# Intrepid Potash, Inc.: Form 10-Q for the period ended Mar 31, 2010

- Company: [Intrepid Potash, Inc.](/companies/ipi.md) (CIK 1421461)
- Form: 10-Q
- Filed: 2010-05-05
- Accepted by EDGAR: May 5, 2010, 14:27 ET
- Period: 2010-03-31
- Accession: 0001047469-10-004814
- Inline XBRL: no
- Main document: https://www.sec.gov/Archives/edgar/data/1421461/000104746910004814/a2198586z10-q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1421461/000104746910004814/

## Management's discussion and analysis

As filed, 58,081 characters.

*This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Securities Exchange Act of 1934 and the Securities Act of 1933, which are subject to risks, uncertainties and assumptions that are difficult to predict. All statements in this Quarterly Report on Form 10-Q, other than statements of historical fact, are forward-looking statements. These forward-looking statements are made pursuant to safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements include statements, among other things, concerning our business strategy, including anticipated trends and developments in and management plans for our business and the markets in which we operate; future financial results, operating results, revenues, gross margin, cost of goods sold, operating expenses, products, projected costs and capital expenditures; sales; and competition. In some cases, you can identify these statements by forward-looking words, such as "estimate," "expect," "anticipate," "project," "plan," "intend," "believe," "forecast," "foresee," "likely," "may," "should," "goal," "target," "might," "will," "could," "predict" and "continue," the negative or plural of these words and other comparable terminology. Forward-looking statements are only predictions based on our current expectations and our projections about future events. All forward-looking statements included in this Quarterly Report on Form 10-Q are based upon information available to us as of the filing date of this Quarterly Report on Form 10-Q. You should not place undue reliance on these forward-looking statements. We undertake no obligation to update any of these forward-looking statements for any reason.*

*These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to differ materially from those expressed or implied by these statements. These risks and uncertainties include changes in the price of potash or Trio™; operational difficulties at our facilities; changes in demand and/or supply for potash or Trio™; changes in our reserve estimates; our ability to achieve the initiatives of our business strategy, including but not limited to the development of the HB Mine as a solution mine and the further development of our langbeinite recovery assets; changes in the prices of our raw materials, including, but not limited to, the price of natural gas; fluctuations in the costs of transporting our products to customers; changes in labor costs and availability of labor with mining expertise; the impact of federal, state or local government regulations, including, but not limited to, environmental and mining regulations, and the enforcement of such regulations; competition in the fertilizer industry; declines in U.S. or world agricultural production; declines in oil and gas drilling; changes in economic conditions; adverse weather events at our facilities; our ability to comply with covenants inherent in our current and future debt obligations to avoid defaulting under those agreements; disruptions in credit markets; and governmental policy changes that may adversely affect our business. These factors also include the matters discussed and referenced in the section entitled "Risk Factors" described in our Annual Report on Form 10-K for the year ended December 31, 2009, and elsewhere in this Quarterly Report on Form 10-Q.*

*Unless expressly stated otherwise or the context otherwise requires, the terms "we," "our," "us," and "Intrepid" refer to Intrepid Potash, Inc. and its subsidiaries. Unless expressly stated otherwise or the context otherwise requires, references to "tons" in this Quarterly Report on Form 10-Q refer to short tons. One short ton equals 2,000 pounds. One metric ton, which many of our international competitors use, equals 2,204.68 pounds.*

### Overview

### Our Company

We are the largest producer of muriate of potash ("potassium chloride" or "potash") in the United States and are dedicated to the production and marketing of potash and langbeinite ("sulfate of potash magnesia"), another mineral containing potassium. Our revenues are generated exclusively from the sale of potash and langbeinite, and we market our langbeinite under the name of Trio™ and Intrepid

Trio®. Potassium is one of the three primary nutrients essential to plant formation and growth. Since 2005, we have supplied, on average, approximately 1.6 percent of annual world potassium consumption and 9.7 percent of annual U.S. consumption. We are one of two producers of langbeinite, a low-chloride fertilizer that is well-suited for chloride-sensitive crops and has the added benefit of sulfur and magnesium. We also produce salt, magnesium chloride, and metal recovery salts from our potash mining processes, the sales of which are accounted for as by-product credits to our cost of sales. We own five active potash production facilities—three in New Mexico (referenced collectively below as "Carlsbad" or individually as "West," "East," and "North") and two in Utah ("Moab" and "Wendover")—and we have a current estimated productive capacity to produce 910,000 tons of potash and 210,000 tons of langbeinite annually. We own two development assets in New Mexico—the HB mine, which is an idled potash mine that we are in the process of reopening as a solution mine that will utilize solar evaporation techniques in the production of potash, and the North Mine, which was operated as a traditional underground mine until the early 1980s.

We routinely post important information about us on our website under the Investor Relations tab. Our website address is *www.intrepidpotash.com.*

### Our Products and Markets

#### Potash

The majority of our revenues and gross margin are derived from the production and sales of potash. The percentages of our net sales, which we calculate as gross sales less freight costs, and gross margins derived from potash sales were approximately as follows for the indicated periods.

|  | Contribution from Potash Sales Net Sales | Gross Margin |
| --- | ---: | ---: |
| For the three months ended March 31, 2010 | 88% | 96% |
| For the three months ended March 31, 2009 | 85% | 89% |

Our potash is marketed for sale into three primary markets which are the agricultural market as a fertilizer, the industrial market as a component in drilling and fracturing fluids for oil and gas wells, and the animal feed market as a nutrient. Our primary regional markets include agricultural areas and feed manufacturers west of the Mississippi River, as well as oil and gas drilling areas in the Rocky Mountains and the Permian Basin. We also have domestic sales in the southeastern and eastern United States. Our potash production has a geographic concentration in the western United States and is therefore affected by weather and other conditions in this region.

A decline in the agricultural demand for potash began in the fall of 2008 and persisted through much of 2009. The reduction in demand was due primarily to the interaction of historically high potash prices with falling prices for agricultural commodities. Variability in other input costs for the farm producer, as well as uncertainty resulting from the ongoing U.S. and global financial market crisis and recession, were also contributing factors. During the late 2008 to late 2009 period, demand in the agricultural sector for potash was at its lowest level in the last 30 years of recorded data and was driven by farmers who elected to apply granular potash at lower rates than historical application rates as well as fertilizer dealers' unwillingness to take inventory risk and hold inventory on their balance sheets.

The demand for fertilizer began a recovery late in 2009. This recovery has been driven by several factors. First, agricultural commodity prices stabilized at economically beneficial prices for farmers. Second, potash price negotiations with large international buyers in China and India were concluded for standard potash which provided some actual pricing points as a reference for other buyers and sellers in the potash industry. Finally, we believe there was a realization by farmers of the risk of yield losses resulting from large cuts in fertilizer applications during the prior two growing seasons.

Our fourth quarter sales in 2009, which were a large improvement over the prior year's preceding quarters, were in some respects hampered by wet weather. In the first quarter of 2010, sales were brisk as dealers and retailers prepared for the expected spring application season, and we expect a return to more historical sales volumes of potash in North America, though it is possible demand could contract after the surge in early 2010. Over the long-term, we believe that domestic apparent consumption of fertilizers will return to historical averages as the replacement of potassium in the soils is critical to continued high-yield agricultural production. We believe the long-term trends support a return to these historical norms based on data generated by Fertecon Limited, a fertilizer industry consultant, showing that over the past 25 years the domestic apparent consumption for potash has averaged approximately 9.2 million tons with annual volatility of less than 10 percent through historical periods of low agricultural commodity prices, depressed oil and gas drilling, negative farmer margins, and a variety of other negative factors.

Prices contracted steadily during most of the past year; however, this trend appears to have leveled off and even turned positive once again in the first quarter of 2010. In fact, during the first quarter of 2010, pricing between India and Israeli Chemical, a large potash producer, was concluded at a price above the recent contract rates to China, Belarusian Potash Company raised their spot price in Asia, and several North American producers raised the domestic price of potash. Specific to Intrepid, we raised our posted price for red granular potash to $390 per ton FBO Carlsbad effective March 1, 2010. This represented a $30 per ton increase. Our ability to achieve this increase will depend on the overall markets in the regions where we sell potash. It should be noted that our average net realized sales price is expected to be below this $390 posted price due to discounts and pricing variations in specific markets where we sell our products.

Industrial demand for our standard potash also declined from historical levels due to a decrease in oil and gas drilling and continued delay in completion of oil and gas wells that was caused primarily by lower oil and gas commodity prices. Demand for standard potash was also impacted by some drillers experimenting with alternatives to standard potash or attempting to forego the use of potash altogether in drilling and completing their wells in an effort to reduce costs. Industrial demand for our standard product may correlate over the long-term with oil and gas pricing, drilling, and well completion activity. Through industry publications, we monitor the oil and gas drilling rig count in the United States as an indicator of activity. Currently, we expect the recovery in our industrial market to be gradual and one that may not return to the high levels experienced in 2007 and early 2008. We are taking steps to ensure we can convert more of our standard product to granular product that is more suitable for agricultural use, in order to ensure our sales mix can be quickly modified for changes in market conditions.

The feed component of our sales remained steady, although its percentage of our overall sales mix changed. This was driven, not by a decrease in feed sales, but rather by a very robust level of agricultural sales of potash. The percentages of our potash sales volumes for each of our markets were approximately as follows for the indicated periods:

|  | Agricultural | Industrial | Feed |
| --- | ---: | ---: | ---: |
| For the three months ended March 31, 2010 | 86% | 8% | 6% |
| For the three months ended March 31, 2009 | 61% | 22% | 17% |

#### Trio™

We began producing and marketing Trio™ in late 2005, and we are working to expand our production of this product to meet increasing demand, particularly for the granular-sized product. Trio™ is marketed into two primary markets, the agricultural market as a fertilizer and the animal feed market as a nutrient. We market Trio™ internationally through an exclusive marketing agreement with PCS Sales (USA), Inc. for sales outside the United States and Canada and via a non-exclusive agreement for sales into Mexico. Increasing the awareness of the benefits of Trio™ is a focus of our marketing efforts. Sales of Trio™ on an international basis tend to be larger bulk shipments and vary as to when such shipments take place; therefore, we see greater variability in our sales volumes from period to period when compared to our domestic sales. Trio™ granular sales continued to be brisk during the first quarter of 2010 as we sold through our available inventory. We recently decided to move forward with a significant capital improvement project that is designed to increase our recoveries of langbeinite from approximately 35 percent to approximately 50 percent, while, at the same time, reducing process water usage and providing the flexibility to allow us to sell all of our Trio™ production into the granular market.

The mix of our U.S. and export Trio™ sales volumes has changed as demand in the U.S. has remained strong for granular Trio™, while the export market for our standard-sized Trio™ product has lagged historical results. The percentages of our Trio™ sales volumes shipped to destinations in the United States and exported were as follows for the indicated periods.

| Trio™ only | United States | Export |
| --- | ---: | ---: |
| For the three months ended March 31, 2010 | 83% | 17% |
| For the three months ended March 31, 2009 | 60% | 40% |

### Specific Factors Affecting our Results

#### Sales

Our gross sales are derived from the sales of potash and Trio™ and are determined by the quantities of product we sell and the sales price we realize. We quote prices to customers both on a delivered basis and on the basis of pick-up at our plants and warehouses. Freight costs are incurred only on a portion of our sales. Many of our customers arrange and pay for their own freight directly. When we arrange and pay for freight, our quotes and billings are based on expected freight costs to the points of delivery. Our gross sales include the freight that we bill, but we do not believe that gross sales provide a representative measurement of our performance in the market due to variations caused by ongoing changes in the proportion of customers paying for their own freight, in the geographic distribution of our products, and in freight rates. We view net sales, which are gross sales less freight costs, as the key performance indicator as it conveys the sales price of the product that we realize.

During the first quarter of 2010, we sold more granular potash than we produced as the demand for potash has improved. This is the second consecutive quarter in which we have sold more product than we produced. We anticipated that there would be increased demand for granular potash when the market began to recover in late 2009, and, as a result, we built as much granular inventory as we could prior to the fourth quarter of 2009. By the end of the first quarter of 2010, we had sold through much of our granular inventories, which both generated cash flow and resulted in much of our higher cost inventory being reflected in cost of goods sold.

The volumes of product we sell are determined by demand for our products and by our production capabilities. We manage our production levels as needed in response to market demand with a view toward managing inventory levels in the near term while ensuring that our balance sheet remains strong. Our profitability is directly linked to the sales price of our product, our production rates, and, to a lesser extent, to the price of natural gas and other commodities used in the production of potash that affect our variable costs. Our operating strategy is to participate in the potash sales markets at market-based prices and to ramp-up production to full productive capacity levels, which, in turn, should lower our per ton costs and benefit our gross margins. Because of the location of our assets, we see different market prices throughout the United States and actively manage our sales to take advantage of the pricing available in individual markets.

To some degree, we consider international prices in determining the prices at which we sell our products. Generally, we have benefited from the weakening U.S. dollar in prior periods. The potential impact of a weaker U.S. dollar is that Canadian suppliers may adjust their sales price in U.S. dollars upward in order to retain their local currency equivalent sales price, potentially allowing for increases in the average net realized prices we can obtain for our products. Mitigating the impact of a weaker U.S. dollar is the fact that our sales and costs are denominated in U.S. dollars; therefore, the change in the value of the U.S. dollar against other currencies has less of an effect on us as opposed to our competitors.

Domestic pricing of our products is influenced by, among other things, the interaction of global supply and demand; ocean, land and barge freight rates; and currency fluctuations. Any of these factors could have a positive or negative impact on the price of our products. Average net realized sales prices for the last five quarters are shown below. The average net realized sales prices are calculated by subtracting freight costs from gross sales revenue and then dividing this result by the number of tons sold. The factors driving the decrease in the average net realized sales price from the first quarter of 2009 to the first quarter of 2010 have been described previously. Because of these factors, a downward trend resulted in the market price of potash during 2009, and our average net realized sales price decreased as well, as reflected below. The outlook for pricing appears to be more stable at this time, though further changes in the near term are possible.

| Average net realized sales price for the three months ended: | Potash (Per ton) | Trio™ |
| --- | ---: | ---: |
| March 31, 2010 | $354 | $167 |
| December 31, 2009 | $408 | $190 |
| September 30, 2009 | $458 | $246 |
| June 30, 2009 | $674 | $338 |
| March 31, 2009 | $727 | $330 |

#### Cost Associated with Abnormal Production

We periodically evaluate our production levels and costs to determine if any such items should be deemed abnormal under authoritative GAAP with respect to inventory costing. In the quarters ended March 31, 2010, and 2009, we determined that approximately $0.5 million and $1.2 million, respectively, of production costs would have been allocated to additional tons produced, assuming Intrepid had been operating at normal production rates. As a result, these costs have been excluded from our inventory value and instead expensed in the respective quarters. The result is an acceleration of the recognition of this expense and the exclusion of these costs from cost of sales. The assessment of normal production levels is highly judgmental and is unique to each quarter. We compared actual production relative to what we estimated could have been produced if we had not elected market-related shutdowns and lower operating rates in order to determine the abnormal cost adjustment. It should be noted that the amount of abnormal production costs expensed in the first quarter of 2010 was less than the amount expensed in the fourth quarter of 2009 by approximately $8.9 million because we recommenced full production at our facilities. The only location where we incurred an abnormal adjustment in the first quarter of 2010 was our Wendover operations, where we reduced production due to inventory constraints caused by lower demand for standard potash.

#### Cost of Goods Sold

Our cost of goods sold reflects the costs to produce our potash and langbeinite products, less credits generated from the sale of our by-products. Many of our production costs are fixed, and, consequently, our costs of sales per ton move inversely with the number of tons we produce, within the context of normal production levels. Our principal production costs include direct labor and employee benefits, maintenance materials, contract labor and materials for operating or maintenance projects, natural gas, electricity, operating supplies, chemicals, depreciation and depletion, royalties, leasing costs, and plant overhead expenses. There are elements of our cost structure associated with contract labor, consumable operating supplies, and chemicals that are variable, which make up approximately 20 percent of our cost base. Production-related costs increased by $6.2 million during the quarter ended March 31, 2010, compared to 2009. This overall increase resulted primarily from increased production volumes, therefore resulting in higher natural gas costs, contract labor costs, royalties incurred upon sales, labor expenses and supplies. These increased expenditures were partially offset by decreases in property tax, insurance costs, and an increase in by-product credits.

Our labor and contract services costs in Carlsbad, New Mexico may continue to be influenced by the demand for skilled labor in the potash, oil and gas, and the nuclear waste storage industries.

Production costs per ton are also impacted when our production levels change such as for annual maintenance turnarounds, mine development, or voluntary shutdowns to manage inventory levels. Excluding the effects of the direct expensing of costs associated with abnormally low production rates, our cash cost per ton decreased in the first quarter of 2010 relative to the first quarter of 2009. Our potash cash cost per ton, net of $8 per ton of by-product credits, was $199 per ton in the quarter ended March 31, 2010, compared to $238 per ton, net of $16 per ton of by-product credits, in the same quarter of 2009. The decrease in cash costs per ton resulted from higher operating rates. This trend toward lower cash costs per ton should continue in 2010 as we ramp up production at our West mine.

Our normal production costs are first absorbed into inventory, and the inventory could take some time to turn over. We experienced higher sales volumes in the first quarter of 2010 compared to the first quarter of 2009, which resulted in the turnover of granular inventory that had a higher average production cost than our current tons due to lower operating rates in the past year. The sale of this inventory has caused a decrease in the carrying cost of our inventoried tons. With the recent uptick in demand, we have resumed a full production schedule at our West mine and are working to increase staffing to be able to run at full operating rates by mid-2010. However, due to the low unemployment levels in the Carlsbad area, we may not be able to hire enough qualified employees quickly enough to achieve our goal of running at full operating rates by mid-2010.

We pay royalties to federal, state and private lessors under our mineral leases, and such payments are typically a percentage of net sales of minerals extracted and sold under the applicable lease. In some cases, federal royalties for potash are paid on a sliding-scale basis that varies with the grade of ore extracted. In the three months ended March 31, 2010, and 2009, our royalty rate was 3.7 percent. We expect that future average rates will be relatively consistent with this rate.

#### Income Taxes

Intrepid is a subchapter C corporation and therefore is subject to federal and state income taxes on its taxable income. For the three month period ending March 31, 2010, our estimated annual effective rate was 39.3 percent compared to 38.1 percent during the corresponding period in 2009. Our estimated annual effective tax rate is impacted primarily by the amount of taxable income associated with each jurisdiction in which our income is subject to tax, permanent differences between the financial statement carrying amounts and tax bases of assets and liabilities, and the benefit associated with the estimated effect of the domestic production activities deduction.

For the three months ended March 31, 2010, our total tax expense was $7.7 million. This expense was comprised of $3.1 million of current income tax expense and $4.6 million of deferred income tax expense. For the three months ended March 31, 2009, our total tax expense was $15.2 million. Total tax expense in the first quarter of 2009 was comprised of $8.5 million of current income tax expense and $6.7 million of deferred income tax expense.

### Operating Highlights

### Three Months Ended March 31, 2010, and 2009

Even with higher sales volumes, income before taxes for the three months ended March 31, 2010, and 2009, was $19.5 million and $39.9 million, respectively. The decrease in the comparable periods principally followed from lower average net realized sales prices per ton of both potash and Trio™. We sold 243,000 and 70,000 tons of potash and Trio™ in the three months ended March 31, 2010, as compared to 99,000 and 38,000 tons in the same period of 2009. The increase in sales volumes resulted from higher sales of potash due to rising demand from farmers because of improved economic and weather conditions, the decline in potash prices from their high point in 2009, and the need to replace the nutrients depleted by crops in 2008 and 2009 after lower potash fertilizer application rates in those periods. Industrial-grade potash sales volumes in the first quarter, however, were comparable to the same period in 2009, which represented a decrease from previous periods. The Trio™ sales volume increase was driven largely by increased domestic sales, which suggest an increase in general agricultural demand. Trio™ export shipments are comparatively large bulk sales that tend to vary when they take place throughout the year; therefore, the timing of these sales can lead to large variances in sales tons from quarter to quarter.

Our production volume of potash in the first quarter of 2010 was 172,000 tons, or 35,000 tons more than in the first quarter of 2009 and 48,000 tons more than in the fourth quarter of 2009. Our production was primarily lower in 2009 due to actions we took to slow production in order to more closely align our supply with market demand and to manage our inventory. As demand has increased through the fourth quarter of 2009 and into 2010, we have been increasing our production.

Our average net realized sales price of potash was $354 per ton ($390 per metric ton) in the three months ended March 31, 2010, as compared to $727 per ton in the three months ended March 31, 2009. The decrease in our average net realized sales price was the result of price reductions across our industry, including those by our international competitors following their settlements of new contracts at lower prices with large importing countries, such as China, India and Brazil. Given the significant changes in market demand during 2009, average prices have declined from the peak quarterly average of $762 per ton in the fourth quarter of 2008. The long-term trends in population growth and tight global food supplies have not changed materially as a result of the financial crisis, which leads us to believe that demand for potash should continue to increase in the future. Excluding costs associated with abnormal production, our potash gross margin as a percentage of net sales was 31 percent for the three months ended March 31, 2010, as compared to 60 percent in the three months ended March 31, 2009.

In the first quarter of 2010, we directly expensed $0.5 million of costs related to abnormal production, and our cost of goods sold was $199 per ton, net of by-product credits. This compares to a per ton cost of goods sold for potash in the first quarter of 2009 of $238 per ton, net of by-product credits.

Our cost of goods sold per ton of Trio™ decreased in the first quarter of 2010 relative to the first quarter of 2009, as we produced and sold more tons in the first quarter of 2010 relative to the same period in 2009. Therefore, costs were spread over more tons in 2010, lowering the costs of goods sold per ton for Trio™.

### Selected Operations Data

The following table presents selected operations data for the periods presented below. Analysis of the details of this information is presented throughout this discussion. We present this table as a summary of information relating to key indicators of financial condition and operating performance that we believe are important. Average net realized sales prices below are derived from the elements in the table presented below.

| Production volume (in thousands of tons): | Three months ended March 31, 2010 | March 31, 2009 | Change between Periods | % Change |
| --- | ---: | ---: | ---: | ---: |
| Potash | 172 | 137 | 35 | 26% |
| Langbeinite | 57 | 42 | 15 | 36% |
| Sales volume (in thousands of tons): |  |  |  |  |
| Potash | 243 | 99 | 144 | 145% |
| Trio™ | 70 | 38 | 32 | 84% |
| Gross sales (in thousands): |  |  |  |  |
| Potash | $91,375 | $74,029 | $17,346 | 23% |
| Trio™ | 15,984 | 14,872 | 1,112 | 7% |
| Total | 107,359 | 88,901 | 18,458 | 21% |
| Freight costs (in thousands): |  |  |  |  |
| Potash | 5,379 | 2,364 | 3,015 | 128% |
| Trio™ | 4,387 | 2,343 | 2,044 | 87% |
| Total | 9,766 | 4,707 | 5,059 | 107% |
| Net sales (in thousands): |  |  |  |  |
| Potash | 85,996 | 71,665 | 14,331 | 20% |
| Trio™ | 11,597 | 12,529 | (932) | (7)% |
| Total | $97,593 | $84,194 | $13,399 | 16% |
| Potash statistics (per ton): |  |  |  |  |
| Average net realized sales price | $354 | $727 | $(373) | (51)% |
| Cost of goods sold, net of by-product credits\* (exclusive of items shown separately below) | 199 | 238 | (39) | (16)% |
| Depreciation, depletion and amortization | 24 | 18 | 6 | 33% |
| Royalties | 13 | 25 | (12) | (48)% |
| Total potash cost of goods sold | 236 | 281 | (45) | (16)% |
| Warehousing and handling costs | 9 | 11 | (2) | (18)% |
| Average potash gross margin (exclusive of costs associated with abnormal production) | $109 | $435 | $(326) | (75)% |
| Trio™ statistics (per ton): |  |  |  |  |
| Average net realized sales price | $167 | $330 | $(163) | (49)% |
| Cost of goods sold (exclusive of items shown separately below) | 119 | 143 | (24) | (17)% |
| Depreciation, depletion and amortization | 17 | 15 | 2 | 13% |
| Royalties | 8 | 17 | (9) | (53)% |
| Total Trio™ cost of goods sold | 144 | 175 | (31) | (18)% |
| Warehousing and handling costs | 9 | 11 | (2) | (18)% |
| Average Trio™ gross margin | $14 | $144 | $(130) | (90)% |

On a per ton basis, by-product credits were $8 and $16 for the three month period ended March 31, 2010, and 2009, respectively. By-product credits were $2.0 million and $1.6 million for the three month period ended March 31, 2010, and 2009, respectively.

### Outlook for the Remainder of 2010

The publicly-announced settlements between Chinese buyers and BPC (Belarusian Potash Company) at $350 per metric ton CFR in December 2009, as well as the more recent publicly-announced deal between India and Canpotex in February 2010 at $370 per metric ton CFR, appears to have ended the recent global decline in potash price, abating the pricing volatility that began early in 2009. The latest settlements have brought potash prices back in line with other crop fertilizer prices, thus potentially setting the stage for a sustainable recovery in global demand. Strong North American sales volumes during the first quarter of 2010 have drawn producer inventories below the five-year average as of the end of March, even as fertilizer dealers seek to try to end the spring season with fertilizer inventories drawn down. The spring application season for farmers kicked off in earnest in April 2010, as favorable weather has allowed farmers to get into their fields to apply fertilizer. We expect some dealers will require additional product through the remainder of the spring season to restock, as their inventories will likely be drawn down. Our forward warehousing efforts will allow us to continue to sell effectively for the duration of the spring season. We anticipate that the remainder of 2010 will continue to be fairly normal by historical industry standards. Summer will likely be a slower period of demand; however, we believe some retailers will look to refill their stocks in anticipation of higher pricing in the fall. We expect fall application rates will be determined by the normal interaction of crop prices, fertilizer prices, and weather and could also be altered in response to any important market developments affecting the key factors listed earlier that impact fertilizer demand.

We believe fertilizer dealers may continue to be cautious due to the recent market environment of 2009 by limiting the amount of inventory they keep on hand. We may benefit from this trend as we believe we are well-positioned to provide just-in-time product in certain key agricultural markets.

We believe our strong balance sheet will enable us to continue developing our growth projects and execute our marketing strategies.

### Potash Prices

The commodity price for potash has been and will continue to be the most significant driver of the profitability of our business. As discussed earlier, prices have contracted from 2008 and 2009 levels, but this trend appears to have abated as pricing has improved modestly in some markets during the past month.

Factors that may impact pricing for the remainder of 2010 include the amount and price at which China will continue buying during 2010, how much current and latent demand will be satiated at current prices, and whether increases in crop prices and other crop nutrients can be sustained. The current uptick in demand has allowed us to sell through the majority of our granular inventories, indicating a strong likelihood that our granular sales for the remainder of 2010 will match our granular production rates. The $30 per ton price increase we implemented March 1, 2010, has led to some higher-priced sales, but not all of our recent sales have been at this increased price.

### Capital Investment

We operate in a capital-intensive industry that requires consistent capital expenditures to replace assets necessary to sustain safe and reliable production. We believe that, in the long-term, demand for potash will return to, or exceed, historical levels; therefore, we have developed an investment plan at each of our facilities to maintain safe and reliable production, ensure environmental compliance, improve and modernize equipment, and increase productivity and recoveries in order to decrease per ton production costs. This focus on continuing to enhance the operational reliability of our production is particularly directed at our Carlsbad facilities with production efficiency and debottlenecking projects.

As we continue to invest in our facilities, we proactively manage our projects in order to manage cash investment with the need to maintain an appropriate cash level on our balance sheet that will allow us to react strategically to market conditions. In the three months ended March 31, 2010, we invested approximately $19.1 million in capital projects. Based on our expected pace of capital expenditures in 2010 and our current sales forecast, we believe we will have adequate cash to execute our capital plans for the remainder of 2010.

We recently decided to move forward with a significant capital improvement project that is designed to increase our recoveries of langbeinite from approximately 35 percent to approximately 50 percent. As part of this project, we are investing in a plant to allow us the flexibility to granulate all of our standard-sized product, if market conditions warrant, and have it available for sale into the robust granular market. In addition, this project should result in a reduction of our water usage as it relates to our langbeinite production facility and therefore eliminate the need to invest additional capital in water management equipment and storage capacity. The final engineering will commence in May 2010, followed by construction, with completion and operation of the project expected by the end of 2011. The total capital investment for this project is expected to be between $85 and $90 million.

We continue to prepare for construction of the HB solar solution mine, a project to develop and build a solution mine combined with solar evaporation ponds. Project cost estimates remain in the range of $120 and $130 million. We expect to invest the bulk of this capital when we receive the necessary approvals and permits from the state and federal regulatory agencies. In January 2009, the Bureau of Land Management ("BLM") informed Intrepid that it has determined that an Environmental Impact Statement ("EIS") is required to evaluate the environmental impacts of the proposed HB solar solution mine. As a consequence, final permitting and approval of the HB solar solution mine has been delayed and capital expenditures for it deferred while the EIS is completed. We currently anticipate that the EIS process will be completed in the third or fourth quarter of 2011. Once the necessary regulatory permits and approvals are obtained, construction will begin and first production should result approximately twelve to eighteen months later, with full production anticipated approximately two years after approvals are obtained and construction begins. We have budgeted $6 million to $8 million for this project in 2010 that will be used for continued permit activities, engineering, and some advance purchases of materials.

Total capital investment in 2010 is budgeted to be between $125 and $155 million. A breakdown of our capital investment plan includes approximately $40 to $46 million to replace assets needed to maintain production, $8 to $12 million to improve and modernize equipment, $65 to $85 million to increase productive capacity as described more fully below, and $12 million to continue the replacement of the East facility warehouse. A portion of the $12 million has already been reimbursed, and the remainder we expect to be reimbursed by our insurer. The 2010 capital program will be funded out of cash flow and existing cash on hand.

The following are a few of the projects that are slated for investment and/or completion in 2010 to improve the overall reliability of the operations and increase productive capacity:

We completed the full commissioning of the underground horizontal stacker, storage, and hoisting system in the first quarter of 2010;

As mentioned previously, we will proceed with the langbeinite recovery project beginning in May 2010. Of the total capital investment for the project, approximately $3.3 million has been invested to date on engineering work, approximately $35 million will be invested during the remainder of 2010, and the balance will be invested in 2011. This project is a high priority due to the expected increase in langbeinite production due to higher recoveries from the same amount of ore throughput from the East facility, which is expected to result in a lower average cash cost structure at the East facility;

Complete the thickener installation at the East facility to improve potash recoveries. Construction is largely complete and commissioning began in April 2010;

Expand compaction capacity at the Moab facility allowing Intrepid to better adapt to market fluctuations associated with standard and coarse potash demands in order to better serve the agricultural market. The project cost is expected to range between $15 and $17 million;

Replace the wind-damaged warehouse capacity at the Carlsbad East facility for approximately $12 million. In addition, new warehouse capacity for $2 million is planned at Wendover to provide increased operational flexibility; and

Add new equipment, including miners and conveyors, to develop new mine panels at the Carlsbad mines at costs of approximately $7 to $8 million.

All dollar amounts for future capital spending are estimates that are subject to change as projects are further developed, modified, deferred, or canceled.

### Liquidity and Capital Resources

As of March 31, 2010, we had cash, cash equivalents, and investments of $128.8 million, we had no debt, and we had availability of $125.0 million under our senior credit facility. Included in cash and cash equivalents were $1.0 million in cash and $99.3 million in cash equivalent investments. The cash equivalents consisted of approximately $8.3 million in money market accounts or certificates of deposit with banking institutions, approximately $30.3 million in U.S. treasuries with daily liquidity, and approximately $60.7 million in U.S. Bank National Association ("U.S. Bank") commercial paper. We had no losses on our cash and cash equivalents during the first quarter of 2010, and all cash equivalents are invested with institutions that we believe to be financially sound. Additionally, as of March 31, 2010, we had $13.6 million and $14.9 million, respectively, invested in short-term and long-term certificate of deposit and U.S. government agency bond investments.

Our operations are primarily funded from cash on hand and cash generated by operations, and, if necessary, we have the ability to borrow under our senior credit facility. For the foreseeable future, we believe that our cash and investment balances, cash flow from operations, and available borrowings under our senior credit facility will be sufficient to fund our operations, our working capital requirements, and our presently planned capital investments.

*(In thousands)*

|  | Three months ended March 31, 2010 | March 31, 2009 |
| --- | ---: | ---: |
| Cash Flows from Operating Activities | $35,815 | $16,542 |
| Cash Flows from Investing Activities | $(25,100) | $(29,776) |
| Cash Flows from Financing Activities | $(176) | $(880) |

### Operating Activities

Total cash provided by operating activities was $35.8 million for the three months ended March 31, 2010, compared to $16.5 million for the three months ended March 31, 2009. The $19.3 million increase in cash provided by operating activities in the first quarter of 2010 was due primarily to a decrease in product inventory because of robust sales during the quarter and a lower increase in trade accounts receivable because of better collections at the end of the first quarter of 2010 compared to 2009. These changes were offset by lower net income, a lower decrease in refundable income taxes, and a higher decrease in accounts payable, accrued liabilities and accrued employee compensation and benefits when comparing the first quarter of 2010 to 2009. The lower net income and lower product inventory are reflective of the recent business conditions in our industry, as producers are selling more products, although at much lower prices compared to early 2009, and therefore decreasing their inventories. For the three months ended March 31, 2010, inventories decreased $19.8 million relative to an increase of $6.4 million in the same period in 2009, reflecting the increase in demand for our products after the declines in application rates for much of 2009. The change in trade accounts receivable relative to the same period in 2009 further contributed to the overall increase in cash provided by operating activities, as trade accounts receivable increased $7.6 million in the first three months of 2010 relative to an increase of $22.5 million in the first three months of 2009.

### Investing Activities

Total cash used in investing activities was $25.1 million for the three months ended March 31, 2010, compared to $29.8 million for the three months ended March 31, 2009. The amount of cash invested in property, plant, and equipment as well as mineral properties and development costs decreased to $13.9 million in the first quarter of 2010, from $29.8 million in the first quarter of 2009, reflecting the attentive monitoring of our capital plan and the increased focus on ramping up production in the first quarter of 2010. For the three months ended March 31, 2010, we purchased $11.6 million of investments and received $0.5 million in proceeds from maturing investments.

### Senior Credit Facility

Intrepid's senior credit facility, as amended, is a syndicated facility led by U.S. Bank as the agent bank, which provides a total revolving credit facility of $125 million. The lenders have a security interest in substantially all of the assets of Intrepid and certain of its subsidiaries. Obligations under the senior credit facility are cross-collateralized between Intrepid and certain of its subsidiaries. Intrepid's $125 million revolving credit facility has a term through March 9, 2012, and the entire amount of the revolving credit facility was available for use as of March 31, 2010.

Our senior credit facility required us to maintain interest rate derivative agreements to fix the interest rate for at least 75 percent of the projected outstanding balance of our term loan, when we had debt outstanding. Historically, we maintained derivative hedging agreements that were swaps of variable rate interest for fixed rate payments. Despite repaying the amounts outstanding under the senior credit facility, we have left the interest rate swap agreements in place taking the view that interest rates would rise and that the cost of settling the derivatives would be relatively beneficial as compared to closing out the contracts. Interest rates, however, have decreased, and the liability that we have under these derivative agreements has increased since the date of the debt repayment. We review our derivative positions from the perspective of counterparty risk when we are in an asset position and believe that we continue to transact with strong, creditworthy institutions. Notional amounts for which the rate has been fixed as of March 31, 2010, are displayed below:

*(In thousands)*

| Termination Date | Notional Amount | Weighted Average Fixed Rate |
| --- | ---: | ---: |
| December 31, 2010 | $34,750 | 5.0% |
| December 31, 2011 | $29,400 | 5.2% |
| December 31, 2012 | $22,800 | 5.3% |

The weighted average notional amount outstanding for these derivatives as of March 31, 2010, and the weighted average 3-month LIBOR rate locked-in via these derivatives are $28.4 million and 5.16 percent. The interest rate paid under our senior credit facility on any debt varies both with the change in the 3-month LIBOR rate and with our leverage ratio.

See the Notes to the Consolidated Financial Statements in this Quarterly Report on Form 10-Q for more information relating to our financing arrangements, including our indebtedness. A more detailed description of our financing arrangements is also included in Management's Discussion and

Analysis of Results of Operations and Financial Condition and the Notes to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2009.

### Contractual Obligations

As of March 31, 2010, we had contractual obligations totaling $74.1 million on an undiscounted basis, as indicated below. Contractual commitments shown are for the full calendar year indicated unless otherwise indicated.

*(In thousands)*

|  | Payments due by period Total | Q2-Q4 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | More than 5 years |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Operating lease obligations(1) | $23,983 | $4,365 | $5,101 | $3,059 | $2,837 | $2,562 | $1,339 | $4,720 |
| Purchase commitments(2) | 200 | 200 | — | — | — | — | — | — |
| Natural gas purchase commitments(3) | 4,985 | 4,985 | — | — | — | — | — | — |
| Pension obligations(4) | 1,049 | 108 | 157 | 157 | 157 | 157 | 157 | 156 |
| Asset retirement obligation(5) | 32,252 | — | — | — | — | — | — | 32,252 |
| Minimum royalty payments(6) | 11,662 | 343 | 457 | 457 | 457 | 457 | 457 | 9,034 |
| Total | $74,131 | $10,001 | $5,715 | $3,673 | $3,451 | $3,176 | $1,953 | $46,162 |

(1)

Includes all operating lease payments, inclusive of sales tax, for leases for office space, an airplane, railcars and other equipment.

(2)

Purchase contractual commitments include the approximate amount due vendors for non-cancelable purchase commitments for materials and services.

(3)

We have committed to purchase a minimum quantity of natural gas, 87.5 percent of which is priced at contractually fixed rates and 12.5 percent of which is priced at floating index-dependent rates, the latter being estimated based on forward rates as of April 20, 2010. Amounts are inclusive of estimated transportation costs and sales tax.

(4)

Minimum required pension contributions as estimated by our actuaries. Estimated contributions represent additional funds Intrepid expects to pay into the pension plan and excludes amounts Intrepid has placed in trust as plan assets to fund the pension obligation, as well as the future direct payments by the pension plan to participants.

(5)

We are obligated to reclaim and remediate lands which our operations have disturbed, but, because of the long-term nature of our reserves and facilities, we estimate that none of those expenditures will be required until after 2015. Commitments shown are in today's dollars and are undiscounted.

(6)

Estimated annual minimum royalties due under mineral leases, assuming approximately a 25-year life, consistent with estimated useful lives of plant assets.

Payments related to derivative contracts cannot be reasonably estimated due to variable market conditions and are not included in the above tables.

### Off-Balance Sheet Arrangements

As of March 31, 2010, we had no off-balance sheet arrangements aside from the operating leases described under the section titled ***Contractual Obligations*** above and bonding obligations described in the Notes to the Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

### Results of Operations for the Three Months Ended March 31, 2010, and 2009

### Net Sales and Freight Costs

Net sales of potash increased $14.3 million, or 20 percent, from $71.7 million for the three months ended March 31, 2009, to $86.0 million for the three months ended March 31, 2010; this change being the result of an increase in sales volume of 145 percent offset by a decrease in the average net realized sales price of $373 per ton, or 51 percent. An increase in the demand for potash and Trio™ resulted in a higher total volume of sales in the first quarter of 2010 compared to 2009 and resulted in the sell-off of inventories, including some higher cost inventory we had built throughout 2009. Our production volume of potash in the three months ended March 31, 2010, was 172,000 tons, or 35,000 tons more than in the first quarter of 2009. Our potash production was more in 2010 than in 2009 principally due to our decision to increase production to satisfy the more robust demand currently being experienced. During the first quarter of 2009, we shut down the West and East production facilities for two weeks each and continued to operate with three operating shifts instead of four shifts at our Carlsbad facilities as part of an effort to reduce production in response to lower demand. Our East production facility returned to normal production levels in the third quarter of 2009, and our West production facility is currently staffing up to enable us to produce closer to our current estimated productive capacity.

Net sales of Trio™ decreased $0.9 million, or 7 percent, from $12.5 million for the three months ended March 31, 2009, to $11.6 million for the three months ended March 31, 2010, due to a 49 percent decrease in the average net realized sales price offset by an 84 percent increase in the volume of sales. Production of langbeinite increased 36 percent in the first quarter of 2010 compared to the same period in 2009, due primarily to our decision to increase production in order to better match granular-sized product supply to demand.

Freight costs increased $5.1 million, or 107 percent, for the three months ended March 31, 2010, compared to the three months ended March 31, 2009, due primarily to the significant increase in sales volume as well as increased movement of inventory to distribution warehouses. As usual, the mix of customers paying for their own freight affects the freight costs incurred by Intrepid and gross sales. We believe that our average net realized price is a more meaningful number to evaluate and compare product revenues.

### Cost of Goods Sold

The following table presents our cost of goods sold for potash and Trio™ for the subject periods.

|  | Three months ended March 31, 2010 | March 31, 2009 | Change between Periods | % Change |
| --- | ---: | ---: | ---: | ---: |
| Cost of sales (in millions) | $67.2 | $34.3 | $32.9 | 96% |
| Cost per ton of potash sold(1) | $236 | $281 | $(45) | (16)% |
| Cost per ton of Trio™ sold(2) | $144 | $175 | $(31) | (18)% |

(1)

Per ton potash costs include $24 and $18 of depreciation expense in the first quarter of 2010 and 2009, respectively.

(2)

Per ton Trio™ costs include $17 and $15 of depreciation expense in the first quarter of 2010 and 2009, respectively.

Total cost of goods sold per ton of potash decreased $45 per ton, or 16 percent, from $281 per ton for the three months ended March 31, 2009, to $236 per ton for the three months ended March 31, 2010. These results are exclusive of approximately $0.5 million and $1.2 million of production costs that were not absorbed into inventory in the first three months of 2010 and 2009, respectively, due to the determination that our production rates were abnormally low for these periods. The cost of sales numbers reflect only those costs that have been first absorbed into inventory and then subsequently recognized as the product tons are sold. Higher production rates in the first quarter of 2010 are the primary reason that cost of sales per ton declined relative to the comparable period in 2009.

Total cost of goods sold of our Trio™ decreased $31 per ton, or 18 percent, from $175 per ton for the three months ended March 31, 2009, to $144 per ton for the three months ended March 31, 2010. Again, higher production rates thus far in 2010 compared to the same period in the prior year contributed to the lower per ton costs.

Cost of goods sold increased $32.9 million, or 96 percent, from $34.3 million in the three months ended March 31, 2009, to $67.2 million in the three months ended March 31, 2010. The increase in the total expense was driven by the higher volumes sold and an increase in spending primarily to support higher production and sales volumes, prior to absorption of costs into inventory. Costs that changed materially during the three months ended March 31, 2010, compared to the three months ended March 31, 2009, included increases in labor and contractor labor, natural gas, operating supplies, royalties, and depreciation.

Labor and contractor costs increased $2.1 million, or 17 percent, in the first three months of 2010 due to increased labor following managed cut-backs in operating rates and contract projects during the first three months of 2009. Operating supplies also increased $0.5 million, or 24 percent, in the three months ended March 31, 2010, due to increased production volumes following these managed cut-backs in operations the first quarter of 2009.

Natural gas costs increased $1.1 million, or 56 percent, in the three months ended March 31, 2010, due principally to higher market rates for this commodity. Higher rates drove $0.8 million of the increase, and higher volumes drove $0.5 million of the increase. Additionally, realized and unrealized gains and losses on natural gas derivatives in the first quarter of 2009 accounted for $0.2 million of the decrease in the expense from period to period.

Royalty expense increased $0.5 million, or 16 percent, from the three months ended March 31, 2009, which relates to the increase in net sales. Other changes in cost of goods sold followed from increased depreciation and decreased insurance and property taxes.

### Selling and Administrative Expenses

Selling and administrative expenses decreased $0.2 million in the first quarter of 2010 as compared to the same period in 2009. This represents a 3 percent decrease from $6.8 million for the three months ended March 31, 2009, to $6.6 million for the three months ended March 31, 2010. The decrease largely related to a reduction in professional services in the first quarter of 2010 offset by higher stock compensation expense relative to the prior period.

### Income Taxes

Income taxes decreased by $7.5 million in the first quarter of 2010 as compared to the same period in 2009. Income taxes of $7.7 million were recognized in the three months ended March 31, 2010, at an estimated annual effective tax rate of 39.3 percent. Income taxes of $15.2 million were recognized in the three months ended March 31, 2009, at an estimated annual effective tax rate of 38.1 percent.

### Critical Accounting Policies and Estimates

For a description of the critical accounting policies that affect our more significant judgments and estimates used in the preparation of our consolidated financial statements, refer to our most recent

Annual Report on Form 10-K for the year ended December 31, 2009. There have been no significant changes to our critical accounting policies since December 31, 2009.

### Recent Accounting Pronouncements

There are no recent accounting pronouncements that will have an impact on our consolidated financial statements.

## Market risk

As filed, 302 characters.

There have been no significant changes to our market risk since December 31, 2009. For a discussion of our exposure to market risk, refer to Part II, Item 7A., "Quantitative and Qualitative Disclosure About Market Risk," contained in our Annual Report on Form 10-K for the year ended December 31, 2009.

## Controls and procedures

As filed, 3,462 characters.

### (a) Evaluation of Disclosure Controls and Procedures

We maintain "disclosure controls and procedures," as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Based on their evaluation as of the end of the period covered by this Quarterly Report on Form 10-Q, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective at the reasonable assurance level.

### (b) Changes in Internal Control over Financial Reporting

Our management, including our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of our "internal control over financial reporting" as defined in Rule 13a-15(f) of the Exchange Act to determine whether any changes in our internal control over financial reporting occurred during the three months ended March 31, 2010, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Based on that evaluation, there have been no such changes in our internal control over financial reporting that occurred during the three months ended March 31, 2010, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

### (c) Inherent Limitations on Effectiveness of Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, do not expect that our disclosure controls or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within Intrepid have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

## Risk factors

As filed, 1,644 characters.

In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed in Part I, "Item 1A: Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2009, which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K for the year ended December 31, 2009, are not the only risks facing our company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results. Other than as supplemented below, there have been no material changes in the risk factors contained in our Annual Report on Form 10-K for the year ended December 31, 2009.

***Changes in laws and regulations affecting the mining industry and changes in enforcement practices could have an adverse effect on our operations and business.***

Our operations are subject to extensive laws and regulations, including the Occupational Safety and Health Act ("OSHA"), the Mine Safety and Health Act ("MSHA"), and related state statutes and regulations. As a result of the mine explosion that occurred on April 5, 2010, at the Upper Big Branch Mine in West Virginia, it is possible that new laws and regulations could be enacted by MSHA, OSHA or other regulatory bodies. In addition, it is possible that enforcement of existing laws and regulations may become more stringent. Any changes in laws, regulations, or enforcement practices could have an adverse effect on our operations and business.

Filed May 5, 2010.
Source: SEC EDGAR, the filing index for accession 0001047469-10-004814. Last ingested by Listed: Nov 4, 2026, 14:52 ET. No prices; not investment advice.