EXHIBIT
99.2
 AGRIUM INC.
 2009
 MANAGEMENTS
DISCUSSION & ANALYSIS OF
 OPERATIONS AND FINANCIAL CONDITION




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Managements Discussion and Analysis
  Inside the MD&A
 Forward-looking statements
    
    
    12Executive summary
    
    
    14Corporate mission, vision and strategy
    
    
    15Retail business unit
    
    
    18Wholesale business unit
    
    
    26Advanced Technologies business unit
    
    
    44Other business unit
    
    
    49Outlook
    
    
    51Key business sensitivities
    
    
    54Consolidated performance
    
    
    55Financial condition
    
    
    61Liquidity and capital resources
    
    
    62Outstanding share data
    
    
    68Off balance sheet arrangements
    
    
    68Financial instruments
    
    
    692009 fourth quarter Managements Discussion and Analysis
    
    
    72Accounting estimates and new accounting standards
    
    
    75Enterprise risk management
    
    
    81Environmental protection requirements
    
    
    89Controls and procedures
    
    
    92Forward-looking statements
    
    
    93
      
 11 Agrium




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Forward-looking statements
  (BULLET)
    
    Disclosures made under the heading Outlook;(BULLET)
    
    Our 2010 key corporate goals, including expansion and growth of our business and operations;(BULLET)
    
    Key drivers for our business and industry trends;(BULLET)
    
    The amount and type of future capital expenditures and capital resources;(BULLET)
    
    Future cash requirements and long-term obligations;(BULLET)
    
    Business strategies and plans for implementing them;(BULLET)
    
    Future crop input volumes, prices and sales;(BULLET)
    
    Availability of raw materials, particularly gas availability or gas price relative to nitrogen prices;(BULLET)
    
    Risk mitigation activities; and,(BULLET)
    
    Our future results and plans, including any expected benefits received from our recent and
proposed acquisitions.
  (BULLET)
    
    General economic, market, business and weather conditions, including global agricultural
supply/demand factors and crop price levels; global and regional supply/demand factors
impacting the crop input application season and the price of crop nutrients and raw
materials/feedstock; availability of credit; and access to capital markets;(BULLET)
    
    Changes in government policies and legislation regarding agriculture, safety, environment,
greenhouse gas and others, including potential imposition of changes to price controls on
crop nutrients in certain markets;(BULLET)
    
    Actions by competitors and others that include changes to industry capacity, utilization
rates and product pricing; performance by customers, suppliers and counterparties to
financial instruments; potential for expansion plans to be delayed; and ability to transport
or deliver production to markets;(BULLET)
    
    Changes in margins and/or levels of supplier rebates for major crop inputs such as crop
protection products, nutrients and seed, as well as crop input prices declining below cost
in inventory between the time of purchase and sales;(BULLET)
    
    General operating risks associated with investment in foreign jurisdictions; the level and
effectiveness of future capital expenditures; reliability of performance of existing capital
assets; changes in capital markets and availability of credit; and fluctuations in foreign
exchange and tax rates in the jurisdictions in which we operate;(BULLET)
    
    Future operating rates, production costs and sustaining capital of our facilities;
unexpected costs from present and discontinued mining operations and/or labor disruptions;
changes to timing, construction cost and performance of other parties; and political risks
associated with our interest in the Egyptian MISR Fertilizer Production Company S.A.E.
(MOPCO), Argentine Profertil nitrogen facilities, and South American retail operations;
 12 Agrium




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(BULLET)
    
    Strategic risks including our ability to effectively implement our business strategy
and our risk mitigation strategies, including hedging and insurance; our ability to close
pending and proposed acquisitions as anticipated and to integrate and achieve synergies from
any assets we may acquire within the time or performance expected of those assets;
technological changes; and other factors; and,(BULLET)
    
    Risks associated with our proposed acquisition of CF Industries Holdings, Inc. (CF) or
any other proposed or completed business acquisitions, include the inability to successfully
integrate the acquisition or if such integration proves more difficult, time-consuming or
costly than expected. Other risks of the proposed CF acquisition include CFs failure to
accept Agriums proposal and enter into a definitive agreement to effect the transaction; the
failure of CF stockholders to elect Agriums nominees as directors of CF at its 2010 annual
stockholder meeting; that the costs of integration in the event that the acquisition is
completed are higher than expected; the increased indebtedness that we would incur or assume
as a result of the acquisition; the risks associated with our inability to obtain access to
CFs non-public information and the cooperation of CF management; the possibility that the
expected combination benefits and synergies and costs savings from the Agrium/CF transaction
may not be fully realized or realized within the expected time frame, which could be impacted
by future levels of crop nutrient prices and volumes as well as raw material cost; and the
potential for disruption from the proposed transaction to make it more difficult to maintain
relationships with customers, employees and suppliers.
  (BULLET)
    
    Grain and nutrient benchmark prices in 2010 are expected to remain above historic levels,
with significantly less price volatility in 2010 than in 2009;(BULLET)
    
    Crop nutrient, crop protection and seed markets are expected to return to more normal
volumes in 2010 compared to 2009, and price volatility for the major retail crop input
products is also expected to return to a more normal range in 2010; and,(BULLET)
    
    High operating rates are expected for the majority of our facilities in 2010, with the
exception of routinely scheduled turnarounds at several plants.
   Non-GAAP Financial Measures
  
 13 Agrium




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Executive
summary Strength through growth and
diversity
 2009 in review
  2009 | Consolidated financial performance
    
  Agriums takeover bid for CF
 Agrium submitted an initial proposal to CFs board to acquire CF for a
combination of cash and stock on February 25, 2009. The offer has been modified
several times over the past year and is still outstanding. To date, CFs board
has refused to engage with us, despite the fact that in two separate votes 62
percent of CFs shareholders tendered their shares to our offer. We have
announced that we will be nominating two candidates to CFs board at their 2010
annual shareholder meeting, which is expected to take place in the spring of
2010. Only two of CFs directors are up for election this year since CF has
staggered board elections. We believe that the combination of Agrium with CF
would create a global leader in crop nutrients, with the addition of over five
million tonnes of nitrogen capacity and over two million tonnes of phosphate
capacity to our current portfolio, as well as further significantly expanding
our wholesale distribution footprint.
 The key value drivers for this acquisition include annual estimated synergies of
$150-million; our expectation that North American nitrogen will maintain its
current cost competitiveness given the difference between North American and
European natural gas prices; and, the opportunity to strengthen our phosphate
business with strong Central Florida assets, and the opportunity to
significantly augment our U.S. distribution assets.
 14 Agrium




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Our corporate mission, vision and strategy
 Our mission
 Providing Ingredients for Growth.
 Our vision
 To be one of the worlds leading providers of inputs for plant growth by creating value for
each of our stakeholders.
    1 |
    
    To invest and grow across the
agricultural value chain;2 |
    
    To establish and/or maintain a low
cost-to-serve wholesale position; and,3 |
    
    To diversify geographically.
 www.agrium.com
 Strategic Business Units
  Retail |
  15 Agrium




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Wholesale |
  Advanced Technologies | ®
   
 
 16 Agrium




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Net Sales and Gross Profit by Business Unit and Product
 Year ended December 312009
    
    
    2008Net
    
    
    Gross
    
    
    Net
    
    
    Gross(millions of
U.S. dollars)
    
    Sales
    
    
    Profit
    
    
    Sales
    
    
    ProfitRetailCrop nutrients
    
    
    2,522
    
    
    
    212
    
    
    
    2,718
    
    
    
    627Crop protection products
    
    
    2,638
    
    
    
    648
    
    
    
    2,115
    
    
    
    576Seed, services and other
    
    
    1,004
    
    
    
    322
    
    
    
    683
    
    
    
    223Total Retail
    
    
    6,164
    
    
    
    1,182
    
    
    
    5,516
    
    
    
    1,426WholesaleNitrogen
    
    
    1,247
    
    
    
    412
    
    
    
    1,815
    
    
    
    712Potash
    
    
    333
    
    
    
    174
    
    
    
    816
    
    
    
    632Phosphate
    
    
    436
    
    
    
    38
    
    
    
    847
    
    
    
    421Product purchased for resale
    
    
    816
    
    
    
    (37
    )
    
    
    971
    
    
    
    (42
    )Other
    
    
    187
    
    
    
    55
    
    
    
    237
    
    
    
    68Total Wholesale
    
    
    3,019
    
    
    
    642
    
    
    
    4,686
    
    
    
    1,791Advanced Technologies
    
    
    304
    
    
    
    54
    
    
    
    352
    
    
    
    79Other inter-segment eliminations
    
    
    (358
    )
    
    
    65
    
    
    
    (523
    )
    
    
    (73
    )Total
    
    
    9,129
    
    
    
    1,943
    
    
    
    10,031
    
    
    
    3,223
 
 17 Agrium




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Retail
 strength in market and product growth
 In
2009, our Retail operations accounted for 67 percent of Agriums consolidated net
sales, 61 percent of our gross profit and 32 percent of total EBITDA.
 18 Agrium




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Strategic Business Unit | RETAIL
 Agrium is the largest agricultural retailer in the U.S. We also have retail operations in
Argentina, Canada, Uruguay and Chile. Our Retail business strives to provide growers with a
one-stop shop for the products and services they need to optimize crop yields and financial
returns. Retail works with growers to identify the best management practices that adhere to
their cropping, soil and climate specifications. This approach helps growers optimize economic
returns while protecting the environment and meeting societys needs for safe, healthy,
affordable food. To accomplish this, we offer our farm customers the latest technologies,
products and experience with a commitment to environmental responsibility. We also apply a
majority of the products we sell to growers fields using the latest equipment, standards and
technology.
 Retail | Strategy
  Retail | Key developments
  (PICTURE)
    
    Much of our effort this year focused on the successful integration of
the 2008 UAP acquisition, which added strength and diversity to Agriums
overall business portfolio and financial position. The Retail business
continues to be a solid source of cash flow and growth for Agrium. In
2009, Retail produced an EBITDA of $266-million and achieved $55-million
in synergies compared to targeted synergies of $80-million for 2009. We
did not achieve our full synergy target this year because of the
challenges in the retail crop nutrient market. In 2010, we expect to
meet the full target of $115-million in annual synergies from the UAP
acquisition.1(PICTURE)
    
    We re-branded all of our U.S. and Canadian retail outlets under the
Crop Production Services name in 2009.
 
 
 
 (1)
    
    See disclosures under the heading Forward-Looking Statements on page 93 of this MD&A 19 Agrium




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Retail | Financial results
  
 20 Agrium




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Retail Performance
 Year ended December 31(millions of
U.S. dollars)
    
    2009
    
    
    2008
    
    
    2007Net sales
    
    
    6,164
    
    
    
    5,516
    
    
    
    2,466Cost of product sold
    
    
    4,982
    
    
    
    3,997
    
    
    
    1,790Inventory and purchase
commitment write-down
    
    
    
    
    
    
    93
    
    
    
    Gross profit
    
    
    1,182
    
    
    
    1,426
    
    
    
    676Selling expenses
    
    
    882
    
    
    
    788
    
    
    
    442General and administrative
    
    
    61
    
    
    
    59
    
    
    
    21Depreciation and amortization
    
    
    103
    
    
    
    80
    
    
    
    33Other expenses (income)
    
    
    (27
    )
    
    
    19
    
    
    
    3EBIT
    
    
    163
    
    
    
    480
    
    
    
    177EBITDA
    
    
    266
    
    
    
    560
    
    
    
    210EBITDA AS PERCENT OF NET SALES (%)
    
    
    4
    
    
    
    10
    
    
    
    9
 
 Retail expenses
   Crop nutrients: Products and services
   21 Agrium




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Crop nutrients: Financial results
   Year ended December 31(millions of
U.S. dollars)
    
    2009
    
    
    2008
    
    
    2007Crop nutrientsNet sales
    
    
    2,522
    
    
    
    2,718
    
    
    
    1,453Cost of product sold
    
    
    2,310
    
    
    
    1,998
    
    
    
    1,118Inventory and purchase commitment write-down
    
    
    
    
    
    
    93
    
    
    
    Gross profit
    
    
    212
    
    
    
    627
    
    
    
    335Gross profit (%)
    
    
    8.4
    
    
    
    23.1
    
    
    
    23.1Crop protection productsNet sales
    
    
    2,638
    
    
    
    2,115
    
    
    
    619Cost of product sold
    
    
    1,990
    
    
    
    1,539
    
    
    
    438Gross profit
    
    
    648
    
    
    
    576
    
    
    
    181Gross profit (%)
    
    
    24.6
    
    
    
    27.2
    
    
    
    29.2SeedNet sales
    
    
    731
    
    
    
    432
    
    
    
    206Cost of product sold
    
    
    579
    
    
    
    361
    
    
    
    166Gross profit
    
    
    152
    
    
    
    71
    
    
    
    40Gross profit (%)
    
    
    21
    
    
    
    16
    
    
    
    19Services and otherNet sales
    
    
    273
    
    
    
    251
    
    
    
    188Cost of product sold
    
    
    103
    
    
    
    99
    
    
    
    68Gross profit
    
    
    170
    
    
    
    152
    
    
    
    120Gross profit (%)
    
    
    62
    
    
    
    61
    
    
    
    64Total net sales(a)
    
    
    6,164
    
    
    
    5,516
    
    
    
    2,466Total cost of product sold
    
    
    4,982
    
    
    
    3,997
    
    
    
    1,790Total inventory and
purchase commitment write-down
    
    
    
    
    
    
    93
    
    
    
    Total gross profit
    
    
    1,182
    
    
    
    1,426
    
    
    
    676
 
 (a)
    
    International Retail net sales were $196-million (2008  $331-million; 2007 
$260-million) and gross profit was $25-million (2008  $72-million; 2007  $49-million). 22 Agrium




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Crop protection products:
Products and services
   Crop protection products: 

Financial results
     
 Seed, services and other: 

Products and services
  23 Agrium




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Seed:
Financial results
  Services
and other products:
Financial results
  
 24 Agrium




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Retail | Quarterly results
  Retail Quarterly Performance
 2009
    
    

    2008
    
    
    2007(millions of
U.S. dollars)
    
    Q4
    
    
    Q3
    
    
    Q2
    
    
    Q1
    
    
    Q4
    
    
    Q3
    
    
    Q2
    
    
    Q1
    
    
    Q4
    
    
    Q3
    
    
    Q2
    
    
    Q1Net sales  Domestic
    
    
    662
    
    
    
    1,157
    
    
    
    3,118
    
    
    
    1,031
    
    
    
    916
    
    
    
    1,482
    
    
    
    2,422
    
    
    
    365
    
    
    
    454
    
    
    
    345
    
    
    
    1,087
    
    
    
    320Net sales  International
    
    
    76
    
    
    
    70
    
    
    
    30
    
    
    
    20
    
    
    
    106
    
    
    
    112
    
    
    
    84
    
    
    
    29
    
    
    
    101
    
    
    
    82
    
    
    
    60
    
    
    
    17Total net sales
    
    
    738
    
    
    
    1,227
    
    
    
    3,148
    
    
    
    1,051
    
    
    
    1,022
    
    
    
    1,594
    
    
    
    2,506
    
    
    
    394
    
    
    
    555
    
    
    
    427
    
    
    
    1,147
    
    
    
    337Cost of product sold
    
    
    549
    
    
    
    973
    
    
    
    2,551
    
    
    
    909
    
    
    
    701
    
    
    
    1,178
    
    
    
    1,839
    
    
    
    279
    
    
    
    376
    
    
    
    293
    
    
    
    869
    
    
    
    252Inventory and purchase
commitment write-down
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    93
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Gross profit
    
    
    189
    
    
    
    254
    
    
    
    597
    
    
    
    142
    
    
    
    228
    
    
    
    416
    
    
    
    667
    
    
    
    115
    
    
    
    179
    
    
    
    134
    
    
    
    278
    
    
    
    85Gross profit(%)
    
    
    26
    
    
    
    21
    
    
    
    19
    
    
    
    14
    
    
    
    22
    
    
    
    26
    
    
    
    27
    
    
    
    29
    
    
    
    32
    
    
    
    31
    
    
    
    24
    
    
    
    25Gross profit by productCrop nutrients
    
    
    46
    
    
    
    31
    
    
    
    117
    
    
    
    18
    
    
    
    60
    
    
    
    160
    
    
    
    335
    
    
    
    72
    
    
    
    83
    
    
    
    48
    
    
    
    159
    
    
    
    45Crop protection products
    
    
    98
    
    
    
    169
    
    
    
    304
    
    
    
    77
    
    
    
    133
    
    
    
    191
    
    
    
    223
    
    
    
    29
    
    
    
    56
    
    
    
    50
    
    
    
    52
    
    
    
    23Seed, services and other
    
    
    45
    
    
    
    54
    
    
    
    176
    
    
    
    47
    
    
    
    35
    
    
    
    65
    
    
    
    109
    
    
    
    14
    
    
    
    40
    
    
    
    36
    
    
    
    67
    
    
    
    17EBIT
    
    
    (57
    )
    
    
    31
    
    
    
    283
    
    
    
    (94
    )
    
    
    (54
    )
    
    
    121
    
    
    
    409
    
    
    
    4
    
    
    
    39
    
    
    
    17
    
    
    
    142
    
    
    
    (21
    )EBITDA
    
    
    (30
    )
    
    
    57
    
    
    
    307
    
    
    
    (68
    )
    
    
    (32
    )
    
    
    148
    
    
    
    431
    
    
    
    13
    
    
    
    47
    
    
    
    26
    
    
    
    150
    
    
    
    (13
    )
 
 25 Agrium




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Wholesale
 In 2009, our Wholesale operations accounted for 30 percent  of Agriums consolidated  net sales, 33 percent of our gross profit
and 74 percent of total EBITDA.
 26 Agrium




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Strategic
Business Unit | WHOLESALE
 In 2009, our Wholesale unit produced 3.7 million tonnes of nitrogen, 0.9 million tonnes of
potash, 0.9 million tonnes of phosphate and 0.5 million tonnes of sulphate and other crop nutrient
products. We also marketed and distributed over 2.7 million tonnes of these products for
agricultural and industrial customers around the world through our purchase for resale business. In
2009, Agriums Wholesale operations achieved net sales of $3.0-billion and gross profits of
$642-million.
   Wholesale | Operational geography
 
 27 Agrium




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##### 



2009 Wholesale Capacity, Production and Sales
 (thousands of product tonnes)
    
    Capacity
    
    
    Production
    
    
    SalesNitrogen volumesNorth AmericaCanada
    
    
    3,345
    
    
    
    2,477
    
    
    
    1,417U.S.
    
    
    1,273
    
    
    
    678
    
    
    
    1,807International(a)
    
    
    635
    
    
    
    498
    
    
    
    542Total
    
    
    5,253
    
    
    
    3,654
    
    
    
    3,766Potash VolumesNorth AmericaCanada
    
    
    2,050
    
    
    
    875
    
    
    
    56U.S.
    
    
    
    
    
    
    
    
    
    
    411International
    
    
    
    
    
    
    
    
    
    
    296Total
    
    
    2,050
    
    
    
    875
    
    
    
    763Phosphate volumesNorth AmericaCanada
    
    
    660
    (b)
    
    
    555
    
    
    
    576U.S.
    
    
    421
    (b)
    
    
    370
    
    
    
    428International
    
    
    
    (b)
    
    
    
    
    
    
    Total
    
    
    1,081
    (b)
    
    
    925
    
    
    
    1,004Other volumesNorth AmericaCanada
    
    
    350
    
    
    
    351
    
    
    
    218U.S.
    
    
    265
    
    
    
    129
    
    
    
    283International
    
    
    
    
    
    
    
    
    
    
    66Total
    
    
    615
    
    
    
    480
    
    
    
    567
 (a)
    
    Only indicates 50 percent of Profertils capacity.(b)
    
    Capacity for SPA and MGA is
reported in cargo weight. Wholesale strategy
  28 Agrium




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Wholesale | Key developments
 1
  1
 
 
 (1)
    
    See disclosures under the heading Forward-Looking
Statements on page 93 of this MD&A 29 Agrium




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1
 Wholesale | Financial results
  Wholesale | Expenses
  
 
 (1)
    
    See disclosures under the heading Forward-Looking
Statements on page 93 of this MD&A 30 Agrium




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##### 



Wholesale Performance
 Year ended December 31(millions of U.S. dollars)
    
    2009
    
    
    2008
    
    
    2007NitrogenNet sales
    
    
    1,247
    
    
    
    1,815
    
    
    
    1,535Gross profit
    
    
    412
    
    
    
    712
    
    
    
    508PotashNet sales
    
    
    333
    
    
    
    816
    
    
    
    305Gross profit
    
    
    174
    
    
    
    632
    
    
    
    167PhosphateNet sales
    
    
    436
    
    
    
    847
    
    
    
    466Gross profit
    
    
    38
    
    
    
    421
    
    
    
    118Product purchased for resaleNet sales
    
    
    816
    
    
    
    971
    
    
    
    339Gross profit
    
    
    (37
    )
    
    
    (42
    )
    
    
    28OtherNet sales
    
    
    187
    
    
    
    237
    
    
    
    200Gross profit
    
    
    55
    
    
    
    68
    
    
    
    53Total net sales
    
    
    3,019
    
    
    
    4,686
    
    
    
    2,845Total gross profit
    
    
    642
    
    
    
    1,791
    
    
    
    874Selling expenses
    
    
    34
    
    
    
    29
    
    
    
    27General and administrative
    
    
    30
    
    
    
    24
    
    
    
    22Depreciation and amortization
    
    
    5
    
    
    
    4
    
    
    
    119Potash profit and capital taxes
    
    
    4
    
    
    
    162
    
    
    
    28Asset impairment
    
    
    
    
    
    
    87
    
    
    
    Earnings from equity investees
    
    
    (22
    )
    
    
    
    
    
    
    Other expenses
    
    
    97
    
    
    
    37
    
    
    
    11494
    
    
    
    1,448
    
    
    
    667Non-controlling interests
    
    
    (1
    )
    
    
    (30
    )
    
    
    EBIT
    
    
    495
    
    
    
    1,478
    
    
    
    667EBITDA
    
    
    607
    
    
    
    1,670
    
    
    
    786EBITDA as percent of net sales (%)
    
    
    20
    
    
    
    36
    
    
    
    28
 Nitrogen [ N ] products
    
 31 Agrium




---



##### 



Nitrogen | Financial results
 Nitrogen
gross profit
  
 32 Agrium




---



##### 



Nitrogen Performance
 Year ended December 31(millions of U.S. dollars, except as noted)
    
    2009
    
    
    2008
    
    
    2007Nitrogen domesticNet sales
    
    
    1,079
    
    
    
    1,662
    
    
    
    1,284Cost of product sold
    
    
    744
    
    
    
    1,025
    
    
    
    892Gross profit
    
    
    335
    
    
    
    637
    
    
    
    392Tonnes sold (000)
    
    
    3,224
    
    
    
    3,189
    
    
    
    3,595Selling price per tonne
    
    
    335
    
    
    
    521
    
    
    
    357Margin per tonne
    
    
    104
    
    
    
    200
    
    
    
    109Nitrogen InternationalNet sales
    
    
    168
    
    
    
    153
    
    
    
    251Cost of product sold
    
    
    91
    
    
    
    78
    
    
    
    135Gross profit
    
    
    77
    
    
    
    75
    
    
    
    116Tonnes sold (000)
    
    
    542
    
    
    
    362
    
    
    
    827Selling price per tonne
    
    
    310
    
    
    
    424
    
    
    
    304Margin per tonne
    
    
    142
    
    
    
    207
    
    
    
    140Total NitrogenNet sales
    
    
    1,247
    
    
    
    1,815
    
    
    
    1,535Cost of product sold
    
    
    835
    
    
    
    1,103
    
    
    
    1,027Gross profit
    
    
    412
    
    
    
    712
    
    
    
    508Tonnes sold (000)
    
    
    3,766
    
    
    
    3,551
    
    
    
    4,422Selling price per tonne
    
    
    331
    
    
    
    511
    
    
    
    347Cost of product sold per tonne
    
    
    222
    
    
    
    310
    
    
    
    232Margin per tonne
    
    
    109
    
    
    
    201
    
    
    
    115
 
 33 Agrium




---



##### 



Nitrogen prices
  
 Nitrogen product cost
    34 Agrium




---



##### 



Gas price and cost
      Natural gas prices: North American indices and Agrium prices
 (U.S. dollars per MMBtu)
    
    2009
    
    
    2008
    
    
    2007NYMEX
    
    
    4.03
    
    
    
    8.94
    
    
    
    6.92AECO
    
    
    3.58
    
    
    
    7.80
    
    
    
    6.11Basis
    
    
    0.45
    
    
    
    1.14
    
    
    
    0.81WholesaleAverage unhedged
    
    
    3.70
    
    
    
    7.49
    
    
    
    5.76Hedging impact
    
    
    (0.06
    )
    
    
    (0.05
    )
    
    
    0.02Overall weighted average (a)
    
    
    3.74
    
    
    
    7.44
    
    
    
    5.78
 (a)
    
    Weighted average gas price of all gas purchases, including our 50 percent
share of the Profertil facility.
 Natural gas use (BCF)
 Western
    
    
    U.S.
    
    
    International
    
    
    PotashCanada
    
    
    (Borger, TX)
    
    
    (Profertil)
    
    
    and other
    
    
    Total2009
    
    
    69
    
    
    
    15
    
    
    
    14
    
    
    
    3
    
    
    
    1012008
    
    
    73
    
    
    
    16
    
    
    
    12
    
    
    
    4
    
    
    
    1052007
    
    
    68
    
    
    
    16
    
    
    
    23
    
    
    
    3
    
    
    
    110
 
 35 Agrium




---



##### 



Sales volumes and operating rates
   Potash [ K ] products
   Potash | Financial results
 Potash gross profit
  
 36 Agrium




---



##### 



Potash Performance
 Year ended December 31(millions of U.S. dollars, except as noted)
    
    2009
    
    
    2008
    
    
    2007Potash DomesticNet sales
    
    
    213
    
    
    
    476
    
    
    
    185Cost of product sold
    
    
    112
    
    
    
    112
    
    
    
    84Gross profit
    
    
    101
    
    
    
    364
    
    
    
    101Tonnes sold (000)
    
    
    467
    
    
    
    907
    
    
    
    865Selling price per tonne
    
    
    457
    
    
    
    525
    
    
    
    214Margin per tonne
    
    
    217
    
    
    
    401
    
    
    
    117Potash InternationalNet sales
    
    
    120
    
    
    
    340
    
    
    
    120Cost of product sold
    
    
    47
    
    
    
    72
    
    
    
    54Gross profit
    
    
    73
    
    
    
    268
    
    
    
    66Tonnes sold (000)
    
    
    296
    
    
    
    779
    
    
    
    819Selling price per tonne
    
    
    404
    
    
    
    437
    
    
    
    146Margin per tonne
    
    
    247
    
    
    
    345
    
    
    
    81Total PotashNet sales
    
    
    333
    
    
    
    816
    
    
    
    305Cost of product sold
    
    
    159
    
    
    
    184
    
    
    
    138Gross profit
    
    
    174
    
    
    
    632
    
    
    
    167Tonnes sold (000)
    
    
    763
    
    
    
    1,686
    
    
    
    1,684Selling price per tonne
    
    
    436
    
    
    
    484
    
    
    
    181Cost of product sold per tonne
    
    
    208
    
    
    
    109
    
    
    
    82Margin per tonne
    
    
    228
    
    
    
    375
    
    
    
    99
 
 37 Agrium




---



##### 



Potash prices
  
 Potash product cost
   Sales volumes and operating rates
  2 2 2 (1)
 
 (1)
    
    For a full description of the assumptions and parameters applied in estimating the
potash reserves and resources, refer to Mineral Resource and Mineral Reserve Estimates- Key
Assumptions and Parameters in the Vanscoy Technical Report by A. Dave MacKintosh, P. Geo., of
ADM Consulting Limited, dated November 6, 2009, available on www.sedar.com and
www.sec.gov/edgar.html 38 Agrium




---



##### 



Phosphate [ P ] products
    Phosphate | Financial results
 Phosphate gross profit
  
 
 Phosphate Performance
 Year ended December 31(millions of U.S. dollars, except as noted)
    
    2009
    
    
    2008
    
    
    2007PhosphateNet sales
    
    
    436
    
    
    
    847
    
    
    
    466Cost of product sold
    
    
    398
    
    
    
    426
    
    
    
    348Gross profit
    
    
    38
    
    
    
    421
    
    
    
    118Tonnes sold (000)
    
    
    1,004
    
    
    
    906
    
    
    
    1,021Selling price per tonne
    
    
    434
    
    
    
    935
    
    
    
    456Cost of product sold per tonne
    
    
    396
    
    
    
    470
    
    
    
    340Margin per tonne
    
    
    38
    
    
    
    465
    
    
    
    116
 39 Agrium




---



##### 



Phosphate prices
  
 Phosphate product costs
  Sales volumes and operating rates
  
 40 Agrium




---



##### 



Other wholesale products
 ®
  Other wholesale financial results
  Other wholesale prices
  Other wholesale product cost
  Product purchased for resale products
     
 41 Agrium




---



##### 



1
 Distribution and storage
  Wholesale I Quarterly results
  
 
 (1)
    
    See disclosures under the heading Forward-Looking Statements on page 93 of this MD&A 42 Agrium




---



##### 



2009
    
    
    2008
    
    
    2007(millions of U.S. dollars, except as noted)
    
    Q4
    
    
    Q3
    
    
    Q2
    
    
    Q1
    
    
    Q4
    
    
    Q3
    
    
    Q2
    
    
    Q1
    
    
    Q4
    
    
    Q3
    
    
    Q2
    
    
    Q1Net sales  external
    
    
    621
    
    
    
    562
    
    
    
    872
    
    
    
    653
    
    
    
    857
    
    
    
    1,445
    
    
    
    1,279
    
    
    
    646
    
    
    
    814
    
    
    
    524
    
    
    
    819
    
    
    
    438Net sales  inter-segment
    
    
    95
    
    
    
    96
    
    
    
    78
    
    
    
    42
    
    
    
    125
    
    
    
    154
    
    
    
    118
    
    
    
    62
    
    
    
    94
    
    
    
    39
    
    
    
    71
    
    
    
    46Total net sales
    
    
    716
    
    
    
    658
    
    
    
    950
    
    
    
    695
    
    
    
    982
    
    
    
    1,599
    
    
    
    1,397
    
    
    
    708
    
    
    
    908
    
    
    
    563
    
    
    
    890
    
    
    
    484Cost of product sold
    
    
    534
    
    
    
    516
    
    
    
    706
    
    
    
    560
    
    
    
    578
    
    
    
    946
    
    
    
    815
    
    
    
    435
    
    
    
    565
    
    
    
    405
    
    
    
    613
    
    
    
    388Inventory and purchase commitment write-down
    
    
    2
    
    
    
    9
    
    
    
    32
    
    
    
    18
    
    
    
    121
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Gross profit
    
    
    180
    
    
    
    133
    
    
    
    212
    
    
    
    117
    
    
    
    283
    
    
    
    653
    
    
    
    582
    
    
    
    273
    
    
    
    343
    
    
    
    158
    
    
    
    277
    
    
    
    96Gross profit (%)
    
    
    25
    
    
    
    20
    
    
    
    22
    
    
    
    17
    
    
    
    29
    
    
    
    41
    
    
    
    42
    
    
    
    39
    
    
    
    38
    
    
    
    28
    
    
    
    31
    
    
    
    20NitrogenNet sales
    
    
    294
    
    
    
    260
    
    
    
    464
    
    
    
    229
    
    
    
    355
    
    
    
    498
    
    
    
    635
    
    
    
    327
    
    
    
    503
    
    
    
    311
    
    
    
    488
    
    
    
    233Cost of product sold
    
    
    199
    
    
    
    180
    
    
    
    280
    
    
    
    174
    
    
    
    219
    
    
    
    294
    
    
    
    389
    
    
    
    201
    
    
    
    292
    
    
    
    227
    
    
    
    324
    
    
    
    184Inventory and purchase commitment write-down
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Gross profit
    
    
    95
    
    
    
    80
    
    
    
    182
    
    
    
    55
    
    
    
    136
    
    
    
    204
    
    
    
    246
    
    
    
    126
    
    
    
    211
    
    
    
    84
    
    
    
    164
    
    
    
    49Tonnes sold (000)
    
    
    930
    
    
    
    919
    
    
    
    1,244
    
    
    
    673
    
    
    
    691
    
    
    
    838
    
    
    
    1,254
    
    
    
    768
    
    
    
    1,303
    
    
    
    932
    
    
    
    1,395
    
    
    
    792Selling price (per tonne)
    
    
    316
    
    
    
    283
    
    
    
    373
    
    
    
    340
    
    
    
    514
    
    
    
    594
    
    
    
    506
    
    
    
    426
    
    
    
    386
    
    
    
    334
    
    
    
    350
    
    
    
    294Margin (per tonne)
    
    
    102
    
    
    
    87
    
    
    
    146
    
    
    
    82
    
    
    
    197
    
    
    
    243
    
    
    
    196
    
    
    
    164
    
    
    
    162
    
    
    
    90
    
    
    
    118
    
    
    
    62PotashNet sales
    
    
    135
    
    
    
    109
    
    
    
    47
    
    
    
    42
    
    
    
    192
    
    
    
    249
    
    
    
    244
    
    
    
    131
    
    
    
    93
    
    
    
    65
    
    
    
    95
    
    
    
    52Cost of product sold
    
    
    61
    
    
    
    53
    
    
    
    24
    
    
    
    21
    
    
    
    33
    
    
    
    47
    
    
    
    60
    
    
    
    44
    
    
    
    36
    
    
    
    32
    
    
    
    44
    
    
    
    26Gross profit
    
    
    74
    
    
    
    56
    
    
    
    23
    
    
    
    21
    
    
    
    159
    
    
    
    202
    
    
    
    184
    
    
    
    87
    
    
    
    57
    
    
    
    33
    
    
    
    51
    
    
    
    26Tonnes sold (000)
    
    
    353
    
    
    
    273
    
    
    
    61
    
    
    
    76
    
    
    
    283
    
    
    
    380
    
    
    
    574
    
    
    
    449
    
    
    
    462
    
    
    
    354
    
    
    
    535
    
    
    
    333Selling price (per tonne)
    
    
    382
    
    
    
    399
    
    
    
    770
    
    
    
    553
    
    
    
    678
    
    
    
    655
    
    
    
    425
    
    
    
    292
    
    
    
    201
    
    
    
    184
    
    
    
    178
    
    
    
    156Margin (per tonne)
    
    
    210
    
    
    
    205
    
    
    
    377
    
    
    
    276
    
    
    
    562
    
    
    
    532
    
    
    
    321
    
    
    
    194
    
    
    
    123
    
    
    
    93
    
    
    
    95
    
    
    
    78PhosphateNet sales
    
    
    91
    
    
    
    114
    
    
    
    118
    
    
    
    113
    
    
    
    153
    
    
    
    317
    
    
    
    235
    
    
    
    142
    
    
    
    139
    
    
    
    108
    
    
    
    145
    
    
    
    74Cost of product sold
    
    
    90
    
    
    
    114
    
    
    
    105
    
    
    
    87
    
    
    
    67
    
    
    
    122
    
    
    
    139
    
    
    
    98
    
    
    
    92
    
    
    
    82
    
    
    
    110
    
    
    
    64Inventory and purchase commitment write-down
    
    
    
    
    
    
    1
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Gross profit
    
    
    1
    
    
    
    (1
    )
    
    
    12
    
    
    
    26
    
    
    
    86
    
    
    
    195
    
    
    
    96
    
    
    
    44
    
    
    
    47
    
    
    
    26
    
    
    
    35
    
    
    
    10Tonnes sold (000)
    
    
    232
    
    
    
    310
    
    
    
    260
    
    
    
    202
    
    
    
    137
    
    
    
    240
    
    
    
    297
    
    
    
    232
    
    
    
    266
    
    
    
    223
    
    
    
    335
    
    
    
    197Selling price (per tonne)
    
    
    392
    
    
    
    368
    
    
    
    454
    
    
    
    559
    
    
    
    1,117
    
    
    
    1,321
    
    
    
    791
    
    
    
    612
    
    
    
    523
    
    
    
    484
    
    
    
    433
    
    
    
    376Margin (per tonne)
    
    
    4
    
    
    
    (3
    )
    
    
    46
    
    
    
    129
    
    
    
    628
    
    
    
    813
    
    
    
    323
    
    
    
    190
    
    
    
    177
    
    
    
    117
    
    
    
    104
    
    
    
    51OtherNet sales
    
    
    35
    
    
    
    26
    
    
    
    81
    
    
    
    45
    
    
    
    31
    
    
    
    67
    
    
    
    82
    
    
    
    57
    
    
    
    52
    
    
    
    34
    
    
    
    68
    
    
    
    46Cost of product sold
    
    
    27
    
    
    
    14
    
    
    
    58
    
    
    
    32
    
    
    
    21
    
    
    
    46
    
    
    
    55
    
    
    
    47
    
    
    
    38
    
    
    
    21
    
    
    
    47
    
    
    
    41Inventory and purchase commitment write-down
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Gross profit
    
    
    8
    
    
    
    11
    
    
    
    23
    
    
    
    13
    
    
    
    10
    
    
    
    21
    
    
    
    27
    
    
    
    10
    
    
    
    14
    
    
    
    13
    
    
    
    21
    
    
    
    5Tonnes sold (000)
    
    
    146
    
    
    
    100
    
    
    
    176
    
    
    
    145
    
    
    
    69
    
    
    
    144
    
    
    
    202
    
    
    
    168
    
    
    
    185
    
    
    
    132
    
    
    
    236
    
    
    
    219Product purchased for resaleNet sales
    
    
    161
    
    
    
    149
    
    
    
    240
    
    
    
    266
    
    
    
    251
    
    
    
    468
    
    
    
    201
    
    
    
    51
    
    
    
    121
    
    
    
    45
    
    
    
    94
    
    
    
    79Cost of product sold
    
    
    157
    
    
    
    155
    
    
    
    239
    
    
    
    246
    
    
    
    238
    
    
    
    437
    
    
    
    172
    
    
    
    45
    
    
    
    107
    
    
    
    43
    
    
    
    88
    
    
    
    73Inventory and purchase commitment write-down
    
    
    2
    
    
    
    7
    
    
    
    29
    
    
    
    18
    
    
    
    121
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Gross profit
    
    
    2
    
    
    
    (13
    )
    
    
    (28
    )
    
    
    2
    
    
    
    (108
    )
    
    
    31
    
    
    
    29
    
    
    
    6
    
    
    
    14
    
    
    
    2
    
    
    
    6
    
    
    
    6Tonnes sold (000)
    
    
    598
    
    
    
    510
    
    
    
    681
    
    
    
    883
    
    
    
    388
    
    
    
    905
    
    
    
    376
    
    
    
    112
    
    
    
    276
    
    
    
    121
    
    
    
    310
    
    
    
    261Selling price (per tonne)
    
    
    269
    
    
    
    292
    
    
    
    352
    
    
    
    301
    
    
    
    647
    
    
    
    517
    
    
    
    535
    
    
    
    455
    
    
    
    438
    
    
    
    372
    
    
    
    303
    
    
    
    303Margin (per tonne)
    
    
    3
    
    
    
    (25
    )
    
    
    (41
    )
    
    
    2
    
    
    
    (278
    )
    
    
    34
    
    
    
    77
    
    
    
    54
    
    
    
    51
    
    
    
    17
    
    
    
    19
    
    
    
    23EBIT
    
    
    140
    
    
    
    83
    
    
    
    215
    
    
    
    57
    
    
    
    106
    
    
    
    412
    
    
    
    647
    
    
    
    313
    
    
    
    277
    
    
    
    96
    
    
    
    232
    
    
    
    62EBITDA
    
    
    169
    
    
    
    115
    
    
    
    244
    
    
    
    79
    
    
    
    214
    
    
    
    439
    
    
    
    682
    
    
    
    335
    
    
    
    307
    
    
    
    126
    
    
    
    261
    
    
    
    92
 43 Agrium




---



##### 



Advanced Technologies
 Our range of AAT products are cost effective and environmentally friendly by design.
 44 Agrium




---



##### 



Strategic Business Unit| ADVANCED TECHNOLOGIES
 AAT is focused on new product innovation and growth as it develops and markets
controlled-release fertilizer technologies that offer customers economic value and environmental
advantages. These products are used in broad-based agriculture, specialty agriculture,
professional turf, horticulture, and consumer lawn and garden markets worldwide.
 
  Advanced Technologies | Strategy and key developments
   1 |
    
    Growing the base North American
business;2 |
    
    Developing new products to support
existing and new market opportunities; and,3 |
    
    Expanding internationally with current
and future technologies.
  1
  Advanced Technologies | Products and services
   
 (1)
    
    See disclosures under the heading Forward-Looking Statements on page 93 of this MD&A 
 45 Agrium




---



##### 



1 | Crop Nutrient Technologies, including ESN (Agriculture)
  2 | Professional Product (Turf and Ornamental)
    (BULLET)
    
    Agriculture| A polymer-coated, environmentally sensitive, controlled-release fertilizer
that provides both environmental and economic benefits for broad acre crops (ESN®);(BULLET)
    
    Specialty Agriculture| Products designed specifically for high-value crops such as
strawberries and other food crops (Polyon® and Duration®);(BULLET)
    
    Professional Turf| Branded specialty fertilizer products with slow-release or
controlled-release technologies suitable for golf course turf, lawn care and sport field
applications (XCU, Polyon®, Duration®, Nutralene®, Nitroform®, IB Nitrogen®) and
associated branded professional products (ProTurf®, Nu-Gro®) in Canada;(BULLET)
    
    Horticulture| Products and blends designed specifically for the nursery market
(Polyon®, Duration®, Nitroform®); and,(BULLET)
    
    Consumer Lawn and Garden| (Polyon®, Duration®, Nutralene®).
 46 Agrium




---



##### 



Advanced Technologies | Financial results
  
 Advanced Technologies | Expenses
  
 47 Agrium




---



##### 



Advanced Technologies Financial Results
 Year ended December 31(millions of U.S. dollars)
    
    2009
    
    
    2008
    
    
    2007Turf and OrnamentalNet sales
    
    
    222
    
    
    
    239
    
    
    
    189Cost of product sold
    
    
    186
    
    
    
    194
    
    
    
    149Inventory write-down
    
    
    2
    
    
    
    2
    
    
    
    Gross Profit
    
    
    34
    
    
    
    43
    
    
    
    40AgricultureNet sales
    
    
    82
    
    
    
    113
    
    
    
    60Cost of product sold
    
    
    62
    
    
    
    77
    
    
    
    45Gross Profit
    
    
    20
    
    
    
    36
    
    
    
    15Total net sales
    
    
    304
    
    
    
    352
    
    
    
    249Total cost of product sold
    
    
    248
    
    
    
    271
    
    
    
    194Inventory write-down
    
    
    2
    
    
    
    2
    
    
    
    Total gross profit
    
    
    54
    
    
    
    79
    
    
    
    55Selling expenses
    
    
    13
    
    
    
    6
    
    
    
    10General and administrative
    
    
    36
    
    
    
    31
    
    
    
    18Depreciation and amortization
    
    
    8
    
    
    
    10
    
    
    
    16Earnings from equity investees
    
    
    (5
    )
    
    
    (4
    )
    
    
    Other income
    
    
    (1
    )
    
    
    3
    
    
    
    (2
    )EBIT
    
    
    3
    
    
    
    33
    
    
    
    13EBITDA
    
    
    22
    
    
    
    50
    
    
    
    29EDITDA as percent of net sales (%)
    
    
    7
    
    
    
    14
    
    
    
    12
 
 
 Advanced Technologies |
Quarterly earnings
  48 Agrium




---



##### 



Advanced Technologies Quarterly Results
 2009

    
    2008

    
    2007(millions of U.S. dollars)
    
    Q4
    
    
    Q3
    
    
    Q2
    
    
    Q1
    
    
    Q4
    
    
    Q3
    
    
    Q2
    
    
    Q1
    
    
    Q4
    
    
    Q3
    
    
    Q2
    
    
    Q1Net sales  external
    
    
    85
    
    
    
    55
    
    
    
    71
    
    
    
    50
    
    
    
    63
    
    
    
    75
    
    
    
    87
    
    
    
    68
    
    
    
    58
    
    
    
    45
    
    
    
    68
    
    
    
    46Net sales  
inter-segment
    
    
    10
    
    
    
    5
    
    
    
    11
    
    
    
    17
    
    
    
    13
    
    
    
    15
    
    
    
    20
    
    
    
    11
    
    
    
    12
    
    
    
    1
    
    
    
    13
    
    
    
    6Total net sales
    
    
    95
    
    
    
    60
    
    
    
    82
    
    
    
    67
    
    
    
    76
    
    
    
    90
    
    
    
    107
    
    
    
    79
    
    
    
    70
    
    
    
    46
    
    
    
    81
    
    
    
    52Cost of product sold
    
    
    77
    
    
    
    49
    
    
    
    65
    
    
    
    57
    
    
    
    57
    
    
    
    65
    
    
    
    87
    
    
    
    62
    
    
    
    55
    
    
    
    35
    
    
    
    63
    
    
    
    41Inventory 
write-down
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Gross profit
    
    
    16
    
    
    
    11
    
    
    
    17
    
    
    
    10
    
    
    
    17
    
    
    
    25
    
    
    
    20
    
    
    
    17
    
    
    
    15
    
    
    
    11
    
    
    
    18
    
    
    
    11Gross profit (%)
    
    
    17
    
    
    
    18
    
    
    
    21
    
    
    
    15
    
    
    
    22
    
    
    
    28
    
    
    
    19
    
    
    
    22
    
    
    
    21
    
    
    
    24
    
    
    
    22
    
    
    
    21EBIT
    
    
    (6
    )
    
    
    
    
    
    
    8
    
    
    
    1
    
    
    
    6
    
    
    
    10
    
    
    
    11
    
    
    
    6
    
    
    
    (2
    )
    
    
    3
    
    
    
    7
    
    
    
    5EBITDA
    
    
    
    
    
    
    4
    
    
    
    12
    
    
    
    6
    
    
    
    8
    
    
    
    17
    
    
    
    15
    
    
    
    10
    
    
    
    4
    
    
    
    7
    
    
    
    10
    
    
    
    8
 
 Other business unit
     Key business drivers
   1  | Global Grain Prices
 (BULLET)
    
    Higher grain prices typically motivate growers to both expand seeded
acreage and increase crop input applications to optimize yieldsoutcomes
that benefit all of Agriums business units; and,(BULLET)
    
    Growing populations and rising global Gross Domestic Product (GDP)
that leads to improved diets among the rapidly growing Asian middle-class,
generally correlated with stronger commodity prices, apply upward pressure
to grain consumption and prices, which helps support demand for all crop
inputs (crop protection products, nutrients, seed and related services).
 
 49 Agrium




---



##### 



2 | Supply and Demand Balance for the Major Crop Inputs
 (BULLET)
    
    When crop acreage and crop prices increase, crop input application rates and overall
crop input demand is supported;(BULLET)
    
    Weather and pest pressure factors can impact crop input demand on a short term and
regional basis;(BULLET)
    
    New production facilities and/or facility closures can influence global production
capacity and, by extension, the global supply of each nutrient and/or input product; and,(BULLET)
    
    Supply is also tied to global operating rates, which can be affected by the price of the
crop nutrient relative to the cost of production. Cost of production is influenced by the
price and availability of key raw materials (particularly natural gas prices or the cost of
sulfur for phosphate production), including the impact of changes in currency valuation.
 3 | Government Policies or Actions
 (BULLET)
    
    Changes in tax structure, regulatory bodies, environmental compliance and other
interventions can positively or negatively impact the cost of doing business in a given
region of the world;(BULLET)
    
    Government actions that support a countrys agriculture sector (for example, introducing
a program that provides additional credit to growers or supports specific grower practices)
can impact crop input demand; and,(BULLET)
    
    A change in government policy pertaining to imports, exports or regulated pricing of
crop inputs can influence supply, demand and pricing for these products.
 4 | Global and Regional Gross Domestic Product
   
 50 Agrium




---



##### 



Outlook
 global factors and a growing demand
 51 Agrium




---



##### 



Agriculture
  Crop protection products
  Seed and agricultural services
  Crop nutrients
  Nitrogen
  
 52 Agrium




---



##### 



Phosphate
   Potash
  53 Agrium




---



##### 



Keybusiness sensitivities
  ConsolidatedChange
    
    
    Consolidated
    
    
    Net Earnings(millions of U.S. dollars, except as noted)
    
    in Factor
    
    
    EBIT Impact
    
    
    Impact(f)Wholesale Margins(a)(b)Nitrogen (c)
    
    $
    10.00
    
    
    
    40
    
    
    
    30Potash (d)
    
    $
    10.00
    
    
    
    16
    
    
    
    12Phosphate
    
    $
    10.00
    
    
    
    10
    
    
    
    7Product purchased for resale
    
    $
    10.00
    
    
    
    30
    
    
    
    22Retail Margins(e)Crop Nutrients
    
    
    1.00
    %
    
    
    29
    
    
    
    21Crop Protection Products
    
    
    1.00
    %
    
    
    26
    
    
    
    19Seed
    
    
    1.00
    %
    
    
    8
    
    
    
    6Exchange Rate from CAD to USD
    
    $
    0.01
    
    
    
    11
    
    
    
    8Exchange Rate from Argentine Peso to USD
    
    0.3 Pesos
    
    
    
    1
    
    
    
    1Stock-based compensation expense
    
    $1.00 change in share price
    
    
    
    2.6
    
    
    
    1.8
 
 (a)
    
    Change in factor is per metric tonne.(b)
    
    The sensitivity for natural gas price is excluded from this table as changes in gas price
may be offset by nitrogen pricing. However, without any offset in pricing, the sensitivity
to earnings for a $0.50/MMBtu change in NYMEX gas prices is $42-million in EBIT and
$31-million in net earnings. The sensitivity assumes no change to the price spread between
U.S. and Alberta gas or nitrogen prices and is before the impact of our natural gas economic
hedge activity.(c)
    
    The sensitivity to nitrogen margins is exclusive of the natural gas sensitivity described in
footnote (b) above.(d)
    
    Potash sensitivity does not include potash profit and capital tax.(e)
    
    Change in factor is gross profit as a percentage of net sales.(f)
    
    To convert impact to a fully diluted EPS basis, divide the net earnings impact by the
weighted-average number of outstanding shares (157 million shares as of December 31, 2009).  Margins
 Wholesale
  Retail
  54 Agrium




---



##### 



Advanced Technologies
  Foreign Exchange
  
 Consolidated performance
 Consolidated Results of Operations
 (millions of U.S. dollars, except per share amounts)
    
    2009
    
    
    2008
    
    
    2007Net sales
    
    
    9,129
    
    
    
    10,031
    
    
    
    5,270Cost of product sold
    
    
    7,123
    
    
    
    6,592
    
    
    
    3,672Inventory and purchase commitment write-down
    
    
    63
    
    
    
    216
    
    
    
    Gross profit
    
    
    1,943
    
    
    
    3,223
    
    
    
    1,598ExpensesSelling
    
    
    918
    
    
    
    815
    
    
    
    471General and administrative
    
    
    202
    
    
    
    192
    
    
    
    125Depreciation and amortization
    
    
    124
    
    
    
    110
    
    
    
    173Potash profit and capital tax
    
    
    4
    
    
    
    162
    
    
    
    28Earnings from equity investees
    
    
    (27
    )
    
    
    (4
    )
    
    
    Asset impairment
    
    
    
    
    
    
    87
    
    
    
    Other expenses
    
    
    142
    
    
    
    (125
    )
    
    
    89Earnings before interest,
income taxes and non-controlling interests
    
    
    580
    
    
    
    1,986
    
    
    
    712Interest on long-term debt
    
    
    91
    
    
    
    82
    
    
    
    52Other interest
    
    
    19
    
    
    
    23
    
    
    
    18Earnings before
income taxes and non-controlling interests
    
    
    470
    
    
    
    1,881
    
    
    
    642Income taxes
    
    
    105
    
    
    
    589
    
    
    
    204Non-controlling interests
    
    
    (1
    )
    
    
    (30
    )
    
    
    (3
    )Net earnings
    
    
    366
    
    
    
    1,322
    
    
    
    441Earnings per shareBasic
    
    
    2.33
    
    
    
    8.39
    
    
    
    3.28Diluted
    
    
    2.33
    
    
    
    8.34
    
    
    
    3.25
  55 Agrium




---



##### 



Gross profit
  (BULLET)
    
    Lower selling prices for most products;(BULLET)
    
    Significantly lower potash sales volumes; and,(BULLET)
    
    Increase in Retails cost of fertilizer resulting from higher priced inventories purchased
at the end of 2008 being sold into a declining price environment in the first half of 2009.
   (BULLET)
    
    Significantly higher global nutrient prices and margins for nitrogen, potash and phosphate
in the first three quarters of 2008 reflecting a tight supply and demand balance for
nutrients; and,(BULLET)
    
    Higher Retail gross profit due to the UAP acquisition and strong margins across all Retail
products, supported by strong grain prices in the first three quarters of 2008.
  Selling expenses
  General and administrative expenses
  Depreciation and amortization
  Asset impairment
  56 Agrium




---



##### 



Potash profit and capital tax
  Other expenses (income)
 (millions of U.S. dollars)
    
    2009
    
    
    2008
    
    
    2007Interest income
    
    
    (56
    )
    
    
    (57
    )
    
    
    (30
    )Stock-based compensation
    
    
    73
    
    
    
    (25
    )
    
    
    113Environmental remediation and accretion of asset
retirement obligations
    
    
    9
    
    
    
    15
    
    
    
    5Realized and unrealized losses on derivative financial
instruments
    
    
    84
    
    
    
    
    
    
    
    20Foreign exchange loss (gain)
    
    
    17
    
    
    
    (119
    )
    
    
    (41
    )Bad debt expense
    
    
    33
    
    
    
    23
    
    
    
    7Gain on disposal of property, plant and equipment, and
investments
    
    
    (6
    )
    
    
    (8
    )
    
    
    (4
    )Other
    
    
    (12
    )
    
    
    46
    
    
    
    19142
    
    
    
    (125
    )
    
    
    89
    Interest on long-term debt
   57 Agrium




---



##### 



Income taxes
   Non-controlling interests
  Quarterly Results of Operations
  (millions ofU.S. dollarsexcept per
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cash
    
    
    
    
    
    
    Long-termshare
    
    
    
    
    
    Net
    
    
    Earnings
    
    
    Per Share
    
    
    Total
    
    
    and Cash
    
    
    Dividends
    
    
    Financialamounts)
    
    Net Sales
    
    
    Earnings
    
    
    Basic
    
    
    Diluted
    
    
    Assets
    
    
    Equivalents
    
    
    Declared
    
    
    Liabilities2009Q1
    
    
    1,753
    
    
    
    (60
    )
    
    
    (0.38
    )
    
    
    (0.38
    )
    
    
    10,301
    
    
    
    86
    
    
    
    
    
    
    
    1,961Q2
    
    
    4,090
    
    
    
    370
    
    
    
    2.36
    
    
    
    2.35
    
    
    
    9,688
    
    
    
    251
    
    
    
    9
    
    
    
    1,976Q3
    
    
    1,844
    
    
    
    26
    
    
    
    0.16
    
    
    
    0.16
    
    
    
    9,023
    
    
    
    225
    
    
    
    
    
    
    
    2,020Q4
    
    
    1,442
    
    
    
    30
    
    
    
    0.19
    
    
    
    0.19
    
    
    
    9,785
    
    
    
    933
    
    
    
    8
    
    
    
    2,080Year
    
    
    9,129
    
    
    
    366
    
    
    
    2.33
    
    
    
    2.33
    
    
    
    9,785
    
    
    
    933
    
    
    
    17
    
    
    
    2,0802008Q1
    
    
    1,107
    
    
    
    195
    
    
    
    1.24
    
    
    
    1.23
    
    
    
    6,689
    
    
    
    1,762
    
    
    
    
    
    
    
    1,213Q2
    
    
    3,870
    
    
    
    636
    
    
    
    4.03
    
    
    
    4.00
    
    
    
    9,939
    
    
    
    178
    
    
    
    9
    
    
    
    1,964Q3
    
    
    3,113
    
    
    
    367
    
    
    
    2.32
    
    
    
    2.31
    
    
    
    10,355
    
    
    
    208
    
    
    
    
    
    
    
    1,995Q4
    
    
    1,941
    
    
    
    124
    
    
    
    0.79
    
    
    
    0.79
    
    
    
    9,837
    
    
    
    374
    
    
    
    8
    
    
    
    1,950Year
    
    
    10,031
    
    
    
    1,322
    
    
    
    8.39
    
    
    
    8.34
    
    
    
    9,837
    
    
    
    374
    
    
    
    17
    
    
    
    1,9502007Q1
    
    
    821
    
    
    
    (11
    )
    
    
    (0.08
    )
    
    
    (0.08
    )
    
    
    3,560
    
    
    
    45
    
    
    
    
    
    
    
    938Q2
    
    
    2,034
    
    
    
    229
    
    
    
    1.71
    
    
    
    1.70
    
    
    
    3,615
    
    
    
    55
    
    
    
    7
    
    
    
    952Q3
    
    
    989
    
    
    
    51
    
    
    
    0.38
    
    
    
    0.38
    
    
    
    4,022
    
    
    
    41
    
    
    
    
    
    
    
    980Q4
    
    
    1,426
    
    
    
    172
    
    
    
    1.25
    
    
    
    1.24
    
    
    
    5,832
    
    
    
    1,509
    
    
    
    9
    
    
    
    1,141Year
    
    
    5,270
    
    
    
    441
    
    
    
    3.28
    
    
    
    3.25
    
    
    
    5,832
    
    
    
    1,509
    
    
    
    16
    
    
    
    1,141
 58 Agrium




---



##### 



2009
 (BULLET)
    
    We had losses on derivative financial instruments of $69-million and $35-million in the first
and fourth quarter, respectively, and gains of $15-million and $5-million in the second and third
quarter, respectively;
 (BULLET)
    
    Due to the increase in our share price in the first half of 2008 and significant decline in
the second half of 2008, in 2009 stock-based compensation expense decreased quarter over quarter by
$111-million in the second quarter, increased $124-million in the third quarter, and increased
$69-million in the fourth quarter;
 (BULLET)
    
    We had quarter-over-quarter increases of $99-million and $61-million in Retails selling
expense in the first and second quarter, respectively, primarily as a result of the inclusion of
the UAP business for the full year; and,
 (BULLET)
    
    We had write-downs of $18-million, $32-million, $9-million, and $2-million to Wholesale
inventory in the first, second, third, and fourth quarter, respectively.
 2008
 (BULLET)
    
    The UAP acquisition contributed $257-million, $191-million, and $57-million to our gross
profit in the second, third, and fourth quarters, respectively;
 (BULLET)
    
    We had quarter-over-quarter increases of $93-million, $132-million, and $115-million in
Retails selling expense in the second, third, and fourth quarter, respectively, primarily as a
result of the addition of the UAP business in the second quarter of 2008;
 (BULLET)
    
    We had write-downs of $216-million to Wholesale inventory and Retail inventory and purchase
commitments in the fourth quarter;
 (BULLET)
    
    We recorded a $45-million impairment charge net of non-controlling interests to our
$295-million EAgrium investment in the fourth quarter of 2008 as a result of adjusting the carrying
value of Agriums Egypt operations to fair value;
 (BULLET)
    
    Given the significant changes in our share price throughout 2008, stock-based compensation
expense increased quarter over quarter by $103-million in the second quarter, and decreased quarter
over quarter by $34-million, $122-million and $86-million in the first, third, and fourth quarter,
respectively;
 (BULLET)
    
    We had gains on derivative financial instruments of $67-million and $191-million in the first
and second quarter, respectively, and losses of $171-million and $87-million in the third and
fourth quarter, respectively;
 (BULLET)
    
    We had quarter-over-quarter increases in potash profit and capital tax of $44-million,
$51-million and $28-million in the second, third and fourth quarter, respectively, driven by
increased potash profit margins; and,
 (BULLET)
    
    As a result of the weakening of the Canadian dollar during the fourth quarter, we experienced
significant foreign exchange gains of $98-million.
 2007
 (BULLET)
    
    Given the significant increase in our share price in 2007, stock-based compensation expense
increased quarter over quarter by $22-million, $9-million, $13-million and $39-million in the
first, second, third and fourth quarter, respectively;
 (BULLET)
    
    In the third quarter we had a loss on derivative financial instruments of $20-million; and,
 (BULLET)
    
    As a result of the strengthening Canadian dollar, we experienced significant foreign exchange
gains in the second and third quarters of 2007 of $17-million and $21-million, respectively.
 59 Agrium




---



##### 



Non-GAAP Disclosure
    (millions of U.S. dollars
    
    
    
    
    
    
    
    
    
    Advancedexcept per share amounts)
    
    Retail
    
    
    Wholesale
    
    
    Technologies
    
    
    Other
    
    
    Consolidated2009EBITDA
    
    
    266
    
    
    
    607
    
    
    
    22
    
    
    
    (72
    )
    
    
    823Depreciation and amortization
    
    
    103
    
    
    
    112
    
    
    
    19
    
    
    
    8
    
    
    
    242EBIT
    
    
    163
    
    
    
    495
    
    
    
    3
    
    
    
    (80
    )
    
    
    581Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (110
    )Income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (105
    )Net earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    366Diluted earnings per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2.332008EBITDA
    
    
    560
    
    
    
    1,670
    
    
    
    50
    
    
    
    41
    
    
    
    2,321Depreciation and amortization
    
    
    80
    
    
    
    105
    
    
    
    17
    
    
    
    16
    
    
    
    218Asset impairment
    
    
    
    
    
    
    87
    
    
    
    
    
    
    
    
    
    
    
    87EBIT
    
    
    480
    
    
    
    1,478
    
    
    
    33
    
    
    
    25
    
    
    
    2,016Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (105
    )Income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (589
    )Net earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,322Diluted earnings per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8.342007EBITDA
    
    
    210
    
    
    
    786
    
    
    
    29
    
    
    
    (137
    )
    
    
    888Depreciation and amortization
    
    
    33
    
    
    
    119
    
    
    
    16
    
    
    
    5
    
    
    
    173EBIT
    
    
    177
    
    
    
    667
    
    
    
    13
    
    
    
    (142
    )
    
    
    715Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (70
    )Income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (204
    )Net earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    441Diluted earnings per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3.25
 60 Agrium




---



##### 



Financial condition
 2009 vs.(millions of U.S. dollars)
    
    2009
    
    
    2008
    
    
    2008Assets
    
    
    9,785
    
    
    
    9,837
    
    
    
    (52
    )Liabilities
    
    
    5,193
    
    
    
    5,727
    
    
    
    (534
    )Shareholders equity
    
    
    4,592
    
    
    
    4,110
    
    
    
    482
 Assets
          Liabilities
    61 Agrium




---



##### 



Working capital
  (millions of U.S. dollars)
    
    2009
    
    
    2008Current assets
    
    
    5,120
    
    
    
    5,138Current liabilities
    
    
    2,581
    
    
    
    2,810Working capital
    
    
    2,539
    
    
    
    2,328
 Shareholders equity
  
 Liquidity and capital resources
  Sources and Uses of Cash
 (millions of U.S. dollars)
    
    2009
    
    
    2008
    
    
    2007Cash provided by operating activities
    
    
    1,404
    
    
    
    1,044
    
    
    
    494Cash used in investing activities
    
    
    (513
    )
    
    
    (3,375
    )
    
    
    (561
    )Cash (used in) provided by financing activities
    
    
    (315
    )
    
    
    1,196
    
    
    
    1,467Increase (decrease) in cash and cash equivalents
    
    
    576
    
    
    
    (1,135
    )
    
    
    1,400
 Cash provided by operating activities
   62 Agrium




---



##### 



Non-cash working capital
   Cash used in investing activities
  Business acquisitions
   Capital expenditures
 (millions of U.S. dollars)
    
    2009
    
    
    2008
    
    
    2007Sustaining capital
    
    
    162
    
    
    
    145
    
    
    
    104Investment capital
    
    
    151
    
    
    
    361
    
    
    
    350Total
    
    
    313
    
    
    
    506
    
    
    
    454
   Cash provided by financing activities
  Common shares
   63 Agrium




---



##### 



Bank indebtedness
   Long-term debt
  Dividends
  Non-controlling interests
  Cash Position
  Proposed Acquisition of CF Industries Holdings, Inc.
    64 Agrium




---



##### 



Debt Instruments, Capital Management and Ratings
 Debt instruments
 2009
    
    
    2008Total
    
    
    Unutilized
    
    
    Utilized
    
    
    UtilizedBank indebtednessNorth American revolving credit facilities
expiring 2010
    
    
    60
    
    
    
    60
    
    
    
    
    
    
    
    North American revolving credit facilities
expiring 2012 (a)(b)
    
    
    775
    
    
    
    775
    
    
    
    
    
    
    
    300European credit facilities
expiring 2010 to 2012 (c)
    
    
    450
    
    
    
    376
    
    
    
    74
    
    
    
    120South American credit facilities
expiring 2010 to 2012 (d)
    
    
    121
    
    
    
    89
    
    
    
    32
    
    
    
    70Egypt bridge loan (e)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    120Total bank indebtedness
    
    
    1,406
    
    
    
    1,300
    
    
    
    106
    
    
    
    610
 Long-term debt
    
    2009
    
    
    2008UnsecuredFloating rate bank loans due May 5, 2013 (f)
    
    
    460
    
    
    
    460Floating rate bank loans due November 16, 2012
    
    
    26
    
    
    
    6.75% debentures due January 15, 2019 (f)(g)
    
    
    500
    
    
    
    5007.125% debentures due May 23, 2036 (g)
    
    
    300
    
    
    
    3007.7% debentures due February 1, 2017 (g)
    
    
    100
    
    
    
    1007.8% debentures due February 1, 2027 (g)
    
    
    125
    
    
    
    1258.25% debentures due February 15, 2011 (g)
    
    
    125
    
    
    
    125SecuredOther
    
    
    73
    
    
    
    241,709
    
    
    
    1,634Unamortized transaction costs
    
    
    (10
    )
    
    
    (12
    )1,699
    
    
    
    1,622
 
 (a)
    
    On May 5, 2008, we increased our syndicated revolving credit facility to $775-million.(b)
    
    We had issued letters of credit under our revolving credit facilities. Outstanding letters of
credit issued as at December 31, 2009 were $74-million, reducing credit available under the
facilities to $701-million.(c)
    
    We have access to additional credit facilities as a result of the acquisition of 70 percent of
CMF on July 8, 2008. Of the total, $137-million is secured at December 31, 2009. Inventory,
accounts receivable and other items with a total carrying value of $87-million are pledged as
security for the utilized balance. The utilized balance includes Euro-denominated debt of
$31-million. In December 2009, we entered into a multi-currency revolving facility for
Euro-denominated debt of $172-million to replace existing credit facilities. The facility expires
in December 2011.(d)
    
    For the facilities utilized, nil is denominated in Argentine peso at December 31, 2009. Of the
total, $105-million is uncommitted and $28-million of the uncommitted portion has been utilized.(e)
    
    Effective January 26, 2009, MOPCO assumed this debt.(f)
    
    Pursuant to the UAP acquisition, we borrowed $1.0-billion in 2008. We repaid $497-million on
September 11, 2008. Cash of $58-million was paid in October 2008. The remaining balance of
$460-million is repayable on May 5, 2013. On September 8, 2008, we issued $500-million of 6.75%
debentures due January 15, 2019.(g)
    
    Debentures contain various provisions that allow us to redeem debt prior to maturity, at our
option, at specified prices. 65 Agrium




---



##### 



Capital Management
   2009
    
    
    2008
    
    
    2007Net debt to net debt plus equity (%)
    
    
    16
    
    
    
    31
    
    
    
    (22
    )EBITDA interest coverage (multiple)
    
    
    7.5
    
    
    
    22.1
    
    
    
    12.7
   Debt ratings
  Moodys

    
    Standard
    
    DBRSInvestors Service

    
    & Poors

    
    LimitedSenior Unsecured Notes and Debentures
    
    Baa2
    
    BBB
    
    BBBUnder reviewUnder review 
    
    
    
    
    
    with developingRatings Outlook
    
    negative watch
    
    Stable
    
    implications
   66 Agrium




---



##### 



Future Cash Requirements
 Contractual obligations and other commitments
  Payment due by periodLess than
    
    
    One to
    
    
    Four to
    
    
    After(millions of U.S. dollars)
    
    one year
    
    
    three years
    
    
    five years
    
    
    five years
    
    
    TotalLong-term debt (a)
    
    
    92
    
    
    
    342
    
    
    
    612
    
    
    
    1,764
    
    
    
    2,810Operating leases
    
    
    125
    
    
    
    54
    
    
    
    25
    
    
    
    29
    
    
    
    233Purchase obligations
    
    
    578
    
    
    
    173
    
    
    
    93
    
    
    
    92
    
    
    
    936Asset retirement obligations
    
    
    9
    
    
    
    18
    
    
    
    7
    
    
    
    626
    
    
    
    660Environmental remediation liabilities
    
    
    22
    
    
    
    37
    
    
    
    20
    
    
    
    61
    
    
    
    140Total
    
    
    826
    
    
    
    624
    
    
    
    757
    
    
    
    2,572
    
    
    
    4,779
 
 (a)
    
    Figures include interest payments. Long-term debt
  Operating leases
  Purchase obligations
   Asset retirement obligations
  Environmental remediation liabilities
  67 Agrium




---



##### 



Future Capital Expenditures
 1
 1
 (BULLET)
    
    Spending at our Wholesale plant sites in order to ensure efficient, reliable and safe
operations of facilities, including building replacement and maintenance at various Wholesale
operations;
 (BULLET)
    
    Spending for North American and South American Retail operations; and,
 (BULLET)
    
    Projects at our Vanscoy potash facility.
  (BULLET)
    
    Projects to develop and increase capacity at our Vanscoy potash facility;
 (BULLET)
    
    Spending for Retail expansion opportunities; and,
 (BULLET)
    
    Additional investment in Advanced Technologies.
 1
 
 Outstanding share data
  Number of Shares

    
    Market ValueCommon shares
    
    157 million
    
    $10,184 million
  
 Off balance sheet arrangements
 Sale of accounts receivable
   Guarantees
   68 Agrium




---



##### 



Financial instruments
 Risk Management
 1
  Derivative financial instruments
    
    RisksCommodityCurrency
    
    
    price
    
    
    Credit
    
    
    LiquidityForeign currency forward and option contracts
    
    
    X
    
    
    
    
    
    
    
    X
    
    
    
    XNatural gas forward, swap and option contracts,
nutrient swap contracts and heat
rate swap contracts
    
    
    
    
    
    
    X
    
    
    
    X
    
    
    
    X
 Currency risk
  Foreign exchange derivative financial instruments outstanding
 2009
    
    
    2008Notional
    
    
    
    
    
    
    Fair value
    
    
    Notional
    
    
    
    
    
    
    Fair value(millions,
    
    
    
    
    
    
    assets
    
    
    (millions,
    
    
    
    
    
    
    assetsSell/Buy
    
    buy currency)
    
    
    Maturities
    
    
    (liabilities)
    
    
    buy currency)
    
    
    Maturities
    
    
    (liabilities)USD/CAD forwards
    
    
    CAD 46
    
    
    
    2010
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    USD/EUR forwards
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    EUR 15
    
    
    
    2009
    
    
    
    EUR/USD forwards
    
    
    USD 9
    

    
    
    2010
    
    
    
    
    
    
    
    USD 33
    
    
    
    2009
    
    
    
    GBP/USD forwards
    
    

    USD 2
    

    
    
    2010
    
    
    
    
    
    
    

    USD 5
    

    
    
    2009
    
    
    
    USD/CAD put options purchased
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    CAD 195
    
    
    
    2009
    
    
    
    2USD/CAD call options sold
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    CAD 206
    
    
    
    2009
    
    
    
    (20
    )1
    
    
    
    
    
    
    
    
    
    
    
    (18
    )
    69 Agrium




---



##### 



Commodity price risk
   Natural gas, power and nutrient derivative financial instruments outstanding
 2009
    
    2008Fair value
    
    
    
    
    
    
    
    
    
    
    Fair valueassets
    
    
    
    
    
    
    
    
    
    
    assetsNotional
    
    
    Maturities
    
    
    (liabilities)
    
    
    Notional
    
    
    Maturities
    
    
    (liabilities)Natural gas (BCF)NYMEX contractsSwaps
    
    
    67
    
    
    
    2010 to 2013
    
    
    
    (35
    )
    
    
    33
    
    
    
    2009 to 2013
    
    
    
    (61
    )Collars
(swap with options)
    
    
    23
    
    
    
    2010 to 2012
    
    
    
    5
    
    
    
    25
    
    
    
    2009 to 2012
    
    
    
    13Call spreads
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    2009
    
    
    
    2El Paso swaps
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    2009
    
    
    
    (2
    )AECO contractsSwaps
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    2009
    
    
    
    (1
    )Options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13
    
    
    
    2009
    
    
    
    (9
    )90
    
    
    
    
    
    
    
    (30
    )
    
    
    78
    
    
    
    
    
    
    
    (58
    )Power  Swaps(GWh)
    
    
    552
    
    
    
    2010 to 2013
    
    
    
    (2
    )
    
    
    666
    
    
    
    2009 to 2012
    
    
    
    6Nutrient  Urea swaps(short tons)
    
    
    24,500
    
    
    
    2010
    
    
    
    1
    
    
    
    18,000
    
    
    
    2009
    
    
    
    (2
    )(31
    )
    
    
    
    
    
    
    
    
    
    
    (54
    )
 Interest rate risk
   Credit risk
   70 Agrium




---



##### 



Liquidity risk
   Fair Value
  2009
    
    
    2008Fair value of long-term debt
    
    
    1,805
    
    
    
    1,578Carrying value of long-term debt
    
    
    1,709
    
    
    
    1,634Weighted-average effective interest rate on long-term debt (%)
    
    
    6
    
    
    
    6
 Fair value of financial instruments
 2009
    
    
    2008Cash and cash equivalents
    
    
    933
    
    
    
    374Accounts receivableForeign exchange derivative financial instruments
    
    
    1
    
    
    
    Gas, power and nutrient derivative financial instruments
    
    
    5
    
    
    
    5Marketable securitiesInvestment in CF (available for sale)
    
    
    113
    
    
    
    Other (held for trading)
    
    
    1
    
    
    
    Other assetsGas, power and nutrient derivative financial instruments
    
    
    3
    
    
    
    16Other (available for sale)
    
    
    25
    
    
    
    271,081
    
    
    
    422Accounts payable and accrued liabilitiesForeign exchange derivative financial instruments
    
    
    
    
    
    
    (18
    )Gas, power and nutrient derivative financial instruments
    
    
    (14
    )
    
    
    (64
    )Other liabilitiesGas, power and nutrient derivative financial instruments
    
    
    (25
    )
    
    
    (11
    )(39
    )
    
    
    (93
    )
 71 Agrium




---



##### 



2009 Fourth quarter
 Managements Discussion and Analysis
 2009 Fourth Quarter Operating Results
 Net Earnings
   (BULLET)
    
    An $87-million write-down in our EAgrium investment in the fourth quarter of 2008 (net to
Agrium of $45-million after elimination of non-controlling interests);
 (BULLET)
    
    A $41-million reduction in potash profit taxes; and,
 (BULLET)
    
    A $22-million reduction in selling expenses.
   Three months ended December 31,
    
    2009
    
    
    2008Stock-based compensation
    
    
    34
    
    
    
    (35
    )Loss on derivative financial instruments
    
    
    35
    
    
    
    87Interest income
    
    
    (11
    )
    
    
    (11
    )Foreign exchange (gain) loss
    
    
    
    
    
    
    (98
    )Other
    
    
    (2
    )
    
    
    1856
    
    
    
    (39
    )
  Business Segment Performance
 Retail
   72 Agrium




---



##### 



Wholesale
   73 Agrium




---



##### 



Advanced Technologies
   Other
  74 Agrium




---



##### 



Accounting estimates and
 new accounting standards
   Critical Accounting Estimates
  (BULLET)
    
    It requires significant assumptions about matters that are inherently highly uncertain at the
time the accounting estimate is made; and,
 (BULLET)
    
    Different estimates that we could have used in the current period, or changes in accounting
estimates that are reasonably likely to occur from period to period, would have a material impact
on our financial condition or consolidated results of operations.
   Collectibility of accounts receivable
  Inventory valuation
  Property, plant and equipment
  75 Agrium




---



##### 



Depreciation expense
  Intangibles
  Impairment of long-lived assets
  Fair value of financial assets and liabilities
  Goodwill
  76 Agrium




---



##### 



Environmental remediation liabilities and asset retirement obligations
  Employee future benefits
  Stock-based compensation
  Rebates
   77 Agrium




---



##### 



Income Taxes
  New Accounting Standards
  Accounting Standards and Policy Changes Not Yet Implemented
  International Financial Reporting Standards (IFRS)
   78 Agrium




---



##### 



The table below outlines our key IFRS transition plan activities, major milestones and
timelines and progress to date.
 IFRS TransitionKey Elements
    
    Milestones/Timelines
    
    Project StatusAccounting
policies: (BULLET)   
Analyze of accounting policy
differences (BULLET)   
Select IFRS accounting policies and determine IFRS 1
elections (BULLET)   
Develop IFRS financial statement format with appropriate
disclosures (BULLET)   
Quantify IFRS impacts on transition
    
    (BULLET)    Accounting policies and draft
IFRS financial statement format with disclosures
approved by senior management and in for review
to the Audit Committee Q2,
2010 (BULLET)   
Final quantification of IFRS transition effects
for 2010 and comparative year Q1, 2011
    
    (BULLET)    Preliminary decisions on accounting
policies, including IFRS 1 optional exemptions, have
been made (BULLET)   
Preliminary drafting of IFRS financial statement
format with disclosures has been
completed
(BULLET)    Quantification of
IFRS transition effects are identified as each work
package progressesInformation
systems: (BULLET)   
Analyze of changes necessary to enable
recording/tracking/reporting of financial information
required under all applicable GAAP for the parallel
reporting
year(s) (BULLET)   
Develop and implement solution
    
    (BULLET)    Information system solutions
in place for parallel reporting year for all applicable GAAP, 2010
    
    (BULLET)    Identifying and implementing dual
reporting solutions for parallel reporting year.
Monitoring and adjusting changes as work packages
progressControl
environment: (BULLET)   
Where there are changes to accounting
policies/procedures, assess both the internal controls
over financial reporting, the disclosure controls and
procedures for design and effectiveness and implement
appropriate changes
    
    (BULLET)    Testing of internal controls
for 2010 comparatives completed by Q1 2011
    
    (BULLET)    Preliminary analysis indicates that
we are expecting minimal changes to our internal
control processesTraining
requirements: (BULLET)   
Develop strategic training plan for all levels and
departments of the
organization (BULLET)   
Deliver targeted training to key employees where roles
are impacted by IFRS
transition (BULLET)   
Communicate accounting policy changes and resulting
impacts across
organization (BULLET)   
Communicate transition project plan progress both
internally and externally
    
    (BULLET)    Appropriate level of IFRS
financial reporting expertise achieved by
changeover
date (BULLET)    Communication
of the effects of IFRS transition on the
organization both internally and externally by
changeover date
    
    (BULLET)    Directors and Officers received IFRS
training Q4,
2009 (BULLET)   
Second wave of IFRS immersion training for key finance
and accounting employees Q1,
2010 (BULLET)   
Targeted training continues to those impacted
employees as each work package
progresses (BULLET)   
Quarterly communications will continue on the IFRS
transition project progress across the organization
and externally through MD&A disclosuresBusiness
impacts: (BULLET)   
Analysis of business activities that may be impacted by
GAAP measures, such as debt covenants and compensation
and identification of solutions where
necessary (BULLET)   
Analysis of tax impacts on transition to IFRS
    
    (BULLET)    Applicable negotiation of
covenants and compensation arrangements by end
of
2010 (BULLET)   
Identification of significant tax impacts Q2,
2010
    
    (BULLET)    Preliminary analysis of debt
covenants and compensation arrangements indicate that
the impacts of IFRS transition are not expected to be
material (BULLET)   
Continuing to identify tax impacts as each work
package progresses
 79 Agrium




---



##### 



Impairment
   Provisions (includes asset retirement obligations)
   Employee benefits
   Share-based payments
  Income taxes
   80 Agrium




---



##### 



First-time adoption of IFRS
 IFRS 1  First Time Adoption of
International Financial Reporting Standards.
 
 Enterprise risk management
   (BULLET)
    
    Our Board of Directors has oversight responsibility for risk. This includes understanding
the material risks of the business and the related mitigation strategies, as well as taking
reasonable steps to ensure that management has an effective risk management process in place
to identify, understand and appropriately manage the risks of the business;(BULLET)
    
    In addition to the oversight responsibility of the Board of Directors, individual
Committees of the Board have the mandate to oversee specific risks relevant to their areas;(BULLET)
    
    Risks that are unique to our separate strategic business units are managed under the
jurisdiction of the Presidents of those business units. Corporate risks fall under the
jurisdiction of Corporate Functional Heads; and,(BULLET)
    
    Agrium has appointed a Chief Risk Officer (CRO). The CRO is responsible for maintaining
an effective Enterprise Risk Management Process (ERM Process). The CRO monitors current
developments in risk management practices, drives improvements in Agriums Risk Management
philosophy, program and policies, and supports development of a best practice risk
management culture.
 Enterprise Risk Management (ERM) Process
   81 Agrium




---



##### 



Ranking risks
   Agriums risk matrix
 More Severe
 
 Less Severe
  Frequency Rankings
  Consequence Rankings
  Limitations
  82 Agrium




---



##### 



Business Risks
  Unplanned plant downtime
   (BULLET)
    
    Production Excellence program, including: operational standards that govern our
manufacturing processes; engineering standards for manufacturing processes and capital
projects; and, programs aimed at continuous improvement in our production processes, such as
root cause analysis for production challenges;(BULLET)
    
    Equipment integrity programs, including regular equipment inspections and a five-year
planned capital and maintenance program;(BULLET)
    
    Environment, Health, Safety & Security (EHS&S) Excellence program, including:
well-established process safety standards, policies and programs; defined expectations and
policy for managing process change in facilities; structured EHS&S risk management program
under which we analyze our manufacturing processes for process hazards and recommend and
implement improvements as warranted; and, structured environmental management and security
standards, policies, and programs;(BULLET)
    
    Mandatory training programs for Operations, Maintenance, and Technical personnel to ensure
appropriate skills and training are in place to maintain and operate the facilities;(BULLET)
    
    Audit programs for EHS&S, operational standards, risk management, and process reliability
programs. The audit programs assess compliance with our established policies and procedures,
and also seek to identify opportunities for continuous improvement; and,(BULLET)
    
    Sound project management processes to help ensure capital projects are executed to the
appropriate design standards and completed on schedule and budget.
 Product price and margin
      83 Agrium




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##### 



(BULLET)
    
    The broad product diversity of our Wholesale business (nitrogen, potash, and phosphate)
reduces the impact of poor supply and demand fundamentals that can be experienced by a
particular product category;(BULLET)
    
    The geographic diversity of our Wholesale customer base (North America, South America, and
International) reduces the impact of poor economic, crop or weather conditions in any one
region;(BULLET)
    
    Our extensive distribution and storage capability can help reduce Wholesale variability
that may arise from a downturn in demand in a localized area;(BULLET)
    
    Our commitment to operational excellence helps ensure rigorous management of operational
risks that could compromise production efficiencies or increase operating costs. This
provides us with a relatively stable and predictable production/supply base that helps to
mitigate Wholesale earnings volatility;(BULLET)
    
    Our Wholesale customers have diverse end uses for our products (agricultural and
industrial), with some of our industrial sales prices based on a gas-indexed cost plus margin
basis;(BULLET)
    
    Within the Wholesale business, we make prepaid forward sales, and we may lock in nitrogen
margins on manufactured product using forward gas price derivative financial instruments;
and,(BULLET)
    
    Within our Retail business, we have further mitigating factors including:
 (BULLET)
    
    Product and service diversity (fertilizer, chemical, seed and application services); and,(BULLET)
    
    Geographic diversity that helps spread risk associated with regional weather and
crops (broad regional U.S. and South American markets).
 Raw materials
     (BULLET)
    
    The Profertil nitrogen facility has gas contracts that are not tied to North American gas prices;(BULLET)
    
    We use derivative financial instruments and other contractual arrangements to manage the risk of gas price volatility;(BULLET)
    
    We use a variety of tools in an effort to mitigate our risk and stabilize our earnings,
including derivative financial instruments, swaps, forward sales, prepayments, 90 day rolling
forecast, and rigorous market analysis;(BULLET)
    
    Raw materials and energy are procured on a competitive basis employing a mix of long-term,
short-term and spot contracts with a variety of suppliers, consistent with the Corporate
Procurement Policy and Practices;(BULLET)
    
    Our practice of adjusting our production rates and sourcing supply for purchased product
when conditions dictate reduces our exposure to high natural gas costs;
 84 Agrium




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##### 



(BULLET)
    
    The majority of our nitrogen sold in North America is produced in Western Canada, which
has lower-cost gas than the average cost for most of our competitors who produce and sell
elsewhere in North America;(BULLET)
    
    In the long-term, our goal is to increase our nitrogen capacity in areas where long-term
supplies of lower-cost natural gas are available;(BULLET)
    
    For mining, we have medium-term highly competitive contracts in place with suppliers and
maintain high mining standards, employing the latest technologies and techniques; and,(BULLET)
    
    As sulfur is a primary raw material used in manufacturing of phosphate fertilizers, the
use of contract pricing based on less volatile market indexes has been implemented to
mitigate the market volatility. From time to time, we also utilize long-term supply
contracts.
 Foreign exchange
   (BULLET)
    
    Exposure to currency fluctuations is partially offset through our currency hedging programs.
 Transportation
   (BULLET)
    
    We develop detailed forecasts of product movement needs for each facility and mode of transport;(BULLET)
    
    We develop a strategic plan, with specific options, to help mitigate the potential for
increased cost or the reduced deliverability of ammonia and other products over the
medium-term, and continue to work with industry associations to address these issues;(BULLET)
    
    We continually develop and maintain mutually beneficial long-term relationships with major
carriers;(BULLET)
    
    Most of our production facilities are serviced through multiple carriers and modes of
transportation, providing us with important shipping options; and,(BULLET)
    
    We maintain multiple supply points through our extensive distribution network.
 Human resources
   (BULLET)
    
    We have a structured annual succession planning process focused on actively accelerating
the development of leaders through targeted developmental opportunities;(BULLET)
    
    We are developing a company-wide Leadership Development Framework and tools to enhance
leadership capabilities;(BULLET)
    
    We conduct a continuous review and analysis of our total compensation program to ensure
our offering to employees is competitive in the markets in which we compete for talent;
 85 Agrium




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##### 



(BULLET)
    
    We track and monitor key workforce metrics to identify high risk areas. Examples
include voluntary resignation, key employee segments with higher attrition, workforce
demographics to forecast retirements and employee exit trends; and,(BULLET)
    
    We benchmark our human resources programs, policies and practices externally to align with
our business strategies and ensure competitiveness.
 Country
   (BULLET)
    
    We seek to partner with reputable firms with experience or significant presence in foreign
countries in which we operate or intend to operate;(BULLET)
    
    We hire personnel located in the foreign country or who have operating experience in the foreign country;(BULLET)
    
    We obtain non-recourse project financing with consortiums of international banks where appropriate;(BULLET)
    
    We maintain excess cash related to international operations in U.S. dollars to the extent practicable; and,(BULLET)
    
    We increase our required investment return to reflect our perceived risk of conducting business in specific countries.
 Business acquisitions and expansions
   (BULLET)
    
    We have developed a detailed and systematic project review process to analyze the rewards
and risks of all significant investment projects, including acquisitions and development
expansions. Each major investment project must pass a gate process where it is reviewed by
the Investment Strategy Committee to ensure it passes key criteria such as strategic fit,
economic return or our hurdle rate and various competitive factors. As important is that all
material risks are identified. For each risk, mitigants are reviewed to ensure that all risks
are appropriately managed;(BULLET)
    
    As part of this process, we assign specific areas of responsibility to our key personnel
with experience in those areas who are then held accountable for results;(BULLET)
    
    We conduct extensive due diligence reviews and financial modeling analyses; and,(BULLET)
    
    We complete periodic assessments of previous acquisitions to update and enhance current
and future strategies in the spirit of continuous improvement and to ensure we remain a
disciplined investor.
 Legislative risk
  86 Agrium




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##### 



(BULLET)
    
    We work closely with industry associations and government agencies and officials to seek to
understand and influence legislative trends in a positive way. Ongoing, close working
relationships with industry associations, government agencies and law enforcement ensure
best practices and that new regulations are known, understood and met in a timely fashion;
and,(BULLET)
    
    We maintain contact with a broad network of local and international advisors to ensure we
are aware of legislative trends and in compliance with current requirements.
 Weather
   (BULLET)
    
    Our extensive distribution and storage system allows us to move products to locations where
demand is strongest. However, our ability to react is limited by the shortness of the peak
selling season, and margins on these sales in markets further from our production facilities
will be lower due to higher transport costs and potentially lower sales prices;(BULLET)
    
    Geographic diversity of our Wholesale markets and our Retail facilities affords some
protection against regional weather patterns;(BULLET)
    
    We also mitigate our exposure to weather-related risk through our sales to industrial
customers, which are not dependent on regional weather factors. Industrial sales represent
approximately 15 percent of our Wholesale net sales; and,(BULLET)
    
    Agronomic advances in agricultural products and/or equipment can mitigate the risk of
weather-related demand reduction by shortening the time required for application of product,
or widening the window in which product can be applied.
 Credit and liquidity
  87 Agrium




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##### 



Counterparty
   (BULLET)
    
    We have established credit procedures that include assessment of a counterpartys
credit-worthiness and adherence to credit limits;(BULLET)
    
    For derivative financial instruments, we have established counterparty trading limits and
netting agreements, and a policy of entering into derivative contracts with counterparties
that have investment grade or higher credit ratings; and,(BULLET)
    
    In our Retail business unit, we service customers in diverse geographic markets, reducing
the impact of poor economic or crop conditions in any particular region.
 Environment, health, safety and security
   (BULLET)
    
    Agrium has well-defined EHS&S programs and processes, committed leadership, clear lines of
reporting and accountability, and a responsible workforce. In addition to an overall
corporate EHS&S group, we have established an EHS&S organization in each business unit. This
has enabled Agrium to focus on both oversight and governance as well as increasing management
involvement in all of its operations and activities;(BULLET)
    
    Agrium stewards to an integrated EHS&S management system which includes a policy and system
documenting minimum EHS&S management and performance expectations applicable to our
facilities worldwide. Agriums business units and, where appropriate, individual facilities
augment these requirements with system controls necessary to manage the risks unique to those
operations. At the operations level, program best practices are in place to direct the
desired outcome;(BULLET)
    
    Agrium has an increasingly well-defined set of EHS&S Key Performance Indicators, annual goals
and systems that are cascaded from the Chief Executive Officer throughout the organization;(BULLET)
    
    Continuous improvement and performance monitoring are effected through four technical
committees, two management committees and the Board EHS&S Committee. These committees meet at
least quarterly to monitor performance against annual and longer-term performance goals, to
discuss plans and strategies for addressing weaknesses in our processes, and to evaluate
opportunities for improving our systems;(BULLET)
    
    Technical support and compliance assurance is managed at three levels within the organization.
Facilities are staffed with technical specialists necessary to support day-to-day operations.
The business units are staffed with broader technical expertise to support business unit
programs. Business unit personnel also conduct regular, rigorous compliance and systems audits
of all locations. The Corporate staff is responsible for maintaining integrated systems,
performance monitoring and business unit systems compliance assurance;(BULLET)
    
    Ongoing, close working relationships with industry associations, government agencies and law
enforcement ensure best practices, and that other risk management strategies and new
regulations are known, understood and met in a timely fashion; and,(BULLET)
    
    Annually, we review our EHS&S Policy for relevancy and modify it as appropriate.
 88 Agrium




---



##### 



Environmental protection requirements
     Contingent environmental liabilities
 United States Environmental Protection Agency phosphate industry
initiative
    89 Agrium




---



##### 



Legacy environmental remediation activities: Idaho mining properties
   Legacy environmental remediation activities: Manitoba mining properties
     Climate change and greenhouse gas issues
  2 2
 2 2
 90 Agrium




---



##### 



(BULLET)
    
    We track our annual air emissions and have proactively undertaken projects designed to
improve plant energy efficiencies and reduce emissions; and,(BULLET)
    
    We have taken, and will continue to take, a leadership role in the fertilizer industrys
negotiations with governments on fair and equitable air emission reduction targets and a
pragmatic and realistic compliance system that preserves the global competitiveness of the
industry.
 2
 2 2
 2 2 2
 91 Agrium




---



##### 



Controls and procedures
        92 Agrium




---



##### 



Forward-looking statements
   Forward-looking statements
    
    Key assumptions
    
    Most relevant risk factorsSynergies to be
achieved on the UAP
acquisition 1
    
    (BULLET)   Retail business conditions are assumed to be within
normal parameters with respect to prices, margins,
product availability, and supplier agreements for our
major products.Synergies to be
achieved on the
proposed CF acquisition
2
    
    (BULLET)   CFs acceptance of Agriums proposal and the entering
into of a definitive agreement to effect the proposed
transaction.(BULLET)   Closing the proposed transaction.(BULLET)   Agriums ability to successfully integrate within
expected time frames and costs.Construction of MOPCOs
additional urea trains
    
    (BULLET)   The two new plants will
be constructed as
planned.
    
    (BULLET)   Urea prices fall below
where the plants are
economical.(BULLET)   Egypt political risk
including approval of
required permits.Brownfield expansion at our Vanscoy, Saskatchewan potash mine,
including estimated capacity increase
    
    (BULLET)   The expansion will
proceed as planned.
    
    (BULLET)   Potash prices fall to a
point where the
expansion is
uneconomic/base
business profitability
falls such that we
cannot fund the cost of
the expansion from
operating cash flow.Carbon capture and
storage project
progressing as planned
    
    (BULLET)   Design completed by end
of 2010.
    
    (BULLET)   Carbon capture and
storage funding not
received from Alberta
Government.(BULLET)   Startup by end of 2012.(BULLET)   Upgrader projects
(specifically NorthWest
Upgrader) cancelled or
delayed.(BULLET)   Issues with
Engineering/Procurement
or
Construction of
facility or the
pipeline.
 93 Agrium




---



##### 



Forward-looking statements
    
    Key assumptions
    
    Most relevant risk factorsAbility to sustain projected
potash production with
existing reserves
    
    (BULLET)   Potash reserves are
accessible and of
sufficient quality
to provide the
required ore for
long-term
production.
    
    (BULLET)   Potash  flooding
and/or poor ground
conditions limit
access to major
sections of the ore
body or results in
poor ore quality.(BULLET)   Crop prices remain
at current levels.
    
    (BULLET)   Major drop in
grower demand or
fertilizer prices
drop from current
levels.Purchase for resale business
returning to more normal
profit level in 2010
    
    (BULLET)   The high priced
inventories from
2008 have been
worked through and
a return to normal
purchasing
practices by our
customers on a
global basis.
    
    (BULLET)   Major drop in
grower demand or
fertilizer prices
decline for an
extended period of
time from current
levels.AATs construction of a new
ESN facility at New Madrid, MO
and ability to expand the
facilitys capacity
    
    (BULLET)   AAT will be able to
purchase urea at or
below NOLA prices.
    
    (BULLET)   Introduction of new
technology into the
market.(BULLET)   Location in the
Corn Belt will
provide logistical
benefits.
    
    (BULLET)   Impact of weather
conditions on
demand.(BULLET)   The increased
yields and
environmental
benefits of ESN
will justify
premium purchase
price over other
nitrogen sources.
    
    (BULLET)   Managing the
commodity cycle of
urea.2010 capital spending program 3
    
    (BULLET)   We believe we will have sufficient financial
resources to fund our expected capital
program.(BULLET)   The level of sustaining and investment
capital may vary significantly depending on
corporate priorities as the year progresses
and based on changes in the rate of inflation
or engineering costs.Ability to finance announced
projects
    
    (BULLET)   We will be able to
utilize our
available credit
facilities or
access capital
markets for
additional sources
of financing.
    
    (BULLET)   There can be no
assurance that we
will be able to
utilize our credit
facilities or
access capital
markets.
 
 1.
    
    The purpose of this particular financial outlook is to communicate our current expectation of
the impact that the UAP acquisition may have on future results of operations. Readers are
cautioned that it may not be appropriate for other purposes.2.
    
    The purpose of this particular financial outlook is to communicate our current expectation of
the impact that the proposed CF acquisition may have on future results of operations. Readers
are cautioned that it may not be appropriate for other purposes.3.
    
    The purpose of this particular financial outlook is to assist readers in assessing our
liquidity and capital resources. Readers are cautioned that it may not be appropriate for
other purposes.
  (BULLET)
    
    Grain and nutrient benchmark prices in 2010 are expected to remain above historic levels, with
significantly less price volatility in 2010 than in 2009;
 (BULLET)
    
    Crop nutrient, crop protection and seed markets are expected to return to more normal volumes
in 2010 compared to 2009, and price volatility for the major retail crop input products is also
expected to return to a more normal range in 2010; and,
 (BULLET)
    
    High operating rates are expected for the majority of our facilities in 2010, with the
exception of routinely scheduled turnarounds at several plants.
 94 Agrium




---



##### 



(BULLET)
    
    General economic, market, business and weather conditions, including global agricultural
supply/demand factors and crop price levels; global and regional supply/demand factors impacting
the crop input application season and the price of crop nutrients and raw materials/feedstock;
availability of credit; and access to capital markets;
 (BULLET)
    
    Changes in government policies and legislation regarding agriculture, safety, environment,
greenhouse gas and others, including potential imposition of changes to price controls on crop
nutrients in certain markets;
 (BULLET)
    
    Actions by competitors and others that include changes to industry capacity, utilization rates
and product pricing; performance by customers, suppliers and counterparties to financial
instruments; potential for expansion plans to be delayed; and ability to transport or deliver
production to markets;
 (BULLET)
    
    Changes in margins and/or levels of supplier rebates for major crop inputs such as crop
protection products, nutrients and seed, as well as crop input prices declining below cost in
inventory between the time of purchase and sales;
 (BULLET)
    
    General operating risks associated with investment in foreign jurisdictions; the level and
effectiveness of future capital expenditures; reliability of performance of existing capital
assets; changes in capital markets and availability of credit; and fluctuations in foreign exchange
and tax rates in the jurisdictions in which we operate;
 (BULLET)
    
    Future operating rates, production costs and sustaining capital of our facilities; unexpected
costs from present and discontinued mining operations and/or labor disruptions; changes to timing,
construction cost and performance of other parties; and political risks associated with our
interest in MOPCO, Argentine Profertil nitrogen facilities, and South American retail operations;
 (BULLET)
    
    Strategic risks including our ability to effectively implement our business strategy and our
risk mitigation strategies, including hedging and insurance; our ability to close pending and
proposed acquisitions as anticipated and to integrate and achieve synergies from any assets we may
acquire within the time or performance expected of those assets; technological changes; and other
factors; and,
 (BULLET)
    
    Risks associated with our proposed acquisition of CF or any other proposed or completed
business acquisitions, include the inability to successfully integrate the acquisition or if such
integration proves more difficult, time-consuming or costly than expected. Other risks of the
proposed CF acquisition include CFs failure to accept Agriums proposal and enter into a
definitive agreement to effect the transaction; the failure of CF stockholders to elect Agriums
nominees as directors of CF at its 2010 annual stockholder meeting; that the costs of integration
in the event that the acquisition is completed are higher than expected; the increased indebtedness
that we would incur or assume as a result of the acquisition; the risks associated with our
inability to obtain access to CFs non-public information and the cooperation of CF management; the
possibility that the expected combination benefits and synergies and costs savings from the
Agrium/CF transaction may not be fully realized or realized within the expected time frame, which
could be impacted by future levels of crop nutrient prices and volumes as well as raw material
cost; and the potential for disruption from the proposed transaction to make it more difficult to
maintain relationships with customers, employees and suppliers.
 95 Agrium