Intrepid Potash, Inc · NYSE:IPI
Intrepid Potash — Shareholder Meeting (May 2010)
25 slides from Intrepid Potash's shareholder meeting presentation, May 19, 2010
Slide 1: Annual Meeting May 20, 2010
I POTASH Annual Meeting May 20, 2010
Slide 2: Forward-Looking Information
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 developments and our future performance, as well as management’s expect
Slide 3: Strategically Located, Potash-Only Company
3 Intrepid Potash Strategically Located, Potash-Only Company Intrepid has an intense margin focus: Improve reliability and efficiency Capital investment to increase recoveries and productivity which is designed to lower per ton production cost Innovate production methods Our production focus combine
Slide 4: Company Overview
4 Company Overview The largest U.S. producer of potassium fertilizer Only western world producer created and dedicated solely to potash-related products Supplies ~1.6% of global demand and ~9.4% of U.S. demand 1 of 2 global producers of sulfate of potash magnesia, marketed as Trio™ 5 active producti
Slide 5: Solid Financial Performance
5 Solid Financial Performance EBITDA(1) (In millions) Balance Sheet as of March 31, 2010 (1) This is a financial measurement not calculated based on U.S. Generally Accepted Accounting Principles (Non GAAP). Non-GAAP reconciliation available in the appendix to this presentation. Net Income (In millio
Slide 6: United States Potash Consumption
6 United States Potash Consumption Source : Fertecon, United States Department of Agriculture (USDA). Potash consumption is shown in fertilizer years (July – June). Potash fertilizer consumption has remained relatively constant, with an annual volatility of approximately nine percent, over the past
Slide 7: Farmers Understand the Agronomic Benefits of Potash
Farmers Understand the Agronomic Benefits of Potash Potash application rates were down in 2008 and 2009 2009 presented good growing conditions for farmers A robust 2009 crop coupled with lower application rates means soils were being depleted of “banked” nutrients Over 80% of respondents said that p
Slide 8: Q1 2010 Has Started Off Strong For Intrepid
Q1 2010 Has Started Off Strong For Intrepid Aggregate sales of potash in the first quarter of 2010 of 243,000 tons exceeded the number of tons sold in the first half of 2009 by over 35 percent Red Granular product inventory and production is essentially fully committed through mid-May 2010 The Intre
Slide 9: Potash Market Trends
9 Potash Market Trends Worldwide recession Global buyer / dealer hesitation Producer inventories building Elective production curtailments / mine shutdowns Relatively full supply chain at the dealer and retail level Dealers unwilling to take price risk Slower sales into agricultural & industrial mar
Slide 10: Fundamentals of Increasing Population Continue to Drive Grain Demand
10 Fundamentals of Increasing Population Continue to Drive Grain Demand Over the Long-Term Note: Grains include corn, wheat, barley, oats and sorghum. Stock to use ratio is average inventory / consumption for that year; data updated monthly. Source: United Nations Food and Agriculture Organization (
Slide 11: Average Potash Consumption Approximately 5x Greater than Our Production
11 Average Potash Consumption Approximately 5x Greater than Our Average Production in Our Markets Low High Source: Association of American Plant Food Control Officials (AAPFCO), The Fertilizer Institute (TFI), Intrepid Potash. (1) AAPFCO, Fertecon, USDA. New Mexico Texas Oklahoma Kansas Colorado Mis
Slide 12: Intrepid vs. North American Competitors
12 (2) Source: Green Markets and Fertecon Notes: (1) Based on Full Year 2009 for Intrepid Potash Inc., Potash Corp., Mosaic Co., Agrium Inc. (2) Total COGS include: Cash operating costs including all royalty, profit and capital taxes; Royalties of $20 per ton for Intrepid; Royalty, profit and capita
Slide 13: Diversified Markets and Customer Base
13 We sell potash into three different markets: Agricultural, Industrial and Feed Agricultural represents ~70% of Intrepid sales compared to an industry average of 92%(1) Agricultural primarily consumes granular potash and Trio™, industrial primarily consumes standard potash Standard potash costs le
Slide 14: Debottlenecking and Expansion Projects at Existing Facilities
14 Facility Estimated Key Benefits Estimated in service date Potash Debottlenecking and Expansion Projects at Existing Facilities Storage and Hoisting Capacity Upgrade West H2 2009 Decouple underground and surface operations Improve potash recoveries at West mine In Service Hydro-Float West H2 2010
Slide 15: Growing Langbeinite Business Presents a Key Opportunity
Intrepid believes the market is beginning to recognize the combined value of the nutrients in Trio™, potassium, magnesium and sulfur, and, as a result, we expect our pricing opportunity in the premium market to strengthen Growing Langbeinite Business Presents a Key Opportunity for Intrepid In 2005,
Slide 16: Langbeinite Recovery Improvement Project
Langbeinite Recovery Improvement Project Increases langbeinite recoveries from 35 percent to 50 percent thereby reducing cash costs per ton Reduces process water consumption Allows for production flexibility through the ability to granulate 100 percent of standard production Utilizes existing produc
Slide 17: Sales of Potash & Trio in the United States
17 Sales of Potash & Trio™ in the United States Intrepid Sells Potash & Trio™ into Multiple Markets & Multiple End Users
Slide 18: Current Trio Market and Growth Potential
The current market for Trio™ consists mainly of granular sales, with significant growth possible in the granular market Intrepid is investing in education and marketing programs intended to increase awareness of the benefits of magnesium and sulfur The majority of the growth should be in the interna
Slide 19: Langbeinite Recovery Improvement Project Timeline
Langbeinite Recovery Improvement Project Timeline 19 January – April 2009 July – December 2009 May 2010 October 2010 Late 2011 Feasibility Study Pilot testing with Dense Media Separation (“DMS”) circuit Lab flotation and pilot test-work on site Langbeinite granulation test-work Visit to site to view
Slide 20: Low-Cost, Solar Evaporation Assets
Low-Cost, Solar Evaporation Assets 20
Slide 21: HB Potash Solar Solution Mine: Incremental Growth
21 $600 per ton Capex to reopen an existing mine compared to an estimated cost of ~$1,400 per ton for greenfield projects HB expected to be among the lower-cost potash mines in North America Same proven solar evaporation and solution mining technology as used in Moab Will share infrastructure with e
Slide 22: HB Potash Solar Solution Mine: Project Timeline
HB Potash Solar Solution Mine: Project Timeline 22 Fifteen months into the EIS process with the BLM and we continue to remain on schedule. BLM has issued its scoping summary report for the EIS and is moving forward on preparation of the draft EIS. Working with the New Mexico Environment Department o
Slide 23: Final Thoughts
23 Strong Long-Term Industry Fundamentals The Only Western World Potash Pure-Play Strategically Located Assets Diversified Markets and Customer Base Well-Defined, Attractive Organic Growth Opportunities Final Thoughts
Slide 24: Appendix
POTASH Appendix
Slide 25: Calculation of EBITDA Non-GAAP Reconciliation
Calculation of EBITDA 25 Non-GAAP Reconciliation Earnings before income taxes, interest, depreciation and amortization (“EBITDA”) is computed as net income adjusted for the add back of income tax expense, interest expense including derivatives, depreciation, depletion, amortization, asset retirement