25 slides from Teck Resources Limited Class A's earnings presentation, Jul 23, 2009
Slide 1: 2nd Quarter 2009 Investor Conference Call and Webcast
2nd Quarter 2009 Investor Conference Call and Webcast July 23, 2009
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
Q2 Investor Conference Call • Speakers Don Lindsay President & CEO Ron Millos SVP Finance & CFO 4
Slide 5: Corporate Developments: Refinancing Achievements
Corporate Developments Refinancing Achievements • Debt Amendment April 22nd • US$4.225 billion Notes Issue May 5th • C$825 million sale of 1/3rd of Waneta Dam • US$1.5 billion Equity Issue July 3rd 5
Slide 6: Corporate Developments cont'd: Gold Asset Sales
Corporate Developments cont’d Gold Asset Sales (gross proceeds) • Hemlo Sold - US$65 million – closed • Pogo Sold US$245 million – closed • Andacollo Gold stream Sold ~US$238 million – Q3 close expected 6
Slide 7: Corporate Developments cont'd: Gold Asset Sales
Corporate Developments cont’d Gold Asset Sales • Morelos Offers received Advanced discussions underway • Turkey Exploration Strong expressions of interest Indicative offers received Discussions with potential purchasers underway 7
Slide 8: 2nd Quarter 2009 & Recent Highlights
2nd Quarter 2009 & Recent Highlights • Net Earnings $570 million • Operating Profit before D&A $841 million • Bridge Debt Eliminated – Original amount $5.8 billion • Term Debt reduced to US$2.74 billion – Original amount $4.0 billion • Cash Balance $750 million 8
Slide 9: 2nd Quarter 2009 Earnings
2nd Quarter 2009 Earnings* Q2 Earnings per Share (C$) 1.50 Q2 Q2** Q1** 2009 2008 2009 1.00 Net Earnings* $521 $500 $224 ($millions) $1.07 $1.12 0.50 EPS $1.07 $1.12 $0.46 0.00 2009 2008 *Net Earnings from Continuing Operations **Restated to account for Pogo and Hemlo as discontinued operations 9
Slide 10: Comparative Earnings
Comparative Earnings ($ millions, net of taxes) Q2 '09 Q2 '08 Q1 '09 Earnings as Reported $570 $497 $241 (Earnings) loss from discontinued Ops (49) 3 (17) Derivative (gains) losses 31 (12) 26 Asset Sales & Other (13) (4) (168) F/X Gains (413) - 203 Debt Refinancing & Impairment Charges 87 12 - Tax I
Slide 11: Quarterly Average Prices
Quarterly Average Prices US$ CDN$ Q2 '09 Q2 '08 Q2 '09 Q2 '08 Copper ($/lb) $2.12 $3.83 $2.48 $3.87 - 36% Zinc ($/lb) $0.67 $0.96 $0.78 $0.97 - 20% Lead ($/lb) $0.68 $1.05 $0.80 $1.06 - 39% Coal ($/t) $ 165 $ 204 $ 191 $ 207 - 8% CAD / USD $1.17 $1.01 Zinc, Copper & Lead are LME market prices Coal i
Slide 12: Quarterly Metal Prices
Quarterly Metal Prices Copper – LME Stocks & Price 250 550 Stocks Qtr end $2.32 Price 500 230 Qtr avg $2.12 450 210 400 Lead – LME Stocks & Price 350 90 100 Stocks 190 Price Qtr end $0.78 300 90 Qtr open $1.80 80 170 250 Qtr avg $0.68 80 Apr May Jun 70 70 Zinc – LME Stocks & Price 60 80 360 60 Stock
Slide 13: Coal
Coal Q2 Q2 Q1 2009 2008 2009 Coal – Mt * Production 4.3 3.4 4.0 Sales 5.0 3.4 3.7 Average Price (US$/tonne) 165 204 204 (C$/tonne) 191 207 237 C$ millions Financial Results Revenue 954 544 874 Operating Profit 515 322 519 (Before Depreciation) * Direct and indirect shares. Prior to October 30th 2008
Slide 14: Coal Rail Rates
Coal Rail Rates • FOA • Lower rates • No coal price link • Interchange at Kamloops • 2009 Coal Year total tpt $31-$33/t 14
Slide 15: Copper
Copper Q2 Q2 Q1 Copper in Concentrate– kt 2009 2008 2009 Production 52 53 48 Sales 40 54 57 Copper Cathode – kt Production 26 27 27 Sales 18 27 27 Moly in Concentrate – M lbs Production 1.8 1.7 1.9 Sales 1.8 2.2 1.8 Financial Results C$ millions Revenue 408 773 447 Operating Profit 187 523 168 (Befo
Slide 16: Andacollo Concentrate Project
Andacollo Concentrate Project 16
Slide 17: Zinc
Zinc Q2 Q2 Q1 2009 2008 2009 Zinc in concentrate – kt Production 173 171 167 Sales 118 120 130 Refined Zinc – kt Production 60 61 58 Sales 63 69 57 Lead in Concentrate – kt Production 31 35 33 Sales 0 5 1 Refined Lead – kt Production 19 20 19 20 21 17 Sales Financial Results C$ millions Revenue 345
Slide 18: Speakers
Q2 Investor Conference Call • Speakers Don Lindsay President & CEO Ron Millos SVP Finance & CFO 18
Slide 19: Debt Position
Debt Position at July 22nd, 2009 US$ Millions Bridge Debt 0 Term Debt 2,744 2009 Bond Issue 4,225 Pre-2009 Bonds 1,200 Antamina credit facility 94 Other 118 Unamortized discount and issue costs (430) Total Debt 7,951 Net Debt to Net Debt Plus Equity ~ 37% 19
Slide 20: 2nd Quarter 2009 - Cash Changes
2nd Quarter 2009 - Cash Changes $Millions Cash Flow from Operations 421 Working Capital Changes (47) Repayment of Debt (net) (1,210) Capital Expenditures (148) Investments (72) Proceeds from Asset Sales 132 Exchange, Discontinued Ops & Other 42 Cash & STI Decrease (882) 20
Slide 21: Final Pricing Revenues
Final Pricing Revenues Outstanding from Q1 & Settled in Q2 Valued Settled Revenue Adj. (C$ M) M lbs US$/lb M lbs US$/lb Before Tax* After Tax* Copper 113 $1.83 96 $2.11 28 Zinc 95 $0.60 95 $0.65 4 Lead 0 n/a 0 n/a 0 Other 1 Total $33 $21 Adjustments on Sales within Q2 $27 $15 Total Final Pricing Adj
Slide 22: Hedges & Tax Refund
Hedges & Tax Refund Currency • US$840 million @ C$1.13 / $US thru Q1 2010 Copper • 16 million pounds at June 30th at US$2.05/lb maturing in July 2009 Tax Refund • $1,085 million received to date, $15 million to come 22
Slide 23: Speakers
Q2 Investor Conference Call • Speakers Ron Millos SVP Finance & CFO Don Lindsay President & CEO 23
Slide 24: Summary
Summary • Strong asset base and cash flow generation • Asset sale processes nearly complete • Debt re-scheduled, significantly reduced and/or refinanced • Balance sheet strength being restored • Focused on continuing debt reduction • Targeting Investment Grade • Advancing organic growth projects 24
Slide 25: 2nd Quarter 2009 Investor Conference Call and Webcast
2nd Quarter 2009 Investor Conference Call and Webcast July 23, 2009