Silver Eagle Mines (CSE:SEM) implements a straightforward business quarry strategy, “Blow it up. Dig it up. Grind it up. Bag It up. And Ship it out by rail,” by using a direct-ship, pit-run system that brings truly organic, direct to application phosphorus to market. The companyfocuses on producing the only certified raw rock organic phosphate eligible for organic farming in the United States.
The organic food market in the United States is growing because of factors such as increasing health awareness among consumers and increasing environmental concerns due to the heavy use of pesticides, chemical fertilizers, and other chemicals in conventional farming. As a reagent, raw rock organic phosphate from Murdock Mountain is perfectly suited to regenerate soil to serve the fast growing organic food market.
This Silver Eagle Mines profile is part of a paid investor education campaign.*
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Revising full-year guidance to reflect factors impacting offshore potash sales through Canpotex and lower global potash prices than previously anticipated. Announcing strategic actions expected to reduce controllable costs and enhance free cash flow.
All amounts are in US dollars except as otherwise noted
Nutrien Ltd. (TSX and NYSE: NTR) announced today its second quarter 2023 results, with net earnings of $448 million ($0.89 diluted net earnings per share), which includes non-cash impairments of $465 million primarily related to our South American Retail goodwill and $233 million related to our Phosphate property, plant and equipment. Second quarter 2023 adjusted net earnings per share 1 was $2.53 and adjusted EBITDA 1 was $2.5 billion.
"Nutrien's results have been impacted by unprecedented volatility in global crop input markets over the last 18 months. We continue to see demand strengthen in our key markets, in particular North America, however the process of recovery has been more uneven in offshore markets," commented Ken Seitz, Nutrien's President and CEO.
"We are announcing a number of strategic actions to reduce our controllable costs and enhance free cash flow in 2023 and beyond. This includes an indefinite pause of our potash ramp up and suspension of work on our Geismar clean ammonia project. These actions, along with other operational efficiency initiatives, demonstrate our commitment to disciplined capital allocation and focus on long-term value creation," added Mr. Seitz.
Financial Highlights 2 :
1. | These (and any related guidance, if applicable) are non-IFRS financial measures. See the "Non-IFRS Financial Measures" section for further information. | |
2. | Our discussion of highlights set out on this page is a comparison of the results for the three and six months ended June 30, 2023 to the results for the three and six months ended June 30, 2022, unless otherwise noted. |
Strategic Actions:
Management's Discussion and Analysis
The following management's discussion and analysis ("MD&A") is the responsibility of management and is dated as of August 2, 2023. The Board of Directors ("Board") of Nutrien carries out its responsibility for review of this disclosure principally through its Audit Committee, composed entirely of independent directors. The Audit Committee reviews and, prior to its publication, approves this disclosure pursuant to the authority delegated to it by the Board. The term "Nutrien" refers to Nutrien Ltd. and the terms "we", "us", "our", "Nutrien" and "the Company" refer to Nutrien and, as applicable, Nutrien and its direct and indirect subsidiaries on a consolidated basis. Additional information relating to Nutrien (which, except as otherwise noted, is not incorporated by reference herein), including our annual report dated February 16, 2023 ("2022 Annual Report"), which includes our annual audited consolidated financial statements and MD&A, and our annual information form dated February 16, 2023, each for the year ended December 31, 2022, can be found on SEDAR at www.sedar.com and on EDGAR at www.sec.gov . No update is provided to the disclosure in our 2022 annual MD&A except for material information since the date of our annual MD&A. The Company is a foreign private issuer under the rules and regulations of the US Securities and Exchange Commission (the "SEC").
This MD&A is based on and should be read in conjunction with the Company's unaudited interim condensed consolidated financial statements as at and for the three and six months ended June 30, 2023 ("interim financial statements") based on International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board and prepared in accordance with International Accounting Standard ("IAS") 34 "Interim Financial Reporting", unless otherwise noted. This MD&A contains certain non-IFRS financial measures and ratios and forward-looking statements, which are described in the "Non-IFRS Financial Measures" and the "Forward-Looking Statements" sections, respectively.
Market Outlook and Guidance
Agriculture and Retail
Crop Nutrient Markets
Financial Guidance
| 1. | These (and any related guidance, if applicable) are non-IFRS financial measures. See the "Non-IFRS Financial Measures" section for further information. |
All guidance numbers, including those noted above are outlined in the table below. Refer to page 56 of Nutrien's 2022 Annual Report for related assumptions and sensitivities, except as set forth below.
Guidance Ranges 1 as of | |||||||
August 2, 2023 | May 10, 2023 | ||||||
(billions of US dollars, except as otherwise noted) | Low | High | Low | High | |||
Adjusted net earnings per share (in US dollars) 2,3 | 3.85 | 5.60 | 5.50 | 7.50 | |||
Adjusted EBITDA 2 | 5.5 | 6.7 | 6.5 | 8.0 | |||
Retail adjusted EBITDA | 1.45 | 1.60 | 1.60 | 1.75 | |||
Potash adjusted EBITDA | 2.00 | 2.50 | 2.65 | 3.35 | |||
Nitrogen adjusted EBITDA | 1.80 | 2.30 | 1.95 | 2.55 | |||
Phosphate adjusted EBITDA (in millions of US dollars) | 500 | 600 | 550 | 700 | |||
Potash sales tonnes (millions) 4 | 12.6 | 13.2 | 13.5 | 14.3 | |||
Nitrogen sales tonnes (millions) 4 | 10.8 | 11.2 | 10.8 | 11.4 | |||
Depreciation and amortization | 2.1 | 2.2 | 2.1 | 2.2 | |||
Effective tax rate on adjusted earnings (%) | 25.5 | 26.0 | 23.5 | 24.0 | |||
1 See the "Forward-Looking Statements" section. | |||||||
2 These are non-IFRS financial measures. See the "Non-IFRS Financial Measures" section. | |||||||
3 Assumes 497 million shares outstanding for August 2, 2023 adjusted net EPS guidance. | |||||||
4 Manufactured product only. Nitrogen sales tonnes includes ESN® products. | |||||||
Consolidated Results
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||||
(millions of US dollars, except as otherwise noted) | 2023 | 2022 | % Change | 2023 | 2022 | % Change | |||||||||||
Sales | 11,654 | 14,506 | (20 | ) | 17,761 | 22,163 | (20 | ) | |||||||||
Freight, transportation and distribution | 252 | 221 | 14 | 451 | 424 | 6 | |||||||||||
Cost of goods sold | 8,236 | 8,286 | (1 | ) | 12,231 | 12,483 | (2 | ) | |||||||||
Gross margin | 3,166 | 5,999 | (47 | ) | 5,079 | 9,256 | (45 | ) | |||||||||
Expenses | 2,038 | 1,054 | 93 | 3,012 | 2,312 | 30 | |||||||||||
Net earnings | 448 | 3,601 | (88 | ) | 1,024 | 4,986 | (79 | ) | |||||||||
Adjusted EBITDA 1 | 2,478 | 4,993 | (50 | ) | 3,899 | 7,608 | (49 | ) | |||||||||
Diluted net earnings per share | 0.89 | 6.51 | (86 | ) | 2.03 | 8.99 | (77 | ) | |||||||||
Adjusted net earnings per share 1 | 2.53 | 5.85 | (57 | ) | 3.63 | 8.53 | (57 | ) | |||||||||
Cash provided by operating activities | 2,243 | 2,558 | (12 | ) | 1,385 | 2,496 | (45 | ) | |||||||||
Cash used in investing activities | (858 | ) | (517 | ) | 66 | (1,552 | ) | (974 | ) | 59 | |||||||
Cash used for dividends and share repurchases 2 | (413 | ) | (1,228 | ) | (66 | ) | (1,556 | ) | (2,127 | ) | (27 | ) | |||||
1 These are non-IFRS financial measures. See the "Non-IFRS Financial Measures" section. | |||||||||||||||||
2 This is a supplementary financial measure. See the "Other Financial Measures" section. | |||||||||||||||||
Net earnings and adjusted EBITDA decreased in the second quarter and first half of 2023 compared to the same periods in 2022, mainly due to lower net realized selling prices in all segments, weaker offshore Potash sales volumes, and lower Retail gross margin for crop nutrients and crop protection products. This was partially offset by decreased cost of goods sold from lower natural gas and royalty costs, lower provincial mining taxes, and higher sales volumes in Nitrogen and Retail crop nutrients. In the second quarter of 2023, we recorded a non-cash impairment of $465 million primarily related to our South American Retail goodwill and $233 million related to our White Springs property, plant and equipment, which impacted net earnings. The decrease in cash provided by operating activities in the second quarter and first half 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 six months ended June 30, 2023 to the results for the three and six months ended June 30, 2022, unless otherwise noted.
Nutrien Ag Solutions ("Retail")
Three Months Ended June 30 | |||||||||||||||||||||
(millions of US dollars, except | Dollars | Gross Margin | Gross Margin (%) | ||||||||||||||||||
as otherwise noted) | 2023 | 2022 | % Change | 2023 | 2022 | % Change | 2023 | 2022 | |||||||||||||
Sales | |||||||||||||||||||||
Crop nutrients | 3,986 | 4,548 | (12 | ) | 629 | 911 | (31 | ) | 16 | 20 | |||||||||||
Crop protection products | 3,070 | 2,983 | 3 | 673 | 805 | (16 | ) | 22 | 27 | ||||||||||||
Seed | 1,428 | 1,269 | 13 | 265 | 283 | (6 | ) | 19 | 22 | ||||||||||||
Merchandise | 273 | 280 | (3 | ) | 47 | 51 | (8 | ) | 17 | 18 | |||||||||||
Nutrien Financial | 122 | 91 | 34 | 122 | 91 | 34 | 100 | 100 | |||||||||||||
Services and other | 308 | 310 | (1 | ) | 254 | 258 | (2 | ) | 82 | 83 | |||||||||||
Nutrien Financial elimination 1 | (59 | ) | (59 | ) | ‐ | (59 | ) | (59 | ) | ‐ | 100 | 100 | |||||||||
9,128 | 9,422 | (3 | ) | 1,931 | 2,340 | (17 | ) | 21 | 25 | ||||||||||||
Cost of goods sold | 7,197 | 7,082 | 2 | ||||||||||||||||||
Gross margin | 1,931 | 2,340 | (17 | ) | |||||||||||||||||
Expenses 2,3 | 1,520 | 1,088 | 40 | ||||||||||||||||||
Earnings before finance costs and taxes ("EBIT") | 411 | 1,252 | (67 | ) | |||||||||||||||||
Depreciation and amortization | 188 | 175 | 7 | ||||||||||||||||||
EBITDA | 599 | 1,427 | (58 | ) | |||||||||||||||||
Adjustments 3 | 468 | ‐ | n/m | ||||||||||||||||||
Adjusted EBITDA | 1,067 | 1,427 | (25 | ) | |||||||||||||||||
1 Represents elimination for the interest and service fees charged by Nutrien Financial to Retail branches. | |||||||||||||||||||||
2 Includes selling expenses of $971 million (2022 – $1,013 million). | |||||||||||||||||||||
3 Includes impairment of assets of $465 million (2022 – nil). See Notes 2 and 3 to the interim financial statements. | |||||||||||||||||||||
Six Months Ended June 30 | |||||||||||||||||||||
(millions of US dollars, except | Dollars | Gross Margin | Gross Margin (%) | ||||||||||||||||||
as otherwise noted) | 2023 | 2022 | % Change | 2023 | 2022 | % Change | 2023 | 2022 | |||||||||||||
Sales | |||||||||||||||||||||
Crop nutrients | 5,321 | 6,135 | (13 | ) | 770 | 1,203 | (36 | ) | 14 | 20 | |||||||||||
Crop protection products | 4,224 | 4,370 | (3 | ) | 881 | 1,087 | (19 | ) | 21 | 25 | |||||||||||
Seed | 1,935 | 1,727 | 12 | 337 | 349 | (3 | ) | 17 | 20 | ||||||||||||
Merchandise | 519 | 514 | 1 | 91 | 92 | (1 | ) | 18 | 18 | ||||||||||||
Nutrien Financial | 179 | 140 | 28 | 179 | 140 | 28 | 100 | 100 | |||||||||||||
Services and other | 456 | 485 | (6 | ) | 372 | 402 | (7 | ) | 82 | 83 | |||||||||||
Nutrien Financial elimination | (84 | ) | (88 | ) | (5 | ) | (84 | ) | (88 | ) | (5 | ) | 100 | 100 | |||||||
12,550 | 13,283 | (6 | ) | 2,546 | 3,185 | (20 | ) | 20 | 24 | ||||||||||||
Cost of goods sold | 10,004 | 10,098 | (1 | ) | |||||||||||||||||
Gross margin | 2,546 | 3,185 | (20 | ) | |||||||||||||||||
Expenses 1,2 | 2,350 | 1,843 | 28 | ||||||||||||||||||
EBIT | 196 | 1,342 | (85 | ) | |||||||||||||||||
Depreciation and amortization | 369 | 344 | 7 | ||||||||||||||||||
EBITDA | 565 | 1,686 | (66 | ) | |||||||||||||||||
Adjustments 2 | 468 | (19 | ) | n/m | |||||||||||||||||
Adjusted EBITDA | 1,033 | 1,667 | (38 | ) | |||||||||||||||||
1 Includes selling expenses of $1,736 million (2022 – $1,735 million). | |||||||||||||||||||||
2 Includes impairment of assets of $465 million (2022 – nil). See Notes 2 and 3 to the interim financial statements. | |||||||||||||||||||||
Potash
Three Months Ended June 30 | ||||||||||||||||||||
(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 | 469 | 680 | (31 | ) | 1,226 | 933 | 31 | 383 | 729 | (47 | ) | |||||||||
Offshore | 540 | 1,988 | (73 | ) | 2,156 | 2,776 | (22 | ) | 250 | 716 | (65 | ) | ||||||||
1,009 | 2,668 | (62 | ) | 3,382 | 3,709 | (9 | ) | 298 | 719 | (59 | ) | |||||||||
Cost of goods sold | 353 | 399 | (12 | ) | 104 | 107 | (3 | ) | ||||||||||||
Gross margin – total | 656 | 2,269 | (71 | ) | 194 | 612 | (68 | ) | ||||||||||||
Expenses ¹ | 117 | 372 | (69 | ) | Depreciation and amortization | 34 | 35 | (3 | ) | |||||||||||
EBIT | 539 | 1,897 | (72 | ) | Gross margin excluding depreciation | |||||||||||||||
Depreciation and amortization | 115 | 130 | (12 | ) | and amortization – manufactured 2 | 228 | 647 | (65 | ) | |||||||||||
EBITDA / Adjusted EBITDA | 654 | 2,027 | (68 | ) | Potash controllable cash cost of | |||||||||||||||
product manufactured 2 | 60 | 52 | 15 | |||||||||||||||||
1 Includes provincial mining taxes of $104 million (2022 – $362 million). | ||||||||||||||||||||
2 These are non-IFRS financial measures. See the "Non-IFRS Financial Measures" section. | ||||||||||||||||||||
Six Months Ended June 30 | ||||||||||||||||||||
(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 | 812 | 1,513 | (46 | ) | 2,080 | 2,151 | (3 | ) | 391 | 703 | (44 | ) | ||||||||
Offshore | 1,199 | 3,005 | (60 | ) | 3,938 | 4,601 | (14 | ) | 304 | 653 | (53 | ) | ||||||||
2,011 | 4,518 | (55 | ) | 6,018 | 6,752 | (11 | ) | 334 | 669 | (50 | ) | |||||||||
Cost of goods sold | 658 | 704 | (7 | ) | 109 | 104 | 5 | |||||||||||||
Gross margin – total | 1,353 | 3,814 | (65 | ) | 225 | 565 | (60 | ) | ||||||||||||
Expenses ¹ | 235 | 623 | (62 | ) | Depreciation and amortization | 35 | 36 | (2 | ) | |||||||||||
EBIT | 1,118 | 3,191 | (65 | ) | Gross margin excluding depreciation | |||||||||||||||
Depreciation and amortization | 212 | 242 | (12 | ) | and amortization – manufactured | 260 | 601 | (57 | ) | |||||||||||
EBITDA / Adjusted EBITDA | 1,330 | 3,433 | (61 | ) | Potash controllable cash cost of | |||||||||||||||
product manufactured | 61 | 51 | 20 | |||||||||||||||||
1 Includes provincial mining taxes of $223 million (2022 – $611 million). | ||||||||||||||||||||
Canpotex Sales by Market
(percentage of sales volumes, except as | Three Months Ended June 30 | Six Months Ended June 30 | |||||||
otherwise noted) | 2023 | 2022 | Change | 2023 | 2022 | Change | |||
Latin America | 55 | 40 | 15 | 46 | 36 | 10 | |||
Other Asian markets 1 | 19 | 28 | (9 | ) | 28 | 35 | (7 | ) | |
Other markets | 10 | 11 | (1 | ) | 12 | 11 | 1 | ||
India | 10 | 9 | 1 | 6 | 6 | ‐ | |||
China | 6 | 12 | (6 | ) | 8 | 12 | (4 | ) | |
100 | 100 | 100 | 100 | ||||||
1 All Asian markets except China and India. | |||||||||
Nitrogen
Three Months Ended June 30 | |||||||||||||||||||||
(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 | 332 | 743 | (55 | ) | 681 | 643 | 6 | 488 | 1,157 | (58 | ) | ||||||||||
Urea and ESN ® 1 | 450 | 678 | (34 | ) | 952 | 894 | 6 | 472 | 757 | (38 | ) | ||||||||||
Solutions, nitrates and sulfates | 333 | 536 | (38 | ) | 1,312 | 1,142 | 15 | 254 | 469 | (46 | ) | ||||||||||
1,115 | 1,957 | (43 | ) | 2,945 | 2,679 | 10 | 379 | 730 | (48 | ) | |||||||||||
Cost of goods sold 1 | 697 | 911 | (23 | ) | 237 | 339 | (30 | ) | |||||||||||||
Gross margin – manufactured | 418 | 1,046 | (60 | ) | 142 | 391 | (64 | ) | |||||||||||||
Gross margin – other 1,2 | (19 | ) | 12 | n/m | Depreciation and amortization 1 | 55 | 52 | 6 | |||||||||||||
Gross margin – total | 399 | 1,058 | (62 | ) | Gross margin excluding depreciation | ||||||||||||||||
(Income) expenses 3 | (8 | ) | (43 | ) | (81 | ) | and amortization – manufactured 4 | 197 | 443 | (56 | ) | ||||||||||
EBIT | 407 | 1,101 | (63 | ) | Ammonia controllable cash cost of | ||||||||||||||||
Depreciation and amortization | 162 | 139 | 17 | product manufactured 4 | 55 | 58 | (5 | ) | |||||||||||||
EBITDA / Adjusted EBITDA | 569 | 1,240 | (54 | ) | |||||||||||||||||
1 Certain immaterial 2022 figures have been reclassified. | |||||||||||||||||||||
2 Includes other nitrogen and purchased products and comprises net sales of $101 million (2022 – $272 million) less cost of goods sold of $120 million (2022 – $260 million). | |||||||||||||||||||||
3 Includes earnings from equity-accounted investees of $31 million (2022 – $76 million). | |||||||||||||||||||||
4 These are non-IFRS financial measures. See the "Non-IFRS Financial Measures" section. | |||||||||||||||||||||
Six Months Ended June 30 | ||||||||||||||||||||||
(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 | 717 | 1,303 | (45 | ) | 1,215 | 1,238 | (2 | ) | 591 | 1,052 | (44 | ) | ||||||||||
Urea and ESN ® 1 | 911 | 1,193 | (24 | ) | 1,699 | 1,545 | 10 | 536 | 772 | (31 | ) | |||||||||||
Solutions, nitrates and sulfates | 666 | 975 | (32 | ) | 2,388 | 2,221 | 8 | 279 | 439 | (36 | ) | |||||||||||
2,294 | 3,471 | (34 | ) | 5,302 | 5,004 | 6 | 433 | 693 | (38 | ) | ||||||||||||
Cost of goods sold 1 | 1,345 | 1,583 | (15 | ) | 254 | 316 | (20 | ) | ||||||||||||||
Gross margin – manufactured | 949 | 1,888 | (50 | ) | 179 | 377 | (53 | ) | ||||||||||||||
Gross margin – other 1,2 | (9 | ) | 30 | n/m | Depreciation and amortization | 56 | 52 | 7 | ||||||||||||||
Gross margin – total | 940 | 1,918 | (51 | ) | Gross margin excluding depreciation | |||||||||||||||||
(Income) expenses 3 | (9 | ) | (55 | ) | (84 | ) | and amortization – manufactured | 235 | 429 | (45 | ) | |||||||||||
EBIT | 949 | 1,973 | (52 | ) | Ammonia controllable cash cost of | |||||||||||||||||
Depreciation and amortization | 296 | 262 | 13 | product manufactured | 59 | 57 | 4 | |||||||||||||||
EBITDA / Adjusted EBITDA | 1,245 | 2,235 | (44 | ) | ||||||||||||||||||
1 Certain immaterial 2022 figures have been reclassified. | ||||||||||||||||||||||
2 Includes other nitrogen and purchased products and comprises net sales of $234 million (2022 – $499 million) less cost of goods sold of $243 million (2022 – $469 million). | ||||||||||||||||||||||
3 Includes earnings from equity-accounted investees of $61 million (2022 – $113 million). | ||||||||||||||||||||||
Natural Gas Prices in Cost of Production
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||||
(US dollars per MMBtu, except as otherwise noted) | 2023 | 2022 | % Change | 2023 | 2022 | % Change | |||||||||||
Overall gas cost excluding realized derivative impact | 2.76 | 8.54 | (68 | ) | 3.85 | 7.72 | (50 | ) | |||||||||
Realized derivative impact | (0.02 | ) | (0.06 | ) | (67 | ) | (0.01 | ) | (0.04 | ) | (75 | ) | |||||
Overall gas cost | 2.74 | 8.48 | (68 | ) | 3.84 | 7.68 | (50 | ) | |||||||||
Average NYMEX | 2.10 | 7.17 | (71 | ) | 2.76 | 6.06 | (54 | ) | |||||||||
Average AECO | 1.74 | 4.95 | (65 | ) | 2.47 | 4.28 | (42 | ) | |||||||||
1. | Excludes Trinidad and Joffre. |
Phosphate
Three Months Ended June 30 | ||||||||||||||||||||||
(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 | 254 | 325 | (22 | ) | 426 | 366 | 16 | 595 | 888 | (33 | ) | |||||||||||
Industrial and feed | 176 | 189 | (7 | ) | 160 | 190 | (16 | ) | 1,100 | 996 | 10 | |||||||||||
430 | 514 | (16 | ) | 586 | 556 | 5 | 732 | 925 | (21 | ) | ||||||||||||
Cost of goods sold | 377 | 352 | 7 | 643 | 634 | 1 | ||||||||||||||||
Gross margin - manufactured | 53 | 162 | (67 | ) | 89 | 291 | (69 | ) | ||||||||||||||
Gross margin – other 1 | (4 | ) | (6 | ) | (33 | ) | Depreciation and amortization | 121 | 74 | 64 | ||||||||||||
Gross margin – total | 49 | 156 | (69 | ) | Gross margin excluding depreciation | |||||||||||||||||
Expenses (income) ² | 240 | (437 | ) | n/m | and amortization – manufactured 3 | 210 | 365 | (42 | ) | |||||||||||||
EBIT | (191 | ) | 593 | n/m | ||||||||||||||||||
Depreciation and amortization | 71 | 41 | 73 | |||||||||||||||||||
EBITDA | (120 | ) | 634 | n/m | ||||||||||||||||||
Adjustments 2 | 233 | (450 | ) | n/m | ||||||||||||||||||
Adjusted EBITDA | 113 | 184 | (39 | ) | ||||||||||||||||||
1 Includes other phosphate and purchased products and comprises net sales of $72 million (2022 – $76 million) less cost of goods sold of $76 million (2022 – $82 million). | ||||||||||||||||||||||
2 Includes impairment of assets of $233 million (2022 - reversal of impairment of assets of $(450) million). See Notes 2 and 3 to the interim financial statements. | ||||||||||||||||||||||
3 This is a non-IFRS financial measure. See the "Non-IFRS Financial Measures" section. | ||||||||||||||||||||||
Six Months Ended June 30 | ||||||||||||||||||||||
(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 | 518 | 718 | (28 | ) | 814 | 826 | (1 | ) | 636 | 869 | (27 | ) | ||||||||||
Industrial and feed | 358 | 359 | ‐ | 320 | 381 | (16 | ) | 1,118 | 943 | 19 | ||||||||||||
876 | 1,077 | (19 | ) | 1,134 | 1,207 | (6 | ) | 772 | 892 | (13 | ) | |||||||||||
Cost of goods sold | 734 | 712 | 3 | 647 | 589 | 10 | ||||||||||||||||
Gross margin – manufactured | 142 | 365 | (61 | ) | 125 | 303 | (59 | ) | ||||||||||||||
Gross margin – other 1 | (6 | ) | (2 | ) | 200 | Depreciation and amortization | 122 | 68 | 79 | |||||||||||||
Gross margin – total | 136 | 363 | (63 | ) | Gross margin excluding depreciation | |||||||||||||||||
Expenses (income) ² | 257 | (428 | ) | n/m | and amortization – manufactured | 247 | 371 | (33 | ) | |||||||||||||
EBIT | (121 | ) | 791 | n/m | ||||||||||||||||||
Depreciation and amortization | 138 | 82 | 68 | |||||||||||||||||||
EBITDA | 17 | 873 | (98 | ) | ||||||||||||||||||
Adjustments 2 | 233 | (450 | ) | n/m | ||||||||||||||||||
Adjusted EBITDA | 250 | 423 | (41 | ) | ||||||||||||||||||
1 Includes other phosphate and purchased products and comprises net sales of $140 million (2022 – $148 million) less cost of goods sold of $146 million (2022 – $150 million). | ||||||||||||||||||||||
2 Includes impairment of assets of $233 million (2022 - reversal of impairment of assets of $(450) million). See Notes 2 and 3 to the interim financial statements. | ||||||||||||||||||||||
Corporate and Others
(millions of US dollars, except as otherwise | Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||
noted) | 2023 | 2022 | % Change | 2023 | 2022 | % Change | ||||||||||
Selling expense recovery | (2 | ) | (2 | ) | ‐ | (4 | ) | (4 | ) | ‐ | ||||||
General and administrative expenses | 88 | 77 | 14 | 172 | 147 | 17 | ||||||||||
Share-based compensation (recovery) expense | (64 | ) | (52 | ) | 23 | (49 | ) | 83 | n/m | |||||||
Other expenses | 151 | 48 | 215 | 70 | 101 | (31 | ) | |||||||||
EBIT | (173 | ) | (71 | ) | 144 | (189 | ) | (327 | ) | (42 | ) | |||||
Depreciation and amortization | 20 | 20 | ‐ | 37 | 36 | 3 | ||||||||||
EBITDA | (153 | ) | (51 | ) | 200 | (152 | ) | (291 | ) | (48 | ) | |||||
Adjustments 1 | 93 | (7 | ) | n/m | 79 | 167 | (53 | ) | ||||||||
Adjusted EBITDA | (60 | ) | (58 | ) | 3 | (73 | ) | (124 | ) | (41 | ) | |||||
1 See Note 2 to the interim financial statements. Includes loss on Blue Chip Swaps of $92 million for the three and six months ended June 30 (2022 - nil). | ||||||||||||||||
Eliminations
Finance Costs, Income Taxes and Other Comprehensive Income
(millions of US dollars, except as otherwise | Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||||
noted) | 2023 | 2022 | % Change | 2023 | 2022 | % Change | |||||||||
Finance costs | 204 | 130 | 57 | 374 | 239 | 56 | |||||||||
Income tax expense | 476 | 1,214 | (61 | ) | 669 | 1,719 | (61 | ) | |||||||
Other comprehensive income (loss) | 68 | (242 | ) | n/m | 70 | (66 | ) | n/m | |||||||
Liquidity and Capital Resources
Sources and Uses of Liquidity
We continued to manage our capital in accordance with our capital allocation strategy. We believe that our internally generated cash flow, supplemented by available borrowings under new or existing financing sources, if necessary, will be sufficient to meet our anticipated capital expenditures, planned growth and development activities, and other cash requirements for the foreseeable future. Refer to the "Capital Structure and Management" section for details on our existing long-term debt and credit facilities.
Sources and Uses of Cash
(millions of US dollars, except as otherwise | Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||||||
noted) | 2023 | 2022 | % Change | 2023 | 2022 | % Change | |||||||||||
Cash provided by operating activities | 2,243 | 2,558 | (12 | ) | 1,385 | 2,496 | (45 | ) | |||||||||
Cash used in investing activities | (858 | ) | (517 | ) | 66 | (1,552 | ) | (974 | ) | 59 | |||||||
Cash (used in) provided by financing activities | (2,124 | ) | (1,878 | ) | 13 | 5 | (1,290 | ) | n/m | ||||||||
Effect of exchange rate changes on cash and cash equivalents | 3 | (29 | ) | n/m | (2 | ) | (20 | ) | (90 | ) | |||||||
(Decrease) increase in cash and cash equivalents | (736 | ) | 134 | n/m | (164 | ) | 212 | n/m | |||||||||
Cash provided by operating activities |
|
Cash used in investing activities |
|
Cash (used in) provided by financing activities |
|
Financial Condition Review
The following balance sheet categories contain variances that are considered material:
As at | |||||||||
(millions of US dollars, except as otherwise noted) | June 30, 2023 | December 31, 2022 | $ Change | % Change | |||||
Assets | |||||||||
Receivables | 8,595 | 6,194 | 2,401 | 39 | |||||
Inventories | 6,062 | 7,632 | (1,570 | ) | (21 | ) | |||
Prepaid expenses and other current assets | 602 | 1,615 | (1,013 | ) | (63 | ) | |||
Goodwill | 12,077 | 12,368 | (291 | ) | (2 | ) | |||
Liabilities and Equity | |||||||||
Short-term debt | 2,922 | 2,142 | 780 | 36 | |||||
Current portion of long-term debt | 44 | 542 | (498 | ) | (92 | ) | |||
Payables and accrued charges | 9,470 | 11,291 | (1,821 | ) | (16 | ) | |||
Long-term debt | 9,498 | 8,040 | 1,458 | 18 | |||||
Share capital | 13,835 | 14,172 | (337 | ) | (2 | ) | |||
Capital Structure and Management
Principal Debt Instruments
As part of the normal course of business, we closely monitor our liquidity position. We use a combination of cash generated from operations and short-term and long-term debt to finance our operations. We were in compliance with our debt covenants and did not have any changes to our credit ratings in the six months ended June 30, 2023.
As at June 30, 2023 | ||||
(millions of US dollars, except as | Outstanding and Committed | |||
otherwise noted) | Rate of Interest (%) | Total Facility Limit | Short-Term Debt | Long-Term Debt |
Credit facilities | ||||
Unsecured revolving term credit facility | n/a | 4,500 | ‐ | ‐ |
Unsecured revolving term credit facility | n/a | 2,000 | ‐ | ‐ |
Uncommitted revolving demand facility | n/a | 1,000 | ‐ | ‐ |
Other credit facilities | 1,310 | |||
South America 1 | 1.2 - 23.1 | 588 | 151 | |
Australia | 5.1 | 100 | ‐ | |
Other | 4.1 | 89 | 3 | |
Commercial paper | 5.4 - 5.8 | 2,038 | ‐ | |
Other short-term and long-term debt | n/a | 107 | 2 | |
Total | 2,922 | 156 | ||
1 Our credit facilities are either denominated in local currency or US dollars. The range of interest rates for South America excludes our local currency denominated Argentina facility with an interest rate of 92.4 percent and a minimal outstanding balance as at June 30, 2023. | ||||
The amount available under the commercial paper program is limited to the undrawn availability of backup funds under the $4,500 million unsecured revolving term credit facility and excess cash invested in highly liquid securities.
Our long-term debt consists primarily of notes and debentures. See the "Capital Structure and Management" section of our 2022 Annual Report for information on balances, rates and maturities for our notes and debentures. During the first six months of 2023, we issued notes of $1,500 million and repaid the $500 million 1.900 percent notes upon maturity on May 13, 2023. See Note 8 to the interim financial statements.
Outstanding Share Data
As at August 1, 2023 | |
Common shares | 494,508,425 |
Options to purchase common shares | 3,327,351 |
For more information on our capital structure and management, see Note 24 to our 2022 annual consolidated financial statements.
Quarterly Results
(millions of US dollars, except as otherwise noted) | Q2 2023 | Q1 2023 | Q4 2022 | Q3 2022 | Q2 2022 | Q1 2022 | Q4 2021 | Q3 2021 | |||||||
Sales | 11,654 | 6,107 | 7,533 | 8,188 | 14,506 | 7,657 | 7,267 | 6,024 | |||||||
Net earnings | 448 | 576 | 1,118 | 1,583 | 3,601 | 1,385 | 1,207 | 726 | |||||||
Net earnings attributable to equity holders of Nutrien | 440 | 571 | 1,112 | 1,577 | 3,593 | 1,378 | 1,201 | 717 | |||||||
Net earnings per share attributable to equity holders of Nutrien | |||||||||||||||
Basic | 0.89 | 1.14 | 2.15 | 2.95 | 6.53 | 2.49 | 2.11 | 1.26 | |||||||
Diluted | 0.89 | 1.14 | 2.15 | 2.94 | 6.51 | 2.49 | 2.11 | 1.25 | |||||||
Seasonality in our business results from increased demand for products during the planting season. Crop input sales are generally higher in the spring and fall application seasons. The results of this seasonality have a corresponding effect on receivables from customers and rebates receivables, inventories, prepaid expenses and other current assets, and trade payables. Our short-term debt also fluctuates during the year to meet working capital requirements. Crop input inventories are normally accumulated leading up to each application season. Our cash collections generally occur after the application season is complete, while customer prepayments made to us are typically concentrated in December and January and inventory prepayments paid to our suppliers are typically concentrated in the period from November to January. Feed and industrial sales are more evenly distributed throughout the year.
Our earnings are significantly affected by fertilizer benchmark prices, which have been volatile over the last two years and are affected by demand-supply conditions, grower affordability and weather.
In the second quarter of 2023, we recorded non-cash impairment of assets totaling to $698 million. This is comprised of an impairment of our Phosphate White Springs property, plant and equipment of $233 million and an impairment of our South American Retail assets of $465 million primarily related to goodwill. In the second and third quarters of 2022, earnings were impacted by $450 million and $330 million non-cash impairment reversals at Aurora and White Springs CGUs, respectively, of property, plant and equipment in the Phosphate segment. The impairments and reversal of impairments in our Phosphate segment reflect the volatility of forecasted phosphate margins while the impairment related to the Retail South America group of CGUs is mainly due to the impact of crop input price volatility, more moderate long-term growth assumptions and higher interest rates. In the fourth quarter of 2021, earnings were impacted by a $142 million loss resulting from the early extinguishment of long-term debt.
Critical Accounting Estimates
Our significant accounting policies are disclosed in our 2022 Annual Report. We have discussed the development, selection and application of our key accounting policies, and the critical accounting estimates and assumptions they involve, with the Audit Committee of the Board. Our critical accounting estimates are discussed on page 65 of our 2022 Annual Report. Other than the critical accounting estimates discussed below, there were no material changes in the three or six months ended June 30, 2023 to our critical accounting estimates.
Impairment of Assets
Long-Lived Asset Impairment and Reversals
During the three and six months ended June 30, 2023, we identified an impairment trigger for our Phosphate CGUs, White Springs and Aurora, primarily as a result of the decrease in our forecasted phosphate margins. As a result of the impairment analysis, we recorded an impairment of property, plant and equipment amounting to $233 million at our White Springs CGU as the recoverable amount was less than its carrying value. The White Springs CGU has a shorter expected mine life and is therefore more sensitive to changes in short and medium-term forecasted phosphate margins. We determined there was no impairment for our Aurora CGU. Refer to Note 3 to the interim financial statements for additional information.
The following table highlights sensitivities to the recoverable amounts which could result in additional impairment losses or reversals of the previously recorded losses (relating to the White Springs CGU). The sensitivities have been calculated independently of changes in other key variables. Dollar amounts are in millions, except as otherwise noted.
Change to Recoverable Amount ($) | ||||||||
Key Assumptions as at June 30, 2023 | Change in Assumption | White Springs | Aurora | |||||
Forecasted EBITDA over forecast period ($) | + / - | 5.0 percent | + / - | 40 | + / - | 220 | ||
Pre-tax discount rate (%) | + / - | 1.0 percent | - / + | 20 | n/a | n/a | ||
Post-tax discount rate (%) | + / - | 1.0 percent | n/a | n/a | - / + | 190 | ||
Long-term growth rate (%) | + / - | 1.0 percent | n/a | n/a | + / - | 110 | ||
Goodwill and Intangible Assets Impairment
Recent acquisitions in Brazil resulted in goodwill being recognized for our Retail – South America group of CGUs. Goodwill is more susceptible to impairment risk if business operating results or economic conditions deteriorate and we anticipate not meeting our forecasts. During the three and six months ended June 30, 2023, we revised our forecasted EBITDA for the Retail – South America group of CGUs which triggered an impairment analysis. Due to the impact of crop input price volatility, more moderate long-term growth assumptions and higher interest rates, we have lowered our product margin expectations and deferred certain of our planned strategic investments. As a result, this reduced our forecasted earnings and growth. As at June 30, 2023, the Retail – South America group of CGUs recoverable amount was lower than its carrying amount. As a result, we fully impaired goodwill of $422 million and recorded a $43 million impairment of intangible assets for a total of $465 million for the Retail – South America group of CGUs. Refer to Note 3 to the interim financial statements for additional information.
The following table highlights sensitivities to the recoverable amount which could have resulted in additional impairment against the carrying amount of intangible assets and property, plant and equipment. The sensitivities have been calculated independently of changes in other key variables. Dollar amounts are in millions, except as otherwise noted.
Decrease to | |||||
Key Assumptions | Change in Key Assumption | Recoverable Amount ($) | |||
Terminal growth rate (%) | - | 1.0 percent | 50 | ||
Forecasted EBITDA over forecast period ($) | - | 5.0 percent | 100 | ||
Discount rate (%) | + | 1.0 percent | 120 | ||
Controls and Procedures
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended, and National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings . Internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and preparation of financial statements for external purposes in accordance with IFRS. Any system of internal control over financial reporting, no matter how well designed, has inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.
There has been no change in our internal control over financial reporting during the three months ended June 30, 2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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", "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 revised 2023 full-year guidance, including expectations regarding our adjusted net earnings per share and adjusted EBITDA (consolidated and by segment), Potash sales tonnes, Nitrogen sales tonnes, depreciation and amortization and effective tax rate on adjusted earnings; our expectations for annual potash capability and ability to adjust operations according to market demand; our projections for cash from operations; expectations regarding our growth and capital allocation intentions and strategies, including our forecasts relating to goodwill impairment; expectations and forecasts relating to our Aurora and White Springs CGUs and the reversals and impairments (as applicable) associated therewith; our advancement of strategic growth initiatives; capital spending expectations for 2023 and beyond, including expectations for lower capital expenditures and reduced expenses; expectations regarding Retail inventory levels in North America; expectations regarding performance of our operating segments in 2023, including our plans to ramp up production and the anticipated effects of the strike at the Port of Vancouver; our operating segment market outlooks and our expectations for market conditions and fundamentals in 2023 and beyond, and the anticipated supply and demand for our products and services, expected market and industry conditions with respect to crop nutrient application rates, planted acres, grower crop investment, crop mix, production volumes and expenses, shipments, consumption, prices, operating rates and the impact of seasonality, including drought conditions, import and export volumes, economic sanctions, operating rates, inventories, exports, crop development, natural gas curtailments and the war between Ukraine and Russia; 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 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, 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 2023 and in the future; our expectations for fertilizer prices to stabilize near mid-cycle values in 2023; assumptions related to our Retail South America group of CGUs goodwill and intangible asset impairment; assumptions related to the calculation of recoverable amount of our Aurora and White Springs CGUs, including internal sales and input price forecasts, discount rate, long-term growth rate and end of expected mine life; assumptions with respect to our intention to complete share repurchases under our normal course issuer bid programs, including 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; expectations relating to the effects of the strike at the Port of Vancouver; our expectations regarding the impacts, direct and indirect, of the war between Ukraine and Russia 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; our ability to successfully negotiate sales and other contracts; and our ability to successfully implement new initiatives and programs.
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 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 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; 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; the war between Ukraine and Russia and its 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 SEC in the United States.
The purpose of our 2023 adjusted net earnings per share and adjusted EBITDA (consolidated and by segment), capital expenditures, operating expenses, cash provided by operations, depreciation and amortization and effective tax rate on adjusted earnings 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 the world's largest 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 retail facilities that positions us to efficiently serve the needs of growers. We focus on creating long-term value for all stakeholders by advancing our key environmental, social and governance priorities.
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, August 3, 2023 at 10:00 a.m. Eastern Time.
Telephone Conference dial-in numbers:
Live Audio Webcast: Visit https://www.nutrien.com/investors/events/2023-q2-earnings-conference-call
Appendix A - Selected Additional Financial Data
Selected Retail Measures | Three Months Ended June 30 | Six Months Ended June 30 | |||||
2023 | 2022 | 2023 | 2022 | ||||
Proprietary products gross margin (millions of US dollars) | |||||||
Crop nutrients | 214 | 197 | 268 | 241 | |||
Crop protection products | 253 | 317 | 327 | 428 | |||
Seed | 113 | 126 | 143 | 152 | |||
Merchandise | 3 | 3 | 6 | 6 | |||
All products | 583 | 643 | 744 | 827 | |||
Proprietary products margin as a percentage of product line margin (%) | |||||||
Crop nutrients | 34 | 22 | 35 | 20 | |||
Crop protection products | 38 | 39 | 37 | 39 | |||
Seed | 42 | 46 | 42 | 44 | |||
Merchandise | 7 | 6 | 7 | 6 | |||
All products | 30 | 28 | 29 | 26 | |||
Crop nutrients sales volumes (tonnes – thousands) | |||||||
North America | 4,599 | 3,978 | 5,794 | 5,220 | |||
International | 1,133 | 1,017 | 1,977 | 1,950 | |||
Total | 5,732 | 4,995 | 7,771 | 7,170 | |||
Crop nutrients selling price per tonne | |||||||
North America | 735 | 940 | 736 | 923 | |||
International | 536 | 795 | 535 | 676 | |||
Total | 695 | 911 | 685 | 856 | |||
Crop nutrients gross margin per tonne | |||||||
North America | 131 | 202 | 123 | 198 | |||
International | 26 | 105 | 29 | 86 | |||
Total | 110 | 182 | 99 | 168 | |||
Financial performance measures | 2023 | 2022 | |
Retail adjusted EBITDA margin (%) 1, 2 | 8 | 12 | |
Retail adjusted EBITDA per US selling location (thousands of US dollars) 1, 2, 3 | 1,516 | 1,897 | |
Retail adjusted average working capital to sales (%) 1, 4 | 20 | 15 | |
Retail adjusted average working capital to sales excluding Nutrien Financial (%) 1, 4 | 3 | 1 | |
Nutrien Financial adjusted net interest margin (%) 1, 4 | 6.6 | 7.0 | |
Retail cash operating coverage ratio (%) 1, 4 | 64 | 54 | |
1 Rolling four quarters ended June 30, 2023 and 2022. | |||
2 These are supplementary financial measures. See the "Other Financial Measures" section. | |||
3 Excluding acquisitions. | |||
4 These are non-IFRS financial measures. See the "Non-IFRS Financial Measures" section. | |||
Nutrien Financial | As at June 30, 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 | 3,648 | 194 | 54 | 109 | 4,005 | (43) | 3,962 | 2,007 |
International | 644 | 53 | 20 | 47 | 764 | (10) | 754 | 662 |
Nutrien Financial receivables | 4,292 | 247 | 74 | 156 | 4,769 | (53) | 4,716 | 2,669 |
1 Bad debt expense on the above receivables for the six months ended June 30, 2023 was $30 million (2022 – $8 million) in the Retail segment. | ||||||||
Selected Nitrogen Measures | Three Months Ended June 30 | Six Months Ended June 30 | |||||
2023 | 2022 | 2023 | 2022 | ||||
Sales volumes (tonnes – thousands) | |||||||
Fertilizer 1 | 1,866 | 1,537 | 3,114 | 2,690 | |||
Industrial and feed | 1,079 | 1,142 | 2,188 | 2,314 | |||
Net sales (millions of US dollars) | |||||||
Fertilizer 1 | 826 | 1,197 | 1,507 | 2,023 | |||
Industrial and feed | 289 | 760 | 787 | 1,448 | |||
Net selling price per tonne | |||||||
Fertilizer 1 | 443 | 777 | 484 | 751 | |||
Industrial and feed | 267 | 666 | 360 | 626 | |||
1 Certain immaterial 2022 figures have been reclassified. | |||||||
Production Measures | Three Months Ended June 30 | Six Months Ended June 30 | |||||
2023 | 2022 | 2023 | 2022 | ||||
Potash production (Product tonnes – thousands) | 3,237 | 3,621 | 6,325 | 7,324 | |||
Potash shutdown weeks 1 | 1 | 5 | 5 | 5 | |||
Ammonia production – total 2 | 1,249 | 1,473 | 2,680 | 2,876 | |||
Ammonia production – adjusted 2, 3 | 931 | 1,048 | 1,968 | 2,006 | |||
Ammonia operating rate (%) 3 | 85 | 96 | 90 | 92 | |||
P 2 O 5 production (P 2 O 5 tonnes – thousands) | 331 | 350 | 672 | 728 | |||
P 2 O 5 operating rate (%) | 78 | 82 | 80 | 86 | |||
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-IFRS Financial Measures
We use both IFRS measures and certain non-IFRS financial measures to assess performance. Non-IFRS 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-IFRS 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-IFRS financial measure as one or more of its components, and that are not disclosed in the financial statements of the Company.
These non-IFRS financial measures and non-IFRS 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-IFRS financial measures and non-IFRS 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-IFRS financial measures and non-IFRS 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-IFRS financial measures and non-IFRS 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-IFRS financial measures and non-IFRS 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 June 30 | Six Months Ended June 30 | ||||||
(millions of US dollars) | 2023 | 2022 | 2023 | 2022 | |||
Net earnings | 448 | 3,601 | 1,024 | 4,986 | |||
Finance costs | 204 | 130 | 374 | 239 | |||
Income tax expense | 476 | 1,214 | 669 | 1,719 | |||
Depreciation and amortization | 556 | 505 | 1,052 | 966 | |||
EBITDA 1 | 1,684 | 5,450 | 3,119 | 7,910 | |||
Share-based compensation (recovery) expense | (64) | (52) | (49) | 83 | |||
Foreign exchange loss, net of related derivatives | 52 | 31 | 18 | 56 | |||
Integration and restructuring related costs | 10 | 11 | 15 | 20 | |||
Impairment (reversal of impairment) of assets | 698 | (450) | 698 | (450) | |||
COVID-19 related expenses 2 | ‐ | 3 | ‐ | 8 | |||
Gain on disposal of investment | ‐ | ‐ | ‐ | (19) | |||
ARO/ERL expense for non-operating sites 3 | 6 | ‐ | 6 | ‐ | |||
Loss on Blue Chip Swaps | 92 | ‐ | 92 | ‐ | |||
Adjusted EBITDA | 2,478 | 4,993 | 3,899 | 7,608 | |||
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. | |||||||
3 ARO/ERL refers to asset retirement obligations and accrued environmental costs. | |||||||
Adjusted Net Earnings and Adjusted Net Earnings Per Share
Most directly comparable IFRS financial measure: Net earnings (loss) and 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) and change in recognition of tax losses and deductible temporary differences related to impairments. 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 and the change in recognition of Retail – South America tax losses and deductible temporary differences. 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. If the effective tax rate is significantly different from our forecasted effective tax rate due to adjustments or discrete tax impacts, we apply a tax rate that excludes those items. For material adjustments, we apply a tax rate specific to the 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 June 30, 2023 | Six Months Ended June 30, 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 | 440 | 0.89 | 1,011 | 2.03 | |||||||||||||
Adjustments: | |||||||||||||||||
Share-based compensation recovery | (64 | ) | (49 | ) | (0.11 | ) | (49 | ) | (37 | ) | (0.08 | ) | |||||
Foreign exchange loss, net of related derivatives | 52 | 40 | 0.08 | 18 | 14 | 0.02 | |||||||||||
Integration and restructuring related costs | 10 | 8 | 0.02 | 15 | 11 | 0.02 | |||||||||||
Impairment of assets | 698 | 653 | 1.32 | 698 | 653 | 1.32 | |||||||||||
ARO/ERL expense for non-operating sites 1 | 6 | 5 | 0.01 | 6 | 5 | 0.01 | |||||||||||
Loss on Blue Chip Swaps | 92 | 92 | 0.19 | 92 | 92 | 0.18 | |||||||||||
Change in recognition of deferred tax assets | 66 | 66 | 0.13 | 66 | 66 | 0.13 | |||||||||||
Adjusted net earnings | 1,255 | 2.53 | 1,815 | 3.63 | |||||||||||||
1 ARO/ERL refers to asset retirement obligations and accrued environmental costs. | |||||||||||||||||
Three Months Ended June 30, 2022 | Six Months Ended June 30, 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 | 3,593 | 6.51 | 4,971 | 8.99 | |||||||||||||
Adjustments: | |||||||||||||||||
Share-based compensation (recovery) expense | (52 | ) | (39 | ) | (0.07 | ) | 83 | 62 | 0.11 | ||||||||
Foreign exchange loss, net of related derivatives | 31 | 23 | 0.04 | 56 | 42 | 0.07 | |||||||||||
Integration and restructuring related costs | 11 | 8 | 0.01 | 20 | 15 | 0.02 | |||||||||||
Reversal of impairment of assets | (450 | ) | (354 | ) | (0.64 | ) | (450 | ) | (354 | ) | (0.64 | ) | |||||
COVID-19 related expenses | 3 | 2 | ‐ | 8 | 6 | 0.01 | |||||||||||
Gain on disposal of investment | ‐ | ‐ | ‐ | (19 | ) | (14 | ) | (0.03 | ) | ||||||||
Adjusted net earnings | 3,233 | 5.85 | 4,728 | 8.53 | |||||||||||||
Adjusted EBITDA (Consolidated) and Adjusted Net Earnings Per Share Guidance
Adjusted EBITDA and adjusted net earnings per share guidance are forward-looking non-IFRS financial measures. We do not provide a reconciliation of such forward-looking measures to the most directly comparable financial measures calculated and presented in accordance with IFRS because a meaningful or accurate calculation of reconciling items and the information is not available without unreasonable effort due to unknown variables, including the timing and amount of certain reconciling items, and the uncertainty related to future results. These unknown variables may include unpredictable transactions of significant value that may be inherently difficult to determine without unreasonable efforts. The probable significance of such unavailable information, which could be material to future results, cannot be addressed. Guidance for adjusted EBITDA and adjusted net earnings per share excludes certain items such as, but not limited to, the impacts of share-based compensation, certain foreign exchange gain/loss (net of related derivatives), 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) and the change in recognition of Retail – South America tax losses and deductible temporary differences.
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. 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 June 30 | Six Months Ended June 30 | ||||||||||
(millions of US dollars, except as otherwise noted) | 2023 | 2022 | 2023 | 2022 | |||||||
Total COGS – Potash | 353 | 399 | 658 | 704 | |||||||
Change in inventory | (14 | ) | (5 | ) | 26 | 72 | |||||
Other adjustments 1 | (9 | ) | (9 | ) | (17 | ) | (24 | ) | |||
COPM | 330 | 385 | 667 | 752 | |||||||
Depreciation and amortization in COPM | (101 | ) | (114 | ) | (201 | ) | (233 | ) | |||
Royalties in COPM | (26 | ) | (63 | ) | (57 | ) | (108 | ) | |||
Natural gas costs and carbon taxes in COPM | (9 | ) | (19 | ) | (25 | ) | (36 | ) | |||
Controllable cash COPM | 194 | 189 | 384 | 375 | |||||||
Production tonnes (tonnes – thousands) | 3,237 | 3,621 | 6,325 | 7,324 | |||||||
Potash controllable cash COPM per tonne | 60 | 52 | 61 | 51 | |||||||
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 June 30 | Six Months Ended June 30 | ||||||||||
(millions of US dollars, except as otherwise noted) | 2023 | 2022 | 2023 | 2022 | |||||||
Total Manufactured COGS – Nitrogen 1 | 697 | 911 | 1,345 | 1,583 | |||||||
Total Other COGS – Nitrogen 1 | 120 | 260 | 243 | 469 | |||||||
Total COGS – Nitrogen | 817 | 1,171 | 1,588 | 2,052 | |||||||
Depreciation and amortization in COGS | (139 | ) | (115 | ) | (247 | ) | (217 | ) | |||
Cash COGS for products other than ammonia | (513 | ) | (748 | ) | (984 | ) | (1,272 | ) | |||
Ammonia | |||||||||||
Total cash COGS before other adjustments | 165 | 308 | 357 | 563 | |||||||
Other adjustments 2 | (66 | ) | (78 | ) | (134 | ) | (114 | ) | |||
Total cash COPM | 99 | 230 | 223 | 449 | |||||||
Natural gas and steam costs in COPM | (73 | ) | (195 | ) | (158 | ) | (376 | ) | |||
Controllable cash COPM | 26 | 35 | 65 | 73 | |||||||
Production tonnes (net tonnes 3 – thousands) | 474 | 606 | 1,102 | 1,280 | |||||||
Ammonia controllable cash COPM per tonne | 55 | 58 | 59 | 57 | |||||||
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 June 30, 2023 | |||||||||||||
(millions of US dollars, except as otherwise noted) | Q3 2022 | Q4 2022 | Q1 2023 | Q2 2023 | Average/Total | ||||||||
Current assets | 11,262 | 11,668 | 13,000 | 11,983 | |||||||||
Current liabilities | (5,889 | ) | (8,708 | ) | (8,980 | ) | (8,246 | ) | |||||
Working capital | 5,373 | 2,960 | 4,020 | 3,737 | 4,023 | ||||||||
Working capital from certain recent acquisitions | ‐ | ‐ | ‐ | ‐ | |||||||||
Adjusted working capital | 5,373 | 2,960 | 4,020 | 3,737 | 4,023 | ||||||||
Nutrien Financial working capital | (3,898 | ) | (2,669 | ) | (2,283 | ) | (4,716 | ) | |||||
Adjusted working capital excluding Nutrien Financial | 1,475 | 291 | 1,737 | (979 | ) | 631 | |||||||
Sales | 3,980 | 4,087 | 3,422 | 9,128 | |||||||||
Sales from certain recent acquisitions | ‐ | ‐ | ‐ | ‐ | |||||||||
Adjusted sales | 3,980 | 4,087 | 3,422 | 9,128 | 20,617 | ||||||||
Nutrien Financial revenue | (65 | ) | (62 | ) | (57 | ) | (122 | ) | |||||
Adjusted sales excluding Nutrien Financial | 3,915 | 4,025 | 3,365 | 9,006 | 20,311 | ||||||||
Adjusted average working capital to sales (%) | 20 | ||||||||||||
Adjusted average working capital to sales excluding Nutrien Financial (%) | 3 | ||||||||||||
Rolling four quarters ended June 30, 2022 | |||||||||||||
(millions of US dollars, except as otherwise noted) | Q3 2021 | Q4 2021 | Q1 2022 | Q2 2022 | Average/Total | ||||||||
Current assets | 8,945 | 9,924 | 12,392 | 12,487 | |||||||||
Current liabilities | (5,062 | ) | (7,828 | ) | (9,223 | ) | (9,177 | ) | |||||
Working capital | 3,883 | 2,096 | 3,169 | 3,310 | 3,115 | ||||||||
Working capital from certain recent acquisitions | ‐ | ‐ | ‐ | ‐ | |||||||||
Adjusted working capital | 3,883 | 2,096 | 3,169 | 3,310 | 3,115 | ||||||||
Nutrien Financial working capital | (2,820 | ) | (2,150 | ) | (2,274 | ) | (4,404 | ) | |||||
Adjusted working capital excluding Nutrien Financial | 1,063 | (54 | ) | 895 | (1,094 | ) | 203 | ||||||
Sales | 3,347 | 3,878 | 3,861 | 9,422 | |||||||||
Sales from certain recent acquisitions | ‐ | ‐ | ‐ | ‐ | |||||||||
Adjusted sales | 3,347 | 3,878 | 3,861 | 9,422 | 20,508 | ||||||||
Nutrien Financial revenue | (54 | ) | (51 | ) | (49 | ) | (91 | ) | |||||
Adjusted sales excluding Nutrien Financial | 3,293 | 3,827 | 3,812 | 9,331 | 20,263 | ||||||||
Adjusted average working capital to sales (%) | 15 | ||||||||||||
Adjusted average working capital to sales excluding Nutrien Financial (%) | 1 | ||||||||||||
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 other users to evaluate the financial performance of Nutrien Financial.
Rolling four quarters ended June 30, 2023 | |||||||||||||
(millions of US dollars, except as otherwise noted) | Q3 2022 | Q4 2022 | Q1 2023 | Q2 2023 | Total/Average | ||||||||
Nutrien Financial revenue | 65 | 62 | 57 | 122 | |||||||||
Deemed interest expense 1 | (12 | ) | (11 | ) | (20 | ) | (39 | ) | |||||
Net interest | 53 | 51 | 37 | 83 | 224 | ||||||||
Average Nutrien Financial net receivables | 3,898 | 2,669 | 2,283 | 4,716 | 3,392 | ||||||||
Nutrien Financial adjusted net interest margin (%) | 6.6 | ||||||||||||
Rolling four quarters ended June 30, 2022 | |||||||||||||
(millions of US dollars, except as otherwise noted) | Q3 2021 | Q4 2021 | Q1 2022 | Q2 2022 | Total/Average | ||||||||
Nutrien Financial revenue | 54 | 51 | 49 | 91 | |||||||||
Deemed interest expense 1 | (10 | ) | (12 | ) | (6 | ) | (12 | ) | |||||
Net interest | 44 | 39 | 43 | 79 | 205 | ||||||||
Average Nutrien Financial net receivables | 2,820 | 2,150 | 2,274 | 4,404 | 2,912 | ||||||||
Nutrien Financial adjusted net interest margin (%) | 7.0 | ||||||||||||
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 June 30, 2023 | ||||||||||||||
(millions of US dollars, except as otherwise noted) | Q3 2022 | Q4 2022 | Q1 2023 | Q2 2023 | Total | |||||||||
Selling expenses | 821 | 836 | 765 | 971 | 3,393 | |||||||||
General and administrative expenses | 50 | 51 | 50 | 55 | 206 | |||||||||
Other expenses | 19 | 1 | 15 | 29 | 64 | |||||||||
Operating expenses | 890 | 888 | 830 | 1,055 | 3,663 | |||||||||
Depreciation and amortization in operating expenses | (204 | ) | (198 | ) | (179 | ) | (185 | ) | (766 | ) | ||||
Operating expenses excluding depreciation and amortization | 686 | 690 | 651 | 870 | 2,897 | |||||||||
Gross margin | 917 | 1,077 | 615 | 1,931 | 4,540 | |||||||||
Depreciation and amortization in cost of goods sold | 2 | 4 | 2 | 3 | 11 | |||||||||
Gross margin excluding depreciation and amortization | 919 | 1,081 | 617 | 1,934 | 4,551 | |||||||||
Cash operating coverage ratio (%) | 64 | |||||||||||||
Rolling four quarters ended June 30, 2022 | ||||||||||||||
(millions of US dollars, except as otherwise noted) | Q3 2021 | Q4 2021 | Q1 2022 | Q2 2022 | Total | |||||||||
Selling expenses | 746 | 848 | 722 | 1,013 | 3,329 | |||||||||
General and administrative expenses | 45 | 43 | 45 | 54 | 187 | |||||||||
Other expenses (income) | 17 | 20 | (12 | ) | 21 | 46 | ||||||||
Operating expenses | 808 | 911 | 755 | 1,088 | 3,562 | |||||||||
Depreciation and amortization in operating expenses | (180 | ) | (173 | ) | (167 | ) | (171 | ) | (691 | ) | ||||
Operating expenses excluding depreciation and amortization | 628 | 738 | 588 | 917 | 2,871 | |||||||||
Gross margin | 917 | 1,173 | 845 | 2,340 | 5,275 | |||||||||
Depreciation and amortization in cost of goods sold | 2 | 5 | 2 | 4 | 13 | |||||||||
Gross margin excluding depreciation and amortization | 919 | 1,178 | 847 | 2,344 | 5,288 | |||||||||
Cash operating coverage ratio (%) | 54 | |||||||||||||
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-IFRS financial measures, and (d) are not non-IFRS 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.
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 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 | Six Months Ended | |||||||||||
June 30 | June 30 | |||||||||||
Note | 2023 | 2022 | 2023 | 2022 | ||||||||
SALES | 2 | 11,654 | 14,506 | 17,761 | 22,163 | |||||||
Freight, transportation and distribution | 252 | 221 | 451 | 424 | ||||||||
Cost of goods sold | 8,236 | 8,286 | 12,231 | 12,483 | ||||||||
GROSS MARGIN | 3,166 | 5,999 | 5,079 | 9,256 | ||||||||
Selling expenses | 979 | 1,017 | 1,749 | 1,744 | ||||||||
General and administrative expenses | 157 | 140 | 302 | 266 | ||||||||
Provincial mining taxes | 104 | 362 | 223 | 611 | ||||||||
Share-based compensation (recovery) expense | (64 | ) | (52 | ) | (49 | ) | 83 | |||||
Impairment (reversal of impairment) of assets | 3 | 698 | (450 | ) | 698 | (450 | ) | |||||
Other expenses | 4 | 164 | 37 | 89 | 58 | |||||||
EARNINGS BEFORE FINANCE COSTS AND INCOME TAXES | 1,128 | 4,945 | 2,067 | 6,944 | ||||||||
Finance costs | 204 | 130 | 374 | 239 | ||||||||
EARNINGS BEFORE INCOME TAXES | 924 | 4,815 | 1,693 | 6,705 | ||||||||
Income tax expense | 5 | 476 | 1,214 | 669 | 1,719 | |||||||
NET EARNINGS | 448 | 3,601 | 1,024 | 4,986 | ||||||||
Attributable to | ||||||||||||
Equity holders of Nutrien | 440 | 3,593 | 1,011 | 4,971 | ||||||||
Non-controlling interest | 8 | 8 | 13 | 15 | ||||||||
NET EARNINGS | 448 | 3,601 | 1,024 | 4,986 | ||||||||
NET EARNINGS PER SHARE ATTRIBUTABLE TO EQUITY HOLDERS OF NUTRIEN ("EPS") | ||||||||||||
Basic | 0.89 | 6.53 | 2.03 | 9.02 | ||||||||
Diluted | 0.89 | 6.51 | 2.03 | 8.99 | ||||||||
Weighted average shares outstanding for basic EPS | 495,379,000 | 550,048,000 | 498,261,000 | 551,335,000 | ||||||||
Weighted average shares outstanding for diluted EPS | 495,932,000 | 551,659,000 | 499,059,000 | 553,198,000 | ||||||||
Condensed Consolidated Statements of Comprehensive Income
Three Months Ended | Six Months Ended | |||||||||
June 30 | June 30 | |||||||||
(Net of related income taxes) | 2023 | 2022 | 2023 | 2022 | ||||||
NET EARNINGS | 448 | 3,601 | 1,024 | 4,986 | ||||||
Other comprehensive income (loss) | ||||||||||
Items that will not be reclassified to net earnings: | ||||||||||
Net actuarial (loss) gain on defined benefit plans | ‐ | ‐ | (3 | ) | 1 | |||||
Net fair value gain (loss) on investments | 6 | (38 | ) | 11 | (7 | ) | ||||
Items that have been or may be subsequently reclassified to net earnings: | ||||||||||
Gain (loss) on currency translation of foreign operations | 49 | (209 | ) | 50 | (81 | ) | ||||
Other | 13 | 5 | 12 | 21 | ||||||
OTHER COMPREHENSIVE INCOME (LOSS) | 68 | (242 | ) | 70 | (66 | ) | ||||
COMPREHENSIVE INCOME | 516 | 3,359 | 1,094 | 4,920 | ||||||
Attributable to | ||||||||||
Equity holders of Nutrien | 508 | 3,352 | 1,081 | 4,906 | ||||||
Non-controlling interest | 8 | 7 | 13 | 14 | ||||||
COMPREHENSIVE INCOME | 516 | 3,359 | 1,094 | 4,920 | ||||||
(See Notes to the Condensed Consolidated Financial Statements) | ||||||||||
Condensed Consolidated Statements of Cash Flows
Three Months Ended | Six Months Ended | |||||||||||
June 30 | June 30 | |||||||||||
Note | 2023 | 2022 | 2023 | 2022 | ||||||||
Note 1 | Note 1 | |||||||||||
OPERATING ACTIVITIES | ||||||||||||
Net earnings | 448 | 3,601 | 1,024 | 4,986 | ||||||||
Adjustments for: | ||||||||||||
Depreciation and amortization | 556 | 505 | 1,052 | 966 | ||||||||
Share-based compensation (recovery) expense | (64 | ) | (52 | ) | (49 | ) | 83 | |||||
Impairment (reversal of impairment) of assets | 3 | 698 | (450 | ) | 698 | (450 | ) | |||||
Provision for (recovery of) deferred income tax | 100 | (53 | ) | 121 | (8 | ) | ||||||
Net (undistributed) distributed earnings of equity-accounted investees | (23 | ) | (19 | ) | 140 | (58 | ) | |||||
Gain on amendments to other post-retirement pension plans | ‐ | ‐ | (80 | ) | ‐ | |||||||
Loss on Blue Chip Swaps | 4 | 92 | ‐ | 92 | ‐ | |||||||
Long-term income tax receivables and payables | (18 | ) | 120 | (90 | ) | 130 | ||||||
Other long-term assets, liabilities and miscellaneous | 91 | 17 | 98 | 28 | ||||||||
Cash from operations before working capital changes | 1,880 | 3,669 | 3,006 | 5,677 | ||||||||
Changes in non-cash operating working capital: | ||||||||||||
Receivables | (2,653 | ) | (3,933 | ) | (2,118 | ) | (4,842 | ) | ||||
Inventories | 3,728 | 1,748 | 1,560 | (861 | ) | |||||||
Prepaid expenses and other current assets | 337 | 340 | 1,012 | 1,062 | ||||||||
Payables and accrued charges | (1,049 | ) | 734 | (2,075 | ) | 1,460 | ||||||
CASH PROVIDED BY OPERATING ACTIVITIES | 2,243 | 2,558 | 1,385 | 2,496 | ||||||||
INVESTING ACTIVITIES | ||||||||||||
Capital expenditures 1 | (775 | ) | (477 | ) | (1,225 | ) | (828 | ) | ||||
Business acquisitions, net of cash acquired | (5 | ) | (27 | ) | (116 | ) | (68 | ) | ||||
Proceeds from sales of Blue Chip Swaps, net of purchases | (92 | ) | ‐ | (92 | ) | ‐ | ||||||
Net changes in non-cash working capital | (4 | ) | (9 | ) | (104 | ) | (108 | ) | ||||
Other | 18 | (4 | ) | (15 | ) | 30 | ||||||
CASH USED IN INVESTING ACTIVITIES | (858 | ) | (517 | ) | (1,552 | ) | (974 | ) | ||||
FINANCING ACTIVITIES | ||||||||||||
(Repayment of) proceeds from short-term debt, net | 7 | (1,105 | ) | (604 | ) | 768 | 850 | |||||
Proceeds from long-term debt | 8 | ‐ | 41 | 1,500 | 41 | |||||||
Repayment of long-term debt | 8 | (500 | ) | (26 | ) | (517 | ) | (28 | ) | |||
Repayment of principal portion of lease liabilities | (100 | ) | (94 | ) | (187 | ) | (173 | ) | ||||
Dividends paid to Nutrien's shareholders | 9 | (263 | ) | (264 | ) | (509 | ) | (521 | ) | |||
Repurchase of common shares | 9 | (150 | ) | (964 | ) | (1,047 | ) | (1,606 | ) | |||
Issuance of common shares | 3 | 38 | 31 | 164 | ||||||||
Other | (9 | ) | (5 | ) | (34 | ) | (17 | ) | ||||
CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES | (2,124 | ) | (1,878 | ) | 5 | (1,290 | ) | |||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 3 | (29 | ) | (2 | ) | (20 | ) | |||||
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (736 | ) | 134 | (164 | ) | 212 | ||||||
CASH AND CASH EQUIVALENTS – BEGINNING OF PERIOD | 1,473 | 577 | 901 | 499 | ||||||||
CASH AND CASH EQUIVALENTS – END OF PERIOD | 737 | 711 | 737 | 711 | ||||||||
Cash and cash equivalents is composed of: | ||||||||||||
Cash | 724 | 628 | 724 | 628 | ||||||||
Short-term investments | 13 | 83 | 13 | 83 | ||||||||
737 | 711 | 737 | 711 | |||||||||
SUPPLEMENTAL CASH FLOWS INFORMATION | ||||||||||||
Interest paid | 227 | 150 | 325 | 200 | ||||||||
Income taxes paid | 270 | 396 | 1,589 | 1,185 | ||||||||
Total cash outflow for leases | 129 | 121 | 248 | 228 | ||||||||
1 Includes additions to property, plant and equipment, and intangible assets for the three months ended June 30, 2023 of $721 and $54 (2022 – $427 and $50), respectively, and for the six months ended June 30, 2023 of $1,132 and $93 (2022 – $733 and $95), 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 | ‐ | ‐ | ‐ | ‐ | ‐ | ‐ | 4,971 | 4,971 | 15 | 4,986 | |||||||||||||||||||
Other comprehensive (loss) income | ‐ | ‐ | ‐ | (80 | ) | 15 | (65 | ) | ‐ | (65 | ) | (1 | ) | (66 | ) | ||||||||||||||
Shares repurchased (Note 9) | (19,360,408 | ) | (539 | ) | (22 | ) | ‐ | ‐ | ‐ | (1,075 | ) | (1,636 | ) | ‐ | (1,636 | ) | |||||||||||||
Dividends declared (Note 9) | ‐ | ‐ | ‐ | ‐ | ‐ | ‐ | (526 | ) | (526 | ) | ‐ | (526 | ) | ||||||||||||||||
Non-controlling interest transactions | ‐ | ‐ | ‐ | ‐ | ‐ | ‐ | ‐ | ‐ | (17 | ) | (17 | ) | |||||||||||||||||
Effect of share-based compensation including issuance of common shares | 2,994,221 | 197 | (22 | ) | ‐ | ‐ | ‐ | ‐ | 175 | ‐ | 175 | ||||||||||||||||||
Transfer of net gain on cash flow hedges | ‐ | ‐ | ‐ | ‐ | (2 | ) | (2 | ) | ‐ | (2 | ) | ‐ | (2 | ) | |||||||||||||||
Transfer of net actuarial gain on defined benefit plans | ‐ | ‐ | ‐ | ‐ | (1 | ) | (1 | ) | 1 | ‐ | ‐ | ‐ | |||||||||||||||||
BALANCE – JUNE 30, 2022 | 541,126,329 | 15,115 | 105 | (256 | ) | 42 | (214 | ) | 11,563 | 26,569 | 44 | 26,613 | |||||||||||||||||
BALANCE – DECEMBER 31, 2022 | 507,246,105 | 14,172 | 109 | (374 | ) | (17 | ) | (391 | ) | 11,928 | 25,818 | 45 | 25,863 | ||||||||||||||||
Net earnings | ‐ | ‐ | ‐ | ‐ | ‐ | ‐ | 1,011 | 1,011 | 13 | 1,024 | |||||||||||||||||||
Other comprehensive income | ‐ | ‐ | ‐ | 50 | 20 | 70 | ‐ | 70 | ‐ | 70 | |||||||||||||||||||
Shares repurchased (Note 9) | (13,378,189 | ) | (374 | ) | (26 | ) | ‐ | ‐ | ‐ | (600 | ) | (1,000 | ) | ‐ | (1,000 | ) | |||||||||||||
Dividends declared (Note 9) | ‐ | ‐ | ‐ | ‐ | ‐ | ‐ | (527 | ) | (527 | ) | ‐ | (527 | ) | ||||||||||||||||
Non-controlling interest transactions | ‐ | ‐ | ‐ | ‐ | ‐ | ‐ | ‐ | ‐ | (13 | ) | (13 | ) | |||||||||||||||||
Effect of share-based compensation including issuance of common shares | 628,402 | 37 | (3 | ) | ‐ | ‐ | ‐ | ‐ | 34 | ‐ | 34 | ||||||||||||||||||
Transfer of net gain on sale of investment | ‐ | ‐ | ‐ | ‐ | (14 | ) | (14 | ) | 14 | ‐ | ‐ | ‐ | |||||||||||||||||
Transfer of net loss on cash flow hedges | ‐ | ‐ | ‐ | ‐ | 9 | 9 | ‐ | 9 | ‐ | 9 | |||||||||||||||||||
Transfer of net actuarial loss on defined benefit plans | ‐ | ‐ | ‐ | ‐ | 3 | 3 | (3 | ) | ‐ | ‐ | ‐ | ||||||||||||||||||
Other | ‐ | ‐ | ‐ | (2 | ) | ‐ | (2 | ) | ‐ | (2 | ) | ‐ | (2 | ) | |||||||||||||||
BALANCE – JUNE 30, 2023 | 494,496,318 | 13,835 | 80 | (326 | ) | 1 | (325 | ) | 11,823 | 25,413 | 45 | 25,458 | |||||||||||||||||
(See Notes to the Condensed Consolidated Financial Statements) | |||||||||||||||||||||||||||||
Condensed Consolidated Balance Sheets
June 30 | December 31 | ||||||||
As at | Note | 2023 | 2022 | 2022 | |||||
ASSETS | |||||||||
Current assets | |||||||||
Cash and cash equivalents | 737 | 711 | 901 | ||||||
Receivables | 8,595 | 10,171 | 6,194 | ||||||
Inventories | 6,062 | 7,160 | 7,632 | ||||||
Prepaid expenses and other current assets | 602 | 615 | 1,615 | ||||||
15,996 | 18,657 | 16,342 | |||||||
Non-current assets | |||||||||
Property, plant and equipment | 3 | 21,920 | 20,492 | 21,767 | |||||
Goodwill | 3 | 12,077 | 12,213 | 12,368 | |||||
Intangible assets | 3 | 2,252 | 2,283 | 2,297 | |||||
Investments | 708 | 731 | 843 | ||||||
Other assets | 973 | 859 | 969 | ||||||
TOTAL ASSETS | 53,926 | 55,235 | 54,586 | ||||||
LIABILITIES | |||||||||
Current liabilities | |||||||||
Short-term debt | 7 | 2,922 | 2,403 | 2,142 | |||||
Current portion of long-term debt | 8 | 44 | 1,028 | 542 | |||||
Current portion of lease liabilities | 301 | 303 | 305 | ||||||
Payables and accrued charges | 9,470 | 11,682 | 11,291 | ||||||
12,737 | 15,416 | 14,280 | |||||||
Non-current liabilities | |||||||||
Long-term debt | 8 | 9,498 | 7,056 | 8,040 | |||||
Lease liabilities | 861 | 913 | 899 | ||||||
Deferred income tax liabilities | 5 | 3,584 | 3,253 | 3,547 | |||||
Pension and other post-retirement benefit liabilities | 245 | 422 | 319 | ||||||
Asset retirement obligations and accrued environmental costs | 1,379 | 1,376 | 1,403 | ||||||
Other non-current liabilities | 164 | 186 | 235 | ||||||
TOTAL LIABILITIES | 28,468 | 28,622 | 28,723 | ||||||
SHAREHOLDERS' EQUITY | |||||||||
Share capital | 9 | 13,835 | 15,115 | 14,172 | |||||
Contributed surplus | 80 | 105 | 109 | ||||||
Accumulated other comprehensive loss | (325 | ) | (214 | ) | (391 | ) | |||
Retained earnings | 11,823 | 11,563 | 11,928 | ||||||
Equity holders of Nutrien | 25,413 | 26,569 | 25,818 | ||||||
Non-controlling interest | 45 | 44 | 45 | ||||||
TOTAL SHAREHOLDERS' EQUITY | 25,458 | 26,613 | 25,863 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 53,926 | 55,235 | 54,586 | ||||||
(See Notes to the Condensed Consolidated Financial Statements) | |||||||||
Notes to the Condensed Consolidated Financial Statements
As at and for the Three and Six Months Ended June 30, 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.
In management's opinion, the interim financial statements include all adjustments necessary to fairly present such information in all material respects. Interim results are not necessarily indicative of the results expected for any other interim period or the fiscal year.
These interim financial statements were authorized by the Audit Committee of the Board of Directors for issue on August 2, 2023.
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, and it 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 June 30, 2023 | |||||||||||||||||||
Corporate | |||||||||||||||||||
Retail | Potash | Nitrogen | Phosphate | and Others | Eliminations | Consolidated | |||||||||||||
Sales | – third party | 9,127 | 976 | 1,065 | 486 | ‐ | ‐ | 11,654 | |||||||||||
– intersegment | 1 | 140 | 306 | 74 | ‐ | (521 | ) | ‐ | |||||||||||
Sales | – total | 9,128 | 1,116 | 1,371 | 560 | ‐ | (521 | ) | 11,654 | ||||||||||
Freight, transportation and distribution | ‐ | 107 | 155 | 58 | ‐ | (68 | ) | 252 | |||||||||||
Net sales | 9,128 | 1,009 | 1,216 | 502 | ‐ | (453 | ) | 11,402 | |||||||||||
Cost of goods sold | 7,197 | 353 | 817 | 453 | ‐ | (584 | ) | 8,236 | |||||||||||
Gross margin | 1,931 | 656 | 399 | 49 | ‐ | 131 | 3,166 | ||||||||||||
Selling expenses | 971 | 3 | 7 | 2 | (2 | ) | (2 | ) | 979 | ||||||||||
General and administrative expenses | 55 | 5 | 5 | 4 | 88 | ‐ | 157 | ||||||||||||
Provincial mining taxes | ‐ | 104 | ‐ | ‐ | ‐ | ‐ | 104 | ||||||||||||
Share-based compensation recovery | ‐ | ‐ | ‐ | ‐ | (64 | ) | ‐ | (64 | ) | ||||||||||
Impairment of assets | 465 | ‐ | ‐ | 233 | ‐ | ‐ | 698 | ||||||||||||
Other expenses (income) | 29 | 5 | (20 | ) | 1 | 151 | (2 | ) | 164 | ||||||||||
Earnings (loss) before finance costs and income taxes | 411 | 539 | 407 | (191 | ) | (173 | ) | 135 | 1,128 | ||||||||||
Depreciation and amortization | 188 | 115 | 162 | 71 | 20 | ‐ | 556 | ||||||||||||
EBITDA 1 | 599 | 654 | 569 | (120 | ) | (153 | ) | 135 | 1,684 | ||||||||||
Integration and restructuring related costs | 3 | ‐ | ‐ | ‐ | 7 | ‐ | 10 | ||||||||||||
Share-based compensation recovery | ‐ | ‐ | ‐ | ‐ | (64 | ) | ‐ | (64 | ) | ||||||||||
Impairment of assets | 465 | ‐ | ‐ | 233 | ‐ | ‐ | 698 | ||||||||||||
ARO/ERL expense for non-operating sites 2 | ‐ | ‐ | ‐ | ‐ | 6 | ‐ | 6 | ||||||||||||
Foreign exchange loss, net of related derivatives | ‐ | ‐ | ‐ | ‐ | 52 | ‐ | 52 | ||||||||||||
Loss on Blue Chip Swaps | ‐ | ‐ | ‐ | ‐ | 92 | ‐ | 92 | ||||||||||||
Adjusted EBITDA | 1,067 | 654 | 569 | 113 | (60 | ) | 135 | 2,478 | |||||||||||
Assets – at June 30, 2023 | 24,465 | 13,629 | 11,474 | 2,429 | 2,692 | (763 | ) | 53,926 | |||||||||||
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 June 30, 2022 | |||||||||||||||||||
Corporate | |||||||||||||||||||
Retail | Potash | Nitrogen | Phosphate | and Others | Eliminations | Consolidated | |||||||||||||
Sales | – third party | 9,377 | 2,667 | 1,915 | 547 | ‐ | ‐ | 14,506 | |||||||||||
– intersegment | 45 | 78 | 446 | 98 | ‐ | (667 | ) | ‐ | |||||||||||
Sales | – total | 9,422 | 2,745 | 2,361 | 645 | ‐ | (667 | ) | 14,506 | ||||||||||
Freight, transportation and distribution | ‐ | 77 | 132 | 55 | ‐ | (43 | ) | 221 | |||||||||||
Net sales | 9,422 | 2,668 | 2,229 | 590 | ‐ | (624 | ) | 14,285 | |||||||||||
Cost of goods sold | 7,082 | 399 | 1,171 | 434 | ‐ | (800 | ) | 8,286 | |||||||||||
Gross margin | 2,340 | 2,269 | 1,058 | 156 | ‐ | 176 | 5,999 | ||||||||||||
Selling expenses | 1,013 | 3 | 7 | 2 | (2 | ) | (6 | ) | 1,017 | ||||||||||
General and administrative expenses | 54 | 2 | 4 | 3 | 77 | ‐ | 140 | ||||||||||||
Provincial mining taxes | ‐ | 362 | ‐ | ‐ | ‐ | ‐ | 362 | ||||||||||||
Share-based compensation recovery | ‐ | ‐ | ‐ | ‐ | (52 | ) | ‐ | (52 | ) | ||||||||||
Reversal of impairment of assets | ‐ | ‐ | ‐ | (450 | ) | ‐ | ‐ | (450 | ) | ||||||||||
Other expenses (income) | 21 | 5 | (54 | ) | 8 | 48 | 9 | 37 | |||||||||||
Earnings (loss) before finance costs and income taxes | 1,252 | 1,897 | 1,101 | 593 | (71 | ) | 173 | 4,945 | |||||||||||
Depreciation and amortization | 175 | 130 | 139 | 41 | 20 | ‐ | 505 | ||||||||||||
EBITDA | 1,427 | 2,027 | 1,240 | 634 | (51 | ) | 173 | 5,450 | |||||||||||
Integration and restructuring related costs | ‐ | ‐ | ‐ | ‐ | 11 | ‐ | 11 | ||||||||||||
Share-based compensation recovery | ‐ | ‐ | ‐ | ‐ | (52 | ) | ‐ | (52 | ) | ||||||||||
Reversal of impairment of assets | ‐ | ‐ | ‐ | (450 | ) | ‐ | ‐ | (450 | ) | ||||||||||
COVID-19 related expenses | ‐ | ‐ | ‐ | ‐ | 3 | ‐ | 3 | ||||||||||||
Foreign exchange loss, net of related derivatives | ‐ | ‐ | ‐ | ‐ | 31 | ‐ | 31 | ||||||||||||
Adjusted EBITDA | 1,427 | 2,027 | 1,240 | 184 | (58 | ) | 173 | 4,993 | |||||||||||
Assets – at December 31, 2022 | 24,451 | 13,921 | 11,807 | 2,661 | 2,622 | (876 | ) | 54,586 | |||||||||||
Six Months Ended June 30, 2023 | ||||||||||||||||||||
Corporate | ||||||||||||||||||||
Retail | Potash | Nitrogen | Phosphate | and Others | Eliminations | Consolidated | ||||||||||||||
Sales | – third party | 12,549 | 1,999 | 2,219 | 994 | ‐ | ‐ | 17,761 | ||||||||||||
– intersegment | 1 | 194 | 570 | 138 | ‐ | (903 | ) | ‐ | ||||||||||||
Sales | – total | 12,550 | 2,193 | 2,789 | 1,132 | ‐ | (903 | ) | 17,761 | |||||||||||
Freight, transportation and distribution | ‐ | 182 | 261 | 116 | ‐ | (108 | ) | 451 | ||||||||||||
Net sales | 12,550 | 2,011 | 2,528 | 1,016 | ‐ | (795 | ) | 17,310 | ||||||||||||
Cost of goods sold | 10,004 | 658 | 1,588 | 880 | ‐ | (899 | ) | 12,231 | ||||||||||||
Gross margin | 2,546 | 1,353 | 940 | 136 | ‐ | 104 | 5,079 | |||||||||||||
Selling expenses | 1,736 | 6 | 15 | 4 | (4 | ) | (8 | ) | 1,749 | |||||||||||
General and administrative expenses | 105 | 8 | 10 | 7 | 172 | ‐ | 302 | |||||||||||||
Provincial mining taxes | ‐ | 223 | ‐ | ‐ | ‐ | ‐ | 223 | |||||||||||||
Share-based compensation recovery | ‐ | ‐ | ‐ | ‐ | (49 | ) | ‐ | (49 | ) | |||||||||||
Impairment of assets | 465 | ‐ | ‐ | 233 | ‐ | ‐ | 698 | |||||||||||||
Other expenses (income) | 44 | (2 | ) | (34 | ) | 13 | 70 | (2 | ) | 89 | ||||||||||
Earnings (loss) before finance costs and income taxes | 196 | 1,118 | 949 | (121 | ) | (189 | ) | 114 | 2,067 | |||||||||||
Depreciation and amortization | 369 | 212 | 296 | 138 | 37 | ‐ | 1,052 | |||||||||||||
EBITDA | 565 | 1,330 | 1,245 | 17 | (152 | ) | 114 | 3,119 | ||||||||||||
Integration and restructuring related costs | 3 | ‐ | ‐ | ‐ | 12 | ‐ | 15 | |||||||||||||
Share-based compensation recovery | ‐ | ‐ | ‐ | ‐ | (49 | ) | ‐ | (49 | ) | |||||||||||
Impairment of assets | 465 | ‐ | ‐ | 233 | ‐ | ‐ | 698 | |||||||||||||
ARO/ERL expense for non-operating sites | ‐ | ‐ | ‐ | ‐ | 6 | ‐ | 6 | |||||||||||||
Foreign exchange loss, net of related derivatives | ‐ | ‐ | ‐ | ‐ | 18 | ‐ | 18 | |||||||||||||
Loss on Blue Chip Swaps | ‐ | ‐ | ‐ | ‐ | 92 | ‐ | 92 | |||||||||||||
Adjusted EBITDA | 1,033 | 1,330 | 1,245 | 250 | (73 | ) | 114 | 3,899 | ||||||||||||
Assets – at June 30, 2023 | 24,465 | 13,629 | 11,474 | 2,429 | 2,692 | (763 | ) | 53,926 | ||||||||||||
Six Months Ended June 30, 2022 | ||||||||||||||||||||
Corporate | ||||||||||||||||||||
Retail | Potash | Nitrogen | Phosphate | and Others | Eliminations | Consolidated | ||||||||||||||
Sales | – third party | 13,210 | 4,377 | 3,412 | 1,164 | ‐ | ‐ | 22,163 | ||||||||||||
– intersegment | 73 | 312 | 785 | 177 | ‐ | (1,347 | ) | ‐ | ||||||||||||
Sales | – total | 13,283 | 4,689 | 4,197 | 1,341 | ‐ | (1,347 | ) | 22,163 | |||||||||||
Freight, transportation and distribution | ‐ | 171 | 227 | 116 | ‐ | (90 | ) | 424 | ||||||||||||
Net sales | 13,283 | 4,518 | 3,970 | 1,225 | ‐ | (1,257 | ) | 21,739 | ||||||||||||
Cost of goods sold | 10,098 | 704 | 2,052 | 862 | ‐ | (1,233 | ) | 12,483 | ||||||||||||
Gross margin | 3,185 | 3,814 | 1,918 | 363 | ‐ | (24 | ) | 9,256 | ||||||||||||
Selling expenses | 1,735 | 6 | 15 | 4 | (4 | ) | (12 | ) | 1,744 | |||||||||||
General and administrative expenses | 99 | 4 | 10 | 6 | 147 | ‐ | 266 | |||||||||||||
Provincial mining taxes | ‐ | 611 | ‐ | ‐ | ‐ | ‐ | 611 | |||||||||||||
Share-based compensation expense | ‐ | ‐ | ‐ | ‐ | 83 | ‐ | 83 | |||||||||||||
Reversal of impairment of assets | ‐ | ‐ | ‐ | (450 | ) | ‐ | ‐ | (450 | ) | |||||||||||
Other expenses (income) | 9 | 2 | (80 | ) | 12 | 101 | 14 | 58 | ||||||||||||
Earnings (loss) before finance costs and income taxes | 1,342 | 3,191 | 1,973 | 791 | (327 | ) | (26 | ) | 6,944 | |||||||||||
Depreciation and amortization | 344 | 242 | 262 | 82 | 36 | ‐ | 966 | |||||||||||||
EBITDA | 1,686 | 3,433 | 2,235 | 873 | (291 | ) | (26 | ) | 7,910 | |||||||||||
Integration and restructuring related costs | ‐ | ‐ | ‐ | ‐ | 20 | ‐ | 20 | |||||||||||||
Share-based compensation expense | ‐ | ‐ | ‐ | ‐ | 83 | ‐ | 83 | |||||||||||||
Reversal of impairment of assets | ‐ | ‐ | ‐ | (450 | ) | ‐ | ‐ | (450 | ) | |||||||||||
COVID-19 related expenses | ‐ | ‐ | ‐ | ‐ | 8 | ‐ | 8 | |||||||||||||
Foreign exchange loss, net of related derivatives | ‐ | ‐ | ‐ | ‐ | 56 | ‐ | 56 | |||||||||||||
Gain on disposal of investment | (19 | ) | ‐ | ‐ | ‐ | ‐ | ‐ | (19 | ) | |||||||||||
Adjusted EBITDA | 1,667 | 3,433 | 2,235 | 423 | (124 | ) | (26 | ) | 7,608 | |||||||||||
Assets – at December 31, 2022 | 24,451 | 13,921 | 11,807 | 2,661 | 2,622 | (876 | ) | 54,586 | ||||||||||||
Three Months Ended | Six Months Ended | ||||||||||
June 30 | June 30 | ||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||
Retail sales by product line | |||||||||||
Crop nutrients | 3,986 | 4,548 | 5,321 | 6,135 | |||||||
Crop protection products | 3,070 | 2,983 | 4,224 | 4,370 | |||||||
Seed | 1,428 | 1,269 | 1,935 | 1,727 | |||||||
Merchandise | 273 | 280 | 519 | 514 | |||||||
Nutrien Financial | 122 | 91 | 179 | 140 | |||||||
Services and other | 308 | 310 | 456 | 485 | |||||||
Nutrien Financial elimination 1 | (59 | ) | (59 | ) | (84 | ) | (88 | ) | |||
9,128 | 9,422 | 12,550 | 13,283 | ||||||||
Potash sales by geography | |||||||||||
Manufactured product | |||||||||||
North America | 577 | 757 | 994 | 1,684 | |||||||
Offshore 2 | 539 | 1,988 | 1,199 | 3,005 | |||||||
1,116 | 2,745 | 2,193 | 4,689 | ||||||||
Nitrogen sales by product line | |||||||||||
Manufactured product | |||||||||||
Ammonia | 389 | 786 | 805 | 1,377 | |||||||
Urea and ESN ® 3 | 490 | 719 | 981 | 1,259 | |||||||
Solutions, nitrates and sulfates | 381 | 578 | 752 | 1,052 | |||||||
Other nitrogen and purchased products 3 | 111 | 278 | 251 | 509 | |||||||
1,371 | 2,361 | 2,789 | 4,197 | ||||||||
Phosphate sales by product line | |||||||||||
Manufactured product | |||||||||||
Fertilizer | 289 | 358 | 591 | 790 | |||||||
Industrial and feed | 189 | 204 | 384 | 388 | |||||||
Other phosphate and purchased products | 82 | 83 | 157 | 163 | |||||||
560 | 645 | 1,132 | 1,341 | ||||||||
1 Represents elimination for the interest and service fees charged by Nutrien Financial to Retail branches. | |||||||||||
2 Relates to Canpotex Limited ("Canpotex") (Note 11) and includes provisional pricing adjustments for the three months ended June 30, 2023 of $(173) (2022 – $191) and the six months ended June 30, 2023 of $(320) (2022 – $253). | |||||||||||
3 Certain immaterial 2022 figures have been reclassified. | |||||||||||
NOTE 3 IMPAIRMENT (REVERSAL OF IMPAIRMENT) OF ASSETS
We recorded the following impairment (reversal of impairment) of assets in the condensed consolidated statements of earnings:
Three and Six Months Ended | ||||||
June 30 | ||||||
Segment | Category | 2023 | 2022 | |||
Retail | Goodwill | 422 | ‐ | |||
Intangible assets | 43 | ‐ | ||||
Phosphate | Property, plant and equipment | 233 | (450 | ) | ||
Impairment (reversal of impairment) of assets | 698 | (450 | ) | |||
Property, Plant and Equipment
During the three and six months ended June 30, 2023, we identified an impairment trigger for our Phosphate cash generating units ("CGUs"), White Springs and Aurora, primarily as a result of the decrease in our forecasted phosphate margins. We completed our impairment analysis for these CGUs.
We recorded an impairment at our White Springs CGU based on the following:
Pre-tax impairment loss ($) | 233 | |
Pre-tax recoverable amount ($) | 504 | |
Valuation methodology | Value in use | |
Valuation technique | Pre-tax discounted cash flow to end of expected mine life | |
Key assumptions | ||
End of expected mine life (proven and probable reserves) (year) 1 | 2032 | |
Pre-tax discount rate 2 (%) | 15.6 | |
Post-tax discount rate 2 (%) | 12.0 | |
Forecasted EBITDA 3 ($) | 720 | |
1 The White Springs CGU has a shorter expected mine life and is therefore more sensitive to changes in short and medium-term forecasted phosphate margins. | ||
2 Discount rate used in the previous measurement was 12.0 percent (pre-tax - 15.2 percent). | ||
3 Forecasted EBITDA to 2028. | ||
For the Aurora CGU, we determined that there was no impairment. The carrying amount of the Aurora CGU was $1,660 (2022 - $1,650 after impairment reversal) compared to the recoverable amount of $2,000. During the three and six months ended June 30, 2022, we recorded an impairment reversal of $450 at our Aurora CGU as a result of increased pricing forecast that reflected the macroeconomic environment at the time. The Aurora CGU recoverable value was based on fair value less costs of disposal ("FVLCD") (a level 3 measurement) using after-tax discounted cash flows (using a five-year projection plus a terminal year to the end of expected mine life). For additional information relating to the reversal of the impairment, including the key assumptions used in the calculation, see Note 13 of the 2022 annual consolidated financial statements.
The recoverable amount of our Aurora and White Springs CGU used the following key assumptions: our forecasted EBITDA, discount rate, long-term growth rate and end of expected mine life. We used key assumptions that were based on historical data and estimates of future results from internal sources, independent third-party price benchmarks, and mineral reserve technical reports, as well as industry and market trends.
Phosphate Sensitivities
The following table highlights sensitivities to the recoverable amounts which could result in additional impairment losses or reversals of the previously recorded losses (relating to the White Springs CGU). The sensitivities have been calculated independently of changes in other key variables.
Change to Recoverable Amount ($) | ||||||||
Key Assumptions as at June 30, 2023 | Change in Assumption | White Springs | Aurora | |||||
Forecasted EBITDA over forecast period ($) | + / - | 5.0 percent | + / - | 40 | + / - | 220 | ||
Pre-tax discount rate (%) | + / - | 1.0 percent | - / + | 20 | n/a | n/a | ||
Post-tax discount rate (%) | + / - | 1.0 percent | n/a | n/a | - / + | 190 | ||
Long-term growth rate (%) | + / - | 1.0 percent | n/a | n/a | + / - | 110 | ||
Goodwill and Intangible Assets
During the three and six months ended June 30, 2023, we revised our forecasted EBITDA for the Retail – South America group of CGUs which triggered an impairment analysis. Due to the impact of crop input price volatility, more moderate long-term growth assumptions and higher interest rates, we have lowered our product margin expectations and deferred certain of our planned strategic investments. As a result, this reduced our forecasted earnings and growth.
Retail - South America group of CGUs | June 30, 2023 | |
Carrying amount | 1,496 | |
Recoverable amount | 1,031 | |
Impairment recognized relating to: | ||
Goodwill 1 | 422 | |
Intangible assets | 43 | |
1 Includes $197 relating to our acquisition of Casa do Adubo S.A., which is equal to the cost and accumulated impairment as at June 30, 2023. | ||
After the recognition of the impairment, goodwill for the South America group of CGUs is nil. We used the FVLCD methodology based on after-tax discounted cash flows (10-year projections plus a terminal value) and incorporated assumptions an independent market participant would apply. We adjusted discount rates for the country risk premium in which we expect to generate cash flows. We used comparative market multiples to ensure discounted cash flow results are reasonable.
The key assumptions with the greatest influence on the calculation of the recoverable amount are the discount rate, terminal growth rate and forecasted EBITDA. The key forecast assumptions were based on historical data and our estimates of future results from internal sources considering industry and market trends.
As at | ||
Key Assumptions Used in Impairment Model | June 30, 2023 | |
Terminal growth rate (%) | 6.0 | |
Forecasted EBITDA over forecast period ($) | 4,300 | |
Discount rate 1 (%) | 16.6 | |
1 Discount rate used in the previous measurement was 16.0 percent, which was included as part of our Retail - International group of CGUs. | ||
The following table highlights sensitivities to the recoverable amount which could have resulted in additional impairment against the carrying amount of intangible assets and property, plant and equipment. The sensitivities have been calculated independently of changes in other key variables.
Decrease to | |||||
Key Assumptions | Change in Key Assumption | Recoverable Amount ($) | |||
Terminal growth rate (%) | - | 1.0 percent | 50 | ||
Forecasted EBITDA over forecast period ($) | - | 5.0 percent | 100 | ||
Discount rate (%) | + | 1.0 percent | 120 | ||
NOTE 4 OTHER EXPENSES (INCOME)
Three Months Ended | Six Months Ended | ||||||||||
June 30 | June 30 | ||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||
Integration and restructuring related costs | 10 | 11 | 15 | 20 | |||||||
Foreign exchange loss, net of related derivatives | 52 | 31 | 18 | 56 | |||||||
Earnings of equity-accounted investees | (35 | ) | (77 | ) | (72 | ) | (118 | ) | |||
Bad debt expense | 30 | 14 | 39 | 14 | |||||||
COVID-19 related expenses | ‐ | 3 | ‐ | 8 | |||||||
Gain on disposal of investment | ‐ | ‐ | ‐ | (19 | ) | ||||||
Project feasibility costs | 21 | 17 | 34 | 29 | |||||||
Customer prepayment costs | 12 | 9 | 26 | 22 | |||||||
Loss on Blue Chip Swaps | 92 | ‐ | 92 | ‐ | |||||||
Gain on amendments to other post-retirement pension plans | ‐ | ‐ | (80 | ) | ‐ | ||||||
Other (income) expenses | (18 | ) | 29 | 17 | 46 | ||||||
164 | 37 | 89 | 58 | ||||||||
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 three and six months ended June 30, 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
A separate estimated average annual effective income tax rate was determined for each taxing jurisdiction and applied individually to the interim period pre-tax earnings for each jurisdiction.
Three Months Ended | Six Months Ended | ||||||
June 30 | June 30 | ||||||
2023 | 2022 | 2023 | 2022 | ||||
Income tax expense | 476 | 1,214 | 669 | 1,719 | |||
Actual effective tax rate on earnings (%) | 39 | 25 | 32 | 26 | |||
Actual effective tax rate including discrete items (%) | 51 | 25 | 40 | 25 | |||
Discrete tax adjustments that impacted the tax rate | 114 | 12 | 132 | 20 | |||
The following table summarizes the income tax balances within the condensed consolidated balance sheets:
Income Tax Assets and Liabilities | Balance Sheet Location | As at June 30, 2023 | As at December 31, 2022 | |
Income tax assets | ||||
Current | Receivables | 380 | 144 | |
Non-current | Other assets | 125 | 54 | |
Deferred income tax assets | Other assets | 367 | 448 | |
Total income tax assets | 872 | 646 | ||
Income tax liabilities | ||||
Current | Payables and accrued charges | 186 | 899 | |
Non-current | Other non-current liabilities | 28 | 46 | |
Deferred income tax liabilities | Deferred income tax liabilities | 3,584 | 3,547 | |
Total income tax liabilities | 3,798 | 4,492 |
NOTE 6 FINANCIAL INSTRUMENTS
Fair Value
Estimated fair values for financial instruments are designed to approximate amounts for which the instruments could be exchanged in a current arm's-length transaction between knowledgeable, willing parties. The valuation policies and procedures for financial reporting purposes are determined by our finance department. There have been no changes to our valuation methods presented in Note 10 of the 2022 annual consolidated financial statements and those valuation methods have been applied in these interim financial statements.
The following table presents our fair value hierarchy for financial instruments carried at fair value on a recurring basis or measured at amortized cost and require fair value disclosure. The table does not include fair value information for financial instruments that are measured using their carrying amount as a reasonable approximation of fair value.
June 30, 2023 | December 31, 2022 | ||||||||||||||||||||
Carrying | Carrying | ||||||||||||||||||||
Financial assets (liabilities) measured at | Amount | Level 1 | Level 2 | Level 3 | Amount | Level 1 | Level 2 | Level 3 | |||||||||||||
Fair value on a recurring basis 1 | |||||||||||||||||||||
Derivative instrument assets | 22 | ‐ | 22 | ‐ | 7 | ‐ | 7 | ‐ | |||||||||||||
Other current financial assets - marketable securities 2 | 156 | 30 | 126 | ‐ | 148 | 19 | 129 | ‐ | |||||||||||||
Investments at FVTOCI 3 | 197 | 187 | ‐ | 10 | 200 | 190 | ‐ | 10 | |||||||||||||
Derivative instrument liabilities | (66 | ) | ‐ | (66 | ) | ‐ | (35 | ) | ‐ | (35 | ) | ‐ | |||||||||
Amortized cost | |||||||||||||||||||||
Current portion of long-term debt | |||||||||||||||||||||
Notes and debentures | ‐ | ‐ | ‐ | ‐ | (500 | ) | (493 | ) | ‐ | ‐ | |||||||||||
Fixed and floating rate debt | (44 | ) | ‐ | (44 | ) | ‐ | (42 | ) | ‐ | (42 | ) | ‐ | |||||||||
Long-term debt | |||||||||||||||||||||
Notes and debentures | (9,386 | ) | (6,502 | ) | (2,211 | ) | ‐ | (7,910 | ) | (3,581 | ) | (3,656 | ) | ‐ | |||||||
Fixed and floating rate debt | (112 | ) | ‐ | (112 | ) | ‐ | (130 | ) | ‐ | (130 | ) | ‐ | |||||||||
1 During the periods ended June 30, 2023 and December 31, 2022, there were no transfers between levels for financial instruments measured at fair value on a recurring basis. | |||||||||||||||||||||
2 Marketable securities consist of equity and fixed income securities. | |||||||||||||||||||||
3 Investments at fair value through other comprehensive income ("FVTOCI") is primarily comprised of shares in Sinofert Holdings Ltd. | |||||||||||||||||||||
NOTE 7 SHORT-TERM DEBT
Rate of Interest (%) | Total Facility Limit as at June 30, 2023 | As at June 30, 2023 | As at December 31, 2022 | ||||
Credit facilities | |||||||
Unsecured revolving term credit facility | n/a | 4,500 | ‐ | ‐ | |||
Unsecured revolving term credit facility | n/a | 2,000 | ‐ | 500 | |||
Uncommitted revolving demand facility | n/a | 1,000 | ‐ | ‐ | |||
Other credit facilities 1 | 1,310 | ||||||
South America 2 | 1.3 - 13.2 | 588 | 453 | ||||
Australia | 5.1 | 100 | 190 | ||||
Other | 4.1 | 89 | 9 | ||||
Commercial paper | 5.4 - 5.8 | 2,038 | 783 | ||||
Other short-term debt | n/a | 107 | 207 | ||||
2,922 | 2,142 | ||||||
1 Total facility limit amounts include some facilities with maturities in excess of one year. | |||||||
2 Our credit facilities are either denominated in local currency or US dollars. The range of interest rates for South America excludes our local currency denominated Argentina facility with an interest rate of 92.4 percent and a minimal outstanding balance as at June 30, 2023. | |||||||
NOTE 8 LONG-TERM DEBT
Six Months Ended | |||||
June 30 | |||||
Rate of interest (%) | Maturity | Amount | |||
Notes repaid 2023 | 1.900 | May 13, 2023 | 500 | ||
Notes issued 2023 | 4.900 | March 27, 2028 | 750 | ||
Notes issued 2023 | 5.800 | March 27, 2053 | 750 | ||
1,500 | |||||
The notes issued in the six months ended June 30, 2023, are unsecured, rank equally with our existing unsecured debt, and have no sinking fund requirements prior to maturity. Each series is redeemable and has various provisions for redemption prior to maturity, at our option, at specified prices.
NOTE 9 SHARE CAPITAL
Share Repurchase Programs
Maximum | Maximum | Number of | |||||||
Commencement | Shares for | Shares for | Shares | ||||||
Date | Expiry | Repurchase | Repurchase (%) | Repurchased | |||||
2021 Normal Course Issuer Bid | March 1, 2021 | February 28, 2022 | 28,468,448 | 5 | 22,186,395 | ||||
2022 Normal Course Issuer Bid | March 1, 2022 | February 7, 2023 | 55,111,110 | 10 | 55,111,110 | ||||
2023 Normal Course Issuer Bid 1 | March 1, 2023 | February 29, 2024 | 24,962,194 | 5 | 5,375,397 | ||||
1 The 2023 normal course issuer bid will expire earlier than the date above if we acquire the maximum number of common shares allowable or otherwise decide not to make any further repurchases. | |||||||||
Purchases under the normal course issuer bids were, or may be, made through open market purchases at market prices as well as by other means permitted by applicable securities laws, including private agreements.
The following table summarizes our share repurchase activities during the period:
Three Months Ended | Six Months Ended | ||||||
June 30 | June 30 | ||||||
2023 | 2022 | 2023 | 2022 | ||||
Number of common shares repurchased for cancellation | 1,626,899 | 11,712,173 | 13,378,189 | 19,360,408 | |||
Average price per share (US dollars) | 61.47 | 89.51 | 74.73 | 84.48 | |||
Total cost | 101 | 1,049 | 1,000 | 1,636 | |||
Dividends Declared
We declared a dividend per share of $0.53 (2022 – $0.48) during the three months ended June 30, 2023, payable on July 14, 2023 to shareholders of record on June 30, 2023.
NOTE 10 SEASONALITY
Seasonality in our business results from increased demand for products during planting season. Crop input sales are generally higher in the spring and fall application seasons. Crop input inventories are normally accumulated leading up to each application season. The results of this seasonality have a corresponding effect on receivables from customers and rebates receivables, inventories, prepaid expenses and other current assets, and trade payables. Our short-term debt also fluctuates during the year to meet working capital requirements. Our cash collections generally occur after the application season is complete, while customer prepayments made to us are typically concentrated in December and January and inventory prepayments paid to our suppliers are typically concentrated in the period from November to January. Feed and industrial sales are more evenly distributed throughout the year.
NOTE 11 RELATED PARTY TRANSACTIONS
We sell potash outside Canada and the United States exclusively through Canpotex. Canpotex sells potash to buyers 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 are shown in Note 2.
As at | June 30, 2023 | December 31, 2022 | |
Receivables from Canpotex | 421 | 866 |
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Investor Relations:
Jeff Holzman
Vice President, Investor Relations
(306) 933-8545
Investors@nutrien.com
Media Relations:
Megan Fielding
Vice President, Brand & Culture Communications
(403) 797-3015
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Recommendations from the Nation's Leading Independent Proxy Advisory Firms Recognize Value Creation Opportunity for Spectrum Stockholders and Strength of the Combined Company
Spectrum Pharmaceuticals, Inc. (NasdaqGS: SPPI) ("Spectrum" or the "Company") announced today that the leading independent proxy advisory firms, Institutional Shareholder Services, Inc. ("ISS") and Glass Lewis & Co. ("Glass Lewis"), have each recommended that Spectrum stockholders vote "FOR" the proposal to adopt the Agreement and Plan of Merger ("Merger Agreement", and such proposal, the "Merger Proposal") at the upcoming special meeting of stockholders (the "Special Meeting") on July 27, 2023. Under the terms of the Merger Agreement, Assertio Holdings, Inc. (Nasdaq: ASRT) ("Assertio") would acquire all outstanding shares of Spectrum in an all-stock and contingent value rights ("CVR") transaction. The upfront consideration represents a premium of 65% and the total potential consideration represents a premium of 94% to Spectrum's closing price on April 24, 2023.
In recommending that its clients vote FOR the Merger Proposal, ISS noted: "The board appears to have conducted a thorough sales process, the offer represents a premium to the unaffected price, there appears to be downside risk of non-approval given the stock's outperformance since the unaffected date, and the equity form of consideration provides shareholders the ability to participate in the upside potential of the combined company. In light of these factors, support for the proposed transaction is warranted."
"We are gratified that the two leading providers of independent voting advice to institutional investors and public pension funds recognize the value of the proposed transaction for Spectrum stockholders," commented William Ashton, the Company's independent Board Chairman. "We urge all stockholders to make sure their shares are represented at the special meeting by voting today."
The Spectrum board of directors strongly urges Spectrum stockholders to vote "FOR" all the proposals on the agenda. Since approval of the merger transaction requires the affirmative vote of a majority of all outstanding shares, every vote is important—no matter how many or how few shares a stockholder may own.
Stockholders with questions, or who need assistance in voting their shares, may contact the Company's proxy solicitor Innisfree M&A Incorporated by calling (877) 800-5185 (toll-free from the U.S. and Canada) or +1(412) 232-3651 (from other locations).
About Assertio
Assertio is a specialty pharmaceutical company offering differentiated products to patients utilizing a non-personal promotional model. Assertio has built and continues to build its commercial portfolio by identifying new opportunities within its existing products as well as acquisitions or licensing of additional approved products. To learn more about Assertio, visit www.assertiotx.com .
About Spectrum Pharmaceuticals, Inc.
Spectrum is a commercial stage biopharmaceutical company, with a strategy of acquiring, developing, and commercializing novel and targeted oncology therapies. We have an in-house clinical development organization with regulatory and data management capabilities, in addition to commercial infrastructure and a field based sales force for our marketed product, ROLVEDON ® (eflapegrastim-xnst) Injection. For additional information on Spectrum please visit www.sppirx.com .
About ROLVEDON ®
ROLVEDON ® (eflapegrastim-xnst) injection is a long-acting granulocyte colony-stimulating factor (G-CSF) with a novel formulation. Spectrum has received an indication to decrease the incidence of infection, as manifested by febrile neutropenia, in adult patients with non-myeloid malignancies receiving myelosuppressive anti-cancer drugs associated with clinically significant incidence of febrile neutropenia. ROLVEDON is not indicated for the mobilization of peripheral blood progenitor cells for hematopoietic stem cell transplantation. The BLA for ROLVEDON was supported by data from two identically designed Phase 3, randomized, open-label, noninferiority clinical trials, ADVANCE and RECOVER, which evaluated the safety and efficacy of ROLVEDON in 643 early-stage breast cancer patients for the management of neutropenia due to myelosuppressive chemotherapy. In both studies, ROLVEDON demonstrated the pre-specified hypothesis of non-inferiority (NI) in mean duration of severe neutropenia (DSN) and a similar safety profile to pegfilgrastim. ROLVEDON also demonstrated non-inferiority to pegfilgrastim in the mean DSN across all four cycles (all NI p
Please see the Important Safety Information below and the full prescribing information for ROLVEDON at www.rolvedon.com .
Notice Regarding Forward-looking Statements
This communication contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Generally, the words "anticipate," "estimate," "expect," "project," "intend," "plan," "contemplate," "predict," "forecast," "likely," "believe," "target," "will," "could," "would," "should," "potential," "may" and similar expressions or their negative, may, but are not necessary to, identify forward-looking statements. Such forward-looking statements, including those regarding the timing, and consummation and anticipated benefits of the transaction described herein, involve risks and uncertainties. Assertio's and Spectrum's experience and results may differ materially from the experience and results anticipated in such statements. The accuracy of such statements is subject to a number of risks, uncertainties and assumptions including, but are not limited to, the following factors: the risk that the conditions to the closing of the transaction are not satisfied, including the risk that required approvals of the transaction from the stockholders of Assertio or stockholders of Spectrum or from regulators are not obtained; litigation relating to the transaction; uncertainties as to the timing of the consummation of the transaction and the ability of each party to consummate the transaction; risks that the proposed transaction disrupts the current plans or operations of Assertio or Spectrum; the ability of Assertio and Spectrum to retain and hire key personnel; competitive responses to the proposed transaction; unexpected costs, charges or expenses resulting from the transaction; potential adverse reactions or changes to relationships with customers, suppliers, distributors and other business partners resulting from the announcement or completion of the transaction; the combined company's ability to achieve the synergies expected from the transaction, as well as delays, challenges and expenses associated with integrating the combined company's existing businesses; Spectrum's existing and new drug candidates may not prove safe or effective, the possibility that our existing and new applications to the FDA and other regulatory agencies may not receive approval in a timely manner or at all, the possibility that our existing and new drug candidates, if approved, may not be more effective, safer or more cost efficient than competing drugs, the possibility that our efforts to acquire or in-license and develop additional drug candidates may fail, our dependence on third parties for clinical trials, manufacturing, distribution and quality control; the impact of overall industry and general economic conditions, including inflation, interest rates and related monetary policy by governments in response to inflation; geopolitical events, including the war between Russia and Ukraine, and regulatory, economic and other risks associated therewith; and continued uncertainty around the ongoing impacts of the COVID-19 pandemic, as well as broader macroeconomic conditions. Other factors that might cause such a difference include those discussed in Assertio's and Spectrum's filings with the SEC, which include their Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and in the definitive joint proxy statement/prospectus on Form S-4 filed, and declared effective, on June 15, 2023 in connection with the proposed transaction. For more information, see the section entitled "Risk Factors" and the forward looking statements disclosure contained in Assertio's and Spectrum's Annual Reports on Form 10-K and in other filings. All forward-looking statements made herein are based on information currently available to Spectrum as of the date of this communication. Spectrum undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Additional Information and Where to Find It
In connection with the proposed strategic business combination between Assertio and Spectrum, Assertio has filed with the SEC a registration statement on Form S-4 (SEC File No. 333-272355) that includes a joint proxy statement of Assertio and Spectrum that also constitutes a prospectus of Assertio. The registration statement was declared effective by the SEC on June 15, 2023. The joint proxy statement/prospectus is publicly available, and the joint proxy statement/prospectus was mailed or otherwise disseminated to shareholders of Assertio and stockholders of Spectrum on or about June 15, 2023. Assertio and Spectrum also have filed and plan to file other relevant documents with the SEC regarding the proposed transaction. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION. Investors and security holders can obtain free copies of the joint proxy statement/prospectus and other documents filed with the SEC by Assertio and Spectrum through the website maintained by the SEC at https://www.sec.gov . Copies of the documents filed with the SEC by Assertio will be available free of charge on Assertio's website at www.assertiotx.com or by contacting Assertio's Investor Relations Department by email at investor@assertiotx.com or by phone at (800)-509-5586. Copies of the documents filed with the SEC by Spectrum will be available free of charge on Spectrum's website at www.sppirx.com or by contacting Spectrum's Investor Relations Department by email at ir@sppirx.com or by phone at (949)788-6700.
SPECTRUM PHARMACEUTICALS, INC. ® and ROLVEDON ® are registered trademarks of Spectrum Pharmaceuticals, Inc. and its affiliates. REDEFINING CANCER CARE™ is the Spectrum Pharmaceuticals' logos and trademarks owned by Spectrum Pharmaceuticals, Inc. Any other trademarks are the property of their respective owners.
© 2023 Spectrum Pharmaceuticals, Inc. All Rights Reserved
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Nora Brennan
Chief Financial Officer
949.788.6700
InvestorRelations@sppirx.com
Lisa Wilson
In-Site Communications, Inc.
212.452.2793
lwilson@insitecony.com
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Nutrien Ltd. (TSX and NYSE: NTR) announced today that it has curtailed production at its Cory potash mine due to the loss of export capacity through Canpotex's Neptune terminal as a result of the International Longshore and Warehouse Union (ILWU) Canada strike at the Port of Vancouver.
Nutrien expects full-year 2023 Potash adjusted EBITDA will fall below the bottom end of its previous guidance range due to factors impacting offshore sales through Canpotex, including the ILWU strike, Portland terminal outage and lower global potash prices than previously anticipated. We will provide updated full-year 2023 guidance reflecting these impacts at the time of our second quarter results on Wednesday, August 2, 2023.
"The disruption at the Port of Vancouver has resulted in the curtailment of production at our Cory potash mine and if prolonged could also impact production at our other potash mines in Saskatchewan. We urge the parties in this dispute to come to a swift resolution to prevent further damage to the Canadian economy," said Ken Seitz, Nutrien's President and CEO.
About Nutrien
Nutrien is the world's largest 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 retail facilities that positions us to efficiently serve the needs of growers. We focus on creating long-term value for all stakeholders by advancing our key environmental, social and governance priorities.
Forward-Looking Statements
Certain statements and other information included in this news release 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 "will", "should", "could", "expect", "anticipate", or other similar words). All statements in this news release, other than those relating to historical information or current conditions, are forward-looking statements including, but not limited to, the expected impacts of the ILWU strike on potash transportation and resulting production curtailments at one or more of our potash mines; the impact of the ILWU strike, Portland outage and lower global potash prices on Nutrien's potash volumes and offshore sales through Canpotex; and our expectations for 2023 Potash adjusted EBITDA guidance. Forward-looking statements in this news release are based on certain key expectations and assumptions made by Nutrien, many of which are outside of our control. Although Nutrien believes that the expectations and assumptions on which such forward looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Nutrien can give no assurance that they will prove to be correct. The additional key assumptions include, among other things, assumptions with respect to expected market, business, regulatory and industry conditions including demand, supply, product availability and pricing, logistics, operations, availability and cost of labour; and the estimates regarding duration and adverse impacts of the ILWU strike and Portland terminal outage on Nutrien's current and future operations and financial results. Forward-looking statements are subject to various risks and uncertainties which could cause actual results to differ materially from the anticipated results or expectations expressed in this news release include, but not limited to, expectations with respect to general global economic, market and business conditions; and the supply and demand and price levels for our products; delays in production; and sufficient, cost-effective and timely transportation (including port terminal availability and the impact of the ILWU strike). For additional information on the assumptions made, and the risks and uncertainties that could cause actual results to differ from the anticipated results, refer to our most recent Quarterly Report, Annual Report and Annual Information Form filed under Nutrien's profile on SEDAR at www.sedar.com and with the Securities and Exchange Commission at www.sec.gov.
The forward-looking statements in this news release are made as of the date hereof and Nutrien disclaims any intention or obligation to update or revise any forward-looking statements in this news release, except as may be required under applicable laws.
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Investor Relations
Jeff Holzman
Vice President, Investor Relations
(306) 933-8545
Media Relations
Megan Fielding
Vice President, Brand & Culture Communications
(403) 797-3015
www.nutrien.com
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Nutrien Ltd. (TSX and NYSE: NTR) announced today plans to release second quarter earnings results on Wednesday, August 2, 2023, after market close. Nutrien will host a conference call the following day, Thursday, August 3, 2023 at 10:00 a.m. EDT to discuss and answer investor questions on second quarter results and the outlook.
Investors can access the call by dialing 1-888-886-7786 or 1-416-764-8658. A webcast of the conference call can be accessed by visiting Nutrien's website, https://www.nutrien.com/investors/events .
A recording of the conference call will be available after the completion of the call by dialing 1-877-674-7070 and inputting the conference identification number 043533#. The recording will be available through November 1, 2023.
About Nutrien
Nutrien is the world's largest 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 retail facilities that positions us to efficiently serve the needs of growers. We focus on creating long-term value for all stakeholders by advancing our key environmental, social and governance priorities.
View source version on businesswire.com: https://www.businesswire.com/news/home/20230628981059/en/
Investor Relations
Jeff Holzman
Vice President, Investor Relations
(306) 933-8545
Media Relations
Megan Fielding
Vice President, Brand & Culture Communications
(403) 797-3015
Contact us at: www.nutrien.com
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Australia