Slide 1: Ingredients for Growth September 2014
Ingredients for Growth September 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
Intrepid Overview Building on Our History of Value Creation 3 Optimizing new and upgraded assets Created opportunity to increase per ton margin and cash flow Creating a stronger Intrepid Completed multi-year modernization program Expanding low cost solar solution mining Close-to-market strategy
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 Sales Price Advantage
Intrepid generates strong cash margins through its net realized price advantage 1st Half + 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 pri
Slide 6: Industry With Strong Fundamentals
Tight granular inventory Logistic challenges Commodity prices Farmer mitigation tools Insurance programs Strong balance sheets Annual U.S. potash consumption relatively consistent for decades Balanced fertilization key to maximizing yields Industry With Strong Fundamentals Market Conditions 6 Stable
Slide 7: Strategically Positioned, Serving Diverse Customers and Markets
Strategically Positioned, Serving Diverse Customers and Markets Maximizing Sales and Margin Marketing strategy geared towards maximizing margins Close-to-the-market Diverse end markets and customer base Trio® expands customer base End Market Product Size 2012 2013 1st Half 2014 Agricultural Granular
Slide 8: Leveraging Solar Solution Mining Expertise
Leveraging Solar Solution Mining Expertise Intrepid is a Leader in Solar Solution Mining Inject brine into idled or created 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
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 $35 million $141 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% Capital investments in 2014
Slide 11: Recent Capital Investments Designed 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 Solution Mine
Targeted Capital Investment Program to Achieve Greatest Returns HB Solar Solution Mine 12 Production growth at significantly lower cash operating costs Lower by nearly 9% per ton Improves Intrepid’s overall cash operating costs More than double current margin contribution per ton Creates cash margin
Slide 13: Moab Solar Solution Mine
Targeted Capital Investment Program to Achieve Greatest Returns Moab Solar Solution Mine 13 Among the lowest operating costs for Intrepid and the industry Lowering cash operating costs Incremental production at low cost Creates cash margin opportunity Create production stability and minimize natural
Slide 14: North Compaction Facility
Targeted Capital Investment Program to Achieve Greatest Returns North Compaction Facility 14 Flexibility to adjust production to pursue highest margin sales Create margin opportunity Capacity to compact 100% of Carlsbad production Expands granulation capacity Customer feedback that it is some of the
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
Intrepid’s Locations 17 Moab Solar Solution 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 Washington Califor
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 June 30, 2014
2014 Outlook as of June 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 requ
Slide 20: Financial Overview
Financial Overview Adjusted EBITDA* (in millions) Balance Sheet as of June 30, 2014 Net Income (Loss) (in millions) Diluted Earnings (Loss) Per Share Cash and Investments $ 35 million Current Assets $ 183 million Total Assets $1,160 million Debt Outstanding $ 150 million Total Liabilities $ 219 mill
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 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 reversal of the allowance associated with the employment-related high
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: Potash Cash Operating Costs Per Ton
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 short tons 2012 2013 2014 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Production Volume Potash 218 170 189 21
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: Increasing Population 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