tonnes due to higher plant utilization rates while our estimate for potash production was lowered between 2.1 and 2.2 million tonnes.

We are reiterating the range for Retail crop nutrient sales tonnes at between 9.8 million to 10.2 million tonnes while lowering the Retail EBITDA range between $1.07-billion and $1.11-billion.

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

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

2016 ANNUAL GUIDANCE RANGE AND ASSUMPTIONS

			Annual
			Low		High
Diluted EPS (in U.S. dollars)			$4.60		$5.00
Guidance assumptions:
Wholesale:
	Production tonnes:
		Nitrogen (millions)	3.6		3.7
		Potash (millions)	2.1		2.2
Retail:
	EBITDA (millions of U.S. dollars)		$1,070		$1,110
	Crop nutrient sales tonnes (millions)		9.8		10.2
Other:
	Tax rate		28	%	27	%
	Sustaining capital expenditures (millions of U.S. dollars)		$400		$450
	Total capital expenditures (millions of U.S. dollars)		$750		$800
	Canada/U.S. foreign exchange rate		$1.31		$1.33
	NYMEX gas price ($/MMBtu)		$2.60		$2.40

MANAGEMENT'S DISCUSSION AND ANALYSIS

November 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 third quarter of 2016 (three months ended September 30, 2016) and for the nine months ended September 30, 2016 are against results for the third quarter of 2015 (three months ended September 30, 2015) and nine months ended September 30, 2015. All dollar amounts refer to United States (U.S.) dollars except where otherwise stated. The financial measures cash operating coverage ratio, cash selling and general and administrative expenses and cash gross margin per tonne 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 these non-IFRS financial measures to provide useful information to both management and investors in measuring our financial performance. These non-IFRS financial measures 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 November 3, 2016 and should be read in conjunction with the Consolidated Interim Financial Statements for the three and nine months ended September 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 Third Quarter Operating Results

CONSOLIDATED NET EARNINGS

Financial Overview
	Three months ended September 30,								Nine months ended September 30,
(millions of U.S. dollars, except per share amounts and where noted)	2016		2015		Change		% Change		2016		2015		Change		% Change
Sales	2,245		2,524		(279	)	(11	)	11,385		12,388		(1,003	)	(8	)
Gross profit	568		696		(128	)	(18	)	2,647		2,988		(341	)	(11	)
Expenses	555		505		50		10		1,711		1,696		15		1
Earnings before finance costs and income taxes	13		191		(178	)	(93	)	936		1,292		(356	)	(28	)
Net (loss) earnings	(39	)	99		(138	)	(139	)	529		788		(259	)	(33	)
Diluted (loss) earnings per share	(0.29	)	0.72		(1.01	)	(140	)	3.80		5.52		(1.72	)	(31	)
Effective tax rate (%)	27		27		-		N/A		28		29		(1	)	N/A

Sales and Gross Profit
		Three months ended September 30,						Nine months ended September 30,
(millions of U.S. dollars)		2016		2015		Change		2016		2015		Change
Sales
	Retail	1,857		2,011		(154	)	9,938		10,434		(496	)
	Wholesale	518		673		(155	)	2,049		2,714		(665	)
	Other	(130	)	(160	)	30		(602	)	(760	)	158
		2,245		2,524		(279	)	11,385		12,388		(1,003	)
Gross profit
	Retail	482		494		(12	)	2,163		2,129		34
	Wholesale	84		218		(134	)	438		861		(423	)
	Other	2		(16	)	18		46		(2	)	48
		568		696		(128	)	2,647		2,988		(341	)

• Retail's sales decreased in the third quarter and first nine months of 2016 primarily as a result of lower crop nutrient selling prices despite increased sales volumes. Lower crop protection product sales in the U.S. also contributed to the decrease in the third quarter.
• Despite lower sales, Retail's gross profit was higher for the first nine months of 2016 due to increases in higher-margin proprietary product sales and total crop protection products. Retail's gross profit for the third quarter of 2016 decreased due to lower crop protection product sales.
• Wholesale's sales and gross profit decreased in the third quarter and first nine months compared to the same periods of last year primarily due to lower market prices for all products.

Expenses

• Our share-based payments expense increased by $20-million and decreased by $14-million in the third quarter and first nine months of 2016, respectively, compared to the same periods last year due to the movements in our share price.
• Earnings from associates and joint ventures increased in the third quarter and first nine months of 2016 compared to the same periods last year as a result of higher urea sales, increased plant efficiency in Profertil S.A. ("Profertil") and lower natural gas costs. For the first nine months of 2016, we also recorded an increase in earnings from our share of Profertil's reversal of a gas tariff provision of $21-million, which was partially offset by a $6-million loss related to our share of the losses in Canpotex Limited ("Canpotex") from its cancellation of a project to build an export terminal in British Columbia.
• We incurred costs related to our proposed merger with Potash Corporation of Saskatchewan Inc. ("PotashCorp") and merger and related costs aggregating to $17-million and legal settlements and fees of $18-million. These were recorded in the third quarter of 2016.
• 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.
• For further breakdown on Other expenses see table provided below:

Other expenses breakdown
	Three months ended						Nine months ended
	September 30,						September 30,
(millions of U.S. dollars)	2016		2015		Change		2016		2015		Change
Loss on foreign exchange and related derivatives	2		13		(11	)	10		13		(3	)
Interest income	(20	)	(19	)	(1	)	(49	)	(52	)	3
Gain on sale of assets	-		-		-		-		(38	)	38
Environmental remediation and asset retirement obligations	4		6		(2	)	9		15		(6	)
Bad debt expense (recovery)	3		(4	)	7		32		28		4
Potash profit and capital tax	2		3		(1	)	10		13		(3	)
Merger and related costs	17		6		11		17		17		-
Litigation settlements and related fees	18		3		15		18		4		14
Other	21		-		21		62		1		61
	47		8		39		109		1		108

Depreciation and Amortization
Depreciation and amortization breakdown
		Three months ended September 30,
		2016								2015
(millions of U.S. dollars)		Cost of product sold		Selling		General and administrative		Total		Cost of product sold		Selling		General and administrative		Total
Retail		2		67		2		71		2		62		1		65
Wholesale
	Nitrogen	16		-		-		16		15		-		1		16
	Potash	22		-		-		22		16		-		-		16
	Phosphate	17		-		-		17		13		-		-		13
	Wholesale Other (a)	2		-		-		2		2		-		-		2
		57		-		-		57		46		-		1		47
Other		-		-		4		4		-		-		3		3
Total		59		67		6		132		48		62		5		115

		Nine months ended September 30,
		2016								2015
(millions of U.S. dollars)		Cost of product sold		Selling		General and administrative		Total		Cost of product sold		Selling		General and administrative		Total
Retail		5		197		4		206		5		180		3		188
Wholesale
	Nitrogen	52		-		-		52		53		-		1		54
	Potash	73		-		-		73		43		-		-		43
	Phosphate	40		-		-		40		37		-		-		37
	Wholesale Other (a)	9		-		1		10		10		-		2		12
		174		-		1		175		143		-		3		146
Other		-		-		10		10		-		-		11		11
Total		179		197		15		391		148		180		17		345

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

• Depreciation and amortization expense increased in third quarter and first nine months of 2016 as we increased our sales volumes from the ramp-up of production at our Vanscoy potash facility for which we calculate such expense on a units of production basis, and from additional depreciation and amortization from our Retail acquisitions.

Effective Tax Rate

• The effective tax rate is 27 percent for both the third quarter of 2016 and 2015. The effective tax rate of 28 percent for the first nine months of 2016 is lower than the tax rate of 29 percent for the same period last year due to an increase in earnings from associates and joint ventures which are reported net of income tax.

BUSINESS SEGMENT PERFORMANCE

Retail
	Three months ended September 30,
(millions of U.S. dollars)	2016		2015		Change
Sales	1,857		2,011		(154	)
Cost of product sold	1,375		1,517		(142	)
Gross profit	482		494		(12	)
EBITDA	101		129		(28	)
Selling and general and administrative expenses	469		462		7

• Retail reported lower gross profit and EBITDA¹ than the prior year period. Most of the reduction was due to reduced demand for crop protection products and associated application services in the U.S. due to minimal pest pressure from insects or disease and the excellent crop conditions. Results were also impacted by wet weather across much of North America towards the end of the quarter which delayed harvest and impacted nutrient applications in some regions.
• Total Retail selling and general and administrative expenses were up $7-million from the third quarter of last year; however, such expenses were down by $5-million on a cash basis, after adjusting for costs associated with the acquired retail locations in 2016. Our cash operating coverage ratio also improved by two percentage points on a rolling four quarter basis over the same period last year due to our continued focus on cost reduction.
• In North America, U.S. operations experienced challenging market conditions during the quarter, with tight grower economics, high crop yields and minimal pest pressure resulting in substantially less crop protection products used. U.S. EBITDA was down $66-million in the third quarter over the same period last year. Our Canadian operations reported stronger results this quarter as EBITDA improved by $13-million due to solid demand for crop protection products and reduced selling and general and administrative expenses.
• Internationally, South American EBITDA increased by $9-million due to strong crop nutrient and crop protection product gross profit as the improved political and economic environment in Argentina continues to support the agriculture industry. In Australia, EBITDA more than doubled compared to the same period last year primarily on strong gross profit from crop protection products and application services.

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

Retail sales and gross profit by product line
	Three months ended September 30,
	Sales						Gross profit						Gross profit (%)
(millions of U.S. dollars, except where noted)	2016		2015		Change		2016		2015		Change		2016		2015
Crop nutrients	502		582		(80	)	118		113		5		24		19
Crop protection products	983		1,040		(57	)	226		234		(8	)	23		23
Seed	59		60		(1	)	22		26		(4	)	37		43
Merchandise	175		166		9		29		25		4		17		15
Services and other	138		163		(25	)	87		96		(9	)	63		59

Crop nutrients

• Total crop nutrient sales were 14 percent lower this quarter compared to the same period last year due to significantly lower prices across all nutrients.
• Total crop nutrient volumes were higher by 4 percent this quarter compared to the same period last year as higher volumes in South America and Canada more than offset lower volumes in the U.S. Wet weather across much of North America towards the end of the quarter delayed harvest and impacted nutrient applications in some regions. On a year-to-date basis, total crop nutrient volumes were slightly higher than last year with increased volumes in South America and the U.S.
• Total crop nutrient gross profit was 4 percent higher this quarter due to lower costs per tonne in all jurisdictions, which more than offset the lower selling prices. North American nutrient margin per tonne was comparable to the same period last year, despite average nutrient selling prices being 18 percent lower this year. As a result, gross profit as a percentage of sales rose to 24 percent this period compared to 19 percent in the third quarter of 2015.

Crop protection products

• Total crop protection product sales were down 5 percent in the quarter, as historically high crop condition ratings and high yields in North America, as well as limited pest and disease pressures combined to reduce the demand for crop protection products.
• Crop protection product margins as a percentage of sales this quarter were consistent with last year's levels, supported by lower cost of goods sold, and an increase in the proportion of proprietary product sales this period.
• Proprietary crop protection product sales as a percentage of total crop protection product sales reached 24 percent this quarter, up 2 percentage points over the same period last year.

Seed

• Seed sales were comparable to the same period last year, although seed sales are generally low in the third quarter as few major crops are being planted during the period.
• Total seed margins as a percentage of sales this quarter decreased 6 percentage points compared to the same period last year. The decrease was primarily due to a shift in regional mix in sales, with lower sales in the U.S. and an increase in lower margin sales in our International operations, as well as timing of rebates.

Merchandise

• Merchandise sales increased 5 percent and gross profit as a percentage of sales increased 2 percent compared to the same period last year, primarily due to an increase in higher margin ag-equipment sales in Canada.

Services and other

• Sales for services and other was down 15 percent this quarter due to the reduced demand for crop protection products, and the subsequent reduction in demand for application services.

Wholesale
	Three months ended September 30,
(millions of U.S. dollars, except where noted)	2016		2015		Change
Sales	518		673		(155	)
Sales volumes (tonnes 000's)	1,792		1,667		125
Cost of product sold	434		455		(21	)
Gross profit	84		218		(134	)
EBITDA	118		221		(103	)
Expenses	23		44		(21	)

• Lower global fertilizer prices across all nutrients resulted in total sales being down year-over-year.

Lower sales were partially offset by a reduction in fixed costs as a result of our ongoing cost review process and lower natural gas costs this quarter compared to the same period last year.

Wholesale NPK product information
	Three months ended September 30,
	Nitrogen						Potash						Phosphate
	2016		2015		Change		2016		2015		Change		2016		2015		Change
Gross profit (U.S. dollar millions)	59		130		(71	)	1		42		(41	)	11		31		(20	)
Sales volumes (tonnes 000's)	739		760		(21	)	496		384		112		278		269		9
Selling price ($/tonne)	291		388		(97	)	178		279		(101	)	478		629		(151	)
Cost of product sold ($/tonne)	212		217		(5	)	175		171		4		439		514		(75	)
Gross margin ($/tonne)	79		171		(92	)	3		108		(105	)	39		115		(76	)

Nitrogen

• Nitrogen gross profit was down 55 percent compared to the same period last year primarily due to significantly lower benchmark nitrogen prices, partially offset by lower overall fixed costs and input costs.
• Sales volumes were lower than the same period last year primarily due to delayed ammonia fall applications this quarter and outages at our Redwater and Carseland nitrogen facilities.
• Realized selling prices per tonne were down 25 percent compared to the same period last year due to lower global benchmark nitrogen prices.
• Cost of product sold per tonne was 2 percent lower than the same period last year due to lower overall fixed costs and lower natural gas prices.

Natural gas prices: North American indices and North American Agrium prices
	Three months ended September 30,
(U.S. dollars per MMBtu)	2016		2015
Overall gas cost excluding realized derivative impact	2.05		2.43
Realized derivative impact	0.28		(0.04	)
Overall gas cost	2.33		2.39
Average NYMEX	2.78		2.77
Average AECO	1.69		2.16

Potash

• Potash gross profit in the third quarter declined 98 percent compared to the same period last year due to downward pressure on potash benchmark prices. As a result, gross margin was $3 per tonne for the quarter and on a cash-basis, margins were $47 per tonne.
• Lower realized selling prices were partly offset by higher sales volumes this year. Sales volumes in the third quarter were 29 percent higher than the same period last year as prior year volumes were reduced as the ramp-up of our Vanscoy potash facility expansion was not fully operational. International sales volumes were 26 percent higher than the third quarter of last year primarily due to Agrium's higher Canpotex allocation in 2016.
• Realized selling prices have contracted sharply over the past year with international selling prices down 39 percent period-over-period and a decline of 35 percent in North American markets.
• Cost of product sold per tonne was slightly higher than the same period last year due to a longer than usual turnaround this quarter.

Phosphate

• Phosphate gross profit was 65 percent lower than the same period last year primarily due to significantly lower selling prices. Higher sales volumes and lower cost of product sold per tonne partially offset the impact from the decline in prices.
• Cost of product sold per tonne was down 15 percent compared to the same period last year due to favorable freight expense adjustments and lower ammonia input costs.

Wholesale Other

Wholesale Other: gross profit breakdown
	Three months ended September 30,
(millions of U.S. dollars)	2016		2015		Change
Ammonium sulfate	9		10		(1	)
ESN	6		6		-
Product purchased for resale	-		2		(2	)
Other	(2	)	(3	)	1
	13		15		(2	)

• Gross profit from Wholesale Other was slightly lower than the same period last year primarily due to lower realized selling prices for all Other products, partially offset by lower input costs.

Expenses

• Wholesale expenses decreased by $21-million in the current quarter due to reduced selling and general and administrative costs and increased earnings from our equity investments. Selling and general and administrative costs were $6-million lower, or a 30 percent reduction compared to the same period last year as a result of on-going operational excellence initiatives.
• Earnings from equity investments increased $14-million compared to the same period last year, primarily relating to our investment in Profertil. The increase was driven by a more positive agricultural environment in Argentina, lower production costs resulting from plant efficiencies and lower natural gas costs.

Other

EBITDA for our Other non-operating business unit for the third quarter of 2016 had a net expense of $74-million, compared to net expense of $44-million for the third quarter of 2015. The variance was primarily due to:

• merger and related costs of $17-million
• an increase of $20-million in share-based payments expense as a result of an increase in our share price
• litigation settlements and related fees of $18-million
• partially offset by an $18-million increase in gross profit recovery as a result of higher intersegment inventory held at the end of the third quarter of 2016

FINANCIAL CONDITION

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

(millions of U.S. dollars, except where noted)		September 30,2016		December 31, 2015		$ Change		% Change			Explanation of the change in the balance
Current assets
	Cash and cash equivalents	311		515		(204	)	(40	%)		See discussion under the section "Liquidity and Capital Resources".
	Accounts receivable	2,962		2,053		909		44	%		Seasonal sales activity for Retail resulted in higher Retail trade and vendor rebates receivable.
	Income taxes receivable	52		4		48		1,200	%		Canadian tax installments paid exceeded the Canadian tax provision for the first nine months.
	Inventories	2,666		3,314		(648	)	(20	%)		Inventory drawdown due to seasonal sales activity.
	Prepaid expenses and deposits	133		688		(555	)	(81	%)		Drawdown of prepaid inventory where Retail typically prepays for product at year end and takes possession of inventory throughout the year.
	Other current assets	132		144		(12	)	(8	%)		-
Current liabilities
	Short-term debt	1,740		835		905		108	%		Increased financing for working capital requirements.
	Accounts payable	2,938		3,919		(981	)	(25	%)		Drawdown in customer prepayments during the spring application season and reductions in trade payables as the third quarter is typically a low point for product purchasing.
	Income taxes payable	3		82		(79	)	(96	%)		2015 tax accrual was paid.
	Current portion of long-term debt	110		8		102		1,275	%		Increase relates to $100-million 7.7 percent debentures due in 2017.
	Current portion of other provisions	67		85		(18	)	(21	%)		-
Working capital		1,398		1,789		(391	)	(22	%)

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 September 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:

	Nine months ended September 30,
(millions of U.S. dollars)	2016		2015		Change
Cash provided by operating activities	205		570		(365	)
Cash used in investing activities	(877	)	(1,182	)	305
Cash provided by financing activities	526		484		42
Effect of exchange rate changes on cash and cash equivalents	(58	)	33		(91	)
Decrease in cash and cash equivalents	(204	)	(95	)	(109	)

Cash provided by operating activities	•	Lower net earnings primarily due to lower realized selling prices for all products in our Wholesale business unit, partially offset by lower cost of crop nutrient inventory purchases in our Retail business unit.
	•	$196-million decrease in cash resulting from larger amount of taxes paid in the first nine months of 2016 compared to 2015.
	•	$62-million decrease in cash due to higher interest payments made in the first nine months of 2016 resulting from the timing of interest paid on debt.
Cash used in investing activities	•	Lower capital expenditures compared to the first nine months of 2015 due to decreased spending on our Vanscoy potash facility and Borger expansion project.
Cash provided by financing activities	•	Higher cash provided by financing as a result of not undertaking any share repurchase activity in the first nine months of 2016 versus $559-million cash outflow for share repurchases made in the first nine months of 2015. The increase in cash flows resulting from the reduction in share repurchase activity was partially offset by $514-million reduction in cash inflows related to short-term and long-term financing draws in the first nine months of 2016.

Capital Spending and Expenditures (a)
		Three months ended				Nine months ended
		September 30,				September 30,
(millions of U.S. dollars)		2016		2015		2016		2015
Retail
	Sustaining	13		11		88		103
	Investing	10		8		29		25
		23		19		117		128
	Acquisitions (b)	141		1		316		85
		164		20		433		213
Wholesale
	Sustaining	55		72		206		199
	Investing	67		77		222		578
		122		149		428		777
Other
	Sustaining	1		1		3		3
	Investing	1		1		3		2
		2		2		6		5
Total
	Sustaining	69		84		297		305
	Investing	78		86		254		605
		147		170		551		910
	Acquisitions (b)	141		1		316		85
		288		171		867		995

(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 third quarter and first nine months of 2016 compared to the same periods last year due to the ramp-up of our Vanscoy potash facility in the third quarter and first nine months of 2015 combined with decreased spending on the Borger project in 2016.
• We completed the acquisitions of 16 farm centers located in the provinces of Alberta and Saskatchewan from Andrukow Group Solutions Inc. and 18 farm centers located across the northern U.S. Cornbelt region from Cargill AgHorizons (U.S.) in September 2016.
• We expect Agrium's capital expenditures for the remainder of 2016 to approximate $200-million to $250-million. We anticipate that we will be able to finance the announced projects through a combination of cash provided from operating activities and existing credit facilities.

Short-term Debt

• Our short-term debt of $2-billion at September 30, 2016 is outlined in note 5 of our Summarized Notes to the Consolidated Financial Statements.
• Our short-term debt increased by $905-million during the first nine months of 2016, which in turn contributed to a decrease in our unutilized short-term financing capacity to $1.1-billion at September 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 September 30, 2016. Our ability to comply with these covenants has not changed since December 31, 2015.

PROPOSED MERGER WITH POTASHCORP

Agrium and PotashCorp entered into an arrangement agreement dated September 11, 2016 (the "Agreement"), under which the companies will combine in a merger of equals into a newly incorporated parent entity to be formed to manage and hold the combined businesses of both Agrium and PotashCorp. The Agreement will be implemented by a proposed plan of arrangement (the "Arrangement"). The Arrangement is anticipated to be completed in mid-2017, subject to customary closing conditions, including receipt of regulatory and court approvals and approvals by Agrium securityholders and PotashCorp shareholders.

Refer to note 6 of our Summarized Notes to the Consolidated Financial Statements and Agrium and PotashCorp's joint proxy circular, dated October 3, 2016 filed on SEDAR on October 6, 2016 (the "Joint Proxy Circular") for further information.

SHARE REPURCHASES

We have approval from the Toronto Stock Exchange (TSX) to purchase for cancellation on the 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. Pursuant to the Agreement we are restricted from purchasing our outstanding shares prior to completion of the Arrangement.

There were no shares repurchased under the NCIB for the first nine months of 2016 or the period from October 1, 2016 to November 2, 2016.

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

OUTSTANDING SHARE DATA

Agrium had 138,175,400 outstanding shares at October 28, 2016. At October 28, 2016, the number of shares issuable pursuant to stock options outstanding (issuable assuming full conversion, where each option granted can be exercised for one common share) was approximately 937,528.

SELECTED QUARTERLY INFORMATION
(millions of U.S. dollars, except per share amounts)		2016 Q3		2016 Q2		2016 Q1		2015 Q4		2015 Q3		2015 Q2		2015 Q1		2014 Q4
Sales		2,245		6,415		2,725		2,407		2,524		6,992		2,872		2,705
Gross profit		568		1,525		554		900		696		1,708		584		732
Net earnings (loss) from continuing operations		(39	)	565		3		200		99		675		14		70
Net loss from discontinued operations		-		-		-		-		-		-		-		(19	)
Net earnings (loss)		(39	)	565		3		200		99		675		14		51
Earnings (loss) per share from continuing operations attributable to equity holders of Agrium:
	Basic and diluted	(0.29	)	4.08		0.02		1.45		0.72		4.71		0.08		0.46
Loss per share from discontinued operations attributable to equity holders of Agrium:
	Basic and diluted	-		-		-		-		-		-		-		(0.13	)
Earnings (loss) per share attributable to equity holders of Agrium:
	Basic and diluted	(0.29	)	4.08		0.02		1.45		0.72		4.71		0.08		0.33
Dividends declared		120		122		121		121		120		125		112		112
Dividends declared per share		0.875		0.875		0.875		0.875		0.875		0.875		0.780		0.780

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 measures, their definitions and why management uses the measures.

Non-IFRS financial measure		Definition		Why we use the measure and why it is useful to investors
Cash operating coverage ratio		Cash operating coverage ratio represents gross profit excluding depreciation and amortization less EBITDA, divided by gross profit excluding depreciation and amortization.		Assists management and investors in understanding the costs and underlying economics of our operations and in assessing our operating performance and our ability to generate free cash flow from our business units and overall as a company.
Cash gross margin per tonne, cash selling and general and administrative expenses		Selected financial measures excluding depreciation and amortization

Retail cash operating coverage ratio
	Rolling four quarters ended September 30,
(millions of U.S. dollars, except as noted)	2016		2015
Gross profit	2,762		2,743
Depreciation and amortization in cost of product sold	6		6
Gross profit excluding depreciation and amortization	2,768		2,749
EBITDA	1,088		1,015
Operating expenses excluding depreciation and amortization	1,680		1,734
Cash operating coverage ratio (%)	61		63

Wholesale potash cash gross margin per tonne
	Three months ended
	September 30, 2016
(millions of U.S. dollars)
Potash gross margin per tonne	3
Depreciation and amortization in cost of product sold per tonne	44
Potash cash gross margin per tonne	47

Cash selling and general and administrative expenses
	Three months ended September 30,
	2016		2015		2016		2015		2016		2015
(millions of U.S. dollars)	Retail				Wholesale				Consolidated
Selling	443		437		7		9		446		441
Depreciation and amortization in selling expense	67		62		-		-		67		62
Cash selling	376		375		1		9		379		379
General and administrative	26		25		7		11		60		61
Depreciation and amortization in general and administrative	2		1		-		1		6		5
Cash general and administrative	24		24		2		10		54		56

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 nine months ended September 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. There are various risks associated with the Arrangement. See the heading "Risk Factors Related to the Arrangement" in the Joint Proxy Circular.

CONTROLS AND PROCEDURES

There have been no changes in our internal control over financial reporting during the three months ended September 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 remainder of 2016; expectations regarding performance of our business segments in 2016; expectations regarding completion of previously announced acquisitions; 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; and the proposed Arrangement, including timing of completion thereof. 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; the 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; the receipt, on a timely basis, of regulatory, stock exchange, shareholder and Canadian final court approval in respect of the proposed Arrangement and satisfaction of other closing conditions relating to the Arrangement. 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; the risks that are inherent in the nature of the Arrangement, including the failure to satisfy all regulatory conditions or obtain required regulatory, court and securityholder approvals (or to do so in a timely manner) and failure to satisfy all other closing conditions in accordance with the terms of the Agreement, in a timely manner and on favourable terms or at all; 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 fiber. 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 3^rd Quarter Conference Call will be available in a listen-only mode beginning Thursday, November 3^rd, 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				Nine months ended
			September 30,				September 30,
(millions of U.S. dollars, unless otherwise stated)		Notes	2016		2015		2016		2015
Sales			2,245		2,524		11,385		12,388
Cost of product sold			1,677		1,828		8,738		9,400
Gross profit			568		696		2,647		2,988
Expenses
	Selling		446		441		1,434		1,456
	General and administrative		60		61		177		194
	Share-based payments		5		(15	)	22		36
	(Earnings) loss from associates and joint ventures		(3	)	10		(31	)	9
	Other expenses	4	47		8		109		1
Earnings before finance costs and income taxes			13		191		936		1,292
	Finance costs related to long-term debt		51		41		153		128
	Other finance costs		15		14		53		51
(Loss) earnings before income taxes			(53	)	136		730		1,113
	Income taxes		(14	)	37		201		325
Net (loss) earnings			(39	)	99		529		788
Attributable to
	Equity holders of Agrium		(41	)	101		525		787
	Non-controlling interest		2		(2	)	4		1
Net (loss) earnings			(39	)	99		529		788
Earnings per share attributable to equity holders of Agrium
	Basic and diluted (loss) earnings per share		(0.29	)	0.72		3.80		5.52
	Weighted average number of shares outstanding for basic and diluted earnings per share (millions of common shares)		138		141		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 November 2, 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				Nine months ended
						September 30,				September 30,
(millions of U.S. dollars)					Notes	2016		2015		2016		2015
Net (loss) earnings						(39	)	99		529		788
	Other comprehensive (loss) income
		Items that are or may be reclassified to earnings
			Cash flow hedges		3
				Effective portion of changes in fair value		(6	)	(10	)	(12	)	(30	)
				Deferred income taxes		1		3		4		8
			Share of comprehensive income (loss) of associates and joint ventures			1		(2	)	2		(7	)
			Foreign currency translation
				(Losses) gains		-		(294	)	153		(532	)
				Reclassifications to earnings		-		-		-		1
						(4	)	(303	)	147		(560	)
		Items that will never be reclassified to earnings
			Post-employment benefits
				Actuarial losses		(1	)	-		(25	)	-
				Deferred income taxes		-		-		7		1
						(1	)	-		(18	)	1
	Other comprehensive (loss) income					(5	)	(303	)	129		(559	)
Comprehensive (loss) income						(44	)	(204	)	658		229
Attributable to
	Equity holders of Agrium					(46	)	(205	)	654		226
	Non-controlling interest					2		1		4		3
Comprehensive (loss) income						(44	)	(204	)	658		229
See accompanying notes.

AGRIUM INC.
Consolidated Balance Sheets
(Unaudited)
				September 30,					December 31,
(millions of U.S. dollars)			Notes	2016		2015			2015
Assets
	Current assets
		Cash and cash equivalents		311		753			515
		Accounts receivable		2,962		2,927			2,053
		Income taxes receivable		52		12			4
		Inventories		2,666		2,759			3,314
		Prepaid expenses and deposits		133		165			688
		Other current assets		132		148			144
				6,256		6,764			6,718
	Property, plant and equipment			6,935		6,274			6,333
	Intangibles			638		635			632
	Goodwill			2,033		1,995			1,980
	Investments in associates and joint ventures			624		574			607
	Other assets			56		65			54
	Deferred income tax assets			38		55			53
				16,580		16,362			16,377
Liabilities and shareholders' equity
	Current liabilities
		Short-term debt	5	1,740		1,782			835
		Accounts payable		2,938		2,923			3,919
		Income taxes payable		3		59			82
		Current portion of long-term debt		110		11			8
		Current portion of other provisions		67		82			85
				4,858		4,857			4,929
	Long-term debt			4,400		4,517			4,513
	Post-employment benefits			163		139			124
	Other provisions			332		342			336
	Other liabilities			64		81			85
	Deferred income tax liabilities			434		420			383
				10,251		10,356			10,370
	Shareholders' equity
		Share capital		1,764		1,756			1,757
		Retained earnings		5,677		5,444			5,533
		Accumulated other comprehensive loss		(1,118	)	(1,198	)		(1,287	)
		Equity holders of Agrium		6,323		6,002			6,003
		Non-controlling interest		6		4			4
		Total equity		6,329		6,006			6,007
				16,580		16,362			16,377
See accompanying notes.

AGRIUM INC.
Consolidated Statements of Cash Flows
(Unaudited)
			Three months ended				Nine months ended
			September 30,				September 30,
(millions of U.S. dollars)			2016		2015		2016		2015
Operating
	Net (loss) earnings		(39	)	99		529		788
	Adjustments for
		Depreciation and amortization	132		115		391		345
		(Earnings) loss from associates and joint ventures	(3	)	10		(31	)	9
		Share-based payments	5		(15	)	22		36
		Unrealized loss (gain) on derivative financial instruments	14		(6	)	36		7
		Unrealized foreign exchange loss (gain)	21		(13	)	(20	)	(23	)
		Interest income	(20	)	(19	)	(49	)	(52	)
		Finance costs	66		55		206		179
		Income taxes	(14	)	37		201		325
		Other	(2	)	(3	)	(3	)	(22	)
	Interest received		21		21		50		54
	Interest paid		(83	)	(71	)	(223	)	(161	)
	Income taxes paid		(112	)	(92	)	(277	)	(81	)
	Dividends from associates and joint ventures		46		-		48		2
	Net changes in non-cash working capital		(265	)	(344	)	(675	)	(836	)
Cash (used in) provided by operating activities			(233	)	(226	)	205		570
Investing
	Business acquisitions, net of cash acquired		(141	)	(1	)	(316	)	(85	)
	Capital expenditures		(147	)	(170	)	(551	)	(910	)
	Capitalized borrowing costs		(6	)	(14	)	(18	)	(37	)
	Purchase of investments		(20	)	(25	)	(61	)	(110	)
	Proceeds from sale of investments		14		20		78		65
	Proceeds from sale of property, plant and equipment		4		23		14		77
	Other		(10	)	(4	)	(18	)	7
	Net changes in non-cash working capital		3		(97	)	(5	)	(189	)
Cash used in investing activities			(303	)	(268	)	(877	)	(1,182	)
Financing
	Short-term debt		682		1,156		904		418
	Long-term debt issued		-		-		-		1,000
	Transaction costs on long-term debt		-		-		-		(14	)
	Repayment of long-term debt		(10	)	(2	)	(16	)	(17	)
	Dividends paid		(121	)	(122	)	(362	)	(345	)
	Shares issued		-		-		-		1
	Shares repurchased		-		(459	)	-		(559	)
Cash provided by financing activities			551		573		526		484
Effect of exchange rate changes on cash and cash equivalents			(11	)	27		(58	)	33
Increase (decrease) in cash and cash equivalents			4		106		(204	)	(95	)
Cash and cash equivalents - beginning of period			307		647		515		848
Cash and cash equivalents - end of period			311		753		311		753
See accompanying notes.

AGRIUM INC.

Consolidated Statements of Shareholders' Equity

(Unaudited)

									Other comprehensive income (loss)
(millions of U.S. dollars, except per share data)			Millions of common shares		Share capital		Retained earnings		Cash flow hedges		Comprehensive loss of associates and joint ventures		Foreign currency translation		Total		Equity holders of Agrium		Non- controlling interest		Total equity
December 31, 2014			144		1,821		5,502		(27	)	(11	)	(605	)	(643	)	6,680		7		6,687
	Net earnings		-		-		787		-		-		-		-		787		1		788
	Other comprehensive income (loss), net of tax
		Post-employment benefits	-		-		1		-		-		-		-		1		-		1
		Other	-		-		-		(22	)	(7	)	(533	)	(562	)	(562	)	2		(560	)
	Comprehensive income (loss), net of tax		-		-		788		(22	)	(7	)	(533	)	(562	)	226		3		229
	Dividends ($2.53 per share)		-		-		(357	)	-		-		-		-		(357	)	-		(357	)
	Non-controlling interest transactions		-		-		-		-		-		-		-		-		(6	)	(6	)
	Shares repurchased		(6	)	(70	)	(489	)	-		-		-		-		(559	)	-		(559	)
	Share-based payment transactions		-		5		-		-		-		-		-		5		-		5
	Reclassification of cash flow hedges, net of tax		-		-		-		7		-		-		7		7		-		7
September 30, 2015			138		1,756		5,444		(42	)	(18	)	(1,138	)	(1,198	)	6,002		4		6,006
December 31, 2015			138		1,757		5,533		(56	)	(17	)	(1,214	)	(1,287	)	6,003		4		6,007
	Net earnings		-		-		525		-		-		-		-		525		4		529
	Other comprehensive income (loss), net of tax
		Post-employment benefits	-		-		(18	)	-		-		-		-		(18	)	-		(18	)
		Other	-		-		-		(8	)	2		153		147		147		-		147
	Comprehensive income (loss), net of tax		-		-		507		(8	)	2		153		147		654		4		658
	Dividends ($2.625 per share)		-		-		(363	)	-		-		-		-		(363	)	-		(363	)
	Non-controlling interest transactions		-		-		-		-		-		-		-		-		(2	)	(2	)
	Share-based payment transactions		-		7		-		-		-		-		-		7		-		7
	Reclassification of cash flow hedges, net of tax		-		-		-		22		-		-		22		22		-		22
September 30, 2016			138		1,764		5,677		(42	)	(15	)	(1,061	)	(1,118	)	6,323		6		6,329
See accompanying notes.

AGRIUM INC.
Summarized Notes to the Consolidated Financial Statements
For the three and nine months ended September 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 September 30,
			2016								2015
			Retail		Wholesale		Other(a)		Total		Retail		Wholesale		Other(a)		Total
Sales		- external	1,849		396		-		2,245		2,006		518		-		2,524
		- inter-segment	8		122		(130	)	-		5		155		(160	)	-
Total sales			1,857		518		(130	)	2,245		2,011		673		(160	)	2,524
Cost of product sold			1,375		434		(132	)	1,677		1,517		455		(144	)	1,828
Gross profit			482		84		2		568		494		218		(16	)	696
Gross profit (%)			26		16				25		25		32				28
Expenses
	Selling		443		7		(4	)	446		437		9		(5	)	441
	General and administrative		26		7		27		60		25		11		25		61
	Share-based payments		-		-		5		5		-		-		(15	)	(15	)
	Loss (earnings) from associates and joint ventures		2		(5	)	-		(3	)	1		9		-		10
	Other (income) expenses		(19	)	14		52		47		(33	)	15		26		8
Earnings (loss) before finance costs and income taxes			30		61		(78	)	13		64		174		(47	)	191
	Finance costs		-		-		66		66		-		-		55		55
Earnings (loss) before income taxes			30		61		(144	)	(53	)	64		174		(102	)	136
	Depreciation and amortization		71		57		4		132		65		47		3		115
	Finance costs		-		-		66		66		-		-		55		55
EBITDA(b)			101		118		(74	)	145		129		221		(44	)	306

(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			Nine months ended September 30,
			2016								2015
			Retail		Wholesale		Other(a)		Total		Retail		Wholesale		Other(a)		Total
Sales		- external	9,907		1,478		-		11,385		10,410		1,978		-		12,388
		- inter-segment	31		571		(602	)	-		24		736		(760	)	-
Total sales			9,938		2,049		(602	)	11,385		10,434		2,714		(760	)	12,388
Cost of product sold			7,775		1,611		(648	)	8,738		8,305		1,853		(758	)	9,400
Gross profit			2,163		438		46		2,647		2,129		861		(2	)	2,988
Gross profit (%)			22		21				23		20		32				24
Expenses
	Selling		1,423		23		(12	)	1,434		1,440		29		(13	)	1,456
	General and administrative		76		23		78		177		83		27		84		194
	Share-based payments		-		-		22		22		-		-		36		36
	(Earnings) loss from associates and joint ventures		(5	)	(27	)	1		(31	)	(3	)	12		-		9
	Other (income) expenses		(14	)	59		64		109		(37	)	7		31		1
Earnings (loss) before finance costs and income taxes			683		360		(107	)	936		646		786		(140	)	1,292
	Finance costs		-		-		206		206		-		-		179		179
Earnings (loss) before income taxes			683		360		(313	)	730		646		786		(319	)	1,113
	Depreciation and amortization		206		175		10		391		188		146		11		345
	Finance costs		-		-		206		206		-		-		179		179
EBITDA			889		535		(97	)	1,327		834		932		(129	)	1,637

(a)	Includes inter-segment eliminations.

Segment information - Retail			Three months ended September 30,
			2016						2015
			North						North
			America		International		Retail(a)		America		International		Retail
Sales		- external	1,398		451		1,849		1,582		424		2,006
		- inter-segment	8		-		8		5		-		5
Total sales			1,406		451		1,857		1,587		424		2,011
Cost of product sold			1,047		328		1,375		1,184		333		1,517
Gross profit			359		123		482		403		91		494
Expenses
	Selling		358		85		443		362		75		437
	General and administrative		19		7		26		17		8		25
	Loss from associates and joint ventures		2		-		2		1		-		1
	Other income		(14	)	(5	)	(19	)	(30	)	(3	)	(33	)
(Loss) earnings before income taxes			(6	)	36		30		53		11		64
	Depreciation and amortization		65		6		71		59		6		65
EBITDA			59		42		101		112		17		129

(a)	Included within the Retail business unit is a separate Financial Services operating segment with total sales of $5-million and EBITDA of $5-million.

Segment information - Retail			Nine months ended September 30,
			2016						2015
			North						North
			America		International		Retail(a)		America		International		Retail
Sales		- external	8,233		1,674		9,907		8,760		1,650		10,410
		- inter-segment	31		-		31		24		-		24
Total sales			8,264		1,674		9,938		8,784		1,650		10,434
Cost of product sold			6,446		1,329		7,775		6,973		1,332		8,305
Gross profit			1,818		345		2,163		1,811		318		2,129
Expenses
	Selling		1,179		244		1,423		1,196		244		1,440
	General and administrative		54		22		76		57		26		83
	Earnings from associates and joint ventures		(4	)	(1	)	(5	)	(2	)	(1	)	(3	)
	Other expenses (income)		8		(22	)	(14	)	(18	)	(19	)	(37	)
Earnings before income taxes			581		102		683		578		68		646
	Depreciation and amortization		189		17		206		168		20		188
EBITDA			770		119		889		746		88		834

(a)	Included within the Retail business unit is a separate Financial Services operating segment with total sales of $9-million and EBITDA of $9-million.

Segment information - Wholesale			Three months ended September 30,
			2016										2015
			Nitrogen		Potash		Phosphate		Wholesale Other(a)		Wholesale		Nitrogen		Potash		Phosphate		Wholesale Other(a)		Wholesale
Sales		- external	173		73		84		66		396		226		90		116		86		518
		- inter-segment	42		15		49		16		122		69		17		53		16		155
Total sales			215		88		133		82		518		295		107		169		102		673
Cost of product sold			156		87		122		69		434		165		65		138		87		455
Gross profit			59		1		11		13		84		130		42		31		15		218
Expenses
	Selling		3		1		-		3		7		4		1		1		3		9
	General and administrative		2		2		-		3		7		5		2		1		3		11
	(Earnings) loss from associates and joint ventures		-		-		-		(5	)	(5	)	-		-		-		9		9
	Other expenses (income)		8		4		4		(2	)	14		6		7		3		(1	)	15
Earnings (loss) before income taxes			46		(6	)	7		14		61		115		32		26		1		174
	Depreciation and amortization		16		22		17		2		57		16		16		13		2		47
EBITDA			62		16		24		16		118		131		48		39		3		221

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

Segment information - Wholesale			Nine months ended September 30,
			2016										2015
			Nitrogen		Potash		Phosphate		Wholesale Other(a)		Wholesale		Nitrogen		Potash		Phosphate		Wholesale Other(a)		Wholesale
Sales		- external	642		206		274		356		1,478		859		227		344		548		1,978
		- inter-segment	217		108		149		97		571		304		113		198		121		736
Total sales			859		314		423		453		2,049		1,163		340		542		669		2,714
Cost of product sold			557		283		387		384		1,611		620		223		437		573		1,853
Gross profit			302		31		36		69		438		543		117		105		96		861
Expenses
	Selling		10		5		2		6		23		12		4		3		10		29
	General and administrative		9		5		2		7		23		10		5		4		8		27
	(Earnings) loss from associates and joint ventures		-		-		-		(27	)	(27	)	-		-		-		12		12
	Other expenses (income)		30		24		7		(2	)	59		12		18		16		(39	)	7
Earnings (loss) before income taxes			253		(3	)	25		85		360		509		90		82		105		786
	Depreciation and amortization		52		73		40		10		175		54		43		37		12		146
EBITDA			305		70		65		95		535		563		133		119		117		932

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

Gross profit by product line		Three months ended September 30,												Nine months ended September 30,
		2016						2015						2016						2015
		Sales		Cost of product sold		Gross profit		Sales		Cost of product sold		Gross profit		Sales		Cost of product sold		Gross profit		Sales		Cost of product sold		Gross profit
Retail
	Crop nutrients	502		384		118		582		469		113		3,531		2,846		685		4,101		3,408		693
	Crop protection products	983		757		226		1,040		806		234		4,064		3,246		818		4,002		3,203		799
	Seed	59		37		22		60		34		26		1,361		1,107		254		1,350		1,120		230
	Merchandise	175		146		29		166		141		25		454		378		76		482		410		72
	Services and other (a)	138		51		87		163		67		96		528		198		330		499		164		335
		1,857		1,375		482		2,011		1,517		494		9,938		7,775		2,163		10,434		8,305		2,129
Wholesale
	Nitrogen	215		156		59		295		165		130		859		557		302		1,163		620		543
	Potash	88		87		1		107		65		42		314		283		31		340		223		117
	Phosphate	133		122		11		169		138		31		423		387		36		542		437		105
	Product purchased for resale	29		29		-		49		47		2		178		174		4		345		335		10
	Ammonium sulfate, ESN and other	53		40		13		53		40		13		275		210		65		324		238		86
		518		434		84		673		455		218		2,049		1,611		438		2,714		1,853		861
Other inter-segment eliminations		(130	)	(132	)	2		(160	)	(144	)	(16	)	(602	)	(648	)	46		(760	)	(758	)	(2	)
Total		2,245		1,677		568		2,524		1,828		696		11,385		8,738		2,647		12,388		9,400		2,988
Wholesale share of joint ventures
	Nitrogen	66		53		13		57		58		(1	)	131		111		20		123		119		4
	Product purchased for resale	-		-		-		-		-		-		-		-		-		38		37		1
		66		53		13		57		58		(1	)	131		111		20		161		156		5
Total Wholesale including proportionate share in joint ventures		584		487		97		730		513		217		2,180		1,722		458		2,875		2,009		866

(a)	Includes financial services products.

Selected volumes and per tonne information				Three months ended September 30,
				2016								2015
				Sales tonnes (000's)		Selling price ($/tonne)		Cost of product sold ($/tonne)		Margin ($/tonne)		Sales tonnes (000's)		Selling price ($/tonne)		Cost of product sold ($/tonne)		Margin ($/tonne)
Retail
	Crop nutrients
		North America		757		458		332		126		777		557		429		128
		International		406		384		327		57		342		437		395		42
	Total crop nutrients			1,163		432		331		101		1,119		520		418		102
Wholesale
	Nitrogen
		North America
			Ammonia	207		378						219		476
			Urea	359		269						378		380
			Other	173		234						163		289
	Total nitrogen			739		291		212		79		760		388		217		171
	Potash
		North America		198		223						147		341
		International		298		148						237		241
	Total potash			496		178		175		3		384		279		171		108
	Phosphate			278		478		439		39		269		629		514		115
	Product purchased for resale			107		274		268		6		111		444		424		20
	Ammonium sulfate			71		242		120		122		62		296		134		162
	ESN and other			101								81
Total Wholesale				1,792		289		242		47		1,667		404		273		131
Wholesale share of joint ventures
	Nitrogen			231		286		231		55		142		401		413		(12	)
	Product purchased for resale			-		-		-		-		-		-		-		-
				231		286		231		55		142		401		413		(12	)
Total Wholesale including proportionate share in joint ventures				2,023		289		241		48		1,809		404		284		120

Selected volumes and per tonne information				Nine months ended September 30,
				2016								2015
				Sales tonnes (000's)		Selling price ($/tonne)		Cost of product sold ($/tonne)		Margin ($/tonne)		Sales tonnes (000's)		Selling price ($/tonne)		Cost of product sold ($/tonne)		Margin ($/tonne)
Retail
	Crop nutrients
		North America		6,410		459		360		99		6,356		542		441		101
		International		1,561		378		345		33		1,516		432		399		33
	Total crop nutrients			7,971		443		357		86		7,872		521		433		88
Wholesale
	Nitrogen
		North America
			Ammonia	831		414						835		544
			Urea	1,181		302						1,197		407
			Other	636		250						712		310
	Total nitrogen			2,648		325		211		114		2,744		424		226		198
	Potash
		North America		901		218						630		369
		International		748		157						448		240
	Total potash			1,649		191		172		19		1,078		316		208		108
	Phosphate			803		527		482		45		841		645		520		125
	Product purchased for resale			596		299		292		7		941		366		356		10
	Ammonium sulfate			242		279		119		160		240		345		146		199
	ESN and other			516								501
Total Wholesale				6,454		318		250		68		6,345		428		292		136
Wholesale share of joint ventures
	Nitrogen			447		293		249		44		308		400		388		12
	Product purchased for resale			-		-		-		-		117		321		309		12
				447		293		249		44		425		378		366		12
Total Wholesale including proportionate share in joint ventures				6,901		316		250		66		6,770		425		297		128

3. Risk Management

Commodity price risk
Natural gas derivative financial instruments outstanding (notional amounts in millions of MMBtu)
		September 30,						December 31,
		2016						2015
		Notional		Average contract price(a)		Fair value of assets (liabilities)		Notional		Average contract price(a)		Fair value of assets (liabilities)
Designated as hedges
	AECO swaps	54		2.96		(44	)	74		2.78		(56	)
						(44	)					(56	)

(a)	U.S. dollars per MMBtu.

	Fair value of assets (liabilities)
Maturities of natural gas derivative contracts	2016		2017		2018
Designated as hedges	(5	)	(20	)	(19	)

Impact of change in fair value of natural gas derivative financial instruments	September 30,			December 31,
	2016			2015
A $10-million impact to other comprehensive income requires movement in gas prices per MMBtu	0.25			0.28

Use of derivatives to hedge exposure to natural gas market price risk
Term (gas year - 12 months ending October 31)	2016		2017		2018		2019
Maximum allowable (% of forecast gas requirements)	75		75		75		25		(a)
Forecast average monthly natural gas consumption (millions of MMBtu)	9		9		9		9
Gas requirements hedged using derivatives designated as hedges (%)	29		24		20		-

(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)
			September 30,								December 31,
			2016								2015
Sell/Buy			Notional		Maturities		Average contract price(a)		Fair value of assets (liabilities)		Notional		Maturities		Average contract price(a)		Fair value of assets (liabilities)
	Forwards
		USD/CAD	47		2016		1.32		-		190		2016		1.38		(1	)
		CAD/USD	2,062		2016		1.31		(1	)	1,805		2016		1.35		45
		USD/AUD	52		2016 - 2017		1.40		4		73		2016		1.42		2
		AUD/USD	74		2016 - 2017		1.38		(4	)	143		2016		1.43		(3	)
	Options
		USD/CAD - buy USD puts	28		2016		1.30		1		-		-		-		-
		USD/CAD - sell USD calls	48		2016		1.40		-		-		-		-		-
		USD/AUD - buy USD puts	-		-		-		-		59		2016		1.38		(1	)
									-								42

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

			September 30,							December 31,
			2016							2015
			Fair value							Fair value
			Level 1		Level 2		Carrying value			Level 1		Level 2		Carrying value
Financial instruments measured at fair value on a recurring basis
	Cash and cash equivalents		-		311		311			-		515		515
	Accounts receivable - derivatives		-		13		13			-		48		48
	Other current financial assets - marketable securities		25		104		129			20		122		142
	Accounts payable - derivatives		-		32		32			-		29		29
	Other financial liabilities - derivatives		-		25		25			-		33		33
Financial instruments measured at amortized cost
	Current portion of long-term debt
		Debentures	-		102		100			-		-		-
		Fixed and floating rate debt	-		10		10			-		8		8
	Long-term debt
		Debentures	-		4,893		4,371			-		4,464		4,469
		Fixed and floating rate debt	-		29		29			-		44		44

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

4. Expenses

	Three months ended				Nine months ended
Other expenses	September 30,				September 30,
	2016		2015		2016		2015
Loss on foreign exchange and related derivatives	2		13		10		13
Interest income	(20	)	(19	)	(49	)	(52	)
Gain on sale of assets	-		-		-		(38	)
Environmental remediation and asset retirement obligations	4		6		9		15
Bad debt expense (recovery)	3		(4	)	32		28
Potash profit and capital tax	2		3		10		13
Merger and related costs	17		6		17		17
Litigation settlements and related fees	18		3		18		4
Other	21		-		62		1
	47		8		109		1

5. Debt

						September 30,			December 31,
						2016			2015
		Maturity		Rate (%)(a)
Short-term debt
	Commercial paper	2016		0.94		1,609			632
	Credit facilities			7.02		131			203
						1,740			835

(a)	Weighted average rates at September 30, 2016.

6. Business Acquisitions

In September 2016, our Retail business unit acquired 16 farm centers located in the provinces of Alberta and Saskatchewan from Andrukow Group Solutions Inc. and 18 farm centers located across the northern U.S. Corn-Belt region from Cargill AgHorizons (U.S.) for preliminary purchase consideration of $165-million, subject to working capital adjustments. Benefits of the acquisitions include expansion of geographical coverage for the sale of crop inputs in Canada and the U.S., acquisition of existing customer base and workforce, the value of synergies between Agrium and the acquired businesses and cost savings opportunities.

We have engaged an independent valuation firm to assist in determining the fair value of assets acquired, liabilities assumed, including contingent liabilities and provisions, and related deferred income tax impacts. The valuations are in progress and are not complete due to the timing of the transactions' closing dates.

Proposed Merger with Potash Corporation of Saskatchewan Inc. ("PotashCorp")

Agrium and PotashCorp entered into an agreement dated September 11, 2016 (the "Agreement"), under which the companies will combine in a merger of equals into a newly incorporated parent entity ("New Parent") to be formed to manage and hold the combined businesses of both Agrium and PotashCorp. The Agreement will be implemented by a proposed plan of arrangement (the "Arrangement"). Under the Arrangement, Agrium shareholders will receive 2.23 New Parent shares for each Agrium share held and PotashCorp shareholders will receive 0.40 of a New Parent share for each PotashCorp share held. Following the completion of the Agreement, Agrium and PotashCorp will become wholly-owned subsidiaries of New Parent and New Parent will continue the operations of Agrium and PotashCorp on a combined basis. Each of the share-based payment awards for each of Agrium and PotashCorp, whether vested or unvested, that are outstanding immediately prior to the completion of the Arrangement will convert into a New Parent award.

The Arrangement is anticipated to be completed in mid-2017, subject to customary closing conditions including receipt of regulatory and court approvals and approval by Agrium securityholders and PotashCorp shareholders. Each of Agrium and PotashCorp have scheduled a special meeting of their securityholders and shareholders on November 3, 2016 to consider, among other things, a resolution to approve the Arrangement.

The estimated costs to be incurred by Agrium and PotashCorp with respect to the Arrangement and related matters are expected to aggregate approximately $140-million.

The Agreement contains provisions that restrict Agrium's and PotashCorp's ability to pursue alternatives to the Arrangement and, in specified circumstances, Agrium or PotashCorp could be required to pay the other party a non-completion fee of $485-million plus $50-million as reimbursement for related expenses.

Additional information and the full text of the Agreement and the Arrangement are included in Agrium and PotashCorp's joint proxy circular filed on SEDAR on October 6, 2016.