Form 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 10-Q
(Mark One)
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þ |
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 |
For the Quarterly Period Ended June 30, 2009
or
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o |
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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)
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Delaware
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84-1611629 |
(State or Other Jurisdiction of
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(I.R.S. Employer |
Incorporation or Organization)
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Identification No.) |
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6363 South Fiddlers Green Circle
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80111 |
Greenwood Village, Colorado
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(Zip Code) |
(Address of Principal Executive Offices)
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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. þ Yes o 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). þ Yes o 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 definition of accelerated
filer and large accelerated filer in Rule 12-b2 of the Exchange Act. (Check one):
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Large accelerated filer þ
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Accelerated filer o
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Non-accelerated filer o
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Smaller reporting company o |
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(Do not check if a smaller reporting company.) |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12-b2 of
the Exchange Act). o Yes þ No
There were 479,717,438 shares of common stock outstanding on July 15, 2009 (and 10,280,382
exchangeable shares).
PART IFINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
NEWMONT MINING CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(unaudited, in millions except per share)
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Three Months Ended |
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Six Months Ended |
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June 30, |
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June 30, |
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2009 |
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2008 |
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2009 |
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2008 |
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Revenues |
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Sales gold, net |
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$ |
1,373 |
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$ |
1,320 |
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$ |
2,748 |
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$ |
2,813 |
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Sales copper, net |
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229 |
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183 |
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390 |
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615 |
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1,602 |
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1,503 |
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3,138 |
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3,428 |
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Costs and expenses |
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Costs applicable to sales gold (1) |
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635 |
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645 |
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1,289 |
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1,277 |
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Costs applicable to sales copper (1) |
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61 |
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104 |
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146 |
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254 |
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Amortization |
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176 |
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183 |
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367 |
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362 |
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Accretion (Note 23) |
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8 |
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8 |
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17 |
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16 |
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Exploration |
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51 |
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58 |
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92 |
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97 |
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Advanced projects, research and development (Note 3) |
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42 |
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39 |
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73 |
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69 |
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General and administrative |
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40 |
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37 |
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79 |
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66 |
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Other expense, net (Note 4) |
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116 |
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118 |
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192 |
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180 |
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1,129 |
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1,192 |
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2,255 |
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2,321 |
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Other income (expense) |
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Other income, net (Note 5) |
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9 |
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19 |
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18 |
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34 |
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Interest expense, net |
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(23 |
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(35 |
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(55 |
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(63 |
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(14 |
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(16 |
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(37 |
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(29 |
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Income from continuing operations before income tax (expense) benefit and other items |
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459 |
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295 |
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846 |
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1,078 |
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Income tax (expense) benefit (Note 8) |
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(136 |
) |
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42 |
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(241 |
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(187 |
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Equity loss of affiliates |
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(3 |
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(8 |
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(5 |
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Income from continuing operations |
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320 |
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337 |
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597 |
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886 |
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(Loss) income from discontinued operations (Note 9) |
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(14 |
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2 |
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(14 |
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10 |
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Net income |
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306 |
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339 |
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583 |
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896 |
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Less: Net income attributable to noncontrolling interests (Note 10) |
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144 |
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68 |
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232 |
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260 |
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Net income attributable to Newmont stockholders |
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$ |
162 |
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$ |
271 |
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$ |
351 |
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$ |
636 |
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Net income attributable to Newmont stockholders: |
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Continuing operations |
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$ |
171 |
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$ |
270 |
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$ |
360 |
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$ |
627 |
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Discontinued operations |
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(9 |
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1 |
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(9 |
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9 |
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$ |
162 |
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$ |
271 |
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$ |
351 |
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$ |
636 |
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Income per common share (Note 11) |
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Basic: |
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Continuing operations |
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$ |
0.35 |
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$ |
0.60 |
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$ |
0.75 |
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$ |
1.38 |
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Discontinued operations |
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(0.02 |
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(0.02 |
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0.02 |
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$ |
0.33 |
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$ |
0.60 |
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$ |
0.73 |
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$ |
1.40 |
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Diluted: |
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Continuing operations |
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$ |
0.35 |
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$ |
0.59 |
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$ |
0.75 |
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$ |
1.37 |
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Discontinued operations |
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(0.02 |
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(0.02 |
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0.02 |
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$ |
0.33 |
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$ |
0.59 |
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$ |
0.73 |
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$ |
1.39 |
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Basic weighted-average common shares outstanding |
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490 |
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454 |
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483 |
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454 |
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Diluted weighted-average common shares outstanding |
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491 |
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456 |
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484 |
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457 |
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Cash dividends declared per common share |
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$ |
0.10 |
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$ |
0.10 |
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$ |
0.20 |
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$ |
0.20 |
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(1) |
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Exclusive of Amortization and Accretion. |
The accompanying notes are an integral part of the consolidated financial statements.
1
NEWMONT MINING CORPORATION
CONSOLIDATED BALANCE SHEETS
(unaudited, in millions)
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At June 30, |
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At December 31, |
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2009 |
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2008 |
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ASSETS |
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Cash and cash equivalents |
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$ |
544 |
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$ |
435 |
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Marketable securities and other short-term investments (Note 17) |
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19 |
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12 |
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Trade receivables |
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229 |
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104 |
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Accounts receivable |
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283 |
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214 |
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Inventories (Note 18) |
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481 |
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507 |
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Stockpiles and ore on leach pads (Note 19) |
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318 |
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290 |
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Deferred income tax assets |
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188 |
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284 |
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Other current assets (Note 20) |
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395 |
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455 |
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Current assets |
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2,457 |
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2,301 |
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Property, plant and mine development, net |
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11,825 |
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10,128 |
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Investments (Note 17) |
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902 |
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655 |
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Stockpiles and ore on leach pads (Note 19) |
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1,326 |
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1,136 |
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Deferred income tax assets |
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1,126 |
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1,039 |
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Other long-term assets (Note 20) |
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218 |
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207 |
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Goodwill |
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188 |
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188 |
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Assets of operations held for sale (Note 9) |
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69 |
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73 |
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Total assets |
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$ |
18,111 |
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$ |
15,727 |
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LIABILITIES |
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Current portion of long-term debt (Note 21) |
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$ |
221 |
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$ |
165 |
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Accounts payable |
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310 |
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411 |
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Employee-related benefits |
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162 |
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170 |
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Income and mining taxes |
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90 |
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61 |
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Other current liabilities (Note 22) |
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1,071 |
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|
770 |
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Current liabilities |
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1,854 |
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1,577 |
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Long-term debt (Note 21) |
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2,810 |
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3,072 |
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Reclamation and remediation liabilities (Note 23) |
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721 |
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699 |
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Deferred income tax liabilities |
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1,237 |
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|
1,051 |
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Employee-related benefits |
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404 |
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379 |
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Other long-term liabilities (Note 22) |
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277 |
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252 |
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Liabilities of operations held for sale (Note 9) |
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54 |
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36 |
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Total liabilities |
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7,357 |
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7,066 |
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Commitments and contingencies (Note 27) |
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STOCKHOLDERS EQUITY |
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Common stock |
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768 |
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|
709 |
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Additional paid-in capital |
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8,052 |
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6,831 |
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Accumulated other comprehensive income (loss) |
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141 |
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(253 |
) |
Retained earnings |
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302 |
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4 |
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Total Newmont stockholders equity |
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9,263 |
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7,291 |
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Noncontrolling interests |
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1,491 |
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1,370 |
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Total stockholders equity (Note 13) |
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10,754 |
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8,661 |
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Total liabilities and stockholders equity |
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$ |
18,111 |
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$ |
15,727 |
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The accompanying notes are an integral part of the consolidated financial statements.
2
NEWMONT MINING CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in millions)
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Six Months Ended |
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June 30, |
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2009 |
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2008 |
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Operating activities: |
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Net income |
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$ |
583 |
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$ |
896 |
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Adjustments: |
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Amortization |
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|
367 |
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|
362 |
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Loss (income) from discontinued operations (Note 9) |
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14 |
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(10 |
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Accretion of accumulated reclamation obligations (Note 23) |
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23 |
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|
20 |
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Deferred income taxes |
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(13 |
) |
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(208 |
) |
Write-down of investments |
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6 |
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|
56 |
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Stock based compensation and other benefits |
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30 |
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|
24 |
|
Other operating adjustments and write-downs |
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53 |
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|
90 |
|
Net change in operating assets and liabilities (Note 24) |
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(177 |
) |
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(259 |
) |
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Net cash provided from continuing operations |
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|
886 |
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|
971 |
|
Net cash provided from (used in) discontinued operations (Note 9) |
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8 |
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(107 |
) |
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Net cash provided from operations |
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|
894 |
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|
864 |
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Investing activities: |
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Additions to property, plant and mine development |
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(910 |
) |
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|
(893 |
) |
Investments in marketable debt and equity securities |
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|
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|
|
(17 |
) |
Proceeds from sale of marketable debt and equity securities |
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|
5 |
|
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|
17 |
|
Acquisitions, net (Note 14) |
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(760 |
) |
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|
(325 |
) |
Other |
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(7 |
) |
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(16 |
) |
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Net cash used in investing activities of continuing operations |
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|
(1,672 |
) |
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|
(1,234 |
) |
Net cash used in investing activities of discontinued operations (Note 9) |
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(10 |
) |
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Net cash used in investing activities |
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(1,672 |
) |
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|
(1,244 |
) |
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Financing activities: |
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Proceeds from debt, net |
|
|
1,494 |
|
|
|
1,023 |
|
Repayment of debt |
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(1,668 |
) |
|
|
(625 |
) |
Dividends paid to common stockholders |
|
|
(98 |
) |
|
|
(91 |
) |
Dividends paid to noncontrolling interests |
|
|
(112 |
) |
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|
(147 |
) |
Proceeds from stock issuance, net |
|
|
1,247 |
|
|
|
24 |
|
Change in restricted cash and other |
|
|
5 |
|
|
|
7 |
|
|
|
|
|
|
|
|
Net cash provided from financing activities of continuing operations |
|
|
868 |
|
|
|
191 |
|
Net cash used in financing activities of discontinued operations (Note 9) |
|
|
(2 |
) |
|
|
(2 |
) |
|
|
|
|
|
|
|
Net cash provided from financing activities |
|
|
866 |
|
|
|
189 |
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash |
|
|
21 |
|
|
|
(4 |
) |
|
|
|
|
|
|
|
Net change in cash and cash equivalents |
|
|
109 |
|
|
|
(195 |
) |
Cash and cash equivalents at beginning of period |
|
|
435 |
|
|
|
1,231 |
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
|
$ |
544 |
|
|
$ |
1,036 |
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of the consolidated financial statements.
3
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
NOTE 1 BASIS OF PRESENTATION
The interim 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. All adjustments are of a normal recurring nature except as
discussed below. The Company has evaluated all subsequent events through July 22, 2009 (see Note
29). 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 included in its Annual Report on Form 10-K/A for
the year ended December 31, 2008, filed June 8, 2009. The year-end balance sheet data was derived
from the audited financial statements, but does not include all disclosures required by U.S.
generally accepted accounting principles (GAAP).
Certain amounts for the three and six months ended June 30, 2008 and at December 31, 2008 have
been revised. The Company retrospectively adopted FSP No. APB 14-1, Accounting for Convertible
Debt Instruments That May be Settled in Cash upon Conversion (Including Partial Cash Settlement)
(FSP APB 14-1), which requires an allocation of convertible debt proceeds between the liability
component and the embedded conversion option (i.e., the equity component) (see Note 2).
Additionally, the Company adopted FASB Statement No. 160, Noncontrolling Interests in Consolidated
Financial Statements an amendment of ARB No. 51 (FAS 160), which requires the noncontrolling
interests to be classified as a separate component of net income and stockholders equity. The
Company has also reclassified the historical balance sheet, income statement and the cash flow
amounts for the Kori Kollo operation in Bolivia to discontinued operations in the Consolidated
Balance Sheets, Consolidated Statements of Income and Cash Flows for all periods presented.
References to A$ refer to Australian currency, C$ to Canadian currency, IDR to
Indonesian currency, NZ$ to New Zealand currency and $ to United States currency.
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Recently Adopted Accounting Pronouncements
Subsequent Events
In May 2009, the Financial Accounting Standards Board (FASB) issued FASB Statement No. 165
Subsequent Events (FAS 165) which establishes accounting and reporting standards for events
that occur after the balance sheet date but before financial statements are issued or are available
to be issued. The statement sets forth (i) the period after the balance sheet date during which
management of a reporting entity should evaluate events or transactions that may occur for
potential recognition or disclosure in the financial statements, (ii) the circumstances under which
an entity should recognize events or transactions occurring after the balance sheet in its
financial statements, and (iii) the disclosures that an entity should make about events or
transactions occurring after the balance sheet date in its financial statements. The Company
adopted the provisions of FAS 165 for the interim period ended June 30, 2009. The adoption of FAS
165 had no impact on the Companys consolidated financial position, results of operations or cash
flows.
Post-Retirement Benefit Plan
In December 2008, the FASB issued FSP No. FAS 132(R)-1, Employers Disclosures about
Post-Retirement Benefit Plan Assets (FSP FAS 132(R)-1), which amends FASB Statement No. 132
Employers Disclosures about Pensions and Other Post-Retirement Benefits (FAS 132), to provide
guidance on an employers disclosures about plan assets of a defined benefit pension or other
post-retirement plan. The objective of FSP FAS 132(R)-1 is to require more detailed disclosures
about employers plan assets, including employers investment strategies, major categories of plan
assets, concentrations of risk within plan assets, and valuation techniques used to measure the
fair value of plan assets. The Company adopted the provisions of FSP FAS 132(R)-1 on January 1,
2009. The provisions of this FSP are not required for earlier periods that are presented for
comparative purposes.
4
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
Equity Method Investment
In November 2008, the Emerging Issues Task Force (EITF) reached consensus on Issue No. 08-6,
Equity Method Investment Accounting Considerations (EITF 08-6), which clarifies the accounting
for certain transactions and impairment considerations involving equity method investments. The
intent of EITF 08-6 is to provide guidance on (i) determining the initial measurement of an equity
method investment, (ii) recognizing other-than-temporary impairments of an equity method investment
and (iii) accounting for an equity method investees issuance of shares. EITF 08-6 was effective
for the Companys fiscal year beginning January 1, 2009 and has been applied prospectively. The
adoption of EITF 08-6 had no impact on the Companys consolidated financial position or results of
operations.
Equity-Linked Financial Instruments
In June 2008, the EITF reached consensus on Issue No. 07-5, Determining Whether an Instrument
(or Embedded Feature) Is Indexed to an Entitys Own Stock (EITF 07-5). EITF 07-5 clarifies the
determination of whether an instrument (or an embedded feature) is indexed to an entitys own
stock, which would qualify as a scope exception under FASB Statement No. 133, Accounting for
Derivative Instruments and Hedging Activities (FAS 133). EITF 07-5 was effective for the
Companys fiscal year beginning January 1, 2009. The adoption of EITF 07-5 had no impact on the
Companys consolidated financial position or results of operations.
Accounting for Convertible Debt Instruments
In May 2008, the FASB issued FSP No. APB 14-1. FSP APB 14-1 applies to convertible debt
instruments that, by their stated terms, may be settled in cash (or other assets) upon conversion,
including partial cash settlement, unless the embedded conversion option is required to be
separately accounted for as a derivative under FAS 133. FSP APB 14-1 requires that the liability
and equity components of convertible debt instruments within the scope of FSP APB 14-1 be
separately accounted for in a manner that reflects the entitys nonconvertible debt borrowing rate.
This requires an allocation of convertible debt proceeds between the liability component and the
embedded conversion option (i.e., the equity component). The difference between the principal
amount of the debt and the amount of the proceeds allocated to the liability component is reported
as a debt discount and subsequently amortized to earnings over the instruments expected life using
the effective interest method. FSP APB 14-1 requires retrospective application to all periods
presented.
During July 2007, the Company completed an offering of $1,150 convertible senior notes due
2014 and 2017, each in the amount of $575. The 2014 notes, maturing on July 15, 2014, pay interest
semi-annually at a rate of 1.25% per annum, and the 2017 notes, maturing on July 15, 2017, pay
interest semi-annually at a rate of 1.625% per annum. The notes are convertible, at the holders
option, equivalent to a conversion price of $46.21 per share of common stock (24,887,956 shares of
common stock). In connection with the convertible senior notes offering, the Company entered into
convertible note hedge transactions and warrant transactions (Call Spread Transactions). The Call
Spread Transactions included the purchase of call options and the sale of warrants. As a result of
the Call Spread Transactions, the conversion price of $46.21 was effectively increased to $60.27.
As of June 30, 2009, the if-converted value did not exceed the principal amounts.
During February 2009, the Company completed an offering of $518 convertible senior notes due
on February 15, 2012. The notes will pay interest semi-annually at a rate of 3.00% per annum. The
notes are convertible, at the holders option, equivalent to a conversion price of $46.25 per share
of common stock (11,189,189 shares of common stock). As of June 30, 2009, the if-converted value
did not exceed the principal amount.
5
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
The Company has recorded the following in the Consolidated Balance Sheets related to the
convertible senior notes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At June 30, 2009 |
|
|
At December 31, 2008 |
|
|
|
Convertible Senior Notes Due |
|
|
Convertible Senior Notes Due |
|
|
|
2012 |
|
|
2014 |
|
|
2017 |
|
|
2012 |
|
|
2014 |
|
|
2017 |
|
Additional paid-in capital |
|
$ |
46 |
|
|
$ |
97 |
|
|
$ |
123 |
|
|
$ |
|
|
|
$ |
97 |
|
|
$ |
123 |
|
Principal amount |
|
$ |
518 |
|
|
$ |
575 |
|
|
$ |
575 |
|
|
$ |
|
|
|
$ |
575 |
|
|
$ |
575 |
|
Unamortized debt discount |
|
|
(66 |
) |
|
|
(117 |
) |
|
|
(166 |
) |
|
|
|
|
|
|
(127 |
) |
|
|
(174 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net carrying amount |
|
$ |
452 |
|
|
$ |
458 |
|
|
$ |
409 |
|
|
$ |
|
|
|
$ |
448 |
|
|
$ |
401 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As a result of adopting FSP APB 14-1, the effective interest rates increased by approximately
5 percentage points to 8.5%, 6.0% and 6.25% for the 2012, 2014 and 2017 notes, respectively, for
the non-cash amortization of the debt discount over the lives of the notes. Interest expense was
increased by $8 which decreased the Companys Income from continuing operations and Net income by
$6 ($0.01 per share) for the three months ended June 30, 2008. Interest expense was increased by
$16 which decreased the Companys Income from continuing operations and Net income by $11 ($0.02
per share) for the six months ended June 30, 2008. Had FSP APB 14-1 been effective in 2008, the
Company would have paid its fourth quarter 2008 dividends out of Additional paid-in capital rather
than Retained earnings; therefore the Company made the reclassification in 2009. Cash flows from
operations were not impacted by the adoption of FSP APB 14-1. The impact on the Companys 2009
opening balance in Retained earnings was as follows:
|
|
|
|
|
|
|
At December 31, |
|
|
|
2008 |
|
Balance before application of FSP APB 14-1 |
|
$ |
7 |
|
Impact of adoption of FSP APB 14-1 |
|
|
(31 |
) |
Reclassification of dividends to Additional paid-in capital |
|
|
28 |
|
|
|
|
|
Balance after application of FSP APB 14-1 |
|
$ |
4 |
|
|
|
|
|
Following adoption and the issuance of the 2012 convertible senior notes in February 2009, the
Company will amortize $375 ($244 net of tax) of debt discount over the lives of the Companys
convertible senior notes. For the three months ended June 30, 2009, the Company recorded $8 and $15
of interest expense for the contractual interest coupon and amortization of the debt discount,
respectively, related to the convertible senior notes. For the six months ended June 30, 2009, the
Company recorded $14 and $26 of interest expense for the contractual interest coupon and
amortization of the debt discount, respectively, related to the convertible senior notes. The
remaining unamortized debt discount will be amortized over the remaining 3, 5 and 8 year periods of
the 2012, 2014 and 2017 convertible senior notes, respectively.
Accounting for the Useful Life of Intangible Assets
In April 2008, the FASB issued FSP No. FAS 142-3, Determination of the Useful Life of
Intangible Assets (FSP FAS 142-3) which amends the factors that should be considered in
developing renewal or extension assumptions used to determine the useful life of a recognized
intangible asset under FASB Statement No. 142, Goodwill and Other Intangible Assets (FAS 142).
The intent of this FSP is to improve the consistency between the useful life of a recognized
intangible asset under FAS 142 and the period of expected cash flows used to measure the fair value
of the asset under FASB Statement No. 141 (revised 2007), Business Combinations (FAS 141(R)).
FSP FAS 142-3 was effective for the Companys fiscal year beginning January 1, 2009 and has been
applied prospectively to intangible assets acquired after the effective date. The adoption of FSP
FAS 142-3 had no impact on the Companys consolidated financial position, results of operations or
cash flows.
Derivative Instruments
In March 2008, the FASB issued FASB Statement No. 161, Disclosure about Derivative
Instruments and Hedging Activities an amendment of FASB Statement No. 133 (FAS 161) which
provides revised guidance for enhanced disclosures about how and why an entity uses derivative
instruments, how derivative instruments and the related hedged items are accounted for under FAS
133, and how derivative instruments and the related hedged items affect an entitys financial
position, financial performance and cash flows. The Company adopted the provisions of FAS 161 on
January 1, 2009. The adoption of FAS 161 had no impact on the Companys consolidated financial
position, results of operations or cash flows. See Note 16 for the Companys derivative instruments
disclosure.
6
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
Business Combinations
In December 2007, the FASB issued FAS 141(R) which replaces FAS 141, and provides new guidance
for recognizing and measuring identifiable assets and goodwill acquired, liabilities assumed, and
any noncontrolling interest in the acquiree. FAS 141(R) also provides disclosure requirements to
enable users of the financial statements to evaluate the nature and financial effects of the
business combination. The Company adopted the provisions of FAS 141(R) on January 1, 2009 and
applied them to the acquisition of the remaining 33.33% interest in the Boddington project
completed on June 25, 2009 (see Note 14).
In April 2009, the FASB issued FSP No. FAS 141(R)-1, Accounting for Assets Acquired and
Liabilities Assumed in a Business Combination That Arise from Contingencies (FSP FAS 141(R)-1),
which amends and clarifies FAS 141(R). The intent of FSP FAS 141(R)-1 is to address application
issues on initial recognition and measurement, subsequent measurement and accounting, and
disclosure of assets and liabilities arising from contingencies in a business combination. This FSP
is effective for assets or liabilities arising from contingencies in business combinations for
which the acquisition date is on or after January 1, 2009. The adoption of FSP FAS 141(R)-1 did not
have any impact on the Companys acquisition of the remaining 33.33% interest in the Boddington
project completed on June 25, 2009 (see Note 14).
Noncontrolling Interests
In December 2007, the FASB issued FASB Statement No. 160 Noncontrolling Interests in
Consolidated Financial Statements an amendment of ARB No. 51 (FAS 160), which establishes
accounting and reporting standards pertaining to (i) ownership interests in subsidiaries held by
parties other than the parent (noncontrolling interest), (ii) the amount of net income
attributable to the parent and to the noncontrolling interest, (iii) changes in a parents
ownership interest, and (iv) the valuation of any retained noncontrolling equity investment when a
subsidiary is deconsolidated. If a subsidiary is deconsolidated, any retained noncontrolling equity
investment in the former subsidiary is measured at fair value and a gain or loss is recognized in
net income based on such fair value. For presentation and disclosure purposes, FAS 160 requires
noncontrolling interests to be classified as a separate component of stockholders equity. The
Company adopted the provisions of FAS 160 on January 1, 2009. Except for presentation changes, the
adoption of FAS 160 had no impact on the Companys consolidated financial position, results of
operations or cash flows.
Fair Value Accounting
In September 2006, the FASB issued FASB Statement No. 157, Fair Value Measurements (FAS
157). FAS 157 defines fair value, establishes a framework for measuring fair value in GAAP, and
expands disclosures about fair value measurements. The Company adopted the provisions of FAS 157
for assets and liabilities measured at fair value on a recurring basis on January 1, 2008. In
February 2008, the FASB staff issued Staff Position No. 157-2 Effective Date of FASB Statement No.
157 (FSP FAS 157-2). FSP FAS 157-2 delayed the effective date of FAS 157 for nonfinancial assets
and nonfinancial liabilities that are recognized or disclosed at fair value in the financial
statements on a nonrecurring basis. The Company adopted the provisions of FSP FAS 157-2 for the
Companys nonfinancial assets and liabilities measured at fair value on a nonrecurring basis on
January 1, 2009. Refer to Note 15 for further details regarding the Companys assets and
liabilities measured at fair value.
In April 2009, the FASB issued Staff Position No. FAS 157-4, Determining Fair Value When the
Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and
Identifying Transactions That Are Not Orderly (FSP FAS 157-4), which provides additional
guidance on determining fair value when the volume and level of activity for an asset or liability
have significantly decreased and includes guidance on identifying circumstances that indicate when
a transaction is not orderly. In April 2009, the FASB issued Staff Position No. FAS 115-2 and FAS
124-2, Recognition and Presentation of Other-Than-Temporary Impairments (FSP FAS 115-2 and FAS
124-2), which: i) clarifies the interaction of the factors that should be considered when
determining whether a debt security is other than temporarily impaired, ii) provides guidance on
the amount of an other-than-temporary impairment recognized in earnings and other comprehensive
income and iii) expands the disclosures required for other-than-temporary impairments for debt and
equity securities. Also in April 2009, the FASB issued Staff Position No. 107-1 and APB 28-1,
Interim Disclosures about Fair Value of Financial Instruments (FSP FAS 107-1 and APB 28-1),
which requires disclosures about the fair value of financial instruments for interim reporting
periods of publicly traded companies as well as in annual financial statements. Adoption of these
Staff Positions is required for the Companys interim reporting period beginning April 1, 2009 with
early adoption permitted. The Company adopted the provisions of FSP FAS 157-4, FSP FAS 115-2 and
FAS 124-2, and FSP FAS 107-1 and APB 28-1 for the interim period ended March 31, 2009. Refer to
Note 15 for further details regarding the Companys assets and liabilities measured at fair value.
7
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
Recently Issued Accounting Pronouncements
The Accounting Standards Codification
In June 2009, the FASB issued FASB Statement No. 168, The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principlesa replacement of FASB
Statement No. 162 (FAS 168 or the Codification). FAS 168 will become the source of
authoritative U.S. GAAP to be applied by nongovernmental entities. Rules and interpretive releases
of the Securities and Exchange Commission (SEC) under authority of federal securities laws are
also sources of authoritative GAAP for SEC registrants. The Codification will supersede all non-SEC
accounting and reporting standards. All other nongrandfathered non-SEC accounting literature not
included in the Codification will become nonauthoritative. FAS 168 is effective for the Companys
interim quarterly period beginning July 1, 2009. The Company does not expect the adoption of FAS
168 to have an impact on the Companys consolidated financial position, results of operations or
cash flows.
Variable Interest Entities
In June 2009, the FASB issued FASB Statement No. 167, Amendments to FASB Interpretation No.
46(R) (FAS 167), which requires an entity to perform a qualitative analysis to determine whether
the enterprises variable interest gives it a controlling financial interest in a variable interest
entity (VIE). This analysis identifies a primary beneficiary of a VIE as the entity that has both
of the following characteristics: i) the power to direct the activities of a VIE that most
significantly impact the entitys economic performance and ii) the obligation to absorb losses or
receive benefits from the entity that could potentially be significant to the VIE. FAS 167 also
amends FIN 46(R) to require ongoing reassessments of the primary beneficiary of a VIE. The
provisions of FAS 167 are effective for the Companys fiscal year beginning January 1, 2010. The
Company currently accounts for Nusa Tenggara Partnership (NTP) as a VIE and is evaluating the
potential impact of adopting this statement on the Companys consolidated financial position,
results of operations and cash flows.
NOTE 3 ADVANCED PROJECTS, RESEARCH AND DEVELOPMENT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
Hope Bay |
|
$ |
11 |
|
|
$ |
9 |
|
|
$ |
16 |
|
|
$ |
13 |
|
Boddington |
|
|
10 |
|
|
|
1 |
|
|
|
13 |
|
|
|
2 |
|
Technical and project services |
|
|
7 |
|
|
|
6 |
|
|
|
12 |
|
|
|
10 |
|
Nevada underground |
|
|
3 |
|
|
|
|
|
|
|
8 |
|
|
|
|
|
Corporate |
|
|
3 |
|
|
|
4 |
|
|
|
7 |
|
|
|
7 |
|
Fort a la Corne JV |
|
|
|
|
|
|
6 |
|
|
|
1 |
|
|
|
13 |
|
Other |
|
|
8 |
|
|
|
13 |
|
|
|
16 |
|
|
|
24 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
42 |
|
|
$ |
39 |
|
|
$ |
73 |
|
|
$ |
69 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
NOTE 4 OTHER EXPENSE, NET
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
Boddington acquisition costs (Note 14) |
|
$ |
59 |
|
|
$ |
|
|
|
$ |
67 |
|
|
$ |
|
|
Regional administration |
|
|
14 |
|
|
|
12 |
|
|
|
26 |
|
|
|
21 |
|
Community development |
|
|
11 |
|
|
|
18 |
|
|
|
21 |
|
|
|
32 |
|
Workforce reduction |
|
|
1 |
|
|
|
|
|
|
|
15 |
|
|
|
|
|
Peruvian royalty |
|
|
5 |
|
|
|
4 |
|
|
|
11 |
|
|
|
11 |
|
Western Australia power plant |
|
|
6 |
|
|
|
8 |
|
|
|
9 |
|
|
|
13 |
|
Batu Hijau divestiture |
|
|
1 |
|
|
|
2 |
|
|
|
6 |
|
|
|
5 |
|
World Gold Council dues |
|
|
3 |
|
|
|
2 |
|
|
|
6 |
|
|
|
5 |
|
Accretion, non-operating (Note 23) |
|
|
3 |
|
|
|
3 |
|
|
|
6 |
|
|
|
5 |
|
Pension settlement loss (Note 6) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11 |
|
Reclamation estimate revisions (Note 23) |
|
|
|
|
|
|
59 |
|
|
|
|
|
|
|
61 |
|
Other |
|
|
13 |
|
|
|
10 |
|
|
|
25 |
|
|
|
16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
116 |
|
|
$ |
118 |
|
|
$ |
192 |
|
|
$ |
180 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTE 5 OTHER INCOME, NET
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
Canadian Oil Sands Trust income |
|
$ |
5 |
|
|
$ |
31 |
|
|
$ |
9 |
|
|
$ |
55 |
|
Interest income |
|
|
6 |
|
|
|
7 |
|
|
|
9 |
|
|
|
17 |
|
Gain on sale of investments, net |
|
|
|
|
|
|
10 |
|
|
|
|
|
|
|
10 |
|
Income from development projects, net |
|
|
|
|
|
|
9 |
|
|
|
|
|
|
|
9 |
|
Foreign currency exchange gain (losses), net |
|
|
1 |
|
|
|
(7 |
) |
|
|
(2 |
) |
|
|
(13 |
) |
(Loss) gain on ineffective portion of derivative instruments, net (Note 16) |
|
|
(3 |
) |
|
|
(1 |
) |
|
|
(4 |
) |
|
|
2 |
|
Impairment of marketable securities (Note 17) |
|
|
|
|
|
|
(34 |
) |
|
|
(6 |
) |
|
|
(56 |
) |
Other |
|
|
|
|
|
|
4 |
|
|
|
12 |
|
|
|
10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
9 |
|
|
$ |
19 |
|
|
$ |
18 |
|
|
$ |
34 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTE 6 EMPLOYEE PENSION AND OTHER BENEFIT PLANS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
Pension benefit costs, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service cost |
|
$ |
4 |
|
|
$ |
4 |
|
|
$ |
9 |
|
|
$ |
8 |
|
Interest cost |
|
|
8 |
|
|
|
8 |
|
|
|
16 |
|
|
|
15 |
|
Expected return on plan assets |
|
|
(7 |
) |
|
|
(7 |
) |
|
|
(14 |
) |
|
|
(14 |
) |
Amortization of prior service cost |
|
|
1 |
|
|
|
|
|
|
|
1 |
|
|
|
|
|
Amortization of loss |
|
|
4 |
|
|
|
1 |
|
|
|
7 |
|
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
10 |
|
|
$ |
6 |
|
|
$ |
19 |
|
|
$ |
11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
Other benefit costs, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service cost |
|
$ |
|
|
|
$ |
1 |
|
|
$ |
1 |
|
|
$ |
1 |
|
Interest cost |
|
|
2 |
|
|
|
1 |
|
|
|
3 |
|
|
|
2 |
|
Amortization of gain |
|
|
|
|
|
|
(1 |
) |
|
|
|
|
|
|
(1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
2 |
|
|
$ |
1 |
|
|
$ |
4 |
|
|
$ |
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended June 30, 2009 and 2008, no pension settlement losses were incurred.
For the six months ended June 30, 2009 and 2008, pension settlement losses of $nil and $11,
respectively, related to senior management retirements were incurred. These costs were recorded in
Other expense, net (see Note 4).
9
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
NOTE 7 STOCK BASED COMPENSATION
The Company recognized stock option and other stock based compensation as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
Stock options |
|
$ |
5 |
|
|
$ |
5 |
|
|
$ |
8 |
|
|
$ |
8 |
|
Restricted stock units |
|
|
2 |
|
|
|
|
|
|
|
3 |
|
|
|
|
|
Deferred stock awards |
|
|
5 |
|
|
|
3 |
|
|
|
8 |
|
|
|
5 |
|
Restricted stock awards |
|
|
1 |
|
|
|
1 |
|
|
|
3 |
|
|
|
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
13 |
|
|
$ |
9 |
|
|
$ |
22 |
|
|
$ |
16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three and six months ended June 30, 2009 and 2008, 1,157,825 and 1,112,463 stock
options, respectively, were granted at the weighted-average exercise price of $40 and $44,
respectively, per underlying share of the Companys common stock. At June 30, 2009, there was $25
of unrecognized compensation cost related to unvested stock options. This cost is expected to be
recognized over a weighted-average period of approximately 2.4 years.
For the three months ended June 30, 2009 and 2008, 198,057 and 3,855 shares of restricted
stock units, respectively, were granted at the weighted average fair market value of $40 and $49,
respectively per underlying share of the Companys common stock. For the six months ended June 30,
2009 and 2008, 490,273 and 8,927 shares of restricted stock units, respectively, were granted, at
the weighted-average fair market value of $42 and $49, respectively, per underlying share of the
Companys common stock.
No deferred stock awards were granted during the three and six months ended June 30, 2009. For
the three and six months ended June 30, 2008, 393,533 deferred stock awards were granted at the
weighted-average fair market value of $44 per underlying share of the Companys common stock.
No restricted stock awards were granted during the three and six months ended June 30, 2009.
For the three and six months ended June 30, 2008, 6,743 and 114,663 shares of restricted stock,
respectively, were granted and issued, at the weighted-average fair market value of $44 and $48,
respectively, per underlying share of the Companys common stock.
NOTE 8 INCOME TAXES
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 has paid
the 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 June 30, 2009, the Companys total unrecognized
tax benefit was $173 for uncertain tax positions taken or expected to be taken on tax returns. Of
this, $140 represents the amount of unrecognized tax benefits that, if recognized, would affect the
Companys effective income tax rate. Also included in the balance at June 30, 2009 are $6 of tax
positions that, due to the impact of deferred tax accounting, the disallowance of which would not
affect the annual effective tax rate.
As a result of (i) statute of limitations that will begin to expire within the next 12 months
in various jurisdictions, and (ii) possible settlements of audit-related issues with taxing
authorities in various jurisdictions, the Company believes that it is reasonably possible that the
total amount of its net unrecognized income tax benefits will decrease by approximately $13 to $37
in the next 12 months.
10
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
NOTE 9 DISCONTINUED OPERATIONS
In June 2009, Newmonts Board of Directors approved a plan to sell the Kori Kollo operation in
Bolivia. Discontinued operations include the Companys Kori Kollo operation and the royalty
portfolio and Pajingo operations, both sold in December 2007.
The Company has reclassified the historical balance sheet amounts and the income statement
results to Assets and Liabilities of operations held for sale on the Condensed Consolidated Balance
Sheets and to (Loss) income from discontinued operations in the Consolidated Statements of Income
for all periods presented. The Consolidated Statements of Cash Flows have been reclassified for
assets held for sale and discontinued operations for all periods presented.
The following table details selected financial information included in the (Loss) income from
discontinued operations in the consolidated statements of income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
Sales gold, net |
|
$ |
16 |
|
|
$ |
19 |
|
|
$ |
32 |
|
|
$ |
37 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations |
|
$ |
1 |
|
|
$ |
7 |
|
|
$ |
1 |
|
|
$ |
12 |
|
Loss on impairment |
|
|
(44 |
) |
|
|
|
|
|
|
(44 |
) |
|
|
|
|
(Loss) gain on sale of royalty portfolio |
|
|
|
|
|
|
(2 |
) |
|
|
|
|
|
|
5 |
|
(Loss) gain on sale of Pajingo assets |
|
|
|
|
|
|
(1 |
) |
|
|
|
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax (loss) income |
|
|
(43 |
) |
|
|
4 |
|
|
|
(43 |
) |
|
|
18 |
|
Income tax benefit (expense) |
|
|
29 |
|
|
|
(2 |
) |
|
|
29 |
|
|
|
(8 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from discontinued operations |
|
$ |
(14 |
) |
|
$ |
2 |
|
|
$ |
(14 |
) |
|
$ |
10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The major classes of Assets and Liabilities of operations held for sale in the Consolidated
Balance Sheets are as follows:
|
|
|
|
|
|
|
|
|
|
|
At June 30, |
|
|
At December 31, |
|
|
|
2009 |
|
|
2008 |
|
Assets: |
|
|
|
|
|
|
|
|
Cash |
|
$ |
1 |
|
|
$ |
|
|
Accounts receivable |
|
|
9 |
|
|
|
9 |
|
Inventories |
|
|
8 |
|
|
|
12 |
|
Stockpiles and ore on leach pads |
|
|
13 |
|
|
|
43 |
|
Property, plant and mine development |
|
|
1 |
|
|
|
4 |
|
Deferred income tax assets |
|
|
31 |
|
|
|
2 |
|
Other assets |
|
|
6 |
|
|
|
3 |
|
|
|
|
|
|
|
|
Total assets of operations held for sale |
|
$ |
69 |
|
|
$ |
73 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
|
Current and long-term debt |
|
$ |
2 |
|
|
$ |
4 |
|
Accounts payable |
|
|
|
|
|
|
1 |
|
Employee-related benefits |
|
|
9 |
|
|
|
8 |
|
Reclamation and remediation liabilities |
|
|
17 |
|
|
|
17 |
|
Other liabilities |
|
|
26 |
|
|
|
6 |
|
|
|
|
|
|
|
|
Total liabilities of operations held for sale |
|
$ |
54 |
|
|
$ |
36 |
|
|
|
|
|
|
|
|
11
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
The following table details selected financial information included in Net cash provided from
(used in) discontinued operations, Net cash used in investing activities of discontinued operations
and Net cash used in financing activities of discontinued operations:
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
|
|
|
2009 |
|
|
2008 |
|
Net cash provided from (used in) discontinued operations: |
|
|
|
|
|
|
|
|
(Loss) income from discontinued operations |
|
$ |
(14 |
) |
|
$ |
10 |
|
Impairment of assets held for sale |
|
|
44 |
|
|
|
|
|
Write-down of inventory |
|
|
7 |
|
|
|
|
|
Amortization |
|
|
3 |
|
|
|
4 |
|
Deferred income taxes |
|
|
(29 |
) |
|
|
(1 |
) |
Other operating adjustments |
|
|
1 |
|
|
|
1 |
|
Increase (decrease) in net operating liabilities |
|
|
(4 |
) |
|
|
(121 |
) |
|
|
|
|
|
|
|
|
|
$ |
8 |
|
|
$ |
(107 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities of discontinued operations: |
|
|
|
|
|
|
|
|
Additions to property, plant and mine development |
|
$ |
|
|
|
$ |
(4 |
) |
Proceeds from asset sales, net |
|
|
|
|
|
|
5 |
|
Royalty portfolio sale expenses |
|
|
|
|
|
|
(11 |
) |
|
|
|
|
|
|
|
|
|
$ |
|
|
|
$ |
(10 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in financing activities of discontinued operations: |
|
|
|
|
|
|
|
|
Repayment of debt |
|
$ |
(2 |
) |
|
$ |
(2 |
) |
|
|
|
|
|
|
|
|
|
$ |
(2 |
) |
|
$ |
(2 |
) |
|
|
|
|
|
|
|
NOTE 10 NONCONTROLLING INTERESTS
The following table summarizes the net income attributable to the interests of entities not
controlled by the Company, but consolidated in the Companys financial statements:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
Yanacocha |
|
$ |
77 |
|
|
$ |
48 |
|
|
$ |
144 |
|
|
$ |
139 |
|
Batu Hijau |
|
|
71 |
|
|
|
19 |
|
|
|
92 |
|
|
|
120 |
|
Other |
|
|
(4 |
) |
|
|
1 |
|
|
|
(4 |
) |
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
144 |
|
|
$ |
68 |
|
|
$ |
232 |
|
|
$ |
260 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Newmont currently has a 45% ownership interest in Batu Hijau, held through NTP with an
affiliate of Sumitomo Corporation of Japan (Sumitomo). Newmont has a 56.25% interest in NTP and
the Sumitomo affiliate holds the remaining 43.75%. NTP in turn owns 80% of P.T. Newmont Nusa
Tenggara (PTNNT), the Indonesian subsidiary that operates the Batu Hijau mine. Newmont identified
NTP as a Variable Interest Entity as a result of certain capital structures and contractual
relationships and has fully consolidated Batu Hijau in its consolidated financial statements since
January 1, 2004. The remaining 20% interest in PTNNT is owned by P.T. Pukuafu Indah (PTPI), an
unrelated Indonesian company. NTPs interest in PTNNT is the subject of an international
arbitration proceeding and a final award concerning PTNNTs interest was issued by the arbitration
panel on March 31, 2009. For further information concerning the arbitral award, see Note 27.
Newmont has a 51.35% ownership interest in Yanacocha with the remaining interests held by
Compañia de Minas Buenaventura, S.A.A. (43.65%) and the International Finance Corporation (5%).
In April 2008, the Company purchased 15,960 additional shares of European Gold Refineries SA
joint venture (EGR) for $11 in cash increasing its ownership interest to 56.67% from 46.72%.
Swiss residents and Mitsubishi International Corporation hold the remaining 43.33%. The acquisition
of the additional interest resulted in the consolidation of EGR. In November 2008, EGR repurchased
6.55% of its own shares from a minority shareholder bringing Newmonts ownership to 60.64%. Prior
to consolidation, the Company accounted for EGR using the equity method of accounting.
12
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
NOTE 11 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 to basic income per common share except that the
denominator is increased to include the number of additional common shares that would have been
outstanding if the potentially dilutive common shares had been issued.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Newmont stockholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
171 |
|
|
$ |
270 |
|
|
$ |
360 |
|
|
$ |
627 |
|
Discontinued operations |
|
|
(9 |
) |
|
|
1 |
|
|
|
(9 |
) |
|
|
9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
162 |
|
|
$ |
271 |
|
|
$ |
351 |
|
|
$ |
636 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
490 |
|
|
|
454 |
|
|
|
483 |
|
|
|
454 |
|
Effect of employee stock-based awards |
|
|
1 |
|
|
|
2 |
|
|
|
1 |
|
|
|
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
|
491 |
|
|
|
456 |
|
|
|
484 |
|
|
|
457 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Newmont stockholders
per common share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
0.35 |
|
|
$ |
0.60 |
|
|
$ |
0.75 |
|
|
$ |
1.38 |
|
Discontinued operations |
|
|
(0.02 |
) |
|
|
|
|
|
|
(0.02 |
) |
|
|
0.02 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
0.33 |
|
|
$ |
0.60 |
|
|
$ |
0.73 |
|
|
$ |
1.40 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
0.35 |
|
|
$ |
0.59 |
|
|
$ |
0.75 |
|
|
$ |
1.37 |
|
Discontinued operations |
|
|
(0.02 |
) |
|
|
|
|
|
|
(0.02 |
) |
|
|
0.02 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
0.33 |
|
|
$ |
0.59 |
|
|
$ |
0.73 |
|
|
$ |
1.39 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In February 2009, the Company completed a public offering of 34,500,000 shares of common stock
at $37 per share for net proceeds of $1,234.
Options to purchase 5.2 million and 1.1 million shares of common stock at average exercise
prices of $46 and $55 were outstanding at June 30, 2009 and 2008, respectively, but were not
included in the computation of diluted weighted average number of common shares because the
exercise prices of the options exceeded the price of the common stock.
In July 2007 and February 2009, Newmont issued $1,150 and $518, respectively, of convertible
notes that, if converted in the future, would have a potentially dilutive effect on the Companys
stock. Under the indenture for the convertible notes, upon conversion Newmont is required to settle
the principal amount of the convertible notes in cash and may elect to settle the remaining
conversion obligation (stock price in excess of the conversion price) in cash, shares or a
combination thereof. The effect on diluted earnings per share is calculated under the net share
settlement method in accordance with the FASBs EITF Issue No. 04-8, The Effect of Contingently
Convertible Instruments on Diluted Earnings per Share. Under the net share settlement method, the
Company includes the amount of shares it would take to satisfy the conversion obligation, assuming
that all of the convertible notes are surrendered. The average closing price of the Companys
common stock for each of the periods presented is used as the basis for determining dilution. The
average price of the Companys common stock for all periods presented did not exceed the conversion
price of $46.25 and $46.21 for the notes issued in 2009 and 2007, respectively, and therefore, did
not have a dilutive effect on earnings per share.
In connection with the 2007 convertible senior notes offering, the Company entered into Call
Spread Transactions. These transactions included the purchase of call options and the sale of
warrants. As a result of the Call Spread Transactions, the conversion price of $46.21 was
effectively increased to $60.27. Should the warrant transactions become dilutive to the Companys
earnings per share (i.e. Newmonts share price exceeds $60.27) the underlying shares will be
included in the computation of diluted income per common share.
13
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
NOTE 12 COMPREHENSIVE INCOME
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
306 |
|
|
$ |
339 |
|
|
$ |
583 |
|
|
$ |
896 |
|
Other comprehensive income (loss), net of tax: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain on marketable equity securities |
|
|
99 |
|
|
|
369 |
|
|
|
192 |
|
|
|
404 |
|
Foreign currency translation adjustments |
|
|
136 |
|
|
|
59 |
|
|
|
89 |
|
|
|
(17 |
) |
Change in pension and other benefit liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net amount reclassified to income |
|
|
2 |
|
|
|
1 |
|
|
|
3 |
|
|
|
8 |
|
Change in fair value of cash flow hedge instruments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change from periodic revaluations |
|
|
105 |
|
|
|
34 |
|
|
|
86 |
|
|
|
51 |
|
Net amount reclassified to income |
|
|
7 |
|
|
|
(5 |
) |
|
|
24 |
|
|
|
(8 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net unrecognized gain on derivatives |
|
|
112 |
|
|
|
29 |
|
|
|
110 |
|
|
|
43 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
349 |
|
|
|
458 |
|
|
|
394 |
|
|
|
438 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income |
|
$ |
655 |
|
|
$ |
797 |
|
|
$ |
977 |
|
|
$ |
1,334 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income attributable to: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Newmont stockholders |
|
$ |
510 |
|
|
$ |
729 |
|
|
$ |
744 |
|
|
$ |
1,074 |
|
Noncontrolling interests |
|
|
145 |
|
|
|
68 |
|
|
|
233 |
|
|
|
260 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
655 |
|
|
$ |
797 |
|
|
$ |
977 |
|
|
$ |
1,334 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
NOTE 13 CHANGES IN STOCKHOLDERS EQUITY
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
|
|
|
2009 |
|
|
2008 |
|
Common stock: |
|
|
|
|
|
|
|
|
At beginning of period |
|
$ |
709 |
|
|
$ |
696 |
|
Common stock offering |
|
|
55 |
|
|
|
|
|
Stock based compensation |
|
|
2 |
|
|
|
2 |
|
Shares issued in exchange for exchangeable shares |
|
|
2 |
|
|
|
5 |
|
|
|
|
|
|
|
|
At end of period |
|
|
768 |
|
|
|
703 |
|
|
|
|
|
|
|
|
|
|
Additional paid-in capital: |
|
|
|
|
|
|
|
|
At beginning of period |
|
|
6,831 |
|
|
|
6,916 |
|
Common stock offering |
|
|
1,179 |
|
|
|
|
|
Convertible debt issuance |
|
|
46 |
|
|
|
|
|
Common stock dividends |
|
|
(45 |
) |
|
|
(91 |
) |
Stock based compensation |
|
|
43 |
|
|
|
52 |
|
Shares issued in exchange for exchangeable shares |
|
|
(2 |
) |
|
|
(6 |
) |
|
|
|
|
|
|
|
At end of period |
|
|
8,052 |
|
|
|
6,871 |
|
|
|
|
|
|
|
|
|
|
Accumulated other comprehensive (loss) income: |
|
|
|
|
|
|
|
|
At beginning of period |
|
|
(253 |
) |
|
|
957 |
|
Other comprehensive income (Note 12) |
|
|
394 |
|
|
|
438 |
|
|
|
|
|
|
|
|
At end of period |
|
|
141 |
|
|
|
1,395 |
|
|
|
|
|
|
|
|
|
|
Retained earnings: |
|
|
|
|
|
|
|
|
At beginning of period |
|
|
4 |
|
|
|
(809 |
) |
Net income attributable to Newmont stockholders |
|
|
351 |
|
|
|
636 |
|
Common stock dividends |
|
|
(53 |
) |
|
|
|
|
|
|
|
|
|
|
|
At end of period |
|
|
302 |
|
|
|
(173 |
) |
|
|
|
|
|
|
|
|
|
Noncontrolling interests: |
|
|
|
|
|
|
|
|
At beginning of period |
|
|
1,370 |
|
|
|
1,449 |
|
Net income attributable to noncontrolling interests |
|
|
232 |
|
|
|
260 |
|
Dividends paid to noncontrolling interests |
|
|
(112 |
) |
|
|
(147 |
) |
Other comprehensive income minority |
|
|
1 |
|
|
|
|
|
Acquisition of noncontrolling interest in Miramar Mining Corporation |
|
|
|
|
|
|
(39 |
) |
Acquisition of noncontrolling interest in EGR |
|
|
|
|
|
|
24 |
|
|
|
|
|
|
|
|
At end of period |
|
|
1,491 |
|
|
|
1,547 |
|
|
|
|
|
|
|
|
Total stockholdersequity |
|
$ |
10,754 |
|
|
$ |
10,343 |
|
|
|
|
|
|
|
|
NOTE 14 ACQUISITIONS
On June 25, 2009, the Company completed the acquisition of the remaining 33.33% interest in
Boddington from AngloGold Ashanti Australia Limited (AngloGold). The valuation date for the
transaction is January 1, 2009, and closing adjustments were made to reflect Newmonts economic
ownership from that date. Consideration for the acquisition consists of $750 less an $8 closing
adjustment paid in cash at closing, $240 payable in cash and/or Newmont common stock, at the
Companys option, in December 2009, and a contingent royalty capped at $100, equal to 50% of the
average realized operating margin (Revenue less Costs applicable to sales on a by-product basis),
if any, exceeding $600 per ounce, payable quarterly on one-third of gold sales from Boddington.
The following table summarizes the consideration to acquire the remaining interest in
Boddington:
|
|
|
|
|
Cash |
|
$ |
742 |
|
Cash and/or common shares |
|
|
240 |
|
Contingent consideration (fair value) |
|
|
62 |
|
|
|
|
|
|
|
$ |
1,044 |
|
|
|
|
|
15
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
The Company estimates that the value of the contingent consideration is approximately $62, and
has recognized this amount as part of the purchase price at the acquisition date. Amounts are
payable under the contingent royalty beginning in the second quarter of 2010. The range of
undiscounted amounts the Company could pay is between $0 and $100. The fair value of the contingent
royalty recognized was estimated by applying the income approach. See Note 15 for a description of
the key inputs used in deriving fair value.
In connection with the acquisition, Newmont incurred transaction costs of $67 (shown in Other
expense, net), including Australian stamp duties. $8 of these costs were paid during the first
quarter of 2009. Additionally, in June 2009, Newmont paid $182 to reimburse AngloGold for its share
of capital and other expenditures of the project from January 1, 2009 to June 25, 2009. The
reimbursement of capital expenditures is included in Property, plant and mine development, net, and
as Additions to property, plant and mine development on the cash flow statement.
The purchase price allocation based on the estimated fair values of assets acquired and
liabilities assumed is as follows:
|
|
|
|
|
Assets: |
|
|
|
|
Cash |
|
$ |
1 |
|
Property, plant and mine development, net |
|
|
1,073 |
|
Inventories and stockpiles |
|
|
7 |
|
Deferred income tax asset |
|
|
28 |
|
Other assets |
|
|
11 |
|
|
|
|
|
|
|
$ |
1,120 |
|
|
|
|
|
Liabilities: |
|
|
|
|
Accrued liabilities |
|
$ |
33 |
|
Reclamation liabilities |
|
|
15 |
|
Deferred income tax liability |
|
|
28 |
|
|
|
|
|
|
|
|
76 |
|
|
|
|
|
Net assets acquired |
|
$ |
1,044 |
|
|
|
|
|
In association with the acquisition of the remaining 33.33% interest in Boddington, on
February 3, 2009, the Company completed a public offering of $518 convertible senior notes,
including notes offered to cover over-allotments, maturing on February 15, 2012 for net proceeds of
$504 after deducting the underwriters discount and expenses of the offering (see Note 21).
Additionally, on February 3, 2009, the Company completed a public offering of 34,500,000 shares of
common stock, including shares offered to cover over-allotments, at a price of $37 per share, for
net proceeds of $1,234 after deducting the underwriters discount and expenses of the offering.
In the first quarter of 2009, La Herradura (of which Newmont owns 44%) purchased a mining
property near its Mexico operation for cash consideration of $11 (Newmonts 44% share).
The pro forma impact of all 2009 acquisitions on Net Income was not material.
In December 2007, the Company purchased approximately 70% of the common shares of Miramar
Mining Corporation (Miramar), which, in addition to the shares previously owned, brought the
Companys interest in Miramar to approximately 78%. During the first quarter of 2008, the Company
completed the acquisition of 100% of Miramar.
NOTE 15 FAIR VALUE ACCOUNTING
FAS 157 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 under
FAS 157 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). |
16
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
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 FAS
157, 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 June 30, 2009 |
|
|
|
Total |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash equivalents |
|
$ |
64 |
|
|
$ |
64 |
|
|
$ |
|
|
|
$ |
|
|
Marketable equity securities |
|
|
867 |
|
|
|
867 |
|
|
|
|
|
|
|
|
|
Corporate marketable debt securities |
|
|
9 |
|
|
|
9 |
|
|
|
|
|
|
|
|
|
Other marketable debt securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset backed commercial paper |
|
|
17 |
|
|
|
|
|
|
|
|
|
|
|
17 |
|
Auction rate securities |
|
|
4 |
|
|
|
|
|
|
|
|
|
|
|
4 |
|
Trade receivable from provisional
copper and gold concentrate sales,
net |
|
|
209 |
|
|
|
209 |
|
|
|
|
|
|
|
|
|
Derivative instruments, net |
|
|
62 |
|
|
|
|
|
|
|
62 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,232 |
|
|
$ |
1,149 |
|
|
$ |
62 |
|
|
$ |
21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8 5/8% debentures (hedged portion) |
|
$ |
96 |
|
|
$ |
|
|
|
$ |
96 |
|
|
$ |
|
|
Boddington contingent consideration |
|
|
62 |
|
|
|
|
|
|
|
|
|
|
|
62 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
158 |
|
|
$ |
|
|
|
$ |
96 |
|
|
$ |
62 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 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 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 corporate marketable debt securities are valued using quoted market prices in
active markets and as such are classified within Level 1 of the fair value hierarchy. The Companys
other marketable debt securities include investments in asset backed
commercial paper and auction rate securities. In January 2009, the
investments in the Companys asset backed commercial paper were restructured under court order. The
restructuring allowed a return of a portion of the investment and interest distribution to be made
to investors. The Company estimated the fair value of the asset backed commercial paper using a
probability of return to each class of notes reflective of information reviewed regarding the
separate classes of securities. The auction rate securities are traded in markets that are not active, trade
infrequently and have little price transparency. The Company estimated the fair value of the
auction rate securities based on weighted average risk calculations.
The asset backed commercial paper and auction rate securities are
classified within Level 3 of the fair value hierarchy.
The Companys net trade receivable from provisional copper and gold concentrate sales is
valued using quoted market prices based on the forward London Metal Exchange (LME) (copper) and
the London Bullion Market Association P.M. fix (London P.M. fix) (gold) 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. Where possible, the Company verifies the values
produced by its pricing models to market prices. 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.
17
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
The Company has fixed to floating swap contracts to hedge a portion of the interest rate risk
exposure of its 8 5/8% uncollateralized debentures due May 2011. The hedged portion of the
Companys 8 5/8% debentures are valued using pricing models which require inputs, including
risk-free interest rates and credit spreads. Because the inputs are derived from observable market
data, the hedged portion of the 8 5/8% debentures is classified within Level 2 of the fair value
hierarchy.
The Company has recorded a contingent consideration liability related to the acquisition of
the remaining 33.33% interest in Boddington (Note 14). The value of the contingent consideration
was determined using a valuation model which simulates future gold and copper prices and costs
applicable to sales to estimate fair value. The contingent consideration liability is classified
within Level 3 of the fair value hierarchy.
The table below sets forth a summary of changes in the fair value of the Companys Level 3
financial assets and liabilities for the six months ended June 30, 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Boddington |
|
|
|
|
|
|
Auction Rate |
|
|
Asset Backed |
|
|
Contingent |
|
|
|
|
|
|
Securities |
|
|
Commercial Paper |
|
|
Consideration |
|
|
Total |
|
Balance at beginning of period |
|
$ |
4 |
|
|
$ |
23 |
|
|
$ |
|
|
|
$ |
27 |
|
Unrealized losses |
|
|
|
|
|
|
(2 |
) |
|
|
|
|
|
|
(2 |
) |
Settlements |
|
|
|
|
|
|
(4 |
) |
|
|
|
|
|
|
(4 |
) |
Transfers in |
|
|
|
|
|
|
|
|
|
|
62 |
|
|
|
62 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at end of period |
|
$ |
4 |
|
|
$ |
17 |
|
|
$ |
62 |
|
|
$ |
83 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized losses of $2 for the period were included in Accumulated other comprehensive income
(loss) as a result of changes in C$ exchange rates from December 31, 2008. As of June 30, 2009, the
assets and liabilities classified within Level 3 of the fair value hierarchy represent 2% and 39%
of the total assets and liabilities measured at fair value, respectively.
The following table sets forth the Companys assets and liabilities measured at fair value on
a nonrecurring basis within the fair value hierarchy:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value at June 30, 2009 |
|
|
Total |
|
|
|
Total |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Losses |
|
Long-lived assets held for sale (Note 9) |
|
$ |
39 |
|
|
$ |
|
|
|
$ |
39 |
|
|
$ |
|
|
|
$ |
44 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-lived assets held for sale with a carrying amount of $83 were written down to their fair
value of $39, resulting in a loss of $44. The Company expects to realize an income tax benefit of
$30 related to the sale of these assets.
NOTE 16 DERIVATIVE INSTRUMENTS
The Company is exposed to certain financial and market risks relating to its ongoing business
operations. The primary risks managed by using derivative instruments are foreign currency exchange
risk, diesel price risk, and interest rate risk. In accordance with FAS 133, the Company designated
currency fixed forward and option contracts as cash flow hedges, diesel forward contracts as cash
flow hedges, and interest rate swap contracts as fair value hedges of a fixed-rate borrowing. All
of the derivative instruments were transacted for risk management purposes and qualify as hedging
instruments under FAS 133. The maximum period over which hedged forecasted transactions are
expected to occur is three years.
18
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
Cash Flow Hedges
Foreign Currency Contracts
Newmont entered into a series of foreign currency contracts to reduce the variability of the
US dollar amount of forecasted foreign currency expenditures caused by changes in currency rates.
Newmont entered into IDR/$ forward purchase contracts to hedge up to 80% of the Companys IDR
denominated operating expenditures which results in a blended IDR/$ rate realized each period. The
hedges are forward purchase contracts with expiration dates ranging up to one year from the date of
issue. The principal hedging objective is reduction in the volatility of realized period-on-period
IDR/$ rates. For the three months ended June 30, 2009 and 2008, the IDR/$ forward purchase
contracts had no impact on Batu Hijau Costs applicable to sales. For the six months ended June 30,
2009 and 2008, the IDR/$ forward purchase contracts increased Batu Hijau Costs applicable to sales
by $2 and reduced Batu Hijau Costs applicable to sales by $1, respectively. As of June 30, 2009,
the Company has hedged 45% of its expected remaining 2009 IDR operating expenditures.
Newmont implemented a multi-year layered program to hedge up to 85% of the Companys A$
denominated operating expenditures with forward contracts that have expiration dates ranging up to
three years from the date of issue. The principal hedging objective is reduction in the volatility
of realized period-on-period $/A$ rates. Each month, fixed forward contracts are obtained to hedge
1/36th of the forecasted monthly A$ operating cost exposure in the rolling three-year
hedge period resulting in a blended $/A$ rate realized. For the three months ended June 30, 2009
and 2008, the A$ operating hedge program increased Australia/New Zealand Costs applicable to sales
by $9 and reduced Australia/New Zealand Costs applicable to sales by $4, respectively. For the six
months ended June 30, 2009 and 2008, the A$ operating hedge program increased Australia/New Zealand
Costs applicable to sales by $25 and reduced Australia/New Zealand Costs applicable to sales by $5,
respectively. As of June 30, 2009, the Company has hedged 77% of its expected remaining 2009 A$
operating expenditures, and 53%, 27% and 7% of its expected 2010, 2011 and 2012 A$ operating
expenditures, respectively.
Newmont implemented a multi-year layered program to hedge up to 75% of the Companys NZ$
denominated operating expenditures with forward contracts that have expiration dates ranging up to
two years from the date of issue. The principal hedging objective is reduction in the volatility of
realized period-on-period $/NZ$ rates. Each month, fixed forward contracts are obtained to hedge
1/24th of the forecasted monthly NZ$ operating cost exposure in the rolling two-year
hedge period resulting in a blended $/NZ$ rate realized. For the three months ended June 30, 2009
and 2008, the NZ$ operating hedge program increased Australia/New Zealand Costs applicable to sales
by $1 and $nil, respectively. For the six months ended June 30, 2009 and 2008, the NZ$ operating
hedge program increased Australia/New Zealand Costs applicable to sales by $3 and $nil,
respectively. As of June 30, 2009, the Company has hedged 63% of its expected remaining 2009 NZ$
operating expenditures, and 32% and 7% of its expected 2010 and 2011 NZ$ operating expenditures,
respectively.
Newmont implemented a program to hedge up to 95% of the Companys A$ denominated capital
expenditures related to the construction of Boddington. The program consists of a series of fixed
forward contracts with expiration dates ranging up to one year from the date of issue. The realized
gains and losses associated with the capital expenditure hedge program will impact Amortization
during future periods in which the Boddington assets are placed into service. As of June 30, 2009,
the Company has hedged 83% of its expected remaining A$ denominated Boddington capital
expenditures.
All of the foreign currency contracts were 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 recorded in earnings during the period in which the hedged
transaction affects earnings. Gains and losses on the derivative representing hedge ineffectiveness
are recognized in current earnings.
19
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
Newmont had the following foreign currency derivative contracts outstanding at June 30, 2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total/ |
|
|
|
2009 |
|
|
2010 |
|
|
2011 |
|
|
2012 |
|
|
Average |
|
IDR Forward Purchase Contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ (millions) |
|
$ |
26 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
26 |
|
Average rate (IDR/$) |
|
|
10,717 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,717 |
|
IDR notional (millions) |
|
|
278,644 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
278,644 |
|
A$ Operating Forward Purchase Contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ (millions) |
|
$ |
223 |
|
|
$ |
413 |
|
|
$ |
200 |
|
|
$ |
24 |
|
|
$ |
860 |
|
Average rate ($/A$) |
|
|
0.77 |
|
|
|
0.75 |
|
|
|
0.70 |
|
|
|
0.68 |
|
|
|
0.74 |
|
A$ notional (millions) |
|
|
290 |
|
|
|
550 |
|
|
|
284 |
|
|
|
36 |
|
|
|
1,160 |
|
NZ$ Operating Forward Purchase Contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ (millions) |
|
$ |
20 |
|
|
$ |
19 |
|
|
$ |
1 |
|
|
$ |
|
|
|
$ |
40 |
|
Average rate ($/NZ$) |
|
|
0.63 |
|
|
|
0.59 |
|
|
|
0.54 |
|
|
|
|
|
|
|
0.61 |
|
NZ$ notional (millions) |
|
|
32 |
|
|
|
32 |
|
|
|
3 |
|
|
|
|
|
|
|
67 |
|
A$ Boddington Capital Forward Purchase Contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ (millions) |
|
$ |
156 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
156 |
|
Average rate ($/A$) |
|
|
0.79 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.79 |
|
A$ notional (millions) |
|
|
197 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
197 |
|
Diesel Fixed Forward Contracts
Newmont implemented a program to hedge up to 66% of its operating cost exposure related to
diesel prices of fuel consumed at its Nevada operations to reduce the variability in the diesel
prices realized. The program consists of a series of financially settled fixed forward contracts
with expiration dates of up to two years from the date of issue. For the three months ended June
30, 2009 and 2008, the Nevada diesel hedge program increased Nevada Costs applicable to sales by $4
and $nil, respectively. For the six months ended June 30, 2009 and 2008, the Nevada diesel hedge
program increased Nevada Costs applicable to sales by $11 and $nil, respectively. The contracts
have been designated as cash flow hedges of future diesel purchases, and as such, the effective
portion of unrealized changes in the market value have been recorded in Accumulated other
comprehensive income (loss) and are recorded in earnings during the period in which the hedged
transaction affects earnings. Gains and losses on the derivative representing hedge ineffectiveness
are recognized in current earnings. As of June 30, 2009, the Company has hedged 56% of its expected
remaining 2009 Nevada diesel expenditures, and 24% and 10% of its expected 2010 and 2011 Nevada
diesel expenditures, respectively.
Newmont had the following diesel derivative contracts outstanding at June 30, 2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expected Maturity Date |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total/ |
|
|
|
2009 |
|
|
2010 |
|
|
2011 |
|
|
Average |
|
Diesel Forward Purchase Contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$(millions) |
|
$ |
22 |
|
|
$ |
19 |
|
|
$ |
4 |
|
|
$ |
45 |
|
Average rate ($/gallon) |
|
|
1.90 |
|
|
|
1.84 |
|
|
|
2.00 |
|
|
|
1.88 |
|
Diesel gallons (millions) |
|
|
12 |
|
|
|
10 |
|
|
|
2 |
|
|
|
24 |
|
20
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
Fair Value Hedges
Interest Rate Swap Contracts
At June 30, 2009, Newmont had $100 fixed to floating swap contracts designated as a hedge
against a portion of its 8 5/8% debentures. The interest rate swap contracts were transacted to
provide balance to the Companys mix of fixed and floating rate debt. Under the hedge contract
terms, the Company receives fixed-rate interest payments at 8.625% and pays floating-rate interest
amounts based on periodic London Interbank Offered Rate (LIBOR) settings plus a spread, ranging
from 2.60% to 3.49%. The interest rate swap contracts were designated as fair value hedges, and as
such, changes in fair value have been recorded in income in each period, consistent with recording
changes to the mark-to-market value of the underlying hedged liability in income. Changes in the
mark-to-market value of the effective portion of the interest rate swap contracts are recognized as
a component of Interest expense, net. The hedge contracts decreased Interest expense, net by $1 and
$1 for the three months ended June 30, 2009 and 2008, respectively, and decreased Interest expense,
net by $2 and $1 for the six months ended June 30, 2009 and 2008, respectively. For the three
months ended June 30, 2009 and 2008, losses of $1 and $3, respectively, were included in Other
income, net of the ineffective portion of derivative instruments designated as fair value hedges.
For the six months ended June 30, 2009 and 2008, losses of $1 and $nil, respectively, were included
in Other income, net of the ineffective portion of derivative instruments designated as fair value
hedges.
Derivative Instrument Fair Values
Newmont had the following derivative instruments designated as hedges under FAS 133 with fair
values at June 30, 2009 and December 31, 2008:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Values of Derivative Instruments |
|
|
|
At June 30, 2009 |
|
|
|
Other |
|
|
Other |
|
|
Other |
|
|
Other |
|
|
|
Current |
|
|
Long-Term |
|
|
Current |
|
|
Long-Term |
|
|
|
Assets |
|
|
Assets |
|
|
Liabilities |
|
|
Liabilities |
|
Foreign currency exchange contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IDR operating forward purchase contracts |
|
$ |
1 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
NZ$ operating forward contracts |
|
|
2 |
|
|
|
1 |
|
|
|
1 |
|
|
|
|
|
A$ forward purchase contracts |
|
|
26 |
|
|
|
28 |
|
|
|
2 |
|
|
|
2 |
|
Diesel forward contracts |
|
|
3 |
|
|
|
1 |
|
|
|
2 |
|
|
|
|
|
Interest rate swap contracts |
|
|
2 |
|
|
|
5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total derivative instruments (Notes 20 and 22) |
|
$ |
34 |
|
|
$ |
35 |
|
|
$ |
5 |
|
|
$ |
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Values of Derivative Instruments |
|
|
|
At December 31, 2008 |
|
|
|
Other |
|
|
Other |
|
|
Other |
|
|
Other |
|
|
|
Current |
|
|
Long-Term |
|
|
Current |
|
|
Long-Term |
|
|
|
Assets |
|
|
Assets |
|
|
Liabilities |
|
|
Liabilities |
|
Foreign currency exchange contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IDR operating forward purchase contracts |
|
$ |
|
|
|
$ |
|
|
|
$ |
4 |
|
|
$ |
|
|
NZ$ operating forward contracts |
|
|
|
|
|
|
|
|
|
|
5 |
|
|
|
1 |
|
A$ forward purchase contracts |
|
|
3 |
|
|
|
1 |
|
|
|
87 |
|
|
|
42 |
|
A$ call option contracts |
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Diesel forward contracts |
|
|
|
|
|
|
|
|
|
|
15 |
|
|
|
|
|
Interest rate swap contracts |
|
|
2 |
|
|
|
7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total derivative instruments (Notes 20 and 22) |
|
$ |
6 |
|
|
$ |
8 |
|
|
$ |
111 |
|
|
$ |
43 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21
NEWMONT MINING CORPORATION
NOTES TO 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 (losses) gains reported in the Companys
Consolidated Financial Statements related to the Companys cash flow and fair value hedges and the
gains (losses) recorded for the hedged item related to the fair value hedges.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign Currency |
|
|
|
|
|
|
Exchange Contracts |
|
|
Diesel Forward Contracts |
|
|
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
For the three months ended June 30, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow hedging relationships: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain recognized in other comprehensive income
(effective portion) |
|
$ |
142 |
|
|
$ |
48 |
|
|
$ |
7 |
|
|
$ |
2 |
|
(Loss) gain reclassified from Accumulated
other comprehensive income into income
(effective
portion) (1) |
|
|
(9 |
) |
|
|
4 |
|
|
|
(4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
133 |
|
|
$ |
52 |
|
|
$ |
3 |
|
|
$ |
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the six months ended June 30, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain recognized in other comprehensive income
(effective portion) |
|
$ |
118 |
|
|
$ |
74 |
|
|
$ |
4 |
|
|
$ |
2 |
|
(Loss) gain reclassified from Accumulated
other comprehensive income into income
(effective
portion) (1) |
|
|
(30 |
) |
|
|
6 |
|
|
|
(11 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
88 |
|
|
$ |
80 |
|
|
$ |
(7 |
) |
|
$ |
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The (loss) gain for the effective portion of cash flow hedges reclassified from
Accumulated other comprehensive income (loss) is recorded in Costs applicable to sales. |
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 gain of approximately $22.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Rate |
|
|
8 5/8% Debentures |
|
|
|
Swap Contracts |
|
|
(Hedged Portion) |
|
|
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
For the three months ended June 30, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value hedging relationships: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain (loss) recognized in income (effective portion) (1) |
|
$ |
1 |
|
|
$ |
1 |
|
|
$ |
|
|
|
$ |
(1 |
) |
(Loss) gain recognized in income (ineffective portion) (2) |
|
|
(1 |
) |
|
|
(3 |
) |
|
|
(2 |
) |
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
$ |
(2 |
) |
|
$ |
(2 |
) |
|
$ |
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the six months ended June 30, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value hedging relationships: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain (loss) recognized in income (effective portion) (1) |
|
$ |
2 |
|
|
$ |
1 |
|
|
$ |
(1 |
) |
|
$ |
(1 |
) |
(Loss) gain recognized in income (ineffective portion) (2) |
|
|
(1 |
) |
|
|
|
|
|
|
(3 |
) |
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1 |
|
|
$ |
1 |
|
|
$ |
(4 |
) |
|
$ |
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The gain (loss) recognized for the effective portion of fair value hedges and the
underlying hedged debt is included in Interest expense, net. |
|
(2) |
|
The ineffective portion recognized for fair value hedges and the underlying hedged
debt is included in Other income, net. |
Provisional Copper and Gold Sales
LME copper prices averaged $2.12 per pound during the three months ended June 30, 2009,
compared with the Companys recorded average provisional price of $2.11 per pound before
mark-to-market gains and treatment and refining charges. LME copper prices averaged $1.84 per pound
during the six months ended June 30, 2009, compared with the Companys recorded average provisional
price of $1.88 per pound before mark-to-market gains and treatment and refining charges. The
applicable forward copper price at the end of the quarter was $2.25 per pound. During the three
months ended June 30, 2009, increasing copper prices resulted in a provisional pricing
mark-to-market gain of $35 ($0.33 per pound). During the six months ended June 30, 2009, changes in
copper prices resulted in a provisional pricing mark-to-market gain of $64 ($0.32 per pound). At
June 30, 2009, the Company had copper sales of 109 million pounds priced at an average of $2.25 per
pound, subject to final pricing over the next several months.
22
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
The average London P.M. fix was $922 per ounce during the three months ended June 30, 2009,
compared with the Companys recorded average provisional price of $920 per ounce before
mark-to-market gains and treatment and refining charges. The average London P.M. fix was $915 per
ounce during the six months ended June 30, 2009, compared with
the Companys recorded average provisional price of $923 per ounce before mark-to-market gains
and treatment and refining charges. The applicable forward gold price at the end of the quarter was
$927 per ounce. During the three months ended June 30, 2009, changes in gold prices resulted in a
provisional pricing mark-to-market gain of $nil. During the six months ended June 30, 2009, changes
in gold prices resulted in a provisional pricing mark-to-market gain of $1 ($nil per ounce). At
June 30, 2009, the Company had gold sales of 71,000 ounces priced at an average of $927 per ounce,
subject to final pricing over the next several months.
NOTE 17 INVESTMENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At June 30, 2009 |
|
|
|
Cost/Equity |
|
|
Unrealized |
|
|
Fair/Equity |
|
|
|
Basis |
|
|
Gain |
|
|
Loss |
|
|
Basis |
|
Current: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketable Equity Securities |
|
$ |
9 |
|
|
$ |
10 |
|
|
$ |
|
|
|
$ |
19 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketable Debt Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset backed securities |
|
|
27 |
|
|
|
|
|
|
|
(10 |
) |
|
|
17 |
|
Auction rate securities |
|
$ |
7 |
|
|
$ |
|
|
|
$ |
(3 |
) |
|
$ |
4 |
|
Other |
|
|
8 |
|
|
|
1 |
|
|
|
|
|
|
|
9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
42 |
|
|
|
1 |
|
|
|
(13 |
) |
|
|
30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketable Equity Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Canadian Oil Sands Trust |
|
|
266 |
|
|
|
477 |
|
|
|
|
|
|
|
743 |
|
Gabriel Resources Ltd. |
|
|
68 |
|
|
|
18 |
|
|
|
|
|
|
|
86 |
|
Shore Gold Inc. |
|
|
4 |
|
|
|
3 |
|
|
|
|
|
|
|
7 |
|
Other |
|
|
9 |
|
|
|
3 |
|
|
|
|
|
|
|
12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
347 |
|
|
|
501 |
|
|
|
|
|
|
|
848 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other investments, at cost |
|
|
7 |
|
|
|
|
|
|
|
|
|
|
|
7 |
|
Investment in Affiliates: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AGR Matthey Joint Venture |
|
|
17 |
|
|
|
|
|
|
|
|
|
|
|
17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
413 |
|
|
$ |
502 |
|
|
$ |
(13 |
) |
|
$ |
902 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2008 |
|
|
|
Cost/Equity |
|
|
Unrealized |
|
|
Fair/Equity |
|
|
|
Basis |
|
|
Gain |
|
|
Loss |
|
|
Basis |
|
Current: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketable Equity Securities |
|
$ |
14 |
|
|
$ |
1 |
|
|
$ |
(3 |
) |
|
$ |
12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketable Debt Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset backed securities |
|
$ |
25 |
|
|
$ |
|
|
|
$ |
(3 |
) |
|
$ |
22 |
|
Auction rate securities |
|
|
7 |
|
|
|
|
|
|
|
(2 |
) |
|
|
5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32 |
|
|
|
|
|
|
|
(5 |
) |
|
|
27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketable Equity Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Canadian Oil Sands Trust |
|
|
251 |
|
|
|
283 |
|
|
|
|
|
|
|
534 |
|
Gabriel Resources Ltd. |
|
|
64 |
|
|
|
|
|
|
|
|
|
|
|
64 |
|
Shore Gold Inc. |
|
|
6 |
|
|
|
|
|
|
|
|
|
|
|
6 |
|
Other |
|
|
8 |
|
|
|
|
|
|
|
(3 |
) |
|
|
5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
329 |
|
|
|
283 |
|
|
|
(3 |
) |
|
|
609 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other investments, at cost |
|
|
7 |
|
|
|
|
|
|
|
|
|
|
|
7 |
|
Investment in Affiliates: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AGR Matthey Joint Venture |
|
|
12 |
|
|
|
|
|
|
|
|
|
|
|
12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
380 |
|
|
$ |
283 |
|
|
$ |
(8 |
) |
|
$ |
655 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
During the second quarter of 2009, the Company did not recognize any impairments for
other-than temporary declines in value, resulting in total impairments for the first half of 2009
of $2 for Shore Gold Inc. and $4 for other marketable equity securities. During the second quarter
of 2008, the Company recognized impairments for other-than temporary declines in value of $23 for
Shore Gold Inc. and $11 for other marketable securities, resulting in total impairments of $32 for
Shore Gold Inc., $13 for Gabriel Resources Ltd. and $11 for other marketable securities for the
first half of 2008.
23
NEWMONT MINING CORPORATION
NOTES TO 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 |
|
|
|
|
|
|
|
Unrealized |
|
|
|
|
|
|
Unrealized |
|
|
|
|
|
|
Unrealized |
|
At June 30, 2009 |
|
Fair Value |
|
|
Losses |
|
|
Fair Value |
|
|
Losses |
|
|
Fair Value |
|
|
Losses |
|
|
Asset backed securities |
|
$ |
17 |
|
|
$ |
10 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
17 |
|
|
$ |
10 |
|
Auction rate securities |
|
|
|
|
|
|
|
|
|
|
4 |
|
|
|
3 |
|
|
|
4 |
|
|
|
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
17 |
|
|
$ |
10 |
|
|
$ |
4 |
|
|
$ |
3 |
|
|
$ |
21 |
|
|
$ |
13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less than 12 Months |
|
|
12 Months or Greater |
|
|
Total |
|
|
|
|
|
|
|
Unrealized |
|
|
|
|
|
|
Unrealized |
|
|
|
|
|
|
Unrealized |
|
At December 31, 2008 |
|
Fair Value |
|
|
Losses |
|
|
Fair Value |
|
|
Losses |
|
|
Fair Value |
|
|
Losses |
|
|
Marketable equity securities |
|
$ |
6 |
|
|
$ |
6 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
6 |
|
|
$ |
6 |
|
Asset backed securities |
|
|
22 |
|
|
|
3 |
|
|
|
|
|
|
|
|
|
|
|
22 |
|
|
|
3 |
|
Auction rate securities |
|
|
|
|
|
|
|
|
|
|
5 |
|
|
|
2 |
|
|
|
5 |
|
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
28 |
|
|
$ |
9 |
|
|
$ |
5 |
|
|
$ |
2 |
|
|
$ |
33 |
|
|
$ |
11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The unrealized loss of $13 and $11 at June 30, 2009 and December 31, 2008, respectively,
relate to the Companys investments in marketable equity securities, auction rate securities and
asset backed commercial paper as listed in the tables above. While the fair values of these
investments are below their respective cost, the Company views these declines as temporary.
Generally, the Companys policy is to treat a decline in a marketable equity securitys quoted
market value that has lasted continuously for more than six months as an other-than-temporary
decline in value. The fair values of these marketable equity securities have not been continuously
below cost for the past six months. 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 18 INVENTORIES
|
|
|
|
|
|
|
|
|
|
|
At June 30, |
|
|
At December 31, |
|
|
|
2009 |
|
|
2008 |
|
In-process |
|
$ |
69 |
|
|
$ |
53 |
|
Concentrate |
|
|
13 |
|
|
|
54 |
|
Precious metals |
|
|
22 |
|
|
|
20 |
|
Materials, supplies and other |
|
|
377 |
|
|
|
380 |
|
|
|
|
|
|
|
|
|
|
$ |
481 |
|
|
$ |
507 |
|
|
|
|
|
|
|
|
During the first half of 2009, the Company recorded write-downs of $4 to reduce the carrying
value of material and supplies inventories to net realizable value, primarily related to Nevada.
Inventory write-downs are classified as components of Costs applicable to sales.
NOTE 19 STOCKPILES AND ORE ON LEACH PADS
|
|
|
|
|
|
|
|
|
|
|
At June 30, |
|
|
At December 31, |
|
|
|
2009 |
|
|
2008 |
|
Current: |
|
|
|
|
|
|
|
|
Stockpiles |
|
$ |
148 |
|
|
$ |
117 |
|
Ore on leach pads |
|
|
170 |
|
|
|
173 |
|
|
|
|
|
|
|
|
|
|
$ |
318 |
|
|
$ |
290 |
|
|
|
|
|
|
|
|
|
Long-term: |
|
|
|
|
|
|
|
|
Stockpiles |
|
$ |
1,041 |
|
|
$ |
872 |
|
Ore on leach pads |
|
|
285 |
|
|
|
264 |
|
|
|
|
|
|
|
|
|
|
$ |
1,326 |
|
|
$ |
1,136 |
|
|
|
|
|
|
|
|
24
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
NOTE 20 OTHER ASSETS
|
|
|
|
|
|
|
|
|
|
|
At June 30, |
|
|
At December 31, |
|
|
|
2009 |
|
|
2008 |
|
Other current assets: |
|
|
|
|
|
|
|
|
Refinery metal inventory and receivable |
|
$ |
234 |
|
|
$ |
168 |
|
Other prepaid assets |
|
|
71 |
|
|
|
43 |
|
Derivative instruments (Note 16) |
|
|
34 |
|
|
|
6 |
|
Notes receivable |
|
|
10 |
|
|
|
8 |
|
Prepaid income and mining taxes |
|
|
8 |
|
|
|
187 |
|
Other |
|
|
38 |
|
|
|
43 |
|
|
|
|
|
|
|
|
|
|
$ |
395 |
|
|
$ |
455 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other long-term assets: |
|
|
|
|
|
|
|
|
Debt issuance costs |
|
$ |
37 |
|
|
$ |
29 |
|
Derivative instruments (Note 16) |
|
|
35 |
|
|
|
8 |
|
Restricted cash |
|
|
28 |
|
|
|
33 |
|
Prepaid royalties |
|
|
19 |
|
|
|
19 |
|
Corporate-owned life insurance |
|
|
16 |
|
|
|
26 |
|
Other receivables |
|
|
16 |
|
|
|
17 |
|
Prepaid maintenance costs |
|
|
6 |
|
|
|
13 |
|
Other |
|
|
61 |
|
|
|
62 |
|
|
|
|
|
|
|
|
|
|
$ |
218 |
|
|
$ |
207 |
|
|
|
|
|
|
|
|
NOTE 21 DEBT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At June 30, 2009 |
|
|
At December 31, 2008 |
|
|
|
Current |
|
|
Non-Current |
|
|
Current |
|
|
Non-Current |
|
Sale-leaseback of refractory ore treatment plant |
|
$ |
24 |
|
|
$ |
164 |
|
|
$ |
24 |
|
|
$ |
188 |
|
8 5/8% debentures, net of discount (due 2011) |
|
|
|
|
|
|
218 |
|
|
|
|
|
|
|
214 |
|
Corporate revolving credit facility (due 2012) |
|
|
|
|
|
|
100 |
|
|
|
|
|
|
|
757 |
|
2012 convertible senior notes |
|
|
|
|
|
|
452 |
|
|
|
|
|
|
|
|
|
2014 convertible senior notes |
|
|
|
|
|
|
458 |
|
|
|
|
|
|
|
448 |
|
2017 convertible senior notes |
|
|
|
|
|
|
409 |
|
|
|
|
|
|
|
401 |
|
5 7/8% notes, net of discount (due 2035) |
|
|
|
|
|
|
597 |
|
|
|
|
|
|
|
597 |
|
PTNNT project financing facility |
|
|
87 |
|
|
|
176 |
|
|
|
87 |
|
|
|
219 |
|
PTNNT shareholder loans |
|
|
72 |
|
|
|
|
|
|
|
18 |
|
|
|
|
|
Yanacocha credit facility |
|
|
14 |
|
|
|
55 |
|
|
|
14 |
|
|
|
62 |
|
Yanacocha bonds |
|
|
|
|
|
|
100 |
|
|
|
|
|
|
|
100 |
|
Ahafo project facility |
|
|
10 |
|
|
|
70 |
|
|
|
9 |
|
|
|
66 |
|
Other project financings and capital leases |
|
|
14 |
|
|
|
11 |
|
|
|
13 |
|
|
|
20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
221 |
|
|
$ |
2,810 |
|
|
$ |
165 |
|
|
$ |
3,072 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
During the first quarter of 2009, the Company repaid all borrowings under its $2,000 revolving
credit facility and completed a public offering of $518 convertible senior notes maturing on
February 15, 2012 for net proceeds of $504. The notes will pay interest semi-annually at a rate of
3.0% per annum and the effective interest rate is 8.5%. The notes are convertible, at the holders
option, equivalent to a conversion price of $46.25 per share of common stock. The portion of the
proceeds related to the conversion feature has been recognized as additional paid-in capital.
The Company retrospectively applied FSP APB 14-1 to the 2014 and 2017 convertible senior notes
(Note 2).
During the first quarter of 2009, PTNNT shareholders loaned an additional $124 to PTNNT. Total
principal outstanding under the shareholder loans was $165 and $41 as of June 30, 2009 and December
31, 2008, respectively. At June 30, 2009 and December 31, 2008, 43.75% or approximately $72 and
$18, respectively, were due to Nusa Tenggara Mining Corporation, an affiliate of Sumitomo Mining
Corporation, an unrelated third party, and was non-recourse to Newmont, with the remainder payable
to Newmont.
25
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
As discussed in Note 27, the Company has agreed to provide a joint and several guarantee for
the payment of principal and interest amounts associated with the PTNNT project financing facility,
which was non-recourse to Newmont at December 31, 2008.
During the second quarter of 2009, Newmont borrowed net proceeds of $100 under its $2,000
senior revolving credit facility.
Scheduled minimum debt repayments at June 30, 2009 are $134 for the remainder of 2009, $157 in
2010, $334 in 2011, $697 in 2012, $116 in 2013 and $1,593 thereafter.
NOTE 22 OTHER LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
At June 30, |
|
|
At December 31, |
|
|
|
2009 |
|
|
2008 |
|
Other current liabilities: |
|
|
|
|
|
|
|
|
Boddington acquisition costs (Note 14) |
|
$ |
299 |
|
|
$ |
|
|
Refinery metal payable |
|
|
234 |
|
|
|
168 |
|
Accrued capital expenditures |
|
|
200 |
|
|
|
107 |
|
Accrued operating costs |
|
|
129 |
|
|
|
137 |
|
Reclamation and remediation costs (Note 23) |
|
|
55 |
|
|
|
58 |
|
Royalties |
|
|
42 |
|
|
|
28 |
|
Interest |
|
|
41 |
|
|
|
35 |
|
Peruvian royalty |
|
|
11 |
|
|
|
18 |
|
Deferred income tax |
|
|
7 |
|
|
|
8 |
|
Derivative instruments (Note 16) |
|
|
5 |
|
|
|
111 |
|
Taxes other than income and mining |
|
|
5 |
|
|
|
39 |
|
Other |
|
|
43 |
|
|
|
61 |
|
|
|
|
|
|
|
|
|
|
$ |
1,071 |
|
|
$ |
770 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other long-term liabilities: |
|
|
|
|
|
|
|
|
Income and mining taxes |
|
$ |
173 |
|
|
$ |
167 |
|
Boddington contingent consideration |
|
|
62 |
|
|
|
|
|
Derivative instruments (Note 16) |
|
|
2 |
|
|
|
43 |
|
Other |
|
|
40 |
|
|
|
42 |
|
|
|
|
|
|
|
|
|
|
$ |
277 |
|
|
$ |
252 |
|
|
|
|
|
|
|
|
NOTE 23 RECLAMATION AND REMEDIATION LIABILITIES (ASSET RETIREMENT OBLIGATIONS)
At June 30, 2009 and December 31, 2008, $619 and $594, respectively, were accrued for
reclamation obligations relating to mineral properties in accordance with SFAS No. 143, Accounting
for Asset Retirement Obligations. 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 June 30, 2009 and December 31, 2008, $157 and $163, respectively, were accrued for
such obligations. These amounts are also included in Reclamation and remediation liabilities.
The following is a reconciliation of the liability for asset retirement obligations:
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
|
|
|
2009 |
|
|
2008 |
|
Balance at beginning of period |
|
$ |
758 |
|
|
$ |
672 |
|
Additions, changes in estimates and other |
|
|
2 |
|
|
|
59 |
|
Acquisition of liability |
|
|
15 |
|
|
|
|
|
Liabilities settled |
|
|
(22 |
) |
|
|
(31 |
) |
Accretion expense |
|
|
23 |
|
|
|
20 |
|
|
|
|
|
|
|
|
Balance at end of period |
|
$ |
776 |
|
|
$ |
720 |
|
|
|
|
|
|
|
|
The current portions of Reclamation and remediation liabilities of $55 and $58 at June 30,
2009 and December 31, 2008, respectively, are included in Other current liabilities.
26
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
The Companys reclamation and remediation expenses consisted of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
Asset retirement cost amortization |
|
$ |
7 |
|
|
$ |
5 |
|
|
$ |
14 |
|
|
$ |
11 |
|
Accretion operating |
|
|
8 |
|
|
|
8 |
|
|
|
17 |
|
|
|
16 |
|
Accretion non-operating (Note 4) |
|
|
3 |
|
|
|
3 |
|
|
|
6 |
|
|
|
5 |
|
Reclamation estimate revisions
non-operating (Note 4) |
|
|
|
|
|
|
59 |
|
|
|
|
|
|
|
61 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
18 |
|
|
$ |
75 |
|
|
$ |
37 |
|
|
$ |
93 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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:
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
|
|
|
2009 |
|
|
2008 |
|
Decrease (increase) in operating assets: |
|
|
|
|
|
|
|
|
Trade and accounts receivable |
|
$ |
68 |
|
|
$ |
(30 |
) |
Inventories, stockpiles and ore on leach pads |
|
|
(155 |
) |
|
|
(93 |
) |
EGR refinery assets |
|
|
(70 |
) |
|
|
(13 |
) |
Other assets |
|
|
5 |
|
|
|
(17 |
) |
(Decrease) increase in operating liabilities: |
|
|
|
|
|
|
|
|
Accounts payable and other accrued liabilities |
|
|
(73 |
) |
|
|
(88 |
) |
EGR refinery liabilities |
|
|
70 |
|
|
|
13 |
|
Reclamation liabilities (Note 23) |
|
|
(22 |
) |
|
|
(31 |
) |
|
|
|
|
|
|
|
|
|
$ |
(177 |
) |
|
$ |
(259 |
) |
|
|
|
|
|
|
|
27
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
NOTE 25 SEGMENT INFORMATION
The Companys reportable segments are based upon the Companys management organization
structure that is focused on the geographic region for the companys operations. Segment results
for 2008 have been retrospectively revised to reflect an organizational change, effective in the
first quarter of 2009, that (i) moved the results of the La Herradura operation in Mexico to North
America from Other and (ii) combined the management of exploration and advanced projects activities
under one executive and assigned the legacy exploration segment to the regional reportable
segments. As a result of managements decision to dispose of the Kori Kollo operation in Bolivia,
Kori Kollo has been reclassified to discontinued operations.
Financial information relating to Newmonts segments is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs |
|
|
|
|
|
|
Advanced |
|
|
|
|
|
|
|
|
|
|
Applicable to |
|
|
|
|
|
|
Projects and |
|
|
Pre-Tax |
|
Three Months Ended June, 2009 |
|
Sales |
|
|
Sales |
|
|
Amortization |
|
|
Exploration |
|
|
Income |
|
|
Nevada |
|
$ |
372 |
|
|
$ |
228 |
|
|
$ |
53 |
|
|
$ |
13 |
|
|
$ |
70 |
|
Hope Bay |
|
|
|
|
|
|
|
|
|
|
3 |
|
|
|
22 |
|
|
|
(23 |
) |
La Herradura |
|
|
29 |
|
|
|
12 |
|
|
|
3 |
|
|
|
1 |
|
|
|
11 |
|
Other North America |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America |
|
|
401 |
|
|
|
240 |
|
|
|
59 |
|
|
|
36 |
|
|
|
57 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yanacocha |
|
|
489 |
|
|
|
173 |
|
|
|
44 |
|
|
|
6 |
|
|
|
244 |
|
Other South America |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8 |
|
|
|
(7 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
South America |
|
|
489 |
|
|
|
173 |
|
|
|
44 |
|
|
|
14 |
|
|
|
237 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Boddington |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12 |
|
|
|
(69 |
) |
Other Australia/New Zealand |
|
|
263 |
|
|
|
141 |
|
|
|
30 |
|
|
|
6 |
|
|
|
89 |
|
Batu Hijau: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold |
|
|
98 |
|
|
|
24 |
|
|
|
6 |
|
|
|
|
|
|
|
|
|
Copper |
|
|
229 |
|
|
|
61 |
|
|
|
16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Batu Hijau |
|
|
327 |
|
|
|
85 |
|
|
|
22 |
|
|
|
|
|
|
|
204 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Asia Pacific |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3 |
|
|
|
(7 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia Pacific |
|
|
590 |
|
|
|
226 |
|
|
|
52 |
|
|
|
21 |
|
|
|
217 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Africa |
|
|
122 |
|
|
|
57 |
|
|
|
16 |
|
|
|
6 |
|
|
|
38 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and Other |
|
|
|
|
|
|
|
|
|
|
5 |
|
|
|
16 |
|
|
|
(90 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
$ |
1,602 |
|
|
$ |
696 |
|
|
$ |
176 |
|
|
$ |
93 |
|
|
$ |
459 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28
NEWMONT MINING CORPORATION
NOTES TO 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 |
|
Three Months Ended June 30, 2008 |
|
Sales |
|
|
Sales |
|
|
Amortization |
|
|
Exploration |
|
|
Income |
|
|
Nevada |
|
$ |
495 |
|
|
$ |
238 |
|
|
$ |
60 |
|
|
$ |
12 |
|
|
$ |
177 |
|
Hope Bay |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16 |
|
|
|
(17 |
) |
La Herradura |
|
|
21 |
|
|
|
11 |
|
|
|
2 |
|
|
|
1 |
|
|
|
8 |
|
Other North America |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8 |
|
|
|
(10 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America |
|
|
516 |
|
|
|
249 |
|
|
|
62 |
|
|
|
37 |
|
|
|
158 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yanacocha |
|
|
388 |
|
|
|
161 |
|
|
|
44 |
|
|
|
7 |
|
|
|
152 |
|
Other South America |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10 |
|
|
|
(9 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
South America |
|
|
388 |
|
|
|
161 |
|
|
|
44 |
|
|
|
17 |
|
|
|
143 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Boddington |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2 |
|
|
|
6 |
|
Other Australia/New Zealand |
|
|
272 |
|
|
|
170 |
|
|
|
31 |
|
|
|
7 |
|
|
|
58 |
|
Batu Hijau: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold |
|
|
36 |
|
|
|
19 |
|
|
|
3 |
|
|
|
|
|
|
|
|
|
Copper |
|
|
183 |
|
|
|
104 |
|
|
|
20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Batu Hijau |
|
|
219 |
|
|
|
123 |
|
|
|
23 |
|
|
|
|
|
|
|
54 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Asia Pacific |
|
|
|
|
|
|
|
|
|
|
1 |
|
|
|
4 |
|
|
|
(57 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia Pacific |
|
|
491 |
|
|
|
293 |
|
|
|
55 |
|
|
|
13 |
|
|
|
61 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Africa |
|
|
107 |
|
|
|
46 |
|
|
|
18 |
|
|
|
13 |
|
|
|
37 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and Other |
|
|
1 |
|
|
|
|
|
|
|
4 |
|
|
|
17 |
|
|
|
(104 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
$ |
1,503 |
|
|
$ |
749 |
|
|
$ |
183 |
|
|
$ |
97 |
|
|
$ |
295 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29
NEWMONT MINING CORPORATION
NOTES TO 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 |
|
|
Total |
|
|
Capital |
|
Six Months Ended June 30, 2009 |
|
Sales |
|
|
Sales |
|
|
Amortization |
|
|
Exploration |
|
|
Income |
|
|
Assets(1) |
|
|
Expenditures(2) |
|
|
Nevada |
|
$ |
840 |
|
|
$ |
491 |
|
|
$ |
114 |
|
|
$ |
27 |
|
|
$ |
191 |
|
|
$ |
3,232 |
|
|
$ |
111 |
|
Hope Bay |
|
|
|
|
|
|
|
|
|
|
6 |
|
|
|
36 |
|
|
|
(40 |
) |
|
|
1,706 |
|
|
|
3 |
|
La Herradura |
|
|
52 |
|
|
|
22 |
|
|
|
5 |
|
|
|
1 |
|
|
|
24 |
|
|
|
106 |
|
|
|
19 |
|
Other North America |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 |
|
|
|
(4 |
) |
|
|
52 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America |
|
|
892 |
|
|
|
513 |
|
|
|
125 |
|
|
|
65 |
|
|
|
171 |
|
|
|
5,096 |
|
|
|
133 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yanacocha |
|
|
916 |
|
|
|
325 |
|
|
|
85 |
|
|
|
10 |
|
|
|
448 |
|
|
|
1,918 |
|
|
|
62 |
|
Other South America |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14 |
|
|
|
(11 |
) |
|
|
29 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
South America |
|
|
916 |
|
|
|
325 |
|
|
|
85 |
|
|
|
24 |
|
|
|
437 |
|
|
|
1,947 |
|
|
|
62 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Boddington |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17 |
|
|
|
(76 |
) |
|
|
3,490 |
|
|
|
684 |
|
Other Australia/New Zealand |
|
|
532 |
|
|
|
286 |
|
|
|
62 |
|
|
|
12 |
|
|
|
166 |
|
|
|
837 |
|
|
|
47 |
|
Batu Hijau: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold |
|
|
157 |
|
|
|
51 |
|
|
|
13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Copper |
|
|
390 |
|
|
|
146 |
|
|
|
37 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Batu Hijau |
|
|
547 |
|
|
|
197 |
|
|
|
50 |
|
|
|
|
|
|
|
268 |
|
|
|
2,604 |
|
|
|
23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Asia Pacific |
|
|
|
|
|
|
|
|
|
|
1 |
|
|
|
5 |
|
|
|
(15 |
) |
|
|
142 |
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia Pacific |
|
|
1,079 |
|
|
|
483 |
|
|
|
113 |
|
|
|
34 |
|
|
|
343 |
|
|
|
7,073 |
|
|
|
755 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Africa |
|
|
251 |
|
|
|
114 |
|
|
|
34 |
|
|
|
12 |
|
|
|
84 |
|
|
|
1,167 |
|
|
|
24 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and Other
(1) |
|
|
|
|
|
|
|
|
|
|
10 |
|
|
|
30 |
|
|
|
(189 |
) |
|
|
2,828 |
|
|
|
8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
$ |
3,138 |
|
|
$ |
1,435 |
|
|
$ |
367 |
|
|
$ |
165 |
|
|
$ |
846 |
|
|
$ |
18,111 |
|
|
$ |
982 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Corporate and Other includes $69 of Assets held for sale (Note 9). |
|
(2) |
|
Accrual basis includes increase in accrued capital of $72. Consolidated capital
expenditures on a cash basis are $910. |
30
NEWMONT MINING CORPORATION
NOTES TO 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 |
|
|
Total |
|
|
Capital |
|
Six Months Ended June 30, 2008 |
|
Sales |
|
|
Sales |
|
|
Amortization |
|
|
Exploration |
|
|
Income |
|
|
Assets(1) |
|
|
Expenditures(2) |
|
|
Nevada |
|
$ |
986 |
|
|
$ |
453 |
|
|
$ |
110 |
|
|
$ |
22 |
|
|
$ |
386 |
|
|
$ |
3,220 |
|
|
$ |
140 |
|
Hope Bay |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22 |
|
|
|
(22 |
) |
|
|
1,877 |
|
|
|
30 |
|
La Herradura |
|
|
45 |
|
|
|
18 |
|
|
|
4 |
|
|
|
2 |
|
|
|
21 |
|
|
|
84 |
|
|
|
12 |
|
Other North America |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15 |
|
|
|
(18 |
) |
|
|
203 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America |
|
|
1,031 |
|
|
|
471 |
|
|
|
114 |
|
|
|
61 |
|
|
|
367 |
|
|
|
5,384 |
|
|
|
182 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yanacocha |
|
|
887 |
|
|
|
329 |
|
|
|
88 |
|
|
|
13 |
|
|
|
414 |
|
|
|
2,132 |
|
|
|
81 |
|
Other South America |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17 |
|
|
|
(16 |
) |
|
|
17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
South America |
|
|
887 |
|
|
|
329 |
|
|
|
88 |
|
|
|
30 |
|
|
|
398 |
|
|
|
2,149 |
|
|
|
81 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Boddington |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5 |
|
|
|
(1 |
) |
|
|
1,371 |
|
|
|
392 |
|
Other Australia/New Zealand |
|
|
542 |
|
|
|
326 |
|
|
|
56 |
|
|
|
12 |
|
|
|
137 |
|
|
|
845 |
|
|
|
64 |
|
Batu Hijau: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold |
|
|
148 |
|
|
|
56 |
|
|
|
11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Copper |
|
|
615 |
|
|
|
254 |
|
|
|
51 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Batu Hijau |
|
|
763 |
|
|
|
310 |
|
|
|
62 |
|
|
|
|
|
|
|
358 |
|
|
|
2,337 |
|
|
|
54 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Asia Pacific |
|
|
|
|
|
|
|
|
|
|
2 |
|
|
|
7 |
|
|
|
(63 |
) |
|
|
184 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia Pacific |
|
|
1,305 |
|
|
|
636 |
|
|
|
120 |
|
|
|
24 |
|
|
|
431 |
|
|
|
4,737 |
|
|
|
510 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Africa |
|
|
204 |
|
|
|
95 |
|
|
|
31 |
|
|
|
21 |
|
|
|
61 |
|
|
|
1,146 |
|
|
|
61 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and Other
(1) |
|
|
1 |
|
|
|
|
|
|
|
9 |
|
|
|
30 |
|
|
|
(179 |
) |
|
|
3,709 |
|
|
|
6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
$ |
3,428 |
|
|
$ |
1,531 |
|
|
$ |
362 |
|
|
$ |
166 |
|
|
$ |
1,078 |
|
|
$ |
17,125 |
|
|
$ |
840 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Corporate and Other includes $100 of Assets held for sale. |
|
(2) |
|
Accrual basis includes decrease in accrued capital of $53. Consolidated capital
expenditures on a cash basis are $893. |
|
|
|
|
|
|
|
|
|
|
|
At June 30, |
|
|
At December 31, |
|
|
|
2009 |
|
|
2008 |
|
Goodwill: |
|
|
|
|
|
|
|
|
Other Australia/New Zealand |
|
$ |
188 |
|
|
$ |
188 |
|
31
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
NOTE 26 CONSOLIDATING FINANCIAL STATEMENTS
Newmont USA, a 100% owned subsidiary of Newmont Mining Corporation, has fully and
unconditionally guaranteed the 5 7/8% publicly traded notes. The following consolidating financial
statements are provided for Newmont USA, as guarantor, and for Newmont Mining Corporation, as
issuer, as an alternative to providing separate financial statements for the guarantor. The
accounts of Newmont Mining Corporation are presented using the equity method of accounting for
investments in subsidiaries.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Newmont |
|
|
|
Newmont |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mining |
|
|
|
Mining |
|
|
Newmont |
|
|
Other |
|
|
|
|
|
|
Corporation |
|
Consolidating Statement of Income |
|
Corporation |
|
|
USA |
|
|
Subsidiaries |
|
|
Eliminations |
|
|
Consolidated |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales gold, net |
|
$ |
|
|
|
$ |
988 |
|
|
$ |
385 |
|
|
$ |
|
|
|
$ |
1,373 |
|
Sales copper, net |
|
|
|
|
|
|
229 |
|
|
|
|
|
|
|
|
|
|
|
229 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,217 |
|
|
|
385 |
|
|
|
|
|
|
|
1,602 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs applicable to sales gold (1) |
|
|
|
|
|
|
438 |
|
|
|
203 |
|
|
|
(6 |
) |
|
|
635 |
|
Costs applicable to sales copper (1) |
|
|
|
|
|
|
61 |
|
|
|
|
|
|
|
|
|
|
|
61 |
|
Amortization |
|
|
|
|
|
|
125 |
|
|
|
51 |
|
|
|
|
|
|
|
176 |
|
Accretion |
|
|
|
|
|
|
6 |
|
|
|
2 |
|
|
|
|
|
|
|
8 |
|
Exploration |
|
|
|
|
|
|
26 |
|
|
|
25 |
|
|
|
|
|
|
|
51 |
|
Advanced projects, research and development |
|
|
|
|
|
|
17 |
|
|
|
26 |
|
|
|
(1 |
) |
|
|
42 |
|
General and administrative |
|
|
|
|
|
|
33 |
|
|
|
|
|
|
|
7 |
|
|
|
40 |
|
Other |
|
|
8 |
|
|
|
28 |
|
|
|
80 |
|
|
|
|
|
|
|
116 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8 |
|
|
|
734 |
|
|
|
387 |
|
|
|
|
|
|
|
1,129 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income, net |
|
|
(6 |
) |
|
|
(6 |
) |
|
|
21 |
|
|
|
|
|
|
|
9 |
|
Interest income intercompany |
|
|
28 |
|
|
|
2 |
|
|
|
1 |
|
|
|
(31 |
) |
|
|
|
|
Interest expense intercompany |
|
|
(3 |
) |
|
|
|
|
|
|
(28 |
) |
|
|
31 |
|
|
|
|
|
Interest expense, net |
|
|
(9 |
) |
|
|
(12 |
) |
|
|
(2 |
) |
|
|
|
|
|
|
(23 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10 |
|
|
|
(16 |
) |
|
|
(8 |
) |
|
|
|
|
|
|
(14 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations before income
tax expense and other items |
|
|
2 |
|
|
|
467 |
|
|
|
(10 |
) |
|
|
|
|
|
|
459 |
|
Income tax expense |
|
|
(3 |
) |
|
|
(160 |
) |
|
|
27 |
|
|
|
|
|
|
|
(136 |
) |
Equity income (loss) of affiliates |
|
|
177 |
|
|
|
2 |
|
|
|
28 |
|
|
|
(210 |
) |
|
|
(3 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations |
|
|
176 |
|
|
|
309 |
|
|
|
45 |
|
|
|
(210 |
) |
|
|
320 |
|
Income (loss) from discontinued operations |
|
|
(14 |
) |
|
|
(14 |
) |
|
|
|
|
|
|
14 |
|
|
|
(14 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
|
162 |
|
|
|
295 |
|
|
|
45 |
|
|
|
(196 |
) |
|
|
306 |
|
Less: Net income (loss) attributable to
noncontrolling interests |
|
|
|
|
|
|
144 |
|
|
|
15 |
|
|
|
(15 |
) |
|
|
144 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to Newmont stockholders |
|
$ |
162 |
|
|
$ |
151 |
|
|
$ |
30 |
|
|
$ |
(181 |
) |
|
$ |
162 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Exclusive of Amortization and Accretion. |
32
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2008 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Newmont |
|
|
|
Newmont |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mining |
|
|
|
Mining |
|
|
Newmont |
|
|
Other |
|
|
|
|
|
|
Corporation |
|
Consolidating Statement of Income |
|
Corporation |
|
|
USA |
|
|
Subsidiaries |
|
|
Eliminations |
|
|
Consolidated |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales gold, net |
|
$ |
|
|
|
$ |
941 |
|
|
$ |
379 |
|
|
$ |
|
|
|
$ |
1,320 |
|
Sales copper, net |
|
|
|
|
|
|
183 |
|
|
|
|
|
|
|
|
|
|
|
183 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,124 |
|
|
|
379 |
|
|
|
|
|
|
|
1,503 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs applicable to sales gold (1) |
|
|
|
|
|
|
429 |
|
|
|
222 |
|
|
|
(6 |
) |
|
|
645 |
|
Costs applicable to sales copper (1) |
|
|
|
|
|
|
104 |
|
|
|
|
|
|
|
|
|
|
|
104 |
|
Amortization |
|
|
|
|
|
|
135 |
|
|
|
49 |
|
|
|
(1 |
) |
|
|
183 |
|
Accretion |
|
|
|
|
|
|
6 |
|
|
|
2 |
|
|
|
|
|
|
|
8 |
|
Exploration |
|
|
|
|
|
|
33 |
|
|
|
25 |
|
|
|
|
|
|
|
58 |
|
Advanced projects, research and development |
|
|
|
|
|
|
13 |
|
|
|
26 |
|
|
|
|
|
|
|
39 |
|
General and administrative |
|
|
|
|
|
|
30 |
|
|
|
1 |
|
|
|
6 |
|
|
|
37 |
|
Other |
|
|
|
|
|
|
63 |
|
|
|
54 |
|
|
|
1 |
|
|
|
118 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
813 |
|
|
|
379 |
|
|
|
|
|
|
|
1,192 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income, net |
|
|
4 |
|
|
|
5 |
|
|
|
10 |
|
|
|
|
|
|
|
19 |
|
Interest income intercompany |
|
|
76 |
|
|
|
3 |
|
|
|
|
|
|
|
(79 |
) |
|
|
|
|
Interest expense intercompany |
|
|
(2 |
) |
|
|
|
|
|
|
(77 |
) |
|
|
79 |
|
|
|
|
|
Interest expense, net |
|
|
(18 |
) |
|
|
(15 |
) |
|
|
(2 |
) |
|
|
|
|
|
|
(35 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60 |
|
|
|
(7 |
) |
|
|
(69 |
) |
|
|
|
|
|
|
(16 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations before income
tax expense and other items |
|
|
60 |
|
|
|
304 |
|
|
|
(69 |
) |
|
|
|
|
|
|
295 |
|
Income tax (expense) benefit |
|
|
(46 |
) |
|
|
70 |
|
|
|
18 |
|
|
|
|
|
|
|
42 |
|
Equity income (loss) of affiliates |
|
|
255 |
|
|
|
|
|
|
|
33 |
|
|
|
(288 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations |
|
|
269 |
|
|
|
374 |
|
|
|
(18 |
) |
|
|
(288 |
) |
|
|
337 |
|
Income (loss) from discontinued operations |
|
|
2 |
|
|
|
4 |
|
|
|
(1 |
) |
|
|
(3 |
) |
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
|
271 |
|
|
|
378 |
|
|
|
(19 |
) |
|
|
(291 |
) |
|
|
339 |
|
Less: Net income (loss) attributable to
noncontrolling interests |
|
|
|
|
|
|
75 |
|
|
|
(7 |
) |
|
|
|
|
|
|
68 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to Newmont stockholders |
|
$ |
271 |
|
|
$ |
303 |
|
|
$ |
(12 |
) |
|
$ |
(291 |
) |
|
$ |
271 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Exclusive of Amortization and Accretion. |
33
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Newmont |
|
|
|
Newmont |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mining |
|
|
|
Mining |
|
|
Newmont |
|
|
Other |
|
|
|
|
|
|
Corporation |
|
Consolidating Statement of Income |
|
Corporation |
|
|
USA |
|
|
Subsidiaries |
|
|
Eliminations |
|
|
Consolidated |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales gold, net |
|
$ |
|
|
|
$ |
1,965 |
|
|
$ |
783 |
|
|
$ |
|
|
|
$ |
2,748 |
|
Sales copper, net |
|
|
|
|
|
|
390 |
|
|
|
|
|
|
|
|
|
|
|
390 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,355 |
|
|
|
783 |
|
|
|
|
|
|
|
3,138 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs applicable to sales gold (1) |
|
|
|
|
|
|
890 |
|
|
|
411 |
|
|
|
(12 |
) |
|
|
1,289 |
|
Costs applicable to sales copper (1) |
|
|
|
|
|
|
146 |
|
|
|
|
|
|
|
|
|
|
|
146 |
|
Amortization |
|
|
|
|
|
|
262 |
|
|
|
105 |
|
|
|
|
|
|
|
367 |
|
Accretion |
|
|
|
|
|
|
13 |
|
|
|
4 |
|
|
|
|
|
|
|
17 |
|
Exploration |
|
|
|
|
|
|
48 |
|
|
|
44 |
|
|
|
|
|
|
|
92 |
|
Advanced projects, research and development |
|
|
|
|
|
|
35 |
|
|
|
40 |
|
|
|
(2 |
) |
|
|
73 |
|
General and administrative |
|
|
|
|
|
|
63 |
|
|
|
2 |
|
|
|
14 |
|
|
|
79 |
|
Other |
|
|
8 |
|
|
|
88 |
|
|
|
96 |
|
|
|
|
|
|
|
192 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8 |
|
|
|
1,545 |
|
|
|
702 |
|
|
|
|
|
|
|
2,255 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income, net |
|
|
(10 |
) |
|
|
|
|
|
|
28 |
|
|
|
|
|
|
|
18 |
|
Interest income intercompany |
|
|
60 |
|
|
|
4 |
|
|
|
1 |
|
|
|
(65 |
) |
|
|
|
|
Interest expense intercompany |
|
|
(5 |
) |
|
|
|
|
|
|
(60 |
) |
|
|
65 |
|
|
|
|
|
Interest expense, net |
|
|
(27 |
) |
|
|
(25 |
) |
|
|
(3 |
) |
|
|
|
|
|
|
(55 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18 |
|
|
|
(21 |
) |
|
|
(34 |
) |
|
|
|
|
|
|
(37 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations before income
tax expense and other items |
|
|
10 |
|
|
|
789 |
|
|
|
47 |
|
|
|
|
|
|
|
846 |
|
Income tax expense |
|
|
(13 |
) |
|
|
(243 |
) |
|
|
15 |
|
|
|
|
|
|
|
(241 |
) |
Equity income (loss) of affiliates |
|
|
368 |
|
|
|
3 |
|
|
|
54 |
|
|
|
(433 |
) |
|
|
(8 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations |
|
|
365 |
|
|
|
549 |
|
|
|
116 |
|
|
|
(433 |
) |
|
|
597 |
|
Income (loss) from discontinued operations |
|
|
(14 |
) |
|
|
(14 |
) |
|
|
|
|
|
|
14 |
|
|
|
(14 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
|
351 |
|
|
|
535 |
|
|
|
116 |
|
|
|
(419 |
) |
|
|
583 |
|
Less: Net income (loss) attributable to
noncontrolling interests |
|
|
|
|
|
|
234 |
|
|
|
28 |
|
|
|
(30 |
) |
|
|
232 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to Newmont stockholders |
|
$ |
351 |
|
|
$ |
301 |
|
|
$ |
88 |
|
|
$ |
(389 |
) |
|
$ |
351 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Exclusive of Amortization and Accretion. |
34
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2008 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Newmont |
|
|
|
Newmont |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mining |
|
|
|
Mining |
|
|
Newmont |
|
|
Other |
|
|
|
|
|
|
Corporation |
|
Consolidating Statement of Income |
|
Corporation |
|
|
USA |
|
|
Subsidiaries |
|
|
Eliminations |
|
|
Consolidated |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales gold, net |
|
$ |
|
|
|
$ |
2,067 |
|
|
$ |
746 |
|
|
$ |
|
|
|
$ |
2,813 |
|
Sales copper, net |
|
|
|
|
|
|
615 |
|
|
|
|
|
|
|
|
|
|
|
615 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,682 |
|
|
|
746 |
|
|
|
|
|
|
|
3,428 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs applicable to sales gold (1) |
|
|
|
|
|
|
857 |
|
|
|
430 |
|
|
|
(10 |
) |
|
|
1,277 |
|
Costs applicable to sales copper (1) |
|
|
|
|
|
|
254 |
|
|
|
|
|
|
|
|
|
|
|
254 |
|
Amortization |
|
|
|
|
|
|
274 |
|
|
|
89 |
|
|
|
(1 |
) |
|
|
362 |
|
Accretion |
|
|
|
|
|
|
12 |
|
|
|
4 |
|
|
|
|
|
|
|
16 |
|
Exploration |
|
|
|
|
|
|
59 |
|
|
|
38 |
|
|
|
|
|
|
|
97 |
|
Advanced projects, research and development |
|
|
|
|
|
|
24 |
|
|
|
45 |
|
|
|
|
|
|
|
69 |
|
General and administrative |
|
|
|
|
|
|
53 |
|
|
|
2 |
|
|
|
11 |
|
|
|
66 |
|
Other |
|
|
|
|
|
|
114 |
|
|
|
66 |
|
|
|
|
|
|
|
180 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,647 |
|
|
|
674 |
|
|
|
|
|
|
|
2,321 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income, net |
|
|
(9 |
) |
|
|
53 |
|
|
|
(10 |
) |
|
|
|
|
|
|
34 |
|
Interest income intercompany |
|
|
145 |
|
|
|
20 |
|
|
|
|
|
|
|
(165 |
) |
|
|
|
|
Interest expense intercompany |
|
|
(4 |
) |
|
|
|
|
|
|
(161 |
) |
|
|
165 |
|
|
|
|
|
Interest expense, net |
|
|
(36 |
) |
|
|
(22 |
) |
|
|
(5 |
) |
|
|
|
|
|
|
(63 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
96 |
|
|
|
51 |
|
|
|
(176 |
) |
|
|
|
|
|
|
(29 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations before income
tax expense and other items |
|
|
96 |
|
|
|
1,086 |
|
|
|
(104 |
) |
|
|
|
|
|
|
1,078 |
|
Income tax (expense) benefit |
|
|
(64 |
) |
|
|
(157 |
) |
|
|
34 |
|
|
|
|
|
|
|
(187 |
) |
Equity income (loss) of affiliates |
|
|
594 |
|
|
|
1 |
|
|
|
72 |
|
|
|
(672 |
) |
|
|
(5 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations |
|
|
626 |
|
|
|
930 |
|
|
|
2 |
|
|
|
(672 |
) |
|
|
886 |
|
Income (loss) from discontinued operations |
|
|
10 |
|
|
|
7 |
|
|
|
3 |
|
|
|
(10 |
) |
|
|
10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
|
636 |
|
|
|
937 |
|
|
|
5 |
|
|
|
(682 |
) |
|
|
896 |
|
Less: Net income (loss) attributable to
noncontrolling interests |
|
|
|
|
|
|
271 |
|
|
|
(8 |
) |
|
|
(3 |
) |
|
|
260 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to Newmont stockholders |
|
$ |
636 |
|
|
$ |
666 |
|
|
$ |
13 |
|
|
$ |
(679 |
) |
|
$ |
636 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Exclusive of Amortization and Accretion. |
35
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At June 30, 2009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Newmont |
|
|
|
Newmont |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mining |
|
|
|
Mining |
|
|
Newmont |
|
|
Other |
|
|
|
|
|
|
Corporation |
|
Consolidating Balance Sheets |
|
Corporation |
|
|
USA |
|
|
Subsidiaries |
|
|
Eliminations |
|
|
Consolidated |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
|
|
|
$ |
385 |
|
|
$ |
159 |
|
|
$ |
|
|
|
$ |
544 |
|
Marketable securities and other short-term investments |
|
|
|
|
|
|
1 |
|
|
|
18 |
|
|
|
|
|
|
|
19 |
|
Trade receivables |
|
|
|
|
|
|
211 |
|
|
|
18 |
|
|
|
|
|
|
|
229 |
|
Accounts receivable |
|
|
2,262 |
|
|
|
1,120 |
|
|
|
346 |
|
|
|
(3,445 |
) |
|
|
283 |
|
Inventories |
|
|
|
|
|
|
346 |
|
|
|
135 |
|
|
|
|
|
|
|
481 |
|
Stockpiles and ore on leach pads |
|
|
|
|
|
|
241 |
|
|
|
77 |
|
|
|
|
|
|
|
318 |
|
Deferred income tax assets |
|
|
|
|
|
|
154 |
|
|
|
34 |
|
|
|
|
|
|
|
188 |
|
Other current assets |
|
|
1 |
|
|
|
91 |
|
|
|
303 |
|
|
|
|
|
|
|
395 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets |
|
|
2,263 |
|
|
|
2,549 |
|
|
|
1,090 |
|
|
|
(3,445 |
) |
|
|
2,457 |
|
Property, plant and mine development, net |
|
|
|
|
|
|
5,256 |
|
|
|
6,587 |
|
|
|
(18 |
) |
|
|
11,825 |
|
Investments |
|
|
|
|
|
|
23 |
|
|
|
879 |
|
|
|
|
|
|
|
902 |
|
Investments in subsidiaries |
|
|
8,091 |
|
|
|
31 |
|
|
|
921 |
|
|
|
(9,043 |
) |
|
|
|
|
Long-term stockpiles and ore on leach pads |
|
|
|
|
|
|
1,206 |
|
|
|
120 |
|
|
|
|
|
|
|
1,326 |
|
Deferred income tax assets |
|
|
43 |
|
|
|
866 |
|
|
|
217 |
|
|
|
|
|
|
|
1,126 |
|
Other long-term assets |
|
|
1,802 |
|
|
|
294 |
|
|
|
197 |
|
|
|
(2,075 |
) |
|
|
218 |
|
Goodwill |
|
|
|
|
|
|
|
|
|
|
188 |
|
|
|
|
|
|
|
188 |
|
Assets of operations held for sale |
|
|
|
|
|
|
69 |
|
|
|
|
|
|
|
|
|
|
|
69 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
12,199 |
|
|
$ |
10,294 |
|
|
$ |
10,199 |
|
|
$ |
(14,581 |
) |
|
$ |
18,111 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current portion of long-term debt |
|
$ |
|
|
|
$ |
211 |
|
|
$ |
10 |
|
|
$ |
|
|
|
$ |
221 |
|
Accounts payable |
|
|
656 |
|
|
|
430 |
|
|
|
2,661 |
|
|
|
(3,437 |
) |
|
|
310 |
|
Employee related benefits |
|
|
|
|
|
|
126 |
|
|
|
36 |
|
|
|
|
|
|
|
162 |
|
Income and mining taxes |
|
|
9 |
|
|
|
77 |
|
|
|
4 |
|
|
|
|
|
|
|
90 |
|
Other current liabilities |
|
|
23 |
|
|
|
211 |
|
|
|
2,808 |
|
|
|
(1,971 |
) |
|
|
1,071 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
688 |
|
|
|
1,055 |
|
|
|
5,519 |
|
|
|
(5,408 |
) |
|
|
1,854 |
|
Long-term debt |
|
|
2,016 |
|
|
|
724 |
|
|
|
70 |
|
|
|
|
|
|
|
2,810 |
|
Reclamation and remediation liabilities |
|
|
1 |
|
|
|
507 |
|
|
|
213 |
|
|
|
|
|
|
|
721 |
|
Deferred income tax liabilities |
|
|
119 |
|
|
|
359 |
|
|
|
759 |
|
|
|
|
|
|
|
1,237 |
|
Employee-related benefits |
|
|
4 |
|
|
|
352 |
|
|
|
48 |
|
|
|
|
|
|
|
404 |
|
Other long-term liabilities |
|
|
310 |
|
|
|
186 |
|
|
|
1,874 |
|
|
|
(2,093 |
) |
|
|
277 |
|
Liabilities of operations held for sale |
|
|
|
|
|
|
54 |
|
|
|
|
|
|
|
|
|
|
|
54 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
3,138 |
|
|
|
3,237 |
|
|
|
8,483 |
|
|
|
(7,501 |
) |
|
|
7,357 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock |
|
|
|
|
|
|
|
|
|
|
61 |
|
|
|
(61 |
) |
|
|
|
|
Common stock |
|
|
768 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
768 |
|
Additional paid-in capital |
|
|
7,850 |
|
|
|
2,649 |
|
|
|
3,400 |
|
|
|
(5,847 |
) |
|
|
8,052 |
|
Accumulated other comprehensive (loss) income |
|
|
141 |
|
|
|
(153 |
) |
|
|
285 |
|
|
|
(132 |
) |
|
|
141 |
|
Retained earnings (deficit) |
|
|
302 |
|
|
|
3,009 |
|
|
|
(2,293 |
) |
|
|
(716 |
) |
|
|
302 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Newmont stockholders equity |
|
|
9,061 |
|
|
|
5,505 |
|
|
|
1,453 |
|
|
|
(6,756 |
) |
|
|
9,263 |
|
Noncontrolling interests |
|
|
|
|
|
|
1,552 |
|
|
|
263 |
|
|
|
(324 |
) |
|
|
1,491 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders equity |
|
|
9,061 |
|
|
|
7,057 |
|
|
|
1,716 |
|
|
|
(7,080 |
) |
|
|
10,754 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders equity |
|
$ |
12,199 |
|
|
$ |
10,294 |
|
|
$ |
10,199 |
|
|
$ |
(14,581 |
) |
|
$ |
18,111 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2008 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Newmont |
|
|
|
Newmont |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mining |
|
|
|
Mining |
|
|
Newmont |
|
|
Other |
|
|
|
|
|
|
Corporation |
|
Consolidating Balance Sheets |
|
Corporation |
|
|
USA |
|
|
Subsidiaries |
|
|
Eliminations |
|
|
Consolidated |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
|
|
|
$ |
310 |
|
|
$ |
125 |
|
|
$ |
|
|
|
$ |
435 |
|
Marketable securities and other short-term investments |
|
|
|
|
|
|
1 |
|
|
|
11 |
|
|
|
|
|
|
|
12 |
|
Trade receivables |
|
|
|
|
|
|
97 |
|
|
|
7 |
|
|
|
|
|
|
|
104 |
|
Accounts receivable |
|
|
1,941 |
|
|
|
904 |
|
|
|
370 |
|
|
|
(3,001 |
) |
|
|
214 |
|
Inventories |
|
|
|
|
|
|
395 |
|
|
|
112 |
|
|
|
|
|
|
|
507 |
|
Stockpiles and ore on leach pads |
|
|
|
|
|
|
242 |
|
|
|
48 |
|
|
|
|
|
|
|
290 |
|
Deferred income tax assets |
|
|
|
|
|
|
236 |
|
|
|
48 |
|
|
|
|
|
|
|
284 |
|
Other current assets |
|
|
1 |
|
|
|
220 |
|
|
|
234 |
|
|
|
|
|
|
|
455 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets |
|
|
1,942 |
|
|
|
2,405 |
|
|
|
955 |
|
|
|
(3,001 |
) |
|
|
2,301 |
|
Property, plant and mine development, net |
|
|
|
|
|
|
5,325 |
|
|
|
4,822 |
|
|
|
(19 |
) |
|
|
10,128 |
|
Investments |
|
|
|
|
|
|
11 |
|
|
|
644 |
|
|
|
|
|
|
|
655 |
|
Investments in subsidiaries |
|
|
6,247 |
|
|
|
25 |
|
|
|
828 |
|
|
|
(7,100 |
) |
|
|
|
|
Long-term stockpiles and ore on leach pads |
|
|
|
|
|
|
1,031 |
|
|
|
105 |
|
|
|
|
|
|
|
1,136 |
|
Deferred income tax assets |
|
|
(45 |
) |
|
|
873 |
|
|
|
211 |
|
|
|
|
|
|
|
1,039 |
|
Other long-term assets |
|
|
1,977 |
|
|
|
320 |
|
|
|
153 |
|
|
|
(2,243 |
) |
|
|
207 |
|
Goodwill |
|
|
|
|
|
|
|
|
|
|
188 |
|
|
|
|
|
|
|
188 |
|
Assets of operations held for sale |
|
|
|
|
|
|
73 |
|
|
|
|
|
|
|
|
|
|
|
73 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
10,121 |
|
|
$ |
10,063 |
|
|
$ |
7,906 |
|
|
$ |
(12,363 |
) |
|
$ |
15,727 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current portion of long-term debt |
|
$ |
|
|
|
$ |
156 |
|
|
$ |
9 |
|
|
$ |
|
|
|
$ |
165 |
|
Accounts payable |
|
|
524 |
|
|
|
586 |
|
|
|
2,292 |
|
|
|
(2,991 |
) |
|
|
411 |
|
Employee-related benefits |
|
|
|
|
|
|
139 |
|
|
|
31 |
|
|
|
|
|
|
|
170 |
|
Income and mining taxes |
|
|
21 |
|
|
|
39 |
|
|
|
1 |
|
|
|
|
|
|
|
61 |
|
Other current liabilities |
|
|
15 |
|
|
|
303 |
|
|
|
461 |
|
|
|
(9 |
) |
|
|
770 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
560 |
|
|
|
1,223 |
|
|
|
2,794 |
|
|
|
(3,000 |
) |
|
|
1,577 |
|
Long-term debt |
|
|
2,203 |
|
|
|
802 |
|
|
|
67 |
|
|
|
|
|
|
|
3,072 |
|
Reclamation and remediation liabilities |
|
|
1 |
|
|
|
502 |
|
|
|
196 |
|
|
|
|
|
|
|
699 |
|
Deferred income tax liabilities |
|
|
|
|
|
|
364 |
|
|
|
687 |
|
|
|
|
|
|
|
1,051 |
|
Employee-related benefits |
|
|
3 |
|
|
|
341 |
|
|
|
35 |
|
|
|
|
|
|
|
379 |
|
Other long-term liabilities |
|
|
283 |
|
|
|
182 |
|
|
|
2,049 |
|
|
|
(2,262 |
) |
|
|
252 |
|
Liabilities of operations held for sale |
|
|
|
|
|
|
36 |
|
|
|
|
|
|
|
|
|
|
|
36 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
3,050 |
|
|
|
3,450 |
|
|
|
5,828 |
|
|
|
(5,262 |
) |
|
|
7,066 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock |
|
|
|
|
|
|
|
|
|
|
61 |
|
|
|
(61 |
) |
|
|
|
|
Common stock |
|
|
709 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
709 |
|
Additional paid-in capital |
|
|
6,611 |
|
|
|
2,647 |
|
|
|
4,334 |
|
|
|
(6,761 |
) |
|
|
6,831 |
|
Accumulated other comprehensive (loss) income |
|
|
(253 |
) |
|
|
(173 |
) |
|
|
(138 |
) |
|
|
311 |
|
|
|
(253 |
) |
Retained earnings (deficit) |
|
|
4 |
|
|
|
2,707 |
|
|
|
(2,381 |
) |
|
|
(326 |
) |
|
|
4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Newmont stockholders equity |
|
|
7,071 |
|
|
|
5,181 |
|
|
|
1,876 |
|
|
|
(6,837 |
) |
|
|
7,291 |
|
Noncontrolling interests |
|
|
|
|
|
|
1,432 |
|
|
|
202 |
|
|
|
(264 |
) |
|
|
1,370 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders equity |
|
|
7,071 |
|
|
|
6,613 |
|
|
|
2,078 |
|
|
|
(7,101 |
) |
|
|
8,661 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders equity |
|
$ |
10,121 |
|
|
$ |
10,063 |
|
|
$ |
7,906 |
|
|
$ |
(12,363 |
) |
|
$ |
15,727 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Newmont |
|
|
|
Newmont |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mining |
|
|
|
Mining |
|
|
Newmont |
|
|
Other |
|
|
|
|
|
|
Corporation |
|
Consolidating Statement of Cash Flows |
|
Corporation |
|
|
USA |
|
|
Subsidiaries |
|
|
Eliminations |
|
|
Consolidated |
|
Operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
351 |
|
|
$ |
535 |
|
|
$ |
116 |
|
|
$ |
(419 |
) |
|
$ |
583 |
|
Adjustments |
|
|
49 |
|
|
|
343 |
|
|
|
(331 |
) |
|
|
419 |
|
|
|
480 |
|
Net change in operating assets and liabilities |
|
|
1 |
|
|
|
(220 |
) |
|
|
42 |
|
|
|
|
|
|
|
(177 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided from (used in) continuing operations |
|
|
401 |
|
|
|
658 |
|
|
|
(173 |
) |
|
|
|
|
|
|
886 |
|
Net cash provided from discontinued operations |
|
|
|
|
|
|
8 |
|
|
|
|
|
|
|
|
|
|
|
8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided from (used in) operations |
|
|
401 |
|
|
|
666 |
|
|
|
(173 |
) |
|
|
|
|
|
|
894 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions to property, plant and mine development |
|
|
|
|
|
|
(234 |
) |
|
|
(676 |
) |
|
|
|
|
|
|
(910 |
) |
Proceeds from sale of marketable debt and
equity securities |
|
|
|
|
|
|
|
|
|
|
5 |
|
|
|
|
|
|
|
5 |
|
Acquisitions, net |
|
|
(8 |
) |
|
|
(11 |
) |
|
|
(741 |
) |
|
|
|
|
|
|
(760 |
) |
Other |
|
|
|
|
|
|
1 |
|
|
|
(8 |
) |
|
|
|
|
|
|
(7 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities |
|
|
(8 |
) |
|
|
(244 |
) |
|
|
(1,420 |
) |
|
|
|
|
|
|
(1,672 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net external (repayments) borrowings |
|
|
(154 |
) |
|
|
(26 |
) |
|
|
6 |
|
|
|
|
|
|
|
(174 |
) |
Net intercompany (repayments) borrowings |
|
|
(1,381 |
) |
|
|
(207 |
) |
|
|
1,588 |
|
|
|
|
|
|
|
|
|
Dividends paid to common stockholders |
|
|
(98 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(98 |
) |
Dividends paid to noncontrolling interests in
subsidiaries |
|
|
|
|
|
|
(112 |
) |
|
|
|
|
|
|
|
|
|
|
(112 |
) |
Proceeds from stock issuance |
|
|
1,247 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,247 |
|
Change in restricted cash and other |
|
|
(7 |
) |
|
|
|
|
|
|
12 |
|
|
|
|
|
|
|
5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in) provided from financing activities
of continuing operations |
|
|
(393 |
) |
|
|
(345 |
) |
|
|
1,606 |
|
|
|
|
|
|
|
868 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in financing activities
of discontinued operations |
|
|
|
|
|
|
(2 |
) |
|
|
|
|
|
|
|
|
|
|
(2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in) provided from financing activities |
|
|
(393 |
) |
|
|
(347 |
) |
|
|
1,606 |
|
|
|
|
|
|
|
866 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash |
|
|
|
|
|
|
|
|
|
|
21 |
|
|
|
|
|
|
|
21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash and cash equivalents |
|
|
|
|
|
|
75 |
|
|
|
34 |
|
|
|
|
|
|
|
109 |
|
Cash and cash equivalents at beginning of period |
|
|
|
|
|
|
310 |
|
|
|
125 |
|
|
|
|
|
|
|
435 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
|
$ |
|
|
|
$ |
385 |
|
|
$ |
159 |
|
|
$ |
|
|
|
$ |
544 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
38
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2008 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Newmont |
|
|
|
Newmont |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mining |
|
|
|
Mining |
|
|
Newmont |
|
|
Other |
|
|
|
|
|
|
Corporation |
|
Consolidating Statement of Cash Flows |
|
Corporation |
|
|
USA |
|
|
Subsidiaries |
|
|
Eliminations |
|
|
Consolidated |
|
Operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
636 |
|
|
$ |
937 |
|
|
$ |
5 |
|
|
$ |
(682 |
) |
|
$ |
896 |
|
Adjustments |
|
|
47 |
|
|
|
86 |
|
|
|
(481 |
) |
|
|
682 |
|
|
|
334 |
|
Net change in operating assets and liabilities |
|
|
41 |
|
|
|
(289 |
) |
|
|
(11 |
) |
|
|
|
|
|
|
(259 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided from (used in) continuing operations |
|
|
724 |
|
|
|
734 |
|
|
|
(487 |
) |
|
|
|
|
|
|
971 |
|
Net cash (used in) provided from discontinued
operations |
|
|
|
|
|
|
(125 |
) |
|
|
18 |
|
|
|
|
|
|
|
(107 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided from (used in) operations |
|
|
724 |
|
|
|
609 |
|
|
|
(469 |
) |
|
|
|
|
|
|
864 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions to property, plant and mine development |
|
|
|
|
|
|
(326 |
) |
|
|
(567 |
) |
|
|
|
|
|
|
(893 |
) |
Acquisitions, net |
|
|
|
|
|
|
(7 |
) |
|
|
(318 |
) |
|
|
|
|
|
|
(325 |
) |
Other |
|
|
|
|
|
|
(15 |
) |
|
|
(1 |
) |
|
|
|
|
|
|
(16 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities of continuing
operations |
|
|
|
|
|
|
(348 |
) |
|
|
(886 |
) |
|
|
|
|
|
|
(1,234 |
) |
Net cash (used in) provided from investing activities
of discontinued operations |
|
|
|
|
|
|
(14 |
) |
|
|
4 |
|
|
|
|
|
|
|
(10 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities |
|
|
|
|
|
|
(362 |
) |
|
|
(882 |
) |
|
|
|
|
|
|
(1,244 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net external borrowings (repayments) |
|
|
475 |
|
|
|
(77 |
) |
|
|
|
|
|
|
|
|
|
|
398 |
|
Net intercompany (repayments) borrowings |
|
|
(1,132 |
) |
|
|
(50 |
) |
|
|
1,182 |
|
|
|
|
|
|
|
|
|
Dividends paid to common stockholders |
|
|
(91 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(91 |
) |
Dividends paid to noncontrolling interests in
subsidiaries |
|
|
|
|
|
|
(147 |
) |
|
|
|
|
|
|
|
|
|
|
(147 |
) |
Proceeds from stock issuance |
|
|
24 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24 |
|
Change in restricted cash and other |
|
|
|
|
|
|
3 |
|
|
|
4 |
|
|
|
|
|
|
|
7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in) provided from financing activities
of continuing operations |
|
|
(724 |
) |
|
|
(271 |
) |
|
|
1,186 |
|
|
|
|
|
|
|
191 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in financing activities of discontinued
operations |
|
|
|
|
|
|
(2 |
) |
|
|
|
|
|
|
|
|
|
|
(2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in) provided from financing activities |
|
|
(724 |
) |
|
|
(273 |
) |
|
|
1,186 |
|
|
|
|
|
|
|
189 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash |
|
|
|
|
|
|
|
|
|
|
(4 |
) |
|
|
|
|
|
|
(4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash and cash equivalents |
|
|
|
|
|
|
(26 |
) |
|
|
(169 |
) |
|
|
|
|
|
|
(195 |
) |
Cash and cash equivalents at beginning of period |
|
|
|
|
|
|
790 |
|
|
|
441 |
|
|
|
|
|
|
|
1,231 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
|
$ |
|
|
|
$ |
764 |
|
|
$ |
272 |
|
|
$ |
|
|
|
$ |
1,036 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
39
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
NOTE 27 COMMITMENTS AND CONTINGENCIES
General
The Company follows FASB Statement No. 5, Accounting for Contingencies, in determining its
accruals and disclosures with respect to loss contingencies other than tax contingencies provided
for in accordance with FIN 48 (see Note 8). Accordingly, estimated losses from loss contingencies
are accrued by a charge to income when information available prior to issuance of the financial
statements indicates that it is probable (greater than a 75% probability) that a liability could be
incurred and the amount of the loss can be reasonably estimated. Legal expenses associated with the
contingency are expensed as incurred. If a loss contingency is not probable or reasonably
estimable, disclosure of the loss contingency is made in the financial statements when it is at
least reasonably possible that a material loss could be incurred.
Operating Segments
The Companys operating segments are identified in Note 25. Except as noted in this paragraph,
all of the Companys commitments and contingencies specifically described in this Note 27 relate to
the Corporate and Other reportable segment. The Nevada Operations matters under Newmont USA Limited
relate to the North America reportable segment. The PT Newmont Minahasa Raya matters relate to the
Asia Pacific reportable segment. The Yanacocha matters relate to the South America reportable
segment. The Newmont Yandal Operations Pty Limited matter relates to the Asia Pacific reportable
segment. The PTNNT matters relate to the Asia Pacific reportable segment.
Environmental Matters
The Companys mining and exploration activities are subject to various laws and regulations
governing the protection of the environment. These laws and regulations are continually changing
and are generally becoming more restrictive. The Company conducts its operations so as to protect
the public health and environment and believes its operations are in compliance with applicable
laws and regulations in all material respects. The Company has made, and expects to make in the
future, expenditures to comply with such laws and regulations, but cannot predict the full amount
of such future expenditures.
Estimated future reclamation costs are based principally on legal and regulatory requirements.
At June 30, 2009 and December 31, 2008, $619 and $594, respectively, were accrued for reclamation
costs relating to mineral properties in accordance with FASB Statement No. 143, Accounting for
Asset Retirement Obligations. The current portions of $55 and $58 at June 30, 2009 and December
31, 2008, respectively, are included in Other current liabilities.
In addition, the Company is involved in several matters concerning environmental obligations
associated with former mining activities. Generally, these matters concern developing and
implementing remediation plans at the various sites involved. The Company believes that the related
environmental obligations associated with these sites are similar in nature with respect to the
development of remediation plans, their risk profile and the compliance required to meet general
environmental standards. Based upon the Companys best estimate of its liability for these matters,
$157 and $163 were accrued for such obligations at June 30, 2009 and December 31, 2008,
respectively. These amounts are included in Other current liabilities and Reclamation and
remediation liabilities. Depending upon the ultimate resolution of these matters, the Company
believes that it is reasonably possible that the liability for these matters could be as much as
131% greater or 8% lower than the amount accrued at June 30, 2009. The amounts accrued for these
matters are reviewed periodically based upon facts and circumstances available at the time. Changes
in estimates are recorded in Other expense, net in the period estimates are revised.
Details about certain of the more significant matters involved are discussed below.
Dawn Mining Company LLC (Dawn) 51% Newmont Owned
Midnite Mine Site. Dawn previously leased an open pit uranium mine, currently inactive, on
the Spokane Indian Reservation in the State of Washington. The mine site is subject to regulation
by agencies of the U.S. Department of Interior (the Bureau of Indian Affairs and the Bureau of Land
Management), as well as the United States Environmental Protection Agency (EPA).
40
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
In 1991, Dawns mining lease at the mine was terminated. As a result, Dawn was required to
file a formal mine closure and reclamation plan. The Department of Interior commenced an analysis
of Dawns proposed plan and alternate closure and reclamation plans for the mine. Work on this
analysis has been suspended indefinitely. In mid-2000, the mine was included on the National
Priorities List under the Comprehensive Environmental Response, Compensation and Liability Act
(CERCLA). In March 2003, the EPA notified Dawn and Newmont that it had thus far expended $12 on
the Remedial Investigation/Feasibility Study (RI/FS) under CERCLA. In October 2005, the EPA
issued the RI/FS on this property in which it indicated a preferred remedy estimated to cost
approximately $150. Newmont and Dawn filed comments on the RI/FS with the EPA in January 2006. On
October 3, 2006, the EPA issued a final Record of Decision in which it formally selected the
preferred remedy identified in the RI/FS.
On January 28, 2005, the EPA filed a lawsuit against Dawn and Newmont under CERCLA in the U.S.
District Court for the Eastern District of Washington. The EPA has asserted that Dawn and Newmont
are liable for reclamation or remediation work and costs at the mine. Dawn does not have sufficient
funds to pay for the reclamation plan it proposed or for any alternate plan, or for any additional
remediation work or costs at the mine.
On July 14, 2008, after a bench trial, the Court held Newmont liable under CERCLA as an
operator of the Midnite Mine. The Court previously ruled on summary judgment that both the U.S.
Government and Dawn were liable under CERCLA. On October 17, 2008 the Court issued its written
decision in the bench trial. The Court found Dawn and Newmont jointly and severally liable under
CERCLA for past and future response costs, and ruled that each of Dawn and Newmont are responsible
to pay one-third of such costs. The Court also found the U.S. Government liable on Dawns and
Newmonts contribution claim, and ruled that the U.S. Government is responsible to pay one-third of
all past and future response costs. In November 2008, all parties appealed the Courts ruling. Also
in November 2008, the EPA issued an Administrative Order pursuant to Section 106 of CERCLA ordering
Dawn and Newmont to conduct water treatment, testing and other preliminary remedial actions.
Newmont has initiated those preliminary remedial actions. However, the issue of whether the EPAs
current preferred remedy is consistent with the National Contingency Plan has not yet come before
the Court.
Newmont intends to continue to vigorously defend this matter and cannot reasonably predict the
outcome of this lawsuit or the likelihood of any other action against Dawn or Newmont arising from
this matter.
Dawn Mill Site. Dawn also owns a uranium mill site facility, located on private land near
Ford, Washington, which is subject to state and federal regulation. In late 1999, Dawn sought and
later received approval from the State of Washington for a revised closure plan that expedites the
reclamation process at the site. The currently approved plan for the site is guaranteed by Newmont.
Newmont Capital Limited (Newmont Capital) 100% Newmont Owned
In February 1999, the EPA placed the Lava Cap mine site in Nevada County, California on the
National Priorities List under CERCLA. The EPA then initiated a RI/FS under CERCLA to determine
environmental conditions and remediation options at the site.
Newmont Capital, formerly known as Franco-Nevada Mining Corporation, Inc., owned the property
for approximately three years from 1984 to 1986 but never mined or conducted exploration at the
site. The EPA asserts that Newmont Capital is responsible for clean up costs incurred at the site.
Newmont Capital and the EPA entered into a consent decree to settle all aspects of this matter
except future potential Natural Resource Damage claims. In February 2009, the U.S. District Court
for the Northern District of California approved the consent decree and the settlement was
completed.
Newmont USA Limited 100% Newmont Owned
Pinal Creek. Newmont is a defendant in a lawsuit brought on November 5, 1991 in U.S.
District Court in Arizona by the Pinal Creek Group, alleging that Newmont and others are
responsible for some portion of costs incurred to address groundwater contamination emanating from
copper mining operations located in the area of Globe and Miami, Arizona. Two former subsidiaries
of Newmont, Pinto Valley Copper Corporation and Magma Copper Company (now known as BHP Copper Inc.)
owned some of the mines in the area between 1983 and 1987. The court has dismissed plaintiffs
claims seeking to hold Newmont liable for the acts or omissions of its former subsidiaries. Newmont
believes it has strong
defenses to plaintiffs remaining claims, including, without limitation that Newmonts agents
did not participate in any pollution causing activities; that Newmonts liabilities, if any, were
contractually transferred to one of the plaintiffs; that portions of plaintiffs claimed damages
are not recoverable; and that Newmonts equitable share of liability, if any, would be immaterial.
While Newmont has denied liability and is vigorously defending these claims, it cannot reasonably
predict the final outcome of this lawsuit.
41
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
Grass Valley. On February 3, 2004, the City of Grass Valley, California brought suit
against Newmont under CERCLA in the U.S. District Court for the Northern District of California.
This matter involves an abandoned mine adit on property previously owned by a predecessor of
Newmont and currently owned by the City of Grass Valley. The complaint alleges that the adit is
discharging metals-bearing water into a stream on the property, in concentrations in excess of
current EPA drinking water standards. On February 4, 2009, this matter was fully resolved by
settlement. Pursuant to the settlement, Newmont has agreed to manage the water discharge on an
ongoing basis.
Gray Eagle Mine Site. By letter dated September 3, 2002, the EPA notified Newmont that the
EPA had expended $3 in response costs to address environmental conditions associated with a
historic tailings pile located at the Grey Eagle Mine site near Happy Camp, California, and
requested that Newmont pay those costs. The EPA has identified four potentially responsible
parties, including Newmont. Newmont does not believe it has any liability for environmental
conditions at the Grey Eagle Mine site, and intends to vigorously defend any formal claims by the
EPA. Newmont cannot reasonably predict the likelihood or outcome of any future action against it
arising from this matter.
Ross-Adams Mine Site. By letter dated June 5, 2007, the U.S. Forest Service notified
Newmont that it had expended approximately $0.3 in response costs to address environmental
conditions at the Ross-Adams mine in Prince of Wales, Alaska, and requested Newmont USA Limited pay
those costs and perform an Engineering Evaluation/Cost Analysis (EE/CA) to assess what future
response activities might need to be completed at the site. Newmont does not believe it has any
liability for environmental conditions at the site, and intends to vigorously defend any formal
claims by the EPA. Newmont has agreed to perform the EE/CA. Newmont cannot reasonably predict the
likelihood or outcome of any future action against it arising from this matter.
PT Newmont Minahasa Raya (PTNMR) 80% Newmont Owned
In July 2004, a criminal complaint was filed against PTNMR, the Newmont subsidiary that
operated the Minahasa mine in Indonesia, alleging environmental pollution relating to submarine
tailings placement into nearby Buyat Bay. The Indonesian police detained five PTNMR employees
during September and October of 2004. The police investigation and the detention of PTNMRs
employees was declared illegal by the South Jakarta District Court in December 2004, but in March
2005, the Indonesian Supreme Court upheld the legality of the police investigation, and the police
turned their evidence over to the local prosecutor. In July 2005, the prosecutor filed an
indictment against PTNMR and its President Director, alleging environmental pollution at Buyat Bay.
After the court rejected motions to dismiss the proceeding, the trial proceeded and all evidence,
including that of the defense, was presented in court by September 2006. In November 2006 the
prosecution filed its charge, seeking a three-year jail sentence for PTNMRs President Director
plus a nominal fine. In addition, the prosecution recommended a nominal fine against PTNMR. The
defense filed responses in January 2007, and final briefing was completed in March 2007. On April
24, 2007, the court entered its verdict acquitting PTNMR and its President Director of all charges.
In May 2007, the prosecution appealed the decision of the court to the Indonesian Supreme Court,
despite Indonesian laws that prohibit the appeal of a verdict of acquittal. In October 2008, a
panel of Supreme Court justices was assigned to consider the appeal. In April 2009, the Indonesian
Supreme Court summarily dismissed the appeal of the prosecutor related to PTNMR and its President
Director.
In addition, on March 22, 2007, an Indonesian non-governmental organization named Wahana
Lingkungan Hidup Indonesia (WALHI) filed a civil suit against PTNMR and Indonesias Ministry of
Energy and Mineral Resources and Ministry for the Environment, alleging pollution from the disposal
of mine tailings into Buyat Bay, and seeking a court order requiring PTNMR to fund a 25-year
monitoring program in relation to Buyat Bay. In December 2007, the court ruled in PTNMRs favor and
found that WALHIs allegations of pollution in Buyat Bay were without merit. In March 2008, WALHI
appealed this decision to the Indonesian Supreme Court.
42
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
Independent sampling and testing of Buyat Bay water and fish, as well as area residents,
conducted by the World Health Organization and the Australian Commonwealth Scientific and
Industrial Research Organization, confirm that PTNMR has not polluted the Buyat Bay environment,
and, therefore, has not adversely affected the fish in Buyat Bay or the health of nearby residents.
The Company remains steadfast that it has not caused pollution or health problems.
Other Legal Matters
Minera Yanacocha S.R.L. (Yanacocha) 51.35% Newmont Owned
Choropampa. In June 2000, a transport contractor of Yanacocha spilled approximately 151
kilograms of elemental mercury near the town of Choropampa, Peru, which is located 53 miles (85
kilometers) southwest of the Yanacocha mine. Elemental mercury is not used in Yanacochas
operations but is a by-product of gold mining and was sold to a Lima firm for use in medical
instruments and industrial applications. A comprehensive health and environmental remediation
program was undertaken by Yanacocha in response to the incident. In August 2000, Yanacocha paid
under protest a fine of 1,740,000 Peruvian soles (approximately $0.5) to the Peruvian government.
Yanacocha has entered into settlement agreements with a number of individuals impacted by the
incident. As compensation for the disruption and inconvenience caused by the incident, Yanacocha
entered into agreements with and provided a variety of public works in the three communities
impacted by this incident. Yanacocha cannot predict the likelihood of additional expenditures
related to this matter.
Yanacocha, various wholly-owned subsidiaries of Newmont, and other defendants have been named
in lawsuits filed by approximately 1,100 Peruvian citizens in Denver District Court for the State
of Colorado. These actions seek compensatory damages based on claims associated with the elemental
mercury spill incident. The parties in these cases agreed to submit these matters to binding
arbitration. In October 2007, the parties to the arbitration entered a court-approved settlement
agreement, resolving most of these cases. In April 2009, all remaining matters were settled.
Additional lawsuits relating to the Choropampa incident were filed against Yanacocha in the
local courts of Cajamarca, Peru, in May 2002 by over 900 Peruvian citizens. A significant number of
the plaintiffs in these lawsuits entered into settlement agreements with Yanacocha prior to filing
such claims. In April 2008, the Peruvian Supreme Court upheld the validity of these settlement
agreements, which should result in the dismissal of all claims brought by previously settled
plaintiffs. Yanacocha has also entered into settlement agreements with approximately 350 additional
plaintiffs. The claims asserted by approximately 200 plaintiffs remain. Neither Newmont nor
Yanacocha can reasonably estimate the ultimate loss relating to such claims.
Conga. Yanacocha is involved in a dispute with the Provincial Municipality of Celendin
regarding the authority of that governmental body to regulate the development of the Conga project.
In the fourth quarter of 2004, the Municipality of Celendin enacted an ordinance declaring the area
around Conga to be a mining-free reserve and naturally protected area. Yanacocha challenged this
ordinance by means of two legal actions, one filed by Yanacocha (as the lease holder of the Conga
mining concessions) and one filed by Minera Chaupiloma (as the titleholder of the Conga mining
concessions). In August 2007, a Peruvian Court of first instance upheld Chaupilomas claim, stating
that the Municipality of Celendin lacks the authority to create natural protected areas. The
Municipality of Celendin has not appealed the ruling. In July 2008, a Peruvian Court of first
instance dismissed Yanacochas claim as groundless. Yanacocha appealed the ruling to the appellate
Court in Lima, and in January 2009, the appellate Court in Lima reversed the lower Court ruling and
upheld Yanacochas claim.
Newmont Yandal Operations Pty Ltd (NYOL) 100% Newmont Owned
On September 3, 2003, J. Aron & Co. commenced proceedings in the Supreme Court of New South
Wales (Australia) against NYOL, its subsidiaries and the administrator in relation to the completed
voluntary administration of the NYOL group. J. Aron & Co., a NYOL creditor, initially sought
injunctive relief that was denied by the court on September 8, 2003. On October 30, 2003, J. Aron &
Co. filed a statement of claim alleging various deficiencies in the implementation of the voluntary
administration process and seeking damages and other relief against NYOL and other parties. Newmont
cannot reasonably predict the final outcome of this lawsuit.
43
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
PT Newmont Nusa Tenggara (PTNNT) 45% Newmont Owned
Under the Batu Hijau Contract of Work, beginning in 2006 and continuing through 2010, a
portion of PTNNTs shares must be offered for sale, first, to the Indonesian government or, second,
to Indonesian nationals, equal to the difference between the following percentages and the
percentage of shares already owned by the Indonesian government or Indonesian nationals (if such
number is positive): 23% by March 31, 2006; 30% by March 31, 2007; 37% by March 31, 2008; 44% by
March 31, 2009; and 51% by March 31, 2010. As PT Pukuafu Indah (PTPI), an Indonesian national,
has owned and continues to own a 20% interest in PTNNT, in 2006 a 3% interest was required to be
offered for sale and in each of 2007 through 2010 an additional 7% interest must be offered (for an
aggregate 31% interest). The price at which such interest must be offered for sale to the
Indonesian parties is the highest of the then-current replacement cost, the price at which shares
would be accepted for listing on the Indonesian Stock Exchange, or the fair market value of such
interest as a going concern, as agreed with the Indonesian government. Pursuant to this provision,
it is possible that the ownership interest of NTP in PTNNT could be reduced to 49% or that
subsequent disputes could arise concerning the divestiture of the ownership interest of NTP in
PTNNT.
Initial arbitration matter
PTPI has owned and continues to own a 20% interest in PTNNT, and therefore the
Newmont-Sumitomo partnership was required to offer a 3% interest in PTNNT for sale in 2006 and an
additional 7% interest in each of 2007 through 2010. In accordance with the Contract of Work, an
offer to sell a 3% interest was made to the Indonesian government in 2006 and an offer for an
additional 7% interest was made in each of 2007 and 2008. A further 7% interest in the shares of
PTNNT was offered for sale in March 2009. While the central government declined to participate in
the 2006 and 2007 offers, local governments in the area in which the Batu Hijau mine is located
expressed interest in acquiring shares, as did various Indonesian nationals. In January 2008, the
Newmont-Sumitomo partnership agreed to sell, under a carried interest arrangement, 2% of PTNNTs
shares to Kabupaten Sumbawa, one of the local governments, subject to satisfaction of closing
conditions. The Indonesian government subsequently stated that it would not approve the transfer of
shares under this agreement. On February 11, 2008, PTNNT received notification from the Department
of Energy and Mineral Resources (DEMR) alleging that PTNNT is in breach of its divestiture
requirements under the Contract of Work, and threatening to issue a notice to terminate the
Contract of Work if PTNNT did not agree to divest the 2006 and 2007 shares, in accordance with the
direction of the DEMR, by February 22, 2008, which date was extended to March 3, 2008. A second
Notice of Default was received relating to the alleged failure to divest the 2008 shares as well.
On March 3, 2008, the Indonesian government filed for international arbitration as provided under
the Contract of Work, as did PTNNT. In the arbitration proceeding, PTNNT sought a declaration that
the Indonesian government is not entitled to terminate the Contract of Work and additional
declarations pertaining to the procedures for divesting the shares. For its part, the Indonesian
government sought declarations that PTNNT is in default of its divestiture obligations, that the
government may terminate the Contract of Work and recover damages for breach of the Contract of
Work, and that PTNNT must cause shares subject to divestiture to be sold to certain local
governments.
Second arbitration matter
In 1997, to enable development of the Batu Hijau mine, PTNNT secured an aggregate $1,000 in
financing from the United States Export-Import Bank, the Japan Bank for International Cooperation
(formerly the Japan Export-Import Bank), and Kreditanstalt fur Wiederaufbau (the German
Export-Import Bank) (collectively, the Senior Lenders). The Senior Lenders required the
shareholders of PTNNT to pledge 100% of the shares of PTNNT as security for repayment of the loans.
As part of that process, on October 30, 1997, the Minister of Energy and Mineral Resources approved
the share pledge arrangements.
Subsequent to an additional 7% interest in PTNNT being offered by NTP for sale on March 28,
2008 (as required under the Contract of Work), the Director General of Mineral, Coal and Geothermal
Resources at DEMR claimed that PTNNT breached its obligations under the Contract of Work by
allowing shares to be offered for sale that are pledged to the Senior Lenders as security for the
repayment of the senior debt. In the letter, the Director General claimed that NTP would be in
default under the Contract of Work if the shares of PTNNT offered for sale in March 2008, together
with the shares offered in 2006 and 2007, were not in the possession of Indonesian government
and/or government owned entities, free of any such senior pledge, by July 13, 2008. Consequently,
on July 10, 2008, PTNNT filed a notice to commence an additional international arbitration
proceeding, as provided for under the Contract of Work, to resolve the claim that PTNNT breached
its obligations under the Contract of Work by allowing shares to be offered that are subject to
pledge obligations to the Senior Lenders. This issue was incorporated into and resolved as
part of the initial arbitration proceeding.
44
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
An international arbitration panel was appointed to resolve these claims and a hearing was
held in Jakarta in December 2008. On March 31, 2009, the arbitration panel issued its Final Award
and decision on the matter. In its decision, the arbitration panel determined that PTNNTs foreign
shareholders had not complied with the divestiture procedure required by the Contract of Work in
2006 and 2007, but the panel ruled that the Indonesian government is not entitled to immediately
terminate the Contract of Work and the panel rejected the Indonesian governments claim for
damages. The Arbitration Panel granted PTNNT 180 days from the date of notification of the Final
Award to transfer the 2006 3% interest and the 2007 7% interest in PTNNT to the local governments
or their respective nominees. The Arbitration Panel also applied a 180-day cure period to the 2008
7% interest, ruling that PTNNT must (within such 180-day period) offer the 2008 7% interest to the
Indonesian government or its nominee, and transfer such shares if, after agreement on the transfer
price, the Indonesian government invokes its right of first refusal under the Contract of Work. The
panel ruled that shares offered to the Indonesian government pursuant to the Contract of Work must
be offered free of any pledge or obligation to re-pledge the shares to the Senior Lenders. Finally,
the Panel directed PTNNT to pay to the Indonesian government an allocated portion of certain legal
fees and costs of the arbitration. PTNNT submitted payment of $2 for legal fees and costs. The
Company also entered a formal agreement with the Senior Lenders under which the Senior Lenders
released the pledge on the aggregated 31% of shares in PTNNT that are subject to divestiture
requirements in exchange for the Company and Sumitomo agreeing to provide joint and several
guarantees, thus allowing the Company to transfer these shares free of any pledge or obligation to
re-pledge the shares to the lenders. On July 14, 2009, the Company reached agreement with the
Indonesian government on the price of the 2008 7% interest and the 2009 7% interest. PTNNT has
reoffered the 2008 7% interest and the 2009 7% interest to the Indonesian government at this newly
agreed price. The Company cannot predict the outcome of these discussions or the impact on such
discussions of the Indonesian presidential elections held in July 2009. Subsequent disputes may
arise concerning the divestiture of the shares including if the transfer is not completed to the
satisfaction of the parties within the 180-day period described above.
The Company follows FASB Interpretation No. 46(R) Consolidation of Variable Interest
Entities (FIN 46(R)), which provides guidance on the identification and reporting for entities
over which control is achieved through means other than voting rights. FIN 46(R) defines such
entities as Variable Interest Entities (VIEs). Newmont identified NTP, the partnership that owns
an 80% interest in PTNNT, as a VIE due to certain capital structures and contractual relationships.
As a result of the Companys 56.25% ownership in NTP, the Company consolidates Batu Hijau, and will
continue to consolidate Batu Hijau in its Consolidated Financial Statements as long as the Company
continues to be the primary beneficiary of NTP and NTP controls PTNNT.
Other Commitments and Contingencies
Tax contingencies are provided for under FIN 48 (see Note 8).
In a 1993 asset exchange, a wholly-owned subsidiary transferred a coal lease under which the
subsidiary had collected advance royalty payments totaling $484. From 1994 to 2018, remaining
advance payments under the lease to the transferee total $390. In the event of title failure as
stated in the lease, this subsidiary has a primary obligation to refund previously collected
payments and has a secondary obligation to refund any of the $390 collected by the transferee, if
the transferee fails to meet its refund obligation. The subsidiary has title insurance on the
leased coal deposits of $240 covering the secondary obligation. The Company and the subsidiary
regard the circumstances entitling the lessee to a refund as remote.
The Company has minimum royalty obligations on one of its producing mines in Nevada for the
life of the mine. Amounts paid as a minimum royalty (where production royalties are less than the
minimum obligation) in any year are recoverable in future years when the minimum royalty obligation
is exceeded. Although the minimum royalty requirement may not be met in a particular year, the
Company expects that over the mine life, gold production will be sufficient to meet the minimum
royalty requirements. Minimum royalty payments payable are $19 in 2009 through 2013 and $93
thereafter.
45
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
As part of its ongoing business and operations, the Company and its affiliates are required to
provide surety bonds, bank letters of credit and bank guarantees as financial support for various
purposes, including environmental reclamation, exploration permitting, workers compensation
programs and other general corporate purposes. At June 30, 2009 and
December 31, 2008, there were $851 and $778, respectively, of outstanding letters of credit,
surety bonds and bank guarantees. The surety bonds, letters of credit and bank guarantees reflect
fair value as a condition of their underlying purpose and are subject to fees competitively
determined in the market place. The obligations associated with these instruments are generally
related to performance requirements that the Company addresses through its ongoing operations. As
the specific requirements are met, the beneficiary of the associated instrument cancels and/or
returns the instrument to the issuing entity. Certain of these instruments are associated with
operating sites with long-lived assets and will remain outstanding until closure. Generally,
bonding requirements associated with environmental regulation are becoming more restrictive. In
addition, the surety markets for certain types of environmental bonding used by the Company have
become increasingly constrained. The Company, however, believes it is in compliance with all
applicable bonding obligations and will be able to satisfy future bonding requirements, through
existing or alternative means, as they arise.
Newmont is from time to time involved in various legal proceedings related to its business.
Except in the above-described proceedings, management does not believe that adverse decisions in
any pending or threatened proceeding or that amounts that may be required to be paid by reason
thereof will have a material adverse effect on the Companys financial condition or results of
operations.
NOTE 28 SUPPLEMENTARY DATA
Ratio of Earnings to Fixed Charges
The ratio of earnings to fixed charges for the six months ended June 30, 2009 was 9.0. The
ratio of earnings to fixed charges represents income from continuing operations before income tax
expense, equity loss of affiliates and noncontrolling interests in subsidiaries, divided by
interest expense. Interest expense includes amortization of capitalized interest and the portion of
rent expense representative of interest. Interest expense does not include interest on income tax
liabilities. The computation of the ratio of earnings to fixed charges can be found in Exhibit
12.1.
NOTE 29 SUBSEQUENT EVENTS
On
July 17, 2009, the Company sold its interest in Empresa Minera
Inti Raymi (Inti Raymi) in Bolivia to Compania
Procesadora de Minerales S.A., a company controlled by the Companys long-time Bolivian partner. As
part of the transaction, a reclamation trust fund will be established to pay for closure and
reclamation costs when operations eventually cease. The buyer assumed all obligations of the
operation and has agreed to pay Newmont a nominal royalty from future
production. With the sale of Inti Raymi, Newmont has no remaining operations in Bolivia (see Note 9).
46
|
|
|
ITEM 2. |
|
MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION (dollars in millions, except per share, per ounce and per pound amounts). |
The following discussion provides information that management believes is relevant to an
assessment and understanding of the consolidated financial condition and results of operations of
Newmont Mining Corporation and its subsidiaries (collectively, Newmont, the Company, our and
we). References to A$ refer to Australian currency, C$ to Canadian currency, IDR to
Indonesian currency, NZ$ to New Zealand currency and $ to United States currency.
This item should be read in conjunction with our interim unaudited Consolidated Financial
Statements and the notes thereto included in this quarterly report. Additionally, the following
discussion and analysis should be read in conjunction with Managements Discussion and Analysis of
Financial Condition and Results of Operations and the consolidated financial statements included in
Part II of our Annual Report on Form 10-K and Form 10-K/A for the year ended December 31, 2008.
Selected Financial and Operating Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
Revenues |
|
$ |
1,602 |
|
|
$ |
1,503 |
|
|
$ |
3,138 |
|
|
$ |
3,428 |
|
Income from continuing operations |
|
$ |
320 |
|
|
$ |
337 |
|
|
$ |
597 |
|
|
$ |
886 |
|
Net income |
|
$ |
306 |
|
|
$ |
339 |
|
|
$ |
583 |
|
|
$ |
896 |
|
Net income attributable to Newmont stockholders |
|
$ |
162 |
|
|
$ |
271 |
|
|
$ |
351 |
|
|
$ |
636 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per common share, basic |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations attributable to
Newmont stockholders |
|
$ |
0.35 |
|
|
$ |
0.60 |
|
|
$ |
0.75 |
|
|
$ |
1.38 |
|
Net income attributable to Newmont stockholders |
|
$ |
0.33 |
|
|
$ |
0.60 |
|
|
$ |
0.73 |
|
|
$ |
1.40 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated gold ounces sold (thousands) (1) |
|
|
1,502 |
|
|
|
1,483 |
|
|
|
3,019 |
|
|
|
3,084 |
|
Consolidated copper pounds sold (millions) |
|
|
105 |
|
|
|
51 |
|
|
|
201 |
|
|
|
157 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average price received, net (2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold (per ounce) |
|
$ |
915 |
|
|
$ |
900 |
|
|
$ |
911 |
|
|
$ |
917 |
|
Copper (per pound) |
|
$ |
2.17 |
|
|
$ |
3.57 |
|
|
$ |
1.94 |
|
|
$ |
3.93 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs applicable to sales (3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold (per ounce) |
|
$ |
423 |
|
|
$ |
439 |
|
|
$ |
427 |
|
|
$ |
416 |
|
Copper (per pound) |
|
$ |
0.58 |
|
|
$ |
2.02 |
|
|
$ |
0.73 |
|
|
$ |
1.62 |
|
|
|
|
(1) |
|
Includes incremental start-up ounces of 1 for both the three and six months ended
June 30, 2009 and 16 and 17 for the three and six months ended June 30, 2008, respectively.
Incremental start-up includes the removal and production of de minimis saleable materials
during development and is recorded as Other income, net of incremental mining and processing
costs. |
|
(2) |
|
After treatment and refining charges. |
|
(3) |
|
Excludes Amortization and Accretion. |
Consolidated Financial Results
Net income attributable to Newmont stockholders for the second quarter and first half of 2009
was $162, or $0.33 per share and $351, or 0.73 per share, respectively. Results for the second
quarter of 2009 compared to 2008 were impacted by higher realized gold prices, lower realized
copper prices and higher sales volume. Results for the first half of 2009 compared to 2008 were
impacted by lower realized gold and copper prices, lower gold sales volume, higher copper sales
volume, lower Canadian Oil Sands Trust income, higher income taxes in 2009 and a discrete tax
benefit in 2008.
47
Sales gold, net for the second quarter of 2009 increased $53 compared to the second quarter
of 2008, due to higher realized prices and increased sales volume. Sales gold, net for the first
half of 2009 decreased $65 compared to the first half of 2008, due to lower realized prices and
decreased sales volume. For a complete discussion regarding variations in gold volumes, see Results
of Consolidated Operations below. The following analysis summarizes the change in consolidated gold
sales revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
Consolidated gold sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross |
|
$ |
1,383 |
|
|
$ |
1,323 |
|
|
$ |
2,761 |
|
|
$ |
2,823 |
|
Less: Treatment and refining charges |
|
|
(10 |
) |
|
|
(3 |
) |
|
|
(13 |
) |
|
|
(10 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net |
|
$ |
1,373 |
|
|
$ |
1,320 |
|
|
$ |
2,748 |
|
|
$ |
2,813 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated gold ounces sold (thousands): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross |
|
|
1,502 |
|
|
|
1,483 |
|
|
|
3,019 |
|
|
|
3,084 |
|
Less: Incremental start-up sales |
|
|
(1 |
) |
|
|
(16 |
) |
|
|
(1 |
) |
|
|
(17 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net |
|
|
1,501 |
|
|
|
1,467 |
|
|
|
3,018 |
|
|
|
3,067 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized price (per ounce): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Before treatment and refining charges |
|
$ |
922 |
|
|
$ |
902 |
|
|
$ |
915 |
|
|
$ |
920 |
|
After treatment and refining charges |
|
$ |
915 |
|
|
$ |
900 |
|
|
$ |
911 |
|
|
$ |
917 |
|
The change in consolidated gold sales is due to:
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2009 vs. 2008 |
|
|
2009 vs. 2008 |
|
Increase (decrease) in consolidated ounces sold |
|
$ |
30 |
|
|
$ |
(45 |
) |
Increase (decrease) in average realized gold price |
|
|
30 |
|
|
|
(17 |
) |
Increase in treatment and refining charges |
|
|
(7 |
) |
|
|
(3 |
) |
|
|
|
|
|
|
|
|
|
$ |
53 |
|
|
$ |
(65 |
) |
|
|
|
|
|
|
|
Sales copper, net for the second quarter of 2009 increased $46, or 25%, compared to the
second quarter of 2008, due to increased sales volume partially offset by lower realized prices.
Sales copper, net for the first half of 2009 decreased $225, or 37%, compared to the first half
of 2008, due to lower realized prices, partially offset by increased sales volume. For a complete
discussion regarding variations in copper volumes, see Results of Consolidated Operations below.
The following analysis summarizes the change in consolidated copper sales revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
Consolidated copper sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross before provisional pricing |
|
$ |
223 |
|
|
$ |
194 |
|
|
$ |
377 |
|
|
$ |
576 |
|
Provisional pricing mark-to-market gain |
|
|
35 |
|
|
|
8 |
|
|
|
64 |
|
|
|
90 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross after provisional pricing |
|
|
258 |
|
|
|
202 |
|
|
|
441 |
|
|
|
666 |
|
Less: Treatment and refining charges |
|
|
(29 |
) |
|
|
(19 |
) |
|
|
(51 |
) |
|
|
(51 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net |
|
$ |
229 |
|
|
$ |
183 |
|
|
$ |
390 |
|
|
$ |
615 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated copper pounds sold (millions) |
|
|
105 |
|
|
|
51 |
|
|
|
201 |
|
|
|
157 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized price (per pound): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross before provisional pricing |
|
$ |
2.12 |
|
|
$ |
3.78 |
|
|
$ |
1.88 |
|
|
$ |
3.67 |
|
Provisional pricing mark-to-market gain |
|
|
0.33 |
|
|
|
0.16 |
|
|
|
0.32 |
|
|
|
0.58 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross after provisional pricing |
|
|
2.45 |
|
|
|
3.94 |
|
|
|
2.20 |
|
|
|
4.25 |
|
Less: Treatment and refining charges |
|
|
(0.28 |
) |
|
|
(0.37 |
) |
|
|
(0.26 |
) |
|
|
(0.32 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net |
|
$ |
2.17 |
|
|
$ |
3.57 |
|
|
$ |
1.94 |
|
|
$ |
3.93 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
48
The change in consolidated copper sales is due to:
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2009 vs. 2008 |
|
|
2009 vs. 2008 |
|
Increase in consolidated pounds sold |
|
$ |
213 |
|
|
$ |
187 |
|
Decrease in average realized copper price |
|
|
(157 |
) |
|
|
(412 |
) |
Increase in treatment and refining charges |
|
|
(10 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
46 |
|
|
$ |
(225 |
) |
|
|
|
|
|
|
|
The following is a summary of net gold and copper sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
Gold |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nevada |
|
$ |
372 |
|
|
$ |
495 |
|
|
$ |
840 |
|
|
$ |
986 |
|
La Herradura |
|
|
29 |
|
|
|
21 |
|
|
|
52 |
|
|
|
45 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
401 |
|
|
|
516 |
|
|
|
892 |
|
|
|
1,031 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
South America: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yanacocha |
|
|
489 |
|
|
|
388 |
|
|
|
916 |
|
|
|
887 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia Pacific: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jundee |
|
|
102 |
|
|
|
101 |
|
|
|
190 |
|
|
|
188 |
|
Tanami |
|
|
81 |
|
|
|
85 |
|
|
|
159 |
|
|
|
174 |
|
Kalgoorlie |
|
|
66 |
|
|
|
55 |
|
|
|
132 |
|
|
|
120 |
|
Waihi |
|
|
14 |
|
|
|
31 |
|
|
|
51 |
|
|
|
60 |
|
Batu Hijau |
|
|
98 |
|
|
|
36 |
|
|
|
157 |
|
|
|
148 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
361 |
|
|
|
308 |
|
|
|
689 |
|
|
|
690 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Africa: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ahafo |
|
|
122 |
|
|
|
107 |
|
|
|
251 |
|
|
|
204 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and other |
|
|
|
|
|
|
1 |
|
|
|
|
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,373 |
|
|
$ |
1,320 |
|
|
$ |
2,748 |
|
|
$ |
2,813 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Copper |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia Pacific: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Batu Hijau |
|
$ |
229 |
|
|
$ |
183 |
|
|
$ |
390 |
|
|
$ |
615 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs applicable to sales decreased in the second quarter and first half of 2009 compared to
the second quarter and first half of 2008, as detailed in the table below. The decrease in Costs
applicable to sales in the second quarter of 2009 compared to the second quarter of 2008 is
primarily due to lower waste tons mined, lower diesel prices and favorable U.S. dollar exchange
rates, partially offset by higher sales volumes and lower by-product credits. The decrease in Costs
applicable to sales in the first half of 2009 compared to the first half of 2008 is primarily due
to lower waste tons mined, lower diesel prices, lower gold sales volume and favorable U.S. dollar
exchange rates, partially offset by higher copper sales volume and lower by-product credits. For a
complete discussion regarding variations in operations, see Results of Consolidated Operations
below.
Amortization expense decreased for the second quarter of 2009 compared to the second quarter
of 2008 and increased for the first half of 2009 compared to the first half of 2008, as detailed in
the table below. We expect 2009 Amortization expense to be approximately $740 to $780.
49
The following is a summary of Costs applicable to sales and Amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs Applicable to Sales |
|
|
Amortization |
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
June 30, |
|
|
June 30, |
|
|
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
Gold |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nevada |
|
$ |
228 |
|
|
$ |
238 |
|
|
$ |
491 |
|
|
$ |
453 |
|
|
$ |
53 |
|
|
$ |
60 |
|
|
$ |
114 |
|
|
$ |
110 |
|
Hope Bay |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3 |
|
|
|
|
|
|
|
6 |
|
|
|
|
|
La Herradura |
|
|
12 |
|
|
|
11 |
|
|
|
22 |
|
|
|
18 |
|
|
|
3 |
|
|
|
2 |
|
|
|
5 |
|
|
|
4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
240 |
|
|
|
249 |
|
|
|
513 |
|
|
|
471 |
|
|
|
59 |
|
|
|
62 |
|
|
|
125 |
|
|
|
114 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
South America: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yanacocha |
|
|
173 |
|
|
|
161 |
|
|
|
325 |
|
|
|
329 |
|
|
|
44 |
|
|
|
44 |
|
|
|
85 |
|
|
|
88 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia Pacific: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jundee |
|
|
36 |
|
|
|
44 |
|
|
|
70 |
|
|
|
82 |
|
|
|
12 |
|
|
|
10 |
|
|
|
21 |
|
|
|
17 |
|
Tanami |
|
|
53 |
|
|
|
57 |
|
|
|
101 |
|
|
|
107 |
|
|
|
11 |
|
|
|
9 |
|
|
|
22 |
|
|
|
17 |
|
Kalgoorlie |
|
|
43 |
|
|
|
54 |
|
|
|
91 |
|
|
|
108 |
|
|
|
3 |
|
|
|
3 |
|
|
|
6 |
|
|
|
7 |
|
Waihi |
|
|
9 |
|
|
|
15 |
|
|
|
24 |
|
|
|
29 |
|
|
|
4 |
|
|
|
9 |
|
|
|
13 |
|
|
|
15 |
|
Batu Hijau |
|
|
24 |
|
|
|
19 |
|
|
|
51 |
|
|
|
56 |
|
|
|
6 |
|
|
|
3 |
|
|
|
13 |
|
|
|
11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
165 |
|
|
|
189 |
|
|
|
337 |
|
|
|
382 |
|
|
|
36 |
|
|
|
34 |
|
|
|
75 |
|
|
|
67 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Africa: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ahafo |
|
|
57 |
|
|
|
46 |
|
|
|
114 |
|
|
|
95 |
|
|
|
16 |
|
|
|
18 |
|
|
|
34 |
|
|
|
31 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
635 |
|
|
|
645 |
|
|
|
1,289 |
|
|
|
1,277 |
|
|
|
155 |
|
|
|
158 |
|
|
|
319 |
|
|
|
300 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Copper |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia Pacific: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Batu Hijau |
|
|
61 |
|
|
|
104 |
|
|
|
146 |
|
|
|
254 |
|
|
|
16 |
|
|
|
20 |
|
|
|
37 |
|
|
|
51 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia Pacific |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 |
|
|
|
1 |
|
|
|
2 |
|
Corporate and Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5 |
|
|
|
4 |
|
|
|
10 |
|
|
|
9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5 |
|
|
|
5 |
|
|
|
11 |
|
|
|
11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
696 |
|
|
$ |
749 |
|
|
$ |
1,435 |
|
|
$ |
1,531 |
|
|
$ |
176 |
|
|
$ |
183 |
|
|
$ |
367 |
|
|
$ |
362 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exploration expense decreased for the second quarter and first half of 2009 compared to the
second quarter and first half of 2008 due to a reduced drilling program related to a more selective
and strategic exploration program. We expect 2009 Exploration expense to be approximately $165 to
$175.
Advanced projects, research and development expense for the second quarter and first half of
2009 and 2008 is summarized as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
Hope Bay |
|
$ |
11 |
|
|
$ |
9 |
|
|
$ |
16 |
|
|
$ |
13 |
|
Boddington |
|
|
10 |
|
|
|
1 |
|
|
|
13 |
|
|
|
2 |
|
Technical and project services |
|
|
7 |
|
|
|
6 |
|
|
|
12 |
|
|
|
10 |
|
Nevada underground |
|
|
3 |
|
|
|
|
|
|
|
8 |
|
|
|
|
|
Corporate |
|
|
3 |
|
|
|
4 |
|
|
|
7 |
|
|
|
7 |
|
Tanami/Callie Deeps |
|
|
1 |
|
|
|
1 |
|
|
|
3 |
|
|
|
1 |
|
Akyem |
|
|
2 |
|
|
|
1 |
|
|
|
3 |
|
|
|
3 |
|
Fort a la Corne JV |
|
|
|
|
|
|
6 |
|
|
|
1 |
|
|
|
13 |
|
Other |
|
|
5 |
|
|
|
11 |
|
|
|
10 |
|
|
|
20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
42 |
|
|
$ |
39 |
|
|
$ |
73 |
|
|
$ |
69 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
We expect 2009 Advanced projects, research and development expenses to be approximately $140
to $160.
General and administrative expenses increased by $3 and $13, respectively, for the second
quarter and first half of 2009 compared to the second quarter and first half of 2008, due to higher
compensation, benefits and consulting fees. We expect 2009 General and administrative expenses to
be approximately $150 to $160.
50
Other expense, net for the first quarter of 2009 and 2008 is summarized as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
Boddington acquisition costs |
|
$ |
59 |
|
|
$ |
|
|
|
$ |
67 |
|
|
$ |
|
|
Regional administration |
|
|
14 |
|
|
|
12 |
|
|
|
26 |
|
|
|
21 |
|
Community development |
|
|
11 |
|
|
|
18 |
|
|
|
21 |
|
|
|
32 |
|
Workforce reduction |
|
|
1 |
|
|
|
|
|
|
|
15 |
|
|
|
|
|
Peruvian royalty |
|
|
5 |
|
|
|
4 |
|
|
|
11 |
|
|
|
11 |
|
Western Australia power plant |
|
|
6 |
|
|
|
8 |
|
|
|
9 |
|
|
|
13 |
|
Batu Hijau divestiture |
|
|
1 |
|
|
|
2 |
|
|
|
6 |
|
|
|
5 |
|
World Gold Council dues |
|
|
3 |
|
|
|
2 |
|
|
|
6 |
|
|
|
5 |
|
Accretion, non-operating |
|
|
3 |
|
|
|
3 |
|
|
|
6 |
|
|
|
5 |
|
Pension settlement loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11 |
|
Reclamation estimate revisions |
|
|
|
|
|
|
59 |
|
|
|
|
|
|
|
61 |
|
Other |
|
|
13 |
|
|
|
10 |
|
|
|
25 |
|
|
|
16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
116 |
|
|
$ |
118 |
|
|
$ |
192 |
|
|
$ |
180 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In connection with the acquisition of the remaining interest in Boddington, we incurred costs
of $67, including Australian stamp duties, for the six months ended June 30, 2009. Community
development and regional administration expenses relate to our social responsibility, external and
government relations, and regional office costs which are not a direct cost of mine production.
Workforce reduction expense includes costs related to global workforce reduction that impacted
approximately 3% of our world wide workforce.
Other income, net for the first quarter of 2009 and 2008 is summarized as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
Canadian Oil Sands Trust income |
|
$ |
5 |
|
|
$ |
31 |
|
|
$ |
9 |
|
|
$ |
55 |
|
Interest income |
|
|
6 |
|
|
|
7 |
|
|
|
9 |
|
|
|
17 |
|
Gain on sale of investments, net |
|
|
|
|
|
|
10 |
|
|
|
|
|
|
|
10 |
|
Income from development projects, net |
|
|
|
|
|
|
9 |
|
|
|
|
|
|
|
9 |
|
Foreign currency exchange losses, net |
|
|
1 |
|
|
|
(7 |
) |
|
|
(2 |
) |
|
|
(13 |
) |
(Loss) gain on ineffective portion of derivative instruments, net |
|
|
(3 |
) |
|
|
(1 |
) |
|
|
(4 |
) |
|
|
2 |
|
Impairment of marketable securities |
|
|
|
|
|
|
(34 |
) |
|
|
(6 |
) |
|
|
(56 |
) |
Other |
|
|
|
|
|
|
4 |
|
|
|
12 |
|
|
|
10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
9 |
|
|
$ |
19 |
|
|
$ |
18 |
|
|
$ |
34 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Canadian Oil Sands Trust income decreased $27 and $46 in the second quarter and first half of
2009, respectively, compared to the second quarter and first half of 2008 due to reduced
distributions related to a significant decrease in oil prices. During the first half of 2009, we
recognized impairments of marketable securities of $2 for Shore Gold, Inc. and $4 for other
marketable securities. During the second quarter of 2008, we recognized impairments of marketable
securities of $23 for Shore Gold Inc. and $11 for other marketable securities, resulting in total
impairments of $32 for Shore Gold Inc., $13 for Gabriel Resources Ltd. and $11 for other marketable
securities for the first half of 2008.
Interest expense, net decreased by $12 for the second quarter of 2009 compared to the second
quarter of 2008 and decreased $8 for the first half of 2009 compared to the first half of 2008
mainly due to higher capitalized interest, partially offset by additional interest on the
convertible senior notes. We expect 2009 Interest expense, net to be approximately $100 to $110.
Income tax expense during the second quarter of 2009 was $136 compared to a benefit of $42
during the second quarter of 2008, and $241 for the first half of 2009 compared to $187 for the
first half of 2008. The effective tax rate for the second quarter of 2009 was 30% compared to a 14%
benefit for the second quarter of 2008, and 29% for the first half of 2009 compared to 17% for the
first half of 2008. The 44% increase from the 2008 second quarter and 12% increase from the first
half of 2008 tax rates primarily relates to the reduction in income taxes in 2008 realized from the
conversion of one of the Companys non-US subsidiaries to a partnership for U.S. income tax
purposes which gave rise to a significant capital loss allowing the Company to recover income taxes
paid in prior years, offset by an increase in liabilities for uncertain tax positions. The
effective tax rates in the second quarter of 2009 and 2008 are different from the United States
statutory rate of 35% primarily due to U.S. percentage depletion. For a complete discussion of the
factors that influence our effective tax rate, see Managements Discussion and Analysis of Results
of Operations and Financial Condition in Newmonts Annual Report on Form 10-K for the year ended
December 31, 2008, filed February 19, 2009. We expect the 2009 full year tax rate to be
approximately 27% to 31%, assuming a gold price of $925 per ounce.
51
Net income attributable to Noncontrolling interests increased $76 in the second quarter of
2009 compared to the second quarter of 2008 as a result of increased earnings at Yanacocha and Batu
Hijau, and decreased $28 in the first half of 2009 compared to the first half of 2008, as a result
of lower earnings at Batu Hijau.
(Loss) income from discontinued operations was a follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
Sales gold, net |
|
$ |
16 |
|
|
$ |
19 |
|
|
$ |
32 |
|
|
$ |
37 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations |
|
$ |
1 |
|
|
$ |
7 |
|
|
$ |
1 |
|
|
$ |
12 |
|
Loss on impairment |
|
|
(44 |
) |
|
|
|
|
|
|
(44 |
) |
|
|
|
|
(Loss) gain on sale of royalty portfolio |
|
|
|
|
|
|
(2 |
) |
|
|
|
|
|
|
5 |
|
(Loss) gain on sale of Pajingo assets |
|
|
|
|
|
|
(1 |
) |
|
|
|
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax (loss) income |
|
|
(43 |
) |
|
|
4 |
|
|
|
(43 |
) |
|
|
18 |
|
Income tax benefit (expense) |
|
|
29 |
|
|
|
(2 |
) |
|
|
29 |
|
|
|
(8 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from discontinued operations |
|
$ |
(14 |
) |
|
$ |
2 |
|
|
$ |
(14 |
) |
|
$ |
10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations include our royalty portfolio and Pajingo operations, both sold in
December 2007, as well as the Kori Kollo operation in Bolivia, which was reclassified to
discontinued operations during the second quarter of 2009.
Results of Consolidated Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold Ounces or |
|
|
Costs Applicable to |
|
|
|
|
|
|
Copper Pounds Sold(1) |
|
|
Sales(3) |
|
|
Amortization |
|
|
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
|
|
(ounces in thousands) |
|
|
($ per ounce) |
|
|
($ per ounce) |
|
Three Months Ended June 30, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America |
|
|
446 |
|
|
|
579 |
|
|
$ |
538 |
|
|
$ |
429 |
|
|
$ |
124 |
|
|
$ |
107 |
|
South America (2) |
|
|
534 |
|
|
|
432 |
|
|
|
323 |
|
|
|
374 |
|
|
|
82 |
|
|
|
102 |
|
Asia Pacific (2) |
|
|
390 |
|
|
|
338 |
|
|
|
426 |
|
|
|
560 |
|
|
|
95 |
|
|
|
102 |
|
Africa |
|
|
132 |
|
|
|
134 |
|
|
|
428 |
|
|
|
390 |
|
|
|
119 |
|
|
|
147 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total/Weighted-Average |
|
|
1,502 |
|
|
|
1,483 |
|
|
$ |
423 |
|
|
$ |
439 |
|
|
$ |
101 |
|
|
$ |
108 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(pounds in millions) |
|
($ per pound) |
|
($ per pound) |
Copper |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia Pacific (3) |
|
|
105 |
|
|
|
51 |
|
|
$ |
0.58 |
|
|
$ |
2.02 |
|
|
$ |
0.15 |
|
|
$ |
0.38 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold Ounces or |
|
|
Costs Applicable to |
|
|
|
|
|
|
Copper Pounds Sold(1) |
|
|
Sales(3) |
|
|
Amortization |
|
|
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
|
|
(ounces in thousands) |
|
|
($ per ounce) |
|
|
($ per ounce) |
|
Six Months Ended June 30, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America |
|
|
989 |
|
|
|
1,129 |
|
|
$ |
519 |
|
|
$ |
417 |
|
|
$ |
120 |
|
|
$ |
101 |
|
South America (2) |
|
|
1,004 |
|
|
|
972 |
|
|
|
324 |
|
|
|
339 |
|
|
|
84 |
|
|
|
91 |
|
Asia Pacific (2) |
|
|
750 |
|
|
|
744 |
|
|
|
450 |
|
|
|
514 |
|
|
|
101 |
|
|
|
91 |
|
Africa |
|
|
276 |
|
|
|
239 |
|
|
|
413 |
|
|
|
425 |
|
|
|
123 |
|
|
|
138 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total/Weighted-Average |
|
|
3,019 |
|
|
|
3,084 |
|
|
$ |
427 |
|
|
$ |
416 |
|
|
$ |
104 |
|
|
$ |
98 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(pounds in millions) |
|
($ per pound) |
|
($ per pound) |
Copper |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia Pacific (3) |
|
|
201 |
|
|
|
157 |
|
|
$ |
0.73 |
|
|
$ |
1.62 |
|
|
$ |
0.19 |
|
|
$ |
0.33 |
|
|
|
|
(1) |
|
Consolidated gold ounces sold includes incremental start-up ounces of 1, in North
America, for both the three and six months ended June 30, 2009 and 16 and 17, primarily in
Africa, for the three and six months ended June 30, 2008. Incremental start-up sales includes
the removal and production of de minimis saleable materials during development and is recorded
as Other income, net of incremental mining and processing costs. |
|
(2) |
|
Consolidated gold ounces and copper pounds sold includes noncontrolling interests
share for Yanacocha and Batu Hijau. |
|
(3) |
|
Excludes Amortization and Accretion. |
Consolidated gold ounces sold increased 1% in the second quarter of 2009 from 2008, primarily
due to higher production from South America and Asia Pacific, mostly offset by lower production
from North America. Consolidated copper pounds sold more than doubled in the second quarter of 2009
from 2008 due to higher production at Batu Hijau.
52
Costs applicable to sales per consolidated gold ounce sold decreased 4% in the second quarter
of 2009 from 2008, due to lower waste mining, higher production and lower diesel prices, partially
offset by lower by-product credits, higher royalties and a higher allocation of costs to gold due
to lower copper prices at Batu Hijau. Consolidated Costs applicable to sales decreased by $12 per
ounce, net of hedges, due to the weakening of the Australian dollar in the second quarter of 2009
compared to 2008. Costs applicable to sales per consolidated copper pound decreased 71% in the
second quarter of 2009 from 2008, primarily due to lower waste mining, higher production, lower
diesel prices and a lower allocation of costs to copper due to changes in realized metal prices.
Consolidated gold ounces sold decreased 2% in the first half of 2009 from 2008, primarily due
to lower production from North America, mostly offset by higher production from South America and
Africa. Consolidated copper pounds sold increased 28% in the first half of 2009 from 2008 due to
higher production at Batu Hijau.
Costs applicable to sales per consolidated gold ounce sold increased 3% in the first half of
2009 from 2008, due to lower production, lower by-product credits, higher royalties and a higher
allocation of costs to gold due to lower copper prices at Batu Hijau, partially offset by lower
waste mining and lower diesel prices. Consolidated Costs applicable to sales decreased by $13 per
ounce, net of hedges, due to the weakening of the Australian dollar in the first half of 2009
compared to 2008. Costs applicable to sales per consolidated copper pound decreased 55% in the
first half of 2009 from 2008, primarily due to lower waste mining, higher production, lower diesel
prices and a lower allocation of costs to copper due to changes in realized metal prices.
We expect consolidated gold sales of between 6.35 and 6.7 million ounces at Costs applicable
to sales of between $400 and $440 per ounce. Our Costs applicable to sales forecast for 2009 now
assumes an oil price of $70 per barrel and an Australian dollar exchange rate of 0.75 for the
remainder of the year. Our Costs applicable to sales for the year are expected to change by
approximately $3 per ounce for every $10 change in the oil price and
by approximately $3 per ounce
for every $0.10 change in the Australian dollar exchange rate. We are actively hedging a portion of
our North America diesel and Australian dollar cost exposure.
We continue to expect consolidated copper sales of approximately 460 to 510 million pounds in
2009 at Costs applicable to sales of approximately $0.50 to $0.65 per pound.
North America Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs Applicable to |
|
|
|
|
|
|
Gold Ounces Sold(1) |
|
|
Sales(2) |
|
|
Amortization |
|
|
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
|
|
(in thousands) |
|
|
($ per ounce) |
|
|
($ per ounce) |
|
Three Months Ended June 30, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nevada |
|
|
415 |
|
|
|
554 |
|
|
$ |
549 |
|
|
$ |
430 |
|
|
$ |
126 |
|
|
$ |
108 |
|
La Herradura (44% owned) |
|
|
31 |
|
|
|
25 |
|
|
|
398 |
|
|
|
388 |
|
|
|
91 |
|
|
|
85 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
446 |
|
|
|
579 |
|
|
$ |
538 |
|
|
$ |
429 |
|
|
$ |
124 |
|
|
$ |
107 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs Applicable to |
|
|
|
|
|
|
Gold Ounces Sold(1) |
|
|
Sales(2) |
|
|
Amortization |
|
|
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
|
|
(in thousands) |
|
|
($ per ounce) |
|
|
($ per ounce) |
|
Six Months Ended June 30, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nevada |
|
|
933 |
|
|
|
1,080 |
|
|
$ |
527 |
|
|
$ |
420 |
|
|
$ |
122 |
|
|
$ |
102 |
|
La Herradura (44% owned) |
|
|
56 |
|
|
|
49 |
|
|
|
393 |
|
|
|
357 |
|
|
|
90 |
|
|
|
84 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
989 |
|
|
|
1,129 |
|
|
$ |
519 |
|
|
$ |
417 |
|
|
$ |
120 |
|
|
$ |
101 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Includes incremental start-up ounces of 1 in Nevada for both the three and six
months ended June 30, 2009 and the six months ended June 30, 2008. |
|
(2) |
|
Excludes Amortization and Accretion. |
Nevada, USA. Gold ounces sold in Nevada decreased 25% in the second quarter of 2009 from 2008
due to lower leach tons placed and lower throughput and mill ore grade. Surface ore mined in the
second quarter of 2009 decreased to 6.2 million tons, down from 9.2 million tons in the previous
year quarter primarily due to mine sequencing at Gold Quarry. Underground ore mined in the second
quarter of 2009 increased to 587,000 tons, up from 575,000 tons in the second quarter of 2008. This
increase was due to 23% higher tons at Chukar and remnant mining at Carlin East, partially offset
by 15% lower tons at Midas due to ground failure which curtailed production in March and April
2009. Underground ore grade decreased 7% in the second quarter of 2009 from 2008 primarily due to
lower grade at Leeville. Second quarter ore milled was 5.9 million tons in 2009 compared to 6.1
million tons in 2008. Ore placed on leach pads in the second quarter
of 2009 decreased 69% from the second quarter of 2008 to 1.7 million tons due mainly to mine
sequencing at Gold Quarry and equipment availability.
53
Costs applicable to sales per ounce increased to $549 in the second quarter of 2009 from $430
per ounce in the second quarter of 2008 due to lower production and by-product credits, partially
offset by lower diesel prices.
Gold ounces sold decreased 14% in the first half of 2009 from 2008 due to lower leach tons
placed and lower mill ore grade, partially offset by higher mill recovery rates. Surface ore mined
in the first half of 2009 decreased to 12.6 million tons, down from 17.6 million tons in the first
half of 2008 primarily due to mine sequencing at Gold Quarry. Underground ore mined in the first
half of 2009 increased to 1.2 million tons, up from 1.1 million tons in the first half of 2008.
This increase was due to 14% higher tons at Leeville, 15% higher tons at Chukar and remnant mining
at Carlin East, partially offset by 12% lower tons at Midas due to ground failure which curtailed
production in March and April 2009. Underground ore grade decreased 9% in the first half of 2009
from 2008 primarily due to lower grade at Leeville. Ore milled in the first half of 2009 was 12.0
million tons compared to 12.3 million tons in the first half of 2008. Ore placed on leach pads in
the first half of 2009 decreased 58% from the first half of 2008 to 4.3 million tons due mainly to
mine sequencing at Gold Quarry and equipment availability.
Costs applicable to sales per ounce increased to $527 in the first half of 2009 from $420 per
ounce in the first half of 2008 due to lower production and by-product credits, partially offset by
lower diesel prices.
La Herradura, Mexico. Gold ounces sold increased 24% in second quarter of 2009 from 2008,
primarily due to a 16% increase in tons placed on the leach pad, partially offset by a 5% decrease
in grade. Costs applicable to sales increased 2% due to higher workers participation costs,
partially offset by lower diesel costs.
Gold ounces sold increased 13% in first half of 2009 from 2008, primarily due to a 20%
increase in tons placed on the leach pad, partially offset by a 4% decrease in grade. Costs
applicable to sales increased 10% due to higher workers participation costs, partially offset by
lower fuel costs.
We expect gold sales in North America of approximately 2.0 to 2.1 million ounces at Costs
applicable to sales of approximately $535 to $575 per ounce in 2009.
South America Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs Applicable to |
|
|
|
|
|
|
Gold Ounces Sold(1) |
|
|
Sales(2) |
|
|
Amortization |
|
|
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
|
|
(in thousands) |
|
|
($ per ounce) |
|
|
($ per ounce) |
|
Three Months Ended June 30, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yanacocha (51.35% owned) |
|
|
534 |
|
|
|
432 |
|
|
$ |
323 |
|
|
$ |
374 |
|
|
$ |
82 |
|
|
$ |
102 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs Applicable to |
|
|
|
|
|
|
Gold Ounces Sold(1) |
|
|
Sales(2) |
|
|
Amortization |
|
|
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
|
|
(in thousands) |
|
|
($ per ounce) |
|
|
($ per ounce) |
|
Six Months Ended June 30, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yanacocha (51.35% owned) |
|
|
1,004 |
|
|
|
972 |
|
|
$ |
324 |
|
|
$ |
339 |
|
|
$ |
84 |
|
|
$ |
91 |
|
|
|
|
(1) |
|
Consolidated gold ounces sold includes noncontrolling interests share. |
|
(2) |
|
Excludes Amortization and Accretion. |
Yanacocha, Peru. Gold sales at Yanacocha increased 24% in the second quarter of 2009 from the
second quarter of 2008 due to higher leach tons placed, higher mill production and a reduction of
finished goods inventory. Ore tons mined increased 77% in the second quarter of 2009 compared to
the second quarter of 2008 due to mine sequencing. During the same periods, the amount of waste
material mined decreased to 6.7 million tons from 26.6 million tons. Ore placed on the leach pads
increased to 41.4 million tons in the second quarter of 2009 from 23.7 million tons in the second
quarter of 2008 and leach ore grade increased 1% from 0.015 to 0.016 ounces per ton during the same
period. Mill production in the second quarter of 2009 was 136,000 ounces compared to 77,000 ounces
in the second quarter of 2008 due to higher mill ore grade and mill throughput due to the
commencement of mill production in the second quarter of 2008.
54
Costs applicable to sales decreased in the second quarter of 2009 to $323 per ounce from $374
per ounce in the second quarter of 2008, primarily due to lower waste mining, higher production and
lower diesel prices, partially offset by higher workers participation costs and lower by-product
credits.
Gold sales at Yanacocha increased 3% in the first half of 2009 from the first half of 2008 due
to a full six months of mill production, partially offset by lower leach recoveries. Ore tons mined
increased 39% in the first half of 2009 compared to the first half of 2008 due to mine sequencing.
During the same periods, the amount of waste material mined decreased to 22.1 million tons from
48.3 million tons. Ore placed on the leach pads increased to 72.1 million tons in the first half of
2009 from 54.1 million tons in the first half of 2008 and leach ore grade increased 13% from 0.016
to 0.018 ounces per ton during the same periods. Leach production was 127,000 ounces lower in the
first half of 2009 compared to the first half of 2008 due to the timing of leach ore recoveries.
Mill production in the first half of 2009 was 279,000 ounces compared to 77,000 ounces in the first
half of 2008 due to the commencement of mill production in the second quarter of 2008.
Costs applicable to sales decreased in the first half of 2009 to $324 per ounce from $339 per
ounce in the first half of 2008 primarily due to lower waste mining, higher production and lower
diesel prices, partially offset by higher workers participation costs and lower by-product credits.
We expect consolidated gold sales for South America of approximately 1.95 to 2.05 million
ounces at Costs applicable to sales of approximately $300 to $320 per ounce.
Asia Pacific Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold Ounces Sold or |
|
|
Costs Applicable to |
|
|
|
|
|
|
Copper Pounds Sold |
|
|
Sales(1) |
|
|
Amortization |
|
|
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
|
|
(ounces in thousands) |
|
|
($ per ounce) |
|
|
($ per ounce) |
|
Three Months Ended June 30, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jundee |
|
|
108 |
|
|
|
109 |
|
|
$ |
338 |
|
|
$ |
401 |
|
|
$ |
110 |
|
|
$ |
84 |
|
Tanami |
|
|
88 |
|
|
|
95 |
|
|
|
599 |
|
|
|
605 |
|
|
|
127 |
|
|
|
102 |
|
Kalgoorlie (50% owned) |
|
|
71 |
|
|
|
63 |
|
|
|
607 |
|
|
|
860 |
|
|
|
39 |
|
|
|
56 |
|
Waihi |
|
|
16 |
|
|
|
34 |
|
|
|
582 |
|
|
|
441 |
|
|
|
287 |
|
|
|
248 |
|
Batu Hijau (45% owned) (2) |
|
|
107 |
|
|
|
37 |
|
|
|
229 |
|
|
|
518 |
|
|
|
62 |
|
|
|
99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
390 |
|
|
|
338 |
|
|
$ |
426 |
|
|
$ |
560 |
|
|
$ |
95 |
|
|
$ |
102 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(pounds in millions) |
|
($ per pound) |
|
($ per pound) |
Three Months Ended June 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Copper |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Batu Hijau (45% owned) (2) |
|
|
105 |
|
|
|
51 |
|
|
$ |
0.58 |
|
|
$ |
2.02 |
|
|
$ |
0.15 |
|
|
$ |
0.38 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold Ounces Sold or |
|
|
Costs Applicable to |
|
|
|
|
|
|
Copper Pounds Sold |
|
|
Sales(1) |
|
|
Amortization |
|
|
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
|
|
(ounces in thousands) |
|
|
($ per ounce) |
|
|
($ per ounce) |
|
Six Months Ended June 30, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jundee |
|
|
202 |
|
|
|
200 |
|
|
$ |
345 |
|
|
$ |
410 |
|
|
$ |
104 |
|
|
$ |
83 |
|
Tanami |
|
|
173 |
|
|
|
190 |
|
|
|
586 |
|
|
|
565 |
|
|
|
125 |
|
|
|
91 |
|
Kalgoorlie (50% owned) |
|
|
146 |
|
|
|
132 |
|
|
|
625 |
|
|
|
817 |
|
|
|
43 |
|
|
|
57 |
|
Waihi |
|
|
56 |
|
|
|
65 |
|
|
|
426 |
|
|
|
448 |
|
|
|
241 |
|
|
|
226 |
|
Batu Hijau (45% owned) (2) |
|
|
173 |
|
|
|
158 |
|
|
|
297 |
|
|
|
358 |
|
|
|
78 |
|
|
|
72 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
750 |
|
|
|
745 |
|
|
$ |
450 |
|
|
$ |
514 |
|
|
$ |
101 |
|
|
$ |
91 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(pounds in millions) |
|
($ per pound) |
|
($ per pound) |
Six Months Ended June 30,
Copper |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Batu Hijau (45% owned) (2) |
|
|
201 |
|
|
|
157 |
|
|
$ |
0.73 |
|
|
$ |
1.62 |
|
|
$ |
0.19 |
|
|
$ |
0.33 |
|
|
|
|
(1) |
|
Excludes Amortization and Accretion. |
|
(2) |
|
Consolidated gold ounces or copper pounds sold includes noncontrolling interests
share. |
Jundee, Australia. Gold ounces sold in the second quarter of 2009 were essentially the same
as 2008, as lower mill ore grade was offset by higher throughput and a reduction in finished goods
inventory. Costs applicable to sales per
ounce decreased 16%, primarily due to lower diesel prices and the weakening of the Australian
dollar, partially offset by lower production.
55
Gold ounces sold increased 1% in the first half of 2009 compared to 2008, due to increased
mill throughput, partially offset by lower mill ore grade. Costs applicable to sales per ounce
decreased 16% primarily due to lower diesel prices and the weakening of the Australian dollar.
Tanami, Australia. Gold ounces sold decreased 7% in the second quarter of 2009 compared to
2008, primarily due to lower mill ore grade, partially offset by higher mill throughput. Costs
applicable to sales per ounce decreased 1% primarily due to lower diesel prices and the weakening
of the Australian dollar, partially offset by higher royalty costs.
Gold ounces sold decreased 9% in the first half of 2009 compared to 2008 due to lower mill ore
grade and throughput. Costs applicable to sales per ounce increased 4% due to lower production and
higher royalty costs, partially offset by lower diesel prices and the weakening of the Australian
dollar.
Kalgoorlie, Australia. Gold ounces sold increased 13% in the second quarter of 2009 compared
to 2008 due to higher mill ore grade, throughput and recovery. Costs applicable to sales per ounce
decreased 29% due to higher production, lower diesel prices and the weakening of the Australian
dollar.
Gold ounces sold increased 11% in the first half of 2009 compared to 2008 due to higher mill
ore grade, throughput and recovery. Costs applicable to sales per ounce decreased 24% due to higher
production, lower diesel prices and the weakening of the Australian dollar.
Waihi, New Zealand. Gold ounces sold decreased 53% in the second quarter of 2009 from 2008
due to an electrical fire at the mill in May which suspended milling activities. Required repairs
are expected to be completed in August allowing milling operations to resume. Costs applicable to
sales per ounce were 32% higher due to lower production, partially offset by the weakening of the
New Zealand dollar.
Gold ounces sold decreased 14% in the first half of 2009 from 2008 due to the suspension of
milling operations. Costs applicable to sales per ounce were 5% lower primarily due to lower diesel
prices and higher by-product credits and the weakening of the New Zealand dollar, partially offset
by lower production and higher royalty costs.
Boddington, Australia. Development of the project was approximately 98% complete, as of
June 30, 2009. The Company now expects total project costs, excluding capitalized interest, of
between $2,800 and $2,900 on a 100% basis due to the later than expected start-up of milling
operations.
Batu Hijau, Indonesia. Consolidated copper and gold sales at Batu Hijau increased 106% and
189%, respectively, in the second quarter of 2009 from 2008 due to higher throughput, grade and
recoveries as a result of the mining sequence. The harder, lower grade stockpiled ore processed in
2008 resulted in significantly lower recoveries. During the second quarter of 2009, copper and gold
production increased by 105% and 240%, respectively.
Total Costs applicable to sales decreased by $37 in the second quarter of 2009 from 2008 due
to lower waste mining, lower diesel prices, lower labor costs and lower maintenance and parts
costs. Costs applicable to sales per pound of copper and per ounce of gold decreased 71% and 56%,
respectively, as a result of the higher production and lower costs. Costs applicable to sales per
pound of copper and per ounce of gold were also impacted by a higher allocation of costs to gold
due to the lower realized copper price.
Consolidated copper and gold sales at Batu Hijau increased 28% and 10%, respectively, in the
first half of 2009 from 2008 due to higher throughput, grade and recoveries as a result of
processing newly mined ore, partially offset by 2008 inventory sales. During the first half of
2009, copper and gold production increased by 49% and 57%, respectively.
Total Costs applicable to sales decreased by $115 in the first half of 2009 from 2008 due to
lower waste mining, lower diesel prices, lower labor costs and lower maintenance and parts costs
and mining more ore than processed material. Costs applicable to sales per pound of copper and per
ounce of gold decreased 55% and 17%, respectively, as a result of higher production and lower
costs. Costs applicable to sales per pound of copper and per ounce of gold were also impacted by a
higher allocation of costs to gold due to the lower realized copper price.
We expect gold sales for the Asia Pacific operations of approximately 1.9 to 2.1 million
ounces at Costs applicable to sales of approximately $435 to $475 per ounce in 2009, with
Boddington coming on-line in the second half of the year. We expect 2009 copper sales for the Asia
Pacific operations to be approximately 460 to 510 million pounds of copper at Costs
applicable to sales of approximately $0.50 to $0.65 per pound. Unfavorable changes in the
Australian dollar exchange rate could result in operating costs for the region outside of the
expected range for the full year, as a significant portion of costs are Australian dollar
denominated. Costs applicable to sales in Asia Pacific are expected to change by approximately $5
per ounce for every $0.10 move in the Australian dollar exchange rate.
56
We currently have a 45% ownership interest in the Batu Hijau mine, held through the Nusa
Tenggara Partnership (NTP) with an affiliate of Sumitomo Corporation of Japan. We have a 56.25%
interest in NTP and the Sumitomo affiliate holds the remaining 43.75%. NTP in turn owns 80% of P.T.
Newmont Nusa Tenggara (PTNNT), the Indonesian subsidiary that owns Batu Hijau. The remaining 20%
interest in PTNNT is owned by P.T. Pukuafu Indah (PTPI), an unrelated Indonesian company. We
identified NTP as a VIE as a result of certain capital structures and contractual relationships and
have fully consolidated NTP in the consolidated financial statements since January 1, 2004.
Under the Contract of Work issued to PTNNT by the Indonesian government, beginning in 2006 and
continuing through 2010, a portion of PTNNTs shares must be offered for sale to the Indonesian
government or its nominee, equal to the difference between the following percentages and the
percentage of shares already owned by the Indonesian government or Indonesian nationals (if such
number is positive): 23% by March 31, 2006; 30% by March 31, 2007; 37% by March 31, 2008; 44% by
March 31, 2009; and 51% by March 31, 2010. The price at which such interest must be offered for
sale to the Indonesian parties is the highest of the then-current replacement cost, the price at
which shares would be accepted for listing on the Indonesian Stock Exchange, or the fair market
value of such interest as a going concern, as agreed with the Indonesian government. In March 2008,
the Indonesian government and PTNNT each instituted an arbitration proceeding to resolve a dispute
concerning the divestiture of PTNNT shares. On March 31, 2009, the international arbitration panel
issued a final award resolving the claims asserted. For further information related to the dispute
and the international arbitration proceeding, including a description of the factual basis for the
claims, and a description of the arbitration decision, refer to Note 27, Commitments and
Contingencies. Pursuant to the arbitration decision and the terms of the Contract of Work, it is
possible that the ownership interest of NTP in PTNNT could be reduced to 49% or that subsequent
disputes may arise concerning the divestiture of shares.
The Company follows Financial Accounting Standards Board (FASB) Interpretation No. 46(R)
Consolidation of Variable Interest Entities (FIN 46(R)), which provides guidance on the
identification and reporting for entities over which control is achieved through means other than
voting rights. FIN 46(R) defines such entities as Variable Interest Entities (VIEs). Newmont
identified NTP, the partnership that owns an 80% interest in PTNNT, as a VIE due to certain capital
structures and contractual relationships. As a result of the Companys 56.25% ownership in NTP, the
Company consolidates Batu Hijau, and will continue to consolidate Batu Hijau, in its Consolidated
Financial Statements as long as the Company continues to be the primary beneficiary of NTP and NTP
controls PTNNT.
In addition, we have, through PTNNT, been in discussions to extend our forest use permit
(called a Pinjam Pakai) for over three years. In 2005, Indonesian governmental authorities
reviewed the contractual requirements for extension of the Pinjam Pakai and determined that PTNNT
met those requirements. This permit is a key requirement to continue to operate Batu Hijau
efficiently, in addition to the ultimate life of the mine and recoverability of reserves. However,
the permit extension has not been received as of the date of this report. The resulting delay has
adversely impacted Batu Hijau, and may adversely impact future operating and financial results,
including deferment or cancellation of future mine development and operations.
57
Africa Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs Applicable to |
|
|
|
|
|
|
Gold Ounces Sold(1) |
|
|
Sales(2) |
|
|
Amortization |
|
|
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
|
|
(in thousands) |
|
|
($ per ounce) |
|
|
($ per ounce) |
|
Three Months Ended June 30, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ahafo |
|
|
132 |
|
|
|
134 |
|
|
$ |
428 |
|
|
$ |
390 |
|
|
$ |
119 |
|
|
$ |
147 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs Applicable to |
|
|
|
|
|
|
Gold Ounces Sold(1) |
|
|
Sales(2) |
|
|
Amortization |
|
|
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
|
|
(in thousands) |
|
|
($ per ounce) |
|
|
($ per ounce) |
|
Six Months Ended June 30, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ahafo |
|
|
276 |
|
|
|
239 |
|
|
$ |
413 |
|
|
$ |
425 |
|
|
$ |
123 |
|
|
$ |
138 |
|
|
|
|
(1) |
|
Includes incremental start-up ounces of 16 for both the three and six months ended
June 30, 2008 related to development of the Awonsu pit. |
|
(2) |
|
Excludes Amortization and Accretion. |
Gold ounces sold at Ahafo decreased 1% in the second quarter of 2009 compared to 2008 due to
slightly lower mill recovery. Total tons mined increased to 15.2 million tons in the second quarter
of 2009 from 14.4 million tons in the second quarter of 2008.
Costs applicable to sales per ounce increased 10% in the second quarter of 2009 compared to
2008 due to less mined waste used in the construction of assets, higher labor, parts and
consumables costs, higher contracted services costs and higher power costs, partially offset by
lower diesel prices.
Gold ounces sold at Ahafo increased 15% in the first half of 2009 compared to 2008 due to
higher mill ore grade and a build in in-process inventory in 2008, partially offset by lower mill
throughput and recovery. Total tons mined increased to 30.9 million tons in the first half of 2009
from 28.0 million tons in the first half of 2008.
Costs applicable to sales per ounce decreased 3% in the first half of 2009 compared to 2008
due to higher gold sales and lower diesel prices, partially offset by less mined waste used in the
construction of assets, higher labor, contracted services, maintenance and power costs.
We continue to expect gold sales of approximately 500,000 to 525,000 ounces at Costs
applicable to sales of approximately $425 to $450 per ounce in 2009.
Foreign Currency Exchange Rates
Our foreign operations sell their gold and copper production based on U.S. dollar metal
prices. Approximately 23% and 28%, of our Costs applicable to sales were paid in local currencies
during the second quarter of 2009 and 2008, respectively. Approximately 22% and 28% of our Costs
applicable to sales were paid in local currencies during the first half of 2009 and 2008,
respectively. Variations in the local currency exchange rates in relation to the U.S. dollar at our
foreign mining operations decreased consolidated Costs applicable to sales per ounce by
approximately $16 during the second quarter of 2009 as compared to the second quarter of 2008 and
by approximately $18 during the first half of 2009 compared to the first half of 2008.
Liquidity and Capital Resources
Cash Provided from Operating Activities
Net cash provided from continuing operations was $886 for the first half of 2009 compared to
$971 for the first half of 2008 due to lower realized gold and copper prices, lower gold sales
volume partially offset by higher copper sales volume, lower Canadian Oil Sands Trust income,
discrete tax benefits in 2008 and Ahafo development start-up revenue in 2008, as discussed above in
Consolidated Financial Results, partially offset by income tax refunds received during the first
half of 2009.
58
Investing Activities
Net cash used in investing activities of continuing operations was $1,672 during the first
half of 2009 compared to $1,234 during the same period of 2008.
Additions to property, plant and mine development were as follows:
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
|
|
|
2009 |
|
|
2008 |
|
North America: |
|
|
|
|
|
|
|
|
Nevada |
|
$ |
111 |
|
|
$ |
140 |
|
Hope Bay |
|
|
3 |
|
|
|
30 |
|
La Herradura |
|
|
19 |
|
|
|
12 |
|
|
|
|
|
|
|
|
|
|
|
133 |
|
|
|
182 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
South America: |
|
|
|
|
|
|
|
|
Yanacocha |
|
|
62 |
|
|
|
81 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia Pacific: |
|
|
|
|
|
|
|
|
Boddington |
|
|
684 |
|
|
|
392 |
|
Jundee |
|
|
14 |
|
|
|
19 |
|
Tanami |
|
|
28 |
|
|
|
21 |
|
Kalgoorlie |
|
|
2 |
|
|
|
5 |
|
Other |
|
|
1 |
|
|
|
|
|
Waihi |
|
|
3 |
|
|
|
19 |
|
Batu Hijau |
|
|
23 |
|
|
|
54 |
|
|
|
|
|
|
|
|
|
|
|
755 |
|
|
|
510 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Africa: |
|
|
|
|
|
|
|
|
Ahafo |
|
|
23 |
|
|
|
60 |
|
Akyem |
|
|
1 |
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
24 |
|
|
|
61 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and Other |
|
|
8 |
|
|
|
6 |
|
|
|
|
|
|
|
|
Accrual basis |
|
|
982 |
|
|
|
840 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in accrual |
|
|
(72 |
) |
|
|
53 |
|
|
|
|
|
|
|
|
Cash basis |
|
$ |
910 |
|
|
$ |
893 |
|
|
|
|
|
|
|
|
Capital expenditures in North America for the first half of 2009 primarily related to
sustaining mine development at Nevada. Capital expenditures in South America primarily related to
the Conga project, dewatering projects and leach pad development at Yanacocha. The vast majority of
capital expenditures in Asia Pacific were for the Boddington project, (which includes 100% of
expenditures for 2009) with other sustaining capital expenditures for mine development at Australia
and equipment purchases at Batu Hijau. As of June 30, 2009, we have hedged 83% of our expected
remaining Australian dollar denominated capital expenditures for 2009 at an average rate of 0.79.
Capital expenditures in Africa primarily related to sustaining mine development at Ahafo. We now
expect to spend $1,500 to $1,700 on consolidated capital expenditures in 2009 resulting from the
later than expected start-up of Boddington, offset by lower capital expenditures throughout the
rest of the portfolio.
Capital expenditures in North America during the first half of 2008 were primarily related to
the completion of the power plant and sustaining mine development at Nevada. South America capital
expenditures were primarily related to construction of the gold mill, development of the Conga
project and leach pad expansions at Yanacocha. Capital expenditures in Asia Pacific largely
resulted from the continued construction of the Boddington project (66.67% ownership) and for
sustaining mine development and construction of a second tailings pipeline at Batu Hijau. Capital
expenditures in Africa were mainly as a result of mine equipment purchases, the development of
Ahafo North and the Awonsu and Amoma pits and sustaining development at Ahafo.
Investments in and proceeds from sale of marketable debt and equity securities. During the
first half of 2009 we recovered $5 primarily from the sale of asset backed commercial paper. During
the first half of 2008, we purchased marketable equity securities of Gabriel Resources for $11 and
other marketable securities for $6. In the first half of 2008, we received cash of $17 for the sale
of shares of marketable equity securities, realizing a gain of $10.
59
Acquisitions. In the first half of 2009, we paid $741 (net of $1 cash acquired) and paid $8
in acquisition costs to acquire the remaining 33.33% interest in Boddington. Consideration for the
acquisition also includes $240 payable in cash
and/or Newmont common stock, at our option, in December 2009 and a contingent royalty capped
at $100, equal to 50% of the average realized operating margin (Revenue less Costs applicable to
sales on a by-product basis), if any, exceeding $600 per ounce, payable on one-third of gold sales
from Boddington beginning in the second quarter of 2010. The completion of the acquisition in June
2009 brought Newmonts interest in this project to 100%. Additionally, we paid $11 for a mining
property near the La Herradura, Mexico operation in the first half of 2009. During the first half
of 2008, we paid $318 to acquire the remaining outstanding common shares of Miramar, resulting in
Miramar becoming a wholly-owned subsidiary. The total Miramar purchase price was $1,353.
Financing Activities
Net cash provided from financing activities of continuing operations was $868 and $191 during
the first half of 2009 and 2008, respectively.
Proceeds from and repayment of debt, net. During the first half of 2009, we received
proceeds from debt of $1,494: $504 net proceeds from the issuance of convertible senior notes due
in 2012, $54 from short-term borrowings in Batu Hijau, $10 under the Ahafo project facility and
$926 under our $2,000 revolving credit facility. In addition, we repaid $1,668 of debt: $43 for
Batu Hijau project financing scheduled debt repayments, $24 related to the sale-leaseback of the
refractory ore treatment plant (classified as a capital lease), $1,583 under our $2,000 revolving
credit facility and $18 on other credit facilities and other capital leases. At June 30, 2009 we
had $100 borrowed under our revolving credit facility. The revolving credit facility is also used
to secure the issuance of letters of credit totaling $345, primarily supporting reclamation
obligations (see Off-Balance Sheet Arrangements below).
Scheduled minimum debt repayments are $134 for the remainder of 2009, $157 in 2010, $334 in
2011, $697 in 2012, $116 in 2013 and $1,593 thereafter. We expect to be able to fund maturities of
debt from Net cash provided by operating activities, short-term investments, existing cash balances
and available credit facilities.
At June 30, 2009, we were in compliance with all required debt covenants and other
restrictions related to debt agreements.
Dividends paid to noncontrolling interests. We paid dividends of $112 and $147 to
noncontrolling interests in subsidiaries during the first half of 2009 and 2008, respectively.
Dividends paid to common stockholders. We declared regular quarterly dividends totaling
$0.20 per common share through each of the six months ended June 30, 2009 and June 30, 2008.
Additionally, Newmont Mining Corporation of Canada Limited, a subsidiary of the Company, declared
regular quarterly dividends on its exchangeable shares totaling C$0.2461 per share through June 30,
2009 and C$0.2022 through June 30, 2008. We paid dividends of $98 and $91 to common stockholders in
the first half of 2009 and 2008, respectively.
Proceeds from stock issuance. We received proceeds of $1,247 and $24 during the first half
of 2009 and 2008, respectively, from the issuance of common stock. In February 2009 we completed a
public offering of 34,500,000 shares of common stock at a price of $37 per share for net proceeds
of $1,234.
Discontinued Operations
Net operating cash provided by (used in) discontinued operations was $8 and $(107) in the
first half of 2009 and 2008, respectively. During the first half of 2008, we made tax payments of
$137 related to the royalty portfolio sale.
Net cash used in investing activities of discontinued operations was $nil and $10 in the first
half of 2009 and 2008, respectively. Cash used in investing activities of discontinued operations
in 2008 included payment of accrued costs related to the royalty portfolio sale ($11) and capital
expenditures at Kori Kollo ($4), partially offset by proceeds from the sale of Pajingo assets ($5).
Net cash used in financing activities of discontinued operations during the first half of 2009
and 2008 were for scheduled debt payments at Kori Kollo.
60
Off-Balance Sheet Arrangements
We have the following off-balance sheet arrangements: operating leases (as discussed in Note
30 to the Consolidated Financial Statements in our Annual Report on Form 10-K/A for the year ended
December 31, 2008, filed on June 8, 2009) and $851 of outstanding letters of credit, surety bonds
and bank guarantees. We also provide a contingent support line of credit to PT Newmont Nusa
Tenggara of which our pro-rata share is $11. We have sales agreements to sell copper concentrates
at market prices as follows, in thousands of tons:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2009 |
|
|
2010 |
|
|
2011 |
|
|
2012 |
|
|
2013 |
|
|
Thereafter |
|
Batu Hijau |
|
|
479 |
|
|
|
779 |
|
|
|
670 |
|
|
|
651 |
|
|
|
639 |
|
|
|
231 |
|
Boddington |
|
|
61 |
|
|
|
220 |
|
|
|
226 |
|
|
|
226 |
|
|
|
160 |
|
|
|
551 |
|
Nevada |
|
|
48 |
|
|
|
50 |
|
|
|
46 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
588 |
|
|
|
1,049 |
|
|
|
942 |
|
|
|
877 |
|
|
|
799 |
|
|
|
782 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Environmental
Our mining and exploration activities are subject to various federal and state laws and
regulations governing the protection of the environment. These laws and regulations are continually
changing and are generally becoming more restrictive. We conduct our operations so as to protect
the public health and environment and believe our operations are in compliance with applicable laws
and regulations in all material respects. We have made, and expect to make in the future,
expenditures to comply with such laws and regulations, but cannot predict the full amount of such
future expenditures. Estimated future reclamation costs are based principally on legal and
regulatory requirements. At June 30, 2009 and December 31, 2008, $619 and $594, respectively, were
accrued for reclamation costs relating to currently producing mineral properties.
In addition, we are involved in several matters concerning environmental obligations
associated with former mining activities. Generally, these matters concern developing and
implementing remediation plans at the various sites involved. We believe that the related
environmental obligations associated with these sites are similar in nature with respect to the
development of remediation plans, their risk profile and the compliance required to meet general
environmental standards. Based upon our best estimate of our liability for these matters, $157 and
$163 were accrued for such obligations at June 30, 2009 and December 31, 2008, respectively.
Depending upon the ultimate resolution of these matters, we believe that it is reasonably possible
that the liability for these matters could be as much as 131% greater or 8% lower than the amount
accrued at June 30, 2009. The amounts accrued for these matters are reviewed periodically based
upon facts and circumstances available at the time. Changes in estimates are charged to Other
expense, net in the period estimates are revised.
For more information on the Companys reclamation and remediation liabilities, see Notes 23
and 27 to the Consolidated Financial Statements.
During the first half of 2009 and 2008, capital expenditures were approximately $85 and $82,
respectively, to comply with environmental regulations. Ongoing costs to comply with environmental
regulations have not been a significant component of operating costs.
Newmont spent $8 and $6, respectively, during the first half of 2009 and 2008 for
environmental obligations related to the former, primarily historic, mining activities discussed in
Note 23 to the Consolidated Financial Statements.
Recently Adopted Accounting Pronouncements
Subsequent Events
In May 2009, the FASB issued FASB Statement No. 165 Subsequent Events (FAS 165) which
establishes accounting and reporting standards for events that occur after the balance sheet date
but before financial statements are issued or are available to be issued. The statement sets forth
(i) the period after the balance sheet date during which management of a reporting entity should
evaluate events or transactions that may occur for potential recognition or disclosure in the
financial statements, (ii) the circumstances under which an entity should recognize events or
transactions occurring after the balance sheet in its financial statements, and (iii) the
disclosures that an entity should make about events or transactions occurring after the balance
sheet date in its financial statements. We adopted the provisions of FAS 165 for our interim period
ended June 30, 2009. The adoption of FAS 165 had no impact on our consolidated financial position,
results of operations or cash flows.
61
Post-Retirement Benefit Plan
In December 2008, the FASB issued FSP No. FAS 132(R)-1, Employers Disclosures about
Post-Retirement Benefit Plan Assets (FSP FAS 132(R)-1), which amends FASB Statement No. 132
Employers Disclosures about Pensions and Other Post-Retirement Benefits (FAS 132), to provide
guidance on an employers disclosures about plan assets of a defined benefit pension or other
post-retirement plan. The objective of FSP FAS 132(R)-1 is to require more detailed disclosures
about employers plan assets, including employers investment strategies, major categories of plan
assets, concentrations of risk within plan assets, and valuation techniques used to measure the
fair value of plan assets. We adopted the provisions of FSP FAS 132(R)-1 on January 1, 2009. The
provisions of this FSP are not required for earlier periods that are presented for comparative
purposes.
Equity Method Investment
In November 2008, the Emerging Issues Task Force (EITF) reached consensus on Issue No. 08-6,
Equity Method Investment Accounting Considerations (EITF 08-6), which clarifies the accounting
for certain transactions and impairment considerations involving equity method investments. The
intent of EITF 08-6 is to provide guidance on (i) determining the initial measurement of an equity
method investment, (ii) recognizing other-than-temporary impairments of an equity method investment
and (iii) accounting for an equity method investees issuance of shares. EITF 08-6 was effective
for our fiscal year beginning January 1, 2009 and has been applied prospectively. The adoption of
EITF 08-6 had no impact on our consolidated financial position or results of operations.
Equity-Linked Financial Instruments
In June 2008, the EITF reached consensus on Issue No. 07-5, Determining Whether an Instrument
(or Embedded Feature) Is Indexed to an Entitys Own Stock (EITF 07-5). EITF 07-5 clarifies the
determination of whether an instrument (or an embedded feature) is indexed to an entitys own
stock, which would qualify as a scope exception under FASB Statement No. 133, Accounting for
Derivative Instruments and Hedging Activities (FAS 133). EITF 07-5 was effective for our fiscal
year beginning January 1, 2009. The adoption of EITF 07-5 had no impact on our consolidated
financial position or results of operations.
Accounting for Convertible Debt Instruments
In May 2008, the FASB issued FSP No. APB 14-1, Accounting for Convertible Debt Instruments
That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement) (FSP APB 14-1).
FSP APB 14-1 applies to convertible debt instruments that, by their stated terms, may be settled in
cash (or other assets) upon conversion, including partial cash settlement, unless the embedded
conversion option is required to be separately accounted for as a derivative under FAS 133. FSP APB
14-1 requires that the liability and equity components of convertible debt instruments within the
scope of FSP APB 14-1 be separately accounted for in a manner that reflects the entitys
nonconvertible debt borrowing rate. This requires an allocation of convertible debt proceeds
between the liability component and the embedded conversion option (i.e., the equity component).
The difference between the principal amount of the debt and the amount of the proceeds allocated to
the liability component is reported as a debt discount and subsequently amortized to earnings over
the instruments expected life using the effective interest method. FSP APB 14-1 requires
retrospective application to all periods presented.
During July 2007, we completed an offering of $1,150 convertible senior notes due 2014 and
2017, each in the amount of $575. The 2014 notes, maturing on July 15, 2014, pay interest
semi-annually at a rate of 1.25% per annum, and the 2017 notes, maturing on July 15, 2017, pay
interest semi-annually at a rate of 1.625% per annum. The notes are convertible, at the holders
option, equivalent to a conversion price of $46.21 per share of common stock (24,887,956 shares of
common stock). In connection with the convertible senior notes offering, we entered into
convertible note hedge transactions and warrant transactions (Call Spread Transactions). The Call
Spread Transactions included the purchase of call options and the sale of warrants. As a result of
the Call Spread Transactions, the conversion price of $46.21 was effectively increased to $60.27.
As of June 30, 2009, the if-converted value did not exceed the principal amounts.
During February 2009, we completed an offering of $518 convertible senior notes due on
February 15, 2012. The notes will pay interest semi-annually at a rate of 3.00% per annum. The
notes are convertible, at the holders option, equivalent to a conversion price of $46.25 per share
of common stock (11,189,189 shares of common stock). As of June 30, 2009, the if-converted value
did not exceed the principal amount.
62
We have recorded the following in the Consolidated Balance Sheets related to the convertible
senior notes:
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|
At June 30, 2009 |
|
|
At December 31, 2008 |
|
|
|
Convertible Senior Notes Due |
|
|
Convertible Senior Notes Due |
|
|
|
2012 |
|
|
2014 |
|
|
2017 |
|
|
2012 |
|
|
2014 |
|
|
2017 |
|
Additional paid-in capital |
|
$ |
46 |
|
|
$ |
97 |
|
|
$ |
123 |
|
|
$ |
|
|
|
$ |
97 |
|
|
$ |
123 |
|
Principal amount |
|
$ |
518 |
|
|
$ |
575 |
|
|
$ |
575 |
|
|
$ |
|
|
|
$ |
575 |
|
|
$ |
575 |
|
Unamortized debt discount |
|
|
(66 |
) |
|
|
(117 |
) |
|
|
(166 |
) |
|
|
|
|
|
|
(127 |
) |
|
|
(174 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net carrying amount |
|
$ |
452 |
|
|
$ |
458 |
|
|
$ |
409 |
|
|
$ |
|
|
|
$ |
448 |
|
|
$ |
401 |
|
|
|
|
|
|
|
|
|
|
|
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|
As a result of adopting FSP APB 14-1, the effective interest rates increased by approximately
5 percentage points to 8.5%, 6.0% and 6.25% for the 2012, 2014 and 2017 notes, respectively, for
the non-cash amortization of the debt discount over the lives of the notes. Interest expense was
increased by $8 which decreased our Income from continuing operations and Net income by $6 ($0.01
per share) for the three months ended June 30, 2008. Interest expense was increased by $16 which
decreased our Income from continuing operations and Net income by $11 ($0.02 per share) for the six
months ended June 30, 2008. Had FSP APB 14-1 been effective in 2008, we would have paid our fourth
quarter 2008 dividends out of Additional paid-in capital rather than Retained earnings; therefore,
we made the reclassification in 2009. Cash flows from operations were not impacted by the adoption
of FSP APB 14-1. The impact on our 2009 opening balance in Retained earnings was as follows:
|
|
|
|
|
|
|
At December 31, |
|
|
|
2008 |
|
Balance before application of FSP APB 14-1 |
|
$ |
7 |
|
Impact of adoption of FSP APB 14-1 |
|
|
(31 |
) |
Reclassification of dividends to Additional paid-in capital |
|
|
28 |
|
|
|
|
|
Balance after application of FSP APB 14-1 |
|
$ |
4 |
|
|
|
|
|
Following adoption and the issuance of the 2012 convertible senior notes in February 2009, we
will amortize $375 ($244 net of tax) of debt discount over the lives of our convertible senior
notes. For the three months ended June 30, 2009, we recorded $8 and $15 of interest expense for the
contractual interest coupon and amortization of the debt discount, respectively, related to the
convertible senior notes. For the six months ended June 30, 2009, we recorded $14 and $26 of
interest expense for the contractual interest coupon and amortization of the debt discount,
respectively, related to the convertible senior notes. The remaining unamortized debt discount will
be amortized over the remaining 3, 5 and 8 year periods of the 2012, 2014 and 2017 convertible
senior notes, respectively.
Accounting for the Useful Life of Intangible Assets
In April 2008, the FASB issued FSP No. FAS 142-3, Determination of the Useful Life of Intangible Assets (FSP FAS 142-3) which amends the factors that should be considered in
developing renewal or extension assumptions used to determine the useful life of a recognized
intangible asset under FASB Statement No. 142, Goodwill and Other Intangible Assets (FAS 142).
The intent of this FSP is to improve the consistency between the useful life of a recognized
intangible asset under FAS 142 and the period of expected cash flows used to measure the fair value
of the asset under FASB Statement No. 141 (revised 2007), Business Combinations (FAS 141(R)).
FSP FAS 142-3 was effective for our fiscal year beginning January 1, 2009 and has been applied
prospectively to intangible assets acquired after the effective date. The adoption of FSP FAS 142-3
had no impact on our consolidated financial position, results of operations or cash flows.
Derivative Instruments
In March 2008, the FASB issued FASB Statement No. 161, Disclosure about Derivative
Instruments and Hedging Activities an amendment of FASB Statement No. 133 (FAS 161) which
provides revised guidance for enhanced disclosures about how and why an entity uses derivative
instruments, how derivative instruments and the related hedged items are accounted for under FAS
133, and how derivative instruments and the related hedged items affect an entitys financial
position, financial performance and cash flows. We adopted the provisions of FAS 161 on January 1,
2009. The adoption of FAS 161 had no impact on our consolidated financial position, results of
operations or cash flows. See Note 16 for our derivative instruments disclosure.
63
Business Combinations
In December 2007, the FASB issued FAS 141(R) which replaces FAS 141, and provides new guidance
for recognizing and measuring identifiable assets and goodwill acquired, liabilities assumed, and
any noncontrolling interest in the acquiree. FAS 141(R) also provides disclosure requirements to
enable users of the financial statements to evaluate the nature and financial effects of the
business combination. We adopted the provisions of FAS 141(R) on January 1, 2009 and applied them
to the acquisition of the remaining 33.33% interest in the Boddington project completed on June 25,
2009 (see Note 14).
In April 2009, the FASB issued FSP No. FAS 141(R)-1, Accounting for Assets Acquired and
Liabilities Assumed in a Business Combination That Arise from Contingencies (FSP FAS 141(R)-1),
which amends and clarifies FAS 141(R). The intent of FSP FAS 141(R)-1 is to address application
issues on initial recognition and measurement, subsequent measurement and accounting, and
disclosure of assets and liabilities arising from contingencies in a business combination. This FSP
is effective for assets or liabilities arising from contingencies in business combinations for
which the acquisition date is on or after January 1, 2009. The adoption of FSP FAS 141(R)-1 did not
have any impact on the Companys acquisition of the remaining 33.33% interest in the Boddington
project completed on June 25, 2009 (see Note 14).
Noncontrolling Interests
In December 2007, the FASB issued FASB Statement No. 160 Noncontrolling Interests in
Consolidated Financial Statements an amendment of ARB No. 51 (FAS 160), which establishes
accounting and reporting standards pertaining to (i) ownership interests in subsidiaries held by
parties other than the parent (noncontrolling interest), (ii) the amount of net income
attributable to the parent and to the noncontrolling interest, (iii) changes in a parents
ownership interest, and (iv) the valuation of any retained noncontrolling equity investment when a
subsidiary is deconsolidated. If a subsidiary is deconsolidated, any retained noncontrolling equity
investment in the former subsidiary is measured at fair value and a gain or loss is recognized in
net income based on such fair value. For presentation and disclosure purposes, FAS 160 requires
noncontrolling interests to be classified as a separate component of stockholders equity. We
adopted the provisions of FAS 160 on January 1, 2009. Except for presentation changes, the adoption
of FAS 160 had no impact on our consolidated financial position, results of operations or cash
flows.
Fair Value Accounting
In September 2006, the FASB issued FASB Statement No. 157, Fair Value Measurements (FAS
157). FAS 157 defines fair value, establishes a framework for measuring fair value in generally
accepted accounting principles (GAAP), and expands disclosures about fair value measurements. We
adopted the provisions of FAS 157 for assets and liabilities measured at fair value on a recurring
basis on January 1, 2008. In February 2008, the FASB staff issued Staff Position No. 157-2
Effective Date of FASB Statement No. 157 (FSP FAS 157-2). FSP FAS 157-2 delayed the effective
date of FAS 157 for nonfinancial assets and nonfinancial liabilities that are recognized or
disclosed at fair value in the financial statements on a nonrecurring basis. We adopted the
provisions of FSP FAS 157-2 for our nonfinancial assets and liabilities measured at fair value on a
nonrecurring basis on January 1, 2009. Refer to Note 15 for further details regarding our assets
and liabilities measured at fair value.
In April 2009, the FASB issued Staff Position No. FAS 157-4, Determining Fair Value When the
Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and
Identifying Transactions That Are Not Orderly (FSP FAS 157-4), which provides additional
guidance on determining fair value when the volume and level of activity for an asset or liability
have significantly decreased and includes guidance on identifying circumstances that indicate when
a transaction is not orderly. In April 2009, the FASB issued Staff Position No. FAS 115-2 and FAS
124-2, Recognition and Presentation of Other-Than-Temporary Impairments (FSP FAS 115-2 and FAS
124-2), which: i) clarifies the interaction of the factors that should be considered when
determining whether a debt security is other than temporarily impaired, ii) provides guidance on
the amount of an other-than-temporary impairment recognized in earnings and other comprehensive
income and iii) expands the disclosures required for other-than-temporary impairments for debt and
equity securities. Also in April 2009, the FASB issued Staff Position No. 107-1 and APB 28-1,
Interim Disclosures about Fair Value of Financial Instruments (FSP FAS 107-1 and APB 28-1),
which requires disclosures about the fair value of financial instruments for interim reporting
periods of publicly traded companies as well as in annual financial statements. Adoption of these
Staff Positions is required for our interim reporting period beginning April 1, 2009 with early
adoption permitted. We adopted the provisions of FSP FAS 157-4, FSP FAS 115-2 and FAS 124-2, and
FSP FAS 107-1 and APB 28-1 for the interim period ended March 31, 2009. Refer to Note 15 for
further details regarding our assets and liabilities measured at fair value.
64
Recently Issued Accounting Pronouncements
The Accounting Standards Codification
In June 2009, the FASB issued FASB Statement No. 168, The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principlesa replacement of FASB
Statement No. 162 (FAS 168 or the Codification). FAS 168 will become the source of
authoritative U.S. GAAP to be applied by nongovernmental entities. Rules and interpretive releases
of the Securities and Exchange Commission (SEC) under authority of federal securities laws are
also sources of authoritative GAAP for SEC registrants. The Codification will supersede all non-SEC
accounting and reporting standards. All other nongrandfathered non-SEC accounting literature not
included in the Codification will become nonauthoritative. FAS 168 is effective for our interim
quarterly period beginning July 1, 2009. We do not expect the adoption of FAS 168 to have an impact
on our consolidated financial position, results of operations or cash flows.
Variable Interest Entities
In June 2009, the FASB issued FASB Statement No. 167, Amendments to FASB Interpretation No.
46(R) (FAS 167), which requires an entity to perform a qualitative analysis to determine whether
the enterprises variable interest gives it a controlling financial interest in a variable interest
entity (VIE). This analysis identifies a primary beneficiary of a VIE as the entity that has both
of the following characteristics: i) the power to direct the activities of a VIE that most
significantly impact the entitys economic performance and ii) the obligation to absorb losses or
receive benefits from the entity that could potentially be significant to the VIE. FAS 167 also
amends FIN 46(R) to require ongoing reassessments of the primary beneficiary of a VIE. The
provisions of FAS 167 are effective for our fiscal year beginning January 1, 2010. We currently
account for Nusa Tenggara Partnership (NTP) as a VIE and are evaluating the potential impact of
adopting this statement on our consolidated financial position, results of operations and cash
flows.
Safe Harbor Statement
Certain statements contained in this report (including information incorporated by reference)
are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to
be covered by the safe harbor provided for under these sections. Our forward-looking statements
include, without limitation: (a) statements regarding future earnings, and the sensitivity of
earnings to gold and other metal prices; (b) estimates of future mineral production and sales for
specific operations and on a consolidated basis; (c) estimates of future production costs and other
expenses, for specific operations and on a consolidated basis; (d) estimates of future cash flows
and the sensitivity of cash flows to gold and other metal prices; (e) estimates of future capital
expenditures and other cash needs for specific operations and on a consolidated basis and
expectations as to the funding thereof; (f) statements as to the projected development of certain
ore deposits, including estimates of development and other capital costs, financing plans for these
deposits, and expected production commencement dates; (g) estimates of future costs and other
liabilities for certain environmental matters; (h) estimates of reserves, and statements regarding
future exploration results and reserve replacement; (i) statements regarding modifications to hedge
positions; (j) statements regarding future transactions relating to portfolio management or
rationalization efforts; and (k) projected synergies and costs associated with acquisitions and
related matters.
Where we express an expectation or belief as to future events or results, such expectation or
belief is expressed in good faith and believed to have a reasonable basis. However, our
forward-looking statements are subject to risks, uncertainties, and other factors, which could
cause actual results to differ materially from future results expressed, projected, or implied by
those forward-looking statements. Important factors that could cause actual results to differ
materially from such forward-looking statements (cautionary statements) are disclosed under Risk
Factors in the Newmont Annual Report on Form 10-K for the year ended December 31, 2008, as well as
in other filings with the Securities and Exchange Commission. Many of these factors are beyond
Newmonts ability to control or predict. Given these uncertainties, readers are cautioned not to
place undue reliance on our forward-looking statements.
All subsequent written and oral forward-looking statements attributable to Newmont or to
persons acting on its behalf are expressly qualified in their entirety by the cautionary
statements. Newmont disclaims any intention or obligation to update publicly any forward-looking
statements, whether as a result of new information, future events or otherwise, except as may be
required under applicable securities laws.
65
|
|
|
ITEM 3. |
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
(dollars in millions, except per ounce and per pound amounts). |
Metal Prices
Changes in the market price of gold significantly affect our profitability and cash flow. Gold
prices can fluctuate widely due to numerous factors, such as demand; forward selling by producers;
central bank sales, purchases and lending; investor sentiment; the strength of the U.S. dollar; and
global mine production levels. Changes in the market price of copper also affect our profitability
and cash flow. Copper is traded on established international exchanges and copper prices generally
reflect market supply and demand, but can also be influenced by speculative trading in the
commodity or by currency exchange rates.
Cash Flow Hedges
Foreign Currency Contracts
We entered into a series of foreign currency contracts to reduce the variability of the US
dollar amount of forecasted foreign currency expenditures caused by changes in currency rates. We
entered into IDR/$ forward purchase contracts to hedge up to 80% of our IDR denominated operating
expenditures which results in a blended IDR/$ rate realized each period. The hedges are forward
purchase contracts with expiration dates ranging up to one year from the date of issue. The
principal hedging objective is reduction in the volatility of realized period-on-period IDR/$
rates. For the three months ended June 30, 2009 and 2008, the IDR/$ forward purchase contracts had
no impact on Batu Hijau Costs applicable to sales. For the six months ended June 30, 2009 and 2008,
the IDR/$ forward purchase contracts increased Batu Hijau Costs applicable to sales by $2 and
reduced Batu Hijau Costs applicable to sales by $1, respectively. As of June 30, 2009, we have
hedged 45% of our expected remaining 2009 IDR operating expenditures.
We implemented a multi-year layered program to hedge up to 85% of our A$ denominated operating
expenditures with forward contracts that have expiration dates ranging up to three years from the
date of issue. The principal hedging objective is reduction in the volatility of realized
period-on-period $/A$ rates. Each month, fixed forward contracts are obtained to hedge
1/36th of the forecasted monthly A$ operating cost exposure in the rolling three-year
hedge period resulting in a blended $/A$ rate realized. For the three months ended June 30, 2009
and 2008, the A$ operating hedge program increased Australia/New Zealand Costs applicable to sales
by $9 and reduced Australia/New Zealand Costs applicable to sales by $4, respectively. For the six
months ended June 30, 2009 and 2008, the A$ operating hedge program increased Australia/New Zealand
Costs applicable to sales by $25 and reduced Australia/New Zealand Costs applicable to sales by $5,
respectively. As of June 30, 2009, we have hedged 77% of our expected remaining 2009 A$ operating
expenditures, and 53%, 27% and 7% of our expected 2010, 2011 and 2012 A$ operating expenditures,
respectively.
We implemented a multi-year layered program to hedge up to 75% of our NZ$ denominated
operating expenditures with forward contracts that have expiration dates ranging up to two years
from the date of issue. The principal hedging objective is reduction in the volatility of realized
period-on-period $/NZ$ rates. Each month, fixed forward contracts are obtained to hedge
1/24th of the forecasted monthly NZ$ operating cost exposure in the rolling two-year
hedge period resulting in a blended $/NZ$ rate realized. For the three months ended June 30, 2009
and 2008, the NZ$ operating hedge program increased Australia/New Zealand Costs applicable to sales
by $1 and $nil, respectively. For the six months ended June 30, 2009 and 2008, the NZ$ operating
hedge program increased Australia/New Zealand Costs applicable to sales by $3 and $nil,
respectively. As of June 30, 2009, we have hedged 63% of our expected remaining 2009 NZ$ operating
expenditures, and 32% and 7% of our expected 2010 and 2011 NZ$ operating expenditures,
respectively.
We implemented a program to hedge up to 95% of our A$ denominated capital expenditures related
to the construction of Boddington. The program consists of a series of fixed forward contracts with
expiration dates ranging up to one year from the date of issue. The realized gains and losses
associated with the capital expenditure hedge program will impact Amortization during future
periods in which the Boddington assets are placed into service. As of June 30, 2009, we have hedged
83% of our expected remaining A$ denominated Boddington capital expenditures.
All of the foreign currency contracts were 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 recorded in earnings during the period in which the hedged
transaction affects earnings. Gains and losses on the derivative representing hedge ineffectiveness
are recognized in current earnings.
66
We had the following foreign currency derivative contracts outstanding at June 30, 2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total/ |
|
|
|
2009 |
|
|
2010 |
|
|
2011 |
|
|
2012 |
|
|
Average |
|
IDR Forward Purchase Contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$(millions) |
|
$ |
26 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
26 |
|
Average rate (IDR/$) |
|
|
10,717 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,717 |
|
IDR notional (millions) |
|
|
278,644 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
278,644 |
|
A$ Operating Forward Purchase Contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$(millions) |
|
$ |
223 |
|
|
$ |
413 |
|
|
$ |
200 |
|
|
$ |
24 |
|
|
$ |
860 |
|
Average rate ($/A$) |
|
|
0.77 |
|
|
|
0.75 |
|
|
|
0.70 |
|
|
|
0.68 |
|
|
|
0.74 |
|
A$ notional (millions) |
|
|
290 |
|
|
|
550 |
|
|
|
284 |
|
|
|
36 |
|
|
|
1,160 |
|
NZ$ Operating Forward Purchase Contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$(millions) |
|
$ |
20 |
|
|
$ |
19 |
|
|
$ |
1 |
|
|
$ |
|
|
|
$ |
40 |
|
Average rate ($/NZ$) |
|
|
0.63 |
|
|
|
0.59 |
|
|
|
0.54 |
|
|
|
|
|
|
|
0.61 |
|
NZ$ notional (millions) |
|
|
32 |
|
|
|
32 |
|
|
|
3 |
|
|
|
|
|
|
|
67 |
|
A$ Boddington Capital Forward Purchase Contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$(millions) |
|
$ |
156 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
156 |
|
Average rate ($/A$) |
|
|
0.79 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.79 |
|
A$ notional (millions) |
|
|
197 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
197 |
|
Diesel Fixed Forward Contracts
We implemented a program to hedge up to 66% of our operating cost exposure related to diesel
prices of fuel consumed at its Nevada operations to reduce the variability in the diesel prices
realized. The program consists of a series of financially settled fixed forward contracts with
expiration dates of up to two years from the date of issue. For the three months ended June 30,
2009 and 2008, the Nevada diesel hedge program increased Nevada Costs applicable to sales by $4 and
$nil, respectively. For the six months ended June 30, 2009 and 2008, the Nevada diesel hedge
program increased Nevada Costs applicable to sales by $11 and $nil, respectively. The contracts
have been designated as cash flow hedges of future diesel purchases, and as such, the effective
portion of unrealized changes in the market value have been recorded in Accumulated other
comprehensive income (loss) and are recorded in earnings during the period in which the hedged
transaction affects earnings. Gains and losses on the derivative representing hedge ineffectiveness
are recognized in current earnings. As of June 30, 2009, we have hedged 56% of our expected
remaining 2009 Nevada diesel expenditures, and 24% and 10% of our expected 2010 and 2011 Nevada
diesel expenditures, respectively.
We had the following diesel derivative contracts outstanding at June 30, 2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expected Maturity Date |
|
|
|
|
|
|
|
|
|
|
Total/ |
|
|
|
2009 |
|
|
2010 |
|
|
2011 |
|
|
Average |
|
Diesel Forward Purchase Contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$(millions) |
|
$ |
22 |
|
|
$ |
19 |
|
|
$ |
4 |
|
|
$ |
45 |
|
Average rate ($/gallon) |
|
|
1.90 |
|
|
|
1.84 |
|
|
|
2.00 |
|
|
|
1.88 |
|
Diesel gallons (millions) |
|
|
12 |
|
|
|
10 |
|
|
|
2 |
|
|
|
24 |
|
Fair Value Hedges
Interest Rate Swap Contracts
At June 30, 2009, we had $100 fixed to floating swap contracts designated as a hedge against a
portion of our 8 5/8% debentures. The interest rate swap contracts were transacted to provide
balance to our mix of fixed and floating rate debt. Under the hedge contract terms, we receive
fixed-rate interest payments at 8.625% and pay floating-rate interest amounts based on periodic
London Interbank Offered Rate (LIBOR) settings plus a spread, ranging from 2.60% to 3.49%. The
interest rate swap contracts were designated as fair value hedges, and as such, changes in fair
value have been recorded in income in each period, consistent with recording changes to the
mark-to-market value of the underlying hedged liability in income. Changes in the mark-to-market
value of the effective portion of the interest rate swap contracts are recognized as a component of
Interest expense, net. The hedge contracts decreased Interest expense, net by $1 and $1 for the
three months ended June 30, 2009 and 2008, respectively, and decreased Interest expense, net by $2
and $1 for the six months ended June 30, 2009 and 2008, respectively. For the three months ended
June 30, 2009 and 2008, losses of $1 and $3, respectively, were included in Other income, net of
the ineffective portion of derivative instruments designated as fair value hedges. For the six
months ended June 30, 2009 and 2008, losses of $1 and $nil, respectively, were included in Other
income, net of the ineffective portion of derivative instruments designated as fair value hedges.
67
Derivative Instrument Fair Values
We had the following derivative instruments designated as hedges under FAS 133 with fair
values at June 30, 2009 and December 31, 2008:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Values of Derivative Instruments |
|
|
|
At June 30, 2009 |
|
|
|
Other |
|
|
Other |
|
|
Other |
|
|
Other |
|
|
|
Current |
|
|
Long-Term |
|
|
Current |
|
|
Long-Term |
|
|
|
Assets |
|
|
Assets |
|
|
Liabilities |
|
|
Liabilities |
|
Foreign currency exchange contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IDR operating forward purchase contracts |
|
$ |
1 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
NZ$ operating forward contracts |
|
|
2 |
|
|
|
1 |
|
|
|
1 |
|
|
|
|
|
A$ forward purchase contracts |
|
|
26 |
|
|
|
28 |
|
|
|
2 |
|
|
|
2 |
|
Diesel forward contracts |
|
|
3 |
|
|
|
1 |
|
|
|
2 |
|
|
|
|
|
Interest rate swap contracts |
|
|
2 |
|
|
|
5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total derivative instruments |
|
$ |
34 |
|
|
$ |
35 |
|
|
$ |
5 |
|
|
$ |
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Values of Derivative Instruments |
|
|
|
At December 31, 2008 |
|
|
|
Other |
|
|
Other |
|
|
Other |
|
|
Other |
|
|
|
Current |
|
|
Long-Term |
|
|
Current |
|
|
Long-Term |
|
|
|
Assets |
|
|
Assets |
|
|
Liabilities |
|
|
Liabilities |
|
Foreign currency exchange contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IDR operating forward purchase contracts |
|
$ |
|
|
|
$ |
|
|
|
$ |
4 |
|
|
$ |
|
|
NZ$ operating forward contracts |
|
|
|
|
|
|
|
|
|
|
5 |
|
|
|
1 |
|
A$ forward purchase contracts |
|
|
3 |
|
|
|
1 |
|
|
|
87 |
|
|
|
42 |
|
A$ call option contracts |
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Diesel forward contracts |
|
|
|
|
|
|
|
|
|
|
15 |
|
|
|
|
|
Interest rate swap contracts |
|
|
2 |
|
|
|
7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total derivative instruments |
|
$ |
6 |
|
|
$ |
8 |
|
|
$ |
111 |
|
|
$ |
43 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following tables show the location and amount of (losses) gains reported in our
Consolidated Financial Statements related to our cash flow and fair value hedges and the gains
(losses) recorded for the hedged item related to the fair value hedges.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign Currency |
|
|
|
|
|
|
Exchange Contracts |
|
|
Diesel Forward Contracts |
|
|
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
For the three months ended June 30, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow hedging relationships: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain recognized in other comprehensive income
(effective portion) |
|
$ |
142 |
|
|
$ |
48 |
|
|
$ |
7 |
|
|
$ |
2 |
|
(Loss) gain reclassified from Accumulated
other comprehensive income into income
(effective
portion) (1) |
|
|
(9 |
) |
|
|
4 |
|
|
|
(4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
133 |
|
|
$ |
52 |
|
|
$ |
3 |
|
|
$ |
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the six months ended June 30, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain recognized in other comprehensive income
(effective portion) |
|
$ |
118 |
|
|
$ |
74 |
|
|
$ |
4 |
|
|
$ |
2 |
|
(Loss) gain reclassified from Accumulated
other comprehensive income into income
(effective
portion) (1) |
|
|
(30 |
) |
|
|
6 |
|
|
|
(11 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
88 |
|
|
$ |
80 |
|
|
$ |
(7 |
) |
|
$ |
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The (loss) gain for the effective portion of cash flow hedges reclassified from
Accumulated other comprehensive income (loss) is recorded in Costs applicable to sales. |
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 gain of approximately $22.
68
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Rate |
|
|
8 5/8% Debentures |
|
|
|
Swap Contracts |
|
|
(Hedged Portion) |
|
|
|
2009 |
|
|
2008 |
|
|
2009 |
|
|
2008 |
|
For the three months ended June 30, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value hedging relationships: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain (loss) recognized in income (effective portion) (1) |
|
$ |
1 |
|
|
$ |
1 |
|
|
$ |
|
|
|
$ |
(1 |
) |
(Loss) gain recognized in income (ineffective portion) (2) |
|
|
(1 |
) |
|
|
(3 |
) |
|
|
(2 |
) |
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
$ |
(2 |
) |
|
$ |
(2 |
) |
|
$ |
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the six months ended June 30, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value hedging relationships: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain (loss) recognized in income (effective portion) (1) |
|
$ |
2 |
|
|
$ |
1 |
|
|
$ |
(1 |
) |
|
$ |
(1 |
) |
(Loss) gain recognized in income (ineffective portion) (2) |
|
|
(1 |
) |
|
|
|
|
|
|
(3 |
) |
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1 |
|
|
$ |
1 |
|
|
$ |
(4 |
) |
|
$ |
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The gain (loss) recognized for the effective portion of fair value hedges and the
underlying hedged debt is included in Interest expense, net. |
|
(2) |
|
The ineffective portion recognized for fair value hedges and the underlying hedged
debt is included in Other income, net. |
Provisional Copper and Gold Sales
LME copper prices averaged $2.12 per pound during the three months ended June 30, 2009,
compared with our recorded average provisional price of $2.11 per pound before mark-to-market gains
and treatment and refining charges. LME copper prices averaged $1.84 per pound during the six
months ended June 30, 2009, compared with our recorded average provisional price of $1.88 per pound
before mark-to-market gains and treatment and refining charges. The applicable forward copper price
at the end of the quarter was $2.25 per pound. During the three months ended June 30, 2009,
increasing copper prices resulted in a provisional pricing mark-to-market gain of $35 ($0.33 per
pound). During the six months ended June 30, 2009, changes in copper prices resulted in a
provisional pricing mark-to-market gain of $64 ($0.32 per pound). At June 30, 2009, we had copper
sales of 109 million pounds priced at an average of $2.25 per pound, subject to final pricing over
the next several months.
The average London P.M. fix was $922 per ounce during the three months ended June 30, 2009,
compared with our recorded average provisional price of $920 per ounce before mark-to-market gains
and treatment and refining charges. The average London P.M. fix was $915 per ounce during the six
months ended June 30, 2009, compared with our recorded average provisional price of $923 per ounce
before mark-to-market gains and treatment and refining charges. The applicable forward gold price
at the end of the quarter was $927 per ounce. During the three months ended June 30, 2009, changes
in gold prices resulted in a provisional pricing mark-to-market gain of $nil. During the six months
ended June 30, 2009, changes in gold prices resulted in a provisional pricing mark-to-market gain
of $1 ($nil per ounce). At June 30, 2009, we had gold sales of 71,000 ounces priced at an average
of $927 per ounce, subject to final pricing over the next several months.
ITEM 4. CONTROLS AND PROCEDURES.
During the fiscal period covered by this report, the Companys management, with the participation of the Chief
Executive Officer and Chief Financial Officer of the Company, carried out an evaluation of the effectiveness of the
design and operation of the Companys disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
of the Securities Exchange Act of 1934, as amended (the Exchange Act)). Based on such evaluation, the Companys Chief
Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report,
the Companys disclosure controls and procedures are effective to ensure that information required to be disclosed by
the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported
within the required time periods and are designed to ensure that information required to be disclosed in its reports is
accumulated and communicated to the Companys management, including the Chief Executive Officer and Chief Financial
Officer, as appropriate to allow timely decisions regarding required disclosure.
69
PART IIOTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
Information regarding legal proceedings is contained in Note 27 to the Consolidated Financial
Statements contained in this Report and is incorporated herein by reference.
ITEM 2. ISSUER PURCHASES OF EQUITY SECURITIES.
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(c) |
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(d) |
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(a) |
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Total Number of |
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Maximum Number (or |
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Total |
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(b) |
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Shares Purchased as |
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Approximate Dollar Value) of |
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Number |
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Average |
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Part of Publicly |
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Shares that may yet be |
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of Shares |
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Price Paid |
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Announced Plans or |
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Purchased under the Plans or |
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Period |
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Purchased |
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Per Share |
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Programs |
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Programs |
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April 1, 2009 through April 30, 2009 |
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N/A |
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May 1, 2009 through May 31, 2009 |
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70 |
(1) |
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$ |
39.95 |
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N/A |
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June 1, 2009 through June 30, 2009 |
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N/A |
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(1) |
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Represents shares delivered to the Company from restricted stock units held by a
Company employee upon vesting for purpose of covering the recipients tax withholding
obligations. |
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The following matters were voted upon at the annual meeting of stockholders held on April 29,
2009:
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1. |
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Elect directors, |
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2. |
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Ratify the Audit Committees appointment of PricewaterhouseCoopers LLP as
Newmonts independent auditors for 2009, |
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3. |
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Consider and act upon a Stockholder Proposal to approve Special Stockholder
Meetings, giving holders of 10% of the Companys outstanding common stock the power to
call special stockholder meetings, and |
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4. |
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Consider and act upon a Stockholder Proposal to approve Majority Voting for the
Election of Directors in a Non-Contested Election. |
All matters voted on at the annual meeting were approved, except Proposals No. 3 and 4 were
defeated. The voting results were as follows:
Proposal #1 Election of Directors.
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Name |
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Votes For |
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Votes Withheld |
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Glen A. Barton |
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385,308,115 |
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6,281,606 |
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Vincent. A. Calarco |
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364,147,500 |
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27,442,221 |
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Joseph A. Carrabba |
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385,744,274 |
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5,845,447 |
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Noreen Doyle |
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367,694,910 |
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23,894,811 |
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Veronica M. Hagen |
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384,513,370 |
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7,076,351 |
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Michael S. Hamson |
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339,593,798 |
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51,995,923 |
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Robert J. Miller |
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336,660,953 |
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54,928,768 |
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Richard T. OBrien |
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382,800,725 |
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8,788,996 |
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John B. Prescott |
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339,111,379 |
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52,478,342 |
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Donald C. Roth |
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385,336,811 |
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6,252,910 |
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James V. Taranik |
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333,248,606 |
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58,341,115 |
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Simon R. Thompson |
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387,974,436 |
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3,615,285 |
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Proposal #2 Ratification of Auditors.
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Votes For |
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388,276,440 |
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Votes Against |
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2,856,291 |
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Abstentions |
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456,990 |
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Proposal #3 Stockholder Proposal Special Stockholders Meeting.
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Votes For |
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161,829,487 |
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Votes Against |
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183,781,842 |
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Abstentions |
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950,998 |
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Broker Non-Votes |
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45,027,394 |
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Proposal #4 Stockholder Proposal Majority Vote.
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Votes For |
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162,177,494 |
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Votes Against |
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183,603,892 |
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Abstentions |
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780,991 |
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Broker Non-Votes |
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45,027,344 |
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There were no broker non-votes included in the results of the election of directors or the
ratification of auditors.
ITEM 5. OTHER MATTERS.
Item 5.02 |
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers;
Compensatory Arrangements of Certain Officers. |
On July 21, 2009 the Company adopted the 2009 Senior Executive Compensation Program, covering the Chief Executive
Officer, the Chief Financial Officer and certain other senior executives of the Company. Under this program, these
senior executives are eligible for the award of financial performance shares. The target number of shares for each
executive is determined by dividing a percentage of base salary by the average closing share price of the December
prior to the performance year. Annual corporate performance metrics determine the percentage of the target shares that
will be awarded at the end of the performance year, with vesting occurring over the three-year period beginning in the
performance year. Senior executives are also eligible for a cash bonus based upon corporate performance metrics and,
at the discretion of the Companys Compensation Committee, a cash bonus for achievement of strategic objectives.
The foregoing summary of the Senior Executive Compensation Program is qualified in its entirety by reference to
the complete text of the Senior Executive Compensation Program description, which is filed herewith as Exhibit 10.3 and
incorporated by reference herein.
Item 5.03 |
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Amendment to Articles or Bylaws; Change in Fiscal Year. |
On July 22, 2009, the Company filed a Certificate of Elimination with the Secretary of State of Delaware
eliminating the Certificate of Designations with respect to the Companys $3.25 Convertible Preferred Stock (the
Convertible Preferred Stock), which had been issued in connection with our merger with Battle Mountain Gold Company
in 2001. In 2002, all of the shares of the Convertible Preferred Stock were redeemed by the Company and no shares of
Convertible Preferred Stock are currently outstanding. A copy of the Certificate of Elimination is attached as Exhibit
3.1 to this Quarterly Report and incorporated by reference herein.
ITEM 6. EXHIBITS.
(a) The exhibits to this report are listed in the Exhibit Index.
71
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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Newmont Mining Corporation
(Registrant)
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Date: July 23, 2009 |
/s/ RUSSELL BALL
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Russell Ball |
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Executive Vice President and Chief Financial Officer
(Principal Financial Officer) |
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Date: July 23, 2009 |
/s/ ROGER P. JOHNSON
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Roger P. Johnson |
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Vice President and Chief Accounting Officer
(Principal Accounting Officer) |
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S-1
NEWMONT MINING CORPORATION
EXHIBIT INDEX
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Exhibit |
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Number |
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Description |
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3.1 |
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Certificate of Elimination of $3.25 Convertible Preferred Stock
of Registrant, filed herewith. |
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10.1 |
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Annual
Incentive Compensation Program of Registrant, as
amended and restated effective January 1, 2009, filed herewith. |
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10.2 |
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Employee Performance Incentive Compensation Program of
Registrant, effective and restated January 1, 2009, filed
herewith. |
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10.3 |
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Senior
Executive Compensation Program effective January 1, 2009, filed
herewith. |
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10.4 |
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Retention and Transition Agreement effective July 22, 2009,
between Newmont USA Limited and Brant Hinze, filed herewith. |
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12.1 |
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Computation of Ratio of Earnings to Fixed Charges, filed herewith. |
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31.1 |
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Certification Pursuant to Rule 13A-14 or 15-D-14 of the
Securities Exchange Act of 1934, as Adopted Pursuant to Section
302 of the Sarbanes-Oxley Act of 2002 signed by the Principal
Executive Officer, filed herewith. |
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31.2 |
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Certification Pursuant to Rule 13A-14 or 15-D-14 of the
Securities Exchange Act of 1934, as Adopted Pursuant to Section
302 of the Sarbanes-Oxley Act of 2002 signed by the Chief
Financial Officer, filed herewith. |
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32.1 |
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Statement Required by 18 U.S.C. Section 1350, as Adopted Pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002 signed by
Principal Executive Officer, filed herewith.(1) |
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32.2 |
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Statement Required by 18 U.S.C. Section 1350, as Adopted Pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002 signed by Chief
Financial Officer, filed herewith.(1) |
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101 |
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The following materials from the Quarterly Report on Form 10-Q of
Newmont Mining Corporation for the three and six months ended
June 30, 2009, filed on July, 23, 2009, formatted in XBRL
(eXtensible Business Reporting Language): (i) Consolidated
Statements of Income, (ii) Consolidated Balance Sheets, (iii)
Consolidated Statements of Cash Flows, (iv) document and entity
information, and (v) related notes to these financial statements
tagged as blocks of text. Users of this data are advised
pursuant to Rule 401 of Regulation S-T that the financial
information contained in the XBRL document is unaudited and these
are not the officially publicly filed financial statements of
Newmont Mining Corporation. The purpose of submitting these XBRL
formatted documents is to test the related format and technology
and, as a result, investors should continue to rely on the
official filed version of the furnished documents and not rely on
this information in making investment decisions. In accordance
with Rule 402 of Regulation S-T, the information in this Exhibit
101 shall not be deemed filed for the purposes of section 18 of
the Securities Exchange Act of 1934, as amended (the Exchange
Act), or otherwise subject to the liability of that section, and
shall not be incorporated by reference into any registration
statement or other document filed under the Securities Act of
1933, as amended, or the Exchange Act, except as shall be
expressly set forth by the specific reference in such filing. |
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(1) |
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This document is being furnished in accordance with SEC Release Nos. 33-8212 and
34-47551. |