Intrepid Potash, Inc · NYSE:IPI
Intrepid Potash — Investor Presentation (February 2013)
27 slides from Intrepid Potash's investor presentation, Feb 25, 2013
Slide 1: Investor Presentation February 2013
Investor Presentation February 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: Intrepid Potash: Geographically Advantaged, Intense Margin Focus
Intrepid Potash Geographically Advantaged, Intense Margin Focus Growth Strategy: Strategic marketing, diverse customer base, and production flexibility Highest average net realized sales price North American potash producer* Highest average cash margin North American potash producer** Capital invest
Slide 4: Company Overview – Uniquely Positioned
Company Overview – Uniquely Positioned The largest U.S. producer of potash Only western-world producer created and dedicated solely to potassium- related products Supplies ~ 1.5% of global demand and ~ 9.2% of U.S. demand One of only two global producers of the specialty product, sulfate of potash m
Slide 5: Current Potash Market – Favorable Trends
Farmers look to capitalize on favorable economics USDA forecasting highest farm income in past 40 years(1) Tight stocks-to-use ratio Strong commodity prices 97 million acre corn crop planting intentions estimate(2) Strong fall application...historically precedes strong spring Dealers’ strategy of mi
Slide 6: Geographically Advantaged Assets
Geographically Advantaged Assets 6 Average Potash Consumption in Intrepid’s Markets is Greater than 5x of Intrepid’s Average Production Intrepid Conventional Mine Locations Low High Sources: Association of American Plant Food Control Officials (AAPFCO), The Fertilizer Institute (TFI), Fertecon, USDA
Slide 7: North American Price Leader
North American Price Leader 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 calculated by us as
Slide 8: North American Cash Margin Leader
North American Cash Margin Leader 8 (1) Cash Margin Advantage Notes: Average cash margin advantage is calculated as average per ton net realized sales price advantage plus cash COGS difference (calculated using the combined estimated average net realized sales prices and average estimated cash COGS
Slide 9: Diversified Markets and Customer Base with Flexible Product Mix
Diversified Markets and Customer Base with Flexible Product Mix Trio® markets further diversify crops and customers Industrial market primarily consists of oil and gas drillers Potash used as a nutritional supplement in animal feed Investments will result in ability to granulate ~90% of our producti
Slide 10: We Have Successfully Increased Our Reserve Lives
10 We Have Successfully Increased Our Reserve Lives Ingredients for Growth – Extending Reserve Lives Extending reserves is a result of our lease acquisition and development strategy Expanding reserves at all of our existing sites Disciplined approach to core-hole drilling and reserve definition Mini
Slide 11: 2012 Capital Investment of $253 Million: Growth, Flexibility & Margin
Our 2012 Capital Investment of $253 Million Represents the Highest Level of Annual Capital Investment in Our History Capital Projects Are Focused on Growth, Flexibility & Margin 11 Growth Flexibility Margin HB will represent an estimated 20-25% increase in potash production volumes Incremental low c
Slide 12: Major 2013 Capital Investments
Major 2013 Capital Investments HB Solar Solution Mine North Compaction Moab Cavern System Investing to Increase Production and Significantly Lower Costs 12 Intrepid has invested $750 million since inception underscoring our commitment to growth Major Capital Project Milestones Facility Year Complete
Slide 13: HB Solar Solution Mine – Key Facts
Five million tons of proven and probable reserves Capital investment of $225-$245 million Cash production cost per ton estimated to be below $80 per ton, making HB one of the lowest cost potash mines in North America Estimated annual production potential of 150,000-200,000 tons Opportunity for furth
Slide 14: HB Solar Solution Mine – Construction Progress and Timeline
14 Construction commenced in March 2012, project currently on schedule Invested $128 million through Dec. 31, 2012 Well drilling - done Pipeline construction - done Pond construction – in process Mill construction – in process Leverages our solution mining and solar evaporation expertise Creative us
Slide 15: 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 constructed in 2012 and has begun to produce in 2013 Cavern 3 to be drilled in 2013 with the benefit expected in late 2014 Excel
Slide 16: 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 $95 to $100 million On bud
Slide 17: Summary
17 Summary The Only Western World Potash Pure-Play The Highest Per Ton Average Net Realized Sales Price and Cash Margin of Any North American Potash Producer Geographically Advantaged Assets Serving Diversified Markets and Customer Base Decision Making Focused on Growth, Flexibility, and Margin Capi
Slide 18: Appendix
Appendix ® Supplying a Growing America®
Slide 19: Financial Outlook as of February 13, 2013
Financial Outlook as of February 13, 2013 19 Three Months Ended Year Ended March 31, 2013 December 31, 2013 Potash Production (tons) 200,000 - 215,000 850,000 - 880,000 Sales (tons) 170,000 - 200,000 850,000 - 870,000 Cash COGS, net of by-product credit ($/ton) $185 - $195 $170 - $190 Total COGS ($/
Slide 20: Financial Overview
Financial Overview 20 Adjusted EBITDA* (In millions) Balance Sheet as of December 31, 2012 * 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
Slide 21: Non-GAAP Reconciliation: Calculation of Adjusted EBITDA
Non-GAAP Reconciliation Calculation of Adjusted EBITDA (in thousands) 21 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 22: Non-GAAP Reconciliation: Calculation of Adjusted Net Income
Non-GAAP Reconciliation Calculation of Adjusted Net Income (in thousands) 22 Adjusted net income is a non-GAAP financial measure that is calculated as net income adjusted for certain items that impact comparability of results from period to period including, among other items, insurance settlements
Slide 23: Historical Quarterly Production and Sales Summary
Historical Quarterly Production and Sales Summary 23 Mar. 31, Jun. 30, Sep. 30, Dec. 31, Mar. 31, Jun. 30, Sep. 30, Dec. 31, Mar. 31, Jun. 30, Sep. 30, Dec. 31, Potash 172 165 166 224 234 209 173 197 218 170 189 218 Trio® 57 39 32 31 31 44 35 31 30 33 35 34 Potash 243 129 221 216 196 225 190 183 203
Slide 24: Production Volume History & Estimated Productive Capacity
Productive capacity is affected by achieving the benefit of designed capacity and recovery improvement investments, operating rates, recoveries, mining rates, and the amount of development work that Intrepid performs. Therefore, actual production rates for mining companies tend to be lower than esti
Slide 25: 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 26: 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 26 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 27: United States Potash Consumption
United States Potash Consumption 27 Sources : Fertecon, United States Department of Agriculture (USDA). Potash consumption is shown in fertilizer years (July – June). Grains stocks include barley, corn, oats, sorghum and wheat. Potash fertilizer consumption has remained relatively constant with an a
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