Agrium Reports Fourth Quarter; Retail Delivers Record Results

CALGARY, ALBERTA--(Marketwired - Feb 20, 2014) -

ALL AMOUNTS ARE STATED IN U.S.$

Agrium Inc. (TSX:AGU)(NYSE:AGU) announced today consolidated net earnings ("net earnings") from continuing operations of $110-million ($0.74 diluted earnings per share) for the fourth quarter of 2013, compared with net earnings from continuing operations of $358-million in the fourth quarter of 2012 ($2.37 diluted earnings per share). Net earnings were $99-million ($0.66 diluted earnings per share) for the fourth quarter of 2013, compared to net earnings of $354-million ($2.34 diluted earnings per share) in the fourth quarter of 2012.

Our net earnings from continuing operations, excluding the fourth quarter guidance exclusions mentioned below, were $126-million ($0.87 diluted earnings per share).¹ This excludes a purchase gain of $257-million related to the acquisition of the Viterra Inc. Agri-product assets ("Viterra acquisition") ($1.35 diluted earnings per share) and a fourth quarter pre-tax loss for the acquired Viterra operations of $27-million ($0.14 diluted earnings per share, includes $8-million of integration costs). The Viterra acquisition results were excluded from the original fourth quarter guidance provided in November 2013. Also excluded were $6-million of Corporate legal and other costs ($0.03 diluted earnings per share) incurred in the period related to the Viterra acquisition and a goodwill impairment of $220-million ($1.16 in diluted earnings per share) for the Landmark acquisition due to synergy delays and reduced expectations for sales, gross margins and long-term growth. Share-based payment expenses in the fourth quarter were $28-million ($0.15 diluted earnings per share).

Discontinued operations reported a net loss of $11-million ($0.08 diluted loss per share) for the fourth quarter and included a $75-million ($0.52 diluted earnings per share) insurance recovery for the resolution of a long-standing litigation case pertaining to soybean shipments and a $60-million post-tax write-down ($0.42 diluted earnings per share), primarily of goodwill, as a result of the previously announced strategic review of the Agrium Advanced Technologies business unit ("AAT").¹

On an annual basis, 2013 net earnings from continuing operations were $1.08-billion ($7.31 diluted earnings per share), down from net earnings from continuing operations of $1.52-billion ($9.67 diluted earnings per share) in 2012. 2013 net earnings were $1.06-billion ($7.20 diluted earnings per share), compared to $1.50-billion ($9.55 diluted earnings per share) in 2012.

"Agrium's Retail results were excellent this quarter, particularly considering the decline in nutrient prices that occurred and the compressed fall application season in the U.S.," commented Chuck Magro, Agrium's President & CEO. "Retail achieved record fourth quarter results due to increased margins across almost all shelves. Our Wholesale business unit, which has more direct exposure to volatility in nutrient markets, saw their results impacted by lower global prices across all nutrients. Global nitrogen and phosphate markets have firmed significantly in early 2014 in response to what we expect will be a strong spring season," continued Mr. Magro.

"In a quarter where price instability and a compressed application window were a challenge, we delivered record results for Retail, which helped generate $1.2-billion in cash flow from operations for the quarter. This is one illustration of the benefits of our integrated strategy and why we remain confident in our ability to generate strong results over the coming years and deliver on our long-term targets," added Mr. Magro.

¹ The $0.87 EPS = $0.74 EPS (net earnings from continuing operations) + $1.16 EPS (Landmark goodwill impairment) + $0.15 EPS (share based payments) + 0.17 EPS (Viterra operations) - $1.35 EPS (Viterra purchase gain). Fourth quarter effective tax rate of 24 percent from continuing operations was used for adjusted diluted earnings per share calculations.

All dollar amounts refer to United States ("U.S.") dollars except where otherwise stated. Certain financial measures in this press release are not prescribed by International Financial Reporting Standards ("IFRS"), and are defined in the Additional IFRS and Non-IFRS Financial Measures section of this press release.

The segmented financial reporting included in this press release differs from our 2012 annual financial statements due to changes in segmented reporting adopted in our 2013 annual financial statements. Comparative figures for AAT in this press release have not been restated to reflect changes in segmented financial reporting.

2013 Fourth Quarter Operating Results

CONSOLIDATED NET EARNINGS

We have restated 2012 comparative figures as a result of adopting IFRS 11 Joint Arrangements whereby the classification and accounting of our investment in Profertil S.A. and other joint arrangements previously accounted for using the proportionate consolidation method are accounted for using the equity method.

Management has commenced with a divestment process for components of the AAT business unit that were not transitioned to Wholesale. We have classified these net assets as held for sale and have classified the related results of operations (including comparative 2012 results) as discontinued. See pages 6 and 8 of this press release for further details.

Agrium's 2013 fourth quarter net earnings from continuing operations were $110-million, or $0.74 diluted earnings per share from continuing operations, compared to net earnings from continuing operations of $358-million, or $2.36 diluted earnings per share from continuing operations, for the same quarter of 2012.

Sales

Sales decreased by $226-million to $2.9-billion for the fourth quarter of 2013. Factors that affected our performance during the fourth quarter of 2013 compared to the fourth quarter of 2012 include the following:

• Wholesale sales decreased by 24 percent to $963-million due to lower realized sales prices across all product lines and lower nitrogen volumes; and
  
• Retail sales increased by 6 percent to $2.1-billion largely due to Viterra which accounted for $276-million in sales during the current quarter. Crop nutrient sales decreased as colder weather impacted North American sales.
  

Gross Profit

Our gross profit for the fourth quarter of 2013 was $740-million, a decrease of $234-million compared to the fourth quarter of 2012. The main drivers of this variance consisted of:

• Wholesale's gross profit decreased by $283-million to $170-million for the fourth quarter of 2013, compared to the fourth quarter of 2012 primarily as a result of weaker realized sales prices across all product lines and lower urea sales volumes due to outages at our Redwater and Carseland nitrogen facilities; and
  
• Retail's gross profit increased by $77-million to $586-million for the fourth quarter of 2013, compared to the fourth quarter of 2012 due to the inclusion of results from Viterra coupled with favorable nutrient cost positions and higher seed rebates from suppliers.
  

Expenses

Expenses increased by $112-million for the fourth quarter of 2013 compared to the fourth quarter of 2012. This difference is primarily a result of the following items:

• A $220-million goodwill impairment was recorded in Retail - Australia as a result of reduced expectations for sales, gross margins and long-term growth in Retail - Australia;
  
• An increase in Retail selling expenses of $73-million driven by increased costs associated with Viterra and other recent acquisitions (see section "Retail" for further discussion); and
  
• A $46-million unfavorable change in share-based payments, with a $28-million share-based payments expense in the current quarter compared to a $18-million share-based payments recovery in the same period last year (see section "Other" for further discussion).
  
  The above increases were partially offset by a $257-million purchase gain reported in the fourth quarter of 2013. This represents the difference between the fair value of acquired net assets and the purchase price.
  

The following table is a summary of our other expenses (income) for the fourth quarters of 2013 and 2012, respectively.

Effective Tax Rate

The effective tax rate on continuing operations was 24 percent for the fourth quarter compared to 27 percent for the same period last year due to permanent differences between tax and accounting on the Viterra purchase gain and the Retail - Australia goodwill impairment.

BUSINESS SEGMENT PERFORMANCE

Retail

Retail reported record fourth quarter sales of $2.1-billion up from $2.0-billion reported in the same quarter last year. Gross profit was $586-million in the fourth quarter of 2013, a 15 percent increase from last year's fourth quarter of $509-million. Retail reported EBITDA of $195-million, up $71-million from the fourth quarter of last year. Included in this quarter's results is a $257-million purchase gain for the Viterra acquisition, a $220-million goodwill impairment for the Landmark business in Australia, and results from the recently acquired Viterra business (fourth quarter EBITDA loss of $12-million), which included $8-million of integration costs. Excluding all Viterra-related items and the Landmark impairment, EBITDA would have been $170-million, the highest fourth quarter Retail EBITDA in our history. These excellent results were achieved due to increased margins for nutrients, seed and services and other product lines, which more than offset the headwinds of lower crop nutrient sales volumes (excluding Viterra volumes), lower nutrient prices and the compressed fall application season. On a full year basis, and excluding the items listed above for the fourth quarter, EBITDA reached $961-million in 2013, surpassing last year's record $951-million.

Total crop nutrient sales were $1.1-billion this quarter, on par with the fourth quarter of 2012. Incremental sales from the Viterra business were offset by lower nutrient sales volumes in the U.S. in the fourth quarter, due to the shortened fall application season. Gross profit for crop nutrients was $178-million this quarter, an increase of $23-million compared to the $155-million reported in the fourth quarter of 2012. Excluding the results from Viterra in the current quarter, gross profit increased by $4-million in 2013. Total crop nutrient margins as a percentage of sales were 17 percent in the fourth quarter of 2013, higher than the 14 percent reported in the same quarter last year. Although nutrient prices declined during the second half of 2013, increased prescription blend and proprietary nutrient sales resulted in higher dollar per tonne margins than 2012.

Crop protection sales were $511-million in the fourth quarter of 2013, compared to $491-million in sales in the same period last year. The increase was driven primarily by incremental sales from Viterra and higher sales of glyphosates in the quarter. Gross profit was $205-million this quarter, compared to $203-million reported in the fourth quarter of 2012. Crop protection margins as a percentage of sales were 40 percent this quarter. The 1 percent decline in margins in the fourth quarter of 2013 relative to the same period last year was due to a higher product mix of wholesale volumes, which traditionally represent lower margins than retail sales.

Seed sales were $95-million in the fourth quarter of 2013, down from the $105-million reported in the fourth quarter of last year. The reduction in North American seed sales was due to the late fall season, which particularly impacted wheat seed sales. Gross profit was $60-million this quarter, up from the $43-million reported last year. Seed margins as a percentage of sales were 63 percent in the fourth quarter of 2013, significantly higher than the 41 percent reported in the fourth quarter of 2012. The increase in gross profit and margins in the fourth quarter of 2013 is related to higher annual seed volume, which resulted in higher rebates for seed from suppliers this quarter. The continued sales growth in our proprietary Dyna-Gro branded seed versus national brand sales mix also supported higher average seed margins both in the quarter and on an annual basis. Our proprietary product line of seeds once again demonstrated solid growth in sales and gross profit for both the fourth quarter and the 2013 year, relative to the same periods last year. Proprietary seed accounted for approximately 18 percent of our total seed sales and approximately 26 percent of our seed gross profit for calendar year 2013.

Sales of merchandise in the fourth quarter of 2013 were $228-million, compared to $132-million in the same period last year. Gross profit for this product line was $30-million this quarter, compared to $21-million reported in the fourth quarter of 2012. The increase is related to incremental earnings from Viterra and additional sales volumes of animal health and other livestock-related products in Australia.

Services and other sales were $216-million this quarter, compared to the $151-million reported in the fourth quarter of 2012. Gross profit was $113-million in the fourth quarter of 2013, compared to $87-million for the same period last year. The increases in the current quarter relate to incremental gross profit from the purchased Viterra locations and increased Australian livestock sales commissions.

Selling expenses as a percentage of sales was 24 percent in the fourth quarter of 2013 which is up marginally from the 22 percent reported in the same period last year. Retail selling expenses were $504-million for the fourth quarter, compared to $431-million in the same period last year. The majority of the variance was due to increased costs associated with Viterra operating in a traditionally slower sales period than other Retail geographies. On a full-year basis, selling expenses as a percentage of sales remained similar to 2012 at approximately 15 percent.

In the fourth quarter of 2013, we recorded the Viterra acquisition within Retail. This resulted in a $257-million purchase gain, representing the difference between the fair value of acquired net assets and the purchase price. During the quarter, we also recorded goodwill impairment in Retail - Australia of $220-million due to synergy delays and reduced expectations for sales, gross margins and long-term growth.

Wholesale

Wholesale's 2013 fourth quarter sales were $963-million, down $310-million from the same quarter last year. Gross profit was $170-million this quarter, compared to $453-million in the fourth quarter of 2012. Wholesale reported EBITDA of $210-million in the fourth quarter of 2013, down from the $495-million reported in the same period last year. Wholesale's Adjusted EBITDA² was $234-million this quarter, compared to $516-million reported in the same period last year. Wholesale's results this quarter were principally impacted by significantly lower global crop nutrient prices.

² Adjusted EBITDA is defined as earnings (loss) before finance costs, income taxes, depreciation and amortization and before finance costs, income taxes, depreciation and amortization of joint ventures.

Nitrogen gross profit in the fourth quarter of 2013 was $129-million, compared to $293-million in the same quarter last year. Nitrogen sales volumes were 907,000 tonnes in the fourth quarter of 2013, down 59,000 tonnes from the same period last year. The lower sales volumes were primarily due to reduced product availability resulting from plant outages in the fourth quarter, accompanied by a shorter fall application season in the U.S. Realized sales prices for all nitrogen products were lower than the fourth quarter of 2012, with urea realized sales prices down 27 percent, or $148 per tonne year-over-year. Nitrogen cost of product sold was $314 per tonne this quarter, compared to $257 per tonne reported in the fourth quarter of 2012. The increase was due to higher North American gas prices and costs associated with outages at our Carseland and Redwater nitrogen facilities in the quarter. These outages lowered production by approximately 130,000 tonnes of nitrogen products and impacted per tonne costs, as fixed costs were spread across lower sales volumes. Our average nitrogen gross margins were $144 per tonne this quarter, compared to $304 per tonne in the same period last year.

Agrium's average natural gas cost included in cost of product sold was $3.51/MMBtu this quarter ($3.39/MMBtu including the impact of realized gains on natural gas derivatives), compared to $3.26/MMBtu for the same period in 2012 ($3.35/MMBtu including the impact of realized losses on natural gas derivatives). Hedging gains or losses are included in other expenses and not cost of product sold, thus are not part of the calculation of gross profit. The U.S. benchmark (NYMEX) natural gas price for the fourth quarter of 2013 was $3.63/MMBtu, compared to $3.36/MMBtu in the same quarter last year. The AECO (Alberta) basis differential was a $0.62/MMBtu discount to NYMEX in the fourth quarter of 2013, an increase from the $0.28/MMBtu discount in the fourth quarter of 2012.

Potash gross profit for the fourth quarter of 2013 was $39-million, compared to $79-million reported in the same quarter last year. The year-over-year decline was principally due to lower realized international and North American sales prices. Prices came under pressure due to weaker demand from India, delayed negotiations for second half Chinese supply contracts and uncertainty created by the breakup of the Belarusian Potash Company. International sales volumes were 89,000 tonnes this quarter, in line with 86,000 tonnes reported in the fourth quarter of last year. North American sales volumes this quarter were 255,000 tonnes, also consistent with the volumes achieved for the same period last year. Potash cost of product sold was $201 per tonne this quarter, compared to $216 per tonne reported in the fourth quarter of 2012. The decrease was due to a higher proportion of sales shipped directly to end customers compared to last year, which lowered the average freight cost. Gross margin was $112 per tonne in the fourth quarter of 2013, compared to the $233 per tonne in the same quarter of 2012. In the second half of 2014, Agrium will take an extended 14 week turnaround at our Vanscoy potash mine to tie in the one million tonne expansion project.

Phosphate gross profit was a loss of $4-million in the fourth quarter of 2013, compared to a $47-million profit in the same quarter last year. The decrease was primarily a result of lower realized sales prices derived from weak international market conditions in the fourth quarter. Phosphate sales volumes this quarter were 285,000 tonnes, slightly higher than the 279,000 tonnes sold in the fourth quarter of 2012. Realized phosphate sales prices were $560 per tonne this quarter, a $162 per tonne decrease from the same quarter last year. Phosphate cost of product sold was $576 per tonne in the fourth quarter of 2013, a $20 per tonne increase from the same period last year. The increase was due to higher costs at both of our phosphate facilities, partially due to higher ammonia costs resulting from higher natural gas costs. The increase in costs at the Redwater facility was largely due to higher rock input costs associated with the transition to imported rock, after economic reserves of this input from our Kapuskasing, Ontario mine were depleted in the second quarter of 2013. Gross margin was a loss of $16 per tonne in the fourth quarter of 2013, compared to a positive margin of $166 per tonne in the same period in 2012.

Gross profit from ammonium sulfate and other products was $12-million this quarter, a reduction of $14-million from the same period last year. This was due to lower realized sales prices and lower customer sales resulting from limited customer storage available this quarter. Product purchased for resale gross profit was a loss of $6-million this quarter, compared to a profit of $8-million in the fourth quarter of 2012 as a result of lower North American demand and lower global sales prices for nutrients.

Advanced Technologies

After conducting a strategic review of AAT in 2013, a decision was made in December 2013 to transition the Agriculture business of AAT back into our Wholesale business unit. The Agriculture business includes Environmentally Smart Nitrogen ("ESN") and Micronutrient products. Management has commenced with a divestment process for the Turf and Ornamental and Direct Solutions businesses. These businesses have been reported within discontinued operations. As a result, in 2013 we moved to two core strategic business units, Retail and Wholesale. The results reported for AAT in this press release represent only the Agriculture business that will be reported within Wholesale in the 2014 results; consequently these results are not directly comparable to years prior to 2012 as restated in this press release.

AAT reported a quarterly gross profit of $2-million in the fourth quarter of 2013, a decrease of $21-million from the $23-million reported in the same period last year. EBITDA was $3-million in the fourth quarter, a $15-million decrease from the same period last year. The lower year-over-year results were primarily due to lower than forecasted sales resulting from the later than expected fall application window and weak urea markets that impacted ESN margins.

Other

EBITDA for our Other non-operating business unit for the fourth quarter of 2013 was a loss of $94-million, compared to a loss of $2-million for the fourth quarter of 2012. The unfavorable change was primarily driven by:

• A $46-million unfavorable change in share-based payments, where there was a $28-million expense in the fourth quarter of 2013 compared to an $18-million recovery in the fourth quarter of 2012. This was largely caused by an appreciation of our share price during the fourth quarter of 2013 compared to a depreciation of our share price during the fourth quarter of 2012;
• A $7-million increase in gross profit elimination for the three months ended December 31, 2013 compared to the three months ended December 31, 2012 which reflected more inter-segment inventory held in our Retail business unit not yet sold to external customers;
• A $6-million unfavorable change on foreign exchange losses; and
• $6-million in Viterra acquisition costs.

OUTSTANDING SHARE DATA

The number of Agrium's outstanding shares at January 31, 2014 was approximately 144 million. At January 31, 2014, the number of shares issuable pursuant to stock options outstanding (issuable assuming full exercise, where each option granted can be exercised for one common share) was approximately nil.

The agricultural products business is seasonal in nature. Consequently, comparisons made on a year-over-year basis are more appropriate than quarter-over-quarter comparisons. Crop input sales are primarily concentrated in the spring and fall crop input application seasons, which are in the second quarter and fourth quarter. Crop nutrient inventories are normally accumulated leading up to each application season. Our cash collections generally occur after the application season is complete.

BUSINESS ACQUISITION

We completed the acquisition of 100 percent of certain Retail Canadian and Australian agri-products assets of Viterra from Glencore International plc ("Glencore") on October 1, 2013. The acquired assets form part of our Retail business unit and include over 200 farm centers in Canada as well as distribution assets in Australia. Benefits of the acquisition include expansion of geographical coverage for the sale of crop inputs in Canada and Australia, acquisition of a significant customer base and talented workforce and synergies between Agrium and Viterra, including cost savings opportunities. We have recorded a purchase gain of $257-million representing the difference between the fair value of acquired net assets and the purchase price.

DISCONTINUED OPERATIONS

Following the settlement of litigation in December 2013, we received $75-million in the fourth quarter of 2013 for an insurance claim relating to a division of AWB Limited ("AWB"), that we acquired in 2010 and sold in 2011. We had not previously accrued a receivable for this claim because of the uncertainty of the outcome of the litigation. We incurred an additional $22-million of legal fees and additional settlements related to the sold division of AWB.

In December 2013, Agrium's Board of Directors approved the transition of parts of the AAT business unit, consisting of our ESN and Micronutrients operations to our Wholesale business unit. Management has commenced with a divestment process for components of the AAT business unit that we did not transition to Wholesale. We consider that a sale by December 2014 is highly probable. We have classified assets of the operations not transferred to Wholesale as held for sale, and have classified related results of operations as discontinued. Additionally, we recorded the assets held for sale at fair value less costs to sell which resulted in a $60-million post-tax write-down within discontinued operations primarily related to goodwill.

NORMAL COURSE ISSUER BID

On May 14, 2013, the Toronto Stock Exchange ("TSX") accepted Agrium's notice of intention to make a normal course issuer bid ("NCIB") whereby Agrium may purchase up to 7,472,587 common shares on the TSX and New York Stock Exchange during the period from May 21, 2013 to May 20, 2014 with a daily purchase limit of 133,301 common shares on the TSX. During the period from May 21, 2013 to December 31, 2013, we purchased approximately 5.8 million shares at an average share price of $86 for total consideration of approximately $498-million under our NCIB.

ADDITIONAL IFRS AND NON-IFRS FINANCIAL MEASURES

Certain financial measures in this press release are not prescribed by IFRS. We consider these financial measures discussed herein to provide useful information to both management and investors in measuring our financial performance and financial condition.

In general, an additional IFRS financial measure is a measure relevant to understanding a company's financial performance that is not a minimum measure mandated by IFRS. A non-IFRS financial measure generally either excludes or includes amounts that are not excluded or included in the most directly comparable measure calculated and presented in accordance with IFRS. Refer to the following tables for further discussion of how they are calculated and their usefulness to users including management. Non-IFRS financial measures are not recognized measures under IFRS and our method of calculation may not be directly comparable to that of other companies. These non-IFRS measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with IFRS.

The following table outlines our additional IFRS financial measures, their definitions and how management assesses each measure. As the measures set out below are presented in our consolidated financial statements included in this press release, they are classified as additional IFRS financial measures where they reflect consolidated Agrium, and are classified as non-IFRS financial measures where they do not reflect consolidated Agrium, including references to EBITDA when presented on an operating segment basis.

OUTLOOK, KEY RISKS AND UNCERTAINTIES

Global grain and oilseed producers experienced an outstanding year of productivity in 2013. According to the United States Department of Agriculture ("USDA"), global grain and oilseed acreage and yields set new records, combining for record production. In the U.S., corn production set a new record and in Western Canada, wheat and canola production set new records and overall crop production was 27 percent above the previous record set in 2008. Record crop production was the result of favorable weather combined with strong market incentives to increase production.

Record crop production has resulted in significantly lower prices for most crops; however, prices remain high relative to other periods with record production. The combination of current crop prices and record U.S. net farm income in 2013 provide a strong incentive to plant historically high acreage again in 2014. Lower and more stable crop prices have resulted in robust grain demand growth, with the USDA projecting that global grain demand growth will be over 4 percent in 2013/14, which would be the highest annual growth since 1978/79 and over 1.5 percentage points above any year in the past decade, which was a period of very strong demand growth.

At current crop prices, North American spring crop area in 2014 is expected to be near 2013 levels, which is expected to support crop input demand and growers continuing to seek the top seed genetics available. Analysts expect that corn acreage will decline, but that the decline will mostly be offset by increased area of soybeans in the U.S. and canola in Western Canada. Crop nutrient shipments are expected to be strong in the first half of 2014, in part due to a shorter fall application season in 2013 due to weather.

The global urea market started to strengthen in early 2014, driven by strong demand in markets such as North America and Europe and supply constraints from some major export regions. Analysts project that a large volume of urea will need to be imported between now and the beginning of the application season due to the delayed demand at the beginning of the 2013/14 fertilizer year. U.S. offshore urea import levels in the first half of 2014 will likely need to meet or exceed record levels achieved in 2013. The relatively poor fall ammonia season is expected to result in increased demand for urea and UAN applications through the spring season. Stronger global urea prices may result in additional Chinese urea exports in the first half of 2014 due to the change in their export tariff this year but there has been limited response in terms of additional exports so far this year. North American nitrogen demand is projected to decline about 2 percent to 4 percent in 2013/14 due primarily to reduced corn acreage, while global nitrogen demand is projected to increase by 1.5 percent to 2 percent in 2014 from 2013 levels.

The global potash market was characterized by significant supply and demand uncertainty in 2013, but enters 2014 with more clarity and stability. The Chinese supply agreements with major suppliers reached in January 2014 has provided additional certainty to the market and pent up demand by other importing regions is expected to result in improved global import demand in the first half of 2014. Brazil imported record potash volumes of over 8 million tonnes in 2013 and import demand from Brazil is expected to remain strong in 2014. North American potash demand is projected to be relatively flat, to down 2 percent, from 2012/13 levels in 2013/14. We expect global potash shipments to increase from 54 million tonnes in 2013 to between 56 million and 58 million tonnes in 2014.

Phosphate prices have increased significantly since the end of November 2013, driven by strong demand, particularly in North and South America. The impact of stronger global demand has been amplified by turnarounds and unplanned shut-downs by some major producers. Global phosphate production costs have increased as global sulfur prices have more than doubled, driven by strong Chinese demand. Indian DAP imports are expected to improve in 2014 from depressed 2013 levels, but the timing and scale of imports continues to be a source of uncertainty to the phosphate market. North American phosphate demand in 2013/14 is projected to be flat to down 2 percent from 2012/13 levels, while global demand in 2014 is projected to increase by 2 to 4 percent from 2013 levels.

Forward-Looking Statements

Certain statements and other information included in this press release constitute "forward-looking information" within the meaning of applicable Canadian securities legislation or constitute "forward-looking statements" within the meaning of applicable U.S. securities legislation (collectively, the "forward-looking statements"). All statements in this press release other than those relating to historical information or current conditions, are forward-looking statements, including, but not limited to, statements as to management's expectations with respect to: future crop and crop input volumes, demand, margins, prices and sales; business and financial prospects; dividends and other plans, strategies, objectives and expectations, including with respect to future operations of Agrium and proposed acquisitions and divestitures and the growth and stability of our earnings. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from such forward-looking statements.

All of the forward-looking statements are qualified by the assumptions that are stated or inherent in such forward-looking statements, including the assumptions referred to below in this press release. Although Agrium believes that these assumptions are reasonable, this list is not exhaustive of the factors that may affect any of the forward-looking statements and the reader should not place an undue reliance on these assumptions and such forward-looking statements. The key assumptions that have been made in connection with the forward-looking statements include Agrium's ability to successfully integrate and realize the anticipated benefits of its already completed and future acquisitions, including the recently completed acquisition of certain Retail Agri-products assets of Viterra.

Events or circumstances that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to: general economic, market and business conditions, weather conditions including impacts from regional flooding and/or drought conditions; crop prices; the supply and demand and price levels for our major products; governmental and regulatory requirements and actions by governmental authorities, including changes in government policy, government ownership requirements, changes in environmental, tax and other laws or regulations and the interpretation thereof, and political risks, including civil unrest, actions by armed groups or conflict, as well as counterparty and sovereign risk; and other risk factors detailed from time to time in Agrium reports filed with the Canadian securities regulators and the Securities and Exchange Commission in the United States. There is a risk that the Egyptian Misr Fertilizer Production Company nitrogen facility in Egypt may not be allowed to proceed with the completion of the two new facilities. Additionally, there are risks associated with Agrium's acquisition of AWB, including litigation risk resulting from AWB having been named in litigation commenced by the Iraqi Government relating to the United Nations Oil-For-Food Programme. There are risks associated with our acquisition of certain Retail Agri-products assets of Viterra, including: timing and costs of the associated integration of the retained Viterra Retail Agri-products assets, the size and timing of expected synergies could be less favorable than anticipated; disruption from the acquisition making it more difficult to maintain relationships with customers, employees and suppliers; our efforts to integrate Viterra's Retail Agri-products assets into our existing business could result in the disruption of our ongoing business and other risk factors detailed from time to time in Agrium reports filed with the Canadian securities regulators and the Securities and Exchange Commission in the United States. Furthermore, the potential divestiture of the Turf and Ornamental and Direct Solutions businesses and any potential financial gains or losses resulting from the completion of the strategic review process may differ materially from those in the forward-looking statements.

Agrium disclaims any intention or obligation to update or revise any forward-looking statements in this press release as a result of new information or future events, except as may be required under applicable U.S. federal securities laws or applicable Canadian securities legislation.

OTHER

Agrium Inc. is a major Retail supplier of agricultural products and services in North America, South America and Australia and a leading global Wholesale producer and marketer of all three major agricultural nutrients and the premier supplier of specialty fertilizers in North America. Agrium's strategy is to provide the crop inputs and services needed to feed a growing world. We focus on maximizing shareholder returns by driving continuous improvements to our base businesses, pursuing value-added growth opportunities across the crop input value chain and returning capital to shareholders.

A WEBSITE SIMULCAST of the 2013 4^th Quarter Conference Call will be available in a listen-only mode beginning Friday, February 21^st, 2014 at 7:30 a.m. MST (9:30 a.m. EST). Please visit the following website: www.agrium.com.