Edgar Filing: NEWMONT MINING CORP /DE/

Form 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

Form 10-Q

(Mark One)

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

For the Quarterly Period Ended September 30, 2008

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

For the transition period from to

Commission File Number: 001-31240

NEWMONT MINING CORPORATION

(Exact name of registrant as specified in its charter)


Delaware		84-1611629
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

1700 Lincoln Street Denver, Colorado		80203
(Address of Principal Executive Offices)		(Zip Code)

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

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

(Check one):


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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨ Yes x No

There were 441,450,516 shares of common stock outstanding on October 24, 2008 (and 12,842,261 exchangeable shares).

TABLE OF CONTENTS


		Page
	PART I
ITEM 1.	FINANCIAL STATEMENTS	1
	Condensed Consolidated Statements of Income (Loss)	1
	Condensed Consolidated Balance Sheets	2
	Condensed Consolidated Statements of Cash Flows	3
	Notes to Condensed Consolidated Financial Statements	4

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION	50
	Selected Financial and Operating Results	50
	Consolidated Financial Results	50
	Results of Consolidated Operations	57
	Liquidity and Capital Resources	67
	Environmental	71
	Recently Adopted Accounting Pronouncements	71
	Recently Issued Accounting Pronouncements and Developments	74
	Safe Harbor Statement	75

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	77

ITEM 4.	CONTROLS AND PROCEDURES	80

	PART II
ITEM 1.	LEGAL PROCEEDINGS	81

ITEM 1A.	RISK FACTORS	81

ITEM 2.	ISSUER PURCHASES OF EQUITY SECURITIES	82

ITEM 6.	EXHIBITS	82

SIGNATURES		83

EXHIBIT INDEX		84

PART I—FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS.

NEWMONT MINING CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(unaudited, in millions except per share)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2008			2007			2008			2007
Revenues
Sales—gold, net	$	1,302		$	1,069		$	4,152		$	3,016
Sales—copper, net		90			547			705			1,100

		1,392			1,616			4,857			4,116
Costs and expenses
Costs applicable to sales—gold ⁽¹⁾		722			587			2,018			1,803
Costs applicable to sales—copper ⁽¹⁾		88			105			342			356
Loss on settlement of price-capped forward sales contracts (Note 3)		—			—			—			531
Midas redevelopment (Note 4)		—			10			—			10
Amortization		189			167			555			532
Accretion (Note 22)		9			8			25			23
Exploration		57			47			155			132
Advanced projects, research and development		45			16			114			45
General and administrative		37			37			103			104
Write-down of investments (Note 16)		34			—			90			—
Other expense, net (Note 5)		73			42			254			170

		1,254			1,019			3,656			3,706

Other income (expense)
Other income, net (Note 6)		100			46			190			100
Interest expense, net of capitalized interest		(26	)		(28	)		(73	)		(77	)

		74			18			117			23

Income from continuing operations before income tax, minority interest and equity loss of affiliates		212			615			1,318			433
Income tax expense (Note 9)		(3	)		(86	)		(201	)		(111	)
Minority interest in income of consolidated subsidiaries (Note 10)		(31	)		(198	)		(291	)		(352	)
Equity loss of affiliates		(1	)		—			(6	)		—

Income (loss) from continuing operations		177			331			820			(30	)
Income (loss) from discontinued operations (Note 11)		19			66			23			(1,567	)

Net income (loss)	$	196		$	397		$	843		$	(1,597	)

Income (loss) per common share (Note 13)
Basic:
Income (loss) from continuing operations	$	0.39		$	0.73		$	1.81		$	(0.07	)
Income (loss) from discontinued operations		0.04			0.15			0.05			(3.47	)

Net income (loss)	$	0.43		$	0.88		$	1.86		$	(3.54	)

Diluted:
Income (loss) from continuing operations	$	0.39		$	0.73		$	1.80		$	(0.07	)
Income (loss) from discontinued operations		0.04			0.15			0.05			(3.47	)

Net income (loss)	$	0.43		$	0.88		$	1.85		$	(3.54	)

Basic weighted-average common shares outstanding		454			452			454			451

Diluted weighted-average common shares outstanding		455			453			456			451

Cash dividends declared per common share	$	0.10		$	0.10		$	0.30		$	0.30

⁽¹⁾	Exclusive of Loss on settlement of price-capped forward sales contracts, Midas redevelopment, Amortization and Accretion.

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

NEWMONT MINING CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited, in millions)


	At September 30, 2008		At December 31, 2007
ASSETS
Cash and cash equivalents	$	854	$	1,231
Marketable securities and other short-term investments (Note 16)		26		61
Trade receivables		162		177
Accounts receivable		160		168
Inventories (Note 17)		508		463
Stockpiles and ore on leach pads (Note 18)		335		373
Deferred income tax assets		104		112
Other current assets (Note 19)		476		87

Current assets		2,625		2,672
Property, plant and mine development, net		10,172		9,140
Investments (Note 16)		1,307		1,527
Long-term stockpiles and ore on leach pads (Note 18)		1,022		788
Deferred income tax assets		1,134		1,027
Other long-term assets (Note 19)		249		234
Goodwill		188		186
Assets of operations held for sale (Note 11)		1		24

Total assets	$	16,698	$	15,598

LIABILITIES
Current portion of long-term debt (Note 20)	$	142	$	255
Accounts payable		331		339
Employee-related benefits		175		153
Income and mining taxes		82		88
Other current liabilities (Note 21)		820		665

Current liabilities		1,550		1,500
Long-term debt (Note 20)		3,355		2,683
Reclamation and remediation liabilities (Note 22)		624		623
Deferred income tax liabilities		1,156		1,025
Employee-related benefits		192		226
Other long-term liabilities (Note 21)		182		150
Liabilities of operations held for sale (Note 11)		88		394

Total liabilities		7,147		6,601

Commitments and contingencies (Note 26)
Minority interest in subsidiaries		1,476		1,449

STOCKHOLDERS’ EQUITY
Common stock		704		696
Additional paid-in capital		6,624		6,696
Accumulated other comprehensive income		704		957
Retained earnings (deficit)		43		(801	)

Total stockholders’ equity		8,075		7,548

Total liabilities and stockholders’ equity	$	16,698	$	15,598

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

NEWMONT MINING CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in millions)


	Nine Months Ended September 30,
	2008			2007
Operating activities:
Net income (loss)	$	843		$	(1,597	)
Adjustments to reconcile net income (loss) to net cash from continuing operations:
Amortization		555			532
(Income) loss from discontinued operations (Note 11)		(23	)		1,567
Accretion of accumulated reclamation obligations (Note 22)		32			29
Deferred income taxes		(214	)		(268	)
Write-down of investments (Note 16)		90			—
Stock based compensation and other benefits		38			36
Minority interest in income of consolidated subsidiaries (Note 10)		291			352
Gain on asset sales, net		(70	)		(13	)
Reclamation estimate revisions (Note 5)		74			18
Other operating adjustments and write-downs		61			24
Net change in operating assets and liabilities (Note 23)		(503	)		(785	)

Net cash provided from (used in) continuing operations		1,174			(105	)
Net cash (used in) provided from discontinued operations (Note 11)		(111	)		98

Net cash provided from (used in) operations		1,063			(7	)

Investing activities:
Additions to property, plant and mine development		(1,355	)		(1,159	)
Investments in marketable debt and equity securities		(18	)		(240	)
Proceeds from sale of marketable debt and equity securities		50			208
Acquisitions, net (Note 15)		(325	)		—
Cash received on repayment of Batu Hijau carried interest (Note 10)		—			161
Other		26			25

Net cash used in investing activities of continuing operations		(1,622	)		(1,005	)
Net cash (used in) provided from investing activities of discontinued operations (Note 11)		(6	)		154

Net cash used in investing activities		(1,628	)		(851	)

Financing activities:
Proceeds from debt, net		2,801			2,728
Repayment of debt		(2,252	)		(1,651	)
Dividends paid to common stockholders		(136	)		(136	)
Dividends paid to minority interests		(247	)		(116	)
Proceeds from stock issuance		27			20
Purchase of Company share call options (Note 20)		—			(366	)
Issuance of Company share warrants (Note 20)		—			248
Change in restricted cash and other		19			7

Net cash provided from financing activities		212			734

Effect of exchange rate changes on cash		(24	)		11

Net change in cash and cash equivalents		(377	)		(113	)
Cash and cash equivalents at beginning of period		1,231			1,166

Cash and cash equivalents at end of period	$	854		$	1,053

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

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

NOTE 1 BASIS OF PRESENTATION

The interim Condensed Consolidated Financial Statements (“interim statements”) of Newmont Mining Corporation and its subsidiaries (collectively, “Newmont” or the “Company”) are unaudited. In the opinion of management, all adjustments and disclosures necessary for a fair presentation of these interim statements have been included. The results reported in these interim statements are not necessarily indicative of the results that may be reported for the entire year. These interim statements should be read in conjunction with Newmont’s Consolidated Financial Statements included in its Annual Report on Form 10-K for the year ended December 31, 2007, filed February 21, 2008. The year-end balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. generally accepted accounting principles (“GAAP”).

References to “A$” refer to Australian currency, “C$” to Canadian currency, “IDR” to Indonesian currency, “NZ$” to New Zealand currency and “$” to United States currency.

Certain amounts for the three and nine months ended September 30, 2007 have been reclassified to conform to the 2008 presentation. The Company reclassified the World Gold Council dues from General and administrative to Other expense, net, reclassified Accretion from Costs applicable to sales to a separate Accretion line item, reclassified regional administrative and community development from Costs applicable to sales to Other expense, net and reclassified marketing costs from Costs applicable to sales to General and administrative. The Consolidated Statements of Income (Loss) and the Consolidated Statements of Cash Flows have also been reclassified for discontinued operations. These changes were reflected for all periods presented.

NOTE 2 ACCOUNTING DEVELOPMENTS

Recently Adopted Pronouncements

Fair Value Accounting

In September 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Statement No. 157, “Fair Value Measurements” (“FAS 157”). FAS 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. The provisions of FAS 157 were adopted January 1, 2008. In February 2008, the FASB staff issued Staff Position No. 157-2 “Effective Date of FASB Statement No. 157” (“FSP FAS 157-2”). FSP FAS 157-2 delayed the effective date of FAS 157 for nonfinancial assets and nonfinancial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). The provisions of FSP FAS 157-2 are effective for the Company’s fiscal year beginning January 1, 2009.

In October 2008, the FASB issued FSP No. FAS 157-3, “Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active” (“FSP FAS 157-3”), which clarifies the application of FASB Statement No. 157, “Fair Value Measurements” (“FAS 157”) in an inactive market. The intent of this FSP is to provide guidance on how the fair value of a financial asset is to be determined when the market for that financial asset is inactive. FSP FAS 157-3 states that determining fair value in an inactive market depends on the facts and circumstances, requires the use of significant judgment and in some cases, observable inputs may require significant adjustment based on unobservable data. Regardless of the valuation technique used, an entity must include appropriate risk adjustments that market participants would make for nonperformance and liquidity risks when determining fair value of

NEWMONT MINING CORPORATION

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

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

an asset in an inactive market. FSP FAS 157-3 was effective upon issuance. The Company has incorporated the principles of FSP FAS 157-3 in determining the fair value of financial assets when the market for those assets is not active, specifically its marketable debt securities.

FAS 157 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under FAS 157 are described below:


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

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

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 financial assets and liabilities measured at fair value by level within the fair value hierarchy. As required by FAS 157, assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.


	Fair Value at September 30, 2008
	Total		Level 1		Level 2		Level 3
Assets:
Cash equivalents	$	119	$	119	$	—	$	—
Marketable equity securities		1,289		1,289		—		—
Marketable debt securities		32		—		—		32
Trade receivable from provisional copper and gold concentrate sales, net		31		31		—		—

	$	1,471	$	1,439	$	—	$	32

Liabilities:
Derivative instruments, net		93		—		93		—
8⁵/8% debentures		91		—		91		—

	$	184	$	—	$	184	$	—

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

The 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 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 include investments in auction rate securities and asset backed commercial paper. The Company reviews fair value for auction rate securities and asset

NEWMONT MINING CORPORATION

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

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

backed commercial paper on at least a quarterly basis. The auction rate securities are valued based on quoted prices in markets that are not active. The Company determined the fair value based on indicative pricing from the underwriting bank, which takes into account nonperformance and liquidity risks. Such instruments are classified within Level 3 of the fair value hierarchy. The asset backed commercial paper also falls within Level 3 of the fair value hierarchy because it trades infrequently and has little price transparency. The Company allocated an estimated impairment percentage to the various underlying asset classes within the asset backed commercial paper using unobservable inputs. The impairment value was applied sequentially to the various tranches within the asset backed commercial paper, resulting in an estimated fair value for each investment class. This value was supported by an indicative value obtained from a third party, which was facilitated by the Pan-Canadian Investors Committee for Third-Party Structured Asset Backed Commercial Paper.

The Company’s trade receivable from provisional copper and gold concentrate sales is valued using quoted market prices based on the forward London Metal Exchange (“LME”) (copper) and the London Bullion Market Association P.M. fix (“London P.M. fix”) (gold) and as such is classified within Level 1 of the fair value hierarchy.

The Company’s derivative instruments are valued using pricing models and the Company generally uses similar models to value similar instruments. Where possible, the Company verifies the values produced by its pricing models to market prices. Valuation models require a variety of inputs, including contractual terms, market prices, yield curves, credit spreads, measures of volatility, and correlations of such inputs. The 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 Company has fixed to floating swap contracts to hedge the interest rate risk exposure on $100 of its 8⁵/8% uncollateralized debentures due May 2011. The hedged portion of the Company’s 8⁵/8% debentures are valued using pricing models which require inputs, including risk-free interest rates and credit spreads. Because the inputs are derived from observable market data, the hedged portion of the 8⁵/8% debentures is classified within Level 2 of the fair value hierarchy.

The table below sets forth a summary of changes in the fair value of the Company’s Level 3 financial assets (asset backed commercial paper and auction rate securities) for the nine months ended September 30, 2008.


Balance at beginning of period	$	31
Unrealized losses		(2	)
Transfers in—auction rate securities		3

Balance at end of period	$	32

The total amount of unrealized losses for the period was included in Accumulated other comprehensive income as a result of changes in foreign exchange rates from December 31, 2007.

In February 2007, the FASB issued FASB Statement No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“FAS 159”). FAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value, with the objective of improving financial reporting by mitigating volatility in reported earnings caused by measuring related assets and liabilities

NEWMONT MINING CORPORATION

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

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

differently without having to apply complex hedge accounting provisions. The provisions of FAS 159 were adopted January 1, 2008. The Company did not elect the Fair Value Option for any of its financial assets or liabilities, and therefore, the adoption of FAS 159 had no impact on the Company’s consolidated financial position, results of operations or cash flows.

Accounting for Income Tax Benefits of Dividends on Share-Based Payment Awards

In June 2007, the EITF reached consensus on Issue No. 06-11, “Accounting for Income Tax Benefits of Dividends on Share-Based Payment Awards” (“EITF 06-11”). EITF 06-11 requires that the tax benefit related to dividend and dividend equivalents paid on equity-classified nonvested shares and nonvested share units, which are expected to vest, be recorded as an increase to additional paid-in capital. EITF 06-11 has been applied prospectively for tax benefits on dividends declared in the Company’s fiscal year beginning January 1, 2008. The adoption of EITF 06-11 had an insignificant impact on the Company’s consolidated financial position, results of operations or cash flows.

Recently Issued Accounting Pronouncements

Hierarchy of Generally Accepted Accounting Principles

In May 2008, the FASB issued FASB Statement No. 162, “The Hierarchy of Generally Accepted Accounting Principles” (“FAS 162”) which identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with GAAP. FAS 162 is effective 60 days following the Security and Exchange Commission’s (“SEC”) approval of the Public Company Accounting Oversight Board amendments to AU Section 411, “The Meaning of Present Fairly in Conformity with GAAP.” The Company does do not expect the adoption of FAS 162 to have an impact on the Company’s consolidated financial position, results of operations or cash flows.

Accounting for Convertible Debt Instruments

In May 2008, the FASB issued FSP No. APB 14-1, “Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)” (“FSP APB 14-1”). FSP APB 14-1 applies to convertible debt instruments that, by their stated terms, may be settled in cash (or other assets) upon conversion, including partial cash settlement, unless the embedded conversion option is required to be separately accounted for as a derivative under FASB Statement No. 133, “Accounting for Derivative Instruments and Hedging Activities” (“FAS 133”). Convertible debt instruments within the scope of FSP APB 14-1 are not addressed by the existing APB 14. FSP APB 14-1 requires that the liability and equity components of convertible debt instruments within the scope of FSP APB 14-1 be separately accounted for in a manner that reflects the entity’s nonconvertible debt borrowing rate. This requires an allocation of the convertible debt proceeds between the liability component and the embedded conversion option (i.e., the equity component). The difference between the principal amount of the debt and the amount of the proceeds allocated to the liability component will be reported as a debt discount and subsequently amortized to earnings over the instrument’s expected life using the effective interest method. FSP APB 14-1 is effective for the Company’s fiscal year beginning January 1, 2009 and will be applied retrospectively to all periods presented. The Company estimates that approximately $350 of debt discount will be recorded and the effective interest rate on the Company’s 2014 and 2017 convertible senior notes (see Note 20 to the Consolidated Financial Statements) will increase by approximately 5 percentage points to 6.0% and 6.25%, respectively, for the non-cash amortization of the debt discount.

NEWMONT MINING CORPORATION

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

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

Accounting for the Useful Life of Intangible Assets

In April 2008, the FASB issued FSP No. FAS 142-3, “Determination of the Useful Life of Intangible Assets” (“FSP 142-3”) which amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FASB Statement No. 142, “Goodwill and Other Intangible Assets” (“FAS 142”). The intent of this FSP is to improve the consistency between the useful life of a recognized intangible asset under FAS 142 and the period of expected cash flows used to measure the fair value of the asset under FASB Statement No. 141, “Business Combinations” (“FAS 141”). FSP 142-3 is effective for the Company’s fiscal year beginning January 1, 2009 and will be applied prospectively to intangible assets acquired after the effective date. The Company does not expect the adoption of FSP 142-3 to have an impact on the Company’s consolidated financial position, results of operations or cash flows.

Derivative Instruments

In March 2008, the FASB issued FASB Statement No. 161, “Disclosure about Derivative Instruments and Hedging Activities—an amendment of FASB Statement No. 133” (“FAS 161”) which provides revised guidance for enhanced disclosures about how and why an entity uses derivative instruments, how derivative instruments and the related hedged items are accounted for under FAS 133, and how derivative instruments and the related hedged items affect an entity’s financial position, financial performance and cash flows. FAS 161 is effective for the Company’s fiscal year beginning January 1, 2009. The Company is currently evaluating the potential impact of adopting this statement on the Company’s derivative instrument disclosures.

Business Combinations

In December 2007, the FASB issued FASB Statement No. 141(R), “Business Combinations” (“FAS 141(R)”) which amends FAS 141, and provides revised guidance for recognizing and measuring identifiable assets and goodwill acquired, liabilities assumed, and any noncontrolling interest in the acquiree. It also provides disclosure requirements to enable users of the financial statements to evaluate the nature and financial effects of the business combination. FAS 141(R) is effective for the Company’s fiscal year beginning January 1, 2009 and is to be applied prospectively. The Company is currently evaluating the potential impact of adopting this statement on the Company’s consolidated financial position, results of operations or cash flows.

Noncontrolling Interests in Consolidated Financial Statements

In December 2007, the FASB issued FASB Statement No. 160, “Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51” (“FAS 160”) which establishes accounting and reporting standards pertaining to (i) ownership interests in subsidiaries held by parties other than the parent, (ii) the amount of net income attributable to the parent and to the noncontrolling interest, (iii) changes in a parent’s ownership interest, and (iv) the valuation of any retained noncontrolling equity investment when a subsidiary is deconsolidated. For presentation and disclosure purposes, FAS 160 requires noncontrolling interests to be classified as a separate component of stockholders’ equity. FAS 160 is effective for the Company’s fiscal year beginning January 1, 2009. The Company is currently evaluating the potential impact of adopting this statement on the Company’s consolidated financial position, results of operations or cash flows.

NEWMONT MINING CORPORATION

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

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

NOTE 3 PRICE-CAPPED FORWARD SALES CONTRACTS

In 2001, the Company entered into transactions that closed out certain call options. The options were replaced with a series of forward sales contracts requiring physical delivery of the same quantity of gold over slightly extended future periods. Under the terms of the contracts, the Company would realize the lower of the spot price on the delivery date or the capped price, ranging from $381 to $392 per ounce. The forward sales contracts were accounted for as normal sales contracts under FAS 133 “Accounting for Derivative Instruments and Hedging Activities”, as amended. The initial fair value of the forward sales contracts was recorded as deferred revenue, and the fair value of these contracts was not included on the Condensed Consolidated Balance Sheets.

In June 2007, the Company paid $578 to eliminate its entire 1.85 million ounce price-capped forward sales contracts. The Company reported a pre-tax loss of $531 ($460 after-tax) on the early settlement of the contracts, after a $47 reversal of previously recognized deferred revenue.

NOTE 4 MIDAS REDEVELOPMENT

On June 19, 2007, an accident occurred at the Midas mine in Nevada, which resulted in suspension of operations at the mine to initiate rescue and subsequent recovery efforts. As a result, the Mine Safety and Health Administration (“MSHA”) issued an order requiring operations to temporarily cease at the mine. During the third quarter of 2007, activities were undertaken, at the direction of MSHA, to regain entry into the mine in order to ultimately resume commercial production. The redevelopment and holding costs of $10 in the three and nine months ended September 30, 2007 included access development, inspection, preventative repairs and road and mill maintenance.

NOTE 5 OTHER EXPENSE, NET


	Three Months Ended September 30,				Nine Months Ended September 30,
	2008		2007		2008		2007
Reclamation estimate revisions (Note 22)	$	13	$	1	$	74	$	18
Community development		15		12		47		39
Regional administration		10		8		31		29
Western Australia power plant		2		2		15		9
Peruvian royalty		4		1		15		5
Pension settlement loss (Note 7)		1		3		12		16
Provision for bad debts		11		1		11		1
World Gold Council dues		3		2		8		8
Accretion non-operating (Note 22)		2		2		7		6
Other		12		10		34		39

	$	73	$	42	$	254	$	170

NEWMONT MINING CORPORATION

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

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

NOTE 6 OTHER INCOME, NET


	Three Months Ended September 30,					Nine Months Ended September 30,
	2008			2007		2008			2007
Canadian Oil Sands Trust income	$	36		$	11	$	91		$	30
Gain on sale of exploration property		32			—		32			—
Gain on sale of investments, net		19			—		29			—
Interest income		7			11		24			34
Income from development projects, net		3			—		12			—
Gain on other asset sales, net		6			8		9			13
Foreign currency exchange (losses) gains, net		(7	)		14		(20	)		17
Other		4			2		13			6

	$	100		$	46	$	190		$	100

NOTE 7 EMPLOYEE PENSION AND OTHER BENEFIT PLANS


	Three Months Ended September 30,						Nine Months Ended September 30,
	2008			2007			2008			2007
Pension benefit costs, net
Service cost	$	4		$	5		$	12		$	15
Interest cost		7			6			22			18
Expected return on plan assets		(7	)		(5	)		(21	)		(16	)
Amortization of prior service cost		—			—			—			1
Amortization of loss		—			5			2			21

	$	4		$	11		$	15		$	39


	Three Months Ended September 30,				Nine Months Ended September 30,
	2008		2007		2008			2007
Other benefit costs, net
Service cost	$	—	$	1	$	1		$	4
Interest cost		1		1		3			4
Amortization of gain		—		—		(1	)		—

	$	1	$	2	$	3		$	8

For the three months ended September 30, 2008 and 2007, the Company recognized pension settlement losses of $1 and $3, respectively, related to senior management retirements. For the nine months ended September 30, 2008 and 2007, the Company recognized pension settlement losses of $12 and $16, respectively, related to senior management retirements. These costs were recorded in Other expense, net (see Note 5).

The value of the securities in the Company’s employee pension and other benefit plans has been adversely impacted by market volatility in the first nine months of 2008. The declines could have a substantial impact on the funded status of the plans and could increase the amount of future cash contributions.

NEWMONT MINING CORPORATION

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

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

NOTE 8 STOCK BASED COMPENSATION

The Company recognized stock options and other stock based compensation as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2008		2007		2008		2007
Stock options	$	5	$	4	$	13	$	14
Restricted stock		1		—		4		3
Restricted stock units		—		—		—		1
Deferred stock awards		3		3		8		7

	$	9	$	7	$	25	$	25

For the three months ended September 30, 2008 and 2007, no stock options were granted. For the nine months ended September 30, 2008 and 2007, 1,116,963 and 1,066,500 stock options, respectively, were granted with a weighted-average exercise price of $44 and $42, respectively. The total intrinsic value of options exercised in the third quarter of 2008 and 2007 was $1 and $4, respectively. The total intrinsic value of options exercised in the first nine months of 2008 and 2007 was $13 and $10, respectively. At September 30, 2008, there was $20 of unrecognized compensation cost related to unvested stock options. This cost is expected to be recognized over a weighted-average period of approximately 2 years.

For the three months ended September 30, 2008, 4,034 shares of restricted stock were granted at the weighted-average fair market value of $50. For the three months ended September 30, 2007, no shares of restricted stock were granted. For the nine months ended September 30, 2008 and 2007, 118,697 and 175,114 shares of restricted stock, respectively, were granted and issued, at the weighted-average fair market value of $49 and $45, respectively.

For the three months ended September 30, 2008 and 2007, no shares of restricted stock units were granted. For the nine months ended September 30, 2008 and 2007, 8,927 and 20,212 shares of restricted stock units, respectively, were granted, at the weighted-average fair market value of $49 and $45, respectively, per underlying share of the Company’s common stock.

For the three months ended September 30, 2008 and 2007, no deferred stock awards were granted. For the nine months ended September 30, 2008 and 2007, 394,095 and 365,776 deferred stock awards, respectively, were granted, at the weighted-average fair market value of $44 and $42, respectively, per underlying share of the Company’s common stock.

NOTE 9 INCOME TAXES

The Company operates in numerous countries around the world and accordingly it is subject to, and pays annual income taxes under, the various income tax regimes in the countries in which it operates. Some of these tax regimes are defined by contractual agreements with the local government, and others are defined by the general corporate income tax laws of the country. The Company has historically filed, and continues to file, all required income tax returns and 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

NEWMONT MINING CORPORATION

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

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

and in connection with such reviews, disputes can arise with the taxing authorities over the interpretation or application of certain rules to the Company’s business conducted within the country involved. At September 30, 2008, the Company’s total unrecognized tax benefit was $150 for uncertain tax positions taken or expected to be taken on tax returns. Of this, $91 represents the amount of unrecognized tax benefits that, if recognized, would affect the Company’s effective income tax rate. Also included in the balance at September 30, 2008 is $19 of tax positions that, due to the impact of deferred tax accounting, the disallowance of which would not affect the annual effective tax rate.

On June 25, 2008, the United States Tax Court issued an opinion for Santa Fe Pacific Gold Company and Subsidiaries (“Santa Fe”), by and through its successor in interest, Newmont USA Limited, a member of the Newmont Mining Corporation affiliated group. The Tax Court issued the ruling for the tax years 1994—1997, which were years prior to Newmont’s acquisition of Santa Fe. The Tax Court ruled unfavorably on certain issues relating to the method in which Santa Fe was calculating adjustments related to percentage depletion in its Alternative Minimum Tax calculation. As a direct result of that decision, the Company increased its liability for uncertain income tax positions under FIN 48 by $27. Since the increase in the Company’s FIN 48 liability is attributable to additional Alternative Minimum Tax amounts owed, these amounts can be used in the future by the Company as a credit against its regular US corporate tax liability. Management is currently exploring its legal options in order to decide how to proceed in response to the Tax Court opinion.

As a result of (i) statute of limitations that will begin to expire within the next 12 months in various jurisdictions, (ii) a possible payment to the United States taxing authority in connection with the recent Tax Court decision concerning the calculation of the Company’s alternative minimum taxes and (iii) possible settlements of audit-related issues with taxing authorities in various jurisdictions, the Company believes that it is reasonably possible that the total amount of its net unrecognized income tax benefits will decrease between $45 to $60 in the next 12 months.

NOTE 10 MINORITY INTEREST IN INCOME (LOSS) OF CONSOLIDATED SUBSIDIARIES


	Three Months Ended September 30,					Nine Months Ended September 30,
	2008			2007		2008		2007
Yanacocha	$	49		$	19	$	188	$	60
Batu Hijau		(17	)		177		103		289
Other		(1	)		2		—		3

	$	31		$	198	$	291	$	352

Newmont has a 45% ownership interest in the Batu Hijau mine, held through the Nusa Tenggara partnership (“NTP”) with an affiliate of Sumitomo Corporation of Japan (“Sumitomo”). Newmont has a 56.25% interest in NTP and the Sumitomo affiliate holds the remaining 43.75%. NTP in turn owns 80% of P.T. Newmont Nusa Tenggara (“PTNNT”), the Indonesian subsidiary that operates the Batu Hijau mine. Newmont identified NTP as a Variable Interest Entity as a result of certain capital structures and contractual relationships. As a result, Newmont fully consolidates Batu Hijau in its consolidated financial statements. The remaining 20% interest in PTNNT is owned by P.T. Pukuafu Indah (“PTPI”), an unrelated Indonesian company. Because PTPI had been advanced a loan by NTP and was not obligated to absorb the expected losses of PTNNT, PTPI’s interest was initially considered a carried

NEWMONT MINING CORPORATION

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

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

interest and Newmont reported a 52.875% economic interest in Batu Hijau, which reflected Newmont’s actual economic interest in the mine until such time as the loan was fully repaid (including accrued interest). On May 25, 2007, PTPI fully repaid the loan (including accrued interest) from NTP. As a result of the loan repayment, Newmont’s economic interest in Batu Hijau was reduced from 52.875% to 45% and the Company recorded a net charge of $25 (after-tax) against Minority interest expense in the second quarter of 2007. During the second quarter of 2008, PTNNT advanced PTPI $20, which is included in Other current assets.

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

In April 2008, the Company purchased 15,960 additional shares of European Gold Refineries SA joint venture (“EGR”) for $11 in cash increasing its ownership interest to 56.67% from 46.72%. Swiss residents and Mitsubishi International Corporation hold the remaining 43.33%. The additional interest in EGR resulted in the consolidation of EGR and the remaining 43.33% is included in Other above as of May 1, 2008. Prior to consolidation, the Company accounted for EGR using the equity method of accounting.

NOTE 11 DISCONTINUED OPERATIONS

Discontinued operations include the Company’s royalty portfolio and Pajingo operation, both sold in December 2007, as well as the July 2007 sale of the Zarafshan-Newmont Joint Venture (“ZNJV”), expropriated by the Uzbekistan government in August 2006.

For the nine months ended September 30, 2008, the Company recognized a $5 gain related to additional royalty portfolio revenue in excess of the 2007 estimate and a $1 gain related to Pajingo asset sales. Additionally, the Company received $5 in cash and $5 in marketable securities related to the Pajingo asset sales. Activity in the first nine months of 2008 also includes a $19 tax benefit related to the US tax return provision revised tax expense on the sale of the royalty portfolio in 2007.

For the nine months ended September 30, 2007, the Company recorded a $1,665 non-cash charge to impair the goodwill associated with the Merchant Banking segment as a result of the decision to cease Merchant Banking activities.

During July 2007, the Company and certain Uzbekistan parties settled a dispute involving ZNJV. The Company received proceeds of $80 and recognized a pre-tax gain of $77 in the third quarter of 2007. Under the agreements, the Company’s interest in ZNJV transferred to the Uzbekistan parties.

The Company has reclassified the balance sheet amounts and the income statement results from the historical presentation to Assets and Liabilities of operations held for sale on the Condensed Consolidated Balance Sheets and to Income (loss) from discontinued operations in the Condensed Consolidated Statements of Income (Loss) for all periods presented. The Condensed Consolidated Statements of Cash Flows have been reclassified for assets held for sale and discontinued operations for all periods presented.

NEWMONT MINING CORPORATION

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

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

The following table details selected financial information included in Income (loss) from discontinued operations in the Condensed Consolidated Statements of Income (Loss):


	Three Months Ended September 30,					Nine Months Ended September 30,
	2008		2007			2008		2007
Sales—gold, net	$	—	$	30		$	—	$	88

Income from operations:
Royalty portfolio	$	—	$	22		$	—	$	85
Pajingo		—		4			—		10

		—		26			—		95
Loss on impairment of goodwill		—		—			—		(1,665	)
Gain on sale of ZNJV		—		77			—		77
Additional gain from royalty portfolio		—		—			5		—
Gain on sale of Pajingo assets		—		—			1		—

Pre-tax income (loss)		—		103			6		(1,493	)
Income tax benefit (expense)		19		(37	)		17		(74	)

Income (loss) from discontinued operations	$	19	$	66		$	23	$	(1,567	)

The major classes of Assets and Liabilities of operations held for sale in the Condensed Consolidated Balance Sheets are as follows:


	At September 30, 2008		At December 31, 2007
Assets:
Accounts receivable	$	1	$	20
Property, plant and mine development		—		3
Deferred income tax assets		—		1

Total assets of operations held for sale	$	1	$	24

Liabilities:
Income and mining taxes	$	81	$	378
Other liabilities		7		16

Total liabilities of operations held for sale	$	88	$	394

NEWMONT MINING CORPORATION

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

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

The following table details selected financial information included in Net cash (used in) provided from discontinued operations and Net cash (used in) provided from investing activities of discontinued operations:


	Nine Months Ended September 30,
	2008			2007
Net cash (used in) provided from discontinued operations:
Income (loss) from discontinued operations	$	23		$	(1,567	)
Amortization		—			33
Deferred income taxes		—			42
Gain on sale of investments, net		—			(37	)
Gain on asset sales, net		—			(77	)
Loss on impairment of goodwill		—			1,665
Other operating adjustments and write-downs		—			10
(Decrease) increase in net operating liabilities		(134	)		29

	$	(111	)	$	98

Net cash (used in) provided from investing activities of discontinued operations:
Investments in marketable securities	$	—		$	(2	)
Proceeds from sale of marketable securities		—			78
Proceeds from asset sales, net		5			77
Royalty portfolio sale expenses		(11	)		—
Additions to property, plant and mine development		—			(5	)
Other		—			6

	$	(6	)	$	154

NOTE 12 DERIVATIVE INSTRUMENTS

For the three months ended September 30, 2008 and 2007, gains of $4 and $1, respectively, were included in Other income, net for the ineffective portion of derivative instruments designated as fair value hedges. For the nine months ended September 30, 2008 and 2007, gains of $6 and $1, respectively, were included in Other income, net for the ineffective portion of derivative instruments designated as cash flow hedges. The amount to be reclassified from Accumulated other comprehensive income, net of tax to income for derivative instruments during the next 12 months is a loss of approximately $14. The maximum period over which hedged forecasted transactions are expected to occur is 3 years.

Foreign Currency Contracts

Newmont has entered into a series of foreign currency contracts to hedge the variability of the US dollar amount of forecasted foreign currency expenditures caused by changes in currency rates. Newmont entered into IDR/$ forward purchase contracts to hedge up to 80% of the Company’s IDR denominated operating expenditures which results in a blended IDR/$ rate realized each period. The hedges are forward purchase contracts with expiration dates ranging up to one year. For the three months ended September 30, 2008 and 2007, the IDR/$ forward purchase contracts reduced Batu Hijau Costs applicable to sales by $1. For the nine months ended September 30, 2008 and 2007, the

NEWMONT MINING CORPORATION

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

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

IDR/$ forward purchase contracts reduced Batu Hijau Costs applicable to sales by $2 and $4, respectively. As of September 30, 2008, the Company has hedged 79% of its remaining 2008 IDR operating expenditures, and 22% of its expected 2009 IDR operating expenditures.

During the third quarter of 2007, Newmont began a multi-year systematic, disciplined layered program to hedge up to 85% of the Company’s A$ denominated operating expenditures with forward contracts that have expiration dates ranging up to three years from the date of issue. The principal hedging objective is reduction in the volatility of realized period-on-period $/A$ rates. Each month, fixed forward contracts are obtained to hedge 1/36^th of the forecasted monthly A$ operating cost exposure in the rolling three-year hedge period resulting in a blended $/A$ rate realized. For the three and nine months ended September 30, 2008, the A$ operating hedge program reduced Australia/New Zealand Costs applicable to sales by $nil and $5, respectively. For the three and nine months ended September 30, 2007, the A$ operating hedge program did not have an impact on Australia/New Zealand Costs applicable to sales. As of September 30, 2008, the Company has hedged 70% of its remaining 2008 A$ operating expenditures, and 42%, 28% and 9% of its expected 2009, 2010 and 2011 A$ operating expenditures, respectively.

During the first quarter of 2008, Newmont began a multi-year systematic, disciplined layered program to hedge up to 75% of the Company’s NZ$ denominated operating expenditures with forward contracts that have expiration dates ranging up to two years from the date of issue. The principal hedging objective is reduction in the volatility of realized period-on-period $/NZ$ rates. Each month, fixed forward contracts are obtained to hedge 1/24^th of the forecasted monthly NZ$ operating cost exposure in the rolling two-year hedge period resulting in a blended $/NZ$ rate realized. For the three and nine months ended September 30, 2008, the NZ$ operating hedge program had no impact on Australia/New Zealand Costs applicable to sales. All of the currency contracts were designated as cash flow hedges, and as such, unrealized changes in market value have been recorded in Accumulated other comprehensive income. As of September 30, 2008, the Company has hedged 44% of its remaining 2008 NZ$ operating expenditures, and 34% and 13% of its expected 2009 and 2010 NZ$ operating expenditures, respectively.

During the fourth quarter of 2007, Newmont began a program to hedge up to 95% of the Company’s A$ denominated capital expenditures related to the construction of Boddington. The program consists of a series of fixed forward contracts and bought call option contracts with expiration dates ranging up to one year from the date of issue. The A$ denominated contracts have been designated as cash flow hedges of future Boddington capital expenditures, and as such, changes in the market value have been recorded in Accumulated other comprehensive income. The realized gains and losses associated with the capital expenditure hedge program will impact Amortization during future periods in which Boddington assets are placed into service and affect earnings. As of September 30, 2008, the Company has hedged 75% of its remaining forecasted A$ denominated capital expenditures in 2008 and 2009.

NEWMONT MINING CORPORATION

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

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

Newmont had the following foreign currency derivative contracts outstanding at September 30, 2008:


	Expected Maturity Date										Fair Value
	2008		2009		2010		2011		Total/ Average		At September 30, 2008⁽¹⁾			At December 31, 2007⁽²⁾
IDR Forward Purchase Contracts:
$ (millions)	$	25	$	23	$	—	$	—	$	48	$	—		$	(1	)
Average rate (IDR/$)		9,522		9,716		—		—		9,615

A$ Operating Forward Purchase Contracts:
$ (millions)	$	100	$	278	$	217	$	53	$	648	$	(55	)	$	—
Average rate ($/A$)		0.87		0.85		0.83		0.82		0.84

NZ$ Operating Forward Purchase Contracts:
$ (millions)	$	7	$	27	$	6	$	—	$	40	$	(4	)	$	—
Average rate ($/NZ$)		0.76		0.73		0.70		—		0.73

A$ Capital Forward Purchase Contracts:
$ (millions)	$	95	$	245	$	—	$	—	$	340	$	(35	)	$	(1	)
Average rate ($/A$)		0.88		0.88		—		—		0.88

A$ Capital Call Option Contracts:
$ (millions)	$	77	$	—	$	—	$	—	$	77	$	—		$	1
Average rate ($/A$)		0.88		—		—		—		0.88

⁽¹⁾

At September 30, 2008, the fair value of the A$ operating forward purchase contracts includes $(28) in Other current liabilities and $(27) in Other long-term liabilities, the fair value of the NZ$ operating forward purchase contracts includes $(3) in Other current liabilities and $(1) in Other long-term liabilities, and the fair value of the capital hedge program related to Boddington includes $(35) in Other current liabilities for A$ forward purchase contracts.

⁽²⁾

At December 31, 2007, the fair value of the IDR operating forward purchase contracts includes $(1) in Other current liabilities, the fair value of the A$ operating forward purchase contracts includes $2 in Other current assets, $2 in Other Long-term assets, $(1) in Other current liabilities, and $(3) in Other long-term liabilities, and the fair value of the capital hedge program related to Boddington includes $(1) in Other current liabilities for A$ forward purchase contracts and $1 in Other current assets for A$ bought call option contracts.

Diesel Fixed Forward Contracts

During the first quarter of 2008, Newmont implemented a program to hedge up to 66% of its operating cost exposure related to diesel prices of fuel consumed at its Nevada operations. The program consists of a series of financially settled fixed forward contracts with expiration dates of up to one year from the date of issue. For the three and nine months ended September 30, 2008, the Nevada diesel hedge program had no impact on Nevada Costs applicable to sales. The contracts have been designated as cash flow hedges of future diesel purchases, and as such changes in the market

NEWMONT MINING CORPORATION

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

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

value have been recorded in Accumulated other comprehensive income. As of September 30, 2008, the Company has hedged 22% of its remaining 2008 Nevada diesel expenditures, and 14% of its expected 2009 Nevada diesel expenditures.

Newmont had the following diesel derivative contracts outstanding at September 30, 2008:


	Expected Maturity Date						Fair Value
	2008		2009		Total/ Average		At September 30, 2008			At December 31, 2007
Diesel Forward Purchase Contracts:
$ (millions)	$	8	$	16	$	24	$	(4	)	$	—
Average rate ($/gallon)		3.44		3.47		3.46

Interest Rate Swap Contracts

At September 30, 2008, Newmont had $100 fixed to floating swap contracts designated as a hedge against a portion of its $223 8⁵/8% debentures expiring in 2011. Under the hedge contract terms, the Company receives fixed-rate interest payments at 8.625% and pays floating-rate interest amounts based on periodic London Interbank Offered Rate (“LIBOR”) settings plus a spread, ranging from 2.60% to 3.49%. For the three months ended September 30, 2008 and 2007, the hedge contracts had no impact on Interest expense, net of capitalized interest. For the nine months ended September 30, 2008 and 2007, the hedge contracts decreased Interest expense, net of capitalized interest by $1 and $nil, respectively. The fair value of the interest rate swaps was $5 at September 30, 2008 and $4 at December 31, 2007.

Provisional Copper and Gold Sales

Under the long-established structure of sales agreements prevalent in the industry, substantially all of the Company’s copper and gold concentrate sales are provisionally priced at the time of shipment. The provisional prices are finalized in a contractually specified future period (generally one to five months from the shipment date) primarily based on quoted LME prices (copper) and the London P.M. fix (gold). Sales subject to final pricing are generally settled in a subsequent month or quarter. Because a significant portion of the Company’s copper and gold concentrate sales in any quarterly period usually remain subject to final pricing, the quarter-end forward price is a major determinant of recorded revenues and the average recorded copper price for the period.

LME copper prices averaged $3.48 per pound during the third quarter of 2008, compared with the Company’s recorded average provisional price of $3.39 per pound. The applicable forward copper price at the end of the quarter was $2.89 per pound. During the third quarter of 2008, declining copper prices resulted in a provisional pricing mark-to-market loss of $52. At September 30, 2008, the Company had copper sales of 56 million pounds priced at an average of $2.89 per pound, subject to final pricing over the next several months.

The average London P.M. fix was $870 per ounce during the third quarter of 2008, compared with the Company’s recorded average provisional price of $866 per ounce. The applicable forward gold price at the end of the quarter was $875 per ounce. During the third quarter of 2008, declining gold prices resulted in a provisional pricing mark-to-market loss of $2. At September 30, 2008, the Company had gold sales of 26,000 ounces priced at an average of $875 per ounce, subject to final pricing over the next couple months.

NEWMONT MINING CORPORATION

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

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

NOTE 13 INCOME (LOSS) PER COMMON SHARE

Basic income (loss) per common share is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted income (loss) per common share reflects the potential dilution that would occur if securities or other contracts to issue common stock, including stock options, restricted stock units, deferred stock, convertible debt and warrants (“dilutive shares”) were exercised or converted into common stock.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2008		2007		2008		2007
Numerator:
Income (loss) from continuing operations	$	177	$	331	$	820	$	(30	)
Income (loss) from discontinued operations		19		66		23		(1,567	)

Net income (loss)	$	196	$	397	$	843	$	(1,597	)

Denominator:
Basic		454		452		454		451
Effect of dilutive shares		1		1		2		—

Diluted		455		453		456		451

Income (loss) per common share
Basic:
Income (loss) from continuing operations	$	0.39	$	0.73	$	1.81	$	(0.07	)
Income (loss) from discontinued operations		0.04		0.15		0.05		(3.47	)

Net income (loss)	$	0.43	$	0.88	$	1.86	$	(3.54	)

Diluted:
Income (loss) from continuing operations	$	0.39	$	0.73	$	1.80	$	(0.07	)
Income (loss) from discontinued operations		0.04		0.15		0.05		(3.47	)

Net income (loss)	$	0.43	$	0.88	$	1.85	$	(3.54	)

Options to purchase 1.1 million and 2.1 million shares of common stock at average exercise prices of $54.91 and $51.42 were outstanding at September 30, 2008 and 2007, respectively, but were not included in the computation of diluted weighted average common shares because the strike price of the options exceeded the price of the common stock and their effect would have been anti-dilutive.

Other outstanding options to purchase 1.7 million shares of common stock were not included in the computation of diluted weighted average common shares for the nine months ended September 30, 2007 because the effect would have been anti-dilutive.

NEWMONT MINING CORPORATION

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

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

NOTE 14 COMPREHENSIVE (LOSS) INCOME


	Three Months Ended September 30,						Nine Months Ended September 30,
	2008			2007			2008			2007
Net income (loss)	$	196		$	397		$	843		$	(1,597	)
Other comprehensive (loss) income, net of tax:
Unrealized loss on marketable equity securities (Note 16)		(481	)		(75	)		(77	)		(44	)
Foreign currency translation adjustments		(103	)		20			(120	)		85
Pension and other benefit liability adjustments		1			5			9			22
Change in fair value of cash flow hedge instruments:
Net change from periodic revaluations		(106	)		5			(55	)		9
Net amount reclassified to income		(2	)		(1	)		(10	)		(2	)

Net unrecognized (loss) gain on derivatives		(108	)		4			(65	)		7

		(691	)		(46	)		(253	)		70

Comprehensive (loss) income	$	(495	)	$	351		$	590		$	(1,527	)

NOTE 15 ACQUISITIONS

On December 27, 2007, pursuant to a tender offer dated October 9, 2007, the Company purchased 155 million common shares of Miramar Mining Corporation (“Miramar”). The 155 million shares represented approximately 70% of the common shares of Miramar which, in addition to the 18.5 million shares previously owned by the Company, brought the Company’s interest in Miramar to approximately 78%. During the first quarter of 2008, the Company completed the acquisition by purchasing the remaining 50 million shares, bringing the Company’s interest in Miramar to 100%. All shares were purchased for C$6.25 per share in cash.

With the completion of the Miramar acquisition, the Company controls the Hope Bay project, a large undeveloped gold project in Nunavut, Canada. The Hope Bay project is consistent with the Company’s strategic focus on exploration and project development and was acquired with the intention of adding higher grade ore reserves and developing a new core gold mining district in a AAA-rated country.

NEWMONT MINING CORPORATION

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

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

In accordance with the purchase method of accounting, the purchase price paid has been allocated to the assets acquired and liabilities assumed based upon their estimated fair values on the respective closing dates. The Company is continuing to evaluate the assets acquired and liabilities assumed, and there may be adjustments to the estimated purchase date fair values. The Company will finalize the purchase price allocation in the fourth quarter of 2008. The preliminary purchase price allocation based on the estimated fair values of assets acquired and liabilities assumed is as follows:


Assets:
Cash and cash equivalents	$	38
Property, plant and mine development, net		1,865
Investments		40
Deferred income tax assets		94
Other assets		36

		2,073

Liabilities:
Accrued liabilities		41
Deferred income tax liabilities		679

		720

Net assets acquired	$	1,353

The results of operations for Miramar have been included in the Company’s Condensed Consolidated Statement of Income (Loss). For the three and nine months ended September 30, 2008, the Hope Bay project incurred a pre-tax loss of $16 and $29, respectively, related to advanced projects, salaries and general and administrative costs. Advanced projects at Hope Bay consist of an extensive evaluation of various options for the long-term development of the Hope Bay district. See Note 24 for more information on the Hope Bay segment.

In April 2008, the Company purchased 15,960 additional shares of EGR for $11 in cash bringing its ownership interest to 56.67% from 46.72%. Swiss residents and Mitsubishi International Corporation hold the remaining 43.33%. EGR owns 100% of Valcambi SA (“Valcambi”), a gold refinery business, and 100% of Finorafa SA (“Finorafa”), a gold distribution business. Valcambi is a London Gold Delivery precious metals refiner and manufacturer of semi-finished products for the Swiss luxury watch industry, and Finorafa is a distributor and financier of gold products in the Italian market, which is currently inactive. The additional interest in EGR resulted in the consolidation of EGR as of May 1, 2008 and increased Other current assets and Other current liabilities by $229 and $206, respectively. EGR’s revenue and expenses are included in Other income, net reflecting the service fee and secondary nature of EGR’s business to the Company’s central operations. Prior to consolidation, the Company accounted for EGR using the equity method of accounting.

NEWMONT MINING CORPORATION

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

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

NOTE 16 INVESTMENTS


	At September 30, 2008									At December 31, 2007
			Unrealized									Unrealized
	Cost/Equity Basis		Gain		Loss			Fair/Equity Value		Cost/Equity Basis		Gain		Loss			Fair/Equity Value
Current:
Marketable Equity Securities	$	18	$	10	$	(2	)	$	26	$	19	$	39	$	—		$	58
Other investments, at cost		—		—		—			—		3		—		—			3

	$	18	$	10	$	(2	)	$	26	$	22	$	39	$	—		$	61

Long-term:
Marketable Debt Securities
Auction rate securities	$	8	$	—	$	(5	)	$	3	$	7	$	—	$	(2	)	$	5
Asset backed securities		29		—		—			29		31		—		—			31

		37		—		(5	)		32		38		—		(2	)		36

Marketable Equity Securities
Canadian Oil Sands Trust		292		846		—			1,138		316		907		—			1,223
Gabriel Resources Ltd.		86		13		—			99		94		—		—			94
Shore Gold Inc.		18		—		—			18		80		—		—			80
Other		11		—		(3	)		8		37		15		(7	)		45

		407		859		(3	)		1,263		527		922		(7	)		1,442

Other investments, at cost		1		—		—			1		—		—		—			—

Investment in Affiliates:
European Gold Refineries		—		—		—			—		29		—		—			29
AGR Matthey Joint Venture		11		—		—			11		17		—		—			17
Regis Resources NL		—		—		—			—		3		—		—			3

		11		—		—			11		49		—		—			49

	$	456	$	859	$	(8	)	$	1,307	$	614	$	922	$	(9	)	$	1,527

During the third quarter of 2008, the Company recognized impairments in its investments for other-than-temporary declines in value of $26 in Shore Gold Inc. and $8 in other marketable equity securities, resulting in total impairments in the first nine months of 2008 of $58 in Shore Gold Inc., $13 in Gabriel Resources Ltd. and $19 in other marketable equity securities.

During the third quarter and first nine months of 2008, the Company sold shares of marketable equity securities recognizing a gain of $19 and $29, respectively.

During the first nine months of 2008, the Company purchased marketable equity securities of Gabriel Resources for $11 and other marketable equity securities for $7.

NEWMONT MINING CORPORATION

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

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

In April 2008, the Company purchased 15,960 shares of EGR for $11 in cash bringing its ownership interest to 56.67% from 46.72%, resulting in the consolidation of EGR. Prior to consolidation, the Company accounted for EGR using the equity method of accounting. The net investment was included in investments in affiliates until the purchase of the additional shares.

NOTE 17 INVENTORIES


	At September 30, 2008		At December 31, 2007
In-process	$	67	$	64
Concentrate		34		69
Precious metals		28		27
Materials, supplies and other		379		303

	$	508	$	463

During the first nine months of 2007, Newmont recorded aggregate write-downs of $3 included in Costs applicable to sales to reduce the carrying value of inventories to net realizable value related to Australia/New Zealand.

NOTE 18 STOCKPILES AND ORE ON LEACH PADS


	At September 30, 2008		At December 31, 2007
Current:
Stockpiles	$	120	$	204
Ore on leach pads		215		169

	$	335	$	373

Long-term:
Stockpiles	$	781	$	528
Ore on leach pads		241		260

	$	1,022	$	788

Stockpiles increased during 2008 primarily at Batu Hijau, Africa and Nevada of $137, $18 and $14, respectively.

During the third quarter of 2008, Newmont recorded aggregate write-downs of $17 included in Costs applicable to sales in Bolivia and Australia/New Zealand to reduce the carrying value of leach pads and stockpiles to net realizable value. During the first nine months of 2007, Newmont recorded aggregate write-downs of $14 included in Costs applicable to sales at Yanacocha and Australia/New Zealand to reduce the carrying value of leach pads and stockpiles to net realizable value.

NEWMONT MINING CORPORATION

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

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

NOTE 19 OTHER ASSETS


	At September 30, 2008		At December 31, 2007
Other current assets:
Refinery metal inventory and receivable	$	240	$	—
Prepaid assets		127		48
Notes receivable		31		13
Other		78		26

	$	476	$	87

Other long-term assets:
Restricted cash	$	94	$	93
Debt issuance costs		35		40
Pension and benefit intangible asset		31		27
Prepaid royalties		20		20
Other receivables		18		21
Other		51		33

	$	249	$	234

NOTE 20 DEBT


	At September 30, 2008				At December 31, 2007
	Current		Non-Current		Current		Non-Current
Sale-leaseback of refractory ore treatment plant	$	24	$	188	$	22	$	212
8⁵/8% debentures, net of discount (due 2011)		—		214		—		218
Corporate revolving credit facility (due 2012)		—		755		—		—
2014 convertible senior notes		—		575		—		575
2017 convertible senior notes		—		575		—		575
5⁷/8% notes, net of discount (due 2035)		—		597		—		597
Newmont Australia 7⁵/8% guaranteed notes, net of premium		—		—		119		—
PTNNT project financing facility		87		263		87		306
Yanacocha credit facility		14		65		14		76
Yanacocha bonds		—		100		—		100
Project financings, capital leases and other		17		23		13		24

	$	142	$	3,355	$	255	$	2,683

During the first nine months of 2008, Newmont borrowed net proceeds of $755 under its $2,000 senior revolving credit facility. Scheduled minimum debt repayments at September 30, 2008 are $51 for the remainder of 2008, $142 in 2009, $147 in 2010, $320 in 2011, $890 in 2012 and $1,947 thereafter.

During July 2007, the Company completed a private offering of $1,150 convertible senior notes due in 2014 and 2017, each in the amount of $575. The 2014 Notes, maturing on July 15, 2014, will

NEWMONT MINING CORPORATION

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

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

pay interest semi-annually at a rate of 1.25% per annum, and the 2017 Notes, maturing on July 15, 2017, will pay interest semi-annually at a rate of 1.625% per annum. The Notes are convertible, at the holder’s option, at a conversion price of $46.21 per share of common stock. Upon conversion, the principle 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. When the conversion premium becomes dilutive to the Company’s earnings per share (Newmont’s share price exceeds $46.21) the shares will be included in the computation of diluted income per common share. The Company is not entitled to redeem the notes prior to their stated maturity dates. The net proceeds from the offering, after expenses, were approximately $1,126.

In connection with the convertible senior notes offering, the Company entered into convertible note hedge transactions and warrant transactions (“Call Spread Transactions”). These transactions included the purchase of call options and the sale of warrants. As a result of the Call Spread Transactions, the conversion price of $46.21 was effectively increased to $60.27. When the warrant transactions become dilutive to the Company’s earnings per share (Newmont’s share price exceeds $60.27) the underlying shares will be included in the computation of diluted income per common share. The Company has analyzed the Call Spread Transactions under EITF Issue No. 00-19, “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock,” and other relevant documentation, and determined that they meet the criteria for classification as equity transactions. As a result, the Company recorded the purchase of the call options as a reduction in paid-in capital and the proceeds of the warrants as an addition to paid-in capital, and the Company will not recognize subsequent changes in fair value of the agreements.

NOTE 21 OTHER LIABILITIES


	At September 30, 2008		At December 31, 2007
Other current liabilities:
Refinery metal payable	$	240	$	—
Accrued operating costs		155		147
Accrued capital expenditures		105		172
Reclamation and remediation (Note 22)		74		71
Derivative instruments (Note 12)		70		3
Interest		46		40
Taxes other than income and mining		41		23
Royalties		24		34
Peruvian royalty		15		5
Deferred income tax		5		131
Other		45		39

	$	820	$	665

Other long-term liabilities:
Income taxes	$	127	$	113
Derivative instruments (Note 12)		28		3
Other		27		34

	$	182	$	150

NEWMONT MINING CORPORATION

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

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

NOTE 22

RECLAMATION AND REMEDIATION LIABILITIES (ASSET RETIREMENT OBLIGATIONS)

At September 30, 2008 and December 31, 2007, $545 and $569, respectively, were accrued for reclamation obligations relating to mineral properties in accordance with SFAS No. 143, “Accounting for Asset Retirement Obligations.” In addition, the Company is involved in several matters concerning environmental obligations associated with former, primarily historic, mining activities. Generally, these matters concern developing and implementing remediation plans at the various sites involved. At September 30, 2008 and December 31, 2007, $153 and $125, respectively, were accrued for such obligations. These amounts are also included in Reclamation and remediation liabilities.

The following is a reconciliation of the liability for asset retirement obligations:


	Nine Months Ended September 30,
	2008			2007
Balance at beginning of period	$	694		$	598
Additions, changes in estimates and other		55			37
Liabilities settled		(83	)		(36	)
Accretion expense		32			29

Balance at end of period	$	698		$	628

The current portions of Reclamation and remediation liabilities of $74 and $71 at September 30, 2008 and December 31, 2007, respectively, are included in Other current liabilities.

The Company’s reclamation and remediation expenses consisted of:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2008		2007		2008		2007
Accretion—operating	$	9	$	8	$	25	$	23
Accretion—non-operating (Note 5)		2		2		7		6
Reclamation estimate revisions—non-operating (Note 5)		13		1		74		18

	$	24	$	11	$	106	$	47

Reclamation estimate revisions for the first nine months of 2008 primarily relate to an increase in the reclamation liability at the former Mt. Leyshon and Midnite mine sites. The Mt. Leyshon reclamation revision was for site characterization, stabilization and long-term surface water management due to overflow discharge from heavy rain. The Midnite mine reclamation increased in light of the recent decisions made in the U.S. District Court for the Eastern District of Washington. Reclamation estimate revisions for the first nine months of 2007 relate primarily to the former Resurrection and Empire mines.

NEWMONT MINING CORPORATION

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

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

NOTE 23 NET CHANGE IN OPERATING ASSETS AND LIABILITIES

Net cash provided from (used in) operating activities attributable to the net change in operating assets and liabilities is composed of the following:


	Nine Months Ended September 30,
	2008			2007
Decrease (increase) in operating assets:
Trade and accounts receivable	$	23		$	(152	)
Inventories, stockpiles and ore on leach pads		(246	)		(37	)
Other assets		(159	)		(4	)
Decrease in operating liabilities:
Accounts payable and other accrued liabilities		(38	)		(556	)
Reclamation liabilities		(83	)		(36	)

	$	(503	)	$	(785	)

The decrease in accounts payable and other accrued liabilities in 2007 includes $276 from the settlement of pre-acquisition Australian income taxes of Normandy and $174 from the final settlement of copper collar contracts.

NEWMONT MINING CORPORATION

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

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

NOTE 24 SEGMENT INFORMATION

Financial information relating to Newmont’s segments is as follows:

Three Months Ended September 30, 2008


	Nevada			Yanacocha			Australia/ New Zealand			Batu Hijau			Africa			Other Operations
Sales, net:
Gold	$	471		$	378		$	273		$	24		$	117		$	39
Copper	$	—		$	—		$	—		$	90		$	—		$	—
Cost applicable to sales:
Gold	$	271		$	159		$	178		$	20		$	55		$	39
Copper	$	—		$	—		$	—		$	88		$	—		$	—
Amortization:
Gold	$	65		$	43		$	33		$	4		$	16		$	5
Copper	$	—		$	—		$	—		$	16		$	—		$	—
Other	$	—		$	—		$	—		$	—		$	—		$	—
Accretion	$	1		$	3		$	2		$	2		$	1		$	—
Exploration	$	—		$	—		$	—		$	—		$	—		$	—
Advanced projects, research and development	$	3		$	1		$	2		$	2		$	3		$	—
Write-down of investments	$	—		$	—		$	2		$	—		$	—		$	—
Other expense	$	14		$	10		$	10		$	21		$	6		$	3
Other income, net	$	3		$	2		$	17		$	1		$	4		$	—
Interest expense, net of capitalized interest	$	—		$	3		$	—		$	5		$	—		$	—
Pre-tax income (loss) before minority interest and equity loss of affiliates	$	118		$	162		$	62		$	(44	)	$	41		$	(10	)
Equity loss of affiliates	$	—		$	—		$	(1	)	$	—		$	—		$	—
Capital expenditures	$	87		$	48		$	253		$	11		$	17		$	6

	Total Operations			Hope Bay			Exploration			Corporate and Other			Consolidated
Sales, net:
Gold	$	1,302		$	—		$	—		$	—		$	1,302
Copper	$	90		$	—		$	—		$	—		$	90
Cost applicable to sales:
Gold	$	722		$	—		$	—		$	—		$	722
Copper	$	88		$	—		$	—		$	—		$	88
Amortization:
Gold	$	166		$	—		$	—		$	—		$	166
Copper	$	16		$	—		$	—		$	—		$	16
Other	$	—		$	—		$	—		$	7		$	7
Accretion	$	9		$	—		$	—		$	—		$	9
Exploration	$	—		$	—		$	57		$	—		$	57
Advanced projects, research and development	$	11		$	16		$	—		$	18		$	45
Write-down of investments	$	2		$	—		$	—		$	32		$	34
Other expense	$	64		$	—		$	—		$	9		$	73
Other income, net	$	27		$	1		$	30		$	42		$	100
Interest expense, net of capitalized interest	$	8		$	—		$	—		$	18		$	26
Pre-tax income (loss) before minority interest and equity loss of affiliates	$	329		$	(16	)	$	(28	)	$	(73	)	$	212
Equity loss of affiliates	$	(1	)	$	—		$	—		$	—		$	(1	)
Capital expenditures	$	422		$	33		$	—		$	3		$	458

NEWMONT MINING CORPORATION

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

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

Three Months Ended September 30, 2007


	Nevada			Yanacocha			Australia/ New Zealand			Batu Hijau		Africa		Other Operations
Sales, net:
Gold	$	392		$	245		$	189		$	140	$	76	$	27
Copper	$	—		$	—		$	—		$	547	$	—	$	—
Cost applicable to sales:
Gold	$	245		$	118		$	132		$	28	$	49	$	15
Copper	$	—		$	—		$	—		$	105	$	—	$	—
Midas redevelopment	$	10		$	—		$	—		$	—	$	—	$	—
Amortization:
Gold	$	48		$	42		$	27		$	5	$	11	$	4
Copper	$	—		$	—		$	—		$	24	$	—	$	—
Other	$	—		$	—		$	—		$	—	$	—	$	—
Accretion	$	1		$	3		$	2		$	2	$	—	$	—
Exploration	$	—		$	—		$	—		$	—	$	—	$	—
Advanced projects, research and development	$	1		$	2		$	2		$	1	$	4	$	—
Other expense, net	$	13		$	14		$	6		$	6	$	3	$	(3	)
Other income, net	$	4		$	3		$	8		$	1	$	1	$	8
Interest expense, net of capitalized interest	$	—		$	1		$	(2	)	$	9	$	—	$	1
Pre-tax income (loss) before minority interest and equity income (loss) of affiliates	$	87		$	68		$	28		$	507	$	11	$	18
Equity income (loss) of affiliates	$	—		$	—		$	(3	)	$	—	$	—	$	—
Capital expenditures	$	176		$	67		$	144		$	19	$	38	$	4

	Total Operations			Exploration			Corporate and Other			Consolidated
Sales, net:
Gold	$	1,069		$	—		$	—		$	1,069
Copper	$	547		$	—		$	—		$	547
Cost applicable to sales:
Gold	$	587		$	—		$	—		$	587
Copper	$	105		$	—		$	—		$	105
Midas redevelopment	$	10		$	—		$	—		$	10
Amortization:
Gold	$	137		$	—		$	—		$	137
Copper	$	24		$	—		$	—		$	24
Other	$	—		$	—		$	6		$	6
Accretion	$	8		$	—		$	—		$	8
Exploration	$	—		$	47		$	—		$	47
Advanced projects, research and development	$	10		$	—		$	6		$	16
Other expense, net	$	39		$	—		$	3		$	42
Other income, net	$	25		$	—		$	21		$	46
Interest expense, net of capitalized interest	$	9		$	—		$	19		$	28
Pre-tax income (loss) before minority interest and equity income (loss) of affiliates	$	719		$	(48	)	$	(56	)	$	615
Equity income (loss) of affiliates	$	(3	)	$	—		$	3		$	—
Capital expenditures	$	448		$	—		$	1		$	449

NEWMONT MINING CORPORATION

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

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


Nine Months Ended September 30, 2008

	Nevada			Yanacocha			Australia/ New Zealand			Batu Hijau			Africa			Other Operations
Sales, net:
Gold	$	1,457		$	1,265		$	815		$	171		$	321		$	122
Copper	$	—		$	—		$	—		$	705		$	—		$	—
Cost applicable to sales:
Gold	$	724		$	488		$	504		$	76		$	150		$	76
Copper	$	—		$	—		$	—		$	342		$	—		$	—
Amortization:
Gold	$	175		$	131		$	89		$	15		$	47		$	14
Copper	$	—		$	—		$	—		$	67		$	—		$	—
Other	$	—		$	—		$	2		$	—		$	—		$	—
Accretion	$	4		$	8		$	5		$	6		$	1		$	1
Exploration	$	—		$	—		$	—		$	—		$	—		$	—
Advanced projects, research and development	$	6		$	4		$	6		$	2		$	8		$	3
Write-down of investments	$	—		$	—		$	2		$	—		$	—		$	—
Other expense	$	29		$	51		$	70		$	37		$	12		$	4
Other income, net	$	7		$	9		$	39		$	3		$	13		$	—
Interest expense, net of capitalized interest	$	—		$	6		$	—		$	18		$	—		$	1
Pre-tax income (loss) before minority interest and equity loss of affiliates	$	524		$	587		$	174		$	315		$	116		$	23
Equity loss of affiliates	$	—		$	—		$	(6	)	$	—		$	—		$	—
Capital expenditures	$	259		$	125		$	721		$	72		$	85		$	22

	Total Operations			Hope Bay			Exploration			Corporate and Other			Consolidated
Sales, net:
Gold	$	4,151		$	—		$	—		$	1		$	4,152
Copper	$	705		$	—		$	—		$	—		$	705
Cost applicable to sales:
Gold	$	2,018		$	—		$	—		$	—		$	2,018
Copper	$	342		$	—		$	—		$	—		$	342
Amortization:
Gold	$	471		$	—		$	—		$	—		$	471
Copper	$	67		$	—		$	—		$	—		$	67
Other	$	2		$	—		$	—		$	15		$	17
Accretion	$	25		$	—		$	—		$	—		$	25
Exploration	$	—		$	—		$	155		$	—		$	155
Advanced projects, research and development	$	29		$	29		$	1		$	55		$	114
Write-down of investments	$	2		$	—		$	—		$	88		$	90
Other expense	$	203		$	—		$	—		$	51		$	254
Other income, net	$	71		$	1		$	31		$	87		$	190
Interest expense, net of capitalized interest	$	25		$	—		$	—		$	48		$	73
Pre-tax income (loss) before minority interest and equity loss of affiliates	$	1,739		$	(29	)	$	(126	)	$	(266	)	$	1,318
Equity loss of affiliates	$	(6	)	$	—		$	—		$	—		$	(6	)
Capital expenditures	$	1,284		$	63		$	—		$	8		$	1,355

NEWMONT MINING CORPORATION

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

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


Nine Months Ended September 30, 2007
	Nevada			Yanacocha			Australia/ New Zealand			Batu Hijau		Africa		Other Operations
Sales, net:
Gold	$	1,102		$	750		$	574		$	255	$	239	$	95
Copper	$	—		$	—		$	—		$	1,100	$	—	$	—
Cost applicable to sales:
Gold	$	770		$	368		$	411		$	74	$	135	$	45
Copper	$	—		$	—		$	—		$	356	$	—	$	—
Loss on settlement of price-capped forward sales contracts	$	—		$	—		$	—		$	—	$	—	$	—
Midas redevelopment	$	10		$	—		$	—		$	—	$	—	$	—
Amortization:
Gold	$	169		$	124		$	80		$	16	$	34	$	12
Copper	$	—		$	—		$	—		$	78	$	—	$	—
Other	$	—		$	—		$	2		$	—	$	—	$	—
Accretion	$	4		$	7		$	6		$	5	$	—	$	1
Exploration	$	—		$	—		$	—		$	—	$	—	$	—
Advanced projects, research and development	$	3		$	6		$	4		$	1	$	13	$	—
Other expense, net	$	31		$	42		$	28		$	17	$	8	$	(12	)
Other income, net	$	7		$	14		$	16		$	6	$	2	$	9
Interest expense, net of capitalized interest	$	—		$	3		$	—		$	29	$	1	$	1
Pre-tax income (loss) before minority interest and equity income (loss) of affiliates	$	131		$	214		$	59		$	784	$	51	$	55
Equity income (loss) of affiliates	$	—		$	—		$	(5	)	$	—	$	—	$	—
Capital expenditures	$	453		$	181		$	368		$	43	$	94	$	12

	Total Operations			Exploration			Corporate and Other			Consolidated
Sales, net:
Gold	$	3,015		$	—		$	1		$	3,016
Copper	$	1,100		$	—		$	—		$	1,100
Cost applicable to sales:
Gold	$	1,803		$	—		$	—		$	1,803
Copper	$	356		$	—		$	—		$	356
Loss on settlement of price-capped forward sales contracts	$	—		$	—		$	531		$	531
Midas redevelopment	$	10		$	—		$	—		$	10
Amortization:
Gold	$	435		$	—		$	—		$	435
Copper	$	78		$	—		$	—		$	78
Other	$	2		$	—		$	17		$	19
Accretion	$	23		$	—		$	—		$	23
Exploration	$	—		$	132		$	—		$	132
Advanced projects, research and development	$	27		$	—		$	18		$	45
Other expense, net	$	114		$	—		$	56		$	170
Other income, net	$	54		$	1		$	45		$	100
Interest expense, net of capitalized interest	$	34		$	—		$	43		$	77
Pre-tax income (loss) before minority interest and equity income (loss) of affiliates	$	1,294		$	(133	)	$	(728	)	$	433
Equity income (loss) of affiliates	$	(5	)	$	—		$	5		$	—
Capital expenditures	$	1,151		$	—		$	8		$	1,159

NEWMONT MINING CORPORATION

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

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



	At September 30, 2008		At December 31, 2007
Goodwill:
Australia/New Zealand	$	188	$	186

Total assets:
Nevada	$	3,249	$	3,104
Yanacocha		2,047		1,908
Australia/New Zealand		2,480		1,876
Batu Hijau		2,322		2,471
Africa		1,186		1,082
Other operations		174		157
Hope Bay		1,848		1,566
Exploration		43		24
Corporate and other		3,348		3,386

Total assets from continuing operations		16,697		15,574
Assets held for sale		1		24

	$	16,698	$	15,598

NEWMONT MINING CORPORATION

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

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

NOTE 25 CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

Newmont USA, a 100% owned subsidiary of Newmont Mining Corporation, has fully and unconditionally guaranteed certain publicly traded notes. The following condensed consolidating financial statements are provided for Newmont USA, as guarantor, and for Newmont Mining Corporation, as issuer, as an alternative to providing separate financial statements for the guarantor. The accounts of Newmont Mining Corporation are presented using the equity method of accounting for investments in subsidiaries.


	Three Months Ended September 30, 2008
Condensed Consolidating Statement of Income	Newmont Mining Corporation			Newmont USA			Other Subsidiaries			Eliminations			Newmont Mining Corporation Consolidated
Revenues
Sales—gold, net	$	—		$	911		$	391		$	—		$	1,302
Sales—copper, net		—			90			—			—			90

		—			1,001			391			—			1,392

Costs and expenses
Costs applicable to sales—gold ⁽¹⁾		—			490			237			(5	)		722
Costs applicable to sales—copper ⁽¹⁾		—			88			—			—			88
Amortization		—			138			51			—			189
Accretion		—			7			2			—			9
Exploration		—			34			23			—			57
Advanced projects, research and development		—			15			31			(1	)		45
General and administrative		—			29			2			6			37
Write-down of investments		—			—			34			—			34
Other expense, net		1			56			16			—			73

		1			857			396			—			1,254

Other income (expense)
Other income, net		(24	)		39			85			—			100
Interest income—intercompany		77			2			—			(79	)		—
Interest expense—intercompany		(2	)		—			(77	)		79			—
Interest expense, net of capitalized interest		(7	)		(19	)		—			—			(26	)

		44			22			8			—			74

Income from continuing operations before taxes, minority interest and equity loss of affiliates		43			166			3			—			212
Income tax benefit (expense)		12			(25	)		10			—			(3	)
Minority interest in income of subsidiaries		—			(33	)		(5	)		7			(31	)
Equity income (loss) of affiliates		122			3			17			(143	)		(1	)

Income (loss) from continuing operations		177			111			25			(136	)		177
Income (loss) from discontinued operations		19			3			—			(3	)		19

Net income (loss)	$	196		$	114		$	25		$	(139	)	$	196

⁽¹⁾	Exclusive of Amortization and Accretion.

NEWMONT MINING CORPORATION

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

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


	Three Months Ended September 30, 2007
Condensed Consolidating Statement of Income	Newmont Mining Corporation			Newmont USA			Other Subsidiaries			Eliminations			Newmont Mining Corporation Consolidated
Revenues
Sales—gold, net	$	—		$	804		$	265		$	—		$	1,069
Sales—copper, net		—			547			—			—			547

		—			1,351			265			—			1,616

Costs and expenses
Costs applicable to sales—gold ⁽¹⁾		—			406			187			(6	)		587
Costs applicable to sales—copper ⁽¹⁾		—			105			—			—			105
Midas redevelopment		—			10			—			—			10
Amortization		—			130			38			(1	)		167
Accretion		—			6			2			—			8
Exploration		—			27			20			—			47
Advanced projects, research and development		—			7			9			—			16
General and administrative		—			28			2			7			37
Other expense, net		—			37			5			—			42

		—			756			263			—			1,019

Other income (expense)
Other income (expense), net		12			37			(3	)		—			46
Interest income—intercompany		85			(15	)		—			(70	)		—
Interest expense—intercompany		(3	)		—			(67	)		70			—
Interest expense, net of capitalized interest		(15	)		(12	)		(1	)		—			(28	)

		79			10			(71	)		—			18

Income (loss) from continuing operations before taxes, minority interest and equity income of affiliates		79			605			(69	)		—			615
Income tax expense		(41	)		(43	)		(2	)		—			(86	)
Minority interest in income of subsidiaries		—			(229	)		1			30			(198	)
Equity income (loss) of affiliates		293			4			66			(363	)		—

Income (loss) from continuing operations		331			337			(4	)		(333	)		331
Income (loss) from discontinued operations		66			16			49			(65	)		66

Net income (loss)	$	397		$	353		$	45		$	(398	)	$	397

⁽¹⁾	Exclusive of Midas redevelopment, Amortization and Accretion.

NEWMONT MINING CORPORATION

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

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


	Nine Months Ended September 30, 2008
Condensed Consolidating Statement of Income	Newmont Mining Corporation			Newmont USA			Other Subsidiaries			Eliminations			Newmont Mining Corporation Consolidated
Revenues
Sales—gold, net	$	—		$	3,015		$	1,137		$	—		$	4,152
Sales—copper, net		—			705			—			—			705

		—			3,720			1,137			—			4,857

Costs and expenses
Costs applicable to sales—gold ⁽¹⁾		—			1,366			667			(15	)		2,018
Costs applicable to sales—copper ⁽¹⁾		—			342			—			—			342
Amortization		—			416			140			(1	)		555
Accretion		—			19			6			—			25
Exploration		—			94			61			—			155
Advanced projects, research and development		—			39			76			(1	)		114
General and administrative		—			82			4			17			103
Write-down of investments		—			—			90			—			90
Other expense, net		1			171			82			—			254

		1			2,529			1,126			—			3,656

Other income (expense)
Other income, net		(33	)		92			131			—			190
Interest income—intercompany		222			22			—			(244	)		—
Interest expense—intercompany		(6	)		—			(238	)		244			—
Interest expense, net of capitalized interest		(27	)		(41	)		(5	)		—			(73	)

		156			73			(112	)		—			117

Income (loss) from continuing operations before taxes, minority interest and equity loss of affiliates		155			1,264			(101	)		—			1,318
Income tax (expense) benefit		(57	)		(188	)		44			—			(201	)
Minority interest in income of subsidiaries		—			(304	)		3			10			(291	)
Equity income (loss) of affiliates		722			4			89			(821	)		(6	)

Income (loss) from continuing operations		820			776			35			(811	)		820
Income (loss) from discontinued operations		23			4			3			(7	)		23

Net income (loss)	$	843		$	780		$	38		$	(818	)	$	843

⁽¹⁾	Exclusive of Amortization and Accretion.

NEWMONT MINING CORPORATION

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

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


	Nine Months Ended September 30, 2007
Condensed Consolidating Statement of Income	Newmont Mining Corporation			Newmont USA			Other Subsidiaries			Eliminations			Newmont Mining Corporation Consolidated
Revenues
Sales—gold, net	$	—		$	2,194		$	822		$	—		$	3,016
Sales—copper, net		—			1,100			—			—			1,100

		—			3,294			822			—			4,116

Costs and expenses
Costs applicable to sales—gold ⁽¹⁾		—			1,256			560			(13	)		1,803
Costs applicable to sales—copper ⁽¹⁾		—			356			—			—			356
Loss on settlement of price-capped forward sales contracts		—			531			—			—			531
Midas redevelopment		—			10			—			—			10
Amortization		—			417			116			(1	)		532
Accretion		—			16			7			—			23
Exploration		—			85			47			—			132
Advanced projects, research and development		—			23			22			—			45
General and administrative		—			88			2			14			104
Other expense, net		—			145			25			—			170

		—			2,927			779			—			3,706

Other income (expense)
Other income (expense), net		29			85			(14	)		—			100
Interest income—intercompany		151			36			—			(187	)		—
Interest expense—intercompany		(6	)		—			(181	)		187			—
Interest expense, net of capitalized interest		(33	)		(36	)		(8	)		—			(77	)

		141			85			(203	)		—			23

Income (loss) from continuing operations before taxes, minority interest and equity income of affiliates		141			452			(160	)		—			433
Income tax (expense) benefit		(62	)		(93	)		44			—			(111	)
Minority interest in income of subsidiaries		—			(383	)		(7	)		38			(352	)
Equity (loss) income of affiliates		(109	)		4			36			69			—

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