22 slides from Teck Resources Limited Class A's earnings presentation, Feb 11, 2016
Slide 1: Fourth Quarter & Full Year 2015 Results
Fourth Quarter & Full Year 2015 Results February 11, 2016
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: Plan to Navigate an Extended Low Price Environment & Emerge Stronger
Plan to Navigate an Extended Low Price Environment & Emerge Stronger • Continuing to deliver excellent operating execution − Reduced our cash unit costs at all operations in 20151 − All major operating mines cash flow positive after sustaining capex2 • Finish building Fort Hills − >50% complete; on
Slide 4: Overview of Full Year 2015 Results
Overview of Full Year 2015 Results Revenue $ 8.3 billion Gross profit $ 2.6 billion (before depreciation & amortization) Profit (loss) ($ 2.5 billion) (attributable to shareholders) Impairment charges ($ 2.7 billion) (after-tax basis) EBITDA before impairments $ 2.0 billion Adjusted profit* $ 188 mi
Slide 5: Solid Delivery Against 2015 Guidance
Solid Delivery Against 2015 Guidance Guidance Results Steelmaking Coal Production1 25-26 Mt 25.3 Mt Site costs C$49-53/t C$45/t Transportation costs C$37-40/t C$36/t C$83/t Combined costs2 C$86-93 /t US$64/t Lower unit costs at all mines Copper Production 340-360 kt 358 kt Record mill thro
Slide 6: Significant Unit Cost Reductions
Significant Unit Cost Reductions Unit costs reduced at all of our operations1 Unit Cost of Sales (US$/tonne)2 Total Cash Costs (US$/tonne)2 Steelmaking Coal2 24% 23% Unit Cost of Sales 84 Total 99 down US$20/t 64 Transport 35 76 Capitalized 28 15 Stripping 3 12 Total Cash Costs Inventory 46 1 35 dow
Slide 7: Core Business Free Cash Flow
Core Business Free Cash Flow1 Free Cash Flow, Before Fort Hills Capital 200 100 C$ Millions - (100) Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Cost management delivered improvements in Free Cash Flow, despite a weakening price environment 1. Free Cash Flow is Net Cash from Operations, before ch
Slide 8: The Value of Our Diversified Business Model
The Value of Our Diversified Business Model Cash Operating Profit 2015 2016 Leverage to Commodities & FX Production Unit of Estimated Estimated Guidance1 Change Profit 2 EBITDA2 $C/$US C$0.01 $22M /$.01∆ $34M /$.01∆ Copper Base 35% Coal Metals Coal 25.5 Mt US$1/tonne $23M /$1∆ $35M /$1∆ ~30% ~70% Zi
Slide 9: Overview of Fourth Quarter 2015 Results
Overview of Fourth Quarter 2015 Results Revenue $ 2.1 billion Gross profit $614 million (before depreciation & amortization) Profit (loss) ($459 million) (attributable to shareholders) Impairment charges ($536 million) (after-tax basis) EBITDA before impairments $467 million Adjusted profit* $ 16 mi
Slide 10: Steelmaking Coal Quarterly Results
Steelmaking Coal Quarterly Results Sales (Mt) Realized Price (C$/tonne) Revenue (C$M) flat 12% 15% 6.5 6.5 123 824 108 701 Q4 2014 Q4 2015 Q4 2014 Q4 2015 Q4 2014 Q4 2015 Production (Mt) Unit Cost of Sales1 (C$/tonne) Gross Profit2 (C$M) 0.4 14% 16% Total 91 78 234 6.8 6.4 Transport 39 197 35 Invent
Slide 11: Copper Quarterly Results
Copper Quarterly Results Sales (kt) Realized Price (US$/lb) Revenue (C$M) 26% 6% 19 656 105 2.98 619 86 2.21 Q4 2014 Q4 2015 Q4 2014 Q4 2015 Q4 2014 Q4 2015 Production (kt) C1 Unit Costs1 (US$/lb) Gross Profit2 (C$M) 19% xx% 26% 13 1.69 274 96 83 1.37 203 Q4 2014 Q4 2015 Q4 2014 Q4 2015 Q4 2014 Q4 2
Slide 12: Zinc Quarterly Results
Zinc Quarterly Results Zinc Sales (kt) Zinc Realized Price (US$/lb) Revenue (C$M) Conc1 Refined 43 6 28% 5% 1.04 222 775 814 79 179 73 0.75 Q4 2014 Q4 2015 Q4 2014 Q4 2015 Q4 2014 Q4 2015 Q4 2014 Q4 2015 Zinc Production (kt) Lead Production (kt) Gross Profit2 (C$M) Conc1 Refined Conc1 Refined 10 6 1
Slide 13: Fort Hills Project Status & Progress
Fort Hills Project Status & Progress Project Progress >95% Engineering complete approximate as at December 2015 construction has surpassed the midway point and the project continues to track positively within schedule expectations >50% Construction complete approximate as at December 2015 Capital Ex
Slide 14: Quarterly Pricing Adjustments
Quarterly Pricing Adjustments • Negative pricing adjustments Simplified Pricing Adjustment Model of $63M in Q4 2015 100 Q1 2012 • Driven by quarterly change Pre-tax Settlement Adjustment (C$M) in key commodity prices 50 Q3 2012 Q2 2014 Q3 2013 Q2 2011 0 Q4 2012 Q4 2013 Q1 2013 Q4 2011 Quarterly Q2 2
Slide 15: 2016 Production & Site Cost Guidance
2016 Production & Site Cost Guidance 2015 Results 2016 Guidance Steelmaking Coal Production 25.3 Mt 25-26 Mt Site costs $45/t $45-49/t Capitalized stripping $16/t $11/t1 Transportation costs $36/t $35-37/t Total cash costs2 $99/t $91-97/t US$76/t US$65-69/t Copper Production 358 kt 305-320 kt C1 uni
Slide 16: 2016 Capital Expenditures Guidance
2016 Capital Expenditures Guidance Major New Mine Capitalized ($M) Sustaining Enhancement Development Sub-total Stripping Total Coal $50 $40 $ - $90 $290 $380 Copper 120 5 80 205 190 395 Zinc 130 10 - 140 60 200 Energy 5 - 1,000 1,005 - 1,005 TOTAL $305 $55 $1,080 $1,440 $540 $1,980 2015A $397 $64 $
Slide 17: Long-Dated Debt Maturity Profile
Long-Dated Debt Maturity Profile $3,000 $2,750 • No debt due until 2017 $2,500 − Weighted average maturity ~14 years $2,250 − Weighted average coupon (interest rate) ~4.8% $2,000 − Average maturity <US$600M $1,750 • Debt to debt-plus-equity ratio 37%1 US$M $1,500 $1,250 2017 $1,000 Q1: US$300M Q3: U
Slide 18: Cash Flow
Cash Flow Cash Changes in Q4 2015 $79 $532 3500 $687 $446 3000 $831 $176 2500 $29 $14 $ Millions $1,887 2000 $1,487 1500 1000 500 0 Cash - start of Proceeds from Cash flow from Effect of FX PP&E, incl. Debt interest, Capitalized Dividends paid Expenditures Cash - end of quarter sale of operations &
Slide 19: Strong Cash Balance
Strong Cash Balance Cash Balance Improvement Relative to Original Guidance 2500 $1,100 $1,887 2000 $ Millions 1500 $259 $1,000 $406 $144 1000 $100 $208 500 0 Original Guidance Lower Prices & Repayed Debt Cost Management Cut Capex Reduced the Proceeds from Cash Balance FX vs. Start of From Cash Progr
Slide 20: Substantial Credit Facilities
Substantial Credit Facilities1 Letters of Letters of Total Amount Commitment Maturity Credit Limit Credit Drawn Available (M) ($M) ($M) ($M) US$3,000 Committed July 2020 US$1,000 Undrawn US$3,000 US$1,200 Committed June 2017 None US$740 US$460 Expect to keep available for letter of credit requiremen
Slide 21: Near-Term Priorities
Near-Term Priorities • Keeping operations cash flow positive • Funding Fort Hills from internal sources • Maintaining a strong financial position − Target for US$3B credit facility to remain undrawn in 2016 − Expect year-end cash balance of >$500M1 • Evaluating opportunities to further strengthen li
Slide 22: Fourth Quarter & Full Year 2015 Results
Fourth Quarter & Full Year 2015 Results February 11, 2016