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What changed in COMPASS MINERALS INTERNATIONAL INC's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of COMPASS MINERALS INTERNATIONAL INC's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+537 added−485 removedSource: 10-K (2023-11-29) vs 10-K (2022-12-14)

Top changes in COMPASS MINERALS INTERNATIONAL INC's 2023 10-K

537 paragraphs added · 485 removed · 397 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

67 edited+21 added−22 removed66 unchanged
Biggest changeOn March 16, 2021, our Board of Directors approved a plan to sell our South America chemicals and specialty plant nutrition businesses, our investment in Fermavi and our North America micronutrient product business (collectively, the “Specialty Businesses”) with the goal of reducing our leverage and enabling increased focus on optimizing our core businesses.
Biggest changeOn March 16, 2021, our Board of Directors approved a plan to sell our South America chemicals and specialty plant nutrition businesses, our investment in Fermavi and our North America micronutrient product business (collectively, the “Specialty Businesses”) with the goal of reducing our leverage and enabling increased focus on optimizing our core businesses and as described further in Part II, Item 8, Note 1 and Note 4 to our Consolidated Financial Statements, the South America specialty plant nutrition business sale closed on July 1, 2021, the North America micronutrient sale closed on May 4, 2021, the sale of our Fermavi investment closed on August 20, 2021 and the sale of our South America chemicals business closed on April 20, 2022.
As of September 30, 2022, we operate 12 production and packaging facilities with nearly 2,000 employees throughout the U.S., Canada and the U.K., including: • The largest underground rock salt mine in the world in Goderich, Ontario, Canada; • The largest dedicated rock salt mine in the U.K. in Winsford, Cheshire; • A solar evaporation facility located near Ogden, Utah, which is both the largest sulfate of potash specialty fertilizer (“SOP”) production site, the largest solar salt production site in the Western Hemisphere and the source of the lithium resource that we intend to develop; and • Several mechanical evaporation facilities producing consumer and industrial salt See Item 2, “Properties,” for a discussion of our mining properties, including processing methods, facilities, production and summaries of our mineral resources and reserves, both in the aggregate and for our individual material mining properties.
As of September 30, 2023, we operate 12 production and packaging facilities with nearly 2,000 employees throughout the U.S., Canada and the U.K., including: • The largest underground rock salt mine in the world in Goderich, Ontario, Canada; • The largest dedicated rock salt mine in the U.K. in Winsford, Cheshire; • A solar evaporation facility located near Ogden, Utah, which is both the largest sulfate of potash specialty fertilizer (“SOP”) production site, the largest solar salt production site in the Western Hemisphere and the source of the lithium salt resource that we intend to develop; and • Several mechanical evaporation facilities producing consumer and industrial salt See Item 2, “Properties,” for a discussion of our mining properties, including processing methods, facilities, production and summaries of our mineral resources and reserves, both in the aggregate and for our individual material mining properties.
By leveraging existing operational infrastructure, permits, water rights and pond processes to extract lithium as a co-product of our long-standing SOP, salt and magnesium chloride production at our Ogden facility, the incremental environmental footprint of the project is also reduced.
By leveraging existing operational infrastructure, permits, water rights and pond processes to extract lithium salt as a co-product of our long-standing SOP, sodium chloride and magnesium chloride production at our Ogden facility, the incremental environmental footprint of the project is also reduced.
For further discussion of how government regulations may impact our business, see Item 1A, “Risk Factors.” Taxes and Tariffs - We are subject to complex requirements of federal, state, local and foreign laws and regulations related to taxation, tariffs and import duties. See Part II, Item 8, Note 10 of our Consolidated Financial Statements for more information on taxes.
For further discussion of how government regulations may impact our business, see Item 1A, “Risk Factors.” Taxes and Tariffs - We are subject to complex requirements of federal, state, local and foreign laws and regulations related to taxation, tariffs and import duties. See Part II, Item 8, Note 11 of our Consolidated Financial Statements for more information on taxes.
Highway deicing salt in North America is sold primarily through an annual tendered bid contract process with governmental entities, as well as through multi-year contracts, with price, product quality and delivery capabilities as the primary competitive market factors. Some sales also occur through negotiated sales contracts with third-party customers, particularly in the U.K.
Highway deicing salt in North America is sold primarily through an annual tendered bid contract process with governmental entities, as well as through multi-year contracts, with price, product quality and delivery capabilities as the primary competitive market factors. Some sales also occur through negotiated sales contracts with customers, particularly in the U.K.
Anticipating future compliance obligations, implementing compliance plans and estimating future costs can be particularly challenging while laws and regulations are under development and have not been adopted. For further discussion, see Item 1A, “Risk Factors.” 13 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC.
Anticipating future compliance obligations, implementing compliance plans and estimating future costs can be particularly challenging while laws and regulations are under development and have not been adopted. For further discussion, see Item 1A, “Risk Factors.” 13 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC.
We believe we are among the largest private-label producers of water conditioning salt in North America and of table salt in Canada. Our Sifto brand encompasses a full line of salt products, which are well recognized in Canada. Our consumer and industrial business has broad product lines with both private-label and Company brands.
We estimate we are among the largest private-label producers of water conditioning salt in North America and of table salt in Canada. Our Sifto brand encompasses a full line of salt products, which are well recognized in Canada. Our consumer and industrial business has broad product lines with both private-label and Company brands.
In other instances, we have agreed to perform remediation activities or have undertaken voluntary remediation to address identified contamination. 12 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. Other Regulatory Matters As a global company, we are subject to complex and evolving laws and regulations.
In other instances, we have agreed to perform remediation activities or have undertaken voluntary remediation to address identified contamination. 12 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. Other Regulatory Matters As a global company, we are subject to complex and evolving laws and regulations.
Sales of our consumer and industrial products accounted for 37% of our fiscal 2022 Salt segment sales. We are the third largest producer of consumer and industrial salt products in North America. These products include commercial and consumer applications, such as water conditioning, consumer and professional ice control, food processing, agricultural applications, table salt and a variety of industrial applications.
Sales of our consumer and industrial products accounted for 37% of our fiscal 2023 Salt segment sales. We are the third largest producer of consumer and industrial salt products in North America. These products include commercial and consumer applications, such as water conditioning, consumer and professional ice control, food processing, agricultural applications, table salt and a variety of industrial applications.
These consumer and industrial products are channeled from our plants and third-party warehouses to our customers using a combination of direct sales personnel, contract personnel and a network of brokers or manufacturers’ representatives. 6 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC.
These consumer and industrial products are channeled from our plants and third-party warehouses to our customers using a combination of direct sales personnel, contract personnel and a network of brokers or manufacturers’ representatives. 6 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC.
Highway deicing, including salt sold to chemical customers, constituted 63% of our fiscal 2022 Salt segment sales. Our principal customers are states, provinces, counties, municipalities and road maintenance contractors that purchase bulk deicing salt, both treated and untreated, for ice control on public roadways.
Highway deicing, including salt sold to chemical customers, constituted 63% of our fiscal 2023 Salt segment sales. Our principal customers are states, provinces, counties, municipalities and road maintenance contractors that purchase bulk deicing salt, both treated and untreated, for ice control on public roadways.
However, demand for deicing salt products is primarily affected by the number and intensity of snow events and temperatures in our service territories. 5 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC.
However, demand for deicing salt products is primarily affected by the number and intensity of snow events and temperatures in our service territories. 5 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC.
The specialty plant nutrient market is highly fragmented. Commodity and specialty crops require specialty plant nutrients in varying degrees depending on the crop and soil conditions. 8 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC.
The specialty plant nutrient market is highly fragmented. Commodity and specialty crops require specialty plant nutrients in varying degrees depending on the crop and soil conditions. 8 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC.
OTHER DeepStore is our records management business in the U.K. that utilizes portions of previously excavated space in our salt mine in Winsford, Cheshire, for secure underground document storage and one warehouse location in London, England.
DeepStore is our records management business in the U.K. that utilizes portions of previously excavated space in our salt mine in Winsford, Cheshire, for secure underground document and archive storage and one warehouse location in London, England.
Operating Requirements and Impacts Our operations require permits for extraction of salt and brine, air emissions, surface water discharges of process material and wastes, waste generation, injection of brine and wastewater in to subsurface wells and other activities.
Operating Requirements and Impacts Our operations require permits for extraction of salts and brine, air emissions, surface water discharges of process material and wastes, waste generation, injection of brine and wastewater in to subsurface wells and other activities.
We expect our future growth to stem from the conversion of certain commodity potassium applications into higher yield SOP applications. Approximately 87% of our Plant Nutrition segment sales in fiscal 2022 were made to U.S. customers, who include retail fertilizer dealers and distributors of agricultural products as well as professional turf care customers.
We expect our future growth to stem from the conversion of certain commodity potassium applications into higher yield SOP applications. Approximately 91% of our Plant Nutrition segment sales in fiscal 2023 were made to U.S. customers, who include retail fertilizer dealers and distributors of agricultural products as well as professional turf care customers.
Environmental, Health and Safety At Compass Minerals, we prioritize a safe and healthy work environment for all our employees. Our Company is focused on the ultimate goal of zero harm, which includes zero injuries to our employees and contractors. This goal requires the collaboration and participation of all employees, at every site.
Environmental, Health and Safety At Compass Minerals, we prioritize a safe and healthy work environment for all our employees. We are focused on the ultimate goal of zero harm, which includes zero injuries to our employees and contractors, and zero environmental incidents. This goal requires the collaboration and participation of all employees, at every site.
Salt segment sales as a percentage of total sales from continuing operations for the fiscal year ended September 30, 2022, the nine months ended September 30, 2021 and the fiscal year ended December 31, 2020 are as follows: Our Salt segment products are used in a wide variety of applications, including as a deicer for roadways, consumer and professional use, as an ingredient in chemical production, for water treatment, human and animal nutrition and for a variety of other consumer and industrial uses.
Salt segment sales as a percentage of total sales from continuing operations for the fiscal years ended September 30, 2023 and 2022, and the nine months ended September 30, 2021 are as follows: Our Salt segment products are used in a wide variety of applications, including as a deicer for roadways, consumer and professional use, as an ingredient in chemical production, for water treatment, human and animal nutrition and for a variety of other consumer and industrial uses.
As such, our fiscal year 2022, or fiscal 2022, refers to the period from October 1, 2021 to September 30, 2022.
As such, our fiscal year 2023, or fiscal 2023, refers to the period from October 1, 2022 to September 30, 2023.
Our results of operations, cash flows, and all transactions impacting shareholders’ equity presented in this Annual Report on Form 10-K are for the twelve months ended September 30, 2022 (“fiscal 2022”), the nine month transition period ended September 30, 2021 (“fiscal 2021”), and the twelve months ended December 31, 2020 (“fiscal 2020”), unless otherwise noted.
Our results of operations, cash flows, and all transactions impacting shareholders’ equity presented in this Annual Report on Form 10-K are for the twelve months ended September 30, 2023 (“fiscal 2023”), the twelve months ended September 30, 2022 (“fiscal 2022”) and the nine month transition period ended September 30, 2021 (“fiscal 2021”), unless otherwise noted.
To help ensure continued focus on our workforce and culture, as well as measure our progress in these areas, our Company announced in fiscal 2022 a set of fiscal 2025 goals and targets, including in the categories of safety, employee development, and diversity and inclusion.
To help ensure continued focus on our workforce and culture, as well as measure our progress in these areas, we announced in fiscal 2022 a set of fiscal 2025 environmental, social and governance goals and targets, including in the categories of safety, employee development, and diversity and inclusion.
The facility will be located on the east side of the Great Salt Lake where a significant portion of our existing infrastructure is located.
The facility was to be located on the east side of the Great Salt Lake where a significant portion of our existing infrastructure is located.
Of our 12 collective bargaining agreements in effect on September 30, 2022, six will expire in fiscal 2023, one will expire in fiscal 2024, three will expire in fiscal 2025 (including for our Cote Blanche mine), and one will expire in each of fiscal 2026 (for our Goderich mine) and 2027.
Of our 12 collective bargaining agreements in effect on September 30, 2023, one will expire in fiscal 2024, six will expire in fiscal 2025 (including our Cote Blanche mine), four will expire in fiscal 2026 (including our Goderich mine), and one will expire in fiscal 2027.
For more information about our lithium resource and Ogden facility, see Item 2, “Properties—Ogden Facility.” For phase one of our lithium development project, we are planning to build a battery-grade lithium carbonate facility with an annual capacity of approximately 11,000 metric tons.
For more information about our lithium salt resource and Ogden facility, see Item 2, “Properties—Ogden Facility.” Prior to suspension of the project, for phase one of our lithium development project, we planned to build a battery-grade lithium carbonate facility with an annual capacity of approximately 11,000 metric tons.
For further discussion of how EHS laws and regulations may impact our business, see Item 1A, “Risk Factors.” While a number of our capital projects indirectly result in environmental improvements, we estimate that our fiscal 2022 environmental-specific capital expenditures were $0.4 million. We expect to have approximately $4.1 million of environmental capital expenditures in fiscal 2023.
For further discussion of how EHS laws and regulations may impact our business, see Item 1A, “Risk Factors.” While a number of our capital projects indirectly result in environmental improvements, we estimate that our fiscal 2023 environmental-specific capital expenditures were $1.8 million.
Additionally, demand for our SOP products has been resilient despite the challenges facing the global potash market. We expect the long-term demand for potassium nutrients to continue to grow as arable land per capita decreases, thereby encouraging improved crop yield efficiencies.
However, recently improved economics for row crops has led to an improved commodity potash market. Additionally, demand for our SOP products has been resilient despite the challenges facing the global potash market. We expect the long-term demand for potassium nutrients to continue to grow as arable land per capita decreases, thereby encouraging improved crop yield efficiencies.
In addition, our sites form focus groups to engage team members and establish best practices for specific health and safety issues. To keep health and safety top of mind, we also encourage our employees to begin internal meetings with a “safety share,” a safety reminder or a lesson learned.
In addition, our sites form focus groups to engage team members and establish best practices for specific health and safety issues. To keep health and safety top of mind, we also encourage our employees to begin internal meetings with a “safety share,” a safety reminder or a lesson learned. 10 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC.
Salt Association and Ontario Mining Association. Community Beyond the success of our Company and our people, we are committed to supporting and creating value for our communities. We recognize that in many areas, we play an integral role in providing jobs and fostering local economic growth.
Community Beyond the success of our Company and our people, we are committed to supporting and creating value for communities where our employees live and work. We recognize that in many areas, we play an integral role in providing jobs and fostering local economic growth.
In fiscal 2022, the Salt segment accounted for approximately 81% of our sales (see Part II, Item 8, Note 14 to our Consolidated Financial Statements for segment financial information).
In fiscal 2023, the Salt segment accounted for approximately 84% of our sales (see Part II, Item 8, Note 15 to our Consolidated Financial Statements for segment financial information).
SOP is also a more cost-effective alternative to other forms of specialty potash. Our SOP sales are primarily concentrated in the Western and Southeastern U.S. where the crops and soil conditions favor the use of low-chloride potassium nutrients.
SOP is also a more cost-effective alternative to other forms of specialty potash. 7 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. Our SOP sales are primarily concentrated in the Western and Southeastern U.S. where the crops and soil conditions favor the use of low-chloride potassium nutrients.
HUMAN CAPITAL MANAGEMENT As of September 30, 2022, we employed 1,954 employees, of which 997 were located in the U.S., 773 were located in Canada and 184 were located in the U.K. Nearly 50% of our workforce is represented by collective bargaining agreements.
HUMAN CAPITAL MANAGEMENT As of September 30, 2023, we employed 1,981 employees, of which 1,014 were located in the U.S., 777 were located in Canada and 190 were located in the U.K. Nearly 50% of our workforce is represented by collective bargaining agreements.
The disclosure or misappropriation of our intellectual property could harm our ability to protect our rights and our competitive position (see “Risk Factors—Our intellectual property may be misappropriated or subject to claims of infringement” for more information).
Monitoring the unauthorized use of our technology is difficult, and we may not be able to prevent unauthorized use of our technology. The disclosure or misappropriation of our intellectual property could harm our ability to protect our rights and our competitive position (see “Risk Factors—Our intellectual property may be misappropriated or subject to claims of infringement” for more information).
This Annual Report on Form 10-K also includes an unaudited consolidated statement of operations for the comparable twelve month period of October 1, 2020 to September 30, 2021 and the comparable nine month stub period of January 1, 2020 to September 30, 2020; see Part II, Item 8, Note 19 to our Consolidated Financial Statements for additional information.
This Annual Report on Form 10-K also includes an unaudited consolidated statement of operations for the comparable twelve month period of October 1, 2020 to September 30, 2021; see Part II, Item 8, Note 21 to our Consolidated Financial Statements for additional information. SALT SEGMENT Overview Salt is indispensable and enormously versatile with thousands of reported uses.
We accrue for environmental liabilities when we believe it is probable that we will be responsible, in whole or in part, for environmental investigation or remediation activities and the expenditures for these activities are reasonably estimable.
We accrue for environmental liabilities when we believe it is probable that we will be responsible, in whole or in part, for environmental 11 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. investigation or remediation activities and the expenditures for these activities are reasonably estimable.
While we also purchase potassium chloride (“KCl”) and calcium chloride to sell as finished products or to blend with sodium chloride to produce specialty products. Sodium chloride represents the vast majority of the products we produce, market and sell.
Our Salt products include rock salt, mechanically-evaporated salt, solar-evaporated salt, brine magnesium chloride and flake magnesium chloride. We also purchase potassium chloride (“KCl”) and calcium chloride to sell as finished products or to blend with sodium chloride to produce specialty products. Sodium chloride represents the vast majority of the products we produce, market and sell.
Several options are available to employees who are looking to increase their knowledge and grow professionally. Additionally, employees have opportunities for professional development through strategic partnerships with several outside organizations such as Central Exchange, Society of Women Engineers, and American Royal, as well as through membership in trade groups including The Fertilizer Institute, Essential Minerals Association, U.K.
Additionally, employees have opportunities for professional development through strategic partnerships with several outside organizations such as Washington University Olin Business School, Central Exchange, Society of Women Engineers, and American Royal, as well as through membership in trade groups including The Fertilizer Institute, Essential Minerals Association, U.K. Salt Association and Ontario Mining Association.
SALT SEGMENT Overview Salt is indispensable and enormously versatile with thousands of reported uses. In addition, there are no known cost-effective alternatives for most high-volume uses. Through the use of effective mining techniques and efficient production processes, we leverage our high-grade salt deposits, which are among the most extensive in the world.
In addition, there are no known cost-effective alternatives for most high-volume uses. Through the use of effective mining techniques and efficient production processes, we leverage our high-grade salt deposits, which are among the most extensive in the world. Further, many of our Salt segment assets are in locations that are logistically favorable to our core markets.
The chart below shows our annual sales volumes of Salt segment products for the fiscal year ended September 30, 2022, the nine months ended September 30, 2021 and the fiscal year ended December 31, 2020: Competition We face strong competition in each of the markets in which we operate.
The chart below shows our annual sales volumes of Salt segment products for the fiscal years ended September 30, 2023 and 2022, and the nine months ended September 30, 2021: Competition We face strong competition in each of the markets in which we operate. In North America, other large, nationally and internationally recognized companies compete with our Salt segment products.
Two competitors serve the highway deicing salt market in the U.K., one in Northern England and one in Northern Ireland. Typically, there are not significant imports of highway deicing salt into the U.K. Salt is a commodity, which limits the potential for product differentiation and increases competition. Additionally, low barriers to entry in the consumer and industrial markets increase competition.
Typically, there are not significant imports of highway deicing salt into the U.K. Salt is a commodity, which limits the potential for product differentiation and increases competition. Additionally, low barriers to entry in the consumer and industrial markets increase competition. Our advantageous geographical locations, superior assets and distribution network strengthen our competitive position.
It is an indicator of the number of incidents per 100 employees per year. A key driver of this trajectory has been the implementation of the SafeStart ® methodology. Tools introduced through SafeStart training addressing unintentional human error and critical safety habits, which reduce risk and the probability of injury.
A key driver of this trajectory has been the implementation of the SafeStart ® methodology across our organization. Tools introduced through SafeStart training addressed unintentional human error and critical safety habits, which reduce risk and the probability of injury.
In 2021, we identified a lithium brine resource at our Ogden site and began a strategic evaluation to assess development options to service growing U.S. domestic lithium demand. We believe our lithium resource in the Great Salt Lake’s north arm is among the most attractive undeveloped North American lithium brine asset.
In 2021, we identified a lithium salt resource at our Ogden site and began a strategic evaluation to assess development options to service growing U.S. domestic lithium demand.
Change in Fiscal Year On June 23, 2021, our Board of Directors approved a change in our fiscal year from December 31 to September 30, effective January 1, 2021.
See Part II, Item 8, Note 15 to our Consolidated Financial Statements for more information. Change in Fiscal Year On June 23, 2021, our Board of Directors approved a change in our fiscal year from December 31 to September 30, effective January 1, 2021.
Our advantageous geographical locations, superior assets and distribution network strengthen our competitive position. PLANT NUTRITION SEGMENT Industry Overview Fertilizers are critical for efficient crop production using the limited arable land resources available around the world.
PLANT NUTRITION SEGMENT Industry Overview Fertilizers are critical for efficient crop production using the limited arable land resources available around the world.
INTELLECTUAL PROPERTY To protect our intellectual property, we rely on a combination of patents, trademarks, copyrights, trade secret protection, employee and third-party non-disclosure agreements, license arrangements and domain name registrations.
INTELLECTUAL PROPERTY To protect our intellectual property, we rely on a combination of patents, trademarks, copyrights, trade secret protection, employee and third-party non-disclosure agreements, license arrangements and domain name registrations. These protections are important to our business and we believe that our success is at least partly dependent on the acquisition and maintenance of these rights.
While long-term global consumption of potash has increased in response to growing populations and the need for additional food supplies, the market for commodity potash has been challenged in recent years due to downturns in the broader crop market which pressure grower incomes. However, recently improved economics for row crops has led to an improved commodity potash market.
Consequently, weather patterns and field conditions in these locations can impact Plant Nutrition sales volumes. While long-term global consumption of potash has increased in response to growing populations and the need for additional food supplies, the market for commodity potash has been challenged in recent years due to downturns in the broader crop market which pressure grower incomes.
Any issued patents, trademarks or copyrights on our proprietary technology may not provide us with substantial protection or be commercially beneficial to us. The issuance of a patent is not conclusive as to its validity or its enforceability. Competitors may challenge our patent rights. If our patents are held invalid or unenforceable, our competitors could commercialize our patented technology.
The issuance of a patent is not conclusive as to its validity or its enforceability. Competitors may challenge our patent rights. If our patents are held invalid or unenforceable, our competitors could commercialize our patented technology. With respect to proprietary know-how, we rely on trade secret protection and confidentiality agreements.
In the first quarter of 2021, we concluded that certain of our assets met the criteria for classification as held for sale and discontinued operations. As a result, we are presenting two reportable segments in continuing operations, Salt and Plant Nutrition (which was previously known as the Plant Nutrition North America segment) in this Form 10-K.
Accordingly, the Specialty Businesses’ results of operations are presented as discontinued operations in the Consolidated Statements of Operations for the periods presented. As a result, we are presenting two reportable segments in continuing operations, Salt and Plant Nutrition (which was previously known as the Plant Nutrition North America segment) in this Form 10-K.
In North America, other large, nationally and internationally recognized companies compete with our Salt segment products. In addition, there are also several smaller regional producers of salt. There are several importers of salt into North America, which mostly impact the East Coast and West Coast of the U.S. where we have minimal market presence.
In addition, there are also several smaller regional producers of salt. There are several importers of salt into North America, which mostly impact the East Coast and West Coast of the U.S. where we have minimal market presence. Two competitors serve the highway deicing salt market in the U.K., one in Northern England and one in Northern Ireland.
In addition, there are live virtual trainings and bootcamps our employees can attend. Our Company also has other forms of development opportunities for employees, such as trainings on performance mindset, team effectiveness and communication styles, and programs available through our Company’s ERGs such as an employee book club.
We also has other forms of development opportunities for employees, such as trainings on performance mindset, team effectiveness and communication styles, and programs available through our ERGs such as an employee book club. Several options are available to employees who are looking to increase their knowledge and grow professionally.
Currently, DeepStore does not have a significant share of the document storage market in the U.K., and it is not material in comparison to our Salt and Plant Nutrition segments. OTHER INVESTMENTS Lithium Our Ogden facility produces SOP, salt and magnesium chloride products from the high mineral concentrations within the ambient lake brine in the Great Salt Lake.
Currently, DeepStore does not have a significant share of the document storage market in the U.K., and it is not material in comparison to our Salt and Plant Nutrition segments.
Further, many of our Salt segment assets are in locations that are logistically favorable to our core markets. Our strategy for this segment is to focus on driving profitability from every ton we produce through cost efficiency as well as commercial and operational execution.
Our strategy for this segment is to focus on driving profitability from every ton we produce through cost efficiency as well as commercial and operational execution. Through our Salt segment, we produce, market and sell salt (sodium chloride) and magnesium chloride in North America and sodium chloride in the U.K.
Our current operations at Ogden include a 55,000 acre developed pond system and leases totaling over 170,000 acres. We also believe we will be able to benefit from several synergies related to our existing operations at Ogden, including infrastructure, logistics and pond operations that we will utilize for our lithium resource.
If we were to recommence investment in the lithium project, we also believe we will be able to benefit from several synergies related to our existing operations at Ogden, including infrastructure, logistics and pond operations that we will utilize for our lithium salt resource.
Professional certifications in areas like Six Sigma, information technology and business analysis are also available to employees at no cost. Content is presented in a variety of formats from videos and readings to downloadable templates and work aids for managers to use in team meetings or with direct reports.
Content is presented in a variety of formats from videos and readings to downloadable templates and work aids for managers to use in team meetings or with direct reports. In addition, there are live virtual trainings and bootcamps our employees can attend.
ENVIRONMENTAL, HEALTH AND SAFETY AND OTHER REGULATORY MATTERS Environmental, Health and Safety Matters Our operations subject us to an evolving set of federal, state, local and foreign environmental, health and safety (“EHS”) laws and regulations.
We also align charitable giving and volunteer engagement with our Core Purpose to help keep people safe, feed the world and enrich lives, every day. ENVIRONMENTAL, HEALTH AND SAFETY AND OTHER REGULATORY MATTERS Environmental, Health and Safety Matters Our operations subject us to an evolving set of federal, state, local and foreign environmental, health and safety (“EHS”) laws and regulations.
We measure zero harm by how we are decreasing our total case incident rate (“TCIR”) and improving our environmental compliance-based metrics. For the fiscal year ended September 30, 2022, our TCIR is 1.27.
We measure zero harm by how we are decreasing our total recordable injury rate (“TRIR”) and improving our environmental compliance-based metrics. For the fiscal year ended September 30, 2023, our TRIR is 1.17. Our reporting standard, TRIR, is a stringent incident reporting standard based upon the U.S. Department of Labor’s Mine Safety and Health Administration regulations.
On a larger scale, through our products, we support safety, sustainability and addressing food insecurity in communities around the world. Compass Minerals Cares, our community engagement program, aligns with our Core Purpose to help keep people safe, feed the world and enrich lives, every day.
On a larger scale, through our products, we support safety, sustainability and addressing food insecurity in communities around the world. Focused on Company giving and employee volunteerism to positively impact our communities, Compass Minerals Cares, our community engagement program, looks to the United Nations Sustainable Development Goals to guide community engagement initiatives.
However, future capital expenditures are subject to a number of uncertainties, including changes to environmental laws and regulations, changes to our operations or unforeseen remediation requirements, and these expenditures could exceed our expectations. 11 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. As of September 30, 2022, we had recorded $1.8 million of accruals for environmental liabilities.
We expect to have approximately $5.9 million of environmental capital expenditures in fiscal 2024 on a variety of projects. However, future capital expenditures are subject to a number of uncertainties, including changes to environmental laws and regulations, changes to our operations or unforeseen remediation requirements, and these expenditures could exceed our expectations.
We market our SOP under the trade name Protassium+®. We sell our salt and plant nutrition products primarily in the U.S., Canada and the U.K. See Part II, Item 8, Note 14 to our Consolidated Financial Statements for financial information relating to our operations by geographic areas.
See Part II, Item 8, Note 15 to our Consolidated Financial Statements for financial information relating to our operations by geographic areas.
These protections 9 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. are important to our business and we believe that our success is at least partly dependent on the acquisition and maintenance of these rights. However, we rely primarily on the innovative skills, technical competence, operational knowledge and marketing abilities required by our business in order to succeed.
However, we rely primarily on the innovative skills, technical competence, operational knowledge and marketing abilities required by our business in order to succeed. We sell many of our products under a number of registered trademarks that we believe are widely recognized in the industry.
Employee Development In fiscal 2022, we continued utilizing Compass Minerals University (“CMU”), an online platform for employee training and development. CMU provides our employees with on‑demand access to more than 500 learning modules on topics ranging from project management to strategic thinking to emotional intelligence.
CMU provides our employees with on‑demand access to more than 500 learning modules on topics ranging from project management to strategic thinking to emotional intelligence. Professional certifications in areas like Six Sigma, information technology and business analysis are also available to employees at no cost.
We sell many of our products under a number of registered trademarks that we believe are widely recognized in the industry. Our trademarks registered pursuant to applicable intellectual property laws include COMPASS MINERALS, AMERICAN STOCKMAN, CANADIAN STOCKMAN, DUSTGARD, FREEZGARD, ICEAWAY, PROSOFT, SAFE STEP, SAFE STEP PRO, SIFTO, SURESOFT, SURE PAWS and PROTASSIUM+.
Our trademarks registered pursuant to applicable intellectual property laws include COMPASS MINERALS, AMERICAN STOCKMAN, CANADIAN STOCKMAN, DUSTGARD, FREEZGARD, ICEAWAY, PROSOFT, SAFE STEP, SAFE STEP PRO, SIFTO, SURESOFT, SURE PAWS and PROTASSIUM+ and FORTRESS FIRE RETARDANT SYSTEMS. Any issued patents, trademarks or copyrights on our proprietary technology may not provide us with substantial protection or be commercially beneficial to us.
Our plant nutrition products help improve the quality and yield of crops, while supporting sustainable agriculture. Additionally, we are pursuing development of a sustainable lithium brine resource to support the North American battery market and we are a minority owner of Fortress North America, a next-generation fire retardant company.
Our plant nutrition products help improve the quality and yield of crops, while supporting sustainable agriculture. Our next-generation fire retardants help to slow, stop and prevent wildfires through the use of high-performing and environmentally-friendly products.
Fortress’ patented portfolio of long-term fire retardant, aerial and ground retardant formulations has been developed primarily using essential minerals supplied from our Ogden facility. Fortress plans to further expand its suite of magnesium chloride-based retardants, which provide unique properties for fighting wildfires and abating fire risk.
Fortress is our recently acquired fire retardant company dedicated to developing and producing a portfolio of environmentally friendly next-generation aerial and ground-applied fire retardant products to help prevent and combat wildfires. Fortress’ approved long-term aerial and ground-applied fire retardant formulations have been developed using magnesium chloride supplied from our Ogden facility.
See Part II, Item 8, Note 14 to our Consolidated Financial Statements for more information. We believe these dispositions were conducted through a single disposal plan representing a strategic shift that had a material effect on our operations and financial results.
We believe these dispositions were conducted through a single disposal plan representing a strategic shift that had a 4 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. material effect on our operations and financial results. Consequently, the Specialty Businesses qualified for presentation as discontinued operations in accordance with U.S. generally accepted accounting principles (“GAAP”).
Through our priority health practices, employees gain a stronger understanding of our Company’s future plans, goals and milestones and how their work contributes to Compass Minerals’ success. Diversity, Belonging, Inclusion and Equity At Compass Minerals, we believe that everyone has a voice and every voice matters.
Organizational Health In fiscal 2023, our journey to improve organizational health continued to involve ensuring that our workforce is engaged, supported and equipped to support the needs of our customers and communities. Diversity, Belonging, Inclusion and Equity At Compass Minerals, we believe that everyone has a voice and every voice matters.
Additionally, our ERGs demonstrate how inclusion enhances employee engagement, provides a sense of belonging, creates opportunities for development and drives business results. Current ERGs at our Company include Emerging Leaders, Compass Pride for LGBTQ+ employees and allies, Women and Allies, Advanced Career for seasoned employees and allies and Asian Employees and Allies.
In fiscal 2023, we added a new employee resource group (“ERG”), Black Employees and Allies to bring our employee resource groups to a total of six to include Emerging Leaders, Compass Pride for LGBTQ+ employees and allies, Women and Allies, Advanced Career for seasoned employees and allies and Asian Employees and Allies.
Fortress In November 2021, we announced a $45 million equity investment in Fortress North America, LLC (“Fortress”), a next-generation fire retardant company dedicated to developing and producing a portfolio of more environmentally friendly fire retardants to combat wildfires.
We market our SOP under the trade name Protassium+®. In May 2023, we completed the purchase of Fortress North America, LLC (“Fortress”), a next-generation fire retardant company dedicated to developing and producing a portfolio of magnesium chloride-based aerial and ground fire retardant products to help combat wildfires (see Part II, Item 8, Note 3 of our Consolidated Financial Statements).
Removed
During the twelve months ended December 31, 2020 (“fiscal 2020”), we initiated an evaluation of the strategic fit of certain of our businesses.
Added
Additionally, we have been pursuing development of a sustainable lithium salt resource to support the North American battery market, although the project has been suspended indefinitely beyond certain already committed items associated with the early stages of construction of our commercial scale demonstration unit.
Removed
As described further in Part II, Item 8, Note 1 and Note 3 to our Consolidated Financial Statements, on March 23, 2021, April 7, 2021, June 28, 2021 and April 20, 2022, we entered into definitive agreements to sell our South America specialty plant nutrition business, a component of our North America micronutrient business, our Fermavi investment and our South America chemicals business, respectively.
Added
Magnesium chloride is an existing product stream out of our Ogden, Utah, solar evaporation facility. During the third quarter of fiscal 2023, Fortress entered into an agreement with the U.S. Forest Service (“USFS”) to supply product and provide associated services for the 2023 fire season.
Removed
The South America specialty plant nutrition business sale closed on July 1, 2021, the North America micronutrient sale closed on May 4, 2021, the sale of our Fermavi investment closed on August 20, 2021 and the sale of our South America chemicals business closed on April 20, 2022.
Added
Additionally, we have been pursuing development of a sustainable lithium salt resource near Ogden, UT to support the North American battery market.
Removed
Consequently, the Specialty Businesses qualified for presentation as assets and liabilities held for sale and discontinued operations in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”).
Added
As previously announced, we have suspended indefinitely any further investment in the lithium project in Utah beyond certain already committed items associated with the early stages of construction of our commercial scale demonstration unit until further clarity is provided on the evolving regulatory climate.
Removed
Accordingly, current and noncurrent assets and liabilities of the Specialty Businesses are presented in the Consolidated Balance Sheets as assets and liabilities held for sale for the periods presented and their results of operations are presented as discontinued operations in the Consolidated Statements of Operations for the periods presented. 4 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC.
Added
We are considering seeking partners at the project level with an aim of reducing our share of capital costs and lowering execution risk in the event that the project is restarted. We sell our salt, plant nutrition and fire retardant products primarily in the U.S., Canada and the U.K.
Removed
Through our Salt segment, we produce, market and sell salt (sodium chloride) and magnesium chloride in North America and sodium chloride in the U.K. Our Salt products include rock salt, mechanically-evaporated salt, solar-evaporated salt, brine magnesium chloride and flake magnesium chloride.
Added
OTHER BUSINESSES Fire retardants are a critical tool for helping slow, stop and prevent wildfires by altering fuels (e.g., vegetation) to make them less flammable. Aerial fire retardant is typically applied ahead of an active wildland fire to stop or slow its spread, in order to allow ground-crew to safely build a fire line.
Removed
Consequently, weather patterns and field conditions in these locations can impact Plant Nutrition sales volumes. 7 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe process technology for commercial extraction of lithium from brines with low lithium and high impurity is still developing. We have not realized any revenues to date from the sale of lithium, and do not expect to before 2025.
Biggest changeAdditionally, although we have completed an initial assessment to define the lithium resource at our existing operations, mineral resources are not mineral reserves and do not have demonstrated economic viability. The process technology for commercial extraction of lithium chloride from brines with low lithium and high impurity is still developing.
Although we make substantial investments in product innovation, we cannot be certain that we will be able to develop, obtain or successfully implement new products or technologies on a timely basis or that they will be well-received by our customers. Moreover, our investments in new products and technologies involve certain risks and uncertainties and could disrupt our ongoing business.
Although we make investments in product innovation, we cannot be certain that we will be able to develop, obtain or successfully implement new products or technologies on a timely basis or that they will be well-received by our customers. Moreover, our investments in new products and technologies involve certain risks and uncertainties and could disrupt our ongoing business.
In addition, our ability to produce SOP, salt and magnesium chloride, as well as any future production of lithium, from our solar evaporation ponds located near Ogden, Utah, is dependent upon sufficient lake brine levels in the Great Salt Lake and hot, arid summer weather conditions.
In addition, our ability to produce SOP, sodium chloride and magnesium chloride, as well as any future production of lithium salt, from our solar evaporation ponds located near Ogden, Utah, is dependent upon sufficient lake brine levels in the Great Salt Lake and hot, arid summer weather conditions.
We are also involved periodically in other reviews, inquiries, investigations and other proceedings initiated by or involving government agencies (including litigation brought by Canadian provincial tax authorities as described in Part II, Item 8, Note 10 to our Consolidated Financial Statements), some of which may result in adverse judgments, settlements, fines, penalties, injunctions or other relief.
We are also involved periodically in other reviews, inquiries, investigations and other proceedings initiated by or involving government agencies (including litigation brought by Canadian provincial tax authorities as described in Part II, Item 8, Note 11 to our Consolidated Financial Statements), some of which may result in adverse judgments, settlements, fines, penalties, injunctions or other relief.
See “Business—Environmental, Health and Safety and Other Regulatory Matters” for more information about EHS laws and regulations affecting us and their potential impact on us. We could incur significant environmental liabilities with respect to our current, future or former facilities, adjacent or nearby third-party facilities or off-site disposal locations.
See Item 1, “Business—Environmental, Health and Safety and Other Regulatory Matters” for more information about EHS laws and regulations affecting us and their potential impact on us. We could incur significant environmental liabilities with respect to our current, future or former facilities, adjacent or nearby third-party facilities or off-site disposal locations.
Canadian provincial tax authorities have challenged our tax positions and assessed additional taxes on us, which are described in Part II, Item 8, Note 10 to our Consolidated Financial Statements. These tax assessments and future tax assessments could be material if the disputes are not resolved in our favor.
Canadian provincial tax authorities have challenged our tax positions and assessed additional taxes on us, which are described in Part II, Item 8, Note 11 to our Consolidated Financial Statements. These tax assessments and future tax assessments could be material if the disputes are not resolved in our favor.
Weather conditions can also lead to a reduction in farmable acres, flooding, drought or wild fires, which could also adversely impact the number of acres planted, growers’ crop yields and the uptake of plant nutrients, reducing the need for application of plant nutrition products for the next planting season, which could result in lower demand for our SOP products and impact sale prices.
Weather conditions can also lead to a reduction in farmable acres, flooding, drought or wildfires, which could also adversely impact the number of acres planted, growers’ crop yields and the uptake of plant nutrients, reducing the need for application of plant nutrition products for the next planting season, which could result in lower demand for our SOP products and impact sale prices.
These factors and assumptions include: • geologic and mining conditions, including our ability to access certain mineral deposits as a result of the nature of the geologic formations of our salt mines or other factors, which may not be fully identified by available exploration data and may differ from our experience in areas we currently mine; • demand for our minerals; • current and future market prices for our minerals, contractual arrangements, operating costs and capital expenditures; • taxes and development and reclamation costs; 15 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. • mining technology and processing improvements, including process technology for the extraction of lithium from brines; • the effects of regulation by governmental agencies; • the ability to obtain, maintain and renew all required permits; • employee health and safety; • historical production from the area compared with production from other producing areas; and • our ability to convert all or any part of our resources, including our lithium and lithium carbonate equivalent (“LCE”) mineral resources, to economically extractable mineral reserves.
These factors and assumptions include: 16 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. • geologic and mining conditions, including our ability to access certain mineral deposits as a result of the nature of the geologic formations of our salt mines or other factors, which may not be fully identified by available exploration data and may differ from our experience in areas we currently mine; • demand for our minerals; • current and future market prices for our minerals, contractual arrangements, operating costs and capital expenditures; • taxes and development and reclamation costs; • mining technology and processing improvements, including process technology for the extraction of lithium salt from brines; • the effects of legislation or interpretations thereof, or regulation by governmental agencies; • the ability to obtain, maintain and renew all required permits; • employee health and safety; • historical production from the area compared with production from other producing areas; and • our ability to convert all or any part of our resources, including our lithium salt and lithium carbonate equivalent (“LCE”) mineral resources, to economically extractable mineral reserves.
In connection with our dispute of tax assessments made by Canadian provincial tax authorities (described in more detail in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Investments, Liquidity and Capital Resources” and Part II, Item 8, Note 10 of our Consolidated Financial Statements), we are required to post and maintain financial performance bonds.
In connection with our dispute of tax assessments made by Canadian provincial tax authorities (described in more detail in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Investments, Liquidity and Capital Resources” and Part II, Item 8, Note 11 of our Consolidated Financial Statements), we are required to post and maintain financial performance bonds.
Customers are more likely to decrease purchases and application rates when they expect declining agricultural economics or relatively high plant nutrition costs, other costs and soil nutrient levels. This variability can materially impact our prices and volumes sold.
Customers are more likely to decrease purchases and application rates when they expect declining agricultural economics or relatively high plant nutrient costs, other input costs or elevated soil nutrient levels. This variability can materially impact our prices and volumes sold.
The demand for our products is seasonal. The demand for our salt and plant nutrition products is seasonal, and the degree of seasonality can change significantly from year to year due to weather conditions, including the number of snow events, rainfall and other factors. Our salt deicing business is seasonal.
The demand for our salt, plant nutrition and fire retardant products is seasonal, and the degree of seasonality can change significantly from year to year due to weather conditions, including the number of snow events, rainfall, drought and other factors. Our salt deicing business is seasonal.
Certain U.S. states have either enacted or proposed legislation that would prov ide a preference for their agencies or municipalities to use salt mined in the U.S., their home state or selected states.
Certain U.S. states have either enacted or proposed legislation that would provide a preference for their agencies or municipalities to use salt mined in the U.S., their home state or selected states.
For further discussion of pending litigation and governmental proceedings and investigations, see Part II, Item 8, Note 10 and Note 13 to our Consolidated Financial Statements. We are subject to EHS laws and regulations which could become more stringent and adversely affect our business.
For further discussion of pending litigation and governmental proceedings and investigations, see Part II, Item 8, Note 11 and Note 14 to our Consolidated Financial Statements. We are subject to EHS laws and regulations which could become more stringent and adversely affect our business.
If we cannot make acquisitions or investments, our business growth may be limited. Acquisitions of new businesses and investments in businesses (including our investment in Fortress North America) may not perform as expected, may lose value, may not positively impact our financial performance and could increase our debt obligations.
If we cannot make acquisitions or investments, our business growth may be limited. Acquisitions of new businesses and investments in businesses (including our acquisition of Fortress) may not perform as expected, may lose value, may not positively impact our financial performance and could increase our debt obligations.
Our international operations and sales are subject to numerous risks and uncertainties, including: • economic developments including changes in currency exchange rates, inflation risks, exchange controls, tariffs, economic sanctions, other trade protection measures and import or export licensing requirements; • difficulties and costs associated with complying with laws, treaties and regulations, including tax, labor and data privacy laws, treaties and regulations, and changes to laws, treaties and regulations; • restrictions on our ability to own or operate subsidiaries, make investments or acquire new businesses; • restrictions on our ab ility to repatriate earnings from our non-U.S. subsidiaries to the U.S. or the imposition of withholding taxes on remittances and other payments by our subsidiaries; • political developments (including uncertainty, labor shortages and potential trade difficulties caused by the U.K.’s exit from the EU, commonly referred to as “Brexit”), government deadlock, political instability, political activism, terrorist activities, civil unrest and international conflicts (including impacts from the current war in Ukraine ); an d • uncertain and va rying enforcement of laws and regulations and weak protection of intellectual property rights.
Our international operations and sales are subject to numerous risks and uncertainties, including: • economic developments including changes in currency exchange rates, inflation risks, exchange controls, tariffs, economic sanctions, other trade protection measures and import or export licensing requirements; • difficulties and costs associated with complying with laws, treaties and regulations, including tax, labor and data privacy laws, treaties and regulations, and changes to laws, treaties and regulations; • restrictions on our ability to own or operate subsidiaries, make investments or acquire new businesses; • restrictions on our ab ility to repatriate earnings from our non-U.S. subsidiaries to the U.S. or the imposition of withholding taxes on remittances and other payments by our subsidiaries; • political developments, government deadlock, political instability, political activism, terrorist activities, civil unrest and international conflicts (including impacts from the current war in Ukraine ); an d • uncertain and va rying enforcement of laws and regulations and weak protection of intellectual property rights.
For example, our two North American salt mines together constituted approximately 71% of our salt production capacity as of September 30, 2022, and supply most of the salt sold by our North American highway deicing business and significant portions of the salt sold by our consumer and industrial business.
For example, our two North American salt mines together constituted approximately 70% of our salt production capacity as of September 30, 2023, and supply most of the salt sold by our North American highway deicing business and significant portions of the salt sold by our consumer and industrial business.
Our agreements governing our indebtedness contain covenants that limit our ability to: • incur additional indebtedness or contingent obligations or grant liens; • pay dividends or make distributions to our stockholders; • repurchase or redeem our stock; • make investments or dispose of assets; • prepay, or amend the terms of, certain junior indebtedness; • engage in sale and leaseback transactions; • make changes to our organizational documents or fiscal periods; • create or permit certain liens on our assets; • create or permit restrictions on the ability of certain subsidiaries to make certain intercompany dividends, investments or asset transfers; 17 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. • enter into new lines of business; • enter into transactions with our stockholders and affiliates; and • acquire the assets of, or merge or consolidate with, other companies.
Our agreements governing our indebtedness contain covenants that limit our ability to: • incur additional indebtedness or contingent obligations or grant liens; • pay dividends or make distributions to our stockholders; • repurchase or redeem our stock; • make investments or dispose of assets; • prepay, or amend the terms of, certain junior indebtedness; • engage in sale and leaseback transactions; • make changes to our organizational documents or fiscal periods; • create or permit certain liens on our assets; • create or permit restrictions on the ability of certain subsidiaries to make certain intercompany dividends, investments or asset transfers; • enter into new lines of business; • enter into transactions with our stockholders and affiliates; and • acquire the assets of, or merge or consolidate with, other companies.
Our success depends, to a significant extent, on successful implementation of our business strategies, including the development of our lithium brine and LCE resources, the successful commercialization of Fortress North America’s portfolio of next generation fire retardants, our cost savings initiatives, our enterprise optimization initiatives and any other strategies described in the “Business” section of this report.
Our success depends, to a significant extent, on successful implementation of our business strategies, including the development of our lithium salt or lithium chloride brine and LCE resources, the successful commercialization of Fortress North America’s portfolio of next generation fire retardants, our cost savings initiatives, our continuous improvement initiatives and any other strategies described in the “Business” section of this report.
Of our 12 collective bargaining agreements in effect on September 30, 2022, six will expire in fiscal 2023, one will expire in fiscal 2024, three will expire in fiscal 2025 (including for our Cote Blanche mine), and one will expire in each of fiscal 2026 (for our Goderich mine) and 2027.
Of our 12 collective bargaining agreements in effect on September 30, 2023, one will expire in fiscal 2024, six will expire in fiscal 2025 (including our Cote Blanche mine), four will expire in fiscal 2026 (including our Goderich mine), and one will expire in fiscal 2027.
The credit agreement governing our senior secured credit facilities also requires us to maintain financial ratios, including an interest coverage ratio and a total leverage ratio, which we may be unable to maintain. As of September 30, 2022, our total leverage ratio (as calculated under the terms of our credit agreement) was 4.59x.
The credit agreement governing our senior secured credit facilities also requires us to maintain financial ratios, including an interest coverage ratio and a total leverage ratio, which we may be unable to maintain. As of September 30, 2023, our total net leverage ratio (as calculated under the terms of our credit agreement) was 3.70x.
If we default under our agreements governing our indebtedness, our lenders could cease to make further extensions of credit, accelerate payments under our other debt instruments (including hedging instruments) that contain cross-acceleration or cross-default provisions and foreclose upon any collateral securing that debt as well as restrict our ability to make certain investments and payments, pay dividends, repurchase our stock, enter into transactions with affiliates, make acquisitions, merge and consolidate, or transfer or dispose of assets.
If we default under our agreements governing our indebtedness, our lenders could cease to make further extensions of credit, accelerate payments under our other debt instruments (including hedging instruments) that contain cross-acceleration or cross-default provisions and foreclose upon any collateral securing that debt as well as restrict our ability to make certain investments and payments, pay dividends, repurchase our stock, enter into transactions with affiliates, make acquisitions, merge and consolidate, or transfer or dispose of assets. 18 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC.
A significant increase in the price of energy that is not recovered through an increase in the price of our products or covered through our hedging arrangements, or an extended interruption in 16 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. the supply of natural gas or electricity to our production facilities, could have a material adverse effect on our business, financial condition and results of operations.
A significant increase in the price of energy that is not recovered through an increase in the price of our products or covered through our hedging arrangements, or an extended interruption in the supply of natural gas or electricity to our production facilities, could have a material adverse effect on our business, financial condition and results of operations.
Certain agreements governing our indebtedness contain limitations on our ability to pay dividends (including regular annual dividends), as described under “—The agreements governing our indebtedness impose restrictions that may limit our ability to operate our business or require 18 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. accelerated debt payments.” We cannot provide assurances that the agreements governing our current and future indebtedness will permit us to pay dividends on our common stock.
Certain agreements governing our indebtedness contain limitations on our ability to pay dividends (including regular annual dividends), as described under “— The agreements governing our indebtedness impose restrictions that may limit our ability to operate our business or require accelerated debt payments .” We cannot provide assurances that the agreements governing our current and future indebtedness will permit us to pay dividends on our common stock.
An inability to attract, develop and retain personnel with the necessary skills and experience could result in decreased productivity and efficiency, 24 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. higher costs, the use of less-qualified personnel and reputational harm, which may have a material adverse effect on our performance.
An inability to attract, develop and retain personnel with the necessary skills and experience could result in decreased productivity and efficiency, higher costs, the use of less-qualified personnel and reputational harm, which may have a material adverse effect on our performance.
If seasonal demand is greater than we expect, we may experience increased costs and product shortages, and our customers may turn to our competitors for products that they would otherwise have purchased from us.
Demand for fire retardant products is also seasonal, being highest in summer months. If seasonal demand is greater than we expect, or we experience increased costs and product shortages, and our customers may turn to our competitors for products that they would otherwise have purchased from us.
Failure to have our salt products at a specific distribution facility when needed (for example during a snow event) 14 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. could adversely impact our ability to fulfill our highway deicing sales contracts, resulting in significant contractual penalties and loss of customers.
Failure to have our salt products at a specific distribution facility when needed (for example during a snow event) could adversely impact our ability to fulfill our highway deicing sales contracts, resulting in significant contractual penalties and loss of customers.
These changes could negatively impact customer demand for our products as well as our costs and ability to produce and distribute our products. For example, prolonged period of mild winter weather could reduce the market for deicing products. Drought conditions could similarly impact demand for our plant nutrition products.
These changes could negatively impact customer demand for our products as well as our costs and ability to produce and distribute our 26 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. products. For example, prolonged period of mild winter weather could reduce the market for deicing products. Drought conditions could similarly impact demand for our plant nutrition products.
A decision by a governmental agency to deny, delay issuing or apply conditions to any new permits, licenses and approvals could adversely affect our ability to operate and the results of our operations, as well as our ability to develop our identified lithium brine and LCE resources.
A decision by a governmental agency to deny, delay issuing or apply conditions to any new permits, licenses and approvals could adversely affect our ability to operate and the results of our operations, as well as our ability to develop our identified lithium salt brine and LCE resources. 22 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC.
There is no certainty that all or any part of the lithium mineral resource identified by the company’s initial assessment will be converted into an economically extractable mineral reserve.
If we were to recommence investment in our lithium project, there is no certainty that all or any part of the lithium mineral resource identified by the company’s initial assessment will be converted into an economically extractable mineral reserve.
For example, when the Mississippi river floods significantly (as it did during fiscal 2019) or if water levels are significantly reduced by severe drought conditions, barges may be unable to traverse the river system and we may be prevented from timely delivering our salt products to our customers, which could increase costs to deliver our 19 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. products and adversely impact our ability to fulfill our contracts, resulting in significant contractual penalties and loss of customers.
For example, when the Mississippi river floods significantly or if water levels are significantly reduced by severe drought conditions (as they were in 2023), barges may be unable to traverse the river system and we may be prevented from timely delivering our salt products to our depots and customers, which could increase costs to deliver our products and adversely impact our ability to fulfill our contracts, resulting in significant contractual penalties and loss of customers.
As of September 30, 2022, we had $955.9 million of outstanding indebtedness, including $168.4 million of borrowings under our senior secured credit facilities, which are further described in Part II, Item 8, Note 12 of our Consolidated Financial Statements.
As of September 30, 2023, we had $811.2 million of outstanding indebtedness, including $280.3 million of borrowings under our senior secured credit facilities, which are further described in Part II, Item 8, Note 13 of our Consolidated Financial Statements.
Our facilities are also subject to laws and regulations which require us to 22 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. monitor and detect potential environmental hazards and damages. Our procedures and controls may not be sufficient to timely identify and protect against potential environmental damages and related costs.
Our facilities are also subject to laws and regulations which require us to monitor and detect potential environmental hazards and damages. Our procedures and controls may not be sufficient to timely identify and protect against potential environmental damages and related costs.
In addition, legislative and regulatory measures to address climate change and greenhouse gas emissions (including carbon or emissions taxes) have been enacted and are also in various phases of consideration at both the state and federal level, as well as internationally.
Additionally, adverse weather conditions or significant changes in weather patterns could adversely affect us. ” for more information. In addition, legislative and regulatory measures to address climate change and greenhouse gas emissions (including carbon or emissions taxes) have been enacted and are also in various phases of consideration at both the state and federal level, as well as internationally.
In addition, failure to comply with applicable laws, regulations or treaties or to comply with any of contracts we have with governmental entities could preclude us from conducting business with governmental entities and lead to penalties, injunctions, civil remedies or fines. We may face significant product liability claims and product recalls, which could harm our business and reputation.
Failure to comply with applicable laws, regulations or treaties or to comply with any of contracts we have with governmental entities could preclude us from conducting business with governmental entities and lead to penalties, injunctions, civil remedies or fines.
In addition, although we do not engage in fracking, laws and regulations targeting fracking could lead to increased permit requirements and compliance costs for non-fracking operations, including our salt operations, which require permitted wastewater disposal wells. Furthermore, many of our facilities are located on land leased from governmental authorities or third parties.
In addition, although we do not engage in fracking, laws and regulations targeting fracking could lead to increased permit requirements and compliance costs for non-fracking operations, including our salt operations, which require permitted wastewater disposal wells.
Any prolonged change in weather patterns in our markets, as a result of climate change or otherwise, could have a material impact on the results of our operations.
Any prolonged change in weather patterns in our markets, as a result of climate change or otherwise, could have a material impact on the results of our operations. 15 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC.
We face global competition from new and existing competitors who have entered or may enter the markets in which we sell, particularly in our plant nutrition business.
We face global competition from new and existing competitors who have entered or may enter the markets in which we sell, particularly 20 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. in our plant nutrition business.
We could be held liable for costs related to our customers’ 23 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. product recall if our products cause the recall or other product liability claims if our products cause harm to our customers or their property.
We could be held liable for costs related to our customers’ product recall if our products cause the recall or other product liability claims if our products cause harm to our customers or their property.
We would be in default under our credit agreement if our leverage ratio exceeded 5.5x as of the last day of any quarter through fiscal 2022, gradually stepping down to 4.5x for the fiscal quarter ended June 30, 2024.
We would be in default under our credit agreement if our net leverage ratio exceeds 5.0x as of December 31, 2023, gradually stepping down to 4.5x for the fiscal quarter ended June 30, 2024 and thereafter.
We pay significant interest on our indebtedness, with variable interest on our borrowing under our senior secured credit facilities based on prevailing interest rates. Significant increases in interest rates will increase the interest we pay on our debt.
We pay significant interest on our indebtedness, with variable interest on our borrowing under our senior secured credit facilities based on 17 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. prevailing interest rates. Significant increases in interest rates will increase the interest we pay on our debt.
Competition, Sales and Pricing Risks Our products face strong competition and if we fail to successfully attract and retain customers and invest in capital improvements, productivity, quality improvements and product development, sales of our products could be adversely affected.
Our products face strong competition and if we fail to successfully attract and retain customers and invest in capital improvements, productivity, quality improvements and product development, sales of our products could be adversely affected. We encounter strong competition in many areas of our business and our competitors may have significantly more financial resources than we do.
In addition, we intend to make significant capital expenditures in the future to advance the development of our identified lithium resource at our Ogden facility and the Great Salt Lake.
In addition, we may make significant capital expenditures in the future to advance the development of our identified lithium salt resource at our Ogden facility and the Great Salt Lake, if we achieve an acceptable and predictable regulatory framework in Utah governing the production of lithium on the Great Salt Lake.
Additionally, a significant product liability case, product recall or failure to meet product specifications could result in adverse publicity, harm to our brand and reputation and significant costs, which could have a material adverse effect on our business and financial performance. Our intellectual property may be misappropriated or subject to claims of infringement.
Additionally, a significant product liability case, product recall or failure to meet product specifications could 24 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. result in adverse publicity, harm to our brand and reputation and significant costs, which could have a material adverse effect on our business and financial performance.
Similarly, customers tend to delay their purchases when they anticipate future selling prices for potash products will stabilize or decrease. These customer expectations can lead to a lag in our ability to realize price increases for our SOP products and adversely impact our sales volumes and selling prices.
These customer expectations can lead to a lag in our ability to realize price increases for our SOP products and adversely impact our sales volumes and selling prices.
Compliance with import and export requirements, the FCPA and other applicable anti-corruption laws may increase the cost of doing business.
See Item 1, “Business—Environmental, Health and Safety and Other Regulatory Matters” for more information. Compliance with import and export requirements, the FCPA and other applicable anti-corruption laws may increase the cost of doing business.
For example, the development of substitutes for our plant nutrition products that can more efficiently mix with other agricultural inputs or have more efficient application methods may impact the demand for our products. Many of our products, including sodium chloride, magnesium chloride and SOP, have historically been characterized by a slow pace of technological advances.
The demand for our products may be adversely affected by technological advances or the development of new or less costly competing products. For example, the development of substitutes for our plant nutrition products that can more efficiently mix with other agricultural inputs or have more efficient application methods may impact the demand for our products.
Many of our customers attempt to reduce the number of vendors from which they purchase in order to increase their efficiency. To remain competitive, we need to invest in manufacturing, productivity, product innovation, marketing, customer service and support and our distribution networks. We may not have sufficient resources to continue to make such investments or maintain our competitive position.
To remain competitive, we need to invest in manufacturing, productivity, product innovation, marketing, customer service and support and our distribution networks. We may not have sufficient resources to continue to make such investments or maintain our competitive position. We may have to adjust our prices, strategy, product innovation, distribution or marketing efforts to stay competitive.
Our business is dependent upon personnel, including highly skilled personnel. A labor shortage or the loss of key personnel may have a material adverse effect on our performance. Our business is dependent on our ability to attract, develop and retain personnel.
A labor shortage or the loss of key personnel may have a material adverse effect on our performance. Our business is dependent on our ability to attract, develop and retain personnel. We may encounter difficulty recruiting sufficient numbers of personnel at acceptable wage and benefit levels due to the competitive labor market.
Intellectual property rights, including patents, trademarks, and trade secrets, are a valuable aspect of our business. We attempt to protect our intellectual property rights primarily through a combination of patent, trademark, and trade secret protection. The patent rights that we obtain may not provide meaningful protection to prevent others from selling competitive products or using similar production processes.
Our intellectual property may be misappropriated or subject to claims of infringement. Intellectual property rights, including patents, trademarks, and trade secrets, are a valuable aspect of our business. We attempt to protect our intellectual property rights primarily through a combination of patent, trademark, and trade secret protection.
Similarly, the use and application of our animal feed and plant nutrition products could result in a product recall if it were alleged that they were contaminated. A product recall could result in significant losses due to the costs of a recall, the destruction of product inventory and production delays to identify the underlying cause of the recall.
A product recall could result in significant losses due to the costs of a recall, the destruction of product inventory and production delays to identify the underlying cause of the recall.
In addition, we may require additional permits, licenses and approvals in connection with the potential development of our identified lithium resource at our Ogden facility and the Great Salt Lake. We may not be granted the necessary permits, licenses and approvals.
For example, if we decide to continue further investment in our lithium project at some point in the future, we may require additional permits, licenses and approvals in connection with the potential development and subsequent commercial sale of our identified lithium salt resource at our Ogden facility and the Great Salt Lake.
However, the extent and costs of any environmental investigation or remediation activities are inherently uncertain and difficult to estimate and could exceed our expectations, which could materially affect our financial condition and operating results. Additionally, we previously sold a portion of our U.K. salt mine to a third party, which operates a waste management business.
However, the extent and costs of any environmental investigation or remediation activities are inherently uncertain and difficult to estimate and could exceed our expectations, which could materially affect our financial condition and operating results. 23 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC.
We have significant operations in Canada and the U.K. Our fiscal 2022 sales outside the U.S. were 28% of our total fiscal 2022 sales. Our overall success as a global business depends on our ability to operate successfully in differing economic, political and cultural conditions.
Our overall success as a global business depends on our ability to operate successfully in differing economic, political and cultural conditions.
We incur costs to maintain these financial assurance bonds and failure to satisfy these financial assurance requirements could materially affect our business, the results of our operations and our financial condition.
We incur costs to maintain these financial assurance bonds and failure to satisfy these financial assurance requirements could materially affect our business, the results of our operations and our financial condition. 19 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. Competition, Sales and Pricing Risks The demand for our products is seasonal.
Expansion of our existing operations or production capacity, or preservation of existing rights in some cases, is also predicated upon securing any necessary permits, licenses and approvals.
For example, certain neighboring operations or land uses may require setbacks that could prevent us from mining portions of our mineral reserves or resources or using certain mining methods. Expansion of our existing operations or production capacity, or preservation of existing rights in some cases, is also predicated upon securing any necessary permits, licenses and approvals.
Strikes, other forms of work stoppage or slowdown and other union activities could disrupt our business and negatively impact our financial results. Nearly 50% of our workforce in the U.S., Canada and the U.K. is represented by collective bargaining agreements.
Nearly 50% of our workforce in the U.S., Canada and the U.K. is represented by collective bargaining agreements.
The third party’s business, under governmental permits, is allowed to securely dispose certain hazardous waste at the property they own and they pay us fees for engaging in this activity. See “Business—Environmental, Health and Safety and Other Regulatory Matters” for more information.
Additionally, we previously sold a portion of our U.K. salt mine to a third party, which operates a waste management business. The third party’s business, under governmental permits, is allowed to securely dispose certain hazardous waste at the property they own and they pay us fees for engaging in this activity.
We cannot assure that we will be able to successfully implement our strategies or, if successfully implemented, we may not realize the expected benefits of our strategies. Although we have completed an initial assessment to define the lithium resource at our existing operations, mineral resources are not mineral reserves and do not have demonstrated economic viability.
We cannot assure that we will be able to successfully implement our strategies or, if successfully implemented, we may not realize the expected benefits of our strategies.
Pending patent applications may not result in an issued patent. If we do receive an issued patent, we cannot guarantee that our patent rights will not be challenged, invalidated, circumvented, or rendered unenforceable. We also rely on trade secret protection to guard confidential unpatented technology, manufacturing expertise, and technological innovation.
The patent rights that we obtain may not provide meaningful protection to prevent others from selling competitive products or using similar production processes. Pending patent applications may not result in an issued patent. If we do receive an issued patent, we cannot guarantee that our patent rights will not be challenged, invalidated, circumvented, or rendered unenforceable.
New investments may not generate sufficient revenue, may incur unanticipated liabilities and may divert our limited resources and distract management from our current operations. We cannot be certain that our ongoing investments in new products and technologies will be successful, will meet our expectations and will not adversely affect our reputation, financial condition and operating results.
New investments may not generate sufficient revenue, may incur unanticipated liabilities and may divert our limited resources and distract management from our current operations.
Our inventories may also become impaired through obsolescence or the quality may be impaired if our inventories are not stored properly. Low seasonal demand could also lead to increased unit costs. Risks associated with our international operations and sales and changes in economic and political environments could adversely affect our business and earnings.
Our inventories may also become impaired through obsolescence or the quality may be impaired if our inventories are not stored properly. Low seasonal demand could also lead to increased unit costs. Anticipated changes in potash prices and customer application rates can have a significant effect on the demand and price for our plant nutrition products.
We encounter strong competition in many areas of our business and our competitors may have significantly more financial resources than we do. Competition in our product lines is based on a number of factors, including product quality and performance, logistics (especially in Salt distribution), brand reputation, price and quality of customer service and support.
Competition in our product lines is based on a number of factors, including product quality and performance, logistics (especially in Salt distribution), brand reputation, price and quality of customer service and support. Many of our customers attempt to reduce the number of vendors from which they purchase in order to increase their efficiency.
However, new production methods or sources for our products or the development of substitute or competing products could materially and adversely affect the demand and sales of our products. Changes in competitors’ production, geographic or marketing focus could have a material impact on our business.
Many of our products, including sodium chloride, magnesium chloride and SOP, have historically been characterized by a slow pace of technological advances. However, new production methods or sources for our products or the development of substitute or competing products could materially and adversely affect the demand and sales of our products.
Additionally, our reserve and resource estimates may be adversely affected in the future by interpretations of, or changes to, the SEC’s property disclosure requirements for mining companies. Our business is capital intensive, and the inability to fund necessary capital expenditures or successfully complete our capital projects could have an adverse effect on our growth and profitability.
Additionally, our reserve and resource estimates may be adversely affected in the future by interpretations of, or changes to, the SEC’s property disclosure requirements for mining companies. Strikes, other forms of work stoppage or slowdown and other union activities could disrupt our business and negatively impact our financial results.
For more information, see Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Effects of Currency Fluctuations and Inflation,” and Item 7A, “Quantitative and Qualitative Disclosures About Market Risk.” In addition, we may face more competition in periods when foreign currency exchange rates are favorable to our competitors.
For more information, see Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Effects of Currency Fluctuations and Inflation,” and Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk.” 21 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC.
A relatively strong U.S. dollar increases the attractiveness of the U.S. market for some of our international competitors while decreasing the attractiveness of other markets to us. 20 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC.
In addition, we may face more competition in periods when foreign currency exchange rates are favorable to our competitors. A relatively strong U.S. dollar increases the attractiveness of the U.S. market for some of our international competitors while decreasing the attractiveness of other markets to us.
Anticipated changes in potash prices and customer application rates can have a significant effect on the demand and price for our plant nutrition products. When customers anticipate increasing potash selling prices, they tend to accumulate inventories in advance of the expected price increase.
When customers anticipate increasing potash selling prices, they tend to accumulate inventories in advance of the expected price increase. Similarly, customers tend to delay their purchases when they anticipate future selling prices for potash products will stabilize or decrease.
Removed
We may have to adjust our prices, strategy, product innovation, distribution or marketing efforts to stay competitive. The demand for our products may be adversely affected by technological advances or the development of new or less costly competing products.
Added
Operations at our Ogden, Utah, facility are dependent on ambient brine from the Great Salt Lake, and changes in lake brine levels or any limitations on our continued ability to access ambient lake brine in the Great Salt Lake could adversely affect us.
Removed
For example, certain neighboring operations or land uses may require setbacks that could prevent us from mining portions of our mineral reserves or resources or using certain mining methods. 21 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC.
Added
Our Ogden facility produces three mineral salts - specifically, SOP, sodium chloride and magnesium chloride products - from the high mineral concentrations within the ambient lake brine in the Great Salt Lake. In addition, we have been pursuing the development of our identified lithium salt resource at our Ogden facility at the Great Salt Lake.
Removed
For example, we may require additional permits, licenses and approvals to continue diverting water from the Great Salt Lake based on lake conditions or to further expand our production capacity at our Ogden facility.
Added
Our ability to produce SOP, sodium chloride and magnesium chloride, as well as any future production of lithium salt, at our Ogden facility, is dependent upon, among other matters, sufficient lake elevations in the Great Salt Lake and our continued ability to maintain, renew or acquire the permits, licenses and approvals required to access ambient lake brine in the Great Salt Lake.
Removed
We may encounter difficulty recruiting sufficient numbers of personnel at acceptable wage and benefit levels due to the competitive labor market.
Added
In recent years, sustained drought (as a result of climate change or otherwise) has contributed to lower lake levels and increased mineral concentrations in the Great Salt Lake. If this continues, lower lake levels could impact mineral composition and our mineral harvesting process, amount and timing.
Removed
Additionally, adverse weather conditions or significant changes in weather patterns could adversely affect us.” for more information. 25 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC.
Added
Lake level fluctuations and other factors, including state or federal actions to manage the salinity of the Great Salt Lake, could alter north arm lake levels and may disrupt our evaporation production cycle, impact our access to ambient lake brine in the Great Salt Lake or increase our related capital expenditures and production costs.
Added
We have indefinitely suspended our lithium development project until we have further clarity on the evolving regulatory climate in the State of Utah.
Added
If the final rule relating to Great Salt Lake Elements and Minerals creates significant obstacles toward the responsible development of lithium salts from the Great Salt Lake, we may not continue further investment in our lithium development project, which could impact our ability to further develop our lithium project and adversely impact the value of our securities.
Added
The proposed rulemaking for mineral extraction on the Great Salt Lake implementing Utah House Bill 513 (now codified as amended Utah Code §65A-6-4), may adversely impact mineral extraction on the Great Salt Lake, including our planned lithium development, as well as existing SOP, sodium chloride and magnesium chloride production.

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Item 2. Properties

Properties — owned and leased real estate

116 edited+16 added−21 removed240 unchanged
Biggest changeA copy of the QP’s amended TRS with respect to the potassium and SOP, magnesium and magnesium chloride and sodium and sodium chloride mineral resource and reserve estimates at the Ogden facility, dated November 29, 2021 and amended December 14, 2022, with an effective date of September 30, 2021 (the “Ogden Potassium/Magnesium/Sodium TRS”), is filed as Exhibit 96. 2 hereto. 40 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC.
Biggest changeThe material assumptions and information pertaining to the Company’s disclosure of mineral resources and mineral reserves at the Ogden facility are based on the Technical Report Summary with respect to Potassium and SOP, Magnesium and Magnesium Chloride and Salt for the Ogden facility, dated November 29, 2021, as amended on December 14, 2022, with an effective date of September 30, 2021 (the “Ogden Potassium/Magnesium/Sodium TRS”).
(3) There are multiple saleable products based on salt quality from the underground mining operations (rock salt for road deicing and chemical grade salt).
(3) There are multiple saleable products based on salt quality from the underground mining operations (rock salt for road deicing and chemical grade salt).
Sales prices are projected to increase to approximately $295.60 per ton to $706.49 per ton for rock salt for road deicing through the current expected end of mine life.
Sales prices are projected to increase to approximately $295.60 per ton to $706.49 per ton for rock salt for road deicing through the current expected end of mine life.
The QP assumes that when the north arm of the Great Salt Lake (where the Ogden facility sources its brine) reaches this concentration level, the Ogden facility will halt production of potassium and SOP.
The QP assumes that when the north arm of the Great Salt Lake (where the Ogden facility sources its brine) reaches this concentration level, the Ogden facility will halt production of potassium and SOP.
The QP assumes that when the north arm of the Great Salt Lake (where the Ogden facility sources its brine) reaches this concentration level, the Ogden facility will halt production of magnesium and magnesium chloride.
The QP assumes that when the north arm of the Great Salt Lake (where the Ogden facility sources its brine) reaches this concentration level, the Ogden facility will halt production of magnesium and magnesium chloride.
The QP assumes that when the north arm of the Great Salt Lake (where the Ogden facility sources its brine) reaches this concentration level, the Ogden facility will halt production of sodium and sodium chloride.
The QP assumes that when the north arm of the Great Salt Lake (where the Ogden facility sources its brine) reaches this concentration level, the Ogden facility will halt production of sodium and sodium chloride.
However, the QPs believe it is likely that the SOP operation will continue depleting lithium from the ambient waters of the Great Salt Lake after concentrations of lithium are below an estimated cut-off grade and that the Company will continue concentrating lithium in its evaporation pond process until lithium concentrations in the Great Salt Lake reach null.
However, the QPs believe it is likely that the SOP operation will continue depleting lithium from the ambient waters of the Great Salt Lake after concentrations of lithium are below an estimated cut-off grade and that the Company will continue concentrating lithium in its evaporation pond process until lithium concentrations in the Great Salt Lake reach null.
(6) A cut-off grade was not utilized for the calculation as the in situ product quality is relatively constant and saleable after processing. (7) There are multiple saleable products based on salt quality from the operation (rock salt for road deicing and chemical grade salt).
(6) A cut-off grade was not utilized for the calculation as the in situ product quality is relatively constant and saleable after processing. (7) There are multiple saleable products based on salt quality from the operation (rock salt for road deicing and chemical grade salt).
Sales prices are projected to increase to approximately $706.49 per ton for rock salt for road deicing through year 2138 (the current expected end of mine life).
Sales prices are projected to increase to approximately $706.49 per ton for rock salt for road deicing through year 2138 (the current expected end of mine life).
(7) A cut-off grade was not utilized for the calculation as the in situ product quality is relatively constant and saleable after processing. (8) There are multiple saleable products based on salt quality from the operation (rock salt for road deicing and chemical grade salt).
(7) A cut-off grade was not utilized for the calculation as the in situ product quality is relatively constant and saleable after processing. (8) There are multiple saleable products based on salt quality from the operation (rock salt for road deicing and chemical grade salt).
Ogden Facility – Summary of Lithium and LCE Mineral Resources at September 30, 2022 and 2021 September 30, 2022 September 30, 2021 Resource Area Average Grade (mg/L) (4) Lithium Resources (tonnes) (1)(2)(3) LCE Resources (tonnes) (1)(2)(3)(6) Average Grade (mg/L) (4) Lithium Resources (tonnes) (1)(2)(3) LCE Resources (tonnes) (1)(2)(3)(6) Measured Resources Total Measured Resources — — — — — — Indicated Resources Great Salt Lake North Arm 51 226,860 1,207,577 51 226,860 1,207,577 Great Salt Lake South Arm (5) 25 208,711 1,110,970 25 208,711 1,110,970 Pond 96, Halite Aquifer 214 908 4,835 214 908 4,835 Pond 98, Halite Aquifer 221 868 4,623 221 868 4,623 Pond 113, Halite Aquifer 205 13,754 73,213 205 13,754 73,213 Total Indicated Resources 44 451,101 2,401,218 44 451,101 2,401,218 Measured + Indicated Resources Great Salt Lake North Arm 51 226,860 1,207,577 51 226,860 1,207,577 Great Salt Lake South Arm (5) 25 208,711 1,110,970 25 208,711 1,110,970 Pond 96, Halite Aquifer 214 908 4,835 214 908 4,835 Pond 98, Halite Aquifer 221 868 4,623 221 868 4,623 Pond 113, Halite Aquifer 205 13,754 73,213 205 13,754 73,213 Total Measured + Indicated Resources 44 451,101 2,401,218 44 451,101 2,401,218 Inferred Resources Pond 1b, Halite Aquifer 318 2,032 10,815 318 2,032 10,815 Pond 97, Halite Aquifer 212 674 3,589 212 674 3,589 Pond 114, Halite Aquifer 245 5,789 30,817 245 5,789 30,817 Total Inferred Resources 256 8,495 45,221 256 8,495 45,221 (1) Mineral resources are not mineral reserves and do not have demonstrated economic viability.
Ogden Facility – Summary of Lithium and LCE Mineral Resources at September 30, 2023 and 2022 September 30, 2023 September 30, 2022 Resource Area Average Grade (mg/L) (4) Lithium Resources (tonnes) (1)(2)(3) LCE Resources (tonnes) (1)(2)(3)(6) Average Grade (mg/L) (4) Lithium Resources (tonnes) (1)(2)(3) LCE Resources (tonnes) (1)(2)(3)(6) Measured Resources Total Measured Resources — — — — — — Indicated Resources Great Salt Lake North Arm 51 226,860 1,207,577 51 226,860 1,207,577 Great Salt Lake South Arm (5) 25 208,711 1,110,970 25 208,711 1,110,970 Pond 96, Halite Aquifer 214 908 4,835 214 908 4,835 Pond 98, Halite Aquifer 221 868 4,623 221 868 4,623 Pond 113, Halite Aquifer 205 13,754 73,213 205 13,754 73,213 Total Indicated Resources 44 451,101 2,401,218 44 451,101 2,401,218 Measured + Indicated Resources Great Salt Lake North Arm 51 226,860 1,207,577 51 226,860 1,207,577 Great Salt Lake South Arm (5) 25 208,711 1,110,970 25 208,711 1,110,970 Pond 96, Halite Aquifer 214 908 4,835 214 908 4,835 Pond 98, Halite Aquifer 221 868 4,623 221 868 4,623 Pond 113, Halite Aquifer 205 13,754 73,213 205 13,754 73,213 Total Measured + Indicated Resources 44 451,101 2,401,218 44 451,101 2,401,218 Inferred Resources Pond 1b, Halite Aquifer 318 2,032 10,815 318 2,032 10,815 Pond 97, Halite Aquifer 212 674 3,589 212 674 3,589 Pond 114, Halite Aquifer 245 5,789 30,817 245 5,789 30,817 Total Inferred Resources 256 8,495 45,221 256 8,495 45,221 (1) Mineral resources are not mineral reserves and do not have demonstrated economic viability.
(2) Fiscal year 2022 production tons are less than our reserve reduction due to process timing of extracting tons to producing finished product. See Ogden Facility below for additional information regarding our sodium, sodium chloride, magnesium and magnesium chloride reserve estimates at the Ogden facility. Our production facilities have access to vast mineral deposits.
(2) Fiscal year 2023 and 2022 production tons are less than our reserve reduction due to process timing of extracting tons to producing finished product. See Ogden Facility below for additional information regarding our sodium, sodium chloride, magnesium and magnesium chloride reserve estimates at the Ogden facility. Our production facilities have access to vast mineral deposits.
As of September 30, 2022, we had ten mining properties, as summarized in the table below: Location Segment Use Stage United States Cote Blanche Island, Louisiana Salt Rock salt mine Production Lyons, Kansas Salt Evaporated salt facility Production Ogden, Utah Salt, Plant Nutrition SOP, solar salt and magnesium chloride facility Production Canada Amherst, Nova Scotia Salt Evaporated salt facility Production Goderich, Ontario Salt Rock salt mine Production Goderich, Ontario Salt Evaporated salt facility Production Unity, Saskatchewan Salt Evaporated salt facility Production Wynyard, Saskatchewan Plant Nutrition SOP facility Exploration United Kingdom Winsford, Cheshire Salt Rock salt mine Production Chile Atacama Desert Salt N/A Exploration We are the sole operator of each of our mining properties and we own all of the ownership interests in our mining operations.
As of September 30, 2023, we had ten mining properties, as summarized in the table below: Location Segment Use Stage United States Cote Blanche Island, Louisiana Salt Rock salt mine Production Lyons, Kansas Salt Evaporated salt facility Production Ogden, Utah Salt, Plant Nutrition SOP, solar salt and magnesium chloride facility Production Canada Amherst, Nova Scotia Salt Evaporated salt facility Production Goderich, Ontario Salt Rock salt mine Production Goderich, Ontario Salt Evaporated salt facility Production Unity, Saskatchewan Salt Evaporated salt facility Production Wynyard, Saskatchewan Plant Nutrition SOP facility Exploration United Kingdom Winsford, Cheshire Salt Rock salt mine Production Chile Atacama Desert Salt N/A Exploration We are the sole operator of each of our mining properties and we own all of the ownership interests in our mining operations.
Under the Royalty Agreement, the current royalty rates for SOP is 4.8% of gross revenues, the current royalty rate for magnesium chloride is 5% of gross revenues, and the current royalty rate for sodium chloride is $0.50/ton times the Producer Price Index.
Under the Royalty Agreement, the current royalty rate for SOP is 4.8% of gross revenues, the current royalty rate for magnesium chloride is 5% of gross revenues, and the current royalty rate for sodium chloride is $0.50/ton times the Producer Price Index.
(Cote Blanche, Louisiana) and the U.K. (Winsford, Cheshire) make up 85% of our salt production capacity as of September 30, 2022. Each of these mines is operated with modern mining equipment and utilizes subsurface improvements, such as vertical shaft lift systems, milling and crushing facilities, maintenance and repair shops and extensive raw materials handling systems.
(Cote Blanche, Louisiana) and the U.K. (Winsford, Cheshire) make up 85% of our salt production capacity as of September 30, 2023. Each of these mines is operated with modern mining equipment and utilizes subsurface improvements, such as vertical shaft lift systems, milling and crushing facilities, maintenance and repair shops and extensive raw materials handling systems.
The following table shows the estimated annual production capacity and type of salt or other mineral produced at each of our owned or leased processing locations as of September 30, 2022: Location Annual Production Capacity (1) (tons) Product Type North America Goderich, Ontario, Mine 8.0 million Rock Salt Cote Blanche, Louisiana, Mine 2.9 million Rock Salt Ogden, Utah, Plant: Salt (2) 1.5 million Solar Salt Magnesium Chloride (3) 750,000 Magnesium Chloride SOP (4) 320,000 SOP Lyons, Kansas, Plant 450,000 Mechanically-Evaporated Salt Unity, Saskatchewan, Plant 140,000 Mechanically-Evaporated Salt Goderich, Ontario, Plant 140,000 Mechanically-Evaporated Salt Amherst, Nova Scotia, Plant 130,000 Mechanically-Evaporated Salt Wynyard, Saskatchewan, Plant 40,000 SOP United Kingdom Winsford, Cheshire, Mine 2.2 million Rock Salt (1) Annual production capacity is our estimate of the tons that could be produced based on design capacity, assuming optimization of our operations, including our facilities, equipment and workforce.
The following table shows the estimated annual production capacity and type of salt or other mineral produced at each of our owned or leased processing locations as of September 30, 2023: Location Annual Production Capacity (1) (tons) Product Type North America Goderich, Ontario, Mine 8.0 million Rock Salt Cote Blanche, Louisiana, Mine 2.9 million Rock Salt Ogden, Utah, Plant: Salt (2) 1.5 million Solar Salt Magnesium Chloride (3) 750,000 Magnesium Chloride SOP (4) 320,000 SOP Lyons, Kansas, Plant 450,000 Mechanically-Evaporated Salt Unity, Saskatchewan, Plant 140,000 Mechanically-Evaporated Salt Goderich, Ontario, Plant 140,000 Mechanically-Evaporated Salt Amherst, Nova Scotia, Plant 135,000 Mechanically-Evaporated Salt Wynyard, Saskatchewan, Plant 40,000 SOP United Kingdom Winsford, Cheshire, Mine 2.2 million Rock Salt (1) Annual production capacity is our estimate of the tons that could be produced based on design capacity, assuming optimization of our operations, including our facilities, equipment and workforce.
Recent analysis and evaluations conducted by the Company have also demonstrated that this magnesium chloride solution contains material quantities of lithium, which, when combined with the naturally occurring lithium content of the Great Salt Lake, forms the basis for the estimates of the lithium mineral resources at the Ogden facility summarized below.
Recent analysis and evaluations conducted by the Company have also demonstrated that this magnesium chloride solution contains material quantities of lithium (as a lithium chloride salt), which, when combined with the naturally occurring lithium content of the Great Salt Lake, forms the basis for the estimates of the lithium mineral resources at the Ogden facility summarized below.
Maitland River is permitted pursuant to Certificate of Approval 2342-7ULQEU and Environmental Compliance Approval 1236-8YGK8A, respectively, issued by the Ontario Ministry of Environment, Conservation and Parks. Summaries of the Goderich mine’s salt mineral resources and mineral reserves as of September 30, 2022 and 2021 are shown in Tables 12 and 13, respectively.
Maitland River is permitted pursuant to Certificate of Approval 2342-7ULQEU and Environmental Compliance Approval 1236-8YGK8A, respectively, issued by the Ontario Ministry of Environment, Conservation and Parks. Summaries of the Goderich mine’s salt mineral resources and mineral reserves as of September 30, 2023 and 2022 are shown in Tables 12 and 13, respectively.
The Company is able to extract and produce salts from the lake by rights derived from a combination of: (i) lakebed lease agreements (the “Lakebed Leases”) with the Utah Department of Natural Resources, Division of Forestry, Fire and State Lands (the “Utah FFSL”); (ii) one lease for upland evaporation ponds (the “Upland Pond Lease”) with the State of Utah School and Institutional Trust Lands Administration (the “Utah SITLA”); (iii) seven non-solar leases and easements; (iv) water rights for consumption of brines and 37 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. freshwater (the “Water Rights”) through the Utah Department of Natural Resources, Division of Water Rights; (v) a large mine operation mineral extraction permit (GSL Mine M/057/0002) (the “Mineral Extraction Permit”) through the Utah Department of Natural Resources, Division of Oil, Gas and Mining (the “Utah DOGM”); and (vi) a royalty agreement, dated September 1, 1962 (as amended from time to time, the “Royalty Agreement”), with the Utah State Land Board.
The Company is able to extract and produce salts from the lake by rights derived from a combination of: (i) lakebed lease agreements (the “Lakebed Leases”) with the Utah Department of Natural Resources, Division of Forestry, Fire and State Lands (the “Utah FFSL”); (ii) one lease for upland evaporation ponds (the “Upland Pond Lease”) with the State of Utah School and Institutional Trust Lands Administration (the “Utah SITLA”); (iii) seven non-solar leases and easements; (iv) water rights for consumption of brines and 38 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. freshwater (the “Water Rights”) through the Utah Department of Natural Resources, Division of Water Rights; (v) a large mine operation mineral extraction permit (GSL Mine M/057/0002) (the “Mineral Extraction Permit”) through the Utah Department of Natural Resources, Division of Oil, Gas and Mining (the “Utah DOGM”); and (vi) a royalty agreement for extraction of all mineral salts, dated September 1, 1962 (as amended from time to time, the “Royalty Agreement”), with the Utah State Land Board.
From September 30, 2021 to September 30, 2022, for both lithium and LCE, combined measured and indicated resources remained the same as there was no commercial production of lithium. Key assumptions and parameters relating to the lithium and LCE mineral resources at the Ogden facility are discussed in Section 11 of the Ogden Lithium TRS.
From September 30, 2022 to September 30, 2023, for both lithium and LCE, combined measured and indicated resources remained the same as there was no commercial production of lithium. Key assumptions and parameters relating to the lithium and LCE mineral resources at the Ogden facility are discussed in Section 11 of the Ogden Lithium TRS.
A summary of the Ogden facility’s lithium and LCE mineral resources as of September 30, 2022 and 2021 is shown in Table 9. Joseph Havasi, who is employed full-time as the Vice President, Natural Resources, of the Company served as the QP who prepared the estimates of lithium and LCE mineral resources at the Ogden facility.
A summary of the Ogden facility’s lithium and LCE mineral resources as of September 30, 2023 and 2022 is shown in Table 9. Joseph Havasi, who is employed full-time as the Vice President, Natural Resources, of the Company served as the QP who prepared the estimates of lithium and LCE mineral resources at the Ogden facility.
(7) Reported potassium concentration for the Great Salt Lake assumes an indicative lake level of 4,194.4 feet in the south arm and 4,193.5 feet in the north arm. 42 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. Table 5.
(7) Reported potassium concentration for the Great Salt Lake assumes an indicative lake level of 4,194.4 feet in the south arm and 4,193.5 feet in the north arm. 42 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. Table 4.
Actual annual salt, magnesium chloride and SOP production volume levels may vary from the annual production capacity shown in the table above due to a number of factors, including variations in the winter weather conditions which impact demand for highway and consumer deicing products, the quality of the reserves and the nature of the geologic formation that we are mining at a particular time, unplanned downtime due to safety concerns, incidents and mechanical failures, and other operating conditions. 30 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC.
Actual annual salt, magnesium chloride and SOP production volume levels may vary from the annual production capacity shown in the table above due to a number of factors, including variations in the winter weather conditions which impact demand for highway and consumer deicing products, the quality of the reserves and the nature of the geologic formation that we are mining at a particular time, unplanned downtime due to safety concerns, incidents and mechanical failures, and other operating conditions. 31 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC.
All levels in the current mine plan, 1,300-foot through the 1,900-foot levels, are currently mining or are planned to be operated in the same manner, with the 51 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. same mining parameters and with the same set of unit operations, altered only by the footprint of the mining of the room and pillar method as modified to reflect the constraints of the planned level and the lateral constraints of the salt dome contours of each level.
All levels in the current mine plan, 1,300-foot through the 1,900-foot levels, are currently mining or are planned to be operated in the same manner, with the same mining parameters and with the same set of unit operations, altered only by the footprint of the mining of the room and 52 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. pillar method as modified to reflect the constraints of the planned level and the lateral constraints of the salt dome contours of each level.
Summaries of the Ogden facility’s potassium and SOP mineral resources and mineral reserves as of September 30, 2022 and 2021 are shown in Tables 3 and 4, respectively. Summaries of the Ogden facility’s magnesium and magnesium chloride mineral resources and mineral reserves as of September 30, 2022 and 2021 are shown in Tables 5 and 6, respectively.
Summaries of the Ogden facility’s potassium and SOP mineral resources and mineral reserves as of September 30, 2023 and 2022 are shown in Tables 3 and 4, respectively. Summaries of the Ogden facility’s magnesium and magnesium chloride mineral resources and mineral reserves as of September 30, 2023 and 2022 are shown in Tables 5 and 6, respectively.
The Lakebed Leases and Upland Pond Lease were issued between 1965 and 2022 and cover a total lease area of approximately 177,513 acres among 12 active leases, though not all are currently utilized. Each of the Lakebed Leases remains in effect until the termination of the Royalty Agreement.
The Lakebed Leases and Upland Pond Lease were issued between 1965 and 2022 and cover a total lease area of approximately 177,513 acres among 12 active leases, though not all are currently utilized. Each of the Lakebed Leases, except Mineral Lease 20000107, remains in effect until the termination of the Royalty Agreement.
Mechanically-evaporated salt is primarily sold through our consumer and industrial salt product lines. • Solar Evaporation - For a description of the solar evaporation process, see “—Ogden Facility” below. 29 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. Our current estimated production capacity is approximately 16.2 million tons of salt and 360,000 tons of SOP per year.
Mechanically-evaporated salt is primarily sold through our consumer and industrial salt product lines. • Solar Evaporation - For a description of the solar evaporation process, see “—Ogden Facility” below. 30 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. Our current estimated production capacity is approximately 16.2 million tons of salt and 360,000 tons of SOP per year.
(7) Reported magnesium concentration for the Great Salt Lake assumes an indicative lake level of 4,194.4 feet in the south arm and 4,193.5 feet in the north arm. 44 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. Table 7.
(7) Reported magnesium concentration for the Great Salt Lake assumes an indicative lake level of 4,194.4 feet in the south arm and 4,193.5 feet in the north arm. 44 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. Table 6.
Among other differences, subpart 1300 of Regulation S-K requires us to disclose our mineral resources, in addition to our mineral reserves, as of the end of our most recently completed fiscal year both in the aggregate and for each of our individually material mining properties.
Subpart 1300 of Regulation S-K requires us to disclose our mineral resources, in addition to our mineral reserves, as of the end of our most recently completed fiscal year both in the aggregate and for each of our individually material mining properties.
Summaries of the Ogden facility’s sodium and sodium chloride mineral resources and mineral reserves as of September 30, 2022 and 2021 are shown in Tables 7 and 8, respectively.
Summaries of the Ogden facility’s sodium and sodium chloride mineral resources and mineral reserves as of September 30, 2023 and 2022 are shown in Tables 7 and 8, respectively.
Summaries of the Cote Blanche mine’s salt mineral resources and mineral reserves as of September 30, 2022 and 2021 are shown in Tables 10 and 11, respectively.
Summaries of the Cote Blanche mine’s salt mineral resources and mineral reserves as of September 30, 2023 and 2022 are shown in Tables 10 and 11, respectively.
The Goderich mine operates under two air permits issued by the Ontario Ministry of Environment, Conservation and Parks, one for the lab (8-1131-96-007), and the other for the garage for welding exhaust (5522-78NUN2). Site drainage into Snug Harbour and the 57 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC.
The Goderich mine operates under two air permits issued by the Ontario Ministry of Environment, Conservation and Parks, one for the lab (8-1131-96-007), and the other for the garage for welding exhaust (5522-78NUN2). Site drainage into Snug Harbour and the 58 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC.
The Cote Blanche mine is located in south-central Louisiana in the Parish of St. Mary (T15S, R7E), at the northern edge of Cote Blanche Hummoch, commonly called “Cote Blanche Island.” Maps of the Cote Blanche mine property are shown in Figures 3 and 4. 48 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. Figure 3.
The Cote Blanche mine is located in south-central Louisiana in the Parish of St. Mary (T15S, R7E), at the northern edge of Cote Blanche Hummoch, commonly called “Cote Blanche Island.” Maps of the Cote Blanche mine property are shown in Figures 3 and 4. 49 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. Figure 3.
Mineral resources are not mineral reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the mineral resources will be converted into mineral reserves upon application of modifying factors. 32 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC.
Mineral resources are not mineral reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the mineral resources will be converted into mineral reserves upon application of modifying factors. 33 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC.
(9) The 1,700-foot and 1,900-foot levels have been approximated using the 1,300-foot and 1,500-foot level contours, respectively, in alignment to the 400-foot contact distance restriction and site and safety constraints. 53 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. Table 11.
(9) The 1,700-foot and 1,900-foot levels have been approximated using the 1,300-foot and 1,500-foot level contours, respectively, in alignment to the 400-foot contact distance restriction and site and safety constraints. 54 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. Table 11.
Based on the proposed mine layout and using a 6.5 million tons per annum average production run rate assumption, the Goderich mine has a current mine life of approximately 56 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. 72 years, assuming the Company is able to successfully negotiate an extension of the lease following the expiration of the 21-year renewal term in 2043, which the Company currently expects.
Based on the proposed mine layout and using a 6.5 million tons per annum average production run rate assumption, the Goderich mine has a current mine life of approximately 57 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. 70 years, assuming the Company is able to successfully negotiate an extension of the lease following the expiration of the 21-year renewal term in 2043, which the Company currently expects.
The pricing data is based on a five-year average of historical gross sales data for sodium chloride of $62.41 per ton. Gross sales prices are projected to increase to approximately $215.66 per ton for NaCl through year 2161 (the current expected end of mine life).
The pricing data is based on a five-year average of historical gross sales data for sodium chloride of $82.65 per ton. Gross sales prices are projected to increase to approximately $215.66 per ton for NaCl through year 2161 (the current expected end of mine life).
(7) Reported sodium concentration for the Great Salt Lake assumes an indicative lake level of 4,194.4 feet in the south arm and 4,193.5 feet in the north arm. 45 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. Table 8.
(7) Reported sodium concentration for the Great Salt Lake assumes an indicative lake level of 4,194.4 feet in the south arm and 4,193.5 feet in the north arm. 46 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. Table 8.
(7) Reported potassium concentration for the Great Salt Lake assumes an indicative lake level of 4,194.4 feet in the south arm and 4,193.5 feet in the north arm. 41 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. Table 4.
(7) Reported potassium concentration for the Great Salt Lake assumes an indicative lake level of 4,194.4 feet in the south arm and 4,193.5 feet in the north arm. 43 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. Table 5.
Cote Blanche Mine Property Location Map 49 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. Figure 4. Aerial View of Cote Blanche Island Cote Blanche Island is situated between the Intra-Coastal Waterway and Cote Blanche Bay in the Gulf of Mexico.
Cote Blanche Mine Property Location Map 50 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. Figure 4. Aerial View of Cote Blanche Island Cote Blanche Island is situated between the Intra-Coastal Waterway and Cote Blanche Bay in the Gulf of Mexico.
The milling and crushing facilities were constructed when the Cote Blanche mine developed the 1,500 foot level in 2001. As of September 30, 2022, the net book value for the plant, property and equipment at the Cote Blanche mine is $60,600,000, exclusive of mineral rights and the value of assets leased under operating leases.
The milling and crushing facilities were constructed when the Cote Blanche mine developed the 1,500 foot level in 2001. As of September 30, 2023, the net book value for the plant, property and equipment at the Cote Blanche mine is $69,500,000, exclusive of mineral rights and the value of assets leased under operating leases.
See Section 11 of the Ogden Lithium TRS (as defined below) for a discussion of the material assumptions underlying the cut-off grade analysis. 33 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. Table 2.
See Section 11 of the Ogden Lithium TRS (as defined below) for a discussion of the material assumptions underlying the cut-off grade analysis. 34 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. Table 2.
Reported concentrations for the Great Salt Lake assume an indicative lake level of 4,194.4 feet in the south arm and 4,193.5 feet in the north arm. 34 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC.
Reported concentrations for the Great Salt Lake assume an indicative lake level of 4,194.4 feet in the south arm and 4,193.5 feet in the north arm. 35 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC.
(9) The 1,700-foot and 1,900-foot levels have been approximated using the 1,300-foot and 1,500-foot level contours, respectively, in alignment to the 400-foot contact distance restriction and site and safety constraints. From September 30, 2021 to September 30, 2022, combined measured and indicated resources at the Cote Blanche mine decreased by approximately 0.25% and total reserves decreased by approximately 0.75%.
(9) The 1,700-foot and 1,900-foot levels have been approximated using the 1,300-foot and 1,500-foot level contours, respectively, in alignment to the 400-foot contact distance restriction and site and safety constraints. From September 30, 2022 to September 30, 2023, combined measured and indicated resources at the Cote Blanche mine decreased by approximately 0.56% and total reserves decreased by approximately 0.77%.
The net book value for the plant, property and equipment at the Goderich mine is $210,700,000 as of September 30, 2022, exclusive of mineral rights and the value of assets leased under operating leases. The Goderich mine has procured and is operating in compliance with all required operating licenses, including permits pertaining to mineral extraction, effluent discharge and air permitting.
The net book value for the plant, property and equipment at the Goderich mine is $206,500,000 as of September 30, 2023, exclusive of mineral rights and the value of assets leased under operating leases. The Goderich mine has procured and is operating in compliance with all required operating licenses, including permits pertaining to mineral extraction, effluent discharge and air permitting.
Summary of Mineral Resources and Reserves Summaries of our mineral resources and reserves at the end of fiscal 2022 are set forth in Tables 1 and 2. 31 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. Table 1.
Summary of Mineral Resources and Reserves Summaries of our mineral resources and reserves at the end of fiscal 2023 are set forth in Tables 1 and 2. 32 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. Table 1.
Reported concentrations for the Great Salt Lake assume an indicative lake level of 4,194.4 feet in the south arm and 4,193.5 feet in the north arm. (6) With respect to the Ogden facility, based on pricing data based on a five-year average (2017 through 2021) of historical sales data for SOP of $573 per ton.
Reported concentrations for the Great Salt Lake assume an indicative lake level of 4,194.4 feet in the south arm and 4,193.5 feet in the north arm. (6) With respect to the Ogden facility, based on pricing data based on a five-year average (2019 through 2023) of historical sales data for SOP of $647 per ton.
The pricing data is based on a five-year average of historical gross sales data for MgCl of $52.08 per ton. Gross sales prices are projected to increase to approximately $816.73 per ton for magnesium chloride through year 2161 (the current expected end of mine life).
(5) The pricing data is based on a five-year average of historical gross sales data for MgCl of $66.20 per ton. Gross sales prices are projected to increase to approximately $816.73 per ton for magnesium chloride through year 2161 (the current expected end of mine life).
(7) Reported sodium concentration for the Great Salt Lake assumes an indicative lake level of 4,194.4 feet in the south arm and 4,193.5 feet in the north arm. From September 30, 2021 to September 30, 2022, for both potassium and SOP, combined measured and indicated resources decreased by approximately 0.29% and total reserves decreased by approximately 0.54%.
(7) Reported sodium concentration for the Great Salt Lake assumes an indicative lake level of 4,194.4 feet in the south arm and 4,193.5 feet in the north arm. From September 30, 2022 to September 30, 2023, for both potassium and SOP, combined measured and indicated resources decreased by approximately 0.81% and total reserves decreased by approximately 0.52%.
The pricing data is based on a five-year average of historical gross sales data for MgCl of $52.08 per ton. Gross sales prices are projected to increase to approximately and $816.73 per ton for MgCl through year 2161 (the current expected end of mine life).
(5) The pricing data is based on a five-year average of historical gross sales data for MgCl of $66.20 per ton. Gross sales prices are projected to increase to approximately and $816.73 per ton for MgCl through year 2161 (the current expected end of mine life).
(7) Reported magnesium concentration for the Great Salt Lake assumes an indicative lake level of 4,194.4 feet in the south arm and 4,193.5 feet in the north arm. 43 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. Table 6.
(7) Reported magnesium concentration for the Great Salt Lake assumes an indicative lake level of 4,194.4 feet in the south arm and 4,193.5 feet in the north arm. 45 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. Table 7.
The development of this project will require significant infrastructure to establish extraction and logistics capabilities. As of September 30, 2022 our investment in these rights totaled $8.5 million.
The development of this project would require significant infrastructure to establish extraction and logistics capabilities. As of September 30, 2023 our investment in these rights totaled $8.5 million.
The primary product currently produced at the Ogden facility is SOP (which is a potassium-rich salt used as plant fertilizer), with coproduct production of sodium chloride (which is used for highway deicing and chemical applications) and magnesium chloride (which is used in deicing, dust control and unpaved road surface stabilization applications).
The primary product currently produced at the Ogden facility is SOP (which is a potassium-rich salt used as plant fertilizer), with coproduct production of sodium chloride (which is used for highway deicing and chemical applications) and magnesium chloride (which is used in deicing, dust control and unpaved road surface stabilization applications and is an ingredient in our fire retardant products).
Maps of the Ogden facility are shown in Figures 1 and 2. 35 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. Figure 1. Ogden Facility Property Location Map 36 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. Figure 2.
Maps of the Ogden facility are shown in Figures 1 and 2. 36 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. Figure 1. Ogden Facility Property Location Map 37 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. Figure 2.
(5) With respect to the Ogden facility, based on pricing data based on a five-year average (2017 through 2021) of historical sales data for SOP of $573 per ton. Sales prices are projected to increase to approximately $8,529 per ton through the current expected end of mine life.
(5) With respect to the Ogden facility, based on pricing data based on a five-year average (2019 through 2023) of historical sales data for SOP of $647 per ton. Sales prices are projected to increase to approximately $8,529 per ton through the current expected end of mine life.
The pricing data is based on a five-year average (2017 through 2021) of historical sales data for SOP of $573 per ton. Sales prices are projected to increase to approximately $8,529 per ton for SOP through year 2161 (the current expected end of mine life).
The pricing data is based on a five-year average (2019 through 2023) of historical sales data for SOP of $647 per ton. Sales prices are projected to increase to approximately $8,529 per ton for SOP through year 2161 (the current expected end of mine life).
The following map shows the locations of our mining properties, as of September 30, 2022: 28 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC.
The following map shows the locations of our mining properties, as of September 30, 2023: 29 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC.
Goderich Mine – Summary of Salt Mineral Resources at September 30, 2022 and 2021 Salt Resources (tons) (1)(2)(4)(5)(6)(7)(8) Resource Area (3)(9) September 30, 2022 September 30, 2021 Measured Resources — — Indicated Resources 1,469,000,089 1,485,710,000 Measured + Indicated Resources 1,469,000,089 1,485,710,000 Inferred Resources 148,200,000 148,200,000 (1) Mineral resources are reported in situ.
Goderich Mine – Summary of Salt Mineral Resources at September 30, 2023 and 2022 Salt Resources (tons) (1)(2)(4)(5)(6)(7)(8) Resource Area (3)(9) September 30, 2023 September 30, 2022 Measured Resources — — Indicated Resources 1,453,008,026 1,469,000,089 Measured + Indicated Resources 1,453,008,026 1,469,000,089 Inferred Resources 148,200,000 148,200,000 (1) Mineral resources are reported in situ.
Ogden Facility – Summary of Potassium and SOP Mineral Reserves at September 30, 2022 and 2021 September 30, 2022 September 30, 2021 Reserve Area Average Potassium Grade (mg/L) (7) Potassium Reserves (tons) (1)(2)(4)(5) Cut-Off Grade (mg/L) (6) SOP Reserves (tons) (1)(2)(3)(4)(5) Average Potassium Grade (mg/L) (7) Potassium Reserves (tons) (1)(2)(4)(5) Cut-Off Grade (mg/L) (6) SOP Reserves (tons) (1)(2)(3)(4)(5) Proven Reserves Total Proven Reserves — — — — — — — — Probable Reserves Great Salt Lake North Arm 7,320 20,452,413 4,000 45,522,980 7,320 20,562,500 4,000 45,768,145 Great Salt Lake South Arm — — — — — — — — Total Probable Reserves 7,320 20,452,413 4,000 45,522,980 7,320 20,562,500 4,000 45,768,145 Total Reserves Great Salt Lake North Arm 7,320 20,452,413 4,000 45,522,980 7,320 20,562,500 4,000 45,768,145 Great Salt Lake South Arm — — — — — — — — Total Reserves 7,320 20,452,413 4,000 45,522,980 7,320 20,562,500 4,000 45,768,145 (1) Mineral reserves are as recovered, saleable product.
Ogden Facility – Summary of Potassium and SOP Mineral Reserves at September 30, 2023 and 2022 September 30, 2023 September 30, 2022 Reserve Area Average Potassium Grade (mg/L) (7) Potassium Reserves (tons) (1)(2)(4)(5) Cut-Off Grade (mg/L) (6) SOP Reserves (tons) (1)(2)(3)(4)(5) Average Potassium Grade (mg/L) (7) Potassium Reserves (tons) (1)(2)(4)(5) Cut-Off Grade (mg/L) (6) SOP Reserves (tons) (1)(2)(3)(4)(5) Proven Reserves Total Proven Reserves — — — — — — — — Probable Reserves Great Salt Lake North Arm 7,320 20,345,292 4,000 45,284,552 7,320 20,452,413 4,000 45,522,980 Great Salt Lake South Arm — — — — — — — — Total Probable Reserves 7,320 20,345,292 4,000 45,284,552 7,320 20,452,413 4,000 45,522,980 Total Reserves Great Salt Lake North Arm 7,320 20,345,292 4,000 45,284,552 7,320 20,452,413 4,000 45,522,980 Great Salt Lake South Arm — — — — — — — — Total Reserves 7,320 20,345,292 4,000 45,284,552 7,320 20,452,413 4,000 45,522,980 (1) Mineral reserves are as recovered, saleable product.
The Company has certificated all of its Water Rights, meaning that demonstration of actual use in order to retain the right in perpetuity has been approved and authorized. The Mineral Extraction Permit (GSL Mine M/057/0002) was granted by the Utah DOGM.
The Company has certificated the Water Rights that contribute to the 156,000 acre feet of extraction rights, meaning that demonstration of actual use in order to retain the right in perpetuity has been approved and authorized. The Mineral Extraction Permit (GSL Mine M/057/0002) was granted by the Utah DOGM.
Ogden Facility – Summary of Magnesium and Magnesium Chloride Mineral Reserves at September 30, 2022 and 2021 September 30, 2022 September 30, 2021 Reserve Area Average Magnesium Grade (mg/L) (7) Magnesium Reserves (tons) (1)(2)(4)(5) Cut-Off Grade (mg/L) (6) Magnesium Chloride Reserves (tons) (1)(2)(3)(4)(5) Average Magnesium Grade (mg/L) (7) Magnesium Reserves (tons) (1)(2)(4)(5) Cut-Off Grade (mg/L) (6) Magnesium Chloride Reserves (tons) (1)(2)(3)(4)(5) Proven Reserves Total Proven Reserves — — — — — — — — Probable Reserves Great Salt Lake North Arm 11,120 24,214,744 8,638 94,752,292 11,120 24,373,669 8,638 95,480,000 Great Salt Lake South Arm 4,785 — 3,039 — 4,785 — 3,039 — Total Probable Reserves 24,214,744 94,752,292 24,373,669 95,480,000 Total Reserves Great Salt Lake North Arm 11,120 24,214,744 8,638 94,752,292 11,120 24,373,669 8,638 95,480,000 Great Salt Lake South Arm 4,785 — 3,039 — 4,785 — 3,039 — Total Reserves — 24,214,744 — 94,752,292 24,373,669 95,480,000 (1) Mineral reserves are as recovered, saleable product.
Ogden Facility – Summary of Magnesium and Magnesium Chloride Mineral Reserves at September 30, 2023 and 2022 September 30, 2023 September 30, 2022 Reserve Area Average Magnesium Grade (mg/L) (7) Magnesium Reserves (tons) (1)(2)(4)(5) Cut-Off Grade (mg/L) (6) Magnesium Chloride Reserves (tons) (1)(2)(3)(4)(5) Average Magnesium Grade (mg/L) (7) Magnesium Reserves (tons) (1)(2)(4)(5) Cut-Off Grade (mg/L) (6) Magnesium Chloride Reserves (tons) (1)(2)(3)(4)(5) Proven Reserves Total Proven Reserves — — — — — — — — Probable Reserves Great Salt Lake North Arm 11,120 24,027,805 8,638 94,020,802 11,120 24,214,744 8,638 94,752,292 Great Salt Lake South Arm 4,785 — 3,039 — 4,785 — 3,039 — Total Probable Reserves 24,027,805 94,020,802 24,214,744 94,752,292 Total Reserves Great Salt Lake North Arm 11,120 24,027,805 8,638 94,020,802 11,120 24,214,744 8,638 94,752,292 Great Salt Lake South Arm 4,785 — 3,039 — 4,785 — 3,039 — Total Reserves — 24,027,805 — 94,020,802 — 24,214,744 — 94,752,292 (1) Mineral reserves are as recovered, saleable product.
For simplicity, all sales are assumed at t he lower value (and higher tonnage) product, rock salt and are based on pricing data described in Section 16 of the Goderich TRS. The pricing data is based on a five-year average (2017 through 2021) of historical sales data for rock salt for road deicing of $60.58 per ton.
For simplicity, all sales are assumed at t he lower value (and higher tonnage) product, rock salt and are based on pricing data described in Section 16 of the Goderich TRS. The pricing data is based on a five-year average (2019 through 2023) of historical sales data for rock salt for road deicing of $64.12 per ton.
For simplicity, all sales are assumed at the lower value (and higher tonnage) product, rock salt and are based on pricing data described in Section 16 of the Goderich TRS. The pricing data is based o n a five-year average (2017 through 2021) of historical sales data for rock salt for road deicing of $60.58 per ton.
For simplicity, all sales are assumed at the lower value (and higher tonnage) product, rock salt and are based on pricing data described in Section 16 of the Goderich TRS. The pricing data is based o n a five-year average (2019 through 2023) of historical sales data for rock salt for road deicing of $64.12 per ton.
For simplicity, all sales are assumed at the lower value (and higher tonnage) product, rock salt, and are based on pricing data described in Section 16 of the Cote Blanche TRS. The pricing data is based on a five-year average (2017 through 2021) of historical sales data for rock salt for road deicing of $61.41 per ton.
For simplicity, all sales are assumed at the lower value (and higher tonnage) product, rock salt, and are based on pricing data described in Section 16 of the Cote Blanche TRS. The pricing data is based on a five-year average (2019 through 2023) of historical sales data for rock salt for road deicing of $68.38 per ton.
For simplicity, all sales are assumed at the lower value (and higher tonnage) product, rock salt, and are based on pricing data described in Section 16 of the Cote Blanche TRS. The pricing data is based on a five-year average (2017 through 2021) of historical sales data for rock salt for road deicing of $61.41 per ton.
For simplicity, all sales are assumed at the lower value (and higher tonnage) product, rock salt, and are based on pricing data described in Section 16 of the Cote Blanche TRS. The pricing data is based on a five-year average (2019 through 2023) of historical sales data for rock salt for road deicing of $68.38 per ton.
Ogden Facility – Summary of Sodium and Sodium Chloride Mineral Reserves at September 30, 2022 and 2021 September 30, 2022 September 30, 2021 Reserve Area Average Sodium Grade (mg/L) (7) Sodium Reserves (tons) (1)(2)(4)(5) Cut-Off Grade (mg/L) (6) Sodium Chloride Reserves (tons) (1)(2)(3)(4)(5) Average Sodium Grade (mg/L) (7) Sodium Reserves (tons) (1)(2)(4)(5) Cut-Off Grade (mg/L) (6) Sodium Chloride Reserves (tons) (1)(2)(3)(4)(5) Proven Reserves Total Proven Reserves — — — — — — — — Probable Reserves Great Salt Lake North Arm 97,530 62,786,302 75,757 159,602,779 97,530 63,305,000 75,757 160,930,000 Great Salt Lake South Arm 46,298 — 40,365 — 46,298 — 40,365 — Total Probable Reserves 62,786,302 159,602,779 63,305,000 160,930,000 Total Reserves Great Salt Lake North Arm 97,530 62,786,302 75,757 159,602,779 97,530 63,305,000 75,757 160,930,000 Great Salt Lake South Arm 46,298 — 40,365 — 46,298 — 40,365 — Total Reserves — 62,786,302 — 159,602,779 63,305,000 160,930,000 (1) Mineral reserves are as recovered, saleable product.
Ogden Facility – Summary of Sodium and Sodium Chloride Mineral Reserves at September 30, 2023 and 2022 September 30, 2023 September 30, 2022 Reserve Area Average Sodium Grade (mg/L) (7) Sodium Reserves (tons) (1)(2)(4)(5) Cut-Off Grade (mg/L) (6) Sodium Chloride Reserves (tons) (1)(2)(3)(4)(5) Average Sodium Grade (mg/L) (7) Sodium Reserves (tons) (1)(2)(4)(5) Cut-Off Grade (mg/L) (6) Sodium Chloride Reserves (tons) (1)(2)(3)(4)(5) Proven Reserves Total Proven Reserves — — — — — — — — Probable Reserves Great Salt Lake North Arm 97,530 62,323,098 75,757 158,425,314 97,530 62,786,302 75,757 159,602,779 Great Salt Lake South Arm 46,298 — 40,365 — 46,298 — 40,365 — Total Probable Reserves 62,323,098 158,425,314 62,786,302 159,602,779 Total Reserves Great Salt Lake North Arm 97,530 62,323,098 75,757 158,425,314 97,530 62,786,302 75,757 159,602,779 Great Salt Lake South Arm 46,298 — 40,365 — 46,298 — 40,365 — Total Reserves — 62,323,098 — 158,425,314 — 62,786,302 — 159,602,779 (1) Mineral reserves are as recovered, saleable product.
Goderich Mine – Summary of Salt Mineral Reserves at September 30, 2022 and 2021 Salt Reserves (tons) (1)(2)(3)(4)(5)(6)(7)(8) Reserve Area (3)(9) September 30, 2022 September 30, 2021 Proven Reserves — — Probable Reserves 463,724,933 470,030,000 Total Reserves 463,724,933 470,030,000 (1) Ore reserves are as recovered, saleable product.
Goderich Mine – Summary of Salt Mineral Reserves at September 30, 2023 and 2022 Salt Reserves (tons) (1)(2)(3)(4)(5)(6)(7)(8) Reserve Area (3)(9) September 30, 2023 September 30, 2022 Proven Reserves — — Probable Reserves 457,690,728 463,724,933 Total Reserves 457,690,728 463,724,933 (1) Ore reserves are as recovered, saleable product.
Among them is the assumption that there is a reasonable probability that the Company will be able to develop an appropriate method for extraction of lithium and LCE from the resources summarized above based on its successful extraction of lithium and rejection of magnesium that has been achieved with extensive onsite pilot testing and the fact that analogous DLE methods are used by existing Chinese operations and the ongoing development of similar technologies at numerous other lithium brine sources described in Section 10 of the Ogden Lithium TRS.
Among them is the assumption that there is a reasonable probability that the Company will be able to develop an appropriate method for extraction of lithium and LCE from the resources summarized above based on 48 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. its successful extraction of lithium and rejection of magnesium that has been achieved with extensive onsite pilot testing and the fact that analogous direct lithium extraction (“DLE”) methods are used by existing Chinese operations and the ongoing development of similar technologies at numerous other lithium salt sources described in Section 10 of the Ogden Lithium TRS.
Ogden Facility – Summary of Potassium and SOP Mineral Resources at September 30, 2022 and 2021 September 30, 2022 September 30, 2021 Resource Area Average Potassium Grade (mg/L) (7) Potassium Resources (tons) (1)(2)(4)(5) Cut-Off Grade (mg/L) (6) SOP Resources (tons) (1)(2)(3)(4)(5) Average Potassium Grade (mg/L) (7) Potassium Resources (tons) (1)(2)(4)(5) Cut-Off Grade (mg/L) (6) SOP Resources (tons) (1)(2)(3)(4)(5) Measured Resources Total Measured Resources — — — — — — — — Indicated Resources Great Salt Lake North Arm 7,320 14,361,555 4,000 31,965,949 7,320 14,480,978 4,000 32,231,855 Great Salt Lake South Arm 3,060 26,057,971 1,660 58,000,000 3,060 26,057,971 1,660 58,000,000 Total Indicated Resources 40,419,526 89,965,949 40,538,949 90,231,855 Measured + Indicated Resources Great Salt Lake North Arm 7,320 14,361,555 4,000 31,965,949 7,320 14,480,978 4,000 32,231,855 Great Salt Lake South Arm 3,060 26,057,971 1,660 58,000,000 3,060 26,057,971 1,660 58,000,000 Total Measured + Indicated Resources 40,419,526 89,965,949 40,538,949 90,231,855 Inferred Resources Total Inferred Resources — — — — — — — — (1) Mineral resources are not mineral reserves and do not have demonstrated economic viability.
Ogden Facility – Summary of Potassium and SOP Mineral Resources at September 30, 2023 and 2022 September 30, 2023 September 30, 2022 Resource Area Average Potassium Grade (mg/L) (7) Potassium Resources (tons) (1)(2)(4)(5) Cut-Off Grade (mg/L) (6) SOP Resources (tons) (1)(2)(3)(4)(5) Average Potassium Grade (mg/L) (7) Potassium Resources (tons) (1)(2)(4)(5) Cut-Off Grade (mg/L) (6) SOP Resources (tons) (1)(2)(3)(4)(5) Measured Resources Total Measured Resources — — — — — — — — Indicated Resources Great Salt Lake North Arm 7,320 14,245,372 4,000 31,707,350 7,320 14,361,555 4,000 31,965,949 Great Salt Lake South Arm 3,060 26,057,971 1,660 58,000,000 3,060 26,057,971 1,660 58,000,000 Total Indicated Resources 40,303,343 89,707,350 40,419,526 89,965,949 Measured + Indicated Resources Great Salt Lake North Arm 7,320 14,245,372 4,000 31,707,350 7,320 14,361,555 4,000 31,965,949 Great Salt Lake South Arm 3,060 26,057,971 1,660 58,000,000 3,060 26,057,971 1,660 58,000,000 Total Measured + Indicated Resources 40,303,343 89,707,350 40,419,526 89,965,949 Inferred Resources Total Inferred Resources — — — — — — — — (1) Mineral resources are not mineral reserves and do not have demonstrated economic viability.
For simplicity, all sales are assumed at the lower value (and higher tonnage) product, rock salt, and are based on pricing data based on a five-year average (2017 through 2021) of historical sales data for rock salt for road deicing of $60.58 per ton to $61.41 per ton.
For simplicity, all sales are assumed at the lower value (and higher tonnage) product, rock salt, and are based on pricing data based on a five-year average (2017 through 2021) of historical sales data for rock salt for road deicing of $64.12 per ton to $82.65 per ton.
(10) Based on pricing data based on a five-year average (2017 through 2021) of historical sales data for magnesium chloride of $46.98 per ton. Sales prices are projected to increase to approximately $736.78 per ton through the current expected end of mine life.
(10) Based on pricing data based on a five-year average (2019 through 2023) of historical sales data for magnesium chloride of $66.20 per ton. Sales prices are projected to increase to approximately $736.78 per ton through the current expected end of mine life.
(8) Based on pricing data based on a five-year average (2017 through 2021) of historical sales data for magnesium chloride of $46.98 per ton. Sales prices are projected to increase to approximately $736.78 per ton through the current expected end of mine life.
(8) Based on pricing data based on a five-year average (2019 through 2023) of historical sales data for magnesium chloride of $66.20 per ton. Sales prices are projected to increase to approximately $736.78 per ton through the current expected end of mine life.
Ogden Facility – Summary of Magnesium and Magnesium Chloride Mineral Resources at September 30, 2022 and 2021 September 30, 2022 September 30, 2021 Resource Area Average Magnesium Grade (mg/L) (7) Magnesium Resources (tons) (1)(2)(4)(5) Cut-Off Grade (mg/L) (6) Magnesium Chloride Resources (tons) (1)(2)(3)(4)(5) Average Magnesium Grade (mg/L) (7) Magnesium Resources (tons) (1)(2)(4)(5) Cut-Off Grade (mg/L) (6) Magnesium Chloride Resources (tons) (1)(2)(3)(4)(5) Measured Resources Total Measured Resources — — — — — — — — Indicated Resources Great Salt Lake North Arm 11,120 51,927,277 8,638 203,191,436 11,120 52,000,000 8,638 204,000,000 Great Salt Lake South Arm 4,785 40,000,000 3,039 157,000,000 4,785 40,000,000 3,039 157,000,000 Total Indicated Resources 91,927,277 360,191,436 92,000,000 361,000,000 Measured + Indicated Resources Great Salt Lake North Arm 11,120 51,927,277 8,638 203,191,436 11,120 52,000,000 8,638 204,000,000 Great Salt Lake South Arm 4,785 40,000,000 3,039 157,000,000 4,785 40,000,000 3,039 157,000,000 Total Measured + Indicated Resources 91,927,277 360,191,436 92,000,000 361,000,000 Inferred Resources Total Inferred Resources — — — — — — — — (1) Mineral resources are not mineral reserves and do not have demonstrated economic viability.
Ogden Facility – Summary of Magnesium and Magnesium Chloride Mineral Resources at September 30, 2023 and 2022 September 30, 2023 September 30, 2022 Resource Area Average Magnesium Grade (mg/L) (7) Magnesium Resources (tons) (1)(2)(4)(5) Cut-Off Grade (mg/L) (6) Magnesium Chloride Resources (tons) (1)(2)(3)(4)(5) Average Magnesium Grade (mg/L) (7) Magnesium Resources (tons) (1)(2)(4)(5) Cut-Off Grade (mg/L) (6) Magnesium Chloride Resources (tons) (1)(2)(3)(4)(5) Measured Resources Total Measured Resources — — — — — — — — Indicated Resources Great Salt Lake North Arm 11,120 51,719,568 8,638 202,378,669 11,120 51,927,277 8,638 203,191,436 Great Salt Lake South Arm 4,785 40,122,668 3,039 157,000,000 4,785 40,000,000 3,039 157,000,000 Total Indicated Resources 91,842,236 359,378,669 91,927,277 360,191,436 Measured + Indicated Resources Great Salt Lake North Arm 11,120 51,719,568 8,638 202,378,669 11,120 51,927,277 8,638 203,191,436 Great Salt Lake South Arm 4,785 40,122,668 3,039 157,000,000 4,785 40,000,000 3,039 157,000,000 Total Measured + Indicated Resources 91,842,236 359,378,669 91,927,277 360,191,436 Inferred Resources Total Inferred Resources — — — — — — — — (1) Mineral resources are not mineral reserves and do not have demonstrated economic viability.
(2) Production rates for SOP are 325,000 tons per year. This relates to a depletion of 145,833 tons of potassium per year. Based on the QP’s reserve model, the life of mine is estimated to be 139 years. (3) Conversion of potassium to SOP uses a factor of 2.2258 tons of SOP per ton of potassium.
(2) Annual production rates for SOP are assumed to be 320,000 tons per year, relating to a depletion of 145,833 tons of potassium per year. Based on the QP’s reserve model, the life of mine is estimated to be 138 years. (3) Conversion of potassium to SOP uses a factor of 2.2258 tons of SOP per ton of potassium.
(3) Conversion of magnesium to magnesium chloride uses a factor of 3.913 tons of magnesium chloride per ton of magnesium. (4) Included process recovery is approximately 10.0% based on historical production results. Mining or metallurgical recovery is not applicable for this operation. (5) Based on pricing data described in Section 18.1 of this TRS.
(3) Conversion of magnesium to magnesium chloride uses a factor of 3.913 tons of magnesium chloride per ton of magnesium. (4) Included process recovery is approximately 10.0% based on historical production results. Mining or metallurgical recovery is not applicable for this operation.
The pricing data is based on a five-year average (2017 through 2021) of historical gross sales data for sodium chloride of $62.41 per ton. Gross sales prices are projected to increase to approximately $215.66 per ton for sodium chloride through year 2161 (the current expected end of mine life).
(5) The pricing data is based on a five-year average (2019 through 2023) of historical gross sales data for sodium chloride of $82.65 per ton. Gross sales prices are projected to increase to approximately $215.66 per ton for sodium chloride through year 2161 (the current expected end of mine life).
Sales prices are projected to increase to approximately $295.60 per ton for rock salt for road deicing through year 2094 (the current expected end of mine life). (9) Based on an area of approximately 575,257,000 square feet for the A-2 salt bed within the lease area.
Sales prices are projected to increase to approximately $295.60 per ton for rock salt for road deicing through year 2094 (the current expected end of mine life). (9) Based on an area of approximately 575,257,000 square feet for the A-2 salt bed within the lease area. 59 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC.
Mine Sales Revenue Per Ton” for each calendar 50 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. year is the quotient of the total bulk sales revenue (excluding any taxes) of the Company and its affiliates for salt sold from the Cote Blanche mine in bulk (in units of 1 short ton or more) (“Total Bulk Sales Revenue”) reduced for all freight in, freight out, fuel surcharge, additives, depot/warehouse storage, handling and operating costs, promotions/discounts and other costs as are properly deducted under generally accepted accounting principles in that calendar year, divided by the total number of tons sold.
(excluding any taxes) of the Company and its affiliates for salt sold from the Cote Blanche mine in bulk (in units of 1 short ton or more) (“Total Bulk Sales Revenue”) reduced for all freight in, freight out, fuel surcharge, additives, depot/warehouse storage, handling and operating costs, promotions/discounts and other costs as are properly deducted under generally accepted accounting principles in that calendar year, divided by the total number of tons sold.
The Company’s experience in extracting potassium and other salts from the Great Salt Lake for over 50 years under dynamic conditions, such as changing lake elevations and ion concentrations, lends confidence regarding the ability to operate under varying conditions, utilizing ion concentrations as a tool to monitor reserve estimates and make operational decisions.
The Company’s experience in extracting potassium and other salts from the Great Salt Lake for over 50 years under dynamic conditions, such as changing lake elevations and ion concentrations, lends confidence regarding the ability to operate under varying conditions, utilizing ion concentrations as a tool to monitor reserve estimates and make operational decisions. 60 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC.
Ogden Facility – Summary of Sodium and Sodium Chloride Mineral Resources at September 30, 2022 and 2021 September 30, 2022 September 30, 2021 Resource Area Average Sodium Grade (mg/L) (7) Sodium Resources (tons) (1)(2)(4)(5) Cut-Off Grade (mg/L) (6) Sodium Chloride Resources (tons) (1)(2)(3)(4)(5) Average Sodium Grade (mg/L) (7) Sodium Resources (tons) (1)(2)(4)(5) Cut-Off Grade (mg/L) (6) Sodium Chloride Resources (tons) (1)(2)(3)(4)(5) Measured Resources Total Measured Resources — — — — — — — — Indicated Resources Great Salt Lake North Arm 97,530 436,477,305 75,757 1,109,525,310 97,530 437,000,000 75,757 1,111,000,000 Great Salt Lake South Arm 46,298 406,000,000 40,365 1,032,000,000 46,298 406,000,000 40,365 1,032,000,000 Total Indicated Resources 842,477,305 2,141,525,310 843,000,000 2,143,000,000 Measured + Indicated Resources Great Salt Lake North Arm 97,530 436,477,305 75,757 1,109,525,310 97,530 437,000,000 75,757 1,111,000,000 Great Salt Lake South Arm 46,298 406,000,000 40,365 1,032,000,000 46,298 406,000,000 40,365 1,032,000,000 Total Measured + Indicated Resources 842,477,305 2,141,525,310 843,000,000 2,143,000,000 Inferred Resources Total Inferred Resources — — — — — — — — (1) Mineral resources are not mineral reserves and do not have demonstrated economic viability.
Ogden Facility – Summary of Sodium and Sodium Chloride Mineral Resources at September 30, 2023 and 2022 September 30, 2023 September 30, 2022 Resource Area Average Sodium Grade (mg/L) (7) Sodium Resources (tons) (1)(2)(4)(5) Cut-Off Grade (mg/L) (6) Sodium Chloride Resources (tons) (1)(2)(3)(4)(5) Average Sodium Grade (mg/L) (7) Sodium Resources (tons) (1)(2)(4)(5) Cut-Off Grade (mg/L) (6) Sodium Chloride Resources (tons) (1)(2)(3)(4)(5) Measured Resources Total Measured Resources — — — — — — — — Indicated Resources Great Salt Lake North Arm 97,530 435,962,634 75,757 1,108,217,016 97,530 436,477,305 75,757 1,109,525,310 Great Salt Lake South Arm 46,298 405,979,544 40,365 1,032,000,000 46,298 406,000,000 40,365 1,032,000,000 Total Indicated Resources 841,942,178 2,140,217,016 842,477,305 2,141,525,310 Measured + Indicated Resources Great Salt Lake North Arm 97,530 435,962,634 75,757 1,108,217,016 97,530 436,477,305 75,757 1,109,525,310 Great Salt Lake South Arm 46,298 405,979,544 40,365 1,032,000,000 46,298 406,000,000 40,365 1,032,000,000 Total Measured + Indicated Resources 841,942,178 2,140,217,016 842,477,305 2,141,525,310 Inferred Resources Total Inferred Resources — — — — — — — — (1) Mineral resources are not mineral reserves and do not have demonstrated economic viability.

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Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeNevertheless, management believes that the outcome of legal proceedings and claims, which are pending or known to be threatened, even if determined adversely, will not, either individually or in the aggregate, have a material adverse effect on our results of operations, cash flows or financial condition, except as otherwise described in Part II, Item 8, Note 10 and Part II, Item 8, Note 13 of our Consolidated Financial Statements. 60 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC.
Biggest changeNevertheless, management believes that the outcome of legal proceedings and claims, which are pending or known to be threatened, even if determined adversely, will not, either individually or in the aggregate, have a material adverse effect on our results of operations, cash flows or financial condition, except as otherwise described in Part II, Item 8, Note 11 and Part II, Item 8, Note 14 of our Consolidated Financial Statements.
ITEM 3. LEGAL PROCEEDINGS We are involved in the legal proceedings described in Part II, Item 8, Note 10 and Part II, Item 8, Note 13 to our Consolidated Financial Statements and, from time to time, various routine legal proceedings and claims arising from the ordinary course of our business.
ITEM 3. LEGAL PROCEEDINGS We are involved in the legal proceedings described in Part II, Item 8, Note 11 and Part II, Item 8, Note 14 to our Consolidated Financial Statements and, from time to time, various routine legal proceedings and claims arising from the ordinary course of our business.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeFrontczak, Chief Legal and Administrative Officer and Corporate Secretary , joined Compass Minerals in November 2019 and assumed her current position in February 2020. Prior to her current role, she served as the Company’s Chief Legal Officer and Corporate Secretary. Before joining Compass Minerals, Ms.
Biggest changeHis experience also includes over 10 years as an equity and debt investor, respectively, at Citigroup Asset Management and PGIM Private Capital, formerly Prudential Capital Group. Mary L. Frontczak, Chief Legal and Administrative Officer and Corporate Secretary , joined Compass Minerals in November 2019 and assumed her current position in February 2020.
Information about our Executive Officers Below is information about each person who was or is an executive officer as of September 30, 2022, and as of the date of the filing of this report. The table sets forth each person’s name, position and age as of the date of the filing of this report. Name Age Position Kevin S.
Information about our Executive Officers Below is information about each person who was or is an executive officer as of September 30, 2023, and as of the date of the filing of this report. The table sets forth each person’s name, position and age as of the date of the filing of this report. Name Age Position Kevin S.
Prior to joining the Company, Mr. Standen spent six years at Kansas City Southern in various finance roles after spending two years with the public accounting firm Mayer Hoffman McCann P.C. 61 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. PART II
Prior to joining the Company, Mr. Standen spent six years at Kansas City Southern in various finance roles after spending two years with the public accounting firm Mayer Hoffman McCann P.C. 62 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. PART II
Crutchfield 61 President and Chief Executive Officer and Director Lorin Crenshaw 47 Chief Financial Officer Mary L. Frontczak 56 Chief Legal and Administrative Officer and Corporate Secretary George J. Schuller 59 Chief Operations Officer James D. Standen 47 Chief Commercial Officer Kevin S.
Crutchfield 62 President and Chief Executive Officer and Director Lorin Crenshaw 48 Chief Financial Officer Mary L. Frontczak 57 Chief Legal and Administrative Officer and Corporate Secretary George J. Schuller 60 Chief Operations Officer James D. Standen 48 Chief Commercial Officer Kevin S.
Frontczak had served as Senior Vice President and General Counsel of POET LLC, an ethanol and other biorefined products producer, since 2017.
Prior to her current role, she served as the Company’s Chief Legal Officer and Corporate Secretary. Before joining Compass Minerals, Ms. Frontczak had served as Senior Vice President and General Counsel of POET LLC, an ethanol and other biorefined products producer, since 2017.
Prior to that role, he held positions of increasing responsibility at Albemarle, including as Treasurer and Head of Investor Relations from 2009 to 2016. His experience also includes over 10 years as an equity and debt investor, respectively, at Citigroup Asset Management and PGIM Private Capital, formerly Prudential Capital Group. Mary L.
Prior to that role, he held positions of increasing responsibility at Albemarle, including as Treasurer and Head of Investor 61 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. Relations from 2009 to 2016.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES COMMON STOCK DATA Our common stock, $0.01 par value, trades on the New York Stock Exchange under the symbol CMP. HOLDERS On December 7, 2022, the number of holders of record of our common stock was 263.
Biggest changeThe performance graph above is furnished and not filed for purposes of the Securities Act and the Exchange Act. The performance graph is not soliciting material subject to Regulation 14A. COMMON STOCK DATA Our common stock, $0.01 par value, trades on the New York Stock Exchange under the symbol CMP.
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DIVIDEND POLICY We intend to pay quarterly cash dividends on our common stock. On November 15, 2022, the Board of Directors declared a quarterly cash dividend of $0.15 per share on the Company’s outstanding common stock. The dividend will be paid on December 20, 2022, to stockholders of record as of the close of business on December 9, 2022.
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ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES CUMULATIVE TOTAL STOCK RETURN The following Stockholder Performance Graph compares the cumulative total return on the Company’s common stock with the Russell 2000 Index and a peer group index with companies with market capitalization from $1 billion to $3 billion.
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The performance graph below uses a market capitalization index because the Company does not believe it has a reasonable line-of-business peer group. The graph assumes that the value of the investment in common stock and each index was $100 on December 31, 2018 and that all dividends were reinvested. Peer group indices use beginning of period market capitalization weighting.
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The share price performance shown on the graph is not necessarily indicative of future price performance. Information used in the graph was prepared by Zacks Investment Research, Inc. Used with permission. All rights reserved. Copyright 1980–2023. Index Data: Copyright Russell Investments. Used with permission. All rights reserved.
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HOLDERS On November 22, 2023, the number of holders of record of our common stock was 259. 63 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. DIVIDEND POLICY We intend to pay quarterly cash dividends on our common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changePLANT NUTRITION RESULTS Twelve Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2021 September 30, 2020 Plant Nutrition Sales (in millions) $ 222.3 $ 235.0 $ 156.8 $ 137.2 Plant Nutrition Operating Earnings (in millions) $ 37.1 $ 9.1 $ 5.8 $ 12.0 Plant Nutrition Sales Volumes (thousands of tons) 286 403 261 238 Plant Nutrition Average Sales Price (per ton) $ 777 $ 583 $ 602 $ 577 PLANT NUTRITION RESULTS COMMENTARY: Twelve Months Ended September 30, 2021 – Twelve Months Ended September 30, 2022 • Plant Nutrition sales decreased 5%, or $12.7 million, due to lower sales volumes, which was partially offset by higher average sales prices. • Plant Nutrition sales volumes decreased 29%, or 117,000 tons, as feedstock inconsistencies over the past year have reduced production volumes and available inventory levels.
Biggest changePLANT NUTRITION RESULTS COMMENTARY: Twelve Months Ended September 30, 2022 – Twelve Months Ended September 30, 2021 • Plant Nutrition sales decreased 5%, or $12.7 million, due to lower sales volumes, which was partially offset by higher average sales prices. • Plant Nutrition sales volumes decreased 29%, or 117,000 tons, as feedstock inconsistencies in the twelve months ended September 30, 2022 have reduced production volumes and available inventory levels.
Investing Activities: Net cash flows used in investing activities were $80.0 million. »Net cash flows used in investing activities included $96.7 million of capital expenditures. »Investing activity outflows were partially offset by proceeds of $61.2 million from the sale of our South America specialty chemicals business and specialty plant nutrition earnout. »Included investments in equity method investees of $46.3 million. »Net cash flows provided by investing activities included proceeds of $348.6 million from the sale of our South America specialty plant nutrition business ($289.5 million), a component of our North America micronutrient business ($56.2 million) and our Fermavi investment ($2.9 million). »Investing proceeds were offset by $71.8 million of capital expenditures.
Net cash flows used in investing activities were $80.0 million. »Net cash flows used in investing activities included $96.7 million of capital expenditures. »Investing activity outflows were partially offset by proceeds of $61.2 million from the sale of our South America specialty chemicals business and specialty plant nutrition earnout. »Included investments in equity method investees of $46.3 million. »Net cash flows provided by investing activities included proceeds of $348.6 million from the sale of our South America specialty plant nutrition business ($289.5 million), a component of our North America micronutrient business ($56.2 million) and our Fermavi investment ($2.9 million). »Investing proceeds were offset by $71.8 million of capital expenditures.
We expect to meet the ongoing requirements for debt service, any declared dividends and capital expenditures related to our Salt and Plant Nutrition businesses from these sources. This, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control.
We expect to meet the ongoing requirements for debt service, any declared dividends and capital expenditures related to our Salt, Plant Nutrition and Fortress businesses from these sources. This, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control.
Net (Loss) Earnings from Discontinued Operations: Increased from a loss of $220.8 million to income of $12.2 million • The net earnings from our discontinued operations for the twelve months ended September 30, 2022 includes only the results from our chemicals business in South America through the April 20, 2022 sale date, but includes the results of all the South America businesses and the North America specialty plant nutrition business for the twelve months ended September 30, 2022. • The current period results of the South America chemicals business includes a foreign currency exchange rate gain of $17.5 million offset by an impairment loss of $23.1 million compared to the prior period foreign currency exchange rate gain of $11.3 million and net impairment loss of $269.4 million to record the net assets of the South America businesses at their fair value less cost to sell net of a gain on the sale of the Plant Nutrition micronutrient business.
Net (Loss) Earnings from Discontinued Operations: Increased from a loss of $220.8 million to income of $12.2 million • The net earnings from our discontinued operations for the twelve months ended September 30, 2022 includes only the results from our chemicals business in South America through the April 20, 2022 sale date, but includes the results of all the South America businesses and the North America specialty plant nutrition business for the twelve months ended September 30, 2021. • The twelve months ended September 30, 2022 results of the South America chemicals business includes a foreign currency exchange rate gain of $17.5 million offset by an impairment loss of $23.1 million compared to the prior period foreign currency exchange rate gain of $11.3 million and net impairment loss of $269.4 million to record the net assets of the South America businesses at their fair value less cost to sell net of a gain on the sale of the Plant Nutrition micronutrient business.
COMPANY OVERVIEW Compass Minerals is a leading provider of essential minerals focused on safely delivering where and when it matters to help solve nature’s challenges for customers and communities. Our Salt segment products help keep roadways safe during winter weather and are used in numerous other consumer, industrial and agricultural applications.
COMPANY OVERVIEW Compass Minerals is a leading global provider of essential minerals focused on safely delivering where and when it matters to help solve nature’s challenges for customers and communities. Our Salt segment products help keep roadways safe during winter weather and are used in numerous other consumer, industrial, chemical and agricultural applications.
While our equipment and facilities are generally not impacted by rapid technology changes, our operations require refurbishments and replacements to maintain structural integrity and reliable production and shipping capabilities. When possible, we incorporate efficiency, environmental and safety improvement capabilities into our routine capital projects and we plan the timing of larger projects to balance with our liquidity and capital resources.
While our equipment and facilities are generally not impacted by rapid technology changes, our operations require refurbishments and replacements to maintain structural integrity and reliable production and shipping capabilities. When possible, we incorporate efficiency, environmental and safety improvements into our routine capital projects and we plan the timing of larger projects to balance with our liquidity and capital resources.
If supplemental benefits were approved and granted under the provisions of the plan, or if periodic statutory valuations cause a change in funding requirements, our contributions could increase to fund all or a portion of those benefits. See Item 8, Note 11 to our Consolidated Financial Statements for additional discussion of our U.K. pension plan.
If supplemental benefits were approved and granted under the provisions of the plan, or if periodic statutory valuations cause a change in funding requirements, our contributions could increase to fund all or a portion of those benefits. See Item 8, Note 12 to our Consolidated Financial Statements for additional discussion of our U.K. pension plan.
As a result, we are presenting two reportable segments, Salt and Plant Nutrition (which was previously known as the Plant Nutrition North America segment) in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” See Item 8, Note 14 to our Consolidated Financial Statements for more information.
As a result, we are presenting two reportable segments, Salt and Plant Nutrition (which was previously known as the Plant Nutrition North America segment) in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” See Item 8, Note 15 to our Consolidated Financial Statements for more information.
In July 2021, we utilized cash proceeds from the sales of our South America specialty plant nutrition business and North America micronutrient business noted above in Dispositions to repay amounts borrowed against our revolving credit facility of $35.0 million. An additional $265.0 million of proceeds was utilized to pay down our term loan balance.
In July 2021, we utilized cash proceeds from the sales of our South America specialty plant nutrition business and North America micronutrient business noted below in Dispositions to repay amounts borrowed against our revolving credit facility of $35.0 million. An additional $265.0 million of proceeds was utilized to pay down our term loan balance.
GAAP financial measures, such as gross profit, net earnings and cash flows generated by operating activities, management uses EBITDA and Adjusted EBITDA. We have presented Adjusted EBITDA for both continuing operations and consolidated including discontinued operations for comparative purposes (see Item 8, Note 3 to our Consolidated Financial Statements for a discussion of discontinued operations).
GAAP financial measures, such as gross profit, net earnings and cash flows generated by operating activities, management uses EBITDA and Adjusted EBITDA. We have presented Adjusted EBITDA for both continuing operations and consolidated including discontinued operations for comparative purposes (see Item 8, Note 4 to our Consolidated Financial Statements for a discussion of discontinued operations).
See Item 1, Note 10 to the Consolidated Financial Statements. • Our income tax provision in both periods differs from the U.S. statutory rate primarily due to U.S. statutory depletion, state income taxes, nondeductible executive compensation, foreign income, mining and withholding taxes and interest expense recognition differences for tax and financial reporting purposes.
See Item 1, Note 11 to the Consolidated Financial Statements. • Our income tax provision in both periods differs from the U.S. statutory rate primarily due to U.S. statutory depletion, state income taxes, nondeductible executive compensation, foreign income, mining and withholding taxes and interest expense recognition differences for tax and financial reporting purposes.
Historically, our working capital requirements have been the highest in the first fiscal quarter (ending December 31) and lowest in the third fiscal quarter (ending June 30). When needed, we may fund short-term working capital requirements by accessing our $300 million revolving credit facility and our $100 million revolving accounts receivable financing facility (our “AR Facility”).
Historically, our working capital requirements have been the highest in the first fiscal quarter (ending December 31) and lowest in the third fiscal quarter (ending June 30). When needed, we may fund short-term working capital requirements by accessing our $375 million revolving credit facility and our $100 million revolving accounts receivable financing facility (our “AR Facility”).
The Brazilian debt was deducted from gross proceeds from the transaction. The terms of the definitive agreement provided for an additional earnout payment of up to R$88 million Brazilian reais. On April 7, 2022, we received the maximum earnout possible under the terms of the sale, of $18.5 million based on exchange rates at the time.
The Brazilian debt was deducted from gross proceeds from the transaction. The terms of the definitive agreement provided for an additional earnout payment of up to R$88 million Brazilian reais. On April 7, 2022, we received the maximum earnout possible of $18.5 million based on exchange rates at the time.
See Item 8, Note 10 to our Consolidated Financial Statements for further discussion of our income taxes. We have elected to account for GILTI in the year the tax is incurred, rather than recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years.
See Item 8, Note 11 to our Consolidated Financial Statements for further discussion of our income taxes. We have elected to account for GILTI in the year the tax is incurred, rather than recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years.
See Item 8, Note 12 to our Consolidated Financial Statements for a discussion of our outstanding debt. Historically, our cash flows from operating activities have generally been adequate to fund our basic operating requirements, ongoing debt service and sustaining investment in our property, plant and equipment.
See Item 8, Note 13 to our Consolidated Financial Statements for a discussion of our outstanding debt. Historically, our cash flows from operating activities have generally been adequate to fund our basic operating requirements, ongoing debt service and sustaining investment in our property, plant and equipment.
Notwithstanding our strategic decision to exit our South America chemicals and specialty plant nutrition businesses, as discussed in Item 8, Note 1 and Note 3 to our Consolidated Financial statements, we have historically considered the undistributed earnings of our foreign subsidiaries to be permanently reinvested.
Notwithstanding our strategic decision to exit our South America chemicals and specialty plant nutrition businesses, as discussed in Item 8, Note 1 and Note 4 to our Consolidated Financial statements, we have historically considered the undistributed earnings of our foreign subsidiaries to be permanently reinvested.
In April 2022, we utilized earnout proceeds from the fiscal 2021 sale of our South America specialty plant nutrition business and proceeds from the sale of our South America chemicals business, both discussed in Dispositions above, to repay approximately $60.6 million of our term loan balance.
In April 2022, we utilized earnout proceeds from the fiscal 2021 sale of our South America specialty plant nutrition business and proceeds from the sale of our South America chemicals business, both discussed in Dispositions below, to repay approximately $60.6 million of our term loan balance.
Adjusted EBITDA also includes other non-operating income, primarily non-cash stock-based compensation expense, foreign exchange gains (losses) resulting from the translation of intercompany obligations, interest income and investment income (loss) relating to our nonqualified retirement plan.
Adjusted EBITDA also excludes other non-operating income, primarily non-cash stock-based compensation expense, foreign exchange gains (losses) resulting from the translation of intercompany obligations, interest income and investment income (loss) relating to our nonqualified retirement plan.
Net Loss in Equity Investees: Increased $4.7 million to $5.2 million • We realized a net loss in equity investees of $5.2 million for the twelve months ended September 30, 2022 compared to $0.5 million in the comparable period for the prior year due to our share of losses related to our equity investments in the current period.
Net Loss in Equity Investees: Increased $4.7 million to $5.2 million • We realized a net loss in equity investees of $5.2 million for the twelve months ended September 30, 2022 compared to $0.5 million in the comparable period due to our share of losses related to our equity investments in the period ended September 30, 2022.
As of September 30, 2022, we had $21.0 million of cash and cash equivalents (in our Consolidated Balance Sheets) that was either held directly or indirectly by foreign subsidiaries. Due in large part to the seasonality of our deicing salt business, we have experienced large changes in our working capital requirements from quarter to quarter.
As of September 30, 2023, we had $20.0 million of cash and cash equivalents (in our Consolidated Balance Sheets) that was either held directly or indirectly by foreign subsidiaries. Due in large part to the seasonality of our deicing salt business, we have experienced large changes in our working capital requirements from quarter to quarter.
Drought or flood conditions could similarly impact demand for our SOP products, as well as continue to impact the amount and quality of feedstock used to produce SOP at our Ogden facility due to changes in brine levels, mineral concentrations or other factors, which could have a material impact on our Plant Nutrition results of operations.
Drought or excessive precipitation could similarly impact demand for our SOP products, as well as continue to impact the amount and quality of feedstock used to produce SOP at our Ogden facility due to changes in brine levels, mineral concentrations or other factors, which could have a material impact on our Plant Nutrition results of operations.
A decrease of 25 basis points in our discount rate would have increased our projected benefit obligation as of September 30, 2022, by approximately $1.0 million and would increase our net periodic pension expense for 2022 by approximately $0.1 million.
A decrease of 25 basis points in our discount rate would have increased our projected benefit obligation as of September 30, 2023, by approximately $0.9 million and would increase our net periodic pension expense for 2023 by approximately $0.1 million.
We have also used cash generated from operations to fund capital expenditures which strengthen our operational position, to pay dividends, to fund smaller acquisitions and to repay our debt. We have been able to manage our cash flows generated and used across Compass Minerals to permanently reinvest earnings in our foreign jurisdictions or efficiently repatriate those funds to the U.S.
We have also used cash generated from operations to fund capital expenditures, pay dividends, fund smaller acquisitions and repay our debt. We have been able to manage our cash flows generated and used across Compass Minerals to permanently reinvest earnings in our foreign jurisdictions or efficiently repatriate those funds to the U.S.
In fiscal 2020 and 2021, the average rate for the U.S. dollar weakened against the Canadian dollar and the British pound sterling. In fiscal 2022, the average rate for the U.S. dollar strengthened against the Canadian dollar and the British pound sterling.
In fiscal 2023 and 2021, the average rate for the U.S. dollar weakened against the Canadian dollar and the British pound sterling. In fiscal 2022, the average rate for the U.S. dollar strengthened against the Canadian dollar and the British pound sterling.
As a result, our results of operations, cash flows and all transactions impacting shareholders equity presented in this Annual Report on Form 10-K are for the twelve months ended September 30, 2022 (“fiscal 2022”), the nine month transition period ended September 30, 2021 (“fiscal 2021”) and the twelve months ended December 31, 2020 (“fiscal 2020”), unless otherwise noted.
As a result, our results of operations, cash flows and all transactions impacting shareholders equity presented in this Annual Report on Form 10-K are for the twelve months ended September 30, 2023 (“fiscal 2023”), the twelve months ended September 30, 2022 (“fiscal 2022”) and the nine month transition period ended September 30, 2021 (“fiscal 2021”) unless otherwise noted.
We consider all remaining non-U.S. earnings to be permanently reinvested outside the U.S. to the extent these earnings are not subject to U.S. income tax under an anti-deferral tax regime. As of September 30, 2022, we have approximately $147.5 million of outside basis differences on which no deferred taxes have been recorded. U.K.
We consider all remaining non-U.S. earnings to be permanently reinvested outside the U.S. to the extent these earnings are not subject to U.S. income tax under an anti-deferral tax regime. As of September 30, 2023, we have approximately $194.9 million of outside basis differences on which no deferred taxes have been recorded. U.K.
We are experiencing increases in logistics costs, prices for energy and other costs that have only been partially recovered through price increases for our products.
We have experienced increases in logistics costs, prices for energy and other costs that have only been partially recovered through price increases for our products.
Income Tax Expense from Continuing Operations: Increased $29.2 million to $35.0 million • The increase in income tax expense was due to a $37.5 million of valuation allowance recorded in the twelve months ended September 30, 2022 against the portion of our deferred tax assets that are no longer considered more likely than not to be realized, partially offset by a decrease due to lower pretax book income for the twelve months ended September 30, 2022 compared to the twelve months ended September 30, 2021. 66 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. • Our effective tax rate decreased from 14% for the twelve months ended September 30, 2021, reflecting $37.5 million of valuation allowance recorded in fiscal 2022 on pretax book losses.
Income Tax Expense from Continuing Operations: Increased $29.2 million to $35.0 million • The increase in income tax expense was due to a $37.5 million of valuation allowance recorded in the twelve months ended September 30, 2022 against the portion of our deferred tax assets that are no longer considered more likely than not to be realized, partially offset by a decrease due to lower pretax book income for the twelve months ended September 30, 2022 compared to the twelve months ended September 30, 2021. • Our effective tax rate decreased from 14% for the twelve months ended September 30, 2021, reflecting $37.5 million of valuation allowance recorded in fiscal 2022 on pretax book losses.
Refer to Item 8, Note 13 for additional details. Reconciliation of Net (Loss) Earnings from Continuing Operations to EBITDA and Adjusted EBITDA Management uses a variety of measures to evaluate our performance.
Refer to Item 8, Note 3 for additional information. Reconciliation of Net Earnings (Loss) from Continuing Operations to EBITDA and Adjusted EBITDA Management uses a variety of measures to evaluate our performance.
A decrease of 25 basis points in our expected return on assets assumption as of September 30, 2022, would increase our net periodic expense for 2022 by approximately $0.3 million.
A decrease of 25 basis points in our expected return on assets assumption as of September 30, 2023, would increase our net periodic expense for 2023 by approximately $0.1 million.
As of September 30, 2022, we operate 12 production and packaging facilities with nearly 2,000 personnel throughout the U.S., Canada and the U.K , including: • The largest rock salt mine in the world in Goderich, Ontario, Canada; • The largest dedicated rock salt mine in the U.K. in Winsford, Cheshire; • A solar evaporation facility located near Ogden, Utah, which is both the largest sulfate of potash specialty fertilizer production site and the largest solar salt production site in the Western Hemisphere; and • Several mechanical evaporation facilities producing consumer and industrial salt.
As of September 30, 2023, we operate 12 production and packaging facilities with nearly 2,000 personnel throughout the U.S., Canada and the U.K , including: • The largest rock salt mine in the world in Goderich, Ontario, Canada; • The largest dedicated rock salt mine in the U.K. in Winsford, Cheshire; • A solar evaporation facility located near Ogden, Utah, which is both the largest sulfate of potash specialty fertilizer production site and the largest solar salt production site in the Western Hemisphere and the source of the lithium salt resource that we intend to develop; and • Several mechanical evaporation facilities producing consumer and industrial salt.
The majority of revenues and costs are denominated in U.S. dollars, with Canadian dollars and British pounds sterling also being significant. We generated 26% of our fiscal 2022 sales in foreign currencies, and we incurred 25% of our fiscal 2022 total operating expenses in foreign currencies. Additionally, we have approximately $400 million of net assets denominated in foreign currencies.
The majority of revenues and costs are denominated in U.S. dollars, with Canadian dollars and British pounds sterling also being significant. We generated 27% of our fiscal 2023 sales in foreign currencies, and we incurred 28% of our fiscal 2023 total operating expenses in foreign currencies. Additionally, we have approximately $400 million of net assets denominated in foreign currencies.
We are experiencing higher freight costs and inflationary pressures for certain materials and supplies that were not recovered through increased sales prices during the period. The Company estimates increased Salt product cost of approximately $15.5 million to $17.5 million during fiscal 2022 due to inflation impacts.
We experienced higher freight costs and inflationary pressures for certain materials and supplies that were not recovered through increased sales prices during the period. We estimate increased Salt product cost of approximately $15.5 million to $17.5 million during fiscal 2022 due to inflation impacts.
Refer to Item 1, Note 3 to the Consolidated Financial Statements for additional details.
Refer to Item 1, Note 4 to the Consolidated Financial Statements for additional details.
Climate change or governmental initiatives to address climate change may necessitate capital expenditures in the future, although capital expenditures for climate-related projects were not material in fiscal 2022 and are not expected to be material in fiscal 2023.
Climate change or governmental initiatives to address climate change may affect our operations and necessitate capital expenditures in the future, although capital expenditures for climate-related projects were not material in fiscal 2023 and are not expected to be material in fiscal 2024.
CONSOLIDATED RESULTS COMMENTARY: Twelve Months Ended September 30, 2021 – Twelve Months Ended September 30, 2022 • Total sales increased $98.3 million, due to an increase in the Salt segment, which was partially offset by a decrease in the Plant Nutrition segment. • Operating earnings decreased 60%, or $64.2 million, due to lower operating earnings in our Salt segment and higher corporate expenses, which was partially offset by higher Plant Nutrition segment earnings. • Diluted earnings per share decreased $2.10 to a loss of $1.10. • EBITDA* adjusted for items management believes are not indicative of our ongoing operating performance (“Adjusted EBITDA”)* decreased 22%, or $52.3 million. 64 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC.
CONSOLIDATED RESULTS COMMENTARY: Twelve Months Ended September 30, 2022 – Twelve Months Ended September 30, 2021 • Total sales increased $98.3 million, due to an increase in the Salt segment, which was partially offset by a decrease in the Plant Nutrition segment. • Operating earnings decreased 60%, or $64.2 million, due to lower operating earnings in our Salt segment and higher corporate expenses, which was partially offset by higher Plant Nutrition segment earnings. • Diluted earnings per share decreased $2.10 to a loss of $1.10. • Adjusted EBITDA decreased 22%, or $52.3 million. 67 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC.
The discussion below provides a comparison of (1) the twelve months ended September 30, 2022 to the twelve months ended September 30, 2021 and (2) the nine months ended September 30, 2021 to the nine-month period ended September 30, 2020. All information for the twelve months ended September 30, 2021 and the nine-month period ended September 30, 2020 is unaudited.
The discussion below provides a comparison of (1) the twelve months ended September 30, 2023 to the twelve months ended September 30, 2022 and (2) the twelve months ended September 30, 2022 to the twelve ended September 30, 2021. All information for the twelve months ended September 30, 2021 is unaudited.
Upon closing we recorded gross proceeds of approximately $421.1 million, including a reduction in proceeds of $6.2 million in working capital adjustments 72 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. which were finalized during the third quarter of fiscal 2021 and associated selling costs of $8.4 million, comprised of a cash payment of approximately $318.4 million and an additional $102.7 million in net debt assumed by ICL Brasil Ltd.
Upon closing we recorded gross proceeds of approximately $421.1 million, including a reduction in proceeds of $6.2 million in working capital adjustments which were finalized during the third quarter of fiscal 2021 and associated selling costs of $8.4 million, comprised of a cash payment of approximately $318.4 million and an additional $102.7 million in net debt assumed by ICL Brasil Ltd.
GROSS PROFIT & GROSS MARGIN COMMENTARY: Twelve Months Ended September 30, 2021 – Twelve Months Ended September 30, 2022 Gross Profit: Decreased 15%, or $33.4 million; Gross Margin decreased 4% percentage points from 20% to 16% • Salt segment gross profit decreased $59.7 million primarily due to higher per-unit logistics and product costs, which were partially offset by higher sales volumes (see “—Operating Segment Performance—Salt” for additional information). 65 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. • Gross profit for the Plant Nutrition segment increased $26.3 million due to higher average sales prices, which were partially offset by lower sales volumes and higher per-unit product costs (see “—Operating Segment Performance—Plant Nutrition” for additional information).
GROSS PROFIT & GROSS MARGIN COMMENTARY: Twelve Months Ended September 30, 2022 – Twelve Months Ended September 30, 2021 Gross Profit: Decreased 15%, or $33.4 million; Gross Margin decreased 4% from 20% to 16% • Salt segment gross profit decreased $59.7 million primarily due to higher per-unit logistics and product costs, which were partially offset by higher sales volumes (see “—Operating Segment Performance—Salt” for additional information). • Gross profit for the Plant Nutrition segment increased $26.3 million due to higher average sales prices, which were partially offset by lower sales volumes and higher per-unit product costs (see “—Operating Segment Performance—Plant Nutrition” for additional information).
OTHER EXPENSES AND INCOME COMMENTARY: Twelve Months Ended September 30, 2021 – Twelve Months Ended September 30, 2022 SG&A: Increased $30.8 million; Increased 1.7 percentage points as a percentage of sales to 12.4% from 10.7% • The increase in SG&A expense was primarily due to the fiscal 2022 accrued settlement and increased legal expenses related to the recently completed SEC investigation, costs related to our lithium development and increased employee compensation costs which include executive transition costs.
OTHER EXPENSES AND INCOME COMMENTARY: Twelve Months Ended September 30, 2022 – Twelve Months Ended September 30, 2021 SG&A: Increased $30.8 million; Increased 1.7 percentage points as a percentage of sales to 12.4% from 10.7% • The increase in SG&A expense was primarily due to the fiscal 2022 accrued settlement and increased legal expenses related to the settled SEC investigation, costs related to our lithium development and increased employee compensation costs which include executive transition costs. 69 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC.
We believe these dispositions were conducted through a single disposal plan representing a strategic shift that has had a material effect on our operations and financial results. Consequently, the Specialty Businesses qualify for presentation as assets and liabilities held for sale and discontinued operations in accordance with U.S. GAAP.
We believe these dispositions were conducted through a single disposal plan representing a strategic shift that has had a material effect on our operations and financial results. Consequently, the Specialty Businesses qualify for presentation as discontinued operations in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”).
Fiscal Year Ended Nine Months Ended Fiscal Year Ended September 30, 2022 September 30, 2021 December 31, 2020 Operating Activities: Net cash flows provided by operating activities were $120.5 million. »Net losses were $25.1 million. »Non-cash depreciation and amortization expense was $113.7 million. »Non-cash impairment loss was $23.1 million. »Non-cash stock-based compensation was $15.7 million. »Non-cash net loss in equity investees was $5.2 million. »Non-cash loss on disposition of assets was $3.7 million. »Working capital items were a use of operating cash flows of $9.4 million.
Net cash flows provided by operating activities were $120.5 million. »Net losses were $25.1 million. »Non-cash depreciation and amortization expense was $113.7 million. »Non-cash impairment loss was $23.1 million. »Non-cash stock-based compensation was $15.7 million. »Non-cash net loss in equity investees was $5.2 million. »Non-cash loss on disposition of assets was $3.7 million. »Working capital items were a use of operating cash flows of $9.4 million.
Additionally, as a result of a maintenance outage at our Cote Blanche mine during the three months ended March 31, 2022, we incurred approximately $9.2 million of additional product and logistics costs to fulfill seasonal demand with salt from other sources.
Additionally, as a result of a maintenance outage at our Cote Blanche mine during the three months ended March 31, 2022, we incurred approximately $9.2 71 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. million of additional product and logistics costs to fulfill seasonal demand with salt from other sources.
As of September 30, 2022, we have $147.5 million of outside basis differences for which no deferred taxes have been recorded. See Item 8, Note 10 to our Consolidated Financial Statements for additional information.
As of September 30, 2023, we have $194.9 million of outside basis differences for which no deferred taxes have been recorded. See Item 8, Note 11 to our Consolidated Financial Statements for additional information.
Our fiscal 2022 and 2021 results were unfavorably impacted by winter weather activity as compared to an average winter in the markets we serve. 75 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. Management’s Discussion of Critical Accounting Policies and Estimates The preparation of the consolidated financial statements in conformity with U.S.
Our fiscal 2023, 2022 and 2021 results were unfavorably impacted by winter weather activity as compared to an average winter in the markets we serve. Management’s Discussion of Critical Accounting Policies and Estimates The preparation of the consolidated financial statements in conformity with U.S.
While our consolidated financial statements, taken as a whole, provide an understanding of our overall results of operations, financial condition and cash flows, we analyze 74 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. components of the consolidated financial statements to identify certain trends and evaluate specific performance areas. In addition to using U.S.
While our consolidated financial statements, taken as a whole, provide an understanding of our overall results of operations, financial condition and cash flows, we analyze components of the consolidated financial statements to identify certain trends and evaluate specific performance areas. In addition to using U.S.
When we have not been able to meet our short-term liquidity or capital needs with cash from operations, whether as a result of the seasonality of our business or other causes, we have met those needs with borrowings under our revolving credit facility.
When we have not been able to meet our short-term liquidity or capital needs with cash from operations, whether 73 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. as a result of the seasonality of our business or other causes, we have met those needs with borrowings under our revolving credit facility.
Upon closing of the all-cash sale, we received gross proceeds of approximately $51.5 million based on exchange rates at the time of receipt, including a post-closing adjustment and compensation for $6.4 million cash on hand that transferred to the buyer.
Upon closing of the all-cash sale, we received gross proceeds of approximately $51.5 million based on exchange rates at the time of receipt, including a post-closing adjustment and compensation for $6.4 million cash on hand that transferred to the 77 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. buyer.
Based on all available evidence, both positive and negative, the reliability of that evidence and the extent such evidence can be objectively verified, we determine whether it is more likely than not that all, or a portion of, the deferred tax assets will be realized.
Based on all available evidence, both positive and negative, the reliability of that evidence and the extent such evidence can be objectively verified, we determine whether it is more likely than not that all, or a portion of, the deferred tax assets will be realized. 80 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC.
For more information, see Item 1A, “Risk Factors.” On October 18, 2022, the Company received aggregate gross proceeds of approximately $252 million from Koch Minerals & Trading, LLC (“KM&T”) as part of a strategic equity partnership.
For more information, see Item 1A, “Risk Factors.” On October 18, 2022, we received aggregate net proceeds of approximately $240.7 million, net of transaction costs, from Koch Minerals & Trading, LLC (“KM&T”) as part of a strategic equity partnership.
We must also comply with the terms of our indentures governing our 4.875% Senior Notes due July 2024 (the “4.875% Notes”) and our 6.75% Senior Notes due December 2027 (the “6.75% Notes), which limit the amount of dividends we can pay to our stockholders. We are in compliance with our debt covenants as of September 30, 2022.
We must also comply with the terms of our indentures governing our 6.75% Senior Notes due December 2027 (the “6.75% Notes), which limits the amount of dividends we can pay to our stockholders. We are in compliance with our debt covenants as of September 30, 2023.
This Annual Report on Form 10-K also includes an unaudited Consolidated Statement of Operations for the comparable twelve month period of October 1, 2020 to September 30, 2021 and nine month period of January 1, 2020 to September 30, 2020; see Item 8, Note 19 to our Consolidated Financial Statements for additional information.
As such, our fiscal 2023 refers to the period from October 1, 2022 to September 30, 2023. This Annual Report on Form 10-K also includes an unaudited Consolidated Statement of Operations for the comparable twelve month period of October 1, 2020 to September 30, 2021; see Item 8, Note 21 to our Consolidated Financial Statements for additional information.
Therefore, our results of operations are subject to both currency transaction risk and currency translation risk. We incur currency transaction risk whenever we or one of our subsidiaries enter into either a purchase or sales transaction using a currency other than the local currency of the 77 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. transacting entity.
Therefore, our results of operations are subject to both currency transaction risk and currency translation risk. We incur currency transaction risk whenever we or one of our subsidiaries enter into either a purchase or sales transaction using a currency other than the local currency of the transacting entity.
Twelve Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2021 September 30, 2020 Net (loss) earnings from continuing operations $ (37.3) $ 35.6 $ 20.9 $ 27.9 Interest expense 55.2 59.8 44.3 47.2 Income tax expense 35.0 5.8 14.2 10.3 Depreciation, depletion and amortization 113.7 119.9 89.8 87.7 EBITDA from continuing operations 166.6 221.1 169.2 173.1 Adjustments to EBITDA from continuing operations: Stock-based compensation - non cash 15.7 9.2 7.1 6.9 (Gain) loss on foreign exchange (14.9) 5.6 (0.6) (10.8) Executive transition costs (a) 4.3 — — — Accrued loss and legal costs related to SEC investigation (b) 17.1 5.0 3.4 — Other (income) expense, net (0.3) (0.1) (0.3) 0.2 Adjusted EBITDA from continuing operations 188.5 240.8 178.8 169.4 Adjusted EBITDA from discontinued operations 19.0 51.9 26.2 38.5 Adjusted EBITDA including discontinued operations $ 207.5 $ 292.7 $ 205.0 $ 207.9 (a) We incurred severance and other costs related to executive transition.
Twelve Months Ended September 30, 2023 September 30, 2022 September 30, 2021 Net earnings (loss) from continuing operations $ 15.5 $ (37.3) $ 35.6 Interest expense 55.5 55.2 59.8 Income tax expense 17.4 35.0 5.8 Depreciation, depletion and amortization 98.6 113.7 119.9 EBITDA from continuing operations 187.0 166.6 221.1 Adjustments to EBITDA from continuing operations: Stock-based compensation - non cash 20.6 15.7 9.2 Interest income (5.3) (0.8) (0.3) Loss (gain) on foreign exchange 2.3 (14.9) 5.6 Gain from remeasurement of equity method investment (13.7) — — Executive transition costs (a) — 4.3 — Restructuring charges (b) 5.9 — — Accrued loss and legal costs related to SEC investigation (c) (0.3) 17.1 5.0 Other, net 4.3 0.5 0.2 Adjusted EBITDA from continuing operations 200.8 188.5 240.8 Adjusted EBITDA from discontinued operations — 19.0 51.9 Adjusted EBITDA including discontinued operations $ 200.8 $ 207.5 $ 292.7 (a) We incurred severance and other costs related to executive transition.
These assumptions require significant judgment about material 76 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. estimates, assumptions and uncertainties in connection with the forecasts of future taxable income, the merits in tax law and assessments regarding previous taxing authorities’ proceedings or written rulings.
These assumptions require significant judgment about material estimates, assumptions and uncertainties in connection with the forecasts of future taxable income, the merits in tax law and assessments regarding previous taxing authorities’ proceedings or written rulings.
Net cash flows used in financing activities were $439.6 million. »Included payments of dividends of $73.1 million. »Net payments on our debt of $365.8 million.
Net cash flows used in financing activities were $14.3 million. »Included payments of dividends of $20.8 million. »Net proceeds from the issuance of debt of $9.9 million. Net cash flows used in financing activities were $439.6 million. »Included payments of dividends of $73.1 million. »Net payments on our debt of $365.8 million.
In the future, including in fiscal 2023, we may borrow amounts under the revolving credit facility or enter into additional financing to fund our working capital requirements, potential acquisitions and capital expenditures and for other general corporate purposes.
See Item 8, Note 13 to our Consolidated Financial Statements for more information. In the future, including in fiscal 2024, we may borrow amounts under the revolving credit facility or enter into additional financing to fund our working capital requirements, potential acquisitions and capital expenditures and for other general corporate purposes.
We test goodwill more frequently if an impairment indicator is present. The quantitative impairment test requires judgment, including the identification of reporting units and the determination of fair value of each reporting unit. We determine the estimated fair value for each reporting unit based on discounted cash flow projections (income approach) and market values for comparable businesses (market approach).
The quantitative impairment test under ASC Topic 350 requires judgment, including the identification of reporting units and the determination of fair value of each reporting unit. We determine the estimated fair value for each reporting unit based on discounted cash flow projections (income approach) and market values for comparable businesses (market approach).
As of September 30, 2022, the fair value of the plan’s assets are in excess of the accumulated benefit obligations and we expect to be required to use cash from operations above our historical levels to fund the plan in the future.
Generally, our cash funding policy is to make the minimum annual contributions required by applicable regulations. As of September 30, 2023, the fair value of the plan’s assets are in excess of the accumulated benefit obligations and we expect to be required to use cash from operations above our historical levels to fund the plan in the future.
See Item 8, Note 11 for information related to these plans. In addition, we have other future contingent commitments of approximately $208.6 million, consisting of letters of credit and performance bonds, due during fiscal 2023. At September 30, 2022, we had $195.0 million of outstanding performance bonds, which includes bonds related to Ontario mining tax reassessments.
In addition, we have other future contingent commitments of approximately $247.8 million, consisting of letters of credit and performance bonds, due during fiscal 2024. At September 30, 2023, we had $232.6 million of outstanding performance bonds, which includes bonds related to Ontario mining tax reassessments. Refer to Item 8, Note 14 for additional details.
Principally due to the nature of our deicing business, our cash flows from operations have historically been seasonal, with the majority of our cash flows from operations generated during the first half of the calendar year (see “—Seasonality” for more 70 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. information).
Capital Allocation Principally due to the nature of our deicing business, our cash flows from operations have historically been seasonal, with the majority of our cash flows from operations generated during the first half of the calendar year (see “—Seasonality” for more information).
Other Significant Accounting Policies – Other significant accounting policies not involving the same level of measurement uncertainties as those discussed above are nevertheless important to an understanding of our consolidated financial statements.
Other Significant Accounting Policies – Other significant accounting policies not involving the same level of measurement uncertainties as those discussed above are nevertheless important to an understanding of our consolidated financial statements. 81 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC.
On March 16, 2021, our Board of Directors approved a plan to sell our South America chemicals and specialty plant nutrition businesses, our investment in Fermavi and our North America micronutrient product business (collectively, the “Specialty Businesses”) with the goal of reducing our leverage and enabling increased focus on optimizing our core businesses.
Discontinued Operations On March 16, 2021, our Board of Directors approved a plan to sell our South America chemicals and specialty plant nutrition businesses, our investment in Fermavi and our North America micronutrient product business (collectively, the “Specialty Businesses”) with the goal of reducing our leverage and enabling increased focus on optimizing our core businesses and as described further in Item 8, Note 1 and Note 4 to our Consolidated Financial Statements, we subsequently sold our South America specialty plant nutrition business, a component of our North America micronutrient business, our Fermavi investment and our South America chemicals business, respectively.
As discussed in Item 8, Note 12 to our Consolidated Financial Statements, at September 30, 2022, we had $955.9 million of outstanding indebtedness consisting of $250.0 million under our 4.875% Notes, $500.0 million under our 6.75% Notes, $168.4 million of borrowings outstanding under our senior secured credit facilities (consisting of term loans and a revolving credit facility), including $151.5 million borrowed against our revolving credit facility.
As discussed in Item 8, Note 13 to our Consolidated Financial Statements, at September 30, 2023, we had $811.2 million of outstanding indebtedness consisting of $500.0 million under our 6.75% Notes, $280.3 million of borrowings outstanding under our senior secured credit facilities (consisting of a term loan and a revolving credit facility), including $81.5 million borrowed against our revolving credit facility.
(b) We recorded a settlement loss accrual during the twelve months ended September 30, 2022, and recognized costs, net of reimbursements, related to the recently completed SEC investigation during each of the twelve and nine months ended September 30, 2022 and 2021 .
(b) We incurred severance and related charges related to a reduction of its workforce. (c) We recorded a settlement loss accrual during the twelve months ended September 30, 2022, and recognized costs, net of reimbursements, related to the settled SEC investigation during each of the twelve months ended September 30, 2023, 2022 and 2021 .
OPERATING SEGMENT PERFORMANCE The following financial results represent consolidated financial information with respect to sales from our Salt and Plant Nutrition segments for the twelve months ended September 30, 2022 and 2021 and the nine months ended September 30, 2021 and 2020.
Refer to Item 1, Note 4 to the Consolidated Financial Statements for additional details. OPERATING SEGMENT PERFORMANCE The following financial results represent consolidated financial information with respect to sales from our Salt and Plant Nutrition segments for the fiscal years ended September 30, 2023 and 2022 and the twelve months ended September 30, 2021.
Consolidated Results of Operations * Refer to “—Reconciliation of Net Earnings to EBITDA and Adjusted EBITDA” for a reconciliation to the most directly comparable U.S. GAAP financial measure and the reasons we use this non-U.S. GAAP measure.
Consolidated Results of Operations * Refer to “—Reconciliation of Net Earnings (Loss) from Continuing Operations to EBITDA and Adjusted EBITDA” for a reconciliation to the most directly comparable U.S. GAAP financial measure and the reasons we use this non-U.S. GAAP measure. 66 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC.
However, we have made special payments during some years when changes in the business could reasonably impact the pension plan’s available assets and when special early retirement payments or other inducements are made to pensioners.
However, we have made special payments during some years when changes in the business could reasonably impact the pension plan’s available assets and when special early retirement payments or other inducements are made to pensioners. Contributions totaled $0, $0.4 and $0 during the fiscal years ended September 30, 2023 and 2022, and the nine months ended September 30, 2021, respectively.
The amendment included increasing the maximum allowed consolidated total net leverage ratio (defined and calculated under the terms of the Credit Agreement as the ratio of consolidated net debt to consolidated adjusted EBITDA) to 5.5x as of the last day of any quarter through fiscal 2022, stepping down to 5.0x for the subsequent quarter ending December 31, 2022, stepping further down to 4.75x for subsequent quarters through March 31, 2024, and to 4.5x for the fiscal quarter ending June 30, 2024 and thereafter.
Pursuant to the terms of the 2023 Credit Agreement, the maximum allowed consolidated total net leverage ratio (as defined and calculated under the terms of the 2023 Credit Agreement and discussed further below) is 5.0x as of the last day of any quarter through the fiscal quarter ended December 31, 2023, which steps down to 4.75x in the quarter ending March 31, 2024, and to 4.5x for the fiscal quarter ended June 30, 2024 and thereafter.
Investments, Liquidity and Capital Resources Overview As a holding company, CMI’s investments in its operating subsidiaries constitute substantially all of its assets. Consequently, our subsidiaries conduct all of our consolidated operations and own substantially all of our operating assets. The principal source of cash needed to pay our obligations is the cash generated from our subsidiaries’ operations and their borrowings.
Consequently, our subsidiaries conduct all of our consolidated operations and own substantially all of our operating assets. The principal source of cash needed to pay our obligations is the cash generated from our subsidiaries’ operations and their borrowings.
As of our July 1, 2022 annual measurement date, the estimated fair value exceeded carrying value. The most critical assumptions used in the calculation of the fair value are the projected revenue growth rates, long-term operating margin, working capital requirements, terminal growth rates, discount rate, and the selection of market multiples.
The most critical assumptions used in the calculation of the fair value of each reporting unit are the projected revenue growth rates, long-term operating margin, working capital requirements, terminal growth rates, discount rate, and the selection of market multiples.
Interest Expense: Decreased $4.6 million to $55.2 million • The decrease was primarily due to a decrease in outstanding borrowings.
Interest Income: Increased $0.5 million to $0.8 million • The increase in interest income is primarily due to higher interest rates. Interest Expense: Decreased $4.6 million to $55.2 million • The decrease was primarily due to a decrease in outstanding borrowings.
The higher accounts receivable balance as of September 30, 2022, as compared to September 30, 2021, reflects higher sales in the fourth fiscal quarter due to higher preseason deicing demand and higher SOP pricing in the current period.
The higher accounts receivable balance as of September 30, 2022, as compared to September 30, 2021, reflects higher 75 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC. sales in the fourth fiscal quarter due to higher preseason deicing demand and higher SOP pricing in fiscal 2022.
As of September 30, 2022, our consolidated total net leverage ratio was approximately 4.59x. Consolidated total net debt is defined as the aggregate principal amount of debt outstanding, net of unrestricted cash not to exceed $50 million.
The consolidated total net leverage ratio represents the ratio of (a) consolidated total net debt to (b) consolidated adjusted EBITDA. As of September 30, 2023, our consolidated total net leverage ratio was approximately 3.70x. Consolidated total net debt is defined as the aggregate principal amount of debt outstanding, net of unrestricted cash not to exceed $75 million.
At September 30, 2022, we had $94.1 million of gross foreign federal NOL carryforwards and $3.2 million of net operating tax-effected state NOL carryforwards that expire beginning in 2035. Also at September 30, 2022, we had $2.1 million of tax-effected state capital losses that expire beginning in 2027.
At September 30, 2023, we had $65.4 million of gross foreign federal NOL carryforwards and $2.9 million of net operating tax-effected state NOL carryforwards that expire beginning in 2035.
Furthermore, Adjusted EBITDA excludes other cash and non-cash items, including stock-based compensation, (gain) loss on foreign exchange, other (income) expense, net and other infrequent items that management does not consider indicative of normal operations. Our borrowings are a significant component of our capital structure and interest expense is a continuing cost of debt.
Furthermore, Adjusted EBITDA excludes other cash and non-cash items, including stock-based compensation, loss (gain) on foreign exchange, other, net and other infrequent items that management does not consider indicative of normal operations.
Mineral Interests – As of September 30, 2022, we maintained $118.5 million of net mineral properties as a part of property, plant and equipment. Mineral interests include probable mineral reserves. We lease mineral reserves at several of our extraction facilities.
There were no indications of impairment as of our July 1, 2023 annual measurement date. Mineral Interests – As of September 30, 2023, we maintained $118.3 million of net mineral properties as a part of property, plant and equipment. Mineral interests include probable mineral reserves. We lease mineral reserves at several of our extraction facilities.
Other Income, Net: Increased $0.1 million from income of $0.2 million to income of $0.3 million • Other income, net primarily reflects an increase in investment income, which was offset by losses in our deferred compensation plan in fiscal 2022.
Other Expense, Net: Increased $0.4 million from $0.1 million to $0.5 million • Other income, net primarily reflects an increase in losses in our deferred compensation plan in fiscal 2022.
Climate Change The potential impact of climate change on our operations, product demand and the needs of our customers remains uncertain. Significant changes to weather patterns, a reduction in average snowfall or regional drought within our served markets could negatively impact customer demand for our products and our costs, as well as our ability to produce our products.
Significant changes to weather patterns, a reduction in average snowfall or regional drought within our served markets could negatively impact customer demand for our products and our costs, as well as our ability to produce our products. For example, prolonged periods of mild winter weather could reduce the demand for deicing products.
The results of operations of the consolidated records management business and other incidental revenues include sales of $11.5 million, $8.7 million and $10.1 million for fiscal year ended September 30, 2022, the nine months ended September 30, 2021 and the fiscal year ended December 31, 2020, respectively.
The results of operations of the consolidated records management business and other incidental revenues include sales of $11.4 million, $11.5 million and $11.3 million for the twelve months ended September 30, 2023, 2022, and 2021, respectively.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAs of September 30, 2022, the amount of natural gas hedged with derivative contracts totaled 3.8 million MMBtus, of which 2.9 million MMBtus will expire within one year.
Biggest changeAs of September 30, 2023, we had agreements in place to hedge forecasted natural gas purchases of 2.3 million MMBtus, 1.8 million MMBtus of which are qualified and designated as cash flow hedges. All MMBtus will expire within one year.
Because of the varying locations of our production facilities, we also enter into basis swap agreements to eliminate any further price variation due to local market differences. We have determined that these financial instruments qualify as cash flow hedges under U.S. GAAP.
Because of the varying locations of our production facilities, we also enter into basis swap agreements to eliminate any further price variation due to local market differences. We have determined most of these financial instruments qualify as cash flow hedges under U.S. GAAP.
Actual results may vary due to changes in the amount of variable rate debt outstanding. As of September 30, 2022, a significant portion of the investments in the U.K. pension plan are in bond funds. Changes in interest rates could impact the value of the investments in the pension plan.
Actual results may vary due to changes in the amount of variable rate debt outstanding. As of September 30, 2023, a significant portion of the investments in the U.K. pension plan are in bond funds. Changes in interest rates could impact the value of the investments in the pension plan.
Excluding natural gas hedged with derivative instruments, a hypothetical 10% adverse change in our natural gas prices during the fiscal year ended September 30, 2022, would have increased our product cost by approximately $1.4 million. Actual results will vary due to actual changes in market prices and consumption.
Excluding natural gas hedged with derivative instruments, a hypothetical 10% adverse change in our natural gas prices during the fiscal year ended September 30, 2023, would have increased our product cost by approximately $1.1 million. Actual results will vary due to actual changes in market prices and consumption.
See “Risk Factors—Risks associated with our international operations and sales and changes in economic and political environments could adversely affect our business and earnings.” Considering our foreign earnings, a hypothetical 10% unfavorable change in exchange rates compared to the U.S. dollar would have an estimated $0.2 million impact on our operating earnings for the fiscal year ended September 30, 2022.
See “Risk Factors—Risks associated with our international operations and sales and changes in economic and political environments could adversely affect our business and earnings.” Considering our foreign earnings, a hypothetical 10% unfavorable change in exchange rates compared to the U.S. dollar would have an estimated $0.4 million impact on our operating earnings for the fiscal year ended September 30, 2023.
GAAP, any such cash flow hedges of transportation costs would likely be accounted for by marking the hedges to market at each reporting period. We do not engage in hedging for speculative investment purposes. 79 2022 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC.
GAAP, any such cash flow hedges of transportation costs would likely be accounted for by marking the hedges to market at each reporting period. We do not engage in hedging for speculative investment purposes. 83 2023 FORM 10-K Table of Contents COMPASS MINERALS INTERNATIONAL, INC.
Interest Rate Risk As of September 30, 2022, we had $168.4 million of debt outstanding under our credit agreement (consisting of term loans and revolving credit facility), bearing interest at variable rates. Accordingly, our earnings and cash flows will be affected by changes in interest rates to the extent the principal balance is unhedged.
Interest Rate Risk As of September 30, 2023, we had $280.3 million of debt outstanding under our credit agreement (consisting of term loans and revolving credit facility), bearing interest at variable rates. Accordingly, our earnings and cash flows will be affected by changes in interest rates to the extent the principal balance is unhedged.
Assuming no change in the amount of debt outstanding, a 100 basis point increase in the average interest rate under these borrowings would have increased the interest expense related to our variable rate debt by approximately $1.7 million based upon our debt outstanding as of September 30, 2022.
Assuming no change in the amount of debt outstanding, a 100 basis point increase in the average interest rate under these borrowings would have increased the interest expense related to our variable rate debt by approximately $2.8 million based upon our debt outstanding as of September 30, 2023.

Other CMP 10-K year-over-year comparisons