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Newmont Announces Third Quarter 2013 Results

Stocks in this article: NEM

Non-GAAP Financial Measures

Non-GAAP financial measures are intended to provide additional information only and do not have any standard meaning prescribed by Generally Accepted Accounting Principles (“GAAP”). These measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.

Reconciliation of Adjusted Net Income to GAAP Net Income

Management uses the non-GAAP financial measure Adjusted net income to evaluate the Company’s operating performance, and for planning and forecasting future business operations. The Company believes the use of Adjusted net income 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 are evaluated periodically and based, in part, on a review of non-GAAP financial measures used by mining industry analysts.

Net income attributable to Newmont stockholders is reconciled to Adjusted net income as follows:

Three Months Ended September 30, Nine Months Ended September 30,
2013   2012 2013   2012
Net income (loss) attributable to Newmont stockholders $ 408 $ 367 $ (1,296 ) $ 1,136
Loss (income) from discontinued operations 21 33 (53 ) 104
Impairments 29 7 1,530 38
Tax valuation allowance - - 535 -
TMAC transaction costs - - 30 -
Restructuring and other 12 20 28 20
Asset sales (243 ) (1 ) (243 ) (8 )
Boddington contingent consideration   -     -     -     8  
Adjusted net income $ 227   $ 426   $ 531   $ 1,298  
Adjusted net income per share, basic $ 0.46 $ 0.86 $ 1.07 $ 2.62
Adjusted net income per share, diluted $ 0.46 $ 0.85 $ 1.07 $ 2.60

Net income (loss) attributable to Newmont stockholders for the three and nine months ended September 30, 2013 was impacted by stockpile and leach pad write-downs of $35 and $310, respectively, net of tax and minority interest, which is not reflected in the table above.

CAS per Ounce/Pound

Costs applicable to sales per ounce/pound are non-GAAP financial measures. These measures are calculated by dividing the costs applicable to sales of gold and copper by gold ounces or copper pounds sold, respectively. These measures are calculated on a consistent basis for the periods presented on both a consolidated and attributable to Newmont basis. Attributable costs applicable to sales are based on our economic interest in production from our mines. For operations where we hold less than a 100% economic share in the production, we exclude the share of gold or copper production attributable to the noncontrolling interest. We include attributable costs applicable to sales per ounce/pound to provide management, investors and analysts with information with which to compare our performance to other gold producers. Costs applicable to sales per ounce/pound statistics are intended to provide additional information only and do not have any standardized meaning prescribed by GAAP and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. The measures are not necessarily indicative of operating profit or cash flow from operations as determined under GAAP. Other companies may calculate these measures differently.

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