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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
February 15, 2002
(Date of Report
Date of earliest event reported)
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NEWMONT MINING CORPORATION
(Exact name of registrant as specified in its charter)
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Delaware 1-31240 84-1611629
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
1700 Lincoln Street
Denver, Colorado 80203
(Address of principal executive offices, including Zip Code)
(303) 863-7414
(Registrant's telephone number, including area code)
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(b) Pro Forma Financial Information.
UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION
On February 16, 2002, Newmont Mining Corporation ("Newmont") completed the
acquisition of Franco-Nevada Mining Corporation Limited ("Franco-Nevada")
pursuant to a Plan of Arrangement. On February 20, 2002, Newmont gained control
of Normandy Mining Limited ("Normandy") through an off-market bid for all of the
ordinary shares in the capital of Normandy. On February 26, 2002, when Newmont's
off-market bid for Normandy expired, Newmont had a relevant interest in more
than 96% of Normandy's outstanding shares. Newmont exercised its rights to
acquire the remaining shares of Normandy in April 2002. The unaudited Pro Forma
Combined Condensed Statement of Operations has been prepared assuming that
Newmont acquired 100% of both Franco-Nevada and Normandy effective January 1,
2002.
The unaudited pro forma financial information contained herein has been
prepared to assist you in your analysis of the financial effects of the
acquisitions of Normandy and Franco-Nevada (the "Transaction"). We derived this
information for each of the respective companies as follows:
o Newmont's results of operations were derived from its audited
financial statements for the year ended December 31, 2002. These
audited financial statements are included in Newmont's Annual Report
on Form 10-K for the year ended December 31, 2002, filed March 27,
2003. The results of operations of Normandy and Franco-Nevada were
included with the consolidated results of operations of Newmont from
February 16, 2002 forward. Newmont's historical results of operations
were prepared using accounting principles generally accepted in the
United States ("US GAAP") and in United States Dollars ("US$" or "$").
Newmont's Consolidated Balance Sheet at December 31, 2002, presented
in the Annual Report on Form 10-K, already reflects the combination of
Newmont, Normandy and Franco-Nevada.
o Normandy's results of operations for the period January 1, 2002 to
February 15, 2002 were derived from unaudited financial information.
Normandy's results of operations for this period were prepared using
US GAAP and are in US$.
o Franco-Nevada's results of operations for the period January 1, 2002
to February 15, 2002 were derived from unaudited financial
information. Franco-Nevada's results of operations for this period
were prepared using US GAAP and are in US$.
The information contained herein is summarized and you should read it in
conjunction with the historical financial statements and related notes contained
in the annual reports and other information that Newmont has filed with the
Securities and Exchange Commission, the Australian Stock Exchange Limited and
various securities commissions and similar authorities in Canada, respectively.
The Unaudited Pro Forma Combined Condensed Statement of Operations for the
year ended December 31, 2002 gives effect to the Transaction as if it had
occurred on January 1, 2002.
The Unaudited Pro Forma Combined Condensed Statement of Operations is for
illustrative purposes only. The financial results may have been different had
the companies always been combined. You should not rely on the Unaudited Pro
Forma Combined Condensed Statement of Operations as being indicative of the
historical results that would have been achieved had the Transaction occurred in
the past or the future financial results that the combined company will achieve
after the Transaction.
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NEWMONT MINING CORPORATION
ACQUISITION OF 100% OF NORMANDY MINING LIMITED
AND 100% OF FRANCO-NEVADA MINING CORPORATION LIMITED
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2002
(In millions of United States dollars, except per share data)
January 1, 2002 to February 15, 2002
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Newmont,
Normandy and
Acquisition Franco-Nevada
Newmont Normandy Franco-Nevada Adjustments Combined
---------------- ------------- ------------- ---------------- ---------------
Sales and other income ..................... $ 2,745.0 $ 111.4 $ 65.9 $ (18.6)(2a) $ 2,903.7
Costs and Expenses
Costs applicable to sales ............. 1,571.9 70.5 -- (0.5)(2b) 1,641.9
Depreciation, depletion and
amortization ........................... 505.6 20.9 1.0 6.7 (2c) 534.2
Interest, net of capitalized interest . 129.6 4.2 -- 1.1 (2d) 134.9
Other ................................. 281.8 (14.1) 9.6 -- 277.3
-------------- ----------- ----------- ----------- -------------
2,488.9 81.5 10.6 7.3 2,588.3
-------------- ----------- ----------- ----------- -------------
Operating income (loss) ................... 256.1 29.9 55.3 (25.9) 315.4
Loss on derivative instruments ........... (39.8) (249.3) -- -- (289.1)
-------------- ----------- ----------- ----------- -----------
Pre-tax income (loss) before minority interest,
equity income (loss) of affiliates and
cumulative effect of a change in accounting
principle ............................... 216.3 (219.4) 55.3 (25.9) 26.3
Income tax (expense) benefit .............. (19.9) 63.9 (14.6) 10.9 (2e) 40.3
Minority interest in (income) loss of
subsidiaries.............................. (97.4) 0.2 -- (1.4)(2f) (98.6)
Equity income (loss) of affiliates ........ 51.4 (3.1) 1.9 0.6 (2g) 50.8
-------------- ----------- ----------- --------- -------------
Net income (loss) before cumulative effect
of a change in accounting principle ..... 150.4 (158.4) 42.6 (15.8) 18.8
Preferred stock dividends ................. (3.7) -- -- -- (3.7)
--------------- ----------- ----------- ---------- --------------
Net income (loss) applicable to common
shares before cumulative effect of a
change in accounting principle .......... 146.7 (158.4) 42.6 (15.8) 15.1
============== ---------- ----------- ----------- ===========
Net income before cumulative effect of a
change in accounting principle per common
share, basic ............................ $ 0.40 $ 0.04
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Net income before cumulative effect of a
change in accounting principle per common
share, diluted ........................... $ 0.39 $ 0.04
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Basic weighted average common shares
outstanding (in millions) ............... 370.9 27.8 (2h) 398.7
============== ========= ===========
Diluted weighted average common shares
outstanding (in millions) ............... 373.0 27.6 (2h) 400.6
=============== =========== =============
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Note 1--Basis of Presentation
The Pro Forma presentation reflects the acquisitions of Normandy and
Franco-Nevada as purchases for accounting purposes. Newmont issued approximately
86.5 million shares of common stock to stockholders of Normandy and
approximately 110.5 million shares of common stock (including exchangeable
shares of a subsidiary that are exchangeable at any time into Newmont common
shares on a one-for-one basis) to the stockholders of Franco-Nevada. For
accounting purposes only, the shares issued to Normandy stockholders include the
Newmont stock applicable to the 19.8% of Normandy held by Franco-Nevada. The
shares issued to Franco-Nevada stockholders exclude the Newmont shares
applicable to its 19.8% holding in Normandy.
The accompanying Unaudited Pro Forma Combined Condensed Statement of
Operations for the year ended December 31, 2002 includes historical revenues and
expenses of Newmont, Normandy and Franco-Nevada for that year, adjusted to US
GAAP.
The Unaudited Pro Forma Combined Condensed Statement of Operations does not
include all information and notes required by US GAAP for complete financial
statements.
Newmont completed the required documentation, designation and effectiveness
assessments for certain derivative instruments acquired as part of the
acquisition of Normandy to qualify for hedge accounting under Statement of
Financial Accounting Standard ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities," on February 15, 2002. Accordingly, all
acquired derivatives were recorded at fair value, with the changes in fair value
recorded in income for the period January 1, 2002 to February 15, 2002 in the
Unaudited Pro Forma Combined Condensed Statement of Operations. A loss of $249.3
million associated with Normandy's derivative instruments was recorded during
this period. Subsequent to February 15, 2002, a significant portion of the
changes in fair value of Normandy's derivative instruments was recorded in Other
comprehensive income (loss) in accordance with the requirements of SFAS 133.
Note 2--Pro Forma Adjustments to Record the acquisition of 100% of Normandy
The following adjustments have been made to the Unaudited Pro Forma
Combined Condensed Statements of Operations for the year ended December 31,
2002:
a) Reverses the amortization of deferred hedging gains Normandy realized on
the early settlement of derivative instruments prior to adopting SFAS 133.
The gains were deferred under US GAAP and were being recognized as the
ounces of gold, to which the original contracts applied, were produced and
sold. The purchase price allocation reduced the deferred hedging gains to
zero since they had no fair value. Also includes the elimination of
inter-company royalty revenue recorded by Franco-Nevada related to Newmont
and Normandy mining properties.
b) Records the elimination of inter-company royalty costs recorded by Newmont
and Normandy mining properties relating to royalties held by Franco-Nevada.
Also records the impact of increasing the total expected mine reclamation
costs for certain Normandy properties to conform with Newmont policies. The
increase was recognized from the assumed acquisition date utilizing an
incremental method based on units of production.
c) Adjusts Depreciation, depletion and amortization to account for the
acquisition as if the Transaction had occurred January 1, 2002 in a manner
consistent with the policies of depreciation, depletion and amortization
utilized by Newmont. This adjustment results in an increase to depreciation
expense due to the step up in value of long-lived assets subject to
depreciation, depletion and amortization as part of the purchase price
allocation. Also adjusts for the amortization of Mineral interests and
other intangible assets under SFAS No. 142 "Goodwill and Other Intangible
Assets."
d) Records the impact of recording Normandy's long-term debt at fair value and
amortizing the resulting difference from face value as a component of
interest expense.
e) To account for the income tax (expense) benefit of the pro forma
adjustments resulting from the impact of the purchase accounting
adjustments.
f) To record the effects attributable to minority interest of the pro forma
adjustments.
g) To account for the effects of the difference between the carrying values of
equity investees at fair value and their underlying US GAAP net book
values. The majority of the impact relates to depletion of mineral reserves
in the underlying equity investees. Also eliminates Equity income (loss) of
affiliates recorded by Franco-Nevada related to its 19.8% interest in
Normandy.
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h) Adjusts the pro forma combined weighted-average basic and diluted shares
outstanding for the twelve-month period ended December 31, 2002 and assumes
that the shares issued for the acquisition of Normandy and Franco-Nevada
were issued on January 1, 2002.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NEWMONT MINING CORPORATION
(Registrant)
Date: April 22, 2002 By: /s/ BRUCE D. HANSEN
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Bruce D. Hansen
Senior Vice President and Chief
Financial Officer
(Principal Financial Officer)
By: /s/ DAVID W. PEAT
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David W. Peat
Vice President and Global Controller
(Principal Accounting Officer)
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