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 March 31, 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
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 Fiddlers Green Circle | ||
Greenwood Village, Colorado | 80111 | |
(Address of Principal Executive Offices) | (Zip Code) |
Registrants 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 492,319,340 shares of common stock outstanding on April 22, 2013 (and 4,893,906 exchangeable shares).
PART IFINANCIAL INFORMATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited, in millions except per share)
Three Months Ended | ||||||||
March 31, | ||||||||
2013 | 2012 | |||||||
Sales (Note 3) |
$ | 2,177 | $ | 2,683 | ||||
Costs and expenses |
||||||||
Costs applicable to sales (1) (Note 3) |
1,044 | 1,017 | ||||||
Amortization (Note 3) |
267 | 231 | ||||||
Reclamation and remediation (Note 4) |
18 | 16 | ||||||
Exploration |
59 | 88 | ||||||
Advanced projects, research and development |
52 | 102 | ||||||
General and administrative |
56 | 54 | ||||||
Other expense, net (Note 5) |
100 | 120 | ||||||
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1,596 | 1,628 | |||||||
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Other income (expense) |
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Other income, net (Note 6) |
26 | 33 | ||||||
Interest expense, net |
(65 | ) | (52 | ) | ||||
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(39 | ) | (19 | ) | |||||
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Income before income and mining tax and other items |
542 | 1,036 | ||||||
Income and mining tax expense (Note 7) |
(181 | ) | (343 | ) | ||||
Equity income (loss) of affiliates |
(4 | ) | (19 | ) | ||||
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Income from continuing operations |
357 | 674 | ||||||
Income (loss) from discontinued operations (Note 8) |
| (71 | ) | |||||
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Net income |
357 | 603 | ||||||
Net income attributable to noncontrolling interests (Note 9) |
(42 | ) | (113 | ) | ||||
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Net income attributable to Newmont stockholders |
$ | 315 | $ | 490 | ||||
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Net income attributable to Newmont stockholders: |
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Continuing operations |
$ | 315 | $ | 561 | ||||
Discontinued operations |
| (71 | ) | |||||
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$ | 315 | $ | 490 | |||||
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Income per common share (Note 10) |
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Basic: |
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Continuing operations |
$ | 0.63 | $ | 1.13 | ||||
Discontinued operations |
| (0.14 | ) | |||||
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$ | 0.63 | $ | 0.99 | |||||
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Diluted: |
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Continuing operations |
$ | 0.63 | $ | 1.11 | ||||
Discontinued operations |
| (0.14 | ) | |||||
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$ | 0.63 | $ | 0.97 | |||||
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Cash dividends declared per common share |
$ | 0.425 | $ | 0.35 |
(1) | Excludes Amortization and Reclamation and remediation. |
The accompanying notes are an integral part of the condensed consolidated financial statements.
1
STATEMENTS OF CONDENSED CONSOLIDATED COMPREHENSIVE INCOME (LOSS)
(unaudited, in millions)
Three Months Ended March 31, | ||||||||
2013 | 2012 | |||||||
(in millions) | ||||||||
Net income |
$ | 357 | $ | 603 | ||||
Other comprehensive income (loss): |
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Unrealized loss on marketable securities, net of $38 and $23 tax benefit, respectively |
(52 | ) | (40 | ) | ||||
Foreign currency translation adjustments |
(12 | ) | 10 | |||||
Change in pension and other post-retirement benefits, net of $5 and $2 tax expense, respectively |
5 | 4 | ||||||
Change in fair value of cash flow hedge instruments, net of $15 and $(26) tax benefit (expense), respectively |
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Net change from periodic revaluations |
21 | 69 | ||||||
Net amount reclassified to income |
(24 | ) | (35 | ) | ||||
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Net unrecognized (loss) gain on derivatives |
(3 | ) | 34 | |||||
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Other comprehensive income |
(62 | ) | 8 | |||||
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Comprehensive income |
$ | 295 | $ | 611 | ||||
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Comprehensive income attributable to: |
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Newmont stockholders |
$ | 254 | $ | 496 | ||||
Noncontrolling interests |
41 | 115 | ||||||
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$ | 295 | $ | 611 | |||||
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The accompanying notes are an integral part of the condensed consolidated financial statements.
2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in millions)
Three Months Ended | ||||||||
March 31, | ||||||||
2013 | 2012 | |||||||
Operating activities: |
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Net income |
$ | 357 | $ | 603 | ||||
Adjustments: |
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Amortization |
267 | 231 | ||||||
Stock based compensation and other non-cash benefits |
19 | 17 | ||||||
Reclamation and remediation |
18 | 16 | ||||||
Loss from discontinued operations |
| 71 | ||||||
Impairment of marketable securities |
4 | 24 | ||||||
Deferred income taxes |
(11 | ) | (55 | ) | ||||
Gain on asset sales, net |
(1 | ) | (10 | ) | ||||
Other operating adjustments and write-downs |
74 | 72 | ||||||
Net change in operating assets and liabilities (Note 23) |
(288 | ) | (356 | ) | ||||
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Net cash provided from continuing operations |
439 | 613 | ||||||
Net cash used in discontinued operations |
(6 | ) | (4 | ) | ||||
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Net cash provided from operations |
433 | 609 | ||||||
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Investing activities: |
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Additions to property, plant and mine development |
(510 | ) | (696 | ) | ||||
Acquisitions, net |
(8 | ) | (11 | ) | ||||
Sale of marketable securities |
1 | | ||||||
Purchases of marketable securities |
(1 | ) | (143 | ) | ||||
Proceeds from sale of other assets |
25 | 12 | ||||||
Other |
(14 | ) | (17 | ) | ||||
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Net cash used in investing activities |
(507 | ) | (855 | ) | ||||
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Financing activities: |
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Proceeds from debt, net |
80 | 3,346 | ||||||
Repayment of debt |
| (1,907 | ) | |||||
Payment of conversion premium on debt |
| (172 | ) | |||||
Proceeds from stock issuance, net |
1 | 2 | ||||||
Sale of noncontrolling interests |
32 | | ||||||
Acquisition of noncontrolling interests |
(6 | ) | | |||||
Dividends paid to common stockholders |
(211 | ) | (173 | ) | ||||
Other |
(1 | ) | (2 | ) | ||||
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Net cash provided from (used in) financing activities |
(105 | ) | 1,094 | |||||
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Effect of exchange rate changes on cash |
(4 | ) | 4 | |||||
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Net change in cash and cash equivalents |
(183 | ) | 852 | |||||
Cash and cash equivalents at beginning of period |
1,561 | 1,760 | ||||||
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Cash and cash equivalents at end of period |
$ | 1,378 | $ | 2,612 | ||||
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The accompanying notes are an integral part of the condensed consolidated financial statements.
3
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in millions)
At March 31, | At December 31, | |||||||
2013 | 2012 | |||||||
ASSETS | ||||||||
Cash and cash equivalents |
$ | 1,378 | $ | 1,561 | ||||
Trade receivables |
212 | 283 | ||||||
Accounts receivable |
553 | 577 | ||||||
Investments (Note 15) |
75 | 86 | ||||||
Inventories (Note 16) |
846 | 796 | ||||||
Stockpiles and ore on leach pads (Note 17) |
956 | 786 | ||||||
Deferred income tax assets |
297 | 195 | ||||||
Other current assets (Note 18) |
1,309 | 1,661 | ||||||
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Current assets |
5,626 | 5,945 | ||||||
Property, plant and mine development, net |
18,151 | 18,010 | ||||||
Investments (Note 15) |
1,361 | 1,446 | ||||||
Stockpiles and ore on leach pads (Note 17) |
2,952 | 2,896 | ||||||
Deferred income tax assets |
473 | 481 | ||||||
Other long-term assets (Note 18) |
888 | 872 | ||||||
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Total assets |
$ | 29,451 | $ | 29,650 | ||||
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LIABILITIES | ||||||||
Debt (Note 19) |
$ | 10 | $ | 10 | ||||
Accounts payable |
590 | 657 | ||||||
Employee-related benefits |
290 | 339 | ||||||
Income and mining taxes |
109 | 51 | ||||||
Other current liabilities (Note 20) |
1,653 | 2,084 | ||||||
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Current liabilities |
2,652 | 3,141 | ||||||
Debt (Note 19) |
6,379 | 6,288 | ||||||
Reclamation and remediation liabilities (Note 4) |
1,465 | 1,457 | ||||||
Deferred income tax liabilities |
862 | 858 | ||||||
Employee-related benefits |
598 | 586 | ||||||
Other long-term liabilities (Note 20) |
370 | 372 | ||||||
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Total liabilities |
12,326 | 12,702 | ||||||
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Commitments and contingencies (Note 25) |
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EQUITY | ||||||||
Common stock |
788 | 787 | ||||||
Additional paid-in capital |
8,407 | 8,330 | ||||||
Accumulated other comprehensive income |
429 | 490 | ||||||
Retained earnings |
4,270 | 4,166 | ||||||
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Newmont stockholders equity |
13,894 | 13,773 | ||||||
Noncontrolling interests |
3,231 | 3,175 | ||||||
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Total equity |
17,125 | 16,948 | ||||||
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Total liabilities and equity |
$ | 29,451 | $ | 29,650 | ||||
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The accompanying notes are an integral part of the condensed consolidated financial statements.
4
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 Newmonts 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 March 31, 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 Newmonts 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. 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
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 Companys 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.
5
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 Companys reportable segments are based upon the Companys management structure that is focused on the geographic region for the Companys operations. Segment results for 2012 have been retrospectively revised to reflect an organizational change, effective in the first quarter of 2013, that moved the Indonesia operations to a separately managed region. Geographic regions now include North America, South America, Australia/New Zealand, Indonesia, Africa and Corporate and Other. The financial information relating to the Companys segments is as follows:
Sales | Costs Applicable to Sales |
Amortization | Advanced Projects and Exploration |
Pre-Tax Income (Loss) |
Total Assets |
Capital Expenditures(1) |
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Three Months Ended March 31, 2013 |
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Nevada |
$ | 570 | $ | 272 | $ | 59 | $ | 25 | $ | 209 | $ | 7,680 | $ | 106 | ||||||||||||||
La Herradura |
90 | 40 | 6 | 6 | 37 | 476 | 19 | |||||||||||||||||||||
Other North America |
| | | 1 | (46 | ) | 190 | | ||||||||||||||||||||
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North America |
660 | 312 | 65 | 32 | 200 | 8,346 | 125 | |||||||||||||||||||||
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Yanacocha |
455 | 158 | 70 | 13 | 195 | 3,063 | 48 | |||||||||||||||||||||
Conga |
| | | 1 | 1 | 1,646 | 86 | |||||||||||||||||||||
Other South America |
| | | 5 | (6 | ) | 101 | 21 | ||||||||||||||||||||
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South America |
455 | 158 | 70 | 19 | 190 | 4,810 | 155 | |||||||||||||||||||||
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Boddington: |
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Gold |
329 | 174 | 42 | |||||||||||||||||||||||||
Copper |
65 | 48 | 10 | |||||||||||||||||||||||||
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Total |
394 | 222 | 52 | | 114 | 4,627 | 25 | |||||||||||||||||||||
Other Australia/New Zealand |
392 | 232 | 46 | 12 | 93 | 2,187 | 41 | |||||||||||||||||||||
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Australia/New Zealand |
786 | 454 | 98 | 12 | 207 | 6,814 | 66 | |||||||||||||||||||||
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Batu Hijau: |
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Gold |
11 | 7 | 2 | |||||||||||||||||||||||||
Copper |
70 | 47 | 9 | |||||||||||||||||||||||||
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Total |
81 | 54 | 11 | 6 | (4 | ) | 3,854 | 23 | ||||||||||||||||||||
Other Indonesia |
| | | | 3 | 4 | | |||||||||||||||||||||
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Indonesia |
81 | 54 | 11 | 6 | (1 | ) | 3,858 | 23 | ||||||||||||||||||||
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Ahafo |
195 | 66 | 17 | 13 | 96 | 1,501 | 60 | |||||||||||||||||||||
Akyem |
| | | 3 | (5 | ) | 1,066 | 68 | ||||||||||||||||||||
Other Africa |
| | | 3 | (3 | ) | 1 | | ||||||||||||||||||||
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Africa |
195 | 66 | 17 | 19 | 88 | 2,568 | 128 | |||||||||||||||||||||
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Corporate and Other |
| | 6 | 23 | (142 | ) | 3,055 | | ||||||||||||||||||||
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Consolidated |
$ | 2,177 | $ | 1,044 | $ | 267 | $ | 111 | $ | 542 | $ | 29,451 | $ | 497 | ||||||||||||||
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(1) | Includes a decrease in accrued capital expenditures of $13; consolidated capital expenditures on a cash basis were $510. |
6
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) |
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Three Months Ended March 31, 2012 |
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Nevada |
$ | 723 | $ | 267 | $ | 53 | $ | 34 | $ | 369 | $ | 7,092 | $ | 157 | ||||||||||||||
La Herradura |
93 | 32 | 5 | 6 | 45 | 371 | 21 | |||||||||||||||||||||
Other North America |
| | | | (52 | ) | 175 | | ||||||||||||||||||||
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North America |
816 | 299 | 58 | 40 | 362 | 7,638 | 178 | |||||||||||||||||||||
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Yanacocha |
594 | 161 | 50 | 17 | 349 | 2,745 | 93 | |||||||||||||||||||||
Conga |
| | | 27 | (27 | ) | 1,254 | 147 | ||||||||||||||||||||
Other South America |
| | | 25 | (25 | ) | 74 | 27 | ||||||||||||||||||||
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South America |
594 | 161 | 50 | 69 | 297 | 4,073 | 267 | |||||||||||||||||||||
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Boddington: |
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Gold |
298 | 137 | 32 | |||||||||||||||||||||||||
Copper |
61 | 30 | 6 | |||||||||||||||||||||||||
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Total |
359 | 167 | 38 | 3 | 143 | 4,661 | 23 | |||||||||||||||||||||
Other Australia/New Zealand |
427 | 190 | 37 | 21 | 185 | 1,993 | 73 | |||||||||||||||||||||
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Australia/New Zealand |
786 | 357 | 75 | 24 | 328 | 6,654 | 96 | |||||||||||||||||||||
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Batu Hijau: |
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Gold |
34 | 19 | 3 | |||||||||||||||||||||||||
Copper |
172 | 85 | 16 | |||||||||||||||||||||||||
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Total |
206 | 104 | 19 | 7 | 48 | 3,671 | 33 | |||||||||||||||||||||
Other Indonesia |
| | | | (1 | ) | 2 | | ||||||||||||||||||||
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Indonesia |
206 | 104 | 19 | 7 | 47 | 3,673 | 33 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Ahafo |
281 | 96 | 24 | 11 | 150 | 1,277 | 50 | |||||||||||||||||||||
Akyem |
| | | 4 | (5 | ) | 653 | 85 | ||||||||||||||||||||
Other Africa |
| | | 2 | (2 | ) | 5 | | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Africa |
281 | 96 | 24 | 17 | 143 | 1,935 | 135 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Corporate and Other |
| | 5 | 33 | (141 | ) | 4,988 | 11 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Consolidated |
$ | 2,683 | $ | 1,017 | $ | 231 | $ | 190 | $ | 1,036 | $ | 28,961 | $ | 720 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Includes an increase in accrued capital expenditures of $24; consolidated capital expenditures on a cash basis were $696. |
7
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 Companys Reclamation and remediation expense consisted of:
Three Months Ended March 31, | ||||||||
2013 | 2012 | |||||||
Accretion - operating |
$ | 15 | $ | 14 | ||||
Accretion - non-operating |
3 | 2 | ||||||
|
|
|
|
|||||
$ | 18 | $ | 16 | |||||
|
|
|
|
At March 31, 2013 and December 31, 2012, $1,350 and $1,341, respectively, were accrued for reclamation obligations relating to mineral 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 March 31, 2013 and December 31, 2012, $195 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:
Three Months Ended March 31, | ||||||||
2013 | 2012 | |||||||
Balance at beginning of period |
$ | 1,539 | $ | 1,240 | ||||
Additions, changes in estimates and other |
(3 | ) | 105 | |||||
Liabilities settled |
(9 | ) | (28 | ) | ||||
Accretion expense |
18 | 16 | ||||||
|
|
|
|
|||||
Balance at end of period |
$ | 1,545 | $ | 1,333 | ||||
|
|
|
|
The current portion of Reclamation and remediation liabilities of $80 and $82 at March 31, 2013 and December 31, 2012, respectively, are included in Other current liabilities (see Note 20).
NOTE 5 OTHER EXPENSE, NET
Three Months Ended March 31, |
||||||||
2013 | 2012 | |||||||
TMAC transaction costs |
$ | 45 | $ | | ||||
Regional administration |
18 | 21 | ||||||
Community development |
13 | 31 | ||||||
Restructuring and other |
9 | | ||||||
Western Australia power plant |
4 | 4 | ||||||
World Gold Council Dues |
1 | 3 | ||||||
Hope Bay care and maintenance |
(2 | ) | 50 | |||||
Other |
12 | 11 | ||||||
|
|
|
|
|||||
$ | 100 | $ | 120 | |||||
|
|
|
|
8
NEWMONT MINING CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
NOTE 6 OTHER INCOME, NET
Three Months Ended March 31, | ||||||||
2013 | 2012 | |||||||
Canadian Oil Sands |
$ | 10 | $ | 9 | ||||
Interest |
4 | 5 | ||||||
Derivative ineffectiveness, net |
3 | 2 | ||||||
Refinery income, net |
3 | 5 | ||||||
Development projects, net |
1 | 14 | ||||||
Gain on asset sales, net |
1 | 10 | ||||||
Reduction of allowance for loan receivable |
| 21 | ||||||
Foreign currency exchange, net |
(3 | ) | (15 | ) | ||||
Impairment of marketable securities |
(4 | ) | (24 | ) | ||||
Other |
11 | 6 | ||||||
|
|
|
|
|||||
$ | 26 | $ | 33 | |||||
|
|
|
|
NOTE 7 INCOME AND MINING TAXES
During the first quarter of 2013, the Company recorded estimated income and mining tax expense of $181 resulting in an effective tax rate of 33%. Estimated income and mining tax expense during the first quarter of 2012 was $343 for an effective tax rate of 33%.
The Companys income and mining tax expense differed from the statutory rate of 35% for the following reasons:
Three Months Ended March 31, | ||||||||||||||||
2013 | 2012 | |||||||||||||||
Income before income and mining tax and other items |
$ | 542 | $ | 1,036 | ||||||||||||
|
|
|
|
|||||||||||||
Tax on income at 35% statutory rate |
35 | % | $ | 190 | 35 | % | $ | 363 | ||||||||
Reconciling items: |
||||||||||||||||
Percentage depletion |
(7 | ) | (41 | ) | (7 | ) | (74 | ) | ||||||||
Change in valuation allowance on deferred tax assets |
1 | 6 | 3 | 32 | ||||||||||||
Other |
4 | 26 | 2 | 22 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income and mining tax expense |
33 | % | $ | 181 | 33 | % | $ | 343 | ||||||||
|
|
|
|
|
|
|
|
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 Companys business conducted within the country involved.
At March 31, 2013, the Companys total unrecognized tax benefit was $402 for uncertain income tax positions taken or expected to be taken on income tax returns. Of this, $126 represents the amount of unrecognized tax benefits that, if recognized, would affect the Companys 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 $15 to $20 in the next 12 months.
9
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 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 first quarter of 2012, the Company recorded an additional $71 charge, net of tax benefits of $4, to reflect an increase in future expected production at the Holt property due to new reserve and resource estimates published by St. Andrew.
Net operating cash used in discontinued operations of $6 and $4 in the first quarter of 2013 and 2012 relates to payments on the Holt property royalty.
NOTE 9 NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS
Three Months Ended March 31, | ||||||||
2013 | 2012 | |||||||
Minera Yanacocha |
$ | 57 | $ | 98 | ||||
TMAC |
(12 | ) | | |||||
Batu Hijau |
(3 | ) | 13 | |||||
Other |
| 2 | ||||||
|
|
|
|
|||||
$ | 42 | $ | 113 | |||||
|
|
|
|
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 various Indonesian entities, in accordance with PTNNTs Contract of Work. 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.
10
NEWMONT MINING CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
NOTE 10 INCOME PER COMMON SHARE
Basic income per common share is computed by dividing income available to Newmont common stockholders by the weighted average number of common shares outstanding during the period. Diluted income per common share is computed similarly except that weighted average common shares is increased to reflect all dilutive instruments.
Three Months Ended March 31, | ||||||||
2013 | 2012 | |||||||
Net income attributable to Newmont stockholders |
$ | 315 | $ | 490 | ||||
Weighted average common shares (millions): |
||||||||
Basic |
497 | 495 | ||||||
Effect of employee stock-based awards |
1 | 2 | ||||||
Effect of convertible notes |
| 7 | ||||||
|
|
|
|
|||||
Diluted |
498 | 504 | ||||||
|
|
|
|
|||||
Net income attributable to Newmont stockholders per common share |
||||||||
Basic: |
||||||||
Continuing operations |
$ | 0.63 | $ | 1.13 | ||||
Discontinued operations |
| (0.14 | ) | |||||
|
|
|
|
|||||
$ | 0.63 | $ | 0.99 | |||||
|
|
|
|
|||||
Diluted: |
||||||||
Continuing operations |
$ | 0.63 | $ | 1.11 | ||||
Discontinued operations |
| (0.14 | ) | |||||
|
|
|
|
|||||
$ | 0.63 | $ | 0.97 | |||||
|
|
|
|
Options to purchase 4 and 1 million shares of common stock at average exercise prices of $49 and $59 were outstanding at March 31, 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 Companys common stock for the respective periods presented.
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 average price of the Companys common stock exceeded the conversion prices for all periods presented, resulting in additional shares included in the computation of diluted weighted average common shares.
In February 2012, the holders of the Companys 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.
11
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 EMPLOYEE PENSION AND OTHER BENEFIT PLANS
Three Months Ended March 31, | ||||||||
2013 | 2012 | |||||||
Pension benefit costs, net |
||||||||
Service cost |
$ | 9 | $ | 7 | ||||
Interest cost |
10 | 10 | ||||||
Expected return on plan assets |
(12 | ) | (11 | ) | ||||
Amortization, net |
8 | 6 | ||||||
|
|
|
|
|||||
$ | 15 | $ | 12 | |||||
|
|
|
|
|||||
Three Months Ended March 31, | ||||||||
2013 | 2012 | |||||||
Other benefit costs, net |
||||||||
Service cost |
$ | 1 | $ | 1 | ||||
Interest cost |
1 | 1 | ||||||
|
|
|
|
|||||
$ | 2 | $ | 2 | |||||
|
|
|
|
NOTE 12 STOCK BASED COMPENSATION
Three Months Ended March 31, | ||||||||
2013 | 2012 | |||||||
Stock options |
$ | 3 | $ | 4 | ||||
Restricted stock units |
9 | 5 | ||||||
Performance leveraged stock units |
2 | 3 | ||||||
|
|
|
|
|||||
$ | 14 | $ | 12 | |||||
|
|
|
|
NOTE 13 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 Companys 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.
12
NEWMONT MINING CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
Fair Value at March 31, 2013 | ||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
Assets: |
||||||||||||||||
Cash equivalents |
$ | 61 | $ | 61 | $ | | $ | | ||||||||
Marketable equity securities: |
||||||||||||||||
Extractive industries |
1,304 | 1,304 | | | ||||||||||||
Other |
4 | 4 | | | ||||||||||||
Marketable debt securities: |
||||||||||||||||
Asset backed commercial paper |
23 | | | 23 | ||||||||||||
Corporate |
13 | | 13 | | ||||||||||||
Auction rate securities |
5 | | | 5 | ||||||||||||
Trade receivable from provisional copper and gold concentrate sales, net |
126 | 126 | | | ||||||||||||
Derivative instruments, net: |
||||||||||||||||
Foreign exchange forward contracts |
236 | | 236 | | ||||||||||||
Diesel forward contracts |
3 | | 3 | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 1,775 | $ | 1,495 | $ | 252 | $ | 28 | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Liabilities: |
||||||||||||||||
Boddington contingent consideration |
33 | | | 33 | ||||||||||||
Holt property royalty |
234 | | | 234 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 267 | $ | | $ | | $ | 267 | |||||||||
|
|
|
|
|
|
|
|
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 14). All other Fair Value disclosures in the above table are presented on a gross basis.
The Companys 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 Companys 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.
The Companys 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. Therefore, the investments are classified as Level 2 of the fair value hierarchy.
The Companys 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. 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 Companys 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 Companys 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 Companys 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.
13
NEWMONT MINING CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
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 Companys Level 3 financial assets and liabilities for the three months ended March 31, 2013:
Description |
At March 31, 2013 |
Valuation technique |
Unobservable input |
Range/Weighted average |
||||||||
Auction Rate Securities |
$ | 5 | Discounted cash flow | Weighted average recoverability rate | 58 | % | ||||||
Asset Backed Commercial Paper |
23 | Discounted cash flow | Recoverability rate | 72-88 | % | |||||||
Boddington Contingent Consideration |
33 | Monte Carlo | Discount rate | 4 | % | |||||||
LT Gold price | $ | 1,500 | ||||||||||
LT Copper price | $ | 3.50 | ||||||||||
Holt property royalty |
234 | Monte Carlo | Weighted average discount rate | 3 | % | |||||||
LT Gold price | $ | 1,500 |
The following table sets forth a summary of changes in the fair value of the Companys Level 3 financial assets and liabilities for the year ended March 31, 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 | ||||||||||||
Settlements |
| | (8 | ) | (6 | ) | (14 | ) | ||||||||||||||||
Revaluation |
| 4 | 4 | | | | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at end of period |
$ | 5 | $ | 23 | $ | 28 | $ | 33 | $ | 234 | $ | 267 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
At March 31, 2013, assets and liabilities classified within Level 3 of the fair value hierarchy represent 2% and 100%, respectively, of total assets and liabilities measured at fair value.
14
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 DERIVATIVE INSTRUMENTS
The Companys 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.
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 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 Companys 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.
In June 2011, Newmont began hedging a portion of the Companys A$ denominated capital expenditures related to the Akyem project in Africa utilizing fixed forward contracts with expiration dates up to three years.
Newmont had the following foreign currency derivative contracts outstanding at March 31, 2013:
Expected Maturity Date | ||||||||||||||||||||||||||||
2013 | 2014 | 2015 | 2016 | 2017 | 2018 | Total/ Average |
||||||||||||||||||||||
A$ Operating Fixed Forward Contracts: |
||||||||||||||||||||||||||||
A$ notional (millions) |
959 | 1,035 | 737 | 490 | 208 | 14 | 3,443 | |||||||||||||||||||||
Average rate ($/A$) |
0.95 | 0.93 | 0.92 | 0.92 | 0.92 | 0.92 | 0.93 | |||||||||||||||||||||
Expected hedge ratio |
80 | % | 67 | % | 48 | % | 32 | % | 13 | % | 4 | % | ||||||||||||||||
A$ Capital Fixed Forward Contracts: |
||||||||||||||||||||||||||||
A$ notional (millions) |
3 | | | | | | 3 | |||||||||||||||||||||
Average rate ($/A$) |
0.96 | | | | | | 0.96 | |||||||||||||||||||||
Expected hedge ratio |
36 | % | | | | | | |||||||||||||||||||||
NZ$ Operating Fixed Forward Contracts: |
||||||||||||||||||||||||||||
NZ$ notional (millions) |
55 | 35 | 3 | | | | 93 | |||||||||||||||||||||
Average rate ($/NZ$) |
0.80 | 0.80 | 0.79 | | | | 0.80 | |||||||||||||||||||||
Expected hedge ratio |
60 | % | 30 | % | 11 | % | | | |
15
NEWMONT MINING CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
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.
Newmont had the following diesel derivative contracts outstanding at March 31, 2013:
Expected Maturity Date | ||||||||||||||||||||
2013 | 2014 | 2015 | 2016 | Total/ Average |
||||||||||||||||
Diesel Fixed Forward Contracts: |
||||||||||||||||||||
Diesel gallons (millions) |
20 | 18 | 8 | 1 | 47 | |||||||||||||||
Average rate ($/gallon) |
2.92 | 2.88 | 2.79 | 2.76 | 2.88 | |||||||||||||||
Expected hedge ratio |
61 | % | 41 | % | 19 | % | 5 | % |
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 $349 represented the effective portion of the hedging instrument included in Accumulated other comprehensive income. The net proceeds from the debt issuance were adjusted by the settlement amount of the swap contracts and included as a financing activity in the Condensed Consolidated Statements of Cash Flow.
Derivative Instrument Fair Values
Newmont had the following derivative instruments designated as hedges at March 31, 2013 and December 31, 2012:
Fair Value | ||||||||||||||||
At March 31, 2013 | ||||||||||||||||
Other Current Assets |
Other Long- Term Assets |
Other Current Liabilities |
Other Long- Term Liabilities |
|||||||||||||
Foreign currency exchange contracts: |
||||||||||||||||
A$ operating fixed forwards |
$ | 105 | $ | 130 | $ | | $ | 1 | ||||||||
NZ$ operating fixed forwards |
2 | | | | ||||||||||||
Diesel fixed forwards |
2 | 1 | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total derivative instruments (Note 18 and 20) |
$ | 109 | $ | 131 | $ | | $ | 1 | ||||||||
|
|
|
|
|
|
|
|
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 (Note 18 and 20) |
$ | 112 | $ | 144 | $ | 1 | $ | 2 | ||||||||
|
|
|
|
|
|
|
|
16
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 Companys Condensed Consolidated Financial Statements related to the Companys cash flow hedges.
Foreign Currency Exchange Contracts |
Diesel
Forward Contracts |
Forward
Starting Swaps |
||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | |||||||||||||||||||
For the three months ended March 31, |
||||||||||||||||||||||||
Cash flow hedging relationships: |
||||||||||||||||||||||||
Gain recognized in other comprehensive income (effective portion) |
$ | 18 | $ | 62 | $ | 3 | $ | 12 | $ | | $ | 36 | ||||||||||||
Gain(loss) reclassified from Accumulated other comprehensive income into income (effective portion) (1) |
38 | 47 | 1 | 3 | (3 | ) | (1 | ) | ||||||||||||||||
Gain recognized in income (ineffective portion) (2) |
| | 3 | | | 2 |
(1) | The gain (loss) for the effective portion of the foreign exchange and diesel cash flow hedges reclassified from Accumulated other comprehensive income is included in Costs applicable to sales. The loss for the effective portion of the forward starting swaps reclassified from Accumulated other comprehensive income is included in Interest Expense. |
(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, net of tax to income for derivative instruments during the next 12 months is a gain of approximately $58.
Provisional Copper and Gold Sales
The Companys 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.
LME copper prices averaged $3.60 per pound during the first quarter of 2013, consistent with the Companys recorded average provisional price before mark-to-market losses and treatment and refining charges. During the first quarter of 2013, changes in copper prices resulted in a provisional pricing mark-to-market loss of $9 ($0.21 per pound). At March 31, 2013, Newmont had copper sales of 38 million pounds priced at an average of $3.45 per pound, subject to final pricing over the next several months.
The average London P.M. fix for gold was $1,632 per ounce during the first quarter of 2013, consistent with the Companys recorded average provisional price before mark-to-market gains and treatment and refining charges. During the first quarter of 2013, changes in gold prices resulted in a provisional pricing mark-to-market gain of $3 ($2 per ounce). At March 31, 2013, Newmont had gold sales of 104,000 ounces priced at an average of $1,598 per ounce, subject to final pricing over the next several months.
17
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 INVESTMENTS
At March 31, 2013 | ||||||||||||||||
Cost/Equity Basis |
Unrealized | Fair/Equity Basis |
||||||||||||||
Gain | Loss | |||||||||||||||
Current: |
||||||||||||||||
Marketable Equity Securities: |
||||||||||||||||
Paladin Energy Ltd. |
$ | 60 | $ | | $ | (8 | ) | $ | 52 | |||||||
Other |
16 | 9 | (2 | ) | 23 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 76 | $ | 9 | $ | (10 | ) | $ | 75 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Long-term: |
||||||||||||||||
Marketable Debt Securities: |
||||||||||||||||
Asset backed commercial paper |
$ | 24 | $ | | $ | (1 | ) | $ | 23 | |||||||
Auction rate securities |
7 | | (2 | ) | 5 | |||||||||||
Corporate |
13 | | | 13 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
44 | | (3 | ) | 41 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Marketable Equity Securities: |
||||||||||||||||
Canadian Oil Sands Ltd. |
303 | 332 | | 635 | ||||||||||||
Gabriel Resources Ltd. |
76 | 45 | | 121 | ||||||||||||
Regis Resources Ltd. |
166 | 255 | | 421 | ||||||||||||
Other |
52 | 9 | (5 | ) | 56 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
597 | 641 | (5 | ) | 1,233 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Other investments, at cost |
13 | | | 13 | ||||||||||||
Investment in Affiliates: |
||||||||||||||||
Euronimba Ltd. |
3 | | | 3 | ||||||||||||
Minera La Zanja S.R.L. |
71 | | | 71 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 728 | $ | 641 | $ | (8 | ) | $ | 1,361 | ||||||||
|
|
|
|
|
|
|
|
18
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 Basis |
Unrealized | Fair/Equity Basis |
||||||||||||||
Gain | Loss | |||||||||||||||
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 Trust |
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 | ||||||||
|
|
|
|
|
|
|
|
19
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 present the gross unrealized losses and fair value of the Companys 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:
Less than 12 Months | 12 Months or Greater | Total | ||||||||||||||||||||||
At March 31, 2013 |
Fair Value | Unrealized Losses |
Fair Value | Unrealized Losses |
Fair Value | Unrealized Losses |
||||||||||||||||||
Marketable equity securities |
$ | 75 | $ | 15 | $ | | $ | | $ | 75 | $ | 15 | ||||||||||||
Asset backed commercial paper |
| | 23 | 1 | 23 | 1 | ||||||||||||||||||
Auction rate securities |
| | 5 | 2 | 5 | 2 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
$ | 75 | $ | 15 | $ | 28 | $ | 3 | $ | 103 | $ | 18 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
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 Companys 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 16 INVENTORIES
At March
31, 2013 |
At December
31, 2012 |
|||||||
In-process |
$ | 119 | $ | 143 | ||||
Concentrate |
180 | 152 | ||||||
Precious metals |
50 | 31 | ||||||
Materials, supplies and other |
497 | 470 | ||||||
|
|
|
|
|||||
$ | 846 | $ | 796 | |||||
|
|
|
|
NOTE 17 STOCKPILES AND ORE ON LEACH PADS
At March
31, 2013 |
At December
31, 2012 |
|||||||
Current: |
||||||||
Stockpiles |
$ | 714 | $ | 602 | ||||
Ore on leach pads |
242 | 184 | ||||||
|
|
|
|
|||||
$ | 956 | $ | 786 | |||||
|
|
|
|
|||||
Long-term: |
||||||||
Stockpiles |
$ | 2,582 | $ | 2,514 | ||||
Ore on leach pads |
370 | 382 | ||||||
|
|
|
|
|||||
$ | 2,952 | $ | 2,896 | |||||
|
|
|
|
20
NEWMONT MINING CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
At March 31, | At December 31, | |||||||
2013 | 2012 | |||||||
Stockpiles and ore on leach pads: |
||||||||
Nevada |
$ | 757 | $ | 699 | ||||
La Herradura |
67 | 57 | ||||||
Yanacocha |
540 | 498 | ||||||
Boddington |
491 | 474 | ||||||
Batu Hijau |
1,631 | 1,543 | ||||||
Other Australia/New Zealand |
175 | 173 | ||||||
Ahafo |
241 | 235 | ||||||
Akyem |
6 | 3 | ||||||
|
|
|
|
|||||
$ | 3,908 | $ | 3,682 | |||||
|
|
|
|
NOTE 18 OTHER ASSETS
At March 31, | At December 31, | |||||||
2013 | 2012 | |||||||
Other current assets: |
||||||||
Refinery metal inventory and receivable |
$ | 844 | $ | 1,183 | ||||
Prepaid assets |
234 | 213 | ||||||
Derivative instruments |
109 | 112 | ||||||
Restricted cash |
7 | 12 | ||||||
Other |
115 | 141 | ||||||
|
|
|
|
|||||
$ | 1,309 | $ | 1,661 | |||||
|
|
|
|
|||||
Other long-term assets: |
||||||||
Goodwill |
$ | 188 | $ | 188 | ||||
Intangible assets |
138 | 136 | ||||||
Derivative instruments |
131 | 144 | ||||||
Income tax receivable |
105 | 92 | ||||||
Restricted cash |
93 | 90 | ||||||
Debt issuance costs |
70 | 73 | ||||||
Other receivables |
10 | 9 | ||||||
Other |
153 | 140 | ||||||
|
|
|
|
|||||
$ | 888 | $ | 872 | |||||
|
|
|
|
21
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 DEBT
At March 31, 2013 | At December 31, 2012 | |||||||||||||||
Current | Non-Current | Current | Non-Current | |||||||||||||
2014 Convertible Senior Notes, net |
| 541 | | 535 | ||||||||||||
2017 Convertible Senior Notes, net |
| 476 | | 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 |
| 1,087 | | 1,087 | ||||||||||||
2042 Senior Notes, net |
| 992 | | 992 | ||||||||||||
Ahafo project finance facility |
10 | 35 | 10 | 35 | ||||||||||||
PTNNT revolving credit facility |
| 260 | | 180 | ||||||||||||
Other capital leases |
| 3 | | 4 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 10 | $ | 6,379 | $ | 10 | $ | 6,288 | |||||||||
|
|
|
|
|
|
|
|
Scheduled minimum debt repayments are $10 for the remainder of 2013, $552 in 2014, $11 in 2015, $11 in 2016, $742 in 2017 and $5,063 thereafter.
NOTE 20 OTHER LIABILITIES
At March 31, | At December 31, | |||||||
2013 | 2012 | |||||||
Other current liabilities: |
||||||||
Refinery metal payable |
$ | 844 | $ | 1,183 | ||||
Accrued operating costs |
261 | 336 | ||||||
Accrued capital expenditures |
159 | 172 | ||||||
Interest |
83 | 74 | ||||||
Reclamation and remediation liabilities |
80 | 82 | ||||||
Deferred income tax |
65 | 65 | ||||||
Royalties |
41 | 42 | ||||||
Holt property royalty |
23 | 21 | ||||||
Boddington contingent consideration |
11 | 26 | ||||||
Taxes other than income and mining |
8 | 14 | ||||||
Other |
78 | 69 | ||||||
|
|
|
|
|||||
$ | 1,653 | $ | 2,084 | |||||
|
|
|
|
|||||
Other long-term liabilities: |
||||||||
Holt property royalty |
$ | 211 | $ | 219 | ||||
Income and mining taxes |
70 | 65 | ||||||
Power supply agreements |
46 | 46 | ||||||
Boddington contingent consideration |
22 | 15 | ||||||
Other |
21 | 27 | ||||||
|
|
|
|
|||||
$ | 370 | $ | 372 | |||||
|
|
|
|
22
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 CHANGES IN EQUITY
Three Months Ended March 31, | ||||||||
2013 | 2012 | |||||||
Common stock: |
||||||||
At beginning of period |
$ | 787 | $ | 784 | ||||
Stock based awards |
1 | 1 | ||||||
|
|
|
|
|||||
At end of period |
788 | 785 | ||||||
|
|
|
|
|||||
Additional paid-in capital: |
||||||||
At beginning of period |
8,330 | 8,408 | ||||||
Conversion premium on convertible notes |
| (172 | ) | |||||
Stock based awards |
29 | 27 | ||||||
Sale of noncontrolling interests |
48 | | ||||||
|
|
|
|
|||||
At end of period |
8,407 | 8,263 | ||||||
|
|
|
|
|||||
Accumulated other comprehensive income: |
||||||||
At beginning of period |
490 | 652 | ||||||
Other comprehensive income |
(61 | ) | 6 | |||||
|
|
|
|
|||||
At end of period |
429 | 658 | ||||||
|
|
|
|
|||||
Retained earnings: |
||||||||
At beginning of period |
4,166 | 3,052 | ||||||
Net income attributable to Newmont stockholders |
315 | 490 | ||||||
Dividends paid |
(211 | ) | (173 | ) | ||||
|
|
|
|
|||||
At end of period |
4,270 | 3,369 | ||||||
|
|
|
|
|||||
Noncontrolling interests: |
||||||||
At beginning of period |
3,175 | 2,875 | ||||||
Net income attributable to noncontrolling interests |
42 | 113 | ||||||
Sale of noncontrolling interests, net |
15 | | ||||||
Other comprehensive income |
(1 | ) | 2 | |||||
|
|
|
|
|||||
At end of period |
3,231 | 2,990 | ||||||
|
|
|
|
|||||
Total equity |
$ | 17,125 | $ | 16,065 | ||||
|
|
|
|
23
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 RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME
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 before reclassifications |
(55 | ) | (11 | ) | | 21 | (45 | ) | ||||||||||||
Reclassifications from accumulated other comprehensive income |
3 | | 5 | (24 | ) | (16 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net current-period other comprehensive income (loss) |
(52 | ) | (11 | ) | 5 | (3 | ) | (61 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
March 31, 2013 |
$ | 490 | $ | 166 | $ | (271 | ) | $ | 44 | $ | 429 | |||||||||
|
|
|
|
|
|
|
|
|
|
Details about Accumulated Other Comprehensive Income Components |
Amount Reclassified from Accumulated Other Comprehensive Income |
Affected Line Item in the Condensed | ||||
Unrealized gain on marketable securities: |
||||||
Impairment of marketable securities |
$ | 4 | Other income, net | |||
|
|
|||||
Total before tax |
4 | |||||
Tax (expense) benefit |
(1 | ) | ||||
|
|
|||||
Net of tax |
$ | 3 | ||||
|
|
|||||
Pension liability adjustments: |
||||||
Amortization, net |
$ | 8 | (1) | |||
|
|
|||||
Total before tax |
8 | |||||
Tax (expense) benefit |
(3 | ) | ||||
|
|
|||||
Net of tax |
$ | 5 | ||||
|
|
|||||
Gain (loss) on hedge instruments: |
||||||
Operating cash flow hedges |
$ | (39 | ) | Costs applicable to sales | ||
Forward starting swap hedges |
3 | Interest expense, net | ||||
|
|
|||||
Total before tax |
(36 | ) | ||||
Tax (expense) benefit |
12 | |||||
|
|
|||||
Net of tax |
$ | (24 | ) | |||
|
|
|||||
Total reclassifications for the period, net of tax |
$ | (16 | ) | |||
|
|
(1) | This accumulated other comprehensive income 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. |
24
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 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:
Three Months Ended March 31, | ||||||||
2013 | 2012 | |||||||
Decrease (increase) in operating assets: |
||||||||
Trade and accounts receivable |
$ | 115 | $ | (21 | ) | |||
Inventories, stockpiles and ore on leach pads |
(230 | ) | (201 | ) | ||||
EGR refinery assets |
308 | 319 | ||||||
Other assets |
(20 | ) | (74 | ) | ||||
Increase (decrease) in operating liabilities: |
||||||||
Accounts payable and other accrued liabilities |
(144 | ) | (32 | ) | ||||
EGR refinery liabilities |
(308 | ) | (319 | ) | ||||
Reclamation liabilities |
(9 | ) | (28 | ) | ||||
|
|
|
|
|||||
$ | (288 | ) | $ | (356 | ) | |||
|
|
|
|
NOTE 24 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 months ended March 31, 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.
25
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 Newmonts 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.
The Company will revise the June 30, 2012 and September 30, 2012 financial statements to reflect the revisions discussed above in the Quarterly Reports on Form 10-Q for the quarterly periods in 2013.
Three Months Ended March 31, 2013 | ||||||||||||||||||||
Condensed Consolidating Statement of Income |
Newmont Mining Corporation |
Newmont USA |
Other Subsidiaries |
Eliminations | Newmont Mining Corporation Consolidated |
|||||||||||||||
Sales |
$ | | $ | 488 | $ | 1,689 | $ | | $ | 2,177 | ||||||||||
Costs and expenses |
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Costs applicable to sales (1) |
| 220 | 824 | | 1,044 | |||||||||||||||
Amortization |
| 40 | 227 | | 267 | |||||||||||||||
Reclamation and remediation |
| 2 | 16 | | 18 | |||||||||||||||
Exploration |
| 8 | 51 | | 59 | |||||||||||||||
Advanced projects, research and development |
| 12 | 40 | | 52 | |||||||||||||||
General and administrative |
| 30 | 26 | | 56 | |||||||||||||||
Other expense, net |
| 16 | 84 | | 100 | |||||||||||||||
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| 328 | 1,268 | | 1,596 | ||||||||||||||||
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Other income (expense) |
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Other income, net |
| 4 | 22 | | 26 | |||||||||||||||
Interest income - intercompany |
48 | 7 | (2 | ) | (53 | ) | | |||||||||||||
Interest expense - intercompany |
(3 | ) | | (50 | ) | 53 | | |||||||||||||
Interest expense, net |
(65 | ) | (2 | ) | 2 | | (65 | ) | ||||||||||||
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(20 | ) | 9 | (28 | ) | | (39 | ) | |||||||||||||
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Income before income and mining tax and other items |
(20 | ) | 169 | 393 | | 542 | ||||||||||||||
Income and mining tax expense |
7 | (50 | ) | (138 | ) | | (181 | ) | ||||||||||||
Equity income (loss) of affiliates |
328 | 115 | 43 | (490 | ) | (4 | ) | |||||||||||||
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Income from continuing operations |
315 | 234 | 298 | (490 | ) | 357 | ||||||||||||||
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Net income |
315 | 234 | 298 | (490 | ) | 357 | ||||||||||||||
Net income attributable to noncontrolling interests |
| | (67 | ) | 25 | (42 | ) | |||||||||||||
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Net income attributable to Newmont stockholders |
$ | 315 | $ | 234 | $ | 231 | $ | (465 | ) | $ | 315 | |||||||||
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Comprehensive income |
$ | 254 | $ | 238 | $ | 190 | $ | (387 | ) | $ | 295 | |||||||||
Comprehensive income attributable to noncontrolling interests |
| | (66 | ) | 25 | (41 | ) | |||||||||||||
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Comprehensive income attributable to Newmont stockholders |
$ | 254 | $ | 238 | $ | 124 | $ | (362 | ) | $ | 254 | |||||||||
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(1) | Excludes Amortization and Reclamation and remediation. |
26
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 March 31, 2012 | ||||||||||||||||||||
Condensed Consolidating Statement of Income |
Newmont Mining Corporation |
Newmont USA |
Other Subsidiaries |
Eliminations | Newmont Mining Corporation Consolidated |
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Sales |
$ | | $ | 585 | $ | 2,098 | $ | | $ | 2,683 | ||||||||||
Costs and expenses |
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Costs applicable to sales (1) |
| 252 | 765 | | 1,017 | |||||||||||||||
Amortization |
| 36 | 195 | | 231 | |||||||||||||||
Reclamation and remediation |
| 2 | 14 | | 16 | |||||||||||||||
Exploration |
| 19 | 69 | | 88 | |||||||||||||||
Advanced projects, research and development |
| 12 | 90 | | 102 | |||||||||||||||
General and administrative |
| 19 | 35 | | 54 | |||||||||||||||
Other expense, net |
| 7 | 113 | | 120 | |||||||||||||||
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| 347 | 1,281 | | 1,628 | ||||||||||||||||
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Other income (expense) |
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Other income, net |
2 | 8 | 23 | | 33 | |||||||||||||||
Interest income - intercompany |
40 | 8 | (1 | ) | (47 | ) | | |||||||||||||
Interest expense - intercompany |
(5 | ) | (1 | ) | (41 | ) | 47 | | ||||||||||||
Interest expense, net |
(51 | ) | (1 | ) | | | (52 | ) | ||||||||||||
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(14 | ) | 14 | (19 | ) | | (19 | ) | |||||||||||||
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Income before income and mining tax and other items |
(14 | ) | 252 | 798 | | 1,036 | ||||||||||||||
Income and mining tax expense |
5 | (69 | ) | (279 | ) | | (343 | ) | ||||||||||||
Equity income (loss) of affiliates |
499 | 241 | 69 | (828 | ) | (19 | ) | |||||||||||||
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Income from continuing operations |
490 | 424 | 588 | (828 | ) | 674 | ||||||||||||||
Income (loss) from discontinued operations |
| | (71 | ) | | (71 | ) | |||||||||||||
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Net income |
490 | 424 | 517 | (828 | ) | 603 | ||||||||||||||
Net income attributable to noncontrolling interests |
| | (148 | ) | 35 | (113 | ) | |||||||||||||
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Net income attributable to Newmont stockholders |
$ | 490 | $ | 424 | $ | 369 | $ | (793 | ) | $ | 490 | |||||||||
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Comprehensive income |
$ | 496 | $ | 425 | $ | 504 | $ | (814 | ) | $ | 611 | |||||||||
Comprehensive income attributable to noncontrolling interests |
| | (150 | ) | 35 | (115 | ) | |||||||||||||
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Comprehensive income attributable to Newmont stockholders |
$ | 496 | $ | 425 | $ | 354 | $ | (779 | ) | $ | 496 | |||||||||
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(1) | Excludes Amortization and Reclamation and remediation. |
27
NEWMONT MINING CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
For the Three Months Ended March 31, 2012 | ||||||||||||||||||||||||||||||||||||
Newmont USA | Other Subsidiaries | Eliminations | ||||||||||||||||||||||||||||||||||
Condensed Consolidating Statement of |
As Previously Presented |
Change | As Currently Presented |
As Previously Presented |
Change | As Currently Presented |
As Previously Presented |
Change | As Currently Presented |
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Sales |
$ | 1,617 | $ | (1,032 | ) | $ | 585 | $ | 1,066 | $ | 1,032 | $ | 2,098 | $ | | $ | | $ | | |||||||||||||||||
Costs and expenses |
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Costs applicable to sales |
563 | (311 | ) | 252 | 465 | 300 | 765 | (11 | ) | 11 | | |||||||||||||||||||||||||
Amortization |
130 | (94 | ) | 36 | 101 | 94 | 195 | | | | ||||||||||||||||||||||||||
Reclamation and remediation |
11 | (9 | ) | 2 | 5 | 9 | 14 | | | | ||||||||||||||||||||||||||
Exploration |
53 | (34 | ) | 19 | 35 | 34 | 69 | | | | ||||||||||||||||||||||||||
Advanced projects, research and development |
88 | (76 | ) | 12 | 14 | 76 | 90 | | | | ||||||||||||||||||||||||||
General and administrative |
42 | (23 | ) | 19 | 1 | 34 | 35 | 11 | (11 | ) | | |||||||||||||||||||||||||
Other expense, net |
47 | (40 | ) | 7 | 73 | 40 | 113 | | | | ||||||||||||||||||||||||||
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