Teck Resources Limited Class A · TSX:TECK.A
Teck Resources Limited Class A — Investor Day (April 2018)
19 slides from Teck Resources Limited Class A's investor day presentation, Apr 4, 2018
Slide 1: Strong Financial Position
Strong Financial Position April 4, 2018 Ron Millos, Senior Vice President Finance and Chief Financial Officer
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: Strong Financial Position
Strong Financial Position Record Cash Flow Significant Liquidity Disciplined Capital Allocation 3
Slide 4: Record Cash Generation
Record Cash Generation • Record $5.1B in cash flow from Estimated Change operations in 2017 at lower Commodity Price Change in Annualized commodity prices1 EBITDA3 • Exceeds previous cash flow from Steelmaking Coal US$20/tonne ~$600M operations record of $4.0B in 2011 Zinc US$0.25/lb ~$325M • Adjust
Slide 5: Tax-Efficient Earnings in Canada
Tax-Efficient Earnings in Canada ~$4.5 billion in available tax pools1, including: • $3.6B in loss carryforwards • $0.9B in Canadian Development Expenses Applies to: • Cash income taxes in Canada Does not apply to: • Resource taxes in Canada • Cash taxes in foreign jurisdictions 5
Slide 6: Significant Liquidity
Significant Liquidity Debt Maturity Profile3 • ~$1B in cash + US$3 billion undrawn 1,200 1,000 Repaid in credit line, maturing Oct. 2022 800 February = ~$4.8B of liquidity1 US$M 600 400 • Waneta Dam transaction - expected to 200 close in Q3 2018 0 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 20
Slide 7: Achieved Target for Debt Outstanding (<US$5 Billion)
Achieved Target for Debt Outstanding (<US$5 Billion) US$2.4 billion reduction in public notes outstanding since September 30, 2015 Public Notes Outstanding $8,000 US$7.2B $7,000 Face Value US$M $6,000 $5,000 US$4.8B $4,000 $0 2012 2013 2014 2015 2016 2017 7
Slide 8: Sustaining Capex Expected to Peak in 2018
Sustaining Capex Expected to Peak in 2018 Total Capital Expenditures 2012-20181 $3,000 $2,500 New Mine Development $2,000 Major Enhancements $M $1,500 $1,000 Sustaining Capital $500 Capitalized $0 Stripping 2012 2013 2014 2015 2016 2017 2018 Guidance 8
Slide 9: Strong Track Record of Returning Capital to Shareholders
Strong Track Record of Returning Capital to Shareholders $5.4 billion returned since 20031 Dividends1 Share Buybacks1 $4.1 billion $1.3 billion since 2003 since 2003 ~27% ~8% of free cash flow of free cash flow In last 15 years in last 15 years 9
Slide 10: Policy for Return of Capital to Shareholders
Policy for Return of Capital to Shareholders Dividends Paid $600 • Normal course annual dividend of $0.20/share, $500 paid $0.05/share quarterly • Supplemental dividend considered each year $400 • In addition, share buybacks considered each $M year $300 • First supplemental dividend of $230M paid in
Slide 11: Strong Financial Position
Strong Financial Position Record Cash Flow • Record cash flow from operations in 2017, at lower commodity prices • EBITDA converts to cash efficiently - Canadian tax pools Significant Liquidity • Almost $5 billion of liquidity • Expect an additional $1.2 billion in cash upon close of Waneta transact
Slide 12: Notes
Notes Slide 4: Record Cash Generation 1. Generated $5.1 billion in cash flow from operations for the 12 months ended December 31, 2017, with an average realized price for steelmaking coal of US$176 per tonne, a copper price of US$2.80 per pound, and a zinc price of US$1.31 per pound. 2. Difference i
Slide 13: Non-GAAP Financial Measures
Non-GAAP Financial Measures EBITDA, as disclosed on slide 4 and slide 13, is profit attributable to shareholders before net finance expense, income and resource taxes, and depreciation and amortization. Adjusted EBITDA, as disclosed on slide 6, is EBITDA before the pre-tax effect of certain types of
Slide 14: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of EBITDA and Adjusted EBITDA Twelve months ended Twelve months ended (C$ in millions) September 30, 2017 December 31, 2017 Profit attributable to shareholders $ 2,446 $ 2,509 Finance expense net of finance income 255 212 Provision for income taxes 1,425 1,
Slide 15: Non-GAAP Financial Measures
Non-GAAP Financial Measures Reconciliation of Net Debt-to-Adjusted EBITDA Ratio & Net Debt to Debt-Plus-Equity Ratio Twelve months ended (C$ in millions) December 31, 2017 Adjusted EBITDA (A) $ 5,697 Total debt at period end 6,369 Less: cash and cash equivalents at period end (952) Net debt (C) 5,41
Slide 16: Appendix
Appendix Teck
Slide 17: Capital Expenditures Guidance 2018
Capital Expenditures Guidance 2018 2018 (Teck’s share in CAD$ millions) 2017 Guidance Sustaining Steelmaking coal1 $ 112 $ 275 Copper 126 180 Zinc 168 230 Energy4 34 40 Corporate 4 5 2018 $ 444 $ 730 (Teck’s share in CAD$ millions) 2017 Guidance Major Enhancement Capitalized Stripping Steelmaking co
Slide 18: Notes: Appendix
Notes: Appendix Slide 17: Capital Expenditures Guidance 2018 1. For steelmaking coal, sustaining capital includes Teck’s share of water treatment charges of $3 million in 2017. Sustaining capital guidance includes Teck’s share of water treatment charges related to the Elk Valley Water Quality Plan,
Slide 19: Strong Financial Position
Strong Financial Position April 4, 2018 Ron Millos, Senior Vice President, Finance and Chief Financial Officer