Agrium Announces Best Third Quarter Earnings in Over Five Years.Business Editors CALGARY Calgary (kăl`gərē), city (1991 pop. 710,677), S Alta., Canada, at the confluence of the Bow and Elbow rivers. The largest city in Alberta and the fastest-growing major city in Canada, Calgary is a corporate, transportation, and financial , Alberta--(BUSINESS WIRE)--Oct. 29, 2003 All Amounts Are Stated in U.S.$ Agrium Agrium Inc. NYSE: AGU TSX: AGU engages in the production, marketing, and distribution of agricultural products and services, and nutrients for agricultural and industrial markets in the United States and Argentina. Inc. (NYSE NYSE See: New York Stock Exchange : AGU AGU Aoyama Gakuin University, Tokyo, Japan AGU American Geophysical Union AGU Arabian Gulf University (Bahrain) AGU All Grown Up (TV show) AGU Aguascalientes, Aguascalientes, Mexico )(TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension : AGU) and announced today that its net earnings for the third quarter ended September September: see month. 30, 2003, were $25-million ($0.18 basic earnings per share). This is the highest third quarter earnings figure in more than five years, and well above the market consensus estimate of $0.09 per share. Year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. earnings were $88-million ($0.64 basic earnings per share), which is the highest in four years. "These strong quarterly results are a reflection of the improvement in the global nitrogen nitrogen (nī`trəjən), gaseous chemical element; symbol N; at. no. 7; at. wt. 14.0067; m.p. −209.86°C;; b.p. −195.8°C;; density 1.25 grams per liter at STP; valence principally −3, +3, or +5. cycle and continued growth in earnings for the retail division," said Mike Wilson Mike Wilson could refer to the following people:
named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. nitrogen operating rates Operating rate The percentage of total production capacity of a company, industry, or country that is being used. operating rate The portion of capacity at which a business operates. over the past four months." For the fourth quarter of 2003, Agrium anticipates the trend in year-over-year earnings improvement to continue. Agrium is comfortable with the current market consensus of $0.19 per share for the fourth quarter of 2003, which is $0.37 basic earnings per share for the second half of 2003. KEY DEVELOPMENTS -- North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. Retail achieved record performance for the third quarter and first nine months of the year. Earnings before interest expense and income taxes (EBIT EBIT See: Earnings Before Interest and Taxes EBIT See earnings before interest and taxes (EBIT). ) was $22-million for the quarter, as compared to $17-million during the same quarter in 2002. -- North America Wholesale EBIT for the third quarter of 2003 was $26-million, up significantly from a loss of $5-million from the third quarter of 2002. -- South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. Wholesale had its strongest third quarter earnings since the Profertil facility began operation in 2001. EBIT for South America Wholesale was $21-million for the third quarter of 2003, up 110 percent over the same period in 2002. -- The Kenai Kenai may refer to:
the third quarter. While the facility is currently running at 65-70 percent rates, it is possible that natural gas supply will be reduced in the November November: see month. to March period. We continue to advance our legal and arbitration arbitration Process of resolving a dispute or a grievance outside a court system by presenting it for decision to an impartial third party. Both sides in the dispute usually must agree in advance to the choice of arbitrator and certify that they will abide by the process and expect arbitration with Unocal to commence in May 2004. KEY INDICATORS The following table summarizes certain key commodity prices affecting the Corporation's profitability:
First
Third Quarter Nine Months
2003 2002 2003 2002
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Grain Prices (U.S.$/bushel)
Wheat (#2 Soft Red St. L -
weekly averages) $ 3.45 $ 3.46 $ 3.35 $ 3.08
Corn (#2 Yellow -
weekly averages) $ 2.24 $ 2.43 $ 2.32 $ 2.11
Soybean (#1 Yellow -
weekly averages) $ 5.95 $ 5.59 $ 5.91 $ 4.91
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Natural Gas (U.S.$/MMBtu)
NYMEX (last three day
average price) $ 5.10 $ 3.26 $ 5.73 $ 3.00
Agrium (average cost) $ 3.18 $ 2.26 $ 3.43 $ 2.40
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Nitrogen - Ammonia
(U.S.$/metric tonne)
Black sea $ 180 $ 97 $ 166 $ 91
Agrium N.A.
(average realized price) $ 256 $ 171 $ 277 $ 180
Agrium International
(average realized price) $ 186 $ 105 $ 166 $ 96
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Nitrogen - Urea
(U.S.$/metric tonne)
NOLA $ 187 $ 136 $ 184 $ 122
Black sea (prilled) $ 144 $ 96 $ 133 $ 94
Agrium N.A.
(average realized price) $ 203 $ 142 $ 215 $ 140
Agrium International
(average realized price) $ 169 $ 121 $ 154 $ 113
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Prices for corn and wheat wheat, cereal plant of the genus Triticum of the family Gramineae (grass family), a major food and an important commodity on the world grain market. Wheat Varieties and Their Uses remain above five-year averages. Soybean soybean, soya bean, or soy pea, leguminous plant (Glycine max, G. soja, or Soja max) of the family Leguminosae (pulse family), native to tropical and warm temperate regions of Asia, where it has been and canola canola see brassicanapus. prices peaked in October October: see month. , at or near five-year highs. NYMEX See New York Mercantile Exchange. NYMEX See New York Mercantile Exchange (NYM). natural gas prices have been well above last year's level. However, the tightening nitrogen supply/demand fundamentals have allowed for an expansion in our margins to more normal levels. MANAGEMENT'S DISCUSSION AND ANALYSIS Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial CONSOLIDATED con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: RESULTS Net earnings for the third quarter of 2003 were $25-million compared to $1-million for the same quarter 2002. Basic earnings per share for the quarter were $0.18 ($0.17 diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of ) compared to a basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. loss of $0.01 per share for the third quarter of 2002. Agrium's consolidated earnings before interest expense and income taxes (EBIT) increased by $35-million to $54-million for the third quarter of 2003. This increase in earnings is largely attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to improved nitrogen profitability in Agrium's Wholesale operations as a result of higher global nitrogen prices. Cash flow from operating activities for the third quarter was $47-million compared to $28-million in 2002, primarily due to higher cash earnings. The improvement in operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. has resulted in a stronger financial position and improved liquidity for the company. Debt, net of cash balances, declined $168-million from September 30, 2002, to September 30, 2003. Business Unit Discussion North America Wholesale -- Wholesale 2003 third quarter gross profit was up $21-million from the third quarter in 2002 as Agrium's average realized selling price for nitrogen increased 44 percent over the same period in 2002. This increase is primarily due to the tight global nitrogen supply situation. North America Retail -- EBIT for the third quarter was up $5-million compared to the same period in 2002. This is largely due to higher fertilizer fertilizer, organic or inorganic material containing one or more of the nutrients—mainly nitrogen, phosphorus, and potassium, and other essential elements required for plant growth. selling prices and increased chemical sales volumes compared to prior year. South America Wholesale -- Wholesale EBIT for the third quarter increased by $11-million over the third quarter in the previous year. This is due to higher international nitrogen prices, a higher proportion of sales in the domestic market, and higher production rates. South America Retail -- EBIT for Retail declined from $5-million in the third quarter of 2002 to $1-million in the third quarter of 2003. The high earnings in the third quarter of 2002 were a result of the benefits from inventory management in relation to the devaluation devaluation, decreasing the value of one nation's currency relative to gold or the currencies of other nations. It is usually undertaken as a means of correcting a deficit in the balance of payments. of the Argentine peso The peso (originally established as the nuevo peso argentino or peso convertible) is the currency of Argentina. Its ISO 4217 code is ARS, and the symbol used locally for it is $ (to avoid confusion, Argentines frequently use US$, . OUTLOOK As Agrium looks toward the fourth quarter of 2003, there are a number of factors that may positively impact fourth quarter results: -- The global nitrogen supply/demand balance remains tight, despite restart To resume computer operation after a planned or unplanned termination. See boot, warm boot and checkpoint/restart. of some U.S. capacity over the past four months. -- Through the end of August 2003, China's net urea exports were over 600,000 tonnes. However, export availability is expected to decline in the fourth quarter and into next spring. This is due to increased domestic demand, lower government export incentives and higher transportation rates. -- Strong grain prices coupled with higher yields are expected to lead to an improved U.S. farm income and increase cash available to purchase crop nutrients in the coming growing season. In Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of , canola prices are expected to remain strong. Canola uses a higher nutrient nutrient /nu·tri·ent/ (noo´tre-int) 1. nourishing; providing nutrition. 2. a food or other substance that provides energy or building material for the survival and growth of a living organism. application rate than other competing crops. -- After several years of drought drought, abnormally long period of insufficient rainfall. Drought cannot be defined in terms of inches of rainfall or number of days without rain, since it is determined by such variable factors as the distribution in time and area of precipitation during and before in many of Agrium's key markets, crop yields are closer to average this season. Farmers in Western Canada
Western Canada, commonly referred to as the West in particular are likely to be looking to maximize In a graphical environment, to enlarge a window to the full size of the screen. See Win Maximize windows. yields in the next growing season growing season, period during which plant growth takes place. In temperate climates the growing season is limited by seasonal changes in temperature and is defined as the period between the last killing frost of spring and the first killing frost of autumn, at which , as grain inventories remain well below average. -- The global grain stocks are very low going into the end of 2003 and are below 2002 record low levels due to reduced production across Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). and the Former Soviet Union. This isanticipated to lead to stronger global grain prices, which supports higher fertilizer use. -- Anticipated price improvements for potash potash: see potassium carbonate. potash Name used for various inorganic compounds of potassium, chiefly the carbonate (K2CO3), a white crystalline material formerly obtained from wood ashes. should largely offset the negative impact of a rising Canadian dollar Noun 1. Canadian dollar - the basic unit of money in Canada; "the Canadian dollar has the image of loon on one side of the coin" loonie dollar - the basic monetary unit in many countries; equal to 100 cents and higher ocean freight rates Noun 1. freight rate - the charge for transporting something by common carrier; "we pay the freight"; "the freight rate is usually cheaper" freightage, freight . Offsetting these positive indicators are some factors that may adversely impact fourth quarter results: -- Poor U.S. soybean yields resulted in a significant increase in soybean prices, this may result in some limited switching toward soybeans away from wheat and corn next spring. Soybeans use less nitrogen fertilizer than either wheat or corn. -- As we announced in June June: see month. 2003, Unocal at that time had indicated natural gas supply to Agrium's Kenai, Alaska This article is about a city in Alaska. For the character from Disney's Brother Bear, see Kenai (Brother Bear). Kenai is a city in Kenai Peninsula Borough in the U.S. state of Alaska. facility could be reduced to a level which would result in Agrium running only one of its two ammonia ammonia, chemical compound, NH3, colorless gas that is about one half as dense as air at ordinary temperatures and pressures. It has a characteristic pungent, penetrating odor. and one of its two urea plants at Agrium's Kenai facility. While Unocal has supplied the Kenai facility with more natural gas than it originally indicated, it is possible that Unocal will reduce the gas supply in the future. If Agrium is economically ec·o·nom·i·cal adj. 1. Prudent and thrifty in management; not wasteful or extravagant. See Synonyms at sparing. 2. Intended to save money, as by efficient operation or elimination of unnecessary features; economic: unable to offset such a reduction from other sources, the carrying value of the Kenai facility may be adjusted. The financial effect of this is not yet determinable Liable to come to an end upon the happening of a certain contingency. Susceptible of being determined, found out, definitely decided upon, or settled. determinable adj. . -- The stronger Canadian dollar will negatively impact fourth quarter results on a year-over-year basis, as it will increase our Canadian-based labour-costs. -- The ban on Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. beef by key trading partners as a result of Bovine Spongiform Encephalopathy bovine spongiform encephalopathy: see prion. (Mad Cow Disease mad cow disease: see prion. mad cow disease or bovine spongiform encephalopathy (BSE) Fatal neurodegenerative disease of cattle. Symptoms include behavioral changes (e.g. ) has been partially lifted. However, the ban on live cattle cattle, name for the ruminant mammals of the genus Bos, and particularly those of the domesticated species, Bos taurus and B. indica. The term oxen, broadly used, refers also to closely related animals, such as the buffalo and the bison. shipments to the U.S. is still having a negative impact on the Canadian cattle industry. This will negatively impact farm incomes and may have an effect on fertilizer sales this fall to mixed grain/livestock farmers in Canada. -- Global phosphate phosphate, salt or ester of phosphoric acid, H3PO4. Because phosphoric acid is tribasic (having three replaceable hydrogen atoms), it forms monophosphate, diphosphate, and triphosphate salts in which one, two, or three of the hydrogens of the markets remain weak, due to a combination of higher ammonia and sulphur Sulphur, city, United States Sulphur, city (1990 pop. 20,125), Calcasieu parish, SW La.; inc. 1914. It is a trade center for an area producing natural gas, oil, and timber as well as sorghum, soybeans, cattle, and crawfish. input costs, and weak import demand by key Asian markets. Phosphate margins are likely to remain under pressure for most U.S. producers during the fourth quarter. Agrium's low-cost sulphur position and firm demand outlook in Western Canada and the Pacific Northwest For names and places containing the slightly longer word 'northwestern' (or variants), see . Northwest or north west is the ordinal direction halfway between north and west on a compass. It is the opposite of southeast. should minimize In a graphical environment, to hide an application that is currently displayed on screen. For example, in Windows and Mac, the application's window is removed from the screen and represented by an icon on the Windows Taskbar. In the Mac, the icon is placed in the Dock. See Win Minimize windows. the impact on its phosphate returns. OTHER Agrium Inc. is a leading global producer and marketer of agricultural nutrients and industrial products and a major retail supplier of agricultural products and services in both North America and Argentina Argentina (ärjəntē`nə, Span. ärhāntē`nä), officially Argentine Republic, republic (2005 est. pop. 39,538,000), 1,072,157 sq mi (2,776,889 sq km), S South America. . Agrium produces and markets three primary groups of nutrients: nitrogen, phosphate and potash as well as micronutrients This is a list of micronutrients. Vitamins
Incremental cost is additional or increased cost of an item or service apart from its actual cost. expansion of its existing operations and acquisitions as well as the development, commercialization and marketing of new products and international opportunities. Certain statements in this press release constitute forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . Such forward-looking statements involve known and unknown risks and uncertainties, including those referred to in the Corporation's annual report to shareholders for 2002, which may cause the actual results, performance or achievements of the Corporation to be materially different from any future results, performance or achievements expressed or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. by such forward-looking statements. A number of factors could cause actual results to differ materially from those in the forward-looking statements, including, but not limited to, weather conditions, the future supply, demand, price level and volatility Volatility 1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the of natural gas, future prices of nitrogen, phosphate and potash, the differential pricing of natural gas in various markets, the outcome of the dispute between the Corporation and Unocal, the future gas prices and availability at Kenai, the exchange rates for US, Canadian and Argentine Argentine having some relationship with the country Argentina. Argentine tick margaropuswinthemi. Argentine tortoise geochelonechilensis. currencies, the outcome of the Argentine gas price negotiations, Argentine domestic fertilizer consumption, future fertilizer inventory levels, future nitrogen, potassium potassium (pətăs`ēəm), a metallic chemical element; symbol K [Lat. kalium=alkali]; at. no. 19; at. wt. 39.0983; m.p. 63.25°C;; b.p. 760°C;; sp. gr. .862 at 20°C;; valence +1. and phosphate consumption in North America, future crop prices, future levels of nitrogen imports into North America and future additional fertilizer capacity and operating rates. A WEBSITE SIMULCAST Simulcast is a portmanteau of "simultaneous broadcast", and refers to programs or events broadcast across more than one medium, or more than one service on the same medium, at the same time. of the 2003 3rd Quarter Conference Call will be available in a listen-only mode beginning Thursday Thursday: see week. , October 30 at 8:30 a.m. MST See micro systems technology. (10:30 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy ). Please visit the following website: www.agrium.com
AGRIUM INC.
Consolidated Statements of Operations and Retained Earnings
(Millions of U.S. dollars, except per share amounts)
(Unaudited)
Three months Nine months
ended ended
September 30, September 30,
---------------------------------
2003 2002 2003 2002
---------------------------------
Sales $ 592 $ 494 $ 1,953 $ 1,660
Direct freight 31 28 91 85
---------------------------------
Net sales 561 466 1,862 1,575
Cost of product 389 333 1,327 1,199
---------------------------------
Gross profit 172 133 535 376
---------------------------------
Expenses
Selling, general and
administrative 71 64 204 184
Depreciation, depletion and
amortization 34 42 101 108
Royalties and other taxes 4 5 13 13
Other expenses and Argentine
charges 9 3 28 34
---------------------------------
118 114 346 339
---------------------------------
Earnings before interest expense
and income taxes 54 19 189 37
Interest on long-term debt 15 16 44 46
Other interest - 1 4 4
---------------------------------
Earnings (loss) before income
taxes 39 2 141 (13)
---------------------------------
Current income tax (recovery) 6 1 35 (4)
Future income tax 8 - 18 3
---------------------------------
Income taxes (recovery) 14 1 53 (1)
---------------------------------
Net earnings (loss) 25 1 88 (12)
Retained earnings - beginning of
period 242 220 191 245
Change in accounting policy
(note 5) - (29) - (29)
Common share dividends declared - - (7) (7)
Preferred securities charges
(net of tax) (3) (3) (8) (8)
---------------------------------
Retained earnings - end of
period $ 264 $ 189 $ 264 $ 189
---------------------------------
---------------------------------
Earnings (loss) per share
- Basic $ 0.18 ($0.01) $ 0.64 ($0.16)
- Diluted $ 0.17 ($0.01) $ 0.60 ($0.16)
AGRIUM INC.
Consolidated Statements of Cash Flows
(Millions of U.S. dollars)
(Unaudited)
Three months Nine months
ended ended
September 30, September 30,
-------------------------------
2003 2002 2003 2002
-------------------------------
Operating:
Net earnings (loss) for the
period $ 25 $ 1 $ 88 $ (12)
Depreciation, depletion and
amortization 34 42 101 108
Future income tax 8 - 18 3
Foreign exchange and Argentine
charges 9 (3) 1 6
Net changes in non-cash working
capital (29) (12) (89) -
-------------------------------
Cash provided by operating
activities 47 28 119 105
-------------------------------
Investing:
Capital assets (36) (14) (67) (24)
Decrease (increase) in other
assets (2) 3 (2) 11
Proceeds from disposal of assets
and investments - 7 11 8
Other 20 (24) 27 (11)
-------------------------------
Cash used in investing
activities (18) (28) (31) (16)
-------------------------------
Financing:
Common shares issued 1 - 1 107
Bank indebtedness (repayment) - 11 (1) (190)
Long-term debt repayment (1) (10) (4) (14)
Common share dividends paid (7) (7) (14) (14)
Preferred securities charges paid (3) (5) (8) (8)
-------------------------------
Cash used in financing
activities (10) (11) (26) (119)
-------------------------------
Increase (decrease) in cash and
cash-equivalents 19 (11) 62 (30)
Cash and cash-equivalents -
beginning of period 152 32 109 51
-------------------------------
Cash and cash-equivalents - end
of period $ 171 $ 21 $ 171 $ 21
-------------------------------
-------------------------------
AGRIUM INC.
Consolidated Balance Sheets
(Millions of U.S. dollars)
As at As at
September 30, December 31,
------------------------------
2003 2002 2002
------------------------------
(Unaudited)
ASSETS
Current assets
Cash and cash-equivalents $ 171 $ 21 $ 109
Accounts receivable 271 216 187
Inventories 385 336 353
Prepaid expenses 41 30 35
------------------------------
868 603 684
Capital assets 1,454 1,406 1,400
Other assets 85 93 85
------------------------------
$ 2,407 $ 2,102 $ 2,169
------------------------------
------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Bank indebtedness $ - $ 21 $ 1
Accounts payable and accrued
liabilities 371 270 340
Income and other taxes payable 12 5 -
Current portion of long-term debt 104 7 25
------------------------------
487 303 366
Long-term debt
Recourse debt 532 620 604
Non-recourse financing
- Profertil 125 131 132
Other liabilities 154 142 140
Future income taxes 192 147 163
------------------------------
1,490 1,343 1,405
Shareholders' equity
Share capital
Authorized: unlimited common
shares and preferred securities
Issued:
Common shares: 2003 - 126
million (2002 -126 million) 485 484 484
Preferred securities:
8% Non-convertible 2003
- 7 million (2002 -7 million) 172 171 171
6% Convertible 2003 - 2 million
(2002 - 2 million) 50 50 50
Retained earnings 264 189 191
Cumulative translation adjustment (54) (135) (132)
------------------------------
917 759 764
------------------------------
$ 2,407 $ 2,102 $ 2,169
------------------------------
------------------------------
AGRIUM INC.
Summarized Notes to the Consolidated Financial Statements
For the nine months ended September 30, 2003
(Millions of U.S. dollars, except per share amounts)
(Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES The Corporation's accounting policies are in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with accounting principles generally accepted in Canada and are consistent with those outlined in the annual audited financial statements except where stated below. These interim consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge do not include all disclosures normally provided in annual financial statements and should be read in conjunction conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with the Corporation's audited consolidated financial statements for the year ended December December: see month. 31, 2002. In management's opinion, the interim consolidated financial statements include all adjustments necessary to present fairly such information. Certain comparative figures have been reclassified to conform to Verb 1. conform to - satisfy a condition or restriction; "Does this paper meet the requirements for the degree?" fit, meet coordinate - be co-ordinated; "These activities coordinate well" the current year's presentation. The interim consolidated financial statements include the accounts of Agrium Inc. and its subsidiaries. 2. STOCK BASED COMPENSATION Had the Corporation expensed the fair value of stock based compensation to net earnings (loss), the following is pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma net earnings (loss), basic earnings (loss) per share, and diluted earnings (loss) per share amounts for each period.
Three months ended
September 30,
--------------------------------------------------
2003 2002
--------------------------------------------------
As Reported Pro forma As Reported Pro forma
--------------------------------------------------
Net earnings (loss) $ 25 $ 23 $ 1 $ -
Earnings (loss) per
share
Basic $ 0.18 $ 0.16 $ (0.01) $ (0.02)
Diluted $ 0.17 $ 0.16 $ (0.01) $ (0.02)
Nine months ended
September 30,
--------------------------------------------------
2003 2002
--------------------------------------------------
As Reported Pro forma As Reported Pro forma
--------------------------------------------------
Net earnings (loss) $ 88 $ 84 $ (12) $ (17)
Earnings (loss) per
share
Basic $ 0.64 $ 0.60 $ (0.16) $ (0.20)
Diluted $ 0.60 $ 0.57 $ (0.16) $ (0.20)
3. EARNINGS (LOSS) PER SHARE
The following table summarizes the computation of net earnings (loss)
per share:
Three months Nine months
ended ended
September 30, September 30,
---------------------------------
2003 2002 2003 2002
---------------------------------
Numerator:
Net earnings (loss) $ 25 $ 1 $ 88 $ (12)
Preferred securities charges
(net of tax) (3) (3) (8) (8)
---------------------------------
Numerator for basic earnings
(loss) per share 22 (2) 80 (20)
---------------------------------
Preferred securities charges
(net of tax) 3 3 8 8
---------------------------------
Numerator for diluted earnings
(loss) per share $ 25 $ 1 $ 88 $ (12)
---------------------------------
---------------------------------
Denominator:
Weighted average denominator
for basic earnings per share 126 126 126 122
---------------------------------
---------------------------------
Dilutive instruments:
Stock options using the
treasury stock method 1 - 1 -
Preferred securities converted
to common shares
$175-million, eight percent 15 - 16 -
$50-million, six percent (a) 4 - 4 -
---------------------------------
Denominator for diluted
earnings per share 146 126 147 122
---------------------------------
---------------------------------
Basic earnings (loss) per
share $ 0.18 $ (0.01) $ 0.64 $ (0.16)
Diluted earnings (loss) per
share $ 0.17 $ (0.01) $ 0.60 $ (0.16)
(a) The Corporation may redeem the debentures at a redemption price
equal to 103 percent of the principal amount provided that the
price exceeds U.S. $14.3612 per common share for a specified
period of time. At any time, holders of the debentures have the
right to convert the principal amount thereof into common shares
at a conversion price of U.S. $11.9677 per common share.
There were 126 million common shares outstanding at September 30, 2003 and 2002. As at September 30, 2003, the Corporation has outstanding approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. ten million options to acquire common shares. 4. SEASONALITY The fertilizer business is seasonal in nature. Sales are concentrated in the spring and fall planting seasons while produced inventories are accumulated ac·cu·mu·late v. ac·cu·mu·lat·ed, ac·cu·mu·lat·ing, ac·cu·mu·lates v.tr. To gather or pile up; amass. See Synonyms at gather. v.intr. To mount up; increase. throughout the year. Cash collections generally occur after the planting seasons in North America and after harvest (tool, networking) Harvest - A highly scalable, customisable system for discovering resources on the Internet. Version: 1.3. http://tardis.ed.ac.uk/harvest/. in South America. 5. CHANGE IN ACCOUNTING POLICY In the third quarter of 2002, under the provisions of a new accounting standard for goodwill, the Corporation completed the transitional impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. test for goodwill. The results of the test indicated that goodwill of the Corporation's phosphate business, which is included in the reportable segment entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: "North America Wholesale", was impaired See assistive technology. . The amount of the impairment represented the entire goodwill balance of $45-million or $29-million net of tax. The resulting impairment loss was recognized as a change in accounting policy and charged to retained earnings Retained Earnings The percentage of net earnings not paid out in dividends, but retained by the company to be reinvested in its core business or to pay debt. It is recorded under shareholders equity on the balance sheet. . 6. SEGMENTED INFORMATION The Corporation's primary activity is the production and wholesale marketing of nitrogen, potash and phosphate and the retail sales of fertilizers, chemicals and other agricultural inputs and services. The Corporation operates principally in Canada, the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and Argentina. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight between segments are accounted for at prices which approximate ap·prox·i·mate v. To bring together, as cut edges of tissue. adj. 1. Relating to the contact surfaces, either proximal or distal, of two adjacent teeth; proximate. 2. Close together. fair market value and are eliminated on consolidation. The reportable segment entitled "Other" includes Corporate functions and inter-segment eliminations. 7. SUBSEQUENT EVENT On October 8, 2003, Agrium announced that its subsidiary, Nu-West Industries Inc. signed a Memorandum of Understanding A Memorandum of Understanding (MoU) is a legal document describing a bilateral or multilateral agreement between parties. It expresses a convergence of will between the parties, indicating an intended common line of action and may not imply a legal commitment. with Astaris Production LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control ("Astaris") to acquire ownership of certain Astaris assets and liabilities related to Astaris' decision to cease production of purified phosphoric acid phosphoric acid, any one of three chemical compounds made up of phosphorus, oxygen, and hydrogen (see acids and bases). The most common, orthophosphoric acid, H3PO4, is usually simply called phosphoric acid. at Agrium's Conda, Idaho Idaho (ī`dəhō), one of the Rocky Mt. states in the NW United States. It is bordered by Montana and Wyoming (E), Utah and Nevada (S), Oregon and Washington (W), and the Canadian province of British Columbia (N). phosphate operation. The financial impact of this transaction will not be reflected in these financial statements until the formal agreement is executed executed 1) adj. to have been completed. (Example: "it is an executed contract") 2) v. to have completed or fully performed. (Example: "he executed all the promises made in the contract") 3) v. , which is anticipated to occur in the fourth quarter of 2003. The financial impact of this transaction is not expected to be material.
AGRIUM INC.
Segmented Earnings Before Interest Expense and Income Taxes
(Millions of U.S. dollars)
(Unaudited)
Three months ended September 30,
-----------------------------------------------
2003
-----------------------------------------------
North America South America
Wholesale Retail Wholesale Retail Other Total
-----------------------------------------------
Net sales
- external customers $ 281 $ 214 $ 33 $ 33 $ - $ 561
- internal customers 22 - 5 - (27) -
-----------------------------------------------
Total net sales 303 214 38 33 (27) 561
Cost of product 239 138 11 27 (26) 389
-----------------------------------------------
Gross profit 64 76 27 6 (1) 172
Gross profit % 21% 36% 71% 18% 4% 31%
Expenses:
Selling, general and
administrative 7 52 1 4 7 71
Depreciation,
depletion
and amortization 24 4 4 - 2 34
Royalties and
other taxes 3 1 - - - 4
Other (income)
expenses and
Argentine charges 4 (3) 1 1 6 9
-----------------------------------------------
38 54 6 5 15 118
-----------------------------------------------
Earnings (loss) before
interest expense and
income taxes $ 26 $ 22 $ 21 $ 1 $ (16) $ 54
-----------------------------------------------
-----------------------------------------------
Three months ended September 30,
-----------------------------------------------
2002
-----------------------------------------------
North America South America
Wholesale Retail Wholesale Retail Other Total
-----------------------------------------------
Net sales
- external customers $ 228 $ 188 $ 20 $ 30 $ - $ 466
- internal customers 15 - 1 - (16) -
-----------------------------------------------
Total net sales 243 188 21 30 (16) 466
Cost of product 200 121 8 20 (16) 333
-----------------------------------------------
Gross profit 43 67 13 10 - 133
Gross profit % 18% 36% 62% 33% 0% 29%
Expenses:
Selling, general and
administrative 8 47 1 4 4 64
Depreciation,
depletion and
amortization 31 5 5 - 1 42
Royalties and
other taxes 4 1 - - - 5
Other (income)
expenses and
Argentine charges 5 (3) (3) 1 3 3
-----------------------------------------------
48 50 3 5 8 114
-----------------------------------------------
Earnings (loss) before
interest expense and
income taxes $ (5) $ 17 $ 10 $ 5 $ (8)$ 19
-----------------------------------------------
-----------------------------------------------
Nine months ended September 30,
-----------------------------------------------
2003
-----------------------------------------------
North America South America
Wholesale Retail Wholesale Retail Other Total
-----------------------------------------------
Net sales
- external customers $ 975 $ 747 $ 77 $ 63 $ - $1,862
- internal customers 59 - 8 - (67) -
-----------------------------------------------
Total net sales 1,034 747 85 63 (67) 1,862
Cost of product 785 530 25 52 (65) 1,327
-----------------------------------------------
Gross profit 249 217 60 11 (2) 535
Gross profit % 24% 29% 71% 17% 3% 29%
Expenses:
Selling, general and
administrative 22 151 3 8 20 204
Depreciation,
depletion and
amortization 70 13 12 1 5 101
Royalties and
other taxes 9 3 - - 1 13
Other (income)
expenses and
Argentine charges 24 (9) (1) (1) 15 28
-----------------------------------------------
125 158 14 8 41 346
-----------------------------------------------
Earnings (loss) before
interest expense and
income taxes $ 124 $ 59 $ 46 $ 3 $ (43) $ 189
-----------------------------------------------
-----------------------------------------------
Nine months ended September 30,
-----------------------------------------------
2002
-----------------------------------------------
North America South America
Wholesale Retail Wholesale Retail Other Total
-----------------------------------------------
Net sales
- external customers $ 798 $ 685 $ 47 $ 45 $ - $1,575
- internal customers 54 - 3 - (57) -
-----------------------------------------------
Total net sales 852 685 50 45 (57) 1,575
Cost of product 723 487 20 26 (57) 1,199
-----------------------------------------------
Gross profit 129 198 30 19 - 376
Gross profit % 15% 29% 60% 42% 0% 24%
Expenses:
Selling, general and
administrative 24 142 3 7 8 184
Depreciation,
depletion and
amortization 73 15 13 1 6 108
Royalties and
other taxes 9 3 - - 1 13
Other (income)
expenses and
Argentine charges 22 (7) 16 (8) 11 34
-----------------------------------------------
128 153 32 - 26 339
-----------------------------------------------
Earnings (loss) before
interest expense and
income taxes $ 1 $ 45 $ (2) $ 19 $ (26) $ 37
-----------------------------------------------
-----------------------------------------------
AGRIUM INC.
Net Sales and Gross Profit by Operating Unit and Product Line
(Millions of U.S. dollars, unless otherwise noted)
(Unaudited)
Three months ended September 30,
-------------------------------------------
2003
-------------------------------------------
Tonnes (000's)
-------------
Margin
Net Cost of Gross Inven- ($/
Sales Product Profit Sales tory Tonne)
-------------------------------------------
North America Wholesale
Nitrogen
Ammonia $ 59 $ 48 $ 11 253 325 $ 43
Urea 97 78 19 528 132 36
Nitrate and other 35 28 7 207 142 34
-------------------------------------------
Total Nitrogen 191 154 37 988 599 37
Phosphate - Dry 49 43 6 235 65 26
Phosphate - Liquid 13 11 2 41 3 49
Potash 38 23 15 406 164 37
Sulphate and other
products 12 8 4 69 129 58
-------------------------------------------
303 239 64 1,739 960 37
--------------------
North America Retail
Fertilizers 73 51 22
Chemicals 112 79 33
Other products and
services 29 8 21
---------------------
214 138 76
South America Wholesale
Nitrogen 36 10 26 196 43 133
Other products and
services 2 1 1
---------------------
38 11 27
South America Retail
Fertilizers 23 21 2
Other products and
services 10 6 4
---------------------
33 27 6
Other (27) (26) (1)
---------------------
Total $ 561 $ 389 $ 172
---------------------
---------------------
Three months ended September 30,
-------------------------------------------
2002
-------------------------------------------
Tonnes (000's)
-------------
Margin
Net Cost of Gross Inven- ($/
Sales Product Profit Sales tory Tonne)
-------------------------------------------
North America Wholesale
Nitrogen
Ammonia $ 46 $ 41 $ 5 318 341 $ 16
Urea 73 62 11 559 161 20
Nitrate and other 26 26 - 203 174 -
-------------------------------------------
Total Nitrogen 145 129 16 1,080 676 15
Phosphate - Dry 47 38 9 243 63 37
Phosphate - Liquid 11 10 1 37 11 27
Potash 33 18 15 339 156 44
Sulphate and other
products 7 5 2 60 123 33
-------------------------------------------
243 200 43 1,759 1,029 24
--------------------
North America Retail
Fertilizers 61 43 18
Chemicals 100 71 29
Other products and
services 27 7 20
---------------------
188 121 67
South America Wholesale
Nitrogen 19 8 11 155 20 71
Other products and
services 2 - 2
---------------------
21 8 13
South America Retail
Fertilizers 21 13 8
Other products and
services 9 7 2
---------------------
30 20 10
Other (16) (16) -
---------------------
Total $ 466 $ 333 $ 133
---------------------
---------------------
Nine months ended September 30,
-------------------------------------------
2003
-------------------------------------------
Tonnes (000's)
-------------
Margin
Net Cost of Gross Inven- ($/
Sales Product Profit Sales tory Tonne)
-------------------------------------------
North America Wholesale
Nitrogen
Ammonia $ 253 $ 193 $ 60 1,070 325 $ 56
Urea 300 232 68 1,597 132 43
Nitrate and other 127 102 25 737 142 34
-------------------------------------------
Total Nitrogen 680 527 153 3,404 599 45
Phosphate - Dry 143 121 22 646 65 34
Phosphate - Liquid 43 34 9 131 3 69
Potash 116 72 44 1,226 164 36
Sulphate and other
products 52 31 21 285 129 74
-------------------------------------------
1,034 785 249 5,692 960 44
-------------------
North America Retail
Fertilizers 305 217 88
Chemicals 343 262 81
Other products and
services 99 51 48
---------------------
747 530 217
South America Wholesale
Nitrogen 81 23 58 480 43 121
Other products and
services 4 2 2
---------------------
85 25 60
South America Retail
Fertilizers 45 40 5
Other products and
services 18 12 6
---------------------
63 52 11
Other (67) (65) (2)
---------------------
Total $1,862 $1,327 $ 535
---------------------
---------------------
Nine months ended September 30,
-------------------------------------------
2002
-------------------------------------------
Tonnes (000's)
-------------
Margin
Net Cost of Gross Inven- ($/
Sales Product Profit Sales tory Tonne)
-------------------------------------------
North America Wholesale
Nitrogen
Ammonia $ 165 $ 152 $ 13 1,109 341 $ 12
Urea 231 209 22 1,813 161 12
Nitrate and other 111 110 1 883 174 12
-------------------------------------------
Total Nitrogen 507 471 36 3,805 676 9
Phosphate - Dry 142 123 19 742 63 26
Phosphate - Liquid 36 30 6 107 11 56
Potash 120 69 51 1,229 156 41
Sulphate and other
products 47 30 17 299 123 57
-------------------------------------------
852 723 129 6,182 1,029 21
-------------------
North America Retail
Fertilizers 278 199 79
Chemicals 309 237 72
Other products and
services 98 51 47
---------------------
685 487 198
South America Wholesale
Nitrogen 46 19 27 419 20 65
Other products and
services 4 1 3
---------------------
50 20 30
South America Retail
Fertilizers 32 17 15
Other products and
services 13 9 4
---------------------
45 26 19
Other (57) (57) -
---------------------
Total $1,575 $1,199 $ 376
---------------------
---------------------
AGRIUM INC.
Net Sales and Gross Profit by Market Destination
(Millions of U.S. dollars, unless otherwise noted)
(Unaudited)
Three months ended September 30,
---------------------------------------------
2003
---------------------------------------------
Margin
Net Cost of Gross Gross Tonnes ($/
Sales Product Profit Profit % (000's) Tonne)
---------------------------------------------
North America
Nitrogen $ 151 $ 128 $ 23 15% 734 $ 31
Phosphate 62 54 8 13% 276 29
Potash 28 19 9 32% 280 32
Sulphate and other
products 9 4 5 56% 48 104
North America Retail 214 138 76 36% - -
Other (22) (21) (1) 5% - -
---------------------------------------------
442 322 120 27% 1,338 -
International
Nitrogen 76 36 40 53% 450 89
Potash 10 5 5 50% 126 40
Sulphate and other
products 5 3 2 40% 21 95
South America Retail 33 27 6 18% - -
Other (5) (4) (1) 20% - -
---------------------------------------------
119 67 52 44% 597 -
---------------------------------------------
Total $ 561 $ 389 $ 172 31% 1,935 $ -
---------------------------------------------
---------------------------------------------
Three months ended September 30,
---------------------------------------------
2002
---------------------------------------------
Margin
Net Cost of Gross Gross Tonnes ($/
Sales Product Profit Profit % (000's) Tonne)
---------------------------------------------
North America
Nitrogen $ 108 $ 97 $ 11 10% 742 $ 15
Phosphate 58 48 10 17% 280 36
Potash 25 15 10 40% 242 41
Sulphate and other
products 5 3 2 40% 30 -
North America Retail 188 121 67 36% - -
Other (14) (14) - 0% - -
---------------------------------------------
370 270 100 27% 1,294 -
International
Nitrogen 56 40 16 29% 494 $ 32
Potash 8 3 5 63% 97 52
Sulphate and other
products 4 2 2 50% 29 -
South America Retail 30 20 10 33% - -
Other (2) (2) - 0% - -
---------------------------------------------
96 63 33 34% 620 -
---------------------------------------------
Total $ 466 $ 333 $ 133 29% $1,914 $ -
---------------------------------------------
---------------------------------------------
Nine months ended September 30,
---------------------------------------------
2003
---------------------------------------------
Margin
Net Cost of Gross Gross Tonnes ($/
Sales Product Profit Profit % (000's) Tonne)
---------------------------------------------
North America
Nitrogen $ 538 $ 433 $ 105 20% 2,454 $ 43
Phosphate 186 155 31 17% 777 40
Potash 83 56 27 33% 794 34
Sulphate and other
products 46 28 18 39% 224 80
North America Retail 747 530 217 29% - -
Other (59) (59) - 0% - -
---------------------------------------------
1,541 1,143 398 26% 4,249 -
International
Nitrogen 223 116 107 48% 1,430 75
Potash 33 16 17 52% 432 39
Sulphate and other
products 10 7 3 30% 61 49
South America Retail 63 52 11 17% - -
Other (8) (7) (1) 13% - -
---------------------------------------------
321 184 137 43% 1,923 -
---------------------------------------------
Total $1,862 $1,327 $ 535 29% 6,172 $ -
---------------------------------------------
---------------------------------------------
Nine months ended September 30,
---------------------------------------------
2002
---------------------------------------------
Margin
Net Cost of Gross Gross Tonnes ($/
Sales Product Profit Profit % (000's) Tonne)
---------------------------------------------
North America
Nitrogen $ 397 $ 365 $ 32 8% 2,718 $ 12
Phosphate 178 153 25 14% 849 29
Potash 89 56 33 37% 846 39
Sulphate and other
products 41 25 16 39% 234 -
North America Retail 685 487 198 29% - -
Other (54) (54) - 0% - -
---------------------------------------------
1,336 1,032 304 23% 4,647 -
International
Nitrogen 156 125 31 20% 1,507 $ 21
Potash 31 13 18 58% 383 47
Sulphate and other
products 10 6 4 40% 63 63
South America Retail 45 26 19 42% - -
Other (3) (3) - 0% - -
---------------------------------------------
239 167 72 30% 1,953 -
---------------------------------------------
Total $1,575 $1,199 $ 376 24% $6,600 $ -
---------------------------------------------
---------------------------------------------
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