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Nutrien Reports Fourth Quarter and Full-Year 2022 Results

Delivered record net earnings, advanced strategic initiatives and returned $5.6 billion to shareholders in 2022. Expect strong market fundamentals in 2023 and announced a 10 percent increase in the quarterly dividend.

All amounts are in US dollars except as otherwise noted

SASKATOON, Saskatchewan--(BUSINESS WIRE)-- Nutrien Ltd. (TSX and NYSE: NTR) announced today its fourth quarter 2022 results, with net earnings of $1.1 billion ($2.15 diluted net earnings per share). Fourth quarter 2022 adjusted net earnings per share1 was $2.02 and adjusted EBITDA1 was $2.1 billion.

“Geopolitical events caused an unprecedented level of supply disruption and market volatility across agriculture, energy and fertilizer markets in 2022. Nutrien delivered record net earnings and cash flow in this environment due to the advantages of our world-class production, distribution and retail network. We returned $5.6 billion to shareholders, invested in our global Retail network and advanced a number of long-term strategic initiatives that position our company for future growth and sustainability,” commented Ken Seitz, Nutrien’s President and CEO.

“The outlook for our business is strong as we expect global supply issues to persist and demand for crop inputs to increase in 2023. We remain disciplined in our capital allocation approach as we position the company to best serve the needs of our customers, while delivering meaningful returns for our shareholders,” added Mr. Seitz.

Highlights:

  • Nutrien generated net earnings of $7.7 billion ($14.18 diluted net earnings per share) and adjusted EBITDA1 of $12.2 billion in 2022 supported by higher realized fertilizer prices and record Nutrien Ag Solutions (“Retail”) performance, more than offsetting a reduction in fertilizer sales volumes. Cash provided by operating activitiesincreased to $8.1 billion in 2022, more than doubling the prior year’s total.
  • Nutrien repurchased 53 million shares in 2022 and an additional 8 million shares in 2023, completing its normal course issuer bid (“NCIB”) in early February 2023. Nutrien’s Board of Directors approved a 10 percent increase in the quarterly dividend to $0.53 per share and approved the purchase of up to 5 percent of Nutrien’s outstanding common shares over a twelve-month period through a NCIB. The NCIB is subject to acceptance by the Toronto Stock Exchange.
  • Nutrien allocated $1.2 billion of growth capital1 (cash used in investing activities of $2.9 billion) in 2022 to advance strategic initiatives across our Retail, Potash and Nitrogen businesses. This included expanding our Retail network by completing 21 acquisitions in Brazil, the US and Australia for a total investment of approximately $400 million.
  • Retail delivered record adjusted EBITDA of $2.3 billion for the full year of 2022, due to supportive market conditions in key regions where we operate. Retail cash operating coverage ratio1 as at December 31, 2022 improved to 55 percent compared to 58 percent for the same period in 2021 driven by higher margins.
  • Potash adjusted EBITDA of $5.8 billion for the full year of 2022 more than doubled compared to the prior year due to higher net realized selling prices and record offshore sales volumes, more than offsetting lower North American sales volumes.
  • Nitrogen full year 2022 adjusted EBITDA of $3.9 billion increased 70 percent compared to the prior year due to higher net realized selling prices that more than offset higher natural gas costs and lower sales volumes.
  • Nutrien issued full-year 2023 adjusted EBITDA and adjusted net earnings per share guidance1 of $8.4 to $10.0 billion and $8.45 to $10.65 per share, respectively.
  • Nutrien is adjusting the ramp up timing of its existing low-cost potash capacity to optimize capital expenditures in-line with the pace of expected demand recovery in 2023 and beyond. We will maintain a flexible approach and now expect to reach 18 million tonnes of annual operational capability in 2026. Nutrien continues to believe long-term fundamentals support the need for our low-cost, incremental potash capability and there is significant value in having flexibility to increase production when the market needs it.

1. These (and any related guidance, if applicable) are non-IFRS financial measures. See the “Non-IFRS Financial Measures” section for further information.

Market Outlook and Guidance

Agriculture and Retail

  • Agricultural fundamentals remain strong and are supported by the lowest global grain stocks-to-use ratio in over 25 years. We expect Ukrainian crop production and exports will continue to be constrained by the impact of the war with Russia and believe it will take more than one growing season to alleviate the supply risk from the market. Spot prices for corn, soybeans, and wheat are up 25 to 50 percent compared to the 10-year average, which supports grower returns and provides an incentive to increase crop production in 2023.
  • We anticipate US major crop acreage will increase by approximately 4 percent in 2023, assuming a more normal planting window compared to the spring of 2022. We expect corn plantings to increase to 91 to 93 million acres in 2023, which is supportive of crop input demand.
  • Brazilian grower economics for soybeans and corn are strong, which we expect will support another year of above-trend acreage growth. Safrinha corn planting and crop input purchases have been delayed due to wet weather, but we expect strong demand as the planting season progresses. Australian growers have benefitted from multiple years of above-average yields and historically high crop prices, positioning them very well financially entering 2023. We expect another year of strong crop production and input demand assuming favorable weather conditions.

Crop Nutrient Markets

  • We believe potash inventories have been drawn down in Brazil and the US following a historic decline in the pace of potash shipments in the second half of 2022. We have seen improved potash demand in early 2023, however buyers continue to take a cautious approach to managing inventories that could lead to a more condensed shipment period as we approach the primary application seasons. Our estimate for global potash shipments in 2023 is 63 to 67 million tonnes, which is still constrained compared to the historical trend demand estimated at around 70 million tonnes.
  • Belarus potash shipments in 2023 are projected to be down 40 to 60 percent and Russian shipments down 15 to 30 percent compared to 2021. We anticipate the reduction in supply will be most apparent in the first quarter of 2023 compared to the same period in 2022, as both Belarusian and Russian exports were heavily weighted to early 2022 before sanctions and export restrictions were imposed.
  • Global nitrogen prices have declined since the beginning of 2023 due to lower European natural gas prices and buyer deferrals. We expect European natural gas prices to be volatile throughout the year and around 30 percent of the region’s nitrogen capacity is currently offline. North American natural gas prices remain highly competitive compared to European and Asian natural gas prices and we expect Henry Hub spot prices between $2.50 to $4.50 per MMBtu in 2023.
  • We anticipate nitrogen supply constraints will persist in 2023, including lower Russian ammonia exports, reduced European operating rates and continued Chinese urea export restrictions. We expect a tight US supply and demand balance ahead of the 2023 spring season due to higher corn acreage and increased US nitrogen exports over the past six months.
  • We expect Chinese phosphate export restrictions to be in place until at least April 2023, anticipate improved demand in North America and Brazil, and the continuation of strong demand in India. Phosphate product margins are expected to be supported by lower raw material sulfur prices due to reduced operating rates and demand in China.

Financial Guidance

Based on market factors detailed above, we are issuing full-year 2023 adjusted EBITDA guidance of $8.4 to $10.0 billion and full-year 2023 adjusted net earnings guidance of $8.45 to $10.65 per share.

  • Retail adjusted EBITDA guidance assumes strong demand for crop inputs in each of the markets we serve. We expect gross margins for crop nutrients and crop protection products will be lower compared to the record levels achieved in 2022.
  • Potash sales tonnes guidance of 13.8 to 14.6 million tonnes assumes increased demand in our key markets of North America and Brazil and continued global supply constraints in 2023. We have maintained capability to increase sales volumes to our previous expectation of approximately 15 million tonnes if we see stronger demand in the market.
  • Nitrogen sales tonnes guidance of 10.8 to 11.4 million tonnes assumes higher operating rates at our North American plants and a continuation of gas curtailments in Trinidad in 2023. Nitrogen sales tonnes guidance includes 300,000 to 350,000 tonnes of projected ESN® product sales that prior to 2023 were included in the other product category.

All guidance numbers, including those noted above and related sensitives are outlined in the table below.

 

2023 Guidance Ranges 1

(billions of US dollars, except as otherwise noted)

Low

High

Adjusted net earnings per share in US dollars (“Adjusted EPS”)2,3

8.45

10.65

Adjusted EBITDA 2

8.4

10.0

Retail adjusted EBITDA

1.85

2.05

Potash adjusted EBITDA

3.7

4.5

Nitrogen adjusted EBITDA

2.5

3.2

Phosphate adjusted EBITDA (in millions of US dollars)

550

750

Potash sales tonnes (millions) 4

13.8

14.6

Nitrogen sales tonnes (millions) 4

10.8

11.4

Depreciation and amortization

2.1

2.2

Effective tax rate on adjusted earnings (%)

23.5

24.5

 

 

Impact to

2023 Annual Assumptions & Sensitivities 1 

 

Adjusted

Adjusted

(millions of US dollars, except EPS amounts or as otherwise noted)

 

EBITDA

EPS 3

$1/MMBtu change in NYMEX 5

180

0.27

$25/tonne change in realized potash selling prices

300

0.45

$25/tonne change in realized ammonia selling prices

50

0.07

$25/tonne change in realized urea selling prices

80

0.12

2023 average Canadian to US dollar exchange rate

 

1.33

 

2023 NYMEX natural gas (US dollars per MMBtu)

 

~$3.50

 

1. See the “Forward-Looking Statements” section.

 

2. These are non-IFRS financial measures. See the “Non-IFRS Financial Measures” section.

 
3. Assumes 503 million shares outstanding for all EPS guidance and sensitivities.  
4. Manufactured products only. Nitrogen sales tonnes guidance includes ESN® products that prior to 2023 were included in the other category.  
5. Nitrogen related impact.  

Consolidated Results

 

Three Months Ended December 31

 

Twelve Months Ended December 31

(millions of US dollars, except as otherwise noted)

2022

 

2021

 

% Change

 

2022

 

2021

 

% Change

Sales

7,533

 

7,267

 

4

 

37,884

 

27,712

 

37

Freight, transportation and distribution

244

 

198

 

23

 

872

 

851

 

2

Cost of goods sold

4,383

 

3,863

 

13

 

21,588

 

17,452

 

24

Gross margin

2,906

 

3,206

 

(9)

 

15,424

 

9,409

 

64

Expenses

1,247

 

1,379

 

(10)

 

4,615

 

4,628

 

Net earnings

1,118

 

1,207

 

(7)

 

7,687

 

3,179

 

142

Adjusted EBITDA 1

2,095

 

2,463

 

(15)

 

12,170

 

7,126

 

71

Diluted net earnings per share

2.15

 

2.11

 

2

 

14.18

 

5.52

 

157

Adjusted net earnings per share 1

2.02

 

2.47

 

(18)

 

13.19

 

6.23

 

112

Cash provided by operating activities

4,736

 

3,637

 

30

 

8,110

 

3,886

 

109

1. These are non-IFRS financial measures. See the "Non-IFRS Financial Measures" section.

Net earnings and adjusted EBITDA increased for the full year of 2022 compared to the same periods in 2021, due to higher net realized selling prices resulting primarily from global supply uncertainties across our nutrient businesses and strong Retail performance. Net earnings and adjusted EBITDA decreased in the fourth quarter of 2022 compared to the same period in 2021, due to lower sales volumes partially offset by higher net realized selling prices. In 2022, we recorded a non-cash impairment reversal of $780 million related to our Phosphate operations, which positively impacted net earnings. Cost of goods sold increased in the fourth quarter and full year of 2022 due to higher input costs, in particular higher cost of inventory, natural gas and sulfur. Cash provided by operating activities increased in the full year of 2022 compared to the same period in 2021 primarily due to higher net earnings and increased in the fourth quarter of 2022 compared to the same period in 2021 due to a higher release of working capital.

Segment Results

Our discussion of segment results set out on the following pages is a comparison of the results for the three and twelve months ended December 31, 2022 to the results for the three and twelve months ended December 31, 2021, unless otherwise noted.

Nutrien Ag Solutions (“Retail”)

 

Three Months Ended December 31

(millions of US dollars, except

Dollars

 

Gross Margin

 

Gross Margin (%)

as otherwise noted)

2022

 

2021

 

% Change

 

2022

 

2021

 

% Change

 

2022

 

2021

Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Crop nutrients

2,320

 

2,035

 

14

 

349

 

428

 

(18)

 

15

 

21

Crop protection products

981

 

1,113

 

(12)

 

413

 

414

 

 

42

 

37

Seed

251

 

189

 

33

 

46

 

57

 

(19)

 

18

 

30

Merchandise

264

 

270

 

(2)

 

41

 

45

 

(9)

 

16

 

17

Nutrien Financial

62

 

51

 

22

 

62

 

51

 

22

 

100

 

100

Services and other 1

237

 

243

 

(2)

 

194

 

201

 

(3)

 

82

 

83

Nutrien Financial elimination 1, 2

(28)

 

(23)

 

22

 

(28)

 

(23)

 

22

 

100

 

100

 

4,087

 

3,878

 

5

 

1,077

 

1,173

 

(8)

 

26

 

30

Cost of goods sold

3,010

 

2,705

 

11

 

 

 

 

 

 

 

 

 

 

Gross margin

1,077

 

1,173

 

(8)

 

 

 

 

 

 

 

 

 

 

Expenses 3

888

 

911

 

(3)

 

 

 

 

 

 

 

 

 

 

Earnings before finance costs and taxes ("EBIT")

189

 

262

 

(28)

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

202

 

178

 

13

 

 

 

 

 

 

 

 

 

 

EBITDA

391

 

440

 

(11)

 

 

 

 

 

 

 

 

 

 

Adjustments 4

 

2

 

(100)

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

391

 

442

 

(12)

 

 

 

 

 

 

 

 

 

 

1. Certain immaterial figures have been reclassified for the three months ended December 31, 2021.

2. Represents elimination for the interest and service fees charged by Nutrien Financial to Retail branches.

3. Includes selling expenses of $836 million (2021 – $848 million).

4. See Note 2 to the unaudited condensed consolidated financial statements.

 

Twelve Months Ended December 31

(millions of US dollars, except

Dollars

 

Gross Margin

 

Gross Margin (%)

as otherwise noted)

2022

 

2021

 

% Change

 

2022

 

2021

 

% Change

 

2022

 

2021

Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Crop nutrients

10,060

 

7,290

 

38

 

1,766

 

1,597

 

11

 

18

 

22

Crop protection products

7,067

 

6,333

 

12

 

1,936

 

1,551

 

25

 

27

 

24

Seed

2,112

 

2,008

 

5

 

428

 

419

 

2

 

20

 

21

Merchandise

1,019

 

1,033

 

(1)

 

174

 

172

 

1

 

17

 

17

Nutrien Financial

267

 

189

 

41

 

267

 

189

 

41

 

100

 

100

Services and other 1

966

 

980

 

(1)

 

749

 

771

 

(3)

 

78

 

79

Nutrien Financial elimination 1

(141)

 

(99)

 

42

 

(141)

 

(99)

 

42

 

100

 

100

 

21,350

 

17,734

 

20

 

5,179

 

4,600

 

13

 

24

 

26

Cost of goods sold

16,171

 

13,134

 

23

 

 

 

 

 

 

 

 

 

 

Gross margin

5,179

 

4,600

 

13

 

 

 

 

 

 

 

 

 

 

Expenses 2

3,621

 

3,378

 

7

 

 

 

 

 

 

 

 

 

 

EBIT

1,558

 

1,222

 

27

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

752

 

706

 

7

 

 

 

 

 

 

 

 

 

 

EBITDA

2,310

 

1,928

 

20

 

 

 

 

 

 

 

 

 

 

Adjustments 3

(17)

 

11

 

n/m

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

2,293

 

1,939

 

18

 

 

 

 

 

 

 

 

 

 

1. Certain immaterial figures have been reclassified for the twelve months ended December 31, 2021.

2. Includes selling expenses of $3,392 million (2021 – $3,124 million).

3. See Note 2 to the unaudited condensed consolidated financial statements.

  • Adjusted EBITDA for the full year of 2022 increased due to higher sales and gross margins across nearly all product categories and regions where we operate. This was supported by strong agriculture fundamentals, higher selling prices and growth in proprietary product margins. Adjusted EBITDA decreased in the fourth quarter of 2022 compared to the prior year’s record results as strong sales prices in most product categories were offset by lower volumes and higher cost inventory. Our Retail cash operating coverage ratio1 improved as at December 31, 2022 to 55 percent from 58 percent in the same period in 2021 due to higher gross margin.
  • Crop nutrients sales increased in the fourth quarter and the full year of 2022 due to higher selling prices. Gross margin increased for the full year of 2022 compared to the same period last year due to strategic procurement and the timing of inventory purchasing in the first half of 2022, with a decrease in the fourth quarter of 2022 due to higher cost inventory. Sales volumes decreased for the full year 2022 due to reduced application resulting from a delayed planting season in North America and stronger fourth quarter engagement in 2021 in a rising price environment, slightly offset by increased South American volumes attributed to recent acquisitions.
  • Crop protection products sales and gross margin increased for the full year of 2022, particularly in North America, due to higher selling prices along with increased sales and gross margin in proprietary products. Gross margin was flat in the fourth quarter as higher sales pricing and a favorable sales mix in North America offset a decline in sales volumes compared to a very strong period of demand in the fourth quarter of 2021. Gross margin as a percentage of sales increased for the full year of 2022, supported by the reliability of our supply chain and strategic procurement in a rising price environment.
  • Seed sales increased in the fourth quarter and the full year of 2022 due to higher pricing along with strong North America corn sales, Latin America soybean sales and Australia canola sales. Gross margin increased for the full year of 2022 due to higher pricing with a decrease in the fourth quarter of 2022 attributed to the timing and mix of seed sales compared to the same period in 2021.
  • Merchandise gross margin increased for the full year of 2022 due to strong margin performance in Australia animal management, farm services and general merchandise, with a decrease in the fourth quarter of 2022 due to an unfavorable foreign exchange rate impact on Australian dollars.
  • Nutrien Financial sales increased in the fourth quarter and full year of 2022 due to higher utilization and adoption of our programs and a higher interest-bearing trade receivable balance, driven by strong commodity pricing.
  • Services and other sales and gross margin decreased in the fourth quarter and full year of 2022 mainly due to lower livestock volumes in Australia, along with an unfavorable foreign exchange rate impact on Australian dollars. Fourth quarter 2022 sales benefited from improved selling rates on North American custom application services.
1. These (and any related guidance, if applicable) are non-IFRS financial measures. See the “Non-IFRS Financial Measures” section for further information.

Potash

 

Three Months Ended December 31

(millions of US dollars, except

Dollars

 

Tonnes (thousands)

 

Average per Tonne

as otherwise noted)

2022

 

2021

% Change

 

2022

 

2021

% Change

 

2022

 

2021

% Change

Manufactured product

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America

536

 

497

 

8

 

959

 

1,002

 

(4)

 

560

 

494

 

13

Offshore

841

 

923

 

(9)

 

1,659

 

2,054

 

(19)

 

506

 

450

 

12

 

1,377

 

1,420

 

(3)

 

2,618

 

3,056

 

(14)

 

526

 

465

 

13

Cost of goods sold

310

 

305

 

2

 

 

 

 

 

 

 

118

 

100

 

18

Gross margin – total

1,067

 

1,115

 

(4)

 

 

 

 

 

 

 

408

 

365

 

12

Expenses 1

198

 

179

 

11

 

Depreciation and amortization

 

34

 

38

 

(11)

EBIT

869

 

936

 

(7)

 

Gross margin excluding depreciation

 

 

 

 

 

Depreciation and amortization

89

 

117

 

(24)

 

and amortization – manufactured 2

442

 

403

 

10

EBITDA/ Adjusted EBITDA

958

 

1,053

 

(9)

 

Potash controllable cash cost of

 

 

 

 

 

 

 

 

 

 

 

 

 

product manufactured 2

 

65

 

52

 

25

1. Includes provincial mining taxes of $190 million (2021 – $173 million).

2. These are non-IFRS financial measures. See the "Non-IFRS Financial Measures" section.

 

Twelve Months Ended December 31

(millions of US dollars, except

Dollars

 

Tonnes (thousands)

 

Average per Tonne

as otherwise noted)

2022

 

2021

% Change

 

2022

 

2021

% Change

 

2022

 

2021

% Change

Manufactured product

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America

2,485

 

1,638

 

52

 

3,729

 

5,159

 

(28)

 

667

 

317

 

110

Offshore

5,414

 

2,398

 

126

 

8,808

 

8,466

 

4

 

615

 

283

 

117

 

7,899

 

4,036

 

96

 

12,537

 

13,625

 

(8)

 

630

 

296

 

113

Cost of goods sold

1,400

 

1,285

 

9

 

 

 

 

 

 

 

112

 

94

 

19

Gross margin – total

6,499

 

2,751

 

136

 

 

 

 

 

 

 

518

 

202

 

156

Expenses 1

1,173

 

512

 

129

 

Depreciation and amortization

 

35

 

36

 

(1)

EBIT

5,326

 

2,239

 

138

 

Gross margin excluding depreciation

 

 

 

 

 

Depreciation and amortization

443

 

488

 

(9)

 

and amortization – manufactured

553

 

238

 

133

EBITDA

5,769

 

2,727

 

112

 

Potash controllable cash cost of

 

 

 

 

 

 

Adjustments 2

 

9

 

(100)

 

product manufactured

 

58

 

52

 

12

Adjusted EBITDA

5,769

 

2,736

 

111

 

 

 

 

 

 

 

 

 

 

 

 

1. Includes provincial mining taxes of $1,149 million (2021 – $466 million).

2. See Note 2 to the unaudited condensed consolidated financial statements.

  • Adjusted EBITDA increased in the full year of 2022 due to higher net realized selling prices and strong offshore sales volumes, which more than offset lower North American sales volumes, higher royalties and provincial mining taxes. Adjusted EBITDA decreased in the fourth quarter of 2022 compared to the same period last year mainly due to lower volumes from cautious purchasing in a declining price environment, partially offset by higher net realized selling prices.
  • Sales volumes decreasedfor the full year of 2022 due to a compressed North American spring application season that resulted in high inventory carry-over and cautious purchasing in key markets during the second half of 2022. Offshore sales volumes were the highest of any full year period on record due to reduced supply from Eastern Europe.
  • Net realized selling price increased in the fourth quarter and full year of 2022 due to the impact of reduced supply from Eastern Europe. Net realized selling prices decreased from the third quarter of 2022 due to a decline in benchmark pricing.
  • Cost of goods sold per tonne in 2022 increased primarily due to higher royalties resulting from increased net realized selling prices.Potashcontrollable cash cost of product manufactured increased due to lower production volumes and a pull forward of maintenance activities in the second half of 2022.

Canpotex Sales by Market

(percentage of sales volumes, except as

Three Months Ended December 31

 

Twelve Months Ended December 31

otherwise noted)

2022

2021

Change

 

2022

2021

Change

Latin America

28

37

(9)

 

34

38

(4)

Other Asian markets 1

35

34

1

 

34

35

(1)

China

16

12

4

 

14

11

3

Other markets

10

11

(1)

 

10

10

India

11

6

5

 

8

6

2

 

100

100

 

 

100

100

 

1. All Asian markets except China and India.

 

 

 

 

 

 

 

Nitrogen

 

Three Months Ended December 31

(millions of US dollars, except

Dollars

 

Tonnes (thousands)

 

Average per Tonne

as otherwise noted)

2022

 

2021

% Change

 

2022

 

2021

% Change

 

2022

 

2021

% Change

Manufactured product

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ammonia

689

 

519

 

33

 

776

 

790

 

(2)

 

887

 

656

 

35

Urea

463

 

552

 

(16)

 

705

 

824

 

(14)

 

657

 

670

 

(2)

Solutions, nitrates and sulfates

389

 

385

 

1

 

1,056

 

1,221

 

(14)

 

368

 

316

 

16

 

1,541

 

1,456

 

6

 

2,537

 

2,835

 

(11)

 

607

 

514

 

18

Cost of goods sold

846

 

725

 

17

 

 

 

 

 

 

 

333

 

256

 

30

Gross margin – manufactured

695

 

731

 

(5)

 

 

 

 

 

 

 

274

 

258

 

6

Gross margin – other 1

4

 

23

 

(83)

 

Depreciation and amortization

 

61

 

52

 

17

Gross margin – total

699

 

754

 

(7)

 

Gross margin excluding depreciation

 

 

 

 

 

Expenses (income) ²

13

 

(2)

 

n/m

 

and amortization – manufactured 4

335

 

310

 

8

EBIT

686

 

756

 

(9)

 

Ammonia controllable cash cost of

 

 

 

 

 

 

Depreciation and amortization

155

 

148

 

5

 

product manufactured 4

 

57

 

45

 

27

EBITDA

841

 

904

 

(7)

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments 3

 

17

 

(100)

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

841

 

921

 

(9)

 

 

 

 

 

 

 

 

 

 

 

 

1. Includes other nitrogen (including ESN®) and purchased products and comprises net sales of $251 million (2021 – $193 million) less cost of goods sold of $247 million (2021 – $170 million).

2. Includes earnings from equity-accounted investees of $41 million (2021 – $41 million).

3. See Note 2 to the unaudited condensed consolidated financial statements.

4. These are non-IFRS financial measures. See the "Non-IFRS Financial Measures" section.

 

Twelve Months Ended December 31

(millions of US dollars, except

Dollars

 

Tonnes (thousands)

 

Average per Tonne

as otherwise noted)

2022

 

2021

% Change

 

2022

 

2021

% Change

 

2022

 

2021

% Change

Manufactured product

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ammonia

2,641

 

1,393

 

90

 

2,715

 

2,919

 

(7)

 

973

 

477

 

104

Urea

1,920

 

1,463

 

31

 

2,757

 

3,059

 

(10)

 

696

 

478

 

46

Solutions, nitrates and sulfates

1,829

 

1,128

 

62

 

4,551

 

4,747

 

(4)

 

402

 

238

 

69

 

6,390

 

3,984

 

60

 

10,023

 

10,725

 

(7)

 

638

 

371

 

72

Cost of goods sold

3,197

 

2,353

 

36

 

 

 

 

 

 

 

319

 

219

 

46

Gross margin – manufactured

3,193

 

1,631

 

96

 

 

 

 

 

 

 

319

 

152

 

110

Gross margin – other 1

88

 

95

 

(7)

 

Depreciation and amortization

 

56

 

52

 

7

Gross margin – total

3,281

 

1,726

 

90

 

Gross margin excluding depreciation

 

 

 

 

 

(Income) expenses ²

(92)

 

(3)

 

n/m

 

and amortization – manufactured

375

 

204

 

84

EBIT

3,373

 

1,729

 

95

 

Ammonia controllable cash cost of

 

 

 

 

 

 

Depreciation and amortization

558

 

557

 

 

product manufactured

 

59

 

50

 

18

EBITDA

3,931

 

2,286

 

72

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments 3

 

22

 

(100)

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

3,931

 

2,308

 

70

 

 

 

 

 

 

 

 

 

 

 

 

1. Includes other nitrogen (including ESN®) and purchased products and comprises net sales of $1,143 million (2021 – $705 million) less cost of goods sold of $1,055 million (2021 – $610 million).

2. Includes earnings from equity-accounted investees of $233 million (2021 – $76 million).

3. See Note 2 to the unaudited condensed consolidated financial statements.

  • Adjusted EBITDA increased in the full year of 2022 primarily due to higher net realized selling prices and higher earnings from equity-accounted investees, which more than offset higher natural gas costs and lower sales volumes. Adjusted EBITDA in the fourth quarter of 2022 decreased as lower sales volumes more than offset an increase in net realized selling prices.
  • Sales volumes decreased in the fourth quarter primarily due to Trinidad gas curtailments, unplanned plant outages that included the impact of extreme cold weather in the quarter and cautious buying activity. Full-year sales volumes were also impacted by a compressed North American spring application season.
  • Net realized selling price was higherin the fourth quarter and full year of 2022 due to strong benchmark prices, in particular for ammonia, resulting from tight global supply and higher energy prices in key nitrogen producing regions.
  • Cost of goods sold per tonne in the fourth quarter and full year of 2022 increased primarily due to higher natural gas, raw material and other input costs. Ammoniacontrollable cash cost of product manufactured increased in the fourth quarter and full year of 2022 due to lower production volumes and higher input costs, mainly electricity costs.

Natural Gas Prices in Cost of Production

 

Three Months Ended December 31

 

Twelve Months Ended December 31

(US dollars per MMBtu, except as otherwise noted)

2022

 

2021

 

% Change

 

2022

 

2021

 

% Change

Overall gas cost excluding realized derivative impact

7.49

 

6.43

 

16

 

7.82

 

4.60

 

70

Realized derivative impact

(0.05)

 

(0.03)

 

67

 

(0.05)

 

0.01

 

n/m

Overall gas cost

7.44

 

6.40

 

16

 

7.77

 

4.61

 

69

 

 

 

 

 

 

 

 

 

 

 

 

Average NYMEX

6.26

 

5.83

 

7

 

6.64

 

3.84

 

73

Average AECO

4.11

 

3.93

 

5

 

4.28

 

2.84

 

51

  • Natural gas prices in our cost of production increased in the fourth quarter and full year of 2022 as a result of higher North American gas index prices and increased gas costs in Trinidad, where our gas prices are linked to ammonia benchmark prices.

Phosphate

 

Three Months Ended December 31

(millions of US dollars, except

Dollars

 

Tonnes (thousands)

 

Average per Tonne

as otherwise noted)

2022

 

2021

% Change

 

2022

 

2021

% Change

 

2022

 

2021

% Change

Manufactured product

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fertilizer

274

 

377

 

(27)

 

391

 

509

 

(23)

 

700

 

741

 

(6)

Industrial and feed

155

 

155

 

 

140

 

202

 

(31)

 

1,107

 

766

 

45

 

429

 

532

 

(19)

 

531

 

711

 

(25)

 

807

 

749

 

8

Cost of goods sold

405

 

374

 

8

 

 

 

 

 

 

 

762

 

526

 

45

Gross margin - manufactured

24

 

158

 

(85)

 

 

 

 

 

 

 

45

 

223

 

(80)

Gross margin – other 1

(8)

 

5

 

n/m

 

Depreciation and amortization

 

109

 

55

 

99

Gross margin – total

16

 

163

 

(90)

 

Gross margin excluding depreciation

 

 

 

 

 

Expenses

46

 

10

 

360

 

and amortization – manufactured 3

154

 

278

 

(44)

EBIT

(30)

 

153

 

n/m

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

58

 

39

 

49

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

28

 

192

 

(85)

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments 2

 

4

 

(100)

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

28

 

196

 

(86)

 

 

 

 

 

 

 

 

 

 

 

 

1. Includes other phosphate and purchased products and comprises net sales of $72 million (2021 – $61 million) less cost of goods sold of $80 million (2021 – $56 million).

2. See Note 2 to the unaudited condensed consolidated financial statements.

3. This is a non-IFRS financial measure. See the "Non-IFRS Financial Measures" section.

 

Twelve Months Ended December 31

(millions of US dollars, except

Dollars

 

Tonnes (thousands)

 

Average per Tonne

as otherwise noted)

2022

 

2021

% Change

 

2022

 

2021

% Change

 

2022

 

2021

% Change

Manufactured product

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fertilizer

1,367

 

1,108

 

23

 

1,696

 

1,840

 

(8)

 

806

 

602

 

34

Industrial and feed

706

 

520

 

36

 

682

 

779

 

(12)

 

1,035

 

667

 

55

 

2,073

 

1,628

 

27

 

2,378

 

2,619

 

(9)

 

872

 

622

 

40

Cost of goods sold

1,562

 

1,227

 

27

 

 

 

 

 

 

 

657

 

469

 

40

Gross margin – manufactured

511

 

401

 

27

 

 

 

 

 

 

 

215

 

153

 

41

Gross margin – other 1

(18)

 

20

 

n/m

 

Depreciation and amortization

 

79

 

58

 

37

Gross margin – total

493

 

421

 

17

 

Gross margin excluding depreciation

 

 

 

 

 

(Income) expenses

(693)

 

36

 

n/m

 

and amortization – manufactured

294

 

211

 

40

EBIT

1,186

 

385

 

208

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

188

 

151

 

25

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

1,374

 

536

 

156

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments 2

(780)

 

4

 

n/m

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

594

 

540

 

10

 

 

 

 

 

 

 

 

 

 

 

 

1. Includes other phosphate and purchased products and comprises net sales of $304 million (2021 – $201 million) less cost of goods sold of $322 million (2021 – $181 million).

2. See Note 2 to the unaudited condensed consolidated financial statements. Includes reversal of impairment of assets of $780 million (2021 – nil).

  • Adjusted EBITDA increased for the full year of 2022 mainly due to higher net realized selling prices, which more than offset higher raw material costs and lower sales volumes. Adjusted EBITDA in the fourth quarter decreased due to lower sales volumes as a result of unplanned plant outages. Included with expenses for the full year of 2022, we recognized a $780 million non-cash impairment of assets reversal due to a more favorable outlook for phosphate margins, which is deducted from adjusted EBITDA.
  • Sales volumes decreased in the fourth quarter and full year of 2022 due to lower production volumes and a condensed North American spring application season.
  • Net realized selling price increased for the full year of 2022 aligned with the increase in global benchmark prices. In the fourth quarter of 2022, higher industrial and feed net realized selling prices more than offset the decline in fertilizer net realized selling prices.
  • Cost of goods sold per tonne increased in the fourth quarter and full year of 2022 primarily due to significantly higher sulfur and ammonia input costs, along with lower production volumes.

Corporate and Others

(millions of US dollars, except as otherwise

 

Three Months Ended December 31

 

Twelve Months Ended December 31

noted)

2022

 

2021

 

% Change

 

2022

 

2021

 

% Change

Selling expenses

5

 

3

 

67

 

(1)

 

(21)

 

(95)

General and administrative expenses

99

 

93

 

6

 

326

 

275

 

19

Share-based compensation (recovery) expense

(59)

 

73

 

n/m

 

63

 

198

 

(68)

Other expenses

67

 

112

 

(40)

 

227

 

253

 

(10)

EBIT

(112)

 

(281)

 

(60)

 

(615)

 

(705)

 

(13)

Depreciation and amortization

16

 

15

 

7

 

71

 

49

 

45

EBITDA

(96)

 

(266)

 

(64)

 

(544)

 

(656)

 

(17)

Adjustments 1

(84)

 

116

 

n/m

 

146

 

348

 

(58)

Adjusted EBITDA

(180)

 

(150)

 

20

 

(398)

 

(308)

 

29

1. See Note 2 to the unaudited condensed consolidated financial statements.

  • General and administrative expenses were higher in the full year of 2022 compared to the same period in 2021 mainly due to increased depreciation and amortization expense, higher donations and higher information technology-related expenses.
  • Share-based compensation (recovery) expense was a recovery in the fourth quarter of 2022 due to a decrease in share price and an expense for the comparative period in 2021 due to an increase in share price. We had a lower expense for the full year of 2022 compared to 2021 mainly due to a lower value of share-based awards outstanding.
  • Other expenses were lower in the fourth quarter of 2022 compared to the same period in 2021 mainly due to net foreign exchange gains in 2022 compared to net foreign exchange losses in 2021 and lower expenses related to asset retirement obligations and accrued environmental costs for our non-operating sites from the changes in our cost and discount rate estimates. This was partially offset by an employee special recognition award expense in 2022. Other expenses were lower in the full year of 2022 compared to the same period in 2021 mainly due to lower COVID-19 related expenses, the absence of cloud computing related expenses from our change in accounting policy in 2021 and lower expenses related to asset retirement obligations and accrued environmental costs for our non-operating sites from the changes in our cost and discount rate estimates. This was partially offset by higher information technology project feasibility costs and an employee special recognition award expense in 2022.

Eliminations

Eliminations are not part of the Corporate and Others segment. Eliminations of gross margin between operating segments were $(28) million for the full year of 2022 compared to $(89) million in the same period of 2021. We had significant eliminations in 2021 due to higher-margin inventories held by our Retail segment as global commodity benchmark prices increased. The magnitude of the rise in prices was lower in 2022.

Finance Costs, Income Taxes and Other Comprehensive Income (Loss)

(millions of US dollars, except as otherwise

Three Months Ended December 31

 

Twelve Months Ended December 31

noted)

2022

 

2021

 

% Change

 

2022

 

2021

 

% Change

Finance costs

188

 

246

 

(24)

 

563

 

613

 

(8)

Income tax expense

353

 

374

 

(6)

 

2,559

 

989

 

159

Other comprehensive income (loss)

119

 

72

 

65

 

(177)

 

78

 

n/m

  • Finance costs were lower in the fourth quarter and full year of 2022 compared to the same periods in 2021 mainly due to the absence of a loss of $142 million on early extinguishment of a portion of our long-term debt in the comparative periods. In the full year of 2022 short-term interest was higher due to increased interest rates and a higher average balance compared to 2021, which more than offset a decrease in long-term interest due to a lower average outstanding balance in 2022.
  • Income tax expense was higher in the full year of 2022 as a result of higher earnings in 2022 compared to the same period in 2021.
  • Other comprehensive income (loss) is primarily driven by changes in our investment in Sinofert Holdings Ltd (“Sinofert”), the currency translation of our foreign operations and net actuarial gains on defined benefit plans. In the fourth quarter of 2022, we had a fair value gain on our investment in Sinofert due to share price increases, compared to a fair value loss due to share price decreases in 2021. In addition, we had higher gains on foreign currency translation of our Retail foreign operations, mainly in Australia and Brazil, compared to the same period in 2021, as these currencies appreciated relative to the US dollar. These factors were partially offset by a lower net actuarial gain on our defined benefit pension plans in the fourth quarter of 2022 compared to the same period in 2021. For the full year of 2022, we had fair value losses on our investment in Sinofert due to share price decreases, compared to fair value gains due to share price increases for the same period in 2021. In addition, we had higher losses on foreign currency translation of our Retail foreign operations, mainly in Canada, compared to the same period in 2021, as this currency depreciated relative to the US dollar, partially offset by higher gains in Brazil, as this currency appreciated relative to the US dollar.

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 2023 full-year guidance, including expectations regarding our adjusted net earnings per share and adjusted EBITDA (consolidated and by segment); expectations regarding our growth and capital allocation intentions and strategies; our advancement of strategic growth initiatives; capital spending expectations for 2023; expectations regarding performance of our operating segments in 2023; our intention to increase potash production capability to 18 million tonnes by 2026; 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 expenses, shipments, consumption, prices and the impact of seasonality, import and export volumes, economic sanctions and the conflict between Ukraine and Russia; Nutrien's ability to develop innovative and sustainable solutions; the negotiation of sales contracts; 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, supplier agreements, availability 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; assumptions with respect to our intention to complete share repurchases under our share repurchase program, including TSX approval and 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; our expectations regarding the impacts, direct and indirect, of the COVID-19 pandemic on our business, customers, business partners, employees, supply chain, other stakeholders and the overall global economy; our expectations regarding the impacts, direct and indirect, of the conflict between Ukraine and Russia on, among other things, global supply and demand, 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 expectations regarding the impact of certain factors on the carrying amount of goodwill associated with our Retail – North America group of CGUs; 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 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; 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 COVID-19 pandemic, including variants of the COVID-19 virus and the efficiency and distribution of vaccines, and its resulting effects on economic conditions, restrictions imposed by public health authorities or governments, including government-imposed vaccine mandates, fiscal and monetary responses by governments and financial institutions to market conditions and disruptions to global supply chains; the conflict between Ukraine and Russia and its potential impact on, among other things, global market conditions and supply and demand, 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; the risk that rising interest rates and/or deteriorated business operating results may result in the impairment of assets or goodwill attributed to certain of our cash generating units; 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 adjusted net earnings per share and adjusted EBITDA (consolidated and by segment) 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 2021 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, February 16, 2023 at 10:00 a.m. Eastern Time.

Telephone Conference dial-in numbers:

  • From Canada and the US 1-888-886-7786
  • International 1-416-764-8683
  • No access code required. Please dial in 15 minutes prior to ensure you are placed on the call in a timely manner.

Live Audio Webcast: Visit https://www.nutrien.com/investors/events/2022-q4-earnings-conference-call

Appendix A - Selected Additional Financial Data

Selected Retail Measures

Three Months Ended December 31

 

Twelve Months Ended December 31

 

2022

 

2021

 

2022

 

2021

Proprietary products gross margin (millions of US dollars)

 

 

 

 

 

 

 

Crop nutrients

55

 

49

 

370

 

328

Crop protection products

58

 

58

 

675

 

527

Seed

(7)

 

22

 

166

 

183

Merchandise

5

 

4

 

12

 

12

All products

111

 

133

 

1,223

 

1,050

Proprietary products margin as a percentage of product line margin (%)

 

 

 

 

 

 

 

Crop nutrients

16

 

12

 

21

 

21

Crop protection products

14

 

14

 

35

 

34

Seed

n/m

 

39

 

39

 

44

Merchandise

11

 

9

 

7

 

7

All products

11

 

11

 

24

 

23

Crop nutrients sales volumes (tonnes – thousands)

 

 

 

 

 

 

 

North America

1,819

 

2,119

 

8,106

 

9,848

International

675

 

702

 

3,407

 

3,535

Total

2,494

 

2,821

 

11,513

 

13,383

Crop nutrients selling price per tonne

 

 

 

 

 

 

 

North America

942

 

725

 

916

 

556

International

896

 

708

 

774

 

512

Total

930

 

721

 

874

 

545

Crop nutrients gross margin per tonne

 

 

 

 

 

 

 

North America

151

 

154

 

182

 

133

International

108

 

144

 

86

 

82

Total

139

 

152

 

153

 

119

 

 

 

 

 

 

 

 

Financial performance measures

 

 

 

 

2022

 

2021

Retail adjusted EBITDA margin (%) 1, 2

 

11

 

11

Retail adjusted EBITDA per US selling location (thousands of US dollars) 1, 2, 3

 

1,923

 

1,481

Retail adjusted average working capital to sales (%) 1, 4

 

17

 

13

Retail adjusted average working capital to sales excluding Nutrien Financial (%) 1, 4

 

2

 

Nutrien Financial adjusted net interest margin (%) 1, 4

 

6.8

 

6.6

Retail cash operating coverage ratio (%) 1, 4

 

55

 

58

Retail normalized comparable store sales (%) 4

 

(4)

 

7

1. Rolling four quarters ended December 31, 2022 and 2021.

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 December 31, 2022

As at
December
31, 2021

(millions of US dollars)

Current

<31 Days
Past Due

31–90 Days
Past Due

>90 Days
Past Due

Gross
Receivables

Allowance 1

Net
Receivables

Net
Receivables

North America

1,658

225

75

78

2,036

(29)

2,007

1,488

International

574

53

14

28

669

(7)

662

662

Nutrien Financial receivables

2,232

278

89

106

2,705

(36)

2,669

2,150

1. Bad debt expense on the above receivables for the twelve months ended December 31, 2022 was $10 million (2021 – $10 million) in the Retail segment.

Selected Nitrogen Measures

Three Months Ended December 31

 

Twelve Months Ended December 31

 

2022

 

2021

 

2022

 

2021

Sales volumes (tonnes – thousands)

 

 

 

 

 

 

 

Fertilizer

1,408

 

1,578

 

5,371

 

6,028

Industrial and feed

1,129

 

1,257

 

4,652

 

4,697

Net sales (millions of US dollars)

 

 

 

 

 

 

 

Fertilizer

854

 

861

 

3,512

 

2,364

Industrial and feed

687

 

595

 

2,878

 

1,620

Net selling price per tonne

 

 

 

 

 

 

 

Fertilizer

607

 

545

 

654

 

392

Industrial and feed

608

 

473

 

619

 

345

Production Measures

Three Months Ended December 31

 

Twelve Months Ended December 31

 

2022

 

2021

 

2022

 

2021

Potash production (Product tonnes – thousands)

2,941

 

3,641

 

13,007

 

13,790

Potash shutdown weeks 1

3

 

 

18

 

14

Ammonia production – total 2

1,400

 

1,641

 

5,759

 

5,996

Ammonia production – adjusted 2, 3

920

 

1,069

 

3,935

 

3,932

Ammonia operating rate (%) 3

83

 

97

 

90

 

90

P2O5 production (P2O5 tonnes – thousands)

288

 

409

 

1,351

 

1,518

P2O5 operating rate (%)

67

 

95

 

79

 

89

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 a company that (a) depict historical or expected future financial performance, financial position or cash flow of a 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 a 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, and IFRS adoption transition adjustments.

Why we use the measure and why it is useful to investors: It is not impacted by long-term investment and financing decisions, but rather focuses on the performance of our day-to-day operations. It provides a measure of our ability to service debt and to meet other payment obligations, and as a component of employee remuneration calculations.

 

Three Months Ended December 31

 

Twelve Months Ended December 31

(millions of US dollars)

2022

 

2021

 

2022

 

2021

Net earnings

1,118

 

1,207

 

7,687

 

3,179

Finance costs

188

 

246

 

563

 

613

Income tax expense

353

 

374

 

2,559

 

989

Depreciation and amortization

520

 

497

 

2,012

 

1,951

EBITDA 1

2,179

 

2,324

 

12,821

 

6,732

Share-based compensation (recovery) expense

(59)

 

73

 

63

 

198

Foreign exchange (gain) loss, net of related derivatives

(36)

 

38

 

31

 

39

Integration and restructuring related costs

11

 

(4)

 

46

 

43

Impairment (reversal) of assets

 

21

 

(780)

 

33

COVID-19 related expenses 2

 

11

 

8

 

45

Gain on disposal of investment

 

 

(19)

 

Cloud computing transition adjustment 3

 

 

 

36

Adjusted EBITDA

2,095

 

2,463

 

12,170

 

7,126

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. Cloud computing transition adjustment relates to cloud computing costs in prior years that no longer qualify for capitalization based on an agenda decision issued by the IFRS Interpretations Committee in April 2021.

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, IFRS adoption transition adjustments, and gain/loss on early extinguishment of debt or on settlement of derivatives due to discontinuance of hedge accounting. In 2022, we amended our calculation of adjusted net earnings to adjust for a gain on settlement of a derivative due to discontinued hedge accounting. There was no similar gain or loss in the comparative period. 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
December 31, 2022

 

Twelve Months Ended
December 31, 2022

 

 

 

 

 

Per

 

 

 

 

 

Per

(millions of US dollars, except as otherwise

Increases

 

 

 

Diluted

 

Increases

 

 

 

Diluted

noted)

(Decreases)

 

Post-Tax

 

Share

 

(Decreases)

 

Post-Tax

 

Share

Net earnings attributable to equity holders of Nutrien

 

 

1,112

 

2.15

 

 

 

7,660

 

14.18

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

Share-based compensation (recovery) expense

(59)

 

(45)

 

(0.09)

 

63

 

47

 

0.10

Foreign exchange (gain) loss, net of related derivatives

(36)

 

(27)

 

(0.05)

 

31

 

23

 

0.05

Integration and restructuring related costs

11

 

8

 

0.01

 

46

 

35

 

0.06

Reversal of impairment of assets

 

 

 

(780)

 

(619)

 

(1.15)

COVID-19 related expenses

 

 

 

8

 

6

 

0.01

Gain on disposal of investment

 

 

 

(19)

 

(14)

 

(0.03)

Gain on settlement of discontinued hedge accounting derivative

 

 

 

(18)

 

(14)

 

(0.03)

Adjusted net earnings

 

 

1,048

 

2.02

 

 

 

7,124

 

13.19

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

December 31, 2021

 

Twelve Months Ended

December 31, 2021

 

 

 

 

 

Per

 

 

 

 

 

Per

(millions of US dollars, except as otherwise

Increases

 

 

 

Diluted

 

Increases

 

 

 

Diluted

noted)

(Decreases)

 

Post-Tax

 

Share

 

(Decreases)

 

Post-Tax

 

Share

Net earnings attributable to equity holders of Nutrien

 

 

1,201

 

2.11

 

 

 

3,153

 

5.52

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

Share-based compensation expense

73

 

56

 

0.10

 

198

 

151

 

0.27

Foreign exchange loss, net of related derivatives

38

 

29

 

0.05

 

39

 

30

 

0.05

Integration and restructuring related (recovery) costs

(4)

 

(3)

 

(0.01)

 

43

 

33

 

0.06

Impairment of assets

21

 

16

 

0.03

 

33

 

25

 

0.04

COVID-19 related expenses

11

 

8

 

0.01

 

45

 

34

 

0.06

Cloud computing transition adjustment

 

 

 

36

 

27

 

0.05

Loss on early extinguishment of debt

142

 

104

 

0.18

 

142

 

104

 

0.18

Adjusted net earnings

 

 

1,411

 

2.47

 

 

 

3,557

 

6.23

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, IFRS adoption transition adjustments, and gain/loss on early extinguishment of debt or on settlement of derivatives due to discontinuance of hedge accounting.

Growth Capital

Most directly comparable IFRS financial measure: Cash used in investing activities.

Definition: Cash used in investing activities related to growth initiatives consisting of investing capital expenditures, which are a component of capital expenditures, plus business acquisitions, net of cash acquired per the unaudited condensed consolidated statements of cash flows.

Why we use the measure and why it is useful to investors: To demonstrate how we allocate our capital to our various priorities including growth and expansion projects and acquisitions.

(millions of US dollars)

2022

2021

Cash used in investing activities

(2,901)

(1,807)

Sustaining capital expenditures

1,449

1,247

Mine development and pre-stripping capital expenditures

234

156

Borrowing costs on property, plant and equipment

(37)

(29)

Other 1

12

(64)

Net changes in non-cash working capital 1

44

(101)

Growth capital

(1,199)

(598)

1. Included in investing activities as per the unaudited condensed consolidated statement of cash flows.

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. In 2022, we replaced Potash cash COPM with this new financial measure. 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 December 31

 

Twelve Months Ended December 31

(millions of US dollars, except as otherwise noted)

2022

 

2021

 

2022

 

2021

Total COGS – Potash

310

 

305

 

1,400

 

1,285

Change in inventory

38

 

64

 

58

 

22

Other adjustments 1

(12)

 

1

 

(41)

 

(6)

COPM

336

 

370

 

1,417

 

1,301

Depreciation and amortization in COPM

(89)

 

(115)

 

(406)

 

(430)

Royalties in COPM

(40)

 

(47)

 

(190)

 

(107)

Natural gas costs and carbon taxes in COPM

(17)

 

(17)

 

(62)

 

(51)

Controllable cash COPM

190

 

191

 

759

 

713

Production tonnes (tonnes – thousands)

2,941

 

3,641

 

13,007

 

13,790

Potash controllable cash COPM per tonne

65

 

52

 

58

 

52

1. Other adjustments include unallocated production overhead that is recognized as part of cost of goods sold but is not included in the measurement of inventory and changes in inventory balances.

Ammonia Controllable Cash COPM Per Tonne

Most directly comparable IFRS financial measure: Total manufactured COGS for the Nitrogen segment.

Definition: Total Nitrogen COGS excluding depreciation and amortization expense included in COGS, cash COGS for products other than ammonia, other adjustments, and natural gas and steam costs, divided by net ammonia production tonnes.

Why we use the measure and why it is useful to investors: To assess operational performance. Ammonia controllable cash COPM excludes the effects of production from other periods, the costs of natural gas and steam, and long-term investment decisions, supporting a focus on the performance of our day-to-day operations.

 

Three Months Ended December 31

 

Twelve Months Ended December 31

(millions of US dollars, except as otherwise noted)

2022

 

2021

 

2022

 

2021

Total Manufactured COGS – Nitrogen

846

 

725

 

3,197

 

2,353

Total Other COGS – Nitrogen

247

 

170

 

1,055

 

610

Total COGS – Nitrogen

1,093

 

895

 

4,252

 

2,963

Depreciation and amortization in COGS

(131)

 

(126)

 

(465)

 

(473)

Cash COGS for products other than ammonia

(648)

 

(519)

 

(2,560)

 

(1,740)

Ammonia

 

 

 

 

 

 

 

Total cash COGS before other adjustments

314

 

250

 

1,227

 

750

Other adjustments 1

(65)

 

(30)

 

(210)

 

(96)

Total cash COPM

249

 

220

 

1,017

 

654

Natural gas and steam costs in COPM

(212)

 

(186)

 

(855)

 

(515)

Controllable cash COPM

37

 

34

 

162

 

139

Production tonnes (net tonnes 2 – thousands)

655

 

758

 

2,754

 

2,769

Ammonia controllable cash COPM per tonne

57

 

45

 

59

 

50

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.

2. Ammonia tonnes available for sale, as not upgraded to other Nitrogen products.

Retail Adjusted Average Working Capital to Sales and Retail Adjusted Average Working Capital to Sales Excluding Nutrien Financial

Definition: Retail adjusted average working capital divided by Retail adjusted sales for the last four rolling quarters. We exclude in our calculations the sales and working capital of certain acquisitions during the first year following the acquisition. We also look at this metric excluding Nutrien Financial revenue and working capital.

Why we use the measure and why it is useful to investors: To evaluate operational efficiency. A lower or higher percentage represents increased or decreased efficiency, respectively. The metric excluding Nutrien Financial shows the impact that the working capital of Nutrien Financial has on the ratio.

 

Rolling four quarters ended December 31, 2022

(millions of US dollars, except as otherwise noted)

Q1 2022

 

Q2 2022

 

Q3 2022

 

Q4 2022

 

Average/Total

Current assets

12,392

 

12,487

 

11,262

 

11,668

 

 

Current liabilities

(9,223)

 

(9,177)

 

(5,889)

 

(8,708)

 

 

Working capital

3,169

 

3,310

 

5,373

 

2,960

 

3,703

Working capital from certain recent acquisitions

 

 

 

 

 

Adjusted working capital

3,169

 

3,310

 

5,373

 

2,960

 

3,703

Nutrien Financial working capital

(2,274)

 

(4,404)

 

(3,898)

 

(2,669)

 

 

Adjusted working capital excluding Nutrien Financial

895

 

(1,094)

 

1,475

 

291

 

392

 

 

 

 

 

 

 

 

 

 

Sales

3,861

 

9,422

 

3,980

 

4,087

 

 

Sales from certain recent acquisitions

 

 

 

 

 

Adjusted sales

3,861

 

9,422

 

3,980

 

4,087

 

21,350

Nutrien Financial revenue

(49)

 

(91)

 

(65)

 

(62)

 

 

Adjusted sales excluding Nutrien Financial

3,812

 

9,331

 

3,915

 

4,025

 

21,083

 

 

 

 

 

 

 

 

 

 

Adjusted average working capital to sales (%)

 

17

Adjusted average working capital to sales excluding Nutrien Financial (%)

 

2

 

 

 

 

 

 

 

 

 

 

 

Rolling four quarters ended December 31, 2021

(millions of US dollars, except as otherwise noted)

Q1 2021

 

Q2 2021

 

Q3 2021

 

Q4 2021

 

Average/Total

Current assets

9,160

 

9,300

 

8,945

 

9,924

 

 

Current liabilities

(7,530)

 

(7,952)

 

(5,062)

 

(7,828)

 

 

Working capital

1,630

 

1,348

 

3,883

 

2,096

 

2,239

Working capital from certain recent acquisitions

 

 

 

 

 

Adjusted working capital

1,630

 

1,348

 

3,883

 

2,096

 

2,239

Nutrien Financial working capital

(1,221)

 

(3,072)

 

(2,820)

 

(2,150)

 

 

Adjusted working capital excluding Nutrien Financial

409

 

(1,724)

 

1,063

 

(54)

 

(77)

 

 

 

 

 

 

 

 

 

 

Sales

2,972

 

7,537

 

3,347

 

3,878

 

 

Sales from certain recent acquisitions

 

 

 

 

 

Adjusted sales

2,972

 

7,537

 

3,347

 

3,878

 

17,734

Nutrien Financial revenue

(25)

 

(59)

 

(54)

 

(51)

 

 

Adjusted sales excluding Nutrien Financial

2,947

 

7,478

 

3,293

 

3,827

 

17,545

 

 

 

 

 

 

 

 

 

 

Adjusted average working capital to sales (%)

 

13

Adjusted average working capital to sales excluding Nutrien Financial (%)

 

Nutrien Financial Adjusted Net Interest Margin

Definition: Nutrien Financial revenue less deemed interest expense divided by average Nutrien Financial 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 December 31, 2022

(millions of US dollars, except as otherwise noted)

Q1 2022

 

Q2 2022

 

Q3 2022

 

Q4 2022

 

Total/Average

Nutrien Financial revenue

49

 

91

 

65

 

62

 

 

Deemed interest expense 1

(6)

 

(12)

 

(12)

 

(11)

 

 

Net interest

43

 

79

 

53

 

51

 

226

 

 

 

 

 

 

 

 

 

 

Average Nutrien Financial receivables

2,274

 

4,404

 

3,898

 

2,669

 

3,311

Nutrien Financial adjusted net interest margin (%)

 

 

 

 

 

 

 

 

6.8

 

 

 

 

 

 

 

 

 

 

 

Rolling four quarters ended December 31, 2021

(millions of US dollars, except as otherwise noted)

Q1 2021

 

Q2 2021

 

Q3 2021

 

Q4 2021

 

Total/Average

Nutrien Financial revenue

25

 

59

 

54

 

51

 

 

Deemed interest expense 1

(6)

 

(8)

 

(10)

 

(12)

 

 

Net interest

19

 

51

 

44

 

39

 

153

 

 

 

 

 

 

 

 

 

 

Average Nutrien Financial receivables

1,221

 

3,072

 

2,820

 

2,150

 

2,316

Nutrien Financial adjusted net interest margin (%)

 

 

 

 

 

 

 

 

6.6

1. Average borrowing rate applied to the notional debt required to fund the portfolio of receivables from customers monitored and serviced by Nutrien Financial.

Retail Cash Operating Coverage Ratio

Definition: Retail selling, general and administrative, and other expenses (income), excluding depreciation and amortization expense, divided by Retail gross margin excluding depreciation and amortization expense in cost of goods sold, for the last four rolling quarters.

Why we use the measure and why it is useful to investors: To understand the costs and underlying economics of our Retail operations and to assess our Retail operating performance and ability to generate free cash flow.

 

Rolling four quarters ended December 31, 2022

(millions of US dollars, except as otherwise noted)

Q1 2022

 

Q2 2022

 

Q3 2022

 

Q4 2022

 

Total

Selling expenses

722

 

1,013

 

821

 

836

 

3,392

General and administrative expenses

45

 

54

 

50

 

51

 

200

Other (income) expenses

(12)

 

21

 

19

 

1

 

29

Operating expenses

755

 

1,088

 

890

 

888

 

3,621

Depreciation and amortization in operating expenses

(167)

 

(171)

 

(204)

 

(198)

 

(740)

Operating expenses excluding depreciation and amortization

588

 

917

 

686

 

690

 

2,881

 

 

 

 

 

 

 

 

 

 

Gross margin

845

 

2,340

 

917

 

1,077

 

5,179

Depreciation and amortization in cost of goods sold

2

 

4

 

2

 

4

 

12

Gross margin excluding depreciation and amortization

847

 

2,344

 

919

 

1,081

 

5,191

Cash operating coverage ratio (%)

 

 

 

 

 

 

 

 

55

 

 

 

 

 

 

 

 

 

 

 

Rolling four quarters ended December 31, 2021

(millions of US dollars, except as otherwise noted)

Q1 2021

 

Q2 2021

 

Q3 2021

 

Q4 2021

 

Total

Selling expenses

667

 

863

 

746

 

848

 

3,124

General and administrative expenses

39

 

41

 

45

 

43

 

168

Other expenses

15

 

34

 

17

 

20

 

86

Operating expenses

721

 

938

 

808

 

911

 

3,378

Depreciation and amortization in operating expenses

(175)

 

(166)

 

(180)

 

(173)

 

(694)

Operating expenses excluding depreciation and amortization

546

 

772

 

628

 

738

 

2,684

 

 

 

 

 

 

 

 

 

 

Gross margin

652

 

1,858

 

917

 

1,173

 

4,600

Depreciation and amortization in cost of goods sold

2

 

3

 

2

 

5

 

12

Gross margin excluding depreciation and amortization

654

 

1,861

 

919

 

1,178

 

4,612

Cash operating coverage ratio (%)

 

 

 

 

 

 

 

 

58

Retail Normalized Comparable Store Sales

Most directly comparable IFRS financial measure: Retail sales from comparable base as a component of total Retail sales.

Definition: Prior year comparable store sales adjusted for average selling price (which generally moves with published potash, nitrogen and phosphate benchmark prices), acquisitions of new stores and foreign exchange rates used in the current year.

Why we use the measure and why it is useful to investors: To evaluate sales growth by adjusting for fluctuations in commodity prices and foreign exchange rates. Includes locations we have owned for more than 12 months.

 

Twelve Months Ended December 31

(millions of US dollars, except as otherwise noted)

2022

 

2021

Sales from comparable base

 

 

 

Prior period

17,734

 

14,785

Adjustments 1

(64)

 

(476)

Revised prior period

17,670

 

14,309

Current period

21,092

 

17,511

Comparable store sales (%)

19

 

22

Prior period normalized for average selling prices and foreign exchange rates

21,867

 

16,350

Normalized comparable store sales (%)

(4)

 

7

1. Adjustments relate to prior period sales related to closed locations or businesses that no longer exist in the current period in order to provide a comparable base in our calculation.

Appendix C – Other Financial Measures

Supplementary Financial Measures

Supplementary financial measures are financial measures disclosed by a 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 a 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.

Sustaining capital expenditures: Represents capital expenditures that are required to sustain operations at existing levels and include major repairs and maintenance, and plant turnarounds.

Investing capital expenditures: Represents capital expenditures related to significant expansions of current operations or to create cost savings (synergies). Investing capital expenditures excludes capital outlays for business acquisitions and equity-accounted investees.

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.

Condensed Consolidated Financial Statements

Unaudited - In millions of US dollars except as otherwise noted

Condensed Consolidated Statements of Earnings

 

 

Three Months Ended

 

Twelve Months Ended

 

 

December 31

 

December 31

 

Note

2022

 

2021

 

2022

 

2021

SALES

2

7,533

 

7,267

 

37,884

 

27,712

Freight, transportation and distribution

 

244

 

198

 

872

 

851

Cost of goods sold

 

4,383

 

3,863

 

21,588

 

17,452

GROSS MARGIN

 

2,906

 

3,206

 

15,424

 

9,409

Selling expenses

 

844

 

855

 

3,414

 

3,142

General and administrative expenses

 

162

 

148

 

565

 

477

Provincial mining taxes

 

190

 

173

 

1,149

 

466

Share-based compensation (recovery) expense

 

(59)

 

73

 

63

 

198

Impairment (reversal) of assets

 

 

21

 

(780)

 

33

Other expenses

4

110

 

109

 

204

 

312

EARNINGS BEFORE FINANCE COSTS AND INCOME TAXES

1,659

 

1,827

 

10,809

 

4,781

Finance costs

 

188

 

246

 

563

 

613

EARNINGS BEFORE INCOME TAXES

 

1,471

 

1,581

 

10,246

 

4,168

Income tax expense

 

353

 

374

 

2,559

 

989

NET EARNINGS

 

1,118

 

1,207

 

7,687

 

3,179

Attributable to

 

 

 

 

 

 

 

 

Equity holders of Nutrien

 

1,112

 

1,201

 

7,660

 

3,153

Non-controlling interest

 

6

 

6

 

27

 

26

NET EARNINGS

 

1,118

 

1,207

 

7,687

 

3,179

 

 

 

 

 

 

 

 

 

NET EARNINGS PER SHARE ATTRIBUTABLE TO EQUITY HOLDERS OF NUTRIEN ("EPS")

Basic

 

2.15

 

2.11

 

14.22

 

5.53

Diluted

 

2.15

 

2.11

 

14.18

 

5.52

Weighted average shares outstanding for basic EPS

 

516,810,000

 

568,027,000

 

538,475,000

 

569,664,000

Weighted average shares outstanding for diluted EPS

 

517,964,000

 

569,653,000

 

540,010,000

 

571,289,000

Condensed Consolidated Statements of Comprehensive Income

 

Three Months Ended

 

Twelve Months Ended

 

December 31

 

December 31

(Net of related income taxes)

2022

 

2021

 

2022

 

2021

NET EARNINGS

1,118

 

1,207

 

7,687

 

3,179

Other comprehensive income (loss)

 

 

 

 

 

 

 

Items that will not be reclassified to net earnings:

 

 

 

 

 

 

 

Net actuarial gain on defined benefit plans

22

 

95

 

83

 

95

Net fair value gain (loss) on investments

17

 

(35)

 

(44)

 

81

Items that have been or may be subsequently reclassified to net earnings:

 

 

 

 

 

 

 

Gain (loss) on currency translation of foreign operations

73

 

14

 

(199)

 

(115)

Other

7

 

(2)

 

(17)

 

17

OTHER COMPREHENSIVE INCOME (LOSS)

119

 

72

 

(177)

 

78

COMPREHENSIVE INCOME

1,237

 

1,279

 

7,510

 

3,257

Attributable to

 

 

 

 

 

 

 

Equity holders of Nutrien

1,230

 

1,273

 

7,484

 

3,232

Non-controlling interest

7

 

6

 

26

 

25

COMPREHENSIVE INCOME

1,237

 

1,279

 

7,510

 

3,257

 

 

 

 

 

 

 

 

(See Notes to the Condensed Consolidated Financial Statements)

Condensed Consolidated Statements of Cash Flows

 

 

Three Months Ended

 

Twelve Months Ended

 

 

December 31

 

December 31

 

Note

2022

 

2021

 

2022

 

2021

 

 

 

 

Note 1

 

 

 

Note 1

OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

Net earnings

 

1,118

 

1,207

 

7,687

 

3,179

Adjustments for:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

520

 

497

 

2,012

 

1,951

Share-based compensation (recovery) expense

 

(59)

 

73

 

63

 

198

Impairment (reversal) of assets

 

 

21

 

(780)

 

33

Gain on disposal of investment

 

 

 

(19)

 

Loss on early extinguishment of debt

 

 

142

 

 

142

Cloud computing transition adjustment

 

 

 

 

36

Provision for (recovery of) deferred income tax

 

30

 

66

 

182

 

(31)

Long-term income tax receivables

 

72

 

 

273

 

Net undistributed earnings of equity-accounted investees

 

(42)

 

(43)

 

(181)

 

(44)

Other long-term assets, liabilities and miscellaneous

 

(29)

 

40

 

21

 

83

Cash from operations before working capital changes

 

1,610

 

2,003

 

9,258

 

5,547

Changes in non-cash operating working capital:

 

 

 

 

 

 

 

 

Receivables

 

2,683

 

1,432

 

(919)

 

(1,669)

Inventories

 

(937)

 

(1,652)

 

(1,281)

 

(1,459)

Prepaid expenses and other current assets

 

(904)

 

(1,092)

 

114

 

(227)

Payables and accrued charges

 

2,284

 

2,946

 

938

 

1,694

CASH PROVIDED BY OPERATING ACTIVITIES

 

4,736

 

3,637

 

8,110

 

3,886

INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

Capital expenditures 1

 

(974)

 

(646)

 

(2,438)

 

(1,884)

Business acquisitions, net of cash acquired

 

(329)

 

(18)

 

(407)

 

(88)

Other

 

48

 

121

 

(12)

 

64

Net changes in non-cash working capital

 

33

 

78

 

(44)

 

101

CASH USED IN INVESTING ACTIVITIES

 

(1,222)

 

(465)

 

(2,901)

 

(1,807)

FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Transaction costs related to debt

 

(6)

 

 

(9)

 

(7)

(Repayment of) proceeds from short-term debt, net

 

(2,338)

 

307

 

529

 

1,344

Proceeds from long-term debt

5

1,004

 

(3)

 

1,045

 

86

Repayment of long-term debt

5

(511)

 

(2,207)

 

(561)

 

(2,212)

Repayment of principal portion of lease liabilities

 

(85)

 

(78)

 

(341)

 

(320)

Dividends paid to Nutrien's shareholders

 

(251)

 

(266)

 

(1,031)

 

(1,045)

Repurchase of common shares

6

(1,214)

 

(885)

 

(4,520)

 

(1,035)

Issuance of common shares

 

 

12

 

168

 

200

Other

 

(11)

 

 

(11)

 

(14)

CASH USED IN FINANCING ACTIVITIES

 

(3,412)

 

(3,120)

 

(4,731)

 

(3,003)

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS

 

(24)

 

4

 

(76)

 

(31)

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

 

78

 

56

 

402

 

(955)

CASH AND CASH EQUIVALENTS – BEGINNING OF PERIOD

 

823

 

443

 

499

 

1,454

CASH AND CASH EQUIVALENTS – END OF PERIOD

 

901

 

499

 

901

 

499

Cash and cash equivalents is composed of:

 

 

 

 

 

 

 

 

Cash

 

775

 

428

 

775

 

428

Short-term investments

 

126

 

71

 

126

 

71

 

 

901

 

499

 

901

 

499

SUPPLEMENTAL CASH FLOWS INFORMATION

 

 

 

 

 

 

 

 

Interest paid

 

202

 

172

 

482

 

491

Income taxes paid

 

379

 

79

 

1,882

 

435

Total cash outflow for leases

 

120

 

94

 

459

 

393

1. Includes additions to property, plant and equipment, and intangible assets for the three months ended December 31, 2022 of $910 and $64 (2021 – $606 and $40), respectively, and for the twelve months ended December 31, 2022 of $2,227 and $211 (2021 – $1,777 and $107), respectively.

 

(See Notes to the Condensed Consolidated Financial Statements)

Condensed Consolidated Statements of Changes in Shareholders’ Equity

 

 

 

 

 

 

 

Accumulated Other Comprehensive

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) Income ("AOCI")

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss 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, 2020

569,260,406

 

15,673

 

205

 

(62)

 

(57)

 

(119)

 

6,606

 

22,365

 

38

 

22,403

Net earnings

 

 

 

 

 

 

3,153

 

3,153

 

26

 

3,179

Other comprehensive (loss) income

 

 

 

(114)

 

193

 

79

 

 

79

 

(1)

 

78

Shares repurchased (Note 6)

(15,982,154)

 

(442)

 

(47)

 

 

 

 

(616)

 

(1,105)

 

 

(1,105)

Dividends declared

 

 

 

 

 

 

(1,046)

 

(1,046)

 

 

(1,046)

Non-controlling interest transactions

 

 

 

 

 

 

 

 

(16)

 

(16)

Effect of share-based compensation including issuance of common shares

4,424,437

 

226

 

(9)

 

 

 

 

 

217

 

 

217

Transfer of net gain on cash flow hedges

 

 

 

 

(11)

 

(11)

 

 

(11)

 

 

(11)

Transfer of net actuarial gain on defined benefit plans

 

 

 

 

(95)

 

(95)

 

95

 

 

 

Share cancellation

(210,173)

 

 

 

 

 

 

 

 

 

BALANCE – DECEMBER 31, 2021

557,492,516

 

15,457

 

149