Intrepid Potash, Inc · NYSE:IPI
Intrepid Potash — Investor Presentation (November 2013)
28 slides from Intrepid Potash's investor presentation, Nov 14, 2013
Slide 1: Ingredients for Growth
Ingredients for Growth November 2013
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
Built to be pure-play potassium product company Creating value through modernization of assets Applying innovative technology Leader in low cost solar solution mining Proven management team Growing to be 1.2 million ton potash and Trio® producer Geographically advantaged serving localized markets Ge
Slide 4: Intrepid's Unique Position
Intrepid’s Unique Position Participating in industry with strong fundamentals Strategically positioned production facilities Serving diverse customers and markets Leveraging solar solution mining expertise Benefitting from a strong capital structure Highest average net realized sales price and cash
Slide 5: Average Net Realized Sales Price Advantage
Intrepid, on average, has achieved a 24% advantage on its average net realized sales price since 2005 + 24% Avg. Net Realized Sales Price Advantage Note: Average net realized sales price is an operating performance measure calculated as gross sales less freight costs, divided by the number of tons s
Slide 6: Average Cash Margin Advantage
Intrepid’s Unique Position Average Cash Margin Advantage Intrepid earns a higher average cash margin per ton for potash 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 th
Slide 7: Industry With Strong Fundamentals: Demand Remains Solid
Favorable farmer economics Annual U.S. potash consumption constant for decades, with few exceptions Nutrients need to be replenished Balanced fertilization key to maximize yields Demand in markets we serve is 5 times our production level Industry With Strong Fundamentals Demand Remains Solid 7
Slide 8: Strategically Positioned, Serving Diverse Customers and Markets
Strategically Positioned, Serving Diverse Customers and Markets Maximizing Sales and Margin Opportunities Deliberate marketing strategy Diverse end markets and customer base Expanding marketing base with updated production facilities Trio® expands customer base End Market Product Size 2012 YTD Sept.
Slide 9: Leveraging Solar Solution Mining Expertise
Leveraging Solar Solution Mining Expertise Overview 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 Allow solar evaporation to occur; potash recrystallizes as water evaporates Harvest the
Slide 10: Improving Cash Margin Opportunity Through HB
Leveraging Solar Solution Mining Expertise Improving Cash Margin Opportunity Through HB Full year outlook for potash cash operating costs per ton ~$193 Expected HB cash operating costs per potash ton ~$80 Note: Calculation assumes midrange of 2013 guidance as of Oct. 30, 2013, which equals a $192.50
Slide 11: HB Drives Cash Margin Opportunity
Leveraging Solar Solution Mining Expertise HB Drives Cash Margin Opportunity Expected cash margin per ton from HB approximately double compared to current environment Potential to grow cash margin faster than production growth Trio® adds more than $120 of cash margin per ton Note: Calculation assume
Slide 12: Benefitting from a Strong Capital Structure
Cash and investments totaling $81 million at Sept. 30 Sufficient cash on hand to complete 2013 capital investments $250 million unsecured credit facility fully available $150 million in unsecured long-term debt with average interest rate of less than 4% Expect to generate positive free cash flow in
Slide 13: Deploying Capital to Achieve Greatest Returns
Flexibility OBJECTIVE Respond to changing demand 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 ton cash costs PROJ
Slide 14: HB Solar – Production Growth at Significantly Lower Cash Costs
Deploying Capital to Achieve Greatest Returns HB Solar – Production Growth at Significantly Lower Cash Costs HB Solar Solution Mine Key Facts Capital investment of $235-$245 million Cash operating costs approximately $80 per ton at full production, making HB one of the lowest cost potash mines in No
Slide 15: Expand Moab Solar Solution Mining
Deploying Capital to Achieve Greatest Returns Expand Moab Solar Solution Mining, Incremental Tons at Lower Cash Cost Build on Successful Operations Expand solution mining footprint Cavern 1 began producing in 2002, expanded in 2012 Cavern 2 began producing in 2013 Cavern 3 drilling complete, brine i
Slide 16: North Compaction Key to Marketing and Production Flexibility
Deploying Capital to Achieve Greatest Returns North Compaction Key to Marketing and Production Flexibility Upgrade North Compaction Facility Creating high quality granulated potash Flexibility to produce and sell the highest margin product North will be able to compact 100% of Carlsbad production Ca
Slide 17: Why Intrepid?
Why Intrepid? Highest average net realized sales price and cash margin per ton in North American over time Geographically advantaged assets serving diversified markets and customer base Focused on growth, flexibility, and margin expansion Producing incremental low cost solar solution tons Strong cap
Slide 18: Appendix
intrepid potash Supplying a Growing America® Appendix
Slide 19: Outlook as of Sept. 30, 2013
Three Months Ended Year Ended December 31, 2013 December 31, 2013 Potash Production (tons) 200,000 - 230,000 770,000 - 800,000 Sales (tons) 185,000 - 210,000 710,000 - 735,000 Cash COGS, net of by-product credit ($/ton) $200 - $215 $185 - $200 Total COGS ($/ton) $270 - $290 $250 - $265 Trio® Product
Slide 20: Financial Overview
Financial Overview Adjusted EBITDA* (in millions) Balance Sheet as of Sept. 30, 2013 Adjusted Net Income* (in millions) Earnings Per Share (Diluted) Cash and Investments $ 81 million Current Assets $ 188 million Total Assets $1,181 million Debt Outstanding $ 150 million Total Liabilities $ 242 milli
Slide 21: Non-GAAP Reconciliation: 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 adjusted for the add back of reductions in the estimated accounts recei
Slide 22: Non-GAAP Reconciliation: Adjusted Net Income
Non-GAAP Reconciliation Adjusted net income and adjusted net income per diluted share are non-GAAP financial measures that are calculated as net income or earnings per diluted share adjusted for certain items that impact comparability of results from period to period including, among other items, pe
Slide 23: Intrepid Will Have Invested Nearly $1 Billion Since Inception
Intrepid Will Have Invested Nearly $1 Billion Since Inception For Growth and to Lower Costs Major Capital Project Milestones Facility Completion West Recovery Carlsbad, NM – West 2014E HB Solar Solution Mine Carlsbad, NM – HB 2013/2014E* North Compaction Project Carlsbad, NM – North 2013/2014E** Hor
Slide 24: Historical Quarterly Production and Sales
Historical Quarterly Production and Sales 24 Mar. 31, Jun. 30, Sept. 30, Dec. 31, Mar. 31, Jun. 30, Sept. 30, Dec. 31, Mar. 31, Jun. 30, Sept. 30, Potash 234 209 173 197 218 170 189 218 222 182 167 Trio® 31 44 35 31 30 33 35 34 46 50 40 Potash 196 225 190 183 203 184 249 203 185 184 156 Trio® 52 39
Slide 25: 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 26: 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 27: 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 28: 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
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