Title of each class
|
Name of each exchange on which
registered
|
|
Series
B shares, in the form of American Depositary Shares
|
New
York Stock
Exchange
|
Series
A shares
|
142,819,552
|
Series
B shares
|
120,376,972
|
Page
|
|||
PRESENTATION
OF INFORMATION
|
iii
|
||
GLOSSARY
|
iii
|
||
CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
|
vi
|
||
PART
I
|
1
|
||
ITEM
1.
|
IDENTITY
OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
|
1
|
|
ITEM
2.
|
OFFER
STATISTICS AND EXPECTED TIMETABLE
|
1
|
|
ITEM
3.
|
KEY
INFORMATION
|
1
|
|
ITEM
4.
|
INFORMATION
ON THE COMPANY
|
13
|
|
ITEM
5.
|
OPERATING
AND FINANCIAL REVIEW AND PROSPECTS
|
49
|
|
ITEM
6.
|
DIRECTORS,
SENIOR MANAGEMENT AND EMPLOYEES
|
65
|
|
ITEM
7.
|
MAJOR
SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
|
77
|
|
ITEM
8.
|
FINANCIAL
INFORMATION
|
79
|
|
ITEM
9.
|
THE
OFFER AND LISTING
|
81
|
|
ITEM
10.
|
ADDITIONAL
INFORMATION
|
84
|
|
ITEM
11.
|
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
95
|
|
ITEM
12.
|
DESCRIPTION
OF SECURITIES OTHER THAN EQUITY SECURITIES
|
96
|
|
PART
II
|
97
|
||
ITEM
13.
|
DEFAULTS,
DIVIDEND ARREARAGES AND DELINQUENCIES
|
97
|
|
ITEM
14.
|
MATERIAL
MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
PROCEEDS
|
97
|
|
ITEM
15.
|
CONTROLS
AND PROCEDURES
|
97
|
|
ITEM
16.
|
RESERVED
|
98
|
|
ITEM
16.a.
|
AUDIT
COMMITTEE FINANCIAL EXPERT
|
98
|
|
ITEM
16.B.
|
CODE
OF ETHICS
|
98
|
|
ITEM
16.C
|
PRINCIPAL
ACCOUNTANT FEES AND SERVICES
|
98
|
|
ITEM
16.D
|
EXEMPTIONS
FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
|
99
|
|
ITEM
16.E
|
PURCHASES
OF EQUITY SECURITIES BY THE ISSUERS AND AFFILIATED
PURCHASERS.
|
99
|
|
ITEM
16.F
|
CHANGE
IN REGISTRANT'S CERTIFYING ACCOUNTANT.
|
99
|
|
ITEM
16.G
|
CORPORATE
GOVERNANCE.
|
99
|
|
PART
III
|
100
|
||
ITEM
17.
|
FINANCIAL
STATEMENTS
|
100
|
|
ITEM
18.
|
FINANCIAL
STATEMENTS
|
100
|
|
ITEM
19.
|
EXHIBITS
|
100
|
|
SIGNATURES
|
101
|
||
CONSOLIDATED
FINANCIAL STATEMENTS
|
102
|
||
EXHIBIT
1.1
|
|||
EXHIBIT
8.1
|
|||
EXHIBIT
12.1
|
|||
EXHIBIT
12.2
|
|||
EXHIBIT
13.1
|
|||
EXHIBIT
13.2
|
|
"assay
values" Chemical result or mineral component amount that
contains the sample.
|
|
"average global metallurgical
recoveries" Percentage
that measures the metallurgical treatment effectiveness based on the
quantitative relationship between the initial product contained in the
mine-extracted material and the final product produced in the
plant.
|
|
"average mining
exploitation
factor" Index or ratio that measures the mineral
exploitation effectivenes, based on the quantitative relationship between
(in-situ mineral minus exploitation losses) / in-situ
mineral.
|
|
“cash and cash
equivalents” The Financial
Accounting Standards Board (FASB) defines cash equivalents as highly
liquid securities with maturities of less than three months. Liquid
securities typically are those that can be sold easily with little or no
loss of value.
|
|
“Controller
Group” A person or company or group of persons or
companies that have executed a joint performance agreement, that have a
direct or indirect share in a company’s ownership and have the power to
influence the decisions of the company’s
management.
|
|
"Corfo" Production
Development Corporation (Corporación de Fomento de la
Producción), formed in 1939, a
national organization in charge of promoting Chile's manufacturing
productivity and commercial
development.
|
|
"cut-off
grade" The minimal assay value or chemical amount of
some mineral component above which exploitation is
economical.
|
|
"dilution" Loss
of mineral grade because of contamination with barren material (or waste)
incorporated in some exploited ore
mineral.
|
|
"exploitation
losses" Amounts of ore mineral that have not been
extracted in accordance with exploitation
designs.
|
|
"fertigation" The
process by which plant nutrients are applied to the ground using an
irrigation system.
|
|
"geostatistical
analysis" Statistical tools applied to mining planning,
geology and geochemical data that allow estimation of averages, grades and
quantities of mineral resources and
reserves.
|
|
"heap
leaching" A process whereby minerals are leached from a
heap, or pad, of crushed ore by leaching solutions percolating down
through the heap and collected from a sloping, impermeable liner below the
pad.
|
|
"horizontal
layering" Rock mass (stratiform seam) with generally
uniform thickness that conform to the sedimentary fields (mineralized and
horizontal rock in these cases).
|
|
"hypothetical
resources" Mineral resources that have limited
geochemical reconnaissance, based mainly on geological data and samples
assay values spaced between 500–1000
meters.
|
|
"Indicated Mineral
Resource" See "Resources—Indicated Mineral
Resource."
|
|
"Inferred Mineral
Resource" See "Resources—Inferred Mineral
Resource."
|
|
"industrial
crops" Refers to crops that require processing after
harvest in order to be ready for consumption or sale. Tobacco,
tea and seed crops are examples of industrial
crops.
|
|
“Kriging Method” A technique used
to estimate ore reserves, in which the spatial distribution of continuous
geophysical variables is estimated using control points where values are
known.
|
|
"LIBOR" London
Inter Bank Offered Rate.
|
|
"limited
reconnaissance" Low or limited level of geological
knowledge.
|
|
"Measured Mineral
Resource" See "Resources—Measured Mineral
Resource."
|
|
"metallurgical
treatment" A set of chemical and physical processes
applied to rocks to extract their useful minerals (or
metals).
|
|
"ore
depth" Depth of the mineral that may be economically
exploited.
|
|
"ore
type" Main mineral having economic value contained in
the caliche ore (sodium nitrate or
iodine).
|
|
"ore" A
mineral or rock from which a substance having economic value may be
extracted.
|
|
"Probable Mineral
Reserve" See "Reserves—Probable Mineral
Reserve."
|
|
"Proved Mineral
Reserve" See "Reserves—Proved Mineral
Reserve."
|
|
"Reserves—Probable Mineral
Reserve"* The economically mineable part of an Indicated
Mineral Resource and, in some circumstances, Measured Mineral Resource.
The calculation of the reserves includes diluting of materials and
allowances for losses which may occur when the material is
mined. Appropriate assessments, which may include feasibility
studies, have been carried out and include consideration of and
modification by realistically assumed mining, metallurgical, economic,
marketing, legal, environmental, social and governmental factors. These
assessments demonstrate at the time of reporting that extraction is
reasonably justified. A Probable Mineral Reserve has a lower level of
confidence than a Proved Mineral
Reserve.
|
|
"Reserves—Proved Mineral
Reserve"* The economically mineable part of a Measured
Mineral Resource. The calculation of the reserves includes
diluting materials and allowances for losses which may occur when the
material is mined. Appropriate assessments, which may include
feasibility studies, have been carried out and include consideration of
and modification by realistically assumed mining, metallurgical, economic,
marketing, legal, environmental, social and governmental
factors. These assessments demonstrate at the time of reporting
that extraction is reasonably
justified.
|
|
"Resources—Indicated Mineral
Resource"* That part of a Mineral Resource for which
tonnage, densities, shape, physical characteristics, grade and mineral
content can be estimated with a reasonable level of
confidence. The calculation is based on exploration, sampling
and testing information gathered through appropriate techniques from
locations such as outcrops, trenches, pits, workings, and drill
holes. The locations are too widely or inappropriately spaced
to confirm geological continuity and/or grade continuity but are spaced
closely enough for continuity to be assumed. An Indicated
Mineral Resource has a lower level of confidence than that applying to a
Measured Mineral Resource, but has a higher level of confidence than that
applying to an Inferred Mineral
Resource.
|
|
"Resources—Inferred Mineral
Resource"* That part of a Mineral Resource for which
tonnage, grade and mineral content can be estimated with a low level of
confidence, by inferring them on the basis of geological evidence and
assumed but not verified geological and/or grade
continuity. The estimate is based on information gathered
through appropriate techniques from locations such as outcrops, trenches,
pits, workings and drill holes, and this information is of limited or
uncertain quality and/or reliability. An Inferred Mineral
Resource has a lower level of confidence than that applying to an
Indicated Mineral Resource.
|
|
"Resources—Measured Mineral
Resource" The part of a Mineral Resource for which
tonnage, densities, shape, physical characteristics, grade and mineral
content can be estimated with a high level of confidence. The estimate is
based on detailed and reliable exploration, sampling and testing
information gathered through appropriate techniques from locations such as
outcrops, trenches, pits, workings, and drill holes. The
locations are spaced closely enough to confirm geological and/or grade
continuity.
|
|
A
deposit may be classified as a Measured Mineral Resource when the nature,
quality, amount and distribution of data are such as to leave no
reasonable doubt, in the opinion of the Competent Person determining the
Mineral Resource, that the tonnage and grade of the deposit can be
estimated within close limits and that any variation from the estimate
would not significantly affect potential economic
viability. This category requires a high level of confidence
in, and understanding of, the geology and controls of the mineral deposit.
Confidence in the estimate is sufficient to allow the appropriate
application of technical and economic parameters and to enable an
evaluation of economic viability.
|
|
“vat
leaching” A process whereby minerals are extracted from
crushed ore by placing the ore in large vats containing
leaching solutions.
|
|
"waste" Rock
or mineral which is not economical for metallurgical
treatment.
|
|
"Weighted Average
Age" The sum of the product of the age of each fixed
asset at a given facility and its current gross book value as of December
31, 2008 divided by the total gross book value of the Company's fixed
assets at such facility as of December 31,
2008.
|
*
|
The
definitions we use for resources and reserves are based on those provided
by the “Instituto de
Ingenieros de Minas de Chile” (Chilean Institute of Mining
Engineers).
|
**
|
The
definition of a Controller Group that has been provided is the one that
applies to the Company. Chilean law provides for a broader
definition of a Controller Group.
|
|
·
|
the
Company's capital investment program and development of new
products;
|
|
·
|
trends
affecting the Company's financial condition or results of
operations;
|
|
·
|
level
of production, quality of the ore and brines, and production
yields;
|
|
·
|
the
future impact of competition;
|
|
·
|
any
statements preceded by, followed by, or that include the words "believe,"
"expect," "predict," "anticipate," "intend," "estimate," "should," "may,"
"could" or similar expressions; and
|
|
·
|
other
statements contained in this Form 20-F that are not historical
facts.
|
|
·
|
SQM's
ability to implement its capital expenditures, including its ability to
arrange financing when required;
|
|
·
|
the
nature and extent of future competition in SQM's principal
markets;
|
|
·
|
political,
economic and demographic developments in the emerging market countries of
Latin America and Asia where SQM conducts a large portion of its business;
and
|
|
·
|
the
factors discussed below under Item 3. Key Information—Risk
Factors.
|
ITEM
1.
|
IDENTITY
OF DIRECTORS, SENIOR MANAGEMENT AND
ADVISERS
|
ITEM
2.
|
OFFER
STATISTICS AND EXPECTED TIMETABLE
|
ITEM
3.
|
KEY
INFORMATION
|
Year
ended December 31,
|
||||||||||||||||||||
2008
|
2007
|
2006
|
2005
|
2004
|
||||||||||||||||
Income
Statement Data
|
(in millions of
US$) (1)
|
|||||||||||||||||||
Chilean GAAP
|
||||||||||||||||||||
Total
Revenues
|
1,774.1 | 1,187.5 | 1,042.9 | 896.0 | 788.5 | |||||||||||||||
Operating
Income
|
632.2 | 259.5 | 219.9 | 181.2 | 124.1 | |||||||||||||||
Non-operating
results, net
|
(19.3 | ) | (27.1 | ) | (36.1 | ) | (34.4 | ) | (17.6 | ) | ||||||||||
Net
income
|
501.4 | 180.0 | 141.3 | 113.5 | 74.2 | |||||||||||||||
Net
earnings per share (2)
|
1.91 | 0.68 | 0.54 | 0.43 | 0.28 | |||||||||||||||
Net
earnings per ADR (2) (3)
|
1.91 | 0.68 | 0.54 | 0.43 | 0.28 | |||||||||||||||
Dividend
per share (4) (5)
|
1.24 | 0.44 | 0.35 | 0.28 | 0.18 | |||||||||||||||
Weighted
average shares outstanding (000s) (2)
|
263,197 | 263,197 | 263,197 | 263,197 | 263,197 |
US GAAP
|
||||||||||||||||||||
Total
Revenues
|
1,774.1 | 1,187.5 | 1,042.9 | 896.0 | 788.5 | |||||||||||||||
Operating
Income
|
623.0 | 237.0 | 205.5 | 163.9 | 114.6 | |||||||||||||||
Non-operating
results, net (6)
|
(26.9 | ) | 1.7 | (14.1 | ) | (6.1 | ) | (1.6 | ) | |||||||||||
Equity
participation in income (loss) of related companies, net
|
14.4 | 3.6 | 2.0 | 2.6 | 1.8 | |||||||||||||||
Net
income
|
500.9 | 192.7 | 154.3 | 125.2 | 86.8 | |||||||||||||||
Basic
and diluted earnings per share
|
1.90 | 0.73 | 0.59 | 0.48 | 0.33 | |||||||||||||||
Basic
and diluted earnings per ADR (3)
|
1.90 | 0.73 | 0.59 | 0.48 | 0.33 | |||||||||||||||
Weighted
average shares outstanding (000s) (2)
|
263,197 | 263,197 | 263,197 | 263,197 | 263,197 |
As
of December 31,
|
||||||||||||||||||||
2008
|
2007
|
2006
|
2005
|
2004
|
||||||||||||||||
Balance
Sheet Data
|
(in millions of
US$) (1)
|
|||||||||||||||||||
Chilean GAAP
|
|
|
|
|
|
|||||||||||||||
Total
assets
|
2,567.2 | 1,986.3 | 1,871.2 | 1,640.6 | 1,361.4 | |||||||||||||||
Long-term
debt
|
515.9 | 486.7 | 480.7 | 100.0 | 200.0 | |||||||||||||||
Total
shareholders’ equity
|
1,463.1 | 1,182.4 | 1,085.9 | 1,020.4 | 948.6 | |||||||||||||||
Capital
stock
|
477.4 | 477.4 | 477.4 | 477.4 | 477.4 | |||||||||||||||
US GAAP
|
||||||||||||||||||||
Total
assets
|
2,549.1 | 1,959.6 | 1,846.0 | 1,609.0 | 1,318.5 | |||||||||||||||
Long-term
debt
|
514.5 | 485.0 | 478.7 | 100.0 | 200.0 | |||||||||||||||
Total
shareholders’ equity
|
1,368.0 | 1,084.1 | 994.5 | 923.4 | 856.9 | |||||||||||||||
Capital
stock
|
479.3 | 479.3 | 479.3 | 479.3 | 479.3 |
Observed
Exchange Rate (1)
|
||||||||||||||||
Ch$
per US$
|
||||||||||||||||
Year/Month
|
Low (1)
|
High (1)
|
Average
(2)(3)
|
Year/Month
End
|
||||||||||||
2004
|
559.21 | 649.45 | 612.13 | 559.83 | ||||||||||||
2005
|
509.70 | 592.75 | 559.27 | 514.21 | ||||||||||||
2006
|
511.44 | 549.63 | 531.03 | 534.43 | ||||||||||||
2007
|
493.14 | 548.67 | 521.95 | 495.82 | ||||||||||||
2008
|
431.22 | 676.75 | 528.88 | 629.11 | ||||||||||||
Dec-08
|
625.59 | 674.83 | 649.32 | 629.11 | ||||||||||||
Jan-09
|
610.09 | 643.87 | 623.01 | 612.43 | ||||||||||||
Feb-09
|
583.32 | 623.87 | 606.00 | 595.76 | ||||||||||||
Mar-09
|
572.39 | 614.85 | 592.93 | 582.10 | ||||||||||||
Apr-09
|
575.12 | 601.04 | 583.18 | 588.62 | ||||||||||||
May-09
|
558.95 | 580.10 | 565.72 | 564.64 |
|
(1)
|
Observed
exchange rates are the actual high and low on a day-to-day basis, for each
period.
|
|
(2)
|
The
yearly average rate is calculated as the average of the exchange rates on
the last day of each month during the
period.
|
|
(3)
|
The
monthly average rate is calculated on a day-to-day basis for each
month.
|
ITEM
4.
|
INFORMATION
ON THE COMPANY
|
2008
|
2007
|
2006
(2)
|
||||||||||
(in
millions of US$)
|
||||||||||||
Capital
Expenditures (1)
|
286.6 | 185.0 | 290.5 |
|
(1)
|
For
purposes of this item, capital expenditures include investments aimed at
sustaining, improving or increasing production levels, including
acquisitions and investments in related
companies.
|
|
(2)
|
Includes
acquisition of DSM’s iodine business for a total of US$72 million, plus
all the cash, accounts receivable and final product inventories minus the
total liabilities of the Chilean and Dutch companies considered in the
transaction.
|
|
·
|
completion
of lithium carbonate facility
expansion;
|
|
·
|
start-up
of construction of a new potassium nitrate production facility at Coya
Sur;
|
|
·
|
start-up
of investments related to increase production capacity of potassium-based
products at the Salar de Atacama;
|
|
·
|
upgrade
of our railroad system to handle expanded
capacity;
|
|
·
|
construction
of a new mining camp at María Elena;
and
|
|
·
|
various
projects designed to maintain capacity, increase yields and reduce
costs.
|
|
·
|
new
potassium nitrate production facility at Coya
Sur;
|
|
·
|
investments
related to increase production capacity of potassium-based products at the
Salar de Atacama;
|
|
·
|
upgrade
of our railroad system to handle expanded capacity;
and
|
|
·
|
various
projects designed to maintain capacity, increase yields and reduce
costs.
|
2008
|
2007
|
2006
|
2005
|
2004
|
||||||||||||||||
Specialty
Plant Nutrition
|
55 | % | 49 | % | 48 | % | 54 | % | 54 | % | ||||||||||
Iodine
and Derivatives
|
14 | % | 18 | % | 21 | % | 17 | % | 14 | % | ||||||||||
Lithium
and Derivatives
|
10 | % | 15 | % | 12 | % | 9 | % | 8 | % | ||||||||||
Industrial
Chemicals
|
7 | % | 7 | % | 7 | % | 8 | % | 9 | % | ||||||||||
Potassium
Chloride
|
8 | % | 4 | % | 3 | % | 4 | % | 5 | % | ||||||||||
Other
Commodity Fertilizers
|
6 | % | 7 | % | 9 | % | 8 | % | 10 | % | ||||||||||
Total
|
100 | % | 100 | % | 100 | % | 100 | % | 100 | % |
·
|
Caliche
ore deposits: contain nitrates and
iodine.
|
·
|
Salar
brines: contain potassium, lithium, sulfate and
boron.
|
|
·
|
are
fully water soluble, allowing their use in hydroponics, fertigation,
foliar applications and other advanced agricultural
techniques;
|
|
·
|
are
absorbed more rapidly by plants because they do not require nitrification,
unlike ammonia-based fertilizers;
|
|
·
|
are
free of chlorine content, reducing the risk of scorching roots and other
problems caused by chlorine;
|
|
·
|
do
not release hydrogen after application, thereby avoiding increased soil
acidity;
|
|
·
|
possess
trace elements, which promote disease resistance in plants and have other
beneficial effects;
|
|
·
|
are
more attractive to customers who prefer products of natural origin;
and
|
|
·
|
are
more efficient than commodity fertilizers because they deliver more
nutrients per unit of product
applied.
|
2008
|
2007
|
2006
|
2005
|
2004
|
||||||||||||||||
Sales Volume (in metric
tons)
|
||||||||||||||||||||
Sodium
nitrate
|
22,800 | 45,900 | 43,300 | 63,300 | 58,900 | |||||||||||||||
Potassium
nitrate and sodium potassium nitrate
|
538,200 | 695,300 | 615,000 | 690,200 | 707,600 | |||||||||||||||
Potassium
sulfate
|
138,300 | 172,000 | 172,400 | 178,600 | 157,700 | |||||||||||||||
Blended
and other specialty plant nutrients(1)
|
309,000 | 378,600 | 393,800 | 350,700 | 374,400 | |||||||||||||||
Revenues
(in US$ millions)
|
978.9 | 580.8 | 503.1 | 487.8 | 426.8 |
|
(1)
|
Includes
blended and other specialty plant nutrients. It also includes
Yara's products sold pursuant to our commercial
agreement.
|
Sales
Breakdown
|
2008
|
2007
|
2006
|
2005
|
2004
|
|||||||||||||||
Central
& South America
|
34 | % | 28 | % | 29 | % | 29 | % | 29 | % | ||||||||||
North
America
|
19 | % | 23 | % | 22 | % | 22 | % | 22 | % | ||||||||||
Europe
|
20 | % | 19 | % | 19 | % | 20 | % | 19 | % | ||||||||||
Others
|
20 | % | 20 | % | 21 | % | 20 | % | 20 | % | ||||||||||
Chile
|
7 | % | 10 | % | 9 | % | 9 | % | 10 | % |
2008
|
2007
|
2006
|
2005
|
2004
|
||||||||||||||||
Sales
Volume (thous. metric tons)
|
||||||||||||||||||||
Iodine
and derivatives
|
10.5 | 9.1 | 9.8 | 8.1 | 7.7 | |||||||||||||||
Revenues
(in US$ millions)
|
246.9 | 215.1 | 217.7 | 149.1 | 110.5 |
Sales
Breakdown
|
2008
|
2007
|
2006
|
2005
|
2004
|
|||||||||||||||
Europe
|
30 | % | 31 | % | 34 | % | 30 | % | 27 | % | ||||||||||
North
America
|
40 | % | 38 | % | 40 | % | 37 | % | 38 | % | ||||||||||
Central
& South America
|
2 | % | 5 | % | 5 | % | 13 | % | 13 | % | ||||||||||
Others
|
28 | % | 26 | % | 21 | % | 20 | % | 22 | % |
2008
|
2007
|
2006
|
2005
|
2004
|
||||||||||||||||
Sales
Volume (thous. metric tons)
|
||||||||||||||||||||
Lithium
and derivatives
|
27.9 | 28.6 | 30.4 | 27.8 | 31.2 | |||||||||||||||
Revenues
(in US$ millions)
|
172.3 | 179.8 | 128.9 | 81.4 | 62.6 |
Sales
Breakdown
|
2008
|
2007
|
2006
|
2005
|
2004
|
|||||||||||||||
Europe
|
31 | % | 34 | % | 32 | % | 33 | % | 32 | % | ||||||||||
North
America
|
18 | % | 21 | % | 24 | % | 25 | % | 26 | % | ||||||||||
Asia
& Oceania
|
48 | % | 38 | % | 36 | % | 31 | % | 37 | % | ||||||||||
Others
|
2 | % | 7 | % | 8 | % | 11 | % | 5 | % |
2008
|
2007
|
2006
|
2005
|
2004
|
||||||||||||||||
Sales
Volume (metric tons)
|
||||||||||||||||||||
Industrial
nitrates
|
161,900 | 175,200 | 162,000 | 176,300 | 192,800 | |||||||||||||||
Boric
Acid
|
7,200 | 9,200 | 9,700 | 6,300 | 6,120 | |||||||||||||||
Revenues
(in US$ millions)
|
123.6 | 81.2 | 71.3 | 70.5 | 68.8 |
Sales
Breakdown
|
2008
|
2007
|
2006
|
2005
|
2004
|
|||||||||||||||
North
America
|
34 | % | 40 | % | 41 | % | 42 | % | 38 | % | ||||||||||
Europe
|
38 | % | 34 | % | 29 | % | 28 | % | 23 | % | ||||||||||
Central
& South America
|
18 | % | 17 | % | 17 | % | 17 | % | 24 | % | ||||||||||
Others
|
10 | % | 9 | % | 13 | % | 13 | % | 15 | % |
2008
|
2007
|
2006
|
2005
|
2004
|
||||||||||||||||
Sales
Volume (thous. metric tons)
|
||||||||||||||||||||
Potassium
Chloride
|
185.6 | 179.0 | 126.4 | 128.8 | 210.4 | |||||||||||||||
Revenues
(in US$ millions)
|
140.0 | 51.3 | 32.1 | 32.4 | 36.7 |
Sales
Breakdown
|
2008
|
2007
|
2006
|
2005
|
2004
|
|||||||||||||||
Chile
|
58 | % | 63 | % | 62 | % | 82 | % | 85 | % | ||||||||||
Latin
America
|
23 | % | 18 | % | 17 | % | 18 | % | 14 | % | ||||||||||
Others
|
19 | % | 11 | % | 0 | % | 0 | % | 1 | % |
·
|
Securing
the health, safety and well-being of people at
work;
|
·
|
Protecting
nearby communities against risks to health or safety arising out of or in
connection with mining operations in the
vicinity;
|
·
|
Controlling
the use and storage of explosive, highly flammable or otherwise dangerous
substances;
|
·
|
Controlling
the emission or pollution into the atmosphere of noxious or offensive
substances.
|
Main subsidiaries
|
Activity
|
Country of
Incorporation
|
SQM Beneficial
Ownership
Interest
(Direct/Indirect)
|
|||||
SQM
Nitratos S.A.
|
Extracts
and sells caliche ore to subsidiaries and affiliates of
SQM
|
Chile
|
100 | % | ||||
SQM
Industrial S.A.
|
Produces
and markets the Company’s products directly and through other subsidiaries
and affiliates of SQM
|
Chile
|
100 | % | ||||
SQM
Salar S.A.
|
Exploits
the Salar de Atacama to produce and market the Company’s products directly
and through other subsidiaries and affiliates of SQM
|
Chile
|
100 | % | ||||
Minera
Nueva Victoria S.A.
|
Produces
and markets the Company’s products directly and through other subsidiaries
and affiliates of SQM
|
Chile
|
100 | % | ||||
Servicios
Integrales de Tránsitos y Transferencias S.A. (SIT)
|
Owns
and operates a rail transport system and also owns and operates the
Tocopilla port facilities
|
Chile
|
100 | % | ||||
Soquimich
Comercial S.A.
|
Markets
the Company’s specialty plant nutrition products domestically and imports
fertilizers for resale in Chile
|
Chile
|
61 | % | ||||
Ajay-SQM
Chile S.A.
|
Produces
and markets the Company’s iodine and iodine derivatives
|
Chile
|
51 | % | ||||
Sales
and distribution subsidiaries in the United States, Belgium, Brazil,
Venezuela, Ecuador, Peru, Argentina, Mexico, South Africa and other
locations.
|
Market
the Company’s products throughout the world
|
Various
|
4.D. Property,
Plant and Equipment
|
Exploitation Concessions
|
Exploration Concessions
|
Total
|
||||||||||||||||||||||
Mines (1)
|
Total
number
|
Hectares
|
Total
number
|
Hectares
|
Total
number
|
Hectares
|
||||||||||||||||||
Pedro
de Valdivia
|
584 | 148,802 | 3 | 700 | 587 | 149,502 | ||||||||||||||||||
Maria
Elena
|
617 | 183,104 | 23 | 7,800 | 640 | 190,904 | ||||||||||||||||||
Pampa
Blanca
|
463 | 136,882 | 1 | 400 | 464 | 137,282 | ||||||||||||||||||
Nueva
Victoria (2)
|
341 | 88,896 | 52 | 22,500 | 393 | 111,396 | ||||||||||||||||||
Salar
de Atacama
|
392 | 260,685 | 2,442 | 960,890 | 2,834 | 1,221,575 | ||||||||||||||||||
Subtotal
mines
|
2,397 | 818,369 | 2,521 | 992,290 | 4,918 | 1,810,659 | ||||||||||||||||||
Other
caliche areas
|
7,446 | 1,662,618 | 923 | 285,100 | 8,369 | 1,947,718 | ||||||||||||||||||
Other
salars and other areas
|
573 | 115,884 | 212 | 54,218 | 785 | 170,102 | ||||||||||||||||||
Subtotal
other areas
|
8,019 | 1,778,502 | 1,135 | 339,318 | 9,154 | 2,117,820 | ||||||||||||||||||
Total
|
10,416 | 2,596,871 | 3,656 | 1,331,608 | 14,072 | 3,928,479 |
|
(1)
|
We
have included in this table both concessions that have been granted and
concessions in the process of being
granted.
|
|
(2)
|
Nueva
Victoria amounts include the Mapocho and Soronal properties, which were
presented separately in our 2006 Annual Report on Form
20-F.
|
(Values in thousands unless
otherwise stated)
|
2008
|
2007
|
2006
|
|||||||||
Pedro
de Valdivia
|
||||||||||||
Metric
tons of ore mined
|
11,003 | 10,670 | 11,652 | |||||||||
Average
grade nitrate (% by weight)
|
7.1 | 7.5 | 7.4 | |||||||||
Iodine
(parts per million (ppm))
|
345 | 354 | 399 | |||||||||
Metric
tons of crystallized nitrate produced
|
407 | 422 | 454 | |||||||||
Metric tons of iodine
produced
|
2.2 | 2.3 | 2.5 | |||||||||
María
Elena (1)
|
||||||||||||
Metric
tons of ore mined
|
4,683 | 4,651 | 5,682 | |||||||||
Average
grade nitrate (% by weight)
|
7.1 | 7.4 | 7.5 | |||||||||
Iodine
(ppm)
|
358 | 363 | 399 | |||||||||
Metric
tons of crystallized nitrate produced
|
454 | 424 | 503 | |||||||||
Metric
tons of iodine produced
|
1.0 | 1.0 | 1.3 | |||||||||
Pampa
Blanca
|
||||||||||||
Metric
tons of ore mined
|
3,811 | 3,108 | 4,832 | |||||||||
Iodine
(ppm)
|
533 | 527 | 530 | |||||||||
Metric
tons of iodine produced
|
1.1 | 1.1 | 1.4 | |||||||||
Nueva
Victoria (2)
|
||||||||||||
Metric
tons of ore mined
|
15,760 | 12,285 | 14,635 | |||||||||
Iodine
(ppm)
|
475 | 495 | 490 | |||||||||
Metric
tons of iodine produced
|
4.0 | 3.7 | 4.6 | |||||||||
Salar
de Atacama
|
||||||||||||
Metric
tons of lithium carbonate produced (3)
|
30 | 30 | 29 | |||||||||
Metric
tons of potassium chloride produced
|
700 | 611 | 539 | |||||||||
Metric
tons of potassium sulfate produced
|
163 | 157 | 170 | |||||||||
Metric
tons of boric acid produced
|
8 | 7 | 8 |
|
(1)
|
Includes
production at Coya Sur from treatment of fines from María Elena and Pedro
de Valdivia and nitrates from pile treatment at Pampa
Blanca.
|
|
(2)
|
Includes the Iris mining
property, which was acquired in 2006 and was presented separately in the
2006 Annual Report on Form 20-F. Nueva Victoria extraction
yields were higher in 2006 than they were in 2007 because they
reflect extraction
yields from the Iris property, which SQM continued to exploit for the
first six months of 2006, subsequent to the acquisition. The
Iris property has been operating since December 2008, and it is located
next to Nueva Victoria
operations.
|
|
(3)
|
Lithium carbonate is extracted at
the Salar de Atacama and processed at our facilities at the Salar del
Carmen.
|
Mine
|
Proven Reserves (1)
(millions of metric tons)
|
Nitrate Average Grade
(percentage by weight)
|
Iodine Average Grade
(parts per million)
|
|||||||||
Pedro
de Valdivia
|
156.7 | 7.1 | % | 367 | ||||||||
María
Elena
|
140.5 | 7.3 | % | 413 | ||||||||
Pampa
Blanca
|
75.5 | 5.6 | % | 547 | ||||||||
Nueva
Victoria (2)
|
299.0 | 5.8 | % | 434 |
Mine
|
Probable Reserves (1) (3)
(millions of metric tons)
|
Nitrate Average Grade
(percentage by weight)
|
Iodine Average Grade
(parts per million)
|
|||||||||
Pedro
de Valdivia
|
116.7 | 6.9 | % | 447 | ||||||||
María
Elena
|
97.6 | 7.3 | % | 380 | ||||||||
Pampa
Blanca
|
447.8 | 5.8 | % | 538 | ||||||||
Nueva
Victoria (2)
|
132.6 | 5.4 | % | 405 |
(1)
|
The proven and probable
reserves set forth in the tables above are shown before losses related to
exploitation and mineral treatment. Proven and probable
reserves are affected by mining exploitation methods, which result in
differences between the estimated reserves that are available for
exploitation in the mining plan and the recoverable material that is
finally transferred to the leaching vats or heaps. The average mining
exploitation factor for our different mines ranges between 80% and 90%,
whereas the average global metallurgical recoveries of processes for
nitrate and iodine contained in the recovered material vary between 55%
and 65%.
|
(2)
|
Proven
and probable reserves for Nueva Victoria include the Soronal and Mapocho
mining properties, which were presented separately in the Company’s 2006
Annual Report on Form 20-F. Nueva Victoria also includes the
reserves for the former Iris mining property, which was acquired from DSM
in 2006.
|
(3)
|
Probable
reserves amounts can be transformed in order to obtain amounts expressed
as proven reserves. On average, the transformation factor to
express probable reserves as proven reserves is higher than
60%. This factor depends on geological conditions and caliche
ore continuity, which vary from mine to mine. The difference
between the probable reserve amounts and the transformed probable reserve
amounts is the result of the lower degree of certainty pertaining to
probable reserves compared with proven
reserves.
|
Proven Reserves (1)
(millions of metric tons)
|
Probable Reserves (1)
(millions of metric tons)
|
|||||||
Potassium
(K +)
(2)
|
50.3 | 11.1 | ||||||
Sulfate
(SO4 2-)
(3)
|
35.2 | 1.9 | ||||||
Lithium
(Li +)
(4)
|
2.7 | 2.6 | ||||||
Boron
(B 3+)
(5)
|
0.9 | 0.3 |
(1)
|
Metric
tons of potassium, sulfate, lithium and boron considered in the proven and
probable reserves are shown before losses from evaporation processes and
metallurgical treatment. The recoveries of each ion depend on
both brine composition, which changes over time, and the process applied
to produce the desired commercial
products.
|
(2)
|
Recoveries
for potassium vary from 47% to 70%.
|
(3)
|
Recoveries
for sulfate vary from 27% to 45%.
|
(4)
|
Recoveries
for lithium vary from 28% to 37%.
|
(5)
|
Recoveries
for boron vary from 28% to 32%.
|
Location
|
Type of Facility
|
Approximate Size (Hectares)
|
||||
Pedro
de Valdivia (1)
|
Nitrates
and iodine production
|
126 | ||||
María
Elena (1)
|
Nitrates
and iodine production
|
110 | ||||
Coya
Sur (1)
|
Nitrates
and iodine production
|
232 | ||||
Pampa
Blanca (1)
|
Concentrated
nitrate salts and iodine production
|
111 | ||||
Nueva
Victoria (2)
|
Iodine
production
|
239 | ||||
Salar
de Atacama (1)(3)
|
Potassium
chloride, lithium chloride, potassium sulfate and boric
acid
|
2,395 | ||||
Salar
del Carmen, Antofagasta (1)
|
Lithium
carbonate and lithium hydroxide production
|
62 | ||||
Tocopilla
|
Port
facilities
|
21.5 |
|
(1)
|
Includes
production facilities, solar evaporation ponds and leaching
heaps.
|
|
(2)
|
Includes
production facilities and solar evaporation
ponds.
|
|
(3)
|
We
lease the exploitation rights used at the Salar de Atacama from
Corfo.
|
|
·
|
Specialty
plant nutrition: production and commercialization of specialty
fertilizers.
|
|
·
|
Iodine
and derivatives: production and commercialization of iodine and
derivatives.
|
|
·
|
Lithium
and derivatives: production and commercialization of lithium and
derivatives.
|
|
·
|
Industrial
chemicals: production and commercialization of industrial
nitrates, and boric acid.
|
|
·
|
Potassium
chloride: production and commercialization of potassium
chloride
|
|
·
|
Other
commodity fertilizers: production and commercialization of other commodity
fertilizers.
|
|
·
|
Trends
in demand for and supply of our products. See Item
5.D. Trend Information;
|
|
·
|
Efficiently operating
our facilities, as some of them run at nameplate
capacity;
|
|
·
|
Our
ability to accomplish our capital expenditures program in a timely manner,
as we are the main supplier in our core
businesses;
|
|
·
|
Trends
in the exchange rate between the U.S. dollar and Chilean peso, as a
significant portion of the cost of sales is related to the Chilean
peso;
|
|
·
|
Trends
in the exchange rate between the U.S. dollar and the Euro, as a
significant portion of our sales are denominated in Euros;
and
|
|
·
|
Energy,
logistics, raw materials and maintenance costs, See Item 5.D. Trend
information.
|
Year
ended December 31,
|
||||||||||||||||||||||||
2008
|
2007
|
2006
|
||||||||||||||||||||||
US$
|
%
|
US$
|
%
|
US$
|
%
|
|||||||||||||||||||
Specialty
plant nutrition
|
978.9 | 55 | 580.0 | 49 | 503.1 | 48 | ||||||||||||||||||
Iodine
and derivatives
|
246.9 | 14 | 215.1 | 18 | 217.7 | 21 | ||||||||||||||||||
Lithium
and derivatives
|
172.3 | 10 | 179.8 | 15 | 128.9 | 12 | ||||||||||||||||||
Industrial
chemicals
|
123.6 | 7 | 81.2 | 7 | 71.3 | 7 | ||||||||||||||||||
Potassium
chloride
|
140.0 | 8 | 51.3 | 4 | 32.0 | 3 | ||||||||||||||||||
Other
commodity fertilizers(1)
|
112.3 | 6 | 79.4 | 7 | 89.9 | 9 | ||||||||||||||||||
Total
|
1,774.1 | 100 | 1,187.5 | 100 | 1,042.9 | 100 |
(1)
|
Primarily
imported fertilizers distributed in
Chile.
|
Year
ended December 31,
|
||||||||||||||||||||||||
2008
|
2007
|
2006
|
||||||||||||||||||||||
US$
|
%
|
US$
|
%
|
US$
|
%
|
|||||||||||||||||||
Total
revenues
|
1,774.1 | 100.0 | 1,187.5 | 100.0 | 1,042.9 | 100.0 | ||||||||||||||||||
Cost
of goods sold
|
(1,056.2 | ) | (59.5 | ) | (857.7 | ) | (72.2 | ) | (753.3 | ) | (72.2 | ) | ||||||||||||
Gross
margin
|
717.9 | 40.5 | 329.8 | 27.8 | 289.6 | 27.8 | ||||||||||||||||||
Selling
and administrative expenses
|
(85.7 | ) | (4.8 | ) | (70.3 | ) | (5.9 | ) | (69.7 | ) | (6.7 | ) | ||||||||||||
Operating
income
|
632.2 | 35.6 | 259.5 | 21.9 | 219.9 | 21.1 | ||||||||||||||||||
Non-operating
income
|
40.7 | 1.4 | 25.9 | 2.2 | 19.2 | 1.8 | ||||||||||||||||||
Non-operating
expenses
|
(60.0 | ) | (2.5 | ) | (53.0 | ) | (4.5 | ) | (55.3 | ) | (5.3 | ) | ||||||||||||
Income
before income taxes
|
612.9 | 34.5 | 232.4 | 19.6 | 183.8 | 17.6 | ||||||||||||||||||
Income
tax
|
(108.0 | ) | (6.1 | ) | (48.6 | ) | (4.1 | ) | (37.9 | ) | (3.6 | ) | ||||||||||||
Minority
interest
|
(3.5 | ) | (0.2 | ) | (3.8 | ) | (0.3 | ) | (4.7 | ) | (0.5 | ) | ||||||||||||
Amortization
of negative goodwill
|
0.0 | 0.0 | 0.0 | 0.0 | 0.1 | 0.0 | ||||||||||||||||||
Net
income
|
501.4 | 28.3 | 180.0 | 15.2 | 141.3 | 13.5 |
2008
|
2007
|
%
Change
|
||||||||||||
Sodium
nitrate
|
Th.
Ton
|
22.8 | 45.9 | (50 | )% | |||||||||
Potassium
nitrate and sodium potassium nitrate
|
Th.
Ton
|
538.2 | 695.3 | (23 | )% | |||||||||
Blended
and other specialty fertilizers
|
Th.
Ton
|
205.9 | 261.5 | (21 | )% | |||||||||
Other
non-SQM specialty plant nutrients
|
Th.
Ton
|
103.1 | 117.1 | (12 | )% | |||||||||
Potassium
sulfate
|
Th.
Ton
|
138.3 | 172.0 | (20 | )% |
2008
|
2007
|
%
Change
|
||||||||||||
Iodine
and derivatives
|
Th.
Ton
|
10.5 | 9.1 | 15 | % |
2008
|
2007
|
%
Change
|
||||||||||||
Lithium
and derivatives
|
Th.
Ton
|
27.9 | 28.6 | (2 | )% |
2008
|
2007
|
%
Change
|
||||||||||||
Industrial
nitrates
|
Th.
Ton
|
161.9 | 175.2 | (8 | )% | |||||||||
Boric
acid
|
Th.
Ton
|
7.2 | 9.2 | (22 | )% |
2008
|
2007
|
%
Change
|
||||||||||||
Potassium
Chloride
|
Th.
Ton
|
185.6 | 179.0 | 4 | % |
2007
|
2006
|
%
Change
|
||||||||||||
Sodium
nitrate
|
Th.
Ton
|
45.9 | 43.3 | 6 | % | |||||||||
Potassium
nitrate and sodium potassium nitrate
|
Th.
Ton
|
695.3 | 615.0 | 13 | % | |||||||||
Blended
and other specialty fertilizers
|
Th.
Ton
|
261.5 | 250.9 | 4 | % | |||||||||
Other
non-SQM specialty plant nutrients
|
Th.
Ton
|
117.1 | 142.9 | (18 | )% | |||||||||
Potassium
sulfate
|
Th.
Ton
|
172.0 | 172.4 | 0 | % |
2007
|
2006
|
%
Change
|
||||||||||||
Iodine
and derivatives
|
Th.
Ton
|
9.1 | 9.8 | (7 | )% |
2007
|
2006
|
%
Change
|
||||||||||||
Lithium
and derivatives
|
Th.
Ton
|
28.6 | 30.4 | (6 | )% |
2007
|
2006
|
%
Change
|
||||||||||||
Industrial
nitrates
|
Th.
Ton
|
175.2 | 161.7 | 8 | % | |||||||||
Boric
acid
|
Th.
Ton
|
9.2 | 9.9 | (7 | )% |
2007
|
2006
|
%
Change
|
||||||||||||
Potassium
Chloride
|
Th.
Ton
|
179.0 | 126.4 | 42 | % |
2008
|
2007
|
|||||||
Th US$
|
Th US$
|
|||||||
Chilean
pesos
|
(104,605 | ) | 36,975 | |||||
Brazilian
real
|
(1,367 | ) | (1,281 | ) | ||||
Euro
|
64,627 | 31,730 | ||||||
Japanese
yen
|
1,033 | 692 | ||||||
Mexican
pesos
|
2,188 | (2,900 | ) | |||||
South
African rand
|
11,584 | 8,346 | ||||||
Dirhams
|
15,353 | 10,012 | ||||||
Other
currencies
|
14,971 | 8,584 | ||||||
Total,
net
|
3,784 | 92,158 |
On Balance Sheet Financial Instruments
|
Interest Rate
|
Issue Date
|
Maturity Date
|
Amortizations
|
||||||
Bond
– US$200 million
|
6.125 | % |
Apr.
5, 2006
|
Apr.
15, 2016
|
Bullet
|
|||||
Bond
– UF 2.70 million (1)
|
4.00 | % |
Jan.
24, 2006
|
Dec.
1, 2026
|
Semiannual partial
amortizations |
|||||
Syndicated
loan – US$100 million
|
LIBOR 3M + 0.375
|
% |
Mar.
3, 2005
|
Feb.
25, 2010
|
Bullet
|
|||||
Syndicated
loan – US$ 80 million
|
LIBOR
6M + 0.30
|
% |
Nov.
28, 2006
|
Nov.
28, 2011
|
Bullet
|
|||||
Bilateral
loan – US$ 50 million
|
LIBOR
6M + 1.5
|
% |
Dec.
24, 2008
|
Dec.
24, 2010
|
Bullet
|
(1)
|
UF-denominated
bond fully hedged to US$ with a cross currency swap (originally issued for
UF3 million; UF2.7 million outstanding as of December 31, 2008, under
Chilean GAAP). Approximately equivalent to US$92.3 million as
of December 31, 2008. Fixed US$ interest rate of
5.84%.
|
Maturity(*)
|
Amount ( millions of US$)
|
|||
2010
|
155.13 | |||
2011
|
85.13 | |||
2012
|
5.13 | |||
2013
|
5.13 | |||
2014
|
5.13 | |||
2015
and thereafter
|
261.58 | |||
Total
|
517.23 |
|
(*)
Only the capital has been included. For the UF 2.7 million bond, the
amounts presented reflect the real U.S. dollar obligation resulting from
the effects of the cross currency swap that fully hedges this bond to the
U.S. dollar. For further information, see Item 11. Quantitative
and Qualitative Disclosures about Market
Risk.
|
|
·
|
On
January 13, 2009, the Company placed two series of bonds in the Chilean
market for approximately US$173
million:
|
|
o
|
Series
H was for UF 4,000,000 for a term of 21 years, with amortization of
principal starting in 2019 and at an annual interest rate of 5.05% in
UF.
|
|
o
|
Series
G was for ThCh$ 21,000,000 for a term of 5 years, with a single
amortization at maturity and an annual interest rate of 7.5% in Chilean
pesos.
|
|
·
|
On
March 24, 2009, the Company issued commercial papers for ThCh$ 15,000,000
(approximately to US$25,000,000) for a term of 9 months with a single
amortization at maturity and an annual interest rate of approximately 3.3%
in pesos.
|
|
·
|
On
April 2, 2009, the Company issued commercial papers for ThCh$ 15,000,000
(approximately to US$25,000,000) for a term of 1 year with a single
amortization at maturity and an annual interest rate of approximately 3.6%
in pesos.
|
|
·
|
On
May 8, 2009, the Company placed two series of bonds in the Chilean market
for approximately US$148 million:
|
|
o
|
Series
I was issued for UF 1,500,000 for a term of 5 years, with a single
amortization at maturity and an annual interest rate of 3.67% in
UF.
|
|
o
|
Series
J was issued for ThCh$ 52,000,000 for a term of 5 years, with a single
amortization at maturity and an annual interest rate of 6.14% in Chilean
pesos.
|
Less
Than
|
1 - 3
|
3 - 5 |
More
Than
|
|||||||||||||||||
Total
|
1
year
|
years
|
Years
|
5
years
|
||||||||||||||||
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
||||||||||||||||
Long-
and short-term debt (*)
|
652,367 | 135,132 | 240,263 | 10,263 | 266,710 | |||||||||||||||
Capital
lease obligations
|
623 | 226 | 397 | - | - | |||||||||||||||
Operating
leases (**)
|
294,028 | 13,365 | 26,730 | 26,730 | 227,203 | |||||||||||||||
Purchase
commitments
|
215,356 | 133,621 | 81,735 | - | - | |||||||||||||||
Staff
severance indemnities
|
22,129 | - | - | - | 22,129 | |||||||||||||||
Total
Contractual Obligations and Commitments
|
1,189,811 | 288,947 | 338,862 | 26,730 | 535,272 |
Directors
|
||||
Name
|
Position
|
Current position held since
|
||
Julio
Ponce L. (1)
|
Chairman
of the Board and Director
|
September
1987
|
||
Mr.
Ponce is a Forestry Engineer with a degree from the Universidad de
Chile. He joined the Company in 1981. He is also
Chairman of the Board of the following corporations: Sociedad de
Inversiones Pampa Calichera S.A., Sociedad de Inversiones Oro Blanco S.A.,
Norte Grande S.A. and Soquimich Comercial S.A. He is the
brother of Luis Eugenio Ponce.
|
||||
Wayne R. Brownlee
|
Vice
Chairman of the Board and Director
|
December
2001
|
||
Mr.
Brownlee is Executive Vice-President, Treasurer and Chief Financial
Officer of Potash Corporation of Saskatchewan, Inc. Mr.
Brownlee earned degrees in Arts and Science and Business Administration
from the University of Saskatchewan. He is on the Board of
Great Western Brewing Company. He became a director of SQM in
December 2001.
|
||||
Hernán
Büchi B.
|
Director
|
April
1993
|
||
Mr.
Büchi is a Civil Engineer with a degree from the Universidad de
Chile. He served as Vice Chairman of SQM's Board from January
2000 to April 2002. He is currently a Board member of Quiñenco
S.A. Banco de Chile, S.A.C.I. Falabella and Madeco S.A., among
others. He is also Chairman of the Board of Universidad del
Desarrollo.
|
José María Eyzaguirre B.
|
Director
|
December
2001
|
||
Mr.
Eyzaguirre is a lawyer and is a partner of the Chilean law firm Claro y
Cia. He obtained his law degree from the Universidad de Chile and
was admitted to the Chilean Bar in 1985. In 1987, he obtained a
Master's Degree from the New York University School of Law. He
was admitted to the New York Bar in 1988. He is also a member
of the board of directors of Gasoducto del Pacífico S.A., a
transandean gas pipeline, Embotelladora Andina S.A., a bottler of The Coca
Cola Company, and Chairman of the Board of Directors of Club de Golf Valle
Escondido.
|
||||
Daniel
Yarur E.
|
Director
|
April
2003
|
||
Mr.
Yarur is an Information Engineer with a degree from the Universidad de
Chile and holds an MSc in Finance from the London School of Economics and
an AMP from Harvard Business School. He is a member of the
Board of Banco de Crédito e Inversiones, Antofagasta P.L.C. (based in
London), Antofagasta Minerals, Invertec Pesquera Mar de Chiloé S.A.,
President Fundación Chilena de Ajedrez, President Fondo de Inversiones
Alekine. Mr. Yarur was Chairman of the Chilean Securities and
Exchange Commission from 1994 to 2000 and was also Chairman of the
Council Organization of the Securities Regulators of
America. He is also a Professor in the Faculty of Economic and
Administrative Sciences, Universidad de Chile.
|
||||
Wolf
von Appen (2)
|
Director
|
May
2005
|
||
Mr.
Von Appen is an entrepreneur. He is currently a Board member of
Sociedad de Fomento Fabril and Vice president of Centro de Estudios
Publicos.
|
||||
Eduardo
Novoa C. (2)
|
Director
|
April
2008
|
||
Mr. Novoa is an economist with
a degree from the Universidad de Chile and holds a Master in Business
Administration
from the University of Chicago. He has held positions in business
development, corporate level strategic direction and asset management at a
number of Chilean and multinational companies, either as a Board member,
Chief Development Officer, Country Manager or CEO. Currently, Mr.
Novoa provides strategic advisory services.
|
Kendrick T. Wallace
|
Director
|
December
2001
|
||
Mr.
Wallace is a lawyer who graduated from Harvard Law School. He
is currently a consultant to certain fertilizer industry
companies. Until July 1, 2008 when he retired, he was Senior
Vice President and General Counsel of Yara International ASA in Oslo,
Norway. Prior to the spin-off of Yara International ASA from
Norsk Hydro ASA, he was the chief legal counsel of Norsk Hydro ASA for
North and South America in Tampa, Florida. Before that he was a
partner in the law firm of Bryan Cave LLP in Kansas City,
Missouri. He is also on the Board of Directors of Norte Grande
S.A., Sociedad de Inversiones Oro Blanco S.A. and Sociedad de Inversiones
Pampa Calichera S.A.
|
Executive
Officers
|
||||
Name
|
Position
|
Current position held since
|
||
Patricio Contesse
G. (2)
|
Chief
Executive Officer
|
March
1990
|
||
Mr.
Contesse is a Forestry Engineer with a degree from the Universidad de
Chile. He joined the Company in 1981 as CEO, a position he held
until 1982, and again in 1988 for one year. In the past, he was
CEO of Celco Limitada, Schwager S.A. and Compañía de Aceros del Pacífico
S.A. He has also served as Operations Senior Executive Vice
President of Codelco Chile, President of Codelco USA and Executive
President of Codelco Chile. Mr. Contesse is also a member of
the Board of Soquimich Comercial.
|
||||
Patricio de Solminihac T.
|
Chief
Operating Officer and
Executive
Vice President
|
January
2000
|
||
Mr.
de Solminihac is an Industrial Engineer with a degree from the Pontificia
Universidad Católica de Chile and holds a Master in Business
Administration from the University of Chicago. He joined the
Company in 1988 as Business Development Vice President. In
1989, he became General Manager and later on he became Vice Chairman of
the Board of SQM, a position he held from 1989 through January
2000. Currently he is a member of the Board of Lafarge Chile
S.A. and CEM S.A. Mr. de Solminihac is also a member of the
Board of Soquimich Comercial.
|
||||
Matías Astaburuaga S.
|
General
Counsel and Senior Vice President
|
February
1989
|
||
Mr.
Astaburuaga is a lawyer with a degree from the Pontificia Universidad
Católica de Chile. He joined the Company in
1989. Before that, he was Regional Counsel of The Coca Cola
Export Corporation, Andean Region and Regional Counsel of American Life
Insurance Company, Latin America Region.
|
||||
Ricardo
Ramos R. (2)
|
Chief
Financial Officer and
Business
Development Senior Vice President
|
November
1994
|
||
Mr.
Ramos is an Industrial Engineer with a degree from the Pontificia
Universidad Católica de Chile. He joined SQM in 1989. Mr.
Ramos is also a member of the Board of Soquimich
Comercial.
|
Jaime San Martín L. (2)
|
Nueva
Victoria Operations Senior Vice President
|
March
2008
|
||
Mr.
San Martín is a Transportation Engineer with a degree from the Pontificia
Universidad Católica de Chile. He joined the Company in 1995 as
Project Manager. He became Metallic Mining Development Manager
in 1997, and Development Manager in 1998, Business Development and Mining
Property Vice President in 1999, Technical Senior Vice President in 2001,
and Senior Vice President of Lithium Operations and Mining Affairs in
January 2007.
|
||||
Eugenio
Ponce L.
|
Senior
Commercial Vice President
|
March
1999
|
||
Mr.
Ponce is a Mechanical Engineer with a degree from the Universidad Católica
de Valparaíso. In 1981, he joined the Company as a Sales
Manager. He became Commercial Manager in 1982, Commercial and
Operations Manager in 1988 and Chief Executive Officer of SQM Nitratos
S.A. in 1991. Currently he is a member of the board of Soquimich Comercial
and Vice Chairman of the Board of Pampa Calichera. He is Julio
Ponce’s brother.
|
||||
Mauricio
Cabello C.
|
Nitrates-Iodine
Operations Senior Vice President
|
June
2005
|
||
Mr.
Cabello is a Mechanical Engineer with a degree from the Universidad de
Santiago de Chile. He joined the Company in 2000 as Maintenance
Superintendent of SQM Salar. He became Maintenance Manager of SQM’s
nitrates and iodine operations in 2002 and Production Manager of SQM’s
nitrates and iodine operations in 2004. He previously worked in various
engineering-related positions in Pesquera San José S.A., Pesquera Coloso
S.A. and Cintac S.A.
|
||||
Pauline
De Vidts S.
|
Safety,
Health & Environment Senior Vice President
|
June
2005
|
||
Mrs.
De Vidts is an Industrial Engineer with a degree from the Pontificia
Universidad Católica de Chile and holds a Ph.D. in Chemical Engineering
from Texas A&M University. She joined the Company in 1996 to work in
process development for the Salar de Atacama Operations, becoming
Development Manager for these operations in 1998, and in 2001, she became
Corporate R&D and Environmental Issues Vice President.
|
Juan Carlos Barrera P. (2)
|
Salar
and Lithium Operations Senior Vice President
|
January
2007
|
||
Mr. Barrera is an Industrial
Engineer with a degree from the Pontificia Universidad Católica de Chile and holds a
Master in Business Administration degree
from Tulane University and a Master in Business Administration degree from
Universidad de Chile. He joined the Company in 1991 as an
advisor in the Business Development area and has served in many positions
since then. In 1995, he became Business
Development Manager of SQM Nitratos S.A. In 1999,he became the Corporate
Quality Manager, in 2000 Corporate Supply Chain Vicepresident and, in 2006, General Manager
of Soquimich Comercial S.A. Mr. Barrera is also a member
of the board of
Soquimich Comercial S.A.
|
||||
Daniel
Jiménez Sch.
|
Human
Resources and Corporate Affairs
Senior
Vice President
|
May
2007
|
||
Mr. Jiménez is an Industrial Engineer
with a degree from the Pontificia Universidad Católica de Chile and holds a
Master in Business Administration degree
from Old Dominion University. He joined the Company in 1991, holding
several positions in the finance and sales areas at SQM’s headquarters and foreign
subsidiaries in USA and Belgium, countries he was based in for 8
years. In 2002, he became VP Sales
and Marketing Iodine, Lithium and Industrial Chemicals.
|
|
(1)
|
Mr. Julio
Ponce’s ownership interest in SQM is explained in Item 6.E. Share
Ownership.
|
|
(2)
|
The
individual beneficially owns less than one percent of the Company’s
shares.
|
SQM
S.A.
|
SQMC
|
TOTAL
|
||||||||||||||||||
Name
|
Meeting(Ch$)
|
Committee
(Ch$)
|
Meeting
(Ch$)
|
Committee
(Ch$)
|
(Ch$)
|
|||||||||||||||
Julio
Ponce Lerou
|
480,651,826 | - | 73,796,766 | - | 554,448,592 | |||||||||||||||
Wayne
R. Brownlee
|
71,341,013 | - | - | - | 71,341,013 | |||||||||||||||
Hernán
Büchi Buc
|
72,560,290 | 12,531,831 | - | - | 85,092,121 | |||||||||||||||
José
María Eyzaguirre Baeza
|
70,268,384 | - | - | - | 70,268,384 | |||||||||||||||
Eduardo
Novoa Castellón
|
6,222,623 | 6,222,623 | - | - | 12,445,246 | |||||||||||||||
José
Antonio Silva Bafalluy (1)
|
63,005,717 | 3,964,169 | - | - | 66,969,886 | |||||||||||||||
Wolf
Von Appen
|
66,048,466 | - | - | - | 66,048,466 | |||||||||||||||
Kendrick
T. Wallace
|
71,341,013 | - | - | - | 71,341,013 | |||||||||||||||
Daniel Yarur Elsaca
|
70,268,382 | 11,226,834 | - | - | 81,495,216 | |||||||||||||||
Total
|
971,707,714 | 33,945,457 | 73,796,766 | 1,079,449,937 |
(1)
|
Mr.
José Antonio Silva was a member of the Board until April 30, 2008, when he
was replaced by Mr. Eduardo Novoa.
|
6.C. Board
Practices
|
(a)
|
Examine
and issue an opinion regarding the external auditor's report including
financial statements prior to its final presentation for approval at the
Ordinary Shareholders Meeting
|
(b)
|
Propose
to the Board of Directors the external auditors and the rating agencies
that will be presented to the Ordinary Shareholders
Meeting
|
(c)
|
Examine
and elaborate a report concerning the operations covered by articles 44
and 89 of Law Nº18.046
|
(d)
|
Examine
the remuneration and compensation plans of the senior
management
|
|
a)
|
Analysis
of un-audited financial reports.
|
|
b)
|
Analysis
of audited financial reports.
|
|
c)
|
Analysis
of reports submitted by external auditors, account inspectors
and rating agencies, and formulation of proposals to the Board of
Directors recommending external auditors, account inspectors and rating
agencies that could be designated by the respective Annual General
Shareholders’ Meeting.
|
|
d)
|
Analysis
of functions, objectives and working programs of the Internal Audit
Department.
|
|
e)
|
Analysis
of the Company’s Senior Executives remuneration and compensation
plans.
|
|
f)
|
Analysis
of the records relating to the transactions referred to in articles 44 and
89 of Law of Corporation.
|
|
g)
|
Analysis
of matters related to the "Sarbanes-Oxley Act" of the U.S.A., especially
regarding Section 404.
|
|
h)
|
Analysis
of matters related to the norms “IFRS” and “PCAOB” of the
U.S.A.
|
|
i)
|
Analysis
of Internal Control Report.
|
Section
|
NYSE Standards
|
SQM practices pursuant to Chilean Stock Exchange
regulations
|
||
303A.01
|
Listed
companies must have a majority of independent directors.
|
There
is no legal obligation to have a majority of independent directors on the
Board but according to Chilean law, the Company's directors cannot serve
as executive officers.
|
||
303A.02
|
No director qualifies as
"independent" unless the board of directors affirmatively determines that
the director has no material relationship with the listed company
(either directly or
as a partner, shareholder or officer of an organization that has a
relationship with the company). Companies must identify which directors
are independent and disclose the basis for that
determination.
In
addition, a director is not independent if:
(i) The
director is, or has been within the last three years, an employee of
the listed company, or an immediate family member is, or has been within
the last three years, an executive officer, of the listed
company.
(ii) The
director has received, or has an immediate family member who has
received, during any twelve-month period within the last three years, more
than $120,000 in direct compensation from the listed company, other
than director and committee fees and pension or other forms of deferred
compensation for prior service (provided such compensation is not
contingent in any way on continued service).
(iii)
(A) The director is a current partner or employee of a firm that is the
company's internal or external auditor; (B) the director has an immediate
family member who is a current partner of such a firm; (C) the director
has an immediate family member who is a current employee of such a firm
and personally works on the listed company's audit; or (D) the director or
an immediate family member was within the last three years a partner or
employee of such a firm and personally worked on the listed company's
audit within that time.
(iv) The
director or an immediate family member is, or has been with the last three
years, employed as an executive officer of another company where any
of the listed company's present executive officers at the same time serves
or served on that company's compensation committee.
(v)
The director is a current employee, or an immediate family
member is a current executive officer, of a company that has made
payments to, or received payments from, the listed company for property or
services in an amount which, in any of the last three fiscal years,
exceeds the greater of $1 million, or 2% of such other company's
consolidated gross revenues.
|
A
Director is considered independent if he would have been elected without
the vote of the controlling shareholder and related persons and
entities.
|
Section
|
NYSE Standards
|
SQM practices pursuant to Chilean Stock Exchange
regulations
|
||
303A.03
|
The
non-management directors must meet at regularly scheduled executive
sessions without management.
|
These
meetings are not needed given that directors cannot serve as executive
officers.
|
||
303A.04
|
(a)
Listed companies must have a nominating/corporate governance committee
composed entirely of independent directors.
(b)
The nominating/corporate governance committee must have a written charter
that addresses:
(i)
the committee's purpose and responsibilities – which, at minimum, must be
to: identify individuals qualified to become board members, consistent
with criteria approved by the board, and to select, or to recommend that
the board select, the director nominees for the next annual meeting of
shareholders; develop and recommend to the board a set of corporate
governance guidelines applicable to the corporation; and oversee the
evaluation of the board and management; and
(ii)
an annual performance evaluation of the committee.
|
This
committee is not required as such in the Chilean
regulations. However, pursuant to Chilean regulations SQM has a
Directors' Committee (see Board practices above).
|
||
303A.05
|
Listed
companies must have a compensation committee composed entirely of
independent directors, and must have a written charter
|
This
committee is not required as such in the Chilean regulations. Pursuant to
Chilean regulations SQM has a Director’s Committee (see Board practices
above) that is in charge of reviewing management’s
compensation.
|
||
303A.06
|
Listed
companies must have an audit committee.
|
This
committee is not required as such in the Chilean
regulations. On May 24, 2005, the Board of Directors approved
the establishment of an audit committee to comply with the requirements of
the NYSE corporate governance rules.
|
||
303A.07
|
The
audit committee must have a minimum of three members. Each of them must
satisfy requirements of independence, and the committee must have a
written charter. The
listed companies must have an internal audit function to provide
management with ongoing assistance of the Company's risk management
process and the system of internal controls
|
Pursuant
to Section 303A.00, SQM is not required to comply with requirements in
303A.07. Pursuant to Chilean Regulations SQM has a Director’s Committee
(see Board practices above) with certain requirements of
independence.
|
||
303A.08
|
Shareholders
must have the opportunity to vote on all equity-compensation plans
involving directors, executives, employees, or other service
providers.
|
SQM
does not have equity compensation plans. However, as mentioned
in Item 6.B Compensation, the Company does have a long-term cash bonus
compensation plan for certain senior executives, which consists of a
long-term bonus linked to the Company's share price. Directors and
executives may only acquire SQM shares by individual
purchases. The purchaser must give notice of such purchases to
the Company and the Superintendence of Securities and
Insurance.
|
||
303A.09
|
Listed
companies must adopt and disclose corporate governance
guidelines.
|
Chilean
law does not require that corporate governance guidelines be
adopted. Directors' responsibilities and access to management
and independent advisors are directly provided for by applicable
law. Directors' compensation is approved at the annual meeting
of shareholders, pursuant to applicable
law.
|
Section
|
NYSE Standards
|
SQM practices pursuant to Chilean Stock Exchange
regulations
|
||
303A.10
|
Listed
companies must adopt and disclose a code of business conduct and ethics
for directors, officers and employees and promptly disclose any waivers of
the code for directors or executive officers.
|
Not
required in the Chilean regulations. SQM has adopted and
disclosed a Code of Business Conduct and Ethics, available at the
Company's website, www.sqm.com.
|
||
303A.11
|
Listed
foreign private issuers must disclose any significant ways in which their
corporate governance practices differ from those followed by domestic
companies under NYSE listed standards.
|
Pursuant
to 303A.11, this table sets forth a comparative summary of differences in
corporate governance practices followed by SQM under Chilean regulations
and those applicable to U.S. domestic issuers pursuant to Section
303A.
|
||
303A.12
|
Each
listed company CEO must (a) certify to the NYSE each year that he or she
is not aware of any violation by the company of NYSE corporate
governance listing standards; (b) promptly notify the NYSE in writing
after any executive officer becomes aware of any material non-compliance
with any applicable provisions of Section 303A; and (c) must submit an
executed Written Affirmation annually to the NYSE.
In addition, each listed company must submit an interim Written
Affirmation each time a change occurs to the board or any of the
committees subject to Section 303A. The annual and interim Written
Affirmations must be in the form specified by the NYSE.
|
Not
required in the Chilean regulations. The CEO must only comply
with Section 303A.12 (b) and (c).
|
||
303A.13
|
The
NYSE may issue a public reprimand letter to any listed company that
violates a NYSE listing standard.
|
Not
specified in the Chilean regulations.
|
||
303A.14
|
Listed
companies must have and maintain a publicly accessible
website.
|
Not
required in the Chilean
regulations.
|
2008
|
2007
|
2006
|
2005
|
2004
|
||||||||||||||||
Permanent
employees
|
4,561 | 3,746 | 3,745 | 3,672 | 3,418 | |||||||||||||||
Employees
in Chile
|
4,332 | 3,515 | 3,415 | 3,350 | 3,138 | |||||||||||||||
Employees
outside of Chile
|
229 | 231 | 330 | 322 | 280 |
%
Beneficial ownership
|
||||
May
31, 2009
|
34.05 | % | ||
December
31, 2008
|
34.05 | % | ||
December
31, 2007
|
34.03 | % |
Shareholder
|
Number of
Series A
Shares Beneficially
Owned
|
%
Series A
Shares
|
Number of
Series B
Shares Beneficially
Owned
|
%
Series B
Shares
|
% Total
Shares
|
|||||||||||||||
Sociedad
de Inversiones Pampa Calichera S.A. (1) (2)
|
57,934,256 | 40.56 | % | 12,490,092 | 10.38 | % | 26.76 | % | ||||||||||||
Inversiones
El Boldo Ltda. (3)
|
44,604,761 | 31.23 | % | 17,718,111 | 14.72 | % | 23.68 | % | ||||||||||||
The
Bank of New York
|
47,580 | 0.03 | % | 55,764,136 | 46.32 | % | 21.21 | % | ||||||||||||
Inversiones
RAC Chile Ltda. (3)
|
19,200,242 | 13.44 | % | 2,699,773 | 2.24 | % | 8.32 | % | ||||||||||||
Inversiones
Global Mining (Chile) Limitada. (1)
|
13,798,539 | 9.66 | % | - | 0.00 | % | 5.24 | % | ||||||||||||
AFP
Provida S.A. (4)
|
- | 0.00 | % | 4,938,971 | 4.10 | % | 1.88 | % | ||||||||||||
Inversiones
La Esperanza Ltda.
|
3,643,977 | 2.55 | % | - | 0.00 | % | 1.38 | % | ||||||||||||
AFP
Capital S.A. (4)
|
9,335 | 0.01 | % | 3,354,343 | 2.79 | % | 1.28 | % | ||||||||||||
AFP
Habitat S.A. (4)
|
- | 0.00 | % | 3,317,019 | 2.76 | % | 1.26 | % | ||||||||||||
Banco
de Chile por Cuenta de Terceros
|
- | 0.00 | % | 3,226,365 | 2.68 | % | 1.23 | % |
(1)
|
Mr.
Julio Ponce L., Chairman of the Board of SQM, and related persons control
100% of Inversiones SQYA S.A. Inversiones SQYA S.A. indirectly
controls and beneficially owns Sociedad de Inversiones Pampa Calichera
S.A., which in turn owns 100% of Global Mining Investments (Chile)
S.A. Therefore, Mr. Ponce and related persons beneficially own
through the above entities 84,222,887 shares constituting 32.00% of the
total shares of SQM. The stake held by Mr. Ponce and related parties as of
December 31, 2008, 2007 and 2006 was, respectively, 32.00%, 32.00% and
30.26% of the total shares of SQM.
|
(2)
|
Pampa
Calichera is an open stock corporation whose shares are traded on the
Santiago Stock Exchange. Originally, the shareholders of Pampa
Calichera were employees of SQM. Pampa Calichera was formed to
hold the capital stock of SQM contributed by such employees or later
acquired in the open market.
|
(3)
|
Potash
Corporation of Saskatchewan Inc. owns 100% of Inversiones el Boldo
Limitada and 100% of Inversiones RAC Ltda., being therefore the beneficial
owner of 84,222,887 SQM's shares that represent 32.00% of SQM's total
shares. The stake held by Potash Corporation of Saskatchewan as of
December 31, 2008, 2007, and 2006 was, respectively, 32.00%, 32.00% and
24.99% of the total shares of SQM.
|
(4)
|
AFPs
are legal entities that manage pension funds in
Chile.
|
Th.
US$
|
2008
|
2007
|
2006
|
|||||||||
Foreign
sales
|
1,395,834 | 954,641 | 878,066 | |||||||||
Total
sales
|
1,774,119 | 1,187,527 | 1,042,886 | |||||||||
%
of foreign sales
|
78.68 | % | 80.39 | % | 84.20 | % |
Dividends
|
Per Share
|
Per ADR (1)
|
||||||||
Declared for the
business year
|
Paid in
|
Ch$
|
US$
|
|||||||
2003
|
2004
|
55.05 | 0.088 | |||||||
2004
|
2005
|
106.56 | 0.182 | |||||||
2005
|
2006
|
145.11 | 0.279 | |||||||
2006
|
2007
|
183.96 | 0.349 | |||||||
2007
|
2008
|
204.14 | 0.445 | |||||||
2008
(interim)
|
2008
|
243.34 | 0.380 | |||||||
2008
|
2009
|
515.90 | 0.858 |
|
(1)
|
The
ratio of ordinary shares to Series A ADRs was 10:1 for all periods
reflected in the table. The Series A ADRs were delisted from
the New York Stock Exchange on March 27, 2008. The ratio of
ordinary shares to Series B ADRs changed from 10:1 to 1:1 on March 28,
2008. The calculation in the table for all periods is based on
the ratio of 1:1.
|
(a)
|
Last
5 years
|
Santiago Stock Exchange
|
NYSE
|
|||||||||||||||||||||||||||||||
Per Share (1)
|
Per ADR
|
|||||||||||||||||||||||||||||||
Series A
|
Series B
|
Series A (2)
|
Series B (3)
|
|||||||||||||||||||||||||||||
High
|
Low
|
High
|
Low
|
High
|
Low
|
High
|
Low
|
|||||||||||||||||||||||||
Ch$
|
Ch$
|
Ch$
|
Ch$
|
US$
|
US$
|
US$
|
US$
|
|||||||||||||||||||||||||
2004
|
3,900 | 2,350 | 3,580 | 2,160 | 68.00 | 37.05 | 6.28 | 3.30 | ||||||||||||||||||||||||
2005
|
7,000 | 3,600 | 7,170 | 3,269 | 129.40 | 66.80 | 13.34 | 5.75 | ||||||||||||||||||||||||
2006
|
7,100 | 5,220 | 7,347 | 5,000 | 137.5 | 93.15 | 13.95 | 8.99 | ||||||||||||||||||||||||
2007
|
12,100 | 7,100 | 9,985 | 6,800 | 234.80 | 135.00 | 20.04 | 12.50 | ||||||||||||||||||||||||
2008
|
29,300 | 12,100 | 27,012 | 6,750 | - | - | 55.74 | 14.77 |
(b)
|
Last
10 quarters
|
Santiago Stock Exchange
|
NYSE
|
|||||||||||||||||||||||||||||||
Per Share (1)
|
Per ADR
|
|||||||||||||||||||||||||||||||
Series A
|
Series B
|
Series A (2)
|
Series B (3)
|
|||||||||||||||||||||||||||||
High
|
Low
|
High
|
Low
|
High
|
Low
|
High
|
Low
|
|||||||||||||||||||||||||
Ch$
|
Ch$
|
Ch$
|
Ch$
|
US$
|
US$
|
US$
|
US$
|
|||||||||||||||||||||||||
2007
|
||||||||||||||||||||||||||||||||
First
quarter
|
7,600 | 7,100 | 7,830 | 6,800 | 142.95 | 136.95 | 14.60 | 12.50 | ||||||||||||||||||||||||
Second
quarter
|
9,050 | 7,100 | 9,152 | 6,800 | 180.95 | 136.95 | 17.20 | 12.50 | ||||||||||||||||||||||||
Third
quarter
|
12,100 | 9,050 | 9,160 | 7,650 | 228.75 | 175.10 | 17.62 | 14.10 | ||||||||||||||||||||||||
Fourth
quarter
|
12,100 | 12,100 | 9,985 | 8,042 | 234.80 | 219.75 | 20.04 | 15.89 | ||||||||||||||||||||||||
2008
|
||||||||||||||||||||||||||||||||
First
quarter
|
12,600 | 12,100 | 10,658 | 6,750 | 290.00 | 226.00 | 24.25 | 14.77 | ||||||||||||||||||||||||
Second
quarter
|
29,300 | 16,000 | 27,012 | 10,500 | - | - | 54.74 | 23.98 | ||||||||||||||||||||||||
Third
quarter
|
25,000 | 16,000 | 22,856 | 13,049 | - | - | 44.71 | 23.56 | ||||||||||||||||||||||||
Fourth
quarter
|
16,450 | 15,990 | 16,451 | 9,469 | - | - | 26.05 | 15.25 | ||||||||||||||||||||||||
2009
|
||||||||||||||||||||||||||||||||
First
quarter
|
19,000 | 16,000 | 18,997 | 14,319 | - | - | 31.73 | 23.84 | ||||||||||||||||||||||||
Second
quarter (through May 31)
|
21,500 | 19,000 | 20,605 | 15,969 | - | - | 36.66 | 27.75 |
(c)
|
Last
6 months
|
Santiago Stock Exchange
|
NYSE
|
|||||||||||||||||||||||||||||||
Per Share (1)
|
Per ADR
|
|||||||||||||||||||||||||||||||
Series A
|
Series B
|
Series A (2)
|
Series B (3)
|
|||||||||||||||||||||||||||||
High
|
Low
|
High
|
Low
|
High
|
Low
|
High
|
Low
|
|||||||||||||||||||||||||
Ch$
|
Ch$
|
Ch$
|
Ch$
|
US$
|
US$
|
US$
|
US$
|
|||||||||||||||||||||||||
December
2008
|
16,001 | 16,000 | 16,451 | 13,598 | - | - | 25.97 | 20.12 | ||||||||||||||||||||||||
January
2009
|
17,200 | 16,000 | 17,048 | 15,891 | - | - | 28.28 | 25.25 | ||||||||||||||||||||||||
February
2009
|
19,000 | 17,200 | 18,997 | 16,957 | - | - | 31.73 | 27.38 | ||||||||||||||||||||||||
March
2009
|
19,000 | 18,500 | 16,612 | 14,319 | - | - | 29.09 | 23.84 | ||||||||||||||||||||||||
April
2009
|
19,800 | 19,000 | 18,843 | 15,969 | - | - | 32.87 | 27.75 | ||||||||||||||||||||||||
May
2009
|
21,500 | 19,980 | 20,605 | 18,533 | - | - | 36.66 | 30.89 |
(1)
|
Pesos
per share of Common Stock reflect nominal price at trade
date.
|
(2)
|
Series
A shares started trading on the New York Stock Exchange on April 9,
1999.
|
(3)
|
Series
B shares began trading on the New York Stock Exchange on September 20,
1993. Historical prices have been restated to reflect the
change in the ratio of local shares to ADRs from 10:1 to 1:1, effective
March 28, 2008.
|
|
(a) Expiration
of the duration term, if any, as established in its
By-laws;
|
|
(b) All
the shares end up in the possession of one
individual;
|
|
(c) By
agreement of an Extraordinary Shareholders
Meeting;
|
|
(d) By
abolition, pursuant to applicable laws, of the decree that authorized its
existence;
|
|
(e) Any
other reason contemplated in its
By-laws.
|
|
1)
|
When
an investor wants to take control of a company's
stock.
|
|
2)
|
When
a controlling shareholder holds two-thirds of the company's
stock. If such shareholder buys one more share, it will be
mandatory to offer to acquire the rest of the outstanding stock within 30
days of surpassing that threshold.
|
|
3)
|
When
an investor wants to take control of a corporation, which, in turn,
controls an open stock corporation that represents 75% or more of the
consolidated assets of the former
corporation.
|
|
·
|
On
February 12, 1999, SQM S.A. entered into an Electrical Energy Supply
contract with Electroandina S.A. The term of this contract
extends through March 16, 2010. SQM has two three-year renewal
options. Early termination of the contract is subject to payment of
non-amortized investments.
|
|
·
|
On
March 21, 1997, SQM Salar S.A. entered into an Electricity Supply
agreement with Norgener S.A. The term of this contract extends
through March 20, 2017, and early termination is subject to
penalties.
|
|
·
|
On
January 13, 1998, SQM Nitratos S.A. entered into an Electrical Energy
Supply agreement with Norgener S.A. The term of this contract
extends through January 31, 2013. Early termination of the
contract is subject to payment of non-amortized
investments.
|
|
·
|
On
May 22, 2001, SQM S.A. entered into a Natural Gas Supply agreement with
Distrinor S.A. The term of this contract extends through May 21,
2011. Early termination of the contract is subject to payment
of non-amortized investments. SQM pays a fixed annual
amount (amortization of investments), and when we receive gas, we pay the
corresponding amounts. However, in 2008 we received practically
no gas, and we expect this situation to continue during
2009.
|
Expected Maturity Date
|
||||||||||||||||||||||||||||
On Balance Sheet
Financial Instruments
|
2009
|
2010
|
2011
|
2012
|
2013 and
thereafter
|
Total
|
Fair Value
|
|||||||||||||||||||||
(in
thousands of U.S. dollars)
|
||||||||||||||||||||||||||||
Fixed
Rate (US$)
|
22,775 | 22,471 | 22,167 | 21,875 | 345,571 | 434,858 | 369,094 | |||||||||||||||||||||
200m
US$ bond – Avg. Int. rate: 6.125%
|
12,250 | 12,250 | 12,250 | 12,250 | 242,875 | 291,875 | 251,864 | |||||||||||||||||||||
CCS
US$ bond- Avg. Int. rate: 5.84% (1)
|
10,525 | 10,221 | 9,917 | 9,625 | 102,696 | 142,983 | 117,230 | |||||||||||||||||||||
Variable
Rate (US$)
|
5,170 | 153,613 | 81,567 | - | - | 240,350 | 232,567 | |||||||||||||||||||||
100m
US$ loan – Avg. Projected Int.: 2.08%
|
1,861 | 100,527 | - | - | - | 102,387 | 100,689 | |||||||||||||||||||||
80m
US$ loan – Avg. Projected Int.:2.13%
50m
US$ loan – Avg. Projected Int.: 2.97%
|
1,698 1,611 | 1,712 51,274 | 81,567 - | - - | - - | 84,977 52,985 | 80,371 51,507 | |||||||||||||||||||||
Total
|
27,944 | 176,084 | 103,734 | 21,875 | 345,571 | 675,209 | 601,662 |
|
(1)
|
UF-bond
fully hedged, under Chilean GAAP, to US$ with a Cross Currency Swap
(CCS). Cash flows expressed in their nominal currency are
presented below:
|
Expected Maturity Date
|
||||||||||||||||||||||||||||
2009
|
2010
|
2011
|
2012
|
2013 and
thereafter
|
Total
|
Fair Value
|
||||||||||||||||||||||
3M
UF Bond – Int. rate 4.00%
|
||||||||||||||||||||||||||||
SQM
pays bond holders (UF)
|
255,456 | 249,515 | 243,574 | 237,633 | 2,703,032 | 3,698,210 | 3,032,610 | |||||||||||||||||||||
Cross
Currency Swap
|
||||||||||||||||||||||||||||
CCS
UF Int. rate 4.00% - Santander pays SQM
|
-255,456 | -249,515 | -243,574 | -237,633 | -2,703,032 | -3,698,210 | -3,032,610 | |||||||||||||||||||||
CCS
US$ Int. rate 5.84% - SQM pays Santander
|
10,525 | 10,221 | 9,917 | 9,625 | 102,696 | 142,983 | 117,230 |
2008
|
2007
|
|||||||
Th US$
|
Th US$
|
|||||||
Chilean
pesos
|
(104,605 | ) | 36,975 | |||||
Brazilian
real
|
(1,367 | ) | (1,281 | ) | ||||
Euro
|
64,627 | 31,730 | ||||||
Japanese
yen
|
1,033 | 692 | ||||||
Mexican
pesos
|
2,188 | (2,900 | ) | |||||
South
African rand
|
11,584 | 8,346 | ||||||
Dirhams
|
15,353 | 10,012 | ||||||
Other
currencies
|
14,971 | 8,584 | ||||||
Total,
net
|
3,784 | 92,158 |
Year ended December 31,
|
||||||||
2008
|
2007
|
|||||||
Audit
fees
|
773.1 | 1,061.6 | ||||||
Audit-related
fees
|
- | 41.2 | ||||||
Tax
fees
|
26.68 | 78.1 | ||||||
Other
fees
|
73.13 | 114.3 | ||||||
Total
fees
|
872.91 | 1,295.2 |
Report
of Independent Registered
Public Accounting Firm
|
F-1
|
|
Report
of Independent Registered
Public Accounting Firm on the internal control over financial reporting as of December 31,
2008
|
F-2
|
|
Consolidated
Financial Statements:
|
||
Audited
Consolidated Balance Sheets as of December 31, 2008 and
2007
|
F-4
|
|
Audited
Consolidated Statements of Income for each of the three years in the
period ended December 31, 2008, 2007 and 2006
|
F-6
|
|
Audited
Consolidated Statements of Cash Flows for each of the three years in the
period ended December 31, 2008, 2007 and 2006
|
F-7
|
|
Notes
to the Audited Consolidated Financial Statements
|
F-9
|
|
Supplementary
Schedules*
|
Exhibit
No.
|
Exhibit
|
|
1.1
|
By-laws
(Estatutos) of the Company**
|
|
8.1
|
Significant
subsidiaries of the Company
|
|
12.1
|
Section
302 Chief Executive Officer Certification
|
|
12.2
|
Section
302 Chief Financial Officer Certification
|
|
13.1
|
Section
906 Chief Executive Officer Certification
|
|
13.2
|
Section
906 Chief Financial Officer
Certification
|
Contents
|
||
Report
of Independent Registered Public Accounting Firm
|
F-1
|
|
Report
of Independent Registered Public Accounting Firm on the internal control
over financial reporting as of December 31, 2008
|
F-2
|
|
Consolidated
Financial Statements:
|
||
Audited
Consolidated Balance Sheets as of December 31, 2008 and
2007
|
F-4
|
|
Audited
Consolidated Statements of Income for each of the three years in the
period ended December
31, 2008
|
F-6
|
|
Audited
Consolidated Statements of Cash Flows for each of the three years in the
period ended December 31, 2008
|
F-7
|
|
Notes
to the Audited Consolidated Financial Statements
|
F-9
|
US$
|
-
|
United
States dollars
|
ThUS$
|
-
|
Thousands
of United States dollars
|
Ch$
|
-
|
Chilean
pesos
|
ThCh$
|
-
|
Thousands
of Chilean pesos
|
ThEuro
|
-
|
Thousands
of Euros
|
UF
|
-
|
or
Unidad de Fomento.
The UF is an inflation-indexed, Chilean peso-denominated monetary
unit. The UF rate is set daily in advance, based on the change
in the Consumer Price Index of the previous
month.
|
As
of December 31,
|
||||||||||||
ASSETS
|
Note
|
2008
|
2007
|
|||||||||
ThUS$
|
ThUS$
|
|||||||||||
Current
assets
|
||||||||||||
Cash
and cash equivalents
|
303,799 | 164,212 | ||||||||||
Time
deposits
|
20,121 | - | ||||||||||
Trade
accounts receivable, net
|
4
|
328,041 | 249,718 | |||||||||
Other
accounts receivable, net
|
4
|
6,743 | 6,249 | |||||||||
Accounts
receivable from related companies
|
5
|
51,027 | 35,767 | |||||||||
Inventories,
net
|
6
|
540,727 | 387,768 | |||||||||
Recoverable
taxes
|
37,081 | 31,322 | ||||||||||
Prepaid
expenses
|
5,490 | 4,197 | ||||||||||
Deferred
income taxes
|
14
|
34,802 | - | |||||||||
Other
current assets
|
11,583 | 24,721 | ||||||||||
Total
current assets
|
1,339,414 | 903,954 | ||||||||||
Property,
plant and equipment, net
|
7
|
1,119,920 | 983,449 | |||||||||
Other
Assets
|
||||||||||||
Investments
in related companies
|
8
|
36,951 | 23,935 | |||||||||
Goodwill,
net
|
9
|
31,901 | 34,236 | |||||||||
Negative
goodwill, net
|
9
|
(1,279 | ) | (1,291 | ) | |||||||
Intangible
assets, net
|
3,115 | 3,814 | ||||||||||
Long-term
accounts receivable, net
|
4
|
767 | 604 | |||||||||
Long-term
accounts receivable from related companies
|
5
|
2,000 | 2,000 | |||||||||
Other
long-term assets
|
10
|
34,426 | 35,618 | |||||||||
Total
other assets
|
107,881 | 98,916 | ||||||||||
Total
assets
|
2,567,215 | 1,986,319 |
As
of December 31,
|
||||||||||||
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
Note
|
2008
|
2007
|
|||||||||
ThUS$
|
ThUS$
|
|||||||||||
Current
liabilities
|
||||||||||||
Short-term
bank debt
|
11
|
133,355 | 1,807 | |||||||||
Current
portion of long-term bank debt
|
11
|
451 | 801 | |||||||||
Current
portion of bonds payable
|
12
|
7,929 | 8,868 | |||||||||
Dividends
payable
|
656 | 531 | ||||||||||
Accounts
payable
|
109,763 | 103,922 | ||||||||||
Notes
and accounts payable to related companies
|
5
|
178 | 1,987 | |||||||||
Accrued
liabilities
|
13
|
30,414 | 22,314 | |||||||||
Withholdings
|
32,252 | 22,931 | ||||||||||
Income
taxes
|
89,186 | 9,514 | ||||||||||
Deferred
income
|
27
|
31,722 | 10,858 | |||||||||
Deferred
income taxes
|
14
|
- | 6,214 | |||||||||
Other
current liabilities
|
10,000 | 2,675 | ||||||||||
Total
current liabilities
|
445,906 | 192,422 | ||||||||||
Long-term
liabilities
|
||||||||||||
Long-term
bank debt
|
11
|
230,000 | 180,000 | |||||||||
Bonds
payable
|
12
|
285,940 | 306,651 | |||||||||
Deferred
income taxes
|
14
|
57,485 | 55,409 | |||||||||
Long-term
accrued liabilities
|
15
|
37,310 | 22,671 | |||||||||
Other
long-term liabilities
|
397 | 731 | ||||||||||
Total
long-term liabilities
|
611,132 | 565,462 | ||||||||||
Minority
interest
|
16
|
47,069 | 45,999 | |||||||||
Commitments
and contingencies
|
23
|
- | - | |||||||||
Shareholders'
equity
|
||||||||||||
Paid-in
capital
|
17
|
477,386 | 477,386 | |||||||||
Other
reserves
|
17
|
159,721 | 163,442 | |||||||||
Retained
earnings
|
17
|
826,001 | 541,608 | |||||||||
Total
Shareholders' equity
|
1,463,108 | 1,182,436 | ||||||||||
Total
Liabilities and Shareholders' equity
|
2,567,215 | 1,986,319 |
For
the years ended December 31,
|
||||||||||||||||
Note
|
2008
|
2007
|
2006
|
|||||||||||||
ThUS$
|
ThUS$
|
ThUS$
|
||||||||||||||
Operating
income
|
||||||||||||||||
Sales
|
1,774,119 | 1,187,527 | 1,042,886 | |||||||||||||
Cost
of sales
|
(1,056,254 | ) | (857,765 | ) | (753,336 | ) | ||||||||||
Gross
margin
|
717,865 | 329,762 | 289,550 | |||||||||||||
Selling
and administrative expenses
|
(85,709 | ) | (70,273 | ) | (69,662 | ) | ||||||||||
Operating
income
|
632,156 | 259,489 | 219,888 | |||||||||||||
Non-operating
income and expense
|
||||||||||||||||
Non-operating
income
|
19
|
40,590 | 25,948 | 19,293 | ||||||||||||
Non-operating
expenses
|
19
|
(59,896 | ) | (53,032 | ) | (55,341 | ) | |||||||||
Non-operating
loss
|
(19,306 | ) | (27,084 | ) | (36,048 | ) | ||||||||||
Income
before income taxes, minority interest and amortization of negative
goodwill
|
612,850 | 232,405 | 183,840 | |||||||||||||
Income
tax expense
|
14
|
(107,951 | ) | (48,592 | ) | (37,916 | ) | |||||||||
|
||||||||||||||||
Income
before minority interest and amortization of negative
goodwill
|
504,899 | 183,813 | 145,924 | |||||||||||||
Minority
interest
|
16
|
(3,492 | ) | (3,792 | ) | (4,715 | ) | |||||||||
Income
before amortization of negative goodwill
|
501,407 | 180,021 | 141,209 | |||||||||||||
Amortization
of negative goodwill
|
9
|
- | - | 68 | ||||||||||||
Net
income for the year
|
501,407 | 180,021 | 141,277 |
For
the years ended December 31
|
||||||||||||||||
Note
|
2008
|
2007
|
2006
|
|||||||||||||
ThUS$
|
ThUS$
|
ThUS$
|
||||||||||||||
Cash
flows from operating activities
|
||||||||||||||||
Net
income
|
501,407 | 180,021 | 141,277 | |||||||||||||
Charges
(credits) to income not representing cash flows:
|
||||||||||||||||
Depreciation
expense
|
7
|
110,575 | 97,826 | 90,354 | ||||||||||||
Amortization
of intangible assets
|
698 | 712 | 915 | |||||||||||||
Write-offs
and accruals
|
44,710 | 34,063 | 16,512 | |||||||||||||
Equity
participation in net income of unconsolidated investees
|
(14,358 | ) | (3,643 | ) | (2,314 | ) | ||||||||||
Equity
participation in net losses of unconsolidated investees
|
- | 77 | 362 | |||||||||||||
Amortization
of goodwill
|
9
|
2,215 | 2,252 | 2,229 | ||||||||||||
Amortization
of negative goodwill
|
9
|
- | - | (68 | ) | |||||||||||
Loss
(gain) on sales of assets
|
(2,793 | ) | 87 | (809 | ) | |||||||||||
Gains
on sale of investment
|
(1,387 | ) | (1,316 | ) | (732 | ) | ||||||||||
Other
credits to income not representing cash flows
|
22
|
(4,979 | ) | (1,745 | ) | (2,762 | ) | |||||||||
Other
charges to income not representing cash flows
|
22
|
205,986 | 108,075 | 82,333 | ||||||||||||
Foreign
currency exchange and price-level restatement, net
|
15,897 | (2,212 | ) | 2,263 | ||||||||||||
Net
changes in operating assets and liabilities:
|
||||||||||||||||
Accounts
receivable
|
(184,713 | ) | (25,830 | ) | (240 | ) | ||||||||||
Inventories
|
(193,469 | ) | (34,983 | ) | (46,730 | ) | ||||||||||
Other
assets
|
1,976 | (6,437 | ) | 7,917 | ||||||||||||
Accounts
payable
|
61,156 | (4,000 | ) | (23,359 | ) | |||||||||||
Interest
payable
|
1,729 | 582 | 2,968 | |||||||||||||
Net
income taxes payable
|
(42,073 | ) | (23,541 | ) | (49,515 | ) | ||||||||||
Other
accounts payable
|
(15,147 | ) | (2,760 | ) | (10,840 | ) | ||||||||||
VAT
and taxes payable
|
(33,608 | ) | (9,726 | ) | 6,724 | |||||||||||
Minority
interest
|
16
|
3,492 | 3,792 | 4,715 | ||||||||||||
Net
cash provided by operating activities
|
457,314 | 311,294 | 221,200 | |||||||||||||
Cash
flows from financing activities
|
||||||||||||||||
Proceeds
from bank loans
|
280,000 | - | 259,257 | |||||||||||||
Proceeds
from issuance of bonds
|
- | - | 299,833 | |||||||||||||
Payments
of dividends
|
(212,831 | ) | (94,910 | ) | (74,566 | ) | ||||||||||
Repayment
of bank loans
|
(100,000 | ) | (57,089 | ) | (406,282 | ) | ||||||||||
Payment
of bonds
|
(5,573 | ) | (5,131 | ) | - | |||||||||||
Payment
of expenses for the issuance and placement of bonds
payable
|
- | - | (6,629 | ) | ||||||||||||
Net
cash provided by (used in) financing activities
|
(38,404 | ) | (157,130 | ) | 71,613 | |||||||||||
Cash
flows from investing activities
|
||||||||||||||||
Sales
of property, plant and equipment
|
25,969 | 2,498 | 10,289 | |||||||||||||
Sales
of investments in related companies
|
1,688 | 1,478 | 5,790 | |||||||||||||
Other
investing income
|
721 | 399 | 500 | |||||||||||||
Additions
to property, plant and equipment
|
(275,893 | ) | (165,640 | ) | (175,788 | ) | ||||||||||
Capitalized
interest
|
(10,723 | ) | (12,388 | ) | (10,948 | ) | ||||||||||
Purchase
of permanent investments, net of cash acquired of ThUS$
24,311
|
- | - | (88,885 | ) | ||||||||||||
Time
deposits
|
(20,121 | ) | - | - | ||||||||||||
Other
disbursements
|
(448 | ) | (513 | ) | (504 | ) | ||||||||||
Net
cash used in investing activities
|
(278,807 | ) | (174,166 | ) | (259,546 | ) | ||||||||||
Effect
of inflation on cash and cash equivalents
|
(516 | ) | 271 | 2,720 | ||||||||||||
Net
change in cash and cash equivalents
|
139,587 | (19,731 | ) | 35,987 | ||||||||||||
Beginning
balance of cash and cash equivalents
|
164,212 | 183,943 | 147,956 | |||||||||||||
Ending
balance of cash and cash equivalents
|
2e)
|
303,799 | 164,212 | 183,943 |
For the years ended December 31
|
||||||||||||||||
2008
|
2007
|
2006
|
||||||||||||||
ThUS$
|
ThUS$
|
ThUS$
|
||||||||||||||
Supplemental
cash flow information:
|
||||||||||||||||
Interest
paid
|
26,975 | 33,441 | 37,884 | |||||||||||||
Income
taxes paid
|
62,766 | 43,666 | 49,515 | |||||||||||||
Capital
lease obligation
|
268 | 315 | 274 |
a)
|
Basis
for the preparation of the consolidated financial
statements
|
a)
|
Basis
for the preparation of the consolidated financial statements
(continued)
|
Direct or indirect ownership
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
|
%
|
%
|
%
|
|||||||||
Foreign subsidiaries:
|
||||||||||||
Nitrate
Corp. of Chile Limited (United Kingdom)
|
100.00 | 100.00 | 100.00 | |||||||||
Soquimich
SRL (Argentina)
|
100.00 | 100.00 | 100.00 | |||||||||
Nitratos
Naturais do Chile Ltda. (Brazil)
|
100.00 | 100.00 | 100.00 | |||||||||
SQM
Europe NV (Belgium)
|
100.00 | 100.00 | 100.00 | |||||||||
SQM
North America Corp. (USA)
|
100.00 | 100.00 | 100.00 | |||||||||
North
American Trading Company (USA)
|
100.00 | 100.00 | 100.00 | |||||||||
SQM
Perú S.A.
|
100.00 | 100.00 | 100.00 | |||||||||
SQM
Corporation NV (Dutch Antilles)
|
100.00 | 100.00 | 100.00 | |||||||||
S.Q.I.
Corporation NV (Dutch Antilles)
|
100.00 | 100.00 | 100.00 | |||||||||
Soquimich
European Holding BV (Holland)
|
100.00 | 100.00 | 100.00 | |||||||||
SQMC
Holding Corporation LLP (USA)
|
100.00 | 100.00 | 100.00 | |||||||||
SQM
Ecuador S.A.
|
100.00 | 100.00 | 100.00 | |||||||||
Cape
Fear Bulk LLC (USA)
|
- | - | 51.00 | |||||||||
SQM
Investment Corporation NV (Dutch Antilles)
|
100.00 | 100.00 | 100.00 | |||||||||
SQM
Brasil Ltda.
|
100.00 | 100.00 | 100.00 | |||||||||
Royal
Seed Trading Corporation AVV (Aruba)
|
100.00 | 100.00 | 100.00 | |||||||||
SQM
Japan K.K.
|
100.00 | 100.00 | 100.00 | |||||||||
SQM
Oceanía PTY Limited (Australia)
|
100.00 | 100.00 | 100.00 | |||||||||
SQM
France S.A.
|
100.00 | 100.00 | 100.00 | |||||||||
RS
Agro-Chemical Trading AVV (Aruba)
|
100.00 | 100.00 | 100.00 | |||||||||
SQM
Comercial de México S.A. de C.V.
|
100.00 | 100.00 | 100.00 | |||||||||
SQM
Indonesia
|
80.00 | 80.00 | 80.00 | |||||||||
SQM
Virginia LLC (USA)
|
100.00 | 100.00 | 100.00 | |||||||||
Agricolima
S.A. de C.V. (Mexico)
|
- | 100.00 | 100.00 | |||||||||
SQM
Venezuela S.A.
|
100.00 | 100.00 | 100.00 | |||||||||
SQM
Italia SRL (Italy)
|
100.00 | 100.00 | 100.00 | |||||||||
Comercial
Caiman Internacional S.A. (Cayman Islands)
|
100.00 | 100.00 | 100.00 | |||||||||
SQM
Africa PTY (South Africa)
|
100.00 | 100.00 | 100.00 | |||||||||
Administración
y Servicios Santiago S.A. de C.V. (Mexico)
|
100.00 | 100.00 | 100.00 | |||||||||
SQM
Lithium Specialties LLC (USA)
|
100.00 | 100.00 | 100.00 | |||||||||
SQM
Nitratos México S.A. de C.V. (Mexico)
|
51.00 | 51.00 | 51.00 | |||||||||
Fertilizantes
Naturales S.A. (Spain)
|
66.67 | 66.67 | 66.67 | |||||||||
Iodine
Minera B.V. (Holland) Fertilizantes Naturales S.A. (Spain)
(1)
|
100.00 | 100.00 | 100.00 | |||||||||
PTM
SQM Iberia S.A. (Spain)
|
- | - | 100.00 | |||||||||
SQM
Dubai – Fzco (United Arab Emirates).
|
100.00 | 100.00 | 100.00 |
a)
|
Basis
for the preparation of the consolidated financial statements
(continued)
|
Direct or indiret ownership
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
|
%
|
%
|
%
|
|||||||||
Domestic
subsidiaries:
|
||||||||||||
Servicios
Integrales de Tránsitos y Transferencias S.A.
|
100.00 | 100.00 | 100.00 | |||||||||
Soquimich
Comercial S.A.
|
60.64 | 60.64 | 60.64 | |||||||||
Isapre
Norte Grande Limitada
|
100.00 | 100.00 | 100.00 | |||||||||
Almacenes
y Depósitos Limitada
|
100.00 | 100.00 | 100.00 | |||||||||
Ajay
SQM Chile S.A.
|
51.00 | 51.00 | 51.00 | |||||||||
SQM
Nitratos S.A.
|
100.00 | 100.00 | 100.00 | |||||||||
Proinsa
Limitada
|
60.58 | 60.58 | 60.58 | |||||||||
SQM
Potasio S.A.
|
100.00 | 100.00 | 100.00 | |||||||||
SQMC
International Limitada
|
60.64 | 60.64 | 60.64 | |||||||||
SQM
Salar S.A.
|
100.00 | 100.00 | 100.00 | |||||||||
SQM
Industrial S.A
|
100.00 | 100.00 | 100.00 | |||||||||
Minera
Nueva Victoria S.A.
|
100.00 | 100.00 | 100.00 | |||||||||
Exploraciones
Mineras S.A.
|
100.00 | 100.00 | 100.00 | |||||||||
Sociedad
Prestadora de Servicios de Salud Cruz del Norte S.A.
|
100.00 | 100.00 | 100.00 | |||||||||
Comercial
Hydro S.A.
|
60.64 | 60.64 | 60.64 |
b)
|
Periods
presented
|
c)
|
Reporting
currency and price-level
restatement
|
US$
|
||||
December
31, 2006
|
34.44 | |||
December
31, 2007
|
39.49 | |||
December
31, 2008
|
33.71 |
d)
|
Foreign
currency
|
|
i)
|
Foreign
currency transactions
|
|
ii)
|
Translation
of non-U.S. dollar financial
statements
|
|
·
|
Domestic
subsidiaries
|
|
-
|
Balance
sheet accounts are translated to US dollars at the year-end exchange rate
without eliminating the effects of price-level restatement. The assets and
liabilities were translated into US dollars at the exchange rates as of
the respective balance sheet dates of Ch$ 636.45 and Ch$
496.89 per US$ 1 as of December 31, 2008 and 2007,
respectively.
|
|
-
|
Income
statement accounts are translated to US dollars at the average exchange
rate each month. The monetary correction account on the income
statement, which is generated by the inclusion of price-level restatement
on the non-monetary assets and liabilities and shareholders’ equity, is
translated to US dollars at the average exchange rate for each
month.
|
|
-
|
Translation
gains and losses, as well as effects of the price-level restatement are
included as an adjustment in shareholders’ equity, in conformity with
Circular No. 1697 of the SVS.
|
d)
|
Foreign
currency (continued)
|
|
·
|
Foreign
subsidiaries
|
|
-
|
Monetary
assets and liabilities are translated at year-end exchange rates between
the US dollar and the local
currency.
|
|
-
|
All
non-monetary assets and liabilities and shareholders’ equity are
translated at historical exchange rates between the US dollar and the
local currency.
|
|
-
|
Income
and expense accounts, except for such accounts that are calculated using
historical rates (e.g. depreciation and amortization) are translated at
average exchange rates between the US dollar and the local currency each
month.
|
|
-
|
Any
exchange differences are included in the results of operations for the
period.
|
As of December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
US$
|
US$
|
US$
|
||||||||||
Brazilian
Real
|
2.34 | 1.77 | 2.14 | |||||||||
New
Peruvian Sol
|
3.14 | 2.99 | 3.19 | |||||||||
Argentine
Peso
|
3.47 | 3.15 | 3.06 | |||||||||
Japanese
Yen
|
91.03 | 114.15 | 119.11 | |||||||||
Euro
|
0.72 | 0.68 | 0.76 | |||||||||
Mexican
Peso
|
13.77 | 10.90 | 10.88 | |||||||||
Australian
Dollar
|
1.45 | 1.15 | 1.27 | |||||||||
Pound
Sterling
|
0.67 | 0.49 | 0.51 | |||||||||
Ecuadorian
Sucre
|
1.00 | 1.00 | 1.00 | |||||||||
South
African Rand
|
9.28 | 6.81 | 6.99 |
|
e)
|
Cash
and cash equivalents
|
As
of December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
ThUS$
|
ThUS$
|
ThUS$
|
||||||||||
Cash
|
21,618 | 18,236 | 20,915 | |||||||||
Time
deposits
|
116,492 | 85,523 | 32,707 | |||||||||
Mutual
funds
|
165,689 | 60,453 | 130,321 | |||||||||
Total
|
303,799 | 164,212 | 183,943 |
f)
|
Time
deposits
|
g)
|
Allowance
for doubtful accounts
|
h)
|
Inventories
and materials
|
j)
|
Property,
plant and equipment
|
Estimated
|
||
Years
of
useful
life
|
||
Mining
concessions
|
7 –
13
|
|
Building
and infrastructure
|
3 –
80
|
|
Machinery
and equipment
|
3 –
35
|
|
Other
|
2 –
30
|
j)
|
Property,
plant and equipment (continued)
|
k)
|
Investments
in related companies
|
l)
|
Goodwill
and negative goodwill
|
m)
|
Intangible
assets
|
n)
|
Mining
development cost
|
o)
|
Staff
severance indemnities
|
p)
|
Vacations
|
q)
|
Reverse
repurchase agreements
|
r)
|
Dividends
|
s)
|
Derivative
Contracts
|
t)
|
Revenue
recognition
|
u)
|
Computer
software
|
v)
|
Research
and development expenses
|
w)
|
Bonds
payable
|
a)
|
Short-term
and long-term accounts receivable and other accounts receivable as of
December 31 are detailed as
follows:
|
Between
90 days
|
Total
|
|||||||||||||||||||||||
Up
to 90 days
|
And
1 year
|
Short-term
(net)
|
||||||||||||||||||||||
2008
|
2007
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||||||||
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
|||||||||||||||||||
Short-term receivables
|
||||||||||||||||||||||||
Trade
accounts receivable
|
190,398 | 143,503 | 88,698 | 52,444 | 279,096 | 195,947 | ||||||||||||||||||
Allowance
for doubtful accounts
|
(8,935 | ) | (6,203 | ) | ||||||||||||||||||||
Notes
receivable
|
43,060 | 43,784 | 17,773 | 19,459 | 60,833 | 63,243 | ||||||||||||||||||
Allowance
for doubtful accounts
|
(2,953 | ) | (3,269 | ) | ||||||||||||||||||||
Total
trade accounts receivable and notes receivable, net
|
328,041 | 249,718 | ||||||||||||||||||||||
Other
accounts receivable
|
7,822 | 7,355 | 312 | 71 | 8,134 | 7,426 | ||||||||||||||||||
Allowance
for doubtful accounts
|
(1,391 | ) | (1,177 | ) | ||||||||||||||||||||
Other
accounts receivable, net
|
6,743 | 6,249 | ||||||||||||||||||||||
Long-term
receivables
|
767 | 604 |
b)
|
Changes
in the allowance for doubtful accounts for the years ended December 31 are
as follows:
|
2008
|
2007
|
2006
|
||||||||||
ThUS$
|
ThUS$
|
ThUS$
|
||||||||||
At
January 1,
|
10,649 | 11,793 | 11,912 | |||||||||
Charged
to expenses
|
4,700 | 466 | 1,598 | |||||||||
Deductions
(release)
|
(1,042 | ) | (2,235 | ) | (542 | ) | ||||||
Exchange
rate differences
|
(855 | ) | 512 | (177 | ) | |||||||
Business
disposals and other
|
(173 | ) | 113 | (998 | ) | |||||||
At
December 31,
|
13,279 | 10,649 | 11,793 |
c)
|
Consolidated
short-term and long-term receivables by geographic location of customer
are as follows:
|
Chile
|
Europe
|
Asia
and
Oceania
and Other
|
North
America, Mexico
and
Canada
|
Latin
America
and
the Caribbean
|
Total
|
|||||||||||||||||||||||||||||||||||||||||||
2008
|
2007
|
2008
|
2007
|
2008
|
2007
|
2008
|
2007
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||||||||||||||||||||||||||
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
|||||||||||||||||||||||||||||||||||||
Net
short-term trade accounts receivable
|
||||||||||||||||||||||||||||||||||||||||||||||||
Balance
|
48,848 | 69,421 | 84,375 | 66,599 | 23,602 | 9,832 | 37,683 | 28,296 | 75,653 | 15,596 | 270,161 | 189,744 | ||||||||||||||||||||||||||||||||||||
% of
total
|
18.08 | % | 36.59 | % | 31.23 | % | 35.10 | % | 8.74 | % | 5.18 | % | 13.95 | % | 14.91 | % | 28.00 | % | 8.22 | % | 100.00 | % | 100.00 | % | ||||||||||||||||||||||||
Net
short-term notes receivable
|
||||||||||||||||||||||||||||||||||||||||||||||||
Balance
|
56,174 | 53,713 | - | 429 | - | 490 | - | 392 | 1,706 | 4,950 | 57,880 | 59,974 | ||||||||||||||||||||||||||||||||||||
% of
total
|
97.05 | % | 89.56 | % | - | 0.72 | % | - | 0.82 | % | - | 0.65 | % | 2.95 | % | 8.25 | % | 100.00 | % | 100.00 | % | |||||||||||||||||||||||||||
Net
short-term other accounts receivable
|
||||||||||||||||||||||||||||||||||||||||||||||||
Balance
|
2,627 | 3,376 | 262 | 1,609 | 149 | 159 | 3,534 | 457 | 171 | 648 | 6,743 | 6,249 | ||||||||||||||||||||||||||||||||||||
% of
total
|
38.96 | % | 54.03 | % | 3,89 | % | 25.75 | % | 2.21 | % | 2.54 | % | 52.41 | % | 7.31 | % | 2.53 | % | 10.37 | % | 100.00 | % | 100.00 | % | ||||||||||||||||||||||||
Subtotal
short-term accounts receivable, net
|
||||||||||||||||||||||||||||||||||||||||||||||||
Balance
|
107,649 | 126,510 | 84,637 | 68,637 | 23,751 | 10,481 | 41,217 | 29,145 | 77,530 | 21,194 | 334,784 | 255,967 | ||||||||||||||||||||||||||||||||||||
% of
total
|
32.15 | % | 49.42 | % | 25.28 | % | 26.82 | % | 7.09 | % | 4.09 | % | 12.32 | % | 11.39 | % | 23.16 | % | 8.28 | % | 100.00 | % | 100.00 | % | ||||||||||||||||||||||||
Long-term
accounts receivable, net
|
||||||||||||||||||||||||||||||||||||||||||||||||
Balance
|
767 | 604 | - | - | - | - | - | - | - | - | 767 | 604 | ||||||||||||||||||||||||||||||||||||
% of
total
|
100.00 | % | 100.00 | % | - | - | - | - | - | - | - | - | 100.00 | % | 100.00 | % | ||||||||||||||||||||||||||||||||
Total
short and long-term accounts receivable, net
|
||||||||||||||||||||||||||||||||||||||||||||||||
Balance
|
108,416 | 127,114 | 84,637 | 68,637 | 23,751 | 10,481 | 41,217 | 29,145 | 77,530 | 21,194 | 335,551 | 256,571 | ||||||||||||||||||||||||||||||||||||
% of
total
|
32.31 | % | 49.54 | % | 25.22 | % | 26.75 | % | 7.08 | % | 4.09 | % | 12.28 | % | 11.36 | % | 23.11 | % | 8.26 | % | 100.00 | % | 100.00 | % |
a)
|
Amounts
included in balances with related parties as of December 31, 2008 and 2007
are as follows:
|
Short-term
|
Long-term
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
|||||||||||||
Accounts
receivable
|
||||||||||||||||
Doktor
Tarsa
|
13,641 | 4,349 | - | - | ||||||||||||
Nutrisi
Holding N.V.
|
1,702 | 1,800 | - | - | ||||||||||||
Ajay
Europe S.A.R.L.
|
4,061 | 6,838 | - | - | ||||||||||||
Ajay
North America LLC
|
2,520 | 2,706 | - | - | ||||||||||||
Abu
Dhabi Fertilizer Ind. WLL
|
6,579 | 3,622 | 2,000 | 2,000 | ||||||||||||
NU3
B.V.
|
772 | 720 | - | - | ||||||||||||
Sales
de Magnesio Ltda.
|
143 | 103 | - | - | ||||||||||||
SQM
Agro India
|
595 | 363 | - | - | ||||||||||||
Misr
Specialty Fertilizers
|
632 | 616 | - | - | ||||||||||||
Sociedad
de Inversiones Pampa Calichera S.A.
|
8 | 8 | - | - | ||||||||||||
Inversiones
PCS Chile S.A.
|
- | 17 | - | - | ||||||||||||
Kowa
Company Ltd.
|
18,170 | 14,465 | - | - | ||||||||||||
SQM
East Med Turkey
|
1,075 | 160 | - | - | ||||||||||||
NU3
N.V.
|
1,129 | - | - | - | ||||||||||||
Total
|
51,027 | 35,767 | 2,000 | 2,000 |
Short-term
|
||||||||
2008
|
2007
|
|||||||
ThUS$
|
ThUS$
|
|||||||
Accounts
payable
|
||||||||
NU3
N.V
|
- | 1,877 | ||||||
SQM
Thailand Co. Ltd.
|
178 | 110 | ||||||
Total.
|
178 | 1,987 |
b)
|
During
the years ended December 31, 2008, 2007 and 2006 principal commercial
transactions with related parties were as follows
(1):
|
Amount
of
|
Impact
in income
|
|||||||||||||||||||||||||||
Transaction
|
(charge)
credit
|
|||||||||||||||||||||||||||
Company
|
Relationship
|
Type
of Transaction
|
2008
|
2007
|
2006
|
2008
|
2007
|
2006
|
||||||||||||||||||||
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
|||||||||||||||||||||||
NU3
N.V.
|
Investee
|
Sales
of products
|
18,166 | 6,545 | 6,079 | 5,716 | 2,026 | 2,008 | ||||||||||||||||||||
Doktor
Tarsa Tarim Sanayi AS
|
Investee
|
Sales
of products
|
15,590 | 7,577 | 8,868 | 6,492 | 2,159 | 2,409 | ||||||||||||||||||||
Abu
Dhabi Fertilizer WLL
|
Investee
|
Sales
of products
|
9,302 | 2,849 | 3,551 | 5,434 | 1,123 | 992 | ||||||||||||||||||||
Financial
income
|
127 | 117 | - | 127 | 117 | - | ||||||||||||||||||||||
Impronta
SRL
|
Investee
|
Sales
of products
|
- | - | 4,887 | - | - | 1,566 | ||||||||||||||||||||
Ajay
Europe S.A.R.L.
|
Investee
|
Sales
of products
|
19,561 | 24,965 | 16,931 | 2,667 | 9,250 | 6,424 | ||||||||||||||||||||
Financial
income
|
10 | 10 | - | 10 | 10 | - | ||||||||||||||||||||||
Dividends
|
118 | - | - | - | - | - | ||||||||||||||||||||||
NU3
B.V.
|
Investee
|
Sales
of products
|
14,384 | 9,025 | 7,212 | 2,425 | 2,791 | 2,488 | ||||||||||||||||||||
Services
|
109 | - | - | 109 | - | - | ||||||||||||||||||||||
SQM
Agro India PVT LTD
|
Investee
|
Sales
of products
|
598 | - | - | 210 | - | - | ||||||||||||||||||||
Ajay
North America LLC
|
Investee
|
Sales
of products
|
28,676 | 17,281 | 16,215 | 9,970 | 8,060 | 7,605 | ||||||||||||||||||||
Dividends
|
760 | - | - | - | - | - | ||||||||||||||||||||||
Kowa
Company Ltd.(Japan)
|
Shareholder
|
Sales
of products
|
100,633 | 84,701 | 8,019 | 41,066 | 50,770 | 3,671 | ||||||||||||||||||||
Misr
Specialty
|
Investee
|
Sales
of products
|
733 | - | - | 320 | - | - | ||||||||||||||||||||
Financial
income
|
8 | - | - | 8 | - | - | ||||||||||||||||||||||
Nutrisi
|
Investee
|
Financial
income
|
104 | - | - | 104 | - | - | ||||||||||||||||||||
Sales
de Magnesio Ltda.
|
Investee
|
Sales
of products
|
920 | - | - | 334 | - | - | ||||||||||||||||||||
Dividends
|
491 | - | - | - | - | - | ||||||||||||||||||||||
SQM
Eastmed Turkey
|
Investee
|
Sales
of products
|
397 | - | - | 240 | - | - | ||||||||||||||||||||
SQM
Thailand Co. Ltd.
|
Investee
|
Sales
of products
|
83 | - | - | 69 | - | - |
(1)
|
Transactions
with related parties involving acquisitions and disposals of
participations in other entities are discussed in Note
8.
|
2008
|
2007
|
|||||||
ThUS$
|
ThUS$
|
|||||||
Finished
products
|
320,489 | 218,073 | ||||||
Work
in process
|
188,069 | 145,209 | ||||||
Supplies
|
32,169 | 24,486 | ||||||
Total
|
540,727 | 387,768 |
As
of December 31,
|
||||||||
2008
|
2007
|
|||||||
ThUS$
|
ThUS$
|
|||||||
Land
|
||||||||
Land
|
80,529 | 82,727 | ||||||
Mining
concessions
|
30,086 | 30,086 | ||||||
Subtotal
|
110,615 | 112,813 | ||||||
Buildings
and Infrastructure
|
||||||||
Buildings
|
176,136 | 163,412 | ||||||
Installations
|
311,147 | 240,965 | ||||||
Ponds
|
198,163 | 189,682 | ||||||
Railroad
|
36,411 | 23,166 | ||||||
Construction-in-progress
|
181,730 | 165,648 | ||||||
Other
|
73,958 | 58,954 | ||||||
Subtotal
|
977,545 | 841,827 | ||||||
Machinery
and Equipment
|
||||||||
Machinery
|
602,490 | 556,466 | ||||||
Equipment
|
149,907 | 131,898 | ||||||
Project-in-progress
|
30,682 | 23,060 | ||||||
Other
|
41,030 | 19,729 | ||||||
Subtotal
|
824,109 | 731,153 | ||||||
Other
Fixed Assets
|
||||||||
Tools
|
10,808 | 9,390 | ||||||
Furniture
and office equipment
|
16,009 | 15,100 | ||||||
Project-in-progress
|
22,345 | 11,275 | ||||||
Other
|
12,673 | 14,264 | ||||||
Subtotal
|
61,835 | 50,029 | ||||||
Amounts
related to technical appraisal
|
||||||||
Land
|
7,839 | 7,839 | ||||||
Buildings
and infrastructure
|
41,439 | 41,439 | ||||||
Machinery
and equipment
|
12,048 | 12,048 | ||||||
Other
assets
|
53 | 53 | ||||||
Subtotal
|
61,379 | 61,379 | ||||||
Total
property, plant and equipment (cost)
|
2,035,483 | 1,797,201 | ||||||
Less:
Accumulated depreciation
|
||||||||
Buildings
and infrastructure
|
(391,487 | ) | (339,623 | ) | ||||
Machinery
and equipment
|
(449,558 | ) | (404,573 | ) | ||||
Other
fixed assets
|
(35,264 | ) | (31,441 | ) | ||||
Technical
appraisal
|
(39,254 | ) | (38,115 | ) | ||||
Total
accumulated depreciation
|
(915,563 | ) | (813,752 | ) | ||||
Net
property, plant and equipment
|
1,119,920 | 983,449 |
For
the year ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
ThUS$
|
ThUS$
|
ThUS$
|
||||||||||
Buildings
and infrastructure
|
(53,152 | ) | (44,135 | ) | (41,259 | ) | ||||||
Machinery
and equipment
|
(53,104 | ) | (46,210 | ) | (43,290 | ) | ||||||
Other
property, plant and equipment
|
(3,180 | ) | (6,342 | ) | (4,328 | ) | ||||||
Technical
appraisal
|
(1,139 | ) | (1,139 | ) | (1,477 | ) | ||||||
Total
depreciation
|
(110,575 | ) | (97,826 | ) | (90,354 | ) |
As
of December 31,
|
||||||||
2008
|
2007
|
|||||||
ThUS$
|
ThUS$
|
|||||||
Administrative
office buildings
|
1,988 | 1,988 | ||||||
Accumulated
depreciation
|
(552 | ) | (521 | ) | ||||
Total
assets in leasing
|
1,436 | 1,467 |
|
·
|
On
April 24, 2008, the Mexican subsidiary Agricolima S.A. de C.V. was sold to
Mr. Carlos Federico Valenzuela Cadena, Mr. Diego Valenzuela Cadena and Mr.
Jesús Angel Morelos Montfort. The Company recorded a gain on sale of this
investment of ThUS$ 1,387.
|
|
·
|
On
December 7, 2007, SQM North America Corp. sold to Nautilus International
Holding Corporation all the rights which SQM North America Corp had in
Cape Fear Bulk LLC. for ThUS$ 1,478, recording a gain from the sale of the
investments of ThUS$ 1,316.
|
|
·
|
On
January 12, 2007, the subsidiary PTM SQM Ibérica S.A. was liquidated and
extinguished. This operation gave rise to a loss of ThUS$ 41 in the
subsidiary Soquimich European Holding
B.V.
|
|
·
|
On
October 27, 2006, SQM Comercial de México S.A. de C.V. and SQM Industrial
S.A. sold all the shares (100%) they had in Fertilizantes Olmeca y SQM
S.A. de C.V. to Yara Nederland B.V. and Yara Holdings Netherlands B.V.
(both being part of Yara Group, party related to SQM prior to the
transaction mentioned in Note 5) for a sum of ThUS$ 4,888. The sale
generated gain of ThUS$ 1,040.
|
|
·
|
On
September 14, 2006, Soquimich European Holding B.V. (SEH) sold to Yara
Italia SPA (being part of Yara Group) its entire participation (50% of
rights) in Impronta SRL for a sum of ThUS$ 902. The transaction generated
loss of ThUS$ 308.
|
|
·
|
On
May 9, 2006, SQM Industrial S.A. and SQM Potasio S.A. provided funding to
Prestadora de Servicios de Salud Cruz del Norte S.A. The entity’s paid-in
capital amounts to ThCh$ 50,000 (approx. ThUS$ 97 when the entity was
formed) divided into 5,000 shares with no par value, no privileges or
preferences, which are paid in full upon
subscription.
|
|
·
|
On
January 24, 2006, Soquimich European Holding B.V. and Nutrisi Holding N.V.
acquired 334 and 666 shares, respectively of Fertilizantes Naturales S.A.
(“Fenasa”) for ThEuro 75,100 (approx. ThUS$ 91 in the moment of the
transaction) thereby increasing total SQM Group ownership of Fenasa to
66.67%.
|
|
·
|
On
January 19, 2006 Sociedad Química y Minera de Chile S.A. and some of its
subsidiaries have acquired from DSM Group based in the Netherlands (third
party), the total amount of shares of three companies that participate in
the markets of the production and commercialization of iodine and iodine
derivatives in Chile (DSM Minera S.A. and Exploraciones Mineras S.A.) and
abroad (DSM Minera B.V. based in Netherlands). The purchase price paid in
cash for Chilean operations was ThUS$ 100,067 and for DSM Minera B.V. was
ThUS$ 13,840 in cash.
|
|
·
|
At
the First General Extraordinary Shareholders’ Meeting of SQM Industrial
S.A. held on January 9, 2006, its shareholders approved the merger of SQM
Procesos S.A. into SQM Industrial S.A. through the dissolution of SQM
Procesos S.A. and its incorporation into SQM Industrial S.A., which in
effect acquires all assets and liabilities of SQM Procesos
S.A.
|
Equity
of
|
Equity
participation
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Company
|
Currency
|
Ownership
interest
as
of December 31,
|
investment
as
of
December 31,
|
Net
income (loss)
for
the year ended
|
Carrying
value as
of
December 31,
|
in
net income (loss) for
the
year December 31,
|
||||||||||||||||||||||||||||||||||||||||||||||||||
of
origin
|
2008
|
2007
|
2006
|
2008
|
2007
|
2008
|
2007
|
2006
|
2008
|
2007
|
2008
|
2007
|
2006
|
|||||||||||||||||||||||||||||||||||||||||||
%
|
%
|
%
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
||||||||||||||||||||||||||||||||||||||||||||
Ajay
North America LLC
|
USA
|
US$
|
49.00 | 49.00 | 49.00 | 12,482 | 11,966 | 2,067 | 1,284 | 291 | 4,892 | 4,657 | 1,013 | 629 | 142 | |||||||||||||||||||||||||||||||||||||||||
Nutrisi
Holding N.V.
|
Belgium
|
Euros
|
50.00 | 50.00 | 50.00 | 14,494 | 10,429 | 4,634 | 1,163 | 846 | 6,823 | 5,092 | 2,017 | 581 | 425 | |||||||||||||||||||||||||||||||||||||||||
Doktor
Tarsa Tarim Sanayi AS
|
Turkey
|
Euros
|
50.00 | 50.00 | 50.00 | 22,424 | 8,472 | 12,669 | 2,027 | 1,291 | 11,212 | 4,236 | 6,335 | 1,014 | 645 | |||||||||||||||||||||||||||||||||||||||||
Ajay
Europe S.A.R.L.
|
France
|
Euros
|
50.00 | 50.00 | 50.00 | 10,033 | 9,467 | 1,625 | 1,474 | 993 | 4,282 | 3,703 | 813 | 737 | 497 | |||||||||||||||||||||||||||||||||||||||||
Misr
Specialty Fertilizers
|
Egypt
|
US$
|
47.49 | 47.49 | 47.49 | 4,733 | 4,529 | 622 | (140 | ) | (446 | ) | 2,247 | 2,151 | 295 | (67 | ) | (212 | ) | |||||||||||||||||||||||||||||||||||||
Abu
Dhabi Fertilizer Industries WLL
|
UAE
|
US$
|
50.00 | 50.00 | 50.00 | 10,555 | 4,713 | 5,842 | 794 | 366 | 5,277 | 2,356 | 2,921 | 397 | 183 | |||||||||||||||||||||||||||||||||||||||||
Impronta
SRL
|
Italia
|
Euros
|
- | - | - | - | - | - | - | - | - | 141 | ||||||||||||||||||||||||||||||||||||||||||||
Sales
de Magnesio Ltda.
|
Chile
|
Ch$
|
50.00 | 50.00 | 50.00 | 946 | 1,290 | 697 | 509 | 428 | 473 | 645 | 349 | 254 | 214 | |||||||||||||||||||||||||||||||||||||||||
SQM
Eastmed Turkey
|
Turkey
|
Euros
|
50.00 | 50.00 | 50.00 | 437 | 196 | 270 | (7 | ) | (210 | ) | 219 | 98 | 135 | (4 | ) | (105 | ) | |||||||||||||||||||||||||||||||||||||
Asociación
Garantizadora de Pensiones
|
Chile
|
Ch$
|
3.31 | 3.31 | 3.31 | 536 | 728 | (5 | ) | - | - | 18 | 24 | - | - | - | ||||||||||||||||||||||||||||||||||||||||
Charlee
SQM Thailand Co. Ltd.
|
Thailand
|
US$
|
40.00 | 40.00 | 40.00 | 3,535 | 2,401 | 1,016 | 77 | 167 | 1,414 | 960 | 407 | 31 | 67 | |||||||||||||||||||||||||||||||||||||||||
Agro
India Ltda.
|
India
|
US$
|
49.00 | 49.00 | 49.00 | 191 | 27 | 153 | (13 | ) | (94 | ) | 94 | 13 | 75 | (6 | ) | (45 | ) | |||||||||||||||||||||||||||||||||||||
Total
|
36,951 | 23,935 | 14,360 | 3,566 | 1,952 |
Amortization for the year ended
December 31,
|
Net Balance as of
December 31,
|
|||||||||||||||||||
Company
|
2008
|
2007
|
2006
|
2008
|
2007
|
|||||||||||||||
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
||||||||||||||||
SQM
Potassium S.A.
|
145 | 145 | 144 | 1,157 | 1,302 | |||||||||||||||
Comercial
Hydro S.A.
|
208 | 245 | 174 | 737 | 1,065 | |||||||||||||||
SQM
Industrial S.A.
|
1,113 | 1,113 | 1,154 | 17,803 | 18,916 | |||||||||||||||
SQM
México S.A. de C.V.
|
56 | 56 | 56 | 723 | 779 | |||||||||||||||
Comercial
Caiman Internacional S.A.
|
23 | 23 | 23 | 85 | 108 | |||||||||||||||
Fertilizantes
Olmeca S.A. de C.V.
|
- | - | 56 | - | - | |||||||||||||||
SQM
Dubai – FZCO
|
101 | 101 | 101 | 1,682 | 1,783 | |||||||||||||||
Iodine
Minera B.V.
|
569 | 569 | 521 | 9,714 | 10,283 | |||||||||||||||
Total
|
2,215 | 2,252 | 2,229 | 31,901 | 34,236 |
Amortization for the year ended
December 31,
|
Net Balance as of
December 31,
|
|||||||||||||||||||
Company
|
2008
|
2007
|
2006
|
2008
|
2007
|
|||||||||||||||
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
||||||||||||||||
Minera
Mapocho S.A.
|
- | - | 68 | - | - | |||||||||||||||
Minera
Nueva Victoria S.A.
|
- | - | - | 1,279 | 1,291 | |||||||||||||||
Total
|
- | - | 68 | 1,279 | 1,291 |
As
of December 31,
|
||||||||
2008
|
2007
|
|||||||
ThUS$
|
ThUS$
|
|||||||
Engine
and equipment spare-parts, net
|
2,306 | 2,987 | ||||||
Mine
development costs
|
24,892 | 23,944 | ||||||
Construction
of Salar-Baquedano road
|
1,050 | 1,170 | ||||||
Deferred
debt issuance costs
|
320 | 342 | ||||||
Cost
of issuance and placement of bonds
|
4,278 | 4,864 | ||||||
Other
|
1,580 | 2,311 | ||||||
Total
|
34,426 | 35,618 |
As
of December 31,
|
||||||||
2008
|
2007
|
|||||||
ThUS$
|
ThUS$
|
|||||||
Bank
or financial institution
|
||||||||
Banco
de Credito e Inversiones
|
35,518 | - | ||||||
JP
Morgan Chase Bank
|
20,317 | - | ||||||
BBVA
Banco Bilbao Vizcaya Argentaria
|
40,524 | 180 | ||||||
Fortis
Bank
|
641 | 685 | ||||||
Banco
Santander
|
20,075 | - | ||||||
Banesto
|
390 | 432 | ||||||
HSBC
Bank Chile
|
15,266 | - | ||||||
Deutsche
Bank España S.A.
|
408 | 345 | ||||||
Caixa
Penedes de España
|
194 | 131 | ||||||
HSBC
Bank Middle East Ltd
|
22 | 34 | ||||||
Total
|
133,355 | 1,807 | ||||||
Annual
average interest rate
|
7.16 | % | 4.31 | % |
As
of December 31,
|
||||||||
2008
|
2007
|
|||||||
Bank
or financial institution
|
ThUS$
|
ThUS$
|
||||||
BBVA
Banco Bilbao Vizcaya Argentaria (1)
|
100,204 | 100,433 | ||||||
Export
Development Canada (2)
|
50,032 | - | ||||||
ING
Bank (3)
|
80,215 | - | ||||||
80,368 | ||||||||
Total
|
230,451 | 180,801 | ||||||
Less:
Current portion
|
(451 | ) | (801 | ) | ||||
Long-term
debt
|
230,000 | 180,000 |
|
(1)
|
U.S.
dollar-denominated loan without guarantee, interest rate of Libor + 0.375%
per annum, quarterly payment. The principal is due on March 3,
2010.
|
|
(2)
|
U.S.
dollar denominated loan without guarantee, interest rate of Libor + 1.5%
per-annum, quarterly payment. The principal is due on November 30,
2010.
|
|
(3)
|
U.S.
dollar-denominated loan without guarantee, interest rate of Libor + 0.30%
per annum, semi-annually payment. The principal is due on November 28,
2011.
|
As
of December 31,
|
||||||||
2008
|
2007
|
|||||||
Years
to maturity
|
ThUS$
|
ThUS$
|
||||||
Current
portion
|
451 | 801 | ||||||
1
to 2 years
|
150,000 | - | ||||||
2
to 3 years
|
80,000 | 100,000 | ||||||
3
to 5 years
|
- | 80,000 | ||||||
Total
|
230,451 | 180,801 |
Number of
Registration of
the instrument
|
Series
|
Nominal
Amount
|
Currency
or
indexation unit
|
Interest
Rate
|
Matures on
|
Payment of
interest
|
Repayment
of principal
|
Balance
as of Dec
31, 2008
|
Balance
as of Dec
31, 2007
|
|||||||||||||||
ThUS$
|
ThUS$
|
|||||||||||||||||||||||
Current
portion of long-term bonds payable:
|
||||||||||||||||||||||||
446
|
C
|
150,000 |
UF
|
4.00 | % |
Dec
12, 2009
|
Semi-annual
|
Semi-annual
|
5,352 | 6,291 | ||||||||||||||
184
|
Single
|
- |
ThUS$
|
6.125 | % |
Oct
15, 2009
|
Semi-annual
|
Bullet
|
2,577 | 2,577 | ||||||||||||||
Total
|
7,929 | 8,868 | ||||||||||||||||||||||
Long-term
bonds payable:
|
||||||||||||||||||||||||
446
|
C
|
2,550,000 |
UF
|
4.00 | % |
Dec
1, 2026
|
Semi-annual
|
Semi-annual
|
85,940 | 106,651 | ||||||||||||||
184
|
Single
|
200,000 |
ThUS$
|
6.125 | % |
Apr
15, 2016
|
Semi-annual
|
Bullet
|
200,000 | 200,000 | ||||||||||||||
Total
|
285,940 | 306,651 |
As of December 31,
|
||||||||
2008
|
2007
|
|||||||
ThUS$
|
ThUS$
|
|||||||
Accrued
royalty payments to CORFO
|
5,256 | 3,643 | ||||||
Provision
for employee compensation and legal costs
|
715 | 925 | ||||||
Taxes
and monthly income tax installment payments
|
11,659 | 3,496 | ||||||
Vacation
accrual
|
10,518 | 11,919 | ||||||
Marketing
expenses
|
107 | 107 | ||||||
Audit
fees
|
477 | 400 | ||||||
Other
accruals
|
1,682 | 1,824 | ||||||
Total
|
30,414 | 22,314 |
As of December 31,
|
||||||||
2008
|
2007
|
|||||||
ThUS$
|
ThUS$
|
|||||||
Accumulated
tax basis retained earnings with tax credit
|
813,716 | 381,272 | ||||||
Accumulated
tax basis retained earnings without tax credit
|
132,773 | 56,332 | ||||||
Tax
loss carry-forwards (1)
|
16,949 | 142,236 | ||||||
Credit
for shareholders (2)
|
166,554 | 77,904 |
(1)
|
Tax
losses in Chile can be carried forward
indefinitely.
|
(2)
|
Corresponds
to credit to income taxes that shareholders have in relation to
distribution of dividends.
|
As of December 31, 2008
|
Deferred tax asset
|
Deferred tax liability
|
||||||||||||||
Short-term
|
Long-term
|
Short-term
|
Long-term
|
|||||||||||||
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
|||||||||||||
Temporary
differences
|
||||||||||||||||
Allowance
for doubtful accounts
|
1,029 | 897 | - | - | ||||||||||||
Vacation
accrual
|
1,734 | - | - | - | ||||||||||||
Unrealized
gain on sale of products
|
76,633 | - | - | - | ||||||||||||
Provision
for obsolescence of non-current assets
|
- | 3,940 | - | - | ||||||||||||
Production
expenses
|
- | - | 29,774 | - | ||||||||||||
Accelerated
depreciation of PP&E
|
- | - | - | 72,192 | ||||||||||||
Exploration
expenses
|
- | - | - | 4,702 | ||||||||||||
Capitalized
interest
|
- | - | - | 9,252 | ||||||||||||
Staff
severance indemnities
|
- | - | - | 1,935 | ||||||||||||
Fair
value of fixed assets
|
- | 3,153 | - | - | ||||||||||||
Provision
for employee benefits
|
11 | 2,904 | - | - | ||||||||||||
Capitalized
expenses
|
- | - | - | 826 | ||||||||||||
Tax
loss carry-forwards
|
- | 4,362 | - | - | ||||||||||||
Accrued
loss on derivatives
|
629 | - | - | - | ||||||||||||
Accrued
interest
|
504 | - | - | - | ||||||||||||
Deferred
mining activity royalty taxes
|
971 | 494 | 2,625 | 4,384 | ||||||||||||
Write-downs of inventory
|
- | 10,362 | - | - | ||||||||||||
Other
|
6,496 | 1,242 | - | 370 | ||||||||||||
Total
gross deferred taxes
|
88,007 | 27,354 | 32,399 | 93,661 | ||||||||||||
Total
complementary accounts
|
- | - | - | (13,515 | ) | |||||||||||
Valuation
allowance
|
(20,806 | ) | (4,693 | ) | - | - | ||||||||||
Total
deferred taxes
|
67,201 | 22,661 | 32,399 | 80,146 | ||||||||||||
Deferred
tax asset/liability, net
|
34,802 | - | - | 57,485 |
As of December 31, 2007
|
Deferred tax asset
|
Deferred tax liability
|
||||||||||||||
Short-term
|
Long-term
|
Short-term
|
Long-term
|
|||||||||||||
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
|||||||||||||
Temporary
differences
|
||||||||||||||||
Allowance
for doubtful accounts
|
1,335 | 605 | - | - | ||||||||||||
Vacation
accrual
|
1,872 | - | - | - | ||||||||||||
Unrealized
gain on sale of products
|
17,521 | - | - | - | ||||||||||||
Provision
for obsolescence of non-current assets
|
- | 3,779 | - | - | ||||||||||||
Production
expenses
|
- | - | 20,535 | - | ||||||||||||
Accelerated
depreciation of PP&E
|
- | - | - | 62,190 | ||||||||||||
Exploration
expenses
|
- | - | - | 4,327 | ||||||||||||
Capitalized
interest
|
- | - | - | 8,384 | ||||||||||||
Staff
severance indemnities
|
- | - | - | 1,733 | ||||||||||||
Fair
value of fixed assets
|
- | 2,119 | - | - | ||||||||||||
Leased
assets
|
- | - | - | 12 | ||||||||||||
Capitalized
expenses
|
- | - | - | 929 | ||||||||||||
Tax
loss carry-forwards
|
- | 25,883 | - | - | ||||||||||||
Accrued
gain from swap contract
|
- | - | 2,545 | - | ||||||||||||
Deferred
revenue
|
188 | - | - | - | ||||||||||||
Provision
for energy tariff difference
|
2,175 | - | - | - | ||||||||||||
Accrued
interest
|
233 | - | - | - | ||||||||||||
Allowances
for obsolete inventories
|
- | 5,382 | - | - | ||||||||||||
Other
|
1,215 | 45 | 140 | 596 | ||||||||||||
Total
gross deferred taxes
|
24,539 | 37,813 | 23,220 | 78,171 | ||||||||||||
Total
complementary accounts
|
- | - | - | (15,633 | ) | |||||||||||
Valuation
allowance
|
(7,533 | ) | (30,684 | ) | - | - | ||||||||||
Total
deferred taxes
|
17,006 | 7,129 | 23,220 | 62,538 | ||||||||||||
Deferred
tax asset/liability, net
|
- | - | 6,214 | 55,409 |
2008
|
2007
|
2006
|
||||||||||
ThUS$
|
ThUS$
|
ThUS$
|
||||||||||
Provision
for current income taxes
|
(147,694 | ) | (38,218 | ) | (24,797 | ) | ||||||
Effect
of deferred tax assets and liabilities
|
25,134 | (2,833 | ) | (13,447 | ) | |||||||
Adjustment
for tax expense (previous year)
|
576 | 132 | 238 | |||||||||
Effect
of amortization of complementary accounts
|
(2,111 | ) | (5,508 | ) | (4,021 | ) | ||||||
Effect
on deferred tax assets and liabilities due to changes in valuation
allowance
|
13,230 | (2,182 | ) | 4,420 | ||||||||
Other
tax charges and credits
|
2,914 | 17 | (309 | ) | ||||||||
Total
income tax expense
|
(107,951 | ) | (48,592 | ) | (37,916 | ) |
As of December 31,
|
||||||||
2008
|
2007
|
|||||||
ThUS$
|
ThUS$
|
|||||||
Staff
severance indemnities
|
22,129 | 20,679 | ||||||
Incentive
bonus provision (1)
|
12,000 | - | ||||||
Closure
of mining sites and environmental expenses
|
3,181 | 1,992 | ||||||
Total
|
37,310 | 22,671 |
2008
|
2007
|
2006
|
||||||||||
ThUS$
|
ThUS$
|
ThUS$
|
||||||||||
Opening
balance
|
20,679 | 17,472 | 16,415 | |||||||||
Increases
in obligation
|
8,332 | 4,190 | 3,253 | |||||||||
Benefits
paid
|
(2,227 | ) | (2,245 | ) | (1,546 | ) | ||||||
Foreign
currency translation
|
(4,796 | ) | 1,336 | (640 | ) | |||||||
Other
changes
|
141 | (74 | ) | (10 | ) | |||||||
Total
|
22,129 | 20,679 | 17,472 |
Participation in equity as
of December 31,
|
Participation in (income) loss for
the years ended December 31,
|
|||||||||||||||||||
2008
|
2007
|
2008
|
2007
|
2006
|
||||||||||||||||
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
||||||||||||||||
Soquimich
Comercial S.A.
|
42,498 | 42,347 | (2,669 | ) | (3,886 | ) | (3,500 | ) | ||||||||||||
Ajay
SQM Chile S.A.
|
4,159 | 3,541 | (532 | ) | 166 | (912 | ) | |||||||||||||
Cape
Fear Bulk LLC
|
- | - | - | (99 | ) | (248 | ) | |||||||||||||
SQM
Italia S.R.L
|
- | - | - | - | - | |||||||||||||||
SQM
Nitratos México S.A. de C.V.
|
10 | 13 | 3 | 31 | (84 | ) | ||||||||||||||
Fertilizantes
Naturales S.A.
|
423 | 123 | (300 | ) | - | 2 | ||||||||||||||
SQM
Indonesia S.A.
|
(30 | ) | (30 | ) | 13 | (1 | ) | 29 | ||||||||||||
SQM
Potasio S.A.
|
9 | 5 | (7 | ) | (3 | ) | (2 | ) | ||||||||||||
Total
|
47,069 | 45,999 | (3,492 | ) | (3,792 | ) | (4,715 | ) |
a)
|
Changes
in shareholders’ equity in the years ended December 31, 2008, 2007 and
2006 were as follows:
|
Other
|
Accumulated
deficit of
|
|||||||||||||||||||||||||||||||
accumulated
|
Subsidiaries in
|
|||||||||||||||||||||||||||||||
Number
|
Paid-in
|
comprehensive
|
Interim
|
development
|
Retained
|
Net
|
||||||||||||||||||||||||||
of shares
|
capital
|
income
|
dividends
|
stage
|
earnings
|
income
|
Total
|
|||||||||||||||||||||||||
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
||||||||||||||||||||||||||
Balance
as of January 1, 2006
|
263,196,524 | 477,386 | 157,287 | - | (8,370 | ) | 280,607 | 113,506 | 1,020,416 | |||||||||||||||||||||||
Transfer
of the 2005 net income to retained earnings
|
- | - | - | - | - | 113,506 | (113,506 | ) | - | |||||||||||||||||||||||
Transfer
of the accumulated deficit from subsidiaries in development stage to
retained earnings
|
- | - | - | - | 8,370 | (8,370 | ) | - | ||||||||||||||||||||||||
Declared
dividends 2006
|
- | - | - | - | - | (73,647 | ) | - | (73,647 | ) | ||||||||||||||||||||||
Other
comprehensive loss
|
- | - | (2,097 | ) | - | - | - | - | (2,097 | ) | ||||||||||||||||||||||
Net
income for the year
|
- | - | - | - | - | - | 141,277 | 141,277 | ||||||||||||||||||||||||
Balance
as of December 31, 2006
|
263,196,524 | 477,386 | 155,190 | - | - | 312,096 | 141,277 | 1,085,949 | ||||||||||||||||||||||||
Balance
as of January 1, 2007
|
263,196,524 | 477,386 | 155,190 | - | - | 312,096 | 141,277 | 1,085,949 | ||||||||||||||||||||||||
Transfer
of the 2006 net income to retained earnings
|
- | - | - | - | - | 141,277 | (141,277 | ) | - | |||||||||||||||||||||||
Transfer
of the accumulated deficit from subsidiaries in development stage to
retained earnings
|
- | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Declared
dividends 2007
|
- | - | - | - | - | (91,786 | ) | - | (91,786 | ) | ||||||||||||||||||||||
Other
comprehensive income
|
- | - | 8,252 | - | - | - | - | 8,252 | ||||||||||||||||||||||||
Net
income for the year
|
- | - | - | - | - | - | 180,021 | 180,021 | ||||||||||||||||||||||||
Balance
as of December 31, 2007
|
263,196,524 | 477,386 | 163,442 | - | - | 361,587 | 180,021 | 1,182,436 | ||||||||||||||||||||||||
Balance
January 1,2008
|
263,196,524 | 477,386 | 163,442 | - | - | 361,587 | 180,021 | 1,182,436 | ||||||||||||||||||||||||
Transfer
of the 2007 net income to retained earnings
|
- | - | - | - | - | 180,021 | (180,021 | ) | - | |||||||||||||||||||||||
Declared
dividends 2008
|
- | - | - | - | - | (117,014 | ) | - | (117,014 | ) | ||||||||||||||||||||||
Other
comprehensive loss
|
- | - | (3,721 | ) | - | - | - | - | (3,721 | ) | ||||||||||||||||||||||
Interim
dividends
|
- | - | - | (100,000 | ) | - | - | - | (100,000 | ) | ||||||||||||||||||||||
Net
income for the year
|
- | - | - | - | - | - | 501,407 | 501,407 | ||||||||||||||||||||||||
Balance
as of December 31, 2008
|
263,196,524 | 477,386 | 159,721 | (100,000 | ) | - | 424,594 | 501,407 | 1,463,108 |
Other comprehensive income (loss)
For the year ended December 31,
|
Accumulated other
comprehensive income
As of December 31,
|
|||||||||||||||||||
Description
|
2008
|
2007
|
2006
|
2008
|
2007
|
|||||||||||||||
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
||||||||||||||||
Technical
appraisal
|
- | - | - | 151,345 | 151,345 | |||||||||||||||
Changes
in other comprehensive income related to investments:
|
||||||||||||||||||||
Soquimich
Comercial S.A. (1)
|
- | 7,888 | (871 | ) | 13,286 | 13,286 | ||||||||||||||
Comercial
Hydro S.A.
|
(725 | ) | - | - | (725 | ) | - | |||||||||||||
SQMC
Internacional Ltda
|
(35 | ) | - | - | (35 | ) | - | |||||||||||||
Proinsa
Ltda
|
(26 | ) | - | - | (26 | ) | - | |||||||||||||
Isapre
Norte Grande Limitada (1)
|
(1 | ) | 39 | - | (45 | ) | (44 | ) | ||||||||||||
Inversiones
Augusta S.A. (1)
|
- | - | - | (761 | ) | (761 | ) | |||||||||||||
SQM
Ecuador S.A. (2)
|
- | - | - | (271 | ) | (271 | ) | |||||||||||||
Almacenes
y Depósitos Limitada (1)
|
- | 66 | - | 88 | 88 | |||||||||||||||
Asociación
Garantizadora de Pensiones (1)
|
(6 | ) | (5 | ) | (1 | ) | (23 | ) | (17 | ) | ||||||||||
Sales
de Magnesio Ltda. (1)
|
(101 | ) | 59 | (7 | ) | 10 | 111 | |||||||||||||
Sociedad
de Servicios de Salud
|
- | 14 | - | 14 | 14 | |||||||||||||||
SQM
North America Corp. (3)
|
(2,827 | ) | (141 | ) | (1,218 | ) | (4,186 | ) | (1,359 | ) | ||||||||||
SQM
Dubai Fzco. (1)
|
- | (11 | ) | - | (11 | ) | (11 | ) | ||||||||||||
Ajay
Europe SARL (1)
|
- | 343 | - | 343 | 343 | |||||||||||||||
Other
entities (1)
|
- | - | - | 718 | 718 | |||||||||||||||
Total
|
(3,721 | ) | 8,252 | (2,097 | ) | 159,721 | 163,442 |
|
(1)
|
Corresponds
to translation adjustments and price-level
restatements.
|
|
(2)
|
Corresponds
to the translation adjustment produced by the application of a law enacted
by the Ecuadorian Government
|
|
(3)
|
Relates
to valuation differences generated in the pension plan of the subsidiary
SQM North America Corp.
|
c)
|
Paid-in
capital
|
Series
A:
|
If
the election of the President of the Company results in a tied vote, the
Company's directors may vote once again, without the vote of the director
elected by the Series B
shareholders.
|
Series B:
|
(1)
|
A
general or extraordinary shareholders' meeting may be called at the
request of shareholders representing 5% of the Company's Series B
shares.
|
(2)
|
An
extraordinary meeting of the Board of Directors may be called with or
without the agreement of the Company's President, at the request of the
director elected by Series B
shareholders.
|
2008
|
Notional or
|
||||||||||||||||||
|
covered
|
Position
|
(Liability)Asset
|
Income
|
|||||||||||||||
Type of
|
amount
|
Purchase/Sale
|
amount
|
(loss) effect
|
|||||||||||||||
derivative
|
ThUS$
|
Expiration
|
Risk type
|
(P/S)
|
ThUS$
|
ThUS$
|
|||||||||||||
US
dollar fwd.
|
42,000 |
1st quarter
of 2009
|
Exchange
rate
|
P
|
(1,273 | ) | (1,273 | ) | |||||||||||
Swap
|
113,025 |
4th quarter
of 2026
|
Interest
rate
|
P
|
(11,031 | ) | (1,524 | ) | |||||||||||
US
dollar option
|
8,478 |
1st
quarter of 2009
|
Exchange
rate
|
S
|
(843 | ) | (843 | ) | |||||||||||
US
dollar option
|
11,316 |
2st
quarter of 2009
|
Exchange
rate
|
S
|
(1,125 | ) | (1,125 | ) | |||||||||||
US
dollar option
|
1,617 |
3st
quarter of 2009
|
Exchange
rate
|
S
|
(161 | ) | (161 | ) | |||||||||||
US
dollar fwd.
|
1,489 |
1st
quarter of 2009
|
Exchange
rate
|
P
|
(86 | ) | (86 | ) | |||||||||||
US
dollar fwd.
|
24,154 |
1st
quarter of 2009
|
Exchange
rate
|
P
|
(2,390 | ) | (2,390 | ) | |||||||||||
US
dollar option
|
40,378 |
1st quarter
of 2009
|
Exchange
rate
|
P
|
1,225 | 1,225 | |||||||||||||
US
dollar fwd.
|
298 |
1st quarter
of 2009
|
Exchange
rate
|
S
|
(90 | ) | (90 | ) | |||||||||||
US
dollar fwd.
|
1,289 |
1st quarter
of 2009
|
Exchange
rate
|
P
|
357 | 357 | |||||||||||||
US
dollar fwd.
|
4,311 |
2st quarter
of 2009
|
Exchange
rate
|
S
|
(1,169 | ) | (1,169 | ) | |||||||||||
US
dollar fwd.
|
77 |
2st quarter
of 2009
|
Exchange
rate
|
P
|
17 | 17 | |||||||||||||
US
dollar fwd.
|
112 |
3st quarter
of 2009
|
Exchange
rate
|
S
|
(21 | ) | (21 | ) | |||||||||||
US
dollar option
|
27,818 |
1st quarter
of 2009
|
Exchange
rate
|
P
|
124 | - | |||||||||||||
US
dollar fwd.
|
30,000 |
1st quarter
of 2009
|
Exchange
rate
|
S
|
- | - | |||||||||||||
306,362 | (16,466 | ) | (7,083 | ) |
2007
Type of
derivative
|
Notional or
covered
amount
|
Expiration
|
Risk type
|
Position
Purchase/Sale
(P/S)
|
(Liability)Asset
amount
|
Income
(loss) effect
|
|||||||||||||
ThUS$
|
ThUS$
|
ThUS$
|
|||||||||||||||||
US
dollar option
|
13,916 |
1st quarter
of 2008
|
Exchange
rate
|
P
|
(130 | ) | (130 | ) | |||||||||||
US
dollar fwd.
|
4,696 |
1st
quarter of 2008
|
Exchange
rate
|
P
|
(1 | ) | (1 | ) | |||||||||||
Swap
|
102,630 |
1st quarter
of 2026
|
Interest
rate
|
P
|
14,968 | 14,968 | |||||||||||||
US
dollar PUT
|
368 |
1st quarter
of 2028
|
Exchange
rate
|
P
|
(368 | ) | (368 | ) | |||||||||||
121,610 | 14,469 | 14,469 |
For
the year ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
ThUS$
|
ThUS$
|
ThUS$
|
||||||||||
Interest
income
|
13,858 | 9,347 | 11,410 | |||||||||
Equity
participation in net income of unconsolidated investees
|
14,360 | 3,643 | 2,314 | |||||||||
Insurance
recoveries
|
581 | 275 | 307 | |||||||||
Gain
from sale of assets of SQM Lithium
|
2,342 | - | - | |||||||||
Reversal
of allowance for doubtful accounts
|
2,623 | 229 | 238 | |||||||||
Sale
of mining concessions
|
721 | 399 | 499 | |||||||||
Sale
of service
|
156 | 369 | 75 | |||||||||
Sale
of fixed asset, materials and spare parts
|
1,064 | - | 753 | |||||||||
Gain
on sale of investments in related companies
|
1,387 | 1,316 | 732 | |||||||||
Rental
of property, plant and equipment
|
1,092 | 958 | 1,023 | |||||||||
Indemnities
received
|
146 | 523 | - | |||||||||
Sale
of cross currency swap
|
- | 4,000 | - | |||||||||
Net
foreign currency exchange gains and price-level
restatement
|
- | 2,212 | - | |||||||||
Recovery
of doubtful accounts
|
424 | 861 | - | |||||||||
Payment
discounts obtained from suppliers
|
815 | 458 | 690 | |||||||||
Fines
collected from third parties
|
77 | 192 | 159 | |||||||||
Other
income
|
944 | 1,166 | 1,093 | |||||||||
Total
|
40,590 | 25,948 | 19,293 |
For the year ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
ThUS$
|
ThUS$
|
ThUS$
|
||||||||||
Interest
expense
|
(19,957 | ) | (19,949 | ) | (27,593 | ) | ||||||
Net
foreign exchange losses
|
(15,897 | ) | - | (2,263 | ) | |||||||
Non-capitalized
exploration project expenses and provisions for damages and liquidation of
assets
|
(8,961 | ) | (16,528 | ) | (11,387 | ) | ||||||
Equity
participation in net losses of unconsolidated investees
|
- | (77 | ) | (362 | ) | |||||||
Amortization
of goodwill
|
(2,215 | ) | (2,252 | ) | (2,229 | ) | ||||||
Work
disruption expenses
|
(1,256 | ) | (844 | ) | (2,534 | ) | ||||||
Amortization
of intangibles
|
(403 | ) | (413 | ) | - | |||||||
Site
closure provision
|
(1,189 | ) | - | - | ||||||||
Allowance
for materials, spare parts, and supplies
|
(4,500 | ) | (4,925 | ) | (2,685 | ) | ||||||
Allowance
for doubtful accounts
|
- | - | (129 | ) | ||||||||
Non-recoverable
taxes
|
(424 | ) | (669 | ) | (508 | ) | ||||||
Suppliers’
compensations services
|
(237 | ) | (1,575 | ) | - | |||||||
Training
and donations
|
(2,152 | ) | (520 | ) | - | |||||||
Provision
for legal expenses and litigations
|
(975 | ) | (523 | ) | (1,010 | ) | ||||||
Expenses
related to energy tariff adjustments
|
- | (2,066 | ) | (2,500 | ) | |||||||
Other
expenses
|
(1,730 | ) | (2,691 | ) | (2,141 | ) | ||||||
Total
|
(59,896 | ) | (53,032 | ) | (55,341 | ) |
(Charge) to income for the year ended
December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
ThUS$
|
ThUS$
|
ThUS$
|
||||||||||
Inventories
|
- | 1,450 | (40 | ) | ||||||||
Property,
plant and equipment
|
44 | 517 | 142 | |||||||||
Other
assets
|
707 | 558 | 184 | |||||||||
Other
liabilities
|
- | 119 | - | |||||||||
Shareholders’
equity
|
(602 | ) | (7,016 | ) | (1,734 | ) | ||||||
Subtotal
price-level restatement
|
149 | (4,372 | ) | (1,448 | ) | |||||||
Net
adjustment of assets and liabilities denominated in UF
|
- | (484 | ) | 141 | ||||||||
Net
price-level restatement
|
149 | (4,856 | ) | (1,307 | ) |
As of December 31,
|
||||||||
2008
|
2007
|
|||||||
Assets
|
ThUS$
|
ThUS$
|
||||||
Chilean
pesos
|
105,280 | 198,254 | ||||||
US
dollars
|
2,307,684 | 1,637,379 | ||||||
Euros
|
76,679 | 44,809 | ||||||
Japanese
Yen
|
1,404 | 971 | ||||||
Brazilian
Real
|
195 | 400 | ||||||
Mexican
pesos
|
3,525 | 1,705 | ||||||
UF
|
27,586 | 73,354 | ||||||
South
African Rand
|
12,298 | 9,366 | ||||||
Dirhams
|
15,744 | 10,942 | ||||||
Other
currencies
|
16,820 | 9,139 | ||||||
Current
liabilities
|
||||||||
Chilean
pesos
|
121,664 | 98,456 | ||||||
US
dollars
|
295,843 | 63,415 | ||||||
Euros
|
12,052 | 13,079 | ||||||
Japanese
Yen
|
77 | 92 | ||||||
Brazilian
Real
|
1,562 | 1,681 | ||||||
Mexican
pesos
|
934 | 4,605 | ||||||
UF
|
10,830 | 8,599 | ||||||
South
African Rand
|
714 | 1,020 | ||||||
Dirhams
|
391 | 930 | ||||||
Other
currencies
|
1,839 | 545 | ||||||
Long-term
liabilities
|
||||||||
Chilean
pesos
|
18,640 | 20,196 | ||||||
US
dollars
|
505,448 | 437,687 | ||||||
Japanese
Yen
|
294 | 187 | ||||||
UF
|
86,337 | 107,382 | ||||||
Other
currencies
|
10 | 10 | ||||||
Mexican
Pesos
|
403 | - |
For the year ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Description
|
ThUS$
|
ThUS$
|
ThUS$
|
|||||||||
Adjustment
of provision included in other financial income
|
(2,656 | ) | (229 | ) | (238 | ) | ||||||
Discounts
obtained from suppliers
|
(815 | ) | (458 | ) | (690 | ) | ||||||
Reversal
of the provision for damages caused by heavy rains
|
- | - | (1,000 | ) | ||||||||
Other
minor credits to income not representing cash flows
|
(1,508 | ) | (1,058 | ) | (834 | ) | ||||||
Total
|
(4,979 | ) | (1,745 | ) | (2,762 | ) |
For the year ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Description
|
ThUS$
|
ThUS$
|
ThUS$
|
|||||||||
Provision
for Corfo royalty payments
|
5,256 | 3,643 | 2,358 | |||||||||
Deferred
income taxes benefit for tax loss
|
(39,493 | ) | 10,174 | 8,500 | ||||||||
Provision
for marketing expenses
|
4,584 | 4,317 | 4,364 | |||||||||
Provision
for employee incentive plans
|
28,208 | 13,495 | 3,160 | |||||||||
Adjustment
of provision for severance indemnities
|
9,234 | 4,736 | 3,882 | |||||||||
Provision
for income taxes
|
147,694 | 38,218 | 28,204 | |||||||||
Adjustment
of provision for vacation
|
6,975 | 8,300 | 5,333 | |||||||||
Non-capitalizable
exploration project expense and provisions for damages and liquidation
assets
|
13,158 | 8,806 | 11,825 | |||||||||
Accrued
expenses related to energy tariff adjustments
|
- | 4,023 | 4,500 | |||||||||
Amortization
of prepaid insurance expenses
|
9,313 | 7,553 | 3,189 | |||||||||
Remuneration
of Board of Directors
|
5,000 | 1,820 | 1,800 | |||||||||
Provision
for mine closure
|
1,190 | - | 1,000 | |||||||||
Adjustment
and other expenses of inventories
|
3,545 | - | 1,297 | |||||||||
Other
charges to income not representing cash flows
|
11,322 | 2,990 | 2,921 | |||||||||
Total
|
205,986 | 108,075 | 82,333 |
1.
|
Plaintiff
|
:
Compañía de Salitre y Yodo Soledad S.A.
|
||
Defendant
|
:
Sociedad Química y Minera de Chile S.A.
|
|||
Date
of lawsuit
|
:
December 1994
|
|||
Court
|
:
Civil Court of Pozo Almonte
|
|||
Cause
|
:
Partial annulment of mining property, Cesard 1 to 29
|
|||
Instance
|
:
Evidence provided
|
|||
Nominal
amount
|
:
ThUS$ 211
|
|||
2.
|
Plaintiff
|
:
Compañía Productora de Yodo y Sales S.A.
|
||
Defendant
|
:
SQM S.A.
|
|||
Date
of lawsuit
|
:
November 1999
|
|||
Court
|
:
Civil Court of Pozo Almonte
|
|||
Cause
|
:
Partial annulment of mining property, Paz II 1 to 25
|
|||
Instance
|
:
Evidence provided
|
|||
Nominal
amount
|
:
ThUS$ 162
|
|||
3.
|
Plaintiff
|
:
Compañía Productora de Yodo y Sales S.A.
|
||
Defendant
|
:
SQM S.A.
|
|||
Date
of lawsuit
|
:
November 1999
|
|||
Court
|
:
Civil Court of Pozo Almonte
|
|||
Cause
|
:
Partial annulment of mining property, Paz III 1 to 25
|
|||
Instance
|
:
Evidence provided
|
|||
Nominal
amount
|
:
ThUS$ 204
|
|||
4.
|
Plaintiff
|
:
Marina Arnéz Valencia
|
||
Defendant
|
:
SQM S.A. and its insurance companies
|
|||
Date
of lawsuit
|
:
May 2006
|
|||
Court
|
:
2nd
Civil Court of Santiago
|
|||
Cause
|
:
Work accident
|
|||
Instance
|
:
Conciliation audience
|
|||
Nominal
amount
|
:
ThUS$ 500
|
|||
5.
|
Plaintiff
|
:
Angélica Allende and their sons Iván Molina and
Cristóbal
|
||
|
Molina
|
|||
Defendant
|
:
Ingeniería, Construcción y Servicios SMR Limitada and
jointly
|
|||
|
and severally SQM Nitratos S.A. and its insurance
companies
|
|||
Date
of lawsuit
|
:
May 2008
|
|||
Court
|
:
Arbitration Court of Antofagasta
|
|||
Cause
|
:
Work accident
|
|||
Instance
|
:
Evidence
|
|||
|
Nominal
amount
|
|
:
ThUS$ 670
|
6.
|
Plaintiff
|
:
Nancy Erika Urra Muñoz
|
||
Defendant
|
:
Fresia Flores Zamorano, Duratec-Vinilit S.A. and SQM S.A.
and
|
|||
|
its insurance companies
|
|||
Date
of lawsuit
|
:
December 2008
|
|||
Court
|
:
1st
Civil Court of Santiago
|
|||
Cause
|
:
Work accident
|
|||
Instance
|
:
Response provided
|
|||
|
Nominal
amount
|
|
:
ThUS$ 550
|
Debtor
|
Balances outstanding
|
|||||||||||
Beneficiary
|
Name
|
Relationship
|
2008
|
2007
|
||||||||
ThUS$
|
ThUS$
|
|||||||||||
BBVA
Banco Bilbao Vizcaya Argentaria
|
Royal
Seed Trading Corp. A.V.V.
|
Subsidiary
|
100,204 | 100,433 | ||||||||
ING
Capital LLC
|
Royal
Seed Trading Corp. A.V.V.
|
Subsidiary
|
80,215 | 80,368 | ||||||||
Export
Development Canada
|
SQM
Investment Corporation N.V.
|
Subsidiary
|
50,032 | - |
Company Name
|
ThUS$
|
|||
Llanos
y Wammes Soc. Com. Ltda.
|
1,571 | |||
Fertglobal
Chile Ltda. y Bramelli
|
786 | |||
Tattersall
S.A.
|
904 |
2008
|
2007
|
2006
|
||||||||||
ThUS$
|
ThUS$
|
ThUS$
|
||||||||||
Project
|
||||||||||||
Environmental
department
|
1,022 | 1,040 | 748 | |||||||||
Improvements
in María Elena Camp – streets
|
435 | 436 | 296 | |||||||||
Dust
emission control
|
- | 76 | 823 | |||||||||
Light
normalization
|
- | 921 | 919 | |||||||||
Environmental
studies – Region I of Chile project
|
- | - | 605 | |||||||||
María
Elena environmental studies
|
- | 1,007 | 870 | |||||||||
Normalization
of lighting at FFCC yard, PV Mill
|
- | 164 | 123 | |||||||||
Equipment
washing system
|
- | - | 184 | |||||||||
The
Environment MOP/SOP 2
|
- | 294 | 142 | |||||||||
Construction
of facilities for workers
|
168 | 292 | 279 | |||||||||
Atacama
salt deposit hydrological model
|
- | - | 176 | |||||||||
Environmental
commitments in Region I of Chile
|
- | 169 | 152 | |||||||||
Waste
pools R&R Lithium C. Plant
|
- | 2,073 | - | |||||||||
Salar
(Salt deposit) environmental follow-up plan
|
- | 2,272 | - | |||||||||
Handling
of household and industrial waste
|
736 | 917 | 25 | |||||||||
Environmental
evaluation
|
1,251 | 194 | 21 | |||||||||
Elimination
of PCB equipment
|
- | - | 304 | |||||||||
Handling
of dangerous substances
|
579 | - | - | |||||||||
Salar
(salt deposit) environmental follow-up plan
|
3,045 | - | - | |||||||||
PV
environmental improvements
|
555 | - | - | |||||||||
Waste
pools R&R lithium plant
|
2,150 | - | - | |||||||||
Others
|
94 | 325 | 1,175 | |||||||||
Total
|
10,035 | 10,180 | 6,842 |
I.
|
Differences
in measurement methods
|
a)
|
Revaluation
of property, plant and equipment
|
b)
|
Deferred
income taxes
|
c)
|
Translation
of foreign currency financial statements and price-level
restatement
|
(i)
|
Balance
sheet accounts:
|
|
·
|
Monetary
assets and liabilities are translated at the year-end exchange rate;
and
|
|
·
|
Non-monetary
assets and liabilities and shareholders' equity are translated at
historical exchange rates.
|
c)
|
Translation
of foreign currency financial statements and price-level restatement
(continued)
|
(ii)
|
Income
statement accounts:
|
|
·
|
Depreciation
and amortization expense and other accounts derived from non-monetary
assets and liabilities are translated at historical rates;
and
|
|
·
|
All
other accounts are translated at monthly-average exchange rates, which
approximate the actual rates of exchange at the date the transactions
occurred.
|
d)
|
Minimum
dividend
|
e)
|
Loans
to employees
|
f)
|
Staff
severance indemnities
|
g)
|
Derivatives
and hedging
|
g)
|
Derivatives
and hedging (continued)
|
h)
|
Business
combinations and goodwill
|
i)
|
Negative
goodwill
|
i-1:
|
The
reversal of negative goodwill amortization recorded under Chilean
GAAP;
|
i-2:
|
The
effects of reducing depreciation expense, due to the allocation of the
excess purchase price to property, plant and
equipment.
|
j)
|
Capitalized
interest
|
k)
|
Minority
interest
|
l)
|
Effects
of conforming to US GAAP
|
For the years ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
ThUS$
|
ThUS$
|
ThUS$
|
||||||||||
Net
income in accordance with Chilean GAAP
|
501,407 | 180,021 | 141,277 | |||||||||
Revaluation
of property, plant and equipment (paragraph a)
|
2,298 | 4,288 | 4,174 | |||||||||
Deferred
income taxes (paragraph b)
|
2,118 | 5,483 | 4,021 | |||||||||
Translation
of foreign currency financial statements (paragraph c)
|
5,457 | 9,507 | (576 | ) | ||||||||
Staff
severance indemnities (paragraph f)
|
408 | (1,406 | ) | (484 | ) | |||||||
Derivatives
(paragraph g)
|
(11,600 | ) | (4,821 | ) | 4,432 | |||||||
Goodwill
(paragraph h)
|
2,215 | 2,252 | 1,950 | |||||||||
Negative
goodwill (paragraph i)
|
||||||||||||
i-1:
Reversal of negative goodwill amortization
|
- | - | (68 | ) | ||||||||
i-2:
Depreciation of property, plant and equipment
|
113 | 113 | 113 | |||||||||
Capitalized
interest (paragraph j)
|
(1,278 | ) | (91 | ) | (91 | ) | ||||||
Minority
interest (paragraph k)
|
(2,346 | ) | (3,752 | ) | 172 | |||||||
Deferred
income tax effect of the above US GAAP adjustments (paragraph
b)
|
2,120 | 1,074 | (656 | ) | ||||||||
Net
income under US GAAP
|
500,912 | 192,668 | 154,264 | |||||||||
Other
comprehensive income (loss), net of tax:
|
||||||||||||
Minimum
pension liability adjustment
|
(2,827 | ) | (141 | ) | - | |||||||
Translation
adjustment
|
(786 | ) | 356 | (24 | ) | |||||||
Total
comprehensive income under US GAAP
|
497,299 | 192,883 | 154,240 |
l)
|
Effects
of conforming to US GAAP
(continued)
|
As of December 31,
|
||||||||
2008
|
2007
|
|||||||
ThUS$
|
ThUS$
|
|||||||
Shareholders’
equity in accordance with Chilean GAAP
|
1,463,108 | 1,182,436 | ||||||
Revaluation
of property, plant and equipment: (paragraph a)
|
||||||||
a-1:
Property, plant and equipment
|
(133,309 | ) | (133,309 | ) | ||||
a-2:
Accumulated depreciation
|
110,029 | 107,731 | ||||||
Deferred
income taxes (paragraph b)
|
(15,026 | ) | (17,144 | ) | ||||
Translation
of foreign currency financial statements (paragraph c)
|
||||||||
c-1:
Property, plant and equipment
|
391 | (3,745 | ) | |||||
c-2:
Accumulated depreciation
|
- | 1,797 | ||||||
c-3:
Inventory
|
- | (3,035 | ) | |||||
c-4:
Goodwill, net
|
(182 | ) | (302 | ) | ||||
c-5:
Other assets
|
(103 | ) | (103 | ) | ||||
Minimum
dividend (paragraph d)
|
(50,422 | ) | (54,006 | ) | ||||
Employer
loans used to purchase shares (paragraph e)
|
(116 | ) | (127 | ) | ||||
Staff
severance indemnities (paragraph f)
|
(6,407 | ) | (6,816 | ) | ||||
Derivatives
(paragraph g)
|
(11,989 | ) | (389 | ) | ||||
Goodwill
(paragraph h)
|
10,230 | 8,015 | ||||||
Negative
goodwill: (paragraph i)
|
||||||||
i-1:
Property, plant and equipment
|
(4,435 | ) | (4,447 | ) | ||||
i-1:
Accumulated depreciation of property, plant and equipment
|
2,136 | 2,023 | ||||||
i-2:
Negative goodwill
|
4,435 | 4,447 | ||||||
i-2:
Accumulated amortization of negative goodwill
|
(3,156 | ) | (3,156 | ) | ||||
Capitalized
interest (paragraph j)
|
||||||||
j-1:
Property, plant and equipment
|
- | 1,643 | ||||||
j-2:
Amortization of capitalized interest
|
- | (365 | ) | |||||
Effect
of minority interest on US GAAP adjustments (paragraph k)
|
(310 | ) | 1,966 | |||||
Deferred
income tax effect of the above US GAAP adjustments (paragraph
b)
|
3,128 | 1,007 | ||||||
Shareholders'
equity in accordance with US GAAP
|
1,368,002 | 1,084,121 |
l)
|
Effects
of conforming to US GAAP, continued
|
ThUS$
|
||||
Balance
at January 1, 2006
|
923,442 | |||
Reversal
of accrued minimum dividend at December 31, 2005
|
34,053 | |||
Distribution
of final 2005 dividend
|
(73,647 | ) | ||
Accrued
minimum dividend at December 31, 2006
|
(42,383 | ) | ||
Employer
loans used to purchase shares
|
35 | |||
Other
comprehensive income
|
(1,242 | ) | ||
Net
income for the year
|
154,264 | |||
Balance
at December 31, 2006
|
994,522 | |||
Reversal
of accrued minimum dividend at December 31, 2006
|
42,383 | |||
Distribution
of final 2006 dividend
|
(91,787 | ) | ||
Accrued
minimum dividend at December 31, 2007
|
(54,006 | ) | ||
Employer
loans used to purchase shares
|
126 | |||
Other
comprehensive income
|
215 | |||
Net
income for the year
|
192,668 | |||
Balance
at December 31, 2007
|
1,084,121 | |||
Reversal
of accrued minimum dividend at December 31, 2007
|
54,006 | |||
Distribution
of final 2007 dividend
|
(117,014 | ) | ||
Distribution
of 2008 interim dividend
|
(100,000 | ) | ||
Accrued
minimum dividend at December 31, 2008
|
(50,422 | ) | ||
Employer
loans used to purchase shares
|
12 | |||
Other
comprehensive loss
|
(3,613 | ) | ||
Net
income for the year
|
500,912 | |||
Balance
at December 31, 2008
|
1,368,002 |
II.
|
Additional
Disclosure Requirements
|
a)
|
Earnings
per share
|
2008
|
2007
|
2006
|
||||||||||
(Expressed in US dollars)
|
||||||||||||
Basic
and diluted earnings per share under Chilean GAAP
|
1.91 | 0.68 | 0.54 | |||||||||
Basic
and diluted earnings per share under US GAAP
|
1.90 | 0.73 | 0.59 | |||||||||
Dividends
declared per share (1)
|
1.24 | 0.44 | 0.35 | |||||||||
Weighted
average number of common shares outstanding (thousands)
|
263,197 | 263,197 | 263,197 |
b)
|
Income
taxes
|
2008
|
2007
|
2006
|
||||||||||
ThUS$
|
ThUS$
|
ThUS$
|
||||||||||
Consolidated
pretax income under US GAAP
|
610,462 | 242,247 | 193,358 | |||||||||
Statutory
tax rate
|
17 | % | 17 | % | 17 | % | ||||||
Theoretical
tax at statutory rate
|
103,779 | 41,182 | 32,871 | |||||||||
Non-deductible
items
|
9,853 | (1,433 | ) | 5,853 | ||||||||
Difference
in tax rates in foreign jurisdictions
|
3,310 | 105 | 247 | |||||||||
Valuation
allowance
|
(13,230 | ) | 2,182 | (4,420 | ) | |||||||
Total
income tax under US GAAP
|
103,712 | 42,036 | 34,551 |
b)
|
Income
taxes (continued)
|
2008
|
2007
|
|||||||
ThUS$
|
ThUS$
|
|||||||
Deferred
Tax Assets
|
||||||||
Allowance
for doubtful debts
|
1,927 | 1,940 | ||||||
Vacation
accrual
|
1,734 | 1,872 | ||||||
Unrealized
gains on sales of products
|
76,633 | 17,521 | ||||||
Provision
for obsolescence
|
3,940 | 3,779 | ||||||
Tax
loss carryforwards (1)
|
4,362 | 25,883 | ||||||
Write-downs
of inventory, net realizable value s
|
10,362 | - | ||||||
Fair
value acquisition adjustments
|
3,153 | 2,119 | ||||||
Other
|
14,867 | 9,238 | ||||||
Gross
deferred tax assets
|
116,978 | 62,352 | ||||||
Valuation
allowance
|
(25,499 | ) | (38,217 | ) | ||||
Total
deferred tax assets
|
91,479 | 24,135 | ||||||
Deferred
Tax Liabilities
|
||||||||
Production
expenses
|
(29,775 | ) | (20,535 | ) | ||||
Accelerated
depreciation of PP&E
|
(72,193 | ) | (62,190 | ) | ||||
Staff
severance indemnities
|
(846 | ) | (574 | ) | ||||
Exploration
expenses
|
(4,702 | ) | (4,327 | ) | ||||
Capitalized
interest
|
(9,252 | ) | (8,601 | ) | ||||
Gain
from derivative transactions
|
- | (2,478 | ) | |||||
Other
|
(7,781 | ) | (1,679 | ) | ||||
Total
deferred tax liabilities
|
(124,549 | ) | (100,384 | ) |
(1)
|
The
Company’s tax loss carryforwards were primarily generated from losses
incurred in Chile. In accordance with current laws, in Chile
tax losses may be carried forward indefinitely. In other countries tax
losses usually expire. For the years ended December 31, 2008,
2007 and 2006 the Company realized benefits from the use of tax loss carry
forwards amounting to ThUS$ 22,373, ThUS$ 6,477 and ThUS$ 9,037,
respectively.
|
2008
|
2007
|
|||||||
ThUS$
|
ThUS$
|
|||||||
Chile
|
1,558 | 22,625 | ||||||
Other
countries
|
2,804 | 3,258 | ||||||
Total
|
4,362 | 25,883 |
b)
|
Income
taxes (continued)
|
2008
|
2007
|
|||||||
ThUS$
|
ThUS$
|
|||||||
Short-term
|
36,418 | (6,148 | ) | |||||
Long-term
|
(69,488 | ) | (70,101 | ) | ||||
Net
deferred tax liabilities
|
(33,070 | ) | (76,249 | ) |
2008
|
2007
|
2006
|
||||||||||
ThUS$
|
ThUS$
|
ThUS$
|
||||||||||
Income
tax expense under Chilean GAAP
|
107,951 | 48,592 | 37,916 | |||||||||
Additional
deferred taxes under US GAAP
|
(2,128 | ) | (1,048 | ) | 656 | |||||||
Reversal
of complementary accounts
|
(2,111 | ) | (5,508 | ) | (4,021 | ) | ||||||
Total
tax provision US GAAP
|
103,712 | 42,036 | 34,551 |
2008
|
2007
|
2006
|
||||||||||
ThUS$
|
ThUS$
|
ThUS$
|
||||||||||
Chile
|
605,491 | 246,251 | 215,036 | |||||||||
Foreign
|
4,971 | (4,004 | ) | (21,678 | ) | |||||||
Total
|
610,462 | 242,247 | 193,358 |
2008
|
2007
|
2006
|
||||||||||||||||||||||||||||||||||
Deferred
|
Current
|
Total
|
Deferred
|
Current
|
Total
|
Deferred
|
Current
|
Total
|
||||||||||||||||||||||||||||
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
||||||||||||||||||||||||||||
Chile
|
(40,565 | ) | 145,969 | 105,404 | 3,554 | 36,010 | 39,564 | 9,469 | 22,263 | 31,732 | ||||||||||||||||||||||||||
Foreign
|
(3,416 | ) | 1,724 | (1,692 | ) | 264 | 2,208 | 2,472 | 285 | 2,534 | 2,819 | |||||||||||||||||||||||||
Total
|
(43,981 | ) | 147,693 | 103,712 | 3,818 | 38,218 | 42,036 | 9,754 | 24,797 | 34,551 |
c)
|
Other
comprehensive income
|
Year ended December 31, 2006
|
||||||||||||
Before-tax
amount
|
Tax (expense)
or benefit
|
Net-of-tax
amount
|
||||||||||
ThUS$
|
ThUS$
|
ThUS$
|
||||||||||
Beginning
balance
|
- | - | - | |||||||||
Translation
adjustment
|
(24 | ) | - | (24 | ) | |||||||
Minimum
pension liability adjustment
|
(1,218 | ) | - | (1,218 | ) | |||||||
Net
change
|
(1,242 | ) | - | (1,242 | ) | |||||||
Ending
balance
|
(1,242 | ) | - | (1,242 | ) |
Year ended December 31, 2007
|
||||||||||||
Before-tax
amount
|
Tax (expense)
or benefit
|
Net-of-tax
amount
|
||||||||||
ThUS$
|
ThUS$
|
ThUS$
|
||||||||||
Beginning
balance
|
(1,242 | ) | - | (1,242 | ) | |||||||
Translation
adjustment
|
356 | - | 356 | |||||||||
Minimum
pension liability adjustment
|
(141 | ) | - | (141 | ) | |||||||
Net
change
|
215 | - | 215 | |||||||||
Ending
balance
|
(1,027 | ) | - | (1,027 | ) |
Year ended December 31, 2008
|
||||||||||||
Before-tax
amount
|
Tax
(expense)
or
benefit
|
Net-of-tax
amount
|
||||||||||
ThUS$
|
ThUS$
|
ThUS$
|
||||||||||
Beginning
balance
|
(1,027 | ) | - | (1,027 | ) | |||||||
Translation
adjustment
|
(786 | ) | - | (786 | ) | |||||||
Minimum
pension liability adjustment
|
(2,827 | ) | - | (2,827 | ) | |||||||
Net
change
|
(3,613 | ) | - | (3,613 | ) | |||||||
Ending
balance
|
(4,640 | ) | - | (4,640 | ) |
d)
|
Credit
agreements
|
e)
|
Lease
commitments
|
Minimum
|
||||
lease
|
||||
payments
|
||||
Year
ended December 31,
|
ThUS$
|
|||
2009
|
268 | |||
2010
|
268 | |||
2011
|
157 | |||
Total
future minimum lease payments
|
693 | |||
Interest
|
(70 | ) | ||
Present
value of net minimum lease payments
|
623 |
e)
|
Lease
commitments (continued)
|
Minimum
|
||||
annual
|
||||
rentals
|
||||
Year
ended December 31,
|
ThUS$
|
|||
2009
|
13,365 | |||
2010
|
13,365 | |||
2011
|
13,365 | |||
2012
|
13,365 | |||
2013
|
13,365 | |||
Thereafter
|
227,203 | |||
Total
|
294,028 |
f)
|
Concentration
of credit risk
|
g)
|
Foreign
exchange gains and losses
|
h)
|
Advertising
and research and development costs
|
i)
|
Business
combinations and goodwill
|
ThUS$
|
||||
Balance
at 31, 2006
|
40,249 | |||
Translation
adjustment
|
86 | |||
Balance
at December 31, 2007
|
40,335 | |||
Balance
at December 31, 2008
|
40,335 |
j)
|
Reclassification
differences between Chilean GAAP and US
GAAP
|
|
(i)
|
Non-operating
income and expense under US GAAP calculated in accordance with Chilean
GAAP
|
2008
|
2007
|
2006
|
||||||||||
ThUS$
|
ThUS$
|
ThUS$
|
||||||||||
Non-operating
income under Chilean GAAP
|
40,590 | 25,948 | 19,293 | |||||||||
Less:
|
||||||||||||
Sale
of mining concessions
|
721 | 399 | 1,252 | |||||||||
Sale
of material and services
|
156 | 369 | 75 | |||||||||
Insurance
recoveries
|
581 | 275 | 307 | |||||||||
Write-off
of liabilities
|
2,623 | 335 | 238 | |||||||||
Payment
discount obtained from suppliers
|
815 | 458 | 690 | |||||||||
Rental
of property, plant and equipment
|
1,092 | 958 | 1,023 | |||||||||
Compensation
obtained from third parties
|
146 | 524 | 1 | |||||||||
Gain
on sale of investment (Agricolima S.A. de C.V.)
|
1,387 | - | - | |||||||||
Gain
on sale of assets of SQM Lithium
|
2,342 | - | - | |||||||||
Other
income
|
1,106 | 2,013 | 1,251 | |||||||||
Non-operating
income as classified under US GAAP, but calculated in accordance with
Chilean GAAP
|
29,621 | 20,617 | 14,456 | |||||||||
Non-operating
expenses under Chilean GAAP
|
59,896 | 53,032 | 55,341 | |||||||||
Less:
|
||||||||||||
Sales
of material and services
|
- | 630 | ||||||||||
Work
disruption expenses
|
2,445 | 844 | 1,534 | |||||||||
Increase
in allowance for doubtful debts
|
30 | - | 129 | |||||||||
Non-capitalizable
exploration project expenses
|
8,961 | 16,528 | 12,087 | |||||||||
Non-recoverable
taxes
|
582 | 669 | 542 | |||||||||
Provision
for legal expenses and litigations
|
975 | 523 | 1,010 | |||||||||
Allowances
for materials, spare parts and supplies
|
4,732 | 4,925 | 2,055 | |||||||||
Consulting
services
|
84 | - | 281 | |||||||||
Donations
|
2,152 | - | 458 | |||||||||
Suppliers’
compensations
|
237 | 1,575 | - | |||||||||
Accrued
expenses related to energy tariff adjustments
|
- | 2,066 | 2,500 | |||||||||
Other
expenses
|
1,629 | 3,624 | 1,668 | |||||||||
Non-operating
expense as classified under US GAAP, but calculated in accordance with
Chilean GAAP
|
38,069 | 22,278 | 32,447 |
j)
|
Reclassification
differences between Chilean GAAP and US GAAP
(continued)
|
(ii)
|
Condensed
financial statements under US GAAP
|
As of December 31,
|
||||||||
b)
|
2008
|
2007
|
||||||
|
ThUS$
|
ThUS$
|
||||||
Assets
|
||||||||
Current
assets
|
1,340,723 | 900,593 | ||||||
Property,
plant and equipment
|
1,894,557 | 1,655,970 | ||||||
Accumulated
depreciation
|
(802,306 | ) | (701,582 | ) | ||||
Property
plant and equipment, net
|
1,092,251 | 954,388 | ||||||
Goodwill
|
40,335 | 40,335 | ||||||
Other
assets
|
75,781 | 64,301 | ||||||
Total
assets
|
2,549,090 | 1,959,617 | ||||||
Liabilities
and shareholders’ equity
|
||||||||
Current
liabilities
|
505,644 | 246,163 | ||||||
Long-term
liabilities
|
628,065 | 585,300 | ||||||
Minority
interest
|
47.379 | 44,033 | ||||||
Shareholders’
equity
|
1,368,002 | 1,084,121 | ||||||
Total
liabilities and shareholders’ equity
|
2,549,090 | 1,959,617 |
j)
|
Reclassification
differences between Chilean GAAP and US GAAP
(continued)
|
For the years ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
ThUS$
|
ThUS$
|
ThUS$
|
||||||||||
Operating
income
|
||||||||||||
Sales
|
1,774,119 | 1,187,527 | 1,042,886 | |||||||||
Cost
of sales
|
(1,065,370 | ) | (880,272 | ) | (767,679 | ) | ||||||
Gross
margin
|
708,749 | 307,255 | 275,207 | |||||||||
Selling
and administrative expense
|
(85,709 | ) | (70,273 | ) | (69,662 | ) | ||||||
Operating
income
|
623,040 | 236,982 | 205,545 | |||||||||
Non-operating
income (expense), net
|
(26,936 | ) | 1,699 | (14,139 | ) | |||||||
Income
taxes
|
(103,712 | ) | (42,036 | ) | (34,551 | ) | ||||||
Minority
interest
|
(5,838 | ) | (7,544 | ) | (4,543 | ) | ||||||
Equity
participation in income of related companies, net
|
14,358 | 3,567 | 1,952 | |||||||||
Net
income
|
500,912 | 192,668 | 154,264 | |||||||||
Other
comprehensive income (loss), net of taxes:
|
||||||||||||
Minimum
pension liability adjustment
|
(2,827 | ) | (141 | ) | - | |||||||
Translation
adjustment
|
(786 | ) | 356 | (24 | ) | |||||||
Total
comprehensive income under US GAAP
|
497,299 | 192,883 | 154,240 |
k)
|
Industry
segment and geographic area
information
|
(i)
|
Sales
by product type and by geographic area for the years ended December 31,
2008, 2007 and 2006
|
Year ended December 31, 2008
|
Chile
|
Latin
America and
Caribbean (1)
|
Europe
|
North
America
|
Asia
and other
|
Eliminations
|
Total
|
|||||||||||||||||||||
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
||||||||||||||||||||||
Total
revenues:
|
||||||||||||||||||||||||||||
Specialty
plant nutrition
|
268,107 | 256,569 | 426, 497 | 341,392 | 234,284 | (547,927 | ) | 978,687 | ||||||||||||||||||||
Iodine
and derivatives
|
176,107 | 7,400 | 150,810 | 199,371 | 92,051 | (378,832 | ) | 246,904 | ||||||||||||||||||||
Lithium
and derivatives
|
581 | 1,982 | 121,957 | 62,238 | 85,597 | (100,016 | ) | 172,342 | ||||||||||||||||||||
Industrial
chemicals
|
8,011 | 35,415 | 107,040 | 135,658 | 47,699 | (210,204 | ) | 123,619 | ||||||||||||||||||||
Potassium
chloride
|
223,901 | 30,465 | 5,090 | 546 | 33,561 | (153,565 | ) | 139,998 | ||||||||||||||||||||
Other
commodity fertilizers (2)
|
485,983 | 1,032 | 402 | 1,442 | 114 | (376,640 | ) | 112,333 | ||||||||||||||||||||
Total
|
1,162,690 | 332,863 | 811,796 | 740,647 | 493,306 | (1,767,184 | ) | 1,774,119 | ||||||||||||||||||||
Transfers
between geographic areas:
|
||||||||||||||||||||||||||||
Specialty
plant nutrition
|
81,293 | 27,529 | 197,416 | 156,481 | 85,208 | (547,927 | ) | - | ||||||||||||||||||||
Iodine
and derivatives
|
174,630 | 43 | 70,366 | 100,340 | 33,453 | (378,832 | ) | - | ||||||||||||||||||||
Lithium
and derivatives
|
- | - | 41,067 | 30,269 | 28,680 | (100,016 | ) | - | ||||||||||||||||||||
Industrial
chemicals
|
2,921 | 7,521 | 72,942 | 94,973 | 31,847 | (210,204 | ) | - | ||||||||||||||||||||
Potassium
Chloride
|
148,921 | - | - | - | 4,644 | (153,565 | ) | - | ||||||||||||||||||||
Others
commodity fertilizers (2)
|
376,640 | - | - | - | - | (376,640 | ) | - | ||||||||||||||||||||
Total
|
784,405 | 35,093 | 381,791 | 382,063 | 183,832 | (1,767,184 | ) | - | ||||||||||||||||||||
Sales
to unaffiliated customers:
|
||||||||||||||||||||||||||||
Specialty
plant nutrition
|
186,814 | 229,040 | 228,846 | 184,911 | 149,076 | - | 978,687 | |||||||||||||||||||||
Iodine
and derivatives
|
1,477 | 7,357 | 80,441 | 99,031 | 58,598 | - | 246,904 | |||||||||||||||||||||
Lithium
and derivatives
|
581 | 1,982 | 80,893 | 31,969 | 56,917 | - | 172.342 | |||||||||||||||||||||
Industrial
chemicals
|
5,090 | 27,894 | 34,098 | 40,685 | 15,852 | - | 123,619 | |||||||||||||||||||||
Potassium
Chloride
|
74,980 | 30,465 | 5,090 | 546 | 28,917 | - | 139,998 | |||||||||||||||||||||
Others
commodity fertilizers (2)
|
109,343 | 1,032 | 402 | 1,442 | 114 | - | 112,333 | |||||||||||||||||||||
Total
|
378,285 | 297,770 | 430,005 | 358,584 | 309,474 | - | 1,774,119 |
|
(i)
|
Sales
by product type and by geographic area for the years ended December 31,
2008, 2007 and 2006 (continued)
|
Year ended December 31,
2007
|
Chile
|
Latin
America and
Caribbean (1)
|
Europe
|
North
America
|
Asia
and other
|
Eliminations
|
Total
|
|||||||||||||||||||||
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
||||||||||||||||||||||
Total
revenues:
|
||||||||||||||||||||||||||||
Specialty
plant nutrition
|
157,148 | 127,274 | 240,982 | 192,830 | 84,509 | (221,982 | ) | 580,761 | ||||||||||||||||||||
Iodine
and derivatives
|
167,189 | 7,584 | 144,977 | 157,530 | 63,353 | (325,530 | ) | 215,103 | ||||||||||||||||||||
Lithium
and derivatives
|
631 | 2,621 | 152,993 | 66,708 | 72,651 | (115,814 | ) | 179,790 | ||||||||||||||||||||
Industrial
chemicals
|
3,027 | 14,695 | 95,282 | 88,266 | 19,801 | (139,881 | ) | 81,190 | ||||||||||||||||||||
Potassium
chloride
|
104,807 | 12,811 | 7,621 | 198 | 10,718 | (84,889 | ) | 51,266 | ||||||||||||||||||||
Other
commodity fertilizers (2)
|
214,481 | 910 | 1,316 | 3,447 | 1,831 | (142,568 | ) | 79,417 | ||||||||||||||||||||
Total
|
647,283 | 165,895 | 643,171 | 508,979 | 252,863 | (1,030,664 | ) | 1,187,527 | ||||||||||||||||||||
Transfers
between geographic areas:
|
||||||||||||||||||||||||||||
Specialty
plant nutrition
|
33,102 | 13,174 | 95,014 | 62,424 | 18,268 | (221,982 | ) | - | ||||||||||||||||||||
Iodine
and derivatives
|
166,244 | - | 59,011 | 78,736 | 21,539 | (325,530 | ) | - | ||||||||||||||||||||
Lithium
and derivatives
|
260 | - | 69,409 | 28,228 | 17,917 | (115,814 | ) | - | ||||||||||||||||||||
Industrial
chemicals
|
1,322 | 2,776 | 58,897 | 61,298 | 15,588 | (139,881 | ) | - | ||||||||||||||||||||
Potassium
chloride
|
74,789 | 2,598 | - | 30 | 7,472 | (84,889 | ) | - | ||||||||||||||||||||
Other
commodity fertilizers (2)
|
138,680 | - | - | 2,284 | 1,604 | (142,568 | ) | - | ||||||||||||||||||||
Total
|
414,397 | 18,284 | 282,331 | 233,000 | 82,388 | (1,030,664 | ) | - | ||||||||||||||||||||
Sales
to unaffiliated customers:
|
||||||||||||||||||||||||||||
Specialty
plant nutrition
|
124,046 | 114,100 | 145,968 | 130,406 | 66,241 | - | 580,761 | |||||||||||||||||||||
Iodine
and derivatives
|
945 | 7,584 | 85,966 | 78,794 | 41,814 | - | 215,103 | |||||||||||||||||||||
Lithium
and derivatives
|
371 | 2,621 | 83,584 | 38,480 | 54,734 | - | 179,790 | |||||||||||||||||||||
Industrial
Chemicals
|
1,705 | 11,919 | 36,385 | 26,968 | 4,213 | - | 81,190 | |||||||||||||||||||||
Potassium
chloride
|
30,018 | 10,213 | 7,621 | 168 | 3,246 | - | 51,266 | |||||||||||||||||||||
Other
commodity fertilizers (2)
|
75,801 | 910 | 1,316 | 1,163 | 227 | - | 79,417 | |||||||||||||||||||||
Total
|
232,886 | 147,347 | 360,840 | 275,979 | 170,475 | - | 1,187,527 |
|
(i)
|
Sales
by product type and by geographic area for the years ended December 31,
2008, 2007 and 2006 (continued)
|
Year ended December 31,
2006
|
Chile
|
Latin America
and
Caribbean (1)
|
Europe
|
North
America
|
Asia
and other
|
Eliminations
|
Total
|
|||||||||||||||||||||
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
||||||||||||||||||||||
Total
revenues:
|
||||||||||||||||||||||||||||
Specialty
plant nutrition
|
114,144 | 114,838 | 203,172 | 201,906 | 78,545 | (209,762 | ) | 502,843 | ||||||||||||||||||||
Iodine
and derivatives
|
165,814 | 6,965 | 159,783 | 155,992 | 68,651 | (339,468 | ) | 217,737 | ||||||||||||||||||||
Lithium
and derivatives
|
46 | 1,422 | 95,342 | 49,651 | 83,786 | (101,359 | ) | 128,888 | ||||||||||||||||||||
Industrial
chemicals
|
3,675 | 12,795 | 57,361 | 83,616 | 11,555 | (97,718 | ) | 71,284 | ||||||||||||||||||||
Potassium
chloride
|
83,013 | 8,327 | 6,150 | 3,252 | 7,686 | (76,351 | ) | 32,077 | ||||||||||||||||||||
Other
commodity fertilizers (2)
|
218,372 | 1,025 | 3,536 | 66,207 | 469 | (199,552 | ) | 90,057 | ||||||||||||||||||||
Total
|
585,064 | 145,372 | 525,344 | 560,624 | 250,692 | (1,024,210 | ) | 1,042,886 | ||||||||||||||||||||
Transfers
between geographic areas:
|
||||||||||||||||||||||||||||
Specialty
plant nutrition
|
25,902 | 11,487 | 68,784 | 70,757 | 32,832 | (209,762 | ) | - | ||||||||||||||||||||
Iodine
and derivatives
|
163,943 | - | 66,927 | 74,934 | 33,664 | (339,468 | ) | - | ||||||||||||||||||||
Lithium
and derivatives
|
- | 8 | 39,339 | 17,771 | 44,241 | (101,359 | ) | - | ||||||||||||||||||||
Industrial
chemicals
|
1,206 | 3,144 | 29,623 | 52,584 | 11,161 | (97,718 | ) | - | ||||||||||||||||||||
Potassium
chloride
|
64,395 | 2,192 | - | 2,078 | 7,686 | (76,351 | ) | - | ||||||||||||||||||||
Other
commodity fertilizers (2)
|
164,798 | - | - | 34,285 | 469 | (199,552 | ) | - | ||||||||||||||||||||
Total
|
420,244 | 16,831 | 204,673 | 252,409 | 130,053 | (1,024,210 | ) | - | ||||||||||||||||||||
Sales
to unaffiliated customers:
|
||||||||||||||||||||||||||||
Specialty
plant nutrition
|
88,242 | 103,351 | 134,388 | 131,149 | 45,713 | - | 502,843 | |||||||||||||||||||||
Iodine
and derivatives
|
1,871 | 6,965 | 92,856 | 81,058 | 34,987 | - | 217,737 | |||||||||||||||||||||
Lithium
and derivatives
|
46 | 1,414 | 56,003 | 31,880 | 39,545 | - | 128,888 | |||||||||||||||||||||
Industrial
chemicals
|
2,469 | 9,651 | 27,738 | 31,032 | 394 | - | 71,284 | |||||||||||||||||||||
Potassium
chloride
|
18,618 | 6,135 | 6,150 | 1,174 | - | - | 32,077 | |||||||||||||||||||||
Other
commodity fertilizers (2)
|
53,574 | 1,025 | 3,536 | 31,922 | - | - | 90,057 | |||||||||||||||||||||
Total
|
164,820 | 128,541 | 320,671 | 308,215 | 120,639 | - | 1,042,886 |
(ii)
|
Other
segment information as of and for the years ended December 31, 2008, 2007
and 2006:
|
As of and for the year ended
December 31, 2008
|
Chile
|
Latin
America
and
Caribbean
|
Europe
|
North
America
|
Asia
and other
|
Eliminations
|
Total
|
|||||||||||||||||||||
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
||||||||||||||||||||||
Production
facilities (1):
|
||||||||||||||||||||||||||||
Pedro
de Valdivia
|
69,096 | - | - | - | - | - | 69,096 | |||||||||||||||||||||
María
Elena
|
177,416 | - | - | - | - | - | 177,416 | |||||||||||||||||||||
Coya
Sur
|
146,203 | - | - | - | - | - | 146,203 | |||||||||||||||||||||
Pampa
Blanca
|
7,037 | - | - | - | - | - | 7,037 | |||||||||||||||||||||
Nueva
Victoria
|
115,845 | - | - | - | - | - | 115,845 | |||||||||||||||||||||
Salar
de Atacama
|
342,458 | - | - | - | - | - | 342,458 | |||||||||||||||||||||
Salar
del Carmen
|
100,909 | - | - | - | - | - | 100,909 | |||||||||||||||||||||
Others
|
2,907 | - | - | - | 5,529 | (1,480 | ) | 6,956 | ||||||||||||||||||||
Sub-total
production facilities
|
961,871 | - | - | - | 5,529 | (1,480 | ) | 965,920 | ||||||||||||||||||||
Port
facility (1)
|
46,188 | - | - | - | - | - | 46,188 | |||||||||||||||||||||
Other
property, plant and equipment
|
91,099 | - | - | - | - | 7,839 | 98,938 | |||||||||||||||||||||
Assets
of commercial locations
|
6,262 | 1,236 | 2,772 | 2,557 | 743 | (894 | ) | 12,676 | ||||||||||||||||||||
Investments
in related companies
|
1,489,439 | 31,754 | 44,850 | 35,491 | - | (1,564,583 | ) | 36,951 | ||||||||||||||||||||
Goodwill
|
22,100 | 86 | 9,715 | - | - | - | 31,901 | |||||||||||||||||||||
Other
non-current assets (2)
|
254,635 | - | 6 | 105 | - | (219,519 | ) | 35,227 | ||||||||||||||||||||
Total
long-lived assets
|
2,871,594 | 33,076 | 57,343 | 38,153 | 6,272 | (1,778,637 | ) | 1,227,801 | ||||||||||||||||||||
Expenditures
on long-lived assets
|
302,915 | 60 | 484 | 547 | 84 | - | 304,090 | |||||||||||||||||||||
Export
by region
|
- | 273,152 | 6,607 | 5,630 | 171,594 | - | 456,983 |
(1)
|
The
Company’s principal production facilities are located near its mines and
extraction facilities in northern Chile. The following table sets forth
the principal production facilities as of December 31, 2008, 2007 and
2006:
|
Location:
|
Products:
|
||
Pedro
de Valdivia
|
Nitrate
and iodine production
|
||
María
Elena
|
Nitrate
and iodine production
|
||
Coya
Sur
|
Nitrate
and iodine production
|
||
Pampa
Blanca
|
Concentrated
nitrate salts and iodine production
|
||
Nueva
Victoria
|
Iodine
production
|
||
Salar
de Atacama
|
Potassium
chloride, lithium chloride, potassium sulfate and boric
acid
|
||
Salar
del Carmen
|
Lithium
carbonate and lithium hydroxide production
|
||
Tocopilla
|
Port
facilitiy
|
(2)
|
In
all tables in the segment disclosure this category includes principally
assets that may not be assigned to production facilities and investments
held by holding entities within the
group.
|
(ii)
|
Other
segment information as of and for the years ended December 31, 2008, 2007
and 2006:
|
As of and for the year ended
December 31, 2007
|
Chile
|
Latin
America
and
Caribbean
|
Europe
|
North
America
|
Asia
and other
|
Eliminations
|
Total
|
|||||||||||||||||||||
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
||||||||||||||||||||||
Production
facilities (1):
|
||||||||||||||||||||||||||||
Pedro
de Valdivia
|
74,036 | - | - | - | - | - | 74,036 | |||||||||||||||||||||
María
Elena
|
156,484 | - | - | - | - | - | 156,484 | |||||||||||||||||||||
Coya
Sur
|
106,771 | - | - | - | - | - | 106,771 | |||||||||||||||||||||
Pampa
Blanca
|
4,069 | - | - | - | - | - | 4,069 | |||||||||||||||||||||
Nueva
Victoria
|
104,758 | - | - | - | - | - | 104,758 | |||||||||||||||||||||
Salar
de Atacama
|
250,577 | - | - | - | - | - | 250,577 | |||||||||||||||||||||
Salar
del Carmen
|
43,997 | - | - | - | - | - | 43,997 | |||||||||||||||||||||
Others
|
6,822 | - | - | 21,440 | 5,970 | (4,865 | ) | 29,367 | ||||||||||||||||||||
Sub-total
production facilities
|
747,514 | - | - | 21,440 | 5,970 | (4,865 | ) | 770,059 | ||||||||||||||||||||
Port
facility (1)
|
39,038 | - | - | - | - | - | 39,038 | |||||||||||||||||||||
Other
property, plant and equipment
|
155,065 | - | - | - | - | 7,839 | 162,904 | |||||||||||||||||||||
Assets
of commercial locations
|
7,615 | 1,450 | 2,813 | 2,867 | 566 | (1,174 | ) | 14,137 | ||||||||||||||||||||
Investments
in related companies
|
1,221,498 | 15,659 | 24,035 | 36,450 | - | (1,273,707 | ) | 23,935 | ||||||||||||||||||||
Goodwill
|
23,844 | 108 | 10,284 | - | - | - | 34,236 | |||||||||||||||||||||
Other
non-current assets (2)
|
353,743 | - | 6 | 1,675 | - | (317,369 | ) | 38,055 | ||||||||||||||||||||
Total
long-lived assets
|
2,548,317 | 17,217 | 37,138 | 62,432 | 6,536 | (1,589,276 | ) | 1,082,364 | ||||||||||||||||||||
Expenditures
on long-lived assets
|
175,910 | 57 | 205 | 1,838 | 18 | - | 178,028 | |||||||||||||||||||||
Export
by region
|
- | 139,242 | 241,097 | 217,116 | 189,897 | - | 787,352 |
(ii)
|
Other
segment information as of and for the years ended December 31, 2008, 2007
and 2006:
|
As of and for the year ended
December 31, 2006
|
Chile
|
Latin
America
and
Caribbean
|
Europe
|
North
America
|
Asia
and other
|
Eliminations
|
Total
|
|||||||||||||||||||||
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
||||||||||||||||||||||
Production
facilities:
|
||||||||||||||||||||||||||||
Pedro
de Valdivia
|
75,280 | - | - | - | - | - | 75,280 | |||||||||||||||||||||
María
Elena
|
147,080 | - | - | - | - | - | 147,080 | |||||||||||||||||||||
Coya
Sur
|
93,320 | - | - | - | - | - | 93,320 | |||||||||||||||||||||
Pampa
Blanca
|
3,410 | - | - | - | - | - | 3,410 | |||||||||||||||||||||
Nueva
Victoria
|
112,880 | - | - | - | - | - | 112,880 | |||||||||||||||||||||
Salar
de Atacama
|
239,640 | - | - | - | - | - | 239,640 | |||||||||||||||||||||
Salar
del Carmen
|
48,110 | - | - | - | - | - | 48,110 | |||||||||||||||||||||
Others
|
4,169 | - | - | 23,035 | 6,707 | - | 33,911 | |||||||||||||||||||||
Sub-total
production facilities
|
723,889 | - | - | 23,035 | 6,707 | - | 753,631 | |||||||||||||||||||||
Port
facility
|
21,692 | - | - | - | - | - | 21,692 | |||||||||||||||||||||
Other
property, plant and equipment
|
130,250 | - | - | - | - | - | 130,250 | |||||||||||||||||||||
Assets
of commercial locations
|
6,614 | 64,282 | 3,115 | 2,413 | 555 | (62,627 | ) | 14,352 | ||||||||||||||||||||
Investments
in related companies
|
835,915 | 15,603 | 18,962 | 48,202 | - | (900,353 | ) | 18,329 | ||||||||||||||||||||
Goodwill
|
25,348 | 131 | 10,852 | - | - | - | 36,331 | |||||||||||||||||||||
Other
non-current assets
|
876,655 | - | 53,669 | 1,751 | (881,333 | ) | 50,742 | |||||||||||||||||||||
Total
long-lived assets
|
2,620,363 | 80,016 | 86,598 | 75,401 | 7,262 | (1,844,313 | ) | 1,025,327 | ||||||||||||||||||||
Expenditures
on long-lived assets
|
284,639 | 90 | 14,083 | 802 | 318 | - | 299,932 | |||||||||||||||||||||
Export
by region
|
- | 122,394 | 183,873 | 187,781 | 133,016 | - | 627,064 |
-
|
The
data excludes non-financial assets and liabilities, such as property,
plant and equipment, and goodwill.
|
-
|
While
the data represents management’s best estimates, the data is subjective
and involves significant estimates regarding current economic and market
conditions and risk
characteristics,
|
-
|
Cash
and time deposits approximate fair value because of the short-term
maturity of these instruments.
|
-
|
Current
liabilities that are contracted at variable interest rates are considered
to have a fair value equal to book
value.
|
-
|
For
interest-bearing liabilities with an original contractual maturity of
greater than one year, the fair values are calculated by discounting
contractual cash flows at current market origination rates with similar
terms.
|
-
|
For
forward contracts and swap agreements, fair value is determined using
quoted market prices of financial instruments with similar
characteristics.
|
As of December 31,
|
||||||||||||||||
2008
|
2007
|
|||||||||||||||
US GAAP
Carrying
Amount
|
Estimated
Fair Value
|
US GAAP
Carrying
Amount
|
Estimated
Fair Value
|
|||||||||||||
ThUS$
|
ThUS$
|
ThUS$
|
ThUS$
|
|||||||||||||
Assets:
|
||||||||||||||||
Cash
and cash equivalents
|
303,799 | 303,799 | 164,212 | 164,212 | ||||||||||||
Short-term
accounts receivable
|
385,695 | 385,695 | 291,607 | 291,607 | ||||||||||||
Long-term
accounts receivable
|
2,766 | 2,766 | 2,604 | 2,604 | ||||||||||||
Derivative
instruments
|
1,723 | 1,723 | 14,968 | 14,968 | ||||||||||||
Liabilities:
|
||||||||||||||||
Short-term
bank debt
|
133,355 | 133,355 | 1,807 | 1,807 | ||||||||||||
Short-term
notes and accounts payable
|
110,298 | 110,298 | 107,730 | 107,730 | ||||||||||||
Derivative
instruments
|
18,189 | 18,189 | 499 | 499 | ||||||||||||
Current
and long-term portions of long-term bank debt
|
522,651 | 601,662 | 494,451 | 493,510 | ||||||||||||
Long-term
other accounts payable
|
397 | 397 | 730 | 730 |
Fair
Value Measurements at Reporting Date Using
|
||||||||||||
ThUS$
|
||||||||||||
|
Level 1
|
Level 2
|
Level 3
|
|||||||||
Assets
|
||||||||||||
Swap
|
- | - | - | |||||||||
Forwards
|
- | 498 | - | |||||||||
Options
|
- | 1,225 | - | |||||||||
Total
Assets
|
- | 1,723 | - | |||||||||
Liabilities
|
||||||||||||
Swap
|
- | 11,031 | - | |||||||||
Forwards
|
- | 5,029 | - | |||||||||
Options
|
- | 2,129 | - | |||||||||
Total
Liabilities
|
- | 18,189 | - |
2008
|
2007
|
|||||||
Weighted-average
discount rate
|
6.5 | % | 6.5 | % | ||||
Rate
of increase in compensation levels
|
0.0 | % | 0.0 | % | ||||
Long-term
rate of return on plan assets
|
7.5 | % | 8.5 | % |
2008
|
2007
|
2006
|
||||||||||
ThUS$
|
ThUS$
|
ThUS$
|
||||||||||
Change
in benefit obligation:
|
||||||||||||
Benefit
obligation at beginning of year
|
6,245 | 5,696 | 5,184 | |||||||||
Service
cost
|
1 | 1 | 17 | |||||||||
Interest
cost
|
398 | 391 | 381 | |||||||||
Actuarial
loss
|
255 | 405 | 359 | |||||||||
Benefits
paid
|
(268 | ) | (248 | ) | (245 | ) | ||||||
Benefit
obligation at end of the year
|
6,631 | 6,245 | 5,696 | |||||||||
Change
in plan assets:
|
||||||||||||
Fair
value of plan assets at beginning of year
|
6,141 | 5,621 | 5,223 | |||||||||
Employer
contributions
|
34 | 69 | 18 | |||||||||
Actual
return (loss) on plan assets
|
(2,149 | ) | 699 | 625 | ||||||||
Benefits
paid
|
(268 | ) | (248 | ) | (245 | ) | ||||||
Fair
value of plan assets at end of year
|
3,758 | 6,141 | 5,621 | |||||||||
Funded
status
|
(2,873 | ) | (104 | ) | (75 | ) | ||||||
Items
not yet recognized as components of net periodic pension
costs:
|
||||||||||||
Net
actuarial loss at the beginning of the period
|
(1,359 | ) | (1,218 | ) | (1,094 | ) | ||||||
Amortization
during the period
|
37 | 35 | 44 | |||||||||
Estimated
net gain loss occurring during the period
|
(2,864 | ) | (176 | ) | (168 | ) | ||||||
Adjustment
to recognize minimum pension liability
|
(4,186 | ) | (1,359 | ) | (1,218 | ) | ||||||
Accrued
pension (liability)/ prepaid pension cost
|
(2,873 | ) | (104 | ) | (75 | ) |
2008
|
2007
|
2006
|
||||||||||
ThUS$
|
ThUS$
|
ThUS$
|
||||||||||
Service
cost or benefits earned during the period
|
1 | 1 | 17 | |||||||||
Interest
cost on benefit obligation
|
398 | 391 | 381 | |||||||||
Actual
return on plan assets
|
2,149 | (699 | ) | (625 | ) | |||||||
Amortization
of loss from prior periods
|
38 | 35 | 44 | |||||||||
Net
gain during the period
|
(2,610 | ) | 229 | 192 | ||||||||
Net
periodic pension expense
|
(24 | ) | (43 | ) | 9 |
2008
|
2007
|
|||||||
Growth
securities
|
48 | % | 55 | % | ||||
International
securities
|
25 | % | 22 | % | ||||
Growth
& income securities
|
- | 12 | % | |||||
Taxable
bond
|
20 | % | - | |||||
Treasury
securities
|
4 | % | 9 | % | ||||
Money
market funds
|
3 | % | 2 | % | ||||
Total
|
100 | % | 100 | % |
ThUS$
|
||||
2009
|
335 | |||
2010
|
363 | |||
2011
|
392 | |||
2012
|
418 | |||
2013
|
453 | |||
Years
2014-2018
|
2,786 |