EXHIBIT
99.3
 AGRIUM INC.
 2009
 AUDITED ANNUAL FINANCIAL
 STATEMENTS AND NOTES




---



##### 



Financial statements and notes
 Financial Reporting Responsibilities
   Managements Report on Internal Control over Financial Reporting
    -s- Michael M. Wilson
    
    -s- Bruce G. WatermanMichael M. Wilson
    
    Bruce G. WatermanPresident & Chief Executive Officer
    
    Senior Vice President, Finance & Chief Financial OfficerCalgary, CanadaFebruary 25, 2010
 96 Agrium




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##### 



Reports of Independent Registered Public Accounting Firm
 To the Shareholders and Board of Directors of Agrium Inc.
     Chartered Accountants
 Calgary, Canada
February 25, 2010
 97 Agrium




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##### 



To the Shareholders and Board of Directors of Agrium Inc.
 Internal ControlIntegrated Framework
    Internal
ControlIntegrated Framework
  Chartered Accountants
 Calgary, Canada
February 25, 2010
 98 Agrium




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##### 



Consolidated statements of operations
 Years ended December 31(millions of U.S. dollars, except per share amounts)
    
    2009
    
    
    2008
    
    
    2007Sales
    
    
    9,328
    
    
    
    10,268
    
    
    
    5,491Direct freight
    
    
    199
    
    
    
    237
    
    
    
    221Net sales
    
    
    9,129
    
    
    
    10,031
    
    
    
    5,270Cost of product sold
    
    
    7,123
    
    
    
    6,592
    
    
    
    3,672Inventory and purchase commitment write-down
    
    
    63
    
    
    
    216
    
    
    
    Gross profit
    
    
    1,943
    
    
    
    3,223
    
    
    
    1,598ExpensesSelling
    
    
    918
    
    
    
    815
    
    
    
    471General and administrative
    
    
    202
    
    
    
    192
    
    
    
    125Depreciation and amortization
    
    
    124
    
    
    
    110
    
    
    
    173Potash profit and capital tax
    
    
    4
    
    
    
    162
    
    
    
    28Earnings
from equity investees (note 13)
    
    
    (27
    )
    
    
    (4
    )
    
    
    Asset
impairment (note 13)
    
    
    
    
    
    
    87
    
    
    
    Other
expenses (income) (note 4)
    
    
    142
    
    
    
    (125
    )
    
    
    89Earnings before interest, income taxes and
non-controlling interests
    
    
    580
    
    
    
    1,986
    
    
    
    712Interest on long-term debt
    
    
    91
    
    
    
    82
    
    
    
    52Other interest
    
    
    19
    
    
    
    23
    
    
    
    18Earnings before income taxes and non-controlling interests
    
    
    470
    
    
    
    1,881
    
    
    
    642Income taxes
(note 5)
    
    
    105
    
    
    
    589
    
    
    
    204Non-controlling interests
    
    
    (1
    )
    
    
    (30
    )
    
    
    (3
    )Net earnings
    
    
    366
    
    
    
    1,322
    
    
    
    441Earnings
per share (note 6)Basic
    
    
    2.33
    
    
    
    8.39
    
    
    
    3.28Diluted
    
    
    2.33
    
    
    
    8.34
    
    
    
    3.25
  99 Agrium




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##### 



Consolidated statements of cash flows
 Years ended December 31(millions of U.S. dollars)
    
    2009
    
    
    2008
    
    
    2007OperatingNet earnings
    
    
    366
    
    
    
    1,322
    
    
    
    441Items not affecting cashInventory and purchase commitment write-down
    
    
    63
    
    
    
    216
    
    
    
    Depreciation and amortization
    
    
    242
    
    
    
    218
    
    
    
    173Earnings
from equity investees (note 13)
    
    
    (27
    )
    
    
    (4
    )
    
    
    Asset
impairment (note 13)
    
    
    
    
    
    
    87
    
    
    
    Stock-based compensation
    
    
    73
    
    
    
    (25
    )
    
    
    113Unrealized (gain) loss on derivative financial instruments
    
    
    (39
    )
    
    
    77
    
    
    
    6Unrealized foreign exchange loss (gain)
    
    
    62
    
    
    
    (6
    )
    
    
    (50
    )Future income taxes
    
    
    (309
    )
    
    
    363
    
    
    
    119Non-controlling interests
    
    
    (1
    )
    
    
    (30
    )
    
    
    (3
    )Other
    
    
    24
    
    
    
    (77
    )
    
    
    47Net changes
in non-cash working capital (note 7)
    
    
    950
    
    
    
    (1,097
    )
    
    
    (352
    )Cash provided by operating activities
    
    
    1,404
    
    
    
    1,044
    
    
    
    494InvestingAcquisitions, net of cash acquired
    
    
    (15
    )
    
    
    (2,740
    )
    
    
    Capital expenditures
    
    
    (313
    )
    
    
    (506
    )
    
    
    (454
    )Proceeds
from disposal of property, plant and equipment, and investments
    
    
    14
    
    
    
    27
    
    
    
    17Investment in equity investee
    
    
    
    
    
    
    
    
    
    
    (63
    )Purchase of
marketable securities (note 3)
    
    
    (65
    )
    
    
    
    
    
    
    Other
    
    
    (134
    )
    
    
    (156
    )
    
    
    (61
    )Cash used in investing activities
    
    
    (513
    )
    
    
    (3,375
    )
    
    
    (561
    )FinancingBank indebtedness
    
    
    (381
    )
    
    
    261
    
    
    
    (61
    )Long-term debt issued
    
    
    78
    
    
    
    1,620
    
    
    
    132Transaction costs on long-term debt
    
    
    (1
    )
    
    
    (12
    )
    
    
    (13
    )Repayment of long-term debt
    
    
    (1
    )
    
    
    (795
    )
    
    
    Contributions from non-controlling interests
    
    
    
    
    
    
    171
    
    
    
    86Dividends paid
    
    
    (17
    )
    
    
    (18
    )
    
    
    (15
    )Shares issued, net of issuance costs
    
    
    7
    
    
    
    4
    
    
    
    1,337Shares repurchased
    
    
    
    
    
    
    (35
    )
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    1Cash (used in) provided by financing activities
    
    
    (315
    )
    
    
    1,196
    
    
    
    1,467Increase (decrease) in cash and cash equivalents
    
    
    576
    
    
    
    (1,135
    )
    
    
    1,400Cash and cash equivalents  beginning of year
    
    
    374
    
    
    
    1,509
    
    
    
    109Deconsolidation of Egypt subsidiary (note 13)
    
    
    (17
    )
    
    
    
    
    
    
    Cash and cash equivalents  end of year
    
    
    933
    
    
    
    374
    
    
    
    1,509
  100 Agrium




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##### 



Consolidated balance sheets
 As at December 31(millions of U.S. dollars, except share data)
    
    2009
    
    
    2008AssetsCurrent assetsCash and
cash equivalents (note 7)
    
    
    933
    
    
    
    374Accounts
receivable (note 8)
    
    
    1,324
    
    
    
    1,242Inventories
(note 9)
    
    
    2,137
    
    
    
    3,047Prepaid expenses and deposits
    
    
    612
    
    
    
    475Marketable securities
    
    
    114
    
    
    
    5,120
    
    
    
    5,138Property,
plant and equipment(note 10)
    
    
    1,782
    
    
    
    2,036Intangibles(note 11)
    
    
    617
    
    
    
    653Goodwill(note 12)
    
    
    1,801
    
    
    
    1,783Investment in equity investees(note 13)
    
    
    370
    
    
    
    71Other
assets(note 14)
    
    
    95
    
    
    
    1569,785
    
    
    
    9,837Liabilities and Shareholders EquityCurrent liabilitiesBank
indebtedness (note 15)
    
    
    106
    
    
    
    610Accounts
payable and accrued liabilities (note 16)
    
    
    2,475
    
    
    
    2,2002,581
    
    
    
    2,810Long-term
debt(note 15)
    
    
    1,699
    
    
    
    1,622Other
liabilities(note 17)
    
    
    381
    
    
    
    328Future
income tax liabilities(note 5)
    
    
    521
    
    
    
    725Non-controlling interests
    
    
    11
    
    
    
    2425,193
    
    
    
    5,727Commitments, guarantees and
contingencies(notes 23, 24 and 25)Shareholders equityShare capital
    
    
    1,969
    
    
    
    1,961Contributed surplus
    
    
    8
    
    
    
    81,977
    
    
    
    1,969Retained earnings
    
    
    2,662
    
    
    
    2,313Accumulated
other comprehensive income (note 21)
    
    
    (47
    )
    
    
    (172
    )2,615
    
    
    
    2,1414,592
    
    
    
    4,1109,785
    
    
    
    9,837
   -s- Michael M. Wilson)
    
    -s- Victor J. ZaleschukMichael M. Wilson
    
    Victor J. ZaleschukDirector
    
    Director
 101 Agrium




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##### 



Consolidated statements of comprehensive income and shareholders equity
 AccumulatedMillions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    other
    
    
    Total(millions of U.S. dollars,
    
    of common
    
    
    Share
    
    
    Contributed
    
    
    Retained
    
    
    comprehensive
    
    
    shareholdersexcept share data)
    
    shares(a)
    
    
    capital
    
    
    surplus
    
    
    earnings
    
    
    income (note 21)
    
    
    equityDecember 31, 2006
    
    
    133
    
    
    
    617
    
    
    
    5
    
    
    
    602
    
    
    
    9
    
    
    
    1,233Net earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    441
    
    
    
    
    
    
    
    441Cash flow hedges (b)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    20
    
    
    
    17Foreign currency translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    55
    
    
    
    55Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    513Dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (16
    )
    
    
    
    
    
    
    (16
    )Shares issued
    
    
    24
    
    
    
    1,338
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,338Stock options exercised and granted
    
    
    1
    
    
    
    17
    
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    20December 31, 2007
    
    
    158
    
    
    
    1,972
    
    
    
    8
    
    
    
    1,024
    
    
    
    84
    
    
    
    3,088Transition adjustment (c)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    4158
    
    
    
    1,972
    
    
    
    8
    
    
    
    1,028
    
    
    
    84
    
    
    
    3,092Net earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,322
    
    
    
    
    
    
    
    1,322Cash flow hedges (d)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (14
    )
    
    
    (14
    )Foreign currency translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (242
    )
    
    
    (242
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,066Dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (17
    )
    
    
    
    
    
    
    (17
    )Shares repurchased
    
    
    (1
    )
    
    
    (15
    )
    
    
    
    
    
    
    (20
    )
    
    
    
    
    
    
    (35
    )Stock options exercised
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4December 31, 2008
    
    
    157
    
    
    
    1,961
    
    
    
    8
    
    
    
    2,313
    
    
    
    (172
    )
    
    
    4,110Net earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    366
    
    
    
    
    
    
    
    366Cash flow hedges (e)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4
    )
    
    
    (4
    )Available for sale financial
instruments (f)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29
    
    
    
    29Foreign currency translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    100
    
    
    
    100Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    491Dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (17
    )
    
    
    
    
    
    
    (17
    )Stock options exercised
    
    
    
    
    
    
    8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8December 31, 2009
    
    
    157
    
    
    
    1,969
    
    
    
    8
    
    
    
    2,662
    
    
    
    (47
    )
    
    
    4,592
 (a)
    
    The Companys authorized share capital consists of unlimited common shares.(b)
    
    Net of tax of $5-million and non-controlling interests of $7-million.(c)
    
    Adjustment at January 1, 2008 for adoption of accounting standards for inventory. Net of tax
of $1-million.(d)
    
    Net of tax of $2-million and non-controlling interest of $7-million.(e)
    
    Net of tax of $2-million.(f)
    
    Net of tax of $19-million.
  102 Agrium




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##### 



Notes to the consolidated Financial Statements
  1. Description of Business
  (BULLET)
    
    Retailoperates in North and South America and sells crop nutrients, crop protection
products, seed and services directly to growers;(BULLET)
    
    Wholesaleoperates in North and South America and Europe producing, marketing and
distributing three primary groups of nutrients: nitrogen, potash and phosphate for
agricultural and industrial customers around the world; and,(BULLET)
    
    Advanced Technologiesproduces and markets controlled-release crop nutrients and
micronutrients in the broad-based agriculture, specialty agriculture, professional turf,
horticulture, and consumer lawn and garden markets worldwide.
 2. Significant Accounting Policies
 Principles of consolidation and preparation of financial statements
    Foreign currency translation
  103 Agrium




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##### 



Financial instruments
  Financial instrument
    
    
    
    Subsequent measurementclassification
    
    As classified by Agrium
    
    of gains or lossesAssets or liabilities held 
for trading
    
    Cash and cash equivalents,
marketable securities and derivatives
that are not cash flow hedges
    
    Fair value; unrealized gains or losses
recognized in net earningsAvailable for sale financial
assets and liabilities
    
    Marketable securities, other assets  long-term investments; derivatives  that are cash flow hedges
    
    Fair value; unrealized gains and losses
recognized in OCI; recognized in net
earnings in the same period that the
hedged item impacts net earnings, on
sale of the asset or when the asset is
written down as impairedHeld to maturity investments
    
    NoneLoans and receivables
    
    Accounts receivable
    
    Amoritized cost using the effective interest rate method; recognized in net
earnings, if asset/liability is
derecognized or asset is impairedOther financial liabilities
    
    Bank indebtedness,
accounts payable, long-term debt
   Fair values
  Revenue recognition
   Rebates
  104 Agrium




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##### 



Income taxes
  Cash and cash equivalents
  Accounts receivable and allowance for doubtful accounts
  Inventories
    Property, plant and equipment
  Intangibles
  105 Agrium




---



##### 



Impairment of long-lived assets
  Goodwill
  Environmental remediation
  Asset retirement obligations
  Stock-based compensation
    Employee future benefits
  106 Agrium




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##### 



Hedge accounting
    Significant accounting standard and policy changes
 Date and methodDescription
    
    of adoption
    
    ImpactGoodwill and Intangible Assetsestablishes guidance for
the recognition, measurement, presentation and disclosure
of intangible assets, including guidance that pre-production
and start-up costs be expensed as incurred. Goodwill standards
are carried forward unchanged.
    
    January 1, 2009;
prospective
    
    No material impact
on earnings or
financial position.Financial Instruments  Disclosures 
Amends previously issued guidance to include additional
disclosure requirements about fair value measurements of
financial instruments and liquidity risk.
    
    December 31, 2009
    
    Additional disclosures.Credit Risk and the Fair Value of Financial Assets
and Financial Liabilitiesconfirms that an entitys own
credit risk and the credit risk of a counterparty should be taken
into consideration in determining the fair value of financial
assets
and liabilities, including derivative instruments.
    
    January 1, 2009;
retrospective
    
    No material impact
on earnings or
financial position.
 Recent accounting pronouncements not yet adopted
 Date and methodDescription
    
    of adoption
    
    ImpactInternational Financial Reporting Standards (IFRS) 
the Company will adopt IFRS on January 1, 2011. IFRS will
require restatement of comparative figures. Adoption of IFRS
will include changes to business combinations, consolidated
financial statements and non-controlling interests, which
have been previously issued as part of Canadian GAAP.
    
    January 1, 2011
in accordance
with IFRS 1
    
    The Company continues
to review the full impact
of transition and has
identified employee future
benefits, impairment,
provisions, share-based
payments and income taxes
as areas that may be
significantly affected by
the transition.
 107 Agrium




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##### 



3. Business Acquisitions
 CF Industries Holdings, Inc.
    UAP Holding Corp.
   Fair values of assets acquired and liabilities assumedWorking capital
    
    
    577Property, plant and equipment
    
    
    157Customer relationship intangibles
    
    
    500Other finite-lived intangibles
    
    
    106Indefinite-lived intangibles
    
    
    8Goodwill (not deductible for income tax purposes)
    
    
    1,617Debt and other liabilities, including future income taxes of $178-million
    
    
    (807
    )2,158Debt and other liabilities repaid on closing, net of cash on hand
    
    
    5832,741Consideration and acquisition costsCash and debt
    
    
    1,404Cash proceeds from share offering in December 2007
    
    
    1,322Transaction costs
    
    
    152,741
 Common Market Fertilizers S.A.
  108 Agrium




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##### 



4. Other Expenses (Income)
 2009
    
    
    2008
    
    
    2007Stock-based compensation
    
    
    73
    
    
    
    (25
    )
    
    
    113Loss on derivative financial instruments
    
    
    84
    
    
    
    
    
    
    
    20Environmental remediation and accretion of
asset retirement obligations
    
    
    9
    
    
    
    15
    
    
    
    5Interest income
    
    
    (56
    )
    
    
    (57
    )
    
    
    (30
    )Foreign exchange loss (gain)
    
    
    17
    
    
    
    (119
    )
    
    
    (41
    )Bad debt expense
    
    
    33
    
    
    
    23
    
    
    
    7Gain on disposal of property, plant and
equipment, and investments
    
    
    (6
    )
    
    
    (8
    )
    
    
    (4
    )Other
    
    
    (12
    )
    
    
    46
    
    
    
    19142
    
    
    
    (125
    )
    
    
    89
 5. Income Taxes
 Major factors that caused variations from the expected combinedCanadian federal and provincial statutory income tax rates
    
    2009
    
    
    2008
    
    
    2007Earnings before income taxes and non-controlling interestsCanadian
    
    
    262
    
    
    
    1,180
    
    
    
    239Foreign
    
    
    208
    
    
    
    701
    
    
    
    403470
    
    
    
    1,881
    
    
    
    642Statutory rate (%)
    
    
    30
    
    
    
    30
    
    
    
    33Income taxes at statutory rates
    
    
    140
    
    
    
    571
    
    
    
    212Foreign exchange (losses) gains relating to Canadian operations
    
    
    26
    
    
    
    (36
    )
    
    
    16Differences in foreign tax rates
    
    
    (59
    )
    
    
    16
    
    
    
    (17
    )Canadian tax rate adjustment
    
    
    
    
    
    
    
    
    
    
    (9
    )Change in valuation allowance
    
    
    5
    
    
    
    26
    
    
    
    Other
    
    
    (7
    )
    
    
    12
    
    
    
    2Income taxes
    
    
    105
    
    
    
    589
    
    
    
    204CurrentCanadian
    
    
    322
    
    
    
    42
    
    
    
    (5
    )Foreign
    
    
    92
    
    
    
    184
    
    
    
    90414
    
    
    
    226
    
    
    
    85FutureCanadian
    
    
    (230
    )
    
    
    291
    
    
    
    83Foreign
    
    
    (79
    )
    
    
    72
    
    
    
    36(309
    )
    
    
    363
    
    
    
    119105
    
    
    
    589
    
    
    
    204
 109 Agrium




---



##### 



Significant components of future income tax liabilities and assets
    
    2009
    
    
    2008Future income tax liabilitiesAccumulated depreciation and amortization
    
    
    389
    
    
    
    371Deferred income
    
    
    144
    
    
    
    363Other
    
    
    160
    
    
    
    157Total future income tax liabilities
    
    
    693
    
    
    
    891Future income tax assetsLoss carry-forwards expiring through 2029
    
    
    25
    
    
    
    12Asset retirement obligations and environmental remediation
    
    
    80
    
    
    
    72Employee future benefits and incentives
    
    
    64
    
    
    
    42Receivables, inventories and accrued liabilities
    
    
    92
    
    
    
    72Other
    
    
    9
    
    
    
    19Future income tax assets before valuation allowance
    
    
    270
    
    
    
    217Valuation allowance
    
    
    (21
    )
    
    
    (32
    )Total future income tax assets, net of valuation allowance
    
    
    249
    
    
    
    185Net future income tax liabilities
    
    
    444
    
    
    
    706Current future income tax assets
    
    
    77
    
    
    
    19Non-current future income tax liabilities
    
    
    521
    
    
    
    725Net future income tax liabilities
    
    
    444
    
    
    
    706
 6. Earnings Per Share
 2009
    
    
    2008
    
    
    2007NumeratorNet earnings
    
    
    366
    
    
    
    1,322
    
    
    
    441DenominatorWeighted-average number of shares outstanding for
basic earnings per share
    
    
    157
    
    
    
    158
    
    
    
    135Dilutive instruments  stock options (a)(b)
    
    
    
    
    
    
    1
    
    
    
    1Weighted-average number of shares outstanding for
diluted earnings per share
    
    
    157
    
    
    
    159
    
    
    
    136Basic earnings per share
    
    
    2.33
    
    
    
    8.39
    
    
    
    3.28Diluted earnings per share
    
    
    2.33
    
    
    
    8.34
    
    
    
    3.25
 (a)
    
    For diluted earnings per share, conversion or exercise is assumed only if the effect is
dilutive to basic earnings per share.(b)
    
    Using the treasury stock method, stock options with an average grant price less than or
equal to the average share price during the year are considered dilutive and potential
common share equivalents are considered outstanding. At December 31, 2009, there were one
million dilutive stock options (December 31, 2008  one million, December 31, 2007  one
million).
 7. Additional Cash Flow Information
 2009
    
    
    2008Cash
    
    
    870
    
    
    
    319Short-term investments
    
    
    63
    
    
    
    55933
    
    
    
    374
 110 Agrium




---



##### 



Net changes in non-cash working capital
    
    2009
    
    
    2008
    
    
    2007Accounts receivable
    
    
    (1
    )
    
    
    434
    
    
    
    (65
    )Inventories
    
    
    911
    
    
    
    (911
    )
    
    
    (184
    )Prepaid expenses and deposits
    
    
    (109
    )
    
    
    (114
    )
    
    
    (146
    )Accounts payable and accrued liabilities
    
    
    (193
    )
    
    
    (458
    )
    
    
    137Income and other taxes receivable/payable
    
    
    342
    
    
    
    (48
    )
    
    
    (43
    )Other
    
    
    
    
    
    
    
    
    
    
    (51
    )950
    
    
    
    (1,097
    )
    
    
    (352
    )Supplemental cash flow disclosureInterest paid
    
    
    107
    
    
    
    92
    
    
    
    69Income taxes paid
    
    
    91
    
    
    
    293
    
    
    
    123Dividends per share
    
    
    0.11
    
    
    
    0.11
    
    
    
    0.11
 8. Accounts Receivable
 2009
    
    
    2008Trade accountsRetail
    
    
    727
    
    
    
    638Wholesale
    
    
    338
    
    
    
    305Advanced Technologies
    
    
    27
    
    
    
    20Income and other taxes
    
    
    127
    
    
    
    167Future income tax
    
    
    77
    
    
    
    19Rebates and other non-trade accounts
    
    
    68
    
    
    
    124Derivative financial instruments
    
    
    6
    
    
    
    5Allowance for doubtful accounts
    
    
    (46
    )
    
    
    (36
    )1,324
    
    
    
    1,242
 9. Inventories
 2009
    
    
    2008Advanced
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    AdvancedRetail
    
    
    Wholesale
    
    
    Technologies
    
    
    Total
    
    
    Retail
    
    
    Wholesale
    
    
    Technologies
    
    
    TotalRaw materials
    
    
    24
    
    
    
    193
    
    
    
    14
    
    
    
    231
    
    
    
    27
    
    
    
    172
    
    
    
    17
    
    
    
    216Finished goods
    
    
    89
    
    
    
    205
    
    
    
    65
    
    
    
    359
    
    
    
    47
    
    
    
    329
    
    
    
    41
    
    
    
    417Product for resale
    
    
    1,451
    
    
    
    96
    
    
    
    
    
    
    
    1,547
    
    
    
    1,981
    
    
    
    433
    
    
    
    
    
    
    
    2,4141,564
    
    
    
    494
    
    
    
    79
    
    
    
    2,137
    
    
    
    2,055
    
    
    
    934
    
    
    
    58
    
    
    
    3,047
  111 Agrium




---



##### 



10. Property, Plant and Equipment
 2009
    
    
    2008Estimateduseful life
    
    
    
    
    
    
    Accumulated
    
    
    Net book
    
    
    
    
    
    
    Accumulated
    
    
    Net book(years)
    
    
    Cost
    
    
    depreciation
    
    
    value
    
    
    Cost
    
    
    depreciation
    
    
    valueLand
    
    
    
    
    
    
    73
    
    
    
    
    
    
    
    73
    
    
    
    73
    
    
    
    
    
    
    
    73Building and improvements
    
    
    2-25
    
    
    
    687
    
    
    
    338
    
    
    
    349
    
    
    
    578
    
    
    
    267
    
    
    
    311Machinery and equipment
    
    
    3-25
    
    
    
    2,892
    
    
    
    1,836
    
    
    
    1,056
    
    
    
    2,409
    
    
    
    1,468
    
    
    
    941Assets under construction
    
    
    
    
    
    
    274
    
    
    
    
    
    
    
    274
    
    
    
    683
    
    
    
    
    
    
    
    683Other
    
    
    3-25
    
    
    
    74
    
    
    
    44
    
    
    
    30
    
    
    
    69
    
    
    
    41
    
    
    
    284,000
    
    
    
    2,218
    
    
    
    1,782
    
    
    
    3,812
    
    
    
    1,776
    
    
    
    2,036
 11. Intangibles
 2009
    
    
    2008Estimateduseful life
    
    
    
    
    
    
    Accumulated
    
    
    Net book
    
    
    
    
    
    
    Accumulated
    
    
    Net book(years)(c)
    
    
    Cost
    
    
    depreciation
    
    
    value
    
    
    Cost
    
    
    depreciation
    
    
    valueTrade names (a)
    
    
    5-15
    
    
    
    31
    
    
    
    5
    
    
    
    26
    
    
    
    30
    
    
    
    
    
    
    
    30Customer relationships (b)
    
    
    5-15
    
    
    
    543
    
    
    
    71
    
    
    
    472
    
    
    
    538
    
    
    
    35
    
    
    
    503Technology (b)
    
    
    7-19
    
    
    
    24
    
    
    
    9
    
    
    
    15
    
    
    
    23
    
    
    
    6
    
    
    
    17Other (b)
    
    
    2-20
    
    
    
    131
    
    
    
    27
    
    
    
    104
    
    
    
    118
    
    
    
    15
    
    
    
    103729
    
    
    
    112
    
    
    
    617
    
    
    
    709
    
    
    
    56
    
    
    
    653
 (a)
    
    Certain of the Companys trade names with a cost of $17-million have indefinite lives
for accounting purposes and accordingly are not amortized. The Company completed its annual
test for impairment of indefinite-lived intangibles in the third quarter of 2009 and
determined that there was no impairment. Trade names with a cost of $14-million are being
amortized over their estimated useful lives.(b)
    
    Amortization expense of finite-lived intangibles for 2009 was $56-million (2008 
$42-million, 2007  $10-million) and over the next five years is estimated to be
approximately $54-million annually.(c)
    
    At December 31, 2009 the weighted-average amortization period for finite-lived intangibles is
10 years (December 31, 2008  10 years).
 12. Goodwill
 2009
    
    
    2008Advanced
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    AdvancedRetail
    
    
    Wholesale
    
    
    Technologies
    
    
    Total
    
    
    Retail
    
    
    Wholesale
    
    
    Technologies
    
    
    TotalBalance, beginning of year
    
    
    1,732
    
    
    
    4
    
    
    
    47
    
    
    
    1,783
    
    
    
    127
    
    
    
    
    
    
    
    51
    
    
    
    178Acquired during the year
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    1,605
    
    
    
    4
    
    
    
    
    
    
    
    1,609Purchase price allocation
adjustments
    
    
    12
    
    
    
    2
    
    
    
    
    
    
    
    14
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Foreign currency translation
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    (4
    )
    
    
    (4
    )Balance, end of year (a)
    
    
    1,745
    
    
    
    6
    
    
    
    50
    
    
    
    1,801
    
    
    
    1,732
    
    
    
    4
    
    
    
    47
    
    
    
    1,783
 (a)
    
    The Company completed its annual test for impairment of goodwill during the third
quarter of 2009 and determined that there was no impairment.
 112 Agrium




---



##### 



13. Investment in Equity Investees
 Interest
    
    
    2009
    
    
    2008MISR Fertilizer Production Company S.A.E. (MOPCO)
    
    
    26.0
    %
    
    
    270
    
    
    
    Hanfeng Evergreen Inc. (Hanfeng)
    
    
    19.5
    %
    
    
    87
    
    
    
    67Other
    
    
    
    
    
    
    13
    
    
    
    4370
    
    
    
    71
        Earnings from equity investees
    
    2009
    
    
    2008MOPCO
    
    
    20
    
    
    
    Hanfeng
    
    
    5
    
    
    
    4Other
    
    
    2
    
    
    
    27
    
    
    
    4
 Cumulative undistributed earnings
    
    2009
    
    
    2008MOPCO
    
    
    20
    
    
    
    Hanfeng
    
    
    9
    
    
    
    4Other
    
    
    2
    
    
    
    31
    
    
    
    4
 113 Agrium




---



##### 



Assets, liabilities and results of operations of the above equity investees
    
    2009
    
    
    2008Net sales
    
    
    437
    
    
    
    313Net earnings
    
    
    105
    
    
    
    35Assets
    
    
    1,364
    
    
    
    248Liabilities
    
    
    382
    
    
    
    56Shareholders equity
    
    
    982
    
    
    
    192
 14. Other Assets
 2009
    
    
    2008Investments
    
    
    25
    
    
    
    27Receivables
    
    
    22
    
    
    
    27Derivative financial instruments
    
    
    3
    
    
    
    16Deferred costs (a)
    
    
    20
    
    
    
    61Other
    
    
    25
    
    
    
    2595
    
    
    
    156
 (a)
    
    Amortization expense of $30-million was included in cost of
product sold in 2009 (2008  $42-million, 2007  $26-million).
 15. Debt
 2009
    
    
    
    
    
    
    2008Rate (%)(a)
    
    
    Total
    
    
    Unutilized
    
    
    Utilized
    
    
    UtilizedBank indebtednessNorth American revolving credit
facilities expiring 2010
    
    
    
    
    
    
    60
    
    
    
    60
    
    
    
    
    
    
    
    North American revolving credit
facilities expiring 2012 (b)(c)
    
    
    
    
    
    
    775
    
    
    
    775
    
    
    
    
    
    
    
    300European credit facilities
expiring 2010 to 2012 (d)(e)
    
    
    2.33
    
    
    
    450
    
    
    
    376
    
    
    
    74
    
    
    
    120South American credit facilities
expiring 2010 to 2012 (f)
    
    
    3.29
    
    
    
    121
    
    
    
    89
    
    
    
    32
    
    
    
    70Egypt bridge loan (g)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1201,406
    
    
    
    1,300
    
    
    
    106
    
    
    
    610
 Long-term debt
    
    2009
    
    
    2008UnsecuredFloating rate bank loans due May 5, 2013 (h)
    
    
    460
    
    
    
    460Floating rate bank loans due November 16, 2012 (i)
    
    
    26
    
    
    
    6.75% debentures due January 15, 2019 (j)(k)
    
    
    500
    
    
    
    5007.125% debentures due May 23, 2036 (k)
    
    
    300
    
    
    
    3007.7% debentures due February 1, 2017 (k)
    
    
    100
    
    
    
    1007.8% debentures due February 1, 2027 (k)
    
    
    125
    
    
    
    1258.25% debentures due February 15, 2011 (k)
    
    
    125
    
    
    
    125SecuredOther (l)
    
    
    73
    
    
    
    241,709
    
    
    
    1,634Unamortized transaction costs
    
    
    (10
    )
    
    
    (12
    )1,699
    
    
    
    1,622
 114 Agrium




---



##### 



Accounts receivable securitization
(m)
    
    2009
    
    
    2008Cumulative proceeds from securitization, beginning of period
    
    
    200
    
    
    
    Proceeds from sales of receivables
    
    
    400
    
    
    
    200Securitization reduction payments
    
    
    (600
    )
    
    
    Cumulative proceeds from securitization, end of period
    
    
    
    
    
    
    200
 (a)
    
    Weighted average rates at December 31, 2009.(b)
    
    On May 5, 2008, the Company increased its syndicated revolving credit facility to $775-million.
Interest is at various base rates plus a variable margin.(c)
    
    Outstanding letters of credit issued under the Companys revolving credit facilities at
December 31, 2009 were $74-million, reducing credit available under the facilities to $701-million.(d)
    
    The facilities bear interest at various base rates plus a fixed or variable margin. Of the
total, $137-million is secured (December 31, 2008  $207-million). Security pledged for the
utilized balance includes inventory, accounts receivable and other items with a total carrying
value of $87-million (December 31, 2008  $125-million). The utilized balance includes
Euro-denominated debt of $31-million (December 31, 2008  $62-million).(e)
    
    In December 2009, the
Company entered into a multi-currency revolving facility for Euro-denominated debt of $172-million
to replace existing credit facilities. Interest is at LIBOR plus a variable margin or EURIBOR plus
a variable margin. The facility expires in December 2011.(f)
    
    For the facilities utilized, nil (December 31, 2008  $8-million) is denominated in Argentine
peso. Of the total, $105-million is uncommitted (December 31, 2008  $130-million) of which
$28-million has been utilized (December 31, 2008  $54-million).(g)
    
    Effective January 26, 2009, MOPCO
assumed this debt.(h)
    
    The loans bear
interest at LIBOR plus 0.55%.(i)
    
    South
American loans bear interest at LIBOR plus
5.25%.(j)
    
    On September 8, 2008, the Company issued $500-million of 6.75% debentures for proceeds of
$495-million net of related expenses.(k)
    
    Debentures have various provisions that allow the Company
to redeem debt prior to maturity, at the Companys option, at specified prices.(l)
    
    Includes a
capital lease of $16-million (December 31, 2008  $14-million) with an annual payment of $2-million
(2008  $2-million) with the final installment due 2019, for land and building with a carrying
value of $10-million (December 31, 2008  $10-million).(m)
    
    The Company has a revolving purchase and sale agreement to sell, with limited recourse,
accounts receivable to a maximum of $200-million (December 31, 2008  $200-million). The
receivables are sold to an unrelated financial institution. The Company provides a security
interest to the financial institution in the form of accounts receivable in excess of the net cash
proceeds received. The agreement expires in December 2012.(n)
    
    The Company maintains a $24-million
irrevocable standby letter of credit facility in favor of a subsidiary. At December 31, 2009,
$22-million was outstanding (December 31, 2008  $22-million), which does not reduce availability
under the Companys other credit facilities.(o)
    
    Revolving credit facilities require the Company maintain specific covenants described under
Capital Management.
 16. Accounts Payable and Accrued Liabilities
 2009
    
    
    2008Trade
    
    
    956
    
    
    
    828Customer prepayments
    
    
    529
    
    
    
    480Non-trade
    
    
    33
    
    
    
    35Accrued liabilities
    
    
    508
    
    
    
    654Income and other taxes
    
    
    396
    
    
    
    86Accrued interest
    
    
    30
    
    
    
    26Dividends
    
    
    9
    
    
    
    9Derivative financial instruments
    
    
    14
    
    
    
    822,475
    
    
    
    2,200
 17. Other Liabilities
 2009
    
    
    2008Environmental remediation
    
    
    140
    
    
    
    135Asset retirement obligations
    
    
    106
    
    
    
    86Stock-based compensation
    
    
    33
    
    
    
    15Employee future benefits
    
    
    68
    
    
    
    65Derivative financial instruments
    
    
    25
    
    
    
    11Other
    
    
    9
    
    
    
    16381
    
    
    
    328
 115 Agrium




---



##### 



18. Asset Retirement Obligations
  2009
    
    
    2008Balance, beginning of year
    
    
    86
    
    
    
    84Accretion, included in other expenses (income)
    
    
    6
    
    
    
    5Additions
    
    
    11
    
    
    
    12Settlements
    
    
    (7
    )
    
    
    (2
    )Foreign currency translation
    
    
    10
    
    
    
    (13
    )Balance, end of year
    
    
    106
    
    
    
    86Estimated undiscounted, inflation-adjusted cash flow required to settle
asset retirement obligations that will be settled between 2010 and 2136
    
    
    660
    
    
    
    651
 19. Stock-based Compensation
 Plan
    
    Eligibility
    
    Granted
    
    Vesting period
    
    Term
    
    SettlementStock Options and
Tandem Stock
Appreciation
Rights (TSAR)
    
    Officers and
employees
    
    Annually
    
    25% per year
over four years
    
    10 years
    
    Cash or sharesStock Appreciation
Rights (SAR)
    
    Certain
employees
outside Canada
    
    Annually
    
    25% per year
over four years
    
    10 years
    
    CashPerformance
Share Units
(PSU)
    
    Officers and
employees
    
    Annually
    
    On the third
anniversary of
the grant date
    
    n/a
    
    CashDirectors
Deferred Share
Units (DSU)
    
    Directors
    
    At the
discretion of
the Board
of Directors
    
    Fully vested
upon grant
    
    n/a
    
    In cash on
directors
departure from
the Board
 Stock Options and Tandem Stock Appreciation Rights Plan
   116 Agrium




---



##### 



Stock
option activity (number of options in thousands; weighted average price in U.S.
dollars)
 2009
    
    
    2008
    
    
    2007Options and TSAR
    
    Options
    
    
    Price
    
    
    Options
    
    
    Price
    
    
    Options
    
    
    PriceOutstanding,
beginning of year
    
    
    2,906
    
    
    
    25.95
    
    
    
    3,041
    
    
    
    23.93
    
    
    
    3,860
    
    
    
    16.18Granted
    
    
    517
    
    
    
    40.30
    
    
    
    297
    
    
    
    74.88
    
    
    
    493
    
    
    
    42.96Exercised
    
    
    (522
    )
    
    
    15.76
    
    
    
    (432
    )
    
    
    16.05
    
    
    
    (1,312
    )
    
    
    16.59Outstanding, end of year
    
    
    2,901
    
    
    
    31.16
    
    
    
    2,906
    
    
    
    25.95
    
    
    
    3,041
    
    
    
    23.93Exercisable, end of year
    
    
    1,829
    
    
    
    23.04
    
    
    
    1,920
    
    
    
    16.59
    
    
    
    1,878
    
    
    
    17.64Maximum available for
future grants, end of year
    
    
    1,033
    
    
    
    
    
    
    
    1,489
    
    
    
    
    
    
    
    1,597Cash received from
equity settled awards
    
    
    
    
    
    
    7
    
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    15Tax benefit from
equity settled awards
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    3
 Options outstanding
  At December 31, 2009
    
    
    
    
    
    Options Outstanding
    
    
    Options ExercisableRemaining
    
    
    
    
    
    
    Exercise
    
    
    
    
    
    
    ExerciseRange of Exercise Prices
    
    contractual life
    
    
    Options
    
    
    price
    
    
    Options
    
    
    priceLess than 14.91
    
    
    3
    
    
    
    433
    
    
    
    14.63
    
    
    
    433
    
    
    
    14.6314.91 to 15.71
    
    
    4
    
    
    
    574
    
    
    
    15.40
    
    
    
    574
    
    
    
    15.4015.72 to 24.87
    
    
    5
    
    
    
    631
    
    
    
    23.24
    
    
    
    504
    
    
    
    22.9124.88 to 40.25
    
    
    7
    
    
    
    456
    
    
    
    39.73
    
    
    
    228
    
    
    
    39.7340.26 to 51.14
    
    
    9
    
    
    
    518
    
    
    
    40.44
    
    
    
    12
    
    
    
    43.2751.15 to 112.45
    
    
    8
    
    
    
    289
    
    
    
    74.36
    
    
    
    78
    
    
    
    75.166
    
    
    
    2,901
    
    
    
    31.16
    
    
    
    1,829
    
    
    
    23.04
 Stock Appreciation Rights Plan
  SAR outstanding
  At December 31, 2009
    
    
    
    
    
    SAR Outstanding
    
    
    SAR ExercisableRemaining
    
    
    
    
    
    
    Exercise
    
    
    
    
    
    
    ExerciseRange of Exercise Prices
    
    contractual life
    
    
    Units
    
    
    price
    
    
    Units
    
    
    priceLess than 22.79
    
    
    4
    
    
    
    50
    
    
    
    15.35
    
    
    
    50
    
    
    
    15.3522.79 to 29.95
    
    
    6
    
    
    
    104
    
    
    
    24.51
    
    
    
    76
    
    
    
    24.4729.96 to 39.73
    
    
    7
    
    
    
    123
    
    
    
    39.59
    
    
    
    60
    
    
    
    39.6139.74 to 45.25
    
    
    9
    
    
    
    142
    
    
    
    40.30
    
    
    
    
    
    
    
    45.26 to 84.51
    
    
    7
    
    
    
    78
    
    
    
    74.07
    
    
    
    26
    
    
    
    73.677
    
    
    
    497
    
    
    
    39.63
    
    
    
    212
    
    
    
    32.58
 117 Agrium




---



##### 



Performance Share Units Plan
   PSU Activity (number of PSUs in thousands)
    
    2009
    
    
    2008
    
    
    2007Outstanding, beginning of year
    
    
    636
    
    
    
    816
    
    
    
    894Granted
    
    
    327
    
    
    
    146
    
    
    
    223Settled
    
    
    (275
    )
    
    
    (326
    )
    
    
    (301
    )Outstanding, end of year
    
    
    688
    
    
    
    636
    
    
    
    816
 Directors Deferred Share Units Plans
   Compensation expense (recovery) by plan
    
    2009
    
    
    2008
    
    
    2007Stock options and TSAR
    
    
    29
    
    
    
    (11
    )
    
    
    40SAR
    
    
    9
    
    
    
    (7
    )
    
    
    10PSU
    
    
    30
    
    
    
    (4
    )
    
    
    56DSU
    
    
    5
    
    
    
    (3
    )
    
    
    773
    
    
    
    (25
    )
    
    
    113
  118 Agrium




---



##### 



20. Employee Future Benefits
 Obligations and assets
(a)
    
    Defined benefit pension plans
    
    
    Post-retirement benefit plans2009
    
    
    2008
    
    
    2007
    
    
    2009
    
    
    2008
    
    
    2007Change in accrued benefit obligationsBalance, beginning of year
    
    
    170
    
    
    
    192
    
    
    
    184
    
    
    
    60
    
    
    
    89
    
    
    
    82Obligations associated with acquisitions (b)
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Foreign currency translation
on Canadian obligations
    
    
    18
    
    
    
    (26
    )
    
    
    18
    
    
    
    11
    
    
    
    (17
    )
    
    
    10Interest cost
    
    
    11
    
    
    
    12
    
    
    
    12
    
    
    
    3
    
    
    
    5
    
    
    
    6Service cost
    
    
    4
    
    
    
    4
    
    
    
    8
    
    
    
    2
    
    
    
    3
    
    
    
    5Actuarial loss (gain)
    
    
    10
    
    
    
    (8
    )
    
    
    (8
    )
    
    
    (16
    )
    
    
    (16
    )
    
    
    (11
    )Amendments
    
    
    1
    
    
    
    2
    
    
    
    
    
    
    
    1
    
    
    
    (3
    )
    
    
    Transfer from other plans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1
    )Curtailment gain (c)
    
    
    
    
    
    
    
    
    
    
    (13
    )
    
    
    
    
    
    
    
    
    
    
    Benefits paid
    
    
    (10
    )
    
    
    (10
    )
    
    
    (9
    )
    
    
    (3
    )
    
    
    (1
    )
    
    
    (2
    )Balance, end of year
    
    
    204
    
    
    
    170
    
    
    
    192
    
    
    
    58
    
    
    
    60
    
    
    
    89Change in plan assetsFair value, beginning of year
    
    
    113
    
    
    
    166
    
    
    
    140
    
    
    
    
    
    
    
    
    
    
    
    Assets associated with acquisitions (b)
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Foreign currency translation
on Canadian assets
    
    
    11
    
    
    
    (16
    )
    
    
    13
    
    
    
    
    
    
    
    
    
    
    
    Amendments
    
    
    
    
    
    
    (7
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Actual return on plan assets
    
    
    19
    
    
    
    (27
    )
    
    
    13
    
    
    
    2
    
    
    
    
    
    
    
    Employer contributions
    
    
    21
    
    
    
    3
    
    
    
    9
    
    
    
    1
    
    
    
    1
    
    
    
    2Benefits paid
    
    
    (10
    )
    
    
    (10
    )
    
    
    (9
    )
    
    
    (3
    )
    
    
    (1
    )
    
    
    (2
    )Fair value, end of year
    
    
    154
    
    
    
    113
    
    
    
    166
    
    
    
    
    
    
    
    
    
    
    
    Unfunded status
    
    
    50
    
    
    
    57
    
    
    
    26
    
    
    
    58
    
    
    
    60
    
    
    
    89Unrecognized net (loss) gain
    
    
    (53
    )
    
    
    (52
    )
    
    
    (19
    )
    
    
    4
    
    
    
    (9
    )
    
    
    (42
    )Unrecognized prior service (cost) benefit
    
    
    (4
    )
    
    
    (3
    )
    
    
    (5
    )
    
    
    6
    
    
    
    8
    
    
    
    10Accrued employee future benefit (asset) liability
    
    
    (7
    )
    
    
    2
    
    
    
    2
    
    
    
    68
    
    
    
    59
    
    
    
    57Amounts recognized in the consolidated balance sheets consist of:Prepaid employee future benefits
    
    
    (7
    )
    
    
    (4
    )
    
    
    (4
    )
    
    
    
    
    
    
    
    
    
    
    Other liabilities
    
    
    
    
    
    
    6
    
    
    
    6
    
    
    
    68
    
    
    
    59
    
    
    
    57(7
    )
    
    
    2
    
    
    
    2
    
    
    
    68
    
    
    
    59
    
    
    
    57
 
 (a)
    
    Disclosures for employee future benefits have a measurement date of December 31, 2009.
The effective date of the most recent actuarial valuations for funding purposes for the Canadian
registered plans was December 31, 2007. The next required valuation date for funding purposes is
December 31, 2010. For U.S. registered plans, the effective date of the most recent actuarial
valuation for funding purposes was January 1, 2009 and the next required valuation is January 1,
2010.(b)
    
    Obligations and assets associated with acquisitions in 2008 relate to the Companys acquisition
of UAP.(c)
    
    During 2007, the Company recognized a curtailment gain of $10-million from its U.S. defined
benefit pension plan.(d)
    
    The estimated aggregate expected contribution to fund the Companys defined benefit pension
plans for 2010 is $5-million. 119 Agrium




---



##### 



Defined benefit
    
    
    Post-retirementExpected benefit payments
    
    pension plans
    
    
    benefit plans
    
    
    Total2010
    
    
    17
    
    
    
    2
    
    
    
    192011
    
    
    11
    
    
    
    2
    
    
    
    132012
    
    
    11
    
    
    
    2
    
    
    
    132013
    
    
    11
    
    
    
    2
    
    
    
    132014
    
    
    12
    
    
    
    2
    
    
    
    142015 through 2019
    
    
    66
    
    
    
    16
    
    
    
    82
 Actuarial calculations of expense
    
    2009
    
    
    2008
    
    
    2007Defined benefit pension plansService cost for benefits earned during the year
    
    
    4
    
    
    
    4
    
    
    
    8Interest cost on accrued benefit obligations
    
    
    11
    
    
    
    12
    
    
    
    12Expected return on plan assets
    
    
    (9
    )
    
    
    (12
    )
    
    
    (10
    )Net amortization and deferral
    
    
    4
    
    
    
    1
    
    
    
    2Curtailment gain
    
    
    
    
    
    
    
    
    
    
    (10
    )Net expense
    
    
    10
    
    
    
    5
    
    
    
    2Post-retirement benefit plansService cost for benefits earned during the year
    
    
    2
    
    
    
    3
    
    
    
    5Interest cost on accrued benefit obligations
    
    
    3
    
    
    
    5
    
    
    
    6Net amortization and deferral
    
    
    (1
    )
    
    
    1
    
    
    
    1Net expense
    
    
    4
    
    
    
    9
    
    
    
    12Defined contribution pension plans
    
    
    30
    
    
    
    29
    
    
    
    18Total expense
    
    
    44
    
    
    
    43
    
    
    
    32
 Actuarial assumptions
    
    Future benefits obligation
    
    
    Future benefits expense(percent)
    
    2009
    
    
    2008
    
    
    2007
    
    
    2009
    
    
    2008
    
    
    2007Defined benefit pension plansDiscount rate (a)
    
    
    6
    
    
    
    6
    
    
    
    6
    
    
    
    6
    
    
    
    6
    
    
    
    5Long-term rate
of return on assets (b)
    
    
    n/a
    
    
    
    n/a
    
    
    
    n/a
    
    
    
    7
    
    
    
    7
    
    
    
    7Rate of increase in
compensation levels
    
    
    3
    
    
    
    3
    
    
    
    4
    
    
    
    3
    
    
    
    4
    
    
    
    4Post-retirement benefit plansDiscount rate
    
    
    6
    
    
    
    6
    
    
    
    5
    
    
    
    6
    
    
    
    6
    
    
    
    5
 
 (a)
    
    The discount rate assumed is the rate at which the pension and post-retirement
obligations could effectively be settled. The rate is based on high-quality (minimum rating of AA
or greater) fixed income investments with cash flows that match the timing and amount of the plans
expected cash flows.(b)
    
    The Companys assumption for the long-term rate of return on assets is based on the 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 plan. Expectations of real returns
and inflation are based on a combination of current market conditions, historical capital market
data and future expectations. 120 Agrium




---



##### 



Assumed and ultimate health care cost trend rates
    
    2009
    
    
    2008
    
    
    2007Health care cost trend rate assumed for the next fiscal year
    
    
    8
    
    
    
    8
    
    
    
    8Ultimate health care cost trend rate
    
    
    5
    
    
    
    5
    
    
    
    5Fiscal year the rate reaches the ultimate trend rate
    
    
    2017
    
    
    
    2017
    
    
    
    2014
 One percentage
    
    
    One percentageEffect of assumed health care cost trend rate changes
    
    point increase
    
    
    point decreaseAccumulated post-retirement benefit obligation
as of December 31, 2009
    
    
    7
    
    
    
    (6
    )Total of service and interest cost
    
    
    1
    
    
    
    (1
    )
 Asset allocation and investment strategy
  Defined benefit plan assets  asset allocation
    
    Target allocation
    
    
    Plan assetsAsset categories (percent)
    
    2010
    
    
    2009
    
    
    2008Cash and other
    
    
    0 - 10
    
    
    
    2
    
    
    
    2Equity securities (a)
    
    
    50 - 75
    
    
    
    61
    
    
    
    61Debt securities (b)
    
    
    25 - 50
    
    
    
    37
    
    
    
    37
 
 (a)
    
    Includes approximately 25 percent investments in Canadian common equities and 55 percent
in U.S. common equities in a variety of sectors including financial, energy, materials, health care
and technology.(b)
    
    Includes Canadian and U.S. government bonds and investment grade corporate bonds of Canadian
and U.S. issuers. Fair value of plan assets
    
    Level 1
    
    
    Level 2
    
    
    TotalCash and cash equivalents
    
    
    5
    
    
    
    
    
    
    
    5Equity securitiesCanadian common stocks
    
    
    25
    
    
    
    
    
    
    
    25U.S. common stocks
    
    
    56
    
    
    
    
    
    
    
    56Foreign common stocks
    
    
    13
    
    
    
    
    
    
    
    13Debt securitiesFixed income
    
    
    
    
    
    
    32
    
    
    
    32Government securities
    
    
    23
    
    
    
    
    
    
    
    23122
    
    
    
    32
    
    
    
    154
 21. Accumulated Other Comprehensive Income
 2009
    
    
    2008Cash flow hedges, net of tax
    
    
    2
    
    
    
    6Available for sale financial instruments, net of tax
    
    
    29
    
    
    
    Foreign currency translation
    
    
    (78
    )
    
    
    (178
    )(47
    )
    
    
    (172
    )
 121 Agrium




---



##### 



22. Financial Instruments
 Risk management
  Item
    
    Affected by
    
    Risk management policiesSales
    
    Product prices, Foreign currency
exchange rates: USD vs. CAD, ARS
(Argentine Peso), EUR, GBP
    
    Foreign currency forward and
option contractsCost of product sold 
natural gas and power
    
    Price of natural gas and power
    
    Natural gas forward, swap and option
contracts and heat rate swap contractsCost of product sold 
product purchased for resale
    
    Price of nutrients
purchased for resale
    
    Nutrient swaps and product
purchase commitmentsSelling, general and administrative,
and other expenses denominated
in local currencies
    
    Currency exchange rates: 
USD vs. CAD, ARS, EUR, GBP
    
    Foreign currency forward and
option contractsCapital expenditures
    
    Currency exchange rates: 
USD vs. CAD, ARS, EUR
    
    Foreign currency forward and
option contractsInterest expense
    
    USD and EUR interest rates
    
    Maintaining a combination of fixed and
floating rate debt; interest rate swaps to
manage risk for up to 10 yearsFinancial instrumentsMarket risk  currency risk
    
    USD balances in Canadian and
European subsidiaries; Foreign
currencies held in USD
denominated subsidiaries
    
    Foreign currency forward and option
contracts to manage risk for up to
three yearsMarket risk  natural gas, power
and nutrient price risk
    
    Market prices of natural gas,
power and nutrients
    
    Natural gas forward, swap and option
contracts and heat rate swap contracts
to manage power price risk for
up to five yearsMarket 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 yearsCredit risk
    
    Ability of customers or counterparties
to financial instruments to
meet obligations
    
    Credit approval and monitoring
practices; counterparty policiesLiquidity risk
    
    Fluctuations in cash flows
    
    Preparation and monitoring of detailed
forecasts of cash flows; maintenance
of cash balances and uncommitted,
multiple year credit facilities
  122 Agrium




---



##### 



Market risk
 a) Currency risk
   Balances in non-U.S. dollar subsidiaries (in U.S. dollar equivalent)
 2009
    
    
    2008Canadian
    
    
    
    
    
    
    Canadiandollars
    
    
    Euro
    
    
    dollars
    
    
    EuroCash and cash equivalents
    
    
    (2
    )
    
    
    5
    
    
    
    211
    
    
    
    2Accounts receivable
    
    
    69
    
    
    
    65
    
    
    
    115
    
    
    
    69Bank indebtedness
    
    
    
    
    
    
    (31
    )
    
    
    
    
    
    
    (62
    )Accounts payable and accrued liabilities
    
    
    (246
    )
    
    
    (38
    )
    
    
    (338
    )
    
    
    (87
    )(179
    )
    
    
    1
    
    
    
    (12
    )
    
    
    (78
    )
 Foreign exchange derivative financial instruments outstanding
 2009
    
    
    2008Notional
    
    
    
    
    
    
    
    
    
    
    Notional(millions,
    
    
    
    
    
    
    Fair value
    
    
    (millions,
    
    
    
    
    
    
    Fair valuebuy
    
    
    
    
    
    
    assets
    
    
    buy
    
    
    
    
    
    
    assetsSell/Buy
    
    currency)
    
    
    Maturities
    
    
    (liabilities)
    
    
    currency)
    
    
    Maturities
    
    
    (liabilities)USD/CAD forwards
    
    CAD 46
    
    
    
    2010
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    USD/EUR forwards
    
    
    
    
    
    
    
    
    
    
    
    
    
    EUR 15
    
    
    
    2009
    
    
    
    EUR/USD forwards
    
    USD 9
    
    
    
    2010
    
    
    
    
    
    
    USD 33
    
    
    
    2009
    
    
    
    GBP/USD forwards
    
    USD 2
    
    
    
    2010
    
    
    
    
    
    
    USD 5
    
    
    
    2009
    
    
    
    USD/CAD put
options purchased
    
    
    
    
    
    
    
    
    
    
    
    
    
    CAD 195
    
    
    
    2009
    
    
    
    2USD/CAD call options sold
    
    
    
    
    
    
    
    
    
    
    
    
    
    CAD 206
    
    
    
    2009
    
    
    
    (20
    )1
    
    
    
    
    
    
    
    
    
    
    
    (18
    )
 b) Commodity price risk
   123 Agrium




---



##### 



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




---



##### 



Maximum credit exposure based on derivativefinancial instruments in an asset position
    
    2009
    
    
    2008Foreign exchange contracts
    
    
    1
    
    
    
    Natural gas, power and nutrient contracts
    
    
    8
    
    
    
    219
    
    
    
    21
 Liquidity risk
   Fair values
   2009
    
    
    2008Fair value of long-term debt
    
    
    1,805
    
    
    
    1,578Carrying value of long-term debt
    
    
    1,709
    
    
    
    1,634Weighted-average effective interest rate on long-term debt (%)
    
    
    6
    
    
    
    6
 125 Agrium




---



##### 



Fair value of financial instruments
    
    2009Level 1
    
    
    Level 2
    
    
    Netting
    
    
    TotalCash and cash equivalents
    
    
    933
    
    
    
    
    
    
    
    
    
    
    
    933Accounts receivableForeign exchange derivative financial
instruments
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    1Gas, power and nutrient derivative
financial instruments
    
    
    35
    
    
    
    6
    
    
    
    (36
    )
    
    
    5Marketable securitiesInvestment in CF (available for sale)
    
    
    113
    
    
    
    
    
    
    
    
    
    
    
    113Other (held for trading)
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    1Other assetsGas, power and nutrient derivative
financial instruments
    
    
    26
    
    
    
    3
    
    
    
    (26
    )
    
    
    3Other (available for sale)
    
    
    25
    
    
    
    
    
    
    
    
    
    
    
    25Accounts payable and accrued liabilitiesGas, power and nutrient derivative
financial instruments
    
    
    (44
    )
    
    
    (6
    )
    
    
    36
    
    
    
    (14
    )Other liabilitiesGas, power and nutrient derivative
financial instruments
    
    
    (47
    )
    
    
    (4
    )
    
    
    26
    
    
    
    (25
    )
 Fair value of financial instruments
    
    2008Level 1
    
    
    Level 2
    
    
    Netting
    
    
    TotalCash and cash equivalents
    
    
    374
    
    
    
    
    
    
    
    
    
    
    
    374Accounts receivableForeign exchange derivative
financial instruments
    
    
    
    
    
    
    2
    
    
    
    (2
    )
    
    
    Gas, power and nutrient
derivative financial
instruments
    
    
    8
    
    
    
    5
    
    
    
    (8
    )
    
    
    5Other assetsGas, power and nutrient
derivative financial
instruments
    
    
    40
    
    
    
    5
    
    
    
    (29
    )
    
    
    16Other (available for sale)
    
    
    27
    
    
    
    
    
    
    
    
    
    
    
    27Accounts payable and accrued liabilitiesForeign exchange derivative
financial instruments
    
    
    
    
    
    
    (20
    )
    
    
    2
    
    
    
    (18
    )Gas, power and nutrient
derivative financial
instruments
    
    
    (60
    )
    
    
    (13
    )
    
    
    9
    
    
    
    (64
    )Other liabilitiesGas, power and nutrient
derivative financial
instruments
    
    
    (37
    )
    
    
    (2
    )
    
    
    28
    
    
    
    (11
    )
 126 Agrium




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##### 



23. Commitments
 2010
    
    
    2011
    
    
    2012
    
    
    2013
    
    
    2014Cost of product soldOperating lease commitments (a)
    
    
    125
    
    
    
    30
    
    
    
    24
    
    
    
    16
    
    
    
    9Natural gas and other (b)(c)
    
    
    487
    
    
    
    55
    
    
    
    50
    
    
    
    21
    
    
    
    22Power, sulfuric acid and other (d)
    
    
    91
    
    
    
    35
    
    
    
    33
    
    
    
    33
    
    
    
    17OtherLong-term debt and capital lease repayments
(e)
    
    
    92
    
    
    
    261
    
    
    
    81
    
    
    
    537
    
    
    
    75Derivative financial instrumentsNatural gas
    
    
    9
    
    
    
    4
    
    
    
    9
    
    
    
    8
    
    
    
    Power
    
    
    1
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    805
    
    
    
    386
    
    
    
    197
    
    
    
    615
    
    
    
    123
 
 (a)
    
    Operating lease commitments consist primarily of leases for rail cars and contractual
commitments at distribution facilities in Wholesale, vehicles and application equipment in
Retail, and office equipment and property leases throughout the Companys operations.
Commitments represent minimum payments under each agreement in each of the next five years.
In 2009, expenses for operating leases were $162-million (2008  $158-million; 2007 
$46-million).(b)
    
    The Companys minimum commitments for North American natural gas purchases, which are
floating-rate contracts, are calculated using the prevailing regional gas prices for U.S.
facilities and the AECO forward prices for Canadian facilities at December 31, 2009.(c)
    
    Commitments include the Companys proportionate share of commitments of joint ventures.
Profertil has three fixed-price gas contracts denominated in U.S. dollars, expiring in 2011,
2012 and 2017. These three contracts account for approximately 80 percent of Profertils gas
requirements. Repsol-YPF, our joint venture partner in Profertil, supplies approximately 27
percent of the gas under these contracts.(d)
    
    The Company has a power co-generation agreement for its Carseland facility which expires
December 31, 2021. The minimum commitment under this agreement is to purchase 60
megawatt-hours of power per hour (MW/hr) through 2011 and up to 20 MW/hr for the remainder
of the term based on the Carseland facility requirements. 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.(e)
    
    Payments include interest. 24. Guarantees
  25. Contingencies
 Environmental remediation
  Litigation
  127 Agrium




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##### 



Other
   26. Capital Management
   2009
    
    
    2008
    
    
    2007Net debt to net debt plus equity (%) (a)
    
    
    16
    
    
    
    31
    
    
    
    (22
    )Interest coverage (multiple) (b)
    
    
    7.5
    
    
    
    22.1
    
    
    
    12.7
 
 (a)
    
    Net debt includes bank indebtedness and long-term debt, net of cash and cash equivalents.
Equity includes shareholders equity.(b)
    
    Interest coverage is the last 12 months net earnings before interest expense, income taxes,
depreciation, amortization and asset impairment divided by interest, which includes interest
on long-term debt plus other interest.(c)
    
    The measures of debt, equity and net earnings described above are non-GAAP financial
measures which do not have a standardized meaning prescribed by Canadian GAAP and therefore
may not be comparable to similar measures presented by other issuers.(d)
    
    The Companys strategy for managing capital is unchanged from December 31, 2008.   128 Agrium




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##### 



27. Segmentation
 2009
    
    
    2008
    
    
    2007Consolidated net salesRetailCrop nutrients
    
    
    2,522
    
    
    
    2,718
    
    
    
    1,453Crop protection products
    
    
    2,638
    
    
    
    2,115
    
    
    
    619Seed, services and other
    
    
    1,004
    
    
    
    683
    
    
    
    3946,164
    
    
    
    5,516
    
    
    
    2,466WholesaleNitrogen
    
    
    1,247
    
    
    
    1,815
    
    
    
    1,535Potash
    
    
    333
    
    
    
    816
    
    
    
    305Phosphate
    
    
    436
    
    
    
    847
    
    
    
    466Product purchased for resale
    
    
    816
    
    
    
    971
    
    
    
    339Other
    
    
    187
    
    
    
    237
    
    
    
    2003,019
    
    
    
    4,686
    
    
    
    2,845Advanced Technologies
    
    
    304
    
    
    
    352
    
    
    
    249Other (a)
    
    
    (358
    )
    
    
    (523
    )
    
    
    (290
    )9,129
    
    
    
    10,031
    
    
    
    5,270Consolidated inter-segment salesRetail
    
    
    4
    
    
    
    5
    
    
    
    8Wholesale
    
    
    311
    
    
    
    459
    
    
    
    250Advanced Technologies
    
    
    43
    
    
    
    59
    
    
    
    32358
    
    
    
    523
    
    
    
    290Consolidated net earningsRetail
    
    
    163
    
    
    
    480
    
    
    
    177Wholesale
    
    
    495
    
    
    
    1,478
    
    
    
    667Advanced Technologies
    
    
    3
    
    
    
    33
    
    
    
    13Other (a)
    
    
    (80
    )
    
    
    25
    
    
    
    (142
    )Earnings before interest and income taxes (b)
    
    
    581
    
    
    
    2,016
    
    
    
    715Interest on long-term debt
    
    
    91
    
    
    
    82
    
    
    
    52Other interest
    
    
    19
    
    
    
    23
    
    
    
    18Earnings before income taxes (b)
    
    
    471
    
    
    
    1,911
    
    
    
    645Income taxes
    
    
    105
    
    
    
    589
    
    
    
    204366
    
    
    
    1,322
    
    
    
    441Total assetsRetail
    
    
    5,393
    
    
    
    5,536
    
    
    
    1,850Wholesale
    
    
    3,205
    
    
    
    3,981
    
    
    
    3,570Advanced Technologies
    
    
    418
    
    
    
    348
    
    
    
    372Other
    
    
    769
    
    
    
    (28
    )
    
    
    409,785
    
    
    
    9,837
    
    
    
    5,832Capital expendituresRetail
    
    
    77
    
    
    
    54
    
    
    
    42Wholesale
    
    
    201
    
    
    
    432
    
    
    
    409Advanced Technologies
    
    
    27
    
    
    
    12
    
    
    
    3Other
    
    
    8
    
    
    
    8
    
    
    
    313
    
    
    
    506
    
    
    
    454
 
 (a)
    
    The Other segment is a non-operating segment for inter-segment eliminations and corporate
functions. Net sales between segments are accounted for at prices that approximate fair market
value.(b)
    
    Net of non-controlling interests. 129 Agrium




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##### 



2009
    
    2008
    
    2007Net Sales
    
    
    PP&E
    
    
    Goodwill
    
    
    Net Sales
    
    
    PP&E
    
    
    Goodwill
    
    
    Net Sales
    
    
    PP&E
    
    
    GoodwillCanada
    
    
    1,073
    
    
    
    968
    
    
    
    2
    
    
    
    1,704
    
    
    
    682
    
    
    
    17
    
    
    
    1,033
    
    
    
    824
    
    
    
    17United States
    
    
    7,146
    
    
    
    583
    
    
    
    1,793
    
    
    
    7,296
    
    
    
    535
    
    
    
    1,762
    
    
    
    3,659
    
    
    
    381
    
    
    
    161Argentina
    
    
    283
    
    
    
    221
    
    
    
    
    
    
    
    477
    
    
    
    230
    
    
    
    
    
    
    
    373
    
    
    
    221
    
    
    
    Europe
    
    
    495
    
    
    
    7
    
    
    
    6
    
    
    
    480
    
    
    
    4
    
    
    
    4
    
    
    
    
    
    
    
    
    
    
    
    Egypt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    585
    
    
    
    
    
    
    
    
    
    
    
    346
    
    
    
    Other
    
    
    132
    
    
    
    3
    
    
    
    
    
    
    
    74
    
    
    
    
    
    
    
    
    
    
    
    205
    
    
    
    
    
    
    
    9,129
    
    
    
    1,782
    
    
    
    1,801
    
    
    
    10,031
    
    
    
    2,036
    
    
    
    1,783
    
    
    
    5,270
    
    
    
    1,772
    
    
    
    178
 28. Joint Ventures
   Statements of operations
    
    2009
    
    
    2008
    
    
    2007Net sales
    
    
    353
    
    
    
    408
    
    
    
    261Expenses
    
    
    282
    
    
    
    322
    
    
    
    173Income taxes
    
    
    26
    
    
    
    27
    
    
    
    32Proportionate share of net earnings of joint ventures
    
    
    45
    
    
    
    59
    
    
    
    56
 Statements of cash flows
    
    2009
    
    
    2008
    
    
    2007Operating activities
    
    
    78
    
    
    
    61
    
    
    
    51Investing activities
    
    
    (1
    )
    
    
    (13
    )
    
    
    (5
    )Financing activities
    
    
    (56
    )
    
    
    (28
    )
    
    
    (47
    )Proportionate share of increase (decrease) in cash
and cash equivalents of joint ventures
    
    
    21
    
    
    
    20
    
    
    
    (1
    )
 Balance sheets
    
    2009
    
    
    2008Current assets
    
    
    111
    
    
    
    138Long-term assets
    
    
    202
    
    
    
    213313
    
    
    
    351Current liabilities
    
    
    69
    
    
    
    104Long-term liabilities
    
    
    31
    
    
    
    9100
    
    
    
    113Proportionate share of net assets of joint ventures
    
    
    213
    
    
    
    238Cumulative earnings from the Companys interest in
joint ventures included in retained earnings
    
    
    59
    
    
    
    76
 130 Agrium