Delaware
|
|
36-3972986
|
(State or other jurisdiction of incorporation or
organization)
|
|
(I.R.S. Employer Identification No.)
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9900 West 109
th
Street, Suite 100
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66210
|
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
|
|
New York Stock Exchange
|
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Large accelerated filer
þ
|
|
Accelerated filer ☐
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|
Emerging growth company ☐
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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
|
Portions of the Proxy Statement for the Annual Meeting of Stockholders to be held May 9, 2019
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Part III, Items 10, 11, 12, 13 and 14
|
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COMPASS MINERALS INTERNATIONAL, INC.
|
PART I
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Page No.
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PART II
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PART III
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PART IV
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Item 16.
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||
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1
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
•
|
risks related to our mining and industrial operations;
|
•
|
geological conditions;
|
•
|
dependency on a limited number of key production and distribution facilities and critical equipment;
|
•
|
weather conditions;
|
•
|
strikes, other forms of work stoppage or slowdown or other union activities;
|
•
|
the inability to fund necessary capital expenditures or successfully complete capital projects;
|
•
|
supply constraints or price increases for energy and raw materials used in our production processes;
|
•
|
our indebtedness and ability to pay our indebtedness;
|
•
|
restrictions in our debt agreements that may limit our ability to operate our business or require accelerated debt payments;
|
•
|
tax liabilities;
|
•
|
financial assurance requirements;
|
•
|
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;
|
•
|
our payment of any dividends;
|
•
|
the impact of competition on the sales of our products;
|
|
2
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
•
|
risks associated with our international operations and sales;
|
•
|
the impact of anticipated changes in plant nutrition product prices and customer application rates;
|
•
|
conditions in the agricultural sector and supply and demand imbalances for competing plant nutrition products;
|
•
|
increasing costs or a lack of availability of transportation services;
|
•
|
the seasonal demand for our products;
|
•
|
our rights and governmental authorizations to mine and operate our properties;
|
•
|
compliance with foreign and U.S. laws and regulations applicable to our international operations;
|
•
|
compliance with environmental, health and safety laws and regulations;
|
•
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environmental liabilities;
|
•
|
misappropriation or infringement claims relating to intellectual property;
|
•
|
product liability claims and product recalls;
|
•
|
inability to obtain required product registrations or increased regulatory requirements;
|
•
|
changes in industry standards and regulatory requirements;
|
•
|
our ability to successfully implement our strategies;
|
•
|
the loss of key personnel;
|
•
|
if our computer systems, information technology or operations technology are compromised or the inability to protect confidential or proprietary data;
|
•
|
our ability to expand our business through acquisitions, integrate acquired businesses and realize anticipated benefits from acquisitions;
|
•
|
climate change;
|
•
|
domestic and international general business and economic conditions; and
|
•
|
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
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
ITEM 1.
|
BUSINESS
|
•
|
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;
|
•
|
A solar evaporation facility located near 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;
|
•
|
Several mechanical evaporation facilities producing consumer and industrial salt; and
|
•
|
Multiple facilities producing essential agricultural nutrients and specialty chemicals in Brazil.
|
|
4
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
5
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
6
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
Location
|
Annual Production Capacity
(a)
(tons)
|
Product Type
|
North America
|
|
|
Goderich, Ontario Mine
|
8,000,000
|
Rock Salt
|
Cote Blanche, Louisiana Mine
|
3,000,000
|
Rock Salt
|
Utah Plant:
|
|
|
Salt
(b)
|
1,500,000
|
Solar Salt
|
Magnesium Chloride
(c)
|
750,000
|
Magnesium Chloride
|
Lyons, Kansas Plant
|
450,000
|
Evaporated Salt
|
Unity, Saskatchewan Plant
|
160,000
|
Evaporated Salt
|
Goderich, Ontario Plant
|
140,000
|
Evaporated Salt
|
Amherst, Nova Scotia Plant
|
130,000
|
Evaporated Salt
|
United Kingdom
|
|
|
Winsford, Cheshire Mine
|
1,500,000
|
Rock Salt
|
|
7
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
Mine
|
Years in operation
|
Remaining reserve*
|
Remaining mine life*
|
Goderich
|
59 years
|
553.1 million tons
|
84 years
|
Cote Blanche
|
53 years
|
308.5 million tons
|
102 years
|
Winsford
|
173 years
|
29.4 million tons
|
29 years
|
|
8
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
•
|
macro nutrients - the traditional NPK fertilizers (nitrogen (N), phosphorus (P) and potassium (K)),
|
•
|
secondary nutrients - calcium, magnesium and sulfur, and
|
•
|
specialty plant nutrients - trace elements of iron, manganese, copper, boron, zinc, molybdenum, chlorine and nickel.
|
|
9
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
10
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
11
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
12
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
Production Facility
|
||||||||
|
Suzano I
|
Suzano II
|
Igarassu
|
Mauá
|
Uberlândia
|
Fermavi
(a)
|
Reluz Nordeste
|
Jacareí I
|
Jacareí II
|
Agriculture Productivity
|
X
|
X
|
|
X
|
X
|
X
|
|
X
|
X
|
Chemical Solutions
|
X
|
|
X
|
|
|
X
|
X
|
|
|
|
13
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
14
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
|
|
|
Land and Related Surface Rights
|
|
Mineral Reserves
|
||||
Name, Location
|
|
Use
|
|
Owned/
Leased
|
|
Expiration of
Lease
|
|
Owned/
Leased
|
|
Expiration of
Lease
|
Cote Blanche, Louisiana
|
|
Rock salt production facility
|
|
Leased
|
|
2060
(1)
|
|
Leased
|
|
2060
(1)
|
Lyons, Kansas
|
|
Evaporated salt production facility
|
|
Owned
|
|
N/A
|
|
Owned
|
|
N/A
|
Utah
|
|
SOP, solar salt and magnesium
chloride production facility
|
|
Owned
|
|
N/A
|
|
Leased
|
|
(2)
|
Wynyard, Saskatchewan, Canada
|
|
SOP production facility
|
|
Owned
(3)
|
|
N/A
|
|
Leased
|
|
2020
(4)
|
Amherst, Nova Scotia, Canada
|
|
Evaporated salt production facility
|
|
Owned
|
|
N/A
|
|
Leased
|
|
2023
(5)
|
Goderich, Ontario, Canada
|
|
Rock salt production facility
|
|
Owned
|
|
N/A
|
|
Leased
|
|
2022
(5)
|
Goderich, Ontario, Canada
|
|
Evaporated salt production facility
|
|
Owned
|
|
N/A
|
|
Owned
|
|
N/A
|
Unity, Saskatchewan, Canada
|
|
Evaporated salt production facility
|
|
Owned
|
|
N/A
|
|
Leased
|
|
2037/2030
(6)
|
Winsford, Cheshire, United Kingdom
|
|
Rock salt production facility; records
management
|
|
Owned
|
|
N/A
|
|
Owned
|
|
N/A
|
London, United Kingdom
|
|
Records management
|
|
Leased
|
|
2028
|
|
N/A
|
|
N/A
|
Suzano I, São Paulo, Brazil
|
|
Nutritional supplements and other chemicals production facility
|
|
Owned
|
|
N/A
|
|
N/A
|
|
N/A
|
Suzano II, São Paulo, Brazil
|
|
Nutritional supplements packaging facility
|
|
Owned
|
|
N/A
|
|
N/A
|
|
N/A
|
Igarassu, Pernambuco, Brazil
|
|
Various chemicals production facility
|
|
Owned
|
|
N/A
|
|
N/A
|
|
N/A
|
Mauá, São Paulo, Brazil
|
|
Nutritional supplements production facility
|
|
Owned
|
|
N/A
|
|
N/A
|
|
N/A
|
Uberlândia, Minas Gerais, Brazil
|
|
Mineral supplements for beef cattle and milk
|
|
Owned
|
|
N/A
|
|
N/A
|
|
N/A
|
Fermavi, Minas Gerais, Brazil
(7)
|
|
Nutritional supplements, water treatment, and other chemicals production facility
|
|
Owned
|
|
N/A
|
|
N/A
|
|
N/A
|
Reluz Nordeste, Alagoas, Brazil
|
|
Water treatment and other chemicals production facility
|
|
Owned
|
|
N/A
|
|
N/A
|
|
N/A
|
Jacareí I, São Paulo, Brazil
|
|
Nutritional supplements production facility
|
|
Owned
|
|
N/A
|
|
N/A
|
|
N/A
|
Jacareí II, São Paulo, Brazil
|
|
Nutritional supplements production and warehouse
|
|
Leased
|
|
2030
|
|
N/A
|
|
N/A
|
Overland Park, Kansas
|
|
Corporate headquarters
|
|
Leased
|
|
2020
|
|
N/A
|
|
N/A
|
Paulista, Pernambuco, Brazil
|
|
Produquímica headquarters
|
|
Leased
|
|
2019-2022
(8)
|
|
N/A
|
|
N/A
|
(1)
|
The Cote Blanche lease includes two 25-year renewal options.
|
(2)
|
The Utah lease renews on an annual basis.
|
(3)
|
The Wynyard location also has leases expiring in 2026 for two parcels of land.
|
(4)
|
The Wynyard mineral lease may be renewed for additional 20-year periods.
|
(5)
|
Subject to our right of renewal through 2043.
|
(6)
|
Consists of a lease expiring in 2037 and a lease expiring in 2030 subject to our right of renewal through 2051.
|
(7)
|
Held through a 50% ownership interest in a joint venture with Fermavi Eletroquímica Ltda.
|
(8)
|
Consists of several leases for different portions of leased space expiring between 2019 and 2022.
|
|
15
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
16
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
17
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
18
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
ITEM 1A.
|
RISK FACTORS
|
|
19
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
20
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
21
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
•
|
limit our ability to borrow additional money or sell our stock to fund our working capital, capital expenditures and debt service requirements;
|
•
|
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;
|
•
|
place us at a competitive disadvantage compared to our competitors with greater financial resources;
|
•
|
make us more vulnerable to a downturn in our business or the economy;
|
•
|
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
|
•
|
materially and adversely affect our business and financial condition if we are unable to meet our debt service requirements or obtain additional financing.
|
•
|
incur additional indebtedness or contingent obligations or grant liens;
|
•
|
pay dividends or make distributions to our stockholders;
|
•
|
repurchase or redeem our stock;
|
•
|
make investments or dispose of assets;
|
•
|
prepay, or amend the terms of, certain junior indebtedness;
|
•
|
engage in sale and leaseback transactions;
|
•
|
make changes to our organizational documents or fiscal periods;
|
•
|
create or permit certain liens on our assets;
|
•
|
create or permit restrictions on the ability of certain subsidiaries to make certain intercompany dividends, investments or asset transfers;
|
•
|
enter into new lines of business;
|
•
|
enter into transactions with our stockholders and affiliates; and
|
•
|
acquire the assets of, or merge or consolidate with, other companies.
|
|
22
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
23
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
•
|
economic developments including changes in currency exchange rates, inflation risks, exchange controls, tariffs, other trade protection measures and import or export licensing requirements;
|
•
|
difficulties and costs associated with complying with laws, treaties and regulations, including tax laws and labor regulations, and changes to laws, treaties and regulations;
|
•
|
restrictions on our ability to own or operate subsidiaries, make investments or acquire new businesses;
|
•
|
restrictions on our ability to repatriate earnings from our non-U.S. subsidiaries to the U.S. or the imposition of withholding taxes on remittances and other payments by our subsidiaries;
|
•
|
political developments, government deadlock, political instability, political activism, terrorist activities, civil unrest and international conflicts; and
|
•
|
uncertain and varying enforcement of laws and regulations and weak protection of intellectual property rights.
|
|
24
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
25
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
26
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
27
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
28
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
29
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
ITEM 1B.
|
UNRESOLVED STAFF COMMENTS
|
ITEM 2.
|
PROPERTIES
|
ITEM 3.
|
LEGAL PROCEEDINGS
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
Name
|
|
Age
|
|
Position
|
Richard S. Grant
|
|
72
|
|
Interim President and Chief Executive Officer and Chairman of the Board
|
James D. Standen
|
|
43
|
|
Chief Financial Officer
|
S. Bradley Griffith
|
|
51
|
|
Senior Vice President, Plant Nutrition
|
Angela Y. Jones
|
|
55
|
|
Senior Vice President, People and Culture
|
Anthony J. Sepich
|
|
48
|
|
Senior Vice President, Salt
|
Diana C. Toman
|
|
40
|
|
Senior Vice President, General Counsel and Corporate Secretary
|
|
30
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
31
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
ITEM 5.
|
MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
Plan category
|
Number of shares to be issued upon exercise of outstanding securities
|
Weighted-average exercise price of outstanding securities
|
Number of securities available for issuance under plan
|
|||||
Equity compensation plans approved by shareholders:
|
|
|
|
|||||
Stock options
|
708,746
|
|
$
|
70.76
|
|
|
||
Restricted stock units
|
83,308
|
|
N/A
|
|
|
|||
Performance stock units
|
126,638
|
|
N/A
|
|
|
|||
Deferred stock units
|
99,274
|
|
N/A
|
|
|
|||
Total securities under approved plans
(a)
|
1,017,966
|
|
|
1,672,160
|
|
|||
Equity compensation plans not approved by shareholders
(b)
:
|
|
|
||||||
Deferred stock units
|
17,775
|
|
N/A
|
|
|
|||
Total
|
1,035,741
|
|
|
1,672,160
|
|
|
32
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
ITEM 6.
|
SELECTED FINANCIAL DATA
|
(a)
|
“Product cost” is presented exclusive of depreciation, depletion and amortization.
|
(b)
|
Depreciation, depletion and amortization include amounts also included in selling, general and administrative expenses.
|
(c)
|
In the fourth quarter of 2018, we incurred costs of $5.1 million related to the transition of our Chief Executive Officer. Also in 2018, we recorded a tax benefit of $3.0 million related to the U.S. Tax Cuts and Jobs Act, the release of $7.2 million of valuation allowances related to our Brazil business and incurred $3.4 million of tax expense related to the repatriation of approximately $150 million. In the fourth quarter of 2017, we recorded a net charge of $46.8 million in connection with the U.S. Tax Cuts and Jobs Act and $13.8 million related to a tax settlement with the U.S. and Canadian tax authorities. In addition, we released approximately $25 million of valuation allowances related to our Brazilian deferred tax assets (see Note 8 to our Consolidated Financial Statements for further discussion regarding these items). 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 4 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.
|
(d)
|
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.
|
|
33
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
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;
|
•
|
A solar evaporation facility located near Ogden, Utah, which is both the largest SOP specialty fertilizer production site and the largest solar salt production site in the Western Hemisphere;
|
•
|
Several mechanical evaporation facilities producing consumer and industrial salt; and
|
•
|
Multiple facilities producing essential agricultural nutrients and specialty chemicals in Brazil.
|
|
34
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
•
|
Total sales
increased
9%
, or
$129.2 million
, due to increases in all segments.
|
•
|
Operating earnings
decreased
18%
, or
$28.9 million
, due to lower Salt, Plant Nutrition North America and corporate and other operating earnings.
|
•
|
Diluted earnings per share
increased
62%
, or
$0.77
. Diluted earnings per share in 2018 was negatively impacted by $5.1 million due to expenses incurred related to the transition of our Chief Executive Officer (“CEO”). Diluted earnings per share in 2017 was negatively impacted by a charge of $46.8 million for the impact of the U.S. Tax Cuts and Jobs Act legislation enacted in December 2017 and other tax-related items (see Note 8 to our Consolidated Financial Statements).
|
•
|
EBITDA* adjusted for items management believes are not indicative of our ongoing operating performance (“Adjusted EBITDA”)*
decreased
5%
, or
$13.2 million
.
|
•
|
Total sales
increased
20%
, or
$226.4 million
, due to the impact of a full year of Produquímica sales and an increase in Plant Nutrition North America segment sales. This increase was partially offset by a decline in Salt segment sales.
|
•
|
Operating earnings
decreased
9%
, or
$15.4 million
, due to lower Salt segment operating earnings, partially offset by the inclusion of Produquímica in our operating results and an increase in Plant Nutrition North America operating earnings.
|
•
|
Diluted earnings per share
decreased
74%
, or
$3.54
. Diluted earnings per share in
2017
was negatively impacted by a charge of $46.8 million related to U.S. tax reform. In contrast, 2016 diluted earnings per share was positively impacted by a $59.3 million gain as a result of remeasuring our prior equity investment in Produquímica held before the business combination (see Note 4 to our Consolidated Financial Statements).
|
•
|
Adjusted EBITDA*
increased
4%
, or
$11.5 million
.
|
|
35
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
•
|
Salt segment gross profit decreased $24.7 million primarily due to higher per-unit costs at our Goderich mine resulting from the strike at the mine that began in April 2018 and ended in July 2018 and higher per-unit shipping and handling costs partially offset by higher sales.
|
•
|
The plant nutrition business, on a combined basis, was responsible for $7.8 million of the decrease in gross profit.
|
•
|
Gross profit for Plant Nutrition North America decreased $2.0 million due primarily to higher depreciation expense during 2018, which was partially offset by higher sales volumes. Gross profit for Plant Nutrition South America decreased $5.8 million due primarily to a weaker Brazilian real compared to the U.S. dollar, which was partially offset by higher sales prices and volumes.
|
•
|
The plant nutrition business, on a combined basis, contributed $86.0 million to the increase in gross profit primarily due to the full-year inclusion of Produquímica in our operating results.
|
•
|
Gross profit for Plant Nutrition North America was favorably impacted by higher sales volumes and lower per-unit product costs, which were partially offset by increased per-unit shipping and handling costs and higher depreciation expense during 2017.
|
•
|
A $61.6 million decrease in Salt segment gross margin partially offset the combined plant nutrition business’ increase. The decrease resulted from lower sales volumes, increased per-unit product and increased shipping and handling costs, and higher depreciation expense.
|
•
|
The decrease in SG&A expense was primarily due to a weaker Brazilian real compared to the U.S. dollar and lower professional service fees in all three of our segments. The decrease in SG&A expense was partially offset by higher restructuring costs in 2018 due to CEO transition costs of $5.1 million and higher depreciation expense related to a significant software system upgrade implemented in the second half of 2017.
|
•
|
The increase was primarily due to higher U.S. interest rates and an increase in borrowings under our revolving credit facility.
|
•
|
Net earnings in our equity investee increased by $0.2 million to
$1.0 million
.
|
•
|
The increase was primarily due to foreign exchange gains of $5.8 million in
2018
, compared to losses of $7.1 million in
2017
.
|
•
|
Income tax expense and our income tax rate decreased in 2018 due to $60.6 million recorded in 2017 related to U.S. tax reform and a tax settlement agreement, partially offset by the release of valuation allowances related to our Brazil business.
|
•
|
Our effective tax rate decreased from 58% in 2017 to 11% in 2018. Our effective tax rates were impacted by U.S. tax reform and a tax settlement agreement in 2017 and the release of valuation allowances in 2018 related to our Brazil business.
|
•
|
Our income tax provision in both periods differs from the U.S. statutory rate primarily due to U.S. statutory depletion, state income taxes, foreign income, mining and withholding taxes and interest expense recognition differences for tax and financial reporting purposes.
|
•
|
The increase in SG&A expense was primarily due to the full year inclusion of Produquímica in our operating results in 2017 and approximately $2 million in higher corporate depreciation related to a significant software system upgrade.
|
|
36
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
•
|
In addition, we incurred charges of approximately $2 million related to ongoing restructuring activities primarily impacting corporate SG&A.
|
•
|
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.
|
•
|
The
$0.8 million
of earnings in 2017 represents our share of Fermavi Eletroquímica Ltda.’s (“Fermavi”) net earnings. As a result of the full acquisition of Produquímica, we hold a 50% interest in Fermavi, which was previously held by Produquímica.
|
•
|
The
$1.4 million
loss in 2016 was primarily comprised of our share of Produquímica’s net loss based on our initial 35% equity interest in Produquímica prior to the full acquisition.
|
•
|
We recognized a gain of $59.3 million in 2016 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 increase was primarily due to foreign exchange losses of $7.1 million in 2017, compared to losses of $0.1 million in
2016
.
|
•
|
The increase was partially offset by the inclusion of $3.0 million of refinancing fees in 2016 and increased interest income in
2017
.
|
•
|
Income tax expense and our income tax rate increased in 2017 due to the impact of U.S. tax reform, which resulted in an increase in tax expense of $46.8 million, and due to a tax settlement agreement. These increases were partially offset by the release of valuation allowances related to our Brazil business.
|
•
|
Our effective tax rate was 58% in 2017 and 18% in 2016. Our effective tax rates were impacted by U.S. tax reform and a tax settlement agreement in 2017 and the non-taxable gain recognized from the remeasurement of our previously held equity investment in Produquímica in 2016.
|
•
|
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.
|
|
37
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2018
|
|
2017
|
|
2016
|
||||||
Salt Sales (in millions)
|
$
|
858.1
|
|
|
$
|
769.2
|
|
|
$
|
811.9
|
|
Salt Operating Earnings (in millions)
|
$
|
115.7
|
|
|
$
|
138.0
|
|
|
$
|
200.6
|
|
Salt Sales Volumes (thousands of tons)
|
|
|
|
|
|
||||||
Highway deicing
|
9,597
|
|
|
8,565
|
|
|
8,966
|
|
|||
Consumer and industrial
|
2,030
|
|
|
2,035
|
|
|
2,147
|
|
|||
Total tons sold
|
11,627
|
|
|
10,600
|
|
|
11,113
|
|
|||
Average Salt Sales Price (per ton)
|
|
|
|
|
|
||||||
Highway deicing
|
$
|
55.44
|
|
|
$
|
53.13
|
|
|
$
|
54.73
|
|
Consumer and industrial
|
$
|
160.65
|
|
|
$
|
154.34
|
|
|
$
|
149.63
|
|
Combined
|
$
|
73.80
|
|
|
$
|
72.56
|
|
|
$
|
73.06
|
|
•
|
Salt sales
increased
12%
, or
$88.9 million
, due to sales increases in both businesses.
|
•
|
Salt sales volumes
increased
10%
, or
1,027,000
tons, and contributed approximately
$54 million
to the increase in Salt segment sales. Highway deicing sales volumes
increased
12%
as a result of significantly above average winter weather in the U.K. and more winter weather events in North America in the first quarter of 2018 compared to the same period in 2017. Consumer and industrial sales volumes were essentially flat with the prior year.
|
•
|
Salt average sales price
increased
2%
and contributed approximately
$35 million
to the increase in Salt segment sales as average sales prices were higher in both businesses. Salt average sales price was negatively impacted by product mix as highway deicing products, which have a lower average sales price than consumer and industrial products, were a higher proportion of total sales in 2018.
|
•
|
Highway deicing average sales prices
increased
4%
, primarily as a result of the realization of higher North American highway deicing bid prices for the 2018-2019 winter season in the fourth quarter of
2018
reflecting tighter salt supply following a more typical winter season as compared to the prior weak winter season. Consumer and industrial average sales prices
increased
4%
due to price increases introduced over the last year and an improvement in product sales mix.
|
•
|
Salt operating earnings
decreased
16%
, or
$22.3 million
, due to higher per-unit product and logistics costs in North America as well as higher-cost inventory produced in 2017 and sold in 2018 compared to a lower-cost 2017 beginning inventory. The higher per-unit product and logistics costs resulted primarily from lower Goderich mine production levels and higher carryover inventory costs due the Goderich mine ceiling fall in the second half of 2017 and lower production levels at the Goderich mine related to the strike at the mine that began in April 2018 and ended in July 2018. The reduced inventory levels led to higher costs as a result of purchased salt and higher logistics costs to move salt into markets typically served by our Goderich mine. This decrease in operating earnings was partially offset by a restructuring charge of approximately $2 million that occurred in 2017.
|
•
|
Salt sales
decreased
5%
, or
$42.7 million
, due to lower highway deicing and consumer and industrial sales volumes and lower highway deicing average sales prices. This decrease was partially offset by higher consumer and industrial average sales prices.
|
•
|
Salt sales volumes
decreased
5%
, or
513,000
tons, and contributed approximately
$39 million
to the decline in Salt segment sales. Highway deicing sales volumes
decreased
4%
and consumer and industrial sales volumes
decreased
5%
primarily due to the carryover impact of two consecutive mild winters, which resulted in increased customer deicing inventories.
|
|
38
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
•
|
Salt average sales price
decreased
1%
and contributed approximately
$4 million
to the decrease in Salt segment sales. The decrease in average sales price was due to a decrease in highway deicing average sales prices, partially offset by an increase in consumer and industrial average sales prices.
|
•
|
Highway deicing average sales prices decreased 3% primarily as a result of lower North American highway deicing bid prices for the 2016-2017 winter season partially offset by favorable geographic sales mix in the fourth quarter of 2017. Consumer and industrial average sales prices increased 3% due to price increases introduced in 2016 as well as an improvement in product sales mix.
|
•
|
Salt operating earnings
decreased
31%
, or
$62.6 million
, primarily due to higher per-unit product and logistics costs, lower average sales prices and higher depreciation expense.
|
•
|
We experienced lower mine operating rates throughout 2016 due to high deicing inventory and unplanned downtime at our Goderich mine in the fourth quarter of 2016, which increased 2017 per-unit product costs.
|
•
|
In addition, results include restructuring costs related to our cost savings initiatives of approximately $2 million during 2017.
|
|
2018
|
|
2017
|
|
2016
|
||||||
Plant Nutrition North America Sales (in millions)
|
$
|
233.2
|
|
|
$
|
210.0
|
|
|
$
|
203.0
|
|
Plant Nutrition North America Operating Earnings (in millions)
|
$
|
25.3
|
|
|
$
|
27.7
|
|
|
$
|
21.1
|
|
Plant Nutrition North America Sales Volumes (thousands of tons)
|
362
|
|
|
327
|
|
|
313
|
|
|||
Plant Nutrition North America Average Sales Price (per ton)
|
$
|
645
|
|
|
$
|
642
|
|
|
$
|
648
|
|
•
|
Plant Nutrition North America sales
increased
11%
, or
$23.2 million
, due primarily to higher sales volumes.
|
•
|
Plant Nutrition North America sales volumes
increased
11%
, or
35,000
tons, and contributed approximately
$22 million
to the increase in sales. The sales volumes increase resulted from increases in both SOP and micronutrient volumes.
|
•
|
Plant Nutrition North America average sales prices were essentially flat and contributed approximately
$1 million
to the increase in sales.
|
•
|
Plant Nutrition North America operating earnings
decreased
9%
, or
$2.4 million
, primarily due to an increase in depreciation expense associated with commissioning new production assets at our Utah facility and additional potassium chloride feedstock used to boost SOP production during the first half of 2018. The decrease was partially offset by lower logistics costs and a restructuring charge of approximately $1 million that occurred in 2017.
|
•
|
Plant Nutrition North America sales
increased
3%
, or
$7.0 million
, primarily due to higher sales volumes partially offset by lower average sales prices.
|
•
|
Plant Nutrition North America sales volumes
increased
4%
, or 14,000 tons, and contributed approximately
$9 million
to the increase in sales as the North American SOP market stabilized during 2017
|
•
|
Plant Nutrition North America average sales price
decreased
1%
which partially offset the increase in sales by approximately $2 million.
|
•
|
Plant Nutrition North America operating earnings
increased
31%
, or
$6.6 million
, primarily due to a reduction in per-unit product costs, the impact of which was partially offset by unfavorable logistics costs, higher depreciation expense and approximately $1 million of restructuring costs.
|
|
39
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
2018
|
|
2017
|
|
2016
|
||||||
Plant Nutrition South America Sales (in millions)
|
$
|
391.8
|
|
|
$
|
375.0
|
|
|
$
|
113.5
|
|
Plant Nutrition South America Operating Earnings (in millions)
|
$
|
48.7
|
|
|
$
|
49.1
|
|
|
$
|
7.4
|
|
Plant Nutrition South America Sales Volumes (thousands of tons)
|
|
|
|
|
|
||||||
Agricultural productivity
|
461
|
|
|
432
|
|
|
122
|
|
|||
Chemical solutions
|
300
|
|
|
289
|
|
|
72
|
|
|||
Total tons sold
|
761
|
|
|
721
|
|
|
194
|
|
|||
Average Plant Nutrition South America Sales Price (per ton)
|
|
|
|
|
|
||||||
Agricultural productivity
|
$
|
644
|
|
|
$
|
632
|
|
|
$
|
713
|
|
Chemical solutions
|
$
|
316
|
|
|
$
|
351
|
|
|
$
|
372
|
|
Combined
|
$
|
515
|
|
|
$
|
520
|
|
|
$
|
587
|
|
•
|
Plant Nutrition South America sales
increased
4%
or
$16.8 million
.
|
•
|
Plant Nutrition South America sales volumes
increased
6%
, or
40,000
tons, and contributed approximately $22 million to the increase in Plant Nutrition South America sales. Agricultural productivity sales volumes increased
7%
primarily as a result of improved crop economics in Brazil versus the prior year. Chemical solutions sales volumes increased
4%
due to higher demand for chlor-alkali products.
|
•
|
A
1%
decrease in Plant Nutrition South America average sales price partially offset the sales increase by approximately $5 million. The decrease in average sales price was primarily due to a
10%
decrease in chemical solutions average prices, partially offset by a
2%
increase in agricultural productivity product prices. The decrease in average sales prices was due to a weaker Brazilian real versus the U.S. dollar partially offset by a favorable shift in product sales mix.
|
•
|
Plant Nutrition South America operating earnings
decreased
1%
, or
$0.4 million
, primarily due to a weaker Brazilian real versus the U.S. dollar and a $1.9 million gain recognized in the first quarter of 2017 related to the settlement of contingent consideration for the acquisition of Produquímica. In local currency, operating earnings increased 22% over 2017 results as higher sales were partially offset by higher commodity costs.
|
•
|
Financial results for 2016 represent consolidated financial information with respect to our Plant Nutrition South America segment from October 3, 2016, the Produquímica acquisition date, through December 31, 2016. As such, 2016 results are not comparable to full-year 2017 consolidated financial results.
|
•
|
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.
|
•
|
Commitment volumes for our North American highway deicing bid season have declined from our prior bid season. We expect Salt sales volumes to range from 10.0 million to 10.5 million tons in
2019
.
|
•
|
Salt EBITDA is expected to be approximately $65 million to $80 million in the first half of 2019.
|
•
|
Plant Nutrition North America sales volumes are expected to range from 350,000 to 400,000 tons in
2019
.
|
•
|
Plant Nutrition North America EBITDA is expected to range from $30 million to $40 million in the first half of 2019.
|
•
|
We expect
2019
Plant Nutrition South America sales volumes to range from 800,000 to 900,000 tons.
|
•
|
Plant Nutrition South America EBITDA is expected to range from $10 million to $20 million in the first half of 2019.
|
•
|
We shifted all of our Goderich mine production to continuous mining in the fourth quarter of 2017 following significant investments in this technology. Our continuous mining and haulage system at the Goderich mine is expected to provide a safer, more sustainable production environment and enhance our ability to ramp up and down to meet demand fluctuations. In addition, we are near completion of our shaft relining project at our Goderich mine, which we undertook to help secure the integrity of our Goderich mine and our hoisting capacity for the future.
|
|
40
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
•
|
We have invested in our Utah 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. We recently completed a project to further expand our SOP production capacity and expand our ability to compact product into various product grades at our Utah facility, which increased our SOP production capacity to approximately 550,000 tons when supplemental KCl feedstock is used.
|
•
|
In October 2016, we acquired the remaining 65% of the issued and outstanding capital stock of Produquímica (see Note 4 to our Consolidated Financial Statements for more information).
|
|
41
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
2018
|
2017
|
2016
|
Operating Activities:
|
||
Net cash flows provided by operating activities were $190.7 million.
» Net earnings were $68.8 million.
» Non-cash depreciation and amortization expense was $136.9 million.
» Working capital items were a use of operating cash flows of $19.9 million.
|
Net cash flows provided by operating activities were $146.9 million.
» Net earnings were $42.7 million.
» Non-cash depreciation and amortization expense was $122.2 million.
» Working capital items were a use of operating cash flows of $6.9 million.
|
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.
|
Investing Activities:
|
||
Net cash flows used by investing activities were $99.6 million.
» Included $96.8 million of capital expenditures.
|
Net cash flows used by investing activities were $119.0 million.
» Included $114.1 million of capital expenditures.
|
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.
|
Financing Activities:
|
||
Net cash flows used by financing activities were $85.9 million.
» Included net proceeds from issuance of debt of $14.5 million, payments of dividends of $97.7 million and payments of $1.7 million related to deferred financing costs.
|
Net cash flows used by financing activities were $73.4 million.
» Included net proceeds from issuance of debt of $38.7 million, payments of dividends of $97.5 million and payments of $14.7 million related to contingent consideration from the Produquímica acquisition.
|
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 and payments of $8.5 million related to the refinancing of debt.
|
|
42
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
Contractual Cash Obligations
|
|
Total
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Thereafter
|
||||||||||||||
Long-term Debt
|
|
$
|
1,371.4
|
|
|
$
|
43.7
|
|
|
$
|
63.3
|
|
|
$
|
1,010.8
|
|
|
$
|
1.9
|
|
|
$
|
1.7
|
|
|
$
|
250.0
|
|
Interest
(a)
|
|
195.1
|
|
|
66.5
|
|
|
63.2
|
|
|
34.4
|
|
|
12.2
|
|
|
12.2
|
|
|
6.6
|
|
|||||||
Capital Lease Obligations
(b)
|
|
12.2
|
|
|
2.3
|
|
|
1.8
|
|
|
1.3
|
|
|
1.1
|
|
|
1.1
|
|
|
4.6
|
|
|||||||
Operating Leases
(b)
|
|
55.0
|
|
|
16.4
|
|
|
10.6
|
|
|
5.7
|
|
|
4.4
|
|
|
3.6
|
|
|
14.3
|
|
|||||||
Unconditional Purchase Obligations
(c)
|
|
47.8
|
|
|
26.2
|
|
|
8.6
|
|
|
6.7
|
|
|
6.2
|
|
|
0.1
|
|
|
—
|
|
|||||||
One-time transition tax obligation
|
|
36.0
|
|
|
2.5
|
|
|
3.2
|
|
|
3.2
|
|
|
3.2
|
|
|
6.0
|
|
|
17.9
|
|
|||||||
Estimated Future Pension Benefit Obligations
(d)
|
|
58.6
|
|
|
2.8
|
|
|
2.9
|
|
|
3.0
|
|
|
3.1
|
|
|
3.2
|
|
|
43.6
|
|
|||||||
Total Contractual Cash Obligations
|
|
$
|
1,776.1
|
|
|
$
|
160.4
|
|
|
$
|
153.6
|
|
|
$
|
1,065.1
|
|
|
$
|
32.1
|
|
|
$
|
27.9
|
|
|
$
|
337.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Other Commitments
|
|
Total
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Thereafter
|
||||||||||||||
Letters of Credit
|
|
$
|
10.6
|
|
|
$
|
10.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Bank Letter Guarantees
(e)
|
|
8.5
|
|
|
8.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Performance Bonds
(e)
|
|
181.4
|
|
|
181.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Total Other Commitments
|
|
$
|
200.5
|
|
|
$
|
200.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(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, 2018
blended rate of 4.4%, including the applicable spread, was used for this calculation for CMI debt. 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 disputes with Canadian taxing authorities remain outstanding. Note 8 to our 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 raw materials. In addition, we have minimum throughput commitments in certain depots and warehouses.
|
(d)
|
Note 9 to our Consolidated Financial Statements provides additional information.
|
(e)
|
Note 12 to our Consolidated Financial Statements provides additional information.
|
|
43
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
|
For the Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Net earnings
|
|
$
|
68.8
|
|
|
$
|
42.7
|
|
|
$
|
162.7
|
|
Interest expense
|
|
62.5
|
|
|
52.9
|
|
|
34.1
|
|
|||
Income tax expense
|
|
8.8
|
|
|
60.0
|
|
|
34.6
|
|
|||
Depreciation, depletion and amortization
|
|
136.9
|
|
|
122.2
|
|
|
90.3
|
|
|||
EBITDA
|
|
$
|
277.0
|
|
|
$
|
277.8
|
|
|
$
|
321.7
|
|
Adjustments to EBITDA:
|
|
|
|
|
|
|
||||||
Restructuring charges
|
|
$
|
—
|
|
|
$
|
4.3
|
|
|
$
|
—
|
|
CEO transition costs
|
|
5.1
|
|
|
—
|
|
|
—
|
|
|||
Gain from remeasurement of equity method investment
|
|
—
|
|
|
—
|
|
|
(59.3
|
)
|
|||
Business acquisition related items
|
|
—
|
|
|
—
|
|
|
8.4
|
|
|||
Indefinite-lived intangible asset impairment
|
|
—
|
|
|
—
|
|
|
3.1
|
|
|||
Fees and premiums paid to redeem debt
|
|
—
|
|
|
—
|
|
|
3.0
|
|
|||
Other (income) expense, net
|
|
(8.8
|
)
|
|
4.4
|
|
|
(1.9
|
)
|
|||
Adjusted EBITDA
|
|
$
|
273.3
|
|
|
$
|
286.5
|
|
|
$
|
275.0
|
|
|
44
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
45
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
46
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
|
47
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
Description
|
Page
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
48
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
/s/ Ernst & Young LLP
|
|
|
|
We have served as the Company’s auditor since 2005.
|
|
|
|
Kansas City, Missouri
|
|
February 28, 2019
|
|
|
49
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
/s/ Ernst & Young LLP
|
|
|
|
Kansas City, Missouri
|
|
February 28, 2019
|
|
|
50
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
|
December 31,
|
||||||
(In millions, except share data)
|
|
2018
|
|
2017
|
||||
ASSETS
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
27.0
|
|
|
$
|
36.6
|
|
Receivables, less allowance for doubtful accounts of $9.9 in 2018 and $10.9 in 2017
|
|
311.6
|
|
|
344.5
|
|
||
Inventories
|
|
266.6
|
|
|
289.9
|
|
||
Other
|
|
116.0
|
|
|
66.5
|
|
||
Total current assets
|
|
721.2
|
|
|
737.5
|
|
||
Property, plant and equipment, net
|
|
1,052.0
|
|
|
1,138.1
|
|
||
Intangible assets, net
|
|
115.9
|
|
|
143.6
|
|
||
Goodwill
|
|
350.8
|
|
|
405.0
|
|
||
Investment in equity method investee
|
|
24.5
|
|
|
24.6
|
|
||
Other
|
|
103.5
|
|
|
122.2
|
|
||
Total assets
|
|
$
|
2,367.9
|
|
|
$
|
2,571.0
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
|
||
Current portion of long-term debt
|
|
$
|
43.5
|
|
|
$
|
32.1
|
|
Accounts payable
|
|
111.3
|
|
|
123.5
|
|
||
Accrued expenses
|
|
54.9
|
|
|
54.4
|
|
||
Accrued salaries and wages
|
|
31.8
|
|
|
23.9
|
|
||
Income taxes payable
|
|
32.1
|
|
|
25.9
|
|
||
Accrued interest
|
|
9.7
|
|
|
8.2
|
|
||
Total current liabilities
|
|
283.3
|
|
|
268.0
|
|
||
Long-term debt, net of current portion
|
|
1,321.2
|
|
|
1,330.4
|
|
||
Deferred income taxes, net
|
|
100.8
|
|
|
127.0
|
|
||
Other noncurrent liabilities
|
|
122.4
|
|
|
151.0
|
|
||
Commitments and contingencies (Note 12)
|
|
|
|
|
|
|
||
Stockholders' equity:
|
|
|
|
|
|
|||
Common stock:
|
|
|
|
|
||||
$0.01 par value, 200,000,000 authorized shares; 35,367,264 issued shares
|
|
0.4
|
|
|
0.4
|
|
||
Additional paid-in capital
|
|
110.1
|
|
|
102.5
|
|
||
Treasury stock, at cost — 1,513,808 shares at December 31, 2018 and 1,539,763 shares at December 31, 2017
|
|
(2.9
|
)
|
|
(2.9
|
)
|
||
Retained earnings
|
|
643.5
|
|
|
672.5
|
|
||
Accumulated other comprehensive loss
|
|
(210.9
|
)
|
|
(77.9
|
)
|
||
Total stockholders' equity
|
|
540.2
|
|
|
694.6
|
|
||
Total liabilities and stockholders' equity
|
|
$
|
2,367.9
|
|
|
$
|
2,571.0
|
|
|
51
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
|
For the Year Ended December 31,
|
||||||||||
(In millions, except share data)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Sales
|
|
$
|
1,493.6
|
|
|
$
|
1,364.4
|
|
|
$
|
1,138.0
|
|
Shipping and handling cost
|
|
320.0
|
|
|
267.5
|
|
|
244.9
|
|
|||
Product cost
|
|
879.7
|
|
|
770.3
|
|
|
593.6
|
|
|||
Gross profit
|
|
293.9
|
|
|
326.6
|
|
|
299.5
|
|
|||
Selling, general and administrative expenses
|
|
163.6
|
|
|
167.4
|
|
|
124.9
|
|
|||
Operating earnings
|
|
130.3
|
|
|
159.2
|
|
|
174.6
|
|
|||
Other expense (income):
|
|
|
|
|
|
|
||||||
Interest expense
|
|
62.5
|
|
|
52.9
|
|
|
34.1
|
|
|||
Net (earnings) loss in equity investee
|
|
(1.0
|
)
|
|
(0.8
|
)
|
|
1.4
|
|
|||
Gain from remeasurement of equity method investment
|
|
—
|
|
|
—
|
|
|
(59.3
|
)
|
|||
Other, net
|
|
(8.8
|
)
|
|
4.4
|
|
|
1.1
|
|
|||
Earnings before income taxes
|
|
77.6
|
|
|
102.7
|
|
|
197.3
|
|
|||
Income tax expense
|
|
8.8
|
|
|
60.0
|
|
|
34.6
|
|
|||
Net earnings
|
|
$
|
68.8
|
|
|
$
|
42.7
|
|
|
$
|
162.7
|
|
Basic net earnings per common share
|
|
$
|
2.02
|
|
|
$
|
1.25
|
|
|
$
|
4.79
|
|
Diluted net earnings per common share
|
|
$
|
2.02
|
|
|
$
|
1.25
|
|
|
$
|
4.79
|
|
Weighted-average common shares outstanding (in thousands):
|
|
|
|
|
|
|
||||||
Basic
|
|
33,848
|
|
|
33,819
|
|
|
33,776
|
|
|||
Diluted
|
|
33,848
|
|
|
33,820
|
|
|
33,780
|
|
|||
Cash dividends per share
|
|
$
|
2.88
|
|
|
$
|
2.88
|
|
|
$
|
2.78
|
|
|
52
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
|
For the Year Ended December 31,
|
||||||||||
(In millions)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Net earnings
|
|
$
|
68.8
|
|
|
$
|
42.7
|
|
|
$
|
162.7
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
||||||
Unrealized (loss) gain from change in pension costs, net of tax of $0.1, $0.0 and $(0.1) in 2018, 2017 and 2016
|
|
(0.6
|
)
|
|
(0.2
|
)
|
|
0.1
|
|
|||
Unrealized gain (loss) on cash flow hedges, net of tax of $(0.2), $0.8 and $(1.3) in 2018, 2017 and 2016
|
|
0.4
|
|
|
(1.5
|
)
|
|
2.2
|
|
|||
Cumulative translation adjustment
|
|
(132.6
|
)
|
|
28.7
|
|
|
1.1
|
|
|||
Comprehensive (loss) income
|
|
$
|
(64.0
|
)
|
|
$
|
69.7
|
|
|
$
|
166.1
|
|
|
53
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
(In millions)
|
|
Common Stock
|
|
Additional Paid-In Capital
|
|
Treasury Stock
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Loss
|
|
Total
|
||||||||||||
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
|
|
Comprehensive income
|
|
|
|
|
|
|
|
|
42.7
|
|
|
27.0
|
|
|
69.7
|
|
||||||||
Dividends on common stock/equity awards
|
|
|
|
0.2
|
|
|
|
|
|
(97.7
|
)
|
|
|
|
(97.5
|
)
|
||||||||
Shares issued for stock units
|
|
|
|
(0.1
|
)
|
|
0.1
|
|
|
|
|
|
|
—
|
|
|||||||||
Stock options exercised
|
|
|
|
0.3
|
|
|
|
|
|
|
|
|
0.3
|
|
||||||||||
Stock-based compensation
|
|
|
|
5.0
|
|
|
|
|
|
|
|
|
5.0
|
|
||||||||||
Balance, December 31, 2017
|
|
$
|
0.4
|
|
|
$
|
102.5
|
|
|
$
|
(2.9
|
)
|
|
$
|
672.5
|
|
|
$
|
(77.9
|
)
|
|
$
|
694.6
|
|
Comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
68.8
|
|
|
(132.8
|
)
|
|
(64.0
|
)
|
||||||
Stranded tax effect from tax reform
|
|
|
|
|
|
|
|
|
|
|
0.2
|
|
|
(0.2
|
)
|
|
—
|
|
||||||
Dividends on common stock/equity awards
|
|
|
|
|
0.3
|
|
|
|
|
|
(98.0
|
)
|
|
|
|
|
(97.7
|
)
|
||||||
Stock-based compensation
|
|
|
|
|
7.3
|
|
|
|
|
|
|
|
|
|
|
|
7.3
|
|
||||||
Balance, December 31, 2018
|
|
$
|
0.4
|
|
|
$
|
110.1
|
|
|
$
|
(2.9
|
)
|
|
$
|
643.5
|
|
|
$
|
(210.9
|
)
|
|
$
|
540.2
|
|
|
54
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
|
For the Year Ended
December 31,
|
||||||||||
(In millions)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
||||||
Net earnings
|
|
$
|
68.8
|
|
|
$
|
42.7
|
|
|
$
|
162.7
|
|
Adjustments to reconcile net earnings to net cash flows provided by operating activities:
|
|
|
|
|
|
|
||||||
Depreciation, depletion and amortization
|
|
136.9
|
|
|
122.2
|
|
|
90.3
|
|
|||
Finance fee amortization
|
|
2.2
|
|
|
2.2
|
|
|
2.0
|
|
|||
Early extinguishment and refinancing of long-term debt
|
|
—
|
|
|
—
|
|
|
0.7
|
|
|||
Impairment of intangible asset
|
|
—
|
|
|
—
|
|
|
3.1
|
|
|||
Stock-based compensation
|
|
7.8
|
|
|
5.0
|
|
|
4.9
|
|
|||
Deferred income taxes
|
|
(16.7
|
)
|
|
(16.5
|
)
|
|
(11.3
|
)
|
|||
Net (earnings) loss in equity investee
|
|
(1.0
|
)
|
|
(0.8
|
)
|
|
1.4
|
|
|||
Gain on settlement of acquisition-related contingent consideration
|
|
—
|
|
|
(1.9
|
)
|
|
—
|
|
|||
Gain from remeasurement of equity method investment
|
|
—
|
|
|
—
|
|
|
(59.3
|
)
|
|||
Unrealized foreign exchange loss
|
|
8.5
|
|
|
0.3
|
|
|
—
|
|
|||
Other, net
|
|
4.1
|
|
|
0.6
|
|
|
4.5
|
|
|||
Changes in operating assets and liabilities, net of acquisition:
|
|
|
|
|
|
|
|
|
|
|||
Receivables
|
|
16.4
|
|
|
(22.7
|
)
|
|
(76.9
|
)
|
|||
Inventories
|
|
(16.8
|
)
|
|
(5.9
|
)
|
|
65.1
|
|
|||
Other assets
|
|
(18.4
|
)
|
|
(72.8
|
)
|
|
35.4
|
|
|||
Accounts payable, income taxes payable and accrued expenses
|
|
21.1
|
|
|
(3.6
|
)
|
|
(56.0
|
)
|
|||
Other liabilities
|
|
(22.2
|
)
|
|
98.1
|
|
|
0.7
|
|
|||
Net cash provided by operating activities
|
|
190.7
|
|
|
146.9
|
|
|
167.3
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|||
Capital expenditures
|
|
(96.8
|
)
|
|
(114.1
|
)
|
|
(182.2
|
)
|
|||
Investment in equity method investee
|
|
—
|
|
|
—
|
|
|
(4.7
|
)
|
|||
Acquisition of a business, net of cash and cash equivalents acquired
|
|
—
|
|
|
—
|
|
|
(277.7
|
)
|
|||
Other, net
|
|
(2.8
|
)
|
|
(4.9
|
)
|
|
(3.2
|
)
|
|||
Net cash used in investing activities
|
|
(99.6
|
)
|
|
(119.0
|
)
|
|
(467.8
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|||
Proceeds from revolving credit facility borrowings
|
|
457.4
|
|
|
295.8
|
|
|
384.3
|
|
|||
Principal payments on revolving credit facility borrowings
|
|
(429.1
|
)
|
|
(232.0
|
)
|
|
(283.4
|
)
|
|||
Proceeds from the issuance of long-term debt
|
|
54.3
|
|
|
98.7
|
|
|
850.9
|
|
|||
Principal payments on long-term debt
|
|
(68.1
|
)
|
|
(123.8
|
)
|
|
(535.1
|
)
|
|||
Dividends paid
|
|
(97.7
|
)
|
|
(97.5
|
)
|
|
(94.1
|
)
|
|||
Acquisition-related contingent consideration payment
|
|
—
|
|
|
(14.7
|
)
|
|
—
|
|
|||
Premium and other payments to refinance debt
|
|
—
|
|
|
(0.2
|
)
|
|
(2.8
|
)
|
|||
Deferred financing costs
|
|
(1.7
|
)
|
|
(0.7
|
)
|
|
(5.7
|
)
|
|||
Proceeds received from stock option exercises
|
|
—
|
|
|
0.3
|
|
|
0.7
|
|
|||
Excess tax deficiencies from equity compensation awards
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|||
Other
|
|
(1.0
|
)
|
|
0.7
|
|
|
—
|
|
|||
Net cash (used in) provided by financing activities
|
|
(85.9
|
)
|
|
(73.4
|
)
|
|
314.6
|
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
|
(14.8
|
)
|
|
4.7
|
|
|
4.9
|
|
|||
Net change in cash and cash equivalents
|
|
(9.6
|
)
|
|
(40.8
|
)
|
|
19.0
|
|
|||
Cash and cash equivalents, beginning of the year
|
|
36.6
|
|
|
77.4
|
|
|
58.4
|
|
|||
Cash and cash equivalents, end of year
|
|
$
|
27.0
|
|
|
$
|
36.6
|
|
|
$
|
77.4
|
|
Supplemental cash flow information:
|
|
|
|
|
|
|
|
|
|
|||
Interest paid, net of amounts capitalized
|
|
$
|
52.1
|
|
|
$
|
42.7
|
|
|
$
|
26.7
|
|
Income taxes paid, net of refunds
|
|
$
|
38.3
|
|
|
$
|
27.2
|
|
|
$
|
59.4
|
|
|
|
|
|
|
|
|
||||||
See Note 4 to the Consolidated Financial Statements for detail regarding the non-cash effects of the 2016 business acquisition.
|
|
55
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
56
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
57
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
58
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
59
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
60
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
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
|
|
|
61
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
Recognized amounts of identifiable assets acquired and liabilities assumed (in millions):
|
Purchase Price Allocation
|
||
Cash and cash equivalents
|
$
|
73.8
|
|
Accounts receivable
|
89.4
|
|
|
Inventories
|
77.1
|
|
|
Other current assets
|
13.7
|
|
|
Property, plant and equipment
|
189.4
|
|
|
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
|
(66.0
|
)
|
|
Other noncurrent liabilities
|
(21.9
|
)
|
|
Total identifiable net assets
|
195.1
|
|
|
Goodwill
|
352.7
|
|
|
Total fair value of business combination
|
$
|
547.8
|
|
|
62
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
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
|
•
|
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; and
|
•
|
Adjustment to remove the gain from the remeasurement of the previously held
35%
equity interest in Produquímica
|
|
|
2018
|
|
2017
|
||||
Finished goods
|
|
$
|
202.2
|
|
|
$
|
208.4
|
|
Raw materials and supplies
|
|
64.4
|
|
|
81.5
|
|
||
Total inventories
|
|
$
|
266.6
|
|
|
$
|
289.9
|
|
|
|
2018
|
|
2017
|
||||
Land, buildings and structures and leasehold improvements
|
|
$
|
580.7
|
|
|
$
|
552.5
|
|
Machinery and equipment
|
|
983.2
|
|
|
942.3
|
|
||
Office furniture and equipment
|
|
54.4
|
|
|
53.1
|
|
||
Mineral interests
|
|
168.1
|
|
|
173.1
|
|
||
Construction in progress
|
|
118.3
|
|
|
213.4
|
|
||
|
|
1,904.7
|
|
|
1,934.4
|
|
||
Less accumulated depreciation and depletion
|
|
(852.7
|
)
|
|
(796.3
|
)
|
||
Property, plant and equipment, net
|
|
$
|
1,052.0
|
|
|
$
|
1,138.1
|
|
|
63
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
Supply Agreement
|
SOP Production Rights
|
Customer/Distributor Relationships
|
Lease Rights
|
Trade Names
|
Developed Technologies
|
Patents
|
Other
|
Total
|
||||||||||||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Gross intangible asset
|
$
|
26.6
|
|
$
|
24.3
|
|
$
|
12.5
|
|
$
|
1.6
|
|
$
|
37.5
|
|
$
|
33.8
|
|
$
|
15.1
|
|
$
|
1.3
|
|
$
|
152.7
|
|
Accumulated amortization
|
(4.3
|
)
|
(14.7
|
)
|
(4.9
|
)
|
(0.4
|
)
|
(7.6
|
)
|
(16.1
|
)
|
(6.3
|
)
|
(0.7
|
)
|
(55.0
|
)
|
|||||||||
Net intangible assets
|
$
|
22.3
|
|
$
|
9.6
|
|
$
|
7.6
|
|
$
|
1.2
|
|
$
|
29.9
|
|
$
|
17.7
|
|
$
|
8.8
|
|
$
|
0.6
|
|
$
|
97.7
|
|
|
Supply Agreement
|
SOP Production Rights
|
Customer/Distributor Relationships
|
Lease Rights
|
Trade Names
|
Developed Technologies
|
Patents
|
Other
|
Total
|
||||||||||||||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Gross intangible asset
|
$
|
28.9
|
|
$
|
24.3
|
|
$
|
14.1
|
|
$
|
1.8
|
|
$
|
43.3
|
|
$
|
39.3
|
|
$
|
16.5
|
|
$
|
1.4
|
|
$
|
169.6
|
|
Accumulated amortization
|
(4.0
|
)
|
(13.7
|
)
|
(4.3
|
)
|
(0.4
|
)
|
(4.8
|
)
|
(11.0
|
)
|
(5.5
|
)
|
(0.6
|
)
|
(44.3
|
)
|
|||||||||
Net intangible assets
|
$
|
24.9
|
|
$
|
10.6
|
|
$
|
9.8
|
|
$
|
1.4
|
|
$
|
38.5
|
|
$
|
28.3
|
|
$
|
11.0
|
|
$
|
0.8
|
|
$
|
125.3
|
|
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
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Current:
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
8.1
|
|
|
$
|
0.5
|
|
|
$
|
27.6
|
|
State
|
|
4.3
|
|
|
(9.8
|
)
|
|
6.7
|
|
|||
Foreign
|
|
13.1
|
|
|
85.8
|
|
|
11.6
|
|
|||
Total current
|
|
25.5
|
|
|
76.5
|
|
|
45.9
|
|
|||
Deferred:
|
|
|
|
|
|
|
|
|
|
|||
Federal
|
|
(8.6
|
)
|
|
(4.4
|
)
|
|
(2.8
|
)
|
|||
State
|
|
(0.5
|
)
|
|
(0.5
|
)
|
|
(0.7
|
)
|
|||
Foreign
|
|
(7.6
|
)
|
|
(11.6
|
)
|
|
(7.8
|
)
|
|||
Total deferred
|
|
(16.7
|
)
|
|
(16.5
|
)
|
|
(11.3
|
)
|
|||
Total provision for income taxes
|
|
$
|
8.8
|
|
|
$
|
60.0
|
|
|
$
|
34.6
|
|
|
64
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Domestic (loss) income
|
|
$
|
(80.6
|
)
|
|
$
|
(41.2
|
)
|
|
$
|
123.6
|
|
Foreign income
|
|
158.2
|
|
|
143.9
|
|
|
73.7
|
|
|||
Earnings before income taxes
|
|
$
|
77.6
|
|
|
$
|
102.7
|
|
|
$
|
197.3
|
|
Computed tax at the U.S. federal statutory rate of 21% in 2018, 32.7% in 2017 and 35% in 2016
|
|
16.3
|
|
|
33.6
|
|
|
69.1
|
|
|||
Foreign income rate differential, mining, and withholding taxes, net of U.S. federal deduction
|
|
0.9
|
|
|
1.6
|
|
|
(1.7
|
)
|
|||
Percentage depletion in excess of basis
|
|
(4.7
|
)
|
|
(6.4
|
)
|
|
(8.6
|
)
|
|||
Other domestic tax reserves, net of reversals
|
|
1.5
|
|
|
—
|
|
|
—
|
|
|||
Domestic manufacturers deduction
|
|
—
|
|
|
—
|
|
|
(1.4
|
)
|
|||
State income taxes, net of federal income tax benefit
|
|
2.1
|
|
|
0.8
|
|
|
3.9
|
|
|||
Change in valuation allowance on deferred tax asset
|
|
(5.7
|
)
|
|
(23.9
|
)
|
|
(1.4
|
)
|
|||
Interest expense recognition differences
|
|
(3.6
|
)
|
|
(5.6
|
)
|
|
(5.9
|
)
|
|||
Nontaxable remeasurement gain
|
|
—
|
|
|
—
|
|
|
(20.2
|
)
|
|||
Tax Cuts and Jobs Act of 2017
|
|
(3.0
|
)
|
|
46.8
|
|
|
—
|
|
|||
Tax on repatriated amounts
|
|
3.4
|
|
|
—
|
|
|
—
|
|
|||
Transfer pricing settlement with taxing authorities
|
|
2.2
|
|
|
13.8
|
|
|
—
|
|
|||
Other, net
|
|
(0.6
|
)
|
|
(0.7
|
)
|
|
0.8
|
|
|||
Provision for income taxes
|
|
$
|
8.8
|
|
|
$
|
60.0
|
|
|
$
|
34.6
|
|
Effective tax rate
|
|
11
|
%
|
|
58
|
%
|
|
18
|
%
|
|
65
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
|
2018
|
|
2017
|
||||
Deferred tax assets:
|
|
|
|
|
|
|
||
Reluz Nordeste Indústria e Comércio Ltda net operating loss carryforwards
|
|
$
|
0.6
|
|
|
$
|
0.8
|
|
Produquímica Indústria e Comércio S.A. net operating loss carryforwards
|
|
7.0
|
|
|
12.9
|
|
||
Other, net
|
|
6.8
|
|
|
8.0
|
|
||
Total deferred tax assets before valuation allowance
|
|
14.4
|
|
|
21.7
|
|
||
Valuation allowance
|
|
(0.6
|
)
|
|
(9.0
|
)
|
||
Total noncurrent deferred tax assets:
|
|
$
|
13.8
|
|
|
$
|
12.7
|
|
|
|
|
|
|
||||
Deferred tax assets to be netted with deferred tax liabilities:
|
|
|
|
|
||||
Net operating loss carryforwards
|
|
$
|
2.1
|
|
|
$
|
2.3
|
|
Stock-based compensation
|
|
2.9
|
|
|
2.7
|
|
||
Other, net
|
|
12.1
|
|
|
9.3
|
|
||
Total deferred tax assets before valuation allowance
|
|
17.1
|
|
|
14.3
|
|
||
Valuation allowance
|
|
(2.9
|
)
|
|
(1.2
|
)
|
||
Total deferred tax assets to be netted with deferred tax liabilities
|
|
14.2
|
|
|
13.1
|
|
||
Deferred tax liabilities:
|
|
|
|
|
|
|
||
Property, plant and equipment
|
|
82.3
|
|
|
98.1
|
|
||
Intangible asset
|
|
32.7
|
|
|
42.0
|
|
||
Total deferred tax liabilities
|
|
115.0
|
|
|
140.1
|
|
||
Net deferred tax liabilities
|
|
$
|
100.8
|
|
|
$
|
127.0
|
|
|
66
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Unrecognized tax benefits:
|
|
|
|
|
|
|
||||||
Balance at January 1
|
|
$
|
67.4
|
|
|
$
|
20.7
|
|
|
$
|
18.3
|
|
Additions resulting from current year tax positions
|
|
8.0
|
|
|
1.3
|
|
|
0.1
|
|
|||
Additions relating to tax positions taken in prior years
|
|
2.6
|
|
|
51.7
|
|
|
0.5
|
|
|||
Additions relating to current year acquisitions
|
|
—
|
|
|
—
|
|
|
2.4
|
|
|||
Reductions due to settlements
|
|
(25.0
|
)
|
|
(4.5
|
)
|
|
—
|
|
|||
Reductions relating to tax positions taken in prior years
|
|
(0.3
|
)
|
|
(1.4
|
)
|
|
—
|
|
|||
Reductions due to expiration of tax years
|
|
(1.8
|
)
|
|
(0.4
|
)
|
|
(0.6
|
)
|
|||
Balance at December 31
|
|
$
|
50.9
|
|
|
$
|
67.4
|
|
|
$
|
20.7
|
|
|
67
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
|
Plan Assets at December 31,
|
||||
Asset Category
|
|
2018
|
|
2017
|
||
Cash and cash equivalents
|
|
3
|
%
|
|
3
|
%
|
Blended funds
|
|
32
|
%
|
|
32
|
%
|
Bond funds
|
|
45
|
%
|
|
45
|
%
|
Insurance policy
|
|
20
|
%
|
|
20
|
%
|
Total
|
|
100
|
%
|
|
100
|
%
|
|
|
Market Value at December 31, 2018
|
|
Level One
|
|
Level Two
|
|
Level Three
|
||||||||
Asset category:
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
(a)
|
|
$
|
1.9
|
|
|
$
|
1.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Blended funds
(b)
|
|
19.6
|
|
|
—
|
|
|
19.6
|
|
|
—
|
|
||||
Bond funds
(c)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Treasuries
|
|
27.3
|
|
|
—
|
|
|
27.3
|
|
|
—
|
|
||||
Insurance policy
(d)
|
|
11.9
|
|
|
—
|
|
|
—
|
|
|
11.9
|
|
||||
Total Pension Assets
|
|
$
|
60.7
|
|
|
$
|
1.9
|
|
|
$
|
46.9
|
|
|
$
|
11.9
|
|
|
68
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
|
Market Value at December 31, 2017
|
|
Level One
|
|
Level Two
|
|
Level Three
|
||||||||
Asset category:
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
(a)
|
|
$
|
2.2
|
|
|
$
|
2.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Blended funds
(b)
|
|
22.3
|
|
|
—
|
|
|
22.3
|
|
|
—
|
|
||||
Bond funds
(c)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Treasuries
|
|
31.2
|
|
|
—
|
|
|
31.2
|
|
|
—
|
|
||||
Insurance policy
(d)
|
|
13.4
|
|
|
—
|
|
|
—
|
|
|
13.4
|
|
||||
Total Pension Assets
|
|
$
|
69.1
|
|
|
$
|
2.2
|
|
|
$
|
53.5
|
|
|
$
|
13.4
|
|
(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, 2018
and
2017
.
|
(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.
|
|
|
Value of Insurance Policy
|
||
Beginning balance as of January 1, 2017
|
|
$
|
11.9
|
|
Unrealized gain
|
|
0.3
|
|
|
Currency fluctuation adjustment
|
|
1.2
|
|
|
Ending balance as of December 31, 2017
|
|
$
|
13.4
|
|
Unrealized loss
|
|
(0.8
|
)
|
|
Currency fluctuation adjustment
|
|
(0.7
|
)
|
|
Ending balance as of December 31, 2018
|
|
$
|
11.9
|
|
|
|
2018
|
|
2017
|
|
2016
|
|||
Discount rate
|
|
2.90
|
%
|
|
2.80
|
%
|
|
3.80
|
%
|
Expected return on plan assets
|
|
3.70
|
%
|
|
3.70
|
%
|
|
4.50
|
%
|
|
69
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
|
2018
|
|
2017
|
||||
Change in benefit obligation:
|
|
|
|
|
||||
Benefit obligation as of January 1
|
|
$
|
67.0
|
|
|
$
|
61.7
|
|
Interest cost
|
|
1.6
|
|
|
1.8
|
|
||
Actuarial (gain) loss
|
|
(3.7
|
)
|
|
0.2
|
|
||
Plan amendment
|
|
0.3
|
|
|
—
|
|
||
Benefits paid
|
|
(2.9
|
)
|
|
(2.6
|
)
|
||
Currency fluctuation adjustment
|
|
(3.7
|
)
|
|
5.9
|
|
||
Benefit obligation as of December 31
|
|
58.6
|
|
|
67.0
|
|
||
Change in plan assets:
|
|
|
|
|
|
|
||
Fair value as of January 1
|
|
69.1
|
|
|
62.3
|
|
||
Actual return
|
|
(2.3
|
)
|
|
2.7
|
|
||
Company contributions
|
|
0.7
|
|
|
0.8
|
|
||
Currency fluctuation adjustment
|
|
(3.9
|
)
|
|
5.9
|
|
||
Benefits paid
|
|
(2.9
|
)
|
|
(2.6
|
)
|
||
Fair value of plan assets as of December 31
|
|
60.7
|
|
|
69.1
|
|
||
Overfunded status of the plan
|
|
$
|
2.1
|
|
|
$
|
2.1
|
|
|
70
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Interest cost on projected benefit obligation
|
|
$
|
1.6
|
|
|
$
|
1.8
|
|
|
$
|
2.3
|
|
Prior service cost
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|||
Expected return on plan assets
|
|
(2.5
|
)
|
|
(2.4
|
)
|
|
(2.8
|
)
|
|||
Net amortization
|
|
0.3
|
|
|
0.4
|
|
|
0.4
|
|
|||
Net pension benefit
|
|
$
|
(0.7
|
)
|
|
$
|
(0.3
|
)
|
|
$
|
(0.2
|
)
|
|
71
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
|
2018
|
|
2017
|
||||
Term Loans due July 2021
|
|
$
|
828.9
|
|
|
$
|
837.4
|
|
Revolving Credit Facility due July 2021
|
|
197.0
|
|
|
168.9
|
|
||
4.875% Senior Notes due July 2024
|
|
250.0
|
|
|
250.0
|
|
||
Banco Rabobank Loan due November 2019
|
|
18.1
|
|
|
21.1
|
|
||
Banco Itaú Loans due May 2019 to April 2020
|
|
0.8
|
|
|
1.9
|
|
||
Financiadora de Estudos e Projetos Loan due November 2023
|
|
9.3
|
|
|
13.1
|
|
||
Banco do Brasil Loan due February 2018
|
|
—
|
|
|
0.2
|
|
||
Banco Santander Loan due September 2019
|
|
—
|
|
|
19.6
|
|
||
Banco Santander Loan due November 2019
|
|
—
|
|
|
24.1
|
|
||
Banco Itaú Loan due March 2019
|
|
2.5
|
|
|
12.4
|
|
||
Banco Scotiabank Loan due September 2019
|
|
10.3
|
|
|
20.5
|
|
||
3.7% Banco Itaú loan due March 2020
|
|
15.4
|
|
|
—
|
|
||
Banco Santander loan due September 2020
|
|
20.6
|
|
|
—
|
|
||
Banco Santander loan due October 2020
|
|
16.8
|
|
|
—
|
|
||
Other
|
|
1.7
|
|
|
—
|
|
||
|
|
1,371.4
|
|
|
1,369.2
|
|
||
Less unamortized debt issuance costs
|
|
(6.7
|
)
|
|
(6.7
|
)
|
||
Total debt
|
|
1,364.7
|
|
|
1,362.5
|
|
||
Less current portion
|
|
(43.5
|
)
|
|
(32.1
|
)
|
||
Long-term debt
|
|
$
|
1,321.2
|
|
|
$
|
1,330.4
|
|
|
72
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
Debt Maturity
|
||
2019
|
$
|
43.7
|
|
2020
|
63.3
|
|
|
2021
|
1,010.8
|
|
|
2022
|
1.9
|
|
|
2023
|
1.7
|
|
|
Thereafter
|
250.0
|
|
|
Total
|
$
|
1,371.4
|
|
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||
Derivatives designated as hedging instruments:
|
|
Balance Sheet Location
|
|
December 31, 2018
|
|
Balance Sheet Location
|
|
December 31, 2018
|
||||
Commodity contracts
|
|
Other current assets
|
|
$
|
—
|
|
|
Accrued expenses
|
|
$
|
0.6
|
|
Swap contracts
|
|
Other current assets
|
|
2.2
|
|
|
Accrued expenses
|
|
—
|
|
||
Swap contracts
|
|
Other assets
|
|
2.3
|
|
|
Other noncurrent liabilities
|
|
—
|
|
||
Total derivatives designated as hedging instruments
(a)(b)
|
|
|
|
$
|
4.5
|
|
|
|
|
$
|
0.6
|
|
(a)
|
The Company has master netting agreements with its commodity hedge counterparties and accordingly has netted in its Consolidated Balance Sheets less than
$0.1 million
of its commodity contracts that are in a receivable position against its contracts in payable positions.
|
(b)
|
The Company has both commodity hedge and foreign currency swap agreements with
two
counterparties each. Amounts recorded as liabilities for the Company’s commodity contracts are payable to both counterparties, and amounts recorded as assets for the Company’s swap contracts are receivable from both counterparties.
|
|
73
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||
Derivatives designated as hedging instruments:
|
|
Balance Sheet Location
|
|
December 31, 2017
|
|
Balance Sheet Location
|
|
December 31, 2017
|
||||
Commodity contracts
|
|
Other current assets
|
|
$
|
—
|
|
|
Accrued expenses
|
|
$
|
1.0
|
|
Commodity contracts
|
|
Other assets
|
|
—
|
|
|
Other noncurrent liabilities
|
|
0.4
|
|
||
Swap contracts
|
|
Other current assets
|
|
0.9
|
|
|
Accrued expenses
|
|
—
|
|
||
Swap contracts
|
|
Other assets
|
|
0.4
|
|
|
Other noncurrent liabilities
|
|
—
|
|
||
Total derivatives designated as hedging instruments
(a)(b)
|
|
|
|
$
|
1.3
|
|
|
|
|
$
|
1.4
|
|
(a)
|
The Company has master netting agreements with its commodity hedge counterparties and accordingly has netted in its Consolidated Balance Sheets less than
$0.1 million
of its commodity contracts that are in a receivable position against its contracts in payable positions.
|
(b)
|
The Company has both commodity hedge and foreign currency swap agreements with
two
counterparties each. Amounts recorded as liabilities for the Company’s commodity contracts are payable to both counterparties, and amounts recorded as assets for the Company’s swap contracts are receivable from both counterparties.
|
|
|
|
|
Twelve Months Ended December 31, 2018
|
||||||
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
|
|
$
|
(0.7
|
)
|
|
$
|
(0.2
|
)
|
Swap contracts
|
|
Interest expense
|
|
(2.6
|
)
|
|
3.0
|
|
||
Total
|
|
|
|
$
|
(3.3
|
)
|
|
$
|
2.8
|
|
|
|
|
|
Twelve Months Ended December 31, 2017
|
||||||
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
|
|
$
|
3.0
|
|
|
$
|
(0.6
|
)
|
Swap contracts
|
|
Interest expense
|
|
(1.9
|
)
|
|
1.9
|
|
||
Total
|
|
|
|
$
|
1.1
|
|
|
$
|
1.3
|
|
|
74
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
Operating Leases
|
||
2019
|
$
|
16.4
|
|
2020
|
10.6
|
|
|
2021
|
5.7
|
|
|
2022
|
4.4
|
|
|
2023
|
3.6
|
|
|
Thereafter
|
14.3
|
|
|
Total
|
$
|
55.0
|
|
|
Capital Leases
|
||
2019
|
$
|
2.3
|
|
2020
|
1.8
|
|
|
2021
|
1.3
|
|
|
2022
|
1.1
|
|
|
2023
|
1.1
|
|
|
Thereafter
|
4.6
|
|
|
Total
|
$
|
12.2
|
|
|
75
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Fair value of options granted
|
|
$
|
8.77
|
|
|
$
|
9.54
|
|
|
$
|
10.17
|
|
Expected term (years)
|
|
4.5
|
|
|
4.5
|
|
|
4.5
|
|
|||
Expected volatility
|
|
22.9
|
%
|
|
23.2
|
%
|
|
24.4
|
%
|
|||
Dividend yield
|
|
3.6
|
%
|
|
3.5
|
%
|
|
3.3
|
%
|
|||
Risk-free interest rates
|
|
2.5
|
%
|
|
1.8
|
%
|
|
1.2
|
%
|
|
76
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
|
Stock Options
|
|
RSUs
|
|
PSUs
|
|||||||||||||||
|
|
Number
|
|
Weighted-average exercise price
|
|
Number
|
|
Weighted-average fair value
|
|
Number
|
|
Weighted-average fair value
|
|||||||||
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
|
|
(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
|
|
Granted
|
|
227,351
|
|
|
68.00
|
|
|
34,635
|
|
|
68.00
|
|
|
58,878
|
|
|
73.08
|
|
|||
Exercised
(a)
|
|
(3,366
|
)
|
|
76.03
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Released from restriction
(a)
|
|
—
|
|
|
—
|
|
|
(15,806
|
)
|
|
84.77
|
|
|
(12,946
|
)
|
|
105.77
|
|
|||
Cancelled/Expired
|
|
(103,863
|
)
|
|
76.44
|
|
|
(11,753
|
)
|
|
71.96
|
|
|
(22,907
|
)
|
|
86.81
|
|
|||
Outstanding at
December 31, 2017
|
|
562,877
|
|
|
$
|
75.89
|
|
|
70,856
|
|
|
$
|
74.63
|
|
|
112,036
|
|
|
$
|
79.48
|
|
Granted
|
|
250,514
|
|
|
59.61
|
|
|
42,013
|
|
|
60.28
|
|
|
67,235
|
|
|
64.30
|
|
|||
Exercised
(a)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Released from restriction
(a)
|
|
—
|
|
|
—
|
|
|
(16,905
|
)
|
|
88.78
|
|
|
(2,753
|
)
|
|
78.92
|
|
|||
Cancelled/Expired
|
|
(104,645
|
)
|
|
71.65
|
|
|
(12,656
|
)
|
|
66.53
|
|
|
(49,880
|
)
|
|
85.51
|
|
|||
Outstanding at
December 31, 2018
|
|
708,746
|
|
|
$
|
70.76
|
|
|
83,308
|
|
|
$
|
65.75
|
|
|
126,638
|
|
|
$
|
69.06
|
|
(a)
|
Common stock issued for exercised options, vested RSUs and vested and earned PSUs were issued from treasury shares.
|
|
|
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
|
||||||
$59.50 - $63.75
|
|
221,255
|
|
|
6.3
|
|
$
|
59.50
|
|
|
61,809
|
|
|
6.3
|
|
$
|
59.50
|
|
$63.76 - $68.53
|
|
163,599
|
|
|
5.1
|
|
68.00
|
|
|
90,730
|
|
|
5.0
|
|
68.00
|
|
||
$68.54 - $71.09
|
|
104,807
|
|
|
4.1
|
|
70.44
|
|
|
80,971
|
|
|
4.0
|
|
70.48
|
|
||
$71.10 - $82.09
|
|
83,457
|
|
|
1.0
|
|
75.64
|
|
|
83,457
|
|
|
1.0
|
|
75.64
|
|
||
$82.10 - $91.75
|
|
135,628
|
|
|
2.7
|
|
89.71
|
|
|
129,827
|
|
|
2.7
|
|
89.61
|
|
||
Totals
|
|
708,746
|
|
|
4.4
|
|
$
|
70.76
|
|
|
446,794
|
|
|
3.6
|
|
$
|
74.98
|
|
|
77
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
Twelve Months Ended December 31, 2018
(a)
|
|
Gains and (Losses) on Cash Flow Hedges
|
|
Defined Benefit Pension
|
|
Foreign Currency
|
|
Total
|
||||||||
Beginning balance
|
|
$
|
(0.9
|
)
|
|
$
|
(3.9
|
)
|
|
$
|
(73.1
|
)
|
|
$
|
(77.9
|
)
|
Other comprehensive income (loss) before reclassifications
|
|
2.2
|
|
|
(0.8
|
)
|
|
(132.6
|
)
|
|
(131.2
|
)
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
|
(1.8
|
)
|
|
0.2
|
|
|
—
|
|
|
(1.6
|
)
|
||||
Net current period other comprehensive income (loss)
|
|
0.4
|
|
|
(0.6
|
)
|
|
(132.6
|
)
|
|
(132.8
|
)
|
||||
Reclassification of stranded tax out of AOCI to retained earnings
(b)
|
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
||||
Ending balance
|
|
$
|
(0.7
|
)
|
|
$
|
(4.5
|
)
|
|
$
|
(205.7
|
)
|
|
$
|
(210.9
|
)
|
Twelve Months Ended December 31, 2017
(a)
|
|
Gains and (Losses) on Cash Flow Hedges
|
|
Defined Benefit Pension
|
|
Foreign Currency
|
|
Total
|
||||||||
Beginning balance
|
|
$
|
0.6
|
|
|
$
|
(3.7
|
)
|
|
$
|
(101.8
|
)
|
|
$
|
(104.9
|
)
|
Other comprehensive income (loss) before reclassifications
|
|
(0.6
|
)
|
|
(0.4
|
)
|
|
28.7
|
|
|
27.7
|
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
|
(0.9
|
)
|
|
0.2
|
|
|
—
|
|
|
(0.7
|
)
|
||||
Net current period other comprehensive (loss) income
|
|
(1.5
|
)
|
|
(0.2
|
)
|
|
28.7
|
|
|
27.0
|
|
||||
Ending balance
|
|
$
|
(0.9
|
)
|
|
$
|
(3.9
|
)
|
|
$
|
(73.1
|
)
|
|
$
|
(77.9
|
)
|
(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.
|
(b)
|
In the first quarter of 2018, the Company adopted guidance which allows entities to reclassify tax effects of the change in U.S. income tax rates from AOCI to retained earnings (see Note 2).
|
Twelve Months Ended December 31, 2018
|
|
Amount Reclassified from AOCI
|
|
Line Item Impacted in the Consolidated Statement of Operations
|
||
Gains and (losses) on cash flow hedges:
|
|
|
|
|
||
Natural gas instruments
|
|
$
|
0.2
|
|
|
Product cost
|
Foreign currency swaps
|
|
(3.0
|
)
|
|
Interest expense
|
|
Income tax expense (benefit)
|
|
1.0
|
|
|
|
|
|
|
(1.8
|
)
|
|
|
|
Amortization of defined benefit pension:
|
|
|
|
|
|
|
Amortization of loss
|
|
$
|
0.2
|
|
|
Product cost
|
Income tax expense (benefit)
|
|
—
|
|
|
|
|
|
|
0.2
|
|
|
|
|
Total reclassifications, net of income taxes
|
|
$
|
(1.6
|
)
|
|
|
|
78
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
Twelve Months Ended December 31, 2017
|
|
Amount Reclassified from AOCI
|
|
Line Item Impacted in the Consolidated Statement of Operations
|
||
Gains and (losses) on cash flow hedges:
|
|
|
|
|
||
Natural gas instruments
|
|
$
|
0.6
|
|
|
Product cost
|
Foreign currency swaps
|
|
(1.9
|
)
|
|
Interest Expense
|
|
Income tax expense (benefit)
|
|
0.4
|
|
|
|
|
|
|
(0.9
|
)
|
|
|
|
Amortization of defined benefit pension:
|
|
|
|
|
|
|
Amortization of loss
|
|
$
|
0.3
|
|
|
Product cost
|
Income tax expense (benefit)
|
|
(0.1
|
)
|
|
|
|
|
|
0.2
|
|
|
|
|
Total reclassifications, net of income taxes
|
|
$
|
(0.7
|
)
|
|
|
|
|
December 31, 2018
|
|
Level One
|
|
Level Two
|
|
Level Three
|
||||||||
Asset Class:
|
|
|
|
|
|
|
|
|
||||||||
Mutual fund investments in a non-qualified savings plan
(a)
|
|
$
|
1.8
|
|
|
$
|
1.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Derivatives - foreign currency swaps, net
|
|
4.5
|
|
|
—
|
|
|
4.5
|
|
|
—
|
|
||||
Total Assets
|
|
$
|
6.3
|
|
|
$
|
1.8
|
|
|
$
|
4.5
|
|
|
$
|
—
|
|
Liability Class:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Liabilities related to non-qualified savings plan
|
|
$
|
(1.8
|
)
|
|
$
|
(1.8
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Derivatives – natural gas instruments
|
|
(0.6
|
)
|
|
—
|
|
|
(0.6
|
)
|
|
—
|
|
||||
Total Liabilities
|
|
$
|
(2.4
|
)
|
|
$
|
(1.8
|
)
|
|
$
|
(0.6
|
)
|
|
$
|
—
|
|
(a)
|
Includes mutual fund investments of approximately
25%
in the common stock of large-cap U.S. companies,
15%
in the common stock of small to mid-cap U.S. companies,
5%
in the common stock of international companies,
20%
in bond funds,
15%
in short-term investments and
20%
in blended funds.
|
|
|
December 31, 2017
|
|
Level One
|
|
Level Two
|
|
Level Three
|
||||||||
Asset Class:
|
|
|
|
|
|
|
|
|
||||||||
Mutual fund investments in a non-qualified savings plan
(a)
|
|
$
|
2.2
|
|
|
$
|
2.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Derivatives - foreign currency swaps, net
|
|
1.3
|
|
|
—
|
|
|
1.3
|
|
|
—
|
|
||||
Total Assets
|
|
$
|
3.5
|
|
|
$
|
2.2
|
|
|
$
|
1.3
|
|
|
$
|
—
|
|
Liability Class:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Liabilities related to non-qualified savings plan
|
|
$
|
(2.2
|
)
|
|
$
|
(2.2
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Derivatives - natural gas instruments
|
|
(1.4
|
)
|
|
—
|
|
|
(1.4
|
)
|
|
—
|
|
||||
Total Liabilities
|
|
$
|
(3.6
|
)
|
|
$
|
(2.2
|
)
|
|
$
|
(1.4
|
)
|
|
$
|
—
|
|
(a)
|
Includes mutual fund investments of approximately
30%
in the common stock of large-cap U.S. companies,
15%
in the common stock of small to mid-cap U.S. companies,
5%
in the common stock of international companies,
10%
in bond funds,
20%
in short-term investments and
20%
in blended funds.
|
|
79
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
2018
|
|
Salt
|
|
Plant Nutrition North America
|
|
Plant Nutrition South America
|
|
Corporate& Other
(a)
|
|
Total
|
||||||||||
Sales to external customers
|
|
$
|
858.1
|
|
|
$
|
233.2
|
|
|
$
|
391.8
|
|
|
$
|
10.5
|
|
|
$
|
1,493.6
|
|
Intersegment sales
|
|
—
|
|
|
5.6
|
|
|
3.4
|
|
|
(9.0
|
)
|
|
—
|
|
|||||
Shipping and handling cost
|
|
272.4
|
|
|
29.0
|
|
|
18.6
|
|
|
—
|
|
|
320.0
|
|
|||||
Operating earnings (loss)
(b)
|
|
115.7
|
|
|
25.3
|
|
|
48.7
|
|
|
(59.4
|
)
|
|
130.3
|
|
|||||
Depreciation, depletion and amortization
|
|
56.2
|
|
|
48.6
|
|
|
22.2
|
|
|
9.9
|
|
|
136.9
|
|
|||||
Total assets
|
|
948.9
|
|
|
589.3
|
|
|
709.9
|
|
|
119.8
|
|
|
2,367.9
|
|
|||||
Capital expenditures
|
|
58.7
|
|
|
20.7
|
|
|
10.1
|
|
|
7.3
|
|
|
96.8
|
|
2017
|
|
Salt
|
|
Plant Nutrition North America
|
|
Plant Nutrition South America
|
|
Corporate& Other
(a)
|
|
Total
|
||||||||||
Sales to external customers
|
|
$
|
769.2
|
|
|
$
|
210.0
|
|
|
$
|
375.0
|
|
|
$
|
10.2
|
|
|
$
|
1,364.4
|
|
Intersegment sales
|
|
—
|
|
|
6.5
|
|
|
—
|
|
|
(6.5
|
)
|
|
—
|
|
|||||
Shipping and handling cost
|
|
220.6
|
|
|
28.1
|
|
|
18.8
|
|
|
—
|
|
|
267.5
|
|
|||||
Operating earnings (loss)
(b)
|
|
138.0
|
|
|
27.7
|
|
|
49.1
|
|
|
(55.6
|
)
|
|
159.2
|
|
|||||
Depreciation, depletion and amortization
|
|
55.0
|
|
|
36.9
|
|
|
22.6
|
|
|
7.7
|
|
|
122.2
|
|
|||||
Total assets
|
|
1,030.6
|
|
|
601.1
|
|
|
808.0
|
|
|
131.3
|
|
|
2,571.0
|
|
|||||
Capital expenditures
|
|
65.8
|
|
|
31.9
|
|
|
11.3
|
|
|
5.1
|
|
|
114.1
|
|
|
80
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
2016
|
|
Salt
|
|
Plant Nutrition North America
|
|
Plant Nutrition South America
(c)
|
|
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
|
|
Twelve Months Ended December 31, 2018
|
|
Salt
|
|
Plant
Nutrition North America |
|
Plant Nutrition South America
|
|
Corporate & Other
(a)
|
|
Total
|
||||||||||
Highway Deicing Salt
|
|
$
|
532.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
532.0
|
|
Consumer & Industrial Salt
|
|
326.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
326.1
|
|
|||||
SOP and Specialty Plant Nutrients
|
|
—
|
|
|
238.8
|
|
|
300.2
|
|
|
—
|
|
|
539.0
|
|
|||||
Industrial Chemicals
|
|
—
|
|
|
—
|
|
|
95.0
|
|
|
—
|
|
|
95.0
|
|
|||||
Eliminations & Other
|
|
—
|
|
|
(5.6
|
)
|
|
(3.4
|
)
|
|
10.5
|
|
|
1.5
|
|
|||||
Sales to external customers
|
|
$
|
858.1
|
|
|
$
|
233.2
|
|
|
$
|
391.8
|
|
|
$
|
10.5
|
|
|
$
|
1,493.6
|
|
Twelve Months Ended December 31, 2017
|
|
Salt
|
|
Plant
Nutrition North America |
|
Plant
Nutrition South America |
|
Corporate
& Other (a) |
|
Total
|
||||||||||
Highway Deicing Salt
|
|
$
|
455.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
455.1
|
|
Consumer & Industrial Salt
|
|
314.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
314.1
|
|
|||||
SOP and Specialty Plant Nutrients
|
|
—
|
|
|
216.5
|
|
|
273.6
|
|
|
—
|
|
|
490.1
|
|
|||||
Industrial Chemicals
|
|
—
|
|
|
—
|
|
|
101.4
|
|
|
—
|
|
|
101.4
|
|
|||||
Eliminations & Other
|
|
—
|
|
|
(6.5
|
)
|
|
—
|
|
|
10.2
|
|
|
3.7
|
|
|||||
Sales to external customers
|
|
$
|
769.2
|
|
|
$
|
210.0
|
|
|
$
|
375.0
|
|
|
$
|
10.2
|
|
|
$
|
1,364.4
|
|
Twelve Months Ended December 31, 2016
|
|
Salt
|
|
Plant
Nutrition North America |
|
Plant Nutrition South America
(c)
|
|
Corporate
& Other (a) |
|
Total
|
||||||||||
Highway Deicing Salt
|
|
$
|
490.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
490.7
|
|
Consumer & Industrial Salt
|
|
321.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
321.2
|
|
|||||
SOP and Specialty Plant Nutrients
|
|
—
|
|
|
208.2
|
|
|
86.8
|
|
|
—
|
|
|
295.0
|
|
|||||
Industrial Chemicals
|
|
—
|
|
|
—
|
|
|
26.7
|
|
|
—
|
|
|
26.7
|
|
|||||
Eliminations & Other
|
|
—
|
|
|
(5.2
|
)
|
|
—
|
|
|
9.6
|
|
|
4.4
|
|
|||||
Sales to external customers
|
|
$
|
811.9
|
|
|
$
|
203.0
|
|
|
$
|
113.5
|
|
|
$
|
9.6
|
|
|
$
|
1,138.0
|
|
(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.
|
(b)
|
In 2018, corporate and other operating results included
$5.1 million
for Chief Executive Officer (“CEO”) transition costs. In 2017, operating results include
$4.3 million
of restructuring charges.
|
(c)
|
Plant Nutrition South America’s operating results only include results since October 3, 2016, the date of acquisition.
|
|
81
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
Sales
|
|
2018
|
|
2017
|
|
2016
|
||||||
United States
(a)
|
|
$
|
769.9
|
|
|
$
|
718.0
|
|
|
$
|
762.6
|
|
Canada
|
|
238.6
|
|
|
217.7
|
|
|
212.5
|
|
|||
Brazil
|
|
381.8
|
|
|
362.1
|
|
|
111.7
|
|
|||
United Kingdom
|
|
83.1
|
|
|
43.3
|
|
|
40.6
|
|
|||
Other
|
|
20.2
|
|
|
23.3
|
|
|
10.6
|
|
|||
Total sales
|
|
$
|
1,493.6
|
|
|
$
|
1,364.4
|
|
|
$
|
1,138.0
|
|
(a)
|
United States sales exclude product sold to foreign customers at U.S. ports.
|
Long-Lived Assets
|
|
2018
|
|
2017
|
|
2016
|
||||||
United States
|
|
$
|
551.6
|
|
|
$
|
618.5
|
|
|
$
|
568.5
|
|
Canada
|
|
497.4
|
|
|
515.9
|
|
|
461.5
|
|
|||
United Kingdom
|
|
62.5
|
|
|
69.9
|
|
|
66.8
|
|
|||
Brazil
|
|
524.8
|
|
|
618.4
|
|
|
645.8
|
|
|||
Other
|
|
6.5
|
|
|
6.5
|
|
|
6.5
|
|
|||
Total long-lived assets
|
|
$
|
1,642.8
|
|
|
$
|
1,829.2
|
|
|
$
|
1,749.1
|
|
Year ended December 31,
|
|
2018
|
|
2017
|
|
2016
|
||||||
Numerator:
|
|
|
|
|
|
|
||||||
Net earnings
|
|
$
|
68.8
|
|
|
$
|
42.7
|
|
|
$
|
162.7
|
|
Less: Net earnings allocated to participating securities
(a)
|
|
(0.5
|
)
|
|
(0.5
|
)
|
|
(0.8
|
)
|
|||
Net earnings available to common shareholders
|
|
$
|
68.3
|
|
|
$
|
42.2
|
|
|
$
|
161.9
|
|
Denominator (in thousands):
|
|
|
|
|
|
|
|
|
|
|||
Weighted average common shares outstanding, shares for basic earnings per share
(b)
|
|
33,848
|
|
|
33,819
|
|
|
33,776
|
|
|||
Weighted average equity awards outstanding
|
|
—
|
|
|
1
|
|
|
4
|
|
|||
Shares for diluted earnings per share
|
|
33,848
|
|
|
33,820
|
|
|
33,780
|
|
|||
Net earnings per common share, basic
|
|
$
|
2.02
|
|
|
$
|
1.25
|
|
|
$
|
4.79
|
|
Net earnings per common share, diluted
|
|
$
|
2.02
|
|
|
$
|
1.25
|
|
|
$
|
4.79
|
|
(a)
|
Participating securities include PSUs and RSUs that receive non-forfeitable dividends. Net earnings were allocated to participating securities of
186,000
,
166,000
and
164,000
for
2018
,
2017
and
2016
, 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
788,000
,
640,000
and
509,000
weighted options outstanding for
2018
,
2017
and
2016
, respectively, which were anti-dilutive and therefore not included in the diluted earnings per share calculation.
|
|
82
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
Quarter
|
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
||||||||
2018
|
|
|
|
|
|
|
|
|
||||||||
Sales
|
|
$
|
437.9
|
|
|
$
|
246.7
|
|
|
$
|
322.5
|
|
|
$
|
486.5
|
|
Gross profit
|
|
65.4
|
|
|
42.5
|
|
|
71.4
|
|
|
114.6
|
|
||||
Net earnings (loss)
(a)
|
|
12.6
|
|
|
(7.6
|
)
|
|
12.8
|
|
|
51.0
|
|
||||
Net earnings (loss) per share, basic
(a)
|
|
0.37
|
|
|
(0.23
|
)
|
|
0.37
|
|
|
1.50
|
|
||||
Net earnings (loss) per share, diluted
(a)
|
|
0.37
|
|
|
(0.23
|
)
|
|
0.37
|
|
|
1.50
|
|
||||
Basic weighted-average shares outstanding (in thousands)
|
|
33,836
|
|
|
33,850
|
|
|
33,851
|
|
|
33,853
|
|
||||
Diluted weighted-average shares outstanding (in thousands)
|
|
33,836
|
|
|
33,850
|
|
|
33,851
|
|
|
33,853
|
|
||||
2017
|
|
|
|
|
|
|
|
|
||||||||
Sales
|
|
$
|
387.8
|
|
|
$
|
228.0
|
|
|
$
|
290.7
|
|
|
$
|
457.9
|
|
Gross profit
|
|
81.6
|
|
|
44.9
|
|
|
76.1
|
|
|
124.0
|
|
||||
Net earnings (loss)
(a)
|
|
21.5
|
|
|
(6.4
|
)
|
|
32.0
|
|
|
(4.4
|
)
|
||||
Net earnings (loss) per share, basic
(a)
|
|
0.63
|
|
|
(0.19
|
)
|
|
0.94
|
|
|
(0.13
|
)
|
||||
Net earnings (loss) per share, diluted
(a)
|
|
0.63
|
|
|
(0.19
|
)
|
|
0.94
|
|
|
(0.13
|
)
|
||||
Basic weighted-average shares outstanding (in thousands)
|
|
33,802
|
|
|
33,823
|
|
|
33,825
|
|
|
33,828
|
|
||||
Diluted weighted-average shares outstanding (in thousands)
|
|
33,803
|
|
|
33,823
|
|
|
33,825
|
|
|
33,828
|
|
(a)
|
In the fourth quarter of 2018, the Company recorded
$5.1 million
(
$3.8 million
, net of tax) for CEO transition costs. Also, the Company had miscellaneous tax items that reduced income tax expense by
$6.8 million
in the fourth quarter of 2018. In connection with U.S. tax reform, the Company recorded a net charge of
$46.8 million
during the fourth quarter of 2017. The Company released
$18 million
and
$7 million
in the third and fourth quarters of 2017, respectively, related to Brazilian valuation allowances that were acquired in the acquisition of Produquímica. See Note 8 for a discussion of tax-related items that impacted 2017 and 2018 results.
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
|
83
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
|
84
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
ITEM 12.
|
SECURITY 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
|
|
85
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
ITEM 15.
|
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
|
Description
|
Page
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
||||||||
2018
|
|
$
|
10.9
|
|
|
$
|
1.0
|
|
|
$
|
(2.0
|
)
|
|
$
|
9.9
|
|
2017
|
|
9.0
|
|
|
3.2
|
|
|
(1.3
|
)
|
|
10.9
|
|
||||
2016
(2)
|
|
1.3
|
|
|
8.0
|
|
|
(0.3
|
)
|
|
9.0
|
|
||||
Deducted from Deferred Income Taxes — Valuation Allowance
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
2018
|
|
$
|
10.2
|
|
|
$
|
1.8
|
|
|
$
|
(8.5
|
)
|
|
$
|
3.5
|
|
2017
|
|
33.6
|
|
|
1.1
|
|
|
(24.5
|
)
|
|
10.2
|
|
||||
2016
(3)
|
|
0.9
|
|
|
34.3
|
|
|
(1.6
|
)
|
|
33.6
|
|
(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.
|
|
86
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
Exhibit
No.
|
Description of Exhibit
|
2.1
|
|
2.2
|
|
2.3
|
|
2.4
|
|
2.5
|
|
3.1
|
|
3.2
|
|
4.1
|
|
4.2
|
|
10.1
|
|
10.2
|
|
10.3
|
|
10.4
|
|
10.5
|
|
10.6
|
|
10.7
|
|
87
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
10.8
|
|
10.9
|
|
10.10+
|
|
10.11+
|
|
10.12+
|
|
10.13+
|
|
10.14+
|
|
10.15+
|
|
10.16+
|
|
10.17+
|
|
10.18+
|
|
10.19+
|
|
10.20+
|
|
10.21*+
|
|
10.22+
|
|
10.23+
|
|
10.24+
|
|
10.25+
|
|
10.26+
|
|
10.27+
|
|
10.28+
|
|
10.29+
|
|
10.30+
|
|
88
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
10.31+
|
|
10.32+
|
|
10.33+
|
|
10.34+
|
|
10.35+
|
|
10.36+
|
|
10.37+
|
|
10.38+
|
|
10.39+
|
|
10.40+
|
|
10.41+
|
|
10.42+
|
|
10.43+
|
|
10.44+
|
|
10.45*+
|
|
10.46+
|
|
10.47+
|
|
10.48+
|
|
10.49+
|
|
10.50+
|
|
10.51+
|
|
10.52+
|
|
10.53+
|
|
10.54+
|
|
10.55+
|
|
89
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
10.56+
|
|
21.1*
|
|
23.1*
|
|
24.1*
|
|
31.1*
|
|
31.2*
|
|
32**
|
|
95*
|
|
101**
|
The following financial statements from the Compass Minerals International, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2018, formatted in Extensive Business Reporting Language (XBRL): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive (Loss) 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.
|
ITEM 16.
|
FORM 10-K SUMMARY
|
|
90
|
2018 FORM 10-K
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
|
COMPASS MINERALS INTERNATIONAL, INC.
|
|
|
|
|
|
|
Date: February 28, 2019
|
By:
|
/s/ James D. Standen
|
|
|
|
James D. Standen
|
|
|
|
Chief Financial Officer
|
|
|
Signature
|
|
Capacity
|
|
|
|
|
|
/s/ Richard S. Grant
|
|
Director, Chairman of the Board, Interim President and
|
|
Richard S. Grant
|
|
Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
/s/ James D. Standen
|
|
Chief Financial Officer
|
|
James D. Standen
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
|
|
*
|
|
Director
|
|
David J. D’Antoni
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
Valdemar L. Fischer
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
Eric Ford
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
Allan R. Rothwell
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
Lori A. Walker
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
Paul S. Williams
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
Amy J. Yoder
|
|
|
|
|
|
|
* By:
|
/s/ Diana C. Toman
|
|
|
|
Diana C. Toman
|
|
|
|
Attorney-in Fact
|
|
|
|
91
|
2018 FORM 10-K
|
|
Exhibit 10.21
|
A.
|
Cash Compensation
|
1.
|
Annual Retainer
. Each non-employee director will receive a $75,000 annual cash retainer for service on the Board.
|
2.
|
Committee Service Fee
. In addition, each non-employee director serving as a chair or member of any of the following Board committees will receive an annual cash fee for committee service, as follows:
|
3.
|
Most Tenured Independent Director
. In addition, the Most Tenured Independent Director will receive an annual cash fee of $25,000 for service as Most Tenured Independent Director until the Non-Executive Chairman of the Board assumes this role.
|
B.
|
Equity Compensation
.
|
1.
|
Annual Equity Award
. Each non-employee director will receive an equity award with an annual equity award value of $105,000 for service on the Board.
|
2.
|
Non-Executive Chairman of the Board
. In addition, the Non-Executive Chairman of the Board will receive an equity award with an annual equity award value of $55,000 for service as Non-Executive Chairman of the Board.
|
|
Exhibit 10.45
|
|
|
Exhibit 21.1
|
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.
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Compass Minerals América do Sul Indústria e Comércio S.A.
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Brazil
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Compass Minerals Canada Corp.
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Nova Scotia, Canada
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Compass Minerals Chile Limitada
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Chile
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Compass Minerals do Brasil Ltda.
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Brazil
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Compass Minerals International Limited Partnership
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Ontario, Canada
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Compass Minerals Louisiana Inc.
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Delaware, U.S.
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Compass Minerals Manitoba Inc.
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Manitoba, Canada
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Compass Minerals Nova Scotia Company
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Nova Scotia, Canada
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Compass Minerals Ogden Inc.
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Delaware, U.S.
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Compass Minerals South Africa Pty Ltd.
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South Africa
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Compass Minerals Storage & Archives Limited
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England and Wales
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Compass Minerals UK Holdings Limited
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England and Wales
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Compass Minerals UK Limited
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England and Wales
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Compass Minerals USA Inc.
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Delaware, U.S.
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Compass Minerals Wynyard Inc.
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Saskatchewan, Canada
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Compass Resources Canada Company
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Nova Scotia, Canada
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Compass South American Salt Holdings Ltd.
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Cayman Islands
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Curlew Valley Farms, LLC
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Utah, U.S.
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DeepStore Holdings Limited
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England and Wales
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DeepStore Limited
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England and Wales
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Dove Creek Grazing, LLC
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Utah, U.S.
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Great Salt Lake Holdings, LLC
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Delaware, U.S.
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GSL Corporation
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Delaware, U.S.
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Mixmicro Indústria e Comércio de Produtos Químicos Ltda.
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Brazil
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NAMSCO Inc.
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Delaware, U.S.
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NASC Nova Scotia Company
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Nova Scotia, Canada
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Reluz Nordeste Indústria e Comércio Ltda.
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Brazil
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Reluz Química Industrial Ltda.
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Brazil
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Salt Union Limited
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England and Wales
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Wolf Trax Europe Limited
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England and Wales
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Wolf Trax Holdings Inc.
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Delaware, U.S.
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Wolf Trax USA Inc.
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Delaware, U.S.
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Exhibit 23.1
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(1)
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Registration Statement (Form S-8 No. 333-119410) of Compass Minerals International, Inc. Directors’ Deferred Compensation Plan,
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(2)
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Registration Statement (Form S-8 No. 333-121965) of Compass Minerals International, Inc. Savings Plan,
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(3)
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Registration Statement (Form S-8 No. 333-127699) of Compass Minerals Inc. 2005 Incentive Award Plan and
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(4)
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Registration Statement (Form S-8 333-203922) of Compass Minerals Inc. 2015 Incentive Award Plan;
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/s/ Ernst & Young LLP
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February 28, 2019
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Kansas City, Missouri
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/s/ David J. D’Antoni
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David J. D’Antoni
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/s/ Valdemar L. Fischer
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Valdemar L. Fischer
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/s/ Eric Ford
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Eric Ford
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/s/ Allan R. Rothwell
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Allan R. Rothwell
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/s/ Lori A. Walker
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Lori A. Walker
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/s/ Paul S. Williams
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Paul S. Williams
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/s/ Amy J. Yoder
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Amy J. Yoder
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1.
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I have reviewed this annual report on Form 10-K of Compass Minerals International, Inc.;
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2.
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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;
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3.
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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;
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4.
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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:
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(a)
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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;
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(b)
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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;
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(c)
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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
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(d)
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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
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5.
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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):
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(a)
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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
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(b)
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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.
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Date: February 28, 2019
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/s/ Richard S. Grant
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Richard S. Grant
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Interim President and Chief Executive Officer
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1.
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I have reviewed this annual report on Form 10-K of Compass Minerals International, Inc.;
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2.
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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;
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3.
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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;
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4.
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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:
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(a)
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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;
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(b)
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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;
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(c)
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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
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(d)
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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
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5.
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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):
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(a)
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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
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(b)
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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.
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Date: February 28, 2019
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/s/ James D. Standen
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James D. Standen
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Chief Financial Officer
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COMPASS MINERALS INTERNATIONAL, INC.
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February 28, 2019
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/s/ Richard S. Grant
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Richard S. Grant
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Interim President and Chief Executive Officer
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/s/ James D. Standen
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James D. Standen
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Chief Financial Officer
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