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COMPASS MINERALS INTERNATIONAL, INC.	2003 FORM 10-K

FORM 10-K/A

Securities and Exchange Commission

(MARK ONE)

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

COMPASS MINERALS INTERNATIONAL, INC.

Delaware		36-3972986
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
8300 College Boulevard Overland Park, Kansas (Address of principal executive offices)		66210 (Zip Code)

Registrant’s telephone number, including area code:

Securities Registered Pursuant to Section 12(b) of the Act:

Title of each class		Name of each exchange on which registered
Common stock, par value $0.01 per share		New York Stock Exchange
Preferred Stock Purchase Rights		New York Stock Exchange

Securities Registered Pursuant to Section 12(g) of the Act: None

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 þ    No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes o    No þ

The registrant did not have any public equity until December 2003. All of the registrant’s voting stock was held by affiliates of the registrant at June 30, 2003.

The number of shares outstanding of the registrant’s $0.01 par value common stock at November 8, 2004 was 30,870,936 shares.

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COMPASS MINERALS INTERNATIONAL, INC.	2003 FORM 10-K

INTRODUCTORY NOTE

Amendment No. 1 on Form 10-K/A to the Annual Report on Form 10-K for the year ended December 31, 2003.

     Compass Minerals International, Inc. (the “Company”), hereby amends its Annual Report on Form 10-K filed on March 19, 2004 for the years ended December 31, 2003, 2002 and 2001 to restate the combined and consolidated financial statements for each of those three years in order to correct an error in the calculation of the deferred income tax accounts and the related valuation allowance dating back to the year ended December 31, 1998. The effect of the timing of future reversals of existing taxable temporary differences (deferred tax liabilities) was not previously considered as a possible source of future taxable income (see the disclosure under the heading “Restatement” in Note 1 to the combined and consolidated financial statements). This amendment reflects only the changes discussed above and has no impact on cash flows, operating earnings, income before income taxes or the Company’s ability to realize the benefits from its deferred tax assets. All other information is unchanged and reflects the disclosures made at the time of the original filing on March 19, 2004.

     This Amendment No. 1 on Form 10-K/A amends Parts II and IV of its Annual Report on Form 10-K filed on March 19, 2004 to include the following amendments: Part II, Item 6 “Selected Financial Data”; Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations”; Part II, Item 8 “Financial Statements and Supplementary Data”; Part II, Item 9A “Controls and Procedures”; and Part IV, Item 15 “Exhibits, Financial Statement Schedules and Reports on Form 8-K”.

TABLE OF CONTENTS

PART I					Page No.
Item 1.		Business			3
Item 2.		Properties			19
Item 3.		Legal Proceedings			19
Item 4.		Submission of Matters to a Vote of Security Holders			19
PART II
Item 5.		Market for the Registrant’s Common Equity and Related Stockholder Matters			20
Item 6.		Selected Financial Data			20
Item 7.		Management’s Discussion and Analysis of Financial Condition and Results of Operations			22
Item 7A.		Quantitative and Qualitative Disclosures About Market Risk			34
Item 8.		Financial Statements and Supplementary Data			35
Item 9.		Changes in and Disagreements with Accountants on Accounting and Financial Disclosures			62
Item 9A.		Controls and Procedures			62
PART III
Item 10.		Directors and Executive Officers of the Registrant			63
Item 11.		Executive Compensation			66
Item 12.		Security Ownership and Certain Beneficial Owners and Management and Related Stockholder Matters			69
Item 13.		Certain Relationships and Related Transactions			69
Item 14.		Principal Accountant Fees and Services			71
PART IV
Item 15.		Exhibits, Financial Statement Schedules and Reports on Form 8-K			72
SIGNATURES					75
Consent of Ernst & Young LLP
Consent of PricewaterhouseCoopers LLP
Section 302 Certification of President and CEO
Section 302 Certification of CFO and Vice President
Certification of President and CEO and CFO and Vice President

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COMPASS MINERALS INTERNATIONAL, INC.	2003 FORM 10-K

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

MARKET AND INDUSTRY DATA AND FORECASTS

ITEM 1.		BUSINESS

COMPANY OVERVIEW

	•	We believe that our cash flows are not materially impacted by economic cycles due to the stable end-use markets of salt and the absence of cost-effective alternatives.
	•	We operate 11 facilities in North America and the United Kingdom, including the largest rock salt mine in the world in Goderich, Ontario and the largest salt mine in the United Kingdom in Winsford, Cheshire.
	•	We believe that we are among the lowest cost rock salt producers in our markets. Our cost advantage is due to the size and quality of our reserves, effective mining techniques and efficient production processes. In addition, our salt mines in North America are located near either rail or water transport systems, thereby minimizing

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COMPASS MINERALS INTERNATIONAL, INC.	2003 FORM 10-K

		shipping and handling costs, which constitute a significant portion of the overall delivered cost of salt.

SALT SEGMENT

Salt Industry Overview

Processing Methods

Underground Rock Salt Mining. We employ a drill and blast mining technique at our underground rock salt mines. Mining machinery moves salt from the salt face to conveyor belts where it is then crushed and screened. Salt is then hoisted to the surface where it is loaded onto shipping vessels, railcars or trucks. The primary power sources for each of our rock salt mines are electricity and diesel fuel. At our Winsford, U.K. facility, we use a continuous miner process. Rock salt is primarily used in our highway and consumer deicing products. Based on annual production capacities, our underground rock

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COMPASS MINERALS INTERNATIONAL, INC.	2003 FORM 10-K

salt mining represents approximately 78% of our salt production.

Mechanical Evaporation. The mechanical evaporation method involves subjecting salt-saturated brine to vacuum pressure and heat, generated by natural gas or oil, to precipitate salt. The salt brine is obtained from underground salt deposits through a series of brine wells. The resulting product has both a high purity and uniform physical shape. Evaporated salt is primarily used in our general trade salt product lines. Based on annual production capacities, our mechanical evaporation represents approximately 12% of our salt production.

Solar Evaporation. The solar evaporation method is used in areas of the world where high-salinity brine is available and where weather conditions provide for a high natural- evaporation rate. The brine is pumped into a series of large open ponds where sun and wind evaporate the water and crystallize the salt, which is then mechanically harvested and processed through washing, drying and screening. Solar salt is primarily used in our general trade salt product lines. Based on annual production capacities, our solar evaporation represents approximately 10% of our salt production.

Operations and Facilities

Canada. Our salt is produced at five different locations in Canada. Mechanically evaporated salt is produced at three facilities strategically located throughout Canada: Amherst, Nova Scotia in Eastern Canada; Goderich, Ontario in Central Canada; and Unity, Saskatchewan in Western Canada. From the Goderich, Ontario rock salt mine, we serve the consumer and highway deicing markets in Canada and the Great Lakes region of the United States. We also purchase salt and other products from IMC Global’s potash and salt facilities located in Saskatchewan, which serve both the general trade and the highway deicing markets.

United Kingdom. Our United Kingdom customer base is served by two facilities. Highway deicing customers throughout the United Kingdom are served by the Winsford rock salt mine in Northwest England. The Weston Point mechanical evaporation plant is located 12 miles north of the mine and serves our general trade and chemical customers in the United Kingdom as well as in continental Europe.

			Annual
			Production
			Capacity
Location			(tons)				Product Type
North America
	Goderich, Ontario Mine			6,500,000				Rock
	Cote Blanche, Louisiana Mine			2,800,000				Rock
	Ogden, Utah Plant			1,500,000				Solar
	Lyons, Kansas Plant			425,000				Evaporated
	Unity, Saskatchewan Plant			175,000				Evaporated
	Goderich, Ontario Plant			170,000				Evaporated
	Amherst, Nova Scotia Plant			115,000				Evaporated
United Kingdom
	Winsford, Cheshire Mine			2,000,000				Rock
	Weston Point, Cheshire Plant			850,000				Evaporated

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COMPASS MINERALS INTERNATIONAL, INC.	2003 FORM 10-K

ties and their operating equipment are maintained in good working condition.

		Annual
		Packaging
		Capacity
Location		(tons)
Kenosha, Wisconsin			100,000
Chicago, Illinois			100,000

		Annual
		Purchasing
		Capacity				Product
Location		(tons)				Type
Esterhazy, Saskatchewan			200,000				Rock
Hersey, Michigan			250,000				Evaporated

Highway deicing constituted approximately 47% of our gross sales of salt in 2003. Principal customers are states, provinces, counties, municipalities and road maintenance contractors that purchase bulk salt for ice control on public roadways. Highway deicing salt is sold primarily through an annual tendered bid contract system as well as through some longer-term contracts, with price, product quality and delivery being the primary competitive market factors. Annual supply contracts generally are awarded on the basis of tendered bids once the purchaser is assured that the minimum requirements for purity, service and delivery can be met. The bidding process eliminates the need to invest significant time and effort in marketing and advertising. Location of the source of salt and distribution outlets also play a significant role in determining a supplier. We have an extensive network of approximately 72 depots for storage and distribution of highway deicing salt in North America. The majority of these depots are located on the Great Lakes and the Mississippi and Ohio River systems where our Goderich, Ontario and Cote Blanche, Louisiana mines are located to serve those markets. Salt from our Ogden, Utah facility is also partially used for highway deicing.

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COMPASS MINERALS INTERNATIONAL, INC.	2003 FORM 10-K

March when the need for highway deicing is at its peak. Lower than expected sales during this period could have a material adverse effect on our results of operations. The vast majority of North American deicing sales are made in Canada and the Midwestern United States where winter weather is generally harsher than in other parts of North America. In keeping with industry practice, we, together with our customers, stockpile sufficient quantities of salt to meet estimated requirements for the next winter season. See Item 1, “Business — Risk Factors — The seasonal demand for our products and the variations in our cash flows from quarter to quarter as a result of weather conditions may have an adverse effect on our results of operations and the price of our common stock” and Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Seasonality.”

		Year Ended December 31,
										2002								2001
		2003
		Tons				%				Tons				%				Tons				%
U.S.			6,267				65				5,104				64				5,656				60
Canada			2,560				26				2,162				27				2,301				25
Europe and Others			836				9				699				9				1,445				15
Total			9,663				100				7,965				100				9,402				100

We face strong competition in each of the markets in which we operate. In North America, other large, nationally recognized companies compete against our highway deicing and chemical salt products. In addition, there are several smaller regional producers of highway deicing salt. There are several importers of salt into North America but these mostly impact the Eastern seaboard where we have a minimal position. In the United Kingdom, there are two other companies that produce highway deicing salt, one in Northern England and the other in Northern Ireland. There are no significant imports of highway deicing salt into the United Kingdom.

The general trade business accounted for approximately 46% of our 2003 gross sales of salt. We are the third largest producer of general trade salt in North America. This product line includes commercial and consumer applications, such as table salt, water conditioning, consumer ice control, food processing, agricultural applications, as well as a variety of industrial applications. We believe that we are the largest private label producer of water conditioning and salt-based agricultural products in North America and sell more than 70 private labels of table salt to major retailers. Our Sifto® brand is well recognized in the Canadian market.

		Year Ended December 31,
										2002								2001
		2003
		Tons				%				Tons				%				Tons				%
U.S.			1,758				60				1,629				59				1,725				61
Canada			565				19				506				18				513				18
Europe and Others			604				21				651				23				584				21
Total			2,927				100				2,786				100				2,822				100

In North America, other large nationally recognized companies compete against our salt business in production and marketing of general trade salt products. In addition, there are several smaller regional producers of general trade salt. There are several importers of salt into North America but they mostly impact the East Coast and West Coast of the United States where we have a minimal position. In the United Kingdom, there is one other large domestic producer of general trade salt, several small local producers and some imports from continental Europe. We also export salt from the United Kingdom to Scandinavia and continental Europe and compete with many other European producers in these markets.

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COMPASS MINERALS INTERNATIONAL, INC.	2003 FORM 10-K

SPECIALTY POTASH SEGMENT

The annual worldwide consumption of all potash fertilizers approaches 50 million tons. Muriate of potash, or potassium chloride, is the most common source of potassium and accounts for over 90% of all potash consumed in fertilizer production. SOP represents about 5% of potash consumption. The remainder is supplied in the forms of potassium magnesium sulfate, nitrate of potassium, and, to a lesser extent, potassium thiosulfate and monopotassium phosphate. All of these products contain varying concentrations of potassium expressed as potassium oxide (K₂O) and different combinations of co-nutrients.

All of our SOP production is located on the Great Salt Lake west of Ogden, Utah. It is the largest SOP production facility in North America. The evaporation facility utilizes solar energy and operates over 40,000 acres of evaporation ponds to manufacture SOP and magnesium chloride from the brines of the Great Salt Lake. The property utilized in our operation is both owned and leased under annually renewing leases. This facility has the capacity to annually produce approximately 450,000 tons of SOP, approximately 400,000 tons of magnesium chloride and over 1.5 million tons of salt. These recoverable minerals exist in vast quantities in the Great Salt Lake. We estimate the recoverable minerals exceed 100 years of reserves at current production rates and capacities. Our rights to extract these minerals are contractually limited. We believe we will continue to be able to extend these agreements, as we have in the past, at commercially reasonable terms, without incurring substantial costs or incurring material modifications to the existing lease terms and conditions, thereby allowing us to extract additional quantities of minerals necessary to significantly extend the economic life of the reserves.

Our domestic sales of SOP are concentrated in the western states of California, Oregon, Washington, Idaho and the central tobacco belt area where the crops and soil conditions favor SOP. We generally export SOP through major trading companies. International SOP sales volumes in 2003 were 27% of our annual SOP sales. Prior to the acquisition by IMC Global in 1998, our SOP was marketed and sold by a sales group consisting of trained agronomists and professional fertilizer agents. These representatives directly contacted dealers and growers in the United States. Following the IMC Global acquisition, this SOP sales group was dissolved and the IMC Global sales force handled SOP sales. The IMC Global sales group was responsible for selling all potash and phosphate fertilizer products for IMC Global. Because the bulk of these fertilizers are sold as commodities, the focus on specialty products such as SOP diminished under IMC Global. Upon the purchase of the SOP business from IMC Global, we organized and employed an experienced global sales group similar to the one that was in place prior to 1998.

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COMPASS MINERALS INTERNATIONAL, INC.	2003 FORM 10-K

     The table below shows our shipments of SOP to the following regions (thousands of tons):

		Year Ended December 31,
		2003								2002								2001
		Tons				%				Tons				%				Tons				%
U.S.			182				73				151				62				148				79
Export(a)			69				27				91				38				40				21
Total			251				100				242				100				188				100

(a)	Export sales include product sold to foreign customers at U.S. ports.

    We previously had a long-term contract with IMC Global following the Recapitalization, whereby we acted as a sales agent for IMC Global to customers serviced by IMC Global’s Carlsbad, New Mexico facility. The contract did not limit the amount of SOP we could purchase from IMC Global. As a result of our June 2003 purchase of IMC Global’s remaining SOP marketing business this long-term contract with IMC Global terminated on November 30, 2003.

Approximately 56% of the world SOP production is located in Europe, 14% in the United States and the remaining 30% in various other countries. The world consumption of SOP totals about 2.9 million tons. Our major competition for SOP sales in North America include imports from Germany, Chile, Canada and Belgium. In addition, there is also some functional competition between SOP, muriate of potash and nitrate of potash. For exports into Asia, the Pacific Rim countries and Latin America, we compete with various local and European producers.

INTELLECTUAL PROPERTY

EMPLOYEES

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COMPASS MINERALS INTERNATIONAL, INC.	2003 FORM 10-K

The table below sets forth our principal properties:

Land and Related

Surface Rights

Mineral Reserves

Owned/

Expiration

Owned/

Expiration of

Location

Use

Leased

of Lease

Leased

Lease

Ogden, Utah

SOP and solar salt production facility

Owned

N/A

Leased

(1)

Lyons, Kansas

Evaporated salt production facility

Owned

N/A

Owned

N/A

Cote Blanche, Louisiana

Rock salt production facility

Leased

2060

Leased

2060

Weston Point, Cheshire, U.K.

Evaporated salt production facility

Owned

N/A

N/A

(2)

N/A

Winsford, Cheshire, U.K.

Rock salt production facility

Owned

N/A

Owned

N/A

Goderich, Ontario,

Rock salt production facility

Owned

N/A

Leased

2022

(3)

Canada

Evaporated salt production facility

Owned

N/A

Owned

N/A

Unity, Saskatchewan, Canada

Evaporated salt production facility

Owned

N/A

Leased

2009/2016

(4)

Amherst, Nova Scotia, Canada

Evaporated salt production facility

Owned

N/A

Leased

(5)

Overland Park, Kansas

Corporate headquarters

Leased

2008

N/A

N/A

(1)	The Ogden lease automatically renews on an annual basis.
(2)	Weston Point purchases brine for production purposes from a third party pursuant to a supply agreement that will expire in 2017.
(3)	Subject to the right of renewal through 2043.
(4)	Consists of two leases expiring in 2009 and 2016 subject to the right of renewal through 2030 and 2037, respectively.
(5)	Consists of two leases that are currently in the process of being renewed that will expire in 20 years with rights of renewal at 20–year increments.

    With respect to each facility at which we extract salt, brine or SOP, we obtain any required or necessary permits prior to the commencement of mining. Permits or licenses are obtained as needed in the normal course of business based on our mine plans and state, provincial and local regulatory provisions regarding mine permitting and licensing. Based on our historical permitting experience, we expect to be able to continue to obtain necessary mining permits to support historical rates of production.

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COMPASS MINERALS INTERNATIONAL, INC.	2003 FORM 10-K

ENVIRONMENTAL, HEALTH AND SAFETY MATTERS

Product Requirements and Impacts

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nance practices so as not to jeopardize road safety, while minimizing the potential for harm to the environment.” Environment Canada recently confirmed the high importance of road safety in its proposed regulation of road salt. In its September 22, 2003 press release in connection with the proposed Code of Practice, it indicated that the proposed code “will provide those who use road salts with a way to reduce harm to the environment without jeopardizing road safety.” Since the dissemination of the December 2001 report, we have endeavored to work more closely with the national government as well as provinces and municipalities to better manage the use, storage and release of our road salts. As a result, we believe it has become less likely that road salts will be designated as a toxic substance. Although we cannot predict whether the proposal to list road salts will be finalized or the precise form of the proposed Code of Practice or other future regulation, if standardized guidelines are developed for the use and storage of road salt or any alternate deicing products, we could suffer reduced sales and incur substantial costs and expenses that could have a material adverse effect on our business, financial condition and results of operation. In addition, while we are not aware of any similar governmental proposals for such designation of road salt in either the United States or the United Kingdom, we cannot guarantee that such proposals will not arise.

Operating Requirements and Impacts

Remedial Activities

Many of our formerly-owned and current facilities have been in operation for a number of years. Operations have historically involved the use and handling of regulated chemical substances, salt and by-products or process tailings by us and predecessor operators which have resulted in soil, surface water and groundwater contamination. At some locations there are areas where salt-processing waste and ordinary trash may have been disposed or buried, and have since been closed and covered with soil and other materials. These past operating practices at several of our facilities have resulted in soil, surface water and groundwater contamination.

Along with impacting the sites at which we have operated, various third parties have alleged that our historic operations have resulted in contamination to neighboring off-site areas or nearby third-party facilities. CERCLA imposes liability, without regard to fault or to the legality of a party’s conduct, on certain categories of persons who are considered to have contributed to the release of “hazardous substances” into the environment. Under CERCLA, or its various state analogues, one party may potentially be required to bear more than its

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proportional share of cleanup costs at a site where it has liability if payments cannot be obtained from other responsible parties.

You should carefully consider the following risks and all of the information set forth in this annual report on Form 10-K/A. The risks described below are not the only ones facing our company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially and adversely affect our business, financial condition or results of operations.

Risks Related to Our Business

The seasonal demand for our products and the variations in our cash flows from quarter to quarter as a result of weather conditions may have an adverse effect on our results of operations and the price of our common stock.

Our highway deicing product line is seasonal, with operating results varying from quarter to quarter as a result of weather conditions and other factors. Over the last four years, our North American highway deicing product line has generated over 61% of its annual sales, net of shipping and handling costs, during the months of December through March when the need for highway deicing is at its peak. We need to stockpile sufficient highway deicing salt in the first two fiscal quarters to meet estimated demand for the winter season.

Our substantial indebtedness could adversely affect our financial condition and impair our ability to operate our business.

As of December 31, 2003, we had $603.3 million of outstanding indebtedness, including approximately $78.3 million under our senior credit facilities, $14.0 million under our revolving credit facility, $327.9 million of Compass Minerals Group’s senior subordinated notes, $75.7 million of our senior discount notes, $107.4 million of our subordinated discount notes, and a stockholders’ deficit of $128.1 million.

	•	It may limit our ability to borrow money or sell stock to fund our working capital, capital expenditures and debt service requirements;
	•	it may limit our flexibility in planning for, or reacting to, changes in our business;
	•	we may be more highly leveraged than some of our competitors, which may place us at a competitive disadvantage;
	•	it may make us more vulnerable to a downturn in our business or the economy;

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	•	it will require us to dedicate a substantial portion of our cash flow from operations to the repayment of our indebtedness, thereby reducing the availability of our cash flow for other purposes; and
	•	it may materially and adversely affect our business and financial condition if we are unable to service our indebtedness or obtain additional financing, as needed.

     In addition, our indentures and our senior credit facilities contain financial and other restrictive covenants discussed below that may limit our ability to engage in activities that may be in our long-term best interests. Our failure to comply with those covenants could result in an event of default which, if not cured or waived, could result in the acceleration of all of our debt. See “— Restrictive covenants in the agreements governing our indebtedness and certain indebtedness of Compass Minerals Group may restrict our ability to pursue our business strategies.”

We are a holding company with no operations of our own and depend on our subsidiaries for cash.

Although our operations are conducted through our subsidiaries, none of our subsidiaries are obligated to make funds available to us for payment on our indebtedness or to pay dividends on our capital stock. Accordingly, our ability to make payments on our indebtedness and distribute dividends to our stockholders is dependent on the earnings and the distribution of funds from our subsidiaries. The terms of our senior credit facilities and the indenture governing the senior subordinated notes of Compass Minerals Group significantly restrict our subsidiaries from paying dividends and otherwise transferring assets to us. Furthermore, our subsidiaries will be permitted under the terms of our senior credit facilities and other indebtedness to incur additional indebtedness that may severely restrict or prohibit the making of distributions, the payment of dividends or the making of loans by our subsidiaries to us. The terms of our senior credit facilities also restrict our subsidiaries from paying dividends to us in order to fund cash interest on our senior discount notes and subordinated discount notes if we do not maintain an adjusted senior indebtedness leverage ratio of 5.25 or less (as of December 31, 2003) or if a default or event of default has occurred and is continuing under our senior credit facilities. As of December 31, 2003, our adjusted senior indebtedness leverage ratio was 2.95. We cannot assure you that we will maintain this ratio. This ratio is not necessarily comparable to other similarly titled ratios of other companies due to inconsistencies in the method of calculation and we encourage you to read our amended and restated credit agreement, as amended, contained in the exhibits to this report.

Restrictive covenants in the agreements governing our indebtedness and certain indebtedness of Compass Minerals Group may restrict our ability to pursue our business strategies.

Our senior credit facilities and indebtedness limit our ability and the ability of our restricted subsidiaries, among other things, to:

	•	incur additional indebtedness or contingent obligations;
	•	pay dividends or make distributions to our stockholders;
	•	repurchase or redeem our stock;
	•	make investments;
	•	grant liens;
	•	make capital expenditures;
	•	enter into transactions with our stockholders and affiliates;
	•	sell assets; and
	•	acquire the assets of, or merge or consolidate with, other companies.

     In addition, our senior credit facilities require us to maintain financial ratios. These financial ratios include an interest coverage ratio and a consolidated indebtedness leverage ratio. Although we have historically been able to maintain these financial ratios, we may not be able to maintain these ratios in the future. Covenants in our senior credit facilities may also impair our ability to finance future operations or capital needs or to enter into acquisitions or joint ventures or engage in other favorable business activities.

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COMPASS MINERALS INTERNATIONAL, INC.	2003 FORM 10-K

Economic and other risks associated with international sales and operations could adversely affect our business, including economic loss and a negative impact on earnings.

Since we manufacture and sell our products primarily in the United States, Canada and the United Kingdom, our business is subject to risks associated with doing business internationally. Our sales outside the United States, as a percentage of our total sales, were 34% for the year ended December 31, 2003. Accordingly, our future results could be adversely affected by a variety of factors, including:

	•	changes in foreign currency exchange rates;
	•	exchange controls;
	•	tariffs, other trade protection measures and import or export licensing requirements;
	•	potentially negative consequences from changes in tax laws;
	•	differing labor regulations;
	•	requirements relating to withholding taxes on remittances and other payments by subsidiaries;
	•	restrictions on our ability to own or operate subsidiaries, make investments or acquire new businesses in these jurisdictions;
	•	restrictions on our ability to repatriate dividends from our subsidiaries; and
	•	unexpected changes in regulatory requirements.

     Fluctuations in the value of the U.S. dollar may adversely affect our results of operations. Because our consolidated financial results are reported in U.S. dollars, if we generate sales or earnings in other currencies the translation of those results into U.S. dollars can result in a significant increase or decrease in the amount of those sales or earnings. In addition, our debt service requirements are primarily in U.S. dollars even though a significant percentage of our cash flow is generated in Canadian dollars and pounds sterling. Significant changes in the value of Canadian dollars and pounds sterling relative to the U.S. dollar could have a material adverse effect on our financial condition and our ability to meet interest and principal payments on U.S. dollar-denominated debt.

Our operations are dependent on natural gas and significant interruption in the supply or increase in the price of natural gas could have a material adverse effect on our financial condition or results of operations.

Energy costs, including primarily natural gas and electricity, represented approximately 12% of the costs of our North American salt production in 2003. Natural gas is a primary fuel source used in the evaporated salt production process. Our profitability is impacted by the price and availability of natural gas we purchase from third parties. In the fourth quarter of 2002, we adopted a policy of hedging natural gas prices through the use of swap agreements. We have not entered into any long-term contracts for the purchase of natural gas. Our contractual arrangements for the supply of natural gas do not specify quantities and are automatically renewed annually unless either party elects not to do so. We do not have arrangements in place with back-up suppliers. A significant increase in the price of natural gas that is not recovered through an increase in the price of our products or covered through our hedging arrangements, or an extended interruption in the supply of natural gas to our production facilities, could have a material adverse effect on our business, financial condition or results of operations.

Competition in our markets could limit our ability to attract and retain customers, force us to continuously make capital investments and put pressure on the prices we can charge for our products.

We encounter competition in all areas of our business. Competition in our product lines is based on a number of considerations, including product performance, transportation costs in salt distribution, brand reputation, quality of client service and support, and price. Additionally, customers for our products are attempting to reduce the number of vendors from which they purchase in order to increase their efficiency. Our customers increasingly demand a broad product range and we must continue to develop our expertise in order to manufacture and market these products successfully. To remain competitive, we will need to invest continuously in manufacturing, marketing, customer service and support and our distribution networks. We may have to adjust the prices of some of our products to stay competitive. We may not have

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sufficient resources to continue to make such investments or maintain our competitive position. Some of our competitors have greater financial and other resources than we do.

Environmental laws and regulation may subject us to significant liability and require us to incur additional costs in the future.

We are subject to numerous environmental, health and safety laws and regulations in the United States, Canada and Europe, including laws and regulations relating to land reclamation and remediation of hazardous substance releases, and discharges to air and water. For example CERCLA, imposes liability, without regard to fault or to the legality of a party’s conduct, on certain categories of persons (known as “potentially responsible parties”) who are considered to have contributed to the release of “hazardous substances” into the environment. Although we are not currently incurring material liabilities pursuant to CERCLA, we may in the future incur material liabilities under CERCLA and other environmental cleanup laws, with regard to our current or former facilities, adjacent or nearby third-party facilities, or off-site disposal locations. Under CERCLA, or its various state analogues, one party may, under some circumstances, be required to bear more than its proportional share of cleanup costs at a site where it has liability if payments cannot be obtained from other responsible parties. Liability under these laws involves inherent uncertainties. Violations of environmental, health and safety laws are subject to civil, and in some cases, criminal sanctions.

The Canadian government’s proposal to designate road salt as a toxic substance could have a material adverse effect on our business, including reduced sales and the incurrence of substantial costs and expenditures.

In December 2001, the Canadian government released a Priority Substances List Assessment Report for road salt. This report found that road salts are entering the environment under conditions that may have a harmful effect or constitute a danger to the environment. Based on this report, the Minister of Environment has proposed designating road salt as a “toxic” substance pursuant to the Canadian Environmental Protection Act. Canada’s federal cabinet, which has ultimate responsibility, has not yet taken final action with respect to this proposal and is not subject to any deadline to do so. At this point, Environment Canada has indicated that, whether or not road salts are declared toxic, their preferred course of action is the establishment of voluntary guidelines for users as opposed to any form of regulation. Environment Canada has been developing these guidelines based on consultation with a broad-based stakeholders group, which includes the salt industry. On September 20, 2003, Environment Canada released a proposed Code of Practice to serve as these guidelines. The proposed Code of Practice remained subject to public comment until November 19, 2003. Environment Canada has indicated that it expects to publish the final code in 2004. Although the proposed Code of Practice remains subject to change, the released draft requires large road-salt

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users to develop salt management plans. We do not believe that this would have a material direct effect on us, but the new salt management plans may lead our customers in Canada to require less road salt.

Our operations are dependent on our having received the required permits and approvals from governmental authorities.

We hold numerous governmental environmental, mining and other permits and approvals authorizing operations at each of our facilities. A decision by a governmental agency to deny or delay issuing a new or renewed permit or approval, or to revoke or substantially modify an existing permit or approval, could have a material adverse effect on our ability to continue operations at the affected facility. Expansion of our existing operations also is predicated upon securing the necessary environmental or other permits or approvals. We currently do not have any material pending permits or approvals.

Protection of proprietary technology — Our intellectual property may be misappropriated or subject to claims of infringement.

We attempt to protect our intellectual property rights through a combination of patent, trademark, copyright and trade secret protection, as well as licensing agreements and third-party nondisclosure and assignment agreements. We cannot assure you that any of our applications for protection of our intellectual property rights will be approved or that others will not infringe or challenge our intellectual property rights. The patents we currently have in place expire between 2009 and 2018. We also rely on unpatented proprietary technology. It is possible that others will independently develop the same or similar technology or otherwise obtain access to our unpatented technology. To protect our trade secrets and other proprietary information, we require employees, consultants, advisors and collaborators to enter into confidentiality agreements. Many of our important brand names are registered as trademarks in the United States and foreign countries. These registrations can be renewed if the trademark remains in use. These agreements may not provide meaningful protection for our trade secrets, know-how or other proprietary information in the event of any unauthorized use, misappropriation or disclosure. If we are unable to maintain the proprietary nature of our technologies, we may lose the competitive advantage provided by our intellectual property. As a result, our results of operations may be adversely affected.

If we are unsuccessful in negotiating new collective bargaining agreements, we may experience significant increases in the cost of labor or a disruption in our operations.

As of December 31, 2003, we had 1,497 employees. Approximately 38% of our U.S. workforce (54% of our global workforce) is represented by labor unions. Of our nine material collective bargaining agreements, four will expire in 2004, one will expire in 2005 and four will expire in 2006. Additionally, approximately 13% of our workforce is employed in Europe where trade union membership is common. Although we believe that our relations with our employees are good, as a result of general economic, financial, competitive, legislative, political and other factors beyond our control, we cannot assure you that we will be successful in negotiating new collective bargaining agreements, that such negotiations will not result in significant increases in the cost of labor or that a breakdown in such negotiations will not result in the disruption of our operations.

We rely on independent distributors and the loss of a substantial number of these distributors may reduce our profits and sales.

In addition to our own direct sales force, we depend on the services of independent distributors to sell our products and provide service and aftermarket support to our customers. In 2003, 12% of our sales, net of shipping and handling costs, were generated through these independent distributors. Many of these independent distributors are not bound to us by exclusive distribution contracts and may offer products of, and services to, businesses that compete with ours. In addition, the majority of the distribution contracts we have with these independent distributors are cancelable by the distributor after providing us with notice, which on average is six months prior to termination. The loss of a substantial number of these distributors or the decision by many of these distributors to offer competitors’ products to our customers could materially reduce our sales and profits.

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If we cannot successfully complete acquisitions or integrate acquired businesses, our growth may be limited and our financial condition adversely affected.

Our business strategy includes supplementing internal growth by pursuing acquisitions of small complementary businesses. We may be unable to complete acquisitions on acceptable terms, identify suitable businesses to acquire or successfully integrate acquired businesses in the future. We compete with other potential buyers for the acquisition of other small complementary businesses. This competition and regulatory considerations may result in fewer acquisition opportunities. If we cannot complete acquisitions, our growth may be limited and our financial condition may be adversely affected.

Our business is dependent upon highly skilled personnel, and the loss of key personnel may have a material adverse effect on our development and results of operations.

The success of our business is dependent on our ability to attract and retain highly skilled managers and other personnel. We cannot assure you that we will be able to attract and retain the personnel necessary for the development of our business. The loss of the services of key personnel or the failure to attract additional personnel as required could have a material adverse effect on our development and results of operations. We do not currently maintain “key person” life insurance on any of our key employees.

Our principal stockholder’s interest may conflict with or differ from the interests of other holders of our securities.

Apollo and its affiliates own 35% of our fully diluted equity. Consequently, Apollo has the ability to influence the election of our directors, the appointment of new management and the potential outcome of all matters submitted to a vote of our stockholders, including entering into mergers, the sale of substantially all of our assets and other extraordinary transactions. The interests of Apollo and its affiliates could conflict with or differ from the interests of our securities holders. A sale of a substantial number of shares of our stock by Apollo could cause our stock price to decline in the future.

Our common stock price may be volatile.

Our common stock price may fluctuate in response to a number of events, including:

	•	our quarterly operating results;
	•	weather conditions that impact our highway deicing product line;
	•	future announcements concerning our business;
	•	changes in financial estimates and recommendations by securities analysts;
	•	actions of competitors;
	•	market and industry perception of our success, or lack thereof, in pursuing our growth strategy;
	•	changes in government and environmental regulation;
	•	changes and developments affecting the salt industry;
	•	general market, economic and political conditions; and
	•	natural disasters, terrorist attacks and acts of war.

We may be restricted from paying cash dividends on our common stock in the future.

We currently intend to declare and pay regular quarterly cash dividends on our common stock. Any payment of cash dividends will depend upon our financial condition, earnings, legal requirements, restrictions in our debt agreements and other factors deemed relevant by our board of directors. The terms of our senior credit facilities may restrict us from paying cash dividends on our common stock if we fail to maintain an adjusted senior indebtedness leverage ratio or if a default or event of default has occurred and is continuing under our senior credit facilities. The terms of our indentures may also restrict us from paying cash dividends on our common stock. The payment of a cash dividend on our common stock is considered a restricted payment under our indentures and we are restricted from paying any cash dividend on our common stock unless we satisfy minimum requirements with respect to our cumulative consolidated net income (plus any additional cash proceeds received upon the issuance of our common stock) and our fixed charge coverage ratio. Furthermore, we will be permitted under the terms of our debt agreements to incur additional indebtedness that may severely restrict or prohibit the payment of dividends. We cannot assure you that the agreements governing our current and future indebtedness, including our senior credit facilities, will permit us to pay dividends on our common stock.

Shares eligible for future sale may adversely affect our common stock price.

Sales of substantial amounts of our common stock in the public market, or the perception that these sales may occur, could cause the market price of our common stock to decline. This could also impair our ability to raise additional capital through the sale of our equity securities. We are authorized to issue up to 200,000,000 shares of common stock, of which approximately 30,176,027 million shares of common stock were outstanding and approximately 2,216,964 million shares of common stock were issuable upon the exercise of outstanding stock options as of December 31, 2003. We have entered into an amended and restated stock rights agreement and an investor rights agreement granting certain demand and piggyback registration rights to certain of our stockholders, including Apollo. We cannot predict the size of future issuances of our common stock or the effect, if any, that

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future sales and issuances of shares of our common stock would have on the market price of our common stock.

ITEM 2.		PROPERTIES

ITEM 3.		LEGAL PROCEEDINGS

ITEM 4.		SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

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ITEM 5.		MARKET FOR THE REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

PRICE RANGE OF COMMON STOCK

HOLDERS

DIVIDEND POLICY

EQUITY COMPENSATION PLAN INFORMATION

(c)

(b)

Number of securities

(a)

Weighted-average

remaining available for

Number of securities to

exercise price of

future issuance under

be issued upon exercise

outstanding

equity compensation plans

of outstanding options,

options, warrants

(excluding securities

Plan category

warrants and rights

and rights

reflected in column(a))

Equity compensation plans approved by security holders

2,216,964

$

1.58

543,219

Equity compensation plans not approved by security holders

—

—

—

Total

2,216,964

$

1.58

543,219

ITEM 6.		SELECTED FINANCIAL DATA

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the revisions discussed under the heading “Restatement” in Note 1 to the combined and consolidated financial statements.

							For the Year Ended December 31,
			2003				2002				2001				2000				1999
(Dollars in millions, except share data)			(restated)				(restated)				(restated)				(restated)				(restated)
Statement of Operations Data:
Sales			$	600.6			$	502.6			$	523.2			$	509.2			$	494.4
Cost of sales — shipping and handling				165.3				137.5				143.2				140.0				126.9
Cost of sales — products(1)				246.2				202.1				224.4				227.7				213.1
Depreciation and amortization(2)				42.1				37.1				32.6				44.3				55.1
Selling, general and administrative expenses				49.0				40.6				38.9				35.5				37.2
Goodwill write-down(3)				—				—				—				191.0				87.5
Restructuring and other charges(3)(4)				2.4				7.7				27.0				425.9				13.7
Operating earnings (loss)				95.6				77.6				57.1				(555.2	)			(39.1	)
Interest expense(5)				56.3				42.4				14.4				16.4				19.0
Net income (loss)				32.3				17.0				28.5				(443.5	)(8)			(74.2	)(8)
Dividends on preferred stock				1.2				10.6				0.8				—				—
Gain on redemption of preferred stock				(8.2	)			—				—				—				—
Net income (loss) available for common stock				39.3				6.4				27.7				(443.5	)(8)			(74.2	)(8)
Per Share Data:
Weighted-average common shares outstanding:
	Basic			32,492,792				35,039,110				3,220,724				498				498
	Diluted			33,983,983				35,474,539				3,220,724				498				498
Net income (loss) per share:
	Basic		$	1.21			$	0.18			$	8.60			$	(890,562.25	) (8)		$	(148,995.98	) (8)
	Diluted			1.15				0.18				8.60				(890,562.25	) (8)			(148,995.98	) (8)
Cash dividends declared per share				14.18				—				8.28				—				—
Balance Sheet Data (at period end):
Total cash and cash equivalents			$	2.6			$	11.9			$	15.9			$	0.3			$	4.3
Total assets				686.5				644.1				655.6				636.0				1,261.0	(8)
Series A redeemable preferred stock(6)				—				19.1				74.6				—				—
Total debt				603.3				507.8				526.5				152.4				196.0
Other Financial Data:
Cash flows provided by operating activities			$	69.1			$	82.4			$	112.4			$	72.1			$	78.4
Cash flows used for investing activities				(45.6	)			(19.1	)			(43.6	)			(34.0	)			(48.1	)
Cash flows used for financing activities				(36.3	)			(69.8	)			(53.7	)			(43.3	)			(33.6	)
Ratio of earnings to fixed charges(7)				1.60	x			1.67	x			3.69	x			—				—
Capital expenditures			$	20.6			$	19.5			$	43.0			$	33.7			$	45.6

(1)	“Cost of sales — products” is presented net of depreciation and amortization.
(2)	“Depreciation and amortization” for purposes of this table excludes amortization of deferred financing costs.
(3)	Based on anticipated proceeds from the sale of the Company by IMC Global, we recorded an asset impairment charge of $616.6 million, $482.1 million after tax, in the fourth quarter of 2000. In connection with this non-cash charge, goodwill was reduced $191.0 million and intangible assets — mineral interests was reduced $425.6 million. The goodwill write-down in 1999 was the result of lowering goodwill to its recoverable value based on estimated future discounted cash flows of the business.
(4)	“Restructuring and other charges” include primarily those charges related to the impairment of idled assets in December of 1998, the restructuring of our business in the fourth quarter of 1999 designed to reduce employee headcount and an asset impairment in the fourth quarter of 2000 related to the planned disposition of the Company by IMC Global as described in (3) above. During 2001, we incurred $27.0 million of transaction and transition costs in connection with the Recapitalization. During 2002, we incurred $7.7 million of transition costs in connection with separating the Company from IMC Global. All cash payments related to these charges have been made. During 2003, we incurred $2.4 million of costs related to the initial public offering. Of these costs $1.1 million remains accrued and not paid as of December 31, 2003.
(5)	As we have incurred substantial indebtedness in connection with the Recapitalization, we believe it is helpful to provide a measure describing the cash requirements necessary to satisfy our debt service in terms of “cash interest expense,” which is interest expense less non-cash interest related to the 12 3/4% senior discount notes due 2012, or the “senior discount notes,” the 12% senior subordinated discount notes due 2013, or the “subordinated discount notes,” the senior subordinated debentures issued to IMC Global in connection with the Recapitalization, or the “Seller Notes,” and the amortization of debt issuance costs, plus amortization of the original issuance premium. For a discussion of our indebtedness, see Note 8 to our audited combined and consolidated financial statements. For a discussion of the Seller Notes, see Note 11 to our audited combined and consolidated financial statements. Cash interest expense was $37.7 million and $39.6 million for the years ended December 31, 2003 and 2002, respectively. Cash interest expense is not calculated under generally accepted accounting principles, or “GAAP.” While cash interest expense and similar variations thereof are commonly used as measures of the ability to meet debt service requirements,

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	they are not necessarily comparable to other similarly titled captions of other companies due to potential inconsistencies in the method of calculation. The following table reconciles the differences between cash interest expense and interest expense, calculated in accordance with GAAP.

			For the Year Ended
			December 31,
(Dollars in millions)			2003				2002
Interest expense			$	56.3			$	42.4
Less non-cash interest expense:
	Senior discount notes			8.8				0.2
	Subordinated discount notes			7.4				—
	Seller Notes			0.2				0.8
Less (plus) amortization:
	Deferred financing costs			2.5				1.9
	Amortization of premium on senior subordinated notes			(0.3	)			(0.1	)
Cash interest expense			$	37.7			$	39.6

(6)	In connection with the Company’s initial public offering, we redeemed all of the outstanding shares of series A redeemable preferred stock on December 17, 2003 for $1.9 million (which includes an additional $0.1 million in accrued interest to the date of redemption).
(7)	For the purposes of computing the ratio of earnings to fixed charges, earnings consist of earnings before income taxes and fixed charges. Fixed charges consist of net interest expense including the amortization of deferred debt issuance costs and the interest component of our operating rents. The ratio of earnings to fixed charges prior to November 28, 2001 is not meaningful because we participated in a credit facility with IMC Global and its affiliates and the level of third-party debt was not comparable to the level of third-party debt in place upon consummation of the Recapitalization, the offering by Compass Minerals Group of an additional $75.0 million in aggregate principal amount of senior subordinated notes, or the “April 2002 senior subordinated notes,” the offering of the subordinated discount notes, the offering of the senior discount notes and the amendment to the senior credit facilities. Earnings were insufficient to cover fixed charges by approximately $572.5 million and $55.6 million, respectively, for the years ended December 31, 2000 and 1999.
(8)	The restatement for 2000 and 1999 includes adjustments to deferred income tax accounts and related valuation allowance, an adjustment in 1999 to properly account for deferred tax assets of $29.5 million previously written off in 2000, and other adjustments to income tax liabilities. For the year ended December 31, 2000, the adjustments decreased net loss and net loss available for common stock by approximately $24.2 million, a decrease to net loss per share of $48,147.25, basic and diluted. For the year ended December 31, 1999, the adjustments increased net loss and net loss available for common stock by approximately ($6.7) million, an increase to net loss per share of ($13,543.83), basic and diluted.

ITEM 7.		MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

COMPANY OVERVIEW

	•	We believe that our cash flows are not materially impacted by economic cycles due to the stable end-use markets of salt and the absence of cost-effective alternatives. Short-term cash flows are affected by the seasonality of our business and are dependent on weather conditions. See Item 1, “Business — Risk Factors — The seasonal demand for our products and the variations in our cash flows from quarter to quarter as a result of weather conditions may have an adverse effect on our results of operations and the price of our common stock.”

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	•	We operate eleven facilities in North America and the United Kingdom, including the largest rock salt mine in the world in Goderich, Ontario and the largest salt mine in the United Kingdom in Winsford, Cheshire.
	•	We believe that we are among the lowest cost rock salt producers in our markets. Our cost advantage is due to the size and quality of our reserves, effective mining techniques and efficient production processes. In addition, our salt mines in North America are located near either rail or water transport systems, thereby minimizing shipping and handling costs, which constitute a significant portion of the overall delivered cost of salt. Note 13 to our audited combined and consolidated financial statements provides additional information regarding geographical data.

Management’s Discussion on Critical Accounting Policies

We record allowances for unusable or slow moving finished goods and raw materials and supplies inventory. We adjust the value of certain inventory to the estimated market value to the extent that management’s assumptions of future demand, market or functional conditions indicate the cost basis is either in excess of market or the inventory will not be utilized or sold in future operations. If actual demand or conditions are less favorable than those projected by management, additional inventory write-downs may be required.

As of December 31, 2003, we maintained $148.0 million of net mineral interests as a part of mineral interests and other intangible assets and $7.9 million of net mineral properties as a part of property, plant and equipment.

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tions, the assigned lives may be less than that projected by management, or if the actual size, quality or recoverability of the minerals is less than that projected by management, then the rate of amortization could be increased or the value of the reserves could be reduced by a material amount.

In determining income for financial statement purposes, we must make certain estimates and judgments. These estimates and judgments occur in the calculation of certain tax liabilities and in the determination of the recoverability of certain of the deferred tax assets, which arise from temporary differences between the tax and financial statement recognition of revenue and expense. We are required to assess the likelihood that we will ultimately be able to recover our deferred tax assets. If recovery is not likely, we must increase our provision for taxes by recording a reserve, in the form of a valuation allowance, for the deferred tax assets that we estimate will not ultimately be recoverable.

We make actuarial assumptions in conjunction with our actuaries as our advisors that we believe are reasonable. These assumptions include discount rates, expected long-term rates of return on plan assets and rate of compensation increases, and are used in the calculation of the actuarial valuation of our defined benefit pension plans. If actual conditions or results vary from those projected by management, adjustments may be required in future periods to meet minimum pension funding, thereby increasing pension expense and our pension liability. Note 9 to our audited combined and consolidated financial statements provides additional information regarding pension assumptions used by us.

In connection with the Recapitalization on November 28, 2001, CMI issued $11.3 million in notes payable to IMC Global (“Seller Notes”) (see Note 11 in our combined and consolidated financial statements). Should certain threshold equity returns not have been achieved by Apollo affiliates, the Seller Notes and any accrued and unpaid interest (including any related promissory notes) could have been payable in whole or in part to Apollo affiliates rather than IMC Global.

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whole or in part, to Apollo affiliates should certain levels of equity returns not be achieved.

Other significant accounting policies not involving the same level of measurement uncertainties as those discussed above are nevertheless important to an understanding of our financial statements. Policies related to revenue recognition, environmental accruals, financial instruments and consolidation require difficult judgments on complex matters that are often subject to multiple sources of authoritative guidance. Certain of these matters are among topics currently under re-examination by accounting standards setters and regulators. Although no specific conclusions reached to date by these standard setters appear likely to cause a material change in our accounting policies, future outcomes cannot be predicted with confidence.

RESULTS OF OPERATIONS

			For the Year Ended December 31,
			2003				2002				2001
(Dollars in millions)			(restated)				(restated)				(restated)
Sales			$	600.6			$	502.6			$	523.2
Cost of sales — shipping and handling				165.3				137.5				143.2
Cost of sales — products				288.3				239.2				257.0
	Gross profit			147.0				125.9				123.0
Selling, general and administrative expenses				49.0				40.6				38.9
Restructuring and other charges				2.4				7.7				27.0
	Operating earnings			95.6				77.6				57.1
Interest expense				56.3				42.4				14.4
Other (income) expense				3.7				4.9				(3.1	)
	Income before taxes			35.6				30.3				45.8
Income tax expense				3.3				13.3				17.3
	Net income			32.3				17.0				28.5
Dividends on preferred stock				1.2				10.6				0.8
Gain on redemption of preferred stock				(8.2	)			—				—
	Net income available for common stock		$	39.3			$	6.4			$	27.7
Sales by Segment:
Salt			$	546.6			$	452.5			$	485.0
Specialty potash fertilizers				54.0				50.1				38.2
	Total		$	600.6			$	502.6			$	523.2
Sales Volumes (in thousands of tons):
Highway Deicing				9,663				7,965				9,402
General Trade				2,927				2,786				2,822
Specialty potash fertilizers				251				242				188
Average Sales Price (per ton):
Highway Deicing			$	29.25			$	27.96			$	26.87
General Trade				89.50				82.48				82.35
Specialty potash fertilizers				215.21				207.02				203.19

Year Ended December 31, 2003 Compared to the Year Ended December 31, 2002

    Sales

Sales for the year ended December 31, 2003 of $600.6 million increased $98.0 million, or 19% compared to $502.6 million for the year ended December 31, 2002. Sales include revenues from the sale of our products, or “Product Sales,” as well as pass-through shipping and handling fees charged to customers to reimburse us for shipping and handling costs incurred in delivering salt and SOP product to the customer. Such shipping and handling fees were $165.3 million during the year ended December 31, 2003, an increase of $27.8 million compared to shipping and handling fees of $137.5 million for the year ended December 31, 2002. The increase in shipping and handling-related fees for the year ended December 31, 2003 was primarily due to more tons of deicing salt and general trade salt sold in North America as compared to the same period in 2002.

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increased $67.7 million, or 21% compared to $322.3 million for the same period in 2002. This increase was primarily due to a 1,561,000 ton increase in sales volumes in our North American deicing product line combined with a 141,000 ton increase in sales volumes in our general trade product line. These increases in sales volumes impacted sales by approximately $30.3 million and $15.1 million, respectively. Also contributing to the increase in Product Sales was improved pricing in both our North American deicing product line and general trade product line of approximately $14.5 million, of which changes in foreign exchange rates totaled $9.2 million. SOP Product Sales for the year ended December 31, 2003 of $45.3 million increased $2.5 million, or 6% compared to $42.8 million for the same period in 2002 due to both improved sales volumes and pricing.

Gross profit for the year ended December 31, 2003 of $147.0 million increased $21.1 million, or 17% compared to $125.9 million for the same period in 2002. The increase in gross profit primarily reflects the impact of improved highway and consumer deicing sales volumes and improved pricing as described in the preceding paragraph.

Selling, general and administrative expenses of $49.0 million for the year ended December 31, 2003 increased $8.4 million, or 21% compared to $40.6 million for the same period in 2002. This increase primarily reflects additional compensation and variable benefit costs and higher spending on discretionary promotional and marketing costs. Additionally, changing foreign exchange rates increased selling, general and administrative expenses by $2.0 million.

In the fourth quarter of 2003, we incurred $2.4 million of costs directly related to the completion of our initial public offering. The shares of common stock sold were shares previously held by stockholders and we did not receive any proceeds from the sale of the shares. Therefore, the costs related to the initial public offering were recorded as other operating costs on our income statement. During 2002, restructuring and other charges represented transition costs that are non-recurring in nature and relate to charges required to establish us as a self-sustaining entity. We incurred $7.7 million of transition costs in the year ended December 31, 2002, consisting primarily of one-time compensation costs, costs to develop stand-alone tax and inventory strategies and costs associated with determining the post-closing purchase price adjustment. No such costs were incurred in 2003.

Interest expense for the year ended December 31, 2003 of $56.3 million increased $13.9 million compared to $42.4 million for the same period in 2002. This increase was primarily the result of higher outstanding debt balances during 2003 following the issuance of the senior discount notes in December 2002 and the subordinated discount notes in May 2003. See Note 8 to our audited combined and consolidated financial statements.

Other expense for the year ended December 31, 2003 of $3.7 million decreased $1.2 million compared to $4.9 million for the same period in 2002. In April 2002, we recorded a $5.3 million charge related to the write-off of the deferred financing costs associated with the refinancing of our term loan credit facility. In the second quarter of 2003, we recorded $1.4 million of costs related to amending our senior credit facilities and a $1.9 million gain related to the early extinguishment of debt. We also recorded non-cash foreign exchange losses and (gains) of $3.9 million and $(0.6) million in the year ended December 31, 2003 and 2002, respectively.

Income tax expense for the year ended December 31, 2003 of $3.3 million decreased $10.0 million compared to $13.3 million for the same period in 2002. This decrease was primarily due to the timing of future reversals of existing taxable temporary differences resulting in changes to required valuation allowances against deferred tax assets for NOLs, a reduction in the effective state income tax rate and a larger portion of pre-tax income being generated in the United States during the year ended December 31, 2003 than in the same period in 2002. This allowed for an increase in the amount of previously reserved NOLs to be utilized to offset U.S. taxable income. Our income tax provision differs from the U.S. statutory federal income tax rate primarily due to U.S. statutory depletion, state income taxes (net of federal tax benefit), foreign income tax rate differentials, foreign mining taxes, changes in the expected utilization of previously reserved NOLs and non-deductible interest expense on discount notes.

Dividends on our mandatorily redeemable preferred stock for the year ended December 31, 2003 of $1.2 million decreased $9.4 million compared to $10.6 million for the year ended December 31, 2002. This decrease was the result of less mandatorily redeemable preferred stock outstanding during the year ended December 31, 2003 when compared to the same period in the prior year. Approximately 78% of the then-outstanding mandatorily redeemable preferred stock was converted into senior discount notes in December 2002. Additionally, we repurchased and redeemed 14,704 shares of our mandatorily redeemable preferred stock in June 2003, and repurchased and redeemed the remaining 1,749 shares of our mandatorily redeemable preferred stock in December 2003. No shares of our mandatorily redeemable preferred stock were outstanding at December 31, 2003.

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COMPASS MINERALS INTERNATIONAL, INC.	2003 FORM 10-K

     Furthermore, beginning on July 1, 2003, dividends on our mandatorily redeemable preferred stock were accounted for as interest expense in our consolidated statements of operations in accordance with SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity.” Prior to that time, the dividends were treated as a reduction to stockholders’ equity (deficit). Such dividends included in interest expense totaled $0.1 million for the year ended December 31, 2003.

The $8.2 million gain on redemption of preferred stock resulted from the repurchase of 14,704 shares of mandatorily redeemable preferred stock in June 2003 and was treated as an increase to net income available for common stock. No such redemptions occurred in 2002. The redemption of 1,749 shares of our mandatorily redeemable preferred stock in December 2003 was at the stock’s accreted value and, therefore, did not result in any gain or loss.

Year Ended December 31, 2002 Compared to the Year Ended December 31, 2001

    Sales

Sales for 2002 of $502.6 million decreased $20.6 million, or 4% compared to $523.2 million in 2001. Sales include Product Sales as well as pass-through shipping and handling fees charged to customers to reimburse us for shipping and handling costs incurred in delivering salt and SOP product to the customer. Such shipping and handling fees were $137.5 million during 2002, a decrease of $5.7 million compared to 2001 shipping and handling fees of $143.2 million. The decline in shipping and handling-related fees during 2002 was due to fewer tons of products sold compared to 2001.

Gross profit for 2002 of $125.9 million increased $2.9 million, or 2% compared to $123.0 million for 2001. The increase in gross profit primarily reflects the $15 million resulting from the improvement in the pricing of our North American salt product lines offset by an approximate $17 million decline due to lower highway deicing sales volumes. Gross margins also increased by approximately $2 million due to the increase in SOP sales volumes partially offset by lower average prices. Lower operating costs also improved our gross margin by $4 million.

Selling, general and administrative expenses of $40.6 million for 2002 increased $1.7 million, or 4% compared to $38.9 million for 2001. The increase primarily reflects additional costs related to our transition to a stand-alone entity for services previously provided by IMC Global prior to the Recapitalization.

Transition costs are non-recurring in nature and relate to charges required to establish us as an self-sustaining entity. During 2002, we incurred $7.7 million of transition costs that were directly related to our transition from an entity controlled by IMC Global and consisted primarily of one-time compensation costs, costs to develop stand-alone tax and inventory strategies and costs associated with determining the post-closing purchase price adjustment.

Interest expense for 2002 of $42.4 million increased $28.0 million compared to $14.4 million for 2001. This increase is primarily the result of our new capital structure following the Recapitalization on November 28, 2001.

Other expense for 2002 of $4.9 million increased $8.0 million compared to other income of $3.1 million for 2001. Other income in 2001 was primarily interest income earned from IMC Global. We earned no interest income from IMC Global in 2002. Additionally, we recorded a $5.3 million loss related to refinancing our term loan credit facility in 2002.

Income tax expense for 2002 of $13.3 million decreased $4.0 million compared to $17.3 million of income tax expense for 2001 due to the timing of future reversals of existing taxable temporary differences resulting in changes to required valuation allowances against deferred tax assets for NOLs and a decline in pre-tax income partially resulting from higher interest expense following the Recapitalization. Our income tax provision differs from the United States statutory federal income tax rate primarily due to U.S. statutory depletion, state income taxes (net of federal tax benefit), foreign income

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COMPASS MINERALS INTERNATIONAL, INC.	2003 FORM 10-K

tax rate differentials, changes in the expected utilization of previously reserved NOLs, non-deductible transaction costs and foreign mining taxes.

    Historical Cash Flow

We have used cash generated from operations to meet our working capital needs and to fund capital expenditures and voluntary repayment of debt. We have historically generated stable cash flows. Our primary sources of liquidity will continue to be cash from operations and borrowings under our revolving credit facility. Due to the seasonality of our business, we expect that ongoing requirements for debt service and capital expenditures will be funded from these sources. When we cannot meet our liquidity or capital needs with cash from operations, we meet those needs with borrowings under our revolving credit facility.

Net cash flow generated by operating activities for the year ended December 31, 2003 was $69.1 million. Cash generated from operating activities includes $14.5 million used for an increase in working capital. The primary increase in working capital was an increase in receivables of $18.5 million, offset in part by decreases in inventories of $4.3 million and decreases in accounts payable and accrued expenses of $0.3 million. These changes are indicative of the seasonal nature of highway deicing product line sales with differences primarily related to changes in late December quarter sales versus the prior year.

Net cash flow generated by operating activities was $82.4 million for the year ended December 31, 2002. Of this amount, $12.7 million was generated by working capital reductions. The primary working capital reductions were increases in accounts payable and accrued expenses of $14.8 million and decreases in inventories of $3.8 million offset in part by an increase in receivables of $5.9 million. The improvement in working capital was partially due to faster collections of our receivables and the timing of interest payments. These improvements were partially offset by more severe winter weather in December 2002 than in December 2001. Additionally, in August 2002, we amended an agreement with a supplier related to the purchase of salt from the supplier’s chemical production facility. Effective with the amendment, we discontinued the purchase of salt from this supplier. We received a one-time cash payment of $8.0 million related to the amendment which terminates in December 2010. In the future we may elect to resume purchasing salt from the supplier’s facility. In that event, we would repay a ratable portion of the cash received.

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COMPASS MINERALS INTERNATIONAL, INC.	2003 FORM 10-K

tions of approximately $5.3 million, which was reflected as a non-cash add-back to net cash provided by operating activities.

Net cash flow generated by operating activities was $112.4 million for the year ended December 31, 2001. Of this amount, $50.8 million was generated by working capital reductions. The largest working capital reduction, reflective of our exposure to weather conditions, was a $36.3 million decrease in our receivables. This reduction was primarily related to more severe winter weather in December 2000 than in December 2001.

Our primary sources of liquidity will continue to be cash flow from operations and borrowings under our revolving credit facility. We expect that ongoing requirements for debt service and capital expenditures will be funded from these sources.

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COMPASS MINERALS INTERNATIONAL, INC.	2003 FORM 10-K

     On May 5, 2003, we amended our senior credit facilities to allow us to pay a dividend to be funded with either cash on hand or with borrowings under the amended and restated senior revolving credit facility. Additionally, the amendment permits us to repurchase our securities (other than the subordinated discount notes and the senior discount notes) not held by Apollo or management.

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COMPASS MINERALS INTERNATIONAL, INC.	2003 FORM 10-K

Payments Due by Period

						Less than				2–3				4–5				After 5
Contractual Cash Obligations		Total				1 Year				Years				Years				Years
Long-term Debt(a)		$	720.4			$	0.8			$	1.6			$	15.6			$	702.4
Operating Leases(b)			26.7				6.2				7.9				4.8				7.8
Unconditional Purchase Obligations(c)			64.2				8.7				17.4				17.4				20.7
Management Agreement(d)			8.0				1.0				2.0				2.0				3.0
Total Contractual Cash Obligations		$	819.3			$	16.7			$	28.9			$	39.8			$	733.9

Amount of Commitment Expiration per Period

						Less than				2–3				4–5				After 5
Other Commitments		Total				1 Year				Years				Years				Years
Revolver		$	111.6			$	—			$	—			$	111.6			$	—
Letters of Credit			9.4				9.4				—				—				—
Performance Bonds(e)			15.3				15.3				—				—				—
Total Other Commitments		$	136.3			$	24.7			$	—			$	111.6			$	—

(a)	Includes the aggregate principal amounts at maturity for the senior discount notes of $123.5 million and the subordinated discount notes of $179.6 million.
(b)	We lease property and equipment under non-cancelable operating leases for varying periods.
(c)	We have long-term contracts to purchase certain amounts of electricity and steam.
(d)	Note 11 to our audited combined and consolidated financial statements provides additional information.
(e)	Note 10 to our audited combined and consolidated financial statements provides additional information under Sales Contracts.

Sensitivity Analysis Related to EBITDA

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ments and make dividend payments in terms of EBITDA, and EBITDA adjusted for the restructuring and other charges described below, or “Adjusted EBITDA.” We believe that these non-GAAP measures can assist investors in understanding our cost structure, cash flows and financial position. In addition, the financial covenants and ratios in our senior credit facilities and our indentures, such as restrictions on payments and indebtedness and ratios relating to leverage, interest coverage and fixed charge coverage, are also tied to measures that are calculated by adjusting EBITDA as described below. We believe it is necessary to adjust EBITDA to enable investors to see how we view our business given the significant non-recurring restructuring and other charges that have historically affected our results of operations.

In connection with the initial public offering, we incurred and expensed certain non-recurring costs totaling $2.4 million that consisted of costs directly related to the initial public offering completed in December of 2003.

Following the Recapitalization, we incurred and expensed certain non-recurring costs totaling $7.7 million that consisted of transition costs required to establish us as an self-sustaining entity. The costs were directly related to the transition from an entity controlled by IMC Global and consisted primarily of one-time compensation costs, costs to develop stand-alone tax and inventory strategies and costs associated with determining the post-closing purchase price adjustment.

In connection with the Recapitalization, we expensed certain transaction and transition costs. We incurred $20.1 million of transaction costs related to activities associated with the Recapitalization (which consisted primarily of costs related to outside professional services). We also expensed $6.9 million of transition costs related to activities and other charges incurred in connection with separating us from IMC Global.

			For the Year Ended December 31,
			2003				2002				2001
			(restated)				(restated)				(restated)
Net income (loss)			$	32.3			$	17.0			$	28.5
	Income tax expense (benefit)			3.3				13.3				17.3
	Interest expense			56.3				42.4				14.4
	Depreciation and amortization			42.1				37.1				32.6
EBITDA				134.0				109.8				92.8
	Adjustments to income (loss) from operations:
	Restructuring and other charges			2.4				7.7				27.0
	Other (income) expense(1)			3.7				4.9				(3.1	)
Adjusted EBITDA			$	140.1			$	122.4			$	116.7

(1)	“Other (income) expense” primarily includes losses on early retirements of debt ($5.3 million in 2002), costs related to amending our senior credit facilities ($1.4 million in 2003), gain related to the early extinguishment of debt ($1.9 million in 2003), interest income, and non-cash foreign exchange gains and losses.

Effects of Currency Fluctuations and Inflation

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Seasonality

Recent Accounting Pronouncements

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COMPASS MINERALS INTERNATIONAL, INC.	2003 FORM 10-K

ITEM 7A.		QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

    Interest Rate Risk

As of December 31, 2003, we had $78.3 million of debt outstanding under the term loan credit facility and $14.0 million outstanding under our revolving credit facility. Both the term loan credit facility and revolving credit facility are subject to variable rates. Accordingly, our earnings and cash flows are affected by changes in interest rates. Assuming no change in the term loan credit facility borrowings at December 31, 2003, and an average level of borrowings from our revolving credit facility at variable rates, and assuming a one hundred basis point increase in the average interest rate under these borrowings, it is estimated that our interest expense for the year ended December 31, 2003 would have increased by approximately $0.9 million. Actual changes will vary from hypothetical changes.

    Foreign Currency Risk

We conduct our business primarily in the United Kingdom and North America and export some products to Europe and Southeast Asia. Our operations may, therefore, be subject to volatility because of currency fluctuations, inflation changes and changes in political and economic conditions in these countries. Sales and expenses are frequently denominated in local currencies and results of operations may be affected adversely as currency fluctuations affect our product prices and operating costs or those of our competitors. We may engage in hedging operations, including forward foreign exchange contracts, to reduce the exposure of our cash flows to fluctuations in foreign currency rates. We will not engage in hedging for speculative investment reasons. Our historical results do not reflect any foreign exchange hedging activity. There can be no assurance that our hedging operations will eliminate or substantially reduce risks associated with fluctuating currencies. See Item 1, “Business — Risk Factors — Economic and other risks associated with international sales and operations could adversely affect our business, including economic loss and a negative impact on earnings.”

    Commodity Pricing Risk: Commodity Derivative Instruments and Hedging Activities

We have reviewed various options to mitigate the impact of fluctuating natural gas prices. During 2002 and 2003, we instituted a hedging policy to mitigate the impact of fluctuations in the price of natural gas. The notional volumes hedged are based on a combination of factors including estimated natural gas usage, current market prices and historical market prices. Pursuant to our policy, we enter into contractual gas price swaps related to the purchase price of our natural gas requirements up to 36 months in advance of the physical purchase of the natural gas and hedge up to approximately 80% of our expected natural gas usage. We have determined that these financial instruments qualify as cash flow hedges under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activity,” as amended. The notional amount of natural gas swap derivative contracts outstanding at December 31, 2003 that expire in one year or less and expire greater than one year total $9.7 million and $3.2 million, respectively.

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COMPASS MINERALS INTERNATIONAL, INC.	2003 FORM 10-K

ITEM 8.		FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Description			Page
Report of Independent Registered Public Accounting Firm			36
Report of Independent Registered Public Accounting Firm			37
Consolidated Balance Sheets as of December 31, 2003 and 2002, restated			38
Combined and Consolidated Statements of Operations for the three years ended December 31, 2003, restated			39
Combined and Consolidated Statements of Stockholders’ Equity (Deficit) for the three years ended December 31, 2003, restated			40
Combined and Consolidated Statements of Cash Flows for the three years ended December 31, 2003, restated			41
Notes to Combined and Consolidated Financial Statements, restated			42

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COMPASS MINERALS INTERNATIONAL, INC.	2003 FORM 10-K

Report of Independent Registered Public Accounting Firm

In our opinion, the consolidated financial statements listed in the index appearing under Item 15(a)(1) present fairly, in all material respects, the financial position of Compass Minerals International, Inc. (formerly Salt Holdings Corporation) and its subsidiaries at December 31, 2003 and 2002, and the results of their operations and their cash flows for each of the two years in the period ended December 31, 2003 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the index appearing under Item 15(a)(2) presents fairly, in all material respects, the information set forth therein for each of the two years in the period ended December 31, 2003 when read in conjunction with the related consolidated financial statements. These financial statements and financial statement schedule are the responsibility of the Company’s management; our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. We conducted our audits of these statements in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

As described under the heading “Restatement” in Note 1, the Company has restated its consolidated financial statements for the years ended December 31, 2003 and 2002.

PricewaterhouseCoopers LLP

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COMPASS MINERALS INTERNATIONAL, INC.	2003 FORM 10-K

Report of Independent Registered Public Accounting Firm

We have audited the accompanying combined and consolidated statements of operations, stockholders’ equity (deficit), and cash flows of Compass Minerals International, Inc. (formerly Salt Holdings Corporation) for the year ended December 31, 2001. Our audit also included the financial statement schedule for the year ended December 31, 2001 listed in the Index at Item 15(a)(2). These financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audit.

/s/ Ernst & Young LLP

Kansas City, Missouri

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COMPASS MINERALS INTERNATIONAL, INC.	2003 FORM 10-K

Consolidated Balance Sheets

			December 31,
			2003				2002
(In millions, except share data)			(restated)				(restated)
Assets
Current assets:
	Cash and cash equivalents		$	2.6			$	11.9
	Receivables, less allowance for doubtful accounts of $2.1 million in 2003 and $1.6 million in 2002			117.4				94.5
	Inventories			96.7				96.5
	Other			3.7				0.7
Total current assets				220.4				203.6
Property, plant and equipment, net				262.0				263.4
Intangible assets — mineral interests and other, net				172.7				149.8
Other				31.4				27.3
Total assets			$	686.5			$	644.1
Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
	Current portion of long-term debt		$	0.8			$	1.2
	Accounts payable			72.6				62.3
	Accrued expenses			14.4				9.1
	Accrued interest			12.7				12.6
	Accrued salaries and wages			13.5				12.6
	Income taxes payable			—				4.8
Total current liabilities				114.0				102.6
Long-term debt, net of current portion				602.5				503.3
Notes due to related parties, including accrued interest				—				3.3
Deferred income taxes				61.7				72.6
Other noncurrent liabilities				36.4				41.0
Commitments and contingencies (Notes 10 and 11)
Redeemable preferred stock, issued and outstanding shares — zero at December 31, 2003 and 16,462 at December 31, 2002				—				19.1
Stockholders’ equity (deficit):
	Common Stock:
	$0.01 par value, authorized shares — 200,000,000 at December 31, 2003 and 47,331,869 at December 31, 2002; issued shares — 35,367,264 at December 31, 2003 and 35,103,830 at December 31, 2002			0.3				0.3
	Additional paid in capital			14.6				81.5
	Treasury stock at cost — 5,191,237 shares at December 31, 2003 and zero shares at December 31, 2002			(9.7	)			—
	Accumulated deficit			(158.8	)			(179.7	)
	Accumulated other comprehensive income			25.5				0.1
Total stockholders’ equity (deficit)				(128.1	)			(97.8	)
Total liabilities and stockholders’ equity (deficit)			$	686.5			$	644.1

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Combined and Consolidated Statements of Operations

			For the Years Ended December 31,
			2003				2002				2001
(In millions, except share data)			(restated)				(restated)				(restated)
Sales			$	600.6			$	502.6			$	523.2
Cost of sales — shipping and handling				165.3				137.5				143.2
Cost of sales — products				288.3				239.2				257.0
	Gross profit			147.0				125.9				123.0
Selling, general and administrative expenses				49.0				40.6				38.9
Restructuring and other charges				2.4				7.7				27.0
	Operating earnings			95.6				77.6				57.1
Other (income) expense:
	Interest expense			56.3				42.4				14.4
	Other, net			3.7				4.9				(3.1	)
	Income before income taxes			35.6				30.3				45.8
Income tax expense				3.3				13.3				17.3
	Net income			32.3				17.0				28.5
Dividends on redeemable preferred stock				1.2				10.6				0.8
Gain on redemption of preferred stock				(8.2	)			—				—
	Net income available for common stock		$	39.3			$	6.4			$	27.7
Net income per share, basic			$	1.21			$	0.18			$	8.60
Net income per share, diluted				1.15				0.18				8.60
Basic weighted-average shares outstanding				32,492,792				35,039,110				3,220,724
Diluted weighted-average shares outstanding				33,983,983				35,474,539				3,220,724

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COMPASS MINERALS INTERNATIONAL, INC.	2003 FORM 10-K

Combined and Consolidated Statements of Stockholders’ Equity (Deficit)

			For the Years Ended December 31, 2003, 2002 and 2001 (restated)
							Additional												Accumulated Other
			Common				Paid In				Treasury				Accumulated				Comprehensive
(In millions)			Stock				Capital				Stock				Excess (Deficit)				Income (Loss)				Total
Balance, December 31, 2000			$	—			$	915.2			$	—			$	(624.5	)		$	1.1			$	291.8
Comprehensive income:
	Net income															45.5								45.5
	Cumulative translation adjustments																			(3.2	)			(3.2	)
	Comprehensive income																							42.3
Capital contribution from IMC								82.0																82.0
Dividend to IMC and affiliates																(71.1	)							(71.1	)
Balance, November 27, 2001			$	—			$	997.2			$	—			$	(650.1	)		$	(2.1	)		$	345.0
Balance, November 28, 2001			$	—			$	—			$	—			$	—			$	—			$	—
Contribution of IMCI net assets to CMI (Note 1)				282.1				(10.8	)															271.3
Capital contribution								0.5																0.5
Other								0.9																0.9
Redemption and cancellation of stock held by IMC				(281.8	)			78.0								(179.7	)							(383.5	)
Dividends on preferred stock								(0.8	)															(0.8	)
Comprehensive loss:
	Net loss															(17.0	)							(17.0	)
	Unfunded pension losses, net of tax																			(5.4	)			(5.4	)
	Cumulative translation adjustments																			3.0				3.0
	Comprehensive loss																							(19.4	)
Balance, December 31, 2001				0.3				67.8				—				(196.7	)			(2.4	)			(131.0	)
Dividends on preferred stock								(10.6	)															(10.6	)
Other								1.1																1.1
Comprehensive income:
	Net income															17.0								17.0
	Unfunded pension losses, net of tax																			(6.5	)			(6.5	)
	Unrealized gain on cash flow hedges, net of tax																			0.1				0.1
	Cumulative translation adjustments																			8.9				8.9
	Comprehensive income																							19.5
Capital contributions								23.2																23.2
Balance, December 31, 2002				0.3				81.5				—				(179.7	)			0.1				(97.8	)
Dividends on preferred stock								(1.2	)															(1.2	)
Gain on redemption of preferred stock																8.2								8.2
Dividends on common stock								(80.4	)							(19.6	)							(100.0	)
Treasury stock purchase												(9.7	)											(9.7	)
Stock options exercised								0.6																0.6
Comprehensive income:
	Net income															32.3								32.3
	Unfunded pension adjustment, net of tax																			4.9				4.9
	Unrealized gain on cash flow hedges, net of tax																			0.7				0.7
	Cumulative translation adjustments																			19.8				19.8
	Comprehensive income																							57.7
Capital contributions								14.1																14.1
Balance, December 31, 2003			$	0.3			$	14.6			$	(9.7	)		$	(158.8	)		$	25.5			$	(128.1	)

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COMPASS MINERALS INTERNATIONAL, INC.	2003 FORM 10-K

Combined and Consolidated Statements of Cash Flows

					For the Years Ended December 31,
					2003				2002				2001
(In millions)					(restated)				(restated)				(restated)
Cash flows from operating activities:
	Net income				$	32.3			$	17.0			$	28.5
	Adjustments to reconcile net income (loss) to net cash flows provided by operating activities:
		Depreciation, depletion and amortization				42.1				37.1				32.6
		Finance fee amortization				2.2				1.9				0.2
		Loss/(gain) on early extinguishment of long-term debt				(1.9	)			5.3				—
		Restructuring charge and other charges, net of cash				—				1.1				1.4
		Accreted interest				16.7				1.1				—
		Deferred income taxes				(4.7	)			—				(1.3	)
		Loss on disposal of property, plant and equipment				0.3				0.2				0.2
		Other				0.3				—				—
		Changes in operating assets and liabilities:
			Receivables			(18.5	)			(5.9	)			36.3
			Inventories			4.3				3.8				(20.9	)
			Other assets			(4.0	)			0.6				1.8
			Accounts payable and accrued expenses			(0.3	)			14.8				3.8
			Due to IMC and affiliates			—				—				32.1
			Other noncurrent liabilities			0.3				5.4				(2.3	)
Net cash provided by operating activities						69.1				82.4				112.4
Cash flows from investing activities:
	Capital expenditures					(20.6	)			(19.5	)			(43.0	)
	Proceeds from sales of property, plant and equipment					0.1				0.6				0.2
	Acquisition of intangible assets					(24.8	)			—				—
	Other					(0.3	)			(0.2	)			(0.8	)
Net cash used in investing activities						(45.6	)			(19.1	)			(43.6	)
Cash flows from financing activities:
	Proceeds from issuance of long-term debt					100.0				78.4				475.0
	Principal payments on long-term debt, including capital leases					(31.1	)			(115.9	)			(66.2	)
	Revolver activity					14.0				(39.8	)			35.4
	Payments of notes due to related parties					(1.5	)			—				—
	Payments from (to) IMC and affiliates, net					—				—				(81.1	)
	Dividend to IMC and affiliates					—				—				(398.8	)
	Dividends paid					(103.7	)			—				—
	Repurchase of preferred stock					(8.5	)			—				—
	Payments to acquire treasury stock					(9.7	)			—				—
	Proceeds from stock option exercises					0.4				—				—
	Deferred financing costs					(5.0	)			(6.3	)			(18.0	)
	Capital contributions					8.8				12.8				—
	Other					—				1.0				—
Net cash used in financing activities						(36.3	)			(69.8	)			(53.7	)
Effect of exchange rate changes on cash and cash equivalents						3.5				2.5				0.5
Net increase (decrease) in cash and cash equivalents						(9.3	)			(4.0	)			15.6
Cash and cash equivalents, beginning of year						11.9				15.9				0.3
Cash and cash equivalents, end of year					$	2.6			$	11.9			$	15.9
Supplemental cash flow information:
	Interest paid excluding capitalized interest				$	36.9			$	29.4			$	15.4
	Income taxes paid, net of refunds and indemnification					8.4				10.4				14.8
Supplemental disclosure of noncash activities:
	Dividends to IMC and affiliates				$	—			$	—			$	44.4
	Capital contributions from IMC and affiliates					—				—				261.1
	Issuance of notes due to related parties related to stock redemption					—				—				11.4
	Preferred stock dividends accrued not paid					—				10.6				0.8
	Retirement of notes plus accrued interest due to related parties					—				9.0				—

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COMPASS MINERALS INTERNATIONAL, INC.	2003 FORM 10-K

Notes to Combined and Consolidated Financial Statements

	•	NAMSCO Inc. (“NAMSCO”) and subsidiaries

	•	North American Salt Company (“NASC”)
	•	Carey Salt Company
	•	Sifto Canada Inc. (“Sifto”)

	•	GSL Corporation and subsidiary (“GSL”)

	•	Great Salt Lake Minerals Corporation

	•	Compass Minerals (Europe) Limited (“CMGE”) and subsidiaries

	•	Compass Minerals (UK) Limited
	•	Salt Union Limited U.K. (“SUL”) and subsidiaries

     CMG has been a wholly owned subsidiary of CMI since CMI’s acquisition of the Company on November 28, 2001. CMG was a wholly owned subsidiary of IMC since IMC’s acquisition of IMCI on April 1, 1998. Those subsidiaries of IMCI as listed above (prior to the Recapitalization described below) and other immaterial subsidiaries have been included in the combined financial statements for periods prior to the Recapitalization.

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differences (deferred tax liabilities) should have been considered as a possible source of taxable income when evaluating the need for a valuation allowance against deferred tax assets. Upon consideration of the reversal of these existing taxable temporary differences, the Company has now determined that it had overstated its deferred tax asset valuation allowance and, thereby, understated its deferred tax assets.

Cumulative increase to deferred income tax assets and increase to stockholders’ equity at January 1, 2001		$	3.3
Decrease in income tax expense and increase in net income and net income available for common stock for the year ended December 31, 2001 (Net income per share, $2.95 basic and diluted)			9.5
Increase in income tax expense and decrease in net income and net income available for common stock for the year ended December 31, 2002 (Net income per share, ($0.06) basic and ($0.05) diluted)			(1.9	)
Decrease in income tax expense and increase in net income and net income available for common stock for the year ended December 31, 2003 (Net income per share, $0.16 basic and $0.14 diluted)			5.1

     The following tables present (in millions, except share data) the impact of the restatement on the combined and consolidated statements of operations, the consolidated balance sheets, and combined and consolidated statements of cash flows. The amounts previously reported are derived from the Company’s original annual report on Form 10-K for the year ended December 31, 2003 filed March 19, 2004 with the Securities and Exchange Commission (“SEC”).

			For the year ended								For the year ended								For the year ended
			December 31, 2003								December 31, 2002								December 31, 2001
			Amounts								Amounts								Amounts
			previously				As				previously				As				previously				As
			reported				restated				reported				restated				reported				restated
Combined and consolidated statements of operations:
	Income before income taxes		$	35.6			$	35.6			$	30.3			$	30.3			$	45.8			$	45.8
	Income tax expense			8.4				3.3				11.4				13.3				26.8				17.3
	Net income			27.2				32.3				18.9				17.0				19.0				28.5
	Net income available for common stock			34.2				39.3				8.3				6.4				18.2				27.7
	Net income per share, basic		$	1.05			$	1.21			$	0.24			$	0.18			$	5.65			$	8.60
	Net income per share, diluted			1.01				1.15				0.23				0.18				5.65				8.60

			December 31, 2003								December 31, 2002
			Amounts								Amounts
			previously				As				previously				As
			reported				restated				reported				restated
Consolidated balance sheets:
	Deferred income taxes		$	77.7			$	61.7			$	83.5			$	72.6
	Accumulated deficit			(174.8	)			(158.8	)			(190.6	)			(179.7	)
	Total stockholders’ equity (deficit)			(144.1	)			(128.1	)			(108.7	)			(97.8	)

			For the year ended								For the year ended								For the year ended
			December 31, 2003								December 31, 2002								December 31, 2001
			Amounts								Amounts								Amounts
			previously				As				previously				As				previously				As
			reported				restated				reported				restated				reported				restated
Combined and consolidated statements of cash flows:
	Net income		$	27.2			$	32.3			$	18.9			$	17.0			$	19.0			$	28.5
	Deferred income taxes			0.4				(4.7	)			(1.9	)			—				8.2				(1.3	)
	Net cash provided by operating activities			69.1				69.1				82.4				82.4				112.4				112.4

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2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

b. Basis of Combination/ Consolidation: The Company’s combined and consolidated financial statements include the accounts of the Company, which include the domestic and foreign subsidiaries discussed in Note 1. The Company’s financial statements have been combined through the Recapitalization date and consolidated thereafter. All significant intercompany balances and transactions have been eliminated.

c. Foreign Currency Translation: Assets and liabilities are translated into U.S. dollars at end of period exchange rates. Revenues and expenses are translated using the average rates of exchange for the year. Adjustments resulting from the translation of foreign-currency financial statements into the reporting currency, U.S. dollars, are included in accumulated other comprehensive income (loss). Exchange gains and losses from transactions denominated in a currency other than a company’s functional currency are included in income.

d. Revenue Recognition: The Company sells mineral products, primarily salt and SOP. Revenue is recognized by the Company at the time of shipment to the customer, which coincides with the transfer of title and risk of ownership to the customer. Sales represent billings to customers net of sales taxes charged for the sale of the product. Sales include shipping and handling costs which are expensed when the related product is sold.

e. Cash and Cash Equivalents: The Company considers all investments with original maturities of three months or less to be cash equivalents. The Company maintains the majority of its cash in bank deposit accounts with several commercial banks with high credit ratings in the U.S., Canada and Europe. The Company does not believe it is exposed to any significant credit risk on cash and cash equivalents.

f. Inventories: Inventories are stated at the lower of cost or market. Finished goods costs are determined by the average cost method. Raw materials and supply costs are determined by either the first-in, first-out (“FIFO”) or the average cost method. Raw materials and supplies primarily consist of raw materials purchased to aid in the production of our mineral products, maintenance materials and packaging materials. Finished goods are comprised of salt and SOP products readily available for sale. All costs associated with the production of salt and SOP at our producing locations are captured as inventory costs. Additionally, since our products are often stored at third-party warehousing locations, we include in the cost of inventory the freight and handling costs necessary to move the product to storage until the product is sold to a customer.

g. Property, Plant and Equipment: Tangible property, plant and equipment, including assets under capital leases, are stated at cost and include interest on funds borrowed to finance construction. The costs of replacements or renewals which improve or extend the life of existing property are capitalized. Maintenance and repairs are expensed as incurred. Upon retirement or disposition of an asset, any resulting gain or loss is included in results from operations.

Land improvements			5 to 25 years
Buildings and improvements			10 to 40 years
Machinery and equipment			3 to 25 years
Furniture and fixtures			3 to 10 years
Mineral properties			20 to 30 years

     To review for possible impairments, the Company uses methodology prescribed in Statement of Financial Accounting Standards (SFAS) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” The Company reviews long-lived assets and the related intangible assets for impairment whenever events or changes in circumstances indicate the carrying amounts of such assets may not be recoverable. Once an indication of a potential impairment exists, recoverability of the respective assets is determined by comparing the forecasted undiscounted net cash flows of the operation to which the assets relate, to the carrying amount, including associated intangible assets, of such operation. If the operation is determined to be unable to recover the carrying amount of its assets, then intangible assets are written down first, followed by the other long-lived assets of the operation, to fair value. Fair value is determined based on discounted cash flows or appraised values, depending upon the nature of the assets.

h. Mineral Interests: Mineral interests include probable mineral reserves. The Company leases mineral reserves at several of its extraction facilities. These leases have varying terms, and many provide for a royalty payment to the lessor based on a specific amount per ton of mineral extracted or as a percentage of revenue. Pursuant to SFAS No. 141, “Business Combinations” (“SFAS No. 141”), and SFAS No. 142, “Goodwill and Other Intangible Assets” (“SFAS No. 142”), mineral interests associated with other than owned properties are classified as intangible assets. Probable mineral reserves are amortized on a units-of-production basis over the respective

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estimated mine lives not to exceed 99 years. The weighted average amortization period for probable mineral reserves is 93 years as of December 31, 2003. The Company’s rights to extract minerals are contractually limited by time. However, the Company believes it will be able to continue to extend lease agreements, as it has in the past, at commercially reasonable terms, without incurring substantial costs or incurring material modifications to the existing lease terms and conditions, and therefore, believes that the assigned lives are appropriate.

i. Other Intangible Assets: The Company follows the rules on accounting for intangible assets as set forth in SFAS No. 142. Under these rules, intangible assets deemed to have indefinite lives are not amortized but are subject to annual impairment tests in accordance with the Statements. Other intangible assets are amortized over their estimated useful lives that range from 5 to 25 years.

j. Other Noncurrent Assets: Other noncurrent assets include deferred financing costs of $19.5 million and $16.9 million net of accumulated amortization of $4.2 million and $1.9 million as of December 31, 2003 and 2002, respectively. Deferred financing costs are being amortized on a straight-line basis over the terms of the debt to which the costs relate and the related amortization is recorded as interest expense.

k. Income Taxes: The Company’s U.S. subsidiaries participated in the consolidated federal income tax return of IMC for periods owned by IMC. The foreign subsidiaries file separate-company returns in their respective jurisdictions. For financial reporting purposes, while owned by IMC, the Company computed a provision for income taxes on a stand alone basis. The Company accounts for income taxes using the liability method in accordance with the provisions of SFAS No. 109, Accounting for Income Taxes. Under the liability method, deferred taxes are determined based on the differences between the financial statement and the tax basis of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse.

l. Environmental Costs: Environmental costs, other than those of a capital nature, are accrued at the time the exposure becomes known and costs can reasonably be estimated. Costs are accrued based upon management’s estimates of all direct costs, after taking into account reimbursement by third parties. The Company does not accrue liabilities for unasserted claims that are not probable of assertion and the Company does not provide for environmental clean-up costs, if any, at the end of the useful lives of its facilities, since it is not practical to estimate such costs due to the long lives of the Company’s mineral deposits. The Company’s environmental accrual was $2.3 million and $2.0 million as of December 31, 2003 and 2002, respectively.

m. Asset Retirement Obligations: The Company adopted SFAS No. 143, “Accounting for Obligations Associated with the Retirement of Long-Lived Assets” on January 1, 2003. The Company recognizes and measures obligations related to the retirement of tangible long-lived assets. The retirement obligation must be one that results from the acquisition, construction or normal operation of the long-lived asset. The legal obligation associated with the retirement of a tangible long-lived asset is recognized at fair value as a liability when incurred and the cost is capitalized by increasing the carrying amount of the related long-lived asset. The adoption of SFAS No. 143 did not have a material impact on the Company’s financial position, results of operations or cash flows.

n. Stock Options: CMI has a stock option plan that was adopted on November 28, 2001 (see Note 15, Stockholders’ Equity and Stock Options). Prior to the fourth quarter of 2003, the Company accounted for its stock-based employee compensation plan under the recognition and measurement provisions of Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued to Employees,“and related interpretations. No stock-based employee compensation expense for stock options was reflected in net income for the years ended December 31, 2002 and 2001, as all stock options granted under the plan had an exercise price equal to the fair market value of the underlying common stock on the date of grant. During the fourth quarter of 2003, the Company adopted the preferable fair value recognition provisions of SFAS No. 123, “Accounting for Stock-Based Compensation.” The Company selected the prospective method of adoption described in SFAS No. 148, “Accounting for Stock-Based Compensation — Transition and Disclosure.” Under the prospective method, all options granted or modified after January 1, 2003 are accounted for under the fair value method retroactively effective as of January 1, 2003.

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COMPASS MINERALS INTERNATIONAL, INC.	2003 FORM 10-K

been applied to all outstanding and unvested awards for the years ended December 31 (in millions, except for share data):

			2003				2002				2001
			(restated)				(restated)				(restated)
Net income available for common stock, as reported			$	39.3			$	6.4			$	27.7
Add: Stock-based compensation expense included in reported net income, net of related tax effects				0.2				—				—
Deduct: Total stock-based compensation expense determined under fair value based method for all awards, net of related tax effects				(0.2	)			(0.3	)			—
Pro forma net income available for common stock			$	39.3			$	6.1			$	27.7
Earnings per share:
	Basic — as reported		$	1.21			$	0.18			$	8.60
	Basic — pro forma			1.21				0.17				8.60
	Diluted — as reported			1.15				0.18				8.60
	Diluted — pro forma			1.15				0.17				8.60

		2003				2002				2001
Fair value of options granted		$	10.98			$	2.11			$	2.01
Expected lives (years)			7.8				7.8				8.0
Expected volatility*			—				—				—
Dividend yield			—				—				—
Risk-free interest rates			3.4	%			4.9	%			4.3	%

*	Under the minimum value method, volatility was excluded.

o. Earnings per Share: Basic and diluted earnings per share are presented for net income available for common stock. Basic earnings per share is computed by dividing net income available for common stock by the weighted-average number of outstanding common shares during the period. Diluted earnings per share reflects the potential dilution that could occur under the treasury stock method of calculating the weighted-average number of outstanding common shares (i.e. assuming proceeds from the potential exercise of employee stock options are used to repurchase common stock).

p. Derivatives: The Company accounts for derivative financial instruments in accordance with SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” as amended, which requires companies to record derivative financial instruments as assets or liabilities measured at fair value. SFAS No. 133 further requires that changes in the derivative’s fair value be recognized currently in earnings unless specific hedge accounting criteria are met. Accounting for qualifying hedges allows a derivative’s gains and losses to offset related results from the hedged item on the income statement. Companies must formally document, designate, and assess the effectiveness of transactions that receive hedge accounting.

q. Concentration of Credit Risk: The Company sells its salt products to various governmental agencies, manufacturers, distributors and retailers primarily in the Midwestern United States, and throughout Canada and the United Kingdom. The Company’s potash products are sold across North America and internationally. No single customer or group of affiliated customers accounted for more than 10% of the Company’s sales in any year during the three year period ended December 31, 2003, or for more than 10% of accounts receivable at December 31, 2003 or 2002.

r. Recent Accounting Pronouncements: In July 2002, the FASB issued SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities.” This Statement addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies EITF Issue No. 94-3, “Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring).” This Statement requires that a liability for costs associated with an exit or disposal activity be recognized when the liability is incurred. The Company adopted SFAS No. 146 in the first quarter of 2003 as the provisions of this Statement are effective for exit or disposal activities initiated after December 31, 2002. The adoption of SFAS No. 146 did not have a material impact on the Company’s financial position, results of operations or cash flows.

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tics of both liabilities and equity. It required that an issuer classify a financial instrument that is within its scope as a liability. Many of those instruments were previously classified as equity. In the Company’s third quarter, it adopted the new rules on accounting for its mandatorily redeemable preferred stock as set forth in SFAS No. 150. The adoption of this statement required the reclassification of the Company’s mandatorily redeemable preferred stock to noncurrent liabilities in its consolidated balance sheet and to account for dividends declared after July 1, 2003 on this financial instrument as interest expense in its consolidated statement of operations. The noncurrent liability was subsequently repaid in December 2003.

s. Reclassifications: Certain reclassifications were made to prior-year amounts in order to conform with the current year’s presentation.

3.    ASSET IMPAIRMENT, RESTRUCTURING AND OTHER CHARGES

In the fourth quarter of 2003, we incurred $2.4 million of costs directly related to the completion of the Company’s initial public offering.

Following the Recapitalization, the Company incurred and expensed certain non-recurring costs totaling $7.7 million that consist of transition costs required to establish the Company as an independent entity. The costs were directly related to the transition from an entity controlled by IMC and consisted primarily of one-time compensation costs, costs to develop stand-alone tax and inventory strategies, and costs associated with determining the post-closing purchase price adjustment.

In connection with the Recapitalization, the Company expensed certain costs totaling $27.0 million which consist of transaction and transition costs. The transaction costs were directly related to the acquisition and consisted primarily of outside professional services. Below is a more detailed description of such costs:

     (1) $20.1 million of transaction costs related to activities associated with the sale and Recapitalization, including approximately $6.4 million in legal fees and other fees, and $13.7 million in financial services and advice.

     (2) $6.9 million of transition costs, the majority of which related to retention, recruiting, systems design and migration and other activities and charges related to separating CMG from IMC, as well as charges for legal costs and other asset write-offs associated with CMG’s new strategic direction.

4.    INVENTORIES

		2003				2002
Finished goods		$	84.1			$	83.5
Raw materials and supplies			12.6				13.0
		$	96.7			$	96.5

5.    PROPERTY, PLANT AND EQUIPMENT

		2003				2002
Land and buildings		$	135.9			$	128.4
Machinery and equipment			408.3				375.7
Furniture and fixtures			9.6				9.9
Mineral properties and rights			20.3				18.2
Construction in progress			6.5				13.5
			580.6				545.7
Less accumulated depreciation			318.6				282.3
		$	262.0			$	263.4

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COMPASS MINERALS INTERNATIONAL, INC.	2003 FORM 10-K

6.    MINERAL INTERESTS AND OTHER INTANGIBLE ASSETS

		2003												2002
		Gross												Gross
		Carrying				Accumulated				Net Book				Carrying				Accumulated				Net Book
		Value				Amortization				Value				Value				Amortization				Value
Probable mineral reserves		$	158.6			$	10.6			$	148.0			$	158.6			$	8.8			$	149.8
SOP long-term customer contract			0.5				—				0.5				—				—				—
Other SOP intangible asset			24.3				0.1				24.2				—				—				—
			183.4				10.7				172.7				158.6				8.8				149.8

7.    INCOME TAXES

				2003				2002				2001
				restated				restated				restated
Current:
	Federal			$	0.6			$	—			$	5.9
	State				0.2				1.3				0.8
	Foreign				7.2				12.0				11.9
		Total current			8.0				13.3				18.6
Deferred:
	Federal				(4.8	)			(1.3	)			(2.3	)
	State				(3.2	)			(0.4	)			0.4
	Foreign				3.3				1.7				0.6
		Total deferred			(4.7	)			—				(1.3	)
Total provision for income taxes				$	3.3			$	13.3			$	17.3

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     The following table summarizes components of income before taxes and the effects of significant adjustments to tax computed at the federal statutory rate for the years ended December 31 (in millions):

		2003				2002				2001
		restated				restated				restated
Domestic income		$	15.3			$	8.4			$	22.2
Foreign income			20.3				21.9				23.6
Income before income taxes		$	35.6			$	30.3			$	45.8
Computed tax at the federal statutory rate of 35%		$	12.5			$	10.6			$	16.1
Foreign income, mining, and withholding taxes			3.5				6.0				3.0
Foreign exchange gain			—				—				2.6
Percentage depletion in excess of basis			(5.1	)			(1.9	)			(2.9	)
State income taxes, net of federal income tax benefit			(3.2	)			0.6				1.1
Restructuring and other charges			—				—				6.8
Change in valuation allowance on deferred tax assets			(5.7	)			(1.0	)			(7.7	)
Non-deductible interest expense			0.8				—				—
Other			0.5				(1.0	)			(1.7	)
Income tax expense		$	3.3			$	13.3			$	17.3
Effective tax rate			9%				44%				38%

			2003				2002
			restated				restated
Deferred tax liabilities:
	Property, plant and equipment		$	90.5			$	99.2
Total deferred tax liabilities				90.5				99.2
Deferred tax assets:
	Net operating loss carryforwards			32.6				39.0
	Alternative minimum tax credit carryforwards			3.0				2.4
	Interest on discount notes			5.2				—
	Other assets			12.8				15.7
	Subtotal			53.6				57.1
	Valuation allowance			(24.8	)			(30.5	)
Total deferred tax assets				28.8				26.6
Net deferred tax liabilities			$	61.7			$	72.6

8.    LONG-TERM DEBT

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to Rule 144A under the Securities Act of 1933. The proceeds from the issuance of the Notes were used to finance the Recapitalization and certain related costs. Interest on the Notes is payable semi-annually in cash on each February 15 and August 15. The Notes may be redeemed in whole or in part from time to time, on or after August 15, 2006, at specified redemption prices. The Company’s domestic restricted subsidiaries as of the issue date are the guarantors of the Notes, with restricted net assets of $341.1 million at December 31, 2003.

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COMPASS MINERALS INTERNATIONAL, INC.	2003 FORM 10-K

Senior Discount Notes to amend the indenture governing the Senior Discount Notes in order to permit the distribution of the proceeds from the offering of the Subordinated Discount Notes to the Company’s stockholders.

		2003				2002
Senior Subordinated Notes		$	325.0			$	325.0
Senior Discount Notes			75.7				66.9
Subordinated Discount Notes			107.4				—
Term Loan			78.3				109.3
Revolving Credit Facility			14.0				—
Other, including capital lease obligations			—				0.1
			600.4				501.3
Plus premium on Senior Subordinated Notes, net			2.9				3.2
Less current portion			(0.8	)			(1.2	)
		$	602.5			$	503.3

2004		$	0.8
2005			0.8
2006			0.8
2007			0.8
2008			14.8
Thereafter			702.4
		$	720.4

9.    PENSION PLANS AND OTHER BENEFITS

		Plan Assets at
		December 31,
Asset Category		2003				2002
Cash and cash equivalents			1%				1%
Equity Securities			76				78
Debt Securities			23				21
Total			100%				100%

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each asset category. The Company assumed that 75% of its portfolio would be invested in equity securities, with the remainder invested in debt securities.

		Future
		Expected
		Benefit
Calendar Year		Payments
2004			$1.6
2005			1.5
2006			1.3
2007			1.4
2008			1.4
2009 - 2013			8.5

     The following table sets forth pension obligations and plan assets for the Company’s defined benefit plans, based on a November 30 measurement date for 2003 and a September 30 measurement date for 2002, as of December 31 (in millions):

		2003				2002
Change in benefit obligation:
Benefit obligation as of January 1		$	56.2			$	44.4
Service cost			1.4				1.2
Interest cost			2.9				2.6
Transfer in from IMC			—				2.2
Actuarial (gain) loss			(3.3	)			1.6
Benefits paid			(1.4	)			(1.1	)
Currency fluctuation adjustment			5.9				5.2
Other			0.1				0.1
Benefit obligation as of December 31		$	61.8			$	56.2
Change in plan assets:
Fair value as of January 1		$	35.0			$	34.2
Actual return			6.4				(4.7	)
Company contributions			1.5				1.1
Transfer in from IMC			—				2.3
Currency fluctuation adjustment			4.4				3.1
Benefits paid			(1.4	)			(1.1	)
Other			0.1				0.1
Fair value as of December 31		$	46.0			$	35.0
Funded status of the plans		$	(15.8	)		$	(21.2	)
Unrecognized net (gain) loss			13.6				20.5
Unrecognized transition liability			0.4				0.4
Net amount recognized		$	(1.8	)		$	(0.3	)
Amounts recognized in the balance sheet:
Prepaid (accrued) benefit cost		$	(0.2	)		$	(0.3	)
Accrued benefit liability			(12.0	)			(17.4	)
Other noncurrent assets			0.4				0.4
Accumulated other comprehensive loss			10.0				17.0
Net amount recognized		$	(1.8	)		$	(0.3	)

		2003				2002				2001
Service cost for benefits earned during the year		$	1.4			$	1.2			$	1.1
Interest cost on projected benefit obligation			2.9				2.6				2.3
Return on plan assets			(2.2	)			(2.4	)			(3.0	)
Net amortization and deferral			1.1				0.5				0.1
Net pension expense		$	3.2			$	1.9			$	0.5

     The Company has defined contribution and pre-tax savings plans (Savings Plans) for certain of its employees. Under each of the Savings Plans, participants are permitted to defer a portion of their compensation. Company contributions to the Savings Plans are based on a percentage of employee contributions. Additionally, certain of the Company’s Savings Plans have a profit sharing feature for salaried and non-union hourly employees. The Company contribution to the profit-sharing feature is based on the employee’s age and pay and the Company’s financial performance. Expense attributable to these Savings Plans was $4.1 million, $3.3 million and $2.9 million for the years ended December 31, 2003, 2002 and 2001, respectively.

10.		COMMITMENTS AND CONTINGENCIES

Leases: The Company leases certain property and equipment under non-cancelable operating leases for varying periods. The aggregate future minimum annual rentals under lease arrangements as of December 31, 2003, are as follows (in millions):

		Operating
Calendar Year		Leases
2004		$	6.2
2005			4.5
2006			3.4
2007			3.0
2008			1.8
Thereafter			7.8
		$	26.7

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     Rental expense, net of sublease income, was $8.2 million, $8.1 million and $7.7 million for the years ended December 31, 2003, 2002 and 2001, respectively.

Royalties: The Company has various private, state and Canadian provincial leases associated with the salt and specialty potash businesses. Royalty expense related to these leases was $5.8 million, $4.5 million and $5.3 million for the years ended December 31, 2003, 2002 and 2001, respectively.

Sales Contracts: The Company has various salt and other deicing-product sales contracts that include performance provisions governing delivery and product quality. These sales contracts either require the Company to maintain performance bonds for stipulated amounts or contain contractual penalty provisions in the event of non-performance. For the three years ended December 31, 2003, the Company has had no material penalties related to these sales contracts. At December 31, 2003, the Company had approximately $15.3 million of outstanding performance bonds.

Purchase Commitments: In connection with the operations of the Company’s facilities, the Company purchases electricity, steam, other raw materials and services from third parties under existing contracts, extending, in some cases, for multiple years. Purchases under these contracts are generally based on prevailing market prices. The Company’s future minimum long-term purchase commitments are approximately $8.7 million annually from 2004 to 2008 and approximately $20.7 million in total, thereafter.

Environmental Matters: At December 31, 2003 and 2002, the Company has recorded accruals of $2.3 million and $2.0 million, respectively, for estimated future costs associated with existing environmental exposures at certain of its facilities. The Company estimates that a significant portion of these accruals will be used over the next five years.

Purchase Agreement: During 2002, the Company amended an agreement with a supplier related to the purchase of salt from the supplier’s chemical production facility in Tennessee. The Company has received a one-time cash payment of $8.0 million related to the amendment. In 2002, the Company recognized $0.6 million as a net reduction to cost of sales in the Consolidated Statement of Operations resulting from recognition of a ratable portion of the cash received and the sale of certain assets. In 2003, the Company recognized another ratable portion, $0.9 million, as a net reduction to cost of sales. Approximately $5.4 million of the original one-time cash payment remains to be recognized over the remaining life of the amended agreement, terminating December 2010, as certain conditions are met by the Company and the supplier. Alternatively, the Company may elect to resume purchasing salt from the supplier’s facility. In that event, the Company would repay a ratable portion of the cash received.

11.		RELATED PARTY TRANSACTIONS

Transactions with IMC and its subsidiaries (“IMC affiliates”) and Apollo and its subsidiaries (“Apollo affiliates”) are considered related parties. The Company believes that all of the related party transactions approximate terms which would otherwise be negotiated by the Company with unrelated third parties.

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targets were met that relieved the Company from the contingent obligation whereby the Settlement Notes and related accrued interest could have been payable, in whole or in part, to Apollo affiliates if certain levels of equity returns had not be achieved by Apollo. There was no impact to the Company since the Settlement Notes were not previously included in the consolidated balance sheet.

     The Company did not record any interest income from IMC affiliates for the years ended December 31, 2003 and 2002. The Company’s interest income from IMC affiliates was $2.9 million for the year ended December 31, 2001. The Company recorded interest expense with IMC affiliates of $0.1 million, $0.9 million and $10.8 million for the years ended December 31, 2003, 2002 and 2001, respectively.

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charge to Apollo for transaction fees related to the Recapitalization.

12.		COMMODITY DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

13.		OPERATING SEGMENTS

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Segment information as of and for the years ended December 31, is as follows (in millions):

2003		Salt				Potash				Other(d)				Total
Sales from external customers		$	546.6			$	54.0			$	—			$	600.6
Intersegment sales			—				9.4				(9.4	)			—
Cost of sales — shipping and handling			156.6				8.7				—				165.3
Operating earnings (loss)(a)			108.8				7.5				(20.7	)			95.6
Depreciation, depletion and amortization			34.2				7.9				—				42.1
Total assets			522.6				141.5				22.4				686.5
Capital expenditures			17.7				2.9				—				20.6
2002
Sales from external customers		$	452.5			$	50.1			$	—			$	502.6
Intersegment sales			—				8.9				(8.9	)			—
Cost of sales — shipping and handling			130.2				7.3				—				137.5
Operating earnings (loss)(b)			95.1				4.8				(22.3	)			77.6
Depreciation, depletion and amortization			29.2				7.9				—				37.1
Total assets			509.8				116.0				18.3				644.1
Capital expenditures			15.3				4.2				—				19.5
2001
Sales from external customers		$	485.0			$	38.2			$	—			$	523.2
Intersegment sales			—				8.8				(8.8	)			—
Cost of sales — shipping and handling			143.2				—				—				143.2
Operating earnings (loss)(c)			94.3				0.7				(37.9	)			57.1
Depreciation, depletion and amortization			24.5				8.1				—				32.6
Total assets			514.2				120.9				20.5				655.6
Capital expenditures			38.5				4.5				—				43.0

(a)	Includes $2.4 million related to initial public offering costs.
(b)	Includes $7.7 million related to transition costs.
(c)	Includes $27.0 million related to transaction and transition costs.
(d)	Other includes corporate entities and eliminations.

Sales		2003				2002				2001
United States		$	394.5			$	345.2			$	339.1
Canada			128.7				90.8				99.4
United Kingdom			68.2				60.0				79.4
Other			9.2				6.6				5.3
		$	600.6			$	502.6			$	523.2

Long-Lived Assets		2003				2002
United States		$	269.6			$	248.5
Canada			122.4				128.2
United Kingdom			74.1				63.8
		$	466.1			$	440.5

14.		REDEEMABLE PREFERRED STOCK

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15.		STOCKHOLDERS’ EQUITY AND STOCK OPTIONS

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summary of CMI’s stock option activity and related information for the following periods:

							Weighted-
			Number of				average
			options				Exercise price
Outstanding at December 31, 2001				617,043			$	2.01
	Granted			1,122,433				2.11
	Exercised			—				—
	Cancelled/Expired			—				—
Outstanding at December 31, 2002				1,739,476				2.08
	Exercised			(23,053	)			2.01
	Cancelled/Expired			(6,592	)			2.01
Outstanding at May 22, 2003				1,709,831				2.08
Outstanding at May 23, 2003 after the amendment to the option plan(a)				2,455,943				1.45
	Granted			50,311				7.04
	Exercised(b)			(246,458	)			1.41
	Cancelled/Expired			(42,832	)			1.40
Outstanding at December 31, 2003				2,216,964			$	1.58

(a)	In connection with CMI’s $100.0 million dividend payment on its common stock in May 2003, the number of CMI stock options and their exercise prices were adjusted to preserve the intrinsic value of the stock options that existed prior to the dividend. This was accomplished by decreasing the exercise price of outstanding options and increasing the number of outstanding options by a factor of 1.436 to one.
(b)	Exercised options include 6,077 shares of common stock that were issued from treasury stock.

		Options outstanding												Options exercisable
						Weighted-average
						remaining
		Number				contractual life				Weighted-average				Number				Weighted-average
Range of exercise prices		outstanding				(years)				exercise price				outstanding				exercise price
$1.40			2,100,298				6.15			$	1.40				1,618,787			$	1.40
$1.41 - $2.60			6,377				6.58			$	2.60				3,642			$	2.60
$2.61 - $3.23			59,980				6.83			$	3.23				57,273			$	3.23
$3.24 - $5.17			12,942				7.58			$	5.17				6,471			$	5.17
$5.18 - $7.70			37,367				7.93			$	7.70				37,367			$	7.70
Totals			2,216,964				6.19			$	1.58				1,723,540			$	1.61

16.		EARNINGS PER SHARE

		2003				2002				2001
		(restated)				(restated)				(restated)
Numerator:
Net income (loss)		$	32.3			$	17.0			$	28.5
Dividends on redeemable preferred stock			1.2				10.6				0.8
Gain on redemption of preferred stock			(8.2	)			—				—
Net income (loss) available for common stock		$	39.3			$	6.4			$	27.7
Denominator:
Average common shares outstanding			32,492,792				35,039,110				3,220,724
Shares for basic earnings per share			32,492,792				35,039,110				3,220,724
Stock options			1,491,191				435,429				—
Shares for diluted earnings per share			33,983,983				35,474,539				3,220,724
Net income (loss) per share, basic		$	1.21			$	0.18			$	8.60
Net income (loss) per share, diluted		$	1.15			$	0.18			$	8.60

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17.		OTHER COMPREHENSIVE INCOME

															Accumulated
			Unfunded				Unrealized Gains				Foreign				Other
			Pension				on Cash Flow				Currency				Comprehensive
			Losses				Hedges				Adjustments				Income
Balance at December 31, 2000			$	—			$	—			$	1.1			$	1.1
January 1, 2001 — November 27, 2001 changes				—				—				(3.2	)			(3.2	)
Balance at November 27, 2001			$	—			$	—			$	(2.1	)		$	(2.1	)
Balance at November 28, 2001			$	—			$	—			$	—			$	—
November 28, 2001 — December 31, 2001 changes				(5.4	)			—				3.0				(2.4	)
Balance at December 31, 2001				(5.4	)			—				3.0				(2.4	)
	2002 changes			(6.5	)			0.1				8.9				2.5
Balance at December 31, 2002				(11.9	)			0.1				11.9				0.1
	2003 changes			4.9				0.7				19.8				25.4
Balance at December 31, 2003			$	(7.0	)		$	0.8			$	31.7			$	25.5

							Tax
			Before tax				(expense)				Net-of-tax
			amount				benefit				amount
For the year ended December 31, 2003:
Minimum pension liability adjustment			$	7.0			$	(2.1	)		$	4.9
Gas hedging adjustment				1.1				(0.4	)			0.7
Foreign currency translation adjustment				19.8				—				19.8
	Other comprehensive income		$	27.9			$	(2.5	)		$	25.4

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18.		QUARTERLY RESULTS (Unaudited)(a) (in millions, except share data)

			First				Second				Third				Fourth				Year
Quarter			(restated)				(restated)				(restated)				(restated)				(restated)
2003
Sales			$	212.7			$	88.7			$	97.1			$	202.1			$	600.6
Cost of sales — shipping and handling				64.1				21.1				24.1				56.0				165.3
Cost of sales — products				95.5				48.9				55.1				88.8				288.3
	Gross profit			53.1				18.7				17.9				57.3				147.0
Selling, general and administrative				11.6				11.5				11.2				14.7				49.0
Restructuring and other charges				—				—				—				2.4				2.4
	Operating earnings (loss)(b)			41.5				7.2				6.7				40.2				95.6
Interest expense				11.9				13.1				15.5				15.8				56.3
Other (income) expense, net				(0.3	)			1.3				1.6				1.1				3.7
	Income before income taxes			29.9				(7.2	)			(10.4	)			23.3				35.6
Income tax (benefit) expense				3.1				(1.8	)			(4.1	)			6.1				3.3
	Net income (loss)			26.8				(5.4	)			(6.3	)			17.2				32.3
Dividends on redeemable preferred stock				0.6				0.6				—				—				1.2
Gain on redemption of preferred stock				—				(8.2	)			—				—				(8.2	)
	Net income available for common stock		$	26.2			$	2.2			$	(6.3	)		$	17.2			$	39.3
Net income (loss) per share, basic(d)			$	0.74			$	0.07			$	(0.21	)		$	0.57			$	1.21
Net income (loss) per share, diluted(d)				0.72				0.07				(0.21	)			0.53				1.15
Basic weighted-average shares outstanding				35,104,091				34,663,944				30,029,932				30,173,200				32,492,792
Diluted weighted-average shares outstanding				36,176,300				35,987,434				30,029,932				32,074,416				33,983,983

			Amounts				Amounts				Amounts				Amounts				Amounts
			previously				previously				previously				previously				previously
			reported				reported				reported				reported				reported
	Income before income taxes			29.9				(7.2	)			(10.4	)			23.3				35.6
Income tax (benefit) expense				4.4				(0.6	)			(2.8	)			7.4				8.4
	Net income (loss)			25.5				(6.6	)			(7.6	)			15.9				27.2
Dividends on redeemable preferred stock				0.6				0.6				—				—				1.2
Gain on redemption of preferred stock				—				(8.2	)			—				—				(8.2	)
	Net income (loss) available for common stock		$	24.9			$	1.0			$	(7.6	)		$	15.9			$	34.2
Net income (loss) per share, basic(d)			$	0.71			$	0.03			$	(0.25	)		$	0.53			$	1.05
Net income (loss) per share, diluted(d)				0.68				0.03				(0.25	)			0.50				1.01
Basic weighted-average shares outstanding				35,104,091				34,663,944				30,029,932				30,173,200				32,492,792
Diluted weighted-average shares outstanding				36,176,300				35,987,434				30,029,932				32,074,416				33,983,983

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			First				Second				Third				Fourth				Year
Quarter			(restated)				(restated)				(restated)				(restated)				(restated)
2002
Sales			$	162.4			$	82.3			$	92.2			$	165.7			$	502.6
Cost of sales — shipping and handling				48.5				20.2				22.5				46.3				137.5
Cost of sales — products				74.3				45.7				53.3				65.9				239.2
	Gross profit			39.6				16.4				16.4				53.5				125.9
Selling, general and administrative				9.6				9.8				10.7				10.5				40.6
Restructuring and other charges				2.5				2.2				2.1				0.9				7.7
	Operating earnings (loss)(c)			27.5				4.4				3.6				42.1				77.6
Interest expense				10.5				10.6				10.7				10.6				42.4
Other (income) expense, net				—				4.4				(0.3	)			0.8				4.9
	Income before income taxes			17.0				(10.6	)			(6.8	)			30.7				30.3
Income tax (benefit) expense				6.5				(2.1	)			(4.3	)			13.2				13.3
	Net income (loss)			10.5				(8.5	)			(2.5	)			17.5				17.0
Dividends on redeemable preferred stock				2.6				2.6				2.7				2.7				10.6
	Net income available for common stock		$	7.9			$	(11.1	)		$	(5.2	)		$	14.8			$	6.4
Net income (loss) per share, basic (d)			$	0.23			$	(0.32	)		$	(0.15	)		$	0.43			$	0.18
Net income (loss) per share, diluted (d)				0.23				(0.32	)			(0.15	)			0.41				0.18
Basic weighted-average shares outstanding				34,854,690				35,097,328				35,100,596				35,103,830				35,039,110
Diluted weighted-average shares outstanding				34,854,690				35,097,328				35,100,596				36,064,684				35,474,539

			Amounts				Amounts				Amounts				Amounts				Amounts
			previously				previously				previously				previously				previously
			reported				reported				reported				reported				reported
	Income before income taxes			17.0				(10.6	)			(6.8	)			30.7				30.3
Income tax (benefit) expense				5.5				(3.1	)			(3.1	)			12.1				11.4
	Net income (loss)			11.5				(7.5	)			(3.7	)			18.6				18.9
Dividends on redeemable preferred stock				2.6				2.6				2.7				2.7				10.6
	Net income (loss) available for common stock		$	8.9			$	(10.1	)		$	(6.4	)		$	15.9			$	8.3
Net income (loss) per share, basic (d)			$	0.26			$	(0.29	)		$	(0.18	)		$	0.45			$	0.24
Net income (loss) per share, diluted (d)				0.26				(0.29	)			(0.18	)			0.44				0.23
Basic weighted-average shares outstanding				34,854,690				35,097,328				35,100,596				35,103,830				35,039,110
Diluted weighted-average shares outstanding				34,854,690				35,097,328				35,100,596				36,064,684				35,474,539

(a)	See Notes to Combined and Consolidated Financial Statements for detail related to special charges.
(b)	Fourth quarter and annual operating results include special charges of $2.4 million ($2.3 million after tax) related to costs associated with the initial public offering.
(c)	Annual quarterly operating results include special charges of $7.7 million ($7.6 million after tax) related to transition costs associated with the Recapitalization.
(d)	Earnings (loss) per share are computed independently for each of the quarters presented. Accordingly, the accumulation of quarterly earnings per share may not equal the total.

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19.		SUBSEQUENT EVENT — QUARTERLY DIVIDEND DECLARED

ITEM 9.		CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

ITEM 9A.		CONTROLS AND PROCEDURES

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ITEM 10.		DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Directors and Executive Officers

The following table sets forth the name, age and position of each person who is an executive officer or director of CMI or CMG on the date of this annual report.

Name		Age				Position
Michael E. Ducey			55			President, Chief Executive Officer and Director of CMI and President, Chief Executive Officer and Director of CMG
Keith E. Clark			48			Vice President and General Manager, General Trade of CMG
David J. Goadby			49			Vice President of CMG and Managing Director, Salt Union
Rodney L. Underdown			37			Chief Financial Officer and Vice President of CMI and CMG
Steven Wolf			58			Vice President and General Manager, Highway Deicing and SOP of CMG
Joel A. Asen			53			Director of CMI and CMG
Bradley J. Bell			51			Director of CMI and CMG
Robert F. Clark			61			Director of CMI and CMG
Peter P. Copses			45			Director of CMI and CMG
Robert H. Falk			65			Director of CMI and CMG
Joshua J. Harris			39			Director of CMI and CMG
Scott M. Kleinman			31			Director of CMI and CMG
Douglas A. Pertz			49			Director of CMI and CMG
Heinn F. Tomfohrde, III			70			Director of CMI and CMG

     Michael E. Ducey was appointed the President and Chief Executive Officer of CMI in December 2002. Mr. Ducey joined CMG as the President and Chief Executive Officer on April 1, 2002. Prior to joining CMG, Mr. Ducey worked approximately 30 years for Borden Chemical, a diversified chemical company, in various positions including President and Chief Executive Officer (December 1999 to March 2002) and Executive Vice President and Chief Operation Officer (October 1997 to December 1999).

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President of Asen Advisory since April 1992, which provides strategic and financial advisory services. He was Managing Director at Whitehead Sterling from 1991 to 1992, at Paine Webber, Inc. from 1990 to 1991 and at Drexel Burnham Lambert Incorporated from 1988 to 1990. From 1985 to 1988, he was a Senior Vice President at GAF Corporation. Prior to that time, Mr. Asen was a Manager of Business Development at GE and Manager of Marketing and Business Development at GECC. Mr. Asen is also a Director of Resolution Performance Products Inc. and Anchor Glass Container Corp.

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ance committee all operate under a written charters that have been adopted by our board of directors. We may appoint additional committees of our board of directors in the future, including for purposes of complying with all applicable corporate governance rules of the New York Stock Exchange.

    Audit Committee

Our audit committee oversees the engagement of independent public accountants, reviews our annual financial statements and the scope of annual audits and considers matters relating to accounting policies and internal controls. The audit committee is currently comprised of directors Heinn F. Tomfohrde, III, Bradley J. Bell and Scott M. Kleinman. Our board of directors has determined that directors Heinn F. Tomfohrde, III and Bradley J. Bell satisfy the independence requirements of Rule 10A-3 of the Exchange Act. In addition, our board of directors has determined that director Bradley J. Bell meets the New York Stock Exchange standard of possessing accounting or related financial management expertise and qualifies as an “audit committee financial expert” under the SEC’s definition. The New York Stock Exchange has adopted new corporate governance rules with respect to the charter, structure and membership requirements for audit committees. We intend to comply with these rules.

    Environmental, Health and Safety Committee

Our environmental, health and safety (“EH&S”) committee was established to ensure compliance with environmental, health and safety initiatives and policies adopted by us, including education of site personnel; integration of environmental, health and safety policies into all business decisions; design, operation and management of facilities to protect the environment and the health and safety of all personnel.

    Compensation Committee

Our compensation committee discharges our board of directors’ responsibilities related to compensation of our executive officers and directors; produces an annual report on executive compensation for inclusion in our proxy statement; provides general oversight of our compensation structure, including our equity compensation plans and benefits programs; and retains and approves the terms of the retention of any compensation consultants and other compensation experts. Other specific duties of the compensation committee include: reviewing and approving objectives relevant to executive officer compensation; evaluation performance and determining the compensation of executive officers in accordance with those objectives; recommending to our board of directors appropriate director compensation; and annually evaluating its performance and its charter.

    Nominating/ Corporate Governance Committee

Our nominating/corporate governance committee identifies individuals qualified to become members of our board of directors, consistent with criteria approved by our board of directors; oversees the organization of our board of directors to discharge the board’s duties and responsibilities properly and efficiently; identifies best practices and recommends corporate governance principles, including giving proper attention and making effective responses to stockholder concerns regarding corporate governance; and is responsible for developing and recommending to our board of directors a set of corporate governance guidelines and principles applicable to us. Other specific duties of the nominating/corporate governance committee include: annually assessing the size and composition of our board of directors, developing membership qualifications for board committees, monitoring compliance with board and board committee membership criteria; annually reviewing and recommending directors for continued service; coordinating and assisting management and our board in recruiting new members to our board of directors; reviewing governance-related stockholder proposals and recommending board responses; and overseeing the evaluation of our board of directors and management.

Board Compensation

The members of our board of directors are reimbursed for their out-of-pocket expenses. Those directors who are not employees of the Company also receive compensation for their service on the board of directors.

Code of Ethics

We have adopted a code of ethics for our executive and senior financial officers, violations of which are required to be reported to the audit committee. The code of ethics is filed as Exhibit 14 to this Form 10-K/A and posted on our Web site at www.compassminerals.com.

Section 16(a)Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires our officers and directors, executive officers and certain other officers, and persons who own more than 10% of a registered class of our equity securities, to file reports of ownership and changes of ownership with the SEC. Officers, directors and greater than 10% stockholders are required to furnish us with copies of all Section 16(a) reports they file.

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     Based solely on a review of the forms we have received or prepared, we believe that during the year ended December 31, 2003, all filing requirements applicable to the directors, officers and greater than 10% stockholders were timely met.

ITEM 11.		EXECUTIVE COMPENSATION

Summary Compensation Table

The following table sets forth the compensation for the year ended December 31, 2003 paid or awarded to the Chief Executive Officer and the four other most highly compensated executive officers serving as executive officers of our wholly owned subsidiary, CMG, or “the named executive officers.” There was no compensation paid to the executive officers of CMI, in their capacity as executive officers of CMI, for the year ended December 31, 2003.

										Long Term Compensation
										Awards				Pay outs
		Annual Compensation								Securities
										Underlying				Long Term
						Bonus				Options/SARs				Incentive				All Other
Name and Principal Position		Salary ($)				($)(1)				(#)(2)				Pay outs ($)(5)				Compensation ($)(3)
Michael E. Ducey President and Chief Executive Officer of CMI and President and Chief Executive Officer of CMG
2003			356,563				413,368				—				—				167,514
April (date of hire) to December 2002			262,500				251,328				540,774				—				130,761
Steven Wolf Vice President and General Manager, Highway Deicing and SOP of CMG
2003			282,042				236,283				—				852,920				113,985
2002			258,803				143,465				—				63,408				412,430
2001			247,108				91,998				220,961				—				50,348
Keith E. Clark Vice President and General Manager, General Trade of CMG
2003			207,763				111,054				—				824,733				88,995
2002			199,190				93,234				—				8,150				325,054
2001			193,804				75,323				213,411				—				34,405
David J. Goadby(4) Vice President of CMG and Managing Director, Salt Union Ltd.
2003			192,492				69,859				—				—				46,199
2002			168,774				47,095				—				—				219,886
2001			150,932				27,860				140,494				—				45,801
Rodney L. Underdown Vice President and Chief Financial Officer of CMI and Chief Financial Officer of CMG
2003			165,129				76,751				—				380,004				48,144
2002			150,000				48,960				—				—				211,294
2001			128,105				31,832				98,214				—				13,864

(1)	Bonuses were paid pursuant to the Compass Minerals Group Incentive Compensation Program. Under this program, bonus amounts were calculated on an annual basis according to business and individual performance.
(2)	Represents the number of shares of our common stock underlying options (as adjusted to reflect changes in our capital structure following the date of grant).
(3)	Consists of sale and retention bonuses related to the change in ownership subsequent to the Recapitalization, certain moving expenses incurred by Mr. Ducey considered by the U.S. Internal Revenue Service to be compensation and other employer contributions to our tax-qualified and non-tax- qualified defined contribution and defined benefit retirement plans.
(4)	Mr. Goadby’s compensation is paid in British pounds sterling, which has been converted to U.S. dollars at a rate of £0.5814 per $1.00.
(5)	In September of 2003, the deferred compensation plan was terminated resulting in distribution of all of its holdings to its participants. See Item 11, “Executive Compensation — Deferred Compensation Plan.”

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Option Grants in 2003

Aggregate Option Exercises in 2003 and Fiscal Year-end Option Values

										Number of Securities
										Underlying Unexercised								Value of Unexercised In-the-Money
		Number of								Options/SARs at December 31,								Options/SARs at December 31, 2003
		Shares								2003								($)(1)
		Acquired on				Value Realized
Name		Exercise				($)				Exercisable				Unexercisable				Exercisable				Unexercisable
Michael E. Ducey			67,595				77,740				337,980				135,193				4,353,182				1,741,286
Steven Wolf			27,617				52,769				138,101				55,242				1,778,741				711,517
Keith E. Clark			26,675				50,970				133,379				53,352				1,717,922				687,174
David J. Goadby			12,227				5,365				87,802				35,125				1,130,890				452,410
Rodney L. Underdown			12,276				23,457				61,381				24,553				790,587				316,243

(1)	Calculated by multiplying the difference between the fair market value of the shares of common stock underlying the options as of December 31, 2003 ($14.28 per share) and the exercise price of the options by the number of shares of common stock underlying the options.

2001 Option Plan

	•	one-half of the options are time vesting options that will become vested and exercisable in equal annual installments on each of the first four anniversaries of the date of grant, so long as the optionee continues to provide services to us or one of our subsidiaries as of such anniversary.
	•	one-half of the options are performance vesting options that will become vested and exercisable on the eighth anniversary of the date of grant, so long as the optionee continues to provide services to us or one of our subsidiaries as of such date. However, all or a portion of such performance vesting options will become vested and exercisable prior to such eighth anniversary upon a sale of our assets or capital stock pursuant to which Apollo achieves a specified internal rate of return. In addition, this offering or future offerings of our common stock may cause these performance vesting options to become immediately vested.

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Shares of common stock purchased or acquired under the stock plan will generally be subject to restrictions on transfer, repurchase rights and other limitations set forth in the investor rights agreement. We filed a registration statement on Form S-8 under the Securities Act to register the issuance of those shares issuable or reserved for issuance under our 2001 Stock Option Plan.

David J. Goadby. Salt Union Limited entered into a service agreement, dated September 1, 1997, with Mr. Goadby pursuant to which he was appointed as Managing Director of Salt Union until his employment is terminated by either Salt Union, giving Mr. Goadby not less than 12 months prior written notice, or Mr. Goadby, giving Salt Union not less than three months prior written notice. The agreement provides that Mr. Goadby be paid a base salary, as well as bonuses or additional remuneration, if any, as the board of directors of Salt Union may determine. For a period of six months following his termination, Mr. Goadby will be subject to non-compete, non-solicitation and non-dealing covenants with regard to customers and non-solicitation of suppliers and managerial, supervisory, technical, sales, financial and administrative employees. In the event of a change of control of Salt Union, Mr. Goadby will be entitled to terminate the agreement immediately and Salt Union will be obligated to pay him an amount equal to his annual base salary and the value of his company car and medical insurance calculated over a 12 month period.

Other Named Executive Officers. We have not entered into employment agreements with any of our executive officers, except for the agreements entered into by our subsidiaries with Mr. Ducey and Mr. Goadby. Accordingly, each of our executive officers is currently an “at will” employee.

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ITEM 12.		SECURITY OWNERSHIP AND CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

		Number of
		Shares of
		Common Stock
Name and Address of		Beneficially				Percent of
Beneficial Owner		Owned(1)				Class
Apollo(2)			11,462,064				35.93	%
Neuberger Berman, Inc.(3)			1,754,000				5.50	%
Michael E. Ducey(4)			617,190				1.93	%
Keith E. Clark(4)			255,883				*
David J. Goadby(4)			155,578				*
Rodney L. Underdown(4)			117,810				*
Steven Wolf(4)			264,825				*
Joel A. Asen(5)			53,669				*
Robert F. Clark(6)			177,832				*
Peter P. Copses(5)			53,669				*
Robert H. Falk(5)			53,669				*
Joshua J. Harris(5)			53,669				*
Scott M. Kleinman(5)			53,669				*
Douglas A. Pertz(5)			53,669				*
Heinn F. Tomfohrde, III(5)			53,669				*
Bradley J. Bell(5)			37,367				*
All directors and officers as a group			2,002,168				6.28	%

*	Represents less than 1% of the outstanding shares of common stock (excluding any shares held by YBR Holdings that could be attributed to any of these individuals).

(1)

For purposes of this table, information as to the percentage of shares beneficially owned is calculated based on 31,899,567 shares of common stock outstanding. The amounts and percentages of common stock beneficially owned are reported on the basis of regulations of the SEC governing the determination of beneficial ownership of securities. Under the rules of the SEC, a person is deemed to be a “beneficial owner” of a security if that person has or shares voting power, which includes the power to vote or direct the voting of such security, or investment power, which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60 days. Securities that can be so acquired are deemed to be outstanding for purposes of computing such person’s ownership percentage, but not for purposes of computing any other person’s percentage. Under these rules, more than one person may be deemed beneficial owner of the same securities and a person may be deemed to be a beneficial owner of securities as to which such person has no economic interest. Except as otherwise indicated in these footnotes, each of the beneficial owners has, to our knowledge, sole voting and investment power with respect to the indicated shares of common stock.

(2)	Represents all shares held of record by YBR Holdings. YBR Holdings is an affiliate of, and is controlled by, Apollo through Apollo’s majority ownership of YBR Holdings’ membership interests. The address of each of YBR Holdings, Apollo and of Messrs. P. Copses, R. Falk, J. Harris and S. Kleinman is c/o Apollo Management, L.P., 1301 Avenue of the Americas, New York, New York 10019.
(3)	The address of Neuberger Berman, Inc. is 605 Third Ave., New York, New York 10158-3698.
(4)	Includes options that are currently exercisable or will become exercisable in the next 60 days. Does not include options to purchase 135,192, 53,352, 35,125, 24,553 and 55,242 shares of our common stock that we have granted to Messrs. M. Ducey, K. Clark, D. Goadby, R. Underdown and S. Wolf, respectively. These options are subject to time and performance vesting conditions and are not currently exercisable (and will not become exercisable within the next 60 days). See Item 11, “Executive Compensation — 2001 Option Plan.” The address of each of Messrs. M. Ducey, K. Clark, D. Goadby, R. Underdown and S. Wolf is c/o Compass Minerals International, Inc., 8300 College Boulevard, Overland Park, Kansas 66210.
(5)	Represents options to purchase 37,367 shares of our common stock that we have granted to Mr. B. Bell and 53,669 shares of our common stock that we have granted to each of Messrs. J. Asen, P. Copses, R. Falk, J. Harris, S. Kleinman, D. Pertz and H. Tomfohrde III. These options are exercisable immediately.
(6)	The address of Mr. R. Clark is c/o Compass Minerals International, Inc., 8300 College Boulevard, Overland Park, Kansas 66210.

ITEM 13.		CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

    Supply Agreements

We have contracted with IMC Global or its affiliates to supply some of our facilities with raw materials used in the production of our products and to supply to other facilities finished products that we distribute to our customers or other distributors. IMC Global supplies us with the following products:

	•	coarse and mixed highway deicing salt, as a finished product, from IMC Global’s Esterhazy, Saskatchewan facility;
	•	bulk white granular ice melt muriate of potash from IMC Global’s Belle Plaine, Saskatchewan facility;
	•	packaged water softener muriate of potash, as a finished product, from IMC Global’s Belle Plaine, Saskatchewan facility;
	•	muriate of potash, as a raw material, from IMC Global’s Esterhazy, Saskatchewan facility to our Ogden facility; and
	•	a variety of general trade salt products, as finished products, from IMC Global’s Hersey, Michigan facility.

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     The initial terms of these supply contracts range from five to 12 years and are automatically extended by one-year intervals unless termination notice is given by either party six months prior to the end of the term. The prices we pay for these products vary depending on the product. However, we believe that the prices IMC Global charges us are generally as favorable as the prices that we can obtain from third parties. Some contracts require the purchase of all of our requirements for a particular product from IMC Global. Others require the purchase of no less than 90% of our requirements from IMC Global, while others have no purchase requirement at all. Certain of those contracts permit us to obtain a lower price elsewhere and, if IMC Global does not match the lower price, we can purchase at the lower price from the third party. We cannot exercise our matching rights under these provisions more than twice in a year. Under the Hersey salt supply contract, we are required to purchase no less than 200,000 tons of salt products each year under most circumstances and we can purchase from third parties if a force majeure event prevents IMC Global from delivering products to us. Pricing for the Esterhazy highway deicing salt contract is adjusted each year based on a Canadian product price index. Pricing under the other supply contracts is generally adjusted each year based on the movement in the sales prices of the products to our own or IMC Global’s customers. Under the Hersey salt supply contract, the price is adjusted each year based on a salt producer price index, although we have the right to change the pricing adjustment formula to a quarterly adjustment based on the prices at which we sell the products to our customers.

    Railcars

We sublease railcars from affiliates of IMC Global that are used by us to transport products used in our business. At December 31, 2003, we leased approximately 46 railcars with terms that expire on various dates throughout 2005 and with renewal options available on some railcars until 2014.

Management Consulting Agreement

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ITEM 14.		PRINCIPAL ACCOUNTANT FEES AND SERVICES

		2003				2002
Audit fees(a)		$	0.6			$	1.0
Tax fees(b)			1.0				0.9
All other fees(c)			0.1				—
		$	1.7			$	1.9

(a)	Relates to services for the annual financial statement audits included in our Form 10-K for CMI and CMG, quarterly reviews for the financial statements included in our Form 10-Q, other financial statement audits that were required by SEC rules, reviews of registration statements and other SEC filings, and procedures performed for comfort letters issued to underwriters in connection with capital market transactions.
(b)	Relates to services for reviews of certain tax filings, as well as research and advice on tax planning matters.
(c)	Relates to audits of pension and retirement plans.

    The audit committee’s policy is to pre-approve all audit and permissible audit-related services provided by the independent auditors. The audit committee will consider annually for pre-approval a list of specific services and categories of services, including audit and audit-related services, for the upcoming or current fiscal year. All non-audit services are approved by the audit committee in advance on a case-by-case basis. Any service that is not included in the approved list of services or that does not fit within the definition of a pre-approved service is required to be presented separately to the audit committee for consideration at its next regular meeting or, if earlier consideration is required, by other means of communication.

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ITEM 15.		EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

Consolidated Balance Sheets as of December 31, 2003 and 2002, restated			38
Combined and Consolidated Statements of Operations for the three years ended December 31, 2003, restated			39
Combined and Consolidated Statements of Stockholders’ Equity (Deficit) for the three years ended December 31, 2003, restated			40
Combined and Consolidated Statements of Cash Flows for the three years ended December 31, 2003, restated			41
Notes to Combined and Consolidated Financial Statements, restated			42

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Compass Minerals International, Inc.

			Balance at				Additions												Balance at
Description			the Beginning				Charged to												the End of
(in millions)			of the Year				Expense				Deductions(1)				Other				the Year
Deducted from Receivables — Allowance for Doubtful Accounts
	2003		$	1.6			$	1.1			$	(0.6	)		$	—			$	2.1
	2002			2.0				0.0				(0.4	)			—				1.6
	2001			1.8				1.6				(1.4	)			—				2.0
Deducted from Deferred Income Taxes — Valuation Allowance (restated)
	2003		$	30.5				—			$	(5.7	)		$	—			$	24.8
	2002			31.5				—				(1.0	)			—				30.5
	2001(2)			43.2				—				(7.7	)			(4.0	)			31.5

(1)	Deduction for purposes for which reserve was created.
(2)	Other includes a corresponding tax asset that diminished upon Recapitalization.

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EXHIBIT INDEX

Exhibit
No.				Description of Exhibit
	2.1			Agreement and Plan of Merger, dated October 13, 2001, among IMC Global Inc., Salt Holdings Corporation, YBR Holdings LLC and YBR Acquisition Corp (incorporated herein by reference to Exhibit 2.1 to Salt Holdings’ Registration Statement on Form S-4, File No. 333-104603).
	2.2			Amendment No. 1 to Agreement and Plan of Merger, dated November 28, 2001, among IMC Global Inc., Salt Holdings Corporation, YBR Holdings LLC and YBR Acquisition Corp (incorporated herein by reference to Exhibit 2.2 to Salt Holdings’ Registration Statement on Form S-4, File No. 333-104603).
	3.1			Amended and Restated Certificate of Incorporation of Compass Minerals International, Inc. (incorporated herein by reference to Exhibit 3.1 to Compass Minerals International’s Registration Statement on Form S-4, File No. 333-111953).
	3.2			Amended and Restated By-laws of Compass Minerals International, Inc. (incorporated herein by reference to Exhibit 3.2 to Compass Minerals International’s Registration Statement on Form S-4, File No. 333-111953).
	10.1			Indenture, dated December 20, 2002, between Salt Holdings Corporation, as issuer, and The Bank of New York, as trustee (incorporated herein by reference to Exhibit 4.1 to Salt Holdings’ Registration Statement on Form S-4, File No. 333-104603).
	10.2			Form of Initial Note (included as Exhibit A to Exhibit 10.1).
	10.3			Form of Exchange Note (included as Exhibit B to Exhibit 10.1).
	10.4			First Supplemental Indenture to the Indenture governing the 12 3/4% Senior Discount Notes Due 2012 of Salt Holdings Corporation, dated May 21, 2003, between Salt Holdings Corporation and The Bank of New York, as trustee (incorporated herein by reference to Exhibit 4.5 to Salt Holdings’ Registration Statement on Form S-4, File No. 333-104603).
	10.5			Indenture, dated May 22, 2003, governing the 12% Senior Subordinated Discount Notes Due 2013 of Salt Holdings Corporation, between Salt Holdings Corporation, as issuer, and The Bank of New York, as trustee (incorporated herein by reference to Exhibit 4.6 to Salt Holdings’ Registration Statement on Form S-4, File No. 333-104603).
	10.6			Form of 12% Senior Subordinated Discount Note (included as Exhibit A to Exhibit 10.5).
	10.7			Salt mining lease, dated November 9, 2001, between the Province of Ontario, as lessor, and Sifto Canada Inc. as lessee (incorporated herein by reference to Exhibit 10.1 to Salt Holdings’ Registration Statement on Form S-4, File No. 333-104603).
	10.8			Salt and Surface Agreement, dated June 21, 1961, by and between John Taylor Caffery, as agent for Marcie Caffery Gillis, Marcel A. Gillis, Bethia Caffery McCay, Percey McCay, Mary Louise Caffery Ellis, Emma Caffery Jackson, Edward Jackson, Liddell Caffery, Marion Caffery Campbell, Martha Gillis Restarick, Katherine Baker Senter, Caroline Baker, Bethia McCay Brown, Donelson Caffery McCay, Lucius Howard McCurdy Jr., John Andersen McCurdy, Edward Rader Jackson III, individually and as trustee for Donelson Caffery Jackson, and the J.M. Burguieres Company, LTD., and Carey Salt Company as amended by Act of Amendment to Salt Lease, dated May 30, 1973, as further amended by Agreement, dated November 21, 1990, and as further amended by Amendment to Salt and Surface lease, dated July 1, 1997 (incorporated herein by reference to Exhibit 10.2 to Salt Holdings’ Registration Statement on Form S-4, File No. 333-104603).
	10.9			Royalty Agreement, dated September 1, 1962, between IMC Kalium Ogden Corp. and the Utah State Land Board (incorporated herein by reference to Exhibit 10.3 to Salt Holdings’ Registration Statement on Form S-4, File No. 333-104603).
	10.10			Amended and Restated Credit Agreement, dated April 10, 2002, among Salt Holdings Corporation, Compass Minerals Group, Inc., as U.S. borrower, Sifto Canada Inc., as Canadian borrower, Salt Union Limited, as U.K. borrower, JPMorgan Chase Bank, as administrative agent, J.P. Morgan Bank Canada, as Canadian agent, Chase Manhattan International Limited, as U.K. agent, J.P. Morgan Securities Inc., as joint advisor, co-lead arranger and joint bookrunner, Deutsche Banc Alex. Brown Inc., as syndication agent, joint advisor, co-lead arranger and joint-bookrunner, Credit Suisse First Boston Corporation, as co-documentation agent, and Credit Lyonnais, as co-documentation agent (incorporated herein by reference to Exhibit 10.4 to Salt Holdings’ Registration Statement on Form S-4, File No. 333-104603).
	10.11			Amendment No. 1 to the Amended and Restated Credit Agreement, dated December 19, 2002, among Salt Holdings Corporation, Compass Minerals Group, Inc., as U.S. borrower, Sifto Canada Inc., as Canadian borrower, Salt Union Limited, as U.K. borrower, JPMorgan Chase Bank, as administrative agent, J.P. Morgan Bank Canada, as Canadian agent, Chase Manhattan International Limited, as U.K. agent, J.P. Morgan Securities Inc., as joint advisor, co-lead arranger and joint bookrunner, Deutsche Banc Alex. Brown Inc., as syndication agent, joint advisor, co-lead arranger and joint bookrunner, Credit Suisse First Boston Corporation, as co-documentation agent, and Credit Lyonnais, as co-documentation agent (incorporated herein by reference to Exhibit 10.5 to Salt Holdings’ Registration Statement on Form S-4, File No. 333-104603).
	10.12			Amendment No. 2 to the Amended and Restated Credit Agreement, dated May 5, 2003, among Salt Holdings Corporation, Compass Minerals Group, Inc., as U.S. borrower, Sifto Canada Inc., as Canadian borrower, Salt Union Limited, as U.K. borrower, JPMorgan Chase Bank, as administrative agent, J.P. Morgan Bank Canada, as Canadian agent, and J.P. Morgan Europe Limited, as U.K. agent (incorporated herein by reference to Exhibit 10.6 to Salt Holdings’ Registration Statement on Form S-4, File No. 333-104603).

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COMPASS MINERALS INTERNATIONAL, INC.	2003 FORM 10-K

Exhibit
No.				Description of Exhibit
	10.13			Amendment No. 3 to the Amended and Restated Credit Agreement, dated May 21, 2003, among Salt Holdings Corporation, Compass Minerals Group, Inc., as U.S. borrower, Sifto Canada Inc., as Canadian borrower, Salt Union Limited, as U.K. borrower, JPMorgan Chase Bank, as administrative agent, J.P. Morgan Bank Canada, as Canadian agent, and J.P. Morgan Europe Limited, as U.K. agent (incorporated herein by reference to Exhibit 10.7 to Salt Holdings’ Registration Statement on Form S-4, File No. 333-104603).
	10.14			Amendment No. 4 to the Amended and Restated Credit Agreement and Waiver, dated November 17, 2003, among Compass Minerals International, Inc., Compass Minerals Group, Inc., as U.S. borrower, Sifto Canada Inc., as Canadian borrower, Salt Union Limited, as U.K. borrower, JPMorgan Chase Bank, as administrative agent, J.P. Morgan Bank Canada, as Canadian agent, and J.P. Morgan Europe Limited, as U.K. agent (incorporated herein by reference to Exhibit 10.8 to Compass Minerals’ Registration Statement on Form S-1, File No. 333-110250).
	10.15			U.S. Collateral and Guaranty Agreement, dated November 28, 2001, among Salt Holdings Corporation, Compass Minerals Group, Inc., Carey Salt Company, Great Salt Lake Minerals Corporation, GSL Corporation, NAMSCO Inc., North American Salt Company and JPMorgan Chase Bank, as collateral agent (incorporated herein by reference to Exhibit 10.8 to Salt Holdings’ Registration Statement on Form S-4, File No. 333-104603).
	10.16			U.S. Collateral Assignment, dated November 28, 2001, among Salt Holdings Corporation, Compass Minerals Group, Inc. and JPMorgan Chase Bank (incorporated herein by reference to Exhibit 10.9 to Salt Holdings’ Registration Statement on Form S-4, File No. 333-104603).
	10.17			Foreign Guaranty, dated November 28, 2001, among Sifto Canada Inc., Salt Union Limited, IMC Global (Europe) Limited, IMC Global (UK) Limited, London Salt Limited, Direct Salt Supplies Limited, J.T. Lunt & Co. (Nantwich) Limited, and JPMorgan Chase Bank, as collateral agent (incorporated herein by reference to Exhibit 10.10 to Salt Holdings’ Registration Statement on Form S-4, File No. 333-104603).
	10.18			Amended and Restated 2001 Stock Option Plan of Compass Minerals International, Inc., as adopted by the Board of Directors of Compass Minerals International, Inc. on December 11, 2003 (incorporated herein by reference to Exhibit 10.12 to Compass Minerals International’s Registration Statement on Form S-4, File No. 333-111953).
	10.19			Service Agreement, dated September 1, 1997, between Salt Union Limited and David J. Goadby (incorporated herein by reference to Exhibit 10.13 to Salt Holdings’ Registration Statement on Form S-4, File No. 333-104603).
	10.20			Investor Rights Agreement, dated November 28, 2001, between Salt Holdings Corporation and the holders of securities of Salt Holdings Corporation party thereto (incorporated herein by reference to Exhibit 10.14 to Salt Holdings’ Registration Statement on Form S-4, File No. 333-104603).
	10.21			Amended and Restated Stock Rights Agreement, dated as of June 23, 2003, by and among Salt Holdings Corporation, Apollo Management V, L.P., each of the stockholders listed on Schedule A attached thereto and IMC Global Inc. (incorporated herein by reference to Exhibit 10.15 to Salt Holdings’ Registration Statement on Form S-4, File No. 333-104603).
	10.22			Amended and Restated Management Consulting Agreement, dated December 10, 2003, between Compass Minerals International, Inc. and Apollo Management V, L.P. (incorporated herein by reference to Exhibit 10.16 to Compass Minerals International’s Registration Statement on Form S-4, File No. 333-111953).
	10.23			Master Assignment Agreement, dated April 10, 2002, among Compass Minerals Group, Inc., a Delaware corporation, the lenders party thereto and JPMorgan Chase Bank, as administrative agent for the Existing Lenders (as defined in the Master Assignment Agreement) (incorporated herein by reference to Exhibit 10.17 to Salt Holdings’ Registration Statement on Form S-4, File No. 333-104603).
	10.24			Employment Agreement, dated March 12, 2002, between Compass Minerals Group, Inc. and Michael E. Ducey (incorporated herein by reference to Exhibit 10.18 to Salt Holdings’ Registration Statement on Form S-4, File No. 333-104603).
	10.25			Rights Plan, dated as of December 11, 2003, between Compass Minerals International, Inc. and American Stock Transfer & Trust Company, as rights agent (incorporated herein by reference to Exhibit 10.25 to Compass Minerals International’s Registration Statement on Form S-4, File No. 333-111953).
	10.26			Certificate of Designation for the Series A Junior Participating Preferred Stock, par value $0.01 per share (included as Exhibit A to Exhibit 10.19).
	12.1**			Statement of Computation of Ratio of Earnings to Fixed Charges.
	14**			Compass Minerals International, Inc. Code of Ethics.
	21.1**			Subsidiaries of the Registrant.
	23.1*			Consent of Ernst & Young LLP.
	23.2*			Consent of PricewaterhouseCoopers LLP.
	31.1*			Section 302 Certifications of Michael E. Ducey, President and Chief Executive Officer.
	31.2*			Section 302 Certifications of Rodney L. Underdown, Chief Financial Officer and Vice President.
	32*			Certification Pursuant to 18 U.S.C.§1350 of Michael E. Ducey, President and Chief Executive Officer and Rodney L. Underdown, Chief Financial Officer and Vice President.

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*	Filed herewith.

**	Previously filed with Form 10-K

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COMPASS MINERALS INTERNATIONAL, INC.	2003 FORM 10-K

	COMPASS MINERALS INTERNATIONAL, INC.
	/s/ MICHAEL E. DUCEY
	_______________________________________
	Michael E. Ducey
	President and Chief Executive Officer

Date: November 12, 2004

	/s/ RODNEY L. UNDERDOWN
	_______________________________________
	Rodney L. Underdown
	Chief Financial Officer and Vice President

Date: November 12, 2004

     Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of Compass Minerals International, Inc. and in the capacities indicated on November 12, 2004.

Signature				Capacity
/s/ MICHAEL E. DUCEY Michael E. Ducey				President, Chief Executive Officer and Director (Principal Executive Officer)
/s/ RODNEY L. UNDERDOWN Rodney L. Underdown				Chief Financial Officer and Vice President (Principal Financial and Accounting Officer)
/s/ JOEL A. ASEN Joel A. Asen				Director
/s/ BRADLEY J. BELL Bradley J. Bell				Director
/s/ PETER P. COPSES Peter P. Copses				Director
/s/ ROBERT H. FALK Robert H. Falk				Director
/s/ RICHARD S. GRANT Richard S. Grant				Director
/s/ JOSHUA J. HARRIS Joshua J. Harris				Director
/s/ SCOTT M. KLEINMAN Scott M. Kleinman				Director
/s/ DOUGLAS A. PERTZ Douglas A. Pertz				Director
/s/ HEINN F. TOMFOHRDE, III Heinn F. Tomfohrde, III				Director

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