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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, 2024
or
☐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: 001-34025
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INTREPID POTASH, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware
26-1501877
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
707 17th Street, Suite 4200
Denver, Colorado80202
(Address of principal executive offices)
(Zip Code)
(303) 296-3006
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act
Title of each classTrading symbolName of each exchange on which registered
Common Stock, par value $0.001 per shareIPINew 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 reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
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 the registrant was required to submit such files.) Yes ☒No☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes☐No☒

As of October 31, 2024, the registrant had outstanding 13,163,221 shares of common stock, par value $0.001 per share.

INTREPID POTASH, INC.
TABLE OF CONTENTS
Page
PART I - FINANCIAL INFORMATION    
ITEM 1. Condensed Consolidated Financial Statements (Unaudited)



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PART I - FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
INTREPID POTASH, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
September 30,December 31,
20242023
ASSETS
Cash and cash equivalents$38,034 $4,071 
Short-term investments1,979 2,970 
Accounts receivable:
Trade, net32,223 22,077 
Other receivables, net2,659 1,470 
Inventory, net109,578 114,252 
Prepaid expenses and other current assets5,783 7,200 
Total current assets190,256 152,040 
Property, plant, equipment, and mineral properties, net354,898 358,249 
Water rights19,184 19,184 
Long-term parts inventory, net32,385 30,231 
Long-term investments4,699 6,627 
Other assets, net9,395 8,016 
Non-current deferred tax asset, net195,402 194,223 
Total Assets$806,219 $768,570 
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable$8,917 $12,848 
Accrued liabilities14,733 14,061 
Accrued employee compensation and benefits11,810 7,254 
Other current liabilities7,730 12,401 
Total current liabilities43,190 46,564 
Advances on credit facility— 4,000 
Asset retirement obligation, net of current portion31,944 30,077 
Operating lease liabilities855 741 
Finance lease liabilities2,082 1,451 
Deferred other income, long-term46,053 — 
Other non-current liabilities1,502 1,309 
Total Liabilities125,626 84,142 
Commitments and Contingencies
Common stock, 0.001 par value; 40,000,000 shares authorized;
12,908,078 and 12,807,316 shares outstanding
at September 30, 2024, and December 31, 2023, respectively14 13 
Additional paid-in capital667,597 665,637 
Retained earnings 34,994 40,790 
Less treasury stock, at cost(22,012)(22,012)
Total Stockholders' Equity680,593 684,428 
Total Liabilities and Stockholders' Equity$806,219 $768,570 
See accompanying notes to these Condensed Consolidated Financial Statements.
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INTREPID POTASH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except per share amounts)
Three Months Ended
September 30,		Nine Months Ended
September 30,
2024202320242023
Sales$57,549 $54,465 $198,891 $222,420 
Less:
Freight costs8,022 7,909 30,275 30,015 
Warehousing and handling costs3,058 2,731 8,733 8,265 
Cost of goods sold38,266 39,921 135,767 148,502 
Lower of cost or net realizable value inventory adjustments471 3,413 2,326 3,413 
Gross Margin 7,732 491 21,790 32,225 
Selling and administrative9,154 7,685 25,448 24,491 
Accretion of asset retirement obligation623 535 1,867 1,605 
Impairment of long-lived assets874 521 3,082 521 
Loss on sale of assets134 59 626 252 
Other operating income (1,370)(522)(4,029)(1,252)
Other operating expense540 1,379 2,953 3,132 
Operating (Loss) Income(2,223)(9,166)(8,157)3,476 
Other Income
Equity in loss of unconsolidated entities(289)(54)(256)(292)
Interest income536 88 1,327 249 
Other income136 19 204 75 
(Loss) Income Before Income Taxes(1,840)(9,113)(6,882)3,508 
Income Tax Benefit (Expense)7 1,917 1,086 (1,893)
Net (Loss) Income$(1,833)$(7,196)$(5,796)$1,615 
Weighted Average Shares Outstanding:
Basic12,908 12,789 12,871 12,750 
Diluted12,908 12,789 12,871 12,876 
(Loss) Earnings Per Share:
Basic$(0.14)$(0.56)$(0.45)$0.13 
Diluted$(0.14)$(0.56)$(0.45)$0.13 
See accompanying notes to these Condensed Consolidated Financial Statements.
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INTREPID POTASH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)
(In thousands, except share amounts)
Nine-Month Period Ended September 30, 2024
Common StockTreasury StockAdditional Paid-in CapitalRetained EarningsTotal Stockholders' Equity
SharesAmount
Balance, December 31, 202312,807,316 $13 $(22,012)$665,637 $40,790 $684,428 
Net loss— — — — (5,796)(5,796)
Stock-based compensation— — — 2,735 — 2,735 
Vesting of restricted common stock, net of common stock used to fund employee income tax withholding due upon vesting100,762 1 — (775)— (774)
Balance, September 30, 202412,908,078 $14 $(22,012)$667,597 $34,994 $680,593 
Three-Month Period Ended September 30, 2024
Common StockTreasury StockAdditional Paid-in CapitalRetained EarningsTotal Stockholders' Equity
SharesAmount
Balance, June 30, 202412,908,078 $14 $(22,012)$667,419 $36,827 $682,248 
Net loss— — — — (1,833)(1,833)
Stock-based compensation— — — 178 — 178 
Balance, September 30, 202412,908,078 $14 $(22,012)$667,597 $34,994 $680,593 
Nine-Month Period Ended September 30, 2023
Common StockTreasury StockAdditional Paid-in CapitalRetained EarningsTotal Stockholders' Equity
SharesAmount
Balance, December 31, 202212,687,822 $13 $(22,012)$660,614 $76,463 $715,078 
Net income— — — — 1,615 1,615 
Stock-based compensation— — — 5,071 — 5,071 
Vesting of restricted common stock, net of common stock used to fund employee income tax withholding due upon vesting101,504 — — (1,337)— (1,337)
Balance, September 30, 202312,789,326 $13 $(22,012)$664,348 $78,078 $720,427 
Three-Month Period Ended September 30, 2023
Common StockTreasury StockAdditional Paid-in CapitalRetained EarningsTotal Stockholders' Equity
SharesAmount
Balance, June 30, 202312,789,326 $13 $(22,012)$662,826 $85,274 $726,101 
Net loss— — — — (7,196)(7,196)
Stock-based compensation— — — 1,522 — 1,522 
Balance, September 30, 202312,789,326 $13 $(22,012)$664,348 $78,078 $720,427 

See accompanying notes to these Condensed Consolidated Financial Statements.
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INTREPID POTASH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)
Nine Months Ended September 30,
20242023
Cash Flows from Operating Activities:
Net (loss) income $(5,796)$1,615 
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation, depletion and amortization26,931 28,305 
Accretion of asset retirement obligation1,867 1,605 
Amortization of deferred financing costs226 226 
Amortization of intangible assets246 241 
Stock-based compensation2,735 5,071 
Lower of cost or net realizable value inventory adjustments2,326 3,413 
Impairment of long-lived assets3,082 521 
Loss on disposal of assets626 252 
Allowance for doubtful accounts— 110 
Allowance for parts inventory obsolescence643 140 
Unrealized loss on equity investment101 — 
Equity in (earnings) loss of unconsolidated entities256 292 
Distribution of earnings from unconsolidated entities— 452 
Changes in operating assets and liabilities:
Trade accounts receivable, net(10,146)2,536 
Other receivables, net(1,245)(1,659)
Inventory, net(448)2,379 
Prepaid expenses and other current assets(226)(898)
Deferred tax assets, net(1,179)1,756 
Accounts payable, accrued liabilities, and accrued employee
     compensation and benefits		4,009 (5,216)
Operating lease liabilities(1,074)(1,218)
Deferred other income43,308 — 
Other liabilities(1,306)(1,298)
Net cash provided by operating activities64,936 38,625 
Cash Flows from Investing Activities:
Additions to property, plant, equipment, mineral properties and other assets(32,583)(58,484)
Purchase of investments— (1,415)
Proceeds from sale of assets4,656 125 
Proceeds from redemptions/maturities of investments2,000 4,500 
Other investing, net416 668 
Net cash used in investing activities(25,511)(54,606)
Cash Flows from Financing Activities:
Proceeds from short-term borrowings on credit facility— 7,000 
Repayments of short-term borrowings on credit facility(4,000)(5,000)
Payments of financing lease(680)(399)
Employee tax withholding paid for restricted stock upon vesting(775)(1,337)
Net cash (used in) provided by financing activities(5,455)264 
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INTREPID POTASH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)
Nine Months Ended September 30,
20242023
Net Change in Cash, Cash Equivalents and Restricted Cash33,970 (15,717)
Cash, Cash Equivalents and Restricted Cash, beginning of period4,651 19,084 
Cash, Cash Equivalents and Restricted Cash, end of period$38,621 $3,367 
Supplemental disclosure of cash flow information
Net cash paid during the period for:
Interest$382 $287 
Income taxes$9 $295 
Amounts included in the measurement of operating lease liabilities$1,143 $1,357 
Accrued purchases for property, plant, equipment, and mineral properties$1,868 $3,241 
Right-of-use assets exchanged for operating lease liabilities$751 $48 
Right-of-use assets exchanged for financing lease liabilities$1,562 $3,009 

See accompanying notes to these Condensed Consolidated Financial Statements.
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INTREPID POTASH, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Note 1— COMPANY BACKGROUND
We are a diversified mineral company that delivers potassium, magnesium, sulfur, salt, and water products essential for customer success in agriculture, animal feed, and the oil and gas industry. We are the only U.S. producer of muriate of potash (sometimes referred to as potassium chloride or potash), which is applied as an essential nutrient for healthy crop development, utilized in several industrial applications, and used as an ingredient in animal feed. In addition, we produce a specialty fertilizer, Trio®, which delivers three key nutrients, potassium, magnesium, and sulfate, in a single particle. We also provide water, salt, magnesium chloride, brine, and various oilfield products and services.
Our extraction and production operations are conducted entirely in the continental U.S. We produce potash from three solution mining facilities: our HB solution mine in Carlsbad, New Mexico, our solution mine in Moab, Utah, and our brine recovery mine in Wendover, Utah. We also operate the North compaction facility in Carlsbad, New Mexico, which compacts and granulates product from the HB mine. We produce Trio® from our conventional underground East mine in Carlsbad, New Mexico.
    We have permitted, licensed, declared, and partially adjudicated water rights in New Mexico that support our mining and industrial operations. Water that is not used to support our mining and industrial operations is primarily sold to support oil and gas development in the Permian Basin in New Mexico near our Carlsbad facilities. We continue to work to expand our water business. See Note 15—Commitments and Contingencies below for further information regarding our water rights.
We also operate certain land, water rights, grazing leases, and other related assets in southeast New Mexico. We refer to these assets and operations as "Intrepid South." Due to the strategic location of Intrepid South, part of our long-term operating strategy is selling small parcels of land, including restricted use agreements of surface or subsurface rights, to customers where such sales provide a solution to such customer's operations in the oil and gas industry.
We have three segments: potash, Trio®, and oilfield solutions. We account for sales of byproducts as revenue in the potash or Trio® segment based on which segment generates the byproduct. Intersegment sales prices are market based and are eliminated.
"Intrepid," "our," "we," or "us" means Intrepid Potash, Inc. and its consolidated subsidiaries.

Note 2— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Financial Statement Presentation—Our unaudited Condensed Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP") have been condensed or omitted pursuant to those rules and regulations. In the opinion of management, all adjustments, consisting of normal recurring accruals considered necessary for a fair presentation of interim financial information, have been included. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2023.
Pronouncements Issued But Not Yet Adopted—In December 2023, the Financial Accounting Standards Board (the "FASB") issued ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" ("ASU 2023-09"). ASU 2023-09 requires that an entity disclose specific categories in the effective tax rate reconciliation as well as provide additional information for reconciling items that meet a quantitative threshold, certain disclosures of state versus federal income tax expenses and taxes paid. ASC 2023-09 is effective for fiscal years beginning after December 15, 2024. We are currently evaluating the guidance and expect it to only impact disclosures with no impact to results of operations, cash flows and financial condition.
In November 2023, the FASB issued ASU 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures" ("ASU 2023-07"). This new guidance: (i) introduces a requirement to disclose significant segment expenses regularly provided to the chief operating decision maker ("CODM"), (ii) extends certain annual disclosures to interim periods, (iii) clarifies disclosure requirements for single reportable segment entities, (iv) permits more than one measure of segment profit or loss to be reported under certain conditions, and (v) requires disclosure of the title and position of the CODM. The standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The guidance applies retrospectively to all periods presented in the financial statements. We are currently evaluating the guidance and expect it to only impact disclosures with
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no impact to results of operations, cash flows, and financial condition.
Reclassifications of Prior Period Presentation—Certain prior period amounts have been reclassified in order to conform to the current period presentation. These reclassifications had no effect on the reported results of operations.

Note 3— EARNINGS PER SHARE
Basic earnings per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding during the period. For purposes of determining diluted earnings per share, basic weighted-average common shares outstanding is adjusted to include potentially dilutive securities, including restricted stock, stock options, and performance units. The treasury-stock method is used to measure the dilutive impact of potentially dilutive shares. Potentially dilutive shares are excluded from the diluted weighted-average shares outstanding computation in periods in which they have an anti-dilutive effect. The following table shows the calculation of basic and diluted earnings per share (in thousands, except per share amounts):
Three Months Ended
September 30,		Nine Months Ended
September 30,
2024202320242023
Net (loss) income$(1,833)$(7,196)$(5,796)$1,615 
Basic weighted-average common shares outstanding12,908 12,789 12,871 12,750 
Add: Dilutive effect of restricted stock— — — 80 
Add: Dilutive effect of stock options— — — 46 
Diluted weighted-average common shares outstanding12,908 12,789 12,871 12,876 
Basic$(0.14)$(0.56)$(0.45)$0.13 
Diluted$(0.14)$(0.56)$(0.45)$0.13 

The following table shows the shares that have an anti-dilutive effect and are excluded from the diluted weighted-average shares outstanding computations (in thousands):
Three Months Ended
September 30,		Nine Months Ended
September 30,
2024202320242023
Anti-dilutive effect of restricted stock372 372 369 213 
Anti-dilutive effect of stock options outstanding273 273 273 173 
    
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Note 4— CASH, CASH EQUIVALENTS AND RESTRICTED CASH
    We consider financial instruments with original maturities of three months or less to be cash equivalents. Total cash, cash equivalents and restricted cash, as shown on the Condensed Consolidated Statements of Cash Flows are included in the following accounts at September 30, 2024, and 2023 (in thousands):
September 30, 2024September 30, 2023
Cash and cash equivalents$38,034 $2,791 
Restricted cash included in other current assets25 25 
Restricted cash included in other long-term assets562 551 
Total cash, cash equivalents, and restricted cash as shown in the statement of cash flows$38,621 $3,367 
    
Restricted cash included in other current and long-term assets on the Condensed Consolidated Balance Sheets represents amounts for which use is restricted by contractual agreements with various entities, principally the Bureau of Land Management or the states of Utah and New Mexico, as security to fund future reclamation obligations at our sites.

Note 5— INVENTORY AND LONG-TERM PARTS INVENTORY
    The following summarizes our inventory, recorded at the lower of weighted-average cost or estimated net realizable value, as of September 30, 2024, and December 31, 2023 (in thousands):
September 30, 2024December 31, 2023
Finished goods product inventory$53,734 $66,033 
In-process inventory35,135 28,044 
Total product inventory88,869 94,077 
Current parts inventory, net20,709 20,175 
Total current inventory, net109,578 114,252 
Long-term parts inventory, net32,385 30,231 
Total inventory, net$141,963 $144,483 

Parts inventory is shown net of estimated allowances for obsolescence of $0.2 million and $0.9 million as of September 30, 2024, and December 31, 2023, respectively.

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Note 6 — PROPERTY, PLANT, EQUIPMENT, AND MINERAL PROPERTIES
    Property, plant, equipment, and mineral properties were comprised of the following (in thousands):
September 30, 2024December 31, 2023
Land$24,136 $24,136 
Ponds and land improvements96,307 91,333 
Mineral properties and development costs161,757 159,775 
Buildings and plant93,477 90,150 
Machinery and equipment318,680 297,494 
Vehicles7,888 7,332 
Office equipment and improvements10,627 10,150 
Operating lease ROU assets4,829 5,274 
Breeding stock264 315 
Construction in progress11,400 23,942 
Total property, plant, equipment, and mineral properties, gross$729,365 $709,901 
Less: accumulated depreciation, depletion, and amortization(374,467)(351,652)
Total property, plant, equipment, and mineral properties, net$354,898 $358,249 

During the year ended December 31, 2023, we recorded an impairment related to our Trio® segment assets because the net book value of the assets exceeded the estimated fair value of the assets. The fair value of the Trio® segment assets was primarily determined using the expected proceeds received in an orderly sale of the individual assets. For any Trio® segment capital spending during the nine months ended September 30, 2024, we also estimated the fair value of those assets using the expected proceeds received in an orderly sale of those new assets. As a result, we recorded an additional impairment of $3.1 million in the nine months ended September 30, 2024.
We incurred the following expenses for depreciation, depletion, and amortization, including expenses capitalized into inventory, for the following periods (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Depreciation$8,013 $9,102 $23,072 $25,156 
Depletion704 621 2,837 1,968 
Amortization of right of use assets316 399 1,022 1,181 
Total incurred$9,033 $10,122 $26,931 $28,305 

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Note 7 — OTHER LONG-TERM DEFERRED INCOME
Cooperative Development Agreement—In December 2023, we entered into the Third Amendment of Cooperative Development Agreement (the "Amendment") with XTO Holdings, LLC ("XTO Holdings") and XTO Delaware Basin LLC, as successors in interest to BOPCO, L.P. ("XTO Delaware Basin," and together with XTO Holdings, "XTO"), with an effective date of January 1, 2024 ("Amendment Date"). The Amendment further amends that certain Cooperative Development Agreement, by and between us, BOPCO, L.P. and the other parties thereto, effective as of February 28, 2011 (as amended, including by the Amendment, the "CDA"), which was executed for the purpose of pursuing the cooperative development of potassium and oil and gas on certain lands. The CDA restricts and limits the rights of Intrepid and XTO, as successors in interest to BOPCO, L.P., to explore and develop their respective interests, including limitations on the locations of wells. Intrepid and XTO entered into the Amendment in an effort to further the cooperation, remove the restrictions and limitations, and allow for the efficient co-development of resources within the Designated Potash Area ("DPA") consistent with the United States Secretary of the Interior Order 3324.
Pursuant to the Amendment, among other things, we agreed to provide support to XTO for development and operation of XTO's oil and gas interests within the DPA. As consideration under the Amendment, XTO agreed to pay us an initial fee of $50.0 million (the "Initial Fee"). We received a partial payment of $5.0 million of the Initial Fee in December 2023, and we received payment of the remaining $45.0 million from XTO in January 2024.
The Amendment further provides that we shall receive an additional one-time payment equal to $50.0 million (the "Access Fee"), which XTO will pay within 90 days upon the earlier occurrence of (i) the approval of the first new or expanded drilling island within a specific area to be used by XTO or (ii) within seven years of the anniversary of the Amendment Date. XTO is also required to pay additional amounts to Intrepid as an "Access Realization Fee," up to a maximum of $100.0 million, (the "Access Realization Fee") in the event of certain additional drilling activities by XTO.
Because the cooperative development support we are providing under the CDA is not an output of our ordinary business activities, ASC Topic 606, Revenue from Contracts with Customers ("ASC 606") does not apply to the CDA. However, we apply the principles in ASC 606 by analogy to determine amounts of other income to recognize.
Under ASC 606, we are required to identify the performance obligations in the CDA and to determine the transaction price. The transaction price may include fixed consideration, variable consideration, or both. Variable consideration may only be included in the transaction price if it is probable that a significant reversal of amounts recognized will not occur (referred to as the variable consideration constraint). The Access Realization Fee is considered variable consideration.
Our performance obligation under the Amendment is to "stand-ready" to provide support to XTO, when and as needed, during the term of the Amendment. We estimate the transaction price to be $100.0 million, which is comprised of the $50.0 million Initial Fee and the $50.0 million Access Fee. We are not including any amounts of the Access Realization Fee in the transaction price because of the variable consideration constraint. Since our performance obligation is a "stand-ready" obligation, we are recognizing the transaction price on a straight-line basis over the term of the Amendment which ends on February 28, 2046.
For the three and nine months ended September 30, 2024, we recorded other operating income of $1.1 million and $3.4 million, respectively, from the Amendment. Because we have not yet been paid the Access Fee included in the transaction price, we recorded a long-term receivable for the amount of the Access Fee that we earned during the nine months ended September 30, 2024 of $1.7 million, which is included in "Other Assets" on the Condensed Consolidated Balance Sheets. For the amount of the Initial Fee we earned during the three and nine months ended September 30, 2024, we reduced the "Deferred other income, long-term" liability recorded on our Condensed Consolidated Balance Sheets.
As of September 30, 2024, we had $2.3 million recorded in "Other current liabilities," and $46.1 million recorded in "Deferred other income, long-term" on the Condensed Consolidated Balance Sheets for the unearned portion of the Initial Fee. As of December 31, 2023, we had $5.0 million recorded in "Other current liabilities," and zero recorded in "Deferred other income, long-term" on the Condensed Consolidated Balance Sheets.


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Note 8 — DEBT
    Revolving Credit Facility—We maintain a $150 million revolving credit facility with a syndicate of lenders with Bank of Montreal as administrative agent. The revolving credit facility has a maturity date to August 4, 2027. As of September 30, 2024, borrowings under the credit facility bear interest at the Secured Overnight Financing Rate ("SOFR") plus an applicable margin of 1.50% to 2.25% per annum, based on our leverage ratio as calculated in accordance with the amended agreement governing the revolving credit facility. Borrowings under the revolving credit facility are secured by substantially all of our current and non-current assets, and the obligations under the credit facility are unconditionally guaranteed by several of our subsidiaries.
    We occasionally borrow and repay amounts under the revolving credit facility for near-term working capital needs or other purposes and may do so in the future. During the three months ended September 30, 2024, we made no borrowings and made no repayments under the revolving credit facility. During the nine months ended September 30, 2024, we made no borrowings and made $4.0 million in repayments under the revolving credit facility. During the three months ended September 30, 2023, we made $2.0 million in borrowings and made no repayments under the revolving credit facility. During the nine months ended September 30, 2023, we made $7.0 million in borrowings and made $5.0 million in repayments under the revolving credit facility. As of September 30, 2024, we had no borrowings outstanding and no outstanding letters of credit under this facility. As of December 31, 2023, we had $4.0 million in borrowings outstanding and no outstanding letters of credit under this facility.
As of September 30, 2024, we were in compliance with all applicable covenants under the revolving credit facility.
Interest Expense—Interest expense is recorded net of any capitalized interest associated with investments in capital projects. We incurred gross interest expense of $0.2 million and $0.5 million for the three and nine months ended September 30, 2024, respectively, and $0.2 million and $0.5 million for the three and nine months ended September 30, 2023, respectively.
    Amounts included in interest expense, net for the three and nine months ended September 30, 2024, and 2023 were as follows (in thousands):
Three Months Ended
September 30,		Nine Months Ended
September 30,
2024202320242023
Interest expense on borrowings$53 $58 $134 $133 
Commitment fee on unused credit facility57 57 171 169 
Amortization of deferred financing costs75 75 226 226 
Gross interest expense185 190 531 528 
Less capitalized interest(185)(190)(531)(528)
Interest expense, net$— $— $— $— 
    
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Note 9 — INTANGIBLE ASSETS
    We have water rights, recorded at $19.2 million at September 30, 2024, and December 31, 2023. Our water rights have indefinite lives and are not amortized. We evaluate our water rights at least annually as of October 1 for impairment, or more frequently if circumstances require.
    We account for other intangible assets as finite-lived intangible assets and amortize those intangible assets over the period of estimated benefit, using the straight-line method. As of September 30, 2024, the weighted average amortization period for the other intangible assets was approximately 14.8 years. At September 30, 2024, and December 31, 2023, these intangible assets had a net book value of $4.9 million and $4.9 million, respectively, and are included in "Other assets, net" on the Condensed Consolidated Balance Sheets.
    
Note 10— FINANCIAL INFORMATION FOR SUBSIDIARY GUARANTORS OF POSSIBLE FUTURE
PUBLIC DEBT
Intrepid Potash, Inc., as the parent company, has no independent assets or operations, and operations are conducted solely through its subsidiaries. Cash generated from operations is held at the parent-company level as cash on hand and cash equivalents and totaled $38.0 million and $4.1 million at September 30, 2024, and December 31, 2023, respectively. If one or more of our wholly-owned operating subsidiaries guarantee public debt securities in the future, those guarantees will be full and unconditional and will constitute the joint and several obligations of the subsidiary guarantors. The assets and liabilities of our other subsidiaries are immaterial. There are no restrictions on our ability to obtain cash dividends or other distributions of funds from the subsidiary guarantors, except those imposed by applicable law.

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Note 11 — ASSET RETIREMENT OBLIGATION
We recognize an estimated liability for future costs associated with the abandonment and reclamation of our mining properties. A liability for the fair value of an asset retirement obligation and a corresponding increase to the carrying value of the related long-lived asset are recorded as the mining operations occur or the assets are acquired.
Our asset retirement obligation is based on the estimated cost to close and reclaim the mining operations, the economic life of the properties, and federal and state regulatory requirements. The liability is discounted using credit adjusted risk-free rate estimates at the time the liability is incurred or when there are upward revisions to estimated costs. The credit adjusted risk-free rates used to discount our reclamation liabilities range from 6.9% to 12.0%. Revisions to the liability occur due to construction of new or expanded facilities, changes in estimated closure costs or economic lives, or to reflect new federal or state rules, regulations, or requirements regarding the closure or reclamation of mines.
Following is a table of the changes to our asset retirement obligation for the following periods (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Asset retirement obligation, at beginning of period$31,603 $27,934 $30,359 $26,864 
Accretion of discount623 535 1,867 1,605 
Total asset retirement obligation, at end of period$32,226 $28,469 $32,226 $28,469 
Less current portion of asset retirement obligation$(282)$(300)$(282)$(300)
Long-term portion of asset retirement obligation$31,944 $28,169 $31,944 $28,169 
    
The current portion of the asset retirement obligation is included in "Other current liabilities" on the Condensed Consolidated Balance Sheet as of September 30, 2024.
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Note 12 — REVENUE
    Revenue Recognition—We account for revenue in accordance with ASC 606. Under ASC 606, we recognize revenue when control of the promised goods or services is transferred to customers in an amount that reflects the consideration we expect in exchange for those goods or services. The timing of revenue recognition, billings, and cash collection may result in contract assets or contract liabilities.

Contract Balances: As of September 30, 2024, and December 31, 2023, we had a total of $2.5 million and $2.3 million of contract liabilities, respectively, of which $1.0 million and $1.0 million were current as of September 30, 2024, and December 31, 2023, respectively, and included in "Other current liabilities" on the Condensed Consolidated Balance Sheets. Customer advances received before we have satisfied our performance obligations are accounted for as a contract liability (sometimes referred to in practice as deferred revenue).
Our deferred revenue activity for the three and nine months ended September 30, 2024, and 2023 is shown below (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Beginning balance$2,857 $2,168 $2,303 $2,374 
Additions27 313 1,324 627 
Recognized as revenue during period(419)(291)(1,162)(811)
Ending Balance$2,465 $2,190 $2,465 $2,190 

Disaggregation of Revenue: The tables below show the disaggregation of revenue by product and reconciles disaggregated revenue to segment revenue for the three and nine months ended September 30, 2024, and 2023. We believe the disaggregation of revenue by products best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic conditions (in thousands):
Three Months Ended September 30, 2024
ProductPotash Segment
Trio® Segment
Oilfield Solutions SegmentIntersegment EliminationsTotal
Potash$21,692 $— $— $(59)$21,633 
Trio®
— 18,887 — — 18,887 
Water— — 7,918 — 7,918 
Salt2,720 41 — — 2,761 
Magnesium Chloride2,116 — — — 2,116 
Brine Water1,808 — 943 — 2,751 
Other20 — 1,463 — 1,483 
Total Revenue$28,356 $18,928 $10,324 $(59)$57,549 
Nine Months Ended September 30, 2024
ProductPotash SegmentTrio® SegmentOilfield Solutions SegmentIntersegment EliminationsTotal
Potash$78,242 $— $— $(199)$78,043 
Trio®
— 81,584 — — 81,584 
Water— — 12,659 — 12,659 
Salt9,199 354 — — 9,553 
Magnesium Chloride3,467 — — — 3,467 
Brine Water4,975 — 3,236 — 8,211 
Other83 — 5,291 — 5,374 
Total Revenue$95,966 $81,938 $21,186 $(199)$198,891 
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Three Months Ended September 30, 2023
ProductPotash Segment
Trio® Segment
Oilfield Solutions SegmentIntersegment EliminationsTotal
Potash$21,980 $— $— $(71)$21,909 
Trio®
— 20,605 — — 20,605 
Water48 1,368 1,133 — 2,549 
Salt2,676 57 — — 2,733 
Magnesium Chloride2,035 — — — 2,035 
Brine Water863 — 1,030 — 1,893 
Other— — 2,741 — 2,741 
Total Revenue$27,602 $22,030 $4,904 $(71)$54,465 
Nine Months Ended September 30, 2023
ProductPotash Segment
Trio® Segment
Oilfield Solutions SegmentIntersegment EliminationsTotal
Potash$110,241 $— $— $(260)$109,981 
Trio®
— 76,887 — — 76,887 
Water228 3,890 5,320 — 9,438 
Salt8,997 275 — — 9,272 
Magnesium Chloride4,839 — — — 4,839 
Brine Water3,058 — 2,853 — 5,911 
Other— — 6,092 — 6,092 
Total Revenue$127,363 $81,052 $14,265 $(260)$222,420 

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Note 13 — COMPENSATION PLANS
Equity Incentive Compensation Plan—Our Board of Directors and stockholders adopted a long-term incentive compensation plan called the Intrepid Potash, Inc. Amended and Restated Equity Incentive Plan (the "Plan"). The Plan was most recently amended and restated in May 2022. We have issued common stock, restricted stock, performance units, and non-qualified stock option awards under the Plan. As of September 30, 2024, approximately 1.0 million shares remained available for issuance under the Plan.
    During the nine months ended September 30, 2024, the Compensation Committee granted an aggregate of 165,216 shares of restricted stock to executive officers and other key employees. These awards vest over three years, and in some cases, contain a market condition. In May 2024, the Compensation Committee granted an aggregate of 20,739 shares of restricted stock to members of our Board of Directors, which vest over one year. In September 2024, the Compensation Committee granted an aggregate of 6,282 shares of restricted stock to members of our Board of Directors, which will vest on the earlier of the date a member of the Board of Directors resigns, May 25, 2025, or the day before the 2025 Annual Meeting of Stockholders.
During the nine months ended September 30, 2023, the Compensation Committee granted an aggregate of 225,117 restricted shares to executive officers and other key employees. These awards vest over three years, and in some cases, contain a market condition. In May 2023, the Compensation Committee granted an aggregate of 22,226 restricted shares to members of our Board of Directors, which vest over one year.
As of September 30, 2024, the following awards were outstanding under the Plan (in thousands):
Outstanding as of
September 30, 2024
Restricted Shares258 
Non-qualified Stock Options273 

    Total share-based compensation expenses were $0.2 million and $1.5 million for the three months ended September 30, 2024, and 2023, respectively, and $2.7 million and $5.1 million for the nine months ended September 30, 2024, and 2023, respectively. As of September 30, 2024, we had $4.0 million of total remaining unrecognized compensation expense related to awards that is expected to be recognized over a weighted-average period of 1.4 years.
On September 30, 2024, we entered in a Separation Agreement and General Release (the "Agreement") with the court-appointed guardian of our former principal executive officer, Robert P. Jornayvaz III. Pursuant to the Agreement, we agreed to pay $2.0 million to Mr. Jornayvaz for compensation owed to him, certain benefits, and Mr. Jornayvaz forfeited 118,975 shares of unvested restricted stock. The liability for the payment made to Mr. Jornayvaz in October 2024 is included in "Accrued employee compensation and benefits" on the Condensed Consolidated Balance Sheet at September 30, 2024, and the associated expense is included in "Selling and administrative" expenses on the Condensed Consolidated Statement of Operations for the three and nine months ended September 30, 2024.


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Note 14 — INCOME TAXES
Our anticipated annual tax rate is impacted primarily by the amount of taxable income associated with each jurisdiction in which our income is subject to income tax, permanent differences between the financial statement carrying amounts and tax bases of assets and liabilities, and the benefit associated with the estimated effect of the percentage depletion deduction.
A summary of our provision for income taxes is as follows (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Current portion of income tax expense$58 $3 $93 $137 
Deferred portion of income tax (benefit) expense(65)(1,920)(1,179)1,756 
Total income tax (benefit) expense$(7)$(1,917)$(1,086)$1,893 

    Our effective tax rate for the three months ended September 30, 2024 was 0.4%, while our effective tax rate for the nine months ended September 30, 2024 was 15.8%. Our effective tax rate differed from the statutory rate during these periods primarily from the permanent difference between book and tax income due to the percentage depletion deduction and the officers' compensation deduction. Our effective tax rate for the three and nine months ended September 30, 2023 was 21.0% and 54.0%, respectively. Our effective tax rate differed from the statutory rate during these periods primarily from the estimated permanent difference between book and tax income for the first nine months of 2023 due to the percentage depletion deduction and the officers' compensation deduction.
As of September 30, 2024, we continue to be in a three-year cumulative income position. However, losses incurred in 2023 and through the first nine-months of 2024 have reduced the amount of three-year cumulative income. If weakness in fertilizer pricing, lower production, additional impairments, or additional losses were to continue, it is possible that there may be significant negative evidence to cause us to record a valuation allowance within the next 12 months. The timing and amount of any valuation allowance is subject to significant judgement that is considered with the timing and amounts of actual and future earnings. Recording any valuation allowance would result in increased income tax expense in the period the valuation allowance is recorded which could have a material effect on net income.

Note 15 — COMMITMENTS AND CONTINGENCIES
Reclamation Deposits and Surety Bonds—As of September 30, 2024, and December 31, 2023, we had $27.1 million and $26.8 million, respectively, of security placed principally with the Bureau of Land Management ("BLM") and the states of Utah and New Mexico for eventual reclamation of our various facilities. As of September 30, 2024, $0.5 million consisted of long-term restricted cash deposits and $26.6 million was secured by surety bonds issued by an insurer. As of December 31, 2023, $0.5 million consisted of long-term restricted cash deposits and $26.3 million was secured by surety bonds issued by an insurer. The restricted cash deposits are included in "Other assets, net" on the Condensed Consolidated Balance Sheets and the surety bonds are held in place by an annual fee paid to the issuer.
We may be required to post additional security to fund future reclamation obligations as reclamation plans are updated or as statutory, regulatory, or other agency requirements change.
    Legal—We are subject to claims and legal actions in the ordinary course of business. We expense legal costs as they are incurred. While there are uncertainties in predicting the outcome of any claim or legal action, except as noted below, we believe the ultimate resolution of these claims or actions is not reasonably likely to have a material adverse effect on our financial condition, results of operations, or cash flows.
Water Rights and Other Legal Contingencies
On March 17, 2022, following an expedited inter se proceeding, a court entered a subfile order and partial final judgment and decree ("Order") determining the validity of our claim to 20,000 acre feet of Pecos River surface water rights. The Order found that our predecessors in interest had forfeited all but approximately 5,800 acre feet of water per year, and that of the remaining 5,800 acre feet of water that had not been forfeited, all but 150 acre feet of water had been abandoned prior to 2017. The Order limited our right to 150 acre fee per annum of water for industrial-salt processing use. We appealed
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the Order to the New Mexico Court of Appeals ("NMCA"), which, on July 7, 2023, affirmed the Order. On November 17, 2023, we filed a request for the New Mexico Supreme Court ("NMSC") to reconsider and review the NMCA's decision to affirm the Order's abandonment determination. The NMSC agreed to review the NMCA's abandonment determination on February 7, 2024, where it is still before the court.
    In 2017 and 2018 the New Mexico Office of the State Engineer ("OSE") granted us preliminary and emergency authorizations to sell approximately 5,700 acre-feet of water per year from our Pecos River Water rights. The preliminary and emergency authorizations allowed for water sales to begin immediately, subject to repayment if the underlying water rights were ultimately found to be invalid. If the NMCA's decision is ultimately affirmed, we may have to repay for the water we sold under the preliminary and emergency authorizations. Repayment of this water can be up to two times the amount of water removed from the river. Repayment is customarily made in-kind over a period of time but can take other forms including cash repayment. If we are not able to repay in-kind due to the lack of remaining water rights or logistical constraints, we may need to purchase water to meet this repayment or be subject to a cash repayment. We cannot reasonably estimate the potential volume, timing, or form of repayment, if any, and have not recorded a loss contingency in our Condensed Consolidated Statement of Operations related to this legal matter.
    We have estimated contingent liabilities recorded in "Other current liabilities" on the Condensed Consolidated Balance Sheets of $2.3 million as of September 30, 2024, mainly related to the potential underpayment of royalties from 2012 to 2016, and a potential fine related to a violation of one of our air quality permits at our New Mexico facility. As of December 31, 2023, we had $3.4 million in contingent liabilities mainly related to the potential underpayment of royalties from 2012 to 2016 and potential royalties on water revenues in 2019 to 2022. In March 2024 we paid $1.9 million to the New Mexico State Land Office to resolve the matter related to potential royalties on water revenues from 2019 to 2022.

Note 16 — FAIR VALUE
    We measure our financial assets and liabilities in accordance with ASC Topic 820, Fair Value Measurements and Disclosures. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities measured at fair value are classified using the following hierarchy, which is based upon the transparency of inputs to the valuation at the measurement date:
Level 1 - Quoted market prices in active markets for identical assets or liabilities.
Level 2 - Inputs, other than Level 1, that are either directly or indirectly observable.
Level 3 - Unobservable inputs developed using estimates and assumptions which reflect those that market participants would use.
The classification of fair value measurement within the hierarchy is based upon the lowest level of input that is significant to the measurement.
     Other financial instruments consist primarily of cash equivalents, accounts receivable, refundable income taxes, investment securities, accounts payable, accrued liabilities, and, if any, advances under our credit facility. With the exception of investment securities, we believe cost approximates fair value for our financial instruments because of the short-term nature of these instruments.
Cash Equivalents—As of September 30, 2024, we had cash equivalents of $1.5 million. As of December 31, 2023, we had cash equivalents of $0.5 million.
Held-to-Maturity Debt Investments—As of September 30, 2024, and December 31, 2023, we owned debt investment securities classified as held-to-maturity because we have the intent and ability to hold these investments to maturity. Our held-to-maturity debt investment securities consist of investment grade corporate bonds and U.S. government issued bonds. These debt securities are carried at amortized cost and consist of the following (amounts in thousands):
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As of September 30, 2024
Amortized CostGross Unrealized GainsGross Unrealized LossesFair Value
Short-term
Corporate bonds$499 $— $— $499 
Government bonds1,480 — (1)1,479 
Total$1,979 $— $(1)$1,978 
As of December 31, 2023
Amortized CostGross Unrealized GainsGross Unrealized LossesFair Value
Short-term
Corporate bonds$991 $— $(9)$982 
Government bonds1,979 — (13)1,966 
Total$2,970 $— $(22)$2,948 
Long-term
Corporate bonds$— $— $— $— 
Government bonds954 1 (4)951 
Total$954 $1 $(4)$951 
Our long-term held to maturity investments are recorded in "Long-term investments" on the Condensed Consolidated Balance Sheets. As of September 30, 2024 and December 31, 2023, we had $2.0 million and $3.9 million in held-to-maturity debt investment securities, respectively. As of September 30, 2024, our held-to-maturity investments mature in less than one year.
Investments in Equity Securities—In May 2020, we acquired a non-controlling equity investment in W.D. Von Gonten Laboratories ("WDVGL") for $3.5 million. We initially accounted for this investment as an equity investment without a readily determinable fair value and elected to measure our investment, as permitted by GAAP, at cost plus or minus any adjustments for observable changes in prices resulting from orderly transactions for the identical or a similar investment of the same issuer or impairment.
In July 2022, WDVGL entered into an agreement (the “Purchase Agreement”) with National Energy Services Reunited Corporation (“NESR”), a British Virgin Islands corporation headquartered in Houston, Texas. Under the terms of the Purchase Agreement, WDVGL was combined with the consulting business owned by W.D. Von Gonten (“Consulting”) to form a new entity, W.D. Von Gonten Engineering, LLC (“Engineering”), and NESR purchased Engineering in a majority stock transaction at an agreed upon selling price. NESR stock received from the sale of Engineering was distributed to investors in WDVGL and Consulting in August 2024.
In February 2023, we received $0.2 million in cash for our investment in WDVGL. Initially, we recorded that cash received as a liability because we were required to return the cash to WDVGL if the sale of Engineering to NESR was not finalized. The sale of Engineering to NESR has since been finalized and the recorded value of our investment in WDVG was reduced to $3.3 million, which is the aggregate cost basis of the 336,773 shares of NESR stock we received in August 2024 related to the sale of WDVGL.
NESR trades on the over-the-counter “Pink Market.” As required by Accounting Standards Codification ("ASC") Topic 321 - Investments-Equity Securities ("ASC 321"), equity securities are valued at fair value in the Condensed Consolidated Balance Sheet at September 30, 2024, and unrealized gains and losses for investments in equity securities are included in the Condensed Consolidated Statement of Operations. At September 30, 2024, the fair value of our investment in NESR equity securities is $3.2 million, and is included in "Long-term investments" on the Condensed Consolidated Balance Sheet at September 30, 2024, and the unrealized loss of $0.1 million is included in "Other income" on the Condensed Consolidated Statement of Operations for the three and nine months ended September 30, 2024.
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As of December 31, 2023, our investment in WDVGL was accounted for as an equity investment without a readily determinable fair value and we elected to measure our investment, as permitted by GAAP, at cost plus or minus any adjustments for observable changes in prices resulting from orderly transactions for the identical or a similar investment of the same issuer or impairment. We had not recorded any adjustments to the carrying value of this investment since the purchase in May 2020. We included this investment in "Long-term investments" on the Condensed Consolidated Balance Sheet as of December 31, 2023.
Equity Method Investments—We are a limited partner with a 16% interest in PEP Ovation, LP ("Ovation") as of September 30, 2024, and December 31, 2023. This investment is accounted for under the equity method whereby we recognize our proportional share of the income or loss from our investment in Ovation on a one-quarter lag. This investment is included in "Long-term investments" on the Condensed Consolidated Balance Sheets. For the three and nine months ended September 30, 2024, our proportional share of Ovation's net loss was $0.3 million and $0.3 million, respectively. For the three and nine months ended September 30, 2023, our proportional share of Ovation's net loss was $0.1 million and $0.3 million, respectively.
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Note 17 — BUSINESS SEGMENTS
    Our operations are organized into three segments: potash, Trio®, and oilfield solutions. We determine reportable segments based on several factors including the types of products and services sold, production processes, markets served and the financial information available for our CODM. We evaluate performance based on the gross margins of the respective business segments and do not allocate corporate selling and administrative expenses, among others, to the respective segments.
Intersegment sales prices are market-based and are eliminated in the "Other" column. Information for each segment is provided in the tables that follow (in thousands).

Three Months Ended
September 30, 2024		Potash
Trio®
Oilfield SolutionsOtherConsolidated
Sales$28,356 $18,928 $10,324 $(59)$57,549 
Less: Freight costs3,217 4,864 — (59)8,022 
         Warehousing and handling
         costs		1,819 1,239 — — 3,058 
         Cost of goods sold18,783 12,221 7,262 — 38,266 
         Lower of cost or net
         realizable value inventory
         adjustments 		471 — —