Nutrien Reports Fourth Quarter and Full-Year 2024 Results

• Full-year results demonstrate significant progress towards strategic priorities and 2026 performance targets.
• 2025 guidance reflects expectation for continued growth in upstream fertilizer volumes, higher downstream Retail earnings and lower capital expenditures.

All amounts are in US dollars, except as otherwise noted

Nutrien Ltd. (TSX and NYSE:NTR) announced today its fourth quarter 2024 results, with net earnings of $118 million ($0.23 diluted net earnings per share). Fourth quarter 2024 adjusted EBITDA¹ was $1.1 billion and adjusted net earnings per share¹ was $0.31.

"Nutrien delivered higher upstream fertilizer sales volumes, accelerated operational efficiency and cost savings initiatives and increased downstream Retail earnings in 2024, demonstrating significant progress towards our 2026 performance targets. We took a disciplined and intentional approach to our capital allocation decisions, further optimizing capital expenditures and returning $1.2 billion to shareholders through dividends and share repurchases," commented Ken Seitz, Nutrien's President and CEO.

"The outlook for our business in 2025 is supported by expectations for strong crop input demand and firming potash fundamentals. Nutrien has a world-class asset base, and we remain focused on strategic priorities that strengthen our core business and deliver structural improvements to our earnings and free cash flow," added Mr. Seitz.

Highlights²:

• Generated net earnings of $700 million ($1.36 diluted net earnings per share) and adjusted EBITDA of $5.4 billion ($3.47 adjusted net earnings per share) for the full year of 2024.

• Retail adjusted EBITDA increased to $1.7 billion in 2024 supported by higher product margins and lower expenses, as we continue to simplify our business and accelerate downstream network optimization initiatives.

• Potash adjusted EBITDA decreased to $1.8 billion in 2024 as lower net selling prices more than offset increased sales volumes. We mined 35 percent of our potash ore tonnes using automation in 2024, providing efficiency, flexibility and safety benefits, while supporting our highest annual production levels on record and a reduction in controllable cash cost of product manufactured per tonne.

• Nitrogen adjusted EBITDA of $1.9 billion in 2024 was relatively flat as lower net selling prices offset higher sales volumes and lower natural gas costs. Total ammonia production increased in 2024, driven by less maintenance downtime and improved natural gas utilization and reliability at our operations in Trinidad.

• Divested non-core assets and equity investments totaling approximately $60 million in 2024, providing incremental cash flow to allocate to high conviction priorities that are core to our long-term strategy.

• Repurchased 3.9 million shares for a total of $190 million in the second half of 2024 and an additional 1.9 million shares in 2025 for $96 million as of February 18, 2025. Nutrien's Board of Directors approved the purchase of up to 5 percent of Nutrien's outstanding common shares over a twelve-month period through the renewal of our normal course issuer bid ("NCIB"), which is subject to acceptance by the Toronto Stock Exchange.

• Nutrien's Board of Directors approved an increase in the quarterly dividend to $0.545 per share. Nutrien continues to target a stable and growing dividend, having now increased the dividend per share by 36 percent since the beginning of 2018.

Market Outlook and Guidance

Agriculture and Retail Markets

• Global grain stocks-to-use ratios remain historically low and demand remains strong, providing a supportive environment for ag commodity prices in 2025. We expect US corn plantings to range between 91 and 93 million acres and soybean plantings to range from 84 to 86 million acres in 2025. The projected increase in corn acreage, combined with a shortened fall application season in 2024, supports our outlook for strong North American fertilizer demand in the first half of the year.

• In Brazil, generally favorable soil moisture conditions and stronger crop prices are expected to lead to an increase in safrinha corn planted acreage of approximately five percent, supporting crop input demand in the first half of 2025.

• A weaker Australian dollar and strong grain and oilseed export demand is supporting grower economics, and conditions remain positive for 2025 crop input demand.

Crop Nutrient Markets

• Global potash shipments rebounded to approximately 72.5 million tonnes in 2024, driven by improved supply and supportive application economics that contributed to increased demand in key markets such as China, Brazil and Southeast Asia.

• We forecast global potash shipments between 71 and 75 million tonnes in 2025. The high end of the range captures the potential for stronger underlying global consumption and the lower end captures the potential for reduced supply availability. We anticipate the potential for supply tightness with limited global capacity additions in 2025 and reported operational challenges and maintenance work in key producing regions.

• Global urea and UAN prices have increased in the first quarter of 2025, driven by strengthening demand in key import markets and restricted supply, including continued Chinese urea export restrictions. Global ammonia prices have trended lower to start the year due to seasonal demand weakness and the anticipation of incremental supply in the US and export capacity from Russia. We expect North American natural gas prices to remain highly competitive compared to Europe and Asia, with Henry Hub natural gas prices projected to average between $3.25 and $3.50 per MMBtu for the year.

• The US nitrogen supply and demand balance is expected to be tight ahead of the spring application season, as nitrogen fertilizer net imports in the first half of the 2024/2025 fertilizer year were down approximately 60 percent compared to the five-year average. Additionally, nitrogen demand for the spring season is expected to be strong due to the limited fall ammonia application season and higher projected corn acreage.

• Phosphate fertilizer markets remain firm, particularly in North America where inventories were estimated to be historically low entering 2025. We expect Chinese phosphate exports similar to 2024 levels, with total DAP/MAP exports ranging between 6 and 7 million tonnes, and tight stocks in India to support demand ahead of their key planting season.

Financial and Operational Guidance

• Retail adjusted EBITDA guidance of $1.65 to $1.85 billion assumes higher crop nutrient sales volumes, continued growth of our proprietary products and further margin recovery in Brazil. We anticipate foreign exchange headwinds in our international retail operations and the absence of asset sales and other income items realized in 2024, which combined are estimated at approximately $75 million.

• Potash sales volume guidance of 13.6 to 14.4 million tonnes is consistent with our global shipments outlook and accounts for some uncertainty regarding the possible imposition and related impact of US tariffs, as well as global supply availability.

• Nitrogen sales volume guidance of 10.7 to 11.2 million tonnes assumes continued reliability improvements and higher operating rates at our North American plants.

• Phosphate sales volume guidance of 2.35 to 2.55 million tonnes assumes lower production at our White Springs facility in the first half of 2025 and improved operating rates in the second half compared to the prior year.

• Total capital expenditures of $2.0 to $2.1 billion are expected to be lower than the prior year. Our capital expenditure program has been further optimized to sustain safe and reliable operations and to progress a set of targeted growth investments. This total includes approximately $400 to $500 million in investing capital expenditures focused on proprietary products, network optimization and digital capabilities in Retail, low-cost brownfield expansions in Nitrogen and mine automation projects in Potash.

All guidance numbers, including those noted above, are outlined in the table below. In addition, set forth below are anticipated fertilizer pricing and natural gas price sensitivities relating to adjusted EBITDA (consolidated) and adjusted net earnings per share.

Consolidated Results

Net earnings and adjusted EBITDA decreased in the fourth quarter of 2024 compared to the same period in 2023, primarily due to lower Potash net selling prices and sales volumes, partially offset by higher Retail earnings and lower expenses. For the full year of 2024, net earnings and adjusted EBITDA decreased compared to 2023 due to lower Potash and Nitrogen net selling prices, partially offset by increased Retail earnings and record Potash sales volumes. Net earnings were also impacted by a previously disclosed loss on foreign currency derivatives in the second quarter of 2024.

Segment Results

Our discussion of segment results set out on the following pages is a comparison of the results for the three and twelve months ended December 31, 2024 to the results for the three and twelve months ended December 31, 2023, unless otherwise noted.

Nutrien Ag Solutions ("Retail")

• Retail adjusted EBITDA increased in the fourth quarter of 2024 due to lower expenses and higher crop protection and seed margins, including increased proprietary products gross margins and improved margins and selling expenses in Brazil. During the fourth quarter, we recognized a $25 million gain on the sale of land in Argentina as we continue to simplify our business. Adjusted EBITDA increased for the full year, supported by higher product margins in all geographies and lower expenses.

• Crop nutrients sales decreased in the fourth quarter of 2024 due to lower sales volumes, which were impacted by wet weather in North America and strategic actions related to our margin improvement plan in Brazil. Full-year 2024 sales were impacted by lower selling prices and sales volumes. Gross margin decreased in the fourth quarter as higher per-tonne margins in North America were more than offset by lower sales volumes. For the full year, gross margin increased due to higher per-tonne margins in North America, including growth in our proprietary crop nutritional and biostimulant product lines.

• Crop protection products sales were lower in the fourth quarter and full year of 2024 mainly due to lower selling prices. Gross margin improvements for the fourth quarter and full year of 2024 were supported by proprietary products, strong operational execution and the selling through of lower cost inventory in South America compared to the same periods in 2023.

• Seed sales decreased in the fourth quarter and full year of 2024 mainly due to the impact of competitive pricing pressure in South America. Gross margin for the fourth quarter increased, supported by higher proprietary gross margin, including improved margins in South America due to strategic actions related to our margin improvement plan in Brazil. Full-year 2024 gross margin increased as improved margins in North America more than offset the impact of dry weather and competitive market pressures in Brazil.

• Merchandise sales and gross margin decreased in the fourth quarter and full year of 2024 due to reductions in Australia primarily related to weather-related impacts on water equipment sales and animal health products.

• Nutrien Financial sales and gross margin increased in the fourth quarter and full year of 2024 due to higher financing rates offered.

Potash

• Potash adjusted EBITDA decreased in the fourth quarter of 2024 due to lower net selling prices and sales volumes. Full-year 2024 adjusted EBITDA was lower mainly due to lower net selling prices, partially offset by record sales volumes. Higher potash production supported by the continued advancement of mine automation contributed to our lower controllable cash cost of product manufactured for the full year of 2024.

• Sales volumes decreased in the fourth quarter of 2024 compared to the record volumes delivered in the same period in the prior year due to a more restricted fall application window in North America and lower volumes to China and Other Asian markets. Full-year 2024 sales volumes were the highest on record, supported by low channel inventories and strong potash affordability in North America and key offshore markets.

• Net selling price per tonne decreased in the fourth quarter and full year of 2024 primarily due to a decline in benchmark prices compared to the same periods in 2023.

• Cost of goods sold per tonne increased in the fourth quarter of 2024 as higher depreciation and the impact of more planned turnaround activity more than offset lower royalties. For the full year, cost of goods sold per tonne decreased primarily due to higher production volumes and lower royalties, partially offset by higher depreciation.

Nitrogen

• Nitrogen adjusted EBITDA increased in the fourth quarter of 2024 primarily due to higher sales volumes and ammonia net selling prices. Adjusted EBITDA for the full year was relatively flat as lower net selling prices offset higher sales volumes and lower natural gas costs. Our total ammonia production increased in the fourth quarter and full year supported by less maintenance downtime and improved natural gas utilization and reliability at our operations in Trinidad.

• Sales volumes increased in the fourth quarter due to higher urea production and strong regional demand for ammonia. Full-year 2024 sales volumes increased due to higher production at our operations in Trinidad and reliability improvements across our network in North America increasing the availability of upgraded products.

• Net selling price per tonne was higher in the fourth quarter of 2024 primarily due to stronger ammonia net selling prices and a favorable geographic mix. For the full year, net selling price per tonne was lower for all major nitrogen products due to weaker benchmark prices.

• Cost of goods sold per tonne increased in the fourth quarter of 2024 mainly due to higher natural gas costs in Trinidad, partially offset by lower natural gas costs in North America. For the full year, cost of goods sold per tonne decreased primarily due to lower natural gas costs in North America and the impact of higher production volumes.

Phosphate

• Phosphate adjusted EBITDA was lower in the fourth quarter of 2024 as higher net selling prices were more than offset by the impact of lower production volumes and higher input costs. Adjusted EBITDA for the full year decreased due to weaker industrial and feed net selling prices and the impact of lower production, partially offset by lower sulfur and ammonia input costs.

• Sales volumes were lower in the fourth quarter and full year primarily due to weather-related events and plant outages that impacted production volumes.

• Net selling price per tonne increased in the fourth quarter of 2024 primarily due to the strength of fertilizer benchmark prices. For the full year of 2024, net selling price per tonne decreased due to lower industrial and feed net selling prices which reflect the typical lag in price realizations relative to benchmark prices.

• Cost of goods sold per tonne increased in the fourth quarter of 2024 due to lower production volumes, higher depreciation, and higher input costs, including sulfur. Full-year cost of goods sold per tonne increased due to lower production volumes and higher water treatment costs related to weather-related events, partially offset by lower sulfur and ammonia input costs.

Corporate and Others and Eliminations

• Share-based compensation was an expense in the fourth quarter and full year of 2024 due to an increase in the fair value of our share-based awards. We had a recovery in the same periods in 2023 as the fair value of our share-based awards decreased. The fair value of our share-based awards takes into consideration several factors such as our share price movement, our performance relative to our peer group and our return on invested capital.

• Foreign exchange loss, net of related derivatives was higher in the full year of 2024 compared to the same period in 2023 as it included a previously disclosed $220 million loss on foreign currency derivatives in Brazil.

• Other expenses were lower in the fourth quarter of 2024 compared to the same period in 2023 mainly due to a lower expense for asset retirement obligations and accrued environmental costs related to our non-operating sites partially offset by higher restructuring costs. Other expenses in the full year of 2024 were higher compared to the same period in 2023 due to an $80 million gain in the full year of 2023 from our other post-retirement benefit plan amendments. These were partially offset by lower losses related to our financial instruments in Argentina. Refer to Note 4 of the interim financial statements for additional information.

• Eliminations of gross margin in the full year of 2024 resulted from higher intersegment inventory held by our Retail segment compared to a recovery of gross margin in the full year of 2023, which reflected the sell-through of higher cost inventory.

Finance Costs, Income Taxes and Other Comprehensive Income (Loss)

• Finance costs were lower in the fourth quarter and full year of 2024 primarily due to lower average short-term debt balance from lower working capital requirements, partially offset by the increase in average long-term debt balance throughout 2024.

• Income tax was an expense in the fourth quarter of 2024 compared to a recovery in the same period in 2023 mainly due to higher earnings and lower discrete tax adjustments. In the fourth quarter of 2023, our discrete tax items included a $134 million income tax recovery due to changes in our tax declarations in Switzerland ("Swiss Tax Reform"). These factors resulted in a positive effective tax rate in the fourth quarter of 2024 compared to a negative effective tax rate in the same period in 2023.
  
  
  
  The lower income tax expense in the full year of 2024 compared to the same period in 2023 was due to lower earnings and lower discrete tax adjustments. The discrete tax adjustments in the same period in 2023 were related to a change in recognition of deferred tax assets in South America as they no longer met the asset recognition criteria, the impact of the Swiss Tax Reform, and Canadian audit assessments.

• Other comprehensive loss in the fourth quarter and full year of 2024 was mainly due to the depreciation of the Australian, Brazilian and Canadian currencies, relative to the US dollar, compared to gains for the same periods in 2023.

Forward-Looking Statements

Certain statements and other information included in this document, including within the "Market Outlook and Guidance" section, constitute "forward-looking information" or "forward-looking statements" (collectively, "forward-looking statements") under applicable securities laws (such statements are often accompanied by words such as "anticipate", "forecast", "expect", "believe", "may", "will", "should", "estimate", "project", "intend" or other similar words). All statements in this document, other than those relating to historical information or current conditions, are forward-looking statements, including, but not limited to:

Nutrien's business strategies, plans, prospects and opportunities; Nutrien's 2025 full-year guidance, including expectations regarding Retail adjusted EBITDA, Potash sales volumes, Nitrogen sales volumes, Phosphate sales volumes, depreciation and amortization, finance costs, effective tax rate on adjusted net earnings and capital expenditures, including the assumptions and expectations stated therein; our 2026 performance targets; expectations regarding our capital allocation intentions and strategies, including our target of providing a stable and growing dividend; our ability to advance strategic priorities that strengthen our core business and deliver structural improvements to our earnings and free cash flow; capital spending expectations for 2025 and beyond, including the expectation that related investments will sustain safe and reliable operations and drive growth; expectations regarding performance of our operating segments in 2025 and beyond; our operating segment market outlooks and our expectations for market conditions and fundamentals, and the anticipated supply and demand for our products and services, expected market, industry and growing conditions with respect to crop nutrient application rates, planted acres, farmer crop investment, crop mix, including the need to replenish soil nutrient levels, production volumes and expenses, shipments, natural gas costs and availability, consumption, prices, operating rates and the impact of seasonality, import and export volumes, tariffs, trade or export restrictions, economic sanctions and restrictions, operating rates, inventories, crop development and natural gas curtailments; the negotiation of sales contracts; acquisitions and divestitures and the anticipated benefits thereof; and expectations in connection with our ability to deliver long-term returns to shareholders.

These forward-looking statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from such forward-looking statements. As such, undue reliance should not be placed on these forward-looking statements.

All of the forward-looking statements are qualified by the assumptions that are stated or inherent in such forward-looking statements, including the assumptions referred to below and elsewhere in this document. Although we believe that these assumptions are reasonable, having regard to our experience and our perception of historical trends, this list is not exhaustive of the factors that may affect any of the forward-looking statements and the reader should not place undue reliance on these assumptions and such forward-looking statements. Current conditions, economic and otherwise, render assumptions, although reasonable when made, subject to greater uncertainty.

The additional key assumptions that have been made in relation to the operation of our business as currently planned and our ability to achieve our business objectives include, among other things, assumptions with respect to: our ability to successfully implement our business strategies, growth and capital allocation investments and initiatives that we will conduct our operations and achieve results of operations as anticipated; our ability to successfully complete, integrate and realize the anticipated benefits of our already completed and future acquisitions and divestitures, and that we will be able to implement our standards, controls, procedures and policies in respect of any acquired businesses and to realize the expected synergies on the anticipated timeline or at all; that future business, regulatory and industry conditions will be within the parameters expected by us, including with respect to prices, expenses, margins, demand, supply, product availability, shipments, consumption, weather conditions, supplier agreements, product distribution agreements, inventory levels, exports, tariffs, including general or retaliatory tariffs, trade restrictions, international trade arrangements, crop development and cost of labor and interest, exchange and effective tax rates; potash demand growth in offshore markets and normalization of Canpotex port operations; global economic conditions and the accuracy of our market outlook expectations for 2025 and in the future; assumptions related to our assessment of recoverable amount estimates of our assets, including in relation to our Retail - Brazil business asset impairments; our intention to complete share repurchases under our normal course issuer bid programs, the funding of such share repurchases, existing and future market conditions, including with respect to the price of our common shares, capital allocation priorities and compliance with respect to applicable limitations under securities laws and regulations and stock exchange policies and assumptions related to our ability to fund our dividends at the current level; our expectations regarding the impacts, direct and indirect, of certain geopolitical conflicts, including the war in Eastern Europe and the conflict in the Middle East on, among other things, global supply and demand, including for crop nutrients, energy and commodity prices, global interest rates, supply chains and the global macroeconomic environment, including inflation; 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; availability of investment opportunities that align with our strategic priorities and growth strategy; our ability to maintain investment grade ratings and achieve our performance targets; and our ability to successfully negotiate sales and other contracts and our ability to successfully implement new initiatives and programs.

Events or circumstances that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to: general global economic, market and business conditions; failure to achieve expected results of our business strategy, capital allocation initiatives, results of operations or targets, such as our targeted $200 million in annual consolidated cost savings, expected capital expenditures in 2025, delivering upstream fertilizer sales volume growth and advancing high-return downstream Retail growth opportunities; failure to complete announced and future acquisitions or divestitures at all or on the expected terms and within the expected timeline; seasonality; climate change and weather conditions, including impacts from regional flooding and/or drought conditions; crop planted acreage, yield and prices; the supply and demand and price levels for our products; governmental and regulatory requirements and actions by governmental authorities, including changes in government policy (including general or retaliatory tariffs, trade restrictions, including the imposition of any tariffs, or other changes to international trade arrangements; the effects of current and future multinational trade agreements or other developments affecting the level of trade or export restrictions and climate change initiatives), government ownership requirements, changes in environmental, tax, antitrust and other laws or regulations and the interpretation thereof; political or military risks, including civil unrest, actions by armed groups or conflict and malicious acts including terrorism and industrial espionage; our ability to access sufficient, cost-effective and timely transportation, distribution and storage of products (including potential rail transportation and port disruptions due to labor strikes and/or work stoppages or other similar actions); the occurrence of a major environmental or safety incident or becoming subject to legal or regulatory proceedings; innovation and cybersecurity risks related to our systems, including our costs of addressing or mitigating such risks; counterparty and sovereign risk; delays in completion of turnarounds at our major facilities or challenges related to our major facilities that are out of our control; interruptions of or constraints in availability of key inputs, including natural gas and sulfur; any significant impairment of the carrying amount of certain assets; the risk that rising interest rates and/or deteriorated business operating results may result in the further impairment of assets or goodwill attributed to certain of our cash generating units; risks related to reputational loss; certain complications that may arise in our mining processes; the ability to attract, engage and retain skilled employees and strikes or other forms of work stoppages; geopolitical conflicts, including the war in Eastern Europe and the conflict in the Middle East, and their potential impact on, among other things, global market conditions and supply and demand, including for crop nutrients, energy and commodity prices, interest rates, supply chains and the global economy generally; our ability to execute on our strategies related to environmental, social and governance matters, and achieve related expectations, targets and commitments, including risks associated with disclosure thereof; and other risk factors detailed from time to time in Nutrien reports filed with the Canadian securities regulators and the SEC.

The purpose of our revised Retail adjusted EBITDA and our depreciation and amortization, finance costs, effective tax rate and capital expenditures guidance ranges are to assist readers in understanding our expected and targeted financial results, and this information may not be appropriate for other purposes.

The forward-looking statements in this document are made as of the date hereof and Nutrien disclaims any intention or obligation to update or revise any forward-looking statements in this document as a result of new information or future events, except as may be required under applicable Canadian securities legislation or applicable US federal securities laws.

Terms and Definitions

For the definitions of certain financial and non-financial terms used in this document, as well as a list of abbreviated company names and sources, see the "Terms and definitions" section of our 2023 Annual Report. All references to per share amounts pertain to diluted net earnings (loss) per share, "n/m" indicates information that is not meaningful, and all financial amounts are stated in millions of US dollars, unless otherwise noted.

About Nutrien

Nutrien is a leading global provider of crop inputs and services. We operate a world-class network of production, distribution and ag retail facilities that positions us to efficiently serve the needs of farmers. We focus on creating long-term value by prioritizing investments that strengthen the advantages of our business across the ag value chain and by maintaining access to the resources and the relationships with stakeholders needed to achieve our goals.

More information about Nutrien can be found at www.nutrien.com.

Selected financial data for download can be found in our data tool at www.nutrien.com/investors/interactive-datatool

Such data is not incorporated by reference herein.

Nutrien will host a Conference Call on Thursday, February 20, 2025 at 10:00 a.m. Eastern Time.

Telephone conference dial-in numbers:

• From Canada and the US: 1 (800) 206-4400
• International: 1 (289) 514-5005
• 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/news/events/2024-q4-earnings-conference-call

Non-GAAP Financial Measures

We use both IFRS measures and certain non-GAAP financial measures to assess performance. Non-GAAP financial measures are financial measures disclosed by the Company that: (a) depict historical or expected future financial performance, financial position or cash flow of the Company; (b) with respect to their composition, exclude amounts that are included in, or include amounts that are excluded from, the composition of the most directly comparable financial measure disclosed in the primary financial statements of the Company; (c) are not disclosed in the financial statements of the Company; and (d) are not a ratio, fraction, percentage or similar representation. Non-GAAP ratios are financial measures disclosed by the Company that are in the form of a ratio, fraction, percentage or similar representation that has a non-GAAP financial measure as one or more of its components, and that are not disclosed in the financial statements of the Company.

These non-GAAP financial measures and non-GAAP ratios are not standardized financial measures under IFRS and, therefore, are unlikely to be comparable to similar financial measures presented by other companies. Management believes these non-GAAP financial measures and non-GAAP ratios provide transparent and useful supplemental information to help investors evaluate our financial performance, financial condition and liquidity using the same measures as management. These non-GAAP financial measures and non-GAAP ratios should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with IFRS.

The following section outlines our non-GAAP financial measures and non-GAAP ratios, their compositions, and why management uses each measure. It also includes reconciliations to the most directly comparable IFRS measures. Except as otherwise described herein, our non-GAAP financial measures and non-GAAP ratios are calculated on a consistent basis from period to period and are adjusted for specific items in each period, as applicable. As additional non-recurring or unusual items arise in the future, we generally exclude these items in our calculations.

Adjusted EBITDA (Consolidated)

Most directly comparable IFRS financial measure: Net earnings (loss).

Definition: Adjusted EBITDA is calculated as net earnings (loss) before finance costs, income taxes, depreciation and amortization, share-based compensation and foreign exchange gain/loss (net of related derivatives). We also adjust this measure for the following other income and expenses that are excluded when management evaluates the performance of our day-to-day operations: integration and restructuring related costs, impairment or reversal of impairment of assets, gain or loss on disposal of certain businesses and investments, asset retirement obligations ("ARO") and accrued environmental costs ("ERL") related to our non-operating sites, and loss related to financial instruments in Argentina.

Why we use the measure and why it is useful to investors: It is not impacted by long-term investment and financing decisions, but rather focuses on the performance of our day-to-day operations. It provides a measure of our ability to service debt and to meet other payment obligations and as a component of employee remuneration calculations.

Adjusted Net Earnings and Adjusted Net Earnings Per Share

Most directly comparable IFRS financial measure: Net earnings (loss) and diluted net earnings (loss) per share.

Definition: Adjusted net earnings and related per share information are calculated as net earnings (loss) before share-based compensation and foreign exchange gain/loss (net of related derivatives), net of tax. We also adjust this measure for the following other income and expenses (net of tax) that are excluded when management evaluates the performance of our day-to-day operations: certain integration and restructuring related costs, impairment or reversal of impairment of assets, gain or loss on disposal of certain businesses and investments, gain or loss on early extinguishment of debt or on settlement of derivatives due to discontinuance of hedge accounting, asset retirement obligations and accrued environmental costs related to our non-operating sites, loss related to financial instruments in Argentina, change in recognition of tax losses and deductible temporary differences related to impairments and certain changes to tax declarations. We generally apply the annual forecasted effective tax rate to specific adjustments during the year, and at year-end, we apply the actual effective tax rate.

Why we use the measure and why it is useful to investors: Focuses on the performance of our day-to-day operations and is used as a component of employee remuneration calculations.

Effective Tax Rate on Adjusted Net Earnings

Effective tax rate on adjusted net earnings guidance is a forward-looking non-GAAP financial measure as it includes adjusted net earnings, which is a non-GAAP financial measure. It is provided to assist readers in understanding our expected financial results. Effective tax rate on adjusted net earnings guidance excludes certain items that management is aware of that permit management to focus on the performance of our operations (see the Adjusted Net Earnings and Adjusted Net Earnings Per Share section for items generally adjusted). We do not provide a reconciliation of this forward-looking measure to the most directly comparable financial measures calculated and presented in accordance with IFRS because a meaningful or accurate calculation of reconciling items and the information is not available without unreasonable effort due to unknown variables, including the timing and amount of certain reconciling items, and the uncertainty related to future results. These unknown variables may include unpredictable transactions of significant value that may be inherently difficult to determine without unreasonable efforts. The probable significance of such unavailable information, which could be material to future results, cannot be addressed.

Effective tax rate on adjusted net earnings ratio is calculated as adjusted income tax expense divided by adjusted earnings before income taxes. We use this measure to provide the actual result for a previously disclosed forward-looking effective tax rate on adjusted net earnings guidance. 

Gross Margin Excluding Depreciation and Amortization Per Tonne – Manufactured Product

Most directly comparable IFRS financial measure: Gross margin.

Definition: Gross margin per tonne less depreciation and amortization per tonne for manufactured products. Reconciliations are provided in the "Segment Results" section.

Why we use the measure and why it is useful to investors: Focuses on the performance of our day-to-day operations, which excludes the effects of items that primarily reflect the impact of long-term investment and financing decisions.

Potash Controllable Cash Cost of Product Manufactured ("COPM") Per Tonne

Most directly comparable IFRS financial measure: Cost of goods sold ("COGS") for the Potash segment.

Definition: Total Potash COGS excluding depreciation and amortization expense included in COPM, royalties, natural gas costs and carbon taxes, change in inventory, and other adjustments, divided by potash production tonnes.

Why we use the measure and why it is useful to investors: To assess operational performance. Potash controllable cash COPM excludes the effects of production from other periods and the impacts of our long-term investment decisions, supporting a focus on the performance of our day-to-day operations. Potash controllable cash COPM also excludes royalties and natural gas costs and carbon taxes, which management does not consider controllable, as they are primarily driven by regulatory and market conditions.

Nutrien Financial Adjusted Net Interest Margin

Definition: Nutrien Financial revenue less deemed interest expense divided by average Nutrien Financial net receivables outstanding for the last four rolling quarters.

Why we use the measure and why it is useful to investors: Used by credit rating agencies and others to evaluate the financial performance of Nutrien Financial.

Retail Cash Operating Coverage Ratio

Definition: Retail selling, general and administrative, and other expenses (income), excluding depreciation and amortization expense, divided by Retail gross margin excluding depreciation and amortization expense in cost of goods sold, for the last four rolling quarters.

Why we use the measure and why it is useful to investors: To understand the costs and underlying economics of our Retail operations and to assess our Retail operating performance and ability to generate cash flow.

Retail Adjusted Average Working Capital to Sales and Retail Adjusted Average Working Capital to Sales Excluding Nutrien Financial

Definition: Retail adjusted average working capital divided by Retail adjusted sales for the last four rolling quarters. We exclude in our calculations the sales and working capital of certain acquisitions during the first year following the acquisition. We also look at this metric excluding Nutrien Financial revenue and working capital.

Why we use the measure and why it is useful to investors: To evaluate operational efficiency. A lower or higher percentage represents increased or decreased efficiency, respectively. The metric excluding Nutrien Financial shows the impact that the working capital of Nutrien Financial has on the ratio.

Other Financial Measures

Selected Additional Financial Data

Supplementary Financial Measures

Supplementary financial measures are financial measures disclosed by the Company that (a) are, or are intended to be, disclosed on a periodic basis to depict the historical or expected future financial performance, financial position or cash flow of the Company, (b) are not disclosed in the financial statements of the Company, (c) are not non-GAAP financial measures, and (d) are not non-GAAP ratios.

The following section provides an explanation of the composition of those supplementary financial measures, if not previously provided.

Sustaining capital expenditures: Represents capital expenditures that are required to sustain operations at existing levels and include major repairs and maintenance and plant turnarounds.

Investing capital expenditures: Represents capital expenditures related to significant expansions of current operations or to create cost savings (synergies). Investing capital expenditures excludes capital outlays for business acquisitions and equity-accounted investees.

Mine development and pre-stripping capital expenditures: Represents capital expenditures that are required for activities to open new areas underground and/or develop a mine or ore body to allow for future production mining and activities required to prepare and/or access the ore, i.e., removal of an overburden that allows access to the ore.

Cash used for dividends and share repurchases: Calculated as dividends paid to Nutrien's shareholders plus repurchase of common shares as reflected in the unaudited condensed consolidated statements of cash flows. This measure is useful as it represents return of capital to shareholders.

Condensed Consolidated Financial Statements