Newmont (NEM) Q4 2019 earnings summary

Executive summary

• Transformational 2019 included the Goldcorp acquisition and formation of Nevada Gold Mines (NGM), expanding the portfolio and lifting attributable gold reserves to 100.2 million ounces.

• Generated $9.740 billion in sales and $1.413 billion in free cash flow; reported earnings were materially boosted by a $2.390 billion gain on NGM formation.

• Priorities remained operational execution, investment-grade financial strength, responsible mining and shareholder returns.

Financial highlights

• 2019 sales were $9.740 billion, up 34% YoY; gold sales rose 30%, mainly from Goldcorp production and higher realized gold prices.

• Net income from continuing operations attributable to stockholders was $2.877 billion, or $3.91 diluted EPS, versus $280 million and $0.53 in 2018.

• Adjusted net income was $970 million, or $1.32 diluted EPS; adjusted EBITDA was $3.734 billion, up 45% YoY.

• Net cash from continuing operations was $2.876 billion and free cash flow was $1.413 billion, versus $1.837 billion and $805 million in 2018.

Outlook and guidance

• Over the next five years, annual gold production is expected at 6.2–6.7 million ounces, plus 1.2–1.4 million gold equivalent ounces from other metals.

• Goldcorp-related cash flow improvements are expected to exceed $500 million per year by 2021, 40% above the original $365 million commitment.

• Tanami Expansion 2 is expected to add 150,000–200,000 annual gold ounces for its first five years from 2023 and reduce operating costs by ~10%.

• A planned increase in annual dividends to $1.00 per share was announced; 2020 dividends remained subject to Board approval and declaration.