Slide 1: Ingredients for Growth May 2014
Ingredients for Growth May 2014
Slide 2: Safe Harbor
This presentation contains forward-looking statements — that is, statements about future, not past, events. These forward-looking statements often relate to our future performance and management’s expectations for the future, including statements about our financial outlook. Our forward-looking stat
Slide 3: Intrepid Overview: Building on Our History of Value Creation
Built to be pure-play potassium product company Creating value through modernization of assets and new facilities Applying innovative technology Leader in low cost solar solution mining Geographically advantaged to key markets Committed to returning to profitability and generating free cash flow Ach
Slide 4: Intrepid's Unique Position
Intrepid’s Unique Position Participating in industry with strong fundamentals Geographically advantaged assets Value enhancing logistics strategy Serving diverse customers and markets Leveraging solar solution mining expertise Benefitting from a prudent capital structure Highest average net realized
Slide 5: Net realized price advantage drives strong cash margins
Intrepid generates strong cash margins through its net realized price advantage + 34% Note: Average net realized sales price per ton is a non-GAAP financial measure calculated as gross sales less freight costs, divided by the number of tons sold in the period. Average net realized sales price advant
Slide 6: Industry With Strong Fundamentals: Demand Remains Solid
Favorable farmer economics Annual U.S. potash consumption relatively consistent for decades Nutrients in the soil need to be replenished Balanced fertilization key to maximizing yields Demand in markets we serve is 5 times our production level Industry With Strong Fundamentals Demand Remains Solid 6
Slide 7: Strategically Positioned, Serving Diverse Customers and Markets
Strategically Positioned, Serving Diverse Customers and Markets Maximizing Sales and Margin Marketing strategy geared at maximizing margins Diverse end markets and customer base Trio® expands customer base End Market Product Size 2012 2013 Q1 2014 Agricultural Granular 81% 71% 77% Industrial Standar
Slide 8: Leveraging Solar Solution Mining Expertise
Leveraging Solar Solution Mining Expertise Intrepid is Leader in Solar Solution Mining Inject brine into idled mine works Allow brine to circulate to dissolve the remaining potash Extract potash enriched brine and pump into solar evaporation pond Low per ton cash operating cost Creative use of idled
Slide 9: HB Drives Cash Margin Opportunity
Leveraging Solar Solution Mining Expertise HB Drives Cash Margin Opportunity Expected cash margin per ton from HB approximately double Combined cash operating costs improve 9% Potential to grow cash margin faster than production growth 9 Note: Calculation assumes cash operating cost per ton for Curr
Slide 10: Balance Sheet Strength and Optimal Capital Structure
Cash and investments totaling $10 million at March 31 As of March 31, $157 million available under existing unsecured credit facility. Availability of facility adjusts based on financial covenant results $150 million in unsecured long-term debt outstanding, with average interest rate of less than 4%
Slide 11: Targeted Capital Investment Program to Achieve Greatest Returns
OBJECTIVE Respond to changing demand to pursue highest margin sales Ability to compact 100% of potash production PROJECTS North compaction Trio® pellet plant OBJECTIVE Increase production PROJECTS HB Solar Solution mine Moab solution mining caverns West plant improvements GROWTH OBJECTIVE Lower per
Slide 12: HB Solar – Production Growth at Significantly Lower Cash Operating Costs
Targeted Capital Investment Program to Achieve Greatest Returns HB Solar – Production Growth at Significantly Lower Cash Operating Costs HB Solar Solution Mine Key Facts Capital investment of $240-$245 million Cash operating costs approximately $80-$100 per ton at full production, making HB one of t
Slide 13: Expand Moab Solar Solution Mining
Targeted Capital Investment Program to Achieve Greatest Returns Expand Moab Solar Solution Mining, Incremental Tons at Lower Cash Operating Costs Build on Successful Operations Expand solution mining footprint Cavern 1 began producing in 2002, expanded in 2012 Cavern 2 began producing in 2013 Cavern
Slide 14: North Compaction Key to Marketing and Production Flexibility
Targeted Capital Investment Program to Achieve Greatest Returns North Compaction Key to Marketing and Production Flexibility Completed Upgrade of North Compaction Facility Creating high quality granulated potash Flexibility to produce and sell the highest margin product North is able to compact 100%
Slide 15: Why Intrepid?
Why Intrepid? Highest North American average net realized sales price over time and strong cash margin per ton Geographically advantaged assets and a logistics strategy to serve diversified markets and customer base Focused on growth, flexibility, and margin expansion Producing incremental low cost
Slide 16: Appendix
Appendix ® Supplying a Growing America® Appendix
Slide 17: Intrepid's Locations
Wendover Solar Evaporation Mine Moab Solar Solution Mine Mine Carlsbad Assets including: West North East HB Solar Solution Mine Amax/ Horizon (potential Solar Solution development) Florida New Mexico Texas Oklahoma Kansas Nebraska South Dakota Montana Wyoming Colorado Utah Idaho Arizona Nevada Washi
Slide 18: HB Production Ramp Cycle
HB Production Ramp Cycle 18 First production following summer 2013 evaporation season Summer 2014 Winter 2015 Summer 2015 Winter 2016 Fall 2015 Fall 2014 Winter 2014 Fall 2013 Second evaporation season with full ponds for full year Second harvest and production begin following 2014 evaporation seaso
Slide 19: 2014 Outlook as of April 30, 2014
2014 Outlook as of April 30, 2014 19 Note: Total COGS does not include any lower of cost or market adjustment. In periods when the market prices for our products fall below our cost to produce them and the lower prices are not expected to be temporary, a lower of cost or market adjustment may be req
Slide 20: Financial Overview
Financial Overview Adjusted EBITDA* (in millions) Balance Sheet as of March 31, 2014 Net Income (Loss) (in millions) Diluted Earnings (Loss) Per Share Cash and Investments $ 10 million Current Assets $ 169 million Total Assets $1,159 million Debt Outstanding $ 150 million Total Liabilities $ 225 mil
Slide 21: Non-GAAP Reconciliations
Non-GAAP Reconciliations To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use several non-GAAP financial measures to monitor and evaluate our performance. These non-GAAP financial measures may include adjusted EBITDA, adjusted net inco
Slide 22: Calculation of Adjusted EBITDA
Non-GAAP Reconciliation Calculation of Adjusted EBITDA (in thousands) Adjusted earnings before interest, taxes, depreciation, and amortization (or adjusted EBITDA) is a non-GAAP financial measure that is calculated as net income or loss adjusted for the reversal of the allowance associated with the
Slide 23: Net sales and average net realized sales price
Non-GAAP Reconciliation Net sales, average net realized sales price, and average net realized sales price advantage are non-GAAP financial measures. Net sales are calculated as sales less freight costs. Average net realized sales price is calculated as net sales, divided by the number of tons sold i
Slide 24: Cash operating costs reconciliation
Non-GAAP Reconciliation Cash operating costs is a non-GAAP financial measure that is calculated as total of cost of goods sold divided by the number of tons sold in the period and then adjusted to exclude per-ton depreciation, depletion, and royalties. Total cost of goods sold is reported net of by-
Slide 25: Intrepid Has Invested Nearly $1 Billion Since Inception
Intrepid Has Invested Nearly $1 Billion Since Inception For Growth and to Lower Per Ton Costs Major Capital Project Milestones Facility Completion West Recovery Carlsbad, NM – West 2014E HB Solar Solution Mine Carlsbad, NM – HB 2013/2014 North Compaction Project Carlsbad, NM – North 2013/2014 Horizo
Slide 26: Historical Quarterly Production and Sales
Historical Quarterly Production and Sales 26 Note: One short ton equals 2,000 pounds. One metric tonne, which many international competitors use, equals 1,000 kilograms or 2,204.62 pounds. In thousands of shorttons Production Volume 2012 2013 2014 Q1 Q2 Q3 Q1 Q2 Q3 Q4 Q4 Q1 Potash 218 170 189 218 22
Slide 27: U.S. Potash Consumption Remains Steady and Robust
U.S. Potash Consumption Remains Steady and Robust 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 fertilizer cons
Slide 28: Global Industry Susceptible to Production Interruption and Supply Shocks
Global Industry Susceptible to Production Interruption and 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-
Slide 29: Population Growth Continues to Drive Grain and Potash Demand
Fundamentals of Increasing Population Continue to Drive Grain and Ultimately Potash Demand Over the Long Term 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 and A
Slide 30: Investor Relations Contact
For more information visit our website at www.intrepidpotash.com Investor Relations Contact: Gary Kohn Phone 303.996.3024 Email: gary.kohn@intrepidpotash.com