Nutrien (NTR) 6-K Current report (foreign)

Exhibit 99.3

NUTRIEN LTD.

INTERIM FINANCIAL STATEMENTS AND NOTES

AS AT AND FOR THE THREE AND NINE MONTHS ENDED

SEPTEMBER 30, 2019

Unaudited In millions of US dollars except as otherwise noted  

Condensed Consolidated Financial Statements

Condensed Consolidated Statements of Earnings (Loss)

		Three Months Ended September 30						Nine Months Ended September 30
		2019			2018			2019		2018
					Note 1					Note 1
SALES	Note 2		4,134			3,990			16,482		15,761
Freight, transportation and distribution			246			253			667		675
Cost of goods sold			2,748			2,582			11,388		10,953
GROSS MARGIN			1,140			1,155			4,427		4,133
Selling expenses			607			560			1,835		1,758
General and administrative expenses			97			112			287		312
Provincial mining and other taxes			92			79			253		192
Share-based compensation (recovery) expense			(21	)		51			95		149
Impairment of assets	Note 3		-			1,809			33		1,809
Other expenses (income)	Note 4		37			(97	)		125		45
EARNINGS (LOSS) BEFORE FINANCE COSTS AND INCOME TAXES			328			(1,359	)		1,799		(132	)
Finance costs			147			142			413		394
EARNINGS (LOSS) BEFORE INCOME TAXES			181			(1,501	)		1,386		(526	)
Income tax expense (recovery)	Note 5		40			(434	)		346		(199	)
NET EARNINGS (LOSS) FROM CONTINUING OPERATIONS			141			(1,067	)		1,040		(327	)
Net earnings from discontinued operations	Note 6		-			23			-		698
NET EARNINGS (LOSS)			141			(1,044	)		1,040		371
NET EARNINGS (LOSS) PER SHARE FROM CONTINUING OPERATIONS
Basic			0.25			(1.74	)		1.78		(0.52	)
Diluted			0.24			(1.74	)		1.77		(0.52	)
NET EARNINGS PER SHARE FROM DISCONTINUED OPERATIONS
Basic			-			0.04			-		1.11
Diluted			-			0.04			-		1.11
NET EARNINGS (LOSS) PER SHARE (“EPS”)
Basic			0.25			(1.70	)		1.78		0.59
Diluted			0.24			(1.70	)		1.77		0.59
Weighted average shares outstanding for basic EPS			572,887,000			614,950,000			585,421,000		629,197,000
Weighted average shares outstanding for diluted EPS			573,702,000			614,950,000			586,335,000		629,197,000

Condensed Consolidated Statements of Comprehensive Income (Loss)

	Three Months Ended September 30						Nine Months Ended September 30
(Net of related income taxes)	2019			2018			2019			2018
				Note 1						Note 1
NET EARNINGS (LOSS)		141			(1,044	)		1,040			371
Other comprehensive (loss) income
Items that will not be reclassified to net earnings (loss):
Net actuarial gain on defined benefit plans		-			-			-			56
Net fair value (loss) gain on investments		(11	)		14			(26	)		(79	)
Items that have been or may be subsequently reclassified to net earnings (loss):
Loss on currency translation of foreign operations		(71	)		(8	)		(36	)		(146	)
Other		7			(5	)		5			(5	)
OTHER COMPREHENSIVE (LOSS) INCOME		(75	)		1			(57	)		(174	)
COMPREHENSIVE INCOME (LOSS)		66			(1,043	)		983			197

 (See Notes to the Condensed Consolidated Financial Statements)

25

Unaudited In millions of US dollars except as otherwise noted  

Condensed Consolidated Statements of Cash Flows

		Three Months Ended September 30						Nine Months Ended September 30
		2019			2018			2019			2018
					Note 1						Note 1
OPERATING ACTIVITIES
Net earnings (loss)			141			(1,044	)		1,040			371
Adjustments for:
Depreciation and amortization			457			427			1,363			1,194
Share-based compensation			(21	)		51			95			149
Impairment of assets	Note 3		-			1,809			33			1,809
Provision for (recovery of) deferred income tax			31			(356	)		178			(58	)
Gain on sale of investment	Note 6		-			-			-			(841	)
Other long-term liabilities and miscellaneous			(23	)		(130	)		(23	)		(158	)
Changes innon-cash operating working capital:
Receivables			624			327			(1,427	)		(1,504	)
Inventories			541			129			1,239			124
Prepaid expenses and other current assets			(23	)		(117	)		801			737
Payables and accrued charges			(1,138	)		(1,273	)		(2,053	)		(1,739	)
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES			589			(177	)		1,246			84
INVESTING ACTIVITIES
Additions to property, plant and equipment			(518	)		(352	)		(1,177	)		(913	)
Business acquisitions, net of cash acquired	Note 11		(348	)		(140	)		(837	)		(385	)
Proceeds from disposal of discontinued operations, net of tax	Note 6		-			14			55			1,833
Purchase of investments			(42	)		(15	)		(164	)		(123	)
Cash acquired in Merger			-			-			-			466
Other			4			14			(10	)		25
CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES			(904	)		(479	)		(2,133	)		903
FINANCING ACTIVITIES
Transaction costs on long-term debt			-			-			(29	)		(21	)
Proceeds from short-term debt, net			575			1,319			1,534			3,214
Proceeds from long-term debt	Note 9		-			-			1,510			-
Repayment of long-term debt	Note 9		(11	)		(2	)		(1,010	)		(8	)
Repayment of principal portion of lease liabilities			(49	)		-			(166	)		-
Dividends paid	Note 10		(244	)		(248	)		(764	)		(708	)
Repurchase of common shares	Note 10		-			(459	)		(1,930	)		(1,663	)
Issuance of common shares	Note 10		1			5			18			7
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES			272			615			(837	)		821
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS			(5	)		(13	)		(22	)		(22	)
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS			(48	)		(54	)		(1,746	)		1,786
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD			616			1,956			2,314			116
CASH AND CASH EQUIVALENTS, END OF PERIOD			568			1,902			568			1,902
Cash and cash equivalents comprised of:
Cash			326			580			326			580
Short-term investments			242			1,322			242			1,322
			568			1,902			568			1,902
SUPPLEMENTAL CASH FLOWS INFORMATION
Interest paid			111			125			353			366
Income taxes paid			46			27			1			123
Total cash outflow for leases			89			-			253			-

 (See Notes to the Condensed Consolidated Financial Statements)

26

Unaudited In millions of US dollars except as otherwise noted  

Condensed Consolidated Statements of Changes in Shareholders’ Equity

							Accumulated Other Comprehensive (Loss) Income (“AOCI”)
	Share Capital			Contributed Surplus			Net Fair Value (Loss) Gain on Investments			Net Actuarial Gain on Defined Benefit Plans 1			Loss on Currency Translation of Foreign Operations			Other			Total AOCI			Retained Earnings			Total Equity 2
BALANCE - DECEMBER 31, 2018		16,740			231			(7	)		-			(251	)		(33	)		(291	)		7,745			24,425
Net earnings		-			-			-			-			-			-			-			1,040			1,040
Other comprehensive (loss) income		-			-			(26	)		-			(36	)		5			(57	)		-			(57	)
Shares repurchased (Note 10)		(992	)		-			-			-			-			-			-			(886	)		(1,878	)
Dividends declared		-			-			-			-			-			-			-			(496	)		(496	)
Effect of share-based compensation including issuance of common shares		21			13			-			-			-			-			-			-			34
Transfer of net loss on investment		-			-			4			-			-			-			4			(4	)		-
Transfer of net loss on cash flow hedges		-			-			-			-			-			8			8			-			8
BALANCE - SEPTEMBER 30, 2019		15,769			244			(29	)		-			(287	)		(20	)		(336	)		7,399			23,076
BALANCE - DECEMBER 31, 2017		1,806			230			73			-			(2	)		(46	)		25			6,242			8,303
Merger impact		15,898			7			-			-			-			-			-			(1	)		15,904
Net earnings		-			-			-			-			-			-			-			371			371
Other comprehensive (loss) income		-			-			(79	)		56			(146	)		(5	)		(174	)		-			(174	)
Shares repurchased (Note 10)		(884	)		(23	)		-			-			-			-			-			(756	)		(1,663	)
Dividends declared		-			-			-			-			-			-			-			(749	)		(749	)
Effect of share-based compensation including issuance of common shares		8			17			-			-			-			-			-			-			25
Transfer of net loss on sale of investment (Note 6)		-			-			19			-			-			-			19			(19	)		-
Transfer of net loss on cash flow hedges		-			-			-			-			-			18			18			-			18
Transfer of net actuarial gain on defined benefit plans		-			-			-			(56	)		-			-			(56	)		56			-
BALANCE - SEPTEMBER 30, 2018		16,828			231			13			-			(148	)		(33	)		(168	)		5,144			22,035

1 Any amounts incurred during a period were closed out to retained earnings at eachperiod-end. Therefore, no balance exists at the beginning or end of period.

2 All equity transactions were attributable to common shareholders.

(See Notes to the Condensed Consolidated Financial Statements)

27

Unaudited In millions of US dollars except as otherwise noted  

Condensed Consolidated Balance Sheets

As at		September 30, 2019			December 31, 2018
ASSETS
Current assets
Cash and cash equivalents			568			2,314
Receivables			4,843			3,342
Inventories			3,873			4,917
Prepaid expenses and other current assets			440			1,089
			9,724			11,662
Non-current assets
Property, plant and equipment	Note 1		20,045			18,796
Goodwill	Note 11		11,983			11,431
Other intangible assets			2,330			2,210
Investments	Note 11		809			878
Other assets			538			525
TOTAL ASSETS			45,429			45,502
LIABILITIES
Current liabilities
Short-term debt	Note 8		2,287			629
Current portion of long-term debt	Note 9		501			995
Current portion of lease liabilities	Note 1		219			8
Payables and accrued charges			4,615			6,703
			7,622			8,335
Non-current liabilities
Long-term debt	Note 9		8,555			7,579
Lease liabilities	Note 1		793			12
Deferred income tax liabilities	Note 5		3,137			2,907
Pension and other post-retirement benefit liabilities			425			395
Asset retirement obligations and accrued environmental costs			1,662			1,673
Othernon-current liabilities			159			176
TOTAL LIABILITIES			22,353			21,077
SHAREHOLDERS’ EQUITY
Share capital	Note 10		15,769			16,740
Contributed surplus			244			231
Accumulated other comprehensive loss			(336	)		(291	)
Retained earnings			7,399			7,745
TOTAL SHAREHOLDERS’ EQUITY			23,076			24,425
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY			45,429			45,502

(See Notes to the Condensed Consolidated Financial Statements)

28

Unaudited In millions of US dollars except as otherwise noted  

Notes to the Condensed Consolidated Financial Statements

As at and for the Three and Nine Months Ended September 30, 2019

NOTE 1  BASIS OF PRESENTATION

Nutrien Ltd. (collectively with its subsidiaries, known as “Nutrien” or the “Company” except to the extent the context otherwise requires) is an integrated ag solutions provider and plays a critical role in helping growers around the globe increase food production in a sustainable manner. Nutrien is the world’s largest provider of crop inputs and services. Disclosures related to the merger of Potash Corporation of Saskatchewan Inc. and Agrium Inc. (the “Merger”) can be found in Note 3 of the Company’s 2018 annual consolidated financial statements.

These unaudited interim condensed consolidated financial statements (“interim financial statements”) are based on International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”) and have been prepared in accordance with International Accounting Standard (“IAS”) 34, “Interim Financial Reporting”. The accounting policies and methods of computation used in preparing these interim financial statements are consistent with those used in the preparation of the Company’s 2018 annual consolidated financial statements, with the exception of IFRS 16, “Leases” (“IFRS 16”), which was adopted effective January 1, 2019, and resulted in an increase to property, plant and equipment and recognition of lease liabilities of approximately $1 billion at January 1, 2019. Other impacts from adoption of IFRS 16 are disclosed in Note 13 of Nutrien’s first quarter 2019 unaudited condensed consolidated financial statements. These interim financial statements include the accounts of Nutrien and its subsidiaries; however, they do not include all disclosures normally provided in annual consolidated financial statements and should be read in conjunction with the Company’s 2018 annual consolidated financial statements.

Certain immaterial 2018 figures have been reclassified or grouped together in the condensed consolidated statements of: earnings (loss), comprehensive income (loss), cash flows, changes in shareholders’ equity and in the segment information.

In management’s opinion, the interim financial statements include all adjustments necessary to fairly present such information in all material respects. Interim results are not necessarily indicative of the results expected for any other interim period or the fiscal year.

These interim financial statements were authorized by the audit committee of the Board of Directors for issue on November 4, 2019.

NOTE 2  SEGMENT INFORMATION

The Company’s four reportable operating segments are: Retail, Potash, Nitrogen and Phosphate. The Retail segment distributes crop nutrients, crop protection products, seed and merchandise, and provides services directly to growers through a network of farm centers in North and South America and Australia. The Potash, Nitrogen and Phosphate segments are differentiated by the chemical nutrient contained in the products that each produces. In the first quarter of 2019, the Company’s Chief Operating Decision Maker reassessed product groupings and decided to evaluate the performance of ammonium sulfate as part of the Nitrogen segment, rather than the Phosphate and Sulfate segment reported in the Company’s 2018 annual consolidated financial statements. Comparative amounts for Nitrogen and Phosphate were restated, including EBITDA which is calculated as net earnings (loss) from continuing operations before finance costs, income taxes and depreciation and amortization. For the three months ended September 30, 2018, Nitrogen reflected increases of $31, $9 and $13 in sales, gross margin and EBITDA, respectively, and for the nine months ended September 30, 2018, Nitrogen reflected increases of $91, $32 and $41 in sales, gross margin and EBITDA, respectively, as well as $377 in assets as at December 31, 2018, with corresponding decreases in Phosphate. In addition, the “Others” segment was renamed to “Corporate and Others”.

29

Unaudited In millions of US dollars except as otherwise noted  

	Three Months Ended September 30, 2019
	Retail			Potash		Nitrogen		Phosphate			Corporate and Others			Eliminations			Consolidated
Sales   – third party		2,489			748		564		333			-			-			4,134
– intersegment		10			68		115		43			-			(236	)		-
Sales   – total		2,499			816		679		376			-			(236	)		4,134
Freight, transportation and distribution		-			107		77		62			-			-			246
Net sales		2,499			709		602		314			-			(236	)		3,888
Cost of goods sold		1,844			303		469		329			-			(197	)		2,748
Gross margin		655			406		133		(15	)		-			(39	)		1,140
Selling expenses		601			2		7		2			(5	)		-			607
General and administrative expenses		28			-		4		-			65			-			97
Provincial mining and other taxes		-			83		1		-			8			-			92
Share-based compensation recovery		-			-		-		-			(21	)		-			(21	)
Other (income) expenses		(12	)		1		1		7			40			-			37
Earnings (loss) before finance costs and income taxes		38			320		120		(24	)		(87	)		(39	)		328
Depreciation and amortization		152			110		127		58			10			-			457
EBITDA		190			430		247		34			(77	)		(39	)		785
Assets – at September 30, 2019		18,996			11,939		10,807		2,207			2,029			(549	)		45,429

	Three Months Ended September 30, 2018
	Retail			Potash			Nitrogen1			Phosphate 1			Corporate and Others			Eliminations			Consolidated
Sales   – third party		2,117			880			600			393			-			-			3,990
– intersegment		14			62			124			71			-			(271	)		-
Sales   – total		2,131			942			724			464			-			(271	)		3,990
Freight, transportation and distribution		-			125			85			54			-			(11	)		253
Net sales		2,131			817			639			410			-			(260	)		3,737
Cost of goods sold		1,598			358			475			383			-			(232	)		2,582
Gross margin		533			459			164			27			-			(28	)		1,155
Selling expenses		552			3			8			3			(6	)		-			560
General and administrative expenses		25			3			7			2			75			-			112
Provincial mining and other taxes		-			78			1			-			-			-			79
Share-based compensation expense		-			-			-			-			51			-			51
Impairment of assets (Note 3)		-			1,809			-			-			-			-			1,809
Other (income) expenses		(38	)		5			(7	)		(1	)		(56	)		-			(97	)
(Loss) earnings before finance costs and income taxes		(6	)		(1,439	)		155			23			(64	)		(28	)		(1,359	)
Depreciation and amortization		122			128			115			52			10			-			427
EBITDA		116			(1,311	)		270			75			(54	)		(28	)		(932	)
Assets – at December 31, 2018		17,964			11,710			10,386			2,406			3,678			(642	)		45,502

 1 Comparative figures have been restated to reflect the change in the sulfate product grouping from Phosphate and Sulfate to Nitrogen.

30

Unaudited In millions of US dollars except as otherwise noted  

	Nine Months Ended September 30, 2019
	Retail			Potash			Nitrogen			Phosphate			Corporate and Others			Eliminations			Consolidated
Sales    – third party		11,022			2,328			2,033			1,099			-			-			16,482
– intersegment		28			178			487			160			-			(853	)		-
Sales    – total		11,050			2,506			2,520			1,259			-			(853	)		16,482
Freight, transportation and distribution		-			252			275			178			-			(38	)		667
Net sales		11,050			2,254			2,245			1,081			-			(815	)		15,815
Cost of goods sold		8,546			892			1,652			1,092			-			(794	)		11,388
Gross margin		2,504			1,362			593			(11	)		-			(21	)		4,427
Selling expenses		1,816			7			21			5			(14	)		-			1,835
General and administrative expenses		82			-			11			3			191			-			287
Provincial mining and other taxes		-			237			2			1			13			-			253
Share-based compensation expense		-			-			-			-			95			-			95
Impairment of assets (Note 3)		-			-			-			-			33			-			33
Other expenses (income)		39			(2	)		(27	)		20			95			-			125
Earnings (loss) before finance costs and income taxes		567			1,120			586			(40	)		(413	)		(21	)		1,799
Depreciation and amortization		433			324			394			180			32			-			1,363
EBITDA		1,000			1,444			980			140			(381	)		(21	)		3,162
Assets – at September 30, 2019		18,996			11,939			10,807			2,207			2,029			(549	)		45,429
	Nine Months Ended September 30, 2018
	Retail			Potash			Nitrogen 1			Phosphate 1			Corporate and Others			Eliminations			Consolidated
Sales    – third party		10,467			2,148			2,037			1,109			-			-			15,761
– intersegment		36			180			462			203			-			(881	)		-
Sales    – total		10,503			2,328			2,499			1,312			-			(881	)		15,761
Freight, transportation and distribution		-			298			279			157			-			(59	)		675
Net sales		10,503			2,030			2,220			1,155			-			(822	)		15,086
Cost of goods sold		8,130			912			1,624			1,080			-			(793	)		10,953
Gross margin		2,373			1,118			596			75			-			(29	)		4,133
Selling expenses		1,732			9			24			8			(15	)		-			1,758
General and administrative expenses		73			8			17			6			208			-			312
Provincial mining and other taxes		-			188			2			1			1			-			192
Share-based compensation expense		-			-			-			-			149			-			149
Impairment of assets (Note 3)		-			1,809			-			-			-			-			1,809
Other (income) expenses		(57	)		13			(7	)		(2	)		98			-			45
Earnings (loss) before finance costs and income taxes		625			(909	)		560			62			(441	)		(29	)		(132	)
Depreciation and amortization		367			312			334			140			41			-			1,194
EBITDA		992			(597	)		894			202			(400	)		(29	)		1,062
Assets – at December 31, 2018		17,964			11,710			10,386			2,406			3,678			(642	)		45,502

 1 Comparative figures have been restated to reflect the change in the sulfate product grouping from Phosphate and Sulfate to Nitrogen.

31

Unaudited In millions of US dollars except as otherwise noted  

The Company disaggregated revenue from contracts with customers by product line or geographic location for each reportable segment to show how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.

	Three Months Ended September 30				Nine Months Ended September 30
	2019		2018		2019		2018
Retail sales by product line
Crop nutrients		769		650		4,082		3,660
Crop protection products		1,318		1,086		4,348		4,218
Seed		60		60		1,613		1,584
Merchandise		135		161		387		442
Services and other		217		174		620		599
		2,499		2,131		11,050		10,503
Potash sales by geography
Manufactured product
North America		437		483		1,084		1,128
Offshore 1		379		458		1,421		1,198
Other potash and purchased products		-		1		1		2
		816		942		2,506		2,328
Nitrogen sales by product line2
Manufactured product
Ammonia		172		225		713		783
Urea		239		217		801		730
Solutions, nitrates and sulfates		193		207		613		620
Other nitrogen and purchased products		75		75		393		366
		679		724		2,520		2,499
Phosphate sales by product line2
Manufactured Product
Fertilizer		205		305		752		846
Industrial and feed		119		126		359		352
Other phosphate and purchased products		52		33		148		114
		376		464		1,259		1,312

 1 Relates primarily to Canpotex Ltd. (“Canpotex”) (Note 13).

 2 Comparative figures have been restated to reflect the change in the sulfate product grouping from Phosphate and Sulfate to Nitrogen.

NOTE 3  IMPAIRMENT OF ASSETS

During the nine months ended September 30, 2019, the Company recorded an impairment of $33 relating to certain intangible assets.

During the nine months ended September 30, 2018, through a strategic portfolio review, the Company determined the New Brunswick Potash operations would no longer be part of the Company’s medium-term or long-term strategic plans. Accordingly, the New Brunswick cash generating unit was estimated to have a recoverable amount of $50, based on the fair value less costs of disposal. This resulted in an impairment loss of $1,809 ($1,320, net of tax) related to its property, plant and equipment being recorded in the Potash segment for the three and nine months ended September 30, 2018. The estimated recoverable amount was determined to be the salvage value of the assets based on the estimated fair market value of similar used assets and past experience, a Level 3 fair value measurement.

32

Unaudited In millions of US dollars except as otherwise noted  

NOTE 4  OTHER EXPENSES (INCOME)

	Three Months Ended September 30						Nine Months Ended September 30
	2019			2018			2019			2018
Merger and related costs		21			62			57			143
Foreign exchange loss (gain)		2			-			14			(2)
Earnings of equity-accounted investees		(6	)		(15	)		(53	)		(26)
Gain on curtailment of defined benefit pension and other post-retirement benefit plans		-			(151	)		-			(151)
Other expenses		20			7			107			81
		37			(97	)		125			45

During the third quarter of 2018, as part of the Company’s continuous assessment of its operations, participation (based on age and years of service) in certain company defined benefit pension and other post-retirement benefit plans was suspended and/or discontinued effective January 1, 2020. As a result, the Company recognized a merger-related gain on curtailment of defined benefit pension and other post-retirement benefit plans of $151.

NOTE 5  INCOME TAXES

A separate estimated average annual effective income tax rate was determined for each taxing jurisdiction and applied individually to the interim periodpre-tax earnings from continuing operations for each jurisdiction.

	Three Months Ended September 30					Nine Months Ended September 30
Income Tax Related to Continuing Operations	2019		2018			2019		2018
Income tax expense (recovery)		40		(434	)		346		(199)
Actual effective tax rate on earnings (loss) from continuing operations (%)		22		29			25		38
Actual effective tax rate including discrete items (%)		22		29			25		38
Discrete tax adjustments that impacted the tax rate		1		2			5		-

Income tax balances within the condensed consolidated balance sheets were comprised of the following:

Income Tax Assets and Liabilities	Balance Sheet Location	As at September 30, 2019		As at December 31, 2018
Current income tax assets
Current	Receivables		81		248
Non-current	Other assets		36		36
Deferred income tax assets	Other assets		269		216
Total income tax assets			386		500
Current income tax liabilities
Current	Payables and accrued charges		41		47
Non-current	Othernon-current liabilities		40		64
Deferred income tax liabilities	Deferred income tax liabilities		3,137		2,907
Total income tax liabilities			3,218		3,018

NOTE 6  DISCONTINUED OPERATIONS

During the three and nine months ended September 30, 2019, there were no discontinued operations.

In 2018, the Company’s investments in Sociedad Quimica y Minera de Chile S.A. (“SQM”), Israel Chemical Ltd. (“ICL”) and Arab Potash Company (“APC”) were presented as discontinued operations. During the nine months ended September 30, 2018, the Company sold its investments in ICL, a portion of its investment in SQM and its Conda Phosphate operations for proceeds, net of commissions, of $1,061, $685 and $87, respectively.

33

Unaudited In millions of US dollars except as otherwise noted  

Net earnings from discontinued operations were comprised of:

	Three Months Ended September 30, 2018			Nine Months Ended September 30, 2018
Gain on disposal of investment in SQM		-			841
Dividend income of SQM, APC and ICL1		30			156
Income tax expense2		(7	)		(299	)
Net earnings from discontinued operations		23			698

1 Dividend income is included in cash provided by operating activities on the condensed consolidated statements of cash flows.

2 For the three months ended September 30, 2018, income tax expense relates to the planned repatriation of dividend income and the remaining excess cash available in Chile. For the nine months ended September 30, 2018, income tax expense is comprised of $255 relating to the disposals of certain SQM shares including the planned repatriation of the net proceeds, and $44 relating to earnings from discontinued operations.

NOTE 7  FINANCIAL INSTRUMENTS

Fair Value

Estimated fair values for financial instruments are designed to approximate amounts for which the instruments could be exchanged in a currentarm’s-length transaction between knowledgeable, willing parties. The valuation policies and procedures for financial reporting purposes are determined by the Company’s finance department. There have been no changes to the Company’s valuation methods presented in Note 13 of the 2018 annual consolidated financial statements and those valuation methods have been applied in these interim financial statements.

The following table presents the Company’s fair value hierarchy for financial assets and financial liabilities carried at fair value on a recurring basis or measured at amortized cost:

	September 30, 2019									December 31, 2018
Financial instruments measured at	Carrying Amount			Level 11			Level 21			Carrying Amount			Level 11			Level 21
Fair value on a recurring basis
Cash and cash equivalents		568			-			568			2,314			-			2,314
Derivative instrument assets		5			-			5			5			-			5
Other current financial assets - marketable securities2		192			23			169			97			12			85
Investments at FVTOCI3		160			160			-			186			186			-
Derivative instrument liabilities		(38	)		-			(38	)		(71	)		-			(71	)
Amortized cost
Current portion of long-term debt
Senior notes and debentures4		(494	)		-			(507	)		(995	)		-			(1,009	)
Fixed and floating rate debt		(7	)		-			(7	)		(8	)		-			(8	)
Long-term debt
Senior notes and debentures4		(8,532	)		(4,788	)		(4,311	)		(7,569	)		(1,004	)		(6,177	)
Fixed and floating rate debt		(23	)		-			(23	)		(22	)		-			(22	)

1 During the period ended September 30, 2019, there were no transfers between Level 1 and Level 2 for financial instruments measured at fair value on a recurring basis. The Company’s policy is to recognize transfers at the end of the reporting period.

2 Marketable securities consist of equity and fixed income securities. The Company determines the fair value of equity securities based on the bid price of identical instruments in active markets. The Company values fixed income securities using quoted prices of instruments with similar terms and credit risk.

3 Investments at fair value through other comprehensive income (“FVTOCI”) are comprised of shares in Sinofert Holdings Ltd. (“Sinofert”) (December 31, 2018 – Sinofert and other).

4 Carrying amount of liability includes net unamortized debt issue costs.

NOTE 8  SHORT-TERM DEBT

In 2019, the Company terminated its $500 accounts receivable securitization program. There were no loan drawdowns made under this program in 2019.

34

Unaudited In millions of US dollars except as otherwise noted  

NOTE 9  LONG-TERM DEBT

The following tables summarize the Company’s long-term debt issuances and repayment activities during the nine months ended September 30, 2019:

	Rate of interest (%)		Maturity		Amount
Notes issued 2019		4.200		April 1, 2029		750
Notes issued 2019		5.000		April 1, 2049		750
						1,500

The notes issued in 2019 are unsecured, rank equally with Nutrien’s existing unsecured debt, and have no sinking fund requirements prior to maturity. Each series is redeemable and provides for redemption prior to maturity, at the Company’s option, at specified prices.

	Rate of interest (%)		Maturity		Amount
Debentures repaid 2019		6.750		January 15, 2019		500
Senior Notes repaid 2019		6.500		May 15, 2019		500
						1,000

NOTE 10  SHARE CAPITAL

Authorized

The Company is authorized to issue an unlimited number of common shares without par value and an unlimited number of preferred shares. The common shares are not redeemable or convertible. The preferred shares may be issued in one or more series with rights and conditions to be determined by the Board of Directors. No preferred shares have been issued.

Issued

	Number of Common Shares			Share Capital
Balance – December 31, 2018		608,535,477			16,740
Issued under option plans and share-settled plans		431,485			21
Repurchased		(36,066,766	)		(992	)
Balance – September 30, 2019		572,900,196			15,769

Share repurchase programs

	Board of Directors Approval	Expiry	Maximum Shares for Repurchase
2018 Normal Course Issuer Bid1	February 20, 2018	February 22, 2019		50,363,686
2019 Normal Course Issuer Bid2	February 20, 2019	February 26, 2020		30,133,631

1 On December 14, 2018, the normal course issuer bid was increased to permit the repurchase of up to 8 percent of the Company’s outstanding common shares.

2 The normal course issuer bid permitted the repurchase of up to 5 percent of the Company’s outstanding common shares.

The Company has repurchased the maximum authorized amount under the 2019 normal course issuer bid. Purchases under the 2019 normal course issuer bid were made through open market purchases at market price as well as by other means as permitted by applicable securities regulatory authorities, including private agreements.

35

Unaudited In millions of US dollars except as otherwise noted  

The following table summarizes the Company’s share repurchase activities during the period:

	Three Months Ended September 30				Nine Months Ended  September 30
	2019		2018		2019		2018
Common shares repurchased for cancellation		-		7,271,800		36,066,766		32,209,923
Average price per share		-		54.15		52.07		51.62
Total cost		-		394		1,878		1,663
Repurchase resulting in a reduction of:
Share capital		-		199		992		884
Contributed surplus 1		-		-		-		23
Retained earnings1		-		195		886		756

1 The excess of net cost over the average book value of the shares.

Dividends declared

The Company declared dividends per share of $0.45 (2018 – $0.40) during the three months ended September 30, 2019, payable on October 17, 2019 to shareholders of record on September 30, 2019, and $0.88 (2018 – $1.20) during the nine months ended September 30, 2019.

In 2019, the Company announced an increase in the expected quarterly dividend from $0.43 per share to $0.45 per share commencing with the quarterly dividend declared in the third quarter of 2019 and until otherwise determined by the Board of Directors.

Anti-dilutive shares

The diluted weighted average shares calculation excluded 979,000 stock options and 118,000 equity-settled performance share units for the three months ended September 30, 2018; and 621,000 stock options and 118,000 equity-settled performance share units for the nine months ended September 30, 2018, due to their anti-dilutive effect.

NOTE 11  BUSINESS ACQUISITIONS

The Company had the following acquisitions for the nine months ended September 30, 2019:

	Ruralco Holdings Limited (“Ruralco”)	Other Acquisitions
Acquisition date	September 30, 2019	Various
Total consideration, net of cash and cash equivalents acquired	$330 Also included in the total consideration, net of cash and cash equivalents acquired, is the impact of $18 relating to a foreign exchange hedge loss which the Company designated a cash flow hedge and accounted for similarly to other cash flow hedges. As the hedge was related to the commitment to purchase a foreign operation the Company considered it anon-financial item. The loss from the hedging instrument initially recognized in other comprehensive income (loss) was adjusted as part of goodwill when the business acquisition occurred.	$507, net of $100 previously held equity-accounted interest held in Agrichem. The remaining 20 percent interest in Agrichem was acquired in the first nine months of 2019, making Agrichem a wholly owned consolidated subsidiary of the Company.
Description	An agriservices business in Australia with more than 500 operating locations.	54 Retail locations in North and South America and Australia, which included companies operating within the proprietary products business, such as Actagro, LLC (“Actagro”), a developer, manufacturer and marketer of environmentally sustainable soil and plant health products and technologies.
Expected benefits	•  reduced operating costs •  broader distribution of Nutrien/Landmark products •  enhanced ability to foster innovation •  exposure to the water segment	•  expansion of geographical coverage for the sale of crop input products •  increased customer base and workforce •  synergies between Nutrien and acquired businesses

36

Unaudited In millions of US dollars except as otherwise noted  

The Company has engaged independent valuation experts to assist in determining the fair value of certain assets acquired and liabilities assumed and related deferred income tax impacts. As at September 30, 2019, the purchase price allocation for the Actagro acquisition was substantially complete. The purchase price allocation for Ruralco and other acquisitions are not final as the Company is continuing to obtain and verify information required to determine the fair value of certain assets acquired and liabilities assumed and the amount of deferred income taxes arising on their recognition. The Company expects to finalize the amounts recognized as it obtains the information necessary to complete the analysis within one year from the date of the acquisition.

The preliminary values allocated to the acquired assets and assumed liabilities based upon fair values were as follows:

	September 30, 2019
	Ruralco			Other Acquisitions
Receivables 1		250			68
Inventories		116			120
Prepaid expenses and other current assets		11			39
Property, plant and equipment		70			106
Goodwill2		272			293
Other intangible assets		55			179
Investments and other assets		31			2
Short-term debt3		(112	)		-
Payables and accrued charges		(299	)		(152	)
Other current liabilities		(17	)		-
Long-term debt		-			(36	)
Othernon-current liabilities		(47	)		(12	)
Total consideration		330			607
Previously held equity-accounted interest in Agrichem		-			(100	)
Total consideration, net of cash and cash equivalents acquired		330			507

1 Includes trade receivables with gross contractual amount of $247.

2 Goodwill was calculated as the excess of the fair value of consideration transferred over the recognized amount of net identifiable assets acquired. The portion of goodwill deductible for income tax purposes will be determined when the purchase allocation is finalized.

3 Outstanding amount on the Ruralco credit facilities assumed as part of the acquisition.

The significant fair value considerations included in the allocation of the purchase price are discussed below:

Asset	Valuation Technique
Property, plant and equipment	Market approach for land and certain types of personal property: sales comparison that measures the value of an asset through an analysis of sales and offerings of comparable assets. Replacement costs for all other depreciable property, plant and equipment: measures the value of an asset by estimating the cost to acquire or construct comparable assets and adjusts for age and condition of the asset.
Other intangible assets	Income approach – multi-period excess earnings method: which measures the value of an asset based on the present value of the incrementalafter-tax cash flows attributable to the asset after deducting contributory asset charges (“CACs”). Allocation of CACs is a matter of judgment and based on the nature of the acquired business’ operations and historical trend.

The Ruralco acquisition was completed at the close of business on September 30, 2019, therefore, the Company’s consolidated statements of earnings did not include any impacts from Ruralco for the three and nine months ended September 30, 2019. Financial information related to business acquisitions is as follows:

	Pro Forma 1				Three Months Ended 2 September 30, 2019		Nine Months Ended 2 September 30, 2019
	Ruralco		Other Acquisitions		Other Acquisitions		Other Acquisitions
Sales		1,090		460		99		267
EBITDA/Net earnings		50		80		4		6

1 Estimated annual sales and EBITDA if acquisitions occurred at January 1, 2019.

2 Sales and net earnings from continuing operations before income taxes from date of acquisition.

37

Unaudited In millions of US dollars except as otherwise noted  

NOTE 12  SEASONALITY

Seasonality in the Company’s business results from increased demand for products during planting season. Crop input sales are generally higher in spring and fall application seasons. Crop input inventories are normally accumulated leading up to each application season. Feed and industrial sales are more evenly distributed throughout the year. The results of this seasonality have a corresponding effect on trade and rebates receivables, inventories, prepaid expenses and other current assets and trade payables. Our short-term debt also fluctuates during the year to meet working capital needs. The Company’s cash collections generally occur after the application season is complete, while customer prepayments are concentrated in December and January and inventory prepayments are concentrated in the period from November to January.

NOTE 13  RELATED PARTY TRANSACTIONS

The Company sells potash from its Canadian mines for use outside Canada and the United States exclusively to Canpotex. Sales are at prevailing market prices and are settled on normal trade terms. Sales to Canpotex for the three months ended September 30, 2019 were $379 (2018 – $458) and the nine months ended September 30, 2019 were $1,421 (2018 – $1,198). At September 30, 2019, $215 (December 31, 2018 – $208) was owing from Canpotex.

38