Nutrien delivers record first half earnings and expects strong second half
Saskatoon, saskatchewan--(business wire)--nutrien ltd. (tsx and nyse: ntr) announced today its second quarter 2022 results, with net earnings of $3.6 billion ($6.51 diluted net earnings per share), which includes a non-cash impairment reversal of $450 million relating to our phosphate operations. second quarter 2022 adjusted net earnings per share1 were $5.85 and adjusted ebitda1 was $5.0 billion. “nutrien delivered record earnings in the first half of 2022 due to the strength of market fundamentals, strong operating performance, the advantaged position of our global production assets and the excellent results of retail. we generated strong results across our integrated business and demonstrated our unmatched capability to efficiently supply our customers with the products they need to help sustainably feed a growing world,” commented ken seitz, nutrien’s interim president and ceo. “we expect supply challenges across global energy, agriculture and fertilizer markets to persist well beyond 2022. the strength of our projected cash flow provides an opportunity to accelerate high-return strategic growth initiatives and return significant capital to shareholders. we intend on completing our 10 percent share repurchase program in 2022, increasing the total amount of capital returned to shareholders to approximately $6 billion during the year,” added mr. seitz. highlights: nutrien generated net earnings of $5.0 billion and adjusted ebitda1 of $7.6 billion in the first half of 2022 due to higher realized prices and strong retail performance, more than offsetting a reduction in fertilizer sales volumes. as a result, cash provided by operating activities increased to $2.5 billion in the first half of 2022. nutrien revised full-year 2022 adjusted ebitda guidance1 and adjusted net earnings per share guidance1 to $14.0 to $15.5 billion and $15.80 to $17.80 per share, respectively. adjusted net earnings per share guidance includes our plans to allocate approximately $5 billion to share repurchases in 2022. nutrien ag solutions (“retail”) delivered record adjusted ebitda in the second quarter and the first half of 2022. first-half adjusted ebitda was up 38 percent year-over-year as a result of strong sales and gross margin growth, due to supportive market conditions in key regions where we operate. retail cash operating coverage ratio1 improved to 54 percent compared to 60 percent for the same period in 2021 driven by higher margins. potash adjusted ebitda in the second quarter and the first half of 2022 increased compared to the prior year due to higher net realized selling prices and strong offshore sales volumes. north american sales volumes were lower than the same period last year due to a compressed application season. nitrogen second quarter and first half adjusted ebitda increased compared to the prior year due to higher net realized selling prices that more than offset higher natural gas costs and lower sales volumes. in the second quarter of 2022, we recognized a non-cash impairment reversal of $450 million associated with our phosphate operations due to a more favorable outlook for phosphate margins. nutrien repurchased approximately 22 million shares year-to-date as of august 2, 2022, under our share repurchase programs, for a total of approximately $1.8 billion. on may 18, 2022, nutrien announced it is evaluating its existing site at geismar, louisiana to build the world’s largest clean ammonia facility. the project would leverage low-cost natural gas, tidewater access to world markets, and high-quality carbon capture and sequestration infrastructure to serve growing demand in agricultural, industrial and emerging energy markets. on june 9, 2022, nutrien announced its intention to increase potash production capability to 18 million tonnes by 2025 in response to the uncertainty of potash supply from eastern europe being able to meet global demand. nutrien announced agreements to acquire brazilian ag retail companies casa do adubo s.a. and marca agro mercantil. these acquisitions support nutrien’s retail growth strategy in brazil and upon completion of the acquisitions, we expect to surpass our stated target of $100 million annual adjusted ebitda in brazil by 2023. 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 1.4 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. 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 (percentage of sales volumes, except as three months ended june 30 six months ended june 30 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 – manufactured 3 365 195 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 (millions of us dollars, except as otherwise three months ended june 30 six months ended june 30 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 (millions of us dollars, except as otherwise three months ended june 30 six months ended june 30 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 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 17 3 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: change required for value used in impairment carrying amount to equal key assumptions model 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. about nutrien nutrien is the world's largest provider of crop inputs and services, playing a critical role in helping growers increase food production in a sustainable manner. we produce and distribute approximately 27 million tonnes of potash, nitrogen and phosphate products world-wide. with this capability and our leading agriculture retail network, we are well positioned to supply the needs of our customers. we operate with a long-term view and are committed to working with our stakeholders as we address our economic, environmental and social priorities. the scale and diversity of our integrated portfolio provides a stable earnings base, multiple avenues for growth and the opportunity to return capital to shareholders. selected financial data for download can be found in our data tool at www.nutrien.com/investors/interactive-datatool such data is not incorporated by reference herein. nutrien will host a conference call on thursday, august 4, 2022 at 10:00 a.m. eastern time. telephone conference dial-in numbers: from canada and the us 1-888-886-7786 international 1-416-764-8683 no access code required. please dial in 15 minutes prior to ensure you are placed on the call in a timely manner. live audio webcast: visit https://www.nutrien.com/investors/events/2022-q2-earnings-conference-call 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 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 p2o5 production (p2o5 tonnes – thousands) 350 347 728 725 p2o5 operating rate (%) 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
