NYSE, TSX: NTR
SASKATOON, Nov. 5, 2018 /PRNewswire/ - Nutrien Ltd.
(Nutrien) announced today its 2018 third-quarter results, with net
loss from continuing operations of $1.1
billion1 ($1.742 loss per share). Third-quarter
adjusted net earnings was $0.47 per
share3 and adjusted EBITDA4 was $839 million. Adjusted net earnings and adjusted
EBITDA exclude a New Brunswick
potash non-cash impairment of $1.8
billion ($2.15 per share) and
gain on adjustment of pension and other post-retirement benefit
plans of $151 million ($0.18 per share). For a description of other
adjustments in net earnings and EBITDA, please see pages 33 and 34,
respectively.
Nutrien also announced that its Board of Directors has declared
a quarterly dividend of US$0.43 per
share payable January 17, 2019 to
shareholders of record on December 31,
2018. This represents a 7.5 percent increase in the
dividend and is representative of improving market fundamentals and
confidence in our operational cash flow moving forward. See
"Quarterly Dividend" section for additional details regarding the
dividend.
"In the third quarter, Nutrien delivered solid operating
results. Retail earnings increased by 10 percent
year-over-year3 while our nutrient production operations
reported higher volumes, margins and significantly lower costs. We
also made significant advances on our strategic priorities
including raising the dividend and our synergy target, completing
our share repurchase program and closing the sale of our stake in
Arab Potash Company (APC). We remain on track to receive
$5 billion in net proceeds from the
sale of our equity investments. Nutrien has also raised its annual
guidance due to the strength of market fundamentals and
acceleration of merger synergies. We continue to be well positioned
to deliver strong long-term shareholder returns," commented
Chuck Magro, Nutrien's President and
CEO.
HIGHLIGHTS
- Nutrien achieved $401 million in
annual run-rate synergies as at September
30, 2018 and now expects to achieve its $500 million annual run-rate synergy target by
the end of 2018 and is raising guidance on the annual run-rate
synergy target to $600 million by the
end of 2019.
- Nutrien full-year 2018 adjusted net earnings per share and
adjusted EBITDA guidance were raised to $2.60 to $2.80 per
share and $3.85 to $4.05 billion, respectively (up from $2.40 to $2.70 per
share and $3.7 to $4.0 billion, respectively).
- Retail EBITDA increased 10 percent in the third quarter from
the same period3 last year due to strong fertilizer
demand, recent acquisitions and an increase in comparable store
sales.
- Potash adjusted EBITDA4 was 64 percent higher in the
third quarter compared to the same period last year due to higher
net selling prices, record sales volumes and lower cash cost of
goods sold per tonne including realized synergies.
- Nitrogen EBITDA more than doubled compared to the same period
last year as a result of higher nitrogen prices, increased sales
volumes and lower cash cost of goods sold per tonne including
realized synergies.
- Nutrien completed its normal course issuer bid with
approximately 32 million shares repurchased at a weighted average
price of $51.62 per share.
- Nutrien closed on the sale of its stake in APC for $502 million. We expect to close on the sale of
our Sociedad Química y Minera de Chile S.A. (SQM) series A shares
investment to Tianqi Lithium Corporation by the end of 2018.
- Results were adjusted for a $1.8
billion non-cash impairment of the New Brunswick potash facility (which has been
in care and maintenance mode for almost three years) in the third
quarter. This non-cash impairment has no impact on our effective
operating capacity or on our short and long-term outlook for the
potash business.
MARKET OUTLOOK
Agriculture and Crop Input Fundamentals
- U.S. soybean prices have been pressured by record domestic
yields and continued uncertainty as a result of the U.S. trade
dispute with China.
- U.S. corn prices are in-line with last year's levels. The
global corn supply/demand balance has tightened, and U.S. corn
stocks-to-use- ratio is the lowest since the 2013/14 crop year
despite record yields this year. Chinese corn ending stocks are
projected to be down almost 50 percent over the past three years
and more than 20 percent below the ten-year average.
- Solid crop economics, combined with favorable planting
conditions, has supported a rapid start to planting in Brazil. Analysts expect a three to five
percent increase in Brazilian soybean area and more than a five
percent increase in corn area.
- While North American crops developed at a faster-than-average
pace in 2018, adverse weather since September delayed harvest and
has narrowed the fall application season somewhat.
- We expect an increase in North American corn acres relative to
soybeans, which would be positive to overall crop input
expenditures as corn generates a higher per-acre spend than
soybeans.
Potash
- Potash prices continue to be supported by strong demand and
tight availability. Prices in major spot markets are up 20 to 30
percent compared to the third quarter of 2017 and contracts with
India and China were settled at $50 per tonne and $60 per tonne increases, respectively. We raised
our 2018 global potash shipment forecast to a range of 66 to 67
million tonnes.
- We expect that capacity curtailments and permanent closures in
2018 will match or exceed new production capability, excluding
Nutrien's expected increase in production.
- Downstream inventories in major global potash markets remain
relatively tight, which is supportive of sustained demand in late
2018 and early 2019.
- High nutrient removal in 2018 related to expected record crop
yields, combined with potash prices remaining affordable relative
to grower revenues, are expected to support continued strong
consumption in major markets including North America.
Nitrogen
- Tighter than expected supply and continued demand growth has
provided support to prices for all nitrogen products. Ammonia
production has been pressured by operational issues, turnarounds
and slower than expected supply ramp-ups, while urea continues to
be supported by lower Chinese exports and uncertainty regarding
Iranian availability.
- Global nitrogen prices are also being supported by higher
European natural gas prices, with hub-based and formula-based
prices up approximately 80 percent and 40 percent, respectively,
from 2017 lows.
- Prospects for nitrogen demand through the first half of 2019
remain strong, supported by the expectation of increased corn area
in North and South America and
increased winter wheat area in the Northern Hemisphere. There is
some risk to the fall ammonia application season in North America due to wet conditions.
- Given favorable demand prospects, limited new capacity and a
relatively stable urea supply outlook in China, we expect the global nitrogen
supply/demand balance will remain tight into 2019.
Phosphate
- Continued strength in sulfur and ammonia prices and delayed
project ramp-ups continue to support phosphate prices, however, the
decline in the value of the Indian rupee is a source of demand risk
for late 2018 and early 2019.
FINANCIAL OUTLOOK AND GUIDANCE
Taking the above factors into consideration, we have revised our
2018 annual guidance ranges as follows:
We raised our guidance range for Potash sales volumes to 12.5 to
13.0 million tonnes and increased the bottom end of our Potash
Adjusted EBITDA range from $1.4
billion to $1.5 billion.
Nitrogen EBITDA guidance has been raised to $1.15 to $1.25
billion and the bottom end of our Phosphate and Sulfate
EBITDA range increased from $0.2
billion to $0.25 billion.
Based on these factors, we are increasing our full-year 2018
adjusted net earnings guidance to $2.60 to $2.80 per
share (previously $2.40 to
$2.70 per share) and adjusted EBITDA
guidance to $3.85 to $4.05 billion (previously $3.7 to $4.0
billion). Additionally, adjusted net earnings guidance for
the fourth quarter of 2018 is $0.46
to $0.66 per share.
Excluded from guidance are the New
Brunswick potash non-cash impairment of $1.8 billion, expected costs to achieve synergies
(net of one-time savings) of $40 to
$50 million (reduced from
$50 to $75
million), share-based compensation as well as the impact of
incremental depreciation and amortization of approximately
$200 million resulting from the fair
valuing of Agrium's assets and liabilities as of January 1, 2018 in accordance with purchase
accounting.
Dividend income from investments in APC and SQM is recorded
net of tax in discontinued operations and is still expected to
approximate $130 million and is
included in our adjusted annual net earnings per share guidance,
but is not included in adjusted EBITDA guidance.
All annual guidance numbers, including those noted above, are
outlined in the table below:
|
|
|
2018 Updated
Guidance Ranges
|
|
|
|
|
|
(Annual Guidance,
except where noted)
|
Low
|
High
|
Adjusted net
earnings per share 6
|
$2.60
|
$2.80
|
Adjusted EBITDA
(billions) 6
|
$3.85
|
$4.05
|
Retail EBITDA
(billions)
|
$1.2
|
$1.3
|
Potash Adjusted
EBITDA (billions) 6
|
$1.5
|
$1.6
|
Nitrogen EBITDA
(billions)
|
$1.15
|
$1.25
|
Phosphate and
Sulfate EBITDA (billions)
|
$0.25
|
$0.30
|
Potash sales
tonnes (millions) (a)
|
12.5
|
13.0
|
Nitrogen sales
tonnes (millions) (a)
|
10.3
|
10.7
|
Depreciation and
amortization including purchase price
allocation impact (billions)
|
$1.5
|
$1.6
|
Integration and
synergy costs (millions)
|
$40
|
$50
|
Effective tax rate
on continuing operations
|
23%
|
25%
|
Sustaining capital
expenditures (billions)
|
$1.0
|
$1.1
|
|
|
|
2018 Annual
Assumptions & Sensitivities
|
|
|
|
|
|
FX rate CAD to
USD
|
|
$1.29
|
NYMEX natural gas
($US/MMBtu)
|
|
$2.95
|
$1/MMBtu increase
in NYMEX ($/share) (b)
|
|
$(0.19)
|
$20/tonne change
in realized Potash selling prices ($/share)
(b)
|
|
$0.26
|
$20/tonne change
in realized Ammonia selling prices ($/share)
(b)
|
|
$0.06
|
$20/tonne change
in realized Urea selling prices ($/share)
(b)
|
|
$0.09
|
|
|
|
(a) Potash and
nitrogen sales tonnes include manufactured product only. Nitrogen
sales tonnes exclude ESN® and Rainbow products.
|
(b) Sensitivities are
calculated pre-synergies resulting from the merger.
|
THIRD-QUARTER RESULTS
The comparative figures throughout this release are the
historical combined results of legacy Potash Corporation of
Saskatchewan Inc. (PotashCorp) and Agrium Inc. (Agrium) for the
three and nine months ended September 30,
2017 and are considered to be non-IFRS measures. For
International Financial Reporting Standards (IFRS) purposes, the
comparative amounts are the results of legacy PotashCorp, which is
the accounting acquirer. Compared to the IFRS figures, the change
is the result of the merger involving Agrium and PotashCorp. Refer
to the Selected Non-IFRS Financial Measures and Reconciliations and
Supplemental Information section.
Consolidated
|
|
|
|
|
Three months ended
September 30
|
|
|
2018
Actual
|
2017
Combined
|
Change
|
(millions of U.S.
dollars)
|
|
|
|
|
Sales
|
|
4,034
|
3,586
|
448
|
Freight,
transportation and distribution
|
|
(253)
|
(236)
|
(17)
|
Cost of goods
sold
|
|
(2,626)
|
(2,557)
|
(69)
|
Gross
margin
|
|
1,155
|
793
|
362
|
Expenses
|
|
(2,514)
|
(719)
|
(1,795)
|
Net loss from
continuing operations
|
|
(1,067)
|
(53)
|
(1,014)
|
Nutrien third-quarter net loss from continuing operations
totaled $1.1 billion, lower than the
$53 million loss in the third quarter
of 2017. Results for the quarter reflected a $1.8 billion non-cash impairment of the
New Brunswick potash facility and
a $151 million gain on adjustment of
pension and other post-retirement benefit plans.
Earnings were supported by higher sales volumes and realized
prices in potash and nitrogen due to strong global demand and tight
supply. Retail reported improved results supported by strong North
American crop nutrient applications. Depreciation and amortization
expense increased by $126 million
this quarter, in part due to the merger-related purchase price
allocation (PPA) impact. The IFRS comparative figures for
PotashCorp are detailed in the financial report of Nutrien for the
third quarter of 2018 and its management's discussion and analysis
for the same period, both of which will be made available under
Nutrien's profile on SEDAR at www.sedar.com and on EDGAR at
www.sec.gov in November 2018.
Retail
|
|
|
Three months ended
September 30
|
|
2018
Actual
|
|
2017
Combined
|
|
Change
|
(millions of U.S.
dollars)
|
|
|
|
|
|
|
|
|
Sales
|
|
2,175
|
|
|
2,067
|
|
|
108
|
Cost of goods
sold
|
|
(1,642)
|
|
|
(1,549)
|
|
|
(93)
|
Gross
margin
|
|
533
|
|
|
518
|
|
|
15
|
EBIT7
|
|
(6)
|
|
|
32
|
|
|
(38)
|
EBITDA
|
|
116
|
|
|
105
|
|
|
11
|
Selling and
general and administrative expenses
|
|
(577)
|
|
|
(489)
|
|
|
(88)
|
- EBITDA – Retail EBITDA in the quarter was 10 percent
higher than the same period last year driven by solid crop nutrient
performance across all regions, recent acquisitions and an increase
in comparable store sales. Total gross margin percentage was 25
percent, equal to the same period in 2017.
- North American Retail EBITDA was impacted by an early maturing
crop which positively supported fertilizer demand while reducing
the demand for crop protection products.
- Selling and general and administrative expenses
(S&GA) – Retail S&GA expenses increased by 18 percent
this quarter compared to the same period in 2017, primarily due to
higher depreciation and amortization expense related to PPA and a
higher employee headcount due to recent acquisitions.
|
Three months ended
September 30
|
|
Sales
|
Gross
margin
|
Gross
margin (%)
|
(millions of U.S.
dollars, except where noted)
|
2018
|
2017
|
Change
|
2018
|
2017
|
Change
|
2018
|
2017
|
Crop
nutrients
|
|
650
|
|
528
|
|
122
|
|
142
|
|
120
|
|
22
|
|
22
|
|
23
|
Crop protection
products
|
|
1,086
|
|
1,117
|
|
(31)
|
|
236
|
|
243
|
|
(7)
|
|
22
|
|
22
|
Seed
|
|
60
|
|
59
|
|
1
|
|
14
|
|
21
|
|
(7)
|
|
23
|
|
36
|
Merchandise
|
|
205
|
|
187
|
|
18
|
|
27
|
|
29
|
|
(2)
|
|
13
|
|
16
|
Services and
other
|
|
174
|
|
176
|
|
(2)
|
|
114
|
|
105
|
|
9
|
|
66
|
|
60
|
- Crop nutrients – Sales in the third quarter were 23
percent higher than in the same period last year as North American
and Latin American growers prepared to replenish soil nutrients
removed from bumper crops in addition to strong demand in
Australia. Crop nutrient
deliveries and realized selling prices increased in the quarter,
resulting in 18 percent higher gross margin compared to the third
quarter of 2017. Gross margin per tonne was stable partly due to
rising crop nutrient costs.
- Crop protection products – Third-quarter sales were 3
percent lower than the same period in 2017, due to the rapid crop
development, limited pest pressure and an early start to the
harvest season in North America,
as well as, dry and unfavorable weather conditions in Australia. Gross margin percentage was stable
during the quarter.
- Seed – Sales in the quarter were similar to the same
period last year, while gross margin percentage decreased due to
seed sales mix and timing of vendor programs.
- Merchandise – Sales were up 10 percent from the same
period in 2017, supported by higher fuel sales in Canada and higher animal health and fencing
sales volumes in Australia. Gross
margin rates decreased by 3 percentage points due to the higher
proportion of lower-margin Canadian fuel sales.
- Services and other – Third-quarter sales were similar to
the same period in 2017, but gross margin percentage grew 6
percentage points driven by higher-margin application services and
financing services.
Potash
|
|
|
Three months ended
September 30
|
|
2018
Actual
|
2017
Combined
|
Change
|
(millions of U.S.
dollars)
|
|
|
|
|
Net sales
3
|
|
817
|
590
|
227
|
Cost of goods
sold
|
|
(358)
|
(323)
|
(35)
|
Gross
margin
|
|
459
|
267
|
192
|
EBIT
|
|
(1,439)
|
210
|
(1,649)
|
EBITDA
|
|
(1,311)
|
303
|
(1,614)
|
Adjusted EBITDA
4
|
|
498
|
303
|
195
|
Provincial mining
taxes
|
|
(78)
|
(48)
|
(30)
|
- EBITDA and Adjusted EBITDA – The non-cash impairment of
our New Brunswick potash facility
negatively affected Potash EBITDA in the quarter. Excluding this
impact, Potash adjusted EBITDA was up 64 percent from the third
quarter in 2017 due to a combination of record sales volumes,
higher net selling prices and a lower cost of goods sold per
tonne.
|
|
|
|
|
Three months ended
September 30
|
|
|
2018
Actual
|
2017
Combined
|
Change
|
Manufactured
products
|
|
|
|
|
Sales volumes
(tonnes 000's)
|
|
|
|
|
North
America
|
|
1,678
|
1,373
|
305
|
Offshore
|
|
2,180
|
1,938
|
242
|
Total
|
|
3,858
|
3,311
|
547
|
Net selling price
($/tonne)
|
|
|
|
-
|
North
America
|
|
213
|
192
|
21
|
Offshore
|
|
210
|
168
|
42
|
Average
|
|
212
|
178
|
34
|
Cost of goods sold
($/tonne)
|
|
(93)
|
(97)
|
4
|
Gross margin
($/tonne)
|
|
119
|
81
|
38
|
Depreciation and
amortization ($/tonne)
|
|
33
|
28
|
5
|
Gross margin
excluding depreciation and amortization
($/tonne)
3
|
|
152
|
109
|
43
|
- Volumes – Total potash sales volumes were up 17
percent compared to the same period in 2017 (this was a record
compared to any previous quarter) due to strong demand in the North
American market, as well as, offshore markets supplied through
Canpotex Limited8 (Canpotex). The largest portion of
Canpotex's volumes for the quarter were sold to Latin America (40 percent), Other Asian
markets (37 percent) and India and
China (11 percent and 7 percent,
respectively).
- Price – The weighted average realized selling price was
19 percent higher in the third quarter compared to the prior year's
third quarter due to strong global demand and tight supply.
Offshore realized selling prices increased 25 percent and
North America realized selling
price increased 11 percent from the third quarter in 2017.
- Costs – Cost per tonne of product sold was 4 percent
lower compared to the prior year's third quarter. This was due to a
larger proportion of supply produced at our lower-cost facilities,
realized synergies and higher overall production volumes that more
than offset the effects of PPA depreciation. Cash cost of product
manufactured39 was significantly lower at
$56 per tonne compared to
$72 per tonne for the same period
last year.
Nitrogen
|
|
|
|
|
Three months ended
September 30
|
|
|
2018
Actual
|
2017
Combined
|
Change
|
(millions of U.S.
dollars)
|
|
|
|
|
Net
sales
|
|
612
|
496
|
116
|
Cost of goods
sold
|
|
(457)
|
(441)
|
(16)
|
Gross
margin
|
|
155
|
55
|
100
|
EBIT
|
|
146
|
47
|
99
|
EBITDA
|
|
257
|
113
|
144
|
- EBITDA – Total nitrogen EBITDA in the quarter increased
127 percent from the third quarter of 2017 due to higher realized
prices, increased sales volumes and lower cost of goods sold
excluding depreciation and amortization.
|
|
|
|
|
Three months ended
September 30
|
|
|
2018
Actual
|
2017
Combined
|
Change
|
Manufactured
products
|
|
|
|
|
Sales volumes
(tonnes 000's)
|
|
|
|
|
Ammonia
|
|
750
|
724
|
26
|
Urea
|
|
691
|
626
|
65
|
Solutions and
nitrates
|
|
1,018
|
929
|
89
|
Total
|
|
2,459
|
2,279
|
180
|
Net selling price
($/tonne)
|
|
|
|
-
|
Ammonia
|
|
253
|
206
|
47
|
Urea
|
|
286
|
228
|
58
|
Solutions and
nitrates
|
|
156
|
141
|
15
|
Average
|
|
222
|
185
|
37
|
Cost of goods sold
($/tonne)
|
|
(165)
|
(165)
|
-
|
Gross margin
($/tonne)
|
|
57
|
20
|
37
|
Depreciation and
amortization ($/tonne)
|
|
45
|
29
|
16
|
Gross margin
excluding depreciation and amortization
($/tonne)
|
|
102
|
49
|
53
|
- Volumes – Total nitrogen sales volumes were 8 percent
higher than in the third quarter of 2017 due to higher operating
rates and strong demand. Both urea and solutions and nitrates
volumes were up 10 percent due to a strong in-season demand for
nitrogen fertilizer application. Ammonia sales were up 4 percent,
supported by higher production volumes.
- Price – Nitrogen realized prices were up 20 percent in
the quarter due to strong global demand, tight supply and higher
global feedstock costs. Ammonia and urea realized prices were up 23
percent and 25 percent respectively while solutions and nitrates
were up 11 percent.
- Costs – Cost of goods sold per tonne of nitrogen was in
line with last year's third quarter as significantly higher
production volumes, synergy realization and lower natural gas costs
in North America offset the effect
of higher depreciation resulting from PPA and higher natural gas
costs in Trinidad. Cost of goods
sold excluding depreciation and amortization per tonne was down 12
percent. Urea cash cost of product manufactured3,9 was
significantly lower at $72 per tonne
compared to $86 per tonne for the
same period last year.
|
|
|
|
|
Three months ended
September 30
|
|
|
2018
Actual
|
2017
Combined
|
Change
|
(U.S. dollars per
MMBtu)
|
|
|
|
|
Overall gas cost
excluding realized derivative impact
|
|
2.40
|
2.23
|
0.17
|
Realized
derivative impact
|
|
0.34
|
0.49
|
(0.15)
|
Overall gas
cost
|
|
2.74
|
2.72
|
0.02
|
Average
NYMEX
|
|
2.90
|
3.00
|
(0.10)
|
Average
AECO
|
|
1.03
|
1.61
|
(0.58)
|
Phosphate and Sulfate
|
|
|
|
|
Three months ended
September 30
|
|
|
2018
Actual
|
2017
Combined
|
Change
|
(millions of U.S.
dollars)
|
|
|
|
|
Net
sales
|
|
437
|
356
|
81
|
Cost of goods
sold
|
|
(401)
|
(396)
|
(5)
|
Gross
margin
|
|
36
|
(40)
|
76
|
EBIT
|
|
32
|
(45)
|
77
|
EBITDA
|
|
88
|
11
|
77
|
- EBITDA – Total phosphate and sulfate EBITDA increased
from the third quarter in 2017 as a result of higher realized
prices and a $29 million asset
impairment in the comparable period of 2017, that more than offset
higher ammonia and sulfur costs in 2018.
|
|
|
|
|
Three months ended
September 30
|
|
|
2018
Actual
|
2017
Combined
|
Change
|
Manufactured
products
|
|
|
|
|
Sales volumes
(tonnes 000's)
|
|
|
|
|
Fertilizer
|
|
650
|
678
|
(28)
|
Industrial and
feed
|
|
228
|
214
|
14
|
Ammonium
sulfate
|
|
104
|
85
|
19
|
Total
|
|
982
|
977
|
5
|
Net selling price
($/tonne)
|
|
|
|
|
Fertilizer
|
|
411
|
329
|
82
|
Industrial and
feed
|
|
498
|
474
|
24
|
Ammonium
sulfate
|
|
225
|
214
|
11
|
Average
|
|
412
|
351
|
61
|
Cost of goods sold
($/tonne)
|
|
(376)
|
(391)
|
15
|
Gross margin
($/tonne)
|
|
36
|
(40)
|
76
|
Depreciation and
amortization ($/tonne)
|
|
57
|
57
|
-
|
Gross margin
excluding depreciation and amortization
($/tonne)
|
|
93
|
17
|
76
|
- Volumes – Total phosphate and sulfate sales volumes in
the quarter were similar to that of the third quarter in 2017 as
lower fertilizer sales, due to timing of delivery, were offset by
higher industrial and feed and ammonium sulfate sales.
- Price – The average combined net selling price in the
third quarter was up 17 percent compared to the same period last
year primarily due to a 25 percent increase in phosphate fertilizer
net selling prices. Global phosphate prices were supported by
strong demand and higher input costs for ammonia and
sulfur.
- Costs – Cost of goods sold per tonne was 4 percent lower
than the same period last year as higher ammonia and sulfur costs
were more than offset by the impact of last year's impairment of
assets at our Aurora, North
Carolina, facility, and an adjustment in PPA.
Others
|
|
|
|
|
Three months ended
September 30
|
|
|
2018
Actual
|
2017
Combined
|
Change
|
(millions of U.S.
dollars)
|
|
|
|
|
General and
administrative expenses
|
|
(126)
|
(118)
|
(8)
|
Other income
(expenses)
|
|
59
|
(49)
|
108
|
Finance
costs
|
|
(142)
|
(135)
|
(7)
|
Income tax
recovery
|
|
434
|
8
|
426
|
- Other (income) expenses – During the third quarter this
year, we recognized a gain from pension and other post-employment
benefit adjustments amounting to $151
million as certain plans were suspended and/or discontinued
effective January 1, 2020. This was
partially offset by higher merger and related costs which increased
by $40 million as we continue in our
integration and synergy initiatives.
- Tax – The company had a loss before income taxes for the
three months ended September 30, 2018
compared to earnings before income taxes for the same period in
2017. As a result, income tax recovery increased for the three
months ended September 30, 2018 as
compared to the same period last year.
SYNERGIES
Synergy Program Commitments
|
|
|
|
Category
|
December 31,
2019
Synergy Annual Run
Rate – Initial Target
|
December 31,
2019 Synergy
Annual Run Rate
– New Target
|
Synergy Annual
Run
Rate Achieved to
September 30, 2018
|
Distribution and
retail integration/optimization
|
~$150
million
|
~$150
million
|
$81
million
|
Production
optimization
|
~$125
million
|
~$200
million
|
$119
million
|
SG&A and other
optimization10
|
~$125
million
|
~$150
million
|
$142
million
|
Procurement
|
~$100
million
|
~$100
million
|
$59
million
|
Total
|
$500 million
|
$600
million
|
$401
million
|
- Nutrien has achieved synergies ahead of schedule, capturing
$401 million in annual run-rate
synergies as at September 30, 2018.
We now expect to achieve $500 million
in annual run-rate synergies by the end of 2018, up from the
second-quarter estimate of $350
million. We are raising guidance on the annual run-rate
synergy target to $600 million by the
end of 2019.
QUARTERLY DIVIDEND
Nutrien's Board of Directors has declared a quarterly dividend
of 0.43 per share payable January 17,
2019 to shareholders of record on December 31, 2018. Registered shareholders who
are residents of Canada as
reflected in Nutrien's shareholders register, as well as beneficial
holders (i.e., shareholders who hold their common shares through a
broker or other intermediary) whose intermediary is a participant
in CDS Clearing and Depositary Services Inc. or its nominee, CDS
& Co., will receive their dividend in Canadian dollars,
calculated based on the Bank of Canada daily exchange rate on December 31, 2018. Registered shareholders
resident outside of Canada as
reflected in Nutrien's shareholders register, including
the United States, as well as
beneficial holders whose intermediary is a participant in The
Depository Trust Company or its nominee, Cede & Co., will
receive their dividend in U.S. dollars. However, registered
shareholders of Nutrien may elect to change the currency of their
dividend payments to U.S. dollars or Canadian dollars, as
applicable. In addition, Nutrien offers registered shareholders
direct deposit by electronic funds transfer for dividend payments.
Registered shareholders may elect to change the currency of their
dividend and enroll for direct deposit by contacting, Nutrien's
registrar and transfer agent, AST Trust Company (Canada), directly (1-800-387-0825 or
inquiries@astfinancial.com). Beneficial shareholders, who hold
their shares through a broker, should contact their broker to
determine the ability and necessary steps involved in an election
to change the currency of their dividend payment. For further
details, please visit
www.nutrien.com/investors/shareholder-information/dividends. All
dividends paid by Nutrien are, pursuant to subsection 89(14) of the
Income Tax Act (Canada),
designated as eligible dividends.
Notes
1. All amounts are stated in U.S. dollars.
2. All references to per-share amounts pertain to diluted net
(loss) earnings per share.
3. This is a non-IFRS measure. Refer to Selected Non-IFRS Financial
Measures and Reconciliations and Supplemental Information.
4. Adjusted EBITDA is calculated as net (loss) earnings from
continuing operations before finance costs, income tax (expense)
recovery, depreciation and amortization and adjusted for
merger-related costs, share-based compensation, impairment loss and
curtailment gain. This is a Non-IFRS measure. Refer to Selected
Non-IFRS Financial Measures and Reconciliations and Supplemental
Information.
5. Earnings before interest, taxes, depreciation, and amortization
(EBITDA) is calculated as net (loss) earnings from continuing
operations before finance costs, income tax (expense) recovery,
depreciation and amortization. This is a non-IFRS measure. Refer to
Selected Non-IFRS Financial Measures and Reconciliations and
Supplemental Information.
6. Certain of the forward-looking financial measures are provided
on a Non-IFRS basis. We do not provide a reconciliation of such
forward-looking measures to the most directly comparable financial
measures calculated and presented in accordance with IFRS due to
unknown variables and uncertainty related to future results. These
unknown variables may include unpredictable transactions of
significant value, which may be inherently difficult to determine
without unreasonable effort.
7. Earnings before interest and taxes (EBIT) is calculated as net
(loss) earnings from continuing operations before finance costs and
income tax (expense) recovery.
8. Canpotex is the offshore marketing company for Nutrien and one
other Saskatchewan potash
producer.
9. Urea cash cost of product manufactured excludes natural gas
costs and steam.
10. Other includes synergies related to administrative functions
which may not appear in selling expenses and/or general and
administrative expenses in the financial statements.
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 over
26 million tonnes of potash, nitrogen and phosphate and sulfate
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. For further information visit us at
www.nutrien.com.
Forward-Looking Statements
Certain statements and other information included in this
news release 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 news release, other
than those relating to historical information or current
conditions, are forward-looking statements, including, but not
limited to: Nutrien's 2018 annual guidance, including expectations
regarding our adjusted net earnings per share and EBITDA (both
adjusted consolidated and by segment); expectations regarding
the on-going sale of equity interests, including, the proceeds to
be realized in connection therewith; capital spending expectations
for 2018; expectations regarding performance of our business
segments in 2018 and in the future; our market outlook for 2018 and
2019, including potash, nitrogen and phosphate and sulfate outlook
and including anticipated supply and demand for our products and
services, expected market and industry conditions with respect to
crop nutrient application rates, planted acres, crop mix, prices
and the impact of currency fluctuations and import and export
volumes; expectations regarding completion of previously announced
expansion projects (including timing and volumes of production
associated therewith) and acquisitions and divestitures; and the
expected synergies associated with the merger of Agrium and
PotashCorp, including timing thereof. These forward-looking
statements are subject to a number of assumptions, risks and
uncertainties, many of which are beyond our control, which could
cause actual results to differ materially from such forward-looking
statements. As such, undue reliance should not be placed on these
forward-looking statements.
All of the forward-looking statements are qualified by the
assumptions that are stated or inherent in such forward-looking
statements, including the assumptions referred to below and
elsewhere in this document. Although Nutrien believes that these
assumptions are reasonable, this list is not exhaustive of the
factors that may affect any of the forward-looking statements and
the reader should not place an undue reliance on these assumptions
and such forward-looking statements. The additional key assumptions
that have been made include, among other things, assumptions with
respect to Nutrien's ability to successfully integrate and realize
the anticipated benefits of its already completed (including the
merger of Agrium and PotashCorp) and future acquisitions, and that
we will be able to implement our standards, controls, procedures
and policies at any acquired businesses to realize the expected
synergies; that future business, regulatory and industry conditions
will be within the parameters expected by Nutrien, including with
respect to prices, margins, demand, supply, product availability,
supplier agreements, availability and cost of labor and interest,
exchange and effective tax rates; the completion of our expansion
projects on schedule, as planned and on budget; assumptions with
respect to global economic conditions and the accuracy of our
market outlook expectations for 2018 and in the future (including
as outlined under "Market Outlook"); 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; ability to maintain
investment grade rating and achieve our performance targets;
assumptions in respect of our ability to sell equity positions,
including the ability to find suitable buyers at expected prices
and successfully complete such transactions in a timely manner; the
receipt, on time, of all necessary permits, utilities and project
approvals with respect to our expansion projects and that we will
have the resources necessary to meet the 'projects'
approach.
Events or circumstances that could cause actual results to
differ materially from those in the forward-looking statements
include, but are not limited to: general global economic, market
and business conditions; the failure to successfully integrate and
realize the expected synergies associated with the merger of Agrium
and PotashCorp, including within the expected timeframe; 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, 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 security risks
related to our systems; the inability to find suitable buyers for
our equity positions and counterparty and transaction risk
associated therewith; regional natural gas supply restrictions;
counterparty and sovereign risk; delays in completion of
turnarounds at our major facilities; gas supply interruptions at
our Egyptian and Argentinian facilities; any significant impairment
of the carrying value of certain assets; risks related to
reputational loss; certain complications that may arise in our
mining processes; the ability to attract, engage and retain skilled
employees and strikes or other forms of work stoppages; and other
risk factors detailed from time to time in Agrium, PotashCorp and
Nutrien reports filed with the Canadian securities regulators and
the Securities and Exchange Commission in the United States, including those disclosed
in Nutrien's business acquisition report dated February 20, 2018, related to the merger of
Agrium and PotashCorp.
The purpose of our expected adjusted net earnings per share,
consolidated and Potash adjusted EBITDA and EBITDA by segment
guidance range is to assist readers in understanding our expected
and targeted financial results, and this information may not be
appropriate for other purposes.
Nutrien disclaims any intention or obligation to update or
revise any forward-looking statements in this document as a result
of new information or future events, except as may be required
under applicable U.S. federal securities laws or applicable
Canadian securities legislation.
FOR FURTHER INFORMATION:
Investor and Media
Relations:
Richard
Downey
Vice President,
Investor & Corporate Relations
(403)
225-7357
Investors@nutrien.com
Investor
Relations:
Jeff
Holzman
Senior Director,
Investor Relations
(306)
933-8545
Todd
Coakwell
Director, Investor
Relations
(403)
225-7437
Contact us at:
www.nutrien.com
|
|
Nutrien will host a Conference Call on Tuesday, November 6, 2018 at 10:00 am Eastern Time.
Telephone Conference: Dial-in numbers:
- From Canada and the U.S.
1-877-269-7756
- No access code required. Please dial in 15 minutes prior to
ensure you are placed on the call in a timely manner.
Live Audio Webcast: Visit
https://www.nutrien.com/investors/events/2018-q3-earnings-conference-call
Nutrien
Ltd.
|
Condensed
Consolidated Statements of (Loss) Earnings
|
(in millions of US
dollars except as otherwise noted)
|
(unaudited)
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
Nine Months
Ended
|
|
|
September
30
|
September
30
|
|
|
2018
|
2017
|
2018
|
2017
|
|
|
|
(Note
11)
|
|
(Note
11)
|
|
|
|
|
|
|
Sales (Note
3)
|
|
$
|
4,034
|
$
|
1,234
|
$
|
15,874
|
$
|
3,466
|
Freight,
transportation and distribution
|
|
(253)
|
(172)
|
(675)
|
(421)
|
Cost of goods sold
(Note 3)
|
|
(2,626)
|
(829)
|
(11,066)
|
(2,279)
|
Gross
Margin
|
|
1,155
|
233
|
4,133
|
766
|
Selling
expenses
|
|
(560)
|
(7)
|
(1,758)
|
(24)
|
General and
administrative expenses
|
|
(163)
|
(49)
|
(461)
|
(130)
|
Provincial mining and
other taxes
|
|
(79)
|
(45)
|
(192)
|
(121)
|
Earnings of
equity-accounted investees
|
|
15
|
3
|
26
|
6
|
Impairment of
property, plant and equipment (Note 4)
|
|
(1,809)
|
-
|
(1,809)
|
-
|
Other income
(expenses) (Note 5)
|
|
82
|
(35)
|
(71)
|
(73)
|
(Loss) Earnings
before Finance Costs and Income Taxes
|
|
(1,359)
|
100
|
(132)
|
424
|
Finance
costs
|
|
(142)
|
(60)
|
(394)
|
(180)
|
(Loss) Earnings
before Income Taxes
|
|
(1,501)
|
40
|
(526)
|
244
|
Income tax recovery
(expense) (Note 6)
|
|
434
|
(24)
|
199
|
30
|
Net (Loss)
Earnings from Continuing Operations
|
|
(1,067)
|
16
|
(327)
|
274
|
Net earnings from
discontinued operations (Note 7)
|
|
23
|
37
|
698
|
129
|
Net (Loss)
Earnings
|
|
$
|
(1,044)
|
$
|
53
|
$
|
371
|
$
|
403
|
|
|
|
|
|
|
Net (Loss)
Earnings per Share from Continuing Operations
|
|
|
|
|
|
Basic
|
|
$
|
(1.74)
|
$
|
0.02
|
$
|
(0.52)
|
$
|
0.33
|
Diluted
|
|
$
|
(1.74)
|
$
|
0.02
|
$
|
(0.52)
|
$
|
0.33
|
|
|
|
|
|
|
Net (Loss)
Earnings per Share from Continuing and Discontinued
Operations
|
|
|
|
Basic
|
|
$
|
(1.70)
|
$
|
0.06
|
$
|
0.59
|
$
|
0.48
|
Diluted
|
|
$
|
(1.70)
|
$
|
0.06
|
$
|
0.59
|
$
|
0.48
|
|
|
|
|
|
|
Dividends Declared
per Share
|
|
$
|
0.40
|
$
|
0.10
|
$
|
1.20
|
$
|
0.30
|
|
|
|
|
|
|
Weighted Average
Shares Outstanding (Note 10)
|
|
|
|
|
|
Basic
|
|
614,950,000
|
840,137,000
|
629,197,000
|
840,037,000
|
Diluted
|
|
614,950,000
|
840,301,000
|
629,197,000
|
840,202,000
|
|
|
|
|
|
(See Notes to the
Condensed Consolidated Financial Statements)
|
|
|
Nutrien
Ltd.
|
Condensed
Consolidated Statements of Comprehensive (Loss)
Income
|
(in millions of US
dollars)
|
(unaudited)
|
|
|
|
Three Months
Ended
|
Nine Months
Ended
|
|
September
30
|
September
30
|
|
2018
|
2017
|
2018
|
2017
|
(Net of related
income taxes)
|
|
(Note
11)
|
|
(Note
11)
|
|
|
|
|
|
Net (Loss)
Earnings
|
$
|
(1,044)
|
$
|
53
|
$
|
371
|
$
|
403
|
Other Comprehensive
Income (Loss)
|
|
|
|
|
|
Items that will not
be reclassified to net (loss) earnings:
|
|
|
|
|
|
|
Net actuarial gain on
defined benefit plans (1)
|
-
|
-
|
56
|
-
|
|
|
Financial instruments
measured at FVTOCI (2)
|
|
|
|
|
|
|
|
Net fair value gain
(loss) on investments
|
14
|
35
|
(79)
|
128
|
|
Items that have been
or may be subsequently reclassified to
|
|
|
|
|
|
|
net (loss)
earnings:
|
|
|
|
|
|
|
Cash flow
hedges
|
|
|
|
|
|
|
|
Net fair value loss
during the period (3)
|
(4)
|
(1)
|
(3)
|
(8)
|
|
|
|
Reclassification of
net loss to (loss) earnings (4)
|
-
|
9
|
-
|
28
|
|
|
Foreign currency
translation
|
|
|
|
|
|
|
|
Loss on translation
of net foreign operations
|
(8)
|
-
|
(146)
|
-
|
|
|
Equity-accounted
investees
|
|
|
|
|
|
|
|
Share of other
comprehensive (loss) income
|
(1)
|
(1)
|
(2)
|
2
|
Other
Comprehensive Income (Loss)
|
1
|
42
|
(174)
|
150
|
Comprehensive
(Loss) Income
|
$
|
(1,043)
|
$
|
95
|
$
|
197
|
$
|
553
|
(1) Net of
income taxes of $NIL (2017 – $NIL) for the three months ended
September 30, 2018 and $(16) (2017 – $NIL) for the nine months
ended September 30, 2018.
|
(2) As at
September 30, 2018, financial instruments measured at fair value
through other comprehensive income ("FVTOCI") are comprised of
shares in Sinofert Holdings Limited ("Sinofert") and other
(September 30, 2017 - Israel Chemicals Ltd. ("ICL"), Sinofert and
other). The company's investment in ICL was classified as held for
sale at December 31, 2017 and the divestiture of all equity
interests in ICL was completed on January 24, 2018.
|
(3) Cash
flow hedges are comprised of natural gas derivative instruments and
were net of income taxes of $1 (2017 - $NIL) for the three months
ended September 30, 2018 and $1 (2017 - $4) for the nine months
ended September 30, 2018.
|
(4) Net of
income taxes of $NIL (2017 - $(4)) for the three months ended
September 30, 2018 and $NIL (2017 - $(15)) for the nine months
ended September 30, 2018.
|
(See Notes to the
Condensed Consolidated Financial Statements)
|
Nutrien
Ltd.
|
Condensed
Consolidated Statements of Cash Flows
|
(in millions of US
dollars)
|
(unaudited)
|
|
|
|
Three Months
Ended
|
Nine Months
Ended
|
|
|
September
30
|
September
30
|
|
|
2018
|
2017
|
2018
|
2017
|
|
|
|
|
|
|
Operating
Activities
|
|
|
|
|
|
Net (loss)
earnings
|
|
$
|
(1,044)
|
$
|
53
|
$
|
371
|
$
|
403
|
Adjustments to
reconcile net (loss) earnings to cash (used in)
|
|
|
|
|
|
|
provided by operating
activities (Note 8)
|
|
1,801
|
237
|
2,095
|
532
|
Changes in non-cash
operating working capital (Note 8)
|
|
(934)
|
3
|
(2,382)
|
(91)
|
Cash (used in)
provided by operating activities
|
|
(177)
|
293
|
84
|
844
|
|
|
|
|
|
|
Investing
Activities
|
|
|
|
|
|
Business
acquisitions, net of cash acquired (Note 2)
|
|
(140)
|
-
|
(385)
|
-
|
Additions to
property, plant and equipment
|
|
(352)
|
(170)
|
(913)
|
(431)
|
Cash acquired in
Merger (Note 2)
|
|
-
|
-
|
466
|
-
|
Proceeds from
disposal of discontinued operations (Note 7)
|
|
14
|
-
|
1,833
|
-
|
Purchase of
investments
|
|
(15)
|
-
|
(123)
|
-
|
Other
|
|
14
|
-
|
25
|
(1)
|
Cash (used in)
provided by investing activities
|
|
(479)
|
(170)
|
903
|
(432)
|
|
|
|
|
|
|
Financing
Activities
|
|
|
|
|
|
Finance costs on
long-term debt
|
|
-
|
-
|
(21)
|
(1)
|
Proceeds from
(repayment of) short-term debt (Note 9)
|
|
1,319
|
(39)
|
3,214
|
(99)
|
Repayment of
long-term debt
|
|
(2)
|
-
|
(8)
|
-
|
Dividends paid (Note
10)
|
|
(248)
|
(84)
|
(708)
|
(248)
|
Repurchase of common
shares (Note 10)
|
|
(459)
|
-
|
(1,663)
|
-
|
Issuance of common
shares (Note 10)
|
|
5
|
-
|
7
|
1
|
Cash provided by
(used in) financing activities
|
|
615
|
(123)
|
821
|
(347)
|
Effect of exchange
rate changes on cash and cash equivalents
|
(13)
|
-
|
(22)
|
-
|
(Decrease)
Increase in Cash and Cash Equivalents
|
|
(54)
|
-
|
1,786
|
65
|
Cash and Cash
Equivalents, Beginning of Period
|
|
1,956
|
97
|
116
|
32
|
Cash and Cash
Equivalents, End of Period (Note 8)
|
|
$
|
1,902
|
$
|
97
|
$
|
1,902
|
$
|
97
|
|
|
|
|
|
|
Cash and cash
equivalents comprised of:
|
|
|
|
|
|
|
Cash
|
|
$
|
580
|
$
|
31
|
$
|
580
|
$
|
31
|
|
Short-term
investments
|
|
1,322
|
66
|
1,322
|
66
|
|
|
$
|
1,902
|
$
|
97
|
$
|
1,902
|
$
|
97
|
(See Notes to the
Condensed Consolidated Financial Statements)
|
|
|
|
Nutrien
Ltd.
|
Condensed
Consolidated Statement of Changes in Shareholders'
Equity
|
(in millions of US
dollars)
|
(unaudited)
|
|
|
|
|
|
|
|
|
Accumulated Other
Comprehensive (Loss) Income
|
|
|
|
|
|
|
|
Net
|
|
Comprehensive
|
Total
|
|
|
|
|
|
Net fair
value
|
Net (loss)
gain
|
actuarial
|
Translation
loss
|
loss
of
|
Accumulated
|
|
|
|
|
|
loss on
|
on
derivatives
|
gain on
|
of net
foreign
|
equity-accounted
|
Other
|
|
|
|
Share
|
Contributed
|
investments
|
designated
as
|
defined
|
operations
|
investees
|
Comprehensive
|
Retained
|
Total
|
|
Capital
|
Surplus
|
(1),(2)
|
cash flow
hedges
|
benefit plans
(3)
|
(Note 11)
|
(Note 11)
|
Income
(Loss)
|
Earnings
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
Balance - December
31, 2017
|
$
|
1,806
|
$
|
230
|
$
|
73
|
$
|
(43)
|
$
|
-
|
$
|
(2)
|
$
|
(3)
|
$
|
25
|
$
|
6,242
|
$
|
8,303
|
Merger impact (Note
2)
|
15,898
|
7
|
-
|
-
|
-
|
-
|
-
|
-
|
(1)
|
15,904
|
Net
earnings
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
371
|
371
|
Other comprehensive
(loss) income
|
-
|
-
|
(79)
|
(3)
|
56
|
(146)
|
(2)
|
(174)
|
-
|
(174)
|
Shares repurchased
(Note 10)
|
(884)
|
(23)
|
-
|
-
|
-
|
-
|
-
|
-
|
(756)
|
(1,663)
|
Dividends declared
(Note 10)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(749)
|
(749)
|
Effect of share-based
compensation
|
|
|
|
|
|
|
|
|
|
|
|
including issuance of
common shares
|
8
|
17
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
25
|
Transfer of net
actuarial gain on
|
|
|
|
|
|
|
|
|
|
|
|
defined benefit
plans
|
-
|
-
|
-
|
-
|
(56)
|
-
|
-
|
(56)
|
56
|
-
|
Transfer of net loss
on sale
|
|
|
|
|
|
|
|
|
|
|
|
of
investment
|
-
|
-
|
19
|
-
|
-
|
-
|
-
|
19
|
(19)
|
-
|
Transfer of net loss
on cash flow hedges (4)
|
-
|
-
|
-
|
18
|
-
|
-
|
-
|
18
|
-
|
18
|
Balance -
September 30, 2018
|
$
|
16,828
|
$
|
231
|
$
|
13
|
$
|
(28)
|
$
|
-
|
$
|
(148)
|
$
|
(5)
|
$
|
(168)
|
$
|
5,144
|
$
|
22,035
|
(1) The
company adopted IFRS 9 "Financial Instruments" in 2018 and
reclassified available-for-sale investments as financial
instruments measured at FVTOCI.
|
(2) The
company divested its equity interests in the investment in ICL on
January 24, 2018. The loss on sale of ICL of $(19) was transferred
to retained earnings at September 30, 2018. The cumulative net
unrealized gain at December 31, 2017 was $4.
|
(3) 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.
|
(4) Net of
income taxes of $(1) for the three months ended September 30, 2018
and $(5) for the nine months ended September 30, 2018.
|
(See Notes to the
Condensed Consolidated Financial Statements)
|
Nutrien
Ltd. Condensed
Consolidated Balance Sheets (in millions of US dollars except share
amounts) (unaudited)
|
|
|
|
|
|
|
|
|
September
30
|
December
31
|
|
|
|
2018
|
2017
|
As at
|
|
|
(Note
2)
|
(Note
11)
|
|
|
|
|
|
Assets
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
|
|
$
|
1,902
|
$
|
116
|
Receivables
|
|
|
4,490
|
489
|
Inventories
|
|
|
3,910
|
788
|
Prepaid expenses and
other current assets
|
|
|
429
|
72
|
|
|
|
10,731
|
1,465
|
Assets held for sale
(Note 7)
|
|
|
945
|
1,858
|
|
|
|
11,676
|
3,323
|
Non-current
assets
|
|
|
|
|
Property, plant and
equipment (Note 4)
|
|
|
18,608
|
12,971
|
Goodwill
|
|
|
11,217
|
97
|
Other intangible
assets
|
|
|
2,256
|
69
|
Investments
|
|
|
879
|
292
|
Other
assets
|
|
|
591
|
246
|
Total
Assets
|
|
|
$
|
45,227
|
$
|
16,998
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Short-term debt (Note
9)
|
|
|
$
|
4,770
|
$
|
730
|
Current portion of
long-term debt
|
|
|
1,009
|
-
|
Payables and accrued
charges
|
|
|
4,744
|
836
|
|
|
|
10,523
|
1,566
|
Deferred income tax
liabilities on assets held for sale (Note 7)
|
|
28
|
36
|
|
|
|
10,551
|
1,602
|
Non-current
liabilities
|
|
|
|
|
Long-term
debt
|
|
|
7,587
|
3,711
|
Deferred income tax
liabilities
|
|
|
2,701
|
2,205
|
Pension and other
post-retirement benefit liabilities (Note 5)
|
|
|
446
|
440
|
Asset retirement
obligations and accrued environmental costs
|
|
1,693
|
651
|
Other non-current
liabilities
|
|
|
214
|
86
|
Total
Liabilities
|
|
|
23,192
|
8,695
|
|
|
|
|
|
Shareholders'
Equity
|
|
|
|
|
Share capital (Note
10)
|
|
|
16,828
|
1,806
|
Unlimited
authorization of common shares without par value;
issued and outstanding 612,165,448 and 840,223,041 at
September 30, 2018 and December 31, 2017, respectively
|
|
|
|
|
|
|
|
|
|
|
|
|
Contributed
surplus
|
|
|
231
|
230
|
Accumulated other
comprehensive (loss) income
|
|
|
(168)
|
25
|
Retained
earnings
|
|
|
5,144
|
6,242
|
Total
Shareholders' Equity
|
|
|
22,035
|
8,303
|
Total Liabilities
and Shareholders' Equity
|
|
|
$
|
45,227
|
$
|
16,998
|
|
|
|
|
|
|
|
(See Notes to the
Condensed Consolidated Financial Statements)
|
|
|
|
|
|
|
Nutrien Ltd.
Notes to the Condensed
Consolidated Financial Statements
As at and for the Three
and Nine Months Ended September 30,
2018
(in millions of US dollars except as
otherwise noted)
(unaudited)
1. Significant Accounting Policies
On January 1, 2018, Potash
Corporation of Saskatchewan Inc. ("PotashCorp") and Agrium Inc.
("Agrium") combined their businesses in a transaction by way of a
plan of arrangement (the "Merger") by becoming wholly-owned
subsidiaries of a new parent company named Nutrien Ltd.
(collectively with its subsidiaries, known as "Nutrien" or "the
company" except to the extent the context otherwise requires).
Nutrien is the world's largest provider of crop inputs and
services.
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 Nutrien's first
quarter 2018 unaudited condensed consolidated financial statements
("first quarter financial statements"). PotashCorp is the acquirer
for accounting purposes, and as a result, figures and related notes
for 2017 and prior reflect the historical operations of PotashCorp.
The financial statements and related notes of Nutrien in 2018 and
beyond reflect the consolidated operations of Nutrien.
These unaudited interim 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 the company's first quarter financial statements.
Further, while the financial figures included in this preliminary
interim results news release have been computed in accordance with
IFRS applicable to interim periods, this news release 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
file an interim financial report that complies with IAS 34 in its
2018 third quarter report in November
2018.
In management's opinion, the unaudited interim condensed
consolidated financial statements include all adjustments necessary
to present fairly such information in all material respects.
Interim results are not necessarily indicative of the results
expected for the fiscal year.
2. Business Combinations
Merger of Equals
As described in Note 1, PotashCorp and Agrium combined their
businesses in a merger of equals. Further information relating to
the merger of equals was previously described in Note 2 of the
company's first quarter financial statements.
The company has engaged independent valuation experts to assist
in determining the fair value of certain assets acquired and
liabilities assumed and related deferred income tax impacts in
connection with the Merger. The purchase price allocation is not
final as the company is continuing to obtain and verify information
required to determine the fair value of certain assets and
liabilities and the amount of deferred income taxes arising on
their recognition. The company estimated the preliminary purchase
price allocation as of the date of the Merger based on information
that was available and continues to adjust those estimates as new
information becomes available that existed at the date of
acquisition. The company expects to finalize the amounts recognized
as it obtains the information necessary to complete the analysis,
and in any event, not later than December
31, 2018.
Final determination of the fair values may result in further
adjustments to the values presented in the following table:
|
Preliminary
fair value as
previously
reported (1)
|
Adjustments
(2)
|
Estimated fair
value as at
September 30,
2018
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
466
|
$
|
-
|
$
|
466
|
|
Receivables
|
2,422
|
-
|
2,422
|
|
Inventories
|
3,303
|
-
|
3,303
|
|
Prepaid expenses and
other current assets
|
1,124
|
-
|
1,124
|
|
Assets held for
sale
|
95
|
-
|
95
|
|
Property, plant and
equipment
|
7,566
|
(107)
|
7,459
|
|
Goodwill
|
10,837
|
124
|
10,961
|
|
Other intangible
assets
|
2,348
|
-
|
2,348
|
|
Investments
|
528
|
-
|
528
|
|
Other
assets
|
123
|
75
|
198
|
Total
Assets
|
28,812
|
92
|
28,904
|
|
|
|
|
|
Short-term
debt
|
$
|
867
|
$
|
-
|
$
|
867
|
|
Payables and accrued
charges
|
5,226
|
13
|
5,239
|
|
Long-term
debt
|
4,941
|
-
|
4,941
|
|
Deferred income tax
liabilities
|
492
|
40
|
532
|
|
Pension and other
post-retirement benefits liabilities
|
142
|
-
|
142
|
|
Asset retirement
obligations and accrued environmental costs
|
1,055
|
39
|
1,094
|
|
Other non-current
liabilities
|
79
|
-
|
79
|
Total
Liabilities
|
12,802
|
92
|
12,894
|
Net assets
(consideration for the Merger)
|
$
|
16,010
|
$
|
-
|
$
|
16,010
|
|
(1) As
previously reported in the company's second quarter 2018 unaudited
condensed consolidated financial statements.
|
(2) The
company recorded adjustments to the preliminary fair value in the
third quarter of 2018 to reflect facts and circumstances in
existence as of the date of acquisition. These adjustments
primarily related to changes in preliminary valuation assumptions,
including refinement of property, plant and equipment, and asset
retirement obligations estimates based on new information available
that existed at the date of acquisition and recording certain
components of the tax impact of the fair value adjustments. All
measurement period adjustments were offset against
goodwill.
|
Retail Acquisitions
During the year, the retail segment acquired 43 farm centers in
North America and Australia, in addition to companies operating
within the digital agriculture, proprietary products and
agricultural services segments. Benefits of the acquisitions
include expansion of geographical coverage for the sale of crop
input products, increased customer base and workforce, continued
growth in the digital agricultural field and synergies between
Nutrien and the acquired businesses.
The purchase price allocation for these acquisitions is not
final as the company is still gathering and analyzing information
relating to the acquired assets and assumed liabilities, including
fair values and the resulting income tax impact.
The preliminary values allocated to the acquired assets and
assumed liabilities based upon fair values were as follows:
|
September 30,
2018
|
Working
capital
|
$
|
104
|
Property, plant and
equipment
|
94
|
Other intangible
assets
|
7
|
Goodwill
(1)
|
175
|
Other non-current
assets
|
14
|
Other non-current
liabilities
|
(9)
|
Total
consideration
|
$
|
385
|
|
(1)
Goodwill was calculated as the difference between the amount of
consideration transferred and the net identifiable assets
acquired.
|
3. Segment Information
The company has four reportable operating segments: retail,
potash, nitrogen and phosphate and sulfate. The retail segment
distributes crop nutrients, crop protection products, seed and
merchandise and provides services directly to growers through a
network of farm centers in North and South America and Australia. The potash, nitrogen and phosphate
and sulfate segments are differentiated by the chemical nutrient
contained in the products that each produces.
|
Three Months Ended
September 30, 2018
|
|
|
Retail
|
Potash
|
Nitrogen
|
Phosphate
and Sulfate
|
Others
|
Eliminations
|
Consolidated
|
|
|
|
|
|
|
|
|
Sales
|
- third
party
|
$
|
2,161
|
$
|
880
|
$
|
584
|
$
|
409
|
$
|
-
|
$
|
-
|
$
|
4,034
|
|
-
intersegment
|
14
|
62
|
109
|
86
|
-
|
(271)
|
-
|
Sales
|
- total
|
2,175
|
942
|
693
|
495
|
-
|
(271)
|
4,034
|
Freight,
transportation and
|
|
|
|
|
|
|
|
distribution
|
-
|
(125)
|
(81)
|
(58)
|
-
|
11
|
(253)
|
Net sales
|
2,175
|
817
|
612
|
437
|
-
|
(260)
|
|
Cost of goods
sold
|
(1,642)
|
(358)
|
(457)
|
(401)
|
-
|
232
|
(2,626)
|
Gross
margin
|
533
|
459
|
155
|
36
|
-
|
(28)
|
1,155
|
|
Selling
expenses
|
(552)
|
(3)
|
(8)
|
(3)
|
6
|
-
|
(560)
|
|
General and
administrative expenses
|
(25)
|
(3)
|
(7)
|
(2)
|
(126)
|
-
|
(163)
|
|
Provincial mining and
other taxes
|
-
|
(78)
|
(1)
|
-
|
-
|
-
|
(79)
|
|
Earnings of
equity-accounted
|
|
|
|
|
|
|
|
|
|
investees
|
1
|
-
|
17
|
-
|
(3)
|
-
|
15
|
|
Impairment of
property, plant and
|
|
|
|
|
|
|
|
|
|
equipment (Note
4)
|
-
|
(1,809)
|
-
|
-
|
-
|
-
|
(1,809)
|
|
Other income
(expenses)
|
37
|
(5)
|
(10)
|
1
|
59
|
-
|
82
|
(Loss) earnings
before finance costs and
|
|
|
|
|
|
|
|
|
income
taxes
|
(6)
|
(1,439)
|
146
|
32
|
(64)
|
(28)
|
(1,359)
|
Depreciation and
amortization
|
122
|
128
|
111
|
56
|
10
|
-
|
427
|
EBITDA
(1)
|
116
|
(1,311)
|
257
|
88
|
(54)
|
(28)
|
(932)
|
|
(1) See
reconciliation of non-IFRS measure in the Selected Non-IFRS
Financial Measures and Reconciliations and Supplemental Information
section.
|
|
Three Months Ended
September 30, 2017
|
|
|
Potash
|
Nitrogen
|
Phosphate
and Sulfate
|
Others
|
Eliminations
|
Consolidated
|
|
|
|
|
|
|
|
Sales
|
- third
party
|
$
|
595
|
$
|
288
|
$
|
351
|
$
|
-
|
$
|
-
|
$
|
1,234
|
|
-
intersegment
|
-
|
15
|
-
|
-
|
(15)
|
-
|
Sales
|
- total
|
595
|
303
|
351
|
-
|
(15)
|
1,234
|
Freight,
transportation and distribution
|
(85)
|
(33)
|
(54)
|
-
|
-
|
(172)
|
Net sales
|
510
|
270
|
297
|
-
|
(15)
|
|
Cost of goods
sold
|
(253)
|
(249)
|
(342)
|
-
|
15
|
(829)
|
Gross
margin
|
257
|
21
|
(45)
|
-
|
-
|
233
|
|
Selling
expenses
|
(2)
|
(3)
|
(1)
|
(1)
|
-
|
(7)
|
|
General and
administrative expenses
|
(2)
|
(1)
|
(1)
|
(45)
|
-
|
(49)
|
|
Provincial mining and
other taxes
|
(45)
|
-
|
-
|
-
|
-
|
(45)
|
|
Earnings of
equity-accounted
|
|
|
|
|
|
|
|
|
investees
|
-
|
3
|
-
|
-
|
-
|
3
|
|
Other
expenses
|
(5)
|
(3)
|
(1)
|
(26)
|
-
|
(35)
|
Earnings (loss)
before finance costs and
|
|
|
|
|
|
|
|
income
taxes
|
203
|
17
|
(48)
|
(72)
|
-
|
100
|
Depreciation and
amortization
|
72
|
47
|
52
|
9
|
-
|
180
|
EBITDA
|
275
|
64
|
4
|
(63)
|
-
|
280
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30, 2018
|
|
Retail
|
Potash
|
Nitrogen
|
Phosphate
and Sulfate
|
Others
|
Eliminations
|
Consolidated
|
|
|
|
|
|
|
|
|
Sales
|
- third
party
|
$
|
10,580
|
$
|
2,148
|
$
|
1,989
|
$
|
1,157
|
$
|
-
|
$
|
-
|
$
|
15,874
|
|
-
intersegment
|
36
|
180
|
419
|
246
|
-
|
(881)
|
|
Sales
|
-
total
|
10,616
|
2,328
|
2,408
|
1,403
|
-
|
(881)
|
15,874
|
Freight,
transportation and
|
|
|
|
|
|
|
|
distribution
|
-
|
(298)
|
(268)
|
(168)
|
-
|
59
|
(675)
|
Net sales
|
10,616
|
2,030
|
2,140
|
1,235
|
-
|
(822)
|
|
Cost of goods
sold
|
(8,243)
|
(912)
|
(1,576)
|
(1,128)
|
-
|
793
|
(11,066)
|
Gross
margin
|
2,373
|
1,118
|
564
|
107
|
-
|
(29)
|
4,133
|
|
Selling
expenses
|
(1,732)
|
(9)
|
(24)
|
(8)
|
15
|
-
|
(1,758)
|
|
General and
administrative expenses
|
(73)
|
(8)
|
(17)
|
(6)
|
(357)
|
-
|
(461)
|
|
Provincial mining and
other taxes
|
-
|
(188)
|
(2)
|
(1)
|
(1)
|
-
|
(192)
|
|
Earnings of
equity-accounted
|
|
|
|
|
|
|
|
|
|
investees
|
6
|
-
|
24
|
-
|
(4)
|
-
|
26
|
|
Impairment of
property, plant and
|
|
|
|
|
|
|
|
|
|
equipment (Note
4)
|
-
|
(1,809)
|
-
|
-
|
-
|
-
|
(1,809)
|
|
Other income
(expenses)
|
51
|
(13)
|
(17)
|
2
|
(94)
|
-
|
(71)
|
Earnings (loss)
before finance costs
|
|
|
|
|
|
|
|
|
and income
taxes
|
625
|
(909)
|
528
|
94
|
(441)
|
(29)
|
(132)
|
Depreciation and
amortization
|
367
|
312
|
325
|
149
|
41
|
-
|
1,194
|
EBITDA
|
992
|
(597)
|
853
|
243
|
(400)
|
(29)
|
1,062
|
|
Nine Months Ended
September 30, 2017
|
|
Potash
|
Nitrogen
|
Phosphate
and Sulfate
|
Others
|
Eliminations
|
Consolidated
|
|
|
|
|
|
|
|
Sales
|
- third
party
|
$
|
1,485
|
$
|
1,047
|
$
|
934
|
$
|
-
|
$
|
-
|
$
|
3,466
|
|
-
intersegment
|
-
|
54
|
-
|
-
|
(54)
|
-
|
Sales
|
- total
|
1,485
|
1,101
|
934
|
-
|
(54)
|
3,466
|
Freight,
transportation and distribution
|
(199)
|
(97)
|
(125)
|
-
|
|
(421)
|
Net sales
|
1,286
|
1,004
|
809
|
-
|
(54)
|
|
Cost of goods
sold
|
(646)
|
(818)
|
(869)
|
-
|
54
|
(2,279)
|
Gross
margin
|
640
|
186
|
(60)
|
-
|
-
|
766
|
|
Selling
expenses
|
(6)
|
(11)
|
(5)
|
(2)
|
-
|
(24)
|
|
General and
administrative expenses
|
(6)
|
(3)
|
(3)
|
(118)
|
-
|
(130)
|
|
Provincial mining and
other taxes
|
(121)
|
-
|
-
|
-
|
-
|
(121)
|
|
Earnings of
equity-accounted
|
|
|
|
|
|
|
|
investees
|
-
|
5
|
-
|
1
|
-
|
6
|
|
Other
expenses
|
(15)
|
(7)
|
(3)
|
(48)
|
-
|
(73)
|
Earnings (loss)
before finance costs and
|
|
|
|
|
|
|
|
income
taxes
|
492
|
170
|
(71)
|
(167)
|
-
|
424
|
Depreciation and
amortization
|
183
|
144
|
166
|
27
|
-
|
520
|
EBITDA
|
675
|
314
|
95
|
(140)
|
-
|
944
|
4. Impairment of Property, Plant and Equipment
After a strategic portfolio review was completed by the Board of
Directors during the third quarter of 2018, it was determined the
New Brunswick operations would no
longer be part of the company's medium-term or long-term strategic
plans. As a result, the New
Brunswick operations will be safely shutdown. The decision
was considered a significant change in the expected manner of use
and the related assets were moved from the Potash cash-generating
unit ("CGU") to the New Brunswick CGU. Indicators of impairment
were identified and the company conducted an impairment assessment
of the New Brunswick CGU where the estimated recoverable amount was
determined to be $50, based on fair
value less costs of disposal. Since the estimated recoverable
amount was lower than the carrying value, an impairment loss of
$1,809 ($1,320, net of tax) was recorded in the
potash segment for the three and nine months ended September 30, 2018.
5. Other Income (Expenses)
|
Three Months
Ended
|
Nine Months
Ended
|
|
September
30
|
September
30
|
|
2018
|
2017
|
2018
|
2017
|
|
|
(Note
11)
|
|
(Note
11)
|
Gain on curtailment
of defined benefit pension and other post-retirement
|
|
|
|
|
benefit
plans
|
$
|
151
|
$
|
-
|
$
|
151
|
$
|
-
|
Merger and related
costs
|
(62)
|
(10)
|
(143)
|
(33)
|
Foreign exchange
(loss) gain
|
-
|
(14)
|
2
|
(22)
|
Other
expenses
|
(7)
|
(11)
|
(81)
|
(18)
|
|
$
|
82
|
$
|
(35)
|
$
|
(71)
|
$
|
(73)
|
During the third quarter of 2018, as part of the company's
continuous assessment of its operations, participation in certain
company defined benefit pension and other post-retirement benefit
plans was suspended and/or discontinued effective January 1, 2020 based on age and years of
service. As a result, the company recognized a merger-related gain
on curtailment of defined benefit pension and other post-retirement
benefit plans ("Curtailment Gain") of $151.
6. Income Tax Recovery (Expense)
A separate estimated average annual effective tax rate was
determined for each taxing jurisdiction and applied individually to
the interim period (loss) earnings before income taxes from
continuing operations for each jurisdiction.
Income Tax Related to Continuing Operations
|
Three Months
Ended
|
Nine Months
Ended
|
|
September
30
|
September
30
|
|
2018
|
2017
|
2018
|
2017
|
Income tax recovery
(expense)
|
$
|
434
|
$
|
(24)
|
$
|
199
|
$
|
30
|
Actual effective tax
rate on (loss) earnings from continuing operations
|
29%
|
36%
|
38%
|
15%
|
Actual effective tax
rate including discrete items
|
29%
|
59%
|
38%
|
(13%)
|
Discrete tax
adjustments that impacted the tax rate
|
$
|
(2)
|
$
|
(9)
|
$
|
-
|
$
|
67
|
The actual effective tax rate on the loss from continuing
operations for the three months ended September 30, 2018 decreased compared to the same
period last year. This was primarily due to different income
weightings between jurisdictions, partially offset by the
impairment of the New Brunswick
property, plant and equipment.
The actual effective tax rate on the loss from continuing
operations for the nine months ended September 30, 2018 increased compared to the same
period last year. This was due to different income weightings
between jurisdictions, mostly a decline in Canada partially offset by an increase in
the United States, as well
as the impairment of the New
Brunswick property, plant and equipment.
In the second quarter of 2017, a discrete deferred tax recovery
of $68 was recorded as a result of a
Saskatchewan income tax rate
decrease. This decreased the actual effective tax rate including
discrete items for the nine months ended September 30, 2017 by 28 percentage points.
7. Discontinued Operations
The company's investments in Sociedad Quimica y Minera de Chile
S.A. ("SQM"), ICL and Arab Potash Company ("APC") were classified
as held for sale and as discontinued operations in December 2017, due to regulatory requirements to
dispose of these investments in connection with the Merger. The
company's share of earnings, dividend income and associated income
tax recovery (expense) pertaining to these investments were
reclassified from (loss) earnings before income taxes and income
tax recovery (expense) to net earnings from discontinued operations
on the condensed consolidated statements of (loss) earnings.
For the nine
months ended September 30, 2018:
|
|
|
|
|
|
|
|
|
|
|
Impact of Sale
on:
|
|
|
|
|
|
|
|
Proceeds
|
Gain (Loss)
on Sale
|
Net
of
Income
taxes
|
AOCI
|
Net
Earnings
and
Retained
Earnings
|
Sale of shares in SQM
(1)
|
|
|
|
$
|
1,061
|
$
|
841
|
$
|
586
|
$
|
-
|
$
|
586
|
Sale of shares in
ICL(2)
|
|
|
|
685
|
(19)
|
(19)
|
(19)
|
-
|
Sale of Conda
(3)
|
|
|
|
87
|
-
|
-
|
-
|
-
|
Total
|
|
|
|
$
|
1,833
|
$
|
822
|
$
|
567
|
$
|
(19)
|
$
|
586
|
(1) In the
second quarter of 2018, the company completed the sale of a portion
of its equity interest in SQM.
|
(2) In the
first quarter of 2018, the company completed the sale of its equity
interests in ICL through a private secondary offering.
|
|
|
(3) In the
first quarter of 2018, the company completed the sale of its Conda
phosphate operations.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
On May 17, 2018, the company
entered into an agreement with a third party for the sale of its
remaining equity interest in SQM for $4,066 before taxes and closing costs. The
agreement is subject to customary closing conditions (including
applicable regulatory approvals) and is expected to close by the
end of the fourth quarter of 2018.
On October 24, 2018, the company
completed the sale of its equity interests in APC for gross
proceeds of $502, resulting in a gain
on disposal of approximately $140,
net of income taxes of $NIL.
Net Earnings from Discontinued
Operations
|
|
|
|
|
|
|
|
Three Months
Ended
|
Nine Months
Ended
|
|
|
|
|
|
|
|
|
September
30
|
September
30
|
|
|
|
|
|
|
|
|
2018
|
2017
|
2018
|
2017
|
Gain on disposal of
investment in SQM
|
|
|
$
|
-
|
$
|
-
|
$
|
841
|
$
|
-
|
Dividend income of
SQM, APC and ICL (1)
|
|
|
30
|
5
|
156
|
17
|
Share of earnings of
SQM and APC (1)
|
|
|
|
-
|
30
|
-
|
115
|
Income tax (expense)
recovery (2)
|
|
|
|
(7)
|
2
|
(299)
|
(3)
|
Net earnings from
discontinued operations
|
|
|
$
|
23
|
$
|
37
|
$
|
698
|
$
|
129
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Earnings per
Share from Discontinued Operations
|
|
|
|
|
|
|
Basic
|
|
|
|
|
$
|
0.04
|
$
|
0.04
|
$
|
1.11
|
$
|
0.15
|
|
Diluted
|
|
|
|
|
$
|
0.04
|
$
|
0.04
|
$
|
1.11
|
$
|
0.15
|
(1) The
company's investments in SQM and APC were classified as
discontinued operations at December 1, 2017 and December 31, 2017,
respectively, and, as a result, equity accounting in respect of
these investments ceased after such dates.
|
(2) For
the three months ended September 30, 2018, income tax expense
relates to the planned repatriation of dividend income and the
remaining excess cash available in Chile. For the nine months ended
September 30, 2018, income tax expense is comprised of $255
relating to the disposals of certain SQM shares including the
planned repatriation of the net proceeds, and $44 relating to
earnings from discontinued operations ($26 for the planned
repatriation of dividend income received from SQM and $18 for the
planned repatriation of the remaining excess cash available in
Chile).
|
Cash flows from Discontinued Operations
|
|
|
|
|
|
|
|
Three Months
Ended
|
Nine Months
Ended
|
|
|
|
|
|
|
|
|
September
30
|
September
30
|
|
|
|
|
|
|
|
|
2018
|
2017
|
2018
|
2017
|
Operating
Activities
|
|
|
|
|
|
|
|
|
|
Dividends from
discontinued operations
|
|
|
$
|
30
|
$
|
38
|
$
|
156
|
$
|
133
|
Cash provided by
operating activities
|
|
|
$
|
30
|
$
|
38
|
$
|
156
|
$
|
133
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing
activities
|
|
|
|
|
|
|
|
|
|
Proceeds from
disposal of discontinued operations
|
|
$
|
14
|
$
|
-
|
$
|
1,833
|
$
|
-
|
Cash provided by
investing activities
|
|
|
$
|
14
|
$
|
-
|
$
|
1,833
|
$
|
-
|
8. Consolidated Statements of Cash Flows
In connection with the sale of one of the company's investments,
the company received $325 of cash
that is currently not available for use.
|
|
|
|
|
|
|
|
Three Months
Ended
|
Nine Months
Ended
|
|
|
|
|
|
|
|
|
September
30
|
September
30
|
|
|
|
|
|
|
|
|
2018
|
2017
|
2018
|
2017
|
|
|
|
|
|
|
|
|
|
(Note
11)
|
|
(Note
11)
|
Reconciliation of
cash (used in) provided by operating activities
|
|
|
|
|
Net (loss)
earnings
|
|
|
|
|
$
|
(1,044)
|
$
|
53
|
$
|
371
|
$
|
403
|
Adjustments to
reconcile net (loss) earnings to cash (used in) provided
by
|
|
|
|
|
operating
activities
|
|
|
|
|
|
|
|
|
Gain on sale of
investment in SQM (Note 7)
|
|
|
-
|
-
|
(841)
|
-
|
Depreciation and
amortization
|
|
|
|
427
|
180
|
1,194
|
520
|
Impairment of
property, plant and equipment (Note 4)
|
|
1,809
|
29
|
1,809
|
29
|
Net (undistributed)
distributed earnings of equity-accounted investees
|
(1)
|
1
|
(9)
|
(1)
|
Share-based
compensation
|
|
|
|
51
|
2
|
149
|
9
|
Recovery of deferred
income tax
|
|
|
|
(356)
|
(3)
|
(58)
|
(99)
|
Asset retirement
obligations and accrued environmental costs
|
(11)
|
1
|
(39)
|
3
|
Other long-term
liabilities and miscellaneous
|
|
|
(118)
|
27
|
(110)
|
71
|
Subtotal of
adjustments
|
|
|
|
|
1,801
|
237
|
2,095
|
532
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in non-cash
operating working capital
|
|
|
|
|
|
Receivables
|
|
|
|
|
327
|
(126)
|
(1,504)
|
(88)
|
Inventories
|
|
|
|
|
129
|
72
|
124
|
14
|
Prepaid expenses and
other current assets
|
|
|
(117)
|
11
|
737
|
(3)
|
Payables and accrued
charges
|
|
|
|
(1,273)
|
46
|
(1,739)
|
(14)
|
Subtotal of changes in
non-cash operating working capital
|
|
(934)
|
3
|
(2,382)
|
(91)
|
Cash (used in)
provided by operating activities
|
|
$
|
(177)
|
$
|
293
|
$
|
84
|
$
|
844
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash
flows disclosure
|
|
|
|
|
|
|
Interest
paid
|
|
|
|
|
$
|
125
|
$
|
30
|
$
|
366
|
$
|
133
|
Income taxes
paid
|
|
|
|
|
$
|
27
|
$
|
14
|
$
|
123
|
$
|
67
|
9. Short-term Debt
Short-term debt as of September 30,
2018 included $500 of
borrowings secured by $1,798 of
accounts receivable. The company retained control of the
substantial risks and rewards of accounts receivable ownership.
During the three months ended September
30, 2018, the company entered into an amending agreement to
replace its $75 unsecured line of
credit with a new $250 uncommitted
revolving credit facility repayable on demand. The covenants under
the new credit facility were the same as under the line of
credit.
Subsequent to September 30, 2018,
the company entered into an amending agreement to increase the
uncommitted revolving credit facility to $500.
10. Share Capital
Share repurchase program
On February 20, 2018, the
company's Board of Directors approved a share repurchase program of
up to five percent of the company's outstanding common shares over
a one-year period through a normal course issuer bid. Purchases
under the normal course issuer bid were made through open market
purchases at market price as well as by other means as permitted by
applicable securities regulatory authorities, including private
agreements. The company completed the share repurchase program by
September 30, 2018.
The company repurchased for cancellation 7,271,800 common shares
during the three months ended September 30,
2018, at a cost of $394 and an
average price per share of $54.15.
During the nine months ended September 30,
2018, the company repurchased for cancellation 32,209,923
common shares at a cost of $1,663 and
an average price per share of $51.62.
The repurchase resulted in a reduction of share capital, and the
excess of net cost over the average book value of the shares was
recorded as a reduction of contributed surplus and retained
earnings.
Anti-dilutive shares
The diluted weighted average shares calculation excluded 979,000
stock options and 118,000 equity-settled performance share units
for the three months ended September 30,
2018; and 621,000 stock options and 118,000 equity-settled
performance share units for the nine months ended September 30, 2018, due to their anti-dilutive
effect.
Dividends declared
Subsequent to September 30, 2018,
Nutrien's Board of Directors declared a quarterly dividend of
$0.43 per share payable on
January 17, 2019, to shareholders of
record on December 31, 2018. This
represents a 7.5 percent increase from the previously declared
dividends. The total estimated dividend to be paid is $263.
11. Comparative Figures
As described in Note 1, the comparative figures are PotashCorp
only. To conform with Nutrien's new method of presentation and as a
result of discontinued operations described in Note 7, comparative
figures were reclassified as follows, with no impact to net
earnings.
Condensed Consolidated Statements of (Loss)
Earnings
|
|
|
|
|
|
Three Months Ended
September 30, 2017
|
|
|
|
|
|
|
Previously
Reported
|
Reclassification
Amounts
|
|
Reported after
Reclassifications
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
|
$
|
(832)
|
$
|
3
|
|
$
|
(829)
|
Selling and
administrative expenses
|
|
(56)
|
56
|
|
-
|
Selling
expenses
|
|
|
-
|
(7)
|
|
(7)
|
General and
administrative expenses
|
|
-
|
(49)
|
|
(49)
|
Provincial mining and
other taxes
|
|
(47)
|
2
|
|
(45)
|
Earnings of
equity-accounted investees
|
|
33
|
(30)
|
(1)
|
3
|
Dividend
income
|
|
|
5
|
(5)
|
(1)
|
-
|
Other
expenses
|
|
|
(30)
|
(5)
|
|
(35)
|
Income
taxes
|
|
|
(22)
|
(2)
|
(1)
|
(24)
|
Net earnings from
discontinued operations
|
|
|
|
|
|
-
|
37
|
(1)
|
37
|
|
|
|
|
|
|
$
|
(949)
|
$
|
-
|
|
$
|
(949)
|
(1)
Includes reclassifications as a result of discontinued operations
described in Note 7.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30, 2017
|
|
|
|
|
|
|
Previously
Reported
|
Reclassification
Amounts
|
|
Reported after
Reclassifications
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
|
$
|
(2,292)
|
$
|
13
|
|
$
|
(2,279)
|
Selling and
administrative expenses
|
|
(154)
|
154
|
|
-
|
Selling
expenses
|
|
|
-
|
(24)
|
|
(24)
|
General and
administrative expenses
|
|
-
|
(130)
|
|
(130)
|
Provincial mining and
other taxes
|
|
(125)
|
4
|
|
(121)
|
Earnings of
equity-accounted investees
|
|
121
|
(115)
|
(1)
|
6
|
Dividend
income
|
|
|
17
|
(17)
|
(1)
|
-
|
Other
expenses
|
|
|
(56)
|
(17)
|
|
(73)
|
Income
taxes
|
|
|
27
|
3
|
(1)
|
30
|
Net earnings from
discontinued operations
|
|
|
|
|
|
-
|
129
|
(1)
|
129
|
|
|
|
|
|
|
$
|
(2,462)
|
$
|
-
|
|
$
|
(2,462)
|
(1)
Includes reclassifications as a result of discontinued operations
described in Note 7.
|
Condensed Consolidated Statements of Comprehensive (Loss)
Income
|
|
|
|
|
|
Three Months Ended
September 30, 2017
|
|
|
|
|
|
|
Previously
Reported
|
Reclassification
Amounts
|
|
Reported after
Reclassifications
|
|
|
|
|
|
|
|
Other
|
|
|
$
|
(1)
|
$
|
1
|
|
$
|
-
|
Loss on translation
of net foreign operations
|
|
-
|
-
|
|
-
|
Equity-accounted
investees
|
|
|
|
|
|
|
|
Share of other
comprehensive income
|
|
-
|
(1)
|
|
(1)
|
|
|
|
|
|
|
$
|
(1)
|
$
|
-
|
|
$
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30, 2017
|
|
|
|
|
|
|
Previously
Reported
|
Reclassification
Amounts
|
|
Reported
after
Reclassifications
|
|
|
|
|
|
|
|
Other
|
|
|
$
|
2
|
$
|
(2)
|
|
$
|
-
|
Loss on translation
of net foreign operations
|
|
-
|
-
|
|
-
|
Equity-accounted
investees
|
|
|
|
|
|
|
|
Share of other
comprehensive income
|
|
-
|
2
|
|
2
|
|
|
|
|
|
|
$
|
2
|
$
|
-
|
|
$
|
2
|
Condensed Consolidated Statements of Cash Flows
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30, 2017
|
|
|
|
|
|
|
Previously
Reported
|
Reclassification
Amounts
|
|
Reported
after Reclassifications
|
|
|
|
|
|
|
|
Pension and other
post-retirement benefits
|
|
$
|
17
|
$
|
(17)
|
|
$
|
-
|
Other long-term
liabilities and miscellaneous
|
|
10
|
17
|
|
27
|
|
|
|
|
|
|
$
|
27
|
$
|
-
|
|
$
|
27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30, 2017
|
|
|
|
|
|
|
Previously
Reported
|
Reclassification
Amounts
|
|
Reported
after Reclassifications
|
|
|
|
|
|
|
|
Pension and other
post-retirement benefits
|
|
$
|
50
|
$
|
(50)
|
|
$
|
-
|
Other long-term
liabilities and miscellaneous
|
|
21
|
50
|
|
71
|
|
|
|
|
|
|
$
|
71
|
$
|
-
|
|
$
|
71
|
Condensed Consolidated Statement of Changes in Shareholders'
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
As at December 31,
2017
|
|
|
|
|
|
|
Previously
Reported
|
Reclassification
Amounts
|
|
Reported
after Reclassifications
|
|
|
|
|
|
|
|
Other
|
|
|
$
|
(5)
|
$
|
5
|
|
$
|
-
|
Translation loss of
net foreign operations
|
|
-
|
(2)
|
|
(2)
|
Comprehensive loss of
equity-accounted investees
|
-
|
(3)
|
|
(3)
|
|
|
|
|
|
|
$
|
(5)
|
$
|
-
|
|
$
|
(5)
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Balance Sheet
|
|
|
|
|
|
As at December 31,
2017
|
|
|
|
|
|
|
Previously
Reported
|
Reclassification
.
Amounts
|
|
Reported
after Reclassifications
|
|
|
|
|
|
|
|
Intangible
assets
|
|
|
$
|
166
|
$
|
(166)
|
|
$
|
-
|
Goodwill
|
|
|
-
|
97
|
|
97
|
Other intangible
assets
|
|
|
-
|
69
|
|
69
|
|
|
|
|
|
|
$
|
166
|
$
|
-
|
|
$
|
166
|
|
|
|
|
|
|
|
|
|
|
Investments in
equity-accounted investees
|
|
$
|
30
|
$
|
(30)
|
|
$
|
-
|
Available-for-sale
investments
|
|
|
262
|
(262)
|
|
-
|
Investments
|
|
|
-
|
292
|
|
292
|
|
|
|
|
|
|
$
|
292
|
$
|
-
|
|
$
|
292
|
|
|
|
|
|
|
|
|
|
|
Short-term debt and
current portion of long-term debt
|
$
|
730
|
$
|
(730)
|
|
$
|
-
|
Short-term
debt
|
|
|
-
|
730
|
|
730
|
|
|
|
|
|
|
$
|
730
|
$
|
-
|
|
$
|
730
|
|
|
|
|
|
|
|
|
|
|
Payables and accrued
charges
|
|
|
$
|
807
|
$
|
29
|
|
$
|
836
|
Current portion of
derivative instrument liabilities
|
29
|
(29)
|
|
-
|
|
|
|
|
|
|
$
|
836
|
$
|
-
|
|
$
|
836
|
|
|
|
|
|
|
|
|
|
|
Other non-current
liabilities
|
|
|
$
|
51
|
$
|
35
|
|
$
|
86
|
Derivative instrument
liabilities
|
|
|
35
|
(35)
|
|
-
|
|
|
|
|
|
|
$
|
86
|
$
|
-
|
|
$
|
86
|
12. Subsequent Events
Subsequent to September 30, 2018,
the company signed a new natural gas purchase agreement in
Trinidad. This five-year
$1,258 contract will commence
January 1, 2019 and is set to expire
December 31, 2023. The signing of the
new contract has increased the company's minimum purchase
commitments as disclosed in the company's first quarter financial
statements as follows: 2019 – $244,
2020 – $248, 2021 – $252, 2022 – $255
and 2023 – $259.
Nutrien
Ltd.
|
Selected Financial
Data
|
(unaudited)
|
|
|
Three Months
Ended
|
Nine Months
Ended
|
|
|
September
30
|
September
30
|
|
|
2018
|
2017
|
2018
|
2017
|
|
|
|
(Nutrien)
(1)
|
|
(Nutrien)
(1)
|
Retail Sales (US $
millions)
|
|
Crop
nutrients
|
$
|
650
|
$
|
528
|
$
|
3,660
|
$
|
3,231
|
|
Crop protection
products
|
1,086
|
1,117
|
4,218
|
4,225
|
|
Seed
|
60
|
59
|
1,584
|
1,521
|
|
Merchandise
|
205
|
187
|
555
|
496
|
|
Services and
other
|
174
|
176
|
599
|
541
|
|
Sales
|
$
|
2,175
|
$
|
2,067
|
$
|
10,616
|
$
|
10,014
|
|
Retail Gross
Margin (US $ millions)
|
|
Crop
nutrients
|
$
|
142
|
$
|
120
|
$
|
739
|
$
|
680
|
|
Crop protection
products
|
236
|
243
|
885
|
858
|
|
Seed
|
14
|
21
|
277
|
274
|
|
Merchandise
|
27
|
29
|
76
|
78
|
|
Services and
other
|
114
|
105
|
396
|
361
|
|
Gross
Margin
|
$
|
533
|
$
|
518
|
$
|
2,373
|
$
|
2,251
|
|
Crop Nutrients
Sales Volumes (tonnes - thousands)
|
|
North
America
|
945
|
843
|
7,004
|
6,582
|
|
International
|
545
|
400
|
1,695
|
1,400
|
|
Crop Nutrients Sales
Volumes
|
1,490
|
1,243
|
8,699
|
7,982
|
|
|
|
|
|
|
Crop Nutrients
Selling Price per Tonne
|
|
North
America
|
$
|
459
|
$
|
444
|
$
|
432
|
$
|
417
|
|
International
|
$
|
396
|
$
|
384
|
$
|
372
|
$
|
347
|
|
Crop Nutrients
Selling Price per Tonne
|
$
|
436
|
$
|
425
|
$
|
421
|
$
|
405
|
|
|
|
|
|
|
Crop Nutrients
Gross Margin per Tonne
|
|
|
North
America
|
$
|
109
|
$
|
115
|
$
|
93
|
$
|
96
|
|
International
|
$
|
71
|
$
|
55
|
$
|
52
|
$
|
36
|
|
Crop Nutrients Gross
Margin per Tonne
|
$
|
95
|
$
|
96
|
$
|
85
|
$
|
85
|
|
|
|
|
|
|
Proprietary
products sales as a percentage of product line sales
|
|
Crop
nutrients
|
11%
|
14%
|
9%
|
10%
|
|
Crop protection
products
|
26%
|
25%
|
27%
|
26%
|
|
Seed
|
22%
|
24%
|
26%
|
26%
|
|
All
Products
|
17%
|
18%
|
18%
|
18%
|
|
|
|
|
|
|
Retail Financial
Measures (%)
|
|
|
|
|
|
Rolling four
quarters
September
30, 2018 (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Target
|
Actuals
|
EBITDA to
sales
|
|
|
10%
|
10%
|
Average working
capital to sales
|
|
|
19%
|
20%
|
Cash operating
coverage ratio
|
|
|
59%
|
59%
(3)
|
|
(1)
Represents information for legacy Agrium in 2017. Legacy PotashCorp
did not have retail operations. See reconciliations and
descriptions of this non-IFRS measure in the Selected Non-IFRS
Financial Measures and Reconciliations and Supplemental Information
section.
|
(2) EBITDA
to sales, average working capital to sales and cash operating
coverage ratio are considered non-IFRS measures. See
reconciliations and descriptions of these non-IFRS measures in the
Selected Non-IFRS Financial Measures and Reconciliations and
Supplemental Information section.
|
(3) 2018
has been adjusted for the impact of merger-related presentation
adjustments.
|
Nutrien
Ltd.
|
Selected Financial
Data
|
(unaudited)
|
|
|
|
|
|
Three Months
Ended
|
Nine Months
Ended
|
|
September
30
|
September
30
|
|
2018
|
2017
|
2018
|
2017
|
|
|
(Nutrien)
(1)
|
|
(Nutrien)
(1)
|
|
|
|
|
|
Potash Sales
Volumes (tonnes - thousands)
|
|
Manufactured
Product
|
|
|
|
|
|
|
North
America
|
1,678
|
1,373
|
3,962
|
3,639
|
|
|
Offshore
|
2,180
|
1,938
|
6,200
|
5,562
|
|
Sales Volumes -
Manufactured
|
3,858
|
3,311
|
10,162
|
9,201
|
|
|
|
|
|
Potash Net Sales
(US $ millions)
|
|
Manufactured
Product
|
|
|
|
|
|
|
North
America
|
$
|
358
|
$
|
263
|
$
|
830
|
$
|
697
|
|
|
Offshore
|
458
|
326
|
1,198
|
892
|
|
Other potash and
purchased products
|
1
|
1
|
2
|
5
|
|
Net Sales
(1)
|
$
|
817
|
$
|
590
|
$
|
2,030
|
$
|
1,594
|
|
|
|
|
|
Manufactured
Product
|
|
Net Selling Price
per Tonne
|
|
|
|
|
|
|
North
America
|
$
|
213
|
$
|
192
|
$
|
209
|
$
|
192
|
|
|
Offshore
|
$
|
210
|
$
|
168
|
$
|
193
|
$
|
160
|
|
|
Average
|
$
|
212
|
$
|
178
|
$
|
200
|
$
|
173
|
|
Cost of Goods Sold
per Tonne
|
$
|
(93)
|
$
|
(97)
|
$
|
(90)
|
$
|
(93)
|
|
Gross Margin per
Tonne
|
$
|
119
|
$
|
81
|
$
|
110
|
$
|
80
|
|
Depreciation and
Amortization per Tonne
|
$
|
33
|
$
|
28
|
$
|
31
|
$
|
29
|
Gross Margin
excluding Depreciation and Amortization per Tonne
(1)
|
$
|
152
|
$
|
109
|
$
|
141
|
$
|
109
|
Potash Cash Cost
of Product Manufactured per Tonne(1)
|
$
|
56
|
$
|
72
|
$
|
58
|
$
|
64
|
|
(1)
Combined historical results of legacy PotashCorp and legacy Agrium,
net sales, gross margin excluding depreciation and amortization and
cash cost of product manufactured are considered non-IFRS measures.
See reconciliations and descriptions of these non-IFRS measures in
the Selected Non-IFRS Financial Measures and Reconciliations and
Supplemental Information section.
|
Nutrien
Ltd.
|
Selected Financial
Data
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
Nine Months
Ended
|
|
|
|
September
30
|
September
30
|
|
|
|
2018
|
2017
|
2018
|
2017
|
|
|
|
|
(Nutrien)
(1)
|
|
(Nutrien)
(1)
|
|
|
|
|
|
|
|
Average Natural Gas
Cost in Production per MMBtu
|
$
|
2.74
|
$
|
2.72
|
$
|
2.78
|
$
|
3.04
|
Nitrogen Sales
Volumes (tonnes - thousands)
|
|
|
|
|
|
Manufactured
Product
|
|
|
|
|
|
|
Ammonia
|
750
|
724
|
2,522
|
2,603
|
|
|
Urea
|
691
|
626
|
2,316
|
2,058
|
|
|
Solutions and
nitrates
|
1,018
|
929
|
2,986
|
2,822
|
|
Sales Volumes -
Manufactured
|
2,459
|
2,279
|
7,824
|
7,483
|
|
|
|
|
|
|
|
Fertilizer
|
1,197
|
1,066
|
4,086
|
3,866
|
|
Industrial and
Feed
|
1,262
|
1,213
|
3,738
|
3,617
|
|
Sales Volumes -
Manufactured
|
2,459
|
2,279
|
7,824
|
7,483
|
|
|
|
|
|
|
Nitrogen Net Sales
(US $ millions)
|
|
|
|
|
|
Manufactured
Product
|
|
|
|
|
|
|
Ammonia
|
$
|
190
|
$
|
149
|
$
|
668
|
$
|
703
|
|
|
Urea
|
198
|
144
|
664
|
513
|
|
|
Solutions and
nitrates
|
159
|
131
|
485
|
445
|
|
Other nitrogen and
purchased products
|
65
|
72
|
323
|
361
|
|
Net Sales
(1)
|
$
|
612
|
$
|
496
|
$
|
2,140
|
$
|
2,022
|
|
|
|
|
|
|
|
Fertilizer
|
$
|
279
|
$
|
203
|
$
|
1,021
|
$
|
883
|
|
Industrial and
Feed
|
268
|
221
|
796
|
778
|
|
Other nitrogen and
purchased products
|
65
|
72
|
323
|
361
|
|
Net Sales
(1)
|
$
|
612
|
$
|
496
|
$
|
2,140
|
$
|
2,022
|
|
|
|
|
|
|
Manufactured
Product
|
|
|
|
|
|
Net Selling Price
per Tonne
|
|
|
|
|
|
|
Ammonia
|
$
|
253
|
$
|
206
|
$
|
265
|
$
|
270
|
|
|
Urea
|
$
|
286
|
$
|
228
|
$
|
286
|
$
|
249
|
|
|
Solutions and
nitrates
|
$
|
156
|
$
|
141
|
$
|
163
|
$
|
158
|
|
|
Average
|
$
|
222
|
$
|
185
|
$
|
232
|
$
|
222
|
|
|
Fertilizer
|
$
|
233
|
$
|
188
|
$
|
250
|
$
|
228
|
|
|
Industrial and
Feed
|
$
|
212
|
$
|
182
|
$
|
213
|
$
|
215
|
|
|
Average
|
$
|
222
|
$
|
185
|
$
|
232
|
$
|
222
|
|
Cost of Goods Sold
per Tonne
|
$
|
(165)
|
$
|
(165)
|
$
|
(166)
|
$
|
(168)
|
|
Gross Margin per
Tonne
|
$
|
57
|
$
|
20
|
$
|
66
|
$
|
54
|
|
Depreciation and
Amortization per Tonne
|
$
|
45
|
$
|
29
|
$
|
41
|
$
|
28
|
|
Gross Margin
excluding Depreciation and Amortization per Tonne
(1)
|
$
|
102
|
$
|
49
|
$
|
107
|
$
|
82
|
|
Urea Controllable
Cash Cost of Product Manufactured per Tonne (1),
(2)
|
$
|
72
|
$
|
86
|
$
|
73
|
$
|
78
|
|
(1)
Combined historical results of legacy PotashCorp and legacy Agrium,
net sales, gross margin excluding depreciation and amortization and
cash cost of product manufactured are considered non-IFRS measures.
See reconciliations and descriptions of these non-IFRS measures in
the Selected Non-IFRS Financial Measures and Reconciliations and
Supplemental Information section.
|
(2)
Excludes the cost of natural gas and steam.
|
Nutrien
Ltd.
|
Selected Financial
Data
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
Nine Months
Ended
|
|
|
|
September
30
|
September
30
|
|
|
|
2018
|
2017
|
2018
|
2017
|
|
|
|
|
(Nutrien)
(1)
|
|
(Nutrien)(1)
|
|
|
|
|
|
|
|
Phosphate and
Sulfate Sales Volumes (tonnes - thousands)
|
|
|
|
|
|
Manufactured
Product
|
|
|
|
|
|
|
Fertilizer
|
650
|
678
|
1,824
|
1,656
|
|
|
Industrial and
Feed
|
228
|
214
|
640
|
663
|
|
|
Ammonium
sulfate
|
104
|
85
|
263
|
284
|
|
Sales Volumes -
Manufactured
|
982
|
977
|
2,727
|
2,603
|
|
|
|
|
|
|
Phosphate and
Sulfate Net Sales (US $ millions)
|
|
|
|
|
|
Manufactured
Product
|
|
|
|
|
|
|
Fertilizer
|
$
|
267
|
$
|
223
|
$
|
740
|
$
|
581
|
|
|
Industrial and
Feed
|
114
|
101
|
318
|
324
|
|
|
Ammonium
sulfate
|
23
|
18
|
64
|
67
|
|
Other phosphate and
purchased products
|
33
|
14
|
113
|
40
|
|
Net Sales
(1)
|
$
|
437
|
$
|
356
|
$
|
1,235
|
$
|
1,012
|
|
|
|
|
|
Manufactured
Product
|
|
|
|
|
|
Net Selling Price
per Tonne
|
|
|
|
|
|
|
Fertilizer
|
$
|
411
|
$
|
329
|
$
|
406
|
$
|
351
|
|
|
Industrial and
Feed
|
$
|
498
|
$
|
474
|
$
|
496
|
$
|
490
|
|
|
Ammonium
sulfate
|
$
|
225
|
$
|
214
|
$
|
244
|
$
|
236
|
|
|
Average
|
$
|
412
|
$
|
351
|
$
|
411
|
$
|
374
|
|
Cost of Goods Sold
per Tonne
|
$
|
(376)
|
$
|
(391)
|
$
|
(373)
|
$
|
(376)
|
|
Gross Margin per
Tonne
|
$
|
36
|
$
|
(40)
|
$
|
38
|
$
|
(2)
|
|
Depreciation and
Amortization per Tonne
|
$
|
57
|
$
|
57
|
$
|
55
|
$
|
70
|
|
Gross Margin
excluding Depreciation and Amortization per Tonne
(1)
|
$
|
93
|
$
|
17
|
$
|
93
|
$
|
68
|
|
(1)
Combined historical results of legacy PotashCorp and legacy Agrium,
net sales and gross margin excluding depreciation and amortization
are considered non-IFRS measures. See reconciliations and
descriptions of these non-IFRS measures in the Selected Non-IFRS
Financial Measures and Reconciliations and Supplemental Information
section.
|
Nutrien
Ltd.
|
Selected
Additional Data
|
(unaudited)
|
|
Exchange Rate
(Cdn$/US$)
|
|
|
|
|
|
|
|
2018
|
2017
|
|
|
|
|
|
December
31
|
|
|
|
1.2545
|
September
30
|
|
|
1.2945
|
1.2480
|
Third-quarter
average conversion rate
|
|
|
1.3085
|
1.2864
|
|
|
|
|
|
|
Three Months
Ended
|
Nine Months
Ended
|
|
September
30
|
September
30
|
|
2018
|
2017
|
2018
|
2017
|
|
|
(Nutrien)
(3)
|
|
(Nutrien)
(3)
|
|
|
|
|
|
Production
|
|
|
|
|
Potash production
(Product Tonnes - thousands)
|
3,143
|
2,551
|
9,803
|
9,142
|
Potash shutdown weeks
(1)
|
8
|
12
|
32
|
24
|
Nitrogen production
(Ammonia Tonnes - thousands)
|
1,551
|
1,425
|
4,825
|
4,516
|
Ammonia operating
rate (2)
|
94%
|
79%
|
93%
|
86%
|
Phosphate production
(P2O5 Tonnes - thousands)
|
466
|
427
|
1,366
|
1,236
|
Phosphate
P2O5operating
rate
|
90%
|
83%
|
89%
|
81%
|
|
(1)
Represents weeks of full production shutdown; excludes the impact
of any periods of reduced operating rates and planned routine
annual maintenance shutdowns and announced workforce
reductions.
|
(2)
Excludes Trinidad and Joffre.
|
(3) Amount
presented is the combined historical results of legacy PotashCorp
and legacy Agrium.
|
Nutrien Ltd.
Selected Non-IFRS
Financial Measures and Reconciliations and Supplemental
Information
(in millions of US dollars except percentage
and per share amounts)
(unaudited)
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. Adjusted net earnings (in total
and per share), EBITDA, adjusted EBITDA, adjusted EBITDA margin,
free cash flow, gross margin excluding depreciation and
amortization per tonne, cash cost of product manufactured and
combined Nutrien historical information for 2017, described as
Nutrien, 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.
Retail EBITDA to sales, retail working capital to sales and retail
cash operating coverage ratio are considered to be non-IFRS
financial measures as they are calculated using information
representing legacy Agrium in 2017.
The company uses both IFRS and certain non-IFRS measures to
assess operational performance, to evaluate liquidity and financial
strength, as a valuation measurement and as a component of employee
remuneration. Management believes these non-IFRS measures provide
useful supplemental information and greater transparency to
investors in order that they may evaluate Nutrien's financial
performance using the same measures as management. 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. ADJUSTED NET EARNINGS, EBITDA,
ADJUSTED EBITDA, ADJUSTED EBITDA MARGIN and RETAIL EBITDA TO
SALES
Set forth below is a reconciliation of "adjusted net earnings"
(in total and per share) to net loss from continuing operations (in
total and per share). Adjusted net earnings is calculated as net
loss from continuing operations before purchase price allocation,
impairment, Merger and related costs, share-based compensation,
Curtailment Gain and dividend income from discontinued operations
net of tax. Nutrien uses adjusted net earnings to assess
operational performance and as a component of employee
remuneration. Management believes adjusted net earnings to be an
important measure as it excludes the effects of non-operating items
supporting a focus on the performance of the company's day-to-day
operations. As compared to net loss from continuing operations
according to IFRS, this measure is limited in that it does not
reflect the periodic costs of charges associated with the purchase
price allocation, impairment, Merger and related costs, share-based
compensation, Curtailment Gain or dividend income from discontinued
operations net of tax. Management evaluates such items through
other financial measures such as cash flow (used in) provided by
operating activities.
|
Three Months
Ended
|
Nine Months
Ended
|
|
September 30,
2018
|
September 30,
2018
|
|
Increases
(decreases)
|
Net (loss)
earnings
from
continuing
operations
impact
(post-tax)
|
Per
share
|
Increases
(decreases)
|
Net (loss)
earnings
from
continuing
operations
impact
(post-tax)
|
Per
share
|
Net loss from
continuing operations
|
|
$
|
(1,067)
|
$
|
(1.74)
|
|
$
|
(327)
|
$
|
(0.52)
|
Adjustments:
|
|
|
|
|
|
|
Purchase price
allocation
|
$
|
58
|
41
|
0.07
|
$
|
146
|
113
|
0.18
|
Impairment of
property, plant and equipment
|
1,809
|
1,320
|
2.15
|
1,809
|
1,320
|
2.10
|
Merger and related
costs
|
62
|
44
|
0.07
|
143
|
111
|
0.18
|
Share-based
compensation
|
51
|
36
|
0.06
|
149
|
115
|
0.18
|
Curtailment
Gain
|
(151)
|
(107)
|
(0.18)
|
(151)
|
(117)
|
(0.19)
|
Dividend income of SQM
and APC
|
30
|
23
|
0.04
|
156
|
130
|
0.21
|
Adjusted net
earnings
|
|
$
|
290
|
$
|
0.47
|
|
$
|
1,345
|
$
|
2.14
|
Set forth below is a reconciliation of "EBITDA" and "adjusted
EBITDA" to net (loss) earnings from continuing operations and
retail "EBITDA" to retail sales for the last four rolling quarters.
EBITDA and retail EBITDA are calculated as net (loss) earnings from
continuing operations before finance costs, income tax (recovery)
expense and depreciation and amortization. Adjusted EBITDA is
calculated as net (loss) earnings from continuing operations before
finance costs, income tax (recovery) expense and depreciation and
amortization, impairment, Merger and related costs, share-based
compensation and Curtailment Gain. Retail EBITDA to retail sales is
calculated as retail EBITDA divided by retail sales for the last
four rolling quarters, which does not have any directly comparable
IFRS measure. Nutrien uses EBITDA as a supplemental financial
measure of its operational performance. Management believes EBITDA,
adjusted EBITDA, retail EBITDA and retail EBITDA to sales to be
important measures as they exclude the effects of items that
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 (loss) earnings from continuing
operations 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 impairment, Merger
and related costs and selected corporate expenses. Management
evaluates such items through other financial measures such as
capital expenditures, cash flow (used in) provided by operating
activities and capital management ratios. The company believes that
these measurements are useful to measure a company's ability to
service debt and to meet other payment obligations and as a
valuation measurement. Retail EBITDA is also used as a component of
employee remuneration.
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 (loss) earnings from continuing
operations, adjusted EBITDA margin as compared to net (loss)
earnings from continuing operations 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 earnings from equity investees from continuing
operations whose sales are not included in consolidated sales.
Management evaluates these items individually on the consolidated
statements of (loss) earnings.
|
Three Months
Ended
|
Nine Months
Ended
|
|
September
30
|
September
30
|
|
2018
|
2017
|
2018
|
2017
|
|
|
(Nutrien)
(1)
|
|
(Nutrien)
(1)
|
Net (loss)
earnings from continuing operations
|
$
|
(1,067)
|
$
|
(53)
|
$
|
(327)
|
$
|
749
|
Finance
costs
|
142
|
135
|
394
|
379
|
Income tax (recovery)
expense
|
(434)
|
(8)
|
(199)
|
163
|
Depreciation and
amortization
|
427
|
301
|
1,194
|
911
|
EBITDA
|
$
|
(932)
|
$
|
375
|
$
|
1,062
|
$
|
2,202
|
Impairment of
property, plant and equipment
|
1,809
|
29
|
1,809
|
29
|
Merger and related
costs
|
62
|
21
|
143
|
75
|
Share-based
compensation
|
51
|
49
|
149
|
58
|
Curtailment
Gain
|
(151)
|
-
|
(151)
|
-
|
Adjusted
EBITDA
|
$
|
839
|
$
|
474
|
$
|
3,012
|
$
|
2,364
|
(1) Amount
presented is the combined historical results of legacy PotashCorp
and legacy Agrium.
|
|
|
|
|
|
Potash Adjusted
EBITDA
|
|
|
|
|
|
Three Months
Ended
|
Nine Months
Ended
|
|
September
30
|
September
30
|
|
2018
|
2017
|
2018
|
2017
|
|
|
(Nutrien)
(1)
|
|
(Nutrien)
(1)
|
EBITDA
|
$
|
(1,311)
|
$
|
303
|
$
|
(597)
|
$
|
835
|
Impairment of
property, plant and equipment
|
1,809
|
-
|
1,809
|
-
|
Adjusted
EBITDA
|
$
|
498
|
$
|
303
|
$
|
1,212
|
$
|
835
|
(1) Amount
presented is the combined historical results of legacy PotashCorp
and legacy Agrium.
|
|
Three Months
Ended
|
Nine Months
Ended
|
|
September
30
|
September
30
|
|
2018
|
2017
|
2018
|
2017
|
|
|
(Nutrien)
(1)
|
|
(Nutrien)
(1)
|
Sales
|
$
|
4,034
|
$
|
3,586
|
$
|
15,874
|
$
|
14,671
|
Freight,
transportation and distribution
|
(253)
|
(236)
|
(675)
|
(685)
|
Net
sales
|
$
|
3,781
|
$
|
3,350
|
$
|
15,199
|
$
|
13,986
|
(1) Amount
presented is the combined historical results of legacy PotashCorp
and legacy Agrium.
|
|
|
|
|
|
Net (loss)
earnings from continuing operations as a percentage of
sales
|
-26%
|
-1%
|
-2%
|
5%
|
Adjusted EBITDA
margin
|
22%
|
14%
|
20%
|
17%
|
Retail EBITDA to sales is calculated as retail EBITDA divided by
retail sales for the last four rolling quarters. Management
believes comparing retail EBITDA to sales earned is an important
indicator of efficiency and retail's operational performance.
|
Rolling four
quarters ended September 30, 2018
|
|
Q4 2017
(1)
|
Q1
2018
|
Q2
2018
|
Q3
2018
|
Total
|
Retail
EBITDA
|
$
|
241
|
$
|
(10)
|
$
|
886
|
$
|
116
|
$
|
1,233
|
Retail
Sales
|
2,089
|
2,099
|
6,342
|
2,175
|
12,705
|
(1)
Represents information for legacy Agrium in 2017. Legacy PotashCorp
did not have retail operations.
|
|
|
|
|
|
|
EBITDA to
Sales
|
|
|
|
|
10%
|
B. FREE CASH FLOW
Set forth below is a reconciliation of "free cash flow" to cash
(used in) provided by operating activities, the most directly
comparable financial measure calculated and presented in accordance
with IFRS. The company uses free cash flow as a supplemental
financial measure in its evaluation of liquidity and financial
strength and as a component of employee remuneration. Free cash
flow is calculated as cash (used in) provided by operating
activities less sustaining capital expenditures, cash provided by
operating activities from discontinued operations and changes in
non-cash operating working capital. Sustaining capital expenditures
include the cost of replacements and betterments for the company's
facilities. Management believes that adjusting principally for the
swings in non-cash operating working capital items due to
seasonality or other timing issues and sustaining capital
expenditures 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.
|
Three Months
Ended
|
Nine Months
Ended
|
|
September
30
|
September
30
|
|
2018
|
2017
|
2018
|
2017
|
|
|
(Nutrien)
(1)
|
|
(Nutrien)
(1)
|
Cash (used in)
provided by operating activities
|
$
|
(177)
|
$
|
(25)
|
$
|
84
|
$
|
589
|
Cash provided by
operating activities from discontinued operations
|
(30)
|
(48)
|
(156)
|
(143)
|
Sustaining capital
expenditures
|
(305)
|
(380)
|
(738)
|
(673)
|
Changes in non-cash
operating working capital
|
934
|
424
|
2,382
|
1,444
|
Free cash
flow
|
$
|
422
|
$
|
(29)
|
$
|
1,572
|
$
|
1,217
|
(1) Amount
presented is the combined historical results of legacy PotashCorp
and legacy Agrium.
|
C. SELECTED RETAIL METRICS
Set forth below is a reconciliation of retail's "average working
capital to sales". The company uses retail average working capital
to sales to evaluate operational efficiency. Retail's average
working capital to sales is calculated as the average working
capital divided by sales for the last four rolling quarters. A
lower or higher percentage represents increased or decreased
efficiency, respectively.
|
Rolling four
quarters ended September 30, 2018
|
|
Q4 2017
(1)
|
Q1
2018
|
Q2
2018
|
Q3
2018
|
Average/Total
|
Working
capital
|
$
|
1,587
|
$
|
1,781
|
$
|
3,170
|
$
|
3,633
|
$
|
2,543
|
Sales
|
2,089
|
2,099
|
6,342
|
2,175
|
12,705
|
(1)
Represents information for legacy Agrium in 2017. Legacy PotashCorp
did not have retail operations.
|
|
|
|
|
|
|
Average working
capital to sales
|
|
|
20%
|
Set forth below is a reconciliation of "cash operating coverage
ratio", which assists management and investors in understanding the
costs and underlying economics of the company's operations and
assessing the company's operating performance and the company's
ability to generate free cash flow from our segments and overall as
a company. Cash operating coverage ratio represents gross margin
excluding depreciation and amortization less EBITDA and
merger-related presentation adjustments, divided by gross margin
excluding depreciation and amortization expense. Given the
significance of the impact of merger-related presentation
adjustments for the nine months ended September 30, 2018, cash operating coverage ratio
calculations were revised in the third quarter of 2018.
|
Rolling four
quarters ended September 30, 2018
|
|
Q4 2017
(1)
|
Q1
2018
|
Q2
2018
|
Q3
2018
|
Total
|
Gross
margin
|
$
|
695
|
$
|
408
|
$
|
1,432
|
$
|
533
|
$
|
3,068
|
Depreciation and
amortization in cost of goods sold
|
1
|
2
|
2
|
1
|
6
|
Gross margin
excluding depreciation and amortization
|
$
|
696
|
$
|
410
|
$
|
1,434
|
$
|
534
|
$
|
3,074
|
EBITDA
|
241
|
(10)
|
886
|
116
|
1,233
|
Merger-related
presentation adjustments (2)
|
-
|
14
|
12
|
6
|
32
|
Operating expenses
excluding depreciation and amortization and merger-related
accounting adjustments
|
$
|
455
|
$
|
406
|
$
|
536
|
$
|
412
|
$
|
1,809
|
(1)
Represents information for legacy Agrium in 2017. Legacy PotashCorp
did not have retail operations.
|
(2)
Adjusted for the impact of merger-related adjustments.
|
|
|
|
|
|
|
Cash operating
coverage ratio (%)
|
|
|
59%
|
D. GROSS MARGIN EXCLUDING DEPRECIATION AND AMORTIZATION
PER TONNE
Nutrien uses "gross margin excluding depreciation and
amortization per tonne" for the company's potash, nitrogen and
phosphate and sulfate segments as a measure of operational
performance. Management believes gross margin excluding
depreciation and amortization to be an important measure as it
excludes the effects of items that primarily reflect the impact of
long-term investment and financing decisions, rather than the
performance of the company's day-to-day operations. The
reconciliation of gross margin per tonne to gross margin excluding
depreciation and amortization per tonne for the company's nutrients
are included in the Selected Financial Data section.
E. CASH COST OF PRODUCT
MANUFACTURED
Nutrien uses "cash cost of product manufactured ("cash COPM")"
per tonne to assess operational performance for the potash and
nitrogen segments. Cash COPM is calculated as cost of goods sold
for the period excluding depreciation and amortization expense and
inventory and other adjustments divided by the production tonnes
for the period. Management believes cash COPM per tonne to be an
important measure as it excludes the effects of production from
other periods and long-term investment decisions, supporting a
focus on the performance of the company's day-to-day operations.
Cash COPM is limited in that it does not reflect the impact of
manufactured product from other periods and the periodic costs of
certain capitalized tangible and intangible assets. Management
evaluates such items through other financial measures such as cash
flow from operating activities. The company believes that these
measures are useful as an indicator of efficiency.
F. NUTRIEN COMBINED 2017 HISTORICAL
INFORMATION
Nutrien uses non-IFRS combined historical information in the
evaluation of its operations and financial position. This
information is useful as it provides a measure of what the combined
results may have been had PotashCorp and Agrium merged on
January 1, 2017. The combined
historical results for Nutrien were calculated by adding the
historical IFRS financial statements prepared by PotashCorp and
Agrium and then eliminating intercompany transactions and
reclassifying line items to conform with Nutrien's financial
statement presentation. This combined historical information does
not include, among other things, estimated cost synergies,
adjustments related to restructuring or integration activities,
adjustments relating to purchase price allocation ("PPA") and the
impact of discontinued operations.
The combined historical information may differ from the Nutrien
pro forma earnings and balance sheet presented in the company's
business acquisition report dated February
20, 2018 as the pro forma information therein required
certain adjustments under applicable securities laws and accounting
standards that the company believes do not provide as useful a
measure as the combined historical financial information. The
primary differences in the statement of earnings were that pro
forma finance costs were reduced by the amortization of the change
in carrying amount of Agrium's debt resulting from the PPA and the
pro forma other expenses were adjusted to remove any Merger-related
costs. There were no comparable adjustments in the combined
historical financial information. The primary differences in the
balance sheet were the pro forma adjustments for the estimated
proceeds from the sale of SQM, APC, ICL and Agrium's Conda Idaho
phosphate production facility and adjacent phosphate mineral rights
at December 31, 2017 while there was
no adjustment in the combined historical financial information and
the PPA in the pro forma was largely allocated to goodwill as fewer
provisional fair value adjustments were known at the time of its
preparation.
Refer to the Appendix starting on page 33 of the company's first
quarter interim report for the Nutrien combined historical balance
sheet as at December 31, 2017 and the
Nutrien combined historical statement of earnings and EBITDA for
the three months ended September 30,
2017. Below is the combined historical segment EBITDA for
the nine months ended September 30,
2017, as this information was not previously provided.
|
Nine Months Ended
September 30, 2017
|
|
|
|
|
Phosphate
|
|
|
|
|
Retail
|
Potash
|
Nitrogen
|
and
Sulfate
|
Others
|
Eliminations
|
Nutrien
|
Sales
|
$
|
10,014
|
$
|
1,868
|
$
|
2,285
|
$
|
1,160
|
$
|
-
|
$
|
(656)
|
$
|
14,671
|
Freight,
transportation and distribution
|
-
|
(274)
|
(263)
|
(148)
|
-
|
-
|
(685)
|
Net Sales
|
10,014
|
1,594
|
2,022
|
1,012
|
-
|
(656)
|
|
Cost of goods
sold
|
(7,763)
|
(865)
|
(1,583)
|
(1,016)
|
-
|
663
|
(10,564)
|
Gross
margin
|
2,251
|
729
|
439
|
(4)
|
-
|
7
|
3,422
|
Selling
expenses
|
(1,490)
|
(10)
|
(24)
|
(6)
|
11
|
-
|
(1,519)
|
General and
administrative expenses
|
(74)
|
(3)
|
(8)
|
(8)
|
(254)
|
-
|
(347)
|
Provincial mining and
other taxes
|
-
|
(130)
|
-
|
-
|
-
|
-
|
(130)
|
Earnings of
equity-accounted investees
|
8
|
-
|
30
|
-
|
-
|
-
|
38
|
Other
expenses
|
(6)
|
(16)
|
(24)
|
(7)
|
(120)
|
-
|
(173)
|
Earnings (loss)
before finance costs
|
|
|
|
|
|
|
|
|
and income
taxes
|
689
|
570
|
413
|
(25)
|
(363)
|
7
|
1,291
|
Finance
costs
|
-
|
-
|
-
|
-
|
(379)
|
-
|
(379)
|
Earnings (loss)
before income taxes
|
689
|
570
|
413
|
(25)
|
(742)
|
7
|
912
|
Income
taxes
|
-
|
-
|
-
|
-
|
(163)
|
-
|
(163)
|
Net earnings (loss)
from
|
|
|
|
|
|
|
|
|
continuing
operations
|
689
|
570
|
413
|
(25)
|
(905)
|
7
|
749
|
Finance
costs
|
-
|
-
|
-
|
-
|
379
|
-
|
379
|
Income
taxes
|
-
|
-
|
-
|
-
|
163
|
-
|
163
|
Depreciation and
amortization
|
215
|
265
|
210
|
181
|
40
|
-
|
911
|
EBITDA
|
$
|
904
|
$
|
835
|
$
|
623
|
$
|
156
|
$
|
(323)
|
$
|
7
|
$
|
2,202
|
Retail
|
Nine Months Ended
September 30, 2017
|
|
Historical
|
Historical
|
|
|
|
|
PotashCorp
|
Agrium
|
Adjustments
|
|
Nutrien
|
Sales
|
|
|
|
|
|
|
External
|
$
|
-
|
$
|
9,980
|
$
|
-
|
|
$
|
9,980
|
|
Intersegment
|
-
|
34
|
-
|
|
34
|
Total
Sales
|
-
|
10,014
|
-
|
|
10,014
|
Cost of goods
sold
|
-
|
(7,763)
|
-
|
|
(7,763)
|
Gross
margin
|
-
|
2,251
|
-
|
|
2,251
|
Selling
expenses
|
-
|
(1,490)
|
-
|
|
(1,490)
|
General and
administrative expenses
|
-
|
(74)
|
-
|
|
(74)
|
Earnings of
equity-accounted investees
|
-
|
8
|
-
|
|
8
|
Other income
(expenses)
|
-
|
21
|
(27)
|
(1)
|
(6)
|
Earnings before
finance costs and income taxes
|
-
|
716
|
(27)
|
|
689
|
Depreciation and
amortization
|
-
|
215
|
-
|
|
215
|
EBITDA
|
$
|
-
|
$
|
931
|
$
|
(27)
|
|
$
|
904
|
(1)
Finance costs associated with retail operations will be allocated
to retail segment, and presented in other income
(expenses).
|
Potash
|
Nine Months Ended
September 30, 2017
|
|
Historical
|
Historical
|
|
|
|
|
PotashCorp
|
Agrium
|
Adjustments
|
|
Nutrien
|
Sales
|
|
|
|
|
|
|
External
|
$
|
1,485
|
$
|
285
|
$
|
1
|
|
$
|
1,771
|
|
Intersegment
|
-
|
97
|
-
|
|
97
|
Total
Sales
|
1,485
|
382
|
1
|
|
1,868
|
Freight,
transportation and distribution
|
(199)
|
-
|
(75)
|
(1)
|
(274)
|
Net Sales
|
1,286
|
382
|
(74)
|
|
1,594
|
Cost of goods
sold
|
(659)
|
(293)
|
87
|
(1),
(4)
|
(865)
|
Gross
margin
|
627
|
89
|
13
|
|
729
|
Selling
expenses
|
-
|
(4)
|
(6)
|
(4)
|
(10)
|
General and
administrative expenses
|
-
|
(3)
|
-
|
(3),
(4)
|
(3)
|
Provincial mining and
other taxes
|
(125)
|
-
|
(5)
|
(2),
(4)
|
(130)
|
Other
expenses
|
-
|
(10)
|
(6)
|
(2),
(4)
|
(16)
|
Earnings before
finance costs and income taxes
|
502
|
72
|
(4)
|
|
570
|
Depreciation and
amortization
|
183
|
82
|
-
|
|
265
|
EBITDA
|
$
|
685
|
$
|
154
|
$
|
(4)
|
|
$
|
835
|
(1) To
separately present legacy Agrium direct and indirect freight
costs.
|
(2)
To separately present legacy Agrium provincial mining
taxes.
|
(3)
To reclassify legacy Agrium costs related to business support
functions to others.
|
(4) To
allocate legacy PotashCorp all others segment selling and
administrative expenses to segment.
|
Nitrogen
|
Nine Months Ended
September 30, 2017
|
|
Historical
|
Historical
|
|
|
|
|
PotashCorp
|
Agrium
|
Adjustments
|
|
Nutrien
|
Sales
|
|
|
|
|
|
|
External
|
$
|
1,047
|
$
|
599
|
$
|
300
|
(2)
|
$
|
1,946
|
|
Intersegment
|
54
|
190
|
95
|
(2),
(4)
|
339
|
Total
Sales
|
1,101
|
789
|
395
|
|
2,285
|
Freight,
transportation and distribution
|
(97)
|
-
|
(166)
|
(1)
|
(263)
|
Net Sales
|
1,004
|
789
|
229
|
|
2,022
|
Cost of goods
sold
|
(818)
|
(571)
|
(194)
|
(1), (2),
(4)
|
(1,583)
|
Gross
margin
|
186
|
218
|
35
|
|
439
|
Selling
expenses
|
-
|
(9)
|
(15)
|
(2),
(5)
|
(24)
|
General and
administrative expenses
|
-
|
(8)
|
-
|
(2), (3),
(5)
|
(8)
|
Earnings of
equity-accounted investees
|
-
|
-
|
30
|
(2),
(5)
|
30
|
Other
expenses
|
-
|
(18)
|
(6)
|
(2),
(5)
|
(24)
|
Earnings before
finance costs and income taxes
|
186
|
183
|
44
|
|
413
|
Depreciation and
amortization
|
144
|
59
|
7
|
(2),
(4)
|
210
|
EBITDA
|
$
|
330
|
$
|
242
|
$
|
51
|
|
$
|
623
|
(1) To
separately present legacy Agrium direct and indirect freight
costs.
|
(2) To
reclassify legacy wholesale other Agrium segment between nitrogen
and phosphate and sulfate.
|
(3) To reclassify legacy Agrium costs
related to business support functions to others.
|
(4) To
record profit on legacy Agrium transfers of ammonia to phosphate
and sulfate segment not previously recorded.
|
(5) To
allocate legacy PotashCorp all others selling and administrative
expenses to segment.
|
Phosphate and Sulfate
|
Nine Months Ended
September 30, 2017
|
|
Historical
|
Historical
|
|
|
|
|
PotashCorp
|
Agrium
|
Adjustments
|
|
Nutrien
|
Sales
|
|
|
|
|
|
|
External
|
$
|
934
|
$
|
96
|
$
|
(9)
|
(2),
(5)
|
$
|
1,021
|
|
Intersegment
|
-
|
94
|
45
|
(2)
|
139
|
Total
Sales
|
934
|
190
|
36
|
|
1,160
|
Freight,
transportation and distribution
|
(125)
|
-
|
(23)
|
(1),
(5)
|
(148)
|
Net Sales
|
809
|
190
|
13
|
|
1,012
|
Cost of goods
sold
|
(869)
|
(179)
|
32
|
(1), (2), (3),
(5)
|
(1,016)
|
Gross
margin
|
(60)
|
11
|
45
|
|
(4)
|
Selling
expenses
|
-
|
(1)
|
(5)
|
(5)
|
(6)
|
General and
administrative expenses
|
-
|
(1)
|
(7)
|
(2),
(4)
|
(8)
|
Other
expenses
|
-
|
(4)
|
(3)
|
(2),
(4)
|
(7)
|
(Loss) earnings
before finance costs and income taxes
|
(60)
|
5
|
30
|
|
(25)
|
Depreciation and
amortization
|
166
|
12
|
3
|
(2),
(3)
|
181
|
EBITDA
|
$
|
106
|
$
|
17
|
$
|
33
|
|
$
|
156
|
(1) To
separately present legacy Agrium direct and indirect freight
costs.
|
(2) To
reclassify legacy wholesale other Agrium segment between nitrogen
and phosphate and sulfate.
|
(3) To
record incremental cost on legacy Agrium transfers of ammonia to
phosphate and sulfate segment not previously recorded.
|
(4) To
allocate legacy PotashCorp all others selling and administrative
expenses to the segment.
|
(5) To
reclassify certain phosphate products to others segment.
|
Others
|
Nine Months Ended
September 30, 2017
|
|
Historical
|
Historical
|
|
|
|
|
PotashCorp
|
Agrium
|
Adjustments
|
|
Nutrien
|
Sales
|
|
|
|
|
|
|
External
|
$
|
-
|
$
|
-
|
$
|
-
|
|
$
|
-
|
|
Intersegment
|
-
|
(523)
|
(133)
|
(1), (2),
(9)
|
(656)
|
Total
Sales
|
-
|
(523)
|
(133)
|
|
(656)
|
Cost of goods
sold
|
-
|
530
|
133
|
(1), (2),
(9)
|
663
|
Gross
margin
|
-
|
7
|
-
|
|
7
|
Selling and
administrative expenses
|
(154)
|
-
|
154
|
(10)
|
-
|
Selling
expenses
|
-
|
13
|
(2)
|
(10)
|
11
|
General and
administrative expenses
|
-
|
(84)
|
(170)
|
(4), (5),
(10)
|
(254)
|
Share-based
payments
|
-
|
(40)
|
40
|
(4)
|
-
|
Earnings of
equity-accounted investees
|
121
|
(1)
|
(120)
|
(7),
(10)
|
-
|
Dividend
income
|
17
|
-
|
(16)
|
(8)
|
1
|
Other
expenses
|
(56)
|
(58)
|
(7)
|
(10),
(11)
|
(121)
|
Loss before finance
costs
|
|
|
|
|
|
|
and income
taxes
|
(72)
|
(163)
|
(121)
|
|
(356)
|
Finance
costs
|
(180)
|
(71)
|
(128)
|
(3),
(6)
|
(379)
|
Finance costs related
to long-term debt
|
-
|
(155)
|
155
|
(6)
|
-
|
Loss before income
taxes
|
(252)
|
(389)
|
(94)
|
|
(735)
|
Income tax recovery
(expense)
|
27
|
(193)
|
3
|
(7)
|
(163)
|
Net loss from
continuing operations
|
(225)
|
(582)
|
(91)
|
|
(898)
|
Finance
costs
|
180
|
71
|
128
|
(3),
(6)
|
379
|
Finance costs related
to long-term debt
|
-
|
155
|
(155)
|
(6)
|
-
|
Income tax (recovery)
expense
|
(27)
|
193
|
(3)
|
(7)
|
163
|
Depreciation and
amortization
|
27
|
13
|
-
|
|
40
|
EBITDA
|
$
|
(45)
|
$
|
(150)
|
$
|
(121)
|
|
$
|
(316)
|
(1) To
eliminate sales made from legacy PotashCorp to legacy
Agrium.
|
(2) To
eliminate incremental sales and cost of goods sold related to
ammonia transfers to phosphate and sulfate
segment.
|
(3)
Finance costs associated with retail operations will be allocated
to retail segment, and presented in other expenses.
|
(4) To
reclassify legacy Agrium's share-based payments to general and
administrative expenses.
|
(5) To
reclassify legacy Agrium costs related to business support
functions to others.
|
(6) To
reclassify finance costs related to long-term debt to finance
costs.
|
(7) To
eliminate the earnings of legacy PotashCorp's investments in SQM
and APC.
|
(8) To
eliminate the earnings of legacy PotashCorp's investment in
ICL.
|
(9) To
eliminate legacy PotashCorp intersegment sales between nitrogen and
phosphate and sulfate.
|
(10) To
allocate legacy PotashCorp all others segment selling and
administrative expenses to segments.
|
(11) To
reclassify certain phosphate products to others segment.
|
View original
content:http://www.prnewswire.com/news-releases/nutrien-reports-solid-3rd-quarter-operating-results-raises-2018-guidance-dividend-and-synergy-target-300744289.html
SOURCE Nutrien Ltd.