Newmont (NEM) Q4 2016 earnings summary

Executive summary

• 2016 continuing-operations net loss attributable to shareholders was $220 million, or $0.41 per diluted share; adjusted net income was $619 million, or $1.16 per diluted share.

• Operating cash flow from continuing operations reached $1.917 billion and free cash flow was $784 million; attributable gold production rose 7% to 4.898 million oz, and guidance was met.

• Portfolio actions included two new mines entering production and the sale of the Indonesian interest; year-end cash was $2.756 billion after $1.6 billion of debt reduction.

Financial highlights

• Sales were $6.711 billion vs. $6.085 billion in 2015; gold sales rose 11% on new production, higher realized prices and sales volumes, while copper sales fell 11%.

• Adjusted EBITDA was $2.365 billion vs. $1.896 billion; reported EBITDA was $1.279 billion vs. $1.694 billion.

• Total net loss attributable to shareholders was $627 million, including a $407 million loss from discontinued operations; continuing-operations attributable loss was $220 million.

• Continuing-operations net cash from operating activities was $1.917 billion vs. $1.588 billion; free cash flow was $784 million vs. $277 million.

• Average realized gold price was $1,243/oz vs. $1,149; copper was $2.15/lb vs. $2.17.

Outlook and guidance

• Five-year outlook calls for steady gold output at competitive costs, with lower-cost new mines partly offsetting inventory adjustments and stripping at maturing assets.

• Annual attributable gold production guidance is 4.9–5.4 million oz; Merian and Long Canyon ramp-up and Tanami and Northwest Exodus projects are expected to add higher-margin ounces.

• Plans include decisions on Ahafo, Twin Creeks and Yanacocha expansions; expected decisions for Ahafo projects were delayed to H1 2017 by permitting.

• Tanami Expansion was expected to reach commercial production by mid-2017; Ahafo expansion and Subika Underground investment decisions were expected in H1 2017.

• Under stable or rising prices, priorities are growth, debt reduction and dividends; if prices fall, operations and overhead would be optimized and investment delayed to preserve cash.