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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Nutrien Ltd | NYSE:NTR | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.31 | 0.59% | 52.93 | 53.79 | 52.91 | 53.16 | 989,216 | 01:00:00 |
all amounts are in US dollars except as otherwise noted
Nutrien Ltd. (Nutrien) (NYSE, TSX: NTR) announced today its 2019 fourth-quarter and full year 2019 results, with a net loss from continuing operations of $48 million ($0.08 diluted loss per share) in the fourth quarter of 2019. Fourth-quarter adjusted net earnings was $0.09 per share and adjusted EBITDA was $664 million. Adjusted net earnings (total and per share amounts) and adjusted EBITDA, together with the related annual guidance, Potash adjusted EBITDA, free cash flow and free cash flow including changes in non-cash working capital are non-IFRS financial measures. See the “Non-IFRS Financial Measures” section for further information.
“Nutrien’s earnings held up well in 2019 and we generated strong free cash flow in a very tough agriculture market. We executed on our strategic plan, growing our Retail business with several strategic acquisitions and made great strides with the roll-out and adoption of our leading Retail digital platform and financial tools. Agriculture fundamentals are strengthening and grower sentiment is positive. We expect higher planting and favorable farm economics to support strong North American crop input demand in 2020,” commented Chuck Magro, Nutrien’s President and CEO.
“Our business is designed to provide stability in times of market weakness, with significant leverage through a recovery in fertilizer markets. We remain focused on optimizing our network, allocating capital to grow our Retail business and leading our industry in returning capital to shareholders,” added Mr. Magro.
Highlights:
Market Outlook
Agriculture and Retail
Crop Nutrient Markets
We believe potash production curtailments lowered inventory at the producer level, while continued grower consumption lowered distributor inventory in key markets outside of China. We expect global potash demand to rebound in 2020, driven by increased planting acreage in North America, a rebound in applications in Indonesia and Malaysia, lower beginning inventories and strong affordability. We estimate global potash deliveries in 2020 will be between 66 to 68 million tonnes in 2020, similar to the record global delivery levels of 2018.
Financial Outlook and Guidance
Based on market factors detailed above, we are issuing 2020 adjusted net earnings guidance of $1.90 to $2.60 per share and adjusted EBITDA guidance of $3.8 to $4.3 billion.
All guidance numbers, including those noted above and related sensitivities are outlined in the tables below.
2020 Guidance Ranges 1
Low
High
Adjusted net earnings per share 2
$
1.90
$
2.60
Adjusted EBITDA (billions) 2
$
3.8
$
4.3
Retail EBITDA (billions)
$
1.4
$
1.5
Potash EBITDA (billions)
$
1.3
$
1.5
Nitrogen EBITDA (billions)
$
1.2
$
1.4
Phosphate EBITDA (millions)
$
180
$
250
Potash sales tonnes (millions) 3
12.3
12.7
Nitrogen sales tonnes (millions) 3
11.0
11.6
Depreciation and amortization (billions)
$
1.8
$
1.9
Effective tax rate on continuing operations
23
%
25
%
Sustaining capital expenditures (billions)
$
1.0
$
1.1
Impact to
Adjusted
Adjusted
2020 Annual Assumptions & Sensitivities 1
EBITDA
EPS4
$1/MMBtu change in NYMEX5
$
165
$
0.21
$20/tonne change in realized Potash selling prices
$
205
$
0.25
$20/tonne change in realized Ammonia selling prices
$
40
$
0.05
$20/tonne change in realized Urea selling prices
$
65
$
0.09
2020 FX Rate CAD to USD
1.30
2020 NYMEX natural gas ($US/MMBtu)
$2.25
1 See the “Forward-Looking Statements” section. 2 See the “Non-IFRS Financial Measures” section. 3 Manufactured products only. Nitrogen excludes ESN® and Rainbow products. 4 Assumes 574 million shares outstanding. 5 Nitrogen related impact.
Consolidated Results
Three Months Ended December 31
Twelve Months Ended December 31
(millions of US dollars)
2019
2018
% Change
2019
2018
% Change
Sales
3,442
3,762
(9)
20,023
19,636
2
Freight, transportation and distribution
172
189
(9)
768
864
(11)
Cost of goods sold
2,256
2,314
(3)
13,814
13,380
3
Gross margin
1,014
1,259
(19)
5,441
5,392
1
Expenses
951
713
33
3,579
4,978
(28)
Net (loss) earnings from continuing operations
(48)
296
n/m
992
(31)
n/m
Net earnings from discontinued operations
-
2,906
(100)
-
3,604
(100)
Net (loss) earnings
(48)
3,202
n/m
992
3,573
(72)
EBITDA 1
499
944
(47)
3,661
2,006
83
Adjusted EBITDA 1
664
924
(28)
4,025
3,934
2
Free cash flow ("FCF") 1
138
403
(66)
2,157
1,975
9
FCF including changes in non-cash working capital 1
2,068
1,647
26
2,647
837
216
1 See the "Non-IFRS Financial Measures" section.
Our fourth-quarter net loss from continuing operations was caused by the impact of a temporary slow down in global fertilizer demand that more than offset a strong performance by Retail. 2019 net earnings from continuing operations increased compared to 2018 due to solid operational results, the continued benefit of Merger related synergies and operational improvements and a non-cash impairment of our New Brunswick potash facility in 2018.
Our net earnings from discontinued operations in 2018 was related to the required divestiture of certain equity investments in connection with the Merger.
Segment Results
In the first quarter of 2019, our Executive Leadership Team reassessed our product groupings and decided to evaluate the performance of ammonium sulfate as part of the Nitrogen segment, rather than the Phosphate and Sulfate segment as previously reported in 2018. Effective January 1, 2019, we have four reportable operating segments: Retail, Potash, Nitrogen and Phosphate. Comparative amounts presented on a segmented basis have been restated accordingly. We also renamed our “Others” segment to “Corporate and Others”.
Detailed descriptions of our operating segments can be found in our 2018 Annual Report dated February 20, 2019 in the “Operating Segment Performance & Outlook” section.
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, 2019 to the results for the three and twelve months ended December 31, 2018, respectively and unless otherwise noted. See Appendix A for a summary of our results for the twelve months ended December 31, 2019 by operating segment.
Retail
Three Months Ended December 31
(millions of US dollars, except
Dollars
Gross Margin
Gross Margin (%)
as otherwise noted)
2019
2018
% Change
2019
2018
% Change
2019
2018
Sales
Crop nutrients 1
907
917
(1)
186
184
1
21
20
Crop protection products
635
644
(1)
281
270
4
44
42
Seed
99
103
(4)
60
56
7
61
54
Merchandise 2
211
142
49
44
27
63
21
19
Services and other
319
211
51
165
125
32
52
59
2,171
2,017
8
736
662
11
34
33
Cost of goods sold 2
1,435
1,355
6
Gross margin
736
662
11
Expenses 3
667
580
15
Earnings before finance costs and taxes ("EBIT")
69
82
(16)
Depreciation and amortization
162
132
23
EBITDA
231
214
8
1 Includes intersegment sales. See Note 2 to the unaudited condensed consolidated financial statements as at and for the three and twelve months ended December 31, 2019 (''condensed consolidated financial statements''). 2 Certain immaterial figures have been reclassified or grouped together for the three months ended December 31, 2018. 3 Includes selling expenses of $668 million (2018 – $571 million).
Potash
Three Months Ended December 31
(millions of US dollars, except
Dollars
Tonnes (thousands)
Average per Tonne
as otherwise noted)
2019
2018
% Change
2019
2018
% Change
2019
2018
% Change
Manufactured product 1
Net sales
North America
146
177
(18)
651
731
(11)
226
242
(7)
Offshore
204
459
(56)
1,234
2,126
(42)
164
216
(24)
350
636
(45)
1,885
2,857
(34)
186
223
(17)
Cost of goods sold
211
271
(22)
112
95
18
Gross margin - manufactured
139
365
(62)
74
128
(42)
Gross margin - other 2
-
1
(100)
Depreciation and amortization
35
32
9
Gross margin - total
139
366
(62)
Gross margin excluding depreciation
Expenses 3
56
64
(13)
and amortization - manufactured 4
109
160
(32)
EBIT
83
302
(73)
Potash cash cost of product
Depreciation and amortization
66
92
(28)
manufactured 4
82
67
22
EBITDA
149
394
(62)
1 Includes intersegment sales. See Note 2 to the condensed consolidated financial statements. 2 Includes other potash and purchased products and is comprised of net sales of $Nil (2018 – $1 million) less cost of goods sold of $Nil (2018 – $Nil). 3 Includes provincial mining and other taxes of $50 million (2018 – $56 million). 4 See the "Non-IFRS Financial Measures" section.
Canpotex Sales by Market
(percentage of sales volumes, except as
Three Months Ended December 31
Twelve Months Ended December 31
otherwise noted)
2019
2018
% Change
2019
2018
% Change
Latin America
31
33
(6)
31
33
(6)
Other Asian markets 1
27
28
(4)
27
31
(13)
China
17
17
-
22
18
22
India
7
14
(50)
10
10
-
Other markets
18
8
125
10
8
25
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)
2019
2018 ¹
% Change
2019
2018 ¹
% Change
2019
2018 ¹
% Change
Manufactured product 2
Net sales
Ammonia
141
235
(40)
571
808
(29)
245
290
(16)
Urea
193
231
(16)
695
687
1
278
337
(18)
Solutions, nitrates and sulfates
166
180
(8)
1,096
1,016
8
152
177
(14)
500
646
(23)
2,362
2,511
(6)
212
257
(18)
Cost of goods sold
404
439
(8)
171
175
(2)
Gross margin - manufactured
96
207
(54)
41
82
(50)
Gross margin - other 3
11
17
(35)
Depreciation and amortization
60
43
40
Gross margin - total
107
224
(52)
Gross margin excluding depreciation
(Income) Expenses
(11)
11
n/m
and amortization - manufactured 4
101
125
(19)
EBIT
118
213
(45)
Ammonia controllable cash cost of
Depreciation and amortization
141
108
31
product manufactured 4
48
44
9
EBITDA
259
321
(19)
1 Restated for the reclassification of sulfate from the Phosphate segment. See Note 2 to the condensed consolidated financial statements.
2 Includes intersegment sales. See Note 2 to the condensed consolidated financial statements.
3 Includes other nitrogen (including ESN® and Rainbow) and purchased products and is comprised of net sales of $103 million (2018 – $99 million) less cost of goods sold of $92 million (2018 – $82 million).
4 See the "Non-IFRS Financial Measures" section.
Natural Gas Prices
Three Months Ended December 31
Twelve Months Ended December 31
(US dollars per MMBtu, except as otherwise noted)
2019
2018
% Change
2019
2018
% Change
Overall gas cost excluding realized derivative impact
2.46
2.87
(14)
2.47
2.54
(3)
Realized derivative impact
0.06
0.14
(57)
0.11
0.29
(62)
Overall gas cost
2.52
3.01
(16)
2.58
2.83
(9)
Average NYMEX
2.50
3.64
(31)
2.63
3.09
(15)
Average AECO
1.76
1.45
21
1.22
1.19
3
Phosphate
Three Months Ended December 31
(millions of US dollars, except
Dollars
Tonnes (thousands)
Average per Tonne
as otherwise noted)
2019
2018 ¹
% Change
2019
2018 ¹
% Change
2019
2018 ¹
% Change
Manufactured product 2
Net sales
Fertilizer
155
255
(39)
466
601
(22)
334
423
(21)
Industrial and feed
105
106
(1)
181
207
(13)
581
513
13
260
361
(28)
647
808
(20)
403
446
(10)
Cost of goods sold
255
346
(26)
395
428
(8)
Gross margin - manufactured
5
15
(67)
8
18
(56)
Gross margin - other 3
1
(2)
n/m
Depreciation and amortization
88
66
33
Gross margin - total
6
13
(54)
Gross margin excluding depreciation
Expenses
9
13
(31)
and amortization - manufactured 4
96
84
14
EBIT
(3)
-
-
Depreciation and amortization
57
53
8
EBITDA
54
53
2
1 Restated for the reclassification of sulfate to the Nitrogen segment. See Note 2 to the condensed consolidated financial statements. 2 Includes intersegment sales. See Note 2 to the condensed consolidated financial statements. 3 Includes other phosphate and purchased products and is comprised of net sales of $27 million (2018 - $45 million) less cost of goods sold of $26 million (2018 - $47 million). 4 See the "Non-IFRS Financial Measures" section.
Forward-Looking Statements
Certain statements and other information included and incorporated by reference in this document 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 2020 annual guidance, including expectations regarding our adjusted net earnings per share and adjusted EBITDA (both consolidated and by segment); capital spending expectations for 2020; expectations regarding performance of our operating segments in 2020; our operating segment market outlooks and market conditions for 2020, and including anticipated supply and demand for our products and services, expected market and industry conditions with respect to crop nutrient application rates, planted acres, crop mix, prices and the impact of currency fluctuations and import and export volumes; and acquisitions and divestitures, and the expected synergies associated with various acquisitions, including timing thereof. 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, this list is not exhaustive of the factors that may affect any of the forward-looking statements and the reader should not place an undue reliance on these assumptions and such forward-looking statements. 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 that we will be able to implement our standards, controls, procedures and policies at any acquired businesses to realize the expected synergies; that future business, regulatory and industry conditions will be within the parameters expected by us, including with respect to prices, margins, demand, supply, product availability, supplier agreements, availability and cost of labor and interest, exchange and effective tax rates; the completion of our expansion projects on schedule, as planned and on budget; assumptions with respect to global economic conditions and the accuracy of our market outlook expectations for 2020 and in the future; the adequacy of our cash generated from operations and our ability to access our credit facilities or capital markets for additional sources of financing; our ability to identify suitable candidates for acquisitions and divestitures and negotiate acceptable terms; our ability to maintain investment grade ratings and achieve our performance targets; and the receipt, on time, of all necessary permits, utilities and project approvals with respect to our expansion projects and that we will have the resources necessary to meet the projects’ approach.
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; 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; regional natural gas supply restrictions; counterparty and sovereign risk; delays in completion of turnarounds at our major facilities; gas supply interruptions; any significant impairment of the carrying value 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; and other risk factors detailed from time to time in Nutrien reports filed with the Canadian securities regulators and the Securities and Exchange Commission in the United States.
The purpose of our expected adjusted net earnings per share, adjusted EBITDA and EBITDA by segment guidance ranges, as well as our adjusted net earnings per share and adjusted EBITDA price and volume and input cost sensitivities ranges, are to assist readers in understanding our expected and targeted financial results, and this information may not be appropriate for other purposes.
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 References
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”, “Abbreviated Company Names and Sources” and “Terms and Measures” sections of our 2018 Annual Report dated February 20, 2019. 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 data are stated in millions of US dollars, unless otherwise noted.
About Nutrien
Nutrien is the world's largest provider of crop inputs and services, playing a critical role in helping growers around the globe increase food production in a sustainable manner. We produce and distribute 27 million tonnes of potash, nitrogen and phosphate products world-wide. With this capability and our leading agriculture retail network, we are well positioned to supply the needs of our customers. We operate with a long-term view and are committed to working with our stakeholders as we address our economic, environmental and social priorities. The scale and diversity of our integrated portfolio provides a stable earnings base, multiple avenues for growth and the opportunity to return capital to shareholders.
Contact us 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 Wednesday, February 19, 2020 at 10:00 am Eastern Time.
Appendix A - Selected Additional Financial Data
Twelve Months Ended December 31, 2019 Operating Segment Results
Retail
Twelve Months Ended December 31
(millions of US dollars, except
Dollars
Gross Margin
Gross Margin (%)
as otherwise noted)
2019
2018
% Change
2019
2018
% Change
2019
2018
Sales
Crop nutrients 1
4,989
4,577
9
1,032
923
12
21
20
Crop protection products
4,983
4,862
2
1,173
1,155
2
24
24
Seed
1,712
1,687
1
336
333
1
20
20
Merchandise 2
598
584
2
109
103
6
18
18
Services and other
939
810
16
590
521
13
63
64
13,221
12,520
6
3,240
3,035
7
25
24
Cost of goods sold 2
9,981
9,485
5
Gross margin
3,240
3,035
7
Expenses 3
2,604
2,328
12
EBIT
636
707
(10)
Depreciation and amortization
595
499
19
EBITDA
1,231
1,206
2
1 Includes intersegment sales. See Note 2 to the condensed consolidated financial statements. 2 Certain immaterial figures have been reclassified or grouped together for the twelve months ended December 31, 2018. 3 Includes selling expenses of $2,484 million (2018 – $2,303 million).
Potash
Twelve Months Ended December 31
(millions of US dollars, except
Dollars
Tonnes (thousands)
Average per Tonne
as otherwise noted)
2019
2018
% Change
2019
2018
% Change
2019
2018
% Change
Manufactured product 1
Net sales
North America
978
1,007
(3)
4,040
4,693
(14)
242
214
13
Offshore
1,625
1,657
(2)
7,481
8,326
(10)
217
199
9
2,603
2,664
(2)
11,521
13,019
(12)
226
205
10
Cost of goods sold
1,103
1,182
(7)
96
91
5
Gross margin - manufactured
1,500
1,482
1
130
114
14
Gross margin - other 2
1
2
(50)
Depreciation and amortization
34
31
10
Gross margin - total
1,501
1,484
1
Impairment of assets
-
1,809
(100)
Gross margin excluding depreciation
Expenses 3
298
282
6
and amortization - manufactured 4
164
145
13
EBIT
1,203
(607)
n/m
Potash cash cost of product
Depreciation and amortization
390
404
(3)
manufactured 4
63
60
5
EBITDA
1,593
(203)
n/m
Adjusted EBITDA 4
1,593
1,606
(1)
1 Includes intersegment sales. See Note 2 to the condensed consolidated financial statements. 2 Includes other potash and purchased products and is comprised of net sales of $1 million (2018 – $3 million) less cost of goods sold of $Nil (2018 – $1 million). 3 Includes provincial mining and other taxes of $287 million (2018 – $244 million). 4 See the "Non-IFRS Financial Measures" section.
Nitrogen
Twelve Months Ended December 31
(millions of US dollars, except
Dollars
Tonnes (thousands)
Average per Tonne
as otherwise noted)
2019
2018 ¹
% Change
2019
2018 ¹
% Change
2019
2018 ¹
% Change
Manufactured product 2
Net sales
Ammonia
743
903
(18)
2,971
3,330
(11)
250
271
(8)
Urea
932
895
4
3,037
3,003
1
307
298
3
Solutions, nitrates and
sulfates
706
729
(3)
4,262
4,265
-
166
171
(3)
2,381
2,527
(6)
10,270
10,598
(3)
232
238
(3)
Cost of goods sold
1,749
1,777
(2)
170
168
1
Gross margin - manufactured
632
750
(16)
62
70
(11)
Gross margin - other 3
68
70
(3)
Depreciation and amortization
52
42
24
Gross margin - total
700
820
(15)
Gross margin excluding depreciation
(Income) Expenses
(4)
47
n/m
and amortization - manufactured 4
114
112
2
EBIT
704
773
(9)
Ammonia controllable cash cost of
Depreciation and amortization
535
442
21
product manufactured 4
45
43
5
EBITDA
1,239
1,215
2
1 Restated for the reclassification of sulfate from the Phosphate segment. See the ''Segment Results'' section and Note 2 to the condensed consolidated financial statements. 2 Includes intersegment sales. See Note 2 to the condensed consolidated financial statements. 3 Includes other nitrogen (including ESN® and Rainbow) and purchased products and is comprised of net sales of $467 million (2018 – $438 million) less cost of goods sold of $399 million (2018 – $368 million). 4 See the "Non-IFRS Financial Measures" section.
Phosphate
Twelve Months Ended December 31
(millions of US dollars, except
Dollars
Tonnes (thousands)
Average per Tonne
as otherwise noted)
2019
2018 ¹
% Change
2019
2018 ¹
% Change
2019
2018 ¹
% Change
Manufactured product 2
Net sales
Fertilizer
790
995
(21)
2,130
2,425
(12)
371
410
(10)
Industrial and feed
426
424
-
759
847
(10)
561
500
12
1,216
1,419
(14)
2,889
3,272
(12)
421
434
(3)
Cost of goods sold
1,218
1,329
(8)
422
406
4
Gross margin - manufactured
(2)
90
n/m
(1)
28
n/m
Gross margin - other 3
(3)
(2)
50
Depreciation and amortization
82
59
39
Gross margin - total
(5)
88
n/m
Gross margin excluding depreciation
Expenses
38
26
46
and amortization - manufactured 4
81
87
(7)
EBIT
(43)
62
n/m
Depreciation and amortization
237
193
23
EBITDA
194
255
(24)
1 Restated for the reclassification of sulfate to the Nitrogen segment. See the ''Segment Results'' section and Note 2 to the condensed consolidated financial statements. 2 Includes intersegment sales. See Note 2 to the condensed consolidated financial statements. 3 Includes other phosphate and purchased products and is comprised of net sales of $152 million (2018 - $142 million) less cost of goods sold of $155 million (2018 - $144 million). 4 See the "Non-IFRS Financial Measures" section.
Selected Retail measures
Three Months Ended December 31
Twelve Months Ended December 31
2019
2018
2019
2018
Proprietary products margin as a percentage of
product line margin (%)
Crop nutrients
15
11
23
21
Crop protection products
8
8
34
37
Seed
11
16
38
38
All Products
8
8
24
25
Crop nutrients sales volumes (tonnes -
thousands)
North America
1,558
1,543
8,812
8,547
International
559
447
2,236
2,142
Total
2,117
1,990
11,048
10,689
Crop nutrients selling price per tonne
North America
436
456
465
437
International
408
479
398
395
Total
428
461
452
428
Crop nutrients gross margin per tonne
North America
95
96
102
94
International
68
80
60
57
Total
88
92
93
86
Financial performance measures
2019 Target
2019 Actuals
Retail EBITDA to sales (%) 1, 2
10
9
Retail adjusted average working capital to sales (%) 1, 2
20
23
Retail cash operating coverage ratio (%) 1, 2
60
62
Retail normalized comparable store sales (%) 2
(1)
Retail EBITDA per US selling location (thousands of US dollars) 1, 2
967
1 Rolling four quarters ended December 31, 2019. 2 See the "Non-IFRS Financial Measures" section.
Selected Nitrogen measures
Three Months Ended December 31
Twelve Months Ended December 31
2019
2018
2019
2018
Sales volumes (tonnes - thousands)
Fertilizer
1,350
1,331
5,554
5,680
Industrial and feed
1,012
1,180
4,716
4,918
Net sales (millions of US dollars)
Fertilizer
311
359
1,466
1,444
Industrial and feed
189
287
915
1,083
Net selling price per tonne
Fertilizer
230
269
264
254
Industrial and feed
187
243
194
220
Production measures
Three Months Ended December 31
Twelve Months Ended December 31
2019
2018
2019
2018
Potash production (Product tonnes - thousands)
1,939
3,039
11,700
12,842
Potash shutdown weeks 1
28
7
55
39
Nitrogen production (Ammonia tonnes - thousands) 2
1,401
1,547
6,164
6,372
Ammonia operating rate (%) 3
94
87
91
92
Phosphate production (P2O5 tonnes - thousands) 4
390
412
1,514
1,551
Phosphate P2O5 operating rate (%) 4
91
96
89
91
1 Represents weeks of full production shutdown, excluding the impact of any periods of reduced operating rates and planned routine annual maintenance shutdowns and announced workforce reductions. 2 All figures are provided on a gross production basis. 3 Excludes Trinidad and Joffre. 4 Excludes Redwater. Comparative figures were restated to exclude Redwater.
Appendix B - Non-IFRS Financial Measures
We use both IFRS and certain non-IFRS financial measures to assess performance. Non-IFRS financial measures are numerical measures of a company’s performance, that either exclude or include amounts that are not normally excluded or included in the most directly comparable measures calculated and presented in accordance with IFRS. In evaluating these measures, investors should consider that the methodology applied in calculating such measures may differ among companies and analysts.
Management believes the non-IFRS financial measures 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 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, their definitions and why management uses each measure. It includes reconciliations to the most directly comparable IFRS measures.
EBITDA, Adjusted EBITDA and Potash Adjusted EBITDA
Most directly comparable IFRS financial measure: Net earnings (loss) from continuing operations.
Definition: EBITDA is calculated as net earnings (loss) from continuing operations before finance costs, income taxes and depreciation and amortization. Adjusted EBITDA is calculated as net earnings (loss) from continuing operations before finance costs, income taxes, depreciation and amortization, Merger and related costs, acquisition and integration related costs, share-based compensation, defined benefit plans curtailment gain, impairment of assets, and foreign exchange gain/loss, net of related derivatives. In the fourth quarter of 2019, we amended our calculations of adjusted EBITDA and restated the comparative periods to exclude the impact of foreign exchange gain/loss, net of related derivatives, as foreign exchange changes are not indicative of our operating performance. We have also amended our calculations of adjusted EBITDA to adjust for acquisition and integration related costs for certain acquisitions such as Ruralco. There were no similar acquisitions in the comparative periods.
Why we use the measure and why it is useful to investors: These are meaningful measures because they are not impacted by long-term investment and financing decisions, but rather focus on the performance of our day-to-day operations. These provide a measure of our ability to service debt and to meet other payment obligations.
Three Months Ended December 31
Twelve Months Ended December 31
(millions of US dollars)
2019
2018
2019
2018
Net (loss) earnings from continuing operations
(48)
296
992
(31)
Finance costs
141
144
554
538
Income tax (recovery) expense
(30)
106
316
(93)
Depreciation and amortization
436
398
1,799
1,592
EBITDA
499
944
3,661
2,006
Merger and related costs
25
27
82
170
Acquisition and integration related costs
16
-
16
-
Share-based compensation
9
(33)
104
116
Defined benefit plans curtailment gain
-
(6)
-
(157)
Impairment of assets
87
-
120
1,809
Foreign exchange loss (gain), net of
related derivatives
28
(8)
42
(10)
Adjusted EBITDA
664
924
4,025
3,934
Three Months Ended December 31
Twelve Months Ended December 31
(millions of US dollars)
2019
2018
2019
2018
Potash EBITDA
149
394
1,593
(203)
Impairment of assets
-
-
-
1,809
Potash adjusted EBITDA
149
394
1,593
1,606
Adjusted EBITDA, Adjusted Net Earnings and Adjusted Net Earnings Per Share Guidance
This guidance is provided on a non-IFRS basis. 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 due to unknown variables 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. Guidance excludes the impacts of acquisition and integration related costs, share-based compensation and foreign exchange gain/loss, net of related derivatives.
Adjusted Net Earnings and Adjusted Net Earnings Per Share
Most directly comparable IFRS financial measure: Net earnings from continuing operations and net earnings per share.
Definition: Net earnings from continuing operations before Merger and related costs, acquisition and integration related costs, share-based compensation, impairment of assets and foreign exchange gain/loss (net of related derivatives), net of tax. In the fourth quarter of 2019, we amended our calculations of adjusted net earnings to exclude the impact of foreign exchange gain/loss, net of derivatives, as foreign exchange changes are not indicative of our operating performance. We have also amended our calculations of adjusted net earnings to adjust for acquisition and integration related costs for certain acquisitions such as Ruralco.
Why we use the measure and why it is useful to investors: Focuses on the performance of our day-to-day operations excluding the effects of non-operating items.
Three Months Ended
December 31, 2019
Twelve Months Ended
December 31, 2019
Per
Per
(millions of US dollars, except as otherwise
Increases
Diluted
Increases
Diluted
noted)
(Decreases)
Post-Tax
Share
(Decreases)
Post-Tax
Share
Net (loss) earnings from continuing operations
(48)
(0.08)
992
1.70
Adjustments:
Merger and related costs
25
15
0.02
82
62
0.10
Acquisition and integration related costs
16
11
0.02
16
12
0.02
Share-based compensation
9
6
0.01
104
79
0.14
Impairment of assets
87
53
0.09
120
91
0.16
Foreign exchange loss, net of
related derivatives
28
17
0.03
42
32
0.05
Adjusted net earnings
54
0.09
1,268
2.17
Free Cash Flow and Free Cash Flow Including Changes in Non-Cash Working Capital
Most directly comparable IFRS financial measure: Cash from operations before working capital changes.
Definition: Cash from operations before working capital changes less sustaining capital expenditures and cash provided by operating activities from discontinued operations. We also calculate this measure including changes in non-cash working capital.
Why we use the measure and why it is useful to investors: For evaluation of liquidity and financial strength, and as a component of employee remuneration calculations. These are also useful as an indicator of our ability to service debt, meet other payment obligations and make strategic investments. These do not represent residual cash flow available for discretionary expenditures.
Three Months Ended December 31
Twelve Months Ended December 31
(millions of US dollars)
2019
2018
2019
2018
Cash from operations before working capital changes
489
724
3,175
3,190
Cash used in (provided by) operating activities from
discontinued operations
-
26
-
(130)
Sustaining capital expenditures
(351)
(347)
(1,018)
(1,085)
Free cash flow
138
403
2,157
1,975
Changes in non-cash working capital
1,930
1,244
490
(1,138)
Free cash flow including changes in non-cash
working capital
2,068
1,647
2,647
837
Potash Cash Cost of Product Manufactured (“COPM”)
Most directly comparable IFRS financial measure: Cost of goods sold (“COGS”) for the Potash segment.
Definition: Potash COGS for the period excluding depreciation and amortization expense and inventory and other adjustments divided by the production tonnes for the period.
Why we use the measure and why it is useful to investors: To assess operational performance. Potash cash COPM excludes the effects of production from other periods 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)
2019
2018
2019
2018
Total COGS - Potash
211
271
1,103
1,183
Change in inventory
11
33
10
(5)
Other adjustments
-
(4)
(16)
(14)
COPM
222
300
1,097
1,164
Depreciation and amortization included in COPM
(63)
(98)
(355)
(391)
Cash COPM
159
202
742
773
Production tonnes (tonnes - thousands)
1,939
3,039
11,700
12,842
Potash cash COPM per tonne
82
67
63
60
Ammonia Controllable Cash COPM
Most directly comparable IFRS financial measure: COGS for the Nitrogen segment.
Definition: The total of COGS for the Nitrogen segment 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)
2019
2018
2019
2018
Total COGS - Nitrogen
496
521
2,148
2,145
Depreciation and amortization in COGS
(122)
(108)
(462)
(442)
Cash COGS for products other than ammonia
(274)
(286)
(1,226)
(1,212)
Ammonia
Total cash COGS before other adjustments
100
127
460
491
Other adjustments 1
(22)
-
(57)
(28)
Total cash COPM
78
127
403
463
Natural gas and steam costs
(52)
(90)
(273)
(321)
Controllable cash COPM
26
37
130
142
Production tonnes (net tonnes 2 - thousands)
544
843
2,887
3,320
Ammonia controllable cash COPM per tonne
48
44
45
43
1 Includes changes in inventory balances and other adjustments.
2 Ammonia tonnes available for sale, as not upgraded to other Nitrogen products.
Gross Margin Excluding Depreciation and Amortization Per Tonne - Manufactured
Most directly comparable IFRS financial measure: Gross margin.
Definition: Gross margin from manufactured products per tonne less depreciation and amortization per tonne. Reconciliations are provided in the “Segment Results” section and “Appendix A – Selected Additional Financial Data”.
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.
Retail EBITDA to Sales
Most directly comparable IFRS financial measure: Retail EBITDA divided by Retail sales.
Definition: Retail EBITDA divided by Retail sales for the last four rolling quarters.
Why we use the measure and why it is useful to investors: To evaluate operational efficiency. A higher or lower percentage represents increased or decreased efficiency, respectively.
Rolling four quarters ended December 31, 2019
(millions of US dollars, except as otherwise noted)
Q1 2019
Q2 2019
Q3 2019
Q4 2019
Total
EBITDA
(26)
836
190
231
1,231
Sales
2,039
6,512
2,499
2,171
13,221
EBITDA to Sales (%)
9
Retail Adjusted Average Working Capital to Sales
Most directly comparable IFRS financial measure: (Current assets minus current liabilities for Retail) divided by Retail sales.
Definition: Retail average working capital divided by Retail sales for the last four rolling quarters excluding working capital acquired in the quarter certain recent acquisitions, such as Ruralco, were completed.
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.
Rolling four quarters ended December 31, 2019
(millions of US dollars, except as otherwise noted)
Q1 2019
Q2 2019
Q3 2019
Q4 2019
Average/Total
Working capital
3,190
3,741
3,699
1,759
Working capital from certain recent acquisitions
-
-
(75)
(138)
Adjusted working capital
3,190
3,741
3,624
1,621
3,044
Sales
2,039
6,512
2,499
2,171
13,221
Adjusted average working capital to sales (%)
23
Retail Cash Operating Coverage Ratio
Most directly comparable IFRS financial measure: Retail operating expenses 1 as a percentage of Retail gross margin.
Definition: Retail operating expenses 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, 2019
(millions of US dollars, except as otherwise noted)
Q1 2019
Q2 2019
Q3 2019
Q4 2019
Total
Gross margin
409
1,440
655
736
3,240
Depreciation and amortization in cost of goods sold
2
1
2
2
7
Gross margin excluding depreciation and amortization
411
1,441
657
738
3,247
Operating expenses
571
749
617
667
2,604
Depreciation and amortization in operating expenses
(132)
(143)
(150)
(160)
(585)
Operating expenses excluding depreciation and amortization
439
606
467
507
2,019
Cash operating coverage ratio (%)
62
1 Includes Retail expenses below gross margin including selling expenses, general and administrative expenses and other (income) expenses.
Retail EBITDA per US Selling Location
Most directly comparable IFRS financial measure: Retail US EBITDA.
Definition: Total Retail US EBITDA for the last four rolling quarters adjusted for 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.
Why we use the measure and why it is useful to investors: To assess our US Retail operating performance. Includes locations we have owned for more than 12 months.
Rolling four quarters ended December 31, 2019
(millions of US dollars, except as otherwise noted)
Q1 2019
Q2 2019
Q3 2019
Q4 2019
Total
US EBITDA
(58)
672
142
143
899
Adjustments for acquisitions
(27)
US EBITDA adjusted for acquisitions
872
Number of US selling locations adjusted for acquisitions
902
EBITDA per US selling location (thousands of US dollars)
967
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 published potash, nitrogen and phosphate benchmark prices and foreign exchange rates used in the current year. We retain sales of closed locations in the comparable base if the closed location is in close proximity to an existing location, unless we plan to exit the market area or are unable to economically or logistically serve it. We do not adjust for temporary closures, expansions or renovations of stores.
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)
2019
2018
Sales from comparable base
Current period
12,568
12,253
Prior period
12,520
1
12,103
Comparable store sales (%)
0
1
Prior period normalized for benchmark prices and foreign exchange rates
12,636
1
12,363
Normalized comparable store sales (%)
(1)
(1)
1 Certain immaterial figures have been reclassified for 2018.
Condensed Consolidated Financial Statements
Unaudited in millions of dollars except as otherwise noted
Condensed Consolidated Statements of (Loss) Earnings
Three Months Ended
Twelve Months Ended
December 31
December 31
2019
2018
2019
2018
Note 1
Note 1
SALES
Note 2
3,442
3,762
20,023
19,636
Freight, transportation and distribution
172
189
768
864
Cost of goods sold
2,256
2,314
13,814
13,380
GROSS MARGIN
1,014
1,259
5,441
5,392
Selling expenses
670
579
2,505
2,337
General and administrative expenses
117
111
404
423
Provincial mining and other taxes
39
58
292
250
Share-based compensation expense (recovery)
9
(33)
104
116
Impairment of assets
87
-
120
1,809
Other expenses (income)
29
(2)
154
43
EARNINGS BEFORE FINANCE COSTS AND INCOME TAXES
63
546
1,862
414
Finance costs
141
144
554
538
(LOSS) EARNINGS BEFORE INCOME TAXES
(78)
402
1,308
(124)
Income tax (recovery) expense
(30)
106
316
(93)
NET (LOSS) EARNINGS FROM CONTINUING OPERATIONS
(48)
296
992
(31)
Net earnings from discontinued operations
-
2,906
-
3,604
NET (LOSS) EARNINGS
(48)
3,202
992
3,573
NET (LOSS) EARNINGS PER SHARE FROM CONTINUING OPERATIONS
Basic
(0.08)
0.48
1.70
(0.05)
Diluted
(0.08)
0.48
1.70
(0.05)
NET EARNINGS PER SHARE FROM DISCONTINUED OPERATIONS
Basic
-
4.75
-
5.77
Diluted
-
4.74
-
5.77
NET (LOSS) EARNINGS PER SHARE ("EPS")
Basic
(0.08)
5.23
1.70
5.72
Diluted
(0.08)
5.22
1.70
5.72
Weighted average shares outstanding for basic EPS
572,916,000
612,151,000
582,269,000
624,900,000
Weighted average shares outstanding for diluted EPS
572,916,000
612,947,000
583,102,000
624,900,000
Condensed Consolidated Statements of Comprehensive Income
Three Months Ended
Twelve Months Ended
December 31
December 31
(Net of related income taxes)
2019
2018
2019
2018
NET (LOSS) EARNINGS
(48)
3,202
992
3,573
Other comprehensive income (loss)
Items that will not be reclassified to net (loss) earnings:
Net actuarial gain (loss) on defined benefit plans
7
(2)
7
54
Net fair value gain (loss) on investments
1
(20)
(25)
(99)
Items that have been or may be subsequently reclassified to
net (loss) earnings:
Gain (loss) on currency translation of foreign operations
83
(103)
47
(249)
Other
2
(3)
7
(8)
OTHER COMPREHENSIVE INCOME (LOSS)
93
(128)
36
(302)
COMPREHENSIVE INCOME
45
3,074
1,028
3,271
(See Notes to the Condensed Consolidated Financial Statements)
Condensed Consolidated Statements of Cash Flows
Three Months Ended
Twelve Months Ended
December 31
December 31
2019
2018
2019
2018
Note 1
Note 1
OPERATING ACTIVITIES
Net (loss) earnings
(48)
3,202
992
3,573
Adjustments for:
Depreciation and amortization
436
398
1,799
1,592
Share-based compensation
9
(33)
104
116
Impairment of assets
87
-
120
1,809
(Recovery of) provision for deferred income tax
(1)
(232)
177
(290)
Gain on sale of investments in Sociedad Quimica y Minera de
Chile S.A. ("SQM") and Arab Potash Company
-
(3,558)
-
(4,399)
Income tax related to the sale of the investment in SQM
-
977
-
977
Other long-term liabilities and miscellaneous
6
(30)
(17)
(188)
Cash from operations before working capital changes
489
724
3,175
3,190
Changes in non-cash operating working capital:
Receivables
1,363
1,351
(64)
(153)
Inventories
(1,049)
(1,011)
190
(887)
Prepaid expenses and other current assets
(1,039)
(176)
(238)
561
Payables and accrued charges
2,655
1,080
602
(659)
CASH PROVIDED BY OPERATING ACTIVITIES
2,419
1,968
3,665
2,052
INVESTING ACTIVITIES
Additions to property, plant and equipment
(551)
(492)
(1,728)
(1,405)
Additions to intangible assets
(45)
(51)
(163)
(102)
Business acquisitions, net of cash acquired
(74)
(48)
(911)
(433)
Proceeds from disposal of discontinued operations, net of tax
-
3,561
55
5,394
Purchase of investments
(34)
(12)
(198)
(135)
Cash acquired in Merger
-
-
-
466
Other
39
26
147
102
CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES
(665)
2,984
(2,798)
3,887
FINANCING ACTIVITIES
Transaction costs on long-term debt
-
-
(29)
(21)
(Repayment of) proceeds from short-term debt, net
(1,318)
(4,141)
216
(927)
Proceeds from long-term debt
-
-
1,510
-
Repayment of long-term debt
-
(4)
(1,010)
(12)
Repayment of principal portion of lease liabilities
(68)
-
(234)
-
Dividends paid
(258)
(244)
(1,022)
(952)
Repurchase of common shares
-
(137)
(1,930)
(1,800)
Issuance of common shares
2
-
20
7
CASH USED IN FINANCING ACTIVITIES
(1,642)
(4,526)
(2,479)
(3,705)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND
CASH EQUIVALENTS
(9)
(14)
(31)
(36)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
103
412
(1,643)
2,198
CASH AND CASH EQUIVALENTS – BEGINNING OF PERIOD
568
1,902
2,314
116
CASH AND CASH EQUIVALENTS – END OF PERIOD
671
2,314
671
2,314
Cash and cash equivalents comprised of:
Cash
532
1,506
532
1,506
Short-term investments
139
808
139
808
671
2,314
671
2,314
SUPPLEMENTAL CASH FLOWS INFORMATION
Interest paid
152
141
505
507
Income taxes paid
28
1,032
29
1,155
Total cash outflow for leases
92
-
345
-
(See Notes to the Condensed Consolidated Financial Statements)
Condensed Consolidated Statements of Changes in Shareholders’ Equity
Accumulated Other Comprehensive (Loss) Income ("AOCI")
Net
Actuarial
Loss on
Net Fair
Gain on
Currency
Value
Defined
Translation
Share
Contributed
Gain (Loss) on
Benefit
of Foreign
Total
Retained
Total
Capital
Surplus
Investments
Plans 1
Operations
Other
AOCI
Earnings
Equity 2
BALANCE – DECEMBER 31, 2017
1,806
230
73
-
(2)
(46)
25
6,242
8,303
Merger impact
15,898
7
-
-
-
-
-
(1)
15,904
Net earnings
-
-
-
-
-
-
-
3,573
3,573
Other comprehensive (loss) income
-
-
(99)
54
(249)
(8)
(302)
-
(302)
Shares repurchased
(998)
(23)
-
-
-
-
-
(831)
(1,852)
Dividends declared
-
-
-
-
-
-
-
(1,273)
(1,273)
Effect of share-based compensation including issuance of
common shares
34
17
-
-
-
-
-
-
51
Transfer of net loss on sale of investment
-
-
19
-
-
-
19
(19)
-
Transfer of net loss on cash flow hedges
-
-
-
-
-
21
21
-
21
Transfer of net actuarial gain on defined benefit plans
-
-
-
(54)
-
-
(54)
54
-
BALANCE – DECEMBER 31, 2018
16,740
231
(7)
-
(251)
(33)
(291)
7,745
24,425
Net earnings
-
-
-
-
-
-
-
992
992
Other comprehensive (loss) income
-
-
(25)
7
47
7
36
-
36
Shares repurchased
(992)
-
-
-
-
-
-
(886)
(1,878)
Dividends declared
-
-
-
-
-
-
-
(754)
(754)
Effect of share-based compensation including issuance of
common shares
23
17
-
-
-
-
-
-
40
Transfer of net loss on investment
-
-
3
-
-
-
3
(3)
-
Transfer of net loss on cash flow hedges
-
-
-
-
-
8
8
-
8
Transfer of net actuarial gain on defined benefit plans
-
-
-
(7)
-
-
(7)
7
-
BALANCE – DECEMBER 31, 2019
15,771
248
(29)
-
(204)
(18)
(251)
7,101
22,869
1 Any amounts incurred during a period were closed out to retained earnings at each period-end. Therefore, no balance exists at the beginning or end of period.
2 All equity transactions were attributable to common shareholders.
(See Notes to the Condensed Consolidated Financial Statements)
Condensed Consolidated Balance Sheets
As at
December 31, 2019
December 31, 2018
ASSETS
Current assets
Cash and cash equivalents
671
2,314
Receivables
3,542
3,342
Inventories
4,975
4,917
Prepaid expenses and other current assets
1,477
1,089
10,665
11,662
Non-current assets
Property, plant and equipment
Note 1
20,335
18,796
Goodwill
11,986
11,431
Other intangible assets
2,428
2,210
Investments
821
878
Other assets
564
525
TOTAL ASSETS
46,799
45,502
LIABILITIES
Current liabilities
Short-term debt
976
629
Current portion of long-term debt
502
995
Current portion of lease liabilities
Note 1
214
8
Payables and accrued charges
7,437
6,703
9,129
8,335
Non-current liabilities
Long-term debt
8,553
7,579
Lease liabilities
Note 1
859
12
Deferred income tax liabilities
3,145
2,907
Pension and other post-retirement benefit liabilities
433
395
Asset retirement obligations and accrued environmental costs
1,650
1,673
Other non-current liabilities
161
176
TOTAL LIABILITIES
23,930
21,077
SHAREHOLDERS’ EQUITY
Share capital
15,771
16,740
Contributed surplus
248
231
Accumulated other comprehensive loss
(251)
(291)
Retained earnings
7,101
7,745
TOTAL SHAREHOLDERS’ EQUITY
22,869
24,425
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
46,799
45,502
(See Notes to the Condensed Consolidated Financial Statements)
Notes to the Condensed Consolidated Financial Statements
As at and for the Three and Twelve Months Ended December 31, 2019
NOTE 1 BASIS OF PRESENTATION
Nutrien Ltd. (collectively with its subsidiaries, known as “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. Disclosures related to the merger of Potash Corporation of Saskatchewan Inc. and Agrium Inc. (the “Merger”) can be found in Note 3 of our 2018 annual consolidated financial statements.
Our accounting policies are in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”). The accounting policies and methods of computation used in preparing these unaudited condensed consolidated financial statements are consistent with those used in the preparation of our 2018 annual consolidated financial statements, with the exception of IFRS 16, “Leases” (“IFRS 16”), which was adopted effective January 1, 2019, and resulted in an increase to property, plant and equipment and recognition of lease liabilities of approximately $1 billion at January 1, 2019. Other impacts from adoption of IFRS 16 are disclosed in Note 13 of our first quarter 2019 unaudited condensed consolidated financial statements.
These unaudited condensed consolidated 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 2018 annual consolidated financial statements. Our 2019 annual consolidated financial statements which are expected to be issued in February 2020 will include additional information under IFRS.
Certain immaterial 2018 figures have been reclassified or grouped together in the condensed consolidated statements of earnings, condensed consolidated statements of cash flows, and in the segment information.
In management’s opinion, the unaudited condensed consolidated financial statements include all adjustments necessary to fairly present such information in all material respects.
NOTE 2 SEGMENT INFORMATION
The Company’s four reportable operating segments are: Retail, Potash, Nitrogen and Phosphate. The Retail segment distributes crop nutrients, crop protection products, seed and merchandise, and provides services directly to growers through a network of farm centers in North and South America and Australia. The Potash, Nitrogen and Phosphate segments are differentiated by the chemical nutrient contained in the products that each produces. In the first quarter of 2019, our Chief Operating Decision Maker reassessed product groupings and decided to evaluate the performance of ammonium sulfate as part of the Nitrogen segment, rather than the Phosphate and Sulfate segment, as previously reported in our 2018 annual consolidated financial statements. Comparative amounts for the Nitrogen and Phosphate segments were restated, including EBITDA, which is calculated as net earnings (loss) from continuing operations before finance costs, income taxes and depreciation and amortization. For the three months ended December 31, 2018, Nitrogen reflected increases of $30, $8 and $12 in sales, gross margin and EBITDA, respectively, and for the twelve months ended December 31, 2018, Nitrogen reflected increases of $121, $40 and $53 in sales, gross margin and EBITDA, respectively, as well as $377 in assets as at December 31, 2018, with corresponding decreases in Phosphate. In addition, the “Others” segment was renamed to “Corporate and Others”.
Three Months Ended December 31, 2019
Corporate
Retail
Potash
Nitrogen
Phosphate
and Others
Eliminations
Consolidated
Sales
– third party
2,161
374
575
298
34
-
3,442
– intersegment
10
29
125
43
-
(207)
-
Sales
– total
2,171
403
700
341
34
(207)
3,442
Freight, transportation and distribution
-
53
97
54
-
(32)
172
Net sales
2,171
350
603
287
34
(175)
3,270
Cost of goods sold
1,435
211
496
281
34
(201)
2,256
Gross margin
736
139
107
6
-
26
1,014
Selling expenses
668
2
4
-
(4)
-
670
General and administrative expenses
30
6
4
4
73
-
117
Provincial mining and other taxes
-
50
-
-
(11)
-
39
Share-based compensation expense
-
-
-
-
9
-
9
Impairment of assets
-
-
-
-
87
-
87
Other (income) expenses
(31)
(2)
(19)
5
76
-
29
Earnings (loss) before finance costs and
income taxes
69
83
118
(3)
(230)
26
63
Depreciation and amortization
162
66
141
57
10
-
436
EBITDA
231
149
259
54
(220)
26
499
Assets – at December 31, 2019
19,990
11,696
10,991
2,198
2,129
(205)
46,799
Three Months Ended December 31, 2018
Corporate
Retail
Potash
Nitrogen 1
Phosphate 1
and Others
Eliminations
Consolidated
Sales
– third party
2,003
648
675
399
37
-
3,762
– intersegment
14
40
164
65
-
(283)
-
Sales
– total
2,017
688
839
464
37
(283)
3,762
Freight, transportation and distribution
-
51
94
58
-
(14)
189
Net sales
2,017
637
745
406
37
(269)
3,573
Cost of goods sold
1,355
271
521
393
37
(263)
2,314
Gross margin
662
366
224
13
-
(6)
1,259
Selling expenses
571
5
8
2
(7)
-
579
General and administrative expenses
27
2
3
3
76
-
111
Provincial mining and other taxes
-
56
1
-
1
-
58
Share-based compensation recovery
-
-
-
-
(33)
-
(33)
Other (income) expenses
(18)
1
(1)
8
8
-
(2)
Earnings (loss) before finance costs and
income taxes
82
302
213
-
(45)
(6)
546
Depreciation and amortization
132
92
108
53
13
-
398
EBITDA
214
394
321
53
(32)
(6)
944
Assets – at December 31, 2018
17,964
11,710
10,386
2,406
3,678
(642)
45,502
1 Comparative figures have been restated to reflect the change in the sulfate product grouping from Phosphate and Sulfate to Nitrogen.
Twelve Months Ended December 31, 2019
Corporate
Retail
Potash
Nitrogen
Phosphate
and Others
Eliminations
Consolidated
Sales
– third party
13,183
2,702
2,608
1,397
133
-
20,023
– intersegment
38
207
612
203
-
(1,060)
-
Sales
– total
13,221
2,909
3,220
1,600
133
(1,060)
20,023
Freight, transportation and distribution
-
305
372
232
-
(141)
768
Net sales
13,221
2,604
2,848
1,368
133
(919)
19,255
Cost of goods sold
9,981
1,103
2,148
1,373
133
(924)
13,814
Gross margin
3,240
1,501
700
(5)
-
5
5,441
Selling expenses
2,484
9
25
5
(18)
-
2,505
General and administrative expenses
112
6
15
7
264
-
404
Provincial mining and other taxes
-
287
2
1
2
-
292
Share-based compensation expense
-
-
-
-
104
-
104
Impairment of assets
-
-
-
-
120
-
120
Other expenses (income)
8
(4)
(46)
25
171
-
154
Earnings (loss) before finance costs and
income taxes
636
1,203
704
(43)
(643)
5
1,862
Depreciation and amortization
595
390
535
237
42
-
1,799
EBITDA
1,231
1,593
1,239
194
(601)
5
3,661
Assets – at December 31, 2019
19,990
11,696
10,991
2,198
2,129
(205)
46,799
Twelve Months Ended December 31, 2018
Corporate
Retail
Potash
Nitrogen 1
Phosphate 1
and Others
Eliminations
Consolidated
Sales
– third party
12,470
2,796
2,712
1,508
150
-
19,636
– intersegment
50
220
626
268
-
(1,164)
-
Sales
– total
12,520
3,016
3,338
1,776
150
(1,164)
19,636
Freight, transportation and distribution
-
349
373
215
-
(73)
864
Net sales
12,520
2,667
2,965
1,561
150
(1,091)
18,772
Cost of goods sold
9,485
1,183
2,145
1,473
150
(1,056)
13,380
Gross margin
3,035
1,484
820
88
-
(35)
5,392
Selling expenses
2,303
14
32
10
(22)
-
2,337
General and administrative expenses
100
10
20
9
284
-
423
Provincial mining and other taxes
-
244
3
1
2
-
250
Share-based compensation expense
-
-
-
-
116
-
116
Impairment of assets
-
1,809
-
-
-
-
1,809
Other (income) expenses
(75)
14
(8)
6
106
-
43
Earnings (loss) before finance costs and
income taxes
707
(607)
773
62
(486)
(35)
414
Depreciation and amortization
499
404
442
193
54
-
1,592
EBITDA
1,206
(203)
1,215
255
(432)
(35)
2,006
Assets – at December 31, 2018
17,964
11,710
10,386
2,406
3,678
(642)
45,502
1 Comparative figures have been restated to reflect the change in the sulfate product grouping from Phosphate and Sulfate to Nitrogen.
View source version on businesswire.com: https://www.businesswire.com/news/home/20200218006128/en/
Investor and Media Relations: Richard Downey Vice President, Investor & Corporate Relations (403) 225-7357 Investors@nutrien.com
Investor Relations Tim Mizuno Senior Manager, Investor Relations (306) 933-8548
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