What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2024-03-07 compared with 2023-03-07 · 224 added, 107 removed, 847 unchanged (28% of the section changed)

1 unchanged sentence

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

To the Stockholders and the Board of Directors

Intrepid Potash, Inc.:

22 unchanged sentences

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

1 unchanged sentence

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Realizability of de ferred tax assets

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Realizability of deferred tax assets

As discussed in Notes 2 and 13 to the consolidated financial statements, the Company records a valuation allowance if it is deemed more likely than not deferred tax assets will not be realized in full.

12 unchanged sentences

We compared the forecasted sales volumes to historical sales volumes, and we compared the Company’s historical forecasted sales volumes to actual sales volumes to assess the Company’s ability to accurately forecast.

Impairment of long-lived assets

As discussed in Note 2 to the consolidated financial statements, the Company evaluates its long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amount may not be recoverable.

As discussed in Note 6, during the fourth quarter of 2023, the gross margin of the Trio ® segment decreased and the Company determined that sufficient indicators of potential impairment of the Trio ® segment long-lived assets existed.

The Company engaged a third-party valuation firm to determine the fair value of the Trio ® segment assets.

The carrying value of the Trio ® segment asset group exceeded its fair value, and the Company recognized impairment charges of $31.9 million.

Additionally, given the length of time since the West facility had been placed in care and maintenance, the Company engaged a third-party valuation firm to determine the fair value of the West assets.

The carrying value of the West asset group exceeded its fair value, and the Company recognized impairment charges of $9.9 million.

The fair value of the Trio ® segment assets and the West assets were determined primarily using the expected proceeds received in an orderly sale of individual assets.

We identified the evaluation of the fair value of certain assets included in the impairment of the Trio ® segment and West assets as a critical audit matter.

Challenging and subjective auditor judgment was required in assessing the liquidation factors used to develop the orderly liquidation values as there is not a liquid secondary market for certain specialized assets.

The evaluation of the liquidation factors required specialized skills and knowledge.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s long-lived asset impairment process.

This included a control related to the Company’s determination of the liquidation factors used to develop the orderly

liquidation values for certain assets.

We involved valuation professionals with specialized skills and knowledge, who assisted in:

• evaluating whether the valuation techniques used by the Company to develop the fair value for certain assets were reasonable and consistent with common valuation practice given the nature of the assets

• assessing the Company’s orderly liquidation values by developing independent estimates of the orderly liquidation values using third-party data and independently developed liquidation factors and comparing the amounts to the Company’s estimates.

We have served as the Company's auditor since 2007.

26 unchanged sentences

Total current liabilities 46,468 48,876

Advances on credit facility 4,000 —

Asset retirement obligation 30,077 26,564

Operating lease liabilities 741 2,206

Finance lease liabilities 1,451 —

Other non-current liabilities 1,309 1,479

25 unchanged sentences

Accretion of asset retirement obligation 2,140 1,961 1,858

Litigation settlement — — 10,075

Impairment of long-lived assets 43,288 — —

Loss (gain) on sale or disposal of assets 807 7,470 ( 2,542 )

Other operating expense 2,157 4,738 178

Operating Income (Loss) 95,440 32,272 ( 23,244 )

Operating (Loss) Income ( 43,969 ) 95,440 32,272

Other Income (Expense)

4 unchanged sentences

Gain on extinguishment of debt

Income (Loss) Before Income Taxes 96,509 40,965 ( 27,149 )

Income Tax (Expense) Benefit ( 24,289 ) 208,869 ( 5 )

Net Income (Loss) $ 72,220 $ 249,834 $ ( 27,154 )

(Loss) Income Before Income Taxes ( 44,062 ) 96,509 40,965

Income Tax Benefit (Expense) 8,389 ( 24,289 ) 208,869

Net (Loss) Income $ ( 35,673 ) $ 72,220 $ 249,834

Weighted Average Shares Outstanding:

1 unchanged sentence

Diluted 12,760,937 13,452,233 13,391,362

Income (Loss) Per Share:

(Loss) Income Per Share:

Basic $ ( 2.80 ) $ 5.49 $ 19.07

4 unchanged sentences

(In thousands, except share amounts)

Common Stock Treasury Stock Additional Paid-in Capital (1)

Retained Earnings (Accumulated) Deficit Total Stockholders' Equity

Common Stock Treasury Stock Additional Paid-in Capital Retained Earnings (Accumulated) Deficit Total Stockholders' Equity

Shares Amount

Balance, December 31, 2020 13,049,820 $ 13 $ — $ 656,837 $ ( 245,591 ) $ 411,259

Net loss — — — — ( 27,154 ) ( 27,154 )

Net income — — — — 249,834 249,834

Stock-based compensation — — — 3,012 — 3,012

6 unchanged sentences

Stock-based compensation — — — 6,152 — 6,152

Purchase of treasury stock ( 608,657 ) — ( 22,012 ) — — ( 22,012 )

Vesting of restricted shares, net of common stock

3 unchanged sentences

Balance, December 31, 2022 12,687,822 13 ( 22,012 ) 660,614 76,463 715,078

Net income — — — — 72,220 72,220

Net loss — — — — ( 35,673 ) ( 35,673 )

Stock-based compensation — — — 6,534 — 6,534

Purchase of treasury stock ( 608,657 ) — ( 22,012 ) — — ( 22,012 )

Vesting of restricted shares, net of common stock

1 unchanged sentence

due upon vesting 119,494 — — ( 1,511 ) — ( 1,511 )

Exercise of stock options 10,718 — — 110 — 110

Balance, December 31, 2023 12,807,316 $ 13 $ ( 22,012 ) $ 665,637 $ 40,790 $ 684,428

(1) - Amounts have been retroactively restated for all prior periods to reflect the one-for-ten reverse split of our common stock effected on August 14, 2020 .

See accompanying notes to these consolidated financial statements.

5 unchanged sentences

Cash Flows from Operating Activities:

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Net income (loss) $ 72,220 $ 249,834 $ ( 27,154 )

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Net (loss) income $ ( 35,673 ) $ 72,220 $ 249,834

Depreciation, depletion, and amortization 39,078 34,711 35,635

5 unchanged sentences

Allowance for doubtful accounts 110 — —

Impairment of long-lived assets 43,288 — —

Loss (gain) on disposal of assets 807 7,470 ( 2,542 )

Equity in earnings of unconsolidated entities 486 ( 689 ) —

Distribution of earnings from unconsolidated entities 452 — —

Gain on extinguishment of debt — — ( 10,113 )

Lower of cost or net realizable value inventory adjustments 6,492 — —

Other — — ( 116 )

Changes in operating assets and liabilities:

15 unchanged sentences

Proceeds from redemptions/maturities of investments 6,000 2,506 —

Other investing, net 796 — —

Net cash used in investing activities ( 59,554 ) ( 79,179 ) ( 14,823 )

2 unchanged sentences

Debt prepayment costs — — ( 505 )

Proceeds from loan under CARES Act — — 10,000

Proceeds from borrowings on credit facility 9,000 — —

5 unchanged sentences

Proceeds from exercise of stock options — 110 89

Net cash used in financing activities ( 27,704 ) ( 47,282 ) ( 17,043 )

Net cash provided by (used in) financing activities 1,892 ( 27,704 ) ( 47,282 )

Net Change in Cash, Cash Equivalents, and Restricted Cash ( 14,433 ) ( 18,062 ) 16,962

3 unchanged sentences

Net cash paid during the period for:

Interest, net of $ 0.3 million of capitalized interest in 2022, $ 0.1 million in 2021, and $ 0.1 million in 2020

$ 113 $ 875 $ 2,467

Interest $ 411 $ 113 $ 875

Income taxes $ 179 $ 1,015 $ 193

16 unchanged sentences

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 under which we sell water primarily to support oil and gas development in the Permian Basin near our Carlsbad facilities.

We continue to work to expand our sales of water.

In May 2019, we acquired certain land, water rights, state grazing leases for cattle, and other related assets from Dinwiddie Cattle Company.

We have permitted, licensed, declared and partially adjudicated water rights in New Mexico.

We sell a portion of water from these water rights to support oil and gas development in the Permian Basin.

We continually work to expand water sales.

In May 2019, we acquired certain land, water rights, federal and state grazing leases for cattle, and other related assets from Dinwiddie Cattle Company.

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 a customer's operations in the oil and gas industry.

15 unchanged sentences

There are numerous uncertainties inherent in estimating quantities of proven and probable reserves, projecting future rates of production, and the timing of development expenditures.

Future mineral prices may vary significantly from the prices in effect at the time the estimates are made, as may estimates of future operating costs.

The estimate of proven and probable mineral reserves, the related present value of estimated future

cash flows, and useful lives of plant assets can affect various other items including depletion, the net carrying value of our mineral properties, the useful lives of related property, plant, and equipment, depreciation expense, and estimates associated with recoverability of long-lived assets and asset retirement obligations.

Future mineral prices may vary significantly from the prices in effect at the time the estimates are made, as may estimates of

future operating costs.

The estimate of proven and probable mineral reserves, the related present value of estimated future cash flows, and useful lives of plant assets can affect various other items including depletion, the net carrying value of our mineral properties, the useful lives of related property, plant, and equipment, depreciation expense, and estimates associated with recoverability of long-lived assets and asset retirement obligations.

Specific to income tax items, we experience fluctuations in the valuation of the deferred tax assets and liabilities due to changing income tax rates and the blend of state tax rates.

4 unchanged sentences

The contract's transaction price is allocated to the performance obligations and recognized as revenue when the performance obligations are satisfied.

Substantially all of our contracts are of a short-term nature and contain a single performance obligation because the sale is for one type of product and shipping and handling charges are accounted for as a fulfillment cost and are not considered to be a separate performance obligation.

Substantially all our contracts are of a short-term nature and contain a single performance obligation because the sale is for one type of product and shipping and handling charges are accounted for as a fulfillment cost and are not considered to be a separate performance obligation.

The performance obligation is satisfied when control of the product is transferred to the customer, which typically occurs when we ship mineral products or deliver water from our facility to the customer.

1 unchanged sentence

Contract Estimates:

In certain circumstances, we may sell product to customers where the sales price is variable.

In certain circumstances, we may sell products to customers where the sales price is variable.

For variable consideration sales, we estimate the sales price we expect to realize at contract inception based on the facts and circumstances for each sale, including historical experience, and recognize revenue to the extent it is probable that a subsequent change in estimate will not result in a significant revenue reversal compared to the cumulative revenue recognized once the uncertainty is resolved.

16 unchanged sentences

The costs of maintenance turnarounds at our facilities are considered part of production costs and are absorbed into inventory in the period incurred.

Parts inventory, including critical spares, that is not expected to be used within a period of one year is classified as non-current.

Parts inventory, including critical spares not expected to be used within a period of one year is classified as non-current.

Parts and supply inventory cost is determined using the lower of average acquisition cost or estimated replacement cost.

5 unchanged sentences

The estimated useful lives of property, plant, and equipment are evaluated periodically as changes in estimates occur.

No depreciation is taken on assets classified as construction in progress until the asset is placed into service.

Gains and losses are recorded upon retirement, sale,

or disposal of assets.

No depreciation is taken on assets

classified as construction in progress until the asset is placed into service.

Gains and losses are recorded upon retirement, sale, or disposal of assets.

Maintenance and repair costs are recognized as period costs when incurred.

26 unchanged sentences

We test indefinite-lived intangible assets for impairment at least annually on October 1, and more frequently if circumstances require.

We use a qualitative assessment to determine whether it is more likely than not that the fair value of the unamortized intangible is less than its carrying value.

We use a qualitative assessment to determine whether it is more likely than not that the fair value of the unamortized intangible asset is less than its carrying value.

If our qualitative assessment indicates it is more likely than not that the fair value of the unamortized assets is less than its carrying value, we estimate the fair value of the unamortized asset and record an impairment loss based on the excess of the carrying amount of the unamortized intangible asset over its estimated fair value.

9 unchanged sentences

We evaluate our finite-lived intangible assets for impairment when events or changes in circumstances indicate that the related carrying amount may not be recoverable.

Such circumstances may include but are not limited to (1) significant

adverse changes in the manner the asset is used, or (2) significant adverse changes in legal factors or economic conditions, including adverse actions by regulatory authorities.

We did no t record any impairments to our intangible assets in 2022 and 2021.

Such circumstances may include but are not limited to (1) significant adverse changes in the manner the asset is used, or (2) significant adverse changes in legal factors or economic conditions, including adverse actions by regulatory authorities.

Asset Retirement Obligations — Reclamation costs are initially recorded as a liability associated with the asset to be reclaimed or abandoned, based on applicable inflation assumptions and discount rates.

19 unchanged sentences

We use the equity method of accounting for investments in limited partnerships where we own more than 3% of the limited partnership, as required by the Securities and Exchange Commission.

Under this method of accounting, we record our share of the net earnings or losses of the investee in the "Other Operating Income (Expense)" section of our Consolidated Statements of Operations.

Under this method of accounting, we record our share of the net earnings or losses of the investee in the "Other Income (Expense)" section of our Consolidated Statements of Operations.

We record equity investments without a readily determinable fair value using the measurement alternative of cost, with adjustments for observable changes in prices resulting from orderly transactions for the identical or similar investments of the same issuer, or impairment.

9 unchanged sentences

When we report a net loss, all potentially dilutive securities are considered anti-dilutive and are excluded from the dilutive loss per share calculation.

Reverse Stock Split — On August 10, 2020, after receiving stockholder approval, the Board of Directors approved an amendment to our Certificate of Incorporation to effect a reverse stock split of our common stock, par value $ 0.001 per share, by a ratio of one-for- ten .

The reverse stock split was effected on August 14, 2020.

Additionally, the total number of authorized shares of our common stock was reduced to 40,000,000 shares.

Unless otherwise indicated, all share amounts, per share data, share prices, exercise prices and conversion rates set forth in these notes and the accompanying consolidated financial statements have, where applicable, been adjusted retroactively to reflect this reverse stock split.

Treasury Stock — Repurchases of our common stock are accounted for at cost and are recorded as treasury stock.

15 unchanged sentences

The adoption of this standard did not have a material impact on our consolidated financial statements.

Pronouncements Issued But Not Yet Adopted —We believe that all recently issued accounting pronouncements from the FASB either do not apply to us or will not have a material impact on our Consolidated Financial Statements.

Pronouncements Issued But Not Yet Adopted —In December 2023, 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 no impact to results of operations, cash flows and financial condition.

Note 3 — EARNINGS PER SHARE

6 unchanged sentences

2023 2022 2021

Net income (loss) $ 72,220 $ 249,834 $ ( 27,154 )

Net (loss) income $ ( 35,673 ) $ 72,220 $ 249,834

Basic weighted average common shares outstanding 12,761 13,152 13,099

2 unchanged sentences

Diluted weighted average common shares outstanding 12,761 13,452 13,391

Earnings (loss) per share:

(Loss) earnings per share:

Basic $ ( 2.80 ) $ 5.49 $ 19.07

14 unchanged sentences

Restricted cash included in "Other assets, net" on the balance sheet at December 31, 2023, 2022, and 2021 represents amounts whose use is restricted by contractual agreements with the BLM or the State of Utah as security to fund future reclamation obligations at our sites.

Restricted cash included in "Other current assets" on the balance sheet at December 31, 2022 represents cash deposits with supply vendors.

Restricted cash included in "Other current assets" on the balance sheet at December 31, 2023 and 2022 represents cash deposits with supply vendors.

Note 5 — INVENTORY AND LONG-TERM PARTS INVENTORY

7 unchanged sentences

Total inventory, net $ 144,483 $ 139,639

During the years ended December 31, 2022, and December 31, 2021, we recorded no charges for lower of weighted average cost or estimated net realizable value on our finished goods product inventory.

During the year ended December 31, 2020, we recorded charges of approximately $ 4.0 million, as a result of routine assessments of the lower of weighted average cost or estimated net realizable value on our finished goods product inventory.

During the year ended December 31, 2023, we recorded $ 6.5 million in charges for lower of weighted average cost or estimated net realizable value on our finished goods product inventory.

During the years ended December 31, 2022 and 2021, we recorded no charges for lower of weighted average cost or estimated net realizable value on our finished goods product inventory.

Parts inventories are shown net of any required allowances.

22 unchanged sentences

Total incurred $ 39,078 $ 34,711 $ 35,635

During the year ended December 31, 2023, we recorded total impairment charges of $ 43.3 million, as discussed in more detail below.

During the year ended December 31, 2022, we recorded no impairment charges.

In the fourth quarter of 2023, given the decrease in our gross margin for our Trio ® segment we determined that sufficient indicators of potential impairment of our Trio ® segment long-lived assets existed.

We performed a recoverability test and determined that the carrying value of our Trio ® segment long-lived assets was not recoverable.

We engaged a third-party valuation firm to determine the fair value of our Trio ® segment assets.

The fair value of our Trio ® segment assets was primarily determined using the expected proceeds received in an orderly sale of the individual assets.

The carrying value of our Trio ® segment asset group exceeded its fair value, and we recorded an impairment charge of $ 31.9 million.

Our long-lived assets at our West facility have been in care and maintenance since July 2016.

Given the length of time since the assets were placed in care and maintenance, we engaged a third-party valuation firm to determine if the fair value of the West assets supports the carrying value of those assets.

The fair value of the West assets was determined using the expected proceeds received in an orderly sale of the individual assets.

The carrying value of the West assets exceeded the fair value and we recorded an impairment charge of $ 9.9 million during the fourth quarter of 2023.

Finally, during 2023, we recorded impairment charges of $ 1.5 million related to certain assets in our Oilfield Solutions Segment, specifically certain water recycling equipment and an investment in a non-operating interest in an oil and gas investment.

Note 7 — LEASES

1 unchanged sentence

We have operating leases for mining equipment, trucks, rail cars, and office space.

Our operating leases have remaining leases terms ranging from less than one year to five years.

Our operating leases have remaining leases terms ranging from less than one year to four years.

Our finance leases have remaining terms ranging from less than one year to five years.

Leases recorded on the balance sheet consist of the following (amounts in thousands):

1 unchanged sentence

Operating lease ROU assets, net Property, plant, equipment, and mineral properties, net $ 2,031 $ 3,663

Finance lease ROU assets, net Property, plant, equipment, and mineral properties, net $ 2,609 $ —

Current operating lease liabilities Other current liabilities $ 1,387 $ 1,608

Current finance lease liability Other current liabilities $ 961 $ —

Non-current operating lease liabilities Operating lease liabilities $ 741 $ 2,206

Non-current finance lease liabilities Finance lease liabilities $ 1,451 $ —

Other information related to lease term and discount rate is as follows:

1 unchanged sentence

Weighted average remaining lease term - operating leases 1.7 years 2.5 years

Weighted average remaining lease term - finance leases 2.3 years 0.0 years

Weighted average discount rate - operating leases 5.7 % 5.4 %

Weighted average discount rate - finance leases 8.5 % — %

The components of lease expense are as follows (amounts in thousands):

7 unchanged sentences

Operating cash flows from operating leases $ 1,724 $ 1,889

Finance cash flows from finance leases — 1,258

Operating cash flows from finance leases 139 —

Financing cash flows from finance leases 597 —

Right-of-Use Assets exchanged for new operating lease liabilities 48 2,305

Right-of-Use Assets exchanged for new finance lease liabilities 3,009 —

As of December 31, 2023, maturities of lease liabilities are summarized as follows (amounts in thousands):

Years Ending December 31, Operating Leases

Years Ending December 31, Operating Leases Finance Leases Total

2024 $ 1,471 $ 1,104 $ 2,575

2025 618 810 1,428

2026 114 644 758

2027 40 67 107

Total future minimum lease payments $ 2,243 2,664 4,907

4 unchanged sentences

Note 8 — INTANGIBLE ASSETS

We acquired certain water rights, recorded at $ 16.9 million, and other intangible assets, recorded at $ 6.4 million, in the Intrepid South asset acquisition that we completed in May 2019.

We account for our water rights as indefinite-lived intangible assets.

We account for the other intangible assets acquired in the Intrepid South asset acquisition as finite-lived intangible assets and amortize those intangible assets over the period of estimated benefit, using the straight-line method.

The weighted-average amortization period for the other intangible assets acquired in the Intrepid South asset acquisition was 20 years.

We have water rights, recorded at $ 19.2 million at December 31, 2023, and 2022.

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 have other intangible assets recorded at $ 6.4 million as of December 31, 2023 and 2022.

We account for the 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 December 31, 2023, the weighted-average remaining amortization period for the other intangible assets was 15.3 years.

These intangible assets are included in "Other assets, net" on the consolidated balance sheets.

18 unchanged sentences

We occasionally borrow and repay amounts under the facility for near-term working capital needs or other purposes and may do so in the future.

For the year ended December 31, 2023, we made $ 9.0 million in borrowings and made $ 5.0 million in repayments under the facility.

For the year ended December 31, 2022, we made no borrowings and made no repayments under the facility.

For the year ended December 31, 2021, we made no borrowings and made $ 29.8 million repayments, under the facility.

For the year ended December 31, 2020, we borrowed $ 10.0 million and made no repayments under the facility.

For the year ended December 31, 2021, we made no borrowings and made $ 29.8 million in repayments under the facility.

As of December 31, 2023, we had $ 4.0 million in borrowings outstanding and no outstanding letters of credit under the facility.

As of December 31, 2022, and 2021, we had no borrowings outstanding and $ 1.0 million in an outstanding letter of credit under the facility.

93 unchanged sentences

We met our performance metrics related to our 2022 cash bonus program and paid a cash bonus in March 2023.

While we did meet certain performance metrics related to our 2020 cash bonus program, we did not pay a cash bonus under our 2020 cash bonus program.

We met our performance metrics related to our 2021 cash bonus program and paid a cash bonus in March 2022.

Equity Incentive Compensation Plan —Our Board of Directors and stockholders adopted a long-term incentive compensation plan called the Intrepid Potash, Inc.

20 unchanged sentences

provided, however, that no vesting would occur if the volume-weighted average closing price for 20 consecutive days has not met one or more applicable price achievement goals on or before March 17, 2026.

The share price achievement goals of these awards have been met as of December 31, 2022, and will vest over three years subject to continued employment.

The share price achievement goals of these awards have not been met as of December 31, 2023.

Under the Plan in March 2023, the Compensation Committee also granted restricted shares of common stock with service and market conditions to another member of our executive team as part of his annual compensation package.

1 unchanged sentence

provided, however, that no vesting would occur if the volume-weighted average closing price for 20 consecutive trading days has not met one or more applicable price achievement goals on or before March 17, 2027.

The share price achievement goal for this award has been met as of December 31, 2022, and will vest on June 30, 2023, and June 30, 2024.

Under the Plan in March 2021, the Compensation Committee granted restricted shares of common stock with service and market conditions to certain members of our executive team as part of their annual compensation package.

The share price achievement goal for this award has not been met as of December 31, 2023.

Under the Plan in March 2022, the Compensation Committee granted restricted shares of common stock with service and market conditions to certain members of our executive team as part of their annual compensation

The grants vest over three years from the quarter ended in which the volume-weighted average share closing price for 20 consecutive days has met one of the applicable price achievement targets;

The share price achievement goals of these awards were met in 2021, and the awards vest over three years from the grant date subject to continued employment.

Under the Plan in December 2021, the Compensation Committee granted restricted shares of common stock with service and market conditions to a member of our executive team as part of his annual compensation package.

The share price achievement goals of these awards were met in 2022, and 1,737 shares vested in 2023.

Under the Plan in March 2022, the Compensation Committee granted restricted shares of common stock with service and market conditions to a member of our executive team as part of his annual compensation package.

This grant vests over two years from the quarter ended in which the volume-weighted average share closing price for 20 consecutive trading days has met one of the applicable price achievement targets;

As of December 31, 2022, share price achievement goals have been met and one-half of the shares will vest in 2023, and one-half will vest in 2024.

The share price achievement goals of these awards were met in 2022, and 14,512 shares vested in 2023.

The grants vest over three years on the grant date anniversary;

The share price achievement goals of these awards were met in 2021, and 886 shares vested in 2023.

Under the plan in 2021, the Compensation Committee granted restricted shares of common stock with service and market conditions to a member of our executive team as part of his annual compensation package.

The 2021 grant vests over two years from the quarter ended in which the volume weighted average share closing price for 20 consecutive trading days has met one of the applicable price achievement targets;

The market conditions for this award were met in 2021, and 47,259 shares vested during 2022 and 47,259 shares will vest in 2023.

The market conditions for this award were met in 2022, and 24,152 shares vested during 2023.

During 2023, share price achievement targets were met for shares granted to a member of the executive team in 2020 and 47,259 shares vested in 2023.

38 unchanged sentences

1 The intrinsic value of a stock option is the amount by which the market value exceeds the exercise price as of the end of the period presented.

No stock options were exercised during 2023.

The total intrinsic value of exercised options to purchase stock during 2022 was $ 0.6 million.

The total intrinsic value of exercised options to purchase stock during 2021 and 2020 was immaterial for each year.

The total intrinsic value of exercised options to purchase stock during 2021 was immaterial.

Note 13 — INCOME TAXES

9 unchanged sentences

State 82 966 206

Deferred portion of income tax expense:

Deferred portion of income tax expense (benefit):

Federal ( 8,538 ) 19,430 ( 157,348 )

State 67 3,893 ( 51,727 )

Total income tax expense (benefit) $ 24,289 $ ( 208,869 ) $ 5

Total income tax (benefit) expense $ ( 8,389 ) $ 24,289 $ ( 208,869 )

A reconciliation of the federal statutory income tax rate of 21 % to our effective rate is as follows (in thousands, except percentages):

6 unchanged sentences

Change in federal and state tax rates 238 ( 125 ) 138

Officers' Compensation 848 546 195

Percentage depletion ( 282 ) ( 827 ) ( 463 )

Other 213 ( 978 ) ( 595 )

Net expense (benefit) as calculated $ 24,289 $ ( 208,869 ) $ 5

Net (benefit) expense as calculated $ ( 8,389 ) $ 24,289 $ ( 208,869 )

Effective tax rate 19.0 % 25.2 % ( 509.9 ) %

Our effective tax rate for the years ended December 31, 2023, differs from the U.S.

federal statutory rate due to state income taxes, while our effective tax rates for the years ended December 31, 2021, and 2020, differs from the U.S.

federal statutory rate due to the change in valuation allowance.

federal statutory rate due to the change in our valuation allowance.

Our effective tax rates for the years ended December 31, 2022, and 2021, differs from the U.S.

federal statutory rate due to state income taxes and the change in our valuation allowance, respectively.

As of December 31, 2023, and 2022, we had gross deferred tax assets of $ 197.4 million and $ 187.8 million, respectively.

During the year ended December 31, 2022, our deferred tax assets decreased primarily from our usage of prior year net operating losses to offset current year income.

During the year ended December 31, 2023, our deferred tax assets increased primarily from impairments booked against our property, plant, equipment, and mineral properties.

Included in gross deferred tax assets as of December 31, 2023, were approximately $ 201.4 million of federal net operating loss carryforwards, which expire beginning in 2034, and approximately $ 271.9 million of state net operating loss carryforwards, the majority of which begin to expire in 2033.

23 unchanged sentences

Thus, we have concluded that it is more likely than not that most of our $ 197.4 million of deferred tax assets will be realized.

During 2022, our valuation allowance did not change as we continue to maintain a valuation allowance of $ 2.0 million against our deferred tax assets related to federal and state research and development credits as we forecast these will expire before being used.

Our deferred tax assets, net of the valuation allowance at December 31, 2022, and 2021, was $ 185.8 million and $ 209.1 million, respectively

During 2023, our valuation allowance increased as our forecast changed regarding the amount of state net operating losses that will be used before expiration.

Our deferred tax assets, net of the valuation allowance at December 31, 2023, and 2022, were $ 194.2 million and $ 185.8 million, respectively.

The estimated statutory income tax rates that are applied to our current and deferred income tax calculations are impacted most significantly by the tax jurisdictions in which we conduct business.

20 unchanged sentences

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.

In February 2019, an expedited inter se proceeding commenced to determine the validity of our Pecos River water rights, representing approximately 20,000 acre feet per year.

On December 17, 2021, the adjudication court entered its findings of fact and conclusions of law, which held that our predecessors in interest had forfeited all but approximately 5,800 feet of water per year, and further ruled 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.

On March 17, 2022, the adjudication court entered the subfile order and partial final judgment and decree, which adopted the court's December 17, 2021 findings of fact and conclusion of law and specifies our right to 150 acre feet per annum of water for industrial-salt processing use.

On April 15, 2022, we filed a notice of appeal of the adjudication court's ruling on the validity of our water rights.

The appeal is currently before the New Mexico Court of Appeals and the matter has been fully briefed.

In 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 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.

In 2017 and 2018 the New Mexico Office of the State Engineer (“OSE”) had granted us preliminary authorizations to sell approximately 5,700 acre feet of water per year from our Pecos River water rights.

17 unchanged sentences

The settlement did not have a material impact on our results of operations and the JMA was terminated effective May 1, 2022.

As of December 31, 2022 we have estimated contingent liabilities recorded in "Other current liabilities" on the consolidated balance sheets of $ 4.2 million, mainly related to a trespass issue at Intrepid South and the potential underpayment of royalties in 2012 to 2016.

At December 31, 2021, our estimated contingent liabilities was immaterial.

As of December 31, 2023, we have estimated contingent liabilities recorded in "Other current liabilities" on the consolidated balance sheets of $ 3.4 million, mainly related to the potential underpayment of royalties in 2012 to 2016 and potential royalties on water revenues in 2019 to 2022.

As of December 31, 2022 we had estimated contingent liabilities recorded in "Other current liabilities" on the consolidated balance sheets of $ 4.2 million, mainly related to a trespass issue at Intrepid South and the potential underpayment of royalties in 2012 to 2016.

We are subject to other claims and legal actions in the ordinary course of business.

13 unchanged sentences

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 December 31, 2022, and December 31, 2021, we had cash equivalents of $ 1.7 million and zero , respectively.

Held-to-Maturity Investments —As of December 31, 2022, we owned debt investment securities classified as held-to-maturity because we have the intent and ability to hold these investments to maturity.

Cash Equivalents —As of December 31, 2023, and December 31, 2022, we had cash equivalents of $ 0.5 million and $ 1.7 million, respectively.

Held-to-Maturity Investments —As of December 31, 2023 and 2022, 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.

We had no held-to-maturity investments at December 31, 2021.

Our held-to-maturity investments at December 31, 2022, are carried at amortized cost and consist of the following (amounts in thousands):

Our held-to-maturity investments at December 31, 2023 and 2022, are carried at amortized cost and consist of the following (amounts in thousands):

As of December 31, 2023

6 unchanged sentences

Total $ 954 $ 1 $ ( 4 ) $ 951

As of December 31, 2022

Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value

Corporate bonds $ 3,992 $ — $ ( 24 ) $ 3,968

Government bonds 1,967 — ( 18 ) 1,949

Total $ 5,959 $ — $ ( 42 ) $ 5,917

Corporate bonds $ 499 $ — $ ( 10 ) $ 489

Government bonds 1,935 — ( 26 ) 1,909

Total $ 2,434 $ — $ ( 36 ) $ 2,398

Equity Investments without a Readily Determinable Fair Value —As of December 31, 2023, 2022, and 2021, we had a $ 3.5 million non-controlling interest in W.D.

2 unchanged sentences

We did not record any adjustments to the $ 3.5 million carrying value of the investment during 2023, 2022 or 2021.

Equity Method Investments —We have committed to invest $ 4.0 million in cash as a limited partner for a 16 % interest in PEP Ovation, LP ("Ovation"), of which we had invested $ 3.2 million and $ 1.1 million of cash as of December 31, 2022, and 2021, respectively.

In July 2022, WDVGL entered into a purchase agreement with another company (“Acquiror”), a foreign issuer whose shares are traded on the Nasdaq Capital Market (“Nasdaq”).

Under the terms of the purchase agreement, WDVGL would be 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 Acquiror would then purchase Engineering in a majority stock transaction at an agreed upon selling price.

Stock received from the sale of Engineering would be distributed to investors in WDVGL and Consulting.

Acquiror delivered equity shares and a nominal amount of cash to WDVGL for purchase of Engineering in July 2022, with the number of shares equal to the selling price divided by an assumed $ 10 share price.

At the time the purchase agreement was signed, the Acquiror was working to file restated financial statements for the fiscal years ending December 31, 2018, 2019 and 2020.

On A pril 27, 2023, Acquiror disclosed it had not been able to file its Annual Report on Form 20-F for the fiscal year ended December 31, 2021 with the SEC by April 25, 2023, which was the deadline set by the Nasdaq Hearings Panel in connection with a delisting proceeding, and Acquiror's shares were subsequently delisted from Nasdaq.

Acquiror also disclosed on April 27, 2023 that it has shifted its focus to filing audited financial statements with the SEC for the fiscal years ended December 31, 2020, 2021 and 2022 to regain compliance with Nasdaq listing standards before the end of 2023.

Pursuant to the purchase agreement with Engineering, if the Acquiror did not file current financial statements with the SEC by June 30, 2023, Engineering had the option to terminate the purchase agreement, beginning on July 1, 2023.

Although Acquiror did not file current financial statements by June 30, 2023, Engineering agreed to proceed with the purchase agreement to allow Acquiror additional time to file updated financial statements.

On December 29, 2023, Acquiror disclosed it had filed its audited financial statements for the years ended December 31, 2022, 2021, and 2020, with the SEC.

We have not impaired our investment in WDVGL because our share of the estimated selling price of Engineering exceeds the carrying value of our investment in WDVGL.

We continue to monitor the investment for impairment.

If the purchase transaction is not finalized, we may need to impair our investment in WDVGL.

Equity Method Investments —We have committed to invest $ 4.0 million in cash as a limited partner for a 16 % interest in PEP Ovation, LP ("Ovation"), of which we had invested $ 2.0 million, $ 3.2 million and $ 1.1 million of cash as of December 31, 2023, 2022, and 2021, respectively.

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 and is included in "Long-term investments" on the Condensed Consolidated Balance Sheets.

For the year ended December 31, 2022, our proportional share of Ovation's net income was $ 0.7 million.

For the year ended December 31, 2023, our proportional share of Ovation's net loss was $ 0.5 million.

Note 16 — EMPLOYEE BENEFITS

13 unchanged sentences

The reportable segments are determined by management based on several factors including the types of products and services sold, production processes, markets served and the financial information available for our chief operating decision maker.

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.

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.

8 unchanged sentences

97,452 74,308 15,518 — 187,278

Gross Margin $ 94,769 $ 39,123 $ 7,516 $ — $ 141,408

Lower of cost or NRV inventory adjustments

2,709 3,783 — — 6,492

Gross Margin (Deficit) $ 35,049 $ ( 3,995 ) $ 5,792 $ — $ 36,846

Depreciation, depletion, and amortization incurred 2

8 unchanged sentences

76,524 54,600 21,152 — 152,276

Costs associated with abnormal

production and other

5,973 — — — 5,973

Gross Margin $ 94,769 $ 39,123 $ 7,516 $ — $ 141,408

9 unchanged sentences

87,281 54,847 19,293 — 161,421

Lower of cost or NRV inventory adjustments

Costs associated with abnormal production and other

5,973 — — — 5,973

4 unchanged sentences

2 Depreciation, depletion, and amortization incurred for potash and Trio ® excludes depreciation, depletion, and amortization absorbed in or (relieved from) inventory.

The following table shows the reconciliation of reportable segment sales to consolidated sales and the reconciliation of segment gross margins to consolidated income before taxes (in thousands):

Year Ended December 31,

2023 2022 2021

Total sales for reportable segments $ 279,412 $ 337,872 $ 270,579

Elimination of intersegment sales ( 329 ) ( 304 ) ( 247 )

Total consolidated sales $ 279,083 $ 337,568 $ 270,332

Total gross margin for reportable segments $ 36,846 $ 141,408 $ 55,764

Elimination of intersegment sales ( 329 ) ( 304 ) ( 247 )

Elimination of intersegment expenses 329 304 247

Unallocated amounts:

Selling and administrative 32,423 31,799 23,998

Impairment of long-lived assets 43,288 — —

Loss (gain) on disposal of assets 807 7,470 ( 2,542 )

Accretion of asset retirement obligation 2,140 1,961 1,858

Other operating expense 2,157 4,738 178

Equity in loss/(earnings) of unconsolidated entities 486 ( 689 ) —

Interest expense, net — 101 1,468

Gain on extinguishment of debt — — ( 10,113 )

Interest income ( 298 ) ( 176 ) —

Other non-operating income ( 95 ) ( 305 ) ( 48 )

(Loss) income before income taxes $ ( 44,062 ) $ 96,509 $ 40,965

Total assets are not presented for each reportable segment as they are not reviewed by, nor otherwise regularly provided to, the chief operating decision maker.

4 unchanged sentences

These markets are the agricultural market as a fertilizer, the industrial market as a component in drilling fluids for oil and gas exploration, and the animal feed market as a nutrient.

Credit risks associated with the collection of accounts receivable are primarily related to the impact of external

factors on our customers.

Our customers are distributors and end-users whose credit worthiness and ability to meet their payment obligations will be affected by factors in their industries and markets.

Credit risks associated with the collection of accounts receivable are primarily related to the impact of external factors on our customers.

Our customers are distributors and end-users whose creditworthiness and ability to meet their payment obligations will be affected by factors in their industries and markets.

Those factors include soil nutrient levels, crop prices, weather, the type of crops planted, changes in diets, growth in population, the amount of land under cultivation, fuel prices and consumption, oil and gas drilling and completion activity, the demand for biofuels, government policy, and the relative value of currencies.

Our industrial sales are significantly influenced by oil and gas drilling activity.

In 2022, we had one customer in our potash and Trio ® segments that accounted for approximately $ 35.0 million of our total consolidated revenues.

In 2023 and 2022, we had one customer in our potash and Trio ® segments that accounted for approximately $ 33.4 million and $ 35.0 million of our total consolidated revenues, respectively.

"Risks Related to Financial Position, Indebtedness and Additional Capital Needs - The loss or substantial decline in revenue from larger customers or certain industries could have a material adverse effect on our revenues, profitability, and liquidity."

In 2021, and 2020, no customer accounted for more than 10% of our sales.

In 2021, no customer accounted for more than 10% of our sales.

In each of the last three years ended December 31, 2023, 2022, and 2021, 95 %, 94 %, and 97 %, respectively, of our total sales were sold to customers located in the U.S.

15 unchanged sentences

We may suspend or discontinue the share repurchase program at any time.

We made no repurchases of shares of our common stock for the twelve months ended December 31, 2023.

In 2022, we repurchased 608,657 shares of our common stock and paid $ 22.0 million under the share repurchase program.

We repurchased no shares of our common stock in 2021 or 2020.

As of December 31, 2023, we have approximately $ 13.0 million of remaining availability under the share repurchase program.

— SUBSEQUENT EVENT

On December 12, 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”).

The Amendment had 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 cooperative development of certain lands for potassium and oil and gas.

The Cooperative Development Agreement restricts and limits the rights of us and XTO, as successors in interest to BOPCO, L.P.

to explore and develop their respective interests, including limitations on the location of wells.

We 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 agree to support and not oppose XTO’s development and operation of XTO’s oil and gas interests within the DPA.

As consideration under the Amendment, on December 12, 2023 we received an initial payment of $ 5.0 million, which is included in "Accrued liabilities" on the December 31, 2023 Consolidated Balance Sheet.

On January 2, 2024, we received an additional $ 45.0 million initial payment from XTO.

The Amendment also provides that we shall receive an additional one-time payment equal to $ 50.0 million as an “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 ( 7 ) 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 amount of $ 100.0 million, in the event of certain additional drilling activities by XTO.

The CDA also contains other customary representations, warranties, covenants, and dispute resolution provisions.

For the twelve months ended December 31, 2023, we have recorded no revenue associated with the Amendment.

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

22 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data