Listed: TSX, NYSE
Key Highlights
- Second-quarter earnings of $0.14
per share1, including:
- Share of Canpotex's2 Prince Rupert project exit costs of
$0.02 per share
- Unfavorable discount rate adjustment to asset retirement
obligations of $0.01 per share
- Impairment of investment in Sinofert Holdings Limited
(Sinofert) of $0.01 per share
- Intend to reduce quarterly dividend by 60 percent to
$0.10 per share
- Full-year 2016 earnings guidance lowered to $0.40-$0.55 per share, including:
- Notable charges through the first half of 2016 of $0.11 per share
- Third-quarter earnings guidance set at $0.05-$0.10 per share
CEO Commentary
"Fertilizer markets have been under pressure through the first six
months of 2016, however we believe the uncertainty that weighed on
potash market sentiment is now lifting and a recovery is
beginning," said PotashCorp President and Chief Executive Officer
Jochen Tilk. "With key Asian
contract prices settled by a number of producers – and buyer
inventories at reduced levels – we are seeing improved engagement
in all key markets.
"This recovery process requires patience and we believe
adherence to our strategy will continue to position us for
long-term success. Consistent with our strategy, we have taken
meaningful steps over the past 12 months to align our operating
capability with expected market conditions and to reduce costs,
including the suspension of potash operations in New Brunswick and production curtailments in
Saskatchewan," said Tilk.
"This measured approach to markets and operations is also
reflected in our approach to capital allocation. Protecting our
balance sheet while maintaining a competitive dividend remains a
top priority as it not only enables us to weather challenges like
those experienced this year, but it also positions us to seize
opportunities as we go forward. In that context – and with a need
to balance the interests of our shareholders and debtholders – we
intend to realign our quarterly dividend to $0.10 per share beginning with the declaration of
our next dividend in September.
"With customer sentiment improving and announced industry
shutdowns, we anticipate a more supportive potash environment
through the balance of the year. Importantly, we see the potential
for record demand in 2017 with annual shipments in the range of
61-64 million tonnes, as strong affordability incents farmers to
replenish soil nutrients. We are positioned to benefit from an
improved environment next year and we support Canpotex as they take
a cautious approach to the Chinese and Indian markets, committing
volumes only through the remainder of 2016."
SASKATOON, July 28, 2016 /CNW/ - Potash Corporation of
Saskatchewan Inc. (PotashCorp) reported second-quarter earnings of
$0.14 per share ($121 million), resulting in first-half earnings
of $0.23 per share ($196 million). Results for both periods trailed
those in 2015 and included notable charges of $0.04 per share ($38
million) and $0.11 per share
($94 million), respectively.
Gross margin for the quarter ($243
million) and first six months ($477
million) was below 2015 levels ($711
million and $1.4 billion,
respectively), primarily due to weaker prices for all three
nutrients and lower potash sales volumes to offshore markets. Cash
from operating activities of $424
million for the second quarter and $612 million for the first half of 2016 were both
well below prior year totals.
Investments in Arab Potash Company (APC) in Jordan, Israel Chemicals Ltd. (ICL) in
Israel, Sociedad Quimica y Minera
de Chile S.A. (SQM) in Chile and
Sinofert in China contributed
$44 million to our quarterly
earnings, bringing first-half totals to $66
million. These contributions were partially offset by a
non-cash impairment charge of $10
million related to our investment in Sinofert. Totals for
both the second quarter and first half trailed the respective
amounts generated last year. The market value of our investments in
these four publicly traded companies was approximately $3.8 billion, or $4
per PotashCorp share, at market close on July 27, 2016.
Market Conditions
Global potash markets were subdued in the second quarter.
Despite healthy demand in North
America and Latin America,
delayed contracts in China and
India, combined with cautious
buying patterns in Other Asian markets, weighed on shipments. Spot
prices declined from those in the first quarter, though they began
to show signs of firming as market fundamentals improved at the end
of the quarter.
Nitrogen and phosphate markets also experienced near-term
headwinds. In nitrogen, lower energy costs and additional capacity
pushed benchmark prices for most products to multi-year lows,
despite reduced Chinese urea exports and relatively strong global
demand. In the US market, strong offshore imports and increased
domestic supply put additional pressure on prices following the
spring application season, especially for urea and UAN. Global
phosphate prices also trended lower during the second quarter due
to declining input costs, increased competitive supply and weaker
Indian demand.
Potash
Potash gross margin of $123
million for the second quarter and $211 million for the first six months of 2016
reflected significantly lower prices and offshore sales volumes, as
results in both periods fell short of 2015's respective totals of
$417 million and $845 million.
Sales volumes for both the quarter (2.1 million tonnes) and
first half (3.9 million tonnes) were lower than those in 2015, down
16 percent and 20 percent, respectively. While North American
volumes were up relative to last year's totals, a lack of
engagement in key contract markets kept offshore volumes well below
2015 levels. China accounted for 7
percent of Canpotex's deliveries for the quarter while volumes to
India were negligible. The
majority of shipments were to spot markets in Latin America (47 percent) and Other Asian
markets outside of China and
India (37 percent).
Our average realized potash price of $154 per tonne for the second quarter was down
from $273 per tonne in the same
period last year. This decline was driven by a weaker pricing
environment and a $26 per-tonne
charge to our average offshore realized price related to
PotashCorp's share of Canpotex's Prince
Rupert project exit costs. The decision not to proceed with
development of an export terminal in Prince Rupert, British Columbia – and avoid
potential capital expenditures – was, in part, supported by the
recent availability of up to 2.5 million tonnes of storage and
loading capacity at the Port of Saint
John in New Brunswick.
Optimizing production to our mines in Saskatchewan, combined with lower royalties
and the favorable impact of a weakened Canadian dollar, reduced our
per-tonne manufactured cost of goods sold to $91 per tonne for the second quarter compared to
$105 per tonne in the same period of
2015.
Nitrogen
Weaker prices for all nitrogen products resulted in gross margin
of $130 million for the quarter and
$237 million for the first six
months, a 41 percent decline from last year's comparable periods.
Our US operations accounted for 77 percent of our nitrogen gross
margin for the quarter, with Trinidad providing the remainder.
Second-quarter sales volumes of 1.5 million tonnes marked an 8
percent decrease from the same period last year due to weaker North
American industrial demand. Total first-half sales volumes were 3.2
million tonnes – 8 percent higher than the same period last year,
primarily due to additional production at our recently expanded
Lima facility.
Weaker benchmark pricing lowered our average realized price to
$244 per tonne during the quarter,
compared to $334 per tonne in the
same period last year.
Cost of goods sold for the quarter was $160 per tonne, down from $201 per tonne in 2015's second quarter, driven
primarily by lower natural gas costs in the US and Trinidad.
Phosphate
Weaker phosphate prices, and notable charges of $29 million related to inventory writedowns and
an unfavorable discount rate adjustment to our asset retirement
obligations, resulted in negative gross margin of $10 million for the second quarter. These factors
led to first-half gross margin of $29
million, 78 percent below first-half 2015.
Sales volumes of 0.5 million tonnes for the quarter and 1.2
million tonnes for the first six months were down 25 percent and 8
percent from 2015's respective periods due primarily to weaker
North American demand.
Our average realized phosphate price for the quarter was
$485 per tonne, down from
$553 per tonne in the same period
last year as weaker demand weighed on prices for nearly all our
products.
Cost of goods sold of $506 per
tonne for the second quarter was higher than the same period in
2015 as lower input costs were more than offset by a $19 million inventory adjustment and a
$10 million unfavorable discount rate
adjustment to asset retirement
obligations.
Financial
Provincial mining and other taxes for the quarter totaled
$26 million, down 71 percent from
last year's corresponding period due primarily to lower potash
prices.
Due to reduced earnings, income tax expense declined to
$24 million in the second quarter,
down from $152 million during 2015's
comparable period.
Potash Market Outlook
Following a prolonged period of market uncertainty and weakening
fundamentals, we believe potash markets have reached their low
point. Recently settled contracts in China and India and a reduction in inventory throughout
the supply chain over the last six months are expected to support a
more constructive environment. Much like recoveries seen after
previous periods of delayed contracts, we anticipate stronger buyer
engagement to support demand through the second half of 2016 with
full-year estimates of 58-61 million tonnes.
In North America, we anticipate
improved affordability will help support deliveries for the rest of
2016. We expect shipments for the full year in the range of 9.2-9.7
million tonnes, up from the prior quarter's estimate and above
2015's total.
In Latin America, favorable
crop economics and agronomic need are expected to push 2016
shipments to 10.8-11.3 million tonnes – slightly above 2015 totals
and in line with our previous guidance range.
In China, we expect recently
settled contracts and strong underlying consumption to support 2016
shipments in the range of 13.5-14.5 million tonnes, consistent with
our previous estimates, but below 2015's record levels. While
contract negotiations are ongoing, Canpotex expects to deliver
tonnage to its Chinese customers in the second half of 2016.
In India, we anticipate that an
improved monsoon and lower farm retail prices will support improved
potash consumption for the rest of the year, but due to weaker
first-half deliveries, we have lowered our 2016 shipment estimate
to a range of 3.7-4.2 million tonnes. Canpotex has reached
agreements with its customers in India for shipments over the next three months
with deliveries expected to begin in the weeks ahead.
In Other Asian markets, adverse weather conditions and cautious
buying patterns during the first half are expected to result in
demand of 8.3-8.7 million tonnes for the full year, below our
previous expectations and 2015's total as well.
Financial Outlook
While markets have stabilized in recent weeks and we continue to
forecast our 2016 potash sales volumes in the range of 8.3-8.8
million tonnes, lower prices earlier in the year are expected to
weigh on our results for the remainder of 2016. We now expect
potash gross margin to be in the range of $400-$600 million.
Similarly, we anticipate a weaker price environment to
negatively impact our nitrogen and phosphate segments through the
rest of 2016. We have lowered our combined nitrogen and phosphate
gross margin guidance for the year to a range of $400-$550 million.
Lower earnings have reduced our expected provincial mining and
other taxes for 2016, now forecast in the range of 23-26 percent of
potash gross margin (excluding $32
million of New Brunswick
severance costs). Additionally, our effective income tax rate is
expected to fall to a range of 16-18 percent given reduced earnings
and a greater proportion of income from lower-tax
jurisdictions.
Anticipated selling and administrative expenses for the year
have been lowered to a range of $220-$230
million. Due to the recent strength of the Canadian dollar,
we have revised our full-year foreign exchange rate assumption to
CDN$1.32 per US dollar.
As a result of the noted changes, we have lowered our full-year
2016 earnings guidance to $0.40-$0.55
per share, including notable charges through the first half of
$0.11 per share. For the third
quarter, we forecast a range of $0.05-$0.10 per share. We also intend to reduce
our quarterly dividend from $0.25 per
share to $0.10 per share commencing
with the declaration of our next dividend in September.
All annual guidance numbers – including those noted above – are
outlined in the table below.
2016
Guidance
|
Earnings per
share
|
Annual: $0.40-$0.55 Q3:
$0.05-$0.10
|
Potash sales
volumes
|
8.3-8.8 million
tonnes
|
Potash gross
margin
|
$400-$600
million
|
Nitrogen and phosphate
gross margin
|
$400-$550
million
|
Capital
expenditures*
|
~$800
million
|
Effective tax
rate
|
16-18
percent
|
Provincial mining and other
taxes**
|
23-26
percent
|
Selling and administrative
expenses
|
$220-$230
million
|
Finance
costs
|
$210-$220
million
|
Income from equity
investments***
|
$120-$140
million
|
Annual foreign exchange
rate assumption
|
CDN$1.32 per
US$
|
Annual EPS sensitivity to
foreign exchange
|
US$ strengthens vs. CDN$ by
$0.02 = +$0.01 EPS
|
* Does not include
capitalized interest
** As a percentage of potash gross
margin, excluding New Brunswick severance costs
*** Includes income from dividends and
share of equity earnings
|
|
Notes
1. All references to per-share amounts pertain to diluted net
income per share.
2. Canpotex Limited (Canpotex), the offshore marketing company
for PotashCorp and two other Saskatchewan potash producers.
3. See reconciliation and description of non-IFRS measures in
the attached section titled "Selected Non-IFRS Financial Measures
and Reconciliations and Supplemental Information."
PotashCorp is the world's largest crop nutrient company and
plays an integral role in global food production. The company
produces the three essential nutrients required to help farmers
grow healthier, more abundant crops. With global population rising
and diets improving in developing countries, these nutrients offer
a responsible and practical solution to meeting the long-term
demand for food. PotashCorp is the largest producer, by capacity,
of potash and one of the largest producers of nitrogen and
phosphate. While agriculture is its primary market, the company
also produces products for animal nutrition and industrial uses.
Common shares of Potash Corporation of Saskatchewan Inc. are listed
on the Toronto Stock Exchange and the New York Stock
Exchange.
This release contains "forward-looking statements" (within
the meaning of the US Private Securities Litigation Reform Act of
1995) or "forward-looking information"(within the meaning of
applicable Canadian securities legislation) that relate to future
events or our future performance. These statements can be
identified by expressions of belief, expectation or intention, as
well as those statements that are not historical fact. These
statements often contain words such as "should," "could," "expect,"
"forecast," "may,""anticipate," "believe," "intend," "estimates,"
"plans" and similar expressions. These statements are based on
certain factors and assumptions as set forth in this document,
including with respect to: foreign exchange rates, expected growth,
results of operations, performance, business prospects and
opportunities, and effective tax rates. While we consider these
factors and assumptions to be reasonable based on information
currently available, they may prove to be incorrect.
Forward-looking statements are subject to risks and uncertainties
that are difficult to predict. The results or events set forth in
forward-looking statements may differ materially from actual
results or events. Several factors could cause actual results or
events to differ materially from those expressed in forward-looking
statements including, but not limited to, the following: variations
from our assumptions with respect to foreign exchange rates,
expected growth, results of operations, performance, business
prospects and opportunities, and effective tax rates; fluctuations
in supply and demand in the fertilizer, sulfur and petrochemical
markets; changes in competitive pressures, including pricing
pressures; risks and uncertainties related to any operating and
workforce changes made in response to our industry and the markets
we serve, including mine and inventory shutdowns; adverse or
uncertain economic conditions and changes in credit and financial
markets; economic and political uncertainty around the world;
changes in capital markets; the results of sales contract
negotiations; unexpected or adverse weather conditions; changes in
currency and exchange rates; risks related to reputational loss;
the occurrence of a major safety incident; inadequate insurance
coverage for a significant liability; inability to obtain relevant
permits for our operations; catastrophic events or malicious acts,
including terrorism; certain complications that may arise in our
mining process, including water inflows; risks and uncertainties
related to our international operations and assets; our ownership
of non-controlling equity interests in other companies; our
prospects to reinvest capital in strategic opportunities and
acquisitions; risks associated with natural gas and other hedging
activities; security risks related to our information technology
systems; imprecision in reserve estimates; costs and availability
of transportation and distribution for our raw materials and
products, including railcars and ocean freight; changes in, and the
effects of, government policies and regulations; earnings and the
decisions of taxing authorities which could affect our effective
tax rates; increases in the price or reduced availability of the
raw materials that we use; our ability to attract, develop, engage
and retain skilled employees; strikes or other forms of work
stoppage or slowdowns; rates of return on, and the risks associated
with, our investments and capital expenditures; timing and impact
of capital expenditures; the impact of further innovation; adverse
developments in new and pending legal proceedings or government
investigations; and violations of our governance and compliance
policies. These risks and uncertainties are discussed in more
detail under the headings "Risk Factors" and "Management's
Discussion and Analysis of Results and Operations and Financial
Condition" in our Annual Report on Form 10-K for the fiscal year
ended December 31, 2015 and in other
documents and reports subsequently filed by us with the US
Securities and Exchange Commission and the Canadian provincial
securities commissions. Forward-looking statements are given only
as of the date hereof and we disclaim any obligation to update or
revise any forward-looking statements in this release, whether as a
result of new information, future events or otherwise, except as
required by law.
PotashCorp will host a Conference Call on Thursday, July 28, 2016 at 1:00 pm Eastern Time.
Telephone
Conference:
|
Dial-in
numbers:
|
|
|
- From Canada and the
US
|
1-800-597-1419
|
|
- From
Elsewhere
|
1-604-638-5350
|
|
|
|
Live
Webcast:
|
Visit
www.potashcorp.com
|
|
|
Webcast participants can
submit questions to management online from their audio player
pop-up window.
|
|
|
Potash Corporation of
Saskatchewan Inc.
|
Condensed Consolidated
Statements of Income
|
(in millions of US
dollars except as otherwise noted)
|
(unaudited)
|
|
|
Three Months
Ended
|
Six Months
Ended
|
|
June 30
|
June 30
|
|
2016
|
2015
|
2016
|
2015
|
|
|
|
|
|
|
|
|
|
Sales
(Note 2)
|
$
|
1,053
|
$
|
1,731
|
$
|
2,262
|
$
|
3,396
|
Freight, transportation and
distribution
|
|
(118)
|
|
(124)
|
|
(251)
|
|
(252)
|
Cost of goods
sold
|
|
(692)
|
|
(896)
|
|
(1,534)
|
|
(1,766)
|
Gross Margin
|
|
243
|
|
711
|
|
477
|
|
1,378
|
Selling and administrative
expenses
|
|
(55)
|
|
(60)
|
|
(108)
|
|
(120)
|
Provincial mining and other
taxes
|
|
(26)
|
|
(90)
|
|
(57)
|
|
(185)
|
Share of earnings of
equity-accounted investees
|
|
30
|
|
35
|
|
49
|
|
71
|
Dividend
income
|
|
16
|
|
31
|
|
16
|
|
31
|
Impairment of
available-for-sale investment (Note 3)
|
|
(10)
|
|
-
|
|
(10)
|
|
-
|
Other income (expenses)
(Note 4)
|
|
1
|
|
(8)
|
|
(9)
|
|
3
|
Operating
Income
|
|
199
|
|
619
|
|
358
|
|
1,178
|
Finance
costs
|
|
(54)
|
|
(50)
|
|
(106)
|
|
(99)
|
Income Before Income
Taxes
|
|
145
|
|
569
|
|
252
|
|
1,079
|
Income taxes (Note
5)
|
|
(24)
|
|
(152)
|
|
(56)
|
|
(292)
|
Net
Income
|
$
|
121
|
$
|
417
|
$
|
196
|
$
|
787
|
|
|
|
|
|
|
|
|
|
Net Income per
Share
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.14
|
$
|
0.50
|
$
|
0.23
|
$
|
0.94
|
|
Diluted
|
$
|
0.14
|
$
|
0.50
|
$
|
0.23
|
$
|
0.94
|
|
|
|
|
|
|
|
|
|
Dividends Declared per
Share
|
$
|
0.25
|
$
|
0.38
|
$
|
0.50
|
$
|
0.76
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares
Outstanding
|
|
|
|
|
|
|
|
|
|
Basic
|
839,285,000
|
834,441,000
|
838,202,000
|
832,924,000
|
|
Diluted
|
839,786,000
|
837,746,000
|
839,028,000
|
837,399,000
|
(See Notes to the Condensed
Consolidated Financial Statements)
|
Potash Corporation of
Saskatchewan Inc.
|
Condensed Consolidated
Statements of Comprehensive (Loss) Income
|
(in millions of US
dollars)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
Six Months
Ended
|
|
June 30
|
June 30
|
(Net of related income
taxes)
|
2016
|
2015
|
2016
|
2015
|
|
|
|
|
|
|
|
|
|
Net Income
|
$
|
121
|
$
|
417
|
$
|
196
|
$
|
787
|
Other comprehensive (loss)
income
|
|
|
|
|
|
|
|
|
|
Items that will not be
reclassified to net income:
|
|
|
|
|
|
|
|
|
|
|
Net actuarial loss on
defined benefit plans (1)
|
|
(103)
|
|
-
|
|
(103)
|
|
-
|
|
Items that have been or may
be subsequently reclassified to net
income:
|
|
|
|
|
|
|
|
|
|
|
Available-for-sale
investments (2)
|
|
|
|
|
|
|
|
|
|
|
|
Net fair value (loss) gain
during the period
|
|
(104)
|
|
21
|
|
(103)
|
|
59
|
|
|
Cash flow
hedges
|
|
|
|
|
|
|
|
|
|
|
|
Net fair value gain (loss)
during the period (3)
|
|
9
|
|
1
|
|
3
|
|
(21)
|
|
|
|
Reclassification to income
of net loss (4)
|
|
13
|
|
15
|
|
28
|
|
26
|
|
|
Other
|
|
1
|
|
-
|
|
2
|
|
(4)
|
Other Comprehensive
(Loss) Income
|
|
(184)
|
|
37
|
|
(173)
|
|
60
|
Comprehensive (Loss)
Income
|
$
|
(63)
|
$
|
454
|
$
|
23
|
$
|
847
|
(1)
Net of income taxes of $60 (2015 - $NIL)
for the three and six months ended June 30,
2016.
|
(2)
Available-for-sale investments are
comprised of shares in Israel Chemicals Ltd., Sinofert Holdings
Limited and other.
|
(3)
Cash flow hedges are comprised of natural
gas derivative instruments and treasury lock derivatives and were
net of income taxes of $(5) (2015 - $NIL) for the three months
ended June 30, 2016 and $(2) (2015 - $12) for the six months ended
June 30, 2016.
|
(4)
Net of income taxes of $(8) (2015 - $(8))
for the three months ended June 30, 2016 and $(16) (2015 - $(14))
for the six months ended June 30, 2016.
|
(See Notes to the Condensed
Consolidated Financial Statements)
|
Potash Corporation of
Saskatchewan Inc.
|
Condensed Consolidated
Statements of Cash Flow
|
(in millions of US
dollars)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
Six Months
Ended
|
|
|
June 30
|
June 30
|
|
|
2016
|
2015
|
2016
|
2015
|
|
|
|
|
|
|
|
|
|
|
Operating
Activities
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
|
121
|
$
|
417
|
$
|
196
|
$
|
787
|
Adjustments to reconcile
net income to cash provided by
|
|
|
|
|
|
|
|
|
|
|
operating activities (Note
6)
|
|
|
259
|
|
248
|
|
465
|
|
429
|
Changes in non-cash
operating working capital (Note 6)
|
|
|
44
|
|
171
|
|
(49)
|
|
141
|
Cash provided by
operating activities
|
|
|
424
|
|
836
|
|
612
|
|
1,357
|
|
|
|
|
|
|
|
|
|
|
Investing
Activities
|
|
|
|
|
|
|
|
|
|
Additions to property,
plant and equipment
|
|
|
(211)
|
|
(294)
|
|
(457)
|
|
(522)
|
Other assets and intangible
assets
|
|
|
(9)
|
|
(10)
|
|
(9)
|
|
(15)
|
Cash used in investing
activities
|
|
|
(220)
|
|
(304)
|
|
(466)
|
|
(537)
|
|
|
|
|
|
|
|
|
|
|
Financing
Activities
|
|
|
|
|
|
|
|
|
|
Proceeds from long-term
debt obligations
|
|
|
-
|
|
-
|
|
-
|
|
494
|
Finance costs on long-term
debt obligations
|
|
|
(2)
|
|
-
|
|
(4)
|
|
-
|
Proceeds from (repayment
of) short-term debt obligations
|
|
|
68
|
|
-
|
|
404
|
|
(536)
|
Dividends
|
|
|
(206)
|
|
(312)
|
|
(519)
|
|
(586)
|
Issuance of common
shares
|
|
|
5
|
|
12
|
|
25
|
|
42
|
Cash used in financing
activities
|
|
|
(135)
|
|
(300)
|
|
(94)
|
|
(586)
|
Increase in Cash and
Cash Equivalents
|
|
|
69
|
|
232
|
|
52
|
|
234
|
Cash and Cash
Equivalents, Beginning of Period
|
|
|
74
|
|
217
|
|
91
|
|
215
|
Cash and Cash
Equivalents, End of Period
|
|
$
|
143
|
$
|
449
|
$
|
143
|
$
|
449
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
comprised of:
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
31
|
$
|
62
|
$
|
31
|
$
|
62
|
|
Short-term
investments
|
|
|
112
|
|
387
|
|
112
|
|
387
|
|
|
$
|
143
|
$
|
449
|
$
|
143
|
$
|
449
|
(See Notes to the Condensed
Consolidated Financial Statements)
|
Potash Corporation of
Saskatchewan Inc.
|
Condensed Consolidated
Statement of Changes in Equity
|
(in millions of US
dollars)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated Other
Comprehensive (Loss) Income
|
|
|
|
|
|
|
|
|
|
Net
unrealized
|
Net
(loss)
|
Net
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
gain (loss)
on
|
gain
on
|
actuarial
|
|
|
Accumulated
|
|
|
|
|
|
|
|
|
|
available-
|
derivatives
|
loss
on
|
|
|
Other
|
|
|
|
|
|
Share
|
Contributed
|
for-sale
|
designated
as
|
defined
|
|
|
Comprehensive
|
Retained
|
Total
|
|
Capital
|
Surplus
|
investments
|
cash flow
hedges
|
benefit plans
(1)
|
Other
|
(Loss) Income
|
Earnings
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance - December 31,
2015
|
$
|
1,747
|
$
|
230
|
$
|
77
|
$
|
(117)
|
$
|
-
|
$
|
(10)
|
$
|
(50)
|
$
|
6,455
|
$
|
8,382
|
Net
income
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
196
|
|
196
|
Other comprehensive (loss)
income
|
|
-
|
|
-
|
|
(103)
|
|
31
|
|
(103)
|
|
2
|
|
(173)
|
|
-
|
|
(173)
|
Dividends
declared
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(421)
|
|
(421)
|
Effect of share-based
compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
including issuance of
common shares
|
|
35
|
|
(5)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
30
|
Shares issued for
dividend
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
reinvestment
plan
|
|
10
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
10
|
Transfer of net actuarial
loss on
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
defined benefit
plans
|
|
-
|
|
-
|
|
-
|
|
-
|
|
103
|
|
-
|
|
103
|
|
(103)
|
|
-
|
Balance - June 30,
2016
|
$
|
1,792
|
$
|
225
|
$
|
(26)
|
$
|
(86)
|
$
|
-
|
$
|
(8)
|
$
|
(120)
|
$
|
6,127
|
$
|
8,024
|
(1)
Any amounts incurred during a period are
closed out to retained earnings at each period-end. Therefore, no
balance exists at the beginning or end of
period.
|
(See Notes to the Condensed
Consolidated Financial Statements)
|
Potash Corporation of
Saskatchewan Inc.
|
Condensed Consolidated
Statements of Financial Position
|
(in millions of US
dollars except share amounts)
|
(unaudited)
|
|
|
|
|
|
|
|
|
June 30
|
December 31
|
As
at
|
|
2016
|
2015
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
143
|
$
|
91
|
|
|
Receivables
|
|
|
534
|
|
640
|
|
|
Inventories
|
|
|
805
|
|
749
|
|
|
Prepaid expenses and other
current assets
|
|
|
68
|
|
73
|
|
|
|
1,550
|
|
1,553
|
|
Non-current
assets
|
|
|
|
|
|
|
|
Property, plant and
equipment
|
|
|
13,245
|
|
13,212
|
|
|
Investments in
equity-accounted investees
|
|
|
1,199
|
|
1,243
|
|
|
Available-for-sale
investments (Note 3)
|
|
|
871
|
|
984
|
|
|
Other
assets
|
|
|
276
|
|
285
|
|
|
Intangible
assets
|
|
|
185
|
|
192
|
Total Assets
|
|
$
|
17,326
|
$
|
17,469
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
Short-term debt and current
portion of long-term debt
|
|
$
|
921
|
$
|
517
|
|
|
Payables and accrued
charges
|
|
|
819
|
|
1,146
|
|
|
Current portion of
derivative instrument liabilities
|
|
|
62
|
|
84
|
|
|
|
1,802
|
|
1,747
|
|
Non-current
liabilities
|
|
|
|
|
|
|
|
Long-term
debt
|
|
|
3,713
|
|
3,710
|
|
|
Derivative instrument
liabilities
|
|
|
77
|
|
109
|
|
|
Deferred income tax
liabilities
|
|
|
2,399
|
|
2,438
|
|
|
Pension and other
post-retirement benefit liabilities (Note
7)
|
|
|
613
|
|
431
|
|
|
Asset retirement
obligations and accrued environmental
costs
|
|
|
623
|
|
574
|
|
|
Other non-current
liabilities and deferred credits
|
|
|
75
|
|
78
|
Total
Liabilities
|
|
|
9,302
|
|
9,087
|
|
|
|
|
|
|
Shareholders'
Equity
|
|
|
|
|
|
|
Share
capital
|
|
|
1,792
|
|
1,747
|
|
|
Unlimited authorization of
common shares without par value; issued
and outstanding 839,432,689 and
836,540,151 at June 30, 2016 and
December 31, 2015,
respectively
|
|
|
|
|
|
|
Contributed
surplus
|
|
|
225
|
|
230
|
|
Accumulated other
comprehensive loss
|
|
|
(120)
|
|
(50)
|
|
Retained
earnings
|
|
|
6,127
|
|
6,455
|
Total Shareholders'
Equity
|
|
|
8,024
|
|
8,382
|
Total Liabilities and
Shareholders' Equity
|
|
$
|
17,326
|
$
|
17,469
|
(See Notes to the Condensed
Consolidated Financial Statements)
|
Potash Corporation of Saskatchewan Inc.
Notes to the Condensed Consolidated Financial Statements
For the Three and Six Months Ended June
30, 2016
(in millions of US dollars except as otherwise noted)
(unaudited)
1. Significant Accounting Policies
With its subsidiaries, Potash Corporation of Saskatchewan Inc.
("PCS") — together known as "PotashCorp" or "the company" except to
the extent the context otherwise requires — forms an integrated
fertilizer and related industrial and feed products company. The
company's accounting policies are in accordance with International
Financial Reporting Standards as issued by the International
Accounting Standards Board ("IFRS"). The accounting policies and
methods of computation used in preparing these unaudited interim
condensed consolidated financial statements are consistent with
those used in the preparation of the company's 2015 annual
consolidated financial statements.
These unaudited interim condensed consolidated financial
statements include the accounts of PCS and its subsidiaries;
however, they do not include all disclosures normally provided in
annual consolidated financial statements and should be read in
conjunction with the company's 2015 annual consolidated financial
statements. Further, while the financial figures included in this
preliminary interim results announcement have been computed in
accordance with IFRS applicable to interim periods, this
announcement does not contain sufficient information to constitute
an interim financial report as that term is defined in
International Accounting Standard ("IAS") 34, "Interim Financial
Reporting". The company expects to publish an interim financial
report that complies with IAS 34 in its Quarterly Report on Form
10-Q in August 2016.
In management's opinion, the unaudited interim condensed
consolidated financial statements include all adjustments necessary
to present fairly such information. Interim results are not
necessarily indicative of the results expected for the fiscal
year.
2. Segment Information
The company has three reportable operating segments: potash,
nitrogen and phosphate. The accounting policies of the segments are
the same as those described in Note 1. Inter-segment sales are made
under terms that approximate market value.
|
|
Three Months Ended June
30, 2016
|
|
|
Potash
|
Nitrogen
|
Phosphate
|
All Others
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
Sales - third
party
|
|
$
|
393
|
$
|
383
|
$
|
277
|
-
|
$
|
1,053
|
Freight, transportation and
distribution - third party
|
|
|
(64)
|
|
(27)
|
|
(27)
|
-
|
|
(118)
|
Net sales - third
party
|
|
|
329
|
|
356
|
|
250
|
-
|
|
|
Cost of goods sold - third
party
|
|
|
(206)
|
|
(236)
|
|
(250)
|
-
|
|
(692)
|
Margin (cost) on
inter-segment sales (1)
|
|
|
-
|
|
10
|
|
(10)
|
-
|
|
-
|
Gross
margin
|
|
|
123
|
|
130
|
|
(10)
|
-
|
|
243
|
Depreciation and
amortization
|
|
|
(52)
|
|
(52)
|
|
(55)
|
(9)
|
|
(168)
|
Share of Canpotex's
(2) Prince Rupert
|
|
|
|
|
|
|
|
|
|
|
|
project exit
costs
|
|
|
(33)
|
|
-
|
|
-
|
-
|
|
(33)
|
Cash outflows for additions
to property,
|
|
|
|
|
|
|
|
|
|
|
|
plant and
equipment
|
|
|
74
|
|
65
|
|
45
|
27
|
|
211
|
(1)
Inter-segment net sales were
$17.
|
|
|
|
|
|
|
|
|
|
|
(2)
Canpotex Limited
("Canpotex").
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June
30, 2015
|
|
|
Potash
|
Nitrogen
|
Phosphate
|
All Others
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales - third
party
|
|
$
|
748
|
$
|
559
|
$
|
424
|
$
|
-
|
$
|
1,731
|
Freight, transportation and
distribution - third party
|
|
|
(59)
|
|
(27)
|
|
(38)
|
|
-
|
|
(124)
|
Net sales - third
party
|
|
|
689
|
|
532
|
|
386
|
|
-
|
|
|
Cost of goods sold - third
party
|
|
|
(272)
|
|
(323)
|
|
(301)
|
|
-
|
|
(896)
|
Margin (cost) on
inter-segment sales (1)
|
|
|
-
|
|
13
|
|
(13)
|
|
-
|
|
-
|
Gross
margin
|
|
|
417
|
|
222
|
|
72
|
|
-
|
|
711
|
Depreciation and
amortization
|
|
|
(60)
|
|
(47)
|
|
(61)
|
|
(5)
|
|
(173)
|
Cash outflows for additions
to property,
|
|
|
|
|
|
|
|
|
|
|
|
|
plant and
equipment
|
|
|
103
|
|
123
|
|
54
|
|
14
|
|
294
|
(1)
Inter-segment net sales were
$19.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June
30, 2016
|
|
|
Potash
|
Nitrogen
|
Phosphate
|
All Others
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
Sales - third
party
|
|
$
|
774
|
$
|
811
|
$
|
677
|
-
|
$
|
2,262
|
Freight, transportation and
distribution - third party
|
|
|
(123)
|
|
(60)
|
|
(68)
|
-
|
|
(251)
|
Net sales - third
party
|
|
|
651
|
|
751
|
|
609
|
-
|
|
|
Cost of goods sold - third
party
|
|
|
(440)
|
|
(534)
|
|
(560)
|
-
|
|
(1,534)
|
Margin (cost) on
inter-segment sales (1)
|
|
|
-
|
|
20
|
|
(20)
|
-
|
|
-
|
Gross
margin
|
|
|
211
|
|
237
|
|
29
|
-
|
|
477
|
Depreciation and
amortization
|
|
|
(100)
|
|
(106)
|
|
(112)
|
(17)
|
|
(335)
|
Share of Canpotex's
(2) Prince Rupert
|
|
|
|
|
|
|
|
|
|
|
|
project exit
costs
|
|
|
(33)
|
|
-
|
|
-
|
-
|
|
(33)
|
Termination benefit
costs
|
|
|
(32)
|
|
-
|
|
-
|
-
|
|
(32)
|
Impairment of property,
plant and equipment
|
|
|
-
|
|
-
|
|
(27)
|
-
|
|
(27)
|
Cash outflows for additions
to property,
|
|
|
|
|
|
|
|
|
|
|
|
plant and
equipment
|
|
|
165
|
|
134
|
|
88
|
70
|
|
457
|
(1)
Inter-segment net sales were
$34.
|
|
|
|
|
|
|
|
|
|
|
(2)
Canpotex Limited
("Canpotex").
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June
30, 2015
|
|
|
Potash
|
Nitrogen
|
Phosphate
|
All Others
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales - third
party
|
|
$
|
1,486
|
$
|
1,041
|
$
|
869
|
$
|
-
|
$
|
3,396
|
Freight, transportation and
distribution - third party
|
|
|
(123)
|
|
(50)
|
|
(79)
|
|
-
|
|
(252)
|
Net sales - third
party
|
|
|
1,363
|
|
991
|
|
790
|
|
-
|
|
|
Cost of goods sold - third
party
|
|
|
(518)
|
|
(613)
|
|
(635)
|
|
-
|
|
(1,766)
|
Margin (cost) on
inter-segment sales (1)
|
|
|
-
|
|
25
|
|
(25)
|
|
-
|
|
-
|
Gross
margin
|
|
|
845
|
|
403
|
|
130
|
|
-
|
|
1,378
|
Depreciation and
amortization
|
|
|
(118)
|
|
(93)
|
|
(125)
|
|
(9)
|
|
(345)
|
Cash outflows for additions
to property,
|
|
|
|
|
|
|
|
|
|
|
|
|
plant and
equipment
|
|
|
214
|
|
183
|
|
90
|
|
35
|
|
522
|
(1)
Inter-segment net sales were
$37.
|
|
|
|
|
|
|
|
|
|
|
|
3. Available-for-Sale Investments
The company assesses at the end of each reporting period whether
there is objective evidence of impairment. A significant or
prolonged decline in the fair value of the investment below its
cost would be evidence that the asset is impaired. If objective
evidence of impairment exists, the impaired amount (i.e., the
unrealized loss) is recognized in net income; any subsequent
reversals would be recognized in other comprehensive income ("OCI")
and would not flow back into net income. Any subsequent decline in
fair value below the carrying amount at the impairment date would
represent a further impairment to be recognized in net income.
At June 30, 2016, the company
assessed whether there was objective evidence that its investment
in Israel Chemicals Ltd. ("ICL")
was impaired. The fair value of the investment, recorded in the
condensed consolidated statements of financial position, was
$678 compared to the cost of
$704. Factors considered in assessing
impairment included the length of time and extent to which fair
value had been below cost, and current financial and market
conditions specific to ICL. The company concluded that objective
evidence of impairment did not exist as at June 30, 2016 and, as a result, the unrealized
holding loss of $26 was included in
accumulated OCI. Impairment will be assessed again in future
reporting periods if the fair value is below cost. The fair value
was determined through the market value of ICL shares on the Tel
Aviv Stock Exchange.
During 2012, the company concluded its investment in Sinofert
Holdings Limited ("Sinofert") was impaired due to the significance
by which fair value was below cost. During 2014, the company
concluded its investment in Sinofert was further impaired due to
the fair value declining below the carrying amount of $238 at the previous impairment date. As a
result, impairment losses of $341 and
$38 were recognized in net income
during 2012 and 2014, respectively. At June 30, 2016, the company concluded its
investment in Sinofert was further impaired due to the fair value
declining below the carrying amount of $200 at the previous impairment date. As a
result, an impairment loss of $10 was
recognized in net income during the three and six months ended
June 30, 2016. The fair value was
determined through the market value of Sinofert shares on the Hong
Kong Stock Exchange.
Changes in fair value, and related accounting, for the company's
investment in Sinofert since December 31,
2014 were as follows:
|
|
|
|
|
|
Impact of Unrealized
Loss on:
|
|
|
Fair Value
|
Unrealized
Loss
|
OCI and
AOCI
|
Net
Income
and Retained
Earnings
|
Balance — December 31,
2014
|
|
$
|
252
|
$
|
(327)
|
$
|
52
|
$
|
(379)
|
Increase in fair
value
|
|
|
14
|
|
14
|
|
14
|
|
-
|
Balance — December 31,
2015
|
|
$
|
266
|
$
|
(313)
|
$
|
66
|
$
|
(379)
|
Decrease in fair
value
|
|
|
(51)
|
|
(51)
|
|
(51)
|
|
-
|
Balance — March 31,
2016
|
|
$
|
215
|
$
|
(364)
|
$
|
15
|
$
|
(379)
|
Decrease in fair value and
recognition of impairment
|
|
|
(25)
|
|
(25)
|
|
(15)
|
|
(10)
|
Balance — June 30,
2016
|
|
$
|
190
|
$
|
(389)
|
$
|
-
|
$
|
(389)
|
4. Other Income (Expenses)
|
|
|
|
Three Months
Ended
|
Six Months
Ended
|
|
|
|
|
June 30
|
June 30
|
|
|
|
|
2016
|
2015
|
2016
|
2015
|
Foreign exchange (loss)
gain
|
|
|
|
$
|
|
(2)
|
$
|
|
(3)
|
$
|
|
(19)
|
$
|
|
12
|
Other income
(expenses)
|
|
|
|
|
|
3
|
|
|
(5)
|
|
|
10
|
|
|
(9)
|
|
|
|
|
$
|
|
1
|
$
|
|
(8)
|
$
|
|
(9)
|
$
|
|
3
|
5. Income Taxes
A separate estimated average annual effective tax rate was
determined for each taxing jurisdiction and applied individually to
the interim period pre-tax income of each jurisdiction.
|
|
Three Months
Ended
|
Six Months
Ended
|
|
|
June 30
|
June 30
|
|
|
2016
|
2015
|
2016
|
2015
|
Income tax
expense
|
|
$
|
24
|
$
|
152
|
$
|
56
|
$
|
292
|
Actual effective tax rate
on ordinary earnings
|
|
|
17%
|
|
26%
|
|
21%
|
|
27%
|
Actual effective tax rate
including discrete items
|
|
|
16%
|
|
27%
|
|
22%
|
|
27%
|
Discrete tax adjustments
that impacted the tax rate
|
|
$
|
(4)
|
$
|
3
|
$
|
-
|
$
|
6
|
Significant items to note include the following:
- The actual effective tax rate on ordinary earnings for the
three and six months ended June 30,
2016 decreased compared to the same periods last year due to
significantly lower earnings in higher tax jurisdictions.
- In second-quarter 2016, a $10
discrete non-tax deductible impairment of the company's
available-for-sale investment in Sinofert was recorded. This
increased the actual effective tax rate including discrete items
for the three and six months ended June 30,
2016 by one percentage point.
6. Consolidated Statements of Cash Flow
|
|
Three Months
Ended
|
Six Months
Ended
|
|
|
June 30
|
June 30
|
|
|
2016
|
2015
|
2016
|
2015
|
Reconciliation of cash
provided by operating activities
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
|
121
|
$
|
417
|
$
|
196
|
$
|
787
|
Adjustments to reconcile
net income to cash provided by operating
activities
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
168
|
|
173
|
|
335
|
|
345
|
|
Impairment of property,
plant and equipment
|
|
|
-
|
|
-
|
|
27
|
|
-
|
|
Net distributed
(undistributed) earnings of
equity-accounted
|
|
|
|
|
|
|
|
|
|
|
|
investees
|
|
|
61
|
|
19
|
|
44
|
|
(16)
|
|
Impairment of
available-for-sale investment (Note 3)
|
|
|
10
|
|
-
|
|
10
|
|
-
|
|
Share-based
compensation
|
|
|
3
|
|
4
|
|
5
|
|
19
|
|
(Recovery of) provision for
deferred income tax
|
|
|
(7)
|
|
47
|
|
(1)
|
|
72
|
|
Pension and other
post-retirement benefits
|
|
|
13
|
|
11
|
|
28
|
|
16
|
|
Asset retirement
obligations and accrued environmental
costs
|
|
|
9
|
|
(11)
|
|
25
|
|
(24)
|
|
Other long-term liabilities
and miscellaneous
|
|
|
2
|
|
5
|
|
(8)
|
|
17
|
|
Subtotal of
adjustments
|
|
|
259
|
|
248
|
|
465
|
|
429
|
|
|
|
|
|
|
|
|
|
|
|
Changes in non-cash
operating working capital
|
|
|
|
|
|
|
|
|
|
|
Receivables
|
|
|
186
|
|
29
|
|
145
|
|
85
|
|
Inventories
|
|
|
(51)
|
|
2
|
|
(43)
|
|
(60)
|
|
Prepaid expenses and other
current assets
|
|
|
5
|
|
11
|
|
3
|
|
3
|
|
Payables and accrued
charges
|
|
|
(96)
|
|
129
|
|
(154)
|
|
113
|
|
Subtotal of changes in
non-cash operating working capital
|
|
|
44
|
|
171
|
|
(49)
|
|
141
|
Cash provided by
operating activities
|
|
$
|
424
|
$
|
836
|
$
|
612
|
$
|
1,357
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash flow
disclosure
|
|
|
|
|
|
|
|
|
|
|
Interest
paid
|
|
$
|
64
|
$
|
55
|
$
|
93
|
$
|
93
|
|
Income taxes
paid
|
|
$
|
35
|
$
|
23
|
$
|
46
|
$
|
65
|
7. Pension and Other Post-Retirement Benefits
A remeasurement of the defined benefit plan assets and
liabilities was performed at June 30,
2016. Due to a change in the discount rate and actual return
on plan assets, the company's defined benefit pension and other
post-retirement benefit obligations increased by $184, plan assets increased by $21 and deferred income taxes decreased by
$60. As a result, the company
recorded net actuarial losses on defined benefit plan obligations
of $103 in OCI, which was recognized
immediately in retained earnings at June 30,
2016.
The net impact on assets and liabilities within the condensed
consolidated statements of financial position at June 30, 2016 was as follows:
|
|
|
|
|
|
(Decrease)
Increase
|
Non-current
assets
|
|
|
|
|
|
|
|
|
Other
assets
|
|
|
|
|
|
$
|
(9)
|
Non-current
liabilities
|
|
|
|
|
|
|
|
|
Deferred income tax
liabilities
|
|
|
|
|
|
|
(60)
|
|
Pension and other
post-retirement benefit liabilities
|
|
|
|
|
|
|
154
|
The discount rate used to determine the benefit obligation for
the company's significant plans at June 30,
2016 was 3.65 percent (December 31,
2015 — 4.35 percent).
The benefit obligations and plan assets for the company's
pension and other post-retirement plans were as follows:
|
|
|
|
June 30
|
December 31
|
|
|
|
|
2016
|
2015
|
Present value of defined
benefit obligations
|
|
|
|
$
|
(1,848)
|
$
|
(1,659)
|
Fair value of plan
assets
|
|
|
|
|
1,220
|
|
1,197
|
Funded
status
|
|
|
|
|
(628)
|
|
(462)
|
Balance comprised
of:
|
|
|
|
|
|
|
|
|
Non-current
assets
|
|
|
|
|
|
|
|
|
|
Other
assets
|
|
|
|
$
|
12
|
$
|
21
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
|
Payables and accrued
charges
|
|
|
|
|
(27)
|
|
(52)
|
|
Non-current
liabilities
|
|
|
|
|
|
|
|
|
|
Pension and other
post-retirement benefit liabilities
|
|
|
|
|
(613)
|
|
(431)
|
8. Share-Based Compensation
During the second quarter of 2016, the company issued stock
options and performance share units ("PSUs") to eligible employees
under the 2016 Long-Term Incentive Plan ("LTIP"). Information on
stock options and PSUs is summarized below:
|
2016 LTIP
|
Expense for all
share-based compensation plans
|
|
|
Units
Outstanding
|
Grant Date
Fair
|
Three Months
Ended
|
Six Months
Ended
|
|
|
as at June
30,
|
Value per
Unit
|
June 30
|
June 30
|
|
Units Granted
|
2016
|
(Dollars)
|
2016
|
2015
|
2016
|
2015
|
Stock
options
|
3,099,913
|
3,099,913
|
$
|
2.04
|
$
|
5
|
$
|
4
|
$
|
6
|
$
|
16
|
Share-settled
PSUs
|
602,740
|
602,740
|
$
|
17.19
|
|
2
|
|
-
|
|
2
|
|
-
|
Cash-settled
PSUs
|
1,008,638
|
1,008,638
|
$
|
17.19
|
|
2
|
|
-
|
|
4
|
|
-
|
|
|
|
|
|
$
|
9
|
$
|
4
|
$
|
12
|
$
|
16
|
Stock Options
Under the LTIP, stock options generally vest and become
exercisable on the third anniversary of the grant date, subject to
continuous employment or retirement, and have a maximum term of 10
years. The weighted average fair value of stock options granted was
estimated as of the date of grant using the Black-Scholes-Merton
option-pricing model with the following weighted average
assumptions:
Exercise price per
option
|
|
|
|
|
|
$
|
16.20
|
Expected annual dividend
per share
|
|
|
|
|
|
$
|
1.00
|
Expected
volatility
|
|
|
|
|
|
|
30%
|
Risk-free interest
rate
|
|
|
|
|
|
|
1.06%
|
Expected life of
options
|
|
|
|
|
|
|
5.7
years
|
Performance Share Units
Currently, PSUs granted under the LTIP are comprised of three
tranches, with each tranche vesting based on the achievement of
performance metrics over separate performance periods ranging from
one to three years, and will be settled in shares for grantees who
are subject to the company's share ownership guidelines and in cash
for all other grantees. PSUs will vest based on performance metrics
comprising the relative ranking of the company's total shareholder
return compared with a specified peer group and the company's cash
flow return on investment compared with its weighted average cost
of capital. Compensation cost is measured based on the grant date
fair value of the units, adjusted for the company's best estimate
of the outcome of non-market vesting conditions at the end of each
period, for share-settled PSUs, and on period-end fair value of the
awards for cash-settled PSUs. The company uses a Monte Carlo
simulation model to estimate the outcome of relative total
shareholder return.
9. Subsequent Events
Subsequent to June 30, 2016, the
company announced its intention to reduce its quarterly dividend
from $0.25 per share to $0.10 per share beginning with the declaration of
its next quarterly dividend in September
2016. The total estimated dividend to be paid in the fourth
quarter of 2016 is $84.
Potash Corporation of
Saskatchewan Inc.
|
Selected Financial
Data
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
Six Months
Ended
|
|
June 30
|
June 30
|
|
2016
|
2015
|
2016
|
2015
|
|
|
|
|
|
|
|
|
|
Potash Sales (tonnes -
thousands)
|
|
|
|
|
|
|
|
|
|
Manufactured
Product
|
|
|
|
|
|
|
|
|
|
|
North
America
|
|
850
|
|
648
|
|
1,628
|
|
1,448
|
|
|
Offshore
|
|
1,272
|
|
1,864
|
|
2,277
|
|
3,413
|
|
Manufactured
Product
|
|
2,122
|
|
2,512
|
|
3,905
|
|
4,861
|
|
|
|
|
|
|
|
|
|
Potash Net
Sales
|
|
|
|
|
|
|
|
|
|
(US $
millions)
|
|
|
|
|
|
|
|
|
|
|
Sales
|
$
|
393
|
$
|
748
|
$
|
774
|
$
|
1,486
|
|
|
Freight, transportation and
distribution
|
|
(64)
|
|
(59)
|
|
(123)
|
|
(123)
|
|
|
Net
Sales
|
$
|
329
|
$
|
689
|
$
|
651
|
$
|
1,363
|
|
|
|
|
|
|
|
|
|
|
Manufactured
Product
|
|
|
|
|
|
|
|
|
|
|
North
America
|
$
|
167
|
$
|
227
|
$
|
305
|
$
|
506
|
|
|
Offshore
|
|
160
|
|
460
|
|
340
|
|
848
|
|
Other miscellaneous and
purchased product
|
|
2
|
|
2
|
|
6
|
|
9
|
|
Net
Sales
|
$
|
329
|
$
|
689
|
$
|
651
|
$
|
1,363
|
|
|
|
|
|
|
|
|
|
Manufactured
Product
|
|
|
|
|
|
|
|
|
|
Average Realized Sales
Price per Tonne
|
|
|
|
|
|
|
|
|
|
|
North
America
|
$
|
196
|
$
|
349
|
$
|
187
|
$
|
349
|
|
|
Offshore
|
$
|
125
|
$
|
247
|
$
|
149
|
$
|
249
|
|
|
Average
|
$
|
154
|
$
|
273
|
$
|
165
|
$
|
278
|
|
Cost of Goods Sold per
Tonne
|
$
|
(91)
|
$
|
(105)
|
$
|
(108)
|
$
|
(103)
|
|
Gross Margin per
Tonne
|
$
|
63
|
$
|
168
|
$
|
57
|
$
|
175
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Potash Corporation of
Saskatchewan Inc.
|
Selected Financial
Data
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
Six Months
Ended
|
|
June 30
|
June 30
|
|
2016
|
2015
|
2016
|
2015
|
|
|
|
|
|
|
|
|
|
Average Natural Gas Cost in
Production per MMBtu
|
$
|
3.26
|
$
|
4.69
|
$
|
3.35
|
$
|
4.89
|
Nitrogen Sales (tonnes -
thousands)
|
|
|
|
|
|
|
|
|
|
Manufactured
Product
|
|
|
|
|
|
|
|
|
|
|
Ammonia
(1)
|
|
543
|
|
621
|
|
1,144
|
|
1,110
|
|
|
Urea
|
|
261
|
|
272
|
|
567
|
|
524
|
|
|
Solutions/Nitric
acid/Ammonium nitrate
|
|
703
|
|
739
|
|
1,460
|
|
1,307
|
|
Manufactured
Product
|
|
1,507
|
|
1,632
|
|
3,171
|
|
2,941
|
|
|
|
|
|
|
|
|
|
|
Fertilizer sales tonnes
(1)
|
|
547
|
|
583
|
|
1,213
|
|
971
|
|
Industrial/Feed sales
tonnes
|
|
960
|
|
1,049
|
|
1,958
|
|
1,970
|
|
Manufactured
Product
|
|
1,507
|
|
1,632
|
|
3,171
|
|
2,941
|
|
|
|
|
|
|
|
|
|
Nitrogen Net
Sales
|
|
|
|
|
|
|
|
|
|
(US $
millions)
|
|
|
|
|
|
|
|
|
|
|
Sales - third
party
|
$
|
383
|
$
|
559
|
$
|
811
|
$
|
1,041
|
|
|
Freight, transportation and
distribution - third party
|
|
(27)
|
|
(27)
|
|
(60)
|
|
(50)
|
|
|
Net sales - third
party
|
|
356
|
|
532
|
|
751
|
|
991
|
|
|
Inter-segment net
sales
|
|
17
|
|
19
|
|
34
|
|
37
|
|
|
Net
Sales
|
$
|
373
|
$
|
551
|
$
|
785
|
$
|
1,028
|
|
|
|
|
|
|
|
|
|
|
Manufactured
Product
|
|
|
|
|
|
|
|
|
|
|
Ammonia
(2)
|
$
|
177
|
$
|
285
|
$
|
365
|
$
|
513
|
|
|
Urea
|
|
71
|
|
98
|
|
157
|
|
195
|
|
|
Solutions/Nitric
acid/Ammonium nitrate
|
|
119
|
|
161
|
|
252
|
|
295
|
|
Other miscellaneous and
purchased product (3)
|
|
6
|
|
7
|
|
11
|
|
25
|
|
Net
Sales
|
$
|
373
|
$
|
551
|
$
|
785
|
$
|
1,028
|
|
|
|
|
|
|
|
|
|
|
Fertilizer net sales
(2)
|
$
|
147
|
$
|
204
|
$
|
302
|
$
|
337
|
|
Industrial/Feed net
sales
|
|
221
|
|
340
|
|
473
|
|
666
|
|
Other miscellaneous and
purchased product (3)
|
|
5
|
|
7
|
|
10
|
|
25
|
|
Net
Sales
|
$
|
373
|
$
|
551
|
$
|
785
|
$
|
1,028
|
|
|
|
|
|
|
|
|
|
Manufactured
Product
|
|
|
|
|
|
|
|
|
|
Average Realized Sales
Price per Tonne
|
|
|
|
|
|
|
|
|
|
|
Ammonia
|
$
|
325
|
$
|
460
|
$
|
318
|
$
|
463
|
|
|
Urea
|
$
|
274
|
$
|
358
|
$
|
278
|
$
|
372
|
|
|
Solutions/Nitric
acid/Ammonium nitrate
|
$
|
169
|
$
|
218
|
$
|
173
|
$
|
226
|
|
|
Average
|
$
|
244
|
$
|
334
|
$
|
244
|
$
|
341
|
|
|
Fertilizer average price
per Tonne
|
$
|
267
|
$
|
350
|
$
|
248
|
$
|
347
|
|
|
Industrial/Feed average
price per Tonne
|
$
|
230
|
$
|
324
|
$
|
242
|
$
|
338
|
|
|
Average
|
$
|
244
|
$
|
334
|
$
|
244
|
$
|
341
|
|
Cost of Goods Sold per
Tonne
|
$
|
(160)
|
$
|
(201)
|
$
|
(172)
|
$
|
(207)
|
|
Gross Margin per
Tonne
|
$
|
84
|
$
|
133
|
$
|
72
|
$
|
134
|
|
|
|
|
|
|
|
|
|
(1)
Includes inter-segment ammonia sales
(tonnes - thousands)
|
|
39
|
|
37
|
|
79
|
|
70
|
(2)
Includes inter-segment ammonia net
sales
|
$
|
17
|
$
|
18
|
$
|
34
|
$
|
36
|
(3)
Includes inter-segment other
miscellaneous and purchased
product net
sales
|
$
|
-
|
$
|
1
|
$
|
-
|
$
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Potash Corporation of
Saskatchewan Inc.
|
Selected Financial
Data
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
Six Months
Ended
|
|
June 30
|
June 30
|
|
2016
|
2015
|
2016
|
2015
|
|
|
|
|
|
|
|
|
|
Phosphate Sales (tonnes
- thousands)
|
|
|
|
|
|
|
|
|
|
Manufactured
Product
|
|
|
|
|
|
|
|
|
|
|
Fertilizer
|
|
274
|
|
383
|
|
711
|
|
754
|
|
|
Feed and
Industrial
|
|
238
|
|
296
|
|
518
|
|
576
|
|
Manufactured
Product
|
|
512
|
|
679
|
|
1,229
|
|
1,330
|
|
|
|
|
|
|
|
|
|
Phosphate Net
Sales
|
|
|
|
|
|
|
|
|
|
(US $
millions)
|
|
|
|
|
|
|
|
|
|
|
Sales
|
$
|
277
|
$
|
424
|
$
|
677
|
$
|
869
|
|
|
Freight, transportation and
distribution
|
|
(27)
|
|
(38)
|
|
(68)
|
|
(79)
|
|
|
Net
Sales
|
$
|
250
|
$
|
386
|
$
|
609
|
$
|
790
|
|
|
|
|
|
|
|
|
|
|
Manufactured
Product
|
|
|
|
|
|
|
|
|
|
|
Fertilizer
|
$
|
108
|
$
|
184
|
$
|
299
|
$
|
378
|
|
|
Feed and
Industrial
|
|
140
|
|
192
|
|
307
|
|
371
|
|
Other miscellaneous and
purchased product
|
|
2
|
|
10
|
|
3
|
|
41
|
|
Net
Sales
|
$
|
250
|
$
|
386
|
$
|
609
|
$
|
790
|
|
|
|
|
|
|
|
|
|
Manufactured
Product
|
|
|
|
|
|
|
|
|
|
Average Realized Sales
Price per Tonne
|
|
|
|
|
|
|
|
|
|
|
Fertilizer
|
$
|
397
|
$
|
480
|
$
|
421
|
$
|
501
|
|
|
Feed and
Industrial
|
$
|
587
|
$
|
647
|
$
|
592
|
$
|
644
|
|
|
Average
|
$
|
485
|
$
|
553
|
$
|
493
|
$
|
563
|
|
Cost of Goods Sold per
Tonne
|
$
|
(506)
|
$
|
(450)
|
$
|
(471)
|
$
|
(468)
|
|
Gross Margin per
Tonne
|
$
|
(21)
|
$
|
103
|
$
|
22
|
$
|
95
|
Potash Corporation of
Saskatchewan Inc.
|
Selected Additional
Data
|
(unaudited)
|
|
|
|
|
Exchange Rate
(Cdn$/US$)
|
|
|
|
|
|
|
|
2016
|
2015
|
|
|
|
|
|
December
31
|
|
|
|
1.3840
|
June
30
|
|
|
1.3009
|
1.2474
|
Second-quarter average
conversion rate
|
|
|
1.2996
|
1.2378
|
|
|
|
|
|
|
Three Months
Ended
|
Six Months
Ended
|
|
June 30
|
June 30
|
|
2016
|
2015
|
2016
|
2015
|
|
|
|
|
|
Production
|
|
|
|
|
Potash production (KCl
Tonnes - thousands)
|
2,273
|
2,387
|
4,503
|
4,999
|
Potash shutdown weeks
(1)
|
6
|
5
|
13
|
5
|
Nitrogen production (N
Tonnes - thousands)
|
789
|
753
|
1,560
|
1,545
|
Ammonia operating
rate
|
89%
|
86%
|
88%
|
89%
|
Phosphate production
(P2O5 Tonnes -
thousands)
|
297
|
379
|
708
|
745
|
Phosphate
P2O5 operating
rate
|
62%
|
80%
|
74%
|
78%
|
|
|
|
|
|
Shareholders
|
|
|
|
|
PotashCorp's total
shareholder return
|
-3%
|
-3%
|
-1%
|
-10%
|
|
|
|
|
|
Customers
|
|
|
|
|
Product tonnes involved in
customer complaints (thousands)
|
37
|
3
|
62
|
21
|
|
|
|
|
|
Community
|
|
|
|
|
Taxes and royalties ($
millions) (2)
|
81
|
215
|
159
|
457
|
|
|
|
|
|
Employees
|
|
|
|
|
Annualized employee
turnover rate (3)
|
4%
|
4%
|
4%
|
4%
|
|
|
|
|
|
Safety
|
|
|
|
|
Total site recordable
injury rate (per 200,000 work hours)
(4)
|
0.69
|
0.85
|
0.91
|
0.88
|
|
|
|
|
|
Environment
|
|
|
|
|
Environmental incidents
(5)
|
3
|
5
|
12
|
10
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30
|
December 31
|
As
at
|
|
|
2016
|
2015
|
|
|
|
|
|
Number of
employees
|
|
|
|
|
|
Potash
|
|
|
2,305
|
2,689
|
|
Nitrogen
|
|
|
822
|
812
|
|
Phosphate
|
|
|
1,460
|
1,438
|
|
Other
|
|
|
463
|
456
|
|
Total
|
|
|
5,050
|
5,395
|
(1)
Represents weeks of full production
shutdown; excludes the impact of any periods of reduced operating
rates, planned routine annual maintenance shutdowns and suspension
of Picadilly potash operations.
|
(2)
Taxes and royalties = current income tax
expense - investment tax credits - realized excess tax benefit
related to share-based compensation + potash production tax +
resource surcharge + royalties + municipal taxes + other
miscellaneous taxes (calculated on an accrual
basis).
|
(3)
Excluding retirements and workforce
changes related to suspension of Picadilly potash
operations.
|
(4)
Total site includes PotashCorp employees,
contractors and others on site (as defined in our 2015 Annual
Integrated Report).
|
(5)
Total of reportable quantity releases,
permit excursions and provincial reportable spills (as defined in
our 2015 Annual Integrated Report).
|
Potash Corporation of Saskatchewan Inc.
Selected Non-IFRS Financial Measures and Reconciliations and
Supplemental Information
(in millions of US dollars except percentage amounts)
(unaudited)
The following information is included for convenience only.
Generally, a non-IFRS financial measure is a numerical measure of a
company's performance, cash flows or financial position that either
excludes or includes amounts that are not normally excluded or
included in the most directly comparable measure calculated and
presented in accordance with IFRS. EBITDA, adjusted EBITDA,
adjusted EBITDA margin, cash flow prior to working capital changes
and free cash flow are not measures of financial performance (nor
do they have standardized meanings) under IFRS. In evaluating these
measures, investors should consider that the methodology applied in
calculating such measures may differ among companies and
analysts.
The company uses both IFRS and certain non-IFRS measures to
assess performance. Management believes these non-IFRS measures
provide useful supplemental information to investors in order that
they may evaluate PotashCorp's financial performance using the same
measures as management. Management believes that, as a result, the
investor is afforded greater transparency in assessing the
financial performance of the company. These non-IFRS financial
measures should not be considered as a substitute for, nor superior
to, measures of financial performance prepared in accordance with
IFRS.
A. EBITDA, ADJUSTED EBITDA AND ADJUSTED
EBITDA MARGIN
Set forth below is a reconciliation of "EBITDA" and "adjusted
EBITDA" to net income and "adjusted EBITDA margin" to net income as
a percentage of sales, the most directly comparable financial
measures calculated and presented in accordance with IFRS.
|
|
Three Months
Ended
|
Six Months
Ended
|
|
|
June 30
|
June 30
|
|
|
2016
|
2015
|
2016
|
2015
|
Net income
|
|
$
|
121
|
$
|
417
|
$
|
196
|
$
|
787
|
Finance
costs
|
|
|
54
|
|
50
|
|
106
|
|
99
|
Income
taxes
|
|
|
24
|
|
152
|
|
56
|
|
292
|
Depreciation and
amortization
|
|
|
168
|
|
173
|
|
335
|
|
345
|
EBITDA
|
|
$
|
367
|
$
|
792
|
$
|
693
|
$
|
1,523
|
Share of Canpotex's Prince
Rupert project exit costs
|
|
|
33
|
|
-
|
|
33
|
|
-
|
Termination benefit
costs
|
|
|
-
|
|
-
|
|
32
|
|
-
|
Impairment of property,
plant and equipment
|
|
|
-
|
|
-
|
|
27
|
|
-
|
Impairment of
available-for-sale investment
|
|
|
10
|
|
-
|
|
10
|
|
-
|
Adjusted
EBITDA
|
|
$
|
410
|
$
|
792
|
$
|
795
|
$
|
1,523
|
EBITDA is calculated as net income before finance costs, income
taxes, and depreciation and amortization. Adjusted EBITDA is
calculated as net income before finance costs, income taxes,
depreciation and amortization, exit costs, termination benefit
costs and certain impairment charges. PotashCorp uses EBITDA as a
supplemental financial measure of its operational performance.
Management believes EBITDA and adjusted EBITDA to be important
measures as they exclude the effects of items which primarily
reflect the impact of long-term investment and financing decisions,
rather than the performance of the company's day-to-day operations.
As compared to net income according to IFRS, these measures are
limited in that they do not reflect the periodic costs of certain
capitalized tangible and intangible assets used in generating
revenues in the company's business, the charges associated with
impairments, termination benefit costs or exit costs. Management
evaluates such items through other financial measures such as
capital expenditures and cash flow provided by operating
activities. The company believes that these measurements are useful
to measure a company's ability to service debt and to meet other
payment obligations or as a valuation measurement.
|
|
Three Months
Ended
|
Six Months
Ended
|
|
|
June 30
|
June 30
|
|
|
2016
|
2015
|
2016
|
2015
|
Sales
|
|
$
|
1,053
|
$
|
1,731
|
$
|
2,262
|
$
|
3,396
|
Freight, transportation and
distribution
|
|
|
(118)
|
|
(124)
|
|
(251)
|
|
(252)
|
Net sales
|
|
$
|
935
|
$
|
1,607
|
$
|
2,011
|
$
|
3,144
|
|
|
|
|
|
|
|
|
|
|
Net income as a
percentage of sales
|
|
|
11%
|
|
24%
|
|
9%
|
|
23%
|
Adjusted EBITDA
margin
|
|
|
44%
|
|
49%
|
|
40%
|
|
48%
|
Adjusted EBITDA margin is calculated as adjusted EBITDA divided
by net sales (sales less freight, transportation and distribution).
Management believes comparing adjusted EBITDA to net sales earned
(net of costs to deliver product) is an important indicator of
efficiency. In addition to the limitations given above in using
adjusted EBITDA as compared to net income, adjusted EBITDA margin
as compared to net income as a percentage of sales is also limited
in that freight, transportation and distribution costs are incurred
and valued independently of sales; adjusted EBITDA also includes
share of earnings of equity-accounted investees whose sales are not
included in consolidated sales. Management evaluates these items
individually on the consolidated statements of income.
B. CASH FLOW
Set forth below is a reconciliation of "cash flow prior to
working capital changes" and "free cash flow" to cash provided by
operating activities, the most directly comparable financial
measure calculated and presented in accordance with IFRS.
|
|
Three Months
Ended
|
Six Months
Ended
|
|
|
June 30
|
June 30
|
|
|
2016
|
2015
|
2016
|
2015
|
Cash flow prior to
working capital changes
|
|
$
|
380
|
$
|
665
|
$
|
661
|
$
|
1,216
|
Changes in non-cash
operating working capital
|
|
|
|
|
|
|
|
|
|
|
Receivables
|
|
|
186
|
|
29
|
|
145
|
|
85
|
|
Inventories
|
|
|
(51)
|
|
2
|
|
(43)
|
|
(60)
|
|
Prepaid expenses and other
current assets
|
|
|
5
|
|
11
|
|
3
|
|
3
|
|
Payables and accrued
charges
|
|
|
(96)
|
|
129
|
|
(154)
|
|
113
|
Changes in non-cash
operating working capital
|
|
|
44
|
|
171
|
|
(49)
|
|
141
|
Cash provided by
operating activities
|
|
$
|
424
|
$
|
836
|
$
|
612
|
$
|
1,357
|
Additions to property,
plant and equipment
|
|
|
(211)
|
|
(294)
|
|
(457)
|
|
(522)
|
Other assets and intangible
assets
|
|
|
(9)
|
|
(10)
|
|
(9)
|
|
(15)
|
Changes in non-cash
operating working capital
|
|
|
(44)
|
|
(171)
|
|
49
|
|
(141)
|
Free cash
flow
|
|
$
|
160
|
$
|
361
|
$
|
195
|
$
|
679
|
Management uses cash flow prior to working capital changes as a
supplemental financial measure in its evaluation of liquidity.
Management believes that adjusting principally for the swings in
non-cash working capital items due to seasonality or other timing
issues assists management in making long-term liquidity
assessments. The company also believes that this measurement is
useful as a measure of liquidity or as a valuation measurement.
The company uses free cash flow as a supplemental financial
measure in its evaluation of liquidity and financial strength.
Management believes that adjusting principally for the swings in
non-cash operating working capital items due to seasonality or
other timing issues, additions to property, plant and equipment,
and changes to other assets assists management in the long-term
assessment of liquidity and financial strength. Management
also believes that this measurement is useful as an indicator of
its ability to service its debt, meet other payment obligations and
make strategic investments. Readers should be aware that free
cash flow does not represent residual cash flow available for
discretionary expenditures.
C. ITEMS INCLUDED IN GROSS MARGIN
|
|
Three Months Ended June
30, 2016
|
|
|
Potash
|
Nitrogen
|
Phosphate
|
Consolidated
|
Gross
margin
|
|
$
|
123
|
$
|
130
|
$
|
(10)
|
$
|
243
|
Items included in the
above:
|
|
|
|
|
|
|
|
|
|
|
Share of Canpotex's Prince
Rupert project exit costs
|
|
|
(33)
|
|
-
|
|
-
|
|
(33)
|
|
Termination benefit
costs
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Impairment of property,
plant and equipment
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June
30, 2016
|
|
|
Potash
|
Nitrogen
|
Phosphate
|
Consolidated
|
Gross
margin
|
|
$
|
211
|
$
|
237
|
$
|
29
|
$
|
477
|
Items included in the
above:
|
|
|
|
|
|
|
|
|
|
|
Share of Canpotex's Prince
Rupert project exit costs
|
|
|
(33)
|
|
-
|
|
-
|
|
(33)
|
|
Termination benefit
costs
|
|
|
(32)
|
|
-
|
|
-
|
|
(32)
|
|
Impairment of property,
plant and equipment
|
|
|
-
|
|
-
|
|
(27)
|
|
(27)
|
SOURCE Potash Corporation of Saskatchewan Inc.