EX-99.2

EX-99.2 3 d368819dex992.htm EX-99.2 EX-99.2

Exhibit 99.2

LOGO

NUTRIEN LTD.

MANAGEMENT’S DISCUSSION AND ANALYSIS

AS AT AND FOR THE THREE AND SIX MONTHS ENDED

JUNE 30, 2022

Management’s Discussion and Analysis

The following management’s discussion and analysis (“MD&A”) is the responsibility of management and is dated as of August 3, 2022. The Board of Directors (“Board”) of Nutrien carries out its responsibility for review of this disclosure principally through its audit committee, comprised exclusively of independent directors. The audit committee reviews and, prior to its publication, approves this disclosure pursuant to the authority delegated to it by the Board. The term “Nutrien” refers to Nutrien Ltd. and the terms “we”, “us”, “our”, “Nutrien” and “the Company” refer to Nutrien and, as applicable, Nutrien and its direct and indirect subsidiaries on a consolidated basis. Additional information relating to Nutrien (which, except as otherwise noted, is not incorporated by reference herein), including our annual report dated February 17, 2022 (“2021 Annual Report”), which includes our annual audited consolidated financial statements and MD&A, and our annual information form dated February 17, 2022 (“2021 Annual Information Form”), each for the year ended December 31, 2021, can be found on SEDAR at www.sedar.com and on EDGAR at www.sec.gov. No update is provided to the disclosure in our 2021 annual MD&A except for material information since the date of our annual MD&A. The Company is a foreign private issuer under the rules and regulations of the US Securities and Exchange Commission (the “SEC”).

This MD&A is based on and should be read in conjunction with the Company’s unaudited interim condensed consolidated financial statements as at and for the three and six months ended June 30, 2022 (“interim financial statements”) based on International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board and prepared in accordance with International Accounting Standard 34 “Interim Financial Reporting”, unless otherwise noted. This MD&A contains certain non-IFRS financial measures and ratios and forward-looking statements, which are described in the “Non-IFRS Financial Measures” and the “Forward-Looking Statements” sections, respectively.

Market Outlook and Guidance

Agriculture and Retail

•

Global grain and oilseed stocks-to-use ratios remain well below historical average levels, which we believe will continue to be supportive for crop prices. Prices for key crops such as corn, soybeans and wheat are up 25 to 35 percent compared to the 10-year average, providing strong incentive for growers to increase production.

•

The US Department of Agriculture (USDA) projects that Ukrainian wheat and corn production will be down by more than 40 percent and combined Ukrainian exports of corn, wheat and barley will be down by approximately 60 percent year-over-year in 2022/23. While diplomatic efforts to restore exports from Ukrainian ports has progressed, the overall reduction in Ukrainian production in 2022 is expected to continue to constrain supplies for the forthcoming year.

•

US crop conditions started the 2022 growing season favorably, however, recent hot and dry weather has accelerated crop development and could limit yield potential. In Western Canada, growing conditions have improved from the severe 2021 drought. We expect the combination of robust grower economics and favorable growing conditions to support demand for crop nutritional products, fungicides and insecticides in the third quarter of 2022.

•

Prospective Brazilian grower margins remain historically high and analysts expect a 2 to 4 percent increase in soybean planted area in the 2022 planting season. While we expect this to support overall crop input demand, fertilizer inventories have been slow to move from port to inland positions and we expect import demand will resurface as these inventories move inland for Brazil’s spring planting season in the second half of 2022.

Crop Nutrient Markets

•

Restricted supplies of potash from Russia and Belarus kept potash prices at historically high levels through the first half of 2022. Potash shipments from Russia and Belarus were estimated to be down approximately 25 and 50 percent respectively in the first half of 2022, with the majority of Belarus exports occurring in the first quarter. We have narrowed our global potash shipment forecast to between 61 and 64 million tonnes in 2022 and continue to expect demand to be constrained by restrictions on exports from Russia and Belarus.

•

A dramatic increase in European natural gas prices has once again led to reduced nitrogen operating rates in the region. Tightening European ammonia supplies and significantly reduced Russian ammonia exports from the Black Sea are pressuring global ammonia availability. We expect strong seasonal nitrogen demand in the second half of 2022 following a period of delayed purchases due to benchmark price volatility.

•

The Chinese government continues to impose export restrictions on urea and phosphate fertilizers that are expected to limit its export volumes in the second half of 2022.

Financial Guidance

•

Nutrien revised full-year 2022 adjusted EBITDA guidance¹ and full-year 2022 adjusted net earnings per share guidance¹ primarily due to lower expected Nitrogen earnings as a result of lower nitrogen benchmark pricing and higher natural gas costs. Retail adjusted EBITDA guidance was increased to reflect strong performance in the second quarter. Adjusted net earnings per share guidance includes our plans to allocate approximately $5 billion to share repurchases in 2022.

•

Nutrien lowered potash and nitrogen sales volume guidance to reflect the impact of lower application in North America this spring.

All guidance numbers, including those noted above are outlined in the table below. Refer to page 53 of Nutrien’s 2021 Annual Report for related assumptions and sensitivities.

Guidance Ranges¹ as of

Aug. 3, 2022

May 2, 2022

(billions of US dollars, except as otherwise noted)

Low

High

Low

High

Adjusted net earnings per share ²

15.80

17.80

16.20

18.70

Adjusted EBITDA ²

14.0

15.5

14.5

16.5

Retail adjusted EBITDA

2.1

2.2

1.8

1.9

Potash adjusted EBITDA

7.6

8.2

7.5

8.3

Nitrogen adjusted EBITDA

4.0

4.7

5.0

5.8

Phosphate adjusted EBITDA (in US millions)

750

850

800

900

Potash sales tonnes (millions) ³

14.3

14.9

14.5

15.1

Nitrogen sales tonnes (millions) ³

10.6

11.0

10.7

11.1

Depreciation and amortization

2.0

2.1

2.0

2.1

Effective tax rate on adjusted earnings (%)

25.5

26.5

25.5

26.5

Sustaining capital expenditures ⁴

1.3

1.2

1.3

1 See the “Forward-Looking Statements” section.

2 These are non-IFRS financial measures. See the “Non-IFRS Financial Measures” section.

3 Manufactured product only. Nitrogen sales tonnes excludes ESN^® products.

4 This is a supplementary financial measure. See the “Other Financial Measures” section.

Consolidated Results


	Three Months Ended June 30					Six Months Ended June 30
(millions of US dollars, except as otherwise noted)		2022	2021	% Change			2022	2021	% Change
Sales		14,506	9,763	49			22,163	14,421	54
Freight, transportation and distribution		221	222	-			424	433	(2	)
Cost of goods sold		8,286	6,659	24			12,483	9,950	25
Gross margin		5,999	2,882	108			9,256	4,038	129
Expenses		1,054	1,263	(17	)		2,312	2,141	8
Net earnings		3,601	1,113	224			4,986	1,246	300
Adjusted EBITDA ¹		4,993	2,215	125			7,608	3,021	152
Diluted net earnings per share		6.51	1.94	236			8.99	2.16	316
Adjusted net earnings per share ¹		5.85	2.08	181			8.53	2.37	260
Cash provided by operating activities		2,558	1,966	30			2,496	1,814	38
Free cash flow ¹		3,413	1,413	142			5,227	1,889	177
Free cash flow including changes in non-cash operating working capital ¹		2,302	1,662	39			2,046	1,346	52

1 These are non-IFRS financial measures. See the “Non-IFRS Financial Measures” section.

Net earnings and adjusted EBITDA more than doubled in the second quarter and first half of 2022 compared to the same period in 2021. This was due to higher net realized selling prices from global supply uncertainties across our nutrient businesses and strong Retail performance. In the second quarter of 2022, we recorded a non-cash impairment reversal of $450 million related to our Phosphate operations which impacted net earnings. Cash provided by operating activities increased in the second quarter and first half of 2022 compared to the same period in 2021 due primarily to higher net earnings.

Segment Results

Our discussion of segment results set out on the following pages is a comparison of the results for the three and six months ended June 30, 2022 to the results for the three and six months ended June 30, 2021, unless otherwise noted.

Nutrien Ag Solutions (“Retail”)


	Three Months Ended June 30

(millions of US dollars, except	Dollars									Gross Margin									Gross Margin (%)
as otherwise noted)	2022			2021			% Change			2022			2021			% Change			2022		2021
Sales

Crop nutrients		4,548			3,045			49			911			703			30			20		23

Crop protection products		2,983			2,666			12			805			587			37			27		22

Seed		1,269			1,216			4			283			237			19			22		19

Merchandise		280			268			4			51			45			13			18		17

Nutrien Financial		91			59			54			91			59			54			100		100

Services and other ¹		310			320			(3	)		258			264			(2	)		83		83
Nutrien Financial elimination ^{1, 2}		(59	)		(37	)		59			(59	)		(37	)		59			100		100
		9,422			7,537			25			2,340			1,858			26			25		25
Cost of goods sold		7,082			5,679			25
Gross margin		2,340			1,858			26
Expenses ³		1,088			938			16
Earnings before finance costs and taxes (“EBIT”)		1,252			920			36
Depreciation and amortization		175			169			4
EBITDA		1,427			1,089			31
Adjustments ⁴		-			8			(100	)
Adjusted EBITDA		1,427			1,097			30
1 Certain immaterial figures have been reclassified for the three months ended June 30, 2021.
2 Represents elimination for the interest and service fees charged by Nutrien Financial to Retail branches.
3 Includes selling expenses of $1,013 million (2021 – $863 million).
4 See Note 2 to the interim financial statements.

	Six Months Ended June 30

(millions of US dollars, except	Dollars									Gross Margin									Gross Margin (%)
as otherwise noted)	2022			2021			% Change			2022			2021			% Change			2022		2021
Sales

Crop nutrients		6,135			4,061			51			1,203			923			30			20		23

Crop protection products		4,370			3,751			17			1,087			763			42			25		20

Seed		1,727			1,679			3			349			306			14			20		18

Merchandise		514			498			3			92			83			11			18		17

Nutrien Financial		140			84			67			140			84			67			100		100

Services and other ¹		485			485			-			402			400			1			83		82
Nutrien Financial elimination ¹		(88	)		(49	)		80			(88	)		(49	)		80			100		100
		13,283			10,509			26			3,185			2,510			27			24		24
Cost of goods sold		10,098			7,999			26
Gross margin		3,185			2,510			27
Expenses ²		1,843			1,659			11
EBIT		1,342			851			58
Depreciation and amortization		344			346			(1	)
EBITDA		1,686			1,197			41
Adjustments ³		(19	)		9			n/m
Adjusted EBITDA		1,667			1,206			38
1 Certain immaterial figures have been reclassified for the six months ended June 30, 2021.
2 Includes selling expenses of $1,735 million (2021 – $1,530 million).
3 See Note 2 to the interim financial statements.

•

Adjusted EBITDA increased in the second quarter and first half of 2022 due to higher sales and gross margins across nearly all product categories and regions where we operate. This was supported by strong agriculture fundamentals, higher selling prices and growth in proprietary products sales. Retail cash operating coverage ratio¹ improved as at June 30, 2022 to 54 percent from 60 percent in the same period in 2021 due to significantly higher gross margin.

•

Crop nutrients sales and gross margin increased significantly in the second quarter and first half of 2022 due to higher selling prices. Gross margin per tonne increased in the second quarter and first half of 2022 compared to the same periods in the prior year due to strategic procurement and the timing of inventory purchases. Sales volumes decreased due to a pull forward of sales into the fourth quarter of 2021 and reduced application resulting from a delayed planting season in North America.

1. These (and any related guidance, if applicable) are non-IFRS financial measures. See the “Non-IFRS Financial Measures” section for further information.

•

Crop protection products sales and gross margin increased in the second quarter and first half of 2022 in all regions we operate due to higher prices, along with increased sales and gross margin in proprietary products. Gross margin percent increased by 5 percentage points in the second quarter and first half of 2022, supported by the reliability of our supply chain and strategic procurement in a rising price environment.

•

Seed sales and gross margin increased in the second quarter and first half of 2022 due to higher pricing, an increase in proprietary seed margins and strong demand in Australia.

•

Merchandise sales increased in the second quarter and first half of 2022 primarily driven by favorable market conditions for Australia animal health products, with increased flock and herd sizes along with higher fencing sales.

•

Nutrien Financial sales increased in the second quarter and first half of 2022 due to higher utilization and adoption of our programs and a higher interest-bearing trade receivable balance, driven by strong commodity pricing.

•

Services and other sales decreased in the second quarter due to lower fertilizer application services, and held flat through the first half of 2022, due to favorable weather conditions in Australia in the first quarter.

Potash


	Three Months Ended June 30

(millions of US dollars, except	Dollars							Tonnes (thousands)						Average per Tonne
as otherwise noted)	2022		2021		% Change			2022	2021		% Change			2022		2021		% Change

Manufactured product

Net sales

North America		680		326		109		933		1,172		(20	)		729		278		162

Offshore		1,988		491		305		2,776		2,449		13			716		200		258

		2,668		817		227		3,709		3,621		2			719		226		218

Cost of goods sold		399		317		26									107		88		22

Gross margin - total		2,269		500		354									612		138		343
Expenses ¹		372		123		202		Depreciation and amortization							35		32		9

EBIT		1,897		377		403		Gross margin excluding depreciation
Depreciation and amortization		130		116		12		and amortization - manufactured ³							647		170		281

EBITDA		2,027		493		311		Potash controllable cash cost of
Adjustments ²		-		2		(100	)	product manufactured ³							52		50		4

Adjusted EBITDA		2,027		495		309

1 Includes provincial mining taxes of $362 million (2021 – $107 million).

2 See Note 2 to the interim financial statements.

3 These are non-IFRS financial measures. See the “Non-IFRS Financial Measures” section.


	Six Months Ended June 30

(millions of US dollars, except	Dollars							Tonnes (thousands)						Average per Tonne
as otherwise noted)	2022		2021		% Change			2022	2021		% Change			2022		2021		% Change

Manufactured product

Net sales

North America		1,513		658		130		2,151		2,642		(19	)		703		249		182

Offshore		3,005		770		290		4,601		4,136		11			653		186		251

		4,518		1,428		216		6,752		6,778		-			669		211		217

Cost of goods sold		704		608		16									104		90		16

Gross margin - total		3,814		820		365									565		121		367
Expenses ¹		623		187		233		Depreciation and amortization							36		35		1

EBIT		3,191		633		404		Gross margin excluding depreciation
Depreciation and amortization		242		240		1		and amortization - manufactured							601		156		284

EBITDA		3,433		873		293		Potash controllable cash cost of
Adjustments ²		-		2		(100	)	product manufactured							51		50		2

Adjusted EBITDA		3,433		875		292

1 Includes provincial mining taxes of $611 million (2021 – $165 million).

2 See Note 2 to the interim financial statements.

•

Adjusted EBITDA increased in the second quarter and first half of 2022 due to higher net realized selling prices and strong offshore sales volumes, which more than offset lower North American sales volumes, higher royalties and provincial mining taxes.

•

Sales volumes were the highest of any second quarter on record due to strong demand in offshore markets. North American sales volumes were impacted by delayed planting and a compressed application window.

•

Net realized selling price increased in the second quarter and first half of 2022 due to the impact of supply constraints, in particular related to uncertainty on future supply from Russia and Belarus.

•

Cost of goods sold per tonne increased in the second quarter and first half of 2022 primarily due to higher royalties resulting from increased net realized selling prices. Potash controllable cash cost of product manufactured increased slightly in the second quarter and first half of 2022 due to higher input costs driven by inflation.

Canpotex Sales by Market


	Three Months Ended June 30					Six Months Ended June 30
(percentage of sales volumes, except as otherwise noted)		2022	2021	Change			2022	2021	Change
Latin America		40	35	5			36	33	3
Other Asian markets ¹		28	41	(13	)		35	39	(4	)
China		12	11	1			12	12	-
Other markets		11	10	1			11	11	-
India		9	3	6			6	5	1
		100	100				100	100

1 All Asian markets except China and India.

Nitrogen


	Three Months Ended June 30

(millions of US dollars, except	Dollars								Tonnes (thousands)						Average per Tonne
as otherwise noted)	2022			2021		% Change			2022	2021		% Change			2022		2021		% Change

Manufactured product

Net sales

Ammonia		743			346		115		643		836		(23	)		1,157		416		178

Urea		601			346		74		810		819		(1	)		742		421		76

Solutions, nitrates and sulfates		536			290		85		1,142		1,311		(13	)		469		221		112

		1,880			982		91		2,595		2,966		(13	)		724		331		119

Cost of goods sold		839			597		41									323		201		61

Gross margin - manufactured		1,041			385		170									401		130		208

Gross margin - other ¹		17			31		(45	)	Depreciation and amortization							54		52		2

Gross margin - total		1,058			416		154		Gross margin excluding depreciation
(Income) expenses		(43	)		17		n/m		and amortization - manufactured ³							455		182		149

EBIT		1,101			399		176		Ammonia controllable cash cost of
Depreciation and amortization		139			155		(10	)	product manufactured ³							58		51		14

EBITDA		1,240			554		124
Adjustments ²		-			1		(100	)

Adjusted EBITDA		1,240			555		123

1 Includes other nitrogen (including ESN^®) and purchased products and comprises net sales of $349 million (2021 – $197 million) less cost of goods sold of $332 million (2021 – $166 million).

2 See Note 2 to the interim financial statements.

3 These are non-IFRS financial measures. See the “Non-IFRS Financial Measures” section.


	Six Months Ended June 30

(millions of US dollars, except	Dollars								Tonnes (thousands)						Average per Tonne
as otherwise noted)	2022			2021		% Change			2022	2021		% Change			2022		2021		% Change

Manufactured product

Net sales

Ammonia		1,303			506		158		1,238		1,408		(12	)		1,052		360		192

Urea		1,064			595		79		1,401		1,576		(11	)		760		377		102

Solutions, nitrates and sulfates		975			454		115		2,221		2,385		(7	)		439		190		131

		3,342			1,555		115		4,860		5,369		(9	)		688		290		137

Cost of goods sold		1,479			1,037		43									305		194		57

Gross margin - manufactured		1,863			518		260									383		96		299

Gross margin - other ¹		55			48		15		Depreciation and amortization							54		53		2

Gross margin - total		1,918			566		239		Gross margin excluding depreciation
Income		(55	)		-		-		and amortization - manufactured							437		149		193

EBIT		1,973			566		249		Ammonia controllable cash cost of
Depreciation and amortization		262			284		(8	)	product manufactured							57		51		12

EBITDA		2,235			850		163
Adjustments ²		-			5		(100	)

Adjusted EBITDA		2,235			855		161

1 Includes other nitrogen (including ESN^®) and purchased products and comprises net sales of $628 million (2021 – $384 million) less cost of goods sold of $573 million (2021 – $336 million).

2 See Note 2 to the interim financial statements.

•

Adjusted EBITDA increased in the second quarter and first half of 2022 primarily due to higher net realized selling prices and higher earnings from equity-accounted investees, which more than offset higher natural gas costs and lower sales volumes.

•

Sales volumes decreased in the second quarter and first half of 2022 due to unplanned plant outages that impacted ammonia and urea production, along with a cool and wet spring in North America that condensed the application window for direct application of ammonia and delayed application of other nitrogen products.

•

Net realized selling price in the second quarter and first half of 2022 were higher due to strong benchmark prices resulting from the strength in global demand and tight supply, along with higher energy prices in key nitrogen exporting regions.

•

Cost of goods sold per tonne in the second quarter and first half of 2022 increased primarily due to higher natural gas costs and higher raw material costs.

Natural Gas Prices in Cost of Production


	Three Months Ended June 30					Six Months Ended June 30

(US dollars per MMBtu, except as otherwise noted)		2022		2021	% Change		2022		2021	% Change

Overall gas cost excluding realized derivative impact		8.54		3.86	121		7.72		3.51	120
Realized derivative impact		(0.06	)	0.03	n/m		(0.04	)	0.03	n/m

Overall gas cost		8.48		3.89	118		7.68		3.54	117

Average NYMEX		7.17		2.83	153		6.06		2.76	120

Average AECO		4.95		2.32	113		4.28		2.31	85

•

Natural gas prices in our cost of production increased in the second quarter and first half of 2022 as a result of higher North American gas index prices and increased gas costs in Trinidad, where our gas prices are linked to ammonia benchmark prices.

Phosphate


	Three Months Ended June 30

(millions of US dollars, except	Dollars							Tonnes (thousands)						Average per Tonne
as otherwise noted)	2022			2021		% Change		2022	2021		% Change			2022		2021		% Change

Manufactured product

Net sales

Fertilizer		325			232		40	366		394		(7	)		888		588		51

Industrial and feed		189			119		59	190		192		(1	)		996		621		60

		514			351		46	556		586		(5	)		925		598		55

Cost of goods sold		352			271		30								634		463		37

Gross margin - manufactured		162			80		103								291		135		116

Gross margin - other ¹		(6	)		4		n/m	Depreciation and amortization							74		60		23

Gross margin - total		156			84		86	Gross margin excluding depreciation
(Income) expenses		(437	)		7		n/m	and amortization -manufactured³							365		195		87

EBIT		593			77		670
Depreciation and amortization		41			35		17

EBITDA		634			112		466
Adjustments ²		(450	)		-		n/m

Adjusted EBITDA		184			112		64

1 Includes other phosphate and purchased products and comprises net sales of $76 million (2021 – $52 million) less cost of goods sold of $82 million (2021 – $48 million).

2 See Notes 2 and 3 to the interim financial statements. Includes impairment reversal of assets of $450 million (2021 – nil).

3 This is a non-IFRS financial measure. See the “Non-IFRS Financial Measures” section.


	Six Months Ended June 30

(millions of US dollars, except	Dollars							Tonnes (thousands)						Average per Tonne
as otherwise noted)	2022			2021		% Change		2022	2021		% Change			2022		2021		% Change

Manufactured product

Net sales

Fertilizer		718			462		55	826		903		(9	)		869		511		70

Industrial and feed		359			233		54	381		385		(1	)		943		605		56

		1,077			695		55	1,207		1,288		(6	)		892		539		65

Cost of goods sold		712			553		29								589		429		37

Gross margin - manufactured		365			142		157								303		110		175

Gross margin - other ¹		(2	)		8		n/m	Depreciation and amortization							68		57		20

Gross margin - total		363			150		142	Gross margin excluding depreciation
(Income) expenses		(428	)		14		n/m	and amortization - manufactured							371		167		123

EBIT		791			136		482
Depreciation and amortization		82			73		12

EBITDA		873			209		318
Adjustments ²		(450	)		-		n/m

Adjusted EBITDA		423			209		102

1 Includes other phosphate and purchased products and comprises net sales of $148 million (2021 – $93 million) less cost of goods sold of $150 million (2021 – $85 million).

2 See Notes 2 and 3 to the interim financial statements. Includes impairment reversal of assets of $450 million (2021 – nil).

•

Adjusted EBITDA increased in the second quarter and first half of 2022 due to higher net realized selling prices, which more than offset higher raw material costs and lower sales volumes. As part of expenses, we recognized a $450 million non-cash impairment of assets reversal, which is deducted from adjusted EBITDA. This impairment reversal is due to a more favorable outlook for phosphate margins.

•

Sales volumes decreased particularly in fertilizer, as a cool and wet spring in North America condensed the application window.

•

Net realized selling price increased in the second quarter and first half of 2022 in connection with the increase in global benchmark prices. Industrial and feed net realized selling prices increased to a greater extent than fertilizer prices in the second quarter of 2022, which reflects the typical lag in industrial and feed price realizations relative to spot fertilizer prices.

•

Cost of goods sold per tonne increased primarily due to significantly higher sulfur and ammonia input costs.

Corporate and Others


	Three Months Ended June 30							Six Months Ended June 30
(millions of US dollars, except as otherwise noted)		2022		2021		% Change			2022		2021		% Change
Selling expenses		(2	)	(9	)	(78	)		(4	)	(15	)	(73	)
General and administrative expenses		77		66		17			147		124		19
Share-based compensation (recovery) expense		(52	)	38		n/m			83		61		36
Other expenses		48		83		(42	)		101		111		(9	)
EBIT		(71	)	(178	)	(60	)		(327	)	(281	)	16
Depreciation and amortization		20		10		100			36		22		64
EBITDA		(51	)	(168	)	(70	)		(291	)	(259	)	12
Adjustments ¹		(7	)	100		n/m			167		143		17
Adjusted EBITDA		(58	)	(68	)	(15	)		(124	)	(116	)	7

1 See Note 2 to the interim financial statements.

•

Share-based compensation (recovery) expense – the recovery in the second quarter of 2022 reflects a decrease in the fair value of share-based compensation due to a decrease in our share price, whereas an expense was recorded in the second quarter of 2021 as our share price increased during the period.

•

Other expenses were lower in the second quarter and first half of 2022 compared to the same periods in 2021 due to the absence of cloud computing related expenses from our change in accounting policy, partially offset by higher foreign exchange losses related to our international operations.

Eliminations

Eliminations of gross margin between operating segments was a recovery of $176 million in the second quarter of 2022 compared to a recovery of $24 million in the same period of 2021. We had a significant recovery in the second quarter of 2022 due to the release of higher-margin inventories held by our Retail segment at the end of the previous quarter. Eliminations are not part of the Corporate and Others segment.

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


	Three Months Ended June 30					Six Months Ended June 30
millions of US dollars, except as otherwise noted)		2022		2021	% Change		2022		2021	% Change
Finance costs		130		125	4		239		245	(2	)
Income tax expense		1,214		381	219		1,719		406	323
Other comprehensive (loss) income		(242	)	61	n/m		(66	)	85	n/m

•

Income tax expense was higher as a result of significantly higher earnings in the second quarter and first half of 2022 compared to the same periods in 2021.

•

Other comprehensive (loss) income is primarily driven by changes in the currency translation of our foreign operations and our investment in Sinofert Holdings Ltd. (“Sinofert”). In the second quarter and first half of 2022, we had fair value losses on our investment in Sinofert due to share price decreases compared to fair value gains due to share price increases in the same periods of 2021. In the second quarter of 2022, we also had a significant loss on foreign currency translation of our Retail operations in Australia, Brazil and Canada as these currencies depreciated relative to the US dollar as at June 30, 2022 compared to March 31, 2022 levels. These losses offset the gains on translation for all three currencies in the first quarter of 2022. Whereas, we had a foreign currency translation gain in the second quarter of 2021 and net loss in the second half of 2021.

Liquidity and Capital Resources

Sources and Uses of Liquidity

We continued to manage our capital in accordance with our capital allocation strategy. We believe that our internally generated cash flow, supplemented by available borrowings under our new or existing financing sources, if necessary, will be sufficient to meet our anticipated capital expenditures, planned growth and development activities, and other cash requirements for the foreseeable future. Refer to the “Capital Structure and Management” section for details on our existing long-term debt and credit facilities.

Sources and Uses of Cash


(millions of US dollars, except as otherwise noted)	Three Months Ended June 30							Six Months Ended June 30
(millions of US dollars, except as otherwise noted)		2022		2021		% Change			2022		2021		% Change

Cash provided by operating activities		2,558		1,966		30			2,496		1,814		38

Cash used in investing activities		(517	)	(431	)	20			(974	)	(819	)	19

Cash used in financing activities		(1,878	)	(449	)	318			(1,290	)	(640	)	102

Effect of exchange rate changes on cash and cash equivalents		(29	)	(4	)	625			(20	)	(15	)	33

Increase in cash and cash equivalents		134		1,082		(88	)		212		340		(38	)



Cash provided by operating activities		• Higher cash provided by operating activities in the second quarter and first half of 2022 compared to the same periods in 2021 due to higher earnings driven by higher crop input prices from tight global supply, offset with seasonal working capital requirements.

Cash used in investing activities		• Cash used in investing activities in the second quarter and first half of 2022 was higher compared to the same periods in 2021 due to higher spending in Potash to increase our production capabilities and in Nitrogen to advance our brownfield expansions, and the timing of supplier payments.

Cash used in financing activities		• Cash used in financing activities in the second quarter of 2022 was higher compared to the same period in 2021 due to increased share repurchases and higher repayments of commercial paper. • Cash used in financing activities in the first half of 2022 was higher compared to the same period in 2021 due to increased share repurchases, partially offset with increased commercial paper drawdowns to temporarily finance working capital requirements.

Financial Condition Review

The following balance sheet categories contained variances that were considered material:


	As at
(millions of US dollars, except as otherwise noted)		June 30, 2022	December 31, 2021	$ Change		% Change
Assets
Cash and cash equivalents		711	499	212		42
Receivables		10,171	5,366	4,805		90
Inventories		7,160	6,328	832		13
Prepaid expenses and other current assets		615	1,653	(1,038	)	(63	)
Property, plant and equipment		20,492	20,016	476		2
Liabilities and Equity
Short-term debt		2,403	1,560	843		54
Current portion of long-term debt		1,028	545	483		89
Payables and accrued charges		11,682	10,052	1,630		16
Long-term debt		7,056	7,521	(465	)	(6	)
Share capital		15,115	15,457	(342	)	(2	)
Retained earnings		11,563	8,192	3,371		41

•

Explanations for changes in Cash and cash equivalents are in the “Sources and Uses of Cash” section.

•

Receivables increased due to higher sales across all of our segments as a result of higher crop nutrient net realized selling prices consistent with higher benchmark pricing, as well as higher Retail vendor rebates receivables.

•

Inventories increased due to seasonal Retail inventory build-up in North America and higher costs to produce or purchase inventory due to inflation and tight global supply. The increase was partly offset by a decrease in Retail seed inventory driven by seasonality.

•

Prepaid expenses and other current assets decreased due to the drawdown of prepaid inventory (primarily seed and crop protection products) during the North American planting and application spring season.

•

Property, plant and equipment increased due to an impairment reversal related to our Aurora cash generating unit in the Phosphate segment.

•

Short-term debt increased due to additional commercial paper issuances as part of our seasonal working capital management.

•

Payables and accrued charges increased due to a shift in timing of supplier payments, higher input costs from inflation and tight global supply and higher inventory purchases, which were partly offset by lower customer prepayments in North America as Retail customers took delivery of prepaid sales.

•

Long-term debt decreased due to a reclassification to the current portion of long-term debt of our $500 million notes maturing May 2023.

•

Share capital decreased from shares repurchased under our normal course issuer bids partially offset by exercise of stock options.

•

Retained earnings increased as net earnings in the first half of 2022 exceeded dividends declared and share repurchases.

Capital Structure and Management

Principal Debt Instruments

As part of the normal course of business, we closely monitor our liquidity position. We use a combination of cash generated from operations and short-term and long-term debt to finance our operations. We were in compliance with our debt covenants and did not have any changes to our credit ratings in the six months ended June 30, 2022.

As at June 30, 2022

Outstanding and Committed

(millions of US dollars)

Rate of Interest (%)

Total Facility Limit

Short-Term Debt

Long-Term Debt

Credit facilities

Unsecured revolving term credit facility

n/a

4,500

Uncommitted revolving demand facility

n/a

1,000

Other credit facilities

770

South American

1.4 - 16.3

140

160

Other

1.6 - 4.0

Commercial paper

1.4 - 2.5

2,105

Other short-term debt

n/a

141

Total

2,403

163

We also have a commercial paper program, which is limited to the availability of backup funds under the $4,500 million unsecured revolving term credit facility and excess cash invested in highly liquid securities.

Subsequent to June 30, 2022, and in addition to the $500 million increase in our uncommitted revolving demand facility during the second quarter of 2022, we entered into $2 billion in new non-revolving term credit facilities, all with the same principal covenants and events of default as our existing revolving term credit facilities. These new facilities are temporary to help manage normal seasonal working capital swings and are intended to be closed before year-end. As of August 2, 2022, we had approximately $3.0 billion drawn on our credit facilities and a commercial paper balance of approximately $2.1 billion.

Our long-term debt consists primarily of notes. See the “Capital Structure and Management” section of our 2021 Annual Report for information on balances, rates and maturities for our notes.

Outstanding Share Data


	As at August 2, 2022

Common shares		538,926,006

Options to purchase common shares		3,933,487

For more information on our capital structure and management, see Note 24 to our 2021 annual financial statements.

On June 7, 2022, the Financial and Consumer Affairs Authority of Saskatchewan and the Ontario Securities Commission granted Nutrien exemptive relief to allow the purchase of up to 10 percent of its “public float” of common shares through the facilities of the New York Stock Exchange and other US-based trading systems as part of Nutrien’s current normal course issuer bid. Absent this exemptive relief, Nutrien’s purchases under the normal course issuer bid on markets other than the TSX would be limited to not more than 5 percent of its outstanding common shares over any twelve-month period. The exemptive relief is effective until June 7, 2023 and is conditional upon purchases being made in compliance with applicable US rules and National Instrument 23-101- Trading Rules in Canada, and at a price not higher than the market price at the time of purchase. The aggregate number of common shares purchased by Nutrien over any exchange or market may not exceed 10 percent of the public float as specified in Nutrien’s normal course issuer bid application approved by the TSX and announced on February 25, 2022.

Quarterly Results


(millions of US dollars, except as otherwise noted)	Q2 2022		Q1 2022		Q4 2021		Q3 2021		Q2 2021		Q1 2021		Q4 2020		Q3 2020

Sales ¹		14,506		7,657		7,267		6,024		9,763		4,658		4,052		4,227

Net earnings (loss)		3,601		1,385		1,207		726		1,113		133		316		(587	)

Net earnings (loss) attributable to equity holders of Nutrien		3,593		1,378		1,201		717		1,108		127		316		(587	)

Net earnings (loss) per share attributable to equity holders of Nutrien

Basic		6.53		2.49		2.11		1.26		1.94		0.22		0.55		(1.03	)

Diluted		6.51		2.49		2.11		1.25		1.94		0.22		0.55		(1.03	)
1 Certain immaterial figures have been reclassified in the third quarter of 2020.

Seasonality in our business results from increased demand for products during the planting season. Crop input sales are generally higher in the spring and fall application seasons. Crop input inventories are normally accumulated leading up to each application season. Our cash collections generally occur after the application season is complete, while customer prepayments made to us are concentrated in December and January and inventory prepayments paid to our suppliers are typically concentrated in the period from November to January. Feed and industrial sales are more evenly distributed throughout the year.

Our earnings are significantly affected by fertilizer benchmark prices, which have been volatile over the last two years and are affected by demand-supply conditions, grower affordability and weather.

In the second quarter of 2022, earnings were impacted by a $450 million non-cash impairment reversal of property, plant and equipment in the Phosphate segment related to higher forecasted global prices and a more favorable outlook for phosphate margins. In the fourth quarter of 2021, earnings were impacted by a $142 million loss resulting from the early extinguishment of long-term debt. In the fourth quarter of 2020, earnings were impacted by a $250 million net gain on disposal of our investment in Misr Fertilizers Production Company S.A.E.. In the third quarter of 2020, earnings were impacted by an $823 million non-cash impairment of assets primarily in the Phosphate segment as a result of lower long-term forecasted global phosphate prices.

Critical Accounting Estimates

Our significant accounting policies are disclosed in our 2021 Annual Report. We have discussed the development, selection and application of our key accounting policies, and the critical accounting estimates and assumptions they involve, with the audit committee of the Board. Our critical accounting estimates are discussed on page 49 of our 2021 Annual Report. Other than the critical accounting estimates discussed below, there were no material changes in the three or six months ended June 30, 2022 to our critical accounting estimates.

Impairment of Assets

Long-Lived Asset Impairment and Reversals

In the three months ended June 30, 2022, we revised our pricing forecasts to reflect the current macroeconomic environment. This resulted in a review of our previously impaired Phosphate cash-generating units (“CGUs”). In 2020 we recorded an impairment of assets relating to our property, plant and equipment of $545 million at our Aurora CGU, as a result of lower long-term forecasted global phosphate prices. Due to increases in our forecast during the three months ended June 30, 2022, the recoverable amount of our Aurora CGU is above its carrying amount. As a result, we recorded an impairment reversal of $450 million in the statement of earnings relating to property, plant and equipment. Refer to Note 3 to the interim financial statements.

The recoverable amount estimate is most sensitive to the following key assumptions: our internal sales and input price forecasts, which consider projections from independent third-party data sources, discount rate, and expected mine life. We used key assumptions that were based on historical data and estimates of future results from internal sources, external price benchmarks, and mineral reserve technical reports, as well as industry and market trends. For our Aurora CGU, there were no reasonably possible changes in key assumptions that would result in a substantial change in the reversal amount.

In 2017 and 2020, we recorded an impairment of assets at our White Springs CGU relating to property, plant and equipment of $250 million and $215 million respectively. The White Springs CGU has a shorter expected mine life and is therefore more sensitive to changes in short and medium-term pricing forecasts. We are continuously monitoring our key assumptions for changes that could have an impact on the recoverable amount including our internal sales and input price forecasts. Changes in these key assumptions could result in impairment reversals in future periods. The maximum impairment reversal that could result at our White Springs CGU is $340 million (full reversal, net of depreciation).

Goodwill Impairment

Operating segments have assets allocated to them that must be assessed for impairment when events or circumstances indicate there could be an impairment, or at least annually. Based on our assumptions at the time of our impairment testing, the recoverable amount of each of our CGUs or groups of CGUs was in excess of their carrying amounts. Key assumptions in our testing models may change, and changes that could reasonably be expected to occur may cause impairment or impairment reversals. Such change in assumptions could be driven by global supply and demand and other market factors and changes in regulations and other future events outside our control.

During the six months ended June 30, 2022, North American central banks continued to increase their benchmark borrowing rates and have forecasted additional near-term increases. Benchmark borrowing rates are used as the risk-free rate which, is a component of determining our discount rate for impairment testing. As a result of these increases, we revised our discount rate to 8.0 percent (previous annual impairment analysis – 7.4 percent) and this triggered an impairment test to be performed for our Retail – North America group of CGUs.

The Retail – North America group of CGUs have $6.9 billion in associated goodwill. Goodwill is more susceptible to impairment risk if business operating results or economic conditions deteriorate and we do not meet our forecasts. A reduction in the terminal growth rate, an increase in the discount rate or a decrease in forecasted EBITDA could cause impairment in the future. As at June 30, 2022 the Retail – North America group of CGUs recoverable amount exceeds its carrying amount by $0.8 billion, which is 7 percent of the carrying amount. Refer to Note 3 to the interim financial statements.

The following table indicates the percentages by which key assumptions would need to change individually for the estimated recoverable amount to be equal to the carrying amount:


Key Assumptions	Value Used in Impairment Model		Change Required for Carrying Amount to Equal Recoverable Amount
Terminal growth rate (%)		2.5		percentage point decrease	0.6
Forecasted EBITDA over forecast period (in billions of US dollars)		7.5		percent decrease	5.0
Discount rate (%)		8.0		percentage point increase	0.4

Risk Factors

Russia and Ukraine Conflict

The current conflict between Ukraine and Russia and the international response has, and may continue to have, potential wide-ranging consequences for global market volatility and economic conditions, including energy and commodity prices. Certain countries including Canada, the United States, Australia and certain European countries have imposed strict financial and trade sanctions against Russia, with Russia and Belarus imposing retaliatory sanctions of their own, which have had, and may continue to have, far-reaching effects on the global economy, energy and commodity prices, food security and crop nutrient supply and prices. The short-, medium- and long-term implications of the conflict in Ukraine are difficult to predict with any degree of certainty at this time. While Nutrien does not have operations in Ukraine or Russia, there remains uncertainty relating to the potential impact of the conflict and its effect on global food security, growers and the market outlook for crop nutrient market supply and demand fundamentals and nutrient prices, and it could have a material and adverse effect on our business, financial condition and results of operations. Depending on the extent, duration, and severity of the conflict, it may have the effect of heightening many of the other risks Nutrien is subject to and which are described in our 2021 Annual Report and 2021 Annual Information Form, including, without limitation, risks relating to market fundamentals and conditions (such as sanctions and trade flows and the impact thereof on crop nutrient supply and demand); cybersecurity threats; energy and commodity prices; inflationary pressures, interest rates and costs of capital; and supply chains and cost-effective and timely transportation.

Controls and Procedures

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended, and National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings. Internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and preparation of financial statements for external purposes in accordance with IFRS. Any system of internal control over financial reporting, no matter how well designed, has inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

There has been no change in our internal control over financial reporting during the three months ended June 30, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Forward-Looking Statements

Certain statements and other information included in this document, including within the “Financial Outlook and Guidance” section, constitute “forward-looking information” or “forward-looking statements” (collectively, “forward-looking statements”) under applicable securities laws (such statements are often accompanied by words such as “anticipate”, “forecast”, “expect”, “believe”, “may”, “will”, “should”, “estimate”, “intend” or other similar words). All statements in this document, other than those relating to historical information or current conditions, are forward-looking statements, including, but not limited to: Nutrien’s business strategies, plans, prospects and opportunities; Nutrien’s 2022 full-year guidance, including expectations regarding our adjusted net earnings per share and adjusted EBITDA (consolidated and by segment); expectations regarding our growth and capital allocation intentions and strategies, including our evaluation of the Geismar, Louisiana clean ammonia facility and the anticipated benefits thereof; capital spending expectations for 2022; our intention to complete our existing share repurchase program in 2022; expectations regarding performance of our operating segments in 2022, including our operating segment market outlooks and market conditions for 2022, and the anticipated supply and demand for our products and services, expected market and industry conditions with respect to crop nutrient application rates, planted acres, grower crop investment, crop mix, prices and the impact of import and export volumes and economic sanctions; Nutrien’s ability to develop innovative and sustainable solutions; the negotiation of sales contracts; and acquisitions and divestitures and the anticipated benefits 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 we believe that these assumptions are reasonable, having regard to our experience and our perception of historical trends, this list is not exhaustive of the factors that may affect any of the forward-looking statements and the reader should not place undue reliance on these assumptions and such forward-looking statements. Current conditions, economic and otherwise, render assumptions, although reasonable when made, subject to greater uncertainty. The additional key assumptions that have been made include, among other things, assumptions with respect to our ability to successfully complete, integrate and realize the anticipated benefits of our already completed and future acquisitions and divestitures, and that we will be able to implement our standards, controls, procedures and policies in respect of any acquired businesses and to realize the expected synergies; that future business, regulatory and industry conditions will be within the parameters expected by us, including with respect to prices, margins, demand, supply, product availability, supplier agreements, availability and cost of labor and interest, exchange and effective tax rates; assumptions with respect to global economic conditions and the accuracy of our market outlook expectations for 2022 and in the future; assumptions with respect to our ability to repurchase shares under our share repurchase program, including existing and future market conditions and compliance with respect to applicable securities laws and regulations and stock exchange policies; our expectations regarding the impacts, direct and indirect, of the COVID-19 pandemic on our business, customers, business partners, employees, supply chain, other stakeholders and the overall global economy; our expectations regarding the impacts, direct and indirect, of the conflict between Ukraine and Russia on, among other things, global supply and demand, energy and commodity prices; interest rates, supply chains and the global economy; the adequacy of our cash generated from operations and our ability to access our credit facilities or capital markets for additional sources of financing; our ability to identify suitable candidates for acquisitions and divestitures and negotiate acceptable terms; our ability to maintain investment grade ratings and achieve our performance targets; our ability to successfully negotiate sales contracts; and our ability to successfully implement new initiatives and programs.

Events or circumstances that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to: general global economic, market and business conditions; failure to complete announced and future acquisitions or divestitures at all or on the expected terms and within the expected timeline; climate change and weather conditions, including impacts from regional flooding and/or drought conditions; crop planted acreage, yield and prices; the supply and demand and price levels for our products; governmental and regulatory requirements and actions by governmental authorities, including changes in government policy (including tariffs, trade restrictions and climate change initiatives), government ownership requirements, changes in environmental, tax and other laws or regulations and the interpretation thereof; political risks, including civil unrest, actions by armed groups or conflict and malicious acts including terrorism; the occurrence of a major environmental or safety incident; innovation and cybersecurity risks related to our systems, including our costs of addressing or mitigating such risks; counterparty and sovereign risk; delays in completion of turnarounds at our major facilities; interruptions of or constraints in availability of key inputs, including natural gas and sulfur; any significant impairment of the carrying amount of certain assets; risks related to reputational loss; certain complications that may arise in our mining processes; the ability to attract, engage and retain skilled employees and strikes or other forms of work stoppages; the COVID-19 pandemic, including variants of the COVID-19 virus and the efficiency and distribution of vaccines, and its resulting effects on economic conditions, restrictions imposed by public health authorities or governments, including government-imposed vaccine mandates, fiscal and monetary responses by governments and financial institutions and disruptions to global supply chains; the conflict between Ukraine and Russia and its potential impact on, among other things, global market conditions and supply and demand, 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; the risk that rising interest rates and/or deteriorated business operating results may result in the impairment of goodwill attributed to certain of our cash generating units; and other risk factors detailed from time to time in Nutrien reports filed with the Canadian securities regulators and the SEC in the United States.

The purpose of our adjusted net earnings per share, adjusted EBITDA (consolidated and by segment) and sustaining capital expenditures guidance ranges are to assist readers in understanding our expected and targeted financial results, and this information may not be appropriate for other purposes.

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

Terms and Definitions

For the definitions of certain financial and non-financial terms used in this document, as well as a list of abbreviated company names and sources, see the “Terms & Definitions” section of our 2021 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.

Appendix A - Selected Additional Financial Data



Selected Retail Measures	Three Months Ended June 30		Six Months Ended June 30
	2022	2021	2022	2021

Proprietary products margin as a percentage of product line margin (%)

Crop nutrients	22	24	20	23

Crop protection products	39	43	39	42

Seed	46	46	44	43

All products	28	29	26	27

Crop nutrients sales volumes (tonnes – thousands)

North America	3,978	5,020	5,220	6,617

International	1,017	1,132	1,950	1,935

Total	4,995	6,152	7,170	8,552

Crop nutrients selling price per tonne

North America	940	506	923	494

International	795	445	676	408

Total	911	495	856	475

Crop nutrients gross margin per tonne

North America	202	127	198	123

International	105	57	86	54

Total	182	114	168	108

Financial performance measures			2022	2021

Retail adjusted EBITDA margin (%) ^1, 2			12	10

Retail adjusted EBITDA per US selling location (thousands of US dollars) ^{1, 2, 3}			1,897	1,267

Retail adjusted average working capital to sales (%) ^{1, 4}			15	12

Retail adjusted average working capital to sales excluding Nutrien Financial (%) ^{1, 4}			1	-

Nutrien Financial adjusted net interest margin (%) ^{1, 4}			7.0	6.2

Retail cash operating coverage ratio (%) ^{1, 4}			54	60

Retail normalized comparable store sales (%) ⁴			(3)	1
1 Rolling four quarters ended June 30, 2022 and 2021.
2 These are supplementary financial measures. See the “Other Financial Measures” section.
3 Excluding acquisitions.
4 These are non-IFRS financial measures. See the “Non-IFRS Financial Measures” section.


Nutrien Financial	As at June 30, 2022															As at Dec 31, 2021

(millions of US dollars)	Current		<31 days past due		31–90 days past due		>90 days past due		Gross Receivables		Allowance ¹			Net Receivables		Net Receivables

North America		3,342		201		70		67		3,680		(35	)		3,645		1,488
International		642		53		13		53		761		(2	)		759		662
Nutrien Financial receivables		3,984		254		83		120		4,441		(37	)		4,404		2,150
1 Bad debt expense on the above receivables for the six months ended June 30, 2022 was $8 million (2021 – $5 million) in the Retail segment.



Selected Nitrogen Measures	Three Months Ended June 30		Six Months Ended June 30

	2022	2021	2022	2021
Sales volumes (tonnes – thousands)

Fertilizer	1,453	1,825	2,546	3,130

Industrial and feed	1,142	1,141	2,314	2,239
Net sales (millions of US dollars)

Fertilizer	1,120	638	1,894	970

Industrial and feed	760	344	1,448	585
Net selling price per tonne

Fertilizer	771	350	744	310

Industrial and feed	666	302	626	261

Production Measures	Three Months Ended June 30		Six Months Ended June 30

	2022	2021	2022	2021
Potash production (Product tonnes – thousands)	3,621	3,414	7,324	6,950
Potash shutdown weeks ¹	5	4	5	4
Ammonia production – total ²	1,473	1,492	2,876	2,941
Ammonia production – adjusted ^{2, 3}	1,048	954	2,006	2,007
Ammonia operating rate (%) ³	96	87	92	92
P₂O₅production (P₂O₅ tonnes – thousands) P₂O₅ operating rate (%)	350	347	728	725
	82	82	86	86
1 Represents weeks of full production shutdown, including inventory adjustments and unplanned events, excluding the impact of any periods of reduced operating rates, planned routine annual maintenance shutdowns and announced workforce reductions. 2 All figures are provided on a gross production basis in thousands of product tonnes. 3 Excludes Trinidad and Joffre.

Appendix B - Non-IFRS Financial Measures

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

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

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

Adjusted EBITDA (Consolidated)

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

Definition: Adjusted EBITDA is calculated as net earnings (loss) before finance costs, income taxes, depreciation and amortization, share-based compensation and certain foreign exchange gain/loss (net of related derivatives). We also adjust this measure for the following other income and expenses that are excluded when management evaluates the performance of our day-to-day operations: integration and restructuring related costs, impairment or reversal of impairment of assets, COVID-19 related expenses, gain or loss on disposal of certain businesses and investments, and IFRS adoption transition adjustments.

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


	Three Months Ended June 30					Six Months Ended June 30
(millions of US dollars)		2022		2021			2022		2021

Net earnings		3,601		1,113			4,986		1,246

Finance costs		130		125			239		245

Income tax expense		1,214		381			1,719		406

Depreciation and amortization		505		485			966		965

EBITDA ¹		5,450		2,104			7,910		2,862

Share-based compensation (recovery) expense		(52	)	38			83		61

Foreign exchange loss (gain), net of related derivatives		31		(2	)		56		-

Integration and restructuring related costs		11		29			20		39

(Reversal) impairment of assets		(450	)	1			(450	)	5

COVID-19 related expenses ²		3		9			8		18

Gain on disposal of investment		-		-			(19	)	-

Cloud computing transition adjustment ³		-		36			-		36
Adjusted EBITDA		4,993		2,215			7,608		3,021

1 EBITDA is calculated as net earnings (loss) before finance costs, income taxes, and depreciation and amortization.

2 COVID-19 related expenses primarily consist of increased cleaning and sanitization costs, the purchase of personal protective equipment, discretionary supplemental employee costs, and costs related to construction delays from access limitations and other government restrictions.

3 Cloud computing transition adjustment relates to cloud computing costs in prior years that no longer qualify for capitalization based on an agenda decision issued by the IFRS Interpretations Committee in April 2021.

Adjusted Net Earnings and Adjusted Net Earnings Per Share

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

Definition: Adjusted net earnings and related per share information are calculated as net earnings (loss) before share-based compensation and certain foreign exchange gain/loss (net of related derivatives), net of tax. We also adjust this measure for the following other income and expenses (net of tax) that are excluded when management evaluates the performance of our day-to-day operations: certain integration and restructuring related costs, impairment or reversal of impairment of assets, COVID-19 related expenses (including those recorded under finance costs), gain or loss on disposal of certain businesses and investments, IFRS adoption transition adjustments and gain/loss on early extinguishment of debt. We generally apply the annual forecasted effective tax rate to our adjustments during the year and, at year-end, we apply the actual effective tax rate. If the effective tax rate is significantly different from our forecasted effective tax rate due to adjustments or discrete tax impacts, we apply a tax rate that excludes those items. For material adjustments, we apply a tax rate specific to the adjustment.

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


	Three Months Ended June 30, 2022							Six Months Ended June 30, 2022
(millions of US dollars, except as otherwise noted)		Increases (Decreases)		Post-Tax		Per Diluted Share			Increases (Decreases)		Post-Tax		Per Diluted Share

Net earnings attributable to equity holders of Nutrien				3,593		6.51					4,971		8.99
Adjustments:
Share-based compensation (recovery) expense		(52	)	(39	)	(0.07	)		83		62		0.11
Foreign exchange loss, net of related derivatives		31		23		0.04			56		42		0.07
Integration and restructuring related costs		11		8		0.01			20		15		0.02
Impairment reversal of assets		(450	)	(354	)	(0.64	)		(450	)	(354	)	(0.64	)
COVID-19 related expenses		3		2		-			8		6		0.01
Gain on disposal of investment		-		-		-			(19	)	(14	)	(0.03	)

Adjusted net earnings				3,233		5.85					4,728		8.53

	Three Months Ended June 30, 2021							Six Months Ended June 30, 2021
(millions of US dollars, except as otherwise noted)		Increases (Decreases)		Post-Tax		Per Diluted Share			Increases (Decreases)		Post-Tax		Per Diluted Share

Net earnings attributable to equity holders of Nutrien				1,108		1.94					1,235		2.16
Adjustments:
Share-based compensation expense		38		29		0.05			61		46		0.08
Foreign exchange gain, net of related derivatives		(2	)	(2	)	-			-		-		-
Integration and restructuring related costs		29		22		0.03			39		30		0.05
Impairment of assets		1		1		-			5		4		0.01
COVID-19 related expenses		9		7		0.01			18		14		0.02
Cloud computing transition adjustment		36		27		0.05			36		27		0.05

Adjusted net earnings				1,192		2.08					1,356		2.37

Adjusted EBITDA (Consolidated) and Adjusted Net Earnings Per Share Guidance

Adjusted EBITDA and adjusted net earnings per share guidance are forward-looking non-IFRS financial measures. We do not provide a reconciliation of such forward-looking measures to the most directly comparable financial measures calculated and presented in accordance with IFRS 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. Guidance for adjusted EBITDA and adjusted net earnings per share excludes certain items such as, but not limited to, the impacts of share-based compensation, certain foreign exchange gain/loss (net of related derivatives), integration and restructuring related costs, impairment or reversal of impairment of assets, COVID-19 related expenses (including those recorded under finance costs), gain or loss on disposal of certain businesses and investments, IFRS adoption transition adjustments, and gain/loss on early extinguishment of debt.

Free Cash Flow and Free Cash Flow Including Changes in Non-Cash Operating Working Capital

Most directly comparable IFRS financial measure: Cash provided by (used in) operating activities.

Definition: Free cash flow is calculated as cash provided by (used in) operating activities less sustaining capital expenditures and before changes in non-cash operating working capital. Free cash flow including non-cash operating working capital is calculated as cash provided by operating activities less sustaining capital expenditures.

Why we use the measure and why it is useful to investors: For evaluation of liquidity and financial strength. These are also useful as indicators of our ability to service debt, meet other payment obligations and make strategic investments. These do not represent residual cash flow available for discretionary expenditures.


	Three Months Ended June 30					Six Months Ended June 30
(millions of US dollars)		2022		2021			2022		2021
Cash provided by operating activities		2,558		1,966			2,496		1,814
Sustaining capital expenditures		(256	)	(304	)		(450	)	(468	)
Free cash flow including changes in non-cash operating working capital		2,302		1,662			2,046		1,346
Changes in non-cash operating working capital		(1,111	)	249			(3,181	)	(543	)
Free cash flow		3,413		1,413			5,227		1,889

Gross Margin Excluding Depreciation and Amortization Per Tonne - Manufactured

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. In 2022, we replaced Potash cash COPM with this new financial measure. Potash controllable cash COPM excludes the effects of production from other periods and the impacts of our long-term investment decisions. Potash controllable cash COPM also excludes royalties and natural gas costs and carbon taxes, which management does not consider controllable, as they are primarily driven by regulatory and market conditions.


	Three Months Ended June 30					Six Months Ended June 30
(millions of US dollars, except as otherwise noted)		2022		2021			2022		2021
Total COGS – Potash		399		317			704		608
Change in inventory		(5	)	(11	)		72		16
Other adjustments ¹		(9	)	(2	)		(24	)	(6	)
COPM		385		304			752		618
Depreciation and amortization in COPM		(114	)	(103	)		(233	)	(214	)
Royalties in COPM		(63	)	(19	)		(108	)	(36	)
Natural gas costs and carbon taxes in COPM		(19	)	(11	)		(36	)	(23	)
Controllable cash COPM		189		171			375		345
Production tonnes (tonnes – thousands)		3,621		3,414			7,324		6,950
Potash controllable cash COPM per tonne		52		50			51		50
1 Other adjustments include unallocated production overhead that is recognized as part of cost of goods sold but is not included in the measurement of inventory and changes in inventory balances.

Ammonia Controllable Cash COPM Per Tonne

Most directly comparable IFRS financial measure: Total manufactured COGS for the Nitrogen segment.

Definition: Total Nitrogen COGS excluding depreciation and amortization expense included in COGS, cash COGS for products other than ammonia, other adjustments, and natural gas and steam costs, divided by net ammonia production tonnes.

Why we use the measure and why it is useful to investors: To assess operational performance. Ammonia controllable cash COPM excludes the effects of production from other periods, the costs of natural gas and steam, and long-term investment decisions, supporting a focus on the performance of our day-to-day operations.


	Three Months Ended June 30					Six Months Ended June 30
(millions of US dollars, except as otherwise noted)		2022		2021			2022		2021
Total Manufactured COGS – Nitrogen		839		597			1,479		1,037
Total Other COGS – Nitrogen		332		166			573		336
Total COGS – Nitrogen		1,171		763			2,052		1,373
Depreciation and amortization in COGS		(115	)	(134	)		(217	)	(242	)
Cash COGS for products other than ammonia		(748	)	(448	)		(1,272	)	(841	)
Ammonia
Total cash COGS before other adjustments		308		181			563		290
Other adjustments ¹		(78	)	(27	)		(114	)	(30	)
Total cash COPM		230		154			449		260
Natural gas and steam costs		(195	)	(118	)		(376	)	(192	)
Controllable cash COPM		35		36			73		68
Production tonnes (net tonnes ² – thousands)		606		703			1,280		1,305
Ammonia controllable cash COPM per tonne		58		51			57		51

1 Other adjustments include unallocated production overhead that is recognized as part of cost of goods sold but is not included in the measurement of inventory and changes in inventory balances.

2 Ammonia tonnes available for sale, as not upgraded to other Nitrogen products.

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

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

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


	Rolling four quarters ended June 30, 2022
(millions of US dollars, except as otherwise noted)	Q3 2021			Q4 2021			Q1 2022			Q2 2022			Average/Total
Current assets		8,945			9,924			12,392			12,487
Current liabilities		(5,062	)		(7,828	)		(9,223	)		(9,177	)
Working capital		3,883			2,096			3,169			3,310			3,115
Working capital from certain recent acquisitions		-			-			-			-
Adjusted working capital		3,883			2,096			3,169			3,310			3,115
Nutrien Financial working capital		(2,820	)		(2,150	)		(2,274	)		(4,404	)
Adjusted working capital excluding Nutrien Financial		1,063			(54	)		895			(1,094	)		203

Sales		3,347			3,878			3,861			9,422
Sales from certain recent acquisitions		-			-			-			-
Adjusted sales		3,347			3,878			3,861			9,422			20,508
Nutrien Financial revenue		(54	)		(51	)		(49	)		(91	)
Adjusted sales excluding Nutrien Financial		3,293			3,827			3,812			9,331			20,263

Adjusted average working capital to sales (%)														15
Adjusted average working capital to sales excluding Nutrien Financial (%)														1

	Rolling four quarters ended June 30, 2021
(millions of US dollars, except as otherwise noted)	Q3 2020			Q4 2020			Q1 2021			Q2 2021			Average/Total
Current assets		7,324			8,013			9,160			9,300
Current liabilities		(4,108	)		(6,856	)		(7,530	)		(7,952	)
Working capital		3,216			1,157			1,630			1,348			1,838
Working capital from certain recent acquisitions		-			-			-			-
Adjusted working capital		3,216			1,157			1,630			1,348			1,838
Nutrien Financial working capital		(1,711	)		(1,392	)		(1,221	)		(3,072	)
Adjusted working capital excluding Nutrien Financial		1,505			(235	)		409			(1,724	)		(11)

Sales		2,742			2,618			2,972			7,537
Sales from certain recent acquisitions		-			-			-			-
Adjusted sales		2,742			2,618			2,972			7,537			15,869
Nutrien Financial revenue		(36	)		(37	)		(25	)		(59	)
Adjusted sales excluding Nutrien Financial		2,706			2,581			2,947			7,478			15,712

Adjusted average working capital to sales (%)														12
Adjusted average working capital to sales excluding Nutrien Financial (%)														-

Nutrien Financial Adjusted Net Interest Margin

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

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



	Rolling four quarters ended June 30, 2022

(millions of US dollars, except as otherwise noted)	Q3 2021			Q4 2021			Q1 2022			Q2 2022			Total/Average
Nutrien Financial revenue		54			51			49			91
Deemed interest expense ¹		(10	)		(12	)		(6	)		(12	)
Net interest		44			39			43			79			205

Average Nutrien Financial receivables		2,820			2,150			2,274			4,404			2,912
Nutrien Financial adjusted net interest margin (%)														7.0
1 Average borrowing rate applied to the notional debt required to fund the portfolio of receivables from customers monitored and serviced by Nutrien Financial.
	Rolling four quarters ended June 30, 2021

(millions of US dollars, except as otherwise noted)	Q3 2020			Q4 2020			Q1 2021			Q2 2021			Total/Average
Nutrien Financial revenue		36			37			25			59
Deemed interest expense ¹		(15	)		(14	)		(6	)		(8	)
Net interest		21			23			19			51			114

Average Nutrien Financial receivables		1,711			1,392			1,221			3,072			1,849
Nutrien Financial adjusted net interest margin (%)														6.2
1 Average borrowing rate applied to the notional debt required to fund the portfolio of receivables from customers monitored and serviced by Nutrien Financial.

Retail Cash Operating Coverage Ratio

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

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


	Rolling four quarters ended June 30, 2022
(millions of US dollars, except as otherwise noted)	Q3 2021			Q4 2021			Q1 2022			Q2 2022			Total
Selling expenses		746			848			722			1,013			3,329
General and administrative expenses		45			43			45			54			187
Other expenses (income)		17			20			(12	)		21			46
Operating expenses		808			911			755			1,088			3,562
Depreciation and amortization in operating expenses		(180	)		(173	)		(167	)		(171	)		(691)
Operating expenses excluding depreciation and amortization		628			738			588			917			2,871

Gross margin		917			1,173			845			2,340			5,275
Depreciation and amortization in cost of goods sold		2			5			2			4			13
Gross margin excluding depreciation and amortization		919			1,178			847			2,344			5,288
Cash operating coverage ratio (%)														54
	Rolling four quarters ended June 30, 2021

(millions of US dollars, except as otherwise noted)	Q3 2020			Q4 2020			Q1 2021			Q2 2021			Total
Selling expenses		669			727			667			863			2,926
General and administrative expenses		34			33			39			41			147
Other expenses (income)		(12	)		8			15			34			45
Operating expenses		691			768			721			938			3,118
Depreciation and amortization in operating expenses		(167	)		(177	)		(175	)		(166	)		(685)
Operating expenses excluding depreciation and amortization		524			591			546			772			2,433

Gross margin		683			885			652			1,858			4,078
Depreciation and amortization in cost of goods sold		3			3			2			3			11
Gross margin excluding depreciation and amortization		686			888			654			1,861			4,089
Cash operating coverage ratio (%)														60

Retail Normalized Comparable Store Sales

Most directly comparable IFRS financial measure: Retail sales from comparable base as a component of total Retail sales.

Definition: Prior year comparable store sales adjusted for published potash, nitrogen and phosphate benchmark prices and foreign exchange rates used in the current year. We retain sales of closed locations in the comparable base if the closed location is in close proximity to an existing location, unless we plan to exit the market area or are unable to economically or logistically serve it. We do not adjust for temporary closures, expansions or renovations of stores.

Why we use the measure and why it is useful to investors: To evaluate sales growth by adjusting for fluctuations in commodity prices and foreign exchange rates. Includes locations we have owned for more than 12 months.


	Six Months Ended June 30
(millions of US dollars, except as otherwise noted)		2022		2021
Sales from comparable base
Prior period		10,509		9,425
Adjustments ¹		(57	)	-
Revised prior period		10,452		9,425
Current period		13,230		10,405
Comparable store sales (%)		27		10
Prior period normalized for benchmark prices and foreign exchange rates		13,706		10,351
Normalized comparable store sales (%)		(3	)	1
1 Adjustments relate to prior period sales related to closed locations or businesses that no longer exist in the current period in order to provide a comparable base in our calculation.

Appendix C – Other Financial Measures

Supplementary Financial Measures

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

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

Retail adjusted EBITDA margin: Retail adjusted EBITDA divided by Retail sales for the last four rolling quarters.

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

Retail adjusted EBITDA per US selling location: Calculated as total Retail US adjusted EBITDA for the last four rolling quarters, representing the organic EBITDA component, which excludes acquisitions in those quarters, divided by the number of US locations that have generated sales in the last four rolling quarters, adjusted for acquired locations in those quarters.

Shareholder returns (cash used for dividends and share repurchases): Calculated as dividends paid to Nutrien shareholders plus repurchase of common shares. This measure is useful as it represents return of capital to shareholders.