24 slides from Teck Resources Limited Class A's earnings presentation, Jul 25, 2012
Slide 1: Second Quarter 2012 Investor Conference Call and Webcast
Second Quarter 2012 Investor Conference Call and Webcast July 25, 2012
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 The foregoing list of assumptions is not exhaustive. Events or circumstances could cause actual results to differ materially. Factors that may cause actual results to vary include, but are not limited to: adverse developments in business and economic conditions in the pri
Slide 4: Q2 Investor Conference Call Speakers
Q2 Investor Conference Call Speakers Don Lindsay President & CEO Ron Millos SVP Finance & CFO 4
Slide 5: Q2 2012 Highlights
Q2 2012 Highlights • Record quarterly copper production • Antamina expansion complete – 135 ktpd ore • Coal sales 6.7 million tonnes • Cash balance $3.6 billion • New 5-yr labour agreements at Trail & Cardinal River 5
Slide 6: Q2 2012 Highlights: Increasing volumes, strong cash flow
Q2 2012 Highlights Increasing volumes, strong cash flow Revenues $ 2,561 Million Gross Profit $ 992 million (before depreciation & amortization) Profit $ 268 million (attributable to shareholders) Adjusted Profit $ 312 million (attributable to shareholders) EBITDA $ 790 million 6
Slide 7: Adjusted Profit
Adjusted Profit ($ millions, net of taxes) Q2 ’12 Q2 ’11 Q1 ’12 Profit attributable to $ 268 $ 756 $ 218 Shareholders as reported Asset sale gains (19) (113) - Foreign exchange (gains) losses 13 2 - Derivative (gains) losses 12 (8) (59) Collective agreement charge 38 26 - Financing & other - - 345 A
Slide 8: Coal
Coal Q2 Q2 Q1 Coal - Mt 2012 2011 2012 Production 5.7 5.8 6.3 Sales 6.7 5.6 5.3 Average Realized Price (US$/t) 202 272 223 (C$/t) 203 264 226 Site Costs (C$/t) 77 73 * 70 Transportation Costs (C$/t) 37 33 34 Financial Results C$ millions Revenue 1,362 1,471 1,198 Gross Profit 596 844 645 (before dep
Slide 9: Coal Update
Coal Update • Rail strike: 700kt production lost, minimal sales impact in Q2 • YoY material movement increase by 10% • Quintette feasibility due Q3 2012, first coal in H1 2014 • Cardinal River ratified new 5-year collective agreement • Coal sales contracted 5.0Mt at US$198/t; quarterly contract cust
Slide 10: Coal – Increasing Material Moved
Coal – Increasing Material Moved Teck Coal – Total Material Moved 325 25 24 Rolling 4-Quarter Material Moved (millions of BCM) Rolling 4-Quarter Production (million tonnes) 300 • YoY quarterly material moved 23 up almost 10% 22 275 21 • Clean coal storage maximized 250 20 19 • Targeted 28 mtpa requi
Slide 11: Copper
Copper Q2 Q2 Q1 2012 2011 2012 Copper in Concentrate (kt) Production 72 62 63 Sales 67 60 65 Copper Cathode (kt) Production 18 18 18 Sales 18 17 18 Moly in Concentrate (M lbs) Production 3.2 2.3 3.0 Sales 3.3 2.2 3.1 Financial Results C$ millions Revenue 731 749 753 Gross Profit 342 427 366 (before
Slide 12: Copper Update
Copper Update Rolling 4-Quarter Production • Record copper production of 90kt Contained in Concentrate & Cathode 340 • Antamina tpd +33%: 330 ‒ Q2 average ~135ktpd, compared with design rate of 130 ktpd 320 • Highland Valley: 310 ‒ Head grade up over 27% quarter-over-quarter 300 • Andacollo: 290 ‒ I
Slide 13: Quebrada Blanca Phase 2
Quebrada Blanca Phase 2 • Social and Environmental Impact Assessment (SEIA) application: ‒ Application has been temporarily withdrawn ‒ After review and changes the application will be re-submitted Change picture ‒ Principal additions and clarifications relate to hydrology and vegetation impacts ‒ D
Slide 14: Zinc
Zinc Q2 Q2 Q1 Zinc in Concentrate (kt) 2012 2011 2012 Production 149 166 147 Sales 79 99 135 Refined Zinc (kt) Production 69 71 74 Sales 69 72 76 Lead in Concentrate (kt) Production 24 22 23 Sales – – – Refined Lead (kt) Production 22 21 21 Sales 21 22 22 Financial Results C$ millions Revenue 467 57
Slide 15: Zinc and Energy
Zinc and Energy • Trail: ‒ Site demolition and preparation underway ‒ New slag fuming furnace & settling furnace 2014 start-up ‒ New acid plant ground-breaking commenced in June • Energy: ‒ Anticipate Frontier project SIR’s (Supplemental Information Request) in Q3 2012 ‒ Completed acquisition of Sil
Slide 16: Q2 Investor Conference Call Speakers
Q2 Investor Conference Call Speakers Don Lindsay President & CEO Ron Millos SVP Finance & CFO 16
Slide 17: Q2 2012 – Cash Changes
Q2 2012 – Cash Changes $Millions Cash Flow from Operations 725 Working Capital Changes 43 Capital Expenditures, Investments (445) Acquisition of SilverBirch (432) Debt principal and interest payments (107) Distributions to non-controlling interests & Other (10) Fx translation & Other 67 Cash & STI d
Slide 18: Final Pricing Adjustments
Final Pricing Adjustments Settlement Outstanding at Outstanding at Adjustment (C$ M) March 31, 2012 June 30, 2012 Before Tax* Copper 129 M lbs $3.83 US$/lb 171 M lbs $3.44 US$/lb -$71 Million Zinc 146 M lbs $0.91 US$/lb 93 M lbs $0.84 US$/lb -$5 Million Other (moly, silver, lead, etc.) -$8 Million T
Slide 19: Commodity Price and Settlement Adjustments
Commodity Price and Settlement Adjustments Quarterly Price Change vs. Settlement Adjustment 250 • Commodity price change 200 R² = 0.9783 drives settlement adjustment Pre-tax Settlement Adjustment ($ millions) 150 • Q2 vs. Q1: 100 Q1 2012 ‒ Nearly opposite price 50 Q2 2011 movements in copper 0 Q4 20
Slide 20: 2012 Capex Guidance Update
2012 Capex Guidance Update Decrease of ~$200M Sustaining & Other Development Sustaining Development Copper 275 130 Coal 365 185 Zinc 165 80 Energy (incl. Fort Hills Investment) - 290 Corporate 25 - $830 $685 Major Project Spending Quintette 140 QB Phase II 265 HVC Mill Expansion & extension strippin
Slide 21: Q2 Investor Conference Call Speakers
Q2 Investor Conference Call Speakers Ron Millos SVP Finance & CFO Don Lindsay President & CEO 21
Slide 22: Project Developments
Project Developments • Quintette Coal Mine Feasibility Study Q3 2012 • Neptune Terminal Expansion Expanding throughput to 12.5 mtpa • Relincho Copper Mine Feasibility study Q1 2013 • Fort Hills Phase I Project sanction decision expected 2013 • Frontier Oil Sands Project 100% owned project in permitt
Slide 23: Summary
Summary Well positioned during economic uncertainty No change in long-term outlook Increasing copper production Increasing coal production QBII – large, long life, low cost, expandable 23
Slide 24: Second Quarter 2012 Investor Conference Call and Webcast
Second Quarter 2012 Investor Conference Call and Webcast July 25, 2012