Edgar Filing: NEWMONT MINING CORP /DE/

Form 10-Q/A for Period Ended March 31, 2004

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

Form 10-Q/A

(Amendment No. 1)

(Mark One)

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

For the Quarterly Period Ended March 31, 2004

¨	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

There were 402,298,433 shares of common stock outstanding on April 26, 2004 (and 40,758,491 exchangeable shares).

Explanatory Note

This Amendment No. 1 on Form 10-Q/A (this “Amendment”) amends the Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2004 filed on April 30, 2004 (the “Original Filing”). Newmont Mining Corporation has filed this Amendment to correct an error in the Statements of Consolidated Cash Flows as described in Note 25, Restatement of Statements of Consolidated Cash Flows, as well as to make corresponding textual changes in Item 2, Management’s Discussion and Analysis of Results of Operations and Financial Condition and to add related information in Item 4, Controls and Procedures. Other information contained herein has not been updated. Therefore, you should read this Amendment together with other documents that we have filed with the Securities and Exchange Commission subsequent to the filing of the Original Filing. Information in such reports and documents updates and supersedes certain information contained in this Amendment. The filing of this Amendment shall not be deemed an admission that the Original Filing, when made, included any known, untrue statement of material fact or knowingly omitted to state a material fact necessary to make a statement not misleading.

PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

NEWMONT MINING CORPORATION

STATEMENTS OF CONSOLIDATED INCOME


	Three Months Ended March 31,
	2004			2003
	(unaudited, in thousands, except per share)
Revenues
Sales—gold, net	$	934,651		$	714,556
Sales—base metals, net		187,626			19,433
Royalties		13,162			14,480

		1,135,439			748,469

Costs and expenses
Costs applicable to sales (exclusive of depreciation, depletion and amortization shown separately below)
Gold		501,549			399,009
Base metals		73,025			15,362
Depreciation, depletion and amortization		182,024			130,593
Exploration, research and development		36,674			21,472
General and administrative		27,158			26,410
Other		5,927			22,124

		826,357			614,970

Other income (expense)
Gain on investments, net		—			85,318
Gain on derivative instruments, net		549			55,025
Loss on extinguishment of debt		—			(19,530	)
Dividends, interest income, foreign currency exchange and other income		13,875			30,963
Interest expense, net of capitalized interest of $2,352 and $1,290, respectively		(25,502	)		(29,946	)

		(11,078	)		121,830

Pre-tax income before minority interest, equity income, impairment of affiliates and cumulative effect of a change in accounting principle		298,004			255,329
Income tax expense		(86,632	)		(62,563	)
Minority interest in income of subsidiaries		(79,057	)		(37,789	)
Equity loss and impairment of Australian Magnesium Corporation		—			(11,727	)
Equity income of affiliates		1,504			8,538

Income before cumulative effect of a change in accounting principle		133,819			151,788
Cumulative effect of a change in accounting principle, net of tax of $25,382 and $11,188, respectively		(47,138	)		(34,533	)

Net income applicable to common shares	$	86,681		$	117,255

Income per common share before cumulative effect of a change in accounting principle, basic and diluted	$	0.30		$	0.38
Cumulative effect of a change in accounting principle per common share, basic and diluted		(0.10	)		(0.09	)

Net income per common share, basic and diluted	$	0.20		$	0.29

Basic weighted average common shares outstanding		442,535			401,890

Diluted weighted average common shares outstanding		446,638			404,219

Cash dividends declared per common share	$	0.05		$	0.04

The accompanying notes are an integral part of these financial statements.

NEWMONT MINING CORPORATION

CONSOLIDATED BALANCE SHEETS


	March 31, 2004		December 31, 2003
	(unaudited, in thousands)
ASSETS
Cash and cash equivalents	$	1,548,606	$	1,314,022
Marketable securities and other short-term investments		269,241		274,593
Trade receivables		139,328		20,055
Accounts receivable		75,654		70,631
Inventories		282,678		225,719
Stockpiles and ore on leach pads		248,242		248,625
Deferred stripping costs		78,745		60,086
Deferred income tax assets		182,086		73,665
Other current assets		130,560		100,280

Current assets		2,955,140		2,387,676
Property, plant and mine development, net		3,917,785		2,347,984
Mineral interests and other intangible assets, net		1,357,843		1,379,101
Investments		24,422		733,977
Deferred stripping costs		36,488		30,293
Long-term stockpiles and ore on leach pads		490,938		305,810
Deferred income tax assets		766,841		752,408
Other long-term assets		177,854		95,367
Goodwill		3,084,686		3,042,557

Total assets	$	12,811,997	$	11,075,173

LIABILITIES
Current portion of long-term debt	$	380,874	$	190,866
Accounts payable		216,147		163,164
Employee related benefits		114,649		136,301
Other current liabilities		477,932		368,689

Current liabilities		1,189,602		859,020
Long-term debt		1,526,879		886,633
Reclamation and remediation liabilities		405,725		362,283
Deferred revenue from sale of future production		53,841		53,841
Deferred income tax liabilities		734,951		633,135
Employee related benefits		252,114		253,726
Advanced stripping costs		76,969		—
Other long-term liabilities		357,521		295,082

Total liabilities		4,597,602		3,343,720

Commitments and contingencies (Note 22)
Minority interest in subsidiaries		741,750		346,518

STOCKHOLDERS’ EQUITY
Preferred stock—$5.00 par value;
Authorized—5.0 million shares
Issued and outstanding—none		—		—
Common stock—$1.60 par value;
Authorized—750 million shares at each period end, respectively
Issued and outstanding—
Common: 402.2 million and 398.7 million shares issued, less 135 thousand and 105 thousand treasury shares, respectively		643,476		638,046
Exchangeable: 55.9 million shares issued, less 15 million and 12.7 million redeemed shares, respectively
Additional paid-in capital		6,450,650		6,423,278
Accumulated other comprehensive income		13,201		22,827
Retained earnings		365,318		300,784

Total stockholders’ equity		7,472,645		7,384,935

Total liabilities and stockholders’ equity	$	12,811,997	$	11,075,173

The accompanying notes are an integral part of these financial statements.

NEWMONT MINING CORPORATION

STATEMENTS OF CONSOLIDATED CASH FLOWS

As Restated. See Note 25


	Three Months Ended March 31,
	2004			2003
	(unaudited, in thousands)
Operating activities:
Net income	$	86,681		$	117,255
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization		182,024			130,593
Accretion of accumulated reclamation obligations		6,829			5,744
Amortization of deferred stripping costs, net		(15,170	)		(6,362	)
Deferred income taxes		22,569			(35,400	)
Foreign currency exchange loss (gain)		463			(24,706	)
Minority interest, net of dividends of $29,190 and zero, respectively		49,867			37,789
Equity loss (income) and impairment of affiliates, net of dividends		(375	)		8,514
Write-downs of inventories, stockpiles and ore on leach pads		5,123			7,688
Cumulative effect of a change in accounting principle, net of tax		47,138			34,533
Gain on investments, net		—			(85,318	)
Gain on derivative instruments, net		(549	)		(55,025	)
Loss on extinguishment of debt		—			19,530
Gain on sale of assets and other		(10,610	)		(5,623	)
(Increase) decrease in operating assets:
Accounts receivable		(58,624	)		5,855
Inventories, stockpiles and ore on leach pads		23,389			(23,480	)
Other assets		(15,926	)		(1,991	)
Increase (decrease) in operating liabilities:
Accounts payable and other accrued liabilities		174			60,770
Derivative instruments		1,244			(17,328	)
Early settlement of derivative instruments classified as cash flow hedges		—			(32,779	)
Other liabilities		(181	)		(1,448	)

Net cash provided by operating activities		324,066			138,811

Investing activities:
Additions to property, plant and mine development		(166,242	)		(82,721	)
Investments in affiliates		—			(56,224	)
Cash recorded upon consolidation of Batu Hijau		82,203			—
Proceeds from the sale of TVX Newmont Americas		—			170,625
Early settlement of ineffective derivative instruments		(290	)		(4,097	)
Proceeds from asset sales and other		11,114			2,381

Net cash (used in) provided by investing activities		(73,215	)		29,964

Financing activities:
Repayment of long-term debt		(22,269	)		(182,787	)
Dividends paid on common		(22,147	)		(16,089	)
Proceeds from stock issuance		19,029			934
Other		8,504			—

Net cash used in financing activities		(16,883	)		(197,942	)

Effect of exchange rate changes on cash		616			7,800

Net change in cash and cash equivalents		234,584			(21,367	)
Cash and cash equivalents at beginning of period		1,314,022			401,683

Cash and cash equivalents at end of period	$	1,548,606		$	380,316

Supplemental information:
Interest paid, net of amounts capitalized	$	20,309		$	29,557
Income taxes paid	$	48,147		$	21,560

The accompanying notes are an integral part of these financial statements.

NEWMONT MINING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(1) BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The following interim Consolidated Financial Statements of Newmont Mining Corporation and its subsidiaries (collectively, “Newmont” or the “Company”) are unaudited and prepared in accordance with the rules and regulations of the Securities and Exchange Commission for Form 10-Q. Such rules and regulations allow the omission of certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles as long as the statements are not misleading. In the opinion of management, all adjustments necessary for a fair presentation of these interim statements have been included. These adjustments are of a normal recurring nature, except for the effects of adopting Financial Accounting Standards Board (“FASB”) Interpretation No. 46R (“FIN 46R”), “Consolidation of Variable Interest Entities” (Note 2). These interim Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements of Newmont included in its Annual Report on Form 10-K/A for the year ended December 31, 2003.

The Company’s Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of the Company’s Consolidated Financial Statements requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and the related disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. The more significant areas requiring the use of management estimates and assumptions relate to mineral reserves that are the basis for future cash flow estimates and units-of-production depreciation, depletion and amortization calculations; environmental, reclamation and closure obligations; estimates of recoverable gold and other minerals in stockpile and leach pads inventories; asset impairments (including impairments of goodwill, long-lived assets, and investments); write-downs of inventory to net realizable value; post-employment, post-retirement and other employee benefit liabilities; valuation allowances for deferred tax assets; reserves for contingencies and litigation; and the fair value and accounting treatment of financial instruments. The Company bases its estimates on the Company’s historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Accordingly, actual results may differ significantly from these estimates under different assumptions or conditions.

References to “A$” refer to Australian currency, “CN$” to Canadian currency, “CHF” to Switzerland currency, “IDR” to Indonesian currency and “U.S.$” or “$” to United States currency.

Certain amounts for the three months ended March 31, 2003 and at December 31, 2003 have been reclassified to conform to 2004 presentation.

(2) CHANGE IN ACCOUNTING POLICY—CONSOLIDATION OF BATU HIJAU

In December 2003, the FASB issued FIN 46R, which provides guidance on the identification and reporting for entities over which control is achieved through means other than voting rights. FIN 46R defines such entities as variable interest entities (“VIEs”). Application of this revised interpretation was required in financial statements for companies that have interests in VIEs or potential VIEs commonly referred to as special-purpose entities for periods ending after December 15, 2003. Application for all other types of entities is required in financial statements for periods ending after March 15, 2004.

Newmont completed its evaluation of the impact of FIN 46R for VIEs in which the Company has an interest, which were created before December 31, 2003 and that are not considered to be special-purpose entities. Newmont identified the Nusa Tenggara Partnership (“NTP”) and P.T. Newmont Nusa Tenggara (“PTNNT”)

NEWMONT MINING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

(collectively, “Batu Hijau”) as VIEs because of certain capital structures and contractual relationships (primarily the sharing of the expected residual returns with a party that did not have an equity investment at risk that is considered significant to the total expected residual returns, as well as indications of insufficient equity, as defined by FIN 46R). Newmont also determined that it is the primary beneficiary of Batu Hijau. Therefore, as of January 1, 2004, the Company has fully consolidated Batu Hijau in its Consolidated Financial Statements. Previously, the Company accounted for its investment in Batu Hijau using the equity method of accounting, as disclosed in Note 10 in Newmont’s Annual Report on Form 10-K for the year ended December 31, 2003, filed March 15, 2004.

NEWMONT MINING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

The following is summarized financial information reflecting the impact of consolidating Batu Hijau on the Company’s Consolidated Financial Statements as of and for the three months ended March 31, 2004:


	Three Months Ended March 31, 2004
	Amounts Before Consolidation of Batu Hijau			Impact of Consolidating Batu Hijau			Consolidated Amounts
	(unaudited, in thousands)
Revenues
Sales—gold, net	$	899,449		$	35,202		$	934,651
Sales—base metals, net		15,208			172,418			187,626
Royalties		13,162			—			13,162

		927,819			207,620			1,135,439

Costs and expenses
Costs applicable to sales—gold		488,094			13,455			501,549
Costs applicable to sales—base metals		8,854			64,171			73,025
Depreciation, depletion and amortization		156,491			25,533			182,024
Other costs and expenses		68,805			954			69,759

		722,244			104,113			826,357

Other income (expense)
Interest expense		(14,474	)		(11,028	)		(25,502	)
Other income		14,066			358			14,424

		(408	)		(10,670	)		(11,078	)

Pre-tax income before minority interest, equity income, impairment of affiliates and cumulative effect of a change in accounting principle		205,167			92,837			298,004
Income tax expense		(53,115	)		(33,517	)		(86,632	)
Minority interest in income of subsidiaries		(53,726	)		(25,331	)		(79,057	)
Equity income (loss) and impairment of affiliates		35,493			(33,989	)		1,504

Income before cumulative effect of a change in accounting principle		133,819			—			133,819
Cumulative effect of a change in accounting principle, net		—			(47,138	)		(47,138	)

Net income	$	133,819		$	(47,138	)	$	86,681

NEWMONT MINING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)


	As of March 31, 2004
	Amounts Before Consolidation of Batu Hijau		Impact of Consolidating Batu Hijau			Consolidated Amounts
	(unaudited, in thousands)
Current assets	$	2,537,876	$	417,264		$	2,955,140
Property, plant and mine development, net		2,378,280		1,539,505			3,917,785
Mineral interests and other intangible assets, net		1,351,284		6,559			1,357,843
Investments		756,217		(731,795	)		24,422
Long-term stockpiles and ore on leach pads		263,336		227,602			490,938
Goodwill		3,084,686		—			3,084,686
Other assets		897,575		83,608			981,183

Total assets	$	11,269,254	$	1,542,743		$	12,811,997

Current portion of long-term debt	$	185,393	$	195,481		$	380,874
Other current liabilities		668,369		140,359			808,728
Long-term debt		873,797		653,082			1,526,879
Long-term deferred income tax liabilities		633,489		101,462			734,951
Advanced stripping costs		—		76,969			76,969
Other liabilities		1,017,369		51,832			1,069,201

Total liabilities		3,378,417		1,219,185			4,597,602

Minority interest in subsidiaries		371,054		370,696			741,750

Total stockholders’ equity		7,519,783		(47,138	)		7,472,645

Total liabilities and stockholders’ equity	$	11,269,254	$	1,542,743		$	12,811,997

Upon consolidation of Batu Hijau, effective January 1, 2004, certain adjustments were recorded to the opening balance sheet of PTNNT and NTP 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 $15.1 million and $32.0 million, respectively, and have been recorded in Cumulative effect of a change in accounting principle, net of tax in the Consolidated Statements of Income, net of income tax expense and minority interest.

NEWMONT MINING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

The table below presents the impact of the accounting change for the three-month period ended March 31, 2004 under full consolidation and the pro forma effect for the three-month period ended March 31, 2003 under the equity method of accounting as if the change had been in effect for that period (unaudited, in thousands, except per share data):


	Three Months Ended March 31,
	2004			2003 (pro forma)
	(unaudited, in thousands)
Adjustments to net income:
Costs applicable to sales (exclusive of depreciation, depletion and amortization shown separately below)
Gold	$	1,333		$	—
Base metals		6,507			—
Depreciation, depletion and amortization		2,732			—

Pre-tax income (loss) before minority interest, equity income, impairment of affiliates and cumulative effect of a change in accounting principle		(10,572	)		—
Income tax benefit		3,564			—
Minority interest in income of subsidiaries		3,066			—
Equity income of affiliates		—			(2,005	)

Income before cumulative effect of a change in accounting principle	$	(3,942	)	$	(2,005	)

Income before cumulative effect of a change in accounting principle, per common share, basic and diluted	$	(0.01	)	$	0.00

The Company has also reported the results of operations for Batu Hijau in its Consolidated Statements of Income using co-product accounting for gold and copper. In addition, upon consolidation the Company included Batu Hijau’s Cash and cash equivalents of $82.2 million in its Consolidated Balance Sheets at January1, 2004 and in its cash flow from investing activities in the Statement of Consolidated Cash Flows during the three months ended March 31, 2004.

The Company and an affiliate of Sumitomo Corporation (“Sumitomo”) are partners with ownership interests of 56.25% and 43.75%, respectively, in NTP, which holds 80% of PTNNT, the owner of the Batu Hijau copper/gold mine in Indonesia. The remaining 20% interest in PTNNT is held by an unrelated Indonesian company, P.T. Pukuafu Indah (“PTPI”). PTNNT obtained rights to conduct mining operations under a Contract of Work with the government of Indonesia. The Batu Hijau mine began production in the fourth quarter of 1999, with a development cost of approximately $1.83 billion. Based on proven and probable reserves as of December 31, 2003, mining will be completed in 2017 and processing of stockpiles will be completed in 2030.

To date, PTNNT has recorded cumulative losses. Therefore, during the three months ended March 31, 2004, the Company has recognized the portion of net income attributable to minority interests of 43.75% (representing 43.75% attributable to Sumitomo and 0% attributable to PTPI). NTP loaned PTPI the funds required to purchase its original 20% interest in PTNNT, and under the PTPI loan agreement, PTPI has pledged 70% of its 20% share of future PTNNT dividends to repay its loan to NTP, including interest. As a result of higher metal prices, improved operating and financial results and increased life of mine expectations regarding production, costs and economics, PTNNT is expected to recover all cumulative losses to-date, report positive retained earnings and begin paying dividends during 2004. Once PTNNT’s cumulative losses are recovered, the Company will

NEWMONT MINING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

recognize net income attributable to Sumitomo and PTPI minority interests of 41.125% and 6.0%, respectively, until the PTPI loan is repaid.

The Company’s equity investment in PTNNT was $709.7 million at December 31, 2003. As discussed above, effective January 1, 2004, the Company fully consolidated PTNNT and NTP and recognized a liability for the minority interests in PTNNT and NTP attributable to Sumitomo of $370.7 million as of March 31, 2004.

For the three months ended March 31, 2004 and 2003, PTNNT recorded gross revenues, before smelting and refining costs, of $197.1 million and $94.3 million for base metals and $40.3 million and $32.4 million for gold, respectively, which were subject to final pricing adjustments. The average price adjustment for base metals was 22.3% and 6.3% for the three months ended March 31, 2004 and 2003, respectively. The average price adjustment for gold was 2.6% and 1.6% for the three months ended March 31, 2004 and 2003, respectively.

(3) INVENTORIES


	At March 31, 2004		At December 31, 2003
	(unaudited, in thousands)
Current:
In-process	$	60,460	$	64,038
Precious metals		33,097		52,875
Materials, supplies and other		189,121		108,806

	$	282,678	$	225,719

The Company recorded aggregate write downs of $5.1 million and $5.8 million for the three months ended March 31, 2004 and 2003, respectively, to reduce the carrying value of inventories to net realizable value. Write-downs in 2004 related to in-process inventories at Tanami and materials and supplies at Batu Hijau. Write-downs in 2003 primarily related to in-process inventories at Golden Grove and precious metals at Minahasa.

Inventory write-downs are classified as components of Costs applicable to sales.

(4) STOCKPILES AND ORE ON LEACH PADS


	At March 31, 2004		At December 31, 2003
	(unaudited, in thousands)
Current:
Stockpiles	$	93,852	$	83,113
Ore on leach pads		154,390		165,512

	$	248,242	$	248,625

Long-term:
Stockpiles	$	378,260	$	177,524
Ore on leach pads		112,678		128,286

	$	490,938	$	305,810

NEWMONT MINING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

(5) MARKETABLE SECURITIES AND OTHER SHORT-TERM INVESTMENTS AND GAIN ON INVESTMENTS, NET

Marketable securities and other short-term investments at March 31, 2004 and December 31, 2003 were as follows:


	At March 31, 2004		At December 31, 2003
	(unaudited, in thousands)
Marketable securities	$	136,810	$	144,711
Newmont Australia infrastructure bonds		129,263		127,674
Other short-term investments		3,168		2,208

Total	$	269,241	$	274,593

Gain on investment for the three months ended March 31, 2004 and 2003 was as follows:


	Three Months Ended March 31,
	2004		2003
	(unaudited, in thousands)
Gain on exchange of Echo Bay shares for Kinross marketable securities	$	—	$	84,337
Gain on sale of other investments		—		981

Gain on investments, net	$	—	$	85,318

Kinross Gold Corporation

On January 31, 2003, Kinross Gold Corporation (“Kinross”), Echo Bay Mines Ltd. (“Echo Bay”) and TVX Gold Inc. (“TVX Gold”) were combined, and TVX Gold acquired Newmont’s 49.9% interest in the TVX Newmont Americas joint venture. Under the terms of the combination and acquisition, Newmont received a 13.8% interest in the restructured Kinross in exchange for its then 45.67% interest in Echo Bay and cash proceeds of $180 million (approximately $9 million was held in escrow until the second quarter of 2003) for its interest in TVX Newmont Americas. Newmont recognized a pre-tax gain of $84.3 million on the transaction in Gain on investments, net in the Statements of Consolidated Income. During the third quarter of 2003, Newmont sold approximately 28 million Kinross shares representing 66% of its investment in Kinross for total cash proceeds of $224.6 million and recorded a net loss of $7.4 million. Newmont classified the remaining balance of its investment in Kinross as a short-term, available-for-sale marketable security at March 31, 2004 and December 31, 2003. At March 31, 2004 and December 31, 2003, the fair value of the Kinross investment was $106.2 million and $115.3 million, respectively. At March 31, 2004, Accumulated other comprehensive income included a loss of $12.6 million related to the change in market value of the investment in Kinross. As the value of Kinross shares have historically been strongly correlated to the price of gold, Newmont considers the unrealized loss to be temporary. Newmont will continue to evaluate the need to recognize a loss for an other-than-temporary decline in the value of the investment.

NEWMONT MINING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

(6) DEFERRED STRIPPING COSTS

Movements in the deferred stripping cost balance were as follows:


	Three Months Ended March 31,
	2004			2003
	(unaudited, in thousands)
Opening balance	$	90,379		$	55,387
Addition due to consolidation of Batu Hijau and cumulative effect of a change in accounting principle (Note 2)		(67,285	)		—
Additions		46,619			40,566
Amortization		(31,449	)		(34,204	)

Closing balance	$	38,264		$	61,749

The deferred and advanced stripping balances are presented in the balance sheet as follows:


	March 31, 2004		December 31, 2003
	(unaudited, in thousands)
Assets:
Current	$	78,745	$	60,086
Long-term		36,488		30,293

		115,233		90,379

Liabilities:
Current	$	—	$	—
Long-term		76,969		—

		76,969		—

Deferred stripping, net	$	38,264	$	90,379

At the Company’s gold mining operations, deferred stripping costs are charged to Costs applicable to sales as gold is produced and sold using the units of production method based on estimated recoverable ounces of proven and probable gold 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 is produced. The application of the deferred stripping accounting method generally results in an asset on the Consolidated Balance Sheets (Deferred stripping costs), although a liability (Advanced stripping costs) will arise if the actual stripping ratio incurred to date is less than the expected waste-to-ore ratio over the life of the mine. The Advanced stripping costs at March 31, 2004 pertain to Batu Hijau.

NEWMONT MINING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

(7) PROPERTY, PLANT AND MINE DEVELOPMENT


		At March 31, 2004							At December 31, 2003
		(unaudited, in thousands)
	Depreciable Life (in years)	Cost		Accumulated Depreciation and Depletion			Net Book Value		Cost		Accumulated Depreciation and Depletion			Net Book Value
Land	—	$	78,624	$	—		$	78,624	$	72,000	$	—		$	72,000
Buildings and equipment	1-25		6,330,312		(3,222,899	)		3,107,413		4,207,531		(2,659,685	)		1,547,846
Mine development	1-25		1,240,719		(783,243	)		457,476		1,242,383		(721,670	)		520,713
Asset retirement cost	1-25		146,555		(108,390	)		38,165		121,588		(85,295	)		36,293
Construction-in-progress	—		236,107		—			236,107		171,132		—			171,132

Total		$	8,032,317	$	(4,114,532	)	$	3,917,785	$	5,814,634	$	(3,466,650	)	$	2,347,984

Leased assets included above in property, plant and mine development	3–11	$	356,576	$	(172,467	)	$	184,109	$	354,378	$	(167,183	)	$	187,195

(8) MINERAL INTERESTS AND OTHER INTANGIBLE ASSETS


		At March 31, 2004							At December 31, 2003
		(unaudited, in thousands)
	Weighted- average Amortization Period (in years)	Gross Carrying Value		Accumulated Amortization			Net Book Value		Gross Carrying Value		Accumulated Amortization			Net Book Value
Mineral Interest:
Production Stage
Mineral interests	10	$	802,181	$	(384,502	)	$	417,679	$	793,813	$	(363,933	)	$	429,880
Royalties-net smelter returns	25		215,145		(34,481	)		180,664		215,210		(31,347	)		183,863
Royalties-net profit interest	11		18,533		(4,055	)		14,478		18,583		(4,018	)		14,565

	15		1,035,859		(423,038	)		612,821		1,027,606		(399,298	)		628,308

Development stage
Mineral interests	18		213,801		—			213,801		213,801		—			213,801
Royalties-net smelter returns	10		1,598		—			1,598		1,610		—			1,610
Royalties-net profit interest	10		7,158		(145	)		7,013		7,214		(128	)		7,086

	17		222,557		(145	)		222,412		222,625		(128	)		222,497

Exploration stage
Mineral interests	11		458,765		(19,830	)		438,935		459,660		(17,283	)		442,377
Royalties-net smelter returns	10		5,131		(804	)		4,327		5,134		(935	)		4,199

	11		463,896		(20,634	)		443,262		464,794		(18,218	)		446,576

Total mineral interests	11		1,722,312		(443,817	)		1,278,495		1,715,025		(417,644	)		1,297,381

Oil and Gas:
Producing property
Royalties-net refining returns	30		45,877		(11,693	)		34,184		46,235		(10,366	)		35,869
Working interest	12		22,279		(2,937	)		19,342		22,454		(2,713	)		19,741

	24		68,156		(14,630	)		53,526		68,689		(13,079	)		55,610

Non-Producing property
Royalties-net refining returns	12		5,743		—			5,743		5,788		—			5,788
Working interest	12		8,629		—			8,629		8,695		—			8,695

	12		14,372		—			14,372		14,483		—			14,483

Total oil and gas	12		82,528		(14,630	)		67,898		83,172		(13,079	)		70,093

Other	20		12,279		(829	)		11,450		12,279		(652	)		11,627

Total	14	$	1,817,119	$	(459,276	)	$	1,357,843	$	1,810,476	$	(431,375	)	$	1,379,101

NEWMONT MINING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

The Company’s intangible assets for mineral interests and oil and gas interests are subject to amortization. The aggregate amortization expense for the three months ended March 31, 2004 and 2003, was $27.9 million and $21.5 million, respectively.

(9) INVESTMENTS AND EQUITY INCOME OF AFFILIATES


	At March 31, 2004		At December 31, 2003
	(unaudited, in thousands)
Investments in affiliates:
Batu Hijau	$	—	$	709,749
European Gold Refineries		12,628		11,907
AGR Matthey Joint Venture		11,794		12,321

	$	24,422	$	733,977

Equity Loss and Impairment of Australian Magnesium Corporation

During the three months ended March 31, 2003, the Company recorded a loss of $11.7 million related to its investment in Australian Magnesium Corporation for an other-than-temporary decline in value of the investment of approximately $11.0 million and its proportionate share of AMC’s first quarter losses of $0.7 million.


	Three Months Ended March 31,
	2004		2003
	(unaudited, in thousands)
Equity income of affiliates:
Batu Hijau	$	—	$	7,353
TVX Newmont Americas and other		—		810
European Gold Refineries		903		—
AGR Matthey Joint Venture		601		375

	$	1,504	$	8,538

Investment in Batu Hijau

Effective January 1, 2004, Newmont consolidated Batu Hijau (see Note 2). For the three months ended March 31, 2003 and at December 31, 2003, the Company accounted for its investment in Batu Hijau under the equity method of accounting.

Newmont’s 2003 first quarter equity income in PTNNT of $7.4 million was based on 56.25% of PTNNT’s net loss of $8.9 million, adjusted for the elimination of $1.8 million of inter-company interest, $1.7 million of inter-company management fees, the cumulative effect of reclamation and remediation liabilities of $8.0 million and other adjustments of $0.9 million.

NEWMONT MINING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

The summarized results of operations of NTP for the three months ended March 31, 2003 using the co-product accounting method for gold and base metals are as follows (unaudited, in thousands):


Copper revenues, net of smelting and refining costs	$	80,014
Gold revenues, net of smelting and refining costs	$	27,230
Gross profit	$	10,155
Net income before cumulative effect of a change in accounting principle	$	5,960
Net income	$	(8,258	)

The summarized assets and liabilities of NTP as of December 31, 2003 are as follows (unaudited, in thousands):


Current assets	$	324,958
Property, plant and mine development, net	$	1,585,124
Mineral interest, net	$	176,349
Other assets	$	372,070
Debt and related interest to partners and affiliates	$	258,182
Other current liabilities	$	206,132
Debt—third parties (including current portion)	$	739,812
Other liabilities	$	176,649

Australian Magnesium Corporation (“AMC”)

As of January 1, 2003, Newmont held a 22.8% interest in Australian Magnesium Corporation (“AMC”). On January 3, 2003, Newmont contributed A$100 million (approximately $56.2 million) in equity to AMC that increased its ownership to 40.9%. During the first quarter of 2003, Newmont’s interest decreased to 27.8% as a result of AMC stock issuances to shareholders other than Newmont. As a result of this equity dilution of its interest in AMC, Newmont recorded an increase of $7.0 million to Additional paid-in capital. Newmont’s ownership decreased to 26.7% as a result of AMC stock issuances to shareholders other than Newmont during the remainder of 2003. During 2003, Newmont also recorded write downs of its investment in AMC as follows: (i) during the first quarter of 2003, a loss for an other-than-temporary decline in market value of $11.0 million as a result of certain announcements made by AMC and $0.7 million for its share of AMC’s first quarter 2003 losses and (ii) during the second quarter of 2003, a loss of $107.8 million that reduced the carrying value of its investment in AMC to zero. During the fourth quarter of 2003, Newmont sold its entire interest in AMC for a nominal amount to Deutsche Bank AG and to Magtrust Pty Ltd, a company owned and controlled by the directors of AMC. Magtrust purchased approximately a 19.9% interest in AMC, with Deutsche Bank purchasing approximately 6.8% of AMC. As part of the sale agreement with Deutsche Bank, if Deutsche Bank sells its interest in AMC to a third party in the future, it must pay Newmont 90% of the sales proceeds. During the first quarter of 2004, Deutsche Bank sold approximately 50 million shares of AMC, which resulted in A$2.3 million (approximately $1.8 million) in proceeds payable to Newmont, which was recorded in Dividends, interest income, foreign currency exchange and other income.

Newmont is the guarantor of a A$71.0 million (approximately $53.5 million) amortizing loan facility of an AMC subsidiary, QMC Finance Pty Ltd (“QMC”), of which A$63.0 million (approximately $47.5 million) was outstanding as of March 31, 2004. The QMC loan facility, which is collateralized by the assets of AMC subsidiaries, which assets are used in the Queensland Magnesium joint venture, expires in November 2006. During the fourth quarter of 2003, Newmont recorded a $30.0 million charge in Loss on guarantee of QMC debt

NEWMONT MINING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

and established a corresponding reserve in Other current liabilities, for the expected loss associated with its guarantee of QMC’s debt. QMC is also a party to hedging contracts that have been guaranteed by Newmont. The contracts include a series of foreign exchange forward contracts and bought put options, the last of which expire in June 2006. As of March 31, 2004, the fair value of these contracts was positive A$5.9 million (approximately $4.5 million). QMC is considered to be a special-purpose entity that is a variable interest entity. Further, Newmont’s guarantee of the QMC loan facility qualifies as a variable interest in QMC. However, Newmont has not consolidated QMC, as Newmont is not the primary beneficiary of QMC, as defined by FIN 46R.

For more information regarding AMC, refer to Notes 2 and 10 to the Consolidated Financial Statements in Newmont’s Annual Report on Form 10-K for the year ended December 31, 2003, filed March 15, 2004.

(10) Goodwill

Changes in the carrying amount of goodwill allocated to reporting units during 2003 and for the three months ended March 31, 2004 are summarized in the following table (unaudited, in millions).


	Nevada		Other North America		Total North America		Yanacocha		Other South America		Total South America
Balance at January 1, 2003	$	40.9	$	—	$	40.9	$	—	$	—	$	—
Purchase price allocation for Newmont NFM Scheme of Arrangement		—		—		—		—		—		—
Reversal of valuation allowances for acquired deferred tax assets		—		—		—		—		—		—
Change in estimate of pre-acquisition tax contingency and other		—		—		—		—		—		—

Balance at December 31, 2003		40.9		—		40.9		—		—		—
Change in estimate of pre-acquisition tax contingency		—		—		—		—		—		—

Balance at March 31, 2004	$	40.9	$	—	$	40.9	$	—	$	—	$	—


	Pajingo		Other Australia			Total Australia			Zarafshan- Newmont		Other International Operations		Total Gold
Balance at January 1, 2003	$	56.9	$	140.8		$	197.7		$	—	$	—	$	238.6
Purchase price allocation for Newmont NFM Scheme of Arrangement		—		45.8			45.8			—		47.5		93.3
Reversal of valuation allowances for acquired deferred tax assets		—		(43.8	)		(43.8	)		—		—		(43.8	)
Change in estimate of pre-acquisition tax contingency and other		—		—			—			—		—		—

Balance at December 31, 2003		56.9		142.8			199.7			—		47.5		288.1
Change in estimate of pre-acquisition tax contingency		—		—			—			—		—		—

Balance at March 31, 2004	$	56.9	$	142.8		$	199.7		$	—	$	47.5	$	288.1

NEWMONT MINING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)


	Batu Hijau		Other Base Metals		Total Base Metals		Exploration		Merchant Banking			Corporate and Other		Consolidated
Balance at January 1, 2003	$	—	$	—	$	31.5	$	1,129.5	$	1,625.0		$	—	$	3,024.6
Purchase price allocation for Newmont NFM Scheme of Arrangement		—		—		—		—		—			—		93.3
Reversal of valuation allowances for acquired deferred tax assets		—		—		—		—		—			—		(43.8	)
Change in estimate of pre-acquisition tax contingency and other		—		—		—		—		(31.5	)		—		(31.5	)

Balance at December 31, 2003		—		—		31.5		1,129.5		1,593.5			—		3,042.6
Change in estimate of pre-acquisition tax contingency		—		—		—		—		42.1			—		42.1

Balance at March 31, 2004	$	—	$	—	$	31.5	$	1,129.5	$	1,635.6		$	—	$	3,084.7

During the three months ended March 31, 2004, the Company revised its estimate for probable loss relating to a pre-acquisition accrual that was originally recorded as part of the purchase price allocation for the acquisitions of Normandy Mining Limited and Franco-Nevada Mining Corporation Limited.

(11) OTHER CURRENT LIABILITIES


	At March 31, 2004		At December 31, 2003
	(unaudited, in thousands)
Interest	$	48,720	$	32,345
Taxes other than income and mining		14,967		10,861
Reclamation and remediation		61,423		57,350
Utilities		7,381		8,360
Income and mining taxes		144,923		116,520
Royalties		20,501		25,701
Guarantee of QMC debt		30,000		30,000
Deferred income tax liabilities		21,014		18,182
Derivative instruments		8,838		6,074
Other		120,165		63,296

	$	477,932	$	368,689

NEWMONT MINING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

(12) LONG-TERM DEBT


	At March 31, 2004			At December 31, 2003
	(unaudited, in thousands)
Sale-leaseback of refractory ore treatment plant	$	286,757		$	296,979
8³/8% debentures, net of discount		52,789			52,877
8⁵/8% notes, due May 2011, net of discount		230,716			228,091
Newmont Australia 7⁵/8% notes, net of premium		120,784			120,881
Newmont Australia 7¹/2% notes, net of premium		19,675			19,708
Medium-term notes		17,000			17,000
Newmont Australia infrastructure bonds		131,315			130,228
Prepaid forward sales obligation		145,000			145,000
Interest rate swaps		(10,869	)		(7,716	)
PTNNT project financing facility		739,812			—
PTNNT Sumitomo loan		108,750			—
Project financing, capital leases and other		66,024			74,451

		1,907,753			1,077,499
Current maturities		(380,874	)		(190,866	)

	$	1,526,879		$	886,633

Scheduled minimum long-term debt repayments as of March 31, 2004 are $365.7 million for the remainder of 2004, $232.4 million in 2005, $173.3 million in 2006, $161.9 million in 2007, $234.2 million in 2008 and $740.3 million thereafter.

In July 1997, PTNNT entered into a $1.0 billion project financing facility, which is non-recourse to Newmont. The scheduled repayments of this debt are in semi-annual installments of $43.4 million through November 2010 and $22.1 million from May 2011 through November 2013. Approximately $739.8 million was outstanding under this facility at March 31, 2004 and December 31, 2003, respectively. The interest rate is based on blended fixed and floating rates, and at current market rates, the weighted average interest rate approximates the London InterBank Offering Rate (“LIBOR”) plus 3.45%.

Prior to 2001, PTNNT entered into two separate shareholder subordinated loan agreements (“Sponsor Loans”) with Newmont Indonesia Limited (“NIL”), a wholly-owned subsidiary of Newmont, and Nusa Tenggara Mining Corporation (“NTMC”), with substantially the same terms. Total principal outstanding under these Sponsor Loans was approximately $248.6 million as of March 31, 2004 and December 31, 2003, respectively. Of this amount, 43.75% or approximately $108.8 million is due to NTMC, an unrelated third-party, and is non-recourse to Newmont, with the remainder payable to a subsidiary consolidated by Newmont. Borrowings under the Sponsor Loans are guaranteed by NTP and are payable on demand, subject to the project financing facility subordination terms. Through December 31, 2003, the interest rate was based on the annual Singapore InterBank Offering Rate (“SIBOR”) and the interest rate on any unpaid interest was based on the annual SIBOR rate plus 1%. Effective January 1, 2004, PTNNT entered into Amendments 1 and 2 to the shareholder subordinated loan agreements with NIL and NTMC and under the terms of the Amendments, annual interest rates are based on SIBOR rate plus 3% for principal and SIBOR rate plus 4% for any unpaid accrued interest.

As of March 31, 2004 and December 31, 2003, PTNNT was in compliance with the project financing facility debt covenants, which include restrictions and limitations on other indebtedness, and also restricts

NEWMONT MINING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

payments from PTNNT. PTNNT is not able to incur any other indebtedness, other than the project financing facility debt, except for “Permitted Indebtedness”, which includes subordinated debt from NTP or the Sponsor Loans, unsecured working capital debt with maturity not in excess of one year and not exceeding $35.0 million, and other indebtedness with aggregate principal not to exceed $5.0 million at any one time. “Restricted Payments” include dividends or returns of capital and payment of principal and interest on subordinated loans to NTP, its partners or their affiliates. Restricted Payments can be made provided certain conditions, financial covenants and financial ratios are met, which are as follows: project financing facility reserve fully funded for next payment; no event of default; funding for 30 days operating costs in collateral accounts; and no event of political force majeure. There were no Restricted Payments made for the three months ended March 31, 2004. As of March 31, 2004, the balance of the project financing facility reserve account was $61.1 million, which is considered restricted cash and is included in Other long-term assets.

NIL and NTMC also provide a contingent support line of credit to PTNNT. As of March 31, 2004 and December 31, 2003, the available additional contingent support from NIL and NTMC was $65.0 million, of which Newmont’s pro-rata share was $36.6 million at March 31, 2004 and December 31, 2003. No funding was required in 2003 or for the three months ended March 31, 2004.

PTNNT also has a $35 million working capital loan agreement with Newmont and Sumitomo Corporation Capital Asia Pty Ltd., which is available through July 14, 2005. The loan is available for one-, two-, or three-month periods at the option of PTNNT. The interest rate is based on the three-month SIBOR plus 2% (interest on any principal not paid by the due date would be based on the three-month SIBOR plus 4%). There were no amounts outstanding under this facility at March 31, 2004 or December 31, 2003.

(13) RECLAMATION AND REMEDIATION (ASSET RETIREMENT OBLIGATIONS)

At March 31, 2004 and December 31, 2003, $410.3 million and $361.0 million, respectively, were accrued for reclamation obligations relating to currently or recently producing mineral properties. 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 March 31, 2004 and December 31, 2003, $56.9 million and $58.6 million, 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 (unaudited, in thousands):


	At March 31, 2004			At March 31, 2003
Balance at beginning of period	$	419,633		$	302,229
Addition due to the consolidation of Batu Hijau (see Note 2)		47,492			—
Impact of adoption of SFAS No. 143		—			120,707
Additions and changes in estimates		212			20,533
Liabilities settled		(7,018	)		(6,478	)
Accretion expense		6,829			5,744

Balance at end of period	$	467,148		$	442,735

The current portions of Reclamation and remediation liabilities of $61.4 million and $57.4 million at March 31, 2004 and December 31, 2003, respectively, are included in Other current liabilities.

NEWMONT MINING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

(14) SALES CONTRACTS, COMMODITY AND DERIVATIVE INSTRUMENTS

Newmont has an unhedged philosophy with respect to gold, and generally sells its gold 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. In addition, at the time of the Normandy Mining Limited (“Normandy”) acquisition, three of Normandy’s affiliates had a substantial derivative instrument position. Newmont is not required to place collateral with respect to its commodity instruments and there are no margin calls associated with such contracts.

For the three months ended March 31, 2004 and 2003, gains of $0.6 million and $22.9 million, respectively, were included in income in Gain on derivative instruments, net for the ineffective portion of derivative instruments designated as cash flow hedges, and gains of $0 million and $32.1 million, respectively, for the change in fair value of derivative instruments that do not qualify as hedges. The amount anticipated to be reclassified from Accumulated other comprehensive income to income for derivative instruments during the next 12 months is a gain of approximately $8.2 million. The maximum period over which hedged forecasted transactions are expected to occur is 7.7 years.

Gold Put Option Contracts

Newmont had the following fixed purchased gold put option contracts at March 31, 2004 (unaudited):


	Expected Maturity Date or Transaction Date														Fair Value
Fixed Purchased Put Option Contracts:	2004		2005		2006		2007		2008		Thereafter		Total/ Average		March 31, 2004			December 31, 2003
(U.S.$ Denominated)															U.S.$ (000)
Ounces (000)		150		205		100		20		—		—		475	$	(11,966	)	$	(11,758	)
Average price	$	292	$	292	$	338	$	397	$	—	$	—	$	306

Note: Fixed purchased put option contracts provide the right, but not the obligation, to sell a specified number of ounces at a specified strike price and are accounted for as cash flow hedges.

Price-Capped Sales Contracts

In September 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 fair value of the forward sales contracts of $53.8 million was recorded as Deferred revenue from sale of future production and will be included in sales revenue as delivery occurs in 2005 through 2011. The forward sales contracts are accounted for as normal sales contracts under SFAS 133.

Newmont had the following price-capped forward sales contracts outstanding at March 31, 2004 (unaudited):


	Expected Maturity Date or Transaction Date
Price-Capped Contracts:	2004		2005		2006		2007		2008		Thereafter		Total/ Average
(U.S.$ Denominated)
Ounces (000)		—		500		—		—		1,000		850		2,350
Average price	$	—	$	350	$	—	$	—	$	384	$	384	$	377

NEWMONT MINING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

Silver Commodity Contracts

Newmont had the following silver fixed forward contracts outstanding at March 31, 2004 (unaudited):


	Expected Maturity Date or Transaction Date														Fair Value
Silver Forward Contracts:	2004		2005		2006		2007		2008		Thereafter		Total/ Average		March 31, 2004			December 31, 2003
(U.S.$ Denominated)															U.S.$ (000)
Ounces (000)		1,200		1,200		50		—		—		—		2,450	$	(4,872	)	$	(1,000	)
Average price	$	5.79	$	6.01	$	6.50	$	—	$	—	$	—	$	5.91

Copper Commodity Contracts

PTNNT had no copper commodity contracts outstanding as of March 31, 2004, although a position existed at December 31, 2003. The fair value of those contracts was negative $5.0 million at December 31, 2003.

Diesel Commodity Contracts

PTNNT had the following diesel forward purchase contracts outstanding at March 31, 2004 (unaudited):


	Expected Maturity Date or Transaction Date														Fair Value
Diesel Forward Purchase Contracts:	2004		2005		2006		2007		2008		Thereafter		Total/ Average		March 31, 2004		December 31, 2003
(U.S.$ Denominated)															U.S.$ (000)
Barrels (000)		80		50		—		—		—		—		130	$	911	$	(637	)
Average price	$	27.90	$	27.28	$	—	$	—	$	—	$	—	$	27.66

Indonesia Rupiah Contracts

PTNNT had the following Indonesia Rupiah forward purchase contracts outstanding at March 31, 2004 (unaudited):


	Expected Maturity Date or Transaction Date							Fair Value
U.S.$/IDR Forward Purchase Contracts:	2004	2005	2006	2007	2008	Thereafter	Total/ Average	March 31, 2004		December 31, 2003
(U.S.$ Denominated)								U.S.$ (000)
U.S.$ hedged (millions)	44	12	—	—	—	—	56	$	137	$	—
Average hedge rate (IDR/USD)	8,847	8,960	—	—	—	—	8,871

Note:

Prices for IDR forward purchase contracts have been translated at the exchange rate at March 31, 2004 of IDR 8,621 per $1.

Foreign Currency Contracts

Newmont has currency swap contracts outstanding to receive A$ and pay U.S.$. The contracts, which are currently undesignated, are accounted for on a mark-to-market basis with the change recorded in earnings.

NEWMONT MINING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

At March 31, 2004, Newmont had the following A$/U.S.$ foreign currency contracts outstanding (unaudited):


	Expected Maturity Date or Transaction Date														Fair Value
A$/U.S.$ Currency Exchange Contracts:	2004		2005		2006		2007		2008		Thereafter		Total/ Average		March 31, 2004		December 31, 2003
															U.S.$ (000)
U.S.$ (millions)	$	42	$	31	$	—	$	—	$	—	$	—	$	73	$	9,040	$	7,669
Average price (U.S.$ per A$1)	$	0.645	$	0.682	$	—	$	—	$	—	$	—	$	0.660

Note: Prices for contracts denominated in A$ have been translated at the exchange rate at March 31, 2004 of $0.76 per A$1.

Interest Rate Swap Contracts

During the last half of 2001, Newmont entered into contracts to hedge the interest rate risk exposure on a portion of its $275 million 8.625% notes and its $200 million 8.375% debentures. Under these contracts, Newmont receives fixed-rate interest payments at 8.625% and 8.375% and pays floating-rate interest amounts based on periodic LIBOR settings plus a spread, ranging from 2.60% to 4.25%. The notional principal amount of these transactions (representing the amount of principal tied to floating interest rate exposure) was $200 million at March 31, 2004 and December 31, 2003. Half of these contracts expire in July 2005 and half expire in May 2011. For the three months ended March 31, 2004 and 2003, these transactions resulted in a reduction in interest expense of $1.1 million and $1.7 million, respectively. The fair value of the ineffective portions accounted for as derivative assets was $5.3 million at March 31, 2004 and December 31, 2003 and the fair value of the effective portions accounted for as fair value hedges were $10.9 million and $7.7 million at March 31, 2004 and December 31, 2003, respectively. Effective April 1, 2004, the Company re-designated $150 million of these contracts as new fair value hedges against portions of the 8.625% notes and the 8.375% debentures, which will reduce the ineffective portion of these contracts going forward.

(15) STATEMENTS OF COMPREHENSIVE INCOME


	Three Months Ended March 31,
	2004			2003
	(unaudited, in thousands)
Comprehensive income:
Net income	$	86,681		$	117,255
Other comprehensive (loss) income, net of tax:
Unrealized loss on marketable equity securities, net of tax of $884 and $14,995, respectively		(5,016	)		(39,841	)
Foreign currency translation adjustments		(1,513	)		5,963
Changes in fair value of cash flow hedge instruments, net of tax of $3,738 and $(32,103), respectively		(3,097	)		74,907

Total other comprehensive (loss) income, net of tax		(9,626	)		41,029

Comprehensive income	$	77,055		$	158,284

NEWMONT MINING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)


	At March 31, 2004			At December 31, 2003
	(unaudited, in thousands)
Accumulated other comprehensive income:
Unrealized (loss) gain on marketable equity securities, net of tax of $1,022 and $138, respectively	$	(4,549	)	$	467
Minimum pension liability adjustments, net of tax of $16,291 for each period		(30,274	)		(30,274	)
Foreign currency translation adjustments		(1,360	)		153
Changes in fair value of cash flow hedge instruments, net of tax of $(17,537) and $(21,275), respectively		49,384			52,481

Accumulated other comprehensive income	$	13,201		$	22,827

(16) DIVIDENDS, INTEREST INCOME, FOREIGN CURRENCY EXCHANGE AND OTHER INCOME


	Three Months Ended March 31,
	2004			2003
	(unaudited, in thousands)
Interest income	$	4,186		$	2,205
Foreign currency exchange (losses) gains		(463	)		24,706
Gain on sale of property, plant, equipment and other assets		8,852			1,273
Other		1,300			2,779

Total	$	13,875		$	30,963

(17) EARNINGS PER SHARE

The difference between the basic weighted-average common shares outstanding and the diluted weighted-average common shares outstanding at March 31, 2004 and 2003 is due to the assumed conversion of employee stock options. Employee stock options with exercise prices greater than the average market price were excluded from the March 31, 2004 and 2003 diluted weighted-average common shares because the effect would have been anti-dilutive. Employee stock options are potentially outstanding for up to ten years.

(18) SEGMENT INFORMATION

Newmont made certain reclassifications in its segment presentation at and for the three months ended March 31, 2003 to conform to changes in presentation reflected in internal management reporting at and for the three months ended March 31, 2004.

The primary reclassifications for the three months ended March 31, 2003 are as follows: (i) the amortization to Sales, net of Accumulated other comprehensive income related to closed out derivative positions that were previously classified as cash flow hedges has been reclassified from Other Australia to Corporate and Other; (ii) interest expense not specifically related to project financing has been reclassified from Other Australia to Corporate and Other; (iii) research and development expense was reclassified from various segments to Corporate and Other; and (iv) exploration expense related to certain advanced development sites was reclassified from various segments to Other International Operations. The Company also made other insignificant reclassifications between segments for the three months ended March 31, 2003 to conform to 2004 presentation.

NEWMONT MINING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

The effects of all reclassifications for the three months ended March 31, 2003 on Pre-tax income (loss) before minority interest, equity income (loss), impairment of affiliates and cumulative effect were increases of $0.1 million, $0.1 million, $2.8 million, $1.4 million and $17.9 million for Nevada, Yanacocha, Other Australia, Exploration and Merchant Banking, respectively, and decreases of $0.3 million, $3.6 million and $18.4 million for Other North America, Other International Operations and Corporate and Other, respectively.

Newmont also made certain reclassifications in Total assets by segment at March 31, 2003. The primary reclassifications were as follows: (i) deferred income tax assets were reclassified from all segments to Corporate and Other; (ii) the investment in AGR was reclassified from Other Australia to Merchant Banking; (iii) the investment in AMC was reclassified from Other Australia to Merchant Banking: (iv) all marketable securities were reclassified from Other Australia to Merchant Banking; and (v) the assets of certain development sites were reclassified from various segments to Other International Operations. The Company also made other insignificant reclassifications in Total assets at March 31, 2003 to conform to 2004 presentation. The effects of all reclassifications on Total assets at March 31, 2003 were increases of $0.1 million, $0.1 million, $115.3 million, $18.8 million and $300.7 million for Other North America, Other South America, Other International, Exploration and Corporate and Other, respectively, and decreases of $2.5 million, $15.9 million, $406.0 million, $5.1 million and $5.5 million for Nevada, Yanacocha, Other Australia, Pajingo and Merchant Banking, respectively.

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

Three Months Ended March 31, 2004

(Unaudited, in millions)


	North America								South America							Australia
	Nevada			Other North America		Total North America			Yanacocha		Other South America			Total South America		Pajingo		Other Australia			Total Australia
Sales, net	$	270.2		$	36.5	$	306.7		$	326.4	$	3.4		$	329.8	$	31.0	$	183.6		$	214.6
Royalties	$	—		$	—	$	—		$	—	$	—		$	—	$	—	$	—		$	—
Interest income	$	—		$	—	$	—		$	0.3	$	—		$	0.3	$	0.1	$	0.4		$	0.5
Interest expense	$	—		$	—	$	—		$	0.3	$	—		$	0.3	$	—	$	––		$	––
Exploration, research and development	$	2.3		$	—	$	2.3		$	1.0	$	0.6		$	1.6	$	1.0	$	1.0		$	2.0
Depreciation, depletion and amortization	$	35.1		$	6.3	$	41.4		$	54.3	$	1.1		$	55.4	$	9.1	$	27.1		$	36.2
Pre-tax income (loss) before minority interest, equity income, impairment of affiliates and cumulative effect	$	41.4		$	8.6	$	50.0		$	157.9	$	(1.3	)	$	156.6	$	6.4	$	32.4		$	38.8
Equity income of affiliates	$	—		$	—	$	—		$	—	$	—		$	—	$	—	$	––		$	––
Amortization of deferred stripping, net	$	(20.2	)	$	—	$	(20.2	)	$	—	$	—		$	—	$	—	$	(1.1	)	$	(1.1	)
Cumulative effect of a change in accounting principle	$	—		$	—	$	—		$	—	$	—		$	—	$	—	$	—		$	—
Capital expenditures (as restated – see Note 25)	$	28.4		$	1.9	$	30.3		$	45.0	$	0.2		$	45.2	$	3.3	$	34.2		$	37.5
Deferred stripping costs	$	82.5		$	6.7	$	89.2		$	—	$	—		$	—	$	—	$	14.2		$	14.2
Total assets	$	1,489.5		$	94.1	$	1,583.6		$	1,263.7	$	17.3		$	1,281.0	$	121.9	$	1,084.1		$	1,206.0

NEWMONT MINING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)


	Zarafshan- Newmont, Uzbekistan		Other International Operations			Batu Hijau			Golden Grove			Exploration			Merchant Banking		Corporate and Other			Consolidated
Sales, net	$	22.8	$	23.1		$	207.6		$	15.2		$	—		$	—	$	2.5		$	1,122.3
Royalties	$	—	$	—		$	—		$	—		$	—		$	13.2	$	—		$	13.2
Interest income	$	—	$	0.1		$	0.4		$	—		$	—		$	—	$	2.9		$	4.2
Interest expense	$	0.2	$	—		$	11.0		$	—		$	—		$	—	$	14.0		$	25.5
Exploration, research and development	$	—	$	6.9		$	—		$	1.6		$	12.9		$	1.6	$	7.8		$	36.7
Depreciation, depletion and amortization	$	2.7	$	7.3		$	25.4		$	5.4		$	0.8		$	5.5	$	1.9		$	182.0
Pre-tax income (loss) before minority interest, equity income, impairment of affiliates and cumulative effect	$	11.6	$	(7.7	)	$	93.9		$	(0.9	)	$	(13.7	)	$	6.3	$	(36.9	)	$	298.0
Equity income of affiliates	$	—	$	—		$	—		$	—		$	—		$	0.6	$	0.9		$	1.5
Amortization of deferred stripping, net	$	—	$	(3.6	)	$	9.7		$	—		$	—		$	—	$	—		$	(15.2	)
Cumulative effect of a change in accounting principle	$	—	$	—		$	(83.8	)	$	—		$	—		$	—	$	36.7		$	(47.1	)
Capital expenditures (as restated – see Note 25)	$	3.4	$	11.4		$	20.2		$	7.8		$	0.1		$	2.2	$	8.2		$	166.3
Deferred stripping costs	$	—	$	11.8		$	(77.0	)	$	—		$	—		$	—	$	—		$	38.2
Total assets	$	99.5	$	228.3		$	2,217.5		$	273.3		$	1,149.4		$	2,057.1	$	2,716.3		$	12,812.0

Three Months Ended March 31, 2003

(Unaudited, in millions)


	North America									South America									Australia
	Nevada			Other North America			Total North America			Yanacocha			Other South America			Total South America			Pajingo		Other Australia			Total Australia
Sales, net	$	221.1		$	40.0		$	261.1		$	229.5		$	20.7		$	250.2		$	25.8	$	122.8		$	148.6
Royalties	$	—		$	—		$	—		$	—		$	—		$	—		$	—	$	—		$	—
Gain on investments, net	$	—		$	—		$	—		$	––		$	—		$	—		$	—	$	—		$	—
Loss on extinguishment of debt	$	—		$	—		$	—		$	––		$	—		$	—		$	—	$	––		$	—
Interest income	$	—		$	—		$	—		$	0.4		$	—		$	0.4		$	—	$	1.3		$	1.3
Interest expense	$	—		$	—		$	—		$	1.4		$	—		$	1.4		$	—	$	—		$	—
Exploration, research and development	$	3.2		$	—		$	3.2		$	1.9		$	—		$	1.9		$	0.3	$	1.1		$	1.4
Depreciation, depletion and amortization	$	31.6		$	10.2		$	41.8		$	35.5		$	2.1		$	37.6		$	5.6	$	21.4		$	27.0
Pre-tax income (loss) before minority interest, equity income (loss), impairment of affiliates and cumulative effect	$	37.5		$	2.7		$	40.2		$	104.2		$	5.7		$	109.9		$	11.1	$	(0.7	)	$	10.4
Equity loss and impairment of Australian Magnesium Corporation	$	—		$	—		$	—		$	—		$	—		$	—		$	—	$	—		$	—
Equity income of affiliates	$	—		$	—		$	—		$	—		$	—		$	—		$	—	$	1.2		$	1.2
Amortization of deferred stripping, net	$	(6.6	)	$	(0.1	)	$	(6.7	)	$	—		$	—		$	—		$	—	$	(1.0	)	$	(1.0	)
Cumulative effect of a change in accounting principle	$	(14.4	)	$	(3.4	)	$	(17.8	)	$	(32.4	)	$	(0.2	)	$	(32.6	)	$	0.8	$	(3.6	)	$	(2.8	)
Capital expenditures (as restated – see Note 25)	$	22.2		$	0.4		$	22.6		$	35.3		$	0.5		$	35.8		$	1.7	$	9.1		$	10.8
Deferred stripping costs	$	43.9		$	6.5		$	50.4		$	—		$	—		$	—		$	—	$	10.9		$	10.9
Total assets	$	1,486.3		$	138.7		$	1,625.0		$	1,187.5		$	29.7		$	1,217.2		$	175.4	$	1,172.2		$	1,347.6

NEWMONT MINING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)


	Zarafshan- Newmont, Uzbekistan			Other International Operations			Total Gold			Base Metals			Exploration			Merchant Banking			Corporate and Other			Consolidated
Sales, net	$	21.2		$	31.5		$	712.6		$	19.4		$	—		$	—		$	2.0		$	734.0
Royalties	$	—		$	—		$	—		$	—		$	—		$	14.5		$	—		$	14.5
Gain on investments, net	$	—		$	—		$	—		$	—		$	—		$	85.3		$	—		$	85.3
Loss on extinguishment of debt	$	—		$	—		$	—		$	—		$	—		$	(19.5	)	$	—		$	(19.5	)
Interest income	$	—		$	—		$	1.7		$	—		$	—		$	0.1		$	0.4		$	2.2
Interest expense	$	0.2		$	—		$	1.6		$	—		$	—		$	—		$	28.3		$	29.9
Exploration, research and development	$	—		$	4.9		$	11.4		$	0.7		$	5.9		$	1.0		$	2.5		$	21.5
Depreciation, depletion and amortization	$	2.6		$	7.7		$	116.7		$	7.1		$	0.8		$	4.7		$	1.3		$	130.6
Pre-tax income (loss) before minority interest, equity income (loss), impairment of affiliates and cumulative effect	$	9.8		$	(1.4	)	$	168.9		$	(3.8	)	$	(6.7	)	$	91.4		$	5.5		$	255.3
Equity loss and impairment of Australian Magnesium Corporation	$	—		$	—		$	—		$	—		$	—		$	—		$	(11.7	)	$	(11.7	)
Equity income of affiliates	$	—		$	—		$	1.2		$	—		$	—		$	—		$	7.3		$	8.5
Amortization of deferred stripping, net	$	—		$	1.3		$	(6.4	)	$	—		$	—		$	—		$	—		$	(6.4	)
Cumulative effect of a change in accounting principle	$	(1.3	)	$	(3.2	)	$	(57.7	)	$	(0.2	)	$	—		$	—		$	23.4		$	(34.5	)
Capital expenditures (as restated – see Note 25)	$	0.5		$	7.1		$	76.8		$	2.0		$	0.2		$	—		$	3.7		$	82.7
Deferred stripping costs	$	—		$	0.5		$	61.8		$	—		$	—		$	—		$	—		$	61.8
Total assets	$	104.7		$	288.7		$	4,583.2		$	245.3		$	1,295.5		$	2,256.7		$	1,787.9		$	10,168.6

(19) PRO FORMA STOCK OPTION COMPENSATION EXPENSE

The Company applies the intrinsic value method in accordance with Accounting Principles Board Opinion No. 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 has been recognized for its stock options grants. Had compensation cost for the options been determined based on market value at grant dates as prescribed by SFAS No. 123, “Accounting for Stock Based Compensation,” the Company’s net income and net income per common share would have been the pro forma amounts indicated below (unaudited, in millions, except per share data):


	Three Months Ended March 31,
	2004			2003
Net income applicable to common shares
As reported	$	86.7		$	117.3
SFAS 123 expense		(2.3	)		(2.8	)

Pro forma	$	84.4		$	114.5

Net income per common share, basic and diluted
As reported	$	0.20		$	0.29
SFAS 123 expense		(0.01	)		(0.01	)

Pro forma	$	0.19		$	0.28

NEWMONT MINING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

(20) EMPLOYEE PENSION AND OTHER BENEFIT PLANS

The following table provides components of net periodic pension benefit cost for the indicated periods (unaudited, in thousands):


	Pension Benefits						Other Benefits
	For the Three Months Ended March 31,
	2004			2003			2004			2003
Components of net periodic pension benefit cost:
Service cost	$	2,786		$	2,347		$	911		$	745
Interest cost		4,415			4,130			1,058			938
Expected return on plan assets		(3,384	)		(3,016	)		—			—
Amortization of prior service cost		196			211			(140	)		(108	)
Amortization of loss (gain)		1,094			571			(14	)		(199	)
Amortization of net asset		(1	)		(1	)		—			—

Total net periodic pension benefit cost	$	5,106		$	4,242		$	1,815		$	1,376

For the pension plans, prior service costs are amortized on a straight-line basis over the average remaining service period of active participants. Gains and losses in excess of 10% of the greater of the benefit obligation or the market-related value of assets are amortized over the average remaining service period of active participants. Pension and postretirement benefits are accrued during an employee’s service to the Company.

NEWMONT MINING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)

(21) CONDENSED CONSOLIDATING FINANCIAL STATEMENTS


	Three Months Ended March 31, 2004
Consolidating Statement of Operations	Newmont Mining Corporation			Newmont USA			Other Subsidiaries			Eliminations			Newmont Mining Corporation Consolidated
	(unaudited, in millions)
Revenues
Sales—gold, net	$	—		$	721.5		$	213.2		$	—		$	934.7
Sales—base metals, net		—			172.4			15.2			—			187.6
Royalties		—			0.2			12.9			—			13.1

		—			894.1			241.3			—			1,135.4

Costs and expenses
Costs applicable to sales (exclusive of depreciation, depletion and amortization shown separately below)
Gold		—			366.1			138.6			(3.2	)		501.5
Base metals		—			64.1			8.9			—			73.0
Depreciation, depletion and amortization		—			133.6			48.4			—			182.0
Exploration, research and development		—			21.3			15.4			—			36.7
General and administrative		—			20.7			3.4			3.1			27.2
Other		—			3.2			2.8			—			6.0

		—			609.0			217.5			(0.1	)		826.4

Other income (expense)
Gain (loss) on derivative instruments, net		—			1.2			(0.7	)		—			0.5
Dividends, interest income, foreign currency exchange and other income (loss)—intercompany		23.1			(11.6	)		—			(11.5	)		—
Dividends, interest income, foreign currency exchange and other income (loss)		(0.2	)		14.9			(0.7	)		—			14.0
Interest expense—intercompany		23.4			—			(34.9	)		11.5			—
Interest expense, net of capitalized interest		(0.5	)		(22.8	)		(2.2	)		—			(25.5	)

		45.8			(18.3	)		(38.5	)		—			(11.0	)

Pre-tax income (loss) before minority interest, equity income, impairment of affiliates and cumulative effect of a change in accounting principle		45.8			266.8			(14.7	)		0.1			298.0
Income tax expense		(16.1	)		(64.5	)		(6.0	)		—			(86.6	)
Minority interest in (income) loss of subsidiaries		—			(80.1	)		0.2			0.8			(79.1	)
Equity income of affiliates		57.0			—			16.8			(72.3	)		1.5

Income before cumulative effect of a change in accounting principle		86.7			122.2			(3.7	)		(71.4	)		133.8
Cumulative effect of a change in accounting principle, net		—			(47.1	)		—			—			(47.1	)

Net income applicable to common shares	$	86.7		$	75.1		$	(3.7	)	$	(71.4	)	$	86.7

NEWMONT MINING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)


	Three Months Ended March 31, 2003
Consolidating Statement of Operations	Newmont Mining Corporation			Newmont USA			Other Subsidiaries			Eliminations			Newmont Mining Corporation Consolidated
	(unaudited, in millions)
Revenues
Sales—gold	$	—		$	557.7		$	156.9		$	—		$	714.6
Sales—base metals, net		—			—			19.4			—			19.4
Royalties		—			—			15.0			(0.5	)		14.5

		—			557.7			191.3			(0.5	)		748.5

Costs and expenses
Costs applicable to sales (exclusive of depreciation, depletion and amortization shown separately below)
Gold		—			292.0			107.6			(0.6	)		399.0
Base metals		—			—			15.4			—			15.4
Depreciation, depletion and amortization		—			87.5			43.1			—			130.6
Exploration, research and development		—			10.8			10.7			—			21.5
General and administrative		—			19.9			6.4			0.1			26.4
Other		—			24.6			5.1			(7.6	)		22.1

		—			434.8			188.3			(8.1	)		615.0

Other income (expense)
Gain on investments, net		—			—			92.9			(7.6	)		85.3
Gain on derivative instruments, net		—			—			55.0			—			55.0
Loss on extinguishment of debt		—			(14.3	)		(5.2	)		—			(19.5	)
Dividends, interest income, foreign currency exchange and other income (loss)—intercompany		5.0			4.2			3.8			(13.0	)		—
Dividends, interest income, foreign currency exchange and other income		24.9			2.8			3.3			—			31.0
Interest expense—intercompany		(2.2	)		(3.4	)		(7.4	)		13.0			—
Interest expense, net of capitalized interest		(0.5	)		(20.6	)		(8.8	)		—			(29.9	)

		27.2			(31.3	)		133.6			(7.6	)		121.9

Pre-tax income before minority interest, equity income (loss), impairment of affiliates and cumulative effect of a change in accounting principle		27.2			91.6			136.6			—			255.4
Income tax expense		(9.5	)		(20.9	)		(32.2	)		—			(62.6	)
Minority interest in (income) loss of subsidiaries		—			(39.0	)		(3.6	)		4.8			(37.8	)
Equity loss and impairment of Australian Magnesium Corporation		—			—			(11.7	)		—			(11.7	)
Equity income of affiliates		99.6			7.4			15.9			(114.4	)		8.5

Income before cumulative effect of a change in accounting principle		117.3			39.1			105.0			(109.6	)		151.8
Cumulative effect of a change in accounting principle, net		—			(31.5	)		(3.0	)		—			(34.5	)

Net income applicable to common shares	$	117.3		$	7.6		$	102.0		$	(109.6	)	$	117.3

NEWMONT MINING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)


	At March 31, 2004
Consolidating Balance Sheets	Newmont Mining Corporation		Newmont USA			Other Subsidiaries		Eliminations			Newmont Mining Corporation Consolidated
	(unaudited, in millions)
Assets
Cash and cash equivalents	$	—	$	1,448.3		$	100.3	$	—		$	1,548.6
Marketable securities and other short-term investments		—		4.0			265.2		—			269.2
Trade receivables		—		127.6			11.7		—			139.3
Accounts receivable		1,873.9		638.9			345.5		(2,782.6	)		75.7
Inventories		—		209.6			73.1		—			282.7
Stockpiles and ore on leach pads		—		203.7			44.5		—			248.2
Deferred stripping costs		—		55.0			23.7		—			78.7
Deferred income tax assets		—		160.2			21.9		—			182.1
Other current assets		0.6		71.0			59.0		—			130.6

Current assets		1,874.5		2,918.3			944.9		(2,782.6	)		2,955.1
Property, plant and mine development, net		—		3,455.6			462.2		—			3,917.8
Mineral interests and other intangible assets, net		—		237.5			1,120.3		—			1,357.8
Investments		—		—			24.4		—			24.4
Investments in subsidiaries		4,244.5		—			3,495.3		(7,739.8	)		—
Deferred stripping costs		—		34.2			2.3		—			36.5
Long-term stockpiles and ore on leach pads		—		467.6			23.3		—			490.9
Deferred income tax assets		6.8		494.8			265.2		—			766.8
Other long-term assets		1,027.7		683.6			89.4		(1,622.7	)		178.0
Goodwill		—		93.7			2,991.0		—			3,084.7

Total assets	$	7,153.5	$	8,385.3		$	9,418.3	$	(12,145.1	)	$	12,812.0

Liabilities
Current portion of long-term debt	$	—	$	248.5		$	132.4	$	—		$	380.9
Accounts payable		165.9		2,024.7			807.3		(2,781.8	)		216.1
Employee related benefits		—		88.5			26.2		—			114.7
Other current liabilities		43.3		303.5			103.0		28.1			477.9

Current liabilities		209.2		2,665.2			1,068.9		(2,753.7	)		1,189.6
Long-term debt		—		1,384.5			142.4		—			1,526.9
Reclamation and remediation liabilities		—		279.6			126.1		—			405.7
Deferred revenue from sale of future production		—		53.8			—		—			53.8
Deferred income tax liabilities		43.0		219.5			447.1		25.4			735.0
Employee related benefits		—		231.6			20.5		—			252.1
Advanced stripping costs		—		77.0			—		—			77.0
Other long-term liabilities		203.6		131.9			1,838.5		(1,816.5	)		357.5

Total liabilities		455.8		5,043.1			3,643.5		(4,544.8	)		4,597.6

Minority interest in subsidiaries		—		773.3			307.4		(338.9	)		741.8

Stockholders’ equity
Preferred stock		—		—			60.7		(60.7	)		—
Common stock		643.5		—			—		—			643.5
Additional paid-in capital		5,675.9		2,209.7			4,687.1		(6,122.1	)		6,450.6
Accumulated other comprehensive income (loss)		13.2		(46.6	)		13.1		33.5			13.2
Retained earnings		365.1		405.8			706.5		(1,112.1	)		365.3

Total stockholders’ equity		6,697.7		2,568.9			5,467.4		(7,261.4	)		7,472.6

Total liabilities and stockholders’ equity	$	7,153.5	$	8,385.3		$	9,418.3	$	(12,145.1	)	$	12,812.0

NEWMONT MINING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued

(Unaudited)


	At December 31, 2003
Consolidating Balance Sheets	Newmont Mining Corporation			Newmont USA		Other Subsidiaries			Eliminations			Newmont Mining Corporation Consolidated
	(unaudited, in millions)
Assets
Cash and cash equivalents	$	—		$	1,211.2	$	102.8		$	—		$	1,314.0
Marketable securities and other short-term investments		—			3.1		271.5			—			274.6
Trade receivables		—			6.4		13.7			—			20.1
Accounts receivable		1,791.0			328.4		310.6			(2,359.4	)		70.6
Inventories		—			156.0		69.7			—			225.7
Stockpiles and ore on leach pads		—			210.8		37.8			—			248.6
Deferred stripping costs		—			41.0		19.1			—			60.1
Deferred income tax assets		—			50.6		23.1			—			73.7
Other current assets		(122.9	)		53.0		(81.0	)		251.2			100.3

Current assets		1,668.1			2,060.5		767.3			(2,108.2	)		2,387.7
Property, plant and mine development, net		—			1,909.4		438.6			—			2,348.0
Mineral interests and other intangible assets, net		—			237.0		1,142.1			—			1,379.1
Investments		—			709.7		892.8			(868.5	)		734.0
Investments in subsidiaries		4,154.1			—		2,608.7			(6,762.8	)		—
Deferred stripping costs		—			28.0		2.3			—			30.3
Long-term stockpiles and ore on leach pads		—			284.3		21.5			—			305.8
Deferred income tax assets		6.8			482.2		263.4			—			752.4
Other long-term assets		1,313.6			586.9		221.1			(2,026.3	)		95.3
Goodwill		—			93.7		2,948.9			—			3,042.6

Total assets	$	7,142.6		$	6,391.7	$	9,306.7		$	(11,765.8	)	$	11,075.2

Liabilities
Current portion of long-term debt	$	—		$	59.9	$	131.0		$	—		$	190.9
Accounts payable		129.5			1,643.0		756.4			(2,365.7	)		163.2
Employee related benefits		—			107.7		28.6			—			136.3
Other current liabilities		27.2			226.9		115.8			(1.3	)		368.6