25 slides from Teck Resources Limited Class A's earnings presentation, Feb 9, 2011
Slide 1: Fourth Quarter 2010 Investor Conference Call and Webcast
Fourth Quarter 2010 Investor Conference Call and Webcast February 9, 2011
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: Speakers
Q4 Investor Conference Call Speakers D Don Li Lindsay d P President id t & CEO Ron Millos SVP Finance & CFO 4
Slide 5: 2010 Highlights
2010 Highlights Revenues up 22%, Op Profit up 30% Record Revenues $ 9,339 million Operating Profit $ 3,555 million E i Earnings $ 1,860 million (attributable to shareholders) EBITDA $ 4,297 million 5
Slide 6: 2010 Earnings
2010 Earnings Earnings per Share (C$) 3.00 $2.61 Adjusted Earnings +24% $2.11 2.00 2010 2009 Earnings ($millions) $1,543 $1,131 1.00 EPS - Basic $2.62 $2.12 Dil t d Diluted $2 61 $2.61 $2 11 $2.11 0.00 2010 2009 6
Slide 7: 4th Quarter 2010 Highlights
4th Quarter 2010 Highlights Revenues up 30%, Op Profit up 55% Revenues $ 2,809 million O Operating ti Profit P fit $ 1,204 1 204 million illi Earnings $ 361 million (attributable to shareholders) Adjusted Earnings (before pricing adjustments) $ 548 million EBITDA $ 1 1,030 030 million illi 7
Slide 8: 4th Quarter 2010 Highlights: Strong Business Fundamentals
4th Quarter 2010 Highlights Strong Business Fundamentals • Andacollo achieved commercial production • Premium P i coall contracted t t d ffor Q1 att ~US$225/t US$225/t • Repurchased US$0.9b high yield debt • 50% increase in semi-annual dividend • Updated Fort Hills development schedule 8
Slide 9: Comparative Earnings
Comparative Earnings ($ millions, net of taxes) Q4 '10 Q4 '09 Q3 '10 Earnings attributable to $ 361 $ 411 $ 331 Shareholders as Reported Asset Sales & Other (2) (137) (127) F/X (gains) losses on net debt (25) (35) (26) Derivative (gains) losses (86) (4) (51) Financing items & Impairment charges 289
Slide 10: Diversified Operating Profit
Diversified Operating Profit Q4 2010 – C$1,374 million Q4 2009 –C$945 million Copper Q UA RT E R Coal Coal Copper 33% 49% 39% 39% Zinc 18% Zinc 22% 2010 – C$4,409 C$4 409 million 2009 – C$3,337 C$3 337 million Copper Copper 31% Y EAA R Coal 33% 51% Coal 54% Zinc Zinc 16% 15% Operating Profit before
Slide 11: Q4 Guidance
Q4 Guidance Guidance met except for coal costs Red Dog zinc & lead sales 190 kt 216 kt Q4 2010 coal sales 5.8 to 6.6 Mt 6.0 Mt Coal pricing US $200/t to $205/t $200/t Coal costs ~C$59/t site, ~C$32/t tpt for 2010 X $91 vs. 90/t Settlement adjustments Positive 11
Slide 12: Coal
Coal Q4 Q4 Q3 Coal - Mt 2010 2009 2010 Production 6.0 5.4 5.5 Sales 6.0 5.4 5.5 Average Price (US$/t) 200 139 200 (C$/t) 204 151 208 Site Costs (C$/t) 54 52 62 Transportation Costs (C$/t) $ 35 30 33 Financial Results C$ millions Revenue 1,215 810 1,150 Operating Profit 679 372 622 (before depreciati
Slide 13: Copper
Copper Q4 Q4 Q3 2010 2009 2010 Copper in Concentrate (kt) Production1 60 53 44 Sales1 55 50 48 Copper Cathode (kt) Production 25 26 23 Sales 26 27 23 Moly M l in i Concentrate C t t (M lbs) lb ) Production 2.7 2.2 2.2 Sales 2.3 2.3 1.9 Financial Results C$ millions Revenue 852 664 639 Operating Prof
Slide 14: Zinc
Zinc Q4 Q4 Q3 Zinc in Concentrate (kt) 2010 2009 2010 Production 153 189 162 Sales 241 242 193 Refined Zinc (kt) Production 70 66 69 Sales 68 64 70 Lead in Concentrate (kt) Production 17 36 27 Sales 41 46 86 Refined Lead (kt) Production 13 16 17 Sales 13 17 16 Financial Results C$ millions Revenue 7
Slide 15: Fort Hills Update
Fort Hills Update Target for > 30 kbpd by 2016 • Teck 20% (Suncor 41%, Total 39%) – Managed by Suncor • ~3.4 Billion bbls bitumen resource * – ~50 year life Shell Pierre Rv. • 164,000 bpd * Phase 1 Equinox – ~11 million bpa Teck share Shell Pierre Total – Up to 320,000 bpd Phase 2 Rv. CNRL Fort Hill
Slide 16: Speakers
Q4 Investor Conference Call Speakers D Li Don Lindsay d P id t & CEO President Ron Millos SVP Finance & CFO 16
Slide 17: 4th Quarter 2010 - Cash Changes
4th Quarter 2010 g - Cash Changes $Millions C h Fl Cash Flow from f Operations O ti 900 Working Capital Changes 59 C it l E Capital Expenditures dit / IInvestments t t (309) Decrease in Debt (1,171) Non-controlling Interests (33) Exchange, Discontinued Ops & Other 209 Cash & STI Decrease 345 Cash at
Slide 18: Final Pricing Revenues
Final Pricing Revenues Outstanding from Q3 & Settled in Q4 Valued Settled Revenue Adj. (C$ M) M lbs US$/lb M lbs US$/lb Before Tax* After Tax* Copper 93 $3.65 81 $3.90 (23) Zinc 145 $0.99 136 $1.06 (7) Lead 72 $0 92 $0.92 72 $1 $1.08 08 (7) Total $37 $23 Adjustments on Settlements within Q3 $50 $31
Slide 19: 2011 Guidance
2011 Guidance Production Coal 24.5 to 25.5 M tonnes Copper 350,000 tonnes Zinc in Concentrate 620,000 tonnes Refined Zinc 285,000 285 000 tonnes 19
Slide 20: Q1 Guidance
Q1 Guidance Factors to consider • Red Dog sales zinc sales ~90 kt, lead ~0kt • Coal sales 5 5.0 0 to 5 5.5 5 Mt • Coal pricing US $206/t to $211/t • Coal costs ~C$59-63/t site, ~C$30-34/t tpt for 2010 • Settlement adjustments 20
Slide 21: Leverage to Strong Commodities
Leverage to Strong Commodities 2010 Adjusted EBITDA $4.0Bn 2010 avg EBITDA • Coal C l US $181/t $25 M / $1 ∆ • Copper pp US $3.42/lb $ $7 M / $.01 $ $0 ∆ • Zinc US $0.98/lb $10 M / $.01 ∆ • $C/$US $1.03 $80 M / $.01 ∆ Vo l u m e a n d c o s t c h a n g e s f r o m 2 0 1 0 n e e d t o b e t a k e n
Slide 22: Speakers
Q4 Investor Conference Call Speakers R Mill Ron Millos SVP Finance Fi & CFO Don Lindsay President & CEO 22
Slide 23: Project Developments
Project Developments • Quebrada Blanca Copper Concentrate ԟ Feasibility study expected early 2012 • Relincho Copper Mine ԟ Pre-feasibility P f ibilit study t d expected t d Q3 2011 • Galore Creek Copper Mine ԟ Pre-feasibility Pre feasibility expected Q2 2011 • Frontier / Equinox Oil Sands Mine Proje
Slide 24: Summary
Summary Strong g balance sheet Strong g cash flow Coal Production increasing Copper Production increasing Development Projects advancing 24
Slide 25: Fourth Quarter 2010 Investor Conference Call and Webcast
Fourth Quarter 2010 Investor Conference Call and Webcast February 9, 2011