18 slides from Teck Resources Limited Class A's earnings presentation, Oct 22, 2015
Slide 1: Third Quarter 2015 Results
Third Quarter 2015 Results October 22, 2015
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: Responding to Difficult Market Conditions
Responding to Difficult Market Conditions • Further cost reductions achieved & focus on resetting our cost base − Gross profit1 up 5% in steelmaking coal • ~C$1B in cash generated via two precious metal streaming agreements • Strong financial position, with a current cash balance2 of ~$1.8B − Exceed
Slide 4: Quarterly Results Q3 2015
Quarterly Results Q3 2015 Revenue $ 2.1 Billion Gross profit $ 670 Million (before depreciation & amortization) Adjusted EBITDA* $ 389 Million Adjusted profit* $ 29 Million (attributable to shareholders) $0.05/share 4 * Non-GAAP financial measure. See ‘Use of Non-GAAP Financial Measures’ in news rel
Slide 5: Q3 2015 Operational Highlights
Q3 2015 Operational Highlights Change To Production Q3 2015 Q3 2014 Steelmaking coal (Mt) 5.5 ▼ 1.3 Coal unit costs1 Copper (kt) 88 ▲ 10 US$64/t Zinc in concentrate4 (kt) 155 ▼ 14 Reduction of US$20/t2 Zinc – refined (kt) 78 ▲ 8 Steelmaking Coal Unit Costs1 Copper Total Cash Unit Costs1,3 Copper cas
Slide 6: Steelmaking Coal
Steelmaking Coal Sales (Mt) Realized Price (C$/tonne) Revenue (C$M) 0.5 3% 10% 6.7 119 116 798 6.2 719 Q3 2014 Q3 2015 Q3 2014 Q3 2015 Q3 2014 Q3 2015 Production (Mt) Unit Costs1 (C$/tonne) Gross Profit2 (C$M) 8% 91 84 5% 3 1.3 Inventory 3 6.8 38 199 5.5 Transport 36 189 Site 50 45 Q3 2014 Q3 2015 Q
Slide 7: Copper
Copper Sales (kt) Realized Price (US$/lb) Revenue (C$M) 2 8% 24% 3.17 628 82 84 576 2.42 Q3 2014 Q3 2015 Q3 2014 Q3 2015 Q3 2014 Q3 2015 Production (kt) Total Cash Unit Costs1 (US$/lb) Gross Profit2 (C$M) 10 xx% 12% 88 292 31% 78 1.64 1.44 201 Q3 2014 Q3 2015 Q3 2014 Q3 2015 Q3 2014 Q3 2015 Total ca
Slide 8: Zinc
Zinc Zinc Sales (kt) Zinc Realized Price (US$/lb) Revenue (C$M) Conc1 Refined 2% 15% 11 8 1.04 823 805 0.88 194 78 183 70 Q3 2014 Q3 2015 Q3 2014 Q3 2015 Q3 2014 Q3 2015 Q3 2014 Q3 2015 Zinc Production (kt) Lead Production (kt) Gross Profit2 (C$M) Conc1 Refined Conc1 Refined flat 2 1 8 270 270 10 24
Slide 9: Fort Hills Project Status & Progress
Fort Hills Project Status & Progress Project Progress 94% Engineering complete approximate as at October 2015 continues to track positively within schedule expectations 43% Construction complete approximate as at October 2015 Capital Expenditures1 continues to track positively within $2.94B Teck’s s
Slide 10: Cash Flow
Cash Flow Cash Changes1 $789 $400 2500 $560 $349 $26 $327 $201 2000 $146 ~$1,850 $86 $55 $1,487 1500 $1,327 $ Millions 1000 500 0 Cash - start of Cash flow from PP&E, incl. Fort Capitalized Proceeds from Debt interest, Dividends paid Distributions to Cash - quarter Antamina silver Debt repayment Oth
Slide 11: Pricing Adjustments
Pricing Adjustments • Negative pricing adjustments of $141M in Q3 2015 Simplified Pricing Adjustment Model • Driven by quarterly change 100 Q1 2012 in key commodity prices Pre-tax Settlement Adjustment (C$M) • Weighted to larger volumes for 50 Q3 2012 Q2 2014 most of the quarter Q2 2011 Q3 2013 0 Q4
Slide 12: Asset Impairment Charges
Asset Impairment Charges Total Asset Impairment Charges (Before Tax) : ~$2.9B 2020 Key Assumptions 2016 (Real) Steelmaking coal 96 130 price (US$/tonne) Copper price 2.50 3.00 (US$/lb) Zinc price (US$/lb) 0.85 1.00 Oil price – WTI 75.00 (US$/bbl) Steelmaking Coal Operations $ 1,987 Exchange rate Ene
Slide 13: Credit Ratings
Credit Ratings Supported by: S&P Moody’s Fitch DBRS • Diversified business model • Low risk jurisdictions BBB BBB+ Baa1 BBB+ (high) • Low cost assets Investment • Conservative financial policies Grade BBB BBB Baa2 BBB negative • Significant cost reductions • Capital discipline BBB- Baa3 BBB- BBB (lo
Slide 14: Credit Facilities
Credit Facilities Amount Letters of Credit Available Note Commitment Maturity ($M) Drawn / Limit ($M) ($M) 1 US 3,000 Committed July 2020 None / US 1,000 US 3,000 2 US 1,200 Committed June 2017 None / None US 1,200 3 C 1,500 Uncommitted n/a C 1,150 C 350 Total1 C 1,150 C 5,810 • Unsecured; any borro
Slide 15: Letter of Credit Requirements
Letter of Credit Requirements • Required to deliver additional letters of credit pursuant to long-term power purchase agreements for QB2, and pipeline and storage agreements for Fort Hills • Under discussion with counterparties • Amounts up to: − US$672M for Quebrada Blanca Phase 2 − C$425M on Fort
Slide 16: Long-Dated Debt Maturity Profile
Long-Dated Debt Maturity Profile $3,000 $2,750 • No debt due until 2017 $2,500 − Weighted average maturity ~14.5 years $2,250 − Weighted average coupon (interest rate) ~4.8% $2,000 − Average maturity <US$600M $1,750 • Pro-forma debt to debt-plus-equity ratio 35%1 US$M $1,500 • Pro-forma net debt to
Slide 17: Near-Term Priorities
Near-Term Priorities • Focus on resetting our cost base • Expect to achieve year-end cash balance of ~$1.8B1 • Opportunities to further strengthen liquidity 17 1. Assumes current commodity prices, C$/US$ exchange rate of 1.31 ,Teck’s 2015 guidance for production, costs and capital expenditures., exi
Slide 18: Third Quarter 2015 Results
Third Quarter 2015 Results October 22, 2015