checkAd

     751  0 Kommentare Agrium Reports Third Quarter Results

    CALGARY, AB--(Marketwired - November 07, 2017) -

    ALL AMOUNTS ARE STATED IN U.S.$

    Agrium Inc. (TSX: AGU) (NYSE: AGU) announced today its 2017 third quarter results, with a net loss from continuing operations of $69-million ($0.52 diluted loss per share) compared to a net loss from continuing operations of $38-million ($0.28 diluted loss per share) in the third quarter of 2016. The third quarter results were driven by lower overall sales volumes and higher cost of product sold related to several scheduled maintenance turnarounds and higher share-based payments due to a year-to-date total shareholder return of 10 percent at September 30th.

    Highlights:

    • 2017 third quarter loss from continuing operations, adjusted for items not included in guidance, was $27-million or $0.23 diluted loss per share (see page 2 for adjusted net earnings (loss) and guidance relevant earnings (loss) reconciliations).
    • Wholesale conducted a number of scheduled maintenance turnarounds this quarter, some of which took longer than expected, but operating rates are now back at normal levels.
    • The Retail business unit reported a 9 percent increase in EBITDA1 this quarter, despite the impact of severe dry weather in Australia and Canada. U.S. Retail earnings were up 22 percent as contributions from acquisitions and stronger proprietary sales more than offset the impact of severe hurricanes in the southern U.S.
    • Retail made additional acquisitions in the third quarter with Southern States Cooperative in Georgia and Florida (20 locations). Year-to-date, Retail has purchased 38 locations with estimated annual revenues of approximately $250-million.
    • Agrium has updated our 2017 annual guidance to a range of $4.65 to $4.80 diluted earnings per share from continuing operations, primarily reflecting lower volumes resulting from facility downtime (see page 4 for guidance assumptions and further details).
    • Agrium recently completed the sale of our Conda phosphate and North Bend nitric acid facilities and the merger recently received regulatory approval in China. The sale of the Agrium assets are being reviewed by the U.S. Federal Trade Commission and is the only remaining approval required on the merger. The parties still expect the close of the merger by the end of the fourth quarter of 2017.
    • A loss of $182-million, net of tax was recorded in discontinued operations associated with the sale of Conda.

    "Our results this quarter were impacted by a particularly intense summer maintenance schedule, extreme dry weather in Canada and Australia and the two hurricanes in the southern U.S. Looking at the fall season and into 2018, we see solid grower demand for fertilizer and other crop inputs, and expect fertilizer markets to demonstrate continued strength," commented Chuck Magro, Agrium's President and CEO. "The sale of Conda and North Bend and China's recent regulatory approval are significant steps toward completing the merger with PotashCorp by year end and we are excited to move forward as Nutrien in 2018," added Mr. Magro.

    1 Net earnings (loss) before finance costs, income taxes, depreciation and amortization, and net earnings (loss) from discontinued operations.

     
    ADJUSTED NET EARNINGS (LOSS) AND GUIDANCE RELEVANT EARNINGS (LOSS) RECONCILIATIONS
      Three months ended
    September 30, 2017
      Nine months ended
    September 30, 2017
     
    (millions of U.S. dollars, except per share amounts) Expense   Net earnings (loss)
    from continuing
    operations
    impact
    (post-tax)
      Per share (a)   Expense   Net earnings (loss)
    from continuing
    operations
    impact
    (post-tax)
      Per share (a)
            (69)   (0.52)       475   3.40
    Adjustments:                        
      Share-based payments   40   29   0.21   40   29   0.21
      Foreign exchange loss (gain) net of non-qualifying derivatives   7   5   0.03   11   8   0.06
      Merger and related costs   11   8   0.05   42   30   0.22
      Impact of Egyptian pound devaluation on investee earnings   -   -   -   (16)   (11)   (0.08)
    Adjusted net earnings (loss) (b)       (27)   (0.23)       531   3.81
      Gain on sale of assets   -   -   -   (7)   (5)   (0.04)
    Guidance relevant earnings (loss) (b)       (27)   (0.23)       526   3.77
    (a)  Diluted per share information attributable to equity holders of Agrium.
    (b)  Forecasted annual tax rate of 28.5 percent was used for the adjusted net earnings (loss), guidance relevant earnings (loss) and per share calculations. These are non-IFRS measures which represent net earnings (loss) adjusted for certain income (expenses) that are considered to be non-operational in nature. We believe these measures provide meaningful comparison to 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. Our guidance is forward-looking information. We present guidance relevant earnings (loss) per share to provide an update to this previously disclosed forward-looking information. 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.
     

    MARKET OUTLOOK

    Agriculture and Crop Input Fundamentals

    • Mild temperatures and timely precipitation in key areas of the U.S. Corn Belt stabilized and improved U.S. corn and soybean crops, leading to increased yield forecasts and a seasonal decline in prices. The United States Department of Agriculture ("USDA") projects that national average U.S. corn yields will be just under 172 bushels per acre, which would be down from the record yields in 2016, but the second highest in history. Grower economics are similar to last year.
    • We expect a normal fall application season in North America, even though corn harvest is behind average levels for this time of year. There has been relatively widespread rain across dry areas of the U.S. Corn Belt over the past month, which is expected to support an average to above-average fall application season.
    • A key region to monitor in the months to come is the dryness in parts of Brazil which is delaying soybean planting. Drought has also been a problem in Australia, where the USDA projects wheat production will decline by 36 percent in 2017/18.

    Nitrogen Outlook

    • Nitrogen prices have rallied in recent months, with benchmark urea prices increasing by more than 50 percent since July. This has been due largely to weak Chinese urea exports, which in combination with robust Indian import demand has significantly tightened the global supply and demand balance. Chinese urea exports were down 53 percent or close to four million tonnes year-over-year through the end of September. Chinese production rates remain at low levels, despite higher global urea prices, partly due to the substantial increase in coal prices.
    • Indian urea imports have been strong and the prospects for the remainder of 2017 are positive as there has been a significant drawdown in Indian urea inventories in 2017. Looking ahead to 2018, there are some risks to Indian demand, including the Direct Benefit Transfer program, which will provide the urea subsidy to the grower at the point of sale as opposed to being provided to the upstream distributor. In addition, the Indian government has indicated that the allowable urea bag size will be reduced from 50 kilograms to 45 kilograms, which may negatively impact urea application rates.
    • The U.S. urea trade balance turned positive from June to August 2017, as offshore urea exports exceeded offshore imports by 5 percent during the slower seasonal demand period. However, a seasonal urea deficit in the U.S. is expected in late 2017 and/or early 2018 which should lend support to prices. Taking into account all these factors we expect the nitrogen market to remain relatively tight through into the spring of 2018.

    Potash Outlook

    • Global potash shipments have shown continued strength, which has led most global benchmarks to increase. Trade into key markets has remained at high levels as imports on a year-to-date basis are up 12 percent in Brazil, 36 percent in India and 28 percent in China over the same period last year.
    • Producers have increased production but have remained comfortably sold forward, which we expect to lead to relatively low producer potash inventories at the end of 2017. We expect there to be limited supplies available from new capacity for the remainder of 2017 and into the first half of 2018 and anticipate an annual average growth in potash demand of approximately 3 percent in 2018.
    • U.S. offshore imports of potash are also on a record pace, which is indicative of the strong demand in the market. While fall applications are always dependent on weather conditions and harvest pace, current prices are still affordable and are expected to support strong demand.

    Phosphate Outlook

    • Phosphate export prices have strengthened due to tightened export availability from China and the impacts of Hurricane Irma on Florida production and inventories.
    • Finished phosphate import demand has been mixed as demand continues to be strong in Pakistan and is up year-over-year in Brazil, but Indian imports have continued to be lower than expected, which is expected to tighten domestic inventories and support imports in 2018 assuming import economics improve.
    • Key raw material costs have increased significantly in recent months as ammonia prices have increased between 40 and more than 70 percent, while sulfur prices have increased between 40 and more than 120 percent.

    2017 ANNUAL GUIDANCE

    Based on our assumptions set out under the heading "Market Outlook", Agrium expects to achieve annual diluted earnings per share from continuing operations of $4.65 to $4.80 in 2017 compared to our previous estimate of $4.75 to $5.25 per share. We have reduced our annual guidance range to reflect the lost production volumes in the third quarter and the impact of challenging weather conditions on our Retail operations, particularly those areas impacted by hurricanes. We have also narrowed the range width encompassing approximately $30-million of EBITDA variability.

    We have updated our Retail EBITDA range between $1.160-billion to $1.190-billion compared to our previous guidance of $1.150-billion to $1.20-billion, while our estimate for Retail crop nutrient sales volumes has been reduced to between 9.9 million and 10.2 million tonnes in 2017.

    Based on our expected utilization rate for our nitrogen assets, we are updating our nitrogen production range to between 3.3 and 3.4 million tonnes. Our earnings per share guidance assumes NYMEX gas prices will average between $2.95 and $3.15 per MMBtu for 2017.

    We have also revised our expected potash production range for 2017 to between 2.4 and 2.5 million tonnes.

    Total capital expenditures in 2017 are expected to be in the range of $650-million to $700-million, of which approximately $425-million to $475-million is expected to be sustaining capital expenditures.

    Agrium's annual effective tax rate for 2017 on continuing operations is expected to range between 27 and 29 percent.

    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. Except as described under the heading "Market Outlook", volumetric and earnings estimates assume normal seasonal growing and harvest patterns in the geographies where Agrium operates.

     
    2017 ANNUAL GUIDANCE RANGE AND ASSUMPTIONS
                         Annual
      Low   High
    Diluted EPS from continuing operations (in U.S. dollars) $4.65   $4.80
    Guidance assumptions:      
    Wholesale:      
      Production tonnes:      
        Nitrogen (millions) 3.3   3.4
        Potash (millions) 2.4   2.5
    Retail:      
        EBITDA (millions of U.S. dollars) $1,160   $1,190
        Crop nutrient sales tonnes (millions) 9.9   10.2
    Other:      
        Tax rate 29%   27%
        Sustaining capital expenditures (millions of U.S. dollars) $425   $475
        Total capital expenditures (millions of U.S. dollars) $650   $700
             

    November 7, 2017

    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) as issued by the International Accounting Standards Board and is presented in accordance with International Accounting Standard 34 - Interim Financial Reporting. All comparisons of results for the third quarter of 2017 (three months ended September 30, 2017) and for the nine months ended September 30, 2017 are against results for the third quarter of 2016 (three months ended September 30, 2016) and nine months ended September 30, 2016. All dollar amounts refer to United States (U.S.) dollars except where otherwise stated. The financial measure net earnings (loss) before finance costs, income taxes, depreciation and amortization and net earnings (loss) from discontinued operations (EBITDA) 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 each such measure to its most directly comparable measure calculated in accordance with IFRS.

    The following interim MD&A is as of November 7, 2017 and should be read in conjunction with the Condensed Consolidated Interim Financial Statements for the three and nine months ended September 30, 2017 (the "Condensed Consolidated Financial Statements"), and the annual MD&A and consolidated financial statements for the year ended December 31, 2016 included in our 2016 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.

    2017 Third Quarter Operating Results

     
    CONSOLIDATED NET EARNINGS
     
    Financial Overview
                                     
    (millions of U.S. dollars, except per share amounts   Three months ended September 30,   Nine months ended September 30,
    and where noted)   2017   2016 (a)   Change   % Change   2017   2016 (a)   Change   % Change
    Sales   2,382   2,192   190   9   11,316   11,219   97   1
    Gross profit   557   568   (11)   (2)   2,642   2,630   12   -
    Expenses   578   553   25   5   1,748   1,704   44   3
    Net (loss) earnings before finance costs, income taxes and net earnings (loss) from discontinued operations   (21)   15   (36)   (240)   894   926   (32)   (3)
    Net (loss) earnings from continuing operations   (69)   (38)   (31)   82   475   515   (40)   (8)
    Net (loss) earnings from discontinued operations   (182)   (1)   (181)   18,100   (178)   14   (192)   (1,371)
    Net (loss) earnings   (251)   (39)   (212)   544   297   529   (232)   (44)
    Diluted (loss) earnings per share from continuing operations   (0.52)   (0.28)   (0.24)   86   3.40   3.70   (0.30)   (8)
    Diluted (loss) earnings per share from discontinued operations   (1.32)   (0.01)   (1.31)   13,100   (1.29)   0.10   (1.39)   (1,390)
    Diluted (loss) earnings per share   (1.84)   (0.29)   (1.55)   534   2.11   3.80   (1.69)   (44)
    Effective tax rate (%)   30.3   27.4   3   N/A   28.9   28.4   1   N/A
    (a)  Certain amounts have been restated as a result of discontinued operations.
             
    Sales and Gross Profit        
                             
        Three months ended September 30,   Nine months ended September 30,
    (millions of U.S. dollars)   2017   2016 (a)   Change   2017   2016 (a)   Change
    Sales                        
      Retail   2,067   1,857   210   10,014   9,938   76
      Wholesale   443   445   (2)   1,825   1,834   (9)
      Other   (128)   (110)   (18)   (523)   (553)   30
        2,382   2,192   190   11,316   11,219   97
                             
    Gross profit                        
      Retail   518   482   36   2,251   2,163   88
      Wholesale   46   84   (38)   384   421   (37)
      Other   (7)   2   (9)   7   46   (39)
        557   568   (11)   2,642   2,630   12
    (a)  Certain amounts have been restated as a result of discontinued operations.
     
    • Retail's sales and gross profit primarily increased in the third quarter and first nine months of 2017 compared to the same periods last year as a result of higher crop protection product sales and related application services and recent acquisitions.
    • Wholesale's sales for the third quarter and first nine months of 2017 were flat compared to same periods last year, while gross profits were lower. Realized selling prices for nitrogen decreased while potash selling prices increased consistent with benchmark prices. Cost of product sold was higher due to several scheduled maintenance turnarounds in our production facilities and higher natural gas input costs.

    Expenses

    • Selling expense as a percentage of sales was consistent for the third quarter and first nine months of 2017 compared to the same periods last year, while general and administrative expenses were flat.
    • Share-based payments expense was higher by $35-million in the third quarter and $18-million for the first nine months of 2017 due to increases in our share price.
    • Our earnings from associates and joint ventures were consistent for the third quarter and the first nine months of 2017. For the first nine months of 2017, we recognized a foreign exchange gain in Misr Fertilizers Production Company S.A.E. ("MOPCO") from the devaluation of the Egyptian pound in the first quarter of this year which was partially offset by a reversal of gas provision in Profertil S.A. ("Profertil") recorded in the prior year.
    • Other expenses decreased by $29-million for the third quarter and $35-million for the first nine months of 2017. This decrease is primarily due to lower legal settlements in 2017 and losses incurred in 2016 related to a termination of a distribution agreement and cancellation of a Canpotex terminal. This was partially offset by costs incurred related to our merger with Potash Corporation of Saskatchewan ("PotashCorp").

    For further breakdown on Other expenses, see table below:

                         
    Other expenses breakdown                    
        Three months ended   Nine months ended
        September 30,   September 30,
    (millions of U.S. dollars)   2017   2016 (a)   Change   2017   2016 (a)   Change
    Loss on foreign exchange and related derivatives  
    7
     
    2
     
    5
     
    11
     
    10
     
    1
    Interest income   (17)   (20)   3   (43)   (49)   6
    Environmental remediation andasset retirement obligations  
    2
     
    4
     
    (2)
     
    1
     
    9
     
    (8)
    Bad debt expense   8   3   5   37   32   5
    Potash profit and capital tax   3   2   1   9   10   (1)
    Merger and related costs   11   17   (6)   42   17   25
    Other   2   37   (35)   12   75   (63)
        16   45   (29)   69   104   (35)
    (a) Certain amounts have been restated as a result of discontinued operations.
     
    Depreciation and Amortiation
     
    Depreciation and amortization breakdown
        Three months ended September 30,
        2017           2016 (a)    
        Cost of
    product
    sold
     

    Selling
      General
    and
    administrative
     

    Total
      Cost of
    product
    sold
     

    Selling
      General
    and
    administrative
     

    Total
       
    (millions of U.S. dollars)  
    Retail   3   69   1   73   2   67   2   71
    Wholesale                                
      Nitrogen   16   -   1   17   16   -   -   16
      Potash   21   -   -   21   22   -   -   22
      Phosphate   3   -   -   3   4   -   -   4
      Wholesale Other (b)   3   -   -   3   2   -   -   2
        43   -   1   44   44   -   -   44
    Other   -   -   4   4   -   -   4   4
    Total   46   69   6   121   46   67   6   119
                                     
                                     
        Nine months ended September 30,
        2017           2016 (a)    
        Cost of
    product
    sold
     

    Selling
      General
    and
    administrative
     

    Total
      Cost of
    product
    sold
     

    Selling
      General
    and
    administrative
     

    Total
       
    (millions of U.S. dollars)  
    Retail   6   205   4   215   5   197   4   206
    Wholesale                                
      Nitrogen   58   -   1   59   52   -   -   52
      Potash   82   -   -   82   73   -   -   73
      Phosphate   12   -   -   12   11   -   -   11
      Wholesale Other (b)   10   -   1   11   9   -   1   10
        162   -   2   164   145   -   1   146
    Other   -   -   13   13   -   -   10   10
    Total   168   205   19   392   150   197   15   362
    (a)  Certain amounts have been restated as a result of discontinued operations.
    (b)  This includes ammonium sulfate, Environmentally Smart Nitrogen® (ESN) and other products.
     
    • Depreciation and amortization expense increased in the third quarter and first nine months of 2017 primarily due to the completion of our Borger nitrogen facility expansion. This was partially offset by lower sales and production volumes in the third quarter due to planned and unplanned outages at our facilities for which we calculate such expense on a units-of-production basis.

    Effective Tax Rate

    • The effective tax rates for the third quarter and first nine months of 2017 are higher than the tax rates compared to the similar periods in 2016. The increase in the effective tax rate for the quarter is primarily due to the recognition of a previously unrecognized tax benefit and the increase in the effective tax rate for the first nine months of 2017 is due to a decrease in certain U.S. manufacturing tax deductions.

    BUSINESS SEGMENT PERFORMANCE

                 
    Retail            
                 
                 
        Three months ended September 30,
    (millions of U.S. dollars, except where noted)   2017   2016   Change
    Sales   2,067   1,857   210
    Cost of product sold   1,549   1,375   174
    Gross profit   518   482   36
    EBIT   37   30   7
    EBITDA   110   101   9
    Selling and general and administrative expenses   489   469   20
    Selling and general and administrative expenses as a % of sales (%)   23.7   25.3   (1.6)
                 
    • Retail EBITDA increased by 9 percent compared to the same period last year, driven by higher sales volumes for crop protection products, nutrients and related application services; associated with organic growth and acquisitions. Total proprietary product sales as a percentage of total sales increased 1 percentage point compared to the same period last year.
    • Retail selling, general and administrative expenses were up slightly over last year due to acquisitions made in 2017 and in the prior year. Selling, general and administrative expenses as a percent of revenue were down year-over-year to 23.7 percent in the third quarter of 2017 compared to 25.3 percent for the same period last year.
    • Retail North American EBITDA increased 19 percent in the third quarter despite the impact from challenging weather conditions in the southern U.S. Year-to-date, the U.S. has seen a 5 percent increase in EBITDA and Canada a 3 percent increase. EBITDA for our International Retail operations decreased slightly this quarter compared to the same period last year, as Australia faced drought conditions which impacted crop protection sales in particular. South American results were also down slightly, primarily due to excessive moisture impacting nutrient applications.
             
    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)   2017   2016   Change   2017   2016   Change   2017   2016
    Crop nutrients   528   502   26   120   118   2   23   24
    Crop protection products   1,117   983   134   243   226   17   22   23
    Seed   59   59   -   21   22   (1)   36   37
    Merchandise   187   175   12   29   29   -   16   17
    Services and other   176   138   38   105   87   18   60   63
                                     

    Crop nutrients

    • Total crop nutrient sales increased by 5 percent compared to the prior year, due to higher sales volumes related largely to acquisitions. This was partially offset by marginally lower realized average sales prices for nutrients. Sales volumes were up 11 percent in North America this quarter due to the late application season in the U.S. and the acquisitions made over the past year.
    • Total nutrient gross profit increased by 2 percent due to higher sales volumes which were partially offset by lower global benchmark prices during the quarter.

    Crop protection products

    • Total crop protection product sales increased by 14 percent compared to the same period last year due to higher volumes sold as the later summer application season saw solid demand for herbicide and fungicide products. Total proprietary crop protection sales as a percentage of total crop protection sales increased 1 percentage point compared to the same period in 2016.
    • Gross profit was 8 percent higher than the prior period due to higher sales volumes of both brand name and proprietary products. Gross margin as a percentage of sales decreased by 1 percent due to a product shift related to decreased field activity as a result of the two major hurricanes, dry weather in parts of the Corn Belt which decreased demand for some higher margin products and a slightly more competitive market environment.

    Seed

    • Total seed sales were similar to the third quarter in 2016, while total gross profit was marginally lower. Seed gross profit as a percentage of sales declined to 36 percent this quarter from 37 percent same quarter last year. The marginal decline was attributed to increased replanting discounts and crop loss credits related to regional weather challenges.

    Merchandise

    • Merchandise sales increased 7 percent this period with strong demand in Australia. Gross profit as a percentage of sales declined 1 percent compared to the third quarter of 2016 due to differences in product mix.

    Services and other

    • Sales for services and other increased by 28 percent this quarter compared to last year due to higher livestock shipments in Australia and the later application season in the U.S. for both nutrients and crop protection products.
         
    Wholesale    
             
        Three months ended September 30,
    (millions of U.S. dollars, except where noted)   2017   2016 (a)   Change
    Sales   443   445   (2)
    Sales volumes (tonnes 000's)   1,614   1,657   (43)
    Cost of product sold   397   361   36
    Gross profit   46   84   (38)
    EBIT   33   63   (30)
    EBITDA   77   107   (30)
    Expenses   13   21   (8)
    (a)  Certain amounts have been restated as a result of discontinued operations.
     
    • Wholesale gross profit and EBITDA this quarter was lower than the same period last year due mainly to several major planned maintenance turnarounds and lower realized nitrogen prices. The scheduled outages along with a couple of minor unplanned production losses caused by both internal and external factors, resulted in lower production volumes and increased cost of product sold this quarter. Lower realized nitrogen prices reflected sales weakness in nitrogen fertilizer benchmarks during the second quarter and corresponding forward sales activity in the third quarter. This was partly offset by higher realized potash prices.
     
    Wholesale NPK product information
        Three months ended September 30,
        Nitrogen   Potash   Phosphate
        2017   2016   Change   2017   2016   Change   2017   2016 (a)   Change
    Gross profit (U.S. dollar millions)   28   59   (31)   10   1   9   (4)   11   (15)
    Sales volumes (tonnes 000's)   668   739   (71)   462   496   (34)   140   143   (3)
    Selling price ($/tonne)   270   291   (21)   216   178   38   436   418   18
    Cost of product sold ($/tonne)   228   212   16   193   175   18   465   343   122
    Gross margin ($/tonne)   42   79   (37)   23   3   20   (29)   75   (104)
    (a) Certain amounts have been restated as a result of discontinued operations.
     

    Nitrogen

    • Nitrogen gross profit was down 53 percent compared to the same period last year due to lower production volumes and higher cost of product sold per tonne. This was driven primarily by planned outages across several major production facilities and a number of unplanned outages caused by both internal and external factors.
    • Total sales volumes were down 10 percent due to lower product availability during the quarter. Ammonia sales volumes were 35 percent lower during the quarter due to reduced saleable product availability because of the Borger urea plant ramp-up, a shift in industrial sales timing, production turnaround activity and a later start to fall applications. Urea and other nitrogen product sales were in line with the prior year.
    • Realized selling prices per tonne were 7 percent lower compared to the same period last year due to lower global benchmark nitrogen prices through the late spring and early summer and the timing of forward sales activity.
    • Cost of product sold per tonne increased 8 percent due to turnarounds and lower production volumes, which spread fixed costs across fewer tonnes. Realized natural gas costs were also slightly higher than the same period in 2016.
       
    Natural gas prices: North American indices and North American Agrium prices
      Three months ended September 30,
    (U.S. dollars per MMBtu) 2017 2016
    Overall gas cost excluding realized derivative impact 1.74 2.05
    Realized derivative impact 0.72 0.28
    Overall gas cost 2.46 2.33
    Average NYMEX 2.97 2.78
    Average AECO 1.61 1.69
         

    Potash

    • Potash gross profit was higher than the prior year, due to higher selling prices, partially offset by a higher cost of product sold and lower sales volumes.
    • Sales volumes were 7 percent lower in the current period. International volumes were 29 percent lower than the third quarter of 2016 due to the timing of sales to Canpotex, while North American volumes increased 27 percent.
    • Average realized selling prices increased by 21 percent over the past year, with realized North American prices up 13 percent and International selling prices increasing 16 percent.
    • Our cost of product sold per tonne was 10 percent higher than the same period last year due to a stronger Canadian dollar and a higher percentage of domestic sales volumes, which include freight and distribution in the cost of product sold. In addition to the scheduled turnaround during the quarter, some temporary mechanical issues with the hoist resulted in lower production than planned.

    Phosphate

    • Phosphate gross profit was lower than the same period last year, due to the planned turnaround at the Redwater plant in the quarter and a stronger Canadian dollar, which caused higher cost of product sold. The 2016 costs also benefited from a favorable freight expense adjustment.
    • Realized selling prices were 4 percent higher than the prior period, however, this was more than offset by higher cost of product sold and 2 percent lower sales volumes this quarter.
    • Overall gross margin per tonne this quarter was negative, as the higher cost of product sold per tonne was only partially offset by higher realized selling prices.

    Wholesale Other

        
    Wholesale Other: gross profit breakdown
        Three months ended September 30,
    (millions of U.S. dollars)   2017   2016   Change
    Ammonium sulfate   9   9   -
    ESN   2   6   (4)
    Other   1   (2)   3
        12   13   (1)
                 
    • Gross profit from Wholesale Other was lower than the same period last year driven by reduced production and sales of ESN at Carseland.

    Expenses

    • Wholesale expenses were 38 percent lower in the third quarter compared to the prior year, primarily due to lower selling, general and administrative costs associated with cost saving initiatives, lower other expenses and an increase in earnings from equity investments.

    Other

    EBITDA for our Other non-operating business unit for the third quarter of 2017 was a net expense of $87-million, compared to a net expense of $74-million for the third quarter of 2016. The variance was primarily due to:

    • An increase of $9-million gross profit elimination as a result of a higher intersegment inventories held by Retail at the end of the third quarter.
    • An increase of $35-million in share-based payments expense primarily due to an increase in Agrium's share price.

    This was partially offset by:

    • A decrease of $18-million in litigation and related fees.
    • A decrease of $6-million in merger and related costs.

    FINANCIAL CONDITION

    The following are changes to working capital on our Consolidated Balance Sheets for the nine months ended September 30, 2017 compared to December 31, 2016.

                         
        September 30, 
    2017
      December 31,
    2016
      $ Change   % Change   Explanation of the change in the balance
    (millions of U.S. dollars, except where noted)  
    Current assets                    
      Cash and cash equivalents   246   412   (166)   (40%)   See discussion under the section "Liquidity and Capital Resources".
      Accounts receivable   3,375   2,208   1,167   53%   Seasonal sales activity for Retail resulted in higher Retail trade and vendor rebates receivable.
      Income taxes receivable   30   33   (3)   (9%)   -
      Inventories   2,657   3,230   (573)   (18%)   Inventory drawdown due to increased seasonal sales activity.
      Prepaid expenses and deposits   150   855   (705)   (82%)   Drawdown of prepaid inventory where Retail typically prepays for product at year end and takes possession of inventory throughout the year.
      Other current assets   122   123   (1)   (1%)   -
      Assets held for sale   126   -   126   100%   In September 2017, we reclassified certain assets of Conda phosphate operations as held for sale. See "Discontinued Operations" section for further details.
    Current liabilities                    
      Short-term debt   1,882   604   1,278   212%   Increased financing for working capital requirements.
      Accounts payable   3,257   4,662   (1,405)   (30%)   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   14   17   (3)   (18%)   -
      Current portion of long-term debt   11   110   (99)   (90%)   Decrease relates to $100-million 7.7 percent senior notes repaid in 2017.
      Current portion of other provisions   54   59   (5)   (8%)   -
    Working capital   1,488   1,409   79   6%    
                         

    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, 2017, we had 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)   2017   2016 (a)   Change
    Cash (used in) provided by operating activities   (265)   212   (477)
    Cash used in investing activities   (683)   (857)   174
    Cash provided by financing activities   799   526   273
    Effect of exchange rate changes on cash and cash equivalents   (7)   (58)   51
    Decrease in cash and cash equivalents from continuing operations   (156)   (177)   21
    Cash and cash equivalents used in discontinued operations   (10)   (27)   17
    (a) Certain amounts have been restated as a result of discontinued operations.
             
    Cash (used in) provided by operating activities  
      Lower cash provided by operating activities from net changes in non-cash working capital, primarily due to the timing of collections from customers as well as payments to our suppliers. This was partially offset by lower final tax payments and current tax payments made in comparison to the prior year.
    Cash used in investing activities  
      Lower cash used in investing activities due primarily to completion of our Borger expansion project and reduced business acquisition activity in our Retail business unit.
    Cash provided by financing activities  
      Higher cash provided by financing activities from increased commercial paper drawings to meet working capital needs partially offset by repayment of our senior notes in February 2017.
             
           
    Capital Spending and Expenditures (b)      
      Three months ended   Nine months ended
      September 30,   September 30,
    (millions of U.S. dollars) 2017 2016 (a)   2017 2016 (a)
    Retail          
      Sustaining 23 13   107 88
      Investing 19 10   61 29
      42 23   168 117
      Acquisitions (b) 110 141   184 316
      152 164   352 433
    Wholesale          
      Sustaining 96 51   167 186
      Investing 15 67   107 222
      111 118   274 408
    Other          
      Sustaining 1 1   3 3
      Investing 7 1   13 3
      8 2   16 6
    Total          
      Sustaining 120 65   277 277
      Investing 41 78   181 254
      161 143   458 531
      Acquisitions (b) 110 141   184 316
      271 284   642 847
    (a) Certain amounts have been restated as a result of discontinued operations.
    (b) This excludes capitalized borrowing costs and capital expenditures related to our discontinued operations.
    (c) This represents business acquisitions and includes acquired working capital; property, plant and equipment; intangibles; goodwill; and investments in associates and joint ventures.
     
    • Our total capital expenditures increased in the third quarter due to turnarounds and decreased in the first nine months of 2017 compared to the same period last year as we completed the construction of our Borger expansion project at the end of 2016. In 2017, pre-commissioning and commissioning costs were incurred related to this project.
    • We expect Agrium's capital expenditures for the remainder of 2017 to approximate $175-million to $225-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 $1.9-billion at September 30, 2017 is outlined in note 5 of our Summarized Notes to the Condensed Consolidated Financial Statements.
    • Our short-term debt increased by $1.3-billion during the first nine months of 2017, which in turn contributed to a decrease in our unutilized short-term financing capacity to $1.6-billion at September 30, 2017.

    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, 2017. Our ability to comply with these covenants has not changed since December 31, 2016.

    OUTSTANDING SHARE DATA

    Agrium had 138,164,264 outstanding shares at November 3, 2017. At November 3, 2017, 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 1,380,868.

     
    SELECTED QUARTERLY INFORMATION
                                     
    (millions of U.S. dollars,   2017   2017 (a)   2017 (a)   2016 (a)   2016 (a)   2016 (a)   2016 (a)   2015
    except per share amounts)   Q3   Q2   Q1   Q4   Q3   Q2   Q1   Q4
    Sales   2,382   6,271   2,663   2,238   2,192   6,361   2,666   2,407
    Gross profit   557   1,527   558   749   568   1,523   539   900
    Net earnings (loss) from
    continuing operations
                                   
      (69)   553   (9)   69   (38)   558   (5)   200
    Net earnings (loss) from                                
    discontinued operations   (182)   5   (1)   (2)   (1)   7   8   -
    Net earnings (loss)   (251)   558   (10)   67   (39)   565   3   200
    Earnings (loss) per share from continuing
    operations attributable to equity
    holders of Agrium:
                                   
                                   
                                   
      Basic   (0.52)   4.00   (0.07)   0.50   (0.28)   4.03   (0.04)   1.45
      Diluted   (0.52)   4.00   (0.07)   0.50   (0.28)   4.03   (0.04)   1.45
    Earnings (loss) per share from
    discontinued operations attributable
    to equity holders of Agrium:
                                   
                                   
                                   
      Basic   (1.32)   0.03   (0.01)   (0.01)   (0.01)   0.05   0.06   -
      Diluted   (1.32)   0.03   (0.01)   (0.01)   (0.01)   0.05   0.06   -
    Earnings (loss) per share attributable to
    equity holders of Agrium:
                                   
                                   
      Basic   (1.84)   4.03   (0.08)   0.49   (0.29)   4.08   0.02   1.45
      Diluted   (1.84)   4.03   (0.08)   0.49   (0.29)   4.08   0.02   1.45
    Dividends declared   122   121   120   121   120   122   121   121
    Dividends declared per share   0.875   0.875   0.875   0.875   0.875   0.875   0.875   0.875
    (a) Certain amounts have been restated as a result of discontinued operations. 
                     

    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.

    DISCONTINUED OPERATIONS

    On September 7, 2017, Agrium and PotashCorp provided an update on the regulatory approval process related to the proposed merger indicating that they are working to resolve final issues in superphosphoric acid and nitric acid. A potential remedy to outstanding issues is the disposition of our Conda phosphate operations (CPO) and North Bend nitrogen facilities. A sale of assets of CPO and North Bend assets by September 2018 is considered highly probable as management has committed to a sale and has begun to actively market the assets. In November 2017, we entered into an agreement with a third party to dispose of our CPO and North Bend assets, subject to the approval of the Federal Trade Commission.

    We have reclassified the results of operations of CPO as discontinued and recorded the assets held for sale at fair value less costs to sell, which resulted in a write-down of $295-million before taxes. We have restated our 2016 financial information to also reflect this change. For further information, refer to note 6 of our Consolidated Financial Statements.

    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.

         

    Non-IFRS financial measure

    Definition
    Why we use the measure and why it is useful to investors
    EBITDA Net earnings (loss) before finance costs, income taxes, depreciation and amortization, and net earnings (loss) from discontinued operations
    EBITDA is frequently used by investors and analysts for valuation purposes when multiplied by a factor to estimate the enterprise value of a company. EBITDA is also used in determining annual incentive compensation for certain management employees and in calculating certain of our debt covenants.
         
    Consolidated and business unit EBITDA   Three months ended September 30,
    (millions of U.S. dollars)   Retail   Wholesale   Other   Consolidated
    2017                
    Net loss               (251)
    Finance costs related to long-term debt               56
    Other finance costs               24
    Income taxes               (32)
    Net loss from discontinued operations               182
    EBIT   37   33   (91)   (21)
    Depreciation and amortization   73   44   4   121
    EBITDA   110   77   (87)   100
    2016 (a)                
    Net loss               (39)
    Finance costs related to long-term debt               51
    Other finance costs               15
    Income taxes               (13)
    Net loss from discontinued operations               1
    EBIT   30   63   (78)   15
    Depreciation and amortization   71   44   4   119
    EBITDA   101   107   (74)   134
                     
        Nine months ended September 30,
    (millions of U.S. dollars)   Retail   Wholesale   Other   Consolidated
    2017                
    Net earnings               297
    Finance costs related to long-term debt               155
    Other finance costs               71
    Income taxes               193
    Net loss from discontinued operations               178
    EBIT   716   341   (163)   894
    Depreciation and amortization   215   164   13   392
    EBITDA   931   505   (150)   1,286
    2016 (a)                
    Net earnings               529
    Finance costs related to long-term debt               153
    Other finance costs               53
    Income taxes               205
    Net earnings from discontinued operations               (14)
    EBIT   683   350   (107)   926
    Depreciation and amortization   206   146   10   362
    EBITDA   889   496   (97)   1,288
    (a) Certain amounts have been restated as a result of discontinued operations.
     

    CRITICAL ACCOUNTING ESTIMATES

    We prepare our Condensed 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 2016 annual MD&A, which is contained in our 2016 Annual Report. Since the date of our 2016 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 Condensed Consolidated Financial Statements for the nine months ended September 30, 2017 are the same as those applied in our audited annual financial statements in our 2016 Annual Report. We are currently assessing the impact of IFRS 15 and 16 and preparing for implementation. We expect that our financial statements will include expanded disclosures about revenues from contracts with customers while IFRS 16 will have a material impact on our assets and liabilities and reclassifications within our statement of operations. Refer to note 6 of our Condensed Consolidated Financial Statements for details.

    BUSINESS RISKS

    The information presented in the "Enterprise Risk Management" section on pages 52 - 56 in our 2016 annual MD&A and under the heading "Risk Factors" on pages 23 - 38 in our Annual Information Form for the year ended December 31, 2016 has not changed materially since December 31, 2016. For risks associated with our proposed merger with PotashCorp, see "Part I - The Arrangement Risk Factors Related to the Arrangement" in the joint information circular of Agrium and PotashCorp dated October 3, 2016.

    CONTROLS AND PROCEDURES

    There have been no changes in our internal control over financial reporting during the three months ended September 30, 2017 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 2016 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: 2017 updated annual guidance, including expectations regarding our diluted earnings per share and Retail EBITDA; capital spending expectations for 2017; expectations regarding performance of our business segments in 2017; expectations regarding completion of previously announced expansion projects (including timing and volumes of production associated therewith) and acquisitions and divestitures; our market outlook for 2017, 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 merger with PotashCorp, 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 2017 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 divestitures 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 approvals in respect of the proposed merger with PotashCorp and satisfaction of other closing conditions relating thereto. Also refer to the discussion under the heading "Key Assumptions and Risks in Respect of Forward-Looking Statements" in our 2016 annual MD&A and under the heading "Market Outlook" herein, 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 in Egypt; the risks that are inherent in the nature of the proposed merger with PotashCorp, including the failure to obtain required regulatory approvals and failure to satisfy all other closing conditions in accordance with the terms of the proposed merger with PotashCorp, in a timely manner 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, 2016 and under the headings "Enterprise Risk Management" and "Key Assumptions and Risks in respect of Forward-Looking Statements" in our 2016 annual MD&A. For risks associated with our proposed merger with PotashCorp, see "Part I - The Arrangement Risk Factors Related to the Arrangement" in the joint information circular of Agrium and PotashCorp dated October 3, 2016. Furthermore, the potential divestitures of the Conda phosphate operations and any potential financial gains or losses resulting from the completion of the sale may differ materially from those in the forward-looking statements.

    The purpose of our expected diluted earnings per share and Retail EBITDA 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 close to 11 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 approximately 1,500 facilities and over 3,300 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 2017 3rd Quarter Conference Call will be available in a listen-only mode beginning Wednesday, November 8, 2017 at 8:00 a.m. MT (10:00 a.m. ET). Please visit the following website: www.agrium.com.

     
    AGRIUM INC.
    Condensed Consolidated Interim Statements of Operations
    (Unaudited)
               
                       
        Three months ended   Nine months ended  
        September 30,   September 30,  
    (millions of U.S. dollars, unless otherwise stated) Notes 2017   2016 (a ) 2017   2016 (a )
               
    Sales   2,382   2,192   11,316   11,219  
    Cost of product sold   1,825   1,624   8,674   8,589  
    Gross profit   557   568   2,642   2,630  
    Expenses                  
      Selling   470   446   1,495   1,433  
      General and administrative   56   60   176   176  
      Share-based payments   40   5   40   22  
      Earnings from associates and joint ventures   (4 ) (3 ) (32 ) (31 )
      Other expenses 4 16   45   69   104  
    (Loss) earnings before finance costs and income taxes   (21 ) 15   894   926  
      Finance costs related to long-term debt   56   51   155   153  
      Other finance costs   24   15   71   53  
    (Loss) earnings before income taxes   (101 ) (51 ) 668   720  
      Income taxes   (32 ) (13 ) 193   205  
    Net (loss) earnings from continuing operations   (69 ) (38 ) 475   515  
    Net (loss) earnings from discontinued operations 6 (182 ) (1 ) (178 ) 14  
    Net (loss) earnings   (251 ) (39 ) 297   529  
    Attributable to                  
      Equity holders of Agrium   (253 ) (41 ) 293   525  
      Non-controlling interests   2   2   4   4  
    Net (loss) earnings   (251 ) (39 ) 297   529  
                       
    Earnings per share attributable to equity holders of Agrium                  
      Basic (loss) earnings per share from continuing operations   (0.52 ) (0.28 ) 3.41   3.70  
      Basic (loss) earnings per share from discontinued operations   (1.32 ) (0.01 ) (1.29 ) 0.10  
      Basic (loss) earnings per share   (1.84 ) (0.29 ) 2.12   3.80  
      Diluted (loss) earnings per share from continuing operations   (0.52 ) (0.28 ) 3.40   3.70  
      Diluted (loss) earnings per share from discontinued operations   (1.32 ) (0.01 ) (1.29 ) 0.10  
      Diluted (loss) earnings per share   (1.84 ) (0.29 ) 2.11   3.80  
      Weighted average number of shares outstanding for basic and diluted (loss) earnings per share (millions of common shares)   138   138   138   138  
    (a) Certain amounts have been restated as a result of discontinued operations. See note 6, Additional Information.  
                       
    See accompanying notes.                  
                       

    Basis of preparation and statement of compliance

    These condensed consolidated interim financial statements ("interim financial statements") were approved for issuance by the Audit Committee on November 7, 2017. 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 2016 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 2016 Annual Report.

     
    AGRIUM INC.
    Condensed Consolidated Interim Statements of Comprehensive Income
    (Unaudited)
                       
                       
        Three months ended   Nine months ended  
        September 30,   September 30,  
    (millions of U.S. dollars) Notes 2017   2016   2017   2016  
                       
    Net (loss) earnings   (251 ) (39 ) 297   529  
      Other comprehensive income (loss)                  
        Items that are or may be reclassified to earnings                  
          Cash flow hedges 3                
            Effective portion of changes in fair value   (29 ) (6 ) (59 ) (12 )
            Deferred income taxes   8   1   16   4  
          Associates and joint ventures                  
            Share of comprehensive income (loss)   -   1   (51 ) 2  
            Deferred income taxes   -   -   10   -  
          Foreign currency translation                  
            Gains   31   -   196   153  
            Reclassifications to earnings   -   -   6   -  
        10   (4 ) 118   147  
        Items that will never be reclassified to earnings                  
          Post-employment benefits                  
            Actuarial losses   -   (1 ) (3 ) (25 )
            Deferred income taxes   -   -   1   7  
        -   (1 ) (2 ) (18 )
      Other comprehensive income (loss)   10   (5 ) 116   129  
    Comprehensive (loss) income   (241 ) (44 ) 413   658  
    Attributable to                  
      Equity holders of Agrium   (243 ) (46 ) 408   654  
      Non-controlling interests   2   2   5   4  
    Comprehensive (loss) income   (241 ) (44 ) 413   658  
    See accompanying notes.                  
                       
     
    AGRIUM INC.
    Condensed Consolidated Interim Balance Sheets
    (Unaudited)
                     
                     
          September 30,     December 31,  
    (millions of U.S. dollars) Notes 2017   2016     2016  
    Assets                
      Current assets                
        Cash and cash equivalents   246   311     412  
        Accounts receivable   3,375   2,962     2,208  
        Income taxes receivable   30   52     33  
        Inventories   2,657   2,666     3,230  
        Prepaid expenses and deposits   150   133     855  
        Other current assets   122   132     123  
        Assets held for sale 6 126   -     -  
        6,706   6,256     6,861  
      Property, plant and equipment   6,833   6,935     6,818  
      Intangibles   536   638     566  
      Goodwill   2,195   2,033     2,095  
      Investments in associates and joint ventures   516   624     541  
      Other assets   59   56     48  
      Deferred income tax assets   24   38     34  
        16,869   16,580     16,963  
    Liabilities and shareholders' equity                
      Current liabilities                
        Short-term debt 5 1,882   1,740     604  
        Accounts payable   3,257   2,938     4,662  
        Income taxes payable   14   3     17  
        Current portion of long-term debt 5 11   110     110  
        Current portion of other provisions   54   67     59  
        5,218   4,858     5,452  
      Long-term debt 5 4,399   4,400     4,398  
      Post-employment benefits   140   163     141  
      Other provisions   341   332     322  
      Other liabilities   67   64     68  
      Deferred income tax liabilities   455   434     408  
        10,620   10,251     10,789  
      Shareholders' equity                
        Share capital   1,773   1,764     1,766  
        Retained earnings   5,565   5,677     5,634  
        Accumulated other comprehensive loss   (1,095 ) (1,118 )   (1,231 )
        Equity holders of Agrium   6,243   6,323     6,169  
        Non-controlling interests   6   6     5  
        Total equity   6,249   6,329     6,174  
        16,869   16,580     16,963  
    See accompanying notes.                
                     
     
    AGRIUM INC.
    Condensed Consolidated Interim Statements of Cash Flows
    (Unaudited)
                       
                       
        Three months ended   Nine months ended  
        September 30,   September 30,  
    (millions of U.S. dollars) Notes 2017   2016 (a ) 2017   2016 (a )
                       
    Operating                  
      Net (loss) earnings from continuing operations   (69 ) (38 ) 475   515  
      Adjustments for                  
        Depreciation and amortization   121   119   392   362  
        Earnings from associates and joint ventures   (4 ) (3 ) (32 ) (31 )
        Share-based payments   40   5   40   22  
        Unrealized (gain) loss on derivative financial instruments   (8 ) 14   (1 ) 36  
        Unrealized foreign exchange loss (gain)   31   21   31   (20 )
        Interest income   (17 ) (20 ) (43 ) (49 )
        Finance costs   80   66   226   206  
        Income taxes   (32 ) (13 ) 193   205  
        Other   11   (2 ) 4   (3 )
      Interest received   18   21   45   50  
      Interest paid   (93 ) (83 ) (240 ) (223 )
      Income taxes received (paid)   41   (112 ) (13 ) (277 )
      Dividends from associates and joint ventures   2   46   11   48  
      Net changes in non-cash working capital   (435 ) (232 ) (1,353 ) (629 )
    Cash (used in) provided by operating activities   (314 ) (211 ) (265 ) 212  
    Investing                  
      Business acquisitions, net of cash acquired   (110 ) (141 ) (184 ) (316 )
      Capital expenditures   (161 ) (143 ) (458 ) (531 )
      Capitalized borrowing costs   -   (6 ) (12 ) (18 )
      Purchase of investments   (9 ) (20 ) (59 ) (61 )
      Proceeds from sale of investments   15   14   64   78  
      Proceeds from sale of property, plant and equipment   7   4   28   14  
      Other   (3 ) (10 ) (11 ) (18 )
      Net changes in non-cash working capital   -   3   (51 ) (5 )
    Cash used in investing activities   (261 ) (299 ) (683 ) (857 )
    Financing                  
      Short-term debt 5 654   682   1,269   904  
      Repayment of long-term debt 5 (3 ) (10 ) (108 ) (16 )
      Dividends paid   (121 ) (121 ) (362 ) (362 )
    Cash provided by financing activities   530   551   799   526  
    Effect of exchange rate changes on cash and cash equivalents   (14 ) (11 ) (7 ) (58 )
    (Decrease) increase in cash and cash equivalents from continuing operations   (59 ) 30   (156 ) (177 )
    Cash and cash equivalents used in discontinued operations 6 (14 ) (26 ) (10 ) (27 )
    Cash and cash equivalents - beginning of period   319   307   412   515  
    Cash and cash equivalents - end of period   246   311   246   311  
    (a) Certain amounts have been restated as a result of discontinued operations. See note 6, Additional Information.  
                       
    See accompanying notes.                  
                       
     
    AGRIUM INC.
    Condensed Consolidated Interim 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
    interests
     

    Total
    equity
     
    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  
                                             
    December 31, 2016   138 1,766 5,634   (25 ) (51 ) (1,155 ) (1,231 )   6,169   5   6,174  
      Net earnings   - - 293   -   -   -   -     293   4   297  
      Other comprehensive income (loss), net of tax                                        
        Post-employment benefits   - - (2 ) -   -   -   -     (2 ) -   (2 )
        Other   - - -   (43 ) (41 ) 201   117     117   1   118  
      Comprehensive income (loss), net of tax   - - 291   (43 ) (41 ) 201   117     408   5   413  
      Dividends ($2.625 per share)   - - (363 ) -   -   -   -     (363 ) -   (363 )
      Non-controlling interest transactions   - - 3   -   -   (2 ) (2 )   1   (4 ) (3 )
      Share-based payment transactions   - 7 -   -   -   -   -     7   -   7  
      Reclassification of cash flow hedges, net of tax   - - -   21   -   -   21     21   -   21  
    September 30, 2017   138 1,773 5,565   (47 ) (92 ) (956 ) (1,095 )   6,243   6   6,249  
    See accompanying notes.  
                                             
     
    AGRIUM INC.
    Summarized Notes to the Condensed Consolidated Interim Financial Statements
    For the three and nine months ended September 30, 2017
    (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 as follows:
      • Nitrogen: Manufacturing in Alberta and Texas
      • Potash: Mining and processing in Saskatchewan
      • Phosphate: Production facilities in Alberta
      • Wholesale Other: Producing blended crop nutrients and Environmentally Smart Nitrogen® (ESN) polymer-coated nitrogen crop nutrients, and operating 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.

    Discontinued operations and assets held for sale

    During the quarter, we classified the results of our Conda phosphate operations (CPO) as assets held for sale as described in note 6. The operating results of CPO, previously included in our Phosphate operating segment, are presented in discontinued operations for the periods ended September 30, 2017, and have been restated for the comparative periods ended September 30, 2016. Amounts shown in our operating segments note represent results from continuing operations.

    2. Operating Segments

                         
    Segment information by business unit Three months ended September 30,
        2017     2016  
        Retail   Wholesale   Other (a ) Total     Retail   Wholesale (b ) Other (a)(b ) Total  
    Sales - external 2,059   323   -   2,382     1,849   343   -   2,192  
      - inter-segment 8   120   (128 ) -     8   102   (110 ) -  
    Total sales 2,067   443   (128 ) 2,382     1,857   445   (110 ) 2,192  
    Cost of product sold 1,549   397   (121 ) 1,825     1,375   361   (112 ) 1,624  
    Gross profit 518   46   (7 ) 557     482   84   2   568  
    Gross profit (%) 25   10       23     26   19       26  
    Expenses                                  
     Selling 468   6   (4 ) 470     443   7   (4 ) 446  
     General and administrative 21   6   29   56     26   7   27   60  
     Share-based payments -   -   40   40     -   -   5   5  
     Loss (earnings) from associates and joint ventures 2   (6 ) -   (4 )   2   (5 ) -   (3 )
     Other (income) expenses (10 ) 7   19   16     (19 ) 12   52   45  
    Earnings (loss) before finance costs and income taxes 37   33   (91 ) (21 )   30   63   (78 ) 15  
     Finance costs -   -   80   80     -   -   66   66  
    Earnings (loss) before income taxes 37   33   (171 ) (101 )   30   63   (144 ) (51 )
     Depreciation and amortization 73   44   4   121     71   44   4   119  
     Finance costs -   -   80   80     -   -   66   66  
    EBITDA (c) 110   77   (87 ) 100     101   107   (74 ) 134  
    (a)  Includes inter-segment eliminations     
    (b)  Certain amounts have been restated as a result of discontinued operations. See note 6, Additional Information.
    (c)  EBITDA is net earnings (loss) before finance costs, income taxes, depreciation and amortization, and net earnings (loss) from discontinued operations.
                         
    Segment information by business unit Nine months ended September 30,
        2017   2016
        Retail   Wholesale   Other (a ) Total     Retail   Wholesale (b ) Other (a)(b ) Total  
    Sales - external 9,980   1,336   -   11,316     9,907   1,312   -   11,219  
      - inter-segment 34   489   (523 ) -     31   522   (553 ) -  
    Total sales 10,014   1,825   (523 ) 11,316     9,938   1,834   (553 ) 11,219  
    Cost of product sold 7,763   1,441   (530 ) 8,674     7,775   1,413   (599 ) 8,589  
    Gross profit 2,251   384   7   2,642     2,163   421   46   2,630  
    Gross profit (%) 22   21       23     22   23       23  
    Expenses                                  
     Selling 1,490   18   (13 ) 1,495     1,423   22   (12 ) 1,433  
     General and administrative 74   18   84   176     76   22   78   176  
     Share-based payments -   -   40   40     -   -   22   22  
     (Earnings) loss from associates and joint ventures (8 ) (25 ) 1   (32 )   (5 ) (27 ) 1   (31 )
     Other (income) expenses (21 ) 32   58   69     (14 ) 54   64   104  
    Earnings (loss) before finance costs and income taxes 716   341   (163 ) 894     683   350   (107 ) 926  
     Finance costs -   -   226   226     -   -   206   206  
    Earnings (loss) before income taxes 716   341   (389 ) 668     683   350   (313 ) 720  
     Depreciation and amortization 215   164   13   392     206   146   10   362  
     Finance costs -   -   226   226     -   -   206   206  
    EBITDA 931   505   (150 ) 1,286     889   496   (97 ) 1,288  
    (a)  Includes inter-segment eliminations
    (b)  Certain amounts have been restated as a result of discontinued operations. See note 6, Additional Information.
                     
                     
    Segment information - Retail Three months ended September 30,
        2017   2016
        North
    America
     
    International

    Retail
        North
    America
     
    International
     
    Retail
     
    Sales - external 1,575   484 2,059     1,398   451   1,849  
      - inter-segment 8   - 8     8   -   8  
    Total sales 1,583   484 2,067     1,406   451   1,857  
    Cost of product sold 1,196   353 1,549     1,047   328   1,375  
    Gross profit 387   131 518     359   123   482  
    Expenses                        
     Selling 383   85 468     358   85   443  
     General and administrative 14   7 21     19   7   26  
     Loss from associates and joint ventures 2   - 2     2   -   2  
     Other (income) expenses (12 ) 2 (10 )   (14 ) (5 ) (19 )
    Earnings (loss) before income taxes -   37 37     (6 ) 36   30  
     Depreciation and amortization 70   3 73     65   6   71  
    EBITDA 70   40 110     59   42   101  
                             
                                 
    Segment information - Retail Nine months ended September 30,  
        2017     2016  
        North
    America
     
    International
     
    Retail
        North
    America
     
    International
     
    Retail
     
    Sales - external 8,364   1,616   9,980     8,233   1,674   9,907  
      - inter-segment 34   -   34     31   -   31  
    Total sales 8,398   1,616   10,014     8,264   1,674   9,938  
    Cost of product sold 6,523   1,240   7,763     6,446   1,329   7,775  
    Gross profit 1,875   376   2,251     1,818   345   2,163  
    Expenses                          
     Selling 1,233   257   1,490     1,179   244   1,423  
     General and administrative 53   21   74     54   22   76  
     Earnings from associates and joint ventures (7 ) (1 ) (8 )   (4 ) (1 ) (5 )
     Other (income) expenses (8 ) (13 ) (21 )   8   (22 ) (14 )
    Earnings before income taxes 604   112   716     581   102   683  
     Depreciation and amortization 203   12   215     189   17   206  
    EBITDA 807   124   931     770   119   889  
                               
                             
    Segment information - Wholesale Three months ended September 30,
        2017   2016
       
    Nitrogen

    Potash

    Phosphate
      Wholesale
    Other (a

    )

    Wholesale
       
    Nitrogen

    Potash
     
    Phosphate (b

    )
    Wholesale
    Other (a

    )

    Wholesale
     
    Sales - external 140 79 25   79   323     173 73   31   66   343  
      - inter-segment 41 21 35   23   120     42 15   29   16   102  
    Total sales 181 100 60   102   443     215 88   60   82   445  
    Cost of product sold 153 90 64   90   397     156 87   49   69   361  
    Gross profit 28 10 (4 ) 12   46     59 1   11   13   84  
    Expenses                                    
      Selling 3 1 -   2   6     3 1   -   3   7  
      General and administrative 3 1 -   2   6     2 2   -   3   7  
      Earnings from associates and joint ventures - - -   (6 ) (6 )   - -   -   (5 ) (5 )
      Other expenses (income) 3 3 -   1   7     8 4   2   (2 ) 12  
    Earnings (loss) before income taxes 19 5 (4 ) 13   33     46 (6 ) 9   14   63  
      Depreciation and amortization 17 21 3   3   44     16 22   4   2   44  
    EBITDA 36 26 (1 ) 16   77     62 16   13   16   107  
    (a) Includes ammonium sulfate, ESN and other products
    (b) Certain amounts have been restated as a result of discontinued operations. See note 6, Additional Information.
                             
    Segment information - Wholesale Nine months ended September 30,
        2017     2016  
       
    Nitrogen

    Potash

    Phosphate
    Wholesale
    Other (a
    )
    Wholesale
       
    Nitrogen

    Potash
     
    Phosphate (b
    ) Wholesale
    Other (a
    )
    Wholesale
     
    Sales - external 599 285 96 356   1,336     642 206   108   356   1,312  
      - inter-segment 190 97 94 108   489     217 108   100   97   522  
    Total sales 789 382 190 464   1,825     859 314   208   453   1,834  
    Cost of product sold 571 293 179 398   1,441     557 283   189   384   1,413  
    Gross profit 218 89 11 66   384     302 31   19   69   421  
    Expenses                                  
      Selling 9 4 1 4   18     10 5   1   6   22  
      General and administrative 8 3 1 6   18     9 5   1   7   22  
      Earnings from associates and joint ventures - - - (25 ) (25 )   - -   -   (27 ) (27 )
      Other expenses (income) 18 10 4 -   32     30 24   2   (2 ) 54  
    Earnings (loss) before income taxes 183 72 5 81   341     253 (3 ) 15   85   350  
      Depreciation and amortization 59 82 12 11   164     52 73   11   10   146  
    EBITDA 242 154 17 92   505     305 70   26   95   496  
    (a) Includes ammonium sulfate, ESN and other products
    (b) Certain amounts have been restated as a result of discontinued operations. See note 6, Additional Information.
                                 
    Gross profit by product line Three months ended September 30,   Nine months ended September 30,
      2017 2016   2017   2016
     

    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 528   408   120   502   384   118   3,231   2,551   680   3,531   2,846   685
      Crop protection products 1,117   874   243   983   757   226   4,225   3,367   858   4,064   3,246   818
      Seed 59   38   21   59   37   22   1,521   1,247   274   1,361   1,107   254
      Merchandise 187   158   29   175   146   29   496   418   78   454   378   76
      Services and other (a) 176   71   105   138   51   87   541   180   361   528   198   330
      2,067   1,549   518   1,857   1,375   482   10,014   7,763   2,251   9,938   7,775   2,163
    Wholesale                                              
      Nitrogen 181   153   28   215   156   59   789   571   218   859   557   302
      Potash 100   90   10   88   87   1   382   293   89   314   283   31
      Phosphate (b) 60   64   (4 ) 60   49   11   190   179   11   208   189   19
      Ammonium sulfate, ESN and other 102   90   12   82   69   13   464   398   66   453   384   69
      443   397   46   445   361   84   1,825   1,441   384   1,834   1,413   421
    Other inter-segment eliminations (b) (128 ) (121 ) (7 ) (110 ) (112 ) 2   (523 ) (530 ) 7   (553 ) (599 ) 46
    Total 2,382   1,825   557   2,192   1,624   568   11,316   8,674   2,642   11,219   8,589   2,630
                                                   
    Wholesale share of joint ventures                                              
      Nitrogen 78   65   13   66   53   13   148   120   28   131   111   20
    Total Wholesale including proportionate                                              
    share in joint ventures 521   462   59   511   414   97   1,973   1,561   412   1,965   1,524   441
    (a) Includes financial services products
    (b) Certain amounts have been restated as a result of discontinued operations. See note 6, Additional Information.
                       
                       
    Selected volumes and per tonne information Three months ended September 30,
      2017     2016  
     
    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 843   444   329   115     757   458   332   126  
        International 400   384   329   55     406   384   327   57  
      Total crop nutrients 1,243   425   329   96     1,163   432   331   101  
                                       
    Wholesale                                  
      Nitrogen                                  
        North America                                  
          Ammonia 134   364             207   378          
          Urea 355   256             359   269          
          Other 179   229             173   234          
      Total nitrogen 668   270   228   42     739   291   212   79  
                                       
      Potash                                  
        North America 251   253             198   223          
        International 211   171             298   148          
      Total potash 462   216   193   23     496   178   175   3  
                                       
      Phosphate (a) 140   436   465   (29 )   143   418   343   75  
      Ammonium sulfate 85   251   144   107     71   242   120   122  
      ESN and other 259                 208              
    Total Wholesale 1,614   274   246   28     1,657   268   217   51  
                                       
    Wholesale share of joint ventures                                  
      Nitrogen 277   283   234   49     231   286   231   55  
                                       
    Total Wholesale including proportionate share in joint ventures 1,891   276   245   31     1,888   271   220   51  
    (a) Certain amounts have been restated as a result of discontinued operations. See note 6, Additional Information.  
       
                       
    Selected volumes and per tonne information Nine months ended September 30,
      2017     2016  
     
    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 6,582   417   321   96     6,410   459   360   99  
        International 1,400   347   311   36     1,561   378   345   33  
      Total crop nutrients 7,982   405   320   85     7,971   443   357   86  
                                       
    Wholesale                                  
      Nitrogen                                  
        North America                                  
          Ammonia 774   390             831   414          
          Urea 1,175   282             1,181   302          
          Other 672   230             636   250          
      Total nitrogen 2,621   301   218   83     2,648   325   211   114  
                                       
      Potash                                  
        North America 1,006   252             901   218          
        International 806   160             748   157          
      Total potash 1,812   211   162   49     1,649   191   172   19  
                                       
      Phosphate (a) 444   427   405   22     449   463   420   43  
      Ammonium sulfate 284   269   124   145     242   279   119   160  
      ESN and other 1,177                 1,112              
    Total Wholesale 6,338   288   228   60     6,100   301   232   69  
                                       
    Wholesale share of joint ventures                                  
      Nitrogen 513   289   234   55     447   293   249   44  
    Total Wholesale including proportionate share in joint ventures 6,851   288   228   60     6,547   300   233   67  
    (a) Certain amounts have been restated as a result of discontinued operations. See note 6, Additional Information.  
       

    3. Risk Management

    Commodity price risk

                       
    Natural gas derivative financial instruments outstanding (notional amounts in millions of MMBtu)
      September 30,     December 31,  
      2017     2016  
     

    Notional


    Maturities
    Average
    contract
    price (a
    ) Fair value
    of assets
    (liabilities
    )  

    Notional


    Maturities
    Average
    contract
    price (a
    ) Fair value
    of assets
    (liabilities
    )
    Designated as hedges                          
    AECO swaps 55 2017 - 2019 2.48   (54 )   48 2017 - 2018 2.90   (21 )
              (54 )           (21 )
    (a) U.S. dollars per MMBtu
                 
      Fair value of assets (liabilities)  
    Maturities of natural gas derivative contracts 2017   2018   2019  
    AECO swaps (15 ) (32 ) (7 )
                 
           
    Impact of change in fair value of natural gas derivative financial instruments September 30,   December 31,
      2017   2016
    A $10-million impact to other comprehensive income requires movement in gas prices per MMBtu 0.18   0.29
           

    The underlying risk of the derivative contracts is identical to the hedged risk; 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,  
      2017     2016  
    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 342 2017 1.25   -     - - -   -  
      CAD/USD 109 2017 1.23   1     180 2017 1.34   -  
      USD/AUD 20 2017 1.29   -     14 2017 1.32   (1 )
      AUD/USD 41 2017 - 2018 1.29   (1 )   22 2017 1.34   1  
      CNY/AUD 42 2017 - 2018 6.72   -     23 2017 7.16   -  
    Options                          
      USD/CAD - buy USD puts 58 2017 1.25   1     - - -   -  
      USD/CAD - sell USD calls 67 2017 1.31   -     - - -   -  
      CAD/USD - buy USD calls 16 2017 1.34   -     - - -   -  
      CAD/USD - sell USD puts 4 2017 1.17   -     - - -   -  
              1             -  
    (a) Foreign currency per U.S. dollar
           
      September 30,   December 31,
      2017   2016
      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 - 246 246   - 412 412
      Accounts receivable - derivatives - 3 3   - 2 2
      Other current financial assets - marketable securities 18 102 120   22 99 121
      Other non-current financial assets - derivatives - 4 4   - - -
      Accounts payable - derivatives - 45 45   - 7 7
      Other financial liabilities - derivatives - 15 15   - 16 16
    Financial instruments measured at amortized cost              
      Current portion of long-term debt              
        Debentures - - -   - 101 100
        Fixed and floating rate debt - 11 11   - 10 10
      Long-term debt              
        Debentures - 4,874 4,375   - 4,600 4,373
        Fixed and floating rate debt - 24 24   - 25 25
                     

    There have been no transfers between Level 1 and Level 2 fair value measurements in the nine months ended September 30, 2017. 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,  
      2017   2016 (a ) 2017   2016 (a )
    Loss on foreign exchange and related derivatives 7   2   11   10  
    Interest income (17 ) (20 ) (43 ) (49 )
    Environmental remediation and asset retirement obligations 2   4   1   9  
    Bad debt expense 8   3   37   32  
    Potash profit and capital tax 3   2   9   10  
    Merger and related costs 11   17   42   17  
    Other 2   37   12   75  
      16   45   69   104  
    (a) Certain amounts have been restated as a result of discontinued operations. See note 6, Additional Information.  
       
     
    5. Debt
               
        September 30,   December 31,
          2017   2016
      Maturity Rate (%) (a)      
    Short-term debt          
      Commercial paper 2017 1.56 1,698   306
      Credit facilities   7.53 184   298
          1,882   604
    (a) Weighted average rates at September 30, 2017     
     
         
      Short-term debt Long-term debt (a)
    December 31, 2016 604 4,508
      Cash flows reported as financing activities 1,269 (108)
      Non-cash changes    
        Other adjustments - 9
        Foreign currency translation 9 1
    September 30, 2017 1,882 4,410
    (a) Includes current portion
     

    6. Additional Information

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

    Agrium and PotashCorp entered into an agreement dated September 11, 2016 (the "Arrangement Agreement"), under which the companies will combine in a merger of equals into a newly incorporated parent entity, which will be named Nutrien, to be formed to manage and hold the combined businesses of both Agrium and PotashCorp. The Arrangement Agreement will be implemented by a proposed plan of arrangement (the "Arrangement"). Under the Arrangement, Agrium shareholders will receive 2.23 Nutrien shares for each Agrium share held, and PotashCorp shareholders will receive 0.40 of a Nutrien share for each PotashCorp share held. On November 3, 2016, shareholders of both Agrium and PotashCorp approved the Arrangement.

    Subsequent to September 30, 2017, regulators in India and China approved the merger, subject to conditions including the divestment of certain of PotashCorp's minority shareholdings in Arab Potash Company, Israel Chemicals Ltd., Sociedad Quimica y Minera de Chile S.A., and Sinofert Holdings Limited within certain specified time periods over the 18 months following the merger.

    Agrium and PotashCorp are working to resolve outstanding regulatory approvals in the U.S. and we anticipate the Arrangement will be completed by the end of the fourth quarter of 2017.

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

    Discontinued Operations and Assets Held for Sale

    On September 7, 2017, Agrium and PotashCorp provided an update on the regulatory approval process related to the proposed merger indicating that they are working to resolve final issues in superphosphoric acid and nitric acid. A potential remedy to outstanding issues is the disposition of our CPO and North Bend nitrogen facilities. A sale of CPO and North Bend assets by September 2018 is considered highly probable as management has committed to a sale and has begun to actively market the assets. As a result, we have classified these assets as held for sale and have re-measured them to fair value less costs to sell (FVLCS). FVLCS was determined primarily based on expressions of interest received from potential third-party buyers, and was corroborated by discounted cash flows derived from our forecasts. Because we did not base the inputs of our fair value measurement on observable market transactions, we classified the fair value as a Level 3 measurement. In November 2017, we entered into an agreement with a third party to dispose of our CPO and North Bend assets, subject to the approval of the Federal Trade Commission.

    As CPO comprises operations and cash flows that can be clearly distinguished operationally and for financial reporting purposes, its operating results and the impact of re-measurement to FVLCS is included in discontinued operations for the three and nine months ended September 30, 2017, and restated for the comparative periods ended September 30, 2016. Amounts shown exclude elimination of intercompany transactions.

    The majority of the remaining value of assets held for sale is assigned to inventories.

                     
      Three months ended   Nine months ended  
    Condensed information of discontinued operations (a) September 30,   September 30,  
      2017   2016   2017   2016  
    Operating information                
    Discontinued operations of assets held for sale                
      Sales 77   73   219   215  
      Expenses 83   75   227   205  
      (Loss) earnings before income taxes (6 ) (2 ) (8 ) 10  
      Income tax recovery 2   1   8   4  
      Loss before measurement of assets held for sale (4 ) (1 ) -   14  
      Loss on measurement of assets held for sale (295 ) -   (295 ) -  
      Income tax recovery on loss on measurement of assets held for sale 117   -   117   -  
    Net (loss) earnings from discontinued operations (182 ) (1 ) (178 ) 14  
    Cash flow information                
      Operating activities (4 ) (22 ) 10   (7 )
      Investing activities (10 ) (4 ) (20 ) (20 )
      Cash used in discontinued operations (14 ) (26 ) (10 ) (27 )
    (a) There are no cumulative income or expenses included in other comprehensive income relating to CPO.  
       

    Business Acquisitions

    During the quarter, our Retail business unit acquired 25 farm centers located in the U.S. for preliminary purchase consideration of $110-million, subject to working capital adjustments. We anticipate that the majority of the fair value of the acquired assets will be comprised of property, plant and equipment, and goodwill. Valuations of the acquired businesses are in progress and are not complete due to the timing of the closing dates.

    Recent Accounting Pronouncements

    Our cross-functional project team has been working since September of 2016 to assess the impact of IFRS 15 and 16 and prepare for implementation. The new standards will not have any cash impact and accordingly will not affect the economics of our underlying customer contracts or our leases. We expect to implement changes to our internal control over financial reporting on adoption of each standard, including new policies, training and ongoing contract review requirements.

    • IFRS 15 Revenue from Contracts with Customers - Beginning in 2017, we initiated the second phase of our planned review of our contracts with customers. This included reviewing our significant revenue portfolios in detail, determining and documenting changes to our business processes and internal controls, and validating our conclusions as to the impact to our consolidated financial statements. Similar to our assessment in 2016, we expect this standard will not have a material impact to our revenues as the majority of our contracts with customers are short-term in nature. We expect that our financial statements will include expanded disclosures about revenues from contracts with customers upon adoption of IFRS 15. We will adopt this standard effective January 1, 2018.
    • IFRS 16 Leases - We have reviewed our existing lease agreements and considered other agreements that could contain leases. We estimate that IFRS 16 will have a material impact on our assets and liabilities and will result in material reclassifications of interest and depreciation expenses within our statement of operations. We will adopt this standard effective January 1, 2019.

    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




    Verfasst von Marketwired
    Agrium Reports Third Quarter Results CALGARY, AB--(Marketwired - November 07, 2017) - ALL AMOUNTS ARE STATED IN U.S.$Agrium Inc. (TSX: AGU) (NYSE: AGU) announced today its 2017 third quarter results, with a net loss from continuing operations of $69-million ($0.52 diluted loss per …