EX-99.5 3 d743642dex995.htm EX-99.5

LSB Industries, Inc. June 2014 NYSE: LXU Exhibit 99.5

2 Safe Harbor Statement The comments today and the information contained in the presentation materials contain certain forward-looking statements. All these statements, other than statements of historical fact, are forward-looking statements. Statements that include the words “expect,” “intend,” “plan,” “believe,” “project,” “anticipate,” “estimate” and similar statements of the future or of a forward-looking nature identify forward-looking statements, including but not limited to, all statements about or in references to the Architectural Building Index or any McGraw Hill forecast, any references to projected natural gas costs, ammonia costs, and fundamentals of the chemical or climate control business. The forward-looking statements include but are not limited to the following statements: For Chemical Business: Major investments underway to reduce costs and increase facility reliability; Positioned to benefit from strong agricultural market with favorable margins; Strong regional market positions serving the Corn Belt and South Central U.S.; Product balance options; Capital expansion projects reduce production costs significantly vs. purchased ammonia; Estimated completion Q4 2015/Start-up Q1 2016 for El Dorado ammonia plant; El Dorado nitric acid plant and concentrator will have a cost of $115 million to $125 million, improves operating characteristics, enhances product balance, replaces lost acid capacity and adds capacity for a total of 375,000 TPY, and estimated completion and start-up of Q2 2015; Fundamentals of the nitrogen fertilizers we produce remain positive; Gross margins remain historically strong; LSB Value Drivers; Pryor facility reliability improvements; capital projects at El Dorado; Corn pricing remains at favorable levels for growers; Comprehensive upgraded Chemical Business safety and plant reliability systems will improve plant up-time and reduce risks of unplanned downtime. For Climate Control Business: Market and technology leader for geothermal heat pumps, water source heat pumps, and hydronic fan coils; Poised to benefit from the economic recovery, long-term trend toward green construction, and growth of emerging products; Construction markets are poised for a recovery to pre-recession levels; Climate control’s product sales should outgrow broader markets; Leading indicators point to solid growth over the next three years in commercial and institutional construction, as well as residential housing starts; Anticipate an improvement in all the major sectors that we serve, especially lodging, multi-family housing and education; LEAN operational excellence margins. You should not rely on the forward-looking statements because actual events or results may differ materially from those indicated by these forward-looking statements as a result of a number of important factors. We incorporate the risks and uncertainties discussed under the heading Special Note Regarding Forward-looking Statements in our annual report on Form 10-K for the fiscal year ended December 31, 2013 and Form 10-Q for the period ending March 31, 2014. We undertake no duty to update the information contained in this conference call. The term EBITDA, as used in this presentation, is net income plus interest expense, depreciation, amortization, income taxes, and certain non- cash charges, unless otherwise described. EBITDA is not a measurement of financial performance under GAAP and should not be considered as an alternative to GAAP measurement. The reconciliation of GAAP and any EBITDA numbers discussed during this conference call are included on the Q1 2014 conference call presentation, which is posted on our website.

3 Company Overview

Business Overview 4 2013 Net Sales by Business Segment 2013 Consolidated EBITDA by Business Segment Diversified industrial manufacturer of chemical and HVAC products sold into a wide range of end markets Founded in 1968 and headquartered in Oklahoma City, OK; publicly traded (NYSE: LXU) Chemical Business operates 4 production facilities El Dorado Chemical Company (“EDC”) (Arkansas) Cherokee Nitrogen LLC (Alabama) Pryor Chemical Company (Oklahoma) El Dorado Nitric LLC (“Baytown”) (Texas) Climate Control Business operates 7 facilities located in Oklahoma City (over 1 million square feet) Financial Snapshot: LTM 3/31/14 Net Sales of $707.1 million LTM 3/31/14 Consolidated Adjusted EBITDA of $161.2 million LSB operates a well-diversified business with differentiated market positions across two distinct business segments Note: Excludes unallocated corporate expenses

LSB’s Two Core Businesses 5 Consolidated Sales History Chemical Provides nitrogen based agricultural, mining and industrial chemicals to North American market Leading merchant marketer of nitric acid in the U.S. Major investments underway to reduce costs and increase facility reliability and capacity Positioned to benefit from strong agricultural market with favorable margins Climate Control Provides specialty HVAC products to commercial, institutional and residential new construction, renovation and replacement markets, emphasis on green products Market and technology leader for geothermal heat pumps, water source heat pumps, and hydronic fan coils Poised to benefit from the economic recovery, long-term trend toward green construction, and growth of emerging products 2013 Full Year Sales Mix

6 Business Segment Overview

Attractive Industry Fundamentals – Agro Chemicals 7 World Situation: Growing populations Developing economies Changing dietary habits (from grain to meat) Worldwide grain stock-to-use ratios at below historical levels North American Situation: World grain shortages positively impact grain requirements in the U.S. During last 3 years U.S. consumed more grain than it produced. U.S. grain stocks are below historical levels. Result: High demand for grain expected in 2014 and beyond. North America is Low Cost Producer of Nitrogen Fertilizers Natural gas is the primary feedstock for anhydrous ammonia and all nitrogen fertilizers. Due to large shale gas reserves, U.S. has very low natural gas prices vs. most places worldwide. Natural gas is expected to average between $4.50 and $5.00 per MMBtu in 2014. U.S. Midwest Delivered Ammonia Cost Forecast ($US/ton) Source: Fertecon, Blue Johnson, PotashCorp (2013)

Agro- Chemical (44% of sales) Nitric Acid Semi-conductor, nylon, polyurethane intermediates, ammonium nitrate CF Industries, PCS Sulfuric Acid Pulp and paper, alum, water treatment, metals and vanadium processing Cytec, Chemtrade Logistics Anhydrous Ammonia Power plant emissions abatement, water treatment, refrigerants, metals processing Various Diesel Exhaust Fluid (DEF) Exhaust stream additive to reduce NO x emissions from diesel vehicles Various Market Products Uses Competitors Industrial Acids, Ammonia & DEF (37% of sales) Urea Ammonium Nitrate Solutions (UAN) Fertilizer for corn and other crops CF Industries, PCS, Koch Industries, Rentec, Coffeeville Resources, imports Ammonium Nitrate - high density prills (AN) Primary nitrogen component in NPK fertilizer blends CF Industries, imports Anhydrous Ammonia High nitrogen content fertilizer primarily used for corn Various Chemical Markets and Products 8 Ammonium Nitrate – low density prills (AN) and AN solutions Specialty emulsions for mining applications CF Industries, PCS, Dyno Nobel America Specialty E2 Ammonium Nitrate Surface mining, quarries, construction Imports Mining Products (17% of sales)

Major Chemical Customers 9 Bayer

Strategically Located Chemical Facilities, Long-Standing Customers, Unique Business Model 10 Product offering applicable across a broad range of end markets Nitric acid for industrial uses UAN, AN and NH3 fertilizers AN and AN solutions for mining industry Chemical End Markets Strong Market Positions Across Footprint Strong regional market positions serving the Corn Belt and South Central U.S. Multiple distribution channels Located on major rail transport routes (single haul rail and river access at Cherokee) Access to ammonia pipeline at EDC Average relationship of over 15 years with top 5 customers – includes several blue-chip customers Reduced commodity exposure through cost plus agreements (feedstock and production costs plus profit component)

Operational Dynamics Diversification Strategy with Product Balance Options 11 Sales by Market Cost-Plus Agreements vs. Spot Market Sales A key strategy is to OPTIMIZE SALES MIX: industrial vs. agricultural. Approximately half our sales are NON-SEASONAL and priced pursuant to COST-PLUS agreements. 2013 Sales Mix

Chemical Facilities 12 El Dorado Nitric LLC El Dorado Chemical Co. Cherokee Nitrogen LLC Pryor Chemical Co. El Dorado Chemical Company Cherokee Nitrogen LLC Pryor Chemical Company El Dorado Nitric LLC El Dorado, AR Cherokee, AL Pryor, OK Baytown, TX 150 160 47 2 1400 1300 104 Bayer site ammonia natural gas natural gas ammonia UAN x x High Density AN x Ammonia x x Urea x x Nitric Acid x x x x Concentraed Nitric Acid x Sulfuric Acid x Mixed Acid x Carbon Dioxide x x Ammonia x x DEF x Low Density AN x AN solutions x x truck, rail truck, rail, pipeline, barge truck, rail truck, pipeline Transportation to Market Facility Location Plant Area (acres) Site Area (acres) Feedstock

Annual Production Capacity for Products Available for Sale (000’s of tons) 13 Red Font = production capacities after the completion of the ammonia and nitric acid expansion projects at El Dorado El Dorado Chemical Company Cherokee Nitrogen LLC Pryor Chemical Company El Dorado Nitric LLC ammonia natural gas natural gas ammonia UAN 215 300 High Density AN 110/300 Ammonia 125 30 85 Nitric Acid 45/200 30 410 DEF 15 Low Density AN 220 AN solutions 85 Facility Feedstock

14 Capital Expansion Projects El Dorado Ammonia Plant • Cost of $250 million - $300 million • Reduces production costs significantly vs. purchased ammonia • Enhanced product balance opportunities • Increases plant capacity: - Currently use ~220,000 tons per year (TPY) - Additional capacity ~155,000 TPY - Total capacity ~375,000 TPY • Estimated completion Q4 2015/start-up Q1 2016 • Cost of $115 million - $125 million • Improves operating characteristics • Enhanced product balance • Replaces lost acid capacity and adds additional capacity for a total of 370,000 TPY • Estimated completion and start-up Q2 2015 El Dorado Nitric Acid Plant and Concentrator • Engineering, Procurement and Construction (EPC) contractor secured • Installation of above ground structures underway • Inspection and refurbish/rebuild of equipment in process Construction Process Well Underway Ammonia Production Offers Attractive Economics Cost to Produce Cost to Produce Cost to Produce Cost to Produce Cost to Produce Cost to Produce Average Difference (Produce vs. Purchase): $419 per ton

15 Attractive Industry Fundamentals: Climate Control Significant upside as industry drivers return to levels at/near historical norms Driven by high energy efficiency Climate Control 2013 End Market Mix Total Commercial, Institutional and Multi-Family: 83% Sources: McGraw-Hill Construction Market Forecasting Service, Q2 2014; 50 Year Median – Census Bureau ($ in Billions) $35.0 $85.0 $204.0 $248.0 $0 $75 $150 $225 $300 2008A 2012A 2016P Low-end High-end Source: 2013 Dodge Construction Green Outlook (MM Square Feet) Commercial / Institutional / Multi-Family Starts 1,749 1,100 1,544 1,710 2008 2012 2015E 2017E 39% 11% (Starts in 000’s) Single Family Residential Construction 1,626 516 910 1,090 2005 2012 2015E 2017E 76% 50-Year Median: 1,070 20% Construction markets are poised for a recovery to pre-recession levels Green building market spending expected to grow ~25%+ CAGR from ‘12 – ‘16E

Climate Control Market and Products Geothermal & Water Source Heat Pumps (64% of sales) Hydronic Fan Coils Heating and cooling for commercial/institutional new construction, renovation and replacements Leading share in hydronic fan coils Hydronic Fan Coils (23% of sales) Water Source Heat Pumps Heating and cooling for commercial/institutional markets as well as single family residential new construction renovation and replacements Geothermal Heat Pumps Heating and cooling for commercial/institutional markets as well as single family residential new construction renovation and replacements Leading share in water source and geothermal heat pumps Large Custom Air Handlers Commercial, institutional and industrial uses Modular Chillers Commercial, institutional and industrial uses Make-up Air Units Commercial, institutional and industrial uses Other HVAC Products (13% of sales) Market Products Uses 16

Significant Installed Base of Climate Control Products Millennium Towers, NYC Bellagio, Las Vegas Statue of Liberty MGM Grand, Las Vegas Trump Tower, NYC World Financial Center, NYC Chicago Hilton and Towers Wynn Resort, Las Vegas Disney’s Grand Floridian, Orlando Atlantis, Bahamas Rowes Wharf, Boston Alta Condos, Washington DC Peninsula, Hong Kong Ritz Carlton, Pasadena, CA Rockefeller Center, NYC 17 Thousands of premier installations and over 4 million units

18 Financial Overview

Summary Statement of Operations 19 2013 2012 2011 2010 2014 2013 Sales $679.3 $759.0 $805.3 $609.9 $178.5 $150.7 Sales Growth (11)% (6)% 32% 15% 19% (21)% Operating Income/(Loss) $105.3 $95.7 $136.4 $55.9 $25.9 ($0.2) Net Income/(Loss) $55.0 $58.6 $83.8 $29.6 $11.6 ($0.1) Diluted Earnings/(Loss) per Share $2.33 $2.49 $3.58 $1.32 $0.49 ($0.02) EBITDA $132.9 $117.3 $155.7 $74.3 $34.7 $6.5 EBITDA Margin 20% 15% 19% 12% 19% 4% $ in millions except EPS 3 Mos. Ended March 31, Calendar Year Ended Dec. 31, *Free cash flow is defined as operating cash plus insurance proceeds and debt and financing proceeds, less capital expenditures and debt and financing payments

Segment Summary Statement of Operations 20 Chemical Business 3 Mos. Ended March 31, $ in millions 2013 2012 2011 2010 2014 2013 Sales $380.7 $477.8 $511.9 $351.1 $115.2 $77.5 Gross Profit 46.2 97.7 130.7 49.3 28.4 2.4 Gross Profit % 12.1% 20.4% 25.5% 14.0% 24.7% 3.1% Operating Income/(Loss) 87.8 82.1 116.5 31.9 28.8 (3.8) Segment EBITDA $111.4 $98.5 $131.2 $45.0 $36.3 $1.6 Climate Control Business $ in millions 2013 2012 2011 2010 2014 2013 Sales $285.0 $266.2 $281.6 $250.5 $60.3 $70.3 Gross Profit 92.9 81.0 88.2 86.4 19.3 22.0 Gross Profit % 32.6% 30.4% 31.3% 34.5% 31.9% 31.3% Operating Income 30.4 25.8 32.8 35.3 4.3 6.4 Segment EBITDA $33.6 $29.0 $35.5 $38.8 $5.5 $7.2 3 Mos. Ended March 31, Calendar Year Ended Dec. 31, Calendar Year Ended Dec. 31,

Debt to Capital Solid Financial Position Strong Balance Sheet 21 Note: As of March 31, 2014, total debt consisted of $425 million 7.75% Senior Secured Notes due in 2019; a $28 million Secured Promissory Note with final payment due in February 2016 and $9 million of equipment loans and capital leases. Our $100 million working capital revolver is undrawn and availability under this facility was approximately $80 million at March 31, 2014. March 31, December 31, 2014 2013 Cash and Investments $408.9 $434.7 Total Debt $461.9 $463.0 Stockholders' Equity $423.9 $411.7 Total Capitalization $885.8 $874.7 $ in millions EBITDA to Interest Coverage* * Calculated on a trailing twelve month basis using total interest, including capitalized interest.

Planned Capital Spending 22 Remainder of 2014 2015 Total Chemical Business: El Dorado Facility Expansion Projects $200 - $235 $117 - $152 $317 - $387 Development of Natural Gas Leaseholds 8 - 10 11 - 13 19 - 23 Environmental Projects 9 - 11 5 - 6 14 - 17 Major Renewal and Improvement Projects 30 - 40 20 - 30 50 - 70 Other 18 - 20 19 - 22 37 - 42 Total Chemical $265 - $316 $172 - $223 $437 - $539 Climate Control Business: 6 - 7 5 - 10 11 - 17 Corporate and Other: 6 - 7 7 - 9 13 - 16 Total Projects $277 - $330 $184 - $242 $461 - $572 Capitalized to Date Remainder of 2014 2015 Project Total Ammonia Plant $53 $100 - $125 $97 - $122 $250 - $300 Nitric Acid Plant and Concentrator 60 45 - 50 10 - 15 115 - 125 Other Support Infrastructure - 55 - 60 10 - 15 65 - 75 Total El Dorado Projects $113 $200 - $235 $117 - $152 $430 - $500 Planned Capital Expenditures Planned Capital Expenditures Total Projects (including El Dorado below) El Dorado Expansion Projects (as of March 31, 2014 - $ in millions)

Outlook 23 Chemical Positive fundamentals remain for the nitrogen fertilizers we produce. Gross margins remain historically strong although lower than 2013. 2013’s improved corn harvest resulted in a higher stock-to-use ratio and lower forward corn prices, however pricing remains at favorable levels for growers. The 2014 planting seasons for both corn and wheat started slowly due to weather conditions, but have come back to historical levels. Growth is forecasted for the next few years for the industrial markets we serve. Climate Control Leading indicators point to solid growth over the next three years in commercial and institutional construction, as well as residential housing starts. Rate of recovery in the commercial and institutional sectors seems to be lagging behind the recovery in the general single-family residential construction market. Anticipate an improvement in all the major sectors that we serve, especially lodging, multi-family housing and education. LEAN operational excellence initiatives should result in enhanced margins.

Key LSB Value Drivers Comprehensive upgraded Chemical Business safety and plant reliability systems – intended to improve plant up-time and reduce risks of unplanned downtime. Pryor facility reliability improvements - including new senior management, additional engineering support, extensive monitoring and control equipment, remanufacture of certain key pieces of equipment, and use of industry expert consultants – intended to improve plant up-time and reduce risks of unplanned downtime. Capital projects at El Dorado – intended to reduce costs, increase capacity, and enhance product balance capabilities. Growth in Climate Control Business within existing plant footprints as construction cycle recovers to achieve increased profits through operating leverage. Operational excellence initiatives (including LEAN manufacturing techniques) in our Climate Control Business to facilitate improved operational metrics leading to expanding margins. 24

25 Appendix

EBITDA Reconciliations (in millions) Reconciliation of Consolidated Net Income (Loss) and Segment Operating Income (Loss) to Non-GAAP measurement EBITDA. Management uses operating income by business segment for purposes of making decisions that include resource allocations and performance evaluations. Operating income by business segment represents gross profit by business segment less selling, general and administrative expenses incurred by each business segment plus other income and other expense earned/incurred by each business segment before general corporate expenses. 26 LSB Industries, Inc. Consolidated 2014 2013 2014 2013 Net income (loss) 11.6 $ (0.1) $ 66.7 $ 44.2 $ Plus: Interest expense 6.7 0.7 20.0 3.8 Depreciation and amortization 8.7 6.6 30.5 22.3 Provisions for income taxes 7.7 (0.7) 43.8 25.0 Loss from discontinued operations - - 0.2 0.2 EBITDA 34.7 $ 6.5 $ 161.2 $ 95.5 $ Climate Control Business Operating income 4.3 $ 6.4 $ 28.3 $ 26.4 $ Plus: Equity in earnings of affiliate 0.1 0.2 0.3 0.7 Depreciation and amortization 1.1 0.6 3.3 2.5 Segment EBITDA 5.5 $ 7.2 $ 32.0 $ 29.6 $ Chemical Business Operating income (loss) 28.8 $ (3.8) $ 120.4 $ 57.9 $ Plus: Non-operating income 0.1 - 0.1 - Depreciation and amortization 7.4 5.4 25.6 17.8 Segment EBITDA 36.3 $ 1.6 $ 146.1 $ 75.7 $ Three months ended 3-31 Trailing Twelve months ended 3-31

Chemical Business Operating Metrics 27 *Gross cost excluding any hedging activity Three Months Ended March 31, Agricultural: 2014 2013 % Change Product (tons sold) Urea ammonium nitrate (UAN) 83,516 32,419 158% Ammonium nitrate (AN) 86,403 39,904 117% Anhydrous ammonia 15,057 3,012 400% Other 5,557 5,222 6% 190,533 80,557 137% Average Selling Prices (price per ton) UAN $261 $311 (16%) AN $308 $377 (18%) Anhydrous ammonia $416 $687 (39%) Input Costs Average purchased ammonia cost/ton $419 $619 (32%) Average natural gas cost/MMbtu* $5.25 $3.78 39% Industrial: Product (tons sold) Nitric acid 141,142 77,829 81% AN and AN solution 40,981 27,961 47%

LSB’s Agricultural Distribution 28 Multiple distribution channels Diverse geographic coverage Longstanding customer relationships Direct rail linkage to corn belt Southern Plains, South Central, Midwest & West

What Our Chemical Products Are Used For: 29 Agrochemical Products Uses Urea Ammonium Nitrate Solutions (UAN) 28-32% N Manufactured nitrogen content fertilizer High nitrogen content fertilizer for corn and other crops with high nitrogen demand (wheat, milo, cotton) E2 Ammonium Nitrate Prill (solid) 34% N High nitrogen content fertilizer Nitrogen consuming crops, forage areas and citrus. The primary nitrogen component in NPK (nitrogen, phosphorus, potassium) fertilizer blends Fertilizer Blends Custom blends with purchased phosphates, potassium, sulfur, micronutrients with produced ammonium nitrate Special application for agri-business products to supply growers balanced fertility Anhydrous Ammonia 82% N Gas injected application High nitrogen content fertilizer with highest percentage use for corn. Industrial Acids, Ammonia, DEF Uses: Concentrated Nitric Acid Aqueous solution up to 99% concentration Production of specialty fibers, nitrocellulose, gaskets, crop chemicals, mining products, metal treatment, nitric acid commercial blends Nitric Acid Commercial Blends Aqueous solution up to 89% concentration Semi-conductor industry, manufacture of nylon and polyurethane intermediates, potassium nitrate compounds, ammonium nitrate production Anhydrous Ammonia Commercial grade and high purity refrigeration, metallurgical grade Air emission abatement in power plants, water treatment, refrigerants, metals processing, and a wide variety of industrial uses Mixed Acids Blends of concentrated nitric acid and sulfuric acid/oleum Diesel fuel additives, ordnance, herbicides and pharmaceutical grade nitroglycerine Sulfuric Acid 98% and 93% concentrations, standard and low-iron grades Pulp and paper manufacturing, alum, water treatment, metals processing, vanadium processing, other industrial uses DEF (diesel exhaust fluid) Exhaust stream additive to reduce NO X emissions from diesel vehicles Industrial Mining Products Uses: Ammonium Nitrate Solutions 54% and 83% concentrations Specialty emulsions for mining applications, other miscellaneous uses Low Density Ammonium Nitrate Prills (solids) Solid pellets with good porosity and flowability Surface mining, quarries, construction

Typical Facility Process Flow (Pryor) 30 Products are marketable at every intermediate and final stage of production. Pryor facility process flow is typical of plants with natural gas feedstock. Pryor and Cherokee use natural gas feedstock. El Dorado and Baytown use ammonia feedstock.

Climate Control Sales & Marketing Data 31 Diversified End Markets Commercial: • 238 Commercial representative firms with 438 locations • 2,200+ Sales Engineers Residential (Geothermal): • 600 Residential distributor locations (approx.) • 4,000 Residential contractor-dealers (approx.) Plus: OEM distribution channels Distribution Channels (as of Q2 2014) Product & Market Sales Mix – Various Perspectives 2013 Sales Mix Data

Focus on Geothermal Heat Pumps How does a GHP system work? 32 The Earth absorbs approximately 50% of all solar energy and remains at nearly a constant temperature year round (below a few feet deep). A GHP system uses a sealed in-ground heat exchanger (loop) filled with fluid and a GHP unit to exchange energy between the house or building and the earth. In winter, fluid in the loop absorbs energy from the earth and carries it to the GHP where it is converted (compressed) to a higher temperature and sent as warm air into the house or building. In summer, the system reverses, transferring heat from the house or building into the earth. GHP systems work year round, in all climates, in both individual residences and large commercial buildings, providing both conditioned air and domestic hot water (as a “free” by-product). Typical Residential Geothermal System Geothermal Benefits: Energy Cost Reduction & Positive Cash Flow – the most energy efficient HVAC technology available – up to 80% more efficient than conventional systems. Fed Tax Credits - 30% residential & 10% business + accelerated depreciation, + state/utility incentives GHP’s are an Alternative form of Renewable Energy Green Refrigerants - non-ozone depleting “Free” Domestic Hot Water Noise Free Operation – no noisy condensing unit Extremely Long Lived vs. conventional systems (50 year loops) Conventional System Geothermal System Residential Energy Usage

33 Typical GHP Costs and Savings For a GHP System in a 2,500 sq. ft. new house in St. Louis, MO (typical middle America) Installed Cost of a 4 ton GHP System = $6,000 per ton (12,000 Btu/ton). System Operating Cost Comparison GHP vs. Conventional Systems Note: System installed costs are different throughout the U.S due to varying local conditions and labor costs. Savings vary due to weather conditions, user preferences, and local utility rates. Costs and savings in St. Louis are estimates and subject to change. Payback (GHP vs. Hi-Eff Gas Furn+AC) Installed cost of GHP $24,000 Less: 30% Fed tax credit (7,200) GHP cost after credit 16,800 Cost for Hi-Eff Gas + AC (12,000) GHP premium cost 4,800 Annual Energy Savings $1,248 Payback in Years 3.8 Positive Cash Flow Annual Energy Savings $1,248 Annual P&I on GHP Premium (6% int. – 10 yrs.) (636) Annual Cash Savings $612 This analysis compares these systems:

Notes: 34

Notes: 35

36 LSB Industries, Inc. is headquartered in Oklahoma City and does business through its subsidiaries, with seven HVAC manufacturing and distribution facilities in Oklahoma City, chemical plants in Texas, Arkansas, Alabama and Oklahoma and an engineered products distribution center in Oklahoma City. Approximately 1,900 total employees. Investor Relations: Company Contact : Mark Behrman Phone: 405-235-4546 Email: mbehrman@lsbindustries.com The Equity Group, Inc. Fred Buonocore Phone: 212-836-9607 Email: fbuonocore@equityny.com Linda Latman Phone: 212-836-9609 Email: llatman@equityny.com Fax: 212-421-1278 Corporate Offices: 16 South Pennsylvania Avenue Oklahoma City, Oklahoma USA Phone: 405-235-4546 Fax: 405-235-5067 Email: info@lsbindustries.com Website: www.lsbindustries.com Common Stock: NYSE ticker symbol LXU Auditor: Ernst & Young LLP