COMPASS MINERALS INTERNATIONAL, INC.
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2016 FORM 10-K
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Delaware
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36-3972986
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(State or other jurisdiction of incorporation or
organization)
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(I.R.S. Employer Identification No.)
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9900 West 109
th
Street, Suite 100
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66210
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Overland Park, Kansas
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(Zip Code)
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(Address of principal executive offices)
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Title of each class
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Name of each exchange on which registered
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Common stock, par value $0.01 per share
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New York Stock Exchange
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Large accelerated filer
þ
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Accelerated filer ☐
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Non-accelerated filer ☐
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Smaller reporting company ☐
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Document
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Parts into which Incorporated
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Portions of the Proxy Statement for the Annual Meeting of Stockholders to be held May 3, 2017
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Part III, Items 10, 11, 12, 13 and 14
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COMPASS MINERALS INTERNATIONAL, INC.
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2016 FORM 10-K
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PART I
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Page No.
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4
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19
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29
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29
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29
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29
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PART II
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31
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33
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34
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48
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50
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87
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87
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88
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PART III
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88
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89
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89
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89
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89
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PART IV
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90
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SIGNATURES
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94
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1
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COMPASS MINERALS INTERNATIONAL, INC.
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2016 FORM 10-K
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•
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risks related to our mining and industrial operations;
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•
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geological conditions;
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•
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dependency on a limited number of key production and distribution facilities and critical equipment;
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•
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the inability to fund necessary capital expenditures or successfully complete capital projects;
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supply constraints or price increases for energy and raw materials used in our production processes;
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weather conditions;
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climate change;
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our indebtedness and ability to pay our indebtedness;
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restrictions in our debt agreements that may limit our ability to operate our business or require accelerated debt payments;
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tax liabilities;
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financial assurance requirements imposed on us;
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the inability of our customers to access credit or a default by our customers of trade credit extended by us or financing we have guaranteed;
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restrictions on or ability to pay dividends;
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the impact of competition on the sales of our products;
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risks associated with our international operations and sales;
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the impact of anticipated changes in plant nutrition prices and customer application rates;
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2
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COMPASS MINERALS INTERNATIONAL, INC.
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2016 FORM 10-K
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•
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the seasonal demand for our products;
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conditions in the agricultural sector and supply and demand imbalances for competing plant nutrition products;
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increasing costs or a lack of availability of transportation services;
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strikes, other forms of work stoppage or slowdown or other union activities;
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the loss of key personnel;
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our rights and governmental authorizations to mine and operate our properties;
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our ability to expand our business through acquisitions, integrate acquired businesses and realize anticipated benefits from acquisitions;
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compliance with foreign and U.S. laws and regulations applicable to our international operations;
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compliance with environmental, health and safety laws and regulations;
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environmental liabilities;
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the ability to access our computer systems and information technology or the inability to protect confidential data;
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misappropriation or infringement claims relating to intellectual property;
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changes in industry standards and regulatory requirements;
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product liability claims and product recalls;
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inability to obtain required product registrations or increased regulatory requirements;
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domestic and international general business and economic conditions; and
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other risk factors included in this report or reported from time to time in our filings with the Securities and Exchange Commission (the “SEC”). See “Where You Can Find More Information.”
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3
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COMPASS MINERALS INTERNATIONAL, INC.
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2016 FORM 10-K
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ITEM 1.
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BUSINESS
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•
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The largest rock salt mine in the world in Goderich, Ontario, Canada;
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•
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The largest dedicated rock salt mine in the U.K. in Winsford, Cheshire;
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A solar evaporation facility located in Ogden, Utah, which is both the largest sulfate of potash specialty fertilizer (“SOP”) production site and the largest solar salt production site in the Western Hemisphere; and
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•
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Several facilities producing essential agricultural nutrients and specialty chemicals in Brazil.
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4
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COMPASS MINERALS INTERNATIONAL, INC.
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2016 FORM 10-K
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5
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COMPASS MINERALS INTERNATIONAL, INC.
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2016 FORM 10-K
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Location
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Annual
Production
Capacity
(a)
(tons)
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Product Type
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North America
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Goderich, Ontario, Mine
(b)
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8,000,000
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Rock Salt
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Cote Blanche, Louisiana, Mine
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3,000,000
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Rock Salt
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Ogden, Utah:
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Salt
(c)
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1,500,000
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Solar Salt
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Magnesium Chloride
(d)
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750,000
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Magnesium Chloride
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Lyons, Kansas, Plant
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450,000
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Evaporated Salt
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Unity, Saskatchewan, Plant
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160,000
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Evaporated Salt
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Goderich, Ontario, Plant
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130,000
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Evaporated Salt
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Amherst, Nova Scotia, Plant
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130,000
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Evaporated Salt
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United Kingdom
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Winsford, Cheshire, Mine
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1,500,000
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Rock Salt
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6
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COMPASS MINERALS INTERNATIONAL, INC.
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2016 FORM 10-K
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Mine
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Years in operation
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Remaining reserve*
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Remaining mine life
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Goderich
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57 years
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562.2 million tons
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86 years
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Cote Blanche
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51 years
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312.4 million tons
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104 years
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Winsford
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171 years
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31.5 million tons
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31 years
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7
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COMPASS MINERALS INTERNATIONAL, INC.
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2016 FORM 10-K
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8
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COMPASS MINERALS INTERNATIONAL, INC.
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2016 FORM 10-K
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•
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macro nutrients - the traditional NPK fertilizers (nitrogen (N), phosphorus (P) and potassium (K)),
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•
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secondary nutrients - calcium, magnesium and sulfur, and
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•
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micronutrients - trace elements of iron, manganese, copper, boron, zinc, molybdenum, chlorine and nickel.
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9
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COMPASS MINERALS INTERNATIONAL, INC.
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2016 FORM 10-K
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10
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COMPASS MINERALS INTERNATIONAL, INC.
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2016 FORM 10-K
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11
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COMPASS MINERALS INTERNATIONAL, INC.
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2016 FORM 10-K
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Production Facility
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Suzano I
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Suzano II
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Igarassu
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Mauá
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Uberlândia
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Fermavi
(a)
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Reluz Nordeste
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Jacareí I
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Jacareí II
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Agriculture Productivity
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X
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X
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X
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X
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X
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X
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X
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Chemical Solutions
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X
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X
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X
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X
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12
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COMPASS MINERALS INTERNATIONAL, INC.
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2016 FORM 10-K
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13
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COMPASS MINERALS INTERNATIONAL, INC.
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2016 FORM 10-K
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14
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COMPASS MINERALS INTERNATIONAL, INC.
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2016 FORM 10-K
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Land and Related Surface Rights
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Mineral Reserves
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Name, Location
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Use
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Owned/
Leased
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Expiration of
Lease
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Owned/
Leased
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Expiration of
Lease
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Cote Blanche, Louisiana
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Rock salt production facility
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Leased
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2060
(1)
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Leased
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2060
(1)
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Lyons, Kansas
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Evaporated salt production facility
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Owned
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N/A
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Owned
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N/A
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Ogden, Utah
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SOP, solar salt and magnesium
chloride production facility
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Owned
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N/A
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Leased
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(2)
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Wynyard, Saskatchewan, Canada
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SOP production facility
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Owned
(3)
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N/A
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Leased
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2020
(4)
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Amherst, Nova Scotia, Canada
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Evaporated salt production facility
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Owned
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N/A
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Leased
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2023
(5)
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Goderich, Ontario, Canada
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Rock salt production facility
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Owned
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N/A
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Leased
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2022
(5)
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Goderich, Ontario, Canada
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Evaporated salt production facility
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Owned
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N/A
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Owned
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N/A
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Unity, Saskatchewan, Canada
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Evaporated salt production facility
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Owned
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N/A
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Leased
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2037/2030
(6)
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Winsford, Cheshire, United Kingdom
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Rock salt production facility; records
management
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Owned
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N/A
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Owned
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N/A
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London, United Kingdom
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Records management
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Leased
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2028
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N/A
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N/A
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Suzano I, São Paulo, Brazil
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Nutritional supplements and other chemicals production facility
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Owned
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N/A
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N/A
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N/A
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Suzano II, São Paulo, Brazil
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Nutritional supplements packaging facility
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Owned
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N/A
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N/A
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N/A
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Igarassu, Pernambuco, Brazil
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Various chemicals production facility
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Owned
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N/A
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N/A
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N/A
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Mauá, São Paulo, Brazil
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Nutritional supplements production facility
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Owned
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N/A
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N/A
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N/A
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Uberlândia, Minas Gerais, Brazil
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Mineral supplements for beef cattle and milk
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Owned
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N/A
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N/A
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N/A
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Fermavi, Minas Gerais, Brazil
(7)
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Nutritional supplements, water treatment, and other chemicals production facility
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Owned
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N/A
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N/A
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N/A
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Reluz Nordeste, Alagoas, Brazil
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Water treatment and other chemicals production facility
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Owned
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N/A
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N/A
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N/A
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Jacareí I, São Paulo, Brazil
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Nutritional supplements production facility
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Owned
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N/A
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N/A
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N/A
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Jacareí II, São Paulo, Brazil
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Nutritional supplements production and warehouse
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Leased
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2030
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N/A
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N/A
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Overland Park, Kansas
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Corporate headquarters
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Leased
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2020
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N/A
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N/A
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(1)
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The Cote Blanche lease was amended in 2014 to include two 25-year renewal options.
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(2)
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The Ogden lease renews on an annual basis.
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(3)
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The Wynyard location also has leases expiring in 2026 for two parcels of land.
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(4)
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The Wynyard mineral lease may be renewed for additional 20-year periods.
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(5)
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Subject to our right of renewal through 2043.
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(6)
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Consists of a lease expiring in 2037 and a lease expiring in 2030 subject to our right of renewal through 2051.
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(7)
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Hold a 50% ownership interest through a joint venture with Fermavi Eletroquímica Ltda.
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15
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COMPASS MINERALS INTERNATIONAL, INC.
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2016 FORM 10-K
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16
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COMPASS MINERALS INTERNATIONAL, INC.
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2016 FORM 10-K
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17
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COMPASS MINERALS INTERNATIONAL, INC.
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2016 FORM 10-K
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18
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COMPASS MINERALS INTERNATIONAL, INC.
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2016 FORM 10-K
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ITEM 1A.
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RISK FACTORS
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19
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COMPASS MINERALS INTERNATIONAL, INC.
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2016 FORM 10-K
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20
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COMPASS MINERALS INTERNATIONAL, INC.
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2016 FORM 10-K
|
•
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limit our ability to borrow additional money or sell our stock to fund our working capital, capital expenditures and debt service requirements;
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•
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impact our ability to implement our business strategy and limit our flexibility in planning for, or reacting to, changes in our business as well as changes to economic, regulatory or other competitive conditions;
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•
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place us at a competitive disadvantage compared to our competitors with greater financial resources;
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•
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make us more vulnerable to a downturn in our business or the economy;
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•
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require us to dedicate a substantial portion of our cash flow from operations to the repayment of our indebtedness, thereby reducing the availability of our cash flow for other purposes; and
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•
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materially and adversely affect our business and financial condition if we are unable to meet our debt service requirements or obtain additional financing.
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21
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COMPASS MINERALS INTERNATIONAL, INC.
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2016 FORM 10-K
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•
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incur additional indebtedness or contingent obligations or grant liens;
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•
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pay dividends or make distributions to our stockholders;
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•
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repurchase or redeem our stock;
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•
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make investments or dispose of assets;
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•
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prepay, or amend the terms of, certain junior indebtedness;
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•
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engage in sale and leaseback transactions;
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•
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make changes to our organizational documents or fiscal periods;
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•
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enter into third-party agreements that limit our ability to grant liens on our assets or make certain intercompany dividends, investments or asset transfers;
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enter into new lines of business;
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•
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enter into transactions with our stockholders and affiliates; and
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•
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acquire the assets of, or merge or consolidate with, other companies.
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22
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COMPASS MINERALS INTERNATIONAL, INC.
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2016 FORM 10-K
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23
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COMPASS MINERALS INTERNATIONAL, INC.
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2016 FORM 10-K
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•
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economic developments including changes in currency exchange rates, inflation risks, exchange controls, tariffs, other trade protection measures and import or export licensing requirements;
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•
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difficulties and costs associated with complying with laws, treaties and regulations, including tax laws and labor regulations, and changes to laws, treaties and regulations;
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•
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restrictions on our ability to own or operate subsidiaries, make investments or acquire new businesses;
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•
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restrictions on our ability to repatriate earnings from our subsidiaries and withholding taxes on remittances and other payments by subsidiaries; and
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•
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political developments, government deadlock, political instability, political activism, terrorist activities, civil unrest and international conflicts.
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24
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COMPASS MINERALS INTERNATIONAL, INC.
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2016 FORM 10-K
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25
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COMPASS MINERALS INTERNATIONAL, INC.
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2016 FORM 10-K
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26
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COMPASS MINERALS INTERNATIONAL, INC.
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2016 FORM 10-K
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27
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COMPASS MINERALS INTERNATIONAL, INC.
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2016 FORM 10-K
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28
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COMPASS MINERALS INTERNATIONAL, INC.
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2016 FORM 10-K
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ITEM 1B.
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UNRESOLVED STAFF COMMENTS
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ITEM 2.
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PROPERTIES
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ITEM 3.
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LEGAL PROCEEDINGS
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ITEM 4.
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MINE SAFETY DISCLOSURES
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Name
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Age
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Position
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Francis J. Malecha
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52
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President, Chief Executive Officer and Director
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John D. Craft
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54
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Interim Chief Financial Officer
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Steven N. Berger
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51
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Senior Vice President, Corporate Services
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S. Bradley Griffith
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49
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Senior Vice President, Plant Nutrition
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Jack C. Leunig
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63
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Senior Vice President, Operations
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Anthony J. Sepich
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46
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Senior Vice President, Salt
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Diana C. Toman
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38
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Senior Vice President, General Counsel and Corporate Secretary
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29
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COMPASS MINERALS INTERNATIONAL, INC.
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2016 FORM 10-K
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30
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COMPASS MINERALS INTERNATIONAL, INC.
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2016 FORM 10-K
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ITEM 5.
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MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
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31
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COMPASS MINERALS INTERNATIONAL, INC.
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2016 FORM 10-K
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Plan category
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Number of shares to be issued upon exercise of outstanding securities
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Weighted-average exercise price of outstanding securities
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Number of securities available for issuance under plan
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Equity compensation plans approved by shareholders
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Stock options
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442,755
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$
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80.07
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Restricted stock units
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63,780
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N/A
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Performance stock units
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89,011
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N/A
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Deferred stock units
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69,172
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N/A
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|||
Total securities under approved plans
(a)
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664,718
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2,642,543
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Equity compensation plans not approved by shareholders
(b)
:
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||||||
Deferred stock units
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17,775
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N/A
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Total
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682,493
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2,642,543
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32
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COMPASS MINERALS INTERNATIONAL, INC.
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2016 FORM 10-K
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ITEM 6.
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SELECTED FINANCIAL DATA
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(a)
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“Product cost” is presented exclusive of depreciation, depletion and amortization.
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(b)
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Depreciation, depletion and amortization include amounts also included in selling, general and administrative expenses.
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(c)
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In the fourth quarter of 2016, we recognized a gain of $59.3 million related to the remeasurement of our previously held equity investment in Produquímica (see Note 3 to our Consolidated Financial Statements). In the third quarter of 2014, we recognized a gain of $83.3 million ($60.6 million, net of taxes) from an insurance settlement relating to damage sustained as a result of a tornado that struck our rock salt mine and evaporation plant in Goderich, Ontario, in 2011. We recognized $82.3 million of the gain in product cost and $1.0 million of the gain in selling, general and administrative expenses in the Consolidated Statements of Operations. In the fourth quarter of 2013, we recognized a gain of $9 million ($5.7 million, net of taxes) from the settlement of an insurance claim resulting from a loss of mineral-concentrated brine due to an asset failure at our solar evaporation ponds in 2010 and a charge of $4.7 million ($2.8 million, net of taxes) from a ruling against us related to a labor matter. In 2012, our product cost, operating earnings and net earnings were impacted by the effects of a tornado in Goderich, Ontario, that occurred in August 2011.
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(d)
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In 2016, we adopted guidance which requires the presentation of debt issuance costs as a reduction to debt rather than in assets. Prior years have been adjusted to reflect this change.
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(e)
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For the purposes of computing the ratio of earnings to fixed charges, earnings consist of earnings from continuing operations before income taxes and fixed charges. Fixed charges consist of interest expense, including the amortization of deferred debt issuance costs and the interest component of our operating rents.
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33
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COMPASS MINERALS INTERNATIONAL, INC.
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2016 FORM 10-K
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ITEM 7.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
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The largest rock salt mine in the world in Goderich, Ontario, Canada;
|
•
|
The largest dedicated rock salt mine in the U.K. in Winsford, Cheshire;
|
•
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A solar evaporation facility located in Ogden, Utah, which is both the largest SOP specialty fertilizer production site and the largest solar salt production site in the Western Hemisphere;
|
•
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Several mechanical evaporation facilities producing consumer and industrial salt; and
|
•
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Multiple facilities producing essential agricultural nutrients and specialty chemicals in Brazil.
|
|
34
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COMPASS MINERALS INTERNATIONAL, INC.
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2016 FORM 10-K
|
•
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Completed the acquisition of Produquímica, a leading Brazilian specialty plant nutrition company, in October 2016.
|
•
|
Total sales for 2016 were $1,138.0 million, an increase of 4% from 2015, due to the contribution from the recent acquisition of Produquímica, which was partially offset by continued weakness in the North American agriculture market and lower salt segment selling prices.
|
•
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Operating earnings of $174.6 million decreased 21% from 2015 results due to lower operating earnings in Salt and Plant Nutrition North America segments.
|
•
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Net earnings were $162.7 million in 2016, a 2% increase from 2015. Net earnings in 2016 were positively impacted by a $59.3 million gain on the remeasurement of our previously held equity investment in Produquímica, which was mostly offset by lower earnings in our Salt and Plant Nutrition North America segments.
|
•
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EBITDA adjusted for items management believes are not indicative of our ongoing operating performance (“Adjusted EBITDA”) was $275.0 million, an 8% decrease from 2015 Adjusted EBITDA of $299.7 million.
|
•
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Diluted earnings per share of $4.79 increased by 2% from 2015 diluted earnings per share. Diluted earnings per share in 2016 was positively impacted by the $59.3 million remeasurement gain.
|
•
|
Total sales for 2015 were $1,098.7 million, a decrease of 14% from 2014, largely due to mild winter weather in the fourth quarter of 2015 and the weak agriculture market.
|
•
|
Operating earnings of $221.4 million decreased 29% from 2014 primarily due to the $82.3 million gain included in 2014 results related to the tornado that hit our facilities in Goderich, Ontario, in 2011.
|
•
|
Net earnings were $159.2 million in 2015, a 27% decrease from 2014. Net earnings in 2014 of $217.9 million were positively impacted by an insurance settlement of $60.6 million (net of tax) related to the tornado.
|
•
|
Adjusted EBITDA was $299.7 million, a 2% decrease from 2014 Adjusted EBITDA of $305.7 million.
|
•
|
Product cost of 46% of sales in 2015 increased from the product cost of 41% in 2014. The 2014 product cost was favorably impacted due to a gain of approximately $82.3 million from the aforementioned settlement.
|
•
|
Diluted earnings per share of $4.69 decreased by 27% from 2014 diluted earnings per share.
|
|
35
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
•
|
Salt gross profit decreased by $17 million due primarily to reduced salt average selling prices and higher per-unit production costs resulting from lower operating rates at our mines and unplanned downtime at our Goderich mine.
|
•
|
The decrease in salt gross profit was primarily due to a $37 million decrease in salt sales partially offset by approximately $25 million of lower logistics costs due to lower fuel rates and improved geographic mix.
|
•
|
The plant nutrition business, on a combined basis, contributed approximately $11 million to the decrease in gross profit primarily due to lower average sales prices realized in our Plant Nutrition North America segment and a partial write-down of $3.1 million of a Wolf Trax trade name acquired in 2014 partially offset by the positive impact of the results from Produquímica due to the acquisition in October 2016.
|
•
|
In addition, Plant Nutrition North America experienced an 11% increase in per-unit shipping and handling costs due to higher warehousing costs and unfavorable geographic sales mix.
|
•
|
Approximately $83 million of the decrease in gross profit was due to the gain recognized in the Salt segment in 2014 from the settlement of the insurance claim related to the tornado in Goderich, Ontario, in 2011.
|
•
|
Unfavorable exchange rate contributed approximately $7 million to the decrease in Salt gross profit.
|
•
|
Salt gross profit was unfavorably impacted by lower sales volume for highway and consumer and industrial deicing products which were offset partially by higher realized average salt sales prices.
|
•
|
Lower gross profit for Plant Nutrition North America contributed approximately $15 million to the decrease in gross profit primarily due to lower sales volumes.
|
•
|
Gross profit for Plant Nutrition North America was unfavorably impacted by lower Plant Nutrition North America sales volumes and an increase in per-unit production costs. Per-unit production costs increased as we purchased and consumed KCl and other potassium mineral feedstock to supplement production due to the poor 2014 evaporation season.
|
•
|
The decrease in Plant Nutrition North America gross profit was partially offset by higher realized average sales prices.
|
•
|
The increase in expense was due to the inclusion of Produquímica’s results since the October 2016 acquisition date and higher expenses in our Plant Nutrition North America segment due to the partial impairment of our Wolf Trax trade name and corporate severance costs related to the restructuring of our business.
|
•
|
This increase was partially offset by a decrease of $2.0 million in corporate professional services and a decrease of $1.8 million in marketing expenses in our Plant Nutrition North America and Salt segments.
|
•
|
The increase was primarily due to our higher aggregate debt level driven by the acquisition of Produquímica, which was partially offset by lower interest rates due to the refinancing of our term loans and revolving credit facility in April 2016.
|
•
|
We recognized a gain of $59.3 million related to our previously held equity investment in Produquímica, which was remeasured to fair value upon our full acquisition of the business in October 2016.
|
•
|
The decrease was primarily due to foreign exchange gains of $13.9 million in 2015 compared to losses of $0.1 million in 2016 and $3.0 million of expenses related to our debt financing.
|
•
|
Income tax expense decreased in 2016 due to lower pre-tax income after excluding the non-taxable gain recognized in 2016 from the remeasurement of our previously held equity investment in Produquímica.
|
•
|
Our income tax provision in both periods differs from the U.S. statutory rate primarily due to U.S. statutory depletion, domestic manufacturing deductions, state income taxes, foreign income, mining and withholding taxes and interest expense recognition differences for tax and financial reporting purposes.
|
•
|
Our effective tax rate was 18% in 2016 and 26% in 2015. Our effective tax rate decreased in 2016 as a result of a nontaxable gain of $59.3 million from the remeasurement of our previously held equity investment in Produquímica.
|
|
36
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
•
|
The decrease in expense was due to lower professional services expenses in both segments, which totaled approximately $2.8 million in comparison to the prior year.
|
•
|
SG&A in 2015 was also impacted by lower incentive compensation in both segments and corporate and other, which totaled approximately $2.2 million.
|
•
|
The decrease was partially offset by an increase in in corporate and other costs related to information technology and ongoing costs related to our Wolf Trax business in our Plant Nutrition North America segment.
|
•
|
The increase was primarily due to the refinancing in June 2014 of our $100.0 million 8% Senior Notes due 2019 (our “8% Notes”) with $250.0 million of our 4.875% Senior Notes due 2024 (our “4.875% Notes”).
|
•
|
Net foreign exchange gains increased from $6.6 million in 2014 to $13.9 million in 2015 and contributed to the year over year improvement.
|
•
|
The increase was due in part to a $6.9 million charge relating to the refinancing in June 2014 of our 8% Notes.
|
•
|
Decrease was primarily due to lower pre-tax income.
|
•
|
Our income tax provision in both periods differs from the U.S. statutory rate primarily due to U.S. statutory depletion, domestic manufacturing deductions, state income taxes, foreign income, mining and withholding taxes and interest expense recognition differences for tax and financial reporting purposes.
|
•
|
Our effective tax rate was 26% in 2015 and 25% in 2014.
|
|
37
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
Salt Sales (in millions)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Salt sales
|
|
$
|
811.9
|
|
|
$
|
849.0
|
|
|
$
|
1,002.6
|
|
Less: salt shipping and handling
|
|
214.5
|
|
|
239.1
|
|
|
309.3
|
|
|||
Salt product sales
|
|
$
|
597.4
|
|
|
$
|
609.9
|
|
|
$
|
693.3
|
|
Salt Operating Earnings
|
|
$
|
200.6
|
|
|
$
|
215.2
|
|
|
$
|
291.4
|
|
Salt Sales Volumes (thousands of tons)
|
|
|
|
|
|
|
||||||
Highway deicing
|
|
8,966
|
|
|
8,854
|
|
|
10,694
|
|
|||
Consumer and industrial
|
|
2,147
|
|
|
2,215
|
|
|
2,596
|
|
|||
Total tons sold
|
|
11,113
|
|
|
11,069
|
|
|
13,290
|
|
|||
Average Salt Sales Price (per ton)
|
|
|
|
|
|
|
||||||
Highway deicing
|
|
$
|
54.73
|
|
|
$
|
58.62
|
|
|
$
|
57.37
|
|
Consumer and industrial
|
|
149.63
|
|
|
148.98
|
|
|
149.89
|
|
|||
Combined
|
|
73.06
|
|
|
76.70
|
|
|
75.44
|
|
•
|
Salt segment sales were $811.9 million, a decrease of 4% from 2015, primarily due to lower average Salt sales prices in 2016.
|
•
|
Salt segment volumes were essentially flat with 2015 due to higher North American highway and consumer deicing sales volumes which were partially offset by lower U.K. sales volumes.
|
|
38
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
•
|
Our Salt operating results are impacted by the winter weather in the markets we serve. We assess the severity of winter weather compared to recent averages, using official government snow data and comparisons of our sales volumes to historical trends and other relevant data. Our assessment of the frequency of winter snow events in the three past winter weather seasons in the markets we serve are summarized below:
(a)
|
2014
|
Above average in first quarter
|
Below average in the fourth quarter
|
|
2015
|
Slightly above average in the first quarter
|
Significantly below average in the fourth quarter
|
|
2016
|
Below average in the first quarter
|
Above average in the fourth quarter
|
•
|
A decrease of 5% in Salt average sales prices contributed approximately $40 million to the decline in Salt sales and included unfavorable foreign currency exchange rates.
|
•
|
Salt segment operating earnings were $200.6 million, a decrease of 7% from 2015, primarily due to lower average selling prices and higher per unit production costs.
|
•
|
Salt segment sales were $849.0 million, a decrease of 15% from 2014 primarily due to mild winter weather in the fourth quarter of 2015.
|
•
|
Salt segment average selling price increased 2% from 2014.
|
•
|
Salt sales volumes declined 2.2 million tons or 17% due to lower highway and consumer deicing sales volumes as a result of milder winter weather experienced in the fourth quarter of 2015 when compared to the same period in the prior year.
|
•
|
Lower sales volumes for North American highway and consumer deicing customers contributed approximately $123 million to the decrease in Salt product sales.
|
•
|
The decrease in North American Salt sales volumes was partially offset by higher U.K. Salt sales volumes.
|
•
|
Unfavorable foreign currency exchange rates contributed approximately $24 million to the decrease in Salt product sales.
|
•
|
An increase of 2% in highway salt deicing average selling prices and lower per-unit shipping and handling costs compared to the prior year partially offset the decline in product sales.
|
•
|
Salt segment operating earnings were $215.2 million, a decrease of 26% from 2014, primarily due to a gain of approximately $83 million recognized in 2014 related to the tornado.
|
|
39
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
Combined Plant Nutrition Sales (in millions)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Combined plant nutrition sales
|
|
$
|
316.5
|
|
|
$
|
238.4
|
|
|
$
|
270.2
|
|
Less: combined plant nutrition shipping and handling
|
|
30.4
|
|
|
22.4
|
|
|
28.4
|
|
|||
Combined plant nutrition product sales
|
|
$
|
286.1
|
|
|
$
|
216.0
|
|
|
$
|
241.8
|
|
Combined Plant Nutrition Operating Earnings
|
|
$
|
28.5
|
|
|
$
|
57.9
|
|
|
$
|
74.8
|
|
Combined Plant Nutrition Sales Volumes (thousands of tons)
|
|
507
|
|
|
311
|
|
|
396
|
|
•
|
Combined plant nutrition sales were $316.5 million, an increase of 33% from 2015, primarily due to the inclusion of Produquímica’s results since the October 2016 acquisition date.
|
•
|
Combined plant nutrition operating earnings were $28.5 million, a decrease of 51% from 2015, primarily due to lower average selling prices in North America partially offset by the inclusion of Produquímica results since the acquisition in October 2016.
|
•
|
Combined plant nutrition volumes increased 63% from 2015 driven by Produquímica sales volumes.
|
•
|
Plant nutrition results in 2014 and 2015 only include Plant Nutrition North America. See below for further discussion.
|
|
40
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
Plant Nutrition North America Sales (in millions)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Plant Nutrition North America sales
|
|
$
|
203.0
|
|
|
$
|
238.4
|
|
|
$
|
270.2
|
|
Less: Plant Nutrition North America shipping and handling
|
|
25.0
|
|
|
22.4
|
|
|
28.4
|
|
|||
Plant Nutrition North America product sales
|
|
$
|
178.0
|
|
|
$
|
216.0
|
|
|
$
|
241.8
|
|
Plant Nutrition North America Operating Earnings
|
|
$
|
21.1
|
|
|
$
|
57.9
|
|
|
$
|
74.8
|
|
Plant Nutrition North America Sales Volumes (thousands of tons)
|
|
313
|
|
|
311
|
|
|
396
|
|
|||
Plant Nutrition North America Average Sales Price (per ton)
|
|
$
|
648
|
|
|
$
|
765
|
|
|
$
|
682
|
|
•
|
Plant Nutrition North America sales were $203.0 million, a decrease of 15% from 2015, primarily due to lower average sales prices.
|
•
|
Plant Nutrition North America average sales price decreased by 15% from 2015 and contributed approximately $37 million to the decrease in Plant Nutrition North America sales. Average sales prices were lower than 2015 due to the depressed agriculture market.
|
•
|
Plant Nutrition North America volumes increased 1% from 2015 which partially offset the decrease in sales by approximately $1 million.
|
•
|
Plant Nutrition North America operating earnings were $21.1 million, a decrease of 64% from 2015, primarily due to a 15% reduction in average selling prices and an 11% increase in per-unit shipping and handling costs related to higher warehousing costs and an unfavorable geographic sales mix.
|
•
|
Plant Nutrition North America sales were $238.4 million, a decrease of 12% from 2014, primarily due to weakness in the agriculture market.
|
•
|
Plant Nutrition North America average selling price increased by 12% from 2014.
|
•
|
Plant Nutrition North America volumes decreased 21% from 2014 driven by weakness in the agriculture market.
|
•
|
Per-unit costs were unfavorably impacted in 2015 by purchased KCl used to supplement the raw mineral feedstock produced through solar-evaporation at our Ogden, Utah, facility.
|
|
41
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
•
|
Plant Nutrition North America sales volumes declined 85,000 tons or 21% and contributed approximately $49 million to the decrease in plant nutrition product sales.
|
•
|
The 12% increase in Plant Nutrition North America average selling price partially offset the decrease in Plant Nutrition North America product sales by approximately $23 million.
|
•
|
Plant Nutrition North America operating earnings were $57.9 million, a decrease of 23% from 2014, primarily due to lower sales volumes and higher per unit costs.
|
Plant Nutrition South America Sales (in millions)
|
|
2016
|
|
2015
|
|
2014
|
||||
Plant Nutrition South America sales
|
|
$
|
113.5
|
|
|
—
|
|
|
—
|
|
Less: Plant Nutrition South America shipping and handling
|
|
5.4
|
|
|
—
|
|
|
—
|
|
|
Plant Nutrition South America product sales
|
|
$
|
108.1
|
|
|
—
|
|
|
—
|
|
Plant Nutrition South America Operating Earnings
|
|
$
|
7.4
|
|
|
—
|
|
|
—
|
|
Plant Nutrition South America Sales Volumes (thousands of tons)
|
|
|
|
|
|
|
||||
Agricultural productivity
|
|
122
|
|
|
—
|
|
|
—
|
|
|
Chemical solutions
|
|
72
|
|
|
—
|
|
|
—
|
|
|
Total tons sold
|
|
194
|
|
|
—
|
|
|
—
|
|
|
Average Plant Nutrition South America Sales Price (per ton)
|
|
|
|
|
|
|
||||
Agricultural productivity
|
|
$
|
713
|
|
|
—
|
|
|
—
|
|
Chemical solutions
|
|
372
|
|
|
—
|
|
|
—
|
|
|
Combined
|
|
587
|
|
|
—
|
|
|
—
|
|
•
|
Plant Nutrition South America sales were $113.5 million for the fourth quarter. Plant Nutrition South America’s operating results are impacted by seasonality. Sales volumes are usually higher in the third and fourth quarter and lower in the first and second quarters. See “—Seasonality” for more information.
|
•
|
Plant Nutrition South America average sales price was $587 per ton.
|
•
|
Improving market dynamics for the deicing market is expected to result in increased Salt sales volumes in 2017 from the prior year, assuming average winter weather for the year. We expect Salt sales volumes to range from 11.8 million to 12.6 million tons in 2017.
|
•
|
Despite the expected increase in Salt sales volumes, we expect Salt operating margins to be pressured by lower average sales prices and higher per-unit costs in the first half of 2017.
|
•
|
We believe the North American specialty plant nutrient market has stabilized at current pricing levels. We anticipate limited volume and average selling price growth for SOP products in North America in 2017. We expect Plant Nutrition North America sales volumes to range from 300,000 to 330,000 tons in 2017.
|
•
|
The Brazilian plant nutrient market is expected to remain strong in 2017, which continues to benefit from robust farm incomes due to the strong U.S. dollar and demand for Brazilian commodities. We expect Plant Nutrition South America sales volumes to range from 800,000 to 1.1 million tons.
|
•
|
Due to the seasonality of the Plant Nutrition South America segment, we expect operating earnings for this segment to be minimal in the first half of 2017.
|
•
|
We continue to invest in our Goderich mine to increase our annual available salt production capability to nine million tons as demand warrants.
|
|
42
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
•
|
We continue to invest in our continuous mining project at Goderich. This project is expected to be completed in the fourth quarter of 2017 and should generate annual cost savings of approximately $30 million once the project is fully implemented beginning in 2018.
|
•
|
We invested in our Ogden facility to strengthen our solar-pond-based SOP production through upgrades to our processing plant and our solar evaporation ponds. This included modifying our existing solar evaporation ponds to increase the annual solar harvest and increasing the extraction yield and processing capacity of our SOP plant. These improvements have increased our current annual solar-pond-based SOP production capacity to approximately 320,000 tons.
|
•
|
We are nearing completion of a project to further expand our SOP production capacity at our Ogden facility. After the completion of this additional expansion, we expect our SOP production capacity to be approximately 550,000 tons produced with supplemental KCl feedstock. In addition, we are expanding our ability to compact product into various product grades.
|
•
|
In 2012, we acquired the mining rights to approximately 100 million tons of salt reserves in the Chilean Atacama Desert. This reserve estimate is based upon an initial report. We will need to complete a feasibility study before we proceed with the development of this project to ensure our salt reserves are probable. The development of this project will require significant infrastructure to establish extraction and logistics capabilities. In the event that production begins, we will be required to pay the seller royalties on any tons produced.
|
•
|
In 2014, we completed the acquisition of Wolf Trax, Inc., a privately held Canadian corporation. The acquisition enhanced our position as a key resource for premium plant nutrition products by adding innovative plant nutrient products based upon proprietary and patented technologies.
|
•
|
In October 2016, we acquired the remaining 65% of the issued and outstanding capital stock of Produquímica (see Note 3 to our Consolidated Financial Statements for more information).
|
|
43
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
2016
|
2015
|
2014
|
Operating Activities:
|
||
Net cash flows provided by operating activities were $167.3 million.
» Net earnings were $162.7 million which included a non-cash remeasurement gain of $59.3 million related to the acquisition of Produquímica.
» Non-cash depreciation and amortization expense was $90.3 million.
» Working capital items were a use of operating cash flows of $31.7 million.
|
Net cash flows provided by operating activities were $137.9 million.
» Net earnings were $159.2 million.
» Non-cash depreciation and amortization expense was $78.3 million.
» Working capital items were a use of operating cash flows of $111.0 million.
|
Net cash flows provided by operating activities were $242.9 million.
» Net earnings were $217.9 million.
» This included a non-cash gain of $60.6 million (net of tax) related to the tornado insurance settlement which reduced our cash flows from operations.
» Working capital items were a source of operating cash flows of $1.0 million.
|
Investing Activities:
|
||
Net cash flows used by investing activities were $467.8 million.
» Included $182.2 million of capital expenditures and cash payments of $4.7 million relating to our previously held equity investment and $277.7 million for the full acquisition of Produquímica.
|
Net cash flows used by investing activities were $335.4 million.
» Included $217.6 million of capital expenditures and an equity investment of $116.4 million.
|
Net cash flows used by investing activities were $189.2 million.
» Included $125.2 million of capital expenditures, partially offset by tornado insurance proceeds.
» We also acquired Wolf Trax, Inc. for $86.5 million in 2014.
|
Financing Activities:
|
||
Net cash flows provided by financing activities were $314.6 million.
» Included net proceeds from issuance of debt of $416.7 million, payments of dividends of $94.1 million, payments of $8.5 million related to the refinancing of debt.
|
Net cash flows provided by financing activities were $14.2 million.
» Primarily related to new debt obtained to finance the Produquímica investment of $100 million, partially offset by the payment of dividends of $89.4 million.
|
Net cash flows provided by financing activities were $64.6 million.
» Included the refinancing of our 8% Notes and proceeds received from stock option exercises of $7.5 million, partially offset by the payment of dividends of $80.7 million and debt payments of $102.4 million.
|
|
44
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
Contractual Cash Obligations
|
|
Total
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Thereafter
|
||||||||||||||
Long-term Debt
|
|
$
|
1,332.8
|
|
|
$
|
130.2
|
|
|
$
|
10.9
|
|
|
$
|
10.7
|
|
|
$
|
9.9
|
|
|
$
|
918.7
|
|
|
$
|
252.4
|
|
Interest
(a)
|
|
211.2
|
|
|
58.8
|
|
|
34.7
|
|
|
33.3
|
|
|
31.9
|
|
|
21.5
|
|
|
31.0
|
|
|||||||
Capital Lease Obligations
(b)
|
|
10.7
|
|
|
1.0
|
|
|
0.9
|
|
|
0.9
|
|
|
0.9
|
|
|
0.9
|
|
|
6.1
|
|
|||||||
Operating Leases
(b)
|
|
37.8
|
|
|
14.4
|
|
|
7.7
|
|
|
5.1
|
|
|
3.0
|
|
|
1.8
|
|
|
5.8
|
|
|||||||
Unconditional Purchase Obligations
(c)
|
|
11.7
|
|
|
10.0
|
|
|
1.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Estimated Future Pension Benefit Obligations
(d)
|
|
61.7
|
|
|
2.4
|
|
|
2.4
|
|
|
2.5
|
|
|
2.6
|
|
|
2.7
|
|
|
49.1
|
|
|||||||
Total Contractual Cash Obligations
|
|
$
|
1,665.9
|
|
|
$
|
216.8
|
|
|
$
|
58.3
|
|
|
$
|
52.5
|
|
|
$
|
48.3
|
|
|
$
|
945.6
|
|
|
$
|
344.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Other Commitments
|
|
Total
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Thereafter
|
||||||||||||||
Letters of Credit
|
|
$
|
6.2
|
|
|
$
|
6.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Bank Letter Guarantees
(e)
|
|
45.8
|
|
|
45.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Performance Bonds
(e)
|
|
137.1
|
|
|
124.8
|
|
|
12.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Total Other Commitments
|
|
$
|
189.1
|
|
|
$
|
176.8
|
|
|
$
|
12.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(a)
|
Based on maintaining existing debt balances to maturity. Interest on our credit facilities varies with the Eurodollar rate and the base rate. The December 31, 2016, blended rate of 3.0%, including the applicable spread, was used for this calculation for CMI debt. The interest amounts also include estimates for the debt assumed in the Produquímica acquisition. The amounts in the table do not include interest payments of approximately $4 million each year which may be required to be deposited with the taxing authorities if other collateral arrangements cannot be made as long as the dispute remains outstanding. Note 8 to Consolidated Financial Statements provides additional information related to our Canadian tax reassessments.
|
(b)
|
We lease property and equipment under non-cancelable operating and capital leases for varying periods.
|
(c)
|
We have contracts to purchase certain amounts of electricity, equipment and a minimum tonnage of salt under purchase contracts. The price of the salt is dependent on the product purchased and has been estimated based on an average of the prices in effect for the various products at December 31, 2016, and adjusted based upon estimated price increases for 2017. In addition, we have minimum throughput commitments in certain depots.
|
(d)
|
Note 9 to our Consolidated Financial Statements provides additional information.
|
(e)
|
Note 12 to our Consolidated Financial Statements provides additional information.
|
|
45
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
|
|
For the Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net earnings
|
|
$
|
162.7
|
|
|
$
|
159.2
|
|
|
$
|
217.9
|
|
Interest expense
|
|
34.1
|
|
|
21.5
|
|
|
20.1
|
|
|||
Income tax expense
|
|
34.6
|
|
|
55.3
|
|
|
73.9
|
|
|||
Depreciation, depletion and amortization
|
|
90.3
|
|
|
78.3
|
|
|
78.0
|
|
|||
EBITDA
|
|
$
|
321.7
|
|
|
$
|
314.3
|
|
|
$
|
389.9
|
|
Adjustments to EBITDA:
|
|
|
|
|
|
|
|
|
|
|||
Gain from insurance settlement
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(83.3
|
)
|
Gain from remeasurement of equity method investment
|
|
(59.3
|
)
|
|
—
|
|
|
—
|
|
|||
Business acquisition related items
(1)
|
|
8.4
|
|
|
—
|
|
|
—
|
|
|||
Indefinite-lived intangible asset impairment
|
|
3.1
|
|
|
—
|
|
|
—
|
|
|||
Fees and premiums paid to redeem debt
|
|
3.0
|
|
|
—
|
|
|
4.0
|
|
|||
Write-off of unamortized deferred financing fees and original issue discount
|
|
—
|
|
|
—
|
|
|
2.9
|
|
|||
Other income, net
|
|
(1.9
|
)
|
|
(14.6
|
)
|
|
(7.8
|
)
|
|||
Adjusted EBITDA
|
|
$
|
275.0
|
|
|
$
|
299.7
|
|
|
$
|
305.7
|
|
(1)
|
Primarily includes additional expense recognized from the sale of finished goods inventory, which had its cost basis increased to fair value as a result of the acquisition of Produquímica.
|
|
46
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
|
47
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
|
48
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
|
49
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
Description
|
Page
|
|
|
Reports of Independent Registered Public Accounting Firm
|
51
|
|
|
Consolidated Balance Sheets as of December 31, 2016 and 2015
|
53
|
|
|
Consolidated Statements of Operations for each of the three years in the period ended December 31, 2016
|
54
|
|
|
Consolidated Statements of Comprehensive Income for each of the three years in the period ended December 31, 2016
|
55
|
|
|
Consolidated Statements of Stockholders’ Equity for each of the three years in the period ended December 31, 2016
|
56
|
|
|
Consolidated Statements of Cash Flows for each of the three years in the period ended December 31, 2016
|
57
|
|
|
Notes to Consolidated Financial Statements
|
58
|
|
50
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
Kansas City, Missouri
|
/s/ Ernst & Young LLP
|
March 1, 2017
|
|
|
51
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
Kansas City, Missouri
|
/s/ Ernst & Young LLP
|
March 1, 2017
|
|
|
52
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
|
|
|
December 31,
|
||||||
(In millions, except share data)
|
|
2016
|
|
2015
|
||||
ASSETS
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
77.4
|
|
|
$
|
58.4
|
|
Receivables, less allowance for doubtful accounts of $9.0 in 2016 and $1.3 in 2015
|
|
320.9
|
|
|
147.8
|
|
||
Inventories
|
|
280.6
|
|
|
275.3
|
|
||
Other
|
|
36.1
|
|
|
30.8
|
|
||
Total current assets
|
|
715.0
|
|
|
512.3
|
|
||
Property, plant and equipment, net
|
|
1,092.3
|
|
|
800.7
|
|
||
Intangible assets, net
|
|
157.6
|
|
|
85.3
|
|
||
Goodwill
|
|
412.2
|
|
|
58.1
|
|
||
Investment in equity investee
|
|
24.9
|
|
|
116.4
|
|
||
Other
|
|
64.5
|
|
|
52.0
|
|
||
Total assets
|
|
$
|
2,466.5
|
|
|
$
|
1,624.8
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
|
||
Current portion of long-term debt
|
|
$
|
130.2
|
|
|
$
|
4.9
|
|
Accounts payable
|
|
100.8
|
|
|
80.7
|
|
||
Accrued expenses
|
|
105.3
|
|
|
48.9
|
|
||
Accrued salaries and wages
|
|
22.6
|
|
|
15.2
|
|
||
Income taxes payable
|
|
4.4
|
|
|
14.8
|
|
||
Accrued interest
|
|
8.7
|
|
|
6.3
|
|
||
Total current liabilities
|
|
372.0
|
|
|
170.8
|
|
||
Long-term debt, net of current portion
|
|
1,194.8
|
|
|
718.0
|
|
||
Deferred income taxes, net
|
|
130.8
|
|
|
71.3
|
|
||
Other noncurrent liabilities
|
|
51.8
|
|
|
25.0
|
|
||
Commitments and contingencies (Note 12)
|
|
|
|
|
|
|
||
Stockholders’ equity:
|
|
|
|
|
|
|
||
Common Stock:
|
|
|
|
|
|
|
||
$0.01 par value, authorized shares – 200,000,000; issued shares – 35,367,264
|
|
0.4
|
|
|
0.4
|
|
||
Additional paid-in capital
|
|
97.1
|
|
|
91.7
|
|
||
Treasury stock, at cost – 1,577,960 shares at December 31, 2016 and 1,665,731 shares at December 31, 2015
|
|
(3.0
|
)
|
|
(3.2
|
)
|
||
Retained earnings
|
|
727.5
|
|
|
659.1
|
|
||
Accumulated other comprehensive loss
|
|
(104.9
|
)
|
|
(108.3
|
)
|
||
Total stockholders’ equity
|
|
717.1
|
|
|
639.7
|
|
||
Total liabilities and stockholders’ equity
|
|
$
|
2,466.5
|
|
|
$
|
1,624.8
|
|
|
|
|
|
|
|
53
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
|
|
|
For the Year Ended December 31,
|
||||||||||
(In millions, except share data)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Sales
|
|
$
|
1,138.0
|
|
|
$
|
1,098.7
|
|
|
$
|
1,282.5
|
|
Shipping and handling cost
|
|
244.9
|
|
|
261.5
|
|
|
337.7
|
|
|||
Product cost (Note 4)
|
|
593.6
|
|
|
507.1
|
|
|
523.4
|
|
|||
Gross profit
|
|
299.5
|
|
|
330.1
|
|
|
421.4
|
|
|||
Selling, general and administrative expenses
|
|
124.9
|
|
|
108.7
|
|
|
110.4
|
|
|||
Operating earnings
|
|
174.6
|
|
|
221.4
|
|
|
311.0
|
|
|||
Other (income) expense:
|
|
|
|
|
|
|
||||||
Interest expense
|
|
34.1
|
|
|
21.5
|
|
|
20.1
|
|
|||
Net loss from equity investee
|
|
1.4
|
|
|
—
|
|
|
—
|
|
|||
Gain from remeasurement of equity method investment
|
|
(59.3
|
)
|
|
—
|
|
|
—
|
|
|||
Other, net
|
|
1.1
|
|
|
(14.6
|
)
|
|
(0.9
|
)
|
|||
Earnings before income taxes
|
|
197.3
|
|
|
214.5
|
|
|
291.8
|
|
|||
Income tax expense
|
|
34.6
|
|
|
55.3
|
|
|
73.9
|
|
|||
Net earnings
|
|
$
|
162.7
|
|
|
$
|
159.2
|
|
|
$
|
217.9
|
|
Basic net earnings per common share
|
|
$
|
4.79
|
|
|
$
|
4.70
|
|
|
$
|
6.45
|
|
Diluted net earnings per common share
|
|
$
|
4.79
|
|
|
$
|
4.69
|
|
|
$
|
6.44
|
|
Weighted-average common shares outstanding (in thousands):
|
|
|
|
|
|
|
|
|
|
|||
Basic
|
|
33,776
|
|
|
33,677
|
|
|
33,557
|
|
|||
Diluted
|
|
33,780
|
|
|
33,692
|
|
|
33,581
|
|
|||
Cash dividends per share
|
|
$
|
2.78
|
|
|
$
|
2.64
|
|
|
$
|
2.40
|
|
|
54
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
|
|
|
For the Year Ended December 31,
|
||||||||||
(In millions)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net earnings
|
|
$
|
162.7
|
|
|
$
|
159.2
|
|
|
$
|
217.9
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|||
Unrealized gain from change in pension costs, net of tax of $(0.1), $(1.2) and $(0.1) in 2016, 2015 and 2014
|
|
0.1
|
|
|
5.2
|
|
|
0.3
|
|
|||
Unrealized gain (loss) on cash flow hedges, net of tax of $(1.3), $(0.3) and $1.4 in 2016, 2015 and 2014
|
|
2.2
|
|
|
0.4
|
|
|
(2.3
|
)
|
|||
Cumulative translation adjustment
|
|
1.1
|
|
|
(98.4
|
)
|
|
(48.0
|
)
|
|||
Comprehensive income
|
|
$
|
166.1
|
|
|
$
|
66.4
|
|
|
$
|
167.9
|
|
|
55
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
|
(In millions)
|
|
Common
Stock
|
|
Additional
Paid-In
Capital
|
|
Treasury
Stock
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Total
|
||||||||||||
Balance, December 31, 2013
|
|
$
|
0.4
|
|
|
$
|
70.4
|
|
|
$
|
(3.6
|
)
|
|
$
|
452.5
|
|
|
$
|
34.5
|
|
|
$
|
554.2
|
|
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
217.9
|
|
|
(50.0
|
)
|
|
167.9
|
|
||||||
Dividends on common stock/equity awards
|
|
|
|
|
0.2
|
|
|
|
|
|
(80.9
|
)
|
|
|
|
|
(80.7
|
)
|
||||||
Shares issued for stock units
|
|
|
|
|
(0.1
|
)
|
|
0.1
|
|
|
|
|
|
|
|
|
—
|
|
||||||
Income tax deficiencies from equity awards
|
|
|
|
|
(0.2
|
)
|
|
|
|
|
|
|
|
|
|
|
(0.2
|
)
|
||||||
Stock options exercised
|
|
|
|
|
7.3
|
|
|
0.2
|
|
|
|
|
|
|
|
|
7.5
|
|
||||||
Stock-based compensation
|
|
|
|
|
4.9
|
|
|
|
|
|
|
|
|
|
|
|
4.9
|
|
||||||
Balance, December 31, 2014
|
|
$
|
0.4
|
|
|
$
|
82.5
|
|
|
$
|
(3.3
|
)
|
|
$
|
589.5
|
|
|
$
|
(15.5
|
)
|
|
$
|
653.6
|
|
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
159.2
|
|
|
(92.8
|
)
|
|
66.4
|
|
||||||
Dividends on common stock/equity awards
|
|
|
|
|
0.2
|
|
|
|
|
|
(89.6
|
)
|
|
|
|
|
(89.4
|
)
|
||||||
Income tax benefits from equity awards
|
|
|
|
|
0.5
|
|
|
|
|
|
|
|
|
|
|
|
0.5
|
|
||||||
Stock options exercised
|
|
|
|
|
2.4
|
|
|
0.1
|
|
|
|
|
|
|
|
|
2.5
|
|
||||||
Stock-based compensation
|
|
|
|
|
6.1
|
|
|
|
|
|
|
|
|
|
|
|
6.1
|
|
||||||
Balance, December 31, 2015
|
|
$
|
0.4
|
|
|
$
|
91.7
|
|
|
$
|
(3.2
|
)
|
|
$
|
659.1
|
|
|
$
|
(108.3
|
)
|
|
$
|
639.7
|
|
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
162.7
|
|
|
3.4
|
|
|
166.1
|
|
||||||
Dividends on common stock/equity awards
|
|
|
|
|
0.2
|
|
|
|
|
|
(94.3
|
)
|
|
|
|
|
(94.1
|
)
|
||||||
Shares issued for stock units
|
|
|
|
|
(0.2
|
)
|
|
0.2
|
|
|
|
|
|
|
|
|
—
|
|
||||||
Income tax deficiencies from equity awards
|
|
|
|
|
(0.2
|
)
|
|
|
|
|
|
|
|
|
|
|
(0.2
|
)
|
||||||
Stock options exercised
|
|
|
|
|
0.7
|
|
|
|
|
|
|
|
|
|
|
|
0.7
|
|
||||||
Stock-based compensation
|
|
|
|
|
4.9
|
|
|
|
|
|
|
|
|
|
|
|
4.9
|
|
||||||
Balance, December 31, 2016
|
|
$
|
0.4
|
|
|
$
|
97.1
|
|
|
$
|
(3.0
|
)
|
|
$
|
727.5
|
|
|
$
|
(104.9
|
)
|
|
$
|
717.1
|
|
|
56
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
|
57
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
|
58
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
|
59
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
|
60
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
|
61
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
|
62
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
Fair Value of Consideration Transferred (in millions)
|
October 3, 2016
|
|
|
Cash paid at closing
|
$
|
317.1
|
|
Additional cash due at closing
|
20.6
|
|
|
Fair value of contingent consideration
|
31.4
|
|
|
Fair value of 35% equity investment
|
178.7
|
|
|
Total
|
$
|
547.8
|
|
|
63
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
Recognized amounts of identifiable assets acquired and liabilities assumed:
|
Purchase Price Allocation
|
||
Cash and cash equivalents
|
$
|
73.8
|
|
Accounts receivable
|
89.4
|
|
|
Inventory
|
77.1
|
|
|
Other current assets
|
13.7
|
|
|
Property, plant and equipment
|
189.4
|
|
|
Identified intangible assets
|
81.2
|
|
|
Investment in equity method investee
|
24.5
|
|
|
Other noncurrent assets
|
6.9
|
|
|
Accounts payable
|
(27.1
|
)
|
|
Accrued expenses
|
(40.3
|
)
|
|
Current portion of long-term debt
|
(129.6
|
)
|
|
Other current liabilities
|
(14.0
|
)
|
|
Long-term debt, net of current portion
|
(62.0
|
)
|
|
Deferred income taxes, net
|
(65.2
|
)
|
|
Other noncurrent liabilities
|
(26.3
|
)
|
|
Total identifiable net assets
|
$
|
191.5
|
|
Goodwill
|
356.3
|
|
|
Total fair value of business combination
|
$
|
547.8
|
|
|
Estimated Fair Value
(in millions)
|
Weighted-Average Amortization Period
(in years)
|
||
Trade names
|
$
|
36.9
|
|
11.0
|
Developed technology
|
37.5
|
|
5.3
|
|
Customer relationships
|
6.8
|
|
13.5
|
|
Total identifiable intangible assets
|
$
|
81.2
|
|
8.6
|
|
64
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
|
Twelve Months Ended,
|
|||||
Unaudited Combined Pro Forma Results of Operations (in millions)
|
December 31, 2016
|
|
December 31, 2015
|
|
||
Revenues
|
$
|
1,381.3
|
|
$
|
1,421.3
|
|
Net income
|
108.1
|
|
128.0
|
|
•
|
Adjustments to exclude non-recurring direct incremental costs of the acquisition
|
•
|
Adjustments to expenses relating to the financing transactions described above
|
•
|
Adjustments to reflect incremental amortization and depreciation from the preliminary allocation of the purchase price
|
•
|
Adjustments to reflect certain income tax effects of the acquisition
|
•
|
Adjustments to remove net loss related to the previously held
35%
equity interest in Produquímica
|
•
|
Adjustment to remove the gain from the remeasurement of the previously held
35%
equity interest in Produquímica
|
|
|
2016
|
|
2015
|
||||
Finished goods
|
|
$
|
206.1
|
|
|
$
|
223.1
|
|
Raw materials and supplies
|
|
74.5
|
|
|
52.2
|
|
||
Total inventories
|
|
$
|
280.6
|
|
|
$
|
275.3
|
|
|
|
2016
|
|
2015
|
||||
Land, buildings and structures and leasehold improvements
|
|
$
|
480.1
|
|
|
$
|
347.3
|
|
Machinery and equipment
|
|
848.2
|
|
|
701.5
|
|
||
Office furniture and equipment
|
|
28.3
|
|
|
25.4
|
|
||
Mineral interests
|
|
168.5
|
|
|
169.6
|
|
||
Construction in progress
|
|
243.6
|
|
|
191.5
|
|
||
|
|
1,768.7
|
|
|
1,435.3
|
|
||
Less accumulated depreciation and depletion
|
|
(676.4
|
)
|
|
(634.6
|
)
|
||
Property, plant and equipment, net
|
|
$
|
1,092.3
|
|
|
$
|
800.7
|
|
|
65
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
|
Supply
Agreement
|
SOP
Production
Rights
|
Customer/
Distributor
Relationships
|
Lease
Rights
|
Trade names
|
Developed Technologies
|
Patents
|
Other
|
Total
|
||||||||||||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Gross intangible asset
|
$
|
27.0
|
|
$
|
24.3
|
|
$
|
13.8
|
|
$
|
1.7
|
|
$
|
43.6
|
|
$
|
38.9
|
|
$
|
15.4
|
|
$
|
2.2
|
|
$
|
166.9
|
|
Accumulated amortization
|
(3.2
|
)
|
(12.7
|
)
|
(3.0
|
)
|
(0.3
|
)
|
(0.8
|
)
|
(3.2
|
)
|
(3.7
|
)
|
(0.7
|
)
|
(27.6
|
)
|
|||||||||
Net intangible assets
|
$
|
23.8
|
|
$
|
11.6
|
|
$
|
10.8
|
|
$
|
1.4
|
|
$
|
42.8
|
|
$
|
35.7
|
|
$
|
11.7
|
|
$
|
1.5
|
|
$
|
139.3
|
|
|
|
Supply Agreement
|
|
SOP
Production
Rights
|
|
Customer/Distributor Relationships
|
|
Lease Rights
|
|
Patents
|
|
Other
|
|
Total
|
||||||||||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Gross intangible asset
|
|
$
|
26.1
|
|
|
$
|
24.3
|
|
|
$
|
7.0
|
|
|
$
|
1.6
|
|
|
$
|
14.9
|
|
|
$
|
3.9
|
|
|
$
|
77.8
|
|
Accumulated amortization
|
|
(2.6
|
)
|
|
(11.7
|
)
|
|
(2.5
|
)
|
|
(0.2
|
)
|
|
(2.3
|
)
|
|
(1.2
|
)
|
|
(20.5
|
)
|
|||||||
Net intangible assets
|
|
$
|
23.5
|
|
|
$
|
12.6
|
|
|
$
|
4.5
|
|
|
$
|
1.4
|
|
|
$
|
12.6
|
|
|
$
|
2.7
|
|
|
$
|
57.3
|
|
Intangible asset
|
Estimated
Lives
|
Supply agreement
|
50 years
|
SOP production rights
|
25 years
|
Patents
|
10-20 years
|
Developed technology
|
4-7 years
|
Lease rights
|
25 years
|
Customer and distributor relationships
|
10-14 years
|
Trademarks
|
10 years
|
Noncompete agreements
|
5 years
|
Trade names
|
10-11 years
|
|
66
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Current:
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
27.6
|
|
|
$
|
31.7
|
|
|
$
|
37.4
|
|
State
|
|
6.7
|
|
|
7.3
|
|
|
9.5
|
|
|||
Foreign
|
|
11.6
|
|
|
16.4
|
|
|
23.4
|
|
|||
Total current
|
|
45.9
|
|
|
55.4
|
|
|
70.3
|
|
|||
Deferred:
|
|
|
|
|
|
|
|
|
|
|||
Federal
|
|
(2.8
|
)
|
|
(0.2
|
)
|
|
(3.6
|
)
|
|||
State
|
|
(0.7
|
)
|
|
—
|
|
|
(0.9
|
)
|
|||
Foreign
|
|
(7.8
|
)
|
|
0.1
|
|
|
8.1
|
|
|||
Total deferred
|
|
(11.3
|
)
|
|
(0.1
|
)
|
|
3.6
|
|
|||
Total provision for income taxes
|
|
$
|
34.6
|
|
|
$
|
55.3
|
|
|
$
|
73.9
|
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Domestic income
|
|
$
|
123.6
|
|
|
$
|
170.6
|
|
|
$
|
184.3
|
|
Foreign income
|
|
73.7
|
|
|
43.9
|
|
|
107.5
|
|
|||
Earnings before income taxes
|
|
197.3
|
|
|
214.5
|
|
|
291.8
|
|
|||
Computed tax at the U.S. federal statutory rate of 35%
|
|
69.1
|
|
|
75.1
|
|
|
102.1
|
|
|||
Foreign income rate differential, mining, and withholding taxes, net of U.S. federal deduction
|
|
(1.7
|
)
|
|
(1.2
|
)
|
|
(9.3
|
)
|
|||
Percentage depletion in excess of basis
|
|
(8.6
|
)
|
|
(11.2
|
)
|
|
(11.8
|
)
|
|||
Other domestic tax reserves, net of reversals
|
|
—
|
|
|
(4.5
|
)
|
|
(3.9
|
)
|
|||
Domestic manufacturers deduction
|
|
(1.4
|
)
|
|
(2.4
|
)
|
|
(2.5
|
)
|
|||
State income taxes, net of federal income tax benefit
|
|
3.9
|
|
|
5.1
|
|
|
5.5
|
|
|||
Interest expense recognition differences
|
|
(5.9
|
)
|
|
(6.1
|
)
|
|
(7.1
|
)
|
|||
Nontaxable remeasurement gain
|
|
(20.2
|
)
|
|
—
|
|
|
—
|
|
|||
Other, net
|
|
(0.6
|
)
|
|
0.5
|
|
|
0.9
|
|
|||
Provision for income taxes
|
|
$
|
34.6
|
|
|
$
|
55.3
|
|
|
$
|
73.9
|
|
Effective tax rate
|
|
18
|
%
|
|
26
|
%
|
|
25
|
%
|
|
67
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
|
|
2016
|
|
2015
|
||||
Deferred tax assets:
|
|
|
|
|
|
|
||
Reluz Nordeste Indústria e Comércio Ltda net operating loss carryforwards
|
|
$
|
1.2
|
|
|
$
|
—
|
|
Other, net
|
|
0.3
|
|
|
—
|
|
||
Total deferred tax assets:
|
|
$
|
1.5
|
|
|
$
|
—
|
|
|
|
|
|
|
||||
Deferred tax assets to be netted with deferred tax liabilities:
|
|
|
|
|
||||
Net operating loss carryforwards
|
|
$
|
17.8
|
|
|
$
|
2.6
|
|
Stock-based compensation
|
|
4.0
|
|
|
4.7
|
|
||
Derivatives
|
|
8.7
|
|
|
—
|
|
||
Other, net
|
|
23.9
|
|
|
12.5
|
|
||
Total deferred tax assets before valuation allowance
|
|
54.4
|
|
|
19.8
|
|
||
Valuation allowance
|
|
(33.6
|
)
|
|
(0.9
|
)
|
||
Total deferred tax assets to be netted with deferred tax liabilities
|
|
20.8
|
|
|
18.9
|
|
||
Deferred tax liabilities:
|
|
|
|
|
|
|
||
Property, plant and equipment
|
|
101.4
|
|
|
73.0
|
|
||
Intangible asset
|
|
49.0
|
|
|
13.9
|
|
||
Other, net
|
|
1.2
|
|
|
3.3
|
|
||
Total deferred tax liabilities
|
|
151.6
|
|
|
90.2
|
|
||
Net deferred tax liabilities
|
|
$
|
130.8
|
|
|
$
|
71.3
|
|
|
68
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Unrecognized tax benefits:
|
|
|
|
|
|
|
||||||
Balance at January 1
|
|
$
|
18.3
|
|
|
$
|
21.8
|
|
|
$
|
24.6
|
|
Additions resulting from current year tax positions
|
|
0.1
|
|
|
1.6
|
|
|
1.0
|
|
|||
Additions relating to tax positions taken in prior years
|
|
0.5
|
|
|
0.8
|
|
|
1.1
|
|
|||
Additions relating to current year acquisitions
|
|
2.4
|
|
|
—
|
|
|
—
|
|
|||
Reductions due to cash payments
|
|
—
|
|
|
(0.8
|
)
|
|
(0.3
|
)
|
|||
Reductions relating to tax positions taken in prior years
|
|
—
|
|
|
(2.4
|
)
|
|
(1.2
|
)
|
|||
Reductions due to expiration of tax years
|
|
(0.6
|
)
|
|
(2.7
|
)
|
|
(3.4
|
)
|
|||
Balance at December 31
|
|
$
|
20.7
|
|
|
$
|
18.3
|
|
|
$
|
21.8
|
|
|
69
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
|
|
Plan Assets at December 31,
|
||||
Asset Category
|
|
2016
|
|
2015
|
||
Cash and cash equivalents
|
|
3
|
%
|
|
1
|
%
|
Blended funds
|
|
30
|
%
|
|
32
|
%
|
Bond funds
|
|
48
|
%
|
|
45
|
%
|
Insurance policy
|
|
19
|
%
|
|
22
|
%
|
Total
|
|
100
|
%
|
|
100
|
%
|
|
|
Market Value at
December 31,
2016
|
|
Level One
|
|
Level Two
|
|
Level Three
|
||||||||
Asset category:
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
(a)
|
|
$
|
2.0
|
|
|
$
|
2.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Blended funds
(b)
|
|
18.9
|
|
|
—
|
|
|
18.9
|
|
|
—
|
|
||||
Bond funds
(c)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Treasuries
|
|
29.5
|
|
|
—
|
|
|
29.5
|
|
|
—
|
|
||||
Insurance policy
(d)
|
|
11.9
|
|
|
—
|
|
|
—
|
|
|
11.9
|
|
||||
Total Pension Assets
|
|
$
|
62.3
|
|
|
$
|
2.0
|
|
|
$
|
48.4
|
|
|
$
|
11.9
|
|
|
70
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
|
|
Market Value at
December 31,
2015
|
|
Level One
|
|
Level Two
|
|
Level Three
|
||||||||
Asset category:
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
(a)
|
|
$
|
0.9
|
|
|
$
|
0.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Blended funds
(b)
|
|
21.1
|
|
|
—
|
|
|
21.1
|
|
|
—
|
|
||||
Bond funds
(c)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Treasuries
|
|
30.3
|
|
|
—
|
|
|
30.3
|
|
|
—
|
|
||||
Insurance policy
(d)
|
|
14.6
|
|
|
—
|
|
|
—
|
|
|
14.6
|
|
||||
Total Pension Assets
|
|
$
|
66.9
|
|
|
$
|
0.9
|
|
|
$
|
51.4
|
|
|
$
|
14.6
|
|
(a)
|
The fair value of cash and cash equivalents is its carrying value.
|
(b)
|
The Company is invested in a diversified growth fund. The diversified growth fund is valued at the last traded or official close for the underlying equities and bid or mid for the underlying fixed income securities depending on the portfolio benchmark. Where representative prices are unavailable, underlying fixed income investments are valued based on other observable market-based inputs.
|
(c)
|
This category includes investments in investment-grade fixed-income instruments and funds linked to U.K. treasury notes. The funds are valued using the bid amounts for each fund. All of the Company’s bond fund pension assets are invested in U.K.-linked treasuries as of
December 31, 2016
and December 31, 2015.
|
(d)
|
The insurance policy has been written by an insurance company with an A+ rating from Standard and Poors. The policy derives its value primarily from its underlying investments which consists of separate funds also managed by the underwriter. The policy’s holdings consist primarily of a unit trust fund, which is valued based on its underlying holdings of equities, fixed income securities, cash and derivative instruments. Those underlying investments are valued at bid price on the last business day of the period when available. Other investments use the last available authorized price of the last business day of the period. Unquoted investments are valued based upon the fund manager’s opinion of fair value based primarily on other observable market-based inputs. Open positions in derivative contracts or foreign currency transactions are included at their mark to market value. Money market instruments are valued based upon amortized cost. Term deposits are valued at their nominal value.
|
Year Ended December 31, 2016
|
|
Value of Insurance Policy
|
||
Beginning balance as of January 1, 2016
|
|
$
|
14.6
|
|
Purchase
|
|
—
|
|
|
Unrealized loss
|
|
(0.4
|
)
|
|
Currency fluctuation adjustment
|
|
(2.3
|
)
|
|
Ending balance as of December 31, 2016
|
|
$
|
11.9
|
|
|
|
2016
|
|
2015
|
|
2014
|
|||
Discount rate
|
|
3.80
|
%
|
|
3.40
|
%
|
|
4.40
|
%
|
Expected return on plan assets
|
|
4.50
|
%
|
|
4.30
|
%
|
|
5.30
|
%
|
|
71
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
Calendar Year
|
Future Expected
Benefit Payments
|
||
2017
|
$
|
2.4
|
|
2018
|
2.4
|
|
|
2019
|
2.5
|
|
|
2020
|
2.6
|
|
|
2021
|
2.7
|
|
|
2022 – 2026
|
14.8
|
|
|
|
2016
|
|
2015
|
||||
Change in benefit obligation:
|
|
|
|
|
||||
Benefit obligation as of January 1
|
|
$
|
66.9
|
|
|
$
|
76.8
|
|
Interest cost
|
|
2.3
|
|
|
2.5
|
|
||
Actuarial (gain) loss
|
|
7.3
|
|
|
(5.5
|
)
|
||
Benefits paid
|
|
(3.4
|
)
|
|
(2.9
|
)
|
||
Currency fluctuation adjustment
|
|
(11.4
|
)
|
|
(4.0
|
)
|
||
Benefit obligation as of December 31
|
|
61.7
|
|
|
66.9
|
|
||
Change in plan assets:
|
|
|
|
|
|
|
||
Fair value as of January 1
|
|
66.9
|
|
|
70.3
|
|
||
Actual return
|
|
8.8
|
|
|
1.9
|
|
||
Company contributions
|
|
1.4
|
|
|
1.5
|
|
||
Currency fluctuation adjustment
|
|
(11.4
|
)
|
|
(3.9
|
)
|
||
Benefits paid
|
|
(3.4
|
)
|
|
(2.9
|
)
|
||
Fair value of plan assets as of December 31
|
|
62.3
|
|
|
66.9
|
|
||
Overfunded status of the plan
|
|
$
|
0.6
|
|
|
$
|
—
|
|
|
72
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Interest cost on projected benefit obligation
|
|
$
|
2.3
|
|
|
$
|
2.5
|
|
|
$
|
3.2
|
|
Prior service cost
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|||
Expected return on plan assets
|
|
(2.8
|
)
|
|
(2.9
|
)
|
|
(3.5
|
)
|
|||
Net amortization
|
|
0.4
|
|
|
1.5
|
|
|
1.7
|
|
|||
Net pension expense
|
|
$
|
(0.2
|
)
|
|
$
|
1.0
|
|
|
$
|
1.3
|
|
|
73
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
|
74
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
|
|
2016
|
|
2015
|
||||
Term Loans due July 2021
|
|
$
|
845.9
|
|
|
$
|
—
|
|
Term Loan due May 2017
|
|
—
|
|
|
472.5
|
|
||
Revolving Credit Facility due August 2017
|
|
—
|
|
|
4.5
|
|
||
Revolving Credit Facility due July 2021
|
|
105.4
|
|
|
—
|
|
||
4.875% Senior Notes due July 2024
|
|
250.0
|
|
|
250.0
|
|
||
Banco Bradesco Loan due February 2017
|
|
13.2
|
|
|
—
|
|
||
Banco Votorantim Loan due April 2017
|
|
12.4
|
|
|
—
|
|
||
Banco Bradesco Loan due July 2017
|
|
4.8
|
|
|
—
|
|
||
Scotiabank Loan due August 2017
|
|
20.2
|
|
|
—
|
|
||
Banco Itaú Loan due September 2017
|
|
15.1
|
|
|
—
|
|
||
Scotiabank Loan due September 2017
|
|
15.1
|
|
|
—
|
|
||
Banco Votorantim Loan due September 2017
|
|
0.8
|
|
|
—
|
|
||
Banco Bradesco Loan due October 2017
|
|
16.8
|
|
|
—
|
|
||
Rabobank Loan due November 2017
|
|
22.6
|
|
|
—
|
|
||
Banco Itaú Loans due May 2019 to April 2020
|
|
3.1
|
|
|
—
|
|
||
Financiadora de Estudos e Projetos Loan due November 2023
|
|
7.4
|
|
|
—
|
|
||
|
|
1,332.8
|
|
|
727.0
|
|
||
Less unamortized debt issuance costs
|
|
(7.8
|
)
|
|
(4.1
|
)
|
||
Total debt
|
|
1,325.0
|
|
|
722.9
|
|
||
Less current portion
|
|
(130.2
|
)
|
|
(4.9
|
)
|
||
Long-term debt
|
|
$
|
1,194.8
|
|
|
$
|
718.0
|
|
|
Debt
Maturity
|
||
2017
|
$
|
130.2
|
|
2018
|
10.9
|
|
|
2019
|
10.7
|
|
|
2020
|
9.9
|
|
|
2021
|
918.7
|
|
|
Thereafter
|
252.4
|
|
|
Total
|
$
|
1,332.8
|
|
|
75
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
|
76
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||
Derivatives designated as hedging instruments:
|
|
Balance Sheet Location
|
|
December 31, 2016
|
|
Balance Sheet Location
|
|
December 31, 2016
|
||||
Commodity contracts
|
|
Other current assets
|
|
$
|
1.2
|
|
|
Accrued expenses
|
|
$
|
0.3
|
|
Commodity contracts
|
|
Other assets
|
|
0.1
|
|
|
Other noncurrent liabilities
|
|
0.1
|
|
||
Total derivatives designated as hedging instruments
(a)
|
|
|
|
$
|
1.3
|
|
|
|
|
$
|
0.4
|
|
|
|
|
|
|
|
|
|
|
||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
||||
Swap contracts
|
|
Other current assets
|
|
$
|
—
|
|
|
Accrued expenses
|
|
$
|
25.8
|
|
Swap contracts
|
|
Other assets
|
|
—
|
|
|
Other noncurrent liabilities
|
|
—
|
|
||
Total derivatives not designated as hedging instruments
|
|
|
|
$
|
—
|
|
|
|
|
$
|
25.8
|
|
Total Derivatives
(b)
|
|
|
|
$
|
1.3
|
|
|
|
|
$
|
26.2
|
|
(a)
|
The Company has master netting agreements with its commodity hedge counterparties and accordingly has netted in its Consolidated Balance Sheets approximately
0.4 million
of its commodity contracts that are in a payable position against its contracts in receivable positions.
|
(b)
|
The Company has commodity hedge and foreign currency swap agreements with
two
and
five
counterparties, respectively. Amounts recorded as assets for the Company’s commodity contracts are receivable from both counterparties, and amounts recorded as liabilities for the Company’s swap contracts are payable to all
five
counterparties.
|
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||
Derivatives designated as hedging instruments
(a)
:
|
|
Balance Sheet Location
|
|
December 31, 2015
|
|
Balance Sheet Location
|
|
December 31, 2015
|
||||
Commodity contracts
(b)
|
|
Other current assets
|
|
$
|
0.1
|
|
|
Accrued expenses
|
|
$
|
2.6
|
|
Commodity contracts
|
|
Other assets
|
|
—
|
|
|
Other noncurrent liabilities
|
|
0.1
|
|
||
Total derivatives designated as hedging instruments
|
|
|
|
$
|
0.1
|
|
|
|
|
$
|
2.7
|
|
(a)
|
The Company has commodity hedge agreements with
two
counterparties. Amounts recorded as liabilities for the Company’s commodity contracts are payable to both counterparties.
|
(b)
|
The Company has master netting agreements with its counterparties and accordingly has netted in its Consolidated Balance Sheets approximately
$0.1 million
of its commodity contracts that are in a receivable position against its contracts in payable positions.
|
|
|
|
|
Twelve Months Ended December 31, 2016
|
||||||
Derivatives in Cash Flow Hedging Relationships
|
|
Location of Gain
(Loss) Reclassified
from Accumulated
OCI Into Income
(Effective Portion)
|
|
Amount of (Gain)
Loss Recognized in
OCI on Derivative
(Effective Portion)
|
|
Amount of Gain
(Loss) Reclassified
from Accumulated
OCI Into Income
(Effective Portion)
|
||||
Commodity contracts
|
|
Product cost
|
|
$
|
(0.8
|
)
|
|
$
|
(2.7
|
)
|
Total
|
|
|
|
$
|
(0.8
|
)
|
|
$
|
(2.7
|
)
|
|
|
|
|
Twelve Months Ended December 31, 2015
|
||||||
Derivatives in Cash Flow Hedging Relationships
|
|
Location of Gain
(Loss) Reclassified
from Accumulated
OCI Into Income
(Effective Portion)
|
|
Amount of (Gain)
Loss Recognized in
OCI on Derivative
(Effective Portion)
|
|
Amount of Gain
(Loss) Reclassified
from Accumulated
OCI Into Income
(Effective Portion)
|
||||
Commodity contracts
|
|
Product cost
|
|
$
|
2.4
|
|
|
$
|
(3.1
|
)
|
Total
|
|
|
|
$
|
2.4
|
|
|
$
|
(3.1
|
)
|
|
77
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
|
78
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
|
Operating
Leases
|
||
2017
|
$
|
14.4
|
|
2018
|
7.7
|
|
|
2019
|
5.1
|
|
|
2020
|
3.0
|
|
|
2021
|
1.8
|
|
|
Thereafter
|
5.8
|
|
|
Total
|
$
|
37.8
|
|
|
Capital
Leases
|
||
2017
|
$
|
1.0
|
|
2018
|
0.9
|
|
|
2019
|
0.9
|
|
|
2020
|
0.9
|
|
|
2021
|
0.9
|
|
|
Thereafter
|
6.1
|
|
|
Total
|
$
|
10.7
|
|
|
79
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Fair value of options granted
|
|
$
|
10.17
|
|
|
$
|
14.78
|
|
|
$
|
15.25
|
|
Expected term (years)
|
|
4.5
|
|
|
4.8
|
|
|
4.8
|
|
|||
Expected volatility
|
|
24.4
|
%
|
|
24.9
|
%
|
|
27.8
|
%
|
|||
Dividend yield
|
|
3.3
|
%
|
|
3.1
|
%
|
|
3.4
|
%
|
|||
Risk-free interest rates
|
|
1.2
|
%
|
|
1.6
|
%
|
|
1.5
|
%
|
|
80
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
|
|
Stock Options
|
|
RSUs
|
|
PSUs
|
|||||||||||||||
|
|
Number
|
|
Weighted-average
exercise price
|
|
Number
|
|
Weighted-average
fair value
|
|
Number
|
|
Weighted-average
fair value
|
|||||||||
Outstanding at
December 31, 2013
|
|
328,364
|
|
|
$
|
72.88
|
|
|
95,718
|
|
|
$
|
76.09
|
|
|
55,149
|
|
|
$
|
80.89
|
|
Granted
|
|
95,610
|
|
|
87.18
|
|
|
20,268
|
|
|
86.74
|
|
|
27,574
|
|
|
105.77
|
|
|||
Exercised
(a)
|
|
(112,005
|
)
|
|
67.35
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Released from restriction
(a)
|
|
—
|
|
|
—
|
|
|
(15,636
|
)
|
|
86.48
|
|
|
(3,998
|
)
|
|
93.82
|
|
|||
Cancelled/Expired
|
|
(33,540
|
)
|
|
79.81
|
|
|
(11,818
|
)
|
|
76.95
|
|
|
(19,098
|
)
|
|
89.77
|
|
|||
Outstanding at
December 31, 2014
|
|
278,429
|
|
|
$
|
79.23
|
|
|
88,532
|
|
|
$
|
76.58
|
|
|
59,627
|
|
|
$
|
88.69
|
|
Granted
|
|
120,956
|
|
|
91.76
|
|
|
21,317
|
|
|
90.94
|
|
|
35,584
|
|
|
100.49
|
|
|||
Exercised
(a)
|
|
(33,906
|
)
|
|
72.53
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Released from restriction
(a)
|
|
—
|
|
|
—
|
|
|
(15,952
|
)
|
|
71.69
|
|
|
(10,454
|
)
|
|
74.49
|
|
|||
Cancelled/Expired
(b)
|
|
(12,392
|
)
|
|
84.71
|
|
|
(2,889
|
)
|
|
81.43
|
|
|
(7,392
|
)
|
|
82.46
|
|
|||
Outstanding at December 31, 2015
|
|
353,087
|
|
|
$
|
83.94
|
|
|
91,008
|
|
|
$
|
80.65
|
|
|
77,365
|
|
|
$
|
96.63
|
|
Granted
|
|
157,887
|
|
|
70.48
|
|
|
34,975
|
|
|
72.06
|
|
|
43,902
|
|
|
73.86
|
|
|||
Exercised
(a)
|
|
(11,377
|
)
|
|
62.50
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Released from restriction
(a)
|
|
—
|
|
|
—
|
|
|
(53,983
|
)
|
|
75.18
|
|
|
(10,258
|
)
|
|
78.49
|
|
|||
Cancelled/Expired
(b)
|
|
(56,842
|
)
|
|
80.95
|
|
|
(8,220
|
)
|
|
83.16
|
|
|
(21,998
|
)
|
|
88.79
|
|
|||
Outstanding at December 31, 2016
|
|
442,755
|
|
|
$
|
80.07
|
|
|
63,780
|
|
|
$
|
80.25
|
|
|
89,011
|
|
|
$
|
89.43
|
|
(a)
|
Common stock issued for exercised options, vested RSUs and vested and earned PSUs were issued from treasury shares.
|
(b)
|
The performance period for the
2014
PSU grant was completed in
2016
. The Company expects to issue
12,964
shares in March 2017 when the
2014
PSU grant vests.
|
|
81
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
|
|
Options Outstanding
|
|
Options Exercisable
|
|||||||||||||||
Range of
exercise prices
|
|
Options
outstanding
|
|
Weighted-average
remaining
contractual life
(years)
|
|
Weighted-average
exercise price
of options
outstanding
|
|
Options
exercisable
|
|
Weighted-average
remaining
contractual life
(years)
|
|
Weighted-average
exercise
price of exercisable
options
|
|||||||
$70.48 - $71.09
|
|
136,464
|
|
|
6.2
|
|
$
|
70.48
|
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
$71.10 - $77.75
|
|
97,493
|
|
|
3.0
|
|
75.53
|
|
|
77,299
|
|
|
2.9
|
|
|
75.20
|
|
||
$77.76 - $86.83
|
|
38,209
|
|
|
0.7
|
|
82.49
|
|
|
38,209
|
|
|
0.7
|
|
|
82.49
|
|
||
$86.84 - $89.47
|
|
73,044
|
|
|
4.2
|
|
87.18
|
|
|
35,896
|
|
|
4.2
|
|
|
87.18
|
|
||
$89.48 - $93.26
|
|
97,545
|
|
|
5.2
|
|
91.77
|
|
|
27,347
|
|
|
5.2
|
|
|
91.77
|
|
||
Totals
|
|
442,755
|
|
|
4.5
|
|
$
|
80.07
|
|
|
178,751
|
|
|
3.0
|
|
|
$
|
81.70
|
|
Twelve Months Ended December 31, 2016
(a)
|
|
Gains and
(Losses) on
Cash Flow
Hedges
|
|
Defined
Benefit
Pension
|
|
Foreign
Currency
|
|
Total
|
||||||||
Beginning balance
|
|
$
|
(1.6
|
)
|
|
$
|
(3.8
|
)
|
|
$
|
(102.9
|
)
|
|
$
|
(108.3
|
)
|
Other comprehensive income (loss) before reclassifications
|
|
0.5
|
|
|
(0.1
|
)
|
|
1.1
|
|
|
1.5
|
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
|
1.7
|
|
|
0.2
|
|
|
—
|
|
|
1.9
|
|
||||
Net current period other comprehensive income (loss)
|
|
2.2
|
|
|
0.1
|
|
|
1.1
|
|
|
3.4
|
|
||||
Ending balance
|
|
$
|
0.6
|
|
|
$
|
(3.7
|
)
|
|
$
|
(101.8
|
)
|
|
$
|
(104.9
|
)
|
(a)
|
With the exception of the cumulative foreign currency translation adjustment, for which no tax effect is recorded, the changes in the components of accumulated other comprehensive gain (loss) presented in the table are reflected net of applicable income taxes.
|
|
82
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
Twelve Months Ended December 31, 2015
(a)
|
|
Gains and
(Losses) on
Cash Flow
Hedges
|
|
Defined
Benefit
Pension
|
|
Foreign
Currency
|
|
Total
|
||||||||
Beginning balance
|
|
$
|
(2.0
|
)
|
|
$
|
(9.0
|
)
|
|
$
|
(4.5
|
)
|
|
$
|
(15.5
|
)
|
Other comprehensive income (loss) before reclassifications
|
|
(1.5
|
)
|
|
4.1
|
|
|
(98.4
|
)
|
|
(95.8
|
)
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
|
1.9
|
|
|
1.1
|
|
|
—
|
|
|
3.0
|
|
||||
Net current period other comprehensive income (loss)
|
|
0.4
|
|
|
5.2
|
|
|
(98.4
|
)
|
|
(92.8
|
)
|
||||
Ending balance
|
|
$
|
(1.6
|
)
|
|
$
|
(3.8
|
)
|
|
$
|
(102.9
|
)
|
|
$
|
(108.3
|
)
|
(a)
|
With the exception of the cumulative foreign currency translation adjustment, for which no tax effect is recorded, the changes in the components of accumulated other comprehensive gain (loss) presented in the table are reflected net of applicable income taxes.
|
|
|
Amount
Reclassified from AOCI
|
|
|
||
|
|
Twelve Months Ended
December 31, 2016
|
|
Line Item Impacted in the
Consolidated Statement of Operations
|
||
Gains and (losses) on cash flow hedges:
|
|
|
|
|
||
Natural gas instruments
|
|
$
|
(2.7
|
)
|
|
Product cost
|
|
|
1.0
|
|
|
Income tax expense (benefit)
|
|
|
|
(1.7
|
)
|
|
|
|
Amortization of defined benefit pension:
|
|
|
|
|
|
|
Amortization of loss
|
|
$
|
0.3
|
|
|
Product cost
|
|
|
(0.1
|
)
|
|
Income tax expense (benefit)
|
|
|
|
0.2
|
|
|
|
|
Total reclassifications, net of income taxes
|
|
$
|
(1.5
|
)
|
|
|
|
|
Amount
Reclassified from AOCI
|
|
|
||
|
|
Twelve Months Ended
December 31, 2015
|
|
Line Item Impacted in the
Consolidated Statement of Operations
|
||
Gains and (losses) on cash flow hedges:
|
|
|
|
|
|
|
Natural gas instruments
|
|
$
|
3.1
|
|
|
Product cost
|
|
|
(1.2
|
)
|
|
Income tax expense (benefit)
|
|
|
|
1.9
|
|
|
|
|
Amortization of defined benefit pension:
|
|
|
|
|
|
|
Amortization of loss
|
|
$
|
1.4
|
|
|
Product cost
|
|
|
(0.3
|
)
|
|
Income tax expense (benefit)
|
|
|
|
1.1
|
|
|
|
|
Total reclassifications, net of income taxes
|
|
$
|
3.0
|
|
|
|
|
83
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
|
|
December 31, 2016
|
|
Level One
|
|
Level Two
|
|
Level Three
|
||||||||
Asset Class:
|
|
|
|
|
|
|
|
|
||||||||
Mutual fund investments in a non-qualified savings plan
(a)
|
|
$
|
1.8
|
|
|
$
|
1.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Derivatives - natural gas instruments
|
|
0.9
|
|
|
—
|
|
|
0.9
|
|
|
—
|
|
||||
Trading securities
|
|
1.8
|
|
|
—
|
|
|
1.8
|
|
|
—
|
|
||||
Total Assets
|
|
$
|
4.5
|
|
|
$
|
1.8
|
|
|
$
|
2.7
|
|
|
$
|
—
|
|
Liability Class:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Liabilities related to non-qualified savings plan
|
|
$
|
(1.8
|
)
|
|
$
|
(1.8
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Derivatives - foreign currency swaps
|
|
(25.8
|
)
|
|
$
|
—
|
|
|
(25.8
|
)
|
|
—
|
|
|||
Total Liabilities
|
|
$
|
(27.6
|
)
|
|
$
|
(1.8
|
)
|
|
$
|
(25.8
|
)
|
|
$
|
—
|
|
(a)
|
Includes mutual fund investments of approximately
25%
in the common stock of large-cap U.S. companies,
10%
in the common stock of small to mid-cap U.S. companies,
5%
in the common stock of international companies,
5%
in bond funds,
40%
in short-term investments and
15%
in blended funds.
|
|
|
December 31, 2015
|
|
Level One
|
|
Level Two
|
|
Level Three
|
||||||||
Asset Class:
|
|
|
|
|
|
|
|
|
||||||||
Mutual fund investments in a non-qualified savings plan
(a)
|
|
$
|
1.6
|
|
|
$
|
1.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total Assets
|
|
$
|
1.6
|
|
|
$
|
1.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Liability Class:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Liabilities related to non-qualified savings plan
|
|
$
|
(1.6
|
)
|
|
$
|
(1.6
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Derivatives – natural gas instruments
|
|
(2.6
|
)
|
|
—
|
|
|
(2.6
|
)
|
|
—
|
|
||||
Total Liabilities
|
|
$
|
(4.2
|
)
|
|
$
|
(1.6
|
)
|
|
$
|
(2.6
|
)
|
|
$
|
—
|
|
(a)
|
Includes mutual fund investments of approximately
20%
in the common stock of large-cap U.S. companies,
5%
in the common stock of small to mid-cap U.S. companies,
5%
in the common stock of international companies,
5%
in bond funds,
35%
in short-term investments and
30%
in blended funds.
|
|
84
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
2016
|
|
Salt
|
|
Plant
Nutrition North America
|
|
Plant
Nutrition South America |
|
Corporate
& Other
(a)
|
|
Total
|
||||||||||
Sales to external customers
|
|
$
|
811.9
|
|
|
$
|
203.0
|
|
|
$
|
113.5
|
|
|
$
|
9.6
|
|
|
$
|
1,138.0
|
|
Intersegment sales
|
|
—
|
|
|
5.2
|
|
|
—
|
|
|
(5.2
|
)
|
|
—
|
|
|||||
Shipping and handling cost
|
|
214.5
|
|
|
25.0
|
|
|
5.4
|
|
|
—
|
|
|
244.9
|
|
|||||
Operating earnings (loss)
|
|
200.6
|
|
|
21.1
|
|
|
7.4
|
|
|
(54.5
|
)
|
|
174.6
|
|
|||||
Depreciation, depletion and amortization
|
|
46.7
|
|
|
33.4
|
|
|
5.0
|
|
|
5.2
|
|
|
90.3
|
|
|||||
Total assets
|
|
980.3
|
|
|
592.3
|
|
|
844.9
|
|
|
49.0
|
|
|
2,466.5
|
|
|||||
Capital expenditures
|
|
103.4
|
|
|
63.6
|
|
|
2.1
|
|
|
13.1
|
|
|
182.2
|
|
2015
|
|
Salt
|
|
Plant
Nutrition North America
|
|
Plant
Nutrition South America |
|
Corporate
& Other
(a)
|
|
Total
|
||||||||||
Sales to external customers
|
|
$
|
849.0
|
|
|
$
|
238.4
|
|
|
$
|
—
|
|
|
$
|
11.3
|
|
|
$
|
1,098.7
|
|
Intersegment sales
|
|
0.1
|
|
|
7.7
|
|
|
—
|
|
|
(7.8
|
)
|
|
—
|
|
|||||
Shipping and handling cost
|
|
239.1
|
|
|
22.4
|
|
|
—
|
|
|
—
|
|
|
261.5
|
|
|||||
Operating earnings (loss)
|
|
215.2
|
|
|
57.9
|
|
|
—
|
|
|
(51.7
|
)
|
|
221.4
|
|
|||||
Depreciation, depletion and amortization
|
|
43.9
|
|
|
29.8
|
|
|
—
|
|
|
4.6
|
|
|
78.3
|
|
|||||
Total assets
(b)
|
|
896.5
|
|
|
679.7
|
|
|
—
|
|
|
48.6
|
|
|
1,624.8
|
|
|||||
Capital expenditures
|
|
106.5
|
|
|
92.8
|
|
|
—
|
|
|
18.3
|
|
|
217.6
|
|
2014
|
|
Salt
|
|
Plant
Nutrition North America
|
|
Plant
Nutrition South America |
|
Corporate
& Other
(a)
|
|
Total
|
||||||||||
Sales to external customers
|
|
$
|
1,002.6
|
|
|
$
|
270.2
|
|
|
$
|
—
|
|
|
$
|
9.7
|
|
|
$
|
1,282.5
|
|
Intersegment sales
|
|
0.9
|
|
|
7.1
|
|
|
—
|
|
|
(8.0
|
)
|
|
—
|
|
|||||
Shipping and handling cost
|
|
309.3
|
|
|
28.4
|
|
|
—
|
|
|
—
|
|
|
337.7
|
|
|||||
Operating earnings (loss)
(c)
|
|
291.4
|
|
|
74.8
|
|
|
—
|
|
|
(55.2
|
)
|
|
311.0
|
|
|||||
Depreciation, depletion and amortization
|
|
44.8
|
|
|
27.3
|
|
|
—
|
|
|
5.9
|
|
|
78.0
|
|
|||||
Total assets
|
|
1,045.2
|
|
|
536.2
|
|
|
—
|
|
|
50.8
|
|
|
1,632.2
|
|
|||||
Capital expenditures
|
|
67.9
|
|
|
42.1
|
|
|
—
|
|
|
15.2
|
|
|
125.2
|
|
(a)
|
Corporate and Other includes corporate entities, records management operations and other incidental operations and eliminations. Operating earnings (loss) for corporate and other includes indirect corporate overhead including costs for general corporate governance and oversight, as well as costs for the human resources, information technology and finance functions. In 2014, the operating loss includes costs of approximately
$4.2 million
to consolidate its records management locations by closing
one
location in London, England.
|
(b)
|
In 2015, the Company’s equity investment in Produquímica is included in total assets for its Plant Nutrition North America segment. In addition, the Company’s assets held for sale have been presented in corporate and other. Total assets in 2015 for both operating segments were negatively impacted by the impact of translating the Company’s foreign-denominated assets into U.S. dollars.
|
(c)
|
In 2014, the Company recorded a gain of
$82.3 million
in the Salt segment and
$1.0 million
in Corporate and Other resulting from an insurance settlement related to a tornado at its Goderich, Ontario facilities in 2011.
|
|
85
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
Sales
|
|
2016
|
|
2015
|
|
2014
|
||||||
United States
(a)
|
|
$
|
762.6
|
|
|
$
|
834.6
|
|
|
$
|
975.2
|
|
Canada
|
|
212.5
|
|
|
198.4
|
|
|
260.0
|
|
|||
Brazil
|
|
111.7
|
|
|
—
|
|
|
—
|
|
|||
United Kingdom
|
|
40.6
|
|
|
56.8
|
|
|
41.2
|
|
|||
Other
|
|
10.6
|
|
|
8.9
|
|
|
6.1
|
|
|||
Total sales
|
|
$
|
1,138.0
|
|
|
$
|
1,098.7
|
|
|
$
|
1,282.5
|
|
(a)
|
United States sales exclude product sold to foreign customers at U.S. ports.
|
Long-Lived Assets
|
|
2016
|
|
2015
|
||||
United States
|
|
$
|
568.5
|
|
|
$
|
498.0
|
|
Canada
|
|
461.5
|
|
|
394.3
|
|
||
United Kingdom
|
|
66.8
|
|
|
95.7
|
|
||
Brazil
|
|
645.8
|
|
|
116.4
|
|
||
Other
|
|
6.5
|
|
|
6.5
|
|
||
Total long-lived assets
|
|
$
|
1,749.1
|
|
|
$
|
1,110.9
|
|
Year ended December 31,
|
|
2016
|
|
2015
|
|
2014
|
||||||
Numerator:
|
|
|
|
|
|
|
||||||
Net earnings
|
|
$
|
162.7
|
|
|
$
|
159.2
|
|
|
$
|
217.9
|
|
Less: Net earnings allocated to participating securities
(a)
|
|
(0.8
|
)
|
|
(1.0
|
)
|
|
(1.5
|
)
|
|||
Net earnings available to common shareholders
|
|
$
|
161.9
|
|
|
$
|
158.2
|
|
|
$
|
216.4
|
|
Denominator (in thousands):
|
|
|
|
|
|
|
|
|
|
|||
Weighted average common shares outstanding, shares for basic earnings per share
(b)
|
|
33,776
|
|
|
33,677
|
|
|
33,557
|
|
|||
Weighted average equity awards outstanding
|
|
4
|
|
|
15
|
|
|
24
|
|
|||
Shares for diluted earnings per share
|
|
33,780
|
|
|
33,692
|
|
|
33,581
|
|
|||
Net earnings per common share, basic
|
|
$
|
4.79
|
|
|
$
|
4.70
|
|
|
$
|
6.45
|
|
Net earnings per common share, diluted
|
|
$
|
4.79
|
|
|
$
|
4.69
|
|
|
$
|
6.44
|
|
(a)
|
Participating securities include PSUs and RSUs that receive non-forfeitable dividends. Net earnings were allocated to participating securities of
164,000
,
198,000
and
227,000
for
2016
,
2015
and
2014
, respectively.
|
(b)
|
For the calculation of diluted earnings per share, the Company uses the more dilutive of either the treasury stock method or the two-class method to determine the weighted average number of outstanding common shares. In addition, the Company had
509,000
,
432,000
and
381,000
weighted options outstanding for
2016
,
2015
and
2014
, respectively, which were anti-dilutive and therefore not included in the diluted earnings per share calculation.
|
|
86
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
Quarter
|
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
||||||||
2016
|
|
|
|
|
|
|
|
|
||||||||
Sales
|
|
$
|
345.7
|
|
|
$
|
169.5
|
|
|
$
|
179.6
|
|
|
$
|
443.2
|
|
Gross profit
|
|
102.6
|
|
|
41.3
|
|
|
45.2
|
|
|
110.4
|
|
||||
Net earnings
(a)
|
|
49.7
|
|
|
6.3
|
|
|
9.1
|
|
|
97.6
|
|
||||
Net earnings per share, basic
(a)
|
|
1.47
|
|
|
0.18
|
|
|
0.27
|
|
|
2.88
|
|
||||
Net earnings per share, diluted
(a)
|
|
1.46
|
|
|
0.18
|
|
|
0.27
|
|
|
2.87
|
|
||||
Basic weighted-average shares outstanding (in thousands)
|
|
33,746
|
|
|
33,784
|
|
|
33,786
|
|
|
33,788
|
|
||||
Diluted weighted-average shares outstanding (in thousands)
|
|
33,748
|
|
|
33,787
|
|
|
33,789
|
|
|
33,793
|
|
||||
2015
|
|
|
|
|
|
|
|
|
||||||||
Sales
|
|
$
|
393.0
|
|
|
$
|
183.7
|
|
|
$
|
232.7
|
|
|
$
|
289.3
|
|
Gross profit
|
|
113.2
|
|
|
50.6
|
|
|
68.0
|
|
|
98.3
|
|
||||
Net earnings
|
|
60.6
|
|
|
13.2
|
|
|
27.0
|
|
|
58.4
|
|
||||
Net earnings per share, basic
|
|
1.79
|
|
|
0.39
|
|
|
0.80
|
|
|
1.72
|
|
||||
Net earnings per share, diluted
|
|
1.79
|
|
|
0.39
|
|
|
0.80
|
|
|
1.72
|
|
||||
Basic weighted-average shares outstanding (in thousands)
|
|
33,626
|
|
|
33,682
|
|
|
33,696
|
|
|
33,701
|
|
||||
Diluted weighted-average shares outstanding (in thousands)
|
|
33,649
|
|
|
33,701
|
|
|
33,708
|
|
|
33,714
|
|
(a)
|
In the fourth quarter of 2016, the Company recognized a gain of
$59.3 million
on the remeasurement of its equity investment as part of the acquisition of the remaining
65%
of Produquímica’s equity.
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
|
87
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
|
88
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND OTHER TRANSACTIONS AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
|
89
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
ITEM 15.
|
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
|
Description
|
Page
|
|
|
Management’s Report on Internal Controls Over Financial Reporting
|
88
|
|
|
Reports of Independent Registered Public Accounting Firm
|
51
|
|
|
Consolidated Balance Sheets as of December 31, 2016 and 2015
|
53
|
|
|
Consolidated Statements of Operations for each of the three years in the period ended December 31, 2016
|
54
|
|
|
Consolidated Statements of Comprehensive Income for each of the three years in the period ended December 31, 2016
|
55
|
|
|
Consolidated Statements of Stockholders’ Equity for each of the three years in the period ended December 31, 2016
|
56
|
|
|
Consolidated Statements of Cash Flows for each of the three years in the period ended December 31, 2016
|
57
|
|
|
Notes to Consolidated Financial Statements
|
58
|
|
|
Schedule II – Valuation Reserves
|
90
|
|
Description (in millions)
|
|
Balance at
the
Beginning
of the Year
|
|
Additions
(Deductions)
Charged to
Expense
|
|
Deductions
(1)
|
|
Balance at
the End of
the Year
|
||||||||
Deducted from Receivables — Allowance for Doubtful Accounts
|
|
|
|
|
|
|
|
|
||||||||
2016
(2)
|
|
$
|
1.3
|
|
|
$
|
8.0
|
|
|
$
|
(0.3
|
)
|
|
$
|
9.0
|
|
2015
|
|
1.4
|
|
|
0.6
|
|
|
(0.7
|
)
|
|
1.3
|
|
||||
2014
|
|
1.6
|
|
|
0.3
|
|
|
(0.5
|
)
|
|
1.4
|
|
||||
Deducted from Deferred Income Taxes — Valuation Allowance
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
2016
(3)
|
|
$
|
0.9
|
|
|
$
|
34.3
|
|
|
$
|
(1.6
|
)
|
|
$
|
33.6
|
|
2015
|
|
1.0
|
|
|
0.1
|
|
|
(0.2
|
)
|
|
0.9
|
|
||||
2014
|
|
1.1
|
|
|
0.2
|
|
|
(0.3
|
)
|
|
1.0
|
|
(1)
|
Deduction for purposes for which reserve was created.
|
(2)
|
The 2016 additions include
$7.4 million
related to the acquisition of Produquímica. This amount was not charged to expense.
|
(3)
|
The 2016 additions relate to the acquisition of Produquímica. This amount was not charged to expense.
|
|
90
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
Exhibit
No.
|
Description of Exhibit
|
2.1
|
Agreement and Plan of Merger, dated October 13, 2001, among IMC Global Inc., Compass Minerals International, Inc. (formerly known as Salt Holdings Corporation), YBR Holdings LLC and YBR Acquisition Corp (incorporated herein by reference to Exhibit 2.1 to Compass Minerals’ Registration Statement on Form S-4, File No. 333-104603).
|
2.2
|
Amendment No. 1 to Agreement and Plan of Merger, dated November 28, 2001, among IMC Global Inc., Compass Minerals International, Inc. (formerly known as Salt Holdings Corporation), YBR Holdings LLC and YBR Acquisition Corp (incorporated herein by reference to Exhibit 2.2 to Compass Minerals Registration Statement on Form S-4, File No. 333-104603).
|
2.3
|
Subscription Agreement and Other Covenants, dated December 16, 2015, among Compass Minerals do Brasil Ltda., certain shareholders of Produquímica Indústria e Comércio S.A. and Produquímica Indústria e Comércio S.A.(incorporated by reference to Exhibit 2.3 to Compass Minerals International, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2015).
|
2.4
|
Second Amendment, dated August 12, 2016, to the Subscription Agreement and Other Covenants, dated December 16, 2015, among Compass Minerals do Brasil Ltda., certain shareholders of Produquímica Indústria e Comércio S.A. and Produquímica Indústria e Comércio S.A. (incorporated herein by reference to Exhibit 2.1 to Compass Minerals International Inc.’s Current Report on Form 8-K filed on August 15, 2016).
|
2.5
|
Share Purchase and Sale Agreement, dated December 16, 2015, among Compass Minerals do Brasil Ltda., certain shareholders of Produquímica Indústria e Comércio S.A. and Produquímica Indústria e Comércio S.A. (incorporated by reference to Exhibit 2.3 to Compass Minerals International, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2015).
|
3.1
|
Amended and Restated Certificate of Incorporation of Compass Minerals International, Inc. (incorporated herein by reference to Exhibit 3.1 to Compass Minerals International, Inc.’s Registration Statement on Form S-4, File No. 333-111953).
|
3.2
|
By-laws of Compass Minerals International, Inc., amended and restated as of December 22, 2014 (incorporated herein by reference to Exhibit 3.2 to Compass Minerals International, Inc.’s Current Report on Form 8-K filed on December 23, 2014).
|
4.1
|
Indenture, dated as of June 23, 2014, by and among Compass Minerals International, Inc., the Guarantors named therein, and U.S. National Bank Association, as trustee, relating to the 4.875% Senior Notes due 2024 (incorporated herein by reference to Exhibit 4.1 to Compass Minerals International, Inc.’s Current Report on Form 8-K filed on June 26, 2014).
|
4.2
|
Form of 4.875% Senior Notes due 2024 (included as Exhibit 1 to Exhibit 4.1).
|
10.1
|
Salt Mining Lease, dated November 9, 2001, between the Province of Ontario, as lessor, and Sifto Canada Inc. as lessee (incorporated herein by reference to Exhibit 10.1 to Compass Minerals’ Registration Statement on Form S-4, File No. 333-104603).
|
10.2
|
Amended and Restated Salt and Surface Lease, effective January 1, 2014, between Island Partnership, L.L.C., JMB Cote Blanche L.L.C., CFB, LLC and Carey Salt Company (incorporated herein by reference to Exhibit 10.7 to Compass Minerals International, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014).
|
10.3
|
Royalty Agreement, dated September 1, 1962, between Great Salt Lake Minerals Corporation and the Utah State Land Board (incorporated herein by reference to Exhibit 10.3 to Compass Minerals’ Registration Statement on Form S-4, File No. 333-104603).
|
10.4
|
Share Purchase Agreement, dated March 19, 2014, between Compass Minerals Manitoba Inc., Compass Minerals International, Inc. and the shareholders of Wolf Trax Inc. (incorporated herein by reference to Exhibit 10.8 to Compass Minerals International, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014).
|
10.5
|
Credit Agreement, dated April 20, 2016, among Compass Minerals International, Inc., Compass Minerals Canada Corp., Compass Minerals UK Limited, the lenders party thereto from time to time and JPMorgan Chase Bank, N.A., as administrative agent (incorporated by reference to Exhibit 10.1 to Compass Minerals International, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016).
|
10.6
|
Incremental Amendment, dated September 28, 2016, to the Credit Agreement, dated April 20, 2016, among Compass Minerals International, Inc., Compass Minerals Canada Corp. and Compass Minerals UK Limited, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders party thereto (incorporated by reference to Exhibit 10.1 to Compass Minerals International, Inc.’s Current Report on Form 8-K dated September 28, 2016).
|
10.7
|
Certificate of Designation for the Series A Junior Participating Preferred Stock, par value $0.01 per share (incorporated herein by reference to Exhibit 4.1 to Compass Minerals International, Inc.’s Current Report on Form 8-K filed on December 19, 2012).
|
10.8+
|
Compass Minerals International, Inc. Directors’ Deferred Compensation Plan, Amended and Restated Effective as of January 1, 2005 (incorporated herein by reference to Exhibit 10.26 to Compass Minerals International, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2006).
|
|
91
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
10.9+
|
First Amendment to the Compass Minerals International, Inc. Directors’ Deferred Compensation Plan effective January 1, 2007 (incorporated herein by reference to Exhibit 10.28 to Compass Minerals International, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2006).
|
10.10+
|
Second Amendment to the Compass Minerals International, Inc. Directors’ Deferred Compensation Plan (incorporated herein by reference to Exhibit 10.4 to Compass Minerals International, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2009).
|
10.11+
|
Amendment to 2012 and 2013 Independent Director Deferred Stock Award Agreement for Eric Ford (incorporated herein by reference to Exhibit 10.15 to Compass Minerals International, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2013).
|
10.12+
|
Form of 2012 Independent Director Deferred Stock Award Agreement (incorporated herein by reference to Exhibit 10.3 to Compass Minerals International, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012).
|
10.13+
|
Form of 2014 Foreign Director Deferred Stock Award Agreement (incorporated herein by reference to Exhibit 10.6 to Compass Minerals International, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014).
|
10.14+
|
2015 Form of Independent Director Deferred Award Agreement (incorporated by reference to Exhibit 10.2 to Compass
Minerals International, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015).
|
10.15+
|
2015 Form of Independent Foreign Director Deferred Award Agreement (incorporated by reference to Exhibit 10.3 to
Compass Minerals International, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015).
|
10.16+
|
Non-Employee Director Compensation Policy, effective January 1, 2017 (incorporated by reference to Exhibit 10.2 to Compass Minerals International, Inc.’s Current Report on Form 8-K filed on February 2, 2017).
|
10.17+
|
Summary of Non-Employee Director Compensation, as of January 1, 2017 (incorporated by reference to Exhibit 10.1 to Compass Minerals International, Inc.’s Current Report on Form 8-K filed on February 2, 2017).
|
10.18+
|
Form of Indemnification Agreement for Directors of Compass Minerals International, Inc. (incorporated by reference to Exhibit 10.1 to Compass Minerals International, Inc.’s Current Report on Form 8-K filed on March 26, 2009).
|
10.19+
|
Compass Minerals International, Inc. 2005 Incentive Award Plan as approved by stockholders on August 4, 2005 (incorporated herein by reference to Exhibit 10.15 to Compass Minerals International, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2005).
|
10.20+
|
First Amendment to the Compass Minerals International, Inc. 2005 Incentive Award Plan (incorporated herein by reference to Exhibit 10.5 to Compass Minerals International, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2007).
|
10.21+
|
Second Amendment to the Compass Minerals International, Inc. 2005 Incentive Award Plan (incorporated herein by reference to Exhibit 10.6 to Compass Minerals International, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2009).
|
10.22+
|
Third Amendment to the Compass Minerals International, Inc. 2005 Incentive Award Plan (incorporated herein by reference to Exhibit 10.22 to Compass Minerals International, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2011).
|
10.23+
|
Fourth Amendment to the Compass Minerals International, Inc. 2005 Incentive Award Plan (incorporated herein by reference to Exhibit 10.23 to Compass Minerals International, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2011).
|
10.24+
|
Compass Minerals International, Inc. 2015 Incentive Award Plan (incorporated by reference to Exhibit 99.1 to
Compass Minerals International, Inc.’s Registration Statement on Form S-8, File No. 333-203922).
|
10.25+
|
2010 and 2011 Form of Non-Qualified Stock Option Award Agreement (incorporated herein by reference to Exhibit 10.1 to Compass Minerals International, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2010).
|
10.26+
|
2012 Form of Non-Qualified Stock Option Award Agreement (incorporated herein by reference to Exhibit 10.4 to Compass Minerals International, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012).
|
10.27+
|
2013 Form of Non-Qualified Stock Option Award Agreement (incorporated herein by reference to Exhibit 10.5 to Compass Minerals International, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2013).
|
10.28+
|
2014 Form of Non-Qualified Stock Option Award Agreement (incorporated herein by reference to Exhibit 10.4 to Compass Minerals International, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014).
|
10.29+
|
2015 Form of Non-Qualified Stock Option Award Agreement (incorporated herein by reference to Exhibit 10.5 to Compass Minerals International, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015).
|
10.30+
|
2016 Form of Non-Qualified Stock Option Award Agreement (incorporated by reference to Exhibit 10.4 to Compass Minerals International, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016).
|
10.31+
|
2014 Form of Performance-Based Restricted Stock Unit Award Agreement (incorporated herein by reference to Exhibit 10.5 to Compass Minerals International Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014).
|
10.32+
|
2015 Form of Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.6 to Compass Minerals International, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015).
|
|
92
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
10.33+
|
2016 Form of Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.5 to Compass Minerals International, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016).
|
10.34+
|
2014 Form of Three-Year Performance Stock Unit Award Agreement (incorporated herein by reference to Exhibit 10.3 to Compass Minerals International Inc.’s Quarterly Report for the quarter ended March 31, 2014).
|
10.35+
|
2015 Form of Three-Year Performance Stock Unit Award Agreement (ROIC) (incorporated by reference to Exhibit 10.3 to Compass Minerals International, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015).
|
10.36+
|
2015 Form of Three-Year Performance Stock Unit Award Agreement (rTSR) (incorporated by reference to Exhibit 10.4 to Compass Minerals International, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015).
|
10.37+
|
2016 Form of Three-Year Performance Stock Unit Award Agreement (ROIC) (incorporated by reference to Exhibit 10.2 to Compass Minerals International, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016).
|
10.38+
|
2016 Form of Three-Year Performance Stock Unit Award Agreement (rTSR) (incorporated by reference to Exhibit 10.3 to Compass Minerals International, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016).
|
10.39+
|
2015 Rules, Policies and Procedures for Equity Awards Granted to Employees (incorporated by reference to Exhibit
10.7 to Compass Minerals International, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015).
|
10.40+
|
2016 Rules, Policies and Procedures for Equity Awards Granted to Employees (incorporated by reference to Exhibit 10.6 to Compass Minerals International, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016)
|
10.41+
|
Compass Minerals International, Inc. Restoration Plan (incorporated herein by reference to Exhibit 10.2 to Compass Minerals International, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2007).
|
10.42+
|
First Amendment to the Compass Minerals International, Inc. Restoration Plan dated as of December 5, 2007 (incorporated herein by reference to Exhibit 10.27 to Compass Minerals International, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2007).
|
10.43+
|
Second Amendment to the Compass Minerals International, Inc. Restoration Plan (incorporated herein by reference to Exhibit 10.5 to Compass Minerals International, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2009).
|
10.44*+
|
2013 Form of Change in Control Severance Agreement.
|
10.45*+
|
2017 Form of Restrictive Covenant Agreement.
|
10.46+
|
Employment Agreement, effective January 17, 2013, between Compass Minerals International, Inc. and Francis J. Malecha (incorporated herein by reference to Exhibit 10.1 to Compass Minerals International, Inc.’s Current Report on Form 8-K filed on January 10, 2013).
|
10.47+
|
Change in Control Severance Agreement, dated January 17, 2013, between Compass Minerals International, Inc. and Francis J. Malecha (incorporated herein by reference to Exhibit 10.40 to Compass Minerals International, Inc.’s Annual Report on Form 10-K for the annual period ended December 31, 2012).
|
10.48*+
|
Restrictive Covenant Agreement, dated January 5, 2013, between Compass Minerals International, Inc. and Francis J. Malecha.
|
10.49+
|
Separation Letter Agreement and Final Release and Waiver of Claims, dated February 17, 2016, between Compass Minerals International, Inc. and Keith E. Espelien (incorporated by reference to Exhibit 10.1 to Compass Minerals International, Inc.’s Current Report on Form 8-K filed on February 23, 2016).
|
12.1*
|
Statement of Computation of Ratio of Earnings to Fixed Charges.
|
14.1
|
Code of Ethics and Business Conduct, adopted by Compass Minerals International, Inc. on May 4, 2016 (incorporated by reference to Exhibit 14.1 to the Company’s Current Report on Form 8-K filed on May 5, 2016).
|
21.1*
|
Subsidiaries of the Registrant.
|
23.1*
|
Consent of Ernst & Young LLP.
|
24.1*
|
Power of Attorney.
|
31.1*
|
Section 302 Certifications of Francis J. Malecha, President and Chief Executive Officer.
|
31.2*
|
Section 302 Certifications of John D. Craft, Interim Chief Financial Officer.
|
32**
|
Certification Pursuant to 18 U.S.C.§1350 of Francis J. Malecha, President and Chief Executive Officer and John D. Craft, Interim Chief Financial Officer.
|
95*
|
Mine Safety Disclosures.
|
101**
|
The following financial statements from the Compass Minerals International, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2016, formatted in Extensive Business Reporting Language (XBRL): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income (iv) Consolidated Statement of Stockholders’ Equity, (v) Consolidated Statements of Cash Flows, and (vi) the Notes to the Consolidated Financial Statements.
|
*
|
Filed herewith.
|
**
|
Furnished herewith.
|
+
|
Management contracts and compensatory plans or arrangements.
|
|
93
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2016 FORM 10-K
|
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
|
|
|
|
|
Date: March 1, 2017
|
By:
|
/s/ John D. Craft
|
|
|
|
John D. Craft
|
|
|
|
Interim Chief Financial Officer
|
|
|
Signature
|
|
Capacity
|
|
|
|
|
|
/s/ Francis J. Malecha
|
|
President, Chief Executive Officer
|
|
Francis J. Malecha
|
|
and Director (Principal Executive Officer)
|
|
|
|
|
|
/s/ John D. Craft
|
|
Interim Chief Financial Officer
|
|
John D. Craft
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
|
|
/s/ David J. D’Antoni
|
|
Director
|
|
David J. D’Antoni
|
|
|
|
|
|
|
|
/s/ Valdemar L. Fischer
|
|
Director
|
|
Valdemar L. Fischer
|
|
|
|
|
|
|
|
/s/ Eric Ford
|
|
Director
|
|
Eric Ford
|
|
|
|
|
|
|
|
/s/ Richard S. Grant
|
|
Director
|
|
Richard S. Grant
|
|
|
|
|
|
|
|
/s/ Allan R. Rothwell
|
|
Director
|
|
Allan R. Rothwell
|
|
|
|
|
|
|
|
/s/ Lori A. Walker
|
|
Director
|
|
Lori A. Walker
|
|
|
|
|
|
|
|
/s/ Paul S. Williams
|
|
Director
|
|
Paul S. Williams
|
|
|
|
|
|
|
|
/s/ Amy J. Yoder
|
|
Director
|
|
Amy J. Yoder
|
|
|
|
94
|
|
If to Executive:
|
|
|
|
|
|
|
|
|
|
|
|
If to the Company:
|
Compass Minerals International, Inc.
|
|
|
9900 W 109th Street, Suite 100
|
|
|
Overland Park, KS 66210
|
|
|
Attention:
|
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
Name:
|
|
|
|
Title:
|
|
|
|
|
|
|
|
|
|
|
|
[NAME OF EXECUTIVE]
|
|
(B)
|
not to directly or indirectly disclose, publish, communicate, or make available Confidential Information, or allow it to be disclosed, published, communicated, or made available, in whole or part, to any entity or person whatsoever (including other employees of Company not having a need to know and authority to know and use the Confidential Information in connection with the Business and, in any event, not to anyone outside of the direct employ of Company except as required in the performance of any of Employee’s authorized employment duties to Company or with the prior consent of an authorized officer acting on behalf of Company in each instance (and then, such disclosure shall be made only within the limits and to the extent of such duties or consent); and
|
(C)
|
not to access or use any Confidential Information, and not to copy any documents, records, files, media, or other resources containing any Confidential Information, or remove any such documents, records, files, media, or other resources from the premises or control of Company except as required in the performance any of the Employee’s authorized employment duties to Company or with the prior consent of an authorized officer acting on behalf of Company in each instance (and then, such disclosure shall be made only within the limits and to the extent of such duties or consent). Employee understands and acknowledges that Employee’s obligations under this Agreement regarding any particular Confidential Information begin immediately and shall continue during and after Employee’s employment by Company until the Confidential Information has become public knowledge other than as a result of Employee’s breach of this Agreement or a breach by those acting in concert with Employee or on Employee’s behalf.
|
(2)
|
Permitted disclosures. Nothing in this Agreement shall be construed to:
|
(A)
|
prevent disclosure of Confidential Information as may be required by applicable law or regulation, or pursuant to the valid order of a court of competent jurisdiction or an authorized government agency, provided
|
(B)
|
prohibit or restrict Employee (or Employee’s attorney) from filing a charge or complaint with the SEC, the Equal Employment Opportunity Commission (“EEOC”) or a comparable state agency, the Occupational Safety and Health Administration (“OSHA”), or any other self-regulatory organization or any other federal or state regulatory authority (“Government Agencies”). Employee further understands that this Agreement does not limit the Employee’s ability to communicate with any securities regulatory agency or authority/Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any securities regulatory agency or authority/Government Agency in connection with reporting a possible securities or other law violation without notice to Company;
|
(C)
|
limit Employee’s right to receive an award for information provided to any Government Agencies/to the SEC staff or any other securities regulatory agency or authority; or
|
(D)
|
prohibits Employee from making other disclosures that are protected under the whistleblower provisions of law. Employee does not need prior authorization of Company to make any such reports or disclosures and is not required to notify Company that he/she has made such reports or disclosures.
|
(3)
|
Duration of Confidentiality Obligations. Employee understands and acknowledges that Employee’s obligations under this Agreement with regard to any particular Confidential Information shall commence immediately upon Employee first having access to such Confidential Information (whether before or after Employee begins employment by Company) and shall continue during and after Employee’s employment by Company until such time as such Confidential Information has become public knowledge other than as a result of Employee’s breach of this Agreement or breach by those acting in concert with the Employee or on the Employee’s behalf.
|
(1)
|
Employee will not be held criminally or civilly liable under any federal or state trade secret law for any disclosure of a trade secret that:
|
(i)
|
in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and
|
(ii)
|
solely for the purpose of reporting or investigating a suspected violation of law; or
|
(B)
|
is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding.
|
(2)
|
If Employee files a lawsuit for retaliation by Company for reporting a suspected violation of law, Employee may disclose Company’s trade secrets to Employee’s attorney and use the trade secret information in the court proceeding if Employee:
|
1.
|
Non-Solicitation Agreement.
|
2.
|
Non-Competition Agreement
.
|
3.
|
General
Provisions
.
|
January 2, 2013
|
|
/s/ Francis J. Malecha
|
|
|
Date
|
|
[Employee]
|
|
|
|
|
|
|
|
|
|
Compass Minerals International, Inc.
|
|
|
|
|
|
|
|
January 5, 2013
|
|
By:
|
/s/ Bradley J. Bell
|
|
Date
|
|
Title: Director & Chair, Compensation Committee
|
|
|
|
|
|
|
|
||||||
Compass Minerals International, Inc.
|
|||||||||||
Computation of Ratios of Earnings to Fixed Charges
|
|||||||||||
(in millions)
|
|||||||||||
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
Year ended December 31,
|
2016
|
|
|
2015
|
|
|
2014
|
|
|||
Earnings:
|
|
|
|
|
|
||||||
Net earnings before income taxes
|
$
|
197.3
|
|
|
$
|
214.5
|
|
|
$
|
291.8
|
|
Less: capitalized interest
|
(2.9
|
)
|
|
(1.5
|
)
|
|
(0.3
|
)
|
|||
Plus: fixed charges
|
41.1
|
|
|
26.5
|
|
|
23.3
|
|
|||
|
$
|
235.5
|
|
|
$
|
239.5
|
|
|
$
|
314.8
|
|
|
|
|
|
|
|
||||||
Fixed Charges:
|
|
|
|
|
|
||||||
Interest charges
|
$
|
34.1
|
|
|
$
|
21.5
|
|
|
$
|
20.1
|
|
Capitalized interest
|
2.9
|
|
|
1.5
|
|
|
0.3
|
|
|||
Plus interest factor in operating rent expense
|
4.1
|
|
|
3.5
|
|
|
2.9
|
|
|||
|
$
|
41.1
|
|
|
$
|
26.5
|
|
|
$
|
23.3
|
|
|
|
|
|
|
|
||||||
Ratio of earnings to fixed charges
|
5.73x
|
|
|
9.04x
|
|
|
13.51x
|
|
Company Name
|
Jurisdiction of Incorporation
|
Clyman Bay Resources, Inc.
|
Delaware, U.S.
|
CMI Nova Scotia Company
|
Nova Scotia, Canada
|
CMP Canada Inc.
|
Nova Scotia, Canada
|
CMP Capital, Inc.
|
Delaware, U.S.
|
Compass Canada Limited Partnership
|
Ontario, Canada
|
Compass Canada Potash Holdings Inc.
|
Saskatchewan, Canada
|
Compass Cayman Holdings Ltd.
|
Cayman Islands
|
Compass Minerals (Europe) Limited
|
England and Wales
|
Compass Minerals America Inc.
|
Delaware, U.S.
|
Compass Minerals Canada Corp.
|
Nova Scotia, Canada
|
Compass Minerals Chile Limitada
|
Chile
|
Compass Minerals do Brasil Ltda.
|
Brazil
|
Compass Minerals International Limited Partnership
|
Ontario, Canada
|
Compass Minerals Louisiana Inc.
|
Delaware, U.S.
|
Compass Minerals Manitoba Inc.
|
Manitoba, Canada
|
Compass Minerals Nova Scotia Company
|
Nova Scotia, Canada
|
Compass Minerals Odgen Inc.
|
Delaware, U.S.
|
Compass Minerals South Africa Pty Ltd.
|
South Africa
|
Compass Minerals Storage & Archives Limited
|
England and Wales
|
Compass Minerals UK Holdings Limited
|
England and Wales
|
Compass Minerals UK Limited
|
England and Wales
|
Compass Minerals USA Inc.
|
Delaware, U.S.
|
Compass Minerals Wynyard Inc.
|
Saskatchewan, Canada
|
Compass Resources Canada Company
|
Nova Scotia, Canada
|
Compass South American Salt Holdings Ltd.
|
Cayman Islands
|
Curlew Valley Farms, LLC
|
Utah, U.S.
|
DeepStore Holdings Limited
|
England and Wales
|
DeepStore Limited
|
England and Wales
|
Dove Creek Grazing, LLC
|
Utah, U.S.
|
Great Salt Lake Holdings, LLC
|
Delaware, U.S.
|
GSL Corporation
|
Delaware, U.S.
|
Mixmicro Indústria e Comércio de Produtos Químicos Ltda.
|
Brazil
|
NAMSCO Inc.
|
Delaware, U.S.
|
NASC Nova Scotia Company
|
Nova Scotia, Canada
|
Produquímica Indústria e Comércio S.A.
|
Brazil
|
Reluz Nordeste Indústria e Comércio Ltda.
|
Brazil
|
Reluz Química Industrial Ltda.
|
Brazil
|
Salt Union Limited
|
England and Wales
|
Wolf Trax Europe Limited
|
England and Wales
|
Wolf Trax Holdings Inc.
|
Delaware, U.S.
|
Wolf Trax USA Inc.
|
Delaware, U.S.
|
(1)
|
Registration Statement (Form S-8 No. 333-119410) of Compass Minerals International, Inc. Directors’ Deferred Compensation Plan,
|
(2)
|
Registration Statement (Form S-8 No. 333-121965) of Compass Minerals International, Inc. Savings Plan,
|
(3)
|
Registration Statement (Form S-8 No. 333-127699) of Compass Minerals Inc. 2005 Incentive Award Plan and
|
(4)
|
Registration Statement (Form S-8 333-203922) of Compass Minerals Inc. 2015 Incentive Award Plan;
|
/s/ Ernst & Young LLP
|
|
|
|
|
|
|
|
March 1, 2017
|
|
|
|
Kansas City, Missouri
|
|
|
|
|
|
|
|
/s/ David J. D’Antoni
|
|
David J. D’Antoni
|
|
|
|
/s/ Valdemar L. Fischer
|
|
Valdemar L. Fischer
|
|
|
|
/s/ Eric Ford
|
|
Eric Ford
|
|
|
|
/s/ Richard S. Grant
|
|
Richard S. Grant
|
|
|
|
/s/ Allan R. Rothwell
|
|
Allan R. Rothwell
|
|
|
|
/s/ Lori A. Walker
|
|
Lori A. Walker
|
|
|
|
/s/ Paul S. Williams
|
|
Paul S. Williams
|
|
|
|
/s/ Amy J. Yoder
|
|
Amy J. Yoder
|
|
|
1.
|
I have reviewed this annual report on Form 10-K of Compass Minerals International, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: March 1, 2017
|
/s/ Francis J. Malecha
|
|
|
Francis J. Malecha
|
|
|
President and Chief Executive Officer
|
|
|
1.
|
I have reviewed this annual report on Form 10-K of Compass Minerals International, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: March 1, 2017
|
/s/ John D. Craft
|
|
|
John D. Craft
|
|
|
Interim Chief Financial Officer
|
|
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
|
|
|
March 1, 2017
|
/s/ Francis J. Malecha
|
|
|
Francis J. Malecha
|
|
|
President and Chief Executive Officer
|
|
|
|
|
|
/s/ John D. Craft
|
|
|
John D. Craft
|
|
|
Interim Chief Financial Officer
|
|
|