Newmont (NEM) Q4 2014 earnings summary

Executive summary

• FY14 sales were $7.292B, down 13% YoY; attributable net income was $508M, or $1.02/share, versus a $2.534B attributable loss in FY13.

• Production reached 5.231M oz of gold and 271M lb of copper; lower metal prices and gold sales volumes weighed on revenue, while lower operating costs supported margins.

• FY14 adjusted net income was $545M, or $1.09/share; adjusted EBITDA was $2.125B.

Financial highlights

• Sales were $7.292B vs. $8.414B in FY13; net income was $329M vs. a $2.795B loss, and attributable net income was $508M vs. a $2.534B loss.

• Average realized gold price fell to $1,258/oz from $1,393/oz; copper price fell to $2.65/lb from $2.98/lb. Gold ounces sold declined 14% YoY.

• Costs applicable to sales were $706/oz for gold, down 9% YoY, and $2.88/lb for copper, down 30%; gold operating margin was $552/oz.

• Q4 sales were $2.017B; income from continuing operations was $39M and net income was $15M, or $0.03/share.

Outlook and guidance

• Merian construction began in Aug. 2014; first production is expected in late 2016, with 100%-basis life-of-mine gold output of 300,000–400,000 oz/year and attributable capital spending of $600M–$700M.

• Turf Vent Shaft is expected to start commercial production in late 2015, adding 100,000–150,000 oz/year; estimated capital cost is $400M.

• Waihi Correnso is planned for commercial production in 2015, with estimated capital costs of $30M–$35M.

• Subika Underground is expected to produce ~200,000 oz/year; an investment decision is expected in late 2015 or 2016.

• Long Canyon investment decision was expected in early 2015; Tanami Expansion decision was expected in 2015.