Edgar Filing: NEWMONT MINING CORP /DE/

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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 March 31, 2012

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

For the transition period from to

Commission File Number: 001-31240

LOGO

NEWMONT MINING CORPORATION

(Exact name of registrant as specified in its charter)


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

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

(303) 863-7414

Registrant’s telephone number, including area code

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

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

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

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

There were 490,629,352 shares of common stock outstanding on April 18, 2012 (and 4,914,758 exchangeable shares).

TABLE OF CONTENTS


	Page
PART I

ITEM 1. FINANCIAL STATEMENTS		1

Condensed Consolidated Statements of Income		1
Condensed Consolidated Statements of Comprehensive Income		2
Condensed Consolidated Statements of Cash Flows		3
Condensed Consolidated Balance Sheets		4
Notes to Condensed Consolidated Financial Statements		5

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		38

Overview		38
Selected Financial and Operating Results		40
Consolidated Financial Results		41
Results of Consolidated Operations		46
Liquidity and Capital Resources		49
Environmental		52
Accounting Developments		52
Non-GAAP Financial Measures		53
Safe Harbor Statement		55

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		56

ITEM 4. CONTROLS AND PROCEDURES		58

PART II

ITEM 1. LEGAL PROCEEDINGS		59

ITEM 1A. RISK FACTORS		59

ITEM 2. ISSUER PURCHASES OF EQUITY SECURITIES		59

ITEM 3. DEFAULTS UPON SENIOR SECURITIES		59

ITEM 4. MINE SAFETY DISCLOSURES		59

ITEM 5. OTHER INFORMATION		60

ITEM 6. EXHIBITS		60

SIGNATURES		61

EXHIBIT INDEX		62

PART I—FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS.

NEWMONT MINING CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(unaudited, in millions except per share)


	Three Months Ended
	March 31,
	2012			2011
Sales (Note 3)	$	2,683		$	2,465

Costs and expenses
Costs applicable to sales ⁽¹⁾ (Note 3)		1,017			940
Amortization (Note 3)		231			256
Reclamation and remediation (Note 4)		16			14
Exploration		88			62
Advanced projects, research and development		102			68
General and administrative		54			45
Other expense, net (Note 5)		120			73

		1,628			1,458

Other income (expense)
Other income, net (Note 6)		33			31
Interest expense, net		(52	)		(65	)

		(19	)		(34	)

Income before income and mining tax and other items		1,036			973
Income and mining tax expense (Note 9)		(343	)		(305	)
Equity income (loss) of affiliates		(19	)		2

Income from continuing operations		674			670
Loss from discontinued operations (Note 10)		(71	)		—

Net income		603			670
Net income attributable to noncontrolling interests (Note 11)		(113	)		(156	)

Net income attributable to Newmont stockholders	$	490		$	514

Net income attributable to Newmont stockholders:
Continuing operations	$	561		$	514
Discontinued operations		(71	)		—

	$	490		$	514

Income per common share (Note 12)
Basic:
Continuing operations	$	1.13		$	1.04
Discontinued operations		(0.14	)		—

	$	0.99		$	1.04

Diluted:
Continuing operations	$	1.11		$	1.03
Discontinued operations		(0.14	)		—

	$	0.97		$	1.03

Cash dividends declared per common share	$	0.35		$	0.15

⁽¹⁾	Excludes Amortization and Reclamation and remediation.

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

NEWMONT MINING CORPORATION

STATEMENTS OF CONDENSED CONSOLIDATED COMPREHENSIVE INCOME (LOSS)

(unaudited, in millions)


	Three Months Ended March 31,
	2012			2011
	(in millions)
Net income	$	603		$	670
Other comprehensive income (loss):
Unrealized gain (loss) on marketable securities, net of $23 and $(28) tax benefit (expense), respectively		(40	)		168
Foreign currency translation adjustments		10			89
Change in pension and other post-retirement benefits, net of $2 and $1 tax benefit, respectively		4			4
Change in fair value of cash flow hedge instruments, net of $26 and $11 tax expense, respectively
Net change from periodic revaluations		69			55
Net amount reclassified to income		(35	)		(33	)

Net unrecognized gain on derivatives		34			22

Other comprehensive income		8			283

Comprehensive income	$	611		$	953

Comprehensive income attributable to:
Newmont stockholders	$	496		$	795
Noncontrolling interests		115			158

	$	611		$	953

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)


	Three Months Ended March 31,
	2012			2011
Operating activities:
Net income	$	603		$	670
Adjustments:
Amortization		231			256
Loss from discontinued operations		71			—
Reclamation and remediation		16			14
Deferred income taxes		(55	)		(33	)
Stock based compensation and other non-cash benefits		17			19
Impairment of marketable securities		24			—
Gain on asset sales, net		(10	)		(3	)
Other operating adjustments and write-downs		72			45
Net change in operating assets and liabilities (Note 22)		(356	)		21

Net cash provided from continuing operations		613			989
Net cash used in discontinued operations		(4	)		—

Net cash provided from operations		609			989

Investing activities:
Additions to property, plant and mine development		(696	)		(402	)
Purchases of marketable securities		(143	)		(12	)
Acquisitions, net		(11	)		(7	)
Proceeds from sale of other assets		12			6
Other		(17	)		(3	)

Net cash used in investing activities		(855	)		(418	)

Financing activities:
Proceeds from debt, net		3,346			—
Repayment of debt		(1,907	)		(31	)
Payment of conversion premium on debt		(172	)		—
Dividends paid to common stockholders		(173	)		(74	)
Dividends paid to noncontrolling interests		—			(15	)
Proceeds from stock issuance, net		2			3
Other		(2	)		—

Net cash provided from (used in) financing activities		1,094			(117	)

Effect of exchange rate changes on cash		4			23

Net change in cash and cash equivalents		852			477
Cash and cash equivalents at beginning of period		1,760			4,056

Cash and cash equivalents at end of period	$	2,612		$	4,533

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

NEWMONT MINING CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited, in millions)


	At March 31,		At December 31,
	2012		2011
ASSETS
Cash and cash equivalents	$	2,612	$	1,760
Trade receivables		349		300
Accounts receivable		362		320
Investments (Note 16)		179		94
Inventories (Note 17)		699		714
Stockpiles and ore on leach pads (Note 18)		744		671
Deferred income tax assets		263		396
Other current assets (Note 19)		884		1,133

Current assets		6,092		5,388
Property, plant and mine development, net		16,364		15,881
Investments (Note 16)		1,479		1,472
Stockpiles and ore on leach pads (Note 18)		2,470		2,271
Deferred income tax assets		1,652		1,605
Other long-term assets (Note 19)		904		857

Total assets	$	28,961	$	27,474

LIABILITIES
Debt (Note 20)	$	69	$	689
Accounts payable		497		561
Employee-related benefits		245		307
Income and mining taxes		343		250
Other current liabilities (Note 21)		1,417		2,133

Current liabilities		2,571		3,940
Debt (Note 20)		6,081		3,624
Reclamation and remediation liabilities (Note 4)		1,263		1,169
Deferred income tax liabilities		2,100		2,147
Employee-related benefits		484		459
Other long-term liabilities (Note 21)		397		364

Total liabilities		12,896		11,703

Commitments and contingencies (Note 25)
EQUITY
Common stock		785		784
Additional paid-in capital		8,263		8,408
Accumulated other comprehensive income		658		652
Retained earnings		3,369		3,052

Newmont stockholders’ equity		13,075		12,896
Noncontrolling interests		2,990		2,875

Total equity		16,065		15,771

Total liabilities and equity	$	28,961	$	27,474

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 for the year ended December 31, 2011 filed February 24, 2012 on Form 10-K. The year-end balance sheet data was derived from the audited financial statements and, in accordance with the instructions to Form 10-Q, certain information and footnote disclosures required by United States generally accepted accounting principles (“GAAP”) have been condensed or omitted.

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

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Recently Adopted Accounting Pronouncements

Goodwill Impairment

In September 2011, the ASC guidance was issued related to goodwill impairment. Under the updated guidance, an entity will have the option to first assess qualitatively whether it is necessary to perform the current two-step goodwill impairment test. If the Company believes, as a result of its qualitative assessment, that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, the quantitative impairment test is required. Otherwise, no further testing is required. The update does not change how the Company performs the two-step impairment test under current guidance. The Company’s January 1, 2012 adoption of the guidance had no impact on the Company’s consolidated financial position, results of operations or cash flows.

Fair Value Accounting

In May 2011, ASC guidance was issued related to disclosures around fair value accounting. The updated guidance clarifies different components of fair value accounting including the application of the highest and best use and valuation premise concepts, measuring the fair value of an instrument classified in a reporting entity’s shareholders’ equity and disclosing quantitative information about the unobservable inputs used in fair value measurements that are categorized in Level 3 of the fair value hierarchy. The Company’s January 1, 2012 adoption of the updated guidance had no impact on the Company’s consolidated financial position, results of operations or cash flows.

NEWMONT MINING CORPORATION

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

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

NOTE 3 SEGMENT INFORMATION


	Sales		Costs Applicable to Sales		Amortization		Advanced Projects and Exploration		Pre-Tax Income			Total Assets		Capital Expenditures⁽¹⁾
Three Months Ended March 31, 2012
Nevada	$	723	$	267	$	53	$	34	$	369		$	7,092	$	157
La Herradura		93		32		5		6		45			371		21
Hope Bay		—		—		—		—		(50	)		108		—
Other North America		—		—		—		—		(2	)		67		—

North America		816		299		58		40		362			7,638		178

Yanacocha		594		161		50		17		349			2,745		93
Conga		—		—		—		27		(27	)		1,254		147
Other South America		—		—		—		25		(25	)		42		—

South America		594		161		50		69		297			4,041		240

Boddington:
Gold		298		137		32		N/A		N/A			N/A		N/A
Copper		61		30		6		N/A		N/A			N/A		N/A

Total		359		167		38		3		143			4,661		23

Batu Hijau:
Gold		34		19		3		N/A		N/A			N/A		N/A
Copper		172		85		16		N/A		N/A			N/A		N/A

Total		206		104		19		7		48			3,671		33

Other Australia/New Zealand		427		190		36		15		179			1,300		70
Other Asia Pacific		—		—		1		6		5			695		3

Asia Pacific		992		461		94		31		375			10,327		129

Ahafo		281		96		24		11		150			1,277		50
Akyem		—		—		—		4		(5	)		653		85
Other Africa		—		—		—		2		(2	)		5		—

Africa		281		96		24		17		143			1,935		135

Corporate and Other		—		—		5		33		(141	)		5,020		38

Consolidated	$	2,683	$	1,017	$	231	$	190	$	1,036		$	28,961	$	720

⁽¹⁾	Includes an increase in accrued capital expenditures of $24; consolidated capital expenditures on a cash basis were $696.

NEWMONT MINING CORPORATION

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

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


	Sales		Costs Applicable to Sales		Amortization		Advanced Projects and Exploration		Pre-Tax Income			Total Assets		Capital Expenditures⁽¹⁾
Three Months Ended March 31, 2011
Nevada	$	582	$	272	$	72	$	17	$	216		$	3,414	$	95
La Herradura		65		18		4		6		36			254		16
Hope Bay		—		—		3		44		(48	)		2,259		19
Other North America		—		—		—		—		(2	)		125		—

North America		647		290		79		67		202			6,052		130

Yanacocha		362		153		53		6		149			2,677		41
Conga		—		—		—		3		(4	)		335		64
Other South America		—		—		—		7		(6	)		36		—

South America		362		153		53		16		139			3,048		105

Boddington:
Gold		232		100		28		N/A		N/A			N/A		N/A
Copper		53		28		7		N/A		N/A			N/A		N/A

Total		285		128		35		1		104			4,393		49

Batu Hijau:
Gold		140		34		7		N/A		N/A			N/A		N/A
Copper		369		89		20		N/A		N/A			N/A		N/A

Total		509		123		27		—		323			3,627		40

Other Australia/New Zealand		415		166		35		12		197			1,049		62
Other Asia Pacific		—		—		1		1		—			548		2

Asia Pacific		1,209		417		98		14		624			9,617		153

Ahafo		247		80		22		7		136			1,039		15
Akyem		—		—		—		1		(1	)		320		28
Other Africa		—		—		—		—		(1	)		6		—

Africa		247		80		22		8		134			1,365		43

Corporate and Other		—		—		4		25		(126	)		6,772		14

Consolidated	$	2,465	$	940	$	256	$	130	$	973		$	26,854	$	445

⁽¹⁾	Includes an increase in accrued capital expenditures of $43; consolidated capital expenditures on a cash basis were $402.

NEWMONT MINING CORPORATION

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

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

NOTE 4 RECLAMATION AND REMEDIATION

At March 31, 2012 and December 31, 2011, $1,136 and $1,070, respectively, were accrued for reclamation obligations relating to mineral properties. In addition, the Company is involved in several matters concerning environmental obligations associated with former, primarily historic, mining activities. Generally, these matters concern developing and implementing remediation plans at the various sites involved. At March 31, 2012 and December 31, 2011, $197 and $170, respectively, were accrued for such obligations. These amounts are also included in Reclamation and remediation liabilities.

The following is a reconciliation of Reclamation and remediation liabilities:


	Three Months Ended March 31,
	2012			2011
Balance at beginning of period	$	1,240		$	1,048
Additions, changes in estimates and other		105			1
Liabilities settled		(28	)		(8	)
Accretion expense		16			14

Balance at end of period	$	1,333		$	1,055

The current portion of Reclamation and remediation liabilities of $70 and $71 at March 31, 2012 and December 31, 2011, respectively, are included in Other current liabilities (see Note 21).

The Company’s reclamation and remediation expenses consisted of:


	Three Months Ended March 31,
	2012		2011
Accretion — operating	$	14	$	12
Accretion — non-operating		2		2

	$	16	$	14

NOTE 5 OTHER EXPENSE, NET


	Three Months Ended March 31,
	2012		2011
Hope Bay care and maintenance	$	50	$	—
Regional administration		21		16
Community development		31		17
Western Australia power plant		4		4
World Gold Council Dues		3		2
Indonesian value added tax settlement		—		21
Other		11		13

	$	120	$	73

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 March 31,
	2012			2011
Reduction of allowance for loan receivable	$	21		$	—
Income from developing projects, net		14			24
Gain on asset sales, net		10			3
Canadian Oil Sands		9			6
Refinery income		5			—
Interest		5			4
Ineffective portion of derivative instruments, net		2			(1	)
Foreign currency exchange, net		(15	)		(11	)
Impairment of marketable securities		(24	)		—
Other		6			6

	$	33		$	31

NOTE 7 EMPLOYEE PENSION AND OTHER BENEFIT PLANS


	Three Months Ended March 31,
	2012			2011
Pension benefit costs, net
Service cost	$	7		$	6
Interest cost		10			10
Expected return on plan assets		(11	)		(10	)
Amortization, net		6			5

	$	12		$	11


	Three Months Ended March 31,
	2012		2011
Other benefit costs, net
Service cost	$	1	$	1
Interest cost		1		1

	$	2	$	2

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


	Three Months Ended March 31,
	2012		2011
Stock options	$	4	$	3
Restricted stock units		4		7
Performance leveraged stock units		3		3
Deferred stock		1		2

	$	12	$	15

NOTE 9 INCOME AND MINING TAXES

During the first quarter of 2012, the Company recorded estimated income and mining tax expense of $343 resulting in an effective tax rate of 33%. Estimated income and mining tax expense during the first quarter of 2011 was $305 for an effective tax rate of 31%. The increase in the effective tax rate from 2011 to 2012 is a result of valuation allowances recorded on our Canadian deferred tax assets generated in the quarter. Aside from the above mentioned valuation allowance, the effective tax rates in the first quarter of 2012 and 2011 are different from the United States statutory rate of 35% primarily due to the U.S. percentage depletion deduction.

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

At March 31, 2012, the Company’s total unrecognized tax benefit was $242 for uncertain income tax positions taken or expected to be taken on income tax returns. Of this, $45 represents the amount of unrecognized tax benefits that, if recognized, would affect the Company’s effective income tax rate.

As a result of the statute of limitations that expire in the next 12 months in various jurisdictions, and possible settlements of audit-related issues with taxing authorities in various jurisdictions with respect to which none of the issues are individually significant, the Company believes that it is reasonably possible that the total amount of its net unrecognized income tax benefits will decrease by approximately $25 to $30 in the next 12 months.

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


	Three Months Ended March 31,
	2012						2011
Income before income and mining tax and other items				$	1,036					$	973

Tax on income at 35% statutory rate		35	%	$	363			35	%	$	341

Reconciling items:
Percentage depletion		(7	)		(74	)		(6	)		(55	)
Change in valuation allowance on deferred tax assets		3			33			—			—
Other		2			21			2			19

Income and mining tax expense		33	%	$	343			31	%	$	305

NEWMONT MINING CORPORATION

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

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

NOTE 10 DISCONTINUED OPERATIONS

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

Net operating cash used in discontinued operations of $4 in the first quarter of 2012 relates to payments on the Holt property royalty.

NOTE 11 NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS


	Three Months Ended March 31,
	2012			2011
Yanacocha	$	111		$	56
Batu Hijau		13			102
Other		(11	)		(2	)

	$	113		$	156

At March 31, 2012, Newmont had a 48.5% effective economic interest in PT Newmont Nusa Tenggara (“PTNNT”). PTNNT operates the Batu Hijau copper and gold mine in Indonesia. Based on ASC guidance for variable interest entities, Newmont continues to consolidate PTNNT in its Condensed Consolidated Financial Statements.

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

NEWMONT MINING CORPORATION

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

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

NOTE 12 INCOME PER COMMON SHARE

Basic income per common share is computed by dividing income available to Newmont common stockholders by the weighted average number of common shares outstanding during the period. Diluted income per common share is computed similarly to basic income per common share except that weighted average common shares is increased to include the potential issuance of dilutive common shares.


	Three Months Ended March 31,
	2012			2011
Net income attributable to Newmont stockholders	$	490		$	514

Weighted average common shares (millions):
Basic		495			493
Effect of employee stock-based awards		2			2
Effect of convertible notes		7			6

Diluted		504			501

Net income attributable to Newmont stockholders per common share
Basic:
Continuing operations	$	1.13		$	1.04
Discontinued operations		(0.14	)		—

	$	0.99		$	1.04

Diluted:
Continuing operations	$	1.11		$	1.03
Discontinued operations		(0.14	)		—

	$	0.97		$	1.03

Options to purchase 1 and 2 million shares of common stock at average exercise prices of $59 and $57 were outstanding at March 31, 2012 and 2011, respectively, but were not included in the computation of diluted weighted average common shares because their effect would have been anti-dilutive.

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

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

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 CHANGES IN EQUITY


	Three Months Ended March 31,
	2012			2011
Common stock:
At beginning of period	$	784		$	778
Stock based awards		1			1

At end of period		785			779

Additional paid-in capital:
At beginning of period		8,408			8,279
Stock based awards		27			25
Conversion premium on convertible notes		(172	)		—

At end of period		8,263			8,304

Accumulated other comprehensive income:
At beginning of period		652			1,108
Other comprehensive income		6			281

At end of period		658			1,389

Retained earnings:
At beginning of period		3,052			3,180
Net income attributable to Newmont stockholders		490			514
Dividends paid		(173	)		(74	)

At end of period		3,369			3,620

Noncontrolling interests:
At beginning of period		2,875			2,371
Net income attributable to noncontrolling interests		113			156
Other comprehensive income		2			2

At end of period		2,990			2,529

Total equity	$	16,065		$	16,621

NOTE 14 FAIR VALUE ACCOUNTING

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

Level 1

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

Level 2

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

Level 3

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

NEWMONT MINING CORPORATION

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

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

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


	Fair Value at March 31, 2012
	Total		Level 1		Level 2		Level 3
Assets:
Cash equivalents	$	809	$	809	$	—	$	—
Marketable equity securities:
Extractive industries		1,409		1,409		—		—
Other		15		15		—		—
Marketable debt securities:
Asset backed commercial paper		19		—		—		19
Corporate		144		—		144		—
Auction rate securities		5		—		—		5
Trade receivable from provisional copper and gold concentrate sales, net		222		222		—		—
Derivative instruments, net:
Foreign exchange forward contracts		231		—		231		—
Diesel forward contracts		11		—		11		—

	$	2,865	$	2,455	$	386	$	24

Liabilities:
Boddington contingent consideration		43		—		—		43
Holt property royalty		247		—		—		247

	$	290	$	—	$	—	$	290

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

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

The Company’s marketable debt securities include investments in auction rate securities and asset backed commercial paper. The Company’s corporate marketable debt securities are valued using quoted market prices in non-active markets and as such are classified within Level 2 of the fair value hierarchy. The Company reviews the fair value for auction rate securities and asset backed commercial paper on at least a quarterly basis. The auction rate securities are traded in markets that are not active, trade infrequently and have little price transparency. The Company estimated the fair value of the auction rate securities based on weighted average risk calculations using cash flow assumptions discounted approximately 42%, which reflects an estimated discount for lack of marketability. The Company estimated the fair value of its asset backed commercial paper using a probability of return ranging from 13%-74% for each class of notes, which is reflective of information reviewed regarding the separate classes of securities. As a result of utilizing the unobservable inputs noted above in its fair value estimation of the Company’s auction rate securities and asset backed commercial paper, both fair value estimates are classified within Level 3 of the fair value hierarchy.

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

NEWMONT MINING CORPORATION

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

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

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

The estimated value of the Boddington contingent royalty was determined using a Monte Carlo valuation model which simulates future gold and copper prices and costs applicable to sales. At March 31, 2012 the Company used the following long-term price assumptions: 1) $1,500 per ounce gold price, 2) $3.50 per pound copper price, 3) $90 per barrel of oil, and 4) a $1.00 A$/US$ exchange rate. The Company used an approximately 4% discount rate in the model. The contingent royalty liability is classified within Level 3 of the fair value hierarchy.

The estimated fair value of the Holt sliding scale royalty was determined using a Monte Carlo valuation model to simulate future gold prices utilizing a long-term gold price assumption of $1,500 per ounce, various gold production scenarios based on publicly available reserve and resource information for the Holt property and an approximately 4% weighted average discount rate. The sliding scale royalty liability is classified within Level 3 of the fair value hierarchy.

The table below sets forth a summary of changes in the fair value of the Company’s Level 3 financial assets and liabilities for the three months ended March 31, 2012:


	Auction Rate Securities		Asset Backed Commercial Paper		Total Assets		Boddington Contingent Royalty			Holt Property Royalty			Total Liabilities
Balance at beginning of period	$	5	$	19	$	24	$	54		$	176		$	230
Settlements		—		—		—		(11	)		(4	)		(15	)
Revaluation		—		—		—		—			75			75

Balance at end of period	$	5	$	19	$	24	$	43		$	247		$	290

At March 31, 2012, assets and liabilities classified within Level 3 of the fair value hierarchy represent 1% and 100%, respectively, of total assets and liabilities measured at fair value.

NOTE 15 DERIVATIVE INSTRUMENTS

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

Cash Flow Hedges

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

Foreign Currency Contracts

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

NEWMONT MINING CORPORATION

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

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

In June 2011, Newmont began hedging a portion of the Company’s A$ denominated capital expenditures related to the construction of the Akyem project in Africa utilizing foreign currency contracts. The hedging instruments are fixed forward contracts with expiration dates ranging up to two years.

In July 2011, Newmont began hedging a portion of the Company’s A$ denominated capital expenditures related to the construction of a mine shaft at Tanami in Australia utilizing foreign currency contracts. The hedging instruments are fixed forward contracts with expiration dates ranging up to three years.

Newmont had the following foreign currency derivative contracts outstanding at March 31, 2012:


	Expected Maturity Date
																			Total/
	2012			2013			2014			2015			2016			2017			Average
A$ Operating Fixed Forward Contracts:
A$ notional (millions)		935			987			701			407			202			11			3,243
Average rate ($/A$)		0.92			0.92			0.90			0.88			0.89			0.89			0.91
Expected hedge ratio		77	%		64	%		46	%		29	%		14	%		4	%
A$ Capital Fixed Forward Contracts:
A$ notional (millions)		42			51			22			—			—			—			115
Average rate ($/A$)		1.00			0.98			0.96			—			—			—			0.98
Expected hedge ratio		41	%		24	%		48	%		—			—			—
NZ$ Operating Fixed Forward Contracts:
NZ$ notional (millions)		48			29			2			—			—			—			79
Average rate ($/NZ$)		0.76			0.78			0.77			—			—			—			0.77
Expected hedge ratio		48	%		23	%		5	%		—			—			—

Diesel Fixed Forward Contracts

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

Newmont had the following diesel derivative contracts outstanding at March 31, 2012:


	Expected Maturity Date
													Total/
	2012			2013			2014			2015			Average
Diesel Fixed Forward Contracts:
Diesel gallons (millions)		20			14			6			1			41
Average rate ($/gallon)		2.89			2.94			2.91			2.90			2.90
Expected hedge ratio		60	%		32	%		14	%		5	%

Forward Starting Swap Contracts

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

NEWMONT MINING CORPORATION

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

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

Fair Value Hedges

Interest Rate Swap Contracts

Newmont had $222 fixed to floating swap contracts designated as a hedge against 8 5/8% debentures which matured in May 2011.

Derivative Instrument Fair Values

Newmont had the following derivative instruments designated as hedges at March 31, 2012 and December 31, 2011:


	Fair Value
	At March 31, 2012
	Other Current Assets		Other Long- Term Assets		Other Current Liabilities		Other Long- Term Liabilities
Foreign currency exchange contracts:
A$ operating fixed forwards	$	119	$	113	$	2	$	4
A$ capital fixed forwards		1		1		—		—
NZ$ operating fixed forwards		3		—		—		—
Diesel fixed forwards		9		2		—		—

Total derivative instruments (Note 19 and 21)	$	132	$	116	$	2	$	4


	Fair Value
	At December 31, 2011
	Other Current Assets		Other Long- Term Assets		Other Current Liabilities		Other Long- Term Liabilities
Foreign currency exchange contracts:
A$ operating fixed forwards	$	121		112		6		4
A$ capital fixed forwards		—		—		—		1
NZ$ operating fixed forwards		2		—		1		—
Diesel fixed forwards		4		—		2		1
Forward starting interest rate swaps		—		—		399		—

Total derivative instruments (Note 19 and 21)	$	127	$	112	$	408	$	6

NEWMONT MINING CORPORATION

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

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

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


	Foreign Currency Exchange Contracts				Diesel Forward Contracts				Forward Starting Swaps
	2012		2011		2012		2011		2012			2011
For the three months ended March 31,
Cash flow hedging relationships:
Gain recognized in other comprehensive income (effective portion)	$	62	$	67	$	12	$	15	$	36		$	—
Gain(loss) reclassified from Accumulated other comprehensive income into income (effective portion) (1)		47		42		3		4		(1	)		—
Gain reclassified from Accumulated other comprehensive loss into income (ineffective portion) (2)		—		—		—		—		2			—

⁽¹⁾

The gain for the effective portion of foreign exchange and diesel cash flow hedges reclassified from Accumulated other comprehensive income is included in Costs applicable to sales. The loss for the effective portion of forward starting swaps reclassified from Accumulated other comprehensive income is included in Interest Expense.

⁽²⁾	The ineffective portion recognized for cash flow hedges is included in Other Income, net.


	Interest Rate Swap Contracts					8 5/8% Debentures (Hedged Portion)
	2012		2011			2012		2011
For the three months ended March 31,
Fair value hedging relationships:
Gain(loss) recognized in income (effective portion) ⁽¹⁾	$	—	$	2		$	—	$	(5	)
Loss recognized in income (ineffective portion) ⁽²⁾		—		(1	)		—		—

⁽¹⁾	The gain(loss) recognized for the effective portion of fair value hedges and the underlying hedged debt is included in Interest expense, net.

⁽²⁾	The ineffective portion recognized for fair value hedges and the underlying hedged debt is included in Other income, net.

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 gain of approximately $70.

Provisional Copper and Gold Sales

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

LME copper prices averaged $3.77 per pound during the first quarter of 2012, compared with the Company’s recorded average provisional price of $3.75 per pound before mark-to-market gains and treatment and refining charges. During the first quarter of 2012, changes in copper prices resulted in a provisional pricing mark-to-market gain of $31 ($0.53 per pound). At March 31, 2012, Newmont had copper sales of 58 million pounds priced at an average of $3.83 per pound, subject to final pricing over the next several months.

The average London P.M. fix for gold was $1,691 per ounce during the first quarter of 2012, consistent with the Company’s recorded average provisional price before mark-to-market gains and treatment and refining charges. During the first quarter of 2012, changes in gold prices resulted in a provisional pricing mark-to-market gain of $6 ($4 per ounce). At March 31, 2012, Newmont had gold sales of 95,000 ounces priced at an average of $1,663 per ounce, subject to final pricing over the next several 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 16 INVESTMENTS


	At March 31, 2012
	Cost/Equity		Unrealized					Fair/Equity
	Basis		Gain		Loss			Basis
Current:
Marketable Equity Securities:
Paladin Energy Ltd.	$	60	$	40	$	—		$	100
Other		15		10		(1	)		24

		75		50		(1	)		124

Marketable Debt Securities:
Corporate		55		—		—			55

	$	130	$	50	$	(1	)	$	179

Long-term:
Marketable Debt Securities:
Asset backed commercial paper	$	25	$	—	$	(6	)	$	19
Auction rate securities		8		—		(3	)		5
Corporate		87		2		—			89

		120		2		(9	)		113

Marketable Equity Securities:
Canadian Oil Sands Ltd.		309		342		—			651
Gabriel Resources Ltd.		78		161		—			239
Regis Resources Ltd.		36		278		—			314
Other		80		18		(2	)		96

		503		799		(2	)		1,300

Other investments, at cost		11		—		—			11

Investment in Affiliates:
La Zanja		55		—		—			55

	$	689	$	801	$	(11	)	$	1,479

NEWMONT MINING CORPORATION

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

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


	At December 31, 2011
	Cost/Equity		Unrealized					Fair/Equity
	Basis		Gain		Loss			Basis
Current:
Marketable Equity Securities:
Paladin Energy Ltd.	$	60	$	13	$	—		$	73
Other		15		7		(1	)		21

	$	75	$	20	$	(1	)	$	94

Long-term:
Marketable Debt Securities:
Asset backed commercial paper	$	25	$	—	$	(6	)	$	19
Auction rate securities		7		—		(2	)		5
Corporate		10		1		—			11

		42		1		(8	)		35

Marketable Equity Securities:
Canadian Oil Sands Trust		302		401		—			703
Gabriel Resources Ltd.		76		236		—			312
Regis Resources Ltd.		36		218		—			254
Other		92		16		(17	)		91

		506		871		(17	)		1,360

Other investments, at cost		11		—		—			11
Investment in Affiliates:
La Zanja		66		—		—			66

	$	625	$	872	$	(25	)	$	1,472

Included in Investments at March 31, 2012 and December 31, 2011 are $1 and $11, respectively, of long-term marketable debt securities and $15 and $4 of long-term marketable equity securities, respectively, that are legally pledged for purposes of settling asset retirement obligations related to the San Jose Reservoir at Yanacocha.

During the first quarter of 2012, the Company recognized impairments for other-than-temporary declines in value of $24 for marketable equity securities.

NEWMONT MINING CORPORATION

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

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

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


	Less than 12 Months				12 Months or Greater				Total
At March 31, 2012	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Marketable equity securities	$	24	$	3	$	—	$	—	$	24	$	3
Asset backed commercial paper		—		—		19		6		19		6
Auction rate securities		—		—		5		3		5		3

	$	24	$	3	$	24	$	9	$	48	$	12


	Less than 12 Months				12 Months or Greater				Total
At December 31, 2011	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Asset backed commercial paper	$	—	$	—	$	19	$	6	$	19	$	6
Auction rate securities		—		—		5		2		5		2
Marketable equity securities		42		18		—		—		42		18

	$	42	$	18	$	24	$	8	$	66	$	26

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

NOTE 17 INVENTORIES


	At March 31,		At December 31,
	2012		2011
In-process	$	112	$	159
Concentrate		123		116
Precious metals		35		12
Materials, supplies and other		429		427

	$	699	$	714

NEWMONT MINING CORPORATION

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

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

NOTE 18 STOCKPILES AND ORE ON LEACH PADS


	At March 31,		At December 31,
	2012		2011
Current:
Stockpiles	$	527	$	506
Ore on leach pads		217		165

	$	744	$	671

Long-term:
Stockpiles	$	2,091	$	1,904
Ore on leach pads		379		367

	$	2,470	$	2,271


	At March 31,		At December 31,
	2012		2011
Stockpiles and ore on leach pads:
Nevada	$	563	$	536
La Herradura		9		6
Yanacocha		600		512
Boddington		482		435
Batu Hijau		1,220		1,119
Other Australia/New Zealand		157		161
Ahafo		183		173

	$	3,214	$	2,942

NOTE 19 OTHER ASSETS


	At March 31,		At December 31,
	2012		2011
Other current assets:
Refinery metal inventory and receivable	$	500	$	796
Derivative instruments		132		127
Prepaid assets		126		93
Note receivable		33		12
Restricted cash		2		20
Other		91		85

	$	884	$	1,133

Other long-term assets:
Goodwill	$	188	$	188
Intangible assets		144		147
Income tax receivable		142		142
Derivative instruments		116		112
Debt issuance costs		79		59
Restricted cash		49		48
Other receivables		19		17
Other		167		144

	$	904	$	857

NEWMONT MINING CORPORATION

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

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

NOTE 20 DEBT


	At March 31, 2012				At December 31, 2011
	Current		Non-Current		Current		Non-Current
Sale-leaseback of refractory ore treatment plant	$	59	$	—	$	165	$	—
Corporate revolving credit facility (due 2016)		—		—		—		33
2012 Convertible Senior Notes, net of discount		—		—		514		—
2014 Convertible Senior Notes, net of discount		—		517		—		512
2017 Convertible Senior Notes, net of discount		—		457		—		452
2019 Senior Notes, net of discount		—		896		—		896
2022 Senior Notes, net of discount		—		1,489		—		—
2035 Senior Notes, net of discount		—		598		—		598
2039 Senior Notes, net of discount		—		1,087		—		1,087
2042 Senior Notes, net of discount		—		991		—		—
Ahafo project facility		10		45		10		45
Other capital leases		—		1		—		1

	$	69	$	6,081	$	689	$	3,624

Scheduled minimum debt repayments are $69 for the remainder of 2012, $10 in 2013, $527 in 2014, $10 in 2015, $10 in 2016 and $5,524 thereafter.

2012 Convertible Senior Notes

In February 2012, the Company’s 2012 Convertible Senior Notes matured, resulting in a principal payment of $517. The Company elected to pay the conversion premium of $172 in cash, in lieu of issuing common shares.

2022 and 2042 Senior Notes

In March 2012, the Company completed a two part public offering of $1,500 and $1,000 uncollateralized Senior Notes maturing on March 15, 2022 and March 15, 2042, respectively. Net proceeds from the 2022 and 2042 Senior Notes were $1,479 and $983, respectively. The 2022 Senior Notes pay interest semi-annually at a rate of 3.50% per annum and the 2042 Senior Notes pay semi-annual interest of 4.875% per annum.

Consistent with the Company’s other Notes included in the table above, the 2022 and 2042 Senior Notes contain various covenants and default provisions including payment defaults, limitation on liens, limitation on sales and leaseback agreements and merger restrictions.

NEWMONT MINING CORPORATION

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

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

NOTE 21 OTHER LIABILITIES


	At March 31,		At December 31,
	2012		2011
Other current liabilities:
Refinery metal payable	$	500	$	796
Accrued capital expenditures		267		248
Accrued operating costs		256		231
Taxes other than income and mining		86		93
Reclamation and remediation liabilities		70		71
Deferred income tax		57		50
Royalties		43		53
Boddington contingent consideration		39		24
Holt property royalty		21		17
Interest		12		55
Derivative instruments		2		408
Other		64		87

	$	1,417	$	2,133

Other long-term liabilities:
Holt property royalty	$	226	$	159
Income and mining taxes		86		88
Power supply agreements		46		45
Derivative instruments		4		6
Boddington contingent consideration		4		30
Other		31		36

	$	397	$	364

NOTE 22 NET CHANGE IN OPERATING ASSETS AND LIABILITIES

Net cash provided from operations attributable to the net change in operating assets and liabilities is composed of the following:


	Three Months Ended March 31,
	2012			2011
Decrease (increase) in operating assets:
Trade and accounts receivable	$	(21	)	$	119
Inventories, stockpiles and ore on leach pads		(201	)		(56	)
EGR refinery assets		319			(175	)
Other assets		(74	)		(38	)
Increase (decrease) in operating liabilities:
Accounts payable and other accrued liabilities		(32	)		4
EGR refinery liabilities		(319	)		175
Reclamation liabilities		(28	)		(8	)

	$	(356	)	$	21

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 SUPPLEMENTAL CASH FLOW INFORMATION


	Three Months Ended March 31,
	2012		2011
Income and mining taxes, net of refunds	$	296	$	278
Interest, net of amounts capitalized	$	23	$	20

NOTE 24 CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

Newmont USA, a 100% owned subsidiary of Newmont Mining Corporation, has fully and unconditionally guaranteed the 2019, 2022, 2035, 2039 and 2042 Senior Notes, the 2014 and 2017 Convertible Senior Notes and the corporate revolving credit facility. The following consolidating financial statements are provided for Newmont USA, as guarantor, and for Newmont Mining Corporation, as issuer, as an alternative to providing separate financial statements for the guarantor. The accounts of Newmont Mining Corporation are presented using the equity method of accounting for investments in subsidiaries.

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 March 31, 2012
													Newmont
	Newmont												Mining
	Mining			Newmont			Other						Corporation
Condensed Consolidating Statement of Income	Corporation			USA			Subsidiaries			Eliminations			Consolidated
Sales	$	—		$	1,617		$	1,066		$	—		$	2,683

Costs and expenses
Costs applicable to sales ⁽¹⁾		—			563			465			(11	)		1,017
Amortization		—			130			101			—			231
Reclamation and remediation		—			11			5			—			16
Exploration		—			53			35			—			88
Advanced projects, research and development		—			88			14			—			102
General and administrative		—			42			1			11			54
Other expense, net		—			47			73			—			120

		—			934			694			—			1,628

Other income (expense)
Other income, net		(3	)		13			23			—			33
Interest income — intercompany		40			2			5			(47	)		—
Interest expense — intercompany		(5	)		—			(42	)		47			—
Interest expense, net		(46	)		(5	)		(1	)		—			(52	)

		(14	)		10			(15	)		—			(19	)

Income before income and mining tax and other items		(14	)		693			357			—			1,036
Income and mining tax expense		5			(146	)		(202	)		—			(343	)
Equity income (loss) of affiliates		499			(11	)		67			(574	)		(19	)

Income (loss) from continuing operations		490			536			222			(574	)		674
Income (loss) from discontinued operations		—			4			(75	)		—			(71	)

Net income		490			540			147			(574	)		603
Net income attributable to noncontrolling interests		—			(116	)		(32	)		35			(113	)

Net income attributable to Newmont stockholders	$	490		$	424		$	115		$	(539	)	$	490

Comprehensive income	$	496		$	541		$	139		$	(565	)	$	611
Comprehensive income attributable to noncontrolling interests		—			(116	)		(34	)		35			(115	)

Comprehensive income attributable to Newmont stockholders	$	496		$	425		$	105		$	(530	)	$	496

⁽¹⁾	Excludes Amortization and Reclamation and remediation.

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 March 31, 2011
													Newmont
	Newmont												Mining
	Mining			Newmont			Other						Corporation
Condensed Consolidating Statement of Income	Corporation			USA			Subsidiaries			Eliminations			Consolidated
Sales	$	—		$	1,518		$	947		$	—		$	2,465

Costs and expenses
Costs applicable to sales ⁽¹⁾		—			566			384			(10	)		940
Amortization		—			159			97			—			256
Reclamation and remediation		1			10			3			—			14
Exploration		—			34			28			—			62
Advanced projects, research and development		—			27			41			—			68
General and administrative		—			34			1			10			45
Other expense, net		—			54			19			—			73

		1			884			573			—			1,458

Other income (expense)
Other income, net		(5	)		25			11			—			31
Interest income - intercompany		36			2			2			(40	)		—
Interest expense - intercompany		(3	)		—			(37	)		40			—
Interest expense, net		(54	)		(9	)		(2	)		—			(65	)

		(26	)		18			(26	)		—			(34	)

Income before income and mining tax and other items		(27	)		652			348			—			973
Income and mining tax expense		10			(208	)		(107	)		—			(305	)
Equity income (loss) of affiliates		531			1			89			(619	)		2

Net income		514			445			330			(619	)		670
Net income attributable to noncontrolling interests		—			(192	)		(20	)		56			(156	)

Net income attributable to Newmont stockholders	$	514		$	253		$	310		$	(563	)	$	514

Comprehensive income	$	795		$	462		$	595		$	(899	)	$	953
Comprehensive income attributable to noncontrolling interests		—			(192	)		(22	)		56			(158	)

Comprehensive income attributable to Newmont stockholders	$	795		$	270		$	573		$	(843	)	$	795

⁽¹⁾	Excludes Amortization and Reclamation and remediation.

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 March 31, 2012
													Newmont
	Newmont												Mining
	Mining			Newmont			Other						Corporation
Condensed Consolidating Statement of Cash Flows	Corporation			USA			Subsidiaries			Eliminations			Consolidated
Operating activities:
Net income (loss)	$	490		$	540		$	147		$	(574	)	$	603
Adjustments		13			60			(281	)		574			366
Net change in operating assets and liabilities		(45	)		(298	)		(13	)		—			(356	)

Net cash provided from (used in) continuing operations		458			302			(147	)		—			613
Net cash used in discontinued operations		—			—			(4	)		—			(4	)

Net cash provided from (used in) operations		458			302			(151	)		—			609

Investing activities:
Additions to property, plant and mine development		—			(479	)		(217	)		—			(696	)
Purchases of marketable securities		—			(143	)		—			—			(143	)
Acquisitions, net		—			—			(11	)		—			(11	)
Proceeds from sale of other assets		—			8			4			—			12
Other		—			—			(17	)		—			(17	)

Net cash used in investing activities		—			(614	)		(241	)		—			(855	)

Financing activities:
Net borrowings (repayments)		1,547			(106	)		(2	)		—			1,439
Payment of conversion premium on debt		(172	)		—			—			—			(172	)
Net intercompany borrowings (repayments)		(1,662	)		1,164			498			—			—
Dividends paid to common stockholders		(173	)		—			—			—			(173	)
Proceeds from stock issuance, net		2			—			—			—			2
Other		—			—			(2	)		—			(2	)

Net cash provided from (used in) financing activities		(458	)		1,058			494			—

Large accelerated filer

Accelerated filer

Non-accelerated filer

¨ (Do not check if a smaller reporting company.)

Smaller reporting company