Fourth quarter results reflect strong
fertilizer market fundamentals in North America. Expect increased
fertilizer sales volumes and growth in Retail earnings in 2024.
All amounts are in US dollars except as otherwise noted
Nutrien Ltd. (TSX and NYSE: NTR) announced today its fourth
quarter 2023 results, with net earnings of $176 million ($0.35
diluted net earnings per share). Fourth quarter 2023 adjusted net
earnings per share1 was $0.37 and adjusted EBITDA1 was $1.1
billion.
“We saw a continuation of strong fertilizer market fundamentals
in North America during the fourth quarter driven by improved
affordability, an extended fall application season and low channel
inventories. Utilizing the strengths of our integrated business, we
achieved record fourth-quarter potash deliveries, increased crop
nutrient sales volumes across our global Retail network and
generated strong cash flow from operations,” commented Ken Seitz,
Nutrien’s President and CEO.
“As we look ahead to 2024, we expect to deliver higher
fertilizer sales volumes and Retail earnings, supported by
increased crop input market stability and demand. We continue to
prioritize strategic initiatives that enhance our capability to
serve growers in our core markets, maintain the low-cost position
and reliability of our assets, and position the Company for
growth,” added Mr. Seitz.
Highlights2:
- Generated net earnings of $1.3 billion ($2.53 diluted net
earnings per share) and adjusted EBITDA1 of $6.1 billion ($4.44
adjusted net earnings per share1) in 2023, down from the record
levels achieved in 2022. Adjusted EBITDA declined primarily due to
lower net realized selling prices across all segments and lower
Nutrien Ag Solutions (“Retail”) earnings. Cash provided by
operating activities totaled $5.1 billion in 2023, representing 84
percent of adjusted EBITDA.
- Retail adjusted EBITDA of $1.5 billion in 2023 decreased
primarily due to lower gross margin for both crop nutrients and
crop protection products, as we sold through high-cost inventory.
Crop nutrient sales volumes increased as growers returned to more
normalized application rates to replenish nutrients in the soil. We
continued to grow our proprietary nutritional and biostimulant
sales and margins through differentiated product offerings and
expanded manufacturing capacity.
- Potash full year 2023 adjusted EBITDA declined to $2.4 billion
due to lower net realized selling prices. We delivered record
fourth quarter potash sales volumes driven by strong demand in
North America and increased offshore sales.
- Nitrogen full year 2023 adjusted EBITDA decreased to $1.9
billion due to lower net realized selling prices for all major
nitrogen products, which more than offset lower natural gas costs
and higher sales volumes.
- In the fourth quarter of 2023, we recognized a $76 million
non-cash impairment in our Nitrogen segment relating to our
Trinidad property, plant and equipment due to a new natural gas
contract and the resulting outlook for higher expected natural gas
costs and constrained near-term availability. We expect improved
natural gas availability in Trinidad as the development of
additional gas fields is anticipated to add new supply starting in
2026.
- Returned $2.1 billion to shareholders in 2023 through dividends
and share repurchases. Nutrien’s Board of Directors approved an
increase in the quarterly dividend to $0.54 per share. Nutrien
continues to target a stable and growing dividend with our dividend
per share increasing by 35 percent since the beginning of 2018.
Nutrien’s Board of Directors also approved the purchase of up to 5
percent of Nutrien’s outstanding common shares over a twelve-month
period through a normal course issuer bid (“NCIB”). The NCIB is
subject to acceptance by the Toronto Stock Exchange.
1.
These are non-GAAP financial measures. See the “Non-GAAP Financial
Measures” section for further information.
2.
Our discussion of highlights set out on this page is a comparison
of the results for the twelve months ended December 31, 2023 to the
results for the twelve months ended December 31, 2022, unless
otherwise noted.
Market Outlook and Guidance
Agriculture and Retail
- Global grain stocks-to-use ratios remain historically low going
into the 2024 growing season as tightening supplies of wheat and
rice have offset increased corn supplies in the US and Brazil. We
expect weather and geopolitical issues will continue to impact
grain and oilseed production, exports and inventory levels.
- Crop prices have declined from historically high levels in
2022, but lower crop input prices have resulted in improved demand,
evidenced by the strong North American fall application season in
2023. We expect US corn plantings to range from 91 to 92 million
acres in 2024 and soybean plantings to range from 87 to 88 million
acres.
- In Brazil, dry weather during the summer crop growing season
and lower corn prices could result in lower corn area in 2024.
Brazilian growers are expected to continue to expand soybean
acreage, which we anticipate will support the need for strong
fertilizer imports in the second and third quarters of 2024.
- In Australia, growers have benefited from multiple years of
above-average yields and fundamentals remain supportive entering
2024. Timely precipitation led to higher-than-expected winter crop
production, however if the El Niño weather pattern continues, it
could pose a risk for the 2024 growing season.
Crop Nutrient Markets
- Global potash demand was strong through the second half of
2023, and we estimate full-year shipments were between 67 to 68
million tonnes. The increase was supported by strong consumption
and increased imports in key markets such as North America, China
and Brazil.
- We expect global potash demand will continue to recover towards
trend levels in 2024 with full-year shipments projected between 68
to 71 million tonnes. We anticipate a relatively balanced global
market with incremental supply from producers in Canada, Russia,
Belarus and Laos.
- We are seeing strong potash demand ahead of the North American
spring application season as channel inventories were tight to
start the year. Potash demand in Southeast Asia is expected to
increase significantly in 2024 due to much lower inventory levels
compared to the prior year and favorable economics for key crops
such as oil palm and rice. We expect lower potash imports from
China compared to the record levels in 2023 but for demand to
remain at historically high levels driven by increased
consumption.
- We expect nitrogen supply constraints to persist in 2024,
including limited Russian ammonia exports, reduced European
operating rates and Chinese urea export restrictions. North
American natural gas prices remain highly competitive compared to
Europe and Asia, and we expect Henry Hub natural gas prices to
average approximately $2.50 per MMBtu for the year.
- The US nitrogen supply and demand balance is projected to be
tight ahead of the spring application season, as nitrogen
fertilizer net imports in the first half of the 2023/2024
fertilizer year were down an estimated 55 percent compared to the
three-year average. Global industrial nitrogen demand remains a
risk in 2024 as industrial production, most notably in Europe and
Asia, has yet to rebound to historical levels.
- Phosphate fertilizer markets have remained relatively strong in
the first quarter of 2024, particularly in North America where
channel inventories were low entering the year. We expect Chinese
phosphate exports to be similar to 2023 levels and tight stocks in
India to support demand ahead of their key planting season.
Financial Guidance
We have revised our guidance practice in 2024 to provide forward
looking estimates on those metrics that we believe are of value to
our shareholders and are less impacted by fertilizer commodity
prices. We continue to provide guidance for Retail adjusted EBITDA,
fertilizer sales volumes and other key financial modeling metrics
as well as fertilizer pricing sensitivities.
- Retail adjusted EBITDA guidance of $1.65 to $1.85 billion
assumes increased gross margins in all major product lines compared
to 2023. We anticipate that crop nutrient gross margin will be
supported by higher sales volumes and per-tonne margins, in
particular compared to the compressed levels in the first half of
the prior year. We expect a recovery in Brazilian crop protection
margins in the second half of 2024.
- Potash sales volume guidance of 13.0 to 13.8 million tonnes
assumes demand growth in offshore markets and a return to more
normal Canpotex port operations in 2024. In North America, we
expect increased first quarter sales volumes compared to the prior
year due to strong customer engagement to refill depleted
inventories.
- Nitrogen sales volume guidance of 10.6 to 11.2 million tonnes
assumes higher operating rates at our US and Trinidad plants
compared to 2023. Phosphate sales volume guidance of 2.6 to 2.8
million tonnes assumes improved operating rates compared to the
prior year.
- Total capital expenditures of $2.2 to $2.3 billion are expected
to be below the prior year. This total includes approximately $500
million in investing capital expenditures focused on proprietary
products, network optimization and digital capabilities in Retail,
mine automation projects in Potash, and low-cost brownfield
expansions in Nitrogen.
All guidance numbers, including those noted above are outlined
in the table below. In addition, set forth below are anticipated
fertilizer pricing and natural gas price sensitivities relating to
adjusted EBITDA (consolidated) and adjusted net earnings per
share.
2024 Guidance Ranges 1
as of February 21, 2024
(billions of US dollars, except as
otherwise noted)
Low
High
2023 Actual
Retail adjusted EBITDA
1.65
1.85
1.5
Potash sales volumes (million tonnes)
2
13.0
13.8
13.2
Nitrogen sales volumes (million tonnes)
2
10.6
11.2
10.4
Phosphate sales volumes (million tonnes)
2
2.6
2.8
2.6
Depreciation and amortization
2.2
2.3
2.2
Finance costs
0.75
0.85
0.8
Effective tax rate on adjusted earnings
(%)
24.0
26.0
28.0
Capital expenditures 3
2.2
2.3
2.7
1 See the "Forward-Looking Statements"
section.
2 Manufactured product only.
3 Comprised of sustaining capital
expenditures, investing capital expenditures and mine development
and pre-stripping capital expenditures which are supplementary
financial measures. See the "Other Financial Measures" section.
2024 Annual Sensitivities 1
Effect on
(millions of US dollars, except EPS
amounts)
Adjusted EBITDA
Adjusted EPS 4
$25/tonne change in net realized potash
selling prices
± 270
± 0.40
$25/tonne change in net realized ammonia
selling prices 2
± 40
± 0.05
$25/tonne change in net realized urea and
ESN® selling prices
± 80
± 0.10
$25/tonne change in net realized
solutions, nitrates and sulfates selling prices
± 130
± 0.20
$1/MMBtu change in NYMEX natural gas price
3
± 190
± 0.30
1 See the “Forward-Looking Statements”
section.
2 Includes related impact on natural gas
costs in Trinidad, which is linked to benchmark ammonia
pricing.
3 Nitrogen related impact.
4 Assumes 496 million shares outstanding
for all earnings per share ("EPS") sensitivities.
Consolidated Results
Three Months Ended December
31
Twelve Months Ended December
31
(millions of US dollars, except as
otherwise noted)
2023
2022
% Change
2023
2022
% Change
Sales
5,664
7,533
(25
)
29,056
37,884
(23
)
Freight, transportation and
distribution
260
244
7
974
872
12
Cost of goods sold
3,636
4,383
(17
)
19,608
21,588
(9
)
Gross margin
1,768
2,906
(39
)
8,474
15,424
(45
)
Expenses
1,475
1,247
18
5,729
4,615
24
Net earnings
176
1,118
(84
)
1,282
7,687
(83
)
Adjusted EBITDA 1
1,075
2,095
(49
)
6,058
12,170
(50
)
Diluted net earnings per share
0.35
2.15
(84
)
2.53
14.18
(82
)
Adjusted net earnings per share 1
0.37
2.02
(82
)
4.44
13.19
(66
)
Cash provided by operating activities
4,150
4,736
(12
)
5,066
8,110
(38
)
Cash used in investing activities
(733
)
(1,222
)
(40
)
(2,958
)
(2,901
)
2
Cash used for dividends and share
repurchases 2
(262
)
(1,465
)
(82
)
(2,079
)
(5,551
)
(63
)
1 These are non-GAAP financial measures.
See the "Non-GAAP Financial Measures" section.
2 This is a supplementary financial
measure. See the "Other Financial Measures" section.
Net earnings and adjusted EBITDA decreased in the fourth quarter
and full year of 2023 compared to the same periods in 2022, mainly
due to lower net realized selling prices across all segments and
lower Retail earnings. This was partially offset by decreased cost
of goods sold from lower natural gas and royalty costs, lower
provincial mining taxes, higher sales volumes for Retail crop
nutrients and increased Potash and Nitrogen sales volumes. For the
full year of 2023, we recorded non-cash impairment of assets of
$774 million in aggregate primarily related to Retail – South
America goodwill and Nitrogen and Phosphate property, plant and
equipment, resulting in lower net earnings. For the full year of
2022, we recorded a non-cash impairment reversal of an aggregate of
$780 million related to our Phosphate assets. The decrease in cash
provided by operating activities in the fourth quarter and
full-year 2023 compared to the same periods in 2022 was primarily
due to lower earnings across all segments.
Segment Results
Our discussion of segment results set out on the following pages
is a comparison of the results for the three and twelve months
ended December 31, 2023 to the results for the three and twelve
months ended December 31, 2022, unless otherwise noted.
Nutrien Ag Solutions (“Retail”)
Three Months Ended December
31
(millions of US dollars, except
Dollars
Gross Margin
Gross Margin (%)
as otherwise noted)
2023
2022
% Change
2023
2022
% Change
2023
2022
Sales
Crop nutrients
1,808
2,320
(22
)
346
349
(1
)
19
15
Crop protection products
960
981
(2
)
333
413
(19
)
35
42
Seed
202
251
(20
)
36
46
(22
)
18
18
Merchandise
251
264
(5
)
41
41
‐
16
16
Nutrien Financial
70
62
13
70
62
13
100
100
Services and other
236
237
‐
188
194
(3
)
80
82
Nutrien Financial elimination 1
(25
)
(28
)
(11
)
(25
)
(28
)
(11
)
100
100
3,502
4,087
(14
)
989
1,077
(8
)
28
26
Cost of goods sold
2,513
3,010
(17
)
Gross margin
989
1,077
(8
)
Expenses 2
973
888
10
Earnings before finance costs and taxes
("EBIT")
16
189
(92
)
Depreciation and amortization
201
202
‐
EBITDA
217
391
(45
)
Adjustments 3
12
‐
n/m
Adjusted EBITDA
229
391
(41
)
1 Represents elimination of the interest
and service fees charged by Nutrien Financial to Retail
branches.
2 Includes selling expenses of $841
million (2022 – $836 million).
3 See Note 2 to the unaudited condensed
consolidated financial statements.
Twelve Months Ended December
31
(millions of US dollars, except
Dollars
Gross Margin
Gross Margin (%)
as otherwise noted)
2023
2022
% Change
2023
2022
% Change
2023
2022
Sales
Crop nutrients
8,379
10,060
(17
)
1,378
1,766
(22
)
16
18
Crop protection products
6,750
7,067
(4
)
1,553
1,936
(20
)
23
27
Seed
2,295
2,112
9
427
428
‐
19
20
Merchandise
1,001
1,019
(2
)
172
174
(1
)
17
17
Nutrien Financial
322
267
21
322
267
21
100
100
Services and other
927
966
(4
)
710
749
(5
)
77
78
Nutrien Financial elimination
(132
)
(141
)
(6
)
(132
)
(141
)
(6
)
100
100
19,542
21,350
(8
)
4,430
5,179
(14
)
23
24
Cost of goods sold
15,112
16,171
(7
)
Gross margin
4,430
5,179
(14
)
Expenses 1,2
4,215
3,621
16
EBIT
215
1,558
(86
)
Depreciation and amortization
759
752
1
EBITDA
974
2,310
(58
)
Adjustments 2
485
(17
)
n/m
Adjusted EBITDA
1,459
2,293
(36
)
1 Includes selling expenses of $3,375
million (2022 – $3,392 million).
2 Includes non-cash impairment of assets
of $465 million (2022 – nil). See Notes 2 and 3 to the unaudited
condensed consolidated financial statements.
- Retail adjusted EBITDA decreased in the fourth quarter
of 2023 primarily due to lower gross margin for crop protection
products and higher expenses. For the full year, adjusted EBITDA
was lower mostly due to lower gross margin for both crop nutrients
and crop protection products. Included within expenses for the full
year of 2023, we recognized a $465 million non-cash impairment
primarily related to goodwill of our South American Retail assets.
The impairment was mainly due to the impact of crop input price
volatility, more moderate long-term growth assumptions and higher
interest rates.
- Crop nutrients sales and gross margin decreased in the
fourth quarter and full year of 2023 due to lower selling prices
across all regions compared to the strong comparable periods in
2022. Sales volumes increased for both the fourth quarter and full
year as growers returned to more normalized application rates to
replenish nutrients in the soil. Full year sales and gross margin
of our proprietary nutritional and biostimulant product lines
increased compared to 2022 levels as we continued to expand our
differentiated product offering and manufacturing capacity.
- Crop protection products sales and gross margin were
lower in the fourth quarter and full year of 2023 primarily due to
decreased selling prices compared to the historically strong
comparable periods in 2022. This was partially offset by higher
fourth quarter sales in North America as growers returned to more
normalized buying behaviors. Gross margin in 2023 was also impacted
by the selling through of high-cost inventory, which in the fourth
quarter was primarily related to South America.
- Seed sales and gross margin decreased in the fourth
quarter of 2023 due to lower soybean sales volumes and competitive
market prices in South America. Full-year sales increased primarily
due to increased corn sales in the US, while gross margin saw
little change compared to the prior year.
- Nutrien Financial sales increased in the fourth quarter
and full year of 2023 due to higher utilization of our financing
offerings in the US and Australia compared to the same periods in
2022.
Potash
Three Months Ended December
31
(millions of US dollars, except
Dollars
Tonnes (thousands)
Average per Tonne
as otherwise noted)
2023
2022
% Change
2023
2022
% Change
2023
2022
% Change
Manufactured product
Net sales
North America
372
536
(31
)
1,089
959
14
342
560
(39
)
Offshore
404
841
(52
)
2,214
1,659
33
182
506
(64
)
776
1,377
(44
)
3,303
2,618
26
235
526
(55
)
Cost of goods sold
349
310
13
106
118
(10
)
Gross margin – total
427
1,067
(60
)
129
408
(68
)
Expenses 1
82
198
(59
)
Depreciation and amortization
36
34
6
EBIT
345
869
(60
)
Gross margin excluding depreciation
Depreciation and amortization
118
89
33
and amortization – manufactured 2
165
442
(63
)
EBITDA / Adjusted EBITDA
463
958
(52
)
Potash controllable cash cost of
product manufactured 2
56
65
(14
)
1 Includes provincial mining taxes of $79
million (2022 – $190 million).
2 These are non-GAAP financial measures.
See the "Non-GAAP Financial Measures" section.
Twelve Months Ended December
31
(millions of US dollars, except
Dollars
Tonnes (thousands)
Average per Tonne
as otherwise noted)
2023
2022
% Change
2023
2022
% Change
2023
2022
% Change
Manufactured product
Net sales
North America
1,683
2,485
(32
)
4,843
3,729
30
348
667
(48
)
Offshore
2,076
5,414
(62
)
8,373
8,808
(5
)
248
615
(60
)
3,759
7,899
(52
)
13,216
12,537
5
284
630
(55
)
Cost of goods sold
1,396
1,400
‐
105
112
(6
)
Gross margin – total
2,363
6,499
(64
)
179
518
(65
)
Expenses ¹
422
1,173
(64
)
Depreciation and amortization
35
35
‐
EBIT
1,941
5,326
(64
)
Gross margin excluding depreciation
Depreciation and amortization
463
443
5
and amortization – manufactured
214
553
(61
)
EBITDA / Adjusted EBITDA
2,404
5,769
(58
)
Potash controllable cash cost of
product manufactured
58
58
‐
1 Includes provincial mining taxes of $398
million (2022 – $1,149 million).
- Potash adjusted EBITDA declined in the fourth quarter
and full year of 2023 due to lower net realized selling prices,
which more than offset higher North American sales volumes and
lower provincial mining taxes and royalties. We increased granular
potash production in the fourth quarter to meet customer demand and
reduced our controllable cash cost of product manufactured to $56
per tonne.
- Sales volumes in North America were higher in the fourth
quarter and full year of 2023 due to lower channel inventory and
increased grower demand supported by an extended fall application
window and improved affordability. Offshore sales volumes were
higher in the fourth quarter compared to the same period in the
prior year driven by stronger demand in Brazil and China. Full-year
offshore sales volumes were lower compared to the record levels in
2022 primarily due to logistical challenges at Canpotex’s West
Coast port facilities and reduced shipments to customers in India
and Southeast Asia.
- Net realized selling price decreased in the fourth
quarter and full year of 2023 compared to the historically strong
periods in 2022, due to a decline in benchmark prices and higher
costs related to logistical challenges at Canpotex’s West Coast
port facilities.
- Cost of goods sold per tonne decreased in the fourth
quarter and full year of 2023 mainly due to lower royalties. Fourth
quarter costs were also lower due to the timing of turnaround
activity.
Canpotex Sales by Market
(percentage of sales volumes, except
as
Three Months Ended December
31
Twelve Months Ended December
31
otherwise noted)
2023
2022
Change
2023
2022
Change
Latin America
32
28
4
47
34
13
Other Asian markets 1
28
35
(7
)
28
34
(6
)
Other markets
10
10
‐
11
10
1
China
19
16
3
9
14
(5
)
India
11
11
‐
5
8
(3
)
100
100
100
100
1 All Asian markets except China and
India.
Nitrogen
Three Months Ended December
31
(millions of US dollars, except
Dollars
Tonnes (thousands)
Average per Tonne
as otherwise noted)
2023
2022
% Change
2023
2022
% Change
2023
2022
% Change
Manufactured product
Net sales
Ammonia
271
689
(61
)
651
776
(16
)
416
887
(53
)
Urea and ESN® 1
316
510
(38
)
739
764
(3
)
428
666
(36
)
Solutions, nitrates and sulfates
290
389
(25
)
1,344
1,056
27
215
368
(42
)
877
1,588
(45
)
2,734
2,596
5
321
611
(47
)
Cost of goods sold 1
595
892
(33
)
218
343
(36
)
Gross margin – manufactured
282
696
(59
)
103
268
(62
)
Gross margin – other 1,2
3
3
‐
Depreciation and amortization 1
53
60
(12
)
Gross margin – total
285
699
(59
)
Gross margin excluding depreciation
Expenses 3,4
116
13
792
and amortization – manufactured 5
156
328
(52
)
EBIT
169
686
(75
)
Ammonia controllable cash cost of
Depreciation and amortization
146
155
(6
)
product manufactured 5
59
57
4
EBITDA
315
841
(63
)
Adjustments 4
76
‐
n/m
Adjusted EBITDA
391
841
(54
)
1 Certain immaterial 2022 figures have
been reclassified.
2 Includes other nitrogen and purchased
products and comprises net sales of $79 million (2022 – $204
million) less cost of goods sold of $76 million (2022 – $201
million).
3 Includes (loss) earnings from
equity-accounted investees of $(1) million (2022 – $41
million).
4 Includes a non-cash impairment of assets
of $76 million (2022 – nil). See Notes 2 and 3 to the unaudited
condensed consolidated financial statements.
5 These are non-GAAP financial measures.
See the "Non-GAAP Financial Measures" section.
Twelve Months Ended December
31
(millions of US dollars, except
Dollars
Tonnes (thousands)
Average per Tonne
as otherwise noted)
2023
2022
% Change
2023
2022
% Change
2023
2022
% Change
Manufactured product
Net sales
Ammonia
1,144
2,641
(57
)
2,436
2,715
(10
)
469
973
(52
)
Urea and ESN® 1
1,499
2,134
(30
)
3,125
3,014
4
480
708
(32
)
Solutions, nitrates and sulfates
1,187
1,829
(35
)
4,862
4,551
7
244
402
(39
)
3,830
6,604
(42
)
10,423
10,280
1
367
642
(43
)
Cost of goods sold 1
2,435
3,370
(28
)
233
327
(29
)
Gross margin – manufactured
1,395
3,234
(57
)
134
315
(57
)
Gross margin – other 1,2
(16
)
47
n/m
Depreciation and amortization
55
54
2
Gross margin – total
1,379
3,281
(58
)
Gross margin excluding depreciation
Expenses (income) 3,4
97
(92
)
n/m
and amortization – manufactured
189
369
(49
)
EBIT
1,282
3,373
(62
)
Ammonia controllable cash cost of
Depreciation and amortization
572
558
3
product manufactured
60
59
2
EBITDA
1,854
3,931
(53
)
Adjustments 4
76
‐
n/m
Adjusted EBITDA
1,930
3,931
(51
)
1 Certain immaterial 2022 figures have
been reclassified.
2 Includes other nitrogen and purchased
products and comprises net sales of $377 million (2022 – $929
million) less cost of goods sold of $393 million
(2022 – $882 million).
3 Includes earnings from equity-accounted
investees of $90 million (2022 – $233 million).
4 Includes a non-cash impairment of assets
of $76 million (2022 – nil). See Notes 2 and 3 to the unaudited
condensed consolidated financial statements.
- Nitrogen adjusted EBITDA was lower in the fourth quarter
and full year of 2023 due to lower net realized selling prices for
all major nitrogen products, which more than offset lower natural
gas costs and higher sales volumes. Our fourth quarter ammonia
operating rate increased to 91 percent1 compared to 83 percent in
the same period in 2022 primarily due to improved reliability and
the absence of major weather-related unplanned outages. We
recognized a $76 million non-cash impairment of our Trinidad
property, plant and equipment during the fourth quarter due to a
new natural gas contract and the resulting outlook for higher
expected natural gas costs and constrained near-term availability.
We expect improved natural gas availability in Trinidad as the
development of additional gas fields is anticipated to add new
supply starting in 2026.
- Sales volumes were higher in the fourth quarter and full
year of 2023 primarily due to higher UAN production and sales,
partially offset by lower ammonia availability mainly due to
production outages at our plants in Trinidad.
- Net realized selling price was lower in the fourth
quarter and full year of 2023 for all major nitrogen products
primarily due to weaker benchmark prices resulting from lower
energy prices in key nitrogen producing regions.
- Cost of goods sold per tonne decreased in the fourth
quarter and full year of 2023 due to lower natural gas costs.
Ammonia controllable cash cost of product manufactured per tonne
increased in 2023 mainly due to the impact of lower ammonia
production.
1 Excludes Trinidad and Joffre.
Natural Gas Prices in Cost of Production
Three Months Ended December
31
Twelve Months Ended December
31
(US dollars per MMBtu, except as otherwise
noted)
2023
2022
% Change
2023
2022
% Change
Overall natural gas cost excluding
realized derivative impact
3.35
7.49
(55
)
3.51
7.82
(55
)
Realized derivative impact
(0.05
)
(0.05
)
‐
(0.02
)
(0.05
)
(60
)
Overall natural gas cost
3.30
7.44
(56
)
3.49
7.77
(55
)
Average NYMEX
2.88
6.26
(54
)
2.74
6.64
(59
)
Average AECO
1.94
4.11
(53
)
2.17
4.28
(49
)
- Natural gas prices in our cost of production decreased
in the fourth quarter and full year of 2023 as a result of lower
North American natural gas index prices and decreased natural gas
costs in Trinidad, where our natural gas prices are linked to
ammonia benchmark prices.
Phosphate
Three Months Ended December
31
(millions of US dollars, except
Dollars
Tonnes (thousands)
Average per Tonne
as otherwise noted)
2023
2022
% Change
2023
2022
% Change
2023
2022
% Change
Manufactured product
Net sales
Fertilizer
322
274
18
579
391
48
557
700
(20
)
Industrial and feed
150
155
(3
)
174
140
24
860
1,107
(22
)
472
429
10
753
531
42
627
807
(22
)
Cost of goods sold
402
405
(1
)
535
762
(30
)
Gross margin – manufactured
70
24
192
92
45
104
Gross margin – other 1
‐
(8
)
(100
)
Depreciation and amortization
108
109
(1
)
Gross margin – total
70
16
338
Gross margin excluding depreciation
Expenses
21
46
(54
)
and amortization – manufactured 2
200
154
30
EBIT
49
(30
)
n/m
Depreciation and amortization
81
58
40
EBITDA / Adjusted EBITDA
130
28
364
1 Includes other phosphate and purchased
products and comprises net sales of $61 million (2022 – $72
million) less cost of goods sold of $61 million
(2022 – $80 million).
2 This is a non-GAAP financial measure.
See the "Non-GAAP Financial Measures" section.
Twelve Months Ended December
31
(millions of US dollars, except
Dollars
Tonnes (thousands)
Average per Tonne
as otherwise noted)
2023
2022
% Change
2023
2022
% Change
2023
2022
% Change
Manufactured product
Net sales
Fertilizer
1,085
1,367
(21
)
1,912
1,696
13
568
806
(30
)
Industrial and feed
645
706
(9
)
639
682
(6
)
1,010
1,035
(2
)
1,730
2,073
(17
)
2,551
2,378
7
678
872
(22
)
Cost of goods sold
1,487
1,562
(5
)
583
657
(11
)
Gross margin – manufactured
243
511
(52
)
95
215
(56
)
Gross margin – other 1
(10
)
(18
)
(44
)
Depreciation and amortization
115
79
46
Gross margin – total
233
493
(53
)
Gross margin excluding depreciation
Expenses (income) ²
290
(693
)
n/m
and amortization – manufactured
210
294
(29
)
EBIT
(57
)
1,186
n/m
Depreciation and amortization
294
188
56
EBITDA
237
1,374
(83
)
Adjustments 2
233
(780
)
n/m
Adjusted EBITDA
470
594
(21
)
1 Includes other phosphate and purchased
products and comprises net sales of $263 million (2022 – $304
million) less cost of goods sold of $273 million
(2022 – $322 million).
2 Includes non-cash impairment of assets
of $233 million (2022 - reversal of non-cash impairment of assets
of $780 million). See Notes 2 and 3 to the unaudited condensed
consolidated financial statements.
- Phosphate adjusted EBITDA increased in the fourth
quarter of 2023 primarily due to lower sulfur and ammonia input
costs, partially offset by lower net realized selling prices.
Full-year 2023 adjusted EBITDA was lower compared to the prior year
mainly due to lower net realized selling prices for fertilizer
products, partially offset by lower ammonia and sulfur input costs.
Included in the expenses for the full year of 2023, we recognized a
$233 million non-cash impairment of our White Springs property,
plant and equipment, while we had non-cash impairment reversals of
our Phosphate assets of $780 million for the full year of
2022.
- Sales volumes increased in the fourth quarter and full
year of 2023 mostly due to higher phosphate fertilizer demand, with
the full year being partially offset by lower first-half production
impacting our industrial and feed sales. Production increased in
the fourth quarter and full-year 2023 largely due to improved
reliability at our Aurora plant.
- Net realized selling price decreased in the fourth
quarter and full year of 2023 primarily due to lower fertilizer net
realized selling prices and lower industrial and feed net realized
selling prices which reflect the typical lag in price realizations
relative to spot fertilizer prices.
- Cost of goods sold per tonne decreased in the fourth
quarter and full year of 2023 mainly due to lower ammonia and
sulfur costs, partially offset by higher depreciation from reversal
of non-cash impairment of assets in 2022.
Corporate and Others
(millions of US dollars, except as
otherwise
Three Months Ended December
31
Twelve Months Ended December
31
noted)
2023
2022
% Change
2023
2022
% Change
Selling expense (recovery)
7
5
40
‐
(1
)
n/m
General and administrative expenses
104
99
5
364
326
12
Share-based compensation (recovery)
expense
(7
)
(59
)
(88
)
(14
)
63
n/m
Other expenses
161
67
140
348
227
53
EBIT
(265
)
(112
)
137
(698
)
(615
)
13
Depreciation and amortization
19
16
19
81
71
14
EBITDA
(246
)
(96
)
156
(617
)
(544
)
13
Adjustments 1
129
(84
)
n/m
350
146
140
Adjusted EBITDA
(117
)
(180
)
(35
)
(267
)
(398
)
(33
)
1 See Note 2 to the unaudited condensed
consolidated financial statements.
- General and administrative expenses were higher in the
full year of 2023 primarily due to higher staffing costs and higher
depreciation and amortization expense.
- Share-based compensation was a recovery in the fourth
quarter and full year of 2023 due to a decrease in the fair value
of share-based awards outstanding relative to the comparable
periods in 2022. The fair value takes into consideration several
factors such as our share price movement, our performance relative
to our peer group and return on our invested capital.
- Other expenses were higher in the fourth quarter and
full year of 2023 compared to the same periods in 2022 due to the
following:
- Higher expense for asset retirement obligations and accrued
environmental costs related to our non-operating sites due to
changes in closure cost estimates.
- $92 million loss on Blue Chip Swaps through trade transactions
to remit cash from Argentina in the second quarter of 2023. The
loss is a result of the significant divergence between the Blue
Chip Swap market exchange rate and the official Argentinian Central
Bank rate.
- Higher foreign exchange losses primarily from our Retail –
South America region.
- The above expenses were partially offset by an $80 million gain
recognized in the first quarter of 2023 from amendments due to
design plan changes to our other post-retirement benefit
plans.
Eliminations
- Eliminations are not part of the Corporate and Others segment.
The elimination of gross margin between operating segments was $3
million for the fourth quarter of 2023 compared to a recovery of
$47 million in the same period of 2022. For the full year of 2023,
there was a recovery of $69 million compared to an elimination of
$28 million in the same period in 2022. These variances are due to
the timing of release of intersegment inventories held by our
Retail segment.
Finance Costs, Income Taxes and Other Comprehensive Income
(Loss)
(millions of US dollars, except as
otherwise
Three Months Ended December
31
Twelve Months Ended December
31
noted)
2023
2022
% Change
2023
2022
% Change
Finance costs
213
188
13
793
563
41
Income tax (recovery) expense
(96
)
353
n/m
670
2,559
(74
)
Actual effective tax rate including
discrete items (%)
(120
)
24
n/m
34
25
9
Other comprehensive income (loss)
97
119
(18
)
81
(177
)
n/m
- Finance costs were higher in the fourth quarter and full
year of 2023 compared to the same periods in 2022 primarily due to
higher interest rates and higher average long-term debt
balances.
- Income tax (recovery) expense was lower in the fourth
quarter and full year of 2023 primarily as a result of lower
earnings compared to the same periods in 2022. The full year of
2023 expense and effective tax rate reflect a $134 million income
tax recovery due to changes to our tax declarations in Switzerland
(“Swiss Tax Reform adjustment”) and a $101 million income tax
expense due to a change in recognition of deferred tax assets in
our Retail - South America region. The 2023 effective tax rates
also include the impact of our losses in Retail – South America,
wherein we did not recognize a corresponding deferred tax asset as
it did not meet the accounting criteria for asset recognition.
- Other comprehensive income (loss) was primarily driven
by changes in the currency translation of our Retail foreign
operations primarily due to improvements of Canadian and Australian
currencies relative to the US dollar for the fourth quarter and
full year of 2023. For the fourth quarter and full year of 2023, we
recognized actuarial gains on our defined benefit plans compared to
losses on the comparative periods driven by changes in our
financial and demographic assumptions and performance of our plan
assets.
Forward-Looking Statements
Certain statements and other information included in this
document, including within the “Market Outlook and Guidance”
section, constitute “forward-looking information” or
“forward-looking statements” (collectively, “forward-looking
statements”) under applicable securities laws (such statements are
often accompanied by words such as “anticipate”, “forecast”,
“expect”, “believe”, “may”, “will”, “should”, “estimate”,
“project”, “intend” or other similar words). All statements in this
document, other than those relating to historical information or
current conditions, are forward-looking statements, including, but
not limited to: Nutrien's business strategies, plans, prospects and
opportunities; Nutrien's 2024 full-year guidance, including
expectations regarding Retail adjusted EBITDA, Potash sales
volumes, Nitrogen sales volumes, Phosphate sales volumes,
depreciation and amortization, finance costs, effective tax rate on
adjusted earnings and capital expenditures; our projections to
generate strong cash from operations; expectations regarding our
capital allocation intentions and strategies; our ability to
advance strategic initiatives and high value growth investments,
including expectations regarding our ability to serve growers,
maintain a low-cost position of fertilizer production assets and
increase free cash flow; capital spending expectations for 2024 and
beyond, including spending related to advancement of proprietary
products, network optimization and digital capabilities in Retail,
automation in Potash mining, and brownfield expansions in Nitrogen;
expectations regarding our ability to generate free cash flow and
return capital to our shareholders, including our expectations
regarding stable and growing dividends; expectations regarding
Retail inventory levels in North America; expectations regarding
performance of our operating segments in 2024, including increased
fertilizer sales volumes and growth in Retail earnings; our
operating segment market outlooks and our expectations for market
conditions and fundamentals in 2024 and beyond, and the anticipated
supply and demand for our products and services, expected market,
industry and growing conditions with respect to crop nutrient
application rates, planted acres, grower crop investment, crop mix,
including the need to replenish soil nutrient levels, production
volumes and expenses, shipments, natural gas costs and
availability, consumption, prices, operating rates and the impact
of seasonality, import and export volumes, economic sanctions and
restrictions, operating rates, inventories, crop development and
natural gas curtailments; the expected impacts and timing of new
supply from additional gas fields in Trinidad; the resulting
outlook of higher expected natural gas costs and lower near-term
availability from the new natural gas contract related to our
Trinidad property, plant and equipment in our Nitrogen segment; the
negotiation of sales contracts; timing and impacts of plant
turnarounds; acquisitions and divestitures and the anticipated
benefits thereof; and expectations in connection with our ability
to deliver long-term returns to shareholders. These forward-looking
statements are subject to a number of assumptions, risks and
uncertainties, many of which are beyond our control, which could
cause actual results to differ materially from such forward-looking
statements. As such, undue reliance should not be placed on these
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 and
elsewhere in this document. Although we believe that these
assumptions are reasonable, having regard to our experience and our
perception of historical trends, this list is not exhaustive of the
factors that may affect any of the forward-looking statements and
the reader should not place undue reliance on these assumptions and
such forward-looking statements. Current conditions, economic and
otherwise, render assumptions, although reasonable when made,
subject to greater uncertainty. The additional key assumptions that
have been made include, among other things, assumptions with
respect to: our ability to successfully implement our business
strategies, growth and capital allocation investments and
initiatives that we will conduct our operations and achieve results
of operations as anticipated; our ability to successfully complete,
integrate and realize the anticipated benefits of our already
completed and future acquisitions and divestitures, and that we
will be able to implement our standards, controls, procedures and
policies in respect of any acquired businesses and to realize the
expected synergies on the anticipated timeline or at all; that
future business, regulatory and industry conditions will be within
the parameters expected by us, including with respect to prices,
expenses, margins, demand, supply, product availability, shipments,
consumption, weather conditions, including the current El Niño
weather pattern, supplier agreements, availability, inventory
levels, exports, crop development and cost of labor and interest,
exchange and effective tax rates; assumptions with respect to
global economic conditions and the accuracy of our market outlook
expectations for 2024 and in the future; assumptions related to our
assessment of recoverable amount estimates of our assets, including
in relation to our Retail - South America group of CGUs goodwill
and intangible asset impairment and the impairment of our Nitrogen
and Phosphate property, plant and equipment; assumptions with
respect to the timing and benefits of additional gas fields in
Trinidad; assumptions with respect to our intention to complete
share repurchases under our normal course issuer bid programs,
including Toronto Stock Exchange approval, the funding of such
share repurchases, existing and future market conditions, including
with respect to the price of our common shares, and compliance with
respect to applicable limitations under securities laws and
regulations and stock exchange policies and the ability to fund our
dividends at the current level; our expectations regarding the
impacts, direct and indirect, of certain geopolitical conflicts,
including the war in Eastern Europe and the conflict in the Middle
East on, among other things, global supply and demand, including
for crop nutrients, energy and commodity prices, global interest
rates, supply chains and the global macroeconomic environment,
including inflation; the adequacy of our cash generated from
operations and our ability to access our credit facilities or
capital markets for additional sources of financing; our ability to
identify suitable candidates for acquisitions and divestitures and
negotiate acceptable terms; our ability to maintain investment
grade ratings and achieve our performance targets; and our ability
to successfully negotiate sales and other contracts.
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 global economic, market
and business conditions; failure to achieve expected results of our
business strategy, capital allocation initiatives or results of
operations; failure to complete announced and future acquisitions
or divestitures at all or on the expected terms and within the
expected timeline; seasonality; climate change and weather
conditions, including the current El Niño weather pattern,
including impacts from regional flooding and/or drought conditions;
crop planted acreage, yield and prices; the supply and demand and
price levels for our products; governmental and regulatory
requirements and actions by governmental authorities, including
changes in government policy (including tariffs, trade restrictions
and climate change initiatives), government ownership requirements,
changes in environmental, tax and other laws or regulations and the
interpretation thereof; political risks, including civil unrest,
actions by armed groups or conflict and malicious acts including
terrorism; the occurrence of a major environmental or safety
incident; innovation and cybersecurity risks related to our
systems, including our costs of addressing or mitigating such
risks; counterparty and sovereign risk; delays in completion of
turnarounds at our major facilities or challenges related to our
major facilities that are out of our control; interruptions of or
constraints in availability of key inputs, including natural gas
and sulfur; any significant impairment of the carrying amount of
certain assets; the risk that rising interest rates and/or
deteriorated business operating results may result in the further
impairment of assets or goodwill attributed to certain of our cash
generating units; risks related to reputational loss; certain
complications that may arise in our mining processes; the ability
to attract, engage and retain skilled employees and strikes or
other forms of work stoppages; geopolitical conflicts, including
the war in Eastern Europe and the conflict in the Middle East, and
their potential impact on, among other things, global market
conditions and supply and demand, including for crop nutrients,
energy and commodity prices, interest rates, supply chains and the
global economy generally; our ability to execute on our strategies
related to environmental, social and governance matters, and
achieve related expectations, targets and commitments; and other
risk factors detailed from time to time in Nutrien reports filed
with the Canadian securities regulators and the Securities and
Exchange Commission in the United States.
The purpose of our Retail adjusted EBITDA, sales volumes,
depreciation and amortization, finance costs, effective tax rate on
adjusted earnings and capital expenditures guidance ranges are to
assist readers in understanding our expected and targeted financial
results, and this information may not be appropriate for other
purposes.
The forward-looking statements in this document are made as of
the date hereof and Nutrien disclaims any intention or obligation
to update or revise any forward-looking statements in this document
as a result of new information or future events, except as may be
required under applicable Canadian securities legislation or
applicable US federal securities laws.
Terms and Definitions
For the definitions of certain financial and non-financial terms
used in this document, as well as a list of abbreviated company
names and sources, see the “Terms & Definitions” section of our
2022 Annual Report. All references to per share amounts pertain to
diluted net earnings (loss) per share, “n/m” indicates information
that is not meaningful, and all financial amounts are stated in
millions of US dollars, unless otherwise noted.
About Nutrien
Nutrien is a leading provider of crop inputs and services,
helping to safely and sustainably feed a growing world. We operate
a world-class network of production, distribution and ag retail
facilities that positions us to efficiently serve the needs of
growers. We focus on creating long-term value by prioritizing
investments that strengthen the advantages of our integrated
business and by maintaining access to the resources and the
relationships with stakeholders needed to achieve our goals.
More information about Nutrien can be found at
www.nutrien.com.
Selected financial data for download can be found in our data
tool at www.nutrien.com/investors/interactive-datatool Such data is
not incorporated by reference herein.
Nutrien will host a Conference Call on Thursday, February 22,
2024 at 10:00 a.m. Eastern Time.
Telephone conference dial-in numbers:
- From Canada and the US 1-888-886-7786
- International 1-416-764-8658
- No access code required. Please dial in 15 minutes prior to
ensure you are placed on the call in a timely manner.
Live Audio Webcast: Visit
https://www.nutrien.com/investors/events/2023-q4-earnings-conference-call
Appendix A – Selected Additional Financial Data
Selected Retail Measures
Three Months Ended December
31
Twelve Months Ended December
31
2023
2022
2023
2022
Proprietary products gross margin
(millions of US dollars)
Crop nutrients
44
55
391
370
Crop protection products
27
58
461
675
Seed
(3
)
(7
)
168
166
Merchandise
3
5
11
12
All products
71
111
1,031
1,223
Proprietary products margin as a
percentage of product line margin (%)
Crop nutrients
12
16
28
21
Crop protection products
10
14
30
35
Seed
(9
)
(7
)
39
39
Merchandise
6
11
6
7
All products
8
11
23
24
Crop nutrients sales volumes (tonnes –
thousands)
North America
2,073
1,819
8,985
8,106
International
790
675
3,647
3,407
Total
2,863
2,494
12,632
11,513
Crop nutrients selling price per
tonne
North America
620
942
697
916
International
661
896
581
774
Total
631
930
663
874
Crop nutrients gross margin per
tonne
North America
118
151
127
182
International
127
108
65
86
Total
120
139
109
153
Financial performance measures
2023
2022
Retail adjusted EBITDA margin (%) 1, 2
7
11
Retail adjusted EBITDA per US selling
location (thousands of US dollars) 1, 2, 3
1,394
1,923
Retail adjusted average working capital to
sales (%) 1, 4
19
17
Retail adjusted average working capital to
sales excluding Nutrien Financial (%) 1, 4
1
2
Nutrien Financial adjusted net interest
margin (%) 1, 4
5.2
6.8
Retail cash operating coverage ratio (%)
1, 4
68
55
1 Rolling four quarters ended December 31,
2023 and 2022.
2 These are supplementary financial
measures. See the "Other Financial Measures" section.
3 Excluding acquisitions.
4 These are non-GAAP financial measures.
See the "Non-GAAP Financial Measures" section.
Nutrien Financial
As at December 31,
2023
As at
December
31, 2022
(millions of US dollars)
Current
<31 Days
Past Due
31–90 Days
Past Due
>90 Days
Past Due
Gross Receivables
Allowance 1
Net Receivables
Net Receivables
North America
1,736
327
89
94
2,246
(40
)
2,206
2,007
International
560
56
22
59
697
(10
)
687
662
Nutrien Financial receivables
2,296
383
111
153
2,943
(50
)
2,893
2,669
1 Bad debt expense on the above
receivables for the twelve months ended December 31, 2023 was $35
million (2022 – $10 million) in the Retail segment.
Selected Nitrogen Measures
Three Months Ended December
31
Twelve Months Ended December
31
2023
2022
2023
2022
Sales volumes (tonnes –
thousands)
Fertilizer 1
1,648
1,467
6,067
5,628
Industrial and feed
1,086
1,129
4,356
4,652
Net sales (millions of US
dollars)
Fertilizer 1
533
901
2,450
3,726
Industrial and feed
344
687
1,380
2,878
Net selling price per tonne
Fertilizer 1
323
614
404
662
Industrial and feed
317
608
317
619
1 Certain immaterial 2022 figures have
been reclassified.
Production Measures
Three Months Ended December
31
Twelve Months Ended December
31
2023
2022
2023
2022
Potash production (Product tonnes –
thousands)
3,386
2,941
12,998
13,007
Potash shutdown weeks 1
‐
3
5
18
Ammonia production – total 2
1,362
1,400
5,357
5,759
Ammonia production – adjusted 2, 3
1,022
920
3,902
3,935
Ammonia operating rate (%) 3
91
83
88
90
P2O5 production (P2O5 tonnes –
thousands)
380
288
1,406
1,351
P2O5 operating rate (%)
89
67
83
79
1 Represents weeks of full production
shutdown, including inventory adjustments and unplanned events,
excluding the impact of any periods of reduced operating rates,
planned routine annual maintenance shutdowns and announced
workforce reductions.
2 All figures are provided on a gross
production basis in thousands of product tonnes.
3 Excludes Trinidad and Joffre.
Appendix B – Non-GAAP Financial Measures
We use both International Financial Reporting Standards (“IFRS”)
measures and certain non-GAAP financial measures to assess
performance. Non-GAAP financial measures are financial measures
disclosed by the Company that (a) depict historical or expected
future financial performance, financial position or cash flow of
the Company, (b) with respect to their composition, exclude amounts
that are included in, or include amounts that are excluded from,
the composition of the most directly comparable financial measure
disclosed in the primary financial statements of the Company, (c)
are not disclosed in the financial statements of the Company and
(d) are not a ratio, fraction, percentage or similar
representation. Non-GAAP ratios are financial measures disclosed by
the Company that are in the form of a ratio, fraction, percentage
or similar representation that has a non-GAAP financial measure as
one or more of its components, and that are not disclosed in the
financial statements of the Company.
These non-GAAP financial measures and non-GAAP ratios are not
standardized financial measures under IFRS and, therefore, are
unlikely to be comparable to similar financial measures presented
by other companies. Management believes these non-GAAP financial
measures and non-GAAP ratios provide transparent and useful
supplemental information to help investors evaluate our financial
performance, financial condition and liquidity using the same
measures as management. These non-GAAP financial measures and
non-GAAP ratios should not be considered as a substitute for, or
superior to, measures of financial performance prepared in
accordance with IFRS.
The following section outlines our non-GAAP financial measures
and non-GAAP ratios, their compositions, and why management uses
each measure. It also includes reconciliations to the most directly
comparable IFRS measures. Except as otherwise described herein, our
non-GAAP financial measures and non-GAAP ratios are calculated on a
consistent basis from period to period and are adjusted for
specific items in each period, as applicable. As additional
non-recurring or unusual items arise in the future, we generally
exclude these items in our calculations.
Adjusted EBITDA (Consolidated)
Most directly comparable IFRS financial measure: Net
earnings (loss).
Definition: Adjusted EBITDA is calculated as net earnings
(loss) before finance costs, income taxes, depreciation and
amortization, share-based compensation and certain foreign exchange
gain/loss (net of related derivatives). We also adjust this measure
for the following other income and expenses that are excluded when
management evaluates the performance of our day-to-day operations:
integration and restructuring related costs, impairment or reversal
of impairment of assets, COVID-19 related expenses, gain or loss on
disposal of certain businesses and investments, asset retirement
obligations (“ARO”) and accrued environmental costs (“ERL”) related
to our non-operating sites, and loss on remitting cash from certain
foreign jurisdictions (e.g., Blue Chip Swaps). In 2023, we amended
our calculation of adjusted EBITDA to adjust for the asset
retirement obligations and accrued environmental costs related to
our non-operating sites and the loss on remitting cash from certain
foreign jurisdictions. We do not consider these to be part of our
day-to-day operations. There were no similar income and expense in
the comparative periods.
Why we use the measure and why it is useful to investors:
It is not impacted by long-term investment and financing decisions,
but rather focuses on the performance of our day-to-day operations.
It provides a measure of our ability to service debt and to meet
other payment obligations and as a component of employee
remuneration calculations.
Three Months Ended December
31
Twelve Months Ended December
31
(millions of US dollars)
2023
2022
2023
2022
Net earnings
176
1,118
1,282
7,687
Finance costs
213
188
793
563
Income tax (recovery) expense
(96
)
353
670
2,559
Depreciation and amortization
565
520
2,169
2,012
EBITDA 1
858
2,179
4,914
12,821
Adjustments:
Integration and restructuring related
costs
20
11
49
46
Share-based compensation (recovery)
expense
(7
)
(59
)
(14
)
63
Impairment (reversal of impairment) of
assets
76
‐
774
(780
)
ARO/ERL expense for non-operating
sites
142
‐
152
‐
Foreign exchange (gain) loss, net of
related derivatives
(14
)
(36
)
91
31
Loss on Blue Chip Swaps
‐
‐
92
‐
Gain on disposal of investment
‐
‐
‐
(19
)
COVID-19 related expenses ²
‐
‐
‐
8
Adjusted EBITDA
1,075
2,095
6,058
12,170
1 EBITDA is calculated as net earnings
before finance costs, income taxes, and depreciation and
amortization.
2 COVID-19 related expenses primarily
consist of increased cleaning and sanitization costs, the purchase
of personal protective equipment, discretionary supplemental
employee costs, and costs related to construction delays from
access limitations and other government restrictions.
Adjusted Net Earnings and Adjusted Net Earnings Per
Share
Most directly comparable IFRS financial measure: Net
earnings (loss) and diluted net earnings (loss) per share.
Definition: Adjusted net earnings and related per share
information are calculated as net earnings (loss) before
share-based compensation and certain foreign exchange gain/loss
(net of related derivatives), net of tax. We also adjust this
measure for the following other income and expenses (net of tax)
that are excluded when management evaluates the performance of our
day-to-day operations: certain integration and restructuring
related costs, impairment or reversal of impairment of assets,
COVID-19 related expenses (including those recorded under finance
costs), gain or loss on disposal of certain businesses and
investments, gain or loss on early extinguishment of debt or on
settlement of derivatives due to discontinuance of hedge
accounting, asset retirement obligations and accrued environmental
costs related to our non-operating sites, loss on remitting cash
from certain foreign jurisdictions (e.g., Blue Chip Swaps), change
in recognition of tax losses and deductible temporary differences
related to impairments and certain changes to tax declarations in
Switzerland (“Swiss Tax Reform adjustment") resulting in an income
tax recovery from the recognition of a deferred tax asset. In 2023,
we amended our calculation of adjusted net earnings and adjusted
net earnings per share to adjust for the asset retirement
obligations and accrued environmental costs related to our
non-operating sites, the loss on remitting cash from certain
foreign jurisdictions, the change in recognition of Retail – South
America tax losses and deductible temporary differences and the
Swiss Tax Reform adjustment. We do not consider these to be part of
our day-to-day operations. There were no similar income and expense
in the comparative periods. We generally apply the annual
forecasted effective tax rate to our adjustments during the year,
and at year-end, we apply the actual effective tax rate. Prior to
December 31, 2023, we applied a specific tax rate for material
adjustments. Effective December 31, 2023, we applied a tax rate
specific to each adjustment.
Why we use the measure and why it is useful to investors:
Focuses on the performance of our day-to-day operations and is used
as a component of employee remuneration calculations.
Three Months Ended
December 31, 2023
Twelve Months Ended
December 31, 2023
Per
Per
(millions of US dollars, except as
otherwise
Increases
Diluted
Increases
Diluted
noted)
(Decreases)
Post-Tax
Share
(Decreases)
Post-Tax
Share
Net earnings attributable to equity
holders of Nutrien
172
0.35
1,258
2.53
Adjustments:
Share-based compensation recovery
(7
)
(5
)
(0.01
)
(14
)
(11
)
(0.02
)
Foreign exchange (gain) loss, net of
related derivatives
(14
)
(16
)
(0.03
)
91
83
0.17
Integration and restructuring related
costs
20
16
0.03
49
40
0.08
Impairment of assets
76
49
0.10
774
702
1.42
ARO/ERL expense for non-operating
sites
142
102
0.20
152
110
0.22
Loss on Blue Chip Swaps
‐
‐
‐
92
92
0.18
Swiss Tax Reform adjustment
(134
)
(134
)
(0.27
)
(134
)
(134
)
(0.27
)
Change in recognition of deferred tax
assets
‐
‐
‐
66
66
0.13
Adjusted net earnings
184
0.37
2,206
4.44
Three Months Ended
December 31, 2022
Twelve Months Ended
December 31, 2022
Per
Per
(millions of US dollars, except as
otherwise
Increases
Diluted
Increases
Diluted
noted)
(Decreases)
Post-Tax
Share
(Decreases)
Post-Tax
Share
Net earnings attributable to equity
holders of Nutrien
1,112
2.15
7,660
14.18
Adjustments:
Share-based compensation (recovery)
expense
(59
)
(45
)
(0.09
)
63
47
0.10
Foreign exchange (gain) loss, net of
related derivatives
(36
)
(27
)
(0.05
)
31
23
0.05
Integration and restructuring related
costs
11
8
0.01
46
35
0.06
Reversal of impairment of assets
‐
‐
‐
(780
)
(619
)
(1.15
)
COVID-19 related expenses
‐
‐
‐
8
6
0.01
Gain on disposal of investment
‐
‐
‐
(19
)
(14
)
(0.03
)
Gain on settlement of discontinued hedge
accounting derivative
‐
‐
‐
(18
)
(14
)
(0.03
)
Adjusted net earnings
1,048
2.02
7,124
13.19
Gross Margin Excluding Depreciation and Amortization Per
Tonne – Manufactured
Most directly comparable IFRS financial measure: Gross
margin.
Definition: Gross margin per tonne less depreciation and
amortization per tonne for manufactured products. Reconciliations
are provided in the “Segment Results” section.
Why we use the measure and why it is useful to investors:
Focuses on the performance of our day-to-day operations, which
excludes the effects of items that primarily reflect the impact of
long-term investment and financing decisions.
Potash Controllable Cash Cost of Product Manufactured
(“COPM”) Per Tonne
Most directly comparable IFRS financial measure: Cost of
goods sold (“COGS”) for the Potash segment.
Definition: Total Potash COGS excluding depreciation and
amortization expense included in COPM, royalties, natural gas costs
and carbon taxes, change in inventory, and other adjustments,
divided by potash production tonnes.
Why we use the measure and why it is useful to investors:
To assess operational performance. Potash controllable cash COPM
excludes the effects of production from other periods and the
impacts of our long-term investment decisions, supporting a focus
on the performance of our day-to-day operations. Potash
controllable cash COPM also excludes royalties and natural gas
costs and carbon taxes, which management does not consider
controllable, as they are primarily driven by regulatory and market
conditions.
Three Months Ended December
31
Twelve Months Ended December
31
(millions of US dollars, except as
otherwise noted)
2023
2022
2023
2022
Total COGS – Potash
349
310
1,396
1,400
Change in inventory
7
38
(40
)
58
Other adjustments 1
(7
)
(12
)
(26
)
(41
)
COPM
349
336
1,330
1,417
Depreciation and amortization in COPM
(124
)
(89
)
(427
)
(406
)
Royalties in COPM
(23
)
(40
)
(100
)
(190
)
Natural gas costs and carbon taxes in
COPM
(12
)
(17
)
(46
)
(62
)
Controllable cash COPM
190
190
757
759
Production tonnes (tonnes – thousands)
3,386
2,941
12,998
13,007
Potash controllable cash COPM per
tonne
56
65
58
58
1 Other adjustments include unallocated
production overhead that is recognized as part of cost of goods
sold but is not included in the measurement of inventory and
changes in inventory balances.
Ammonia Controllable Cash COPM Per Tonne
Most directly comparable IFRS financial measure: Total
manufactured COGS for the Nitrogen segment.
Definition: Total Nitrogen COGS excluding depreciation
and amortization expense included in COGS, cash COGS for products
other than ammonia, other adjustments, and natural gas and steam
costs, divided by net ammonia production tonnes.
Why we use the measure and why it is useful to investors:
To assess operational performance. Ammonia controllable cash COPM
excludes the effects of production from other periods, the costs of
natural gas and steam, and long-term investment decisions,
supporting a focus on the performance of our day-to-day
operations.
Three Months Ended December
31
Twelve Months Ended December
31
(millions of US dollars, except as
otherwise noted)
2023
2022
2023
2022
Total Manufactured COGS – Nitrogen 1
595
892
2,435
3,370
Total Other COGS – Nitrogen 1
76
201
393
882
Total COGS – Nitrogen
671
1,093
2,828
4,252
Depreciation and amortization in COGS
(123
)
(131
)
(474
)
(465
)
Cash COGS for products other than
ammonia
(367
)
(648
)
(1,693
)
(2,560
)
Ammonia
Total cash COGS before other
adjustments
181
314
661
1,227
Other adjustments 2
(76
)
(65
)
(222
)
(210
)
Total cash COPM
105
249
439
1,017
Natural gas and steam costs in COPM
(73
)
(212
)
(304
)
(855
)
Controllable cash COPM
32
37
135
162
Production tonnes (net tonnes 3 –
thousands)
564
655
2,276
2,754
Ammonia controllable cash COPM per
tonne
59
57
60
59
1 Certain immaterial 2022 figures have
been reclassified.
2 Other adjustments include unallocated
production overhead that is recognized as part of cost of goods
sold but is not included in the measurement of inventory and
changes in inventory balances.
3 Ammonia tonnes available for sale, as
not upgraded to other nitrogen products.
Retail Adjusted Average Working Capital to Sales and Retail
Adjusted Average Working Capital to Sales Excluding Nutrien
Financial
Definition: Retail adjusted average working capital
divided by Retail adjusted sales for the last four rolling
quarters. We exclude in our calculations the sales and working
capital of certain acquisitions during the first year following the
acquisition. We also look at this metric excluding Nutrien
Financial revenue and working capital.
Why we use the measure and why it is useful to investors:
To evaluate operational efficiency. A lower or higher percentage
represents increased or decreased efficiency, respectively. The
metric excluding Nutrien Financial shows the impact that the
working capital of Nutrien Financial has on the ratio.
Rolling four quarters ended
December 31, 2023
(millions of US dollars, except as
otherwise noted)
Q1 2023
Q2 2023
Q3 2023
Q4 2023
Average/Total
Current assets
13,000
11,983
10,398
10,498
Current liabilities
(8,980
)
(8,246
)
(5,228
)
(8,210
)
Working capital
4,020
3,737
5,170
2,288
3,804
Working capital from certain recent
acquisitions
‐
‐
‐
‐
Adjusted working capital
4,020
3,737
5,170
2,288
3,804
Nutrien Financial working capital
(2,283
)
(4,716
)
(4,353
)
(2,893
)
Adjusted working capital excluding Nutrien
Financial
1,737
(979
)
817
(605
)
243
Sales
3,422
9,128
3,490
3,502
Sales from certain recent acquisitions
‐
‐
‐
‐
Adjusted sales
3,422
9,128
3,490
3,502
19,542
Nutrien Financial revenue
(57
)
(122
)
(73
)
(70
)
Adjusted sales excluding Nutrien
Financial
3,365
9,006
3,417
3,432
19,220
Adjusted average working capital to
sales (%)
19
Adjusted average working capital to
sales excluding Nutrien Financial (%)
1
Rolling four quarters ended
December 31, 2022
(millions of US dollars, except as
otherwise noted)
Q1 2022
Q2 2022
Q3 2022
Q4 2022
Average/Total
Current assets
12,392
12,487
11,262
11,668
Current liabilities
(9,223
)
(9,177
)
(5,889
)
(8,708
)
Working capital
3,169
3,310
5,373
2,960
3,703
Working capital from certain recent
acquisitions
‐
‐
‐
‐
Adjusted working capital
3,169
3,310
5,373
2,960
3,703
Nutrien Financial working capital
(2,274
)
(4,404
)
(3,898
)
(2,669
)
Adjusted working capital excluding Nutrien
Financial
895
(1,094
)
1,475
291
392
Sales
3,861
9,422
3,980
4,087
Sales from certain recent acquisitions
‐
‐
‐
‐
Adjusted sales
3,861
9,422
3,980
4,087
21,350
Nutrien Financial revenue
(49
)
(91
)
(65
)
(62
)
Adjusted sales excluding Nutrien
Financial
3,812
9,331
3,915
4,025
21,083
Adjusted average working capital to sales
(%)
17
Adjusted average working capital to sales
excluding Nutrien Financial (%)
2
Nutrien Financial Adjusted Net Interest Margin
Definition: Nutrien Financial revenue less deemed
interest expense divided by average Nutrien Financial net
receivables outstanding for the last four rolling quarters.
Why we use the measure and why it is useful to investors:
Used by credit rating agencies and others to evaluate the financial
performance of Nutrien Financial.
Rolling four quarters ended
December 31, 2023
(millions of US dollars, except as
otherwise noted)
Q1 2023
Q2 2023
Q3 2023
Q4 2023
Total/Average
Nutrien Financial revenue
57
122
73
70
Deemed interest expense 1
(20
)
(39
)
(41
)
(36
)
Net interest
37
83
32
34
186
Average Nutrien Financial net
receivables
2,283
4,716
4,353
2,893
3,561
Nutrien Financial adjusted net interest
margin (%)
5.2
Rolling four quarters ended
December 31, 2022
(millions of US dollars, except as
otherwise noted)
Q1 2022
Q2 2022
Q3 2022
Q4 2022
Total/Average
Nutrien Financial revenue
49
91
65
62
Deemed interest expense 1
(6
)
(12
)
(12
)
(11
)
Net interest
43
79
53
51
226
Average Nutrien Financial net
receivables
2,274
4,404
3,898
2,669
3,311
Nutrien Financial adjusted net interest
margin (%)
6.8
1 Average borrowing rate applied to the
notional debt required to fund the portfolio of receivables from
customers monitored and serviced by Nutrien Financial.
Retail Cash Operating Coverage Ratio
Definition: Retail selling, general and administrative,
and other expenses (income), excluding depreciation and
amortization expense, divided by Retail gross margin excluding
depreciation and amortization expense in cost of goods sold, for
the last four rolling quarters.
Why we use the measure and why it is useful to investors:
To understand the costs and underlying economics of our Retail
operations and to assess our Retail operating performance and
ability to generate free cash flow.
Rolling four quarters ended
December 31, 2023
(millions of US dollars, except as
otherwise noted)
Q1 2023
Q2 2023
Q3 2023
Q4 2023
Total
Selling expenses
765
971
798
841
3,375
General and administrative expenses
50
55
57
55
217
Other expenses
15
29
37
77
158
Operating expenses
830
1,055
892
973
3,750
Depreciation and amortization in operating
expenses
(179
)
(185
)
(186
)
(199
)
(749
)
Operating expenses excluding depreciation
and amortization
651
870
706
774
3,001
Gross margin
615
1,931
895
989
4,430
Depreciation and amortization in cost of
goods sold
2
3
3
2
10
Gross margin excluding depreciation and
amortization
617
1,934
898
991
4,440
Cash operating coverage ratio (%)
68
Rolling four quarters ended
December 31, 2022
(millions of US dollars, except as
otherwise noted)
Q1 2022
Q2 2022
Q3 2022
Q4 2022
Total
Selling expenses
722
1,013
821
836
3,392
General and administrative expenses
45
54
50
51
200
Other expenses (income)
(12
)
21
19
1
29
Operating expenses
755
1,088
890
888
3,621
Depreciation and amortization in operating
expenses
(167
)
(171
)
(204
)
(198
)
(740
)
Operating expenses excluding depreciation
and amortization
588
917
686
690
2,881
Gross margin
845
2,340
917
1,077
5,179
Depreciation and amortization in cost of
goods sold
2
4
2
4
12
Gross margin excluding depreciation and
amortization
847
2,344
919
1,081
5,191
Cash operating coverage ratio (%)
55
Appendix C – Other Financial Measures
Supplementary Financial Measures
Supplementary financial measures are financial measures
disclosed by the Company that (a) are, or are intended to be,
disclosed on a periodic basis to depict the historical or expected
future financial performance, financial position or cash flow of
the Company, (b) are not disclosed in the financial statements of
the Company, (c) are not non-GAAP financial measures, and (d) are
not non-GAAP ratios.
The following section provides an explanation of the composition
of those supplementary financial measures if not previously
provided.
Retail adjusted EBITDA margin: Retail adjusted EBITDA
divided by Retail sales for the last four rolling quarters.
Sustaining capital expenditures: Represents capital
expenditures that are required to sustain operations at existing
levels and include major repairs and maintenance and plant
turnarounds.
Investing capital expenditures: Represents capital
expenditures related to significant expansions of current
operations or to create cost savings (synergies). Investing capital
expenditures excludes capital outlays for business acquisitions and
equity-accounted investees.
Mine development and pre-stripping capital expenditures:
Represents capital expenditures that are required for activities to
open new areas underground and/or develop a mine or ore body to
allow for future production mining and activities required to
prepare and/or access the ore, i.e., removal of an overburden that
allows access to the ore.
Retail adjusted EBITDA per US selling location:
Calculated as total Retail US adjusted EBITDA for the last four
rolling quarters, representing the organic EBITDA component, which
excludes acquisitions in those quarters, divided by the number of
US locations that have generated sales in the last four rolling
quarters, adjusted for acquired locations in those quarters.
Cash used for dividends and share repurchases (shareholder
returns): Calculated as dividends paid to Nutrien’s
shareholders plus repurchase of common shares as reflected in the
unaudited condensed consolidated statements of cash flows. This
measure is useful as it represents return of capital to
shareholders.
Condensed Consolidated Financial Statements
Unaudited in millions of US dollars except as otherwise
noted
Condensed Consolidated Statements of Earnings
Three Months Ended
Twelve Months Ended
December 31
December 31
Note
2023
2022
2023
2022
SALES
2
5,664
7,533
29,056
37,884
Freight, transportation and
distribution
260
244
974
872
Cost of goods sold
3,636
4,383
19,608
21,588
GROSS MARGIN
1,768
2,906
8,474
15,424
Selling expenses
849
844
3,397
3,414
General and administrative expenses
173
162
626
565
Provincial mining taxes
79
190
398
1,149
Share-based compensation (recovery)
expense
(7
)
(59
)
(14
)
63
Impairment (reversal of impairment) of
assets
3
76
‐
774
(780
)
Other expenses
4
305
110
548
204
EARNINGS BEFORE FINANCE COSTS AND
INCOME TAXES
293
1,659
2,745
10,809
Finance costs
213
188
793
563
EARNINGS BEFORE INCOME TAXES
80
1,471
1,952
10,246
Income tax (recovery) expense
5
(96
)
353
670
2,559
NET EARNINGS
176
1,118
1,282
7,687
Attributable to
Equity holders of Nutrien
172
1,112
1,258
7,660
Non-controlling interest
4
6
24
27
NET EARNINGS
176
1,118
1,282
7,687
NET EARNINGS PER SHARE ATTRIBUTABLE TO
EQUITY HOLDERS OF NUTRIEN ("EPS")
Basic
0.35
2.15
2.53
14.22
Diluted
0.35
2.15
2.53
14.18
Weighted average shares outstanding for
basic EPS
494,545,000
516,810,000
496,381,000
538,475,000
Weighted average shares outstanding for
diluted EPS
494,878,000
517,964,000
496,994,000
540,010,000
Condensed Consolidated Statements of Comprehensive
Income
Three Months Ended
Twelve Months Ended
December 31
December 31
(Net of related income taxes)
2023
2022
2023
2022
NET EARNINGS
176
1,118
1,282
7,687
Other comprehensive income (loss)
Items that will not be reclassified to net
earnings:
Net actuarial (loss) gain on defined
benefit plans
(14
)
22
(17
)
83
Net fair value (loss) gain on
investments
(1
)
17
4
(44
)
Items that have been or may be
subsequently reclassified to net earnings:
Gain (loss) on currency translation of
foreign operations
103
73
89
(199
)
Other
9
7
5
(17
)
OTHER COMPREHENSIVE INCOME
(LOSS)
97
119
81
(177
)
COMPREHENSIVE INCOME
273
1,237
1,363
7,510
Attributable to
Equity holders of Nutrien
268
1,230
1,338
7,484
Non-controlling interest
5
7
25
26
COMPREHENSIVE INCOME
273
1,237
1,363
7,510
(See Notes to the Condensed Consolidated
Financial Statements)
Condensed Consolidated Statements of Cash Flows
Three Months Ended
Twelve Months Ended
December 31
December 31
Note
2023
2022
2023
2022
Note 1
Note 1
OPERATING ACTIVITIES
Net earnings
176
1,118
1,282
7,687
Adjustments for:
Depreciation and amortization
565
520
2,169
2,012
Share-based compensation (recovery)
expense
(7
)
(59
)
(14
)
63
Impairment (reversal of impairment) of
assets
3
76
‐
774
(780
)
(Recovery of) provision for deferred
income tax
(169
)
30
7
182
Net distributed (undistributed) earnings
of equity-accounted investees
5
(42
)
117
(181
)
Gain on amendments to other
post-retirement pension plans
‐
‐
(80
)
‐
Loss on Blue Chip Swaps
4
‐
‐
92
‐
Long-term income tax receivables and
payables
24
72
(65
)
273
Other long-term assets, liabilities and
miscellaneous
153
(29
)
277
2
Cash from operations before working
capital changes
823
1,610
4,559
9,258
Changes in non-cash operating working
capital:
Receivables
2,370
2,683
879
(919
)
Inventories and prepaid expenses and other
current assets
(1,990
)
(1,841
)
1,376
(1,167
)
Payables and accrued charges
2,947
2,284
(1,748
)
938
CASH PROVIDED BY OPERATING
ACTIVITIES
4,150
4,736
5,066
8,110
INVESTING ACTIVITIES
Capital expenditures 1
(781
)
(986
)
(2,671
)
(2,475
)
Business acquisitions, net of cash
acquired
(37
)
(329
)
(153
)
(407
)
Proceeds from sales of Blue Chip Swaps,
net of purchases
4
‐
‐
(92
)
‐
Net changes in non-cash working
capital
46
33
(22
)
(44
)
Other
39
60
(20
)
25
CASH USED IN INVESTING
ACTIVITIES
(733
)
(1,222
)
(2,958
)
(2,901
)
FINANCING ACTIVITIES
(Repayment of) proceeds from short-term
debt, net
(2,671
)
(2,338
)
(458
)
529
Proceeds from long-term debt
‐
1,004
1,500
1,045
Repayment of long-term debt
(13
)
(511
)
(648
)
(561
)
Repayment of principal portion of lease
liabilities
(97
)
(85
)
(375
)
(341
)
Dividends paid to Nutrien's
shareholders
6
(262
)
(251
)
(1,032
)
(1,031
)
Repurchase of common shares
6
‐
(1,214
)
(1,047
)
(4,520
)
Issuance of common shares
1
‐
33
168
Other
‐
(17
)
(34
)
(20
)
CASH USED IN FINANCING
ACTIVITIES
(3,042
)
(3,412
)
(2,061
)
(4,731
)
EFFECT OF EXCHANGE RATE CHANGES ON CASH
AND CASH
EQUIVALENTS
12
(24
)
(7
)
(76
)
INCREASE IN CASH AND CASH
EQUIVALENTS
387
78
40
402
CASH AND CASH EQUIVALENTS – BEGINNING
OF PERIOD
554
823
901
499
CASH AND CASH EQUIVALENTS – END OF
PERIOD
941
901
941
901
Cash and cash equivalents is composed
of:
Cash
909
775
909
775
Short-term investments
32
126
32
126
941
901
941
901
SUPPLEMENTAL CASH FLOWS
INFORMATION
Interest paid
267
202
729
482
Income taxes paid
42
379
1,764
1,882
Total cash outflow for leases
128
120
501
459
1 Includes additions to property, plant
and equipment, and intangible assets for the three months ended
December 31, 2023 of $731 and $50 (2022 – $919 and $67),
respectively, and for the twelve months ended December 31, 2023 of
$2,465 and $206 (2022 – $2,253 and $222), respectively.
(See Notes to the Condensed Consolidated
Financial Statements)
Condensed Consolidated Statements of Changes in Shareholders’
Equity
Accumulated Other
Comprehensive
(Loss) Income ("AOCI")
(Loss) Gain
on Currency
Equity
Number of
Translation
Holders
Non-
Common
Share
Contributed
of Foreign
Total
Retained
of
Controlling
Total
Shares
Capital
Surplus
Operations
Other
AOCI
Earnings
Nutrien
Interest
Equity
BALANCE – DECEMBER 31, 2021
557,492,516
15,457
149
(176
)
30
(146
)
8,192
23,652
47
23,699
Net earnings
‐
‐
‐
‐
‐
‐
7,660
7,660
27
7,687
Other comprehensive (loss) income
‐
‐
‐
(198
)
22
(176
)
‐
(176
)
(1
)
(177
)
Shares repurchased
(53,312,559
)
(1,487
)
(22
)
‐
‐
‐
(2,987
)
(4,496
)
‐
(4,496
)
Dividends declared
‐
‐
‐
‐
‐
‐
(1,019
)
(1,019
)
‐
(1,019
)
Non-controlling interest transactions
‐
‐
‐
‐
‐
‐
(1
)
(1
)
(28
)
(29
)
Effect of share-based compensation
including issuance of common shares
3,066,148
202
(18
)
‐
‐
‐
‐
184
‐
184
Transfer of net loss on cash flow
hedges
‐
‐
‐
‐
14
14
‐
14
‐
14
Transfer of net actuarial gain on defined
benefit plans
‐
‐
‐
‐
(83
)
(83
)
83
‐
‐
‐
BALANCE – DECEMBER 31, 2022
507,246,105
14,172
109
(374
)
(17
)
(391
)
11,928
25,818
45
25,863
Net earnings
‐
‐
‐
‐
‐
‐
1,258
1,258
24
1,282
Other comprehensive income (loss)
‐
‐
‐
88
(8
)
80
‐
80
1
81
Shares repurchased
(13,378,189
)
(374
)
(26
)
‐
‐
‐
(600
)
(1,000
)
‐
(1,000
)
Dividends declared
‐
‐
‐
‐
‐
‐
(1,050
)
(1,050
)
‐
(1,050
)
Non-controlling interest transactions
‐
‐
‐
‐
‐
‐
(2
)
(2
)
(25
)
(27
)
Effect of share-based compensation
including issuance of common shares
683,814
40
‐
‐
‐
‐
‐
40
‐
40
Transfer of net gain on sale of
investment
‐
‐
‐
‐
(14
)
(14
)
14
‐
‐
‐
Transfer of net loss on cash flow
hedges
‐
‐
‐
‐
12
12
‐
12
‐
12
Transfer of net actuarial loss on defined
benefit plans
‐
‐
‐
‐
17
17
(17
)
‐
‐
‐
BALANCE – DECEMBER 31, 2023
494,551,730
13,838
83
(286
)
(10
)
(296
)
11,531
25,156
45
25,201
(See Notes to the Condensed Consolidated
Financial Statements)
Condensed Consolidated Balance Sheets
December 31
December 31
As at
Note
2023
2022
ASSETS
Current assets
Cash and cash equivalents
941
901
Receivables
5,398
6,194
Inventories
6,336
7,632
Prepaid expenses and other current
assets
1,495
1,615
14,170
16,342
Non-current assets
Property, plant and equipment
22,461
21,767
Goodwill
12,114
12,368
Intangible assets
2,217
2,297
Investments
736
843
Other assets
1,051
969
TOTAL ASSETS
52,749
54,586
LIABILITIES
Current liabilities
Short-term debt
1,815
2,142
Current portion of long-term debt
512
542
Current portion of lease liabilities
327
305
Payables and accrued charges
9,467
11,291
12,121
14,280
Non-current liabilities
Long-term debt
8,913
8,040
Lease liabilities
999
899
Deferred income tax liabilities
3,574
3,547
Pension and other post-retirement benefit
liabilities
252
319
Asset retirement obligations and accrued
environmental costs
1,489
1,403
Other non-current liabilities
200
235
TOTAL LIABILITIES
27,548
28,723
SHAREHOLDERS’ EQUITY
Share capital
6
13,838
14,172
Contributed surplus
83
109
Accumulated other comprehensive loss
(296
)
(391
)
Retained earnings
11,531
11,928
Equity holders of Nutrien
25,156
25,818
Non-controlling interest
45
45
TOTAL SHAREHOLDERS’ EQUITY
25,201
25,863
TOTAL LIABILITIES AND SHAREHOLDERS’
EQUITY
52,749
54,586
(See Notes to the Condensed Consolidated
Financial Statements)
Notes to the Condensed Consolidated Financial
Statements
As at and for the Three and Twelve Months Ended December 31,
2023
NOTE 1 BASIS OF PRESENTATION
Nutrien Ltd. (collectively with its subsidiaries, “Nutrien”,
“we”, “us”, “our” or “the Company”) is the world’s largest provider
of crop inputs and services. Nutrien plays a critical role in
helping growers around the globe increase food production in a
sustainable manner.
These unaudited interim condensed consolidated financial
statements (“interim financial statements”) are based on
International Financial Reporting Standards (“IFRS”) as issued by
the International Accounting Standards Board and have been prepared
in accordance with IAS 34, “Interim Financial Reporting”. The
accounting policies and methods of computation used in preparing
these interim financial statements are materially consistent with
those used in the preparation of our 2022 annual consolidated
financial statements. These interim financial statements include
the accounts of Nutrien and its subsidiaries; however, they do not
include all disclosures normally provided in annual consolidated
financial statements and should be read in conjunction with our
2022 annual consolidated financial statements.
Certain immaterial 2022 figures have been reclassified in the
condensed consolidated statements of cash flows. Interim results
are not necessarily indicative of the results expected for any
other interim period or the fiscal year.
In management’s opinion, the interim financial statements
include all adjustments necessary to fairly present such
information in all material respects.
These interim financial statements were authorized by the Audit
Committee of the Board of Directors for issue on February 21,
2024.
NOTE 2 SEGMENT INFORMATION
The Company has four reportable operating segments: Nutrien Ag
Solutions (“Retail”), Potash, Nitrogen and Phosphate. The Retail
segment distributes crop nutrients, crop protection products, seed
and merchandise. Retail provides services directly to growers
through a network of farm centers in North America, South America
and Australia. The Potash, Nitrogen and Phosphate segments are
differentiated by the chemical nutrient contained in the products
that each produces.
Three Months Ended December
31, 2023
Corporate
Retail
Potash
Nitrogen
Phosphate
and Others
Eliminations
Consolidated
Sales
– third party
3,504
734
895
531
‐
‐
5,664
– intersegment
(2
)
129
223
84
‐
(434
)
‐
Sales
– total
3,502
863
1,118
615
‐
(434
)
5,664
Freight, transportation and
distribution
‐
87
162
82
‐
(71
)
260
Net sales
3,502
776
956
533
‐
(363
)
5,404
Cost of goods sold
2,513
349
671
463
‐
(360
)
3,636
Gross margin
989
427
285
70
‐
(3
)
1,768
Selling expenses
841
3
4
1
7
(7
)
849
General and administrative expenses
55
3
10
1
104
‐
173
Provincial mining taxes
‐
79
‐
‐
‐
‐
79
Share-based compensation recovery
‐
‐
‐
‐
(7
)
‐
(7
)
Impairment of assets
‐
‐
76
‐
‐
‐
76
Other expenses (income)
77
(3
)
26
19
161
25
305
Earnings (loss) before finance costs and
income taxes
16
345
169
49
(265
)
(21
)
293
Depreciation and amortization
201
118
146
81
19
‐
565
EBITDA 1
217
463
315
130
(246
)
(21
)
858
Integration and restructuring related
costs
12
‐
‐
‐
8
‐
20
Share-based compensation recovery
‐
‐
‐
‐
(7
)
‐
(7
)
Impairment of assets
‐
‐
76
‐
‐
‐
76
ARO/ERL expense for non-operating sites
2
‐
‐
‐
‐
142
‐
142
Foreign exchange gain, net of related
derivatives
‐
‐
‐
‐
(14
)
‐
(14
)
Adjusted EBITDA
229
463
391
130
(117
)
(21
)
1,075
Assets – at December 31, 2023
23,056
13,571
11,466
2,438
2,818
(600
)
52,749
1 EBITDA is calculated as net earnings
(loss) before finance costs, income taxes, and depreciation and
amortization.
2 ARO/ERL refers to asset retirement
obligations and accrued environmental costs.
Three Months Ended December 31,
2022
Corporate
Retail
Potash
Nitrogen
Phosphate
and Others
Eliminations
Consolidated
Sales
– third party
4,089
1,255
1,677
512
‐
‐
7,533
– intersegment
(2
)
203
272
54
‐
(527
)
‐
Sales
– total
4,087
1,458
1,949
566
‐
(527
)
7,533
Freight, transportation and
distribution
‐
81
157
65
‐
(59
)
244
Net sales
4,087
1,377
1,792
501
‐
(468
)
7,289
Cost of goods sold
3,010
310
1,093
485
‐
(515
)
4,383
Gross margin
1,077
1,067
699
16
‐
47
2,906
Selling expenses
836
1
6
2
5
(6
)
844
General and administrative expenses
51
3
5
4
99
‐
162
Provincial mining taxes
‐
190
‐
‐
‐
‐
190
Share-based compensation recovery
‐
‐
‐
‐
(59
)
‐
(59
)
Other expenses (income)
1
4
2
40
67
(4
)
110
Earnings (loss) before finance costs and
income taxes
189
869
686
(30
)
(112
)
57
1,659
Depreciation and amortization
202
89
155
58
16
‐
520
EBITDA
391
958
841
28
(96
)
57
2,179
Integration and restructuring related
costs
‐
‐
‐
‐
11
‐
11
Share-based compensation recovery
‐
‐
‐
‐
(59
)
‐
(59
)
Foreign exchange gain, net of related
derivatives
‐
‐
‐
‐
(36
)
‐
(36
)
Adjusted EBITDA
391
958
841
28
(180
)
57
2,095
Assets – at December 31, 2022
24,451
13,921
11,807
2,661
2,622
(876
)
54,586
Twelve Months Ended December
31, 2023
Corporate
Retail
Potash
Nitrogen
Phosphate
and Others
Eliminations
Consolidated
Sales
– third party
19,542
3,735
3,804
1,975
‐
‐
29,056
– intersegment
‐
431
931
288
‐
(1,650
)
‐
Sales
– total
19,542
4,166
4,735
2,263
‐
(1,650
)
29,056
Freight, transportation and
distribution
‐
407
528
270
‐
(231
)
974
Net sales
19,542
3,759
4,207
1,993
‐
(1,419
)
28,082
Cost of goods sold
15,112
1,396
2,828
1,760
‐
(1,488
)
19,608
Gross margin
4,430
2,363
1,379
233
‐
69
8,474
Selling expenses
3,375
12
27
6
‐
(23
)
3,397
General and administrative expenses
217
13
21
11
364
‐
626
Provincial mining taxes
‐
398
‐
‐
‐
‐
398
Share-based compensation recovery
‐
‐
‐
‐
(14
)
‐
(14
)
Impairment of assets
465
‐
76
233
‐
‐
774
Other expenses (income)
158
(1
)
(27
)
40
348
30
548
Earnings (loss) before finance costs and
income taxes
215
1,941
1,282
(57
)
(698
)
62
2,745
Depreciation and amortization
759
463
572
294
81
‐
2,169
EBITDA
974
2,404
1,854
237
(617
)
62
4,914
Integration and restructuring related
costs
20
‐
‐
‐
29
‐
49
Share-based compensation recovery
‐
‐
‐
‐
(14
)
‐
(14
)
Impairment of assets
465
‐
76
233
‐
‐
774
ARO/ERL expense for non-operating
sites
‐
‐
‐
‐
152
‐
152
Foreign exchange loss, net of related
derivatives
‐
‐
‐
‐
91
‐
91
Loss on Blue Chip Swaps
‐
‐
‐
‐
92
‐
92
Adjusted EBITDA
1,459
2,404
1,930
470
(267
)
62
6,058
Assets – at December 31, 2023
23,056
13,571
11,466
2,438
2,818
(600
)
52,749
Twelve Months Ended December 31,
2022
Corporate
Retail
Potash
Nitrogen
Phosphate
and Others
Eliminations
Consolidated
Sales
– third party
21,266
7,600
6,755
2,263
‐
‐
37,884
– intersegment
84
599
1,293
357
‐
(2,333
)
‐
Sales
– total
21,350
8,199
8,048
2,620
‐
(2,333
)
37,884
Freight, transportation and
distribution
‐
300
515
243
‐
(186
)
872
Net sales
21,350
7,899
7,533
2,377
‐
(2,147
)
37,012
Cost of goods sold
16,171
1,400
4,252
1,884
‐
(2,119
)
21,588
Gross margin
5,179
6,499
3,281
493
‐
(28
)
15,424
Selling expenses
3,392
10
28
7
(1
)
(22
)
3,414
General and administrative expenses
200
9
17
13
326
‐
565
Provincial mining taxes
‐
1,149
‐
‐
‐
‐
1,149
Share-based compensation expense
‐
‐
‐
‐
63
‐
63
Reversal of impairment of assets
‐
‐
‐
(780
)
‐
‐
(780
)
Other expenses (income)
29
5
(137
)
67
227
13
204
Earnings (loss) before finance costs and
income taxes
1,558
5,326
3,373
1,186
(615
)
(19
)
10,809
Depreciation and amortization
752
443
558
188
71
‐
2,012
EBITDA
2,310
5,769
3,931
1,374
(544
)
(19
)
12,821
Integration and restructuring related
costs
2
‐
‐
‐
44
‐
46
Share-based compensation expense
‐
‐
‐
‐
63
‐
63
Reversal of impairment of assets
‐
‐
‐
(780
)
‐
‐
(780
)
COVID-19 related expenses
‐
‐
‐
‐
8
‐
8
Foreign exchange loss, net of related
derivatives
‐
‐
‐
‐
31
‐
31
Gain on disposal of investment
(19
)
‐
‐
‐
‐
‐
(19
)
Adjusted EBITDA
2,293
5,769
3,931
594
(398
)
(19
)
12,170
Assets – at December 31, 2022
24,451
13,921
11,807
2,661
2,622
(876
)
54,586
For our disaggregated revenue from contracts with customers by
product line or geographic location, refer to the “Segment Results”
section of our news release dated February 21, 2024.
NOTE 3 IMPAIRMENT OF ASSETS
Nitrogen
During the three and twelve months ended December 31, 2023, we
identified an impairment trigger for our Trinidad cash generating
unit (“CGU”), part of our Nitrogen segment, due to a new natural
gas contract and the resulting outlook for higher expected natural
gas costs and constrained near-term availability. We expect
improved natural gas availability in Trinidad as the development of
additional natural gas fields is anticipated to add new natural gas
supply starting in 2026.
Trinidad
Recoverable amount ($)
676
Carrying amount before impairment loss
($)
752
Pre-tax impairment loss ($)
76
Impairment recorded to
Property, plant and equipment
Valuation methodology
Fair value less costs of disposal
("FVLCD"), a Level 3 measurement
Valuation technique
Five-year discounted cash flows
plus a terminal value
Key assumptions
Long-term growth rate (%)
2.3
Post-tax discount rate 1 (%)
13.0
Forecasted EBITDA 2, 3 ($)
1,145
1 Discount rate used in the previous
measurement in 2020 was 12.6 percent.
2 First five years of the forecast
period.
3 Includes key assumptions relating to net
selling price based on forecasted future natural gas contracting
and availability.
The recoverable amount estimate used the following key
assumptions: our forecasted EBITDA, discount rate and long-term
growth rate. We used key assumptions that were based on historical
data and estimates of future results from internal sources,
independent third-party price benchmarks, as well as industry and
market information.
The following table highlights sensitivities to the recoverable
amount of our Trinidad CGU, which could result in additional
impairment losses or reversals of the previously recorded
losses.
Key Assumptions
Change in Assumption
Change to Recoverable Amount
($)
Long-term growth rate (%)
+ / - 1.0 percent
+ / -
55
Post-tax discount rate (%)
+ / - 1.0 percent
- / +
95
Forecasted EBITDA over forecast period
($)
+ / - 5.0 percent
+ / -
100
Goodwill Impairment Testing
Goodwill by CGU or Group of
CGUs
2023
2022
Retail – North America
6,981
6,898
Retail – International 1
590
927
Potash
154
154
Nitrogen
4,389
4,389
12,114
12,368
1 Includes Retail – South America group of
CGUs, which had goodwill of nil as at December 31, 2023 (2022 –
$348).
During the three months ended June 30, 2023, we recorded an
impairment of goodwill and intangible assets of $422 and $43,
respectively, relating to our Retail – South America group of
CGUs.
During the three and twelve months ended December 31, 2023, we
performed our annual goodwill impairment testing (excluding the
Retail – South America group of CGUs, which was fully impaired
during the three months ended June 30, 2023) and did not identify
any further impairment; however, the recoverable amount for Retail
– North America group of CGUs did not substantially exceed its
carrying amount. In testing for impairment of goodwill, we
calculate the recoverable amount for a CGU or groups of CGUs
containing goodwill. We used the FVLCD methodology based on
after-tax discounted cash flows (five-year projections plus a
terminal value) and incorporated assumptions an independent market
participant would apply, including considerations related to
climate-change initiatives. We adjusted discount rates for each CGU
or group of CGUs for the risk associated with achieving our
forecasts and for the country risk premium in which we expect to
generate cash flows. FVLCD is a Level 3 measurement. We use our
market capitalization and comparative market multiples to ensure
discounted cash flow results are reasonable.
The key assumptions with the greatest influence on the
calculation of the recoverable amounts are the discount rates,
terminal growth rates and forecasted EBITDA. The key forecast
assumptions were based on historical data and our estimates of
future results from internal sources considering industry and
market information.
The Retail – North America group of CGUs recoverable amount
exceeds its carrying amount by $570. Goodwill is more susceptible
to impairment risk if there is an increase in the discount rate or
a deterioration in business operating results or economic
conditions and actual results do not meet our forecasts. A
reduction in the terminal growth rate, an increase in the discount
rate or a decrease in forecasted EBITDA could cause impairment in
the future as shown in the table below.
Key Assumption
Change Required for Carrying
Amount
2023 Annual Impairment Testing
Used in Impairment
Model
to Equal Recoverable
Amount
Terminal growth rate (%)
2.5
0.4 percent decrease
Discount rate 1 (%)
8.6
0.2 percent increase
Forecasted EBITDA over forecast period
($)
8,040
3.0 percent decrease
1 The discount rate used in the previous
measurement was 8.5 percent.
The following table indicates the key assumptions used in
testing the remaining groups of CGUs:
Terminal Growth Rate
(%)
Discount Rate (%)
2023
2022
2023
2022
Retail – International 1
2.1
2.0
–
6.0
9.0
8.9
–
16.0
Potash
2.5
2.5
7.6
8.3
Nitrogen
2.3
2.0
8.3
9.3
1 The discount rates reflect the country
risk premium and size for our international groups of CGUs. The
terminal growth rate and discount rate ranges in 2022 included our
Retail – South America group of CGUs, which are no longer included
in 2023 as goodwill for this group of CGUs is nil.
NOTE 4 OTHER EXPENSES (INCOME)
Three Months Ended
Twelve Months Ended
December 31
December 31
2023
2022
2023
2022
Integration and restructuring related
costs
20
11
49
46
Foreign exchange (gain) loss, net of
related derivatives
(14
)
(36
)
91
31
Earnings of equity-accounted investees
(1
)
(47
)
(101
)
(247
)
Bad debt expense (recovery)
4
(6
)
55
12
COVID-19 related expenses
‐
‐
‐
8
Gain on disposal of investment
‐
‐
‐
(19
)
Project feasibility costs
33
22
86
79
Customer prepayment costs
11
7
47
42
Legal expenses
16
8
34
21
Consulting expenses
3
15
21
29
Employee special recognition award
‐
61
‐
61
Loss on Blue Chip Swaps
‐
‐
92
‐
ARO/ERL expense for non-operating
sites
142
‐
152
‐
Gain on amendments to other
post-retirement pension plans
‐
‐
(80
)
‐
Other expenses
91
75
102
141
305
110
548
204
The Central Bank of Argentina maintains certain currency
controls that limit our ability to remit cash from Argentina. Blue
Chip Swaps are trade transactions that effectively allow companies
to transfer US dollars out of Argentina. Through this mechanism, we
incurred a loss of $92 from the purchase of securities denominated
in Argentine peso and corresponding sale in US dollars during the
twelve months ended December 31, 2023. The loss is a result of the
significant divergence between the Blue Chip Swap market exchange
rate and the official Argentinian Central Bank rate.
NOTE 5 INCOME TAXES
Three Months Ended
Twelve Months Ended
December 31
December 31
2023
2022
2023
2022
Income tax (recovery) expense
(96
)
353
670
2,559
Actual effective tax rate on earnings
(%)
39
23
33
25
Actual effective tax rate including
discrete items (%)
(120
)
24
34
25
Discrete tax adjustments that impacted the
tax rate
(127
)
22
28
30
During the three and twelve months ended December 31, 2023, we
recorded a deferred tax asset of $134 related to an increase in the
tax basis of our Swiss assets as a result of changes to our
Switzerland tax declarations.
NOTE 6 SHARE CAPITAL
Share Repurchase Programs
On February 21, 2024, our Board of Directors approved a share
repurchase program for up to five percent of our outstanding common
shares. The 2024 normal course issuer bid, which is subject to the
acceptance by the Toronto Stock Exchange, will expire after a
one-year period, if we acquire the maximum number of common shares
allowable or otherwise decide not to make any further
repurchases.
Dividends Declared
We declared a dividend per share of $0.53 (2022 – $0.48) during
the three months ended December 31, 2023, payable on January 12,
2024 to shareholders of record on December 29, 2023.
On February 21, 2024, our Board of Directors declared and
increased our quarterly dividend to $0.54 per share payable on
April 11, 2024, to shareholders of record on March 28, 2024. The
total estimated dividend to be paid is $265.
NOTE 7 RELATED PARTY TRANSACTIONS
We sell potash outside Canada and the United States exclusively
through Canpotex. Canpotex sells potash to buyers, including
Nutrien, in export markets pursuant to term and spot contracts at
agreed upon prices. Our total revenue is recognized at the amount
received from Canpotex representing proceeds from their sale of
potash, less net costs of Canpotex. Sales to Canpotex for the three
months ended December 31, 2023 were $404 (2022 – $841) and the
twelve months ended December 31, 2023 were $2,076 (2022 – $5,414).
Purchases from Canpotex for the three months ended December 31,
2023 were $32 (2022 – $24) and the twelve months ended December 31,
2023 were $92 (2022 – $415).
As at
December 31, 2023
December 31, 2022
Receivables from Canpotex
162
866
Payables to Canpotex
64
203
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240216205375/en/
Investor Relations: Jeff Holzman Vice President, Investor
Relations (306) 933-8545 Investors@nutrien.com Media
Relations: Megan Fielding Vice President, Brand & Culture
Communications (403) 797-3015
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