Operating earnings in the salt segment were $47.9 million compared to $53.4 million in the prior-year quarter primarily due to reduced deicing sales and the effect of lower sales volumes on per-unit product costs, partially offset by lower estimated losses from the effects of the 2011 tornado in Goderich, Ontario. Excluding tornado-related losses from both years, the company estimates that salt segment operating earnings in the 2012 quarter would have been approximately $51.0 million compared to $69.8 million in the 2011 period.
The company estimates that tornado-related losses totaled approximately $21.4 million for the full 2012 year and $16.4 million in 2011. The company does not expect to report any material estimated losses related to the effects of the tornado in 2013.
| Salt Segment Performance
(in millions except for sales volumes and prices per short ton)
| Three months ended
| Twelve months ended
|Sales less shipping and handling (product sales)||$||152.5||$||177.1||$||491.5||$||616.8|
|Sales volumes (in thousands of tons):|
|Consumer and industrial||585||675||2,095||2,285|
|Average sales price (per ton):|
|Consumer and industrial||$||150.95||$||156.97||$||144.87||$||153.12|
Winter Weather Effect
Weather in the fourth quarter of 2012 was very mild in Compass Minerals’ North American service area until the final two weeks of the quarter, and the company estimates this milder-than-average weather reduced the company’s fourth-quarter salt sales by $60 million to $70 million and its salt operating earnings by $15 million to $20 million. Variations from average winter weather reduced full-year salt sales by an estimated $145 million to $155 million and salt operating earnings by $45 million to $50 million.
Estimated Effect of Weather on Salt Segment Performance (in millions)
| Three months ended
Favorable (unfavorable) to average weather:
|($60) to ($70)||($55) to ($65)||($145) to ($155)||($55) to ($65)|
|($15) to ($20)||($15) to ($20)||($45) to ($50)||($15) to ($20)|
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