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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 | |
---|---|---|---|---|---|---|---|---|
0.27 | 0.53% | 51.01 | 51.52 | 50.45 | 50.78 | 1,702,320 | 00:00:00 |
Fourth quarter results reflect strong fertilizer market fundamentals in North America. Expect increased fertilizer sales volumes and growth in Retail earnings in 2024.
All amounts are in US dollars except as otherwise noted
Nutrien Ltd. (TSX and NYSE: NTR) announced today its fourth quarter 2023 results, with net earnings of $176 million ($0.35 diluted net earnings per share). Fourth quarter 2023 adjusted net earnings per share1 was $0.37 and adjusted EBITDA1 was $1.1 billion.
“We saw a continuation of strong fertilizer market fundamentals in North America during the fourth quarter driven by improved affordability, an extended fall application season and low channel inventories. Utilizing the strengths of our integrated business, we achieved record fourth-quarter potash deliveries, increased crop nutrient sales volumes across our global Retail network and generated strong cash flow from operations,” commented Ken Seitz, Nutrien’s President and CEO.
“As we look ahead to 2024, we expect to deliver higher fertilizer sales volumes and Retail earnings, supported by increased crop input market stability and demand. We continue to prioritize strategic initiatives that enhance our capability to serve growers in our core markets, maintain the low-cost position and reliability of our assets, and position the Company for growth,” added Mr. Seitz.
Highlights2:
1.
These are non-GAAP financial measures. See the “Non-GAAP Financial Measures” section for further information.2.
Our discussion of highlights set out on this page is a comparison of the results for the twelve months ended December 31, 2023 to the results for the twelve months ended December 31, 2022, unless otherwise noted.Market Outlook and Guidance
Agriculture and Retail
Crop Nutrient Markets
Financial Guidance
We have revised our guidance practice in 2024 to provide forward looking estimates on those metrics that we believe are of value to our shareholders and are less impacted by fertilizer commodity prices. We continue to provide guidance for Retail adjusted EBITDA, fertilizer sales volumes and other key financial modeling metrics as well as fertilizer pricing sensitivities.
All guidance numbers, including those noted above are outlined in the table below. In addition, set forth below are anticipated fertilizer pricing and natural gas price sensitivities relating to adjusted EBITDA (consolidated) and adjusted net earnings per share.
2024 Guidance Ranges 1 as of February 21, 2024
(billions of US dollars, except as otherwise noted)
Low
High
2023 Actual
Retail adjusted EBITDA
1.65
1.85
1.5
Potash sales volumes (million tonnes) 2
13.0
13.8
13.2
Nitrogen sales volumes (million tonnes) 2
10.6
11.2
10.4
Phosphate sales volumes (million tonnes) 2
2.6
2.8
2.6
Depreciation and amortization
2.2
2.3
2.2
Finance costs
0.75
0.85
0.8
Effective tax rate on adjusted earnings (%)
24.0
26.0
28.0
Capital expenditures 3
2.2
2.3
2.7
1 See the "Forward-Looking Statements" section.
2 Manufactured product only.
3 Comprised of sustaining capital expenditures, investing capital expenditures and mine development and pre-stripping capital expenditures which are supplementary financial measures. See the "Other Financial Measures" section.
2024 Annual Sensitivities 1
Effect on
(millions of US dollars, except EPS amounts)
Adjusted EBITDA
Adjusted EPS 4
$25/tonne change in net realized potash selling prices
± 270
± 0.40
$25/tonne change in net realized ammonia selling prices 2
± 40
± 0.05
$25/tonne change in net realized urea and ESN® selling prices
± 80
± 0.10
$25/tonne change in net realized solutions, nitrates and sulfates selling prices
± 130
± 0.20
$1/MMBtu change in NYMEX natural gas price 3
± 190
± 0.30
1 See the “Forward-Looking Statements” section.
2 Includes related impact on natural gas costs in Trinidad, which is linked to benchmark ammonia pricing.
3 Nitrogen related impact.
4 Assumes 496 million shares outstanding for all earnings per share ("EPS") sensitivities.
Consolidated Results
Three Months Ended December 31
Twelve Months Ended December 31
(millions of US dollars, except as otherwise noted)
2023
2022
% Change
2023
2022
% Change
Sales
5,664
7,533
(25
)
29,056
37,884
(23
)
Freight, transportation and distribution
260
244
7
974
872
12
Cost of goods sold
3,636
4,383
(17
)
19,608
21,588
(9
)
Gross margin
1,768
2,906
(39
)
8,474
15,424
(45
)
Expenses
1,475
1,247
18
5,729
4,615
24
Net earnings
176
1,118
(84
)
1,282
7,687
(83
)
Adjusted EBITDA 1
1,075
2,095
(49
)
6,058
12,170
(50
)
Diluted net earnings per share
0.35
2.15
(84
)
2.53
14.18
(82
)
Adjusted net earnings per share 1
0.37
2.02
(82
)
4.44
13.19
(66
)
Cash provided by operating activities
4,150
4,736
(12
)
5,066
8,110
(38
)
Cash used in investing activities
(733
)
(1,222
)
(40
)
(2,958
)
(2,901
)
2
Cash used for dividends and share repurchases 2
(262
)
(1,465
)
(82
)
(2,079
)
(5,551
)
(63
)
1 These are non-GAAP financial measures. See the "Non-GAAP Financial Measures" section.
2 This is a supplementary financial measure. See the "Other Financial Measures" section.
Net earnings and adjusted EBITDA decreased in the fourth quarter and full year of 2023 compared to the same periods in 2022, mainly due to lower net realized selling prices across all segments and lower Retail earnings. This was partially offset by decreased cost of goods sold from lower natural gas and royalty costs, lower provincial mining taxes, higher sales volumes for Retail crop nutrients and increased Potash and Nitrogen sales volumes. For the full year of 2023, we recorded non-cash impairment of assets of $774 million in aggregate primarily related to Retail – South America goodwill and Nitrogen and Phosphate property, plant and equipment, resulting in lower net earnings. For the full year of 2022, we recorded a non-cash impairment reversal of an aggregate of $780 million related to our Phosphate assets. The decrease in cash provided by operating activities in the fourth quarter and full-year 2023 compared to the same periods in 2022 was primarily due to lower earnings across all segments.
Segment Results
Our discussion of segment results set out on the following pages is a comparison of the results for the three and twelve months ended December 31, 2023 to the results for the three and twelve months ended December 31, 2022, unless otherwise noted.
Nutrien Ag Solutions (“Retail”)
Three Months Ended December 31
(millions of US dollars, except
Dollars
Gross Margin
Gross Margin (%)
as otherwise noted)
2023
2022
% Change
2023
2022
% Change
2023
2022
Sales
Crop nutrients
1,808
2,320
(22
)
346
349
(1
)
19
15
Crop protection products
960
981
(2
)
333
413
(19
)
35
42
Seed
202
251
(20
)
36
46
(22
)
18
18
Merchandise
251
264
(5
)
41
41
‐
16
16
Nutrien Financial
70
62
13
70
62
13
100
100
Services and other
236
237
‐
188
194
(3
)
80
82
Nutrien Financial elimination 1
(25
)
(28
)
(11
)
(25
)
(28
)
(11
)
100
100
3,502
4,087
(14
)
989
1,077
(8
)
28
26
Cost of goods sold
2,513
3,010
(17
)
Gross margin
989
1,077
(8
)
Expenses 2
973
888
10
Earnings before finance costs and taxes ("EBIT")
16
189
(92
)
Depreciation and amortization
201
202
‐
EBITDA
217
391
(45
)
Adjustments 3
12
‐
n/m
Adjusted EBITDA
229
391
(41
)
1 Represents elimination of the interest and service fees charged by Nutrien Financial to Retail branches.
2 Includes selling expenses of $841 million (2022 – $836 million).
3 See Note 2 to the unaudited condensed consolidated financial statements.
Twelve Months Ended December 31
(millions of US dollars, except
Dollars
Gross Margin
Gross Margin (%)
as otherwise noted)
2023
2022
% Change
2023
2022
% Change
2023
2022
Sales
Crop nutrients
8,379
10,060
(17
)
1,378
1,766
(22
)
16
18
Crop protection products
6,750
7,067
(4
)
1,553
1,936
(20
)
23
27
Seed
2,295
2,112
9
427
428
‐
19
20
Merchandise
1,001
1,019
(2
)
172
174
(1
)
17
17
Nutrien Financial
322
267
21
322
267
21
100
100
Services and other
927
966
(4
)
710
749
(5
)
77
78
Nutrien Financial elimination
(132
)
(141
)
(6
)
(132
)
(141
)
(6
)
100
100
19,542
21,350
(8
)
4,430
5,179
(14
)
23
24
Cost of goods sold
15,112
16,171
(7
)
Gross margin
4,430
5,179
(14
)
Expenses 1,2
4,215
3,621
16
EBIT
215
1,558
(86
)
Depreciation and amortization
759
752
1
EBITDA
974
2,310
(58
)
Adjustments 2
485
(17
)
n/m
Adjusted EBITDA
1,459
2,293
(36
)
1 Includes selling expenses of $3,375 million (2022 – $3,392 million).
2 Includes non-cash impairment of assets of $465 million (2022 – nil). See Notes 2 and 3 to the unaudited condensed consolidated financial statements.
Potash
Three Months Ended December 31
(millions of US dollars, except
Dollars
Tonnes (thousands)
Average per Tonne
as otherwise noted)
2023
2022
% Change
2023
2022
% Change
2023
2022
% Change
Manufactured product
Net sales
North America
372
536
(31
)
1,089
959
14
342
560
(39
)
Offshore
404
841
(52
)
2,214
1,659
33
182
506
(64
)
776
1,377
(44
)
3,303
2,618
26
235
526
(55
)
Cost of goods sold
349
310
13
106
118
(10
)
Gross margin – total
427
1,067
(60
)
129
408
(68
)
Expenses 1
82
198
(59
)
Depreciation and amortization
36
34
6
EBIT
345
869
(60
)
Gross margin excluding depreciation
Depreciation and amortization
118
89
33
and amortization – manufactured 2
165
442
(63
)
EBITDA / Adjusted EBITDA
463
958
(52
)
Potash controllable cash cost of
product manufactured 2
56
65
(14
)
1 Includes provincial mining taxes of $79 million (2022 – $190 million).
2 These are non-GAAP financial measures. See the "Non-GAAP Financial Measures" section.
Twelve Months Ended December 31
(millions of US dollars, except
Dollars
Tonnes (thousands)
Average per Tonne
as otherwise noted)
2023
2022
% Change
2023
2022
% Change
2023
2022
% Change
Manufactured product
Net sales
North America
1,683
2,485
(32
)
4,843
3,729
30
348
667
(48
)
Offshore
2,076
5,414
(62
)
8,373
8,808
(5
)
248
615
(60
)
3,759
7,899
(52
)
13,216
12,537
5
284
630
(55
)
Cost of goods sold
1,396
1,400
‐
105
112
(6
)
Gross margin – total
2,363
6,499
(64
)
179
518
(65
)
Expenses ¹
422
1,173
(64
)
Depreciation and amortization
35
35
‐
EBIT
1,941
5,326
(64
)
Gross margin excluding depreciation
Depreciation and amortization
463
443
5
and amortization – manufactured
214
553
(61
)
EBITDA / Adjusted EBITDA
2,404
5,769
(58
)
Potash controllable cash cost of
product manufactured
58
58
‐
1 Includes provincial mining taxes of $398 million (2022 – $1,149 million).
Canpotex Sales by Market
(percentage of sales volumes, except as
Three Months Ended December 31
Twelve Months Ended December 31
otherwise noted)
2023
2022
Change
2023
2022
Change
Latin America
32
28
4
47
34
13
Other Asian markets 1
28
35
(7
)
28
34
(6
)
Other markets
10
10
‐
11
10
1
China
19
16
3
9
14
(5
)
India
11
11
‐
5
8
(3
)
100
100
100
100
1 All Asian markets except China and India.
Nitrogen
Three Months Ended December 31
(millions of US dollars, except
Dollars
Tonnes (thousands)
Average per Tonne
as otherwise noted)
2023
2022
% Change
2023
2022
% Change
2023
2022
% Change
Manufactured product
Net sales
Ammonia
271
689
(61
)
651
776
(16
)
416
887
(53
)
Urea and ESN® 1
316
510
(38
)
739
764
(3
)
428
666
(36
)
Solutions, nitrates and sulfates
290
389
(25
)
1,344
1,056
27
215
368
(42
)
877
1,588
(45
)
2,734
2,596
5
321
611
(47
)
Cost of goods sold 1
595
892
(33
)
218
343
(36
)
Gross margin – manufactured
282
696
(59
)
103
268
(62
)
Gross margin – other 1,2
3
3
‐
Depreciation and amortization 1
53
60
(12
)
Gross margin – total
285
699
(59
)
Gross margin excluding depreciation
Expenses 3,4
116
13
792
and amortization – manufactured 5
156
328
(52
)
EBIT
169
686
(75
)
Ammonia controllable cash cost of
Depreciation and amortization
146
155
(6
)
product manufactured 5
59
57
4
EBITDA
315
841
(63
)
Adjustments 4
76
‐
n/m
Adjusted EBITDA
391
841
(54
)
1 Certain immaterial 2022 figures have been reclassified.
2 Includes other nitrogen and purchased products and comprises net sales of $79 million (2022 – $204 million) less cost of goods sold of $76 million (2022 – $201 million).
3 Includes (loss) earnings from equity-accounted investees of $(1) million (2022 – $41 million).
4 Includes a non-cash impairment of assets of $76 million (2022 – nil). See Notes 2 and 3 to the unaudited condensed consolidated financial statements.
5 These are non-GAAP financial measures. See the "Non-GAAP Financial Measures" section.
Twelve Months Ended December 31
(millions of US dollars, except
Dollars
Tonnes (thousands)
Average per Tonne
as otherwise noted)
2023
2022
% Change
2023
2022
% Change
2023
2022
% Change
Manufactured product
Net sales
Ammonia
1,144
2,641
(57
)
2,436
2,715
(10
)
469
973
(52
)
Urea and ESN® 1
1,499
2,134
(30
)
3,125
3,014
4
480
708
(32
)
Solutions, nitrates and sulfates
1,187
1,829
(35
)
4,862
4,551
7
244
402
(39
)
3,830
6,604
(42
)
10,423
10,280
1
367
642
(43
)
Cost of goods sold 1
2,435
3,370
(28
)
233
327
(29
)
Gross margin – manufactured
1,395
3,234
(57
)
134
315
(57
)
Gross margin – other 1,2
(16
)
47
n/m
Depreciation and amortization
55
54
2
Gross margin – total
1,379
3,281
(58
)
Gross margin excluding depreciation
Expenses (income) 3,4
97
(92
)
n/m
and amortization – manufactured
189
369
(49
)
EBIT
1,282
3,373
(62
)
Ammonia controllable cash cost of
Depreciation and amortization
572
558
3
product manufactured
60
59
2
EBITDA
1,854
3,931
(53
)
Adjustments 4
76
‐
n/m
Adjusted EBITDA
1,930
3,931
(51
)
1 Certain immaterial 2022 figures have been reclassified.
2 Includes other nitrogen and purchased products and comprises net sales of $377 million (2022 – $929 million) less cost of goods sold of $393 million
(2022 – $882 million).
3 Includes earnings from equity-accounted investees of $90 million (2022 – $233 million).
4 Includes a non-cash impairment of assets of $76 million (2022 – nil). See Notes 2 and 3 to the unaudited condensed consolidated financial statements.
1 Excludes Trinidad and Joffre.
Natural Gas Prices in Cost of Production
Three Months Ended December 31
Twelve Months Ended December 31
(US dollars per MMBtu, except as otherwise noted)
2023
2022
% Change
2023
2022
% Change
Overall natural gas cost excluding realized derivative impact
3.35
7.49
(55
)
3.51
7.82
(55
)
Realized derivative impact
(0.05
)
(0.05
)
‐
(0.02
)
(0.05
)
(60
)
Overall natural gas cost
3.30
7.44
(56
)
3.49
7.77
(55
)
Average NYMEX
2.88
6.26
(54
)
2.74
6.64
(59
)
Average AECO
1.94
4.11
(53
)
2.17
4.28
(49
)
Phosphate
Three Months Ended December 31
(millions of US dollars, except
Dollars
Tonnes (thousands)
Average per Tonne
as otherwise noted)
2023
2022
% Change
2023
2022
% Change
2023
2022
% Change
Manufactured product
Net sales
Fertilizer
322
274
18
579
391
48
557
700
(20
)
Industrial and feed
150
155
(3
)
174
140
24
860
1,107
(22
)
472
429
10
753
531
42
627
807
(22
)
Cost of goods sold
402
405
(1
)
535
762
(30
)
Gross margin – manufactured
70
24
192
92
45
104
Gross margin – other 1
‐
(8
)
(100
)
Depreciation and amortization
108
109
(1
)
Gross margin – total
70
16
338
Gross margin excluding depreciation
Expenses
21
46
(54
)
and amortization – manufactured 2
200
154
30
EBIT
49
(30
)
n/m
Depreciation and amortization
81
58
40
EBITDA / Adjusted EBITDA
130
28
364
1 Includes other phosphate and purchased products and comprises net sales of $61 million (2022 – $72 million) less cost of goods sold of $61 million
(2022 – $80 million).
2 This is a non-GAAP financial measure. See the "Non-GAAP Financial Measures" section.
Twelve Months Ended December 31
(millions of US dollars, except
Dollars
Tonnes (thousands)
Average per Tonne
as otherwise noted)
2023
2022
% Change
2023
2022
% Change
2023
2022
% Change
Manufactured product
Net sales
Fertilizer
1,085
1,367
(21
)
1,912
1,696
13
568
806
(30
)
Industrial and feed
645
706
(9
)
639
682
(6
)
1,010
1,035
(2
)
1,730
2,073
(17
)
2,551
2,378
7
678
872
(22
)
Cost of goods sold
1,487
1,562
(5
)
583
657
(11
)
Gross margin – manufactured
243
511
(52
)
95
215
(56
)
Gross margin – other 1
(10
)
(18
)
(44
)
Depreciation and amortization
115
79
46
Gross margin – total
233
493
(53
)
Gross margin excluding depreciation
Expenses (income) ²
290
(693
)
n/m
and amortization – manufactured
210
294
(29
)
EBIT
(57
)
1,186
n/m
Depreciation and amortization
294
188
56
EBITDA
237
1,374
(83
)
Adjustments 2
233
(780
)
n/m
Adjusted EBITDA
470
594
(21
)
1 Includes other phosphate and purchased products and comprises net sales of $263 million (2022 – $304 million) less cost of goods sold of $273 million
(2022 – $322 million).
2 Includes non-cash impairment of assets of $233 million (2022 - reversal of non-cash impairment of assets of $780 million). See Notes 2 and 3 to the unaudited condensed consolidated financial statements.
Corporate and Others
(millions of US dollars, except as otherwise
Three Months Ended December 31
Twelve Months Ended December 31
noted)
2023
2022
% Change
2023
2022
% Change
Selling expense (recovery)
7
5
40
‐
(1
)
n/m
General and administrative expenses
104
99
5
364
326
12
Share-based compensation (recovery) expense
(7
)
(59
)
(88
)
(14
)
63
n/m
Other expenses
161
67
140
348
227
53
EBIT
(265
)
(112
)
137
(698
)
(615
)
13
Depreciation and amortization
19
16
19
81
71
14
EBITDA
(246
)
(96
)
156
(617
)
(544
)
13
Adjustments 1
129
(84
)
n/m
350
146
140
Adjusted EBITDA
(117
)
(180
)
(35
)
(267
)
(398
)
(33
)
1 See Note 2 to the unaudited condensed consolidated financial statements.
Eliminations
Finance Costs, Income Taxes and Other Comprehensive Income (Loss)
(millions of US dollars, except as otherwise
Three Months Ended December 31
Twelve Months Ended December 31
noted)
2023
2022
% Change
2023
2022
% Change
Finance costs
213
188
13
793
563
41
Income tax (recovery) expense
(96
)
353
n/m
670
2,559
(74
)
Actual effective tax rate including discrete items (%)
(120
)
24
n/m
34
25
9
Other comprehensive income (loss)
97
119
(18
)
81
(177
)
n/m
Forward-Looking Statements
Certain statements and other information included in this document, including within the “Market Outlook and Guidance” section, constitute “forward-looking information” or “forward-looking statements” (collectively, “forward-looking statements”) under applicable securities laws (such statements are often accompanied by words such as “anticipate”, “forecast”, “expect”, “believe”, “may”, “will”, “should”, “estimate”, “project”, “intend” or other similar words). All statements in this document, other than those relating to historical information or current conditions, are forward-looking statements, including, but not limited to: Nutrien's business strategies, plans, prospects and opportunities; Nutrien's 2024 full-year guidance, including expectations regarding Retail adjusted EBITDA, Potash sales volumes, Nitrogen sales volumes, Phosphate sales volumes, depreciation and amortization, finance costs, effective tax rate on adjusted earnings and capital expenditures; our projections to generate strong cash from operations; expectations regarding our capital allocation intentions and strategies; our ability to advance strategic initiatives and high value growth investments, including expectations regarding our ability to serve growers, maintain a low-cost position of fertilizer production assets and increase free cash flow; capital spending expectations for 2024 and beyond, including spending related to advancement of proprietary products, network optimization and digital capabilities in Retail, automation in Potash mining, and brownfield expansions in Nitrogen; expectations regarding our ability to generate free cash flow and return capital to our shareholders, including our expectations regarding stable and growing dividends; expectations regarding Retail inventory levels in North America; expectations regarding performance of our operating segments in 2024, including increased fertilizer sales volumes and growth in Retail earnings; our operating segment market outlooks and our expectations for market conditions and fundamentals in 2024 and beyond, and the anticipated supply and demand for our products and services, expected market, industry and growing conditions with respect to crop nutrient application rates, planted acres, grower crop investment, crop mix, including the need to replenish soil nutrient levels, production volumes and expenses, shipments, natural gas costs and availability, consumption, prices, operating rates and the impact of seasonality, import and export volumes, economic sanctions and restrictions, operating rates, inventories, crop development and natural gas curtailments; the expected impacts and timing of new supply from additional gas fields in Trinidad; the resulting outlook of higher expected natural gas costs and lower near-term availability from the new natural gas contract related to our Trinidad property, plant and equipment in our Nitrogen segment; the negotiation of sales contracts; timing and impacts of plant turnarounds; acquisitions and divestitures and the anticipated benefits thereof; and expectations in connection with our ability to deliver long-term returns to shareholders. These forward-looking statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from such forward-looking statements. As such, undue reliance should not be placed on these forward-looking statements.
All of the forward-looking statements are qualified by the assumptions that are stated or inherent in such forward-looking statements, including the assumptions referred to below and elsewhere in this document. Although we believe that these assumptions are reasonable, having regard to our experience and our perception of historical trends, this list is not exhaustive of the factors that may affect any of the forward-looking statements and the reader should not place undue reliance on these assumptions and such forward-looking statements. Current conditions, economic and otherwise, render assumptions, although reasonable when made, subject to greater uncertainty. The additional key assumptions that have been made include, among other things, assumptions with respect to: our ability to successfully implement our business strategies, growth and capital allocation investments and initiatives that we will conduct our operations and achieve results of operations as anticipated; our ability to successfully complete, integrate and realize the anticipated benefits of our already completed and future acquisitions and divestitures, and that we will be able to implement our standards, controls, procedures and policies in respect of any acquired businesses and to realize the expected synergies on the anticipated timeline or at all; that future business, regulatory and industry conditions will be within the parameters expected by us, including with respect to prices, expenses, margins, demand, supply, product availability, shipments, consumption, weather conditions, including the current El Niño weather pattern, supplier agreements, availability, inventory levels, exports, crop development and cost of labor and interest, exchange and effective tax rates; assumptions with respect to global economic conditions and the accuracy of our market outlook expectations for 2024 and in the future; assumptions related to our assessment of recoverable amount estimates of our assets, including in relation to our Retail - South America group of CGUs goodwill and intangible asset impairment and the impairment of our Nitrogen and Phosphate property, plant and equipment; assumptions with respect to the timing and benefits of additional gas fields in Trinidad; assumptions with respect to our intention to complete share repurchases under our normal course issuer bid programs, including Toronto Stock Exchange approval, the funding of such share repurchases, existing and future market conditions, including with respect to the price of our common shares, and compliance with respect to applicable limitations under securities laws and regulations and stock exchange policies and the ability to fund our dividends at the current level; our expectations regarding the impacts, direct and indirect, of certain geopolitical conflicts, including the war in Eastern Europe and the conflict in the Middle East on, among other things, global supply and demand, including for crop nutrients, energy and commodity prices, global interest rates, supply chains and the global macroeconomic environment, including inflation; the adequacy of our cash generated from operations and our ability to access our credit facilities or capital markets for additional sources of financing; our ability to identify suitable candidates for acquisitions and divestitures and negotiate acceptable terms; our ability to maintain investment grade ratings and achieve our performance targets; and our ability to successfully negotiate sales and other contracts.
Events or circumstances that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to: general global economic, market and business conditions; failure to achieve expected results of our business strategy, capital allocation initiatives or results of operations; failure to complete announced and future acquisitions or divestitures at all or on the expected terms and within the expected timeline; seasonality; climate change and weather conditions, including the current El Niño weather pattern, including impacts from regional flooding and/or drought conditions; crop planted acreage, yield and prices; the supply and demand and price levels for our products; governmental and regulatory requirements and actions by governmental authorities, including changes in government policy (including tariffs, trade restrictions and climate change initiatives), government ownership requirements, changes in environmental, tax and other laws or regulations and the interpretation thereof; political risks, including civil unrest, actions by armed groups or conflict and malicious acts including terrorism; the occurrence of a major environmental or safety incident; innovation and cybersecurity risks related to our systems, including our costs of addressing or mitigating such risks; counterparty and sovereign risk; delays in completion of turnarounds at our major facilities or challenges related to our major facilities that are out of our control; interruptions of or constraints in availability of key inputs, including natural gas and sulfur; any significant impairment of the carrying amount of certain assets; the risk that rising interest rates and/or deteriorated business operating results may result in the further impairment of assets or goodwill attributed to certain of our cash generating units; risks related to reputational loss; certain complications that may arise in our mining processes; the ability to attract, engage and retain skilled employees and strikes or other forms of work stoppages; geopolitical conflicts, including the war in Eastern Europe and the conflict in the Middle East, and their potential impact on, among other things, global market conditions and supply and demand, including for crop nutrients, energy and commodity prices, interest rates, supply chains and the global economy generally; our ability to execute on our strategies related to environmental, social and governance matters, and achieve related expectations, targets and commitments; and other risk factors detailed from time to time in Nutrien reports filed with the Canadian securities regulators and the Securities and Exchange Commission in the United States.
The purpose of our Retail adjusted EBITDA, sales volumes, depreciation and amortization, finance costs, effective tax rate on adjusted earnings and capital expenditures guidance ranges are to assist readers in understanding our expected and targeted financial results, and this information may not be appropriate for other purposes.
The forward-looking statements in this document are made as of the date hereof and Nutrien disclaims any intention or obligation to update or revise any forward-looking statements in this document as a result of new information or future events, except as may be required under applicable Canadian securities legislation or applicable US federal securities laws.
Terms and Definitions
For the definitions of certain financial and non-financial terms used in this document, as well as a list of abbreviated company names and sources, see the “Terms & Definitions” section of our 2022 Annual Report. All references to per share amounts pertain to diluted net earnings (loss) per share, “n/m” indicates information that is not meaningful, and all financial amounts are stated in millions of US dollars, unless otherwise noted.
About Nutrien
Nutrien is a leading provider of crop inputs and services, helping to safely and sustainably feed a growing world. We operate a world-class network of production, distribution and ag retail facilities that positions us to efficiently serve the needs of growers. We focus on creating long-term value by prioritizing investments that strengthen the advantages of our integrated business and by maintaining access to the resources and the relationships with stakeholders needed to achieve our goals.
More information about Nutrien can be found at www.nutrien.com.
Selected financial data for download can be found in our data tool at www.nutrien.com/investors/interactive-datatool Such data is not incorporated by reference herein.
Nutrien will host a Conference Call on Thursday, February 22, 2024 at 10:00 a.m. Eastern Time.
Telephone conference dial-in numbers:
Live Audio Webcast: Visit https://www.nutrien.com/investors/events/2023-q4-earnings-conference-call
Appendix A – Selected Additional Financial Data
Selected Retail Measures
Three Months Ended December 31
Twelve Months Ended December 31
2023
2022
2023
2022
Proprietary products gross margin (millions of US dollars)
Crop nutrients
44
55
391
370
Crop protection products
27
58
461
675
Seed
(3
)
(7
)
168
166
Merchandise
3
5
11
12
All products
71
111
1,031
1,223
Proprietary products margin as a percentage of product line margin (%)
Crop nutrients
12
16
28
21
Crop protection products
10
14
30
35
Seed
(9
)
(7
)
39
39
Merchandise
6
11
6
7
All products
8
11
23
24
Crop nutrients sales volumes (tonnes – thousands)
North America
2,073
1,819
8,985
8,106
International
790
675
3,647
3,407
Total
2,863
2,494
12,632
11,513
Crop nutrients selling price per tonne
North America
620
942
697
916
International
661
896
581
774
Total
631
930
663
874
Crop nutrients gross margin per tonne
North America
118
151
127
182
International
127
108
65
86
Total
120
139
109
153
Financial performance measures
2023
2022
Retail adjusted EBITDA margin (%) 1, 2
7
11
Retail adjusted EBITDA per US selling location (thousands of US dollars) 1, 2, 3
1,394
1,923
Retail adjusted average working capital to sales (%) 1, 4
19
17
Retail adjusted average working capital to sales excluding Nutrien Financial (%) 1, 4
1
2
Nutrien Financial adjusted net interest margin (%) 1, 4
5.2
6.8
Retail cash operating coverage ratio (%) 1, 4
68
55
1 Rolling four quarters ended December 31, 2023 and 2022.
2 These are supplementary financial measures. See the "Other Financial Measures" section.
3 Excluding acquisitions.
4 These are non-GAAP financial measures. See the "Non-GAAP Financial Measures" section.
Nutrien Financial
As at December 31, 2023
As at
December
31, 2022
(millions of US dollars)
Current
<31 Days
Past Due
31–90 Days
Past Due
>90 Days
Past Due
Gross Receivables
Allowance 1
Net Receivables
Net Receivables
North America
1,736
327
89
94
2,246
(40
)
2,206
2,007
International
560
56
22
59
697
(10
)
687
662
Nutrien Financial receivables
2,296
383
111
153
2,943
(50
)
2,893
2,669
1 Bad debt expense on the above receivables for the twelve months ended December 31, 2023 was $35 million (2022 – $10 million) in the Retail segment.
Selected Nitrogen Measures
Three Months Ended December 31
Twelve Months Ended December 31
2023
2022
2023
2022
Sales volumes (tonnes – thousands)
Fertilizer 1
1,648
1,467
6,067
5,628
Industrial and feed
1,086
1,129
4,356
4,652
Net sales (millions of US dollars)
Fertilizer 1
533
901
2,450
3,726
Industrial and feed
344
687
1,380
2,878
Net selling price per tonne
Fertilizer 1
323
614
404
662
Industrial and feed
317
608
317
619
1 Certain immaterial 2022 figures have been reclassified.
Production Measures
Three Months Ended December 31
Twelve Months Ended December 31
2023
2022
2023
2022
Potash production (Product tonnes – thousands)
3,386
2,941
12,998
13,007
Potash shutdown weeks 1
‐
3
5
18
Ammonia production – total 2
1,362
1,400
5,357
5,759
Ammonia production – adjusted 2, 3
1,022
920
3,902
3,935
Ammonia operating rate (%) 3
91
83
88
90
P2O5 production (P2O5 tonnes – thousands)
380
288
1,406
1,351
P2O5 operating rate (%)
89
67
83
79
1 Represents weeks of full production shutdown, including inventory adjustments and unplanned events, excluding the impact of any periods of reduced operating rates, planned routine annual maintenance shutdowns and announced workforce reductions.
2 All figures are provided on a gross production basis in thousands of product tonnes.
3 Excludes Trinidad and Joffre.
Appendix B – Non-GAAP Financial Measures
We use both International Financial Reporting Standards (“IFRS”) measures and certain non-GAAP financial measures to assess performance. Non-GAAP financial measures are financial measures disclosed by the Company that (a) depict historical or expected future financial performance, financial position or cash flow of the Company, (b) with respect to their composition, exclude amounts that are included in, or include amounts that are excluded from, the composition of the most directly comparable financial measure disclosed in the primary financial statements of the Company, (c) are not disclosed in the financial statements of the Company and (d) are not a ratio, fraction, percentage or similar representation. Non-GAAP ratios are financial measures disclosed by the Company that are in the form of a ratio, fraction, percentage or similar representation that has a non-GAAP financial measure as one or more of its components, and that are not disclosed in the financial statements of the Company.
These non-GAAP financial measures and non-GAAP ratios are not standardized financial measures under IFRS and, therefore, are unlikely to be comparable to similar financial measures presented by other companies. Management believes these non-GAAP financial measures and non-GAAP ratios provide transparent and useful supplemental information to help investors evaluate our financial performance, financial condition and liquidity using the same measures as management. These non-GAAP financial measures and non-GAAP ratios should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with IFRS.
The following section outlines our non-GAAP financial measures and non-GAAP ratios, their compositions, and why management uses each measure. It also includes reconciliations to the most directly comparable IFRS measures. Except as otherwise described herein, our non-GAAP financial measures and non-GAAP ratios are calculated on a consistent basis from period to period and are adjusted for specific items in each period, as applicable. As additional non-recurring or unusual items arise in the future, we generally exclude these items in our calculations.
Adjusted EBITDA (Consolidated)
Most directly comparable IFRS financial measure: Net earnings (loss).
Definition: Adjusted EBITDA is calculated as net earnings (loss) before finance costs, income taxes, depreciation and amortization, share-based compensation and certain foreign exchange gain/loss (net of related derivatives). We also adjust this measure for the following other income and expenses that are excluded when management evaluates the performance of our day-to-day operations: integration and restructuring related costs, impairment or reversal of impairment of assets, COVID-19 related expenses, gain or loss on disposal of certain businesses and investments, asset retirement obligations (“ARO”) and accrued environmental costs (“ERL”) related to our non-operating sites, and loss on remitting cash from certain foreign jurisdictions (e.g., Blue Chip Swaps). In 2023, we amended our calculation of adjusted EBITDA to adjust for the asset retirement obligations and accrued environmental costs related to our non-operating sites and the loss on remitting cash from certain foreign jurisdictions. We do not consider these to be part of our day-to-day operations. There were no similar income and expense in the comparative periods.
Why we use the measure and why it is useful to investors: It is not impacted by long-term investment and financing decisions, but rather focuses on the performance of our day-to-day operations. It provides a measure of our ability to service debt and to meet other payment obligations and as a component of employee remuneration calculations.
Three Months Ended December 31
Twelve Months Ended December 31
(millions of US dollars)
2023
2022
2023
2022
Net earnings
176
1,118
1,282
7,687
Finance costs
213
188
793
563
Income tax (recovery) expense
(96
)
353
670
2,559
Depreciation and amortization
565
520
2,169
2,012
EBITDA 1
858
2,179
4,914
12,821
Adjustments:
Integration and restructuring related costs
20
11
49
46
Share-based compensation (recovery) expense
(7
)
(59
)
(14
)
63
Impairment (reversal of impairment) of assets
76
‐
774
(780
)
ARO/ERL expense for non-operating sites
142
‐
152
‐
Foreign exchange (gain) loss, net of related derivatives
(14
)
(36
)
91
31
Loss on Blue Chip Swaps
‐
‐
92
‐
Gain on disposal of investment
‐
‐
‐
(19
)
COVID-19 related expenses ²
‐
‐
‐
8
Adjusted EBITDA
1,075
2,095
6,058
12,170
1 EBITDA is calculated as net earnings before finance costs, income taxes, and depreciation and amortization.
2 COVID-19 related expenses primarily consist of increased cleaning and sanitization costs, the purchase of personal protective equipment, discretionary supplemental employee costs, and costs related to construction delays from access limitations and other government restrictions.
Adjusted Net Earnings and Adjusted Net Earnings Per Share
Most directly comparable IFRS financial measure: Net earnings (loss) and diluted net earnings (loss) per share.
Definition: Adjusted net earnings and related per share information are calculated as net earnings (loss) before share-based compensation and certain foreign exchange gain/loss (net of related derivatives), net of tax. We also adjust this measure for the following other income and expenses (net of tax) that are excluded when management evaluates the performance of our day-to-day operations: certain integration and restructuring related costs, impairment or reversal of impairment of assets, COVID-19 related expenses (including those recorded under finance costs), gain or loss on disposal of certain businesses and investments, gain or loss on early extinguishment of debt or on settlement of derivatives due to discontinuance of hedge accounting, asset retirement obligations and accrued environmental costs related to our non-operating sites, loss on remitting cash from certain foreign jurisdictions (e.g., Blue Chip Swaps), change in recognition of tax losses and deductible temporary differences related to impairments and certain changes to tax declarations in Switzerland (“Swiss Tax Reform adjustment") resulting in an income tax recovery from the recognition of a deferred tax asset. In 2023, we amended our calculation of adjusted net earnings and adjusted net earnings per share to adjust for the asset retirement obligations and accrued environmental costs related to our non-operating sites, the loss on remitting cash from certain foreign jurisdictions, the change in recognition of Retail – South America tax losses and deductible temporary differences and the Swiss Tax Reform adjustment. We do not consider these to be part of our day-to-day operations. There were no similar income and expense in the comparative periods. We generally apply the annual forecasted effective tax rate to our adjustments during the year, and at year-end, we apply the actual effective tax rate. Prior to December 31, 2023, we applied a specific tax rate for material adjustments. Effective December 31, 2023, we applied a tax rate specific to each adjustment.
Why we use the measure and why it is useful to investors: Focuses on the performance of our day-to-day operations and is used as a component of employee remuneration calculations.
Three Months Ended
December 31, 2023
Twelve Months Ended
December 31, 2023
Per
Per
(millions of US dollars, except as otherwise
Increases
Diluted
Increases
Diluted
noted)
(Decreases)
Post-Tax
Share
(Decreases)
Post-Tax
Share
Net earnings attributable to equity holders of Nutrien
172
0.35
1,258
2.53
Adjustments:
Share-based compensation recovery
(7
)
(5
)
(0.01
)
(14
)
(11
)
(0.02
)
Foreign exchange (gain) loss, net of related derivatives
(14
)
(16
)
(0.03
)
91
83
0.17
Integration and restructuring related costs
20
16
0.03
49
40
0.08
Impairment of assets
76
49
0.10
774
702
1.42
ARO/ERL expense for non-operating sites
142
102
0.20
152
110
0.22
Loss on Blue Chip Swaps
‐
‐
‐
92
92
0.18
Swiss Tax Reform adjustment
(134
)
(134
)
(0.27
)
(134
)
(134
)
(0.27
)
Change in recognition of deferred tax assets
‐
‐
‐
66
66
0.13
Adjusted net earnings
184
0.37
2,206
4.44
Three Months Ended
December 31, 2022
Twelve Months Ended
December 31, 2022
Per
Per
(millions of US dollars, except as otherwise
Increases
Diluted
Increases
Diluted
noted)
(Decreases)
Post-Tax
Share
(Decreases)
Post-Tax
Share
Net earnings attributable to equity holders of Nutrien
1,112
2.15
7,660
14.18
Adjustments:
Share-based compensation (recovery) expense
(59
)
(45
)
(0.09
)
63
47
0.10
Foreign exchange (gain) loss, net of related derivatives
(36
)
(27
)
(0.05
)
31
23
0.05
Integration and restructuring related costs
11
8
0.01
46
35
0.06
Reversal of impairment of assets
‐
‐
‐
(780
)
(619
)
(1.15
)
COVID-19 related expenses
‐
‐
‐
8
6
0.01
Gain on disposal of investment
‐
‐
‐
(19
)
(14
)
(0.03
)
Gain on settlement of discontinued hedge accounting derivative
‐
‐
‐
(18
)
(14
)
(0.03
)
Adjusted net earnings
1,048
2.02
7,124
13.19
Gross Margin Excluding Depreciation and Amortization Per Tonne – Manufactured
Most directly comparable IFRS financial measure: Gross margin.
Definition: Gross margin per tonne less depreciation and amortization per tonne for manufactured products. Reconciliations are provided in the “Segment Results” section.
Why we use the measure and why it is useful to investors: Focuses on the performance of our day-to-day operations, which excludes the effects of items that primarily reflect the impact of long-term investment and financing decisions.
Potash Controllable Cash Cost of Product Manufactured (“COPM”) Per Tonne
Most directly comparable IFRS financial measure: Cost of goods sold (“COGS”) for the Potash segment.
Definition: Total Potash COGS excluding depreciation and amortization expense included in COPM, royalties, natural gas costs and carbon taxes, change in inventory, and other adjustments, divided by potash production tonnes.
Why we use the measure and why it is useful to investors: To assess operational performance. Potash controllable cash COPM excludes the effects of production from other periods and the impacts of our long-term investment decisions, supporting a focus on the performance of our day-to-day operations. Potash controllable cash COPM also excludes royalties and natural gas costs and carbon taxes, which management does not consider controllable, as they are primarily driven by regulatory and market conditions.
Three Months Ended December 31
Twelve Months Ended December 31
(millions of US dollars, except as otherwise noted)
2023
2022
2023
2022
Total COGS – Potash
349
310
1,396
1,400
Change in inventory
7
38
(40
)
58
Other adjustments 1
(7
)
(12
)
(26
)
(41
)
COPM
349
336
1,330
1,417
Depreciation and amortization in COPM
(124
)
(89
)
(427
)
(406
)
Royalties in COPM
(23
)
(40
)
(100
)
(190
)
Natural gas costs and carbon taxes in COPM
(12
)
(17
)
(46
)
(62
)
Controllable cash COPM
190
190
757
759
Production tonnes (tonnes – thousands)
3,386
2,941
12,998
13,007
Potash controllable cash COPM per tonne
56
65
58
58
1 Other adjustments include unallocated production overhead that is recognized as part of cost of goods sold but is not included in the measurement of inventory and changes in inventory balances.
Ammonia Controllable Cash COPM Per Tonne
Most directly comparable IFRS financial measure: Total manufactured COGS for the Nitrogen segment.
Definition: Total Nitrogen COGS excluding depreciation and amortization expense included in COGS, cash COGS for products other than ammonia, other adjustments, and natural gas and steam costs, divided by net ammonia production tonnes.
Why we use the measure and why it is useful to investors: To assess operational performance. Ammonia controllable cash COPM excludes the effects of production from other periods, the costs of natural gas and steam, and long-term investment decisions, supporting a focus on the performance of our day-to-day operations.
Three Months Ended December 31
Twelve Months Ended December 31
(millions of US dollars, except as otherwise noted)
2023
2022
2023
2022
Total Manufactured COGS – Nitrogen 1
595
892
2,435
3,370
Total Other COGS – Nitrogen 1
76
201
393
882
Total COGS – Nitrogen
671
1,093
2,828
4,252
Depreciation and amortization in COGS
(123
)
(131
)
(474
)
(465
)
Cash COGS for products other than ammonia
(367
)
(648
)
(1,693
)
(2,560
)
Ammonia
Total cash COGS before other adjustments
181
314
661
1,227
Other adjustments 2
(76
)
(65
)
(222
)
(210
)
Total cash COPM
105
249
439
1,017
Natural gas and steam costs in COPM
(73
)
(212
)
(304
)
(855
)
Controllable cash COPM
32
37
135
162
Production tonnes (net tonnes 3 – thousands)
564
655
2,276
2,754
Ammonia controllable cash COPM per tonne
59
57
60
59
1 Certain immaterial 2022 figures have been reclassified.
2 Other adjustments include unallocated production overhead that is recognized as part of cost of goods sold but is not included in the measurement of inventory and changes in inventory balances.
3 Ammonia tonnes available for sale, as not upgraded to other nitrogen products.
Retail Adjusted Average Working Capital to Sales and Retail Adjusted Average Working Capital to Sales Excluding Nutrien Financial
Definition: Retail adjusted average working capital divided by Retail adjusted sales for the last four rolling quarters. We exclude in our calculations the sales and working capital of certain acquisitions during the first year following the acquisition. We also look at this metric excluding Nutrien Financial revenue and working capital.
Why we use the measure and why it is useful to investors: To evaluate operational efficiency. A lower or higher percentage represents increased or decreased efficiency, respectively. The metric excluding Nutrien Financial shows the impact that the working capital of Nutrien Financial has on the ratio.
Rolling four quarters ended December 31, 2023
(millions of US dollars, except as otherwise noted)
Q1 2023
Q2 2023
Q3 2023
Q4 2023
Average/Total
Current assets
13,000
11,983
10,398
10,498
Current liabilities
(8,980
)
(8,246
)
(5,228
)
(8,210
)
Working capital
4,020
3,737
5,170
2,288
3,804
Working capital from certain recent acquisitions
‐
‐
‐
‐
Adjusted working capital
4,020
3,737
5,170
2,288
3,804
Nutrien Financial working capital
(2,283
)
(4,716
)
(4,353
)
(2,893
)
Adjusted working capital excluding Nutrien Financial
1,737
(979
)
817
(605
)
243
Sales
3,422
9,128
3,490
3,502
Sales from certain recent acquisitions
‐
‐
‐
‐
Adjusted sales
3,422
9,128
3,490
3,502
19,542
Nutrien Financial revenue
(57
)
(122
)
(73
)
(70
)
Adjusted sales excluding Nutrien Financial
3,365
9,006
3,417
3,432
19,220
Adjusted average working capital to sales (%)
19
Adjusted average working capital to sales excluding Nutrien Financial (%)
1
Rolling four quarters ended December 31, 2022
(millions of US dollars, except as otherwise noted)
Q1 2022
Q2 2022
Q3 2022
Q4 2022
Average/Total
Current assets
12,392
12,487
11,262
11,668
Current liabilities
(9,223
)
(9,177
)
(5,889
)
(8,708
)
Working capital
3,169
3,310
5,373
2,960
3,703
Working capital from certain recent acquisitions
‐
‐
‐
‐
Adjusted working capital
3,169
3,310
5,373
2,960
3,703
Nutrien Financial working capital
(2,274
)
(4,404
)
(3,898
)
(2,669
)
Adjusted working capital excluding Nutrien Financial
895
(1,094
)
1,475
291
392
Sales
3,861
9,422
3,980
4,087
Sales from certain recent acquisitions
‐
‐
‐
‐
Adjusted sales
3,861
9,422
3,980
4,087
21,350
Nutrien Financial revenue
(49
)
(91
)
(65
)
(62
)
Adjusted sales excluding Nutrien Financial
3,812
9,331
3,915
4,025
21,083
Adjusted average working capital to sales (%)
17
Adjusted average working capital to sales excluding Nutrien Financial (%)
2
Nutrien Financial Adjusted Net Interest Margin
Definition: Nutrien Financial revenue less deemed interest expense divided by average Nutrien Financial net receivables outstanding for the last four rolling quarters.
Why we use the measure and why it is useful to investors: Used by credit rating agencies and others to evaluate the financial performance of Nutrien Financial.
Rolling four quarters ended December 31, 2023
(millions of US dollars, except as otherwise noted)
Q1 2023
Q2 2023
Q3 2023
Q4 2023
Total/Average
Nutrien Financial revenue
57
122
73
70
Deemed interest expense 1
(20
)
(39
)
(41
)
(36
)
Net interest
37
83
32
34
186
Average Nutrien Financial net receivables
2,283
4,716
4,353
2,893
3,561
Nutrien Financial adjusted net interest margin (%)
5.2
Rolling four quarters ended December 31, 2022
(millions of US dollars, except as otherwise noted)
Q1 2022
Q2 2022
Q3 2022
Q4 2022
Total/Average
Nutrien Financial revenue
49
91
65
62
Deemed interest expense 1
(6
)
(12
)
(12
)
(11
)
Net interest
43
79
53
51
226
Average Nutrien Financial net receivables
2,274
4,404
3,898
2,669
3,311
Nutrien Financial adjusted net interest margin (%)
6.8
1 Average borrowing rate applied to the notional debt required to fund the portfolio of receivables from customers monitored and serviced by Nutrien Financial.
Retail Cash Operating Coverage Ratio
Definition: Retail selling, general and administrative, and other expenses (income), excluding depreciation and amortization expense, divided by Retail gross margin excluding depreciation and amortization expense in cost of goods sold, for the last four rolling quarters.
Why we use the measure and why it is useful to investors: To understand the costs and underlying economics of our Retail operations and to assess our Retail operating performance and ability to generate free cash flow.
Rolling four quarters ended December 31, 2023
(millions of US dollars, except as otherwise noted)
Q1 2023
Q2 2023
Q3 2023
Q4 2023
Total
Selling expenses
765
971
798
841
3,375
General and administrative expenses
50
55
57
55
217
Other expenses
15
29
37
77
158
Operating expenses
830
1,055
892
973
3,750
Depreciation and amortization in operating expenses
(179
)
(185
)
(186
)
(199
)
(749
)
Operating expenses excluding depreciation and amortization
651
870
706
774
3,001
Gross margin
615
1,931
895
989
4,430
Depreciation and amortization in cost of goods sold
2
3
3
2
10
Gross margin excluding depreciation and amortization
617
1,934
898
991
4,440
Cash operating coverage ratio (%)
68
Rolling four quarters ended December 31, 2022
(millions of US dollars, except as otherwise noted)
Q1 2022
Q2 2022
Q3 2022
Q4 2022
Total
Selling expenses
722
1,013
821
836
3,392
General and administrative expenses
45
54
50
51
200
Other expenses (income)
(12
)
21
19
1
29
Operating expenses
755
1,088
890
888
3,621
Depreciation and amortization in operating expenses
(167
)
(171
)
(204
)
(198
)
(740
)
Operating expenses excluding depreciation and amortization
588
917
686
690
2,881
Gross margin
845
2,340
917
1,077
5,179
Depreciation and amortization in cost of goods sold
2
4
2
4
12
Gross margin excluding depreciation and amortization
847
2,344
919
1,081
5,191
Cash operating coverage ratio (%)
55
Appendix C – Other Financial Measures
Supplementary Financial Measures
Supplementary financial measures are financial measures disclosed by the Company that (a) are, or are intended to be, disclosed on a periodic basis to depict the historical or expected future financial performance, financial position or cash flow of the Company, (b) are not disclosed in the financial statements of the Company, (c) are not non-GAAP financial measures, and (d) are not non-GAAP ratios.
The following section provides an explanation of the composition of those supplementary financial measures if not previously provided.
Retail adjusted EBITDA margin: Retail adjusted EBITDA divided by Retail sales for the last four rolling quarters.
Sustaining capital expenditures: Represents capital expenditures that are required to sustain operations at existing levels and include major repairs and maintenance and plant turnarounds.
Investing capital expenditures: Represents capital expenditures related to significant expansions of current operations or to create cost savings (synergies). Investing capital expenditures excludes capital outlays for business acquisitions and equity-accounted investees.
Mine development and pre-stripping capital expenditures: Represents capital expenditures that are required for activities to open new areas underground and/or develop a mine or ore body to allow for future production mining and activities required to prepare and/or access the ore, i.e., removal of an overburden that allows access to the ore.
Retail adjusted EBITDA per US selling location: Calculated as total Retail US adjusted EBITDA for the last four rolling quarters, representing the organic EBITDA component, which excludes acquisitions in those quarters, divided by the number of US locations that have generated sales in the last four rolling quarters, adjusted for acquired locations in those quarters.
Cash used for dividends and share repurchases (shareholder returns): Calculated as dividends paid to Nutrien’s shareholders plus repurchase of common shares as reflected in the unaudited condensed consolidated statements of cash flows. This measure is useful as it represents return of capital to shareholders.
Condensed Consolidated Financial Statements
Unaudited in millions of US dollars except as otherwise noted
Condensed Consolidated Statements of Earnings
Three Months Ended
Twelve Months Ended
December 31
December 31
Note
2023
2022
2023
2022
SALES
2
5,664
7,533
29,056
37,884
Freight, transportation and distribution
260
244
974
872
Cost of goods sold
3,636
4,383
19,608
21,588
GROSS MARGIN
1,768
2,906
8,474
15,424
Selling expenses
849
844
3,397
3,414
General and administrative expenses
173
162
626
565
Provincial mining taxes
79
190
398
1,149
Share-based compensation (recovery) expense
(7
)
(59
)
(14
)
63
Impairment (reversal of impairment) of assets
3
76
‐
774
(780
)
Other expenses
4
305
110
548
204
EARNINGS BEFORE FINANCE COSTS AND INCOME TAXES
293
1,659
2,745
10,809
Finance costs
213
188
793
563
EARNINGS BEFORE INCOME TAXES
80
1,471
1,952
10,246
Income tax (recovery) expense
5
(96
)
353
670
2,559
NET EARNINGS
176
1,118
1,282
7,687
Attributable to
Equity holders of Nutrien
172
1,112
1,258
7,660
Non-controlling interest
4
6
24
27
NET EARNINGS
176
1,118
1,282
7,687
NET EARNINGS PER SHARE ATTRIBUTABLE TO EQUITY HOLDERS OF NUTRIEN ("EPS")
Basic
0.35
2.15
2.53
14.22
Diluted
0.35
2.15
2.53
14.18
Weighted average shares outstanding for basic EPS
494,545,000
516,810,000
496,381,000
538,475,000
Weighted average shares outstanding for diluted EPS
494,878,000
517,964,000
496,994,000
540,010,000
Condensed Consolidated Statements of Comprehensive Income
Three Months Ended
Twelve Months Ended
December 31
December 31
(Net of related income taxes)
2023
2022
2023
2022
NET EARNINGS
176
1,118
1,282
7,687
Other comprehensive income (loss)
Items that will not be reclassified to net earnings:
Net actuarial (loss) gain on defined benefit plans
(14
)
22
(17
)
83
Net fair value (loss) gain on investments
(1
)
17
4
(44
)
Items that have been or may be subsequently reclassified to net earnings:
Gain (loss) on currency translation of foreign operations
103
73
89
(199
)
Other
9
7
5
(17
)
OTHER COMPREHENSIVE INCOME (LOSS)
97
119
81
(177
)
COMPREHENSIVE INCOME
273
1,237
1,363
7,510
Attributable to
Equity holders of Nutrien
268
1,230
1,338
7,484
Non-controlling interest
5
7
25
26
COMPREHENSIVE INCOME
273
1,237
1,363
7,510
(See Notes to the Condensed Consolidated Financial Statements)
Condensed Consolidated Statements of Cash Flows
Three Months Ended
Twelve Months Ended
December 31
December 31
Note
2023
2022
2023
2022
Note 1
Note 1
OPERATING ACTIVITIES
Net earnings
176
1,118
1,282
7,687
Adjustments for:
Depreciation and amortization
565
520
2,169
2,012
Share-based compensation (recovery) expense
(7
)
(59
)
(14
)
63
Impairment (reversal of impairment) of assets
3
76
‐
774
(780
)
(Recovery of) provision for deferred income tax
(169
)
30
7
182
Net distributed (undistributed) earnings of equity-accounted investees
5
(42
)
117
(181
)
Gain on amendments to other post-retirement pension plans
‐
‐
(80
)
‐
Loss on Blue Chip Swaps
4
‐
‐
92
‐
Long-term income tax receivables and payables
24
72
(65
)
273
Other long-term assets, liabilities and miscellaneous
153
(29
)
277
2
Cash from operations before working capital changes
823
1,610
4,559
9,258
Changes in non-cash operating working capital:
Receivables
2,370
2,683
879
(919
)
Inventories and prepaid expenses and other current assets
(1,990
)
(1,841
)
1,376
(1,167
)
Payables and accrued charges
2,947
2,284
(1,748
)
938
CASH PROVIDED BY OPERATING ACTIVITIES
4,150
4,736
5,066
8,110
INVESTING ACTIVITIES
Capital expenditures 1
(781
)
(986
)
(2,671
)
(2,475
)
Business acquisitions, net of cash acquired
(37
)
(329
)
(153
)
(407
)
Proceeds from sales of Blue Chip Swaps, net of purchases
4
‐
‐
(92
)
‐
Net changes in non-cash working capital
46
33
(22
)
(44
)
Other
39
60
(20
)
25
CASH USED IN INVESTING ACTIVITIES
(733
)
(1,222
)
(2,958
)
(2,901
)
FINANCING ACTIVITIES
(Repayment of) proceeds from short-term debt, net
(2,671
)
(2,338
)
(458
)
529
Proceeds from long-term debt
‐
1,004
1,500
1,045
Repayment of long-term debt
(13
)
(511
)
(648
)
(561
)
Repayment of principal portion of lease liabilities
(97
)
(85
)
(375
)
(341
)
Dividends paid to Nutrien's shareholders
6
(262
)
(251
)
(1,032
)
(1,031
)
Repurchase of common shares
6
‐
(1,214
)
(1,047
)
(4,520
)
Issuance of common shares
1
‐
33
168
Other
‐
(17
)
(34
)
(20
)
CASH USED IN FINANCING ACTIVITIES
(3,042
)
(3,412
)
(2,061
)
(4,731
)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH
EQUIVALENTS
12
(24
)
(7
)
(76
)
INCREASE IN CASH AND CASH EQUIVALENTS
387
78
40
402
CASH AND CASH EQUIVALENTS – BEGINNING OF PERIOD
554
823
901
499
CASH AND CASH EQUIVALENTS – END OF PERIOD
941
901
941
901
Cash and cash equivalents is composed of:
Cash
909
775
909
775
Short-term investments
32
126
32
126
941
901
941
901
SUPPLEMENTAL CASH FLOWS INFORMATION
Interest paid
267
202
729
482
Income taxes paid
42
379
1,764
1,882
Total cash outflow for leases
128
120
501
459
1 Includes additions to property, plant and equipment, and intangible assets for the three months ended December 31, 2023 of $731 and $50 (2022 – $919 and $67), respectively, and for the twelve months ended December 31, 2023 of $2,465 and $206 (2022 – $2,253 and $222), respectively.
(See Notes to the Condensed Consolidated Financial Statements)
Condensed Consolidated Statements of Changes in Shareholders’ Equity
Accumulated Other Comprehensive
(Loss) Income ("AOCI")
(Loss) Gain
on Currency
Equity
Number of
Translation
Holders
Non-
Common
Share
Contributed
of Foreign
Total
Retained
of
Controlling
Total
Shares
Capital
Surplus
Operations
Other
AOCI
Earnings
Nutrien
Interest
Equity
BALANCE – DECEMBER 31, 2021
557,492,516
15,457
149
(176
)
30
(146
)
8,192
23,652
47
23,699
Net earnings
‐
‐
‐
‐
‐
‐
7,660
7,660
27
7,687
Other comprehensive (loss) income
‐
‐
‐
(198
)
22
(176
)
‐
(176
)
(1
)
(177
)
Shares repurchased
(53,312,559
)
(1,487
)
(22
)
‐
‐
‐
(2,987
)
(4,496
)
‐
(4,496
)
Dividends declared
‐
‐
‐
‐
‐
‐
(1,019
)
(1,019
)
‐
(1,019
)
Non-controlling interest transactions
‐
‐
‐
‐
‐
‐
(1
)
(1
)
(28
)
(29
)
Effect of share-based compensation including issuance of common shares
3,066,148
202
(18
)
‐
‐
‐
‐
184
‐
184
Transfer of net loss on cash flow hedges
‐
‐
‐
‐
14
14
‐
14
‐
14
Transfer of net actuarial gain on defined benefit plans
‐
‐
‐
‐
(83
)
(83
)
83
‐
‐
‐
BALANCE – DECEMBER 31, 2022
507,246,105
14,172
109
(374
)
(17
)
(391
)
11,928
25,818
45
25,863
Net earnings
‐
‐
‐
‐
‐
‐
1,258
1,258
24
1,282
Other comprehensive income (loss)
‐
‐
‐
88
(8
)
80
‐
80
1
81
Shares repurchased
(13,378,189
)
(374
)
(26
)
‐
‐
‐
(600
)
(1,000
)
‐
(1,000
)
Dividends declared
‐
‐
‐
‐
‐
‐
(1,050
)
(1,050
)
‐
(1,050
)
Non-controlling interest transactions
‐
‐
‐
‐
‐
‐
(2
)
(2
)
(25
)
(27
)
Effect of share-based compensation including issuance of common shares
683,814
40
‐
‐
‐
‐
‐
40
‐
40
Transfer of net gain on sale of investment
‐
‐
‐
‐
(14
)
(14
)
14
‐
‐
‐
Transfer of net loss on cash flow hedges
‐
‐
‐
‐
12
12
‐
12
‐
12
Transfer of net actuarial loss on defined benefit plans
‐
‐
‐
‐
17
17
(17
)
‐
‐
‐
BALANCE – DECEMBER 31, 2023
494,551,730
13,838
83
(286
)
(10
)
(296
)
11,531
25,156
45
25,201
(See Notes to the Condensed Consolidated Financial Statements)
Condensed Consolidated Balance Sheets
December 31
December 31
As at
Note
2023
2022
ASSETS
Current assets
Cash and cash equivalents
941
901
Receivables
5,398
6,194
Inventories
6,336
7,632
Prepaid expenses and other current assets
1,495
1,615
14,170
16,342
Non-current assets
Property, plant and equipment
22,461
21,767
Goodwill
12,114
12,368
Intangible assets
2,217
2,297
Investments
736
843
Other assets
1,051
969
TOTAL ASSETS
52,749
54,586
LIABILITIES
Current liabilities
Short-term debt
1,815
2,142
Current portion of long-term debt
512
542
Current portion of lease liabilities
327
305
Payables and accrued charges
9,467
11,291
12,121
14,280
Non-current liabilities
Long-term debt
8,913
8,040
Lease liabilities
999
899
Deferred income tax liabilities
3,574
3,547
Pension and other post-retirement benefit liabilities
252
319
Asset retirement obligations and accrued environmental costs
1,489
1,403
Other non-current liabilities
200
235
TOTAL LIABILITIES
27,548
28,723
SHAREHOLDERS’ EQUITY
Share capital
6
13,838
14,172
Contributed surplus
83
109
Accumulated other comprehensive loss
(296
)
(391
)
Retained earnings
11,531
11,928
Equity holders of Nutrien
25,156
25,818
Non-controlling interest
45
45
TOTAL SHAREHOLDERS’ EQUITY
25,201
25,863
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
52,749
54,586
(See Notes to the Condensed Consolidated Financial Statements)
Notes to the Condensed Consolidated Financial Statements
As at and for the Three and Twelve Months Ended December 31, 2023
NOTE 1 BASIS OF PRESENTATION
Nutrien Ltd. (collectively with its subsidiaries, “Nutrien”, “we”, “us”, “our” or “the Company”) is the world’s largest provider of crop inputs and services. Nutrien plays a critical role in helping growers around the globe increase food production in a sustainable manner.
These unaudited interim condensed consolidated financial statements (“interim financial statements”) are based on International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board and have been prepared in accordance with IAS 34, “Interim Financial Reporting”. The accounting policies and methods of computation used in preparing these interim financial statements are materially consistent with those used in the preparation of our 2022 annual consolidated financial statements. These interim financial statements include the accounts of Nutrien and its subsidiaries; however, they do not include all disclosures normally provided in annual consolidated financial statements and should be read in conjunction with our 2022 annual consolidated financial statements.
Certain immaterial 2022 figures have been reclassified in the condensed consolidated statements of cash flows. Interim results are not necessarily indicative of the results expected for any other interim period or the fiscal year.
In management’s opinion, the interim financial statements include all adjustments necessary to fairly present such information in all material respects.
These interim financial statements were authorized by the Audit Committee of the Board of Directors for issue on February 21, 2024.
NOTE 2 SEGMENT INFORMATION
The Company has four reportable operating segments: Nutrien Ag Solutions (“Retail”), Potash, Nitrogen and Phosphate. The Retail segment distributes crop nutrients, crop protection products, seed and merchandise. Retail provides services directly to growers through a network of farm centers in North America, South America and Australia. The Potash, Nitrogen and Phosphate segments are differentiated by the chemical nutrient contained in the products that each produces.
Three Months Ended December 31, 2023
Corporate
Retail
Potash
Nitrogen
Phosphate
and Others
Eliminations
Consolidated
Sales
– third party
3,504
734
895
531
‐
‐
5,664
– intersegment
(2
)
129
223
84
‐
(434
)
‐
Sales
– total
3,502
863
1,118
615
‐
(434
)
5,664
Freight, transportation and distribution
‐
87
162
82
‐
(71
)
260
Net sales
3,502
776
956
533
‐
(363
)
5,404
Cost of goods sold
2,513
349
671
463
‐
(360
)
3,636
Gross margin
989
427
285
70
‐
(3
)
1,768
Selling expenses
841
3
4
1
7
(7
)
849
General and administrative expenses
55
3
10
1
104
‐
173
Provincial mining taxes
‐
79
‐
‐
‐
‐
79
Share-based compensation recovery
‐
‐
‐
‐
(7
)
‐
(7
)
Impairment of assets
‐
‐
76
‐
‐
‐
76
Other expenses (income)
77
(3
)
26
19
161
25
305
Earnings (loss) before finance costs and income taxes
16
345
169
49
(265
)
(21
)
293
Depreciation and amortization
201
118
146
81
19
‐
565
EBITDA 1
217
463
315
130
(246
)
(21
)
858
Integration and restructuring related costs
12
‐
‐
‐
8
‐
20
Share-based compensation recovery
‐
‐
‐
‐
(7
)
‐
(7
)
Impairment of assets
‐
‐
76
‐
‐
‐
76
ARO/ERL expense for non-operating sites 2
‐
‐
‐
‐
142
‐
142
Foreign exchange gain, net of related derivatives
‐
‐
‐
‐
(14
)
‐
(14
)
Adjusted EBITDA
229
463
391
130
(117
)
(21
)
1,075
Assets – at December 31, 2023
23,056
13,571
11,466
2,438
2,818
(600
)
52,749
1 EBITDA is calculated as net earnings (loss) before finance costs, income taxes, and depreciation and amortization.
2 ARO/ERL refers to asset retirement obligations and accrued environmental costs.
Three Months Ended December 31, 2022
Corporate
Retail
Potash
Nitrogen
Phosphate
and Others
Eliminations
Consolidated
Sales
– third party
4,089
1,255
1,677
512
‐
‐
7,533
– intersegment
(2
)
203
272
54
‐
(527
)
‐
Sales
– total
4,087
1,458
1,949
566
‐
(527
)
7,533
Freight, transportation and distribution
‐
81
157
65
‐
(59
)
244
Net sales
4,087
1,377
1,792
501
‐
(468
)
7,289
Cost of goods sold
3,010
310
1,093
485
‐
(515
)
4,383
Gross margin
1,077
1,067
699
16
‐
47
2,906
Selling expenses
836
1
6
2
5
(6
)
844
General and administrative expenses
51
3
5
4
99
‐
162
Provincial mining taxes
‐
190
‐
‐
‐
‐
190
Share-based compensation recovery
‐
‐
‐
‐
(59
)
‐
(59
)
Other expenses (income)
1
4
2
40
67
(4
)
110
Earnings (loss) before finance costs and income taxes
189
869
686
(30
)
(112
)
57
1,659
Depreciation and amortization
202
89
155
58
16
‐
520
EBITDA
391
958
841
28
(96
)
57
2,179
Integration and restructuring related costs
‐
‐
‐
‐
11
‐
11
Share-based compensation recovery
‐
‐
‐
‐
(59
)
‐
(59
)
Foreign exchange gain, net of related derivatives
‐
‐
‐
‐
(36
)
‐
(36
)
Adjusted EBITDA
391
958
841
28
(180
)
57
2,095
Assets – at December 31, 2022
24,451
13,921
11,807
2,661
2,622
(876
)
54,586
Twelve Months Ended December 31, 2023
Corporate
Retail
Potash
Nitrogen
Phosphate
and Others
Eliminations
Consolidated
Sales
– third party
19,542
3,735
3,804
1,975
‐
‐
29,056
– intersegment
‐
431
931
288
‐
(1,650
)
‐
Sales
– total
19,542
4,166
4,735
2,263
‐
(1,650
)
29,056
Freight, transportation and distribution
‐
407
528
270
‐
(231
)
974
Net sales
19,542
3,759
4,207
1,993
‐
(1,419
)
28,082
Cost of goods sold
15,112
1,396
2,828
1,760
‐
(1,488
)
19,608
Gross margin
4,430
2,363
1,379
233
‐
69
8,474
Selling expenses
3,375
12
27
6
‐
(23
)
3,397
General and administrative expenses
217
13
21
11
364
‐
626
Provincial mining taxes
‐
398
‐
‐
‐
‐
398
Share-based compensation recovery
‐
‐
‐
‐
(14
)
‐
(14
)
Impairment of assets
465
‐
76
233
‐
‐
774
Other expenses (income)
158
(1
)
(27
)
40
348
30
548
Earnings (loss) before finance costs and income taxes
215
1,941
1,282
(57
)
(698
)
62
2,745
Depreciation and amortization
759
463
572
294
81
‐
2,169
EBITDA
974
2,404
1,854
237
(617
)
62
4,914
Integration and restructuring related costs
20
‐
‐
‐
29
‐
49
Share-based compensation recovery
‐
‐
‐
‐
(14
)
‐
(14
)
Impairment of assets
465
‐
76
233
‐
‐
774
ARO/ERL expense for non-operating sites
‐
‐
‐
‐
152
‐
152
Foreign exchange loss, net of related derivatives
‐
‐
‐
‐
91
‐
91
Loss on Blue Chip Swaps
‐
‐
‐
‐
92
‐
92
Adjusted EBITDA
1,459
2,404
1,930
470
(267
)
62
6,058
Assets – at December 31, 2023
23,056
13,571
11,466
2,438
2,818
(600
)
52,749
Twelve Months Ended December 31, 2022
Corporate
Retail
Potash
Nitrogen
Phosphate
and Others
Eliminations
Consolidated
Sales
– third party
21,266
7,600
6,755
2,263
‐
‐
37,884
– intersegment
84
599
1,293
357
‐
(2,333
)
‐
Sales
– total
21,350
8,199
8,048
2,620
‐
(2,333
)
37,884
Freight, transportation and distribution
‐
300
515
243
‐
(186
)
872
Net sales
21,350
7,899
7,533
2,377
‐
(2,147
)
37,012
Cost of goods sold
16,171
1,400
4,252
1,884
‐
(2,119
)
21,588
Gross margin
5,179
6,499
3,281
493
‐
(28
)
15,424
Selling expenses
3,392
10
28
7
(1
)
(22
)
3,414
General and administrative expenses
200
9
17
13
326
‐
565
Provincial mining taxes
‐
1,149
‐
‐
‐
‐
1,149
Share-based compensation expense
‐
‐
‐
‐
63
‐
63
Reversal of impairment of assets
‐
‐
‐
(780
)
‐
‐
(780
)
Other expenses (income)
29
5
(137
)
67
227
13
204
Earnings (loss) before finance costs and income taxes
1,558
5,326
3,373
1,186
(615
)
(19
)
10,809
Depreciation and amortization
752
443
558
188
71
‐
2,012
EBITDA
2,310
5,769
3,931
1,374
(544
)
(19
)
12,821
Integration and restructuring related costs
2
‐
‐
‐
44
‐
46
Share-based compensation expense
‐
‐
‐
‐
63
‐
63
Reversal of impairment of assets
‐
‐
‐
(780
)
‐
‐
(780
)
COVID-19 related expenses
‐
‐
‐
‐
8
‐
8
Foreign exchange loss, net of related derivatives
‐
‐
‐
‐
31
‐
31
Gain on disposal of investment
(19
)
‐
‐
‐
‐
‐
(19
)
Adjusted EBITDA
2,293
5,769
3,931
594
(398
)
(19
)
12,170
Assets – at December 31, 2022
24,451
13,921
11,807
2,661
2,622
(876
)
54,586
For our disaggregated revenue from contracts with customers by product line or geographic location, refer to the “Segment Results” section of our news release dated February 21, 2024.
NOTE 3 IMPAIRMENT OF ASSETS
Nitrogen
During the three and twelve months ended December 31, 2023, we identified an impairment trigger for our Trinidad cash generating unit (“CGU”), part of our Nitrogen segment, due to a new natural gas contract and the resulting outlook for higher expected natural gas costs and constrained near-term availability. We expect improved natural gas availability in Trinidad as the development of additional natural gas fields is anticipated to add new natural gas supply starting in 2026.
Trinidad
Recoverable amount ($)
676
Carrying amount before impairment loss ($)
752
Pre-tax impairment loss ($)
76
Impairment recorded to
Property, plant and equipment
Valuation methodology
Fair value less costs of disposal ("FVLCD"), a Level 3 measurement
Valuation technique
Five-year discounted cash flows plus a terminal value
Key assumptions
Long-term growth rate (%)
2.3
Post-tax discount rate 1 (%)
13.0
Forecasted EBITDA 2, 3 ($)
1,145
1 Discount rate used in the previous measurement in 2020 was 12.6 percent.
2 First five years of the forecast period.
3 Includes key assumptions relating to net selling price based on forecasted future natural gas contracting and availability.
The recoverable amount estimate used the following key assumptions: our forecasted EBITDA, discount rate and long-term growth rate. We used key assumptions that were based on historical data and estimates of future results from internal sources, independent third-party price benchmarks, as well as industry and market information.
The following table highlights sensitivities to the recoverable amount of our Trinidad CGU, which could result in additional impairment losses or reversals of the previously recorded losses.
Key Assumptions
Change in Assumption
Change to Recoverable Amount ($)
Long-term growth rate (%)
+ / - 1.0 percent
+ / -
55
Post-tax discount rate (%)
+ / - 1.0 percent
- / +
95
Forecasted EBITDA over forecast period ($)
+ / - 5.0 percent
+ / -
100
Goodwill Impairment Testing
Goodwill by CGU or Group of CGUs
2023
2022
Retail – North America
6,981
6,898
Retail – International 1
590
927
Potash
154
154
Nitrogen
4,389
4,389
12,114
12,368
1 Includes Retail – South America group of CGUs, which had goodwill of nil as at December 31, 2023 (2022 – $348).
During the three months ended June 30, 2023, we recorded an impairment of goodwill and intangible assets of $422 and $43, respectively, relating to our Retail – South America group of CGUs.
During the three and twelve months ended December 31, 2023, we performed our annual goodwill impairment testing (excluding the Retail – South America group of CGUs, which was fully impaired during the three months ended June 30, 2023) and did not identify any further impairment; however, the recoverable amount for Retail – North America group of CGUs did not substantially exceed its carrying amount. In testing for impairment of goodwill, we calculate the recoverable amount for a CGU or groups of CGUs containing goodwill. We used the FVLCD methodology based on after-tax discounted cash flows (five-year projections plus a terminal value) and incorporated assumptions an independent market participant would apply, including considerations related to climate-change initiatives. We adjusted discount rates for each CGU or group of CGUs for the risk associated with achieving our forecasts and for the country risk premium in which we expect to generate cash flows. FVLCD is a Level 3 measurement. We use our market capitalization and comparative market multiples to ensure discounted cash flow results are reasonable.
The key assumptions with the greatest influence on the calculation of the recoverable amounts are the discount rates, terminal growth rates and forecasted EBITDA. The key forecast assumptions were based on historical data and our estimates of future results from internal sources considering industry and market information.
The Retail – North America group of CGUs recoverable amount exceeds its carrying amount by $570. Goodwill is more susceptible to impairment risk if there is an increase in the discount rate or a deterioration in business operating results or economic conditions and actual results do not meet our forecasts. A reduction in the terminal growth rate, an increase in the discount rate or a decrease in forecasted EBITDA could cause impairment in the future as shown in the table below.
Key Assumption
Change Required for Carrying Amount
2023 Annual Impairment Testing
Used in Impairment Model
to Equal Recoverable Amount
Terminal growth rate (%)
2.5
0.4 percent decrease
Discount rate 1 (%)
8.6
0.2 percent increase
Forecasted EBITDA over forecast period ($)
8,040
3.0 percent decrease
1 The discount rate used in the previous measurement was 8.5 percent.
The following table indicates the key assumptions used in testing the remaining groups of CGUs:
Terminal Growth Rate (%)
Discount Rate (%)
2023
2022
2023
2022
Retail – International 1
2.1
2.0
–
6.0
9.0
8.9
–
16.0
Potash
2.5
2.5
7.6
8.3
Nitrogen
2.3
2.0
8.3
9.3
1 The discount rates reflect the country risk premium and size for our international groups of CGUs. The terminal growth rate and discount rate ranges in 2022 included our Retail – South America group of CGUs, which are no longer included in 2023 as goodwill for this group of CGUs is nil.
NOTE 4 OTHER EXPENSES (INCOME)
Three Months Ended
Twelve Months Ended
December 31
December 31
2023
2022
2023
2022
Integration and restructuring related costs
20
11
49
46
Foreign exchange (gain) loss, net of related derivatives
(14
)
(36
)
91
31
Earnings of equity-accounted investees
(1
)
(47
)
(101
)
(247
)
Bad debt expense (recovery)
4
(6
)
55
12
COVID-19 related expenses
‐
‐
‐
8
Gain on disposal of investment
‐
‐
‐
(19
)
Project feasibility costs
33
22
86
79
Customer prepayment costs
11
7
47
42
Legal expenses
16
8
34
21
Consulting expenses
3
15
21
29
Employee special recognition award
‐
61
‐
61
Loss on Blue Chip Swaps
‐
‐
92
‐
ARO/ERL expense for non-operating sites
142
‐
152
‐
Gain on amendments to other post-retirement pension plans
‐
‐
(80
)
‐
Other expenses
91
75
102
141
305
110
548
204
The Central Bank of Argentina maintains certain currency controls that limit our ability to remit cash from Argentina. Blue Chip Swaps are trade transactions that effectively allow companies to transfer US dollars out of Argentina. Through this mechanism, we incurred a loss of $92 from the purchase of securities denominated in Argentine peso and corresponding sale in US dollars during the twelve months ended December 31, 2023. The loss is a result of the significant divergence between the Blue Chip Swap market exchange rate and the official Argentinian Central Bank rate.
NOTE 5 INCOME TAXES
Three Months Ended
Twelve Months Ended
December 31
December 31
2023
2022
2023
2022
Income tax (recovery) expense
(96
)
353
670
2,559
Actual effective tax rate on earnings (%)
39
23
33
25
Actual effective tax rate including discrete items (%)
(120
)
24
34
25
Discrete tax adjustments that impacted the tax rate
(127
)
22
28
30
During the three and twelve months ended December 31, 2023, we recorded a deferred tax asset of $134 related to an increase in the tax basis of our Swiss assets as a result of changes to our Switzerland tax declarations.
NOTE 6 SHARE CAPITAL
Share Repurchase Programs
On February 21, 2024, our Board of Directors approved a share repurchase program for up to five percent of our outstanding common shares. The 2024 normal course issuer bid, which is subject to the acceptance by the Toronto Stock Exchange, will expire after a one-year period, if we acquire the maximum number of common shares allowable or otherwise decide not to make any further repurchases.
Dividends Declared
We declared a dividend per share of $0.53 (2022 – $0.48) during the three months ended December 31, 2023, payable on January 12, 2024 to shareholders of record on December 29, 2023.
On February 21, 2024, our Board of Directors declared and increased our quarterly dividend to $0.54 per share payable on April 11, 2024, to shareholders of record on March 28, 2024. The total estimated dividend to be paid is $265.
NOTE 7 RELATED PARTY TRANSACTIONS
We sell potash outside Canada and the United States exclusively through Canpotex. Canpotex sells potash to buyers, including Nutrien, in export markets pursuant to term and spot contracts at agreed upon prices. Our total revenue is recognized at the amount received from Canpotex representing proceeds from their sale of potash, less net costs of Canpotex. Sales to Canpotex for the three months ended December 31, 2023 were $404 (2022 – $841) and the twelve months ended December 31, 2023 were $2,076 (2022 – $5,414). Purchases from Canpotex for the three months ended December 31, 2023 were $32 (2022 – $24) and the twelve months ended December 31, 2023 were $92 (2022 – $415).
As at
December 31, 2023
December 31, 2022
Receivables from Canpotex
162
866
Payables to Canpotex
64
203
View source version on businesswire.com: https://www.businesswire.com/news/home/20240216205375/en/
Investor Relations: Jeff Holzman Vice President, Investor Relations (306) 933-8545 Investors@nutrien.com Media Relations: Megan Fielding Vice President, Brand & Culture Communications (403) 797-3015
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