Nutrien Delivers Stable Earnings in a Challenging Year

all amounts are in US dollars except as otherwise noted

Nutrien Ltd. (Nutrien) (NYSE, TSX: NTR) announced today its 2019 fourth-quarter and full year 2019 results, with a net loss from continuing operations of $48 million ($0.08 diluted loss per share) in the fourth quarter of 2019. Fourth-quarter adjusted net earnings was $0.09 per share and adjusted EBITDA was $664 million. Adjusted net earnings (total and per share amounts) and adjusted EBITDA, together with the related annual guidance, Potash adjusted EBITDA, free cash flow and free cash flow including changes in non-cash working capital are non-IFRS financial measures. See the "Non-IFRS Financial Measures" section for further information.

"Nutriens earnings held up well in 2019 and we generated strong free cash flow in a very tough agriculture market. We executed on our strategic plan, growing our Retail business with several strategic acquisitions and made great strides with the roll-out and adoption of our leading Retail digital platform and financial tools. Agriculture fundamentals are strengthening and grower sentiment is positive. We expect higher planting and favorable farm economics to support strong North American crop input demand in 2020," commented Chuck Magro, Nutriens President and CEO.

"Our business is designed to provide stability in times of market weakness, with significant leverage through a recovery in fertilizer markets. We remain focused on optimizing our network, allocating capital to grow our Retail business and leading our industry in returning capital to shareholders," added Mr. Magro.

Highlights:

  • Nutrien generated $2.2 billion in free cash flow in 2019, up 9 percent over last year, and $2.6 billion in free cash flow including changes in non-cash working capital in 2019, which is over three times higher than in 2018.
  • Nutrien recorded a number of charges totaling $128 million this quarter related to mergers, acquisitions and impairments, the largest associated with the rebranding of the Australian retail business after the Ruralco acquisition.
  • Retail performed well as EBITDA increased 8 percent in the fourth quarter and 2 percent in the full year 2019, compared to the same periods in 2018. Nutriens sales, service and supply chain strength helped to grow market share and we expect strong EBITDA growth in 2020 due to contributions from acquisitions, improved market conditions and organic growth.
  • Potash EBITDA was down 62 percent in the fourth quarter of 2019 compared to the same period in 2018 due to lower sales volumes and lower net realized selling prices caused by a temporary reduction in global demand, the impact of production downtime and the Canadian National Railway labor strike. 2019 potash adjusted EBITDA was similar to 2018 as higher average net realized selling prices were mostly offset by lower sales volumes.
  • Nitrogen EBITDA in the fourth quarter of 2019 was 19 percent lower than the same period last year due primarily to lower ammonia sales volumes and a lower nitrogen net realized selling price. Nitrogen EBITDA in 2019 increased 2 percent compared to 2018 as lower natural gas costs in North America more than offset higher natural gas costs in Trinidad, and higher earnings from equity-accounted investees and the impact of IFRS 16 more than offset lower ammonia sales volumes and lower nitrogen net realized selling prices.
  • In the fourth quarter of 2019, Nutrien increased the maximum number of common shares that may be acquired under its current normal course issuer bid (NCIB) to approximately 7 percent of the outstanding common shares. Nutrien repurchased an aggregate of 36 million common shares in 2019 and 72 million common shares over the past 24 months.
  • Nutrien full-year 2020 adjusted net earnings per share and adjusted EBITDA guidance is $1.90 to $2.60 per share and $3.8 to $4.3 billion, respectively.

Market Outlook

Agriculture and Retail

  • Recent US/China trade progress has underpinned positive sentiment among US growers as agricultural exports to China are expected to improve significantly both in the short and medium term.
  • The US Department of Agriculture (USDA) projects 2019/2020 global grain inventories outside of China to be at six-year lows. US crop input demand in 2020 is expected to be supported by an additional 14 million acres, or about a 6 percent increase, in planted acreage.
  • We expect demand for potash in Southeast Asia will be supported by the significant improvement in palm oil prices since mid-2019.
  • Despite improved agricultural fundamentals in most key markets, we continue to monitor the possible impacts of the Coronavirus, drought conditions in Australia and the African Swine Fever.

Crop Nutrient Markets

  • Global potash prices declined in 2019 as customers in key offshore markets drew from inventories built by strong first-half 2019 shipments, while demand declined in North America due to adverse weather and in Southeast Asia due to weak palm oil prices. Global potash producers announced the equivalent of over 3 million tonnes of estimated production curtailments to rebalance supply. We estimate global potash deliveries were approximately 64.5 million tonnes in 2019, down significantly from the 66.7 million tonnes in 2018.

We believe potash production curtailments lowered inventory at the producer level, while continued grower consumption lowered distributor inventory in key markets outside of China. We expect global potash demand to rebound in 2020, driven by increased planting acreage in North America, a rebound in applications in Indonesia and Malaysia, lower beginning inventories and strong affordability. We estimate global potash deliveries in 2020 will be between 66 to 68 million tonnes in 2020, similar to the record global delivery levels of 2018.

  • Global nitrogen prices declined in 2019, due to reduced demand in North America driven by challenging weather conditions and lower feedstock prices in some key producing regions. We expect nitrogen fundamentals to improve in 2020, supported by higher North American planting, stable demand in other key regions and limited new global capacity.
  • Dry phosphate fertilizer prices have recently improved after reaching historically low levels in 2019, but they continue to be impacted by increased supply from Morocco and Saudi Arabia. Some global phosphate producers have announced curtailments to rebalance supply and the Coronavirus could reduce Chinese export availability in the first quarter of 2020, however, we expect low raw material costs will be a headwind to a significant market recovery.

Financial Outlook and Guidance

Based on market factors detailed above, we are issuing 2020 adjusted net earnings guidance of $1.90 to $2.60 per share and adjusted EBITDA guidance of $3.8 to $4.3 billion.

All guidance numbers, including those noted above and related sensitivities are outlined in the tables below.

2020 Guidance Ranges 1

Low

 

High

 

Adjusted net earnings per share 2

$

1.90

 

$

2.60

 

Adjusted EBITDA (billions) 2

$

3.8

 

$

4.3

 

Retail EBITDA (billions)

$

1.4

 

$

1.5

 

Potash EBITDA (billions)

$

1.3

 

$

1.5

 

Nitrogen EBITDA (billions)

$

1.2

 

$

1.4

 

Phosphate EBITDA (millions)

$

180

 

$

250

 

Potash sales tonnes (millions) 3

 

12.3

 

 

12.7

 

Nitrogen sales tonnes (millions) 3

 

11.0

 

 

11.6

 

Depreciation and amortization (billions)

$

1.8

 

$

1.9

 

Effective tax rate on continuing operations

 

23

%

 

25

%

Sustaining capital expenditures (billions)

$

1.0

 

$

1.1

 

 

Impact to

 

 

Adjusted

 

 

Adjusted

 

2020 Annual Assumptions & Sensitivities 1

 

EBITDA

 

 

EPS 4

 

$1/MMBtu change in NYMEX 5

$

165

 

$

0.21

 

$20/tonne change in realized Potash selling prices

$

205

 

$

0.25

 

$20/tonne change in realized Ammonia selling prices

$

40

 

$

0.05

 

$20/tonne change in realized Urea selling prices

$

65

 

$

0.09

 

 

 

 

 

 

 

 

2020 FX Rate CAD to USD

 

 

1.30

 

 

 

2020 NYMEX natural gas ($US/MMBtu)

 

 

$2.25

 

 

 

1 See the "Forward-Looking Statements" section.
2 See the "Non-IFRS Financial Measures" section.
3 Manufactured products only. Nitrogen excludes ESN® and Rainbow products.
4 Assumes 574 million shares outstanding.
5 Nitrogen related impact.

Consolidated Results

 

Three Months Ended December 31

 

Twelve Months Ended December 31

(millions of US dollars)

2019

 

2018

 

% Change

 

2019

 

2018

 

% Change

Sales

3,442

 

3,762

 

(9)

 

20,023

 

19,636

 

2

Freight, transportation and distribution

172

 

189

 

(9)

 

768

 

864

 

(11)

Cost of goods sold

2,256

 

2,314

 

(3)

 

13,814

 

13,380

 

3

Gross margin

1,014

 

1,259

 

(19)

 

5,441

 

5,392

 

1

Expenses

951

 

713

 

33

 

3,579

 

4,978

 

(28)

Net (loss) earnings from continuing operations

(48)

 

296

 

n/m

 

992

 

(31)

 

n/m

Net earnings from discontinued operations

-

 

2,906

 

(100)

 

-

 

3,604

 

(100)

Net (loss) earnings

(48)

 

3,202

 

n/m

 

992

 

3,573

 

(72)

EBITDA 1

499

 

944

 

(47)

 

3,661

 

2,006

 

83

Adjusted EBITDA 1

664

 

924

 

(28)

 

4,025

 

3,934

 

2

Free cash flow ("FCF") 1

138

 

403

 

(66)

 

2,157

 

1,975

 

9

FCF including changes in non-cash working capital 1

2,068

 

1,647

 

26

 

2,647

 

837

 

216

1 See the "Non-IFRS Financial Measures" section.

Our fourth-quarter net loss from continuing operations was caused by the impact of a temporary slow down in global fertilizer demand that more than offset a strong performance by Retail. 2019 net earnings from continuing operations increased compared to 2018 due to solid operational results, the continued benefit of Merger related synergies and operational improvements and a non-cash impairment of our New Brunswick potash facility in 2018.

Our net earnings from discontinued operations in 2018 was related to the required divestiture of certain equity investments in connection with the Merger.

Segment Results

In the first quarter of 2019, our Executive Leadership Team reassessed our product groupings and decided to evaluate the performance of ammonium sulfate as part of the Nitrogen segment, rather than the Phosphate and Sulfate segment as previously reported in 2018. Effective January 1, 2019, we have four reportable operating segments: Retail, Potash, Nitrogen and Phosphate. Comparative amounts presented on a segmented basis have been restated accordingly. We also renamed our "Others" segment to "Corporate and Others".

Detailed descriptions of our operating segments can be found in our 2018 Annual Report dated February 20, 2019 in the "Operating Segment Performance & Outlook" section.

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, 2019 to the results for the three and twelve months ended December 31, 2018, respectively and unless otherwise noted. See Appendix A for a summary of our results for the twelve months ended December 31, 2019 by operating segment.

Retail

 

Three Months Ended December 31

(millions of US dollars, except

Dollars

 

Gross Margin

 

Gross Margin (%)

as otherwise noted)

2019

 

2018

 

% Change

 

2019

 

2018

 

% Change

 

2019

 

2018

Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Crop nutrients 1

907

 

917

 

(1)

 

186

 

184

 

1

 

21

 

20

Crop protection products

635

 

644

 

(1)

 

281

 

270

 

4

 

44

 

42

Seed

99

 

103

 

(4)

 

60

 

56

 

7

 

61

 

54

Merchandise 2

211

 

142

 

49

 

44

 

27

 

63

 

21

 

19

Services and other

319

 

211

 

51

 

165

 

125

 

32

 

52

 

59

 

2,171

 

2,017

 

8

 

736

 

662

 

11

 

34

 

33

Cost of goods sold 2

1,435

 

1,355

 

6

 

 

 

 

 

 

 

 

 

 

Gross margin

736

 

662

 

11

 

 

 

 

 

 

 

 

 

 

Expenses 3

667

 

580

 

15

 

 

 

 

 

 

 

 

 

 

Earnings before finance costs and taxes ("EBIT")

69

 

82

 

(16)

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

162

 

132

 

23

 

 

 

 

 

 

 

 

 

 

EBITDA

231

 

214

 

8

 

 

 

 

 

 

 

 

 

 

1 Includes intersegment sales. See Note 2 to the unaudited condensed consolidated financial statements as at and for the three and twelve months ended December 31, 2019 (''condensed consolidated financial statements'').
2 Certain immaterial figures have been reclassified or grouped together for the three months ended December 31, 2018.
3 Includes selling expenses of $668 million (2018 $571 million).

  • EBITDA was higher in the fourth quarter and full year of 2019 as sales, service and supply chain strength helped to grow our market share and margins. EBITDA in both periods also benefited from strong US and Australia results and the impact from adoption of IFRS 16, which more than offset weather-related challenges in Canada. Gross margin and gross margin percentage increased in the fourth quarter and full year 2019 as a result of optimization initiatives and strategic purchasing. Selling expenses as a proportion of sales in the full year 2019 were similar to the same period in 2018.
  • Crop nutrients sales decreased in the fourth quarter of 2019 as higher sales volumes were offset by lower selling prices. Crop nutrients sales in 2019 increased due to higher sales volumes and higher selling prices. Gross margin percentage increased in the periods due to strategic purchasing and an increased mix of higher margin specialty and proprietary products sales.
  • Crop protection products sales in the fourth quarter decreased compared to the fourth quarter of 2018 due primarily to lower Canadian fall applications caused by early winter conditions. Crop protection products sales in 2019 increased as US farmers made more in-season applications due to the excessive moisture experienced in the fall of 2018. Gross margin percentage increased in the fourth quarter and was flat in 2019 due to favorable product mix changes and strategic purchasing that offset the impact of higher competition from a condensed season and higher costs for product sourced from China.
  • Seed sales in the fourth quarter were down slightly compared to the same period in 2018 caused mostly by drought conditions in Australia. Sales in 2019 increased compared to 2018 due to the mix of higher value corn and cotton seed sales, which more than offset the impact of lower planted acreage in the US. Gross margin percentage increased in the fourth quarter due to a favorable sales mix, while gross margin percentage in 2019 was comparable with 2018.
  • Merchandise sales and gross margin increased in the fourth quarter and full year of 2019 due to our recent acquisition of Ruralco.
  • Services and other sales were higher in the fourth quarter and full year of 2019 due to sales from recent acquisitions, including Ruralco, and increased US applications and services resulting from a condensed growing season. Gross margin percentage decreased in the quarter and full year of 2019 due to product mix changes resulting primarily from the acquisition of Ruralco.

Potash

 

Three Months Ended December 31

(millions of US dollars, except

Dollars

 

Tonnes (thousands)

 

Average per Tonne

as otherwise noted)

2019

 

2018

% Change

 

2019

 

2018

% Change

 

2019

 

2018

% Change

Manufactured product 1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America

146

 

177

 

(18)

 

651

 

731

 

(11)

 

226

 

242

 

(7)

Offshore

204

 

459

 

(56)

 

1,234

 

2,126

 

(42)

 

164

 

216

 

(24)

 

350

 

636

 

(45)

 

1,885

 

2,857

 

(34)

 

186

 

223

 

(17)

Cost of goods sold

211

 

271

 

(22)

 

 

 

 

 

 

 

112

 

95

 

18

Gross margin - manufactured

139

 

365

 

(62)

 

 

 

 

 

 

 

74

 

128

 

(42)

Gross margin - other 2

-

 

1

 

(100)

 

Depreciation and amortization

 

35

 

32

 

9

Gross margin - total

139

 

366

 

(62)

 

Gross margin excluding depreciation

 

 

 

 

 

Expenses 3

56

 

64

 

(13)

 

and amortization - manufactured 4

109

 

160

 

(32)

EBIT

83

 

302

 

(73)

 

Potash cash cost of product

 

 

 

 

 

 

Depreciation and amortization

66

 

92

 

(28)

 

manufactured 4

 

82

 

67

 

22

EBITDA

149

 

394

 

(62)

 

 

 

 

 

 

 

 

 

 

 

 

1 Includes intersegment sales. See Note 2 to the condensed consolidated financial statements.
2 Includes other potash and purchased products and is comprised of net sales of $Nil (2018 $1 million) less cost of goods sold of $Nil (2018 $Nil).
3 Includes provincial mining and other taxes of $50 million (2018 $56 million).
4 See the "Non-IFRS Financial Measures" section.

  • EBITDA decreased in the fourth quarter due to lower sales volumes, lower net realized selling prices and the temporary impacts associated with production downtime and the Canadian National Railway labor strike. EBITDA in 2019 was higher as a result of a non-cash impairment of our New Brunswick potash facility in 2018. Adjusted EBITDA in 2019 was similar to 2018 as lower sales volumes and higher provincial mining taxes and other taxes were mostly offset by higher net realized selling prices.
  • Sales volumes in North America were down in the fourth quarter and in the full year of 2019 due to challenging US weather conditions that negatively impacted both spring and fall applications. Offshore sales volumes in 2019 were the second highest on record, down only from 2018, due to strong demand in the first half of the year. Offshore sales volumes in the fourth quarter of 2019 decreased from the same period last year as customers in key markets delayed purchases and/or drew upon existing inventory.
  • Net realized selling price decreased in the fourth quarter of 2019 reflecting lower benchmark prices caused by a temporary slowdown in global demand. Higher freight rates further decreased North America net realized selling prices while adjustments to Nutriens provisional selling price to Canpotex lowered Offshore net realized selling prices in the quarter. Net realized selling prices were higher in 2019 compared to 2018 due to stronger prices through the first nine months of the year.
  • Cost of goods sold per tonne increased in the fourth quarter and full year of 2019 compared to the same periods in 2018 due to the impact of lower production volumes related to temporary production downtime. Potash cash cost of product manufactured per tonne increased in the fourth quarter and full year of 2019 due primarily to the impact of lower production volumes compared to the same periods in 2018.

Canpotex Sales by Market

(percentage of sales volumes, except as

Three Months Ended December 31

 

Twelve Months Ended December 31

otherwise noted)

2019

2018

% Change

 

2019

2018

% Change

Latin America

31

33

(6)

 

31

33

(6)

Other Asian markets 1

27

28

(4)

 

27

31

(13)

China

17

17

-

 

22

18

22

India

7

14

(50)

 

10

10

-

Other markets

18

8

125

 

10

8

25

 

100

100

 

 

100

100

 

1 All Asian markets except China and India.

Nitrogen

 

Three Months Ended December 31

(millions of US dollars, except

Dollars

 

Tonnes (thousands)

 

Average per Tonne

as otherwise noted)

2019

 

2018 ¹

% Change

 

2019

 

2018 ¹

% Change

 

2019

 

2018 ¹

% Change

Manufactured product 2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ammonia

141

 

235

 

(40)

 

571

 

808

 

(29)

 

245

 

290

 

(16)

Urea

193

 

231

 

(16)

 

695

 

687

 

1

 

278

 

337

 

(18)

Solutions, nitrates and sulfates

166

 

180

 

(8)

 

1,096

 

1,016

 

8

 

152

 

177

 

(14)

 

500

 

646

 

(23)

 

2,362

 

2,511

 

(6)

 

212

 

257

 

(18)

Cost of goods sold

404

 

439

 

(8)

 

 

 

 

 

 

 

171

 

175

 

(2)

Gross margin - manufactured

96

 

207

 

(54)

 

 

 

 

 

 

 

41

 

82

 

(50)

Gross margin - other 3

11

 

17

 

(35)

 

Depreciation and amortization

 

60

 

43

 

40

Gross margin - total

107

 

224

 

(52)

 

Gross margin excluding depreciation

 

 

 

 

 

(Income) Expenses

(11)

 

11

 

n/m

 

and amortization - manufactured 4

101

 

125

 

(19)

EBIT

118

 

213

 

(45)

 

Ammonia controllable cash cost of

 

 

 

 

 

 

Depreciation and amortization

141

 

108

 

31

 

product manufactured 4

 

48

 

44

 

9

EBITDA

259

 

321

 

(19)

 

 

 

 

 

 

 

 

 

 

 

 

1 Restated for the reclassification of sulfate from the Phosphate segment. See Note 2 to the condensed consolidated financial statements.

2 Includes intersegment sales. See Note 2 to the condensed consolidated financial statements.

3 Includes other nitrogen (including ESN® and Rainbow) and purchased products and is comprised of net sales of $103 million (2018 $99 million) less cost of goods sold of $92 million (2018 $82 million).

4 See the "Non-IFRS Financial Measures" section.

  • EBITDA decreased in the fourth quarter of 2019 as lower ammonia sales volumes and lower nitrogen net realized selling prices more than offset the impact of lower natural gas costs. EBITDA for 2019 increased compared to 2018 as lower natural gas costs, higher earnings from equity-accounted investees and the impact of adopting IFRS 16 more than offset lower sales volumes and net realized selling prices.
  • Sales volumes in the fourth quarter and full year of 2019 were down compared to the same period in 2018 as lower ammonia sales volumes in some of our highest netback regions were only partially offset by higher urea and solutions, nitrates and sulfates sales volumes. Ammonia sales volumes were impacted by compressed spring and fall application seasons in North America and turnaround activity at our Trinidad facility.
  • Net realized selling price of nitrogen was lower in the fourth quarter and full year of 2019 as benefits from our distribution network and product positioning were more than offset by lower global benchmark prices.
  • Cost of goods sold per tonne of nitrogen decreased in the fourth quarter of 2019 due primarily to lower natural gas costs. Cost of goods sold in 2019 was slightly higher compared to 2018 as lower natural gas costs in North America were offset by higher natural gas costs in Trinidad and a lower proportion of sales from lower cost facilities. Ammonia controllable cash cost of product manufactured per tonne increased in the fourth quarter and full year 2019 due to lower production volumes available for sale resulting from turnaround activity at our Trinidad facility.

Natural Gas Prices

 

Three Months Ended December 31

 

Twelve Months Ended December 31

(US dollars per MMBtu, except as otherwise noted)

2019

 

2018

 

% Change

 

2019

 

2018

 

% Change

Overall gas cost excluding realized derivative impact

2.46

 

2.87

 

(14)

 

2.47

 

2.54

 

(3)

Realized derivative impact

0.06

 

0.14

 

(57)

 

0.11

 

0.29

 

(62)

Overall gas cost

2.52

 

3.01

 

(16)

 

2.58

 

2.83

 

(9)

 

 

 

 

 

 

 

 

 

 

 

 

Average NYMEX

2.50

 

3.64

 

(31)

 

2.63

 

3.09

 

(15)

Average AECO

1.76

 

1.45

 

21

 

1.22

 

1.19

 

3

  • Gas costs decreased in the fourth quarter and full year 2019 compared to the same periods last year due primarily to lower gas costs in the US and a lower realized derivative impact.

Phosphate

 

Three Months Ended December 31

(millions of US dollars, except

Dollars

 

Tonnes (thousands)

 

Average per Tonne

as otherwise noted)

2019

 

2018 ¹

% Change

 

2019

 

2018 ¹

% Change

 

2019

 

2018 ¹

% Change

Manufactured product 2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fertilizer

155

 

255

 

(39)

 

466

 

601

 

(22)

 

334

 

423

 

(21)

Industrial and feed

105

 

106

 

(1)

 

181

 

207

 

(13)

 

581

 

513

 

13

 

260

 

361

 

(28)

 

647

 

808

 

(20)

 

403

 

446

 

(10)

Cost of goods sold

255

 

346

 

(26)

 

 

 

 

 

 

 

395

 

428

 

(8)

Gross margin - manufactured

5

 

15

 

(67)

 

 

 

 

 

 

 

8

 

18

 

(56)

Gross margin - other 3

1

 

(2)

 

n/m

 

Depreciation and amortization

 

88

 

66

 

33

Gross margin - total

6

 

13

 

(54)

 

Gross margin excluding depreciation

 

 

 

 

 

Expenses

9

 

13

 

(31)

 

and amortization - manufactured 4

96

 

84

 

14

EBIT

(3)

 

-

 

-

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

57

 

53

 

8

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

54

 

53

 

2

 

 

 

 

 

 

 

 

 

 

 

 

1 Restated for the reclassification of sulfate to the Nitrogen segment. See Note 2 to the condensed consolidated financial statements.
2 Includes intersegment sales. See Note 2 to the condensed consolidated financial statements.
3 Includes other phosphate and purchased products and is comprised of net sales of $27 million (2018 - $45 million) less cost of goods sold of $26 million (2018 - $47 million).
4 See the "Non-IFRS Financial Measures" section.

  • EBITDA increased in the fourth quarter of 2019 due to lower phosphate rock and other raw material costs that were partially offset by lower sales volumes and lower net realized selling prices. EBITDA decreased in 2019 relative to 2018 due primarily to lower net realized selling prices and lower sales volumes.
  • Sales volumes decreased in the fourth quarter and the full year of 2019 due primarily to reduced fertilizer application in North America caused by adverse weather in both the spring and fall application seasons. Industrial and feed sales volumes in the same periods decreased due to the timing of sales.
  • Net realized selling price decreased in the fourth quarter and full year of 2019 compared to the same periods in 2018 as higher prices for industrial products were more than offset by lower dry phosphate fertilizer prices.
  • Cost of goods sold per tonne decreased in the fourth quarter compared to the same period in 2018 due to benefits from the conversion of our Redwater facility to ammonium sulfate and lower raw material costs. Cost of goods sold per tonne increased in the full year of 2019 due to higher non-cash asset retirement adjustments, and lower sales volumes that more than offset lower raw material costs.

Forward-Looking Statements

Certain statements and other information included and incorporated by reference in this document 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 2020 annual guidance, including expectations regarding our adjusted net earnings per share and adjusted EBITDA (both consolidated and by segment); capital spending expectations for 2020; expectations regarding performance of our operating segments in 2020; our operating segment market outlooks and market conditions for 2020, and including anticipated supply and demand for our products and services, expected market and industry conditions with respect to crop nutrient application rates, planted acres, crop mix, prices and the impact of currency fluctuations and import and export volumes; and acquisitions and divestitures, and the expected synergies associated with various acquisitions, including timing thereof. These forward-looking statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from such forward-looking statements. As such, undue reliance should not be placed on these forward-looking statements.

All of the forward-looking statements are qualified by the assumptions that are stated or inherent in such forward-looking statements, including the assumptions referred to below and elsewhere in this document. Although we believe that these assumptions are reasonable, this list is not exhaustive of the factors that may affect any of the forward-looking statements and the reader should not place an undue reliance on these assumptions and such forward-looking statements. The additional key assumptions that have been made include, among other things, assumptions with respect to our ability to successfully complete, integrate and realize the anticipated benefits of our already completed and future acquisitions, and that we will be able to implement our standards, controls, procedures and policies at any acquired businesses to realize the expected synergies; that future business, regulatory and industry conditions will be within the parameters expected by 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; the completion of our expansion projects on schedule, as planned and on budget; assumptions with respect to global economic conditions and the accuracy of our market outlook expectations for 2020 and in the future; 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; and the receipt, on time, of all necessary permits, utilities and project approvals with respect to our expansion projects and that we will have the resources necessary to meet the projects approach.

Events or circumstances that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to: general global economic, market and business conditions; 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; regional natural gas supply restrictions; counterparty and sovereign risk; delays in completion of turnarounds at our major facilities; gas supply interruptions; any significant impairment of the carrying value of certain assets; risks related to reputational loss; certain complications that may arise in our mining processes; the ability to attract, engage and retain skilled employees and strikes or other forms of work stoppages; and other risk factors detailed from time to time in Nutrien reports filed with the Canadian securities regulators and the Securities and Exchange Commission in the United States.

The purpose of our expected adjusted net earnings per share, adjusted EBITDA and EBITDA by segment guidance ranges, as well as our adjusted net earnings per share and adjusted EBITDA price and volume and input cost sensitivities ranges, are to assist readers in understanding our expected and targeted financial results, and this information may not be appropriate for other purposes.

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

Terms and References

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", "Abbreviated Company Names and Sources" and "Terms and Measures" sections of our 2018 Annual Report dated February 20, 2019. 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 data are stated in millions of US dollars, unless otherwise noted.

About Nutrien

Nutrien is the world's largest provider of crop inputs and services, playing a critical role in helping growers around the globe increase food production in a sustainable manner. We produce and distribute 27 million tonnes of potash, nitrogen and phosphate products world-wide. With this capability and our leading agriculture retail network, we are well positioned to supply the needs of our customers. We operate with a long-term view and are committed to working with our stakeholders as we address our economic, environmental and social priorities. The scale and diversity of our integrated portfolio provides a stable earnings base, multiple avenues for growth and the opportunity to return capital to shareholders.

Contact us 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 Wednesday, February 19, 2020 at 10:00 am Eastern Time.

  • Telephone Conference dial-in numbers:
    • From Canada and the US 1-877-702-9274
    • International 1-647-689-5529
    • 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 www.nutrien.com/investors/events

Appendix A - Selected Additional Financial Data

Twelve Months Ended December 31, 2019 Operating Segment Results

Retail

 

Twelve Months Ended December 31

(millions of US dollars, except

Dollars

 

Gross Margin

 

Gross Margin (%)

as otherwise noted)

2019

 

2018

 

% Change

 

2019

 

2018

 

% Change

 

2019

 

2018

Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Crop nutrients 1

4,989

 

4,577

 

9

 

1,032

 

923

 

12

 

21

 

20

Crop protection products

4,983

 

4,862

 

2

 

...