Fertilizers play a fundamental role in global agriculture by replacing the nutrients that crops remove from the soil, thereby sustaining the yield and quality of crops. Nitrogen, phosphate and potassium (potash) are the three primary nutrients essential to crop development.

According to the IFA, global consumption of these three principal crop nutrients in the 2006/2007 fertilizer year (the twelve months ended June 30, 2007) was approximately 181 million nutrient tons—108 million tons of nitrogen, or N (59%), 43 million tons of phosphate, or P 2O5 (24%), and 30 million tons of potash, or K2O (17%).

Over time, these relative percentages have remained fairly consistent. Fertilizer for commercial agriculture is the primary use of these nutrients, accounting for approximately 94% of total global consumption in 2005, according to the FAO. The balance was used primarily in industrial applications and livestock feed.

To meet the needs of the food and biofuel markets, the FAO estimates that world grain demand will grow 2.1% in the 2007/2008 fertilizer year, which despite expected record crops in some commodities, will cause grain inventories, or stocks, to remain at historic lows.

CIS forecasts that global markets for corn, soybeans and wheat will remain extremely tight as foreign markets look not only to meet their populations’ increasing demand but also to rebuild reserves which have recently fallen to unsustainable levels. Additionally, CIS expects U.S. ending corn stocks to be the lowest in ten years by 2009, even when assuming increased planted acreage and yields in the 2007/2008 fertilizer year.

The Company sells potash in various grades, colors and sizes typical to the industry.

The Company produces langbeinite in three grades: fine, standard and coarse. The distinctions are very similar to those of potash. In 2007, the Company’s langbeinite production represented 15% of world effective capacity from naturally occurring langbeinite deposits. The Company markets its langbeinite under the name Intrepid Trio.

The Company produces salt in three grades: fine, medium and coarse, which it sells as bagged or bulked out of its Moab Mine. The Company also sells salt in bulk form from its Wendover Facility.

The Company harvests magnesium chloride brines, which typically are used in the deicing and dedusting markets, during the last stages of evaporation in the solar ponds at its Wendover Facility.

The Company also produces metal recovery salts, which are mixtures of salt and potash. Metal recovery salts are blended in ratios requested by the Company’s customers and are sold primarily for use in the metallurgical processing industry.

Operating income increased $16.3 million, or 82%, from $20.0 million for the year ended December 31, 2006 to $36.3 million for the year ended December 31, 2007.

Net sales of potash increased $43.2 million, or 33%, from $130.3 million for the year ended December 31, 2006 to $173.5 million for the year ended December 31, 2007.

Net sales of langbeinite increased $8.7 million, or 85%, from $10.2 million for the year ended December 31, 2006 to $18.9 million for the year ended December 31, 2007.

Freight costs increased $8.9 million, or 73%, for the year ended December 31, 2007 compared to the year ended December 31, 2006.