28 slides from Teck Resources Limited Class A's earnings presentation, Feb 9, 2010
Slide 1: 4th Quarter 2009 Investor Conference Call and Webcast
4th Quarter 2009 Investor Conference Call and Webcast February 9, 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: Speakers
Q4 Investor Conference Call • Speakers Don Lindsay President & CEO Ron Millos SVP Finance & CFO 4
Slide 5: 2009 Highlights
2009 Highlights • Record Revenues $7,674 million • Operating Profit $3,662 million (before Depreciation & amortization) • EBITDA $4,109 million • Net Earnings $1,831 million • Record production – Copper at Quebrada Blanca – Zinc at Red Dog & Antamina 5
Slide 6: 2009 Earnings
2009 Earnings* Earnings per Share (C$) *Net Earnings from Continuing Operations 4.00 $3.27 2009 2008** As restated 3.00 Net Earnings* $1,750 $668 ($millions) 2.00 $1.47 EPS – Basic $3.28 $1.48 Diluted $3.27 $1.47 1.00 0.00 2009 2008 **Restated to account for Pogo and Hemlo as discontinued operations
Slide 7: Term Loan Position
Term Loan Position C$ Billions 6 5 Term Loan Cash 4 3 2 1 CASH CASH CASH 0 Dec 31 „08 Dec 31 „09 Feb 28 „10 proforma Net Debt to Post Waneta sale Net Debt plus Equity 52% 31% 26% 7
Slide 8: 4th Quarter 2009 Highlights
4th Quarter 2009 Highlights • Record Revenues $2,167 million • Operating Profit $1,035 million (before Depreciation & amortization) • Net Earnings $411 million • EBITDA $1,042 million • Andacollo concentrate project ready for commissioning 8
Slide 9: 4th Quarter 2009 Earnings
4th Quarter 2009 Earnings* *Net Earnings from Continuing Operations Earnings per Share (C$) $0.70 Q4 Q4** Q3 0.50 Without write - 2009 2008 2009 downs Net Earnings* 2009 2008 $416 $(603) $583 ($millions) -0.50 EPS $0.70 $(1.27) $1.02 -1.50 -$1.27 **Restated to account for Pogo and Hemlo as discontin
Slide 10: Comparative Earnings
Comparative Earnings ($ millions, net of taxes) Q4 '09 Q4 '08 Q3 '09 Earnings as Reported $411 $(607) $609 (Earnings) loss from discontinued Ops 5 4 (26) Derivative (gains) losses (4) (166) (16) Asset Sales & Other (137) 94 (3) F/X Gains (35) - (311) Debt Refinancing & Impairment Charges 72 844 84 T
Slide 11: Diversified Operating Profit
Diversified Operating Profit QUARTER Q4 2009 – C$945 million Q4 2008 –C$783 million Copper Copper 39% 26% Coal 39% Zinc 8% Coal Zinc 66% 22% YEAR 2009 – C$3,337 million 2008 – C$3,343 million Copper Copper 31% Coal Coal 46% 54% 37% Zinc Zinc 15% 17% Operating Profit before Depreciation & Pricing Adj
Slide 12: Quarterly Average Prices
Quarterly Average Prices US$ CDN$ Q4 '09 Q4 '08 Q4 '09 Q4 '08 Copper ($/lb) $3.01 $1.79 $3.19 $2.17 +47% Zinc ($/lb) $1.00 $0.54 $1.06 $0.65 +63% Lead ($/lb) $1.04 $0.56 $1.10 $0.69 +59% Coal ($/t) $ 139 $ 247 $ 151 $ 285 - 47% CAD / USD $1.06 $1.21 Zinc, Copper & Lead are LME market prices Coal is
Slide 13: Coal
Coal Q4 Q4 Q3 2009 2008 2009 Coal – Mt * Production 5.4 4.4 5.3 Sales 5.4 3.9 5.7 Average Price (US$/tonne) 139 247 137 (C$/tonne) 151 285 152 C$ millions Financial Results Revenue 810 1,063 869 Operating Profit 372 516 389 (Before Depreciation) * Direct and indirect shares. Prior to October 30th 20
Slide 14: Copper
Copper Q4 Q4 Q3 Copper in Concentrate (kt) 2009 2008 2009 Production 53 57 50 Sales 50 61 58 Copper Cathode (kt) Production 26 28 26 Sales 27 27 28 Moly in Concentrate (M lbs) Production 2.2 2.1 1.9 Sales 2.3 1.9 2.1 Financial Results C$ millions Revenue 664 145 642 Operating Profit 368 205 308 (Bef
Slide 15: Zinc
Zinc Q4 Q4 Q3 2009 2008 2009 Zinc in concentrate – kt Production 189 149 182 Sales 242 199 191 Refined Zinc – kt Production 66 65 56 Sales 64 60 59 Lead in Concentrate – kt Production 36 28 32 Sales 46 60 72 Refined Lead – kt Production 16 21 19 17 20 19 Sales Financial Results C$ millions Revenue 6
Slide 16: Speakers
Q4 Investor Conference Call • Speakers Don Lindsay President & CEO Ron Millos SVP Finance & CFO 16
Slide 17: Debt Position
Debt Position Pro-Forma Sale Millions Dec 31, 2009 of Waneta Cash (C$ millions) 1,420 1,300 Term Loan US$ 2,325 1,120 Fixed Rate Notes 5,086 5,086 Other 205 205 Total Debt US$ 7,616 6,411 C$ Equivalent 8,004 6,738 Debt to Debt plus Equity 36% 31% Net Debt to Net Debt plus Equity 31% 26% 17
Slide 18: 4th Quarter 2009 - Cash Changes
4th Quarter 2009 - Cash Changes $Millions Cash Flow from Operations 673 Working Capital Changes 24 Capital Expenditures / Investments (230) Restricted Cash Decrease 71 Proceeds from Asset Sales 162 Repayment of Debt (352) Non-controlling Interests (44) Exchange, Discontinued Ops & Other (57) Cash &
Slide 19: Final Pricing Revenues
Final Pricing Revenues Outstanding from Q3 & Settled in Q4 Valued Settled Revenue Adj. (C$ M) M lbs US$/lb M lbs US$/lb Before Tax* After Tax* Copper 113 $2.78 105 $2.98 19 Zinc 173 $0.87 155 $0.98 8 Lead 65 $1.03 65 $1.02 0 Other 0 Total $27 $17 Adjustments on Sales within Q4 $63 $41 Total Final Pr
Slide 20: 2010 Guidance Production
2010 Guidance Production Coal 23.5 to 25 M tonnes Copper 340,000 tonnes Zinc in Concentrate 650,000 tonnes Refined Zinc 290,000 tonnes 20
Slide 21: Speakers
Q4 Investor Conference Call • Speakers Ron Millos SVP Finance & CFO Don Lindsay President & CEO 21
Slide 22: Q1 Guidance
Q1 Guidance Factors to consider • Seasonality in zinc sales • Weather impacts on coal shipments • 2009 contract year coal pricing • Copper production and costs at HVC & CdA • Settlement adjustments – potentially negative • Power sales at Trail 22
Slide 23: Corporate Developments
Corporate Developments Non-Core Asset Sale Program Andacollo Concentrate Project Antamina Expansion Project 23
Slide 24: Asset Sale Status
Asset Sale Status • Gold Assets – Operating & Advanced Development projects only – Execution of previously communicated strategy – Strategy in gold “Explore, Find, Develop…….., Sell” • Waneta hydroelectric facility 1/3rd interest – Sale of 1/3 interest for C$825 million approved Expect transaction t
Slide 25: Andacollo - Site Overview
Andacollo - Site Overview Coarse Ore Stock Pile Pebble Crusher Grinding Concentrate Tailings Thickener Storage Shed Flotation Tailings Pumps Concentrate Thickener 25
Slide 26: Antamina Expansion
Antamina Expansion • Ore milled to expand 38% from 94 ktpd to 130 ktpd • Copper production increases ~40% • Zinc production slight decrease, but higher than “No Expansion” case • Commissioning Q4 2011 • Capex US$1,288 million (100%) • Project funded from: • Cash Flow • Reinvestment of Profits • CMA
Slide 27: Long-term Strategy
Long-term Strategy • Copper - Near term growth ~ 40% (from owned - Long term growth ~Triple resources) • Coal - +50% (from owned resources) • Zinc - Build product demand Sell some • Energy - Build value Build some • Gold - “Explore, find, develop…sell” • Other Diversification - Remain opportunistic
Slide 28: 4th Quarter 2009 Investor Conference Call and Webcast
4th Quarter 2009 Investor Conference Call and Webcast February 9, 2010