Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

 

 

Form 10-Q

 

 

(Mark One)

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

For the Quarterly Period Ended June 30, 2014

or

 

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

For the transition period from                      to                     

Commission File Number: 001-31240

 

 

NEWMONT MINING CORPORATION

(Exact name of registrant as specified in its charter)

 

 

 

Delaware		84-1611629
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)
6363 South Fiddler’s Green Circle Greenwood Village, Colorado		80111
(Address of Principal Executive Offices)		(Zip Code)

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

 

 

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

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

 

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

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

There were 498,758,930 shares of common stock outstanding on July 18, 2014.

 

 

 

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Table of Contents

TABLE OF CONTENTS

 

				Page
PART I
ITEM 1.		FINANCIAL STATEMENTS			1
		Condensed Consolidated Statements of Operations			1
		Condensed Consolidated Statements of Comprehensive Income (Loss)			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 RESULTS OF OPERATIONS AND FINANCIAL CONDITION			43
		Overview			43
		Selected Financial and Operating Results			45
		Consolidated Financial Results			46
		Results of Consolidated Operations			52
		Liquidity and Capital Resources			62
		Environmental			65
		Accounting Developments			66
		Non-GAAP Financial Measures			66
		Safe Harbor Statement			74
ITEM 3.		QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			74
ITEM 4.		CONTROLS AND PROCEDURES			76
PART II
ITEM 1.		LEGAL PROCEEDINGS			77
ITEM 1A.		RISK FACTORS			77
ITEM 2.		ISSUER PURCHASES OF EQUITY SECURITIES			77
ITEM 3.		DEFAULTS UPON SENIOR SECURITIES			77
ITEM 4.		MINE SAFETY DISCLOSURES			77
ITEM 5.		OTHER INFORMATION			78
ITEM 6.		EXHIBITS			78
SIGNATURES					79
EXHIBIT INDEX					80

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PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

NEWMONT MINING CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in millions except per share)

 

		Three Months Ended June 30,								Six Months Ended June 30,
		2014				2013				2014				2013
Sales (Note 3)		$	1,765			$	2,018			$	3,529			$	4,206
Costs and expenses
Costs applicable to sales (1) (Note 3)			1,060				1,682				2,143				2,739
Depreciation and amortization			306				415				604				682
Reclamation and remediation (Note 4)			21				18				41				36
Exploration			41				76				75				135
Advanced projects, research and development			42				46				84				98
General and administrative			48				54				93				110
Write-downs (Note 5)			13				2,261				13				2,262
Other expense, net (Note 6)			51				77				103				176
			1,582				4,629				3,156				6,238
Other income (expense)
Other income, net (Note 7)			3				50				49				76
Interest expense, net			(94	)			(70	)			(187	)			(135	)
			(91	)			(20	)			(138	)			(59	)
Income (loss) before income and mining tax and other items			92				(2,631	)			235				(2,091	)
Income and mining tax benefit (expense) (Note 8)			53				287				(25	)			107
Equity income (loss) of affiliates			2				(3	)			2				(7	)
Income (loss) from continuing operations			147				(2,347	)			212				(1,991	)
Income (loss) from discontinued operations (Note 9)			(2	)			74				(19	)			74
Net income (loss)			145				(2,273	)			193				(1,917	)
Net loss (income) attributable to noncontrolling interests (Note 10)			35				214				87				172
Net income (loss) attributable to Newmont stockholders		$	180			$	(2,059	)		$	280			$	(1,745	)
Net income (loss) attributable to Newmont stockholders:
Continuing operations		$	182			$	(2,133	)		$	299			$	(1,819	)
Discontinued operations			(2	)			74				(19	)			74
		$	180			$	(2,059	)		$	280			$	(1,745	)
Income (loss) per common share (Note 11)
Basic:
Continuing operations		$	0.37			$	(4.29	)		$	0.60			$	(3.66	)
Discontinued operations			(0.01	)			0.15				(0.04	)			0.15
		$	0.36			$	(4.14	)		$	0.56			$	(3.51	)
Diluted:
Continuing operations		$	0.37			$	(4.29	)		$	0.60			$	(3.66	)
Discontinued operations			(0.01	)			0.15				(0.04	)			0.15
		$	0.36			$	(4.14	)		$	0.56			$	(3.51	)
Cash dividends declared per common share		$	0.025			$	0.35			$	0.175			$	0.775

 

(1)	Excludes Depreciation and amortization and Reclamation and remediation.

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

 

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NEWMONT MINING CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited, in millions)

 

		Three Months Ended June 30,								Six Months Ended June 30,
		2014				2013				2014				2013
Net income (loss)		$	145			$	(2,273	)		$	193			$	(1,917	)
Other comprehensive income (loss):
Unrealized gain (loss) on marketable securities, net of $0, $(77), $(1) and $(115) tax benefit (expense), respectively			(55	)			(227	)			(86	)			(279	)
Foreign currency translation adjustments			7				(10	)			2				(22	)
Change in pension and other post-retirement benefits, net of $1, $3, $2 and $8 tax benefit, respectively			1				6				3				11
Change in fair value of cash flow hedge instruments, net of $9, $(130), $13 and $(145) tax benefit (expense), respectively
Net change from periodic revaluations			25				(258	)			34				(237	)
Net amount reclassified to income			(13	)			(11	)			(13	)			(35	)
Net unrecognized gain (loss) on derivatives			12				(269	)			21				(272	)
Other comprehensive income (loss)			(35	)			(500	)			(60	)			(562	)
Comprehensive income (loss)		$	110			$	(2,773	)		$	133			$	(2,479	)
Comprehensive income (loss) attributable to:
Newmont stockholders		$	143			$	(2,560	)		$	220			$	(2,307	)
Noncontrolling interests			(33	)			(213	)			(87	)			(172	)
		$	110			$	(2,773	)		$	133			$	(2,479	)

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

 

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NEWMONT MINING CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in millions)

 

		Six Months Ended June 30,
		2014				2013
Operating activities:
Net income (loss)		$	193			$	(1,917	)
Adjustments:
Depreciation and amortization			604				682
Stock based compensation and other non-cash benefits			27				38
Reclamation and remediation			41				36
Loss (income) from discontinued operations			19				(74	)
Write-downs			13				2,262
Impairment of marketable securities			1				11
Deferred income taxes			(92	)			(480	)
Gain on asset and investment sales, net			(52	)			(1	)
Other operating adjustments and write-downs			260				632
Net change in operating assets and liabilities (Note 24)			(453	)			(457	)
Net cash provided from continuing operations			561				732
Net cash used in discontinued operations			(6	)			(11	)
Net cash provided from operations			555				721
Investing activities:
Additions to property, plant and mine development			(489	)			(1,120	)
Acquisitions, net			(28	)			(13	)
Sale of marketable securities			25				1
Purchases of marketable securities			(1	)			(1	)
Proceeds from sale of other assets			76				49
Other			(11	)			(21	)
Net cash used in investing activities			(428	)			(1,105	)
Financing activities:
Proceeds from debt, net			18				987
Repayment of debt			(5	)			(534	)
Proceeds from stock issuance, net			—				2
Sale of noncontrolling interests			68				32
Acquisition of noncontrolling interests			(4	)			(10	)
Dividends paid to noncontrolling interests			(4	)			(2	)
Dividends paid to common stockholders			(89	)			(385	)
Other			(11	)			(3	)
Net cash provided from (used in) financing activities			(27	)			87
Effect of exchange rate changes on cash			(2	)			(16	)
Net change in cash and cash equivalents			98				(313	)
Cash and cash equivalents at beginning of period			1,555				1,561
Cash and cash equivalents at end of period		$	1,653			$	1,248

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

 

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NEWMONT MINING CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited, in millions)

 

		At June 30,				At December 31,
		2014				2013
ASSETS
Cash and cash equivalents		$	1,653			$	1,555
Trade receivables			147				230
Accounts receivable			299				252
Investments (Note 16)			84				78
Inventories (Note 17)			863				717
Stockpiles and ore on leach pads (Note 18)			775				805
Deferred income tax assets			287				246
Other current assets (Note 19)			1,246				1,006
Current assets			5,354				4,889
Property, plant and mine development, net			14,043				14,277
Investments (Note 16)			347				439
Stockpiles and ore on leach pads (Note 18)			2,773				2,680
Deferred income tax assets			1,611				1,478
Other long-term assets (Note 19)			848				844
Total assets		$	24,976			$	24,607
LIABILITIES
Debt (Note 20)		$	112			$	595
Accounts payable			435				478
Employee-related benefits			232				341
Income and mining taxes			52				13
Other current liabilities (Note 21)			1,421				1,313
Current liabilities			2,252				2,740
Debt (Note 20)			6,673				6,145
Reclamation and remediation liabilities (Note 4)			1,531				1,513
Deferred income tax liabilities			730				635
Employee-related benefits			345				323
Other long-term liabilities (Note 21)			354				342
Total liabilities			11,885				11,698
Commitments and contingencies (Note 26)
EQUITY
Common stock			798				789
Additional paid-in capital			8,636				8,538
Accumulated other comprehensive income (loss)			(242	)			(182	)
Retained earnings			1,039				848
Newmont stockholders’ equity			10,231				9,993
Noncontrolling interests			2,860				2,916
Total equity			13,091				12,909
Total liabilities and equity		$	24,976			$	24,607

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

 

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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, 2013 filed on June 13, 2014 on Form 8-K. The year-end balance sheet data was derived from the audited financial statements and, in accordance with the instructions to Form 10-Q, certain information and footnote disclosures required by United States generally accepted accounting principles (“GAAP”) have been condensed or omitted. References to “A$” refer to Australian currency, “C$” to Canadian currency and “NZ$” to New Zealand currency.

On February 18, 2014 the Company redeemed all outstanding exchangeable shares (other than those held by Newmont and its affiliates). On the date of the redemption, holders of exchangeable shares received, in exchange for each exchangeable share, one share of common stock of Newmont. At December 31, 2013, the value of the remaining outstanding exchangeable shares was included in Additional paid-in capital and Common shares.

Certain amounts in prior years have been reclassified to conform to the 2014 presentation.

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Risks and Uncertainties

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

We are currently subject to an export ban at our Batu Hijau copper mine in Indonesia. In early 2014, the Indonesian government issued new regulations that impose new export conditions, an export duty and a January 2017 ban on the export of copper concentrate, all of which violate the Contract of Work signed by the Government of Indonesia and PT Newmont Nusa Tenggara (“PTNNT”) and the bilateral investment treaty between Indonesia and the Netherlands. While the 2009 mining law preserves the validity of PTNNT’s Contract of Work (the investment agreement entered into by PTNNT and the Indonesian government in 1986, which includes the right to export copper concentrates and a prohibition against new taxes, duties, and levies), the Indonesian government has stated its intention to enforce the new regulations on PTNNT’s operations and has not yet recognized PTNNT’s rights to export copper concentrate and only pay the taxes, duties, and levies specified in the Contract of Work. The Company believes that these new 2014 regulations conflict with the Contract of Work. Although PTNNT is continuing to engage with government officials in Indonesia in an effort to resolve this issue and gain clarity on implementation of the new regulations, the Company can make no assurances that the new regulations will not continue to impact operations or outlook for the Batu Hijau operation for an extended period. In June 2014, the Company invoked the force majeure clause in its Contract of Work due to these export issues and placed the Batu Hijau operations on care and maintenance. In July 2014, the Company filed international arbitration against the Government of Indonesia.

As a result of placing the Batu Hijau copper mine on care and maintenance, we have evaluated, and will continue to evaluate, the need for asset impairments, inventory write-downs, tax valuation allowances and other applicable accounting charges due to the status of the mine. PTNNT will continue to incur various costs during the care and maintenance period.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

 

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

 

Recently Adopted Accounting Pronouncements

Discontinued Operations

In April 2014, ASC guidance was issued related to Discontinued Operations which changed the criteria for determining which disposals can be presented as discontinued operations and modified related disclosure requirements. The updated guidance requires an entity to only classify discontinued operations due to a major strategic shift or a major effect on an entity’s operations in the financial statements. The updated guidance will also require additional disclosures relating to discontinued operations. The Company early adopted this guidance prospectively at the beginning of fiscal year January 1, 2014. Adoption of the new guidance did not have an impact on the consolidated financial position, results of operations or cash flows.

Presentation of an Unrecognized Tax Benefit

In July 2013, ASC guidance was issued related to the presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss or a tax credit carryforward exists. The updated guidance requires an entity to net its unrecognized tax benefits against the deferred tax assets for all same jurisdiction net operating loss carryforward, a similar tax loss, or tax credit carryforwards. A gross presentation will be required only if such carryforwards are not available or would not be used by the entity to settle any additional income taxes resulting from disallowance of the uncertain tax position. Adoption of the new guidance, effective for the fiscal year beginning January 1, 2014, had no impact on the consolidated financial position, results of operations or cash flows.

Foreign Currency Matters

In March 2013, ASC guidance was issued related to foreign currency matters to clarify the treatment of cumulative translation adjustments when a parent sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a business within a foreign entity. The updated guidance also resolves the diversity in practice for the treatment of business combinations achieved in stages in a foreign entity. Adoption of the new guidance, effective for the fiscal year beginning January 1, 2014, had no impact on the consolidated financial position, results of operations or cash flows.

Recently Issued Accounting Pronouncements

Stock based compensation

In June 2014, ASU guidance was issued to resolve the diversity of practice relating to the accounting for stock based performance awards that the performance target could be achieved after the employee completes the required service period. The update is effective prospectively or retrospectively beginning January 1, 2015. The Company does not expect the updated guidance to have an impact on the consolidated financial position, results of operations or cash flows.

Revenue Recognition

In May 2014, ASU guidance was issued related to revenue from contracts with customers. The new standard provides a five-step approach to be applied to all contracts with customers and also requires expanded disclosures about revenue recognition. The ASU is effective for annual reporting periods beginning after December 15, 2016, including interim periods and is to be retrospectively applied. Early adoption is not permitted. The Company is currently evaluating this guidance and the impact it will have on its consolidated financial statements.

 

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

 

NOTE 3 SEGMENT INFORMATION

The Company’s reportable segments are based upon the Company’s management structure that is focused on the geographic region for the Company’s operations. Geographic regions include North America, South America, Australia/New Zealand, Indonesia, Africa and Corporate and Other. Segment results for 2013 have been retrospectively revised to reflect a change in our reportable segments to align with a change in the chief operating decision makers’ evaluation of the organization, effective in the first quarter of 2014. The Nevada operations have been revised to reflect Carlin, Phoenix, and Twin Creeks segments and Other Australia/New Zealand operations have been revised to reflect Tanami, Jundee, Waihi and Kalgoorlie segments. The Conga development project will be reported in the Other South America segment. The Nimba and Merian development projects, historically reported in Other Africa and Other South America, respectively, will be reported in Corporate and Other. The financial information relating to the Company’s segments for all periods presented have been updated to reflect these changes.

On July 1, 2014, the Company completed the sale of its Jundee underground gold mine in Australia to Northern Star Resources Limited for total proceeds of approximately $94. As of June 30, 2014, total assets and total liabilities were $119 and $50, respectively.

 

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

 

		Sales				Costs Applicable to Sales				Depreciation and Amortization				Advanced Projects and Exploration				Pre-Tax Income (Loss)
Three Months Ended June 30, 2014
Carlin		$	268			$	209			$	43			$	7			$	3
Phoenix:
Gold			72				35				9
Copper			39				30				5
Total			111				65				14				—				30
Twin Creeks			125				49				9				3				62
La Herradura			59				26				10				2				20
Other North America			—				—				—				6				(7	)
North America			563				349				76				18				108
Yanacocha			240				184				84				9				(53	)
Other South America			—				—				—				9				(24	)
South America			240				184				84				18				(77	)
Boddington:
Gold			190				133				24
Copper			38				32				6
Total			228				165				30				—				27
Tanami			119				63				18				4				33
Jundee			97				43				17				—				37
Waihi			52				19				7				1				24
Kalgoorlie			96				65				4				2				22
Other Australia/New Zealand			—				—				5				1				(13	)
Australia/New Zealand			592				355				81				8				130
Batu Hijau:
Gold			10				9				3
Copper			59				54				17
Total			69				63				20				1				(33	)
Other Indonesia			—				—				—				—				(1	)
Indonesia			69				63				20				1				(34	)
Ahafo			156				65				17				5				71
Akyem			145				44				21				—				74
Other Africa			—				—				—				3				(5	)
Africa			301				109				38				8				140
Corporate and Other			—				—				7				30				(175	)
Consolidated		$	1,765			$	1,060			$	306			$	83			$	92

 

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

 

		Sales				Costs Applicable to Sales				Depreciation and Amortization				Advanced Projects and Exploration				Pre-Tax Income (Loss)
Three Months Ended June 30, 2013
Carlin		$	290			$	169			$	27			$	8			$	80
Phoenix:
Gold			80				37				8
Copper			25				15				3
Total			105				52				11				3				37
Twin Creeks			188				80				22				3				80
La Herradura			71				42				7				15				8
Other North America			—				—				—				13				(17	)
North America			654				343				67				42				188
Yanacocha			420				201				97				10				83
Other South America			—				—				—				2				(5	)
South America			420				201				97				12				78
Boddington:
Gold			249				252				59
Copper			49				62				14
Total			298				314				73				—				(2,200	)
Tanami			83				64				17				3				(116	)
Jundee			105				51				21				3				30
Waihi			34				25				8				1				—
Kalgoorlie			110				123				8				1				(17	)
Other Australia/New Zealand			—				—				3				4				(25	)
Australia/New Zealand			630				577				130				12				(2,328	)
Batu Hijau:
Gold			15				63				13
Copper			99				413				81
Total			114				476				94				5				(477	)
Other Indonesia			—				—				—				—				(1	)
Indonesia			114				476				94				5				(478	)
Ahafo			200				85				20				11				84
Akyem			—				—				—				2				(2	)
Other Africa			—				—				—				4				(8	)
Africa			200				85				20				17				74
Corporate and Other			—				—				7				34				(165	)
Consolidated		$	2,018			$	1,682			$	415			$	122			$	(2,631	)

 

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

 

		Sales				Costs Applicable to Sales				Depreciation and Amortization				Advanced Projects and Exploration				Pre-Tax Income (Loss)				Capital Expenditures(1)
Six Months Ended June 30, 2014
Carlin		$	561			$	401			$	78			$	11			$	64			$	102
Phoenix:
Gold			142				69				14
Copper			71				56				8
Total			213				125				22				1				59				16
Twin Creeks			257				104				20				4				173				60
La Herradura			90				42				18				6				23				14
Other North America			—				—				—				12				(16	)			6
North America			1,121				672				138				34				303				198
Yanacocha			505				405				185				16				(140	)			35
Other South America			—				—				—				17				(32	)			15
South America			505				405				185				33				(172	)			50
Boddington:
Gold			410				275				49
Copper			77				72				12
Total			487				347				61				—				64				46
Tanami			224				118				35				5				61				38
Jundee			179				85				34				1				58				15
Waihi			85				38				12				1				31				5
Kalgoorlie			214				142				10				3				55				5
Other Australia/New Zealand			—				—				9				2				(25	)			4
Australia/New Zealand			1,189				730				161				12				244				113
Batu Hijau:
Gold			18				17				5
Copper			101				111				30
Total			119				128				35				2				(84	)			31
Other Indonesia			—				—				—				—				(1	)			—
Indonesia			119				128				35				2				(85	)			31
Ahafo			297				126				33				14				115				60
Akyem			298				82				42				—				162				—
Other Africa			—				—				—				5				(8	)			—
Africa			595				208				75				19				269				60
Corporate and Other			—				—				10				59				(324	)			12
Consolidated		$	3,529			$	2,143			$	604			$	159			$	235			$	464

 

(1)	Includes a decrease in accrued capital expenditures of $25; consolidated capital expenditures on a cash basis were $489.

 

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

 

		Sales				Costs Applicable to Sales				Depreciation and Amortization				Advanced Projects and Exploration				Pre-Tax Income (Loss)				Capital Expenditures(1)
Six Months Ended June 30, 2013
Carlin		$	641			$	348			$	59			$	19			$	208			$	119
Phoenix:
Gold			133				78				15
Copper			36				26				5
Total			169				104				20				7				33				68
Twin Creeks			354				132				40				6				172				43
La Herradura			161				82				13				21				45				64
Other North America			—				—				—				21				(26	)			13
North America			1,325				666				132				74				432				307
Yanacocha			875				361				167				23				276				89
Other South America			—				—				—				5				(7	)			161
South America			875				361				167				28				269				250
Boddington:
Gold			578				426				101
Copper			114				110				24
Total			692				536				125				—				(2,085	)			54
Tanami			181				139				33				5				(112	)			44
Jundee			229				105				37				7				80				23
Waihi			84				53				16				2				12				8
Kalgoorlie			230				198				13				2				22				5
Other Australia/New Zealand			—				—				5				8				(37	)			3
Australia/New Zealand			1,416				1,031				229				24				(2,120	)			137
Batu Hijau:
Gold			26				70				15
Copper			169				460				90
Total			195				530				105				11				(481	)			56
Other Indonesia			—				—				—				—				2				—
Indonesia			195				530				105				11				(479	)			56
Ahafo			395				151				37				24				187				117
Akyem			—				—				—				5				(7	)			154
Other Africa			—				—				—				6				(17	)			—
Africa			395				151				37				35				163				271
Corporate and Other			—				—				12				61				(356	)			48
Consolidated		$	4,206			$	2,739			$	682			$	233			$	(2,091	)		$	1,069

 

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

 

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

 

NOTE 4 RECLAMATION AND REMEDIATION

The Company’s Reclamation and remediation expense consisted of:

 

		Three Months Ended June 30,								Six Months Ended June 30,
		2014				2013				2014				2013
Accretion—operating		$	18			$	15			$	36			$	30
Accretion—non-operating			3				3				5				6
		$	21			$	18			$	41			$	36

At June 30, 2014 and December 31, 2013, $1,457 and $1,432, respectively, were accrued for reclamation obligations relating to operating properties. In addition, the Company is involved in several matters concerning environmental obligations associated with former, primarily historic, mining activities. Generally, these matters concern developing and implementing remediation plans at the various sites involved. At June 30, 2014 and December 31, 2013, $165 and $179, respectively, were accrued for such obligations. These amounts are also included in Reclamation and remediation liabilities.

The following is a reconciliation of Reclamation and remediation liabilities:

 

		Six Months Ended June 30,
		2014				2013
Balance at beginning of period		$	1,611			$	1,539
Additions, changes in estimates and other			(7	)			(3	)
Liabilities settled			(23	)			(24	)
Accretion expense			41				36
Balance at end of period		$	1,622			$	1,548

The current portion of Reclamation and remediation liabilities of $91 and $98 at June 30, 2014 and December 31, 2013, respectively, are included in Other current liabilities (see Note 21).

 

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

 

NOTE 5 WRITE-DOWNS

 

		Three Months Ended June 30,								Six Months Ended June 30,
		2014				2013				2014				2013
Property, plant and mine development
Yanacocha		$	—			$	—			$	—			$	1
Other South America			13				—				13				—
Boddington			—				2,107				—				2,107
Tanami			—				66				—				66
Batu Hijau			—				1				—				1
			13				2,174				13				2,175
Other long-term assets
Boddington			—				31				—				31
Tanami			—				56				—				56
			—				87				—				87
		$	13			$	2,261			$	13			$	2,262

Write-downs totaled $13 for the three and six months ended June 30, 2014, and $2,261 and $2,262 for the three and six months ended June 30, 2013, respectively. The 2014 write-downs are primarily related to non-essential equipment in Other South America. The 2013 write-downs were primarily due to a decrease in the Company’s long-term gold and copper price assumptions during the second quarter to $1,400 per ounce and $3.00 per pound, respectively, combined with rising operating costs. These factors represented significant changes in the business, requiring the Company to evaluate for impairment. For purposes of this evaluation, estimates of future cash flows of the individual reporting units were used to determine fair value. The estimated cash flows were derived from life-of-mine plans, developed using long-term pricing reflective of the current price environment and projections for operating costs.

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

NOTE 6 OTHER EXPENSE, NET

 

		Three Months Ended June 30,								Six Months Ended June 30,
		2014				2013				2014				2013
Regional administration		$	16			$	18			$	31			$	36
Community development			15				17				26				30
Restructuring and other			6				21				13				30
Western Australia power plant			1				7				7				11
Transaction/Acquisition costs			—				—				—				45
Other			13				14				26				24
		$	51			$	77			$	103			$	176

 

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

 

NOTE 7 OTHER INCOME, NET

 

		Three Months Ended June 30,								Six Months Ended June 30,
		2014				2013				2014				2013
Gain on Midas sale		$	—			$	—			$	47			$	—
Refinery Income, net			5				4				9				7
Gain on sale of investments, net			1				—				5				—
Development projects, net			—				7				2				8
Interest			1				2				2				6
Canadian Oil Sands dividends			—				11				—				21
Derivative ineffectiveness, net			—				(3	)			—				—
Impairment of marketable securities			—				(7	)			(1	)			(11	)
Foreign currency exchange, net			(10	)			40				(24	)			37
Other			6				(4	)			9				8
		$	3			$	50			$	49			$	76

NOTE 8 INCOME AND MINING TAXES

During the second quarter of 2014, the Company recorded an estimated income and mining tax benefit of $53, resulting in an effective tax rate of (58)%. Estimated income and mining tax benefit during the second quarter of 2013 was $287 for an effective tax rate of 12%. During the first half of 2014, the estimated income and mining tax expense was $25, resulting in an effective tax rate of 10%. Estimated income and mining tax benefit during the first half of 2013 was $107 for an effective tax rate of 7%.

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

 

		Three Months Ended June 30,																Six Months Ended June 30,
		2014								2013								2014								2013
Income (loss) before income and mining tax and other items						$	92							$	(2,631	)						$	235							$	(2,091	)
Tax at statutory rate			35	%		$	32				35	%		$	(921	)			35	%		$	82				35	%		$	(732	)
Reconciling items:
Percentage depletion			(21	)%			(19	)			2	%			(52	)			(13	)%			(30	)			4	%			(93	)
Change in valuation allowance on deferred tax assets			(81	)%			(75	)			(26	)%			723				(27	)%			(62	)			(33	)%			728
Mining and other Taxes			5	%			5				(1	)%			18				3	%			8				(1	)%			36
Disallowed loss on Midas Sale							—								—				6	%			13								—
Effect of foreign earnings, net of credits			3	%			3				(1	)%			20				4	%			9				(1	)%			16
Other			1	%			1				3	%			(75	)			2	%			5				3	%			(62	)
Income and mining tax expense (benefit)			(58	)%		$	(53	)			12	%		$	(287	)			10	%		$	25				7	%		$	(107	)

The difference in effective tax rates is due to the following: (i) a 2014 release of valuation allowance on some of the Company’s tax credits related to the settlement of an income tax audit (ii) a larger impact in 2014 from percentage depletion, partially offset by (iii) a 2014 increase in the rate associated with mining taxes.

 

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

 

A valuation allowance is provided for those deferred tax assets for which it is more likely than not that the related benefits will not be realized. In determining the amount of the valuation allowance, each quarter the Company considers future reversals of existing taxable temporary differences, estimated future taxable income, taxable income in prior carryback year(s), as well as feasible tax planning strategies in each jurisdiction to determine if the deferred tax assets are realizable. If it is determined that the Company will not realize all or a portion of its deferred tax assets, it will place or increase a valuation allowance. Conversely, if determined that it will ultimately be able to realize all or a portion of the related benefits for which a valuation allowance has been provided, all or a portion of the related valuation allowance will be reduced. There are a number of risk factors that could impact the Company’s ability to realize the deferred tax assets. See Note 2, Summary of Significant Accounting Policies, Risks and Uncertainties.

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

At June 30, 2014, the Company’s total unrecognized tax benefit was $396 for uncertain income tax positions taken or expected to be taken on income tax returns. Of this, $33 represents the amount of unrecognized tax benefits that, if recognized, would affect the Company’s effective income tax rate.

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

NOTE 9 DISCONTINUED OPERATIONS

Discontinued operations include Holloway Mining Company, which owned the Holt-McDermott property (“Holt property”) that was sold to St. Andrew Goldfields Ltd. (“St. Andrew”) in 2006. In 2009, the Superior Court issued a decision finding Newmont Canada Corporation (“Newmont Canada”) liable for a sliding scale royalty on production from the Holt property, which was upheld in 2011 by the Ontario Court of Appeal. During the second quarter of 2014, the Company recorded a charge of $2, net of tax benefits of $1, related to a decrease in discount rates offset by a decrease in gold price. During the first half of 2014, the Company recorded a charge from discontinued operations of $19, net of tax benefit of $9, related to an increase in gold price, an increase in expected future production and a decrease in discount rates. During the second quarter of 2013, the Company recorded a benefit of $74, net of tax expense of $34, related to a decline in the gold spot price and an increase in discount rates. During the first half of 2013, the Company recorded a benefit from discontinued operations of $74, net of tax expense of $34, related to a decline in the gold spot price and an increase in discount rates.

Net operating cash used in discontinued operations of $6 and $11 in the first half of 2014 and 2013 respectively relates to payments on the Holt property royalty.

NOTE 10 NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTERESTS

 

		Three Months Ended June 30,								Six Months Ended June 30,
		2014				2013				2014				2013
Minera Yanacocha		$	(20	)		$	24			$	(49	)		$	81
Batu Hijau			(10	)			(238	)			(33	)			(241	)
TMAC			(6	)			(2	)			(7	)			(14	)
Other			1				2				2				2
		$	(35	)		$	(214	)		$	(87	)		$	(172	)

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%).

 

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

 

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

Newmont’s economic ownership interest in TMAC was reduced to 45.2% from 70.4% in April 2014 due to TMAC’s private placement to raise funds. The remaining interests are held by TMAC management and various outside investors.

NOTE 11 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 except that weighted average common shares is increased to reflect all dilutive instruments.

 

		Three Months Ended June 30,								Six Months Ended June 30,
		2014				2013				2014				2013
Net income (loss) attributable to Newmont stockholders
Continuing operations		$	182			$	(2,133	)		$	299			$	(1,819	)
Discontinued operations			(2	)			74				(19	)			74
		$	180			$	(2,059	)		$	280			$	(1,745	)
Weighted average common shares (millions):
Basic			499				497				498				497
Effect of employee stock-based awards			—				—				1				—
Diluted			499				497				499				497
Income (loss) per common share
Basic:
Continuing operations		$	0.37			$	(4.29	)		$	0.60			$	(3.66	)
Discontinued operations			(0.01	)			0.15				(0.04	)			0.15
		$	0.36			$	(4.14	)		$	0.56			$	(3.51	)
Diluted:
Continuing operations		$	0.37			$	(4.29	)		$	0.60			$	(3.66	)
Discontinued operations			(0.01	)			0.15				(0.04	)			0.15
		$	0.36			$	(4.14	)		$	0.56			$	(3.51	)

Options to purchase 3 and 4 million shares of common stock at average exercise prices of $48 and $48 were outstanding at June 30, 2014 and 2013, respectively, but were not included in the computation of diluted weighted average common shares because their exercise prices exceeded the average price of the Company’s common stock for the respective periods presented.

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

Newmont is required to settle the principal amount of its 2014 and 2017 Convertible Senior Notes in cash and may elect to settle the remaining conversion premium (average share price in excess of the conversion price), if any, in cash, shares or a combination thereof. The effect of contingently convertible instruments on diluted earnings per share is calculated under the net share settlement method in accordance with ASC guidance. The conversion price exceeded the Company’s share price for the periods presented, therefore no additional shares were included in the computation of diluted weighted average common shares.

 

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

 

NOTE 12 EMPLOYEE PENSION AND OTHER BENEFIT PLANS

 

		Three Months Ended June 30,								Six Months Ended June 30,
		2014				2013				2014				2013
Pension benefit costs, net
Service cost		$	7			$	9			$	13			$	18
Interest cost			10				10				20				20
Expected return on plan assets			(13	)			(13	)			(26	)			(25	)
Amortization			4				10				7				18
Settlements			3				—				3				—
		$	11			$	16			$	17			$	31
		Three Months Ended June 30,								Six Months Ended June 30,
		2014				2013				2014				2013
Other benefit costs, net
Service cost		$	—			$	1			$	1			$	2
Interest cost			1				2				3				3
		$	1			$	3			$	4			$	5

NOTE 13 STOCK BASED COMPENSATION

 

		Three Months Ended June 30,								Six Months Ended June 30,
		2014				2013				2014				2013
Stock options		$	1			$	2			$	2			$	5
Restricted stock units			8				7				15				16
Performance leveraged stock units			2				2				5				4
Strategic performance units			2				3				5				3
		$	13			$	14			$	27			$	28

 

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

 

NOTE 14 FAIR VALUE ACCOUNTING

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

 

		Fair Value at June 30, 2014
		Total				Level 1				Level 2				Level 3
Assets:
Cash equivalents		$	861			$	861			$	—			$	—
Marketable equity securities:
Extractive industries			244				244				—				—
Other			16				16				—				—
Marketable debt securities:
Asset backed commercial paper			24				—				—				24
Auction rate securities			6				—				—				6
Trade receivable from provisional copper and gold concentrate sales, net			111				111				—				—
Derivative instruments, net:
Diesel forward contracts			4				—				4				—
		$	1,266			$	1,232			$	4			$	30
Liabilities:
Derivative instruments, net:
Foreign exchange forward contracts		$	30			$	—			$	30			$	—
Boddington contingent consideration			10				—				—				10
Holt property royalty			155				—				—				155
		$	195			$	—			$	30			$	165

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

The following table sets forth a summary of the quantitative and qualitative information related to the unobservable inputs used in the calculation of the Company’s Level 3 financial assets and liabilities at June 30, 2014:

 

Description		At June 30, 2014				Valuation technique		Unobservable input		Range/Weighted average
Auction Rate Securities		$	6			Discounted cash flow		Weighted average recoverability rate			80	%
Asset Backed Commercial Paper			24			Discounted cash flow		Recoverability rate			90	%
Boddington Contingent Consideration			10			Monte Carlo		Discount rate			5	%
								Long Term Gold price		$	1,300
								Long Term Copper price		$	3.00
Holt property royalty			155			Monte Carlo		Weighted average discount rate			4	%
								Long Term Gold price		$	1,300

 

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

 

The following table sets forth a summary of changes in the fair value of the Company’s Level 3 financial assets and liabilities at June 30, 2014:

 

		Auction Rate Securities				Asset Backed Commercial Paper				Total Assets				Boddington Contingent Royalty				Holt Property Royalty				Total Liabilities
Balance at beginning of period		$	5			$	25			$	30			$	10			$	134			$	144
Settlements			—				—				—				—				(6	)			(6	)
Revaluation			1				(1	)			—				—				27				27
Balance at end of period		$	6			$	24			$	30			$	10			$	155			$	165

At June 30, 2014, assets and liabilities classified within Level 3 of the fair value hierarchy represent 2% and 85%, 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 hedges.

Cash Flow Hedges

The foreign currency and diesel contracts are designated as cash flow hedges, and as such, the effective portion of unrealized changes in market value have been recorded in Accumulated other comprehensive income (loss) and are reclassified to 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 had the following foreign currency derivative contracts outstanding at June 30, 2014:

 

		Expected Maturity Date
		2014				2015				2016				2017				2018				Total/ Average
A$ Operating Fixed Forward Contracts:
A$ notional (millions)			153				270				158				105				6				692
Average rate ($/A$)			0.99				0.98				0.95				0.93				0.92				0.97
Expected hedge ratio			19	%			18	%			11	%			7	%			4	%
NZ$ Operating Fixed Forward Contracts:
NZ$ notional (millions)			32				47				7				—				—				86
Average rate ($/NZ$)			0.80				0.80				0.81				—				—				0.80
Expected hedge ratio			62	%			38	%			14	%			—				—

 

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

 

Diesel Fixed Forward Contracts

Newmont had the following diesel derivative contracts outstanding at June 30, 2014:

 

		Expected Maturity Date
																		Total/
		2014				2015				2016				2017				Average
Diesel Fixed Forward Contracts:
Diesel gallons (millions)			12				18				10				2				42
Average rate ($/gallon)			2.85				2.78				2.69				2.67				2.77
Expected Nevada hedge ratio			60	%			46	%			26	%			8	%

Derivative Instrument Fair Values

Newmont had the following derivative instruments designated as hedges at June 30, 2014 and December 31, 2013:

 

		Fair Value
		At June 30, 2014
		Other Current Assets				Other Long- Term Assets				Other Current Liabilities				Other Long- Term Liabilities
Foreign currency exchange contracts:
A$ operating fixed forwards		$	—			$	—			$	16			$	19
NZ$ operating fixed forwards			4				1				—				—
Diesel fixed forwards			2				2				—				—
Total derivative instruments (Notes 19 and 21)		$	6			$	3			$	16			$	19
		Fair Value
		At December 31, 2013
		Other Current Assets				Other Long- Term Assets				Other Current Liabilities				Other Long- Term Liabilities
Foreign currency exchange contracts:
A$ operating fixed forwards		$	—			$	—			$	36			$	60
NZ$ operating fixed forwards			1				—				—				—
Diesel fixed forwards			3				1				—				—
Total derivative instruments (Notes 19 and 21)		$	4			$	1			$	36			$	60

 

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(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 Consolidated Financial Statements related to the Company’s cash flow hedges.

 

		Foreign Currency Exchange Contracts								Diesel Forward Contracts								Forward Starting Swap Contracts
		2014				2013				2014				2013				2014				2013
For the three months ended June 30,
Cash flow hedging relationships:
Gain (loss) recognized in other comprehensive income (loss) (effective portion)		$	18			$	(386	)		$	3			$	(6	)		$	—			$	—
Gain (loss) reclassified from Accumulated other comprehensive income into income (loss) (effective portion) (1)			22				22				1				(4	)			(4	)			(6	)
Gain (loss) reclassified from Accumulated other comprehensive loss into income (ineffective portion)(2)			—				—				—				(3	)			—				—
For the six months ended June 30,
Cash flow hedging relationships:
Gain (loss) recognized in other comprehensive income (loss) (effective portion)		$	52			$	(368	)		$	1			$	(4	)		$	—			$	—
Gain (loss) reclassified from Accumulated other comprehensive income into income (loss) (effective portion) (1)			27				60				1				—				(9	)			(9	)

 

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

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

Based on fair values at June 30, 2014 the amount to be reclassified from Accumulated other comprehensive income (loss), net of tax to income for derivative instruments during the next 12 months is a gain of approximately $3.

Provisional Copper and Gold Sales

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

London Metal Exchange (“LME”) copper prices averaged $3.08 per pound during the three months ended June 30, 2014, compared with the Company’s recorded average provisional price of $3.12 per pound before mark-to-market adjustments and treatment and refining charges. LME copper prices averaged $3.14 per pound during the six months ended June 30, 2014, compared with the Company’s recorded average provisional price of $3.13 per pound before mark-to-market adjustments and treatment and refining charges. During the three and six months ended June 30, 2014, changes in copper prices resulted in a provisional pricing mark-to-market gain of $6 ($0.14 per pound) and loss of $11 ($0.13 per pound), respectively. At June 30, 2014, Newmont had copper sales of 48 million pounds priced at an average of $3.15 per pound, subject to final pricing over the next several months.

The average London P.M. fix for gold was $1,288 per ounce during the three months ended June 30, 2014, compared with the Company’s recorded average provisional price of $1,287 per ounce before mark-to-market adjustments and treatment and refining charges. The average London P.M. fix for gold was $1,291 per ounce during the six months ended June 30, 2014, compared to the Company’s recorded average provisional price of $1,290 per ounce before mark-to-market adjustments and treatment and refining charges. During the three months ended June 30, 2014 there was minimal fluctuation in the gold price, resulting in a provisional pricing mark-to-market close to nil. During the six months ended June 30, 2014, changes in gold prices resulted in a gain of $5 ($2 per ounce). At June 30, 2014, Newmont had gold sales of 54,000 ounces priced at an average of $1,311 per ounce, subject to final pricing over the next several months.

 

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

 

NOTE 16 INVESTMENTS

 

		At June 30, 2014
		Cost/Equity				Unrealized								Fair/Equity
		Basis				Gain				Loss				Basis
Current:
Marketable Equity Securities:
Gabriel Resources Ltd.		$	37			$	8			$	—			$	45
Other			29				13				(3	)			39
		$	66			$	21			$	(3	)		$	84
Long-term:
Marketable Debt Securities:
Asset backed commercial paper		$	23			$	1			$	—			$	24
Auction rate securities			8				—				(2	)			6
			31				1				(2	)			30
Marketable Equity Securities:
Regis Resources Ltd.			165				—				(15	)			150
Other			21				6				(1	)			26
			186				6				(16	)			176
Other investments, at cost			20				—				—				20
Investment in Affiliates:
Euronimba Ltd.			2				—				—				2
Minera La Zanja S.R.L.			104				—				—				104
Novo Resources Corp.			15				—				—				15
		$	358			$	7			$	(18	)		$	347

 

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

 

		At December 31, 2013
		Cost/Equity				Unrealized								Fair/Equity
		Basis				Gain				Loss				Basis
Current:
Marketable Equity Securities:
Gabriel Resources Ltd.		$	37			$	—			$	—			$	37
Paladin Energy Ltd.			21				1				—				22
Other			19				4				(4	)			19
		$	77			$	5			$	(4	)		$	78
Long-term:
Marketable Debt Securities:
Asset backed commercial paper		$	23			$	2			$	—			$	25
Auction rate securities			8				—				(3	)			5
			31				2				(3	)			30
Marketable Equity Securities:
Regis Resources Ltd.			165				88				—				253
Other			30				5				—				35
			195				93				—				288
Other investments, at cost			13				—				—				13
Investment in Affiliates:
Minera La Zanja S.R.L.			92				—				—				92
Novo Resources Corp.			16				—				—				16
		$	347			$	95			$	(3	)		$	439

In March 2014, the Company sold its investment in Paladin Energy Ltd. for $25, resulting in a pre-tax gain of $4 recorded in Other income, net. In June 2014, the Company completed the sale of its investment in Leyshon Energy Ltd. for $1, resulting in a pre-tax gain of $1 recorded in Other income, net.

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

 

		Less than 12 Months								12 Months or Greater								Total
At June 30, 2014		Fair Value				Unrealized Losses				Fair Value				Unrealized Losses				Fair Value				Unrealized Losses
Marketable equity securities		$	158			$	19			$	—			$	—			$	158			$	19
Auction rate securities			—				—				6				2				6				2
		$	158			$	19			$	6			$	2			$	164			$	21
		Less than 12 Months								12 Months or Greater								Total
At December 31, 2013		Fair Value				Unrealized Losses				Fair Value				Unrealized Losses				Fair Value				Unrealized Losses
Marketable equity securities		$	54			$	4			$	—			$	—			$	54			$	4
Auction rate securities			—				—				5				3				5				3
		$	54			$	4			$	5			$	3			$	59			$	7

 

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

 

While the fair value of the Company’s investments in marketable equity securities and auction rate securities are below their respective cost, the Company views these declines as temporary. The Company has the ability and intends to hold its auction rate securities until maturity or such time that the market recovers.

NOTE 17 INVENTORIES

 

		At June 30,				At December 31,
		2014				2013
In-process		$	115			$	97
Concentrate			239				108
Precious metals			22				26
Materials, supplies and other			487				486
		$	863			$	717

The Company recorded write-downs of $1 and $2, classified as components of Costs applicable to sales and Depreciation and amortization, respectively, for the first half of 2014, to reduce the carrying value of Yanacocha’s inventories to net realizable value.

NOTE 18 STOCKPILES AND ORE ON LEACH PADS

 

		At June 30,				At December 31,
		2014				2013
Current:
Stockpiles		$	528			$	580
Ore on leach pads			247				225
		$	775			$	805
Long-term:
Stockpiles		$	2,564			$	2,434
Ore on leach pads			209				246
		$	2,773			$	2,680

 

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

 

		At June 30,				At December 31,
		2014				2013
Stockpiles and ore on leach pads:
Carlin		$	412			$	439
Phoenix			115				109
Twin Creeks			309				327
La Herradura			92				57
Yanacocha			368				504
Boddington			329				304
Tanami			8				12
Jundee			7				7
Waihi			3				2
Kalgoorlie			113				107
Batu Hijau			1,379				1,290
Ahafo			335				292
Akyem			78				35
		$	3,548			$	3,485

The Company recorded write-downs of $182 and $62, classified as components of Costs applicable to sales and Depreciation and amortization, respectively, for the first half of 2014 to reduce the carrying value of stockpiles and ore on leach pads to net realizable value. Adjustments to net realizable value are a result of current and prior stripping and the associated historical and estimated future processing costs in relation to the Company’s long term price assumptions. Of the write-downs in 2014, $65 are related to Carlin, $5 to Twin Creeks, $87 to Yanacocha, $50 to Boddington and $37 to Batu Hijau.

NOTE 19 OTHER ASSETS

 

		At June 30,				At December 31,
		2014				2013
Other current assets:
Refinery metal inventory and receivable		$	802			$	679
Prepaid assets			305				157
Other refinery metal receivables			97				130
Derivative instruments			6				4
Other			36				36
		$	1,246			$	1,006
Other long-term assets:
Income tax receivable		$	249			$	229
Goodwill			132				132
Intangible assets			114				98
Prepaid royalties			103				103
Restricted cash			99				95
Debt issuance costs			62				62
Prepaid maintenance costs			40				31
Derivative instruments			3				1
Other			46				93
		$	848			$	844

 

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

 

NOTE 20 DEBT

Scheduled minimum debt repayments are $51 for the remainder of 2014, $168 in 2015, $221 in 2016, $771 in 2017, $1 in 2018 and $5,680 thereafter.

Term Loan and Revolver Extension

On March 31, 2014, the Company entered into a $575 uncollateralized term loan facility with a syndicate of banks. The term loan allows for a single drawing any business day on or prior to July 15, 2014 (the “Funding Date”) and will mature five years after the Funding Date. Borrowings under the facility will bear interest at LIBOR plus a margin ranging from 0.875% to 1.65%. Fees and other debt issuance costs related to the facility will be capitalized and amortized over the term of the debt. There are no borrowings outstanding under the facility at June 30, 2014.

On July 11, 2014, the Company borrowed $575 under the new term loan facility. The loan will mature July 11, 2019. Proceeds were used to retire the $575 convertible debt due on July 15, 2014. As such, the convertible debt has been reclassified to long-term on the balance sheet at June 30, 2014.

On March 31, 2014, the Company’s Corporate Revolving Credit Facility was amended to extend the facility two years to 2019. The available capacity under the Corporate Revolving Credit Facility remains at $3,000. There are no borrowings outstanding under the facility at June 30, 2014.

NOTE 21 OTHER LIABILITIES

 

		At June 30,				At December 31,
		2014				2013
Other current liabilities:
Refinery metal payable		$	802			$	679
Deferred income tax			142				74
Accrued operating costs			135				157
Reclamation and remediation liabilities			91				98
Interest			75				74
Accrued capital expenditures			47				72
Royalties			32				58
Derivative instruments			16				36
Holt property royalty			14				15
Taxes other than income and mining			11				6
Other			56				44
		$	1,421			$	1,313
Other long-term liabilities:
Holt property royalty		$	141			$	119
Income and mining taxes			105				70
Power supply agreements			41				39
Derivative instruments			19				60
Boddington contingent consideration			10				10
Other			38				44
		$	354			$	342

 

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

 

NOTE 22 CHANGES IN EQUITY

 

		Six Months Ended June 30,
		2014				2013
Common stock:
At beginning of period		$	789			$	787
Redemptions of Exchangeable Shares			8				—
Stock based awards			1				2
At end of period			798				789
Additional paid-in capital:
At beginning of period			8,538				8,428
Redemption of Exchangeable Shares			(8	)			—
Stock based awards(1)			74				53
Sale of noncontrolling interests			32				48
At end of period			8,636				8,529
Accumulated other comprehensive income (loss):
At beginning of period			(182	)			490
Other comprehensive income (loss)			(60	)			(562	)
At end of period			(242	)			(72	)
Retained earnings:
At beginning of period			848				3,992
Net income (loss) attributable to Newmont stockholders			280				(1,745	)
Dividends Paid			(89	)			(385	)
At end of period			1,039				1,862
Noncontrolling interests:
At beginning of period			2,916				3,175
Net income (loss) attributable to noncontrolling interests			(87	)			(172	)
Dividends paid to noncontrolling interests			(4	)			(2	)
Sale of noncontrolling interests, net			35				10
At end of period			2,860				3,011
Total equity		$	13,091			$	14,119

 

(1)

A 2014 balance sheet adjustment of $21 was recorded during the current quarter to correct the presentation of stock based compensation cost as a component of additional paid-in capital, which was previously included as a current employee-related benefit liability. We concluded that the unadjusted balance of $46 was immaterial to the comparative December 31, 2013 balance sheet.

 

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

 

NOTE 23 RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

 

		Unrealized (loss) on marketable securities, net				Foreign currency translation adjustments				Pension and other post- retirement benefit adjustments				Changes in fair value of cash flow hedge instruments				Total
December 31, 2013		$	(35	)		$	145			$	(124	)		$	(168	)		$	(182	)
Change in other comprehensive income (loss) before reclassifications			(83	)			2				(2	)			34				(49	)
Reclassifications from accumulated other comprehensive income (loss)			(3	)			—				5				(13	)			(11	)
Net current-period other comprehensive income (loss)			(86	)			2				3				21				(60	)
June 30, 2014		$	(121	)		$	147			$	(121	)		$	(147	)		$	(242	)

 

Details about Accumulated Other Comprehensive Income (Loss) Components		Amount Reclassified from Accumulated Other Comprehensive Income (Loss)																Affected Line Item in the Condensed Consolidated Statement of Operations
		Three Months Ended June 30, 2014				Three Months Ended June 30, 2013				Six Months Ended June 30, 2014				Six Months Ended June 30, 2013
Marketable securities adjustments:
Sale of marketable securities		$	(1	)		$	—			$	(5	)		$	—			Other income, net
Impairment of marketable securities			—				7				1				11			Other income, net
Total before tax			(1	)			7				(4	)			11
Tax benefit (expense)			—				(2	)			1				(3	)
Net of tax		$	(1	)		$	5			$	(3	)		$	8
Pension liability adjustments:
Amortization, net		$	4			$	10			$	7			$	18			(1)
Total before tax			4				10				7				18
Tax benefit (expense)			(1	)			(3	)			(2	)			(6	)
Net of tax		$	3			$	7			$	5			$	12
Hedge instruments adjustments:
Operating cash flow hedges		$	(23	)		$	(43	)		$	(28	)		$	(79	)		Costs applicable to sales
Capital cash flow hedges			—				1				—				1			Depreciation and amortization
Capital cash flow hedges			—				18				—				18			Write-downs
Forward starting swap hedges			4				6				9				9			Interest expense, net
Hedge ineffectiveness			—				3				—				—			Other income, net
Total before tax			(19	)			(15	)			(19	)			(51	)
Tax benefit (expense)			6				4				6				16
Net of tax		$	(13	)		$	(11	)		$	(13	)		$	(35	)
Total reclassifications for the period, net of tax		$	(11	)		$	1			$	(11	)		$	(15	)

 

(1)

This accumulated other comprehensive income (loss) component is included in General and administrative and costs that benefit the inventory/production process. Refer to Note 3 to the Consolidated Financial Statements for the year ended December 31, 2013 filed June 13, 2014 on Form 8-K for information on costs that benefit the inventory/production process.

 

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

 

NOTE 24 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:

 

		Six Months Ended June 30,
		2014				2013
Decrease (increase) in operating assets:
Trade and accounts receivable		$	68			$	187
Inventories, stockpiles and ore on leach pads			(359	)			(399	)
EGR refinery assets			(123	)			623
Other assets			(47	)			8
Increase (decrease) in operating liabilities:
Accounts payable and other accrued liabilities			(92	)			(229	)
EGR refinery liabilities			123				(623	)
Reclamation liabilities			(23	)			(24	)
		$	(453	)		$	(457	)

NOTE 25 CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

The following Condensed Consolidating Financial Statements are presented to satisfy disclosure requirements of Rule 3-10(e) of Regulation S-X resulting from the inclusion of Newmont USA Limited (“Newmont USA”), a wholly-owned subsidiary of Newmont, as a co-registrant with Newmont on debt securities issued under a shelf registration statement on Form S-3 filed under the Securities Act of 1933 under which securities of Newmont (including debt securities guaranteed by Newmont USA) may be issued (the “Shelf Registration Statement”). In accordance with Rule 3-10(e) of Regulation S-X, Newmont USA, as the subsidiary guarantor, is 100% owned by Newmont, the guarantees are full and unconditional, and no other subsidiary of Newmont guaranteed any security issued under the Shelf Registration Statement. There are no restrictions on the ability of Newmont or Newmont USA to obtain funds from its subsidiaries by dividend or loan.

 

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

 

		Three Months Ended June 30, 2014
																		Newmont
		Newmont																Mining
		Mining				Newmont				Other								Corporation
Condensed Consolidating Statement of Operation		Corporation				USA				Subsidiaries				Eliminations				Consolidated
Sales		$	—			$	485			$	1,280			$	—			$	1,765
Costs and expenses
Costs applicable to sales (1)			—				304				756				—				1,060
Depreciation and amortization			1				71				234				—				306
Reclamation and remediation			—				3				18				—				21
Exploration			—				5				36				—				41
Advanced projects, research and development			—				10				32				—				42
General and administrative			—				27				21				—				48
Write-downs			—				—				13				—				13
Other expense, net			—				9				42				—				51
			1				429				1,152				—				1,582
Other income (expense)
Other income, net			(3	)			(2	)			8				—				3
Interest income—intercompany			30				—				3				(33	)			—
Interest expense—intercompany			(3	)			—				(30	)			33				—
Interest expense, net			(83	)			(1	)			(10	)			—				(94	)
			(59	)			(3	)			(29	)			—				(91	)
Income (loss) before income and mining tax and other items			(60	)			53				99				—				92
Income and mining tax benefit (expense)			11				(8	)			50				—				53
Equity income (loss) of affiliates			229				58				23				(308	)			2
Income (loss) from continuing operations			180				103				172				(308	)			147
Income (loss) from discontinued operations			—				—				(2	)			—				(2	)
Net income (loss)			180				103				170				(308	)			145
Net loss (income) attributable to noncontrolling interests			—				—				23				12				35
Net income (loss) attributable to Newmont stockholders		$	180			$	103			$	193			$	(296	)		$	180
Comprehensive income (loss)		$	143			$	112			$	145			$	(290	)		$	110
Comprehensive loss (income) attributable to noncontrolling interests			—				—				24				9				33
Comprehensive income (loss) attributable to Newmont stockholders		$	143			$	112			$	169			$	(281	)		$	143

 

(1)	Excludes Depreciation and amortization and Reclamation and remediation.

 

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

 

		Three Months Ended June 30, 2013
																		Newmont
		Newmont																Mining
		Mining				Newmont				Other								Corporation
Condensed Consolidating Statement of Operation		Corporation				USA				Subsidiaries				Eliminations				Consolidated
Sales		$	—			$	541			$	1,477			$	—			$	2,018
Costs and expenses
Costs applicable to sales (1)			—				271				1,411				—				1,682
Depreciation and amortization			—				48				367				—				415
Reclamation and remediation			—				2				16				—				18
Exploration			—				17				59				—				76
Advanced projects, research and development			—				10				36				—				46
General and administrative			—				24				30				—				54
Write-downs			—				—				2,261				—				2,261
Other expense, net			—				15				62				—				77
			—				387				4,242				—				4,629
Other income (expense)
Other income, net			2				6				42				—				50
Interest income—intercompany			34				8				5				(47	)			—
Interest expense—intercompany			(3	)			—				(44	)			47				—
Interest expense, net			(68	)			(4	)			2				—				(70	)
			(35	)			10				5				—				(20	)
Income (loss) before income and mining tax and other items			(35	)			164				(2,760	)			—				(2,631	)
Income and mining tax benefit (expense)			12				(71	)			346				—				287
Equity income (loss) of affiliates			(2,036	)			(505	)			(172	)			2,710				(3	)
Income (loss) from continuing operations			(2,059	)			(412	)			(2,586	)			2,710				(2,347	)
Income (loss) from discontinued operations			—				—				74				—				74
Net income (loss)			(2,059	)			(412	)			(2,512	)			2,710				(2,273	)
Net loss (income) attributable to noncontrolling interests			—				—				328				(114	)			214
Net income (loss) attributable to Newmont stockholders		$	(2,059	)		$	(412	)		$	(2,184	)		$	2,596			$	(2,059	)
Comprehensive income (loss)		$	(2,559	)		$	(424	)		$	(3,062	)		$	3,272			$	(2,773	)
Comprehensive loss (income) attributable to noncontrolling interests			—				—				328				(115	)			213
Comprehensive income (loss) attributable to Newmont stockholders		$	(2,559	)		$	(424	)		$	(2,734	)		$	3,157			$	(2,560	)

 

(1)	Excludes Depreciation and amortization and Reclamation and remediation.

 

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

 

		Six Months Ended June 30, 2014
																		Newmont
		Newmont																Mining
		Mining				Newmont				Other								Corporation
Condensed Consolidating Statement of Operation		Corporation				USA				Subsidiaries				Eliminations				Consolidated
Sales		$	—			$	985			$	2,544			$	—			$	3,529
Costs and expenses
Costs applicable to sales (1)			—				602				1,541				—				2,143
Depreciation and amortization			2				125				477				—				604
Reclamation and remediation			—				5				36				—				41
Exploration			—				9				66				—				75
Advanced projects, research and development			—				21				63				—				84
General and administrative			—				46				47				—				93
Write-downs			—				—				13				—				13
Other expense, net			—				15				88				—				103
			2				823				2,331				—				3,156
Other income (expense)
Other income, net			(4	)			58				(5	)			—				49
Interest income—intercompany			60				—				5				(65	)			—
Interest expense—intercompany			(5	)			—				(60	)			65				—
Interest expense, net			(165	)			(2	)			(20	)			—				(187	)
			(114	)			56				(80	)			—				(138	)
Income (loss) before income and mining tax and other items			(116	)			218				133				—				235
Income and mining tax benefit (expense)			40				(46	)			(19	)			—				(25	)
Equity income (loss) of affiliates			356				(93	)			6				(267	)			2
Income (loss) from continuing operations			280				79				120				(267	)			212
Income (loss) from discontinued operations			—				—				(19	)			—				(19	)
Net income (loss)			280				79				101				(267	)			193
Net loss (income) attributable to noncontrolling interests			—				—				89				(2	)			87
Net income (loss) attributable to Newmont stockholders		$	280			$	79			$	190			$	(269	)		$	280
Comprehensive income (loss)		$	220			$	90			$	61			$	(238	)		$	133
Comprehensive loss (income) attributable to noncontrolling interests			—				—				89				(2	)			87
Comprehensive income (loss) attributable to Newmont stockholders		$	220			$	90			$	150			$	(240	)		$	220

 

(1)	Excludes Depreciation and amortization and Reclamation and remediation.

 

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

 

		Six Months Ended June 30, 2013
																		Newmont
		Newmont																Mining
		Mining				Newmont				Other								Corporation
Condensed Consolidating Statement of Operation		Corporation				USA				Subsidiaries				Eliminations				Consolidated
Sales		$	—			$	1,084			$	3,122			$	—			$	4,206
Costs and expenses
Costs applicable to sales (1)			—				532				2,207				—				2,739
Depreciation and amortization			—				96				586				—				682
Reclamation and remediation			—				4				32				—				36
Exploration			—				28				107				—				135
Advanced projects, research and development			—				23				75				—				98
General and administrative			—				54				56				—				110
Write-downs			—				—				2,262				—				2,262
Other expense, net			—				30				146				—				176
			—				767				5,471				—				6,238
Other income (expense)
Other income, net			2				9				65				—				76
Interest income—intercompany			82				15				10				(107	)			—
Interest expense—intercompany			(6	)			—				(101	)			107				—
Interest expense, net			(133	)			(6	)			4				—				(135	)
			(55	)			18				(22	)			—				(59	)
Income (loss) before income and mining tax and other items			(55	)			335				(2,371	)			—				(2,091	)
Income and mining tax benefit (expense)			19				(121	)			209				—				107
Equity income (loss) of affiliates			(1,709	)			(391	)			(129	)			2,222				(7	)
Income (loss) from continuing operations			(1,745	)			(177	)			(2,291	)			2,222				(1,991	)
Income (loss) from discontinued operations			—				—				74				—				74
Net income (loss)			(1,745	)			(177	)			(2,217	)			2,222				(1,917	)
Net loss (income) attributable to noncontrolling interests			—				—				262				(90	)			172
Net income (loss) attributable to Newmont stockholders		$	(1,745	)		$	(177	)		$	(1,955	)		$	2,132			$	(1,745