UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 10-Q
(Mark One)
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 2019
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 GOLDCORP CORPORATION
(Exact name of registrant as specified in its charter)
|
Delaware |
|
84-1611629 |
|
(State or Other Jurisdiction of |
|
(I.R.S. Employer |
|
|
|
|
|
6363 South Fiddler’s Green Circle |
|
|
|
Greenwood Village, Colorado |
|
80111 |
|
(Address of Principal Executive Offices) |
|
(Zip Code) |
Registrant’s telephone number, including area code (303) 863-7414
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12-b2 of the Exchange Act.
|
|
Large accelerated filer |
☒ |
|
Accelerated filer |
☐ |
|
|
Non-accelerated filer |
☐ |
(Do not check if a smaller reporting company.) |
Smaller reporting company |
☐ |
|
|
|
|
|
Emerging growth company |
☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12-b2 of the Exchange Act). ☐ Yes ☒ No
There were 819,633,497 shares of common stock outstanding on April 18, 2019.
|
|
|
|
|
Page |
|
|
|
|
|
|
|
|
2 | |||
|
|
|
4 | ||
|
|
|
|
4 | |
|
|
|
Condensed Consolidated Statements of Comprehensive Income (Loss) |
|
5 |
|
|
|
|
6 | |
|
|
|
|
7 | |
|
|
|
|
8 | |
|
|
|
|
9 | |
|
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
|
43 | |
|
|
|
|
43 | |
|
|
|
|
44 | |
|
|
|
|
49 | |
|
|
|
|
52 | |
|
|
|
|
53 | |
|
|
|
|
55 | |
|
|
|
|
56 | |
|
|
|
|
56 | |
|
|
|
|
64 | |
|
|
|
66 | ||
|
|
|
67 | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
68 | ||
|
|
|
68 | ||
|
|
|
69 | ||
|
|
|
69 | ||
|
|
|
70 | ||
|
|
|
70 | ||
|
|
|
70 | ||
|
|
73 | |||
NEWMONT GOLDCORP CORPORATION
FIRST QUARTER 2019 RESULTS AND HIGHLIGHTS
(unaudited, in millions, except per share, per ounce and per pound)
|
|
|
Three Months Ended March 31, |
|
||||
|
|
|
2019 |
|
2018 |
|
||
|
Financial Results: |
|
|
|
|
|
|
|
|
Sales |
|
$ |
1,803 |
|
$ |
1,817 |
|
|
Gold |
|
$ |
1,739 |
|
$ |
1,739 |
|
|
Copper |
|
$ |
64 |
|
$ |
78 |
|
|
Costs applicable to sales (1) |
|
$ |
978 |
|
$ |
1,029 |
|
|
Gold |
|
$ |
935 |
|
$ |
982 |
|
|
Copper |
|
$ |
43 |
|
$ |
47 |
|
|
Net income (loss) from continuing operations |
|
$ |
145 |
|
$ |
169 |
|
|
Net income (loss) |
|
$ |
119 |
|
$ |
191 |
|
|
Net income (loss) from continuing operations attributable to Newmont stockholders |
|
$ |
113 |
|
$ |
170 |
|
|
Per common share, diluted: |
|
|
|
|
|
|
|
|
Net income (loss) from continuing operations attributable to Newmont stockholders |
|
$ |
0.21 |
|
$ |
0.32 |
|
|
Net income (loss) attributable to Newmont stockholders |
|
$ |
0.16 |
|
$ |
0.36 |
|
|
Adjusted net income (loss) (2) |
|
$ |
176 |
|
$ |
185 |
|
|
Adjusted net income (loss) per share, diluted (2) |
|
$ |
0.33 |
|
$ |
0.35 |
|
|
Earnings before interest, taxes and depreciation and amortization (2) |
|
$ |
645 |
|
$ |
637 |
|
|
Adjusted earnings before interest, taxes and depreciation and amortization (2) |
|
$ |
687 |
|
$ |
644 |
|
|
Net cash provided by (used in) operating activities of continuing operations |
|
$ |
574 |
|
$ |
266 |
|
|
Free Cash Flow (2) |
|
$ |
349 |
|
$ |
35 |
|
|
Cash dividends declared per common share |
|
$ |
0.14 |
|
$ |
0.14 |
|
|
|
|
|
|
|
|
|
|
|
Operating Results: |
|
|
|
|
|
|
|
|
Consolidated gold ounces (thousands): |
|
|
|
|
|
|
|
|
Produced |
|
|
1,337 |
|
|
1,286 |
|
|
Sold |
|
|
1,338 |
|
|
1,312 |
|
|
Attributable gold ounces (thousands): |
|
|
|
|
|
|
|
|
Produced |
|
|
1,230 |
|
|
1,209 |
|
|
Sold |
|
|
1,234 |
|
|
1,231 |
|
|
Consolidated and attributable copper pounds (millions): |
|
|
|
|
|
|
|
|
Produced |
|
|
21 |
|
|
26 |
|
|
Sold |
|
|
22 |
|
|
27 |
|
|
Average realized price: |
|
|
|
|
|
|
|
|
Gold (per ounce) |
|
$ |
1,300 |
|
$ |
1,326 |
|
|
Copper (per pound) |
|
$ |
2.89 |
|
$ |
2.88 |
|
|
Consolidated costs applicable to sales: (1)(2) |
|
|
|
|
|
|
|
|
Gold (per ounce) |
|
$ |
701 |
|
$ |
748 |
|
|
Copper (per pound) |
|
$ |
1.94 |
|
$ |
1.74 |
|
|
All-in sustaining costs: (2) |
|
|
|
|
|
|
|
|
Gold (per ounce) |
|
$ |
907 |
|
$ |
943 |
|
|
Copper (per pound) |
|
$ |
2.26 |
|
$ |
2.07 |
|
|
(1) |
Excludes Depreciation and amortization and Reclamation and remediation. |
|
(2) |
See “Non-GAAP Financial Measures” beginning on page 56. |
2
First Quarter 2019 Highlights
|
· |
Newmont Goldcorp update: On January 14, 2019, the Company entered into a definitive agreement to acquire all outstanding common shares of Goldcorp Inc. (Goldcorp) in a primarily stock transaction. On April 18, 2019, Newmont closed its acquisition of Goldcorp following receipt of all regulatory approvals and approval by Newmont’s and Goldcorp’s shareholders of the resolutions at the shareholder meetings on April 11 and April 4, 2019, respectively. As of the closing date, the combined company is known as Newmont Goldcorp Corporation, continuing to be traded on the New York Stock Exchange under the ticker NEM and listed on the Toronto Stock Exchange under the ticker NGT. The financial information included in this report represents results of Newmont Mining Corporation prior to the acquisition of Goldcorp. Results for the second quarter 2019 will reflect the financial performance of the combined company from the closing date of the Newmont Goldcorp transaction. |
|
· |
Net income (loss): Delivered Net income (loss) from continuing operations attributable to Newmont stockholders of $113 million or $0.21 per diluted share, a decrease of $57 million from the prior-year quarter primarily due to integration and transaction costs associated with the Newmont Goldcorp transaction and Nevada JV Agreement and lower average realized gold prices, partially offset by higher gold production. |
|
· |
Adjusted net income (loss): Delivered Adjusted net income (loss) of $176 million or $0.33 per diluted share, a 6% decrease from the prior-year quarter (See “Non-GAAP Financial Measures” beginning on page 56). |
|
· |
Adjusted EBITDA: Generated $687 million in Adjusted EBITDA, a 7% increase from the prior-year quarter (See “Non-GAAP Financial Measures” beginning on page 56). |
|
· |
Cash Flow: Reported Net cash provided by operating activities of continuing operations of $574 million, a 116% increase from the prior-year quarter, and free cash flow of $349 million (See “Non-GAAP Financial Measures” beginning on page 56). |
|
· |
Attributable gold production: Increased 2% to 1.23 million ounces primarily due to a full quarter of mining at Subika Underground and higher grade at Merian and Yanacocha, partially offset by reduced mining and lower grade at Kalgoorlie. |
|
· |
Portfolio improvements: Forged strategic joint venture agreement with Barrick to create the world’s largest gold producing complex by combining the companies’ respective mining operations, assets, reserves, and talent in Nevada; completed Tanami Power Project in Australia safely and on schedule, lowering power costs and carbon emissions by 20 percent. |
|
· |
Financial Strength: Ended the quarter with net debt of $0.8 billion and $3.5 billion cash on hand supporting an investment-grade credit profile; declared a first quarter dividend of $0.14 per share; declared a one-time special dividend of $0.88 per share to be paid on May 1, 2019, to Newmont shareholders of record based on outstanding shares as of April 17, 2019, and not including any shares issued in connection with the recently completed Newmont Goldcorp transaction. |
Our global project pipeline
Newmont’s capital-efficient project pipeline supports stable production with improving margins and mine life. Near-term development capital projects are presented below. Funding for Ahafo Mill Expansion and Quecher Main have been approved and these projects are in execution.
Ahafo Mill Expansion, Africa. This project is designed to maximize resource value by improving production margins and accelerating stockpile processing. The project also supports profitable development of Ahafo’s highly prospective underground resources. The expansion is expected to have an average annual gold production of between 75,000 and 100,000 ounces per year for the first five years beginning in 2020. Development capital costs (excluding capitalized interest) since approval were $133, of which $14 related to the first quarter 2019. Both first production and commercial production are expected in the fourth quarter of 2019.
Quecher Main, South America. This project will add oxide production at Yanacocha, leverage existing infrastructure and enable potential future growth at Yanacocha. First production was achieved in late 2018 with commercial production expected in the fourth quarter of 2019. Quecher Main extends the life of the Yanacocha operation to 2027 with average annual gold production of about 200,000 ounces per year (on a consolidated basis) between 2020 and 2025. Development capital costs (excluding capitalized interest) since approval were $126, of which $25 related to the first quarter 2019.
We manage our wider project portfolio to maintain flexibility to address the development risks associated with our projects including permitting, local community and government support, engineering and procurement availability, technical issues, escalating costs and other associated risks that could adversely impact the timing and costs of certain opportunities.
3
NEWMONT GOLDCORP CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in millions except per share)
|
|
|
Three Months Ended March 31, |
|
||||
|
|
|
2019 |
|
2018 |
|
||
|
Sales (Note 4) |
|
$ |
1,803 |
|
$ |
1,817 |
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
|
|
|
Costs applicable to sales (1) |
|
|
978 |
|
|
1,029 |
|
|
Depreciation and amortization |
|
|
312 |
|
|
301 |
|
|
Reclamation and remediation (Note 5) |
|
|
30 |
|
|
28 |
|
|
Exploration |
|
|
41 |
|
|
40 |
|
|
Advanced projects, research and development |
|
|
27 |
|
|
34 |
|
|
General and administrative |
|
|
59 |
|
|
59 |
|
|
Other expense, net (Note 6) |
|
|
68 |
|
|
11 |
|
|
|
|
|
1,515 |
|
|
1,502 |
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
Other income, net (Note 7) |
|
|
45 |
|
|
21 |
|
|
Interest expense, net of capitalized interest |
|
|
(58) |
|
|
(53) |
|
|
|
|
|
(13) |
|
|
(32) |
|
|
Income (loss) before income and mining tax and other items |
|
|
275 |
|
|
283 |
|
|
Income and mining tax benefit (expense) (Note 8) |
|
|
(125) |
|
|
(105) |
|
|
Equity income (loss) of affiliates |
|
|
(5) |
|
|
(9) |
|
|
Net income (loss) from continuing operations |
|
|
145 |
|
|
169 |
|
|
Net income (loss) from discontinued operations (Note 9) |
|
|
(26) |
|
|
22 |
|
|
Net income (loss) |
|
|
119 |
|
|
191 |
|
|
Net loss (income) attributable to noncontrolling interests (Note 10) |
|
|
(32) |
|
|
1 |
|
|
Net income (loss) attributable to Newmont stockholders |
|
$ |
87 |
|
$ |
192 |
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to Newmont stockholders: |
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
113 |
|
$ |
170 |
|
|
Discontinued operations |
|
|
(26) |
|
|
22 |
|
|
|
|
$ |
87 |
|
$ |
192 |
|
|
Net income (loss) per common share (Note 11): |
|
|
|
|
|
|
|
|
Basic: |
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
0.21 |
|
$ |
0.32 |
|
|
Discontinued operations |
|
|
(0.05) |
|
|
0.04 |
|
|
|
|
$ |
0.16 |
|
$ |
0.36 |
|
|
Diluted: |
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
0.21 |
|
$ |
0.32 |
|
|
Discontinued operations |
|
|
(0.05) |
|
|
0.04 |
|
|
|
|
$ |
0.16 |
|
$ |
0.36 |
|
|
(1) |
Excludes Depreciation and amortization and Reclamation and remediation. |
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.
4
NEWMONT GOLDCORP CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(unaudited, in millions)
|
|
|
Three Months Ended March 31, |
|
||||
|
|
|
2019 |
|
2018 |
|
||
|
Net income (loss) |
|
$ |
119 |
|
$ |
191 |
|
|
Other comprehensive income (loss): |
|
|
|
|
|
|
|
|
Change in marketable securities, net of tax of $- and $-, respectively |
|
|
— |
|
|
2 |
|
|
Foreign currency translation adjustments |
|
|
3 |
|
|
(3) |
|
|
Change in pension and other post-retirement benefits, net of tax of $- and $(1), respectively |
|
|
4 |
|
|
5 |
|
|
Change in fair value of cash flow hedge instruments, net of tax of $- and $(1), respectively |
|
|
8 |
|
|
4 |
|
|
Other comprehensive income (loss) |
|
|
15 |
|
|
8 |
|
|
Comprehensive income (loss) |
|
$ |
134 |
|
$ |
199 |
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income (loss) attributable to: |
|
|
|
|
|
|
|
|
Newmont stockholders |
|
$ |
102 |
|
$ |
200 |
|
|
Noncontrolling interests |
|
|
32 |
|
|
(1) |
|
|
|
|
$ |
134 |
|
$ |
199 |
|
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.
5
NEWMONT GOLDCORP CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in millions)
|
|
|
Three Months Ended March 31, |
|
||||
|
|
|
2019 |
|
2018 |
|
||
|
Operating activities: |
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
119 |
|
$ |
191 |
|
|
Adjustments: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
312 |
|
|
301 |
|
|
Stock-based compensation (Note 13) |
|
|
19 |
|
|
19 |
|
|
Reclamation and remediation |
|
|
27 |
|
|
26 |
|
|
Loss (income) from discontinued operations (Note 9) |
|
|
26 |
|
|
(22) |
|
|
Deferred income taxes |
|
|
21 |
|
|
10 |
|
|
Write-downs of inventory and stockpiles and ore on leach pads |
|
|
44 |
|
|
82 |
|
|
Other operating adjustments |
|
|
(4) |
|
|
10 |
|
|
Net change in operating assets and liabilities (Note 23) |
|
|
10 |
|
|
(351) |
|
|
Net cash provided by (used in) operating activities of continuing operations |
|
|
574 |
|
|
266 |
|
|
Net cash provided by (used in) operating activities of discontinued operations (Note 9) |
|
|
(3) |
|
|
(3) |
|
|
Net cash provided by (used in) operating activities |
|
|
571 |
|
|
263 |
|
|
|
|
|
|
|
|
|
|
|
Investing activities: |
|
|
|
|
|
|
|
|
Additions to property, plant and mine development |
|
|
(225) |
|
|
(231) |
|
|
Purchases of investments |
|
|
(53) |
|
|
(6) |
|
|
Other |
|
|
3 |
|
|
1 |
|
|
Net cash provided by (used in) investing activities |
|
|
(275) |
|
|
(236) |
|
|
|
|
|
|
|
|
|
|
|
Financing activities: |
|
|
|
|
|
|
|
|
Dividends paid to common stockholders |
|
|
(76) |
|
|
(76) |
|
|
Distributions to noncontrolling interests |
|
|
(44) |
|
|
(31) |
|
|
Payments for withholding of employee taxes related to stock-based compensation |
|
|
(39) |
|
|
(39) |
|
|
Funding from noncontrolling interests |
|
|
26 |
|
|
32 |
|
|
Payments on lease and other financing obligations |
|
|
(10) |
|
|
(1) |
|
|
Repurchases of common stock |
|
|
— |
|
|
(64) |
|
|
Net cash provided by (used in) financing activities |
|
|
(143) |
|
|
(179) |
|
|
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
|
(3) |
|
|
— |
|
|
Net change in cash, cash equivalents and restricted cash |
|
|
150 |
|
|
(152) |
|
|
Cash, cash equivalents and restricted cash at beginning of period |
|
|
3,489 |
|
|
3,298 |
|
|
Cash, cash equivalents and restricted cash at end of period |
|
$ |
3,639 |
|
$ |
3,146 |
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of cash, cash equivalents and restricted cash: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
3,545 |
|
$ |
3,111 |
|
|
Restricted cash included in Other current assets |
|
|
2 |
|
|
1 |
|
|
Restricted cash included in Other noncurrent assets |
|
|
92 |
|
|
34 |
|
|
Total cash, cash equivalents and restricted cash |
|
$ |
3,639 |
|
$ |
3,146 |
|
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.
6
NEWMONT GOLDCORP CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in millions)
|
|
|
At March 31, |
|
At December 31, |
|
||
|
|
|
2019 |
|
2018 |
|
||
|
ASSETS |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
3,545 |
|
$ |
3,397 |
|
|
Trade receivables (Note 4) |
|
|
209 |
|
|
254 |
|
|
Other accounts receivables |
|
|
80 |
|
|
92 |
|
|
Investments (Note 16) |
|
|
56 |
|
|
48 |
|
|
Inventories (Note 17) |
|
|
634 |
|
|
630 |
|
|
Stockpiles and ore on leach pads (Note 18) |
|
|
739 |
|
|
697 |
|
|
Other current assets |
|
|
134 |
|
|
159 |
|
|
Current assets |
|
|
5,397 |
|
|
5,277 |
|
|
Property, plant and mine development, net |
|
|
12,264 |
|
|
12,258 |
|
|
Investments (Note 16) |
|
|
336 |
|
|
271 |
|
|
Stockpiles and ore on leach pads (Note 18) |
|
|
1,835 |
|
|
1,866 |
|
|
Deferred income tax assets |
|
|
378 |
|
|
401 |
|
|
Other non-current assets |
|
|
670 |
|
|
642 |
|
|
Total assets |
|
$ |
20,880 |
|
$ |
20,715 |
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
287 |
|
$ |
303 |
|
|
Employee-related benefits |
|
|
230 |
|
|
305 |
|
|
Income and mining taxes payable |
|
|
96 |
|
|
71 |
|
|
Debt (Note 19) |
|
|
626 |
|
|
626 |
|
|
Lease and other financing obligations (Note 20) |
|
|
59 |
|
|
27 |
|
|
Other current liabilities (Note 21) |
|
|
517 |
|
|
455 |
|
|
Current liabilities |
|
|
1,815 |
|
|
1,787 |
|
|
Debt (Note 19) |
|
|
3,420 |
|
|
3,418 |
|
|
Lease and other financing obligations (Note 20) |
|
|
268 |
|
|
190 |
|
|
Reclamation and remediation liabilities (Note 5) |
|
|
2,499 |
|
|
2,481 |
|
|
Deferred income tax liabilities |
|
|
614 |
|
|
612 |
|
|
Employee-related benefits |
|
|
415 |
|
|
401 |
|
|
Other non-current liabilities (Note 21) |
|
|
330 |
|
|
314 |
|
|
Total liabilities |
|
|
9,361 |
|
|
9,203 |
|
|
|
|
|
|
|
|
|
|
|
Contingently redeemable noncontrolling interest (Note 10) |
|
|
48 |
|
|
47 |
|
|
|
|
|
|
|
|
|
|
|
EQUITY |
|
|
|
|
|
|
|
|
Common stock |
|
|
860 |
|
|
855 |
|
|
Treasury Stock |
|
|
(109) |
|
|
(70) |
|
|
Additional paid-in capital |
|
|
9,632 |
|
|
9,618 |
|
|
Accumulated other comprehensive income (loss) (Note 22) |
|
|
(269) |
|
|
(284) |
|
|
Retained earnings |
|
|
385 |
|
|
383 |
|
|
Newmont stockholders' equity |
|
|
10,499 |
|
|
10,502 |
|
|
Noncontrolling interests |
|
|
972 |
|
|
963 |
|
|
Total equity |
|
|
11,471 |
|
|
11,465 |
|
|
Total liabilities and equity |
|
$ |
20,880 |
|
$ |
20,715 |
|
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.
7
NEWMONT GOLDCORP CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(unaudited, in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
|
|
|
Contingently |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional |
|
Other |
|
|
|
|
|
|
|
|
|
|
Redeemable |
|
|||
|
|
|
Common Stock |
|
Treasury Stock |
|
Paid-In |
|
Comprehensive |
|
Retained |
|
Noncontrolling |
|
Total |
|
Noncontrolling |
|
||||||||||||
|
|
|
Shares |
|
Amount |
|
Shares |
|
Amount |
|
Capital |
|
Income (Loss) |
|
Earnings |
|
Interests |
|
Equity |
|
Interest |
|
||||||||
|
|
|
(in millions) |
|
|
|
|
|||||||||||||||||||||||
|
Balance at December 31, 2018 |
|
535 |
|
$ |
855 |
|
(2) |
|
$ |
(70) |
|
$ |
9,618 |
|
$ |
(284) |
|
$ |
383 |
|
$ |
963 |
|
$ |
11,465 |
|
$ |
47 |
|
|
Cumulative-effect adjustment of adopting ASU No. 2016-02 |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(9) |
|
|
— |
|
|
(9) |
|
|
— |
|
|
Net income (loss) |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
87 |
|
|
31 |
|
|
118 |
|
|
1 |
|
|
Other comprehensive income (loss) |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
— |
|
|
15 |
|
|
— |
|
|
— |
|
|
15 |
|
|
— |
|
|
Dividends declared (1) |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(76) |
|
|
— |
|
|
(76) |
|
|
— |
|
|
Distributions declared to noncontrolling interests |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(44) |
|
|
(44) |
|
|
— |
|
|
Cash calls requested from noncontrolling interests (2) |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
22 |
|
|
22 |
|
|
— |
|
|
Withholding of employee taxes related to stock-based compensation |
|
— |
|
|
— |
|
(1) |
|
|
(39) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(39) |
|
|
— |
|
|
Stock-based awards and related share issuances |
|
2 |
|
|
5 |
|
— |
|
|
— |
|
|
14 |
|
|
— |
|
|
— |
|
|
— |
|
|
19 |
|
|
— |
|
|
Balance at March 31, 2019 |
|
537 |
|
$ |
860 |
|
(3) |
|
$ |
(109) |
|
$ |
9,632 |
|
$ |
(269) |
|
$ |
385 |
|
$ |
972 |
|
$ |
11,471 |
|
$ |
48 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional |
|
Other |
|
|
|
|
|
|
|
|
|
|
||
|
|
|
Common Stock |
|
Treasury Stock |
|
Paid-In |
|
Comprehensive |
|
Retained |
|
Noncontrolling |
|
Total |
|
|||||||||||
|
|
|
Shares |
|
Amount |
|
Shares |
|
Amount |
|
Capital |
|
Income (Loss) |
|
Earnings |
|
Interests |
|
Equity |
|
|||||||
|
|
|
(in millions) |
|
|||||||||||||||||||||||
|
Balance at December 31, 2017 |
|
534 |
|
$ |
855 |
|
(1) |
|
$ |
(30) |
|
$ |
9,592 |
|
$ |
(292) |
|
$ |
410 |
|
$ |
984 |
|
$ |
11,519 |
|
|
Cumulative-effect adjustment of adopting ASU No. 2016-01 |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
— |
|
|
115 |
|
|
(115) |
|
|
— |
|
|
— |
|
|
Net income (loss) |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
192 |
|
|
(1) |
|
|
191 |
|
|
Other comprehensive income (loss) |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
— |
|
|
8 |
|
|
— |
|
|
— |
|
|
8 |
|
|
Dividends declared (1) |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(76) |
|
|
— |
|
|
(76) |
|
|
Distributions declared to noncontrolling interests |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(31) |
|
|
(31) |
|
|
Cash calls requested from noncontrolling interests (3) |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
28 |
|
|
28 |
|
|
Repurchase and retirement of common stock |
|
(2) |
|
|
(3) |
|
— |
|
|
— |
|
|
(30) |
|
|
— |
|
|
(31) |
|
|
— |
|
|
(64) |
|
|
Withholding of employee taxes related to stock-based compensation |
|
— |
|
|
— |
|
(1) |
|
|
(39) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(39) |
|
|
Stock-based awards and related share issuances |
|
3 |
|
|
5 |
|
— |
|
|
— |
|
|
14 |
|
|
— |
|
|
— |
|
|
— |
|
|
19 |
|
|
Balance at March 31, 2018 |
|
535 |
|
$ |
857 |
|
(2) |
|
$ |
(69) |
|
$ |
9,576 |
|
$ |
(169) |
|
$ |
380 |
|
$ |
980 |
|
$ |
11,555 |
|
|
(1) |
Cash dividends declared per common share was $0.14 for the three months ended March 31, 2019 and 2018. |
|
(2) |
Cash calls requested from noncontrolling interests of $22 for the three months ended March 31, 2019, represent cash calls requested from Staatsolie for the Merian mine. Staatsolie paid an additional $4 related to prior periods during the three months ended March 31, 2019. |
|
(3) |
Cash calls requested from noncontrolling interests of $28 for the three months ended March 31, 2018 represent cash calls requested from Staatsolie for the Merian mine. Staatsolie paid an additional $4 related to prior periods during the three months ended March 31, 2018. |
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.
8
NEWMONT GOLDCORP CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in millions, except per share, per ounce and per pound amounts)
The interim Condensed Consolidated Financial Statements (“interim statements”) of Newmont Goldcorp Corporation, a Delaware corporation, formerly Newmont Mining Corporation, and its subsidiaries (collectively, “Newmont” or the “Company”) are unaudited. In the opinion of management, all adjustments (including normal recurring adjustments) and disclosures necessary for a fair presentation of these interim statements have been included. The results reported in these interim statements are not necessarily indicative of the results that may be reported for the entire year and represent the results of Newmont prior to the acquisition of Goldcorp, Inc. (“Goldcorp”). These interim statements should be read in conjunction with Newmont’s Consolidated Financial Statements for the year ended December 31, 2018, filed on February 21, 2019 on Form 10-K. The year-end balance sheet data was derived from the audited financial statements and, in accordance with the instructions to Form 10-Q, certain information and footnote disclosures required by United States (“U.S.”) generally accepted accounting principles (“GAAP”) have been condensed or omitted. References to “A$” refers to Australian currency and “C$” refers to Canadian currency.
On January 14, 2019, the Company entered into a definitive agreement (as amended by the first amendment to the arrangement agreement, dated as of February 19, 2019, the “Arrangement Agreement”), which closed on April 18, 2019. Under the terms of the Arrangement Agreement, the Company acquired all outstanding common shares of Goldcorp in a primarily stock transaction (the “Newmont Goldcorp transaction”). Goldcorp shareholders received 0.3280 shares of Newmont’s common stock and $0.02 in cash for each Goldcorp common share they owned, valued at $9.4 billion and $17, respectively. At the closing date, the combined company is now known as Newmont Goldcorp Corporation. For further information regarding subsequent events that occurred as a result of closing of the Newmont Goldcorp transaction, see Note 26.
On March 10, 2019, the Company entered into an implementation agreement with Barrick Gold Corporation (“Barrick”) to establish a joint venture that will combine certain mining operations and assets located in Nevada and historically included in the Company’s North America reportable segment and certain of Barrick’s Nevada mining operations and assets (the “Nevada JV Agreement”). Pursuant to the terms of the Nevada JV Agreement, Barrick and the Company will hold economic interests in the joint venture equal to 61.5% and 38.5%, respectively. Barrick will operate the joint venture with overall management responsibility and will be subject to the supervision and direction of the joint venture’s Board of Managers, which will be comprised of three managers appointed by Barrick and two managers appointed by Newmont. The Company and Barrick will have an equal number of representatives on the joint venture’s technical, finance and exploration advisory committees. Establishment of the joint venture is subject to the usual conditions, including regulatory approvals, and is expected to be completed in the coming months.
In connection with entering into the Nevada JV Agreement, Newmont entered into a mutual two-year standstill agreement with Barrick (the “standstill agreement”). Accordingly, Barrick withdrew its previously announced acquisition proposal for an all-stock acquisition of Newmont and the notice of intent received from a Barrick subsidiary to propose stockholder business at the 2019 annual meeting of stockholders of Newmont. The standstill agreement will terminate two years from the date the joint venture is consummated, or sooner under certain circumstances involving the termination of the Nevada JV Agreement.
.
.
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Risks and Uncertainties
As a global mining company, the Company’s revenue, profitability and future rate of growth are substantially dependent on prevailing prices for gold and copper. 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 the Company’s financial position, results of operations, cash flows, access to capital and on the quantities of reserves that the Company can economically produce. The carrying value of the Company’s Property, plant and mine development, net; Inventories; Stockpiles and ore on leach pads and Deferred income tax assets are particularly sensitive to the outlook for commodity prices. A decline in the Company’s price outlook from current levels could result in material impairment charges related to these assets.
9
NEWMONT GOLDCORP CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in millions, except per share, per ounce and per pound amounts)
In addition to changes in commodity prices, other factors such as changes in mine plans, increases in costs, geotechnical failures, and changes in social, environmental or regulatory requirements can adversely affect the Company’s ability to recover its investment in certain assets and result in impairment charges.
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the accounting for and recognition and disclosure of assets, liabilities, equity, revenues and expenses. The Company must make these estimates and assumptions because certain information used is dependent on future events, cannot be calculated with a high degree of precision from data available or simply cannot be readily calculated based on generally accepted methodologies. Actual results could differ from these estimates.
Leases
The Company adopted Accounting Standards Codification (“ASC”) 842, Leases, on January 1, 2019. Changes to the Company’s accounting policy as a result of adoption are discussed below.
The Company determines if a contractual arrangement represents or contains a lease at inception. Operating leases are included in Other non-current assets and Other current and non-current liabilities in the Consolidated Balance Sheets. Finance leases are included in Property, plant and mine development, net and current and non-current Lease and other financing obligations in the Consolidated Balance Sheets.
Operating and finance lease right-of-use ("ROU") assets and lease liabilities are recognized at the commencement date based on the present value of the future lease payments over the lease term. When the rate implicit to the lease cannot be readily determined, the Company utilizes its incremental borrowing rate in determining the present value of the future lease payments. The incremental borrowing rate is derived from information available at the lease commencement date and represents the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term and amount equal to the lease payments in a similar economic environment. The ROU asset includes any lease payments made and lease incentives received prior to the commencement date. Operating lease ROU assets also include any cumulative prepaid or accrued rent when the lease payments are uneven throughout the lease term. The ROU assets and lease liabilities may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.
The Company has lease arrangements that include both lease and non-lease components. The Company accounts for each separate lease component and its associated non-lease components as a single lease component for the majority of its asset classes. Additionally, for certain lease arrangements that involve leases of similar assets, the Company applies a portfolio approach to effectively account for the underlying ROU assets and lease liabilities.
Recently Adopted Accounting Pronouncements
Leases
In February 2016, ASU No. 2016-02 was issued which, together with subsequent amendments, is included in ASC 842, Leases. The standard was issued to increase transparency and comparability among organizations by requiring the recognition of ROU assets and lease liabilities on the balance sheet for all leases with an initial term greater than one year. Certain qualitative and quantitative disclosures are also required.