10-K/APeriod: FY2021

NEWMONT Corp /DE/ Annual Report (Amendment), Year Ended Dec 31, 2021

Filed July 28, 2022For Securities:NEMNEMCL

Summary

Newmont Corporation's 2021 10-K filing reveals a year of mixed financial performance, with total sales reaching $12.22 billion, an increase from $11.50 billion in 2020, primarily driven by higher gold prices and increased production from the Nevada Gold Mines joint venture. However, net income attributable to stockholders significantly decreased to $1.17 billion ($1.46 per share) from $2.83 billion ($3.52 per share) in the prior year. This decline was largely due to a substantial increase in reclamation and remediation liabilities, which rose from $3.82 billion to $5.84 billion, driven by changes in estimates and the Yanacocha site operations. Despite this, the company maintained a strong liquidity position with $5.09 billion in cash, cash equivalents, and restricted cash at year-end 2021. The company also navigated significant operational changes, including the acquisition of the remaining 85.1% of GT Gold Corporation and a substantial loss on assets held for sale related to the Conga project's mill assets. The report highlights the critical audit matters of reclamation liabilities and goodwill impairment assessment, underscoring the significant judgment involved in estimating these areas. Investors should note the substantial increase in reclamation liabilities and the impact it had on profitability, as well as the ongoing scrutiny of environmental regulations.

Financial Highlights

51 data points
Beta

Revenue

$12.22B

Net Income

$1.17B

9.5% Net Margin

EPS (Diluted)

$1.46

Total Assets

$40.56B

Cash & Equivalents

$4.99B

Free Cash Flow

$4.28B

Financial Statements
Beta
Revenue$12.22B
R&D Expenses$154.00M
Operating Expenses$10.96B
Operating Income$1.11B
Net Income$1.17B
EPS (Basic)$1.46
EPS (Diluted)$1.46
Shares Outstanding (Basic)799.00M
Shares Outstanding (Diluted)801.00M

Key Highlights

  • 1Total sales increased to $12.22 billion in 2021 from $11.50 billion in 2020, indicating improved revenue generation.
  • 2Net income attributable to Newmont stockholders decreased significantly to $1.17 billion in 2021 from $2.83 billion in 2020.
  • 3Reclamation and remediation liabilities saw a substantial increase, rising from $3.82 billion at the end of 2020 to $5.84 billion at the end of 2021, primarily due to updated estimates at the Yanacocha site.
  • 4The company completed the acquisition of the remaining 85.1% of GT Gold Corporation for $326 million.
  • 5A significant loss of $571 million was recognized on assets held for sale, specifically related to the Conga project's mill assets.
  • 6Cash, cash equivalents, and restricted cash remained strong, totaling $5.09 billion at December 31, 2021.
  • 7The company's goodwill remained stable at $2.77 billion, with no impairment charges recorded in 2021.

Frequently Asked Questions

The primary driver for the significant decrease in net income in 2021 was a substantial increase in reclamation and remediation liabilities, which rose from $3.82 billion to $5.84 billion. This increase was largely attributed to revised estimates related to the Yanacocha site operations and other environmental remediation efforts.

Newmont actively managed its debt in 2021. The company redeemed its $550 million Senior Notes due June 2021 and purchased approximately $93 million of its 2023 Senior Notes through tender offers. It also issued $1,000 million in 2.60% Sustainability-Linked Senior Notes due July 2032. Overall, total debt decreased from $6.03 billion in 2020 to $5.71 billion in 2021, while the fair value of debt decreased from $7.59 billion to $6.71 billion.

The increase in reclamation and remediation liabilities represents a higher estimated future cost for environmental obligations at mining sites. This directly impacts the company's reported net income and equity. Investors should monitor these liabilities closely, as they are subject to ongoing estimates and can be influenced by regulatory changes and operational developments, as highlighted by the critical audit matter related to these liabilities.

Newmont identifies several key risks and uncertainties, including the high volatility of metal prices (gold, copper, silver, lead, and zinc), which significantly impacts revenue and asset valuations. Other risks include changes in mine plans, cost increases, geotechnical failures, shifts in social, environmental, or regulatory requirements, and the potential impact of global events like pandemics (e.g., COVID-19) on operations, supply chains, and asset values, which could lead to material impairment charges.