NEWS RELEASE [NEWMONT LOGO]
NEWMONT'S SECOND QUARTER ADJUSTED NET INCOME(1) RISES TO $230 MILLION ($0.51 PER
SHARE); NEVADA POWER PLANT AND YANACOCHA GOLD MILL IN COMMERCIAL PRODUCTION
This release should be read in conjunction with Newmont's Second Quarter 2008
Form 10-Q filed with the Securities and Exchange Commission on July 24, 2008
(available at www.newmont.com).
DENVER, July 24, 2008 - Newmont Mining Corporation (NYSE: NEM) today announced
second quarter results, with gold sales of 1.27 million equity ounces at an
average realized gold price of $900 per ounce and costs applicable to sales of
$440 per ounce, resulting in Adjusted net income(1) of $230 million ($0.51 per
share), compared to Adjusted net income(1) of $103 million ($0.23 per share) in
the year ago quarter. Net income on a GAAP basis was $277 million ($0.61 per
share) during the second quarter, compared with a net loss of $2.1 billion
(-$4.57 per share) in the year ago quarter.
Second Quarter 2008 Highlights:
>> Adjusted net income(1) increased 123% to $230 million ($0.51 per
share) from $103 million ($0.23 per share) in the year ago quarter;
>> Adjusted net cash provided from continuing operations(1) increased
87% to $382 million ($0.84 per share) from $204 million ($0.45 per
share) in the year ago quarter;
>> Costs applicable to sales((2)) were $440 per ounce compared to $417
per ounce in the year ago quarter;
>> Revenues increased 19% from the year ago quarter to $1.5 billion at
an average realized gold price of $900 per ounce, compared with an
average realized gold price of $665 per ounce in the year ago
quarter;
>> The Yanacocha gold mill and Nevada power plant began commercial
production, with both projects successfully completed on or ahead of
schedule and at or below forecasted costs; and
>> Realized tax benefit(3) of $129 million, net, resulting in a lower
expected 2008 tax rate of between 22% and 26%.
Richard O'Brien, President and Chief Executive Officer, said, "Our continued
focus on cost control and operational execution has produced another quarter of
strong results that are in-line with our plans, despite the industry-wide
challenge of escalating operating and capital costs. Our capital project
execution also continues to improve, as both the Yanacocha gold mill and the
Nevada power plant were completed on or ahead of schedule and at or below
forecasted costs. By leveraging our global resources, experience, and strategic
partnerships, we were able to successfully complete our projects and transition
from project development to commercial production in a challenging construction
environment."
The Company is maintaining its initial 2008 annual equity gold sales guidance at
between 5.1 and 5.4 million ounces and its initial costs applicable to sales
guidance of between $425 and $450 per ounce. The Company's costs applicable to
sales forecast for 2008 now assumes an oil price of $125 per barrel and an
Australian dollar exchange rate of 0.95 for the balance of the year. Costs
applicable to sales are expected to change by approximately $4 per ounce for
every $10 change in the oil price and by roughly $3 per ounce for every 0.10
change in the Australian dollar exchange rate during the remainder of the year.
As of June 30, 2008, the Company had hedged approximately 44% of the remaining
2008 forecasted Australian dollar denominated operating costs at an average
exchange rate of 0.87. Additionally, the Company's cash distributions from its
holdings in the Canadian Oil Sands Trust are currently expected to offset
approximately 25% of the Company's oil exposure.
(1) See reconciliation from Adjusted financial measures to comparable
GAAP measures on page 9 of this earnings release.
(2) Excludes Loss on settlement of price-capped forward sales contracts,
Amortization and Accretion.
(3) Details of the realized tax benefit are outlined in the Consolidated
Financial Results section of the Company's Form 10-Q filed with the
Securities and Exchange Commission and available at .
NEWMONT - Second Quarter 2008 Operating and Page 1 of 10
Financial Results (July 24, 2008)
REGIONAL OPERATIONS
In the second quarter of 2008, the Company reported equity gold sales of 1.27
million ounces at costs applicable to sales of $440 per ounce. The Company's
operations delivered equity gold sales slightly above management's expectations
during the second quarter, as higher than expected equity sales in the
Australia/New Zealand region and at Ahafo offset lower than expected equity
sales at Batu Hijau and Yanacocha. The Company's second quarter costs applicable
to sales per ounce were impacted by higher than expected costs at Nevada,
Yanacocha and Batu Hijau, offset by lower than expected costs in the
Australia/New Zealand region and at Ahafo.
Nevada - Nevada sold 554,000 equity ounces at costs applicable to sales of $430
per ounce during the second quarter. Equity sales were in-line with
expectations, as stockpiled inventory reductions offset production shortfalls
from the unplanned shut-down of the third party operated Getchell mine and the
Yukon-Nevada Gold processing facility. Gold production was slightly lower than
plan due to the timing of ore recoveries from the Twin Creeks leach pads. The
Company expects this production to be realized during the second half of this
year. Costs applicable to sales during the second quarter were in-line with
expectations, as higher than expected mining costs from processing higher-cost
stockpile inventory as well as higher fuel and underground contract services
were offset by higher by-product credits.
Phoenix Revised Plan - Phoenix sold 54,100 ounces of gold at costs applicable to
sales of $361 per ounce during the second quarter, compared to 39,700 ounces at
costs applicable to sales of $844 per ounce in the year ago quarter. The cost
improvements were driven by increased copper and silver by-product credits and
increased mill throughput.
The Company has spent the past year completing studies at Phoenix, focused on
resolving issues with gold grade reconciliation, complex copper mineralogy, rock
hardness, and operating and design inefficiencies. The Company has completed an
extensive re-drilling program and has incorporated the results into a new mine
plan that more accurately defines the ore body. Based on the updated mine plan
and current commodity price assumptions, equity gold production during the next
five-years is currently expected to average approximately 200,000 to 250,000
ounces per annum at costs applicable to sales of approximately $400 to $500 per
ounce, net of by-product credits. The Company will continue to focus on
productivity and cost improvements, process optimization opportunities, and near
mine exploration.
Commercial Operation at Nevada Power Plant - The 200 megawatt coal-fired power
plant achieved commercial production on May 1, 2008. The Company expects to save
approximately $70 to $80 million per year in costs applicable to sales from the
lower cost of self-generated electricity, compared to purchasing power in the
current market. Capital costs for the power plant are expected to be
approximately $620 million, at the low-end of previous guidance of $620 to $640
million.
Yanacocha - Equity gold sales during the second quarter at Yanacocha in Peru
were 222,000 ounces at costs applicable to sales of $374 per ounce. Equity sales
were slightly below expectations, as marginally lower production was offset by
inventory reductions. Leach placement at the end of the second quarter was ahead
of plan due to a change in mine sequence, with slightly higher production
anticipated during the second half of 2008.
Commercial Operation at Gold Mill - The gold mill achieved commercial production
on April 1, 2008. Production from the mill contributed approximately 40,000
ounces to equity gold sales during the second quarter, with mill ramp-up
exceeding expectations. During the first five years of operation, the design
throughput is expected to be approximately 5 million tons per annum with gold
and silver recoveries averaging between 75% and 85% and between 60% and 75%,
respectively. Equity gold production from the mill is currently expected to
average approximately 200,000 to 250,000 ounces per annum at costs applicable to
sales of approximately $250 to $320 per ounce. Capital costs are expected to be
approximately $230 million, below previous guidance of $250 to $270 million.
Australia/New Zealand - Equity gold sales in Australia/New Zealand were 301,000
ounces at costs applicable to sales of $565 per ounce. Equity gold sales
exceeded expectations due to higher grades at Jundee and Tanami, more than
offseting lower than planned production at Kalgoorlie. Australia/New Zealand
costs applicable to sales are expected to change by roughly $13 per ounce for
every 0.10 change in the Australian dollar exchange rate during the remainder of
the year.
NEWMONT - Second Quarter 2008 Operating and Page 2 of 10
Financial Results (July 24, 2008)
Batu Hijau - Equity gold and copper sales at Batu Hijau in Indonesia were 17,000
ounces and 23 million pounds, respectively, at costs applicable to sales of $518
per ounce and $2.02 per pound, respectively. Sales were below expectations due
to reduced production from lower throughput and recovery. The de-watering
program, developed to address the significant rainfall during the first quarter,
has yielded better than expected results and may contribute to increased
production during the dry season in the second half of the year, potentially
offsetting portions of the second quarter shortfall. Total costs applicable to
sales were consistent with expectations, with higher unit costs largely driven
by lower sales volume during the second quarter.
Ahafo - Equity gold sales at Ahafo in Ghana were 134,000 ounces at costs
applicable to sales of $390 per ounce. Equity gold sales were in-line with plan,
as higher than expected ore grades from the Subika and Apensu pits and inventory
sales were offset by lower than expected throughput. The Company has revised its
expected costs applicable to sales guidance at Ahafo to between $450 and $500
per ounce, compared to original guidance of between $485 and $520 per ounce. The
revised guidance is primarily driven by greater than expected capitalization of
the cost of waste rock placed for the construction of tails and other
facilities, lower than expected power costs, as higher than anticipated power
was available from the Volta River Authority (VRA), and lower than anticipated
labor costs. These favorable variances are partially offset by the rate increase
for power supplied by the VRA starting on July 1, 2008. The Company continues to
negotiate the price per kilowatt hour with the VRA; however, the Company has
included in its revised guidance a potential increase to 2008 costs applicable
to sales of approximately $15 to $30 per ounce for power.
Regional operating variances from the year ago quarter, as disclosed in the
Company's previous earnings releases, are outlined in the Results of
Consolidated Operations section of the Company's Form 10-Q filed with the
Securities and Exchange Commission and available at www.newmont.com.
CAPITAL UPDATE
Consolidated capital expenditures were $448 million during the second quarter,
with approximately 50% attributed to the Boddington project in Australia. The
Company has updated its 2008 consolidated capital expenditure guidance to
between $1.7 and $2.0 billion, compared to original guidance of between $1.8 and
$2.0 billion, primarily due to the deferral of capital expenditures in
Indonesia.
Boddington - Development of the Boddington project in Australia was
approximately 77% complete at the end of the second quarter, with start-up
expected in late 2008 or early 2009. The Company's expected share of total
capital costs of between $1.4 and $1.6 billion continues to be pressured by the
strengthening Australian dollar and the industry-wide labor and commodity cost
pressures. The Company will continue to monitor the impact of the strong
Australian currency and other inflationary pressures on the capital cost
estimate and will provide an update during its third quarter conference call. As
of June 30, 2008, the Company has hedged approximately 63% of the remaining
forecasted Australian dollar denominated capital costs at an average exchange
rate of 0.90.
Batu Hijau - The Company has deferred capital associated with a planned mill
expansion due to the delay in the Indonesian government's renewal of the
Company's forest use permit. The Company now expects capital expenditures of
approximately $80 to $120 million, down from previous guidance of between $145
and $195 million.
A detailed explanation of regional capital expenditures during the second
quarter is outlined in the Liquidity and Capital Resources section of the
Company's Form 10-Q filed with the Securities and Exchange Commission and
available at www.newmont.com.
NEWMONT - Second Quarter 2008 Operating and Page 3 of 10
Financial Results (July 24, 2008)
STATEMENTS OF CONSOLIDATED INCOME (LOSS)
Three Months Six Months
Ended June 30, Ended June 30,
2008 2007 2008 2007
------- ------- ------- -------
(unaudited, in millions,
except per share)
Revenues
Sales - gold, net $ 1,339 $ 936 $ 2,850 $ 1,947
Sales - copper, net 183 340 615 553
------- ------- ------- -------
1,522 1,276 3,465 2,500
------- ------- ------- -------
Costs and expenses
Costs applicable to sales -
gold (1) 655 586 1,296 1,216
Costs applicable to sales -
copper (1) 104 128 254 251
Loss on settlement of price-capped
forward sales contracts -- 531 -- 531
Amortization 184 186 366 365
Accretion 8 8 16 15
Exploration 59 46 98 85
Advanced projects, research and
development 39 13 69 29
General and administrative 37 34 66 67
Write-down of investments 34 -- 56 --
Other expense, net 118 78 181 128
------- ------- ------- -------
1,238 1,610 2,402 2,687
------- ------- ------- -------
Other income (expense)
Other income, net 53 37 90 54
Interest expense, net of
capitalized interest (27) (25) (47) (49)
------- ------- ------- -------
26 12 43 5
------- ------- ------- -------
Income (loss) from continuing
operations before income tax,
minority interest and equity loss
of affiliates 310 (322) 1,106 (182)
Income tax benefit (expense) 37 19 (198) (25)
Minority interest in income of
consolidated subsidiaries (68) (98) (260) (154)
Equity loss of affiliates -- -- (5) --
------- ------- ------- -------
Income (loss) from continuing
operations 279 (401) 643 (361)
(Loss) income from discontinued
operations (2) (1,661) 4 (1,633)
------- ------- ------- -------
Net income (loss) $ 277 $(2,062) $ 647 $(1,994)
======= ======= ======= =======
Income (loss) per common share
Basic:
Income (loss) from continuing
operations $ 0.61 $ (0.89) $ 1.42 $ (0.80)
Income (loss) from
discontinued operations -- (3.68) 0.01 (3.62)
------- ------- ------- -------
Net income (loss) $ 0.61 $ (4.57) $ 1.43 $ (4.42)
======= ======= ======= =======
Diluted:
Income (loss) from continuing
operations $ 0.61 $ (0.89) $ 1.41 $ (0.80)
Income (loss) from
discontinued operations -- (3.68) 0.01 (3.62)
------- ------- ------- -------
Net income (loss) $ 0.61 $ (4.57) $ 1.42 $ (4.42)
======= ======= ======= =======
Basic weighted-average common shares
outstanding 454 451 454 451
======= ======= ======= =======
Diluted weighted-average common
shares outstanding 456 451 457 451
======= ======= ======= =======
Cash dividends declared per common
share $ 0.10 $ 0.10 $ 0.20 $ 0.20
======= ======= ======= =======
(1) Exclusive of Loss on settlement of price-capped forward sales contracts,
Amortization and Accretion.
The Company's financial statements can be found on its website at
http://www.newmont.com.
NEWMONT - Second Quarter 2008 Operating and Page 4 of 10
Financial Results (July 24, 2008)
CONSOLIDATED BALANCE SHEETS
At June 30, At December 31,
2008 2007
------------ ------------
(unaudited, in millions)
ASSETS
Cash and cash equivalents $ 1,036 $ 1,231
Marketable securities and other
short-term investments 72 61
Trade receivables 251 177
Accounts receivable 159 168
Inventories 454 463
Stockpiles and ore on leach pads 367 373
Deferred income tax assets 102 112
Other current assets 406 87
------------ ------------
Current assets 2,847 2,672
Property, plant and mine development, net 10,032 9,140
Investments 1,933 1,527
Long-term stockpiles and ore on leach pads 901 788
Deferred income tax assets 1,070 1,027
Other long-term assets 271 234
Goodwill 186 186
Assets of operations held for sale 3 24
------------ ------------
Total assets $ 17,243 $ 15,598
============ ============
LIABILITIES
Current portion of long-term debt $ 261 $ 255
Accounts payable 321 339
Employee-related benefits 147 153
Income and mining taxes 152 88
Other current liabilities 735 665
------------ ------------
Current liabilities 1,616 1,500
Long-term debt 3,085 2,683
Reclamation and remediation liabilities 664 623
Deferred income tax liabilities 1,277 1,025
Employee-related benefits 212 226
Other long-term liabilities 153 150
Liabilities of operations held for sale 94 394
------------ ------------
Total liabilities 7,101 6,601
------------ ------------
Minority interests in subsidiaries 1,547 1,449
------------ ------------
STOCKHOLDERS' EQUITY
Common stock 703 696
Additional paid-in capital 6,651 6,696
Accumulated other comprehensive income 1,395 957
Retained deficit (154) (801)
------------ ------------
Total stockholders' equity 8,595 7,548
------------ ------------
Total liabilities and stockholders'
equity $ 17,243 $ 15,598
============ ============
The Company's financial statements can be found on its website at
http://www.newmont.com.
NEWMONT - Second Quarter 2008 Operating and Page 5 of 10
Financial Results (July 24, 2008)
STATEMENTS OF CONSOLIDATED CASH FLOW
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ------------------
2008 2007 2008 2007
------- ------- ------- -------
(unaudited, in millions)
Operating activities:
Net income (loss) $ 277 $(2,062) $ 647 $(1,994)
Adjustments to reconcile net income
(loss) to net cash from continuing operations:
Amortization 184 186 366 365
Loss (income)from discontinued
operations 2 1,661 (4) 1,633
Accretion of accumulated reclamation
obligations 11 10 21 19
Deferred income taxes (155) (199) (203) (143)
Write-down of investments 34 -- 56 --
Stock based compensation and other
benefits 13 12 24 25
Minority interest in income of
consolidated subsidiaries 68 98 260 154
Gain on asset sales, net (9) (2) (13) (4)
Other operating adjustments and
write-downs 67 37 86 47
Net change in operating assets and
liabilities (110) (391) (264) (726)
------- ------- ------- -------
Net cash provided from (used in)
continuing operations 382 (650) 976 (624)
Net cash (used in) provided from
discontinued operations (12) 29 (112) 61
------- ------- ------- -------
Net cash provided from (used in)
operations 370 (621) 864 (563)
------- ------- ------- -------
Investing activities:
Additions to property, plant and mine
development (448) (350) (897) (710)
Investments in marketable debt and
equity securities (14) (5) (17) (158)
Proceeds from sale of marketable debt
and equity securities 17 10 17 134
Acquisitions, net (7) -- (325) --
Cash received on repayment of Batu
Hijau carried interest -- 161 -- 161
Other (19) 4 (16) 5
------- ------- ------- -------
Net cash used in investing activities
of continuing operations (471) (180) (1,238) (568)
Net cash (used in) provided from
investing activities of discontinued
operations (3) 76 (6) 74
------- ------- ------- -------
Net cash used in investing activities (474) (104) (1,244) (494)
------- ------- ------- -------
Financing activities:
Proceeds from debt, net 451 1,161 1,023 1,161
Repayment of debt (251) (397) (627) (418)
Dividends paid to common stockholders (46) (45) (91) (90)
Dividends paid to minority interests (49) (114) (147) (115)
Proceeds from stock issuance 7 5 24 14
Change in restricted cash and other 6 (6) 7 2
------- ------- ------- -------
Net cash provided from financing
activities 118 604 189 554
------- ------- ------- -------
Effect of exchange rate changes on cash 8 3 (4) 5
------- ------- ------- -------
Net change in cash and cash equivalents 22 (118) (195) (498)
Cash and cash equivalents at
beginning of period 1,014 786 1,231 1,166
------- ------- ------- -------
Cash and cash equivalents at end of
period $ 1,036 $ 668 $ 1,036 $ 668
======= ======= ======= =======
The Company's financial statements can be found on its website at
http://www.newmont.com. Detailed explanation of the Company's cash flow
statement is outlined in the Liquidity and Capital Resources section of the Form
10-Q filed with the Securities and Exchange Commission and available at
http://www.newmont.com.
NEWMONT - Second Quarter 2008 Operating and Page 6 of 10
Financial Results (July 24, 2008)
SALES STATISTICS
Three Months Six Months
Ended June 30, Ended June 30,
------------- -------------
2008 2007 2008 2007
----- ----- ----- -----
Gold
Consolidated ounces sold (thousands)
Nevada (1) 554 531 1,080 1,091
Yanacocha 432 312 972 767
Australia/New Zealand
Jundee 109 71 200 133
Tanami 95 130 190 243
Kalgoorlie 63 70 132 165
Waihi 34 27 65 41
----- ----- ----- -----
301 298 587 582
----- ----- ----- -----
Batu Hijau (2) 37 90 157 174
Ahafo (3) 134 123 239 248
Other
Kori Kollo 21 22 41 46
La Herradura 25 23 49 45
Golden Giant -- 9 -- 12
----- ----- ----- -----
46 54 90 103
----- ----- ----- -----
1,504 1,408 3,125 2,965
===== ===== ===== =====
Equity ounces sold (thousands)
Nevada (1) 554 531 1,080 1,091
Yanacocha 222 160 499 394
Australia/New Zealand
Jundee 109 71 200 133
Tanami 95 130 190 243
Kalgoorlie 63 70 132 165
Waihi 34 27 65 41
----- ----- ----- -----
301 298 587 582
----- ----- ----- -----
Batu Hijau (2) 17 44 71 89
Ahafo (3) 134 123 239 248
Other
Kori Kollo 18 20 36 41
La Herradura 25 23 49 45
Golden Giant -- 9 -- 12
----- ----- ----- -----
43 52 85 98
----- ----- ----- -----
1,271 1,208 2,561 2,502
Discontinued Operations
Pajingo -- 40 -- 88
----- ----- ----- -----
1,271 1,248 2,561 2,590
===== ===== ===== =====
Copper
Batu Hijau pounds sold (millions)(2)
Consolidated 51 97 157 188
Equity 23 48 70 96
(1) Includes incremental start-up ounces of 1 in the first half of 2008.
(2) Economic interest decreased to 45% from 52.875% on May 25, 2007.
(3) Includes incremental start-up ounces of 16 in the second quarter and first
half of 2008.
This information and other detailed regional production statistics can be found
in the Regional Operating Statistics section of the Company's website at
http://www.newmont.com.
NEWMONT - Second Quarter 2008 Operating and Page 7 of 10
Financial Results (July 24, 2008)
CAS AND CONSOLIDATED CAPITAL EXPENDITURES STATISTICS
Three Months Six Months
Ended June 30, Ended June 30,
------------------- -------------------
2008 2007 2008 2007
-------- -------- -------- --------
Gold
Costs Applicable to Sales ($/ounce)(1)
Nevada $ 430 $ 478 $ 420 $ 481
Yanacocha 374 392 339 326
Australia/New Zealand
Jundee 401 502 410 530
Tanami 605 382 565 402
Kalgoorlie 860 494 817 553
Waihi 441 417 448 478
-------- -------- -------- --------
565 440 555 479
-------- -------- -------- --------
Batu Hijau 518 213 358 263
Ahafo 390 364 425 344
Other Operations
Kori Kollo 474 354 461 343
La Herradura 388 264 357 293
Golden Giant -- 172 -- 177
-------- -------- -------- --------
428 286 404 302
-------- -------- -------- --------
Average $ 440 $ 417 $ 417 $ 410
======== ======== ======== ========
Copper
Costs Applicable to Sales
($/pound) (1)
Batu Hijau $ 2.02 $ 1.33 $ 1.62 $ 1.34
Three Months Six Months
Ended June 30, Ended June 30,
------------------- -------------------
2008 2007 2008 2007
-------- -------- -------- --------
Capital Expenditures ($ million)
Nevada $ 80 $ 119 $ 172 $ 277
Yanacocha 38 58 77 114
Australia/New Zealand 236 128 468 224
Batu Hijau 32 17 61 24
Africa 35 19 68 56
Hope Bay 21 -- 30 --
Other Operations 3 5 16 8
Corporate and Other 3 4 5 7
-------- -------- -------- --------
Total $ 448 $ 350 $ 897 $ 710
======== ======== ======== ========
(1) Excludes Loss on settlement of price-capped forward sales contracts,
Amortization and Accretion. Beginning in 2008, regional administrative,
community development, marketing, and accretion costs have been classified
outside of costs applicable to sales. Amounts for 2007 have been
reclassified to conform to the 2008 presentation.
This information and other detailed regional production statistics can be found
in the Regional Operating Statistics section of the Company's website at
http://www.newmont.com.
NEWMONT - Second Quarter 2008 Operating and Page 8 of 10
Financial Results (July 24, 2008)
SUPPLEMENTAL INFORMATION
Classification Reporting Changes - Certain amounts for the three and six months
ended June 30, 2007 have been reclassified to conform to the 2008 presentation.
The Company reclassified the World Gold Council dues from General and
administrative to Other expense, net, reclassified Accretion from Costs
applicable to sales to a separate Accretion line item, reclassified regional
administrative and community development from Costs applicable to sales to Other
expense, net and reclassified marketing costs from Costs applicable to sales to
General and administrative. The Consolidated Statements of Income (Loss) and the
Consolidated Statements of Cash Flows have also been reclassified for
discontinued operations. These changes were reflected for all periods presented.
Reconciliation of Adjusted Net Income and Adjusted Net cash provided from
continuing operations to GAAP Net Income and GAAP Net cash provided from (used
in) operations, respectively - Management of the Company uses the non-GAAP
financial measures Adjusted net income and Adjusted net cash provided from
continuing operations to evaluate the Company's operating performance, and for
planning and forecasting future business operations. The Company believes the
use of Adjusted net income and Adjusted net cash provided from continuing
operations allows investors and analysts to compare the results of the
continuing operations of the Company and its direct and indirect subsidiaries
relating to the production and sale of minerals to similar operating results of
other mining companies, by excluding exceptional or unusual items, income or
loss from discontinued operations and the permanent impairment of assets,
including marketable securities and goodwill. Management's determination of the
components of Adjusted net income and Adjusted net cash provided from continuing
operations are evaluated periodically and based, in part, on a review of
non-GAAP financial measures used by mining industry analysts.
Adjusted net income and Adjusted net cash provided from continuing operations
are not, and should not be used as, alternatives to GAAP Net income and GAAP Net
cash measures as reflected in the consolidated financial statements of the
Company. Neither is a measure of financial performance under GAAP and these
measures should not be considered in isolation or as a substitute to performance
measures calculated in accordance with GAAP. The tables below set forth a
reconciliation of Adjusted net income to GAAP Net income and of Adjusted net
cash provided from continuing operations to GAAP Net cash provided from (used
in) continuing operations, which are the most directly comparable GAAP financial
measures.
- -----------------------------------------------------------------------------------------------------------------------
Description ($ million expect per share, after-tax) Q2 2008 Per Share Q2 2007 Per Share
--------- --------- --------- ---------
Adjusted Net income $ 230 $ 0.51 $ 103 $ 0.23
Income taxes 129 0.28 -- --
Legacy reclamation obligations (41) (0.09) (11) (0.02)
Write-down of marketable securities (34) (0.08) -- --
Western Australia gas interruption (5) (0.01) -- --
Settlement of gold contracts -- -- (460) (1.02)
Batu Hijau minority loan repayment -- -- (25) (0.06)
Senior management retirement -- -- (8) (0.02)
- -----------------------------------------------------------------------------------------------------------------------
GAAP Income from continuing operations $ 279 $ 0.61 $ (401) $ (0.89)
Income from discontinued operations (2) -- (1,661) (3.68)
- -----------------------------------------------------------------------------------------------------------------------
GAAP Net income $ 277 $ 0.61 $ (2,062) $ (4.57)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Description ($ million expect per share) Q2 2008 Per Share Q2 2007 Per Share
--------- --------- --------- ---------
Adjusted Net cash provided from continuing operations $ 382 $ 0.84 $ 204 $ 0.45
Pre-tax settlement of price-capped forward sales contracts -- -- (578) (1.28)
Settlement of pre-acquisition Australian income taxes of Normandy -- -- (276) (0.61)
- -----------------------------------------------------------------------------------------------------------------------
GAAP Net cash provided from (used in) continuing operations $ 382 $ 0.84 $ (650) $ (1.43)
Net cash (used in) provided from discontinued operations (12) (0.02) 29 0.06
- -----------------------------------------------------------------------------------------------------------------------
GAAP Net cash provided from (used in) operations $ 370 $ 0.82 $ (621) $ (1.37)
- -----------------------------------------------------------------------------------------------------------------------
NEWMONT - Second Quarter 2008 Operating and Page 9 of 10
Financial Results (July 24, 2008)
- ----------------------------------------------------------------------------------------------------------------------------
2008 Annual Guidance - Description Jun 2008 Apr 2008 Feb 2008
- ----------------------------------------------------------------------------------------------------------------------------
Equity gold sales (thousand ounces) 5,100 - 5,400 5,100 - 5,400 5,100 - 5,400
Costs applicable to sales ($/ounce) $425 - $450 $425 - $450 $425 - $450
Equity copper sales (million pounds) 125 - 150 125 - 150 155 - 165
Costs applicable to sales ($/pound) $1.50 - $1.75 $1.50 - $1.75 $1.30 - $1.40
Consolidated capital expenditures ($ million) $1,700 - $2,000 $1,800 - $2,000 $1,800 - $2,000
Amortization ($ million) $725 - $775 $725 - $775 $725 - $775
Exploration ($ million) $220 - $230 $220 - $230 $220 - $230
Advanced projects, research and development ($ million) $160 - $190 $160 - $190 $120 - $180
General and administrative expenses ($ million) $140 - $150 $140 - $150 $140 - $150
Interest expense, net of capitalized interest ($ million) $60 - $80 $60 - $80 $110 - $120
Effective tax rate 22% - 26% 28% - 32% 30% - 34%
- ----------------------------------------------------------------------------------------------------------------------------
Forecast Assumptions Jun 2008 Apr 2008 Feb 2008
- ----------------------------------------------------------------------------------------------------------------------------
Oil Price ($/barrel) $125 $90 $80
Australian Dollar Exchange Rate 0.95 0.925 0.875
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To view complete financial disclosure, including regional mine statistics,
Results of Consolidated Operations, Liquidity and Capital Resources,
Management's Discussion & Analysis, the Form 10-Q, and a complete outline of the
2008 Operating and Financial guidance by region please see www.newmont.com.
The Company's second quarter earnings conference call and web cast presentation
will be held on July 24, 2008 beginning at 10:00 a.m. Eastern Time (8:00 a.m.
Mountain Time). To participate:
Dial-In Number: 210-839-8502
Leader: John Seaberg
Password: Newmont
Replay Number: 203-369-0902
The conference call will also be simultaneously carried on our web site at
www.newmont.com under Investor Information/Earnings Release and will be archived
there for a limited time.
Investor Contacts
-----------------
John Seaberg 303.837.5743 john.seaberg@newmont.com
Media Contacts
--------------
Omar Jabara 303.837.5114 omar.jabara@newmont.com
Cautionary Statement:
This news release contains "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended that are intended to be covered by
the safe harbor created by such sections. Such forward-looking statements
include, without limitation, (i) estimates of future mineral production and
sales; (ii) estimates of future costs applicable to sales, other expenses and
taxes for specific operations and on a consolidated basis; (iii) estimates of
future capital expenditures,construction, production or closure activities; and
(iv) statements regarding potential cost savings, productivity, operating
performance, and cost structure. Where the Company expresses or implies an
expectation or belief as to future events or results, such expectation or belief
is expressed in good faith and believed to have a reasonable basis. However,
forward-looking statements are subject to risks, uncertainties and other
factors, which could cause actual results to differ materially from future
results expressed, projected or implied by such forward-looking statements. Such
risks include, but are not limited to, gold and other metals price volatility,
currency fluctuations, increased production costs and variances in ore grade or
recovery rates from those assumed in mining plans, political and operational
risks in the countries in which we operate, and governmental regulation and
judicial outcomes. For a more detailed discussion of such risks and other
factors, see the Company's 2007 Annual Report on Form 10-K, filed on February
21, 2008, with the Securities and Exchange Commission, as well as the Company's
other SEC filings. The Company does not undertake any obligation to release
publicly revisions to any "forward-looking statement," to reflect events or
circumstances after the date of this news release, or to reflect the occurrence
of unanticipated events, except as may be required under applicable securities
laws.
NEWMONT - Second Quarter 2008 Operating and Page 10 of 10
Financial Results (July 24, 2008)