Intrepid Potash, Inc · NYSE:IPI
Intrepid Potash — Investor Presentation (September 2013)
26 slides from Intrepid Potash's investor presentation, Sep 11, 2013
Slide 1: Supplying a Growing America
I POTASH ‘Supplying a Growing America® September 2013
Slide 2: Cautionary Statements Regarding Forward Looking Information
Cautionary Statements Regarding Forward Looking Information 2 Certain statements in this presentation, and other written or oral statements made by or on behalf of us, are “forward-looking statements” within the meaning of the federal securities laws. Statements regarding future events and developme
Slide 3: Company Overview
Company Overview The largest U.S. producer of potash Only western-world producer created and dedicated solely to potassium- related products Supplies ~ 1.6% of global demand and ~ 9.3% of U.S. demand One of only two global producers of the specialty product, sulfate of potash magnesia or langbeinite
Slide 4: Intrepid's Unique Position
4 Intrepid’s Unique Position Participating in a market with favorable demand trends Over the long term, earning the highest average net realized sales price and cash margin per ton by utilizing our geographic advantage and marketing strategy and by serving diverse customers and markets Increasing ou
Slide 5: Current Potash Market – Demand Fundamentals Remain Solid
Farmer economics are supportive of a positive demand environment Annual U.S. potash consumption has been fairly constant for decades Farmers likely to replenish the nutrients drawn down during growing season Balanced fertilization is necessary to achieve maximum yields We serve approximately 9% of t
Slide 6: Geographically Advantaged, Serving Diversified Markets and Customer Base
Geographically Advantaged, Serving Diversified Markets and Customer Base with Flexible Product Mix Production facilities located in the heart of the markets we serve Trio® markets further diversify crops and customers Industrial market primarily consists of oil and gas drillers Potash used as a nutr
Slide 7: Average Net Realized Sales Price Advantage
Average Net Realized Sales Price Advantage 7 Notes: Average net realized sales price is an operating performance measure calculated as gross sales less freight costs, divided by the number of tons sold in the period. Average net realized sales price advantage is an operating performance measure calc
Slide 8: Average Cash Margin Advantage
Average Cash Margin Advantage 8 (1) Cash Margin Advantage Note: Average cash margin advantage is calculated as average per ton net realized sales price advantage less warehousing and handling, royalties, and Cash COGS (calculated using the combined estimated average net realized sales prices and ave
Slide 9: Improving Cash Margin Opportunity Through HB
Improving Cash Margin Opportunity Through HB Cash operating costs set to improve as HB Solar Solution mine production ramps up HB cash operating costs projected to be less than $80 a ton on 150,000 to 200,000 annual tons in 2015 Benefit of incremental, lower-cost HB tons will begin with expected pro
Slide 10: HB Drives Cash Contribution Opportunity
HB Drives Cash Contribution Opportunity 10 Expected cash margin per ton from HB approximately double compared to current state Potential to grow cash margin faster than production growth Trio® adds nearly $161 of cash margin per ton Note: Calculation assumes midrange of 2013 guidance as of July 31,
Slide 11: Strong Capital Structure
Strong Capital Structure Cash and investment totaling $129 million at June 30 Cash on hand to fund completion of major capital projects Full availability under recently extended unsecured $250 million credit facility $150 million in unsecured long-term debt with average interest rate of less than 4%
Slide 12: Capital Projects Are Focused on Growth, Flexibility & Margin
Capital Projects Are Focused on Growth, Flexibility & Margin 12 Reduced Per Ton Cash Costs Growth HB Solar Solution Mine Langbeinite Recovery Improvement Project Expansion and creation of new Moab horizontal potash caverns Langbeinite dense media separation plant Modernization of plants Increase Wes
Slide 13: HB Solar Solution Mine – Driving Production Growth at Significantly Lower Cash Costs
Project is nearly complete, ponds are full and mill construction underway Capital investment of $225-$245 million Cash production cost per ton estimated to be below $80 per ton at full production, making HB one of the lowest cost potash mines in North America Anticipated production timeline: First p
Slide 14: Expand Moab Solar Solution Mining – Incremental Production at Low Cost
Expand Moab Solar Solution Mining – Incremental Production at Low Cost Expand solution mining footprint Cavern 1 began producing in 2002 and was expanded in 2012 Cavern 2 was constructed in 2012 and began producing in 2013 Cavern 3 is being drilled in 2013 with the benefit expected in late 2014 Exce
Slide 15: Additional Granulation Capacity Is Key to Marketing and Production Flexibility
Increases capacity and improves quality Flexibility to place the highest margin product into market Capacity to handle all of the new production from HB Solar Solution mine and increased production from our West mine Total capital investment is expected to be approximately $90 to $95 million, with $
Slide 16: Summary
16 Summary Only Western-World potash pure-play Highest average net realized sales price and cash margin per ton in North American Geographically advantaged assets serving diversified markets and customer base Focused on growth, flexibility, and margin expansion through the application of technology
Slide 17: Appendix
Appendix ® Supplying a Growing America®
Slide 18: Financial Overview
Financial Overview 18 Adjusted EBITDA* (in millions) Balance Sheet as of June 30, 2013 * These are financial measurements not calculated based on U.S. Generally Accepted Accounting Principles (Non-GAAP). Non-GAAP reconciliations available in the appendix to this presentation. Adjusted Net Income* (i
Slide 19: Non-GAAP Reconciliation
Non-GAAP Reconciliation Calculation of Adjusted EBITDA (in thousands) 19 Adjusted earnings before interest, taxes, depreciation, and amortization (or adjusted EBITDA) is a non-GAAP financial measure that is calculated as net income adjusted for the add back of interest expense (including derivatives
Slide 20: Adjusted Net Income Reconciliation
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Net Income $28,279 $30,708 $25,507 $24,917 $20,626 $19,013 $33,267 $14,537 $14,919 $11,317 Adjustments Insurance settlements from property and business losses (12,500) - - - - - - - - - Income associated with New Mexico refundable employment-related credit* - (4,692) (3
Slide 21: Investing to Increase Production and Significantly Lower Costs
Investing to Increase Production and Significantly Lower Costs 21 Intrepid has invested $750 million since inception underscoring our commitment to growth Major Capital Project Milestones Facility Year Completed / Estimated Completion HB Solar Solution Mine Carlsbad, NM – HB 2013E North Compaction P
Slide 22: Historical Quarterly Production and Sales Summary
Historical Quarterly Production and Sales Summary 22 Jun. 30, Sep. 30, Dec. 31, Mar. 31, Jun. 30, Sep. 30, Dec. 31, Mar. 31, Jun. 30, Sep. 30, Dec. 31, Mar. 31, Jun. 30, Potash 165 166 224 234 209 173 197 218 170 189 218 222 182 Trio® 39 32 31 31 44 35 31 30 33 35 34 46 50 Potash 129 221 216 196 225
Slide 23: United States Potash Consumption Remains Steady and Robust
United States Potash Consumption Remains Steady and Robust 23 Sources : Fertecon, United States Department of Agriculture (USDA), NOAA National Climatic Data Center. Potash consumption is shown in fertilizer years (July – June). Grains stocks include barley, corn, oats, sorghum and wheat. Potash fer
Slide 24: Global Industry Susceptible to Production Interruptions & Supply Shocks
Depleted Conventional Mines Mines Currently With Less than 15 Years Reserve Life Theodore, Amelie, Marie Louis mines- France Pasquasi and San Cataldo mines - Italy Salzdetfurth, Friedrichshall, Bergmannssegen-Hugo, Siegfried-Giesen, and Niedersachen-Riedel - Germany Trona, California Horizon-Amax, W
Slide 25: Fundamentals of Increasing Population Continue to Drive Grain and Potash Demand
Fundamentals of Increasing Population Continue to Drive Grain and Ultimately Potash Demand Over the Long Term 25 Note: Grains include corn, wheat, barley, oats and sorghum. Stocks-to-use ratio is ending inventory / consumption for that crop year; data updated monthly. Sources: United Nations Food an
Slide 26: Intrepid Potash, Inc.
Intrepid Potash, Inc. 707 17th Street, Suite 4200 Denver, CO 80202 Visit our website at: www.intrepidpotash.com Investor relations contact: Gary Kohn Phone: 303.996.3024 Email: gary.kohn@intrepidpotash.com
Intrepid Potash — Investor Presentation (September 2013) on 6ix