25 slides from Teck Resources Limited Class A's earnings presentation, Oct 25, 2018
Slide 1: Third Quarter 2018 Results
Third Quarter 2018 Results October 25, 2018
Slide 2: Caution Regarding Forward-Looking Statements
Caution Regarding Forward-Looking Statements 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 Securit
Slide 3: Highlights From Q3 2018
Highlights From Q3 2018 Received regulatory approval for QB2 Completed the Waneta Dam sale for $1.2B cash Purchased US$1.0B of our near-term debt maturities Received regulatory approval to renew our NCIB (up to 40M shares) Named to the 2018 Dow Jones Sustainability World Index 3
Slide 4: Quarterly Earnings
Quarterly Earnings Q3 2018 Q3 2017 Revenue $ 3.2 billion $ 3.1 billion Gross profit before depreciation & amortization1 $ 1.4 billion $ 1.5 billion Gross profit $ 1.0 billion $ 1.1 billion Adjusted EBITDA1 $ 1.2 billion $ 1.4 billion Profit attributable to shareholders $ 1.3 billion $ 584 million Ad
Slide 5: Earnings Adjustments in Q3 2018
Earnings Adjustments in Q3 2018 $/share $M (diluted) Profit attributable to shareholders $ 1,281 Add (deduct): Debt purchase (gains) losses 19 Debt prepayment option (gains) losses (17) Asset sales & provisions (812) Foreign exchange (gains) losses (6) Collective agreement charges 1 Adjusted profit
Slide 6: Steelmaking Coal Business Unit
Steelmaking Coal Business Unit Q3 2018: Steelmaking Coal Prices2 300 • Generated significant cash flow based on continued 250 solid operating performance US$/tonne 200 150 • Strong sales; deliveries negatively impacted by 100 50 operating problems at Westshore Terminals • Higher site costs reflect d
Slide 7: Copper Business Unit
Copper Business Unit Q3 2018: Cash Costs (US$/lb) • Received regulatory approval for the QB2 project in Net Cash Costs Up US$0.02/lb3 August 1.66 1.75 • Lower mill throughput and grades at Highland Valley, 0.39 0.46 as anticipated 1.27 1.29 • Carmen de Andacollo set a new monthly record for mill thr
Slide 8: Zinc Business Unit
Zinc Business Unit Q3 2018: Net Cash Unit Costs3 (US$/lb) • Red Dog sales of zinc in concentrate were 9.5 kt below Up US$0.09/lb guidance due to timing of sales and shipments • Trail impacted by lower prices and shutdowns $0.07 $(0.02) Looking Forward • Expect Red Dog contained zinc sales of 180 kt
Slide 9: Energy Business Unit
Energy Business Unit Q3 2018: • Fort Hills continuing to ramp up towards nameplate capacity • Mine production impacted by unusually wet weather in July; plant production impacted by planned maintenance in late September • Frontier hearing commenced September 25th Looking Forward • Full production at
Slide 10: Cash Flow
Cash Flow Cash Changes in Q3 2018 4000 1,196 (1,334) 3500 3000 882 (397) $ Millions 2500 (162) (140) 2000 1,631 (133) (29) (31) 1,483 1500 1000 500 0 Cash - start Cash flow Proceeds Repurchase PP&E Capitalized Expenditures Debt interest Dividends Other Cash - end of quarter from from the sale and st
Slide 11: Solid Financial Position
Solid Financial Position Debt Maturity Profile2 1,200 • >$5.7B of liquidity1 1,000 US$M • Includes $1.2B cash from closing of the Waneta Dam 800 transaction in July 600 • Reflects the purchase of US$1.0B of public notes 400 outstanding in August 200 0 ‒ Currently no significant debt maturities prior
Slide 12: Looking Forward
Looking Forward Multiple catalysts / valuation milestones Fort Hills Zafranal • Full production in Q4 2018 • Feasibility Study completion in Q1 2019 Quebrada Blanca 2 NuevaUnión • Partnership transaction targeted for Q4 2018 • Feasibility Study completion by Q3 2019 • Sanctioning decision possible i
Slide 13: Appendix
Appendix Teck
Slide 14: Other Operating Income (Expense)
Other Operating Income (Expense) Simplified Settlement Pricing Adjustment Model Simplified Compensation Expense Model Pre-Tax Share-Based Compensation Income (Expense) (C$M) Pre-tax Settlement Pricing Adjustment (C$M) Share-Based Outstanding at Outstanding at Quarterly Pricing Closing Price Closing
Slide 15: Notes
Notes Slide 4: Quarterly Earnings 1. Gross profit before depreciation and amortization, adjusted EBITDA, adjusted profit attributable to shareholders, adjusted basic earnings per share and adjusted diluted earnings per share are non-GAAP financial measures. See “Non-GAAP Financial Measures” slides a
Slide 16: Notes
Notes Slide 8: Zinc Business Unit 1. Metal contained in concentrate. 2. We include 22.5% of production and sales from Antamina, representing our proportionate equity interest in Antamina. Total zinc production and sales include co-product zinc production and zinc from our Copper business unit. 3. Zi
Slide 17: Notes
Notes Slide 11: Solid Financial Position 1. As at October 24, 2018. Assumes a C$/US$ exchange rate of $1.30. 2. Public notes outstanding as at September 30, 2018. 3. Net debt/net debt-plus-equity for Diversified Peers and North American Peers are unweighted averages based on data reported by Capital
Slide 18: Non-GAAP Financial Measures
Non-GAAP Financial Measures EBITDA is profit attributable to shareholders before net finance expense, income and resource taxes, and depreciation and amortization. Adjusted EBITDA, as disclosed on slide 4 is EBITDA before the pre-tax effect of certain types of transactions that in our judgment are n
Slide 19: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of Basic Earnings Per Share Reconciliation of EBITDA and Adjusted EBITDA to Adjusted Basic Earnings Per Share Nine months ended Nine months ended (C$ in millions) September 30, 2018 (C$ in millions) September 30, 2018 Earnings per share $ 4.66 Profit attrib
Slide 20: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of Net Debt-to-Adjusted EBITDA Ratio & Net Debt-to-Debt-Plus-Equity Ratio (A) (B) (C) (A-B+C) Twelve months ended Nine months ended Nine months ended Twelve months ended (C$ in millions) December 31, 2017 September 30, 2017 September 30, 2018 September 30,
Slide 21: Non-GAAP Financial Measures
Non-GAAP Financial Measures Steelmaking Coal Unit Cost Reconciliation Nine months ended (C$ in millions, except where noted) September 30, 2018 Cost of sales as reported $ 2.454 Less: Transportation (720) Depreciation and amortization (549) Adjusted cash cost of sales $ 1,185 Tonnes sold (millions)
Slide 22: Non-GAAP Financial Measures
Non-GAAP Financial Measures Copper Unit Cost Reconciliation Nine months ended Nine months ended (C$ in millions, except where noted) September 30, 2018 September 30, 2018 Revenue as reported $ 2,081 US$ AMOUNTS By-product revenue (A)1 (361) Average exchange rate (C$/US$) $ 1.29 Smelter processing ch
Slide 23: Non-GAAP Financial Measures
Non-GAAP Financial Measures Zinc Unit Cost Reconciliation (Mining Operations)1 Nine months ended Nine months ended (C$ in millions, except where noted) September 30, 2018 (C$ in millions, except where noted) September 30, 2018 Revenue as reported $ 2,274 Payable pounds sold (millions) (C) 687.8 Less
Slide 24: Non-GAAP Financial Measures
Non-GAAP Financial Measures Energy Operating Netback Reconciliation1 Nine months ended Nine months ended (C$ in millions, except where noted) September 30, 2018 September 30, 2018 Revenue as reported $ 287 Per barrel amounts (C$/barrel)2 Less: Bitumen price realized (A/B) $ 56.47 Cost of diluent for
Slide 25: Third Quarter 2018 Results
Third Quarter 2018 Results October 25, 2018