All amounts are in US dollars except as otherwise noted
Nutrien Ltd. (TSX and NYSE: NTR) announced today its fourth
quarter 2021 results, with net earnings of $1.2 billion ($2.11
diluted net earnings per share). Fourth-quarter adjusted net
earnings1 were $2.47 per share and adjusted EBITDA1 was $2.5
billion.
“The advantages of Nutrien’s integrated business were
demonstrated in 2021 as we delivered record financial results3 and
made significant progress on our long-term strategic targets,
including our key sustainability priorities. We utilized the scale
and reliability of our world-class supply chain and the strong
execution of our teams to ensure customers had the products and
services they needed, when they needed them,” commented Ken Seitz,
Nutrien’s Interim President and CEO.
“The outlook for global agriculture and crop input markets is
very strong and we are well positioned to deliver significant
growth in earnings and free cash flow in 2022. We will continue to
advance our strategic priorities and maintain a disciplined
approach to deploying capital, using our strong financial position
to grow the business and return significant cash to shareholders,”
added Mr. Seitz.
Highlights:
- Nutrien generated net earnings of $1.2 billion and record
adjusted EBITDA of $2.5 billion in the fourth quarter while
generating $3.2 billion of net earnings ($5.52 diluted net earnings
per share) and record adjusted EBITDA of $7.1 billion ($6.23
adjusted net earnings per share) for the full year of 2021. Cash
flow provided by operating activities in the full year was $3.9
billion.
- We prioritized the use of cash in 2021 to strengthen and
reposition the balance sheet, reducing our long-term debt by $2.1
billion. We deployed $2.1 billion to dividends and share
repurchases in 2021 repurchasing 15 million shares during the year
under our normal course issuer bid (NCIB). To date, we have
repurchased over 22 million shares under our NCIB program.
Nutrien’s Board of Directors approved an increase in the quarterly
dividend to $0.48 per share and approved the purchase of up to 10
percent of Nutrien’s outstanding common shares over a one-year
period through a NCIB. The NCIB is subject to acceptance by the
Toronto Stock Exchange.
- Nutrien issued full-year 2022 adjusted EBITDA and adjusted net
earnings per share guidance1 of $10.0 to $11.2 billion and $10.20
to $11.80 per share. Adjusted net earnings per share guidance
includes our plans to allocate a minimum of $2 billion to share
repurchases in 2022 on a balanced cadence throughout the year.
- Nutrien Ag Solutions (“Retail”) delivered record adjusted
EBITDA in the fourth quarter and surpassed $1.9 billion for the
full year of 2021. We exceeded nearly all of our 2023 strategic
targets including a record 10.9 percent Retail adjusted EBITDA
margin2 and increased our proprietary product related gross margin
to more than $1 billion in 2021, an increase of 22 percent.
- The reliability and efficiency of our global supply chain and
strategic procurement helped drive our Retail normalized comparable
store sales1 to 7 percent and Retail adjusted EBITDA per US selling
location2 to $1.5 million during 2021. We closed 14 acquisitions
during the year and increased our Retail digital platform sales2 to
$2.1 billion.
- Potash adjusted EBITDA surpassed $1 billion in the fourth
quarter and increased 130 percent in the full year of 2021 to $2.7
billion. We achieved record sales volumes of 13.6 million tonnes in
2021 due to our capability to quickly ramp up production from our
flexible, low-cost network of six mines. We progressed our Potash
Next Generation initiatives and produced 1 million tonnes in 2021
using tele-remote and autonomous mining techniques.
- Nitrogen adjusted EBITDA was $921 million in the fourth quarter
of 2021 and increased 114 percent to $2.3 billion in the full year
of 2021. We completed our phase 1 brownfield expansion projects on
time and on budget, launched a second phase of projects and
progressed decarbonization initiatives.
- Phosphate adjusted EBITDA was $196 million in the fourth
quarter of 2021 and increased 133 percent to $540 million in the
full year of 2021.
1 This financial measure
including related guidance, if applicable, is a non-IFRS financial
measure. See the “Non-IFRS Financial Measures” section for further
information.
2 This is a supplementary
financial measure. See the “Other Financial Measures” section for
further information.
3 Net earnings from continuing
operations.
Market Outlook
Agriculture and Retail
- Global inventory for key grains and oilseeds remains
historically low due to a combination of weather-related events and
strong demand fueled by a greater focus on global food security and
recovering feed and bio-energy related markets.
- Corn and soybean prices in the US and Brazil remain very strong
and prospective crop margins are well above the 10-year average. We
expect this will incentivize growers to invest in their crops.
- US growers experienced favorable fall weather conditions that
combined with strong crop economics, supported a second consecutive
year of strong fall fertilizer application. We expect overall
planted area of major crops to be similar to 2021 levels, with corn
and soybean acreage in the range of 91 to 93 million and 87 to 89
million, respectively.
- Growers in Brazil planted an additional 4 million acres of
soybeans which was a second consecutive year of record planting.
However, yields have been impacted by drought conditions in major
growing regions. We expect strong crop economics will support total
Brazilian planted acreage and crop input demand in 2022. Australian
growers continue to experience favorable weather conditions and
harvested record wheat production.
- Nutrien is well-positioned on fertilizer and crop protection
product inventory to begin the North American planting season. Our
Retail adjusted EBITDA guidance assumes there was some pull forward
of fertilizer sales volumes due to the strong fall season in North
America and that Retail fertilizer margins return to historical
average levels after increasing in 2021 due to strategic
procurement in a rising price environment.
Crop Nutrient Markets
- Global potash prices increased in response to record global
demand of 70 million in 2021 and tightness of supply due to
competitor mine flooding, new project delays and uncertainty around
sanctions imposed on Belarus by the US and Europe. We believe that
many of these supply issues will continue into 2022, including
additional restrictions imposed on Belarus potash transported
through Lithuania. We estimate 2022 global shipments in a range of
68 to 71 million tonnes.
- Nutrien expects record potash sales volumes between 13.7 to
14.3 million tonnes in 2022. This forecast assumes sanctions on
Belarus have a temporary impact on global supply. If there was a
more significant long-term impact on global supply, Nutrien has the
capability to further ramp up production by hiring additional
employees and incurring some small incremental capital
expenditures.
- Nitrogen prices have been supported by strong demand, soaring
energy prices in Europe, and government restrictions and
geopolitical risks in key export markets. Global urea prices
softened in early 2022 during a seasonally slow period, however,
ammonia and nitrates prices continue to strengthen due to supply
side constraints. North American natural gas prices increased in
early 2022 but we expect Henry Hub prices to average between $3.75
and $4.25 per MMBtu in 2022, well below import pricing levels in
Europe and Asia.
- We expect to increase Nitrogen sales volumes to 10.8 to 11.3
million tonnes in 2022 with the completion of Phase 1 brownfield
expansion projects in 2021 and higher anticipated operating
rates.
- Phosphate prices have been supported by the expected reduction
in supply from China due to export restrictions and elevated raw
material input cost. This is compounded by tight inventories in key
import markets such as India.
Financial Outlook and Guidance
Based on market factors detailed above, we are issuing full-year
2022 adjusted EBITDA guidance of $10.0 to $11.2 billion and
full-year 2022 adjusted net earnings guidance of $10.20 to $11.80
per share. Adjusted net earnings per share guidance includes our
plans to allocate a minimum of $2 billion to share repurchases in
2022 on a balanced cadence throughout the year.
All guidance numbers, including those noted above and related
sensitives are outlined in the tales below.
2022 Guidance Ranges 1
Low
High
Adjusted net earnings per share 2
$
10.20
$
11.80
Adjusted EBITDA (billions) 2
$
10.0
$
11.2
Retail Adjusted EBITDA (billions)
$
1.7
$
1.8
Potash Adjusted EBITDA (billions)
$
5.0
$
5.5
Nitrogen Adjusted EBITDA (billions)
$
3.2
$
3.6
Phosphate Adjusted EBITDA (millions)
$
500
$
600
Potash sales tonnes (millions) 3
13.7
14.3
Nitrogen sales tonnes (millions) 3
10.8
11.3
Depreciation and amortization
(billions)
$
2.0
$
2.1
Effective tax rate on adjusted
earnings
25
%
26
%
Sustaining capital expenditures (billions)
4
$
1.2
$
1.3
Impact to
Adjusted
Adjusted
2022 Annual Assumptions &
Sensitivities 1
EBITDA
EPS 5
$1/MMBtu change in NYMEX 6
$
180
$
0.25
$25/tonne change in realized potash
selling prices
$
290
$
0.40
$25/tonne change in realized ammonia
selling prices
$
50
$
0.07
$25/tonne change in realized urea selling
prices
$
80
$
0.11
2022 FX Rate CAD to USD
1.26
2022 NYMEX natural gas ($US/MMBtu)
~$ 4.00
1 See the “Forward-Looking Statements”
section.
2 This is a non-IFRS financial measure.
See the “Non-IFRS Financial Measures” section.
3 Manufactured products only. Nitrogen
excludes ESN® products.
4 This is a supplementary financial
measure. See the Refer to “Other Financial Measures” section for
further information.
5 Assumes 546 million shares
outstanding.
6 Nitrogen related impact.
Consolidated Results
Three Months Ended December
31
Twelve Months Ended December
31
(millions of US dollars)
2021
2020
% Change
2021
2020
% Change
Sales
7,267
4,052
79
27,712
20,908
33
Freight, transportation and
distribution
198
202
(2)
851
855
‐
Cost of goods sold
3,863
2,685
44
17,452
14,814
18
Gross margin
3,206
1,165
175
9,409
5,239
80
Expenses
1,379
762
81
4,628
4,337
7
Net earnings
1,207
316
282
3,179
459
593
Adjusted EBITDA 1
2,463
768
221
7,126
3,667
94
Diluted net earnings per share
2.11
0.55
284
5.52
0.81
581
Adjusted net earnings per share 1
2.47
0.24
929
6.23
1.80
246
Cash provided by operating activities
3,637
2,778
31
3,886
3,323
17
Free cash flow 1
1,549
196
690
4,300
1,830
135
Free cash flow including changes in
non-cash operating working capital 1
3,183
2,370
34
2,639
2,404
10
1 These are non-IFRS financial measures.
See the "Non-IFRS Financial Measures" section.
Net earnings and adjusted EBITDA increased significantly in the
fourth quarter and full year of 2021 compared to the same periods
in 2020. This was due to higher net realized selling prices across
our nutrient businesses, higher potash sales volumes, strong
organic and proprietary product sales growth in Retail. In 2020, we
recorded a non-cash impairment of $824 million primarily related to
our Phosphate business and a gain of $250 million realized in the
fourth quarter of 2020 related to the Misr Fertilizers Production
Company S.A.E. (“MOPCO”) divestment with no similar transactions in
2021. Cash flow provided by operating activities increased in the
fourth quarter and full year of 2021 compared to the same periods
in 2020 due primarily to higher net earnings. The COVID-19 pandemic
had a limited impact on our results during the fourth quarter and
full year of 2021.
Segment Results
Our discussion of segment results set out on the following pages
is a comparison of the results for the three and twelve months
ended December 31, 2021 to the results for the three and twelve
months ended December 31, 2020, unless otherwise noted.
Nutrien Ag Solutions (“Retail”)
Three Months Ended December
31
(millions of US dollars, except
Dollars
Gross Margin
Gross Margin (%)
as otherwise noted)
2021
2020
% Change
2021
2020
% Change
2021
2020
Sales
Crop nutrients
2,035
1,108
84
428
236
81
21
21
Crop protection products
1,113
828
34
414
343
21
37
41
Seed
189
152
24
57
58
(2)
30
38
Merchandise
270
240
13
45
41
10
17
17
Nutrien Financial
51
37
38
51
37
38
100
100
Services and other
267
290
(8)
225
207
9
84
71
Nutrien Financial elimination 1
(47)
(37)
27
(47)
(37)
27
100
100
3,878
2,618
48
1,173
885
33
30
34
Cost of goods sold
2,705
1,733
56
Gross margin
1,173
885
33
Expenses 2
911
768
19
Earnings before finance costs and taxes
("EBIT")
262
117
124
Depreciation and amortization
178
180
(1)
EBITDA
440
297
48
Adjustments 3
2
‐
n/m
Adjusted EBITDA
442
297
49
1 Represents elimination for the interest
and service fees charged by Nutrien Financial to Retail
branches.
2 Includes selling expenses of $848
million (2020 – $727 million).
3 See Note 2 to the unaudited condensed
consolidated financial statements.
Twelve Months Ended December
31
(millions of US dollars, except
Dollars
Gross Margin
Gross Margin (%)
as otherwise noted)
2021
2020
% Change
2021
2020
% Change
2021
2020
Sales
Crop nutrients
7,290
5,200
40
1,597
1,130
41
22
22
Crop protection products
6,333
5,602
13
1,551
1,303
19
24
23
Seed
2,008
1,790
12
419
363
15
21
20
Merchandise
1,033
943
10
172
157
10
17
17
Nutrien Financial
189
129
47
189
129
47
100
100
Services and other
1,051
1,241
(15)
842
774
9
80
62
Nutrien Financial elimination
(170)
(120)
42
(170)
(120)
42
100
100
17,734
14,785
20
4,600
3,736
23
26
25
Cost of goods sold
13,134
11,049
19
Gross margin
4,600
3,736
23
Expenses 1
3,378
2,974
14
EBIT
1,222
762
60
Depreciation and amortization
706
668
6
EBITDA
1,928
1,430
35
Adjustments 2
11
‐
n/m
Adjusted EBITDA
1,939
1,430
36
1 Includes selling expenses of $3,124
million (2020 – $2,795 million).
2 See Note 2 to the unaudited condensed
consolidated financial statements.
- Adjusted EBITDA increased in the fourth quarter and full
year of 2021 due to increased sales and gross margin achieved
through market share growth, strong agriculture fundamentals and
expansion in South America. Gross margin increases were supported
by strategic procurement of crop nutrients and crop protection
products in a rising price environment and a 22 percent increase in
proprietary product related gross margin. Retail cash operating
coverage ratio1 declined to 58 percent in 2021 due to significantly
higher gross margin.
- Crop nutrients sales increased in the fourth quarter and
full year of 2021 due to record sales volumes and higher selling
prices. Gross margin per tonne increased by $31 per tonne in 2021
due to strategic purchasing in a rising price environment and
higher proprietary product sales.
- Crop protection products sales increased in the fourth
quarter and full year of 2021 due to market share growth, higher
prices and increased proprietary product sales across all
geographies, especially in Australia where uptake by customers was
exceptional. The reliability of our supply chain, growth in
proprietary product contribution and strategic procurement supports
our ability to deliver on strong grower demand throughout the
year.
- Seed sales increased in the fourth quarter primarily due
to significant organic growth achieved in South America and
Australia following recent expansion initiatives and acquisitions.
Gross margin percentage decreased in the fourth quarter due to the
timing and mix of seed sales in the US. Seed sales for the full
year of 2021 increased in all key regions where we operate due to
higher planted acreage, higher prices and significant organic
growth in South America. Gross margin percentage for 2021 increased
due to price increases, including from our proprietary
product.
- Merchandise sales increased in the fourth quarter and
full year of 2021 primarily driven by strong grower and rancher
purchasing in Australia.
- Nutrien Financial sales increased in the fourth quarter
and full year of 2021 due to higher utilization and adoption of our
programs. At the end of the fourth quarter of 2021 net receivables
in the programs were $2.2 billion, an increase of $0.8 billion
compared to the same period in 2020, while credit loss was minimal
in 2021 and 2020 due to strong credit evaluation and collection as
well as favorable market conditions this past year.
- Services and other sales decreased in the fourth quarter
and full year of 2021 compared to the same periods in 2020 due to
the divestiture of an Australian livestock export business in the
fourth quarter of 2020, which more than offset increases in other
Australian services and higher US custom application sales. Despite
the change in revenue mix, gross margin increased and the impact to
gross margin percentage was favorable for both the fourth quarter
and full year of 2021.
1 This financial measure is a
non-IFRS financial measure. See the “Non-IFRS Financial Measures”
section for further information
Potash
Three Months Ended December
31
(millions of US dollars, except
Dollars
Tonnes (thousands)
Average per Tonne
as otherwise noted)
2021
2020
% Change
2021
2020
% Change
2021
2020
% Change
Manufactured product
Net sales
North America
497
199
150
1,002
1,041
(4)
494
192
157
Offshore
923
251
268
2,054
1,613
27
450
156
188
1,420
450
216
3,056
2,654
15
465
170
174
Cost of goods sold
305
305
‐
100
116
(14)
Gross margin – total
1,115
145
669
365
54
576
Expenses 1
179
49
265
Depreciation and amortization
38
46
(17)
EBIT
936
96
875
Gross margin excluding depreciation
Depreciation and amortization
117
123
(5)
and amortization – manufactured 3
403
100
302
EBITDA
1,053
219
381
Potash cash cost of product
Adjustments 2
‐
1
(100)
manufactured 3
70
71
(1)
Adjusted EBITDA
1,053
220
379
1 Includes provincial mining taxes of $173
million (2020 – $40 million).
2 See Note 2 to the unaudited condensed
consolidated financial statements.
3 These are non-IFRS financial measures.
See the "Non-IFRS Financial Measures" section.
Twelve Months Ended December
31
(millions of US dollars, except
Dollars
Tonnes (thousands)
Average per Tonne
as otherwise noted)
2021
2020
% Change
2021
2020
% Change
2021
2020
% Change
Manufactured product
Net sales
North America
1,638
908
80
5,159
4,815
7
317
189
68
Offshore
2,398
1,238
94
8,466
8,009
6
283
155
83
4,036
2,146
88
13,625
12,824
6
296
167
77
Cost of goods sold
1,285
1,183
9
94
92
2
Gross margin – total
2,751
963
186
202
75
169
Expenses 1
512
248
106
Depreciation and amortization
36
35
2
EBIT
2,239
715
213
Gross margin excluding depreciation
Depreciation and amortization
488
452
8
and amortization – manufactured
238
110
116
EBITDA
2,727
1,167
134
Potash cash cost of product
Adjustments 2
9
23
(61)
manufactured
63
59
7
Adjusted EBITDA
2,736
1,190
130
1 Includes provincial mining taxes of $466
million (2020 – $201 million).
2 See Note 2 to the unaudited condensed
consolidated financial statements.
- Adjusted EBITDA increased in the fourth quarter and full
year of 2021 due to higher net realized selling prices and record
sales volumes attributed to our ability to increase production by
nearly 1 million tonnes.
- Sales volumes were a record for the fourth quarter as we
surged production to meet strong global demand and very tight
global supply. We achieved this despite weather-related issues that
temporarily impacted rail deliveries. North America and Offshore
sales volumes in the full year of 2021 were the highest on record
underpinned by the reliable supply from our flexible, low-cost
network of six mines and integrated transportation and logistics
system.
- Net realized selling price increased in the fourth
quarter and full year of 2021 due to strong global demand supported
by higher crop prices, impacts to global supply caused by
competitor outages and project delays as well as uncertainty
regarding future sanctions on Belarus.
- Cost of goods sold per tonne decreased in the fourth
quarter due to lower depreciation and amortization compared to the
same period of 2020 that was caused by production mix and timing of
maintenance projects. Cost of goods sold per tonne increased for
the full year of 2021 primarily due to higher royalties resulting
from increased selling prices, a stronger Canadian dollar and cost
inflation for energy and other inputs.
Canpotex Sales by Market
(percentage of sales volumes, except
as
Three Months Ended December
31
Twelve Months Ended December
31
otherwise noted)
2021
2020
Change
2021
2020
Change
Latin America
37
31
6
38
32
6
Other Asian markets 1
34
24
10
35
25
10
China
12
21
(9)
11
22
(11)
Other markets
11
7
4
10
7
3
India
6
17
(11)
6
14
(8)
100
100
100
100
1 All Asian markets except China and
India.
Nitrogen
Three Months Ended December
31
(millions of US dollars, except
Dollars
Tonnes (thousands)
Average per Tonne
as otherwise noted)
2021
2020
% Change
2021
2020
% Change
2021
2020
% Change
Manufactured product
Net sales
Ammonia
519
157
231
790
730
8
656
216
204
Urea
552
230
140
824
853
(3)
670
270
148
Solutions, nitrates and sulfates
385
168
129
1,221
1,262
(3)
316
133
138
1,456
555
162
2,835
2,845
‐
514
195
164
Cost of goods sold
725
460
58
256
162
58
Gross margin – manufactured
731
95
669
258
33
682
Gross margin – other 1
23
17
35
Depreciation and amortization
52
51
2
Gross margin – total
754
112
573
Gross margin excluding depreciation
Income
(2)
(254)
(99)
and amortization – manufactured 3
310
84
268
EBIT
756
366
107
Ammonia controllable cash cost of
Depreciation and amortization
148
146
1
product manufactured 3
45
40
13
EBITDA
904
512
77
Adjustments 2
17
(246)
n/m
Adjusted EBITDA
921
266
246
1 Includes other nitrogen (including ESN®
and Rainbow) and purchased products and comprises net sales of $193
million (2020 – $114 million) less cost of goods sold of $170
million (2020 – $97 million).
2 See Note 2 to unaudited condensed
consolidated financial statements.
3 These are non-IFRS financial measures.
See the "Non-IFRS Financial Measures" section.
Twelve Months Ended December
31
(millions of US dollars, except
Dollars
Tonnes (thousands)
Average per Tonne
as otherwise noted)
2021
2020
% Change
2021
2020
% Change
2021
2020
% Change
Manufactured product
Net sales
Ammonia
1,393
621
124
2,919
2,778
5
477
224
113
Urea
1,463
933
57
3,059
3,475
(12)
478
268
78
Solutions, nitrates and sulfates
1,128
668
69
4,747
4,713
1
238
142
68
3,984
2,222
79
10,725
10,966
(2)
371
203
83
Cost of goods sold
2,353
1,804
30
219
165
33
Gross margin - manufactured
1,631
418
290
152
38
300
Gross margin – other 1
95
57
67
Depreciation and amortization
52
55
(5)
Gross margin – total
1,726
475
263
Gross margin excluding depreciation
Income
(3)
(225)
(99)
and amortization – manufactured
204
93
120
EBIT
1,729
700
147
Ammonia controllable cash cost of
Depreciation and amortization
557
599
(7)
product manufactured
50
43
16
EBITDA
2,286
1,299
76
Adjustments 2
22
(219)
n/m
Adjusted EBITDA
2,308
1,080
114
1 Includes other nitrogen (including ESN®
and Rainbow) and purchased products and comprises net sales of $705
million (2020 – $518 million) less cost of goods sold of $610
million (2020 – $461 million).
2 See Note 2 to unaudited condensed
consolidated financial statements.
- Adjusted EBITDA increased in the fourth quarter and full
year of 2021 primarily due to higher net realized selling prices,
which more than offset higher natural gas costs.
- Sales volumes decreased slightly in the fourth quarter
and full year of 2021 due to more planned plant turnaround
activity, temporary production outages and lower inventory volumes
at the beginning of 2021 compared to the same period in 2020.
Ammonia operating rates reached 97 percent in the fourth quarter
and 90 percent for the full year of 2021.
- Net realized selling price in the fourth quarter and
full year of 2021 was higher due to higher benchmark prices
resulting from the strength in global demand and tight global
supply caused by production outages and higher energy prices in key
nitrogen exporting regions.
- Cost of goods sold per tonne increased during the fourth
quarter and full year of 2021 primarily due to higher natural gas
costs.
Natural Gas Prices in Cost of Production
Three Months Ended December
31
Twelve Months Ended December
31
(US dollars per MMBtu, except as otherwise
noted)
2021
2020
% Change
2021
2020
% Change
Overall gas cost excluding realized
derivative impact
6.43
2.71
137
4.60
2.31
99
Realized derivative impact
(0.03)
0.03
n/m
0.01
0.05
(80)
Overall gas cost
6.40
2.74
134
4.61
2.36
95
Average NYMEX
5.83
2.66
119
3.84
2.08
85
Average AECO
3.93
2.10
87
2.84
1.68
69
- Natural gas prices in our cost of production
increased in the fourth quarter and full year of 2021 as a result
of higher North American gas index prices and increased gas costs
in Trinidad, where our gas prices are linked to ammonia benchmark
prices.
Phosphate
Three Months Ended December
31
(millions of US dollars, except
Dollars
Tonnes (thousands)
Average per Tonne
as otherwise noted)
2021
2020
% Change
2021
2020
% Change
2021
2020
% Change
Manufactured product
Net sales
Fertilizer
377
180
109
509
466
9
741
387
91
Industrial and feed
155
100
55
202
182
11
766
551
39
532
280
90
711
648
10
749
433
73
Cost of goods sold
374
265
41
526
410
28
Gross margin - manufactured
158
15
953
223
23
870
Gross margin – other 1
5
1
400
Depreciation and amortization
55
60
(9)
Gross margin – total
163
16
919
Gross margin excluding depreciation
Expenses
10
(8)
n/m
and amortization – manufactured 3
278
83
234
EBIT
153
24
538
Depreciation and amortization
39
39
‐
EBITDA
192
63
205
Adjustments 2
4
‐
n/m
Adjusted EBITDA
196
63
211
1 Includes other phosphate and purchased
products and comprises net sales of $61 million (2020 – $40
million) less cost of goods sold of $56 million (2020 – $39
million).
2 See Note 2 to the unaudited condensed
consolidated financial statements.
3 This is a non-IFRS financial measure.
See the "Non-IFRS Financial Measures" section.
Twelve Months Ended December
31
(millions of US dollars, except
Dollars
Tonnes (thousands)
Average per Tonne
as otherwise noted)
2021
2020
% Change
2021
2020
% Change
2021
2020
% Change
Manufactured product
Net sales
Fertilizer
1,108
671
65
1,840
2,048
(10)
602
328
84
Industrial and feed
520
404
29
779
733
6
667
552
21
1,628
1,075
51
2,619
2,781
(6)
622
387
61
Cost of goods sold
1,227
1,044
18
469
376
25
Gross margin – manufactured
401
31
n/m
153
11
n/m
Gross margin – other 1
20
5
300
Depreciation and amortization
58
78
(26)
Gross margin – total
421
36
n/m
Gross margin excluding depreciation
Expenses
36
791
(95)
and amortization – manufactured
211
89
136
EBIT
385
(755)
n/m
Depreciation and amortization
151
218
(31)
EBITDA
536
(537)
n/m
Adjustments 2
4
769
(99)
Adjusted EBITDA
540
232
133
1 Includes other phosphate and purchased
products and comprises net sales of $201 million (2020 – $127
million) less cost of goods sold of $181 million (2020 – $122
million).
2 See Note 2 to the unaudited condensed
consolidated financial statements.
- Adjusted EBITDA increased in the fourth quarter and full
year of 2021 due to higher net realized selling prices, which more
than offset higher raw material costs and lower sales volumes for
the full year.
- Sales volumes increased in the fourth quarter of 2021
due to the timing and sales mix of certain fertilizer products and
higher operating rates. Lower inventory levels at the beginning of
2021 and a greater mix of higher P2O5 content sales resulted in
slightly lower sales volumes during the full year of 2021. P2O5
production increased in the fourth quarter and full year of 2021
due to improved reliability at our Aurora and White Springs
plants.
- Net realized selling price increased in the fourth
quarter and full year of 2021 as a result of robust global
phosphate demand, tight inventories and higher global raw material
costs. Industrial and feed prices increased to a lesser extent than
fertilizer in both comparative periods due to a lag in price
realizations relative to spot prices.
- Cost of goods sold per tonne increased in the fourth
quarter and full year of 2021 primarily due to significantly higher
raw material input costs which more than offset lower depreciation
and amortization. Comparative results for the full year of 2020
were also impacted by a $46 million favorable change in estimate
related to an asset retirement obligation recorded in the second
quarter of 2020.
Corporate and Others
(millions of US dollars, except as
otherwise
Three Months Ended December
31
Twelve Months Ended December
31
noted)
2021
2020
% Change
2021
2020
% Change
Sales 1
‐
12
(100)
‐
82
(100)
Cost of goods sold
‐
11
(100)
‐
74
(100)
Gross margin
‐
1
(100)
‐
8
(100)
Selling expenses
3
(7)
n/m
(21)
(24)
(13)
General and administrative expenses
93
78
19
275
269
2
Share-based compensation expense
73
60
22
198
69
187
Impairment of assets
‐
‐
‐
‐
5
(100)
Other expenses
112
76
47
253
230
10
EBIT
(281)
(206)
36
(705)
(541)
30
Depreciation and amortization
15
11
36
49
52
(6)
EBITDA
(266)
(195)
36
(656)
(489)
34
Adjustments 2
116
111
5
348
203
71
Adjusted EBITDA
(150)
(84)
79
(308)
(286)
8
1 Primarily relates to our non-core
Canadian business that was sold in 2020.
2 See Note 2 to the unaudited condensed
consolidated financial statements.
- Share-based compensation expense was higher in the
fourth quarter and full year of 2021 compared to the same periods
in 2020 due to an increase in our share price resulting in a higher
value of share-based awards outstanding.
- Other expenses were higher in the fourth quarter and
full year of 2021 compared to the same periods in 2020 due to
higher foreign exchange losses, higher expense related to asset
retirement obligations and accrued environment costs for our
non-operating sites from changes in our cost and discount rate
estimates, and additional cloud computing related expenses
recognized in the first half of 2021 due to our change in
accounting policy. This was partially offset by lower integration
and restructuring related costs.
Eliminations
Eliminations of gross margin between operating segments for the
full year of 2021 were $(89) million compared to a $21 million
gross margin recovery for the same period in 2020. We had
significant eliminations in 2021 due to higher-margin inventories
held by our Retail segment as global commodity benchmark prices
increased. Eliminations are not part of the Corporate and Others
segment.
Finance Costs, Income Tax Expense (Recovery) and Other
Comprehensive Income
(millions of US dollars, except as
otherwise
Three Months Ended December
31
Twelve Months Ended December
31
noted)
2021
2020
% Change
2021
2020
% Change
Finance costs
246
119
107
613
520
18
Income tax expense (recovery)
374
(32)
n/m
989
(77)
n/m
Other comprehensive income
72
280
(74)
78
194
(60)
- Finance costs in the fourth quarter and full year of
2021 were higher compared to the same periods in 2020 mainly due to
a loss of $142 million on early extinguishment of long-term debt,
which primarily represents interest that we would have paid in
future years if the long-term debt was not extinguished.
- Income tax expense in the fourth quarter and full year
of 2021 was higher as a result of significantly higher earnings in
2021 compared to the same periods in 2020. In addition, in 2020,
discrete tax recoveries of $80 million primarily related to
recoveries of prior year taxes due to US legislative changes.
- Other comprehensive income is primarily driven by
changes in the currency translation of our foreign operations and
share price movement of our investment in Sinofert Holdings Ltd. In
2020, we had a higher gain on translation of our Retail operations
in Australia as the Australian dollar strengthened relative to the
US dollar. In 2021, the Australian dollar weakened relative to the
US dollar resulting in lower other comprehensive income.
Forward-Looking Statements
Certain statements and other information included in this
document, including within the "Financial Outlook and Guidance"
section, constitute “forward-looking information” or
“forward-looking statements” (collectively, “forward-looking
statements”) under applicable securities laws (such statements are
often accompanied by words such as “anticipate”, “forecast”,
“expect”, “believe”, “may”, “will”, “should”, “estimate”, “intend”
or other similar words). All statements in this document, other
than those relating to historical information or current
conditions, are forward-looking statements, including, but not
limited to: Nutrien's business strategies, plans, prospects and
opportunities; Nutrien's 2022 full-year guidance, including
expectations regarding our adjusted net earnings per share and
adjusted EBITDA (consolidated and by segment); expectations
regarding our growth and capital allocation intentions and
strategies; capital spending expectations for 2022; expectations
regarding performance of our operating segments in 2022, including
our operating segment market outlooks and market conditions for
2022, and the anticipated supply and demand for our products and
services, expected market and industry conditions with respect to
crop nutrient application rates, planted acres, grower crop
investment, crop mix, prices and the impact of import and export
volumes and economic sanctions; Nutrien's ability to develop
innovative and sustainable solutions; the negotiation of sales
contracts; expected benefits from our brownfield expansion
projects; and acquisitions and divestitures. These forward-looking
statements are subject to a number of assumptions, risks and
uncertainties, many of which are beyond our control, which could
cause actual results to differ materially from such forward-looking
statements. As such, undue reliance should not be placed on these
forward-looking statements.
All of the forward-looking statements are qualified by the
assumptions that are stated or inherent in such forward-looking
statements, including the assumptions referred to below and
elsewhere in this document. Although we believe that these
assumptions are reasonable, having regard to our experience and our
perception of historical trends, this list is not exhaustive of the
factors that may affect any of the forward-looking statements and
the reader should not place undue reliance on these assumptions and
such forward-looking statements. Current conditions, economic and
otherwise, render assumptions, although reasonable when made,
subject to greater uncertainty. The additional key assumptions that
have been made include, among other things, assumptions with
respect to our ability to successfully complete, integrate and
realize the anticipated benefits of our already completed and
future acquisitions and divestitures, and that we will be able to
implement our standards, controls, procedures and policies in
respect of any acquired businesses and to realize the expected
synergies; that future business, regulatory and industry conditions
will be within the parameters expected by us, including with
respect to prices, margins, demand, supply, product availability,
supplier agreements, availability and cost of labor and interest,
exchange and effective tax rates; assumptions with respect to
global economic conditions and the accuracy of our market outlook
expectations for 2022 and in the future; our expectations regarding
the impacts, direct and indirect, of the COVID-19 pandemic on our
business, customers, business partners, employees, supply chain,
other stakeholders and the overall economy; 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 contracts; and
our ability to successfully implement new initiatives and
programs.
Events or circumstances that could cause actual results to
differ materially from those in the forward-looking statements
include, but are not limited to: general global economic, market
and business conditions; failure to complete announced and future
acquisitions or divestitures at all or on the expected terms and
within the expected timeline; climate change and weather
conditions, including impacts from regional flooding and/or drought
conditions; crop planted acreage, yield and prices; the supply and
demand and price levels for our products; governmental and
regulatory requirements and actions by governmental authorities,
including changes in government policy (including tariffs, trade
restrictions and climate change initiatives), government ownership
requirements, changes in environmental, tax and other laws or
regulations and the interpretation thereof; political risks,
including civil unrest, actions by armed groups or conflict and
malicious acts including terrorism; the occurrence of a major
environmental or safety incident; innovation and cybersecurity
risks related to our systems, including our costs of addressing or
mitigating such risks; counterparty and sovereign risk; delays in
completion of turnarounds at our major facilities; interruptions of
or constraints in availability of key inputs, including natural gas
and sulfur; any significant impairment of the carrying amount of
certain assets; risks related to reputational loss; certain
complications that may arise in our mining processes; the ability
to attract, engage and retain skilled employees and strikes or
other forms of work stoppages; the COVID-19 pandemic, including
variants of the COVID-19 virus and the efficiency and distribution
of vaccines, and its resulting effects on economic conditions,
restrictions imposed by public health authorities or governments,
including government-imposed vaccine mandates, fiscal and monetary
responses by governments and financial institutions and disruptions
to global supply chains; and other risk factors detailed from time
to time in Nutrien reports filed with the Canadian securities
regulators and the Securities Exchange Commission in the United
States.
The purpose of our adjusted net earnings per share, adjusted
EBITDA (consolidated and by segment) and sustaining 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 & 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 and Definitions” section of our
2020 Annual Report. All references to per share amounts pertain to
diluted net earnings (loss) per share, “n/m” indicates information
that is not meaningful, and all financial amounts are stated in
millions of US dollars, unless otherwise noted.
About Nutrien
Nutrien is the world's largest provider of crop inputs and
services, playing a critical role in helping growers increase food
production in a sustainable manner. We produce and distribute
approximately 27 million tonnes of potash, nitrogen and phosphate
products world-wide. With this capability and our leading
agriculture retail network, we are well positioned to supply the
needs of our customers. We operate with a long-term view and are
committed to working with our stakeholders as we address our
economic, environmental and social priorities. The scale and
diversity of our integrated portfolio provides a stable earnings
base, multiple avenues for growth and the opportunity to return
capital to shareholders.
Selected financial data for download can be found in our data
tool at www.nutrien.com/investors/interactive-datatool
Such data is not incorporated by reference herein.
Nutrien will host a Conference Call on Thursday, February 17,
2022 at 10:00 am Eastern Time.
- In order to expedite access to our conference call, each
participant will be required to pre-register for the event:
- Online:
http://www.directeventreg.com/registration/event/3664097.
- Via Phone: 1-888-869-1189 Conference ID 3664097.
- Once the registration is complete, a confirmation will be sent
providing the dial in number and both the Direct Event Passcode and
your unique Registrant ID to join this call. For security reasons,
please do not share your information with anyone else.
- Live Audio Webcast: Visit
http://www.nutrien.com/investors/events/2021-q4-earnings-conference-call
Appendix A - Selected Additional Financial Data
Selected Retail measures
Three Months Ended December
31
Twelve Months Ended December
31
2021
2020
2021
2020
Proprietary products margin as a
percentage of product line margin (%)
Crop
nutrients
12
14
21
25
Crop
protection products
14
11
34
32
Seed
39
37
44
46
All
products
11
11
23
23
Crop nutrients sales volumes (tonnes –
thousands)
North
America
2,119
2,063
9,848
9,746
International
702
622
3,535
2,986
Total
2,821
2,685
13,383
12,732
Crop nutrients selling price per
tonne
North
America
725
413
556
421
International
708
413
512
367
Total
721
413
545
408
Crop nutrients gross margin per
tonne
North
America
154
89
133
99
International
144
85
82
55
Total
152
88
119
89
Financial performance measures
2021
2020
Retail
adjusted EBITDA margin (%) 1, 2
11
10
Retail
adjusted EBITDA per US selling location (thousands of US dollars)
1, 2, 3
1,481
1,075
Retail
adjusted average working capital to sales (%) 1, 3
13
15
Retail
adjusted average working capital to sales excluding Nutrien
Financial (%) 1, 4
‐
5
Nutrien
Financial adjusted net interest margin (%) 1, 4
6.6
5.3
Retail
cash operating coverage ratio (%) 1, 4
58
62
Retail
normalized comparable store sales (%) 4
7
6
1
Rolling four quarters ended December 31, 2021 and 2020.
2 These
are supplementary financial measures. See the “Other Financial
Measures" section.
3
Excluding acquisitions.
4 These
are non-IFRS financial measures. See the "Non-IFRS Financial
Measures" section.
Nutrien Financial
As at December 31,
2021
(millions of US dollars)
Current
<31 days past due
31–90 days past due
>90 days past due
Gross Receivables
Allowance 1
Net Receivables
North
America
1,410
45
12
47
1,514
(26)
1,488
International
537
47
26
54
664
(2)
662
Nutrien
Financial receivables
1,947
92
38
101
2,178
(28)
2,150
1 Bad
debt expense on the above receivables for the twelve months ended
December 31, 2021 was $10 million (2020 – $26 million) in the
Retail segment.
2 Gross
receivables include $1,792 million (2020 – $1,147 million) very low
risk of default and $386 million (2020 – $270 million) of low risk
of default.
Selected Nitrogen measures
Three Months Ended December
31
Twelve Months Ended December
31
2021
2020
2021
2020
Sales volumes (tonnes –
thousands)
Fertilizer
1,578
1,740
6,028
6,750
Industrial and feed
1,257
1,105
4,697
4,216
Net sales (millions of US
dollars)
Fertilizer
861
359
2,364
1,467
Industrial and feed
595
196
1,620
755
Net selling price per tonne
Fertilizer
545
206
392
217
Industrial and feed
473
178
345
179
Production measures
Three Months Ended December
31
Twelve Months Ended December
31
2021
2020
2021
2020
Potash
production (Product tonnes – thousands)
3,641
2,784
13,790
12,595
Potash
shutdown weeks 1
‐
‐
14
38
Ammonia
production – total 2
1,641
1,584
5,996
6,063
Ammonia
production – adjusted 2, 3
1,069
1,035
3,932
4,102
Ammonia
operating rate (%) 3
97
94
90
93
P2O5
production (P2O5 tonnes – thousands)
409
361
1,518
1,444
P2O5
operating rate (%)
95
84
89
85
1
Represents weeks of full production shutdown, excluding the impact
of any periods of reduced operating rates and planned routine
annual maintenance shutdowns and announced workforce
reductions.
2 All
figures are provided on a gross production basis in thousands of
product tonnes.
3
Excludes Trinidad and Joffre.
Appendix B - Non-IFRS Financial Measures
We use both International Financial Reporting Standards (“IFRS”)
and certain non-IFRS financial measures to assess performance.
Non-IFRS financial measures are financial measures disclosed by a
company that (a) depict historical or expected future financial
performance, financial position or cash flow of a company, (b) with
respect to their composition, exclude amounts that are included in,
or include amounts that are excluded from, the composition of the
most directly comparable financial measure disclosed in the primary
financial statements of the company, (c) are not disclosed in the
financial statements of the company and (d) are not a ratio,
fraction, percentage or similar representation. Non-IFRS ratios are
financial measures disclosed by a company that are in the form of a
ratio, fraction, percentage or similar representation that has a
non-IFRS financial measure as one or more of its components, and
that are not disclosed in the financial statements of the
company.
These non-IFRS financial measures and non-IFRS ratios are not
standardized financial measures under IFRS and, therefore, are
unlikely to be comparable to similar financial measures presented
by other companies. Management believes these non-IFRS financial
measures and non-IFRS ratios provide transparent and useful
supplemental information to help investors evaluate our financial
performance, financial condition and liquidity using the same
measures as management. These non-IFRS financial measures and
non-IFRS ratios should not be considered as a substitute for, or
superior to, measures of financial performance prepared in
accordance with IFRS.
The following section outlines our non-IFRS financial measures
and non-IFRS ratios, their compositions, and why management uses
each measure. It includes reconciliations to the most directly
comparable IFRS measures. Except as otherwise described herein, our
non-IFRS financial measures and non-IFRS ratios are calculated on a
consistent basis from period to period and are adjusted for
specific items in each period, as applicable. As additional
non-recurring or unusual items arise in the future, we generally
exclude these items in our calculations.
Adjusted EBITDA (Consolidated)
Most directly comparable IFRS financial measure: Net
earnings (loss).
Definition: Adjusted EBITDA is calculated as net earnings
(loss) before finance costs, income taxes, depreciation and
amortization, share-based compensation and certain foreign exchange
gain/loss (net of related derivatives). We also adjust this measure
for the following other income and expenses that are excluded when
management evaluates the performance of our day-to-day operations:
integration and restructuring related costs, impairment or reversal
of impairment of assets, COVID-19 related expenses, gain or loss on
disposal of certain businesses and investments, and IFRS adoption
transition adjustments. In 2021, we amended our calculation of
adjusted EBITDA to adjust for the impact of integration and
restructuring related costs and cloud computing transition
adjustment. There were no similar expenses in the comparative
period.
Why we use the measure and why it is useful to investors:
It is not impacted by long-term investment and financing decisions,
but rather focuses on the performance of our day-to-day operations.
It provides a measure of our ability to service debt and to meet
other payment obligations and as a component of employee
remuneration calculations.
Three Months Ended December
31
Twelve Months Ended December
31
(millions of US dollars)
2021
2020
2021
2020
Net earnings
1,207
316
3,179
459
Finance costs
246
119
613
520
Income tax expense (recovery)
374
(32)
989
(77)
Depreciation and amortization
497
499
1,951
1,989
EBITDA 1
2,324
902
6,732
2,891
Share-based compensation expense
73
60
198
69
Foreign exchange loss, net of related
derivatives
38
15
39
19
Integration and restructuring related
(recovery) costs
(4)
22
43
60
Impairment of assets
21
1
33
824
COVID-19 related expenses 2
11
18
45
48
Loss on disposal of business
‐
‐
‐
6
Net gain on disposal of investment in
MOPCO
‐
(250)
‐
(250)
Cloud computing transition adjustment
3
‐
‐
36
‐
Adjusted EBITDA
2,463
768
7,126
3,667
1 EBITDA is calculated as net earnings
(loss) before finance costs, income taxes, and depreciation and
amortization.
2 COVID-19 related expenses primarily
consist of increased cleaning and sanitization costs, the purchase
of personal protective equipment, discretionary supplemental
employee costs, and costs related to construction delays from
access limitations and other government restrictions.
3 Cloud computing transition adjustment
relates to cloud computing costs in prior years that no longer
qualify for capitalization based on an agenda decision issued by
the IFRS Interpretations Committee in April 2021.
Adjusted Net Earnings and Adjusted Net Earnings Per
Share
Most directly comparable IFRS financial measure: Net
earnings (loss) and net earnings (loss) per share.
Definition: Adjusted net earnings and related per share
information are calculated as net earnings (loss) before
share-based compensation and certain foreign exchange gain/loss
(net of related derivatives), net of tax. We also adjust this
measure for the following other income and expenses (net of tax)
that are excluded when management evaluates the performance of our
day-to-day operations: certain integration and restructuring
related costs, impairment or reversal of impairment of assets,
COVID-19 related expenses (including those recorded under finance
costs), gain or loss on disposal of certain businesses and
investments, IFRS adoption transition adjustments and gain/loss on
early extinguishment of debt. We generally apply the annual
forecasted effective tax rate to our adjustments during the year
and, at year-end, we apply the actual effective tax rate. If the
effective tax rate is significantly different from our forecasted
effective tax rate due to adjustments or discrete tax impacts, we
apply a tax rate that excludes those items. For material
adjustments, we apply a tax rate specific to the adjustment. In
2021, we amended our calculation of adjusted net earnings to adjust
for the impact of integration and restructuring related costs,
cloud computing transition adjustment, and gain/loss on early
extinguishment of debt. There were no similar expenses in the
comparative period.
Why we use the measure and why it is useful to investors:
Focuses on the performance of our day-to-day operations and is used
as a component of employee remuneration calculations.
Three Months Ended December
31, 2021
Twelve Months Ended December
31, 2021
Per
Per
(millions of US dollars, except as
otherwise
Increases
Diluted
Increases
Diluted
noted)
(Decreases)
Post-Tax
Share
(Decreases)
Post-Tax
Share
Net earnings attributable to equity
holders of Nutrien
1,201
2.11
3,153
5.52
Adjustments:
Share-based compensation expense
73
56
0.10
198
151
0.27
Foreign exchange loss, net of related
derivatives
38
29
0.05
39
30
0.05
Integration and restructuring related
(recovery) costs
(4)
(3)
(0.01)
43
33
0.06
Impairment of assets
21
16
0.03
33
25
0.04
COVID-19 related expenses
11
8
0.01
45
34
0.06
Cloud computing transition adjustment
‐
‐
‐
36
27
0.05
Loss on early extinguishment of debt
142
104
0.18
142
104
0.18
Adjusted net earnings
1,411
2.47
3,557
6.23
Three Months Ended December 31,
2020
Twelve Months Ended December 31,
2020
Per
Per
(millions of US dollars, except as
otherwise
Increases
Diluted
Increases
Diluted
noted)
(Decreases)
Post-Tax
Share
(Decreases)
Post-Tax
Share
Net earnings attributable to equity
holders of Nutrien
316
0.55
459
0.81
Adjustments:
Share-based compensation expense
60
36
0.06
69
50
0.09
Foreign exchange loss, net of related
derivatives
15
9
0.02
19
14
0.02
Integration and restructuring related
costs
22
13
0.03
60
44
0.08
Impairment of assets
1
1
‐
824
657
1.15
COVID-19 related expenses
22
13
0.02
67
49
0.09
Loss on disposal of business
‐
‐
‐
6
4
‐
Net gain on disposal of investment in
MOPCO
(250)
(250)
(0.44)
(250)
(250)
(0.44)
Adjusted net earnings
138
0.24
1,027
1.80
Adjusted EBITDA (Consolidated) and Adjusted Net Earnings Per
Share Guidance
Adjusted EBITDA and adjusted
net earnings per share guidance are forward-looking non-IFRS
financial measures. We do not provide a reconciliation of such
forward-looking measures to the most directly comparable financial
measures calculated and presented in accordance with IFRS due to
unknown variables and the uncertainty related to future results.
These unknown variables may include unpredictable transactions of
significant value that may be inherently difficult to determine
without unreasonable efforts. Guidance for adjusted EBITDA and
adjusted net earnings per share excludes the impacts of share-based
compensation, certain foreign exchange gain/loss (net of related
derivatives), integration and restructuring related costs,
impairment or reversal of impairment of assets, COVID-19 related
expenses (including those recorded under finance costs), gain or
loss on disposal of certain businesses and investments, IFRS
adoption transition adjustments, and gain/loss on early
extinguishment of debt.
Free Cash Flow and Free Cash Flow Including Changes in
Non-Cash Operating Working Capital
Most directly comparable IFRS financial measure: Cash
provided by (used in) operating activities.
Definition: Free cash flow is calculated as cash provided
by (used in) operating activities less sustaining capital
expenditures and before changes in non-cash operating working
capital. Free cash flow including non-cash operating working
capital is calculated as cash provided by operating activities less
sustaining capital expenditures.
Why we use the measure and why it is useful to investors:
For evaluation of liquidity and financial strength. These are also
useful as indicators of our ability to service debt, meet other
payment obligations and make strategic investments. These do not
represent residual cash flow available for discretionary
expenditures.
Three Months Ended December
31
Twelve Months Ended December
31
(millions of US dollars)
2021
2020
2021
2020
Cash provided by operating activities
3,637
2,778
3,886
3,323
Sustaining capital expenditures
(454)
(408)
(1,247)
(919)
Free cash flow including changes in
non-cash operating working capital
3,183
2,370
2,639
2,404
Changes in non-cash operating working
capital
1,634
2,174
(1,661)
574
Free cash flow
1,549
196
4,300
1,830
Gross Margin Excluding Depreciation and Amortization Per
Tonne - Manufactured
Most directly comparable IFRS financial measure: Gross
margin.
Definition: Gross margin per tonne from manufactured
products per tonne less depreciation and amortization per tonne.
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 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 for the period excluding
depreciation and amortization expense and inventory and other
adjustments divided by the production tonnes for the period.
Why we use the measure and why it is useful to investors:
To assess operational performance. Potash cash COPM excludes the
effects of production from other periods and long-term investment
decisions, supporting a focus on the performance of our day-to-day
operations.
Three Months Ended December
31
Twelve Months Ended December
31
(millions of US dollars, except as
otherwise noted)
2021
2020
2021
2020
Total COGS – Potash
305
305
1,285
1,183
Change in inventory
64
18
22
(10)
Other adjustments 1
1
(7)
(6)
(12)
COPM
370
316
1,301
1,161
Depreciation and amortization included in
COPM
(115)
(119)
(430)
(424)
Cash COPM
255
197
871
737
Production tonnes (tonnes – thousands)
3,641
2,784
13,790
12,595
Potash cash COPM per tonne
70
71
63
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.
Ammonia Controllable Cash COPM Per Tonne
Most directly comparable IFRS financial measure: Total
manufactured COGS for the Nitrogen segment.
Definition: The total of COGS for the Nitrogen segment
excluding depreciation and amortization expense included in COGS,
cash COGS for products other than ammonia, other adjustments, and
natural gas and steam costs, divided by net ammonia production
tonnes.
Why we use the measure and why it is useful to investors:
To assess operational performance. Ammonia controllable cash COPM
excludes the effects of production from other periods, the costs of
natural gas and steam, and long-term investment decisions,
supporting a focus on the performance of our day-to-day
operations.
Three Months Ended December
31
Twelve Months Ended December
31
(millions of US dollars, except as
otherwise noted)
2021
2020
2021
2020
Total Manufactured COGS – Nitrogen
725
460
2,353
1,804
Total Other COGS – Nitrogen
170
97
610
461
Total COGS – Nitrogen
895
557
2,963
2,265
Depreciation and amortization in COGS
(126)
(127)
(473)
(522)
Cash COGS for products other than
ammonia
(519)
(325)
(1,740)
(1,342)
Ammonia
Total cash COGS before other
adjustments
250
105
750
401
Other adjustments 1
(30)
(6)
(96)
(52)
Total cash COPM
220
99
654
349
Natural gas and steam costs
(186)
(71)
(515)
(235)
Controllable cash COPM
34
28
139
114
Production tonnes (net tonnes 2 –
thousands)
758
704
2,769
2,649
Ammonia controllable cash COPM per
tonne
45
40
50
43
1 Other adjustments include unallocated
production overhead that is recognized as part of cost of goods
sold but is not included in the measurement of inventory and
changes in inventory balances.
2 Ammonia tonnes available for sale, as
not upgraded to other Nitrogen products.
Retail Adjusted Average Working Capital to Sales and Retail
Adjusted Average Working Capital to Sales Excluding Nutrien
Financial
Definition: Retail adjusted average working capital
divided by Retail adjusted sales for the last four rolling
quarters. We exclude in our calculations the working capital and
sales of certain acquisitions (such as Ruralco Holdings Limited)
during the first year following the acquisition. We also look at
this metric excluding the sales and working capital of Nutrien
Financial.
Why we use the measure and why it is useful to investors:
To evaluate operational efficiency. A lower or higher percentage
represents increased or decreased efficiency, respectively. The
metric excluding Nutrien Financial shows the impact that the
working capital of Nutrien Financial has on the ratio.
Rolling four quarters ended
December 31, 2021
(millions of US dollars, except as
otherwise noted)
Q1 2021
Q2 2021
Q3 2021
Q4 2021
Average/Total
Current assets
9,160
9,300
8,945
9,924
Current liabilities
(7,530)
(7,952)
(5,062)
(7,828)
Working capital
1,630
1,348
3,883
2,096
Working capital from certain recent
acquisitions
‐
‐
‐
‐
Adjusted working capital
1,630
1,348
3,883
2,096
2,239
Nutrien Financial working capital
(1,221)
(3,072)
(2,820)
(2,150)
Adjusted working capital excluding Nutrien
Financial
409
(1,724)
1,063
(54)
(77)
Sales
2,972
7,537
3,347
3,878
Sales from certain recent acquisitions
‐
‐
‐
‐
Adjusted sales
2,972
7,537
3,347
3,878
17,734
Nutrien Financial revenue
(25)
(59)
(54)
(51)
Adjusted sales excluding Nutrien
Financial
2,947
7,478
3,293
3,827
17,545
Adjusted average working capital to
sales (%)
13
Adjusted average working capital to
sales excluding Nutrien Financial (%)
‐
Rolling four quarters ended
December 31, 2020
(millions of US dollars, except as
otherwise noted)
Q1 2020
Q2 2020
Q3 2020
Q4 2020
Average/Total
Current assets
8,423
8,230
7,324
8,013
Current liabilities
(6,135)
(6,200)
(4,108)
(6,856)
Working capital
2,288
2,030
3,216
1,157
Working capital from certain recent
acquisitions
(108)
63
‐
‐
Adjusted working capital
2,180
2,093
3,216
1,157
2,162
Nutrien Financial working capital
(795)
(2,108)
(1,711)
(1,392)
Adjusted working capital excluding Nutrien
Financial
1,385
(15)
1,505
(235)
660
Sales
2,661
6,764
2,742
2,618
Sales from certain recent acquisitions
(348)
(338)
‐
‐
Adjusted sales
2,313
6,426
2,742
2,618
14,099
Nutrien Financial revenue
(16)
(40)
(36)
(37)
Adjusted sales excluding Nutrien
Financial
2,297
6,386
2,706
2,581
13,970
Adjusted average working capital to sales
(%)
15
Adjusted average working capital to sales
excluding Nutrien Financial (%)
5
Nutrien Financial Adjusted Net Interest Margin
Definition: Nutrien Financial revenue less deemed
interest expense divided by average Nutrien Financial receivables
outstanding for the last four rolling quarters.
Why we use the measure and why it is useful to investors:
Used by credit rating agencies and other users to evaluate
financial performance of Nutrien Financial.
Rolling four quarters ended
December 31, 2021
(millions of US dollars, except as
otherwise noted)
Q1 2021
Q2 2021
Q3 2021
Q4 2021
Total/Average
Nutrien Financial revenue
25
59
54
51
Deemed interest expense 1
(6)
(8)
(10)
(12)
Net interest
19
51
44
39
153
Average Nutrien Financial receivables
1,221
3,072
2,820
2,150
2,316
Nutrien Financial adjusted net interest
margin (%)
6.6
1 Average borrowing rate applied to the
notional debt required to fund the portfolio of receivables from
customers monitored and serviced by Nutrien Financial.
Rolling four quarters ended
December 31, 2020
(millions of US dollars, except as
otherwise noted)
Q1 2020
Q2 2020
Q3 2020
Q4 2020
Total/Average
Nutrien Financial revenue
16
40
36
37
Deemed interest expense 1
(5)
(15)
(15)
(14)
Net interest
11
25
21
23
80
Average Nutrien Financial receivables
795
2,108
1,711
1,392
1,502
Nutrien Financial adjusted net interest
margin (%)
5.3
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, excluding depreciation and amortization
expense, divided by Retail gross margin excluding depreciation and
amortization expense in cost of goods sold, for the last four
rolling quarters.
Why we use the measure and why it is useful to investors:
To understand the costs and underlying economics of our Retail
operations and to assess our Retail operating performance and
ability to generate free cash flow.
Rolling four quarters ended
December 31, 2021
(millions of US dollars, except as
otherwise noted)
Q1 2021
Q2 2021
Q3 2021
Q4 2021
Total
Selling expenses
667
863
746
848
3,124
General and administrative expenses
39
41
45
43
168
Other expenses
15
34
17
20
86
Operating expenses
721
938
808
911
3,378
Depreciation and amortization in operating
expenses
(175)
(166)
(180)
(173)
(694)
Operating expenses excluding depreciation
and amortization
546
772
628
738
2,684
Gross margin
652
1,858
917
1,173
4,600
Depreciation and amortization in cost of
goods sold
2
3
2
5
12
Gross margin excluding depreciation and
amortization
654
1,861
919
1,178
4,612
Cash operating coverage ratio (%)
58
Rolling four quarters ended
December 31, 2020
(millions of US dollars, except as
otherwise noted)
Q1 2020
Q2 2020
Q3 2020
Q4 2020
Total
Selling expenses
635
764
669
727
2,795
General and administrative expenses
38
30
34
33
135
Other expenses (income)
16
32
(12)
8
44
Operating expenses
689
826
691
768
2,974
Depreciation and amortization in operating
expenses
(153)
(161)
(167)
(177)
(658)
Operating expenses excluding depreciation
and amortization
536
665
524
591
2,316
Gross margin
541
1,627
683
885
3,736
Depreciation and amortization in cost of
goods sold
2
2
3
3
10
Gross margin excluding depreciation and
amortization
543
1,629
686
888
3,746
Cash operating coverage ratio (%)
62
Retail Normalized Comparable Store Sales
Most directly comparable IFRS financial measure: Retail
sales from comparable base as a component of total Retail
sales.
Definition: Prior year comparable store sales adjusted
for published potash, nitrogen and phosphate benchmark prices and
foreign exchange rates used in the current year. We retain sales of
closed locations in the comparable base if the closed location is
in close proximity to an existing location, unless we plan to exit
the market area or are unable to economically or logistically serve
it. We do not adjust for temporary closures, expansions or
renovations of stores.
Why we use the measure and why it is useful to investors:
To evaluate sales growth by adjusting for fluctuations in commodity
prices and foreign exchange rates. Includes locations we have owned
for more than 12 months.
Twelve Months Ended December
31
(millions of US dollars, except as
otherwise noted)
2021
2020
Sales from comparable base
Prior period
14,785
13,282
Adjustments 1
(476)
‐
Revised prior period
14,309
13,282
Current period
17,511
13,546
Comparable store sales (%)
22
2
Prior period normalized for benchmark
prices and foreign exchange rates
16,350
12,784
Normalized comparable store sales (%)
7
6
1 Adjustments relate to prior period sales
related to closed locations or businesses that no longer exist in
the current period in order to provide a comparable base in our
calculation.
Appendix C – Other Financial Measures
Supplementary Financial Measures
Supplementary financial measures are financial measures
disclosed by a company that (a) are, or are intended to be,
disclosed on a periodic basis to depict the historical or expected
future financial performance, financial position or cash flow of a
company, (b) are not disclosed in the financial statements of the
company, (c) are not non-IFRS financial measures, and (d) are not
non-IFRS ratios.
The following section provides an explanation of the composition
of those supplementary financial measures if not previously
provided.
Retail adjusted EBITDA margin: Retail adjusted EBITDA divided by Retail
sales for the last four rolling quarters.
Retail digital platform sales: Grower and employee sales in North America
entered directly into the digital platform.
Retail digital platform sales to total sales:
Grower and employee sales in
North America entered directly into the digital platform as a
percentage of total sales in North America.
Sustaining capital expenditures: Represents capital expenditures that are
required to sustain operations at existing levels and include major
repairs and maintenance and plant turnarounds.
Retail adjusted EBITDA per US selling location:
Calculated as total Retail US adjusted EBITDA for the last four
rolling quarters, representing the organic EBITDA component, which
excludes acquisitions in those quarters, divided by the number of
US locations that have generated sales in the last four rolling
quarters, adjusted for acquired locations in those quarters.
Condensed Consolidated Financial Statements
Unaudited in millions of US dollars except as otherwise
noted
Condensed Consolidated Statements of Earnings
Three Months Ended
Twelve Months Ended
December 31
December 31
Note
2021
2020
2021
2020
SALES
2
7,267
4,052
27,712
20,908
Freight, transportation and
distribution
198
202
851
855
Cost of goods sold
3,863
2,685
17,452
14,814
GROSS MARGIN
3,206
1,165
9,409
5,239
Selling expenses
855
732
3,142
2,813
General and administrative expenses
148
117
477
429
Provincial mining taxes
173
41
466
204
Share-based compensation expense
73
60
198
69
Impairment of assets
21
1
33
824
Other expenses (income)
3
109
(189)
312
(2)
EARNINGS BEFORE FINANCE COSTS AND
INCOME TAXES
1,827
403
4,781
902
Finance costs
246
119
613
520
EARNINGS BEFORE INCOME TAXES
1,581
284
4,168
382
Income tax expense (recovery)
374
(32)
989
(77)
NET EARNINGS
1,207
316
3,179
459
Attributable to
Equity holders of Nutrien
1,201
316
3,153
459
Non-controlling interest
6
‐
26
‐
NET EARNINGS
1,207
316
3,179
459
NET EARNINGS PER SHARE ATTRIBUTABLE TO
EQUITY HOLDERS OF NUTRIEN ("EPS")
Basic
2.11
0.55
5.53
0.81
Diluted
2.11
0.55
5.52
0.81
Weighted average shares outstanding for
basic EPS
568,027,000
569,180,000
569,664,000
569,657,000
Weighted average shares outstanding for
diluted EPS
569,653,000
569,393,000
571,289,000
569,686,000
Condensed Consolidated Statements of Comprehensive
Income
Three Months Ended
Twelve Months Ended
December 31
December 31
(Net of related income taxes)
2021
2020
2021
2020
NET EARNINGS
1,207
316
3,179
459
Other comprehensive income
Items that will not be reclassified to net
earnings:
Net actuarial gain on defined benefit
plans
95
72
95
75
Net fair value (loss) gain on
investments
(35)
18
81
(7)
Items that have been or may be
subsequently reclassified to net earnings:
Gain (loss) on currency translation of
foreign operations
14
194
(115)
142
Other
(2)
(4)
17
(16)
OTHER COMPREHENSIVE INCOME
72
280
78
194
COMPREHENSIVE INCOME
1,279
596
3,257
653
Attributable to
Equity holders of Nutrien
1,273
596
3,232
653
Non-controlling interest
6
‐
25
‐
COMPREHENSIVE INCOME
1,279
596
3,257
653
(See Notes to the Condensed Consolidated
Financial Statements)
Condensed Consolidated Statements of Cash Flows
Three Months Ended
Twelve Months Ended
December 31
December 31
2021
2020
2021
2020
OPERATING ACTIVITIES
Net earnings
1,207
316
3,179
459
Adjustments for:
Depreciation and amortization
497
499
1,951
1,989
Share-based compensation expense
73
60
198
69
Impairment of assets
21
1
33
824
Loss on early extinguishment of debt
142
‐
142
‐
Net gain on disposal of investment in Misr
Fertilizers Production Company S.A.E. ("MOPCO")
‐
(250)
‐
(250)
Provision for (recovery of) deferred
income tax
66
90
(31)
(9)
Cloud computing transition adjustment
‐
‐
36
‐
Other long-term assets, liabilities and
miscellaneous
(3)
(112)
39
(333)
Cash from operations before working
capital changes
2,003
604
5,547
2,749
Changes in non-cash operating working
capital:
Receivables
1,432
1,600
(1,669)
145
Inventories
(1,652)
(1,068)
(1,459)
85
Prepaid expenses and other current
assets
(1,092)
(946)
(227)
(10)
Payables and accrued charges
2,946
2,588
1,694
354
CASH PROVIDED BY OPERATING
ACTIVITIES
3,637
2,778
3,886
3,323
INVESTING ACTIVITIES
Capital expenditures 1
(568)
(535)
(1,783)
(1,549)
Business acquisitions, net of cash
acquired
(18)
(17)
(88)
(233)
Proceeds from disposal of investment in
MOPCO
‐
540
‐
540
Other
121
17
64
38
CASH (USED IN) PROVIDED BY INVESTING
ACTIVITIES
(465)
5
(1,807)
(1,204)
FINANCING ACTIVITIES
Transaction costs related to debt
‐
‐
(7)
(15)
Proceeds from (repayment of) short-term
debt, net
307
(1,493)
1,344
(892)
Proceeds from long-term debt
(3)
21
86
1,541
Repayment of long-term debt
(2,207)
(2)
(2,212)
(509)
Repayment of principal portion of lease
liabilities
(78)
(71)
(320)
(274)
Dividends paid to Nutrien's
shareholders
(266)
(259)
(1,045)
(1,030)
Repurchase of common shares
(885)
‐
(1,035)
(160)
Issuance of common shares
12
‐
200
‐
Other
‐
‐
(14)
‐
CASH USED IN FINANCING
ACTIVITIES
(3,120)
(1,804)
(3,003)
(1,339)
EFFECT OF EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS
4
10
(31)
3
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS
56
989
(955)
783
CASH AND CASH EQUIVALENTS – BEGINNING
OF PERIOD
443
465
1,454
671
CASH AND CASH EQUIVALENTS – END OF
PERIOD
499
1,454
499
1,454
Cash and cash equivalents comprised
of:
Cash
428
1,375
428
1,375
Short-term investments
71
79
71
79
499
1,454
499
1,454
SUPPLEMENTAL CASH FLOWS
INFORMATION
Interest paid
172
164
491
498
Income taxes paid
79
64
435
156
Total cash outflow for leases
94
79
393
345
1 Includes additions to property, plant
and equipment and intangible assets for the three months ended
December 31, 2021 of $528 and $40 (2020 – $496 and $39),
respectively, and for the twelve months ended December 31, 2021 of
$1,676 and $107 (2020 – $1,423 and $126), respectively.
(See Notes to the Condensed Consolidated
Financial Statements)
Condensed Consolidated Statements of Changes in Shareholders’
Equity
Accumulated Other
Comprehensive
(Loss) Income ("AOCI")
Loss on
Equity
Currency
Holders
Non-
Number of
Translation
of
Controlling
Common
Share
Contributed
of Foreign
Total
Retained
Nutrien
Interest
Total
Shares
Capital
Surplus
Operations
Other
AOCI
Earnings
(Note 1)
(Note 1)
Equity
BALANCE – DECEMBER 31, 2019
572,942,809
15,771
248
(204)
(47)
(251)
7,101
22,869
38
22,907
Net earnings
‐
‐
‐
‐
‐
‐
459
459
‐
459
Other comprehensive income
‐
‐
‐
142
52
194
‐
194
‐
194
Shares repurchased
(3,832,580)
(105)
(55)
‐
‐
‐
‐
(160)
‐
(160)
Dividends declared
‐
‐
‐
‐
‐
‐
(1,029)
(1,029)
‐
(1,029)
Effect of share-based compensation
including issuance of common shares
150,177
7
12
‐
‐
‐
‐
19
‐
19
Transfer of net loss on cash flow
hedges
‐
‐
‐
‐
13
13
‐
13
‐
13
Transfer of net actuarial gain on defined
benefit plans
‐
‐
‐
‐
(75)
(75)
75
‐
‐
‐
BALANCE – DECEMBER 31, 2020
569,260,406
15,673
205
(62)
(57)
(119)
6,606
22,365
38
22,403
BALANCE – DECEMBER 31, 2020
569,260,406
15,673
205
(62)
(57)
(119)
6,606
22,365
38
22,403
Net earnings
‐
‐
‐
‐
‐
‐
3,153
3,153
26
3,179
Other comprehensive (loss) income
‐
‐
‐
(114)
193
79
‐
79
(1)
78
Shares repurchased
(15,982,154)
(442)
(47)
‐
‐
‐
(616)
(1,105)
‐
(1,105)
Dividends declared
‐
‐
‐
‐
‐
‐
(1,046)
(1,046)
‐
(1,046)
Non-controlling interest transactions
‐
‐
‐
‐
‐
‐
‐
‐
(16)
(16)
Effect of share-based compensation
including issuance of common shares
4,424,437
226
(9)
‐
‐
‐
‐
217
‐
217
Transfer of net gain on cash flow
hedges
‐
‐
‐
‐
(11)
(11)
‐
(11)
‐
(11)
Transfer of net actuarial gain on defined
benefit plans
‐
‐
‐
‐
(95)
(95)
95
‐
‐
‐
Share cancellation
(210,173)
‐
‐
‐
‐
‐
‐
‐
‐
‐
BALANCE – DECEMBER 31, 2021
557,492,516
15,457
149
(176)
30
(146)
8,192
23,652
47
23,699
(See Notes to the Condensed Consolidated
Financial Statements)
Condensed Consolidated Balance Sheets
December 31
December 31
As at
2021
2020
Note 1
ASSETS
Current assets
Cash and cash equivalents
499
1,454
Receivables
5,366
3,626
Inventories
6,328
4,930
Prepaid expenses and other current
assets
1,653
1,460
13,846
11,470
Non-current assets
Property, plant and equipment
20,016
19,660
Goodwill
12,220
12,198
Other intangible assets
2,340
2,388
Investments
703
562
Other assets
829
914
TOTAL ASSETS
49,954
47,192
LIABILITIES
Current liabilities
Short-term debt
1,560
159
Current portion of long-term debt
545
14
Current portion of lease liabilities
286
249
Payables and accrued charges
10,052
8,058
12,443
8,480
Non-current liabilities
Long-term debt
7,521
10,047
Lease liabilities
934
891
Deferred income tax liabilities
3,165
3,149
Pension and other post-retirement benefit
liabilities
419
454
Asset retirement obligations and accrued
environmental costs
1,566
1,597
Other non-current liabilities
207
171
TOTAL LIABILITIES
26,255
24,789
SHAREHOLDERS’ EQUITY
Share capital
15,457
15,673
Contributed surplus
149
205
Accumulated other comprehensive loss
(146)
(119)
Retained earnings
8,192
6,606
Equity holders of Nutrien
23,652
22,365
Non-controlling interest
47
38
TOTAL SHAREHOLDERS’ EQUITY
23,699
22,403
TOTAL LIABILITIES AND SHAREHOLDERS’
EQUITY
49,954
47,192
(See Notes to the Condensed Consolidated
Financial Statements)
Notes to the Condensed Consolidated Financial
Statements
As at and for the Three and Twelve Months Ended December 31,
2021
NOTE 1 BASIS OF
PRESENTATION
Nutrien Ltd. (collectively with its subsidiaries, known as
“Nutrien”, “we”, “us”, “our” or “the Company”) is the world’s
largest provider of crop inputs and services. Nutrien plays a
critical role in helping growers around the globe increase food
production in a sustainable manner.
Our accounting policies are in accordance with International
Financial Reporting Standards (“IFRS”) as issued by the
International Accounting Standards Board. The accounting policies
and methods of computation used in preparing these unaudited
condensed consolidated financial statements are materially
consistent with those used in the preparation of our 2020 annual
consolidated financial statements. These unaudited condensed
consolidated financial statements include the accounts of Nutrien
and its subsidiaries; however, they do not include all disclosures
normally provided in annual consolidated financial statements and
should be read in conjunction with our 2020 annual consolidated
financial statements. Our 2021 annual consolidated financial
statements, which are expected to be issued in February 2022, will
include additional information under IFRS.
Certain immaterial 2020 figures have been reclassified in the
condensed consolidated statements of changes in shareholders’
equity and condensed consolidated balance sheets.
In management’s opinion, the unaudited condensed consolidated
financial statements include all adjustments necessary to fairly
present such information in all material respects.
NOTE 2 SEGMENT
INFORMATION
The Company has four reportable operating segments: Nutrien Ag
Solutions (“Retail”), Potash, Nitrogen and Phosphate. The Retail
segment distributes crop nutrients, crop protection products, seed
and merchandise, and it 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 produce.
Three Months Ended December
31, 2021
Corporate
Retail
Potash
Nitrogen
Phosphate
and Others
Eliminations
Consolidated
Sales
– third
party
3,847
1,358
1,476
586
‐
‐
7,267
–
intersegment
31
128
292
65
‐
(516)
‐
Sales
–
total
3,878
1,486
1,768
651
‐
(516)
7,267
Freight,
transportation and distribution
‐
66
119
58
‐
(45)
198
Net
sales
3,878
1,420
1,649
593
‐
(471)
7,069
Cost of
goods sold
2,705
305
895
430
‐
(472)
3,863
Gross
margin
1,173
1,115
754
163
‐
1
3,206
Selling
expenses
848
1
2
1
3
‐
855
General
and administrative expenses
43
2
7
3
93
‐
148
Provincial mining taxes
‐
173
‐
‐
‐
‐
173
Share-based compensation expense
‐
‐
‐
‐
73
‐
73
Impairment of assets
‐
‐
17
4
‐
‐
21
Other
expenses (income)
20
3
(28)
2
112
‐
109
Earnings
(loss) before finance costs and income taxes
262
936
756
153
(281)
1
1,827
Depreciation and amortization
178
117
148
39
15
‐
497
EBITDA
1
440
1,053
904
192
(266)
1
2,324
Integration and restructuring related
costs
2
‐
‐
‐
(6)
‐
(4)
Share-based compensation expense
‐
‐
‐
‐
73
‐
73
Impairment of assets
‐
‐
17
4
‐
‐
21
COVID-19
related expenses
‐
‐
‐
‐
11
‐
11
Foreign
exchange loss, net of related derivatives
‐
‐
‐
‐
38
‐
38
Adjusted
EBITDA
442
1,053
921
196
(150)
1
2,463
Assets –
at December 31, 2021
22,387
13,148
11,093
1,699
2,266
(639)
49,954
1 EBITDA
is calculated as net earnings (loss) before finance costs, income
taxes, and depreciation and amortization.
Three Months Ended December 31,
2020
Corporate
Retail
Potash
Nitrogen
Phosphate
and Others
Eliminations
Consolidated
Sales
– third party
2,608
467
647
318
12
‐
4,052
– intersegment
10
57
147
56
‐
(270)
‐
Sales
– total
2,618
524
794
374
12
(270)
4,052
Freight, transportation and
distribution
‐
74
125
54
‐
(51)
202
Net sales
2,618
450
669
320
12
(219)
3,850
Cost of goods sold
1,733
305
557
304
11
(225)
2,685
Gross margin
885
145
112
16
1
6
1,165
Selling expenses
727
2
8
2
(7)
‐
732
General and administrative expenses
33
2
1
3
78
‐
117
Provincial mining taxes
‐
40
‐
‐
1
‐
41
Share-based compensation expense
‐
‐
‐
‐
60
‐
60
Impairment of assets
‐
1
‐
‐
‐
‐
1
Other expenses (income)
8
4
(263)
(13)
75
‐
(189)
Earnings (loss) before finance costs and
income taxes
117
96
366
24
(206)
6
403
Depreciation and amortization
180
123
146
39
11
‐
499
EBITDA
297
219
512
63
(195)
6
902
Integration and restructuring related
costs
‐
‐
4
‐
18
‐
22
Share-based compensation expense
‐
‐
‐
‐
60
‐
60
Impairment of assets
‐
1
‐
‐
‐
‐
1
COVID-19 related expenses
‐
‐
‐
‐
18
‐
18
Foreign exchange loss, net of related
derivatives
‐
‐
‐
‐
15
‐
15
Net gain on disposal of investment in
MOPCO
‐
‐
(250)
‐
‐
‐
(250)
Adjusted EBITDA
297
220
266
63
(84)
6
768
Assets – at December 31, 2020 ¹
20,526
12,032
10,612
1,462
2,983
(423)
47,192
1 In 2021, we reassessed the appropriate
segment wherein certain assets related to transportation,
distribution and logistics should be categorized. After our
evaluation was complete, we determined the assets should be
categorized in the Potash, Nitrogen and Phosphate segments.
Twelve Months Ended December
31, 2021
Corporate
Retail
Potash
Nitrogen
Phosphate
and Others
Eliminations
Consolidated
Sales
– third
party
17,665
4,021
4,216
1,810
‐
‐
27,712
–
intersegment
69
386
921
236
‐
(1,612)
‐
Sales
–
total
17,734
4,407
5,137
2,046
‐
(1,612)
27,712
Freight,
transportation and distribution
‐
371
448
217
‐
(185)
851
Net
sales
17,734
4,036
4,689
1,829
‐
(1,427)
26,861
Cost of
goods sold
13,134
1,285
2,963
1,408
‐
(1,338)
17,452
Gross
margin
4,600
2,751
1,726
421
‐
(89)
9,409
Selling
expenses
3,124
9
24
6
(21)
‐
3,142
General
and administrative expenses
168
8
15
11
275
‐
477
Provincial mining taxes
‐
466
‐
‐
‐
‐
466
Share-based compensation expense
‐
‐
‐
‐
198
‐
198
Impairment of assets
‐
7
22
4
‐
‐
33
Other
expenses (income)
86
22
(64)
15
253
‐
312
Earnings
(loss) before finance costs and income taxes
1,222
2,239
1,729
385
(705)
(89)
4,781
Depreciation and amortization
706
488
557
151
49
‐
1,951
EBITDA
1,928
2,727
2,286
536
(656)
(89)
6,732
Integration and restructuring related
costs
10
‐
‐
‐
33
‐
43
Share-based compensation expense
‐
‐
‐
‐
198
‐
198
Impairment of assets
‐
7
22
4
‐
‐
33
COVID-19
related expenses
‐
‐
‐
‐
45
‐
45
Foreign
exchange loss, net of related derivatives
‐
‐
‐
‐
39
‐
39
Cloud
computing transition adjustment
1
2
‐
‐
33
‐
36
Adjusted
EBITDA
1,939
2,736
2,308
540
(308)
(89)
7,126
Assets –
at December 31, 2021
22,387
13,148
11,093
1,699
2,266
(639)
49,954
Twelve Months Ended December 31,
2020
Corporate
Retail
Potash
Nitrogen
Phosphate
and Others
Eliminations
Consolidated
Sales
– third party
14,748
2,265
2,572
1,241
82
‐
20,908
– intersegment
37
248
628
202
‐
(1,115)
‐
Sales
– total
14,785
2,513
3,200
1,443
82
(1,115)
20,908
Freight, transportation and
distribution
‐
367
460
241
‐
(213)
855
Net sales
14,785
2,146
2,740
1,202
82
(902)
20,053
Cost of goods sold
11,049
1,183
2,265
1,166
74
(923)
14,814
Gross margin
3,736
963
475
36
8
21
5,239
Selling expenses
2,795
9
27
6
(24)
‐
2,813
General and administrative expenses
135
7
8
10
269
‐
429
Provincial mining taxes
‐
201
1
‐
2
‐
204
Share-based compensation expense
‐
‐
‐
‐
69
‐
69
Impairment of assets
‐
23
27
769
5
‐
824
Other expenses (income)
44
8
(288)
6
228
‐
(2)
Earnings (loss) before finance costs and
income taxes
762
715
700
(755)
(541)
21
902
Depreciation and amortization
668
452
599
218
52
‐
1,989
EBITDA
1,430
1,167
1,299
(537)
(489)
21
2,891
Integration and restructuring related
costs
‐
‐
4
‐
56
‐
60
Share-based compensation expense
‐
‐
‐
‐
69
‐
69
Impairment of assets
‐
23
27
769
5
‐
824
COVID-19 related expenses
‐
‐
‐
‐
48
‐
48
Foreign exchange loss, net of related
derivatives
‐
‐
‐
‐
19
‐
19
Loss on disposal of business
‐
‐
‐
‐
6
‐
6
Net gain on disposal of investment in
MOPCO
‐
‐
(250)
‐
‐
‐
(250)
Adjusted EBITDA
1,430
1,190
1,080
232
(286)
21
3,667
Assets – at December 31, 2020
20,526
12,032
10,612
1,462
2,983
(423)
47,192
NOTE 3 OTHER EXPENSES
(INCOME)
Three Months Ended
Twelve Months Ended
December 31
December 31
2021
2020
2021
2020
Integration and restructuring related
(recovery) costs
(4)
22
43
60
Foreign exchange loss, net of related
derivatives
38
17
42
18
Earnings of equity-accounted investees
(46)
(27)
(89)
(73)
Bad debt expense (recovery)
4
(3)
26
6
COVID-19 related expenses
11
18
45
48
Loss on disposal of business
‐
‐
‐
6
Net gain on disposal of investment in
MOPCO
‐
(250)
‐
(250)
Cloud computing transition adjustment
‐
‐
36
‐
Other expenses
106
34
209
183
109
(189)
312
(2)
In the fourth quarter of 2020, as a result of our strategic
decision to dispose of our investment in MOPCO, we received cash
consideration of $540 for the disposal of the investment and
settlement of legal claims. This resulted in a pre-tax gain of $250
recorded in other (income) expenses.
NOTE 4 SHARE
CAPITAL
Share Repurchase Programs
Three Months Ended
Twelve Months Ended
December 31
December 31
2021
2020
2021
2020
Number of common shares repurchased for
cancellation
13,522,057
‐
15,982,154
3,832,580
Average price per share (US dollars)
70.64
‐
69.17
41.96
Total cost
955
‐
1,105
160
As of February 15, 2022, an additional 6,204,241 common shares
were repurchased for cancellation at a cost of $445 and an average
price per share of $71.70.
On February 16, 2022, our Board of Directors approved a share
repurchase program of up to a maximum of 10 percent of our
outstanding common shares for cancellation. Subject to the
acceptance by the Toronto Stock Exchange, the 2022 normal course
issuer bid (“NCIB”) will commence following the expiration of our
current NCIB on February 28, 2022 and will expire after a one-year
period.
Dividends Declared
On February 16, 2022, our Board of Directors declared an
increase to our quarterly dividend to $0.48 per share payable on
April 14, 2022, to shareholders of record on March 31, 2022. The
total estimated dividend to be paid is $265.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220211005625/en/
Investor Relations: Jeff Holzman Vice President, Investor
Relations (306) 933-8545 Investors@nutrien.com Media
Relations: Megan Fielding Vice President, Brand & Culture
Communications (403) 797-3015 Contact us at: www.nutrien.com
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