14 slides from Teck Resources Limited Class A's earnings presentation, Apr 25, 2017
Slide 1: First Quarter 2017 Results
First Quarter 2017 Results April 25, 2017
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: First Quarter 2017 Highlights
First Quarter 2017 Highlights • Record coal sales in March • Adjusted EBITDA of $1.5B1,2 • Gross profit up >$1B1,3 • Repurchased ~US$1B notes outstanding • Fort Hills construction >83% complete • Reported annual zinc concentrate treatment charges decrease significantly in favour of miners 1. Non-GAA
Slide 4: Financial Results Overview
Financial Results Overview Q1 2017 Revenue $ 2.9 billion Gross profit $ 1.5 billion before depreciation & amortization* Profit $ 572 million attributable to shareholders EBITDA* $ 1.3 billion Adjusted EBITDA* $ 1.5 billion Adjusted profit $671 million attributable to shareholders* $1.16/share 4 *Non
Slide 5: Steelmaking Coal Quarterly Results
Steelmaking Coal Quarterly Results Sales (Mt) Realized Price (C$/tonne) Revenue (C$M) 0.6 181 1,001 6.5 283 5.9 1,666 102 665 Q1 2016 Q1 2017 Q1 2016 Q1 2017 Q1 2016 Q1 2017 Production (Mt) Unit Cost of Sales1,2 (C$/tonne) Gross Profit2,3 (C$M) 0.5 14 969 92 6.6 Total 78 6.1 1,128 36 Transport 34 In
Slide 6: Steelmaking Coal Price Assessments
Steelmaking Coal Price Assessments Coal Price Assessments Price Spike Q4 2016 • Price induced closures globally • Supply disruptions from weather Quarterly Contract 300 Settlement & temporary mine failures 270 Argus FOB Australia • Inventory build by mills due concern about supply disruptions 240 21
Slide 7: Copper Quarterly Results
Copper Quarterly Results Sales (kt) Realized Price (US$/lb) Revenue (C$M) 0.56 7% 17 81 2.67 513 479 64 2.11 Q1 2016 Q1 2017 Q1 2016 Q1 2017 Q1 2016 Q1 2017 Production (kt) C1 Unit Costs1,2 (US$/lb) Gross Profit2, 3 (C$M) 0.26 18 8% 82 1.55 195 64 180 1.29 Q1 2016 Q1 2017 Q1 2016 Q1 2017 Q1 2016 Q1
Slide 8: Zinc Quarterly Results
Zinc Quarterly Results Zinc Sales (kt) Zinc Realized Price (US$/lb) Revenue (C$M) Conc1 Refined 5 2 0.51 29% 120 1.26 715 115 78 76 554 0.75 Q1 2016 Q1 2017 Q1 2016 Q1 2017 Q1 2016 Q1 2017 Q1 2016 Q1 2017 Zinc Production (kt) Lead Production (kt) Gross Profit2 (C$M) Conc1 Refined Conc1 Refined 1 3 4
Slide 9: Fort Hills Project Status & Progress
Fort Hills Project Status & Progress • Construction >83% complete • 4 of 6 areas turned over to Operations • >60% operations personnel hired • First oil end of 2017 9 Source: Fort Hills Energy Limited Partnership, Fall 2016.
Slide 10: Quarterly Pricing Adjustments
Quarterly Pricing Adjustments Simplified Pricing Adjustment Model Quarterly Outstanding at Outstanding at Pricing Price Dec. 31, 2016 Mar. 31, 2017 Adjustments 100 Change Q4 2016 Pre-tax Settlement Adjustment (C$M) 50 Q3 2016 Q1 2017 Mlbs US$/lb Mlbs US$/lb US$/lb C$M Q1 2016 Q2 2014 Q3 2013 0 Q4 20
Slide 11: Cash Flow
Cash Flow Cash Changes in Q1 2017 1,511 77 3000 1,293 2500 2000 $ Millions $1,407 356 1500 152 176 1000 46 $536 500 0 Cash - start Cash flow from Proceeds from Repayment of PP&E, incl. Fort Capitalized Debt interest Other Cash - end of quarter operations sale of debt Hills stripping and finance of q
Slide 12: Achieved Significant Debt Reduction
Achieved Significant Debt Reduction Notes Outstanding 7.5 7.0 Current Debt Portfolio1 Public notes outstanding US$5.1B 6.5 Average coupon 5.7% 6.0 US$ Billion Annual interest savings ~US$55M Weighted average term to maturity ~15 years 5.5 Debt to debt-plus-equity ratio2 27% 5.0 Undrawn credit facili
Slide 13: Looking Forward
Looking Forward • Positive outlook for Q2 and beyond • Generating strong free cash flow • May continue to reduce debt opportunistically • First oil at Fort Hills in 8 months 13
Slide 14: First Quarter 2017 Results
First Quarter 2017 Results April 25, 2017