Newmont (NEM) Q4 2013 earnings summary

Executive summary

• 2013 sales fell 16% YoY to $8.322B as realized gold and copper prices declined; attributable net loss was $2.462B, or $4.94/share, versus $1.809B net income in 2012.

• Adjusted net income was $695M, or $1.40/share; results included substantial asset impairments and inventory write-downs.

• Gold production was 5.463M oz and copper production 227M lb; attributable output was 5.065M oz gold and 144M lb copper.

Financial highlights

• Sales were $8.322B vs. $9.868B in 2012; net loss from continuing operations was $2.777B, while net loss attributable to stockholders was $2.462B.

• Average realized prices declined to $1,393/oz gold from $1,662 and $2.96/lb copper from $3.43; costs applicable to sales rose to $761/oz gold and $4.42/lb copper.

• Net cash from continuing operations was $1.561B, down from $2.388B; cash was $1.555B, debt $6.740B and net debt $5.185B at year-end.

• Income and mining tax benefit was $813M; effective tax rate was 23%, including a $791M deferred tax benefit tied to Long Canyon and Northumberland impairments.

Outlook and guidance

• 2014 gold production guidance: 5.0–5.4M oz consolidated and 4.6–4.9M attributable; costs applicable to sales of $740–$790/oz and AISC of $1,075–$1,175/oz.

• 2014 copper production guidance: 160–175K tonnes consolidated and 95–110K attributable; costs applicable to sales of $2.00–$2.25/lb and AISC of $2.75–$2.95/lb.

• Capital expenditure guidance was $1.3–$1.4B, ~90% sustaining; total spending expected to fall ~30% YoY as Akyem and Phoenix Copper Leach construction wraps up.

• 2014 effective tax rate expected at 34%–37%; net interest expense forecast at $350–$375M and amortization at $1.050–$1.125B.

• Priorities include the Turf/Leeville Vent Shaft, Batu Hijau Phase 6 stripping and determining the path forward for Conga; Conga 2014 spend planned at ~$80M, subject to safety, social support and risk-adjusted returns.