Newmont (NEM) Q4 2012 earnings summary

Executive summary

• 2012 sales were $9.868B, down 5% YoY; net income attributable to stockholders was $1.809B, or $3.65/share, versus $366M, or $0.74/share, in 2011.

• Adjusted net income was $1.850B, or $3.73/share; consolidated gold production was 5.583M oz and copper production was 224M lb.

• Lower production at Batu Hijau drove weaker volumes and higher unit costs; higher realized gold prices partly offset the impact on sales.

Financial highlights

• Sales fell 5% YoY as fewer gold ounces and copper pounds were sold; realized gold price rose 6% to $1,662/oz while copper price declined 3% to $3.43/lb.

• Income from continuing operations was $2.194B; net income was $2.118B, including $76M of discontinued-operation losses.

• Net cash from continuing operations was $2.388B, down from $3.591B; 2012 capital expenditures were $3.210B and taxes paid were $1.261B.

• Costs applicable to sales rose to $677/oz gold from $591 and $2.34/lb copper from $1.26, reflecting lower output, higher waste mining, milling, royalties and input costs.

Outlook and guidance

• 2013 attributable gold production guidance was 4.8–5.1M oz at consolidated costs applicable to sales of $675–$750/oz; all-in sustaining costs were expected at $1,100–$1,200/oz.

• 2013 attributable copper production guidance was 150–170M lb at consolidated costs applicable to sales of $2.25–$2.50/lb.

• 2013 capital expenditure guidance was $2.4–$2.6B, with ~40% for development and the balance for sustaining capital; spending was expected to decline ~20% YoY.

• Akyem first production was expected in late 2013; guidance called for 350,000–450,000 oz/year in its first five years, with $500–$650/oz costs applicable to sales.

• Exploration expense was expected at $250–$300M in 2013; effective tax rate guidance was 30%–32%.