Exhibit 99.1
NEWMONT CHANGES ACCOUNTING FOR PREPAID FORWARD SALES CONTRACT AND FORWARD
PURCHASE CONTRACT, REQUIRING RESTATEMENT; THREE YEAR IMPACT TOTALING $6.5
MILLION REDUCTION IN EARNINGS
DENVER, October 23, 2002 - Newmont Mining Corporation (NYSE & ASX:NEM; TSX:NMC)
announced that it will correct the accounting treatment for a prepaid forward
gold sales contract and a forward gold purchase contract that it entered into in
July 1999. These transactions were fully described in the notes to Newmont's
financial statements contained in Newmont's quarterly report on Form 10-Q for
the second quarter of 1999 and in each subsequent quarterly and annual report
filed by Newmont with the Securities and Exchange Commission. Newmont will
restate its financial statements beginning with the third quarter of 1999
through the second quarter of 2002.
The correction follows a review of Newmont's accounting policies conducted by
its new independent public accountants, PricewaterhouseCoopers LLP, in
preparation for its upcoming annual audit of Newmont's 2002 financial
statements. PricewaterhouseCoopers was appointed in May 2002 as Newmont's
independent public accountants, replacing Arthur Andersen LLP. As a result of
the review, Newmont, in consultation with PricewaterhouseCoopers, concluded that
the prepaid forward sales contract did not meet the technical criteria to be
accounted for in the manner reflected in Newmont's historical financial
statements. Newmont, therefore, has determined to account for these transactions
as a financing.
Newmont estimates that, as a result, its net loss will be increased by
approximately $3.6 million, $1.3 million and $1.1 million for 1999, 2000 and
2001, respectively, and net income for the first half of 2002 will be decreased
by $0.5 million, resulting in a $6.5 million reduction in earnings over the
three year period. Newmont's net loss per share will be increased by $0.02 per
share for 1999, $0.01 per share for 2000 and less than one cent per share for
2001, and net income per share will be decreased by less than one cent per share
for the first half of 2002. There will be no change in the cash and cash
equivalents previously reported by Newmont. In addition, Newmont's long-term
debt will be increased by $145.0 million, at December 31, 1999, 2000, 2001 and
June 30, 2002, but its long-term liabilities will be largely unchanged as
Newmont originally accounted for the net proceeds of $137.2 million from the
prepaid forward contract as deferred revenue, which was also classified as a
long-term liability.
As shown in the attachment, over the full term of the transactions, the total
cost incurred will be the same under the new accounting treatment as under the
accounting treatment that has been used historically.
Because Arthur Andersen is unavailable to provide a current audit opinion for
Newmont's historical financial statements once they are restated,
PricewaterhouseCoopers is re-auditing Newmont's financial statements for the
three years ended December 31, 2001. Based on currently available information,
the re-audit is expected to be completed prior to the filing deadline for
Newmont's quarterly report on Form 10-Q for the third quarter of 2002. Following
completion of the re-audit, Newmont will file amendments to its annual report on
Form 10-K for the year ended December 31, 2001 and its quarterly reports on Form
10-Q for the quarterly periods ended March 31 and June 30, 2002.
Newmont will report its third quarter 2002 financial and operating results on
Wednesday, November 13, 2002.
Newmont, based in Denver, is the world's premier gold company and the largest
gold producer with significant assets on five continents.
# # #
This news release contains "forward-looking statements" within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended, which are
intended to be covered by the safe harbor created thereby. Such forward-looking
statements include, without limitation, statements as to the expected date of
completion of the re-audit of Newmont's financial statements. These expectations
or beliefs as to future events or results are expressed in good faith and
believed to have a reasonable basis. However, such forward-looking statements
are subject to risks, uncertainties and other factors, including, without
limitation, the timely completion by PricewaterhouseCoopers of the re-audit. The
company disclaims any intention to update any forward-looking statement.
-2-
Attachment
Comparison of Pre-tax Earnings Impact of Historic Accounting with
Restated Accounting
Pre-tax
Historic (1) Restated (2) Difference
($ million) ($ million) ($ million)
Year
1999 $ - $ 5.5 $ 5.5
2000 9.6 11.5 1.9
2001 10.0 11.7 1.7
2002 10.4 11.8 1.4
2003 10.9 11.9 1.0
2004 11.4 12.0 0.6
2005 11.8 10.2 (1.6)
2006 12.3 6.3 (6.0)
2007 6.4 1.9 (4.5)
----------- ----------- -------------
Total $ 82.8 $ 82.8 $ -
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(1) Accounted for as a reduction in revenue.
(2) Accounted for as interest expense.