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x
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Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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For the fiscal year ended December 31, 2011
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or
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¨
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Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Delaware
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26-1501877
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(State or other jurisdiction of
incorporation or organization) |
(I.R.S. Employer
Identification No.) |
707 17th Street, Suite 4200, Denver, Colorado
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80202
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(Address of principal executive offices)
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(Zip Code)
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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 $0.001 per share
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New York Stock Exchange
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Large accelerated filer
x
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Accelerated filer
¨
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Non‑accelerated filer
¨
(Do not check if a smaller reporting company) |
Smaller reporting company
¨
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Exhibits
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•
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“Moab,” “NM,” and “Wendover” refer to Intrepid Potash—Moab, LLC, Intrepid Potash—New Mexico, LLC, and Intrepid Potash—Wendover, LLC, respectively, our principal operating subsidiaries;
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•
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“tons” refers to short tons. One short ton equals 2,000 pounds. One metric tonne, which many of our international competitors use, equals 1,000 kilograms or 2,205 pounds.
|
•
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changes in the price of potash or Trio
®
;
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•
|
operational difficulties at our facilities that limit production of our products;
|
•
|
interruptions in rail or truck transportation services;
|
•
|
the ability to hire and retain qualified employees and contractors;
|
•
|
changes in demand and/or supply for potash or Trio
®
/langbeinite;
|
•
|
changes in our reserve estimates;
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•
|
the costs and our ability to successfully execute the projects that are essential to our business strategy, which includes construction and commissioning, including but not limited to, the development of the HB Solar Solution mine as a solution mine, the further development of our langbeinite recovery and granulation assets, and our North granulation plant;
|
•
|
adverse weather events at our facilities, including events affecting net evaporation rates at our solar solution mining operations;
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•
|
changes in the prices of raw materials, including but not limited to the price of chemicals, natural gas and power;
|
•
|
fluctuations in the costs of transporting our products to customers;
|
•
|
changes in labor costs and availability of labor with mining expertise;
|
•
|
the impact of federal, state or local government regulations, including but not limited to, environmental and mining regulations, and the enforcement of such regulations;
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•
|
obtaining permitting from applicable federal and state agencies related to the construction and operation of assets;
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•
|
competition in the fertilizer industry;
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•
|
declines in U.S. or world agricultural production;
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•
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declines in use by the oil and gas industry of potash products in drilling operations;
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•
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changes in economic conditions;
|
•
|
our ability to comply with covenants inherent in our current and future debt obligations to avoid defaulting under those agreements;
|
•
|
disruption in credit markets;
|
•
|
our ability to secure additional federal and state potash leases to expand our existing mining operations;
|
•
|
governmental policy changes that may adversely affect our business; and
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•
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the other risks and uncertainties detailed in the section entitled Item 1A. Risk Factors and elsewhere in this Annual Report on Form 10-K.
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ITEM 1.
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BUSINESS
|
|
|
Contribution from
|
||||
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Potash Sales
|
||||
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Net Sales
|
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Gross Margin
|
||
For the year ended December 31, 2011
|
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90
|
%
|
|
99
|
%
|
For the year ended December 31, 2010
|
|
89
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%
|
|
98
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%
|
For the year ended December 31, 2009
|
|
85
|
%
|
|
89
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%
|
|
|
United States
|
|
Export
|
||
Trio
®
only
|
|
|
|
|
||
For the year ended December 31, 2011
|
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56
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%
|
|
44
|
%
|
For the year ended December 31, 2010
|
|
68
|
%
|
|
32
|
%
|
For the year ended December 31, 2009
|
|
65
|
%
|
|
35
|
%
|
•
|
Focus on margin.
We focus on effectively marketing our products into markets that provide the greatest margins. By fully participating in these markets at competitive prices we aim to keep inventory moving through the plants which, in turn, maximizes production and reduces per ton operating costs. We continue to look for additional opportunities to control our fixed and variable operating expenses and plan to pursue various initiatives to increase the sustainability and reliability of our mining and plant facilities.
|
•
|
Expand potash production from existing facilities.
We have expansion opportunities at our operating facilities that we expect will increase production, drive down our unit cost per ton and increase our cash flow. We expanded our mining capacity at our Carlsbad facilities by adding new mining panels at our East and West facilities in 2011 and plan to add an additional mining panel at each mine in 2012, as well as expand the cavern network at our Moab facility by drilling additional horizontal laterals into the existing cavern system.
|
•
|
Expand langbeinite production.
The only known commercial reserves of langbeinite ore in the world are located near Carlsbad, New Mexico. We are one of the only two producers of langbeinite. To better capitalize on the strong demand for our Trio
®
product, which we produce from langbeinite ore, in May 2010, we announced our Langbeinite Recovery Improvement Project. During 2011, we substantially completed the construction of the dense media separation plant component of this project. This new plant is designed to improve our langbeinite recoveries and reduce our process water consumption, both of which will lower per unit costs. The dense media separation plant was substantially completed in late December 2011, with commissioning and optimization expected to continue through the first half of 2012. The overall project also includes a new granulation plant, which will provide us with the flexibility to granulate all of our standard‑sized Trio
®
product, should market conditions warrant. The granulation plant is expected to be
|
•
|
Increase marketing flexibility.
We successfully completed construction of a new granulation facility in Moab towards the end of 2010 and, at the end of 2011, completed the construction of a new compaction facility in Wendover. These facilities increase our capacity to compact standard‑sized product into granular‑sized product, which will increase our marketing flexibility and decrease our dependence on any one particular market. By increasing our compaction capacity, we will have the ability to convert more of our standard-sized product into product available for sale into the agricultural market, if market conditions warrant. We also have approved an investment of approximately $95 to $100 million for the construction of a new granulation plant at our North compaction facility. Pending timely approvals through the permitting process, this project is expected to be completed to coincide with the production increase from the HB Solar Solution mine and the expansion of mining and milling capacity at the West mine, with completion of the first phase of the project planned for the first half of 2013 and the completion of additional capacity into 2014.
|
•
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U.S. potash-only producer.
We are one of two publicly traded potash-only companies, the other being Uralkali, a Russian producer. We are dedicated to the production and marketing of potash and langbeinite. As a dedicated potash producer and because potash prices have historically been subject to less volatility than prices for other fertilizers and commodity chemicals, we believe our financial performance is subject to less volatility than that of other fertilizer companies that produce fertilizers other than, or in addition to, potash. Provided that mining and milling operations occur at steady operating rates, the costs to mine and produce potash are relatively fixed and stable, whereas the costs to produce other fertilizers have significantly greater exposure to volatile raw material costs, such as natural gas used to produce nitrogen and sulfate used to produce phosphate products. In general, the mining sector has experienced more cost pressures than other industries.
|
•
|
Assets located near our primary customer base.
Our mines are advantageously and strategically located near our largest customers. We believe that our locations allow us to obtain higher average net realized sales prices than our competitors, who must ship their products across longer distances to consuming markets, which are often export markets. Our location allows us to target sales to the markets in which we have the greatest transportation advantage, maximizing our average net realized sales price. Our access to strategic rail destination points and our location along major agricultural trucking routes support this advantage. In addition, our location in oil and gas producing regions allows us to serve industrial customers, the majority of whom we service by truck.
|
•
|
Participation in specialty markets.
We sell to three different markets for potash—the agricultural, industrial and feed markets. During 2011, these markets represented approximately
79 percent
,
14 percent
and
7 percent
of our potash sales, respectively. According to Fertecon, approximately 91 percent of all potash produced is used as a fertilizer. A primary component of the industrial markets we serve is the oil and natural gas services industry, where potash is commonly used in drilling and fracturing oil and natural gas wells.
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•
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Significant reserve life and water rights.
Our potash and langbeinite reserves each have substantial life, with remaining reserve life ranging from 28 to 157 years, based on proven and probable reserves estimated in accordance with U.S. Securities and Exchange Commission (“SEC”) requirements. This lasting reserve base is the result of our past acquisition and development strategy. In addition to our reserves, we have valuable water rights and access to significant mineralized areas of potash for potential future exploitation.
|
•
|
Existing facilities and infrastructure.
Constructing a new potash production facility requires extensive capital investment in mining, milling and infrastructure, which is expensive and requires substantial time to complete. Our five operating facilities and the HB Solar Solution mine already have significant facilities and infrastructure in place. We have the ability to expand our business using existing installed infrastructure, in less time and with lower expenditures than would be required to construct entirely new mines.
|
•
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Track record of innovation and modernization.
Our management team has a history of building successful operations through the acquisition of underutilized assets, followed by creative use of technology to increase productivity and reliability, and to re-invest cash flows into the business to grow production. As an entrepreneurial, potash-only producer, we have devoted considerable management attention to each facility, with a focus on modernization, sustainability, and improving production. We have applied technologies from other industries, including the oil and gas industry, and implemented innovative production processes. From the inception of Mining in January 2000 to December 31, 2011, we have invested approximately $
495 million
in capital expenditures at our facilities to enhance the productivity and reliability of our operations.
|
•
|
Solar evaporation operations.
The Moab mine and the Wendover facility, both located in the Utah desert, utilize solar evaporation to crystallize potash from brines. Solar evaporation is a low-cost and energy‑efficient method of producing potash. Our understanding and application of solution mining, combined with our location in regions with favorable climates for evaporation, allow our Utah facilities to enjoy relatively low production costs. We are in the process of developing the HB Solar Solution mine using the same solar evaporation and solution mining technology we use at our Moab mine.
|
|
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Percentage of Net Sales
|
|||||||
|
|
Year Ended December 31,
|
|||||||
|
|
2011
|
|
2010
|
|
2009
|
|||
United States
|
|
95.4
|
%
|
|
95.5
|
%
|
|
91.0
|
%
|
Region:
|
|
|
|
|
|
|
|||
Mexico/Latin America
|
|
2.6
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%
|
|
2.2
|
%
|
|
3.6
|
%
|
Caribbean
|
|
0.1
|
|
|
—
|
|
|
2.9
|
|
Canada and other
|
|
1.9
|
|
|
2.3
|
|
|
2.5
|
|
Export Subtotal
|
|
4.6
|
|
|
4.5
|
|
|
9.0
|
|
Total Sales
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Name
|
|
Age
|
|
Position
|
Robert P. Jornayvaz III
|
|
53
|
|
Executive Chairman of the Board
|
David W. Honeyfield
|
|
45
|
|
President and Chief Financial Officer
|
Martin D. Litt
|
|
47
|
|
Executive Vice President, General Counsel and Secretary
|
James N. Whyte
|
|
53
|
|
Executive Vice President of Human Resources and Risk Management
|
John G. Mansanti
|
|
56
|
|
Senior Vice President of Operations
|
Kelvin G. Feist
|
|
44
|
|
Senior Vice President of Marketing and Sales
|
Brian D. Frantz
|
|
49
|
|
Vice President - Finance, Controller and Chief Accounting Officer
|
ITEM 1A.
|
RISK FACTORS
|
•
|
geologic and mining conditions, which may not be fully identified by available exploration data and may differ from our experiences in areas where we currently mine or operate;
|
•
|
future potash prices, operating costs, capital expenditures, royalties, severance and excise taxes and development and reclamation costs;
|
•
|
future mining technology improvements;
|
•
|
the effects of regulation by governmental agencies; and
|
•
|
variations in mineralogy.
|
•
|
changes in the interpretation of environmental laws;
|
•
|
modifications to current environmental laws;
|
•
|
the issuance of more stringent environmental laws in the future; or
|
•
|
malfunctioning process or pollution control equipment.
|
•
|
it may limit our ability to borrow additional money or sell additional shares of common stock to fund our working capital, capital expenditures and debt service requirements;
|
•
|
it may limit our flexibility in planning for, or reacting to, changes in our business;
|
•
|
we may become more highly leveraged than some of our competitors, which may place us at a competitive disadvantage;
|
•
|
it may make us more vulnerable to a downturn in our business or the economy;
|
•
|
it could require us to dedicate a substantial portion of our cash flow from operations to the repayment of our
|
•
|
it may materially and adversely affect our business and financial condition if we are unable to service our indebtedness or obtain additional financing, as needed.
|
•
|
our operating performance and the performance of our competitors;
|
•
|
the public’s reaction to our press releases, our other public announcements and our filings with the SEC;
|
•
|
changes in earnings estimates or recommendations by research analysts who follow Intrepid or other companies in our industry;
|
•
|
variations in general economic, market and political conditions;
|
•
|
actions of our current stockholders, including sales of common stock by former members of Mining or our directors and executive officers;
|
•
|
the arrival or departure of key personnel;
|
•
|
other developments affecting us, our industry or our competitors; and
|
•
|
the other risks described in this report.
|
•
|
our stockholders’ proportionate ownership interest in us will decrease;
|
•
|
the relative voting strength of each previously outstanding common share may be diminished; and
|
•
|
the market price of the common stock may decline.
|
•
|
authorize us to issue preferred stock that can be created and issued by the board of directors without prior stockholder approval, except as may be required by applicable NYSE rules, with rights senior to those of common stock;
|
•
|
do not permit cumulative voting in the election of directors, which would otherwise allow less than a majority of stockholders to elect director candidates;
|
•
|
prohibit stockholders from calling special meetings of stockholders;
|
•
|
prohibit stockholder action by written consent, thereby requiring all stockholder actions to be taken at a meeting of our stockholders;
|
•
|
require vacancies and newly created directorships on the board of directors to be filled only by affirmative vote of a majority of the directors then serving on the board;
|
•
|
establish advance notice requirements for submitting nominations for election to the board of directors and for proposing matters that can be acted upon by stockholders at a meeting; and
|
•
|
classify our board of directors so that only some of our directors are elected each year.
|
ITEM 1B.
|
UNRESOLVED STAFF COMMENTS
|
ITEM 2.
|
PROPERTIES
|
|
|
|
|
|
|
|
|
Proven (4)
|
|
Probable (7)
|
||||||||||||||
Product/Operations
|
|
Date Mine Opened (2)
|
|
Current Extraction Method
|
|
Minimum Remaining Life (years) (3)
|
|
Recoverable Ore Tons (5)
|
|
Ore Grade (6) (% KCl)
|
|
Product Tons as KCl
|
|
Recoverable Ore Tons (5)
|
|
Ore Grade (6) (% KCl)
|
|
Product Tons as KCl
|
||||||
Muriate of Potash
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carlsbad West
|
|
1931
|
|
Underground
|
|
157
|
|
223,240
|
|
|
22.1
|
%
|
|
41,700
|
|
|
133,030
|
|
|
21.5
|
%
|
|
24,500
|
|
Carlsbad East (including East Mixed (8))
|
|
1965
|
|
Underground
|
|
58
|
|
70,120
|
|
|
18.6
|
%
|
|
10,030
|
|
|
59,750
|
|
|
18.2
|
%
|
|
8,570
|
|
Carlsbad HB Solar Solution Mine (2,9)
|
|
2012
|
|
Solution
|
|
28
|
|
15,400
|
|
|
34.7
|
%
|
|
4,750
|
|
|
710
|
|
|
32.3
|
%
|
|
210
|
|
Moab
|
|
1965
|
|
Solution
|
|
123
|
|
15,690
|
|
|
40.5
|
%
|
|
5,670
|
|
|
14,780
|
|
|
39.8
|
%
|
|
5,300
|
|
Wendover (10)
|
|
1932
|
|
Brine Evaporation
|
|
30
|
|
—
|
|
|
|
|
|
—
|
|
|
—
|
|
|
1.2
|
%
|
|
3,190
|
|
Total Muriate of Potash
|
|
|
|
|
|
|
|
|
|
|
24.2
|
%
|
|
62,150
|
|
|
|
|
|
21.7
|
%
|
|
41,770
|
|
|
|
|
|
|
|
|
|
Proven (4)
|
|
Probable (7)
|
||||||||||||||
Product/Operations
|
|
Date Mine Opened (2)
|
|
Current Extraction Method
|
|
Minimum Remaining Life (years) (3)
|
|
Recoverable Ore Tons (5)
|
|
Ore Grade (6) (% Lang)
|
|
Product Tons as Langbeinite
|
|
Recoverable Ore Tons (5)
|
|
Ore Grade (6) (% Lang)
|
|
Product Tons as Langbeinite
|
||||||
Sulfate of Potash Magnesia
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carlsbad East (10) (including East Mixed (11))
|
|
1965
|
|
Underground
|
|
65
|
|
74,080
|
|
|
33.3
|
%
|
|
21,080
|
|
|
93,980
|
|
|
35.5
|
%
|
|
29,200
|
|
(1)
|
The most recent review performed by Agapito was performed in 2011 for the Carlsbad West and East mines. Agapito's reserve estimate is based on the 2010 reserves less 2011 depletion. The Moab property reserves were based on the 2009 Agapito report less 2010 and 2011 depletion. The Wendover property reserves were based on the 2009 Agapito report, however depletion did not change the reserve life of 30 years as discussed in footnote 3 below. Detailed examination of our geologic model for the New Mexico properties was last performed in 2010 by Agapito. The geologic models for the Utah properties were updated to incorporate new data obtained in 2008 and 2009. No new data for Moab or Wendover was collected in 2010 or 2011. No changes to the HB Solar Solution mine reserve estimate were made to the 2008 Agapito review, as there has been no mining or changes to the database since that time. Because reserves are estimates, they cannot be audited for the purpose of verifying exactness. Instead, reserve information was reviewed in sufficient detail to determine if, in the aggregate, the data provided by us is reasonable and sufficient to estimate reserves in conformity with practices and standards generally employed by and within the mining industry and that are consistent with the requirements of U.S. securities laws.
|
(2)
|
These mines, excluding the Carlsbad HB Solar Solution mine, have operated in a substantially continuous manner since the dates set forth in this table. The Carlsbad HB Solar Solution mine was originally opened in 1934 and operated continuously as an underground mine until 1996. We are currently permitting the Carlsbad HB Solar Solution mine as a solution mine and anticipate completion of the EIS review process in
|
(3)
|
Minimum remaining lives at the Carlsbad West, Carlsbad East, HB Solar Solution mine, and Moab mines are based on reserves (product tons) divided by annual effective product capacity and corrections for purity: one ton of red muriate of potash equals 0.95 ton of KCl; one ton of Carlsbad East white muriate of potash equals 0.98 ton of KCl; one ton of Moab white muriate of potash equals 0.95 ton of KCl; one ton of sulfate of potash magnesia equals 0.95 ton of langbeinite. Carlsbad East minimum remaining life was based on three phases, with various plant capacities: first, combined potash and langbeinite production; second, langbeinite only; and third, potash only. We currently do not report more than 30 years mining life for Wendover due to the uncertainties associated with natural brine‑containing aquifers.
|
(4)
|
Proven reserves mean tonnages computed from projection of data using the inverse distance squared method taking into account mining dilution, mine extraction efficiency, ore body impurities, metallurgical recovery factors, sales prices and operating costs from potash ore zone measurements as observed and recorded either in drill holes using cores, electric logs, or channel samples in mine workings. This classification has the highest degree of geologic assurance. The sites for measurement are adequately spaced and the geologic character so well defined that the thickness, areal extent, size, shape, and depth of the potash ore zone are well-established. The maximum acceptable distance for projection from ore zone data points varies with the geologic nature of the ore zone being studied.
|
(5)
|
Recoverable ore tons is defined as the hoisted ore for the conventionally mined ore in our Carlsbad East and West Mines. This figure was derived from the in-place ore estimate that has been adjusted for factors such as geologic impurities and mine extraction ratios. For the HB Solar Solution mine and the Moab property, recoverable ore tons are defined as the potassium that can be extracted from the underground workings and pumped to the surface. This figure was derived from the in-place ore estimate that has been adjusted for factors such as geologic impurities, potash that dissolves but remains in the cavern (dissolution factor), and an extraction factor that accounts for potash that may not be recovered because solution may be channeled away or stranded due to cavern geometry. We do not calculate recoverable ore tons for the Wendover property as it is a lake brine resource, not an in-place ore deposit.
|
(6)
|
Ore grade expressed as expected mill feed grade to account for minimum mining height for the Carlsbad East and West mines. Muriate of potash ore grade is reported in % KCl and sulfate of potash magnesia ore grade is reported in % langbeinite. The ore grade for the Moab and HB Solar Solution mines is the in-place KCl grade.
|
(7)
|
Probable reserves means tonnages computed by projection of data using the inverse distance squared method taking into account mining dilution, mine extraction efficiency, ore body impurities, metallurgical recovery factors, sales prices and operating costs from available ore zone measurements as observed either in drill holes using cores, electric logs or other geophysical devices or in mine workings for a distance beyond potash classified as proven reserves. This classification has a moderate degree of geological assurance.
|
(8)
|
Our reserves in the 1
st
, 3
rd
, 4
th
, 7
th
, 8
th
and 10
th
ore zones contain either sylvite (KCl) or langbeinite (K
2
Mg
2
(SO
4
)
3
) separately. Reserves currently being mined at our East mine are from the 5
th
ore zone and contain both sylvite and langbeinite. We call these reserves mixed ore. Additionally, the reserve amounts include West mine 3
rd
and 4
th
ore zones which contain langbeinite that will be processed at the East mine.
|
(9)
|
The HB Solar Solution mine reserves were based on solution mining of old workings and recovery of potash from the residual pillars. Reserves are based on thicknesses, grades, and mine maps provided by us. Capital costs to establish economic viability for the HB Solar Solution mine reserves are based on updated internal estimates derived from third party engineering estimates, vendor and contractor quotes, and in-house estimates. Operating costs to establish economic viability were updated in 2011 based on designed operating parameters for reagent usage, power, materials and supplies, and anticipated staffing requirements for operations and environmental compliance.
|
(10)
|
The Wendover facility reserves are the combination of a shallow and a deep aquifer. There were no proven reserves reported for either aquifer because the shallow aquifer represents an unconventional resource and
|
(11)
|
A portion of these reserves are within the West mine boundary. The classification of the reserve as being associated with the East mine is a result of where the ore is intended to be processed.
|
•
|
Sylvite and langbeinite ore at our Carlsbad locations is mined from a stacked ore body containing at least 10 different mineralized zones, seven of which contain proven and probable reserves.
|
•
|
The West mine has a current estimated productive capacity of approximately 420,000 tons of red potash compactor feed annually. Potash produced from our West mine is shipped to the North facility for compaction.
|
•
|
The North facility receives potash from the West mine via truck and converts the compactor feed to finished red granular‑sized product and standard‑sized product.
|
•
|
The East mine has a current estimated productive capacity of approximately 250,000 tons of white potash and approximately 270,000 tons of langbeinite annually. Our productive capacity is impacted by the East’s mine plan and the mix of sylvite and langbeinite ore in the ore body. Our choice of the ore we mine impacts productive capacity in that the relative mixture of ore grade of sylvite and langbeinite drive the productive capacity of our facility.
|
•
|
Potash ore at Moab is mined from two stacked ore zones: the original mine workings in Potash 5 that were converted to a solution mine and the horizontal caverns in Potash 9.
|
•
|
The Moab mine has a current estimated productive capacity of approximately 100,000 tons of potash annually; evaporation rates have historically resulted in actual production between approximately 75,000 and 100,000 tons of potash.
|
•
|
Potash at Wendover is produced primarily from brine containing salt, potash and magnesium chloride that is collected in ditches from the shallow aquifers of the Bonneville Salt Flats. These materials are also collected from a deeper aquifer by means of deep brine wells.
|
•
|
The Wendover facility has a current estimated productive capacity of approximately 100,000 tons of potash annually; evaporation rates have historically resulted in actual production between approximately65,000 and 100,000 tons of potash.
|
•
|
The HB Solar Solution mine is an idled conventional underground potash mine that we are in the process of reopening as a solution mine. Assuming favorable market conditions and receipt of all necessary permits and approvals, we believe the reopening of the HB Solar Solution mine project has the potential, when fully operational, assuming an average evaporation year, to ultimately add up to an estimated 5 million tons of additional low-cost potash production rates that ramp up to exceed 200,000 tons for a period of years and then producing between 150,000 to 200,000 tons annually for a total of approximately 28 years.
|
•
|
The North mine operated from 1957 to 1982 when it was idled mainly due to low potash prices and mineralogy changes which caused inefficient mineral processing at the facilities. The production rate from this mine was approximately 330,000 tons annually prior to being idled. Although most of the unused mining and processing equipment has been removed, the mine shafts remain open. Part of the North mine surface plant is still active as this is where we granulate, store, and ship potash produced at the West mine. Two operable mine shafts and much of the transportation and utility infrastructure required to operate the mine, including mine permits, rail access, storage facilities, water rights, utilities and leases covering potash deposits, are already in place. As part of our overall mine planning efforts, we continue to evaluate our strategic development options with respect to the North mine and its mineralized deposits of potash. These development options contemplate a mill and operating infrastructure that would produce at rates in excess of historical production levels, thereby leveraging the operating size and gaining benefits of scale towards per ton operating costs.
|
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
|
2011
|
|
2010
|
|
2009
|
|||||||||||||||
|
|
Ore Production
|
|
Mill Feed Grade (1)
|
|
Finished Product
|
|
Ore Production
|
|
Mill Feed Grade (1)
|
|
Finished Product
|
|
Ore Production
|
|
Mill Feed Grade (1)
|
|
Finished Product
|
|||
Muriate of Potash
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Carlsbad West
|
|
2,896
|
|
11.5
|
%
|
|
411
|
|
2,538
|
|
11.0
|
%
|
|
352
|
|
1,564
|
|
12.0
|
%
|
|
219
|
Carlsbad East
|
|
2,309
|
|
8.9
|
%
|
|
202
|
|
2,334
|
|
9.9
|
%
|
|
212
|
|
1,947
|
|
8.0
|
%
|
|
150
|
Moab
|
|
573
|
|
15.4
|
%
|
|
116
|
|
484
|
|
15.2
|
%
|
|
100
|
|
427
|
|
14.1
|
%
|
|
75
|
Wendover
|
|
405
|
|
17.8
|
%
|
|
84
|
|
332
|
|
19.5
|
%
|
|
63
|
|
297
|
|
19.0
|
%
|
|
60
|
|
|
6,183
|
|
|
|
813
|
|
5,688
|
|
|
|
727
|
|
4,235
|
|
|
|
504
|
|||
Langbeinite Carlsbad East(2)
|
|
2,309
|
|
5.7
|
%
|
|
141
|
|
2,334
|
|
5.6
|
%
|
|
159
|
|
1,947
|
|
6.5
|
%
|
|
192
|
Total Primary Products
|
|
|
|
|
|
954
|
|
|
|
|
|
886
|
|
|
|
|
|
696
|
(1)
|
Mill feed grade is shown as a percent of K
2
O.
|
(2)
|
Muriate of potash and langbeinite at our East mine are processed from the same ore.
|
ITEM 3.
|
LEGAL PROCEEDINGS
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
|
High
|
|
Low
|
2011
|
|
|
|
Quarter ended December 31, 2011
|
$30.41
|
|
$20.75
|
Quarter ended September 30, 2011
|
$35.65
|
|
$24.86
|
Quarter ended June 30, 2011
|
$36.42
|
|
$28.62
|
Quarter ended March 31, 2011
|
$40.22
|
|
$31.70
|
2010
|
|
|
|
Quarter ended December 31, 2010
|
$37.65
|
|
$25.06
|
Quarter ended September 30, 2010
|
$28.79
|
|
$19.08
|
Quarter ended June 30, 2010
|
$30.59
|
|
$19.47
|
Quarter ended March 31, 2010
|
$34.20
|
|
$24.28
|
|
|
|
|
|
|
|
Dow Jones U.S.
|
||||||||
|
IPI
|
|
Peer Group
|
|
S&P 500
|
|
Basic Materials
|
||||||||
April 22, 2008
|
$
|
100.00
|
|
|
$
|
100.00
|
|
|
$
|
100.00
|
|
|
$
|
100.00
|
|
December 31, 2008
|
$
|
41.21
|
|
|
$
|
31.81
|
|
|
$
|
65.65
|
|
|
$
|
45.36
|
|
December 31, 2009
|
$
|
57.88
|
|
|
$
|
51.38
|
|
|
$
|
81.04
|
|
|
$
|
71.86
|
|
December 31, 2010
|
$
|
73.99
|
|
|
$
|
72.23
|
|
|
$
|
91.40
|
|
|
$
|
92.91
|
|
December 31, 2011
|
$
|
46.10
|
|
|
$
|
58.61
|
|
|
$
|
91.14
|
|
|
$
|
78.44
|
|
Period
|
|
(a)
Total Number of Shares Purchased (1) |
|
(b)
Average Price Paid Per Share |
|
(c)
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs |
|
(d)
Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plan or Programs |
|||
October 1, 2011, through October 31, 2011
|
|
–
|
|
|
–
|
|
|
–
|
|
N/A
|
|
November 1, 2011, through November 30, 2011
|
|
–
|
|
|
–
|
|
|
–
|
|
N/A
|
|
December 1, 2011, through December 31, 2011
|
|
1,756
|
|
|
$
|
22.65
|
|
|
–
|
|
N/A
|
(1)
|
Represents shares of common stock delivered to us as payment of withholding taxes due upon the vesting of restricted stock held by our employees.
|
ITEM 6.
|
SELECTED FINANCIAL DATA
|
|
|
Intrepid Potash, Inc.
|
|
Intrepid Mining LLC (Predecessor)
|
||||||||||||||||||||
|
|
Year Ended December 31,
|
|
April 25, 2008, Through December 31, 2008
|
|
January 1, 2008, Through April 24, 2008
|
|
Year Ended
December 31, |
||||||||||||||||
|
|
|
|
|
||||||||||||||||||||
|
|
2011
|
|
2010
|
|
2009
|
|
|
|
2007
|
||||||||||||||
Sales
|
|
$
|
442,954
|
|
|
$
|
359,304
|
|
|
$
|
301,803
|
|
|
$
|
305,914
|
|
|
$
|
109,420
|
|
|
$
|
213,459
|
|
Income from continuing operations
|
|
$
|
109,411
|
|
|
$
|
45,285
|
|
|
$
|
55,342
|
|
|
$
|
98,173
|
|
|
$
|
44,497
|
|
|
$
|
29,684
|
|
Income from continuing operations per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic
|
|
$
|
1.46
|
|
|
$
|
0.60
|
|
|
$
|
0.74
|
|
|
$
|
1.31
|
|
|
n/a
|
|
n/a
|
||||
Diluted
|
|
$
|
1.45
|
|
|
$
|
0.60
|
|
|
$
|
0.74
|
|
|
$
|
1.31
|
|
|
n/a
|
|
n/a
|
||||
Cash dividends declared and paid per common share
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
n/a
|
|
n/a
|
|
|
Intrepid Potash, Inc.
|
|
Intrepid Mining LLC (Predecessor)
|
||||||||||||||||
|
|
December 31,
|
||||||||||||||||||
|
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
2007
|
||||||||||
Total assets
|
|
$
|
932,870
|
|
|
$
|
828,884
|
|
|
$
|
768,990
|
|
|
$
|
705,077
|
|
|
$
|
146,727
|
|
Total debt
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
101,355
|
|
|
|
Intrepid Potash, Inc.
|
|
Intrepid Mining LLC (Predecessor)
|
||||||||||||||||||||
|
|
Year Ended December 31,
|
|
April 25, 2008, Through December 31, 2008
|
|
January 1, 2008, Through April 24, 2008
|
|
Year Ended
December 31, |
||||||||||||||||
|
|
|
|
|
||||||||||||||||||||
|
|
2011
|
|
2010
|
|
2009
|
|
|
|
2007
|
||||||||||||||
Net income
|
|
$
|
109,411
|
|
|
$
|
45,285
|
|
|
$
|
55,342
|
|
|
$
|
98,173
|
|
|
$
|
44,497
|
|
|
$
|
29,684
|
|
Weighted-average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic
|
|
75,181
|
|
|
75,084
|
|
|
75,015
|
|
|
74,843
|
|
|
n/a
|
|
|
n/a
|
|
||||||
Diluted
|
|
75,281
|
|
|
75,154
|
|
|
75,042
|
|
|
74,988
|
|
|
n/a
|
|
|
n/a
|
|
|
|
Intrepid Potash, Inc.
|
|
Intrepid Mining LLC (Predecessor)
|
||||||||||||||||
|
|
December 31,
|
||||||||||||||||||
|
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
2007
|
||||||||||
Cash, cash equivalents and investments
|
|
$
|
176,794
|
|
|
$
|
142,988
|
|
|
$
|
107,136
|
|
|
$
|
116,573
|
|
|
$
|
1,960
|
|
Stockholders’ / members' equity
|
|
$
|
871,133
|
|
|
$
|
757,841
|
|
|
$
|
709,222
|
|
|
$
|
651,599
|
|
|
$
|
10,397
|
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
Average net realized sales price for the three months ended:
|
|
Potash
|
|
Trio
®
|
|
|
(Per ton)
|
||
December 31, 2011
|
|
$497
|
|
$287
|
September 30, 2011
|
|
$489
|
|
$251
|
June 30, 2011
|
|
$462
|
|
$222
|
March 31, 2011
|
|
$442
|
|
$204
|
December 31, 2010
|
|
$386
|
|
$222
|
September 30, 2010
|
|
$343
|
|
$173
|
June 30, 2010
|
|
$376
|
|
$162
|
March 31, 2010
|
|
$354
|
|
$167
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2011
|
|
2010
|
|
2009
|
||||||
Production volume (in thousands of tons):
|
|
|
|
|
|
|
||||||
Potash
|
|
813
|
|
|
727
|
|
|
504
|
|
|||
Langbeinite
|
|
141
|
|
|
159
|
|
|
192
|
|
|||
Sales volume (in thousands of tons):
|
|
|
|
|
|
|
|
|
|
|||
Potash
|
|
793
|
|
|
810
|
|
|
440
|
|
|||
Trio
®
|
|
173
|
|
|
204
|
|
|
149
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Gross sales (in thousands):
|
|
|
|
|
|
|
||||||
Potash
|
|
$
|
392,331
|
|
|
$
|
312,088
|
|
|
$
|
250,887
|
|
Trio
®
|
|
50,623
|
|
|
47,216
|
|
|
50,916
|
|
|||
Total
|
|
442,954
|
|
|
359,304
|
|
|
301,803
|
|
|||
Freight costs (in thousands):
|
|
|
|
|
|
|
|
|
|
|||
Potash
|
|
18,470
|
|
|
18,021
|
|
|
13,059
|
|
|||
Trio
®
|
|
9,869
|
|
|
11,730
|
|
|
8,410
|
|
|||
Total
|
|
28,339
|
|
|
29,751
|
|
|
21,469
|
|
|||
Net sales (in thousands):
|
|
|
|
|
|
|
|
|
|
|||
Potash
|
|
373,861
|
|
|
294,067
|
|
|
237,828
|
|
|||
Trio
®
|
|
40,754
|
|
|
35,486
|
|
|
42,506
|
|
|||
Total
|
|
$
|
414,615
|
|
|
$
|
329,553
|
|
|
$
|
280,334
|
|
|
|
|
|
|
|
|
||||||
Potash statistics (per ton):
|
|
|
|
|
|
|
|
|
|
|||
Average net realized sales price
|
|
$
|
472
|
|
|
$
|
363
|
|
|
$
|
541
|
|
Cash operating cost of goods sold, net of
by-product credits * (exclusive of items shown separately below) |
|
173
|
|
|
184
|
|
|
196
|
|
|||
Depreciation, depletion, and amortization
|
|
33
|
|
|
26
|
|
|
18
|
|
|||
Royalties
|
|
17
|
|
|
13
|
|
|
20
|
|
|||
Total potash cost of goods sold
|
|
$
|
223
|
|
|
$
|
223
|
|
|
$
|
234
|
|
Warehousing and handling costs
|
|
14
|
|
|
11
|
|
|
14
|
|
|||
Average potash gross margin (exclusive
of costs associated with abnormal production) |
|
$
|
235
|
|
|
$
|
129
|
|
|
$
|
293
|
|
|
|
|
|
|
|
|
||||||
Trio
®
statistics (per ton):
|
|
|
|
|
|
|
|
|
|
|||
Average net realized sales price
|
|
$
|
236
|
|
|
$
|
174
|
|
|
$
|
286
|
|
Cash operating cost of goods sold (exclusive
of items shown separately below) |
|
176
|
|
|
127
|
|
|
141
|
|
|||
Depreciation, depletion, and amortization
|
|
22
|
|
|
17
|
|
|
13
|
|
|||
Royalties
|
|
12
|
|
|
9
|
|
|
14
|
|
|||
Total Trio
®
cost of goods sold
|
|
$
|
210
|
|
|
$
|
153
|
|
|
$
|
168
|
|
Warehousing and handling costs
|
|
15
|
|
|
10
|
|
|
15
|
|
|||
Average Trio
®
gross margin (exclusive
of costs associated with abnormal production) |
|
$
|
11
|
|
|
$
|
11
|
|
|
$
|
103
|
|
*
|
On a per ton basis, by-product credits were
$8
,
$8
and
$17
for the years ended December 31, 2011, 2010, and 2009, respectively. By-product credits were
$6.0 million
,
$6.4 million
and
$7.4 million
for the years ended December 31, 2011, 2010, and 2009, respectively.
|
•
|
The total capital investment for the Langbeinite Recovery Improvement Project is expected to be between $85 and $90 million, of which approximately $71.7 million has been invested to date, with the balance expected to be invested early in 2012. Construction for the dense media separation plant was substantially completed during the fourth quarter of 2011 and the construction and commissioning of the granulation plant are expected to be completed in the first half of 2012.
|
•
|
The North compaction project is expected to be completed to coincide with the production increases from the HB Solar Solution mine and the expansion of mining and milling capacity at the West mine, with completion of the first portion of the plant planned for early 2013 and future plans for expansion as required by production. We initiated the permitting process for this project in the fourth quarter of 2011. Assuming the necessary permits are obtained on a timely basis, we will begin construction in the second quarter of 2012. Total capital investment for the project is expected to be approximately $95 to $100 million, of which approximately $10.1 million has been invested to date.
|
•
|
We are developing additional solution mining opportunities at our Moab facility. We are expanding the horizontal cavern system with the drilling of additional horizontal wells. This represents a capital investment of approximately $20 to $25 million. The new wells are intended to stabilize existing production levels as well as provide modest production increases.
|
•
|
$0.8 million
in cash;
|
•
|
$72.6 million in cash equivalent investments, consisting of money market accounts or certificates of deposit with banking institutions that we believe are financially sound;
|
•
|
$97.2 million
and
$6.2 million
invested in short and long-term investments, respectively, comprised of certificates of deposit investments of $2.5 million and corporate debt securities of $100.9 million.
|
|
|
Year ended December 31,
|
||||||||||
|
|
2011
|
|
2010
|
|
2009
|
||||||
|
|
(In thousands)
|
||||||||||
Cash Flows from Operating Activities
|
|
$
|
173,869
|
|
|
$
|
123,294
|
|
|
$
|
81,064
|
|
Cash Flows from Investing Activities
|
|
$
|
(174,802
|
)
|
|
$
|
(136,284
|
)
|
|
$
|
(106,521
|
)
|
Cash Flows from Financing Activities
|
|
$
|
(1,828
|
)
|
|
$
|
(669
|
)
|
|
$
|
(1,324
|
)
|
Termination Date
|
|
Notional Amount
|
|
Weighted Average Fixed Rate
|
|||
|
|
(In thousands)
|
|
|
|
||
December 31, 2012
|
|
$
|
22,800
|
|
|
5.3
|
%
|
|
|
Payments Due By Period
|
||||||||||||||||||||||||||
|
|
Total
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
More Than 5 Years
|
||||||||||||||
|
|
(In thousands)
|
||||||||||||||||||||||||||
Operating lease obligations(1)
|
|
$
|
15,500
|
|
|
$
|
3,370
|
|
|
$
|
3,132
|
|
|
$
|
2,806
|
|
|
$
|
1,444
|
|
|
$
|
1,398
|
|
|
$
|
3,350
|
|
Purchase commitments(2)
|
|
3,175
|
|
|
3,175
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Natural gas purchase commitments(3)
|
|
2,911
|
|
|
2,911
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Pension obligations(4)
|
|
1,111
|
|
|
1,111
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Asset retirement obligation(5)
|
|
33,449
|
|
|
100
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
33,349
|
|
|||||||
Minimum royalty payments(6)
|
|
9,800
|
|
|
392
|
|
|
392
|
|
|
392
|
|
|
392
|
|
|
392
|
|
|
7,840
|
|
|||||||
Total
|
|
$
|
65,946
|
|
|
$
|
11,059
|
|
|
$
|
3,524
|
|
|
$
|
3,198
|
|
|
$
|
1,836
|
|
|
$
|
1,790
|
|
|
$
|
44,539
|
|
(1)
|
Includes all operating lease payments, inclusive of sales tax, for leases for office space, an airplane, railcars and other equipment.
|
(2)
|
Purchase contractual commitments include the approximate amount due vendors for non-cancelable purchase commitments for materials and services.
|
(3)
|
We have committed to purchase a minimum quantity of natural gas, which is priced at floating index‑dependent rates plus $0.02, estimated based on forward rates. Amounts are based on spot rates inclusive of estimated transportation costs and sales tax.
|
(4)
|
As we anticipate terminating our obligations under the pension plan, our remaining liability is estimated to be funded in 2012. Our actual contributions requirements are contingent upon the timing of the pension plan termination, as well as participant settlement obligations. We expect to record an additional expense on termination of the pension plan at the date we are released from the liability in an amount equal to the difference between the final amount funded, the recorded pension liability and the unrecognized actuarial loss included in accumulated other comprehensive income.
|
(5)
|
We are obligated to reclaim and remediate lands which our operations have disturbed, but, because of the long-term nature of our reserves and facilities, we estimate that none of those expenditures will be required until after 2015. Commitments shown are in today’s dollars and are undiscounted.
|
(6)
|
Estimated annual minimum royalties due under mineral leases, assuming approximately a 25-year life, consistent with estimated useful lives of plant assets.
|
|
|
Year ended December 31,
|
|
Change Between
|
|
|
|||||||||
|
|
2011
|
|
2010
|
|
Periods
|
|
% Change
|
|||||||
Cost of goods sold (in millions)
|
|
$
|
213.7
|
|
|
$
|
211.7
|
|
|
$
|
2.0
|
|
|
1
|
%
|
Costs associated with abnormal production (in millions)
|
|
$
|
—
|
|
|
$
|
0.5
|
|
|
$
|
(0.5
|
)
|
|
(100
|
)%
|
Cost per ton of potash sold(1)
|
|
$
|
223
|
|
|
$
|
223
|
|
|
$
|
—
|
|
|
—
|
%
|
Cost per ton of Trio
®
sold(2)
|
|
$
|
210
|
|
|
$
|
153
|
|
|
$
|
57.0
|
|
|
37
|
%
|
(1)
|
Depreciation, depletion, and amortizations expense for potash was $25.9 million and $21.1 million in 2011 and 2010, respectively, which equates to $
33
and $
26
on a per ton basis.
|
(2)
|
Depreciation, depletion, and amortizations expense for Trio
®
was $3.8 million and $3.5 million in 2011 and 2010, respectively, which equates to $
22
and $
17
on a per ton basis.
|
|
|
Year ended December 31,
|
|
Change Between
|
|
|
|||||||||
|
|
2010
|
|
2009
|
|
Periods
|
|
% Change
|
|||||||
Cost of goods sold (in millions)
|
|
$
|
211.7
|
|
|
$
|
127.8
|
|
|
$
|
83.9
|
|
|
66
|
%
|
Costs associated with abnormal production (in millions)
|
|
$
|
0.5
|
|
|
$
|
21.5
|
|
|
$
|
(21.0
|
)
|
|
(98
|
)%
|
Cost per ton of potash sold(1)
|
|
$
|
223
|
|
|
$
|
234
|
|
|
$
|
(11.0
|
)
|
|
(5
|
)%
|
Cost per ton of Trio
®
sold(2)
|
|
$
|
153
|
|
|
$
|
168
|
|
|
$
|
(15.0
|
)
|
|
(9
|
)%
|
(1)
|
Depreciation, depletion, and amortizations expense for potash was $21.1 million and $7.9 million in 2010 and 2009, respectively, which equates to $26 and $18 per ton.
|
(2)
|
Depreciation, depletion, and amortizations expense for Trio
®
was $3.5 million and $2.0 million in 2010 and 2009, respectively, which equates to $17 and $13 per ton.
|
•
|
significant underperformance relative to expected operating results;
|
•
|
significant changes in the manner of use of assets or the strategy for our overall business;
|
•
|
the denial or delay of necessary permits or approvals that would affect the utilization of our tangible assets;
|
•
|
underutilization of our tangible assets;
|
•
|
discontinuance of certain products by us or our customers;
|
•
|
a decrease in estimated mineral reserves; and
|
•
|
significant negative industry or economic trends.
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
(a)
|
Evaluation of Disclosure Controls and Procedures
|
(b)
|
Management’s Report on Internal Control over Financial Reporting
|
(c)
|
Changes in Internal Control over Financial Reporting
|
(d)
|
Inherent Limitations on Effectiveness of Controls
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
|
Exhibit No.
|
|
Description
|
3.1
|
|
Restated Certificate of Incorporation of Intrepid Potash, Inc.(1)
|
|
|
|
3.2
|
|
Amended and Restated Bylaws of Intrepid Potash, Inc., as amended effective November 17, 2010.(2)
|
|
|
|
10.1
|
|
Form of Indemnification Agreement.(1)+
|
|
|
|
10.2
|
|
Exchange Agreement between Intrepid Potash, Inc. and Intrepid Mining LLC, dated as of April 21, 2008.(1)
|
|
|
|
10.3
|
|
Director Designation and Voting Agreement dated as of April 25, 2008, by and among Intrepid Potash, Inc., Harvey Operating and Production Company, Intrepid Production Corporation and Potash Acquisition, LLC.(3)
|
|
|
|
10.4
|
|
Registration Rights Agreement dated as of April 25, 2008, by and among Intrepid Potash, Inc., Harvey Operating & Production Company, Intrepid Production Corporation and Potash Acquisition, LLC.(3)
|
|
|
|
10.5
|
|
Acknowledgment and Relinquishment dated as of December 19, 2011, by and among Intrepid Potash, Inc., Harvey Operating and Production Company, Intrepid Production Corporation and Potash Acquisition, LLC. (relating to the Director Designator and Voting Agreement filed as Exhibit 10.3 and the Registration Rights Agreement filed as Exhibit 10.4).*
|
|
|
|
10.6
|
|
$250,000,000 Unsecured Credit Agreement dated as of August 3, 2011, by and among Intrepid Potash, Inc., as borrower; U.S. Bank National Association as administrative agent, joint book runner, LC Issuer and Swing Line Lender; Wells Fargo Bank, National Association, as syndication agent; Wells Fargo Securities LLC as joining lead arranger and joint book runner; and the Lenders (as defined therein). (4)
|
|
|
|
10.7
|
|
Amended and Restated Employment Agreement dated as of May 19, 2010, by and between Intrepid Potash, Inc. and Robert P. Jornayvaz III.(5)+
|
|
|
|
10.8
|
|
Amendment to Employment Agreement dated February 23, 2011, by and between Intrepid Potash, Inc. and Robert P. Jornayvaz III.(6)+
|
|
|
|
10.9
|
|
Amended and Restated Employment Agreement dated as of May 19, 2010, by and between Intrepid Potash, Inc. and Hugh E. Harvey, Jr.(5)+
|
|
|
|
10.10
|
|
Intrepid Potash, Inc. 2008 Equity Incentive Plan.(7)+
|
|
|
|
10.11
|
|
Amendment No. 1 to Intrepid Potash, Inc. 2008 Incentive Plan dated as of July 1, 2008.(8)+
|
|
|
|
10.12
|
|
Form of Restricted Stock Grant Agreement under Intrepid Potash, Inc. 2008 Equity Incentive Plan.(9)+
|
|
|
|
Exhibit No.
|
|
Description
|
10.13
|
|
Form of Stock Option Agreement under Intrepid Potash, Inc. 2008 Equity Incentive Plan.(9)+
|
|
|
|
10.14
|
|
Form of Director Stock Grant Agreement under Intrepid Potash, Inc. 2008 Equity Incentive Plan.(10)+
|
|
|
|
10.15
|
|
Intrepid Potash, Inc. Short Term Incentive Plan.(11)+
|
|
|
|
10.16
|
|
Form of Change-of-Control Severance Agreement.(12)+
|
|
|
|
10.17
|
|
Sublease Agreement dated as of December 17, 2008, by and between Intrepid Potash, Inc. and The LARRK Foundation.(13)
|
|
|
|
10.18
|
|
Sublease Agreement dated as of December 17, 2008, by and between Intrepid Potash, Inc. and Intrepid Production Corporation.(13)
|
|
|
|
10.19
|
|
Aircraft Dry Lease dated as of January 9, 2009, by and between Intrepid Production Holdings LLC and Intrepid Potash, Inc.(14)
|
|
|
|
10.20
|
|
Non-Exclusive Aircraft Dry-Lease Agreement dated as of January 1, 2011, by and between BH Holdings LLC and Intrepid Potash, Inc.(15)
|
|
|
|
21.1
|
|
List of Subsidiaries.*
|
|
|
|
23.1
|
|
Consent of KPMG LLP.*
|
|
|
|
23.2
|
|
Consent of Agapito Associates, Inc.*
|
|
|
|
31.1
|
|
Certification of Principal Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a), as amended.*
|
|
|
|
31.2
|
|
Certification of Principal Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a), as amended.*
|
|
|
|
32.1
|
|
Certification of Executive Chairman of the Board pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002.**
|
|
|
|
32.2
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002.**
|
|
|
|
95.1
|
|
Mine Safety Disclosure Exhibit.*
|
|
|
|
99.1
|
|
Transition Services Agreement dated as of April 25, 2008, by and between Intrepid Potash, Inc. and Intrepid Oil & Gas, LLC, and for the limited purposes of joining in and agreeing to Sections 8 and 9, Intrepid Potash—Moab, LLC.(2)
|
|
|
|
99.2
|
|
Extension and Amendment to Transition Services Agreement dated July 14, 2009, to be effective as of April 25, 2009, between Intrepid Potash, Inc. and Intrepid Oil & Gas, LLC.(16)
|
|
|
|
99.3
|
|
Third Amendment to Transition Services Agreement dated March 26, 2010, between Intrepid Potash, Inc. and Intrepid Oil & Gas, LLC.(17)
|
|
|
|
99.4
|
|
Fourth Amendment to Transition Services Agreement dated March 25, 2011, between Intrepid Potash, Inc. and Intrepid Oil and Gas, LLC.(18)
|
|
|
|
101.INS
|
|
XBRL Instance Document.***
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema.***
|
|
|
|
101.CAL
|
|
XBRL Extension Calculation Linkbase.***
|
|
|
|
101.LAB
|
|
XBRL Extension Label Linkbase.***
|
|
|
|
101.PRE
|
|
XBRL Extension Presentation Linkbase.***
|
|
|
|
101.DEF
|
|
XBRL Extension Definition Linkbase.***
|
(1)
|
Incorporated by reference to Intrepid’s Current Report on Form 8-K (File No. 001-34025) filed on April 25, 2008.
|
(2)
|
Incorporated by reference to Intrepid’s Current Report on Form 8-K (File No. 001-34025) filed on November 19, 2010.
|
(3)
|
Incorporated by reference to Intrepid’s Current Report on Form 8-K (File No. 001-34025) filed on May 1, 2008.
|
(4)
|
Incorporated by reference to Intrepid's Current Report on Form 8-K (File No. 001-34025) filed on August 8, 2011.
|
(5)
|
Incorporated by reference to Intrepid’s Current Report on Form 8-K (File No. 001-34025) filed on May 19, 2010.
|
(6)
|
Incorporated by reference to Intrepid's Current Report on Form 8-K (File No. 001-34025) filed on March 1, 2011.
|
(7)
|
Incorporated by reference to Intrepid's Registration Statement on Form S-8 (Registration No. 335-150444) filed on April 25, 2008.
|
(8)
|
Incorporated by reference to Intrepid's Quarterly Report on Form 10-Q (File No. 001-34025) for the quarter ended June 30, 2008.
|
(9)
|
Incorporated by reference to Intrepid's Current Report on Form 8-K (File No. 001-34025) filed on February 7, 2011.
|
(10)
|
Incorporated by reference to Amendment No. 3 to Intrepid's Registration Statement on Form S-1 (Registration No. 333-148215) filed on April 7, 2008.
|
(11)
|
Incorporated by reference to Intrepid's Quarterly Report on Form 10-Q (File No. 001-34025) for the quarter ended March 31, 2008.
|
(12)
|
Incorporated by reference to Intrepid's Quarterly Report on Form 10-Q (File No. 001-34025) for the quarter ended September 30, 2011.
|
(13)
|
Incorporated by reference to Intrepid’s Current Report on Form 8-K (File No. 001-34025) filed on December 18, 2008.
|
(14)
|
Incorporated by reference to Intrepid’s Current Report on Form 8-K (File No. 001-34025) filed on January 12, 2009.
|
(15)
|
Incorporated by reference to Intrepid’s Current Report on Form 8-K (File No. 001-34025) filed on December 13, 2011.
|
(16)
|
Incorporated by reference to Intrepid's Quarterly Report on Form 10-Q (File No. 001-34025) for the quarter ended June 30, 2009.
|
(17)
|
Incorporated by reference to Intrepid's Quarterly Report on Form 10-Q (File No. 001-34025) for the quarter ended March 31, 2010.
|
(18)
|
Incorporated by reference to Intrepid's Quarterly Report on Form 10-Q (File No. 001-34025) for the quarter ended March 31, 2011.
|
*
|
Filed herewith.
|
**
|
Furnished herewith.
|
***
|
Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Exchange Act, and otherwise are not subject to liability under those sections.
|
+
|
Management contract.
|
|
|
INTREPID POTASH, INC.
(Registrant) |
|
|
|
Dated: February 15, 2012
|
|
/s/
Robert P. Jornayvaz III
|
|
|
Robert P. Jornayvaz III -
Executive Chairman of the Board
(Principal Executive Officer) |
|
|
|
Dated: February 15, 2012
|
|
/s/
David W. Honeyfield
|
|
|
David W. Honeyfield -
President and Chief Financial Officer
(Principal Financial Officer) |
|
|
|
Dated: February 15, 2012
|
|
/s/
Brian D. Frantz
|
|
|
Brian D. Frantz -
Vice President-Finance, Controller and Chief Accounting Officer
(Principal Accounting Officer) |
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/
Robert P. Jornayvaz III
|
|
Executive Chairman of the Board
|
|
February 15, 2012
|
Robert P. Jornayvaz III
|
|
|
|
|
|
|
|
|
|
/s/
Hugh E. Harvey, Jr.
|
|
Executive Vice Chairman of the Board
|
|
February 15, 2012
|
Hugh E. Harvey, Jr.
|
|
|
|
|
|
|
|
|
|
/s/
Terry Considine
|
|
Director
|
|
February 15, 2012
|
Terry Considine
|
|
|
|
|
|
|
|
|
|
/s/
Chris A. Elliott
|
|
Director
|
|
February 15, 2012
|
Chris A. Elliot
|
|
|
|
|
|
|
|
|
|
/s/
J. Landis Martin
|
|
Lead Director
|
|
February 15, 2012
|
J. Landis Martin
|
|
|
|
|
|
|
|
|
|
/s/
Barth E. Whitham
|
|
Director
|
|
February 15, 2012
|
Barth E. Whitham
|
|
|
|
|
|
|
December 31,
|
||||||
|
|
2011
|
|
2010
|
||||
ASSETS
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
73,372
|
|
|
$
|
76,133
|
|
Short-term investments
|
|
97,242
|
|
|
45,557
|
|
||
Accounts receivable:
|
|
|
|
|
||||
Trade, net
|
|
29,304
|
|
|
23,767
|
|
||
Other receivables
|
|
6,898
|
|
|
1,161
|
|
||
Refundable income taxes
|
|
4,493
|
|
|
6,543
|
|
||
Inventory, net
|
|
55,390
|
|
|
48,094
|
|
||
Prepaid expenses and other current assets
|
|
5,015
|
|
|
4,016
|
|
||
Current deferred tax asset
|
|
4,931
|
|
|
3,551
|
|
||
Total current assets
|
|
276,645
|
|
|
208,822
|
|
||
|
|
|
|
|
||||
Property, plant, and equipment, net of accumulated depreciation
|
|
|
|
|
||||
of $98,654 and $66,615, respectively
|
|
387,423
|
|
|
285,920
|
|
||
Mineral properties and development costs, net of accumulated
|
|
|
|
|
||||
depletion of $9,773 and $8,431, respectively
|
|
33,482
|
|
|
34,372
|
|
||
Long-term parts inventory, net
|
|
9,559
|
|
|
7,121
|
|
||
Long-term investments
|
|
6,180
|
|
|
21,298
|
|
||
Other assets
|
|
3,949
|
|
|
5,311
|
|
||
Non-current deferred tax asset
|
|
215,632
|
|
|
266,040
|
|
||
Total Assets
|
|
$
|
932,870
|
|
|
$
|
828,884
|
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
||||
Accounts payable:
|
|
|
|
|
||||
Trade
|
|
$
|
20,900
|
|
|
$
|
17,951
|
|
Related parties
|
|
134
|
|
|
126
|
|
||
Accrued liabilities
|
|
14,795
|
|
|
17,153
|
|
||
Accrued employee compensation and benefits
|
|
12,370
|
|
|
8,597
|
|
||
Other current liabilities
|
|
1,476
|
|
|
1,578
|
|
||
Total current liabilities
|
|
49,675
|
|
|
45,405
|
|
||
|
|
|
|
|
||||
Asset retirement obligation
|
|
9,708
|
|
|
9,478
|
|
||
Deferred insurance proceeds
|
|
—
|
|
|
11,700
|
|
||
Other non-current liabilities
|
|
2,354
|
|
|
4,460
|
|
||
Total Liabilities
|
|
61,737
|
|
|
71,043
|
|
||
|
|
|
|
|
||||
Commitments and Contingencies
|
|
|
|
|
||||
|
|
|
|
|
||||
Common stock, $0.001 par value; 100,000,000 shares
|
|
|
|
|
||||
authorized; and 75,207,533 and 75,110,875 shares
|
|
|
|
|
||||
outstanding at December 31, 2011 and 2010, respectively
|
|
75
|
|
|
75
|
|
||
Additional paid-in capital
|
|
564,285
|
|
|
559,675
|
|
||
Accumulated other comprehensive loss
|
|
(1,431
|
)
|
|
(702
|
)
|
||
Retained earnings
|
|
308,204
|
|
|
198,793
|
|
||
Total Stockholders' Equity
|
|
871,133
|
|
|
757,841
|
|
||
Total Liabilities and Stockholders' Equity
|
|
$
|
932,870
|
|
|
$
|
828,884
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2011
|
|
2010
|
|
2009
|
||||||
Sales
|
|
$
|
442,954
|
|
|
$
|
359,304
|
|
|
$
|
301,803
|
|
Less:
|
|
|
|
|
|
|
||||||
Freight costs
|
|
28,339
|
|
|
29,751
|
|
|
21,469
|
|
|||
Warehousing and handling costs
|
|
14,027
|
|
|
10,683
|
|
|
8,432
|
|
|||
Cost of goods sold
|
|
213,670
|
|
|
211,663
|
|
|
127,822
|
|
|||
Costs associated with abnormal production
|
|
—
|
|
|
470
|
|
|
21,525
|
|
|||
Other
|
|
698
|
|
|
666
|
|
|
440
|
|
|||
Gross Margin
|
|
186,220
|
|
|
106,071
|
|
|
122,115
|
|
|||
|
|
|
|
|
|
|
||||||
Selling and administrative
|
|
31,807
|
|
|
29,122
|
|
|
28,375
|
|
|||
Accretion of asset retirement obligation
|
|
750
|
|
|
704
|
|
|
680
|
|
|||
Insurance settlements (income) expense
|
|
|
|
|
|
|
||||||
from property and business losses
|
|
(12,500
|
)
|
|
—
|
|
|
10
|
|
|||
Other (income) expense
|
|
(7,714
|
)
|
|
911
|
|
|
643
|
|
|||
Operating Income
|
|
173,877
|
|
|
75,334
|
|
|
92,407
|
|
|||
|
|
|
|
|
|
|
||||||
Other Income (Expense)
|
|
|
|
|
|
|
||||||
Interest expense, including realized and
|
|
|
|
|
|
|
||||||
unrealized derivative gains and losses
|
|
(869
|
)
|
|
(1,513
|
)
|
|
(806
|
)
|
|||
Interest income
|
|
1,730
|
|
|
819
|
|
|
161
|
|
|||
Other income
|
|
523
|
|
|
403
|
|
|
485
|
|
|||
Income Before Income Taxes
|
|
175,261
|
|
|
75,043
|
|
|
92,247
|
|
|||
|
|
|
|
|
|
|
||||||
Income Tax Expense
|
|
(65,850
|
)
|
|
(29,758
|
)
|
|
(36,905
|
)
|
|||
Net Income
|
|
$
|
109,411
|
|
|
$
|
45,285
|
|
|
$
|
55,342
|
|
|
|
|
|
|
|
|
||||||
Weighted Average Shares Outstanding:
|
|
|
|
|
|
|
||||||
Basic
|
|
75,180,714
|
|
|
75,084,431
|
|
|
75,014,569
|
|
|||
Diluted
|
|
75,281,050
|
|
|
75,154,251
|
|
|
75,042,050
|
|
|||
Earnings Per Share:
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
1.46
|
|
|
$
|
0.60
|
|
|
$
|
0.74
|
|
Diluted
|
|
$
|
1.45
|
|
|
$
|
0.60
|
|
|
$
|
0.74
|
|
|
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Accumulated Other Comprehensive Loss
|
|
Retained Earnings
|
|
Total Stockholders' Equity
|
|||||||||||||
|
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
Balance, December 31, 2008
|
|
74,846,874
|
|
|
$
|
75
|
|
|
$
|
554,743
|
|
|
$
|
(1,385
|
)
|
|
$
|
98,166
|
|
|
$
|
651,599
|
|
Comprehensive income, net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Pension liability adjustment,
net of $456 tax expense |
|
—
|
|
|
—
|
|
|
—
|
|
|
696
|
|
|
—
|
|
|
696
|
|
|||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
55,342
|
|
|
55,342
|
|
|||||
Total comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
56,038
|
|
||||||||||
Stock-based compensation
|
|
6,900
|
|
|
—
|
|
|
2,909
|
|
|
—
|
|
|
—
|
|
|
2,909
|
|
|||||
Vesting of restricted common stock, net
of restricted common stock used to fund employee income tax withholding due upon vesting |
|
183,350
|
|
|
—
|
|
|
(1,324
|
)
|
|
—
|
|
|
—
|
|
|
(1,324
|
)
|
|||||
Balance, December 31, 2009
|
|
75,037,124
|
|
|
75
|
|
|
556,328
|
|
|
(689
|
)
|
|
153,508
|
|
|
709,222
|
|
|||||
Comprehensive income, net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Pension liability adjustment,
net of $28 tax expense |
|
—
|
|
|
—
|
|
|
—
|
|
|
(44
|
)
|
|
—
|
|
|
(44
|
)
|
|||||
Unrealized gain on investment held
for sale |
|
—
|
|
|
—
|
|
|
—
|
|
|
31
|
|
|
—
|
|
|
31
|
|
|||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45,285
|
|
|
45,285
|
|
|||||
Total comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
45,272
|
|
||||||||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
4,016
|
|
|
—
|
|
|
—
|
|
|
4,016
|
|
|||||
Issuance of common stock upon exercise
of stock options
|
|
4,831
|
|
|
—
|
|
|
102
|
|
|
—
|
|
|
—
|
|
|
102
|
|
|||||
Vesting of restricted common stock, net
of restricted common stock used to fund employee income tax withholding due upon vesting |
|
68,920
|
|
|
—
|
|
|
(771
|
)
|
|
—
|
|
|
—
|
|
|
(771
|
)
|
|||||
Balance, December 31, 2010
|
|
75,110,875
|
|
|
75
|
|
|
559,675
|
|
|
(702
|
)
|
|
198,793
|
|
|
757,841
|
|
|||||
Comprehensive income, net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Pension liability adjustment,
net of $451 tax expense |
|
—
|
|
|
—
|
|
|
—
|
|
|
(698
|
)
|
|
—
|
|
|
(698
|
)
|
|||||
Unrealized loss on investments held for sale
|
|
|
|
|
|
|
|
(31
|
)
|
|
|
|
(31
|
)
|
|||||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
109,411
|
|
|
109,411
|
|
|||||
Total comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
108,682
|
|
||||||||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
4,984
|
|
|
—
|
|
|
—
|
|
|
4,984
|
|
|||||
Issuance of common stock upon exercise
of stock options
|
|
14,739
|
|
|
—
|
|
|
330
|
|
|
—
|
|
|
—
|
|
|
330
|
|
|||||
Excess income tax benefit from stock-
based compensation |
|
—
|
|
|
—
|
|
|
413
|
|
|
—
|
|
|
—
|
|
|
413
|
|
|||||
Vesting of restricted common stock, net
of restricted common stock used to fund employee income tax withholding due upon vesting |
|
81,919
|
|
|
—
|
|
|
(1,117
|
)
|
|
—
|
|
|
—
|
|
|
(1,117
|
)
|
|||||
Balance, December 31, 2011
|
|
75,207,533
|
|
|
$
|
75
|
|
|
$
|
564,285
|
|
|
$
|
(1,431
|
)
|
|
$
|
308,204
|
|
|
$
|
871,133
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2011
|
|
2010
|
|
2009
|
||||||
Cash Flows from Operating Activities:
|
|
|
|
|
|
|
||||||
Reconciliation of net income to net cash provided by operating activities:
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
109,411
|
|
|
$
|
45,285
|
|
|
$
|
55,342
|
|
Deferred income taxes
|
|
49,028
|
|
|
30,665
|
|
|
29,063
|
|
|||
Insurance settlements (income) expense from property and business losses
|
|
(12,500
|
)
|
|
—
|
|
|
10
|
|
|||
Items not affecting cash:
|
|
|
|
|
|
|
||||||
Depreciation, depletion, amortization, and accretion
|
|
35,787
|
|
|
27,715
|
|
|
17,327
|
|
|||
Stock-based compensation
|
|
4,984
|
|
|
4,016
|
|
|
2,909
|
|
|||
Unrealized derivative gain
|
|
(1,289
|
)
|
|
(620
|
)
|
|
(1,441
|
)
|
|||
Other
|
|
2,520
|
|
|
1,010
|
|
|
504
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
||||||
Trade accounts receivable
|
|
(5,537
|
)
|
|
(4,598
|
)
|
|
(4,062
|
)
|
|||
Other receivables
|
|
(5,743
|
)
|
|
(690
|
)
|
|
(86
|
)
|
|||
Refundable income taxes
|
|
2,051
|
|
|
2,821
|
|
|
603
|
|
|||
Inventory
|
|
(9,734
|
)
|
|
13,883
|
|
|
(15,807
|
)
|
|||
Prepaid expenses and other assets
|
|
1,383
|
|
|
(1,418
|
)
|
|
1,642
|
|
|||
Accounts payable, accrued liabilities, and accrued employee
compensation and benefits |
|
5,225
|
|
|
6,661
|
|
|
(6,152
|
)
|
|||
Other liabilities
|
|
(1,717
|
)
|
|
(1,436
|
)
|
|
1,212
|
|
|||
Net cash provided by operating activities
|
|
173,869
|
|
|
123,294
|
|
|
81,064
|
|
|||
|
|
|
|
|
|
|
||||||
Cash Flows from Investing Activities:
|
|
|
|
|
|
|
||||||
Additions to property, plant, and equipment
|
|
(135,700
|
)
|
|
(86,822
|
)
|
|
(95,183
|
)
|
|||
Additions to mineral properties and development costs
|
|
(1,414
|
)
|
|
(1,571
|
)
|
|
(6,233
|
)
|
|||
Proceeds from insurance settlements from property and business losses
|
|
806
|
|
|
1,576
|
|
|
10,114
|
|
|||
Proceeds from liquidation of bond sinking fund
|
|
—
|
|
|
—
|
|
|
2,098
|
|
|||
Purchases of investments
|
|
(102,031
|
)
|
|
(81,151
|
)
|
|
(18,479
|
)
|
|||
Proceeds from investments
|
|
63,537
|
|
|
31,672
|
|
|
1,139
|
|
|||
Other
|
|
—
|
|
|
12
|
|
|
23
|
|
|||
Net cash used in investing activities
|
|
(174,802
|
)
|
|
(136,284
|
)
|
|
(106,521
|
)
|
|||
|
|
|
|
|
|
|
||||||
Cash Flows from Financing Activities:
|
|
|
|
|
|
|
||||||
Debt issuance costs
|
|
(1,454
|
)
|
|
—
|
|
|
—
|
|
|||
Employee tax withholding paid for restricted stock upon vesting
|
|
(1,117
|
)
|
|
(771
|
)
|
|
(1,324
|
)
|
|||
Excess income tax benefit from stock-based compensation
|
|
413
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from exercise of stock options
|
|
330
|
|
|
102
|
|
|
—
|
|
|||
Net cash used in financing activities
|
|
(1,828
|
)
|
|
(669
|
)
|
|
(1,324
|
)
|
|||
|
|
|
|
|
|
|
||||||
Net Change in Cash and Cash Equivalents
|
|
(2,761
|
)
|
|
(13,659
|
)
|
|
(26,781
|
)
|
|||
Cash and Cash Equivalents, beginning of period
|
|
76,133
|
|
|
89,792
|
|
|
116,573
|
|
|||
Cash and Cash Equivalents, end of period
|
|
$
|
73,372
|
|
|
$
|
76,133
|
|
|
$
|
89,792
|
|
|
|
|
|
|
|
|
||||||
Supplemental disclosure of cash flow information
|
|
|
|
|
|
|
||||||
Net cash paid (received) during the period for:
|
|
|
|
|
|
|
||||||
Interest, including settlements on derivatives
|
|
$
|
1,348
|
|
|
$
|
2,133
|
|
|
$
|
1,937
|
|
Income taxes
|
|
$
|
13,878
|
|
|
$
|
(3,668
|
)
|
|
$
|
7,239
|
|
Accrued purchases for property, plant, and equipment, and mineral properties and development costs
|
|
$
|
17,350
|
|
|
$
|
18,051
|
|
|
$
|
13,968
|
|
Note 1
|
— COMPANY BACKGROUND
|
Note 2
|
— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
Note 3
|
— EARNINGS PER SHARE
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2011
|
|
2010
|
|
2009
|
||||||
Net income
|
|
$
|
109,411
|
|
|
$
|
45,285
|
|
|
$
|
55,342
|
|
Basic weighted average common shares outstanding
|
|
75,181
|
|
|
75,084
|
|
|
75,015
|
|
|||
Add: Dilutive effect of non-vested restricted common stock
|
|
58
|
|
|
52
|
|
|
25
|
|
|||
Add: Dilutive effect of stock options outstanding
|
|
42
|
|
|
18
|
|
|
2
|
|
|||
Diluted weighted average common shares outstanding
|
|
75,281
|
|
|
75,154
|
|
|
75,042
|
|
|||
Earnings per share:
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
1.46
|
|
|
$
|
0.60
|
|
|
$
|
0.74
|
|
Diluted
|
|
$
|
1.45
|
|
|
$
|
0.60
|
|
|
$
|
0.74
|
|
Note 4
|
— CASH, CASH EQUIVALENTS, AND INVESTMENTS
|
|
December 31,
|
||||||
|
2011
|
|
2010
|
||||
Cash
|
$
|
812
|
|
|
$
|
72
|
|
Commercial paper
|
6,732
|
|
|
54,655
|
|
||
Money market and money market funds
|
65,828
|
|
|
21,406
|
|
||
Total cash and cash equivalents
|
$
|
73,372
|
|
|
$
|
76,133
|
|
|
|
|
|
||||
Corporate bonds
|
$
|
94,700
|
|
|
$
|
31,494
|
|
Convertible corporate bonds
|
—
|
|
|
4,346
|
|
||
Certificates of deposit and time deposits
|
2,542
|
|
|
9,717
|
|
||
Total short-term investments
|
$
|
97,242
|
|
|
$
|
45,557
|
|
|
|
|
|
||||
Corporate bonds
|
$
|
6,180
|
|
|
$
|
20,578
|
|
Certificates of deposit and time deposits
|
—
|
|
|
720
|
|
||
Total long-term investments
|
$
|
6,180
|
|
|
$
|
21,298
|
|
|
|
|
|
||||
Total cash, cash equivalents and investments
|
$
|
176,794
|
|
|
$
|
142,988
|
|
|
|
December 31,
|
||||||
|
|
2011
|
|
2010
|
||||
Product inventory
|
|
$
|
33,084
|
|
|
$
|
24,398
|
|
In-process mineral inventory
|
|
7,789
|
|
|
11,160
|
|
||
Current parts inventory
|
|
14,517
|
|
|
12,536
|
|
||
Total current inventory
|
|
55,390
|
|
|
48,094
|
|
||
Long-term parts inventory
|
|
9,559
|
|
|
7,121
|
|
||
Total inventory
|
|
$
|
64,949
|
|
|
$
|
55,215
|
|
|
|
December 31,
|
|
Range of useful
lives (years)
|
||||||||
|
|
2011
|
|
2010
|
|
Lower Limit
|
|
Upper Limit
|
||||
Buildings and plant
|
|
$
|
100,123
|
|
|
$
|
55,462
|
|
|
4
|
|
25
|
Machinery and equipment
|
|
275,115
|
|
|
190,662
|
|
|
3
|
|
25
|
||
Vehicles
|
|
8,841
|
|
|
8,015
|
|
|
3
|
|
7
|
||
Office equipment and improvements
|
|
14,447
|
|
|
13,333
|
|
|
2
|
|
10
|
||
Ponds and land improvements
|
|
10,019
|
|
|
6,802
|
|
|
5
|
|
25
|
||
Construction in progress
|
|
77,269
|
|
|
77,998
|
|
|
|
|
|
||
Land
|
|
263
|
|
|
263
|
|
|
|
|
|
||
Accumulated depreciation
|
|
(98,654
|
)
|
|
(66,615
|
)
|
|
|
|
|
||
|
|
$
|
387,423
|
|
|
$
|
285,920
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Mineral properties and development costs
|
|
$
|
42,864
|
|
|
$
|
42,288
|
|
|
10
|
|
25
|
Construction in progress
|
|
391
|
|
|
515
|
|
|
|
|
|
||
Accumulated depletion
|
|
(9,773
|
)
|
|
(8,431
|
)
|
|
|
|
|
||
|
|
$
|
33,482
|
|
|
$
|
34,372
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Water rights in “Other Assets”
|
|
$
|
2,670
|
|
|
$
|
2,670
|
|
|
25
|
|
25
|
Accumulated depletion
|
|
(203
|
)
|
|
(172
|
)
|
|
|
|
|
||
|
|
$
|
2,467
|
|
|
$
|
2,498
|
|
|
|
|
|
Note 7
|
— DEBT
|
Note 8
|
— ASSET RETIREMENT OBLIGATION
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2011
|
|
2010
|
|
2009
|
||||||
Asset retirement obligation, at beginning of period
|
|
$
|
9,478
|
|
|
$
|
8,619
|
|
|
$
|
8,138
|
|
Changes in estimated obligations
|
|
(520
|
)
|
|
155
|
|
|
(199
|
)
|
|||
Accretion of discount
|
|
750
|
|
|
704
|
|
|
680
|
|
|||
Total asset retirement obligation, at end of period
|
|
$
|
9,708
|
|
|
$
|
9,478
|
|
|
$
|
8,619
|
|
Note 9
|
— COMPENSATION PLANS
|
|
|
|
|
Weighted Average
Grant-Date Fair Value |
|||
|
|
Shares
|
|
||||
Non-vested restricted common stock, beginning of period
|
|
217,794
|
|
|
$
|
27.96
|
|
Granted
|
|
61,585
|
|
|
$
|
35.80
|
|
Vested
|
|
(104,389
|
)
|
|
$
|
28.56
|
|
Forfeited
|
|
(10,390
|
)
|
|
$
|
30.94
|
|
Non-vested restricted common stock, end of period
|
|
164,600
|
|
|
$
|
30.34
|
|
|
|
Year Ended December 31,
|
|||||||
|
|
2011
|
|
2010
|
|
2009
|
|||
Risk free interest rate
|
|
2.6
|
%
|
|
2.7
|
%
|
|
1.8%-2.0%
|
|
Dividend yield
|
|
—
|
|
|
—
|
|
|
—
|
|
Estimated volatility
|
|
56
|
%
|
|
57
|
%
|
|
44
|
%
|
Expected option life
|
|
6 years
|
|
|
6 years
|
|
|
5 years
|
|
|
|
Shares
|
|
Weighted Average Exercise Price
|
|
Aggregate Intrinsic Value (1)
|
|
Weighted Average Remaining Contractual Life
|
|
Weighted Average Grant-Date Fair Value
|
|
Outstanding non-qualified stock
|
|
|
|
|
|
|
|
|
|
|
|
options, beginning of period
|
|
273,851
|
|
|
$22.69
|
|
|
|
|
|
$10.69
|
Granted
|
|
102,196
|
|
|
35.69
|
|
|
|
|
|
19.59
|
Exercised
|
|
(14,739
|
)
|
|
22.33
|
|
|
|
|
|
10.02
|
Forfeited
|
|
(9,726
|
)
|
|
30.78
|
|
|
|
|
|
16.64
|
Outstanding non-qualified stock
|
|
|
|
|
|
|
|
|
|
|
|
options, end of period
|
|
351,582
|
|
|
$26.26
|
|
$278,391
|
|
8.0
|
|
$13.14
|
|
|
|
|
|
|
|
|
|
|
|
|
Vested or expected to vest, end
|
|
|
|
|
|
|
|
|
|
|
|
of period
|
|
341,394
|
|
|
$26.03
|
|
$278,285
|
|
7.7
|
|
$12.98
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable non-qualified
|
|
|
|
|
|
|
|
|
|
|
|
stock options, end of period
|
|
131,887
|
|
|
$22.00
|
|
$180,672
|
|
7.4
|
|
$9.85
|
(1)
|
The intrinsic value of a stock option is the amount by which the market value exceeds the exercise price as of the end of the period presented.
|
Note 10
|
— INCOME TAXES
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2011
|
|
2010
|
|
2009
|
||||||
Current portion of income tax expense (benefit):
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
12,191
|
|
|
$
|
(2,043
|
)
|
|
$
|
6,226
|
|
State
|
|
4,631
|
|
|
1,136
|
|
|
1,616
|
|
|||
Deferred portion of income tax expense:
|
|
|
|
|
|
|
||||||
Federal
|
|
38,133
|
|
|
26,593
|
|
|
25,279
|
|
|||
State
|
|
10,895
|
|
|
4,072
|
|
|
3,784
|
|
|||
Total income tax expense
|
|
$
|
65,850
|
|
|
$
|
29,758
|
|
|
$
|
36,905
|
|
|
|
December 31,
|
||||||
|
|
2011
|
|
2010
|
||||
|
|
(in thousands)
|
||||||
Current deferred tax assets (liabilities):
|
|
|
|
|
||||
Prepaid expenses
|
|
$
|
(1,866
|
)
|
|
$
|
(1,452
|
)
|
Unrealized loss
|
|
227
|
|
|
1,169
|
|
||
Inventory
|
|
3,382
|
|
|
2,892
|
|
||
Accrued employee compensation and benefits
|
|
2,372
|
|
|
843
|
|
||
Equity compensation
|
|
922
|
|
|
686
|
|
||
Other
|
|
(106
|
)
|
|
(587
|
)
|
||
Total current deferred tax assets
|
|
4,931
|
|
|
3,551
|
|
||
Non-current deferred tax assets:
|
|
|
|
|
||||
Property, plant, equipment and mineral properties, net
|
|
203,257
|
|
|
255,509
|
|
||
Asset retirement obligation
|
|
3,982
|
|
|
3,848
|
|
||
Other
|
|
8,393
|
|
|
6,683
|
|
||
Total non-current deferred tax assets
|
|
215,632
|
|
|
266,040
|
|
||
Total deferred tax asset
|
|
$
|
220,563
|
|
|
$
|
269,591
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2011
|
|
2010
|
|
2009
|
||||||
Federal taxes at statutory rate
|
|
$
|
61,341
|
|
|
$
|
26,272
|
|
|
$
|
32,286
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|||
State taxes, net of federal benefit
|
|
9,072
|
|
|
3,224
|
|
|
4,193
|
|
|||
Domestic production activities deduction
|
|
(994
|
)
|
|
—
|
|
|
(561
|
)
|
|||
Change in blended state tax rate to value deferred tax asset
|
|
(3,699
|
)
|
|
—
|
|
|
—
|
|
|||
Other
|
|
130
|
|
|
262
|
|
|
987
|
|
|||
Net expense (benefit) as calculated
|
|
$
|
65,850
|
|
|
$
|
29,758
|
|
|
$
|
36,905
|
|
|
|
|
|
|
|
|
||||||
Effective tax rate
|
|
37.6
|
%
|
|
39.6
|
%
|
|
40.0
|
%
|
Note 11
|
— COMMITMENTS AND CONTINGENCIES
|
Years Ending December 31,
|
|
(In thousands)
|
||
2012
|
|
$
|
3,370
|
|
2013
|
|
3,132
|
|
|
2014
|
|
2,806
|
|
|
2015
|
|
1,444
|
|
|
2016
|
|
1,398
|
|
|
Thereafter
|
|
3,350
|
|
|
Total
|
|
$
|
15,500
|
|
For the year ended December 31, 2011
|
|
$4,865
|
For the year ended December 31, 2010
|
|
$6,622
|
For the year ended December 31, 2009
|
|
$5,618
|
Note 12
|
— DERIVATIVE FINANCIAL INSTRUMENTS
|
Termination Date
|
|
Notional Amount
|
|
Weighted Average Fixed Rate
|
||
|
|
(In thousands)
|
|
|
||
December 31, 2012
|
|
$
|
22,800
|
|
|
5.26%
|
|
|
December 31, 2011
|
|
December 31, 2010
|
||||||||
Derivatives not designated as hedging instruments
|
|
Balance Sheet Location
|
|
Fair Value
|
|
Balance Sheet Location
|
|
Fair Value
|
||||
Interest rate contracts
|
|
Other current liabilities
|
|
$
|
1,049
|
|
|
Other current liabilities
|
|
$
|
1,399
|
|
Interest rate contracts
|
|
Other non-current liabilities
|
|
—
|
|
|
Other non-current liabilities
|
|
939
|
|
||
Total derivatives not designated as hedging instruments
|
|
Net liability
|
|
$
|
1,049
|
|
|
Net liability
|
|
$
|
2,338
|
|
|
|
Location of gain (loss) recognized in income on derivative
|
|
Year Ended December 31,
|
||||||||||
Derivatives not designated as hedging instruments
|
|
|
2011
|
|
2010
|
|
2009
|
|||||||
Interest rate contracts:
|
|
|
|
|
|
|
|
|
||||||
Realized loss
|
|
Interest expense
|
|
$
|
(1,436
|
)
|
|
$
|
(1,780
|
)
|
|
$
|
(1,614
|
)
|
Unrealized gain
|
|
Interest expense
|
|
1,289
|
|
|
620
|
|
|
1,154
|
|
|||
Total loss
|
|
Interest expense
|
|
$
|
(147
|
)
|
|
$
|
(1,160
|
)
|
|
$
|
(460
|
)
|
|
|
|
|
|
|
|
|
|
||||||
Natural gas contracts:
|
|
|
|
|
|
|
|
|
||||||
Realized loss
|
|
Cost of goods sold
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(448
|
)
|
Unrealized gain
|
|
Cost of goods sold
|
|
—
|
|
|
—
|
|
|
287
|
|
|||
Total loss
|
|
Cost of goods sold
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(161
|
)
|
Note 13
|
— FAIR VALUE MEASUREMENTS
|
•
|
Level 1—Quoted prices in active markets for identical assets and liabilities.
|
•
|
Level 2—Quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar instruments in markets that are not active, and model‑derived valuations whose inputs are observable or whose significant value drivers are observable.
|
•
|
Level 3—Significant inputs to the valuation model are unobservable.
|
|
|
|
|
Fair Value at Reporting Date Using
|
||||||||||||
|
|
December 31, 2011
|
|
Quoted Prices in Active Markets for Identical Assets or Liabilities
(Level 1) |
|
Significant Observable Inputs
(Level 2) |
|
Significant Unobservable Inputs
(Level 3) |
||||||||
Derivatives
|
|
|
|
|
|
|
|
|
||||||||
Interest rate contracts
|
|
$
|
(1,049
|
)
|
|
$
|
—
|
|
|
$
|
(1,049
|
)
|
|
$
|
—
|
|
Note 14
|
— EMPLOYEE BENEFITS
|
|
|
Contributions
|
||
For the year ended December 31, 2011
|
|
$
|
1,293
|
|
For the year ended December 31, 2010
|
|
$
|
1,162
|
|
For the year ended December 31, 2009
|
|
$
|
1,047
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2011
|
|
2010
|
|
2009
|
||||||
Obligations and funded status at period end:
|
|
|
|
|
|
|
||||||
Change in benefit obligation:
|
|
|
|
|
|
|
||||||
Projected benefit obligation at beginning of period
|
|
$
|
3,802
|
|
|
$
|
3,430
|
|
|
$
|
3,253
|
|
Interest cost
|
|
195
|
|
|
201
|
|
|
199
|
|
|||
Benefit payments
|
|
(143
|
)
|
|
(128
|
)
|
|
(121
|
)
|
|||
Actuarial losses
|
|
1,146
|
|
|
299
|
|
|
99
|
|
|||
Plan amendments
|
|
(130
|
)
|
|
—
|
|
|
—
|
|
|||
Projected benefit obligation at end of period
|
|
4,870
|
|
|
3,802
|
|
|
3,430
|
|
|||
Accumulated benefit obligation at end of period
|
|
4,870
|
|
|
3,802
|
|
|
3,430
|
|
|||
Change in plan assets:
|
|
|
|
|
|
|
||||||
Fair value of plan assets at beginning of period
|
|
$
|
2,789
|
|
|
$
|
2,333
|
|
|
$
|
1,973
|
|
Actual return on assets (net of expenses)
|
|
(43
|
)
|
|
310
|
|
|
370
|
|
|||
Employer contributions
|
|
1,155
|
|
|
274
|
|
|
111
|
|
|||
Benefit payments
|
|
(143
|
)
|
|
(128
|
)
|
|
(121
|
)
|
|||
Fair value of plan assets at end of period
|
|
3,758
|
|
|
2,789
|
|
|
2,333
|
|
|||
Unfunded status (1)
|
|
(1,112
|
)
|
|
(1,013
|
)
|
|
(1,097
|
)
|
|||
Items not yet recognized as a component of net periodic
|
|
|
|
|
|
|
||||||
pension cost:
|
|
|
|
|
|
|
||||||
Prior service cost arising during current period
|
|
$
|
(131
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Unrecognized actuarial loss
|
|
$
|
2,501
|
|
|
$
|
1,217
|
|
|
$
|
1,146
|
|
Prepaid / (accrued) benefit cost
|
|
$
|
1,258
|
|
|
$
|
204
|
|
|
$
|
49
|
|
Accumulated other comprehensive income:
|
|
|
|
|
|
|
||||||
Prior service credit
|
|
$
|
(131
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Net loss
|
|
$
|
2,501
|
|
|
$
|
1,217
|
|
|
$
|
1,146
|
|
Assumptions used to determine benefit obligations as of
|
|
|
|
|
|
|
||||||
end of period:
|
|
|
|
|
|
|
||||||
Discount rate
|
|
see below
|
|
|
5.3
|
%
|
|
6.0
|
%
|
|||
Salary scale
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|||
Components of net periodic benefit cost:
|
|
|
|
|
|
|
|
|
|
|||
Interest cost
|
|
$
|
195
|
|
|
$
|
201
|
|
|
$
|
199
|
|
Expected return on assets
|
|
(195
|
)
|
|
(167
|
)
|
|
(138
|
)
|
|||
Amortization of actuarial loss
|
|
101
|
|
|
85
|
|
|
108
|
|
|||
Net period benefit cost
|
|
$
|
101
|
|
|
$
|
119
|
|
|
$
|
169
|
|
Other comprehensive income (loss)
|
|
$
|
1,153
|
|
|
$
|
72
|
|
|
$
|
(240
|
)
|
Amounts included in AOCI expected to be recognized
|
|
|
|
|
|
|
||||||
during the next fiscal year:
|
|
|
|
|
|
|
||||||
Actuarial loss
|
|
227
|
|
|
$
|
101
|
|
|
$
|
85
|
|
|
Assumptions used in computing net periodic benefit cost:
|
|
|
|
|
|
|
||||||
Discount rate
|
|
5.3
|
%
|
|
6.0
|
%
|
|
6.3
|
%
|
|||
Expected return on assets
|
|
7.0
|
%
|
|
7.0
|
%
|
|
7.0
|
%
|
|||
Salary scale
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
(1)
|
As of December 31, 2011, amount is recognized on Intrepid's consolidated balance sheet in "Accrued employee
|
|
|
|
|
Fair Value at Reporting Date Using
|
||||||||||||
Asset Class
|
|
December 31, 2011
|
|
Quoted Prices in Active Markets for Identical Assets or Liabilities
(Level 1) |
|
Significant Observable Inputs
(Level 2) |
|
Significant Unobservable Inputs
(Level 3) |
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
|
||||||||
Money market mutual fund
|
|
$
|
3,000
|
|
|
$
|
3,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Equity securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. large cap equities (1)
|
|
36
|
|
|
36
|
|
|
—
|
|
|
—
|
|
||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
||||||||
Corporate bonds (2)
|
|
374
|
|
|
70
|
|
|
304
|
|
|
—
|
|
||||
Other types of investments:
|
|
|
|
|
|
|
|
|
||||||||
Hedge funds (3)
|
|
348
|
|
|
—
|
|
|
—
|
|
|
348
|
|
||||
Total
|
|
$
|
3,758
|
|
|
$
|
3,106
|
|
|
$
|
304
|
|
|
$
|
348
|
|
|
|
|
|
Fair Value at Reporting Date Using
|
||||||||||||
Asset Class
|
|
December 31, 2010
|
|
Quoted Prices in Active Markets for Identical Assets or Liabilities
(Level 1) |
|
Significant Observable Inputs
(Level 2) |
|
Significant Unobservable Inputs
(Level 3) |
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
|
||||||||
Money market mutual fund
|
|
$
|
177
|
|
|
$
|
177
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Equity securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. large cap equities (1)
|
|
511
|
|
|
511
|
|
|
—
|
|
|
—
|
|
||||
U.S. mid cap growth
|
|
285
|
|
|
285
|
|
|
—
|
|
|
—
|
|
||||
U.S. small cap growth
|
|
168
|
|
|
168
|
|
|
—
|
|
|
—
|
|
||||
International equities
|
|
295
|
|
|
295
|
|
|
—
|
|
|
—
|
|
||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
||||||||
Corporate bonds (2)
|
|
725
|
|
|
440
|
|
|
285
|
|
|
—
|
|
||||
Other types of investments:
|
|
|
|
|
|
|
|
|
||||||||
Hedge funds (3)
|
|
349
|
|
|
—
|
|
|
—
|
|
|
349
|
|
||||
Commodities (4)
|
|
149
|
|
|
149
|
|
|
—
|
|
|
—
|
|
||||
Real estate:
|
|
|
|
|
|
|
|
|
||||||||
REIT mutual funds
|
|
130
|
|
|
130
|
|
|
—
|
|
|
—
|
|
||||
Total
|
|
$
|
2,789
|
|
|
$
|
2,155
|
|
|
$
|
285
|
|
|
$
|
349
|
|
(1)
|
This asset class comprises common stock, exchange‑traded funds, mutual funds, and exchange‑traded limited partnerships.
|
(2)
|
This asset class represents investment grade bonds of U.S. issuers from diverse industries, investment grade bond mutual funds, and a bond partnership fund that may invest in U.S. Government and Agency securities, corporate bonds, mortgages, asset‑backed securities and whole loans, while taking advantage of a range of maturities.
|
(3)
|
This asset class includes a commingled fund of hedge funds which utilize a variety of alternative investment strategies to produce an absolute return on invested capital, largely independent of the various benchmarks associated with traditional asset classes.
|
(4)
|
This asset class provides exposure to broad commodity returns, including real returns from inflation‑indexed Treasuries (TIPS), which are actively managed to add incremental return, and price appreciation in the Dow Jones commodity index.
|
|
|
Fair Value Using Significant Unobservable Inputs
(Level 3) |
||||||||||||||
|
|
Long/Short
Strategies |
|
Distressed Investment Strategies
|
|
Multi-Strategy Arbitrage
|
|
Total
|
||||||||
Ending balance at December 31, 2009
|
|
$
|
143
|
|
|
$
|
68
|
|
|
$
|
117
|
|
|
$
|
328
|
|
Actual return on plan assets still held at the reporting date
|
|
3
|
|
|
8
|
|
|
10
|
|
|
21
|
|
||||
Purchases, sales, and settlements
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Ending balance at December 31, 2010
|
|
$
|
146
|
|
|
$
|
76
|
|
|
$
|
127
|
|
|
$
|
349
|
|
Actual return on plan assets still held at the reporting date
|
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|
(2
|
)
|
||||
Purchases, sales, and settlements
|
|
31
|
|
|
(7
|
)
|
|
(24
|
)
|
|
—
|
|
||||
Ending balance at December 31, 2011
|
|
$
|
176
|
|
|
$
|
68
|
|
|
$
|
103
|
|
|
$
|
347
|
|
Note 15
|
— RECOGNITION OF INCOME ASSOCIATED WITH DEFERRED INSURANCE PROCEEDS
|
Note 16
|
— RELATED PARTIES
|
Note 17
|
— CONCENTRATION OF CREDIT RISK
|
Note 18
|
— QUARTERLY FINANCIAL DATA (UNAUDITED) (in thousands, except per share amounts)
|
|
|
Three Months Ended
|
||||||||||||||
|
|
December 31, 2011
|
|
September 30, 2011
|
|
June 30, 2011
|
|
March 31, 2011
|
||||||||
Sales
|
|
$
|
104,603
|
|
|
$
|
114,000
|
|
|
$
|
119,373
|
|
|
$
|
104,978
|
|
Cost of Goods Sold
|
|
$
|
52,413
|
|
|
$
|
55,547
|
|
|
$
|
53,719
|
|
|
$
|
51,991
|
|
Gross Margin
|
|
$
|
42,758
|
|
|
$
|
47,107
|
|
|
$
|
55,138
|
|
|
$
|
41,217
|
|
Net Income
|
|
$
|
24,917
|
|
|
$
|
25,507
|
|
|
$
|
30,708
|
|
|
$
|
28,279
|
|
Earnings Per Share, Basic
|
|
$
|
0.33
|
|
|
$
|
0.34
|
|
|
$
|
0.41
|
|
|
$
|
0.38
|
|
Earnings Per Share, Diluted
|
|
$
|
0.33
|
|
|
$
|
0.34
|
|
|
$
|
0.41
|
|
|
$
|
0.38
|
|
|
|
Three Months Ended
|
||||||||||||||
|
|
December 31, 2010
|
|
September 30, 2010
|
|
June 30, 2010
|
|
March 31, 2010
|
||||||||
Sales
|
|
$
|
96,156
|
|
|
$
|
91,471
|
|
|
$
|
64,318
|
|
|
$
|
107,359
|
|
Cost of Goods Sold
|
|
$
|
49,182
|
|
|
$
|
53,812
|
|
|
$
|
41,416
|
|
|
$
|
67,253
|
|
Costs Associated with
Abnormal Production |
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
470
|
|
Gross Margin
|
|
$
|
37,646
|
|
|
$
|
26,808
|
|
|
$
|
14,741
|
|
|
$
|
26,876
|
|
Net Income
|
|
$
|
18,178
|
|
|
$
|
11,659
|
|
|
$
|
3,602
|
|
|
$
|
11,846
|
|
Earnings Per Share, Basic
|
|
$
|
0.24
|
|
|
$
|
0.16
|
|
|
$
|
0.05
|
|
|
$
|
0.16
|
|
Earnings Per Share, Diluted
|
|
$
|
0.24
|
|
|
$
|
0.16
|
|
|
$
|
0.05
|
|
|
$
|
0.16
|
|
|
|
|
INTREPID POTASH, INC.
|
|
|
By:
|
/s/ Martin D. Litt
|
Name:
|
Martin D. Litt
|
Title:
|
Executive Vice President and General Counsel
|
|
|
|
HARVEY OPERATING AND PRODCUTION COMPANY
|
|
|
By:
|
/s/ Hugh E. Harvey, Jr.
|
Name:
|
Hugh E. Harvey, Jr.
|
Title:
|
President
|
|
|
|
|
|
|
|
INTREPID PRODUCTION CORPORATION
|
|
|
By:
|
/s/ Robert P. Jornayvaz III
|
Name:
|
Robert P. Jornayvaz III
|
Title:
|
President
|
|
|
|
POTASH ACQUISITION, LLC,
|
|
A dissolved Delaware limited liability company
|
|
|
By:
|
/s/ Gregory A. Sissel
|
Name:
|
Gregory A. Sissel
|
Title:
|
Chief Financial Officer
|
|
|
|
PRV INVESTORS I, LLC
|
|
|
By:
|
/s/ Gregory A. Sissel
|
Name:
|
Gregory A. Sissel
|
Title:
|
Chief Financial Officer
|
|
|
/s/ J. Landis Martin
|
|
J. Landis Martin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
State of Organization
|
Ownership Percentage
|
Intrepid Potash-Moab, LLC
|
Delaware
|
100%
|
Intrepid Potash-New Mexico, LLC
|
New Mexico
|
100%
|
Intrepid Potash-Wendover, LLC
|
Colorado
|
100%
|
Moab Gas Pipeline LLC
|
Colorado
|
100%
|
Intrepid Aviation LLC
|
Colorado
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
1.
|
I have reviewed this annual report on Form 10-K of Intrepid Potash, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's Board of Directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Dated: February 15, 2012
|
|
/s/ ROBERT P. JORNAYVAZ III
|
|
|
Robert P. Jornayvaz III
Executive Chairman of the Board
|
1.
|
I have reviewed this annual report on Form 10-K of Intrepid Potash, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's Board of Directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Dated: February 15, 2012
|
|
/s/ DAVID W. HONEYFIELD
|
|
|
David W. Honeyfield
President and Chief Financial Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
|
Dated: February 15, 2012
|
|
/s/ ROBERT P. JORNAYVAZ III
|
|
|
Robert P. Jornayvaz III
Executive Chairman of the Board
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
|
Dated: February 15, 2012
|
|
/s/ DAVID W. HONEYFIELD
|
|
|
David W. Honeyfield
President and Chief Financial Officer
|
Mine Name and MSHA Identification Number
|
Section 104 S&S Citations
|
Section 104(b) Orders
|
Section 104(d) Citations and Orders
|
Section 110(b)(2) Violations
|
Section 107(a) Orders
|
Total Dollar Value of MSHA Assessments Proposed
|
Total Number of Mining-Related Fatalities
|
Received Notice of Pattern of Violations Under Section 104(e)
|
Received Notice of Potential to Have Pattern under Section 104(e)
|
Legal Actions Pending as of 12/31/2011
|
Legal Actions Initiated During 2011
|
Legal Actions Resolved During 2011
|
Intrepid Potash East
(29-00170)
|
22
|
—
|
—
|
—
|
—
|
$27,926
|
—
|
—
|
—
|
2
|
8
|
7
|
Intrepid Potash West
(29-00175)
|
6
|
—
|
—
|
—
|
—
|
$3,936
|
—
|
—
|
—
|
1
|
4
|
7
|
Intrepid Potash North
(29-02028)
|
1
|
—
|
—
|
—
|
—
|
$1,270
|
—
|
—
|
—
|
2
|
1
|
—
|
HB Potash
(29-00173)
|
—
|
—
|
—
|
—
|
—
|
$—
|
—
|
—
|
—
|
—
|
—
|
—
|
•
|
General -
In general, the number of citations and orders will vary depending on the size of the mine, the individual inspector assigned to the mine and the specific mine characteristics. Citations and orders can be contested and appealed and, in that process, are often reduced in severity and amount and are sometimes vacated.
|
•
|
Mine Identification Numbers -
MSHA assigns an identification number to each mine and may or may not assign separate identification numbers to related facilities. We provide the information in the table by MSHA identification number.
|
•
|
Section 104 Significant and Substantial (“S&S”) Citations
- These citations are issued for alleged violations of a mining safety standard or regulation where there exists a reasonable likelihood that the hazard contributed to or will result in an injury or illness of a reasonably serious nature.
|
•
|
Section 104(b) Orders
- These orders are issued for alleged failure to totally abate the subject matter of a Section 104(a) citation within the period specified in the citation.
|
•
|
Section 104(d) Citations and Orders
- These citations and orders are issued for an alleged unwarrantable failure (i.e. aggravated conduct constituting more than ordinary negligence) to comply with a mining safety standard or regulation.
|
•
|
Section 110(b)(2) Violations
- These violations are issued, and penalties are assessed, for flagrant violations (i.e., a reckless or repeated failure to make reasonable efforts to eliminate a known violation that substantially and proximately caused, or reasonably could have been expected to cause, death or serious bodily injury).
|
•
|
Section 107(a) Orders -
These orders are issued for an imminent danger to immediately remove miners.
|
•
|
Total Dollar Value of MSHA Assessments Proposed
- Proposed assessments issued during 2011 do not necessarily relate to the citations or orders issued by MSHA during 2011 or to the pending legal actions reported in the table.
|
•
|
Notice of Pattern of Violations Under Section 104(e); Received Notice of Potential to Have Pattern under Section 104(e) -
These notices are issued for a pattern of violation of mandatory health or safety standards or for the potential to have such a pattern.
|
•
|
Legal Actions Pending as of 12/31/11; Legal Actions Initiated During 2011; Legal Actions Resolved During 2011 -
The Federal Mine Safety and Health Review Commission (the “Commission”) is an independent adjudicative agency that provides administrative trial and appellate review of legal disputes arising under the Mine Act. Each legal action is assigned a docket number by the Commission and may have as its subject matter one or more citations, orders, penalties or complaints. The table below summarizes the types of legal actions that were pending as of December 31, 2011:
|
Mine Name and MSHA Identification Number
|
Legal Actions Pending as of 12/31/2011
|
|
|||||
Contests of Citations and Orders
|
Contests of Proposed Penalties
|
Complaints for Compensation
|
Complaints of Discharge, Discrimination or Interference
|
Applications for Temporary Relief
|
Appeals of Judges' Decisions or Orders
|
Total
|
|
Intrepid Potash East
(29-00170)
|
—
|
2
|
—
|
—
|
—
|
—
|
2
|
Intrepid Potash West
(29-00175)
|
—
|
1
|
—
|
—
|
—
|
—
|
1
|
Intrepid Potash North
(29-02028)
|
—
|
2
|
—
|
—
|
—
|
—
|
2
|
HB Potash
(29-00173)
|
—
|
—
|
—
|
—
|
—
|
—
|
|
•
|
Contests of Citations and Orders
relate to challenges by operators, miners or miners' representatives to the issuance of a citation or order issued by MSHA.
|
•
|
Contests of Proposed Penalties (Petitions for Assessment of Penalties)
are administrative proceedings challenging a civil penalty that MSHA has proposed for the violation contained in a citation or order.
|
•
|
Complaints for Compensation
are filed by miners entitled to compensation when a mine is closed by certain withdrawal orders issued by MSHA for the purpose of determining the amount of compensation, if any, due miners idled by the orders.
|
•
|
Complaints of Discharge, Discrimination or Interference
involve a miner's allegation that he or she has suffered a wrong by the operator because he or she engaged in some type of activity protected under the Mine Act, such as making a safety complaint, or that he or she has suffered discrimination and lost his or her position.
|