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8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): September 9, 2014

LSB INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)

Delaware

1-7677

73-1015226

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)


16 South Pennsylvania Avenue, Oklahoma City, Oklahoma		73107
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code (405) 235-4546

Not applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section 8 – Regulation FD

Item 8.01.

Other Events.

The Company intends to disclose certain information to prospective investors in the form of an Investor Presentation, the first of which is being held during the second week of September 2014. The Company is furnishing the Investor Presentation as Exhibit 99.1 to this Current Report on Form 8-K, which lists or discusses certain disclosures about the Company and its business. A copy of the Investor Presentation, dated September 2014, is also publicly available at: http://investors.lsbindustries.com. The content of such website is included for general information only and is not incorporated by reference in this Form 8-K.

Section 9 - Financial Statements and Exhibits

Item 9.01.

Financial Statements and Exhibits.

(d)

Exhibits.

99.5 Investor Presentation, dated September 2014.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: September 9, 2014


LSB INDUSTRIES, INC.

By:		/s/ Jack E. Golsen
		Jack E. Golsen, Chief Executive Officer

EX-99.5

LSB

Industries,

Inc.

September 2014

NYSE: LXU

Exhibit 99.5

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, grain or corn demand or production, 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; 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; 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; Backlog should translate into improved second half 2014; 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’s for the

periods ending March 31, 2014 and June 30, 2014. We undertake no duty to update the information contained in this investor presentation.

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 in this investor presentation are included on

the Q2 2014 conference call presentation, which is posted on our website.

Company

Overview

Business Overview

Net Sales by Business Segment –

LTM 6/30/14

EBITDA by Business Segment –

LTM 6/30/14

Diversified industrial manufacturer of chemicals 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 6/30/14 Net Sales of $706.6 million

LTM 6/30/14 Consolidated Adjusted EBITDA of

$174.9

million

(1)

LSB

operates

well-diversified

business

with

differentiated

market

positions

across

two

distinct

business segments

Note: Excludes unallocated corporate expenses

Note (1): Includes insurance proceeds of $108.4 million

Climate

Control,

37%

Engineering

and other,

Climate

Control,

14%

Chemical

61%

Chemical

86%

LSB’s Two Core Businesses

Consolidated Sales History

LTM 6/30/14 Sales Mix

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 water

source and geothermal heat pumps, and

hydronic

fan coils

Poised to benefit from the economic

recovery, long-term trend toward green

construction, and growth of emerging

products

Business Segment

Overview

Agro-

Chemical

(48% 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

reduce

emissions from diesel vehicles

Various

Market Products Uses

Competitors

Industrial

Acids,

Ammonia &

DEF

(34% 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

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

(15% of sales)

U.S. Midwest Delivered

Ammonia

Cost

Forecast

($US/ton)

Source: Fertecon, Blue Johnson, PotashCorp (2013)

Attractive

Industry

Fundamentals

–

Agro

Chemicals

World Situation:

Growing populations

Developing economies

Changing dietary habits (from grain to

meat)

Worldwide grain stock-to-use ratios at

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 at historical levels

leading to lower current and expected

corn prices.

Result:

High demand for grain expected in

2014 and 2015 despite low corn prices;

approximately 90 million acres of corn

expected to be planted in 2014/2015.

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

relatively low natural gas prices vs. most

places worldwide.

Natural gas is expected to average

approximately $4.00 per MMBtu

for the

remainder of 2014.

LSB’s Agricultural Distribution

Multiple distribution channels

Diverse geographic coverage

Longstanding customer relationships

Direct rail linkage to corn belt

Southern Plains,

South Central,

Midwest & West

Pryor,

UAN

Koch

Southern

Plains &

Corn Belt

Cherokee,

UAN

Transammonia,

The Andersons,

CHS, Koch, et.al.

Eastern

Corn Belt

El Dorado,

Ag Centers -

30%

Distributors &

Dealers -

70%

Diversification Strategy with Product Balance Options

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.

LTM 6/30/14 Sales Mix

Operational Dynamics

Major Chemical Customers

Chemical Facilities

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

1,400

1,300

104

Bayer site

ammonia

natural gas

ammonia

UAN

High Density AN

Ammonia

Urea

Nitric Acid

Concentrated

Nitric Acid

Sulfuric Acid

Mixed Acid

Carbon Dioxide

Ammonia

DEF

Low Density AN

AN solutions

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 of Products Available for Sale

(1,000’s of tons)

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

Total

ammonia

natural gas

ammonia

UAN

215

300

515

High Density AN

110/300

Ammonia

125

115/240

Nitric Acid

45/200

410

485/640

DEF

Low Density AN

220

AN solutions

Facility

Feedstock

(1)

Note (1): Combined annual low density and high density AN production capacity is limited to 330,000/TPY due to the loss in 2012 of 90,000/TPY of nitric acid production capacity

•

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

Capital Expansion Projects

El Dorado Ammonia Plant

•

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

$624

$647

$599

$214

$179

$220

100

200

300

400

500

600

700

Cost to Produce

Cost to Purchase

Cost to Produce

Cost to Purchase

Cost to Produce

Cost to Purchase

Delivered Cost

Natural Gas Cost

Fixed Cost

Other Variable Cost

2013

2012

2011

Average Difference

Average Difference (Produce vs. Purchase): $419 per ton

Climate Control Market and Products

Geothermal &

Water Source

Heat Pumps

(66% 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

well

single

family

residential -

new

construction, renovation and replacements

Geothermal

Heat Pumps

Heating and cooling for commercial/institutional

well

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

Modular

Chillers

Commercial, institutional

and industrial

Make-up Air

Units

Commercial, institutional

and industrial

Other HVAC

Products

(11% of sales)

Market Products Uses

Attractive Industry Fundamentals: Climate Control

Significant upside as industry drivers return to

levels at/near historical norms

Driven by high energy efficiency

Climate Control LTM 6/30/14 Market Mix

Total

Commercial,

Institutional and

Multi-Family:

83%

($ in Billions)

$35.0

$85.0

$204.0

$248.0

$75

$150

$225

$300

2008A

2012A

2016P

Low-end

High-end

Source: 2013 Dodge Construction Green Outlook

Construction markets are poised for a

recovery to pre-recession levels

Green building market spending expected

to grow ~25%+ CAGR from ‘12 –

‘16E

Commercial / Institutional / Multi-Family Starts

(MM Square Feet)

Single Family Residential Construction

(Starts in 000’s)

1,749

1,270

1,517

1,717

2008

2013

2015E

2017E

19%

13%

1,626

624

800

1,080

2005

2013

2015E

2017E

28%

50-Year Median: 1,070

35%

Education

20%

Single

Family

Residential

17%

Multi-

Family

17%

Hospitality

11%

Healthcare

Retail

Office

Industrial

Other

15%

Sources: McGraw-Hill Construction Market Forecasting Service, Q3 2014; 50 Year Median – Census Bureau

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

Thousands of premier installations and over 4 million units

Financial Overview

Summary Statement of Operations

2013

2012

2011

2010

2014

2013

Sales

$679.3

$759.0

$805.3

$609.9

$380.2

$352.9

Sales Growth

(11)%

(6)%

32%

15%

(12)%

Operating Income/(Loss)

$105.3

$95.7

$136.4

$55.9

$49.6

$12.0

Net Income/(Loss)

$55.0

$58.6

$83.8

$29.6

$22.8

$7.4

Diluted Earnings/(Loss) per Share

$2.33

$2.49

$3.58

$1.32

$0.96

$0.31

EBITDA

$132.9

$117.3

$155.7

$74.3

$67.3

$25.4

EBITDA Margin

20%

15%

19%

12%

18%

$ in millions except EPS

6 Mos. Ended Jun. 30,

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

Chemical Business

$ in millions

2013

2012

2011

2010

2014

2013

Sales

$380.7

$477.8

$511.9

$351.1

$251.0

$198.8

Gross Profit

46.2

97.7

130.7

49.3

57.7

14.5

Gross Profit %

12.1%

20.4%

25.5%

14.0%

23.0%

7.3%

Operating Income

87.8

82.1

116.5

31.9

52.4

2.6

Segment EBITDA

$111.4

$98.5

$131.2

$45.0

$67.4

$13.4

Climate Control Business

$ in millions

2013

2012

2011

2010

2014

2013

Sales

$285.0

$266.2

$281.6

$250.5

$123.1

$147.6

Gross Profit

92.9

81.0

88.2

86.4

37.8

47.4

Gross Profit %

32.6%

30.4%

31.3%

34.5%

30.7%

32.1%

Operating Income

30.4

25.8

32.8

35.3

8.9

15.8

Segment EBITDA

$33.6

$29.0

$35.5

$38.8

$11.3

$17.5

6 Mos. Ended Jun. 30,

Calendar Year Ended Dec. 31,

6 Mos. Ended Jun. 30,

Solid Financial Position

Strong Balance Sheet

Note: As of June 30, 2014, total debt consisted of

$425 million 7.75% Senior Secured Notes due in

2019; a $26.2 million Secured Promissory Note due

in February 2016 and $9.1 million of equipment

loans and capital leases. Our availability under the

$100 million working capital revolver loan was

$69.4 million at June 30, 2014.

Debt to Capital

EBITDA to Interest Coverage*

* Calculated on a trailing twelve month basis using

total interest, including capitalized interest.

Planned Capital Spending

Remainder of

2014

2015

Total

Chemical Business:

El Dorado Facility Expansion Projects

$135 - $170

$139 - $174

$274 - $344

Development of Natural Gas Leaseholds

3 - 5

11 - 15

14 - 20

Environmental Projects

7 - 10

5 - 6

12 - 16

Major Renewal and Improvement Projects

20 - 30

27 - 35

47 - 65

Other

10 - 15

15 - 20

25 - 35

Total Chemical

$175 - $230

$197 - $250

$372 - $480

Climate Control Business:

5 - 6

5 - 10

10 - 16

Corporate and Other:

5 - 10

5 - 9

10 - 19

Total Projects

$185 - $246

$207 - $269

$392 - $515

Expenditures

to Date

Remainder of

2014

2015

Project

Total

Ammonia Plant

$74

$70 - $95

$106 - $131

$250 - $300

Nitric Acid Plant and Concentrator

20 - 25

22 - 27

115 - 125

Other Support Infrastructure

45 - 50

11 - 16

65 - 75

Total El Dorado Projects

$156

$135 - $170

$139 - $174

$430 - $500

Planned Capital Expenditures

Total Projects

El Dorado

Expansion Projects

(as

June

30,

2014

millions)

Note: The planned spending is presented as a range to provide for engineering estimates, the status of bidding, variable material costs, unplanned delays in construction and

other contingencies.

Outlook

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

weather

conditions, but returned 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 is 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.

Highest backlog since mid 2008 should translate into improved second half 2014

results vs first half 2014 results.

Key LSB Value Drivers

Comprehensive upgraded Chemical Business safety and plant reliability

systems

–

intended

improve

plant

up-time

and

reduce

risks

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.

Expansion

projects

Dorado

–

intended

reduce

costs,

increase

capacity,

and enhance product balance capabilities.

Growth

Climate

Control

Business

within

existing

plant

footprints

construction

cycle

recovers

achieve

increased

profits

through

operating

leverage.

LEAN

Operational

Excellence

initiatives

our

Climate

Control

Business

facilitate improved operational metrics and reduce costs.

Appendix

Reconciliation of Consolidated Net Income and Segment Operating Income to Non-GAAP Measurement EBITDA.

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.

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.

LSB Industries, Inc. Consolidated

2014

2013

2014

2013

2014

2013

Net income

11.1

7.5

22.8

7.4

70.3

25.6

Plus:

Interest expense

5.7

0.5

12.4

1.3

25.1

3.2

Depreciation and amortization

8.7

6.5

17.4

13.1

32.8

23.7

Provisions for income taxes

7.1

4.4

14.7

3.6

46.5

14.0

Loss from discontinued operations

0.2

0.1

EBITDA per conference call

32.6

18.9

67.3

25.4

174.9

66.6

Climate Control Business

Operating income

4.6

9.5

8.9

15.8

23.5

28.5

Plus:

Equity in earnings of affiliate

0.1

0.4

0.2

0.7

Depreciation and amortization

1.2

0.7

2.3

1.3

3.8

2.6

EBITDA per conference call

5.8

10.3

11.3

17.5

27.5

31.8

Chemical Business

Operating income

23.6

6.4

52.4

2.6

137.6

25.2

Plus:

Non-operating income

0.1

0.2

Depreciation and amortization

7.4

5.3

14.8

10.8

27.6

19.2

EBITDA per conference call

31.1

11.7

67.4

13.4

165.4

44.4

Trailing Twelve months ended 6-30

Six months ended 6-30

Three months ended 6-30

EBITDA Reconciliations

Management uses operating income

(in millions)

Chemical Business Operating Metrics

*Gross cost excluding any hedging activity

Six Months Ended June 30,

Agricultural:

2014

2013

% Change

Product (tons sold)

Urea ammonium nitrate (UAN)

186,204

96,102

94%

Ammonium nitrate (AN)

160,039

102,843

56%

Anhydrous ammonia

40,449

15,312

164%

Other

18,957

17,013

11%

405,649

231,270

75%

Average

Selling

Prices

(price

per

ton)

UAN

$265

$308

(14%)

$328

$385

(15%)

Anhydrous ammonia

$450

$593

(24%)

Input Costs

Average purchased ammonia cost/ton

$473

$590

(20%)

Average natural gas cost/MMbtu*

$5.03

$4.11

22%

Industrial:

Product (tons sold)

Nitric acid

256,225

222,237

15%

AN and AN solution

90,823

68,515

33%

What

Our

Chemical

Products

Are

Used

For:

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

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

reduce

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)

Products

are

marketable

every

intermediate

and

final

stage

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.

Solution

(storage,

Nitric

Acid

Ammonia

Plant

UAN

Urea

CO2

Liquification

Natural

Gas

(pipeline)

UAN

(storage,

trucks, rail)

NH3

(storage,

trucks, rail)

CO2

trucks)

Climate Control Sales & Marketing Data

Diversified End Markets

Commercial:

•

Residential (Geothermal):

•

Plus: OEM distribution channels

Distribution Channels

(as

2014)

Product & Market Sales Mix –

Various Perspectives

June 30, 2014 LTM Sales Mix Data

238 Commercial representative firms with

438 locations

2,200+ Sales Engineers

600 Residential distributor locations (approx.)

4,000 Residential contractor-dealers (approx.)

Commercial

Institutional

77%

Residential

17%

Export

Heat Pumps

66%

Fan Coils

23%

Air

Handlers

Chillers

Contracting

Direct

82%

OEM

18%

25%

50%

75%

100%

2008

LTM

6/30/14

Retail

Single Family

Education

Healthcare

Multi Family

Office

Lodging

Other

Focus on Geothermal Heat Pumps

How does a GHP system work?

The

Earth

absorbs

approximately

50%

all

solar

energy

and

remains

nearly

constant

temperature

year

round

(below

few

feet

deep).

A GHP system

uses a

sealed in-ground heat exchanger (loop) filled

with

fluid

and

GHP

unit

exchange

energy

between

the

house

building and the earth.

In winter,

to the GHP where it is converted (compressed) to a higher temperature

and sent as warm air into the house or building.

In summer,

building into the earth.

GHP systems work year round,

residences and large commercial buildings, providing both conditioned

air and domestic hot water

(as a “free”

by-product).

Typical

Residential

Geothermal

System

Energy Cost Reduction & Positive

Cash Flow

–

the most energy efficient HVAC

technology

available

–

80%

efficient

than conventional systems.

Residential Energy Usage

Conventional System Geothermal System

Geothermal Benefits:

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

–

noisy

condensing

unit

Extremely Long Lived

loops)

all

climates,

both

individual

the system reverses, transferring heat from the house or

fluid in the loop absorbs energy from the earth and carries it

vs. conventional systems (50 year

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

Typical GHP Costs and Savings

Geothermal

Heat Pump

16 SEER

Standard

Heat Pump

10 SEER

Standard

Heat Pump

93% Efficient

Natural Gas

Furnace with

16 SEER A/C

80% Efficient

Natural Gas

Furnace with

10 SEER A/C

93% Efficient

Propane

Furnace with

16 SEER A/C

80% Efficient

Propane

Furnace with

10 SEER A/C

80% Efficient

Oil Furnace

with 16 SEER

A/C

80% Efficient

Oil Furnace

with 10 SEER

A/C

Notes:

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Notes:

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Notes:

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