Nine-month results supported by record Potash sales volumes, lower Potash operating costs and higher Retail product margins in North America.
Commenced share repurchases late in the third quarter and have continued activity in the fourth quarter.
All amounts are in US dollars, except as otherwise noted
SASKATOON, Saskatchewan, Nov. 06 /BusinessWire/ --
Nutrien Ltd. (TSX and NYSE:NTR) announced today its third quarter 2024 results, with net earnings of $25 million ($0.04 diluted net earnings per share). Third quarter 2024 adjusted EBITDA1 was $1.0 billion and adjusted net earnings per share1 was $0.39.
"Nutrien delivered higher Potash sales volumes and lower operating costs through the first nine months of 2024, utilizing the strengths of our six-mine network and global distribution capabilities to respond to increased customer demand. We are seeing strong crop nutrient demand in North America for the fall application season following a period of lower field activity in the third quarter," commented Ken Seitz, Nutrien's President and CEO.
"We remain focused on strategic priorities that strengthen the advantages of our business across the ag value chain. This includes accelerating the timeline for achieving our annual consolidated cost savings target, further optimizing capital expenditures, delivering upstream fertilizer sales volume growth and advancing high-return downstream Retail growth opportunities. These initiatives provide a pathway for delivering structural improvements to our earnings and free cash flow through the cycle," added Mr. Seitz.
Highlights2:
Generated net earnings of $582 million and adjusted EBITDA of $4.3 billion in the first nine months of 2024.
Retail adjusted EBITDA increased to $1.4 billion in the first nine months of 2024 supported by higher product margins in North America. Lowered full-year 2024 Retail adjusted EBITDA guidance to $1.5 to $1.6 billion as favorable growing conditions in North America resulted in reduced pest pressure and lower field activity in the third quarter.
Potash adjusted EBITDA decreased to $1.6 billion in the first nine months of 2024 due to lower net selling prices, partially offset by record sales volumes of 11.1 million tonnes. Raised full-year 2024 Potash sales volumes guidance to 13.5 to 13.9 million tonnes due to the continued strength of global demand.
Nitrogen adjusted EBITDA decreased to $1.4 billion in the first nine months of 2024 as lower net selling prices more than offset lower natural gas costs and higher sales volumes. Total ammonia production increased in the first nine months of 2024, driven by improved natural gas utilization and reliability at our operations in Trinidad.
Accelerated operational efficiency and cost savings initiatives and expect to achieve approximately $200 million of annual consolidated savings by 2025, ahead of our initial target of 2026.
Maintained total capital expenditures guidance of $2.2 to $2.3 billion for 2024 and expect capital expenditures in a range of $2.0 to $2.1 billion in 2025 to sustain our assets and deliver on our growth initiatives.
Repurchased 1.5 million shares for a total of approximately $75 million in the second half of 2024 as of November 5, 2024.
This is a non-GAAP financial measure. See the "Non-GAAP Financial Measures" section.
Our discussion of highlights set out on this page is a comparison of the results for the three and nine months ended September 30, 2024 to the results for the three and nine months ended September 30, 2023, unless otherwise noted.
Management's Discussion and Analysis
The following management's discussion and analysis ("MD&A") is the responsibility of management and is dated as of November 6, 2024. The Board of Directors ("Board") of Nutrien carries out its responsibility for review of this disclosure principally through its Audit Committee, composed entirely of independent directors. The Audit Committee reviews and, prior to its publication, approves this disclosure pursuant to the authority delegated to it by the Board. The term "Nutrien" refers to Nutrien Ltd. and the terms "we", "us", "our", "Nutrien" and "the Company" refer to Nutrien and, as applicable, Nutrien and its direct and indirect subsidiaries on a consolidated basis. Additional information relating to Nutrien (which, except as otherwise noted, is not incorporated by reference herein), including our annual report dated February 22, 2024 ("2023 Annual Report"), which includes our annual audited consolidated financial statements ("annual financial statements") and MD&A, and our annual information form dated February 22, 2024, each for the year ended December 31, 2023, can be found on SEDAR+ at www.sedarplus.ca and on EDGAR at www.sec.gov. No update is provided to the disclosure in our 2023 annual MD&A except for material information since the date of our annual MD&A. The Company is a foreign private issuer under the rules and regulations of the US Securities and Exchange Commission (the "SEC").
This MD&A is based on, and should be read in conjunction with, the Company's unaudited interim condensed consolidated financial statements as at and for the three and nine months ended September 30, 2024 ("interim financial statements") based on International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board and prepared in accordance with International Accounting Standard ("IAS") 34 "Interim Financial Reporting", unless otherwise noted. This MD&A contains certain non-GAAP financial measures and ratios and forward-looking statements, which are described in the "Non-GAAP Financial Measures" and the "Forward-Looking Statements" sections, respectively.
Market Outlook and Guidance
Agriculture and Retail Markets
Favorable growing conditions in the US have supported expectations for record US corn and soybean yields and significant soil nutrient removal in 2024. Prospective crop margins have declined compared to the historically high levels in recent years, however we believe most growers in the US Midwest remain in a healthy financial position. Global grain stocks remain below historical average levels, supporting export demand for North American crops and firm prices for key agriculture commodities such as rice, sugar and palm oil.
Fertilizer demand in North America for the fall application season has been supported by a relatively early harvest and the need to replenish soil nutrients, following a period of lower field activity in the third quarter.
Soybean planting in Brazil was delayed by dryness; however, the pace of planting picked up in the second half of October and soybean crop area is expected to increase by one to three percent. Brazilian fertilizer demand is projected to be approximately 46 million tonnes in 2024, in line with historical record levels.
Australian growing conditions for winter crops have been favorable with timely rains received in key areas, supporting crop production prospects and expected grower returns.
Crop Nutrient Markets
We raised our 2024 global potash shipment forecast to 70 to 72 million tonnes primarily driven by stronger expected demand in Brazil and Southeast Asia. We believe the increase in global shipments in 2024 has been driven by an underlying increase in consumption in key markets.
We forecast global potash shipments between 71 and 74 million tonnes in 2025 supported by the need to replenish soil nutrient levels and the relative affordability of potash. We anticipate limited new capacity in 2025 and the potential for incremental supply tightness with demand growth.
Global ammonia prices have been supported by supply outages, project delays and higher European natural gas values. Chinese urea export restrictions, production challenges from major exporters and strong demand from India and Brazil have tightened the global urea market. US nitrogen inventory was estimated to be well below average levels at the end of the third quarter, which we expect will support demand in the fourth quarter of 2024 and early 2025.
Global phosphate markets remain tight supported by Chinese export restrictions and production outages in the US. We anticipate some impact on global demand due to tight supply and weaker affordability relative to potash and nitrogen.
Financial and Operational Guidance
Retail adjusted EBITDA guidance was lowered to $1.5 to $1.6 billion as favorable growing conditions in North America resulted in reduced pest pressure and lower field activity in the third quarter.
Potash sales volume guidance was raised to 13.5 to 13.9 million tonnes due to the continued strength of global demand. The range reflects our scheduled maintenance downtime in the fourth quarter and the assumption of a relatively short duration labor disruption at the Port of Vancouver.
Nitrogen sales volume guidance was lowered to 10.6 to 10.8 million tonnes due to extended turnarounds and unplanned outages in the third quarter, including the impact of weather-related events.
Phosphate sales volume guidance was lowered to 2.4 to 2.5 million tonnes due to weather-related production impacts in the second half of 2024.
Effective tax rate on adjusted net earnings guidance was lowered primarily due to a change in our expected geographic mix of earnings.
All guidance numbers, including those noted above, are outlined in the table below. Refer to page 65 of Nutrien's 2023 Annual Report for related assumptions and sensitivities.
2024 Guidance Ranges 1 as of
November 6, 2024
August 7, 2024
(billions of US dollars, except as otherwise noted)
Low
High
Low
High
Retail adjusted EBITDA
1.5
1.6
1.5
1.7
Potash sales volumes (million tonnes) 2
13.5
13.9
13.2
13.8
Nitrogen sales volumes (million tonnes) 2
10.6
10.8
10.7
11.1
Phosphate sales volumes (million tonnes) 2
2.4
2.5
2.5
2.6
Depreciation and amortization
2.30
2.35
2.2
2.3
Finance costs
0.70
0.75
0.7
0.8
Effective tax rate on adjusted net earnings (%) 3
21.5
22.5
23.0
25.0
Capital expenditures 4
2.2
2.3
2.2
2.3
1 See the "Forward-Looking Statements" section.
2 Manufactured product only.
3 This is a non-GAAP financial measure. See the "Non-GAAP Financial Measures" section.
4 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.
Consolidated Results
Three Months Ended September 30
Nine Months Ended September 30
(millions of US dollars, except as otherwise noted)
2024
2023
% Change
2024
2023
% Change
Sales
5,348
5,631
(5)
20,893
23,392
(11)
Gross margin
1,500
1,627
(8)
5,949
6,706
(11)
Expenses
1,304
1,242
5
4,490
4,254
6
Net earnings
25
82
(70)
582
1,106
(47)
Adjusted EBITDA 1
1,010
1,084
(7)
4,300
4,983
(14)
Diluted net earnings per share
0.04
0.15
(73)
1.13
2.18
(48)
Adjusted net earnings per share 1
0.39
0.35
11
3.18
4.01
(21)
1 This is a non-GAAP financial measure. See the "Non-GAAP Financial Measures" section.
Net earnings and adjusted EBITDA decreased in the third quarter of 2024 compared to the same period in 2023, primarily due to lower Potash net selling prices and Retail earnings, partially offset by higher Nitrogen net selling prices and record Potash sales volumes. Net earnings were impacted over the same period due to higher expense for asset retirement obligations at non-operating sites. For the first nine months of the year, net earnings and adjusted EBITDA decreased due to lower fertilizer net selling prices, partially offset by increased Retail earnings, higher Potash sales volumes and lower natural gas costs. Net earnings were also impacted over the same period due to a loss on foreign currency derivatives.
Segment Results
Our discussion of segment results set out on the following pages is a comparison of the results for the three and nine months ended September 30, 2024 to the results for the three and nine months ended September 30, 2023, unless otherwise noted.
Nutrien Ag Solutions ("Retail")
Three Months Ended September 30
Nine Months Ended September 30
(millions of US dollars, except as otherwise noted)
2024
2023
% Change
2024
2023
% Change
Sales
3,271
3,490
(6)
14,653
16,040
(9)
Cost of goods sold
2,412
2,595
(7)
11,018
12,599
(13)
Gross margin
859
895
(4)
3,635
3,441
6
Adjusted EBITDA 1
151
197
(23)
1,356
1,230
10
1 See Note 2 to the interim financial statements.
Retail adjusted EBITDA decreased in the third quarter of 2024 due primarily to lower crop nutrient sales volumes in North America and lower seed margins in Brazil. Adjusted EBITDA for the first nine months increased, supported by higher product margins in North America.
Three Months Ended September 30
Nine Months Ended September 30
Sales
Gross Margin
Sales
Gross Margin
(millions of US dollars)
2024
2023
2024
2023
2024
2023
2024
2023
Crop nutrients
1,093
1,250
210
262
5,683
6,571
1,150
1,032
Crop protection products
1,518
1,566
360
339
5,365
5,790
1,271
1,220
Seed
132
158
24
54
2,051
2,093
379
391
Services and other
242
235
164
150
690
691
528
522
Merchandise
222
231
37
40
667
750
110
131
Nutrien Financial
85
73
85
73
284
252
284
252
Nutrien Financial elimination 1
(21)
(23)
(21)
(23)
(87)
(107)
(87)
(107)
Total
3,271
3,490
859
895
14,653
16,040
3,635
3,441
1 Represents elimination of the interest and service fees charged by Nutrien Financial to Retail branches.
Crop nutrients sales decreased in the third quarter and first nine months of 2024 due to lower sales volumes and selling prices. Gross margin decreased in the third quarter due to reduced field activity in North America that contributed to lower sales volumes and lower international per-tonne margins compared to the historically high levels in the same period last year that were supported by foreign exchange benefits in Argentina. For the first nine months, gross margin increased due to higher per-tonne margins, including growth in our proprietary crop nutritional and biostimulant product lines.
Crop protection products sales were lower in the third quarter and first nine months of 2024 primarily due to lower selling prices and favorable growing conditions that resulted in reduced pest pressure and lower field activity. Gross margin for the third quarter and first nine months of 2024 were supported by the timing of supplier programs and the selling through of lower cost inventory compared to the same periods in 2023.
Seed sales and gross margin decreased in the third quarter and first nine months of 2024 mainly due to the impact of dry weather and delayed planting on our proprietary seed business in Brazil.
Nutrien Financial sales and gross margin increased in the third quarter and first nine months of 2024 due to higher financing rates offered.
Supplemental Data
Three Months Ended September 30
Nine Months Ended September 30
Gross Margin
% of Product Line 1
Gross Margin
% of Product Line 1
(millions of US dollars, except as otherwise noted)
2024
2023
2024
2023
2024
2023
2024
2023
Proprietary products
Crop nutrients
71
79
38
31
361
347
31
34
Crop protection products
119
107
32
31
429
434
34
36
Seed
4
28
22
54
148
171
39
44
Merchandise
4
2
11
6
11
8
10
7
Total
198
216
24
24
949
960
26
28
1 Represents percentage of proprietary product margins over total product line gross margin.
Three Months Ended September 30
Nine Months Ended September 30
Sales Volumes
(tonnes - thousands)
Gross Margin / Tonne
(US dollars)
Sales Volumes
(tonnes - thousands)
Gross Margin / Tonne
(US dollars)
2024
2023
2024
2023
2024
2023
2024
2023
Crop nutrients
North America
931
1,118
165
165
6,693
6,912
147
130
International
956
880
59
88
2,999
2,857
56
47
Total
1,887
1,998
111
131
9,692
9,769
119
106
(percentages)
September 30, 2024
December 31, 2023
Financial performance measures 1, 2
Cash operating coverage ratio
66
68
Adjusted average working capital to sales
20
19
Adjusted average working capital to sales excluding Nutrien Financial
-
1
Nutrien Financial adjusted net interest margin
5.3
5.2
1 Rolling four quarters.
2 These are non-GAAP financial measures. See the "Non-GAAP Financial Measures" section.
Potash
Three Months Ended September 30
Nine Months Ended September 30
(millions of US dollars, except as otherwise noted)
2024
2023
% Change
2024
2023
% Change
Net sales
884
972
(9)
2,453
2,983
(18)
Cost of goods sold
422
389
8
1,139
1,047
9
Gross margin
462
583
(21)
1,314
1,936
(32)
Adjusted EBITDA 1
555
611
(9)
1,557
1,941
(20)
1 See Note 2 to the interim financial statements.
Potash adjusted EBITDA decreased in the third quarter and first nine months of 2024 due to lower net selling prices, partially offset by record sales volumes. Higher potash production and the continued advancement of mine automation contributed to our lower controllable cash cost of product manufactured in the first nine months of 2024.
Manufactured Product
Three Months Ended September 30
Nine Months Ended September 30
($ / tonne, except as otherwise noted)
2024
2023
2024
2023
Sales volumes (tonnes - thousands)
North America
1,733
1,674
3,954
3,754
Offshore
2,419
2,221
7,174
6,159
Total sales volumes
4,152
3,895
11,128
9,913
Net selling price
North America
264
298
287
349
Offshore
177
213
183
271
Average net selling price
213
250
220
301
Cost of goods sold
102
100
102
106
Gross margin
111
150
118
195
Depreciation and amortization
43
34
43
35
Gross margin excluding depreciation and amortization 1
154
184
161
230
1 This is a non-GAAP financial measure. See the "Non-GAAP Financial Measures" section.
Sales volumes for the third quarter and first nine months of 2024 were the highest on record, supported by low channel inventories and strong potash affordability in North America and key offshore markets.
Net selling priceper tonne decreased in the third quarter and first nine months of 2024 due to a decline in benchmark prices compared to the same periods in 2023.
Cost of goods sold per tonne increased in the third quarter of 2024 as higher depreciation more than offset lower royalties and the favorable impact of higher production volumes. For the first nine months of the year, cost of goods sold per tonne decreased mainly due to higher production volumes and lower royalties.
Supplemental Data
Three Months Ended September 30
Nine Months Ended September 30
2024
2023
2024
2023
Production volumes (tonnes - thousands)
3,696
3,287
10,836
9,612
Potash controllable cash cost of product manufactured per tonne 1
52
56
52
59
Canpotex sales by market (percentage of sales volumes)
Latin America
46
49
41
47
Other Asian markets 2
27
28
29
28
China
9
10
12
9
India
4
3
5
5
Other markets
14
10
13
11
Total
100
100
100
100
1 This is a non-GAAP financial measure. See the "Non-GAAP Financial Measures" section.
2 All Asian markets except China and India.
Nitrogen
Three Months Ended September 30
Nine Months Ended September 30
(millions of US dollars, except as otherwise noted)
2024
2023
% Change
2024
2023
% Change
Net sales
793
723
10
2,732
3,251
(16)
Cost of goods sold
581
569
2
1,835
2,157
(15)
Gross margin
212
154
38
897
1,094
(18)
Adjusted EBITDA 1
355
294
21
1,413
1,539
(8)
1 See Note 2 to the interim financial statements.
Nitrogen adjusted EBITDA increased in the third quarter of 2024 primarily due to higher net selling prices. Adjusted EBITDA for the first nine months decreased as lower net selling prices more than offset lower natural gas costs and higher sales volumes. Our total ammonia production was flat for the third quarter and increased in the first nine months of the year supported by improved natural gas utilization and reliability at our operations in Trinidad.
Manufactured Product
Three Months Ended September 30
Nine Months Ended September 30
($ / tonne, except as otherwise noted)
2024
2023
2024
2023
Sales volumes (tonnes - thousands)
Ammonia
567
570
1,782
1,785
Urea and ESN®
661
687
2,300
2,386
Solutions, nitrates and sulfates
1,227
1,130
3,698
3,518
Total sales volumes
2,455
2,387
7,780
7,689
Net selling price
Ammonia
375
272
395
489
Urea and ESN®
400
396
427
496
Solutions, nitrates and sulfates
207
205
224
255
Average net selling price
298
276
323
384
Cost of goods sold
215
208
210
239
Gross margin
83
68
113
145
Depreciation and amortization
54
54
54
55
Gross margin excluding depreciation and amortization 1
137
122
167
200
1 This is a non-GAAP financial measure. See the "Non-GAAP Financial Measures" section.
Sales volumes were higher in the third quarter and first nine months of 2024 primarily due to higher production and strong demand for solutions, nitrates, and sulfates.
Net selling price per tonne was higher in the third quarter of 2024 primarily due to stronger ammonia benchmark prices. For the first nine months of the year, net selling price per tonne was lower for all major nitrogen products due to weaker benchmark prices in key nitrogen producing regions in the first half of the year.
Cost of goods sold per tonne increased in the third quarter of 2024 mainly due to higher natural gas costs in Trinidad, partially offset by lower natural gas costs in North America. For the first nine months of the year, cost of goods sold per tonne decreased primarily due to lower natural gas costs across all operating regions.
Supplemental Data
Three Months Ended September 30
Nine Months Ended September 30
2024
2023
2024
2023
Sales volumes (tonnes - thousands)
Fertilizer
1,319
1,305
4,458
4,419
Industrial and feed
1,136
1,082
3,322
3,270
Production volumes (tonnes - thousands)
Ammonia production - total 1
1,322
1,315
4,157
3,995
Ammonia production - adjusted 1, 2
895
912
2,912
2,880
Ammonia operating rate (%) 2
79
82
87
88
Natural gas costs (US dollars per MMBtu)
Overall natural gas cost excluding realized derivative impact
3.13
2.96
2.98
3.56
Realized derivative impact 3
0.15
(0.01)
0.09
(0.01)
Overall natural gas cost
3.28
2.95
3.07
3.55
1 All figures are provided on a gross production basis in thousands of product tonnes.
2 Excludes Trinidad and Joffre.
3 Includes realized derivative impacts recorded as part of cost of goods sold or other income and expenses. Refer to Note 4 to the interim financial statements.
Phosphate
Three Months Ended September 30
Nine Months Ended September 30
(millions of US dollars, except as otherwise noted)
2024
2023
% Change
2024
2023
% Change
Net sales
412
444
(7)
1,243
1,460
(15)
Cost of goods sold
383
417
(8)
1,116
1,297
(14)
Gross margin
29
27
7
127
163
(22)
Adjusted EBITDA 1
89
90
(1)
298
340
(12)
1 See Note 2 to the interim financial statements.
Phosphate adjusted EBITDA was flat in the third quarter of 2024 as higher net selling prices were offset by lower sales volumes and higher input costs. Adjusted EBITDA for the first nine months decreased as lower net selling prices more than offset higher sales volumes and lower costs.
Manufactured Product
Three Months Ended September 30
Nine Months Ended September 30
($ / tonne, except as otherwise noted)
2024
2023
2024
2023
Sales volumes (tonnes - thousands)
Fertilizer
454
519
1,316
1,333
Industrial and feed
168
145
510
465
Total sales volumes
622
664
1,826
1,798
Net selling price
Fertilizer
605
472
611
572
Industrial and feed
797
946
826
1,064
Average net selling price
657
575
671
700
Cost of goods sold
601
528
594
604
Gross margin
56
47
77
96
Depreciation and amortization
121
113
117
118
Gross margin excluding depreciation and amortization 1
177
160
194
214
1 This is a non-GAAP financial measure. See the "Non-GAAP Financial Measures" section.
Sales volumes were lower in the third quarter of 2024 as weather-related events impacted production volumes. Sales volumes for the first nine months were higher than the same period in 2023 due to stronger industrial and feed demand.
Net selling price per tonne increased in the third quarter of 2024 primarily due to the strength of fertilizer benchmark prices. For the first nine months of 2024, net selling price per tonne decreased due to lower industrial and feed net selling prices which reflect the typical lag in price realizations relative to benchmark prices.
Cost of goods sold per tonne increased in the third quarter of 2024 primarily due to higher water treatment costs related to weather-related events, higher ammonia input costs and lower production volumes. Cost of goods sold per tonne for the first nine months was lower mainly due to lower ammonia and sulfur input costs.
Supplemental Data
Three Months Ended September 30
Nine Months Ended September 30
2024
2023
2024
2023
Production volumes (P2O5 tonnes - thousands)
330
354
1,008
1,026
P2O5 operating rate (%)
77
83
79
81
Corporate and Others and Eliminations
Three Months Ended September 30
Nine Months Ended September 30
(millions of US dollars, except as otherwise noted)
2024
2023
% Change
2024
2023
% Change
Corporate and Others
Selling expenses (recovery)
(2)
(3)
(33)
(7)
(7)
-
General and administrative expenses
90
88
2
277
260
7
Share-based compensation expense (recovery)
1
42
(98)
17
(7)
n/m
Foreign exchange loss, net of related derivatives
31
87
(64)
359
105
242
Other expenses
194
30
547
274
82
234
Adjusted EBITDA 1
(74)
(77)
(4)
(296)
(150)
97
Eliminations
Gross margin
(62)
(32)
94
(24)
72
n/m
Adjusted EBITDA 1
(66)
(31)
113
(28)
83
n/m
1 See Note 2 to the interim financial statements.
Share-based compensation expense decreased in the third quarter of 2024 due to a lower increase in the fair value of our share-based awards compared to the same period in 2023. We had an expense in the first nine months of 2024 due to an increase in the fair value of our share-based awards compared to a recovery in the same period in 2023 due to a decrease in the fair value of our share-based awards. The fair value of our share-based awards takes into consideration several factors such as our share price movement, our performance relative to our peer group and our return on invested capital.
Foreign exchange loss, net of related derivatives was lower in the third quarter of 2024 compared to the same period in 2023 due to lower foreign exchange losses in South America. The loss was higher in the first nine months of 2024 compared to the same period in 2023 as it included a previously reported $220 million loss on foreign currency derivatives in Brazil. For further detail regarding the impact of the loss and our remediation efforts, see the Controls and Procedures section of this MD&A and Note 6 to the interim financial statements.
Other expenses were higher in the third quarter and in the first nine months of 2024 compared to the same periods in 2023 mainly due to a $185 million increase in expense for asset retirement obligations and accrued environmental costs recorded in the third quarter of 2024 related to changes in closure cost estimates at certain non-operating sites. The first nine months of 2023 included a $92 million loss on Blue Chip Swaps. Refer to Note 4 for additional information. This was partially offset by an $80 million gain in the first nine months of 2023 from our other post-retirement benefit plan amendments.
Eliminations of gross margin between operating segments increased in the third quarter of 2024 mainly due to higher sales volumes at higher average margins compared to the same period in 2023. Eliminations of gross margin between operating segments in the first nine months of 2024 was an elimination due to higher sales volumes at lower average margins compared to a recovery in the same period in 2023.
Finance Costs, Income Taxes and Other Comprehensive Income (Loss)
Three Months Ended September 30
Nine Months Ended September 30
(millions of US dollars, except as otherwise noted)
2024
2023
% Change
2024
2023
% Change
Finance costs
184
206
(11)
525
580
(9)
Income tax (recovery) expense
(13)
97
n/m
352
766
(54)
Actual effective tax rate including discrete items (%)
(112)
54
n/m
38
41
(7)
Other comprehensive income (loss)
122
(86)
n/m
64
(16)
n/m
Finance costs were lower in the third quarter and first nine months of 2024 primarily due to lower short-term debt average balances partially offset by higher interest rates on long-term debt.
Income tax was a recovery in the third quarter of 2024 compared to an expense in the same period in 2023 mainly due to a tax recovery in higher tax jurisdictions, which more than offset tax expense in lower tax jurisdictions. The tax recovery resulted in a negative effective tax rate in the third quarter of 2024 compared to the same period in 2023.
The lower income tax expense in the first nine months of 2024 compared to the same period in 2023 was due to lower earnings and lower discrete tax adjustments. The discrete tax adjustments in 2023 were related to a change in recognition of deferred tax assets in South America as they no longer met the asset recognition criteria and Canadian audit assessments. These factors resulted in a lower effective tax rate in the first nine months of 2024 compared to the same period in 2023.
Other comprehensive income in the third quarter and first nine months of 2024 compared to a loss for the same periods in 2023 was mainly due to the appreciation of the Australian currency in the third quarter of 2024, and mainly due to appreciation of Australian and Argentinian currencies partially offset by the depreciation of the Brazilian currency in the first nine months of 2024, relative to the US dollar.
Liquidity and Capital Resources
Sources and Uses of Liquidity
We continued to manage our capital in accordance with our capital allocation strategy. We believe that our internally generated cash flow, supplemented by available borrowings under new or existing financing sources, if necessary, will be sufficient to meet our anticipated capital expenditures, planned growth and development activities, and other cash requirements for the foreseeable future. Refer to the "Capital Structure and Management" section for details on our existing long-term debt and credit facilities.
Sources and Uses of Cash
Three Months Ended September 30
Nine Months Ended September 30
(millions of US dollars, except as otherwise noted)
2024
2023
% Change
2024
2023
% Change
Cash (used in) provided by operating activities
(908)
(469)
94
412
916
(55)
Cash used in investing activities
(506)
(673)
(25)
(1,614)
(2,225)
(27)
Cash provided by financing activities
922
976
(6)
786
981
(20)
Cash used for dividends and share repurchases 1
(318)
(261)
22
(845)
(1,817)
(53)
1 This is a supplementary financial measure. See the "Other Financial Measures" section.
Cash (used in) provided by operating activities
Cash (used in) provided by operating activities in the third quarter and first nine months of 2024 was lower compared to the same periods in 2023 primarily due to lower sales across all segments. This was partially offset by lower cash paid for income taxes and cash paid to our suppliers primarily due to lower cost to purchase inventory for resale and other costs such as royalties and sulfur costs.
Cash used in investing activities
Cash used in investing activities was lower in the third quarter and first nine months of 2024 compared to the same periods in 2023 due to lower capital expenditures and fewer business acquisitions.
Cash provided by financing activities
Cash provided by financing activities in the third quarter and first nine months of 2024 was lower compared to the same periods in 2023 due to lower proceeds from debt. For the first nine months of 2024, we had lower share repurchases compared to the same period in 2023.
Cash used for dividends and share repurchases
Cash used for dividends and share repurchases was higher in the third quarter of 2024 as we repurchased shares in the third quarter of 2024 with no similar share repurchases in the same period in 2023.
Cash used for dividends and share repurchases was lower in the first nine months of 2024 from lower share repurchases compared to the same period in 2023.
Financial Condition Review
The following is a comparison of balance sheet categories that are considered material:
As at
(millions of US dollars, except as otherwise noted)
September 30, 2024
December 31, 2023
$ Change
% Change
Assets
Cash and cash equivalents
520
941
(421)
(45)
Receivables
7,786
5,398
2,388
44
Inventories
4,890
6,336
(1,446)
(23)
Prepaid expenses and other current assets
678
1,495
(817)
(55)
Property, plant and equipment
22,329
22,461
(132)
(1)
Intangible assets
1,877
2,217
(340)
(15)
Liabilities and Shareholders' Equity
Short-term debt
2,967
1,815
1,152
63
Current portion of long-term debt
1,013
512
501
98
Payables and accrued charges
6,613
9,467
(2,854)
(30)
Long-term debt
9,383
8,913
470
5
Retained earnings
11,291
11,531
(240)
(2)
Explanations for changes in Cash and cash equivalents are in the "Liquidity and Capital Resources - Sources and Uses of Cash" section.
Receivables increased primarily due to the seasonality of Retail sales, resulting in higher receivables with customers and vendor rebates.
Inventories decreased due to Retail's seasonal sales and lower-value inventories on hand as related benchmark prices decreased. Generally, we build up our inventory levels in North America near year-end in preparation for the next year's upcoming planting and application seasons.
Prepaid expenses and other current assets decreased due to the seasonal drawdown of prepaid inventories where Retail typically prepays for products during the fourth quarter and takes possession of inventory throughout the following year.
Property, plant and equipment decreased due to the impairments related to our Retail - Brazil assets and Geismar Clean Ammonia project in the second quarter of 2024.
Intangible assets decreased due to an impairment of our Retail - Brazil assets in the second quarter of 2024.
Short-term debt increased due to drawdowns on our commercial paper program based on our working capital requirements driven by the seasonality of our business.
Payables and accrued charges decreased primarily due to seasonality of our Retail segment. We generally receive higher customer prepayments in North America near year-end and customers draw down on the balance throughout the year. We also had lower trade and other payables as we settled our obligations with suppliers compared to the buildup of trade and other payables near year-end as we purchase inventory for the upcoming spring and planting seasons.
Long-term debt including current portion increased due to the issuance of $1,000 million of notes in the first nine months of 2024.
Retained earnings decreased as dividends declared and share repurchases exceeded net earnings in the first nine months of 2024.
Capital Structure and Management
Principal Debt Instruments
As part of the normal course of business, we closely monitor our liquidity position. We use a combination of cash generated from operations and short-term and long-term debt to finance our operations. We continually evaluate various financing arrangements and may seek to engage in transactions from time to time when market and other conditions are favorable. We were in compliance with our debt covenants and did not have any changes to our credit ratings for the nine months ended September 30, 2024.
Capital Structure (Debt and Equity)
(millions of US dollars)
September 30, 2024
December 31, 2023
Short-term debt
2,967
1,815
Current portion of long-term debt
1,013
512
Current portion of lease liabilities
364
327
Long-term debt
9,383
8,913
Lease liabilities
1,029
999
Shareholders' equity
25,006
25,201
Commercial Paper, Credit Facilities and Other Debt
We have a total facility limit of approximately $8,200 million comprised of several credit facilities available in the jurisdictions where we operate. Our total facility limit decreased in the third quarter of 2024 due to a reduction in our unsecured revolving term facility limit from $1,500 million to $750 million. In North America, we have a commercial paper program, which is limited to the undrawn amount under our $4,500 million unsecured revolving term credit facility and excess cash invested in highly liquid securities.
As at September 30, 2024, we have utilized $2,895 million of our total facility limit, which includes $2,383 million of commercial paper outstanding. In the third quarter of 2024, we extended the maturities on our $4,500 million unsecured revolving term credit facility to September 4, 2029 and our $750 million unsecured revolving term credit facility to September 3, 2025.
As at September 30, 2024, $231 million in letters of credit were outstanding and committed, with $80 million of remaining credit available under our letter of credit facilities.
Our long-term debt consists primarily of notes and debentures. See the "Capital Structure and Management" section of our 2023 Annual Report for information on balances, rates and maturities for our notes and debentures. On June 21, 2024, we issued $400 million of 5.2 percent senior notes due June 21, 2027 and $600 million of 5.4 percent senior notes due June 21, 2034.
In March 2024, we filed a base shelf prospectus in Canada and the US qualifying the issuance of common shares, debt securities, and other securities during a period of 25 months from March 22, 2024.
See Notes 7, 8 and 9 to the interim financial statements for additional information.
Outstanding Share Data
As at November 5, 2024
Common shares
493,432,198
Options to purchase common shares
3,111,221
For more information on our capital structure and management, see Note 24 to the annual financial statements in our 2023 Annual Report.
Quarterly Results
(millions of US dollars, except as otherwise noted)
Q3 2024
Q2 2024
Q1 2024
Q4 2023
Q3 2023
Q2 2023
Q1 2023
Q4 2022
Sales
5,348
10,156
5,389
5,664
5,631
11,654
6,107
7,533
Net earnings
25
392
165
176
82
448
576
1,118
Net earnings attributable to equity holders of Nutrien
18
385
158
172
75
440
571
1,112
Net earnings per share attributable to equity holders of Nutrien
Basic
0.04
0.78
0.32
0.35
0.15
0.89
1.14
2.15
Diluted
0.04
0.78
0.32
0.35
0.15
0.89
1.14
2.15
Our quarterly earnings are significantly affected by the seasonality of our business, fertilizer benchmark prices, which have been volatile over the last two years and are affected by demand-supply conditions, grower affordability and weather. See Note 10 to the interim financial statements.
The following table describes certain items that impacted our quarterly earnings:
Quarter
Transaction or Event
Q2 2024
$530 million non-cash impairment of assets comprised of a $335 million non-cash impairment of the Retail - Brazil intangible assets and property plant and equipment due to the ongoing market instability and more moderate margin expectations, and a $195 million non-cash impairment of our Geismar Clean Ammonia project property, plant and equipment as we are no longer pursuing the project. We also recorded a foreign exchange loss of $220 million on foreign currency derivatives in Brazil for the second quarter of 2024.
Q2 2023
$698 million non-cash impairment of assets comprised of a $233 million non-cash impairment of our Phosphate White Springs property, plant and equipment due to a decrease in our forecasted phosphate margins and a $465 million non-cash impairment of our Retail - South America assets primarily related to goodwill mainly due to the impact of crop input price volatility, more moderate long-term growth assumptions and higher interest rates, which lowered our forecasted earnings.
Critical Accounting Estimates
Our significant accounting policies are disclosed in our 2023 Annual Report. We have discussed the development, selection and application of our key accounting policies, and the critical accounting estimates and assumptions they involve, with the Audit Committee of the Board. Our critical accounting estimates are discussed on pages 72 to 74 of our 2023 Annual Report. There were no material changes to our critical accounting estimates for the three or nine months ended September 30, 2024.
Controls and Procedures
We are required to maintain disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act") and National Instrument 52-109 - "Certification of Disclosure in Issuers' Annual and Interim Filings" ("NI 52-109") designed to provide reasonable assurance that information required to be disclosed by Nutrien in its annual filings, interim filings (as these terms are defined in NI 52-109), and other reports filed or submitted by us under securities legislation is recorded, processed, summarized and reported within the required time periods. As at September 30, 2024, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were not effective due to the material weakness described below.
Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting ("ICFR"), as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, as amended, and NI 52-109. ICFR is designed to provide reasonable assurance regarding the reliability of financial reporting and preparation of financial statements for external purposes in accordance with IFRS. Any system of ICFR, no matter how well designed, has inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we have designed ICFR based on the framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control - Integrated Framework (2013). A material weakness is a deficiency, or a combination of deficiencies, in ICFR, such that there is a reasonable possibility that a material misstatement of the annual financial statements, or interim financial statements, will not be prevented or detected on a timely basis.
As at September 30, 2024, we have a material weakness related to our controls over derivative contract authorization in Brazil, which was identified by our management in late June 2024 and which resulted in unauthorized execution of derivative contracts in the second quarter of 2024. This material weakness did not result in any errors or a material misstatement in our interim or annual financial statements.
In the second quarter of 2024, changes were introduced to our derivative contract authorization and execution process in Brazil. As a result of these changes, our controls were not designed effectively to ensure that segregation of duties was maintained, and checks of authorization were performed in a timely manner and that derivative contracts entered into were recorded in our treasury reporting systems on a timely basis.
Notwithstanding this identified material weakness, we believe that our interim financial statements present fairly, in all material respects, our business, financial condition and results of operations for the periods presented.
Remediation Plan
The control deficiency described above was identified by our management in late June 2024, prior to the preparation and filing of our interim financial statements as at June 30, 2024 and for the three and six months then ended. We have prioritized the remediation of the material weakness described above and are working to complete certain remediation activities under the oversight of the Audit Committee to resolve the issue.
Specific actions that are being taken to remediate this material weakness include the following:
redesigning certain processes and controls relating to derivative contract authorization and execution in Brazil, including with respect to segregation of duties, compliance and confirmation, accounting and reconciliation activities, authority limits, and systems controls; and,
enhancing the supervision and review activities related to trading in derivative contracts in Brazil.
As of September 30, 2024, we have taken steps to implement our remediation plan; however, the material weakness will not be considered remediated until the enhanced controls operate for a sufficient period of time and management has concluded, through testing, that these controls are designed and operating effectively. We will continue to monitor our remediation plan in relation to the material weakness with the intention of such being remediated by the end of 2024.
Other than the remediation steps relating to the material weakness described above, there has been no change in our ICFR during the three months ended September 30, 2024 that has materially affected, or is reasonably likely to materially affect, our ICFR.
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 and capital expenditures; expectations regarding certain targets, including our targeted $200 million in annual consolidated cost savings, expected capital expenditures in 2025, delivering upstream fertilizer sales volume growth and advancing high-return downstream Retail growth opportunities, and the anticipated benefits thereof, including with respect to earnings and cash flow; expectations regarding our capital allocation intentions and strategies; our ability to advance strategic initiatives and high value growth investments; capital spending expectations for 2024 and beyond; expectations regarding performance of our operating segments in 2024 and beyond, including increased potash shipment forecasts; expectations regarding a strong fall fertilizer application season in North America; our operating segment market outlooks and our expectations for market conditions and fundamentals, 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 negotiation of sales contracts; acquisitions and divestitures and the anticipated benefits thereof; expectations in connection with our ability to deliver long-term returns to shareholders, and expectations related to the timing and outcome of remediation efforts for the material weakness in ICFR related to derivative contract authorization.
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 in relation to the operation of our business as currently planned and our ability to achieve our business objectives 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, product distribution agreements, inventory levels, exports, crop development and cost of labor and interest, exchange and effective tax rates; potash demand growth in offshore markets and normalization of Canpotex port operations; 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 - Brazil business asset impairments; our intention to complete share repurchases under our normal course issuer bid programs, the funding of such share repurchases, existing and future market conditions, including with respect to the price of our common shares, capital allocation priorities and compliance with respect to applicable limitations under securities laws and regulations and stock exchange policies and assumptions related to our 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; assumptions regarding future markets for clean ammonia; the adequacy of our cash generated from operations and our ability to access our credit facilities or capital markets for additional sources of financing; our ability to identify suitable candidates for acquisitions and divestitures and negotiate acceptable terms; our ability to maintain investment grade ratings and achieve our performance targets; our ability to successfully negotiate sales and other contracts and our ability to successfully implement new initiatives and programs; and our ability to successfully remediate the material weakness in our ICFR related to derivative contract authorization.
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, results of operations or targets, such as our targeted $200 million in annual consolidated cost savings, expected capital expenditures in 2025, delivering upstream fertilizer sales volume growth and advancing high-return downstream Retail growth opportunities; 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 (and transition to La Niña 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, antitrust and other laws or regulations and the interpretation thereof; political or military risks, including civil unrest, actions by armed groups or conflict and malicious acts including terrorism and industrial espionage; our ability to access sufficient, cost-effective and timely transportation, distribution and storage of products (including potential rail transportation and port disruptions due to labor strikes and/or work stoppages or other similar actions); the occurrence of a major environmental or safety incident or becoming subject to legal or regulatory proceedings; 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, including risks associated with disclosure thereof; failure to remediate the material weakness in our ICFR related to derivative contract authorization; and other risk factors detailed from time to time in Nutrien reports filed with the Canadian securities regulators and the SEC.
The purpose of our revised Retail adjusted EBITDA and our depreciation and amortization, finance costs, effective tax rate 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 2023 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 global provider of crop inputs and services. 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 business across the ag value chain 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.
We use both 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, 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 related to financial instruments in Argentina.
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 September 30
Nine Months Ended September 30
(millions of US dollars)
2024
2023
2024
2023
Net earnings
25
82
582
1,106
Finance costs
184
206
525
580
Income tax (recovery) expense
(13)
97
352
766
Depreciation and amortization
598
552
1,749
1,604
EBITDA 1
794
937
3,208
4,056
Adjustments:
Share-based compensation expense (recovery)
1
42
17
(7)
Foreign exchange loss, net of related derivatives
31
87
359
105
ARO/ERL related expenses for non-operating sites
184
4
152
10
Loss related to financial instruments in Argentina
-
-
34
92
Integration and restructuring related costs
-
14
-
29
Impairment of assets
-
-
530
698
Adjusted EBITDA
1,010
1,084
4,300
4,983
1 EBITDA is calculated as net earnings before finance costs, income taxes, and depreciation and amortization.
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, 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 related to financial instruments in Argentina, change in recognition of tax losses and deductible temporary differences related to impairments and certain changes to tax declarations. We generally apply the annual forecasted effective tax rate to specific adjustments during the year, and at year-end, we apply the actual effective tax rate.
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
September 30, 2024
Nine Months Ended
September 30, 2024
(millions of US dollars, except as otherwise noted)
Increases(Decreases)
Post-Tax
Per Diluted Share
Increases(Decreases)
Post-Tax
Per DilutedShare
Net earnings attributable to equity holders of Nutrien
18
0.04
561
1.13
Adjustments:
Share-based compensation expense
1
1
-
17
13
0.03
Foreign exchange loss, net of related derivatives
31
38
0.08
359
361
0.73
Impairment of assets
-
-
-
530
491
1.00
ARO/ERL related expenses for non-operating sites
184
134
0.27
152
112
0.22
Loss related to financial instruments in Argentina
-
-
-
34
34
0.07
Adjusted net earnings
191
0.39
1,572
3.18
Three Months Ended
September 30, 2023
Nine Months Ended
September 30, 2023
(millions of US dollars, except as otherwise noted)
Increases(Decreases)
Post-Tax
Per DilutedShare
Increases(Decreases)
Post-Tax
Per DilutedShare
Net earnings attributable to equity holders of Nutrien
75
0.15
1,086
2.18
Adjustments:
Share-based compensation expense (recovery)
42
19
0.04
(7)
(4)
(0.01)
Foreign exchange loss, net of related derivatives
87
71
0.14
105
80
0.16
Integration and restructuring related costs
14
6
0.02
29
17
0.03
Impairment of assets
-
-
-
698
653
1.32
ARO/ERL related expenses for non-operating sites
4
2
-
10
6
0.02
Loss related to financial instruments in Argentina
-
-
-
92
92
0.18
Change in recognition of deferred tax assets
-
-
-
66
66
0.13
Adjusted net earnings
173
0.35
1,996
4.01
Effective Tax Rate on Adjusted Net Earnings Guidance
Effective tax rate on adjusted net earnings guidance is a forward-looking non-GAAP financial measure as it includes adjusted net earnings, which is a non-GAAP financial measure. It is provided to assist readers in understanding our expected financial results. Effective tax rate on adjusted net earnings guidance excludes certain items that management is aware of that permit management to focus on the performance of our operations (see the Adjusted Net Earnings and Adjusted Net Earnings Per Share section for items generally adjusted). We do not provide a reconciliation of this forward-looking measure to the most directly comparable financial measures calculated and presented in accordance with IFRS because a meaningful or accurate calculation of reconciling items and the information is not available without unreasonable effort due to unknown variables, including the timing and amount of certain reconciling items, and the uncertainty related to future results. These unknown variables may include unpredictable transactions of significant value that may be inherently difficult to determine without unreasonable efforts. The probable significance of such unavailable information, which could be material to future results, cannot be addressed.
Gross Margin Excluding Depreciation and Amortization Per Tonne - Manufactured Product
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 September 30
Nine Months Ended September 30
(millions of US dollars, except as otherwise noted)
2024
2023
2024
2023
Total COGS - Potash
422
389
1,139
1,047
Change in inventory
(51)
(73)
(30)
(47)
Other adjustments 1
(5)
(2)
(14)
(19)
COPM
366
314
1,095
981
Depreciation and amortization in COPM
(145)
(102)
(439)
(303)
Royalties in COPM
(23)
(20)
(62)
(77)
Natural gas costs and carbon taxes in COPM
(7)
(9)
(27)
(34)
Controllable cash COPM
191
183
567
567
Production tonnes (tonnes - thousands)
3,696
3,287
10,836
9,612
Potash controllable cash COPM per tonne
52
56
52
59
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.
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 September 30, 2024
(millions of US dollars, except as otherwise noted)
Q4 2023
Q1 2024
Q2 2024
Q3 2024
Total/Average
Nutrien Financial revenue
70
66
133
85
Deemed interest expense 1
(36)
(27)
(50)
(52)
Net interest
34
39
83
33
189
Average Nutrien Financial net receivables
2,893
2,489
4,560
4,318
3,565
Nutrien Financial adjusted net interest margin (%)
5.3
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
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 September 30, 2024
(millions of US dollars, except as otherwise noted)
Q4 2023
Q1 2024
Q2 2024
Q3 2024
Total
Selling expenses
841
790
1,005
815
3,451
General and administrative expenses
55
52
51
51
209
Other expenses
77
22
41
32
172
Operating expenses
973
864
1,097
898
3,832
Depreciation and amortization in operating expenses
(199)
(190)
(193)
(182)
(764)
Operating expenses excluding depreciation and amortization
774
674
904
716
3,068
Gross margin
989
747
2,029
859
4,624
Depreciation and amortization in cost of goods sold
2
4
3
8
17
Gross margin excluding depreciation and amortization
991
751
2,032
867
4,641
Cash operating coverage ratio (%)
66
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
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 September 30, 2024
(millions of US dollars, except as otherwise noted)
Q4 2023
Q1 2024
Q2 2024
Q3 2024
Average/Total
Current assets
10,498
11,821
11,181
10,559
Current liabilities
(8,210)
(8,401)
(8,002)
(5,263)
Working capital
2,288
3,420
3,179
5,296
3,546
Working capital from certain recent acquisitions
-
-
-
-
Adjusted working capital
2,288
3,420
3,179
5,296
3,546
Nutrien Financial working capital
(2,893)
(2,489)
(4,560)
(4,318)
Adjusted working capital excluding Nutrien Financial
(605)
931
(1,381)
978
(19)
Sales
3,502
3,308
8,074
3,271
Sales from certain recent acquisitions
-
-
-
-
Adjusted sales
3,502
3,308
8,074
3,271
18,155
Nutrien Financial revenue
(70)
(66)
(133)
(85)
Adjusted sales excluding Nutrien Financial
3,432
3,242
7,941
3,186
17,801
Adjusted average working capital to sales (%)
20
Adjusted average working capital to sales excluding 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
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
Other Financial Measures
Selected Additional Financial Data
Nutrien Financial
As at September 30, 2024
As at
December
31, 2023
(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
3,213
105
79
191
3,588
(61)
3,527
2,206
International
646
62
25
69
802
(11)
791
687
Nutrien Financial receivables
3,859
167
104
260
4,390
(72)
4,318
2,893
1 Bad debt expense on the above receivables for the nine months ended September 30, 2024 and 2023 were $44 million and $36 million, respectively, in the Retail segment.
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.
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.
Cash used for dividends and share repurchases: 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
Condensed Consolidated Statements of Earnings
Three Months Ended
Nine Months Ended
September 30
September 30
(millions of US dollars, except as otherwise noted)
Note
2024
2023
2024
2023
SALES
2, 11
5,348
5,631
20,893
23,392
Freight, transportation and distribution
263
263
741
714
Cost of goods sold
3,585
3,741
14,203
15,972
GROSS MARGIN
1,500
1,627
5,949
6,706
Selling expenses
820
799
2,622
2,548
General and administrative expenses
156
151
468
453
Provincial mining taxes
74
96
210
319
Share-based compensation expense (recovery)
1
42
17
(7)
Impairment of assets
3
-
-
530
698
Foreign exchange loss, net of related derivatives
6
31
87
359
105
Other expenses
4
222
67
284
138
EARNINGS BEFORE FINANCE COSTS AND INCOME TAXES
196
385
1,459
2,452
Finance costs
184
206
525
580
EARNINGS BEFORE INCOME TAXES
12
179
934
1,872
Income tax (recovery) expense
5
(13)
97
352
766
NET EARNINGS
25
82
582
1,106
Attributable to
Equity holders of Nutrien
18
75
561
1,086
Non-controlling interest
7
7
21
20
NET EARNINGS
25
82
582
1,106
NET EARNINGS PER SHARE ATTRIBUTABLE TO EQUITY HOLDERS OF NUTRIEN ("EPS")
Basic
0.04
0.15
1.13
2.18
Diluted
0.04
0.15
1.13
2.18
Weighted average shares outstanding for basic EPS
494,743,000
494,517,000
494,653,000
496,999,000
Weighted average shares outstanding for diluted EPS
494,857,000
495,056,000
494,851,000
497,708,000
Condensed Consolidated Statements of Comprehensive Income (Loss)
Three Months Ended
Nine Months Ended
September 30
September 30
(millions of US dollars, net of related income taxes)
2024
2023
2024
2023
NET EARNINGS
25
82
582
1,106
Other comprehensive income (loss)
Items that will not be reclassified to net earnings:
Net actuarial loss on defined benefit plans
-
-
-
(3)
Net fair value gain (loss) on investments
35
(6)
53
5
Items that have been or may be subsequently reclassified to net earnings:
Gain (loss) on currency translation of foreign operations
85
(64)
28
(14)
Other
2
(16)
(17)
(4)
OTHER COMPREHENSIVE INCOME (LOSS)
122
(86)
64
(16)
COMPREHENSIVE INCOME (LOSS)
147
(4)
646
1,090
Attributable to
Equity holders of Nutrien
139
(11)
625
1,070
Non-controlling interest
8
7
21
20
COMPREHENSIVE INCOME (LOSS)
147
(4)
646
1,090
(See Notes to the Condensed Consolidated Financial Statements)
Condensed Consolidated Statements of Cash Flows
Three Months Ended
Nine Months Ended
September 30
September 30
(millions of US dollars)
Note
2024
2023
2024
2023
Note 1
Note 1
OPERATING ACTIVITIES
Net earnings
25
82
582
1,106
Adjustments for:
Depreciation and amortization
598
552
1,749
1,604
Share-based compensation expense (recovery)
1
42
17
(7)
Impairment of assets
3
-
-
530
698
(Recovery of) provision for deferred income tax
(36)
55
15
176
Net (undistributed) distributed earnings of equity-accounted investees
(24)
(28)
14
112
Fair value adjustment to derivatives
6
(180)
(27)
6
5
Loss related to financial instruments in Argentina
4
-
-
34
92
Long-term income tax receivables and payables
9
1
17
(89)
Other long-term assets, liabilities and miscellaneous
251
53
321
39
Cash from operations before working capital changes
644
730
3,285
3,736
Changes in non-cash operating working capital:
Receivables
418
627
(2,394)
(1,491)
Inventories and prepaid expenses and other current assets
373
794
2,265
3,366
Payables and accrued charges
(2,343)
(2,620)
(2,744)
(4,695)
CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES
(908)
(469)
412
916
INVESTING ACTIVITIES
Capital expenditures 1
(529)
(634)
(1,449)
(1,890)
Business acquisitions, net of cash acquired
(2)
-
(6)
(116)
(Purchase of) proceeds from investments, held within three months, net
(15)
(36)
(30)
(134)
Purchase of investments
(1)
(12)
(112)
(12)
Net changes in non-cash working capital
30
36
(55)
(68)
Other
11
(27)
38
(5)
CASH USED IN INVESTING ACTIVITIES
(506)
(673)
(1,614)
(2,225)
FINANCING ACTIVITIES
Proceeds from (repayment of) debt, maturing within three months, net
1,378
1,445
1,089
2,213
Proceeds from debt
8
-
-
998
1,500
Repayment of debt
(43)
(118)
(132)
(635)
Repayment of principal portion of lease liabilities
(98)
(91)
(300)
(278)
Dividends paid to Nutrien's shareholders
(268)
(261)
(795)
(770)
Repurchase of common shares
9
(50)
-
(50)
(1,047)
Issuance of common shares
7
1
16
32
Other
(4)
-
(40)
(34)
CASH PROVIDED BY FINANCING ACTIVITIES
922
976
786
981
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
8
(17)
(5)
(19)
DECREASE IN CASH AND CASH EQUIVALENTS
(484)
(183)
(421)
(347)
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD
1,004
737
941
901
CASH AND CASH EQUIVALENTS - END OF PERIOD
520
554
520
554
Cash and cash equivalents is composed of:
Cash
472
508
472
508
Short-term investments
48
46
48
46
520
554
520
554
SUPPLEMENTAL CASH FLOWS INFORMATION
Interest paid
148
137
496
462
Income taxes paid
127
133
260
1,722
Total cash outflow for leases
134
125
418
373
1 Includes additions to property, plant and equipment, and intangible assets for the three months ended September 30, 2024 of $489 million and $40 million (2023 - $580 million and $54 million), respectively, and for the nine months ended September 30, 2024 of $1,333 million and $116 million (2023 - $1,734 million and $156 million), respectively.
(See Notes to the Condensed Consolidated Financial Statements)
Condensed Consolidated Statements of Changes in Shareholders' Equity
Accumulated Other Comprehensive
(Loss) Income ("AOCI")
(millions of US dollars, inclusive of related tax, except as otherwise noted)
Number of Common Shares
ShareCapital
Contributed Surplus
(Loss) Gain on Currency Translation of Foreign Operations
Other
TotalAOCI
RetainedEarnings
Equity Holders ofNutrien
Non-ControllingInterest
TotalEquity
BALANCE - DECEMBER 31, 2022
507,246,105
14,172
109
(374)
(17)
(391)
11,928
25,818
45
25,863
Net earnings
-
-
-
-
-
-
1,086
1,086
20
1,106
Other comprehensive loss
-
-
-
(14)
(2)
(16)
-
(16)
-
(16)
Shares repurchased (Note 9)
(13,378,189)
(374)
(26)
-
-
-
(600)
(1,000)
-
(1,000)
Dividends declared - $1.59/share
-
-
-
-
-
-
(789)
(789)
-
(789)
Non-controlling interest transactions
-
-
-
-
-
-
-
-
(14)
(14)
Effect of share-based compensation including issuance of common shares
664,230
39
(1)
-
-
-
-
38
-
38
Transfer of net gain on sale of investment
-
-
-
-
(14)
(14)
14
-
-
-
Transfer of net loss on cash flow hedges
-
-
-
-
8
8
-
8
-
8
Transfer of net actuarial loss on defined benefit plans
-
-
-
-
3
3
(3)
-
-
-
BALANCE - SEPTEMBER 30, 2023
494,532,146
13,837
82
(388)
(22)
(410)
11,636
25,145
51
25,196
BALANCE - DECEMBER 31, 2023
494,551,730
13,838
83
(286)
(10)
(296)
11,531
25,156
45
25,201
Net earnings
-
-
-
-
-
-
561
561
21
582
Other comprehensive income
-
-
-
28
36
64
-
64
-
64
Shares repurchased (Note 9)
(1,039,185)
(29)
(21)
-
-
-
(1)
(51)
-
(51)
Dividends declared - $1.62/share
-
-
-
-
-
-
(800)
(800)
-
(800)
Non-controlling interest transactions
-
-
-
-
-
-
-
-
(26)
(26)
Effect of share-based compensation including issuance of common shares
369,904
18
5
-
-
-
-
23
-
23
Transfer of net loss on cash flow hedges
-
-
-
-
13
13
-
13
-
13
BALANCE - SEPTEMBER 30, 2024
493,882,449
13,827
67
(258)
39
(219)
11,291
24,966
40
25,006
(See Notes to the Condensed Consolidated Financial Statements)
Condensed Consolidated Balance Sheets
September 30
December 31
As at (millions of US dollars)
Note
2024
2023
2023
ASSETS
Current assets
Cash and cash equivalents
520
554
941
Receivables
6, 7, 11
7,786
7,713
5,398
Inventories
4,890
5,169
6,336
Prepaid expenses and other current assets
678
656
1,495
13,874
14,092
14,170
Non-current assets
Property, plant and equipment
3
22,329
22,150
22,461
Goodwill
12,122
12,078
12,114
Intangible assets
3
1,877
2,219
2,217
Investments
739
731
736
Other assets
970
959
1,051
TOTAL ASSETS
51,911
52,229
52,749
LIABILITIES
Current liabilities
Short-term debt
7
2,967
4,354
1,815
Current portion of long-term debt
8
1,013
-
512
Current portion of lease liabilities
364
305
327
Payables and accrued charges
6
6,613
6,653
9,467
10,957
11,312
12,121
Non-current liabilities
Long-term debt
8
9,383
9,427
8,913
Lease liabilities
1,029
901
999
Deferred income tax liabilities
3,555
3,631
3,574
Pension and other post-retirement benefit liabilities
245
241
252
Asset retirement obligations and accrued environmental costs
1,564
1,353
1,489
Other non-current liabilities
172
168
200
TOTAL LIABILITIES
26,905
27,033
27,548
SHAREHOLDERS' EQUITY
Share capital
9
13,827
13,837
13,838
Contributed surplus
67
82
83
Accumulated other comprehensive loss
(219)
(410)
(296)
Retained earnings
11,291
11,636
11,531
Equity holders of Nutrien
24,966
25,145
25,156
Non-controlling interest
40
51
45
TOTAL SHAREHOLDERS' EQUITY
25,006
25,196
25,201
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
51,911
52,229
52,749
(See Notes to the Condensed Consolidated Financial Statements)
Notes to the Condensed Consolidated Financial Statements
As at and for the Three and Nine Months Ended September 30, 2024
Note 1 Basis of presentation
Nutrien Ltd. (collectively with its subsidiaries, "Nutrien", "we", "us", "our" or "the Company") is a leading global provider of crop inputs and services. Nutrien plays a critical role in helping growers around the globe increase food production.
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 2023 annual audited consolidated financial statements, as well as any amended standards adopted in 2024 that we previously disclosed. These interim financial statements include the accounts of Nutrien and its subsidiaries; however, they do not include all disclosures normally provided in annual audited consolidated financial statements and should be read in conjunction with our 2023 annual audited consolidated financial statements. Certain immaterial 2023 figures have been reclassified in the condensed consolidated statements of earnings, condensed consolidated statements of cash flows and Note 4 Other expenses (income).
In management's opinion, the interim financial statements include all adjustments necessary to fairly present such information in all material respects. Interim results are not necessarily indicative of the results expected for any other interim period or the fiscal year. These interim financial statements were authorized for issue by the Audit Committee of the Board of Directors for issue on November 6, 2024.
Note 2 Segment information
We have 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. Potash freight, transportation and distribution costs only apply to our North American potash sales volumes. EBITDA presented in the succeeding tables is calculated as net earnings (loss) before finance costs, income taxes, and depreciation and amortization.
(millions of US dollars)
Retail
Potash
Nitrogen
Phosphate
Corporate
and Others
Eliminations
Consolidated
Assets - as at September 30, 2024
22,585
13,686
11,303
2,412
2,443
(518)
51,911
Assets - as at December 31, 2023
23,056
13,571
11,466
2,438
2,818
(600)
52,749
Three Months Ended September 30, 2024
(millions of US dollars)
Retail
Potash
Nitrogen
Phosphate
Corporate
and Others
Eliminations
Consolidated
Sales
- third party
3,271
915
753
409
-
-
5,348
- intersegment
-
113
163
58
-
(334)
-
Sales
- total
3,271
1,028
916
467
-
(334)
5,348
Freight, transportation and distribution
-
144
123
55
-
(59)
263
Net sales
3,271
884
793
412
-
(275)
5,085
Cost of goods sold
2,412
422
581
383
-
(213)
3,585
Gross margin
859
462
212
29
-
(62)
1,500
Selling expenses (recovery)
815
3
8
1
(2)
(5)
820
General and administrative expenses
51
5
6
4
90
-
156
Provincial mining taxes
-
74
-
-
-
-
74
Share-based compensation expense
-
-
-
-
1
-
1
Impairment of assets
-
-
-
-
-
-
-
Foreign exchange loss, net of related derivatives
-
-
-
-
31
-
31
Other expenses (income)
32
2
(25)
10
194
9
222
Earnings (loss) before finance costs and income taxes
(39)
378
223
14
(314)
(66)
196
Depreciation and amortization
190
177
132
75
24
-
598
EBITDA
151
555
355
89
(290)
(66)
794
Share-based compensation expense
-
-
-
-
1
-
1
ARO/ERL related expense for non-operating sites
-
-
-
-
184
-
184
Foreign exchange loss, net of related derivatives
-
-
-
-
31
-
31
Adjusted EBITDA
151
555
355
89
(74)
(66)
1,010
Three Months Ended September 30, 2023
(millions of US dollars)
Retail
Potash
Nitrogen
Phosphate
Corporate
and Others
Eliminations
Consolidated
Sales
- third party
3,489
1,002
690
450
-
-
5,631
- intersegment
1
108
138
66
-
(313)
-
Sales
- total
3,490
1,110
828
516
-
(313)
5,631
Freight, transportation and distribution
-
138
105
72
-
(52)
263
Net sales
3,490
972
723
444
-
(261)
5,368
Cost of goods sold
2,595
389
569
417
-
(229)
3,741
Gross margin
895
583
154
27
-
(32)
1,627
Selling expenses (recovery)
798
3
8
1
(3)
(8)
799
General and administrative expenses
57
2
1
3
88
-
151
Provincial mining taxes
-
96
-
-
-
-
96
Share-based compensation expense
-
-
-
-
42
-
42
Foreign exchange loss, net of related derivatives
-
-
-
-
87
-
87
Other expenses (income)
37
4
(19)
8
30
7
67
Earnings (loss) before finance costs and income taxes
3
478
164
15
(244)
(31)
385
Depreciation and amortization
189
133
130
75
25
-
552
EBITDA
192
611
294
90
(219)
(31)
937
Integration and restructuring related costs
5
-
-
-
9
-
14
Share-based compensation expense
-
-
-
-
42
-
42
ARO/ERL related expense for non-operating sites
-
-
-
-
4
-
4
Foreign exchange loss, net of related derivatives
-
-
-
-
87
-
87
Adjusted EBITDA
197
611
294
90
(77)
(31)
1,084
Nine Months Ended September 30, 2024
(millions of US dollars)
Retail
Potash
Nitrogen
Phosphate
Corporate
and Others
Eliminations
Consolidated
Sales
- third party
14,653
2,486
2,547
1,207
-
-
20,893
- intersegment
-
305
584
210
-
(1,099)
-
Sales
- total
14,653
2,791
3,131
1,417
-
(1,099)
20,893
Freight, transportation and distribution
-
338
399
174
-
(170)
741
Net sales
14,653
2,453
2,732
1,243
-
(929)
20,152
Cost of goods sold
11,018
1,139
1,835
1,116
-
(905)
14,203
Gross margin
3,635
1,314
897
127
-
(24)
5,949
Selling expenses (recovery)
2,610
9
23
5
(7)
(18)
2,622
General and administrative expenses
154
10
16
11
277
-
468
Provincial mining taxes
-
210
-
-
-
-
210
Share-based compensation expense
-
-
-
-
17
-
17
Impairment of assets
335
-
195
-
-
-
530
Foreign exchange loss, net of related derivatives
-
-
-
-
359
-
359
Other expenses (income)
95
3
(136)
26
274
22
284
Earnings (loss) before finance costs and income taxes
441
1,082
799
85
(920)
(28)
1,459
Depreciation and amortization
580
475
419
213
62
-
1,749
EBITDA
1,021
1,557
1,218
298
(858)
(28)
3,208
Share-based compensation expense
-
-
-
-
17
-
17
Impairment of assets
335
-
195
-
-
-
530
Loss related to financial instruments in Argentina
-
-
-
-
34
-
34
ARO/ERL related expense for non-operating sites
-
-
-
-
152
-
152
Foreign exchange loss, net of related derivatives
-
-
-
-
359
-
359
Adjusted EBITDA
1,356
1,557
1,413
298
(296)
(28)
4,300
Nine Months Ended September 30, 2023
(millions of US dollars)
Retail
Potash
Nitrogen
Phosphate
Corporate
and Others
Eliminations
Consolidated
Sales
- third party
16,038
3,001
2,909
1,444
-
-
23,392
- intersegment
2
302
708
204
-
(1,216)
-
Sales
- total
16,040
3,303
3,617
1,648
-
(1,216)
23,392
Freight, transportation and distribution
-
320
366
188
-
(160)
714
Net sales
16,040
2,983
3,251
1,460
-
(1,056)
22,678
Cost of goods sold
12,599
1,047
2,157
1,297
-
(1,128)
15,972
Gross margin
3,441
1,936
1,094
163
-
72
6,706
Selling expenses
2,534
9
23
5
(7)
(16)
2,548
General and administrative expenses
162
10
11
10
260
-
453
Provincial mining taxes
-
319
-
-
-
-
319
Share-based compensation recovery
-
-
-
-
(7)
-
(7)
Impairment of assets
465
-
-
233
-
-
698
Foreign exchange loss, net of related derivatives
-
-
-
-
105
-
105
Other expenses (income)
81
2
(53)
21
82
5
138
Earnings (loss) before finance costs and income taxes
199
1,596
1,113
(106)
(433)
83
2,452
Depreciation and amortization
558
345
426
213
62
-
1,604
EBITDA
757
1,941
1,539
107
(371)
83
4,056
Integration and restructuring related costs
8
-
-
-
21
-
29
Share-based compensation recovery
-
-
-
-
(7)
-
(7)
Impairment of assets
465
-
-
233
-
-
698
Loss related to financial instruments in Argentina
-
-
-
-
92
-
92
ARO/ERL related expense for non-operating sites
-
-
-
-
10
-
10
Foreign exchange loss, net of related derivatives
-
-
-
-
105
-
105
Adjusted EBITDA
1,230
1,941
1,539
340
(150)
83
4,983
Three Months Ended
Nine Months Ended
September 30
September 30
(millions of US dollars)
2024
2023
2024
2023
Retail sales by product line
Crop nutrients
1,093
1,250
5,683
6,571
Crop protection products
1,518
1,566
5,365
5,790
Seed
132
158
2,051
2,093
Services and other
242
235
690
691
Merchandise
222
231
667
750
Nutrien Financial
85
73
284
252
Nutrien Financial elimination 1
(21)
(23)
(87)
(107)
3,271
3,490
14,653
16,040
Potash sales by geography
Manufactured product
North America
601
637
1,474
1,631
Offshore 2
427
473
1,316
1,672
Other potash and purchased products
-
-
1
-
1,028
1,110
2,791
3,303
Nitrogen sales by product line
Manufactured product
Ammonia
261
193
856
998
Urea and ESN®
293
297
1,085
1,278
Solutions, nitrates and sulfates
299
270
961
1,022
Other nitrogen and purchased products
63
68
229
319
916
828
3,131
3,617
Phosphate sales by product line
Manufactured product
Fertilizer
316
295
928
886
Industrial and feed
148
151
470
535
Other phosphate and purchased products
3
70
19
227
467
516
1,417
1,648
1 Represents elimination of the interest and service fees charged by Nutrien Financial to Retail branches.
2 Relates to Canpotex Limited ("Canpotex") (Note 11) and includes provisional pricing adjustments for the three months ended September 30, 2024 of $(4) million (2023 - $(34) million) and the nine months ended September 30, 2024 of $7 million (2023 - $(354) million).
Note 3 Impairment of assets
We recorded the following non-cash impairment of assets in the condensed consolidated statements of earnings: