dollarsaveraging C$1

dollars,averaging C$1.28 to U.S.$1.00; – The guidance does not reflect the potential completion of a CF deal inthe second quarter of 2009;- Urea sales prices to Argentine growers approximating import pricesrather than a government capped price;- Stock based compensation expense reflecting Agrium’s stock price at theclose of business on May 4, 2009 (U.S.$46.96) and a $1 change in stockprice equating to approximately a $0.01 change in earnings per share; and,- The exclusion of mark-to-market gains or losses on non-qualifyingcommodity hedge positions settling in future periods. 2009 First Quarter Operating ResultsNET EARNINGSAgrium’s first quarter consolidated net loss was $60-million, or $0.38diluted loss per share, compared to net earnings of $195-million, or$1.23 diluted earnings per share, for the same quarter of 2008. Netearnings before interest expense and income taxes (“EBIT”) was a loss of$56-million for the first quarter of 2009 compared with EBIT of$305-million for the first quarter of 2008. The decrease in EBIT wasprimarily due to lower gross profit from reduced potash sales volumes andlower selling prices for most products, as well as certain items notedbelow. A reconciliation of EBIT to net earnings is provided in thesection “Non-GAAP Measures”.Consolidated gross profit in the first quarter of 2009 was $273-millioncompared to $392-million in the first quarter of 2008. Contributions fromthe UAP business, partially offset by higher cost of inventory purchasedwhen fertilizer prices were higher, resulted in a $27-million increase ingross profit in our Retail business unit.

Wholesale gross profitdecreased by $156-million primarily due to the large decline in potashsales volumes, lower prices for nitrogen, phosphate and product purchasedfor resale. Quarter-over-quarter gross profit for Advanced Technologiesdecreased $7-million due largely to volume decline in turf and ornamentalproducts. Expenses have increased $242-million quarter-over-quarter, primarilyreflecting a combination of the following items:- $99-million increase in Retail’s selling expense resulting in sellingexpense of $198-million primarily due to the UAP business; and- $136-million increase in loss on derivative contracts primarily relatedto gas and power, resulting in $69-million hedging loss.The effective tax rate was 31 percent for the first quarter of 2009,compared to 33 percent for the same quarter of 2008.BUSINESS SEGMENT PEFORMANCERetailRetail results are not directly comparable to the same period last yeardue to the inclusion of UAP, which was acquired in May of 2008. Retail’s2009 first quarter net sales were just over $1-billion, which was morethan double the $394-million in the first quarter of 2008. Gross profitwas $142-million in the first quarter of 2009, compared to $115-millionfor the same period last year.

While gross profit was $27-million higherthan last year, EBIT was significantly lower due to the higher sellingand general and administrative costs associated with the addition of theUAP business. Retail EBIT was a loss of $94-million in the first quarterof 2009, versus a positive EBIT of $4-million in the first quarter of2008 and a loss of $21-million in the first quarter of 2007. Crop nutrients net sales reached $437-million this quarter, an increaseof $188-million compared to the first quarter of 2008, due to theaddition of UAP business and higher average selling prices. Gross profitwas $18-million this quarter compared to $72-million in the first quarterof 2008.

The decrease was primarily due to lower margins resulting fromthe carryover of higher priced crop nutrient inventories from the fall of2008, which have been sold into a lower price environment this spring.This resulted in crop nutrient margins declining to an unprecedented 4percent in the first quarter of 2009, compared to 29 percent in the firstquarter of 2008. Over the past 10 years, retail crop nutrient margins inthe first quarter have averaged 23 percent and the previous lowest yearwas in 2006 at 21 percent. Crop nutrient margins continue to rise in thesecond quarter of 2009 and are expected to reach normal levels once themajority of the higher priced nutrient inventory position is sold, whichis anticipated by the end of the spring season.(1) Nutrient sales volumesin the first quarter were also impacted by the late start to the springseason and what is expected to be lower demand for potash and phosphatethrough the spring compared to the same period last year. Sales volumesand margins at our South American operations were also significantlylower this quarter than the same period last year due to extremely dryconditions and the added challenge of uncertainty over governmentpolicies. Crop protection net sales increased to $426-million thisquarter, compared to $93-million in the first quarter of 2008. Our grossprofit this quarter reached $77-million, more than double last year’s$29-million. The strength of earnings from this product line illustratesthe benefits of the diversity in our Retail business.

Most of theincrease in sales and gross profits was due to the addition of UAP’ssignificant crop protection business, including a broad range of privatelabel products. Crop protection product margins as a percentage of netsales were 18 percent for the first quarter of 2009 versus 31 percent forthe first quarter of 2008. The lower margin was primarily due to theinclusion of UAP’s substantial wholesale crop protection business, whichhas a significantly lower percentage margin than the retail portion ofthe business. Last year’s figure also benefited from inventoryappreciation for glyphosate products which is not expected to occur in2009. (1) See disclosure in the section “Outlook, Key Risks and Uncertainties”in our 2009 first quarter MD&A and additional assumptions in the section”Management’s Discussion and Analysis”.Net sales for seed, services and other increased to $188-million thisquarter from $52-million in the first quarter of 2008. Gross profit was$47-million in the first quarter of 2009, compared to $14-million for thesame period last year and slightly ahead of last year after accountingfor the addition of UAP’s business.