UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 30, 2020~~March 31, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________________ to __________________________

Commission File Number 001-31921

Compass Minerals International, Inc.

(Exact name of registrant as specified in its charter)


Delaware			36-3972986
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification Number)

9900 West 109th Street

Suite 100

Overland Park, KS 66210

(913) 344-9200

(Address of principal executive offices, zip code and telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common stock, $0.01 par value

CMP

The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such

~~file such~~ reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes

☑

☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that

~~that~~ the registrant was required to submit such files)

Yes

☑

☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

~~Act.~~

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the

Exchange Act).

Yes

☐

☑

The number of shares outstanding of the registrant’s common stock, $0.01 par value per share, as of ~~October 30, 2020,~~May 3, 2021, was ~~33,955,138 shares.~~34,001,181 shares.

~~Table of Contents~~


						COMPASS MINERALS INTERNATIONAL, INC.

TABLE OF CONTENTS


		~~Page~~

	PART I. FINANCIAL INFORMATION	Page

Item 1.	Financial Statements

	Consolidated Balance Sheets as of ~~September~~ ~~30, 2020~~March 31, 2021 (unaudited) and December 31, ~~2019~~2020	2

	Consolidated Statements of Operations for the three ~~and~~ ~~nine~~months ended ~~September~~ ~~30,~~March 31, 2021 and 2020 ~~and 2019~~ (unaudited)	3

	Consolidated Statements of Comprehensive ~~Income (Loss)~~Loss for the three ~~and~~ ~~nine~~months ended ~~September~~ ~~30,~~March 31, 2021 and 2020 ~~and 2019~~ (unaudited)	4

	Consolidated Statements of Stockholders’ Equity for the three ~~and~~ ~~nine~~months ended ~~September~~ ~~30,~~ March 31, 2021 and 2020 ~~and 2019~~ (unaudited)	5

	Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ (unaudited)	76

	Notes to Consolidated Financial Statements (unaudited)	87

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2622

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	3932

Item 4.	Controls and Procedures	3933

	PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	4034

Item 1A.	Risk Factors	4034

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4135

Item 3.	Defaults Upon Senior Securities	4135

Item 4.	Mine Safety Disclosures	4135

Item 5.	Other Information	4135

Item 6.	Exhibits	4236

SIGNATURES		4337


Table of Contents						COMPASS MINERALS INTERNATIONAL, INC.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

COMPASS MINERALS INTERNATIONAL, INC.

CONSOLIDATED BALANCE SHEETS

(in millions, except share data)


		(Unaudited)					(Unaudited)
		September 30, 2020		December 31, 2019			March 31, 2021		December 31, 2020
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	34.1	$	34.7	Cash and cash equivalents	$	42.8	$	10.6
Receivables, less allowance for doubtful accounts of $8.2 in 2020 and $9.4 in 2019		194.2		342.4
Receivables, less allowance for doubtful accounts of $4.3 in 2021 and $3.9 in 2020						Receivables, less allowance for doubtful accounts of $4.3 in 2021 and $3.9 in 2020	158.6		185.1
Inventories	Inventories	385.5		311.5		Inventories	219.9		299.9
Current assets held for sale						Current assets held for sale	338.8		206.5
Other	Other	71.6		96.4		Other	49.0		55.1
Total current assets	Total current assets	685.4		785.0		Total current assets	809.1		757.2
Property, plant and equipment, net	Property, plant and equipment, net	944.8		1,030.8		Property, plant and equipment, net	845.0		851.7
Intangible assets, net	Intangible assets, net	83.5		103.0		Intangible assets, net	49.9		49.9
Goodwill	Goodwill	260.7		343.0		Goodwill	56.4		55.7
Investment in equity investee		24.4		24.9
Noncurrent assets held for sale						Noncurrent assets held for sale	0		404.1
Other	Other	159.0		156.5		Other	144.6		143.8
Total assets	Total assets	$	2,157.8	$	2,443.2	Total assets	$	1,905.0	$	2,262.4

LIABILITIES AND STOCKHOLDERS’ EQUITY	LIABILITIES AND STOCKHOLDERS’ EQUITY					LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:	Current liabilities:					Current liabilities:
Current portion of long-term debt	Current portion of long-term debt	$	56.4	$	52.1	Current portion of long-term debt	$	0	$	10.0
Accounts payable	Accounts payable	121.5		126.2		Accounts payable	104.6		82.6
Accrued salaries and wages	Accrued salaries and wages	34.4		34.4		Accrued salaries and wages	16.0		21.7
Income taxes payable	Income taxes payable	9.0		10.4		Income taxes payable	0.6		5.1
Accrued interest	Accrued interest	16.4		11.3		Accrued interest	14.1		9.0
Current liabilities held for sale						Current liabilities held for sale	199.3		111.5
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	64.1		61.5		Accrued expenses and other current liabilities	58.8		56.4
Total current liabilities	Total current liabilities	301.8		295.9		Total current liabilities	393.4		296.3
Long-term debt, net of current portion	Long-term debt, net of current portion	1,289.2		1,363.9		Long-term debt, net of current portion	1,184.0		1,299.1
Deferred income taxes, net	Deferred income taxes, net	80.8		89.9		Deferred income taxes, net	60.8		60.0
Noncurrent liabilities held for sale						Noncurrent liabilities held for sale	0		76.1
Other noncurrent liabilities	Other noncurrent liabilities	161.9		163.9		Other noncurrent liabilities	143.5		143.9
Commitments and contingencies (Note 9)	Commitments and contingencies (Note 9)					Commitments and contingencies (Note 9)	0		0
Stockholders’ equity:	Stockholders’ equity:					Stockholders’ equity:
Common stock: $0.01 par value, 200,000,000 authorized shares; 35,367,264 issued shares	Common stock: $0.01 par value, 200,000,000 authorized shares; 35,367,264 issued shares	0.4		0.4		Common stock: $0.01 par value, 200,000,000 authorized shares; 35,367,264 issued shares	0.4		0.4
Additional paid-in capital	Additional paid-in capital	124.5		117.1		Additional paid-in capital	131.3		127.0
Treasury stock, at cost — 1,412,126 shares at September 30, 2020 and 1,481,611 shares at December 31, 2019		(4.4)		(3.2)
Treasury stock, at cost — 1,390,182 shares at March 31, 2021 and 1,407,926 shares at December 31, 2020						Treasury stock, at cost — 1,390,182 shares at March 31, 2021 and 1,407,926 shares at December 31, 2020	(4.4)		(4.4)
Retained earnings	Retained earnings	560.1		607.4		Retained earnings	319.5		567.3
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(356.5)		(192.1)		Accumulated other comprehensive loss	(323.5)		(303.3)
Total stockholders’ equity	Total stockholders’ equity	324.1		529.6		Total stockholders’ equity	123.3		387.0
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	2,157.8	$	2,443.2	Total liabilities and stockholders’ equity	$	1,905.0	$	2,262.4

The accompanying notes are an integral part of the consolidated financial statements.


Table of Contents						COMPASS MINERALS INTERNATIONAL, INC.

COMPASS MINERALS INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in millions, except share and per share data)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2020		2019		2020		2019			2021		2020
Sales	Sales	$	282.4	$	341.3	$	952.4	$	990.2	Sales	$	426.0	$	346.9
Shipping and handling cost	Shipping and handling cost	43.6		54.4		185.9		215.3		Shipping and handling cost	123.2		98.5
Product cost	Product cost	180.1		210.5		554.2		580.1		Product cost	206.8		173.2
Gross profit	Gross profit	58.7		76.4		212.3		194.8		Gross profit	96.0		75.2
Selling, general and administrative expenses	Selling, general and administrative expenses	41.3		46.3		126.2		127.4		Selling, general and administrative expenses	32.4		29.8
Operating earnings	Operating earnings	17.4		30.1		86.1		67.4		Operating earnings	63.6		45.4

Other expense (income):	Other expense (income):									Other expense (income):
Interest expense	Interest expense	17.1		17.7		53.3		50.7		Interest expense	15.7		16.6
Net earnings in equity investee		(0.3)		(0.4)		(0.4)		(0.4)
Loss (gain) on foreign exchange	Loss (gain) on foreign exchange	4.1		(1.8)		(5.2)		7.3		Loss (gain) on foreign exchange	2.1		(18.0)
Other, net		(0.1)		(0.8)		(0.4)		(1.9)
(Loss) earnings before income taxes		(3.4)		15.4		38.8		11.7
Income tax (benefit) expense		(1.3)		4.8		11.6		5.3
Other expense, net										Other expense, net	0.3		0.3
Earnings from continuing operations before income taxes										Earnings from continuing operations before income taxes	45.5		46.5
Income tax expense for continuing operations										Income tax expense for continuing operations	12.6		12.6
Net earnings from continuing operations										Net earnings from continuing operations	32.9		33.9
Net loss from discontinued operations										Net loss from discontinued operations	(256.5)		(6.3)
Net (loss) earnings	Net (loss) earnings	$	(2.1)	$	10.6	$	27.2	$	6.4	Net (loss) earnings	$	(223.6)	$	27.6

Basic net earnings from continuing operations per common share										Basic net earnings from continuing operations per common share	$	0.96	$	0.99
Basic net loss from discontinued operations per common share										Basic net loss from discontinued operations per common share	(7.55)		(0.19)
Basic net (loss) earnings per common share	Basic net (loss) earnings per common share	$	(0.07)	$	0.31	$	0.78	$	0.17	Basic net (loss) earnings per common share	$	(6.59)	$	0.80

Diluted net earnings from continuing operations per common share										Diluted net earnings from continuing operations per common share	$	0.95	$	0.99
Diluted net loss from discontinued operations per common share										Diluted net loss from discontinued operations per common share	(7.55)		(0.19)
Diluted net (loss) earnings per common share	Diluted net (loss) earnings per common share	$	(0.07)	$	0.31	$	0.76	$	0.17	Diluted net (loss) earnings per common share	$	(6.60)	$	0.80

Weighted-average common shares outstanding (in thousands):	Weighted-average common shares outstanding (in thousands):									Weighted-average common shares outstanding (in thousands):
Basic	Basic	33,947		33,884		33,918		33,880		Basic	33,974		33,892
Diluted	Diluted	33,947		33,884		33,918		33,880		Diluted	34,012		33,892

The accompanying notes are an integral part of the consolidated financial statements.


Table of Contents						COMPASS MINERALS INTERNATIONAL, INC.

COMPASS MINERALS INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE ~~INCOME (LOSS)~~LOSS

(Unaudited, in millions)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2020		2019		2020		2019			2021		2020
Net (loss) earnings	Net (loss) earnings	$	(2.1)	$	10.6	$	27.2	$	6.4	Net (loss) earnings	$	(223.6)	$	27.6
Other comprehensive income (loss):	Other comprehensive income (loss):									Other comprehensive income (loss):
Unrealized gain from change in pension obligations, net of tax of $(0.1) in both the three and nine months ended September 30, 2020 and $(0.0) in both the three and nine months ended September 30, 2019.		0.1		0.1		0.5		0.3
Unrealized (loss) gain on cash flow hedges, net of tax of $0.3 and $(0.0) in the three and nine months ended September 30, 2020, respectively, and $(0.1) and $(0.0) in the three and nine months ended September 30, 2019, respectively.		(0.7)		0.3		0.1		0

Unrealized gain from change in pension obligations, net of tax of $(0.1) in 2021 and $0.0 in 2020										Unrealized gain from change in pension obligations, net of tax of $(0.1) in 2021 and $0.0 in 2020	0.2		0.2
Unrealized gain on cash flow hedges, net of tax of $0.0 in both 2021 and 2020										Unrealized gain on cash flow hedges, net of tax of $0.0 in both 2021 and 2020	0.1		0.1
Cumulative translation adjustment	Cumulative translation adjustment	6.4		(50.7)		(165.0)		(17.9)		Cumulative translation adjustment	(20.5)		(173.5)
Comprehensive income (loss)		$	3.7	$	(39.7)	$	(137.2)	$	(11.2)
Comprehensive loss										Comprehensive loss	$	(243.8)	$	(145.6)

The accompanying notes are an integral part of the consolidated financial statements.


Table of Contents						COMPASS MINERALS INTERNATIONAL, INC.

COMPASS MINERALS INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020

(Unaudited, in millions)

Common
Stock Additional
Paid-In
Capital Treasury
Stock Retained
Earnings Accumulated
Other
Comprehensive
Loss Total
Balance, December 31, 2019 $ 0.4 $ 117.1 $ (3.2) $ 607.4 $ (192.1) $ 529.6
Comprehensive income (loss) 27.6 (173.2) (145.6)
Dividends on common stock ($0.72 per share) 0.1 (24.9) (24.8)
Shares issued for stock units, net of shares withheld for taxes (0.1) (0.1)
Stock-based compensation 2.4 2.4
Balance, March 31, 2020 $ 0.4 $ 119.6 $ (3.3) $ 610.1 $ (365.3) $ 361.5
Comprehensive income 1.7 3.0 4.7
Dividends on common stock ($0.72 per share) 0.1 (24.8) (24.7)
Shares issued for stock units, net of shares withheld for taxes (0.1) (0.5) (0.6)
Stock-based compensation 2.7 2.7
Balance, June 30, 2020 $ 0.4 $ 122.3 $ (3.8) $ 587.0 $ (362.3) $ 343.6
Comprehensive (loss) income (2.1) 5.8 3.7
Dividends on common stock ($0.72 per share) 0.1 (24.8) (24.7)
Shares issued for stock units, net of shares withheld for taxes (0.1) (0.5) (0.6)
Stock options exercised, net of shares withheld for taxes 0.1 (0.1) 0
Stock-based compensation 2.1 2.1
Balance, September 30, 2020 $ 0.4 $ 124.5 $ (4.4) $ 560.1 $ (356.5) $ 324.1

~~The accompanying notes are an integral part of the consolidated financial statements.~~

~~Table of Contents~~

~~COMPASS MINERALS INTERNATIONAL, INC.~~

~~CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY~~

~~For the three and nine months ended September 30, 2019~~

~~(Unaudited, in millions)~~


	Common Stock		Additional Paid-In Capital		Treasury Stock		Retained Earnings		Accumulated Other Comprehensive Loss		Total
Balance, December 31, 2020	$	0.4	$	127.0	$	(4.4)	$	567.3	$	(303.3)	$	387.0
Comprehensive loss	—		—		—		(223.6)		(20.2)		(243.8)
Dividends on common stock ($0.72 per share)	—		0.1		—		(24.2)		—		(24.1)
Stock options exercised, net of shares withheld for taxes	—		0.2		—		—		—		0.2
Stock-based compensation	—		4.0		—		—		—		4.0
Balance, March 31, 2021	$	0.4	$	131.3	$	(4.4)	$	319.5	$	(323.5)	$	123.3


		Common Stock		Additional Paid-In Capital		Treasury Stock		Retained Earnings		Accumulated Other Comprehensive Loss		Total			Common Stock		Additional Paid-In Capital		Treasury Stock		Retained Earnings		Accumulated Other Comprehensive Loss		Total
Balance, December 31, 2018		$	0.4	$	110.1	$	(2.9)	$	643.5	$	(210.9)	$	540.2
Comprehensive income								7.6		14.7		22.3
Cumulative effect of change in accounting principle								(0.1)				(0.1)
Balance, December 31, 2019														Balance, December 31, 2019	$	0.4	$	117.1	$	(3.2)	$	607.4	$	(192.1)	$	529.6
Comprehensive income (loss)														Comprehensive income (loss)	—		—		—		27.6		(173.2)		(145.6)
Dividends on common stock ($0.72 per share)	Dividends on common stock ($0.72 per share)			0.1				(24.6)				(24.5)		Dividends on common stock ($0.72 per share)	—		0.1		—		(24.9)		—		(24.8)
Shares issued for stock units, net of shares withheld for taxes	Shares issued for stock units, net of shares withheld for taxes					(0.2)						(0.2)		Shares issued for stock units, net of shares withheld for taxes	—		—		(0.1)		—		—		(0.1)
Stock-based compensation	Stock-based compensation			1.1								1.1		Stock-based compensation	—		2.4		—		—		—		2.4
Balance, March 31, 2019		$	0.4	$	111.3	$	(3.1)	$	626.4	$	(196.2)	$	538.8
Comprehensive (loss) income								(11.8)		18.0		6.2
Dividends on common stock ($0.72 per share)				0.1				(24.8)				(24.7)
Shares issued for stock units, net of shares withheld for taxes						(0.1)						(0.1)
Stock-based compensation				2.7								2.7
Balance, June 30, 2019		$	0.4	$	114.1	$	(3.2)	$	589.8	$	(178.2)	$	522.9
Comprehensive income (loss)								10.6		(50.3)		(39.7)
Dividends on common stock ($0.72 per share)				0.1				(24.4)				(24.3)
Balance, March 31, 2020														Balance, March 31, 2020	$	0.4	$	119.6	$	(3.3)	$	610.1	$	(365.3)	$	361.5

Stock-based compensation				0.6								0.6
Balance September 30, 2019		$	0.4	$	114.8	$	(3.2)	$	576.0	$	(228.5)	$	459.5

The accompanying notes are an integral part of the consolidated financial statements.


Table of Contents						COMPASS MINERALS INTERNATIONAL, INC.

COMPASS MINERALS INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in millions)


		Nine Months Ended September 30,					Three Months Ended March 31,
		2020		2019			2021		2020
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net earnings		$	27.2	$	6.4
Adjustments to reconcile net earnings to net cash flows provided by operating activities:
Net (loss) earnings						Net (loss) earnings	$	(223.6)	$	27.6
Adjustments to reconcile net (loss) earnings to net cash flows provided by operating activities:						Adjustments to reconcile net (loss) earnings to net cash flows provided by operating activities:
Depreciation, depletion and amortization	Depreciation, depletion and amortization	103.6		102.8		Depreciation, depletion and amortization	34.6		33.1
Finance fee amortization	Finance fee amortization	2.4		2.1		Finance fee amortization	0.8		0.8
Early extinguishment of debt		0.1		0
Stock-based compensation	Stock-based compensation	7.2		4.0		Stock-based compensation	4.0		2.4
Deferred income taxes	Deferred income taxes	4.9		(10.2)		Deferred income taxes	(1.0)		7.5
Net earnings in equity investee		(0.4)		(0.4)
Unrealized foreign exchange (gain) loss		(8.4)		8.5
Unrealized foreign exchange loss (gain)						Unrealized foreign exchange loss (gain)	5.6		(18.0)
Loss on impairment of long-lived assets						Loss on impairment of long-lived assets	253.1		0
Other, net	Other, net	5.6		6.2		Other, net	0.4		3.5
Changes in operating assets and liabilities:	Changes in operating assets and liabilities:					Changes in operating assets and liabilities:
Receivables	Receivables	111.0		90.0		Receivables	17.8		87.1
Inventories	Inventories	(96.2)		(75.2)		Inventories	73.6		36.6
Other assets	Other assets	8.6		4.8		Other assets	(1.9)		54.5
Accounts payable and accrued expenses and other current liabilities	Accounts payable and accrued expenses and other current liabilities	21.2		(26.3)		Accounts payable and accrued expenses and other current liabilities	37.2		(4.9)
Other liabilities	Other liabilities	1.7		(14.8)		Other liabilities	(0.4)		(1.6)
Net cash provided by operating activities	Net cash provided by operating activities	188.5		97.9		Net cash provided by operating activities	200.2		228.6
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Capital expenditures	Capital expenditures	(62.9)		(71.6)		Capital expenditures	(18.2)		(25.3)
Other, net	Other, net	(2.3)		(1.6)		Other, net	2.0		(0.6)
Net cash used in investing activities	Net cash used in investing activities	(65.2)		(73.2)		Net cash used in investing activities	(16.2)		(25.9)
Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Proceeds from revolving credit facility borrowings	Proceeds from revolving credit facility borrowings	144.3		288.8		Proceeds from revolving credit facility borrowings	6.3		46.2
Principal payments on revolving credit facility borrowings	Principal payments on revolving credit facility borrowings	(204.1)		(235.4)		Principal payments on revolving credit facility borrowings	(136.6)		(147.2)
Proceeds from issuance of long-term debt	Proceeds from issuance of long-term debt	66.1		58.1		Proceeds from issuance of long-term debt	69.8		22.0
Principal payments on long-term debt	Principal payments on long-term debt	(46.7)		(62.2)		Principal payments on long-term debt	(55.1)		(18.7)
Dividends paid	Dividends paid	(74.2)		(73.6)		Dividends paid	(24.1)		(24.8)
Deferred financing costs	Deferred financing costs	(1.1)		(0.3)		Deferred financing costs	(0.1)		(0.1)
Shares withheld to satisfy employee tax obligations		(1.2)		(0.3)
Other, net	Other, net	(1.4)		(0.9)		Other, net	(0.5)		(0.2)
Net cash used in financing activities	Net cash used in financing activities	(118.3)		(25.8)		Net cash used in financing activities	(140.3)		(122.8)
Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	(5.6)		(2.0)		Effect of exchange rate changes on cash and cash equivalents	(1.1)		(4.8)
Net change in cash and cash equivalents	Net change in cash and cash equivalents	(0.6)		(3.1)		Net change in cash and cash equivalents	42.6		75.1
Cash and cash equivalents, beginning of the year	Cash and cash equivalents, beginning of the year	34.7		27.0		Cash and cash equivalents, beginning of the year	21.0		34.7
Cash and cash equivalents, end of period	Cash and cash equivalents, end of period	$	34.1	$	23.9	Cash and cash equivalents, end of period	63.6		109.8
Less: cash and cash equivalents included in current assets held for sale						Less: cash and cash equivalents included in current assets held for sale	(20.8)		(15.8)
Cash and cash equivalents of continuing operations, end of period						Cash and cash equivalents of continuing operations, end of period	$	42.8	$	94.0


Supplemental cash flow information:	Supplemental cash flow information:					Supplemental cash flow information:
Interest paid, net of amounts capitalized	Interest paid, net of amounts capitalized	$	43.3	$	47.6	Interest paid, net of amounts capitalized	$	10.5	$	11.3
Income taxes paid, net of refunds	Income taxes paid, net of refunds	$	(18.5)	$	48.6	Income taxes paid, net of refunds	$	14.7	$	(37.7)

The accompanying notes are an integral part of the consolidated financial statements.


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COMPASS MINERALS INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Accounting Policies and Basis of Presentation:

Compass Minerals International, Inc. (“CMI”), through its subsidiaries (collectively, the “Company”), is a leading producer of essential minerals ~~that~~focused on safely delivering where and when it matters to help solve nature’s challenges ~~including~~for customers and communities. The Company’s salt ~~for~~products help keep roadways safe during winter ~~roadway safety~~weather and are used in numerous other consumer, industrial and agricultural ~~uses, specialty~~applications. Its plant nutrition ~~minerals that~~products improve the quality and yield of crops, ~~and specialty chemicals for water treatment and other industrial processes.~~while supporting sustainable agriculture. The Company’s principal products are salt, consisting of sodium chloride and magnesium ~~chloride;~~chloride and plant nutrients, consisting of sulfate of potash (“SOP”~~), secondary nutrients and micronutrients; and specialty chemicals. The Company also provides records management services to businesses located in the United Kingdom (the “U.K.”~~). The Company’s production sites are located in the United States (“U.S.”), Canada ~~Brazil~~ and the United Kingdom (“U.K.”). The Company also provides records management services to businesses located in the U.K. Except where otherwise noted, references to North America include only the continental U.S. and Canada, and references to the U.K. include only England, Scotland and Wales. References to “Compass Minerals,” “our,” “us” and “we” refer to CMI and its consolidated subsidiaries.

CMI is a holding company with no significant operations other than those of its wholly-owned subsidiaries. The consolidated financial statements include the accounts of CMI and its wholly-owned domestic and foreign subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

The Company uses the equity method of accounting for equity securities when it has significant influence or when it has more than a minor ownership interest or more than minor influence over an investee’s operations but does not have a controlling financial interest. Initial investments are recorded at cost (including certain transaction costs) and are adjusted by the Company’s share of the investees’ undistributed earnings and losses.

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company for the year ended December 31, ~~2019,~~2020, as filed with the Securities and Exchange Commission (“SEC”) in its Annual Report on Form ~~10-K.~~10-K on February 26, 2021. In the opinion of management, all adjustments, consisting of normal recurring adjustments considered necessary for a fair presentation, have been included.

The Company experiences a substantial amount of seasonality in its sales, ~~with respect to~~including its deicing salt ~~products.~~product sales. As a result, Salt segment sales and operating earnings are generally higher in the first and fourth quarters and lower during the second and third quarters of each year. In particular, sales of highway and consumer deicing salt and magnesium chloride products vary based on the severity of the winter conditions in areas where the products are used. Following industry practice in North America and the U.K., the Company seeks to stockpile sufficient quantities of deicing salt throughout the second, third and fourth quarters to meet the estimated requirements for the ~~upcoming~~ winter season. Production of deicing salt can also vary based on the severity or mildness of the preceding winter season. Due to the seasonal nature of the deicing product lines, operating results for the interim periods are not necessarily indicative of the results that may be expected for the full fiscal year.

The Company’s plant nutrition business is also seasonal. For example, the strongest demand for the Company’s plant nutrition products in Brazil typically occurs during the spring planting season. As a result, the Company and its customers generally build inventories during the low demand periods of the year to ensure timely product availability during the peak sales season. The seasonality of this demand results in the Company’s sales volumes and operating income for the Plant Nutrition South America segment usually being the highest during the third and fourth quarters of each year (as the spring planting season begins in September in Brazil).

Significant Accounting Policies

The Company’s significant accounting policies are detailed in “Note 2 – Summary of Significant Accounting Policies” within Part II, Item 8 of ~~the Company’s~~its Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020. The Company reports its financial results from discontinued operations and continuing operations separately to recognize the financial impact of disposal transactions from ongoing operations. Discontinued operations reporting occurs when a component or a group of components of an entity has been disposed of or classified as held for sale and represents a strategic shift that has a major effect on the entity’s operations and financial results. In the Company’s Consolidated Statements of Cash Flows, the cash flows from discontinued operations are not separately classified. The Company has reclassified certain prior year amounts, including the results of discontinued operations, assets and liabilities held for sale and reportable segment information, to conform to the current year presentation. Unless otherwise indicated, amounts provided in these Notes pertain to continuing operations. See Note 2 for information on discontinued operations and Note 10 for information on the Company’s reportable segments.

Recent Accounting Pronouncements

~~In January 2017, the Financial Accounting Standards Board (“FASB”) issued guidance to simplify the accounting for goodwill impairment.~~ The ~~guidance removes Step 2~~Company has evaluated all of the ~~goodwill impairment test, which requires a hypothetical purchase price~~

~~Table~~recently issued, but not yet effective, accounting standards that have been issued or proposed by the FASB or other standards-setting bodies through the filing date of ~~Contents~~

~~allocation. A goodwill impairment will now be~~these unaudited consolidated financial statements and does not believe the ~~amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. All other goodwill impairment guidance remains largely unchanged. The~~future adoption of ~~this guidance on January 1, 2020, did not~~any such pronouncements will have ana material impact on ~~the Company’s~~its consolidated financial statements.

~~On January 1,~~


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Strategic Evaluation and Plan to Sell Businesses

During 2020, the Company adopted guidance issued by the FASB related to credit losses for financial instruments, which replaces the incurred loss methodology with a current expected credit loss methodology (“CECL”). The Company has determined that its receivables are the only financial instrument that is within scope of this CECL guidance. The CECL methodology requires financial assets to be recorded at the net amount expected to be collected over the lifetimeinitiated an evaluation of the asset such that the estimated losses are accrued on the day the asset is acquired. The CECL methodology also requires financial assets to be aggregated and evaluated within pools with similar risk characteristics.

~~The Company has recorded an allowance on its receivables based on historical loss rates modified to consider supportable forecasts related to customer-specific and macroeconomic factors. For instance,~~strategic fit of certain of the Company’s ~~2020 allowance~~businesses. On February 16, 2021, the Company announced its plan to restructure its former Plant Nutrition South America segment to enable targeted and separate sales processes for ~~doubtful accounts considered~~each portion of the ~~potential impact that~~former segment, including its chemicals and specialty plant nutrition businesses along with the ~~coronavirus pandemic could have on~~Company’s equity method investment in Fermavi Eletroquímica Ltda. (“Fermavi”). Concurrently, to optimize its asset base in North America, the ~~collectability~~Company evaluated the strategic fit of its ~~outstanding receivables.~~North America micronutrient product business. On March 16, 2021, the Board of the Directors of the Company approved a plan to sell the Company’s South America chemicals and specialty plant nutrition businesses, investment in Fermavi and North America micronutrient product business (collectively, the “Specialty Businesses”) with the goal of reducing the Company’s leverage and enabling increased focus on optimizing the Company’s core businesses. The South America chemicals and specialty plant nutrition businesses and investment in Fermavi were previously reported as the Company’s ~~customer pools are comprised~~Plant Nutrition South America segment. The North America micronutrient product business was previously included as part of ~~North American highway deicing customers, North American consumer and industrial customers,~~the Company’s Plant Nutrition North America ~~customers,~~segment, which has been renamed as the Plant Nutrition segment. The Company now has 2 reportable segments, Salt and Plant Nutrition, as discussed further in Note 10.

The Company concluded that the Specialty Businesses met the criteria for classification as held for sale upon receiving approval from its Board of Directors to sell the Specialty Businesses in the first quarter of 2021. In addition, the Company believes there is a single disposal plan representing a strategic shift that will have a material effect on its 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. 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 both periods presented and their results of operations are presented as discontinued operations in the Consolidated Statements of Operations for each period presented. Interest expense attributed to discontinued operations represents interest expense for loans in Brazil by the Company’s South America ~~customers~~chemicals and ~~customers whose outstanding receivable balances have been sent~~specialty plant nutrition businesses, which are expected to collections. Customers grouped within these pools have similar risk characteristics. The Company’s allowance for doubtful accounts consists of estimates of expected credit losses and accruals for returns and allowances. At the transition date of January 1, 2020, the implementation of CECL had an immaterial impact of less than $0.1 million onbe fully repaid from proceeds received from the Company’s ~~consolidated financial statements. Under CECL,~~sale of its South America specialty plant nutrition business.

As described further in Note 2, on March 23, 2021, and April 7, 2021, the Company ~~had an allowance for doubtful accounts~~entered into definitive agreements to sell its South America specialty plant nutrition business and a component of ~~$9.4 million~~its North America micronutrient business, respectively. The Company continues to actively pursue the sales of the remaining South America chemicals business and ~~$8.2 million as of January 1, 2020,~~its investment in Fermavi, and ~~September 30, 2020, respectively.~~the Company believes these sales are probable to occur within the next twelve months.

2. ~~Revenue Recognition:~~Discontinued Operations:

On March 23, 2021, the Company entered into a definitive agreement to sell its South America specialty plant nutrition business to ICL Brasil Ltda., a subsidiary of ICL Group Ltd., for R$1.11 billion Brazilian reais plus an amount that will be set at closing to equal $198.3 million U.S. dollars, subject to certain adjustments for net debt and working capital. The terms of the agreement provide for an additional earn-out payment of up to R$88 million Brazilian reais, payable in 2022 and which will be calculated on a sliding scale if the South America specialty plant nutrition business achieves certain full-year 2021 earnings before interest, taxes, depreciation and amortization (“EBITDA”) performance targets. The transaction is expected to close in the third quarter of 2021, subject to customary closing conditions and required antitrust approval in Brazil. The Company and ICL Brasil Ltda. have also agreed to enter into a Reverse Transition Services Agreement, which will govern the parties respective rights and obligations with respect to the provision of certain transition services to the Company’s Brazil subsidiaries after closing. The Reverse Transition Services Agreement has a term of 18 months and allows the Company’s remaining Brazil subsidiaries to assign their rights and obligations with respect to the transition services to any buyer of a sufficient portion of their assets.

On April 7, 2021, the Company entered into a definitive agreement to sell a component of its North America micronutrient business to Koch Agronomic Services, LLC, a subsidiary of Koch Industries, for approximately $60.25 million, subject to a closing working capital adjustment. The transaction closed on May 4, 2021.

In measuring the assets and liabilities held for sale at fair value less estimated costs to sell, the Company completed an impairment analysis when its Board of Directors committed to a plan to sell the Specialty Businesses. Management evaluated indicators of fair value of each of the Specialty Businesses, including the net proceeds expected to be realized at closing of the transactions described above to sell its South America specialty plant nutrition business and a component of its North America micronutrient business, in addition to indications of fair value received from third parties in connection with the marketing of the remaining South America chemicals business and the investment in Fermavi. A significant portion of the Company’s foreign currency translation adjustment (“CTA”) balance as of March 31, 2021, is related to the foreign exchange translation of the Specialty Businesses’ balance sheet. The CTA loss balance of the Specialty Businesses was considered in the Company’s


Table of Contents						COMPASS MINERALS INTERNATIONAL, INC.

determination of the impairment loss. The Company recognized a total impairment loss of $255.2 million included in its loss from discontinued operations in its Consolidated Statement of Operations for the three months ended March 31, 2021. The impairment is due primarily to the translation of the net assets of the Company’s Brazil subsidiaries from Brazilian reais to U.S. dollars, which has been reported in CTA. The impairment loss for its South America chemicals and specialty plant nutrition businesses was $92.7 million and $154.5 million, respectively, inclusive of CTA. The amount recorded in CTA will not be eliminated until there is a substantial liquidation of the applicable foreign entity. The Company also recognized an impairment loss of $8.0 million on its investment in Fermavi. There was 0 impairment for its North America micronutrient product business.

As described above, the Company has entered into definitive agreements to sell its South America specialty plant nutrition business and a component of its North America micronutrient business on March 23, 2021, and April 7, 2021, respectively. The Company’s determination of the net proceeds to be realized at closing of each transaction involves certain estimates and judgments based on, among other items: (i) management’s interpretation and application of key terms of each definitive agreement, (ii) certain balance sheet amounts of the business or asset group as of March 31, 2021, and (iii) certain projections of costs to be incurred through an estimated future closing date. The balances of net working capital, cash and debt, and deductions, are subject to future change based on the operations of the business from March 31, 2021, through the closing date, and estimated costs to sell the business could differ from actual results. As such, a change in the impairment loss associated with the Specialty Businesses could occur in a future period, including upon closing of the transactions described above or thereafter.

In addition to calculating an estimate of net proceeds expected to be realized at closing, as described above, certain additional judgments, estimates and other reporting matters related to discontinued operations include matters discussed in the following paragraphs.

As discussed in Note 1, the North America micronutrient product business was previously reported in the Company’s Plant Nutrition North America segment (which is now known as the Plant Nutrition segment), which aligns with the Plant Nutrition North America reporting unit for purposes of evaluating goodwill. Based on the Company’s assessment of the estimated relative fair values of the North America micronutrient product business and the remaining business from the former Plant Nutrition North America reporting unit, the Company performed an allocation of goodwill between the North America micronutrient product business classified as held for sale and the business being retained, which resulted in $6.9 million and $6.8 million of goodwill allocated to the North America micronutrient product business as of March 31, 2021, and December 31, 2020, respectively. See Note 6 for additional details. An allocation of goodwill related to the former Plant Nutrition South America segment was not required as of March 31, 2021, as the entire segment and related goodwill is classified as held for sale at March 31, 2021, and December 31, 2020.

The information below sets forth selected financial information related to operating results of the Specialty Businesses classified as discontinued operations. While the reclassification of revenue and expenses related to discontinued operations from prior periods have no impact upon previously reported results, the Consolidated Balance Sheets present the assets and liabilities that were reclassified from the specified line items to assets and liabilities held for sale and the Consolidated Statements of Operations present the revenue and expenses that were reclassified from the specified line items to discontinued operations.


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The following table represents summarized balance sheet information of assets and liabilities held for sale (in millions):


	March 31, 2021		December 31, 2020
Cash and cash equivalents	$	20.8	$	10.5
Receivables, less allowance for doubtful accounts of $6.7 in 2021 and $7.1 in 2020	111.4		111.5
Inventories	72.5		70.7
Property, plant and equipment, net	103.3		0
Goodwill	207.6		0
Loss recognized on held for sale classification	(255.2)		0
Other	78.4		13.8
Current assets held for sale	$	338.8	$	206.5

Property, plant and equipment, net	$	0	$	113.2
Goodwill	0		225.5
Other	0		65.4
Noncurrent assets held for sale	$	0	$	404.1

Current portion of long-term debt	$	94.3	$	53.7
Accounts payable	48.9		34.3
Accrued expenses and other current liabilities	56.1		23.5
Current liabilities held for sale	$	199.3	$	111.5

Long-term debt, net of current portion	$	0	$	38.6
Other noncurrent liabilities	0		37.5
Noncurrent liabilities held for sale	$	0	$	76.1

The following table represents summarized statements of operations information of discontinued operations (in millions):


	Three Months Ended March 31,
	2021		2020
Sales	$	85.4	$	67.0
Shipping and handling cost	3.8		3.3
Product cost	62.8		51.6
Gross profit	18.8		12.1
Selling, general and administrative expenses	13.5		13.3
Operating earnings (loss)	5.3		(1.2)
Interest expense	1.7		2.4
Loss on foreign exchange	4.3		3.7
Loss on impairment	255.2		0
Other income, net	(0.4)		(0.1)
Loss from discontinued operations before income taxes	(255.5)		(7.2)
Income tax expense (benefit)	1.0		(0.9)
Net loss from discontinued operations	$	(256.5)	$	(6.3)


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The significant components included in our Consolidated Statements of Cash Flows for the discontinued operations are as follows (in millions):


	Three Months Ended March 31,
	2021		2020
Depreciation, depletion and amortization	$	4.7	$	5.7
Loss on impairment of long-lived assets	253.1		0
Capital expenditures	1.6		1.4
Proceeds from issuance of long-term debt	21.0		22.0
Principal payments on long-term debt	(10.9)		(16.2)

3. Revenues:

Nature of Products and Services

The Company’s Salt segment products include salt and magnesium chloride for use in road deicing and dust control, food processing, water softeners, and agricultural and industrial ~~applications. The~~applications and the Company’s ~~plant nutrition~~Plant Nutrition segment products include ~~SOP, secondary nutrients, micronutrients and chemicals for the industrial chemical industry.~~various grades of SOP. In the U.K., the Company operates a records management business utilizing excavated areas of the Winsford salt mine with one other location in London, England.

Identifying the Contract

The Company accounts for a customer contract when there is approval and commitment from both parties, the rights of the parties and payment terms are identified, the contract has commercial substance and collectability of consideration is probable.

Identifying the Performance Obligations

At contract inception, the Company assesses the goods and services it has promised to its customers and identifies a performance obligation for each promise to transfer to the customer a distinct good or service (or bundle of goods or services). Determining whether products and services are considered distinct performance obligations that should be accounted for separately or aggregated together may require significant judgment.

Identifying and Allocating the Transaction Price

The Company’s revenues are measured based on consideration specified in the customer contract, net of any sales incentives and amounts collected on behalf of third parties such as sales taxes. In certain cases, the Company’s customer contracts may include promises to transfer multiple products and services to a customer. For multiple-element arrangements, the Company generally allocates the transaction price to each performance obligation in proportion to its stand-alone selling price.

When Performance Obligations Are Satisfied

The vast majority of the Company’s revenues are recognized at a point in time when the performance obligations are satisfied based upon transfer of control of the product or service to a customer. To determine when the control of goods is transferred, the Company typically assesses, among other things, the shipping terms of the contract, as shipping is an indicator of transfer of control. Some of the Company’s products are sold when the control of the goods transfers to the customer at the time of shipment. There are also instances when the Company provides shipping services to deliver its products. Shipping and handling costs that occur before the customer obtains control of the goods are deemed to be fulfillment activities and are accounted for as fulfillment costs. The Company recognizes shipping and handling costs that are incurred after the customer obtains control of the goods as fulfillment costs which are accrued at the time of revenue recognition.

~~Table of Contents~~

Significant Payment Terms

The customer contract states the final terms of the sale, including the description, quantity and price of each product or service purchased. Payment is typically due in full within 30 days of delivery. The Company does not adjust the consideration for the


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effects of a significant financing component if the Company expects, at contract inception, that the period between when the good or service is transferred to the customer and when the customer pays for that good or service will be one year or less.

Refunds, Returns and Warranties

The Company’s products are generally not sold with a right of return and the Company does not generally provide credits or incentives, which may be required to be accounted for as variable consideration when estimating the amount of revenue to be recognized. The Company uses historical experience to estimate accruals for refunds due to manufacturing or other defects.

See Note 10 for disaggregation of ~~revenue~~sales by segment, type and geographical region.

~~3. Leases:~~

In February 2016, the FASB issued guidance which requires lessees to recognize on their balance sheet a right-of-use asset which represents a lessee’s right to use the underlying asset and a lease liability which represents a lessee’s obligation to make lease payments for the right to use the asset. In addition, the guidance requires expanded qualitative and quantitative disclosures. The Company adopted this guidance beginning in the first quarter of 2019, using a modified retrospective transition method, which required the cumulative effect of this change in accounting of $0.1 million to be recorded as an adjustment to beginning retained earnings. The Company elected the package of transition provisions available for existing contracts, which allowed entities to carryforward the historical assessment of whether the contract contained a lease and the lease classification.

The Company enters into leases for warehouses and depots, rail cars, vehicles, mobile equipment, office space and certain other types of property and equipment. The Company determines whether an arrangement is or contains a lease at the inception of the contract. The right-of-use asset and lease liability are recognized based on the present value of the future minimum lease payments over the estimated lease term. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The Company estimates its incremental borrowing rate for each lease based upon the estimated lease term, the type of asset and the location of the leased asset. The most significant judgments in the application of the FASB guidance include whether a contract contains a lease and the lease term.

Leases with an initial term of 12 months or less are not recorded on the Company’s Consolidated Balance Sheets. The Company recognizes lease expense for these short-term leases on a straight-line basis over the lease term. Many of the Company’s leases include one or more options to renew and extend the initial lease term. The exercise of lease renewal options is generally at the Company’s discretion. The lease term includes renewal periods in only those instances in which the Company determines it is reasonably assured of renewal.

The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. In these instances, the assets are depreciated over the useful life of the asset.

The Company has elected the practical expedient available under the FASB guidance to not separate lease and nonlease components on all of its lease categories. As a result, many of the Company’s leases include variable payments for services (such as handling or storage) or payments based on the usage of the asset. In addition, certain of the Company’s lease agreements include rental payments that are adjusted periodically for inflation. The Company’s lease agreements do not contain any material residual value guarantees or any material restrictive covenants. The Company’s sublease income is immaterial.

~~Table of Contents~~

~~The Company’s Consolidated Balance Sheets includes the following (in millions):~~

Consolidated Balance Sheets Location September 30,
2020 December 31,
2019
Assets
Operating leases Other assets $ 56.2 $ 53.7
Finance leases Property, plant and equipment, net 6.8 5.8
Total leased assets $ 63.0 $ 59.5
Liabilities
Current liabilities:
Operating leases Accrued expenses and other current liabilities $ 13.1 $ 12.8
Finance leases Accrued expenses and other current liabilities 1.3 1.1
Noncurrent liabilities:
Operating leases Other noncurrent liabilities 43.8 41.0
Finance leases Other noncurrent liabilities 6.4 6.2
Total lease liabilities $ 64.6 $ 61.1

~~The Company’s components of lease cost are as follows (in millions):~~

Three Months Ended September 30, Nine Months Ended
September 30,
2020 2019 2020 2019
Finance lease cost:
Amortization of lease assets $ 0.4 $ 0.3 $ 1.3 $ 0.9
Interest on lease liabilities 0.1 0.1 0.4 0.4
Operating lease cost 4.5 4.5 12.6 14.2
Variable lease cost(a)
2.0 3.6 8.9 13.6
Net lease cost $ 7.0 $ 8.5 $ 23.2 $ 29.1

~~(a)Short-term leases are immaterial and included in variable lease cost.~~

~~Maturities of lease liabilities are as follows (in millions):~~

September 30, 2020 Operating Leases Finance Leases Total
Remainder of 2020 $ 2.7 $ 0.5 $ 3.2
2021 16.0 1.6 17.6
2022 12.0 1.0 13.0
2023 7.7 0.9 8.6
2024 5.6 0.8 6.4
After 2024 22.8 6.4 29.2
Total lease payments 66.8 11.2 78.0
Less: Interest (9.9) (3.5) (13.4)
Present value of lease liabilities $ 56.9 $ 7.7 $ 64.6

~~Table of Contents~~

~~Supplemental lease term and discount rate information related to leases is as follows:~~

September 30, 2020 December 31, 2019
Weighted-average remaining lease term (years)
Operating leases 6.8 7.7
Finance leases 9.4 7.2
Weighted-average discount rate
Operating leases 3.9 % 4.3 %
Finance leases 7.4 % 7.6 %

~~Supplemental cash flow information related to leases is as follows (in millions):~~

Nine Months Ended
September 30,
2020 2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases $ 12.0 $ 14.2
Operating cash flows from finance leases 0.4 0.4
Financing cash flows from finance leases 1.4 0.9
Leased assets obtained in exchange for new operating lease liabilities 14.0 2.8
Leased assets obtained in exchange for new finance lease liabilities 3.2 0.1

4. Inventories:

Inventories consist of the following (in millions):

September 30,
2020 December 31,
2019
Finished goods $ 311.7 $ 235.3
Raw materials and supplies 73.8 76.2
Total inventories $ 385.5 $ 311.5

Based on the nature of our inventories, and specifically related to bulk SOP stockpiles, certain estimates are required to measure the amount of inventories at any point in time. During the third quarter of 2020, the Company identified an error in the valuation of its bulk SOP stockpile inventory at its Ogden facility when one of its stockpiles was largely depleted, which resulted in an estimated overstatement of inventory of approximately $7.4 million. The Company evaluated the error and believes it is not material to any previous period and has therefore recorded this additional expense to product cost within its Plant Nutrition North America segment during the third quarter of 2020.


	March 31, 2021		December 31, 2020
Finished goods	$	168.8	$	252.1
Raw materials and supplies	51.1		47.8
Total inventories	$	219.9	$	299.9

5. Property, Plant and Equipment, Net:

Property, plant and equipment, net, consists of the following (in millions):


		September 30, 2020		December 31, 2019			March 31, 2021		December 31, 2020
Land, buildings and structures, and leasehold improvements	Land, buildings and structures, and leasehold improvements	$	609.8	$	596.0	Land, buildings and structures, and leasehold improvements	$	547.8	$	544.5
Machinery and equipment	Machinery and equipment	1,023.1		1,001.9		Machinery and equipment	1,041.7		1,035.4
Office furniture and equipment	Office furniture and equipment	64.7		60.7		Office furniture and equipment	54.2		50.7
Mineral interests	Mineral interests	169.3		171.1		Mineral interests	168.9		172.4
Construction in progress	Construction in progress	81.7		141.3		Construction in progress	59.7		43.7
		1,948.6		1,971.0			1,872.3		1,846.7
Less accumulated depreciation and depletion		(1,003.8)		(940.2)
Less: accumulated depreciation and depletion						Less: accumulated depreciation and depletion	(1,027.3)		(995.0)
Property, plant and equipment, net	Property, plant and equipment, net	$	944.8	$	1,030.8	Property, plant and equipment, net	$	845.0	$	851.7

~~Table of Contents~~

6. Goodwill and Intangible Assets, Net:

Amounts related to the Company’s amortization of intangible assets are as follows (in millions):

Three Months Ended
September 30, Nine Months Ended
September 30,
2020 2019 2020 2019
Aggregate amortization expense $ 2.7 $ 3.3 $ 8.7 $ 10.3


	Three Months Ended March 31,
	2021		2020
Aggregate amortization expense	$	0.4	$	0.4

Amounts related to the Company’s goodwill are as follows (in millions):


		September 30, 2020		December 31, 2019			March 31, 2021		December 31, 2020
Goodwill - Plant Nutrition North America Segment		$	53.8	$	55.4
Goodwill - Plant Nutrition South America Segment		201.0		281.6
Plant Nutrition Segment						Plant Nutrition Segment	$	50.3	$	49.6
Other	Other	5.9		6.0		Other	6.1		6.1
Total	Total	$	260.7	$	343.0	Total	$	56.4	$	55.7


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The change in goodwill between December 31, ~~2019~~2020, and ~~September 30, 2020~~March 31, 2021 was due to the impact from translating foreign-denominated amounts to U.S. dollars. As of March 31, 2021, there were no indicators necessitating an interim impairment test of the Company’s operating segments based on the Company’s review of operating performance. See Note 2 for a discussion of the Company’s evaluation of interim impairment indicators related to discontinued operations.

7. Income Taxes:

The Company’s effective income tax rate differs from the U.S. statutory federal income tax rate primarily due to U.S. statutory depletion, state income taxes (net of federal tax benefit), foreign income, mining and withholding taxes, global intangible low-taxed income and interest expense recognition differences for book and tax purposes.

~~The Company had $7.0 million and $18.8 million as~~As of ~~September 30, 2020~~March 31, 2021, and December 31, ~~2019, respectively,~~ 2020, the Company had $3.4 million of gross foreign federal net operating loss (“NOL”) carryforwards that have no expiration date, ~~$0.2 million~~$0 and ~~$1.7~~ $0.1 million, respectively, of gross foreign federal NOL carryforwards which expire beginning in 2033, and ~~$0.1~~$0.2 million ~~and $0.3 million, respectively,~~ of net operating tax-effected state NOL carryforwards which expire beginning in 2027.

Canadian provincial tax authorities have challenged tax positions claimed by one of the Company’s Canadian subsidiaries and have issued tax reassessments for years 2002-2015. The reassessments are a result of ongoing audits and ~~total $145.0~~total $157.0 million, including interest, through ~~September 30, 2020.~~March 31, 2021. The Company disputes these reassessments and will continue to work with ~~the~~the appropriate authorities in Canada to resolve the dispute. There is a reasonable possibility that the ultimate resolution of this dispute, and any related disputes for other open tax years, may be materially higher or lower than the amounts the Company has reserved for such ~~disputes.~~disputes. In connection with this dispute, local regulations require the Company to post security with the tax authority until the dispute is resolved. The Company has posted collateral in the form of a ~~$95.5~~$121.7 million performance bond and has paid ~~$37.2~~$39.5 million to the Canadian tax authorities (most of which is recorded in other assets inin the Consolidated Balance Sheets at ~~September 30,~~March 31, 2021, and December 31, 2020)., which is necessary to proceed with future appeals or litigation.

The Company expects that it will be required by local regulations to provide security for additional interest on the above unresolved disputed amounts and for any future reassessments issued by these Canadian tax authorities in the form of cash, letters of credit, performance bonds, asset liens or other arrangements agreeable with the tax authorities until the disputes are resolved.

The Company expects that the ultimate outcome of these matters will not have a material impact on its results of operations or financial condition. However, the Company can provide no assurance as to the ultimate outcome of these matters, and the impact could be material if they are not resolved in the Company’s favor. As of ~~September 30, 2020,~~March 31, 2021, the Company believes it has adequately reserved for these reassessments.

Additionally, the Company has other uncertain tax positions as well as assessments and disputed positions with taxing authorities in its various jurisdictions, which are consistent with those matters disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020.

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Settlements

In ~~the fourth quarter of~~ 2017, the Company, the Canadian Revenue Authority (“CRA”) and the U.S. Internal Revenue Service (“IRS”) reached a settlement agreement on transfer pricing issues for the Company’s 2007-2012 tax years. As a result of this settlement agreement, the Company recognized $13.8 million of tax expense in its 2017 Consolidated Statements of Operations related to the Company’s Canadian tax positions for the years 2007-2016. The recording of this settlement resulted in increased sales for the Company’s Canadian subsidiary of $85.7 million and increased offsetting expenses for the Company’s U.S. subsidiary in 2017 causing a domestic loss and significant foreign income. During 2018, in accordance with the ~~settlement~~ agreement, the Company’s U.S. subsidiary made intercompany cash payments of $85.7 million to its Canadian subsidiary and tax payments towere made to Canadian taxing authorities of $17.5 million. ~~The remaining liability was satisfied in 2019 with~~Additional tax payments of $5.3 ~~million.~~million were made during 2019 with the remaining liability of $1.4 million expected to be paid in 2021. Corresponding tax refunds of ~~$21.4~~$22.3 million ~~were~~have been received ~~primarily in 2019~~through March 31, 2021, from U.S. taxing authorities, with the remaining refund of approximately ~~$1.6~~$0.7 million ~~expected~~expected in ~~2020 or early~~ 2021 (recorded in other current assets in the Consolidated Balance ~~Sheets)~~Sheets).

In ~~the fourth quarter of~~ 2018, the Company, the CRA and the IRS reached a settlement agreement on transfer pricing and management fees as part of an advanced pricing agreement that covers tax years 2013-2021. The tax expense was previously recognized in 2017, however the recording of this settlement resulted in increased sales for the Company’s Canadian subsidiary of $106.1 million and offsetting expenses for the Company’s U.S. subsidiary in 2018 causing a domestic loss and significant foreign income. During 2019, in accordance with the settlement agreement, the ~~Company’s~~Company’s U.S. subsidiary made intercompany cash payments of $106.1 million to its Canadian subsidiary and tax payments to Canadian taxing authorities of $29.9 million, with the remaining ~~$1.5~~$1.4 million ~~of tax payments to be~~balance paid during 2020. Corresponding tax refunds of ~~$59.7~~$60.0 million ~~have~~have been received ~~as of September 30, 2020,~~through March 31, 2021, from U.S. taxing authorities, ~~of which $55.0 million was received during the first quarter of 2020,~~ with the remaining ~~$1.9~~ $1.7 million ~~expected~~expected in ~~2020 or early~~ 2021 (recorded in other current assets in ~~its~~the Consolidated Balance Sheets).

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8. Long-Term Debt:

Long-term debt consists of the following (in millions):

September 30,
2020 December 31,
2019
4.875% Senior Notes due July 2024 $ 250.0 $ 250.0
Term Loan due January 2025 392.5 400.0
Revolving Credit Facility due January 2025 100.2 160.0
6.75% Senior Notes due December 2027 500.0 500.0
3.7% Banco Itaú loan due March 2020 0 15.4
AR Securitization Facility expires June 2023 28.0 0
Banco Santander loan due October 2020 11.5 16.2
Banco Itaú loan due February 2021 9.9 0
Banco Rabobank loan due July 2021 6.2 17.4
Banco BTG loan due July 2021 2.4 0
Banco Santander loan due September 2021 0 19.9
Banco do Brasil loan due September 2021 8.9 12.4
Banco Rabobank loan due September 2021 6.2 0
Banco BTG loan due October 2021 2.4 0
Banco Rabobank loan due November 2021 12.4 17.4
Banco Santander loan due December 2021 10.6 14.9
Banco Votorantim loan due February 2022 7.1 0
Banco BTG loan due January 2022 0.9 0
Banco Santander loan due March 2022 2.7 0
Banco BTG loan due April 2022 0.9 0
Banco BTG loan due July 2022 2.3 0
Financiadora de Estudos e Projetos loan due November 2023 4.1 7.2
1,359.2 1,430.8
Less unamortized debt issuance costs (13.6) (14.8)
Total debt 1,345.6 1,416.0
Less current portion (56.4) (52.1)
Long-term debt $ 1,289.2 $ 1,363.9


	March 31, 2021		December 31, 2020
4.875% Senior Notes due July 2024	$	250.0	$	250.0
Term Loan due January 2025	345.8		390.0
Revolving Credit Facility due January 2025	0		130.3
6.75% Senior Notes due December 2027	500.0		500.0
AR Securitization Facility expires June 2023	100.0		51.2
	1,195.8		1,321.5
Less unamortized debt issuance costs	(11.8)		(12.4)
Total debt	1,184.0		1,309.1
Less: current portion	0		(10.0)
Long-term debt	$	1,184.0	$	1,299.1

In the first quarter of ~~2020,~~2021, the Company ~~entered into 3 loans totaling $20.0~~made a $41.7 million ~~which mature between February 2021 and March 2022, respectively. NaN~~required prepayment of its term loan for 2020 Excess Cash Flow (as such term is defined in the ~~loans were denominated in Brazilian reais and 1~~credit agreement). This prepayment will reduce the future required term loan ~~was denominated in euros. In connection with the loan denominated in euros,~~payments. As such, the Company ~~entered into~~will not have a ~~swap to exchange principal and interest payments denominated in euros to Brazilian reais (see~~ ~~Note 12). These loans bear interest ranging from 143% - 150% of CDI.~~

During the first quarter of 2020, the Company sold approximately $3.4 million of Brazilian receivables for $3.3 million. The proceeds of the transaction were used to maintain liquidity for working capital needs. The Company is contingently liable for up to 20% of the sale balance up to $0.7 million if the banks are unable to collect on these accounts.

During the third quarter of 2020, the Company entered into 6 new loans totaling $15.1 million which mature between July 2021 and July 2022. These loans are denominated in Brazilian reais and bear interest rates ranging from 200% - 204% of CDI. The liquidity created from these loans allowed the Company to prepay $15.4 million worth of existing loans with maturity date of September 2021.scheduled term loan payment until June 2023.

As of ~~September 30, 2020,~~March 31, 2021, the term ~~loans~~loan and revolving credit facility under the Company’s credit agreement were secured by substantially all existing and future U.S. assets of the Company, the Goderich mine in Ontario, Canada and capital stock of certain subsidiaries. ~~The~~As of March 31, 2021, the weighted average interest rate ofon all ofborrowings outstanding under the term loan and revolving credit facility under the Company’s ~~outstanding debt a~~credit agreement ~~s of September 30, 2020,~~ was ~~approximately 5.37%~~approximately 2.1%.

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Securitization

On June 30, 2020, certain of the Company’s U.S. subsidiaries entered into a three-year committed revolving accounts receivable financing facility (the “AR Facility”) of up to $100 million with PNC Bank, National Association (“PNC”), as administrative agent and lender, and PNC Capital Markets, LLC, as structuring agent.

In connection with the AR Facility, two of the Company’s U.S. subsidiaries, from time to time, sell and contribute receivables and certain related assets to a special purposes entity and wholly-owned U.S. subsidiary of the Company (the “SPE”). The SPE finances its acquisition of the receivables by obtaining secured loans from PNC and the other lenders party to a receivables financing agreement. A U.S. subsidiary of the Company services the receivables on behalf of the SPE for a fee. In addition, the Company has agreed to guarantee the performance by its subsidiaries. The Company and its subsidiaries do not guarantee the loan principal or interest under the receivables financing agreement or the collectability of the receivables under the AR Facility. ~~As of September 30, 2020, the Company received proceeds from the loan in the amount of $28.0 million.~~

The purchase price for the sale of receivables consists of cash available to the SPE from loans under the AR Facility and from collections on previously sold receivables and, to the extent the SPE does not have funds available to pay the purchase price due on any day in cash, through an increase in the principal amount of a subordinated intercompany loan. The SPE pays monthly interest and fees with respect to amounts advanced by the lenders under the AR Facility.

The SPE’s sole business consists of the purchase or acceptance through capital contributions of the receivables and the subsequent granting of a security interest in these receivables and related rights to PNC on behalf of the lenders under the AR Facility. The SPE is a separate legal entity with its own separate creditors who will be entitled, upon its liquidation, to be satisfied out of the SPE’s assets prior to any assets or value in the SPE becoming available to the Company and the assets of the SPE are not available to pay creditors of the Company or any of its affiliates other than the SPE.

9. Commitments and Contingencies:

The Wisconsin Department of Agriculture, Trade and Consumer Protection (“DATCP”) and the Wisconsin Department of Natural Resources (“DNR”) have information indicating that agricultural chemicals are present within the subsurface area of the Company’s property located in Kenosha, Wisconsin. The agricultural chemicals were used by previous owners and


Table of Contents						COMPASS MINERALS INTERNATIONAL, INC.

operators of the site. None of the identified chemicals have been used in association with the Company’s operations since it acquired the property in 2002. DATCP and DNR have directed the Company to conduct further investigations into the environmental conditions at the Kenosha property. The Company continues on-property investigations and has provided the findings to DATCP and DNR as they have become available. All investigations and mitigation activities to date, and any potential future remediation work, are being conducted under the Wisconsin Agricultural Chemical Cleanup Program, which provides for reimbursement of some of the costs.

The Company conducts business operations in several countries and is subject to various federal and local labor, social security, environmental and tax laws. While the Company believes it complies with such laws, they are complex and subject to interpretation. In addition to the tax assessments discussed in Note 7, the Company’s Brazilian subsidiaries are party to administrative tax proceedings and claims which totaled ~~$7.3~~$7.5 million and ~~$15.8~~$7.9 million as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, respectively, and relate primarily to value added tax, state tax (ICMS) and social security tax (PIS and COFINS) assessments. The Company has assessed the likelihood of a loss at less than probable and therefore, has not established a reserve for these matters. The Company also assumed liabilities for labor-related matters in connection with the ~~2016~~ acquisition of Compass Minerals ~~South America,~~América do Sul Indústria e Comércio Ltda., which are primarily related to compensation, labor benefits and consequential tax claims that totaled ~~$3.8~~$2.8 million and ~~$5.6~~$3.5 million as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, respectively. The Company believes the maximum exposure for these other labor matters totaled approximately ~~$16~~$13 million and ~~$25~~$16 million as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, respectively. Amounts recorded are included in liabilities held for sale on the Consolidated Balance Sheets.

The Division of Enforcement of the SEC is investigating the Company’s disclosures primarily concerning the operation of the Goderich mine. The Company has cooperated with this investigation and will continue to do so. While it is not possible to predict the timing or the outcome of the SEC inquiry, the Company believes that this matter will not have a material impact on its results of operation, cash flows or financial position.

The Company is also involved in legal and administrative proceedings and claims of various types from the ordinary course of the Company’s business.

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Management cannot predict the outcome of legal claims and proceedings with certainty. Nevertheless, management believes the outcome of legal proceedings and claims, which are pending or known to be threatened, even if determined adversely, will not, individually or in the aggregate, have a material adverse effect on the Company’s results of operations, cash flows or financial position.

10. Operating Segments:

The Company’s reportable segments are strategic business units that offer different products and services, and each business requires different technology and marketing strategies. ~~The~~In connection with the planned disposals discussed in Note 1, the Company has 3identified 2 reportable ~~segments: Salt,~~segments. The Specialty Businesses that comprised the Company’s former Plant Nutrition South America reportable segment and the North America micronutrient product business previously reported within the former Plant Nutrition North America reportable segment were classified as discontinued operations for all periods presented. As part of the Company’s strategic shift, the Company has renamed the former Plant Nutrition North America segment as the Plant Nutrition segment.

For the three months ended March 31, 2021 and 2020, the Company has presented 2 reportable segments: Salt and Plant ~~Nutrition South America.~~Nutrition. The Salt segment produces and markets salt, consisting of sodium chloride and magnesium chloride, for use in road deicing for winter roadway safety and for dust control, food processing, water softeners and other consumer, agricultural and industrial applications. ~~Plant nutrients, including SOP, secondary nutrients and micronutrients are produced and marketed through the Plant Nutrition North America segment.~~ The Plant Nutrition ~~South America~~ segment operates 2 primary businesses in Brazil – agricultural productivity and chemical solutions. The agricultural productivity division manufactures and distributes a broad offering of specialty plant nutrition solution-based products that are used in direct soil and foliar applications, as well as through irrigation systems and for seed treatment. The chemical solutions division manufacturesproduces and markets ~~specialty chemicals for the industrial chemical industry.~~plant nutrients, including various grades of SOP.


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Segment information is as follows (in millions):


Three Months Ended September 30, 2020		Salt		Plant Nutrition North America		Plant Nutrition South America		Corporate & Other(a)		Total
Three Months Ended March 31, 2021												Three Months Ended March 31, 2021	Salt		Plant Nutrition		Corporate & Other(a)		Total
Sales to external customers	Sales to external customers	$	141.3	$	35.2	$	103.3	$	2.6	$	282.4	Sales to external customers	$	369.0	$	54.2	$	2.8	$	426.0
Intersegment sales	Intersegment sales	0		0.3		0		(0.3)		—		Intersegment sales	0		0.5		(0.5)		—
Shipping and handling cost	Shipping and handling cost	34.4		5.0		4.2		0		43.6		Shipping and handling cost	115.5		7.7		0		123.2
Operating earnings (loss)	Operating earnings (loss)	25.0		(6.1)		15.0		(16.5)		17.4		Operating earnings (loss)	80.1		4.4		(20.9)		63.6
Depreciation, depletion and amortization	Depreciation, depletion and amortization	17.4		10.0		4.4		3.8		35.6		Depreciation, depletion and amortization	18.0		8.8		3.1		29.9
Total assets (as of end of period)	Total assets (as of end of period)	977.1		518.2		557.7		104.8		2,157.8		Total assets (as of end of period)	892.9		481.9		191.4		1,566.2

Three Months Ended September 30, 2019 Salt Plant
Nutrition North America Plant
Nutrition South America
Corporate
& Other(a)
Total
Sales to external customers $ 159.6 $ 44.4 $ 135.0 $ 2.3 $ 341.3
Intersegment sales 0 1.3 0.1 (1.4) —
Shipping and handling cost 43.4 5.8 5.2 0 54.4
Operating earnings (loss) 20.6 4.7 22.4 (17.6) 30.1
Depreciation, depletion and amortization 14.3 11.0 6.0 2.6 33.9
Total assets (as of end of period) 959.2 572.8 683.1 114.7 2,329.8

Nine Months Ended September 30, 2020 Salt Plant
Nutrition North America Plant
Nutrition South America
Corporate
& Other(a)
Total
Sales to external customers $ 550.9 $ 150.9 $ 243.0 $ 7.6 $ 952.4
Intersegment sales 0 3.0 0.3 (3.3) —
Shipping and handling cost 153.9 21.6 10.4 0 185.9
Operating earnings (loss) 111.6 4.2 24.2 (53.9) 86.1
Depreciation, depletion and amortization 49.2 30.7 13.8 9.9 103.6

~~Table of Contents~~


Nine Months Ended September 30, 2019		Salt		Plant Nutrition North America		Plant Nutrition South America		Corporate & Other(a)		Total
Three Months Ended March 31, 2020												Three Months Ended March 31, 2020	Salt		Plant Nutrition		Corporate & Other(a)		Total
Sales to external customers	Sales to external customers	$	578.6	$	129.7	$	274.8	$	7.1	$	990.2	Sales to external customers	$	287.8	$	56.4	$	2.7	$	346.9
Intersegment sales	Intersegment sales	0		4.4		2.7		(7.1)		—		Intersegment sales	0		0.3		(0.3)		—
Shipping and handling cost	Shipping and handling cost	184.7		18.3		12.3		0		215.3		Shipping and handling cost	89.9		8.6		0		98.5
Operating earnings (loss)	Operating earnings (loss)	87.5		7.7		21.5		(49.3)		67.4		Operating earnings (loss)	56.9		6.6		(18.1)		45.4
Depreciation, depletion and amortization	Depreciation, depletion and amortization	44.4		33.5		17.0		7.9		102.8		Depreciation, depletion and amortization	14.6		9.8		3.0		27.4
Total assets (as of end of period)												Total assets (as of end of period)	956.5		528.4		32.2		1,517.1

Disaggregated revenue by product type is as follows (in millions):


Three Months Ended September 30, 2020		Salt		Plant Nutrition North America		Plant Nutrition South America		Corporate & Other(a)		Total
Three Months Ended March 31, 2021												Three Months Ended March 31, 2021	Salt		Plant Nutrition		Corporate & Other(a)		Total
Highway Deicing Salt	Highway Deicing Salt	$	66.6	$	0	$	0	$	0	$	66.6	Highway Deicing Salt	$	291.3	$	0	$	0	$	291.3
Consumer & Industrial Salt	Consumer & Industrial Salt	74.7		0		0		0		74.7		Consumer & Industrial Salt	77.7		0		0		77.7

SOP and Specialty Plant Nutrients		0		35.5		85.8		0		121.3
Industrial Chemicals		0		0		17.5		0		17.5
SOP												SOP	0		54.7		0		54.7
Eliminations & Other	Eliminations & Other	0		(0.3)		0		2.6		2.3		Eliminations & Other	0		(0.5)		2.8		2.3
Sales to external customers	Sales to external customers	$	141.3	$	35.2	$	103.3	$	2.6	$	282.4	Sales to external customers	$	369.0	$	54.2	$	2.8	$	426.0

Three Months Ended September 30, 2019 Salt Plant
Nutrition North America Plant
Nutrition South America
Corporate
& Other(a)
Total
Highway Deicing Salt $ 84.2 $ 0 $ 0 $ 0 $ 84.2
Consumer & Industrial Salt 75.4 0 0 0 75.4
SOP and Specialty Plant Nutrients 0 45.7 112.2 0 157.9
Industrial Chemicals 0 0 22.9 0 22.9
Eliminations & Other 0 (1.3) (0.1) 2.3 0.9
Sales to external customers $ 159.6 $ 44.4 $ 135.0 $ 2.3 $ 341.3

Nine Months Ended September 30, 2020 Salt Plant
Nutrition North America Plant
Nutrition South America
Corporate
& Other(a)
Total
Highway Deicing Salt $ 343.3 $ 0 $ 0 $ 0 $ 343.3
Consumer & Industrial Salt 207.6 0 0 0 207.6
SOP and Specialty Plant Nutrients 0 153.9 188.4 0 342.3
Industrial Chemicals 0 0 54.9 0 54.9
Eliminations & Other 0 (3.0) (0.3) 7.6 4.3
Sales to external customers $ 550.9 $ 150.9 $ 243.0 $ 7.6 $ 952.4

~~Table of Contents~~


Nine Months Ended September 30, 2019		Salt		Plant Nutrition North America		Plant Nutrition South America		Corporate & Other(a)		Total
Three Months Ended March 31, 2020												Three Months Ended March 31, 2020	Salt		Plant Nutrition		Corporate & Other(a)		Total
Highway Deicing Salt	Highway Deicing Salt	$	349.8	$	0	$	0	$	0	$	349.8	Highway Deicing Salt	$	215.1	$	0	$	0	$	215.1
Consumer & Industrial Salt	Consumer & Industrial Salt	228.8		0		0		0		228.8		Consumer & Industrial Salt	72.7		0		0		72.7

SOP and Specialty Plant Nutrients		0		134.1		210.7		0		344.8
Industrial Chemicals		0		0		66.8		0		66.8
SOP												SOP	0		56.7		0		56.7
Eliminations & Other	Eliminations & Other	0		(4.4)		(2.7)		7.1		0		Eliminations & Other	0		(0.3)		2.7		2.4
Sales to external customers	Sales to external customers	$	578.6	$	129.7	$	274.8	$	7.1	$	990.2	Sales to external customers	$	287.8	$	56.4	$	2.7	$	346.9

(a)Corporate and other includes corporate entities, records management operations and other incidental operations and eliminations. Operating earnings (loss) for corporate and other includes indirect corporate overhead, including costs for general corporate governance and oversight, as well as costs for the human resources, information technology, legal and finance functions. Corporate assets in 2021 include assets under the Company’s A/R Facility.


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The Company’s revenue by geographic area is as follows (in millions):

Revenue Three Months Ended September 30, 2020 Nine Months Ended September 30, 2020
United States(a)
$ 128.5 $ 534.1
Canada 33.4 135.0
Brazil 99.9 236.7
United Kingdom 14.3 31.3
Other 6.3 15.3
Total revenue $ 282.4 $ 952.4


							Three Months Ended March 31,
Revenue	Revenue	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019		Revenue	2021		2020
United States(a)	United States(a)	$	159.5	$	526.1	United States(a)	$	316.0	$	257.7
Canada	Canada	34.2		149.5		Canada	70.8		77.4
Brazil		131.7		266.4
United Kingdom	United Kingdom	11.0		34.0		United Kingdom	34.9		11.8
Other	Other	4.9		14.2		Other	4.3		0
Total revenue	Total revenue	$	341.3	$	990.2	Total revenue	$	426.0	$	346.9

(a)United States sales exclude product sold to foreign customers at U.S. ports.

11. Stockholders’ Equity and Equity Instruments:

In May 2020, the Company’s stockholders approved the 2020 Incentive Award Plan (the “2020 Plan”), which authorizes the issuance of 2,977,933 shares of Company common stock. Since the date the 2020 Plan was approved, the Company ceased issuing equity awards under the 2015 Incentive Award Plan (as amended, the “2015 Plan”). Since the approval of the 2015 Plan in May 2015, the Company ceased issuing equity awards under the 2005 Incentive Award Plan (as amended, the “2005 Plan”). The 2005 Plan, the 2015 Plan and the 2020 Plan allow for grants of equity awards to executive officers, other employees and directors, including restricted stock units (“RSUs”), performance stock units (“PSUs”), stock options and deferred stock units.

Options

~~Most~~Substantially all of the stock options granted ~~under the 2005 Plan and 2015 Plan~~ vest ratably, in tranches, over a four-year service period. Unexercised options expire after seven years. Options do not have dividend or voting rights. Upon vesting, each option can be exercised to purchase 1 share of the Company’s common stock. The exercise price of options is equal to the closing stock price on the grant date.

~~Table of Contents~~

To estimate the fair value of options on the grant date, the Company uses the Black-Scholes option valuation model. Award recipients are grouped according to expected exercise behavior. Unless better information is available to estimate the expected term of the options, the estimate is based on historical exercise experience. The risk-free rate, using U.S. Treasury yield curves in effect at the time of grant, is selected based on the expected term of each group. The Company’s historical stock price is used to estimate expected volatility. The fair value and inputs used to calculate fair value for options granted infor the ~~first nine~~three months ~~of 2020~~ended March 31, 2021, are included in the table below:



Fair value of options granted			$~~10.91~~13.46
Exercise price			$~~58.91~~63.14
Expected term (years)			4.75
Expected volatility			~~29.3%~~36.1%
Dividend yield			~~3.5%~~3.7%
Risk-free rate of return			~~1.6%~~0.4%

RSUs

Typically, the RSUs granted under the 2015 Plan and the 2020 Plan vest after one to three years of service. RSUs entitle the holders to 1 share of common stock for each vested RSU. Unvested RSUs do not have voting rights but are entitled to receive non-forfeitable dividends (generally after a performance hurdle has been satisfied for the year of the grant) or other distributions equal to those declared on the Company’s common stock for RSUs that are earned as a result of the satisfaction of the performance hurdle. The closing stock price on the grant date is used to determine the fair value of RSUs.

PSUs

~~The~~Substantially all of the PSUs granted under the 2015 Plan and the 2020 Plan are either total ~~shareholder~~stockholder return PSUs (“TSR PSUs”) or, return on invested capital PSUs (“ROIC PSUs”) or EBITDA growth PSUs (“EBITDA Growth PSUs”). The actual number of shares of the Company’s common stock that may be earned with respect to TSR PSUs is calculated by comparing


Table of Contents						COMPASS MINERALS INTERNATIONAL, INC.

the Company’s total ~~shareholder~~stockholder return to the total ~~shareholder~~stockholder return for each company comprising the Company’s peer group over the three-year performance period and may range from 0% to 200% of the target number of shares based upon the attainment of these ~~market~~performance conditions. The actual number of shares of common stock that may be earned with respect to ROIC PSUs is calculated based on the average of the Company’s annual return on invested capital for each year in the three-year performance period and may range from 0% to 200% of the target number of shares based upon the attainment of these performance conditions. The actual number of shares of common stock that may be earned with respect to EBITDA Growth PSUs is calculated based on the attainment of EBITDA growth during the performance period and may range from 0% to 300% of the target number of shares based upon the attainment of these performance conditions.

PSUs represent a target number of shares of the Company’s common stock that may be earned before adjustment based upon the attainment of certain performance conditions. Holders of PSUs do not have voting rights but are entitled to receive non-forfeitable dividends or other distributions equal to those declared on the Company’s common stock for PSUs that are earned, which are paid when the shares underlying the PSUs are issued.

To estimate the fair value of the TSR PSUs on the grant date, the Company uses a Monte-Carlo simulation model, which simulates future stock prices of the Company as well as the Company’s peer group. This model uses historical stock prices to estimate expected volatility and the Company’s correlation to the peer group. The risk-free rate was determined using the same methodology as the option valuations as discussed above. The Company’s closing stock price on the grant date was used to estimate the fair value of the ROIC PSUs and EBITDA Growth PSUs. The Company will adjust the expense of the ROIC PSUs and EBITDA Growth PSUs based upon its estimate of the number of shares that will ultimately vest at each interim date during the vesting period.

During the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, the Company reissued the following number of shares from treasury stock: ~~1,342~~5,948 shares related to the exercise of stock options, ~~74,103~~1,945 ~~shares~~shares related to the release of RSUs which ~~vested, 11,575~~ ~~shares related to the release of PSUs which vested~~vested, and ~~9,756~~12,730 shares related to stock payments. In ~~2019,~~2020, the Company ~~issued 32,197~~issued 72,454 net shares from treasury stock. The Company withheld ~~27,291~~a total of 4,225 shares with a fair value of ~~$1.2~~$0.2 million related to the vesting of RSUs and ~~PSUs~~exercised options during the ~~first nine~~three months ~~of 2020.~~ended March 31, 2021. The fair value of the shares were valued at the closing price at the vesting date and represent the employee tax withholding for the employee’s compensation. The Company recognized a tax ~~deficiency~~deficiency of ~~$0.3~~$0.1 million from its equity compensation awards as an increase to income tax expense during the ~~first nine~~three months ~~of 2020.~~ended March 31, 2021. During the ~~first nine~~three months ofended March 31, 2021 and 2020, ~~and 2019,~~ the Company recorded ~~$7.7~~$4.0 million and $2.9 million (includes $0.5 ~~million paid in cash) and $5.1 million (includes $1.1~~ million paid in cash), respectively, of compensation expense pursuant to its stock-based

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compensation plans. No amounts have been capitalized. The following table summarizes stock-based compensation activity during the ~~nine~~three months ended ~~September 30, 2020:~~March 31, 2021:


		Stock Options			RSUs			PSUs(a)				Stock Options			RSUs			PSUs(a)
		Number	Weighted-average exercise price		Number	Weighted-average fair value		Number	Weighted-average fair value			Number	Weighted-average exercise price		Number	Weighted-average fair value		Number	Weighted-average fair value
Outstanding at December 31, 2019		887,867	$	64.21	217,413	$	52.07	179,397	$	61.43
Outstanding at December 31, 2020											Outstanding at December 31, 2020	868,772	$	63.06	207,982	$	55.68	241,794	$	65.57
Granted	Granted	94,945	58.91		89,906	58.05		69,635	82.38		Granted	120,602	63.14		89,998	63.14		96,002	63.14
Exercised(b)	Exercised(b)	(1,342)	55.01		0	0		(11,575)	78.87		Exercised(b)	(5,948)	58.11		0	0		0	0
Released from restriction(b)	Released from restriction(b)	0	0		(74,103)	49.85		0	0		Released from restriction(b)	0	0		(1,945)	42.63		0	0
Cancelled/expired	Cancelled/expired	(89,560)	69.45		(26,079)	51.39		(32,606)	68.24		Cancelled/expired	(52,468)	86.87		(2,218)	65.70		(23,962)	60.43
Outstanding at September 30, 2020		891,910	$	63.13	207,137	$	55.55	204,851	$	66.49
Outstanding at March 31, 2021											Outstanding at March 31, 2021	930,958	$	61.76	293,817	$	57.98	313,834	$	65.22

(a)Until the performance period is completed, PSUs are included in the table at the target level at their grant date and at that level represent 1 share of common stock per PSU.

(b)Common stock issued for exercised options and for vested and earned RSUs and PSUs was issued from treasury stock.


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Accumulated Other Comprehensive ~~Income (Loss)~~Loss (“AOCL”)

The Company’s comprehensive income (loss) is comprised of net (loss) earnings, net amortization of the unrealized loss of the pension obligation, the change in the unrealized gain (loss) on natural gas and foreign currency cash flow hedges and foreign currency translation adjustments. The components of and changes in ~~accumulated other comprehensive loss (“AOCL”)~~AOCL as of and for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ are as follows (in millions):


Three Months Ended September 30, 2020(a)		Gains and (Losses) on Cash Flow Hedges		Defined Benefit Pension		Foreign Currency		Total
Three Months Ended March 31, 2021(a)										Three Months Ended March 31, 2021(a)	Gains and (Losses) on Cash Flow Hedges		Defined Benefit Pension		Foreign Currency		Total
Beginning balance	Beginning balance	$	0.2	$	(6.5)	$	(356.0)	$	(362.3)	Beginning balance	$	0.2	$	(9.4)	$	(294.1)	$	(303.3)
Other comprehensive (loss) income before reclassifications(b)		(0.5)		0		6.4		5.9
Other comprehensive income (loss) before reclassifications(b)										Other comprehensive income (loss) before reclassifications(b)	1.9		0		(20.5)		(18.6)
Amounts reclassified from accumulated other comprehensive loss	Amounts reclassified from accumulated other comprehensive loss	(0.2)		0.1		0		(0.1)		Amounts reclassified from accumulated other comprehensive loss	(1.8)		0.2		0		(1.6)
Net current period other comprehensive (loss) income		(0.7)		0.1		6.4		5.8
Net current period other comprehensive income (loss)										Net current period other comprehensive income (loss)	0.1		0.2		(20.5)		(20.2)
Ending balance	Ending balance	$	(0.5)	$	(6.4)	$	(349.6)	$	(356.5)	Ending balance	$	0.3	$	(9.2)	$	(314.6)	$	(323.5)

Three Months Ended September 30, 2019(a)
Gains and
(Losses) on
Cash Flow
Hedges Defined
Benefit
Pension Foreign
Currency Total
Beginning balance $ (1.0) $ (4.3) $ (172.9) $ (178.2)
Other comprehensive income (loss) before reclassifications(b)
2.0 0 (50.7) (48.7)
Amounts reclassified from accumulated other comprehensive loss (1.7) 0.1 0 (1.6)
Net current period other comprehensive income (loss) 0.3 0.1 (50.7) (50.3)
Ending balance $ (0.7) $ (4.2) $ (223.6) $ (228.5)

Nine Months Ended September 30, 2020(a)
Gains and
(Losses) on
Cash Flow
Hedges Defined
Benefit
Pension Foreign
Currency Total
Beginning balance $ (0.6) $ (6.9) $ (184.6) $ (192.1)
Other comprehensive income (loss) before reclassifications(b)
3.1 0 (165.0) (161.9)
Amounts reclassified from accumulated other comprehensive loss (3.0) 0.5 0 (2.5)
Net current period other comprehensive income (loss) 0.1 0.5 (165.0) (164.4)
Ending balance $ (0.5) $ (6.4) $ (349.6) $ (356.5)

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Nine Months Ended September 30, 2019(a)		Gains and (Losses) on Cash Flow Hedges		Defined Benefit Pension		Foreign Currency		Total
Three Months Ended March 31, 2020(a)										Three Months Ended March 31, 2020(a)	Gains and (Losses) on Cash Flow Hedges		Defined Benefit Pension		Foreign Currency		Total
Beginning balance	Beginning balance	$	(0.7)	$	(4.5)	$	(205.7)	$	(210.9)	Beginning balance	$	(0.6)	$	(6.9)	$	(184.6)	$	(192.1)
Other comprehensive income (loss) income before reclassifications(b)		1.9		0		(17.9)		(16.0)
Other comprehensive income (loss) before reclassifications(b)										Other comprehensive income (loss) before reclassifications(b)	2.7		0		(173.5)		(170.8)
Amounts reclassified from accumulated other comprehensive loss	Amounts reclassified from accumulated other comprehensive loss	(1.9)		0.3		0		(1.6)		Amounts reclassified from accumulated other comprehensive loss	(2.6)		0.2		0		(2.4)
Net current period other comprehensive income (loss)	Net current period other comprehensive income (loss)	0		0.3		(17.9)		(17.6)		Net current period other comprehensive income (loss)	0.1		0.2		(173.5)		(173.2)
Ending balance	Ending balance	$	(0.7)	$	(4.2)	$	(223.6)	$	(228.5)	Ending balance	$	(0.5)	$	(6.7)	$	(358.1)	$	(365.3)

(a)With the exception of the cumulative foreign currency translation adjustment, for which no tax effect is recorded, the changes in the components of accumulated other comprehensive loss presented in the tables above are reflected net of applicable income taxes.

(b)The Company recorded a foreign ~~exchan~~exchange loss of $(19.2) million an~~ge (loss) gain of $(6.9)~~d $(75.5) million ~~and $(96.8) million~~ in the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020, ~~and $25.7 million and $15.3 million in the three and nine months ended September 30, 2019,~~ respectively, in accumulated other comprehensive loss related to intercompany notes which were deemed to be of a long-term investment nature.

The amounts reclassified from AOCL to expense (income) for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ are shown below (in millions):

Amount Reclassified from AOCL
Three Months Ended
September 30, 2020 Nine Months Ended
September 30, 2020 Line Item Impacted in the
Consolidated Statements of Operations
Gains (losses) on cash flow hedges:
Natural gas instruments $ (0.2) $ (0.8) Product cost
Foreign currency contracts 0 (3.6) Interest expense
Income tax benefit 0 1.4
Reclassifications, net of income taxes (0.2) (3.0)
Amortization of defined benefit pension:
Amortization of loss $ 0.2 $ 0.6 Product cost
Income tax expense (0.1) (0.1)
Reclassifications, net of income taxes 0.1 0.5
Total reclassifications, net of income taxes $ (0.1) $ (2.5)


		Amount Reclassified from AOCL						Amount Reclassified from AOCL
		Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019		Line Item Impacted in the Consolidated Statements of Operations		Three Months Ended March 31, 2021		Three Months Ended March 31, 2020		Line Item Impacted in the Consolidated Statements of Operations
Gains (losses) on cash flow hedges:	Gains (losses) on cash flow hedges:						Gains (losses) on cash flow hedges:
Natural gas instruments	Natural gas instruments	$	(0.4)	$	(0.6)	Product cost	Natural gas instruments	$	(0.2)	$	(0.3)	Product cost
Foreign currency contracts	Foreign currency contracts	(2.1)		(2.2)		Interest expense	Foreign currency contracts	(2.5)		(3.6)		Interest expense
Income tax benefit		0.8		0.9
Income tax expense							Income tax expense	0.9		1.3
Reclassifications, net of income taxes	Reclassifications, net of income taxes	(1.7)		(1.9)			Reclassifications, net of income taxes	(1.8)		(2.6)
Amortization of defined benefit pension:	Amortization of defined benefit pension:						Amortization of defined benefit pension:
Amortization of loss	Amortization of loss	$	0.1	$	0.3	Product cost	Amortization of loss	0.3		0.2		Product cost

Income tax benefit							Income tax benefit	(0.1)		0
Reclassifications, net of income taxes	Reclassifications, net of income taxes	0.1		0.3			Reclassifications, net of income taxes	0.2		0.2
Total reclassifications, net of income taxes	Total reclassifications, net of income taxes	$	(1.6)	$	(1.6)		Total reclassifications, net of income taxes	$	(1.6)	$	(2.4)

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12. Derivative Financial Instruments:

The Company is subject to various types of market risks, including interest rate risk, foreign currency exchange rate transaction and translation risk and commodity pricing risk. Management may take actions to mitigate the exposure to these types of risks, including entering into forward purchase contracts and other financial instruments. Currently, the Company manages a portion of its commodity pricing ~~and foreign currency exchange rate~~ risks by using derivative instruments. ~~From time to time, the Company may enter into immaterial foreign exchange contracts to mitigate foreign exchange risk on its sales and accounts receivable.~~ The Company does not seek to engage in trading activities or take speculative positions with any financial instrument arrangement. The Company has entered into natural gas ~~derivative instruments and foreign currency~~ derivative instruments with counterparties it views as creditworthy. However, the Company does attempt to mitigate its counterparty credit risk exposures by, among other things, entering into master netting agreements with some of these counterparties. The Company records derivative financial instruments as either assets or liabilities at fair value in the Consolidated Balance Sheets. The assets and liabilities recorded as of March 31, 2021 and December 31, 2020 were not material.

Derivatives qualify for treatment as hedges when there is a high correlation between the change in fair value of the derivative instrument and the related change in value of the underlying hedged item. Depending on the exposure being hedged, the Company must designate the hedging instrument as a fair value hedge, a cash flow hedge or a net investment in foreign operations hedge. For the qualifying derivative instruments that have been designated as hedges, the change in fair value is recognized through earnings when the underlying transaction being hedged affects earnings, allowing a derivative’s gains and losses to offset related results from the hedged item in the statements of operations. Any ineffectiveness related to these hedges was not material for any of the periods presented. For derivative instruments that have not been designated as hedges, the entire change in fair value is recorded through earnings in the period of change.

Natural Gas Derivative Instruments

Natural gas is consumed at several of the Company’s production facilities, and changes in natural gas prices impact the Company’s operating margin. The Company’s objective is to reduce the earnings and cash flow impacts of changes in market prices of natural gas by fixing the purchase price of up to 90% of its forecasted natural gas usage. It is the Company’s policy to consider hedging portions of its natural gas usage up to 36 months in advance of the forecasted purchase. As of ~~September 30, 2020,~~March 31, 2021, the Company had entered into natural gas derivative instruments to hedge a portion of its natural gas purchase requirements through December 2022. As of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, the Company had agreements in place to hedge forecasted natural gas purchases of ~~3.1~~2.9 million and ~~2.8~~2.5 million MMBtus, respectively. All natural gas derivative instruments held by the Company as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 qualified and were designated as cash flow hedges. As of ~~September 30, 2020,~~March 31, 2021, the Company expects to reclassify from AOCL to earnings during the next twelve ~~months $0.8~~months $0.6 million of net gains on derivative instruments related to its ~~natural~~natural gas hedges.

~~Foreign Currency Derivatives Not Designated as Hedges~~

In March 2020, the Company entered into forward instruments to swap currency denominated in U.S. dollars to Canadian dollars for a future intercompany payment from a U.S. subsidiary to a Canadian subsidiary. These instruments matured in April 2020 with combined notional amounts of $89.9 million. The objective of the instruments was to mitigate the foreign currency fluctuation risk related to intercompany payments denominated in a currency other than U.S. dollars, the Company’s functional currency. The instrument was not desi~~gnated as a hedge. When these agreements settled in April 2020, the Company recognized a foreign exchange loss of $3.1 million in its Consolidated Statements of Operations.~~

From time to time, the Company’s Brazilian subsidiary may enter into forward instruments to swap currency for sales invoices that are denominated in Brazilian reais. These instruments are not material to the Company’s financial statements.

~~Foreign Currency Derivatives Designated as Hedges~~

The Company has entered into euro-denominated debt instruments to provide funds for its operations in Brazil. The Company may also concurrently enter into foreign currency agreements whereby the Company agrees to swap interest and principal payments on loans denominated in euros for principal and interest payments denominated in Brazilian reais, its Brazilian subsidiary’s functional currency. The objective of the swap agreements is to mitigate the foreign currency fluctuation risk related to holding debt denominated in a currency other than the Company’s Brazilian subsidiary’s functional currency. As of September 30, 2020, the Company had a swap agreement in place to hedge $10.0 million of a loan denominated in a currency other than its Brazilian subsidiary’s functional currency. Payments on this loan are due on various dates extending through February 2021. As of September 30, 2020, this foreign currency derivative instrument qualified and was designated as a cash flow hedge. As of September 30, 2020, the Company expects to reclassify from AOCL to earnings during the next twelve months $2.8 million of net gai~~ns on derivative instruments related to this foreign currency swap agreement.~~

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~~The following tables present the fair value of the Company’s hedged items as of September 30, 2020 and December 31, 2019 (in millions):~~

Asset Derivatives Liability Derivatives
Derivatives designated as hedging instruments: Consolidated Balance Sheets Location September 30, 2020 Consolidated Balance Sheets Location September 30, 2020
Commodity contracts Other current assets $ 0.9 Accrued expenses and other current liabilities $ 0.1
Commodity contracts Other assets 0.2 Other noncurrent liabilities 0.2
Swap contracts Other current assets 2.8 Accrued expenses and other current liabilities 0
Total derivatives designated as hedging instruments(a)(b)
$ 3.9 $ 0.3

~~(a)The Company has master netting agreements with both of its commodity hedge counterparties and accordingly has netted in its Consolidated Balance Sheets $0.3 million of its commodity contracts that are in a payable position against its contracts in receivable positions.~~

~~(b)~~The Company has commodity hedge agreements with 2 counterparties and a foreign currency swap agreement with 1 counterparty. Amounts recorded as liabilities for the Company’s commodity contracts are payable to both counterparties and amounts recorded as assets for the Company’s foreign currency swap agreements are receivable from one counterparty.

Asset Derivatives Liability Derivatives
Derivatives designated as hedging instruments: Consolidated Balance Sheets Location December 31, 2019 Consolidated Balance Sheets Location December 31, 2019
Commodity contracts Other current assets $ 0.3 Accrued expenses and other current liabilities $ 0.8
Commodity contracts Other assets 0.1 Other noncurrent liabilities 0.2
Swap contracts Other current assets 2.8 Accrued expenses and other current liabilities 0
Total derivatives designated as hedging instruments(a)(b)
$ 3.2 $ 1.0

~~(a)~~The Company has master netting agreements with its commodity hedge counterparties and accordingly has netted in its Consolidated Balance Sheets $0.4 million of its commodity contracts that are in a receivable position against its contracts in payable positions.

~~(b)~~The Company has both commodity hedge and foreign currency swap agreements with 2 counterparties each. Amounts recorded as liabilities for the Company’s commodity contracts are payable to both counterparties, and amounts recorded as assets for the Company’s foreign currency swap agreements are receivable from both counterparties.

13. Fair Value Measurements:

The Company’s financial instruments are measured and reported at their estimated fair values. Fair value is the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction. When available, the Company uses quoted prices in active markets to determine the fair values for its financial instruments (Level 1 inputs) or, absent quoted market prices, observable market-corroborated inputs over the term of the financial instruments (Level 2 inputs). The Company does not have any unobservable inputs that are not corroborated by market inputs (Level 3 inputs).

The Company holds marketable securities associated with its defined contribution and pre-tax savings plans, which are valued based on readily available quoted market prices. The Company utilizes derivative instruments to manage its risk of changes in natural gas prices ~~and its risk of changes in foreign currency exchange rates~~ (see Note 12). The fair values of the natural gas ~~and foreign currency~~ derivative instruments are determined using market data of forward prices for all of the Company’s contracts.

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The estimated fair values for each type of instrument are presented below (in millions):


		September 30, 2020		Level One		Level Two		Level Three			March 31, 2021		Level One		Level Two		Level Three
Asset Class:	Asset Class:									Asset Class:
Mutual fund investments in a non-qualified savings plan(a)	Mutual fund investments in a non-qualified savings plan(a)	$	1.7	$	1.7	$	0	$	0	Mutual fund investments in a non-qualified savings plan(a)	$	2.1	$	2.1	$	0	$	0
Derivatives – natural gas instruments, net	Derivatives – natural gas instruments, net	0.8		0		0.8		0		Derivatives – natural gas instruments, net	0.4		0		0.4		0
Derivatives – foreign currency contracts, net		2.8		0		2.8		0
Total Assets	Total Assets	$	5.3	$	1.7	$	3.6	$	0	Total Assets	$	2.5	$	2.1	$	0.4	$	0
Liability Class:	Liability Class:									Liability Class:
Liabilities related to non-qualified savings plan	Liabilities related to non-qualified savings plan	$	(1.7)	$	(1.7)	$	0	$	0	Liabilities related to non-qualified savings plan	$	(2.1)	$	(2.1)	$	0	$	0

Total Liabilities	Total Liabilities	$	(1.7)	$	(1.7)	$	0	$	0	Total Liabilities	$	(2.1)	$	(2.1)	$	0	$	0

(a)Includes mutual fund investments of approximately 30% in common stock of large-cap U.S. companies, 10% in common stock of small to mid-cap U.S. companies, 10% in international companies, 20% in bond funds, 5% in short-term investments and 25% in blended funds.


	December 31, 2020		Level One		Level Two		Level Three
Asset Class:
Mutual fund investments in a non-qualified savings plan(a)	$	1.9	$	1.9	$	0	$	0
Derivatives – natural gas instruments, net	0.2		0		0.2		0
Total Assets	$	2.1	$	1.9	$	0.2	$	0
Liability Class:
Liabilities related to non-qualified savings plan	$	(1.9)	$	(1.9)	$	0	$	0

Total Liabilities	$	(1.9)	$	(1.9)	$	0	$	0

(a)Includes mutual fund investments of approximately 30% in the common stock of large-cap U.S. companies, 10% in the common stock of small to mid-cap U.S. companies, 5% in the common stock of international companies, 15% in bond funds, 15% in short-term investments and 25% in blended funds.

December 31,
2019
Level One
Level Two
Level Three
Asset Class:
Mutual fund investments in a non-qualified savings plan(a)
$ 1.4 $ 1.4 $ 0 $ 0
Derivatives – foreign currency contracts, net 2.8 0 2.8 0
Total Assets $ 4.2 $ 1.4 $ 2.8 $ 0
Liability Class:
Liabilities related to non-qualified savings plan $ (1.4) $ (1.4) $ 0 $ 0
Derivatives – natural gas instruments, net (0.6) 0 (0.6) 0
Total Liabilities $ (2.0) $ (1.4) $ (0.6) $ 0

~~(a)~~Includes mutual fund investments of approximately 30% in the common stock of large-cap U.S. companies, 15% in the common stock of small to mid-cap U.S. companies, 5% in the common stock of international companies, 10% in bond funds, 20% in short-term investments and 20% in blended funds.

Cash and cash equivalents, receivables (net of allowance for doubtful accounts) and ~~payables~~accounts payable are carried at cost, which approximates fair value due to their liquid and short-term nature. The Company’s investments related to its nonqualified savings plan of ~~$1.7~~$2.1 million and ~~$1.4~~$1.9 million at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, respectively, are stated at fair value based on quoted market prices. As of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, the estimated ~~amount a thir~~fair value of~~d party would pay for~~ the Company’s fixed-rate 4.875% Senior Notes due July 2024, based on available trading information (Level 2), totaled ~~$256.9~~$255.6 million and ~~$249.1~~$260.3 million, respectively, compared with the aggregate principal amount at maturity of $250.0 million. As of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, the estimated ~~amount a third party would pay for~~fair value of the Company’s fixed-rate 6.75% Senior Notes due December 2027, based on available trading information (Level 2), totaled ~~$540.0~~$533.8 million and ~~$530.6~~$543.1 million, respectively, compared with the aggregate principal amount at maturity of $500.0 million. The ~~estimated amount a third party would pay~~fair value at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019 for the~~2020 of amounts outstanding under the Company’s term loans and revolving credit facility, based upon available bid information received from the Company’s lender (Level 2), totaled ~~$486.8~~approximately $342.3 million and ~~$552.8~~$513.8 million, respectively, compared with the aggregate principal ~~balance~~amount at maturity of ~~$492.7~~$345.8 million and ~~$560.0~~$520.3 million, respectively.

We performed an impairment analysis for our Plant Nutrition South America businesses during the first quarter 2021, which resulted in an impairment loss. The ~~Brazilian loans have floating rates and their~~ fair value ~~approximates their carrying value (see~~measurements used in this analysis were a combination of Level 2 and Level 3 inputs. Refer to Note 82 ). for a discussion of fair value as it relates to the Company’s Specialty Businesses.

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14. Earnings (loss) per Share:

The Company calculates earnings per share using the two-class method. The two-class method requires allocating the Company’s net earnings (loss) to both common shares and participating securities. The following table sets forth the computation of basic and diluted earnings (loss) per common share (in millions, except for share and per-share data):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2020		2019		2020		2019			2021		2020
Numerator:	Numerator:									Numerator:
Net (loss) earnings		$	(2.1)	$	10.6	$	27.2	$	6.4
Net earnings from continuing operations										Net earnings from continuing operations	$	32.9	$	33.9
Less: net earnings allocated to participating securities(a)	Less: net earnings allocated to participating securities(a)	(0.4)		(0.2)		(1.3)		(0.7)		Less: net earnings allocated to participating securities(a)	(0.5)		(0.6)
Net (loss) earnings available to common shareholders		$	(2.5)	$	10.4	$	25.9	$	5.7
Net earnings from continuing operations available to common stockholders										Net earnings from continuing operations available to common stockholders	32.4		33.3
Net loss from discontinued operations										Net loss from discontinued operations	(256.5)		(6.3)
Net (loss) earnings available to common stockholders										Net (loss) earnings available to common stockholders	$	(224.1)	$	27.0

Denominator (in thousands):	Denominator (in thousands):									Denominator (in thousands):
Weighted-average common shares outstanding, shares for basic earnings per share	Weighted-average common shares outstanding, shares for basic earnings per share	33,947		33,884		33,918		33,880		Weighted-average common shares outstanding, shares for basic earnings per share	33,974		33,892
Weighted-average awards outstanding(b)	Weighted-average awards outstanding(b)	0		0		0		0		Weighted-average awards outstanding(b)	38		0
Shares for diluted earnings per share	Shares for diluted earnings per share	33,947		33,884		33,918		33,880		Shares for diluted earnings per share	34,012		33,892
Net (loss) earnings per common share, basic		$	(0.07)	$	0.31	$	0.78	$	0.17
Net (loss) earnings per common share, diluted		$	(0.07)	$	0.31	$	0.76	$	0.17

Basic net earnings from continuing operations per common share										Basic net earnings from continuing operations per common share	$	0.96	$	0.99
Basic net loss from discontinued operations per common share										Basic net loss from discontinued operations per common share	(7.55)		(0.19)
Basic net (loss) earnings per common share										Basic net (loss) earnings per common share	$	(6.59)	$	0.80

Diluted net earnings from continuing operations per common share										Diluted net earnings from continuing operations per common share	$	0.95	$	0.99
Diluted net loss from discontinued operations per common share										Diluted net loss from discontinued operations per common share	(7.55)		(0.19)
Diluted net (loss) earnings per common share										Diluted net (loss) earnings per common share	$	(6.60)	$	0.80

(a)Weighted participating securities include RSUs and PSUs that receive non-forfeitable dividends and consist of ~~389,000~~445,000 and ~~404,000~~412,000 weighted participating securities for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020, ~~respectively, and 321,000 and 291,000 weighted participating securities for the three and nine months ended September 30, 2019,~~ respectively.

(b)For the calculation of diluted net (loss) earnings per share, the Company uses the more dilutive of either the treasury stock method or the two-class method to determine the weighted-average number of outstanding common shares. In addition, the Company had ~~1,167,000~~1,278,000 and ~~1,228,000~~1,266,000 weighted-average equity awards outstanding for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020, respectively, ~~and 1,194,000 and 1,049,000 weighted-average equity awards outstanding for the three and nine months ended September 30, 2019, respectively,~~ that were anti-dilutive.


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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

All statements, other than statements of historical fact, contained in this Quarterly Report on Form 10-Q constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.

Forward-looking statements relate to future events or our future financial performance, and involve known and unknown risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements include, but are not limited to, the following: ~~risks related to the coronavirus (“COVID-19”) pandemic;~~ our mining and industrial operations; geological conditions; dependency on a limited number of key production and distribution facilities and critical equipment; weather conditions; strikes, other forms of work stoppage or slowdown or other union activities; the inability to fund necessary capital expenditures or successfully complete capital projects; supply constraints or price increases for energy and raw materials used in our production processes; our indebtedness and inability to pay our indebtedness; restrictions in our debt agreements that may limit our ability to operate our business or require accelerated debt payments; tax liabilities; financial assurance requirements; the inability of our customers to access credit or a default by our customers of trade credit extended by us or financing we have guaranteed; our payment of any dividends; the impact of competition on the sales of our products; risks associated with our international operations and sales, including changes in currency exchange rates and inflation risks; the impact of anticipated changes in plant nutrition product prices and customer application rates; conditions in the ~~agricultural sector~~sectors where we sell products and supply and demand imbalances for competing ~~plant nutrition~~ products; increasing costs or a lack of availability of transportation services; the seasonal demand for our products; our rights and governmental authorizations to mine and operate our properties; compliance with foreign and United States (“U.S.”) laws and regulations related to import and export requirements and anti-corruption laws; compliance with environmental, health and safety laws and regulations; environmental liabilities; misappropriation or infringement claims relating to intellectual property; product liability claims and product recalls; inability to obtain required product registrations or increased regulatory requirements; changes in industry standards and regulatory requirements; disruptions caused by the COVID-19 pandemic, or other outbreaks of infectious disease or similar public health threats; our ability to successfully implement our ~~strategies, including~~strategies; the ~~strategic review~~timing and outcome of the sale processes for our South America business and our ability to complete the sales of our ~~Plant Nutrition~~ South America ~~business;~~businesses; the loss of key personnel; a compromise of our computer systems, information technology or operations technology or the inability to protect confidential or proprietary data;

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our ability to expand our business through acquisitions, integrate acquired businesses and realize anticipated benefits from acquisitions; climate ~~change;~~change and related laws and regulations; domestic and international general business and economic conditions; and other risks referenced from time to time in this report and our other filings with the Securities and Exchange Commission (the “SEC”), including ~~the~~Part I, Item 1A, “Risk Factors” ~~sections~~ of our Annual Report on Form 10-K for the year ended December 31, ~~2019, Quarterly Report on Form 10-Q for the quarters ended March 31, 2020 and June 30, 2020 and this Quarterly Report on Form 10-Q.~~2020.

In some cases, you can identify forward-looking statements by terminology such as “may,” “might,” “will,” “should,” “could,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue,” the negative of these terms or other comparable terminology. Forward-looking statements include without limitation statements about the impact of the COVID-19 pandemic on us; our outlook, including expected sales volumes; existing or potential capital expenditures; capital projects and investments; the industry and our competition; projected sources of cash flow; potential legal liability; proposed legislation and regulatory action; the seasonal distribution of working capital requirements; our reinvestment of foreign earnings outside the U.S.; our ability to optimize cash accessibility, minimize tax expense and meet debt service requirements; future tax payments and tax refunds; outcomes of matters with taxing authorities; the effects of currency fluctuations and inflation; and the seasonality of our business. These forward-looking statements are only predictions. Actual events or results may differ materially.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. We undertake no duty to update any of the forward-looking statements after the date hereof or to reflect the occurrence of unanticipated events.

Unless the context requires otherwise, references to the “Company,” “Compass Minerals,” “our,” “us” and “we” refer to Compass Minerals International, Inc. (“CMI,” the parent holding company) and its consolidated subsidiaries. Except where otherwise noted, references to North America include only the continental U.S. and Canada, and references to the United Kingdom (the “U.K.”) include only England, Scotland and Wales. Except where otherwise noted, all references to tons refer to “short tons” and all amounts are in U.S. dollars. One short ton equals 2,000 pounds. Compass Minerals ~~Protassium+~~ and ~~Wolf Trax,~~Protassium+ and combinations thereof, are trademarks of CMI or its subsidiaries in the U.S. and other countries.


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Discontinued Operations

During 2020, we initiated an evaluation of the strategic fit of certain of our businesses. On February 16, 2021, we announced our plan to restructure our former Plant Nutrition South America segment to enable targeted and separate sales processes for each portion of the former segment, including our chemicals and specialty plant nutrition businesses along with our equity method investment in Fermavi Eletroquímica Ltda. (“Fermavi”). Concurrently, to optimize our asset base in North America, we evaluated the strategic fit of our North America micronutrient product business. On March 16, 2021, the Board of the 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.

As described further in Item 1, Note 2, on March 23, 2021, and April 7, 2021, we entered into definitive agreements to sell our South America specialty nutrition business and a component of our North America micronutrient business, respectively. The North America micronutrient sale closed on May 4, 2021. We continue to actively pursue the sales of the remaining South America chemicals business and our equity method investment in Fermavi, and we believe these sales are probable to occur within the next twelve months.

We believe there is a single disposal plan representing a strategic shift that will have 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. generally accepted accounting principles (“U.S. GAAP”).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 both periods presented and their results of operations are presented as discontinued operations in the Consolidated Statements of Operations for each period presented.

COVID-19 Pandemic

The ongoing COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains and created significant volatility and disruption of financial markets. As an essential business, we have continued producing and delivering products that support critical industries such as transportation, agriculture, chemical, food, pharmaceutical and animal nutrition. ~~However, we~~We have instituted several measures in response to the COVID-19 pandemic and ~~the COVID-19 pandemic has negatively affected~~have experienced negative impacts to our business ~~in a number~~from COVID-19, but our results of ~~ways.~~

•~~Employee welfare: Our management team has taken multiple actions to limit~~operations for the ~~exposure of employees to the spread of COVID-19, including instituting remote working where possible, adjusting shift schedules~~three months ended March 31, 2021 and ~~crew sizes, restricting visitation to operational sites, curtailing all business-related commercial air travel, and increasing sanitation of offices and common areas within our facilities.~~

•~~Operations and sales: COVID-19 has~~2020, were not interrupted the operations of our mining and manufacturing facilities in North America and Brazil. Operations at our U.K. salt mine were idled near the end of March 2020 due to the very mild winter weather experienced in that market, along with U.K. government guidance on COVID-19 preventative measures. Mine operations resumed in mid-May 2020, utilizing a gradual ramp up. During the third quarter of 2020, we continued to experience an impact to some of our sales channels due to manufacturing outages and retail disruptions primarily for our non-deicing salt products. In total, we estimate that the combined impact of lost sales and incremental operating costs related to COVID-19 totaled approximately $4 million in the third quarter of 2020 and $7 million on a year-to-date basis.

•~~Supply chain and logistics:~~ ~~To date, we have e~~xperienced no material supply chain or logistics issues. We continue to evaluate potential supply chain and logistics impacts, proactively increase inventory levels of critical sourced inputs and identify secondary suppliers where possible. Both our operations and our logistics partners are deemed “essential” under current governmental guidance and we have worked to ensure we understand and comply with their safety precautions to limit potential disruptions.materially affected by COVID-19.

The ultimate impact that COVID-19 will have on our future results is unknown at this time. For more information, see “Part I, Item 1A, “Risk Factors” in~~Part II–Item 1A–Risk Factors~~.” our Annual Report on Form 10-K for the year ended December 31, 2020.

Critical Accounting Estimates

Preparation of our consolidated financial statements in accordance with U.S. ~~generally accepted accounting principles (“U.S. GAAP”)~~GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Management believes the most complex and sensitive judgments result primarily from the need to make

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estimates about matters that are inherently uncertain. ~~Management’s~~Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Part II, Item 8, Note 2 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, ~~2019~~2020, describe the significant accounting estimates and policies used in preparation of our consolidated financial statements. For a further description of our critical accounting policies, see Item 1, Note 1 toof our Consolidated Financial Statements included in this Quarterly Report on Form 10-Q. Actual results in these areas could differ from management’s estimates.

Company Overview

Compass Minerals is a leading producer of essential minerals, including salt, sulfate of potash (“SOP”) specialty fertilizer and magnesium chloride. As of ~~September 30, 2020,~~March 31, 2021, we operated 2112 production and packaging facilities (excluding 9 production facilities in South America that are part of our discontinued operations), 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 in Ogden, Utah, which is both the largest SOP production site and the largest solar salt production site in the Western Hemisphere; and

•Several mechanical evaporation facilities producing consumer and industrial ~~salt; and~~salt.

•


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We now have two reportable segments, Salt and Plant Nutrition (which was previously known as the Plant Nutrition North America segment), as discussed in ~~Several facilities producing essential agricultural nutrients~~Item 1, Note 10 to the Consolidated Financial Statements. Unless otherwise indicated, the information and ~~specialty chemicals~~amounts provided in ~~Brazil.~~this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” pertain to continuing operations.

Our ~~salt business~~Salt segment provides highway deicing salt to customers in North America and the U.K. as well as consumer deicing and water conditioning products, ingredients used in consumer and commercial food preparation, and other salt-based products for consumer, agricultural and industrial applications in North America. In the U.K., we operate a records management business utilizing excavated areas of our Winsford salt mine with one other surface location in London, England.

Our ~~plant nutrition business~~Plant Nutrition segment produces and markets specialty plant nutrition products worldwide to distributors and retailers of crop inputs, as well as growers. Our principal plant nutrition product in our Plant Nutrition ~~North America~~ segment is SOP, which we market under the trade name Protassium+. ~~We also sell various secondary nutrients as well as premium micronutrient products under our Wolf Trax brand.~~

Our Plant Nutrition South America segment operates two primary businesses in Brazil—agricultural productivity, which manufactures and distributes a broad offering of specialty plant nutrition solution-based products; and chemical solutions, which manufactures and markets specialty chemicals, primarily for the water treatment industry and for use in other industrial processes.

Consolidated Results of Continuing Operations

The following is a summary of our consolidated results of continuing operations for the three ~~and nine~~ months ended ~~September 30, 2019~~March 31, 2020 and ~~2020,~~2021, respectively. The following discussion should be read in conjunction with the information contained in our consolidated financial statements and the notes thereto included in this Quarterly Report on Form 10-Q.

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THREE ~~AND NINE~~ MONTHS ENDED ~~SEPTEMBER 30~~MARCH 31

* Refer to ~~“—Sensitivity Analysis Related~~“—Reconciliation of Net Earnings from Continuing Operations to EBITDA and Adjusted ~~EBITDA”~~EBITDA” for a reconciliation to the most directly comparable U.S. GAAP financial measure and the reasons we use this non-GAAP measure.

COMMENTARY: THREE MONTHS ENDED ~~SEPTEMBER 30, 2019~~MARCH 31, 2020 AND ~~2020~~2021

•Total sales ~~decreased 17%~~increased 23%, or ~~$58.9~~$79.1 million, due to ~~decreases~~an increase in ~~all of~~ our ~~segments.~~Salt segment, which was partially offset by a decrease in our Plant Nutrition segment.

•Operating earnings ~~decreased 42%~~increased 40%, or ~~$12.7~~$18.2 million, due to ~~a decrease~~an increase in ~~our plant nutrition business,~~Salt segment, which was partially offset by ~~an increase~~a decrease in our ~~Salt~~Plant Nutrition segment.


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•Earnings before interest, taxes, depreciation and amortization (“EBITDA”)* adjusted for items management believes are not indicative of our ongoing operating performance (“Adjusted EBITDA”)* ~~decreased 18%~~increased 30%, or ~~$11.9~~$22.2 million.

•Diluted net earnings per share decreased ~~$0.38.~~

~~COMMENTARY: NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2020~~

•~~Total sales decreased 4%, or $37.8 million, due~~$0.04 to ~~a decrease in our Salt and Plant Nutrition South America segments, which was partially offset by an increase in our Plant Nutrition North America segment.~~

•Operating earnings increased 28%, or $18.7 million, due to increases in our Salt and Plant Nutrition South America segments, which was partially offset by lower earnings in our Plant Nutrition North America segment.

•~~Adjusted EBITDA increased 10%, or $17.6 million.~~

•~~Diluted net earnings per share increased $0.59.~~$0.95.

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THREE ~~AND NINE~~ MONTHS ENDED ~~SEPTEMBER 30~~MARCH 31

COMMENTARY: THREE MONTHS ENDED ~~SEPTEMBER 30, 2019~~MARCH 31, 2020 AND ~~2020~~

~~Gross Profit: Decreased 23%, or $17.7 million; Gross Margin decreased by one percentage point~~

•~~Salt segment gross profit increased $3.2 million primarily due to lower per-unit product costs and lower logistics costs.~~

•The gross profit of the plant nutrition business, on a combined basis, decreased $21.1 million due to an $11.9 million decrease in our Plant Nutrition North America segment gross profit and a $9.2 million decrease in our Plant Nutrition South America segment gross profit. Plant Nutrition South America segment gross profit decreased primarily due to the impact of translating the weaker Brazilian reais and lower sales volumes. Plant Nutrition North America segment gross profit ~~decreased due a decrease in sales volumes and higher product costs due primarily to an inventory adjustment of $7.4 million related to an overstatement of bulk SOP stockpiles at~~ ~~our Ogden facility.~~

~~COMMENTARY: NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2020~~2021

Gross Profit: Increased 9%28%, or ~~$17.5~~$20.8 million; Gross Margin increased ~~by 2~~1.0 percentage ~~points~~point to 23%

•Salt segment gross profit increased ~~$23.6~~$22.6 million primarily due to higher ~~average~~ sales ~~prices~~volumes and lower per-unit highway deicing product and logistics costs, which ~~were~~was partially offset by lower averages sales ~~volumes and higher per-unit product costs at our North American facilities and lower production volumes at our U.K. mine.~~prices.

•The gross profit of the ~~plant nutrition business, on a combined basis, decreased $7.0 million.~~ Plant Nutrition ~~North America~~ segment ~~gross profit~~ decreased ~~$6.1~~$1.7 million due to higher per-unit product costs primarily due to ~~lower average sales prices and higher product costs due to an inventory adjustment~~the quality of ~~$7.4 million related to an overstatement of bulk SOP stockpiles~~the pond harvest at our Ogden facility ~~partially offset by higher~~and lower average sales ~~volumes. Plant Nutrition South America segment gross profit decreased $0.9 million primarily due to the weaker Brazilian reais,~~prices, which was partially offset by ~~higher sales volumes.~~lower per-unit logistics costs.

OTHER EXPENSES AND INCOME

COMMENTARY: THREE MONTHS ENDED ~~SEPTEMBER 30, 2019~~MARCH 31, 2020 AND ~~2020~~2021

SG&A: ~~Decreased $5.0~~Increased $2.6 million; ~~increased~~Decreased 1.0 percentage point as a percentage of sales from ~~13.6%~~8.6% to ~~14.6%~~7.6%

•The ~~decrease~~increase in SG&A expense was primarily due to ~~lower compensation in all segments, lower~~higher corporate professional ~~service~~services fees and ~~reduced travel expenses due to COVID-19, partially offset by increased~~higher corporate ~~depreciation expense.~~incentive compensation.

Interest Expense: Decreased ~~$0.6~~$0.9 million to ~~$17.1~~$15.7 million

•The decrease was primarily due to a decrease in ~~debt outstanding, which was partially offset by an increase in~~our weighted average interest rates during the period due to lower interest rates on our term loan and the ~~refinancing~~use of our ~~debt~~revolving accounts receivable financing facility in ~~the fourth quarter of 2019.~~2021 which has a lower interest rate when compared to our revolving credit facility.

Loss (Gain) on Foreign Exchange: Decreased ~~$5.9~~$20.1 million from income of ~~$1.8~~$18.0 million to an expense of ~~$4.1~~$2.1 million

•We realized foreign e~~xchange~~exchange losses of ~~$4.1~~$2.1 million in the ~~third~~first quarter of ~~2020~~2021 compared to gains of ~~$1.8~~$18.0 million in the ~~third~~first quarter of ~~2019~~2020 primarily due ~~primarily~~ to changes in foreign currency exchange rates on our non U.S. dollar denominated intercompany ~~loans.~~

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~~Other, Net: Decreased $0.7 million from income of $0.8 million to income of $0.1 million~~

•~~The decrease in other income was primarily due to lower interest income.~~loans between our U.S. and foreign subsidiaries.

Income Tax ~~(Benefit)~~ Expense: ~~Decreased $6.1 million from an~~Tax expense ~~of $4.8 million to a benefit of $1.3~~was unchanged at $12.6 million

•~~The decrease in income~~Income tax expense was ~~primarily due to lower pretax income~~$12.6 million in both periods. The effective tax rate increased from 27% in the ~~third~~first quarter of 2020 ~~versus~~to 28% in the ~~third quarter of 2019.~~current period.

•Our income tax provision in both periods differs from the U.S. statutory rate primarily due to U.S. statutory depletion, state income taxes, global intangible low-taxed income, foreign income, mining and withholding taxes and interest expense recognition differences for tax and financial reporting purposes.

Net Loss from Discontinued Operations: Increased from a loss of $6.3 million to a loss of $256.5 million

•~~Our effective tax rate increased~~The loss from ~~31% in~~discontinued operations resulted primarily from the ~~third quarter~~impairment of ~~2019 to 38% in~~our South America chemicals and specialty plant nutrition businesses of $255.2 million reflecting the ~~third quarter of 2020 primarily~~accumulated currency translation adjustment due to ~~refinements made in each period related to our expected full-year pretax profit and effective tax rate.~~the significant weakening of the Brazilian real since the acquisition of these businesses. This loss was partially offset

~~COMMENTARY: NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2020~~


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~~SG&A: Decreased $1.2 million; increased 0.4 percentage points as a percentage~~by improved operating earnings of ~~sales from 12.9% to 13.3%~~our South America businesses and North America micronutrient product businesses.

•Our operating earnings for our South America chemicals and specialty nutrition businesses and North America micronutrient product businesses improved by $4.7 million and $1.8 million, respectively. The ~~decrease~~improvements in ~~SG&A expense was primarily~~our South America businesses were due to ~~lower travel expenses due to COVID-19~~higher sales volumes in ~~all segments, partially offset by higher incentive compensation and higher corporate depreciation expense.~~

~~Interest Expense: Increased $2.6 million to $53.3 million~~

•~~The increase was primarily due to an increase in interest rates due to the refinancing of~~ our ~~debt in the fourth quarter of 2019,~~specialty plant nutrition business, which was partially offset by lower ~~debt levels.~~

~~Loss (Gain) on Foreign Exchange: Improved $12.5 million from an expense of $7.3 million to income of $5.2 million~~

•~~We realized foreign exchange gains of $5.2 million in the first nine months of 2020 compared to~~chemical sales volumes and a loss of $7.3 million in the first nine months of 2019 due primarily to changes in foreign currency exchange rates on our non U.S. dollar denominated intercompany loans between our U.S. and foreign subsidiaries.

~~Other, Net: Decreased $1.5 million from income of $1.9 million to income of $0.4 million~~

•34% weaker Brazilian real. The ~~decrease in other income is~~North America micronutrient product business improved primarily due to ~~fees related to our U.S. securitization facility~~lower SG&A expenses and ~~lower interest income~~improved average sales prices. The improvements in ~~the current period.~~

~~Income Tax Expense: Increased $6.3 million from $5.3 million to $11.6 million~~

•~~The increase in income tax expense~~operating earnings for both businesses was ~~primarily due to higher pretax income in the third quarter of 2020 versus the third quarter of 2019,~~ partially offset by costs incurred during the ~~discrete tax expense items in the first quarter of 2019.~~

•~~Our effective tax rate decreased from 45% in 2019 to 30% in 2020 primarily due~~current period related to the ~~impact~~sale of ~~discrete tax items in~~ the ~~first quarter of 2019.~~businesses.

Operating Segment Performance

The following financial results represent consolidated financial information with respect to sales from our Salt ~~Plant Nutrition North America~~ and Plant Nutrition ~~South America~~ segments. The results of operations of the consolidated records management business, and other incidental revenues, include sales of ~~$2.6~~$2.8 million and ~~$2.3 million for the third quarter of 2020 and 2019, respectively, and $7.6 million and $7.1~~$2.7 million for the first ~~nine months~~quarter of ~~2020~~2021 and ~~2019,~~2020, respectively. These revenues are not material to our consolidated financial results and are not included in the following operating segment financial data.

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Salt

THREE ~~AND NINE~~ MONTHS ENDED ~~SEPTEMBER 30~~MARCH 31


		3Q 2020		3Q 2019		2020 YTD		2019 YTD			1Q 2021		1Q 2020
Salt Sales (in millions)	Salt Sales (in millions)	$	141.3	$	159.6	$	550.9	$	578.6	Salt Sales (in millions)	$	369.0	$	287.8
Salt Operating Earnings (in millions)	Salt Operating Earnings (in millions)	$	25.0	$	20.6	$	111.6	$	87.5	Salt Operating Earnings (in millions)	$	80.1	$	56.9
Salt Sales Volumes (thousands of tons)	Salt Sales Volumes (thousands of tons)									Salt Sales Volumes (thousands of tons)
Highway deicing	Highway deicing	1,205		1,403		5,330		5,811		Highway deicing	4,550		3,104
Consumer and industrial	Consumer and industrial	458		500		1,327		1,489		Consumer and industrial	478		469
Total tons sold	Total tons sold	1,663		1,903		6,657		7,300		Total tons sold	5,028		3,573
Average Salt Sales Price (per ton)	Average Salt Sales Price (per ton)									Average Salt Sales Price (per ton)
Highway deicing	Highway deicing	$	55.28	$	60.01	$	64.41	$	60.19	Highway deicing	$	64.00	$	69.30
Consumer and industrial	Consumer and industrial	$	162.96	$	150.76	$	156.42	$	153.67	Consumer and industrial	$	162.70	$	154.84
Combined	Combined	$	84.94	$	83.84	$	82.75	$	79.25	Combined	$	73.38	$	80.53

COMMENTARY: THREE MONTHS ENDED ~~SEPTEMBER 30, 2019~~MARCH 31, 2020 AND ~~2020~~2021

•Salt sales ~~decreased 11%~~increased 28%, or ~~$18.3~~$81.2 million, primarily due to ~~lower~~higher Salt sales volumes, ~~and highway deicing average sales prices,~~ which were partially offset by ~~higher consumer and industrial~~lower average sales prices.

•Average sales prices ~~contributed $0.1 million to~~decreased 9%, partially offsetting the Salt sales ~~decline, although the~~increase by $20.4 million, due to lower highway deicing average sales ~~mix resulted in a 1% increase in combined average Salt sales prices as higher-priced consumer and industrial sales volumes were a higher proportion of total sales in the current period.~~prices.

•Highway deicing average sales prices decreased 8% due to lower North American highway deicing contract prices for the 2020-2021 winter ~~season and increased sales to chemical customers, which have a lower average sales price.~~season. Consumer and industrial average sales prices increased 8%5% due to ~~price increases implemented during the period.~~product sales mix.


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•Salt sales volumes ~~decreased 13%~~increased 41%, or ~~240,000~~1,455,000 tons, and contributed ~~$18.2~~$101.6 million to the sales ~~decline.~~increase. Highway deicing sales volumes ~~decreased 14%~~increased 47% primarily as a result of ~~lower early fill volumes due to the milder~~an increase in winter weather activity in February 2021 in the U.S. and the first quarter of ~~2020 in North America, which was partially offset by higher sales volumes in~~2021 the ~~U.K and higher sales to chemical customers.~~U.K. Consumer and industrial sales volumes ~~decreased 8%~~increased 2% due to ~~the impact of COVID-19 on our non-deicing~~an increase in deicing sales ~~and reduced pre-season demand for our consumer and industrial deicing products.~~volumes.

•Salt operating earnings increased ~~21%~~41%, or $4.4 million, due to lower per-unit product cost that resulted from higher production volumes at our Goderich mine and lower per-unit logistics costs. Prior period product costs were negatively impacted by several items including unplanned downtime at our North America mines, labor dispute settlement expense at our Goderich mine and executive transition costs.

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~~COMMENTARY: NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2020~~

•Salt sales decreased 5%, or $27.7 million, primarily due to lower Salt sales volumes, which were partially offset by higher highway deicing average sales prices in the first half of 2020 and higher consumer and industrial average sales prices.

•~~Salt average sales prices increased 4% and contributed $26.1 million to sales due to higher highway deicing sales~~ ~~prices in the first half of 2020 and higher consumer and industrial average sales prices.~~

•~~Highw~~ay deicing average sales prices increased 7% due to the impact of higher North American highway deicing contract prices for the 2019-2020 winter season realized during the first half of 2020. Consumer and industrial average sales prices increased 2% primarily due to price increases taken during 2020 and sales mix.

•Salt sales volumes decreased 9%, or 643,000 tons, and unfavorably impacted sales by $53.8 million. Highway deicing sales volumes decreased 8% primarily as result of milder winter weather in the first quarter of 2020 in North America and the U.K. Consumer and industrial sales volumes also decreased 11% due to lower first quarter sales of deicing products and lower sales of non-deicing products primarily due to COVID-19.

•~~Salt operating earnings increased 28%, or $24.1~~$23.2 million, due to higher ~~Salt~~deicing sales ~~prices~~volumes, lower highway deicing per-unit product cost and lower highway deicing per-unit logistics costs. The improved per unit product cost is primarily due to higher operating rates at our U.K. and Goderich mines as well as higher first quarter 2020 costs ~~which were~~of purchased salt and expenses stemming from the upgrades to our mining equipment at our Goderich mine. The increase in operating earnings was partially offset by higher per-unit product cost at our consumer and industrial facilities primarily due to lower production ~~volumes in the U.K. and our consumer and industrial plants and increased professional service fees.~~volumes.

Plant Nutrition (Formerly Plant Nutrition North ~~America~~America)

THREE ~~AND NINE~~ MONTHS ENDED ~~SEPTEMBER 30~~MARCH 31

3Q 2020 3Q 2019 2020 YTD 2019 YTD
Plant Nutrition North America Sales (in millions) $ 35.2 $ 44.4 $ 150.9 $ 129.7
Plant Nutrition North America Operating (Loss) Earnings (in millions) $ (6.1) $ 4.7 $ 4.2 $ 7.7
Plant Nutrition North America Sales Volumes (thousands of tons) 54 69 239 200
Plant Nutrition North America Average Sales Price (per ton) $ 651 $ 641 $ 631 $ 648


	1Q 2021		1Q 2020
Plant Nutrition Sales (in millions)	$	54.2	$	56.4
Plant Nutrition Operating Earnings (in millions)	$	4.4	$	6.6
Plant Nutrition Sales Volumes (thousands of tons)	94		96
Plant Nutrition Average Sales Price (per ton)	$	579	$	590

COMMENTARY: THREE MONTHS ENDED ~~SEPTEMBER 30, 2019~~MARCH 31, 2020 AND ~~2020~~2021

•Plant Nutrition ~~North America~~ sales decreased ~~21%~~4%, or ~~$9.2~~$2.2 million due to lower sales volumes ~~which was partially offset by higher~~and lower average sales prices.

•Plant Nutrition ~~North America~~ sales volumes decreased ~~22%~~2%, or ~~15,000~~2,000 tons, ~~due to delays in fall application of SOP as a result of drought and wildfires in the western U.S.,~~ which ~~were partially offset by increased sales of micronutrient products and~~ resulted in a ~~$9.6~~$1.2 million decrease in sales.

•Plant Nutrition ~~North America~~ average sales prices ~~increased~~decreased 2% ~~due to a higher proportion of sales from micronutrients, which have a higher sales price~~, resulting in a ~~$0.4~~$1.0 million ~~offset to the~~ decrease in sales. ~~Compared to the prior year, both SOP and micronutrient prices declined.~~

•Plant Nutrition ~~North America~~ operating earnings decreased ~~$10.8~~$2.2 million to ~~a loss of $6.1~~$4.4 million due to lower sales ~~volumes~~prices and higher per-unit product costs partially offset by lower per-unit logistics costs due to ~~an inventory adjustment~~a higher mix of ~~$7.4 million related~~direct shipments to ~~an overstatement of bulk SOP stockpiles~~customers compared to the prior period. Higher per-unit product costs were due to lower production yields, which primarily resulted from a lower quality pond harvest at our Ogden facility.

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~~COMMENTARY: NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2020~~

•~~Plant Nutrition North America sales increased 16%, or $21.2 million due to higher sales volumes, which was partially offset by lower average sales prices.~~

•Plant Nutrition North America sales volumes increased 20%, or 39,000 tons, which resulted in a $25.3 million increase in sales. Sales volumes in the first half of 2019 were lower due to the cold and wet weather experienced in our key markets

•~~Plant Nutrition North America average sales prices decreased 3%, providing a $4.1 million offset to the increase in sales.~~

•Plant Nutrition North America operating earnings decreased $3.5 million to $4.2 million due to lower average sales prices and higher per-unit product costs due to an inventory adjustment of $7.4 million related to an overstatement of bulk SOP stockpiles at our Ogden facility, which was partially offset higher sales volumes, lower per-unit shipping and handling costs, lower depreciation expense and lower SG&A expenses.

~~Plant Nutrition South America~~

~~THREE AND NINE MONTHS ENDED SEPTEMBER 30~~

3Q 2020 3Q 2019 2020 YTD 2019 YTD
Plant Nutrition South America Sales (in millions) $ 103.3 $ 135.0 $ 243.0 $ 274.8
Plant Nutrition South America Operating Earnings (in millions) $ 15.0 $ 22.4 $ 24.2 $ 21.5
Plant Nutrition South America Sales Volumes (thousands of tons)
Agricultural productivity 148 166 343 327
Chemical solutions 82 84 257 246
Total tons sold 230 250 600 573
Average Plant Nutrition South America Sales Price (per ton)
Agricultural productivity $ 582 $ 673 $ 549 $ 635
Chemical solutions $ 213 $ 275 $ 213 $ 272
Combined $ 449 $ 540 $ 405 $ 479

~~COMMENTARY: THREE MONTHS ENDED SEPTEMBER 30, 2019 AND 2020~~

•~~Plant Nutrition South America sales decreased 23%, or $31.7 million, due to lower average sales prices resulting from a 38% unfavorable weighted average change in the Brazilian re~~ais versus the U.S. dollar from the prior year and a decline in sales volumes. In local currency, sales increased by 5% due to improved sales prices in agricultural productivity and chemical solutions products.

•Plant Nutrition South America sales volumes decreased 8%, or 20,000 tons, contributing $13.0 million to the decrease in sales. Agricultural productivity sales volumes decreased 11% due to early purchasing of crop inputs in the second quarter as well as some delays in purchasing in the third quarter due to unfavorable weather conditions. Chemical solutions sales volumes decreased 2% due to lower water treatment sales.

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•A 38% weakening of the Brazilian reais caused a 17% decrease in Plant Nutrition South America average sales prices, reducing sales by $18.6 million. In local currency, a stronger mix of agricultural productivity sales resulted in a 15% increase in average sales prices.

•Plant Nutrition South America operating earnings decreased $7.4 million to $15.0 million due to a weaker Brazilian reais, lower sales volumes and higher SG&A costs, primarily from incentive compensation and professional services.

~~COMMENTARY: NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2020~~

•Plant Nutrition South America sales decreased $31.8 million, due to a 31% unfavorable weighted average change in the Brazilian reais versus the U.S. dollar from the prior year, which was offset by higher sales volumes.

•~~Plant Nutrition South America sales volumes increased 5%, or 27,000 tons, which contributed $13.2 million to sales. Agricultura~~l productivity sales volumes increased 5% due primarily to improvements in farmer economics and affordability of fertilizer products due to foreign exchange and barter rates. Chemical solutions sales volumes increased 4% due primarily to higher sales of chlor-akali products.

•~~The 31% weakening of the Brazilian reais reduced sales by $44.7 million. In local currency, a stronger mix of agricultural productivity sales and price increases in most product lines resulted in~~ ~~a 11% increase in average sales prices.~~

•Plant Nutrition South America operating earnings increased $2.7 million from $21.5 million to earnings of $24.2 million due to higher sales volumes which was partially offset by a weaker Brazilian reais and increased SG&A costs due to incentive compensation and professional services.

~~2020~~2021 Full-Year Outlook

•~~After completion~~Given higher Salt sales volumes in the first quarter of ~~the North American highway deicing bid season,~~2021, we expect Salt sales volumes for ~~2020~~2021 to range from ~~10.5~~11.5 million tons to ~~10.8~~12.3 million tons.

•Plant Nutrition ~~North America~~ sales volumes for ~~2020~~2021 are expected to range from ~~340,000~~350,000 tons to ~~365,000~~380,000 tons.

•~~We expect 2020 Plant Nutrition South America sales volumes~~Full year 2021 capital expenditures are expected to ~~range from 800,000 tons~~be in the $95 million to ~~900,000 tons.~~$100 million range.

•For information about the impact of the COVID-19 pandemic on the Company, see “–COVID-19 ~~Pandemic~~Pandemic"” and “Part ~~II–~~I, Item ~~1A–Risk Factors~~1A, “Risk Factors” in.” our Annual Report on Form 10-K for the year ended December 31, 2020.


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Liquidity and Capital Resources

Historically, our cash flows from operating activities have generally been adequate to fund our basic operating requirements and ongoing debt service. We have also used cash generated from operations to fund capital expenditures, which strengthen our operational position, pay dividends, fund smaller acquisitions and repay our debt. To a certain extent, our ability to meet our short- and long-term liquidity and capital needs is subject to general economic, financial, competitive, legislative, regulatory and weather conditions, effects of climate change, geological variations in our mine deposits and other factors that are beyond our control. Historically, our working capital requirements have been the highest in the fourth quarter and lowest in the second quarter. When needed, we may fund short-term working capital requirements by accessing our $300 million revolving credit facility.

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. As of ~~September 30, 2020, we~~March 31, 2021, we had ~~$31.8~~$19.6 million ofof cash and cash equivalents (in our Consolidated Balance ~~Sheets)~~Sheets) that were either held directly or indirectly by foreign subsidiaries. ~~During the fourth quarter~~As a result of ~~2018,~~U.S. tax reform, we revised our permanently reinvested assertion ~~to indicate that~~and we now expect to repatriate approximately $150 million of unremitted foreign earnings on which we have recorded ~~a $4.8~~$4.3 million ~~deferred~~of income tax ~~liability~~expense as of ~~September 30, 2020~~March 31, 2021 for foreign withholding tax and state income ~~tax.~~taxes. Due to our ability to generate adequate levels of domestic cash flow on an annual basis, it is our current intention to continue to reinvest all remaining undistributed earnings of our foreign subsidiaries indefinitely. We review our tax circumstances on a regular basis with the intent of optimizing cash ~~accessibility~~accessibility and minimizing tax expense.

In addition, the amount of permanently reinvested earnings is influenced by, among other things, the profits generated by our foreign subsidiaries and the amount of investment in those same subsidiaries. The profits generated by our domestic and foreign subsidiaries are impacted by the transfer price charged on the transfer of our products between them. As discussed in Item 1, Note 7 toof our Consolidated Financial Statements, our calculated transfer price on certain products between one of our foreign subsidiaries and a domestic subsidiary has been challenged by Canadian federal and provincial governments. In ~~the fourth quarter of~~ 2017, we reached a ~~federal~~ settlement agreement with the Canadian Revenue Authority and the U.S. ~~tax authorities related to our~~Internal Revenue Service on transfer pricing issues for our 2007-2012 tax years. The recording of this settlement resulted in increased sales for our Canadian subsidiary of $85.7 million and increased offsetting expenses for our U.S. subsidiary in 2017 causing a domestic loss and significant foreign income. During 2018, in accordance with the settlement

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agreement, our U.S. subsidiary made intercompany cash payments of ~~$85.7~~$85.7 million to our Canadian subsidiary and tax payments to Canadian taxing authorities of $17.5 million. ~~The remaining liability was satisfied in 2019 with~~Additional tax payments of $5.3 ~~million.~~million were made during 2019 with the remaining liability of $1.4 million expected to be paid in 2021. Corresponding tax refunds of ~~$21.4~~$22.3 million ~~were~~have been received ~~primarily in 2019~~through March 31, 2021 from U.S. taxing authorities, with the remaining refund of approximately ~~$1.6~~$0.7 million expected in ~~2020 or early~~ 2021. Additionally during ~~the fourth quarter of~~ 2018, we reached a ~~federal~~ settlement agreement with federal Canadian and U.S. tax authorities on transfer pricing and management fees as part of an advanced pricing agreement ~~that covers~~covering tax years 2013-2021. The recording of this settlement in 2018 resulted in increased sales for our Canadian subsidiary of $106.1 million and offsetting expenses for our US subsidiary causing a domestic loss and significant foreign income in 2018. During ~~the second quarter of~~ 2019, in accordance with the settlement agreement, our U.S. subsidiary made intercompany cash payments of $106.1 million to our Canadian subsidiary and tax payments were made to Canadian taxing authorities of $29.9 million with the remaining ~~$1.5~~$1.4 million ~~of tax payments to be~~balance paid during 2020. Corresponding tax refunds of ~~$59.7~~$60.0 million have been received ~~as of September 30, 2020~~through March 31, 2021, from U.S. taxing authorities, of which $55 million was received during the first quarter of 2020, with the remaining ~~$1.9~~refund of $1.7 million expected in ~~2020 or early~~ 2021. ~~There are ongoing challenges by~~ Canadian provincial taxing authorities ~~regarding~~continue to challenge our transfer prices of certain ~~products.~~ items. The final resolution of these challenges may not occur for several years. We currently expect the outcome of these matters will not have a material impact on our results of operations. However, it is possible the resolution could materially impact the amount of earnings attributable to our domestic and foreign subsidiaries, which could impact the amount of permanently reinvested foreign ~~earnings as well as future cash flows from our domestic operations.~~earnings. See Item 1, Note 7to of our Consolidated Financial Statements for a discussion regarding our Canadian tax reassessments and settlement.

~~A portion of our loans in Brazil are denominated in euros. We have~~On March 23, 2021, we entered into ~~foreign currency agreements whereby we agreed~~a definitive agreement to ~~swap interest and principal payments on the loans denominated in euros~~sell our South America specialty plant nutrition business to ICL Brasil Ltda., a subsidiary of ICL Group Ltd., for ~~principal and interest payments denominated in~~R$1.11 billion Brazilian reais plus an amount that will be set at closing to equal $198.3 million U.S. dollars, subject to certain adjustments for net debt and working capital. The terms of the ~~functional currency~~agreement provide for an additional earn-out payment of ~~our Brazil subsidiary. See~~up to R$88 million Brazilian reais, payable in 2022 and calculated on a sliding scale, if the South America specialty plant nutrition business achieves certain full-year 2021 EBITDA performance targets. The transaction is expected to close in the third quarter of 2021, subject to customary closing conditions and required antitrust approval in Brazil. The Brazilian debt, presented in liabilities held for sale (see ~~Note 12~~Item 1, Not e 2), is expected to be deducted from gross proceeds from the transaction. We recorded a non-cash impairment loss of $255.2 million on our ~~Consolidated Financial Statements for a discussion~~South America businesses during the three months ended March 31, 2021, due to the significant weakening of ~~our foreign currency agreement.~~the Brazilian real since the date of acquisition of these businesses.

On April 7, 2021, we entered into a definitive agreement to sell a component of our North America micronutrient business to Koch Agronomic Services, LLC, a subsidiary of Koch Industries, for approximately $60.25 million, subject to a closing working capital adjustment. The transaction closed on May 4, 2021.


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Cash and cash equivalents as of ~~September 30, 2020~~March 31, 2021, of ~~$34.1~~$63.6 million ~~decreased $0.6 million from December 31, 2019.~~included cash held for sale of $20.8 million. We generated ~~$188.5~~$200.2 million of operating cash flows in the first ~~nine~~three months of ~~2020.~~2021. In the first ~~nine~~three months of ~~2020,~~2021, we used cash on hand and cash flows from operations to pay ~~$40.4~~$115.6 million of net long-term debt, to fund capital expenditures of ~~$62.9~~$18.2 million and pay dividends on our common stock of ~~$74.2~~$24.1 million. Cash and cash equivalents from continuing operations of $42.8 million increased $32.2 million from December 31, 2020. Cash flows from continuing operations totaled $196.8 million during the three months ended March 31, 2021, including income from continuing operations of $32.9 million, net working capital reductions of $122.4 million driven by the seasonality of our Salt business and depreciation, depletion and amortization of $29.9 million.

As of ~~September 30, 2020,~~March 31, 2021, we had ~~$1.36~~$1.20 billion of indebtedness, consisting of $250.0 million outstanding under our 4.875% Senior Notes due 2024, $500.0 million outstanding under our 6.75% Senior Notes due 2027, ~~$492.7~~$345.8 million of borrowings outstanding under our senior secured credit facilities (consisting of term loans and a revolving credit facility), ~~including $100.2 million borrowed~~with no borrowings against our revolving credit facility ~~and $88.5 million of Brazilian debt~~ (see Item 1, Note 8 toof our Consolidated Financial Statements for more detail regarding our debt). We had ~~$12.1~~$13.0 million of outstanding letters of credit as of ~~September 30, 2020,~~March 31, 2021, which reduced our revolving credit facility borrowing availability to ~~$187.7~~$287.0 million.

In the first quarter of 2021, we made a $41.7 million required prepayment of our term loan for 2020 Excess Cash Flow (as such term is defined in the credit agreement). This prepayment will reduce the future required term loan payments. As such, we will not have a scheduled term loan payment until June 2023.

On June 30, 2020, certain of our U.S. subsidiaries entered into a ~~three-year~~three-year committed revolving accounts receivable financing facility of up to ~~$100~~$100 million of borrowings with PNC Bank, National Association, as administrative agent and lender, and PNC Capital Markets, LLC, as structuring agent. As of ~~September 30, 2020~~March 31, 2021 we had ~~$28.0~~$100.0 million of outstanding loans under this accounts receivable financing facility. See Item 1, Note 8 toof our Consolidated Financial Statements for more information.

Our debt service obligations could, under certain circumstances, materially affect our financial condition and impair our ability to operate our business or pursue our business strategies. As a holding company, CMI’s investments in its operating subsidiaries constitute substantially all of its assets. Consequently, our subsidiaries conduct substantially all of our consolidated operating activities and own substantially all of our operating assets. The principal source of the cash needed to pay our obligations is the cash generated from our subsidiaries’ operations and their borrowings. Our subsidiaries are not obligated to make funds available to CMI. Furthermore, we must remain in compliance with the terms of our credit agreement governing our term loans and revolving credit facility, including the total leverage ratio and interest coverage ratio, in order to make payments on our debt or pay dividends to our stockholders. We must also comply with the terms of our indenture governing our senior notes. Although we are in compliance with our debt covenants as of ~~September 30, 2020,~~March 31, 2021, we can make no assurance that we will remain in compliance with these ratios nor can we make any assurance that the agreements governing the current and future indebtedness of our subsidiaries will permit our subsidiaries to provide us with sufficient dividends, distributions or loans to fund scheduled interest payments on our debt when due. If we consummate an additional acquisition, our debt service requirements could increase. Furthermore, we may need to refinance all or a portion of our indebtedness on or before maturity; however, we cannot provide assurance that we will be able to refinance any of our indebtedness on commercially reasonable terms or at all.

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The table below provides a summary of our cash flows by category:


~~NINE~~THREE MONTHS ENDED ~~SEPTEMBER 30, 2020~~MARCH 31, 2021			~~NINE~~THREE MONTHS ENDED ~~SEPTEMBER 30, 2019~~MARCH 31, 2020
Operating Activities:
» Net ~~earnings were $27.2~~loss was $223.6 million.			» Net earnings were ~~$6.4~~$27.6 million.
» Non-cash depreciation and amortization expense was ~~$103.6~~$34.6 million.			» Non-cash depreciation and amortization expense was ~~$102.8~~$33.1 million.
» Working capital items were a source of operating cash flows of $126.3 million.			» Working capital items were a source of operating cash flows of ~~$46.3~~$171.7 million.
» ~~Working capital items were a use~~Non-cash impairment loss of ~~operating cash flows of $21.5~~$253.1 million.
Investing Activities:
» Net cash flows used by investing activities included ~~$62.9~~$18.2 million of capital expenditures.			» Net cash flows used by investing activities included ~~$71.6~~$25.3 million of capital expenditures.
Financing Activities:
» Net cash flows used by financing activities included the payment of dividends of ~~$74.2~~$24.1 million.			» Net cash flows used by financing activities included the payment of dividends of ~~$73.6~~$24.8 million.
» In addition, we had net payments on our debt ~~$40.4~~of $115.6 million.			» In addition, we had net payments on our debt of ~~$49.3~~$97.7 million.

Other Matters

See Item 1, Notes 7 and 9to of our Consolidated Financial Statements for a discussion regarding labor, environmental and litigation matters.

~~Sensitivity Analysis Related~~Reconciliation of Net Earnings from Continuing Operations to EBITDA and Adjusted EBITDA

Management uses a variety of measures to evaluate our performance. 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. 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 comparability purposes (see Item 1, Note 2 for a discussion of discontinued operations). Both EBITDA and Adjusted EBITDA are non-GAAP financial measures used to evaluate the operating performance of our core business operations because our resource allocation, financing methods, cost of capital and income tax positions are managed at a corporate level, apart from the activities of the operating segments, and our operating facilities are located in different taxing jurisdictions, which can cause considerable variation in net earnings. We also use ~~these measures~~EBITDA and Adjusted EBITDA to assess our operating performance and return on capital against other companies, and to evaluate potential acquisitions or other capital projects. ~~These measures~~EBITDA and Adjusted EBITDA are not calculated under U.S. GAAP and should not be considered in isolation or as a substitute for net earnings, operating earnings, cash flows or other financial data prepared in accordance with U.S. GAAP or as a measure of our overall profitability or liquidity. EBITDA and Adjusted EBITDA exclude interest expense, income taxes and depreciation and amortization, each of which are an essential element of our cost structure and cannot be eliminated. Furthermore, Adjusted EBITDA excludes other cash and non-cash items, including stock-based compensation, loss (gain) on foreign exchange and other expense (income). Our borrowings are a significant component of our capital structure and interest expense is a continuing cost of debt. We are also required to pay income taxes, a required and ongoing consequence of our operations. We have a significant investment in capital assets and depreciation and amortization reflect the utilization of those assets in order to generate revenues. Our employees are vital to our operations and we utilize various stock-based awards to compensate and incentivize our employees. Consequently, any measure that excludes these elements has material limitations. While EBITDA and Adjusted EBITDA are frequently used as measures of operating performance, these terms are not necessarily comparable to similarly titled measures of other companies due to the potential inconsistencies in the method of calculation.

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The calculation of EBITDA and Adjusted EBITDA as used by management is set forth in the table below (in millions):

Three Months Ended
September 30, Nine Months Ended
September 30,
2020 2019 2020 2019
Net (loss) earnings $ (2.1) $ 10.6 $ 27.2 $ 6.4
Interest expense 17.1 17.7 53.3 50.7
Income tax (benefit) expense (1.3) 4.8 11.6 5.3
Depreciation, depletion and amortization 35.6 33.9 103.6 102.8
EBITDA 49.3 67.0 195.7 165.2
Adjustments to EBITDA:
  Stock-based compensation - non cash 2.1 0.6 7.2 4.0
  Loss (gain) on foreign exchange 4.1 (1.8) (5.2) 7.3
  Executive transition costs — 2.3 — 2.3
  Logistics impact from flooding — — — 2.8
  Other income, net (0.1) (0.8) (0.4) (1.9)
Adjusted EBITDA $ 55.4 $ 67.3 $ 197.3 $ 179.7


	Three Months Ended March 31,
	2021		2020
Net earnings from continuing operations	$	32.9	$	33.9
Interest expense	15.7		16.6
Income tax expense	12.6		12.6
Depreciation, depletion and amortization	29.9		27.4
EBITDA from continuing operations	91.1		90.5
Adjustments to EBITDA from continuing operations:
Stock-based compensation - non cash	3.8		2.3
Loss (gain) on foreign exchange	2.1		(18.0)
Other expense, net	0.3		0.3
Adjusted EBITDA from continuing operations	97.3		75.1
Adjusted EBITDA from discontinued operations	10.5		4.5
Adjusted EBITDA	$	107.8	$	79.6

Recent Accounting Pronouncements

See Part 1, Note 1 toof our Consolidated Financial Statements for a discussion of recent accounting pronouncements.

Effects of Currency Fluctuations and Inflation

Our operations outside of the U.S. are conducted primarily in Canada ~~Brazil~~ and the U.K. 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 enters into either a purchase or sales transaction using a currency other than the local currency of the transacting entity. With respect to currency translation risk, our financial condition and results of operations are measured and recorded in the relevant local currency and then translated into U.S. dollars for inclusion in our consolidated financial statements. Exchange rates between these currencies and the U.S. dollar have fluctuated significantly from time to time and may do so in the future. The majority of revenues and costs are denominated in U.S. dollars, with Canadian dollars ~~Brazilian reais~~ and British pounds sterling also being significant. Significant changes in the value of the Canadian dollar ~~Brazilian reais~~ or British pound sterling relative to the U.S. dollar could have a material effect on our financial ~~condition.~~condition and our ability to meet interest and principal payments on U.S. dollar-denominated debt, including borrowings under our senior secured credit facilities.

Although inflation has not had a significant impact on our operations, our efforts to recover cost increases due to inflation may be hampered as a result of the competitive industries and countries in which we operate.

Seasonality

We experience a substantial amount of seasonality in our sales. Our sales of our salt deicing products are seasonal. Consequently, our Salt segment sales and operating income are generally higher in the first and fourth quarters and lower during the second and third quarters of each year. In particular, sales of highway and consumer deicing salt and magnesium chloride products vary based on the severity of the winter conditions in areas where the product is used. Following industry practice in North America, we seek to stockpile sufficient quantities of deicing salt in the second, third and fourth quarters to meet the estimated requirements for the winter season.

Our plant nutrition business is also seasonal. The strongest demand for our Plant Nutrition South America products in Brazil typically occurs during the spring planting season. As a result, we and our customers generally build inventories during the low demand periods of the year to ensure timely product availability during the peak sales season. The seasonality of this demand results in our sales volumes and net sales for our Plant Nutrition South America segment usually being the highest during the third and fourth quarters of each year (as the spring planting season begins in September in Brazil).

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

Our business is subject to various types of market risks that include interest rate risk, foreign currency exchange rate risk and commodity pricing risk. Management has taken actions to mitigate our exposure to commodity pricing and foreign currency exchange rate risk by entering into natural gas derivative instruments and foreign currency contracts. We may take further actions to mitigate our exposure to interest rates, exchange rates and changes in the cost of transporting our products due to variations in our contracted carriers’ cost of fuel, which is typically diesel fuel. However, there can be no assurance that our hedging activities will eliminate or substantially reduce these risks. We do not enter into any financial instrument arrangements for speculative purposes. Our market risk exposure related to these items has not changed materially since December 31, ~~2019.~~2020.


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Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Quarterly Report on Form 10-Q, an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of ~~September 30, 2020,~~March 31, 2021, to ensure that information required to be disclosed in the reports it files and submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

For this purpose, disclosure controls and procedures include controls and procedures designed to ensure that information that is required to be disclosed under the Exchange Act is accumulated and communicated to the Company’s management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There has been no change in the Company’s internal control over financial reporting during the most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

We are involved in the legal proceedings described in Part I, Item 1, Note 7 and Part I, Item 1, Note 9 toof our Consolidated Financial Statements and, from time to time, various routine legal proceedings and claims arising from the ordinary course of our business. These primarily involve tax assessments, disputes with former employees and contract labor, commercial claims, product liability claims, personal injury claims and workers’ compensation claims. Management cannot predict the outcome of legal proceedings and claims with certainty. Nevertheless, 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. There have been no material developments since December 31, ~~2019~~2020 with respect to our legal proceedings, except as described in Part I, Item 1, Note 7 and Part I, Item 1, Note 9 toof our Consolidated Financial Statements.

Item 1A. Risk Factors

For a discussion of the risk factors applicable to Compass Minerals, please refer to Part I, Item ~~1A.~~1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, ~~2019,~~2020, as updated and supplemented by the discussion ~~below related to the COVID-19 pandemic.~~ below.

The sale of our South America specialty plant nutrition business may not be completed on the terms or timeline currently contemplated, or at all, as the parties involved may be unable to satisfy the conditions or obtain the approvals required to complete these transactions or such approvals may contain material restrictions or conditions.

The consummation of sale of our South America specialty plant nutrition business is subject to numerous conditions, including the occurrence of certain events contemplated by the definitive agreement to sell our South America specialty plant nutrition business (the “South America Sale Agreement”), such as consummation of the Pre-Closing Restructuring (as defined in the South America Sale Agreement), obtaining approval from Brazil’s Administrative Council for Economic Defense, including its General Superintendence and Administrative Tribunal (“CADE”) and other customary closing conditions.

CADE may not approve the transactions contemplated by the South America Sale Agreement, may impose conditions to the approval of such transactions or require changes to the terms of these transactions. Any such conditions or changes could have the effect of delaying completion of these transactions or reducing the anticipated benefits of these transactions.

We cannot assure you that the sale of our South America specialty plant nutrition business will be consummated on the terms or timeline currently contemplated, or at all. For example, the COVID-19 pandemic could impact the ability to satisfy, or ~~other outbreaks~~the timing of ~~infectious disease or similar public health threats,~~satisfying, the conditions contemplated by the South America Sale Agreement.

Failure to complete the sale of our South America specialty plant nutrition business could ~~materially and~~ adversely affect our business, financial condition and results of operations.

If the proposed sale of our South America specialty plant nutrition business is not consummated, we will be subject to several risks, including the following:

•We have expended and will continue to expend time and resources and incur expenses (such as with respect to legal, advisory and financial services) related to the proposed sale, which must be paid regardless of whether the proposed sale is consummated; and

•The ~~ongoing COVID-19 pandemic, and any other outbreaks~~price of ~~contagious diseases~~our common stock may decline, or ~~other adverse public health developments in the United States or worldwide, could have a material adverse effect on~~ our business, financial condition and results of ~~operations. As an essential~~operations may be impacted to the extent that the market price of our common stock reflects positive market assumptions that the proposed sale will be completed and the related benefits will be realized.

If the proposed sale of our South America specialty plant nutrition business is not completed for any reason, we ~~have continued producing~~cannot assure you that these or other risks will not materialize and delivering products that support critical industries such as transportation, agriculture, chemical, food, pharmaceutical and animal nutrition. However, COVID-19 has significantly impacted economic activity and markets worldwide in 2020, and it has and may continue to negativelywill not materially affect our business, ~~in a number~~financial condition or results of ~~ways. These effects include, but are not limited to:~~operations.

•~~Disruptions or restrictions on our employees’ ability to work effectively due to illness, travel bans, quarantines, shelter-in-place orders or other limitations could impact our business.~~

•~~Temporary closures or disruptions at our facilities or~~


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The announcement of the ~~facilities~~planned sales of our customers or suppliers could reduce demand for our products or affect our ability to timely meet our customer’s orders and negatively impact our supply chain. For example, we experienced lost sales in the second and third quarter of 2020 primarily for certain customers of our non-deicing salt products due to manufacturing outages and retail disruptions. Compliance with new governmental regulations, such as social distancing regulations, could increase our operational costs. COVID-19 has not interrupted the operations of our mining and manufacturing operations in NorthSouth America and Brazil; however, operations at our U.K. salt mine were idled near the end of March 2020 due to the mild 2019-2020 winter weather experienced in that market, along with U.K. government guidance on COVID-19 preventative measures, with operations resuming in mid-May 2020 using a gradual ramp up. In addition, we have incurred increased costs related to health and safety precautions we have put in place at our facilities, such as increasing sanitation of offices and common areas within our facilities.

•Our mining and manufacturing facilities rely on raw materials and components provided by our suppliers. The impacts of COVID-19 could cause delays or disruptions in our supply chain and we could experience a mining or manufacturing slow-down or seek to obtain alternate sources of supply, which may not be available or may be more expensive. Disruptions to our supply chain and business operations, or to our suppliers’ or customers’ supply chains and business operations, could include disruptions from the closure of supplier and manufacturer facilities, interruptions in the supply of raw materials and components, personnel absences, or restrictions on the shipment of our or our suppliers’ or customers’ products, any of whichbusinesses could have ~~adverse ripple effects on our business.~~

•Global health concerns, such as COVID-19, have resulted in and may continue to result in social, economic and labor instability in the countries and localities in which we or our suppliers and customers operate. Any of these uncertainties could have a materialan adverse effect on our business, financial condition or results of operations.

•The ~~failure~~announcement of ~~third parties on~~the potential sales of our South America businesses and pendency of our proposed sale of our South America specialty plant nutrition business could disrupt our business in negative ways. For example, the proposed sales of our South America businesses could disrupt our operations in South America, which we rely, including our suppliers, customers, contractors, commercial banks and external business partners, to meet their respective obligations to the Company, or significant disruptions in their ability to do so, which may be caused by their own financial or operational difficulties, could have an adverse impact on our relationships with our customers and other third-party business partners, and could distract our workforce and management team. Any such event could adversely affect our business, financial condition or results of operations.

•~~Remote work arrangements for~~ In addition, under the South America Sale Agreement, we are subject to certain restrictions on the conduct of our ~~employees could strain our technology resources and introduce operational risks, including heightened cybersecurity risk. Remote working environments~~business, which may ~~be less secure and more~~

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~~susceptible to hacking attacks, including phishing and other social engineering attempts that seek to exploit the COVID-19 pandemic. These risks could also impact the third parties on which we rely.~~

•The COVID-19 pandemic has significantly increased economic and demand uncertainty and has led to disruption and volatility in the global credit and financial markets, which increases the cost of capital and adversely impacts access to capital for both the Company and our customers and suppliers. Disruption and volatility in the global and financial markets or other factors may also cause adverse fluctuations in foreign currency exchange rates, particularly an increase in the value of the U.S. dollar against the Canadian dollar, the Brazilian reais or the U.K. pound sterling, which could negatively affect our ability to execute certain business ~~financial condition and reported results~~strategies while the proposed sale of ~~operations.~~our South America specialty plant nutrition business is pending.

The impact of ~~COVID-19~~currency fluctuation or devaluation in Brazil may ~~also exacerbate other risks discussed~~negatively affect the earn-out consideration we may be entitled to receive pursuant to the South America Sale Agreement.

The South America Sale Agreement provides that, if the transactions contemplated by the agreement are consummated, we may be entitled to a maximum earn-out payment of R$88 billion Brazilian reais, payable in ~~Part I, Item 1A. “Risk Factors”~~2022, if the South America specialty plant nutrition business meets certain performance metrics. The exchange rate between the Brazilian real and the U.S. dollar has fluctuated and will continue to do so in ~~our Annual Report on Form 10-K for~~ the ~~year ended December 31, 2019, any of which could have a material adverse effect on us.~~future. The ~~extent to which the COVID-19 pandemic, or other outbreaks of disease or similar public health threats, materially and~~volatility in this exchange rate may adversely impact our ~~business, financial condition and results~~expected payment once converted to U.S. dollars at the time of ~~operations is highly uncertain and will depend on future developments. Such developments may include~~payment. Although we expect to employ a variety of techniques to mitigate the ~~geographic spread and duration~~impact of fluctuations of the ~~virus, the severity of the disease~~applicable exchange rate, we cannot guarantee that such hedging and ~~the actions that may~~risk management strategies will be ~~taken by various governmental authorities~~effective, and ~~other third parties in response to the outbreak. In addition, how quickly, and to what extent, normal economic and operating conditions can resume cannot~~any such earn-out payment amount could be predicted, and the resumption of normal business operations may be delayed or constrained by lingering effects on our suppliers, third-party service providers and customers. There is also no certainty about when the adverse impacts of the COVID-19 pandemic will end.adversely affected.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(a) None.

(b) None.

The Company withheld 27,291 shares with a fair value of $1.2 million related to the vesting of restricted stock units during the first nine months of 2020. The fair value of the shares were valued at the closing price at the vesting date and represent the employee tax withholding for the employee’s compensation. These shares are not considered common stock repurchases under the Company’s equity compensation plans.None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95 to this Quarterly Report on Form 10-Q.

Item 5. Other Information

None.

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Item 6. Exhibits


Exhibit No.						Exhibit Description
2.1						Quotas Purchase Agreement, dated March 23, 2021, among Compass Minerals do Brasil Ltda., ICL Brasil Ltda, Compass Minerals America Inc. and Amsterdam Fertilizers B.V. (incorporated by reference to Exhibit 2.1 to Compass Minerals International Inc.’s Current Report on Form 8-K filed on March 24, 2021).
31.1*						Section 302 Certifications of Kevin S. Crutchfield, President and Chief Executive Officer.
31.2*						Section 302 Certifications of James D. Standen, Chief Financial Officer.
32**						Certification Pursuant to 18 U.S.C. §1350 of Kevin S. Crutchfield, President and Chief Executive Officer, and James D. Standen, Chief Financial Certification Pursuant to 18 U.S.C. §1350 of Kevin S. Crutchfield, President and Chief Executive Officer, and James D. Standen, Chief Financial Officer.
95*						Mine Safety Disclosures.
101**						The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended ~~September 30, 2020,~~March 31, 2021, formatted in Inline Extensible Business Reporting Language (iXBRL): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive ~~Income (Loss),~~Loss, (iv) Consolidated Statements of Stockholders’ Equity, (v) Consolidated Statements of Cash Flows, and (vi) the Notes to the Consolidated Financial Statements.
104						Cover Page Interactive Data File (contained in Exhibit 101).
* Filed herewith
** Furnished herewith

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	COMPASS MINERALS INTERNATIONAL, INC.

Date: ~~November 5, 2020~~May 7, 2021	By:	/s/ James D. Standen
		James D. Standen
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

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	Consolidated Balance Sheets Location	September 30, 2020		December 31, 2019
Assets
Operating leases	Other assets	$	56.2	$	53.7
Finance leases	Property, plant and equipment, net	6.8		5.8
Total leased assets		$	63.0	$	59.5
Liabilities
Current liabilities:
Operating leases	Accrued expenses and other current liabilities	$	13.1	$	12.8
Finance leases	Accrued expenses and other current liabilities	1.3		1.1
Noncurrent liabilities:
Operating leases	Other noncurrent liabilities	43.8		41.0
Finance leases	Other noncurrent liabilities	6.4		6.2
Total lease liabilities		$	64.6	$	61.1


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Finance lease cost:
Amortization of lease assets	$	0.4	$	0.3	$	1.3	$	0.9
Interest on lease liabilities	0.1		0.1		0.4		0.4
Operating lease cost	4.5		4.5		12.6		14.2
Variable lease cost(a)	2.0		3.6		8.9		13.6
Net lease cost	$	7.0	$	8.5	$	23.2	$	29.1


September 30, 2020	Operating Leases		Finance Leases		Total
Remainder of 2020	$	2.7	$	0.5	$	3.2
2021	16.0		1.6		17.6
2022	12.0		1.0		13.0
2023	7.7		0.9		8.6
2024	5.6		0.8		6.4
After 2024	22.8		6.4		29.2
Total lease payments	66.8		11.2		78.0
Less: Interest	(9.9)		(3.5)		(13.4)
Present value of lease liabilities	$	56.9	$	7.7	$	64.6


	September 30, 2020		December 31, 2019
Weighted-average remaining lease term (years)
Operating leases	6.8		7.7
Finance leases	9.4		7.2
Weighted-average discount rate
Operating leases	3.9	%	4.3	%
Finance leases	7.4	%	7.6	%


Nine Months Ended September 30, 2020	Salt		Plant Nutrition North America		Plant Nutrition South America		Corporate & Other(a)		Total
Sales to external customers	$	550.9	$	150.9	$	243.0	$	7.6	$	952.4
Intersegment sales	0		3.0		0.3		(3.3)		—
Shipping and handling cost	153.9		21.6		10.4		0		185.9
Operating earnings (loss)	111.6		4.2		24.2		(53.9)		86.1
Depreciation, depletion and amortization	49.2		30.7		13.8		9.9		103.6


Nine Months Ended September 30, 2020(a)	Gains and (Losses) on Cash Flow Hedges		Defined Benefit Pension		Foreign Currency		Total
Beginning balance	$	(0.6)	$	(6.9)	$	(184.6)	$	(192.1)
Other comprehensive income (loss) before reclassifications(b)	3.1		0		(165.0)		(161.9)
Amounts reclassified from accumulated other comprehensive loss	(3.0)		0.5		0		(2.5)
Net current period other comprehensive income (loss)	0.1		0.5		(165.0)		(164.4)
Ending balance	$	(0.5)	$	(6.4)	$	(349.6)	$	(356.5)



	Amount Reclassified from AOCL
	Three Months Ended September 30, 2020		Nine Months Ended September 30, 2020		Line Item Impacted in the Consolidated Statements of Operations
Gains (losses) on cash flow hedges:
Natural gas instruments	$	(0.2)	$	(0.8)	Product cost
Foreign currency contracts	0		(3.6)		Interest expense
Income tax benefit	0		1.4
Reclassifications, net of income taxes	(0.2)		(3.0)
Amortization of defined benefit pension:
Amortization of loss	$	0.2	$	0.6	Product cost
Income tax expense	(0.1)		(0.1)
Reclassifications, net of income taxes	0.1		0.5
Total reclassifications, net of income taxes	$	(0.1)	$	(2.5)


	Asset Derivatives			Liability Derivatives
Derivatives designated as hedging instruments:	Consolidated Balance Sheets Location	September 30, 2020		Consolidated Balance Sheets Location	September 30, 2020
Commodity contracts	Other current assets	$	0.9	Accrued expenses and other current liabilities	$	0.1
Commodity contracts	Other assets	0.2		Other noncurrent liabilities	0.2
Swap contracts	Other current assets	2.8		Accrued expenses and other current liabilities	0

Total derivatives designated as hedging instruments(a)(b)		$	3.9		$	0.3