EXHIBIT 99.3

AGRIUM INC.

2012

AUDITED ANNUAL FINANCIAL

STATEMENTS AND NOTES



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LOGO

Financial

Statements

& Notes

LOGO

February 22, 2013





TABLE OF CONTENTS



|    |  |                                                 |  |                                       
|--- |  | ----------------------------------------------- |  | --------------------------------------
|88  |  | Consolidated Statements of Operations          
|89  |  | Consolidated Statements of Comprehensive Income
|90  |  | Consolidated Statements of Cash Flows          
|91  |  | Consolidated Balance Sheets                    
|92  |  | Consolidated Statements of Shareholders Equity
|93  |  | Notes to the Consolidated Financial Statements 
|93  |  | 1.                                              |  | Corporate Information                 
|93  |  | 2.                                              |  | Significant Accounting Policies       
|104 |  | 3.                                              |  | Business Acquisitions                 
|106 |  | 4.                                              |  | Discontinued Operations               
|106 |  | 5.                                              |  | Expenses                              
|107 |  | 6.                                              |  | Finance Costs                         
|107 |  | 7.                                              |  | Income Taxes                          
|108 |  | 8.                                              |  | Earnings per Share                    
|108 |  | 9.                                              |  | Cash Flow Information                 
|109 |  | 10.                                             |  | Accounts Receivable                   
|109 |  | 11.                                             |  | Inventories                           
|110 |  | 12.                                             |  | Property, Plant and Equipment         
|111 |  | 13.                                             |  | Intangibles and Goodwill              
|112 |  | 14.                                             |  | Investments in Associates             
|113 |  | 15.                                             |  | Interests in Joint Ventures           
|114 |  | 16.                                             |  | Other Assets                          
|114 |  | 17.                                             |  | Debt                                  
|115 |  | 18.                                             |  | Accounts Payable                      
|115 |  | 19.                                             |  | Post-employment Benefits              
|118 |  | 20.                                             |  | Other Provisions                      
|118 |  | 21.                                             |  | Other Liabilities                     
|118 |  | 22.                                             |  | Share-based Payments                  
|122 |  | 23.                                             |  | Financial Instruments                 
|128 |  | 24.                                             |  | Commitments                           
|129 |  | 25.                                             |  | Contingent Liabilities                
|131 |  | 26.                                             |  | Accumulated Other Comprehensive Income
|131 |  | 27.                                             |  | Capital Management                    
|132 |  | 28.                                             |  | Operating Segments                    



|   |  |                                                             
|-- |  | ------------------------------------------------------------
|84 |  | CONSOLIDATED FINANCIAL STATEMENTS  AGRIUM 2012 ANNUAL REPORT



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FINANCIAL STATEMENTS AND NOTES





FINANCIAL REPORTING RESPONSIBILITIES

The audited consolidated financial
statements and all information contained in this annual report are the responsibility of management, and the audited consolidated financial statements are approved by the Board of Directors of the Company. The consolidated financial statements have
been prepared by management and are presented fairly in accordance with accounting principles generally accepted in Canada and reflect managements best estimates and judgments based on currently available information. The Company has
established an internal audit program and accounting and reporting systems supported by internal controls designed to safeguard assets from loss or unauthorized use and ensure the accuracy of the financial records. The financial information
presented throughout this annual report is consistent with the consolidated financial statements. KPMG LLP, an independent registered public accounting firm, has been appointed by the shareholders as external auditors of the Company. The Reports of
Independent Registered Public Accounting Firm to the Shareholders and Board, which describe the scope of their examination and express their opinion, are included in this annual report.

The Audit Committee of the Board, whose members are independent of management, meets at least five times a year with management, the internal auditors and the external auditors to oversee the discharge of
the responsibilities of the respective parties. The Audit Committee reviews the independence of the external auditors, pre-approves audit and permitted non-audit services and reviews the consolidated financial statements and other financial
disclosure documents before they are presented to the Board for approval.

MANAGEMENTS REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING

Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined
in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended. Internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and preparation of
financial statements for external purposes in accordance with generally accepted accounting principles.

Under the supervision and with the
participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the design and effectiveness of our internal control over financial reporting as of the end of the fiscal year covered
by this report based on the framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control  Integrated Framework. Based on this evaluation, management concluded that as of
December 31, 2012 the Company did maintain effective internal control over financial reporting.

The effectiveness of internal control over
financial reporting as of December 31, 2012 was audited by KPMG LLP, an independent registered public accounting firm, as stated in their report which is included in this 2012 Annual Report to Shareholders.



|                                    |  |  |  |                                                   
|----------------------------------- |  |  |  | --------------------------------------------------
|LOGO                                |  |  |  | LOGO                                              
|                                    |  | 
|MICHAEL M. WILSON                   |  |  |  | STEPHEN G. DYER                                   
|                                    |  | 
|President & Chief Executive Officer |  |  |  | Executive Vice President & Chief Financial Officer
|                                    |  | 
|Calgary, Canada                     |  |  |  |                                                   
|February 22, 2013                   |  |  |  |                                                   



|                                                             |  |   
|------------------------------------------------------------ |  | --
|AGRIUM 2012 ANNUAL REPORT  CONSOLIDATED FINANCIAL STATEMENTS |  | 85



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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF AGRIUM INC.

We have audited Agrium
Inc.s internal control over financial reporting as of December 31, 2012, based on criteria established in Internal Control  Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO). Agrium Inc.s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying
Managements Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Companys internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial
reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we
considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A companys internal
control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles. A companys internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions
and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that
receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.

Because of its
inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of
changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Agrium Inc. maintained,
in all material respects, effective internal control over financial reporting as of December 31, 2012, based on criteria established in Internal Control  Integrated Framework issued by the Committee of Sponsoring Organizations of
the Treadway Commission.

We also have audited, in accordance with the Canadian generally accepted auditing standards and the standards of the
Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Agrium Inc. as of December 31, 2012 and December 31, 2011, and the related consolidated statements of operations, comprehensive income, cash
flows and shareholders equity for the years then ended, and our report dated February 22, 2013 expressed an unmodified (unqualified) opinion on those consolidated financial statements.



|                     
|---------------------
|LOGO                 
|                     
|CHARTERED ACCOUNTANTS
|                     
|February 22, 2013    
|Calgary, Canada      



|   |  |                                                             
|-- |  | ------------------------------------------------------------
|86 |  | CONSOLIDATED FINANCIAL STATEMENTS  AGRIUM 2012 ANNUAL REPORT



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INDEPENDENT AUDITORS REPORT OF REGISTERED PUBLIC ACCOUNTING FIRM





TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF AGRIUM INC.

We have audited the
accompanying consolidated financial statements of Agrium Inc., which comprise the consolidated balance sheets as at December 31, 2012 and December 31, 2011, the consolidated statements of operations, comprehensive income, cash flows and
shareholders equity for the years then ended, and notes, comprising a summary of significant accounting policies and other explanatory information.

MANAGEMENTS RESPONSIBILITY FOR THE CONSOLIDATED FINANCIAL STATEMENTS

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial
Reporting Standards as issued by the International Accounting Standards Board, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.

AUDITORS RESPONSIBILITY

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with
Canadian generally accepted auditing standards and the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable
assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to
obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the consolidated financial
statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entitys preparation and fair presentation of the consolidated financial statements in order to design audit procedures
that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the
consolidated financial statements.

We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a
basis for our audit opinion.

OPINION

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of Agrium Inc. as at December 31, 2012 and December 31, 2011, and
its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

OTHER MATTER

We also have
audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Agrium Inc.s internal control over financial reporting as of December 31, 2012, based on the criteria established in Internal
Control  Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated February 22, 2013 expressed an unmodified (unqualified) opinion on the effectiveness of Agrium
Inc.s internal control over financial reporting.



|                     
|---------------------
|LOGO                 
|                     
|CHARTERED ACCOUNTANTS
|                     
|February 22, 2013    
|Calgary, Canada      



|                                                             |  |   
|------------------------------------------------------------ |  | --
|AGRIUM 2012 ANNUAL REPORT  CONSOLIDATED FINANCIAL STATEMENTS |  | 87



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CONSOLIDATED STATEMENTS OF OPERATIONS







|                                                                              |  |      |        |   |      |  |        |  
|----------------------------------------------------------------------------- |  | ---- | ------ | - | ---- |  | ------ | -
|Years ended December 31,
(millions of U.S. dollars, except per share amounts) |  | 2012 |        |   | 2011 | 
|Sales                                                                         |  |      | 16,686 |   |      |  | 15,470 |  
|Cost of product sold(note 11)                                                 |  |      | 12,192 |   |      |  | 11,137 |  
|Gross profit                                                                  |  |      | 4,494  |   |      |  | 4,333  |  
|Expenses                                                                      |  |      |        |   |      |  |        |  
|Selling                                                                       |  |      | 1,751  |   |      |  | 1,673  |  
|General and administrative                                                    |  |      | 472    |   |      |  | 335    |  
|Earnings from associates                                                      |  |      | (13    | ) |      |  | (21    | )
|Other expenses (note 5)                                                       |  |      | 62     |   |      |  | 123    |  
|Earnings before finance costs and income taxes                                |  |      | 2,222  |   |      |  | 2,223  |  
|Finance costs related to long-term debt (note 6)                              |  |      | 89     |   |      |  | 101    |  
|Other finance costs (note 6)                                                  |  |      | 40     |   |      |  | 59     |  
|Earnings before income taxes                                                  |  |      | 2,093  |   |      |  | 2,063  |  
|Income taxes (note 7)                                                         |  |      | 595    |   |      |  | 555    |  
|Net earnings from continuing operations                                       |  |      | 1,498  |   |      |  | 1,508  |  
|Net loss from discontinued operations (note 4)                                |  |      |       |   |      |  | (133   | )
|Net earnings                                                                  |  |      | 1,498  |   |      |  | 1,375  |  
|Attributable to:                                                              |  |      |        |   |      |  |        |  
|Equity holders of Agrium                                                      |  |      | 1,494  |   |      |  | 1,371  |  
|Non-controlling interest                                                      |  |      | 4      |   |      |  | 4      |  
|Net earnings                                                                  |  |      | 1,498  |   |      |  | 1,375  |  
|Earnings per share attributable to equity holders of Agrium(note 8)           |  |      |        |   |      |  |        |  
|Basic earnings per share from continuing operations                           |  |      | 9.56   |   |      |  | 9.53   |  
|Basic loss per share from discontinued operations                             |  |      |       |   |      |  | (0.84  | )
|Basic earnings per share                                                      |  |      | 9.56   |   |      |  | 8.69   |  
|Diluted earnings per share from continuing operations                         |  |      | 9.55   |   |      |  | 9.52   |  
|Diluted loss per share from discontinued operations                           |  |      |       |   |      |  | (0.84  | )
|Diluted earnings per share                                                    |  |      | 9.55   |   |      |  | 8.68   |  

See accompanying notes.



|   |  |                                                             
|-- |  | ------------------------------------------------------------
|88 |  | CONSOLIDATED FINANCIAL STATEMENTS  AGRIUM 2012 ANNUAL REPORT



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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME







|                                                    |  |      |       |   |      |  |       |  
|--------------------------------------------------- |  | ---- | ----- | - | ---- |  | ----- | -
|Years ended December 31,
(millions of U.S. dollars) |  | 2012 |       |   | 2011 | 
|Net earnings                                        |  |      | 1,498 |   |      |  | 1,375 |  
|Other comprehensive income (loss)                   |  |      |       |   |      |  |       |  
|Items that may be reclassified to earnings          |  |      |       |   |      |  |       |  
|Available for sale financial instruments            |  |      |       |   |      |  |       |  
|Gains                                               |  |      | 1     |   |      |  | 1     |  
|Reclassifications to earnings                       |  |      |      |   |      |  | (2    | )
|Foreign currency translation                        |  |      |       |   |      |  |       |  
|Gains (losses)                                      |  |      | 64    |   |      |  | (43   | )
|Reclassifications to earnings                       |  |      | (1    | ) |      |  | (23   | )
|Other comprehensive loss of associates              |  |      | (3    | ) |      |  |      |  
|                                                    |  |      | 61    |   |      |  | (67   | )
|Items that will not be reclassified to earnings     |  |      |       |   |      |  |       |  
|Post-employment benefits                            |  |      |       |   |      |  |       |  
|Actuarial losses                                    |  |      | (7    | ) |      |  | (58   | )
|Deferred income taxes                               |  |      | 2     |   |      |  | 17    |  
|                                                    |  |      | (5    | ) |      |  | (41   | )
|Other comprehensive income (loss)                   |  |      | 56    |   |      |  | (108  | )
|Comprehensive income                                |  |      | 1,554 |   |      |  | 1,267 |  
|Attributable to:                                    |  |      |       |   |      |  |       |  
|Equity holders of Agrium                            |  |      | 1,550 |   |      |  | 1,271 |  
|Non-controlling interest                            |  |      | 4     |   |      |  | (4    | )
|Comprehensive income                                |  |      | 1,554 |   |      |  | 1,267 |  

See accompanying notes.



|                                                             |  |   
|------------------------------------------------------------ |  | --
|AGRIUM 2012 ANNUAL REPORT  CONSOLIDATED FINANCIAL STATEMENTS |  | 89



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CONSOLIDATED STATEMENTS OF CASH FLOWS







|                                                                            |  |      |        |   |      |  |       |  
|--------------------------------------------------------------------------- |  | ---- | ------ | - | ---- |  | ----- | -
|Years ended December 31,
(millions of U.S. dollars)                         |  | 2012 |        |   | 2011 | 
|Operating                                                                   |  |      |        |   |      |  |       |  
|Net earnings from continuing operations                                     |  |      | 1,498  |   |      |  | 1,508 |  
|Items not affecting cash                                                    |  |      |        |   |      |  |       |  
|Depreciation and amortization                                               |  |      | 444    |   |      |  | 381   |  
|Earnings from associates                                                    |  |      | (13    | ) |      |  | (21   | )
|Asset impairment                                                            |  |      |       |   |      |  | 61    |  
|Share-based payments                                                        |  |      | 108    |   |      |  | (51   | )
|Unrealized gain on derivative financial instruments                         |  |      | (17    | ) |      |  | (46   | )
|Unrealized foreign exchange loss                                            |  |      | 5      |   |      |  | 19    |  
|Deferred income taxes                                                       |  |      | (33    | ) |      |  | 150   |  
|Other                                                                       |  |      | 98     |   |      |  | 64    |  
|Dividends from associates                                                   |  |      | 13     |   |      |  | 16    |  
|Net changes in non-cash working capital (note 9)                            |  |      | 16     |   |      |  | (731  | )
|Cash provided by operating activities                                       |  |      | 2,119  |   |      |  | 1,350 |  
|Investing                                                                   |  |      |        |   |      |  |       |  
|Acquisitions, net of cash acquired                                          |  |      | (213   | ) |      |  | (183  | )
|Advance on acquisition of Viterra Inc.                                      |  |      | (1,801 | ) |      |  |      |  
|Proceeds from disposal of discontinued operations                           |  |      |       |   |      |  | 721   |  
|Capital expenditures                                                        |  |      | (1,282 | ) |      |  | (663  | )
|Investments in associates                                                   |  |      | (10    | ) |      |  | (15   | )
|Purchase of investments                                                     |  |      | (14    | ) |      |  | (46   | )
|Proceeds from disposal of investments                                       |  |      |       |   |      |  | 36    |  
|Other                                                                       |  |      | (61    | ) |      |  | (1    | )
|Net changes in non-cash working capital                                     |  |      | 43     |   |      |  |      |  
|Cash used in investing activities                                           |  |      | (3,338 | ) |      |  | (151  | )
|Financing                                                                   |  |      |        |   |      |  |       |  
|Short-term debt                                                             |  |      | 1,068  |   |      |  | (293  | )
|Long-term debt issued                                                       |  |      | 532    |   |      |  | 71    |  
|Transaction costs on long-term debt                                         |  |      | (5     | ) |      |  |      |  
|Repayment of long-term debt                                                 |  |      | (12    | ) |      |  | (188  | )
|Dividends paid                                                              |  |      | (115   | ) |      |  | (18   | )
|Shares issued                                                               |  |      | 7      |   |      |  | 5     |  
|Shares repurchased                                                          |  |      | (913   | ) |      |  |      |  
|Cash provided by (used in) financing activities                             |  |      | 562    |   |      |  | (423  | )
|Effect of exchange rate changes on cash and cash equivalents                |  |      | 37     |   |      |  | (14   | )
|(Decrease) increase in cash and cash equivalents from continuing operations |  |      | (620   | ) |      |  | 762   |  
|Cash and cash equivalents used in discontinued operations                   |  |      |       |   |      |  | (51   | )
|Cash and cash equivalents  beginning of year                               |  |      | 1,346  |   |      |  | 635   |  
|Cash and cash equivalents  end of year(note 9)                             |  |      | 726    |   |      |  | 1,346 |  
|Included in operating activities                                            |  |      |        |   |      |  |       |  
|Interest paid                                                               |  |      | 113    |   |      |  | 137   |  
|Interest received                                                           |  |      | 92     |   |      |  | 78    |  
|Income taxes paid                                                           |  |      | 461    |   |      |  | 401   |  
|Included in investing activities                                            |  |      |        |   |      |  |       |  
|Interest paid                                                               |  |      | 26     |   |      |  | 10    |  

See accompanying notes.



|   |  |                                                             
|-- |  | ------------------------------------------------------------
|90 |  | CONSOLIDATED FINANCIAL STATEMENTS  AGRIUM 2012 ANNUAL REPORT



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CONSOLIDATED BALANCE SHEETS







|                                                 |  |              |        |  |  |  |        | 
|------------------------------------------------ |  | ------------ | ------ |  |  |  | ------ | 
|                                                 |  | December 31, |       
|(millions of U.S. dollars)                       |  |              | 2012   |  |  |  | 2011   | 
|ASSETS                                           |  |              |        |  |  |  |        | 
|Current assets                                   |  |              |        |  |  |  |        | 
|Cash and cash equivalents (note 9)               |  |              | 726    |  |  |  | 1,346  | 
|Accounts receivable (note 10)                    |  |              | 2,284  |  |  |  | 1,984  | 
|Income taxes receivable                          |  |              | 32     |  |  |  | 138    | 
|Inventories (note 11)                            |  |              | 3,129  |  |  |  | 2,956  | 
|Advance on acquisition of Viterra Inc. (note 3)  |  |              | 1,792  |  |  |  |       | 
|Prepaid expenses and deposits                    |  |              | 749    |  |  |  | 643    | 
|Assets of discontinued operations (note 4)       |  |              |       |  |  |  | 70     | 
|                                                 |  |              | 8,712  |  |  |  | 7,137  | 
|Property, plant and equipment(note 12)           |  |              | 3,698  |  |  |  | 2,533  | 
|Intangibles(note 13)                             |  |              | 636    |  |  |  | 678    | 
|Goodwill(note 13)                                |  |              | 2,349  |  |  |  | 2,277  | 
|Investments in associates(note 14)               |  |              | 382    |  |  |  | 355    | 
|Other assets(note 16)                            |  |              | 130    |  |  |  | 97     | 
|Deferred income tax assets(note 7)               |  |              | 70     |  |  |  | 63     | 
|                                                 |  |              | 15,977 |  |  |  | 13,140 | 
|LIABILITIES AND SHAREHOLDERS EQUITY             |  |              |        |  |  |  |        | 
|Current liabilities                              |  |              |        |  |  |  |        | 
|Short-term debt (note 17)                        |  |              | 1,328  |  |  |  | 245    | 
|Accounts payable (note 18)                       |  |              | 3,541  |  |  |  | 2,959  | 
|Income taxes payable                             |  |              | 152    |  |  |  | 82     | 
|Current portion of long-term debt (note 17)      |  |              | 518    |  |  |  | 20     | 
|Current portion of other provisions (note 20)    |  |              | 108    |  |  |  | 68     | 
|Liabilities of discontinued operations (note 4)  |  |              |       |  |  |  | 53     | 
|                                                 |  |              | 5,647  |  |  |  | 3,427  | 
|Long-term debt(note 17)                          |  |              | 2,115  |  |  |  | 2,098  | 
|Provisions for post-employment benefits(note 19) |  |              | 184    |  |  |  | 192    | 
|Other provisions(note 20)                        |  |              | 413    |  |  |  | 299    | 
|Other liabilities(note 21)                       |  |              | 80     |  |  |  | 59     | 
|Deferred income tax liabilities(note 7)          |  |              | 618    |  |  |  | 637    | 
|                                                 |  |              | 9,057  |  |  |  | 6,712  | 
|Shareholders equity                             |  |              |        |  |  |  |        | 
|Share capital                                    |  |              | 1,890  |  |  |  | 1,994  | 
|Retained earnings                                |  |              | 4,955  |  |  |  | 4,420  | 
|Accumulated other comprehensive income (note 26) |  |              | 71     |  |  |  | 10     | 
|Equity holders of Agrium                         |  |              | 6,916  |  |  |  | 6,424  | 
|Non-controlling interest                         |  |              | 4      |  |  |  | 4      | 
|Total equity                                     |  |              | 6,920  |  |  |  | 6,428  | 
|                                                 |  |              | 15,977 |  |  |  | 13,140 | 

See accompanying notes.



|                                                             |  |   
|------------------------------------------------------------ |  | --
|AGRIUM 2012 ANNUAL REPORT  CONSOLIDATED FINANCIAL STATEMENTS |  | 91



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CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY







|                                              |  |                         |     |   |              |  |       |                  |  |  |                                               |   |  |                        |     |   |                         |  |       |              |  |  |    |   |  |  |       |  
|--------------------------------------------- |  | ----------------------- | --- | - | ------------ |  | ----- | ---------------- |  |  | --------------------------------------------- | - |  | ---------------------- | --- | - | ----------------------- |  | ----- | ------------ |  |  | -- | - |  |  | ----- | -
|(millions of U.S. dollars, except share data) |  | Millions ofcommonshares |     |   | Sharecapital |  |       | Retainedearnings |  |  | Accumulatedothercomprehensiveincome (note 26) |   |  | Equityholders ofAgrium |     |   | Non-controllinginterest |  |       | Total equity | 
|December 31, 2010                             |  |                         | 158 |   |              |  | 1,982 |                  |  |  | 3,134                                         |   |  |                        | 69  |   |                         |  | 5,185 |              |  |  | 8  |   |  |  | 5,193 |  
|Net earnings                                  |  |                         |    |   |              |  |      |                  |  |  | 1,371                                         |   |  |                        |    |   |                         |  | 1,371 |              |  |  | 4  |   |  |  | 1,375 |  
|Comprehensive income (loss), net of tax       |  |                         |     |   |              |  |       |                  |  |  |                                               |   |  |                        |     |   |                         |  |       |              |  |  |    |   |  |  |       |  
|Available for sale financial instruments      |  |                         |    |   |              |  |      |                  |  |  |                                              |   |  |                        | (1  | ) |                         |  | (1    | )            |  |  |   |   |  |  | (1    | )
|Post-employment benefits                      |  |                         |    |   |              |  |      |                  |  |  | (41                                           | ) |  |                        |    |   |                         |  | (41   | )            |  |  |   |   |  |  | (41   | )
|Foreign currency translation                  |  |                         |    |   |              |  |      |                  |  |  |                                              |   |  |                        | (58 | ) |                         |  | (58   | )            |  |  | (8 | ) |  |  | (66   | )
|Comprehensive income (loss), net of tax       |  |                         |    |   |              |  |      |                  |  |  | 1,330                                         |   |  |                        | (59 | ) |                         |  | 1,271 |              |  |  | (4 | ) |  |  | 1,267 |  
|Dividends                                     |  |                         |    |   |              |  |      |                  |  |  | (44                                           | ) |  |                        |    |   |                         |  | (44   | )            |  |  |   |   |  |  | (44   | )
|Share-based payment transactions              |  |                         |    |   |              |  | 12    |                  |  |  |                                              |   |  |                        |    |   |                         |  | 12    |              |  |  |   |   |  |  | 12    |  
|December 31, 2011                             |  |                         | 158 |   |              |  | 1,994 |                  |  |  | 4,420                                         |   |  |                        | 10  |   |                         |  | 6,424 |              |  |  | 4  |   |  |  | 6,428 |  
|Net earnings                                  |  |                         |    |   |              |  |      |                  |  |  | 1,494                                         |   |  |                        |    |   |                         |  | 1,494 |              |  |  | 4  |   |  |  | 1,498 |  
|Comprehensive income, net of tax              |  |                         |     |   |              |  |       |                  |  |  |                                               |   |  |                        |     |   |                         |  |       |              |  |  |    |   |  |  |       |  
|Available for sale financial instruments      |  |                         |    |   |              |  |      |                  |  |  |                                              |   |  |                        | 1   |   |                         |  | 1     |              |  |  |   |   |  |  | 1     |  
|Post-employment benefits                      |  |                         |    |   |              |  |      |                  |  |  | (5                                            | ) |  |                        |    |   |                         |  | (5    | )            |  |  |   |   |  |  | (5    | )
|Foreign currency translation                  |  |                         |    |   |              |  |      |                  |  |  |                                              |   |  |                        | 63  |   |                         |  | 63    |              |  |  |   |   |  |  | 63    |  
|Other comprehensive loss of associates        |  |                         |    |   |              |  |      |                  |  |  |                                              |   |  |                        | (3  | ) |                         |  | (3    | )            |  |  |   |   |  |  | (3    | )
|Comprehensive income, net of tax              |  |                         |    |   |              |  |      |                  |  |  | 1,489                                         |   |  |                        | 61  |   |                         |  | 1,550 |              |  |  | 4  |   |  |  | 1,554 |  
|Dividends                                     |  |                         |    |   |              |  |      |                  |  |  | (154                                          | ) |  |                        |    |   |                         |  | (154  | )            |  |  |   |   |  |  | (154  | )
|Dividends of non-controlling interest         |  |                         |    |   |              |  |      |                  |  |  |                                              |   |  |                        |    |   |                         |  |      |              |  |  | (4 | ) |  |  | (4    | )
|Shares repurchased                            |  |                         | (9  | ) |              |  | (113  | )                |  |  | (800                                          | ) |  |                        |    |   |                         |  | (913  | )            |  |  |   |   |  |  | (913  | )
|Share-based payment transactions              |  |                         |    |   |              |  | 9     |                  |  |  |                                              |   |  |                        |    |   |                         |  | 9     |              |  |  |   |   |  |  | 9     |  
|December 31, 2012                             |  |                         | 149 |   |              |  | 1,890 |                  |  |  | 4,955                                         |   |  |                        | 71  |   |                         |  | 6,916 |              |  |  | 4  |   |  |  | 6,920 |  

See accompanying notes.



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|92 |  | CONSOLIDATED FINANCIAL STATEMENTS  AGRIUM 2012 ANNUAL REPORT



---

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS





(millions of U.S. dollars unless otherwise stated)

1.
CORPORATE INFORMATION

CORPORATE INFORMATION

Agrium Inc. (Agrium) is incorporated under the laws of Canada with common shares listed under the symbol AGU on the New York Stock Exchange (NYSE) and the Toronto Stock Exchange
(TSX). Our Corporate head office is located at 13131 Lake Fraser Drive S.E. Calgary, Canada. We conduct our operations globally from our Wholesale head office in Calgary, and our Retail and Advanced Technologies head offices in Loveland, Colorado,
United States.

Agrium (with its subsidiaries) operates three strategic business units:



|w |  | Retailoperates in North and South America and Australia, and sells crop nutrients, crop protection products, seed and services directly to
growers.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------



|w |  | Wholesaleoperates in North and South America and Europe, and produces, markets and distributes three primary groups of crop nutrients: nitrogen,
potash and phosphate for agricultural and industrial customers around the world.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|w |  | Advanced Technologies (AAT)produces and markets controlled-release crop nutrients and micronutrients in the broad-based agriculture,
specialty agriculture, professional turf, horticulture, and consumer lawn and garden markets.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

BASIS OF
PREPARATION AND STATEMENT OF COMPLIANCE

These consolidated financial statements of Agrium, as at and for the year ended December 31,
2012, were approved for issuance by the Board of Directors on February 22, 2013. We prepared the financial statements in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting
Standards Board (IASB).

These financial statements are presented in U.S. dollars, which is our presentation and functional currency.
We prepared these financial statements using the historical cost basis, with the exception of items that IFRS requires to be carried at fair value, as described in the notes below.

2. SIGNIFICANT ACCOUNTING POLICIES

A) CRITICAL ACCOUNTING JUDGMENTS AND ESTIMATES

SIGNIFICANT JUDGMENTS

Preparation of financial statements requires us to make
judgments in applying our accounting policies. Judgments that have the most significant effect on the amounts recognized in these financial statements are set out below.



|                                                                                                                                                                                                                                                                                                                                                                                                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Area of Judgment                                                                                                                                                                                                                                                                                                                                                                                                    |  | Judgment Factors                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                    | 
|Functional Currency                                                                                                                                                                                                                                                                                                                                                                                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                    | 
|We determine the functional currency for each entity, and for jointly controlled entities and associates. This requires that we assess the primary economic environment in which each of
these entities operates. Our determination of functional currencies affects how we translate foreign currency balances and transactions. Determination includes an assessment of various primary and secondary indicators. |  | In determining the functional currency of our operations in Canada (Canadian dollar), South America (U.S. dollar) and the Eurozone (euro), we considered the currency that primarily
influences or determines the selling prices of goods and services and the cost of production, including labor, material and other costs, and the currency whose competitive forces and regulations mainly determine selling prices.                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                    | 
|Deferred Income Tax Assets                                                                                                                                                                                                                                                                                                                                                                                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                    | 
|We recognize deferred tax assets only to the extent we consider it probable that those assets will be recoverable. Our recognition of deferred tax assets affects the amount of our tax
provision.                                                                                                                                                                                                                  |  | We make judgments about when deferred tax assets are likely to reverse, and judgments as to whether or not there will be sufficient taxable profits available to offset the tax assets
when they do reverse. In determining whether to establish a valuation allowance against a deferred tax asset, we perform a continual evaluation of all positive and negative evidence. Our evaluation includes the magnitude and duration of any past
losses, current profitability and whether it is sustainable, and our earnings forecasts.



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|AGRIUM 2012 ANNUAL REPORT  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |  | 93



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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                                                                                                                                                                                                                                                                                                                                                                                    
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Area of Judgment                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  | Judgment Factors                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 
|Determination and Grouping of Cash Generating Units (CGU) and Impairment Testing                                                                                                                                                                                                                                                                                                                                                                                  |  |                                                                                                                                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 
|In testing for impairment, we group assets into CGUs when we cannot identify cash flows with individual assets. We also combine CGUs for goodwill impairment testing. We use judgment
when determining a CGU in defining the smallest identifiable group of assets that generate cash inflows that are largely independent of the cash inflows from other assets or groups of assets. We also use judgment in determining whether indicators of
impairment exist. |  | We have allocated goodwill to two groups of CGUs within our Retail business unit, Americas Retail and Australia Retail, based on geographic
regions, economic and commercial influences, product lines, extent of shared infrastructure, and interdependence of cash flows. 
We determined that indicators of impairment did not exist for our operations outside of North America.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 
|Provisions                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  |                                                                                                                                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 
|We make judgments as to whether an obligation exists and whether an outflow of resources embodying economic benefits of a liability of uncertain timing or amount is probable, not
probable or remote.                                                                                                                                                                                                                                                            |  | We consider all available information relevant to each specific matter. In 2012, we determined that a future outflow of resources was probable for an asset retirement obligation at our
Conda, Idaho facility, as described in note 25.                                                                                                                                           

ASSUMPTIONS AND CRITICAL ESTIMATES

In preparing financial statements, we also make assumptions and critical estimates. Critical estimates are those that are most subject to uncertainty and have the most significant risk of resulting in a
material adjustment to the carrying amounts of assets and liabilities within the next year. We base our assumptions and estimates on our historical experience, current trends and all available information that we believe is relevant at the time we
prepare the financial statements. However, future events and their effects cannot be determined with certainty. Accordingly, as confirming events occur, actual results could ultimately differ from our assumptions and estimates. Such differences
could be material. The following require our most difficult, subjective or complex assumptions and estimates.



|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  | Assumptions and Estimation Uncertainty                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 
|Inventories                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 
|We value inventories at the lower of cost and net realizable value through inventory allowances. Subsequent changes in facts or
circumstances could result in the reversal of previously recorded allowances. 
Results could differ if inventory allowances change because actual selling prices or selling costs differ materially from forecasted selling prices and
selling costs.                                                                                                                                                                                                                                                                                                                                                                   |  | Calculating inventory allowances requires estimates and assumptions about a combination of interrelated factors affecting forecasted selling prices, including demand and supply
variables. Demand variables include grain and oilseed prices, stock-to-use ratios and changes in inventories in distribution channels. Supply variables include forecasted prices of raw materials such as natural gas, operating rates and crop nutrient
inventory levels.                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 
|Rebates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 
|Our rebate agreements with suppliers, primarily for crop protection products and seed, provide rebates and prepay discounts typically based on the achievement of specified purchase
volumes, sales to end users over a specified period of time, or when market conditions cause vendors to reduce manufacturers suggested retail prices. We account for rebates and prepay discounts as reductions in the prices of suppliers
products. We accrue rebates that are probable and can be reasonably estimated. We accrue rebates that are not probable or estimable when we achieve certain milestones. We accrue rebates not covered by binding agreements or published vendor programs
when we obtain conclusive documentation of right of receipt. |  | We record accruals for some rebates by estimating the point at which we will have completed our performance under an agreement. Due to the complexity and diversity of individual vendor
agreements, we analyze and review historical trends to apply rates negotiated with our vendors to estimated and actual purchase volumes in order to determine accruals. Amounts accrued throughout the year could be impacted if actual purchase volumes
differ from projected volumes.



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|94 |  | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  AGRIUM 2012 ANNUAL REPORT



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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  | Assumptions and Estimation Uncertainty                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 
|Long-Lived Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 
|We evaluate long-lived assets other than goodwill and indefinite-lived intangible assets (which we test separately) for impairment whenever
events or changes in circumstances indicate that the carrying value may not be recoverable.  We undertake impairment reviews on an asset-by-asset basis except where assets do not generate cash flows independent of other assets, in which case we do our review at the level at which we group assets
into a CGU.  The impairment test compares the carrying value of the asset to
the assets recoverable amount, based on the higher of the assets value in use, estimated using future discounted cash flows, and fair value less costs to sell.                                                                                                                                                                                             |  | Our impairment calculations contain uncertainties as they require assumptions and estimates about future cash flows and asset fair values. In determining recoverable amount, we make
assumptions about the discount and growth rates we apply, future sales, product margins and overall market conditions. Fair value assessments are subject to estimates and assumptions about factors including new technology, market conditions for our
products, availability of raw material inputs and estimated service lives of assets.                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 
|Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 
|Our income tax returns, like those of most companies, are periodically audited by domestic and foreign tax authorities. Audits include
questions about our tax filing positions, including the timing and amount of deductions. We recognize tax provisions when it is more likely than not that there will be a future outflow of funds to a taxing authority. In such cases, we provide for
the amount that is expected to be settled.  In determining our provision for
income taxes, we use an annual effective income tax rate based on annual income, permanent differences between book and tax income, and substantially enacted income tax rates. We adjust our annual effective income tax rate as additional information
on outcomes or events becomes available.  In recording deferred taxes, we
estimate the extent to which it is probable that timing differences will reverse. |  | We make assumptions to estimate the exposures associated with our various filing positions. We recognize a provision when it becomes
probable that we will incur additional tax liabilities for such exposures. Changes in tax law, the level and geographic mix of earnings and the results of tax audits also affect our effective income tax rate.
 Determining tax provisions requires that we make assumptions as to the ultimate outcome
of a filing position, which can change over time depending on facts and circumstances.  In determining whether to establish a valuation allowance against a deferred income tax asset, we perform a continual evaluation of all positive and negative evidence. Our evaluation includes the magnitude
and duration of any past losses, current profitability and whether it is sustainable, and our earnings forecasts.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 
|Goodwill and Intangible Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 
|We conduct an impairment test annually in the third quarter and whenever events or changes in circumstances indicate that carrying values
may not be recoverable. We test for impairment if a CGU or group of CGUs has goodwill allocated to it, or includes intangible assets that have an indefinite useful life. 
We determine fair value using primarily the discounted cash flow method. This method estimates fair value using a discounted five-year forecasted cash flow
with a terminal value.  We estimate terminal value using a growth model
incorporating a long-term future growth rate based on our most recent views of the long-term outlook for each business. We use observable market data inputs to develop discount rates for each business using a capital asset pricing model, which we
believe approximates the discount rate from a market participants perspective. |  | Assumptions underlying projected cash flows used in our goodwill impairment test are derived from several sources, including internal budgets, which contain information on sales,
assumed production levels and costs, and product pricing. Estimated fair value of a CGU could be impacted by changes in interest rates, inflation rates, growth rates, foreign currency exchange rates, costs, pricing, capital expenditures and market
conditions. Where available and as appropriate, we use our market capitalization and comparative market multiples to corroborate discounted cash flow results. Compared to the use of market multiples, the discounted cash flow approach more closely
aligns valuations to the business model for each business, the specific projections of the business, and its geographic markets and products.                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 
|Share-Based Payments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 
|We determine costs for share-based payments using market-based valuation techniques. We determine the fair value of our market-based and performance-based non-vested share awards at
the date of grant using generally accepted valuation techniques. A portion of our share-based payments expense results from performance-based share awards, which require us to estimate the likelihood of achieving Company and corporate peer group
performance goals.                                                                                                                                                                                                                                                                                                                                                                                                                                  |  | We make assumptions in applying valuation techniques. We use these assumptions in estimating the future volatility of our stock price, expected dividend yield, future employee turnover
rates, future employee stock option exercise behavior and corporate performance. Such estimates and assumptions are inherently uncertain. Changes in these assumptions affect the fair value estimates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                      



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|AGRIUM 2012 ANNUAL REPORT  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |  | 95



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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Description                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  | Assumptions and Estimation Uncertainty                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|Provisions                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|We recognize provisions based on our assessment of our obligations and available information. Any matters not included as provisions are uncertain in nature and cannot be reasonably
estimated.                                                                                                                                                                                                                                                                 |  | We make assumptions to determine whether obligations exist and to estimate the amount of obligations that we believe exist.                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|Litigation:In the normal course of business, legal proceedings and other claims brought against Agrium expose us to potential losses. Given the nature of these events, in most
cases the amounts involved are not reasonably estimable due to uncertainty about the final outcome.                                                                                                                                                                              |  | In estimating the final outcome of litigation, we make assumptions about factors including experience with similar matters, past history, precedents, relevant financial, scientific and
other evidence, and facts specific to the matter. This determines whether we require a provision or disclosure in the financial statements.                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|Asset retirement obligations and environmental remediation:We apply a number of assumptions in estimating provisions that we record for asset retirement obligations and
environmental remediation associated with Agrium sites. We make these assumptions due to the nature of the factors affecting the amount that will ultimately be required to settle these obligations when they come due.                                                                |  | In determining provisions for asset retirement obligations and environmental remediation, we assess factors such as the extent of contamination, the nature of the work Agrium is
obliged to perform or pay for, changes to environmental laws and regulations, and whether any of the costs will be shared with other occupants of Agrium sites.                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|Business AcquisitionsPurchase Price Allocation                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|We allocate the purchase price of an acquired business to its identifiable tangible and intangible assets acquired and liabilities assumed at their estimated fair values at the
acquisition date. We record the excess of the purchase price over the amount allocated to the assets and liabilities, if any, to goodwill.                                                                                                                                      |  | Our purchase price allocation process involves uncertainty as we make assumptions to identify the acquired intangible assets, property, plant and equipment and the
liabilities assumed in the acquisition, and estimate the fair value of those acquired assets and liabilities based upon quoted market prices and widely accepted valuation techniques, including discounted cash flows and market multiple analyses. Such
estimates include assumptions about inputs to our discounted cash flow calculations, industry economic factors and business strategies.
|We use all available information to estimate fair values. We typically
engage external consultants to assist in the fair value determination of identifiable intangible assets and other significant assets or liabilities. We adjust the preliminary purchase price allocation, as necessary, up to one year after the
acquisition closing date as we obtain more information about asset valuations and liabilities assumed as of the date of the acquisition. | 

B) PRINCIPLES OF CONSOLIDATION

SUBSIDIARIES

These financial statements include the accounts of Agrium and its
subsidiaries, and its proportionate share of revenues, expenses, assets and liabilities of joint ventures, which are the entities over which Agrium has control. Control exists when we have the power, directly or indirectly, to govern the financial
and operating policies of an entity so as to obtain benefit from its activities. We presume that control exists where we own more than 50 percent of voting rights unless ownership does not constitute control. Control does not exist where other
parties hold veto rights over significant financial and operating decisions or where we cannot obtain benefits from the activities of the entities we have the power to govern. In these financial statements, we, us,
our and Agrium mean Agrium Inc., its subsidiaries and joint ventures. All intercompany transactions and balances have been eliminated.

ASSOCIATES

Associates are those entities in which we have significant influence,
but not control, over financial and operating policies. We presume that significant influence exists where we hold between 20 and 50 percent of the voting power of another entity. Significant influence can also exist where we hold less than 20
percent of an entity if we have the power to be actively involved and influential in policy decisions affecting the entity.

We account for
investments in associates using the equity method and recognize our investment initially at cost. Our investment includes goodwill identified on acquisition, net of any accumulated impairment losses. The financial statements include our share of the
income and expenses and equity movements of equity-accounted investees from the date that significant influence commences until the date that it ceases.

JOINT VENTURES

Joint ventures are those entities over whose activities we have
joint control, established by contractual agreement and requiring unanimous consent for strategic financial and operating decisions. We account for jointly controlled entities using proportionate consolidation. Our share of the assets, liabilities,
income and expenses of jointly controlled entities is combined with the equivalent items in the financial statements on a line-by-line basis. Where we transact with our jointly controlled entities, we eliminate unrealized profits and losses to the
extent of our interest in the joint venture.



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|96 |  | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  AGRIUM 2012 ANNUAL REPORT



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PRINCIPAL SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES



|                                           |  |               |  |               |  |                                                |  |               |     | 
|------------------------------------------ |  | ------------- |  | ------------- |  | ---------------------------------------------- |  | ------------- | --- | 
|                                           |  | Relationship  |  | Location      |  | Principal Activity                             |  | Ownership (%) |    
|Agrium, a general partnership              |  | Subsidiary    |  | Canada        |  | Manufacturer and distributor of crop nutrients |  |               | 100 | 
|Agrium U.S. Inc.                           |  | Subsidiary    |  | United States |  | Manufacturer and distributor of crop nutrients |  |               | 100 | 
|Crop Production Services, Inc.             |  | Subsidiary    |  | United States |  | Crop input retailer                            |  |               | 100 | 
|Landmark Rural Holdings Limited            |  | Subsidiary    |  | Australia     |  | Crop input retailer                            |  |               | 100 | 
|Agrium Europe S.A.                         |  | Subsidiary    |  | Belgium       |  | Distributor of crop nutrients                  |  |               | 100 | 
|Agroservicios Pampeanos S.A.               |  | Subsidiary    |  | Argentina     |  | Crop input retailer                            |  |               | 100 | 
|Misr Fertilizers Production Company S.A.E. |  | Associate     |  | Egypt         |  | Manufacturer and distributor of crop nutrients |  |               | 26  | 
|Profertil S.A.                             |  | Joint Venture |  | Argentina     |  | Manufacturer and distributor of crop nutrients |  |               | 50  | 

C) BUSINESS COMBINATIONS

We account for acquisitions of subsidiaries and businesses using the acquisition method. We measure consideration for each acquisition at the aggregate of the fair values of assets given, liabilities
incurred or assumed, and equity instruments issued in exchange for control of the acquiree at the acquisition date. We recognize acquisition-related costs in earnings as incurred.

On an acquisition-by-acquisition basis, we recognize any non-controlling interest in the acquiree either at fair value or at the non-controlling interests proportionate share of the acquirees net
assets.

Where applicable, consideration for the acquisition includes any asset or liability resulting from a contingent consideration
arrangement, measured at its acquisition date fair value.

If the initial accounting for a business combination is incomplete by the end of the
reporting period in which the combination occurs, we report provisional amounts for the items for which the accounting is incomplete. The measurement period is the period from the date of acquisition to the date we receive complete information about
facts and circumstances that existed as of the acquisition dateand is subject to a maximum of one year. We adjust provisional amounts retrospectively during the measurement period, or recognize additional assets or liabilities to reflect new
information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the amounts recognized as of that date.

D) FOREIGN CURRENCY TRANSLATION

The functional currency for each of our
subsidiaries, jointly controlled entities and associates is the currency of the primary economic environment in which they operate.

All
transactions that are not denominated in an entitys functional currency are foreign currency transactions. These transactions are initially recorded in the functional currency by applying the appropriate daily exchange rate that best
approximates the actual rate of the transaction. Monetary assets and liabilities denominated in foreign currencies are remeasured at the functional currency rate of exchange at the reporting date. We recognize all differences in earnings.
Non-monetary items measured at historical cost are not remeasuredthey remain at the exchange rate at the date of the transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rate at the
date when the fair value was determined.

The assets and liabilities of operations with a functional currency other than the U.S. dollar,
including goodwill and fair value adjustments arising on acquisition, are translated to our presentation currency at the exchange rate at the reporting date. Income, expenses and capital transactions are translated at the average exchange rate for
the month. Translation differences resulting from fluctuations in exchange rates are recognized directly in the foreign currency translation component of accumulated other comprehensive income. If we dispose of operations with a functional currency
other than the U.S. dollar, the relevant amount of foreign currency translation in equity is reclassified to earnings.



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E) REVENUE RECOGNITION

We measure revenue at the fair value of the consideration received or receivable. We recognize revenue based on individual contractual terms when all of the following criteria are met: the significant risks
and rewards of ownership of the goods have been transferred to our customer; we retain neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold; we can measure the amount of
revenue and costs incurred or to be incurred; and it is probable that the economic benefits associated with the transaction will flow to us. These conditions are generally satisfied when title passes to our customer according to the sales agreement,
which in most cases is when product is picked up by our customer or delivered to the destination specified by our customer, typically a customers premises, the vessel on which the product will be shipped or the destination port. Our assessment
of the probability that economic benefits will flow to us as a result of a sale includes consideration of customer creditworthiness, historical collection practices, accounts receivable aging trends, and collection and write-off history. We do not
have significant levels of revenue transactions with multiple elements. We report revenue net of sales taxes, returns, discounts and rebates.

F) REBATES

We account for rebates and prepay discounts as a reduction of the
prices of the suppliers products. Rebates based on the amount of materials purchased reduce cost of product as inventory is sold. Rebates that are based on sales volume are offset to cost of product where we determine that they have been
earned based on sales volume of related products.

G) INCOME TAXES

We recognize income tax expense in earnings except to the extent that it relates to items recognized directly in equity, in which case we recognize it
directly in equity or in other comprehensive income. Current income tax is the expected tax payable or recoverable on taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to taxes
payable or recoverable in respect of previous years.

We recognize deferred income tax on temporary differences between the carrying amounts of
assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable income. We measure deferred income tax assets and liabilities at the tax rates that we expect to apply in the period in which the
liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. We generally recognize deferred income tax assets for all deductible temporary
differences to the extent it is probable that taxable income will be available against which those deductible temporary differences can be utilized. We recognize a tax benefit or liability for an uncertain tax position when our best estimate is that
the position is more likely than not to be sustained on examination, based on a qualitative assessment of all relevant factors.

We review the
carrying amount of deferred income tax assets at the end of each reporting period and reduce the amount to the extent it is no longer probable that sufficient taxable income will be available to allow all or part of the asset to be recovered.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to set off current income tax assets against
current income tax liabilities and when they relate to income taxes levied by the same taxation authority.

H) FINANCIAL
INSTRUMENTS

Financial assets are classified in the following categories at the time of initial recognition based on the purpose for which the
financial assets were acquired.



|i. | Financial assets held at fair value through profit or loss (FVTPL) comprises financial assets classified as held for trading, which include marketable
securities and derivative financial instruments included within accounts receivable and other financial assets.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|ii. | Loans and receivables(L&R) are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. This
category of financial assets includes trade receivables, rebates and other non-trade accounts receivable, and other receivables included in other financial assets.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|iii. | Available for sale(AFS) financial assets are non-derivative financial assets that are designated as AFS, or that are not allocated to any of the other
categories of financial assets. This classification is comprised of investments included within other financial assets.
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

We
derecognize financial assets when contractual rights to receive cash flows from the assets expire or when the financial assets are transferred along with all significant risks and rewards of ownership.

Financial liabilities are categorized as either held at FVTPL or as other financial liabilities. Financial liabilities held at FVTPL include derivative
financial instruments classified as held for trading. Other financial liabilities include trade and other payables, short-term and long-term debt, and other financial liabilities. We derecognize financial liabilities when we have discharged the
obligation or it is cancelled or expires.

All financial assets and financial liabilities are initially recognized at fair value.



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|                                    |  |                                                                                                                                                                            
|----------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Financial instrument classification |  | Subsequent measurement of gains or losses at each period end                                                                                                               
|                                    | 
|FVTPL (assets and liabilities)      |  | Fair value; unrealized gains or losses recognized in earnings                                                                                                              
|                                    | 
|AFS (assets)                        |  | Fair value; unrealized gains and losses recognized in other comprehensive income; recognized in earnings on sale of the asset or when the asset is written down as
impaired
|Held to maturity
investments        |  | Amortized cost using the effective interest rate method; recognized in earnings if asset/liability is derecognized or asset
is impaired                                    
|L&R                                 | 
|Other financial
liabilities         | 

IMPAIRMENT OF FINANCIAL ASSETS

Financial assets, other than those carried at FVTPL, are assessed for indications of impairment at each reporting date. A financial asset is deemed to be impaired if there is objective evidence indicating
that a loss event has occurred after initial recognition of the financial asset, and that the loss event has a negative effect on the estimated future cash flows of the financial asset that can be reliably estimated. Indications that a write-down is
necessary may include evidence that a debtor is experiencing significant financial difficulty, a reduction in market value, a material breach of contract, a high probability of the bankruptcy or financial reorganization of a debtor, or the
disappearance of an active market for the financial asset.

For loans and receivables carried at amortized cost, the amount of impairment is the
difference between the assets carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. The carrying amount of the financial asset is reduced directly by the impairment loss for
all financial assets except trade receivables, for which the carrying amount is reduced through the use of an allowance account. When a trade receivable is determined to be uncollectible, it is written off against the allowance account. Subsequent
recoveries of amounts previously written off are credited against the allowance account. We recognize changes in the carrying amount of the allowance account in earnings.

For AFS financial assets, impairment losses are determined as the difference between the acquisition costs, net of any principal repayment and amortization, and the current fair value, less any impairment
loss previously recognized in profit or loss. For debt instruments, we recognize the cumulative loss directly in earnings.

If, in a subsequent
period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed through earnings to the extent that the
carrying amount of the investment at the date the impairment is reversed does not exceed what the amortized cost would have been had the impairment not been recognized.

We do not net derivative assets and liabilities except where contracts under master netting arrangements include both asset and liability positions. In such cases, we offset the fair value amounts for
multiple similar derivative financial instruments with the same counterparty, including any related cash collateral asset or obligation.

We
record transaction costs of financial instruments as a reduction of the cost of the instruments, except for costs of financial instruments classified as fair value through profit or loss, which are expensed as incurred. Contracts that require
delivery of financial assets (regular way purchases and sales) are accounted for on the trade date.

I) CASH AND CASH
EQUIVALENTS

Cash equivalents are carried at fair value, and consist of short-term investments with an original maturity of three months or
less.

J) INVENTORIES

Wholesale inventories, consisting primarily of crop nutrients, operating supplies and raw materials, include both direct and indirect production and purchase costs, depreciation and amortization on assets
employed directly in production, and freight to transport product to storage facilities. Crop nutrients include our produced products and products purchased for resale. Operating supplies include catalysts used in the production process, materials
used for repairs and maintenance, and other supplies. Inventories are valued at the lower of cost on a weighted average basis and net realizable value.

Retail inventories, consisting primarily of crop nutrients, crop protection products, seed and merchandise, include the cost of delivery to move the product to storage facilities. Inventories are recorded at
the lower of cost on a weighted average basis and net realizable value.

Advanced Technologies inventories, consisting primarily of raw materials
and controlled-release products, include both direct and indirect production costs and depreciation on assets employed directly in production. Inventories are recorded at the lower of cost, determined on a first-in, first-out basis, and net
realizable value.



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K) PROPERTY, PLANT AND EQUIPMENT

We measure property, plant and equipment at historical cost less accumulated depreciation and accumulated impairment loss. The cost of property, plant and
equipment comprises its purchase price plus any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. If a legal or constructive obligation
exists to decommission property, plant and equipment, the discounted value of the obligation is included in the carrying value of the assets when the obligation arises.

We capitalize and depreciate expenditures separately for each material component of a composite asset according to useful life and patterns of depreciation. We expense the carrying amount of replaced
components. We recognize expenses for day-to-day maintenance and repairs in earnings as they are incurred.

If the construction or preparation
for use of property, plant or equipment extends over a period of longer than 12 months, we capitalize borrowing costs incurred on borrowed capital up to the date of completion as part of the cost of acquisition or construction.

Property, plant and equipment are depreciated on a straight-line basis using the following estimated useful lives:



|                           |  |             
|-------------------------- |  | ------------
|Buildings and improvements |  | 3 - 40 years
|Machinery and equipment    |  | 1 - 55 years
|Other                      |  | 1 - 45 years

Management determines estimated useful life based on experience and current technology. Factors that affect the estimated
useful lives of our assets include sustaining capital programs, access to new supplies of raw materials, new technology and market conditions for our products. Depreciation methods, expected useful lives and residual values are re-assessed annually
and adjusted if appropriate.

If the cost of an individual component of property, plant and equipment is significant relative to the total cost
of the item, the individual component is accounted for and depreciated separately.

L) GOODWILL AND INTANGIBLE ASSETS

Goodwill represents the difference between the fair value of the consideration transferred in a business combination and the fair value of
the identifiable net assets acquired at the date of acquisition. Goodwill is initially determined based on provisional fair values. Fair values are finalized within one year of the acquisition date. Goodwill on acquisition of subsidiaries and
jointly controlled entities is separately disclosed and goodwill on acquisitions of associates is included within investments in associates. Goodwill, including goodwill in associates, is not amortized. Goodwill from the acquisition of subsidiaries
is tested for impairment annually or where there is an indication of impairment.

Intangible assets acquired as part of the acquisition of a
business are capitalized separately from goodwill if the asset is separable or arises from contractual or legal rights, and the fair value can be measured reliably on initial recognition.

Purchased intangible assets are initially recorded at cost and finite-lived intangible assets are amortized over their useful economic lives on a straight-line basis. Intangible assets having indefinite
lives and intangible assets that are not yet ready for use are not amortized and are tested for impairment annually or where there is an indication of impairment.

We recognize internally generated intangible assets for development costs at cost when the criteria for feasibility are met. Cost comprises materials, labor and overhead that are directly attributable to
preparing the asset for its intended use. Development expenditures that do not meet the capitalization criteria are expensed as incurred.

Intangible assets are considered to have indefinite lives when, based on an analysis of all relevant factors, there is no foreseeable limit to the period
over which the asset is expected to generate cash flows for us. The factors considered in making this determination include the existence of contractual rights for unlimited terms, or evidence that renewal of the contractual rights without
significant incremental cost can be expected for indefinite periods into the future in view of our future investment intentions. The life cycles of the products and processes that depend on the asset are also considered.

The following estimated useful lives, which are re-assessed annually, have been determined for classes of finite-lived intangible assets:



|                       |  |             
|---------------------- |  | ------------
|Trade names            |  | 5 - 10 years
|Customer relationships |  | 5 - 15 years
|Technology             |  | 3 - 10 years
|Other                  |  | 5 - 20 years



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M) IMPAIRMENT

We review the carrying amounts of non-current assets at each reporting date to determine whether there is any indication of impairment. If any indication of impairment exists, the assets recoverable
amount is estimated. For goodwill and intangible assets that have indefinite lives or that are not yet available for use, the recoverable amount is estimated each year during the third quarter.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated
future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets are grouped
together into the smallest group of assets practicable that have the ability to generate cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets. The goodwill acquired in a business
combination, for the purpose of impairment testing, is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination, and reflects the lowest level at which goodwill is monitored for internal reporting
purposes. If there is an indication of impairment of an asset or CGU to below the level to which goodwill has been allocated, the asset or CGU is first tested for impairment, and we recognize any impairment loss on that asset or CGU before testing
at the level to which goodwill has been allocated.

We recognize an impairment loss if the carrying amount of an asset or its CGU exceeds its
estimated recoverable amount. Impairment losses are recognized in earnings. Impairment losses recognized in respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying
amounts of the other assets in the CGU on a pro-rata basis.

An impairment loss in respect of goodwill is not reversed. In respect of other
assets, impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to
determine the recoverable amount. An impairment loss is reversed only to the extent that the assets carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss
had been recognized.

Goodwill that forms part of the carrying amount of an investment in an associate is not recognized separately, and
therefore is not tested for impairment separately. Instead, the entire amount of the investment in an associate is tested for impairment as a single asset when there is an indication that an investment in an associate may be impaired.

N) LEASES

Leases whereby we
assume substantially all the risks and rewards of ownership are classified as finance leases. Upon initial recognition, the leased asset (and corresponding liability) is measured at an amount equal to the lower of its fair value and the present
value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset. Minimum lease payments made under finance leases are apportioned between the
finance cost and the reduction of the outstanding liability. The finance cost is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Operating leases are not recognized on our balance sheet. We recognize payments made under operating leases in earnings over the term of the lease.

An arrangement may be or contain a lease according to the substance of the arrangement. This is the case if the arrangement is dependent on the
use of an asset or conveys a right to use an asset, even if not explicitly stated.

O) EMPLOYEE BENEFITS

POST-EMPLOYMENT BENEFITS

We
operate various pension plans. For funded plans, we make contributions to trustee-administered funds.



|i. | Defined contribution plans
|-- | --------------------------

For
defined contribution plans, we pay fixed periodic contributions into a separate entity, and once payment is made we have no legal or constructive obligation to pay further amounts. We recognize obligations for contributions to defined contribution
pension plans as personnel expense when services are rendered by employees.



|ii. | Defined benefit plans
|--- | ---------------------

Generally,
defined benefit plans define an amount of pension benefit that an employee will receive on retirement, usually dependent on factors such as age, years of service and compensation.

We calculate our net obligation for defined benefit pension plans separately for each plan by estimating the amount of future benefits that
employees have earned in return for their service in the current and prior periods. We discount obligations to determine present value. We deduct the fair value of any plan assets in determining our net obligation. The calculation is performed
annually by a qualified actuary using the projected unit credit method.

We recognize all actuarial gains and losses arising from
defined benefit plans in other comprehensive income in the period in which they occur. We recognize all expenses related to defined benefit plans in earnings as a personnel expense.



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OTHER LONG-TERM EMPLOYEE BENEFITS

We provide post-retirement health care and basic life insurance benefits to certain employees. Entitlement to benefits is generally conditional on the
employee remaining in service for a minimum period or reaching a specified age. Our net obligation for these benefits is the amount of future benefits that employees have earned in return for their service in the current and prior periods,
discounted to present value. The calculation is performed annually by a qualified actuary using the projected unit credit method. We recognize all actuarial gains and losses in other comprehensive income in the period in which they occur.

SHORT-TERM EMPLOYEE BENEFITS

We record short-term employee benefit obligations as a personnel expense as employees provide services. For the amount expected to be paid for short-term bonuses or profit-sharing plans, we recognize an
undiscounted liability if we have a present legal or constructive obligation to pay the amount as a result of past service provided by employees, and the obligation can be estimated reliably.

P) PROVISIONS

We recognize a provision if, as a result of a past event, we have
a present legal or constructive obligation that can be estimated reliably, and it is more likely than not that an outflow of economic benefits will be required to settle the obligation. We discount provisions where the effect of discounting is
material at a pre-tax rate that reflects current market assessments of the time value of money. We use a pre-tax risk-free rate to discount estimated future risk-adjusted cash outflows. We recognize unwinding of the discount (accretion) as a finance
cost. We assess discount rates and projected timing of future obligations for each reporting period. We remeasure provisions each reporting period, taking into account changes in the likelihood and timing of future outflows and changes in discount
rates.

ENVIRONMENTAL REMEDIATION

We capitalize environmental expenditures that extend the life of a property, increase its capacity or mitigate or prevent contamination from future operations. Environmental expenditures that relate to
existing conditions caused by past operations that do not contribute to current or future revenue generation are expensed. We record our best estimates of future costs when environmental remediation efforts are probable and the costs can be reliably
estimated based on current law and existing technologies.

ASSET RETIREMENT OBLIGATIONS

Asset retirement obligations, which include provisions for legal or constructive obligations for decommissioning and restoration costs, are measured based on
current requirements, technology and price levels. In the period when a reasonable estimate can be made, we recognize a liability and a corresponding asset for the present value of estimated future cash outflows over the useful economic life of the
asset. Changes due to revisions to discount rates, the timing or the amount of the original estimate of the provision are reflected on a prospective basis by adjusting the carrying amount of the related property, plant and equipment.

Q) SHARE-BASED PAYMENTS

Cash-settled plans are accounted for as liabilities where the fair value of the award is determined at the grant date using a valuation model which includes
an estimated forfeiture rate. We use a Black-Scholes option pricing model for plans with a service condition and a Monte Carlo simulation model for plans with service and market conditions. We accrue and recognize compensation expense over the
vesting period of the award. We remeasure fair value at each reporting date and recognize changes in the period in which the fluctuation occurs.

Equity-settled plans are accounted for using a Black-Scholes option pricing model. The fair value of the share-based award is determined at the grant date
using a market-based option valuation model which includes an estimated forfeiture rate. The fair value of the award is recorded as compensation expense amortized over the vesting period of the award, with a corresponding increase to share capital.
On exercise of the award, the proceeds are recorded as share capital.

If an employee is eligible to retire during the vesting period, we
recognize compensation expense over the period from the date of grant to the retirement eligibility date. If an employee is eligible to retire on the date of grant, we recognize compensation expense on the grant date.

R) NON-CURRENT ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS

Non-current assets and disposal groups are classified as held for sale if their carrying amounts will be recovered through a sale transaction rather than through continuing use. This condition is met only
when the sale is highly probable and the asset or disposal group is available for immediate sale in its present condition. Management must be committed to the sale, an active program to locate a buyer must have been initiated, and the sale should be
completed within one year from the date of classification.

Non-current assets and disposal groups classified as held for sale are measured at
the lower of their carrying amount and fair value less cost to sell. Once classified as held for sale, property, plant and equipment and intangible assets are not depreciated or amortized and are recognized at fair value less cost to sell.
Impairment losses on the initial classification as held for sale and subsequent gains or losses on remeasurement are recognized in profit or loss. Gains are not recognized in excess of any cumulative impairment loss.



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Non-current assets classified as held for sale are presented separately on the balance sheet. The assets and
liabilities of a disposal group classified as held for sale are presented separately as one line in each of the assets and liabilities sections on the face of the balance sheet. Amounts presented for non-current assets or for assets and liabilities
of disposal groups classified as held for sale are not reclassified or re-presented on the balance sheet for prior periods.

A discontinued
operation is a component of an entity that has been disposed of or is held for sale, and whose operations and cash flows are clearly distinguished both operationally and for financial reporting purposes from the rest of the entity.

In the consolidated statements of operations for the reporting period, and for the comparable period of the previous year, income and expenses from
discontinued operations are reported separate from income and expenses from continuing activities.

S) RECENT ACCOUNTING
PRONOUNCEMENTS



|              |  |                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |                                                                                                                 |  |                                                                                                                                                                                                    
|------------- |  | ----------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|New oramended |  | Standard/Interpretation |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  | Agriums proposeddate and methodof adoption                                                                     |  | Impact                                                                                                                                                                                             
|              |  |                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|New           |  | IFRS 9                  |  | Financial Instrumentsreplaces previous guidance on the classification and measurement of financial assets, which will be classified on initial recognition at either a)
amortized cost, or b) fair value, with gains and losses on remeasurement recognized in earnings, except for recognition in other comprehensive income on election for equity instruments that are not held for trading. The new guidance also revises
standards for financial liabilities under the fair value option and for derivatives linked to unquoted equity instruments. |  | January 1, 2015; retrospectively                                                                                |  | We expect that initial adoption will have an impact on our financial statements, since it will be adopted retrospectively; however, we are not able at this time to reasonably
estimate the impact.
|              |  |                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|New           |  | IFRS 10                 |  | Consolidated Financial Statementsimplements a single model based on control for the preparation and presentation of financial statements. It introduces a new definition of
control, requiring power over the investee; exposure, or rights, to variable returns from involvement with the investee; and the ability to use power over the investee to affect the amount of returns. This model also applies to investments in
associates (IAS 28).                                                                                                      |  | January 1, 2013; retrospectively                                                                                |  | We do not expect a material impact.                                                                                                                                                                
|              |  |                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|New           |  | IFRS 11                 |  | Joint Arrangementsrequires us as a party to a joint arrangement to recognize our rights and obligations arising from the arrangement. Our joint arrangements under IFRS 11 will
be classified as joint ventures requiring equity accounting. We currently use proportionate consolidation.                                                                                                                                                                                                                                                               |  | January 1, 2013; in
accordance with IFRS 11                                                                     |  | Application will reduce total assets, total liabilities, sales, gross profit, earnings before income taxes, but will not affect net earnings or net equity.                                        
|              |  |                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|New           |  | IFRS 12                 |  | Disclosure of Interests in Other Entitieswill require us to disclose information that allows users to evaluate the nature, impact of and risks associated with our interests in
joint arrangements, associates and other entities.                                                                                                                                                                                                                                                                                                                       |  | January 1, 2013                                                                                                 |  | We do not expect a material impact. On adoption we will add disclosures about our interests in other entities.                                                                                     
|              |  |                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|New           |  | IFRS 13                 |  | Fair Value Measurementprovides a single set of requirements to be applied to all fair value measurements, replacing the existing guidance dispersed across many standards. It
provides a definition of fair value as a market-based measurement, along with enhanced disclosures about fair value measurements.                                                                                                                                                                                                                                          |  | January 1, 2013; prospectively                                                                                  |  | We do not expect a material impact.                                                                                                                                                                
|              |  |                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Amended       |  | IAS 1                   |  | Presentation of Financial Statementsimproves the consistency and clarity of the presentation of items of other comprehensive income by requiring items to be grouped based on
whether they may subsequently be reclassified in profit or loss.                                                                                                                                                                                                                                                                                                           |  | January 1, 2012                                                                                                 |  | We have early adopted these amendments related to presentation.                                                                                                                                    
|              |  |                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Amended       |  | IAS 19                  |  | Employee Benefitsprovides users with a clearer picture of the commitments resulting from defined benefit plans (DBPs) by eliminating the corridor approach, requiring
presentation of gains and losses related to DBPs in other comprehensive income, and adding enhanced disclosure requirements.                                                                                                                                                                                                                                                       |  | January 1, 2013                                                                                                 |  | We eliminated the corridor approach on adoption of IFRS. The balance of requirements will be adopted in 2013. We do not expect a material impact.                                                  
|              |  |                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Amended       |  | IAS 32 and IFRS 7       |  | Offsetting Financial Assets and Liabilities(IAS 32) a) clarifies that a legally enforceable right to set-off exists if the right is not contingent on a future event, and is
enforceable both in the normal course of business and in default, insolvency or bankruptcy of all parties to the liability, and b) clarifies provisions on net settlement. IFRS 7 contains new disclosure requirements for amounts offset or subject to
master netting arrangements.                                                                                        |  | We intend to adopt IFRS 7 amendments effective January 1, 2013, and IAS 32 amendments effective January 1, 2014 |  | We do not expect the IFRS 7 amendments to have a material impact. We are not able at this time to reasonably estimate the impact of the IAS 32 amendments.                                         
|              |  |                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|New           |  | IFRIC 20                |  | Stripping Costs in the Production Phase of a Surface Mineestablishes when the costs incurred to remove mine waste materials to gain
access to mineral ore deposits during the production phase of a surface mine should lead to the recognition of an asset and how that asset should be measured.                                                                                                                                                                                                                                                       |  | January 1, 2013                                                                                                 |  | We do not expect a material impact.                                                                                                                                                                



|                                                                          |  |    
|------------------------------------------------------------------------- |  | ---
|AGRIUM 2012 ANNUAL REPORT  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |  | 103



---

3. BUSINESS ACQUISITIONS

VITERRA INC.

On March 19,
2012, we signed an agreement with Glencore International plc (Glencore) to acquire the majority of the Agri-products Business of Viterra Inc. (Viterra). The Agri-products Business will be part of our Retail business unit and
consists of 217 Canadian farm centers, 13 Australian farm centers, storage and distribution assets, and other assets and liabilities. Key features of the transaction are:



|a) | We will acquire Viterras Agri-products Business from Glencore, which completed its acquisition of Viterra on December 17, 2012. The Agri-products Business
consists of two groups of assets:
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | i. | Viterras 34 percent interest in a nitrogen facility located at Medicine Hat, Canada; and
| | -- | -----------------------------------------------------------------------------------------



| | ii. | farm centers and other assets. The agreement also entitles us to receive an adjustment to our purchase price of an amount equal to the after-tax operating cash flows from
these Agri-products Business assets (Operating Cash Flow Adjustment) from March 31, 2012, until the applicable closing dates.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|b) | On August 2, 2012, Agrium and Glencore announced that CF Industries Holdings Inc. (CF), holder of a 66 percent interest in the Medicine Hat facility,
would acquire Viterras 34 percent interest in the Medicine Hat facility from Glencore for Cdn$915-million, subject to certain adjustments. Accordingly, if CF completes this acquisition, we will not acquire Viterras interest in the
Medicine Hat facility. Under our agreement with Glencore:
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | i. | the cash proceeds of the sale of Viterras interest in the Medicine Hat facility to CF are payable by Glencore to us; and
| | -- | -------------------------------------------------------------------------------------------------------------------------



| | ii. | we are also entitled to an Operating Cash Flow Adjustment in respect of Viterras interest in the Medicine Hat facility from March 31, 2012, until closing of the
transaction between Glencore and CF, offset partially by a purchase price adjustment in favor of CF under its agreement with Glencore equivalent to Viterras estimated after-tax operating cash flows from the Medicine Hat facility from
October 16, 2012 to November 30, 2012.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|c) | The purchase price for Viterras Agri-products Business is Cdn$1.775-billion (U.S.$1.801-billion), subject to adjustments, including for:
|-- | -----------------------------------------------------------------------------------------------------------------------------------------



| | i. | proceeds from Glencores sale of Viterras interest in the Medicine Hat facility to CF as described above;
| | -- | ----------------------------------------------------------------------------------------------------------



| | ii. | Viterra farm centers excluded from the purchase;
| | --- | ------------------------------------------------



| | iii. | working capital; and
| | ---- | --------------------



| | iv. | accrual to Agrium of Operating Cash Flow Adjustments.
| | --- | -----------------------------------------------------



|d) | As partial funding for Glencores acquisition of Viterra, we advanced the Cdn$1.775-billion (U.S.$1.801-billion) purchase price to Glencore on December 12, 2012.
The advance is guaranteed by Glencore, secured by shares of Viterra, and does not bear interest. The advance is repayable by:
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | i. | the transfer of the Agri-products Business assets to us or to third parties designated by us, in amounts allocated to the assets under our agreement with Glencore; and
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ii. | cash payments for the Operating Cash Flow Adjustment, working capital and other adjustments. If the Agri-products Business assets are transferred to third parties arranged
by us, we are entitled to receive the proceeds of sale (including with respect to the sale of Viterras interest in the Medicine Hat facility to CF as described above).
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|e) | The Agri-products Business assets ultimately transferred to Agrium will consist of net current assets (working capital) and non-current assets (intangible assets and
property, plant and equipment).
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|    |  |                                                                          
|--- |  | -------------------------------------------------------------------------
|104 |  | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  AGRIUM 2012 ANNUAL REPORT



---

|f) | Agrium and CF each have specific responsibilities for obtaining required regulatory approvals. Glencore has responsibilities for obtaining required third party consents
and approvals. We are in the process of obtaining the regulatory approvals for which we are responsible. Our agreement with Glencore sets maximum periods for obtaining these regulatory approvals, which may be extended as agreed by us and Glencore.
The maximum periods extend to July 17, 2014, for Viterras interest in the Medicine Hat facility, and to April 17, 2014, for the balance of the Agri-products Business assets.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|g) | The transaction exposes us to various risks, including:
|-- | -------------------------------------------------------



| | i. | Glencore may not obtain necessary third party consents and approvals for which it is responsible, in which case, for any asset not capable of being transferred, we may
either elect for a use arrangement which is satisfactory to us for a period of at least 25 years, or to be repaid in cash the portion of the acquisition price allocated to such asset (subject to an adjustment if the asset is Viterras interest
in the Medicine Hat facility and CF does not close under its agreement to acquire such interest from Glencore);
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ii. | Agrium may be unable to obtain regulatory approvals within the time frames prescribed by the agreement, in which case 1) Glencore may be entitled to sell the affected
assets with payment of the proceeds of sale to us, or we may be required to sell the assets, in either case for proceeds which could be less than the portion of the purchase price allocated to such assets under the agreement; or 2) Glencore may
transfer the applicable assets to us or a third party under an arrangement requiring that the applicable asset be held separate from our other business operations pending a sale to a third party;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | iii. | CF may not receive regulatory approval to acquire Viterras interest in the Medicine Hat facility, or CF may otherwise fail to close on the Medicine Hat facility; and
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | iv. | an adjustment to the purchase price that could result in the combination of cash and fair value of assets transferred to us being different from the advance to Glencore.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Acquisition costs in 2012 of $4-million are included in other expenses (note 5).

OTHER BUSINESS COMBINATIONS

During 2012, our Retail business unit completed the acquisition of a number of businesses consisting of crop input, manufacturing and distribution centers
for total consideration of $213-million. Goodwill on these acquisitions is generated primarily from the acquisition of a workforce and the estimated value of expected synergies between Agrium and the acquired operations, including cost savings
opportunities and expansion of geographical coverage for the sale of crop inputs in North and South America. We have not completed our determination of the fair values of all of the assets acquired and liabilities assumed due to the timing of the
acquisitions and the complexity associated with the valuations. We have assigned $71-million of the excess of the purchase price over the net carrying values to goodwill, however we expect that on completion of determination of fair values that we
will allocate part of the goodwill amount to intangible assets, including trade names with indefinite lives, and to customer relationships.

ASSETS ACQUIRED AND LIABILITIES ASSUMED AT THE DATE OF ACQUISITION



|                              |  |  |       |  
|----------------------------- |  |  | ----- | -
|                              |  |  | Other |  
|Working capital (a)           |  |  | 33    |  
|Property, plant and equipment |  |  | 78    |  
|Intangibles                   |  |  | 33    |  
|Goodwill (b)                  |  |  | 71    |  
|Other liabilities             |  |  | (2    | )
|Total consideration           |  |  | 213   |  



|(a) | Includes accounts receivable with a gross contractual amount of $7-million, of which $1-million was not expected to be collectible at the acquisition date.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | Of the amount allocated to goodwill, $13-million is not deductible for income tax purposes.
|--- | -------------------------------------------------------------------------------------------

OPERATIONS FROM DATE OF ACQUISITION TO DECEMBER 31, 2012



|         |  |  |       |  
|-------- |  |  | ----- | -
|         |  |  | Other |  
|Sales    |  |  | 156   |  
|Net loss |  |  | (5    | )

UNAUDITED PRO FORMA CONSOLIDATED SUMMARY RESULTS OF OPERATIONS



|                                                                  |  |  |       | 
|----------------------------------------------------------------- |  |  | ----- | 
|(prepared as if the acquisitions had occurred on January 1,
2012) |  |  | Other | 
|Sales                                                             |  |  | 427   | 
|Net earnings                                                      |  |  | 17    | 



|                                                                          |  |    
|------------------------------------------------------------------------- |  | ---
|AGRIUM 2012 ANNUAL REPORT  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |  | 105



---

4. DISCONTINUED OPERATIONS

CONDENSED INFORMATION OF DISCONTINUED OPERATIONS OF AWB LIMITED COMMODITY MANAGEMENT AND OTHER BUSINESSES(a)



|                                             |  |  |              |  |  |  |       |  
|-------------------------------------------- |  |  | ------------ |  |  |  | ----- | -
|                                             |  |  | December 31, | 
|                                             |  |  | 2012         |  |  |  | 2011  |  
|Sales                                        |  |  | 65           |  |  |  | 1,662 |  
|Net loss from discontinued operations
(a)(b) |  |  |             |  |  |  | (133  | )
|Current assets                               |  |  |             |  |  |  | 70    |  
|Current liabilities                          |  |  |             |  |  |  | 53    |  



|(a) | The commodity management business of AWB Limited (AWB), a subsidiary of Agrium acquired in 2010, was sold on May 11, 2011.
|--- | ----------------------------------------------------------------------------------------------------------------------------

|(b) | 2011 amount is net of income taxes of $22-million and includes a loss of $10-million on the sale of discontinued operations.
|--- | ----------------------------------------------------------------------------------------------------------------------------

5. EXPENSES

OTHER



|                                                           |  |  |      |   |  |  |      |  
|---------------------------------------------------------- |  |  | ---- | - |  |  | ---- | -
|                                                           |  |  | 2012 |   |  |  | 2011 |  
|Realized loss on derivative financial instruments          |  |  | 24   |   |  |  | 83   |  
|Unrealized gain on derivative financial instruments        |  |  | (17  | ) |  |  | (46  | )
|Interest income                                            |  |  | (92  | ) |  |  | (78  | )
|Foreign exchange loss (gain)                               |  |  | 27   |   |  |  | (43  | )
|Asset impairment                                           |  |  |     |   |  |  | 61   |  
|Environmental remediation and asset retirement obligations |  |  | 80   |   |  |  | 44   |  
|Bad debt expense                                           |  |  | 22   |   |  |  | 26   |  
|Potash profit and capital tax                              |  |  | 16   |   |  |  | 50   |  
|Other                                                      |  |  | 2    |   |  |  | 26   |  
|                                                           |  |  | 62   |   |  |  | 123  |  

DEPRECIATION AND AMORTIZATION



|                                              |  |  |      |  |  |  |      | 
|--------------------------------------------- |  |  | ---- |  |  |  | ---- | 
|                                              |  |  | 2012 |  |  |  | 2011 | 
|Depreciation of property, plant and equipment |  |  | 327  |  |  |  | 291  | 
|Amortization of intangibles                   |  |  | 92   |  |  |  | 89   | 
|Other                                         |  |  | 25   |  |  |  | 1    | 
|                                              |  |  | 444  |  |  |  | 381  | 

TOTAL PERSONNEL EXPENSES



|                             |  |  |       |  |  |  |       |  
|---------------------------- |  |  | ----- |  |  |  | ----- | -
|                             |  |  | 2012  |  |  |  | 2011  |  
|Short-term employee benefits |  |  | 1,453 |  |  |  | 1,288 |  
|Post-employment benefits     |  |  | 69    |  |  |  | 60    |  
|Share-based payments         |  |  | 108   |  |  |  | (51   | )
|                             |  |  | 1,630 |  |  |  | 1,297 |  

COMPENSATION OF KEY MANAGEMENT PERSONNEL



|                             |  |  |      |  |  |  |      |  
|---------------------------- |  |  | ---- |  |  |  | ---- | -
|                             |  |  | 2012 |  |  |  | 2011 |  
|Short-term employee benefits |  |  | 13   |  |  |  | 12   |  
|Post-employment benefits     |  |  | 4    |  |  |  | 3    |  
|Share-based payments         |  |  | 60   |  |  |  | (35  | )
|                             |  |  | 77   |  |  |  | (20  | )



|    |  |                                                                          
|--- |  | -------------------------------------------------------------------------
|106 |  | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  AGRIUM 2012 ANNUAL REPORT



---

6. FINANCE COSTS

FINANCE COSTS RELATED TO LONG-TERM DEBT



|                                              |  |  |      |  |  |  |      | 
|--------------------------------------------- |  |  | ---- |  |  |  | ---- | 
|                                              |  |  | 2012 |  |  |  | 2011 | 
|Gross finance costs related to long-term debt |  |  | 115  |  |  |  | 111  | 
|Less: Capitalized borrowing costs             |  |  | 26   |  |  |  | 10   | 
|                                              |  |  | 89   |  |  |  | 101  | 

OTHER FINANCE COSTS



|                                                           |  |  |      |  |  |  |      | 
|---------------------------------------------------------- |  |  | ---- |  |  |  | ---- | 
|                                                           |  |  | 2012 |  |  |  | 2011 | 
|Environmental remediation and asset retirement obligations |  |  | 12   |  |  |  | 12   | 
|Other interest expense                                     |  |  | 28   |  |  |  | 47   | 
|                                                           |  |  | 40   |  |  |  | 59   | 

7. INCOME TAXES

COMPONENTS OF INCOME TAXES



|                                                  |  |  |      |   |  |  |      | 
|------------------------------------------------- |  |  | ---- | - |  |  | ---- | 
|                                                  |  |  | 2012 |   |  |  | 2011 | 
|Current income taxes                              |  |  | 628  |   |  |  | 405  | 
|Origination and reversal of temporary differences |  |  | (33  | ) |  |  | 150  | 
|Deferred income taxes                             |  |  | (33  | ) |  |  | 150  | 
|                                                  |  |  | 595  |   |  |  | 555  | 

RECONCILIATION OF STATUTORY TAX RATE TO EFFECTIVE TAX RATE



|                                                                |  |  |       |   |  |  |       |  
|--------------------------------------------------------------- |  |  | ----- | - |  |  | ----- | -
|                                                                |  |  | 2012  |   |  |  | 2011  |  
|Earnings before income taxes                                    |  |  |       |   |  |  |       |  
|Canadian                                                        |  |  | 1,062 |   |  |  | 1,163 |  
|Foreign                                                         |  |  | 1,031 |   |  |  | 900   |  
|                                                                |  |  | 2,093 |   |  |  | 2,063 |  
|Statutory rate (%)
(a)                                          |  |  | 26    |   |  |  | 27    |  
|Income taxes at statutory rates                                 |  |  | 538   |   |  |  | 562   |  
|Foreign currency gains (losses) relating to Canadian operations |  |  | 5     |   |  |  | (4    | )
|Differences in foreign tax rates                                |  |  | 52    |   |  |  | (7    | )
|Other                                                           |  |  |      |   |  |  | 4     |  
|Income taxes                                                    |  |  | 595   |   |  |  | 555   |  
|Current                                                         |  |  |       |   |  |  |       |  
|Canadian                                                        |  |  | 253   |   |  |  | 188   |  
|Foreign                                                         |  |  | 375   |   |  |  | 217   |  
|                                                                |  |  | 628   |   |  |  | 405   |  
|Deferred                                                        |  |  |       |   |  |  |       |  
|Canadian                                                        |  |  |      |   |  |  | 130   |  
|Foreign                                                         |  |  | (33   | ) |  |  | 20    |  
|                                                                |  |  | (33   | ) |  |  | 150   |  
|                                                                |  |  | 595   |   |  |  | 555   |  



|(a) | Effective January 1, 2012, the federal statutory tax rate in Canada decreased by 1.5 percent (2011  1.5 percent).
|--- | ------------------------------------------------------------------------------------------------------------------



|                                                                          |  |    
|------------------------------------------------------------------------- |  | ---
|AGRIUM 2012 ANNUAL REPORT  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |  | 107



---

|                                                 |  |                                                       |      |   |                                 |  |      |                                     |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |  
|------------------------------------------------ |  | ----------------------------------------------------- | ---- | - | ------------------------------- |  | ---- | ----------------------------------- |  |  | ---- | - |  |  | ---- | - |  |  | ---- | - |  |  | ---- | -
|                                                 |  | Components ofdeferred income taxliabilities 
(assets) |      |   | Componentsrecognizedin earnings |  |      | Componentsnot recognizedin earnings | 
|                                                 |  |                                                       | 2012 |   |                                 |  | 2011 |                                     |  |  | 2012 |   |  |  | 2011 |   |  |  | 2012 |   |  |  | 2011 |  
|Receivables, inventories and accrued liabilities |  |                                                       | (77  | ) |                                 |  | (76  | )                                   |  |  | 1    |   |  |  | 6    |   |  |  | (2   | ) |  |  |     |  
|Property, plant and equipment                    |  |                                                       | 435  |   |                                 |  | 293  |                                     |  |  | 87   |   |  |  | 49   |   |  |  | 55   |   |  |  | (3   | )
|Intangibles                                      |  |                                                       | 167  |   |                                 |  | 187  |                                     |  |  | (20  | ) |  |  | (27  | ) |  |  |     |   |  |  |     |  
|Asset retirement and environmental remediation   |  |                                                       | (156 | ) |                                 |  | (95  | )                                   |  |  | (8   | ) |  |  | (19  | ) |  |  | (53  | ) |  |  |     |  
|Deferred income                                  |  |                                                       | 284  |   |                                 |  | 340  |                                     |  |  | (64  | ) |  |  | 153  |   |  |  | 8    |   |  |  | (9   | )
|Loss carry-forwards (a)                          |  |                                                       | (69  | ) |                                 |  | (41  | )                                   |  |  | (27  | ) |  |  | (18  | ) |  |  | (1   | ) |  |  |     |  
|Other                                            |  |                                                       | (36  | ) |                                 |  | (34  | )                                   |  |  | (2   | ) |  |  | 6    |   |  |  |     |   |  |  | (32  | )
|Net deferred income tax liabilities (assets)     |  |                                                       | 548  |   |                                 |  | 574  |                                     |  |  | (33  | ) |  |  | 150  |   |  |  | 7    |   |  |  | (44  | )
|Deferred income tax assets                       |  |                                                       | (70  | ) |                                 |  | (63  | )                                   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |  
|Deferred income tax liabilities                  |  |                                                       | 618  |   |                                 |  | 637  |                                     |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |  
|Net deferred income tax liabilities              |  |                                                       | 548  |   |                                 |  | 574  |                                     |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |  



|(a) | Unused tax losses of $41-million (2011  $29-million) expiring through 2032 (2011  expiring through 2031) have not been recognized in the financial statements.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

8. EARNINGS PER SHARE

ATTRIBUTABLE TO EQUITY HOLDERS OF AGRIUM



|                                                                             |  |  |       |  |  |  |       |  
|---------------------------------------------------------------------------- |  |  | ----- |  |  |  | ----- | -
|                                                                             |  |  | 2012  |  |  |  | 2011  |  
|Numerator                                                                    |  |  |       |  |  |  |       |  
|Net earnings from continuing operations                                      |  |  | 1,494 |  |  |  | 1,504 |  
|Net loss from discontinued operations                                        |  |  |      |  |  |  | (133  | )
|Net earnings                                                                 |  |  | 1,494 |  |  |  | 1,371 |  
|Denominator (millions)                                                       |  |  |       |  |  |  |       |  
|Weighted average number of shares outstanding for basic earnings per share   |  |  | 156   |  |  |  | 158   |  
|Weighted average number of shares outstanding for diluted earnings per share |  |  | 156   |  |  |  | 158   |  

9. CASH FLOW INFORMATION

CASH AND CASH EQUIVALENTS



|                       |  |  |              |  |  |  |       | 
|---------------------- |  |  | ------------ |  |  |  | ----- | 
|                       |  |  | December 31, | 
|                       |  |  | 2012         |  |  |  | 2011  | 
|Cash                   |  |  | 594          |  |  |  | 911   | 
|Short-term investments |  |  | 132          |  |  |  | 435   | 
|                       |  |  | 726          |  |  |  | 1,346 | 

NET CHANGES IN OPERATING NON-CASH WORKING CAPITAL



|                                                |  |  |      |   |  |  |      |  
|----------------------------------------------- |  |  | ---- | - |  |  | ---- | -
|                                                |  |  | 2012 |   |  |  | 2011 |  
|Accounts receivable and income taxes receivable |  |  | (234 | ) |  |  | (550 | )
|Inventories                                     |  |  | (91  | ) |  |  | (495 | )
|Prepaid expenses and deposits                   |  |  | (118 | ) |  |  | 229  |  
|Marketable securities                           |  |  | (5   | ) |  |  | (11  | )
|Accounts payable and income taxes payable       |  |  | 464  |   |  |  | 96   |  
|                                                |  |  | 16   |   |  |  | (731 | )



|    |  |                                                                          
|--- |  | -------------------------------------------------------------------------
|108 |  | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  AGRIUM 2012 ANNUAL REPORT



---

10. ACCOUNTS RECEIVABLE

ACCOUNTS RECEIVABLE



|                                     |  |  |              |   |  |  |       |  
|------------------------------------ |  |  | ------------ | - |  |  | ----- | -
|                                     |  |  | December 31, |  
|                                     |  |  | 2012         |   |  |  | 2011  |  
|Trade accounts                       |  |  | 2,201        |   |  |  | 1,936 |  
|Allowance for doubtful accounts      |  |  | (72          | ) |  |  | (70   | )
|Rebates and other non-trade accounts |  |  | 125          |   |  |  | 94    |  
|Derivative financial instruments     |  |  | 8            |   |  |  | 8     |  
|Other taxes                          |  |  | 22           |   |  |  | 16    |  
|                                     |  |  | 2,284        |   |  |  | 1,984 |  

11. INVENTORIES

INVENTORIES



|                      |  |  |              |  |  |  |       | 
|--------------------- |  |  | ------------ |  |  |  | ----- | 
|                      |  |  | December 31, | 
|                      |  |  | 2012         |  |  |  | 2011  | 
|Raw materials         |  |  |              |  |  |  |       | 
|Retail                |  |  | 89           |  |  |  | 69    | 
|Wholesale             |  |  | 306          |  |  |  | 213   | 
|Advanced Technologies |  |  | 22           |  |  |  | 22    | 
|                      |  |  | 417          |  |  |  | 304   | 
|Finished goods        |  |  |              |  |  |  |       | 
|Retail                |  |  | 88           |  |  |  | 81    | 
|Wholesale             |  |  | 186          |  |  |  | 230   | 
|Advanced Technologies |  |  | 82           |  |  |  | 50    | 
|                      |  |  | 356          |  |  |  | 361   | 
|Product for resale    |  |  |              |  |  |  |       | 
|Retail                |  |  | 2,123        |  |  |  | 2,024 | 
|Wholesale             |  |  | 201          |  |  |  | 240   | 
|Advanced Technologies |  |  | 32           |  |  |  | 27    | 
|                      |  |  | 2,356        |  |  |  | 2,291 | 
|                      |  |  | 3,129        |  |  |  | 2,956 | 

RECORDED IN COST OF PRODUCT SOLD



|                                             |  |  |        |  |  |  |        | 
|-------------------------------------------- |  |  | ------ |  |  |  | ------ | 
|                                             |  |  | 2012   |  |  |  | 2011   | 
|Depreciation and amortization                |  |  | 224    |  |  |  | 187    | 
|Direct freight                               |  |  | 226    |  |  |  | 218    | 
|Cost of purchased and manufactured inventory |  |  | 11,742 |  |  |  | 10,732 | 
|                                             |  |  | 12,192 |  |  |  | 11,137 | 



|                                                                          |  |    
|------------------------------------------------------------------------- |  | ---
|AGRIUM 2012 ANNUAL REPORT  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |  | 109



---

12. PROPERTY, PLANT AND EQUIPMENT

PROPERTY, PLANT AND EQUIPMENT



|                             |  |      |     |   |                           |  |       |                       |  |  |                          |   |  |       |       |   |       |  |     |   |  |  |        |  
|---------------------------- |  | ---- | --- | - | ------------------------- |  | ----- | --------------------- |  |  | ------------------------ | - |  | ----- | ----- | - | ----- |  | --- | - |  |  | ------ | -
|December 31, 2012            |  | Land |     |   | Buildings andimprovements |  |       | Machineryandequipment |  |  | Assets underconstruction |   |  | Other |       |   | Total | 
|Cost                         |  |      |     |   |                           |  |       |                       |  |  |                          |   |  |       |       |   |       |  |     |   |  |  |        |  
|December 31, 2011            |  |      | 110 |   |                           |  | 979   |                       |  |  | 3,170                    |   |  |       | 629   |   |       |  | 104 |   |  |  | 4,992  |  
|Additions                    |  |      | 4   |   |                           |  | 206   |                       |  |  | 410                      |   |  |       | 754   |   |       |  | 39  |   |  |  | 1,413  |  
|Acquisitions                 |  |      | 2   |   |                           |  | 26    |                       |  |  | 17                       |   |  |       | 33    |   |       |  |    |   |  |  | 78     |  
|Disposals                    |  |      | (1  | ) |                           |  | (6    | )                     |  |  | (55                      | ) |  |       | (1    | ) |       |  | (1  | ) |  |  | (64    | )
|Other adjustments            |  |      |    |   |                           |  | 14    |                       |  |  | 84                       |   |  |       | (119  | ) |       |  | 4   |   |  |  | (17    | )
|Foreign currency translation |  |      | 1   |   |                           |  | 8     |                       |  |  | 44                       |   |  |       | 16    |   |       |  | 2   |   |  |  | 71     |  
|December 31, 2012            |  |      | 116 |   |                           |  | 1,227 |                       |  |  | 3,670                    |   |  |       | 1,312 |   |       |  | 148 |   |  |  | 6,473  |  
|Accumulated depreciation     |  |      |     |   |                           |  |       |                       |  |  |                          |   |  |       |       |   |       |  |     |   |  |  |        |  
|December 31, 2011            |  |      |    |   |                           |  | (435  | )                     |  |  | (1,969                   | ) |  |       |      |   |       |  | (55 | ) |  |  | (2,459 | )
|Depreciation                 |  |      |    |   |                           |  | (72   | )                     |  |  | (247                     | ) |  |       |      |   |       |  | (7  | ) |  |  | (326   | )
|Disposals                    |  |      |    |   |                           |  | 2     |                       |  |  | 42                       |   |  |       |      |   |       |  |    |   |  |  | 44     |  
|Foreign currency translation |  |      |    |   |                           |  | (5    | )                     |  |  | (28                      | ) |  |       |      |   |       |  | (1  | ) |  |  | (34    | )
|December 31, 2012            |  |      |    |   |                           |  | (510  | )                     |  |  | (2,202                   | ) |  |       |      |   |       |  | (63 | ) |  |  | (2,775 | )
|Net book value               |  |      | 116 |   |                           |  | 717   |                       |  |  | 1,468                    |   |  |       | 1,312 |   |       |  | 85  |   |  |  | 3,698  |  
|                             |  |      |     |   |                           | 
|                             |  |      |     |   |                           |  |       |                       |  |  |                          |   |  |       |       |   |       |  |     |   |  |  |        |  
|December 31, 2011            |  | Land |     |   | Buildings andimprovements |  |       | Machineryandequipment |  |  | Assets underconstruction |   |  | Other |       |   | Total | 
|Cost                         |  |      |     |   |                           |  |       |                       |  |  |                          |   |  |       |       |   |       |  |     |   |  |  |        |  
|December 31, 2010            |  |      | 91  |   |                           |  | 943   |                       |  |  | 3,009                    |   |  |       | 331   |   |       |  | 87  |   |  |  | 4,461  |  
|Additions                    |  |      | 18  |   |                           |  | 60    |                       |  |  | 220                      |   |  |       | 372   |   |       |  | 21  |   |  |  | 691    |  
|Acquisitions                 |  |      |    |   |                           |  | 7     |                       |  |  | 33                       |   |  |       | 4     |   |       |  |    |   |  |  | 44     |  
|Disposals                    |  |      | (3  | ) |                           |  | (24   | )                     |  |  | (98                      | ) |  |       |      |   |       |  | (2  | ) |  |  | (127   | )
|Other adjustments            |  |      | 2   |   |                           |  | 5     |                       |  |  | 50                       |   |  |       | (65   | ) |       |  | (1  | ) |  |  | (9     | )
|Foreign currency translation |  |      | 2   |   |                           |  | (12   | )                     |  |  | (44                      | ) |  |       | (13   | ) |       |  | (1  | ) |  |  | (68    | )
|December 31, 2011            |  |      | 110 |   |                           |  | 979   |                       |  |  | 3,170                    |   |  |       | 629   |   |       |  | 104 |   |  |  | 4,992  |  
|Accumulated depreciation     |  |      |     |   |                           |  |       |                       |  |  |                          |   |  |       |       |   |       |  |     |   |  |  |        |  
|December 31, 2010            |  |      |    |   |                           |  | (390  | )                     |  |  | (1,841                   | ) |  |       |      |   |       |  | (51 | ) |  |  | (2,282 | )
|Depreciation                 |  |      |    |   |                           |  | (62   | )                     |  |  | (222                     | ) |  |       |      |   |       |  | (8  | ) |  |  | (292   | )
|Disposals                    |  |      |    |   |                           |  | 13    |                       |  |  | 65                       |   |  |       |      |   |       |  |    |   |  |  | 78     |  
|Other adjustments            |  |      |    |   |                           |  | (1    | )                     |  |  | (1                       | ) |  |       |      |   |       |  | 3   |   |  |  | 1      |  
|Foreign currency translation |  |      |    |   |                           |  | 5     |                       |  |  | 30                       |   |  |       |      |   |       |  | 1   |   |  |  | 36     |  
|December 31, 2011            |  |      |    |   |                           |  | (435  | )                     |  |  | (1,969                   | ) |  |       |      |   |       |  | (55 | ) |  |  | (2,459 | )
|Net book value               |  |      | 110 |   |                           |  | 544   |                       |  |  | 1,201                    |   |  |       | 629   |   |       |  | 49  |   |  |  | 2,533  |  

DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT



|                                   |  |  |      |  |  |  |      | 
|---------------------------------- |  |  | ---- |  |  |  | ---- | 
|                                   |  |  | 2012 |  |  |  | 2011 | 
|Cost of product sold               |  |  | 195  |  |  |  | 182  | 
|Selling                            |  |  | 106  |  |  |  | 87   | 
|General and administrative         |  |  | 26   |  |  |  | 22   | 
|                                   |  |  | 327  |  |  |  | 291  | 
|Depreciation recorded in inventory |  |  | 16   |  |  |  | 17   | 



|    |  |                                                                          
|--- |  | -------------------------------------------------------------------------
|110 |  | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  AGRIUM 2012 ANNUAL REPORT



---

13. INTANGIBLES AND GOODWILL

INTANGIBLES AND GOODWILL



|                               |  |            |     |   |                       |  |      |            |  |  |       |   |  |                  |     |   |          |  |      |   |  |  |       |  
|------------------------------ |  | ---------- | --- | - | --------------------- |  | ---- | ---------- |  |  | ----- | - |  | ---------------- | --- | - | -------- |  | ---- | - |  |  | ----- | -
|December 31, 2012              |  | Tradenames |     |   | Customerrelationships |  |      | Technology |  |  | Other |   |  | Totalintangibles |     |   | Goodwill | 
|Cost                           |  |            |     |   |                       |  |      |            |  |  |       |   |  |                  |     |   |          |  |      |   |  |  |       |  
|December 31, 2011              |  |            | 56  |   |                       |  | 653  |            |  |  | 78    |   |  |                  | 160 |   |          |  | 947  |   |  |  | 2,277 |  
|Additions developed internally |  |            |    |   |                       |  |     |            |  |  | 19    |   |  |                  |    |   |          |  | 19   |   |  |  |      |  
|Acquisitions                   |  |            |    |   |                       |  | 18   |            |  |  |      |   |  |                  | 15  |   |          |  | 33   |   |  |  | 71    |  
|Other adjustments              |  |            |    |   |                       |  | (7   | )          |  |  |      |   |  |                  |    |   |          |  | (7   | ) |  |  | (4    | )
|Foreign currency translation   |  |            | 1   |   |                       |  | 3    |            |  |  | 2     |   |  |                  |    |   |          |  | 6    |   |  |  | 5     |  
|December 31, 2012              |  |            | 57  |   |                       |  | 667  |            |  |  | 99    |   |  |                  | 175 |   |          |  | 998  |   |  |  | 2,349 |  
|Accumulated amortization       |  |            |     |   |                       |  |      |            |  |  |       |   |  |                  |     |   |          |  |      |   |  |  |       |  
|December 31, 2011              |  |            | (9  | ) |                       |  | (158 | )          |  |  | (37   | ) |  |                  | (65 | ) |          |  | (269 | ) |  |  |      |  
|Amortization                   |  |            | (2  | ) |                       |  | (52  | )          |  |  | (19   | ) |  |                  | (19 | ) |          |  | (92  | ) |  |  |      |  
|Other adjustments              |  |            |    |   |                       |  | 1    |            |  |  |      |   |  |                  |    |   |          |  | 1    |   |  |  |      |  
|Foreign currency translation   |  |            | (1  | ) |                       |  |     |            |  |  | (1    | ) |  |                  |    |   |          |  | (2   | ) |  |  |      |  
|December 31, 2012              |  |            | (12 | ) |                       |  | (209 | )          |  |  | (57   | ) |  |                  | (84 | ) |          |  | (362 | ) |  |  |      |  
|Net book value                 |  |            | 45  |   |                       |  | 458  |            |  |  | 42    |   |  |                  | 91  |   |          |  | 636  |   |  |  | 2,349 |  
|                               |  |            |     |   |                       | 
|                               |  |            |     |   |                       |  |      |            |  |  |       |   |  |                  |     |   |          |  |      |   |  |  |       |  
|December 31, 2011              |  | Tradenames |     |   | Customerrelationships |  |      | Technology |  |  | Other |   |  | Totalintangibles |     |   | Goodwill | 
|Cost                           |  |            |     |   |                       |  |      |            |  |  |       |   |  |                  |     |   |          |  |      |   |  |  |       |  
|December 31, 2010              |  |            | 55  |   |                       |  | 602  |            |  |  | 66    |   |  |                  | 149 |   |          |  | 872  |   |  |  | 2,271 |  
|Additions developed internally |  |            |    |   |                       |  |     |            |  |  | 8     |   |  |                  |    |   |          |  | 8    |   |  |  |      |  
|Acquisitions                   |  |            |    |   |                       |  | 45   |            |  |  |      |   |  |                  | 16  |   |          |  | 61   |   |  |  | 62    |  
|Disposals                      |  |            |    |   |                       |  |     |            |  |  | (6    | ) |  |                  | (1  | ) |          |  | (7   | ) |  |  | (26   | )
|Other adjustments              |  |            |    |   |                       |  | 6    |            |  |  | 10    |   |  |                  | (4  | ) |          |  | 12   |   |  |  | (17   | )
|Foreign currency translation   |  |            | 1   |   |                       |  |     |            |  |  |      |   |  |                  |    |   |          |  | 1    |   |  |  | (13   | )
|December 31, 2011              |  |            | 56  |   |                       |  | 653  |            |  |  | 78    |   |  |                  | 160 |   |          |  | 947  |   |  |  | 2,277 |  
|Accumulated amortization       |  |            |     |   |                       |  |      |            |  |  |       |   |  |                  |     |   |          |  |      |   |  |  |       |  
|December 31, 2010              |  |            | (7  | ) |                       |  | (108 | )          |  |  | (14   | ) |  |                  | (48 | ) |          |  | (177 | ) |  |  |      |  
|Amortization                   |  |            | (2  | ) |                       |  | (49  | )          |  |  | (21   | ) |  |                  | (17 | ) |          |  | (89  | ) |  |  |      |  
|Disposals                      |  |            |    |   |                       |  |     |            |  |  | 6     |   |  |                  |    |   |          |  | 6    |   |  |  |      |  
|Other adjustments              |  |            |    |   |                       |  |     |            |  |  | (8    | ) |  |                  | (1  | ) |          |  | (9   | ) |  |  |      |  
|Foreign currency translation   |  |            |    |   |                       |  | (1   | )          |  |  |      |   |  |                  | 1   |   |          |  |     |   |  |  |      |  
|December 31, 2011              |  |            | (9  | ) |                       |  | (158 | )          |  |  | (37   | ) |  |                  | (65 | ) |          |  | (269 | ) |  |  |      |  
|Net book value                 |  |            | 47  |   |                       |  | 495  |            |  |  | 41    |   |  |                  | 95  |   |          |  | 678  |   |  |  | 2,277 |  

AMORTIZATION OF FINITE-LIVED INTANGIBLES



|                           |  |  |      |  |  |  |      | 
|-------------------------- |  |  | ---- |  |  |  | ---- | 
|                           |  |  | 2012 |  |  |  | 2011 | 
|Cost of product sold       |  |  | 4    |  |  |  | 4    | 
|Selling                    |  |  | 63   |  |  |  | 67   | 
|General and administrative |  |  | 25   |  |  |  | 18   | 
|                           |  |  | 92   |  |  |  | 89   | 

Trade names included above with a cost of $42-million (December 31, 2011  $41-million) have indefinite useful lives
for accounting purposes. The net book value of total trade names in Retail and AAT are $30-million and $15-million, respectively (2011  Retail and AAT are $30-million and $17-million, respectively).



|                                                                          |  |    
|------------------------------------------------------------------------- |  | ---
|AGRIUM 2012 ANNUAL REPORT  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |  | 111



---

GOODWILL IMPAIRMENT TESTING

We have allocated goodwill primarily to two groups of CGUs: Retail  Americas and Retail  Australia. In our annual impairment test of goodwill we did not identify impairment. Recoverable amount is
defined as fair value less costs to sell, calculated as the net present value of projected risk-adjusted post-tax cash flows over five years plus a terminal value of the CGU.

We adjust discount rates for each group of CGUs for the risk associated with achieving our forecasts and for the currency in which the cash flows are generated. Key assumptions used in testing are:



|w |  | Sales growth rates, based on internal forecasts and internal and external market information including crop nutrient price benchmarks;
|- |  | --------------------------------------------------------------------------------------------------------------------------------------



|w |  | Profit margins, based on past experience and adjusted for expected changes;
|- |  | ---------------------------------------------------------------------------



|w |  | Capital expenditures;
|- |  | ---------------------



|w |  | Discount rate, based on a capital asset pricing model using observable market data inputs;
|- |  | ------------------------------------------------------------------------------------------



|w |  | Working capital requirements;
|- |  | -----------------------------



|w |  | Operating costs as a percentage of gross profit;
|- |  | ------------------------------------------------



|w |  | Long-term growth rate, which does not exceed the long-term projected growth rates for the relevant markets; and
|- |  | ---------------------------------------------------------------------------------------------------------------



|w |  | Achievement of synergies from acquisitions.
|- |  | -------------------------------------------

DETAILS OF IMPAIRMENT TESTING



|                                                                       |  |   |                   |  |  |   |                    | 
|---------------------------------------------------------------------- |  | - | ----------------- |  |  | - | ------------------ | 
|                                                                       |  |   | Retail  Americas |  |  |   | Retail  Australia | 
|Pre-tax discount rate (%)                                              |  |   | 11.4              |  |  |   | 10.5               | 
|Terminal growth rate per annum (%)                                     |  |   | 2.5               |  |  |   | 2.5                | 
|Goodwill allocated                                                     |  | $ | 1,791-million     |  |  | $ | 403-million        | 
|Excess of recoverable amount over carrying value                       |  | $ | 3,857-million     |  |  | $ | 323-million        | 
|Change that would result in carrying value equal to recoverable amount |  |   |                   |  |  |   |                    | 
|Increase in pre-tax discount rate (%)                                  |  |   | 7.0               |  |  |   | 2.3                | 
|Decrease in long-term growth rate (%)                                  |  |   | 5.6               |  |  |   | 2.1                | 
|Decrease in forecasted EBITDA growth over forecast period (%) (a)      |  |   | 2.6               |  |  |   | 0.6                | 



|(a) | Earnings from continuing operations before finance costs, income taxes, depreciation and amortization.
|--- | ------------------------------------------------------------------------------------------------------

14. INVESTMENTS IN ASSOCIATES

INVESTMENTS IN ASSOCIATES



|                                                                                           |  |  |                  |  |  |  |              |  |  |  |              |  |  |  |      | 
|------------------------------------------------------------------------------------------ |  |  | ---------------- |  |  |  | ------------ |  |  |  | ------------ |  |  |  | ---- | 
|                                                                                           |  |  |                  |  |  |  |              |  |  |  | December 31, | 
|                                                                                           |  |  | Reporting period |  |  |  | Interest (%) |  |  |  | 2012         |  |  |  | 2011 | 
|Misr Fertilizers Production Company S.A.E. (MOPCO), a private company operating in Egypt |  |  | September 30     |  |  |  | 26           |  |  |  | 272          |  |  |  | 279  | 
|Hanfeng Evergreen Inc. (Hanfeng), listed on the TSX (12.1 million common shares)         |  |  | September 30     |  |  |  | 20           |  |  |  | 27           |  |  |  | 29   | 
|Advanced Microbial Solutions, L.L.C.                                                       |  |  | November 30      |  |  |  | 30           |  |  |  | 30           |  |  |  |     | 
|Other                                                                                      |  |  |                  |  |  |  |              |  |  |  | 53           |  |  |  | 47   | 
|                                                                                           |  |  |                  |  |  |  |              |  |  |  | 382          |  |  |  | 355  | 

On January 8, 2013, Hanfeng announced that its board of directors had received an unsolicited non-binding proposal from
the holder of approximately 20 percent of Hanfengs outstanding common shares to acquire all of the outstanding common shares not owned by it at a price of Cdn$2.20 in cash per share. As the proposal is non-binding, there can be no assurance
that any transaction will be completed or, if completed, of its terms, price or timing.



|    |  |                                                                          
|--- |  | -------------------------------------------------------------------------
|112 |  | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  AGRIUM 2012 ANNUAL REPORT



---

SUMMARIZED FINANCIAL INFORMATION OF ASSOCIATES



|                        |  |  |              |  |  |  |       | 
|----------------------- |  |  | ------------ |  |  |  | ----- | 
|                        |  |  | December 31, | 
|                        |  |  | 2012         |  |  |  | 2011  | 
|Current assets          |  |  | 479          |  |  |  | 557   | 
|Non-current assets      |  |  | 1,760        |  |  |  | 1,811 | 
|                        |  |  | 2,239        |  |  |  | 2,368 | 
|Current liabilities     |  |  | 213          |  |  |  | 298   | 
|Non-current liabilities |  |  | 939          |  |  |  | 870   | 
|                        |  |  | 1,152        |  |  |  | 1,168 | 
|                        |  |  |              |  |  |  |       | 
|                        |  |  | 2012         |  |  |  | 2011  | 
|Sales                   |  |  | 537          |  |  |  | 793   | 
|Expenses                |  |  | 487          |  |  |  | 621   | 
|Net earnings            |  |  | 50           |  |  |  | 172   | 

15. INTERESTS IN JOINT VENTURES

We have a 50 percent ownership interest in Profertil S.A. (Profertil, a joint venture with YPF S.A.), an Argentina-based manufacturer and
wholesale distributor of nitrogen products. A contractual agreement between us and the joint venture partner establishes joint control over Profertil. This investment is recorded in the Wholesale operating segment.

The consolidated statements of operations, statements of cash flows and balance sheets include, on a proportionate basis, our interest in Profertil and
other joint ventures.

SUMMARY OF INTERESTS IN JOINT VENTURES



|                                                                               |  |  |      |   |  |  |      |  
|------------------------------------------------------------------------------ |  |  | ---- | - |  |  | ---- | -
|Proportionate share of operations                                              |  |  | 2012 |   |  |  | 2011 |  
|Sales                                                                          |  |  | 422  |   |  |  | 432  |  
|Expenses                                                                       |  |  | 309  |   |  |  | 289  |  
|Income taxes                                                                   |  |  | 37   |   |  |  | 57   |  
|Proportionate share of net earnings of joint ventures                          |  |  | 76   |   |  |  | 86   |  
|                                                                               |  |  |      |   |  |  |      |  
|Proportionate share of cash flows                                              |  |  | 2012 |   |  |  | 2011 |  
|Operating activities                                                           |  |  | 100  |   |  |  | 118  |  
|Investing activities                                                           |  |  | (34  | ) |  |  | (21  | )
|Financing activities                                                           |  |  | (57  | ) |  |  | (62  | )
|Effect of exchange rate changes on cash and cash equivalents                   |  |  |     |   |  |  | 1    |  
|Proportionate share of increase in cash and cash equivalents of joint
ventures |  |  | 9    |   |  |  | 36   |  



|                                                                                           |  |  |              |   |  |  |      |  
|------------------------------------------------------------------------------------------ |  |  | ------------ | - |  |  | ---- | -
|                                                                                           |  |  | December 31, |  
|Proportionate share of assets and liabilities                                              |  |  | 2012         |   |  |  | 2011 |  
|Current assets                                                                             |  |  | 170          |   |  |  | 157  |  
|Non-current assets                                                                         |  |  | 218          |   |  |  | 198  |  
|                                                                                           |  |  | 388          |   |  |  | 355  |  
|Current liabilities                                                                        |  |  | 139          |   |  |  | 98   |  
|Non-current liabilities                                                                    |  |  | 81           |   |  |  | 87   |  
|                                                                                           |  |  | 220          |   |  |  | 185  |  
|Proportionate share of net assets of joint ventures                                        |  |  | 168          |   |  |  | 170  |  
|Cumulative loss from our interests in joint ventures included in closing retained
earnings |  |  | (10          | ) |  |  | (8   | )



|                                                                          |  |    
|------------------------------------------------------------------------- |  | ---
|AGRIUM 2012 ANNUAL REPORT  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |  | 113



---

16. OTHER ASSETS

OTHER ASSETS



|                                 |  |  |              |  |  |  |      | 
|-------------------------------- |  |  | ------------ |  |  |  | ---- | 
|                                 |  |  | December 31, | 
|                                 |  |  | 2012         |  |  |  | 2011 | 
|Other financial assets           |  |  |              |  |  |  |      | 
|Investments                      |  |  | 40           |  |  |  | 10   | 
|Receivables                      |  |  | 47           |  |  |  | 58   | 
|Derivative financial instruments |  |  |             |  |  |  | 6    | 
|                                 |  |  | 87           |  |  |  | 74   | 
|Other non-financial assets       |  |  | 43           |  |  |  | 23   | 
|                                 |  |  | 130          |  |  |  | 97   | 

17. DEBT

DEBT



|                                   |  |  |             |  |  |  |             |  |  |  |       |  |  |  |                  |  |  |  |          |   |  |  |                  |  
|---------------------------------- |  |  | ----------- |  |  |  | ----------- |  |  |  | ----- |  |  |  | ---------------- |  |  |  | -------- | - |  |  | ---------------- | -
|                                   |  |  |             |  |  |  |             |  |  |  |       |  |  |  | December 31,2012 |  |  |  |          |   |  |  | December 31,2011 |  
|                                   |  |  | Maturity    |  |  |  | Rate (%)(a) |  |  |  | Total |  |  |  | Unutilized       |  |  |  | Utilized |   |  |  | Utilized         |  
|Short-term debt (b)                |  |  |             |  |  |  |             |  |  |  |       |  |  |  |                  |  |  |  |          |   |  |  |                  |  
|Multi-jurisdictional facility (c)  |  |  | 2016        |  |  |  | 1.70        |  |  |  | 1,600 |  |  |  | 500              |  |  |  | 1,100    |   |  |  |                 |  
|European facilities (d)            |  |  | 2013        |  |  |  | 1.20        |  |  |  | 330   |  |  |  | 134              |  |  |  | 196      |   |  |  | 178              |  
|South American facilities          |  |  | 2013        |  |  |  | 6.11        |  |  |  | 100   |  |  |  | 68               |  |  |  | 32       |   |  |  | 67               |  
|                                   |  |  |             |  |  |  |             |  |  |  | 2,030 |  |  |  | 702              |  |  |  | 1,328    |   |  |  | 245              |  
|Outstanding letters of credit      |  |  |             |  |  |  |             |  |  |  |       |  |  |  | 121              |  |  |  |          |   |  |  |                  |  
|Remaining capacity available       |  |  |             |  |  |  |             |  |  |  |       |  |  |  | 581              |  |  |  |          |   |  |  |                  |  
|                                   |  |  |             |  |  |  |             |  |  |  |       |  |  |  |                  |  |  |  |          |   |  |  |                  |  
|Long-term debt                     |  |  |             |  |  |  |             |  |  |  |       |  |  |  |                  |  |  |  | 2012     |   |  |  | 2011             |  
|Floating rate bank loans           |  |  | 2013  2014 |  |  |  |             |  |  |  |       |  |  |  |                  |  |  |  | 106      |   |  |  | 35               |  
|Fixed and floating rate bank loans |  |  | 2014  2016 |  |  |  |             |  |  |  |       |  |  |  |                  |  |  |  | 46       |   |  |  | 95               |  
|Floating rate bank loans           |  |  | 2013        |  |  |  |             |  |  |  |       |  |  |  |                  |  |  |  | 460      |   |  |  | 460              |  
|3.15% debentures (e)(f)            |  |  | 2022        |  |  |  |             |  |  |  |       |  |  |  |                  |  |  |  | 500      |   |  |  |                 |  
|6.125% debentures (e)              |  |  | 2041        |  |  |  |             |  |  |  |       |  |  |  |                  |  |  |  | 500      |   |  |  | 500              |  
|6.75% debentures (e)               |  |  | 2019        |  |  |  |             |  |  |  |       |  |  |  |                  |  |  |  | 500      |   |  |  | 500              |  
|7.125% debentures (e)              |  |  | 2036        |  |  |  |             |  |  |  |       |  |  |  |                  |  |  |  | 300      |   |  |  | 300              |  
|7.7% debentures (e)                |  |  | 2017        |  |  |  |             |  |  |  |       |  |  |  |                  |  |  |  | 100      |   |  |  | 100              |  
|7.8% debentures (e)                |  |  | 2027        |  |  |  |             |  |  |  |       |  |  |  |                  |  |  |  | 125      |   |  |  | 125              |  
|Other                              |  |  |             |  |  |  |             |  |  |  |       |  |  |  |                  |  |  |  | 21       |   |  |  | 23               |  
|                                   |  |  |             |  |  |  |             |  |  |  |       |  |  |  |                  |  |  |  | 2,658    |   |  |  | 2,138            |  
|Unamortized transaction costs      |  |  |             |  |  |  |             |  |  |  |       |  |  |  |                  |  |  |  | (25      | ) |  |  | (20              | )
|Current portion of long-term debt  |  |  |             |  |  |  |             |  |  |  |       |  |  |  |                  |  |  |  | (518     | ) |  |  | (20              | )
|                                   |  |  |             |  |  |  |             |  |  |  |       |  |  |  |                  |  |  |  | 2,115    |   |  |  | 2,098            |  



|(a) | Weighted average rates at December 31, 2012.
|--- | --------------------------------------------

|(b) | The facilities bear interest at various base rates plus a fixed or variable margin.
|--- | -----------------------------------------------------------------------------------

|(c) | The multi-jurisdictional revolving credit facility is unsecured and consists of North American and Australian tranches and an accordion feature that allows us to request
an increase in the facility of up to $900-million. Outstanding letters of credit reduce our ability to draw on this facility. We also maintain a separate $30-million standby letter of credit facility, of which $27-million is outstanding.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(d) | Of the utilized amount, $10-million (December 31, 2011  $7-million) was secured. The utilized balance includes euro-denominated debt of $196-million (December 31,
2011  $106-million).
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(e) | Debentures have various provisions that allow redemption prior to maturity, at our option, at specified prices.
|--- | ---------------------------------------------------------------------------------------------------------------

|(f) | On October 1, 2012, we issued $500-million of 3.15 percent debentures due October 2022.
|--- | ---------------------------------------------------------------------------------------



|    |  |                                                                          
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|114 |  | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  AGRIUM 2012 ANNUAL REPORT



---

18. ACCOUNTS PAYABLE

ACCOUNTS PAYABLE



|                                 |  |  |              |  |  |  |       | 
|-------------------------------- |  |  | ------------ |  |  |  | ----- | 
|                                 |  |  | December 31, | 
|                                 |  |  | 2012         |  |  |  | 2011  | 
|Trade                            |  |  | 1,232        |  |  |  | 1,165 | 
|Customer prepayments             |  |  | 1,104        |  |  |  | 826   | 
|Accrued liabilities              |  |  | 880          |  |  |  | 696   | 
|Other taxes                      |  |  | 25           |  |  |  | 45    | 
|Accrued interest                 |  |  | 45           |  |  |  | 42    | 
|Dividends                        |  |  | 75           |  |  |  | 36    | 
|Derivative financial instruments |  |  | 19           |  |  |  | 25    | 
|Share-based payments             |  |  | 161          |  |  |  | 124   | 
|                                 |  |  | 3,541        |  |  |  | 2,959 | 

19. POST-EMPLOYMENT BENEFITS

OBLIGATIONS AND ASSETS



|                                                           |  |  |                              |   |  |  |                              |   |  |  |      |   |  |  |      |  
|---------------------------------------------------------- |  |  | ---------------------------- | - |  |  | ---------------------------- | - |  |  | ---- | - |  |  | ---- | -
|                                                           |  |  | Defined benefitpension plans |   |  |  | Post-retirementbenefit plans |  
|                                                           |  |  | 2012                         |   |  |  | 2011                         |   |  |  | 2012 |   |  |  | 2011 |  
|Change in defined benefit obligations                      |  |  |                              |   |  |  |                              |   |  |  |      |   |  |  |      |  
|Balance, beginning of year                                 |  |  | 272                          |   |  |  | 230                          |   |  |  | 79   |   |  |  | 68   |  
|Foreign currency translation on Canadian obligations       |  |  | 3                            |   |  |  | (3                           | ) |  |  | 1    |   |  |  | (2   | )
|Employee contributions                                     |  |  |                             |   |  |  |                             |   |  |  | 1    |   |  |  | 1    |  
|Interest cost                                              |  |  | 12                           |   |  |  | 12                           |   |  |  | 3    |   |  |  | 3    |  
|Service cost                                               |  |  | 8                            |   |  |  | 6                            |   |  |  | 3    |   |  |  | 3    |  
|Past service cost                                          |  |  | 1                            |   |  |  |                             |   |  |  |     |   |  |  |     |  
|Actuarial loss (gain) recognized in equity                 |  |  | 18                           |   |  |  | 37                           |   |  |  | (7   | ) |  |  | 8    |  
|Benefits paid                                              |  |  | (12                          | ) |  |  | (10                          | ) |  |  | (3   | ) |  |  | (2   | )
|Balance, end of year                                       |  |  | 302                          |   |  |  | 272                          |   |  |  | 77   |   |  |  | 79   |  
|Arising from:                                              |  |  |                              |   |  |  |                              |   |  |  |      |   |  |  |      |  
|Funded plans                                               |  |  | 256                          |   |  |  | 232                          |   |  |  |     |   |  |  |     |  
|Unfunded plans                                             |  |  | 46                           |   |  |  | 40                           |   |  |  | 77   |   |  |  | 79   |  
|                                                           |  |  | 302                          |   |  |  | 272                          |   |  |  | 77   |   |  |  | 79   |  
|Change in plan assets                                      |  |  |                              |   |  |  |                              |   |  |  |      |   |  |  |      |  
|Fair value, beginning of year                              |  |  | 159                          |   |  |  | 162                          |   |  |  |     |   |  |  |     |  
|Foreign currency translation on Canadian assets            |  |  | 3                            |   |  |  | (2                           | ) |  |  |     |   |  |  |     |  
|Expected return on plan assets                             |  |  | 10                           |   |  |  | 10                           |   |  |  |     |   |  |  |     |  
|Actuarial gain (loss) recognized in equity                 |  |  | 4                            |   |  |  | (13                          | ) |  |  |     |   |  |  |     |  
|Employer contributions                                     |  |  | 31                           |   |  |  | 12                           |   |  |  | 2    |   |  |  | 1    |  
|Employee contributions                                     |  |  |                             |   |  |  |                             |   |  |  | 1    |   |  |  | 1    |  
|Benefits paid                                              |  |  | (12                          | ) |  |  | (10                          | ) |  |  | (3   | ) |  |  | (2   | )
|Fair value, end of year                                    |  |  | 195                          |   |  |  | 159                          |   |  |  |     |   |  |  |     |  
|Unfunded status and provision for post-employment benefits |  |  | 107                          |   |  |  | 113                          |   |  |  | 77   |   |  |  | 79   |  
|                                                           |  |  |                              |   |  |  |                              |   |  |  |      |   |  |  |      |  
|                                                           |  |  |                              |   |  |  |                              |   |  |  | 2012 |   |  |  | 2011 |  
|Actual return on defined benefit plan assets               |  |  |                              |   |  |  |                              |   |  |  | 14   |   |  |  | (3   | )
|Liability experience loss adjustments                      |  |  |                              |   |  |  |                              |   |  |  | 3    |   |  |  | 4    |  
|Asset experience (gain) loss adjustments                   |  |  |                              |   |  |  |                              |   |  |  | (4   | ) |  |  | 13   |  



|                                                                          |  |    
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---

HISTORICAL INFORMATION



|                                            |  |  |              |  |  |  |      | 
|------------------------------------------- |  |  | ------------ |  |  |  | ---- | 
|                                            |  |  | December 31, | 
|                                            |  |  | 2012         |  |  |  | 2011 | 
|Present value of defined benefit obligation |  |  | 379          |  |  |  | 351  | 
|Fair value of plan assets                   |  |  | 195          |  |  |  | 159  | 
|Deficit in the plans                        |  |  | 184          |  |  |  | 192  | 

ACTUARIAL CALCULATIONS OF EXPENSE



|                                                 |  |  |      |   |  |  |      |  
|------------------------------------------------ |  |  | ---- | - |  |  | ---- | -
|                                                 |  |  | 2012 |   |  |  | 2011 |  
|Defined benefit pension plans                    |  |  |      |   |  |  |      |  
|Service cost for benefits earned during the year |  |  | 8    |   |  |  | 6    |  
|Past service cost                                |  |  | 1    |   |  |  |     |  
|Interest cost on accrued benefit obligations     |  |  | 12   |   |  |  | 12   |  
|Expected return on plan assets                   |  |  | (10  | ) |  |  | (10  | )
|Net amortization and deferral                    |  |  | 1    |   |  |  |     |  
|Net expense                                      |  |  | 12   |   |  |  | 8    |  
|Post-retirement benefit plans                    |  |  |      |   |  |  |      |  
|Service cost for benefits earned during the year |  |  | 3    |   |  |  | 3    |  
|Interest cost on accrued benefit obligations     |  |  | 3    |   |  |  | 3    |  
|Net expense                                      |  |  | 6    |   |  |  | 6    |  
|Defined contribution pension plans               |  |  | 51   |   |  |  | 46   |  
|Total expense                                    |  |  | 69   |   |  |  | 60   |  

EXPENSE LINE ITEMS



|                           |  |  |      |  |  |  |      | 
|-------------------------- |  |  | ---- |  |  |  | ---- | 
|                           |  |  | 2012 |  |  |  | 2011 | 
|Cost of product sold       |  |  | 37   |  |  |  | 32   | 
|General and administrative |  |  | 26   |  |  |  | 23   | 
|Other expenses             |  |  | 6    |  |  |  | 5    | 
|                           |  |  | 69   |  |  |  | 60   | 

ACTUARIAL LOSS RECOGNIZED IN OTHER COMPREHENSIVE INCOME



|                                      |  |  |      |  |  |  |      | 
|------------------------------------- |  |  | ---- |  |  |  | ---- | 
|                                      |  |  | 2012 |  |  |  | 2011 | 
|Cumulative balance, beginning of year |  |  | 80   |  |  |  | 22   | 
|Amounts recognized during the year    |  |  | 7    |  |  |  | 58   | 
|Cumulative balance, end of year       |  |  | 87   |  |  |  | 80   | 

ACTUARIAL ASSUMPTIONS(percent)
(expressed as weighted averages)



|                                            |  |                           |      |  |                        |  |      |  |  |  |      |  |  |  |      | 
|------------------------------------------- |  | ------------------------- | ---- |  | ---------------------- |  | ---- |  |  |  | ---- |  |  |  | ---- | 
|                                            |  | Future benefitsobligation |      |  | Future benefitsexpense | 
|                                            |  |                           | 2012 |  |                        |  | 2011 |  |  |  | 2012 |  |  |  | 2011 | 
|Defined benefit pension plans               |  |                           |      |  |                        |  |      |  |  |  |      |  |  |  |      | 
|Discount rate                               |  |                           | 4    |  |                        |  | 4    |  |  |  | 4    |  |  |  | 5    | 
|Expected long-term rate of return on assets |  |                           | N/A  |  |                        |  | N/A  |  |  |  | 6    |  |  |  | 6    | 
|Rate of increase in compensation levels     |  |                           | 4    |  |                        |  | 4    |  |  |  | 4    |  |  |  | 4    | 
|Post-retirement benefit plans               |  |                           |      |  |                        |  |      |  |  |  |      |  |  |  |      | 
|Discount rate                               |  |                           | 4    |  |                        |  | 4    |  |  |  | 4    |  |  |  | 5    | 



|    |  |                                                                          
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|116 |  | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  AGRIUM 2012 ANNUAL REPORT



---

The discount rate assumed is based on high-quality (minimum rating of AA or greater) fixed income investments
with cash flows that match the currency, timing and amount of the plans expected cash flows.

Our assumption for the expected long-term
rate of return on assets is based on long-term expectations of inflation, together with the expected long-term real return for each asset class, weighted in accordance with the stated investment policy for the plans. We base expectations of real
returns and inflation on a combination of current market conditions, historical capital market data and future expectations.

The estimated
aggregate expected contribution to fund our defined benefit plans for 2013 is $8-million.

ASSUMED AND ULTIMATE HEALTH CARE COST TREND
RATES



|                                                                 |  |  |      |  |  |  |      | 
|---------------------------------------------------------------- |  |  | ---- |  |  |  | ---- | 
|                                                                 |  |  | 2012 |  |  |  | 2011 | 
|Health care cost trend rate assumed for the next fiscal year (%) |  |  | 7    |  |  |  | 8    | 
|Ultimate health care cost trend rate (%)                         |  |  | 5    |  |  |  | 5    | 
|Fiscal year the rate reaches the ultimate trend rate             |  |  | 2018 |  |  |  | 2018 | 

MORTALITY ASSUMPTIONS PER LATEST AVAILABLE STANDARD MORTALITY TABLES



|                                                  |  |  |      |  |  |  |      | 
|------------------------------------------------- |  |  | ---- |  |  |  | ---- | 
|                                                  |  |  | 2012 |  |  |  | 2011 | 
|Average life expectancy  currently aged 60 years |  |  |      |  |  |  |      | 
|Males                                             |  |  | 24   |  |  |  | 24   | 
|Females                                           |  |  | 27   |  |  |  | 27   | 

EFFECT OF ASSUMED HEALTH CARE COST TREND RATE CHANGES



|                                                         |  |  |                              |  |  |  |                              |  |  |  |      |   |  |  |      |  
|-------------------------------------------------------- |  |  | ---------------------------- |  |  |  | ---------------------------- |  |  |  | ---- | - |  |  | ---- | -
|                                                         |  |  | One percentagepoint increase |  |  |  | One percentagepoint decrease | 
|                                                         |  |  | 2012                         |  |  |  | 2011                         |  |  |  | 2012 |   |  |  | 2011 |  
|Effect on accumulated post-employment benefit obligation |  |  | 9                            |  |  |  | 11                           |  |  |  | (7   | ) |  |  | (8   | )
|Effect on total of service and interest cost             |  |  | 1                            |  |  |  | 1                            |  |  |  | (1   | ) |  |  | (1   | )

ASSET ALLOCATION AND INVESTMENT STRATEGY

Our investment objective for our defined benefit plans is to maximize long-term return on plan assets using a mix of equities and fixed income investments while managing an appropriate level of risk. The
equity investments are diversified across Canadian and foreign securities. It is our policy not to invest in commodities, precious metals, mineral rights, bullion or collectibles. Derivative financial instruments may be used to create a desirable
asset mix position, adjust the duration of a fixed income portfolio, replicate the investment performance of interest rates or a recognized capital market index, manage currency exposure and reduce risk. Derivative financial instruments are not used
to create exposures to securities that would otherwise not be permitted under our investment policy.

DEFINED BENEFIT PLANS  ASSET ALLOCATION



|                           |  |  |                   |  |  |  |             |  |  |  |      | 
|-------------------------- |  |  | ----------------- |  |  |  | ----------- |  |  |  | ---- | 
|                           |  |  | Target allocation |  |  |  | Plan assets | 
|Asset categories (percent) |  |  | 2013              |  |  |  | 2012        |  |  |  | 2011 | 
|Equity securities          |  |  | 62                |  |  |  | 62          |  |  |  | 61   | 
|Debt securities            |  |  | 38                |  |  |  | 37          |  |  |  | 38   | 
|Cash and other             |  |  |                  |  |  |  | 1           |  |  |  | 1    | 

DEFINED BENEFIT PLANS  EFFECTIVE DATES OF MOST RECENT VALUATIONS FOR FUNDING PURPOSES



|               |  |  |                                        |  |  |  |                                        | 
|-------------- |  |  | -------------------------------------- |  |  |  | -------------------------------------- | 
|               |  |  | Current effective date                 |  |  |  | Next required date                     | 
|Canadian plans |  |  | December 31, 2011and December 31, 2009 |  |  |  | December 31, 2014and December 31, 2011 | 
|U.S. plans     |  |  | January 1, 2012                        |  |  |  | January 1, 2013                        | 



|                                                                          |  |    
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|AGRIUM 2012 ANNUAL REPORT  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |  | 117



---

20. OTHER PROVISIONS

OTHER PROVISIONS



|                                                       |  |  |                             |   |  |  |                    |   |  |  |            |   |  |  |       |  
|------------------------------------------------------ |  |  | --------------------------- | - |  |  | ------------------ | - |  |  | ---------- | - |  |  | ----- | -
|December 31, 2012                                      |  |  | Environmentalremediation(a) |   |  |  | Assetretirement(b) |   |  |  | Litigation |   |  |  | Total |  
|December 31, 2011                                      |  |  | 131                         |   |  |  | 209                |   |  |  | 27         |   |  |  | 367   |  
|Additional provisions or changes in estimate (note 25) |  |  | 80                          |   |  |  | 122                |   |  |  | 28         |   |  |  | 230   |  
|Draw-downs                                             |  |  | (47                         | ) |  |  | (16                | ) |  |  | (18        | ) |  |  | (81   | )
|Reversals                                              |  |  | (5                          | ) |  |  | (1                 | ) |  |  | (8         | ) |  |  | (14   | )
|Accretion                                              |  |  | 3                           |   |  |  | 9                  |   |  |  |           |   |  |  | 12    |  
|Other adjustments                                      |  |  | 8                           |   |  |  | (4                 | ) |  |  |           |   |  |  | 4     |  
|Foreign currency translation                           |  |  |                            |   |  |  | 3                  |   |  |  |           |   |  |  | 3     |  
|December 31, 2012                                      |  |  | 170                         |   |  |  | 322                |   |  |  | 29         |   |  |  | 521   |  
|Current portion                                        |  |  | 74                          |   |  |  | 5                  |   |  |  | 29         |   |  |  | 108   |  
|Non-current portion                                    |  |  | 96                          |   |  |  | 317                |   |  |  |           |   |  |  | 413   |  
|                                                       |  |  | 170                         |   |  |  | 322                |   |  |  | 29         |   |  |  | 521   |  



|(a) | We estimate that our environmental remediation liabilities will be settled between 2013 and 2041. Obligations are estimated using discount rates ranging from 0.65 percent
to 4.55 percent (2011  1.00 percent to 4.55 percent).
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | Mining, extraction, processing and distribution activities result in asset retirement obligations in the normal course of operations. Obligations include closure,
dismantlement, site restoration or other legal or constructive obligations for termination and retirement of assets. Expenditures may occur before and after closure. Expenditures for the obligations are expected to occur over the next 30 years with
the exception of those for potash operations, which are expected to occur after 100 years. Timing of expenditures is dependent on a number of factors, such as the life and nature of the asset, legal requirements and technology. Obligations are
estimated using discount rates ranging from 1.57 percent to 4.55 percent (2011  2.05 percent to 4.55 percent).
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

21. OTHER LIABILITIES

OTHER LIABILITIES



|                                 |  |  |              |  |  |  |      | 
|-------------------------------- |  |  | ------------ |  |  |  | ---- | 
|                                 |  |  | December 31, | 
|                                 |  |  | 2012         |  |  |  | 2011 | 
|Other financial liabilities      |  |  |              |  |  |  |      | 
|Derivative financial instruments |  |  |             |  |  |  | 16   | 
|Other                            |  |  | 37           |  |  |  | 20   | 
|                                 |  |  | 37           |  |  |  | 36   | 
|Other non-financial liabilities  |  |  |              |  |  |  |      | 
|Share-based payments             |  |  | 43           |  |  |  | 23   | 
|                                 |  |  | 80           |  |  |  | 59   | 

22. SHARE-BASED PAYMENTS

SHARE-BASED PAYMENTS



|                                                             |  |                                                 |  |                                           |  |                                          |  |          |  |                                             
|------------------------------------------------------------ |  | ----------------------------------------------- |  | ----------------------------------------- |  | ---------------------------------------- |  | -------- |  | --------------------------------------------
|Plan                                                         |  | Eligibility                                     |  | Granted                                   |  | Vesting period                           |  | Term     |  | Settlement                                  
|                                                             |  |                                                 |  |                                           | 
|Stock Options and Tandem Stock Appreciation Rights (TSARs) |  | Officers and employees                          |  | Annually                                  |  | 25% per yearover four years              |  | 10 years |  | Cash or shares                              
|                                                             |  |                                                 |  |                                           | 
|Stock Appreciation Rights (SARs)                           |  | Certain employees outside
Canada                |  | Annually                                  |  | 25% per yearover four years              |  | 10 years |  | Cash                                        
|                                                             |  |                                                 |  |                                           | 
|Performance Share Units (PSUs)                             |  | Executive officers and other
eligible employees |  | Annually                                  |  | On the thirdanniversary ofthe grant date |  | N/A      |  | Cash                                        
|                                                             |  |                                                 |  |                                           | 
|Director Deferred Share Units
(DSUs)                       |  | Directors                                       |  | At the discretionof the Board ofDirectors |  | Fully vestedupon grant                   |  | N/A      |  | In cash onDirectors departurefrom the Board



|    |  |                                                                          
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|118 |  | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  AGRIUM 2012 ANNUAL REPORT



---

STOCK OPTIONS AND TANDEM STOCK APPRECIATION RIGHTS PLAN

The stock option plan permits the attachment of SARs to all grants of options. Option holders who are granted TSARs have the right to surrender vested
options in cash or shares. The election to settle a TSAR in cash entitles the holder to receive a cash payment equal to the excess of the U.S. dollar equivalent of the highest price of our shares on the NYSE on the date of exercise over the exercise
price of the TSAR. We expect the majority of option holders will elect to exercise their options as a SAR and surrender their options, and therefore receive settlement in cash.

Our Board of Directors has discretion to accelerate vesting under the plan on the retirement, termination, death or disability of an optionee or on a change in ownership or control of Agrium.

OPTIONS AND TSARS ACTIVITY(number of units in thousands; weighted average price in U.S.
dollars)



|                                                 |  |  |       |   |  |  |       |  |  |  |       |   |  |  |       | 
|------------------------------------------------ |  |  | ----- | - |  |  | ----- |  |  |  | ----- | - |  |  | ----- | 
|                                                 |  |  | 2012  |   |  |  | 2011  | 
|Options and TSARs                                |  |  | Units |   |  |  | Price |  |  |  | Units |   |  |  | Price | 
|Outstanding, beginning of year                   |  |  | 2,432 |   |  |  | 42.16 |  |  |  | 2,521 |   |  |  | 36.98 | 
|Granted (a)                                      |  |  | 258   |   |  |  | 88.27 |  |  |  | 179   |   |  |  | 91.07 | 
|Forfeited                                        |  |  | (278  | ) |  |  | 36.59 |  |  |  | (109  | ) |  |  | 37.05 | 
|Exercised (b)                                    |  |  | (266  | ) |  |  | 17.43 |  |  |  | (156  | ) |  |  | 16.92 | 
|Expired                                          |  |  |      |   |  |  |      |  |  |  | (3    | ) |  |  | 61.03 | 
|Outstanding, end of year                         |  |  | 2,146 |   |  |  | 51.55 |  |  |  | 2,432 |   |  |  | 42.16 | 
|Exercisable, end of year                         |  |  | 1,533 |   |  |  | 42.18 |  |  |  | 1,762 |   |  |  | 34.12 | 
|Maximum available for future grants, end of year |  |  | 943   |   |  |  |       |  |  |  | 923   |   |  |  |       | 
|Cash received from equity-settled awards         |  |  |       |   |  |  | 7     |  |  |  |       |   |  |  | 5     | 
|Tax benefit from equity-settled awards           |  |  |       |   |  |  | 2     |  |  |  |       |   |  |  | 1     | 



|(a) | The fair value at the grant date was $45.90 (2011  $53.28).
|--- | ------------------------------------------------------------

|(b) | The weighted average share price at the exercise date was $91.46 (2011  $86.34).
|--- | ---------------------------------------------------------------------------------

OPTIONS AND TSARS OUTSTANDING(number of units in thousands; weighted average remaining
contractual life in years; weighted average exercise price in U.S. dollars)



|                         |  |  |                          |  |  |  |                     |  |  |  |               |  |  |  |       |  |  |  |               | 
|------------------------ |  |  | ------------------------ |  |  |  | ------------------- |  |  |  | ------------- |  |  |  | ----- |  |  |  | ------------- | 
|At December 31, 2012     |  |  | Options Outstanding      |  |  |  | Options Exercisable | 
|Range of exercise prices |  |  | Remainingcontractuallife |  |  |  | Units               |  |  |  | Exerciseprice |  |  |  | Units |  |  |  | Exerciseprice | 
|Less than 15.86          |  |  | 1                        |  |  |  | 192                 |  |  |  | 15.61         |  |  |  | 192   |  |  |  | 15.61         | 
|15.87 to 39.56           |  |  | 3                        |  |  |  | 333                 |  |  |  | 24.49         |  |  |  | 333   |  |  |  | 24.49         | 
|39.57 to 40.02           |  |  | 4                        |  |  |  | 313                 |  |  |  | 39.73         |  |  |  | 313   |  |  |  | 39.73         | 
|40.03 to 61.43           |  |  | 6                        |  |  |  | 418                 |  |  |  | 40.44         |  |  |  | 299   |  |  |  | 40.46         | 
|61.44 to 94.15           |  |  | 7                        |  |  |  | 890                 |  |  |  | 78.81         |  |  |  | 396   |  |  |  | 73.22         | 
|                         |  |  | 5                        |  |  |  | 2,146               |  |  |  | 51.55         |  |  |  | 1,533 |  |  |  | 42.18         | 



|                                                                          |  |    
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|AGRIUM 2012 ANNUAL REPORT  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |  | 119



---

STOCK APPRECIATION RIGHTS PLAN

SARs entitle an employee to receive a cash payment equal to the excess of the closing price of our shares on the NYSE on the date of exercise over the exercise price of the right.

SARS ACTIVITY(number of units in thousands; weighted average price in U.S. dollars)



|                               |  |  |       |   |  |  |       |  |  |  |       |   |  |  |       | 
|------------------------------ |  |  | ----- | - |  |  | ----- |  |  |  | ----- | - |  |  | ----- | 
|                               |  |  | 2012  |   |  |  | 2011  | 
|SARs                           |  |  | Units |   |  |  | Price |  |  |  | Units |   |  |  | Price | 
|Outstanding, beginning of year |  |  | 504   |   |  |  | 50.87 |  |  |  | 487   |   |  |  | 44.92 | 
|Granted (a)                    |  |  | 73    |   |  |  | 88.27 |  |  |  | 59    |   |  |  | 91.13 | 
|Forfeited                      |  |  | (5    | ) |  |  | 63.19 |  |  |  |      |   |  |  |      | 
|Exercised (b)                  |  |  | (189  | ) |  |  | 38.24 |  |  |  | (41   | ) |  |  | 37.76 | 
|Expired                        |  |  |      |   |  |  |      |  |  |  | (1    | ) |  |  | 63.22 | 
|Outstanding, end of year       |  |  | 383   |   |  |  | 64.10 |  |  |  | 504   |   |  |  | 50.87 | 
|Exercisable, end of year       |  |  | 203   |   |  |  | 53.74 |  |  |  | 306   |   |  |  | 41.81 | 



|(a) | The fair value at the grant date was $45.90 (2011  $53.33).
|--- | ------------------------------------------------------------

|(b) | The weighted average share price at the exercise date was $95.22 (2011  $91.70).
|--- | ---------------------------------------------------------------------------------

SARS OUTSTANDING(number of units in thousands; weighted average remaining contractual life in
years; weighted average exercise price in U.S. dollars)



|                         |  |  |                          |  |  |  |                  |  |  |  |               |  |  |  |       |  |  |  |               | 
|------------------------ |  |  | ------------------------ |  |  |  | ---------------- |  |  |  | ------------- |  |  |  | ----- |  |  |  | ------------- | 
|At December 31, 2012     |  |  | SARs Outstanding         |  |  |  | SARs Exercisable | 
|Range of exercise prices |  |  | Remainingcontractuallife |  |  |  | Units            |  |  |  | Exerciseprice |  |  |  | Units |  |  |  | Exerciseprice | 
|Less than 38.53          |  |  | 3                        |  |  |  | 15               |  |  |  | 24.63         |  |  |  | 15    |  |  |  | 24.63         | 
|38.54 to 40.02           |  |  | 4                        |  |  |  | 42               |  |  |  | 39.73         |  |  |  | 42    |  |  |  | 39.73         | 
|40.03 to 49.02           |  |  | 6                        |  |  |  | 88               |  |  |  | 40.30         |  |  |  | 58    |  |  |  | 40.30         | 
|49.03 to 68.65           |  |  | 7                        |  |  |  | 62               |  |  |  | 63.13         |  |  |  | 26    |  |  |  | 63.12         | 
|68.66 to 91.13           |  |  | 8                        |  |  |  | 176              |  |  |  | 85.51         |  |  |  | 62    |  |  |  | 78.53         | 
|                         |  |  | 7                        |  |  |  | 383              |  |  |  | 64.10         |  |  |  | 203   |  |  |  | 53.74         | 

PERFORMANCE SHARE UNIT PLAN

PSUs vest based upon the relative ranking of our average quarterly total shareholder return over a three-year performance cycle, compared against the average quarterly total shareholder return over the same
period of a peer group of companies. The number of units that vest ranges between none of the original PSUs granted, up to 150 percent of the original PSUs granted, depending on our relative performance ranking.

The value of each PSU granted is based on the average closing price of our common shares on the NYSE during the last five days of the three-year cycle. When
cash dividends are paid on our common shares, additional PSUs of equivalent value are credited to the designated employees account.



|    |  |                                                                          
|--- |  | -------------------------------------------------------------------------
|120 |  | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  AGRIUM 2012 ANNUAL REPORT



---

PSU ACTIVITY(number of units in
thousands)



|                               |  |  |      |   |  |  |      |  
|------------------------------ |  |  | ---- | - |  |  | ---- | -
|                               |  |  | 2012 |   |  |  | 2011 |  
|Outstanding, beginning of year |  |  | 672  |   |  |  | 659  |  
|Granted                        |  |  | 257  |   |  |  | 166  |  
|Forfeited                      |  |  | (12  | ) |  |  | (9   | )
|Exercised                      |  |  | (316 | ) |  |  | (144 | )
|Outstanding, end of year       |  |  | 601  |   |  |  | 672  |  

DIRECTOR DEFERRED SHARE UNIT PLANS

Under our DSU plans, directors can elect to have a portion or all of their directors fees paid in DSUs, whereby DSUs issued are calculated by dividing the directors fees by the fair market value
of our common shares on the date that the fees become payable. The plans also permit grants at the discretion of the Board of Directors.

COMPENSATION EXPENSE (RECOVERY ) BY PLAN



|                        |  |  |      |  |  |  |      |  
|----------------------- |  |  | ---- |  |  |  | ---- | -
|                        |  |  | 2012 |  |  |  | 2011 |  
|Stock options and TSARs |  |  | 53   |  |  |  | (33  | )
|SARs                    |  |  | 13   |  |  |  | (9   | )
|PSUs                    |  |  | 34   |  |  |  | (6   | )
|DSUs                    |  |  | 8    |  |  |  | (3   | )
|                        |  |  | 108  |  |  |  | (51  | )

LIABILITIES FOR CASH-SETTLED PLANS



|                                                  |  |  |              |  |  |  |      | 
|------------------------------------------------- |  |  | ------------ |  |  |  | ---- | 
|                                                  |  |  | December 31, | 
|                                                  |  |  | 2012         |  |  |  | 2011 | 
|Total fair value liability for cash-settled plans |  |  | 204          |  |  |  | 147  | 
|Total intrinsic liability for cash-settled plans  |  |  | 157          |  |  |  | 108  | 

At December 31, 2012, there was $27-million of unrecognized compensation expense for unvested awards. During 2012, cash
of $54-million was used to settle our liability for awards exercised.

VALUATION MODELS

The fair value of TSARs and SARs is determined using a Black-Scholes model and the fair value of PSUs is determined using a Monte Carlo model, taking into
account the terms and conditions upon which the share options were granted. The expected annual volatility is estimated taking into consideration historic share price volatility.

VALUATION MODEL INPUTS



|                                   |  |  |              |  |  |  |       | 
|---------------------------------- |  |  | ------------ |  |  |  | ----- | 
|                                   |  |  | December 31, | 
|                                   |  |  | 2012         |  |  |  | 2011  | 
|Grant price (U.S. dollars)         |  |  | 41.98        |  |  |  | 38.45 | 
|Share price (U.S. dollars)         |  |  | 99.87        |  |  |  | 67.11 | 
|Expected annual volatility (%)     |  |  | 0.38         |  |  |  | 0.47  | 
|Risk-free interest rate (%)        |  |  | 0.59         |  |  |  | 0.76  | 
|Expected annual dividend yield (%) |  |  | 1.00         |  |  |  | 0.58  | 
|Expected life (years)              |  |  | 4            |  |  |  | 4     | 
|Forfeiture rate (%)                |  |  |             |  |  |  |      | 



|                                                                          |  |    
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|AGRIUM 2012 ANNUAL REPORT  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |  | 121



---

23. FINANCIAL INSTRUMENTS

RISK MANAGEMENT

In the normal
course of business, our balance sheet, results of operations and cash flows are exposed to various risks. On an annual basis, the Board approves a strategic plan that takes into account the opportunities and major risks of our business and
mitigation factors to reduce these risks. The Board sets upper limits on the transactional and balance sheet exposures to be managed and the time periods over which exposures may be managed. Compliance with these limits and associated exposure
management activity is monitored by the Corporate Financial Risk Committee which also reviews risk management policies and procedures on an annual basis. We manage risk in accordance with our Exposure Management Policy. The objective of the policy
is to reduce volatility in cash flows and earnings. Risks we manage include:



|                                                                                        |  |                                                                                                                                         |  |                                                                                                                                              
|--------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------
|Item                                                                                    |  | Affected by                                                                                                                             |  | Risk management policies                                                                                                                     
|Sales                                                                                   |  | Product prices, foreign currency exchange rates                                                                                         |  | Foreign currency forward and option contracts                                                                                                
|                                                                                        |  |                                                                                                                                        
|Cost of product sold  natural gas and power                                            |  | Price of natural gas and power                                                                                                          |  | Natural gas forward, swap and option contracts and power swap contracts                                                                      
|                                                                                        |  |                                                                                                                                        
|Cost of product sold  product purchased for resale                                     |  | Price of nutrients purchased for resale                                                                                                 |  | Nutrient swaps and fixed price product purchase commitments                                                                                  
|                                                                                        |  |                                                                                                                                        
|Selling, general and administrative, and other expenses denominated in local currencies |  | Foreign currency exchange rates                                                                                                         |  | Foreign currency forward and option contracts                                                                                                
|                                                                                        |  |                                                                                                                                        
|Capital expenditures                                                                    |  | Foreign currency exchange rates                                                                                                         |  | Foreign currency forward and option contracts                                                                                                
|                                                                                        |  |                                                                                                                                        
|Interest expense                                                                        |  | USD, EUR and AUD interest rates                                                                                                         |  | Maintaining a combination of fixed and floating rate debt; interest rate swaps to manage risk for up to 10 years                             
|                                                                                        |  |                                                                                                                                        
|Financial instruments                                                                   |  |                                                                                                                                         |  |                                                                                                                                              
|                                                                                        |  |                                                                                                                                        
|Market risk  currency risk                                                             |  | USD balances in Canadian, Australian, European and South American subsidiaries; foreign currencies held in USD denominated subsidiaries |  | Foreign currency forward and option contracts to manage risk for up to three years                                                           
|                                                                                        |  |                                                                                                                                        
|Market risk  commodity price risk (natural gas, seed, power and nutrient price risk)   |  | Market prices of natural gas, seed, power and nutrients                                                                                 |  | Natural gas and seed forward, swap and option contracts and power swap contracts to manage power price risk for up to five years             
|                                                                                        |  |                                                                                                                                        
|Market risk  interest rate risk                                                        |  | Changes in market interest rates                                                                                                        |  | Maintaining a combination of fixed and floating rate debt; interest rate swaps to manage risk for up to 10 years                             
|                                                                                        |  |                                                                                                                                        
|Credit risk                                                                             |  | Ability of customers or counterparties to financial instruments to meet obligations                                                     |  | Credit approval and monitoring practices; counterparty policies                                                                              
|                                                                                        |  |                                                                                                                                        
|Liquidity risk                                                                          |  | Fluctuations in cash flows                                                                                                              |  | Preparation and monitoring of detailed forecasts of cash flows; maintenance of cash balances and uncommitted, multiple year credit facilities

MARKET RISK

Market risk is risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in the market prices. Market risk is comprised of currency risk, commodity price risk
and interest rate risk.

We provide sensitivity analysis where a reasonably possible change in a risk variable could result in a material change
to earnings or shareholders equity. We perform sensitivity analysis by relating the reasonably possible change in the risk variable at the reporting date to financial instruments outstanding on that date, while assuming all other variables
remain constant. We performed these analyses on the same basis as in 2011.



|    |  |                                                                          
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|122 |  | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  AGRIUM 2012 ANNUAL REPORT



---

A) CURRENCY RISK

U.S. dollar denominated transactions in our Canadian operations generate foreign currency gains and losses on outstanding balances, which we recognize in earnings.

IMPACT OF U.S. DOLLAR CHANGES ON NET EARNINGS



|                                                                                                                  |  |  |              |  |  |  |      | 
|----------------------------------------------------------------------------------------------------------------- |  |  | ------------ |  |  |  | ---- | 
|                                                                                                                  |  |  | December 31, | 
|                                                                                                                  |  |  | 2012         |  |  |  | 2011 | 
|Net U.S. dollar denominated asset balance in Canadian operations                                                  |  |  | 1,009        |  |  |  | 730  | 
|A $10-million impact requires a strengthening or weakening of the U.S. dollar against the
Canadian dollar (cents) |  |  | 1            |  |  |  | 2    | 

Balances in non-U.S. dollar subsidiaries generate foreign currency translation gains and losses, which are included in other
comprehensive income.

BALANCES IN NON-U.S. DOLLAR SUBSIDIARIES(in U.S. dollar equivalent)



|                                       |  |  |              |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |  
|-------------------------------------- |  |  | ------------ | - |  |  | ---- | - |  |  | ---- | - |  |  | ---- | - |  |  | ---- | - |  |  | ---- | -
|                                       |  |  | December 31, |  
|                                       |  |  | 2012         |   |  |  | 2011 |  
|                                       |  |  | CAD          |   |  |  | EUR  |   |  |  | AUD  |   |  |  | CAD  |   |  |  | EUR  |   |  |  | AUD  |  
|Cash and cash equivalents              |  |  | (90          | ) |  |  | 3    |   |  |  | 40   |   |  |  | 341  |   |  |  | 10   |   |  |  | 81   |  
|Accounts receivable                    |  |  | 220          |   |  |  | 111  |   |  |  | 434  |   |  |  | 211  |   |  |  | 93   |   |  |  | 428  |  
|Advance on acquisition of Viterra Inc. |  |  | 920          |   |  |  |     |   |  |  |     |   |  |  |     |   |  |  |     |   |  |  |     |  
|Short-term debt                        |  |  | (800         | ) |  |  | (177 | ) |  |  |     |   |  |  |     |   |  |  | (165 | ) |  |  | (1   | )
|Accounts payable                       |  |  | (839         | ) |  |  | (46  | ) |  |  | (270 | ) |  |  | (718 | ) |  |  | (65  | ) |  |  | (290 | )
|Current portion of other provisions    |  |  | (53          | ) |  |  |     |   |  |  | (15  | ) |  |  | (22  | ) |  |  |     |   |  |  | (11  | )
|                                       |  |  | (642         | ) |  |  | (109 | ) |  |  | 189  |   |  |  | (188 | ) |  |  | (127 | ) |  |  | 207  |  

IMPACT OF U.S. DOLLAR CHANGES ON COMPREHENSIVE INCOME



|                                                                                            |  |  |              |   |  |  |      |   |  |  |     |   |  |  |     |   |  |  |     |   |  |  |     |  
|------------------------------------------------------------------------------------------- |  |  | ------------ | - |  |  | ---- | - |  |  | --- | - |  |  | --- | - |  |  | --- | - |  |  | --- | -
|                                                                                            |  |  | December 31, |  
|                                                                                            |  |  | 2012         |   |  |  | 2011 |  
|                                                                                            |  |  | CAD          |   |  |  | EUR  |   |  |  | AUD |   |  |  | CAD |   |  |  | EUR |   |  |  | AUD |  
|A $10-million increase requires a strengthening (weakening) against the U.S. dollar (cents) |  |  | (2           | ) |  |  | (8   | ) |  |  | 5   |   |  |  | (6  | ) |  |  | (7  | ) |  |  | 5   |  
|A $10-million decrease requires a strengthening (weakening) against the U.S. dollar
(cents) |  |  | 2            |   |  |  | 6    |   |  |  | (5  | ) |  |  | 5   |   |  |  | 6   |   |  |  | (5  | )

We manage changes in foreign currencies using derivative financial instruments. The total change in fair value of
non-qualifying derivative financial instruments during 2012 was a gain of $13-million (2011  loss of $40-million), which is reported in other expenses, of which a gain of $8-million (2011  loss of $64-million) has been realized.

FOREIGN EXCHANGE DERIVATIVE FINANCIAL INSTRUMENTS OUTSTANDING



|         |  |  |                                |  |  |  |            |  |  |  |                                  |  |  |  |                                |  |  |  |            |  |  |  |                                  |  
|-------- |  |  | ------------------------------ |  |  |  | ---------- |  |  |  | -------------------------------- |  |  |  | ------------------------------ |  |  |  | ---------- |  |  |  | -------------------------------- | -
|         |  |  | December 31,                   | 
|         |  |  | 2012                           |  |  |  | 2011       | 
|Sell/Buy |  |  | Notional(millions,buycurrency) |  |  |  | Maturities |  |  |  | Fair valueof assets(liabilities) |  |  |  | Notional(millions,buycurrency) |  |  |  | Maturities |  |  |  | Fair valueof assets(liabilities) |  
|Forwards |  |  |                                |  |  |  |            |  |  |  |                                  |  |  |  |                                |  |  |  |            |  |  |  |                                  |  
|CAD/USD  |  |  | USD 900                        |  |  |  | 2013       |  |  |  | 4                                |  |  |  |                               |  |  |  |           |  |  |  |                                 |  
|USD/AUD  |  |  | AUD 26                         |  |  |  | 2013       |  |  |  |                                 |  |  |  | AUD 65                         |  |  |  | 2012       |  |  |  | 1                                |  
|AUD/CAD  |  |  |                               |  |  |  |           |  |  |  |                                 |  |  |  | CAD 227                        |  |  |  | 2012       |  |  |  | (2                               | )
|EUR/USD  |  |  | USD 28                         |  |  |  | 2013       |  |  |  |                                 |  |  |  |                               |  |  |  |           |  |  |  |                                 |  
|Swaps    |  |  |                                |  |  |  |            |  |  |  |                                  |  |  |  |                                |  |  |  |            |  |  |  |                                  |  
|USD/AUD  |  |  |                               |  |  |  |           |  |  |  |                                 |  |  |  | AUD 31                         |  |  |  | 2012       |  |  |  |                                 |  
|         |  |  |                                |  |  |  |            |  |  |  | 4                                |  |  |  |                                |  |  |  |            |  |  |  | (1                               | )



|                                                                          |  |    
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|AGRIUM 2012 ANNUAL REPORT  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |  | 123



---

B) COMMODITY PRICE RISK

We manage the risk of changes in natural gas, power and nutrient prices using derivative financial instruments. The total change in fair value of non-qualifying derivative financial instruments in 2012
resulted in a loss of $20-million (2011  gain of $3-million), which is reported in other expenses, of which a loss of $32-million (2011  loss of $19-million) has been realized.

NATURAL GAS, POWER AND NUTRIENT DERIVATIVE FINANCIAL INSTRUMENTS OUTSTANDING



|                                   |  |  |              |   |  |  |            |  |  |  |                                  |   |  |  |          |   |  |  |            |  |  |  |                                  |  
|---------------------------------- |  |  | ------------ | - |  |  | ---------- |  |  |  | -------------------------------- | - |  |  | -------- | - |  |  | ---------- |  |  |  | -------------------------------- | -
|                                   |  |  | December 31, |  
|                                   |  |  | 2012         |   |  |  | 2011       | 
|                                   |  |  | Notional     |   |  |  | Maturities |  |  |  | Fair valueof assets(liabilities) |   |  |  | Notional |   |  |  | Maturities |  |  |  | Fair valueof assets(liabilities) |  
|Natural gas (BCF)                  |  |  |              |   |  |  |            |  |  |  |                                  |   |  |  |          |   |  |  |            |  |  |  |                                  |  
|NYMEX contracts                    |  |  |              |   |  |  |            |  |  |  |                                  |   |  |  |          |   |  |  |            |  |  |  |                                  |  
|Swaps  bought                     |  |  | 11           |   |  |  | 2013       |  |  |  | (42                              | ) |  |  | 36       |   |  |  | 20122013  |  |  |  | (86                              | )
|Swaps  sold                       |  |  | (10          | ) |  |  | 2013       |  |  |  | 27                               |   |  |  | (21      | ) |  |  | 20122013  |  |  |  | 48                               |  
|Collars (swap with options)        |  |  |             |   |  |  |           |  |  |  |                                 |   |  |  | 3        |   |  |  | 2012       |  |  |  |                                 |  
|El Paso swaps                      |  |  | 1            |   |  |  | 2013       |  |  |  |                                 |   |  |  |         |   |  |  |           |  |  |  |                                 |  
|AECO contracts                     |  |  |              |   |  |  |            |  |  |  |                                  |   |  |  |          |   |  |  |            |  |  |  |                                  |  
|Swaps                              |  |  | 8            |   |  |  | 2013       |  |  |  | (4                               | ) |  |  | 5        |   |  |  | 2012       |  |  |  |                                 |  
|                                   |  |  | 10           |   |  |  |            |  |  |  | (19                              | ) |  |  | 23       |   |  |  |            |  |  |  | (38                              | )
|Power  swaps (GWh)                |  |  | 131          |   |  |  | 2013       |  |  |  | 4                                |   |  |  | 272      |   |  |  | 20122013  |  |  |  | 12                               |  
|Nutrient  urea swaps (short tons) |  |  |             |   |  |  |           |  |  |  |                                 |   |  |  | 5        |   |  |  | 2012       |  |  |  |                                 |  
|                                   |  |  |              |   |  |  |            |  |  |  | (15                              | ) |  |  |          |   |  |  |            |  |  |  | (26                              | )

IMPACT OF CHANGE IN FAIR VALUE OF NATURAL GAS DERIVATIVE FINANCIAL INSTRUMENTS



|                                                                                     |  |  |              |   |  |  |       |  
|------------------------------------------------------------------------------------ |  |  | ------------ | - |  |  | ----- | -
|                                                                                     |  |  | December 31, |  
|                                                                                     |  |  | 2012         |   |  |  | 2011  |  
|A $ 10-million increase in net earnings requires an increase in gas prices per MMBtu |  |  | 1.81         |   |  |  | 1.01  |  
|A $ 10-million decrease in net earnings requires a decrease in gas prices per
MMBtu  |  |  | (1.81        | ) |  |  | (1.01 | )

C) INTEREST RATE RISK

Our exposure to floating interest rate risk is generally limited to short-term debt, floating rate long-term debt and certain cash and cash equivalents. Exposure to fixed interest rate risk is generally
limited to our long-term debt.

Our cash and cash equivalents include highly liquid investments with a term of three months or less that earn
interest at market rates. We manage interest rate risk on these investments by maximizing the interest income earned on excess funds while maintaining the liquidity necessary to conduct operations on a day-to-day basis. Fluctuations in market rates
of interest on cash and cash equivalents do not have a significant impact on our results of operations due to the short term to maturity of the investments.

IMPACT OF CHANGE IN FLOATING RATE DEBT(basis points)



|                                                                              |  |  |                   | 
|----------------------------------------------------------------------------- |  |  | ----------------- | 
|                                                                              |  |  | December 31, 2012 | 
|A $10-million decrease in net earnings requires an increase in interest
rates |  |  | 57                | 



|    |  |                                                                          
|--- |  | -------------------------------------------------------------------------
|124 |  | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  AGRIUM 2012 ANNUAL REPORT



---

CREDIT RISK

Credit risk is the risk that a counterparty to a financial instrument will cause a financial loss for Agrium by not discharging its obligations. We primarily manage credit risk through rigorous credit
approval and monitoring practices, whereby we analyze customers individually for creditworthiness. We determine concentrations of credit risk by monitoring our aging analysis of trade receivables. Geographic and industry diversity also mitigates
credit risk. The Wholesale business unit sells mainly to large agribusinesses and other industrial users, and uses letters of credit and credit insurance to mitigate risk. The Retail business unit sells to a large customer base dispersed over wide
geographic areas in North and South America and Australia. The Advanced Technologies business unit sells to a diversified customer base in the North American professional turf application market. We do not expect any significant losses from trade
accounts receivable other than the amounts classified below as doubtful accounts.

AGING OF TRADE ACCOUNTS RECEIVABLE



|                     |  |  |              |  |  |  |                               |   |  |  |       |  |  |  |                               |  
|-------------------- |  |  | ------------ |  |  |  | ----------------------------- | - |  |  | ----- |  |  |  | ----------------------------- | -
|                     |  |  | December 31, | 
|                     |  |  | 2012         |  |  |  | 2011                          |  
|                     |  |  | Gross        |  |  |  | Allowance fordoubtfulaccounts |   |  |  | Gross |  |  |  | Allowance fordoubtfulaccounts |  
|Not past due         |  |  | 1,806        |  |  |  | (31                           | ) |  |  | 1,656 |  |  |  | (47                           | )
|30 days or less      |  |  | 213          |  |  |  | (5                            | ) |  |  | 161   |  |  |  | (5                            | )
|31  60 days         |  |  | 49           |  |  |  | (4                            | ) |  |  | 42    |  |  |  | (3                            | )
|61  90 days         |  |  | 34           |  |  |  | (2                            | ) |  |  | 13    |  |  |  | (3                            | )
|Greater than 90 days |  |  | 99           |  |  |  | (30                           | ) |  |  | 64    |  |  |  | (12                           | )
|                     |  |  | 2,201        |  |  |  | (72                           | ) |  |  | 1,936 |  |  |  | (70                           | )

ALLOWANCE FOR DOUBTFUL ACCOUNTS



|                                                     |  |  |      |   |  |  |      |  
|---------------------------------------------------- |  |  | ---- | - |  |  | ---- | -
|                                                     |  |  | 2012 |   |  |  | 2011 |  
|Balance, beginning of year                           |  |  | 70   |   |  |  | 53   |  
|Additions                                            |  |  | 22   |   |  |  | 26   |  
|Write-offs                                           |  |  | (20  | ) |  |  | (9   | )
|Balance, end of year                                 |  |  | 72   |   |  |  | 70   |  
|Balance as a percentage of trade accounts receivable |  |  | 3    |   |  |  | 4    |  

We may be exposed to certain losses in the event that counterparties to short-term investments and derivative financial
instruments are unable to meet their contractual obligations. We manage this counterparty credit risk with policies requiring that counterparties to short-term investments and derivative financial instruments have a credit rating of at least BBB,
and by policies that limit the investing of excess funds to liquid instruments with a maximum term of one year, limit the maximum exposure to any one counterparty and limit the amount of exposure according to counterparty credit rating.

We also enter into master netting agreements that mitigate our exposure to counterparty credit risk. At December 31, 2012, all counterparties to
derivative financial instruments have maintained an investment grade credit rating and there is no indication that any counterparty will be unable to meet its obligations under derivative financial contracts or short-term investments. The carrying
amount of financial assets represents the maximum credit exposure.

MAXIMUM EXPOSURE TO CREDIT RISK



|                                       |  |  |              |  |  |  |       | 
|-------------------------------------- |  |  | ------------ |  |  |  | ----- | 
|                                       |  |  | December 31, | 
|                                       |  |  | 2012         |  |  |  | 2011  | 
|Cash and cash equivalents              |  |  | 726          |  |  |  | 1,346 | 
|Accounts receivable                    |  |  | 2,284        |  |  |  | 1,984 | 
|Income taxes receivable                |  |  | 32           |  |  |  | 138   | 
|Advance on acquisition of Viterra Inc. |  |  | 919          |  |  |  |      | 
|Other assets                           |  |  | 130          |  |  |  | 97    | 
|                                       |  |  | 4,091        |  |  |  | 3,565 | 



|                                                                          |  |    
|------------------------------------------------------------------------- |  | ---
|AGRIUM 2012 ANNUAL REPORT  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |  | 125



---

LIQUIDITY RISK

Liquidity risk is the risk of not meeting our financial obligations when they come due. We mitigate liquidity risk by forecasting our cash needs and maintaining sufficient cash and credit facilities to meet
our funding requirements. We monitor and have access to capital as described in note 27 under Capital Management.

The table below summarizes the
maturity profile of our financial liabilities based on contractual undiscounted payments, including estimated interest payments and excluding the impact of netting agreements.

LIQUIDITY RISK



|                                  |  |  |                |  |  |  |                       |  |  |  |                   |  |  |  |                   |  |  |  |                   |  |  |  |                     | 
|--------------------------------- |  |  | -------------- |  |  |  | --------------------- |  |  |  | ----------------- |  |  |  | ----------------- |  |  |  | ----------------- |  |  |  | ------------------- | 
|December 31, 2012                 |  |  | Carryingamount |  |  |  | Contractualcash flows |  |  |  | Less thanone year |  |  |  | One tothree years |  |  |  | Four tofive years |  |  |  | More thanfive years | 
|Short-term debt                   |  |  | 1,328          |  |  |  | 1,328                 |  |  |  | 1,328             |  |  |  |                  |  |  |  |                  |  |  |  |                    | 
|Accounts payable                  |  |  | 3,361          |  |  |  | 3,361                 |  |  |  | 3,361             |  |  |  |                  |  |  |  |                  |  |  |  |                    | 
|Current portion of long-term debt |  |  | 518            |  |  |  | 521                   |  |  |  | 521               |  |  |  |                  |  |  |  |                  |  |  |  |                    | 
|Long-term debt                    |  |  | 2,115          |  |  |  | 4,036                 |  |  |  | 63                |  |  |  | 317               |  |  |  | 360               |  |  |  | 3,296               | 
|Other liabilities                 |  |  | 37             |  |  |  | 37                    |  |  |  |                  |  |  |  | 37                |  |  |  |                  |  |  |  |                    | 
|Natural gas derivative contracts  |  |  | 19             |  |  |  | 19                    |  |  |  | 19                |  |  |  |                  |  |  |  |                  |  |  |  |                    | 
|                                  |  |  | 7,378          |  |  |  | 9,302                 |  |  |  | 5,292             |  |  |  | 354               |  |  |  | 360               |  |  |  | 3,296               | 

FAIR VALUES

FAIR VALUES



|                                                                   |  |                       |  |               
|------------------------------------------------------------------ |  | --------------------- |  | --------------
|Financial instrument                                               |  | Category              |  | Measurement   
|Cash and cash equivalents (a)                                      |  | FVTPL                 |  | Fair value    
|Accounts receivable (a)                                            |  | L&R                   |  | Amortized cost
|Accounts receivable  derivative financial instruments (b)         |  | FVTPL                 |  | Fair value    
|Advance on acquisition of Viterra Inc. (a)                         |  | L&R                   |  | Amortized cost
|Marketable securities (b)                                          |  | AFS or FVTPL          |  | Fair value    
|Other financial assets (c)                                         |  | L&R                   |  | Amortized cost
|Other financial assets (d)                                         |  | AFS                   |  | Fair value    
|Other financial assets  derivative financial instruments (b)      |  | FVTPL                 |  | Fair value    
|Short-term debt (a)                                                |  | Financial liabilities |  | Amortized cost
|Accounts payable (a)                                               |  | Financial liabilities |  | Amortized cost
|Accounts payable  derivative financial instruments (b)            |  | FVTPL                 |  | Fair value    
|Long-term debt (e)                                                 |  | Financial liabilities |  | Amortized cost
|Other financial liabilities (c)                                    |  | Financial liabilities |  | Amortized cost
|Other financial liabilities  derivative financial instruments (b) |  | FVTPL                 |  | Fair value    



|(a) | Carrying value approximates fair value due to the short-term nature of the instruments.
|--- | ---------------------------------------------------------------------------------------

|(b) | Fair value is recorded at the estimated amount we would receive or pay to terminate the contracts, determined according to our assessment of available market information
and valuation methodologies based on industry accepted third-party models using assumptions about discount rates and the timing of future cash flows that are based on observable market inputs such as interest yield curves.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) | Fair value is recorded at the present value of future cash flows, discounted at the market rate of interest at the reporting date.
|--- | ----------------------------------------------------------------------------------------------------------------------------------

|(d) | Fair value is derived from active markets where possible, and through the use of valuation techniques including the discounted cash flows model where active markets do not
exist. Where available, inputs to valuation models are taken from observable markets and where not available, judgment is required to establish fair values.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(e) | Fair value of floating rate loans approximates carrying value.
|--- | --------------------------------------------------------------



|    |  |                                                                          
|--- |  | -------------------------------------------------------------------------
|126 |  | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  AGRIUM 2012 ANNUAL REPORT



---

FAIR VALUE AND CARRYING VALUE OF FINANCIAL INSTRUMENTS



|                                       |  |  |            |  |  |  |               |  |  |  |            |  |  |  |               | 
|-------------------------------------- |  |  | ---------- |  |  |  | ------------- |  |  |  | ---------- |  |  |  | ------------- | 
|                                       |  |  | 2012       |  |  |  | 2011          | 
|                                       |  |  | Fair value |  |  |  | Carryingvalue |  |  |  | Fair value |  |  |  | Carryingvalue | 
|Cash and cash equivalents  FVTPL      |  |  | 726        |  |  |  | 726           |  |  |  | 1,346      |  |  |  | 1,346         | 
|Accounts receivable                    |  |  |            |  |  |  |               |  |  |  |            |  |  |  |               | 
|Loans and receivables                  |  |  | 2,276      |  |  |  | 2,276         |  |  |  | 1,976      |  |  |  | 1,976         | 
|Fair value through profit or loss      |  |  | 8          |  |  |  | 8             |  |  |  | 8          |  |  |  | 8             | 
|                                       |  |  | 2,284      |  |  |  | 2,284         |  |  |  | 1,984      |  |  |  | 1,984         | 
|Advance on acquisition of Viterra Inc. |  |  | 919        |  |  |  | 919           |  |  |  |           |  |  |  |              | 
|Other financial assets                 |  |  |            |  |  |  |               |  |  |  |            |  |  |  |               | 
|Loans and receivables                  |  |  | 47         |  |  |  | 47            |  |  |  | 58         |  |  |  | 58            | 
|Available for sale                     |  |  | 40         |  |  |  | 40            |  |  |  | 10         |  |  |  | 10            | 
|Fair value through profit or loss      |  |  |           |  |  |  |              |  |  |  | 6          |  |  |  | 6             | 
|                                       |  |  | 87         |  |  |  | 87            |  |  |  | 74         |  |  |  | 74            | 
|Short-term debt  amortized cost       |  |  | 1,328      |  |  |  | 1,328         |  |  |  | 245        |  |  |  | 245           | 
|Accounts payable                       |  |  |            |  |  |  |               |  |  |  |            |  |  |  |               | 
|Amortized cost                         |  |  | 3,361      |  |  |  | 3,361         |  |  |  | 2,810      |  |  |  | 2,810         | 
|Fair value through profit or loss      |  |  | 19         |  |  |  | 19            |  |  |  | 25         |  |  |  | 25            | 
|                                       |  |  | 3,380      |  |  |  | 3,380         |  |  |  | 2,835      |  |  |  | 2,835         | 
|Current portion of long-term debt      |  |  |            |  |  |  |               |  |  |  |            |  |  |  |               | 
|Floating rate debt  amortized cost    |  |  | 518        |  |  |  | 518           |  |  |  | 20         |  |  |  | 20            | 
|                                       |  |  | 518        |  |  |  | 518           |  |  |  | 20         |  |  |  | 20            | 
|Long-term debt                         |  |  |            |  |  |  |               |  |  |  |            |  |  |  |               | 
|Debentures  amortized cost            |  |  | 2,393      |  |  |  | 2,025         |  |  |  | 1,925      |  |  |  | 1,525         | 
|Floating rate debt  amortized cost    |  |  | 90         |  |  |  | 90            |  |  |  | 573        |  |  |  | 573           | 
|                                       |  |  | 2,483      |  |  |  | 2,115         |  |  |  | 2,498      |  |  |  | 2,098         | 
|Other financial liabilities            |  |  |            |  |  |  |               |  |  |  |            |  |  |  |               | 
|Amortized cost                         |  |  | 37         |  |  |  | 37            |  |  |  | 20         |  |  |  | 20            | 
|Fair value through profit or loss      |  |  |           |  |  |  |              |  |  |  | 16         |  |  |  | 16            | 
|                                       |  |  | 37         |  |  |  | 37            |  |  |  | 36         |  |  |  | 36            | 

IMPACT OF CHANGE IN FAIR VALUE OF DEBENTURES



|                                |  |  |                   |  
|------------------------------- |  |  | ----------------- | -
|                                |  |  | December 31, 2012 |  
|An interest rate increase of 1% |  |  | (214              | )
|An interest rate decrease of 1% |  |  | 249               |  

The weighted average effective interest rate on long-term debt at December 31, 2012 was 5 percent (December 31, 2011
 5 percent).

FAIR VALUE HIERARCHY

Financial assets and liabilities that are carried at fair value are categorized as one of the following levels in the fair value hierarchy depending on the valuation technique used:



|         |  |                                                                                                              
|-------- |  | -------------------------------------------------------------------------------------------------------------
|Level 1: |  | Quoted prices (unadjusted) in active markets for identical assets or liabilities                             
|         | 
|Level 2: |  | Inputs other than Level 1 prices that are observable for the asset or liability either directly or indirectly
|         | 
|Level 3: |  | Inputs for the asset or liability that are not based on observable market data (unobservable inputs)         

Independent quoted market prices in active markets, where they exist, are the best evidence of fair value. In the absence of
an active market, we estimate fair value using valuation techniques such as option pricing models and discounted cash flow analysis, using assumptions about the amount and timing of estimated future cash flows and making maximum use of market-based
inputs, including gas and power prices, interest rates and foreign currency rates. Fair value estimates are made at a point in time and may not be reflective of future fair values. We determine the fair value of long-term debt using information
classified as Level 2.



|                                                                          |  |    
|------------------------------------------------------------------------- |  | ---
|AGRIUM 2012 ANNUAL REPORT  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |  | 127



---

FAIR VALUE OF FINANCIAL INSTRUMENTS



|                                                         |  |  |         |   |  |  |         |   |  |  |       |  
|-------------------------------------------------------- |  |  | ------- | - |  |  | ------- | - |  |  | ----- | -
|                                                         |  |  | Level 1 |   |  |  | Level 2 |   |  |  | Total |  
|December 31, 2012                                        |  |  |         |   |  |  |         |   |  |  |       |  
|Fair value through profit or loss                        |  |  |         |   |  |  |         |   |  |  |       |  
|Cash and cash equivalents                                |  |  | 726     |   |  |  |        |   |  |  | 726   |  
|Foreign exchange derivative financial instruments        |  |  |        |   |  |  | 4       |   |  |  | 4     |  
|Gas, power and nutrient derivative financial instruments |  |  | (15     | ) |  |  |        |   |  |  | (15   | )
|Available for sale                                       |  |  | 40      |   |  |  |        |   |  |  | 40    |  
|December 31, 2011                                        |  |  |         |   |  |  |         |   |  |  |       |  
|Fair value through profit or loss                        |  |  |         |   |  |  |         |   |  |  |       |  
|Cash and cash equivalents                                |  |  | 1,346   |   |  |  |        |   |  |  | 1,346 |  
|Foreign exchange derivative financial instruments        |  |  |        |   |  |  | (1      | ) |  |  | (1    | )
|Gas, power and nutrient derivative financial instruments |  |  | (38     | ) |  |  | 12      |   |  |  | (26   | )
|Available for sale                                       |  |  | 10      |   |  |  |        |   |  |  | 10    |  

We do not measure any of our financial instruments using Level 3 inputs. There have been no transfers between Level 1 and
Level 2 fair value measurements in the reporting periods ending December 31, 2012 or December 
31, 2011.

24. COMMITMENTS

OPERATING LEASES

Operating lease commitments consist primarily of leases for
railcars and contractual commitments at distribution facilities in our Wholesale business unit, vehicles and application equipment in our Retail business unit, and office equipment and property leases throughout our operations. Commitments represent
minimum payments under each agreement in each of the next five years. In 2012, expenses for operating leases were $220-million (2011  $245-million).

FUTURE MINIMUM LEASE PAYMENTS FOR OPERATING LEASES



|                       |  |  |              |  |  |  |      | 
|---------------------- |  |  | ------------ |  |  |  | ---- | 
|                       |  |  | December 31, | 
|                       |  |  | 2012         |  |  |  | 2011 | 
|Less than one year     |  |  | 151          |  |  |  | 171  | 
|From one to five years |  |  | 359          |  |  |  | 390  | 
|More than five years   |  |  | 121          |  |  |  | 165  | 
|                       |  |  | 631          |  |  |  | 726  | 



|    |  |                                                                          
|--- |  | -------------------------------------------------------------------------
|128 |  | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  AGRIUM 2012 ANNUAL REPORT



---

OTHER

OTHER



|                                      |  |  |       |  |  |  |      |  |  |  |      |  |  |  |      |  |  |  |      | 
|------------------------------------- |  |  | ----- |  |  |  | ---- |  |  |  | ---- |  |  |  | ---- |  |  |  | ---- | 
|                                      |  |  | 2013  |  |  |  | 2014 |  |  |  | 2015 |  |  |  | 2016 |  |  |  | 2017 | 
|Cost of product                       |  |  |       |  |  |  |      |  |  |  |      |  |  |  |      |  |  |  |      | 
|Natural gas and other (a)(b)          |  |  | 387   |  |  |  | 99   |  |  |  | 103  |  |  |  | 79   |  |  |  | 53   | 
|Power, sulfuric acid and other (c)(d) |  |  | 205   |  |  |  | 218  |  |  |  | 214  |  |  |  | 207  |  |  |  | 186  | 
|Purchase commitments                  |  |  | 75    |  |  |  | 19   |  |  |  | 13   |  |  |  | 13   |  |  |  |     | 
|Other                                 |  |  |       |  |  |  |      |  |  |  |      |  |  |  |      |  |  |  |      | 
|Long-term debt (e)                    |  |  | 587   |  |  |  | 182  |  |  |  | 135  |  |  |  | 134  |  |  |  | 226  | 
|Derivative financial instruments      |  |  |       |  |  |  |      |  |  |  |      |  |  |  |      |  |  |  |      | 
|Natural gas                           |  |  | 19    |  |  |  |     |  |  |  |     |  |  |  |     |  |  |  |     | 
|Asset retirement obligations          |  |  | 5     |  |  |  | 10   |  |  |  | 32   |  |  |  | 32   |  |  |  | 21   | 
|Environmental remediation liabilities |  |  | 74    |  |  |  | 20   |  |  |  | 18   |  |  |  | 9    |  |  |  | 5    | 
|                                      |  |  | 1,352 |  |  |  | 548  |  |  |  | 515  |  |  |  | 474  |  |  |  | 491  | 



|(a) | Our minimum commitments for North American natural gas purchases, which include both floating rate and fixed rate contracts, are calculated using the prevailing NYMEX
forward prices for U.S. facilities and the AECO forward prices for Canadian facilities at December 31, 2012.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | Commitments include our proportionate share of commitments of joint ventures. Profertil has three long-term gas contracts denominated in U.S. dollars, expiring in 2017.
These three contracts account for approximately 80 percent of Profertils gas requirements. YPF S.A., our joint venture partner in Profertil, supplies approximately 27 percent of the gas under these contracts.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) | We have a power co-generation agreement for our Carseland facility that expires December 31, 2026. The maximum commitment under this agreement is to purchase 60
megawatt-hours of power per hour through 2026. The price for the power is based on a fixed charge adjusted for inflation and a variable charge based on the cost of natural gas, which is provided to the facility for power generation.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(d) | Our phosphate rock supply agreement extends to 2020. Our minimum commitment is to purchase 580,000 tonnes in 2013 and 798,000 tonnes from 2014 to 2018, with subsequent
volumes to be determined in 2016. The purchase price is based on a formula that tracks finished product pricing and key published phosphate input costs. We entered into a freight contract to import phosphate rock extending from 2013 to 2019 for a
total commitment of $194-million.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(e) | Includes principal and interest payments.
|--- | -----------------------------------------

|(f) | Future capital expenditures include cancellable contracts for total costs of approximately: i) potash facility expansion  $600-million to $750-million; and ii)
construction of our Neptune import terminal  $75-million.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

25. CONTINGENT
LIABILITIES

A) LITIGATION

From time to time, we become involved in legal or administrative proceedings related to our current and acquired businesses. Such proceedings expose us to possible losses and we expect our involvement in
such matters to continue in the normal conduct of our business. We regularly assess the need for accounting recognition and/or disclosure of these matters. Our assessment considers the probability of adverse judgments and the range of possible
losses. We base our assessment of the probable outcome on our judgment of a number of factors, including similar past experiences and history, precedents, relevant financial, scientific and other evidence of each matter, and opinions from corporate
and outside counsel. Accruals are recorded when occurrence is probable and the outcome is reasonably estimable. Losses or the range of possible losses may not be reasonably estimable when claims do not specify an amount of damages sought, there are
numerous plaintiffs, or when the case is in its early stages. We will represent our interests vigorously in all of the proceedings in which we are involved. For further information on our policies regarding provisions, see note 2.

Legal proceedings and environmental matters are inherently complex and, as described above, we apply significant judgment in estimating probable outcomes.
As a result, there exists the potential for adjustments to liabilities and material variance between actual costs and estimates.

Our assessment
of specific litigation matters at the date of issuance of these financial statements is set out below.

OIL-FOR-FOOD PROGRAMME

On June 27, 2008, the Iraqi government filed a civil lawsuit in the U.S. against AWB, a subsidiary we acquired in 2010, and 92 other
parties alleging that the defendants participated in an illegal conspiracy to divert funds from the United Nations Oil-For-Food Programme (OFFP) escrow account. The lawsuit seeks total damages in excess of $10-billion from the
defendants, jointly and severally, as well as treble damages under the U.S. Racketeer Influenced and Corrupt Organizations Act. As to AWB specifically, the lawsuit alleges that AWB unlawfully diverted more than $232-million from the OFFP escrow
account. AWB and a number of other defendants filed motions to dismiss the complaint in June 2010. The court granted the motions and dismissed the lawsuit with prejudice in a decision dated February 6, 2013. The plaintiff has a right to appeal
this decision. Although we believe that the possibility of a material financial effect from this matter is remote, if the plaintiff does exercise its right to appeal, an adverse decision on appeal could have a material adverse effect on AWB and on
Agriums consolidated financial position and results of operations.



|                                                                          |  |    
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---

ENVIRONMENTAL CONTINGENCIES

We are responsible for environmental remediation of certain facilities and sites. No single site represents the majority of our environmental remediation liability. Work at these sites is in various stages
of environmental management  we are assessing and investigating some sites and remediating or monitoring others. We have established a provision for our estimated liabilities (note 20). However new information, including changes in regulations
or results of investigations by regulatory bodies, could lead to reassessment of our exposure related to these matters. In addition, we may revise our estimates of our future obligations because they are dependent on a number of uncertain factors
including the method and extent of the remediation, and cost-sharing arrangements with other parties involved.

For the matters described below,
at the date of issuance of these financial statements we determined that we could not estimate the amount and timing of any financial effect in excess of the amounts accrued for the ultimate resolution of these matters. Reasons for this
determination include complexity of the matters; early stages of certain proceedings; lack of information on nature and timing of future actions in the matters; dependency on the completion and findings of investigations and assessments; multiple
parties to negotiations; and the lack of specific information as to the nature, extent, timing and cost of future remediation. Until we have greater clarity as to our liability and extent of financial exposure, it is not practical to estimate the
financial effect of these matters. As negotiations, discussions and assessments proceed, we may provide an estimate of the potential financial effect. Events or factors that could alleviate our current inability to estimate the financial effect of
potential losses related to these matters include further identification of allegations or demands; completion of assessments and investigations; a ruling by a court; or initiation of substantive settlement negotiations. In addition, we have not
disclosed information about the amounts accrued for all of the items identified below because disclosure of the information on a case-by-case basis or by class would seriously prejudice our position in the ongoing proceedings.

U.S. ENVIRONMENTAL PROTECTION AGENCY PHOSPHATE INDUSTRY INITIATIVE

We are subject to investigations by the U.S. Environmental Protection Agency (EPA) and the Idaho Department of Environmental Quality (IDEQ) of our Conda, Idaho facility. The EPA and
IDEQ have notified Nu-West Industries, Inc. (Nu-West), a wholly-owned subsidiary of Agrium, of potential violations of federal and state statutes. Nu-West is involved in ongoing discussions with the EPA, the U.S. Department of Justice
and various environmental agencies to resolve these matters. Although Agrium is uncertain as to how the matters will be resolved or if litigation will ensue, potential resolution of the allegations may be by a settlement and may include some
combination of requirements to pay certain penalties (which Agrium currently believes will not be material), requirements to modify certain operating practices and undertake certain capital improvement projects, and requirements to provide financial
assurance for future closure, maintenance and monitoring costs for the Conda phosphogypsum stack system.

With respect to the Conda phosphogypsum
stack system, in the first quarter of 2012 we recognized an asset retirement obligation of approximately $138-million following our submittal to the EPA of a draft closure plan.

For the above U.S. EPA Phosphate Industry Initiative matters, we have accrued a provision of $4-million for site investigation and soil remediation costs.

LEGACY ENVIRONMENTAL REMEDIATION ACTIVITIES: IDAHO MINING PROPERTIES

Nu-West has performed, is performing, and in the future may perform, site investigation and remediation activities at six closed phosphate mines and one mineral processing facility near Soda Springs, Idaho.
These sites were mined and operated from as early as 1955 to as late as 1997. Selenium, a trace mineral that is essential for optimal human health, but toxic at higher concentrations, was found to be leaching from reclaimed lands associated with
historic phosphate mines owned, leased or operated by Nu-West or other parties. Nu-West, the U.S. government and other phosphate producers have been working diligently to identify the sources of selenium contamination, to develop remedies for the
closed mines, and to implement best practices to ensure selenium issues do not become a concern for current and new mining operations.

Nu-West
has executed agreements with federal and state environmental agencies pursuant to these matters, establishing the scope of preliminary work to be conducted. This work will enable Nu-West and the agencies to determine what, if any, further
remediation work will be required.

MANITOBA MINING PROPERTIES

In 1996, Agrium acquired Viridian Inc. (Viridian), which is now a wholly-owned Canadian subsidiary of Agrium. As part of the acquisition, Agrium assumed certain liabilities associated with two
closed mineral processing sites known as the Farley Mine Site and the Fox Mine Site near Lynn Lake, Manitoba.

Viridians liability at the
Farley Mine Site was resolved in 2012 through the execution of an agreement with the Manitoba Mines Branch (MMB), whereby Viridian has received a release and indemnification from MMB to the full extent permissible under Canadian law in
exchange for the completion of certain remediation work at the site before 2013 and the payment of a lump sum of under $10-million to MMB.



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---

The scope of required remediation work at the Fox Mine Site and the allocation of liability for such work is
the subject of ongoing discussions between Viridian and the MMB. The Fox Mine Site is currently subject to an operating license from the Manitoba government that requires Viridian to treat water draining from the site in order to meet downstream
water quality standards. Pending a final remediation plan for the site, Viridian will continue to treat water at the Fox Mine Site in order to remain compliant with the operating license.

B) GUARANTEES

We are contractually obligated to reimburse a third party for our
pro-rata share of any operating losses or other liabilities incurred pursuant to a marketing and distribution arrangement. We believe that the probability of conditions arising that would trigger this guarantee is remote.

26. ACCUMULATED OTHER COMPREHENSIVE INCOME

ACCUMULATED OTHER COMPREHENSIVE INCOME



|                              |  |                                          |    |   |                              |  |     |                                  |  |  |                                              |   |  |  |     |  
|----------------------------- |  | ---------------------------------------- | -- | - | ---------------------------- |  | --- | -------------------------------- |  |  | -------------------------------------------- | - |  |  | --- | -
|                              |  | Available for
sale financial
instruments |    |   | Foreign
currency
translation |  |     | Comprehensive
loss of
associates |  |  | Total accumulated other comprehensive income |  
|December 31, 2010             |  |                                          |   |   |                              |  | 69  |                                  |  |  |                                             |   |  |  | 69  |  
|Gains (losses)                |  |                                          | 1  |   |                              |  | (35 | )                                |  |  |                                             |   |  |  | (34 | )
|Reclassifications to earnings |  |                                          | (2 | ) |                              |  | (23 | )                                |  |  |                                             |   |  |  | (25 | )
|December 31, 2011             |  |                                          | (1 | ) |                              |  | 11  |                                  |  |  |                                             |   |  |  | 10  |  
|Gains (losses)                |  |                                          | 1  |   |                              |  | 64  |                                  |  |  | (3                                           | ) |  |  | 62  |  
|Reclassifications to earnings |  |                                          |   |   |                              |  | (1  | )                                |  |  |                                             |   |  |  | (1  | )
|December 31, 2012             |  |                                          |   |   |                              |  | 74  |                                  |  |  | (3                                           | ) |  |  | 71  |  

27. CAPITAL MANAGEMENT

Our objectives when managing capital are to (a) maintain a strong balance sheet and flexible capital structure in order to optimize the cost of capital
at an acceptable level of risk; (b) support an investment grade credit rating profile; and (c) maximize shareholder value. We continually monitor the ratios outlined in the table below to manage our capital.

CAPITAL MANAGEMENT



|                                                  |  |  |              |  |  |  |      | 
|------------------------------------------------- |  |  | ------------ |  |  |  | ---- | 
|                                                  |  |  | December 31, | 
|                                                  |  |  | 2012         |  |  |  | 2011 | 
|Net debt to net debt plus equity (%) (a)          |  |  | 32           |  |  |  | 14   | 
|Interest coverage (multiple) (b)                  |  |  | 21           |  |  |  | 16   | 
|Return on operating capital employed (%)
(c)      |  |  | 24           |  |  |  | 29   | 
|Return on capital employed (%) (d)                |  |  | 17           |  |  |  | 19   | 
|Average non-cash working capital to sales (%) (e) |  |  | 18           |  |  |  | 18   | 



|(a) | Net debt includes short-term debt and long-term debt, net of cash and cash equivalents. Equity consists of shareholders equity. For purposes of capital management,
capital comprises debt and equity.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | Interest coverage is the last 12 months net earnings from continuing operations before finance costs, income taxes, depreciation and amortization divided by
interest, which includes interest on long-term debt plus other interest.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) | Last 12 months earnings from continuing operations before finance costs and income taxes (EBIT) less income taxes at a tax rate of 28 percent divided by
rolling four quarter average operating capital employed. Operating capital employed includes non-cash working capital, property, plant and equipment, investments in associates and other assets.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(d) | Last 12 months EBIT less income taxes at a tax rate of 28 percent divided by rolling four quarter average capital employed. Capital employed includes operating
capital employed, intangibles and goodwill.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(e) | Rolling four quarter average non-cash working capital.
|--- | ------------------------------------------------------

|(f) | Interest coverage, return on operating capital employed and return on capital employed are additional IFRS financial measures which do not have a standardized meaning
prescribed by IFRS and therefore may not be comparable to similar measures presented by other issuers.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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---

Our strategy in managing capital is to maintain our ratio of net debt to net debt plus equity in a target range
of 35 to 45 percent. Management believes that this range is appropriate and provides access to capital at a reasonable cost. In order to maintain or adjust our capital structure, we may adjust the amount of dividends paid to shareholders, return
capital to shareholders, issue new shares or issue or redeem debt. Our authorized share capital consists of unlimited common shares without par value and unlimited preferred shares. On October 22, 2012, we purchased and cancelled
8.74 million common shares tendered under an issuer bid for a total purchase price of $913-million, including transaction costs.

DIVIDENDS



|                  |  |           |                      |  |      |       |                  |           |  |           |          |  |  |                      |  |                   |       |  |       |  |  |  |                  |  |  |  |    | 
|----------------- |  | --------- | -------------------- |  | ---- | ----- | ---------------- | --------- |  | --------- | -------- |  |  | -------------------- |  | ----------------- | ----- |  | ----- |  |  |  | ---------------- |  |  |  | -- | 
|                  | 
|December 31,      | 
|                  | 
|2012              |  |           |                      |  | 2011 |      
|                  | 
|Declared          |  |           | Paid to Shareholders |  |      | Total |                  |           |  |           | Declared |  |  | Paid to Shareholders |  |                   | Total | 
|                  |  |           |                      |  |      |       |                  |           | 
|Effective         |  | Per share |                      |  |      |       |                  | Effective |  | Per share |          |  | 
|                  | 
|May 11, 2012      |  |           | 0.500                |  |      |       | July 12, 2012    |           |  |           | 79       |  |  |                      |  | May 10, 2011      |       |  | 0.055 |  |  |  | July 7, 2011     |  |  |  | 9  | 
|December 14, 2012 |  |           | 0.500                |  |      |       | January 17, 2013 |           |  |           | 75       |  |  |                      |  | December 14, 2011 |       |  | 0.225 |  |  |  | January 19, 2012 |  |  |  | 35 | 
|                  | 
|                  |  |           | 1.000                |  |      |       |                  |           |  |           | 154      |  |  |                      |  |                   |       |  | 0.280 |  |  |  |                  |  |  |  | 44 | 
|                  | 

DIVIDENDS PAYABLE



|                             |  |                   |     |   |                     |  |     |          |  |  |                   |   |  |                     |     |   |       |  |    |   |  |  |     |  
|---------------------------- |  | ----------------- | --- | - | ------------------- |  | --- | -------- |  |  | ----------------- | - |  | ------------------- | --- | - | ----- |  | -- | - |  |  | --- | -
|                             | 
|                             |  | December 31,      |    
|                             |  |                   |     |  
|                             |  | 2012              |     |   | 2011                | 
|                             |  |                   |     |  
|                             |  | Declared          |     |   |                     |  |     | Declared |  |  |                   |  
|                             |  |                   |     |  
|                             |  | Prior fiscal year |     |   | Current fiscal year |  |     | Total    |  |  | Prior fiscal year |   |  | Current fiscal year |     |   | Total | 
|                             | 
|Balance, beginning of year   |  |                   | 36  |   |                     |  |    |          |  |  | 36                |   |  |                     | 9   |   |       |  |   |   |  |  | 9   |  
|Declared                     |  |                   | N/A |   |                     |  | 154 |          |  |  | 154               |   |  |                     | N/A |   |       |  | 44 |   |  |  | 44  |  
|Paid in cash                 |  |                   | (36 | ) |                     |  | (79 | )        |  |  | (115              | ) |  |                     | (9  | ) |       |  | (9 | ) |  |  | (18 | )
|Foreign exchange translation |  |                   |     |   |                     |  |     |          |  |  |                  |   |  |                     |     |   |       |  |    |   |  |  | 1   |  
|                             | 
|Balance, end of year         |  |                   |     |   |                     |  |     |          |  |  | 75                |   |  |                     |     |   |       |  |    |   |  |  | 36  |  
|                             | 

During the year, the Board of Directors announced its intention to pay dividends quarterly starting in 2013.

We maintain a base shelf prospectus, which permits issuance in Canada and the U.S. of up to an additional $2.0-billion of common shares, preferred shares,
subscription receipts, debt securities or units until April 2014. Issuance of further securities under the base shelf prospectus requires filing a prospectus supplement and is subject to the availability of funding in capital markets.

Our revolving credit facilities require that we maintain specific interest coverage and debt to capital ratios as well as other non-financial covenants as
defined in our credit agreements. We were in compliance with all covenants at December 31, 2012.

28. OPERATING SEGMENTS

Our operating segments are the strategic business units through which we operate and report our business: Retail, Wholesale and Advanced Technologies. Each of these segments has developed its own strategy,
goals and tactics in alignment with Agriums overall corporate strategy. Our chief operating decision maker (CODM, our senior leadership team) reviews internal reports reflecting the information included below on a regular basis.
The CODM measures performance and allocates resources based on segment earnings before finance costs and income taxes. The CODM believes that this information is the most relevant in evaluating the results of certain segments relative to other
entities that operate in similar industries. We continually monitor changes in facts and circumstances that could cause a change in the composition of our operating segments, including the similarity of the economic characteristics of operations
within segments and the geographic location of operations. We report a non-operating segment, Other, for inter-segment eliminations and corporate functions.



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|132 |  | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  AGRIUM 2012 ANNUAL REPORT



---

OPERATING SEGMENTS



|                                               |  |  |        |   |  |  |        |  
|---------------------------------------------- |  |  | ------ | - |  |  | ------ | -
|                                               |  |  | 2012   |   |  |  | 2011   |  
|Sales                                          |  |  |        |   |  |  |        |  
|Retail                                         |  |  |        |   |  |  |        |  
|Crop nutrients                                 |  |  | 5,124  |   |  |  | 4,537  |  
|Crop protection products                       |  |  | 3,924  |   |  |  | 3,449  |  
|Seed                                           |  |  | 1,189  |   |  |  | 1,085  |  
|Merchandise                                    |  |  | 524    |   |  |  | 629    |  
|Services and other                             |  |  | 718    |   |  |  | 616    |  
|                                               |  |  | 11,479 |   |  |  | 10,316 |  
|Wholesale                                      |  |  |        |   |  |  |        |  
|Nitrogen                                       |  |  | 2,298  |   |  |  | 2,051  |  
|Potash                                         |  |  | 618    |   |  |  | 809    |  
|Phosphate                                      |  |  | 797    |   |  |  | 893    |  
|Product purchased for resale                   |  |  | 1,455  |   |  |  | 1,566  |  
|Other                                          |  |  | 284    |   |  |  | 257    |  
|                                               |  |  | 5,452  |   |  |  | 5,576  |  
|Advanced Technologies                          |  |  | 578    |   |  |  | 510    |  
|Other                                          |  |  | (823   | ) |  |  | (932   | )
|                                               |  |  | 16,686 |   |  |  | 15,470 |  
|Inter-segment sales                            |  |  |        |   |  |  |        |  
|Retail                                         |  |  | 22     |   |  |  | 29     |  
|Wholesale                                      |  |  | 729    |   |  |  | 817    |  
|Advanced Technologies                          |  |  | 72     |   |  |  | 86     |  
|                                               |  |  | 823    |   |  |  | 932    |  
|Net earnings                                   |  |  |        |   |  |  |        |  
|Retail                                         |  |  | 757    |   |  |  | 600    |  
|Wholesale                                      |  |  | 1,734  |   |  |  | 1,846  |  
|Advanced Technologies                          |  |  | 15     |   |  |  | (51    | )
|Other                                          |  |  | (284   | ) |  |  | (172   | )
|Earnings before finance costs and income taxes |  |  | 2,222  |   |  |  | 2,223  |  
|Finance costs related to long-term debt        |  |  | 89     |   |  |  | 101    |  
|Other finance costs                            |  |  | 40     |   |  |  | 59     |  
|Earnings before income taxes                   |  |  | 2,093  |   |  |  | 2,063  |  
|Income taxes                                   |  |  | 595    |   |  |  | 555    |  
|Net earnings from continuing operations        |  |  | 1,498  |   |  |  | 1,508  |  
|Net loss from discontinued operations          |  |  |       |   |  |  | (133   | )
|Net earnings                                   |  |  | 1,498  |   |  |  | 1,375  |  



|                                                                          |  |    
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---

OPERATING SEGMENTS



|                          |  |  |              |  |  |  |        | 
|------------------------- |  |  | ------------ |  |  |  | ------ | 
|                          |  |  | December 31, | 
|                          |  |  | 2012         |  |  |  | 2011   | 
|Total assets              |  |  |              |  |  |  |        | 
|Retail                    |  |  | 8,338        |  |  |  | 7,685  | 
|Wholesale                 |  |  | 4,353        |  |  |  | 2,997  | 
|Advanced Technologies     |  |  | 545          |  |  |  | 474    | 
|Other                     |  |  | 2,741        |  |  |  | 1,914  | 
|Discontinued operations   |  |  |             |  |  |  | 70     | 
|                          |  |  | 15,977       |  |  |  | 13,140 | 
|Investments in associates |  |  |              |  |  |  |        | 
|Retail                    |  |  | 83           |  |  |  | 19     | 
|Wholesale                 |  |  | 272          |  |  |  | 279    | 
|Advanced Technologies     |  |  | 27           |  |  |  | 29     | 
|Other                     |  |  |             |  |  |  | 28     | 
|                          |  |  | 382          |  |  |  | 355    | 

OPERATING SEGMENTS



|                                   |  |  |       |  |  |  |      | 
|---------------------------------- |  |  | ----- |  |  |  | ---- | 
|                                   |  |  | 2012  |  |  |  | 2011 | 
|Additions to non-current assets(a) |  |  |       |  |  |  |      | 
|Retail                             |  |  | 380   |  |  |  | 263  | 
|Wholesale                          |  |  | 1,185 |  |  |  | 516  | 
|Advanced Technologies              |  |  | 34    |  |  |  | 61   | 
|Other                              |  |  | 15    |  |  |  | 26   | 
|                                   |  |  | 1,614 |  |  |  | 866  | 



|(a) | Includes property, plant and equipment, intangibles and goodwill.
|--- | -----------------------------------------------------------------

ADDITIONAL INFORMATION



|                                        |  |  |        |  |  |  |           |  |  |  |                       |  |  |  |       |  |  |  |      |  |  |  |      |  |  |  |      |  |  |  |      |  
|--------------------------------------- |  |  | ------ |  |  |  | --------- |  |  |  | --------------------- |  |  |  | ----- |  |  |  | ---- |  |  |  | ---- |  |  |  | ---- |  |  |  | ---- | -
|                                        |  |  | Retail |  |  |  | Wholesale |  |  |  | Advanced Technologies |  |  |  | Other | 
|                                        |  |  | 2012   |  |  |  | 2011      |  |  |  | 2012                  |  |  |  | 2011  |  |  |  | 2012 |  |  |  | 2011 |  |  |  | 2012 |  |  |  | 2011 |  
|Share-based payments expense (recovery) |  |  |       |  |  |  |          |  |  |  |                      |  |  |  |      |  |  |  |     |  |  |  |     |  |  |  | 108  |  |  |  | (51  | )
|Earnings from associates                |  |  | 9      |  |  |  | 1         |  |  |  | 2                     |  |  |  | 19    |  |  |  | 2    |  |  |  | 1    |  |  |  |     |  |  |  |     |  
|Material non-cash items                 |  |  |        |  |  |  |           |  |  |  |                       |  |  |  |       |  |  |  |      |  |  |  |      |  |  |  |      |  |  |  |      |  
|Depreciation and amortization           |  |  | 194    |  |  |  | 169       |  |  |  | 206                   |  |  |  | 173   |  |  |  | 28   |  |  |  | 24   |  |  |  | 16   |  |  |  | 15   |  
|Asset impairment                        |  |  |       |  |  |  |          |  |  |  |                      |  |  |  |      |  |  |  |     |  |  |  | 61   |  |  |  |     |  |  |  |     |  

KEY DATA BY REGION



|              |  |          |        |  |                       |  |       |           |  |  |                        |  |  |  |       | 
|------------- |  | -------- | ------ |  | --------------------- |  | ----- | --------- |  |  | ---------------------- |  |  |  | ----- | 
|              |  |          | 2012   |  |                       |  | 2011  |          
|              |  | Sales(a) |        |  | Non-current
assets(b) |  |       | Sales (a) |  |  | Non-current
assets (b) | 
|Canada        |  |          | 2,129  |  |                       |  | 2,401 |           |  |  | 1,957                  |  |  |  | 1,570 | 
|United States |  |          | 10,776 |  |                       |  | 3,495 |           |  |  | 9,550                  |  |  |  | 2,856 | 
|Europe        |  |          | 906    |  |                       |  | 38    |           |  |  | 925                    |  |  |  | 16    | 
|South America |  |          | 714    |  |                       |  | 278   |           |  |  | 725                    |  |  |  | 230   | 
|Australia     |  |          | 2,056  |  |                       |  | 624   |           |  |  | 2,223                  |  |  |  | 904   | 
|Other         |  |          | 105    |  |                       |  | 272   |           |  |  | 90                     |  |  |  | 290   | 
|              |  |          | 16,686 |  |                       |  | 7,108 |           |  |  | 15,470                 |  |  |  | 5,866 | 



|(a) | Sales by location of third-party customers.
|--- | -------------------------------------------

|(b) | Excludes financial instruments, deferred tax assets and discontinued operations.
|--- | --------------------------------------------------------------------------------

No revenues from transactions with a single external customer amount to 10 percent or more of Agriums revenues.



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|134 |  | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  AGRIUM 2012 ANNUAL REPORT