10-QPeriod: Q2 FY2012

NEWMONT Corp /DE/ Quarterly Report for Q2 Ended Jun 30, 2012

Filed July 26, 2012For Securities:NEMNEMCL

Summary

Newmont Mining Corporation (NEM) reported its financial results for the second quarter and first half of 2012. For the three months ended June 30, 2012, the company generated sales of $2,229 million, a decrease from $2,384 million in the same period of 2011. Net income attributable to Newmont stockholders was $279 million ($0.56 per share) for the quarter, down from $387 million ($0.78 per share) in the prior year. For the six months ended June 30, 2012, sales increased slightly to $4,912 million from $4,849 million in 2011, while net income attributable to Newmont stockholders decreased to $769 million ($1.55 per share) from $901 million ($1.82 per share) in the prior year. The company experienced higher costs applicable to sales for both gold and copper, which, combined with lower production volumes in some segments and lower copper prices, impacted profitability. Despite these challenges, higher realized gold prices provided some offset. Newmont continues to advance its project pipeline, with significant capital expenditures planned for development projects like Akyem, Conga, and Tanami Shaft, though the Conga project's progress is affected by local protests. The company maintained a strong liquidity position with $1,897 million in cash and cash equivalents at the end of the period.

Financial Highlights

54 data points
Beta

Net Income

$279.00M

EPS (Diluted)

$0.56

Total Assets

$28.66B

Cash & Equivalents

$1.90B

Free Cash Flow

$347.00M

Financial Statements
Beta
Gross Profit$963.00M
R&D Expenses$82.00M
Operating Expenses$1.64B
Operating Income$280.00M
Interest Expense$71.00M
Net Income$279.00M
EPS (Basic)$0.56
EPS (Diluted)$0.56
Shares Outstanding (Basic)496.00M
Shares Outstanding (Diluted)498.00M

Key Highlights

  • 1Net income attributable to Newmont stockholders decreased to $279 million ($0.56/share) for Q2 2012 from $387 million ($0.78/share) in Q2 2011.
  • 2For the six months ended June 30, 2012, net income attributable to Newmont stockholders was $769 million ($1.55/share), down from $901 million ($1.82/share) in the same period of 2011.
  • 3Consolidated sales for Q2 2012 were $2,229 million, down from $2,384 million in Q2 2011, while six-month sales slightly increased to $4,912 million from $4,849 million in 2011.
  • 4Higher costs applicable to sales for both gold and copper, coupled with lower copper prices and production volumes in certain segments, impacted profitability.
  • 5Higher realized gold prices provided a partial offset to declining profitability.
  • 6The company reported $1,897 million in cash and cash equivalents as of June 30, 2012.
  • 7Significant capital expenditures are planned for development projects such as Akyem, Conga, and Tanami Shaft, although the Conga project faces delays due to local community protests.

Frequently Asked Questions

Newmont experienced a decrease in profitability. Net income attributable to Newmont stockholders fell to $279 million ($0.56 per share) for the second quarter of 2012, down from $387 million ($0.78 per share) in the same period of 2011. For the first half of 2012, net income attributable to Newmont stockholders was $769 million ($1.55 per share), a decrease from $901 million ($1.82 per share) in the first half of 2011. This decline was influenced by higher operating costs, lower copper prices, and decreased production in some areas, partially offset by higher gold prices.

Consolidated sales for the second quarter of 2012 were $2,229 million, down from $2,384 million in Q2 2011, primarily driven by lower copper sales volumes and prices, and decreased gold sales volumes. For the first half of 2012, consolidated sales slightly increased to $4,912 million from $4,849 million in 2011. Gold sales saw a slight increase in dollar terms due to higher realized gold prices, despite lower volumes. Copper sales, however, significantly decreased due to both lower volumes and lower realized prices.

Newmont is advancing its project pipeline, with significant capital planned for projects like Akyem, Conga, and Tanami Shaft. However, the Conga project in Peru has been significantly impacted by local political and community protests, leading to a suspension of construction and a 'go slow, water first' approach. The company is reevaluating investment in Conga and may reallocate capital to other projects if current development plans cannot proceed with acceptable risk-adjusted returns. Other projects like Akyem, Tanami Shaft, Phoenix Copper Leach, and Emigrant are progressing as planned.

Newmont maintained a strong liquidity position, with $1,897 million in cash and cash equivalents as of June 30, 2012. The company's debt management included significant debt issuances in early 2012, totaling $2,500 million in Senior Notes (2022 and 2042 maturities), and a $3,000 million revolving credit facility. Debt repayments also occurred, including the 2012 Convertible Senior Notes. The company expects to fund upcoming debt maturities and capital expenditures through operating cash flow, existing cash, and available credit facilities.