10-Q 1 d566986d10q.htm FORM 10-Q FORM 10-Q
Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

 

 

Form 10-Q

 

 

(Mark One)

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

For the Quarterly Period Ended June 30, 2013

or

 

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

For the transition period from              to             

Commission File Number: 001-31240

 

 

 

LOGO

NEWMONT MINING CORPORATION

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   84-1611629

(State or Other Jurisdiction of

Incorporation or Organization)

 

(I.R.S. Employer

Identification No.)

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

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

 

 

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

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

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

 

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

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

There were 492,822,946 shares of common stock outstanding on July 18, 2013 (and 4,841,193 exchangeable shares).

 

 

 


Table of Contents

TABLE OF CONTENTS

 

         Page  
  PART I   
ITEM 1.   FINANCIAL STATEMENTS      1   
  Condensed Consolidated Statements of Income      1   
  Condensed Consolidated Statements of Comprehensive Income      2   
  Condensed Consolidated Statements of Cash Flows      3   
  Condensed Consolidated Balance Sheets      4   
  Notes to Condensed Consolidated Financial Statements      5   
ITEM 2.   MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS       49   
  Overview      49   
  Selected Financial and Operating Results      51   
  Consolidated Financial Results      52   
  Results of Consolidated Operations      58   
  Liquidity and Capital Resources      65   
  Environmental      67   
  Accounting Developments      68   
  Non-GAAP Financial Measures      68   
  Safe Harbor Statement      75   
ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK      76   
ITEM 4.   CONTROLS AND PROCEDURES      78   
  PART II   
ITEM 1.   LEGAL PROCEEDINGS      79   
ITEM 1A.   RISK FACTORS      79   
ITEM 2.   ISSUER PURCHASES OF EQUITY SECURITIES      79   
ITEM 3.   DEFAULTS UPON SENIOR SECURITIES      79   
ITEM 4.   MINE SAFETY DISCLOSURES      79   
ITEM 5.   OTHER INFORMATION      80   
ITEM 6.   EXHIBITS      80   
SIGNATURES       81   
EXHIBIT INDEX       82   


Table of Contents

PART I—FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS.

NEWMONT MINING CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(unaudited, in millions except per share)

 

     Three Months Ended     Six Months Ended  
     June 30,     June 30,  
     2013     2012     2013     2012  

Sales (Note 3)

   $ 1,993     $ 2,229     $ 4,170     $ 4,912  

Costs and expenses

        

Costs applicable to sales (1) (Note 3)

     1,653       1,002       2,697       2,019  

Amortization

     415       248       682       479  

Reclamation and remediation (Note 4)

     18       16       36       32  

Exploration

     76       106       135       194  

Advanced projects, research and development

     46       82       98       184  

General and administrative

     54       57       110       111  

Write-downs (Note 5)

     2,261       —         2,262       —    

Other expense, net (Note 6)

     77       126       176       246  
  

 

 

   

 

 

   

 

 

   

 

 

 
     4,600       1,637       6,196       3,265  
  

 

 

   

 

 

   

 

 

   

 

 

 

Other income (expense)

        

Other income, net (Note 7)

     50       36       76       69  

Interest expense, net

     (70     (71     (135     (123
  

 

 

   

 

 

   

 

 

   

 

 

 
     (20     (35     (59     (54
  

 

 

   

 

 

   

 

 

   

 

 

 

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

     (2,627     557       (2,085     1,593  

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

     325       (175     144       (518

Equity loss of affiliates

     (3     (11     (7     (30
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations

     (2,305     371       (1,948     1,045  

Income (loss) from discontinued operations (Note 9)

     74       —         74       (71
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

     (2,231     371       (1,874     974  

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

     212       (92     170       (205
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to Newmont stockholders

   $ (2,019   $ 279     $ (1,704   $ 769  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to Newmont stockholders:

        

Continuing operations

   $ (2,093   $ 279     $ (1,778   $ 840  

Discontinued operations

     74       —         74       (71
  

 

 

   

 

 

   

 

 

   

 

 

 
   $ (2,019   $ 279     $ (1,704   $ 769  
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) per common share (Note 11)

        

Basic:

        

Continuing operations

   $ (4.21   $ 0.56     $ (3.58   $ 1.69  

Discontinued operations

     0.15       —         0.15       (0.14
  

 

 

   

 

 

   

 

 

   

 

 

 
   $ (4.06   $ 0.56     $ (3.43   $ 1.55  
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted:

        

Continuing operations

   $ (4.21   $ 0.56     $ (3.58   $ 1.67  

Discontinued operations

     0.15       —         0.15       (0.14
  

 

 

   

 

 

   

 

 

   

 

 

 
   $ (4.06   $ 0.56     $ (3.43   $ 1.53  
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash dividends declared per common share

   $ 0.35     $ 0.35     $ 0.775     $ 0.70  

 

(1) 

Excludes Amortization and Reclamation and remediation.

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

 

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NEWMONT MINING CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited, in millions)

 

     Three Months Ended June 30,     Six Months Ended June 30,  
     2013     2012     2013     2012  

Net income (loss)

   $ (2,231   $ 371     $ (1,874   $ 974  

Other comprehensive income (loss):

        

Unrealized gain (loss) on marketable securities, net of $(77), $18, $(115) and $(5) tax benefit and (expense), respectively

     (227     (273     (279     (313

Foreign currency translation adjustments

     (10     (10     (22     —    

Change in pension and other post-retirement benefits, net of $3, $2, $8 and $4 tax benefit, respectively

     6       4       11       8  

Change in fair value of cash flow hedge instruments, net of $(130), $8, $(145) and $(18) tax benefit and (expense), respectively

        

Net change from periodic revaluations

     (258     4       (237     73  

Net amount reclassified to income

     (11     (24     (35     (59
  

 

 

   

 

 

   

 

 

   

 

 

 

Net unrecognized gain (loss) on derivatives

     (269     (20     (272     14  
  

 

 

   

 

 

   

 

 

   

 

 

 

Other comprehensive income (loss)

     (500     (299     (562     (291
  

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income (loss)

   $ (2,731   $ 72     $ (2,436   $ 683  
  

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income (loss) attributable to:

        

Newmont stockholders

   $ (2,519   $ (18   $ (2,265   $ 478  

Noncontrolling interests

     (212     90       (171     205  
  

 

 

   

 

 

   

 

 

   

 

 

 
   $ (2,731   $ 72     $ (2,436   $ 683  
  

 

 

   

 

 

   

 

 

   

 

 

 

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

 

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NEWMONT MINING CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in millions)

 

     Six Months Ended  
     June 30,  
     2013     2012  

Operating activities:

    

Net income (loss)

   $ (1,874   $ 974  

Adjustments:

    

Amortization

     682       479  

Stock based compensation and other non-cash benefits

     38       36  

Reclamation and remediation

     36       32  

Loss (income) from discontinued operations

     (74     71  

Write-downs

     2,262       —    

Impairment of marketable securities

     11       32  

Deferred income taxes

     (519     12  

Gain on asset sales, net

     (1     (10

Other operating adjustments and write-downs

     632       106  

Net change in operating assets and liabilities (Note 24)

     (461     (768
  

 

 

   

 

 

 

Net cash provided from continuing operations

     732       964  

Net cash used in discontinued operations

     (11     (8
  

 

 

   

 

 

 

Net cash provided from operations

     721       956  
  

 

 

   

 

 

 

Investing activities:

    

Additions to property, plant and mine development

     (1,120     (1,578

Acquisitions, net

     (13     (22

Sale of marketable securities

     1       106  

Purchases of marketable securities

     (1     (196

Proceeds from sale of other assets

     49       13  

Other

     (21     (37
  

 

 

   

 

 

 

Net cash used in investing activities

     (1,105     (1,714
  

 

 

   

 

 

 

Financing activities:

    

Proceeds from debt, net

     987       3,343  

Repayment of debt

     (534     (1,941

Payment of conversion premium on debt

     —         (172

Proceeds from stock issuance, net

     2       15  

Sale of noncontrolling interests

     32       —    

Acquisition of noncontrolling interests

     (10     —    

Dividends paid to noncontrolling interests

     (2     (3

Dividends paid to common stockholders

     (385     (347

Other

     (3     (1
  

 

 

   

 

 

 

Net cash provided from financing activities

     87       894  
  

 

 

   

 

 

 

Effect of exchange rate changes on cash

     (16     1  
  

 

 

   

 

 

 

Net change in cash and cash equivalents

     (313     137  

Cash and cash equivalents at beginning of period

     1,561       1,760  
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 1,248     $ 1,897  
  

 

 

   

 

 

 

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

 

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NEWMONT MINING CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited, in millions)

 

     At June 30,     At December 31,  
     2013     2012  
ASSETS     

Cash and cash equivalents

   $ 1,248     $ 1,561  

Trade receivables

     257       283  

Accounts receivable

     289       577  

Investments (Note 16)

     628       86  

Inventories (Note 17)

     803       796  

Stockpiles and ore on leach pads (Note 18)

     738       786  

Deferred income tax assets

     215       195  

Other current assets (Note 19)

     844       1,661  
  

 

 

   

 

 

 

Current assets

     5,022       5,945  

Property, plant and mine development, net

     16,244       18,010  

Investments (Note 16)

     485       1,446  

Stockpiles and ore on leach pads (Note 18)

     2,729       2,896  

Deferred income tax assets

     1,188       481  

Other long-term assets (Note 19)

     808       872  
  

 

 

   

 

 

 

Total assets

   $ 26,476     $ 29,650  
  

 

 

   

 

 

 
LIABILITIES     

Debt (Note 20)

   $ 48     $ 10  

Accounts payable

     551       657  

Employee-related benefits

     261       339  

Income and mining taxes

     60       51  

Other current liabilities (Note 21)

     1,278       2,084  
  

 

 

   

 

 

 

Current liabilities

     2,198       3,141  

Debt (Note 20)

     6,726       6,288  

Reclamation and remediation liabilities (Note 4)

     1,471       1,457  

Deferred income tax liabilities

     806       858  

Employee-related benefits

     598       586  

Other long-term liabilities (Note 21)

     439       372  
  

 

 

   

 

 

 

Total liabilities

     12,238       12,702  
  

 

 

   

 

 

 

Commitments and contingencies (Note 26)

    
EQUITY     

Common stock

     789       787  

Additional paid-in capital

     8,431       8,330  

Accumulated other comprehensive income (loss)

     (71     490  

Retained earnings

     2,077       4,166  
  

 

 

   

 

 

 

Newmont stockholders’ equity

     11,226       13,773  

Noncontrolling interests

     3,012       3,175  
  

 

 

   

 

 

 

Total equity

     14,238       16,948  
  

 

 

   

 

 

 

Total liabilities and equity

   $ 26,476     $ 29,650  
  

 

 

   

 

 

 

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

 

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Table of Contents

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

NOTE 1    BASIS OF PRESENTATION

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

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

NOTE 2    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Recently Adopted Accounting Pronouncements

Reporting of Amounts reclassified out of Accumulated Other Comprehensive Income

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

Disclosures about Offsetting Assets and Liabilities

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

Recently Issued Accounting Pronouncements

Foreign Currency Matters

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

 

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NEWMONT MINING CORPORATION

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

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

 

NOTE 3    SEGMENT INFORMATION

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

 

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

Three Months Ended June 30, 2013

              

Nevada

   $ 558      $ 276      $ 60      $ 28      $ 181  

La Herradura

     71        42        7        15        8  

Other North America

     —          —          —          —          (2
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

North America

     629        318        67        43        187  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Yanacocha

     420        197        97        10        87  

Conga

     —          —          —          —          (1

Other South America

     —          —          —          5        (6
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

South America

     420        197        97        15        80  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Boddington:

              

Gold

     249        252        59        

Copper

     49        62        14        
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     298        314        73        —          (2,161

Other Australia/New Zealand

     332        263        58        12        (175
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Australia/New Zealand

     630        577        131        12        (2,336
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Batu Hijau:

              

Gold

     15        63        13        

Copper

     99        413        81        
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     114        476        94        5        (477

Other Indonesia

     —          —          —          —          (1
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Indonesia

     114        476        94        5        (478
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Ahafo

     200        85        20        11        79  

Akyem

     —          —          —          2        (2

Other Africa

     —          —          —          5        (8
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Africa

     200        85        20        18        69  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Corporate and Other

     —          —          6        29        (149
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Consolidated

   $ 1,993      $ 1,653      $ 415      $ 122      $ (2,627
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

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Table of Contents

NEWMONT MINING CORPORATION

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

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

 

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

Three Months Ended June 30, 2012

              

Nevada

   $ 571      $ 258      $ 47      $ 43      $ 217  

La Herradura

     93        33        6        11        46  

Other North America

     —          —          —          1        (2
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

North America

     664        291        53        55        261  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Yanacocha

     614        177        62        18        333  

Conga

     —          —          —          12        (12

Other South America

     —          —          —          19        (19
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

South America

     614        177        62        49        302  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Boddington:

              

Gold

     264        157        49        

Copper

     42        38        12        
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     306        195        61        2        37  

Other Australia/New Zealand

     331        182        35        22        88  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Australia/New Zealand

     637        377        96        24        125  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Batu Hijau:

              

Gold

     18        11        3        

Copper

     88        70        14        
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     106        81        17        7        (16

Other Indonesia

     —          —          —          —          4  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Indonesia

     106        81        17        7        (12
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Ahafo

     208        76        16        11        100  

Akyem

     —          —          —          5        (5

Other Africa

     —          —          —          3        (2
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Africa

     208        76        16        19        93  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Corporate and Other

     —          —          4        34        (212
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Consolidated

   $ 2,229      $ 1,002      $ 248      $ 188      $ 557  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

7


Table of Contents

NEWMONT MINING CORPORATION

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

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

 

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

Six Months Ended June 30, 2013

                   

Nevada

   $ 1,128      $ 548      $ 119      $ 53      $ 390     $ 7,822      $ 243  

La Herradura

     161        82        13        21        45       479        64  

Other North America

     —          —          —          1        (5     68        —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

North America

     1,289        630        132        75        430       8,369        307  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Yanacocha

     875        355        167        23        282       2,977        89  

Conga

     —          —          —          1        —         1,700        161  

Other South America

     —          —          —          10        (12     122        37  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

South America

     875        355        167        34        270       4,799        287  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Boddington:

                   

Gold

     578        426        101             

Copper

     114        110        24             
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total

     692        536        125        —          (2,047     2,334        54  

Other Australia/New Zealand

     724        495        104        24        (82     1,639        83  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Australia/New Zealand

     1,416        1,031        229        24        (2,129     3,973        137  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Batu Hijau:

                   

Gold

     26        70        15             

Copper

     169        460        90             
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total

     195        530        105        11        (481     3,388        56  

Other Indonesia

     —          —          —          —          2       4        —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Indonesia

     195        530        105        11        (479     3,392        56  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Ahafo

     395        151        37        24        175       1,545        116  

Akyem

     —          —          —          5        (7     1,159        159  

Other Africa

     —          —          —          8        (11     1        —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Africa

     395        151        37        37        157       2,705        275  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Corporate and Other

     —          —          12        52        (334     3,238        7  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Consolidated

   $ 4,170      $ 2,697      $ 682      $ 233      $ (2,085   $ 26,476      $ 1,069  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

 

(1) 

Includes a decrease in accrued capital expenditures of $51; consolidated capital expenditures on a cash basis were $1,120.

 

8


Table of Contents

NEWMONT MINING CORPORATION

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

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

 

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

Six Months Ended June 30, 2012

                   

Nevada

   $ 1,294      $ 525      $ 100      $ 77      $ 586     $ 7,280      $ 370  

La Herradura

     186        65        11        17        91       353        29  

Other North America

     —          —          —          1        (4     95        —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

North America

     1,480        590        111        95        673       7,728        399  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Yanacocha

     1,208        338        112        35        682       2,775        243  

Conga

     —          —          —          39        (39     1,462        342  

Other South America

     —          —          —          44        (44     24        20  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

South America

     1,208        338        112        118        599       4,261        605  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Boddington:

                   

Gold

     562        294        81             

Copper

     103        68        18             
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total

     665        362        99        5        180       4,640        52  

Other Australia/New Zealand

     758        372        72        43        273       1,949        137  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Australia/New Zealand

     1,423        734        171        48        453       6,589        189  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Batu Hijau:

                   

Gold

     52        30        6             

Copper

     260        155        30             
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total

     312        185        36        14        32       3,651        61  

Other Indonesia

     —          —          —          —          3       5        8  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Indonesia

     312        185        36        14        35       3,656        69  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Ahafo

     489        172        40        22        250       1,328        108  

Akyem

     —          —          —          9        (10     750        189  

Other Africa

     —          —          —          5        (4     9        —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Africa

     489        172        40        36        236       2,087        297  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Corporate and Other

     —          —          9        67        (403     4,339        17  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Consolidated

   $ 4,912      $ 2,019      $ 479      $ 378      $ 1,593     $ 28,660      $ 1,576  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

 

(1) 

Includes a decrease in accrued capital expenditures of $2; consolidated capital expenditures on a cash basis were $1,578.

 

9


Table of Contents

NEWMONT MINING CORPORATION

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

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

 

NOTE 4    RECLAMATION AND REMEDIATION

The Company’s Reclamation and remediation expense consisted of:

 

     Three Months Ended June 30,      Six Months Ended June 30,  
     2013      2012      2013      2012  

Accretion - operating

     15        13        30        27  

Accretion - non-operating

     3        3        6        5  
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ 18      $ 16      $ 36      $ 32  
  

 

 

    

 

 

    

 

 

    

 

 

 

At June 30, 2013 and December 31, 2012, $1,360 and $1,341, respectively, were accrued for reclamation obligations relating to operating properties. In addition, the Company is involved in several matters concerning environmental obligations associated with former, primarily historic, mining activities. Generally, these matters concern developing and implementing remediation plans at the various sites involved. At June 30, 2013 and December 31, 2012, $188 and $198, respectively, were accrued for such obligations. These amounts are also included in Reclamation and remediation liabilities.

The following is a reconciliation of Reclamation and remediation liabilities:

 

     Six Months Ended June 30,  
     2013     2012  

Balance at beginning of period

   $ 1,539     $ 1,240  

Additions, changes in estimates and other

     (3     105  

Liabilities settled

     (24     (41

Accretion expense

     36       32  
  

 

 

   

 

 

 

Balance at end of period

   $ 1,548     $ 1,336  
  

 

 

   

 

 

 

The current portion of Reclamation and remediation liabilities of $77 and $82 at June 30, 2013 and December 31, 2012, respectively, are included in Other current liabilities (see Note 21).

NOTE 5    WRITE-DOWNS

 

     Three Months Ended June 30,      Six Months Ended June 30,  
     2013      2012      2013      2012  

Property, plant and mine development

           

Yanacocha

   $ —        $ —        $ 1      $ —    

Boddington

     2,107        —          2,107        —    

Other Australia/New Zealand

     66        —          66        —    

Batu Hijau

     1        —          1        —    
  

 

 

    

 

 

    

 

 

    

 

 

 
     2,174        —          2,175        —    
  

 

 

    

 

 

    

 

 

    

 

 

 

Other long-term assets

           

Boddington

     31        —          31        —    

Other Australia/New Zealand

     56        —          56        —    
  

 

 

    

 

 

    

 

 

    

 

 

 
     87        —          87        —    
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ 2,261      $ —        $ 2,262      $ —    
  

 

 

    

 

 

    

 

 

    

 

 

 

Write-downs totaled $2,261 and $2,262 for the three and six months ended June 30, 2013, respectively. The 2013 write-down was primarily due to a decrease in the Company’s long-term gold and copper price assumptions to $1,400 per ounce and $3.00 per pound, respectively, combined with rising operating costs. These factors represented significant changes in the business, requiring the Company to evaluate for impairment. For purposes of this evaluation, estimates of future cash flows of the individual reporting units were used to determine fair value. The estimated cash flows were derived from life-of-mine plans, developed using long-term pricing reflective of the current price environment and management’s projections for operating costs. Refer to Note 14 for additional information.

 

10


Table of Contents

NEWMONT MINING CORPORATION

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

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

 

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

NOTE 6    OTHER EXPENSE, NET

 

     Three Months Ended June 30,      Six Months Ended June 30,  
     2013      2012      2013     2012  

Transaction costs

   $ —        $ 12      $ 45     $ 12  

Regional administration

     18        29        36       50  

Restructuring and other

     21        —          30       —    

Community development

     17        20        30       51  

Western Australia power plant

     7        4        11       8  

Hope Bay care and maintenance

     —          52        (2     102  

Other

     14        9        26       23  
  

 

 

    

 

 

    

 

 

   

 

 

 
   $ 77      $ 126      $ 176     $ 246  
  

 

 

    

 

 

    

 

 

   

 

 

 

NOTE 7    OTHER INCOME, NET

 

     Three Months Ended June 30,     Six Months Ended June 30,  
     2013     2012     2013     2012  

Foreign currency exchange, net

   $ 40     $ 12     $ 37     $ (3

Canadian Oil Sands

     11       11       21       20  

Development projects, net

     7       19       8       33  

Refinery income, net

     4       2       7       7  

Interest

     2       2       6       7  

Gain on asset sales, net

     —         —         1       10  

Reduction of allowance for loan receivable

     —         —         —         21  

Impairment of marketable securities

     (7     (8     (11     (32

Derivative ineffectiveness, net

     (3     (2     —         —    

Other

     (4     —         7       6  
  

 

 

   

 

 

   

 

 

   

 

 

 
   $ 50     $ 36     $ 76     $ 69  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

11


Table of Contents

NEWMONT MINING CORPORATION

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

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

 

NOTE 8    INCOME AND MINING TAXES

During the second quarter of 2013, the Company recorded an estimated income and mining tax benefit of $325, resulting in an effective tax rate of 12%. Estimated income and mining tax expense during the second quarter of 2012 was $175 for an effective tax rate of 32%. The lower effective tax rate on the loss in the second quarter of 2013 is a result of the significant decrease in pretax income resulting in a dilution to the impact of percentage depletion and an increase in the Company’s valuation allowance on certain deferred tax assets.

During the first half of 2013, the estimated income and mining tax benefit was $144, resulting in an effective tax rate of 7%. Estimated income and mining tax expense during the first half of 2012 was $518 for an effective tax rate of 33%. The lower effective tax rate on the loss in the first six months of 2013 is primarily due to the result of the significant decrease in pretax income resulting in a dilution to the impact of percentage depletion and an increase in the Company’s valuation allowance on certain deferred tax assets.

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

On the basis of available information at June 30, 2013, including the decrease in the Company’s long-term commodity price assumptions, rising operating cost, and decrease in equity value, the Company concluded that it would not be able to realize the benefit from some of its deferred tax assets; as a result, the Company recorded a significant increase in its valuation allowance. This increase consists of $535 related to U.S. foreign and alternative minimum tax credits and $150 related to stockpile impairments.

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

 

     Three Months Ended June 30,     Six Months Ended June 30,  
     2013     2012     2013     2012  

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

     $ (2,627     $ 557       $ (2,085     $ 1,593  
    

 

 

     

 

 

     

 

 

     

 

 

 

Tax at statutory rate

     35   $ (919     35   $ 195       35   $ (730     35   $ 558  

Reconciling items:

                

Percentage depletion

     2     (52     (6 )%      (34     4     (93     (7 )%      (108

Change in valuation allowance on deferred tax assets

     (26 )%      685       2     13       (33 )%      691       3     46  

Other

     1     (39     1     1       1     (12     2     22  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income and mining tax expense (benefit)

     12   $ (325     32   $ 175       7   $ (144     33   $ 518  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

12


Table of Contents

NEWMONT MINING CORPORATION

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

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

 

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

At June 30, 2013, the Company’s total unrecognized tax benefit was $391 for uncertain income tax positions taken or expected to be taken on income tax returns. Of this, $44 represents the amount of unrecognized tax benefits that, if recognized, would affect the Company’s effective income tax rate.

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

 

13


Table of Contents

NEWMONT MINING CORPORATION

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

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

 

NOTE 9    DISCONTINUED OPERATIONS

Discontinued operations include Holloway Mining Company, which owned the Holt-McDermott property (“Holt property”) that was sold to St. Andrew Goldfields Ltd. (“St. Andrew”) in 2006. In 2009, the Superior Court issued a decision finding Newmont Canada Corporation (“Newmont Canada”) liable for a sliding scale royalty on production from the Holt property, which was upheld in 2011 by the Ontario Court of Appeal. During the first half of 2013, the Company recorded a benefit from discontinued operations of $74, net of tax expense of $34, related to a decline in the gold spot price and an increase in discount rates. During the first half of 2012, the Company recorded a $71 charge, net of tax benefits of $4, to reflect an increase in future expected production at the Holt property due to new reserve and resource estimates published by St. Andrew.

Net operating cash used in discontinued operations of $11 and $8 in the first half of 2013 and 2012 relates to payments on the Holt property royalty.

NOTE 10    NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTERESTS

 

     Three Months Ended June 30,     Six Months Ended June 30,  
     2013     2012     2013     2012  

Minera Yanacocha

   $ 26     $ 97     $ 83     $ 195  

TMAC

     (2     —         (14     —    

Batu Hijau

     (238     (5     (241     8  

Other

     2       —         2       2  
  

 

 

   

 

 

   

 

 

   

 

 

 
   $ (212   $ 92     $ (170   $ 205  
  

 

 

   

 

 

   

 

 

   

 

 

 

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

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

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

 

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NEWMONT MINING CORPORATION

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

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

 

NOTE 11    INCOME (LOSS) PER COMMON SHARE

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

 

     Three Months Ended June 30,      Six Months Ended June 30,  
     2013     2012      2013     2012  

Net income (loss) attributable to Newmont stockholders

         

Continuing operations

   $ (2,093   $ 279      $ (1,778   $ 840  

Discontinued operations

     74       —          74       (71
  

 

 

   

 

 

    

 

 

   

 

 

 
   $ (2,019   $ 279      $ (1,704   $ 769  
  

 

 

   

 

 

    

 

 

   

 

 

 

Weighted average common shares (millions):

         

Basic

     497       496        497       496  

Effect of employee stock-based awards

     —         1        —         1  

Effect of convertible notes

     —         1        —         5  
  

 

 

   

 

 

    

 

 

   

 

 

 

Diluted

     497       498        497       502  
  

 

 

   

 

 

    

 

 

   

 

 

 

Income (loss) per common share

         

Basic:

         

Continuing operations

   $ (4.21   $ 0.56      $ (3.58   $ 1.69  

Discontinued operations

     0.15       —          0.15       (0.14
  

 

 

   

 

 

    

 

 

   

 

 

 
   $ (4.06   $ 0.56      $ (3.43   $ 1.55  
  

 

 

   

 

 

    

 

 

   

 

 

 

Diluted:

         

Continuing operations

   $ (4.21   $ 0.56      $ (3.58   $ 1.67  

Discontinued operations

     0.15       —          0.15       (0.14
  

 

 

   

 

 

    

 

 

   

 

 

 
   $ (4.06   $ 0.56      $ (3.43   $ 1.53  
  

 

 

   

 

 

    

 

 

   

 

 

 

Options to purchase 4 and 2 million shares of common stock at average exercise prices of $48 and $58 were outstanding at June 30, 2013 and 2012, respectively, but were not included in the computation of diluted weighted average common shares because their exercise prices exceeded the average price of the Company’s common stock for the respective periods presented.

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

Newmont is required to settle the principal amount of its 2014 and 2017 Convertible Senior Notes in cash and may elect to settle the remaining conversion premium (average share price in excess of the conversion price), if any, in cash, shares or a combination thereof. The effect of contingently convertible instruments on diluted earnings per share is calculated under the net share settlement method in accordance with ASC guidance. The average price of the Company’s common stock exceeded the conversion prices for all periods presented, resulting in additional shares included in the computation of diluted weighted average common shares.

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

 

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NEWMONT MINING CORPORATION

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

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

 

NOTE 12    EMPLOYEE PENSION AND OTHER BENEFIT PLANS

 

     Three Months Ended June 30,     Six Months Ended June 30,  
     2013     2012     2013     2012  

Pension benefit costs, net

        

Service cost

   $ 9     $ 8     $ 18     $ 15  

Interest cost

     10       11       20       21  

Expected return on plan assets

     (13     (11     (25     (22

Amortization, net

     10       8       18       14  
  

 

 

   

 

 

   

 

 

   

 

 

 
   $ 16     $ 16     $ 31     $ 28  
  

 

 

   

 

 

   

 

 

   

 

 

 
     Three Months Ended June 30,     Six Months Ended June 30,  
     2013     2012     2013     2012  

Other benefit costs, net

        

Service cost

   $ 1     $ —       $ 2     $ 1  

Interest cost

     2       2       3       3  
  

 

 

   

 

 

   

 

 

   

 

 

 
   $ 3     $ 2     $ 5     $ 4  
  

 

 

   

 

 

   

 

 

   

 

 

 

NOTE 13    STOCK BASED COMPENSATION

 

     Three Months Ended June 30,      Six Months Ended June 30,  
     2013      2012      2013      2012  

Stock options

   $ 2      $ 3      $ 5      $ 7  

Restricted stock units

     7        6        16        11  

Performance leveraged stock units

     2        3        4        6  

Strategic stock units

     3        1        3        1  
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ 14      $ 13      $ 28      $ 25  
  

 

 

    

 

 

    

 

 

    

 

 

 

NOTE 14    FAIR VALUE ACCOUNTING

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

 

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

 

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

 

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

 

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NEWMONT MINING CORPORATION

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

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

 

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

 

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

Assets:

           

Cash equivalents

   $ 32      $ 32      $ —        $ —    

Marketable equity securities:

           

Extractive industries

     979        979        —          —    

Other

     4        4        —          —    

Marketable debt securities:

           

Asset backed commercial paper

     22        —          —          22  

Corporate

     13        —          13        —    

Auction rate securities

     4        —          —          4  

Trade receivable from provisional copper and gold concentrate sales, net

     139        139        —          —    
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ 1,193      $ 1,154      $ 13      $ 26  
  

 

 

    

 

 

    

 

 

    

 

 

 

Liabilities:

           

Derivative instruments, net:

           

Foreign exchange forward contracts

   $ 168      $ —        $ 168      $ —    

Diesel forward contracts

     3        —          3        —    

Boddington contingent consideration

     28        —          —          28  

Holt property royalty

     121        —          —          121  
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ 320      $ —        $ 171      $ 149  
  

 

 

    

 

 

    

 

 

    

 

 

 

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

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

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

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

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

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

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

 

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NEWMONT MINING CORPORATION

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

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

 

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

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

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

 

Description

  At June 30,
2013
   

Valuation technique

 

Unobservable input

  Range/Weighted
average
 
Auction Rate Securities   $ 4     Discounted cash flow   Weighted average recoverability rate     58
Asset Backed Commercial Paper     22     Discounted cash flow   Recoverability rate     72-88

Boddington Contingent Consideration

    28     Monte Carlo   Discount rate     5
      Long Term Gold price   $ 1,400  
      Long Term Copper price   $ 3.00  
Holt property royalty     121     Monte Carlo   Weighted average discount rate     5
      Long Term Gold price   $ 1,400  

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

 

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

Balance at beginning of period

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

Unrealized loss

     (1     —          (1     —         —         —    

Settlements

     —         —          —         (13     (11     (24

Revaluation

     —         3        3       —         (108     (108
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Balance at end of period

   $ 4     $ 22      $ 26     $ 28     $ 121     $ 149  
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

At June 30, 2013, assets and liabilities classified within Level 3 of the fair value hierarchy represent 2% and 47%, respectively, of total assets and liabilities measured at fair value.

 

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NEWMONT MINING CORPORATION

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

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

 

At June 30, 2013, Newmont recorded write-downs related to Property, plant and equipment, net. (See Note 5). The following table provides information related to assets that were measured at fair value on a nonrecurring basis after initial recognition during the six months ended June 30, 2013:

 

            Fair Value Measurement Using         

Description

   At June 30,
2013
     Level 1      Level 2      Level 3      Total loss  

Property, Plant and Mine Development, net

   $ 16,244        —          —        $ 16,244      $ 2,175  

Goodwill

     132        —          —          132        56  

Intangible Assets

     104        —          —          104        31  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   $ 16,480      $ —        $ —        $ 16,480      $ 2,262  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

The estimated fair values of Property, plant and mine development, net, Goodwill and Intangible assets were determined using the discounted cash flow approach. The value is classified within Level 3 of the fair value hierarchy.

The following table sets forth a summary of the quantitative and qualitative information related to the unobservable inputs used in the calculation of the Company’s nonrecurring Level 3 financial assets at June 30, 2013:

 

Description

   At June 30,
2013
     Valuation technique   

Unobservable input

   Range/Weighted
      average
 

Property, plant and mine development, net

   $ 16,244      Discounted cash flow    Discount rate      4.25
         Long Term Gold Price    $ 1,400  
         Long Term Copper price    $ 3.00  
         Long Term Exchange rate A$/US$      0.935  
Goodwill and Intangible assets      161      Discounted cash flow    Discount rate      3.75-4.25
         Long Term Gold Price    $ 1,400  
         Long Term Copper price    $ 3.00  
         Long Term Exchange rate A$/US$      0.935  

NOTE 15    DERIVATIVE INSTRUMENTS

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

Cash Flow Hedges

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

 

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NEWMONT MINING CORPORATION

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

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

 

Foreign Currency Contracts

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

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

 

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

A$ Operating Fixed Forward Contracts:

              

A$ notional (millions)

     656       1,117       847       564       273       44       3,501  

Average rate ($/A$)

     0.95       0.93       0.92       0.92       0.91       0.89       0.93  

Expected hedge ratio

     83     67     51     33     17     7  

NZ$ Operating Fixed Forward Contracts:

              

NZ$ notional (millions)

     40       50       10       —         —         —         100  

Average rate ($/NZ$)

     0.80       0.80       0.79       —         —         —         0.80  

Expected hedge ratio

     63     41     16     —         —         —      

Diesel Fixed Forward Contracts

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

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

 

     Expected Maturity Date  
                       Total/
Average
 
      2013     2014     2015     2016    

Diesel Fixed Forward Contracts:

          

Diesel gallons (millions)

     14       21       10       2       47  

Average rate ($/gallon)

     2.90       2.87       2.77       2.70       2.85  

Expected hedge ratio

     65     49     25     7  

Forward Starting Swap Contracts

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

 

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NEWMONT MINING CORPORATION

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

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

 

Derivative Instrument Fair Values

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

 

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

Foreign currency exchange contracts:

           

A$ operating fixed forwards

   $ 16      $ 16      $ 64      $ 133  

NZ$ operating fixed forwards

     —          —          2        1  

Diesel fixed forwards

     —          —          2        1  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total derivative instruments (Notes 19 and 21)

   $ 16      $ 16      $ 68      $ 135  
  

 

 

    

 

 

    

 

 

    

 

 

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

Foreign currency exchange contracts:

           

A$ operating fixed forwards

   $ 108        143        —          1  

NZ$ operating fixed forwards

     2        —          —          —    

Diesel fixed forwards

     2        1        1        1  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total derivative instruments (Notes 19 and 21)

   $ 112      $ 144      $ 1      $ 2  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

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NEWMONT MINING CORPORATION

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

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

 

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

 

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

For the three months ended June 30,

             

Cash flow hedging relationships:

             

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

   $ (386   $ 23      $ (6   $ (16   $ —       $ —    

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

     22       38        (4     1       (6     (3

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

     —         —          (3     —         —         —    

For the six months ended June 30,

             

Cash flow hedging relationships:

             

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

   $ (368   $ 85      $ (4   $ (4   $ —       $ 36  

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

     60       85        —         4       (9     (4

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

     —         —          —         —         —         2  

 

(1)

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

(2) 

The ineffective portion recognized for cash flow hedges is included in Other income, net.

The amount to be reclassified from Accumulated other comprehensive income(loss), net of tax to income for derivative instruments during the next 12 months is a loss of approximately $46.

Provisional Copper and Gold Sales

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

London Metal Exchange (“LME”) copper prices averaged $3.25 per pound during the three months ended June 30, 2013, compared with the Company’s recorded average provisional price of $3.22 per pound before mark-to-market adjustments and treatment and refining charges. LME copper prices averaged $3.42 per pound during the six months ended June 30, 2013, compared with the Company’s recorded average provisional price of $3.38 per pound before mark-to-market adjustments and treatment and refining charges. During the three and six months ended June 30, 2013, changes in copper prices resulted in a provisional pricing mark-to-market loss of $15 ($0.27 per pound) and loss of $24 ($0.25 per pound), respectively. At June 30, 2013, Newmont had copper sales of 54 million pounds priced at an average of $3.07 per pound, subject to final pricing over the next several months.

 

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NEWMONT MINING CORPORATION

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

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

 

The average London P.M. fix for gold was $1,415 per ounce during the three months ended June 30, 2013, compared with the Company’s recorded average provisional price of $1,408 per ounce before mark-to-market adjustments and treatment and refining charges. The average London P.M. fix for gold was $1,523 per ounce during the six months ended June 30, 2013, compared to the Company’s recorded average provisional price of $1,517 per ounce before mark-to-market adjustments and treatment and refining charges. During the three and six months ended June 30, 2013, changes in gold prices resulted in a provisional pricing mark-to-market loss of $24 ($18 per ounce) and loss of $22 ($9 per ounce), respectively. At June 30, 2013, Newmont had gold sales of 88,000 ounces priced at an average of $1,192 per ounce, subject to final pricing over the next several months.

NOTE 16    INVESTMENTS

 

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

Current:

          

Marketable Equity Securities:

          

Canadian Oil Sands Ltd.

   $ 293      $ 279      $ —       $ 572  

Paladin Energy Ltd.

     60        —          (17     43  

Other

     15        3        (5     13  
  

 

 

    

 

 

    

 

 

   

 

 

 
   $ 368      $ 282      $ (22   $ 628  
  

 

 

    

 

 

    

 

 

   

 

 

 

Long-term:

          

Marketable Debt Securities:

          

Asset backed commercial paper

   $ 24      $ —        $ (2   $ 22  

Auction rate securities

     7        —          (3     4  

Corporate

     13        —          —         13  
  

 

 

    

 

 

    

 

 

   

 

 

 
     44        —          (5     39  
  

 

 

    

 

 

    

 

 

   

 

 

 

Marketable Equity Securities:

          

Gabriel Resources Ltd.

     74        —          (7     67  

Regis Resources Ltd.

     166        91        —         257  

Other

     44        2        (15     31  
  

 

 

    

 

 

    

 

 

   

 

 

 
     284        93        (22     355  
  

 

 

    

 

 

    

 

 

   

 

 

 

Other investments, at cost

     13        —          —         13  

Investment in Affiliates:

          

Euronimba Ltd.

     3        —          —         3  

Minera La Zanja S.R.L.

     75        —          —         75  
  

 

 

    

 

 

    

 

 

   

 

 

 
   $ 419      $ 93      $ (27   $ 485  
  

 

 

    

 

 

    

 

 

   

 

 

 

 

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NEWMONT MINING CORPORATION

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

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

 

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

Current:

          

Marketable Equity Securities:

          

Paladin Energy Ltd.

   $ 60      $ —        $ (3   $ 57  

Other

     17        14        (2     29  
  

 

 

    

 

 

    

 

 

   

 

 

 
   $ 77      $ 14      $ (5   $ 86  
  

 

 

    

 

 

    

 

 

   

 

 

 

Long-term:

          

Marketable Debt Securities:

          

Asset backed commercial paper

   $ 25      $ —        $ (6   $ 19  

Auction rate securities

     7        —          (2     5  

Corporate

     14        —          —         14  
  

 

 

    

 

 

    

 

 

   

 

 

 
     46        —          (8     38  
  

 

 

    

 

 

    

 

 

   

 

 

 

Marketable Equity Securities:

          

Canadian Oil Sands Trust

     310        318        —         628  

Gabriel Resources Ltd.

     78        42        —         120  

Regis Resources Ltd.

     166        352        —         518  

Other

     51        14        —         65  
  

 

 

    

 

 

    

 

 

   

 

 

 
     605        726        —         1,331  
  

 

 

    

 

 

    

 

 

   

 

 

 

Other investments, at cost

     12        —          —         12  

Investment in Affiliates:

          

Minera La Zanja S.R.L.

     65        —          —         65  
  

 

 

    

 

 

    

 

 

   

 

 

 
   $ 728      $ 726      $ (8   $ 1,446  
  

 

 

    

 

 

    

 

 

   

 

 

 

Subsequent to June 30, 2013, on July 8, 2013, the Company sold its investment in Canadian Oil Sands Trust for approximately C$608, resulting in a pretax gain of approximately $300 to be recorded in Other income, net.

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

 

     Less than 12 Months      12 Months or Greater      Total  

At June 30, 2013

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

Marketable equity securities

   $ 143      $ 44      $ —         $ —         $ 143      $ 44  

Asset backed commercial paper

     —           —           22        2        22        2  

Auction rate securities

     —           —           4        3        4        3  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   $ 143      $ 44      $ 26      $ 5      $ 169      $ 49  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     Less than 12 Months      12 Months or Greater      Total  

At December 31, 2012

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

Marketable equity securities

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

Asset backed commercial paper

     —           —           19        6        19        6  

Auction rate securities

     —           —           5        2        5        2  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

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

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

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NEWMONT MINING CORPORATION

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

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

 

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

NOTE 17    INVENTORIES

 

     At June 30,
2013
     At December 31,
2012
 

In-process

   $ 110      $ 143  

Concentrate

     153        152  

Precious metals

     29        31  

Materials, supplies and other

     511        470  
  

 

 

    

 

 

 
   $ 803      $ 796  
  

 

 

    

 

 

 

The Company recorded write-downs of $12 and $3, classified as components of Costs applicable to sales and Amortization, respectively, for the first half of 2013, to reduce the carrying value of inventories to net realizable value. Of the write-downs in 2013, $1 is related to Nevada, $7 to Boddington, $1 to Other Australia/New Zealand and $6 to Batu Hijau.

NOTE 18    STOCKPILES AND ORE ON LEACH PADS

 

     At June 30,
2013
     At December 31,
2012
 

Current:

     

Stockpiles

   $ 517      $ 602  

Ore on leach pads

     221        184  
  

 

 

    

 

 

 
   $ 738      $ 786  
  

 

 

    

 

 

 

Long-term:

     

Stockpiles

   $ 2,475      $ 2,514  

Ore on leach pads

     254        382  
  

 

 

    

 

 

 
   $ 2,729      $ 2,896  
  

 

 

    

 

 

 

 

     At June 30,
2013
     At December 31,
2012
 

Stockpiles and ore on leach pads:

     

Nevada

   $ 829      $ 699  

La Herradura

     78        57  

Yanacocha

     504        498  

Boddington

     389        474  

Batu Hijau

     1,289        1,543  

Other Australia/New Zealand

     115        173  

Ahafo

     252        235  

Akyem

     11        3  
  

 

 

    

 

 

 
   $ 3,467      $ 3,682  
  

 

 

    

 

 

 

 

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Table of Contents

NEWMONT MINING CORPORATION

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

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

 

The Company recorded write-downs of $555 and $126, classified as components of Costs applicable to sales and Amortization, respectively, for the first half of 2013 to reduce the carrying value of stockpiles and ore on leach pads to net realizable value. The Company recorded write-downs of $22 for the first half of 2012. Of the write-downs in 2013, $83 are related to Yanacocha, $105 to Boddington, $54 to Other Australia/New Zealand and $439 to Batu Hijau. Of the write-downs in 2012, $20 are related to Other Australia/New Zealand and $2 related to Yanacocha.

NOTE 19    OTHER ASSETS

 

     At June 30,
2013
     At December 31,
2012
 

Other current assets:

     

Refinery metal inventory and receivable

   $ 530      $ 1,183  

Prepaid assets

     200        213  

Derivative instruments

     16        112  

Restricted cash

     —          12  

Other

&