15 slides from Teck Resources Limited Class A's earnings presentation, Jul 23, 2015
Slide 1: Second Quarter 2015 Results
Second Quarter 2015 Results July 23, 2015
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: Strengthening Our Financial Position
Strengthening Our Financial Position • Ongoing focus on cost management and operational performance − Announced coal production curtailments for Q3 − Maintained annual coal cost guidance • Gross profit1 improved in all business units in Q2 • Significantly enhanced liquidity to >$6.5B • Recognized ag
Slide 4: Quarterly Results Q2 2015
Quarterly Results Q2 2015 Revenue $ 2.0 Billion Gross profit $ 676 Million (before depreciation & amortization) EBITDA $ 596 Million Profit $ 63 Million (attributable to shareholders) Adjusted profit* $ 79 Million (attributable to shareholders) $0.14/share 4 * Non-GAAP financial measure. See ‘Use of
Slide 5: Q2 2015 Operational Highlights
Q2 2015 Operational Highlights To Production Q2 2015 Q2 2014 Coal (Mt) 6.6 ▲ 0.2 Copper (kt) 93 ▲ 6 • Higher production for all major Zinc in concentrate1 (kt) 179 ▲ 22 products Zinc – refined (kt) 75 ▲ 3 • Pend Oreille restart completed Coal Unit Costs2 (C$/tonne) Copper Total Cash Unit Costs1,2
Slide 6: Steelmaking Coal
Steelmaking Coal Sales (Mt) Realized Price (C$/tonne) Revenue (C$M) 0.3 5% 8% 6.8 6.5 122 833 116 764 Q2 2014 Q2 2015 Q2 2014 Q2 2015 Q2 2014 Q2 2015 Production (Mt) Unit Costs1 (C$/tonne) Gross Profit2 (C$M) 10% 0.2 92 83 6% 6.6 Inventory 2 6.4 2 215 Transport 37 203 36 Site 53 45 Q2 2014 Q2 2015 Q
Slide 7: Copper
Copper Sales (kt) Realized Price (US$/lb) Revenue (C$M) 10% 8% 10 3.07 704 97 2.76 650 87 Q2 2014 Q2 2015 Q2 2014 Q2 2015 Q2 2014 Q2 2015 Production (kt) Total Cash Unit Costs1 (US$/lb) Gross Profit2 (C$M) 9% 6 8% 1.64 317 93 1.49 293 87 Q2 2014 Q2 2015 Q2 2014 Q2 2015 Q2 2014 Q2 2015 Total cash uni
Slide 8: Zinc
Zinc Zinc Sales (kt) Lead Sales (kt) Revenue (C$M) Conc1 Refined 5 1% 2% 6 93 530 88 526 0.96 0.98 78 72 Q2 2014 Q2 2015 Q2 2014 Q2 2015 Q2 2014 Q2 2015 Q2 2014 Q2 2015 Zinc Production (kt) Lead Production (kt) Gross Profit2 (C$M) Conc1 Refined Conc1 Refined 22 6 2% 163 33 3 140 143 141 27 7 72 75 2
Slide 9: Fort Hills Update
Fort Hills Update Ore Preparation Plant Extractions & Tailings Emergency Dump Pond Primary Separation North Rotary Thickener Train #1 Cells Mechanically Breaker Stabilized Earth Building Wall and Crusher Thickener Train #2 Surge Bin Column Tailings Pumphouse Flotation Hydrotransport Building Corrido
Slide 10: Cash Flow
Cash Flow Cash Changes in Q2 2015 2500 $329 2000 $332 $175 $53 $15 $ Millions 1500 $1,567 $1,327 1000 500 0 Cash - start of quarter Cash flow from PP&E, incl. Fort Hills Capitalized stripping Debt interest, principal FX, distributions to Cash - quarter end operations & issuance non-controlling inter
Slide 11: Pricing Adjustments
Pricing Adjustments Outstanding at Outstanding at June 30, 2015 March 31, 2015 Pounds (M) US$/lb Pounds (M) US$/lb Copper 251 2.60 214 2.73 Zinc 103 0.90 93 0.94 • Negative pricing adjustments of $32M in Q2 2015 Simplified Pricing Adjustment Model • Driven by quarterly change in Pre-tax Settlement A
Slide 12: Investment Grade Credit Rating
Investment Grade Credit Rating S&P Moody’s Fitch DBRS BBB BBB+ Baa1 BBB+ (high) Supported by: Investment • Significant cost reductions Grade BBB BBB Baa2 BBB negative • Capital discipline BBB- Baa3 BBB- BBB (low) • Dividend cut negative negative stable • Production curtailments in coal Non-Investmen
Slide 13: Significantly Enhanced Liquidity
Significantly Enhanced Liquidity Total Liquidity1 7 ~6.8 Credit Facilities Additional • No rating restrictions 6 1.5 Revolving • One financial covenant Credit Facility 5 C$ billion − 50% debt to debt+equity 4 Original − 32% currently 3.8 Revolving 3 • Minimal pricing grid impact Credit Facility • Eq
Slide 14: Near-Term Priorities
Near-Term Priorities • Focused on cost reductions and operating performance • Maintaining a strong financial position • Expect to achieve year-end cash balance of at least $1B1 14 1. Assumes current commodity prices, CAD$/USD$ exchange rate of 1.25 and Teck’s 2015 guidance for production, costs and
Slide 15: Second Quarter 2015 Results
Second Quarter 2015 Results July 23, 2015