27 slides from Teck Resources Limited Class A's earnings presentation, Apr 21, 2010
Slide 1: First Quarter 2010 Investor Conference Call and Webcast
First Quarter 2010 I Investor t C Conference f Call C ll andd W Webcast b t April p 21,, 2010
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: Q1 Investor Conference Call Speakers
Q1 Investor Conference Call • Speakers D Don Li Lindsay d P President id t & CEO John Gingell Controller Scott Wilson Treasurer 4
Slide 5: 1st Quarter 2010 Highlights
1st Quarter 2010 Highlights • Revenues $1,900 million • Operating Profit $844 million (before Depreciation & amortization) • Earnings (attributable to shareholders) $908 million • EBITDA $1,511 million • Andacollo first concentrate production • Coal C l contracted t t d ffor Q2 att ~US$200/t US$200/
Slide 6: 1st Quarter 2010 Highlights cont'd
1st Quarter 2010 Highlights cont cont’d d • Asset Sale Program Completed – Waneta 1/3rd interest – Andacollo gold royalty interest – Gold properties in Turkey Total asset sale program ~5% of assets • Net Debt to Net Debt Plus Equity 25% 6
Slide 7: Acquisition Debt
Acquisition Debt US$ Billions 10 Acquisition q Debt of US$9.8 Billion repaid, 8 and total debt reduced 6 by C$8.1 C$8 1 billion, billion in 18 months. 4 2 0 Oct 31 Dec 31 Mar 31 Jun 30 Sep 30 Dec 31 Mar 31 Apr 22 2008 2008 2009 2009 2009 2009 2010 2010 T Term Debt D bt B id D Bridge Debt bt 7
Slide 8: 1st Quarter 2010 Earnings
1st Quarter 2010 Earnings Earnings attributable to Shareholders Earnings per Share (C$) 2.00 $1.54 Q1 Q1 Q4 1.50 2010 2009* 2009 Earnings $908 $241 $411 1.00 ($millions) $0.50 EPS $1.54 $0.50 $0.70 0.50 0.00 2010 2009 *Q1 2009 restated to account for Pogo and Hemlo as discontinued operations 8
Slide 9: Comparative Earnings
Comparative Earnings ($ millions, net of taxes) Q1 ‘10 Q1 ‘09 Q4 '09 Earnings as Reported $908 $241 $411 Asset Sales & Other (639) (168) (137) F/X (gains) ( i ) llosses on nett d debt bt (50) 203 (35) Derivative (gains) losses (32) 24 (4) Financing items & Impairment charges 23 – 72 Tax Items – (30)
Slide 10: Q1 Guidance
Q1 Guidance Factors to consider • Seasonality in zinc sales • Weather impacts on coal shipments • 2009 contract year coal pricing • Copper C production d ti and d costs t att HVC & CdA • Settlement adjustments – potentially negative • Power sales at Trail 10
Slide 11: Earnings Seasonality
Earnings Seasonality Average Earnings* Distribution 2005 to 2009 30% 25% 20% 15% 10% 5% 0% Q1 Q2 Q3 Q4 * Net earnings before asset impairment charges 11
Slide 12: Diversified Operating Profit Q1 2010
Diversified Operating Profit Q1 2010 – C$835 million Coal 38% Copper 44% Zinc 18% Operating Profit before Depreciation & Pricing Adjustments 12
Slide 13: Quarterly Average Prices
Quarterly Average Prices US$ CDN$ Q1 ‘10 Q1 ‘09 Q1 ‘10 Q1 ‘09 Copper ($/lb) $3 29 $3.29 $1 56 $1.56 $3 42 $1.93 $3.42 $1 93 +77% Zinc ($/lb) $1.04 $0.53 $1.08 $0.66 +64% Lead ($/lb) $1 01 $1.01 $0 53 $0.53 $1 05 $0.66 $1.05 $0 66 +59% Coal ($/t) $ 140 $ 204 $ 150 $ 237 - 37% CAD / USD $1 04 $1.04 $1
Slide 14: Coal
Coal Q1 Q1 Q4 2010 2009 2009 Coal – Mt Production 5.7 4.0 5.4 Sales 5.3 3.7 5.4 Average Price (US$/t) 140 204 139 (C$/t) 150 237 151 Cash 55 Site Costs (C$/t) Inv 6 61 61 52 Transportation Costs (C$/t) 30 36 30 Financial Fi i lRResults lt C$ millions illi Revenue 790 874 810 Operating Profit 313 519
Slide 15: Copper
Copper Q1 Q1 Q4 Copper in Concentrate (kt) 2010 2009 2009 Production 47 48 53 Sales 43 57 50 Copper Cathode (kt) Production 25 27 26 Sales 28 27 27 Moly in Concentrate (M lbs) Production 2.1 1.9 2.2 Sales 1.9 1.9 2.3 Financial Results C$ millions Revenue 620 447 664 Operating Profit 367 168 368 (Bef
Slide 16: Zinc
Zinc Q1 Q1 Q4 2010 2009 2009 Zinc in concentrate – kt Production 163 167 189 Sales 161 130 242 Refined Zinc – kt Production 68 58 66 Sales 66 57 64 Lead in Concentrate – kt Production 35 33 36 Sales - 1 46 Refined Lead – kt Production 22 19 16 18 17 17 S l Sales Financial Results C$ millions Revenue
Slide 17: Q1 Investor Conference Call Speakers
Q1 Investor Conference Call • Speakers D Li Don Lindsay d P id t & CEO President John Gingell Controller Scott Wilson Treasurer 17
Slide 18: 1st Quarter 2010 - Cash Changes
1st Quarter 2010 - Cash Changes $Millions Cash Flow from Operations 412 Working Capital Changes 68 Capital Expenditures / Investments (151) Restricted Cash Decrease 91 Proceeds from Asset Sales 1 082 1,082 Repayment of Debt (2,019) Non controlling Interests Non-controlling (13) Exchange, Discontinue
Slide 19: Final Pricing Revenues
Final Pricing Revenues Outstanding from Q4 & Settled in Q1 Valued Settled Revenue Adj. (C$ M) M lbs US$/lb M lbs US$/lb Before Tax* After Tax* Copper 107 $3.34 96 $3.29 (5) Zinc 221 $1.17 221 $1.07 (11) Lead 31 $1 09 $1.09 31 $0.99 $0 99 (2) Other 0 Total ($18) ($12) Adjustments on Settlements withi
Slide 20: Q2 Guidance
Q2 Guidance Factors to consider • Seasonality in Red Dog sales and costs • Coal sales 6.0 6 0 to 6.5 6 5 Mt Q2 • Coal pricing US $180/t to $185/t Q2 • Coal C l costst ~C$55/t C$55/t site, it ~C$33/t C$33/t ttptt ffor 2010 • Copper production and costs at HVC & CdA • Settlement adjustments – potentia
Slide 21: Q1 Investor Conference Call Speakers
Q1 Investor Conference Call • Speakers D Li Don Lindsay d P id t & CEO President John Gingell Controller Scott Wilson Treasurer 21
Slide 22: Debt Position
Debt Position Pro-forma Millions Dec 31, 2009 Apr 22, 2010 Cash (C$ millions) 1,420 400 Term Loan US$ 2,325 - Fixed Rate Notes 5,086 5,089 Other 205 197 Total Debt US$ 7,616 5,286 C$ Equivalent 8,004 5,370 Debt to Debt plus Equity 36% 26% N tD Net Debt bt tto N Nett D Debt bt plus l E Equity it 31%
Slide 23: Credit Ratings
Credit Ratings S&P Moody’s Moody s Fitch DBRS BBB Baa2 BBB, BBB stable stable Investment BBB- Baa3 BBB-, BBB (low) Grade stable positive BB+ Ba1 BB+ BB (high) positive ii Non- Non Investment BB Ba2 BB BB Grade April 16, 2010 S&P revised from BB+ to BBB April 15, 2010 DBRS revised from BB (high) BBB
Slide 24: Q1 Investor Conference Call Speakers
Q1 Investor Conference Call • Speakers S tt Wilson Scott Wil T Treasurer Don Lindsay President & CEO 24
Slide 25: Red Dog Permitting
Red Dog Permitting • EPA approved Aqqaluk SEIS and issued NPDES permitit • Permits appealed • Conditions in new permit withdrawn • Corresponding conditions in existing permit remain i effect in ff t • Existing permit conditions for TDS can not be met • EPA intend to reissue new permit conditions 25
Slide 26: Summary
Summary Debt reduced and target g debt ratio achieved Investment Grade credit ratings established Coal Production and pricing increasing Copper Production increasing Development Projects advancing 26
Slide 27: First Quarter 2010 Investor Conference Call and Webcast
First Quarter 2010 I Investor t C Conference f Call C ll andd W Webcast b t April p 21,, 2010