24 slides from Teck Resources Limited Class A's earnings presentation, Jul 28, 2010
Slide 1: Second Quarter 2010 Investor Conference Call and Webcast
Second Quarter 2010 Investor Conference Call and Webcast July 28, 2010
Slide 2: Forward Looking Information
Forward Looking Information Both these slides and the accompanying oral presentation contain certain forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and forward-looking information within the meaning of the Securities Act (Ontario).
Slide 3: Forward Looking Information
Forward Looking Information These forward-looking statements involve numerous assumptions, risks and uncertainties and actual results may vary materially. These statements are based on a number of assumptions, including, but not limited to, assumptions regarding general business and economic conditi
Slide 4: Q2 Investor Conference Call Speakers
Q2 Investor Conference Call • Speakers Don Lindsay President & CEO Ron Millos SVP Finance & CFO 4
Slide 5: 2nd Quarter 2010 Highlights
2nd Quarter 2010 Highlights Strong Operating Results • Revenues $2,110 million • Operating Profit $985 million (before Depreciation & Amortization) • Earnings $260 million (attributable to shareholders) • EBITDA $844 million 5
Slide 6: 2nd Quarter 2010 Highlights cont'd
2nd Quarter 2010 Highlights cont’d Strong Balance Sheet • Original US$9.8 billion bank debt retired • Investment grade credit ratings • Net Debt to Net Debt Plus Equity 24% • Dividend re-instated Strong Business Fundamentals • Increasing copper and coal production • Premium coal contracted for Q3 at
Slide 7: 2nd Quarter 2010 Earnings
2nd Quarter 2010 Earnings Earnings attributable to Shareholders Earnings per Share (C$) 1.50 $1.17 Q2 Q2 Q1 2010 2009 2010 1.00 Unusual Earnings $260 $570 $908 items ($millions) 0.50 $0.44 EPS $0.44 $1.17 $1.54 0.00 2010 2009 7
Slide 8: Comparative Earnings
Comparative Earnings ($ millions, net of taxes) Q2 ‘10 Q2 ‘09 Q1 ‘10 Earnings attributable to Shareholders as Reported $260 $570 $908 Asset Sales & Other – (13) (639) F/X (gains) losses on net debt 42 (413) (50) Derivative (gains) losses 16 31 (32) Financing items & Impairment charges 6 87 23 Tax It
Slide 9: Q2 Guidance
Q2 Guidance Guidance met or exceeded • Red Dog zinc con sales 70kt 70.5 kt • Coal sales 6.0 to 6.5 Mt 6.4 Mt • Coal pricing US $180/t to $185/t $182/t • Coal costs ~C$88/t site & port for 2010 C$87/t • Copper production and costs on track 77kt • Settlement adjustments – potentially negativ
Slide 10: Coal
Coal Q2 Q2 Q1 2010 2009 2010 Coal – Mt Production 6.0 4.3 5.7 Sales 6.4 5.0 5.3 Average Price (US$/t) 182 165 140 (C$/t) 186 191 150 Site Costs (C$/t) 56 55 61 Transportation Costs (C$/t) 31 33 30 Financial Results C$ millions Revenue 1,196 954 790 Operating Profit 634 515 313 (Before Depreciation)
Slide 11: Copper
Copper Q2 Q2 Q1 Copper in Concentrate (kt) 2010 2009 2010 Production 53 52 47 Sales 52 40 43 Copper Cathode (kt) Production 24 26 25 Sales 24 18 28 Moly in Concentrate (M lbs) Production 1.6 1.8 2.1 Sales 2.0 1.8 1.9 Financial Results C$ millions Revenue 499 408 620 Operating Profit 344 187 367 (Bef
Slide 12: Zinc
Zinc Q1 Q2 Q1 2010 2009 2010 Zinc in concentrate – kt Production 167 173 163 Sales 101 118 161 Refined Zinc – kt Production 71 60 68 Sales 70 63 66 Lead in Concentrate – kt Production 31 31 35 Sales 3 – – Refined Lead – kt Production 20 19 22 23 20 18 Sales Financial Results C$ millions Revenue 415
Slide 13: Red Dog Update
Red Dog Update • Aqqaluk development underway • Ore to mill 2011 • New water discharge permit process continues • Current water discharge under existing permit 13
Slide 14: Q2 Investor Conference Call Speakers
Q2 Investor Conference Call • Speakers Don Lindsay President & CEO Ron Millos SVP Finance & CFO 14
Slide 15: 2nd Quarter 2010 - Cash Changes
2nd Quarter 2010 - Cash Changes $Millions Cash Flow from Operations 675 Working Capital Changes (101) Capital Expenditures / Investments (169) Proceeds from Asset Sales 9 Decrease in Debt (net) (413) Non-controlling Interests (34) Exchange, Discontinued Ops & Other 17 Cash & STI Decrease (16) Cash a
Slide 16: Final Pricing Revenues
Final Pricing Revenues Outstanding from Q1 & Settled in Q2 Valued Settled Revenue Adj. (C$ M) M lbs US$/lb M lbs US$/lb Before Tax* After Tax* Copper 94 $3.55 94 $3.24 (28) Zinc 164 $1.08 152 $0.97 (8) Total $(36) $(23) Adjustments on Settlements within Q2 $(47) $(29) Total Final Pricing Adjustments
Slide 17: Debt Position
Debt Position Millions Dec 31, 2009 June 30, 2010 Cash (C$ millions) 1,420 758 Term Loan US$ 2,325 - Fixed Rate Notes 5,086 5,105 Other 205 228 Total Debt US$ 7,616 5,333 C$ Equivalent 8,004 5,678 Debt to Debt plus Equity 36% 27% Net Debt to Net Debt plus Equity 31% 24% 17
Slide 18: Credit Ratings
Credit Ratings Complete Investment Grade Ratings S&P Moody’s Fitch DBRS BBB Baa2 BBB, BBB stable stable Investment Grade BBB- Baa3 BBB-, BBB (low) Positive Stable positive BB+ Ba1 BB+ BB (high) Non- Investment BB Ba2 BB BB Grade April 27, 2010 Moody’s revised rating from Ba1 to Baa3 April 16, 2010 S
Slide 19: Q3 Guidance
Q3 Guidance Factors to consider • Red Dog zinc sales 170 kt • Coal sales 5.8 to 6.2 Mt • Coal pricing US $195/t to $200/t • Coal costs ~C$57/t site, ~C$33/t tpt for 2010 • Copper production and costs at HVC & CdA • Settlement adjustments 19
Slide 20: Q2 Investor Conference Call Speakers
Q2 Investor Conference Call • Speakers Ron Millos SVP Finance & CFO Don Lindsay President & CEO 20
Slide 21: Greenhills Update
Greenhills Update • Plant rebuild plan being developed • Raw coal to FRO • Wet coal being shipped and blended • Annual maintenance shutdown advanced • Production impact expected to be <0.5 Mt 21
Slide 22: Project Developments
Project Developments • Quebrada Blanca Copper Concentrate – Proceed to feasibility expected Q3 2010 • Relincho Copper Mine – Pre-feasibility study expected mid-year 2011 • Galore Creek Copper Mine – Pre-feasibility expected Q2 2011 • Frontier / Equinox Oil Sands Mine Projects – Pre-feasibility and r
Slide 23: Summary
Summary Strong balance sheet Strong cash flow Coal Production and pricing increasing Copper Production increasing Development Projects advancing 24
Slide 24: Second Quarter 2010 Investor Conference Call and Webcast
Second Quarter 2010 Investor Conference Call and Webcast July 28, 2010