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FORM 10-K
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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, 2016
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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
¨
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Accelerated filer
x
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Non‑accelerated filer
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(Do not check if a smaller reporting company) |
Smaller reporting company
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•
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"Intrepid," "our," "we," or "us" means Intrepid Potash, Inc. and its consolidated subsidiaries.
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•
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"East," "North," and "HB" mean our three operating facilities in Carlsbad, New Mexico. "Moab" means our operating facility in Moab, Utah. "Wendover" means our operating facility in Wendover, Utah. "West" means our previous operating facility in Carlsbad, New Mexico, which was placed in care-and-maintenance mode in mid‑2016. You can find more information about our facilities in Item 2 of this Annual Report on Form 10-K.
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"Ton" means a short ton, or a measurement of mass equal to 2,000 pounds.
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ITEM 1.
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BUSINESS
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•
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Expanding Trio
®
sales.
Over the long term, we believe demand for Trio
®
will exceed supply, providing an opportunity to increase our gross margin. In light of this opportunity, in mid-2016, we transitioned our East facility to a Trio
®
-only facility, which significantly increased our production rate and our effective production capacity for Trio
®
. We continue our efforts to expand our sales and marketing efforts for Trio
®
, particularly internationally. We operate our East facility at production levels that approximate demand and expect to continue to do so for the foreseeable future.
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•
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Maximize potash margin.
In 2016, we idled potash production at our West and East conventional mines due in part to declining potash pricing. As a result, all of our potash production now comes from solar solution mines, which carry a lower cost structure than our previous conventional potash mines. With our lower cost structure and lower production, we are able to selectively participate in the markets that provide the highest average net realized sales price per ton. We have the advantage of being located close to the markets we serve, and the North American market is significantly larger than our production capacity. We also attempt to maximize our gross margin by leveraging our freight advantage to key geographies, our diverse customer and market base, and our flexible marketing approach.
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•
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Expand marketing and sales of by-products and other products.
We are in the process of implementing or considering a number of initiatives designed to maximize the value of our existing assets, such as increased production and sales of salt, water, and brine. In addition, we may enter into new or complementary businesses
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•
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Optimize potash production.
We have optimization and expansion opportunities at our solution mining facilities that, over time, could reduce our per-ton costs and increase our potash production. For example, we have potential expansion opportunities at our HB mine. Our per-ton costs are lower for solution mining than conventional mining as solution mining requires less labor, energy, and equipment. In addition, if potash prices increase significantly, we could restart potash production at our West mine.
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•
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Evaluate strategic alternatives.
Under the terms of our senior notes, in December 2016 we engaged Cantor Fitzgerald & Co., a nationally-recognized investment bank, to assess, evaluate, and assist in pursuing potential strategic alternatives available to us, as we determine to be appropriate. These potential strategic alternatives could include, but are not limited to, continuing our current operating plan, equity offerings or balance sheet restructurings, merger and acquisition opportunities, partnership or joint venture opportunities, entering into new or complementary businesses, or a sale of Intrepid or some or all of our assets. This evaluation is ongoing.
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•
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U.S.-based producer.
We are the only producer of potash in the United States. We are located in a market that consumes significantly more potash than we can produce on an annual basis. Our geographic location provides us with a transportation advantage over our competitors for shipping our product to our customers. In general, this allows us to obtain a higher average net realized sales price per ton 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 per ton. Our access to strategic rail destination points and our location along major agricultural trucking routes support this advantage.
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•
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Solar evaporation operations.
The HB mine, located in the New Mexico desert, the Moab mine and the Wendover facility, both located in the Utah desert, use solar evaporation to crystallize potash from brines. Solar evaporation is a cost efficient production method because it significantly reduces our labor and energy consumption, which are two of the largest costs of production. Our understanding and application of low cost solution mining, combined with our reserves being located where a favorable climate for evaporation exists, make solar solution mining difficult for other producers to replicate. We also have significant reserves for future expansion of our solution mining operations.
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•
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Participation in specialty markets.
Given the greater scarcity of langbeinite relative to potash and its agronomic suitability for certain soils and crops, we believe there is a market for Trio
®
outside of our core potash markets. We also believe that there is a market for Trio
®
beyond the United States, and we are working to capture and grow this market. Through our existing operations and assets, we also have the potential to grow our offerings of salt, water, and brine with low capital investments.
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•
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Diversity of potash markets.
We sell potash into three different markets—the agricultural, industrial, and feed markets. During 2016, these markets represented approximately
89%
,
5%
, and
6%
of our potash sales, respectively. The agricultural market supplies farmers producing a wide range of crops in different geographies. In addition, based on our geographic proximity to increased activity in the oil and gas sector, we believe we have an opportunity to increase our industrial sales volumes to more historical percentages of our total volume.
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•
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Marketing flexibility.
We have the ability to convert all of our standard-sized potash product into granular-sized product as market conditions warrant. This also provides us with increased marketing flexibility as well as decreased dependence on any one particular market.
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•
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Significant reserve life and water rights.
Our potash and langbeinite reserves each have substantial years of reserve life, with remaining reserve lives ranging from 16 years to greater than 100 years, based on proven and
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•
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Existing facilities and infrastructure.
Constructing a new potash production facility requires substantial time and extensive capital investment in mining, milling, and infrastructure to process, store and ship product. Our operating facilities already have significant facilities and infrastructure in place. We also 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. In addition, if potash prices significantly increase, we could restart potash production at our West mine, which has been in care-and-maintenance mode since mid-2016.
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Name
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Age
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Position
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Robert P. Jornayvaz III
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58
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Executive Chairman of the Board, President, and Chief Executive Officer
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James N. Whyte
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58
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Executive Vice President
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Brian D. Frantz
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54
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Senior Vice President and Chief Accounting Officer
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John G. Mansanti
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61
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Senior Vice President of Strategic Initiatives and Technical Services
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Margaret E. McCandless
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44
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Vice President, General Counsel, and Secretary
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Jeffrey C. Blair
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44
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Vice President of Sales and Marketing
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ITEM 1A.
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RISK FACTORS
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•
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it could 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
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•
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it could limit our flexibility in planning for, or reacting to, changes in our business
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•
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we could be more highly leveraged than some of our competitors, which could place us at a competitive disadvantage
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•
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it could make us more vulnerable to a downturn in our business or the economy
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•
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it could require us to dedicate a substantial portion of our cash flow from operations to the repayment of our indebtedness, thereby reducing the availability of our cash flow for other purposes
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•
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it could adversely affect our business and financial condition if we default on or are unable to service our indebtedness or are unable to obtain additional financing, as needed
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•
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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
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•
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future potash prices, operating costs, capital expenditures, royalties, severance and excise taxes, and development and reclamation costs
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•
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future mining technology improvements
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•
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the effects of governmental regulation
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•
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variations in mineralogy
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•
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changes in the interpretation of environmental laws
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•
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modifications to current environmental laws
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•
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the issuance of more stringent environmental laws
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•
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malfunctioning process or pollution control equipment
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•
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factors relating to our evaluation and assessment of potential strategic alternatives
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•
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our operating performance and the performance of our competitors
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•
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the public's reaction to our press releases, other public announcements or filings with the SEC
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•
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changes in earnings estimates or recommendations by research analysts who follow us or other companies in our industry
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•
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variations in general economic, market, and political conditions
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•
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changes in certain commodity prices or foreign currency exchange rates
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•
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actions of our current stockholders, including sales of common stock by our directors and executive officers
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•
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the arrival or departure of key personnel
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•
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other developments affecting us, our industry, or our competitors
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•
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the other risks described in this report
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•
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our pre-existing stockholders' proportionate ownership interest in us will decrease
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•
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the relative voting strength of each previously outstanding common share may be diminished
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•
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the market price of the common stock may decline
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•
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allow our board of directors to create and issue preferred stock with rights senior to those of our common stock without prior stockholder approval, except as may be required by applicable NYSE rules
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•
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do not permit cumulative voting in the election of directors, which would otherwise allow less than a majority of stockholders to elect director candidates
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•
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prohibit stockholders from calling special meetings of stockholders
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•
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prohibit stockholders from acting by written consent, thereby requiring all stockholder actions to be taken at a meeting of our stockholders
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•
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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
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•
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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
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•
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classify our board of directors so that only some of our directors are elected each year
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ITEM 1B.
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UNRESOLVED STAFF COMMENTS
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ITEM 2.
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PROPERTIES
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(tons in thousands)
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Proven
4
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Probable
7
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Product/Operations
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Date Mine Opened
2
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Current Extraction Method
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Minimum Remaining Life (years)
3
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Recoverable Ore Tons
5
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Ore Grade
6
(% KCl)
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Product Tons as KCl
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Recoverable Ore Tons
5
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Ore Grade
6
(% KCl)
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Product Tons as KCl
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||||||
Potash
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West
2
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1931
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Underground
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75
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112,430
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22.9
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%
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21,380
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59,920
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22.0
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%
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11,070
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East
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1965
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Underground
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16
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25,320
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21.9
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%
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4,260
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17,160
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22.5
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%
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2,920
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HB Mine
2, 9
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2012
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Solution
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40
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19,180
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36.7
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%
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6,430
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2,190
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40.2
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%
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800
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Moab
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1965
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Solution
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100+
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30,160
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42.5
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%
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12,000
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32,110
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44.0
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%
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14,800
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Wendover
10
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1932
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Brine Evaporation
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30
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—
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—
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—
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—
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0.7
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%
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3,170
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Total Potash
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30.2
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%
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44,070
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30.4
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%
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32,760
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(tons in thousands)
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Proven
4
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Probable
7
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||||||||||||||
Product/Operations
|
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Date Mine Opened
2
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Current Extraction Method
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Minimum Remaining Life (years)
3
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Recoverable Ore Tons
5
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Ore Grade
6
(% Lang)
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Product Tons as Langbeinite
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Recoverable Ore Tons
5
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Ore Grade
6
(% Lang)
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Product Tons as Langbeinite
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||||||
Langbeinite
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East
8,11
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1965
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Underground
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100+
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102,880
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|
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26.0
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%
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32,060
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79,430
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|
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26.9
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%
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24,960
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1
|
The determination of estimated reserves has been prepared by us and is based on an independent review and analysis of our mine plans and geologic, financial and other data by Agapito, which is familiar with our mines. The most recent review performed by Agapito for the New Mexico East, West, and HB properties was in 2016. Agapito's analysis for the West, East and HB mines was based on detailed examination of our geologic site data and mine plan, which was updated with information from 2016, 2015, and 2014. As a result of Agapito's 2016 review, sylvite reserves in the West and East mines and the langbeinite reserves in the East mine decreased compared to previously reported reserves. The reduction was primarily due to an increased economic cut-off grade for both sylvite and langbeinite ore reserves and for depletion for the 2016 production from both mines. The HB mine reserve estimate decreased due to depletion for 2016 production from the HB mine. The Moab property reserves are based on Agapito's 2015 mine reserve estimate adjusted for depletion for the 2016 production. The Wendover property reserves are based on Agapito's 2015 brine aquifer reserve estimate. However, depletion did not change the reserve life of 30 years as discussed in footnote 3 below. 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.
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2
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These mines, excluding the HB and West mines, have operated in a substantially continuous manner since the dates set forth in this table. The HB mine was originally opened in 1934 and operated continuously as an underground mine until 1996. In July 2016, we transitioned our West facility into care-and-maintenance mode due to the decline in potash prices.
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3
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Minimum remaining lives are calculated by dividing reserves by annual effective capacity. Effective capacity is the estimated amount of production that will likely be achieved based on the amount and quality of ore that we estimate can be mined, milled, and/or processed, assuming an estimated average reserve grade, potential future modifications to the systems, a normal amount of scheduled down time, average or typical mine development efforts and operation of all of our mines and facilities at or near full capacity. Minimum remaining lives at the West, East, HB mine, and Moab mines are based on reserves (product tons) divided by annual effective capacity over the full expected life of the ore body, and corrections for purity: one ton of red muriate of potash equals 0.95 ton of KCl; one ton of Moab white muriate of potash equals 0.97 ton of KCl; one ton of sulfate of potash magnesia equals 0.97 ton of langbeinite. East langbeinite minimum remaining life was based on a langbeinite-only plant and associated plant capacity. Langbeinite-only production commenced in April 2016 at the East facility and the sylvite plant was shut down at that time. The West facility was shut down and placed into care-and-maintenance mode in July 2016 due to low potash prices. If we decided to produce potash from our East and West mine sylvite ore reserves in the future, we expect that we would reopen the West facility and be required to construct a new plant to replace the East sylvite plant closed in 2016 to process the remaining reserves. Calculated mine lives that exceed 100 years are reported at 100+ years to balance the reserve life with the uncertainties associated with those extended time frames. We
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4
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Generally, "proven reserves" are reserves for which (a) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes; grade and/or quality are computed from the results of detailed sampling, and (b) the sites for inspection, sampling and measurement are spaced so closely and the geologic character is so well-defined that the size, shape, and depth and mineral content of the reserves are well-established. Proven reserve tonnages are 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, or channel samples in mine workings. This classification has the highest degree of geologic assurance. The data points 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.
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5
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Recovery is the percentage of valuable material in the ore that is beneficiated prior to further treatment to develop a saleable product. Recoverable ore tons is defined as the hoisted ore for the conventionally mined ore in our 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 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.
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6
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Ore grade expressed as expected mill feed grade to account for minimum mining height for the East and West mines. Potash ore grade is reported in % KCl and langbeinite ore grade is reported in % langbeinite. The ore grade for the Moab and HB mines is the in-place KCl grade.
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7
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"Probable reserves" are reserves for which quantity and grade and/or quality are computed from information similar to that used for proven (measured) reserves, but the sites for inspection, sampling and measurement are farther apart or are otherwise less adequately spaced. The degree of assurance of probable (indicated) reserves, although lower than that for proven (measured) reserves, is high enough to assume geological continuity between points of observation. The classification of minerals as probable reserves requires that we believe with reasonable certainty that access to the reserves can be obtained, even though currently-issued permits are not required. Probable reserve tonnages are 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 or in mine workings for a distance beyond potash classified as proven reserves. This classification has a moderate degree of geological assurance.
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8
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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
SO
4
(MgSO
4
)
2
) separately. Ore reserves in the East 5
th
ore zone contain both sylvite and langbeinite which we call mixed ore. We ceased processing sylvite at the East facility in April 2016, and only the langbeinite ore contained in the East 5
th
ore zone is included in the mine reserve estimate. Additionally, the reserve amounts include West mine 3
rd
and 4
th
ore zones which contain langbeinite that we anticipate will be processed at the East facility.
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9
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The HB 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. The data presented here includes reserves available via the AMAX/Horizon mine as further described below under
Our Development Assets
.
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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 there is uncertainty of the hydrogeology of the deep aquifer. The estimating method for the shallow aquifer was based on brine concentration, brine density, soil porosity within the aquifer, and aquifer thickness from historical reports. The brine concentrations and brine density were confirmed by us recently, but values for the aquifer thickness and the porosity were obtained from literature published by other sources. Probable reserves for the shallow brine at the Wendover facility were calculated from KCl contained in the shallow aquifer based on estimates of porosity and thickness over the reserve area. The distance for projection of probable reserves is a radius of three‑quarters of a mile from points of measurement of brine concentration. Probable reserves for the deep-brine aquifer were estimated based on historical draw-down and KCl brine concentrations. The ore grade (% KCl) for both the shallow and deep aquifer is the percentage by weight of KCl in the brine.
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11
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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.
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•
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The HB mine has a current estimated productive capacity of 180,000 tons annually. The productive capacity may vary between approximately 160,000 and 200,000 tons of potash. Potash produced from our HB mine is shipped to the North facility for compaction.
|
•
|
Potash ore at Moab is mined from two stacked ore zones: the original mine workings in Potash 5 and the horizontal caverns in Potash 9.
|
•
|
The Moab mine has a current estimated productive capacity of approximately 110,000 tons of potash annually; evaporation rates have historically varied and, consequently, productive capacity may vary between approximately 75,000 and 120,000 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 West Desert. 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 approximately 65,000 and 100,000 tons of potash.
|
•
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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.
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•
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The West mine was idled in July 2016 and placed in care-and-maintenance mode. When operational, it has an estimated productive capacity of approximately 400,000 tons of red potash annually. Potash produced from our West mine is shipped to the North facility for compaction.
|
•
|
The East mine was converted to a Trio
®
-only operation in April 2016 and potash is no longer produced from the East mine. The Trio
®
productive capacity of the East mine increased in 2016 as a result of transition to a Trio
®
‑only operation. The East mine has a current estimated productive capacity of approximately 400,000 tons of Trio
®
annually, based on current design.
|
•
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The North facility receives compactor feed from the West, when operating, and HB facilities via truck and converts the compactor feed to finished granular-sized product and standard-sized product.
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•
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We acquired the potash leases associated with the AMAX/Horizon mine in October 2012. The AMAX/Horizon mine was in continuous operation between 1952 and 1993. This mine, similar to the HB mine, is a viable candidate for solution mining in a manner that is consistent with the HB mine.
|
•
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State and federal permits were obtained in 2015 to utilize these leases for solution mining. The AMAX/Horizon solution mine is expected to utilize the same evaporation ponds and processing mill as the HB mine. We have not yet made a determination to proceed with this potential development project; however, future work may be performed to determine the ability to convert this idled underground mine to a solution mining opportunity.
|
•
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As noted in footnote 9 to Our Proven and Probable Reserves table, these tons are included in the data presented for the HB Mine.
|
•
|
The North mine operated from 1957 to 1982 when it was idled mainly due to low potash prices and mineralogy changes which negatively impacted mineral processing at the facilities. Although the mining and processing equipment has been removed, the mine shafts remain open. The compaction facility at the North mine is where we granulate, store, and ship potash produced at the HB mine (and previously the West mine). Two abandoned mine shafts, rail access, storage facilities, water rights, utilities and leases covering potash deposits, are already in place. As part of our long-term mine planning efforts, we may choose to evaluate our strategic development options with respect to the shafts at the North mine and their access to mineralized deposits of potash.
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(tons in thousands)
|
|
Year Ended December 31,
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|||||||||||||||||||||||||
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2016
|
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2015
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2014
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|||||||||||||||||||||
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Ore Production
|
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Mill Feed Grade
1
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Finished Product
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Ore Production
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Mill Feed Grade
1
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Finished Product
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Ore Production
|
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Mill Feed Grade
1
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Finished Product
|
|||||||||
Potash
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|
|
|
|||||||||
West
|
|
1,425
|
|
|
11.9
|
%
|
|
191
|
|
|
2,532
|
|
|
11.1
|
%
|
|
322
|
|
|
2,991
|
|
|
10.9
|
%
|
|
352
|
|
East
2
|
|
1,935
|
|
|
7.9
|
%
|
|
32
|
|
|
2,368
|
|
|
7.8
|
%
|
|
145
|
|
|
2,535
|
|
|
8.8
|
%
|
|
217
|
|
HB
|
|
587
|
|
|
16.1
|
%
|
|
124
|
|
|
695
|
|
|
14.9
|
%
|
|
134
|
|
|
623
|
|
|
14.3
|
%
|
|
98
|
|
Moab
|
|
429
|
|
|
16.6
|
%
|
|
97
|
|
|
411
|
|
|
16.0
|
%
|
|
93
|
|
|
457
|
|
|
14.9
|
%
|
|
95
|
|
Wendover
|
|
239
|
|
|
16.3
|
%
|
|
49
|
|
|
379
|
|
|
16.2
|
%
|
|
74
|
|
|
462
|
|
|
17.2
|
%
|
|
97
|
|
|
|
4,615
|
|
|
|
|
493
|
|
|
6,385
|
|
|
|
|
768
|
|
|
7,068
|
|
|
|
|
859
|
|
|||
Langbeinite
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
East
2
|
|
1,935
|
|
|
6.2
|
%
|
|
279
|
|
|
2,368
|
|
|
4.7
|
%
|
|
162
|
|
|
2,535
|
|
|
4.3
|
%
|
|
160
|
|
Total Primary Products
|
|
|
|
772
|
|
|
|
|
|
|
930
|
|
|
|
|
|
|
1,019
|
|
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
|
2016
|
|
|
|
Quarter ended December 31, 2016
|
$3.04
|
|
$0.93
|
Quarter ended September 30, 2016
|
$1.68
|
|
$1.05
|
Quarter ended June 30, 2016
|
$1.83
|
|
$0.85
|
Quarter ended March 31, 2016
|
$3.26
|
|
$0.65
|
2015
|
|
|
|
Quarter ended December 31, 2015
|
$7.14
|
|
$2.63
|
Quarter ended September 30, 2015
|
$12.02
|
|
$5.35
|
Quarter ended June 30, 2015
|
$13.24
|
|
$10.85
|
Quarter ended March 31, 2015
|
$15.09
|
|
$10.92
|
|
|
|
|
|
|
|
Dow Jones U.S.
|
||||||||
|
IPI
|
|
Peer Group
|
|
S&P 500
|
|
Basic Materials
|
||||||||
December 31, 2011
|
$
|
100.00
|
|
|
$
|
100.00
|
|
|
$
|
100.00
|
|
|
$
|
100.00
|
|
December 31, 2012
|
$
|
94.84
|
|
|
$
|
112.92
|
|
|
$
|
116.00
|
|
|
$
|
110.49
|
|
December 31, 2013
|
$
|
70.56
|
|
|
$
|
95.41
|
|
|
$
|
153.57
|
|
|
$
|
133.00
|
|
December 31, 2014
|
$
|
61.83
|
|
|
$
|
98.63
|
|
|
$
|
174.60
|
|
|
$
|
137.51
|
|
December 31, 2015
|
$
|
13.14
|
|
|
$
|
62.32
|
|
|
$
|
177.01
|
|
|
$
|
120.42
|
|
December 31, 2016
|
$
|
9.27
|
|
|
$
|
67.97
|
|
|
$
|
198.18
|
|
|
$
|
144.83
|
|
ITEM 6.
|
SELECTED FINANCIAL DATA
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Sales
|
|
$
|
210,948
|
|
|
$
|
287,183
|
|
|
$
|
410,389
|
|
|
$
|
336,312
|
|
|
$
|
451,316
|
|
Net (loss) Income
|
|
$
|
(66,633
|
)
|
|
$
|
(524,776
|
)
|
|
$
|
9,761
|
|
|
$
|
22,275
|
|
|
$
|
87,443
|
|
(Loss) Earnings Per Share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic
|
|
$
|
(0.88
|
)
|
|
$
|
(6.94
|
)
|
|
$
|
0.13
|
|
|
$
|
0.30
|
|
|
$
|
1.16
|
|
Diluted
|
|
$
|
(0.88
|
)
|
|
$
|
(6.94
|
)
|
|
$
|
0.13
|
|
|
$
|
0.30
|
|
|
$
|
1.16
|
|
Cash dividends declared and paid per common share
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.75
|
|
|
|
December 31,
|
||||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Total assets
|
|
$
|
540,901
|
|
|
$
|
639,969
|
|
|
$
|
1,166,119
|
|
|
$
|
1,174,590
|
|
|
$
|
994,623
|
|
Total debt
|
|
$
|
133,434
|
|
|
$
|
149,485
|
|
|
$
|
149,402
|
|
|
$
|
149,318
|
|
|
$
|
—
|
|
|
|
December 31,
|
||||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Cash, cash equivalents and investments
|
|
$
|
4,464
|
|
|
$
|
63,629
|
|
|
$
|
89,879
|
|
|
$
|
25,113
|
|
|
$
|
57,747
|
|
Stockholders' equity
|
|
$
|
363,371
|
|
|
$
|
426,526
|
|
|
$
|
947,285
|
|
|
$
|
933,971
|
|
|
$
|
905,736
|
|
ITEM 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
|
(in thousands)
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Sales
|
|
$
|
210,948
|
|
|
$
|
287,183
|
|
|
$
|
410,389
|
|
|
|
|
|
|
|
|
||||||
Cost of goods sold
2
|
|
$
|
170,852
|
|
|
$
|
217,821
|
|
|
$
|
303,914
|
|
|
|
|
|
|
|
|
||||||
Gross (Deficit) Margin
|
|
$
|
(29,247
|
)
|
|
$
|
(15,477
|
)
|
|
$
|
42,004
|
|
Net (Loss) Income
|
|
$
|
(66,633
|
)
|
|
$
|
(524,776
|
)
|
|
$
|
9,761
|
|
Production volume (in thousands of tons):
|
|
|
|
|
|||||
Potash
|
|
493
|
|
|
768
|
|
|
859
|
|
Langbeinite
|
|
279
|
|
|
162
|
|
|
160
|
|
Sales volume (in thousands of tons):
|
|
|
|
|
|
|
|||
Potash
|
|
681
|
|
|
587
|
|
|
915
|
|
Trio
®
|
|
146
|
|
|
163
|
|
|
182
|
|
Average Net Realized Sales Price per Ton
1
|
|
|
|
|
||||||||
Potash
|
|
$
|
195
|
|
|
$
|
339
|
|
|
$
|
332
|
|
Trio
®
|
|
$
|
287
|
|
|
$
|
364
|
|
|
$
|
349
|
|
|
|
Year Ended December 31,
|
||||||||||
(in thousands)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Sales
|
|
$
|
159,494
|
|
|
$
|
217,467
|
|
|
$
|
334,323
|
|
Less: Freight costs
|
|
26,661
|
|
|
18,262
|
|
|
30,615
|
|
|||
Warehousing and handling costs
|
|
8,439
|
|
|
11,213
|
|
|
10,742
|
|
|||
Cost of goods sold
4
|
|
134,017
|
|
|
172,355
|
|
|
254,753
|
|
|||
Lower-of-cost-or-market inventory adjustments
|
|
18,380
|
|
|
31,772
|
|
|
8,186
|
|
|||
Costs associated with abnormal production and other
|
|
649
|
|
|
10,405
|
|
|
—
|
|
|||
Gross (Deficit) Margin
|
|
$
|
(28,652
|
)
|
|
$
|
(26,540
|
)
|
|
$
|
30,027
|
|
Depreciation, depletion and amortization incurred
2, 3
|
|
$
|
37,936
|
|
|
$
|
68,562
|
|
|
$
|
67,712
|
|
Sales Volumes (tons in thousands)
|
|
681
|
|
|
587
|
|
|
915
|
|
|||
Production Volumes (tons in thousands)
|
|
493
|
|
|
768
|
|
|
859
|
|
|||
Average Net Realized Sales Price per Ton
1
|
|
$
|
195
|
|
|
$
|
339
|
|
|
$
|
332
|
|
|
|
Year Ended December 31,
|
||||||||||
(in thousands)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Sales
|
|
$
|
51,454
|
|
|
$
|
69,716
|
|
|
$
|
76,066
|
|
Less: Freight costs
|
|
9,595
|
|
|
10,461
|
|
|
12,608
|
|
|||
Warehousing and handling costs
|
|
2,567
|
|
|
2,726
|
|
|
2,320
|
|
|||
Cost of goods sold
|
|
36,835
|
|
|
45,466
|
|
|
49,161
|
|
|||
Lower-of-cost-or-market inventory adjustments
|
|
1,994
|
|
|
—
|
|
|
—
|
|
|||
Costs associated with abnormal production and other
|
|
1,058
|
|
|
—
|
|
|
—
|
|
|||
Gross (Deficit) Margin
|
|
$
|
(595
|
)
|
|
$
|
11,063
|
|
|
$
|
11,977
|
|
Depreciation, depletion and amortization incurred
2, 3
|
|
$
|
3,836
|
|
|
$
|
16,993
|
|
|
$
|
11,433
|
|
Sales Volumes (tons in thousands)
|
|
146
|
|
|
163
|
|
|
182
|
|
|||
Production Volumes (tons in thousands)
|
|
279
|
|
|
162
|
|
|
160
|
|
|||
Average Net Realized Sales Price per Ton
1
|
|
$
|
287
|
|
|
$
|
364
|
|
|
$
|
349
|
|
Trio
®
only
|
|
United States
|
|
Export
|
||
For the year ended December 31, 2016
|
|
94
|
%
|
|
6
|
%
|
For the year ended December 31, 2015
|
|
91
|
%
|
|
9
|
%
|
For the year ended December 31, 2014
|
|
91
|
%
|
|
9
|
%
|
|
|
Year ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
(In thousands)
|
||||||||||
Cash flows (used in) provided by operating activities
|
|
$
|
(18,270
|
)
|
|
$
|
22,690
|
|
|
$
|
127,486
|
|
Cash flows provided by (used in) investing activities
|
|
$
|
32,510
|
|
|
$
|
(79,577
|
)
|
|
$
|
(59,624
|
)
|
Cash flows used in financing activities
|
|
$
|
(19,083
|
)
|
|
$
|
(1,395
|
)
|
|
$
|
(667
|
)
|
•
|
$54 million of Senior Notes, Series A, due April 16, 2020
|
•
|
$40.5 million of Senior Notes, Series B, due April 14, 2023
|
•
|
$40.5 million of Senior Notes, Series C, due April 16, 2025
|
•
|
The agreement includes a minimum adjusted EBITDA covenant, which adjusts over time and is measured quarterly through March 2018, ranging from negative $20 million in the quarter ended September 30, 2016, to negative $7.5 million in the quarter ending March 31, 2018. Adjusted EBITDA is a non-GAAP measure that is calculated as adjusted earnings before interest, income taxes, depreciation, amortization, and certain other expenses for the prior four quarters, as defined under the agreement.
|
•
|
The agreement requires us to maintain a minimum fixed charge coverage amount of negative $15 million and negative $10 million for the quarters ending June 30, 2018, and September 30, 2018, respectively. The agreement includes requirements relating to a leverage ratio and a fixed charge coverage ratio to be tested on a quarterly basis commencing with the quarter ending June 30, 2018, with respect to the leverage ratio, and December 31, 2018, with respect to the fixed charge coverage ratio. The maximum leverage ratio will be 11.5 to 1.0 for the quarter ending June 30, 2018, and decreases to 3.5 to 1.0 for the quarter ending September 30, 2019, and each quarter thereafter. The minimum fixed charge coverage ratio will be 0.25 to 1.0 for the quarter ending December 31, 2018, and increases to 1.3 to 1.0 for the quarter ending September 30, 2019, and each quarter thereafter. In general, our minimum fixed charge coverage is calculated as adjusted EBITDA for the prior four quarters, minus maintenance capital expenditures, cash paid for income taxes and interest expense, plus scheduled principal amortization of long-term funded indebtedness; our leverage ratio is calculated as the ratio of funded indebtedness to adjusted EBITDA for the prior four quarters, and our fixed charge coverage ratio is calculated as the ratio of adjusted EBITDA for the prior four quarters, minus maintenance capital expenditures and cash paid for income taxes, to interest expense plus scheduled principal amortization of long-term funded indebtedness.
|
•
|
The interest rates for the Notes increased by 4.5% above the previous rates such that, as of December 31, 2016, the Series A Senior Notes bear interest at 7.73%, the Series B Senior Notes bear interest at 8.63%, and the Series C Senior Notes bear interest at 8.78%, which reflect the highest rates in a pricing grid. These interest rates are based on a pricing grid set forth in the revised agreement and will be adjusted quarterly based upon our financial performance and certain financial covenant levels. In addition, additional interest of 2%, which may be paid in kind, will begin to accrue on April 1, 2018, unless we satisfy certain financial covenant tests.
|
•
|
We are required to make certain offers to prepay the Notes with the proceeds of dispositions of certain specified property and with the proceeds of certain equity issuances, as set forth in the agreement.
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Senior Notes
|
$
|
135,000
|
|
|
$
|
150,000
|
|
Less deferred financing costs
|
(1,566
|
)
|
|
(515
|
)
|
||
Long-term debt, net
|
$
|
133,434
|
|
|
$
|
149,485
|
|
|
|
Payments Due By Period
|
||||||||||||||||||||||||||
|
|
Total
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
More Than 5 Years
|
||||||||||||||
|
|
(In thousands)
|
||||||||||||||||||||||||||
Long-term debt
|
|
$
|
135,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
54,000
|
|
|
$
|
—
|
|
|
$
|
81,000
|
|
Variable rate interest obligations on long-term debt
1
|
|
67,553
|
|
|
11,225
|
|
|
11,225
|
|
|
11,225
|
|
|
9,138
|
|
|
7,051
|
|
|
17,689
|
|
|||||||
Operating lease obligations
2
|
|
8,236
|
|
|
3,175
|
|
|
2,598
|
|
|
809
|
|
|
548
|
|
|
230
|
|
|
876
|
|
|||||||
Purchase commitments
3
|
|
4,065
|
|
|
4,065
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Asset retirement obligation
4
|
|
59,323
|
|
|
35
|
|
|
1,622
|
|
|
—
|
|
|
1,000
|
|
|
1,325
|
|
|
55,341
|
|
|||||||
Minimum royalty payments
5
|
|
15,867
|
|
|
635
|
|
|
635
|
|
|
635
|
|
|
635
|
|
|
635
|
|
|
12,692
|
|
|||||||
Total
|
|
$
|
290,044
|
|
|
$
|
19,135
|
|
|
$
|
16,080
|
|
|
$
|
12,669
|
|
|
$
|
65,321
|
|
|
$
|
9,241
|
|
|
$
|
167,598
|
|
1
|
See "Senior Notes" section above for more detail on the variable rate interest associated with our long-term debt. Amounts in the table above represent interest calculated at rates in effect as of December 31, 2016.
|
2
|
Amounts include all operating lease payments, inclusive of sales tax, for leases for office space, an airplane, railcars, and other equipment.
|
3
|
Purchase contractual commitments include the approximate amount due to vendors for non-cancelable purchase commitments for materials and services.
|
4
|
We are obligated to reclaim and remediate lands that our operations have disturbed, but, because of the long-term nature of our reserves and facilities, we estimate that the majority of those expenditures will not be required until after 2021. Although our reclamation obligation activities are not required to begin until after we cease operations, we anticipate certain activities to occur prior to then related to reclamation of facilities that have been replaced with newly constructed assets, as well as certain shaft closure activities for shafts that are no longer in use. Commitments shown are in today's dollars and are undiscounted.
|
5
|
Estimated annual minimum royalties due under mineral leases, assuming approximately a 25-year life, consistent with estimated useful lives of plant assets.
|
•
|
significant underperformance relative to expected operating results or operating losses
|
•
|
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
|
•
|
significant negative industry or economic trends
|
|
|
Year Ended December 31, 2016
|
||||||||||
|
|
Potash
|
|
Trio
®
|
|
Total
|
||||||
Sales
|
|
$
|
159,494
|
|
|
$
|
51,454
|
|
|
$
|
210,948
|
|
Freight costs
|
|
26,661
|
|
|
9,595
|
|
|
36,256
|
|
|||
Subtotal
|
|
$
|
132,833
|
|
|
$
|
41,859
|
|
|
$
|
174,692
|
|
|
|
|
|
|
|
|
||||||
Divided by:
|
|
|
|
|
|
|
||||||
Tons sold (in thousands)
|
|
681
|
|
|
146
|
|
|
|
||||
Average net realized sales price per ton
|
|
$
|
195
|
|
|
$
|
287
|
|
|
|
|
|
Year Ended December 31, 2015
|
||||||||||
|
|
Potash
|
|
Trio
®
|
|
Total
|
||||||
Sales
|
|
$
|
217,467
|
|
|
$
|
69,716
|
|
|
$
|
287,183
|
|
Freight costs
|
|
18,262
|
|
|
10,461
|
|
|
28,723
|
|
|||
Subtotal
|
|
$
|
199,205
|
|
|
$
|
59,255
|
|
|
$
|
258,460
|
|
|
|
|
|
|
|
|
||||||
Divided by:
|
|
|
|
|
|
|
||||||
Tons sold (in thousands)
|
|
587
|
|
|
163
|
|
|
|
||||
Average net realized sales price per ton
|
|
$
|
339
|
|
|
$
|
364
|
|
|
|
|
|
Year Ended December 31, 2014
|
||||||||||
|
|
Potash
|
|
Trio
®
|
|
Total
|
||||||
Sales
|
|
$
|
334,323
|
|
|
$
|
76,066
|
|
|
$
|
410,389
|
|
Freight costs
|
|
30,615
|
|
|
12,608
|
|
|
43,223
|
|
|||
Subtotal
|
|
$
|
303,708
|
|
|
$
|
63,458
|
|
|
$
|
367,166
|
|
|
|
|
|
|
|
|
||||||
Divided by:
|
|
|
|
|
|
|
||||||
Tons sold (in thousands)
|
|
915
|
|
|
182
|
|
|
|
||||
Average net realized sales price per ton
|
|
$
|
332
|
|
|
$
|
349
|
|
|
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
|
|
December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
ASSETS
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
4,464
|
|
|
$
|
9,307
|
|
Short-term investments
|
|
—
|
|
|
50,523
|
|
||
Accounts receivable:
|
|
|
|
|
||||
Trade, net
|
|
10,343
|
|
|
9,743
|
|
||
Other receivables, net
|
|
492
|
|
|
1,470
|
|
||
Refundable income taxes
|
|
1,379
|
|
|
315
|
|
||
Inventory, net
|
|
94,355
|
|
|
106,531
|
|
||
Other current assets
|
|
12,710
|
|
|
17,826
|
|
||
Total current assets
|
|
123,743
|
|
|
195,715
|
|
||
Property, plant, equipment, and mineral properties, net
|
|
388,490
|
|
|
419,476
|
|
||
Long-term parts inventory, net
|
|
21,037
|
|
|
17,344
|
|
||
Long-term investments
|
|
—
|
|
|
3,799
|
|
||
Other assets, net
|
|
7,631
|
|
|
3,635
|
|
||
Total Assets
|
|
$
|
540,901
|
|
|
$
|
639,969
|
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
||||
Accounts payable:
|
|
|
|
|
||||
Trade
|
|
$
|
10,210
|
|
|
$
|
15,709
|
|
Related parties
|
|
31
|
|
|
45
|
|
||
Accrued liabilities
|
|
8,690
|
|
|
15,429
|
|
||
Accrued employee compensation and benefits
|
|
4,225
|
|
|
7,409
|
|
||
Other current liabilities
|
|
964
|
|
|
547
|
|
||
Total current liabilities
|
|
24,120
|
|
|
39,139
|
|
||
|
|
|
|
|
||||
Long-term debt, net
|
|
133,434
|
|
|
149,485
|
|
||
Asset retirement obligation
|
|
19,976
|
|
|
22,951
|
|
||
Other non-current liabilities
|
|
—
|
|
|
1,868
|
|
||
Total Liabilities
|
|
177,530
|
|
|
213,443
|
|
||
|
|
|
|
|
||||
Commitments and Contingencies
|
|
|
|
|
||||
|
|
|
|
|
||||
Common stock, $0.001 par value; 400,000,000 and 100,000,000 shares
|
|
|
|
|
||||
authorized; and 75,839,998 and 75,702,700 shares
|
|
|
|
|
||||
outstanding at December 31, 2016, and 2015, respectively
|
|
76
|
|
|
76
|
|
||
Additional paid-in capital
|
|
583,653
|
|
|
580,227
|
|
||
Accumulated other comprehensive loss
|
|
—
|
|
|
(52
|
)
|
||
Retained deficit
|
|
(220,358
|
)
|
|
(153,725
|
)
|
||
Total Stockholders' Equity
|
|
363,371
|
|
|
426,526
|
|
||
Total Liabilities and Stockholders' Equity
|
|
$
|
540,901
|
|
|
$
|
639,969
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Sales
|
|
$
|
210,948
|
|
|
$
|
287,183
|
|
|
$
|
410,389
|
|
Less:
|
|
|
|
|
|
|
||||||
Freight costs
|
|
36,256
|
|
|
28,723
|
|
|
43,223
|
|
|||
Warehousing and handling costs
|
|
11,006
|
|
|
13,939
|
|
|
13,062
|
|
|||
Cost of goods sold
|
|
170,852
|
|
|
217,821
|
|
|
303,914
|
|
|||
Lower-of-cost-or-market inventory adjustments
|
|
20,374
|
|
|
31,772
|
|
|
8,186
|
|
|||
Costs associated with abnormal production and other
|
|
1,707
|
|
|
10,405
|
|
|
—
|
|
|||
Gross (Deficit) Margin
|
|
(29,247
|
)
|
|
(15,477
|
)
|
|
42,004
|
|
|||
|
|
|
|
|
|
|
||||||
Selling and administrative
|
|
20,034
|
|
|
27,486
|
|
|
27,223
|
|
|||
Debt restructuring expense
|
|
3,072
|
|
|
—
|
|
|
—
|
|
|||
Accretion of asset retirement obligation
|
|
1,768
|
|
|
1,696
|
|
|
1,623
|
|
|||
Restructuring expense
|
|
2,723
|
|
|
—
|
|
|
1,827
|
|
|||
Impairment of long-lived assets
|
|
—
|
|
|
323,796
|
|
|
—
|
|
|||
Care and maintenance expense
|
|
2,603
|
|
|
—
|
|
|
—
|
|
|||
Other operating (income) expense
|
|
(1,666
|
)
|
|
1,335
|
|
|
(4,449
|
)
|
|||
Operating (Loss) Income
|
|
(57,781
|
)
|
|
(369,790
|
)
|
|
15,780
|
|
|||
|
|
|
|
|
|
|
||||||
Other Income (Expense)
|
|
|
|
|
|
|
||||||
Interest expense, net
|
|
(11,622
|
)
|
|
(6,351
|
)
|
|
(6,232
|
)
|
|||
Interest income
|
|
286
|
|
|
763
|
|
|
186
|
|
|||
Other income
|
|
1,122
|
|
|
575
|
|
|
1,077
|
|
|||
(Loss) Income Before Income Taxes
|
|
(67,995
|
)
|
|
(374,803
|
)
|
|
10,811
|
|
|||
|
|
|
|
|
|
|
||||||
Income Tax Benefit (Expense)
|
|
1,362
|
|
|
(149,973
|
)
|
|
(1,050
|
)
|
|||
Net (Loss) Income
|
|
$
|
(66,633
|
)
|
|
$
|
(524,776
|
)
|
|
$
|
9,761
|
|
|
|
|
|
|
|
|
||||||
Weighted Average Shares Outstanding:
|
|
|
|
|
|
|
||||||
Basic
|
|
75,818,735
|
|
|
75,669,489
|
|
|
75,504,677
|
|
|||
Diluted
|
|
75,818,735
|
|
|
75,669,489
|
|
|
75,630,323
|
|
|||
(Loss) Earnings Per Share:
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
(0.88
|
)
|
|
$
|
(6.94
|
)
|
|
$
|
0.13
|
|
Diluted
|
|
$
|
(0.88
|
)
|
|
$
|
(6.94
|
)
|
|
$
|
0.13
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net (Loss) Income
|
|
$
|
(66,633
|
)
|
|
$
|
(524,776
|
)
|
|
$
|
9,761
|
|
Other Comprehensive Income (Loss):
|
|
|
|
|
|
|
||||||
Net change in unrealized gains (losses) on investments available for sale
|
|
52
|
|
|
(24
|
)
|
|
(18
|
)
|
|||
Other Comprehensive Income (Loss)
|
|
52
|
|
|
(24
|
)
|
|
(18
|
)
|
|||
Comprehensive (Loss) Income
|
|
$
|
(66,581
|
)
|
|
$
|
(524,800
|
)
|
|
$
|
9,743
|
|
|
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Accumulated Other Comprehensive Loss
|
|
Retained Earnings (Deficit)
|
|
Total Stockholders' Equity
|
|||||||||||||
|
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
Balance, December 31, 2013
|
|
75,405,410
|
|
|
$
|
75
|
|
|
$
|
572,616
|
|
|
$
|
(10
|
)
|
|
$
|
361,290
|
|
|
$
|
933,971
|
|
Net change in other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
|
—
|
|
|
(18
|
)
|
|||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,761
|
|
|
9,761
|
|
|||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
4,237
|
|
|
—
|
|
|
—
|
|
|
4,237
|
|
|||||
Vesting of restricted stock, net of common stock
used to fund employee income tax withholding due upon vesting |
|
131,331
|
|
|
1
|
|
|
(667
|
)
|
|
—
|
|
|
—
|
|
|
(666
|
)
|
|||||
Balance, December 31, 2014
|
|
75,536,741
|
|
|
76
|
|
|
576,186
|
|
|
(28
|
)
|
|
371,051
|
|
|
947,285
|
|
|||||
Net change in other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24
|
)
|
|
—
|
|
|
(24
|
)
|
|||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(524,776
|
)
|
|
(524,776
|
)
|
|||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
5,080
|
|
|
—
|
|
|
—
|
|
|
5,080
|
|
|||||
Vesting of restricted stock, net of common stock
used to fund employee income tax withholding due upon vesting |
|
165,959
|
|
|
—
|
|
|
(1,039
|
)
|
|
—
|
|
|
—
|
|
|
(1,039
|
)
|
|||||
Balance, December 31, 2015
|
|
75,702,700
|
|
|
76
|
|
|
580,227
|
|
|
(52
|
)
|
|
(153,725
|
)
|
|
426,526
|
|
|||||
Net change in other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
52
|
|
|
—
|
|
|
52
|
|
|||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(66,633
|
)
|
|
(66,633
|
)
|
|||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
3,599
|
|
|
—
|
|
|
—
|
|
|
3,599
|
|
|||||
Vesting of restricted stock, net of common stock
used to fund employee income tax withholding due upon vesting |
|
137,298
|
|
|
—
|
|
|
(173
|
)
|
|
—
|
|
|
—
|
|
|
(173
|
)
|
|||||
Balance, December 31, 2016
|
|
75,839,998
|
|
|
$
|
76
|
|
|
$
|
583,653
|
|
|
$
|
—
|
|
|
$
|
(220,358
|
)
|
|
$
|
363,371
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Cash Flows from Operating Activities:
|
|
|
|
|
|
|
||||||
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
|
|
|
|
|
|
|
||||||
Net (loss) income
|
|
$
|
(66,633
|
)
|
|
$
|
(524,776
|
)
|
|
$
|
9,761
|
|
Impairment of long-lived assets
|
|
—
|
|
|
323,796
|
|
|
—
|
|
|||
Deferred income taxes
|
|
—
|
|
|
150,096
|
|
|
2,121
|
|
|||
Depreciation, depletion, and accretion
|
|
42,681
|
|
|
87,676
|
|
|
80,560
|
|
|||
Amortization of deferred financing costs
|
|
2,113
|
|
|
352
|
|
|
392
|
|
|||
Stock-based compensation
|
|
3,599
|
|
|
5,080
|
|
|
4,237
|
|
|||
Reserve for obsolescence
|
|
349
|
|
|
2,260
|
|
|
500
|
|
|||
Loss on disposal of assets
|
|
262
|
|
|
679
|
|
|
—
|
|
|||
Lower-of-cost-or-market inventory adjustments
|
|
20,374
|
|
|
31,772
|
|
|
8,186
|
|
|||
Other
|
|
480
|
|
|
1,495
|
|
|
(66
|
)
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
||||||
Trade accounts receivable, net
|
|
(600
|
)
|
|
18,818
|
|
|
(7,724
|
)
|
|||
Other receivables, net
|
|
977
|
|
|
2,126
|
|
|
3,857
|
|
|||
Refundable income taxes
|
|
(1,163
|
)
|
|
(201
|
)
|
|
15,609
|
|
|||
Inventory, net
|
|
(12,239
|
)
|
|
(57,448
|
)
|
|
8,334
|
|
|||
Other current assets
|
|
5,370
|
|
|
(13,227
|
)
|
|
714
|
|
|||
Accounts payable, accrued liabilities, and accrued employee
compensation and benefits |
|
(12,387
|
)
|
|
(5,553
|
)
|
|
1,978
|
|
|||
Other liabilities
|
|
(1,453
|
)
|
|
(255
|
)
|
|
(973
|
)
|
|||
Net cash (used in) provided by operating activities
|
|
(18,270
|
)
|
|
22,690
|
|
|
127,486
|
|
|||
|
|
|
|
|
|
|
||||||
Cash Flows from Investing Activities:
|
|
|
|
|
|
|
||||||
Additions to property, plant, equipment, and mineral properties
|
|
(17,892
|
)
|
|
(46,016
|
)
|
|
(61,770
|
)
|
|||
Proceeds from sale of property, plant, equipment, and mineral properties
|
|
—
|
|
|
—
|
|
|
17
|
|
|||
Purchases of investments
|
|
(10,325
|
)
|
|
(78,568
|
)
|
|
(20,197
|
)
|
|||
Proceeds from sale of investments
|
|
60,727
|
|
|
45,007
|
|
|
22,326
|
|
|||
Net cash provided by (used in) investing activities
|
|
32,510
|
|
|
(79,577
|
)
|
|
(59,624
|
)
|
|||
|
|
|
|
|
|
|
||||||
Cash Flows from Financing Activities:
|
|
|
|
|
|
|
||||||
Repayment of long-term debt
|
|
(15,000
|
)
|
|
—
|
|
|
—
|
|
|||
Debt issuance costs
|
|
(3,910
|
)
|
|
(356
|
)
|
|
—
|
|
|||
Employee tax withholding paid for restricted stock upon vesting
|
|
(173
|
)
|
|
(1,039
|
)
|
|
(667
|
)
|
|||
Net cash used in financing activities
|
|
(19,083
|
)
|
|
(1,395
|
)
|
|
(667
|
)
|
|||
|
|
|
|
|
|
|
||||||
Net Change in Cash and Cash Equivalents
|
|
(4,843
|
)
|
|
(58,282
|
)
|
|
67,195
|
|
|||
Cash and Cash Equivalents,
beginning of period
|
|
9,307
|
|
|
67,589
|
|
|
394
|
|
|||
Cash and Cash Equivalents,
end of period
|
|
$
|
4,464
|
|
|
$
|
9,307
|
|
|
$
|
67,589
|
|
|
|
|
|
|
|
|
||||||
Supplemental disclosure of cash flow information
|
|
|
|
|
|
|
||||||
Net cash paid (received) during the period for:
|
|
|
|
|
|
|
||||||
Interest, net of $0.4 million, $0.2 million, and $0.4 million of capitalized interest
|
|
$
|
8,966
|
|
|
$
|
6,080
|
|
|
$
|
5,809
|
|
Income taxes
|
|
$
|
(100
|
)
|
|
$
|
13
|
|
|
$
|
(16,510
|
)
|
Accrued purchases for property, plant, equipment, and mineral properties
including capitalized interest |
|
$
|
793
|
|
|
$
|
3,778
|
|
|
$
|
4,945
|
|
Note 1
|
— COMPANY BACKGROUND
|
Note 2
|
— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
•
|
significant underperformance relative to expected operating results or operating losses
|
•
|
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
|
•
|
significant negative industry or economic trends
|
Note 3
|
— EARNINGS PER SHARE
|
|
|
Year Ended December 31,
|
|||||||
|
|
2016
|
|
2015
|
|
2014
|
|||
Anti-dilutive effect of restricted stock
|
|
992,751
|
|
|
468,737
|
|
|
—
|
|
Anti-dilutive effect of stock options outstanding
|
|
468,724
|
|
|
294,318
|
|
|
331,571
|
|
Anti-dilutive effect of performance units
|
|
126,846
|
|
|
167,443
|
|
|
—
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net (loss) income
|
|
$
|
(66,633
|
)
|
|
$
|
(524,776
|
)
|
|
$
|
9,761
|
|
Basic weighted average common shares outstanding
|
|
75,819
|
|
|
75,669
|
|
|
75,505
|
|
|||
Add: Dilutive effect of restricted common stock
|
|
—
|
|
|
—
|
|
|
115
|
|
|||
Add: Dilutive effect of stock options outstanding
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Add: Dilutive effect of performance units
|
|
—
|
|
|
—
|
|
|
10
|
|
|||
Diluted weighted average common shares outstanding
|
|
75,819
|
|
|
75,669
|
|
|
75,630
|
|
|||
(Loss) Earnings per share:
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
(0.88
|
)
|
|
$
|
(6.94
|
)
|
|
$
|
0.13
|
|
Diluted
|
|
$
|
(0.88
|
)
|
|
$
|
(6.94
|
)
|
|
$
|
0.13
|
|
Note 4
|
— CASH, CASH EQUIVALENTS, AND INVESTMENTS
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Cash
|
$
|
4,464
|
|
|
$
|
9,056
|
|
Commercial paper and money market accounts
|
—
|
|
|
251
|
|
||
Total cash and cash equivalents
|
$
|
4,464
|
|
|
$
|
9,307
|
|
|
|
|
|
||||
Corporate bonds
|
$
|
—
|
|
|
$
|
49,518
|
|
Certificates of deposit and time deposits
|
—
|
|
|
1,005
|
|
||
Total short-term investments
|
$
|
—
|
|
|
$
|
50,523
|
|
|
|
|
|
||||
Corporate bonds
|
$
|
—
|
|
|
$
|
3,799
|
|
Total long-term investments
|
$
|
—
|
|
|
$
|
3,799
|
|
|
|
|
|
||||
Total cash, cash equivalents, and investments
|
$
|
4,464
|
|
|
$
|
63,629
|
|
|
December 31, 2015
|
||||||||||||||
|
|
|
Unrealized
|
|
|
||||||||||
|
Cost Basis
|
|
Gain
|
|
Loss
|
|
Fair Value
|
||||||||
Corporate bonds
|
$
|
53,403
|
|
|
$
|
6
|
|
|
$
|
(92
|
)
|
|
$
|
53,317
|
|
Certificates of deposit and time deposits
|
1,005
|
|
|
—
|
|
|
—
|
|
|
1,005
|
|
||||
Total available-for-sale securities
|
$
|
54,408
|
|
|
$
|
6
|
|
|
$
|
(92
|
)
|
|
$
|
54,322
|
|
Note 5
|
— INVENTORY AND LONG-TERM PARTS INVENTORY
|
|
|
December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
Finished goods product inventory
|
|
$
|
52,571
|
|
|
$
|
65,200
|
|
In-process mineral inventory
|
|
22,126
|
|
|
19,769
|
|
||
Total product inventory
|
|
74,697
|
|
|
84,969
|
|
||
Current parts inventory, net
|
|
19,658
|
|
|
21,562
|
|
||
Total current inventory, net
|
|
94,355
|
|
|
106,531
|
|
||
Long-term parts inventory, net
|
|
21,037
|
|
|
17,344
|
|
||
Total inventory, net
|
|
$
|
115,392
|
|
|
$
|
123,875
|
|
Note 6
|
— PROPERTY, PLANT, EQUIPMENT, AND MINERAL PROPERTIES
|
|
|
December 31,
|
|
Range of useful
lives (years)
|
||||||||
|
|
2016
|
|
2015
|
|
Lower Limit
|
|
Upper Limit
|
||||
Buildings and plant
|
|
$
|
82,457
|
|
|
$
|
81,208
|
|
|
2
|
|
25
|
Machinery and equipment
|
|
227,987
|
|
|
209,920
|
|
|
2
|
|
25
|
||
Vehicles
|
|
4,750
|
|
|
4,747
|
|
|
3
|
|
7
|
||
Office equipment and improvements
|
|
12,505
|
|
|
12,001
|
|
|
1
|
|
20
|
||
Ponds and land improvements
|
|
57,474
|
|
|
55,951
|
|
|
1
|
|
25
|
||
Total depreciable assets
|
|
385,173
|
|
|
363,827
|
|
|
|
|
|
||
Accumulated depreciation
|
|
$
|
(116,194
|
)
|
|
$
|
(80,707
|
)
|
|
|
|
|
Total depreciable assets, net
|
|
$
|
268,979
|
|
|
$
|
283,120
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Mineral properties and development costs
|
|
138,578
|
|
|
139,751
|
|
|
|
|
|
||
Accumulated depletion
|
|
(21,974
|
)
|
|
(17,254
|
)
|
|
|
|
|
||
Total depletable assets, net
|
|
116,604
|
|
|
122,497
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
||||
Land
|
|
$
|
719
|
|
|
$
|
719
|
|
|
|
|
|
Construction in progress
|
|
2,188
|
|
|
13,140
|
|
|
|
|
|
||
Total property, plant, equipment, and mineral properties, net
|
|
$
|
388,490
|
|
|
$
|
419,476
|
|
|
|
|
|
|
|
December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
|
|
(in thousands)
|
||||||
Final price deferred
1
|
|
$
|
7,814
|
|
|
$
|
13,412
|
|
Prepaid expenses
|
|
4,063
|
|
|
4,274
|
|
||
Other current assets
|
|
833
|
|
|
140
|
|
||
Total Other current assets
|
|
$
|
12,710
|
|
|
$
|
17,826
|
|
|
|
December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
|
|
(in thousands)
|
||||||
Accrued interest expense
|
|
$
|
2,312
|
|
|
$
|
1,320
|
|
Accrued property taxes
|
|
1,539
|
|
|
1,560
|
|
||
Accrued utility expenses
|
|
955
|
|
|
717
|
|
||
Accrued construction in progress
|
|
581
|
|
|
3,406
|
|
||
Other accrued liabilities
|
|
3,303
|
|
|
4,716
|
|
||
Customer pre-payments
|
|
—
|
|
|
3,710
|
|
||
Total Accrued liabilities
|
|
$
|
8,690
|
|
|
$
|
15,429
|
|
•
|
$54 million
of Senior Notes, Series A, due April 16, 2020
|
•
|
$40.5 million
of Senior Notes, Series B, due April 14, 2023
|
•
|
$40.5 million
of Senior Notes, Series C, due April 16, 2025
|
•
|
The agreement includes a minimum adjusted EBITDA covenant, which adjusts over time and is measured quarterly through March 2018, ranging from negative
$20 million
in the quarter ended September 30, 2016, to negative
$7.5 million
in the quarter ending March 31, 2018. Adjusted EBITDA is a non-GAAP measure that is calculated as adjusted earnings before interest, income taxes, depreciation, amortization, and certain other
|
•
|
The agreement requires us to maintain a minimum fixed charge coverage amount of negative
$15 million
and negative
$10 million
for the quarters ending June 30, 2018, and September 30, 2018, respectively. The agreement includes requirements relating to a leverage ratio and a fixed charge coverage ratio to be tested on a quarterly basis commencing with the quarter ending June 30, 2018, with respect to the leverage ratio, and December 31, 2018, with respect to the fixed charge coverage ratio. The maximum leverage ratio will be
11.5
to 1.0 for the quarter ending June 30, 2018, and decreases to
3.5
to 1.0 for the quarter ending September 30, 2019, and each quarter thereafter. The minimum fixed charge coverage ratio will be
0.25
to 1.0 for the quarter ending December 31, 2018, and increases to
1.3
to 1.0 for the quarter ending September 30, 2019, and each quarter thereafter. In general, our minimum fixed charge coverage is calculated as adjusted EBITDA for the prior four quarters, minus maintenance capital expenditures, cash paid for income taxes and interest expense, plus scheduled principal amortization of long-term funded indebtedness; our leverage ratio is calculated as the ratio of funded indebtedness to adjusted EBITDA for the prior four quarters, and our fixed charge coverage ratio is calculated as the ratio of adjusted EBITDA for the prior four quarters, minus maintenance capital expenditures and cash paid for income taxes, to interest expense plus scheduled principal amortization of long-term funded indebtedness.
|
•
|
The interest rates for the Notes increased by
4.5%
above the previous rates such that, as of December 31, 2016, the Series A Senior Notes bear interest at
7.73%
, the Series B Senior Notes bear interest at
8.63%
, and the Series C Senior Notes bear interest at
8.78%
, which reflect the highest rates in a pricing grid. These interest rates are based on a pricing grid set forth in the revised agreement and will be adjusted quarterly based upon our financial performance and certain financial covenant levels. In addition, additional interest of
2%
, which may be paid in kind, will begin to accrue on April 1, 2018, unless we satisfy certain financial covenant tests.
|
•
|
We are required to make certain offers to prepay the Notes with the proceeds of dispositions of certain specified property and with the proceeds of certain equity issuances, as set forth in the agreement.
|
•
|
In addition, under the terms of the Notes, in December 2016, we engaged Cantor Fitzgerald & Co., a nationally-recognized investment bank, to assess, evaluate, and assist in pursuing potential strategic alternatives available to us, as we determine to be appropriate. These potential strategic alternatives could include, but are not limited to, continuing our current operating plan, equity offerings or balance sheet restructurings, merger and acquisition opportunities, partnership or joint venture opportunities, entering into new or complementary businesses, or a sale of Intrepid or some or all of our assets.
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
Senior Notes
|
$
|
135,000
|
|
|
$
|
150,000
|
|
Less deferred financing costs
|
(1,566
|
)
|
|
(515
|
)
|
||
Long-term debt, net
|
$
|
133,434
|
|
|
$
|
149,485
|
|
|
|
Year ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
2014
|
|
||||||
Interest on notes and line of credit commitment fees
|
|
$
|
9,152
|
|
|
$
|
6,292
|
|
$
|
6,296
|
|
|
Negotiated make-whole payment
|
|
806
|
|
|
—
|
|
—
|
|
|
|||
Amortization of deferred financing costs
|
|
2,113
|
|
|
352
|
|
392
|
|
|
|||
Gross interest expense
|
|
12,071
|
|
|
6,644
|
|
6,688
|
|
|
|||
Less capitalized interest
|
|
449
|
|
|
293
|
|
456
|
|
|
|||
Interest expense, net
|
|
$
|
11,622
|
|
|
$
|
6,351
|
|
$
|
6,232
|
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Asset retirement obligation, at beginning of period
|
|
$
|
22,951
|
|
|
$
|
22,037
|
|
|
$
|
21,047
|
|
Liabilities settled
|
|
(3
|
)
|
|
(86
|
)
|
|
(125
|
)
|
|||
Liabilities incurred
|
|
—
|
|
|
—
|
|
|
69
|
|
|||
Changes in estimated obligations
|
|
(4,740
|
)
|
|
(696
|
)
|
|
(577
|
)
|
|||
Accretion of discount
|
|
1,768
|
|
|
1,696
|
|
|
1,623
|
|
|||
Total asset retirement obligation, at end of period
|
|
$
|
19,976
|
|
|
$
|
22,951
|
|
|
$
|
22,037
|
|
|
|
|
|
Weighted Average
Grant-Date Fair Value |
|||
|
|
Shares
|
|
||||
Restricted stock, beginning of period
|
|
459,663
|
|
|
$
|
14.91
|
|
Granted
|
|
3,340,215
|
|
|
$
|
1.07
|
|
Vested
|
|
(213,643
|
)
|
|
$
|
15.53
|
|
Forfeited
|
|
(54,817
|
)
|
|
$
|
14.44
|
|
Restricted stock, end of period
|
|
3,531,418
|
|
|
$
|
1.78
|
|
Risk free interest rate
|
|
1.8
|
%
|
Dividend yield
|
|
0.0
|
%
|
Estimated volatility
|
|
63.8
|
%
|
Expected option life
|
|
6.25 years
|
|
|
|
Shares
|
|
Weighted Average Exercise Price
|
|
Aggregate Intrinsic Value
1
|
|
Weighted Average Remaining Contractual Life
|
|
Outstanding non-qualified stock
options, beginning of period |
|
241,961
|
|
|
$25.85
|
|
|
|
|
Granted
|
|
1,664,849
|
|
|
$1.03
|
|
|
|
|
Exercised
|
|
—
|
|
|
|
|
|
|
|
Forfeited
|
|
(23,104
|
)
|
|
$26.90
|
|
|
|
|
Expired
|
|
—
|
|
|
|
|
|
|
|
Outstanding non-qualified stock
options, end of period |
|
1,883,706
|
|
|
$3.90
|
|
$1,748,091
|
|
8.9
|
|
|
|
|
|
|
|
|
|
|
Vested or expected to vest,
end of period |
|
1,883,706
|
|
|
$3.90
|
|
$1,748,091
|
|
8.9
|
|
|
|
|
|
|
|
|
|
|
Exercisable non-qualified
stock options, end of period |
|
218,857
|
|
|
$25.74
|
|
$—
|
|
2.6
|
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.
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Current portion of income tax expense (benefit):
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
(1,365
|
)
|
|
$
|
—
|
|
|
$
|
(1,108
|
)
|
State
|
|
3
|
|
|
(123
|
)
|
|
37
|
|
|||
Deferred portion of income tax expense:
|
|
|
|
|
|
|
||||||
Federal
|
|
—
|
|
|
116,128
|
|
|
2,858
|
|
|||
State
|
|
—
|
|
|
33,968
|
|
|
(737
|
)
|
|||
Total income tax expense
|
|
$
|
(1,362
|
)
|
|
$
|
149,973
|
|
|
$
|
1,050
|
|
|
|
December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
|
|
(in thousands)
|
||||||
Deferred tax assets (liabilities):
|
|
|
|
|
||||
Property, plant, equipment and mineral properties, net
|
|
$
|
212,049
|
|
|
$
|
218,784
|
|
Net operating loss carryforward
|
|
73,850
|
|
|
39,300
|
|
||
Other
|
|
23,406
|
|
|
18,705
|
|
||
Asset retirement obligation
|
|
10,934
|
|
|
10,233
|
|
||
Inventory
|
|
1,285
|
|
|
6,914
|
|
||
AMT credits
|
|
2,861
|
|
|
4,226
|
|
||
Equity compensation
|
|
3,542
|
|
|
3,416
|
|
||
Accrued employee compensation and benefits
|
|
(239
|
)
|
|
731
|
|
||
Prepaid expenses
|
|
$
|
(1,591
|
)
|
|
$
|
(1,708
|
)
|
Total deferred tax assets
|
|
326,097
|
|
|
300,601
|
|
||
Valuation allowance
|
|
(326,097
|
)
|
|
(300,601
|
)
|
||
Deferred tax asset, net
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Valuation allowance, at beginning of period
|
|
$
|
300,601
|
|
|
$
|
268
|
|
|
$
|
1,966
|
|
Charged to income tax expense
|
|
25,496
|
|
|
300,333
|
|
|
—
|
|
|||
Deductions
|
|
—
|
|
|
—
|
|
|
(1,698
|
)
|
|||
Valuation allowance, at end of period
|
|
$
|
326,097
|
|
|
$
|
300,601
|
|
|
$
|
268
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Federal taxes at statutory rate
|
|
$
|
(23,793
|
)
|
|
$
|
(131,181
|
)
|
|
$
|
3,784
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|||
State taxes, net of federal benefit
|
|
(4,982
|
)
|
|
(18,639
|
)
|
|
230
|
|
|||
Change in valuation allowance
|
|
25,495
|
|
|
300,333
|
|
|
(1,698
|
)
|
|||
Change in state tax rate
|
|
—
|
|
|
—
|
|
|
740
|
|
|||
Percentage depletion
|
|
(552
|
)
|
|
(1,285
|
)
|
|
(1,922
|
)
|
|||
Other
|
|
2,470
|
|
|
745
|
|
|
(84
|
)
|
|||
Net (benefit) expense as calculated
|
|
$
|
(1,362
|
)
|
|
$
|
149,973
|
|
|
$
|
1,050
|
|
|
|
|
|
|
|
|
||||||
Effective tax rate
|
|
2.0
|
%
|
|
(40.0
|
)%
|
|
9.7
|
%
|
For the year ended December 31, 2016
|
|
$
|
6,591
|
|
For the year ended December 31, 2015
|
|
$
|
7,216
|
|
For the year ended December 31, 2014
|
|
$
|
6,979
|
|
•
|
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, 2015
|
|
|
Quoted Prices in Active Markets for Identical Assets or Liabilities
(Level 1) |
|
Significant Observable Inputs
(Level 2) |
|
Significant Unobservable Inputs
(Level 3) |
|||||||
Investments
|
|
|
|
|
|
|
|
|
||||||||
Corporate bonds
|
|
$
|
53,317
|
|
|
$
|
—
|
|
|
$
|
53,317
|
|
|
$
|
—
|
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||
|
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
||||||||
Long-term debt
|
|
$
|
135,000
|
|
|
$
|
131,000
|
|
|
$
|
150,000
|
|
|
$
|
141,000
|
|
|
|
Contributions
|
||
Year Ended December 31, 2016
|
|
$
|
176
|
|
Year Ended December 31, 2015
|
|
$
|
2,277
|
|
Year Ended December 31, 2014
|
|
$
|
2,270
|
|
Year Ended December 31, 2016
|
|
Potash
|
|
Trio
®
|
|
Corporate
|
|
Consolidated
|
||||||||
Sales
|
|
$
|
159,494
|
|
|
$
|
51,454
|
|
|
$
|
—
|
|
|
$
|
210,948
|
|
Less: Freight costs
|
|
26,661
|
|
|
9,595
|
|
|
—
|
|
|
36,256
|
|
||||
Warehousing and handling costs
|
|
8,439
|
|
|
2,567
|
|
|
—
|
|
|
11,006
|
|
||||
Cost of goods sold
2
|
|
134,017
|
|
|
36,835
|
|
|
—
|
|
|
170,852
|
|
||||
Lower-of-cost-or-market inventory
adjustments
|
|
18,380
|
|
|
1,994
|
|
|
—
|
|
|
20,374
|
|
||||
Costs associated with abnormal
production and other
|
|
649
|
|
|
1,058
|
|
|
—
|
|
|
1,707
|
|
||||
Gross Deficit
|
|
$
|
(28,652
|
)
|
|
$
|
(595
|
)
|
|
$
|
—
|
|
|
$
|
(29,247
|
)
|
Depreciation, depletion and amortization incurred
1
|
|
$
|
37,936
|
|
|
$
|
3,836
|
|
|
$
|
909
|
|
|
$
|
42,681
|
|
|
|
|
|
|
|
|
|
|
||||||||
Year Ended December 31, 2015
|
|
Potash
|
|
Trio
®
|
|
Corporate
|
|
Consolidated
|
||||||||
Sales
|
|
$
|
217,467
|
|
|
$
|
69,716
|
|
|
$
|
—
|
|
|
$
|
287,183
|
|
Less: Freight costs
|
|
18,262
|
|
|
10,461
|
|
|
—
|
|
|
28,723
|
|
||||
Warehousing and handling costs
|
|
11,213
|
|
|
2,726
|
|
|
—
|
|
|
13,939
|
|
||||
Cost of goods sold
2
|
|
172,355
|
|
|
45,466
|
|
|
—
|
|
|
217,821
|
|
||||
Lower-of-cost-or-market inventory
adjustments
|
|
31,772
|
|
|
—
|
|
|
—
|
|
|
31,772
|
|
||||
Costs associated with abnormal
production and other
|
|
10,405
|
|
|
—
|
|
|
—
|
|
|
10,405
|
|
||||
Gross (Deficit) Margin
|
|
$
|
(26,540
|
)
|
|
$
|
11,063
|
|
|
$
|
—
|
|
|
$
|
(15,477
|
)
|
Depreciation, depletion and amortization incurred
1
|
|
$
|
68,562
|
|
|
$
|
16,993
|
|
|
$
|
2,121
|
|
|
$
|
87,676
|
|
|
|
|
|
|
|
|
|
|
||||||||
Year ended December 31, 2014
|
|
Potash
|
|
Trio
®
|
|
Corporate
|
|
Consolidated
|
||||||||
Sales
|
|
$
|
334,323
|
|
|
$
|
76,066
|
|
|
$
|
—
|
|
|
$
|
410,389
|
|
Less: Freight costs
|
|
30,615
|
|
|
12,608
|
|
|
—
|
|
|
43,223
|
|
||||
Warehousing and handling costs
|
|
10,742
|
|
|
2,320
|
|
|
—
|
|
|
13,062
|
|
||||
Cost of goods sold
2
|
|
254,753
|
|
|
49,161
|
|
|
—
|
|
|
303,914
|
|
||||
Lower-of-cost-or-market inventory
adjustments
|
|
8,186
|
|
|
—
|
|
|
—
|
|
|
8,186
|
|
||||
Costs associated with abnormal
production and other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Gross Margin
|
|
$
|
30,027
|
|
|
$
|
11,977
|
|
|
$
|
—
|
|
|
$
|
42,004
|
|
Depreciation, depletion and amortization incurred
1
|
|
$
|
67,712
|
|
|
$
|
11,433
|
|
|
$
|
1,415
|
|
|
$
|
80,560
|
|
|
Unrealized
Gains and Losses on Available-for-Sale Securities |
||
Balance as of December 31, 2015
|
$
|
(52
|
)
|
Other comprehensive income before reclassifications
|
62
|
|
|
Amounts reclassified from accumulated other comprehensive loss
|
(10
|
)
|
|
Net change in other comprehensive loss
|
$
|
52
|
|
Balance as of December 31, 2016
|
$
|
—
|
|
Details about
Accumulated Other Comprehensive Loss Components |
Amount Reclassified from Accumulated Other Comprehensive Loss
|
|
Affected Line Item in the Consolidated
Statement of Operations |
||
Realized gains on available-for-sale securities
|
$
|
10
|
|
|
Other income (expense)
|
Total before tax
|
10
|
|
|
|
|
Tax benefit
|
—
|
|
|
|
|
Net of tax
|
$
|
10
|
|
|
|
|
|
Three Months Ended
|
||||||||||||||
|
|
December 31, 2016
|
|
September 30, 2016
|
|
June 30, 2016
|
|
March 31, 2016
|
||||||||
Sales
|
|
$
|
42,188
|
|
|
$
|
43,643
|
|
|
$
|
51,840
|
|
|
$
|
73,277
|
|
Cost of Goods Sold
|
|
$
|
33,953
|
|
|
$
|
35,272
|
|
|
$
|
41,850
|
|
|
$
|
59,777
|
|
Lower-of-cost-or-market inventory adjustments
|
|
$
|
3,245
|
|
|
$
|
5,192
|
|
|
$
|
2,930
|
|
|
$
|
9,007
|
|
Costs Associated with
Abnormal Production |
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,057
|
|
|
$
|
650
|
|
Gross Deficit
|
|
$
|
(7,004
|
)
|
|
$
|
(7,624
|
)
|
|
$
|
(5,466
|
)
|
|
$
|
(9,153
|
)
|
Net Loss
|
|
$
|
(16,567
|
)
|
|
$
|
(18,241
|
)
|
|
$
|
(13,398
|
)
|
|
$
|
(18,427
|
)
|
Loss Per Share, Basic
|
|
$
|
(0.22
|
)
|
|
$
|
(0.24
|
)
|
|
$
|
(0.18
|
)
|
|
$
|
(0.24
|
)
|
Loss Per Share, Diluted
|
|
$
|
(0.22
|
)
|
|
$
|
(0.24
|
)
|
|
$
|
(0.18
|
)
|
|
$
|
(0.24
|
)
|
|
|
Three Months Ended
|
||||||||||||||
|
|
December 31, 2015
|
|
September 30, 2015
|
|
June 30, 2015
|
|
March 31, 2015
|
||||||||
Sales
|
|
$
|
42,819
|
|
|
$
|
53,692
|
|
|
$
|
73,651
|
|
|
$
|
117,021
|
|
Cost of Goods Sold
|
|
$
|
36,953
|
|
|
$
|
42,151
|
|
|
$
|
55,435
|
|
|
$
|
83,282
|
|
Lower-of-cost-or-market inventory adjustments
|
|
$
|
21,709
|
|
|
$
|
4,427
|
|
|
$
|
5,276
|
|
|
$
|
360
|
|
Costs Associated with
Abnormal Production |
|
$
|
3,495
|
|
|
$
|
6,910
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Gross (Deficit) Margin
|
|
$
|
(28,459
|
)
|
|
$
|
(8,343
|
)
|
|
$
|
2,605
|
|
|
$
|
18,720
|
|
Impairment of long-lived assets
|
|
$
|
323,796
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Net (Loss) Income
|
|
$
|
(518,259
|
)
|
|
$
|
(8,110
|
)
|
|
$
|
(4,937
|
)
|
|
$
|
6,529
|
|
Earnings (Loss) Per Share, Basic
|
|
$
|
(6.85
|
)
|
|
$
|
(0.11
|
)
|
|
$
|
(0.07
|
)
|
|
$
|
0.09
|
|
Earnings (Loss) Per Share, Diluted
|
|
$
|
(6.85
|
)
|
|
$
|
(0.11
|
)
|
|
$
|
(0.07
|
)
|
|
$
|
0.09
|
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
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,
|
ITEM 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
|
|
|
|
|
Incorporated by Reference from the Below-Listed Form (Each Filed under SEC File Number 001-34025)
|
|
Exhibit Number
|
|
Exhibit Description
|
|
Form
|
Filing Date
|
3.1
|
|
Restated Certificate of Incorporation of Intrepid Potash, Inc.
|
|
8-K
|
April 25, 2008
|
3.2
|
|
Certificate of Amendment to Restated Certificate of Incorporation of Intrepid Potash, Inc.
|
|
8-K
|
May 26, 2016
|
3.3
|
|
Amended and Restated Bylaws of Intrepid Potash, Inc.
|
|
8-K
|
June 25, 2015
|
10.1
|
|
Form of Indemnification Agreement with each director and officer
|
|
8-K
|
April 25, 2008
|
10.2
|
|
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
|
|
8-K
|
May 1, 2008
|
10.3
|
|
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
|
|
8-K
|
May 1, 2008
|
10.4
|
|
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
|
|
10-K
|
February 16, 2012
|
10.5
|
|
Credit Agreement, dated as of October 31, 2016, by and among Intrepid Potash, Inc., certain of its subsidiaries and Bank of Montreal
|
|
8-K
|
November 1, 2016
|
10.6
|
|
Amended and Restated Note Purchase Agreement, dated as of October 31, 2016, by and among Intrepid Potash, Inc. and each of the purchasers named therein
|
|
8-K
|
November 1, 2016
|
10.7
|
|
First Amendment to Amended and Restated Note Purchase Agreement, dated as of November 9, 2016, by and among Intrepid Potash, Inc. and each of the purchasers named therein.
|
|
8-K
|
November 14, 2016
|
10.8
|
|
Amended and Restated Employment Agreement, dated as of May 19, 2010, by and between Intrepid Potash, Inc. and Robert P. Jornayvaz III+
|
|
8-K
|
May 19, 2010
|
10.9
|
|
Amendment to Employment Agreement, dated February 23, 2011, by and between Intrepid Potash, Inc. and Robert P. Jornayvaz III+
|
|
8-K
|
March 1, 2011
|
10.10
|
|
Second Amendment to Employment Agreement, dated as of February 14, 2013, by and between Intrepid Potash, Inc. and Robert P. Jornayvaz III+
|
|
8-K
|
February 19, 2013
|
10.11
|
|
Third Amendment to Employment Agreement, dated as of March 22, 2016, by and between Intrepid Potash, Inc. and Robert P. Jornayvaz III+
|
|
8-K
|
March 23, 2016
|
10.12
|
|
Amended and Restated Employment Agreement, dated as of May 19, 2010, by and between Intrepid Potash, Inc. and Hugh E. Harvey, Jr.+
|
|
8-K
|
May 19, 2010
|
10.13
|
|
Intrepid Potash, Inc. Amended and Restated Equity Incentive Plan+
|
|
8-K
|
May 26, 2016
|
10.14
|
|
Form of Restricted Stock Agreement under Intrepid Potash, Inc. Equity Incentive Plan+
|
|
10-K
|
February 14, 2013
|
10.15
|
|
Form of Restricted Stock Agreement under Intrepid Potash, Inc. Amended and Restated Equity Incentive Plan+
|
|
10-Q/A
|
August 4, 2016
|
10.16
|
|
Form of Performance Unit Agreement (CAGR) under Intrepid Potash, Inc. Equity Incentive Plan+
|
|
10-Q
|
April 28, 2015
|
10.17
|
|
Form of Stock Option Agreement under Intrepid Potash, Inc. Equity Incentive Plan+
|
|
8-K
|
February 7, 2011
|
10.18
|
|
Form of Stock Option Agreement under Intrepid Potash, Inc. Amended and Restated Equity Incentive Plan+
|
|
10-Q/A
|
August 4, 2016
|
10.19
|
|
Intrepid Potash, Inc. Amended and Restated Short-Term Incentive Plan+
|
|
8-K
|
May 26, 2016
|
10.20
|
|
Form of Change-of-Control Severance Agreement with each executive officer+
|
|
10-Q
|
November 3, 2011
|
10.21
|
|
Form of Noncompete Agreement with Brian D. Frantz and
Jeffrey C. Blair+
|
|
*
|
|
10.22
|
|
Aircraft Dry Lease, dated as of January 9, 2009, by and between Intrepid Potash, Inc. and Intrepid Production Holdings LLC
|
|
8-K
|
January 12, 2009
|
10.23
|
|
First Amendment to Aircraft Dry Lease, dated as of September 1, 2014, by and between Intrepid Potash, Inc. and Intrepid Production Holdings LLC
|
|
8-K
|
August 18, 2014
|
10.24
|
|
Aircraft Dry Lease, dated as of September 1, 2014, by and between Intrepid Potash, Inc. and Odyssey Adventures, LLC
|
|
8-K
|
August 18, 2014
|
10.25
|
|
Separation Agreement and General Release, dated as of May 6, 2016, by and between Intrepid Potash, Inc. and Kelvin G. Feist
|
|
10-Q/A
|
August 4, 2016
|
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 Exchange Act Rules 13a-14(a) and 15d-14(a)
|
|
*
|
|
31.2
|
|
Certification of Principal Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a)
|
|
*
|
|
32.1
|
|
Certification of Principal Executive Officer 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 Principal 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., Intrepid Oil & Gas, LLC, and Intrepid Potash-Moab, LLC
|
|
8-K
|
May 1, 2008
|
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
|
|
10-Q
|
August 7, 2009
|
99.3
|
|
Third Amendment to Transition Services Agreement dated March 26, 2010, between Intrepid Potash, Inc. and Intrepid Oil & Gas, LLC
|
|
10-Q
|
May 5, 2010
|
99.4
|
|
Fourth Amendment to Transition Services Agreement dated March 25, 2011, between Intrepid Potash, Inc. and Intrepid Oil and Gas, LLC
|
|
10-Q
|
May 5, 2011
|
99.5
|
|
Sixth Amendment to Transition Services Agreement dated April 3, 2013, between Intrepid Potash, Inc. and Intrepid Oil & Gas, LLC
|
|
10-Q
|
May 2, 2013
|
99.6
|
|
Seventh Amendment to Transition Services Agreement dated March 24, 2015, between Intrepid Potash, Inc. and Intrepid Oil & Gas, LLC
|
|
10-Q
|
April 28, 2015
|
101.INS
|
|
XBRL Instance Document
|
|
*
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
|
*
|
|
101.CAL
|
|
XBRL Extension Calculation Linkbase
|
|
*
|
|
101.DEF
|
|
XBRL Extension Definition Linkbase
|
|
*
|
|
101.LAB
|
|
XBRL Extension Label Linkbase
|
|
*
|
|
101.PRE
|
|
XBRL Extension Presentation Linkbase
|
|
*
|
|
*
|
Filed herewith
|
**
|
Furnished herewith
|
+
|
Management contract or compensatory plan or arrangement
|
ITEM 16.
|
FORM 10-K SUMMARY
|
|
|
INTREPID POTASH, INC.
(Registrant) |
|
|
|
February 28, 2017
|
|
/s/
Robert P. Jornayvaz III
|
|
|
Robert P. Jornayvaz III - Executive Chairman of the Board, President, and Chief Executive Officer
(Principal Executive Officer and Duly Authorized Officer) |
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/
Robert P. Jornayvaz III
|
|
Executive Chairman of the Board,
President, and Chief Executive Officer
|
|
February 28, 2017
|
Robert P. Jornayvaz III
|
|
|
|
|
|
|
|
|
|
/s/ Brian D. Frantz
|
|
Senior Vice President
and Chief Accounting Officer
(Principal Financial Officer
and Principal Accounting Officer)
|
|
February 28, 2017
|
Brian D. Frantz
|
|
|
|
|
|
|
|
|
|
/s/
Hugh E. Harvey, Jr.
|
|
Executive Vice Chairman of the Board
|
|
February 28, 2017
|
Hugh E. Harvey, Jr.
|
|
|
|
|
|
|
|
|
|
/s/
Terry Considine
|
|
Director
|
|
February 28, 2017
|
Terry Considine
|
|
|
|
|
|
|
|
|
|
/s/
Chris A. Elliott
|
|
Director
|
|
February 28, 2017
|
Chris A. Elliott
|
|
|
|
|
|
|
|
|
|
/s/
J. Landis Martin
|
|
Lead Director
|
|
February 28, 2017
|
J. Landis Martin
|
|
|
|
|
|
|
|
|
|
/s/
Barth E. Whitham
|
|
Director
|
|
February 28, 2017
|
Barth E. Whitham
|
|
|
|
|
1.
|
Performance
.
During my employment with Intrepid, I will perform to the best of my ability the duties of my position and other duties assigned to me by Intrepid and devote my best efforts to the interests of Intrepid. I understand that I remain an employee at-will and that either I or Intrepid may end the employment relationship at any time, for any or no reason.
|
2.
|
Non-Disclosure/Confidentiality
.
I have received or will receive Confidential Information regarding Intrepid’s products, services and customers and will keep Confidential Information confidential and never directly or indirectly disclose it to anyone else, except with Intrepid’s consent, in accordance with Intrepid’s policies and procedures, or pursuant to a subpoena, order, or request issued by a court of competent jurisdiction or by judicial, administrative, legislative, or regulatory body or committee. “Confidential Information” means any information not generally known which Intrepid considers proprietary regarding Intrepid’s business, products, operations, finances, or customers, including products, know-how, prices, pricing methodology, research, development, manufacturing processes, purchasing, accounting, engineering, and other designs, parameters, standards, methods, reports, analysis, marketing, merchandizing or selling, and any summaries, derivations or analysis of each, whether in written, electronic, oral or other form. I agree that all Confidential Information is the exclusive property of Intrepid; immediately after my termination from Intrepid (voluntary or otherwise), I agree to return all Confidential Information to Intrepid. This agreement not to disclose or use Confidential Information means, among other things, that I may not take or perform a job whose responsibilities would likely lead me to disclose or use Confidential Information because that would likely result in irreparable injury to Intrepid. If a court determines that this provision is too broad, I and Intrepid agree that the court shall modify the provision to the extent (but not more than is) necessary to make the provision enforceable.
|
3.
|
Noncompetition
.
|
(a)
|
If I voluntarily terminate my employment with Intrepid or am dismissed for cause or poor performance, for a period of
six months
from the last day of my employment, I will not work, directly or indirectly, for (i) anyone engaged in the sale, promotion, manufacture, or distribution of any potash, sulfate of potash magnesia, salt, or magnesium chloride (collectively, the “Products”) or (ii) any customer or prospective customer of Intrepid that I have corresponded with on behalf of Intrepid at any time during the ___ year(s) before my separation, [in either case in the following area: _________].
|
(b)
|
This paragraph 3 does not apply if I am terminated without cause or laid-off where the lay-off lasts more than 60 days.
|
(c)
|
Notwithstanding the foregoing, as an attorney, I may, subject to the applicable rules of ethics and the nondisclosure provisions herein, perform services solely in my capacity as an attorney on behalf of any person or entity, even if such person or entity competes with Intrepid or sells goods or services similar to Intrepid.
|
4.
|
Solicitation of Employees
.
During my employment with Intrepid and for six months after my termination (regardless of reason), I will
not
:
|
(a)
|
Hire, solicit or seek to hire, directly or indirectly, on my own behalf or for anyone else, any employee of Intrepid;
|
(b)
|
Attempt to influence, induce, or encourage any Intrepid employee to leave Intrepid; or
|
(c)
|
Use or disclose to any person for any business purpose any information concerning the name and address of any Intrepid employee.
|
5.
|
Suspension of Term
.
I agree that if I violate this agreement, for so long as I am violating it, the time limit on the non-compete and non-solicitation covenants will be extended. For example, if I voluntarily terminate my employment with Intrepid and begin working for a competitor the next day, Intrepid may ask a court may order me to stop working for that competitor for six months from the date of the court order.
|
6.
|
Acknowledgment of Reasonableness; Sufficiency of Compensation
.
I acknowledge that the scope and duration of the restrictive covenants in this agreement – as well as the compensation and other consideration described above -- are fair and reasonable. I understand that these restrictions may reduce my standard of living during the non-competition period and I assume and accept any risk associated with that possibility. I acknowledge that as ________________ for Intrepid with access to Confidential Information and trade secrets I have the ability to compete unfairly with Intrepid and further acknowledge that this agreement is designed to protect Intrepid from unfair competition.
|
8.
|
Remedies
.
If I violate this agreement, I acknowledge that Intrepid will face serious and irreparable harm. As such, Intrepid will be entitled to (a) an injunction that restrains and enjoins me from continuing to violate the agreement; and (b) any other remedies provided by law or in equity. I further agree that any claims or causes of action that I may have against Intrepid, whether based on this agreement or otherwise, shall not be a defense to the enforcement of any portion of this agreement.
|
9.
|
Severability
.
If any part of this agreement is held invalid, it shall not affect the validity of any other part of this agreement. If this agreement is held to be unreasonable as to time or scope, the time shall be shortened or the scope reduced (as appropriate) so as to comply with applicable law.
|
10.
|
Disclosure Obligation
.
I agree to disclose this agreement to every potential employer and business associate with whom I have direct contact regarding potential employment during the six-month period after the termination of my employment with Intrepid.
|
11.
|
Modifications
.
Except as provided in paragraph 9, this agreement may not be modified, waived or discharged except in writing signed by an officer of Intrepid and me.
|
12.
|
Choice of Law
.
This agreement shall be construed and enforced under the laws of Colorado.
|
13.
|
Offset
.
During and after my employment, I agree that Intrepid may reduce any amounts owed to me by any debts I owe Intrepid or any overpayment made by Intrepid to me.
|
14.
|
Waiver of Right to Jury Trial
.
By signing this agreement, I voluntarily, knowingly and intelligently waive any right I may have to a jury trial for all claims arising out of this Agreement and any claim arising out of or relating to my employment with or termination from Intrepid. Intrepid also hereby voluntarily, knowingly, and intelligently waives any right it might otherwise have to a jury trial for all claims arising out of or relating to my employment with or termination from Intrepid.
|
________________________________
|
_______________________________
|
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%
|
203 E. Florence, LLC
|
Delaware
|
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 the registrant's Board of Directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Dated: February 28, 2017
|
|
/s/ Robert P. Jornayvaz III
|
|
|
Robert P. Jornayvaz III
Executive Chairman of the Board, President and Chief Executive Officer
|
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 the registrant's Board of Directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Dated: February 28, 2017
|
|
/s/ Brian D. Frantz
|
|
|
Brian D. Frantz
Senior Vice President and Chief Accounting 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 (the "Exchange Act"); 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 28, 2017
|
|
/s/ Robert P. Jornayvaz III
|
|
|
Robert P. Jornayvaz III
Executive Chairman of the Board, President and Chief Executive 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 (the "Exchange Act"); 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 28, 2017
|
|
/s/ Brian D. Frantz
|
|
|
Brian D. Frantz
Senior Vice President and Chief Accounting 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 the End of the Period
|
Legal Actions Initiated During the Period
|
Legal Actions Resolved During the Period
|
Intrepid Potash East
(29-00170)
|
11
|
—
|
—
|
—
|
—
|
$21,599
|
—
|
—
|
—
|
1
|
2
|
2
|
Intrepid Potash West
(29-00175)
|
3
|
—
|
—
|
—
|
—
|
$4,061
|
—
|
—
|
—
|
2
|
—
|
1
|
Intrepid Potash North
(29-02028)
|
—
|
—
|
—
|
—
|
—
|
$5,686
|
—
|
—
|
—
|
1
|
1
|
1
|
•
|
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.
|
•
|
MSHA 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 the period do not necessarily relate to the citations or orders issued by MSHA during that period or to the pending legal actions reported in the table.
|
•
|
Notice of Pattern of Violations Under Section 104(e); 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, Initiated, and Resolved -
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.
|
Mine Name and MSHA Identification Number
|
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)
|
1
|
—
|
—
|
—
|
—
|
—
|
1
|
Intrepid Potash West
(29-00175)
|
2
|
—
|
—
|
—
|
—
|
—
|
2
|
Intrepid Potash North
(29-02028)
|
1
|
—
|
—
|
—
|
—
|
—
|
1
|
•
|
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.
|
•
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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.
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