NEWMONT MINING CORP /DE/ (Form Type: 10-Q, Filing Date: 10/28/2005)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

Form 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2005

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-31240

NEWMONT MINING CORPORATION

(Exact name of registrant as specified in its charter)


Delaware		84-1611629
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

1700 Lincoln Street Denver, Colorado		80203
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code (303) 863-7414

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes ¨ No

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12-b2 of the Exchange Act). x Yes ¨ No

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12-b2 of the Exchange Act). ¨ Yes x No

There were 414,963,871 shares of common stock outstanding on October 24, 2005 (and 31,821,705 exchangeable shares).

PART I—FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

NEWMONT MINING CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME


	Three Months Ended September 30,						Nine Months Ended September 30,
	2005			2004			2005			2004
	(unaudited, in millions except per share)
Revenues
Sales - gold, net	$	933		$	897		$	2,619		$	2,644
Sales - base metals, net		231			247			504			588

		1,164			1,144			3,123			3,232

Costs and expenses
Costs applicable to sales (exclusive of depreciation, depletion and amortization shown separately below)
Gold		516			478			1,482			1,442
Base metals		86			91			227			227
Depreciation, depletion and amortization		160			162			482			504
Exploration		41			28			107			76
Advanced projects, research and development		18			25			50			59
General and administrative		32			22			95			80
Write down of long-lived assets		—			10			2			26
Other, net		20			34			58			48

		873			850			2,503			2,462

Other income (expense)
Other income, net (Note 12)		66			47			177			51
Interest expense, net		(24	)		(27	)		(76	)		(77	)

		42			20			101			(26	)

Income from continuing operations before income tax expense, minority interest and equity income of affiliates		333			314			721			744
Income tax expense		(94	)		(94	)		(186	)		(214	)
Minority interest in income of subsidiaries		(115	)		(90	)		(248	)		(230	)
Equity income of affiliates		—			—			3			1

Income from continuing operations		124			130			290			301
Income (loss) from discontinued operations (Note 13)		2			(1	)		(30	)		(1	)
Cumulative effect of a change in accounting principle (Note 15)		—			—			—			(47	)

Net income	$	126		$	129		$	260		$	253

Income per common share (Note 10)
Basic and diluted:
Income from continuing operations	$	0.28		$	0.29		$	0.65		$	0.68
Loss from discontinued operations		—			—			(0.07	)		—
Cumulative effect of a change in accounting principle		—			—			—			(0.11	)

Net income	$	0.28		$	0.29		$	0.58		$	0.57

Basic weighted-average common shares outstanding		446			443			446			443

Diluted weighted-average common shares outstanding		449			447			449			447

Cash dividends declared per common share	$	0.10		$	0.075		$	0.30		$	0.20

The accompanying notes are an integral part of the condensed consolidated financial statements.

NEWMONT MINING CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS


	At September 30, 2005		At December 31, 2004
	(unaudited, in millions)
ASSETS
Cash and cash equivalents	$	1,095	$	781
Marketable securities and other short-term investments (Note 3)		952		943
Trade receivables		100		77
Accounts receivable		178		130
Inventories (Note 4)		342		249
Stockpiles and ore on leach pads (Note 5)		246		230
Other current assets		223		288

Current assets		3,136		2,698
Property, plant and mine development, net		5,527		5,165
Investments (Note 3)		795		386
Long-term stockpiles and ore on leach pads (Note 5)		575		525
Deferred income tax assets		633		492
Other long-term assets		297		265
Goodwill		2,992		2,994
Assets of operations held for sale (Note 13)		—		251

Total assets	$	13,955	$	12,776

LIABILITIES
Current portion of long-term debt (Note 6)	$	217	$	286
Accounts payable		237		224
Employee-related benefits (Note 7)		135		130
Other current liabilities and deferred revenue		651		446

Current liabilities		1,240		1,086
Long-term debt, less current portion (Note 6)		1,790		1,316
Reclamation and remediation liabilities (Note 8)		415		421
Employee-related benefits (Note 7)		246		245
Deferred income tax liabilities		519		460
Other long-term liabilities and deferred revenue		481		489
Liabilities of operations held for sale (Note 13)		—		46

Total liabilities		4,691		4,063

Commitments and contingencies (Note 19)
Minority interest in subsidiaries		918		775

STOCKHOLDERS’ EQUITY
Common stock		664		656
Additional paid-in capital		6,546		6,524
Accumulated other comprehensive income		399		147
Retained earnings		737		611

Total stockholders’ equity		8,346		7,938

Total liabilities and stockholders’ equity	$	13,955	$	12,776

The accompanying notes are an integral part of the condensed consolidated financial statements.

NEWMONT MINING CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


	Nine Months Ended September 30,
	2005			2004
	(unaudited, in millions)
Operating activities:
Net income	$	260		$	253
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization		482			504
Revenue from prepaid forward sales obligation		(48	)		—
Loss from discontinued operations		30			1
Accretion of accumulated reclamation obligations		20			19
Amortization of deferred stripping costs, net		(50	)		8
Deferred income taxes		(35	)		58
Minority interest expense		248			230
Write-down of inventories, stockpiles and ore on leach pads		12			11
Write-down of long-lived assets		2			26
(Gain) loss on investments, net		(27	)		39
Cumulative effect of change in accounting principle, net		—			47
Gain on asset sales, net		(36	)		(29	)
Hedge loss (gain), net		84			(38	)
Other operating adjustments		1			18
Decrease (increase) in operating assets:
Trade and accounts receivable		25			(18	)
Inventories, stockpiles and ore on leach pads		(161	)		10
Other assets		(3	)		(13	)
Decrease in operating liabilities:
Accounts payable and other accrued liabilities		(24	)		(129	)
Reclamation liabilities		(24	)		(33	)

Net cash provided from continuing operations		756			964
Net cash provided from discontinued operations		5			8

Net cash from operations		761			972

Investing activities:
Additions to property, plant and mine development		(890	)		(497	)
Additions to property, plant and mine development of discontinued operations		(21	)		(23	)
Investments in marketable debt and equity securities		(2,530	)		(1,340	)
Proceeds from sale of marketable debt and equity securities		2,562			680
Proceeds from sale of discontinued operations		142			—
Proceeds from sale of assets		61			23
Cash recorded upon consolidation of Batu Hijau		—			82
Other investing adjustments		1			2

Net cash used in investing activities		(675	)		(1,073	)

Financing activities:
Proceeds from debt, net		583			38
Repayment of debt		(142	)		(141	)
Dividends paid to common stockholders		(134	)		(89	)
Dividends paid to minority interests		(85	)		(94	)
Common stock issued for compensation plans		17			33
Change in restricted cash and other		(8	)		17

Net cash provided by (used in) financing activities		231			(236	)

Effect of exchange rate changes on cash		(3	)		(3	)

Net change in cash and cash equivalents		314			(340	)
Cash and cash equivalents at beginning of period		781			1,130

Cash and cash equivalents at end of period	$	1,095		$	790

The accompanying notes are an integral part of the condensed consolidated financial statements.

NEWMONT MINING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(dollars in millions, except per share, per ounce and per pound amounts)

(1)

BASIS OF PRESENTATION

The following interim Condensed Consolidated Financial Statements of Newmont Mining Corporation and its subsidiaries (collectively, “Newmont” or the “Company”) are unaudited. In the opinion of management, all adjustments necessary for a fair presentation of these interim statements have been included. The results reported in these interim Condensed Consolidated Financial Statements are not necessarily indicative of the results that may be reported for the entire year. These interim Condensed Consolidated Financial Statements should be read in conjunction with Newmont’s Consolidated Financial Statements included in its Annual Report on Form 10-K for the year ended December 31, 2004, filed March 15, 2005.

References to “A$” refer to Australian currency, “CDN$” to Canadian currency, “IDR” to Indonesian currency and “$” to United States currency.

Certain amounts for the three and nine months ended September 30, 2004 and at December 31, 2004 have been reclassified to conform to the 2005 presentation. The most significant reclassifications were as follows:

Discontinued Operations in the Condensed Consolidated Statements of Income, Balance Sheets and Cash Flows

The Company has reclassified the balance sheet amounts and the income statement results for the Golden Grove copper-zinc operation from the historical presentation to assets and liabilities of operations held for sale on the Condensed Consolidated Balance Sheets and to discontinued operations in the Condensed Consolidated Statements of Income for all periods presented. The Condensed Consolidated Statements of Cash Flows have been reclassified for assets held for sale and discontinued operations for all periods presented.

Auction Rate Securities in the Condensed Consolidated Statements of Cash Flows

For the nine months ended September 30, 2004, the Company reclassified auction rate securities having a stated or contractual maturity date for the underlying security in excess of 90 days from cash equivalents to Net cash used in investing activities in the Statements of Condensed Consolidated Cash Flows. The reflection of purchases and sales of these securities decreased Net cash used in investing activities and reduced Cash and cash equivalents by $443. Cash and cash equivalents decreased by $183 and $626 at the beginning and end of the nine month period ended September 30, 2004, respectively.

(2)

RECENT ACCOUNTING PRONOUNCEMENTS

Deferred Stripping Costs

At some of the Company’s mining operations, deferred stripping costs are charged to Costs applicable to sales as gold or copper is produced and sold using the units of production method based on estimated recoverable quantities of proven and probable gold or copper reserves, using a stripping ratio calculated as the ratio of total tons to be moved to total proven and probable ore reserves, which results in the recognition of the costs of waste removal activities over the life of the mine as gold or copper is produced. The application of the deferred stripping accounting method generally results in an asset (deferred stripping costs), although a liability (advanced stripping costs) will arise if the actual stripping ratio incurred to date is less than the expected stripping ratio over the life of the mine. The Advanced stripping costs primarily pertain to the Batu Hijau operation.

Movements in the net deferred stripping cost balance were as follows:


	Nine Months Ended September 30,
	2005			2004
Opening balance	$	20		$	90
Consolidation of Batu Hijau		—			(67	)
Disposition of Ovacik		(4	)		—
Additions		127			102
Amortization		(78	)		(110	)

Closing balance	$	65		$	15

NEWMONT MINING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Continued

(dollars in millions, except per share, per ounce and per pound amounts)

The deferred and advanced stripping cost balances are presented in the balance sheet in other assets or other liabilities as follows:


	At September 30, 2005		At December 31, 2004
Other Assets:
Current	$	53	$	45
Long-term		116		80

		169		125

Other Liabilities:
Current	$	29	$	2
Long-term		75		103

		104		105

Deferred stripping, net	$	65	$	20

In March 2005, the Financial Accounting Standards Board (“FASB”) ratified Emerging Issues Task Force (“EITF”) Issue No. 04-06, “Accounting for Stripping Costs Incurred during Production in the Mining Industry.” EITF Issue No. 04-06 addresses the accounting for stripping costs incurred during the production phase of a mine and refers to these costs as variable production costs that should be included as a component of inventory to be recognized in costs applicable to sales in the same period as the revenue from the sale of inventory. As a result, capitalization of post-production stripping costs is appropriate only to the extent product inventory exists at the end of a reporting period. The guidance in EITF Issue No. 04-06 is effective for the first reporting period in fiscal years beginning after December 15, 2005, with early adoption permitted. The guidance requires application through recognition of a cumulative effect adjustment to opening retained earnings in the period of adoption, with no charge to current earnings for prior periods. The most significant expected impacts of adoption are the elimination of the deferred and advanced stripping costs on Newmont’s balance sheet and the recognition of future post-production stripping costs as a component of inventory to be recognized in costs applicable to sales in the same period as the revenue from the sale of inventory, or in the case of inventory on hand at the end of a period, from impairment charges where the carrying value of inventory on hand exceeds the net realizable value. The Company will adopt this new accounting rule as of January 1, 2006. A cumulative effect of an accounting change reduction to opening retained earnings of between $60 and $100 (net of tax) is currently anticipated. Adoption of the new guidance will have no impact on the Company’s cash position.

Stock Based Compensation

In December 2004, the FASB issued SFAS No. 123R, “Share-Based Payment”, which revised SFAS No. 123, “Accounting for Stock-Based Compensation” and superseded Accounting Principles Board (“APB”) Opinion 25, “Accounting for Stock Issued to Employees” and its related implementation guidance. SFAS No. 123R requires measurement and recording in the financial statements of the costs of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award, recognized over the period during which an employee is required to provide services in exchange for such award. Newmont will adopt the provisions of SFAS No. 123R on January 1, 2006, using the modified prospective method. Accordingly, compensation expense will be recognized for all newly granted awards and awards modified, repurchased, or cancelled after January 1, 2006. Compensation cost for the unvested portion of awards that are outstanding, as of January 1, 2006, will be recognized ratably over the remaining vesting period. The compensation cost for the unvested portion of awards will be based on the fair value at date of grant as utilized in the SFAS No. 123 pro forma disclosure below. The actual effect on net income and earnings per share in future periods will vary depending upon the number and fair value of options granted in future years compared to prior years.

NEWMONT MINING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Continued

(dollars in millions, except per share, per ounce and per pound amounts)

The Company currently applies the intrinsic value method in accordance with APB Opinion 25, “Accounting for Stock Issued to Employees,” and related interpretations in accounting for stock options. Accordingly, because stock option exercise prices equal the market value on the date of grant, no compensation cost is currently recognized for stock option grants. Had compensation cost for the options been recognized based on market value at grant dates as prescribed by SFAS No. 123R, the Company’s net income and net income per common share would have been the pro forma amounts indicated below:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2005			2004			2005			2004
Net income, as reported	$	126		$	129		$	260		$	253
Less: Compensation cost determined under the fair value method, net of tax		(5	)		(3	)		(14	)		(9	)

Pro forma net income	$	121		$	126		$	246		$	244

Net income per common share, basic and diluted:
As reported	$	0.28		$	0.29		$	0.58		$	0.57
Pro forma net income	$	0.27		$	0.28		$	0.55		$	0.55

The Company recognized $4 and $4 of non-cash compensation expense during the three months ended September 30, 2005 and 2004, respectively, and $12 and $11 during the nine months ended September 30, 2005 and 2004, respectively, related to deferred and restricted stock awards granted.

(3)

INVESTMENTS


	At September 30, 2005
	Cost/Equity Basis		Unrealized				Fair/Equity Value
	Cost/Equity Basis		Gain		Loss		Fair/Equity Value
Current:
Marketable Debt Securities:
Auction rate securities	$	824	$	—	$	—	$	824

Marketable Equity Securities:
Oxiana Limited		61		22		—		83
Other		15		16		—		31

		76		38		—		114

Other investments, at cost		14		—		—		14

	$	914	$	38	$	—	$	952

Long-term:
Marketable Equity Securities:
Canadian Oil Sands Trust	$	224	$	434	$	—	$	658
Gabriel Resources, Ltd.		22		15		—		37
Shore Gold, Inc.		42		11		—		53
Other		14		5		—		19

		302		465		—		767

Investment in Affiliates:
European Gold Refineries		15		—		—		15
AGR Matthey Joint Venture		13		—		—		13

		28		—		—		28

	$	330	$	465	$	—	$	795

NEWMONT MINING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Continued

(dollars in millions, except per share, per ounce and per pound amounts)


	At December 31, 2004
	Cost/Equity Basis		Unrealized				Fair/Equity Value
	Cost/Equity Basis		Gain		Loss		Fair/Equity Value
Current:
Marketable Debt Securities:
Auction rate securities	$	784	$	—	$	—	$	784

Marketable Equity Securities:
Kinross Gold Corporation		80		21		—		101
Other		25		20		—		45

		105		41		—		146

Other investments, at cost		13		—		—		13

	$	902	$	41	$	—	$	943

Long-term:
Marketable Equity Securities:
Canadian Oil Sands Trust	$	225	$	112	$	—	$	337
Gabriel Resources, Ltd.		17		2		—		19
Shore Gold, Inc.		—		—		—		—
Other		4		1		—		5

		246		115		—		361

Investment in Affiliates:
European Gold Refineries		13		—		—		13
AGR Matthey Joint Venture		12		—		—		12

		25		—		—		25

	$	271	$	115	$	—	$	386

(4)

INVENTORIES


	At September 30, 2005		At December 31, 2004
In-process	$	94	$	61
Concentrate		11		3
Precious metals		7		6
Materials, supplies and other		230		179

	$	342	$	249

(5)

STOCKPILES AND ORE ON LEACH PADS


	At September 30, 2005		At December 31, 2004
Current:
Stockpiles	$	108	$	110
Ore on leach pads		138		120

	$	246	$	230

Long-term:
Stockpiles	$	402	$	394
Ore on leach pads		173		131

	$	575	$	525

NEWMONT MINING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Continued

(dollars in millions, except per share, per ounce and per pound amounts)

(6)

DEBT


	At September 30, 2005				At December 31, 2004
	Current		Non-Current		Current		Non-Current
Sale-leaseback of refractory ore treatment plant	$	19	$	256	$	13	$	274
5 7/8% notes, net of discount		—		597		—		—
8 3/8% debentures, net of discount		—		—		50		—
8 5/8% debentures, net of discount		—		219		—		224
Newmont Australia 7 5/8% guaranteed notes, net of premium		—		120		—		120
Newmont Australia 7 1/2% guaranteed notes, net of premium		—		—		20		—
Prepaid forward sales obligation		48		48		48		97
PTNNT project financing facility		87		522		87		566
PTNNT partner loan		48		—		53		—
Project financings, capital leases and other		15		28		15		35

	$	217	$	1,790	$	286	$	1,316

Scheduled minimum long-term debt repayments as of September 30, 2005 are $98 for the remainder of 2005, $169 in 2006, $165 in 2007, $234 in 2008, $116 in 2009 and $1,225 thereafter.

During March 2005, Newmont issued uncollateralized notes with a principal amount of $600 due April 2035 bearing an interest rate of 5 7/8%. Interest on the notes is paid semi-annually in April and October.

During June 2005, 161,111 ounces were physically delivered in connection with the Prepaid forward sales obligation. The effect was a non-cash reduction in debt of $48.

Effective July 28, 2005, the Company renegotiated the terms of its uncollateralized $1,250 revolving facility extending the maturity date one year to July 2010.

(7)

EMPLOYEE PENSION AND OTHER BENEFIT PLANS


	Three Months Ended September 30,						Nine Months Ended September 30,
	2005			2004			2005			2004
Pension benefits:
Service cost	$	3		$	3		$	10		$	8
Interest cost		5			4			14			13
Expected return on plan assets		(4	)		(3	)		(12	)		(10	)
Amortization of prior service cost		—			—			1			1
Amortization of loss		2			1			5			3

Net periodic cost	$	6		$	5		$	18		$	15


	Three Months Ended September 30,				Nine Months Ended September 30,
	2005		2004		2005		2004
Other benefits:
Service cost	$	2	$	1	$	4	$	3
Interest cost		1		1		4		3
Amortization of prior service cost		—		—		—		(1	)

Net periodic cost	$	3	$	2	$	8	$	5

NEWMONT MINING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Continued

(dollars in millions, except per share, per ounce and per pound amounts)

(8)

RECLAMATION AND REMEDIATION (ASSET RETIREMENT OBLIGATIONS)

At September 30, 2005 and December 31, 2004, $405 and $399, respectively, were accrued for reclamation obligations relating to mineral properties in accordance with SFAS No. 143, “Accounting for Asset Retirement Obligations.” In addition, the Company is involved in several matters concerning environmental obligations associated with former, primarily historic, mining activities. Generally, these matters concern developing and implementing remediation plans at the various sites involved. At September 30, 2005 and December 31, 2004, $69 and $75, respectively, were accrued for such obligations. These amounts are also included in Reclamation and remediation liabilities.

The following is a reconciliation of the total liability for asset retirement obligations:


	Nine Months Ended September 30,
	2005			2004
Balance at beginning of period	$	474		$	410
Consolidation of Batu Hijau		—			47
Disposition of liability		(8	)		—
Additions and changes in estimates		11			3
Liabilities settled		(23	)		(32	)
Accretion expense		20			19

Balance at end of period	$	474		$	447

The current portions of Reclamation and remediation liabilities of $59 and $53 at September 30, 2005 and December 31, 2004, respectively, are included in Other current liabilities and deferred revenue.

(9)

SALES CONTRACTS, COMMODITY AND DERIVATIVE INSTRUMENTS

Newmont generally avoids gold hedging. Newmont’s philosophy is to provide shareholders with leverage to gold prices by selling its production at market prices. Newmont has, on a limited basis, entered into derivative contracts to protect the selling price for certain anticipated gold production and to manage risks associated with sales contracts, commodities, interest rates and foreign currency. Newmont is not required to place collateral with respect to commodity instruments and there are no margin calls associated with such contracts.

For the three months ended September 30, 2005 and 2004, losses of $1 and $1, respectively, were included in Other income (expense), net for the ineffective portion of derivative instruments designated as cash flow hedges. For the nine months ended September 30, 2005 and 2004, gains of $2 and $1, respectively, were included in Other income (expense), net for the ineffective portion of derivative instruments designated as cash flow hedges. The amount anticipated to be reclassified from Accumulated other comprehensive income to income for derivative instruments during the next 12 months is a loss of approximately $24. The maximum period over which hedged forecasted transactions are expected to occur is 6.5 years.

NEWMONT MINING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Continued

(dollars in millions, except per share, per ounce and per pound amounts)

Newmont had the following contracts at September 30, 2005:


	Expected Maturity Date or Transaction Date											Fair Value
	2005		2006		2007		2008	2009	Thereafter	Total/ Average		At September 30, 2005			At December 31, 2004
Gold Put Option Contracts ($ denominated):
Ounces (thousands)		53		100		20	—	—	—		173	$	(5	)	$	(9	)
Average price	$	292	$	338	$	397	—	—	—	$	330
Silver Forward Contracts ($ denominated):
Ounces (thousands)		300		50		—	—	—	—		350	$	(1	)	$	(1	)
Average price	$	6.02	$	6.50		—	—	—	—	$	6.09
Copper Collar Contracts ($ denominated):
Pounds (millions)		131		406		84	—	—	—		621	$	(176	)⁽¹⁾	$	(61	)⁽²⁾
Average cap price	$	1.30	$	1.36	$	1.41	—	—	—	$	1.35
Average floor price	$	1.10	$	1.10	$	1.10	—	—	—	$	1.10
$/IDR Forward Purchase Contracts:
$ (millions)		21		54		—	—	—	—		75	$	(5	)	$	—
Average rate (IDR/$)		9,418		10,307		—	—	—	—		10,063
Australian Dollar Zero-Cost Collar Contracts:
$ (millions)	$	70	$	135		—	—	—	—	$	205	$	2		$	13
Average cap price ($ per A$1)	$	0.80	$	0.80		—	—	—	—	$	0.80
Average floor price ($ per A$1)	$	0.55	$	0.55		—	—	—	—	$	0.55

⁽¹⁾	The fair value does not include amounts payable ($22) on derivative contracts that have been closed out in September 2005 with the net settlement due in October 2005.

⁽²⁾	The fair value does not include amounts payable ($7) on derivative contracts that had been closed out in December 2004 with the net settlement due and paid in January 2005.

Provisional Copper and Gold Sales

For the three and nine month periods ended September 30, 2005 and 2004, Batu Hijau recorded the revenues and price adjustments as follows:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2005			2004			2005			2004
Copper
Revenue	$	326		$	256		$	443		$	329
Average price adjustment		10.2	%		(3.0	)%		10.4	%		15.5	%
Gold
Revenue	$	21		$	8		$	21		$	20
Average price adjustment		(1.1	)%		(1.0	)%		1.3	%		0.9	%

Price-Capped Forward Sales Contracts

In 2001, Newmont entered into transactions that closed out certain call options. The options were replaced with a series of forward sales contracts requiring physical delivery of the same quantity of gold over slightly extended future periods. Under the terms of the contracts, Newmont will realize the lower of the spot price on the delivery date or the capped price ranging from $350 per ounce in 2005 to $392 per ounce in 2011. The initial fair value of the forward sales contracts of $54 was recorded as deferred revenue and will be included in revenues as delivery occurs. Newmont delivered 350,000 ounces in the nine months ended September 30, 2005 at the capped price of $350 per ounce and recognized deferred revenue of $13 per ounce. As of September 30, 2005, the current portion of $2 has been reclassified to Other current liabilities and deferred revenue. The forward sales contracts are accounted for as normal sales contracts under SFAS No. 133 “Accounting for Derivative Instruments and Hedging Activities” and SFAS No. 138 “Accounting for Certain Derivative Instruments and Certain Hedging Activities-an Amendment to SFAS No. 133.”

NEWMONT MINING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Continued

(dollars in millions, except per share, per ounce and per pound amounts)

Newmont had the following price-capped forward sales contracts outstanding at September 30, 2005:


	Expected Maturity Date or Transaction Date
Price-capped forward sales contracts:	2005		2006		2007		2008		2009		Thereafter		Total/ Average
($ denominated)
Ounces (thousands)		150		—		—		1,000		600		250		2,000
Average price	$	350	$	—	$	—	$	384	$	381	$	392	$	382

Interest Rate Swap Contracts

In 2001, Newmont entered into contracts to hedge the interest rate risk exposure on a portion of its $275 8 5/8% notes and its $200 8 3/8% debentures. For the three months ended September 30, 2005 and 2004, these transactions resulted in a reduction in interest expense of $1 and $2, respectively. For the nine months ended September 30, 2005 and 2004, these transactions resulted in a reduction in interest expense of $3 and $4, respectively. The fair value of the interest rate swaps was $4 at September 30, 2005 and $9 at December 31, 2004.

(10)

INCOME PER COMMON SHARE

The weighted average number of common shares outstanding used to compute basic and diluted net income per common share was as follows:


	Three Months Ended September 30,		Nine Months Ended September 30,
	2005	2004	2005	2004
Basic	446	443	446	443
Effect of employee stock-based awards	3	4	3	4

Diluted	449	447	449	447

Options to purchase 1.6 million and 1.7 million shares of common stock at average exercise prices of $53.34 and $53.73 were outstanding as of September 30, 2005 and 2004, respectively, but were not included in the computation of diluted weighted average number of common shares because the option price was greater than the average market price of the common shares.

(11)

COMPREHENSIVE INCOME


	Three Months Ended September 30,						Nine Months Ended September 30,
	2005			2004			2005			2004
Net income	$	126		$	129		$	260		$	253
Other comprehensive income (loss), net of tax:
Unrealized gain on marketable equity securities		209			48			279			55
Foreign currency translation adjustments		19			21			11			13
Changes in fair value of cash flow hedge instruments		(24	)		(4	)		(38	)		(6	)

Comprehensive income	$	330		$	194		$	512		$	315

(12)

OTHER INCOME, NET


	Three Months Ended September 30,					Nine Months Ended September 30,
	2005		2004			2005		2004
Royalty and dividend income	$	18	$	20		$	57	$	48
Interest income		17		6			41		15
Gain on sale of other assets, net		—		22			36		29
Gain (loss) on investments, net		21		—			27		(39	)
Foreign currency exchange gains (losses)		8		3			10		(5	)
Other		2		(4	)		6		3

	$	66	$	47		$	177	$	51

NEWMONT MINING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Continued

(dollars in millions, except per share, per ounce and per pound amounts)

On March 31, 2005, the Minera El Bermejal S. de R.L. de C.V. joint venture, 44% owned by Newmont and 56% owned by Industrias Penoles S.A. de C.V., completed the sale of its interest in the Mezcala Gold Deposit for cash proceeds of $70 (Newmont’s share $31). The Company recorded a pre-tax gain of $31.

The gain on investments during 2005 was primarily attributable to the sale of Newmont’s investment in Kinross Gold Corporation (“Kinross”) which resulted in a pre-tax gain of $20. The loss on investments during 2004 was attributable to a pre-tax $39 impairment of Newmont’s investment in Kinross for an other-than-temporary decline in value in accordance with SFAS No. 115 “Accounting for Certain Investments in Debt and Equity Securities.”

(13)

DISCONTINUED OPERATIONS

During June 2005, Newmont announced the pending sale of its Golden Grove copper-zinc operation in Western Australia to Oxiana Limited (Oxiana) for proceeds including cash of A$190 and 81.5 million Oxiana shares. The sale was completed on July 26, 2005.

Newmont accounted for the imminent disposition in accordance with SFAS No. 144 “Accounting for the Impairment or Disposal of Long-Lived Assets”. At June 30, 2005, the carrying value of Golden Grove was reduced to its estimated fair value based upon the pending sale. A pre-tax impairment loss of $39 was recognized for the six months ended June 30, 2005. Upon the sale, a $6 million pre-tax gain (due to increase in Oxiana share price at July 26, 2005) was recognized in the three-months ended September 30, 2005.

The Company has reclassified the balance sheet amounts and the income statement results from the historical presentation to assets and liabilities of operations held for sale on the Condensed Consolidated Balance Sheets and to gain (loss) from discontinued operations in the Condensed Consolidated Statements of Income for all periods presented. The Condensed Consolidated Statements of Cash Flows have been reclassified for assets held for sale and discontinued operations for all periods presented.

The following table details selected financial information for Golden Grove included in the gain (loss) from discontinued operations in the Condensed Consolidated Statements of Income:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2005			2004			2005			2004
Sales - base metals, net	$	1		$	19		$	38		$	62

Income (loss) from operations	$	1		$	(3	)	$	(4	)	$	(5	)
Gain (loss) on impairment/sale		6			—			(33	)		—

Pre-tax income (loss)		7			(3	)		(37	)		(5	)
Income tax (expense) benefit		(5	)		2			7			4

Gain (loss) from discontinued operations	$	2		$	(1	)	$	(30	)	$	(1	)

NEWMONT MINING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Continued

(dollars in millions, except per share, per ounce and per pound amounts)

The major classes of assets and liabilities of operations held for sale in the Condensed Consolidated Balance Sheets are as follows:


	At September 30, 2005		At December 31, 2004
Assets:
Accounts receivable	$	—	$	3
Inventories		—		15
Stockpiles and ore on leach pads		—		2
Property, plant and mine development		—		196
Goodwill		—		32
Other assets		—		3

Total assets of operations held for sale	$	—	$	251

Liabilities:
Accounts payable	$	—	$	7
Reclamation and remediation		—		11
Other liabilities		—		28

Total liabilities of operations held for sale	$	—	$	46

(14)

OVACIK

On March 1, 2005, Newmont sold the Ovacik mine, located in western Turkey, to a subsidiary of Koza Davetiye, a listed Turkish conglomerate. Consideration for the mine included $20 paid at closing and various contingent payments that could total up to an additional $24.5 if all conditions precedent are met. Contingent payments received and any associated gains will be recognized as and when received.

During the nine months ended September 30, 2004, Newmont recorded a pre-tax $16 Write-down of long-lived assets related to the Ovacik mine.

(15)

CONSOLIDATION OF BATU HIJAU

Upon consolidation of Batu Hijau, effective January 1, 2004, in accordance with FASB Interpretation No. 46R, certain adjustments were recorded to the opening balance sheet of Batu Hijau to conform to Newmont’s accounting policies. These adjustments were recorded to change from units-of-production depreciation of processing plant and mining facilities to straight-line depreciation of such facilities and to change from allocating costs to stockpile inventories based on mining costs per ton to allocating costs based on recoverable pounds of copper equivalent contained in the various categories of stockpiles. The impact of these adjustments were charges of $15 and $32, respectively, which have been recorded in Cumulative effect of a change in accounting principle in the 2004 Condensed Consolidated Statement of Income, net of income tax expense and minority interest.

(16)

SUPPLEMENTAL CASH FLOW INFORMATION


	Nine Months Ended September 30,
	2005		2004
Non-cash extinguishment of infrastructure bonds	$	—	$	124
Non-cash settlement of prepaid forward sales obligation	$	48	$	—
Oxiana Limited shares received from sale of Golden Grove	$	61	$	—
Interest paid, net of amounts capitalized	$	44	$	63
Income taxes paid	$	214	$	215

NEWMONT MINING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Continued

(dollars in millions, except per share, per ounce and per pound amounts)

(17)

SEGMENT INFORMATION

Financial information relating to Newmont’s segments is as follows:


	Three Months Ended September 30, 2005
	Nevada			Other North America			Yanacocha		Other South America		Australia/ New Zealand			Batu Hijau		Other Indonesia
Sales, net:
Gold	$	256		$	32		$	338	$	13	$	167		$	126	$	—
Base Metals	$	—		$	—		$	—	$	—	$	—		$	231	$	—
Cost applicable to sales:
Gold	$	212		$	23		$	111	$	5	$	121		$	38	$	—
Base Metals	$	—		$	—		$	—	$	—	$	—		$	86	$	—
Depreciation, depletion and amortization:
Gold	$	32		$	7		$	50	$	1	$	29		$	11	$	—
Base Metals	$	—		$	—		$	—	$	—	$	—		$	20	$	—
Other	$	—		$	—		$	—	$	—	$	—		$	—	$	—
Exploration	$	6		$	1		$	2	$	—	$	5		$	—	$	—
Advanced projects, research and development	$	—		$	1		$	2	$	—	$	—		$	—	$	1
Interest expense, net	$	—		$	—		$	—	$	—	$	—		$	11	$	—
Pre-tax income (loss) before minority interest and equity income of affiliates	$	7		$	(1	)	$	172	$	6	$	14		$	191	$	(18	)
Amortization of deferred (advanced) stripping, net	$	(15	)	$	(1	)	$	—	$	—	$	(3	)	$	15	$	—
Capital expenditures	$	118		$	3		$	62	$	5	$	27		$	24	$	—


	Central Asia		Africa			Exploration			Merchant Banking		Corporate and Other			Consolidated
Sales, net:
Gold	$	13	$	—		$	—		$	—	$	(12	)	$	933
Base Metals	$	—	$	—		$	—		$	—	$	—		$	231
Cost applicable to sales:
Gold	$	6	$	—		$	—		$	—	$	—		$	516
Base Metals	$	—	$	—		$	—		$		$	—		$	86
Depreciation, depletion and amortization:
Gold	$	2	$	—		$	—		$	—	$	—		$	132
Base Metals	$	—	$	—		$	—		$	—	$	—		$	20
Other	$	—	$	—		$	—		$	3	$	5		$	8
Exploration	$	—	$	3		$	24		$	—	$	—		$	41
Advanced projects, research and development	$	—	$	5		$	—		$	3	$	6		$	18
Interest expense, net	$	—	$	—		$	—		$	—	$	13		$	24
Pre-tax income (loss) before minority interest and equity income of affiliates	$	4	$	(8	)	$	(23	)	$	33	$	(44	)	$	333
Amortization of deferred (advanced) stripping, net	$	—	$	—		$	—		$	—	$	—		$	(4	)
Capital expenditures	$	2	$	94		$	—		$	1	$	20		$	356

NEWMONT MINING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Continued

(dollars in millions, except per share, per ounce and per pound amounts)


	Three Months Ended September 30, 2004
	Nevada			Other North America			Yanacocha		Other South America			Australia/ New Zealand		Batu Hijau		Other Indonesia
Sales, net:
Gold	$	238		$	23		$	310	$	2		$	187	$	94	$	9
Base Metals	$	—		$	—		$	—	$	—		$	—	$	247	$	—
Cost applicable to sales:
Gold	$	170		$	19		$	113	$	1		$	127	$	29	$	4
Base Metals	$	—		$	—		$	—	$	—		$	—	$	90	$	—
Depreciation, depletion and amortization:
Gold	$	29		$	5		$	49	$	—		$	29	$	8	$	—
Base Metals	$	—		$	—		$	—	$	—		$	—	$	22	$	—
Other	$	—		$	—		$	—	$	—		$	1	$	—	$	—
Exploration	$	2		$	—		$	2	$	—		$	5	$	—	$	—
Advanced projects, research and development	$	6		$	—		$	6	$	—		$	—	$	—	$	3
Interest expense, net	$	—		$	—		$	3	$	—		$	—	$	10	$	—
Pre-tax income (loss) before minority interest and equity income of affiliates	$	29		$	(1	)	$	130	$	(2	)	$	4	$	183	$	(2	)
Amortization of deferred (advanced) stripping, net	$	(7	)	$	—		$	—	$	—		$	12	$	21	$	—
Capital expenditures	$	49		$	5		$	42	$	1		$	14	$	4	$	—


	Central Asia			Africa			Exploration			Merchant Banking		Corporate and Other			Consolidated
Sales, net:
Gold	$	32		$	—		$	—		$	—	$	2		$	897
Base Metals	$	—		$	—		$	—		$	—	$	—		$	247
Cost applicable to sales:
Gold	$	15		$	—		$	—		$	—	$	—		$	478
Base Metals	$	—		$	—		$	—		$	—	$	1		$	91
Depreciation, depletion and amortization:
Gold	$	8		$	—		$	—		$	—	$	—		$	128
Base Metals	$	—		$	—		$	—		$	—	$	—		$	22
Other	$	—		$	—		$	—		$	6	$	5		$	12
Exploration	$	—		$	—		$	19		$	—	$	—		$	28
Advanced projects, research and development	$	1		$	4		$	—		$	2	$	3		$	25
Interest expense, net	$	—		$	—		$	—		$	—	$	14		$	27
Pre-tax income (loss) before minority interest and equity income of affiliates	$	7		$	(4	)	$	(21	)	$	23	$	(32	)	$	314
Amortization of deferred (advanced) stripping, net	$	(1	)	$	—		$	—		$	—	$	—		$	25
Capital expenditures	$	3		$	32		$	—		$	—	$	11		$	161

NEWMONT MINING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Continued

(dollars in millions, except per share, per ounce and per pound amounts)


	Nine Months Ended September 30, 2005
	Nevada			Other North America			Yanacocha		Other South America		Australia/ New Zealand		Batu Hijau			Other Indonesia
Sales, net:
Gold	$	762		$	99		$	976	$	20	$	523	$	232		$	—
Base Metals	$	—		$	—		$	—	$	—	$	—	$	504		$	—
Cost applicable to sales:
Gold	$	585		$	71		$	334	$	9	$	383	$	80		$	—
Base Metals	$	—		$	—		$	—	$	—	$	—	$	226		$	—
Depreciation, depletion and amortization:
Gold	$	92		$	21		$	148	$	2	$	87	$	25		$	—
Base Metals	$	—		$	—		$	—	$	—	$	—	$	67		$	—
Other	$	—		$	—		$	—	$	—	$	2	$	—		$	—
Exploration	$	14		$	6		$	5	$	1	$	15	$	—		$	—
Advanced projects, research and development	$	—		$	3		$	2	$	—	$	—	$	—		$	4
Interest expense, net	$	—		$	—		$	—	$	—	$	—	$	32		$	—
Pre-tax income (loss) before minority interest and equity income of affiliates	$	64		$	(2	)	$	485	$	6	$	40	$	309		$	(37	)
Amortization of deferred (advanced) stripping, net	$	(48	)	$	(2	)	$	—	$	—	$	1	$	(1	)	$	—
Capital expenditures	$	324		$	7		$	169	$	20	$	72	$	52		$	—
Total assets	$	1,961		$	98		$	1,421	$	54	$	1,063	$	2,311		$	93


	Central Asia		Africa			Exploration			Merchant Banking		Corporate and Other			Consolidated
Sales, net:
Gold	$	40	$	—		$	—		$	—	$	(33	)	$	2,619
Base Metals	$	—	$	—		$	—		$	—	$	—		$	504
Cost applicable to sales:
Gold	$	20	$	—		$	—		$	—	$	—		$	1,482
Base Metals	$	—	$	—		$	—		$	1	$	—		$	227
Depreciation, depletion and amortization:
Gold	$	7	$	—		$	—		$	—	$	—		$	382
Base Metals	$	—	$	—		$	—		$	—	$	—		$	67
Other	$	2	$	1		$	—		$	15	$	13		$	33
Exploration	$	—	$	6		$	60		$	—	$	—		$	107
Advanced projects, research and development	$	1	$	13		$	—		$	12	$	15		$	50
Interest expense, net	$	1	$	—		$	—		$	—	$	43		$	76
Pre-tax income (loss) before minority interest and equity income of affiliates	$	8	$	(21	)	$	(60	)	$	80	$	(151	)	$	721
Amortization of deferred (advanced) stripping, net	$	—	$	—		$	—		$	—	$	—		$	(50	)
Capital expenditures	$	3	$	206		$	—		$	3	$	34		$	890
Total assets	$	108	$	575		$	1,135		$	2,989	$	2,147		$	13,955

NEWMONT MINING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Continued

(dollars in millions, except per share, per ounce and per pound amounts)


	Nine Months Ended September 30, 2004
	Nevada			Other North America		Yanacocha		Other South America			Australia/ New Zealand		Batu Hijau			Other Indonesia
Sales, net:
Gold	$	736		$	88	$	882	$	8		$	572	$	209		$	30
Base Metals	$	—		$	—	$	—	$	—		$	—	$	588		$	—
Cost applicable to sales:
Gold	$	525		$	61	$	321	$	8		$	390	$	68		$	20
Base Metals	$	—		$	—	$	—	$	—		$	—	$	226		$	—
Depreciation, depletion and amortization:
Gold	$	96		$	17	$	151	$	2		$	95	$	20		$	3
Base Metals	$	—		$	—	$	—	$	—		$	—	$	65		$	—
Other	$	—		$	—	$	—	$	—		$	3	$	—		$	—
Exploration	$	10		$	—	$	3	$	—		$	11	$	—		$	—
Advanced projects, research and development	$	6		$	—	$	11	$	1		$	—	$	—		$	7
Interest expense, net	$	—		$	—	$	4	$	—		$	—	$	32		$	—
Pre-tax income (loss) before minority interest and equity income of affiliates	$	99		$	9	$	383	$	(6	)	$	42	$	388		$	(3	)
Cumulative effect of a change in accounting principle, net of tax	$	—		$	—	$	—	$	—		$	—	$	(84	)	$	—
Amortization of deferred (advanced) stripping, net	$	(47	)	$	—	$	—	$	—		$	9	$	48		$	—
Capital expenditures	$	117		$	9	$	176	$	1		$	67	$	30		$	—
Total assets from continuing operations	$	1,547		$	101	$	1,147	$	12		$	1,138	$	2,337		$	94


	Central Asia			Africa			Exploration			Merchant Banking			Corporate and Other			Consolidated
Sales, net:
Gold	$	112		$	—		$	—		$	—		$	7		$	2,644
Base Metals	$	—		$	—		$	—		$	—		$	—		$	588
Cost applicable to sales:
Gold	$	49		$	—		$	—		$	—		$	—		$	1,442
Base Metals	$	—		$	—		$	—		$	—		$	1		$	227
Depreciation, depletion and amortization:
Gold	$	24		$	—		$	—		$	—		$	—		$	408
Base Metals	$	—		$	—		$	—		$	—		$	—		$	65
Other	$	—		$	—		$	1		$	18		$	9		$	31
Exploration	$	1		$	—		$	51		$	—		$	—		$	76
Advanced projects, research and development	$	2		$	11		$	—		$	5		$	16		$	59
Interest expense, net	$	—		$	—		$	—		$	—		$	41		$	77
Pre-tax income (loss) before minority interest and equity income of affiliates	$	18		$	(15	)	$	(56	)	$	(5	)	$	(110	)	$	744
Cumulative effect of a change in accounting principle, net of tax	$	—		$	—		$	—		$	—		$	37		$	(47	)
Amortization of deferred (advanced) stripping, net	$	(2	)	$	—		$	—		$	—		$	—		$	8
Capital expenditures	$	16		$	52		$	—		$	4		$	25		$	497
Total assets from continuing operations	$	179		$	292		$	1,144		$	2,408		$	1,767		$	12,166
Assets held for sale																$	252

Total assets																$	12,418

NEWMONT MINING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Continued

(dollars in millions, except per share, per ounce and per pound amounts)

(18)

CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

Newmont USA, a 100 percent owned subsidiary of Newmont Mining Corporation, has fully and unconditionally guaranteed the 5 7/8% notes and the revolving credit facilities of Newmont Mining Corporation. The following condensed consolidating financial information is provided for Newmont USA, as guarantor, and for Newmont Mining Corporation, as issuer, as an alternative to providing separate financial statements for the guarantor. The accounts of Newmont Mining Corporation and Newmont USA are presented using the equity method of accounting for investments in subsidiaries.


	Three Months Ended September 30, 2005
Condensed Consolidating Statement of Income	Newmont Mining Corporation			Newmont USA			Other Subsidiaries			Eliminations			Newmont Mining Corporation Consolidated
Revenues
Sales - gold, net	$	—		$	779		$	154		$	—		$	933
Sales - base metals, net		—			231			—			—			231

		—			1,010			154			—			1,164

Costs and expenses
Costs applicable to sales (exclusive of depreciation, depletion and amortization shown separately below)
Gold		—			402			114						516
Base metals		—			86			—			—			86
Depreciation, depletion and amortization		—			130			30			—			160
Exploration		—			28			13			—			41
Advanced projects, research and development		—			9			9			—			18
General and administrative		—			30			2			—			32
Other		—			21			—			(1	)		20

		—			706			168			(1	)		873

Other income (expense)
Other income (expense), net		7			14			45			—			66
Interest income - intercompany		28			12			—			(40	)		—
Interest expense - intercompany		(2	)		—			(38	)		40			—
Interest expense, net		(10	)		(12	)		(2	)		—			(24	)

		23			14			5			—			42

Income from continuing operations before taxes, minority interest and equity income of affiliates		23			318			(9	)		1			333
Income tax (expense) benefit		(26	)		(68	)		—			—			(94	)
Minority interest in income of subsidiaries		—			(116	)		—			1			(115	)
Equity income (loss) of affiliates		129			—			27			(156	)		—

Income from continuing operations		126			134			18			(154	)		124
Income from discontinued operations		—			—			2			—			2

Net income	$	126		$	134		$	20		$	(154	)	$	126

NEWMONT MINING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Continued

(dollars in millions, except per share, per ounce and per pound amounts)


	Three Months Ended September 30, 2004
Condensed Consolidating Statement of Income	Newmont Mining Corporation			Newmont USA			Other Subsidiaries			Eliminations			Newmont Mining Corporation Consolidated
Revenues
Sales - gold, net	$	—		$	706		$	191		$	—		$	897
Sales - base metals, net		—			247			—			—			247

		—			953			191			—			1,144

Costs and expenses
Costs applicable to sales (exclusive of depreciation, depletion and amortization shown separately below)
Gold		—			351			131			(4	)		478
Base metals		—			91			—			—			91
Depreciation, depletion and amortization		—			122			40			—			162
Exploration		—			20			8			—			28
Advanced projects, research and development		—			15			10			—			25
General and administrative		—			19			—			3			22
Write-down of long-lived assets		—			4			6			—			10
Other		—			15			19			—			34

		—			637			214			(1	)		850

Other income (expense)
Other income (expense), net		4			18			25			—			47
Interest income - intercompany		28			57			1			(86	)		—
Interest expense - intercompany		(51	)		—			(35	)		86			—
Interest expense, net		(1	)		(23	)		(3	)		—			(27	)

		(20	)		52			(12	)		—			20

Income (loss) from continuing operations before taxes, minority interest and equity income of affiliates		(20	)		368			(35	)		1			314
Income tax expense		7			(129	)		28			—			(94	)
Minority interest in income of subsidiaries		—			(91	)		5			(4	)		(90	)
Equity income (loss) of affiliates		142			—			27			(169	)		—

Income from continuing operations		129			148			25			(172	)		130
Loss from discontinued operations		—			—			(1	)		—			(1	)

Net income (loss)	$	129		$	148		$	24		$	(172	)	$	129

NEWMONT MINING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Continued

(dollars in millions, except per share, per ounce and per pound amounts)


	Nine Months Ended September 30, 2005
Condensed Consolidating Statement of Income	Newmont Mining Corporation			Newmont USA			Other Subsidiaries			Eliminations			Newmont Mining Corporation Consolidated
Revenues
Sales - gold, net	$	—		$	2,126		$	493		$	—		$	2,619
Sales - base metals, net		—			504			—			—			504

		—			2,630			493			—			3,123

Costs and expenses
Costs applicable to sales (exclusive of depreciation, depletion and amortization shown separately below)
Gold		—			1,121			367			(6	)		1,482
Base metals		—			226			1			—			227
Depreciation, depletion and amortization		—			382			100			—			482
Exploration		—			72			35			—			107
Advanced projects, research and development		—			20			30			—			50
General and administrative		—			88			3			4			95
Write-down of long-lived assets		—			—			2			—			2
Other		—			49			9			—			58

		—			1,958			547			(2	)		2,503

Other income (expense)
Other income (expense), net		12			72			93			—			177
Interest income - intercompany		89			33			1			(123	)		—
Interest expense - intercompany		(6	)		—			(117	)		123			—
Interest expense, net		(21	)		(48	)		(7	)		—			(76	)

		74			57			(30	)		—			101

Income (loss) from continuing operations before taxes, minority interest and equity income of affiliates		74			729			(84	)		2			721
Income tax (expense) benefit		(19	)		(217	)		50			—			(186	)
Minority interest in income of subsidiaries		—			(251	)		2			1			(248	)
Equity income of affiliates		205			—			57			(259	)		3

Income from continuing operations		260			261			25			(256	)		290
Loss from discontinued operations		—			—			(30	)		—			(30	)

Net income (loss)	$	260		$	261		$	(5	)	$	(256	)	$	260

NEWMONT MINING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Continued

(dollars in millions, except per share, per ounce and per pound amounts)


Condensed Consolidating Statement of Income	Nine Months Ended September 30, 2004
Condensed Consolidating Statement of Income	Newmont Mining Corporation			Newmont USA			Other Subsidiaries			Eliminations			Newmont Mining Corporation Consolidated
Revenues
Sales- gold, net	$	—		$	2,059		$	585		$	—		$	2,644
Sales - base metals, net		—			588			—			—			588

		—			2,647			585			—			3,232

Costs and expenses
Costs applicable to sales (exclusive of depreciation, depletion and amortization shown separately below)
Gold		—			1,051			401			(10	)		1,442
Base metals		—			227			—			—			227
Depreciation, depletion and amortization		—			379			125			—			504
Exploration		—			52			24			—			76
Advanced projects, research and development		—			34			25			—			59
General and administrative		—			62			9			9			80
Write-down of long-lived assets		—			4			22			—			26
Other		—			20			28			—			48

		—			1,829			634			(1	)		2,462

Other income (expense)
Other income (expense), net		3			19			29			—			51
Interest income - intercompany		74			35			1			(110	)		—
Interest expense - intercompany		(6	)		—			(104	)		110			—
Interest expense, net		(2	)		(68	)		(7	)		—			(77	)

		69			(14	)		(81	)		—			(26	)

Income from continuing operations before taxes, minority interest and equity income of affiliates		69			804			(130	)		1			744
Income tax expense		(24	)		(316	)		126			—			(214	)
Minority interest in income of subsidiaries		—			(233	)		4			(1	)		(230	)
Equity income of affiliates		208			—			43			(250	)		1

Income from continuing operations		253			255			43			(250	)		301
Loss from discontinued operations		—			—			(1	)		—			(1	)
Cumulative effect of a change in accounting principle		—			(47	)		—			—			(47	)

Net income	$	253		$	208		$	42		$	(250	)	$	253

NEWMONT MINING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Continued

(dollars in millions, except per share, per ounce and per pound amounts)


Condensed Consolidating Balance Sheets	At September 30, 2005
Condensed Consolidating Balance Sheets	Newmont Mining Corporation			Newmont USA		Other Subsidiaries		Eliminations			Newmont Mining Corporation Consolidated
Assets
Cash and cash equivalents	$	1		$	880	$	214	$	—		$	1,095
Marketable securities and other short-term investments		—			830		122		—			952
Trade receivables		—			94		6		—			100
Accounts receivable		1,759			2,283		409		(4,273	)		178
Inventories		—			293		49		—			342
Stockpiles and ore on leach pads		—			222		24		—			246
Other current assets		3			195		25		—			223

Current assets		1,763			4,797		849		(4,273	)		3,136
Property, plant and mine development, net		(9	)		3,992		1,544		—			5,527
Investments		—			1		794		—			795
Investments in subsidiaries		5,098			1		4,070		(9,169	)		—
Long-term stockpiles and ore on leach pads		—			536		39		—			575
Deferred income tax assets		(6	)		521		118		—			633
Other long-term assets		1,650			987		319		(2,659	)		297
Goodwill		—			41		2,951		—			2,992

Total assets	$	8,496		$	10,876	$	10,684	$	(16,101	)	$	13,955

Liabilities
Current portion of long-term debt	$	—		$	216	$	1	$	—		$	217
Accounts payable		50			3,913		546		(4,272	)		237
Employee related benefits		—			108		27		—			135
Other current liabilities and deferred revenue		45			455		152		(1	)		651

Current liabilities		95			4,692		726		(4,273	)		1,240
Long-term debt		597			1,068		125		—			1,790
Reclamation and remediation liabilities		—			301		114		—			415
Employee-related benefits		—			225		21		—			246
Deferred income tax liabilities		52			224		243		—			519
Other long-term liabilities and deferred revenue		247			236		2,568