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 share 1 was $0.37 and adjusted EBITDA 1 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.
Highlights 2 :
- Generated net earnings of $1.3 billion ($2.53 diluted net earnings per share) and adjusted EBITDA 1 of $6.1 billion ($4.44 adjusted net earnings per share 1 ) 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 percent 1 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 |
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 |
P 2 O 5 production (P 2 O 5 tonnes – thousands) | 380 | | 288 | | 1,406 | | 1,351 |
P 2 O 5 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
