10-Q 1 nem-20150930x10q.htm 10-Q nem_Current folio_10Q_Taxonomy2015

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

 


 

Form 10-Q

 


(Mark One)

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

For the Quarterly Period Ended September 30, 2015

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

 


Corporate_2CLR_POS 

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

 

 

Greenwood Village, Colorado

 

80111

(Address of Principal Executive Offices)

 

(Zip Code)

 

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.      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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).      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.

 

 

 

 

 

 

 

 

Large accelerated filer

 

 

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       No

 

There were 529,117,504 shares of common stock outstanding on October 22, 2015.

 

 

 


 

TABLE OF CONTENTS

 

 

 

 

 

 

 

 

 

Page

 

 

PART I

 

 

ITEM 1. 

 

FINANCIAL STATEMENTS

 

 

 

Condensed Consolidated Statements of Income

 

 

 

Condensed Consolidated Statements of Comprehensive Income

 

 

 

Condensed Consolidated Statements of Cash Flows

 

 

 

Condensed Consolidated Balance Sheets

 

 

 

Notes to Condensed Consolidated Financial Statements

 

ITEM 2. 

 

MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION

 

42 

 

 

Overview

 

42 

 

 

Selected Financial and Operating Results

 

45 

 

 

Consolidated Financial Results

 

45 

 

 

Results of Consolidated Operations

 

51 

 

 

Liquidity and Capital Resources

 

58 

 

 

Environmental

 

61 

 

 

Accounting Developments

 

62 

 

 

Non-GAAP Financial Measures

 

63 

 

 

Safe Harbor Statement

 

71 

ITEM 3. 

 

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

73 

ITEM 4. 

 

CONTROLS AND PROCEDURES

 

75 

 

 

PART II

 

 

ITEM 1. 

 

LEGAL PROCEEDINGS

 

76 

ITEM 1A. 

 

RISK FACTORS

 

76 

ITEM 2. 

 

ISSUER PURCHASES OF EQUITY SECURITIES

 

76 

ITEM 3. 

 

DEFAULTS UPON SENIOR SECURITIES

 

76 

ITEM 4. 

 

MINE SAFETY DISCLOSURES

 

76 

ITEM 5. 

 

OTHER INFORMATION

 

77 

ITEM 6. 

 

EXHIBITS

 

77 

SIGNATURES 

 

78 

EXHIBIT INDEX 

 

79 

 

 

 

 


 

PART I—FINANCIAL INFORMATION

 

ITEM 1.FINANCIAL STATEMENTS.

 

NEWMONT MINING CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME  

(unaudited, in millions except per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended 

 

Nine Months Ended 

 

 

 

September 30, 

 

September 30, 

 

 

    

2015

    

2014

    

2015

    

2014

  

Sales

 

$

2,033

 

$

1,746

 

$

5,913

 

$

5,275

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs applicable to sales (1) 

 

 

1,133

 

 

1,185

 

 

3,171

 

 

3,328

 

Depreciation and amortization

 

 

331

 

 

318

 

 

896

 

 

922

 

Reclamation and remediation (Note 4)

 

 

25

 

 

20

 

 

74

 

 

61

 

Exploration 

 

 

34

 

 

44

 

 

115

 

 

119

 

Advanced projects, research and development

 

 

32

 

 

36

 

 

93

 

 

120

 

General and administrative 

 

 

43

 

 

45

 

 

138

 

 

138

 

Other expense, net (Note 5)

 

 

57

 

 

63

 

 

148

 

 

179

 

 

 

 

1,655

 

 

1,711

 

 

4,635

 

 

4,867

 

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income, net (Note 6)

 

 

140

 

 

79

 

 

128

 

 

128

 

Interest expense, net

 

 

(81)

 

 

(89)

 

 

(248)

 

 

(276)

 

 

 

 

59

 

 

(10)

 

 

(120)

 

 

(148)

 

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

 

 

437

 

 

25

 

 

1,158

 

 

260

 

Income and mining tax benefit (expense) (Note 7)

 

 

(151)

 

 

47

 

 

(496)

 

 

22

 

Equity income (loss) of affiliates

 

 

(18)

 

 

 —

 

 

(34)

 

 

2

 

Income (loss) from continuing operations 

 

 

268

 

 

72

 

 

628

 

 

284

 

Income (loss) from discontinued operations (Note 8)

 

 

17

 

 

3

 

 

34

 

 

(16)

 

Net income (loss)

 

 

285

 

 

75

 

 

662

 

 

268

 

Net loss (income) attributable to noncontrolling interests (Note 9)

 

 

(66)

 

 

138

 

 

(188)

 

 

225

 

Net income (loss) attributable to Newmont stockholders 

 

$

219

 

$

213

 

$

474

 

$

493

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to Newmont stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations 

 

$

202

 

$

210

 

$

440

 

$

509

 

Discontinued operations 

 

 

17

 

 

3

 

 

34

 

 

(16)

 

 

 

$

219

 

$

213

 

$

474

 

$

493

 

Income (loss) per common share (Note 10)

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic:

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations 

 

$

0.38

 

$

0.42

 

$

0.86

 

$

1.02

 

Discontinued operations 

 

 

0.04

 

 

0.01

 

 

0.07

 

 

(0.03)

 

 

 

$

0.42

 

$

0.43

 

$

0.93

 

$

0.99

 

Diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations 

 

$

0.38

 

$

0.42

 

$

0.86

 

$

1.02

 

Discontinued operations 

 

 

0.04

 

 

0.01

 

 

0.07

 

 

(0.03)

 

 

 

$

0.42

 

$

0.43

 

$

0.93

 

$

0.99

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per common share 

 

$

0.025

 

$

0.025

 

$

0.075

 

$

0.200

 

 


(1)

Excludes Depreciation and amortization and Reclamation and remediation. 

 

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

1


 

NEWMONT MINING CORPORATION

 

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME 

(unaudited, in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 

 

Nine Months Ended September 30, 

 

 

    

2015

    

2014

    

2015

    

2014

  

Net income (loss)

  

$

285

  

$

75

    

$

662

  

$

268

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain (loss) on marketable securities, net of $(1), $nil, $(1) and $(1) tax benefit (expense), respectively

 

 

63

 

 

(24)

 

 

56

 

 

(110)

 

Foreign currency translation adjustments 

 

 

(3)

 

 

(11)

 

 

(8)

 

 

(9)

 

Change in pension and other post-retirement benefits, net of $(1), $(1), $(23) and $(3), tax benefit (expense), respectively

 

 

1

 

 

4

 

 

45

 

 

7

 

Change in fair value of cash flow hedge instruments, net of $3, $(33), $nil and $(20), tax benefit (expense), respectively

 

 

 

 

 

 

 

 

 

 

 

 

 

Net change from periodic revaluations 

 

 

(26)

 

 

(38)

 

 

(43)

 

 

(4)

 

Net amount reclassified to income 

 

 

16

 

 

1

 

 

39

 

 

(12)

 

Net unrecognized gain (loss) on hedges

 

 

(10)

 

 

(37)

 

 

(4)

 

 

(16)

 

Other comprehensive income (loss)

 

 

51

 

 

(68)

 

 

89

 

 

(128)

 

Comprehensive income (loss)

 

$

336

 

$

7

 

$

751

 

$

140

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income (loss) attributable to:

 

 

 

 

 

 

 

 

 

 

 

 

 

Newmont stockholders 

 

$

270

 

$

145

 

$

563

 

$

365

 

Noncontrolling interests

 

 

66

 

 

(138)

 

 

188

 

 

(225)

 

 

 

$

336

 

$

7

 

$

751

 

$

140

 

 

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

 

 

2


 

NEWMONT MINING CORPORATION

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 

(unaudited, in millions)

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 

 

 

    

2015

    

2014

 

Operating activities:

 

 

 

  

 

 

 

Net income

    

$

662

  

$

268

 

Adjustments:

 

 

 

  

 

 

 

Depreciation and amortization

 

 

896

  

 

922

 

Stock based compensation and other non-cash benefits 

 

 

58

 

 

42

 

Reclamation and remediation

 

 

70

 

 

61

 

Loss (income) from discontinued operations

 

 

(34)

 

 

16

 

Impairment of investments

 

 

102

 

 

4

 

Deferred income taxes 

 

 

212

  

 

(183)

 

Gain on asset and investment sales, net

 

 

(109)

 

 

(92)

 

Gain on deconsolidation of TMAC

 

 

(76)

 

 

 —

 

Other operating adjustments and write-downs 

 

 

254

 

 

525

 

Net change in operating assets and liabilities (Note 24)

 

 

(153)

  

 

(674)

 

Net cash provided by continuing operations 

 

 

1,882

  

 

889

 

Net cash used in discontinued operations

 

 

(9)

  

 

(10)

 

Net cash provided by operations 

 

 

1,873

  

 

879

 

Investing activities:

 

 

 

  

 

 

 

Additions to property, plant and mine development 

 

 

(941)

  

 

(766)

 

Acquisitions, net (Note 13)

 

 

(819)

  

 

(28)

 

Sales of investments

 

 

29

 

 

25

 

Proceeds from sale of other assets

 

 

126

 

 

191

 

Other 

 

 

(47)

  

 

(14)

 

Net cash used in investing activities 

 

 

(1,652)

  

 

(592)

 

Financing activities:

 

 

 

  

 

 

 

Proceeds from debt, net

 

 

 —

 

 

596

 

Repayment of debt 

 

 

(332)

  

 

(581)

 

Proceeds from stock issuance, net

 

 

675

 

 

 —

 

Sale of noncontrolling interests

 

 

37

 

 

71

 

Funding from noncontrolling interests

 

 

89

 

 

 —

 

Acquisition of noncontrolling interests

 

 

(8)

 

 

(6)

 

Dividends paid to noncontrolling interests 

 

 

(3)

  

 

(4)

 

Dividends paid to common stockholders 

 

 

(38)

  

 

(102)

 

Restricted cash and other

 

 

(59)

  

 

(27)

 

Net cash provided by (used in) financing activities

 

 

361

 

 

(53)

 

Effect of exchange rate changes on cash 

 

 

(21)

  

 

(11)

 

Net change in cash and cash equivalents 

 

 

561

  

 

223

 

Cash and cash equivalents at beginning of period 

 

 

2,403

  

 

1,555

 

Cash and cash equivalents at end of period 

 

$

2,964

  

$

1,778

 

 

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

 

3


 

NEWMONT MINING CORPORATION

 

CONDENSED CONSOLIDATED BALANCE SHEETS 

(unaudited, in millions)

 

 

 

 

 

 

 

 

 

 

 

At September 30, 

 

At December 31, 

 

 

    

2015

    

2014

 

ASSETS

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

2,964

 

$

2,403

 

Trade receivables

 

 

175

 

 

186

 

Other accounts receivables

 

 

174

 

 

290

 

Investments (Note 16)

 

 

25

 

 

73

 

Inventories (Note 17)

 

 

766

 

 

700

 

Stockpiles and ore on leach pads (Note 18)

 

 

782

 

 

666

 

Deferred income tax assets

 

 

193

 

 

240

 

Other current assets (Note 19)

 

 

116

 

 

881

 

Current assets

 

 

5,195

 

 

5,439

 

Property, plant and mine development, net

 

 

14,335

 

 

13,650

 

Investments (Note 16)

 

 

378

 

 

334

 

Stockpiles and ore on leach pads (Note 18)

 

 

3,014

 

 

2,820

 

Deferred income tax assets

 

 

1,704

 

 

1,790

 

Other long-term assets (Note 19)

 

 

928

 

 

883

 

Total assets

 

$

25,554

 

$

24,916

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

Debt (Note 20)

 

$

266

 

$

166

 

Accounts payable

 

 

435

 

 

406

 

Employee-related benefits

 

 

254

 

 

307

 

Income and mining taxes

 

 

119

 

 

74

 

Other current liabilities (Note 21)

 

 

617

 

 

1,245

 

Current liabilities

 

 

1,691

 

 

2,198

 

Debt (Note 20)

 

 

6,085

 

 

6,480

 

Reclamation and remediation liabilities (Note 4)

 

 

1,712

 

 

1,606

 

Deferred income tax liabilities

 

 

763

 

 

656

 

Employee-related benefits

 

 

419

 

 

492

 

Other long-term liabilities (Note 21)

 

 

315

 

 

395

 

Total liabilities

 

 

10,985

 

 

11,827

 

Commitments and contingencies (Note 26)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EQUITY

 

 

 

 

 

 

 

Common stock

 

 

846

 

 

798

 

Additional paid-in capital

 

 

9,409

 

 

8,712

 

Accumulated other comprehensive income (loss)

 

 

(389)

 

 

(478)

 

Retained earnings

 

 

1,678

 

 

1,242

 

Newmont stockholders' equity

 

 

11,544

 

 

10,274

 

Noncontrolling interests

 

 

3,025

 

 

2,815

 

Total equity

 

 

14,569

 

 

13,089

 

Total liabilities and equity

 

$

25,554

 

$

24,916

 

 

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

 

 

 

4


 

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, 2014 filed on February 20, 2015 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$” refer to Australian currency, “NZ$” to New Zealand currency, and “C$” to Canadian currency.

 

During the second quarter of 2015, the Company received $675 in net proceeds from a common stock issuance. Newmont used the proceeds, supplemented with cash from the Company’s balance sheet, to fund the acquisition of the Cripple Creek & Victor gold mining business (“CC&V”) in Colorado from AngloGold Ashanti Limited, which was completed on August 3, 2015, for a purchase consideration of $821, plus a 2.5% net smelter return royalty from potential future underground ore which has no fair value at September 30, 2015. Refer to Note 13 for further information.

 

On March 12, 2013, Newmont completed the sale of the Hope Bay Project to TMAC Resources Inc. (“TMAC”). On July 7, 2015, TMAC completed an initial public offering (“IPO”), issuing 22,500,000 common shares at a price of C$6.00 per common share for aggregate gross proceeds of C$135. Additionally, TMAC entered into a term loan facility for $120. At September 30, 2015, Newmont held a 29.38% ownership interest in TMAC. Prior to the financing events, Newmont identified TMAC as a Variable Interest Entity (“VIE”) under Accounting Standards Codification (“ASC”) guidance for consolidation, determined it was the primary beneficiary, and consolidated TMAC in its Consolidated Financial Statements. Upon further evaluation subsequent to the financing events, Newmont determined that TMAC is no longer considered a VIE, and no longer will be consolidated into Newmont’s financial results. Newmont deconsolidated the assets, liabilities, and non-controlling interest related to TMAC and recognized a gain of $76, recorded within Other income, net. The fair value of the retained investment was valued utilizing the market approach applying the IPO share price. Newmont’s retained investment in TMAC, which was $104 at September 30, 2015, will be accounted for as an equity method investment reflected in Note 16.

 

On July 24, 2015, Newmont completed the sale of its 60.64% ownership interest in European Gold Refinery Holdings (“EGR”) for total cash proceeds of $119. The gain of $53 was recorded in Other income, net.  

 

Certain amounts in prior years have been reclassified to conform to the 2015 presentation and were not material to the financial statements.

 

NOTE 2     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Risks and Uncertainties

 

As a global mining company, our revenue, profitability and future rate of growth are substantially dependent on prevailing prices for gold, copper and, to a lesser extent, silver. Historically, the commodity markets have been very volatile, and there can be no assurance that commodity prices will not be subject to wide fluctuations in the future. A substantial or extended decline in commodity prices could have a material adverse effect on our financial position, results of operations, cash flows, access to capital and on the quantities of reserves that we can economically produce. The carrying value of our property, plant and mine development assets, inventories, stockpiles and ore on leach pads, and

5


 

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)

deferred tax assets are particularly sensitive to the outlook for commodity prices. A decline in our long term price outlook from current levels could result in material impairment charges related to these assets.

 

In September 2014, PT Newmont Nusa Tenggara (“PTNNT”) and the Government of Indonesia signed a Memorandum of Understanding (“MoU”) that resulted in PTNNT receiving a six-month permit to export copper concentrate from the Batu Hijau mine (“Batu Hijau”) that expired in mid-March 2015. On March 30, 2015, PTNNT received a six-month permit extension to export copper concentrate that expired in late September 2015. A permit renewal application was submitted in August 2015 and renewal remains pending. Supplemental information regarding domestic smelting development progress via MoU with PT Freeport Indonesia was finalized and submitted in September 2015. All required information has been submitted to the Government of Indonesia. Effective with the signing of the MoU, PTNNT agreed to pay certain export duties and royalties. The MoU also outlines terms for the six main elements of the Contract of Work renegotiation, which will be incorporated into an amendment of the Contract of Work. The six areas are: concession area size; royalties, taxes and export duties; domestic processing and refining; ownership divestment; utilization of local manpower, domestic goods and services; and duration of the Contract of Work. Negotiations between PTNNT and the Government of Indonesia to amend the Contract of Work remain on-going. No assurances can be made at this time with respect to the outcome of such negotiations and the renewal of the export permit. The failure to receive a timely renewal may negatively impact future operations and financial results at Batu Hijau. As a result of the on-going Contract of Work renegotiations at Batu Hijau, the need for asset impairments, inventory write-downs, tax valuation allowances and other applicable accounting charges will continue to be evaluated. At this time, the Company expects operations to continue into the future. The total assets at Batu Hijau as of September 30, 2015 and December 31, 2014 were $3,462 and $3,107, respectively.

 

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the accounting for and recognition and disclosure of assets, liabilities, equity, revenues and expenses. The Company must make these estimates and assumptions because certain information used is dependent on future events, cannot be calculated with a high degree of precision from data available or simply cannot be readily calculated based on generally accepted methodologies. Actual results could differ from these estimates.

 

Recently Adopted Accounting Pronouncements

 

Business combinations

 

In September 2015, the Financial Accounting Services Board issued Accounting Standards Update (“ASU”) guidance related to accounting for measurement-period adjustments in a business combination. This update simplifies the measurement-period adjustments by requiring that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined, and not retrospectively. This update also requires the separate presentation on the face of the statement of income, or disclosure in the notes to the financial statements, the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. The Company early adopted this guidance prospectively as of September 30, 2015. As applicable, adoption of the new guidance will impact the consolidated financial position, results of operations and cash flows.

 

Stock-based compensation

 

In June 2014, ASU guidance was issued to resolve the diversity of practice relating to the accounting for stock-based performance awards for which the performance target could be achieved after the employee completes the required service period. Adoption of the new guidance, effective for the fiscal year beginning January 1, 2015, had no impact on the consolidated financial position, results of operations or cash flows.

6


 

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)

 

Recently Issued Accounting Pronouncements

 

Inventory

 

In July 2015, ASU guidance was issued related to inventory simplifying the subsequent measurement of inventories by replacing the lower of cost or market test with a lower of cost and net realizable value test. The update is effective in fiscal years, including interim periods, beginning after December 15, 2016, and early adoption is permitted. The Company is currently evaluating this guidance and the impact it will have on the consolidated financial position, results of operations or cash flows.

 

Employee benefit plan accounting

 

In July 2015, ASU guidance was issued related to defined benefit pension plans, defined contribution pension plans, and health and welfare benefit plans. This update designates contract value as the only required measure for fully benefit-responsive investment contracts, simplifies and makes more effective the investment disclosure requirements for employee benefit plans, and provides a simplified method for determining the measurement date for employee benefit plans. The update is effective in fiscal years, including interim periods, beginning after December 15, 2015, and early adoption is permitted. The Company is currently evaluating this guidance and the impact it will have on the consolidated financial position, results of operations or cash flows.

 

Debt issuance costs

 

In April 2015, and further amended in August 2015, ASU guidance was issued related to debt issuance costs. This update simplifies the presentation of debt issuance costs by requiring debt issuance costs to be presented as a deduction from the corresponding debt liability. The update is effective in fiscal years, including interim periods, beginning after December 15, 2015, and early adoption is permitted. The Company is currently evaluating this guidance and the impact it will have on the consolidated financial position, results of operations or cash flows.

 

Consolidations

 

In February 2015, ASU guidance was issued related to consolidations. This update makes some targeted changes to current consolidation guidance and impacts both the voting and the variable interest consolidation models. In particular, the update will change how companies determine whether limited partnerships or similar entities are variable interest entities. The update is effective in fiscal years, including interim periods, beginning after December 15, 2015, and early adoption is permitted. We currently consolidate certain variable interest entities and we do not expect the updated guidance to have an impact on the consolidated financial position, results of operations or cash flows.

 

Revenue recognition

 

In May 2014, ASU guidance was issued related to revenue from contracts with customers. The new standard provides a five-step approach to be applied to all contracts with customers and also requires expanded disclosures about revenue recognition. In August 2015, the effective date was deferred to reporting periods, including interim periods, beginning after December 15, 2017, and will be applied retrospectively. Early adoption is not permitted. The Company is currently evaluating this guidance and the impact it will have on the consolidated financial position, results of operations or cash flows.

 

7


 

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 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. In the first quarter of 2015, the Australia/New Zealand and Indonesia geographic regions were combined into one Asia Pacific geographic region. Geographic regions include North America, South America, Asia Pacific, Africa, and Corporate and Other.

 

On June 5, 2015, the Company entered into an agreement with OceanaGold Corporation to sell its Waihi mine in New Zealand for approximately $101. The Waihi sale has been approved by New Zealand regulators and is expected to close in the fourth quarter of 2015. As of September 30, 2015, total assets and total liabilities were $138 and $52, respectively.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

  

 

 

 

 

 

 

Advanced

  

 

 

  

 

 

 

 

Costs

 

Depreciation

 

Projects, Research

 

PreTax

 

 

 

 

 

 

Applicable

 

and

 

and Development 

 

Income

 

 

    

Sales

    

to Sales

    

Amortization

    

and Exploration

    

(Loss)

 

Three Months Ended September 30, 2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Carlin

    

$

261

 

$

208

 

$

54

 

$

5

 

$

(9)

 

Phoenix:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gold

 

 

63

 

 

48

 

 

13

 

 

 

 

 

 

 

Copper

 

 

30

 

 

27

 

 

6

 

 

 

 

 

 

 

Total Phoenix

 

 

93

 

 

75

 

 

19

 

 

1

 

 

(4)

 

Twin Creeks

 

 

134

 

 

66

 

 

13

 

 

2

 

 

52

 

CC&V (1)

 

 

38

 

 

10

 

 

6

 

 

1

 

 

20

 

Other North America

 

 

 —

 

 

 —

 

 

1

 

 

7

 

 

2

 

North America

 

 

526

 

 

359

 

 

93

 

 

16

 

 

61

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Yanacocha

 

 

288

 

 

158

 

 

88

 

 

9

 

 

13

 

Other South America

 

 

 —

 

 

 —

 

 

3

 

 

10

 

 

(13)

 

South America

 

 

288

 

 

158

 

 

91

 

 

19

 

 

 —

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Boddington:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gold

 

 

224

 

 

131

 

 

27

 

 

 

 

 

 

 

Copper

 

 

36

 

 

33

 

 

6

 

 

 

 

 

 

 

Total Boddington

 

 

260

 

 

164

 

 

33

 

 

 —

 

 

68

 

Tanami

 

 

141

 

 

54

 

 

22

 

 

2

 

 

66

 

Waihi

 

 

32

 

 

12

 

 

4

 

 

1

 

 

14

 

Kalgoorlie

 

 

95

 

 

68

 

 

5

 

 

1

 

 

24

 

Batu Hijau:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gold

 

 

214

 

 

83

 

 

15

 

 

 

 

 

 

 

Copper

 

 

259

 

 

133

 

 

24

 

 

 

 

 

 

 

Total Batu Hijau

 

 

473

 

 

216

 

 

39

 

 

1

 

 

199

 

Other Asia Pacific

 

 

 —

 

 

 —

 

 

4

 

 

1

 

 

(10)

 

Asia Pacific

 

 

1,001

 

 

514

 

 

107

 

 

6

 

 

361

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ahafo

 

 

89

 

 

50

 

 

11

 

 

5

 

 

22

 

Akyem

 

 

129

 

 

52

 

 

24

 

 

2

 

 

51

 

Other Africa

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(7)

 

Africa

 

 

218

 

 

102

 

 

35

 

 

7

 

 

66

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate and Other

 

 

 —

 

 

 —

 

 

5

 

 

18

 

 

(51)

 

Consolidated

 

$

2,033

 

$

1,133

 

$

331

 

$

66

 

$

437

 

 


(1)

The Company acquired the CC&V gold mining business on August 3, 2015.

 

8


 

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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

Advanced

  

 

 

 

 

  

 

 

Costs

 

Depreciation

 

Projects, Research

 

PreTax

  

 

 

 

 

 

Applicable

 

and

 

and Development 

 

Income

 

 

    

Sales

    

to Sales

    

Amortization

    

and Exploration

    

(Loss)

 

Three Months Ended September 30, 2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Carlin

    

$

304

 

$

206

 

$

40

 

$

5

 

$

49

 

Phoenix:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gold

 

 

78

 

 

47

 

 

9

 

 

 

 

 

 

 

Copper

 

 

34

 

 

25

 

 

4

 

 

 

 

 

 

 

Total Phoenix

 

 

112

 

 

72

 

 

13

 

 

3

 

 

20

 

Twin Creeks

 

 

116

 

 

43

 

 

7

 

 

 —

 

 

65

 

La Herradura (1)

 

 

58

 

 

44

 

 

10

 

 

5

 

 

(1)

 

Other North America

 

 

 —

 

 

 —

 

 

 —

 

 

8

 

 

5

 

North America

 

 

590

 

 

365

 

 

70

 

 

21

 

 

138

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Yanacocha

 

 

314

 

 

125

 

 

74

 

 

8

 

 

93

 

Other South America

 

 

 —

 

 

 —

 

 

 —

 

 

9

 

 

(9)

 

South America

 

 

314

 

 

125

 

 

74

 

 

17

 

 

84

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Boddington:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gold

 

 

201

 

 

150

 

 

26

 

 

 

 

 

 

 

Copper

 

 

44

 

 

40

 

 

6

 

 

 

 

 

 

 

Total Boddington

 

 

245

 

 

190

 

 

32

 

 

 —

 

 

29

 

Tanami

 

 

100

 

 

67

 

 

17

 

 

3

 

 

16

 

Jundee (2)

 

 

2

 

 

 —

 

 

 —

 

 

 —

 

 

25

 

Waihi

 

 

47

 

 

20

 

 

7

 

 

3

 

 

19

 

Kalgoorlie

 

 

102

 

 

71

 

 

4

 

 

1

 

 

30

 

Batu Hijau:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gold

 

 

9

 

 

26

 

 

8

 

 

 

 

 

 

 

Copper

 

 

61

 

 

227

 

 

64

 

 

 

 

 

 

 

Total Batu Hijau

 

 

70

 

 

253

 

 

72

 

 

 —

 

 

(272)

 

Other Asia Pacific

 

 

 —

 

 

 —

 

 

4

 

 

1

 

 

(18)

 

Asia Pacific

 

 

566

 

 

601

 

 

136

 

 

8

 

 

(171)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ahafo

 

 

138

 

 

56

 

 

13

 

 

4

 

 

66

 

Akyem

 

 

138

 

 

38

 

 

20

 

 

 —

 

 

78

 

Other Africa

 

 

 —

 

 

 —

 

 

 —

 

 

1

 

 

(3)

 

Africa

 

 

276

 

 

94

 

 

33

 

 

5

 

 

141