FORM 10-Q
Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

 

 

Form 10-Q

 

 

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2013

or

 

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission File Number: 001-31240

 

 

 

LOGO

NEWMONT MINING CORPORATION

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   84-1611629

(State or Other Jurisdiction of

Incorporation or Organization)

 

(I.R.S. Employer

Identification No.)

6363 South Fiddler’s Green Circle   80111
Greenwood Village, Colorado   (Zip Code)
(Address of Principal Executive Offices)  

Registrant’s telephone number, including area code (303) 863-7414

 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    x  Yes    ¨  No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    x  Yes    ¨  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12-b2 of the Exchange Act. (Check one):

 

Large accelerated filer   x    Accelerated filer   ¨
Non-accelerated filer   ¨  (Do not check if a smaller reporting company.)    Smaller reporting company   ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12-b2 of the Exchange Act).    ¨  Yes    x  No

There were 493,059,095 shares of common stock outstanding on October 24, 2013 (and 4,811,413 exchangeable shares).

 

 

 


Table of Contents

TABLE OF CONTENTS

 

         Page  
  PART I   

ITEM 1.

  FINANCIAL STATEMENTS      1   
  Condensed Consolidated Statements of Income      1   
  Condensed Consolidated Statements of Comprehensive Income      2   
  Condensed Consolidated Statements of Cash Flows      3   
  Condensed Consolidated Balance Sheets      4   
  Notes to Condensed Consolidated Financial Statements      5   

ITEM 2.

  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS      49   
  Overview      49   
  Selected Financial and Operating Results      51   
  Consolidated Financial Results      52   
  Results of Consolidated Operations      58   
  Liquidity and Capital Resources      65   
  Environmental      67   
  Accounting Developments      68   
  Non-GAAP Financial Measures      68   
  Safe Harbor Statement      76   

ITEM 3.

  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK      77   

ITEM 4.

  CONTROLS AND PROCEDURES      79   
  PART II   

ITEM 1.

  LEGAL PROCEEDINGS      81   

ITEM 1A.

  RISK FACTORS      81   

ITEM 2.

  ISSUER PURCHASES OF EQUITY SECURITIES      81   

ITEM 3.

  DEFAULTS UPON SENIOR SECURITIES      81   

ITEM 4.

  MINE SAFETY DISCLOSURES      81   

ITEM 5.

  OTHER INFORMATION      82   

ITEM 6.

  EXHIBITS      82   

SIGNATURES

     83   

EXHIBIT INDEX

     84   


Table of Contents

PART I—FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS.

NEWMONT MINING CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(unaudited, in millions except per share)

 

     Three Months Ended     Nine Months Ended  
     September 30,     September 30,  
     2013     2012     2013     2012  

Sales (Note 3)

   $ 1,983     $ 2,480     $ 6,153     $ 7,392  

Costs and expenses

        

Costs applicable to sales (1) (Note 3)

     1,036       1,088       3,733       3,107  

Amortization

     299       272       981       751  

Reclamation and remediation (Note 4)

     20       17       56       49  

Exploration

     60       115       195       309  

Advanced projects, research and development

     67       74       165       258  

General and administrative

     48       51       158       162  

Write-downs (Note 5)

     3       —         2,265       —    

Other expense, net (Note 6)

     84       131       260       377  
  

 

 

   

 

 

   

 

 

   

 

 

 
     1,617       1,748       7,813       5,013  
  

 

 

   

 

 

   

 

 

   

 

 

 

Other income (expense)

        

Other income, net (Note 7)

     290       52       366       121  

Interest expense, net

     (76     (67     (211     (190
  

 

 

   

 

 

   

 

 

   

 

 

 
     214       (15     155       (69
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before income and mining tax and other items

     580       717       (1,505     2,310  

Income and mining tax benefit (expense) (Note 8)

     (154     (228     (10     (746

Equity income (loss) of affiliates

     1       (9     (6     (39
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations

     427       480       (1,521     1,525  

Income (loss) from discontinued operations (Note 9)

     (21     (33     53       (104
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

     406       447       (1,468     1,421  

Net loss (income) attributable to noncontrolling interests (Note 10)

     2       (80     172       (285
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to Newmont stockholders

   $ 408     $ 367     $ (1,296   $ 1,136  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to Newmont stockholders:

        

Continuing operations

   $ 429     $ 400     $ (1,349   $ 1,240  

Discontinued operations

     (21     (33     53       (104
  

 

 

   

 

 

   

 

 

   

 

 

 
   $ 408     $ 367     $ (1,296   $ 1,136  
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) per common share (Note 11)

        

Basic:

        

Continuing operations

   $ 0.86     $ 0.81     $ (2.72   $ 2.50  

Discontinued operations

     (0.04     (0.07     0.11       (0.21
  

 

 

   

 

 

   

 

 

   

 

 

 
   $ 0.82     $ 0.74     $ (2.61   $ 2.29  
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted:

        

Continuing operations

   $ 0.86     $ 0.81     $ (2.72   $ 2.48  

Discontinued operations

     (0.04     (0.07     0.11       (0.21
  

 

 

   

 

 

   

 

 

   

 

 

 
   $ 0.82     $ 0.74     $ (2.61   $ 2.27  
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash dividends declared per common share

   $ 0.25     $ 0.35     $ 1.025     $ 1.05  

  

 

(1)  Excludes Amortization and Reclamation and remediation.

The accompanying notes are an integral part of the condensed consolidated financial statements.

 

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NEWMONT MINING CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited, in millions)

 

     Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
     2013     2012     2013     2012  

Net income (loss)

   $ 406     $ 447     $ (1,468   $ 1,421  

Other comprehensive income (loss):

        

Unrealized gain (loss) on marketable securities, net of $36, $62, $151 and $(67) tax benefit and (expense), respectively

     (134     184       (413     (129

Foreign currency translation adjustments

     (6     16       (28     16  

Change in pension and other post-retirement benefits, net of $(61), $(3), $(69) and $(7) tax benefit and (expense), respectively

     113       4       124       12  

Change in fair value of cash flow hedge instruments, net of $(35), $(16), $110 and $(34) tax benefit and (expense), respectively

        

Net change from periodic revaluations

     48       55       (189     128  

Net amount reclassified to income

     (4     (24     (39     (83
  

 

 

   

 

 

   

 

 

   

 

 

 

Net unrecognized gain (loss) on derivatives

     44       31       (228     45  
  

 

 

   

 

 

   

 

 

   

 

 

 

Other comprehensive income (loss)

     17       235       (545     (56
  

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income (loss)

   $ 423     $ 682     $ (2,013   $ 1,365  
  

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income (loss) attributable to:

        

Newmont stockholders

   $ 423     $ 601     $ (1,842   $ 1,079  

Noncontrolling interests

     —         81       (171     286  
  

 

 

   

 

 

   

 

 

   

 

 

 
   $ 423     $ 682     $ (2,013   $ 1,365  
  

 

 

   

 

 

   

 

 

   

 

 

 

The accompanying notes are an integral part of the condensed consolidated financial statements.

 

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NEWMONT MINING CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in millions)

 

     Nine Months Ended  
     September 30,  
     2013     2012  

Operating activities:

    

Net income (loss)

   $ (1,468   $ 1,421  

Adjustments:

    

Amortization

     981       751  

Stock based compensation and other non-cash benefits

     55       55  

Reclamation and remediation

     56       49  

Loss (income) from discontinued operations

     (53     104  

Write-downs

     2,265       —    

Impairment of marketable securities

     52       39  

Deferred income taxes

     (570     25  

Gain on asset and investment sales, net

     (282     (12

Other operating adjustments and write-downs

     697       149  

Net change in operating assets and liabilities (Note 24)

     (558     (1,039
  

 

 

   

 

 

 

Net cash provided from continuing operations

     1,175       1,542  

Net cash used in discontinued operations

     (14     (12
  

 

 

   

 

 

 

Net cash provided from operations

     1,161       1,530  
  

 

 

   

 

 

 

Investing activities:

    

Additions to property, plant and mine development

     (1,528     (2,394

Acquisitions, net

     (13     (22

Sale of marketable securities

     588       209  

Purchases of marketable securities

     (1     (209

Proceeds from sale of other assets

     55       13  

Other

     (38     (48
  

 

 

   

 

 

 

Net cash used in investing activities

     (937     (2,451
  

 

 

   

 

 

 

Financing activities:

    

Proceeds from debt, net

     1,262       3,343  

Repayment of debt

     (1,060     (1,956

Payment of conversion premium on debt

     —         (172

Proceeds from stock issuance, net

     2       20  

Sale of noncontrolling interests

     32       —    

Acquisition of noncontrolling interests

     (13     —    

Dividends paid to noncontrolling interests

     (2     (3

Dividends paid to common stockholders

     (509     (521

Other

     (4     (2
  

 

 

   

 

 

 

Net cash provided from financing activities

     (292     709  
  

 

 

   

 

 

 

Effect of exchange rate changes on cash

     (18     1  
  

 

 

   

 

 

 

Net change in cash and cash equivalents

     (86     (211

Cash and cash equivalents at beginning of period

     1,561       1,760  
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 1,475     $ 1,549  
  

 

 

   

 

 

 

The accompanying notes are an integral part of the condensed consolidated financial statements.

 

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NEWMONT MINING CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited, in millions)

 

     At September 30,     At December 31,  
     2013     2012  
ASSETS     

Cash and cash equivalents

   $ 1,475     $ 1,561  

Trade receivables

     215       283  

Accounts receivable

     257       577  

Investments (Note 16)

     91       86  

Inventories (Note 17)

     793       796  

Stockpiles and ore on leach pads (Note 18)

     794       786  

Deferred income tax assets

     213       195  

Other current assets (Note 19)

     1,383       1,661  
  

 

 

   

 

 

 

Current assets

     5,221       5,945  

Property, plant and mine development, net

     16,322       18,010  

Investments (Note 16)

     540       1,446  

Stockpiles and ore on leach pads (Note 18)

     2,851       2,896  

Deferred income tax assets

     1,038       481  

Other long-term assets (Note 19)

     827       872  
  

 

 

   

 

 

 

Total assets

   $ 26,799     $ 29,650  
  

 

 

   

 

 

 
LIABILITIES     

Debt (Note 20)

   $ 587     $ 10  

Accounts payable

     545       657  

Employee-related benefits

     316       339  

Income and mining taxes

     98       51  

Other current liabilities (Note 21)

     1,712       2,084  
  

 

 

   

 

 

 

Current liabilities

     3,258       3,141  

Debt (Note 20)

     5,949       6,288  

Reclamation and remediation liabilities (Note 4)

     1,479       1,457  

Deferred income tax liabilities

     758       858  

Employee-related benefits

     384       586  

Other long-term liabilities (Note 21)

     429       372  
  

 

 

   

 

 

 

Total liabilities

     12,257       12,702  
  

 

 

   

 

 

 

Commitments and contingencies (Note 26)

    
EQUITY     

Common stock

     789       787  

Additional paid-in capital

     8,439       8,330  

Accumulated other comprehensive income (loss)

     (56     490  

Retained earnings

     2,361       4,166  
  

 

 

   

 

 

 

Newmont stockholders’ equity

     11,533       13,773  

Noncontrolling interests

     3,009       3,175  
  

 

 

   

 

 

 

Total equity

     14,542       16,948  
  

 

 

   

 

 

 

Total liabilities and equity

   $ 26,799     $ 29,650  
  

 

 

   

 

 

 

The accompanying notes are an integral part of the condensed consolidated financial statements.

 

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(dollars in millions, except per share, per ounce and per pound amounts)

NOTE 1 BASIS OF PRESENTATION

The interim Condensed Consolidated Financial Statements (“interim statements”) of Newmont Mining Corporation and its subsidiaries (collectively, “Newmont” or the “Company”) are unaudited. In the opinion of management, all adjustments and disclosures necessary for a fair presentation of these interim statements have been included. The results reported in these interim statements are not necessarily indicative of the results that may be reported for the entire year. These interim statements should be read in conjunction with Newmont’s Consolidated Financial Statements for the year ended December 31, 2012 filed February 22, 2013 on Form 10-K. The year-end balance sheet data was derived from the audited financial statements and, in accordance with the instructions to Form 10-Q, certain information and footnote disclosures required by United States generally accepted accounting principles (“GAAP”) have been condensed or omitted. References to “A$” refer to Australian currency, “C$” to Canadian currency and “NZ$” to New Zealand currency.

On March 12, 2013, Newmont completed the sale of the Hope Bay Project to TMAC Resources Inc. (“TMAC”). At September 30, 2013, Newmont held a 49.9% voting interest in TMAC and an economic interest of 70.4%. The Company has made available a $15 credit facility due June 2014. Newmont has identified TMAC as a Variable Interest Entity (“VIE”) under FASB Accounting Standards Codification (“ASC”)—Consolidation guidance. Based upon the ASC guidance for VIEs, and the ownership structure, Newmont has determined that it has a controlling financial interest in TMAC and is therefore the primary beneficiary. As such, Newmont consolidated TMAC in its consolidated financial statements. TMAC has indicated that they anticipate raising funds at an undetermined date through an initial public offering (“IPO”). Should such an IPO occur, which there can be no assurance of such offering occurring, it is expected that Newmont’s ownership will be reduced and Newmont would reevaluate whether or not it is still required to consolidate under the applicable ASC guidance.

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Recently Adopted Accounting Pronouncements

Reporting of Amounts reclassified out of Accumulated Other Comprehensive Income

In February 2013, ASC guidance was issued related to items reclassified from Accumulated Other Comprehensive Income(Loss). The new standard requires either in a single note or parenthetically on the face of the financial statements: (i) the effect of significant amounts reclassified from each component of accumulated other comprehensive income based on its source and (ii) the income statement line items affected by the reclassification. Adoption of the new guidance, effective for the fiscal year beginning January 1, 2013, had no impact on the consolidated financial position, results of operations or cash flows.

Disclosures about Offsetting Assets and Liabilities

In November 2011, ASC guidance was issued related to disclosures about offsetting assets and liabilities. The new standard requires disclosures to allow investors to better compare financial statements prepared under U.S. GAAP with financial statements prepared under IFRS. In January 2013, an update was issued to further clarify that the disclosure requirements are limited to derivatives, repurchase agreements, and securities lending transactions to the extent that they are (i) offset in the financial statements or (ii) subject to an enforceable master netting arrangement or similar agreement. Adoption of the new guidance, effective for the fiscal year beginning January 1, 2013, had no impact on the consolidated financial position, results of operations or cash flows.

Recently Issued Accounting Pronouncements

Presentation of an Unrecognized Tax Benefit

In July 2013, ASC guidance was issued related to the presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss or a tax credit carryforward exists. The updated guidance requires an entity to net its unrecognized tax benefits against the deferred tax assets for all same jurisdiction net operating loss carryforward, a similar tax loss, or tax credit carryforwards. A gross presentation will be required only if such carryforwards are not available or would not be used by the entity to settle any additional income taxes resulting from disallowance of the uncertain tax position. The update is effective prospectively for the Company’s fiscal year beginning January 1, 2014.

 

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

(dollars in millions, except per share, per ounce and per pound amounts)

 

The Company is still evaluating the impact of the updated guidance on the consolidated financial position, results of operations or cash flows.

Foreign Currency Matters

In March 2013, ASC guidance was issued related to Foreign Currency Matters to clarify the treatment of cumulative translation adjustments when a parent sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a business within a foreign entity. The updated guidance also resolves the diversity in practice for the treatment of business combinations achieved in stages in a foreign entity. The update is effective prospectively for the Company’s fiscal year beginning January 1, 2014. The Company does not expect the updated guidance to have an impact on the consolidated financial position, results of operations or cash flows.

 

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Table of Contents

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

(dollars in millions, except per share, per ounce and per pound amounts)

 

NOTE 3 SEGMENT INFORMATION

The Company’s reportable segments are based upon the Company’s management structure that is focused on the geographic region for the Company’s operations. Segment results for 2012 have been retrospectively revised to reflect organizational changes that moved the Indonesia operations to a separately managed region and moved the Hope Bay segment to Corporate and Other. Geographic regions now include North America, South America, Australia/New Zealand, Indonesia, Africa and Corporate and Other. The financial information relating to the Company’s segments is as follows:

 

            Costs             Advanced         
            Applicable to             Projects and      Pre-Tax  
     Sales      Sales      Amortization      Exploration      Income (Loss)  

Three Months Ended September 30, 2013

              

Nevada

   $ 618      $ 251      $ 59      $ 25      $ 272  

La Herradura

     70        40        9        10        12  

Other North America

     —          —          —          1        (3
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

North America

     688        291        68        36        281  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Yanacocha

     346        154        87        9        55  

Conga

     —          —          —          15        (17

Other South America

     —          —          —          4        (4
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

South America

     346        154        87        28        34  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Boddington:

              

Gold

     204        152        28        

Copper

     42        29        5        
  

 

 

    

 

 

    

 

 

       

Total

     246        181        33        1        20  

Other Australia/New Zealand

     357        202        60        7        93  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Australia/New Zealand

     603        383        93        8        113  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Batu Hijau:

              

Gold

     16        11        3        

Copper

     136        122        24        
  

 

 

    

 

 

    

 

 

       

Total

     152        133        27        2        (13

Other Indonesia

     —          —          —          —          —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Indonesia

     152        133        27        2        (13
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Ahafo

     194        75        19        12        80  

Akyem

     —          —          —          2        (3

Other Africa

     —          —          —          3        (20
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Africa

     194        75        19        17        57  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Corporate and Other

     —          —          5        36        108  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Consolidated

   $ 1,983      $ 1,036      $ 299      $ 127      $ 580  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

(dollars in millions, except per share, per ounce and per pound amounts)

 

            Costs             Advanced         
            Applicable to             Projects and      Pre-Tax  
     Sales      Sales      Amortization      Exploration      Income (Loss)  

Three Months Ended September 30, 2012

              

Nevada

   $ 734      $ 292      $ 61      $ 47      $ 330  

La Herradura

     88        31        5        11        39  

Other North America

     —          —          —          1        (2
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

North America

     822        323        66        59        367  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Yanacocha

     585        185        83        14        254  

Conga

     —          —          —          9        (12

Other South America

     —          —          —          15        (10
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

South America

     585        185        83        38        232  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Boddington:

              

Gold

     281        155        37        

Copper

     60        39        7        
  

 

 

    

 

 

    

 

 

       

Total

     341        194        44        2        98  

Other Australia/New Zealand

     358        201        34        23        83  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Australia/New Zealand

     699        395        78        25        181  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Batu Hijau:

              

Gold

     24        17        2        

Copper

     146        99        21        
  

 

 

    

 

 

    

 

 

       

Total

     170        116        23        8        10  

Other Indonesia

     —          —          —          —          (1
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Indonesia

     170        116        23        8        9  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Ahafo

     204        69        18        20        98  

Akyem

     —          —          —          6        (6

Other Africa

     —          —          —          3        (4
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Africa

     204        69        18        29        88  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Corporate and Other

     —          —          4        30        (160
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Consolidated

   $ 2,480      $ 1,088      $ 272      $ 189      $ 717  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

8


Table of Contents

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

(dollars in millions, except per share, per ounce and per pound amounts)

 

     Sales      Costs
Applicable to
Sales
     Amortization      Advanced
Projects and
Exploration
     Pre-Tax
Income
(Loss)
    Total
Assets
     Capital
Expenditures(1)
 

Nine Months Ended September 30, 2013

  

             

Nevada

   $ 1,746      $ 799      $ 178      $ 78      $ 662     $ 7,954      $ 360  

La Herradura

     231        122        22        31        57       453        82  

Other North America

     —          —          —          2        (8     68        1  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

North America

     1,977        921        200        111        711       8,475        443  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Yanacocha

     1,221        509        254        32        337       2,958        136  

Conga

     —          —          —          16        (17     1,714        184  

Other South America

     —          —          —          14        (16     150        65  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

South America

     1,221        509        254        62        304       4,822        385  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Boddington:

                   

Gold

     782        578        129             

Copper

     156        139        29             
  

 

 

    

 

 

    

 

 

            

Total

     938        717        158        1        (2,027     2,265        81  

Other Australia/New Zealand

     1,081        697        164        31        11       1,788        123  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Australia/New Zealand

     2,019        1,414        322        32        (2,016     4,053        204  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Batu Hijau:

                   

Gold

     42        81        18             

Copper

     305        582        114             
  

 

 

    

 

 

    

 

 

            

Total

     347        663        132        13        (494     3,423        82  

Other Indonesia

     —          —          —          —          2       3        —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Indonesia

     347        663        132        13        (492     3,426        82  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Ahafo

     589        226        56        36        255       1,615        139  

Akyem

     —          —          —          7        (10     1,239        209  

Other Africa

     —          —          —          11        (31     4        —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Africa

     589        226        56        54        214       2,858        348  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Corporate and Other

     —          —          17        88        (226     3,165        7  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Consolidated

   $ 6,153      $ 3,733      $ 981      $ 360      $ (1,505   $ 26,799      $ 1,469  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

 

(1)  Includes a decrease in accrued capital expenditures of $59; consolidated capital expenditures on a cash basis were $1,528.

 

9


Table of Contents

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

(dollars in millions, except per share, per ounce and per pound amounts)

 

            Costs             Advanced      Pre-Tax               
     Sales      Applicable to
Sales
     Amortization      Projects and
Exploration
     Income
(Loss)
    Total
Assets
     Capital
Expenditures(1)
 

Nine Months Ended September 30, 2012

  

             

Nevada

   $ 2,028      $ 817      $ 161      $ 124      $ 916     $ 7,420      $ 489  

La Herradura

     274        96        16        28        130       388        50  

Other North America

     —          —          —          2        (6     96        31  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

North America

     2,302        913        177        154        1,040       7,904        570  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Yanacocha

     1,793        523        195        49        936       2,812        392  

Conga

     —          —          —          48        (51     1,617        467  

Other South America

     —          —          —          59        (54     82        54  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

South America

     1,793        523        195        156        831       4,511        913  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Boddington:

                   

Gold

     843        449        118             

Copper

     163        107        25             
  

 

 

    

 

 

    

 

 

            

Total

     1,006        556        143        7        278       4,678        77  

Other Australia/New Zealand

     1,116        573        106        66        356       2,212        226  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Australia/New Zealand

     2,122        1,129        249        73        634       6,890        303  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Batu Hijau:

                   

Gold

     76        47        8             

Copper

     406        254        51             
  

 

 

    

 

 

    

 

 

            

Total

     482        301        59        22        42       3,662        98  

Other Indonesia

     —          —          —          —          2       5        —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Indonesia

     482        301        59        22        44       3,667        98  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Ahafo

     693        241        58        42        348       1,362        176  

Akyem

     —          —          —          15        (16     876        305  

Other Africa

     —          —          —          8        (8     6        —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Africa

     693        241        58        65        324       2,244        481  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Corporate and Other

     —          —          13        97        (563     4,307        22  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Consolidated

   $ 7,392      $ 3,107      $ 751      $ 567      $ 2,310     $ 29,523      $ 2,387  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

 

(1)  Includes a decrease in accrued capital expenditures of $7; consolidated capital expenditures on a cash basis were $2,394.

 

10


Table of Contents

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

(dollars in millions, except per share, per ounce and per pound amounts)

 

NOTE 4 RECLAMATION AND REMEDIATION

The Company’s Reclamation and remediation expense consisted of:

 

     Three Months Ended
September 30,
     Nine Months Ended
September 30,
 
     2013      2012      2013      2012  

Reclamation

   $ 3      $ —        $ 3      $ —    

Accretion—operating

     15        14        45        41  

Accretion—non-operating

     2        3        8        8  
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ 20      $ 17      $ 56      $ 49  
  

 

 

    

 

 

    

 

 

    

 

 

 

At September 30, 2013 and December 31, 2012, $1,371 and $1,341, respectively, were accrued for reclamation obligations relating to operating properties. In addition, the Company is involved in several matters concerning environmental obligations associated with former, primarily historic, mining activities. Generally, these matters concern developing and implementing remediation plans at the various sites involved. At September 30, 2013 and December 31, 2012, $181 and $198, respectively, were accrued for such obligations. These amounts are also included in Reclamation and remediation liabilities.

The following is a reconciliation of Reclamation and remediation liabilities:

 

     Nine Months Ended September 30,  
     2013     2012  

Balance at beginning of period

   $ 1,539     $ 1,240  

Additions, changes in estimates and other

     1       106  

Liabilities settled

     (41     (57

Accretion expense

     53       49  
  

 

 

   

 

 

 

Balance at end of period

   $ 1,552     $ 1,338  
  

 

 

   

 

 

 

The current portion of Reclamation and remediation liabilities of $73 and $82 at September 30, 2013 and December 31, 2012, respectively, are included in Other current liabilities (see Note 21).

NOTE 5 WRITE-DOWNS

 

     Three Months Ended
September 30,
     Nine Months Ended
September 30,
 
     2013      2012      2013      2012  

Property, plant and mine development

           

Yanacocha

   $ 2      $ —        $ 3      $ —    

Boddington

     —          —          2,107        —    

Other Australia/New Zealand

     1        —          67        —    

Batu Hijau

     —          —          1        —    
  

 

 

    

 

 

    

 

 

    

 

 

 
     3        —          2,178        —    
  

 

 

    

 

 

    

 

 

    

 

 

 

Other long-term assets

           

Boddington

     —          —          31        —    

Other Australia/New Zealand

     —          —          56        —    
  

 

 

    

 

 

    

 

 

    

 

 

 
     —          —          87        —    
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ 3      $ —        $ 2,265      $ —    
  

 

 

    

 

 

    

 

 

    

 

 

 

Write-downs totaled $3 and $2,265 for the three and nine months ended September 30, 2013, respectively. The 2013 write-downs were primarily due to a decrease in the Company’s long-term gold and copper price assumptions during the second quarter to $1,400 per ounce and $3.00 per pound, respectively, combined with rising operating costs. These factors represented significant changes in the business, requiring the Company to evaluate for impairment. For purposes of this evaluation, estimates of future cash flows of the individual reporting units were used to determine fair value. The estimated cash flows were derived from life-of-mine plans, developed using long-term pricing reflective of the current price environment and management’s projections for operating costs. Refer to Note 14 for additional information related to the fair value determination of the impairment.

 

11


Table of Contents

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

(dollars in millions, except per share, per ounce and per pound amounts)

 

Due to the above conditions, Goodwill was included in the Company’s impairment analysis. After-tax discounted future cash flows of reporting units with Goodwill were analyzed. Goodwill at Other Australia / New Zealand had a carrying value of $188 at December 31, 2012. As a result of this evaluation, the Company recorded an impairment of $56, resulting in a carrying value of $132 at September 30, 2013.

NOTE 6 OTHER EXPENSE, NET

 

     Three Months Ended
September 30,
     Nine Months Ended
September 30,
 
     2013      2012      2013     2012  

Transaction costs

   $ —        $ —        $ 45     $ 12  

Regional administration

     12        22        48       72  

Restructuring and other

     20        48        50       48  

Community development

     42        18        72       69  

Western Australia power plant

     3        5        14       13  

Hope Bay care and maintenance

     —          27        (2     129  

Other

     7        11        33       34  
  

 

 

    

 

 

    

 

 

   

 

 

 
   $ 84      $ 131      $ 260     $ 377  
  

 

 

    

 

 

    

 

 

   

 

 

 

NOTE 7 OTHER INCOME, NET

 

     Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
     2013     2012     2013     2012  

Gain on sale of investments, net

   $ 280     $ —       $ 280     $ —    

Foreign currency exchange, net

     19       (1     56       (4

Refinery income, net

     20       20       27       27  

Canadian Oil Sands

     —         11       21       31  

Interest

     4       2       10       9  

Development projects, net

     1       16       9       49  

Gain on asset sales, net

     1       2       2       12  

Reduction of allowance for loan receivable

     —         —         —         21  

Impairment of marketable securities

     (41     (7     (52     (39

Other

     6       9       13       15  
  

 

 

   

 

 

   

 

 

   

 

 

 
   $ 290     $ 52     $ 366     $ 121  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

12


Table of Contents

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

(dollars in millions, except per share, per ounce and per pound amounts)

 

NOTE 8 INCOME AND MINING TAXES

During the third quarter of 2013, the Company recorded an estimated income and mining tax expense of $154, resulting in an effective tax rate of 26%. Estimated income and mining tax expense during the third quarter of 2012 was $228 for an effective tax rate of 32%. The lower effective tax rate on the income in the third quarter of 2013 is a result of tax planning related to the sale of the Canadian Oil Sands investment and the Canadian capital gains tax rate associated with the sale partially offset by a diluted benefit from percentage depletion.

During the first nine months of 2013, the estimated income and mining tax expense was $10, resulting in an effective tax rate of less than 0%. Estimated income and mining tax expense during the first nine months of 2012 was $746 for an effective tax rate of 32%. The lower effective tax rate on the loss in the first nine months of 2013 is primarily due to an increase in the Company’s valuation allowance on certain deferred tax assets partially offset by the benefit related to tax planning on the sale of the Canadian Oil Sands investment and the Canadian capital gains tax rate associated with the sale.

A valuation allowance is provided for those deferred tax assets for which it is more likely than not that the related benefits will not be realized. In determining the amount of the valuation allowance, each quarter the Company considers estimated future taxable income as well as feasible tax planning strategies in each jurisdiction to determine if the deferred tax assets are realizable. If it is determined that the Company will not realize all or a portion of its deferred tax assets, it will place or increase a valuation allowance. Conversely, if determined that it will ultimately be able to realize all or a portion of the related benefits for which a valuation allowance has been provided, all or a portion of the related valuation allowance will be reduced.

The Company’s income and mining tax expense differed from the amounts computed by applying the United States statutory corporate income tax rate for the following reasons:

 

     Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
     2013     2012     2013     2012  

Income (loss) before income and miningtax and other items

     $ 580       $ 717       $ (1,505     $ 2,310  
    

 

 

     

 

 

     

 

 

     

 

 

 

Tax at statutory rate

     35    $ 203       35    $ 251       35    $ (527     35    $ 809  

Reconciling items:

                

Percentage depletion

     (1 )%      (6     (7 )%      (53         (99     (7 )%      (161

Change in valuation allowance on deferred tax assets

         7           19       (47 )%      698           65  

Tax planning on sale of Canadian Oil Sands and Canadian capital gains tax rate

     (11 )%      (61             (61    

Other

         11           11       —       (1         33  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income and mining tax expense (benefit)

     26    $ 154       32    $ 228       (1 )%    $ 10       32    $ 746  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

The Company operates in numerous countries around the world and accordingly it is subject to, and pays annual income taxes under, the various income tax regimes in the countries in which it operates. Some of these tax regimes are defined by contractual agreements with the local government, and others are defined by the general corporate income tax laws of the country. The Company has historically filed, and continues to file, all required income tax returns and pay the income taxes reasonably determined to be due. The tax rules and regulations in many countries are highly complex and subject to interpretation. From time to time the Company is subject to a review of its historic income tax filings and in connection with such reviews, disputes can arise with the taxing authorities over the interpretation or application of certain rules to the Company’s business conducted within the country involved.

 

13


Table of Contents

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

(dollars in millions, except per share, per ounce and per pound amounts)

 

At September 30, 2013, the Company’s total unrecognized tax benefit was $376 for uncertain income tax positions taken or expected to be taken on income tax returns. Of this, $33 represents the amount of unrecognized tax benefits that, if recognized, would affect the Company’s effective income tax rate.

As a result of the statute of limitations that expire in the next 12 months in various jurisdictions, and possible settlements of audit-related issues with taxing authorities in various jurisdictions with respect to which none of the issues are individually significant, the Company believes that it is reasonably possible that the total amount of its net unrecognized income tax benefits will decrease by approximately $5 to $10 in the next 12 months.

NOTE 9 DISCONTINUED OPERATIONS

Discontinued operations include Holloway Mining Company, which owned the Holt-McDermott property (“Holt property”) that was sold to St. Andrew Goldfields Ltd. (“St. Andrew”) in 2006. In 2009, the Superior Court issued a decision finding Newmont Canada Corporation (“Newmont Canada”) liable for a sliding scale royalty on production from the Holt property, which was upheld in 2011 by the Ontario Court of Appeal. During the third quarter of 2013, the Company recorded a charge of $21, net of tax benefits of $10, related to an increase in the gold spot price at quarter end. The total recorded benefit for the first nine months of 2013, is $53, net of tax expense of $24, related to an overall decline in the gold spot price and an increase in discount rates. During the third quarter of 2012, the Company recorded an additional $33 charge, net of tax benefits of $2, to reflect higher gold prices offset by a decrease in future expected production at the Holt property due to new resource estimates published by St. Andrew. The total charges for the first nine months of 2012 were $104, net of tax benefits of $6.

Net operating cash used in discontinued operations of $14 and $12 in the first nine months of 2013 and 2012 respectively relates to payments on the Holt property royalty.

NOTE 10 NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTERESTS

 

     Three Months Ended
September 30,
     Nine Months Ended
September 30,
 
     2013     2012      2013     2012  

Minera Yanacocha

   $ 6     $ 73      $ 89     $ 268  

TMAC

     (3     —          (17     —    

Batu Hijau

     (10     3        (251     11  

Other

     5       4        7       6  
  

 

 

   

 

 

    

 

 

   

 

 

 
   $ (2   $ 80      $ (172   $ 285  
  

 

 

   

 

 

    

 

 

   

 

 

 

Newmont has a 51.35% ownership interest in Minera Yanacocha S.R.L. (“Yanacocha”), with the remaining interests held by Compañia de Minas Buenaventura, S.A.A. (43.65%) and the International Finance Corporation (5%).

Newmont has a 70.4% economic ownership interest in TMAC, with remaining interests held by various outside investors.

Newmont has a 48.5% effective economic interest in PT Newmont Nusa Tenggara (“PTNNT”) with remaining interests held by an affiliate of Sumitomo Corporation of Japan and various Indonesian entities. PTNNT operates the Batu Hijau copper and gold mine in Indonesia. Based on ASC guidance for variable interest entities, Newmont consolidates PTNNT in its Condensed Consolidated Financial Statements.

 

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Table of Contents

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

(dollars in millions, except per share, per ounce and per pound amounts)

 

NOTE 11 INCOME (LOSS) PER COMMON SHARE

Basic income (loss) per common share is computed by dividing income (loss) available to Newmont common stockholders by the weighted average number of common shares outstanding during the period. Diluted income (loss) per common share is computed similarly except that weighted average common shares is increased to reflect all dilutive instruments.

 

     Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
     2013     2012     2013     2012  

Net income (loss) attributable to Newmont stockholders

        

Continuing operations

   $ 429     $ 400     $ (1,349   $ 1,240  

Discontinued operations

     (21     (33     53       (104
  

 

 

   

 

 

   

 

 

   

 

 

 
   $ 408     $ 367     $ (1,296   $ 1,136  
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average common shares (millions):

        

Basic

     498       496       497       496  

Effect of employee stock-based awards

     —         1       —         1  

Effect of convertible notes

     —         2       —         3  
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     498       499       497       500  
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) per common share

        

Basic:

        

Continuing operations

   $ 0.86     $ 0.81     $ (2.72   $ 2.50  

Discontinued operations

     (0.04     (0.07     0.11       (0.21
  

 

 

   

 

 

   

 

 

   

 

 

 
   $ 0.82     $ 0.74     $ (2.61   $ 2.29  
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted:

        

Continuing operations

   $ 0.86     $ 0.81     $ (2.72   $ 2.48  

Discontinued operations

     (0.04     (0.07     0.11       (0.21
  

 

 

   

 

 

   

 

 

   

 

 

 
   $ 0.82     $ 0.74     $ (2.61   $ 2.27  
  

 

 

   

 

 

   

 

 

   

 

 

 

Options to purchase 3 and 2 million shares of common stock at average exercise prices of $48 and $57 were outstanding at September 30, 2013 and 2012, respectively, but were not included in the computation of diluted weighted average common shares because their exercise prices exceeded the average price of the Company’s common stock for the respective periods presented.

Other outstanding options to purchase 1 million shares of common stock were not included in the computation of diluted weighted average common shares in the first nine months of 2013 because their effect would have been anti-dilutive.

Newmont is required to settle the principal amount of its 2014 and 2017 Convertible Senior Notes in cash and may elect to settle the remaining conversion premium (average share price in excess of the conversion price), if any, in cash, shares or a combination thereof. The effect of contingently convertible instruments on diluted earnings per share is calculated under the net share settlement method in accordance with ASC guidance. The conversion price exceeded the Company’s share price for the third quarter and first nine months of 2013, therefore no additional shares were included in the computation of diluted weighted average common shares. During the third quarter and first nine months of 2012, the Company’s share price exceeded the conversion price, resulting in additional shares included in the computation of diluted weighted average common shares.

In February 2012, the holders of the Company’s 2012 Convertible Senior Notes exercised their election to convert the notes. The Company elected to pay the $172 conversion premium with cash, and as a result no common shares were issued.

 

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Table of Contents

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

(dollars in millions, except per share, per ounce and per pound amounts)

 

NOTE 12 EMPLOYEE PENSION AND OTHER BENEFIT PLANS

 

     Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
     2013     2012     2013     2012  

Pension benefit costs, net

        

Service cost

   $ 9     $ 7     $ 27     $ 22  

Interest cost

     11       10       31       31  

Expected return on plan assets

     (12     (11     (37     (33

Amortization, net

     8       6       26       20  

Settlements

     5       —         5       —    
  

 

 

   

 

 

   

 

 

   

 

 

 
   $ 21     $ 12     $ 52     $ 40  
  

 

 

   

 

 

   

 

 

   

 

 

 
     Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
     2013     2012     2013     2012  

Other benefit costs, net

        

Service cost

   $ 1     $ 1     $ 3     $ 2  

Interest cost

     1       1       4       4  
  

 

 

   

 

 

   

 

 

   

 

 

 
   $ 2     $ 2     $ 7     $ 6  
  

 

 

   

 

 

   

 

 

   

 

 

 

In September 2013, the Company approved an amendment to the terms of its Salaried Pension and Pension Equalization Plans, effective beginning July 2014. The Company announced these changes in early October, and as a result, re-measured its pension liability at September 30, 2013. The discount rate used for purposes of the re-measurement was 5.25%. The re-measurement resulted in a decrease of the pension liability of $165 ($107, net of tax).

NOTE 13 STOCK BASED COMPENSATION

 

     Three Months Ended
September 30,
     Nine Months Ended
September 30,
 
     2013      2012      2013      2012  

Stock options

   $ 2      $ 4      $ 7      $ 11  

Restricted stock units

     8        8        24        19  

Performance leveraged stock units

     2        2        6        8  

Strategic stock units

     1        1        4        2  
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ 13      $ 15      $ 41      $ 40  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

16


Table of Contents

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

(dollars in millions, except per share, per ounce and per pound amounts)

 

NOTE 14 FAIR VALUE ACCOUNTING

Fair value accounting establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:

 

  Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

 

  Level 2 Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and

 

  Level 3 Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

The following table sets forth the Company’s assets and liabilities measured at fair value on a recurring basis (at least annually) by level within the fair value hierarchy. As required by accounting guidance, assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

 

     Fair Value at September 30, 2013  
     Total      Level 1      Level 2      Level 3  

Assets:

           

Cash equivalents

   $ 113      $ 113      $ —        $ —    

Marketable equity securities:

           

Extractive industries

     479        479        —          —    

Other

     4        4        —          —    

Marketable debt securities:

           

Asset backed commercial paper

     22        —          —          22  

Corporate

     12        —          12        —    

Auction rate securities

     4        —          —          4  

Trade receivable from provisional copper and gold concentrate sales, net

     122        122        —          —    
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ 756      $ 718      $ 12      $ 26  
  

 

 

    

 

 

    

 

 

    

 

 

 

Liabilities:

           

Derivative instruments, net:

           

Foreign exchange forward contracts

   $ 80      $ —        $ 80      $ —    

Diesel forward contracts

     1        —          1        —    

Boddington contingent consideration

     28        —          —          28  

Holt property royalty

     149        —          —          149  
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ 258      $ —        $ 81      $ 177  
  

 

 

    

 

 

    

 

 

    

 

 

 

The fair values of the derivative instruments in the table above are presented on a net basis. The gross amounts related to the fair value of the derivatives instruments above are included in the Derivatives Instruments Note (see Note 15). All other Fair Value disclosures in the above table are presented on a gross basis.

The Company’s cash equivalent instruments are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices. The cash equivalent instruments that are valued based on quoted market prices in active markets are primarily money market securities and U.S. Treasury securities.

The Company’s marketable equity securities are valued using quoted market prices in active markets and as such are classified within Level 1 of the fair value hierarchy. The securities are segregated based on industry. The fair value of the marketable equity securities is calculated as the quoted market price of the marketable equity security multiplied by the quantity of shares held by the Company.

 

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Table of Contents

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

(dollars in millions, except per share, per ounce and per pound amounts)

 

The Company’s marketable corporate debt securities are mainly comingled fund investments that are classified within Level 2 with the unit of account considered to be at the fund level.

The Company’s marketable debt securities also include investments in auction rate securities and asset backed commercial paper. The Company reviews the fair value for auction rate securities and asset backed commercial paper on a quarterly basis. The auction rate securities are traded in markets that are not active, trade infrequently and have little price transparency. Therefore, the investments are classified as Level 3 of the fair value hierarchy. See table below which sets forth a summary of the quantitative and qualitative information related to the significant unobservable inputs used in the calculation of the fair value.

The Company’s net trade receivable from provisional copper and gold concentrate sales, subject to final pricing, is valued using quoted market prices based on forward curves and, as such, is classified within Level 1 of the fair value hierarchy.

The Company’s derivative instruments are valued using pricing models and the Company generally uses similar models to value similar instruments. Valuation models require a variety of inputs, including contractual terms, market prices, yield curves, credit spreads, measures of volatility, and correlations of such inputs. The Company’s derivatives trade in liquid markets, and as such, model inputs can generally be verified and do not involve significant management judgment. Such instruments are classified within Level 2 of the fair value hierarchy.

The estimated value of the Boddington contingent royalty was determined using a Monte Carlo valuation model which simulates future gold and copper prices and costs applicable to sales. This contingent royalty is capped at $100, and at June 30, 2012, the Company increased the accrual to the maximum of $100. The Boddington contingent royalty is classified within Level 3 of the fair value hierarchy. See table below which sets forth a summary of the quantitative and qualitative information related to the significant unobservable inputs used in the calculation of the fair value.

The estimated fair value of the Holt sliding scale royalty was determined using a Monte Carlo valuation model. The sliding scale royalty liability is classified within Level 3 of the fair value hierarchy. See table below which sets forth a summary of the quantitative and qualitative information related to the significant unobservable inputs used in the calculation of the fair value.

The following table sets forth a summary of the quantitative and qualitative information related to the unobservable inputs used in the calculation of the Company’s Level 3 financial assets and liabilities for the nine months ended September 30, 2013:

 

Description

   At
September 30,
2013
     Valuation technique    Unobservable input    Range/Weighted
average
 

Auction Rate Securities

   $ 4      Discounted cash flow    Weighted average
recoverability rate
     58 

Asset Backed Commercial Paper

     22      Discounted cash flow    Recoverability rate      72-88

Boddington Contingent Consideration

     28      Monte Carlo    Discount rate     
         Long Term Gold price    $ 1,400  
         Long Term Copper
price
   $ 3.00  

Holt property royalty

     149      Monte Carlo    Weighted average
discount rate
    
         Long Term Gold price    $ 1,400  

 

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Table of Contents

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

(dollars in millions, except per share, per ounce and per pound amounts)

 

The following table sets forth a summary of changes in the fair value of the Company’s Level 3 financial assets and liabilities for the nine months ended September 30, 2013:

 

     Auction Rate
Securities
    Asset Backed
Commercial
Paper
     Total Assets     Boddington
Contingent
Royalty
    Holt Property
Royalty
    Total
Liabilities
 

Balance at beginning of period

   $ 5     $ 19      $ 24     $ 41     $ 240     $ 281  

Unrealized loss

     (1     —          (1     —         —         —    

Settlements

     —         —          —         (13     (15     (28

Revaluation

     —         3        3       —         (76     (76
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Balance at end of period

   $ 4     $ 22      $ 26     $ 28     $ 149     $ 177  
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

At September 30, 2013, assets and liabilities classified within Level 3 of the fair value hierarchy represent 3% and 69%, respectively, of total assets and liabilities measured at fair value.

During the second quarter of 2013, Newmont recorded write-downs related to Property, plant and equipment, net. (See Note 5). The estimated fair values of Property, plant and mine development, net, Goodwill and Intangible assets used in determining the second quarter impairment followed the discounted cash flow approach. The discounted cash flow model used significant unobservable inputs and is, therefore, considered within Level 3 of the fair value hierarchy.

The following table sets forth a summary of the quantitative and qualitative information related to the unobservable inputs used in the calculation of the Company’s nonrecurring Level 3 financial assets:

 

Description

   Valuation technique    Unobservable input    Range/Weighted
average
 

Property, plant and mine development, net

   Discounted cash flow    Discount rate      4.25 
      Long Term Gold price    $ 1,400  
      Long Term Copper price    $ 3.00  
      Long Term Exchange
rate A$/US$
     0.935  

Goodwill and Intangible assets

   Discounted cash flow    Discount rate      3.75-4.25
      Long Term Gold price    $ 1,400  
      Long Term Copper price    $ 3.00  
      Long Term Exchange
rate A$/US$
     0.935  

 

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Table of Contents

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

(dollars in millions, except per share, per ounce and per pound amounts)

 

NOTE 15 DERIVATIVE INSTRUMENTS

The Company’s strategy is to provide shareholders with leverage to changes in gold and copper prices by selling its production at spot market prices. Consequently, the Company does not hedge its gold and copper sales. The Company continues to manage certain risks associated with commodity input costs, interest rates and foreign currencies using the derivative market. All of the derivative instruments described below were transacted for risk management purposes and qualify as cash flow hedges.

Cash Flow Hedges

The foreign currency, diesel and forward starting swap contracts are designated as cash flow hedges, and as such, the effective portion of unrealized changes in market value have been recorded in Accumulated other comprehensive income(loss) and are reclassified to earnings during the period in which the hedged transaction affects earnings. Gains and losses from hedge ineffectiveness are recognized in current earnings.

Foreign Currency Contracts

Newmont utilizes foreign currency contracts to reduce the variability of the US dollar amount of forecasted foreign currency expenditures caused by changes in exchange rates. Newmont hedges a portion of the Company’s A$ and NZ$ denominated operating expenditures which results in a blended rate realized each period. The hedging instruments are fixed forward contracts with expiration dates ranging up to five years from the date of issue. The principal hedging objective is reduction in the volatility of realized period-on-period $/A$ and $/NZ$ rates, respectively.

Newmont had the following foreign currency derivative contracts outstanding at September 30, 2013:

 

     Expected Maturity Date  
           Total/  
     2013     2014     2015     2016     2017     2018     Average  

A$ Operating Fixed Forward Contracts:

              

A$ notional (millions)

     323       1,118       848       564       273       44       3,170  

Average rate ($/A$)

     0.95       0.93       0.92       0.92       0.91       0.89       0.93  

Expected hedge ratio

     87     71     55     37     18     7  

NZ$ Operating Fixed Forward Contracts:

              

NZ$ notional (millions)

     22       59       14       —         —         —         95  

Average rate ($/NZ$)

     0.80       0.80       0.77       —         —         —         0.80  

Expected hedge ratio

     73     54     16     —         —         —      

In order to reduce derivative exposure to a lower Australian dollar, in October 2013 the Company began closing out certain foreign currency contracts. As of October 25, 2013 the Company settled approximately A$2,100 in notional contracts for a net gain of approximately $46. These gains will be held in Other Comprehensive Income “OCI” as the hedged transactions, A$ denominated operating costs, are still probable of occurring over the original time period. The amount deferred in OCI will be recognized in earnings over a period of five years as the original hedge transactions occur. From time to time and depending upon business considerations and market conditions, the Company may consider closing out additional Australian dollar hedging contracts, or conversely, may enter into new Australian dollar hedging contracts.

Diesel Fixed Forward Contracts

Newmont hedges a portion of its operating cost exposure related to diesel consumed at its Nevada operations to reduce the variability in realized diesel prices. The hedging instruments consist of a series of financially settled fixed forward contracts with expiration dates up to three years.

 

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Table of Contents

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

(dollars in millions, except per share, per ounce and per pound amounts)

 

Newmont had the following diesel derivative contracts outstanding at September 30, 2013:

 

     Expected Maturity Date  
                       Total/  
     2013     2014     2015     2016     Average  

Diesel Fixed Forward Contracts:

          

Diesel gallons (millions)

     7       24       13       3       47  

Average rate ($/gallon)

     2.90       2.87       2.77       2.69       2.84  

Expected hedge ratio

     70     62     33     10  

Forward Starting Swap Contracts

During 2011, Newmont entered into forward starting interest rate swap contracts with a total notional value of $2,000. These contracts hedged movements in treasury rates related to a debt issuance that occurred in the first quarter of 2012. On March 8, 2012, Newmont closed its sale of $2,500 senior notes consisting of 3.5% senior notes due 2022 in the principal amount of $1,500 (10-year notes), and 4.875% senior notes due 2042 in the principal amount of $1,000 (30-year notes). As a result, the forward-starting interest rate swaps were settled for $362, of which $349 represented the effective portion of the hedging instrument included in Accumulated other comprehensive income (loss). The net proceeds from the debt issuance were adjusted by the settlement amount of the swap contracts and included as a financing activity in the Condensed Consolidated Statements of Cash Flow.

Derivative Instrument Fair Values

Newmont had the following derivative instruments designated as hedges at September 30, 2013 and December 31, 2012:

 

     Fair Value  
     At September 30, 2013  
     Other
Current
Assets
     Other Long-
Term Assets
     Other
Current
Liabilities
     Other Long-
Term
Liabilities
 

Foreign currency exchange contracts:

           

A$ operating fixed forwards

   $ 26      $ 18      $ 42      $ 84  

NZ$ operating fixed forwards

     2        —          —          —    

Diesel fixed forwards

     1        —          1        1  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total derivative instruments (Notes 19 and 21)

   $ 29      $ 18      $ 43      $ 85  
  

 

 

    

 

 

    

 

 

    

 

 

 
     Fair Value  
     At December 31, 2012  
     Other
Current
Assets
     Other Long-
Term Assets
     Other
Current
Liabilities
     Other Long-
Term
Liabilities
 

Foreign currency exchange contracts:

           

A$ operating fixed forwards

   $ 108        143        —          1  

NZ$ operating fixed forwards

     2        —          —          —    

Diesel fixed forwards

     2        1        1        1  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total derivative instruments (Notes 19 and 21)

   $ 112      $ 144      $ 1      $ 2  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

(dollars in millions, except per share, per ounce and per pound amounts)

 

The following tables show the location and amount of gains (losses) reported in the Company’s Condensed Consolidated Financial Statements related to the Company’s cash flow hedges.

 

     Foreign Currency      Diesel Forward      Forward Starting  
     Exchange Contracts      Contracts      Swap Contracts  
     2013     2012      2013     2012      2013     2012  

For the three months ended September 30,

              

Cash flow hedging relationships:

              

Gain recognized in other comprehensive income (loss) (effective portion)

   $ 77     $ 70      $ 3     $ 14      $ —       $ —    

Gain (loss) reclassified from Accumulated other comprehensive income into income (loss) (effective portion) (1) 

     8       40        1       2        (5     (3

For the nine months ended September 30,

              

Cash flow hedging relationships:

              

Gain (loss) recognized in other comprehensive income (loss) (effective portion)

   $ (291   $ 156      $ (1   $ 10      $ —       $ 36  

Gain (loss) reclassified from Accumulated other comprehensive income into income (loss) (effective portion) (1) 

     68       125        1       6        (14     (7

Gain reclassified from Accumulated other comprehensive income into income (loss) (ineffective portion) (2) 

     —         —          —         —          —         2  

 

(1) The gain (loss) recognized for the effective portion of cash flow hedges is included in Cost Applicable to Sales, Write-downs and Interest expense, net.
(2)  The ineffective portion recognized for cash flow hedges is included in Other income, net.

The amount to be reclassified from Accumulated other comprehensive income(loss), net of tax to income for derivative instruments during the next 12 months is a loss of approximately $22.

Provisional Copper and Gold Sales

The Company’s provisional copper and gold sales contain an embedded derivative that is required to be separated from the host contract for accounting purposes. The host contract is the receivable from the sale of the gold and copper concentrates at the prevailing indices’ prices at the time of sale. The embedded derivative, which does not qualify for hedge accounting, is marked to market through earnings each period prior to final settlement.

London Metal Exchange (“LME”) copper prices averaged $3.21 per pound during the three months ended September 30, 2013, compared with the Company’s recorded average provisional price of $3.16 per pound before mark-to-market adjustments and treatment and refining charges. LME copper prices averaged $3.35 per pound during the nine months ended September 30, 2013, compared with the Company’s recorded average provisional price of $3.30 per pound before mark-to-market adjustments and treatment and refining charges. During the three and nine months ended September 30, 2013, changes in copper prices resulted in a provisional pricing mark-to-market gains of $14 ($0.25 per pound) and loss of $10 ($0.06 per pound), respectively. At September 30, 2013, Newmont had copper sales of 59 million pounds priced at an average of $3.31 per pound, subject to final pricing over the next several months.

The average London P.M. fix for gold was $1,326 per ounce during the three months ended September 30, 2013, compared with the Company’s recorded average provisional price of $1,330 per ounce before mark-to-market adjustments and treatment and refining charges. The average London P.M. fix for gold was $1,456 per ounce during the nine months ended September 30, 2013, compared to the Company’s recorded average provisional price of $1,452 per ounce before mark-to-market adjustments and treatment and refining charges. During the three and nine months ended September 30, 2013, changes in gold prices resulted in a provisional pricing mark-to-market gains of $9 ($6 per ounce) and loss of $13 ($3 per ounce), respectively. At September 30, 2013, Newmont had gold sales of 50,000 ounces priced at an average of $1,327 per ounce, subject to final pricing over the next several months.

 

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

(dollars in millions, except per share, per ounce and per pound amounts)

 

NOTE 16 INVESTMENTS

 

     At September 30, 2013  
     Cost/Equity      Unrealized     Fair/Equity  
     Basis      Gain      Loss     Basis  

Current:

          

Marketable Equity Securities:

          

Gabriel Resources Ltd.

     75        —          (33     42  

Paladin Energy Ltd.

     24        —          —         24  

Other

     25        4        (4     25  
  

 

 

    

 

 

    

 

 

   

 

 

 
   $ 124      $ 4      $ (37   $ 91  
  

 

 

    

 

 

    

 

 

   

 

 

 

Long-term:

          

Marketable Debt Securities:

          

Asset backed commercial paper

   $ 23      $ —        $ (1   $ 22  

Auction rate securities

     7        —          (3     4  

Corporate

     13        —          (1     12  
  

 

 

    

 

 

    

 

 

   

 

 

 
     43        —          (5     38  
  

 

 

    

 

 

    

 

 

   

 

 

 

Marketable Equity Securities:

          

Regis Resources Ltd.

     166        198        —         364  

Other

     30        2        (4     28  
  

 

 

    

 

 

    

 

 

   

 

 

 
     196        200        (4     392  
  

 

 

    

 

 

    

 

 

   

 

 

 

Other investments, at cost

     13        —          —         13  

Investment in Affiliates:

          

Minera La Zanja S.R.L.

     81        —          —         81  

Novo Resources Corp.

     16        —          —         16  
  

 

 

    

 

 

    

 

 

   

 

 

 
   $ 349      $ 200      $ (9   $ 540  
  

 

 

    

 

 

    

 

 

   

 

 

 

 

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Table of Contents

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

(dollars in millions, except per share, per ounce and per pound amounts)

 

     At December 31, 2012  
     Cost/Equity      Unrealized     Fair/Equity  
     Basis      Gain      Loss     Basis  

Current:

          

Marketable Equity Securities:

          

Paladin Energy Ltd.

   $ 60      $ —        $ (3   $ 57  

Other

     17        14        (2     29  
  

 

 

    

 

 

    

 

 

   

 

 

 
   $ 77      $ 14      $ (5   $ 86  
  

 

 

    

 

 

    

 

 

   

 

 

 

Long-term:

          

Marketable Debt Securities:

          

Asset backed commercial paper

   $ 25      $ —        $ (6   $ 19  

Auction rate securities

     7        —          (2     5  

Corporate

     14        —          —         14  
  

 

 

    

 

 

    

 

 

   

 

 

 
     46        —          (8     38  
  

 

 

    

 

 

    

 

 

   

 

 

 

Marketable Equity Securities:

          

Canadian Oil Sands Ltd.

     310        318        —         628  

Gabriel Resources Ltd.

     78        42        —         120  

Regis Resources Ltd.

     166        352        —         518  

Other

     51        14        —         65  
  

 

 

    

 

 

    

 

 

   

 

 

 
     605        726        —         1,331  
  

 

 

    

 

 

    

 

 

   

 

 

 

Other investments, at cost

     12        —          —         12  

Investment in Affiliates:

          

Minera La Zanja S.R.L.

     65        —          —         65  
  

 

 

    

 

 

    

 

 

   

 

 

 
   $ 728      $ 726      $ (8   $ 1,446  
  

 

 

    

 

 

    

 

 

   

 

 

 

In September 2013, the Company purchased a 35.7% share of Novo Resources Corporation (“Novo”) for approximately $16. Novo owns a majority of the Beaton’s Creek discovery with Millennium Minerals in the Pilbara region of Western Australia. The Company accounts for this ownership interest as an equity method investment.

On July 8, 2013, the Company sold its investment in Canadian Oil Sands Limited for $587, resulting in a pretax gain of $280 recorded in Other income, net.

During the three and nine months ended September 30, 2013, the Company recognized impairments for other-than-temporary declines in value of $41 and $52, respectively, for marketable equity securities, including $36 in the three and nine months related to its holdings of Paladin Energy, Ltd. During the three and nine months ended September 30, 2012, the Company recognized impairments for other-than-temporary declines in value of $7 and $39 for marketable equity securities.

The following tables present the gross unrealized losses and fair value of the Company’s investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by length of time that the individual securities have been in a continuous unrealized loss position:

 

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

(dollars in millions, except per share, per ounce and per pound amounts)

 

     Less than 12 Months      12 Months or Greater      Total  

At September 30, 2013

   Fair Value      Unrealized
Losses
     Fair Value      Unrealized
Losses
     Fair Value      Unrealized
Losses
 

Marketable equity securities

   $ 73      $ 41      $ —        $ —        $ 73      $ 41  

Asset backed commercial paper

     —          —          22        1        22        1  

Auction rate securities

     —          —          4        3        4        3  

Corporate debt securities

     12        1        —          —          12        1  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   $ 85      $ 42      $ 26      $ 4      $ 111      $ 46  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     Less than 12 Months      12 Months or Greater      Total  

At December 31, 2012

   Fair Value      Unrealized
Losses
     Fair Value      Unrealized
Losses
     Fair Value      Unrealized
Losses
 

Marketable equity securities

   $ 79      $ 5      $ —        $ —        $ 79      $ 5  

Asset backed commercial paper

     —          —          19        6        19        6  

Auction rate securities

     —          —          5        2        5        2  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   $ 79      $ 5      $ 24      $ 8      $ 103      $ 13  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

While the fair values of the Company’s investments in asset backed commercial paper and auction rate securities are below their respective cost, the Company views these declines as temporary. The Company intends to hold its investment in auction rate securities and asset backed commercial paper until maturity or such time that the market recovers and therefore considers these losses temporary.

NOTE 17 INVENTORIES

 

     At September 30,      At December 31,  
     2013      2012  

In-process

   $ 102      $ 143  

Concentrate

     140        152  

Precious metals

     34        31  

Materials, supplies and other

     517        470  
  

 

 

    

 

 

 
   $ 793      $ 796  
  

 

 

    

 

 

 

The Company recorded write-downs of $13 and $3, classified as components of Costs applicable to sales and Amortization, respectively, for the first nine months of 2013, to reduce the carrying value of inventories to net realizable value. Of the write-downs in 2013, $1 is related to Nevada, $7 to Boddington, $1 to Other Australia/New Zealand and $7 to Batu Hijau.

 

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

(dollars in millions, except per share, per ounce and per pound amounts)

 

NOTE 18 STOCKPILES AND ORE ON LEACH PADS

 

     At September 30,      At December 31,  
     2013      2012  

Current:

     

Stockpiles

   $ 544      $ 602  

Ore on leach pads

     250        184  
  

 

 

    

 

 

 
   $ 794      $ 786  
  

 

 

    

 

 

 

Long-term:

     

Stockpiles

   $ 2,602      $ 2,514  

Ore on leach pads

     249        382  
  

 

 

    

 

 

 
   $ 2,851      $ 2,896  
  

 

 

    

 

 

 

 

     At September 30,      At December 31,  
     2013      2012  

Stockpiles and ore on leach pads:

     

Nevada

   $ 897      $ 699  

La Herradura

     70        57  

Yanacocha

     520        498  

Boddington

     375        474  

Batu Hijau

     1,368        1,543  

Other Australia/New Zealand

     125        173  

Ahafo

     274        235  

Akyem

     16        3  
  

 

 

    

 

 

 
   $ 3,645      $ 3,682  
  

 

 

    

 

 

 

The Company recorded write-downs of $611 and $146, classified as components of Costs applicable to sales and Amortization, respectively, for the first nine months of 2013 to reduce the carrying value of stockpiles and ore on leach pads to net realizable value. The Company recorded write-downs of $27 for the first nine months of 2012. Of the write-downs in 2013, $4 are related to Nevada, $104 to Yanacocha, $133 to Boddington, $462 to Batu Hijau, and $54 to Other Australia/New Zealand. Of the write-downs in 2012, $4 relate to Yanacocha and $23 to Other Australia/New Zealand.

 

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Table of Contents

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

(dollars in millions, except per share, per ounce and per pound amounts)

 

NOTE 19 OTHER ASSETS

 

     At September 30,      At December 31,  
     2013      2012  

Other current assets:

     

Refinery metal inventory and receivable

   $ 1,009      $ 1,183  

Prepaid assets

     232        213  

Derivative instruments

     29        112  

Restricted cash

     —          12  

Other

     113        141  
  

 

 

    

 

 

 
   $ 1,383      $ 1,661  
  

 

 

    

 

 

 

Other long-term assets:

     

Income tax receivable

   $ 219      $ 76  

Goodwill

     132        188  

Intangible assets

     101        136  

Restricted cash

     95        90  

Prepaid royalties

     80        78  

Debt issuance costs

     65        73  

Prepaid maintenance costs

     31        17  

Derivative instruments

     18        144  

Other

     86        70  
  

 

 

    

 

 

 
   $ 827      $ 872  
  

 

 

    

 

 

 

NOTE 20 DEBT

 

     At September 30, 2013      At December 31, 2012  
     Current      Non-Current      Current      Non-Current  

2014 Convertible Senior Notes, net

   $ 554      $ —        $ —        $ 535  

2017 Convertible Senior Notes, net

     —          486        —          471  

2019 Senior Notes, net

     —          897        —          897  

2022 Senior Notes, net

     —          1,490        —          1,489  

2035 Senior Notes, net

     —          598        —          598  

2039 Senior Notes, net

     —          1,088        —          1,087  

2042 Senior Notes, net

     —          992        —          992  

Ahafo project finance facility

     10        30        10        35  

PTNNT revolving credit facility

     —          365        —          180  

Other

     23        3        —          4  
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ 587      $ 5,949      $ 10      $ 6,288  
  

 

 

    

 

 

    

 

 

    

 

 

 

Scheduled minimum debt repayments are $27 for the remainder of 2013, $565 in 2014, $11 in 2015, $11 in 2016, $857 in 2017 and $5,065 thereafter.

Corporate Letter of Credit Facility

In September 2013, the Company entered into a Letter of Credit Facility Agreement (“LC Agreement”) with BNP Paribas, New York Branch. The LC Agreement establishes a $175 letter of credit facility for a three year period to support reclamation obligations. Under the LC Agreement, the Company transferred $153 of letters of credit from the Corporate Revolving Credit Facility to the LC Agreement.

 

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Table of Contents

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

(dollars in millions, except per share, per ounce and per pound amounts)

 

NOTE 21 OTHER LIABILITIES

 

     At September 30,     At December 31,  
     2013     2012  

Other current liabilities:

    

Refinery metal payable

   $ 1,009     $ 1,183  

Accrued operating costs

     213       336  

Accrued capital expenditures

     115       172  

Interest

     82       74  

Reclamation and remediation liabilities

     73       82  

Deferred income tax

     66       65  

Derivative instruments

     43       1  

Royalties

     34       42  

Holt property royalty

     16       21  

Boddington contingent consideration

     —         26  

Taxes other than income and mining

     7       14  

Other

     54       68  
  

 

 

   

 

 

 
   $ 1,712     $ 2,084  
  

 

 

   

 

 

 

Other long-term liabilities:

    

Holt property royalty

   $ 133     $ 219  

Derivative instruments

     85       2  

Income and mining taxes

     72       65  

Power supply agreements

     41       46  

Boddington contingent consideration

     28       15  

Deferred income tax from discontinued operations

     24       —    

Other

     46       25  
  

 

 

   

 

 

 
   $ 429     $ 372  
  

 

 

   

 

 

 

 

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Table of Contents

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

(dollars in millions, except per share, per ounce and per pound amounts)

 

NOTE 22 CHANGES IN EQUITY

 

     Nine Months Ended
September 30,
 
     2013     2012  

Common stock:

    

At beginning of period

   $ 787     $ 784  

Stock based awards

     2       2  
  

 

 

   

 

 

 

At end of period

     789       786  
  

 

 

   

 

 

 

Additional paid-in capital:

    

At beginning of period

     8,330       8,408  

Conversion premium on convertible notes

     —         (172

Stock based awards

     61       71  

Sale of noncontrolling interests

     48       —    
  

 

 

   

 

 

 

At end of period

     8,439       8,307  
  

 

 

   

 

 

 

Accumulated other comprehensive income (loss):

    

At beginning of period

     490       652  

Other comprehensive income (loss)

     (546     (57
  

 

 

   

 

 

 

At end of period

     (56     595  
  

 

 

   

 

 

 

Retained earnings:

    

At beginning of period

     4,166       3,052  

Net income (loss) attributable to Newmont stockholders

     (1,296     1,136  

Dividends paid

     (509     (521
  

 

 

   

 

 

 

At end of period

     2,361       3,667  
  

 

 

   

 

 

 

Noncontrolling interests:

    

At beginning of period

     3,175       2,875  

Net income (loss) attributable to noncontrolling interests

     (172     285  

Dividends paid to noncontrolling interests

     (2     —    

Sale of noncontrolling interests, net

     7       —    

Other comprehensive income

     1       1  
  

 

 

   

 

 

 

At end of period

     3,009       3,161  
  

 

 

   

 

 

 

Total equity

   $ 14,542     $ 16,516  
  

 

 

   

 

 

 

 

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Table of Contents

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

(dollars in millions, except per share, per ounce and per pound amounts)

 

NOTE 23 RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

 

     Unrealized
gain on
marketable
securities,
net
    Foreign
currency
translation
adjustments
    Pension
and other
post-
retirement
benefit
adjustments
    Changes in
fair value
of cash
flow hedge
instruments
    Total  

December 31, 2012

   $ 542     $ 177     $ (276   $ 47     $ 490  

Change in other comprehensive income (loss) before reclassifications

     (219     (29     107       (189     (330

Reclassifications from accumulated other comprehensive income (loss)

     (194     —         17       (39     (216
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net current-period other comprehensive income (loss)

     (413     (29     124       (228     (546
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

September 30, 2013

   $ 129     $ 148     $ (152   $ (181   $ (56
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

Details about Accumulated Other Comprehensive
Income (Loss) Components

   Amount Reclassified from Accumulated
Other Comprehensive Income (Loss)
    Affected Line Item in the
Condensed Consolidated
Statement of Income (Loss)
 
     Three Months Ended
September 30, 2013
    Nine Months Ended
September 30, 2013
       

Marketable securities adjustments:

      

Sale of marketable securities

   $ (280   $ (280     Other income, net   

Impairment of marketable securities

     41       52       Other income, net   
  

 

 

   

 

 

   

Total before tax

     (239     (228  

Tax benefit (expense)

     37       34    
  

 

 

   

 

 

   

Net of tax

   $ (202   $ (194  
  

 

 

   

 

 

   

Pension liability adjustments:

      

Amortization, net

   $ 8     $ 26 (1)   
  

 

 

   

 

 

   

Total before tax

     8       26    

Tax (expense) benefit

     (3     (9  
  

 

 

   

 

 

   

Net of tax

   $ 5     $ 17    
  

 

 

   

 

 

   

Hedge instruments adjustments:

      

Operating cash flow hedges

   $ (9   $ (88     Costs applicable to sales   

Capital cash flow hedges

     —         1       Amortization   

Capital cash flow hedges

     —         18       Write-downs   

Forward starting swap hedges

     5       14       Interest expense, net   
  

 

 

   

 

 

   

Total before tax

     (4     (55  

Tax benefit (expense)

     —         16    
  

 

 

   

 

 

   

Net of tax

   $ (4   $ (39  
  

 

 

   

 

 

   

Total reclassifications for the period, net of tax

   $ (201   $ (216  
  

 

 

   

 

 

   

 

(1) This accumulated other comprehensive income (loss) component is included in General and administrative and costs that benefit the inventory/production process. Refer to Note 2 in the Newmont Annual Report on Form 10-K for the year ended December 31, 2012 for information on costs that benefit the inventory/production process.

 

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

(dollars in millions, except per share, per ounce and per pound amounts)

 

NOTE 24 NET CHANGE IN OPERATING ASSETS AND LIABILITIES

Net cash provided from operations attributable to the net change in operating assets and liabilities is composed of the following:

 

     Nine Months Ended
September 30,
 
     2013     2012  

Decrease (increase) in operating assets:

    

Trade and accounts receivable

   $ 255     $ (7

Inventories, stockpiles and ore on leach pads

     (609     (603

EGR refinery assets

     166       177  

Other assets

     (52     (81

Decrease in operating liabilities:

    

Accounts payable and other accrued liabilities

     (111     (291

EGR refinery liabilities

     (166     (177

Reclamation liabilities

     (41     (57
  

 

 

   

 

 

 
   $ (558   $ (1,039
  

 

 

   

 

 

 

NOTE 25 CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

The following Condensed Consolidating Financial Statements are presented to satisfy disclosure requirements of Rule 3-10(e) of Regulation S-X resulting from the inclusion of Newmont USA Limited (“Newmont USA”), a wholly-owned subsidiary of Newmont, as a co-registrant with Newmont on debt securities issued under a shelf registration statement on Form S-3 filed under the Securities Act of 1933 under which securities of Newmont (including debt securities guaranteed by Newmont USA) may be issued (the “Shelf Registration Statement”). In accordance with Rule 3-10(e) of Regulation S-X, Newmont USA, as the subsidiary guarantor, is 100% owned by Newmont, the guarantees are full and unconditional, and no other subsidiary of Newmont guaranteed any security issued under the Shelf Registration Statement. There are no restrictions on the ability of Newmont or Newmont USA to obtain funds from its subsidiaries by dividend or loan.

At December 31, 2012, errors were identified in the previously reported condensed consolidating financial statements resulting from incorrectly applying the provisions of Rule 3-10(e) of Regulation S-X related to the presentation of the financial information of its subsidiary guarantor, Newmont USA. In the previously reported information, the Company presented Newmont USA on a consolidated basis with its non-guarantor subsidiaries and under Rule 3-10 of Regulation S-X Newmont USA should have presented its investment in subsidiaries based upon its proportionate share of its non-guarantor subsidiaries’ net assets (similar to the equity method of accounting). In addition, the Company corrected the Newmont Mining Corporation column for investments in subsidiaries previously presented in the Eliminations column. The tables following the revised condensed consolidating financial statements illustrate the effects of the errors, which relate to the columns for Newmont Mining Corporation, Newmont USA, Other Subsidiaries and Eliminations, on previously reported condensed consolidating financial information for the three and nine months ended September 30, 2012.

The errors to the Newmont USA column for the incorrect presentation resulted in no change in previously reported line items for net income attributable to Newmont and stockholders’ equity. It did however have a significant impact on the previously reported cash balance, and cash flow from operations, investing and financing activities of Newmont USA as a result of the deconsolidation of its subsidiaries and the one line proportionate accounting pick up. Further, the Other Subsidiaries column changed by corresponding adjustments and to give effect to intercompany balances to include the non-guarantor subsidiaries of Newmont USA and the Eliminations column changes as a result of the above changes. In addition, the Company corrected an error in the Newmont Mining Corporation column related to stockholders’ equity and investment in subsidiaries. This was a result of a gain associated with a partial sale of a subsidiary that was previously included in the Eliminations column. The cash flow statement in the Newmont Mining Corporation column was revised to reflect earnings from subsidiaries, net of dividends received.

 

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

(dollars in millions, except per share, per ounce and per pound amounts)

 

The Company concluded these errors were not material individually or in the aggregate to any of the previously issued financial statements taken as a whole. These errors had no impact on the consolidated financial statements of Newmont or any debt covenants and had no impact on the ability of Newmont’s subsidiaries to dividend cash to Newmont. The impact of these corrections to the applicable prior year period is reflected in the revised financial information and notes below.

In addition to the above, in April of the current year the Company merged one of its subsidiaries into Newmont USA. As a result of this merger, the prior periods presented have been revised to reflect this change as if the transaction had occurred at the beginning of the earliest period presented in accordance with the accounting guidance for business combinations between entities under common control.

 

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

(dollars in millions, except per share, per ounce and per pound amounts)

 

     Three Months Ended September 30, 2013  
                             Newmont  
     Newmont                       Mining  
     Mining     Newmont     Other           Corporation  

Condensed Consolidating Statement of Income

   Corporation     USA     Subsidiaries     Eliminations     Consolidated  

Sales

   $ —       $ 587     $ 1,396     $ —       $ 1,983  

Costs and expenses

          

Costs applicable to sales (1)

     —         229       807       —         1,036  

Amortization

     —         50       249       —         299  

Reclamation and remediation

     —         2       18       —         20  

Exploration

     —         10       50       —         60  

Advanced projects, research and development

     —         14       53       —         67  

General and administrative

     —         23       25       —         48  

Write-downs

     —         —         3       —         3  

Other expense, net

     —         21       63       —         84  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     —         349       1,268       —         1,617  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Other income (expense)

          

Other income, net

     (12     2       300       —         290  

Interest income—intercompany

     31       7       6       (44     —    

Interest expense—intercompany

     (2     —         (42     44       —    

Interest expense, net

     (78     (1     3       —         (76
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     (61     8       267       —         214  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before income and mining tax and other items

     (61     246       395       —         580  

Income and mining tax benefit (expense)

     21       (46     (129     —         (154

Equity income (loss) of affiliates

     448       (92     20       (375     1  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations

     408       108       286       (375     427  

Income (loss) from discontinued operations

     —         —         (21     —         (21
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

     408       108       265       (375     406  

Net loss (income) attributable to noncontrolling interests

     —         —         (4     6       2  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to Newmont stockholders

   $ 408     $ 108     $ 261     $ (369   $ 408  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income (loss)

   $ 423     $ 218     $ 173     $ (391   $ 423  

Comprehensive loss (income) attributable to noncontrolling interests

     —         —         (5     5       —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income (loss) attributable to Newmont stockholders

   $ 423     $ 218     $ 168     $ (386   $ 423  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)  Excludes Amortization and Reclamation and remediation.

 

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

(dollars in millions, except per share, per ounce and per pound amounts)

 

     Three Months Ended September 30, 2012  
                             Newmont  
     Newmont                       Mining  
     Mining     Newmont     Other           Corporation  

Condensed Consolidating Statement of Income

   Corporation     USA     Subsidiaries     Eliminations     Consolidated  

Sales

   $ —       $ 681     $ 1,799     $ —       $ 2,480  

Costs and expenses

          

Costs applicable to sales (1)

     —         245       843       —         1,088  

Amortization

     —         53       219       —         272  

Reclamation and remediation

     —         3       14       —         17  

Exploration

     —         31       84       —         115  

Advanced projects, research and development

     —         11       63       —         74  

General and administrative

     —         40       11       —         51  

Other expense, net

     —         19       112       —         131  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     —         402       1,346       —         1,748  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Other income (expense)

          

Other income, net

     —         11       41       —         52  

Interest income—intercompany

     46       10       (6     (50     —    

Interest expense—intercompany

     (3     —         (47     50       —    

Interest expense, net

     (67     (3     3       —         (67
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     (24     18       (9     —         (15
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before income and mining tax and other items

     (24     297       444       —         717  

Income and mining tax benefit (expense)

     8       (82     (154     —         (228

Equity income (loss) of affiliates

     383       (8     40       (424     (9
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations

     367       207       330       (424     480  

Income (loss) from discontinued operations

     —         —         (33     —         (33
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

     367       207       297       (424     447  

Net loss (income) attributable to noncontrolling interests

     —         —         (103     23       (80
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to Newmont stockholders

   $ 367     $ 207     $ 194     $ (401   $ 367  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income (loss)

   $ 601     $ 224     $ 576     $ (719   $ 682  

Comprehensive loss (income) attributable to noncontrolling interests

     —         —         (104     23       (81
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income (loss) attributable to Newmont stockholders

   $ 601     $ 224     $ 472     $ (696   $ 601  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)  Excludes Amortization and Reclamation and remediation.

 

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

(dollars in millions, except per share, per ounce and per pound amounts)

 

     Nine Months Ended September 30, 2013  
                       Newmont  
     Newmont                 Mining  
     Mining     Newmont     Other           Corporation  

Condensed Consolidating Statement of Income

   Corporation     USA     Subsidiaries     Eliminations     Consolidated  

Sales

   $ —       $ 1,635     $ 4,518     $ —       $ 6,153  

Costs and expenses

          

Costs applicable to sales (1)

     —         725       3,008       —         3,733  

Amortization

     —         146       835       —         981  

Reclamation and remediation

     —         6       50       —         56  

Exploration

     —         38       157       —         195  

Advanced projects, research and development

     —         37       128       —         165  

General and administrative

     —         77       81       —         158  

Write-downs

     —         —         2,265       —         2,265  

Other expense, net

     —         51       209       —         260  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     —         1,080       6,733       —         7,813  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Other income (expense)

          

Other income, net

     (10     11       365       —         366  

Interest income—intercompany

     113       22       16       (151     —    

Interest expense—intercompany

     (8     —         (143     151       —    

Interest expense, net

     (211     (7     7       —         (211
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     (116     26       245       —         155  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before income and mining tax and other items

     (116     581       (1,970     —         (1,505

Income and mining tax benefit (expense)

     40       (167     117       —         (10

Equity income (loss) of affiliates

     (1,220     (439     (100     1,753       (6
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations

     (1,296     (25     (1,953     1,753       (1,521

Income (loss) from discontinued operations

     —         —         53       —         53  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

     (1,296     (25     (1,900     1,753       (1,468

Net loss (income) attributable to noncontrolling interests

     —         —         252       (80     172  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to Newmont stockholders

   $ (1,296   $ (25   $ (1,648   $ 1,673     $ (1,296
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income (loss)

   $ (1,842   $ 77     $ (2,649   $ 2,401     $ (2,013

Comprehensive loss (income) attributable to noncontrolling interests

     —         —         252       (81     171  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income (loss) attributable to Newmont stockholders

   $ (1,842   $ 77     $ (2,397   $ 2,320     $ (1,842
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)  Excludes Amortization and Reclamation and remediation.

 

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

(dollars in millions, except per share, per ounce and per pound amounts)

 

     Nine Months Ended September 30, 2012  
                             Newmont  
     Newmont                       Mining  
     Mining     Newmont     Other           Corporation  

Condensed Consolidating Statement of Income

   Corporation     USA     Subsidiaries     Eliminations     Consolidated  

Sales

   $ —       $ 1,867     $ 5,525     $ —       $ 7,392  

Costs and expenses

          

Costs applicable to sales (1)

     —         745       2,362       —         3,107  

Amortization

     —         134       617       —         751  

Reclamation and remediation

     —         8       41       —         49  

Exploration

     —         74       235       —         309  

Advanced projects, research and development

     —         33       225       —         258  

General and administrative

     —         105       57       —         162  

Other expense, net

     —         36       341       —         377  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     —         1,135       3,878       —         5,013  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Other income (expense)

          

Other income, net

     2       23       96       —         121  

Interest income—intercompany

     125       24       (6     (143     —    

Interest expense—intercompany

     (11     —         (132     143       —    

Interest expense, net

     (186     (6     2       —         (190
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     (70     41       (40     —         (69
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before income and mining tax and other items

     (70     773       1,607       —         2,310  

Income and mining tax benefit (expense)

     24       (210     (560     —         (746

Equity income (loss) of affiliates

     1,182       362       157       (1,740     (39
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations

     1,136       925       1,204       (1,740     1,525  

Income (loss) from discontinued operations

     —         —         (104     —         (104
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

     1,136       925       1,100       (1,740     1,421  

Net loss (income) attributable to noncontrolling interests

     —         —         (373     88       (285
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to Newmont stockholders

   $ 1,136     $ 925     $ 727     $ (1,652   $ 1,136