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NOTE 1 THE COMPANY
Newmont Mining Corporation and its affiliates and subsidiaries (collectively, “Newmont” or the “Company”) predominantly operates in the mining industry, focused on the exploration for and production of gold and copper. The Company has significant assets in the United States, Australia, Peru, Indonesia, Ghana, New Zealand and Mexico. The cash flow and profitability of the Company's operations are significantly affected by the market price of gold, and to a lesser extent, copper. The prices of gold and copper are affected by numerous factors beyond the Company's control.
References to “A$” refers to Australian currency, “C$” to Canadian currency and “NZ$” to New Zealand currency.
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NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
The Company's Consolidated Financial Statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”). The preparation of the Company's Consolidated Financial Statements requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and the related disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. The more significant areas requiring the use of management estimates and assumptions relate to mineral reserves that are the basis for future cash flow estimates utilized in impairment calculations and units-of-production amortization calculations; environmental, reclamation and closure obligations; estimates of recoverable gold and other minerals in stockpile and leach pad inventories; estimates of fair value for certain reporting units and asset impairments (including impairments of goodwill, long-lived assets and investments); write-downs of inventory, stockpiles and ore on leach pads to net realizable value; post-employment, post-retirement and other employee benefit liabilities; valuation allowances for deferred tax assets; reserves for contingencies and litigation; and the fair value and accounting treatment of financial instruments including marketable securities and derivative instruments. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Accordingly, actual results will differ from these amounts estimated in these financial statements.
Principles of Consolidation
The Consolidated Financial Statements include the accounts of Newmont Mining Corporation and more-than-50%-owned subsidiaries that it controls and entities over which control is achieved through means other than voting rights. The Company also includes its pro-rata share of assets, liabilities and operations for unincorporated joint ventures in which it has an interest. All significant intercompany balances and transactions have been eliminated. The functional currency for the majority of the Company's operations, including the Australian operations, is the U.S. dollar.
The Company follows FASB Accounting Standards Codification (“ASC”) guidance for identification and reporting of entities over which control is achieved through means other than voting rights. The guidance defines such entities as Variable Interest Entities (“VIEs”). The Company has identified VIEs in connection with our interests in PT Newmont Nusa Tenggara (“PTNNT” or “Batu Hijau”) due to certain funding arrangements and shareholder commitments. The Company has financing arrangements with PT Pukuafu Indah (“PTPI”) and PT Indonesia Masbaga Investama (“PTIMI”), unrelated noncontrolling shareholders of PTNNT, whereby the Company agreed to advance certain funds to them in exchange for (i) a pledge of their combined 20% share of PTNNT, (ii) an assignment of dividends payable on the shares, net of withholding tax, (iii) a commitment from them to support the application of our standards to the operation of Batu Hijau and (iv) as of September 16, 2011 in respect of PTPI only, powers of attorney to vote and sell PTNNT shares in support of the pledge, enforceable in an event of default as further security for the funding. The Company has determined itself to be the primary beneficiary of these entities, controls the operations of Batu Hijau and has the obligation to absorb losses and the right to receive benefits that are significant to PTNNT. Therefore, the Company consolidates PTNNT in its financial statements.
Cash and Cash Equivalents
Cash and cash equivalents consist of all cash balances and highly liquid investments with an original maturity of three months or less. Because of the short maturity of these investments, the carrying amounts approximate their fair value. Cash and cash equivalents are invested in United States Treasury securities and money market securities. Restricted cash is excluded from cash and cash equivalents and is included in other current and long-term assets.
Investments
Management determines the appropriate classification of its investments in equity securities at the time of purchase and reevaluates such determinations at each reporting date. Investments in incorporated entities in which the Company's ownership is greater than 20% and less than 50%, or which the Company does not control through majority ownership or means other than voting rights, are accounted for by the equity method and are included in long-term assets. The Company accounts for its marketable security investments as available for sale securities in accordance with ASC guidance on accounting for certain investments in debt and equity securities. The Company periodically evaluates whether declines in fair values of its investments below the Company's carrying value are other-than-temporary in accordance with ASC guidance. The Company's policy is to generally treat a decline in the investment's quoted market value that has lasted continuously for more than six months as an other-than-temporary decline in value. The Company also monitors its investments for events or changes in circumstances that have occurred that may have a significant adverse effect on the fair value of the investment and evaluates qualitative and quantitative factors regarding the severity and duration of the unrealized loss and the Company's ability to hold the investment until a forecasted recovery occurs to determine if the decline in value of an investment is other-than-temporary. Declines in fair value below the Company's carrying value deemed to be other-than-temporary are charged to earnings.
Stockpiles, Ore on Leach Pads and Inventories
As described below, costs that are incurred in or benefit the productive process are accumulated as stockpiles, ore on leach pads and inventories. Stockpiles, ore on leach pads and inventories are carried at the lower of average cost or net realizable value. Net realizable value represents the estimated future sales price of the product based on current and long-term metals prices, less the estimated costs to complete production and bring the product to sale. Write-downs of stockpiles, ore on leach pads and inventories to net realizable value are reported as a component of Costs applicable to sales. The current portion of stockpiles, ore on leach pads and inventories is determined based on the expected amounts to be processed within the next 12 months. Stockpiles, ore on leach pads and inventories not expected to be processed within the next 12 months are classified as long-term. The major classifications are as follows:
Stockpiles
Stockpiles represent ore that has been extracted from the mine and is available for further processing. Stockpiles are measured by estimating the number of tons added and removed from the stockpile, the number of contained ounces or pounds (based on assay data) and the estimated metallurgical recovery rates (based on the expected processing method). Stockpile ore tonnages are verified by periodic surveys. Costs are allocated to stockpiles based on current mining costs incurred including applicable overhead and amortization relating to mining operations, and removed at each stockpile's average cost per recoverable unit.
Ore on Leach Pads
The recovery of gold from certain gold oxide ores is achieved through the heap leaching process. Under this method, oxide ore is placed on leach pads where it is treated with a chemical solution, which dissolves the gold contained in the ore. The resulting gold-bearing solution is further processed in a plant where the gold is recovered. Costs are added to ore on leach pads based on current mining costs, including applicable amortization relating to mining operations. Costs are removed from ore on leach pads as ounces are recovered based on the average cost per estimated recoverable ounce of gold on the leach pad.
The estimates of recoverable gold on the leach pads are calculated from the quantities of ore placed on the leach pads (measured tons added to the leach pads), the grade of ore placed on the leach pads (based on assay data) and a recovery percentage (based on ore type). In general, leach pads recover between 50% and 95% of the recoverable ounces in the first year of leaching, declining each year thereafter until the leaching process is complete.
Although the quantities of recoverable gold placed on the leach pads are reconciled by comparing the grades of ore placed on pads to the quantities of gold actually recovered (metallurgical balancing), the nature of the leaching process inherently limits the ability to precisely monitor inventory levels. As a result, the metallurgical balancing process is constantly monitored and estimates are refined based on actual results over time. Historically, the Company's operating results have not been materially impacted by variations between the estimated and actual recoverable quantities of gold on its leach pads. Variations between actual and estimated quantities resulting from changes in assumptions and estimates that do not result in write-downs to net realizable value are accounted for on a prospective basis.
In-process Inventory
In-process inventories represent materials that are currently in the process of being converted to a saleable product. Conversion processes vary depending on the nature of the ore and the specific processing facility, but include mill in-circuit, flotation, leach and carbon-in-leach in circuits. In-process material is measured based on assays of the material fed into the process and the projected recoveries of the respective plants. In-process inventories are valued at the average cost of the material fed into the process attributable to the source material coming from the mines, stockpiles and/or leach pads plus the in-process conversion costs, including applicable amortization relating to the process facilities incurred to that point in the process.
Precious Metals Inventory
Precious metals inventories include gold doré and/or gold bullion. Precious metals that result from the Company's mining and processing activities are valued at the average cost of the respective in-process inventories incurred prior to the refining process, plus applicable refining costs.
Concentrate Inventory
Concentrate inventories represent copper and gold concentrate available for shipment or in transit for further processing when the sales process has not been completed. The Company values concentrate inventory at the average cost, including an allocable portion of support costs and amortization. Costs are added and removed to the concentrate inventory based on tons of concentrate and are valued at the lower of average cost or net realizable value.
Materials and Supplies
Materials and supplies are valued at the lower of average cost or net realizable value. Cost includes applicable taxes and freight.
Property, Plant and Mine Development
Facilities and equipment
Expenditures for new facilities or equipment and expenditures that extend the useful lives of existing facilities or equipment are capitalized and recorded at cost. The facilities and equipment are amortized using the straight-line method at rates sufficient to amortize such costs over the estimated productive lives of such facilities. These estimated productive lives do not exceed the related estimated mine lives, which are based on proven and probable reserves.
Mine Development
Mine development costs include engineering and metallurgical studies, drilling and other related costs to delineate an ore body, the removal of overburden to initially expose an ore body at open pit surface mines and the building of access ways, shafts, lateral access, drifts, ramps and other infrastructure at underground mines. Costs incurred before mineralization is classified as proven and probable reserves are expensed and classified as Exploration or Advanced projects, research and development expense. Capitalization of mine development project costs, that meet the definition of an asset, begins once mineralization is classified as proven and probable reserves.
Drilling and related costs are capitalized for an ore body where proven and probable reserves exist and the activities are directed at obtaining additional information on the ore body or converting mineralized material to proven and probable reserves. All other drilling and related costs are expensed as incurred. Drilling costs incurred during the production phase for operational ore control are allocated to inventory costs and then included as a component of Costs applicable to sales.
The cost of removing overburden and waste materials to access the ore body at an open-pit mine prior to the production phase are referred to as “pre-stripping costs.” Pre-stripping costs are capitalized during the development of an open-pit mine. Where multiple open pits exist at a mining complex utilizing common processing facilities, pre-stripping costs are capitalized at each pit. The removal, production, and sale of de minimis saleable materials may occur during development and are recorded as Other income, net of incremental mining and processing costs.
The production phase of an open-pit mine commences when saleable minerals, beyond a de minimis amount, are produced. Stripping costs incurred during the production phase of a mine are variable production costs that are included as a component of inventory to be recognized in Costs applicable to sales in the same period as the revenue from the sale of inventory. The Company's definition of a mine and the mine's production phase may differ from that of other companies in the mining industry resulting in incomparable allocations of stripping costs to deferred mine development and production costs. Other mining companies may expense pre-stripping costs associated with subsequent pits within a mining complex. Other mining companies may capitalize stripping costs incurred in connection with the production phase.
Mine development costs are amortized using the units-of-production (“UOP”) method based on estimated recoverable ounces or pounds in proven and probable reserves. To the extent that these costs benefit an entire ore body, they are amortized over the estimated life of the ore body. Costs incurred to access specific ore blocks or areas that only provide benefit over the life of that area are amortized over the estimated life of that specific ore block or area.
Mineral Interests
Mineral interests include acquired interests in production, development and exploration stage properties. The mineral interests are capitalized at their fair value at the acquisition date, either as an individual asset purchase or as part of a business combination.
The value of such assets is primarily driven by the nature and amount of mineralized material believed to be contained in such properties. Production stage mineral interests represent interests in operating properties that contain proven and probable reserves. Development stage mineral interests represent interests in properties under development that contain proven and probable reserves. Exploration stage mineral interests represent interests in properties that are believed to potentially contain mineralized material consisting of (i) mineralized material such as inferred material within pits; measured, indicated and inferred material with insufficient drill spacing to qualify as proven and probable reserves; and inferred material in close proximity to proven and probable reserves; (ii) around-mine exploration potential such as inferred material not immediately adjacent to existing reserves and mineralization, but located within the immediate mine area; (iii) other mine-related exploration potential that is not part of measured, indicated or inferred material and is comprised mainly of material outside of the immediate mine area; (iv) greenfields exploration potential that is not associated with any other production, development or exploration stage property, as described above; or (v) any acquired right to explore or extract a potential mineral deposit. The Company's mineral rights generally are enforceable regardless of whether proven and probable reserves have been established. In certain limited situations, the nature of a mineral right changes from an exploration right to a mining right upon the establishment of proven and probable reserves. The Company has the ability and intent to renew mineral interests where the existing term is not sufficient to recover all identified and valued proven and probable reserves and/or undeveloped mineralized material.
Asset Impairment
The Company reviews and evaluates its long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. An impairment is considered to exist if the total estimated future cash flows on an undiscounted basis are less than the carrying amount of the assets, including goodwill, if any. An impairment loss is measured and recorded based on discounted estimated future cash flows. Future cash flows are estimated based on quantities of recoverable minerals, expected gold and other commodity prices (considering current and historical prices, trends and related factors), production levels, operating costs, capital requirements and reclamation costs, all based on life-of-mine plans. Existing proven and probable reserves and value beyond proven and probable reserves, including mineralization that is not part of the measured, indicated or inferred resource base, are included when determining the fair value of mine site reporting units at acquisition and, subsequently, in determining whether the assets are impaired. The term “recoverable minerals” refers to the estimated amount of gold or other commodities that will be obtained after taking into account losses during ore processing and treatment. Estimates of recoverable minerals from such exploration stage mineral interests are risk adjusted based on management's relative confidence in such materials. In estimating future cash flows, assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of future cash flows from other asset groups. The Company's estimates of future cash flows are based on numerous assumptions and it is possible that actual future cash flows will be significantly different than the estimates, as actual future quantities of recoverable minerals, gold and other commodity prices, production levels and costs and capital are each subject to significant risks and uncertainties.
Revenue Recognition
Revenue is recognized, net of treatment and refining charges, from a sale when persuasive evidence of an arrangement exists, the price is determinable, the product has been delivered, the title has been transferred to the customer and collection of the sales price is reasonably assured. Revenues from by-product sales are credited to Costs applicable to sales as a by-product credit.
Concentrate sales are initially recorded based on 100% of the provisional sales prices. Until final settlement occurs, adjustments to the provisional sales prices are made to take into account the mark-to-market changes based on the forward prices for the estimated month of settlement. For changes in metal quantities upon receipt of new information and assay, the provisional sales quantities are adjusted as well. The principal risks associated with recognition of sales on a provisional basis include metal price fluctuations between the date initially recorded and the date of final settlement. If a significant decline in metal prices occurs between the provisional pricing date and the final settlement date, it is reasonably possible that the Company could be required to return a portion of the sales proceeds received based on the provisional invoice.
The Company's sales based on a provisional price 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 concentrates at the forward exchange price 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.
Income and Mining Taxes
The Company accounts for income taxes using the liability method, recognizing certain temporary differences between the financial reporting basis of the Company's liabilities and assets and the related income tax basis for such liabilities and assets. This method generates either a net deferred income tax liability or asset for the Company, as measured by the statutory tax rates in effect. The Company derives its deferred income tax charge or benefit by recording the change in either the net deferred income tax liability or asset balance for the year. Mining taxes represent state and provincial taxes levied on mining operations and are classified as income taxes; as such taxes are based on a percentage of mining profits. With respect to the earnings that the Company derives from the operations of its consolidated subsidiaries, in those situations where the earnings are indefinitely reinvested, no deferred taxes have been provided on the unremitted earnings (including the excess of the carrying value of the net equity of such entities for financial reporting purposes over the tax basis of such equity) of these consolidated companies.
The Company's deferred income tax assets include certain future tax benefits. The Company records a valuation allowance against any portion of those deferred income tax assets when it believes, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred income tax asset will not be realized.
The Company's operations involve dealing with uncertainties and judgments in the application of complex tax regulations in multiple jurisdictions. The final taxes paid are dependent upon many factors, including negotiations with taxing authorities in various jurisdictions and resolution of disputes arising from federal, state, and international tax audits. The Company recognizes potential liabilities and records tax liabilities for anticipated tax audit issues in the U.S. and other tax jurisdictions based on its estimate of whether, and the extent to which, additional taxes will be due. The Company adjusts these reserves in light of changing facts and circumstances; however, due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the Company's current estimate of the tax liabilities. If the Company's estimate of tax liabilities proves to be less than the ultimate assessment, an additional charge to expense would result. If the estimate of tax liabilities proves to be greater than the ultimate assessment, a tax benefit would result. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in Income and mining tax expense.
Reclamation and Remediation Costs
Reclamation obligations are recognized when incurred and recorded as liabilities at fair value. The liability is accreted over time through periodic charges to earnings. In addition, the asset retirement cost is capitalized as part of the asset's carrying value and amortized over the life of the related asset. Reclamation costs are periodically adjusted to reflect changes in the estimated present value resulting from the passage of time and revisions to the estimates of either the timing or amount of the reclamation costs. The estimated reclamation obligation is based on when spending for an existing disturbance is expected to occur. The Company reviews, on an annual basis, unless otherwise deemed necessary, the reclamation obligation at each mine site in accordance with ASC guidance for reclamation obligations.
Future remediation costs for inactive mines are accrued based on management's best estimate at the end of each period of the costs expected to be incurred at a site. Such cost estimates include, where applicable, ongoing care, maintenance and monitoring costs. Changes in estimates at inactive mines are reflected in earnings in the period an estimate is revised.
Foreign Currency
The functional currency for the majority of the Company's operations, including the Australian operations, is the U.S. dollar. All monetary assets and liabilities where the functional currency is the U.S. dollar are translated at current exchange rates and the resulting adjustments are included in Other income, net. All assets and liabilities recorded in functional currencies other than U.S. dollars are translated at current exchange rates and the resulting adjustments are charged or credited directly to Accumulated other comprehensive income in Equity. Revenues and expenses in foreign currencies are translated at the weighted-average exchange rates for the period.
Derivative Instruments
Newmont has forward contracts designated as cash flow hedges in place to hedge against changes in foreign exchanges rates and diesel prices, and forward starting swap contracts to hedge against changes in treasury rates. The fair value of derivative contracts qualifying as cash flow hedges are reflected as assets or liabilities in the balance sheet. To the extent these hedges are effective in offsetting forecasted cash flows from production costs (the “effective portion”), changes in fair value are deferred in Accumulated other comprehensive income. Amounts deferred in Accumulated other comprehensive income are reclassified to income when the hedged transaction has occurred. The ineffective portion of the change in the fair value of the derivative is recorded in Other income, net in each period. Cash transactions related to the Company's derivative contracts accounted for as hedges are classified in the same category as the item being hedged in the statement of cash flows.
When derivative contracts qualifying as cash flow hedges are settled, accelerated or restructured before the maturity date of the contracts, the related amount in Accumulated other comprehensive income at the settlement date is deferred and reclassified to earnings, as applicable, when the originally designated hedged transaction impacts earnings.
The fair value of derivative contracts qualifying as fair value hedges are reflected as assets or liabilities in the balance sheet. Changes in fair value are recorded in income in each period, consistent with recording changes to the mark-to-market value of the underlying hedged asset or liability in income. Prior to maturity in May 2011, changes in the mark-to-market value of the effective portion of interest rate swaps utilized by the Company to swap a portion of its fixed rate interest rate risk to floating rate risk were recognized as a component of Interest expense, net.
Newmont assesses the effectiveness of the derivative contracts periodically using either regression analysis or the dollar offset approach, both retrospectively and prospectively, to determine whether the hedging instruments have been highly effective in offsetting changes in the fair value of the hedged items. The Company will also assess periodically whether the hedging instruments are expected to be highly effective in the future. If a hedging instrument is not expected to be highly effective, the Company will stop hedge accounting prospectively. In those instances, the gains or losses remain in Accumulated other comprehensive income until the hedged item affects earnings.
Net Income per Common Share
Basic and diluted income per share are presented for Net income attributable to Newmont stockholders and for Income from continuing operations attributable to Newmont stockholders. Basic income per share is computed by dividing income available to common shareholders by the weighted-average number of outstanding common shares for the period, including the exchangeable shares (see Notes 12 and 23). Diluted income per share reflects the potential dilution that could occur if securities or other contracts that may require the issuance of common shares in the future were converted. Diluted income per share is computed by increasing the weighted-average number of outstanding common shares to include the additional common shares that would be outstanding after conversion and adjusting net income for changes that would result from the conversion. Only those securities or other contracts that result in a reduction in earnings per share are included in the calculation.
Comprehensive Income
In addition to Net income, Comprehensive income (loss) includes all changes in equity during a period, such as adjustments to minimum pension liabilities, foreign currency translation adjustments, the effective portion of changes in fair value of derivative instruments that qualify as cash flow hedges and cumulative unrecognized changes in fair value of marketable securities available-for-sale or other investments, except those resulting from investments by and distributions to owners.
Recently Adopted Accounting Pronouncements
Goodwill Impairment
In September 2011, ASC guidance was issued related to goodwill impairment. Under the updated guidance, an entity will have the option to first assess qualitatively whether it is necessary to perform the two-step goodwill impairment test. If the Company believes, as a result of its qualitative assessment, that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, the quantitative impairment test is required. Otherwise, no further testing is required. The update does not change how the Company performs the two-step impairment test under previous guidance. The Company's January 1, 2012 adoption of the guidance had no impact on the Company's consolidated financial position, results of operations or cash flows.
Fair Value Accounting
In May 2011, ASC guidance was issued related to disclosures around fair value accounting. The updated guidance clarifies different components of fair value accounting including the application of the highest and best use and valuation premise concepts, measuring the fair value of an instrument classified in a reporting entity's shareholders' equity and disclosing quantitative information about the unobservable inputs used in fair value measurements that are categorized in Level 3 of the fair value hierarchy. The Company's January 1, 2012 adoption of the updated guidance had no impact on the Company's consolidated financial position, results of operations or cash flows.
Comprehensive Income
In June 2011, the ASC guidance was issued related to comprehensive income. Under the updated guidance, an entity will have the option to present the total of comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In addition, the update required certain disclosure requirements when reporting other comprehensive income. The update does not change the items reported in other comprehensive income or when an item of other comprehensive income must be reclassified to income. The Company adopted the new guidance and its deferral and opted to present the total of comprehensive income in two separate but consecutive statements effective for its fiscal year beginning January 1, 2011. The early adoption had no impact on the Company's consolidated financial position, results of operations or cash flows.
Recently Issued Accounting Pronouncements
Reporting of Amounts reclassified out of Accumulated Other Comprehensive Income
In February 2013, ASC guidance was issued related to items reclassified from Accumulated Other Comprehensive Income. The new standard requires either in a single note or parenthetically on the face of the financial statements:(i) the effect of significant amounts reclassified from each component of accumulated other comprehensive income based on its source and (ii) the income statement line items affected by the reclassification. The update is effective for the Company's fiscal year beginning January 1, 2013 with early adoption permitted. The Company does not expect the updated guidance to have a significant 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. The update is effective for the Company's fiscal year beginning January 1, 2013, and interim periods within those annual periods. Retrospective application is required.
In January 2013, ASC guidance was issued to 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. 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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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 and include North America, South America, Asia Pacific, Africa and Corporate and Other. The Company's major operations include Nevada, Yanacocha, Boddington, Batu Hijau, Other Australia/New Zealand and Ahafo. The Company identifies its reportable segments as those consolidated mining operations or functional groups that represent more than 10% of the combined revenue, profit or loss or total assets of all reported operating segments. Consolidated mining operations or functional groups not meeting this threshold are aggregated at the applicable geographic region or corporate level for segment reporting purposes. Earnings from operations do not reflect general corporate expenses, interest (except project-specific interest) or income and mining taxes (except for equity investments). Intercompany revenue and expense amounts have been eliminated within each segment in order to report on the basis that management uses internally for evaluating segment performance. The financial information relating to the Company's segments is as follows:
Costs | Advanced | |||||||||||||||||||||
Applicable | Projects and | Pre-Tax | Total | Capital | ||||||||||||||||||
Sales | to Sales | Amortization | Exploration | Income | Assets | Expenditures(1) | ||||||||||||||||
Year Ended December 31, 2012 | ||||||||||||||||||||||
Nevada | $ | 2,851 | $ | 1,098 | $ | 230 | $ | 138 | $ | 1,372 | $ | 7,515 | $ | 677 | ||||||||
La Herradura | 354 | 132 | 21 | 41 | 157 | 438 | 89 | |||||||||||||||
Other North America | - | - | - | 2 | (182) | 155 | - | |||||||||||||||
North America | 3,205 | 1,230 | 251 | 181 | 1,347 | 8,108 | 766 | |||||||||||||||
Yanacocha | 2,202 | 669 | 254 | 59 | 1,100 | 2,942 | 510 | |||||||||||||||
Conga | - | - | - | 61 | (83) | 1,644 | 582 | |||||||||||||||
Other South America | - | - | - | 69 | (66) | 25 | 19 | |||||||||||||||
South America | 2,202 | 669 | 254 | 189 | 951 | 4,611 | 1,111 | |||||||||||||||
Boddington: | ||||||||||||||||||||||
Gold | 1,184 | 623 | 159 | |||||||||||||||||||
Copper | 224 | 150 | 34 | |||||||||||||||||||
Total Boddington | 1,408 | 773 | 193 | 8 | 364 | 4,678 | 141 | |||||||||||||||
Batu Hijau: | ||||||||||||||||||||||
Gold | 106 | 71 | 12 | |||||||||||||||||||
Copper | 561 | 385 | 76 | |||||||||||||||||||
Total Batu Hijau | 667 | 456 | 88 | 32 | 8 | 3,777 | 148 | |||||||||||||||
Other Australia/New Zealand | 1,512 | 796 | 142 | 66 | 441 | 1,444 | 277 | |||||||||||||||
Other Asia Pacific | - | - | 4 | 18 | 181 | 962 | 19 | |||||||||||||||
Asia Pacific | 3,587 | 2,025 | 427 | 124 | 994 | 10,861 | 585 | |||||||||||||||
Ahafo | 874 | 314 | 75 | 53 | 435 | 1,423 | 228 | |||||||||||||||
Akyem | - | - | - | 19 | (20) | 995 | 388 | |||||||||||||||
Other Africa | - | - | - | 12 | (11) | 7 | - | |||||||||||||||
Africa | 874 | 314 | 75 | 84 | 404 | 2,425 | 616 | |||||||||||||||
Corporate and Other | - | - | 25 | 126 | (582) | 3,645 | 74 | |||||||||||||||
Consolidated | $ | 9,868 | $ | 4,238 | $ | 1,032 | $ | 704 | $ | 3,114 | $ | 29,650 | $ | 3,152 | ||||||||
(1) | Accrual basis includes a decrease in accrued capital expenditures of $58; consolidated capital expenditures on a cash basis were $3,210. |
Costs | Advanced | |||||||||||||||||||||
Applicable to | Projects and | Pre-Tax | Total | Capital | ||||||||||||||||||
Sales | Sales | Amortization | Exploration | Income | Assets | Expenditures(1) | ||||||||||||||||
Year Ended December 31, 2011 | ||||||||||||||||||||||
Nevada | $ | 2,700 | $ | 1,039 | $ | 277 | $ | 132 | $ | 1,213 | $ | 6,957 | $ | 559 | ||||||||
La Herradura | 331 | 110 | 20 | 18 | 190 | 329 | 81 | |||||||||||||||
Other North America | - | - | 14 | 197 | (2,264) | 192 | 101 | |||||||||||||||
North America | 3,031 | 1,149 | 311 | 347 | (861) | 7,478 | 741 | |||||||||||||||
Yanacocha | 2,003 | 711 | 234 | 39 | 988 | 2,712 | 360 | |||||||||||||||
Conga | - | - | - | 27 | (28) | 1,086 | 739 | |||||||||||||||
Other South America | - | - | - | 45 | (47) | 31 | - | |||||||||||||||
South America | 2,003 | 711 | 234 | 111 | 913 | 3,829 | 1,099 | |||||||||||||||
Boddington | ||||||||||||||||||||||
Gold | 1,056 | 470 | 122 | |||||||||||||||||||
Copper | 210 | 118 | 28 | |||||||||||||||||||
Total Boddington | 1,266 | 588 | 150 | 11 | 506 | 4,629 | 217 | |||||||||||||||
Batu Hijau: | ||||||||||||||||||||||
Gold | 524 | 164 | 35 | |||||||||||||||||||
Copper | 1,052 | 332 | 71 | |||||||||||||||||||
Total Batu Hijau | 1,576 | 496 | 106 | 8 | 890 | 3,582 | 196 | |||||||||||||||
Other Australia/New Zealand | 1,613 | 681 | 135 | 51 | 730 | 1,257 | 294 | |||||||||||||||
Other Asia Pacific | - | - | 3 | 18 | (66) | 630 | 18 | |||||||||||||||
Asia Pacific | 4,455 | 1,765 | 394 | 88 | 2,060 | 10,098 | 725 | |||||||||||||||
Ahafo | 869 | 265 | 76 | 40 | 465 | 1,146 | 116 | |||||||||||||||
Akyem | - | - | - | 9 | (10) | 552 | 248 | |||||||||||||||
Other Africa | - | - | - | 7 | (11) | - | - | |||||||||||||||
Africa | 869 | 265 | 76 | 56 | 444 | 1,698 | 364 | |||||||||||||||
Corporate and Other | - | - | 21 | 121 | (746) | 3,008 | 35 | |||||||||||||||
Consolidated | $ | 10,358 | $ | 3,890 | $ | 1,036 | $ | 723 | $ | 1,810 | $ | 26,111 | $ | 2,964 | ||||||||
(1) | Accrual basis includes an increase in accrued capital expenditures of $177; consolidated capital expenditures on a cash basis were $2,787. |
Costs | Advanced | |||||||||||||||||||||
Applicable to | Projects and | Pre-Tax | Total | Capital | ||||||||||||||||||
Sales | Sales | Amortization | Exploration | Income | Assets | Expenditures(1) | ||||||||||||||||
Year Ended December 31, 2010 | ||||||||||||||||||||||
Nevada | $ | 2,111 | $ | 974 | $ | 271 | $ | 85 | $ | 738 | $ | 3,387 | $ | 298 | ||||||||
La Herradura | 217 | 73 | 19 | 6 | 118 | 216 | 41 | |||||||||||||||
Other North America | - | - | 14 | 99 | (112) | 2,264 | 115 | |||||||||||||||
North America | 2,328 | 1,047 | 304 | 190 | 744 | 5,867 | 454 | |||||||||||||||
Yanacocha | 1,778 | 630 | 162 | 24 | 893 | 2,682 | 167 | |||||||||||||||
Conga | - | - | - | 10 | (11) | 262 | 134 | |||||||||||||||
Other South America | - | - | 1 | 28 | (23) | 30 | - | |||||||||||||||
South America | 1,778 | 630 | 163 | 62 | 859 | 2,974 | 301 | |||||||||||||||
Boddington | ||||||||||||||||||||||
Gold | 834 | 400 | 113 | |||||||||||||||||||
Copper | 162 | 93 | 25 | |||||||||||||||||||
Total Boddington | 996 | 493 | 138 | 6 | 304 | 4,323 | 146 | |||||||||||||||
Batu Hijau: | ||||||||||||||||||||||
Gold | 776 | 155 | 42 | |||||||||||||||||||
Copper | 1,686 | 337 | 90 | |||||||||||||||||||
Total Batu Hijau | 2,462 | 492 | 132 | 3 | 1,736 | 3,398 | 67 | |||||||||||||||
Other Australia/New Zealand | 1,321 | 585 | 108 | 31 | 575 | 1,025 | 176 | |||||||||||||||
Other Asia Pacific | - | - | 2 | 19 | (14) | 535 | 17 | |||||||||||||||
Asia Pacific | 4,779 | 1,570 | 380 | 59 | 2,601 | 9,281 | 406 | |||||||||||||||
Ahafo | 655 | 237 | 78 | 24 | 298 | 1,051 | 109 | |||||||||||||||
Akyem | - | - | - | 9 | (9) | 295 | 70 | |||||||||||||||
Other Africa | - | - | - | - | (1) | - | - | |||||||||||||||
Africa | 655 | 237 | 78 | 33 | 288 | 1,346 | 179 | |||||||||||||||
Corporate and Other | - | - | 20 | 90 | (495) | 6,195 | 34 | |||||||||||||||
Consolidated | $ | 9,540 | $ | 3,484 | $ | 945 | $ | 434 | $ | 3,997 | $ | 25,663 | $ | 1,374 | ||||||||
(1) | Accrual basis includes a decrease in accrued capital expenditures of $28; consolidated capital expenditures on a cash basis were $1,402. | |||||||||||||||||||||
Revenues from export and domestic sales were as follows: | |||||||||||
Years Ended December 31, | |||||||||||
2012 | 2011 | 2010 | |||||||||
Europe | $ | 7,590 | $ | 7,392 | $ | 6,209 | |||||
Japan | 758 | 750 | 1,544 | ||||||||
Korea | 331 | 712 | 760 | ||||||||
Indonesia | 67 | 531 | 372 | ||||||||
Mexico | 354 | 331 | 217 | ||||||||
Philippines | 225 | 287 | 128 | ||||||||
Australia | 217 | 182 | 110 | ||||||||
Other | 326 | 173 | 200 | ||||||||
$ | 9,868 | $ | 10,358 | $ | 9,540 |
As gold can be sold through numerous gold market traders worldwide, the Company is not economically dependent on a limited number of customers for the sale of its product. In 2012, 2011 and 2010, sales to Bank of Nova Scotia were $802 (9%), $1,143 (13%) and $2,435 (32%), respectively, of total gold sales. In 2012 and 2011 sales to Royal Bank of Scotland were $1,449 (16%) and $2,048 (23%) of total gold sales, respectively. Additionally, in 2012, the Company had sales to Barclays that totaled $1,022 (11%) of total gold sales.
Long-lived assets, excluding deferred tax assets, investments and restricted cash, were as follows:
At December 31, | |||||||
2012 | 2011 | ||||||
United States | $ | 7,252 | $ | 6,643 | |||
Australia | 5,510 | 5,359 | |||||
Peru | 3,592 | 2,654 | |||||
Indonesia | 2,719 | 2,421 | |||||
Ghana | 2,189 | 1,535 | |||||
Other | 426 | 349 | |||||
$ | 21,688 | $ | 18,961 |
|
NOTE 4 RECLAMATION AND REMEDIATION
The Company's mining and exploration activities are subject to various federal and state laws and regulations governing the protection of the environment. These laws and regulations are continually changing and are generally becoming more restrictive. The Company conducts its operations to protect public health and the environment and believes its operations are in compliance with applicable laws and regulations in all material respects. The Company has made, and expects to make in the future, expenditures to comply with such laws and regulations, but cannot predict the full amount of such future expenditures. Estimated future reclamation costs are based principally on legal and regulatory requirements.
The Company's reclamation and remediation expenses consisted of:
Years Ended December 31, | |||||||||||
2012 | 2011 | 2010 | |||||||||
Reclamation | $ | 32 | $ | 61 | $ | 13 | |||||
Accretion - operating | 55 | 50 | 44 | ||||||||
Accretion - non-operating | 9 | 9 | 8 | ||||||||
$ | 96 | $ | 120 | $ | 65 |
Reclamation expense decreased in 2012, primarily due to a final agreement on remediation requirements for the Midnite Mine site and land purchases around the Mt Leyshon mine in 2011 that did not occur in 2012.
At December 31, 2012 and 2011, $1,341 and $1,070, respectively, were accrued for reclamation obligations relating to mineral properties. In addition, the Company is involved in several matters concerning environmental obligations associated with former, primarily historic, mining activities. Generally, these matters concern developing and implementing remediation plans at the various sites involved. At December 31, 2012 and 2011, $198 and $170, 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:
Balance January 1, 2011 | $ | 1,048 | ||||
Additions, changes in estimates and other | 176 | |||||
Liabilities settled | (43) | |||||
Accretion expense | 59 | |||||
Balance December 31, 2011 | 1,240 | |||||
Additions, changes in estimates and other | 308 | |||||
Liabilities settled | (73) | |||||
Accretion expense | 64 | |||||
Balance December 31, 2012 | $ | 1,539 |
Additions to the reclamation liability in 2012 of $308 include $245 for currently or recently producing properties due mainly to increased water treatment costs at Yanacocha and $63 for historic mining operations primarily related to additional water management costs and assuming the United States government liability for Dawn with the receipt of $42 in a trust fund.
Additions to the reclamation liability in 2011 of $176 include $139 for currently or recently producing properties due mainly to increased water treatment costs and additional heap leach facilities at Yanacocha, an increase in the tailings area at Boddington, an expansion of the operating footprint at Batu Hijau and $37 for historic mining operations primarily related to additional water management costs.
The current portion of Reclamation and remediation liabilities of $82 and $71 at December 31, 2012 and 2011, respectively, are included in Other current liabilities (see Note 24).
|
NOTE ##WritedownsNote WRITE-DOWN OF PROPERTY, PLANT AND MINE DEVELOPMENT | |||||||||||
Years Ended December 31, | |||||||||||
2012 | 2011 | 2010 | |||||||||
Other North America | $ | 25 | $ | - | $ | - | |||||
Conga | 17 | - | - | ||||||||
Batu Hijau | 5 | 1 | 1 | ||||||||
Other Australia/New Zealand | 5 | - | 1 | ||||||||
Hope Bay | - | 2,080 | - | ||||||||
Nevada | - | 2 | 4 | ||||||||
Yanacocha | - | 1 | - | ||||||||
$ | 52 | $ | 2,084 | $ | 6 |
Write-down of property, plant and mine development totaled $52, $2,084 and $6 in 2012, 2011 and 2010, respectively. The 2012 write-down was primarily due to an impairment of the FALC JV diamond project as well as write-downs of non-essential surface equipment at Conga. The 2011 write-down was primarily due to an impairment related to the Hope Bay project after evaluating existing development options and economic feasibility for the project compared with other projects and development opportunities within the Company's wider project pipeline. The amount of the Hope Bay write-down was recorded in 2011 at fair value based on the estimated recoverable value, net of transportation and selling costs utilizing the liquidation model.
|
NOTE ##OthExpNote OTHER EXPENSE, NET | |||||||||||
Years Ended December 31, | |||||||||||
2012 | 2011 | 2010 | |||||||||
Hope Bay care and maintenance | $ | 144 | $ | 17 | $ | - | |||||
Community development | 95 | 67 | 111 | ||||||||
Regional administration | 88 | 78 | 64 | ||||||||
Restructuring and other | 58 | - | - | ||||||||
Western Australia power plant | 13 | 15 | 15 | ||||||||
Acquisition costs | 12 | 22 | - | ||||||||
World Gold Council dues | 11 | 7 | 13 | ||||||||
Indonesian value added tax settlement | - | 21 | 10 | ||||||||
Other | 28 | 38 | 48 | ||||||||
$ | 449 | $ | 265 | $ | 261 | ||||||
|
NOTE ##OthIncNote OTHER INCOME, NET | |||||||||||
Years Ended December 31, | |||||||||||
2012 | 2011 | 2010 | |||||||||
Gain on asset sales, net | $ | 105 | $ | 17 | $ | 48 | |||||
Development projects, net | 66 | 42 | 18 | ||||||||
Reduction of allowance for loan receivable | 49 | - | - | ||||||||
Canadian Oil Sands dividends | 42 | 34 | 55 | ||||||||
Refinery income, net | 27 | 27 | 14 | ||||||||
Interest | 12 | 11 | 11 | ||||||||
Gain on sale of investments, net | 2 | 64 | 16 | ||||||||
Derivative ineffectiveness, net | 2 | (17) | (2) | ||||||||
Foreign currency exchange, net | (5) | (4) | (64) | ||||||||
Impairment of marketable securities | (47) | (180) | (1) | ||||||||
Other | 25 | 18 | 14 | ||||||||
$ | 278 | $ | 12 | $ | 109 | ||||||
|
NOTE 8 INCOME AND MINING TAXES
The Company's Income and mining tax expense consisted of:
Years Ended December 31, | |||||||||||
2012 | 2011 | 2010 | |||||||||
Current: | |||||||||||
United States | $ | (210) | $ | (346) | $ | (214) | |||||
Foreign | (644) | (1,038) | (1,022) | ||||||||
(854) | (1,384) | (1,236) | |||||||||
Deferred: | |||||||||||
United States | 107 | 185 | 518 | ||||||||
Foreign | (122) | 486 | (138) | ||||||||
(15) | 671 | 380 | |||||||||
$ | (869) | $ | (713) | $ | (856) |
The Company's Income before income and mining tax and other items consisted of:
Years Ended December 31, | ||||||||||
2012 | 2011 | 2010 | ||||||||
United States | $ | 1,036 | $ | 878 | $ | 737 | ||||
Foreign | 2,078 | 932 | 3,260 | |||||||
$ | 3,114 | $ | 1,810 | $ | 3,997 |
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:
Years Ended December 31, | |||||||||||||
2012 | 2011 | 2010 | |||||||||||
Income before income and mining tax and other items | $ | 3,114 | $ | 1,810 | $ | 3,997 | |||||||
United States statutory corporate income tax rate | 35 | % | 35 | % | 35 | % | |||||||
Income tax expense computed at United States statutory corporate income tax rate | (1,090) | (634) | (1,399) | ||||||||||
Reconciling items: | |||||||||||||
Tax benefit generated on change in form of a non- | 694 | 65 | 440 | ||||||||||
U.S. subsidiary | |||||||||||||
Percentage depletion | 267 | 172 | 151 | ||||||||||
Change in valuation allowance on deferred tax assets | (716) | (263) | 18 | ||||||||||
Mining taxes, net | (77) | (42) | (33) | ||||||||||
Other | 53 | (11) | (33) | ||||||||||
Income and mining tax expense | $ | (869) | $ | (713) | $ | (856) |
Components of the Company's deferred income tax assets (liabilities) are as follows: | |||||||||
At December 31, | |||||||||
2012 | 2011 | ||||||||
Deferred income tax assets: | |||||||||
Property, plant and mine development | $ | 621 | $ | 689 | |||||
Reclamation and remediation | 306 | 226 | |||||||
Net operating losses, capital losses and tax credits | 2,012 | 1,054 | |||||||
Investment in partnerships | 281 | 203 | |||||||
Employee-related benefits | 280 | 15 | |||||||
Derivative instruments and unrealized loss on investments | 145 | 308 | |||||||
Other | 148 | 8 | |||||||
3,793 | 2,503 | ||||||||
Valuation allowances | (1,626) | (977) | |||||||
2,167 | 1,526 | ||||||||
Deferred income tax liabilities: | |||||||||
Property, plant and mine development | (1,724) | (1,362) | |||||||
Net undistributed earnings of subsidiaries | (301) | (198) | |||||||
Derivative instruments and unrealized gain on investments | (217) | (69) | |||||||
Other | (170) | (93) | |||||||
(2,412) | (1,722) | ||||||||
Net deferred income tax assets (liabilities) | $ | (245) | $ | (196) |
Net deferred income tax assets and liabilities consist of: | ||||||||
At December 31, | ||||||||
2012 | 2011 | |||||||
Current deferred income tax assets | $ | 196 | $ | 396 | ||||
Long-term deferred income tax assets | 480 | 242 | ||||||
Current deferred income tax liabilities | (63) | (50) | ||||||
Long-term deferred income tax liabilities | (858) | (784) | ||||||
$ | (245) | $ | (196) |
At December 31, 2011 | ||||||||||||
As Previously Reported | Adjustment | Revised | ||||||||||
(in millions) | ||||||||||||
ASSETS | ||||||||||||
Deferred income tax assets | 1,605 | (1,363) | 242 | |||||||||
Total assets | $ | 27,474 | $ | (1,363) | $ | 26,111 | ||||||
LIABILITIES | ||||||||||||
Deferred income tax liabilities | $ | 2,147 | $ | (1,363) | $ | 784 | ||||||
Total liabilities | 11,703 | (1,363) | 10,340 | |||||||||
Total liabilities and equity | $ | 27,474 | $ | (1,363) | $ | 26,111 |
Company's Unrecognized Tax Benefits
At December 31, 2012, 2011 and 2010,
2012 | 2011 | 2010 | |||||||||
Total amount of gross unrecognized tax benefits at | |||||||||||
beginning of year | $ | 336 | $ | 116 | $ | 130 | |||||
Additions for tax positions of prior years | 89 | 160 | 3 | ||||||||
Additions for tax positions of current year | - | 64 | - | ||||||||
Reductions due to settlements with taxing authorities | (5) | - | (9) | ||||||||
Reductions due to lapse of statute of limitations | (21) | (4) | (8) | ||||||||
Total amount of gross unrecognized tax benefits at end of | |||||||||||
year | $ | 399 | $ | 336 | $ | 116 |
At December 31, 2012, 2011 and 2010, $120, $137 and $45, respectively, represent the amount of unrecognized tax benefits that, if recognized, would impact the Company's effective income tax rate.
The Company operates in numerous countries around the world and 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 paid the taxes reasonably determined to be due. The tax rules and regulations in many countries are highly complex and subject to interpretation. From time to time, the Company is subject to a review of its historic income tax filings and in connection with such reviews, disputes can arise with the taxing authorities over the interpretation or application of certain rules to the Company's business conducted within the country involved.
In 2010 and 2012, PTNNT, the Company's partially owned subsidiary in Indonesia, received income tax assessment letters for 2008 and 2010 for additional amounts of $119 and $22, respectively. The Company has since paid the 2008 and 2010 amounts in full, including penalties. PTNNT is vigorously defending its positions through all available processes. PTNNT believes it is more likely than not that it will prevail based on prior experience and has recorded a corresponding current receivable of $119 and long term receivable of $22.
In 2011, the U.S. Internal Revenue Service issued a Technical Advice Memorandum (“TAM”) to the Company regarding the U.S. income tax treatment of the Price Capped Forward Sales Contracts settled in cash in 2007. The TAM provides guidance which is unfavorable to the Company. The Company is vigorously defending its positions through all processes available to it and believes it should prevail.
The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. Federal, state and local, and non-U.S. income tax examinations by tax authorities for years before 2005. As a result of (i) statute of limitations that will begin to expire within the next 12 months in various jurisdictions, and (ii) possible settlements of audit-related issues with taxing authorities in various jurisdictions 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 between $15 to $20 in the next 12 months.
The Company's continuing practice is to recognize interest and/or penalties related to unrecognized tax benefits as part of its income and mining tax expense. At December 31, 2012 and 2011, the total amount of accrued income-tax-related interest and penalties included in the Consolidated Balance Sheets was $14 and $11, respectively. During 2012, the Company recorded through the Statements of Consolidated Income an additional $4 of interest and penalties. During 2011, the Company released through the Statements of Consolidated Income an additional $1 of interest and penalties. During 2010, the Company accrued through the Statements of Consolidated Income an additional $1 of interest and penalties.
Tax Loss Carryforwards, Foreign Tax Credits, and AMT Credits
At December 31, 2012 and 2011, the Company had (i) $741 and $739 of net operating loss carry forwards, respectively; and (ii) $405 and $259 of tax credit carry forwards, respectively. At December 31, 2012 and 2011, $281 and $315, respectively, of net operating loss carry forwards are attributable to operations in Australia, Ghana and France for which current tax law provides no expiration period. The remaining net operating loss carryforwards expire at various dates through 2032. Valuation allowances have been recorded on net operating loss carryforwards where the Company believes based on the available evidence it is more likely than not that the net operating losses will not be realized.
Tax credit carry forwards for 2012 and 2011 of $249 and $155 consist of foreign tax credits available in the United States; substantially all such credits not utilized will expire at the end of 2022. Other credit carry forwards at the end of 2012 and 2011 in the amounts of $156 and $104, respectively, represent alternative minimum tax credits attributable to the Company's U.S. operations for which the current tax law provides no period of expiration.
Differences in tax rates and other foreign income tax law variations make the ability to fully utilize all available foreign income tax credits on a year-by-year basis highly dependent on the price of the gold and copper produced by the Company and the costs of production, since lower prices or higher costs can result in having insufficient sources of taxable income in the United States to utilize all available foreign tax credits. Such credits have limited carry back and carry forward periods and can only be used to reduce the United States income tax imposed on foreign earnings included in the annual United States consolidated income tax return.
Other
Newmont intends to indefinitely reinvest earnings from certain foreign operations. Accordingly, non-U.S. income and withholding taxes for which deferred taxes might otherwise be required have not been provided on a cumulative amount of temporary differences. For this purpose, any difference between the tax basis in the stock of a consolidated subsidiary and the amount of the subsidiary's net equity determined for financial reporting purposes related to investments in foreign subsidiaries is immaterial to the Company. The Company does not anticipate the need to repatriate funds to satisfy liquidity needs arising in the ordinary course of business, including liquidity needs associated with any debt service requirements.
|
NOTE ##EqtyIncAffNote EQUITY INCOME (LOSS) OF AFFILIATES | ||||||||||
Years Ended December 31, | ||||||||||
2012 | 2011 | 2010 | ||||||||
Minera La Zanja S.R.L. | $ | 18 | $ | 52 | $ | 10 | ||||
Euronimba Ltd. | (69) | (41) | (10) | |||||||
AGR Matthey Joint Venture | - | - | 3 | |||||||
$ | (51) | $ | 11 | $ | 3 |
Minera La Zanja S.R.L.
Newmont holds a 46.94% interest in Minera La Zanja, S.R.L. (“La Zanja”), a gold project near the city of Cajamarca, Peru. The remaining interest is held by Compañia de Minas Buenaventura, S.A.A. (“Buenaventura”). The mine commenced operations in September 2011 and is operated by Buenaventura. Newmont received dividends of $19 during 2012 from its interest in La Zanja.
Euronimba Ltd.
Newmont holds a 43.50% interest in Euronimba Ltd. (“Euronimba”), with the remaining interests held by BHP Billiton (43.50%) and Areva (13%). Euronimba owns 95% of the Nimba iron ore project located in the Republic of Guinea which is in the early stages of development.
AGR Matthey Joint Venture
The AGR Matthey Joint Venture (“AGR”), a gold refinery, in which Newmont held a 40% interest, was dissolved on March 30, 2010. Newmont received consideration of $14 from the dissolution and recorded a gain of $6 during 2010.
|
NOTE 10 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.
For the years ended 2012, 2011 and 2010 the Company recorded charges of $76, $136 and $28, net of tax benefits of $4, $7 and $12, respectively.
Net cash used in discontinued operations was $16, $7 and $13 for the year ended 2012, 2011 and 2010, respectively. Discontinued operations in 2012 and 2011 relate to payments on the Holt property royalty. The 2010 amounts related to the Kori Kollo operation in Bolivia which was sold in 2009.
|
NOTE ##NCINote NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | |||||||||||
Years Ended December 31, | |||||||||||
2012 | 2011 | 2010 | |||||||||
Yanacocha | $ | 305 | $ | 326 | $ | 292 | |||||
Batu Hijau | (2) | 287 | 549 | ||||||||
Other | 6 | (7) | (2) | ||||||||
$ | 309 | $ | 606 | $ | 839 |
Newmont has a 51.35% ownership interest in Yanacocha, with the remaining interests held by Buenaventura (43.65%) and the International Finance Corporation (5%).
In June 2010, PTPI completed the sale of an approximate 2.2% interest in PTNNT to PTIMI. To enable the transaction to proceed, the Company released its rights to the dividends payable on this 2.2% interest and released the security interest in the associated shares. The Company further agreed to advance certain funds to PTIMI to enable it to purchase the interest in exchange for (i) a pledge of their 2.2% share of PTNNT, (ii) an assignment of dividends payable on the shares, net of withholding tax, and (iii) a commitment from them to support the application of Newmont standards to the operation of the Batu Hijau mine. The funds that the Company advanced to PTIMI and which it paid to PTPI for the shares were used by PTPI to reduce its outstanding loan balance with the Company. Upon completion of this transaction, PTPI requested and was allowed to borrow additional funds under the Company's agreement with PTPI. The Company's economic interest in PTPI's and PTIMI's combined 20% interest in PTNNT remains at 17% and did not change as a result of these transactions.
In March 2010, the Company (through Nusa Tenggara Partnership B.V. (“NTPBV”)) completed the sale and transfer of shares for a 7% interest in PTNNT to PT Multi Daerah Bersaing (“PTMDB”) in compliance with divestiture obligations under the Contract of Work, reducing NTPBV's ownership interest to 56% from 63%. In 2009, the Company (through NTPBV) completed the sale and transfer of shares for a 17% interest in PTNNT to PTMDB in compliance with divestiture obligations under the Contract of Work, reducing NTPBV's ownership interest to 63% from 80%. The 2010 and 2009 share transfers resulted in gains of approximately $16 (after tax of $33) and $63 (after tax of $115), respectively, that were recorded as Additional paid-in capital. For information on the Batu Hijau Contract of Work and divestiture requirements, see the discussion in Note 30 to the Consolidated Financial Statements.
At December 31, 2012, Newmont had a 48.50% effective economic interest in PTNNT. Based on ASC guidance for variable interest entities, Newmont continues to consolidate PTNNT in its Consolidated Financial Statements.
|
NOTE ##PensionNote EMPLOYEE-RELATED BENEFITS | |||||||||
At December 31, | |||||||||
2012 | 2011 | ||||||||
Current: | |||||||||
Accrued payroll and withholding taxes | $ | 256 | $ | 204 | |||||
Peruvian workers’ participation | 45 | 42 | |||||||
Employee pension benefits | 9 | 5 | |||||||
Other post-retirement plans | 2 | 3 | |||||||
Accrued severance | 3 | 3 | |||||||
Other employee-related payables | 24 | 50 | |||||||
$ | 339 | $ | 307 | ||||||
At December 31, | |||||||||
2012 | 2011 | ||||||||
Long-term: | |||||||||
Employee pension benefits | $ | 297 | $ | 227 | |||||
Other post-retirement benefit plans | 130 | 104 | |||||||
Accrued severance | 113 | 96 | |||||||
Peruvian workers’ participation | 20 | 17 | |||||||
Other employee-related payables | 26 | 15 | |||||||
$ | 586 | $ | 459 |
Pension and Other Benefit Plans
The Company provides defined benefit pension plans to eligible employees. Benefits are generally based on years of service and the employee's average annual compensation. Various international pension plans are based on local laws and requirements. Pension costs are determined annually by independent actuaries and pension contributions to the qualified plans are made based on funding standards established under the Employee Retirement Income Security Act of 1974, as amended.
The Company sponsors retiree health care plans that provide prescription drug benefits to eligible retirees that our plans' actuaries have determined are actuarially equivalent to Medicare Part D. In 2010, Congress passed certain measures of healthcare reform which changed the tax-free status of Medicare Part D subsidies and eliminated the impact on the post-retirement ABO.
The following tables provide a reconciliation of changes in the plans' benefit obligations and assets' fair values for 2012 and 2011:
Pension Benefits | Other Benefits | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Change in Benefit Obligation: | |||||||||||||||
Benefit obligation at beginning of year | $ | 772 | $ | 681 | $ | 107 | $ | 95 | |||||||
Service cost | 30 | 25 | 3 | 2 | |||||||||||
Interest cost | 41 | 39 | 6 | 5 | |||||||||||
Actuarial loss | 136 | 66 | 18 | 7 | |||||||||||
Foreign currency exchange gain | (3) | - | - | - | |||||||||||
Settlement payments | - | (14) | - | - | |||||||||||
Benefits paid | (32) | (25) | (2) | (2) | |||||||||||
Projected benefit obligation at end of year | $ | 944 | $ | 772 | N/A | N/A | |||||||||
Accumulated Benefit Obligation | $ | 780 | $ | 554 | $ | 132 | $ | 107 | |||||||
Change in Fair Value of Assets: | |||||||||||||||
Fair value of assets at beginning of year | $ | 540 | $ | 559 | $ | - | $ | - | |||||||
Actual return on plan assets | 81 | (7) | - | - | |||||||||||
Employer contributions | 49 | 27 | 2 | 2 | |||||||||||
Settlement payments | - | (14) | - | - | |||||||||||
Benefits paid | (32) | (25) | (2) | (2) | |||||||||||
Fair value of assets at end of year | $ | 638 | $ | 540 | $ | - | $ | - | |||||||
Unfunded status, net | $ | 306 | $ | 232 | $ | 132 | $ | 107 |
The Company's qualified pension plans are funded with cash contributions in compliance with Internal Revenue Service (“IRS”) rules and regulations. The Company's non-qualified and other benefit plans are currently not funded, but exist as general corporate obligations. The information contained in the above tables presents the combined funded status of qualified and non-qualified plans. The Company intends to contribute $80 to its retirement benefit programs in 2013.
The following table provides the net pension and other benefits amounts recognized in the Consolidated Balance Sheets at December 31:
Pension Benefits | Other Benefits | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Accrued employee benefit liability | $ | 306 | $ | 232 | $ | 132 | $ | 107 | |||||||
Accumulated other comprehensive income (loss): | |||||||||||||||
Net actuarial gain (loss) | $ | (413) | $ | (349) | $ | (12) | $ | 6 | |||||||
Prior service credit (cost) | (6) | (7) | 4 | 4 | |||||||||||
(419) | (356) | (8) | 10 | ||||||||||||
Less: Income taxes | 147 | 125 | 4 | (4) | |||||||||||
$ | (272) | $ | (231) | $ | (4) | $ | 6 |
The following table provides components of the net periodic pension and other benefits costs for the years ended December 31:
Pension Benefit Costs | Other Benefit Costs | ||||||||||||||||||
2012 | 2011 | 2010 | 2012 | 2011 | 2010 | ||||||||||||||
Service cost | $ | 30 | $ | 25 | $ | 21 | $ | 3 | $ | 2 | $ | 2 | |||||||
Interest cost | 41 | 39 | 36 | 6 | 5 | 6 | |||||||||||||
Expected return on plan assets | (44) | (42) | (32) | - | - | - | |||||||||||||
Amortization, net | 33 | 26 | 17 | (1) | (1) | (1) | |||||||||||||
$ | 60 | $ | 48 | $ | 42 | $ | 8 | $ | 6 | $ | 7 |
The following table provides the components recognized in Other comprehensive income (loss) for the years ended December 31:
Pension Benefits | Other Benefits | ||||||||||||||||||
2012 | 2011 | 2010 | 2012 | 2011 | 2010 | ||||||||||||||
Net gain (loss) | $ | (96) | $ | (111) | $ | (41) | $ | (17) | $ | (6) | $ | 5 | |||||||
Amortization, net | 33 | 26 | 17 | (1) | (1) | (1) | |||||||||||||
Total recognized in Other comprehensive income (loss) | $ | (63) | $ | (85) | $ | (24) | $ | (18) | $ | (7) | $ | 4 | |||||||
Total recognized in net periodic benefit cost and Other comprehensive income (loss) | $ | (123) | $ | (133) | $ | (66) | $ | (26) | $ | (13) | $ | (3) |
The expected recognition of amounts in Accumulated other comprehensive income is $33 and $1 for net actuarial loss and prior service cost for pension benefits in 2013, respectively, and $nil and $1 for net actuarial gain and prior service credit for other benefits in 2013, respectively.
Significant assumptions were as follows: | |||||||||||||||
Pension Benefits | Other Benefits | ||||||||||||||
At December 31, | At December 31, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Weighted-average assumptions used in measuring the Company’s benefit obligation: | |||||||||||||||
Discount rate | 4.30 | % | 5.35 | % | 4.30 | % | 5.35 | % | |||||||
Rate of compensation increase | 5.00 | % | 5.00 | % | 5.00 | % | 5.00 | % |
Pension Benefits | Other Benefits | ||||||||||||||||||||
Years Ended December 31, | Years Ended December 31, | ||||||||||||||||||||
2012 | 2011 | 2010 | 2012 | 2011 | 2010 | ||||||||||||||||
Weighted-average assumptions used in measuring the net periodic pension benefit cost: | |||||||||||||||||||||
Discount long-term rate | 5.35 | % | 5.75 | % | 6.10 | % | 5.35 | % | 5.75 | % | 6.10 | % | |||||||||
Expected return on plan assets | 7.75 | % | 8.00 | % | 8.00 | % | N/A | N/A | N/A | ||||||||||||
Rate of compensation increase | 5.00 | % | 5.00 | % | 5.00 | % | 5.00 | % | 5.00 | % | 5.00 | % |
Yield curves matching our benefit obligations were derived using a model based on high quality corporate bond data from Bloomberg. The model develops a discount rate by selecting a portfolio of high quality corporate bonds whose projected cash flows match the projected benefit payments of the plan. The resulting curves were used to identify a discount rate for the Company of 4.30% and 5.35% at December 31, 2012 and 2011, respectively, based on the timing of future benefit payments. The expected long-term return on plan assets used for each period in the three years ended December 2012 was made based on an analysis of the asset returns over multiple time horizons for the Company's actual plan and for other comparable U.S. corporations. At December 31, 2012, Newmont has estimated the expected long term return on plan assets to be 7.75% in calculating its benefit obligation, which will be used in determining future net periodic benefit cost. Determination of the long-term return on plan assets is a result of considering the most recent capital market forecasts and the plans' current allocation as well as the actual return on plan assets as compared to the expected return on assets over the last 5 years. The average actual return on plan assets during the 24 years ended December 31, 2012 approximated 9%.
The pension plans employ several independent investment firms which invest the assets of the plans in certain approved funds that correspond to specific asset classes with associated target allocations. The goal of the pension fund investment program is to achieve prudent actuarial funding ratios while maintaining acceptable risk levels. The investment performance of the plans and that of the individual investment firms is measured against recognized market indices. The performance of the pension funds are monitored by an investment committee comprised of members of the Company's management, which is advised by an independent investment consultant. With the exception of global capital market economic risks, the Company has identified no significant portfolio risks associated to asset classes. The following is a summary of the target asset allocations for 2012 and the actual asset allocation at December 31, 2012.
Actual at | ||||||||
December 31, | ||||||||
Asset Allocation | Target | 2012 | ||||||
U.S. equity investments | 25 | % | 25 | % | ||||
International equity investments | 27 | % | 27 | % | ||||
Fixed income investments | 40 | % | 40 | % | ||||
Other | 8 | % | 8 | % |
The following table sets forth the Company's pension plan assets measured at fair value by level within the fair value hierarchy. Assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
Fair Value at December 31, 2012 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Plan Assets: | |||||||||||||||
Cash and cash equivalents | $ | 2 | $ | - | $ | - | $ | 2 | |||||||
Commingled funds | - | 636 | - | 636 | |||||||||||
$ | 2 | $ | 636 | $ | - | $ | 638 | ||||||||
Fair Value at December 31, 2011 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Plan Assets: | |||||||||||||||
Cash and cash equivalents | $ | 1 | $ | - | $ | - | $ | 1 | |||||||
Commingled funds | - | 539 | - | 539 | |||||||||||
$ | 1 | $ | 539 | $ | - | $ | 540 |
The pension plans' cash and cash equivalents 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 pension plans' commingled fund investments are classified within Level 2. The funds are managed by several fund managers and are valued at the net asset value per share for each fund. Although the majority of underlying assets in the funds consist of actively traded equity securities and bonds, the unit of account is considered to be at the fund level, and therefore, the investments are classified as Level 2. At December 31, 2012, the underlying assets of the commingled funds consist of U.S. equity investments (25%), international equity investments (27%), fixed income investments (40%), and other investments (8%).
The assumed health care cost trend rate to measure the expected cost of benefits was 7.70% for 2013, 6.90% for 2014, 6.40% for 2015, 5.90% for 2016, 5.50% for 2017 and approximately 5.00% for each year thereafter. Assumed health care cost trend rates have a significant effect on amounts reported for the health care plans. A one-percentage-point change in assumed health care cost trend rates would have the following effects:
One-percentage-point | One-percentage-point | |||||||
Increase | Decrease | |||||||
Effect on total of service and interest cost components of net periodic post-retirement health care benefit cost | $ | 2 | $ | (1) | ||||
Effect on the health care component of the accumulated post-retirement benefit obligation | $ | 22 | $ | (17) |
Cash Flows
Benefit payments expected to be paid to pension plans are as follows: $29 in 2013, $35 in 2014, $44 in 2015, $39 in 2016, $46 in 2017, and $291 in total over the five years from 2018 through 2021. Benefit payments made to other benefit plan participants are expected to be as follows: $4 in 2013, $5 in 2014, $5 in 2015, $6 in 2016, $6 in 2017, and $38 in total over the five years from 2018 through 2021.
Savings Plans
The Company has two qualified defined contribution savings plans, one that covers salaried and non-union hourly employees and one that covers substantially all hourly union employees. In addition, the Company has one non-qualified supplemental savings plan for salaried employees whose benefits under the qualified plan are limited by federal regulations. When an employee meets eligibility requirements, the Company matches 100% of employee contributions of up to 6% of base salary for the salaried and hourly union plans. The Company makes a contribution between 5.0% and 7.5% (based on continuous years of service) to each non-union hourly employee's retirement contribution account at its sole discretion. Matching contributions are made with Newmont stock; however, no holding restrictions are placed on such contributions, which totaled $20 in 2012, $17 in 2011, and $15 in 2010.
|
NOTE 14 STOCK BASED COMPENSATION
The Company has stock incentive plans for executives and eligible employees. Stock incentive awards include restricted stock units, performance leveraged stock units, financial performance stock bonuses, and strategic stock units. Prior to 2012, the Company also granted options to purchase shares of stock with exercise prices not less than fair market value of the underlying stock at the date of grant. At December 31, 2012, 7,842,793 shares were available for future stock incentive plan awards.
Employee Stock Options
Stock options granted under the Company's stock incentive plans vest over periods of three years or more and are exercisable over a period of time not to exceed 10 years from the grant date. The value of each option award is estimated at the grant date using the Black-Scholes option pricing model. The Black-Scholes option pricing model requires the input of subjective assumptions, including the expected term of the option award and stock price volatility. The expected term of options granted is derived from historical data on employee exercise and post-vesting employment termination experience. Expected volatility is based on the historical volatility of our stock at the grant date. These estimates involve inherent uncertainties and the application of management's judgment. In addition, we are required to estimate the expected forfeiture rate and only recognize expense for those options expected to vest. As a result, if other assumptions had been used, our recorded stock based compensation expense would have been different from that reported. The Black-Scholes option pricing model used the following weighted-average assumptions:
2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||
Weighted-average risk-free interest rate | N/A | 2.0 | % | 2.5 | % | 2.0 | % | 3.1 | % | |||||||
Dividend yield | N/A | 1.4 | % | 0.7 | % | 1.0 | % | 1.0 | % | |||||||
Expected life in years | N/A | 6 | 5 | 5 | 5 | |||||||||||
Volatility | N/A | 37 | % | 38 | % | 36 | % | 30 | % |
The following table summarizes annual activity for all stock options for each of the three years ended December 31: | |||||||||||||||||||
2012 | 2011 | 2010 | |||||||||||||||||
Number of Shares | Weighted-Average Exercise Price | Number of Shares | Weighted-Average Exercise Price | Number of Shares | Weighted-Average Exercise Price | ||||||||||||||
Outstanding at beginning of year | 5,481,341 | $ | 48.40 | 5,414,205 | $ | 45.36 | 6,142,073 | $ | 42.65 | ||||||||||
Granted | - | $ | - | 1,276,250 | $ | 58.72 | 918,343 | $ | 55.68 | ||||||||||
Exercised | (591,859) | $ | 41.22 | (928,037) | $ | 43.67 | (1,494,686) | $ | 40.38 | ||||||||||
Forfeited and expired | (479,558) | $ | 54.57 | (281,077) | $ | 56.56 | (151,525) | $ | 51.02 | ||||||||||
Outstanding at end of year | 4,409,924 | $ | 48.69 | 5,481,341 | $ | 48.40 | 5,414,205 | $ | 45.36 | ||||||||||
Options exercisable at year-end | 3,191,850 | $ | 48.07 | 3,166,178 | $ | 46.22 | 3,211,115 | $ | 45.50 | ||||||||||
Weighted-average fair value per share | |||||||||||||||||||
of options granted during the year | N/A | $ | 18.90 | $ | 20.01 |
The following table summarizes information about stock options outstanding and exercisable at December 31, 2012: | |||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||
Range of Exercise Prices | Number Outstanding | Weighted-Average Remaining Contractual Life (in years) | Weighted-Average Exercise Price | Number Exercisable | Weighted-Average Exercise Price | ||||||||
$20 to $30 | 329,272 | 5.4 | $ | 27.02 | 29,272 | $ | 28.11 | ||||||
$30 to $40 | 733,703 | 6.0 | $ | 39.78 | 733,703 | $ | 39.78 | ||||||
$40 to $50 | 1,227,117 | 3.9 | $ | 44.53 | 1,225,917 | $ | 44.53 | ||||||
$50 to $60 | 2,094,041 | 7.3 | $ | 57.43 | 1,194,364 | $ | 57.15 | ||||||
$60+ | 25,791 | 8.9 | $ | 67.41 | 8,594 | $ | 67.41 | ||||||
4,409,924 | 6.0 | $ | 48.69 | 3,191,850 | $ | 48.07 |
At December 31, 2012, there was $11 of unrecognized compensation cost related to 1,218,074 unvested stock options. This cost is expected to be recognized over a weighted-average period of approximately two years. The total intrinsic value of options exercised in 2012, 2011 and 2010 was $5, $18 and $29, respectively. At December 31, 2012, the aggregate intrinsic value of outstanding stock options was $14 and the aggregate intrinsic value of exercisable options was $8.
The following stock options vested in each of the three years ended December 31:
2012 | 2011 | 2010 | ||||||||
Stock options vested | 1,003,888 | 950,119 | 922,463 | |||||||
Weighted-average exercise price | $ | 52.09 | $ | 46.73 | $ | 42.16 |
Other Stock Based Compensation
The Company grants restricted stock units to executives and eligible employees upon achievement of certain financial and operating results. Restricted stock units vest over periods of three years or more. Prior to vesting, holders of restricted stock units do not have the right to vote the underlying shares; however, executives accrue dividend equivalents on their restricted stock units, which are paid at the time the restricted stock units vest. The restricted stock units are subject to forfeiture risk and other restrictions. Upon vesting, the employee is entitled to receive one share of the Company's common stock for each restricted stock unit. In 2012, 2011 and 2010, the Company granted 1,062,819, 586,944 and 483,408 restricted stock units, respectively, at a weighted-average fair market value of $51, $57 and $52, respectively, per underlying share of the Company's common stock. At December 31, 2012, 970,284, 303,372 and 86,626 shares remain unvested for the 2012, 2011 and 2010 grants, respectively.
The Company grants performance leveraged stock units (“PSUs”) to eligible executives, based upon certain measures of shareholder return. In 2012, 2011, and 2010, the Company granted 241,448, 102,313, and 204,732 PSUs, respectively, at a weighted-average fair market value of $77, $76, and $69, respectively. The actual number of PSUs that vest are determined at the end of a three year performance period. At December 31, 2012, 241,448, 102,313, and 25,730 PSUs remained unvested for the 2012, 2011, and 2010 grants.
Through 2012, the Company granted financial performance stock bonuses to eligible executives upon achievement of certain financial and operating results, based on a targeted number of shares at the beginning of each performance period. At the end of the performance period, one third of the bonus was paid in common stock and two-thirds of the bonus were paid in restricted stock units that vest in equal annual increments at the second and third anniversaries of the start of the performance period. In 2012, 2011, and 2010 the Company granted 35,245, 42,932, and 64,646 common shares, respectively, and 70,501, 85,632, and 129,302 restricted stock units, respectively, included in the restricted stock unit grants above at a fair market value of $59, $55, and $50 per underlying share of the Company's common stock, respectively, under the financial performance stock bonus plan.
Beginning in 2013, the Company will grant strategic stock units (“SSUs”) to eligible executives, based upon certain measures of earnings before income tax, depreciation and amortization (“EBITDA”), based on a targeted number of shares at the beginning of each performance period. At the end of the performance period, one third of the SSUs will be issued without restriction in the form of common stock, and two-thirds of the bonus will be paid in restricted stock units that vest in equal annual increments at the second and third anniversaries of the start of the performance period. In 2012, the Company recorded SSU expense from the service inception date for the expected 2013 grant.
The total intrinsic value of other stock based compensation awards that vested in 2012, 2011 and 2010 was $37, $33 and $28, respectively. At December 31, 2012, there was $65 of unrecognized compensation costs related to the unvested other stock based compensation awards. This cost is expected to be recognized over a weighted-average period of approximately two years.
The Company recognized stock based compensation as follows:
Years Ended December 31, | ||||||||||
2012 | 2011 | 2010 | ||||||||
Restricted stock units | $ | 26 | $ | 32 | $ | 29 | ||||
Stock options | 13 | 19 | 16 | |||||||
Performance leveraged stock units | 10 | 7 | 7 | |||||||
Strategic stock units | 2 | - | - | |||||||
$ | 51 | $ | 58 | $ | 52 |
|
NOTE 15 ACQUISITIONS
On April 6, 2011, Newmont acquired all of the outstanding common shares of Fronteer Gold Inc. (“Fronteer”). Pursuant to the terms of the acquisition, shareholders of Fronteer received C$14.00 in cash and one-fourth of a common share in Pilot Gold, which retained certain exploration assets of Fronteer, for each common share of Fronteer. Newmont completed the acquisition to acquire, among other assets, the exploration stage Long Canyon project, which is located approximately one hundred miles from the Company's existing infrastructure in Nevada and provides the potential for significant development and operating synergies. In connection with the acquisition, Newmont incurred transaction costs of $22, which were recorded in Other Expense, net.
The Fronteer purchase price allocation was based on the estimated fair value of assets acquired and liabilities assumed as follows:
Assets: | ||||||
Cash | $ | 2 | ||||
Property, plant and mine development, net | 3,226 | |||||
Investments | 281 | |||||
Other assets | 7 | |||||
$ | 3,516 | |||||
Liabilities: | ||||||
Deferred income tax liability | $ | 1,241 | ||||
Other liabilities | 16 | |||||
1,257 | ||||||
Net assets acquired | $ | 2,259 |
The pro forma impact of the acquisition on Net Income was not material as Fronteer was not in production.
On June 25, 2009 the Company completed the acquisition of the remaining 33.33% interest in Boddington from AngloGold Ashanti Australia Limited (“AngloGold”). Consideration for the acquisition consisted of $982 and a contingent royalty capped at $100, equal to 50% of the average realized operating margin (Revenue less Costs applicable to sales on a by-product basis), if any, exceeding $600 per ounce, payable quarterly beginning in the second quarter of 2010 on one-third of gold sales from Boddington. At the acquisition date, the Company estimated the fair value of the contingent consideration at $62. In connection with the acquisition, the Company incurred $67 of transaction costs in 2009 of which $15 of these costs were paid at December 31, 2010.
At December 31, 2012 and 2011, the estimated fair value of the unpaid contingent consideration was approximately $41 and $54, respectively. Changes to the estimated fair value resulting from periodic revaluations are recorded to Other expense, net. This contingent royalty is capped at $100 in aggregate payments, and at June 30, 2012, the Company increased the accrual to the maximum of $100. During 2012, 2011 and 2010, the Company paid $25, $30 and $4, respectively, related to the contingent consideration. The range of remaining undiscounted amounts the Company could pay is between $0 and $41.
|
NOTE 16 FAIR VALUE ACCOUNTING
Fair value accounting establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:
Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
Level 2 Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and
Level 3 Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).
The following table sets forth the Company's assets and liabilities measured at fair value on a recurring basis (at least annually) by level within the fair value hierarchy. As required by accounting guidance, assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
Fair Value at December 31, 2012 | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||
Assets: | |||||||||||||||
Cash equivalents | $ | 208 | $ | 208 | $ | - | $ | - | |||||||
Marketable equity securities: | |||||||||||||||
Extractive industries | 1,414 | 1,414 | - | - | |||||||||||
Other | 3 | 3 | - | - | |||||||||||
Marketable debt securities: | |||||||||||||||
Asset backed commercial paper | 19 | - | - | 19 | |||||||||||
Corporate | 14 | - | 14 | - | |||||||||||
Auction rate securities | 5 | - | - | 5 | |||||||||||
Trade receivable from provisional copper | 169 | 169 | - | - | |||||||||||
and gold concentrate sales, net | |||||||||||||||
Derivative instruments, net: | |||||||||||||||
Foreign exchange forward contracts | 252 | - | 252 | - | |||||||||||
Diesel forward contracts | 1 | - | 1 | - | |||||||||||
$ | 2,085 | $ | 1,794 | $ | 267 | $ | 24 | ||||||||
Liabilities: | |||||||||||||||
Boddington contingent consideration | 41 | - | - | 41 | |||||||||||
Holt Property Royalty | 240 | - | - | 240 | |||||||||||
$ | 281 | $ | - | $ | - | $ | 281 |
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 debt securities are mainly commingled 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.
The Company's marketable debt securities include investments in auction rate securities and asset backed commercial paper. The Company reviews the fair value for auction rate securities and asset backed commercial paper on a quarterly basis. The auction rate securities are traded in markets that are not active, trade infrequently and have little price transparency. See table below which sets forth a summary of the quantitative and qualitative information related to the significant unobservable inputs used in the calculation of the fair value.
The Company's net trade receivable from provisional copper and gold concentrate sales, subject to final pricing, is valued using quoted market prices based on forward curves and, as such, is classified within Level 1 of the fair value hierarchy.
The Company's derivative instruments are valued using pricing models and the Company generally uses similar models to value similar instruments. Valuation models require a variety of inputs, including contractual terms, market prices, yield curves, credit spreads, measures of volatility, and correlations of such inputs. The Company's derivatives trade in liquid markets, and as such, model inputs can generally be verified and do not involve significant management judgment. Such instruments are classified within Level 2 of the fair value hierarchy.
The estimated value of the Boddington contingent royalty was determined using a Monte Carlo valuation model which simulates future gold and copper prices and costs applicable to sales. This contingent royalty is capped at $100, and at June 30, 2012, the Company increased the accrual to the maximum of $100. The Boddington contingent royalty is classified within Level 3 of the fair value hierarchy. See table below which sets forth a summary of the quantitative and qualitative information related to the significant unobservable inputs used in the calculation of the fair value.
The estimated fair value of the Holt sliding scale royalty was determined using a Monte Carlo valuation model. The sliding scale royalty liability is classified within Level 3 of the fair value hierarchy. See table below which sets forth a summary of the quantitative and qualitative information related to the significant unobservable inputs used in the calculation of the fair value.
The following table sets forth a summary of the quantitative and qualitative information related to the unobservable inputs used in the calculation of the Company's Level 3 financial assets and liabilities for the year ended December 31, 2012:
Description | At December 31, 2012 | Valuation technique | Unobservable input | Range/Weighted average | |||||||||||
Auction Rate Securities | $ | 5 | Discounted cash flow | Weighted average recoverability rate | 58 | % | |||||||||
Asset Backed Commercial Paper | 19 | Discounted cash flow | Probability of return | 13-74 | % | ||||||||||
Boddington Contingent Consideration | 41 | Monte Carlo | Discount rate | 4 | % | ||||||||||
LT Gold price | $ | 1,500 | |||||||||||||
LT Copper price | $ | 3.50 | |||||||||||||
Holt property royalty | 240 | Monte Carlo | Weighted average discount rate | 3 | % | ||||||||||
LT Gold price | $ | 1,500 | |||||||||||||
The following table sets forth a summary of changes in the fair value, on a recurring basis, of the Company's Level 3 financial assets and liabilities for the year ended December 31, 2012:
Auction Rate Securities | Asset Backed Commercial Paper | Total Assets | Boddington Contingent Consideration | Holt Property Royalty | Total Liabilities | ||||||||||||||||
December 31, 2011 | $ | 5 | $ | 19 | $ | 24 | $ | 54 | $ | 176 | $ | 230 | |||||||||
Revaluation | - | - | - | 12 | 81 | 93 | |||||||||||||||
Settlements | - | - | - | (25) | (17) | (42) | |||||||||||||||
December 31, 2012 | $ | 5 | $ | 19 | $ | 24 | $ | 41 | $ | 240 | $ | 281 |
At December 31, 2012, the assets and liabilities classified within Level 3 of the fair value hierarchy represent 1% and 100% of the total assets and liabilities measured at fair value, on a recurring basis.
|
NOTE 17 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 utilized by the Company and described below were transacted for risk management purposes and qualify as cash flow or fair value 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 and are reclassified to income during the period in which the hedged transaction affects earnings. Gains and losses from hedge ineffectiveness are recognized in current earnings.
Foreign Currency Contracts
Newmont utilizes foreign currency contracts to reduce the variability of the US dollar amount of forecasted foreign currency expenditures caused by changes in exchange rates. Newmont hedges a portion of the Company's A$ and NZ$ denominated operating expenditures which results in a blended rate realized each period. The hedging instruments are fixed forward contracts with expiration dates ranging up to five years from the date of issue. The principal hedging objective is reduction in the volatility of realized period-on-period $/A$ and $/NZ$ rates, respectively and the related reduction in volatility of the underlying operating and capital costs as a result of currency changes.
In June 2011, Newmont began hedging a portion of the Company's A$ denominated capital expenditures related to the Akyem project in Africa utilizing fixed forward contracts with expiration dates up to three years.
In July 2011, Newmont began hedging a portion of the Company's A$ denominated capital expenditures related to the planned construction of a mine shaft at Tanami in Australia utilizing foreign currency contracts. In November 2012, Newmont decided to defer further construction of the project to evaluate the impact of the Auron discovery on the overall life of the mine plan. As a result, the forecasted transaction is no longer probable to occur within the original expected time frame, and hedge accounting has been discontinued. This resulted in a $3 gain reclassified from Accumulated other comprehensive income, net of tax to Income.
Newmont had the following foreign currency derivative contracts outstanding at December 31, 2012:
Expected Maturity Date | |||||||||||||||||||||
Total/ | |||||||||||||||||||||
2013 | 2014 | 2015 | 2016 | 2017 | Average | ||||||||||||||||
A$ Operating Fixed Forward Contracts: | |||||||||||||||||||||
A$ notional (millions) | 1,210 | 940 | 635 | 374 | 107 | 3,266 | |||||||||||||||
Average rate ($/A$) | 0.94 | 0.92 | 0.91 | 0.91 | 0.91 | 0.92 | |||||||||||||||
Expected hedge ratio | 76 | % | 61 | % | 41 | % | 24 | % | 7 | % | |||||||||||
A$ Capital Fixed Forward Contracts: | |||||||||||||||||||||
A$ notional (millions) | 6 | - | - | - | - | 6 | |||||||||||||||
Average rate ($/A$) | 0.97 | - | - | - | - | 0.97 | |||||||||||||||
Expected hedge ratio | 73 | % | - | - | - | - | |||||||||||||||
NZ$ Operating Fixed Forward Contracts: | |||||||||||||||||||||
NZ$ notional (millions) | 66 | 23 | - | - | - | 89 | |||||||||||||||
Average rate ($/NZ$) | 0.79 | 0.79 | - | - | - | 0.79 | |||||||||||||||
Expected hedge ratio | 54 | % | 20 | % | - | - | - |
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 December 31, 2012:
Expected Maturity Date | |||||||||||||||
Total/ | |||||||||||||||
2013 | 2014 | 2015 | Average | ||||||||||||
Diesel Fixed Forward Contracts: | |||||||||||||||
Diesel gallons (millions) | 26 | 15 | 4 | 45 | |||||||||||
Average rate ($/gallon) | 2.93 | 2.87 | 2.79 | 2.90 | |||||||||||
Expected Nevada hedge ratio | 59 | % | 36 | % | 11 | % |
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 and recognized in Interest expense consistent with the interest incurred on the senior notes issued in 2012. 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.
Fair Value Hedges
Interest Rate Swap Contracts
Newmont had $222 fixed to floating swap contracts designated as a hedge against 8 5/8% debentures which matured in May 2011
Derivative Instrument Fair Values
Newmont had the following derivative instruments designated as hedges at December 31, 2012 and December 31, 2011:
Fair Values of Derivative Instruments | ||||||||||||||
At December 31, 2012 | ||||||||||||||
Other Current Assets | Other Long-Term Assets | Other Current Liabilities | Other Long-Term Liabilities | |||||||||||
Foreign currency exchange contracts: | ||||||||||||||
A$ operating fixed forward contracts | $ | 108 | $ | 143 | $ | - | $ | 1 | ||||||
NZ$ operating fixed forward contracts | 2 | - | - | - | ||||||||||
Diesel fixed forward contracts | 2 | 1 | 1 | 1 | ||||||||||
Total derivative instruments (Notes ##OthAssetsNote and ##OthLiabNote) | $ | 112 | $ | 144 | $ | 1 | $ | 2 | ||||||
Fair Values of Derivative Instruments | ||||||||||||||
At December 31, 2011 | ||||||||||||||
Other Current Assets | Other Long-Term Assets | Other Current Liabilities | Other Long-Term Liabilities | |||||||||||
Foreign currency exchange contracts: | ||||||||||||||
A$ operating fixed forward contracts | $ | 121 | $ | 112 | $ | 6 | $ | 4 | ||||||
A$ capital fixed forward contracts | - | - | - | 1 | ||||||||||
NZ$ operating fixed forward contracts | 2 | - | 1 | - | ||||||||||
Diesel fixed forward contracts | 4 | - | 2 | 1 | ||||||||||
Interest rate swap contracts | - | - | 399 | - | ||||||||||
Total derivative instruments (Notes ##OthAssetsNote and ##OthLiabNote) | $ | 127 | $ | 112 | $ | 408 | $ | 6 |
The following tables show the location and amount of gains (losses) reported in the Company's Consolidated Financial Statements related to the Company's cash flow and fair value hedges and the gains (losses) recorded for the hedged item related to the fair value hedges.
Foreign Currency Exchange Contracts | Diesel Fixed Forward Contracts | ||||||||||||||||||
For the years ended December 31, | 2012 | 2011 | 2010 | 2012 | 2011 | 2010 | |||||||||||||
Cash flow hedging relationships: | |||||||||||||||||||
Gain recognized in other comprehensive income (effective portion) | $ | 192 | $ | 151 | $ | 287 | $ | 7 | $ | 6 | $ | 6 | |||||||
Gain reclassified from Accumulated other comprehensive income into income (effective portion) (1)? | $ | 166 | $ | 188 | $ | 92 | $ | 7 | $ | 14 | $ | 4 | |||||||
Forward Starting Swap Contracts | |||||||||||||||||||
For the years ended December 31, | 2012 | 2011 | 2010 | ||||||||||||||||
Cash flow hedging relationships: | |||||||||||||||||||
Gain (loss) recognized in other comprehensive income (effective portion) | $ | 36 | $ | (399) | $ | - | |||||||||||||
(Loss) reclassified from Accumulated other comprehensive income into income (effective portion) (1)? | $ | (10) | $ | - | $ | - | |||||||||||||
Gain (loss) reclassified from Accumulated other comprehensive income into income (ineffective portion) (2)? | $ | 2 | $ | (15) | $ | - |
(1) The gain (loss) for the effective portion of the foreign exchange and diesel cash flow hedges reclassified from Accumulated other comprehensive income is included in Costs applicable to sales. The loss for the effective portion of the forward starting swaps reclassified from Accumulated other comprehensive income is included in Interest Expense.
(2) The ineffective portion recognized for cash flow hedges is included in Other Income, net.
Interest Rate Swap Contracts | 8 5/8% Debentures (Hedged Portion) | |||||||||||||||||
For the years ended December 31, | 2012 | 2011 | 2010 | 2012 | 2011 | 2010 | ||||||||||||
Fair value hedging relationships: | ||||||||||||||||||
Gain (loss) recognized in income (effective portion) (1)? | $ | - | $ | 3 | $ | 6 | $ | - | $ | (6) | $ | - | ||||||
Gain (loss) recognized in income (ineffective portion) (2)? | $ | - | $ | (2) | $ | (4) | $ | - | $ | - | $ | 2 |
(1) The gain (loss) recognized for the effective portion of fair value hedges and the underlying hedged debt is included in Interest expense, net.
(2) The ineffective portion recognized for fair value hedges and the underlying hedged debt is included in Other income, net.
The amount to be reclassified from Accumulated other comprehensive income, net of tax to income during the next 12 months is a gain of approximately $58.
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.
The average LME copper price was $3.61 per pound during 2012, compared with the Company's recorded average provisional price of $3.60 before mark-to-market losses and treatment and refining charges. During 2012, changes in copper prices resulted in a provisional pricing mark-to-market gain of $22 ($0.10 per pound). At December 31, 2012, Newmont had copper sales of 57 million pounds priced at an average of $3.60 per pound, subject to final pricing over the next several months.
The average London P.M. fix for gold was $1,669 per ounce during 2012, compared with the Company's recorded average provisional price of $1,668 per ounce before mark-to-market gains and treatment and refining charges. During 2012, changes in gold prices resulted in a provisional pricing mark-to-market gain of $4 ($1 per ounce). At December 31, 2012, Newmont had gold sales of 77,000 ounces priced at an average of $1,665 per ounce, subject to final pricing over the next several months.
|
NOTE ##InvestNote INVESTMENTS | ||||||||||||||||
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: | ||||||||||||||||
La Zanja | 65 | - | - | 65 | ||||||||||||
$ | 728 | $ | 726 | $ | (8) | $ | 1,446 | |||||||||
At December 31, 2011 | ||||||||||||||||
Cost/Equity | Unrealized | Fair/Equity | ||||||||||||||
Basis | Gain | Loss | Basis | |||||||||||||
Current: | ||||||||||||||||
Marketable Equity Securities: | ||||||||||||||||
Paladin Energy Ltd. | $ | 60 | $ | 13 | $ | - | $ | 73 | ||||||||
Other | 15 | 7 | (1) | 21 | ||||||||||||
$ | 75 | $ | 20 | $ | (1) | $ | 94 | |||||||||
Long-term: | ||||||||||||||||
Marketable Debt Securities: | ||||||||||||||||
Asset backed commercial paper | $ | 25 | $ | - | $ | (6) | $ | 19 | ||||||||
Auction rate securities | 7 | - | (2) | 5 | ||||||||||||
Corporate | 10 | 1 | - | 11 | ||||||||||||
42 | 1 | (8) | 35 | |||||||||||||
Marketable Equity Securities: | ||||||||||||||||
Canadian Oil Sands Trust | 302 | 401 | - | 703 | ||||||||||||
Gabriel Resources Ltd. | 76 | 236 | - | 312 | ||||||||||||
Regis Resources Ltd. | 36 | 218 | - | 254 | ||||||||||||
Other | 92 | 16 | (17) | 91 | ||||||||||||
506 | 871 | (17) | 1,360 | |||||||||||||
Other investments, at cost | 11 | - | - | 11 | ||||||||||||
Investment in Affiliates: | ||||||||||||||||
La Zanja | 66 | - | - | 66 | ||||||||||||
$ | 625 | $ | 872 | $ | (25) | $ | 1,472 |
In 2012, the Company recognized impairments for other-than-temporary declines in value of $47 for marketable equity securities. In 2011, in conjunction with the acquisition of Fronteer, Newmont acquired $208 of Paladin Energy Ltd. securities and $73 of other marketable equity securities which were subsequently impaired for other-than-temporary declines in value resulting in charges of $148 for Paladin Energy Ltd. and $32 for other marketable equity securities.
In 2011, Newmont sold its investment in New Gold Inc. and realized a gain of $50 and sold other marketable equity securities and realized a gain of $14.
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 December 31, 2012 | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |||||||||||
Asset backed commercial paper | $ | - | $ | - | $ | 19 | $ | 6 | $ | 19 | $ | 6 | |||||
Auction rate securities | - | - | 5 | 2 | 5 | 2 | |||||||||||
Marketable equity securities | 79 | 5 | - | - | 79 | 5 | |||||||||||
$ | 79 | $ | 5 | $ | 24 | $ | 8 | $ | 103 | $ | 13 | ||||||
Less than 12 Months | 12 Months or Greater | Total | |||||||||||||||
At December 31, 2011 | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |||||||||||
Asset backed commercial paper | $ | - | $ | - | $ | 19 | $ | 6 | $ | 19 | $ | 6 | |||||
Auction rate securities | - | - | 5 | 2 | 5 | 2 | |||||||||||
Marketable equity securities | 42 | 18 | - | - | 42 | 18 | |||||||||||
$ | 42 | $ | 18 | $ | 24 | $ | 8 | $ | 66 | $ | 26 |
Included in the tables above are the unrealized losses of $13 and $26 at December 31, 2012 and 2011, respectively, related to the Company's investments in asset backed commercial paper, auction rate securities and marketable equity securities. While the fair values of these investments 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 ##InventoriesNote INVENTORIES | ||||||||
At December 31, | ||||||||
2012 | 2011 | |||||||
In-process | $ | 143 | $ | 159 | ||||
Concentrate | 152 | 116 | ||||||
Precious metals | 31 | 12 | ||||||
Materials, supplies and other | 470 | 427 | ||||||
$ | 796 | $ | 714 |
The Company recorded aggregate write-downs of $5, $26, and $8 for 2012, 2011, and 2010, respectively, to reduce the carrying value of material and supply inventories to net realizable value. These inventory write-downs are classified as components of Costs applicable to sales. The 2012 write-downs are primarily related to Nevada. Of the write-downs in 2011, $17 are related to the Hope Bay project and are classified as a component of Other expense, net. The remaining write-downs in 2011 and 2010 were related to Nevada and Batu Hijau. These inventory write-downs are classified as components of Costs applicable to sales.
|
NOTE ##StockpilesNote STOCKPILES AND ORE ON LEACH PADS | ||||||||
At December 31, | ||||||||
2012 | 2011 | |||||||
Current: | ||||||||
Stockpiles | $ | 602 | $ | 506 | ||||
Ore on leach pads | 184 | 165 | ||||||
$ | 786 | $ | 671 | |||||
Long-term: | ||||||||
Stockpiles | $ | 2,514 | $ | 1,904 | ||||
Ore on leach pads | 382 | 367 | ||||||
$ | 2,896 | $ | 2,271 |
At December 31, | ||||||||
2012 | 2011 | |||||||
Stockpiles and ore on leach pads: | ||||||||
Nevada | $ | 699 | $ | 536 | ||||
La Herradura | 57 | 6 | ||||||
Yanacocha | 498 | 512 | ||||||
Boddington | 474 | 435 | ||||||
Batu Hijau | 1,543 | 1,119 | ||||||
Other Australia/New Zealand | 173 | 161 | ||||||
Ahafo | 235 | 173 | ||||||
Akyem | 3 | - | ||||||
$ | 3,682 | $ | 2,942 |
The Company recorded write-downs of $28, $1, and $1 for 2012, 2011, and 2010, respectively, to reduce the carrying value of stockpiles and ore on leach pads to net realizable value. Of the writedowns in 2012, $17 are related to Waihi with the remaining related to Yanacocha and Tanami. These write-downs are classified as components of Costs applicable to sales.
|
NOTE ##OthAssetsNote OTHER ASSETS | ||||||||
At December 31, | ||||||||
2012 | 2011 | |||||||
Other current assets: | ||||||||
Refinery metal inventory and receivable | $ | 1,183 | $ | 796 | ||||
Prepaid assets | 213 | 93 | ||||||
Derivative instruments | 112 | 127 | ||||||
Restricted cash | 12 | 20 | ||||||
Note receivable | - | 12 | ||||||
Other | 141 | 85 | ||||||
$ | 1,661 | $ | 1,133 | |||||
Other long-term assets: | ||||||||
Goodwill | $ | 188 | $ | 188 | ||||
Derivative instruments | 144 | 112 | ||||||
Intangible assets | 136 | 147 | ||||||
Income tax receivable | 92 | 142 | ||||||
Restricted cash | 90 | 48 | ||||||
Debt issuance costs | 73 | 59 | ||||||
Other receivables | 9 | 17 | ||||||
Other | 140 | 144 | ||||||
$ | 872 | $ | 857 |
|
NOTE ##PPMDNote PROPERTY, PLANT AND MINE DEVELOPMENT | |||||||||||||||||||||
At December 31, 2012 | At December 31, 2011 | ||||||||||||||||||||
Depreciable | Accumulated | Net Book | Accumulated | Net Book | |||||||||||||||||
Life | Cost | Amortization | Value | Cost | Amortization | Value | |||||||||||||||
(in years) | |||||||||||||||||||||
Land | — | $ | 267 | $ | - | $ | 267 | $ | 263 | $ | - | $ | 263 | ||||||||
Facilities and equipment | 1- | 27 | 13,952 | (6,573) | 7,379 | 13,056 | (5,926) | 7,130 | |||||||||||||
Mine development | 1- | 27 | 4,793 | (2,054) | 2,739 | 3,903 | (1,758) | 2,145 | |||||||||||||
Mineral interests | 1- | 27 | 4,854 | (752) | 4,102 | 4,868 | (713) | 4,155 | |||||||||||||
Asset retirement cost | 1- | 27 | 988 | (340) | 648 | 758 | (305) | 453 | |||||||||||||
Construction-in-progress | — | 2,875 | - | 2,875 | 1,735 | - | 1,735 | ||||||||||||||
$ | 27,729 | $ | (9,719) | $ | 18,010 | $ | 24,583 | $ | (8,702) | $ | 15,881 | ||||||||||
Leased assets included above in facilities and equipment | 1- | 27 | $ | 5 | $ | (1) | $ | 4 | $ | 374 | $ | (250) | $ | 124 | |||||||
At December 31, 2012 | At December 31, 2011 | ||||||||||||||||||||
Mineral Interests | Gross | Gross | |||||||||||||||||||
Amortization | Carrying | Accumulated | Net Book | Carrying | Accumulated | Net Book | |||||||||||||||
Period | Value | Amortization | Value | Value | Amortization | Value | |||||||||||||||
(in years) | |||||||||||||||||||||
Production stage | 1- | 22 | $ | 1,257 | $ | (752) | $ | 505 | $ | 1,256 | $ | (713) | $ | 543 | |||||||
Development stage | — | 149 | - | 149 | 149 | - | 149 | ||||||||||||||
Exploration stage | — | 3,448 | - | 3,448 | 3,463 | - | 3,463 | ||||||||||||||
$ | 4,854 | $ | (752) | $ | 4,102 | $ | 4,868 | $ | (713) | $ | 4,155 |
Construction-in-progress at December 31, 2012 of $2,875 included $1,519 at South America primarily related to engineering and construction at Conga and infrastructure at Yanacocha, $592 at Africa related to engineering and construction at Akyem and infrastructure at Ahafo, $393 at Asia Pacific related to infrastructure at Boddington, Tanami, Kalgoorlie and Batu Hijau, and $285 at North America related to infrastructure at Nevada.
Construction-in-progress at December 31, 2011 of $1,735 included $916 at South America primarily related to engineering and construction at Conga and infrastructure at Yanacocha, $269 at Africa related to engineering and construction at Akyem and infrastructure at Ahafo, $263 at North America related to infrastructure at Nevada, and $246 at Asia Pacific related to infrastructure at Boddington, Tanami, Kalgoorlie, and Batu Hijau.
Write-down of property, plant and mine development totaled $52, $2,084 and $6 for 2012, 2011 and 2010, respectively. The 2012 write-down was primarily due to an impairment of the FALC JV diamond project as well as write-downs of non-essential surface equipment at Conga. The 2011 write-down was primarily due to an impairment related to the Hope Bay project after evaluating existing development options and economic feasibility for the project compared with other projects and development opportunities within the Company's wider project pipeline. The amount of the Hope Bay write-down was recorded in 2011 at fair value based on the estimated recoverable value, net of transportation and selling costs utilizing the liquidation model.
|
NOTE ##DebtNote DEBT | ||||||||||||
At December 31, 2012 | At December 31, 2011 | |||||||||||
Current | Non-Current | Current | Non-Current | |||||||||
Sale-leaseback of refractory ore treatment plant | $ | - | $ | - | $ | 165 | $ | - | ||||
Corporate revolving credit facility | - | - | - | 33 | ||||||||
2012 Convertible Senior Notes, net | - | - | 514 | - | ||||||||
2014 Convertible Senior Notes, net | - | 535 | - | 512 | ||||||||
2017 Convertible Senior Notes, net | - | 471 | - | 452 | ||||||||
2019 Senior Notes, net | - | 897 | - | 896 | ||||||||
2022 Senior Notes, net | - | 1,489 | - | - | ||||||||
2035 Senior Notes, net | - | 598 | - | 598 | ||||||||
2039 Senior Notes, net | - | 1,087 | - | 1,087 | ||||||||
2042 Senior Notes, net | - | 992 | - | - | ||||||||
Ahafo project finance facility | 10 | 35 | 10 | 45 | ||||||||
PTNNT revolving credit facility | - | 180 | - | - | ||||||||
Other capital leases | - | 4 | - | 1 | ||||||||
$ | 10 | $ | 6,288 | $ | 689 | $ | 3,624 |
Scheduled minimum debt repayments are $10 in 2013, $546 in 2014, $11 in 2015, $11 in 2016, $657 in 2017 and $5,063 thereafter.
Sale-Leaseback of Refractory Ore Treatment Plant
In September 1994, the Company entered into a sale and leaseback agreement for its Refractory Ore Treatment Plant (“ROTP”) located in Carlin, Nevada. The lease term was 21 years and included purchase options during and at the end of the lease at predetermined prices. During 2011, the Company expressed the intent to exercise the early purchase option and buy the ROTP in 2012. Newmont purchased the ROTP at the aggregate Early Buy-Out Price of $167, including interest, with final payment on December 5, 2012.
Corporate Revolving Credit Facility
Effective May 20, 2011, the Company entered into a new uncollateralized $2,500 revolving credit facility with a syndicate of commercial banks. This new revolving credit facility replaced the existing revolving credit facility which was cancelled upon the effectiveness of the new facility. The new facility provides for borrowings in U.S. dollars and contains a letter of credit sub-facility. The new facility originally matured in May 2016. Facility fees vary based on the credit ratings of the Company's senior, uncollateralized, long-term debt. Borrowings under the facility bear interest at a market based rate plus a margin determined by the Company's credit rating. At December 31, 2012, we had $0 in borrowings outstanding under the facility. There was $394 and $244 outstanding in letters of credit at December 31, 2012 and 2011, respectively.
In May 2012, the Company's Corporate Revolving Credit Facility was amended to increase the capacity to $3,000 and extend the facility one year to 2017. The available capacity under the Corporate Revolving Credit Facility prior to the amendment was $2,500.
Subsidiary Financings
PTNNT Revolving Credit Facility
Effective May 27, 2011, PTNNT entered into a new $600 reducing revolving credit facility with a syndicate of banks. This new reducing revolving facility provides for borrowings in U.S. dollars. The facility matures in March 2017. The facility is non-recourse to Newmont and certain assets of PTNNT are pledged as collateral. Borrowings under the facility bear interest at a rate per annum equal to LIBOR plus a margin of 4.00%. Commitment fees currently accrue on the daily average unused amount of the commitment of each lender at an annual rate of 2.00%. A one-time arrangement fee and other debt issuance costs, net of amortization, of $18 related to the facility were capitalized and will be amortized over the term of the debt. There were $180 in borrowings outstanding under the facility at December 31, 2012.
2012 Convertible Senior Notes
In February 2012, the Company's 2012 Convertible Senior Notes matured, resulting in a principal payment of $517. The Company elected to pay the conversion premium of $172 in cash in lieu of issuing common shares.
2014 and 2017 Convertible Senior Notes
In July 2007, the Company issued $1,150 uncollateralized convertible senior notes due in 2014 and 2017, each with a principal amount of $575 for net proceeds of $1,126. The 2014 notes, maturing on July 15, 2014, pay interest semi-annually at a rate of 1.25% per annum, and the 2017 notes, maturing on July 15, 2017, pay interest semi-annually at a rate of 1.63% per annum. The effective interest rates are 6.0% and 6.25% for the 2014 and 2017 notes, respectively. The notes are convertible, at the holder's option, at a conversion price of $44.78 per share of common stock. Upon conversion, the principal amount and all accrued interest will be repaid in cash and any conversion premium will be settled in shares of our common stock or, at our election, cash or any combination of cash and shares of our common stock. In connection with the convertible senior notes offering, the Company entered into Call Spread Transactions. The Call Spread Transactions included the purchase of call options and the sale of warrants. As a result of the Call Spread Transactions, the conversion price of $44.78 was effectively increased to $58.41. The Company is not entitled to redeem the notes prior to their stated maturity dates. Using prevailing interest rates on similar instruments, the estimated fair value of the 2014 and 2017 senior notes was $636 and $613, respectively, at December 31, 2012 and $713 and $651, respectively, at December 31, 2011. The foregoing fair value estimates were prepared with the assistance of an independent third party and may or may not reflect the actual trading value of this debt.
The Company's Consolidated Balance Sheets report the following related to the convertible senior notes:
At December 31, 2012 | At December 31, 2011 | ||||||||||||||||
Convertible Senior Notes Due | Convertible Senior Notes Due | ||||||||||||||||
2012 | 2014 | 2017 | 2012 | 2014 | 2017 | ||||||||||||
Additional paid-in capital | $ | - | $ | 97 | $ | 123 | $ | 46 | $ | 97 | $ | 123 | |||||
Principal amount | $ | - | $ | 575 | $ | 575 | $ | 518 | $ | 575 | $ | 575 | |||||
Unamortized debt discount | - | (40) | (104) | (4) | (63) | (123) | |||||||||||
Net carrying amount | $ | - | $ | 535 | $ | 471 | $ | 514 | $ | 512 | $ | 452 |
For the years ended December 31, 2012, 2011, and 2010, the Company recorded $18, $32, and $32 of interest expense for the contractual interest coupon and $46, $67, and $63 of amortization of the debt discount, respectively, related to the convertible senior notes. At December 31, 2012 the conversion price exceeded the Company's stock price and other limited circumstances required for conversion were not met, as a result the bondholders did not have the option to convert the senior notes.
2019 and 2039 Senior Notes
In September 2009, the Company completed a two part public offering of $900 and $1,100 uncollateralized senior notes maturing on October 1, 2019 and October 1, 2039, respectively. Net proceeds from the 2019 and 2039 notes were $895 and $1,080, respectively. The 2019 notes pay interest semi-annually at a rate of 5.13% per annum and the 2039 notes pay semi-annual interest of 6.25% per annum. Using prevailing interest rates on similar instruments, the estimated fair value of the 2019 and 2039 senior notes was $1,029 and $1,306, respectively, at December 31, 2012 and $993 and $1,299, respectively, at December 31, 2011. The foregoing fair value estimates were prepared with the assistance of an independent third party and may or may not reflect the actual trading value of this debt.
2035 Senior Notes
In March 2005, Newmont issued uncollateralized senior notes with a principal amount of $600 due April 2035 bearing an annual interest rate of 5 7/8%. Interest on the notes is paid semi-annually in April and October. Using prevailing interest rates on similar instruments, the estimated fair value of these senior notes was $678 and $680 at December 31, 2012 and 2011, respectively. The foregoing fair value estimate was prepared with the assistance of an independent third party and may or may not reflect the actual trading value of this debt.
2022 and 2042 Senior Notes
In March 2012, the Company completed a two part public offering of $1,500 and $1,000 uncollateralized Senior Notes maturing on March 15, 2022 and March 15, 2042, respectively. Net proceeds from the 2022 and 2042 Senior Notes were $1,479 and $983, respectively. The 2022 Senior Notes pay interest semi-annually at a rate of 3.50% per annum and the 2042 Senior Notes pay semi-annual interest of 4.875% per annum. Using prevailing interest rates on similar instruments, the estimated fair value of the 2022 and 2042 senior notes was $1,530 and $1,028, respectively, at December 31, 2012. The foregoing fair value estimates were prepared with the assistance of an independent third party and may or may not reflect the actual trading value of this debt.
Ahafo Project Facility
Newmont Ghana Gold Limited (“NGGL”) has an $85 project financing agreement with the International Finance Corporation (“IFC”) ($75) and a commercial lender ($10). NGGL borrowed $75 from the IFC in December 2008 and borrowed the remaining $10 in February 2009. Amounts borrowed are guaranteed by Newmont. Semi-annual payments through April 2017 are required. Borrowings bear interest of LIBOR plus 3.5%.
Debt Covenants
The Company's senior notes and revolving credit facilities contain various covenants and default provisions including payment defaults, limitation on liens, leases, sales and leaseback agreements and merger restrictions.
The Ahafo project facility contains a financial ratio covenant requiring the Company to maintain a net debt (total debt net of cash and cash equivalents) to EBITDA (earnings before interest expense, income and mining taxes, depreciation and amortization) ratio of less than or equal to 4.0 and a net debt to total capitalization ratio of less than or equal to 62.5%.
The corporate revolving credit facility contains a financial ratio covenant requiring the Company to maintain a net debt (total debt net of cash and cash equivalents) to total capitalization ratio of less than or equal to 62.5% in addition to the covenants noted above. Furthermore, the corporate revolving credit facility contains covenants limiting the sale of all or substantially all of the Company's assets, certain change of control provisions and a negative pledge on certain assets.
The PTNNT revolving credit facility requires PTNNT to maintain certain financial ratios and to comply with certain terms and conditions with regards to its mine plan, contract of work, dividends, financing activities, leasing, investments and other matters.
At December 31, 2012 and 2011, the Company and its related entities were in compliance with all debt covenants and provisions related to potential defaults.
|
NOTE ##OthLiabNote OTHER LIABILITIES | ||||||||
At December 31, | ||||||||
2012 | 2011 | |||||||
Other current liabilities: | ||||||||
Refinery metal payable | $ | 1,183 | $ | 796 | ||||
Accrued operating costs | 336 | 231 | ||||||
Accrued capital expenditures | 172 | 248 | ||||||
Reclamation and remediation liabilities | 82 | 71 | ||||||
Interest | 74 | 55 | ||||||
Deferred income tax | 63 | 50 | ||||||
Royalties | 42 | 53 | ||||||
Boddington contingent consideration | 26 | 24 | ||||||
Holt property royalty | 21 | 17 | ||||||
Taxes other than income and mining | 14 | 93 | ||||||
Derivative instruments | 1 | 408 | ||||||
Other | 68 | 87 | ||||||
$ | 2,082 | $ | 2,133 | |||||
Other long-term liabilities: | ||||||||
Holt property royalty | $ | 219 | $ | 159 | ||||
Income and mining taxes | 65 | 88 | ||||||
Power supply agreements | 46 | 45 | ||||||
Boddington contingent consideration | 15 | 30 | ||||||
Derivative instruments | 2 | 6 | ||||||
Other | 25 | 36 | ||||||
$ | 372 | $ | 364 |
|
NOTE ##AOCINote ACCUMULATED OTHER COMPREHENSIVE INCOME | ||||||||
At December 31, | ||||||||
2012 | 2011 | |||||||
Unrealized gain on marketable securities, net of $185 and $159 tax expense, respectively | $ | 542 | $ | 707 | ||||
Foreign currency translation adjustments | 177 | 163 | ||||||
Pension liability adjustments, net of $147 and $125 tax benefit, respectively | (272) | (231) | ||||||
Other post-retirement benefit adjustments, net of $4 and ($4) tax benefit (expense), respectively | (4) | 6 | ||||||
Changes in fair value of cash flow hedge instruments, net of $35 and $71 tax benefit, respectively | 47 | 7 | ||||||
$ | 490 | $ | 652 |
|
NOTE 26 NET CHANGE IN OPERATING ASSETS AND LIABILITIES
Net cash provided from operations attributable to the net change in operating assets and liabilities is composed of the following:
Years Ended December 31, | |||||||||||
2012 | 2011 | 2010 | |||||||||
Decrease (increase) in operating assets: | |||||||||||
Trade and accounts receivable | $ | 19 | $ | 52 | $ | (153) | |||||
Inventories, stockpiles and ore on leach pads | (729) | (495) | (501) | ||||||||
EGR refinery assets | (346) | (266) | 116 | ||||||||
Other assets | (80) | (51) | (87) | ||||||||
Increase (decrease) in operating liabilities: | |||||||||||
Accounts payable and other accrued liabilities | (210) | 226 | 38 | ||||||||
EGR refinery liabilities | 346 | 266 | (116) | ||||||||
Reclamation liabilities | (73) | (43) | (51) | ||||||||
$ | (1,073) | $ | (311) | $ | (754) |
|
NOTE ##SuppCFNote SUPPLEMENTAL CASH FLOW INFORMATION | ||||||||||
Years Ended December 31, | ||||||||||
2012 | 2011 | 2010 | ||||||||
Income and mining taxes, net of refunds | $ | 1,261 | $ | 1,526 | $ | 1,185 | ||||
Pension plan and other benefits and contributions | $ | 50 | $ | 29 | $ | 163 | ||||
Interest, net of amounts capitalized | $ | 177 | $ | 179 | $ | 212 |
Noncash Investing Activities and Financing Activities
Noncash Investing Activities and Financing Activities
Newmont sold non-core assets in exchange for 23 million shares of Regis Resources which resulted in non-cash increases to Investments of $129 in 2012. Newmont sold a royalty interest in exchange for 4 million shares of Regis Resources which resulted in non-cash increases to Investments of $12 in 2011.
|
NOTE 28 OPERATING LEASE COMMITMENTS
The Company leases certain assets, such as equipment and facilities, under operating leases expiring at various dates through 2020. Future minimum annual lease payments are $10 in 2013, $10 in 2014, $10 in 2015, $10 in 2016, $8 in 2017 and $21 thereafter, totaling $69. Rent expense for 2012, 2011 and 2010 was $72, $75 and $52, respectively.
|
NOTE 29 CONDENSED CONSOLIDATING FINANCIAL STATEMENTS
The following Condensed Consolidating Financial Statements are presented to satisfy disclosure requirements of Rule 3-10(e) of Regulation S-X resulting from the inclusion of Newmont USA Limited (“Newmont USA”), a wholly-owned subsidiary of Newmont, as a co-registrant with Newmont on debt securities issued under a shelf registration statement on Form S-3 filed under the Securities Act of 1933 under which securities of Newmont (including debt securities guaranteed by Newmont USA) may be issued (the “Shelf Registration Statement”). In accordance with Rule 3-10(e) of Regulation S-X, Newmont USA, as the subsidiary guarantor, is 100% owned by Newmont, the guarantees are full and unconditional, and no other subsidiary of Newmont guaranteed any security issued under the Shelf Registration Statement. There are no restrictions on the ability of Newmont or Newmont USA to obtain funds from its subsidiaries by dividend or loan.
At December 31, 2012, errors were identified in the previously reported condensed consolidating financial statements resulting from incorrectly applying the provisions of Rule 3-10(e) of Regulation S-X related to the presentation of the financial information of its subsidiary guarantor, Newmont USA. In the previously reported information, the Company presented Newmont USA on a consolidated basis with its non-guarantor subsidiaries and under Rule 3-10 of Regulation S-X Newmont USA should have presented its investment in subsidiaries based upon its proportionate share of its non-guarantor subsidiaries' net assets (similar to the equity method of accounting). In addition, the Company corrected the Newmont Mining Corporation column for investments in subsidiaries previously presented in the Eliminations column. The tables following the revised condensed consolidating financial statements illustrate the effects of the errors, which relate to the columns for Newmont Mining Corporation, Newmont USA, Other Subsidiaries and Eliminations, on previously reported condensed consolidating financial information as of December 31, 2011 and for the years ended December 31, 2011 and 2010.
The errors to the Newmont USA column for the incorrect presentation resulted in no change in previously reported line items for net income attributable to Newmont stockholders' equity. It did however have a significant impact on the previously reported cash balance, and cash flow from operations, investing and financing activities of Newmont USA as a result of the deconsolidation of its subsidiaries and the one line proportionate accounting pick up. Further, the Other Subsidiaries column changed by corresponding adjustments and to give effect to intercompany balances to include the non-guarantor subsidiaries of Newmont USA and the Eliminations column changes as a result of the above changes. In addition, the Company corrected an error in the Newmont Mining Corporation column related to stockholders' equity and investment in subsidiaries. This was a result of a gain associated with a partial sale of a subsidiary that was previously included in the Eliminations column. The cash flow statement in the Newmont Mining Corporation column was revised to reflect earnings from subsidiaries, net of dividends received.
The Company concluded these errors were not material individually or in the aggregate to any of the previously issued financial statements taken as a whole. These errors had no impact on the consolidated financial statements of Newmont or any debt covenants and had no impact on the ability of Newmont's subsidiaries to dividend cash to Newmont. The impact of these corrections to the applicable prior year periods is reflected in the revised financial information and notes below.
The Company will revise the March 31, 2012, June 30, 2012 and September 30, 2012 financial statements to reflect the revisions discussed above in the Quarterly Reports on Form 10-Q for the quarterly periods in 2013.
For the Year Ended December 31, 2012 | |||||||||||||||||
Newmont | |||||||||||||||||
Newmont | Mining | ||||||||||||||||
Mining | Newmont | Other | Corporation | ||||||||||||||
Condensed Consolidating Statement of Income and Comprehensive Income | Corporation | USA | Subsidiaries | Eliminations | Consolidated | ||||||||||||
Sales | $ | - | $ | 2,375 | $ | 7,493 | $ | - | $ | 9,868 | |||||||
Costs and expenses | |||||||||||||||||
Costs applicable to sales (1) | - | 967 | 3,271 | - | 4,238 | ||||||||||||
Amortization | - | 171 | 861 | - | 1,032 | ||||||||||||
Reclamation and remediation | - | 6 | 90 | - | 96 | ||||||||||||
Exploration | - | 71 | 285 | - | 356 | ||||||||||||
Advanced projects, research and development | - | 43 | 305 | - | 348 | ||||||||||||
General and administrative | - | 122 | 90 | - | 212 | ||||||||||||
Write-down of property, plant and mine | |||||||||||||||||
development | - | - | 52 | - | 52 | ||||||||||||
Other expense, net | - | 45 | 404 | - | 449 | ||||||||||||
- | 1,425 | 5,358 | - | 6,783 | |||||||||||||
Other income (expense) | |||||||||||||||||
Other income, net | 2 | 25 | 251 | - | 278 | ||||||||||||
Interest income - intercompany | 174 | 29 | (8) | (195) | - | ||||||||||||
Interest expense - intercompany | (15) | - | (180) | 195 | - | ||||||||||||
Interest expense, net | (245) | (6) | 2 | - | (249) | ||||||||||||
(84) | 48 | 65 | - | 29 | |||||||||||||
Income before income and mining tax and other items | (84) | 998 | 2,200 | - | 3,114 | ||||||||||||
Income and mining tax expense | 29 | (268) | (630) | - | (869) | ||||||||||||
Equity income (loss) of affiliates | 1,864 | 616 | 229 | (2,760) | (51) | ||||||||||||
Income from continuing operations | 1,809 | 1,346 | 1,799 | (2,760) | 2,194 | ||||||||||||
Loss from discontinued operations | - | - | (76) | - | (76) | ||||||||||||
Net income | 1,809 | 1,346 | 1,723 | (2,760) | 2,118 | ||||||||||||
Net income attributable to noncontrolling interests | - | - | (443) | 134 | (309) | ||||||||||||
Net income attributable to Newmont stockholders | $ | 1,809 | $ | 1,346 | $ | 1,280 | $ | (2,626) | $ | 1,809 | |||||||
Comprehensive income | $ | 1,647 | $ | 1,269 | $ | 1,553 | $ | (2,512) | $ | 1,957 | |||||||
Comprehensive income attributable to noncontrolling interests | - | - | (444) | 134 | (310) | ||||||||||||
Comprehensive income attributable to Newmont stockholders | $ | 1,647 | $ | 1,269 | $ | 1,109 | $ | (2,378) | $ | 1,647 |
(1) Excludes Amortization and Reclamation and remediation.
For the Year Ended December 31, 2011 | |||||||||||||||||
Newmont | |||||||||||||||||
Newmont | Mining | ||||||||||||||||
Mining | Newmont | Other | Corporation | ||||||||||||||
Condensed Consolidating Statement of Income and Comprehensive Income | Corporation | USA | Subsidiaries | Eliminations | Consolidated | ||||||||||||
Sales | $ | - | $ | 2,142 | $ | 8,216 | $ | - | $ | 10,358 | |||||||
Costs and expenses | |||||||||||||||||
Costs applicable to sales (1) | - | 972 | 2,918 | - | 3,890 | ||||||||||||
Amortization | - | 184 | 853 | (1) | 1,036 | ||||||||||||
Reclamation and remediation | - | 15 | 105 | - | 120 | ||||||||||||
Exploration | - | 89 | 261 | - | 350 | ||||||||||||
Advanced projects, research and development | - | 44 | 330 | (1) | 373 | ||||||||||||
General and administrative | - | 89 | 109 | - | 198 | ||||||||||||
Write-down of property, plant and mine | |||||||||||||||||
development | - | 2 | 2,082 | - | 2,084 | ||||||||||||
Other expense, net | - | 39 | 224 | 2 | 265 | ||||||||||||
- | 1,434 | 6,882 | - | 8,316 | |||||||||||||
Other income (expense) | |||||||||||||||||
Other income, net | (166) | 14 | 164 | - | 12 | ||||||||||||
Interest income - intercompany | 152 | 25 | (2) | (175) | - | ||||||||||||
Interest expense - intercompany | (19) | - | (156) | 175 | - | ||||||||||||
Interest expense, net | (232) | (8) | (4) | - | (244) | ||||||||||||
(265) | 31 | 2 | - | (232) | |||||||||||||
Income before income and mining tax and other items | (265) | 739 | 1,336 | - | 1,810 | ||||||||||||
Income and mining tax expense | 199 | (196) | (716) | - | (713) | ||||||||||||
Equity income (loss) of affiliates | 432 | 664 | 285 | (1,370) | 11 | ||||||||||||
Income from continuing operations | 366 | 1,207 | 905 | (1,370) | 1,108 | ||||||||||||
Loss from discontinued operations | - | - | (136) | - | (136) | ||||||||||||
Net income | 366 | 1,207 | 769 | (1,370) | 972 | ||||||||||||
Net income attributable to noncontrolling interests | - | - | (718) | 112 | (606) | ||||||||||||
Net income attributable to Newmont stockholders | $ | 366 | $ | 1,207 | $ | 51 | $ | (1,258) | $ | 366 | |||||||
Comprehensive income | $ | (90) | $ | 1,093 | $ | 706 | $ | (1,193) | $ | 516 | |||||||
Comprehensive income attributable to noncontrolling interests | - | - | (718) | 112 | (606) | ||||||||||||
Comprehensive income attributable to Newmont stockholders | $ | (90) | $ | 1,093 | $ | (12) | $ | (1,081) | $ | (90) |
(1) Excludes Amortization and Reclamation and remediation.
For the Year Ended December 31, 2010 | |||||||||||||||||
Newmont | |||||||||||||||||
Newmont | Mining | ||||||||||||||||
Mining | Newmont | Other | Corporation | ||||||||||||||
Condensed Consolidating Statement of Income and Comprehensive Income | Corporation | USA | Subsidiaries | Eliminations | Consolidated | ||||||||||||
Sales | $ | - | $ | 1,650 | $ | 7,890 | $ | - | $ | 9,540 | |||||||
Costs and expenses | |||||||||||||||||
Costs applicable to sales (1) | - | 962 | 2,522 | - | 3,484 | ||||||||||||
Amortization | - | 193 | 753 | (1) | 945 | ||||||||||||
Reclamation and remediation | - | 13 | 52 | - | 65 | ||||||||||||
Exploration | - | 77 | 141 | - | 218 | ||||||||||||
Advanced projects, research and development | - | 32 | 185 | (1) | 216 | ||||||||||||
General and administrative | - | 6 | 172 | - | 178 | ||||||||||||
Write-down of property, plant and mine | |||||||||||||||||
development | - | 4 | 2 | - | 6 | ||||||||||||
Other expense, net | - | 33 | 226 | 2 | 261 | ||||||||||||
- | 1,320 | 4,053 | - | 5,373 | |||||||||||||
Other income (expense) | |||||||||||||||||
Other income, net | - | 2 | 107 | - | 109 | ||||||||||||
Interest income - intercompany | 161 | 23 | (11) | (173) | - | ||||||||||||
Interest expense - intercompany | (11) | - | (162) | 173 | - | ||||||||||||
Interest expense, net | (250) | (19) | (10) | - | (279) | ||||||||||||
(100) | 6 | (76) | - | (170) | |||||||||||||
Income before income and mining tax and other items | (100) | 336 | 3,761 | - | 3,997 | ||||||||||||
Income and mining tax expense | 479 | (64) | (1,271) | - | (856) | ||||||||||||
Equity income (loss) of affiliates | 1,926 | 776 | 282 | (2,981) | 3 | ||||||||||||
Income from continuing operations | 2,305 | 1,048 | 2,772 | (2,981) | 3,144 | ||||||||||||
Loss from discontinued operations | (28) | - | (28) | 28 | (28) | ||||||||||||
Net income | 2,277 | 1,048 | 2,744 | (2,953) | 3,116 | ||||||||||||
Net income attributable to noncontrolling interests | - | - | (992) | 153 | (839) | ||||||||||||
Net income attributable to Newmont stockholders | $ | 2,277 | $ | 1,048 | $ | 1,752 | $ | (2,800) | $ | 2,277 | |||||||
Comprehensive income | $ | 2,759 | $ | 1,098 | $ | 3,124 | $ | (3,381) | $ | 3,600 | |||||||
Comprehensive income attributable to noncontrolling interests | - | - | (994) | 153 | (841) | ||||||||||||
Comprehensive income attributable to Newmont stockholders | $ | 2,759 | $ | 1,098 | $ | 2,130 | $ | (3,228) | $ | 2,759 |
(1) Excludes Amortization and Reclamation and remediation.
For the Year Ended December 31, 2012 | ||||||||||||||||||
Newmont | ||||||||||||||||||
Newmont | Mining | |||||||||||||||||
Mining | Newmont | Other | Corporation | |||||||||||||||
Condensed Consolidating Statement of Cash Flows | Corporation | USA | Subsidiaries | Eliminations | Consolidated | |||||||||||||
Operating activities: | ||||||||||||||||||
Net income | $ | 1,809 | $ | 1,346 | $ | 1,723 | $ | (2,760) | $ | 2,118 | ||||||||
Adjustments | (1,797) | (338) | 732 | 2,746 | 1,343 | |||||||||||||
Net change in operating assets and liabilities | 142 | (245) | (970) | - | (1,073) | |||||||||||||
Net cash provided from (used in) continuing operations | 154 | 763 | 1,485 | (14) | 2,388 | |||||||||||||
Net cash used in discontinued operations | - | - | (16) | - | (16) | |||||||||||||
Net cash provided from (used in) operations | 154 | 763 | 1,469 | (14) | 2,372 | |||||||||||||
Investing activities: | ||||||||||||||||||
Additions to property, plant and mine development | - | (541) | (2,669) | - | (3,210) | |||||||||||||
Acquisitions, net | - | - | (25) | - | (25) | |||||||||||||
Sale of marketable securities | - | - | 210 | - | 210 | |||||||||||||
Purchases of marketable securities | - | - | (220) | - | (220) | |||||||||||||
Proceeds from sale of other assets | - | - | 41 | - | 41 | |||||||||||||
Other | - | - | (60) | - | (60) | |||||||||||||
Net cash used in investing activities | - | (541) | (2,723) | - | (3,264) | |||||||||||||
Financing activities: | ||||||||||||||||||
Proceeds from debt, net | 3,345 | - | 179 | - | 3,524 | |||||||||||||
Repayment of debt | (1,802) | (164) | (10) | - | (1,976) | |||||||||||||
Payment of conversion premium on debt | (172) | - | - | - | (172) | |||||||||||||
Net intercompany borrowings (repayments) | (854) | 274 | 580 | - | - | |||||||||||||
Proceeds from stock issuance, net | 24 | - | - | - | 24 | |||||||||||||
Acquisition of noncontrolling interests | - | - | (10) | - | (10) | |||||||||||||
Dividends paid to noncontrolling interests | - | - | (3) | - | (3) | |||||||||||||
Dividends paid to common stockholders | (695) | - | (14) | 14 | (695) | |||||||||||||
Other | - | - | (3) | - | (3) | |||||||||||||
Net cash provided from (used in) financing activities | (154) | 110 | 719 | 14 | 689 | |||||||||||||
Effect of exchange rate changes on cash | - | - | 4 | - | 4 | |||||||||||||
Net change in cash and cash equivalents | - | 332 | (531) | - | (199) | |||||||||||||
Cash and cash equivalents at beginning of period | - | 10 | 1,750 | - | 1,760 | |||||||||||||
Cash and cash equivalents at end of period | $ | - | $ | 342 | $ | 1,219 | $ | - | $ | 1,561 |
For the Year Ended December 31, 2011 | ||||||||||||||||||
Newmont | ||||||||||||||||||
Newmont | Mining | |||||||||||||||||
Mining | Newmont | Other | Corporation | |||||||||||||||
Condensed Consolidating Statement of Cash Flows | Corporation | USA | Subsidiaries | Eliminations | Consolidated | |||||||||||||
Operating activities: | ||||||||||||||||||
Net income (loss) | $ | 366 | $ | 1,207 | $ | 769 | $ | (1,370) | $ | 972 | ||||||||
Adjustments | (301) | (319) | 2,252 | 1,298 | 2,930 | |||||||||||||
Net change in operating assets and liabilities | (102) | 14 | (223) | - | (311) | |||||||||||||
Net cash provided from (used in) continuing operations | (37) | 902 | 2,798 | (72) | 3,591 | |||||||||||||
Net cash used in discontinued operations | - | - | (7) | - | (7) | |||||||||||||
Net cash provided from (used in) operations | (37) | 902 | 2,791 | (72) | 3,584 | |||||||||||||
Investing activities: | ||||||||||||||||||
Additions to property, plant and mine development | - | (425) | (2,362) | - | (2,787) | |||||||||||||
Acquisitions, net | - | - | (2,309) | - | (2,309) | |||||||||||||
Sale of marketable securities | - | - | 81 | - | 81 | |||||||||||||
Purchases of marketable securities | - | - | (21) | - | (21) | |||||||||||||
Proceeds from sale of other assets | - | - | 9 | - | 9 | |||||||||||||
Advance to affiliate | - | (2,525) | - | 2,525 | - | |||||||||||||
Other | - | - | (40) | - | (40) | |||||||||||||
Net cash used in investing activities | - | (2,950) | (4,642) | 2,525 | (5,067) | |||||||||||||
Financing activities: | ||||||||||||||||||
Proceeds from debt, net | 2,034 | - | (23) | - | 2,011 | |||||||||||||
Repayment of debt | (2,008) | (253) | (12) | - | (2,273) | |||||||||||||
Net intercompany borrowings (repayments) | 465 | - | 2,094 | (2,559) | - | |||||||||||||
Proceeds from stock issuance, net | 40 | - | - | - | 40 | |||||||||||||
Dividends paid to noncontrolling interests | - | - | (151) | 34 | (117) | |||||||||||||
Dividends paid to common stockholders | (494) | - | (72) | 72 | (494) | |||||||||||||
Other | - | - | (21) | - | (21) | |||||||||||||
Net cash provided from (used in) financing activities | 37 | (253) | 1,815 | (2,453) | (854) | |||||||||||||
Effect of exchange rate changes on cash | - | - | 41 | - | 41 | |||||||||||||
Net change in cash and cash equivalents | - | (2,301) | 5 | - | (2,296) | |||||||||||||
Cash and cash equivalents at beginning of period | - | 2,311 | 1,745 | - | 4,056 | |||||||||||||
Cash and cash equivalents at end of period | $ | - | $ | 10 | $ | 1,750 | $ | - | $ | 1,760 |
For the Year Ended December 31, 2010 | ||||||||||||||||||
Newmont | ||||||||||||||||||
Newmont | Mining | |||||||||||||||||
Mining | Newmont | Other | Corporation | |||||||||||||||
Condensed Consolidating Statement of Cash Flows | Corporation | USA | Subsidiaries | Eliminations | Consolidated | |||||||||||||
Operating activities: | ||||||||||||||||||
Net income (loss) | $ | 2,277 | $ | 1,048 | $ | 2,744 | $ | (2,953) | $ | 3,116 | ||||||||
Adjustments | (2,526) | (434) | 829 | 2,949 | 818 | |||||||||||||
Net change in operating assets and liabilities | (57) | 96 | (793) | - | (754) | |||||||||||||
Net cash provided from (used in) continuing operations | (306) | 710 | 2,780 | (4) | 3,180 | |||||||||||||
Net cash used in discontinued operations | - | - | (13) | - | (13) | |||||||||||||
Net cash provided from (used in) operations | (306) | 710 | 2,767 | (4) | 3,167 | |||||||||||||
Investing activities: | ||||||||||||||||||
Additions to property, plant and mine development | - | (254) | (1,148) | - | (1,402) | |||||||||||||
Acquisitions, net | - | - | (4) | - | (4) | |||||||||||||
Sale of marketable securities | - | - | 3 | - | 3 | |||||||||||||
Purchases of marketable securities | - | - | (28) | - | (28) | |||||||||||||
Proceeds from sale of other assets | - | 1 | 55 | - | 56 | |||||||||||||
Other | - | - | (44) | - | (44) | |||||||||||||
Net cash used in investing activities | - | (253) | (1,166) | - | (1,419) | |||||||||||||
Financing activities: | ||||||||||||||||||
Repayment of debt | - | (24) | (406) | - | (430) | |||||||||||||
Net intercompany borrowings (repayments) | 484 | 52 | (372) | (164) | - | |||||||||||||
Proceeds from stock issuance, net | 60 | - | - | - | 60 | |||||||||||||
Sale of noncontrolling interests | - | - | 229 | - | 229 | |||||||||||||
Acquisition of noncontrolling interests | - | - | (110) | - | (110) | |||||||||||||
Dividends paid to noncontrolling interests | - | - | (598) | 136 | (462) | |||||||||||||
Dividends paid to common stockholders | (246) | - | (32) | 32 | (246) | |||||||||||||
Other | - | (1) | 45 | - | 44 | |||||||||||||
Net cash provided from (used in) financing activities | 298 | 27 | (1,244) | 4 | (915) | |||||||||||||
Effect of exchange rate changes on cash | - | - | 8 | - | 8 | |||||||||||||
Net change in cash and cash equivalents | (8) | 484 | 365 | - | 841 | |||||||||||||
Cash and cash equivalents at beginning of period | 8 | 1,827 | 1,380 | - | 3,215 | |||||||||||||
Cash and cash equivalents at end of period | $ | - | $ | 2,311 | $ | 1,745 | $ | - | $ | 4,056 |
At December 31, 2012 | |||||||||||||||||
Newmont | |||||||||||||||||
Newmont | Mining | ||||||||||||||||
Mining | Newmont | Other | Corporation | ||||||||||||||
Condensed Consolidating Balance Sheet | Corporation | USA | Subsidiaries | Eliminations | Consolidated | ||||||||||||
Assets | |||||||||||||||||
Cash and cash equivalents | $ | - | $ | 342 | $ | 1,219 | $ | - | $ | 1,561 | |||||||
Trade receivables | - | 23 | 260 | - | 283 | ||||||||||||
Accounts receivable | 20 | 10 | 547 | - | 577 | ||||||||||||
Intercompany receivable | 2,748 | 7,052 | 5,857 | (15,657) | - | ||||||||||||
Investments | 58 | 7 | 21 | - | 86 | ||||||||||||
Inventories | - | 104 | 692 | - | 796 | ||||||||||||
Stockpiles and ore on leach pads | - | 215 | 571 | - | 786 | ||||||||||||
Deferred income tax assets | - | 109 | 153 | (67) | 195 | ||||||||||||
Other current assets | - | 46 | 1,615 | - | 1,661 | ||||||||||||
Current assets | 2,826 | 7,908 | 10,935 | (15,724) | 5,945 | ||||||||||||
Property, plant and mine development, net | - | 2,187 | 15,860 | (37) | 18,010 | ||||||||||||
Investments | - | 6 | 1,440 | - | 1,446 | ||||||||||||
Investments in subsidiaries | 16,599 | 6,041 | 3,115 | (25,755) | - | ||||||||||||
Stockpiles and ore on leach pads | - | 401 | 2,495 | - | 2,896 | ||||||||||||
Deferred income tax assets | 791 | 146 | 685 | (1,141) | 481 | ||||||||||||
Long-term intercompany receivable | 3,907 | 45 | 564 | (4,516) | - | ||||||||||||
Other long-term assets | 52 | 158 | 662 | - | 872 | ||||||||||||
Total assets | $ | 24,175 | $ | 16,892 | $ | 35,756 | $ | (47,173) | $ | 29,650 | |||||||
Liabilities | |||||||||||||||||
Debt | $ | - | $ | - | $ | 10 | $ | - | $ | 10 | |||||||
Accounts payable | - | 78 | 579 | - | 657 | ||||||||||||
Intercompany payable | 3,969 | 5,743 | 5,945 | (15,657) | - | ||||||||||||
Employee-related benefits | - | 149 | 190 | - | 339 | ||||||||||||
Income and mining taxes | - | 16 | 35 | - | 51 | ||||||||||||
Other current liabilities | 71 | 147 | 1,866 | - | 2,084 | ||||||||||||
Current liabilities | 4,040 | 6,133 | 8,625 | (15,657) | 3,141 | ||||||||||||
Debt | 6,069 | 1 | 218 | - | 6,288 | ||||||||||||
Reclamation and remediation liabilities | - | 147 | 1,310 | - | 1,457 | ||||||||||||
Deferred income tax liabilities | - | 20 | 2,044 | (1,206) | 858 | ||||||||||||
Employee-related benefits | 5 | 384 | 197 | - | 586 | ||||||||||||
Long-term intercompany payable | 381 | - | 4,172 | (4,553) | - | ||||||||||||
Other long-term liabilities | - | 11 | 361 | - | 372 | ||||||||||||
Total liabilities | 10,495 | 6,696 | 16,927 | (21,416) | 12,702 | ||||||||||||
Equity | |||||||||||||||||
Newmont stockholders’ equity | 13,680 | 10,196 | 13,782 | (23,885) | 13,773 | ||||||||||||
Noncontrolling interests | - | - | 5,047 | (1,872) | 3,175 | ||||||||||||
Total equity | 13,680 | 10,196 | 18,829 | (25,757) | 16,948 | ||||||||||||
Total liabilities and equity | $ | 24,175 | $ | 16,892 | $ | 35,756 | $ | (47,173) | $ | 29,650 | |||||||
At December 31, 2011 | |||||||||||||||||
Newmont | |||||||||||||||||
Newmont | Mining | ||||||||||||||||
Mining | Newmont | Other | Corporation | ||||||||||||||
Condensed Consolidating Balance Sheet | Corporation | USA | Subsidiaries | Eliminations | Consolidated | ||||||||||||
Assets | |||||||||||||||||
Cash and cash equivalents | $ | - | $ | 10 | $ | 1,750 | $ | - | $ | 1,760 | |||||||
Trade receivables | - | 28 | 272 | - | 300 | ||||||||||||
Accounts receivable | - | - | 320 | - | 320 | ||||||||||||
Intercompany receivable | 1,415 | 5,903 | 4,617 | (11,935) | - | ||||||||||||
Investments | 72 | - | 22 | - | 94 | ||||||||||||
Inventories | - | 117 | 597 | - | 714 | ||||||||||||
Stockpiles and ore on leach pads | - | 187 | 484 | - | 671 | ||||||||||||
Deferred income tax assets | 134 | 111 | 151 | - | 396 | ||||||||||||
Other current assets | - | 29 | 1,104 | - | 1,133 | ||||||||||||
Current assets | 1,621 | 6,385 | 9,317 | (11,935) | 5,388 | ||||||||||||
Property, plant and mine development, net | - | 1,858 | 14,049 | (26) | 15,881 | ||||||||||||
Investments | - | 14 | 1,458 | - | 1,472 | ||||||||||||
Investments in subsidiaries | 14,863 | 5,662 | 2,838 | (23,363) | - | ||||||||||||
Stockpiles and ore on leach pads | - | 307 | 1,964 | - | 2,271 | ||||||||||||
Deferred income tax assets | 708 | 212 | 685 | (1,363) | 242 | ||||||||||||
Long-term intercompany receivable | 3,388 | 73 | 745 | (4,206) | - | ||||||||||||
Other long-term assets | 35 | 112 | 710 | - | 857 | ||||||||||||
Total assets | $ | 20,615 | $ | 14,623 | $ | 31,766 | $ | (40,893) | $ | 26,111 | |||||||
Liabilities | |||||||||||||||||
Debt | $ | 514 | $ | 165 | $ | 10 | $ | - | $ | 689 | |||||||
Accounts payable | - | 83 | 478 | - | 561 | ||||||||||||
Intercompany payable | 2,698 | 4,695 | 4,542 | (11,935) | - | ||||||||||||
Employee-related benefits | - | 137 | 170 | - | 307 | ||||||||||||
Income and mining taxes | - | 10 | 240 | - | 250 | ||||||||||||
Other current liabilities | 450 | 159 | 1,524 | - | 2,133 | ||||||||||||
Current liabilities | 3,662 | 5,249 | 6,964 | (11,935) | 3,940 | ||||||||||||
Debt | 3,578 | 1 | 45 | - | 3,624 | ||||||||||||
Reclamation and remediation liabilities | - | 127 | 1,042 | - | 1,169 | ||||||||||||
Deferred income tax liabilities | - | 21 | 2,126 | (1,363) | 784 | ||||||||||||
Employee-related benefits | 5 | 291 | 163 | - | 459 | ||||||||||||
Long-term intercompany | 567 | - | 3,639 | (4,206) | - | ||||||||||||
Other long-term liabilities | - | 18 | 372 | (26) | 364 | ||||||||||||
Total liabilities | 7,812 | 5,707 | 14,351 | (17,530) | 10,340 | ||||||||||||
Equity | |||||||||||||||||
Newmont stockholders’ equity | 12,803 | 8,916 | 12,781 | (21,604) | 12,896 | ||||||||||||
Noncontrolling interests | - | - | 4,634 | (1,759) | 2,875 | ||||||||||||
Total equity | 12,803 | 8,916 | 17,415 | (23,363) | 15,771 | ||||||||||||
Total liabilities and equity | $ | 20,615 | $ | 14,623 | $ | 31,766 | $ | (40,893) | $ | 26,111 | |||||||
For the Year Ended December 31, 2011 | ||||||||||||||||||||||||||||
Newmont USA | Other Subsidiaries | Eliminations | ||||||||||||||||||||||||||
Condensed Consolidating Statement of Income | As Previously Presented | Change | As Currently Presented | As Previously Presented | Change | As Currently Presented | As Previously Presented | Change | As Currently Presented | |||||||||||||||||||
Sales | $ | 6,610 | $ | (4,468) | $ | 2,142 | $ | 3,748 | $ | 4,468 | $ | 8,216 | $ | - | $ | - | $ | - | ||||||||||
Costs and expenses | ||||||||||||||||||||||||||||
Costs applicable to sales | 2,358 | (1,386) | 972 | 1,570 | 1,348 | 2,918 | (38) | 38 | - | |||||||||||||||||||
Amortization | 651 | (467) | 184 | 386 | 467 | 853 | (1) | - | (1) | |||||||||||||||||||
Reclamation and remediation | 69 | (54) | 15 | 51 | 54 | 105 | - | - | - | |||||||||||||||||||
Exploration | 180 | (91) | 89 | 170 | 91 | 261 | - | - | - | |||||||||||||||||||
Advanced projects, research and development | 183 | (139) | 44 | 191 | 139 | 330 | (1) | - | (1) | |||||||||||||||||||
General and administrative | 156 | (67) | 89 | 2 | 107 | 109 | 40 | (40) | - | |||||||||||||||||||
Write-down of property, plant and mine | ||||||||||||||||||||||||||||
development | 4 | (2) | 2 | 2,080 | 2 | 2,082 | - | - | - | |||||||||||||||||||
Other expense, net | 166 | (127) | 39 | 99 | 125 | 224 | - | 2 | 2 | |||||||||||||||||||
3,767 | (2,333) | 1,434 | 4,549 | 2,333 | 6,882 | - | - | - | ||||||||||||||||||||
Other income (expense) | ||||||||||||||||||||||||||||
Other income, net | 115 | (101) | 14 | 76 | 88 | 164 | - | - | - | |||||||||||||||||||
Interest income - intercompany | 7 | 18 | 25 | 16 | (18) | (2) | (175) | - | (175) | |||||||||||||||||||
Interest expense - intercompany | - | - | - | (156) | - | (156) | 175 | - | 175 | |||||||||||||||||||
Interest expense, net | (16) | 8 | (8) | (9) | 5 | (4) | - | - | - | |||||||||||||||||||
106 | (75) | 31 | (73) | 75 | 2 | - | - | - | ||||||||||||||||||||
Income before income and mining tax and other items | 2,949 | (2,210) | 739 | (874) | 2,210 | 1,336 | - | - | - | |||||||||||||||||||
Income and mining tax expense | (1,033) | 837 | (196) | 121 | (837) | (716) | - | - | - | |||||||||||||||||||
Equity income (loss) of affiliates | (19) | 683 | 664 | 283 | 2 | 285 | (685) | (685) | (1,370) | |||||||||||||||||||
Income from continuing operations | 1,897 | (690) | 1,207 | (470) | 1,375 | 905 | (685) | (685) | (1,370) | |||||||||||||||||||
Loss from discontinued operations | 7 | (7) | - | (143) | 7 | (136) | - | - | - | |||||||||||||||||||
Net income | $ | 1,904 | $ | (697) | $ | 1,207 | $ | (613) | $ | 1,382 | $ | 769 | $ | (685) | $ | (685) | $ | (1,370) | ||||||||||
Net income attributable to noncontrolling interests | $ | (697) | $ | 697 | $ | - | $ | (21) | $ | (697) | $ | (718) | $ | 112 | $ | - | $ | 112 | ||||||||||
Net income attributable to Newmont stockholders | $ | 1,207 | $ | - | $ | 1,207 | $ | (634) | $ | 685 | $ | 51 | $ | (573) | $ | (685) | $ | (1,258) |
For the Year Ended December 31, 2010 | ||||||||||||||||||||||||||||
Newmont USA | Other Subsidiaries | Eliminations | ||||||||||||||||||||||||||
Condensed Consolidating Statement of Income | As Previously Presented | Change | As Revised | As Previously Presented | Change | As Revised | As Previously Presented | Change | As Revised | |||||||||||||||||||
Sales | $ | 6,568 | $ | (4,918) | $ | 1,650 | $ | 2,972 | $ | 4,918 | $ | 7,890 | $ | - | $ | - | $ | - | ||||||||||
Costs and expenses | ||||||||||||||||||||||||||||
Costs applicable to sales | 2,171 | (1,209) | 962 | 1,341 | 1,181 | 2,522 | (28) | 28 | - | |||||||||||||||||||
Amortization | 601 | (408) | 193 | 345 | 408 | 753 | (1) | - | (1) | |||||||||||||||||||
Reclamation and remediation | 48 | (35) | 13 | 17 | 35 | 52 | - | - | - | |||||||||||||||||||
Exploration | 131 | (54) | 77 | 87 | 54 | 141 | - | - | - | |||||||||||||||||||
Advanced projects, research and development | 110 | (78) | 32 | 107 | 78 | 185 | (1) | - | (1) | |||||||||||||||||||
General and administrative | 144 | (138) | 6 | 4 | 168 | 172 | 30 | (30) | - | |||||||||||||||||||
Write-down of property, plant and mine | ||||||||||||||||||||||||||||
development | 5 | (1) | 4 | 1 | 1 | 2 | - | - | - | |||||||||||||||||||
Other expense, net | 183 | (150) | 33 | 78 | 148 | 226 | - | 2 | 2 | |||||||||||||||||||
3,393 | (2,073) | 1,320 | 1,980 | 2,073 | 4,053 | - | - | - | ||||||||||||||||||||
Other income (expense) | ||||||||||||||||||||||||||||
Other income, net | 29 | (27) | 2 | 84 | 23 | 107 | - | - | - | |||||||||||||||||||
Interest income - intercompany | 7 | 16 | 23 | 5 | (16) | (11) | (173) | - | (173) | |||||||||||||||||||
Interest expense - intercompany | - | - | - | (162) | - | (162) | 173 | - | 173 | |||||||||||||||||||
Interest expense, net | (27) | 8 | (19) | (6) | (4) | (10) | - | - | - | |||||||||||||||||||
9 | (3) | 6 | (79) | 3 | (76) | - | - | - | ||||||||||||||||||||
Income before income and mining tax and other items | 3,184 | (2,848) | 336 | 913 | 2,848 | 3,761 | - | - | - | |||||||||||||||||||
Income and mining tax expense | (1,114) | 1,050 | (64) | (221) | (1,050) | (1,271) | - | - | - | |||||||||||||||||||
Equity income (loss) of affiliates | 2 | 774 | 776 | 281 | 1 | 282 | (2,206) | (775) | (2,981) | |||||||||||||||||||
Income from continuing operations | 2,072 | (1,024) | 1,048 | 973 | 1,799 | 2,772 | (2,206) | (775) | (2,981) | |||||||||||||||||||
Loss from discontinued operations | 2 | (2) | - | (30) | 2 | (28) | 28 | - | 28 | |||||||||||||||||||
Net income | $ | 2,074 | $ | (1,026) | $ | 1,048 | $ | 943 | $ | 1,801 | $ | 2,744 | $ | (2,178) | $ | (775) | $ | (2,953) | ||||||||||
Net income attributable to noncontrolling interests | $ | (1,026) | $ | 1,026 | $ | - | $ | 34 | $ | (1,026) | $ | (992) | $ | 153 | $ | - | $ | 153 | ||||||||||
Net income attributable to Newmont stockholders | $ | 1,048 | $ | - | $ | 1,048 | $ | 977 | $ | 775 | $ | 1,752 | $ | (2,025) | $ | (775) | $ | (2,800) |
At December 31, 2011 | |||||||||||||||||||||||||||||||||||||||
Newmont Mining Corporation | Newmont USA | Other Subsidiaries | Eliminations | ||||||||||||||||||||||||||||||||||||
Condensed Consolidating Statement of Cash Flows | As Previously Presented | Change | As Revised | As Previously Presented | Change | As Revised | As Previously Presented | Change | As Revised | As Previously Presented | Change | As Revised | |||||||||||||||||||||||||||
Operating activities: | |||||||||||||||||||||||||||||||||||||||
Net income (loss) | $ | 366 | $ | - | $ | 366 | $ | 1,904 | $ | (697) | $ | 1,207 | $ | (613) | $ | 1,382 | $ | 769 | $ | (685) | $ | (685) | $ | (1,370) | |||||||||||||||
Adjustments | 131 | (432) | (301) | 624 | (943) | (319) | 1,490 | 762 | 2,252 | 685 | 613 | 1,298 | |||||||||||||||||||||||||||
Net change in operating assets and liabilities | (102) | - | (102) | (18) | 32 | 14 | (191) | (32) | (223) | - | - | - | |||||||||||||||||||||||||||
Net cash provided from (used in) continuing operations | 395 | (432) | (37) | 2,510 | (1,608) | 902 | 686 | 2,112 | 2,798 | - | (72) | (72) | |||||||||||||||||||||||||||
Net cash used in discontinued operations | - | - | - | - | - | - | (7) | - | (7) | - | - | - | |||||||||||||||||||||||||||
Net cash provided from (used in) operations | 395 | (432) | (37) | 2,510 | (1,608) | 902 | 679 | 2,112 | 2,791 | - | (72) | (72) | |||||||||||||||||||||||||||
Investing activities: | |||||||||||||||||||||||||||||||||||||||
Additions to property, plant and mine development | - | - | - | (1,853) | 1,428 | (425) | (934) | (1,428) | (2,362) | - | - | - | |||||||||||||||||||||||||||
Acquisitions, net | - | - | - | - | - | - | (2,309) | - | (2,309) | - | - | - | |||||||||||||||||||||||||||
Sale of marketable securities | - | - | - | 65 | (65) | - | 16 | 65 | 81 | - | - | - | |||||||||||||||||||||||||||
Purchases of marketable securities | - | - | - | (3) | 3 | - | (18) | (3) | (21) | - | - | - | |||||||||||||||||||||||||||
Proceeds from sale of other assets | - | - | - | (55) | 55 | - | 64 | (55) | 9 | - | - | - | |||||||||||||||||||||||||||
Advance to affiliate | - | - | - | - | (2,525) | (2,525) | - | - | - | - | 2,525 | 2,525 | |||||||||||||||||||||||||||
Other | - | - | - | - | - | - | (40) | - | (40) | - | - | - | |||||||||||||||||||||||||||
Net cash used in investing activities | - | - | - | (1,846) | (1,104) | (2,950) | (3,221) | (1,421) | (4,642) | - | 2,525 | 2,525 | |||||||||||||||||||||||||||
Financing activities: | |||||||||||||||||||||||||||||||||||||||
Net borrowings (repayments) | 26 | - | 26 | (278) | 25 | (253) | (10) | (25) | (35) | - | - | - | |||||||||||||||||||||||||||
Net intercompany borrowings (repayments) | 33 | 432 | 465 | (2,559) | 2,559 | - | 2,560 | (466) | 2,094 | (34) | (2,525) | (2,559) | |||||||||||||||||||||||||||
Proceeds from stock issuance, net | 40 | - | 40 | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Dividends paid to noncontrolling interests | - | - | - | (151) | 151 | - | - | (151) | (151) | 34 | - | 34 | |||||||||||||||||||||||||||
Dividends paid to common stockholders | (494) | - | (494) | - | - | - | - | (72) | (72) | - | 72 | 72 | |||||||||||||||||||||||||||
Other | - | - | - | (24) | 24 | - | 3 | (24) | (21) | - | - | - | |||||||||||||||||||||||||||
Net cash provided from (used in) financing activities | (395) | 432 | 37 | (3,012) | 2,759 | (253) | 2,553 | (738) | 1,815 | - | (2,453) | (2,453) | |||||||||||||||||||||||||||
Effect of exchange rate changes on cash | - | - | - | (3) | 3 | - | 44 | (3) | 41 | - | - | - | |||||||||||||||||||||||||||
Net change in cash and cash equivalents | - | - | - | (2,351) | 50 | (2,301) | 55 | (50) | 5 | - | - | - | |||||||||||||||||||||||||||
Cash and cash equivalents at beginning of period | - | - | - | 3,877 | (1,566) | 2,311 | 179 | 1,566 | 1,745 | - | - | - | |||||||||||||||||||||||||||
Cash and cash equivalents at end of period | $ | - | $ | - | $ | - | $ | 1,526 | $ | (1,516) | $ | 10 | $ | 234 | $ | 1,516 | $ | 1,750 | $ | - | $ | - | $ | - |
At December 31, 2010 | |||||||||||||||||||||||||||||||||||||||
Newmont Mining Corporation | Newmont USA | Other Subsidiaries | Eliminations | ||||||||||||||||||||||||||||||||||||
Condensed Consolidating Statement of Cash Flows | As Previously Presented | Change | As Revised | As Previously Presented | Change | As Revised | As Previously Presented | Change | As Revised | As Previously Presented | Change | As Revised | |||||||||||||||||||||||||||
Operating activities: | |||||||||||||||||||||||||||||||||||||||
Net income (loss) | $ | 2,277 | $ | - | $ | 2,277 | $ | 2,074 | $ | (1,026) | $ | 1,048 | $ | 943 | $ | 1,801 | $ | 2,744 | $ | (2,178) | $ | (775) | $ | (2,953) | |||||||||||||||
Adjustments | (600) | (1,926) | (2,526) | 865 | (1,299) | (434) | (1,625) | 2,454 | 829 | 2,178 | 771 | 2,949 | |||||||||||||||||||||||||||
Net change in operating assets and liabilities | (57) | - | (57) | (512) | 608 | 96 | (185) | (608) | (793) | - | - | - | |||||||||||||||||||||||||||
Net cash provided from (used in) continuing operations | 1,620 | (1,926) | (306) | 2,427 | (1,717) | 710 | (867) | 3,647 | 2,780 | - | (4) | (4) | |||||||||||||||||||||||||||
Net cash used in discontinued operations | - | - | - | (13) | 13 | - | - | (13) | (13) | - | - | - | |||||||||||||||||||||||||||
Net cash provided from (used in) operations | 1,620 | (1,926) | (306) | 2,414 | (1,704) | 710 | (867) | 3,634 | 2,767 | - | (4) | (4) | |||||||||||||||||||||||||||
Investing activities: | |||||||||||||||||||||||||||||||||||||||
Additions to property, plant and mine development | - | - | - | (721) | 467 | (254) | (681) | (467) | (1,148) | - | - | - | |||||||||||||||||||||||||||
Acquisitions, net | - | - | - | - | - | - | (4) | - | (4) | - | - | - | |||||||||||||||||||||||||||
Sale of marketable securities | - | - | - | - | - | - | 3 | - | 3 | - | - | - | |||||||||||||||||||||||||||
Purchases of marketable securities | - | - | - | (5) | 5 | - | (23) | (5) | (28) | - | - | - | |||||||||||||||||||||||||||
Proceeds from sale of other assets | - | - | - | 16 | (15) | 1 | 40 | 15 | 55 | - | - | - | |||||||||||||||||||||||||||
Other | - | - | - | - | - | - | (44) | - | (44) | - | - | - | |||||||||||||||||||||||||||
Net cash used in investing activities | - | - | - | (710) | 457 | (253) | (709) | (457) | (1,166) | - | - | - | |||||||||||||||||||||||||||
Financing activities: | |||||||||||||||||||||||||||||||||||||||
Net borrowings (repayments) | - | - | - | (420) | 396 | (24) | (10) | (396) | (406) | - | - | - | |||||||||||||||||||||||||||
Net intercompany borrowings (repayments) | (1,442) | 1,926 | 484 | (152) | 204 | 52 | 1,730 | (2,102) | (372) | (136) | (28) | (164) | |||||||||||||||||||||||||||
Proceeds from stock issuance, net | 60 | - | 60 | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Sale of noncontrolling interests | - | - | - | 229 | (229) | - | - | 229 | 229 | - | - | - | |||||||||||||||||||||||||||
Acquisition of noncontrolling interests | - | - | - | - | - | - | (110) | - | (110) | - | - | - | |||||||||||||||||||||||||||
Dividends paid to noncontrolling interests | - | - | - | (598) | 598 | - | - | (598) | (598) | 136 | - | 136 | |||||||||||||||||||||||||||
Dividends paid to common stockholders | (246) | - | (246) | - | - | - | - | (32) | (32) | - | 32 | 32 | |||||||||||||||||||||||||||
Other | - | - | - | 46 | (47) | (1) | (2) | 47 | 45 | - | - | - | |||||||||||||||||||||||||||
Net cash provided from (used in) financing activities | (1,628) | 1,926 | 298 | (895) | 922 | 27 | 1,608 | (2,852) | (1,244) | - | 4 | 4 | |||||||||||||||||||||||||||
Effect of exchange rate changes on cash | - | - | - | 1 | (1) | - | 7 | 1 | 8 | - | - | - | |||||||||||||||||||||||||||
Net change in cash and cash equivalents | (8) | - | (8) | 810 | (326) | 484 | 39 | 326 | 365 | - | - | - | |||||||||||||||||||||||||||
Cash and cash equivalents at beginning of period | 8 | - | 8 | 3,067 | (1,240) | 1,827 | 140 | 1,240 | 1,380 | - | - | - | |||||||||||||||||||||||||||
Cash and cash equivalents at end of period | $ | - | $ | - | $ | - | $ | 3,877 | $ | (1,566) | $ | 2,311 | $ | 179 | $ | 1,566 | $ | 1,745 | $ | - | $ | - | $ | - |
At December 31, 2011 | |||||||||||||||||||||||||||||||||||||
Newmont Mining Corporation | Newmont USA | Other Subsidiaries | Eliminations | ||||||||||||||||||||||||||||||||||
Condensed Consolidating Balance Sheet | As Previously Presented | Change | As Revised | As Previously Presented | Change | As Revised | As Previously Presented | Change | As Revised | As Previously Presented | Change | As Revised | |||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | - | $ | - | $ | - | $ | 1,526 | $ | (1,516) | $ | 10 | $ | 234 | $ | 1,516 | $ | 1,750 | $ | - | $ | - | $ | - | |||||||||||||
Trade receivables | - | - | - | 205 | (177) | 28 | 95 | 177 | 272 | - | - | - | |||||||||||||||||||||||||
Accounts receivable | 1,415 | - | 1,415 | 3,447 | 2,456 | 5,903 | 264 | 4,673 | 4,937 | (4,806) | (7,129) | (11,935) | |||||||||||||||||||||||||
Investments | 72 | - | 72 | - | - | - | 22 | - | 22 | - | - | - | |||||||||||||||||||||||||
Inventories | - | - | - | 333 | (216) | 117 | 381 | 216 | 597 | - | - | - | |||||||||||||||||||||||||
Stockpiles and ore on leach pads | - | - | - | 532 | (345) | 187 | 139 | 345 | 484 | - | - | - | |||||||||||||||||||||||||
Deferred income tax assets | 134 | - | 134 | 257 | (146) | 111 | 5 | 146 | 151 | - | - | - | |||||||||||||||||||||||||
Other current assets | - | - | - | 91 | (62) | 29 | 1,042 | 62 | 1,104 | - | - | - | |||||||||||||||||||||||||
Current assets | 1,621 | - | 1,621 | 6,391 | (6) | 6,385 | 2,182 | 7,135 | 9,317 | (4,806) | (7,129) | (11,935) | |||||||||||||||||||||||||
Property, plant and mine development, net | - | - | - | 6,917 | (5,059) | 1,858 | 8,990 | 5,059 | 14,049 | (26) | - | (26) | |||||||||||||||||||||||||
Investments | - | - | - | 29 | (15) | 14 | 1,443 | 15 | 1,458 | - | - | - | |||||||||||||||||||||||||
Investments in subsidiaries | 14,675 | 188 | 14,863 | 43 | 5,619 | 5,662 | 2,825 | 13 | 2,838 | (17,543) | (5,820) | (23,363) | |||||||||||||||||||||||||
Stockpiles and ore on leach pads | - | - | - | 1,641 | (1,334) | 307 | 630 | 1,334 | 1,964 | - | - | - | |||||||||||||||||||||||||
Deferred income tax assets (1) | 708 | - | 708 | 838 | (626) | 212 | 59 | 626 | 685 | - | (1,363) | (1,363) | |||||||||||||||||||||||||
Other long-term assets | 3,423 | - | 3,423 | 641 | (456) | 185 | 927 | 528 | 1,455 | (4,134) | (72) | (4,206) | |||||||||||||||||||||||||
Total assets | $ | 20,427 | $ | 188 | $ | 20,615 | $ | 16,500 | $ | (1,877) | $ | 14,623 | $ | 17,056 | $ | 14,710 | $ | 31,766 | $ | (26,509) | $ | (14,384) | $ | (40,893) | |||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||||||
Debt | $ | 514 | $ | - | $ | 514 | $ | 165 | $ | - | $ | 165 | $ | 10 | $ | - | $ | 10 | $ | - | $ | - | $ | - | |||||||||||||
Accounts payable | 2,698 | - | 2,698 | 1,327 | 3,451 | 4,778 | 1,343 | 3,677 | 5,020 | (4,807) | (7,128) | (11,935) | |||||||||||||||||||||||||
Employee-related benefits | - | - | - | 222 | (85) | 137 | 85 | 85 | 170 | - | - | - | |||||||||||||||||||||||||
Income and mining taxes | - | - | - | 45 | (35) | 10 | 205 | 35 | 240 | - | - | - | |||||||||||||||||||||||||
Other current liabilities | 450 | - | 450 | 459 | (300) | 159 | 3,186 | (1,662) | 1,524 | (1,962) | 1,962 | - | |||||||||||||||||||||||||
Current liabilities | 3,662 | - | 3,662 | 2,218 | 3,031 | 5,249 | 4,829 | 2,135 | 6,964 | (6,769) | (5,166) | (11,935) | |||||||||||||||||||||||||
Debt | 3,578 | - | 3,578 | 1 | - | 1 | 45 | - | 45 | - | - | - | |||||||||||||||||||||||||
Reclamation and remediation liabilities | - | - | - | 809 | (682) | 127 | 360 | 682 | 1,042 | - | - | - | |||||||||||||||||||||||||
Deferred income tax liabilities (1) | - | - | - | 732 | (711) | 21 | 1,415 | 711 | 2,126 | - | (1,363) | (1,363) | |||||||||||||||||||||||||
Employee-related benefits | 5 | - | 5 | 355 | (64) | 291 | 99 | 64 | 163 | - | - | - | |||||||||||||||||||||||||
Other long-term liabilities | 567 | - | 567 | 61 | (43) | 18 | 3,895 | 116 | 4,011 | (4,159) | (73) | (4,232) | |||||||||||||||||||||||||
Total liabilities | 7,812 | - | 7,812 | 4,176 | 1,531 | 5,707 | 10,643 | 3,708 | 14,351 | (10,928) | (6,602) | (17,530) | |||||||||||||||||||||||||
Equity | |||||||||||||||||||||||||||||||||||||
Newmont stockholders’ equity | 12,615 | 188 | 12,803 | 8,916 | - | 8,916 | 5,187 | 7,594 | 12,781 | (13,822) | (7,782) | (21,604) | |||||||||||||||||||||||||
Noncontrolling interests | - | - | - | 3,408 | (3,408) | - | 1,226 | 3,408 | 4,634 | (1,759) | - | (1,759) | |||||||||||||||||||||||||
Total equity | 12,615 | 188 | 12,803 | 12,324 | (3,408) | 8,916 | 6,413 | 11,002 | 17,415 | (15,581) | (7,782) | (23,363) | |||||||||||||||||||||||||
Total liabilities and stockholders' equity | $ | 20,427 | $ | 188 | $ | 20,615 | $ | 16,500 | $ | (1,877) | $ | 14,623 | $ | 17,056 | $ | 14,710 | $ | 31,766 | $ | (26,509) | $ | (14,384) | $ | (40,893) | |||||||||||||
(1) | Revision of deferred income taxes includes a presentation adjustment to conform to the guidance outlined in ASC 740, see Note 8 Income and Mining taxes for additional information. |
(1) Excludes Amortization and Reclamation and remediation.
|
NOTE 30 COMMITMENTS AND CONTINGENCIES
General
The Company follows ASC guidance in determining its accruals and disclosures with respect to loss contingencies. Accordingly, estimated losses from loss contingencies are accrued by a charge to income when information available prior to issuance of the financial statements indicates that it is probable that a liability could be incurred and the amount of the loss can be reasonably estimated. Legal expenses associated with the contingency are expensed as incurred. If a loss contingency is not probable or reasonably estimable, disclosure of the loss contingency is made in the financial statements when it is at least reasonably possible that a material loss could be incurred.
Operating Segments
The Company's operating segments are identified in Note 3. Except as noted in this paragraph, all of the Company's commitments and contingencies specifically described in this Note 30 relate to the Corporate and Other reportable segment. The PT Newmont Minahasa Raya and PTNNT matters relate to the Asia Pacific reportable segment. The Yanacocha matters relate to the South America reportable segment.
Environmental Matters
The Company's mining and exploration activities are subject to various laws and regulations governing the protection of the environment. These laws and regulations are continually changing and are generally becoming more restrictive. The Company conducts its operations so as to protect the public health and environment and believes its operations are in compliance with applicable laws and regulations in all material respects. The Company has made, and expects to make in the future, expenditures to comply with such laws and regulations, but cannot predict the full amount of such future expenditures.
Estimated future reclamation costs are based principally on legal and regulatory requirements. At December 31, 2012 and 2011, $1,341 and $1,070, respectively, were accrued for reclamation costs relating to currently producing mineral properties in accordance with asset retirement obligation guidance. The current portions of $62 and $47 at December 31, 2012 and 2011, respectively, are included in Other current liabilities.
In addition, the Company is involved in several matters concerning environmental obligations associated with former mining activities. Generally, these matters concern developing and implementing remediation plans at the various sites involved. The Company believes that the related environmental obligations associated with these sites are similar in nature with respect to the development of remediation plans, their risk profile and the compliance required to meet general environmental standards. Based upon the Company's best estimate of its liability for these matters, $198 and $170 were accrued for such obligations at December 31, 2012 and 2011, respectively. These amounts are included in Other current liabilities and Reclamation and remediation liabilities. Depending upon the ultimate resolution of these matters, the Company believes that it is reasonably possible that the liability for these matters could be as much as 114% greater or 5% lower than the amount accrued at December 31, 2012. The amounts accrued for these matters are reviewed periodically based upon facts and circumstances available at the time. Changes in estimates are recorded in Reclamation and remediation in the period estimates are revised.
Details about certain of the more significant matters involved are discussed below.
Newmont Mining Corporation
Empire Mine. On July 19, 2012, the California Department of Parks and Recreation (“Parks”) served Newmont, New Verde Mines LLC, Newmont North America Exploration Limited, Newmont Realty Company and Newmont USA Limited with a complaint for damages and declaratory relief under CERCLA, specifically for costs associated with water treatment at the Empire Mine State Park and for a declaration that Newmont is liable for past and future response costs, as well as indemnification to Parks. In 1975 Parks purchased the Empire Mine site in Grass Valley, California from Newmont to create a historic state park featuring the mining of the Empire Mine. Parks has operated the Empire Mine Site for over 35 years. Newmont intends to vigorously defend this lawsuit. Newmont cannot reasonably predict the outcome of this matter.
Newmont USA Limited - 100% Newmont Owned
Ross-Adams Mine Site. By letter dated June 5, 2007, the U.S. Forest Service notified Newmont that it had expended approximately $0.3 in response costs to address environmental conditions at the Ross-Adams mine in Prince of Wales, Alaska, and requested Newmont USA Limited pay those costs and perform an Engineering Evaluation/Cost Analysis (“EE/CA”) to assess what future response activities might need to be completed at the site. Newmont intends to vigorously defend any formal claims by the EPA. Newmont has agreed to perform the EE/CA. Newmont cannot reasonably predict the likelihood or outcome of any future action against it arising from this matter.
Hope Bay Mining Ltd. - 100% Newmont Owned
In July 2011 Environment Canada Enforcement Officers discovered a release of drill water containing calcium chloride on Hope Bay Mining Ltd. (“HBML”) property in Nunavut, Canada. Orbit Garant Drilling Inc. (“Orbit”) operated a diamond drill rig on the HBML property. On February 13, 2013, HBML received service of a summons and charges from a Judge for Nunavut alleging violation of the Fisheries Act relating to the release of drill water and alleged failure to report a discharge. Newmont cannot reasonably predict the outcome of this matter.
PT Newmont Minahasa Raya (“PTNMR”) - 80% Newmont Owned
On March 22, 2007, an Indonesian non-governmental organization named Wahana Lingkungan Hidup Indonesia (“WALHI”) filed a civil suit against PTNMR, the Newmont subsidiary that operated the Minahasa mine in Indonesia, and Indonesia's Ministry of Energy & Mineral Resources and Ministry of Environment, alleging pollution from the government-approved and permitted disposal of mill tailings into Buyat Bay, and seeking a court order requiring PTNMR to fund a 25-year monitoring program in relation to Buyat Bay. In December 2007, the court ruled in PTNMR's favor and found that WALHI's allegations of pollution in Buyat Bay were without merit. In March 2008, WALHI appealed this decision to the Indonesian High Court. On January 27, 2010, the Indonesian High Court upheld the December 2007 ruling in favor of PTNMR. On May 17, 2010, WALHI filed an appeal of the January 27, 2010 Indonesian High Court ruling seeking review from the Indonesian Supreme Court. In December 2012, the Supreme Court notified the parties that it issued its decision rejecting WALHI's appeal and ruling in favor of PTNMR. The decision is final and binding. Independent sampling and testing of Buyat Bay water and fish, as well as area residents, conducted by the World Health Organization and the Australian Commonwealth Scientific and Industrial Research Organization confirm that PTNMR has not polluted the Buyat Bay environment, and, therefore, has not adversely affected the fish in Buyat Bay or the health of nearby residents. Ongoing monitoring of seawater quality by an Independent Scientific Panel continues to confirm that PTNMR's operations have not adversely affected the environment. The Company remains steadfast that it has not caused pollution or health problems.
Other Legal Matters
Minera Yanacocha S.R.L. (“Yanacocha”) - 51.35% Newmont Owned
Choropampa. In June 2000, a transport contractor of Yanacocha spilled approximately 151 kilograms of elemental mercury near the town of Choropampa, Peru, which is located 53 miles (85 kilometers) southwest of the Yanacocha mine. Elemental mercury is not used in Yanacocha's operations but is a by-product of gold mining and was sold to a Lima firm for use in medical instruments and industrial applications. A comprehensive health and environmental remediation program was undertaken by Yanacocha in response to the incident. In August 2000, Yanacocha paid under protest a fine of 1,740,000 Peruvian soles (approximately $0.5) to the Peruvian government. Yanacocha has entered into settlement agreements with a number of individuals impacted by the incident. As compensation for the disruption and inconvenience caused by the incident, Yanacocha entered into agreements with and provided a variety of public works in the three communities impacted by this incident. Yanacocha cannot predict the likelihood of additional expenditures related to this matter.
Additional lawsuits relating to the Choropampa incident were filed against Yanacocha in the local courts of Cajamarca, Peru, in May 2002 by over 900 Peruvian citizens. A significant number of the plaintiffs in these lawsuits entered into settlement agreements with Yanacocha prior to filing such claims. In April 2008, the Peruvian Supreme Court upheld the validity of these settlement agreements, which the Company expects to result in the dismissal of all claims brought by previously settled plaintiffs. Yanacocha has also entered into settlement agreements with approximately 350 additional plaintiffs. The claims asserted by approximately 200 plaintiffs remain. In 2011, Yanacocha was served with 23 complaints alleging grounds to nullify the settlements entered into between Yanacocha and the plaintiffs. Yanacocha has answered the complaints and the court has dismissed several of the matters and the plaintiffs have filed appeals. All appeals were referred to the Civil Court of Cajamarca, which affirmed the decisions of the lower court judge. The plaintiffs have filed appeals of such orders before the Supreme Court. Yanacocha will continue to vigorously defend its position. Neither the Company nor Yanacocha can reasonably estimate the ultimate loss relating to such claims.
PT Newmont Nusa Tenggara (“PTNNT”) – 31.5% Newmont Owned
Under the Batu Hijau Contract of Work, beginning in 2006 and continuing through 2010, a portion of PTNNT's shares were required to be offered for sale, first, to the Indonesian government or, second, to Indonesian nationals, equal to the difference between the following percentages and the percentage of shares already owned by the Indonesian government or Indonesian nationals (if such number is positive): 23% by March 31, 2006; 30% by March 31, 2007; 37% by March 31, 2008; 44% by March 31, 2009; and 51% by March 31, 2010. As PT Pukuafu Indah (“PTPI”), an Indonesian national, owned a 20% interest in PTNNT at all relevant times, in 2006, a 3% interest was required to be offered for sale and, in each of 2007 through 2010, an additional 7% interest was required to be offered (for an aggregate 31% interest). The price at which such interests were offered for sale to the Indonesian parties was the fair market value of such interest considering PTNNT as a going concern, as agreed with the Indonesian government. Following certain disputes and an arbitration with the Indonesian government, in November and December 2009, sale agreements were concluded pursuant to which the 2006, 2007 and 2008 shares were sold to PT Multi Daerah Bersaing (“PTMDB”), the nominee of the local governments, and the 2009 shares were sold to PTMDB in February 2010, resulting in PTMDB owning a 24% interest in PTNNT.
On December 17, 2010, the Ministry of Energy & Mineral Resources, acting on behalf of the Indonesian government, accepted the offer to acquire the final 7% interest in PTNNT. Subsequently, the Indonesian government designated Pusat Investasi Pemerintah (“PIP”), an agency of the Ministry of Finance, as the entity that will buy the final stake. On May 6, 2011, PIP and the foreign shareholders entered into a definitive agreement for the sale and purchase of the final 7% divestiture stake, subject to receipt of approvals from certain Indonesian government ministries. Subsequent to signing the agreement, a disagreement arose between the Ministry of Finance and the Indonesian parliament in regard to whether parliamentary approval was needed to allow PIP to make the share purchase. In July 2012, the Constitutional Court ruled that parliament approval is required for PIP to use state funds to purchase the shares, which approval has not yet been obtained. Further disputes may arise in regard to the divestiture of the 2010 shares.
Effective January 1, 2011, the local government in the region where the Batu Hijau mine is located commenced the enforcement of local regulations that purport to require PTNNT to pay additional taxes based on revenue and the value of PTNNT's contracts. In addition, the regulations purport to require PTNNT to obtain certain export-related documents from the regional government for purposes of shipping copper concentrate. PTNNT is required to and has obtained all export related-documents in compliance with the laws and regulations of the central government. PTNNT believes that the new regional regulations are not enforceable as they expressly contradict higher level Indonesian laws that set out the permissible taxes that can be imposed by a regional government and all effective export requirements. PTNNT's position is supported by Indonesia's Ministry of Energy & Mineral Resources, Ministry of Trade, and the provincial government. To date, PTNNT has not been forced to comply with these new contradictory regional regulations. On February 4, 2011, PTNNT filed legal proceedings seeking to have the regulations declared null and void because they conflict with the laws of Indonesia. Subsequently, the Ministry of Home Affairs issued a decree declaring these local regulations to be contrary to Indonesian law and thus unenforceable. Further disputes with the local government could arise in relation to these regulations. PTNNT intends to vigorously defend its position in this dispute.
Additionally, in September 2011, WALHI brought an administrative law claim against Indonesia's Ministry of Environment to challenge the May 2011 renewal of PTNNT's submarine tailings permit. PTNNT and the regional government of KSB (“KSB”) filed separate applications for intervention into the proceedings, both of which were accepted by the Administrative Court. KSB intervened on the side of WALHI, and PTNNT joined on the side of the Ministry of Environment. On April 3, 2012, the Administrative Court ruled in favor of the Ministry of Environment and PTNNT, finding that the Ministry of Environment properly renewed the permit in accordance with Indonesian law and regulations. WALHI appealed the verdict. On October 2, 2012, the High Administrative Law Court rejected WALHI's appeal, after which WALHI filed a notice to appeal the case to the Supreme Court. PTNNT will continue to defend its submarine tailings permit and is confident that the Ministry of Environment acted properly in renewing PTNNT's permit.
Newmont Mining Corporation claim relating to PTNNT divestiture
Indonesian citizens apparently living in the province of Nusa Tenggara Barat filed a lawsuit against Indonesia's Ministry of Finance and other government officials (as defendants) and against PTNNT and the Company (as co-defendants). Plaintiffs claim that the purchase by the central government of the final 7% divestiture stake in PTNNT violates, or would violate, their human rights. PTNNT's alleged liability appears supposedly to arise from being a party involved in the process of divestiture, and the Company's from being a holding company of PTNNT. The allegations regarding alleged liability are vague and unclear. Plaintiffs seek various relief, including an order requiring the defendants and co-defendants to transfer the final 7% stake to the regional government of Nusa Tenggara Barat and a payment of approximately $247 in damages. After hearings on the matter, the Central Jakarta District Court dismissed the case on November 21, 2012. Plaintiffs did not submit an appeal within the required 14 day time period and therefore the decision of the District Court is final and binding.
PT Pukuafu Indah Litigation
In October 2009, PTPI filed a lawsuit in the Central Jakarta District Court against PTNNT and the Indonesian government seeking to cancel a March 2009 arbitration award pertaining to the manner in which divestiture of shares in PTNNT should proceed. On October 11, 2010, the District Court ruled in favor of PTNNT and the Indonesian government finding, among other things, that PTPI lacks standing to contest the validity of the arbitration award. PTPI filed an appeal to the High Court, which was rejected by the High Court on January 4, 2012. PTPI appealed the case to the Indonesian Supreme Court. In September 2012, PTNNT and PTPI settled this lawsuit and PTPI revoked the appeal.
Subsequent to its initial claim, PTPI filed numerous additional lawsuits, against Newmont Indonesia Limited (“NIL”) and Nusa Tenggara Mining Corporation (“NTMC”), a subsidiary of Sumitomo, in the South Jakarta District Court. Fundamentally, the cases all relate to PTPI's contention that it owns, or has rights to own, the shares in PTNNT that have been or will be divested to fulfill the requirements of the PTNNT Contract of Work and the March 2009 arbitration award. PTPI also makes various other allegations, including alleged rights in or to the Company's or NTMC's non-divestiture shares in PTNNT, and PTPI asserts claims for significant damages allegedly arising from NIL's and NTMC's unlawful acts in transferring the divestiture shares to a third party. On November 30, 2010, the South Jakarta District Court rendered a decision in favor of PTPI in one of the cases that included an order that NIL/NTMC transfer 31% of PTNNT shares to PTPI and pay PTPI $26 in damages and certain monetary penalties. On August 7, 2012, the appellate court overturned the decision by the South Jakarta District Court. On June 28, 2011, the South Jakarta District Court ruled in favor of NIL and NTMC in one of PTPI's lawsuits contending that PTPI has rights in or to NIL's and NTMC's non-divestiture shares. PTPI filed an appeal. In March 2012, the District Court dismissed PTPI's final two cases that were pending at the trial court level. PTPI filed appeals in both of these lawsuits.
In August 2010, NIL and NVL USA Limited (“NVL”) commenced an arbitration against PTPI in the Singapore International Arbitration Centre, as provided in relevant financing agreements, seeking declarations that PTPI has violated the release agreement by failing to dismiss its Indonesian lawsuits, that PTPI is in breach of the November 2009 loan facility and related agreements, and that NIL and NVL are entitled to damages arising from PTPI's and its shareholders' conduct.
On October 1, 2010, NIL and NVL requested, based upon the release agreement, that the arbitral tribunal issue an interim order requiring PTPI and its shareholders to discontinue the various Indonesian court proceedings and refrain from bringing additional lawsuits. On October 15, 2010, the tribunal issued an order granting NIL and NVL's request. The order of the tribunal restrains PTPI and its agents from “proceeding with or continuing with or assisting or participating in the prosecution of the Indonesian [s]uits” and from commencing additional proceedings relating to the same subject matter as the Indonesian lawsuits. NIL and NVL obtained an enforcement order in Singapore courts but PTPI and its shareholders have not abided by the court order. PTPI and its shareholders' proceedings in Singapore court to contest enforcement of the interim award were rejected by the court.
On April 7, 2011, the arbitral tribunal issued a final award, while keeping the proceedings open to allow NIL and NVL to seek further relief as necessary, finding PTPI and its shareholders in breach of various provisions of the financing agreements, including the release agreement. The tribunal, for the second time, ordered PTPI and its agents to restrain from proceeding with the Indonesian lawsuits or filing new lawsuits relating to the same subject matter. In addition, the tribunal ordered PTPI and other shareholder defendants, collectively, to pay more than $11 in damages, costs and expenses. NIL and NVL obtained an enforcement order in Singapore courts and PTPI's shareholders have partially complied with the order. PTPI and its shareholders did not fully comply with the court order as $10 in damages remains unpaid and the Indonesian lawsuits continued. NIL and NVL registered the final award in the Central Jakarta District Court to seek enforcement in Indonesia.
On October 22, 2012, the Company and PTPI entered into an agreement to resolve their differences under which PTPI committed to dismiss or discontinue all of its litigation within four months. PTPI fulfilled its commitment by effective withdrawal of all litigation against the relevant Newmont and Sumitomo parties, and NIL and NVL discontinued the Singapore arbitration and all related enforcement actions against PTPI.
NWG Investments Inc. v. Fronteer Gold Inc.
In April 2011, Newmont acquired Fronteer Gold Inc. (“Fronteer”).
Fronteer acquired NewWest Gold Corporation (“NewWest Gold”) in September 2007. At the time of that acquisition, NWG Investments Inc. (“NWG”) owned approximately 86% of NewWest Gold and an individual named Jacob Safra owned or controlled 100% of NWG. Prior to its acquisition of NewWest Gold, Fronteer entered into a June 2007 lock-up agreement with NWG providing that, among other things, NWG would support Fronteer's acquisition of NewWest Gold. At that time, Fronteer owned approximately 42% of Aurora Energy Resources Inc. (“Aurora”), which, among other things, had a uranium exploration project in Labrador, Canada.
NWG contends that, during the negotiations leading up to the lock-up agreement, Fronteer represented to NWG that Aurora would commence uranium mining in Labrador by 2013, that this was a firm date, that Fronteer was not aware of any obstacle to doing so, that Aurora faced no serious environmental issues in Labrador and that Aurora's competitors faced greater delays in commencing uranium mining. NWG further contends that it entered into the lock-up agreement and agreed to support Fronteer's acquisition of NewWest Gold in reliance upon these purported representations. On October 11, 2007, less than three weeks after the Fronteer-NewWest Gold transaction closed, a member of the Nunatsiavut Assembly introduced a motion calling for the adoption of a moratorium on uranium mining in Labrador. On April 8, 2008, the Nunatsiavut Assembly adopted a three-year moratorium on uranium mining in Labrador. NWG contends that Fronteer was aware during the negotiations of the NWG/Fronteer lock-up agreement that the Nunatsiavut Assembly planned on adopting this moratorium and that its adoption would preclude Aurora from commencing uranium mining by 2013, but Fronteer nonetheless fraudulently induced NWG to enter into the lock-up agreement.
On September 24, 2012, NWG served a summons and complaint on NMC. The complaint also names Fronteer Gold Inc and Mark O'Dea as defendants. The complaint seeks rescission of the merger between Fronteer and NewWest Gold and $750 in damages. Newmont intends to defend this matter, but cannot reasonably predict the outcome.
Other Commitments and Contingencies
Tax contingencies are provided for in accordance with ASC income tax guidance (see Note 8).
The Company has minimum royalty obligations on one of its producing mines in Nevada for the life of the mine. Amounts paid as a minimum royalty (where production royalties are less than the minimum obligation) in any year are recoverable in future years when the minimum royalty obligation is exceeded. Although the minimum royalty requirement may not be met in a particular year, the Company expects that over the mine life, gold production will be sufficient to meet the minimum royalty requirements. Minimum royalty payments payable are $60 in 2013, $38 in 2014 through 2017 and $317 thereafter.
As part of its ongoing business and operations, the Company and its affiliates are required to provide surety bonds, bank letters of credit and bank guarantees as financial support for various purposes, including environmental reclamation, exploration permitting, workers compensation programs and other general corporate purposes. At December 31, 2012 and December 31, 2011, there were $1,755 and $1,354, respectively, of outstanding letters of credit, surety bonds and bank guarantees. The surety bonds, letters of credit and bank guarantees reflect fair value as a condition of their underlying purpose and are subject to fees competitively determined in the market place. The obligations associated with these instruments are generally related to performance requirements that the Company addresses through its ongoing operations. As the specific requirements are met, the beneficiary of the associated instrument cancels and/or returns the instrument to the issuing entity. Certain of these instruments are associated with operating sites with long-lived assets and will remain outstanding until closure. Generally, bonding requirements associated with environmental regulation are becoming more restrictive. However, the Company believes it is in compliance with all applicable bonding obligations and will be able to satisfy future bonding requirements, through existing or alternative means, as they arise.
Newmont is from time to time involved in various legal proceedings related to its business. Except in the above-described proceedings, management does not believe that adverse decisions in any pending or threatened proceeding or that amounts that may be required to be paid by reason thereof will have a material adverse effect on the Company's financial condition or results of operations.
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NOTE ##SuppNote UNAUDITED SUPPLEMENTARY DATA | ||||||||||||||
Quarterly Data | ||||||||||||||
The following is a summary of selected quarterly financial information (unaudited): | ||||||||||||||
2012 | ||||||||||||||
Three Months Ended | ||||||||||||||
March 31 | June 30 | September 30 | December 31 | |||||||||||
Sales | $ | 2,683 | $ | 2,229 | $ | 2,480 | $ | 2,476 | ||||||
Gross profit(1) | $ | 1,419 | $ | 963 | $ | 1,103 | $ | 1,017 | ||||||
Income from continuing operations(2) | $ | 561 | $ | 279 | $ | 400 | $ | 645 | ||||||
Gain (loss) from discontinued operations(2) | (71) | - | (33) | 28 | ||||||||||
Net income (2) | $ | 490 | $ | 279 | $ | 367 | $ | 673 | ||||||
Income (loss) per common share | ||||||||||||||
Basic: | ||||||||||||||
Continuing operations | $ | 1.13 | $ | 0.56 | $ | 0.81 | $ | 1.30 | ||||||
Discontinued operations | (0.14) | - | (0.07) | 0.06 | ||||||||||
$ | 0.99 | $ | 0.56 | $ | 0.74 | $ | 1.36 | |||||||
Diluted: | ||||||||||||||
Continuing operations | $ | 1.11 | $ | 0.56 | $ | 0.81 | $ | 1.30 | ||||||
Discontinued operations | (0.14) | - | (0.07) | 0.06 | ||||||||||
$ | 0.97 | $ | 0.56 | $ | 0.74 | $ | 1.36 | |||||||
Weighted average common shares (millions) | ||||||||||||||
Basic | 495 | 496 | 496 | 497 | ||||||||||
Diluted | 504 | 498 | 499 | 499 | ||||||||||
Cash dividends declared per common share | $ | 0.35 | $ | 0.35 | $ | 0.35 | $ | 0.35 | ||||||
Closing price of common stock | $ | 51.27 | $ | 48.51 | $ | 56.02 | $ | 46.44 | ||||||
2011 | ||||||||||||||
Three Months Ended | ||||||||||||||
March 31 | June 30 | September 30 | December 31 | |||||||||||
Sales | $ | 2,465 | $ | 2,384 | $ | 2,744 | $ | 2,765 | ||||||
Gross profit(1) | $ | 1,255 | $ | 1,174 | $ | 1,460 | $ | 1,423 | ||||||
Income (loss) from continuing operations(2) | $ | 514 | $ | 523 | $ | 493 | $ | (1,028) | ||||||
Loss from discontinued operations(2) | - | (136) | - | - | ||||||||||
Net income (loss)(2) | $ | 514 | $ | 387 | $ | 493 | $ | (1,028) | ||||||
Income (loss) per common share | ||||||||||||||
Basic: | ||||||||||||||
Continuing operations | $ | 1.04 | $ | 1.06 | $ | 1.00 | $ | (2.08) | ||||||
Discontinued operations | - | (0.28) | - | - | ||||||||||
$ | 1.04 | $ | 0.78 | $ | 1.00 | $ | (2.08) | |||||||
Diluted: | ||||||||||||||
Continuing operations | $ | 1.03 | $ | 1.04 | $ | 0.98 | $ | (2.02) | ||||||
Discontinued operations | - | (0.27) | - | - | ||||||||||
$ | 1.03 | $ | 0.77 | $ | 0.98 | $ | (2.02) | |||||||
Weighted average common shares (millions) | ||||||||||||||
Basic | 493 | 494 | 494 | 495 | ||||||||||
Diluted | 501 | 501 | 504 | 510 | ||||||||||
Cash dividends declared per common share | $ | 0.15 | $ | 0.20 | $ | 0.30 | $ | 0.35 | ||||||
Closing price of common stock | $ | 54.58 | $ | 53.97 | $ | 62.95 | $ | 60.01 |
(1) Sales less Costs applicable to sales, Amortization and Reclamation and remediation.
(2) Attributable to Newmont stockholders.
Significant after-tax items were as follows:
Fourth quarter 2012: (i) a $59 ($0.12 per share, basic) income tax benefit from internal restructuring; (ii) a $40 ($0.08 per share, basic) gain on asset sales, net of loss related to impairment of other assets; (iii) a $28 ($0.06 per share, basic) gain from discontinued operations and (iv) a $6 ($0.01 per share, basic) loss related to restructuring and other;
Third quarter 2012: (i) a $33 ($0.07 per share, basic) loss from discontinued operations; (ii) a $20 ($0.04 per share, basic) loss related to restructuring and other and (iii) $6 ($0.01 per share, basic) loss related to impairment of assets, net of gain on asset sales;
Second quarter 2012: (i) a $7 ($0.01 per share, basic) loss related to impairment of assets, net of gain on asset sales;
First quarter 2012: (i) a $71 ($0.14 per share, basic) loss from discontinued operations and (ii) a $17 ($0.03 per share, basic) loss related to impairment of assets, net of gain on asset sales;
Fourth quarter 2011: (i) a $1,609 ($3.25 per share, basic) loss related to impairment of Hope Bay and (ii) a $5 ($0.01 per share, basic) gain on asset sales, net of loss related to impairment of other assets;
Third quarter 2011: (i) a $142 ($0.29 per share, basic) loss related to impairment of assets, net of gain on asset sales;
Second quarter 2011: (i) a $136 ($0.28 per share, basic) loss from discontinued operations; (ii) a $65 ($0.13 per share, basic) income tax benefit from internal restructuring; (iii) a $30 ($0.06 per share, basic) net gain on asset sales and (iv) a $17 ($0.02 per share, basic) loss related to Fronteer acquisition costs;
First quarter 2011: none.
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NOTE ##SubEventsNote SUBSEQUENT EVENTS
On February 15, 2012, the Company's 2012 Convertible Senior Notes matured, which resulted in a cash payment of approximately $640 related to principal, accrued interest and conversion premiums. The Company elected to pay the conversion premium with cash, and therefore no common shares were issued.
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SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | |||||||||||
Years Ended December 31, | |||||||||||
2012 | 2011 | 2010 | |||||||||
(in millions) | |||||||||||
Deferred Income Tax Valuation Allowance | |||||||||||
Balance at January 1 | $ | 977 | $ | 435 | $ | 437 | |||||
Additions to deferred income tax expense | 762 | 723 | 22 | ||||||||
Reduction of deferred income tax expense | (103) | (149) | (24) | ||||||||
Valuation release to equity | (10) | (32) | - | ||||||||
Balance at December 31 | $ | 1,626 | $ | 977 | $ | 435 | |||||
See also Note ##IncTaxNote to the Consolidated Financial Statements. | |||||||||||
SCH-1 |
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Use of Estimates
The Company's Consolidated Financial Statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”). The preparation of the Company's Consolidated Financial Statements requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and the related disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. The more significant areas requiring the use of management estimates and assumptions relate to mineral reserves that are the basis for future cash flow estimates utilized in impairment calculations and units-of-production amortization calculations; environmental, reclamation and closure obligations; estimates of recoverable gold and other minerals in stockpile and leach pad inventories; estimates of fair value for certain reporting units and asset impairments (including impairments of goodwill, long-lived assets and investments); write-downs of inventory, stockpiles and ore on leach pads to net realizable value; post-employment, post-retirement and other employee benefit liabilities; valuation allowances for deferred tax assets; reserves for contingencies and litigation; and the fair value and accounting treatment of financial instruments including marketable securities and derivative instruments. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Accordingly, actual results will differ from these amounts estimated in these financial statements.
Principles of Consolidation
The Consolidated Financial Statements include the accounts of Newmont Mining Corporation and more-than-50%-owned subsidiaries that it controls and entities over which control is achieved through means other than voting rights. The Company also includes its pro-rata share of assets, liabilities and operations for unincorporated joint ventures in which it has an interest. All significant intercompany balances and transactions have been eliminated. The functional currency for the majority of the Company's operations, including the Australian operations, is the U.S. dollar.
The Company follows FASB Accounting Standards Codification (“ASC”) guidance for identification and reporting of entities over which control is achieved through means other than voting rights. The guidance defines such entities as Variable Interest Entities (“VIEs”). The Company has identified VIEs in connection with our interests in PT Newmont Nusa Tenggara (“PTNNT” or “Batu Hijau”) due to certain funding arrangements and shareholder commitments. The Company has financing arrangements with PT Pukuafu Indah (“PTPI”) and PT Indonesia Masbaga Investama (“PTIMI”), unrelated noncontrolling shareholders of PTNNT, whereby the Company agreed to advance certain funds to them in exchange for (i) a pledge of their combined 20% share of PTNNT, (ii) an assignment of dividends payable on the shares, net of withholding tax, (iii) a commitment from them to support the application of our standards to the operation of Batu Hijau and (iv) as of September 16, 2011 in respect of PTPI only, powers of attorney to vote and sell PTNNT shares in support of the pledge, enforceable in an event of default as further security for the funding. The Company has determined itself to be the primary beneficiary of these entities, controls the operations of Batu Hijau and has the obligation to absorb losses and the right to receive benefits that are significant to PTNNT. Therefore, the Company consolidates PTNNT in its financial statements.
Cash and Cash Equivalents
Cash and cash equivalents consist of all cash balances and highly liquid investments with an original maturity of three months or less. Because of the short maturity of these investments, the carrying amounts approximate their fair value. Cash and cash equivalents are invested in United States Treasury securities and money market securities. Restricted cash is excluded from cash and cash equivalents and is included in other current and long-term assets.
Investments
Management determines the appropriate classification of its investments in equity securities at the time of purchase and reevaluates such determinations at each reporting date. Investments in incorporated entities in which the Company's ownership is greater than 20% and less than 50%, or which the Company does not control through majority ownership or means other than voting rights, are accounted for by the equity method and are included in long-term assets. The Company accounts for its marketable security investments as available for sale securities in accordance with ASC guidance on accounting for certain investments in debt and equity securities. The Company periodically evaluates whether declines in fair values of its investments below the Company's carrying value are other-than-temporary in accordance with ASC guidance. The Company's policy is to generally treat a decline in the investment's quoted market value that has lasted continuously for more than six months as an other-than-temporary decline in value. The Company also monitors its investments for events or changes in circumstances that have occurred that may have a significant adverse effect on the fair value of the investment and evaluates qualitative and quantitative factors regarding the severity and duration of the unrealized loss and the Company's ability to hold the investment until a forecasted recovery occurs to determine if the decline in value of an investment is other-than-temporary. Declines in fair value below the Company's carrying value deemed to be other-than-temporary are charged to earnings.
Stockpiles, Ore on Leach Pads and Inventories
As described below, costs that are incurred in or benefit the productive process are accumulated as stockpiles, ore on leach pads and inventories. Stockpiles, ore on leach pads and inventories are carried at the lower of average cost or net realizable value. Net realizable value represents the estimated future sales price of the product based on current and long-term metals prices, less the estimated costs to complete production and bring the product to sale. Write-downs of stockpiles, ore on leach pads and inventories to net realizable value are reported as a component of Costs applicable to sales. The current portion of stockpiles, ore on leach pads and inventories is determined based on the expected amounts to be processed within the next 12 months. Stockpiles, ore on leach pads and inventories not expected to be processed within the next 12 months are classified as long-term. The major classifications are as follows:
Stockpiles
Stockpiles represent ore that has been extracted from the mine and is available for further processing. Stockpiles are measured by estimating the number of tons added and removed from the stockpile, the number of contained ounces or pounds (based on assay data) and the estimated metallurgical recovery rates (based on the expected processing method). Stockpile ore tonnages are verified by periodic surveys. Costs are allocated to stockpiles based on current mining costs incurred including applicable overhead and amortization relating to mining operations, and removed at each stockpile's average cost per recoverable unit.
Ore on Leach Pads
The recovery of gold from certain gold oxide ores is achieved through the heap leaching process. Under this method, oxide ore is placed on leach pads where it is treated with a chemical solution, which dissolves the gold contained in the ore. The resulting gold-bearing solution is further processed in a plant where the gold is recovered. Costs are added to ore on leach pads based on current mining costs, including applicable amortization relating to mining operations. Costs are removed from ore on leach pads as ounces are recovered based on the average cost per estimated recoverable ounce of gold on the leach pad.
The estimates of recoverable gold on the leach pads are calculated from the quantities of ore placed on the leach pads (measured tons added to the leach pads), the grade of ore placed on the leach pads (based on assay data) and a recovery percentage (based on ore type). In general, leach pads recover between 50% and 95% of the recoverable ounces in the first year of leaching, declining each year thereafter until the leaching process is complete.
Although the quantities of recoverable gold placed on the leach pads are reconciled by comparing the grades of ore placed on pads to the quantities of gold actually recovered (metallurgical balancing), the nature of the leaching process inherently limits the ability to precisely monitor inventory levels. As a result, the metallurgical balancing process is constantly monitored and estimates are refined based on actual results over time. Historically, the Company's operating results have not been materially impacted by variations between the estimated and actual recoverable quantities of gold on its leach pads. Variations between actual and estimated quantities resulting from changes in assumptions and estimates that do not result in write-downs to net realizable value are accounted for on a prospective basis.
In-process Inventory
In-process inventories represent materials that are currently in the process of being converted to a saleable product. Conversion processes vary depending on the nature of the ore and the specific processing facility, but include mill in-circuit, flotation, leach and carbon-in-leach in circuits. In-process material is measured based on assays of the material fed into the process and the projected recoveries of the respective plants. In-process inventories are valued at the average cost of the material fed into the process attributable to the source material coming from the mines, stockpiles and/or leach pads plus the in-process conversion costs, including applicable amortization relating to the process facilities incurred to that point in the process.
Precious Metals Inventory
Precious metals inventories include gold doré and/or gold bullion. Precious metals that result from the Company's mining and processing activities are valued at the average cost of the respective in-process inventories incurred prior to the refining process, plus applicable refining costs.
Concentrate Inventory
Concentrate inventories represent copper and gold concentrate available for shipment or in transit for further processing when the sales process has not been completed. The Company values concentrate inventory at the average cost, including an allocable portion of support costs and amortization. Costs are added and removed to the concentrate inventory based on tons of concentrate and are valued at the lower of average cost or net realizable value.
Materials and Supplies
Materials and supplies are valued at the lower of average cost or net realizable value. Cost includes applicable taxes and freight.
Property, Plant and Mine Development
Facilities and equipment
Expenditures for new facilities or equipment and expenditures that extend the useful lives of existing facilities or equipment are capitalized and recorded at cost. The facilities and equipment are amortized using the straight-line method at rates sufficient to amortize such costs over the estimated productive lives of such facilities. These estimated productive lives do not exceed the related estimated mine lives, which are based on proven and probable reserves.
Mine Development
Mine development costs include engineering and metallurgical studies, drilling and other related costs to delineate an ore body, the removal of overburden to initially expose an ore body at open pit surface mines and the building of access ways, shafts, lateral access, drifts, ramps and other infrastructure at underground mines. Costs incurred before mineralization is classified as proven and probable reserves are expensed and classified as Exploration or Advanced projects, research and development expense. Capitalization of mine development project costs, that meet the definition of an asset, begins once mineralization is classified as proven and probable reserves.
Drilling and related costs are capitalized for an ore body where proven and probable reserves exist and the activities are directed at obtaining additional information on the ore body or converting mineralized material to proven and probable reserves. All other drilling and related costs are expensed as incurred. Drilling costs incurred during the production phase for operational ore control are allocated to inventory costs and then included as a component of Costs applicable to sales.
The cost of removing overburden and waste materials to access the ore body at an open-pit mine prior to the production phase are referred to as “pre-stripping costs.” Pre-stripping costs are capitalized during the development of an open-pit mine. Where multiple open pits exist at a mining complex utilizing common processing facilities, pre-stripping costs are capitalized at each pit. The removal, production, and sale of de minimis saleable materials may occur during development and are recorded as Other income, net of incremental mining and processing costs.
The production phase of an open-pit mine commences when saleable minerals, beyond a de minimis amount, are produced. Stripping costs incurred during the production phase of a mine are variable production costs that are included as a component of inventory to be recognized in Costs applicable to sales in the same period as the revenue from the sale of inventory. The Company's definition of a mine and the mine's production phase may differ from that of other companies in the mining industry resulting in incomparable allocations of stripping costs to deferred mine development and production costs. Other mining companies may expense pre-stripping costs associated with subsequent pits within a mining complex. Other mining companies may capitalize stripping costs incurred in connection with the production phase.
Mine development costs are amortized using the units-of-production (“UOP”) method based on estimated recoverable ounces or pounds in proven and probable reserves. To the extent that these costs benefit an entire ore body, they are amortized over the estimated life of the ore body. Costs incurred to access specific ore blocks or areas that only provide benefit over the life of that area are amortized over the estimated life of that specific ore block or area.
Mineral Interests
Mineral interests include acquired interests in production, development and exploration stage properties. The mineral interests are capitalized at their fair value at the acquisition date, either as an individual asset purchase or as part of a business combination.
The value of such assets is primarily driven by the nature and amount of mineralized material believed to be contained in such properties. Production stage mineral interests represent interests in operating properties that contain proven and probable reserves. Development stage mineral interests represent interests in properties under development that contain proven and probable reserves. Exploration stage mineral interests represent interests in properties that are believed to potentially contain mineralized material consisting of (i) mineralized material such as inferred material within pits; measured, indicated and inferred material with insufficient drill spacing to qualify as proven and probable reserves; and inferred material in close proximity to proven and probable reserves; (ii) around-mine exploration potential such as inferred material not immediately adjacent to existing reserves and mineralization, but located within the immediate mine area; (iii) other mine-related exploration potential that is not part of measured, indicated or inferred material and is comprised mainly of material outside of the immediate mine area; (iv) greenfields exploration potential that is not associated with any other production, development or exploration stage property, as described above; or (v) any acquired right to explore or extract a potential mineral deposit. The Company's mineral rights generally are enforceable regardless of whether proven and probable reserves have been established. In certain limited situations, the nature of a mineral right changes from an exploration right to a mining right upon the establishment of proven and probable reserves. The Company has the ability and intent to renew mineral interests where the existing term is not sufficient to recover all identified and valued proven and probable reserves and/or undeveloped mineralized material.
Asset Impairment
The Company reviews and evaluates its long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. An impairment is considered to exist if the total estimated future cash flows on an undiscounted basis are less than the carrying amount of the assets, including goodwill, if any. An impairment loss is measured and recorded based on discounted estimated future cash flows. Future cash flows are estimated based on quantities of recoverable minerals, expected gold and other commodity prices (considering current and historical prices, trends and related factors), production levels, operating costs, capital requirements and reclamation costs, all based on life-of-mine plans. Existing proven and probable reserves and value beyond proven and probable reserves, including mineralization that is not part of the measured, indicated or inferred resource base, are included when determining the fair value of mine site reporting units at acquisition and, subsequently, in determining whether the assets are impaired. The term “recoverable minerals” refers to the estimated amount of gold or other commodities that will be obtained after taking into account losses during ore processing and treatment. Estimates of recoverable minerals from such exploration stage mineral interests are risk adjusted based on management's relative confidence in such materials. In estimating future cash flows, assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of future cash flows from other asset groups. The Company's estimates of future cash flows are based on numerous assumptions and it is possible that actual future cash flows will be significantly different than the estimates, as actual future quantities of recoverable minerals, gold and other commodity prices, production levels and costs and capital are each subject to significant risks and uncertainties.
Revenue Recognition
Revenue is recognized, net of treatment and refining charges, from a sale when persuasive evidence of an arrangement exists, the price is determinable, the product has been delivered, the title has been transferred to the customer and collection of the sales price is reasonably assured. Revenues from by-product sales are credited to Costs applicable to sales as a by-product credit.
Concentrate sales are initially recorded based on 100% of the provisional sales prices. Until final settlement occurs, adjustments to the provisional sales prices are made to take into account the mark-to-market changes based on the forward prices for the estimated month of settlement. For changes in metal quantities upon receipt of new information and assay, the provisional sales quantities are adjusted as well. The principal risks associated with recognition of sales on a provisional basis include metal price fluctuations between the date initially recorded and the date of final settlement. If a significant decline in metal prices occurs between the provisional pricing date and the final settlement date, it is reasonably possible that the Company could be required to return a portion of the sales proceeds received based on the provisional invoice.
The Company's sales based on a provisional price 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 concentrates at the forward exchange price 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.
Income and Mining Taxes
The Company accounts for income taxes using the liability method, recognizing certain temporary differences between the financial reporting basis of the Company's liabilities and assets and the related income tax basis for such liabilities and assets. This method generates either a net deferred income tax liability or asset for the Company, as measured by the statutory tax rates in effect. The Company derives its deferred income tax charge or benefit by recording the change in either the net deferred income tax liability or asset balance for the year. Mining taxes represent state and provincial taxes levied on mining operations and are classified as income taxes; as such taxes are based on a percentage of mining profits. With respect to the earnings that the Company derives from the operations of its consolidated subsidiaries, in those situations where the earnings are indefinitely reinvested, no deferred taxes have been provided on the unremitted earnings (including the excess of the carrying value of the net equity of such entities for financial reporting purposes over the tax basis of such equity) of these consolidated companies.
The Company's deferred income tax assets include certain future tax benefits. The Company records a valuation allowance against any portion of those deferred income tax assets when it believes, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred income tax asset will not be realized.
The Company's operations involve dealing with uncertainties and judgments in the application of complex tax regulations in multiple jurisdictions. The final taxes paid are dependent upon many factors, including negotiations with taxing authorities in various jurisdictions and resolution of disputes arising from federal, state, and international tax audits. The Company recognizes potential liabilities and records tax liabilities for anticipated tax audit issues in the U.S. and other tax jurisdictions based on its estimate of whether, and the extent to which, additional taxes will be due. The Company adjusts these reserves in light of changing facts and circumstances; however, due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the Company's current estimate of the tax liabilities. If the Company's estimate of tax liabilities proves to be less than the ultimate assessment, an additional charge to expense would result. If the estimate of tax liabilities proves to be greater than the ultimate assessment, a tax benefit would result. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in Income and mining tax expense.
Foreign Currency
The functional currency for the majority of the Company's operations, including the Australian operations, is the U.S. dollar. All monetary assets and liabilities where the functional currency is the U.S. dollar are translated at current exchange rates and the resulting adjustments are included in Other income, net. All assets and liabilities recorded in functional currencies other than U.S. dollars are translated at current exchange rates and the resulting adjustments are charged or credited directly to Accumulated other comprehensive income in Equity. Revenues and expenses in foreign currencies are translated at the weighted-average exchange rates for the period.
Derivative Instruments
Newmont has forward contracts designated as cash flow hedges in place to hedge against changes in foreign exchanges rates and diesel prices, and forward starting swap contracts to hedge against changes in treasury rates. The fair value of derivative contracts qualifying as cash flow hedges are reflected as assets or liabilities in the balance sheet. To the extent these hedges are effective in offsetting forecasted cash flows from production costs (the “effective portion”), changes in fair value are deferred in Accumulated other comprehensive income. Amounts deferred in Accumulated other comprehensive income are reclassified to income when the hedged transaction has occurred. The ineffective portion of the change in the fair value of the derivative is recorded in Other income, net in each period. Cash transactions related to the Company's derivative contracts accounted for as hedges are classified in the same category as the item being hedged in the statement of cash flows.
When derivative contracts qualifying as cash flow hedges are settled, accelerated or restructured before the maturity date of the contracts, the related amount in Accumulated other comprehensive income at the settlement date is deferred and reclassified to earnings, as applicable, when the originally designated hedged transaction impacts earnings.
The fair value of derivative contracts qualifying as fair value hedges are reflected as assets or liabilities in the balance sheet. Changes in fair value are recorded in income in each period, consistent with recording changes to the mark-to-market value of the underlying hedged asset or liability in income. Prior to maturity in May 2011, changes in the mark-to-market value of the effective portion of interest rate swaps utilized by the Company to swap a portion of its fixed rate interest rate risk to floating rate risk were recognized as a component of Interest expense, net.
Newmont assesses the effectiveness of the derivative contracts periodically using either regression analysis or the dollar offset approach, both retrospectively and prospectively, to determine whether the hedging instruments have been highly effective in offsetting changes in the fair value of the hedged items. The Company will also assess periodically whether the hedging instruments are expected to be highly effective in the future. If a hedging instrument is not expected to be highly effective, the Company will stop hedge accounting prospectively. In those instances, the gains or losses remain in Accumulated other comprehensive income until the hedged item affects earnings.
Net Income per Common Share
Basic and diluted income per share are presented for Net income attributable to Newmont stockholders and for Income from continuing operations attributable to Newmont stockholders. Basic income per share is computed by dividing income available to common shareholders by the weighted-average number of outstanding common shares for the period, including the exchangeable shares (see Notes 12 and 23). Diluted income per share reflects the potential dilution that could occur if securities or other contracts that may require the issuance of common shares in the future were converted. Diluted income per share is computed by increasing the weighted-average number of outstanding common shares to include the additional common shares that would be outstanding after conversion and adjusting net income for changes that would result from the conversion. Only those securities or other contracts that result in a reduction in earnings per share are included in the calculation.
Recently Adopted Accounting Pronouncements
Goodwill Impairment
In September 2011, ASC guidance was issued related to goodwill impairment. Under the updated guidance, an entity will have the option to first assess qualitatively whether it is necessary to perform the two-step goodwill impairment test. If the Company believes, as a result of its qualitative assessment, that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, the quantitative impairment test is required. Otherwise, no further testing is required. The update does not change how the Company performs the two-step impairment test under previous guidance. The Company's January 1, 2012 adoption of the guidance had no impact on the Company's consolidated financial position, results of operations or cash flows.
Fair Value Accounting
In May 2011, ASC guidance was issued related to disclosures around fair value accounting. The updated guidance clarifies different components of fair value accounting including the application of the highest and best use and valuation premise concepts, measuring the fair value of an instrument classified in a reporting entity's shareholders' equity and disclosing quantitative information about the unobservable inputs used in fair value measurements that are categorized in Level 3 of the fair value hierarchy. The Company's January 1, 2012 adoption of the updated guidance had no impact on the Company's consolidated financial position, results of operations or cash flows.
Comprehensive Income
In June 2011, the ASC guidance was issued related to comprehensive income. Under the updated guidance, an entity will have the option to present the total of comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In addition, the update required certain disclosure requirements when reporting other comprehensive income. The update does not change the items reported in other comprehensive income or when an item of other comprehensive income must be reclassified to income. The Company adopted the new guidance and its deferral and opted to present the total of comprehensive income in two separate but consecutive statements effective for its fiscal year beginning January 1, 2011. The early adoption had no impact on the Company's consolidated financial position, results of operations or cash flows.
Recently Issued Accounting Pronouncements
Reporting of Amounts reclassified out of Accumulated Other Comprehensive Income
In February 2013, ASC guidance was issued related to items reclassified from Accumulated Other Comprehensive Income. The new standard requires either in a single note or parenthetically on the face of the financial statements:(i) the effect of significant amounts reclassified from each component of accumulated other comprehensive income based on its source and (ii) the income statement line items affected by the reclassification. The update is effective for the Company's fiscal year beginning January 1, 2013 with early adoption permitted. The Company does not expect the updated guidance to have a significant 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. The update is effective for the Company's fiscal year beginning January 1, 2013, and interim periods within those annual periods. Retrospective application is required.
In January 2013, ASC guidance was issued to 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. The Company does not expect the updated guidance to have an impact on the consolidated financial position, results of operations or cash flows.
|
Costs | Advanced | |||||||||||||||||||||
Applicable | Projects and | Pre-Tax | Total | Capital | ||||||||||||||||||
Sales | to Sales | Amortization | Exploration | Income | Assets | Expenditures(1) | ||||||||||||||||
Year Ended December 31, 2012 | ||||||||||||||||||||||
Nevada | $ | 2,851 | $ | 1,098 | $ | 230 | $ | 138 | $ | 1,372 | $ | 7,515 | $ | 677 | ||||||||
La Herradura | 354 | 132 | 21 | 41 | 157 | 438 | 89 | |||||||||||||||
Other North America | - | - | - | 2 | (182) | 155 | - | |||||||||||||||
North America | 3,205 | 1,230 | 251 | 181 | 1,347 | 8,108 | 766 | |||||||||||||||
Yanacocha | 2,202 | 669 | 254 | 59 | 1,100 | 2,942 | 510 | |||||||||||||||
Conga | - | - | - | 61 | (83) | 1,644 | 582 | |||||||||||||||
Other South America | - | - | - | 69 | (66) | 25 | 19 | |||||||||||||||
South America | 2,202 | 669 | 254 | 189 | 951 | 4,611 | 1,111 | |||||||||||||||
Boddington: | ||||||||||||||||||||||
Gold | 1,184 | 623 | 159 | |||||||||||||||||||
Copper | 224 | 150 | 34 | |||||||||||||||||||
Total Boddington | 1,408 | 773 | 193 | 8 | 364 | 4,678 | 141 | |||||||||||||||
Batu Hijau: | ||||||||||||||||||||||
Gold | 106 | 71 | 12 | |||||||||||||||||||
Copper | 561 | 385 | 76 | |||||||||||||||||||
Total Batu Hijau | 667 | 456 | 88 | 32 | 8 | 3,777 | 148 | |||||||||||||||
Other Australia/New Zealand | 1,512 | 796 | 142 | 66 | 441 | 1,444 | 277 | |||||||||||||||
Other Asia Pacific | - | - | 4 | 18 | 181 | 962 | 19 | |||||||||||||||
Asia Pacific | 3,587 | 2,025 | 427 | 124 | 994 | 10,861 | 585 | |||||||||||||||
Ahafo | 874 | 314 | 75 | 53 | 435 | 1,423 | 228 | |||||||||||||||
Akyem | - | - | - | 19 | (20) | 995 | 388 | |||||||||||||||
Other Africa | - | - | - | 12 | (11) | 7 | - | |||||||||||||||
Africa | 874 | 314 | 75 | 84 | 404 | 2,425 | 616 | |||||||||||||||
Corporate and Other | - | - | 25 | 126 | (582) | 3,645 | 74 | |||||||||||||||
Consolidated | $ | 9,868 | $ | 4,238 | $ | 1,032 | $ | 704 | $ | 3,114 | $ | 29,650 | $ | 3,152 | ||||||||
(1) | Accrual basis includes a decrease in accrued capital expenditures of $58; consolidated capital expenditures on a cash basis were $3,210. |
Costs | Advanced | |||||||||||||||||||||
Applicable to | Projects and | Pre-Tax | Total | Capital | ||||||||||||||||||
Sales | Sales | Amortization | Exploration | Income | Assets | Expenditures(1) | ||||||||||||||||
Year Ended December 31, 2011 | ||||||||||||||||||||||
Nevada | $ | 2,700 | $ | 1,039 | $ | 277 | $ | 132 | $ | 1,213 | $ | 6,957 | $ | 559 | ||||||||
La Herradura | 331 | 110 | 20 | 18 | 190 | 329 | 81 | |||||||||||||||
Other North America | - | - | 14 | 197 | (2,264) | 192 | 101 | |||||||||||||||
North America | 3,031 | 1,149 | 311 | 347 | (861) | 7,478 | 741 | |||||||||||||||
Yanacocha | 2,003 | 711 | 234 | 39 | 988 | 2,712 | 360 | |||||||||||||||
Conga | - | - | - | 27 | (28) | 1,086 | 739 | |||||||||||||||
Other South America | - | - | - | 45 | (47) | 31 | - | |||||||||||||||
South America | 2,003 | 711 | 234 | 111 | 913 | 3,829 | 1,099 | |||||||||||||||
Boddington | ||||||||||||||||||||||
Gold | 1,056 | 470 | 122 | |||||||||||||||||||
Copper | 210 | 118 | 28 | |||||||||||||||||||
Total Boddington | 1,266 | 588 | 150 | 11 | 506 | 4,629 | 217 | |||||||||||||||
Batu Hijau: | ||||||||||||||||||||||
Gold | 524 | 164 | 35 | |||||||||||||||||||
Copper | 1,052 | 332 | 71 | |||||||||||||||||||
Total Batu Hijau | 1,576 | 496 | 106 | 8 | 890 | 3,582 | 196 | |||||||||||||||
Other Australia/New Zealand | 1,613 | 681 | 135 | 51 | 730 | 1,257 | 294 | |||||||||||||||
Other Asia Pacific | - | - | 3 | 18 | (66) | 630 | 18 | |||||||||||||||
Asia Pacific | 4,455 | 1,765 | 394 | 88 | 2,060 | 10,098 | 725 | |||||||||||||||
Ahafo | 869 | 265 | 76 | 40 | 465 | 1,146 | 116 | |||||||||||||||
Akyem | - | - | - | 9 | (10) | 552 | 248 | |||||||||||||||
Other Africa | - | - | - | 7 | (11) | - | - | |||||||||||||||
Africa | 869 | 265 | 76 | 56 | 444 | 1,698 | 364 | |||||||||||||||
Corporate and Other | - | - | 21 | 121 | (746) | 3,008 | 35 | |||||||||||||||
Consolidated | $ | 10,358 | $ | 3,890 | $ | 1,036 | $ | 723 | $ | 1,810 | $ | 26,111 | $ | 2,964 | ||||||||
(1) | Accrual basis includes an increase in accrued capital expenditures of $177; consolidated capital expenditures on a cash basis were $2,787. |
Costs | Advanced | |||||||||||||||||||||
Applicable to | Projects and | Pre-Tax | Total | Capital | ||||||||||||||||||
Sales | Sales | Amortization | Exploration | Income | Assets | Expenditures(1) | ||||||||||||||||
Year Ended December 31, 2010 | ||||||||||||||||||||||
Nevada | $ | 2,111 | $ | 974 | $ | 271 | $ | 85 | $ | 738 | $ | 3,387 | $ | 298 | ||||||||
La Herradura | 217 | 73 | 19 | 6 | 118 | 216 | 41 | |||||||||||||||
Other North America | - | - | 14 | 99 | (112) | 2,264 | 115 | |||||||||||||||
North America | 2,328 | 1,047 | 304 | 190 | 744 | 5,867 | 454 | |||||||||||||||
Yanacocha | 1,778 | 630 | 162 | 24 | 893 | 2,682 | 167 | |||||||||||||||
Conga | - | - | - | 10 | (11) | 262 | 134 | |||||||||||||||
Other South America | - | - | 1 | 28 | (23) | 30 | - | |||||||||||||||
South America | 1,778 | 630 | 163 | 62 | 859 | 2,974 | 301 | |||||||||||||||
Boddington | ||||||||||||||||||||||
Gold | 834 | 400 | 113 | |||||||||||||||||||
Copper | 162 | 93 | 25 | |||||||||||||||||||
Total Boddington | 996 | 493 | 138 | 6 | 304 | 4,323 | 146 | |||||||||||||||
Batu Hijau: | ||||||||||||||||||||||
Gold | 776 | 155 | 42 | |||||||||||||||||||
Copper | 1,686 | 337 | 90 | |||||||||||||||||||
Total Batu Hijau | 2,462 | 492 | 132 | 3 | 1,736 | 3,398 | 67 | |||||||||||||||
Other Australia/New Zealand | 1,321 | 585 | 108 | 31 | 575 | 1,025 | 176 | |||||||||||||||
Other Asia Pacific | - | - | 2 | 19 | (14) | 535 | 17 | |||||||||||||||
Asia Pacific | 4,779 | 1,570 | 380 | 59 | 2,601 | 9,281 | 406 | |||||||||||||||
Ahafo | 655 | 237 | 78 | 24 | 298 | 1,051 | 109 | |||||||||||||||
Akyem | - | - | - | 9 | (9) | 295 | 70 | |||||||||||||||
Other Africa | - | - | - | - | (1) | - | - | |||||||||||||||
Africa | 655 | 237 | 78 | 33 | 288 | 1,346 | 179 | |||||||||||||||
Corporate and Other | - | - | 20 | 90 | (495) | 6,195 | 34 | |||||||||||||||
Consolidated | $ | 9,540 | $ | 3,484 | $ | 945 | $ | 434 | $ | 3,997 | $ | 25,663 | $ | 1,374 | ||||||||
(1) | Accrual basis includes a decrease in accrued capital expenditures of $28; consolidated capital expenditures on a cash basis were $1,402. | |||||||||||||||||||||
Revenues from export and domestic sales were as follows: | |||||||||||
Years Ended December 31, | |||||||||||
2012 | 2011 | 2010 | |||||||||
Europe | $ | 7,590 | $ | 7,392 | $ | 6,209 | |||||
Japan | 758 | 750 | 1,544 | ||||||||
Korea | 331 | 712 | 760 | ||||||||
Indonesia | 67 | 531 | 372 | ||||||||
Mexico | 354 | 331 | 217 | ||||||||
Philippines | 225 | 287 | 128 | ||||||||
Australia | 217 | 182 | 110 | ||||||||
Other | 326 | 173 | 200 | ||||||||
$ | 9,868 | $ | 10,358 | $ | 9,540 |
Long-lived assets, excluding deferred tax assets, investments and restricted cash, were as follows:
At December 31, | |||||||
2012 | 2011 | ||||||
United States | $ | 7,252 | $ | 6,643 | |||
Australia | 5,510 | 5,359 | |||||
Peru | 3,592 | 2,654 | |||||
Indonesia | 2,719 | 2,421 | |||||
Ghana | 2,189 | 1,535 | |||||
Other | 426 | 349 | |||||
$ | 21,688 | $ | 18,961 |
|
Balance January 1, 2011 | $ | 1,048 | ||||
Additions, changes in estimates and other | 176 | |||||
Liabilities settled | (43) | |||||
Accretion expense | 59 | |||||
Balance December 31, 2011 | 1,240 | |||||
Additions, changes in estimates and other | 308 | |||||
Liabilities settled | (73) | |||||
Accretion expense | 64 | |||||
Balance December 31, 2012 | $ | 1,539 |
Years Ended December 31, | |||||||||||
2012 | 2011 | 2010 | |||||||||
Reclamation | $ | 32 | $ | 61 | $ | 13 | |||||
Accretion - operating | 55 | 50 | 44 | ||||||||
Accretion - non-operating | 9 | 9 | 8 | ||||||||
$ | 96 | $ | 120 | $ | 65 |
|
NOTE ##WritedownsNote WRITE-DOWN OF PROPERTY, PLANT AND MINE DEVELOPMENT | |||||||||||
Years Ended December 31, | |||||||||||
2012 | 2011 | 2010 | |||||||||
Other North America | $ | 25 | $ | - | $ | - | |||||
Conga | 17 | - | - | ||||||||
Batu Hijau | 5 | 1 | 1 | ||||||||
Other Australia/New Zealand | 5 | - | 1 | ||||||||
Hope Bay | - | 2,080 | - | ||||||||
Nevada | - | 2 | 4 | ||||||||
Yanacocha | - | 1 | - | ||||||||
$ | 52 | $ | 2,084 | $ | 6 |
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NOTE ##OthExpNote OTHER EXPENSE, NET | |||||||||||
Years Ended December 31, | |||||||||||
2012 | 2011 | 2010 | |||||||||
Hope Bay care and maintenance | $ | 144 | $ | 17 | $ | - | |||||
Community development | 95 | 67 | 111 | ||||||||
Regional administration | 88 | 78 | 64 | ||||||||
Restructuring and other | 58 | - | - | ||||||||
Western Australia power plant | 13 | 15 | 15 | ||||||||
Acquisition costs | 12 | 22 | - | ||||||||
World Gold Council dues | 11 | 7 | 13 | ||||||||
Indonesian value added tax settlement | - | 21 | 10 | ||||||||
Other | 28 | 38 | 48 | ||||||||
$ | 449 | $ | 265 | $ | 261 | ||||||
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NOTE ##OthIncNote OTHER INCOME, NET | |||||||||||
Years Ended December 31, | |||||||||||
2012 | 2011 | 2010 | |||||||||
Gain on asset sales, net | $ | 105 | $ | 17 | $ | 48 | |||||
Development projects, net | 66 | 42 | 18 | ||||||||
Reduction of allowance for loan receivable | 49 | - | - | ||||||||
Canadian Oil Sands dividends | 42 | 34 | 55 | ||||||||
Refinery income, net | 27 | 27 | 14 | ||||||||
Interest | 12 | 11 | 11 | ||||||||
Gain on sale of investments, net | 2 | 64 | 16 | ||||||||
Derivative ineffectiveness, net | 2 | (17) | (2) | ||||||||
Foreign currency exchange, net | (5) | (4) | (64) | ||||||||
Impairment of marketable securities | (47) | (180) | (1) | ||||||||
Other | 25 | 18 | 14 | ||||||||
$ | 278 | $ | 12 | $ | 109 | ||||||
|
Years Ended December 31, | |||||||||||
2012 | 2011 | 2010 | |||||||||
Current: | |||||||||||
United States | $ | (210) | $ | (346) | $ | (214) | |||||
Foreign | (644) | (1,038) | (1,022) | ||||||||
(854) | (1,384) | (1,236) | |||||||||
Deferred: | |||||||||||
United States | 107 | 185 | 518 | ||||||||
Foreign | (122) | 486 | (138) | ||||||||
(15) | 671 | 380 | |||||||||
$ | (869) | $ | (713) | $ | (856) |
Years Ended December 31, | ||||||||||
2012 | 2011 | 2010 | ||||||||
United States | $ | 1,036 | $ | 878 | $ | 737 | ||||
Foreign | 2,078 | 932 | 3,260 | |||||||
$ | 3,114 | $ | 1,810 | $ | 3,997 |
Years Ended December 31, | |||||||||||||
2012 | 2011 | 2010 | |||||||||||
Income before income and mining tax and other items | $ | 3,114 | $ | 1,810 | $ | 3,997 | |||||||
United States statutory corporate income tax rate | 35 | % | 35 | % | 35 | % | |||||||
Income tax expense computed at United States statutory corporate income tax rate | (1,090) | (634) | (1,399) | ||||||||||
Reconciling items: | |||||||||||||
Tax benefit generated on change in form of a non- | 694 | 65 | 440 | ||||||||||
U.S. subsidiary | |||||||||||||
Percentage depletion | 267 | 172 | 151 | ||||||||||
Change in valuation allowance on deferred tax assets | (716) | (263) | 18 | ||||||||||
Mining taxes, net | (77) | (42) | (33) | ||||||||||
Other | 53 | (11) | (33) | ||||||||||
Income and mining tax expense | $ | (869) | $ | (713) | $ | (856) |
Components of the Company's deferred income tax assets (liabilities) are as follows: | |||||||||
At December 31, | |||||||||
2012 | 2011 | ||||||||
Deferred income tax assets: | |||||||||
Property, plant and mine development | $ | 621 | $ | 689 | |||||
Reclamation and remediation | 306 | 226 | |||||||
Net operating losses, capital losses and tax credits | 2,012 | 1,054 | |||||||
Investment in partnerships | 281 | 203 | |||||||
Employee-related benefits | 280 | 15 | |||||||
Derivative instruments and unrealized loss on investments | 145 | 308 | |||||||
Other | 148 | 8 | |||||||
3,793 | 2,503 | ||||||||
Valuation allowances | (1,626) | (977) | |||||||
2,167 | 1,526 | ||||||||
Deferred income tax liabilities: | |||||||||
Property, plant and mine development | (1,724) | (1,362) | |||||||
Net undistributed earnings of subsidiaries | (301) | (198) | |||||||
Derivative instruments and unrealized gain on investments | (217) | (69) | |||||||
Other | (170) | (93) | |||||||
(2,412) | (1,722) | ||||||||
Net deferred income tax assets (liabilities) | $ | (245) | $ | (196) |
Net deferred income tax assets and liabilities consist of: | ||||||||
At December 31, | ||||||||
2012 | 2011 | |||||||
Current deferred income tax assets | $ | 196 | $ | 396 | ||||
Long-term deferred income tax assets | 480 | 242 | ||||||
Current deferred income tax liabilities | (63) | (50) | ||||||
Long-term deferred income tax liabilities | (858) | (784) | ||||||
$ | (245) | $ | (196) |
At December 31, 2011 | ||||||||||||
As Previously Reported | Adjustment | Revised | ||||||||||
(in millions) | ||||||||||||
ASSETS | ||||||||||||
Deferred income tax assets | 1,605 | (1,363) | 242 | |||||||||
Total assets | $ | 27,474 | $ | (1,363) | $ | 26,111 | ||||||
LIABILITIES | ||||||||||||
Deferred income tax liabilities | $ | 2,147 | $ | (1,363) | $ | 784 | ||||||
Total liabilities | 11,703 | (1,363) | 10,340 | |||||||||
Total liabilities and equity | $ | 27,474 | $ | (1,363) | $ | 26,111 |
2012 | 2011 | 2010 | |||||||||
Total amount of gross unrecognized tax benefits at | |||||||||||
beginning of year | $ | 336 | $ | 116 | $ | 130 | |||||
Additions for tax positions of prior years | 89 | 160 | 3 | ||||||||
Additions for tax positions of current year | - | 64 | - | ||||||||
Reductions due to settlements with taxing authorities | (5) | - | (9) | ||||||||
Reductions due to lapse of statute of limitations | (21) | (4) | (8) | ||||||||
Total amount of gross unrecognized tax benefits at end of | |||||||||||
year | $ | 399 | $ | 336 | $ | 116 |
|
NOTE ##EqtyIncAffNote EQUITY INCOME (LOSS) OF AFFILIATES | ||||||||||
Years Ended December 31, | ||||||||||
2012 | 2011 | 2010 | ||||||||
Minera La Zanja S.R.L. | $ | 18 | $ | 52 | $ | 10 | ||||
Euronimba Ltd. | (69) | (41) | (10) | |||||||
AGR Matthey Joint Venture | - | - | 3 | |||||||
$ | (51) | $ | 11 | $ | 3 |
|
NOTE ##NCINote NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | |||||||||||
Years Ended December 31, | |||||||||||
2012 | 2011 | 2010 | |||||||||
Yanacocha | $ | 305 | $ | 326 | $ | 292 | |||||
Batu Hijau | (2) | 287 | 549 | ||||||||
Other | 6 | (7) | (2) | ||||||||
$ | 309 | $ | 606 | $ | 839 |
|
NOTE ##PensionNote EMPLOYEE-RELATED BENEFITS | |||||||||
At December 31, | |||||||||
2012 | 2011 | ||||||||
Current: | |||||||||
Accrued payroll and withholding taxes | $ | 256 | $ | 204 | |||||
Peruvian workers’ participation | 45 | 42 | |||||||
Employee pension benefits | 9 | 5 | |||||||
Other post-retirement plans | 2 | 3 | |||||||
Accrued severance | 3 | 3 | |||||||
Other employee-related payables | 24 | 50 | |||||||
$ | 339 | $ | 307 | ||||||
At December 31, | |||||||||
2012 | 2011 | ||||||||
Long-term: | |||||||||
Employee pension benefits | $ | 297 | $ | 227 | |||||
Other post-retirement benefit plans | 130 | 104 | |||||||
Accrued severance | 113 | 96 | |||||||
Peruvian workers’ participation | 20 | 17 | |||||||
Other employee-related payables | 26 | 15 | |||||||
$ | 586 | $ | 459 |
Pension Benefits | Other Benefits | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Change in Benefit Obligation: | |||||||||||||||
Benefit obligation at beginning of year | $ | 772 | $ | 681 | $ | 107 | $ | 95 | |||||||
Service cost | 30 | 25 | 3 | 2 | |||||||||||
Interest cost | 41 | 39 | 6 | 5 | |||||||||||
Actuarial loss | 136 | 66 | 18 | 7 | |||||||||||
Foreign currency exchange gain | (3) | - | - | - | |||||||||||
Settlement payments | - | (14) | - | - | |||||||||||
Benefits paid | (32) | (25) | (2) | (2) | |||||||||||
Projected benefit obligation at end of year | $ | 944 | $ | 772 | N/A | N/A | |||||||||
Accumulated Benefit Obligation | $ | 780 | $ | 554 | $ | 132 | $ | 107 | |||||||
Change in Fair Value of Assets: | |||||||||||||||
Fair value of assets at beginning of year | $ | 540 | $ | 559 | $ | - | $ | - | |||||||
Actual return on plan assets | 81 | (7) | - | - | |||||||||||
Employer contributions | 49 | 27 | 2 | 2 | |||||||||||
Settlement payments | - | (14) | - | - | |||||||||||
Benefits paid | (32) | (25) | (2) | (2) | |||||||||||
Fair value of assets at end of year | $ | 638 | $ | 540 | $ | - | $ | - | |||||||
Unfunded status, net | $ | 306 | $ | 232 | $ | 132 | $ | 107 |
Pension Benefits | Other Benefits | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Accrued employee benefit liability | $ | 306 | $ | 232 | $ | 132 | $ | 107 | |||||||
Accumulated other comprehensive income (loss): | |||||||||||||||
Net actuarial gain (loss) | $ | (413) | $ | (349) | $ | (12) | $ | 6 | |||||||
Prior service credit (cost) | (6) | (7) | 4 | 4 | |||||||||||
(419) | (356) | (8) | 10 | ||||||||||||
Less: Income taxes | 147 | 125 | 4 | (4) | |||||||||||
$ | (272) | $ | (231) | $ | (4) | $ | 6 |
Pension Benefit Costs | Other Benefit Costs | ||||||||||||||||||
2012 | 2011 | 2010 | 2012 | 2011 | 2010 | ||||||||||||||
Service cost | $ | 30 | $ | 25 | $ | 21 | $ | 3 | $ | 2 | $ | 2 | |||||||
Interest cost | 41 | 39 | 36 | 6 | 5 | 6 | |||||||||||||
Expected return on plan assets | (44) | (42) | (32) | - | - | - | |||||||||||||
Amortization, net | 33 | 26 | 17 | (1) | (1) | (1) | |||||||||||||
$ | 60 | $ | 48 | $ | 42 | $ | 8 | $ | 6 | $ | 7 |
Pension Benefits | Other Benefits | ||||||||||||||||||
2012 | 2011 | 2010 | 2012 | 2011 | 2010 | ||||||||||||||
Net gain (loss) | $ | (96) | $ | (111) | $ | (41) | $ | (17) | $ | (6) | $ | 5 | |||||||
Amortization, net | 33 | 26 | 17 | (1) | (1) | (1) | |||||||||||||
Total recognized in Other comprehensive income (loss) | $ | (63) | $ | (85) | $ | (24) | $ | (18) | $ | (7) | $ | 4 | |||||||
Total recognized in net periodic benefit cost and Other comprehensive income (loss) | $ | (123) | $ | (133) | $ | (66) | $ | (26) | $ | (13) | $ | (3) |
Significant assumptions were as follows: | |||||||||||||||
Pension Benefits | Other Benefits | ||||||||||||||
At December 31, | At December 31, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Weighted-average assumptions used in measuring the Company’s benefit obligation: | |||||||||||||||
Discount rate | 4.30 | % | 5.35 | % | 4.30 | % | 5.35 | % | |||||||
Rate of compensation increase | 5.00 | % | 5.00 | % | 5.00 | % | 5.00 | % |
Pension Benefits | Other Benefits | ||||||||||||||||||||
Years Ended December 31, | Years Ended December 31, | ||||||||||||||||||||
2012 | 2011 | 2010 | 2012 | 2011 | 2010 | ||||||||||||||||
Weighted-average assumptions used in measuring the net periodic pension benefit cost: | |||||||||||||||||||||
Discount long-term rate | 5.35 | % | 5.75 | % | 6.10 | % | 5.35 | % | 5.75 | % | 6.10 | % | |||||||||
Expected return on plan assets | 7.75 | % | 8.00 | % | 8.00 | % | N/A | N/A | N/A | ||||||||||||
Rate of compensation increase | 5.00 | % | 5.00 | % | 5.00 | % | 5.00 | % | 5.00 | % | 5.00 | % |
Actual at | ||||||||
December 31, | ||||||||
Asset Allocation | Target | 2012 | ||||||
U.S. equity investments | 25 | % | 25 | % | ||||
International equity investments | 27 | % | 27 | % | ||||
Fixed income investments | 40 | % | 40 | % | ||||
Other | 8 | % | 8 | % |
Fair Value at December 31, 2012 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Plan Assets: | |||||||||||||||
Cash and cash equivalents | $ | 2 | $ | - | $ | - | $ | 2 | |||||||
Commingled funds | - | 636 | - | 636 | |||||||||||
$ | 2 | $ | 636 | $ | - | $ | 638 | ||||||||
Fair Value at December 31, 2011 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Plan Assets: | |||||||||||||||
Cash and cash equivalents | $ | 1 | $ | - | $ | - | $ | 1 | |||||||
Commingled funds | - | 539 | - | 539 | |||||||||||
$ | 1 | $ | 539 | $ | - | $ | 540 |
One-percentage-point | One-percentage-point | |||||||
Increase | Decrease | |||||||
Effect on total of service and interest cost components of net periodic post-retirement health care benefit cost | $ | 2 | $ | (1) | ||||
Effect on the health care component of the accumulated post-retirement benefit obligation | $ | 22 | $ | (17) |
|
2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||
Weighted-average risk-free interest rate | N/A | 2.0 | % | 2.5 | % | 2.0 | % | 3.1 | % | |||||||
Dividend yield | N/A | 1.4 | % | 0.7 | % | 1.0 | % | 1.0 | % | |||||||
Expected life in years | N/A | 6 | 5 | 5 | 5 | |||||||||||
Volatility | N/A | 37 | % | 38 | % | 36 | % | 30 | % |
The following table summarizes annual activity for all stock options for each of the three years ended December 31: | |||||||||||||||||||
2012 | 2011 | 2010 | |||||||||||||||||
Number of Shares | Weighted-Average Exercise Price | Number of Shares | Weighted-Average Exercise Price | Number of Shares | Weighted-Average Exercise Price | ||||||||||||||
Outstanding at beginning of year | 5,481,341 | $ | 48.40 | 5,414,205 | $ | 45.36 | 6,142,073 | $ | 42.65 | ||||||||||
Granted | - | $ | - | 1,276,250 | $ | 58.72 | 918,343 | $ | 55.68 | ||||||||||
Exercised | (591,859) | $ | 41.22 | (928,037) | $ | 43.67 | (1,494,686) | $ | 40.38 | ||||||||||
Forfeited and expired | (479,558) | $ | 54.57 | (281,077) | $ | 56.56 | (151,525) | $ | 51.02 | ||||||||||
Outstanding at end of year | 4,409,924 | $ | 48.69 | 5,481,341 | $ | 48.40 | 5,414,205 | $ | 45.36 | ||||||||||
Options exercisable at year-end | 3,191,850 | $ | 48.07 | 3,166,178 | $ | 46.22 | 3,211,115 | $ | 45.50 | ||||||||||
Weighted-average fair value per share | |||||||||||||||||||
of options granted during the year | N/A | $ | 18.90 | $ | 20.01 |
The following table summarizes information about stock options outstanding and exercisable at December 31, 2012: | |||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||
Range of Exercise Prices | Number Outstanding | Weighted-Average Remaining Contractual Life (in years) | Weighted-Average Exercise Price | Number Exercisable | Weighted-Average Exercise Price | ||||||||
$20 to $30 | 329,272 | 5.4 | $ | 27.02 | 29,272 | $ | 28.11 | ||||||
$30 to $40 | 733,703 | 6.0 | $ | 39.78 | 733,703 | $ | 39.78 | ||||||
$40 to $50 | 1,227,117 | 3.9 | $ | 44.53 | 1,225,917 | $ | 44.53 | ||||||
$50 to $60 | 2,094,041 | 7.3 | $ | 57.43 | 1,194,364 | $ | 57.15 | ||||||
$60+ | 25,791 | 8.9 | $ | 67.41 | 8,594 | $ | 67.41 | ||||||
4,409,924 | 6.0 | $ | 48.69 | 3,191,850 | $ | 48.07 |
2012 | 2011 | 2010 | ||||||||
Stock options vested | 1,003,888 | 950,119 | 922,463 | |||||||
Weighted-average exercise price | $ | 52.09 | $ | 46.73 | $ | 42.16 |
Years Ended December 31, | ||||||||||
2012 | 2011 | 2010 | ||||||||
Restricted stock units | $ | 26 | $ | 32 | $ | 29 | ||||
Stock options | 13 | 19 | 16 | |||||||
Performance leveraged stock units | 10 | 7 | 7 | |||||||
Strategic stock units | 2 | - | - | |||||||
$ | 51 | $ | 58 | $ | 52 |
|
Assets: | ||||||
Cash | $ | 2 | ||||
Property, plant and mine development, net | 3,226 | |||||
Investments | 281 | |||||
Other assets | 7 | |||||
$ | 3,516 | |||||
Liabilities: | ||||||
Deferred income tax liability | $ | 1,241 | ||||
Other liabilities | 16 | |||||
1,257 | ||||||
Net assets acquired | $ | 2,259 |
|
Fair Value at December 31, 2012 | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||
Assets: | |||||||||||||||
Cash equivalents | $ | 208 | $ | 208 | $ | - | $ | - | |||||||
Marketable equity securities: | |||||||||||||||
Extractive industries | 1,414 | 1,414 | - | - | |||||||||||
Other | 3 | 3 | - | - | |||||||||||
Marketable debt securities: | |||||||||||||||
Asset backed commercial paper | 19 | - | - | 19 | |||||||||||
Corporate | 14 | - | 14 | - | |||||||||||
Auction rate securities | 5 | - | - | 5 | |||||||||||
Trade receivable from provisional copper | 169 | 169 | - | - | |||||||||||
and gold concentrate sales, net | |||||||||||||||
Derivative instruments, net: | |||||||||||||||
Foreign exchange forward contracts | 252 | - | 252 | - | |||||||||||
Diesel forward contracts | 1 | - | 1 | - | |||||||||||
$ | 2,085 | $ | 1,794 | $ | 267 | $ | 24 | ||||||||
Liabilities: | |||||||||||||||
Boddington contingent consideration | 41 | - | - | 41 | |||||||||||
Holt Property Royalty | 240 | - | - | 240 | |||||||||||
$ | 281 | $ | - | $ | - | $ | 281 |
Description | At December 31, 2012 | Valuation technique | Unobservable input | Range/Weighted average | |||||||||||
Auction Rate Securities | $ | 5 | Discounted cash flow | Weighted average recoverability rate | 58 | % | |||||||||
Asset Backed Commercial Paper | 19 | Discounted cash flow | Probability of return | 13-74 | % | ||||||||||
Boddington Contingent Consideration | 41 | Monte Carlo | Discount rate | 4 | % | ||||||||||
LT Gold price | $ | 1,500 | |||||||||||||
LT Copper price | $ | 3.50 | |||||||||||||
Holt property royalty | 240 | Monte Carlo | Weighted average discount rate | 3 | % | ||||||||||
LT Gold price | $ | 1,500 | |||||||||||||
Auction Rate Securities | Asset Backed Commercial Paper | Total Assets | Boddington Contingent Consideration | Holt Property Royalty | Total Liabilities | ||||||||||||||||
December 31, 2011 | $ | 5 | $ | 19 | $ | 24 | $ | 54 | $ | 176 | $ | 230 | |||||||||
Revaluation | - | - | - | 12 | 81 | 93 | |||||||||||||||
Settlements | - | - | - | (25) | (17) | (42) | |||||||||||||||
December 31, 2012 | $ | 5 | $ | 19 | $ | 24 | $ | 41 | $ | 240 | $ | 281 |
|
Expected Maturity Date | |||||||||||||||||||||
Total/ | |||||||||||||||||||||
2013 | 2014 | 2015 | 2016 | 2017 | Average | ||||||||||||||||
A$ Operating Fixed Forward Contracts: | |||||||||||||||||||||
A$ notional (millions) | 1,210 | 940 | 635 | 374 | 107 | 3,266 | |||||||||||||||
Average rate ($/A$) | 0.94 | 0.92 | 0.91 | 0.91 | 0.91 | 0.92 | |||||||||||||||
Expected hedge ratio | 76 | % | 61 | % | 41 | % | 24 | % | 7 | % | |||||||||||
A$ Capital Fixed Forward Contracts: | |||||||||||||||||||||
A$ notional (millions) | 6 | - | - | - | - | 6 | |||||||||||||||
Average rate ($/A$) | 0.97 | - | - | - | - | 0.97 | |||||||||||||||
Expected hedge ratio | 73 | % | - | - | - | - | |||||||||||||||
NZ$ Operating Fixed Forward Contracts: | |||||||||||||||||||||
NZ$ notional (millions) | 66 | 23 | - | - | - | 89 | |||||||||||||||
Average rate ($/NZ$) | 0.79 | 0.79 | - | - | - | 0.79 | |||||||||||||||
Expected hedge ratio | 54 | % | 20 | % | - | - | - |
Expected Maturity Date | |||||||||||||||
Total/ | |||||||||||||||
2013 | 2014 | 2015 | Average | ||||||||||||
Diesel Fixed Forward Contracts: | |||||||||||||||
Diesel gallons (millions) | 26 | 15 | 4 | 45 | |||||||||||
Average rate ($/gallon) | 2.93 | 2.87 | 2.79 | 2.90 | |||||||||||
Expected Nevada hedge ratio | 59 | % | 36 | % | 11 | % |
Fair Values of Derivative Instruments | ||||||||||||||
At December 31, 2012 | ||||||||||||||
Other Current Assets | Other Long-Term Assets | Other Current Liabilities | Other Long-Term Liabilities | |||||||||||
Foreign currency exchange contracts: | ||||||||||||||
A$ operating fixed forward contracts | $ | 108 | $ | 143 | $ | - | $ | 1 | ||||||
NZ$ operating fixed forward contracts | 2 | - | - | - | ||||||||||
Diesel fixed forward contracts | 2 | 1 | 1 | 1 | ||||||||||
Total derivative instruments (Notes ##OthAssetsNote and ##OthLiabNote) | $ | 112 | $ | 144 | $ | 1 | $ | 2 | ||||||
Fair Values of Derivative Instruments | ||||||||||||||
At December 31, 2011 | ||||||||||||||
Other Current Assets | Other Long-Term Assets | Other Current Liabilities | Other Long-Term Liabilities | |||||||||||
Foreign currency exchange contracts: | ||||||||||||||
A$ operating fixed forward contracts | $ | 121 | $ | 112 | $ | 6 | $ | 4 | ||||||
A$ capital fixed forward contracts | - | - | - | 1 | ||||||||||
NZ$ operating fixed forward contracts | 2 | - | 1 | - | ||||||||||
Diesel fixed forward contracts | 4 | - | 2 | 1 | ||||||||||
Interest rate swap contracts | - | - | 399 | - | ||||||||||
Total derivative instruments (Notes ##OthAssetsNote and ##OthLiabNote) | $ | 127 | $ | 112 | $ | 408 | $ | 6 |
Foreign Currency Exchange Contracts | Diesel Fixed Forward Contracts | ||||||||||||||||||
For the years ended December 31, | 2012 | 2011 | 2010 | 2012 | 2011 | 2010 | |||||||||||||
Cash flow hedging relationships: | |||||||||||||||||||
Gain recognized in other comprehensive income (effective portion) | $ | 192 | $ | 151 | $ | 287 | $ | 7 | $ | 6 | $ | 6 | |||||||
Gain reclassified from Accumulated other comprehensive income into income (effective portion) (1)? | $ | 166 | $ | 188 | $ | 92 | $ | 7 | $ | 14 | $ | 4 | |||||||
Forward Starting Swap Contracts | |||||||||||||||||||
For the years ended December 31, | 2012 | 2011 | 2010 | ||||||||||||||||
Cash flow hedging relationships: | |||||||||||||||||||
Gain (loss) recognized in other comprehensive income (effective portion) | $ | 36 | $ | (399) | $ | - | |||||||||||||
(Loss) reclassified from Accumulated other comprehensive income into income (effective portion) (1)? | $ | (10) | $ | - | $ | - | |||||||||||||
Gain (loss) reclassified from Accumulated other comprehensive income into income (ineffective portion) (2)? | $ | 2 | $ | (15) | $ | - |
Interest Rate Swap Contracts | 8 5/8% Debentures (Hedged Portion) | |||||||||||||||||
For the years ended December 31, | 2012 | 2011 | 2010 | 2012 | 2011 | 2010 | ||||||||||||
Fair value hedging relationships: | ||||||||||||||||||
Gain (loss) recognized in income (effective portion) (1)? | $ | - | $ | 3 | $ | 6 | $ | - | $ | (6) | $ | - | ||||||
Gain (loss) recognized in income (ineffective portion) (2)? | $ | - | $ | (2) | $ | (4) | $ | - | $ | - | $ | 2 |
|
NOTE ##InvestNote INVESTMENTS | ||||||||||||||||
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: | ||||||||||||||||
La Zanja | 65 | - | - | 65 | ||||||||||||
$ | 728 | $ | 726 | $ | (8) | $ | 1,446 | |||||||||
At December 31, 2011 | ||||||||||||||||
Cost/Equity | Unrealized | Fair/Equity | ||||||||||||||
Basis | Gain | Loss | Basis | |||||||||||||
Current: | ||||||||||||||||
Marketable Equity Securities: | ||||||||||||||||
Paladin Energy Ltd. | $ | 60 | $ | 13 | $ | - | $ | 73 | ||||||||
Other | 15 | 7 | (1) | 21 | ||||||||||||
$ | 75 | $ | 20 | $ | (1) | $ | 94 | |||||||||
Long-term: | ||||||||||||||||
Marketable Debt Securities: | ||||||||||||||||
Asset backed commercial paper | $ | 25 | $ | - | $ | (6) | $ | 19 | ||||||||
Auction rate securities | 7 | - | (2) | 5 | ||||||||||||
Corporate | 10 | 1 | - | 11 | ||||||||||||
42 | 1 | (8) | 35 | |||||||||||||
Marketable Equity Securities: | ||||||||||||||||
Canadian Oil Sands Trust | 302 | 401 | - | 703 | ||||||||||||
Gabriel Resources Ltd. | 76 | 236 | - | 312 | ||||||||||||
Regis Resources Ltd. | 36 | 218 | - | 254 | ||||||||||||
Other | 92 | 16 | (17) | 91 | ||||||||||||
506 | 871 | (17) | 1,360 | |||||||||||||
Other investments, at cost | 11 | - | - | 11 | ||||||||||||
Investment in Affiliates: | ||||||||||||||||
La Zanja | 66 | - | - | 66 | ||||||||||||
$ | 625 | $ | 872 | $ | (25) | $ | 1,472 |
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 | |||||||||||
Asset backed commercial paper | $ | - | $ | - | $ | 19 | $ | 6 | $ | 19 | $ | 6 | |||||
Auction rate securities | - | - | 5 | 2 | 5 | 2 | |||||||||||
Marketable equity securities | 79 | 5 | - | - | 79 | 5 | |||||||||||
$ | 79 | $ | 5 | $ | 24 | $ | 8 | $ | 103 | $ | 13 | ||||||
Less than 12 Months | 12 Months or Greater | Total | |||||||||||||||
At December 31, 2011 | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |||||||||||
Asset backed commercial paper | $ | - | $ | - | $ | 19 | $ | 6 | $ | 19 | $ | 6 | |||||
Auction rate securities | - | - | 5 | 2 | 5 | 2 | |||||||||||
Marketable equity securities | 42 | 18 | - | - | 42 | 18 | |||||||||||
$ | 42 | $ | 18 | $ | 24 | $ | 8 | $ | 66 | $ | 26 |
|
NOTE ##InventoriesNote INVENTORIES | ||||||||
At December 31, | ||||||||
2012 | 2011 | |||||||
In-process | $ | 143 | $ | 159 | ||||
Concentrate | 152 | 116 | ||||||
Precious metals | 31 | 12 | ||||||
Materials, supplies and other | 470 | 427 | ||||||
$ | 796 | $ | 714 |
|
NOTE ##StockpilesNote STOCKPILES AND ORE ON LEACH PADS | ||||||||
At December 31, | ||||||||
2012 | 2011 | |||||||
Current: | ||||||||
Stockpiles | $ | 602 | $ | 506 | ||||
Ore on leach pads | 184 | 165 | ||||||
$ | 786 | $ | 671 | |||||
Long-term: | ||||||||
Stockpiles | $ | 2,514 | $ | 1,904 | ||||
Ore on leach pads | 382 | 367 | ||||||
$ | 2,896 | $ | 2,271 |
At December 31, | ||||||||
2012 | 2011 | |||||||
Stockpiles and ore on leach pads: | ||||||||
Nevada | $ | 699 | $ | 536 | ||||
La Herradura | 57 | 6 | ||||||
Yanacocha | 498 | 512 | ||||||
Boddington | 474 | 435 | ||||||
Batu Hijau | 1,543 | 1,119 | ||||||
Other Australia/New Zealand | 173 | 161 | ||||||
Ahafo | 235 | 173 | ||||||
Akyem | 3 | - | ||||||
$ | 3,682 | $ | 2,942 |
|
NOTE ##OthAssetsNote OTHER ASSETS | ||||||||
At December 31, | ||||||||
2012 | 2011 | |||||||
Other current assets: | ||||||||
Refinery metal inventory and receivable | $ | 1,183 | $ | 796 | ||||
Prepaid assets | 213 | 93 | ||||||
Derivative instruments | 112 | 127 | ||||||
Restricted cash | 12 | 20 | ||||||
Note receivable | - | 12 | ||||||
Other | 141 | 85 | ||||||
$ | 1,661 | $ | 1,133 | |||||
Other long-term assets: | ||||||||
Goodwill | $ | 188 | $ | 188 | ||||
Derivative instruments | 144 | 112 | ||||||
Intangible assets | 136 | 147 | ||||||
Income tax receivable | 92 | 142 | ||||||
Restricted cash | 90 | 48 | ||||||
Debt issuance costs | 73 | 59 | ||||||
Other receivables | 9 | 17 | ||||||
Other | 140 | 144 | ||||||
$ | 872 | $ | 857 |
|
NOTE ##PPMDNote PROPERTY, PLANT AND MINE DEVELOPMENT | |||||||||||||||||||||
At December 31, 2012 | At December 31, 2011 | ||||||||||||||||||||
Depreciable | Accumulated | Net Book | Accumulated | Net Book | |||||||||||||||||
Life | Cost | Amortization | Value | Cost | Amortization | Value | |||||||||||||||
(in years) | |||||||||||||||||||||
Land | — | $ | 267 | $ | - | $ | 267 | $ | 263 | $ | - | $ | 263 | ||||||||
Facilities and equipment | 1- | 27 | 13,952 | (6,573) | 7,379 | 13,056 | (5,926) | 7,130 | |||||||||||||
Mine development | 1- | 27 | 4,793 | (2,054) | 2,739 | 3,903 | (1,758) | 2,145 | |||||||||||||
Mineral interests | 1- | 27 | 4,854 | (752) | 4,102 | 4,868 | (713) | 4,155 | |||||||||||||
Asset retirement cost | 1- | 27 | 988 | (340) | 648 | 758 | (305) | 453 | |||||||||||||
Construction-in-progress | — | 2,875 | - | 2,875 | 1,735 | - | 1,735 | ||||||||||||||
$ | 27,729 | $ | (9,719) | $ | 18,010 | $ | 24,583 | $ | (8,702) | $ | 15,881 | ||||||||||
Leased assets included above in facilities and equipment | 1- | 27 | $ | 5 | $ | (1) | $ | 4 | $ | 374 | $ | (250) | $ | 124 | |||||||
At December 31, 2012 | At December 31, 2011 | ||||||||||||||||||||
Mineral Interests | Gross | Gross | |||||||||||||||||||
Amortization | Carrying | Accumulated | Net Book | Carrying | Accumulated | Net Book | |||||||||||||||
Period | Value | Amortization | Value | Value | Amortization | Value | |||||||||||||||
(in years) | |||||||||||||||||||||
Production stage | 1- | 22 | $ | 1,257 | $ | (752) | $ | 505 | $ | 1,256 | $ | (713) | $ | 543 | |||||||
Development stage | — | 149 | - | 149 | 149 | - | 149 | ||||||||||||||
Exploration stage | — | 3,448 | - | 3,448 | 3,463 | - | 3,463 | ||||||||||||||
$ | 4,854 | $ | (752) | $ | 4,102 | $ | 4,868 | $ | (713) | $ | 4,155 |
|
NOTE ##DebtNote DEBT | ||||||||||||
At December 31, 2012 | At December 31, 2011 | |||||||||||
Current | Non-Current | Current | Non-Current | |||||||||
Sale-leaseback of refractory ore treatment plant | $ | - | $ | - | $ | 165 | $ | - | ||||
Corporate revolving credit facility | - | - | - | 33 | ||||||||
2012 Convertible Senior Notes, net | - | - | 514 | - | ||||||||
2014 Convertible Senior Notes, net | - | 535 | - | 512 | ||||||||
2017 Convertible Senior Notes, net | - | 471 | - | 452 | ||||||||
2019 Senior Notes, net | - | 897 | - | 896 | ||||||||
2022 Senior Notes, net | - | 1,489 | - | - | ||||||||
2035 Senior Notes, net | - | 598 | - | 598 | ||||||||
2039 Senior Notes, net | - | 1,087 | - | 1,087 | ||||||||
2042 Senior Notes, net | - | 992 | - | - | ||||||||
Ahafo project finance facility | 10 | 35 | 10 | 45 | ||||||||
PTNNT revolving credit facility | - | 180 | - | - | ||||||||
Other capital leases | - | 4 | - | 1 | ||||||||
$ | 10 | $ | 6,288 | $ | 689 | $ | 3,624 |
At December 31, 2012 | At December 31, 2011 | ||||||||||||||||
Convertible Senior Notes Due | Convertible Senior Notes Due | ||||||||||||||||
2012 | 2014 | 2017 | 2012 | 2014 | 2017 | ||||||||||||
Additional paid-in capital | $ | - | $ | 97 | $ | 123 | $ | 46 | $ | 97 | $ | 123 | |||||
Principal amount | $ | - | $ | 575 | $ | 575 | $ | 518 | $ | 575 | $ | 575 | |||||
Unamortized debt discount | - | (40) | (104) | (4) | (63) | (123) | |||||||||||
Net carrying amount | $ | - | $ | 535 | $ | 471 | $ | 514 | $ | 512 | $ | 452 |
|
NOTE ##OthLiabNote OTHER LIABILITIES | ||||||||
At December 31, | ||||||||
2012 | 2011 | |||||||
Other current liabilities: | ||||||||
Refinery metal payable | $ | 1,183 | $ | 796 | ||||
Accrued operating costs | 336 | 231 | ||||||
Accrued capital expenditures | 172 | 248 | ||||||
Reclamation and remediation liabilities | 82 | 71 | ||||||
Interest | 74 | 55 | ||||||
Deferred income tax | 63 | 50 | ||||||
Royalties | 42 | 53 | ||||||
Boddington contingent consideration | 26 | 24 | ||||||
Holt property royalty | 21 | 17 | ||||||
Taxes other than income and mining | 14 | 93 | ||||||
Derivative instruments | 1 | 408 | ||||||
Other | 68 | 87 | ||||||
$ | 2,082 | $ | 2,133 | |||||
Other long-term liabilities: | ||||||||
Holt property royalty | $ | 219 | $ | 159 | ||||
Income and mining taxes | 65 | 88 | ||||||
Power supply agreements | 46 | 45 | ||||||
Boddington contingent consideration | 15 | 30 | ||||||
Derivative instruments | 2 | 6 | ||||||
Other | 25 | 36 | ||||||
$ | 372 | $ | 364 |
|
NOTE ##AOCINote ACCUMULATED OTHER COMPREHENSIVE INCOME | ||||||||
At December 31, | ||||||||
2012 | 2011 | |||||||
Unrealized gain on marketable securities, net of $185 and $159 tax expense, respectively | $ | 542 | $ | 707 | ||||
Foreign currency translation adjustments | 177 | 163 | ||||||
Pension liability adjustments, net of $147 and $125 tax benefit, respectively | (272) | (231) | ||||||
Other post-retirement benefit adjustments, net of $4 and ($4) tax benefit (expense), respectively | (4) | 6 | ||||||
Changes in fair value of cash flow hedge instruments, net of $35 and $71 tax benefit, respectively | 47 | 7 | ||||||
$ | 490 | $ | 652 |
|
Years Ended December 31, | |||||||||||
2012 | 2011 | 2010 | |||||||||
Decrease (increase) in operating assets: | |||||||||||
Trade and accounts receivable | $ | 19 | $ | 52 | $ | (153) | |||||
Inventories, stockpiles and ore on leach pads | (729) | (495) | (501) | ||||||||
EGR refinery assets | (346) | (266) | 116 | ||||||||
Other assets | (80) | (51) | (87) | ||||||||
Increase (decrease) in operating liabilities: | |||||||||||
Accounts payable and other accrued liabilities | (210) | 226 | 38 | ||||||||
EGR refinery liabilities | 346 | 266 | (116) | ||||||||
Reclamation liabilities | (73) | (43) | (51) | ||||||||
$ | (1,073) | $ | (311) | $ | (754) |
|
NOTE ##SuppCFNote SUPPLEMENTAL CASH FLOW INFORMATION | ||||||||||
Years Ended December 31, | ||||||||||
2012 | 2011 | 2010 | ||||||||
Income and mining taxes, net of refunds | $ | 1,261 | $ | 1,526 | $ | 1,185 | ||||
Pension plan and other benefits and contributions | $ | 50 | $ | 29 | $ | 163 | ||||
Interest, net of amounts capitalized | $ | 177 | $ | 179 | $ | 212 |
|
For the Year Ended December 31, 2012 | |||||||||||||||||
Newmont | |||||||||||||||||
Newmont | Mining | ||||||||||||||||
Mining | Newmont | Other | Corporation | ||||||||||||||
Condensed Consolidating Statement of Income and Comprehensive Income | Corporation | USA | Subsidiaries | Eliminations | Consolidated | ||||||||||||
Sales | $ | - | $ | 2,375 | $ | 7,493 | $ | - | $ | 9,868 | |||||||
Costs and expenses | |||||||||||||||||
Costs applicable to sales (1) | - | 967 | 3,271 | - | 4,238 | ||||||||||||
Amortization | - | 171 | 861 | - | 1,032 | ||||||||||||
Reclamation and remediation | - | 6 | 90 | - | 96 | ||||||||||||
Exploration | - | 71 | 285 | - | 356 | ||||||||||||
Advanced projects, research and development | - | 43 | 305 | - | 348 | ||||||||||||
General and administrative | - | 122 | 90 | - | 212 | ||||||||||||
Write-down of property, plant and mine | |||||||||||||||||
development | - | - | 52 | - | 52 | ||||||||||||
Other expense, net | - | 45 | 404 | - | 449 | ||||||||||||
- | 1,425 | 5,358 | - | 6,783 | |||||||||||||
Other income (expense) | |||||||||||||||||
Other income, net | 2 | 25 | 251 | - | 278 | ||||||||||||
Interest income - intercompany | 174 | 29 | (8) | (195) | - | ||||||||||||
Interest expense - intercompany | (15) | - | (180) | 195 | - | ||||||||||||
Interest expense, net | (245) | (6) | 2 | - | (249) | ||||||||||||
(84) | 48 | 65 | - | 29 | |||||||||||||
Income before income and mining tax and other items | (84) | 998 | 2,200 | - | 3,114 | ||||||||||||
Income and mining tax expense | 29 | (268) | (630) | - | (869) | ||||||||||||
Equity income (loss) of affiliates | 1,864 | 616 | 229 | (2,760) | (51) | ||||||||||||
Income from continuing operations | 1,809 | 1,346 | 1,799 | (2,760) | 2,194 | ||||||||||||
Loss from discontinued operations | - | - | (76) | - | (76) | ||||||||||||
Net income | 1,809 | 1,346 | 1,723 | (2,760) | 2,118 | ||||||||||||
Net income attributable to noncontrolling interests | - | - | (443) | 134 | (309) | ||||||||||||
Net income attributable to Newmont stockholders | $ | 1,809 | $ | 1,346 | $ | 1,280 | $ | (2,626) | $ | 1,809 | |||||||
Comprehensive income | $ | 1,647 | $ | 1,269 | $ | 1,553 | $ | (2,512) | $ | 1,957 | |||||||
Comprehensive income attributable to noncontrolling interests | - | - | (444) | 134 | (310) | ||||||||||||
Comprehensive income attributable to Newmont stockholders | $ | 1,647 | $ | 1,269 | $ | 1,109 | $ | (2,378) | $ | 1,647 |
For the Year Ended December 31, 2011 | |||||||||||||||||
Newmont | |||||||||||||||||
Newmont | Mining | ||||||||||||||||
Mining | Newmont | Other | Corporation | ||||||||||||||
Condensed Consolidating Statement of Income and Comprehensive Income | Corporation | USA | Subsidiaries | Eliminations | Consolidated | ||||||||||||
Sales | $ | - | $ | 2,142 | $ | 8,216 | $ | - | $ | 10,358 | |||||||
Costs and expenses | |||||||||||||||||
Costs applicable to sales (1) | - | 972 | 2,918 | - | 3,890 | ||||||||||||
Amortization | - | 184 | 853 | (1) | 1,036 | ||||||||||||
Reclamation and remediation | - | 15 | 105 | - | 120 | ||||||||||||
Exploration | - | 89 | 261 | - | 350 | ||||||||||||
Advanced projects, research and development | - | 44 | 330 | (1) | 373 | ||||||||||||
General and administrative | - | 89 | 109 | - | 198 | ||||||||||||
Write-down of property, plant and mine | |||||||||||||||||
development | - | 2 | 2,082 | - | 2,084 | ||||||||||||
Other expense, net | - | 39 | 224 | 2 | 265 | ||||||||||||
- | 1,434 | 6,882 | - | 8,316 | |||||||||||||
Other income (expense) | |||||||||||||||||
Other income, net | (166) | 14 | 164 | - | 12 | ||||||||||||
Interest income - intercompany | 152 | 25 | (2) | (175) | - | ||||||||||||
Interest expense - intercompany | (19) | - | (156) | 175 | - | ||||||||||||
Interest expense, net | (232) | (8) | (4) | - | (244) | ||||||||||||
(265) | 31 | 2 | - | (232) | |||||||||||||
Income before income and mining tax and other items | (265) | 739 | 1,336 | - | 1,810 | ||||||||||||
Income and mining tax expense | 199 | (196) | (716) | - | (713) | ||||||||||||
Equity income (loss) of affiliates | 432 | 664 | 285 | (1,370) | 11 | ||||||||||||
Income from continuing operations | 366 | 1,207 | 905 | (1,370) | 1,108 | ||||||||||||
Loss from discontinued operations | - | - | (136) | - | (136) | ||||||||||||
Net income | 366 | 1,207 | 769 | (1,370) | 972 | ||||||||||||
Net income attributable to noncontrolling interests | - | - | (718) | 112 | (606) | ||||||||||||
Net income attributable to Newmont stockholders | $ | 366 | $ | 1,207 | $ | 51 | $ | (1,258) | $ | 366 | |||||||
Comprehensive income | $ | (90) | $ | 1,093 | $ | 706 | $ | (1,193) | $ | 516 | |||||||
Comprehensive income attributable to noncontrolling interests | - | - | (718) | 112 | (606) | ||||||||||||
Comprehensive income attributable to Newmont stockholders | $ | (90) | $ | 1,093 | $ | (12) | $ | (1,081) | $ | (90) |
For the Year Ended December 31, 2010 | |||||||||||||||||
Newmont | |||||||||||||||||
Newmont | Mining | ||||||||||||||||
Mining | Newmont | Other | Corporation | ||||||||||||||
Condensed Consolidating Statement of Income and Comprehensive Income | Corporation | USA | Subsidiaries | Eliminations | Consolidated | ||||||||||||
Sales | $ | - | $ | 1,650 | $ | 7,890 | $ | - | $ | 9,540 | |||||||
Costs and expenses | |||||||||||||||||
Costs applicable to sales (1) | - | 962 | 2,522 | - | 3,484 | ||||||||||||
Amortization | - | 193 | 753 | (1) | 945 | ||||||||||||
Reclamation and remediation | - | 13 | 52 | - | 65 | ||||||||||||
Exploration | - | 77 | 141 | - | 218 | ||||||||||||
Advanced projects, research and development | - | 32 | 185 | (1) | 216 | ||||||||||||
General and administrative | - | 6 | 172 | - | 178 | ||||||||||||
Write-down of property, plant and mine | |||||||||||||||||
development | - | 4 | 2 | - | 6 | ||||||||||||
Other expense, net | - | 33 | 226 | 2 | 261 | ||||||||||||
- | 1,320 | 4,053 | - | 5,373 | |||||||||||||
Other income (expense) | |||||||||||||||||
Other income, net | - | 2 | 107 | - | 109 | ||||||||||||
Interest income - intercompany | 161 | 23 | (11) | (173) | - | ||||||||||||
Interest expense - intercompany | (11) | - | (162) | 173 | - | ||||||||||||
Interest expense, net | (250) | (19) | (10) | - | (279) | ||||||||||||
(100) | 6 | (76) | - | (170) | |||||||||||||
Income before income and mining tax and other items | (100) | 336 | 3,761 | - | 3,997 | ||||||||||||
Income and mining tax expense | 479 | (64) | (1,271) | - | (856) | ||||||||||||
Equity income (loss) of affiliates | 1,926 | 776 | 282 | (2,981) | 3 | ||||||||||||
Income from continuing operations | 2,305 | 1,048 | 2,772 | (2,981) | 3,144 | ||||||||||||
Loss from discontinued operations | (28) | - | (28) | 28 | (28) | ||||||||||||
Net income | 2,277 | 1,048 | 2,744 | (2,953) | 3,116 | ||||||||||||
Net income attributable to noncontrolling interests | - | - | (992) | 153 | (839) | ||||||||||||
Net income attributable to Newmont stockholders | $ | 2,277 | $ | 1,048 | $ | 1,752 | $ | (2,800) | $ | 2,277 | |||||||
Comprehensive income | $ | 2,759 | $ | 1,098 | $ | 3,124 | $ | (3,381) | $ | 3,600 | |||||||
Comprehensive income attributable to noncontrolling interests | - | - | (994) | 153 | (841) | ||||||||||||
Comprehensive income attributable to Newmont stockholders | $ | 2,759 | $ | 1,098 | $ | 2,130 | $ | (3,228) | $ | 2,759 |
For the Year Ended December 31, 2011 | ||||||||||||||||||||||||||||
Newmont USA | Other Subsidiaries | Eliminations | ||||||||||||||||||||||||||
Condensed Consolidating Statement of Income | As Previously Presented | Change | As Currently Presented | As Previously Presented | Change | As Currently Presented | As Previously Presented | Change | As Currently Presented | |||||||||||||||||||
Sales | $ | 6,610 | $ | (4,468) | $ | 2,142 | $ | 3,748 | $ | 4,468 | $ | 8,216 | $ | - | $ | - | $ | - | ||||||||||
Costs and expenses | ||||||||||||||||||||||||||||
Costs applicable to sales | 2,358 | (1,386) | 972 | 1,570 | 1,348 | 2,918 | (38) | 38 | - | |||||||||||||||||||
Amortization | 651 | (467) | 184 | 386 | 467 | 853 | (1) | - | (1) | |||||||||||||||||||
Reclamation and remediation | 69 | (54) | 15 | 51 | 54 | 105 | - | - | - | |||||||||||||||||||
Exploration | 180 | (91) | 89 | 170 | 91 | 261 | - | - | - | |||||||||||||||||||
Advanced projects, research and development | 183 | (139) | 44 | 191 | 139 | 330 | (1) | - | (1) | |||||||||||||||||||
General and administrative | 156 | (67) | 89 | 2 | 107 | 109 | 40 | (40) | - | |||||||||||||||||||
Write-down of property, plant and mine | ||||||||||||||||||||||||||||
development | 4 | (2) | 2 | 2,080 | 2 | 2,082 | - | - | - | |||||||||||||||||||
Other expense, net | 166 | (127) | 39 | 99 | 125 | 224 | - | 2 | 2 | |||||||||||||||||||
3,767 | (2,333) | 1,434 | 4,549 | 2,333 | 6,882 | - | - | - | ||||||||||||||||||||
Other income (expense) | ||||||||||||||||||||||||||||
Other income, net | 115 | (101) | 14 | 76 | 88 | 164 | - | - | - | |||||||||||||||||||
Interest income - intercompany | 7 | 18 | 25 | 16 | (18) | (2) | (175) | - | (175) | |||||||||||||||||||
Interest expense - intercompany | - | - | - | (156) | - | (156) | 175 | - | 175 | |||||||||||||||||||
Interest expense, net | (16) | 8 | (8) | (9) | 5 | (4) | - | - | - | |||||||||||||||||||
106 | (75) | 31 | (73) | 75 | 2 | - | - | - | ||||||||||||||||||||
Income before income and mining tax and other items | 2,949 | (2,210) | 739 | (874) | 2,210 | 1,336 | - | - | - | |||||||||||||||||||
Income and mining tax expense | (1,033) | 837 | (196) | 121 | (837) | (716) | - | - | - | |||||||||||||||||||
Equity income (loss) of affiliates | (19) | 683 | 664 | 283 | 2 | 285 | (685) | (685) | (1,370) | |||||||||||||||||||
Income from continuing operations | 1,897 | (690) | 1,207 | (470) | 1,375 | 905 | (685) | (685) | (1,370) | |||||||||||||||||||
Loss from discontinued operations | 7 | (7) | - | (143) | 7 | (136) | - | - | - | |||||||||||||||||||
Net income | $ | 1,904 | $ | (697) | $ | 1,207 | $ | (613) | $ | 1,382 | $ | 769 | $ | (685) | $ | (685) | $ | (1,370) | ||||||||||
Net income attributable to noncontrolling interests | $ | (697) | $ | 697 | $ | - | $ | (21) | $ | (697) | $ | (718) | $ | 112 | $ | - | $ | 112 | ||||||||||
Net income attributable to Newmont stockholders | $ | 1,207 | $ | - | $ | 1,207 | $ | (634) | $ | 685 | $ | 51 | $ | (573) | $ | (685) | $ | (1,258) |
For the Year Ended December 31, 2010 | ||||||||||||||||||||||||||||
Newmont USA | Other Subsidiaries | Eliminations | ||||||||||||||||||||||||||
Condensed Consolidating Statement of Income | As Previously Presented | Change | As Revised | As Previously Presented | Change | As Revised | As Previously Presented | Change | As Revised | |||||||||||||||||||
Sales | $ | 6,568 | $ | (4,918) | $ | 1,650 | $ | 2,972 | $ | 4,918 | $ | 7,890 | $ | - | $ | - | $ | - | ||||||||||
Costs and expenses | ||||||||||||||||||||||||||||
Costs applicable to sales | 2,171 | (1,209) | 962 | 1,341 | 1,181 | 2,522 | (28) | 28 | - | |||||||||||||||||||
Amortization | 601 | (408) | 193 | 345 | 408 | 753 | (1) | - | (1) | |||||||||||||||||||
Reclamation and remediation | 48 | (35) | 13 | 17 | 35 | 52 | - | - | - | |||||||||||||||||||
Exploration | 131 | (54) | 77 | 87 | 54 | 141 | - | - | - | |||||||||||||||||||
Advanced projects, research and development | 110 | (78) | 32 | 107 | 78 | 185 | (1) | - | (1) | |||||||||||||||||||
General and administrative | 144 | (138) | 6 | 4 | 168 | 172 | 30 | (30) | - | |||||||||||||||||||
Write-down of property, plant and mine | ||||||||||||||||||||||||||||
development | 5 | (1) | 4 | 1 | 1 | 2 | - | - | - | |||||||||||||||||||
Other expense, net | 183 | (150) | 33 | 78 | 148 | 226 | - | 2 | 2 | |||||||||||||||||||
3,393 | (2,073) | 1,320 | 1,980 | 2,073 | 4,053 | - | - | - | ||||||||||||||||||||
Other income (expense) | ||||||||||||||||||||||||||||
Other income, net | 29 | (27) | 2 | 84 | 23 | 107 | - | - | - | |||||||||||||||||||
Interest income - intercompany | 7 | 16 | 23 | 5 | (16) | (11) | (173) | - | (173) | |||||||||||||||||||
Interest expense - intercompany | - | - | - | (162) | - | (162) | 173 | - | 173 | |||||||||||||||||||
Interest expense, net | (27) | 8 | (19) | (6) | (4) | (10) | - | - | - | |||||||||||||||||||
9 | (3) | 6 | (79) | 3 | (76) | - | - | - | ||||||||||||||||||||
Income before income and mining tax and other items | 3,184 | (2,848) | 336 | 913 | 2,848 | 3,761 | - | - | - | |||||||||||||||||||
Income and mining tax expense | (1,114) | 1,050 | (64) | (221) | (1,050) | (1,271) | - | - | - | |||||||||||||||||||
Equity income (loss) of affiliates | 2 | 774 | 776 | 281 | 1 | 282 | (2,206) | (775) | (2,981) | |||||||||||||||||||
Income from continuing operations | 2,072 | (1,024) | 1,048 | 973 | 1,799 | 2,772 | (2,206) | (775) | (2,981) | |||||||||||||||||||
Loss from discontinued operations | 2 | (2) | - | (30) | 2 | (28) | 28 | - | 28 | |||||||||||||||||||
Net income | $ | 2,074 | $ | (1,026) | $ | 1,048 | $ | 943 | $ | 1,801 | $ | 2,744 | $ | (2,178) | $ | (775) | $ | (2,953) | ||||||||||
Net income attributable to noncontrolling interests | $ | (1,026) | $ | 1,026 | $ | - | $ | 34 | $ | (1,026) | $ | (992) | $ | 153 | $ | - | $ | 153 | ||||||||||
Net income attributable to Newmont stockholders | $ | 1,048 | $ | - | $ | 1,048 | $ | 977 | $ | 775 | $ | 1,752 | $ | (2,025) | $ | (775) | $ | (2,800) |
For the Year Ended December 31, 2012 | ||||||||||||||||||
Newmont | ||||||||||||||||||
Newmont | Mining | |||||||||||||||||
Mining | Newmont | Other | Corporation | |||||||||||||||
Condensed Consolidating Statement of Cash Flows | Corporation | USA | Subsidiaries | Eliminations | Consolidated | |||||||||||||
Operating activities: | ||||||||||||||||||
Net income | $ | 1,809 | $ | 1,346 | $ | 1,723 | $ | (2,760) | $ | 2,118 | ||||||||
Adjustments | (1,797) | (338) | 732 | 2,746 | 1,343 | |||||||||||||
Net change in operating assets and liabilities | 142 | (245) | (970) | - | (1,073) | |||||||||||||
Net cash provided from (used in) continuing operations | 154 | 763 | 1,485 | (14) | 2,388 | |||||||||||||
Net cash used in discontinued operations | - | - | (16) | - | (16) | |||||||||||||
Net cash provided from (used in) operations | 154 | 763 | 1,469 | (14) | 2,372 | |||||||||||||
Investing activities: | ||||||||||||||||||
Additions to property, plant and mine development | - | (541) | (2,669) | - | (3,210) | |||||||||||||
Acquisitions, net | - | - | (25) | - | (25) | |||||||||||||
Sale of marketable securities | - | - | 210 | - | 210 | |||||||||||||
Purchases of marketable securities | - | - | (220) | - | (220) | |||||||||||||
Proceeds from sale of other assets | - | - | 41 | - | 41 | |||||||||||||
Other | - | - | (60) | - | (60) | |||||||||||||
Net cash used in investing activities | - | (541) | (2,723) | - | (3,264) | |||||||||||||
Financing activities: | ||||||||||||||||||
Proceeds from debt, net | 3,345 | - | 179 | - | 3,524 | |||||||||||||
Repayment of debt | (1,802) | (164) | (10) | - | (1,976) | |||||||||||||
Payment of conversion premium on debt | (172) | - | - | - | (172) | |||||||||||||
Net intercompany borrowings (repayments) | (854) | 274 | 580 | - | - | |||||||||||||
Proceeds from stock issuance, net | 24 | - | - | - | 24 | |||||||||||||
Acquisition of noncontrolling interests | - | - | (10) | - | (10) | |||||||||||||
Dividends paid to noncontrolling interests | - | - | (3) | - | (3) | |||||||||||||
Dividends paid to common stockholders | (695) | - | (14) | 14 | (695) | |||||||||||||
Other | - | - | (3) | - | (3) | |||||||||||||
Net cash provided from (used in) financing activities | (154) | 110 | 719 | 14 | 689 | |||||||||||||
Effect of exchange rate changes on cash | - | - | 4 | - | 4 | |||||||||||||
Net change in cash and cash equivalents | - | 332 | (531) | - | (199) | |||||||||||||
Cash and cash equivalents at beginning of period | - | 10 | 1,750 | - | 1,760 | |||||||||||||
Cash and cash equivalents at end of period | $ | - | $ | 342 | $ | 1,219 | $ | - | $ | 1,561 |
For the Year Ended December 31, 2011 | ||||||||||||||||||
Newmont | ||||||||||||||||||
Newmont | Mining | |||||||||||||||||
Mining | Newmont | Other | Corporation | |||||||||||||||
Condensed Consolidating Statement of Cash Flows | Corporation | USA | Subsidiaries | Eliminations | Consolidated | |||||||||||||
Operating activities: | ||||||||||||||||||
Net income (loss) | $ | 366 | $ | 1,207 | $ | 769 | $ | (1,370) | $ | 972 | ||||||||
Adjustments | (301) | (319) | 2,252 | 1,298 | 2,930 | |||||||||||||
Net change in operating assets and liabilities | (102) | 14 | (223) | - | (311) | |||||||||||||
Net cash provided from (used in) continuing operations | (37) | 902 | 2,798 | (72) | 3,591 | |||||||||||||
Net cash used in discontinued operations | - | - | (7) | - | (7) | |||||||||||||
Net cash provided from (used in) operations | (37) | 902 | 2,791 | (72) | 3,584 | |||||||||||||
Investing activities: | ||||||||||||||||||
Additions to property, plant and mine development | - | (425) | (2,362) | - | (2,787) | |||||||||||||
Acquisitions, net | - | - | (2,309) | - | (2,309) | |||||||||||||
Sale of marketable securities | - | - | 81 | - | 81 | |||||||||||||
Purchases of marketable securities | - | - | (21) | - | (21) | |||||||||||||
Proceeds from sale of other assets | - | - | 9 | - | 9 | |||||||||||||
Advance to affiliate | - | (2,525) | - | 2,525 | - | |||||||||||||
Other | - | - | (40) | - | (40) | |||||||||||||
Net cash used in investing activities | - | (2,950) | (4,642) | 2,525 | (5,067) | |||||||||||||
Financing activities: | ||||||||||||||||||
Proceeds from debt, net | 2,034 | - | (23) | - | 2,011 | |||||||||||||
Repayment of debt | (2,008) | (253) | (12) | - | (2,273) | |||||||||||||
Net intercompany borrowings (repayments) | 465 | - | 2,094 | (2,559) | - | |||||||||||||
Proceeds from stock issuance, net | 40 | - | - | - | 40 | |||||||||||||
Dividends paid to noncontrolling interests | - | - | (151) | 34 | (117) | |||||||||||||
Dividends paid to common stockholders | (494) | - | (72) | 72 | (494) | |||||||||||||
Other | - | - | (21) | - | (21) | |||||||||||||
Net cash provided from (used in) financing activities | 37 | (253) | 1,815 | (2,453) | (854) | |||||||||||||
Effect of exchange rate changes on cash | - | - | 41 | - | 41 | |||||||||||||
Net change in cash and cash equivalents | - | (2,301) | 5 | - | (2,296) | |||||||||||||
Cash and cash equivalents at beginning of period | - | 2,311 | 1,745 | - | 4,056 | |||||||||||||
Cash and cash equivalents at end of period | $ | - | $ | 10 | $ | 1,750 | $ | - | $ | 1,760 |
For the Year Ended December 31, 2010 | ||||||||||||||||||
Newmont | ||||||||||||||||||
Newmont | Mining | |||||||||||||||||
Mining | Newmont | Other | Corporation | |||||||||||||||
Condensed Consolidating Statement of Cash Flows | Corporation | USA | Subsidiaries | Eliminations | Consolidated | |||||||||||||
Operating activities: | ||||||||||||||||||
Net income (loss) | $ | 2,277 | $ | 1,048 | $ | 2,744 | $ | (2,953) | $ | 3,116 | ||||||||
Adjustments | (2,526) | (434) | 829 | 2,949 | 818 | |||||||||||||
Net change in operating assets and liabilities | (57) | 96 | (793) | - | (754) | |||||||||||||
Net cash provided from (used in) continuing operations | (306) | 710 | 2,780 | (4) | 3,180 | |||||||||||||
Net cash used in discontinued operations | - | - | (13) | - | (13) | |||||||||||||
Net cash provided from (used in) operations | (306) | 710 | 2,767 | (4) | 3,167 | |||||||||||||
Investing activities: | ||||||||||||||||||
Additions to property, plant and mine development | - | (254) | (1,148) | - | (1,402) | |||||||||||||
Acquisitions, net | - | - | (4) | - | (4) | |||||||||||||
Sale of marketable securities | - | - | 3 | - | 3 | |||||||||||||
Purchases of marketable securities | - | - | (28) | - | (28) | |||||||||||||
Proceeds from sale of other assets | - | 1 | 55 | - | 56 | |||||||||||||
Other | - | - | (44) | - | (44) | |||||||||||||
Net cash used in investing activities | - | (253) | (1,166) | - | (1,419) | |||||||||||||
Financing activities: | ||||||||||||||||||
Repayment of debt | - | (24) | (406) | - | (430) | |||||||||||||
Net intercompany borrowings (repayments) | 484 | 52 | (372) | (164) | - | |||||||||||||
Proceeds from stock issuance, net | 60 | - | - | - | 60 | |||||||||||||
Sale of noncontrolling interests | - | - | 229 | - | 229 | |||||||||||||
Acquisition of noncontrolling interests | - | - | (110) | - | (110) | |||||||||||||
Dividends paid to noncontrolling interests | - | - | (598) | 136 | (462) | |||||||||||||
Dividends paid to common stockholders | (246) | - | (32) | 32 | (246) | |||||||||||||
Other | - | (1) | 45 | - | 44 | |||||||||||||
Net cash provided from (used in) financing activities | 298 | 27 | (1,244) | 4 | (915) | |||||||||||||
Effect of exchange rate changes on cash | - | - | 8 | - | 8 | |||||||||||||
Net change in cash and cash equivalents | (8) | 484 | 365 | - | 841 | |||||||||||||
Cash and cash equivalents at beginning of period | 8 | 1,827 | 1,380 | - | 3,215 | |||||||||||||
Cash and cash equivalents at end of period | $ | - | $ | 2,311 | $ | 1,745 | $ | - | $ | 4,056 |
At December 31, 2011 | |||||||||||||||||||||||||||||||||||||||
Newmont Mining Corporation | Newmont USA | Other Subsidiaries | Eliminations | ||||||||||||||||||||||||||||||||||||
Condensed Consolidating Statement of Cash Flows | As Previously Presented | Change | As Revised | As Previously Presented | Change | As Revised | As Previously Presented | Change | As Revised | As Previously Presented | Change | As Revised | |||||||||||||||||||||||||||
Operating activities: | |||||||||||||||||||||||||||||||||||||||
Net income (loss) | $ | 366 | $ | - | $ | 366 | $ | 1,904 | $ | (697) | $ | 1,207 | $ | (613) | $ | 1,382 | $ | 769 | $ | (685) | $ | (685) | $ | (1,370) | |||||||||||||||
Adjustments | 131 | (432) | (301) | 624 | (943) | (319) | 1,490 | 762 | 2,252 | 685 | 613 | 1,298 | |||||||||||||||||||||||||||
Net change in operating assets and liabilities | (102) | - | (102) | (18) | 32 | 14 | (191) | (32) | (223) | - | - | - | |||||||||||||||||||||||||||
Net cash provided from (used in) continuing operations | 395 | (432) | (37) | 2,510 | (1,608) | 902 | 686 | 2,112 | 2,798 | - | (72) | (72) | |||||||||||||||||||||||||||
Net cash used in discontinued operations | - | - | - | - | - | - | (7) | - | (7) | - | - | - | |||||||||||||||||||||||||||
Net cash provided from (used in) operations | 395 | (432) | (37) | 2,510 | (1,608) | 902 | 679 | 2,112 | 2,791 | - | (72) | (72) | |||||||||||||||||||||||||||
Investing activities: | |||||||||||||||||||||||||||||||||||||||
Additions to property, plant and mine development | - | - | - | (1,853) | 1,428 | (425) | (934) | (1,428) | (2,362) | - | - | - | |||||||||||||||||||||||||||
Acquisitions, net | - | - | - | - | - | - | (2,309) | - | (2,309) | - | - | - | |||||||||||||||||||||||||||
Sale of marketable securities | - | - | - | 65 | (65) | - | 16 | 65 | 81 | - | - | - | |||||||||||||||||||||||||||
Purchases of marketable securities | - | - | - | (3) | 3 | - | (18) | (3) | (21) | - | - | - | |||||||||||||||||||||||||||
Proceeds from sale of other assets | - | - | - | (55) | 55 | - | 64 | (55) | 9 | - | - | - | |||||||||||||||||||||||||||
Advance to affiliate | - | - | - | - | (2,525) | (2,525) | - | - | - | - | 2,525 | 2,525 | |||||||||||||||||||||||||||
Other | - | - | - | - | - | - | (40) | - | (40) | - | - | - | |||||||||||||||||||||||||||
Net cash used in investing activities | - | - | - | (1,846) | (1,104) | (2,950) | (3,221) | (1,421) | (4,642) | - | 2,525 | 2,525 | |||||||||||||||||||||||||||
Financing activities: | |||||||||||||||||||||||||||||||||||||||
Net borrowings (repayments) | 26 | - | 26 | (278) | 25 | (253) | (10) | (25) | (35) | - | - | - | |||||||||||||||||||||||||||
Net intercompany borrowings (repayments) | 33 | 432 | 465 | (2,559) | 2,559 | - | 2,560 | (466) | 2,094 | (34) | (2,525) | (2,559) | |||||||||||||||||||||||||||
Proceeds from stock issuance, net | 40 | - | 40 | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Dividends paid to noncontrolling interests | - | - | - | (151) | 151 | - | - | (151) | (151) | 34 | - | 34 | |||||||||||||||||||||||||||
Dividends paid to common stockholders | (494) | - | (494) | - | - | - | - | (72) | (72) | - | 72 | 72 | |||||||||||||||||||||||||||
Other | - | - | - | (24) | 24 | - | 3 | (24) | (21) | - | - | - | |||||||||||||||||||||||||||
Net cash provided from (used in) financing activities | (395) | 432 | 37 | (3,012) | 2,759 | (253) | 2,553 | (738) | 1,815 | - | (2,453) | (2,453) | |||||||||||||||||||||||||||
Effect of exchange rate changes on cash | - | - | - | (3) | 3 | - | 44 | (3) | 41 | - | - | - | |||||||||||||||||||||||||||
Net change in cash and cash equivalents | - | - | - | (2,351) | 50 | (2,301) | 55 | (50) | 5 | - | - | - | |||||||||||||||||||||||||||
Cash and cash equivalents at beginning of period | - | - | - | 3,877 | (1,566) | 2,311 | 179 | 1,566 | 1,745 | - | - | - | |||||||||||||||||||||||||||
Cash and cash equivalents at end of period | $ | - | $ | - | $ | - | $ | 1,526 | $ | (1,516) | $ | 10 | $ | 234 | $ | 1,516 | $ | 1,750 | $ | - | $ | - | $ | - |
At December 31, 2010 | |||||||||||||||||||||||||||||||||||||||
Newmont Mining Corporation | Newmont USA | Other Subsidiaries | Eliminations | ||||||||||||||||||||||||||||||||||||
Condensed Consolidating Statement of Cash Flows | As Previously Presented | Change | As Revised | As Previously Presented | Change | As Revised | As Previously Presented | Change | As Revised | As Previously Presented | Change | As Revised | |||||||||||||||||||||||||||
Operating activities: | |||||||||||||||||||||||||||||||||||||||
Net income (loss) | $ | 2,277 | $ | - | $ | 2,277 | $ | 2,074 | $ | (1,026) | $ | 1,048 | $ | 943 | $ | 1,801 | $ | 2,744 | $ | (2,178) | $ | (775) | $ | (2,953) | |||||||||||||||
Adjustments | (600) | (1,926) | (2,526) | 865 | (1,299) | (434) | (1,625) | 2,454 | 829 | 2,178 | 771 | 2,949 | |||||||||||||||||||||||||||
Net change in operating assets and liabilities | (57) | - | (57) | (512) | 608 | 96 | (185) | (608) | (793) | - | - | - | |||||||||||||||||||||||||||
Net cash provided from (used in) continuing operations | 1,620 | (1,926) | (306) | 2,427 | (1,717) | 710 | (867) | 3,647 | 2,780 | - | (4) | (4) | |||||||||||||||||||||||||||
Net cash used in discontinued operations | - | - | - | (13) | 13 | - | - | (13) | (13) | - | - | - | |||||||||||||||||||||||||||
Net cash provided from (used in) operations | 1,620 | (1,926) | (306) | 2,414 | (1,704) | 710 | (867) | 3,634 | 2,767 | - | (4) | (4) | |||||||||||||||||||||||||||
Investing activities: | |||||||||||||||||||||||||||||||||||||||
Additions to property, plant and mine development | - | - | - | (721) | 467 | (254) | (681) | (467) | (1,148) | - | - | - | |||||||||||||||||||||||||||
Acquisitions, net | - | - | - | - | - | - | (4) | - | (4) | - | - | - | |||||||||||||||||||||||||||
Sale of marketable securities | - | - | - | - | - | - | 3 | - | 3 | - | - | - | |||||||||||||||||||||||||||
Purchases of marketable securities | - | - | - | (5) | 5 | - | (23) | (5) | (28) | - | - | - | |||||||||||||||||||||||||||
Proceeds from sale of other assets | - | - | - | 16 | (15) | 1 | 40 | 15 | 55 | - | - | - | |||||||||||||||||||||||||||
Other | - | - | - | - | - | - | (44) | - | (44) | - | - | - | |||||||||||||||||||||||||||
Net cash used in investing activities | - | - | - | (710) | 457 | (253) | (709) | (457) | (1,166) | - | - | - | |||||||||||||||||||||||||||
Financing activities: | |||||||||||||||||||||||||||||||||||||||
Net borrowings (repayments) | - | - | - | (420) | 396 | (24) | (10) | (396) | (406) | - | - | - | |||||||||||||||||||||||||||
Net intercompany borrowings (repayments) | (1,442) | 1,926 | 484 | (152) | 204 | 52 | 1,730 | (2,102) | (372) | (136) | (28) | (164) | |||||||||||||||||||||||||||
Proceeds from stock issuance, net | 60 | - | 60 | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Sale of noncontrolling interests | - | - | - | 229 | (229) | - | - | 229 | 229 | - | - | - | |||||||||||||||||||||||||||
Acquisition of noncontrolling interests | - | - | - | - | - | - | (110) | - | (110) | - | - | - | |||||||||||||||||||||||||||
Dividends paid to noncontrolling interests | - | - | - | (598) | 598 | - | - | (598) | (598) | 136 | - | 136 | |||||||||||||||||||||||||||
Dividends paid to common stockholders | (246) | - | (246) | - | - | - | - | (32) | (32) | - | 32 | 32 | |||||||||||||||||||||||||||
Other | - | - | - | 46 | (47) | (1) | (2) | 47 | 45 | - | - | - | |||||||||||||||||||||||||||
Net cash provided from (used in) financing activities | (1,628) | 1,926 | 298 | (895) | 922 | 27 | 1,608 | (2,852) | (1,244) | - | 4 | 4 | |||||||||||||||||||||||||||
Effect of exchange rate changes on cash | - | - | - | 1 | (1) | - | 7 | 1 | 8 | - | - | - | |||||||||||||||||||||||||||
Net change in cash and cash equivalents | (8) | - | (8) | 810 | (326) | 484 | 39 | 326 | 365 | - | - | - | |||||||||||||||||||||||||||
Cash and cash equivalents at beginning of period | 8 | - | 8 | 3,067 | (1,240) | 1,827 | 140 | 1,240 | 1,380 | - | - | - | |||||||||||||||||||||||||||
Cash and cash equivalents at end of period | $ | - | $ | - | $ | - | $ | 3,877 | $ | (1,566) | $ | 2,311 | $ | 179 | $ | 1,566 | $ | 1,745 | $ | - | $ | - | $ | - |
At December 31, 2012 | |||||||||||||||||
Newmont | |||||||||||||||||
Newmont | Mining | ||||||||||||||||
Mining | Newmont | Other | Corporation | ||||||||||||||
Condensed Consolidating Balance Sheet | Corporation | USA | Subsidiaries | Eliminations | Consolidated | ||||||||||||
Assets | |||||||||||||||||
Cash and cash equivalents | $ | - | $ | 342 | $ | 1,219 | $ | - | $ | 1,561 | |||||||
Trade receivables | - | 23 | 260 | - | 283 | ||||||||||||
Accounts receivable | 20 | 10 | 547 | - | 577 | ||||||||||||
Intercompany receivable | 2,748 | 7,052 | 5,857 | (15,657) | - | ||||||||||||
Investments | 58 | 7 | 21 | - | 86 | ||||||||||||
Inventories | - | 104 | 692 | - | 796 | ||||||||||||
Stockpiles and ore on leach pads | - | 215 | 571 | - | 786 | ||||||||||||
Deferred income tax assets | - | 109 | 153 | (67) | 195 | ||||||||||||
Other current assets | - | 46 | 1,615 | - | 1,661 | ||||||||||||
Current assets | 2,826 | 7,908 | 10,935 | (15,724) | 5,945 | ||||||||||||
Property, plant and mine development, net | - | 2,187 | 15,860 | (37) | 18,010 | ||||||||||||
Investments | - | 6 | 1,440 | - | 1,446 | ||||||||||||
Investments in subsidiaries | 16,599 | 6,041 | 3,115 | (25,755) | - | ||||||||||||
Stockpiles and ore on leach pads | - | 401 | 2,495 | - | 2,896 | ||||||||||||
Deferred income tax assets | 791 | 146 | 685 | (1,141) | 481 | ||||||||||||
Long-term intercompany receivable | 3,907 | 45 | 564 | (4,516) | - | ||||||||||||
Other long-term assets | 52 | 158 | 662 | - | 872 | ||||||||||||
Total assets | $ | 24,175 | $ | 16,892 | $ | 35,756 | $ | (47,173) | $ | 29,650 | |||||||
Liabilities | |||||||||||||||||
Debt | $ | - | $ | - | $ | 10 | $ | - | $ | 10 | |||||||
Accounts payable | - | 78 | 579 | - | 657 | ||||||||||||
Intercompany payable | 3,969 | 5,743 | 5,945 | (15,657) | - | ||||||||||||
Employee-related benefits | - | 149 | 190 | - | 339 | ||||||||||||
Income and mining taxes | - | 16 | 35 | - | 51 | ||||||||||||
Other current liabilities | 71 | 147 | 1,866 | - | 2,084 | ||||||||||||
Current liabilities | 4,040 | 6,133 | 8,625 | (15,657) | 3,141 | ||||||||||||
Debt | 6,069 | 1 | 218 | - | 6,288 | ||||||||||||
Reclamation and remediation liabilities | - | 147 | 1,310 | - | 1,457 | ||||||||||||
Deferred income tax liabilities | - | 20 | 2,044 | (1,206) | 858 | ||||||||||||
Employee-related benefits | 5 | 384 | 197 | - | 586 | ||||||||||||
Long-term intercompany payable | 381 | - | 4,172 | (4,553) | - | ||||||||||||
Other long-term liabilities | - | 11 | 361 | - | 372 | ||||||||||||
Total liabilities | 10,495 | 6,696 | 16,927 | (21,416) | 12,702 | ||||||||||||
Equity | |||||||||||||||||
Newmont stockholders’ equity | 13,680 | 10,196 | 13,782 | (23,885) | 13,773 | ||||||||||||
Noncontrolling interests | - | - | 5,047 | (1,872) | 3,175 | ||||||||||||
Total equity | 13,680 | 10,196 | 18,829 | (25,757) | 16,948 | ||||||||||||
Total liabilities and equity | $ | 24,175 | $ | 16,892 | $ | 35,756 | $ | (47,173) | $ | 29,650 | |||||||
At December 31, 2011 | |||||||||||||||||
Newmont | |||||||||||||||||
Newmont | Mining | ||||||||||||||||
Mining | Newmont | Other | Corporation | ||||||||||||||
Condensed Consolidating Balance Sheet | Corporation | USA | Subsidiaries | Eliminations | Consolidated | ||||||||||||
Assets | |||||||||||||||||
Cash and cash equivalents | $ | - | $ | 10 | $ | 1,750 | $ | - | $ | 1,760 | |||||||
Trade receivables | - | 28 | 272 | - | 300 | ||||||||||||
Accounts receivable | - | - | 320 | - | 320 | ||||||||||||
Intercompany receivable | 1,415 | 5,903 | 4,617 | (11,935) | - | ||||||||||||
Investments | 72 | - | 22 | - | 94 | ||||||||||||
Inventories | - | 117 | 597 | - | 714 | ||||||||||||
Stockpiles and ore on leach pads | - | 187 | 484 | - | 671 | ||||||||||||
Deferred income tax assets | 134 | 111 | 151 | - | 396 | ||||||||||||
Other current assets | - | 29 | 1,104 | - | 1,133 | ||||||||||||
Current assets | 1,621 | 6,385 | 9,317 | (11,935) | 5,388 | ||||||||||||
Property, plant and mine development, net | - | 1,858 | 14,049 | (26) | 15,881 | ||||||||||||
Investments | - | 14 | 1,458 | - | 1,472 | ||||||||||||
Investments in subsidiaries | 14,863 | 5,662 | 2,838 | (23,363) | - | ||||||||||||
Stockpiles and ore on leach pads | - | 307 | 1,964 | - | 2,271 | ||||||||||||
Deferred income tax assets | 708 | 212 | 685 | (1,363) | 242 | ||||||||||||
Long-term intercompany receivable | 3,388 | 73 | 745 | (4,206) | - | ||||||||||||
Other long-term assets | 35 | 112 | 710 | - | 857 | ||||||||||||
Total assets | $ | 20,615 | $ | 14,623 | $ | 31,766 | $ | (40,893) | $ | 26,111 | |||||||
Liabilities | |||||||||||||||||
Debt | $ | 514 | $ | 165 | $ | 10 | $ | - | $ | 689 | |||||||
Accounts payable | - | 83 | 478 | - | 561 | ||||||||||||
Intercompany payable | 2,698 | 4,695 | 4,542 | (11,935) | - | ||||||||||||
Employee-related benefits | - | 137 | 170 | - | 307 | ||||||||||||
Income and mining taxes | - | 10 | 240 | - | 250 | ||||||||||||
Other current liabilities | 450 | 159 | 1,524 | - | 2,133 | ||||||||||||
Current liabilities | 3,662 | 5,249 | 6,964 | (11,935) | 3,940 | ||||||||||||
Debt | 3,578 | 1 | 45 | - | 3,624 | ||||||||||||
Reclamation and remediation liabilities | - | 127 | 1,042 | - | 1,169 | ||||||||||||
Deferred income tax liabilities | - | 21 | 2,126 | (1,363) | 784 | ||||||||||||
Employee-related benefits | 5 | 291 | 163 | - | 459 | ||||||||||||
Long-term intercompany | 567 | - | 3,639 | (4,206) | - | ||||||||||||
Other long-term liabilities | - | 18 | 372 | (26) | 364 | ||||||||||||
Total liabilities | 7,812 | 5,707 | 14,351 | (17,530) | 10,340 | ||||||||||||
Equity | |||||||||||||||||
Newmont stockholders’ equity | 12,803 | 8,916 | 12,781 | (21,604) | 12,896 | ||||||||||||
Noncontrolling interests | - | - | 4,634 | (1,759) | 2,875 | ||||||||||||
Total equity | 12,803 | 8,916 | 17,415 | (23,363) | 15,771 | ||||||||||||
Total liabilities and equity | $ | 20,615 | $ | 14,623 | $ | 31,766 | $ | (40,893) | $ | 26,111 | |||||||
At December 31, 2011 | |||||||||||||||||||||||||||||||||||||
Newmont Mining Corporation | Newmont USA | Other Subsidiaries | Eliminations | ||||||||||||||||||||||||||||||||||
Condensed Consolidating Balance Sheet | As Previously Presented | Change | As Revised | As Previously Presented | Change | As Revised | As Previously Presented | Change | As Revised | As Previously Presented | Change | As Revised | |||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | - | $ | - | $ | - | $ | 1,526 | $ | (1,516) | $ | 10 | $ | 234 | $ | 1,516 | $ | 1,750 | $ | - | $ | - | $ | - | |||||||||||||
Trade receivables | - | - | - | 205 | (177) | 28 | 95 | 177 | 272 | - | - | - | |||||||||||||||||||||||||
Accounts receivable | 1,415 | - | 1,415 | 3,447 | 2,456 | 5,903 | 264 | 4,673 | 4,937 | (4,806) | (7,129) | (11,935) | |||||||||||||||||||||||||
Investments | 72 | - | 72 | - | - | - | 22 | - | 22 | - | - | - | |||||||||||||||||||||||||
Inventories | - | - | - | 333 | (216) | 117 | 381 | 216 | 597 | - | - | - | |||||||||||||||||||||||||
Stockpiles and ore on leach pads | - | - | - | 532 | (345) | 187 | 139 | 345 | 484 | - | - | - | |||||||||||||||||||||||||
Deferred income tax assets | 134 | - | 134 | 257 | (146) | 111 | 5 | 146 | 151 | - | - | - | |||||||||||||||||||||||||
Other current assets | - | - | - | 91 | (62) | 29 | 1,042 | 62 | 1,104 | - | - | - | |||||||||||||||||||||||||
Current assets | 1,621 | - | 1,621 | 6,391 | (6) | 6,385 | 2,182 | 7,135 | 9,317 | (4,806) | (7,129) | (11,935) | |||||||||||||||||||||||||
Property, plant and mine development, net | - | - | - | 6,917 | (5,059) | 1,858 | 8,990 | 5,059 | 14,049 | (26) | - | (26) | |||||||||||||||||||||||||
Investments | - | - | - | 29 | (15) | 14 | 1,443 | 15 | 1,458 | - | - | - | |||||||||||||||||||||||||
Investments in subsidiaries | 14,675 | 188 | 14,863 | 43 | 5,619 | 5,662 | 2,825 | 13 | 2,838 | (17,543) | (5,820) | (23,363) | |||||||||||||||||||||||||
Stockpiles and ore on leach pads | - | - | - | 1,641 | (1,334) | 307 | 630 | 1,334 | 1,964 | - | - | - | |||||||||||||||||||||||||
Deferred income tax assets (1) | 708 | - | 708 | 838 | (626) | 212 | 59 | 626 | 685 | - | (1,363) | (1,363) | |||||||||||||||||||||||||
Other long-term assets | 3,423 | - | 3,423 | 641 | (456) | 185 | 927 | 528 | 1,455 | (4,134) | (72) | (4,206) | |||||||||||||||||||||||||
Total assets | $ | 20,427 | $ | 188 | $ | 20,615 | $ | 16,500 | $ | (1,877) | $ | 14,623 | $ | 17,056 | $ | 14,710 | $ | 31,766 | $ | (26,509) | $ | (14,384) | $ | (40,893) | |||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||||||
Debt | $ | 514 | $ | - | $ | 514 | $ | 165 | $ | - | $ | 165 | $ | 10 | $ | - | $ | 10 | $ | - | $ | - | $ | - | |||||||||||||
Accounts payable | 2,698 | - | 2,698 | 1,327 | 3,451 | 4,778 | 1,343 | 3,677 | 5,020 | (4,807) | (7,128) | (11,935) | |||||||||||||||||||||||||
Employee-related benefits | - | - | - | 222 | (85) | 137 | 85 | 85 | 170 | - | - | - | |||||||||||||||||||||||||
Income and mining taxes | - | - | - | 45 | (35) | 10 | 205 | 35 | 240 | - | - | - | |||||||||||||||||||||||||
Other current liabilities | 450 | - | 450 | 459 | (300) | 159 | 3,186 | (1,662) | 1,524 | (1,962) | 1,962 | - | |||||||||||||||||||||||||
Current liabilities | 3,662 | - | 3,662 | 2,218 | 3,031 | 5,249 | 4,829 | 2,135 | 6,964 | (6,769) | (5,166) | (11,935) | |||||||||||||||||||||||||
Debt | 3,578 | - | 3,578 | 1 | - | 1 | 45 | - | 45 | - | - | - | |||||||||||||||||||||||||
Reclamation and remediation liabilities | - | - | - | 809 | (682) | 127 | 360 | 682 | 1,042 | - | - | - | |||||||||||||||||||||||||
Deferred income tax liabilities (1) | - | - | - | 732 | (711) | 21 | 1,415 | 711 | 2,126 | - | (1,363) | (1,363) | |||||||||||||||||||||||||
Employee-related benefits | 5 | - | 5 | 355 | (64) | 291 | 99 | 64 | 163 | - | - | - | |||||||||||||||||||||||||
Other long-term liabilities | 567 | - | 567 | 61 | (43) | 18 | 3,895 | 116 | 4,011 | (4,159) | (73) | (4,232) | |||||||||||||||||||||||||
Total liabilities | 7,812 | - | 7,812 | 4,176 | 1,531 | 5,707 | 10,643 | 3,708 | 14,351 | (10,928) | (6,602) | (17,530) | |||||||||||||||||||||||||
Equity | |||||||||||||||||||||||||||||||||||||
Newmont stockholders’ equity | 12,615 | 188 | 12,803 | 8,916 | - | 8,916 | 5,187 | 7,594 | 12,781 | (13,822) | (7,782) | (21,604) | |||||||||||||||||||||||||
Noncontrolling interests | - | - | - | 3,408 | (3,408) | - | 1,226 | 3,408 | 4,634 | (1,759) | - | (1,759) | |||||||||||||||||||||||||
Total equity | 12,615 | 188 | 12,803 | 12,324 | (3,408) | 8,916 | 6,413 | 11,002 | 17,415 | (15,581) | (7,782) | (23,363) | |||||||||||||||||||||||||
Total liabilities and stockholders' equity | $ | 20,427 | $ | 188 | $ | 20,615 | $ | 16,500 | $ | (1,877) | $ | 14,623 | $ | 17,056 | $ | 14,710 | $ | 31,766 | $ | (26,509) | $ | (14,384) | $ | (40,893) | |||||||||||||
(1) | Revision of deferred income taxes includes a presentation adjustment to conform to the guidance outlined in ASC 740, see Note 8 Income and Mining taxes for additional information. |
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NOTE ##SuppNote UNAUDITED SUPPLEMENTARY DATA | ||||||||||||||
Quarterly Data | ||||||||||||||
The following is a summary of selected quarterly financial information (unaudited): | ||||||||||||||
2012 | ||||||||||||||
Three Months Ended | ||||||||||||||
March 31 | June 30 | September 30 | December 31 | |||||||||||
Sales | $ | 2,683 | $ | 2,229 | $ | 2,480 | $ | 2,476 | ||||||
Gross profit(1) | $ | 1,419 | $ | 963 | $ | 1,103 | $ | 1,017 | ||||||
Income from continuing operations(2) | $ | 561 | $ | 279 | $ | 400 | $ | 645 | ||||||
Gain (loss) from discontinued operations(2) | (71) | - | (33) | 28 | ||||||||||
Net income (2) | $ | 490 | $ | 279 | $ | 367 | $ | 673 | ||||||
Income (loss) per common share | ||||||||||||||
Basic: | ||||||||||||||
Continuing operations | $ | 1.13 | $ | 0.56 | $ | 0.81 | $ | 1.30 | ||||||
Discontinued operations | (0.14) | - | (0.07) | 0.06 | ||||||||||
$ | 0.99 | $ | 0.56 | $ | 0.74 | $ | 1.36 | |||||||
Diluted: | ||||||||||||||
Continuing operations | $ | 1.11 | $ | 0.56 | $ | 0.81 | $ | 1.30 | ||||||
Discontinued operations | (0.14) | - | (0.07) | 0.06 | ||||||||||
$ | 0.97 | $ | 0.56 | $ | 0.74 | $ | 1.36 | |||||||
Weighted average common shares (millions) | ||||||||||||||
Basic | 495 | 496 | 496 | 497 | ||||||||||
Diluted | 504 | 498 | 499 | 499 | ||||||||||
Cash dividends declared per common share | $ | 0.35 | $ | 0.35 | $ | 0.35 | $ | 0.35 | ||||||
Closing price of common stock | $ | 51.27 | $ | 48.51 | $ | 56.02 | $ | 46.44 | ||||||
2011 | ||||||||||||||
Three Months Ended | ||||||||||||||
March 31 | June 30 | September 30 | December 31 | |||||||||||
Sales | $ | 2,465 | $ | 2,384 | $ | 2,744 | $ | 2,765 | ||||||
Gross profit(1) | $ | 1,255 | $ | 1,174 | $ | 1,460 | $ | 1,423 | ||||||
Income (loss) from continuing operations(2) | $ | 514 | $ | 523 | $ | 493 | $ | (1,028) | ||||||
Loss from discontinued operations(2) | - | (136) | - | - | ||||||||||
Net income (loss)(2) | $ | 514 | $ | 387 | $ | 493 | $ | (1,028) | ||||||
Income (loss) per common share | ||||||||||||||
Basic: | ||||||||||||||
Continuing operations | $ | 1.04 | $ | 1.06 | $ | 1.00 | $ | (2.08) | ||||||
Discontinued operations | - | (0.28) | - | - | ||||||||||
$ | 1.04 | $ | 0.78 | $ | 1.00 | $ | (2.08) | |||||||
Diluted: | ||||||||||||||
Continuing operations | $ | 1.03 | $ | 1.04 | $ | 0.98 | $ | (2.02) | ||||||
Discontinued operations | - | (0.27) | - | - | ||||||||||
$ | 1.03 | $ | 0.77 | $ | 0.98 | $ | (2.02) | |||||||
Weighted average common shares (millions) | ||||||||||||||
Basic | 493 | 494 | 494 | 495 | ||||||||||
Diluted | 501 | 501 | 504 | 510 | ||||||||||
Cash dividends declared per common share | $ | 0.15 | $ | 0.20 | $ | 0.30 | $ | 0.35 | ||||||
Closing price of common stock | $ | 54.58 | $ | 53.97 | $ | 62.95 | $ | 60.01 |
(1) Sales less Costs applicable to sales, Amortization and Reclamation and remediation.
(2) Attributable to Newmont stockholders.
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SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | |||||||||||
Years Ended December 31, | |||||||||||
2012 | 2011 | 2010 | |||||||||
(in millions) | |||||||||||
Deferred Income Tax Valuation Allowance | |||||||||||
Balance at January 1 | $ | 977 | $ | 435 | $ | 437 | |||||
Additions to deferred income tax expense | 762 | 723 | 22 | ||||||||
Reduction of deferred income tax expense | (103) | (149) | (24) | ||||||||
Valuation release to equity | (10) | (32) | - | ||||||||
Balance at December 31 | $ | 1,626 | $ | 977 | $ | 435 | |||||
See also Note ##IncTaxNote to the Consolidated Financial Statements. | |||||||||||
SCH-1 |
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