Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASE OF EQUITY SECURITIES

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Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASE OF EQUITY SECURITIES

Our common stock is listed and principally traded on the New York Stock Exchange under the symbol “NEM.” On February 11, 2021, there were 800,314,223 shares of Newmont’s common stock outstanding, which were held by approximately 8,000 stockholders of record.

During the period from October 1, 2020 to December 31, 2020, 3,217,422 shares of Newmont's equity securities registered pursuant to Section 12 of the Exchange Act of 1934, as amended, were purchased by the Company, or an affiliated purchaser.

(a)(b)(c)(d)
PeriodTotal Number of Shares Purchased**(1)**Average Price Paid Per Share**(1)**Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs**(2)**Maximum Dollar Value of Shares that may yet be Purchased under the Plans or Programs**(2)**
October 1, 2020 through October 31, 202063,041$48.16—$199,429,824
November 1, 2020 through November 30, 20203,147,189$63.643,133,513$—
December 1, 2020 through December 31, 20207,192$62.04—$—

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(1)The total number of shares purchased (and the average price paid per share) reflects (i) shares purchased pursuant to the repurchase program described in (2) below and (ii) shares delivered to the Company from stock awards held by employees upon vesting for the purpose of covering the recipients’ tax withholding obligations, totaling 63,041 shares, 13,676 shares and 7,192 shares for the fiscal months of October, November and December 2020, respectively.

(2)The Company’s Board of Directors previously authorized a stock repurchase program, under which the Company was authorized to repurchase shares of outstanding common stock, provided that the aggregate value of shares did not exceed $1 billion. Such program expired on December 31, 2020. The Company repurchased 11,790,190 shares in the fourth quarter of 2019 and 10,270,336 shares during 2020 under such program. In January 2021, the Company announced that the Board of Directors authorized a similar program to repurchase shares of outstanding common stock to offset the dilutive impact of employee stock award vesting and to provide leading returns to shareholders, provided that the aggregate value of shares of common stock repurchased under the new program does not exceed $1 billion, and such program will expire on July 15, 2022. The extent to which the Company repurchases its shares, and the timing of such repurchases, will depend upon a variety of factors, including trading volume, market conditions, legal requirements, business conditions and other factors. The repurchase program may be discontinued at any time, and the program does not obligate the Company to acquire any specific number of shares of its common stock.

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL CONDITION AND RESULTS OF OPERATIONS (dollars in millions, except per share, per ounce and per pound amounts)

The following Management’s Discussion and Analysis (“MD&A”) provides information that management believes is relevant to an assessment and understanding of the consolidated financial condition and results of operations of Newmont Corporation, a Delaware corporation, and its subsidiaries (collectively, “Newmont,” the “Company,” “our” and “we”). We use certain non-GAAP financial measures in our MD&A. For a detailed description of each of the non-GAAP measures used in this MD&A, please see the discussion under “Non-GAAP Financial Measures” within Part II, Item 7, Management's Discussion and Analysis. This item should be read in conjunction with our Consolidated Financial Statements and the notes thereto included in this annual report.

The following MD&A generally discusses our consolidated financial condition and results of operations for 2020 and 2019 and year-to-year comparisons between 2020 and 2019. Discussions of our consolidated financial condition and results of operations for 2018 and year-to-year comparisons between 2019 and 2018 are included in Item 7, Management’s Discussion and Analysis of Consolidated Financial Condition and Results of Operations, in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed with the Securities and Exchange Commission on February 20, 2020, are incorporated by reference into this MD&A.

Overview

Newmont is the world’s leading gold company and is the only gold company included in the S&P 500 Index and the Fortune 500 list of companies. We have been included in the Dow Jones Sustainability Index-World since 2007 and have adopted the World Gold Council’s Conflict-Free Gold Policy. In 2020, for the sixth year in a row, Newmont was ranked as the mining and metal sector’s top gold miner by the SAM S&P Corporate Sustainability Assessment. Newmont was ranked the top miner in June 2020 in 3BL Media’s 100 Best Corporate Citizens list which ranks the 1,000 largest publicly traded U.S. companies on environmental, social and governance ("ESG") transparency and performance. We are primarily engaged in the exploration for and acquisition of gold properties, some of which may contain copper, silver, lead, zinc or other metals. We have significant operations and/or assets in the United States (“U.S.”), Canada, Mexico, Dominican Republic, Peru, Suriname, Argentina, Chile, Australia and Ghana. Our goal is to create value and improve lives through sustainable and responsible mining.

During the first half of 2020, the COVID-19 outbreak escalated to a global pandemic, which has had varying impacts in the jurisdictions in which we operate. In response, the Company temporarily placed five sites into care and maintenance, including Musselwhite, Éléonore, Yanacocha and Cerro Negro in March 2020 and Peñasquito in April 2020. During the second quarter of 2020, we worked closely with local stakeholders to resume operations at all five mine sites. As of December 31, 2020, all sites were fully operational, with the exception of Cerro Negro that continues to progress its ramp up.

Refer to “2020 Results and Highlights,” "Health and Safety" within Part I, Item 1, Business and “Results of Consolidated Operations,” “Liquidity and Capital Resources,” “Non-GAAP Financial Measures” and “Accounting Developments” within Part II, Item 7, Management’s Discussion and Analysis for additional information about the impact of COVID-19 on our business and operations. For a discussion of COVID-19 related risks to the business, see Part I, Item 1A, Risk Factors.

On April 18, 2019 (the “acquisition date”), Newmont completed the business acquisition of Goldcorp, Inc. (“Goldcorp”), an Ontario corporation. The Company acquired all outstanding common shares of Goldcorp in a primarily stock transaction (the “Newmont Goldcorp transaction”) for total cash and non-cash consideration of $9,456. The financial information included in the following discussion and analysis of financial condition and results of operations during the period ended December 31, 2020, compared to the same periods in 2019, includes the results of operations acquired in the Newmont Goldcorp transaction since April 18, 2019. For further information, see Note 3 to the Consolidated Financial Statements.

On March 10, 2019, the Company entered into an implementation agreement with Barrick Gold Corporation (“Barrick”) to establish a joint venture (“Nevada JV Agreement”). On July 1, 2019 (the “effective date”), Newmont and Barrick consummated the Nevada JV Agreement and established Nevada Gold Mines LLC (“NGM”). As of the effective date, the Company contributed its Carlin, Phoenix, Twin Creeks and Long Canyon mines ("existing Nevada mining operations") and Barrick contributed certain of its Nevada mining operations and assets. Newmont and Barrick hold economic interests in the joint venture equal to 38.5% and 61.5%, respectively. Barrick acts as the operator of NGM with overall management responsibility and is subject to the supervision and direction of NGM’s Board of Managers. The Company accounts for its interest in NGM using the proportionate consolidation method, thereby recognizing its pro-rata share of the assets, liabilities and operations of NGM. The financial information included in the following discussion and analysis of financial condition and results of operations during the period ended December 31, 2020, compared to the same periods in 2019, includes the results of operations of NGM since July 1, 2019. For further information, see Note 32 to the Consolidated Financial Statements.

Asset Sales

Kalgoorlie

We entered into a binding agreement dated December 17, 2019, to sell our 50% interest in Kalgoorlie Consolidated Gold Mines (“Kalgoorlie”), included as part of the Australia segment, to Northern Star Resources Limited (“Northern Star”). The Company

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completed the sale on January 2, 2020. As the sale was completed on January 2, 2020, there are no results for Kalgoorlie for the year ended December 31, 2020 included herein.

Red Lake

We entered into a binding agreement dated November 25, 2019, to sell the Red Lake complex in Ontario, Canada, included as part of the Company’s North America segment, to Evolution Mining Limited (“Evolution”). The Company completed the sale on March 31, 2020. As the sale was completed on March 31, 2020, results for Red Lake for the year ended December 31, 2020 are included within the discussion below.

For further information on asset sales, see Note 10 to the Consolidated Financial Statements.

Consolidated Financial Results

The details of our Net income (loss) from continuing operations attributable to Newmont stockholders are set forth below:

Years Ended December 31,Increase (decrease)
20202019
Net income (loss) from continuing operations attributable to Newmont stockholders$2,666$2,877$(211)
Net income (loss) from continuing operations attributable to Newmont stockholders per common share, diluted$3.31$3.91$(0.60)
Years Ended December 31,Increase (decrease)
20192018
Net income (loss) from continuing operations attributable to Newmont stockholders$2,877$280$2,597
Net income (loss) from continuing operations attributable to Newmont stockholders per common share, diluted$3.91$0.53$3.38

In 2019, Net income (loss) from continuing operations attributable to Newmont stockholders was $2,877, primarily as a result of the noncash gain recognized on the formation of NGM of $2,390 (see Note 32 to the Consolidated Financial Statements). After adjusting for this gain, net income in 2020, increased $2,179 compared to the same period in 2019, primarily due to higher realized gold, copper and silver prices, gains on asset and investment sales due to the sales of Kalgoorlie, Continental Gold, Inc. ("Continental"), certain royalty interests and Red Lake, higher silver, lead and zinc sales volumes and higher equity income from affiliates due to a full year of activity following the Newmont Goldcorp transaction in 2019, lower Goldcorp and Nevada JV transaction costs and lower General and administrative expenses. These increases were partially offset by COVID-19 impacts including lower sales volumes primarily in South America and Care and maintenance costs due to certain sites experiencing reduced operations and other incremental costs in response to the pandemic, lower gold sales volumes due to the sale of Kalgoorlie and Red Lake during 2020, and higher depreciation and amortization expense from the formation of NGM and a full year of activity following the Newmont Goldcorp transaction in 2019. For discussion regarding variations in production volumes and unit cost metrics, see Results of Consolidated Operations below.

The details of our Sales are set forth below. See Note 5 to our Consolidated Financial Statements for additional information.

Years Ended December 31,Increase (decrease)Percent Change
20202019
Gold$10,350$9,049$1,30114%
Copper155210(55)(26)
Silver510253257102
Lead134854958
Zinc348143205143
$11,497$9,740$1,75718%

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Years Ended December 31,Increase (decrease)Percent Change (1)
20192018
Gold$9,049$6,950$2,09930%
Copper210303(93)(31)
Silver253—253N.M.
Lead85—85N.M.
Zinc143—143N.M.
$9,740$7,253$2,48734%

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(1)N.M. – Not meaningful

The following analysis summarizes consolidated sales for the year ended December 31, 2020:

Year Ended December 31, 2020
GoldCopperSilverLeadZinc
(ounces)(pounds)(ounces)(pounds)(pounds)
Consolidated sales:
Gross before provisional pricing and streaming impact$10,365$160$468$155$419
Provisional pricing mark-to-market54121(2)6
Silver streaming amortization——67——
Gross after provisional pricing and streaming impact10,419161556153425
Treatment and refining charges(69)(6)(46)(19)(77)
Net$10,350$155$510$134$348
Consolidated ounces (thousands)/ pounds (millions) sold5,8315628,596185407
Average realized price (per ounce/pound): (1)
Gross before provisional pricing and streaming impact$1,778$2.88$16.37$0.84$1.03
Provisional pricing mark-to-market90.010.74(0.01)0.01
Silver streaming amortization——2.34——
Gross after provisional pricing and streaming impact1,7872.8919.450.831.04
Treatment and refining charges(12)(0.11)(1.59)(0.11)(0.18)
Net$1,775$2.78$17.86$0.72$0.86

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(1)Per ounce/pound measures may not recalculate due to rounding.

The following analysis summarizes consolidated sales for the year ended December 31, 2019:

Year Ended December 31, 2019
GoldCopperSilverLeadZinc
(ounces)(pounds)(ounces)(pounds)(pounds)
Consolidated sales:
Gross before provisional pricing and streaming impact$9,063$220$218$97$187
Provisional pricing mark-to-market15(1)71—
Silver streaming amortization——37——
Gross after provisional pricing and streaming impact9,07821926298187
Treatment and refining charges(29)(9)(9)(13)(44)
Net$9,049$210$253$85$143
Consolidated ounces (thousands)/ pounds (millions) sold6,4658015,987108179
Average realized price (per ounce/pound): (1)
Gross before provisional pricing and streaming impact$1,402$2.76$13.57$0.90$1.05
Provisional pricing mark-to-market2(0.01)0.450.01—
Silver streaming amortization——2.31——
Gross after provisional pricing and streaming impact1,4042.7516.330.911.05
Treatment and refining charges(5)(0.12)(0.54)(0.12)(0.25)
Net$1,399$2.63$15.79$0.79$0.80

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(1)Per ounce/pounds measures may not recalculate due to rounding.

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The following analysis summarizes consolidated sales for the year ended December 31, 2018:

Year Ended December 31, 2018
GoldCopper
(ounces)(pounds)
Consolidated sales:
Gross before provisional pricing$6,982$323
Provisional pricing mark-to-market(2)(7)
Gross after provisional pricing6,980316
Treatment and refining charges(30)(13)
Net$6,950$303
Consolidated ounces (thousands)/ pounds (millions) sold5,516110
Average realized price (per ounce/pound): (1)
Gross before provisional pricing$1,266$2.94
Provisional pricing mark-to-market—(0.07)
Gross after provisional pricing1,2662.87
Treatment and refining charges(6)(0.13)
Net$1,260$2.74

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(1)Per ounce/pound measures may not recalculate due to rounding.

The change in consolidated sales is due to:

Years Ended December 31,
2020 vs. 2019
GoldCopperSilverLeadZinc
(ounces)(pounds)(ounces)(pounds)(pounds)
Increase (decrease) in consolidated ounces/pounds sold$(890)$(67)$205$70$239
Increase (decrease) in average realized price2,231989(15)(1)
Decrease (increase) in treatment and refining charges(40)3(37)(6)(33)
$1,301$(55)$257$49$205
Years Ended December 31,
2019 vs. 2018
GoldCopperSilverLeadZinc
(ounces)(pounds)(ounces)(pounds)(pounds)
Increase (decrease) in consolidated ounces/pounds sold$1,201$(87)$262$98$187
Increase (decrease) in average realized price897(10)———
Decrease (increase) in treatment and refining charges14(9)(13)(44)
$2,099$(93)$253$85$143

The increase in gold sales during the year ended December 31, 2020, compared to the same period in 2019, is primarily due to higher average realized gold prices and higher ounces sold at (i) Peñasquito due to the blockade reducing production for a portion of 2019, (ii) Musselwhite due to the fire halting operations in the prior year and (iii) Porcupine and Ahafo due to Borden and Ahafo Mill Expansion, respectively, achieving commercial production in the fourth quarter of 2019, partially offset by lower ounces sold due to certain operations being placed into care and maintenance or experiencing reduced operations in response to the COVID-19 pandemic, in addition to the sale of Red Lake and Kalgoorlie during 2020.

The decrease in copper sales during the year ended December 31, 2020, compared to the same period in 2019, is primarily due to copper being produced as a by-product at Phoenix upon the formation of NGM on July 1, 2019, compared to a co-product for the first six months of 2019 and lower ore grade milled at Boddington, partially offset by higher average realized copper prices and higher mill throughput at Boddington.

The increase in silver sales during the year ended December 31, 2020, compared to the same period in 2019, is primarily due to higher ounces sold at Peñasquito due to the blockade in the prior year reducing production and sales, a full year of operations in 2020 as compared to nine months in 2019 and higher average realized silver prices, partially offset by Peñasquito being placed into care and maintenance during a portion of 2020 due to the COVID-19 pandemic.

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The increase in lead sales during the year ended December 31, 2020, compared to the same period in 2019, is primarily due to higher pounds sold at Peñasquito due to the blockade in the prior year reducing production and a full year of operations in 2020 as compared to nine months in 2019, partially offset by lower average realized lead prices and Peñasquito being placed into care and maintenance during a portion of 2020 due to the COVID-19 pandemic.

The increase in zinc sales during the year ended December 31, 2020, compared to the same period in 2019, are primarily due to higher pounds sold at Peñasquito due to the blockade in the prior year reducing production and a full year of operations in 2020 as compared to nine months in 2019, partially offset by Peñasquito being placed into care and maintenance during a portion of 2020 due to the COVID-19 pandemic.

For further discussion regarding changes in volumes, see Results of Consolidated Operations below.

The details of our Costs applicable to sales are set forth below. See Note 4 to our Consolidated Financial Statements for additional information.

Years Ended December 31,Increase (decrease)Percent Change
20202019
Gold$4,408$4,663$(255)(5)%
Copper107145(38)(26)
Silver2011812011
Lead7777——
Zinc2211299271
$5,014$5,195$(181)(3)%
Years Ended December 31,Increase (decrease)Percent Change (1)
20192018
Gold$4,663$3,906$75719%
Copper145187(42)(22)
Silver181—181N.M.
Lead77—77N.M.
Zinc129—129N.M.
$5,195$4,093$1,10227%

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(1)N.M. – Not meaningful

The decrease in Costs applicable to sales for gold during the year ended December 31, 2020, compared to the same period in 2019, is primarily due to lower ounces sold due to certain operations being placed into care and maintenance or experiencing reduced operations in response to the COVID-19 pandemic, in addition to the sale of Red Lake and Kalgoorlie during 2020, partially offset by higher ounces sold at (i) Peñasquito due to the blockade reducing production for a portion of 2019, (ii) Musselwhite due to the fire halting operations in the prior year and (iii) Porcupine and Ahafo due to Borden and Ahafo Mill Expansion, respectively, achieving commercial production in the fourth quarter of 2019.

The decrease in Costs applicable to sales for copper during the year ended December 31, 2020, compared to the same period in 2019, is primarily due to copper being produced as a by-product at Phoenix upon the formation of NGM on July 1, 2019, compared to a co-product for the first six months of 2019, partially offset by higher mill maintenance costs at Boddington.

The increases in Costs applicable to sales for silver and zinc during the year ended December 31, 2020, compared to the same period in 2019, is primarily due to the blockade at Peñasquito in the prior year reducing production and a full year of operations in 2020 as compared to nine months in 2019, partially offset by Peñasquito being placed into care and maintenance during a portion of 2020 due to the COVID-19 pandemic.

Costs applicable to sales for lead remained consistent during the year ended December 31, 2020, compared to the same period in 2019.

For discussion regarding variations in operations, see Results of Consolidated Operations below.

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The details of our Depreciation and amortization are set forth below. See Note 4 to our Consolidated Financial Statements for additional information.

Years Ended December 31,Increase (decrease)Percent Change
20202019
Gold$1,942$1,723$21913%
Copper1931(12)(39)
Silver117665177
Lead45291655
Zinc1215566120
Other5656——
$2,300$1,960$34017%
Years Ended December 31,Increase (decrease)Percent Change (1)
20192018
Gold$1,723$1,142$58151%
Copper3139(8)(21)
Silver66—66N.M.
Lead29—29N.M.
Zinc55—55N.M.
Other56342265
$1,960$1,215$74561%

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(1)N.M. – Not meaningful

The increase in Depreciation and amortization for gold during the year ended December 31, 2020, compared to the same period in 2019, is primarily due to higher depreciation and amortization expense from the formation of NGM and a full year of activity following the Newmont Goldcorp transaction in 2019 and higher ounces sold at (i) Peñasquito due to the blockade reducing production for a portion of 2019, (ii) Musselwhite due to the fire halting operations in the prior year and (iii) Porcupine and Ahafo due to Borden and Ahafo Mill Expansion, respectively, achieving commercial production in the fourth quarter of 2019, partially offset by lower ounces sold due to certain operations being placed into care and maintenance or experiencing reduced operations in response to the COVID-19 pandemic, in addition to the sale of Red Lake and Kalgoorlie during 2020.

The decrease in Depreciation and amortization for copper for the year ended December 31, 2020, compared to the same period in 2019, is primarily due to copper being produced as a by-product at Phoenix upon the formation of NGM on July 1, 2019, compared to a co-product for the first six months of 2019.

The increases in Depreciation and amortization for silver, lead and zinc during the year ended December 31, 2020, compared to the same period in 2019, is primarily due to the increased production at Peñasquito due to the blockade in the prior year reducing production and a full year of operations in 2020 as compared to nine months in 2019, partially offset by Peñasquito being placed into care and maintenance during a portion of 2020 due to the COVID-19 pandemic.

For discussion regarding variations in operations, see Results of Consolidated Operations below.

Reclamation and remediation expense was $366, $280 and $163 in 2020, 2019 and 2018, respectively. Reclamation and remediation expense increased in 2020, compared to 2019, primarily due to higher reclamation adjustments at inactive Yanacocha sites related to increased lime consumption and water treatment costs, partially offset by lower remediation adjustments at Midnite mine, Dawn mill and Con mine sites.

Exploration expense was $187, $265 and $197 in 2020, 2019 and 2018, respectively. Exploration expense decreased in 2020, compared to 2019, primarily due to the temporary suspension of exploration drilling activities due to the COVID-19 pandemic.

Advanced projects, research and development expense includes development project management costs, feasibility studies and other project expenses that do not qualify for capitalization. Advanced projects, research and development expense was $122, $150 and $153 in 2020, 2019 and 2018, respectively. Advanced projects, research and development expense decreased in 2020, compared to 2019, primarily due to lower spend in Nevada following the formation of NGM and lower spend on various projects in Africa.

General and administrative expense was $269, $313 and $244 in 2020, 2019 and 2018, respectively. General and administrative expense decreased in 2020, compared to 2019, primarily due to the progression of integration activities for the Newmont Goldcorp transaction and other cost reduction efforts. General and administrative expense as a percentage of Sales was 2.3%, 3.2% and 3.4% for 2020, 2019 and 2018 respectively.

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Impairment of long-lived and other assets was $49, $5 and $369 in 2020, 2019 and 2018, respectively. Impairment of long-lived and other assets represents non-cash write-downs of various assets that are no longer in use.

Care and maintenance was $178, $— and $— in 2020, 2019 and 2018, respectively. Care and maintenance represents direct operating costs incurred at Musselwhite, Éléonore, Peñasquito, Yanacocha and Cerro Negro when the sites were temporarily placed into care and maintenance or operating at reduced levels as a result of the COVID-19 pandemic.

Other expense, net was $206, $295 and $29 in 2020, 2019 and 2018, respectively. Other expense, net decreased in 2020, compared to 2019, primarily due to decreases in costs associated with the Newmont Goldcorp transaction and the Nevada JV Agreement, partially offset by COVID-19 specific costs incurred as a result of the COVID-19 pandemic and higher settlement costs.

Gain on formation of Nevada Gold Mines was $2,390 in 2019 and represents the difference between the fair value of our 38.5% interest in NGM and the carrying value of the existing Nevada mining operations contributed on July 1, 2019.

Gain on asset and investment sales, net was $677, $30 and $100 in 2020, 2019 and 2018, respectively. The change in 2020, compared to 2019, is primarily due to the 2020 sales of Kalgoorlie in Australia, our investment in Continental and certain royalty interests. See Note 10 for additional information on asset sales and Note 20 for additional information on investment sales.

Other income, net was $(32), $297 and $55 in 2020, 2019 and 2018, respectively. Other income, net decreased in 2020, compared to 2019, primarily due to pension settlement charges, an other-than-temporary impairment of our investment in TMAC, debt extinguishment charges and increased foreign currency losses, partially offset by larger increases in the fair value of investments in the current year.

Interest expense, net was $308, $301 and $207 in 2020, 2019 and 2018, respectively. Capitalized interest totaled $24, $26, and $37 in each year, respectively. Interest expense, net increased in 2020, compared to 2019, primarily due to increased debt balances as a result of the Newmont Goldcorp transaction.

Income and mining tax expense (benefit) was $704, $832, and $386 in 2020, 2019 and 2018, respectively. The effective tax rate is driven by a number of factors and the comparability of our income tax expense for the reported periods will be primarily affected by (i) variations in our income before income taxes; (ii) geographic distribution of that income; (iii) impacts of the changes in tax law; (iv) valuation allowances on tax assets; (v) percentage depletion; (vi) fluctuation in the value of the United States dollar and foreign currencies; and (vii) the impact of specific transactions and assessments. As a result, the effective tax rate will fluctuate, sometimes significantly, year to year. This trend is expected to continue in future periods. See Note 12 to the Consolidated Financial Statements for further discussion of income taxes.

Year Ended
December 31, 2020December 31, 2019
Income (Loss)****(1)Effective Tax RateIncome Tax (Benefit) ProvisionFederal and State Cash Tax (Refund)Mining Cash Tax/(Refund)Income (Loss)****(1)Effective Tax RateIncome Tax (Benefit) ProvisionFederal and State Cash Tax (Refund)Mining Cash Tax/(Refund)
Nevada$70417%$118(2)$—$37$35113%$46(2)$—$25
CC&V1251013(3)——3752(3)——
Corporate & Other(198)85(168)(4)(152)—2,00814290(4)(4)—
Total US631(6)(37)(152)372,39614338(4)25
Australia1,36825339(5)937761138230(5)7656
Ghana52937195(6)196—42534144(6)148—
Suriname3392791(7)39—2682671(7)9—
Peru(195)(40)78(8)5164112953(8)1213
Canada(40)140(56)(9)9(6)(58)(103)60(9)(42)7
Mexico53227143(10)4010(105)11(12)(10)12611
Argentina(47)134(63)(11)——62(94)(58)(11)——
Other Foreign265414——53116——
Consolidated$3,14322%(12)$704$276$124$3,69323%(12)$832$325$112

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(1)Represents income (loss) from continuing operations by geographic location before income taxes and equity in affiliates. These amounts will not reconcile to the Segment Information for the reasons stated in Note 4.

(2)Includes deduction for percentage depletion of $(63) and $(49) and mining taxes net of associated federal benefit of $31 and $19, respectively. Nevada includes the Company’s 38.5% interest in NGM.

(3)Includes deduction for percentage depletion of $(14) and $(6), and valuation allowance of $— and $(9) respectively.

(4)Includes valuation allowance of $(86) and $(310), expense related to the amendment of the 2014 U.S. federal income tax return and related carryback claims of $— and $150, the expiration of capital loss carryover of $— and $34, and uncertain tax position reserve adjustment of $(2) and $34, respectively.

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(5)Includes benefit recognized on the sale of Kalgoorlie and related tax capital loss of $(353) and $—, mining taxes net of associated federal benefit of $73 and $48, valuation allowance of $205 and $1, and tax impacts from the exposure to fluctuations in foreign currency of $5 and $(2), respectively.

(6)Includes uncertain tax position reserve adjustment of $16 and $—, respectively.

(7)Includes valuation allowance of $1 and $1, respectively.

(8)Includes mining taxes net of associated federal benefit of $3 and $12, valuation allowance of $81 and $23, uncertain tax position reserve adjustment of $1 and $—, and tax impacts from the exposure to fluctuations in foreign currency of $22 and $—, and expense related to prior year tax disputes of $22 and $—,respectively.

(9)Includes mining tax net of associated benefit of $11 and $12, valuation allowance of $(9) and $(14), uncertain tax position reserve adjustment of $(51) and $6, and tax impacts from the exposure to fluctuations in foreign currency of $(1) and $7, respectively.

(10)Includes mining tax net of associated federal benefit of $33 and $—, valuation allowance of $(12) and $13, uncertain tax position reserve adjustment of $15 and $25, and tax impact from the exposure to fluctuations in foreign currency of $(58) and $(10), respectively.

(11)Includes uncertain tax position reserve adjustment of $— and $1, tax impacts from the exposure to fluctuations in foreign currency of $(65) and $(91), and impacts of legislative rate changes of $10 and $7, respectively.

(12)The consolidated effective income tax rate is a function of the combined effective tax rates for the jurisdictions in which we operate. Variations in the relative proportions of jurisdictional income could result in fluctuations to our combined effective income tax rate.

During the third quarter of 2020, the Nevada legislature passed three resolutions proposing amendments to the Nevada Constitution to modify provisions regarding the Net Proceeds of Minerals tax. The proposed amendments, if enacted, could significantly increase the mining taxes paid by NGM. These resolutions will require further approvals over a multi-year process which would ultimately include a statewide vote. NGM has engaged stakeholders to discuss the potential impact of the resolutions, the fiscal requirements of the State, and the economic contributions of the Nevada mining industry.

On March 18, 2020, the Families First Coronavirus Response Act ("FFCR Act"), and on March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") were each enacted in response to the COVID-19 pandemic. The FFCR Act and the CARES Act contain numerous income tax provisions such as the accelerated recoverability of alternative minimum tax credits and relaxed limitations on the deductibility of interest and on the use of net operating losses. The Company has analyzed this legislation and has determined that it has no effect on the Income and mining tax benefit (expense). However, due to the provision accelerating the recoverability of alternative minimum tax credits, the Company received a refund of all outstanding alternative minimum tax credits as of September 30, 2020.

In addition to the FFCR and CARES Acts, governments in the various jurisdictions in which the Company operates, passed legislation in response to the COVID-19 pandemic. The Company has evaluated these provisions and determined there is no impact on the Income and mining tax benefit (expense).

Equity income (loss) of affiliates was $189, $95 and $(33) in 2020, 2019 and 2018, respectively. Equity income (loss) of affiliates increased in 2020, compared to 2019, primarily due to income of $193 from the Pueblo Viejo mine, which was acquired as part of the Newmont Goldcorp transaction. Earnings before income taxes and depreciation and amortization related to the Pueblo Viejo Mine (“Pueblo Viejo EBITDA”) was $434, $245 and $— for the year ended December 31, 2020, 2019 and 2018, respectively. Pueblo Viejo EBITDA is a non-GAAP financial measure. See “Non-GAAP Financial Measures” within Part II, Item 7, Management's Discussion and Analysis. For additional information regarding our Equity income (loss) of affiliates, see Note 13.

Net income (loss) from discontinued operations was $163, $(72) and $61 in 2020, 2019 and 2018, respectively. The change from 2020 to 2019 is primarily due to the change in fair value of the Holt royalty obligation and option. Refer to Note 19 for additional information on the Holt royalty obligation and option. For additional information regarding our discontinued operations, see Note 14 to our Consolidated Financial Statements.

Net loss (income) attributable to noncontrolling interests from continuing operations $38, $(79) and $(39) in 2020, 2019 and 2018, respectively. The change is primarily due to net losses at Yanacocha in the current year compared to net income in the prior year.

Other comprehensive income (loss) was $49, $19 and $(11) in 2020, 2019 and 2018, respectively. The increase in 2020 from 2019 was primarily due to the change in pension and other post-retirement benefits.

Results of Consolidated Operations

Newmont has developed gold equivalent ounces (“GEO”) metrics to provide a comparable basis for analysis and understanding of our operations and performance related to copper, silver, lead and zinc. Gold equivalent ounces are calculated as pounds or ounces produced multiplied by the ratio of the other metals’ price to the gold price, using the metal prices in the table below:

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GoldCopperSilverLeadZinc
(ounce)(pound)(ounce)(pound)(pound)
2020 GEO Price$1,200$2.75$16.00$0.95$1.20
2019 GEO Price$1,200$2.75$15.00$0.90$1.05
2018 GEO Price$1,250$2.70$—$—$—

In response to the COVID-19 pandemic, we safely placed the Musselwhite, Éléonore, Yanacocha and Cerro Negro mine sites temporarily into care and maintenance during March 2020 and Peñasquito in April 2020. During the second quarter 2020, operations at all five mine sites resumed. As of December 31, 2020, all sites were fully operational, with the exception of Cerro Negro that continues to progress its ramp up.

For the year ended December 31, 2020, we recognized $178 of cash and $88 of non-cash care and maintenance costs included in Care and maintenance and Depreciation and amortization, respectively.

During this period, our other mines continued to operate with robust controls, including heightened levels of health screening and testing to protect both our workforce and the local communities in which we operate. We have adopted a risk-based approach to business travel, are providing flexible and remote working plans for employees and are maintaining effective testing, contact tracing procedures and “social distancing” protocols. For the year ended December 31, 2020, we incurred $92 of incremental direct costs related to our response to the COVID-19 pandemic, included in Other expense, net, as a result of these and other actions taken to protect our employees and operations, and to support the local communities in which we operate.

Gold or Other Metals ProducedCosts Applicable to Sales (1)Depreciation and Amortization (2)All-In Sustaining Costs (3)
202020192018202020192018202020192018202020192018
Years Ended December 31,
Gold(ounces in thousands)($ per ounce sold)($ per ounce sold)($ per ounce sold)
North America1,4571,036360$773$883$727$385$356$232$1,049$1,187$840
South America1,0171,3851,0498116466603582342011,100814804
Australia1,1651,4311,523715734709182164133964908845
Africa8511,065850713597645311295301890791794
Nevada1,3341,4751,697757748766434340240920935928
Total/Weighted-Average (4)5,8246,3925,479$756$721$708$343$275$213$1,045$966$909
Attributable to Newmont5,5436,0045,101
Gold equivalent ounces - other metals(ounces in thousands)($ per ounce sold)($ per ounce sold)($ per ounce sold)
North America (5)893443—$535$886$—$302$342$—$828$1,339$—
Australia (6)1281461668378037581521511381,080954898
Nevada (7)—3570—750845—243227—8941,035
Total/Weighted-Average1,021624236$571$858$782$284$291$162$858$1,222$935
Attributable gold from equity method investments (8)(ounces in thousands)
Pueblo Viejo (40%)362287—

____________________________

(1)Excludes Depreciation and amortization and Reclamation and remediation.

(2)For the year ended December 31, 2020, Depreciation and amortization includes $51 and $37 in care and maintenance costs at North America and South America, respectively.

(3)All-in sustaining costs is a non-GAAP financial measure. See “Non-GAAP Financial Measures” within Part II, Item 7, Management's Discussion and Analysis. For the year ended December 31, 2020, All-in sustaining costs includes $92 and $86 in care and maintenance costs recorded in Care and maintenance at North America and South America, respectively.

(4)All-in sustaining costs and Depreciation and amortization include expense for other regional projects.

(5)For the year ended December 31, 2020, the Peñasquito mine in North America produced 27,801 thousand ounces of silver, 179 million pounds of lead and 381 million pounds of zinc. For the year ended December 31, 2019, the Peñasquito mine in North America produced 15,860 thousand ounces of silver, 108 million pounds of lead and 187 million pounds of zinc. The Peñasquito mine in North America was acquired during the second quarter of 2019 as part of the Newmont Goldcorp transaction.

(6)For the year ended December 31, 2020, 2019 and 2018, the Boddington mine in Australia produced 56 million, 64 million and 77 million pounds of copper, respectively.

(7)For the year ended December 31, 2019 and 2018, the Phoenix mine in Nevada produced 15 million and 32 million pounds of copper, respectively. The Phoenix mine was contributed to NGM, effective July 1, 2019, at which point copper became a by-product.

(8)Income and expenses of equity method investments are included in Equity income (loss) of affiliates. Refer to Note 13 to the Consolidated Financial Statements for further discussion of our equity method investments.

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2020 compared to 2019

Consolidated gold production decreased 9% primarily due to Yanacocha and Cerro Negro operations in South America being placed into care and maintenance and lower ore grade mined at Ahafo in Africa, in addition to the sale of Red Lake in North America and Kalgoorlie in Australia, partially offset by twelve months of operations at Porcupine and Peñasquito in North America and Cerro Negro in South America as compared to nine months in 2019, higher ore grade mined at Peñasquito in North America, in addition to Musselwhite in North America restarting processing activities in 2020, following the conveyor fire in March 2019 and Borden achieving commercial production in the fourth quarter of 2019.

Consolidated gold equivalent ounces – other metals production increased 64% primarily due to twelve months of operations in 2020 at Peñasquito in North America as compared to nine months in 2019 and the impact of the blockade in 2019, partially offset by the classification of copper as a by-product at Phoenix following the formation of NGM and lower ore grade milled at Boddington in Australia.

Costs applicable to sales per consolidated gold ounce increased 5% primarily due to lower ounces sold as a result of sites being placed on care and maintenance, lower ore grade mined at Yanacocha and Merian in South America, lower ore grade mined at Ahafo in Africa, partially offset by lower stockpile and leach pad inventory adjustments. Costs applicable to sales per consolidated gold equivalent ounce – other metals decreased 33% primarily due to higher gold equivalent ounces – other metals sold and the impact of the blockade in 2019 at Peñasquito in North America, in addition to the classification of copper as a by-product at Phoenix in Nevada following the formation of NGM.

Depreciation and amortization per consolidated gold ounce increased 25% primarily due to lower ounces sold as a result of sites being placed on care and maintenance, higher amortization rates from the formation of NGM and Borden, Ahafo Mill Expansion and Quecher Main achieving commercial production in the fourth quarter of 2019. Included in Depreciation and amortization is $88 relating to care and maintenance costs. Depreciation and amortization per consolidated gold equivalent ounce – other metals decreased 2% primarily due to higher gold equivalent ounces - other metals sold and the impact of the blockade in 2019, partially offset by care and maintenance cost at Peñasquito in North America.

All-in sustaining costs per consolidated gold ounce increased 8% primarily due to higher costs applicable to sales per gold ounce and care and maintenance costs. All-in sustaining costs per consolidated gold equivalent ounce – other metals decreased 30% primarily due to lower costs applicable to sales per gold equivalent ounce – other metals, partially offset by care and maintenance costs.

North America Operations

Gold or Other Metals ProducedCosts Applicable to Sales (1)Depreciation and Amortization (2)All-In Sustaining Costs (3)
202020192018202020192018202020192018202020192018
Years Ended December 31,
Gold(ounces in thousands)($ per ounce sold)($ per ounce sold)($ per ounce sold)
CC&V272322360$911$911$727$295$299$232$1,125$1,071$840
Red Lake (4)38113—1,0661,218—44448—1,1821,570—
Musselwhite1003—1,2062,248—6444,912—1,8388,174—
Porcupine319223—765786—341281—935935—
Éléonore202246—868809—529302—1,2481,013—
Peñasquito526129—560803—330301—8061,100—
Total/Weighted-Average (5)1,4571,036360$773$883$727$385$356$232$1,049$1,187$840
Gold equivalent ounces - other metals(ounces in thousands)($ per ounce sold)($ per ounce sold)($ per ounce sold)
Peñasquito (6)893443—$535$886—$302$342$—$828$1,339$—

____________________________

(1)Excludes Depreciation and amortization and Reclamation and remediation.

(2)For the year ended December 31, 2020, Depreciation and amortization includes $7, $16 and $28 in care and maintenance costs at Musselwhite, Éléonore and Peñasquito, respectively.

(3)All-in sustaining costs is a non-GAAP financial measure. See “Non-GAAP Financial Measures” within Part II, Item 7, Management's Discussion and Analysis. For the year ended December 31, 2020, All-in sustaining costs includes $28, $26 and $38 in care and maintenance costs recorded in Care and maintenance at Musselwhite, Éléonore and Peñasquito, respectively.

(4)The sale of the Red Lake complex to Evolution closed on March 31, 2020. Refer to Note 10 for more information on asset sales.

(5)All-in sustaining costs and Depreciation and amortization include expense for other regional projects.

(6)For the year ended December 31, 2020, Peñasquito produced 27,801 thousand ounces of silver, 179 million pounds of lead and 381 million pounds of zinc. For the year ended December 31, 2019, Peñasquito produced 15,860 thousand ounces of silver, 108 million pounds of lead and 187 million pounds of zinc. The Peñasquito mine was acquired during the second quarter of 2019 as part of the Newmont Goldcorp transaction.

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2020 compared to 2019

CC&V, USA. Gold production decreased 16% primarily driven by timing of leach recoveries and lower ore grades milled. Costs applicable to sales per gold ounce was in line with the prior year as lower ounces sold were offset by lower inventory adjustments. Depreciation and amortization per gold ounce decreased 1% primarily driven by lower inventory adjustments. All-in sustaining costs per gold ounce increased 5% primarily due to higher sustaining capital spend.

Musselwhite, Canada. Musselwhite was acquired during the second quarter of 2019 as part of the Newmont Goldcorp transaction. Underground mine development and rehabilitation of the underground conveyor following the fire in March 2019 continued in 2020. Processing activities resumed in February 2020, primarily from surface stockpiles. However, the ramp up of Musselwhite operations and the construction of the conveyor was temporarily halted and the operations were placed on care and maintenance on March 22, 2020 in response to the COVID-19 pandemic. While in care and maintenance essential activities to maintain infrastructure continued including environmental management, security and ground control. Milling activities at Musselwhite began ramping-up in June 2020 and replacement of the underground conveyor system was commissioned in December 2020. We recognized $28 of cash and $7 of non-cash care and maintenance costs included in Care and maintenance and Depreciation and amortization, respectively, at Musselwhite in 2020. Gold production increased significantly primarily driven by processing activities restarting in 2020 following the conveyor fire in March 2019, partially offset by the site being placed on care and maintenance. Costs applicable to sales per gold ounce decreased 46% primarily driven by higher gold ounces sold. Depreciation and amortization per gold ounce decreased 87% primarily driven by higher gold ounces sold, partially offset by the impact of the site being placed on care and maintenance. All-in sustaining costs per gold ounce decreased 78% primarily driven by higher gold ounces sold, partially offset by care and maintenance costs.

Porcupine, Canada. Porcupine was acquired during the second quarter of 2019 as part of the Newmont Goldcorp transaction. Gold production increased 43% primarily driven by twelve months of operations in 2020 as compared to nine months in 2019, in addition to Borden achieving commercial production in the fourth quarter of 2019. Costs applicable to sales per gold ounce decreased 3% primarily driven by higher gold ounces sold. Depreciation and amortization per gold ounce increased 21% primarily driven by Borden reaching commercial production in the fourth quarter of 2019, partially offset by higher ounces sold. All-in sustaining costs per gold ounce was in line with the prior year as lower costs applicable to sales per ounce was offset by higher advanced projects and sustaining capital spend.

Éléonore, Canada. Éléonore was acquired during the second quarter of 2019 as part of the Newmont Goldcorp transaction. On March 23, 2020, the Éléonore operations were temporarily halted as the operations were placed on care and maintenance due to the Quebec government’s restriction on non-essential travel in response to the COVID-19 pandemic. The Quebec government lifted restrictions on April 13, 2020 and we commenced engagement with the Cree First Nation Grand Council and the Cree Health Board to determine an acceptable path forward to protect its workforce and communities. While in care and maintenance essential activities to maintain infrastructure continued including environmental management, security and ground control. Éléonore began ramping-up operations and milling activities resumed in May 2020. We recognized $26 of cash and $16 of non-cash care and maintenance costs included in Care and maintenance and Depreciation and amortization, respectively, at Éléonore in 2020. Gold production decreased 18% primarily driven by the operations being placed into care and maintenance, partially offset by twelve months of operations in 2020 as compared to nine months in 2019. Costs applicable to sales per gold ounce increased 7% primarily driven by lower ore grade mined. Depreciation and amortization per gold ounce increased 75% primarily driven by the impact of the site being placed on care and maintenance and higher amortization rates from lower reserves. All-in sustaining costs per gold ounce increased 23% primarily driven by care and maintenance costs.

Peñasquito, Mexico. Peñasquito was acquired during the second quarter of 2019 as part of the Newmont Goldcorp transaction. The Peñasquito operations were temporarily halted on April 12, 2020 as the mine was placed on care and maintenance due to the Mexico federal government issuing a decree mandating the temporary suspension of all non-essential activities, including mining, in response to the COVID-19 pandemic. On May 18, 2020, production ramp-up activities began with a phased approach consistent with the Mexican government’s regulations following the designation of mining as an essential activity. Milling activities resumed in May 2020 and production commenced in June 2020, prior to which, the site implemented required hygiene protocols and mobilized key operations and maintenance teams for training. We recognized $38 of cash and $28 of non-cash care and maintenance costs included in Care and maintenance and Depreciation and amortization, respectively, at Peñasquito in 2020. Gold production increased 308% primarily driven by twelve months of operations in 2020 as compared to nine months in 2019, the impact of the blockade in 2019 and higher ore grade mined, partially offset by the site being placed on care and maintenance in the second quarter of 2020. Gold equivalent ounces – other metals production increased 102% primarily driven by twelve months of operations in 2020 as compared to nine months in 2019, the impact of the blockade in 2019, partially offset by the site being placed on care and maintenance in the second quarter of 2020. Costs applicable to sales per gold ounce decreased 30% primarily driven by higher gold ounces sold. Costs applicable to sales per gold equivalent ounce – other metals decreased 40% primarily driven by higher gold equivalent ounces - other metals sold. Depreciation and amortization per gold ounce increased 10% primarily driven by the impact of the site being placed on care and maintenance in the second quarter of 2020, partially offset by higher gold ounces sold. Depreciation and amortization per gold equivalent ounce – other metals decreased 12% primarily driven by higher gold equivalent - other metals sold, partially offset by the site being placed on care and maintenance in the second quarter of 2020. All-in sustaining costs per gold ounce decreased 27% primarily driven by lower costs applicable to sales per gold ounce, partially offset by care and maintenance costs and higher sustaining capital spend. All-in sustaining costs per gold equivalent ounce – other metals decreased 38% primarily driven by lower costs applicable to sales per gold equivalent ounce - other metals and lower sustaining capital spend, partially offset by care and maintenance costs.

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South America Operations

Gold or Other Metals ProducedCosts Applicable to Sales (1)Depreciation and Amortization (2)All-In Sustaining Costs (3)
202020192018202020192018202020192018202020192018
Years Ended December 31,(ounces in thousands)($ per ounce sold)($ per ounce sold)($ per ounce sold)
Yanacocha340527515$1,019$756$813$362$213$207$1,414$959$967
Merian461524534705565512219177167813689627
Cerro Negro216334—718603—606317—1,147753—
Total / Weighted Average (4)1,0171,3851,049$811$646$660$358$234$201$1,100$814$804
Yanacocha (48.65%)(166)(257)(244)
Merian (25.00%)(115)(131)(134)
Attributable to Newmont736997671
Attributable gold from equity method investments (5)(ounces in thousands)
Pueblo Viejo (40%)362287—

___________________________

(1)Excludes Depreciation and amortization and Reclamation and remediation.

(2)For the year ended December 31, 2020, Depreciation and amortization includes $7 and $30 in care and maintenance costs at Yanacocha and Cerro Negro, respectively.

(3)All-in sustaining costs is a non-GAAP financial measure. See “Non-GAAP Financial Measures” within Part II, Item 7, Management's Discussion and Analysis. For the year ended December 31, 2020, All-in sustaining costs includes $27, $56 and $3 in care and maintenance costs recorded in Care and maintenance at Yanacocha, Cerro Negro and Other South America, respectively.

(4)All-in sustaining costs and Depreciation and amortization include expense for other regional projects.

(5)Income and expenses of equity method investments are included in Equity income (loss) of affiliates. Refer to Note 13 to our Consolidated Financial Statements for further discussion of our equity method investments.

2020 compared to 2019

Yanacocha, Peru. On March 16, 2020 the Yanacocha operations were temporarily halted as the operations were placed on care and maintenance due to government travel restrictions in-country in response to the COVID-19 pandemic. While in care and maintenance, limited personnel remained on-site to perform essential work, including security, water treatment, environmental protection and gold production continued from leach pads. In May 2020, milling operations resumed following the confirmation that the Peru Economic reactivation plan allowed surface mining. We recognized $27 of cash and $7 of non-cash care and maintenance costs included in Care and maintenance and Depreciation and amortization, respectively, at Yanacocha in 2020. Gold production decreased 35% primarily due to lower mill throughput as a result of the site being placed on care and maintenance, in addition to lower ore grade milled as a result of lower ore grade mined and lower leach production driven by lower tons placed on the leach pad. Costs applicable to sales per gold ounce increased 35% primarily due to lower ore grade mined, higher strip ratio, higher gold-price driven royalties and higher leach pad inventory adjustments, partially offset by higher by-product credits from silver sales. Depreciation and amortization per gold ounce increased 70% primarily due to higher depreciation rates as a result of Quecher Main achieving commercial production in the fourth quarter of 2019 and the impact of the site being placed on care and maintenance. All-in sustaining costs per gold ounce increased 47% primarily due to higher costs applicable to sales per gold ounce, care and maintenance costs and higher sustaining capital spend.

Merian, Suriname. Gold production decreased 12% primarily due to lower ore grade milled as a result of lower ore grade mined, partially offset by higher mill throughput. Costs applicable to sales per gold ounce increased 25% primarily due to lower ore grade mined and higher gold price-driven royalties. Depreciation and amortization per gold ounce increased 24% primarily due to lower ounces sold as a result of lower ore grade mined. All-in sustaining costs per gold ounce increased 18% primarily due to higher costs applicable to sales per gold ounce, partially offset by lower sustaining capital spend.

Cerro Negro, Argentina. Cerro Negro was acquired during the second quarter of 2019 as part of the Newmont Goldcorp transaction. On March 20, 2020 the Cerro Negro operations were temporarily halted as the operations were placed on care and maintenance due to Argentina suspending all domestic flights and mass transportation in response to the COVID-19 pandemic. While in care and maintenance essential activities to maintain infrastructure continued including environmental management, security and ground control. In early May, the operations began implementing a safe restart plan, remobilizing its workforce and limited milling activities resumed. We recognized $56 of cash and $30 of non-cash care and maintenance costs included in Care and maintenance and Depreciation and amortization, respectively, at Cerro Negro in 2020. Gold production decreased 35% primarily driven by the operations being placed into care and maintenance, partially offset by twelve months of operations in 2020 as compared to nine months in 2019. Costs applicable to sales per gold ounce increased 19% primarily driven by lower ore grade mined and lower by-product credits from silver sales. Depreciation and amortization per gold ounce increased 91% primarily driven by the impact of the site being placed on

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care and maintenance and lower gold ounces sold. All-in sustaining costs per gold ounce increased 52% primarily driven by care and maintenance costs and higher costs applicable to sales per gold ounce.

Pueblo Viejo, Dominican Republic. Our equity method investment in Pueblo Viejo was acquired during the second quarter of 2019 as part of the Newmont Goldcorp transaction. Attributable gold production increased 26% primarily due to twelve months of operations in 2020 as compared to nine months in 2019. Refer to Note 13 to our Consolidated Financial Statements for further discussion of our equity method investments.

Australia Operations

Gold or Other Metals ProducedCosts Applicable to Sales (1)Depreciation and AmortizationAll-In Sustaining Costs (2)
202020192018202020192018202020192018202020192018
Years Ended December 31,
Gold(ounces in thousands)($ per ounce sold)($ per ounce sold)($ per ounce sold)
Boddington670703709$866$809$786$152$149$140$1,094$942$891
Tanami495500496511531589208192149745717763
Kalgoorlie (3)—228318—948721—11674—1,114813
Total/Weighted-Average (4)1,1651,4311,523$715$734$709$182$164$133$964$908$845
Gold equivalent ounces - other metals(ounces in thousands)($ per ounce sold)($ per ounce sold)($ per ounce sold)
Boddington (5)128146166$837$803$758$152$151$138$1,080$954$898

____________________________

(1)Excludes Depreciation and amortization and Reclamation and remediation.

(2)All-in sustaining costs is a non-GAAP financial measure. See “Non-GAAP Financial Measures” within Part II, Item 7, Management's Discussion and Analysis.

(3)The sale of our 50% interest in Kalgoorlie was completed on January 2, 2020. Refer to Note 10 for more information on asset sales.

(4)All-in sustaining costs and Depreciation and amortization include expense for other regional projects.

(5)For the year ended December 31, 2020, 2019 and 2018, Boddington produced 56 million, 64 million and 77 million pounds of copper, respectively.

2020 compared to 2019

Boddington, Australia. Gold production decreased 5% primarily due to lower ore grade milled as a result of lower ore grade mined, partially offset by higher mill throughput and higher recovery. Gold equivalent ounces – other metals production decreased 12% primarily due to lower ore grade milled as a result of lower ore grade mined, partially offset by higher mill throughput. Costs applicable to sales per gold ounce increased 7% primarily due to lower gold ounces sold, higher mill maintenance costs and higher co-product allocation of costs to gold, partially offset by lower diesel prices and no stockpile inventory adjustments. Costs applicable to sales per gold equivalent ounce – other metals increased 4% primarily due to lower gold equivalent ounces - other metals sold and higher mill maintenance costs, partially offset by lower diesel costs, no stockpile inventory adjustments and lower co-product allocation of costs to copper. Depreciation and amortization per gold ounce increased 2% primarily due to lower gold ounces sold and higher co-product allocation of costs to gold, partially offset by no stockpile inventory adjustments. Depreciation and amortization per gold equivalent ounce – other metals increased 1% primarily due to lower gold equivalent ounces - other metals sold, partially offset by lower co-product allocation of costs to copper and no stockpile inventory adjustments. All-in sustaining costs per gold ounce increased 16% primarily due to higher costs applicable to sales per gold ounce and higher sustaining capital spend. All-in sustaining costs per gold equivalent ounce – other metals increased 13% primarily due to higher sustaining capital spend and higher costs applicable to sales per gold-equivalent ounce – other metals.

Tanami, Australia. Gold production decreased 1% primarily due to lower ore grade milled as a result of lower ore grade mined, partially offset by higher mill throughput and higher recovery. Costs applicable to sales per gold ounce decreased 4% primarily due to lower power costs and lower underground maintenance costs, partially offset by higher gold-price driven royalties. Depreciation and amortization per gold ounce increased 8% primarily due to incremental depreciation from the Tanami Power Plant achieving commercial production in March 2019 coupled with lower gold ounces sold. All-in sustaining costs per gold ounce increased 4% primarily due to higher sustaining capital spend, partially offset by lower costs applicable to sales per gold ounce.

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Africa Operations

Gold or Other Metals ProducedCosts Applicable to Sales (1)Depreciation and AmortizationAll-In Sustaining Costs (2)
202020192018202020192018202020192018202020192018
Years Ended December 31,(ounces in thousands)($ per ounce sold)($ per ounce sold)($ per ounce sold)
Ahafo480643436$787$624$741$304$254$241$980$820$864
Akyem371422414621558546318356363757718705
Total / Weighted Average (3)8511,065850$713$597$645$311$295$301$890$791$794

____________________________

(1)Excludes Depreciation and amortization and Reclamation and remediation.

(2)All-in sustaining costs is a non-GAAP financial measure. See “Non-GAAP Financial Measures” within Part II, Item 7, Management's Discussion and Analysis.

(3)All-in sustaining costs and Depreciation and amortization include expense for other regional projects.

2020 compared to 2019

Ahafo, Ghana. Gold production decreased 25% primarily due to lower ore grade milled as a result of lower ore grade mined from the Subika pit, partially offset by higher throughput due to the Ahafo Mill Expansion project achieving commercial production in the fourth quarter of 2019. Costs applicable to sales per gold ounce increased 26% primarily due to lower ore grade mined and higher gold price-related royalties. Depreciation and amortization per gold ounce increased 20% primarily due to higher amortization from the Ahafo Mill Expansion, which achieved commercial production in the fourth quarter of 2019, and lower ounces sold. All-in sustaining costs per gold ounce increased 20% primarily due to higher costs applicable to sales per gold ounce, partially offset by lower sustaining capital spend.

Akyem, Ghana. Gold production decreased 12% primarily due to lower ore grade milled, partially offset by higher mill throughput. Costs applicable to sales per gold ounce increased 11% primarily due to lower ounces sold and higher gold price-related royalties, partially offset by no stockpile inventory adjustment. Depreciation and amortization per gold ounce decreased 11% primarily due to lower amortization rates due to a longer reserve life and no stockpile inventory adjustment, partially offset by lower ounces sold. All-in sustaining costs per gold ounce increased 5% primarily due to higher costs applicable to sales per gold ounce, partially offset by lower reclamation costs and sustaining capital spend.

Nevada Operations

Gold or Other Metals ProducedCosts Applicable to Sales (1)Depreciation and AmortizationAll-In Sustaining Costs (2)
202020192018202020192018202020192018202020192018
Years Ended December 31,
Gold(ounces in thousands)($ per ounce sold)($ per ounce sold)($ per ounce sold)
Nevada Gold Mines1,334710—$757$712$—$434$430$—$920$901$—
Carlin—404927—878843—261237—1,0761,027
Phoenix—96241—981854—281201—1,1491,043
Twin Creeks—169359—638668—171170—800820
Long Canyon—96170—376423—377447—466505
Total/Weighted-Average (3)1,3341,4751,697$757$748$766$434$340$240$920$935$928
Gold equivalent ounces - other metals(ounces in thousands)($ per ounce sold)($ per ounce sold)($ per ounce sold)
Phoenix (4)—3570$—$750$845$—$243$227$—$894$1,035

____________________________

(1)Excludes Depreciation and amortization and Reclamation and remediation.

(2)All-in sustaining costs is a non-GAAP financial measure. See “Non-GAAP Financial Measures” within Part II, Item 7, Management's Discussion and Analysis.

(3)All-in sustaining costs and Depreciation and amortization include expense for other regional projects.

(4)For the year ended December 31, 2019 and 2018, the Phoenix mine in Nevada produced 15 million and 32 million pounds of copper, respectively. The Phoenix mine site was contributed to NGM, effective July 1, 2019, at which point copper became a by-product.

2020 compared to 2019

Nevada Gold Mines. Attributable gold production at Nevada Gold Mines increased 88% primarily due to a full year of operations in 2020 as compared to six months of operations in 2019. Costs applicable to sales per gold ounce increased 6% primarily driven by the capitalization of pre-production stripping at Cortez in 2019 related to the Crossroads pit and lower ore grades processed at Turquoise Ridge in 2020, partially offset by higher ore grades processed at Long Canyon. Depreciation and amortization per gold

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ounce increased 1% primarily due to higher depreciation and amortization rates at Cortez, partially offset by updated asset useful lives at Carlin. All-in sustaining costs per gold ounce increased 2% primarily due to higher costs applicable to sales per gold ounce, partially offset by lower sustaining capital spend per gold ounce.

Carlin, USA. The Carlin mine site was included in the transaction with Barrick that closed on July 1, 2019 establishing the Nevada Gold Mines joint venture.

Phoenix, USA. The Phoenix mine site was included in the transaction with Barrick that closed on July 1, 2019 establishing the Nevada Gold Mines joint venture.

Twin Creeks, USA. The Twin Creeks mine site was included in the transaction with Barrick that closed on July 1, 2019 establishing the Nevada Gold Mines joint venture.

Long Canyon, USA. The Long Canyon mine site was included in the transaction with Barrick that closed on July 1, 2019 establishing the Nevada Gold Mines joint venture.

Foreign Currency Exchange Rates

Our foreign operations sell their gold, copper, silver, lead and zinc production based on U.S. dollar metal prices. Fluctuations in foreign currency exchange rates do not have a material impact on our revenue since gold, copper, silver, lead and zinc are sold throughout the world in U.S. dollars. Despite selling gold and silver in London, we have no exposure to the euro or the British pound.

Foreign currency exchange rates can increase or decrease profits to the extent costs are paid in foreign currencies, including the Australian dollar, the Canadian dollar, the Mexican peso, the Peruvian sol, the Argentine peso, the Surinamese dollar and the Ghanaian Cedi. Approximately 45%, 43% and 33% of Costs applicable to sales were paid in currencies other than the U.S. dollar in 2020, 2019 and 2018, respectively, including approximately 18% denominated in the Australian dollar, 11% denominated in the Canadian dollar, 10% denominated in the Mexican peso, 3% denominated in the Peruvian Sol, 2% denominated in the Argentine Peso, 1% denominated in the Surinamese Dollar and a nominal amount denominated in the Ghanaian Cedi in the current year. Variations in the local currency exchange rates in relation to the U.S. dollar at our foreign mining operations decreased Costs applicable to sales by $17 per ounce in 2020, compared to 2019, primarily in Argentina.

Our Cerro Negro mine, which was acquired as part of the Newmont Goldcorp transaction and is located in Argentina, is a U.S. dollar functional currency entity. Argentina has been considered a hyperinflationary environment with a cumulative inflation rate of over 100% for the last three years. On September 1, 2019, Argentina’s central bank enacted a number of foreign currency controls in an effort to stabilize the local currency, with additional controls enacted on May 29, 2020 (“currency controls”). These currency controls include conversion requirements of export proceeds to local currency, limits on exchanges to foreign currencies and the reintroduction of affidavits to verify foreign currency transactions comply with regulations. Since the currency controls were enacted, the Company is required to convert metal sales proceeds to the Argentine Peso within five business days from receipt of cash at Cerro Negro and obtain central bank approval for any dividends or distributions to the parent company. Additionally, the Company is required to pay foreign obligations using offshore funds prior to accessing the onshore foreign exchange market. While we have balances denominated in Argentine pesos that relate to accounts payable and employee-related liabilities and tax receivables and liabilities, the majority of Cerro Negro’s activity has historically been denominated in U.S. dollars. Additionally, a component of the deferred tax liability is carried in Argentine pesos, which is impacted by fluctuations in the Argentine peso exchange rate. Most recently, on September 16, 2020, Argentina’s central bank enacted a new resolution requiring companies to refinance, with at least a two year term, sixty percent of any debt maturing between October 15, 2020 and March 31, 2021. However, this resolution does not apply to intercompany debt and we do not hold any external debt at Cerro Negro. Therefore, this newly enacted resolution, as well as other previously enacted currency controls, are not expected to have a material impact on our financial statements.

Our Merian mine is located in the country of Suriname, which has experienced significant swings in inflation rates for the last three years. On March 24, 2020, Suriname's central bank enacted the Act Controlling Currency Transactions and Transactions Bureaus in an effort to stabilize the local currency (the "Act"), which was subsequently halted by an interim order and deemed unconstitutional by the Surinamese court. This Act includes a provision on the repatriation of export earnings and restrictions on imports; however, Newmont and the Republic of Suriname have a Mineral Agreement in place superseding these provisions. Therefore, we do not expect there to be a current or future impact to our operations or financial statements. Additionally, on September 21, 2020, the central bank of Suriname adopted a controlled floating rate system and concurrently announced a significant devaluation of the Surinamese dollar. While we have employee-related liabilities denominated in Surinamese dollars, which are impacted by this devaluation, the majority of Merian’s activity has historically been denominated in U.S. dollars. Therefore, the devaluation of the Surinamese dollar is not expected to have a material impact on our financial statements.

Liquidity and Capital Resources

Liquidity Overview

We have a disciplined cash allocation strategy of maintaining financial flexibility to execute our capital priorities and generate long-term value for our shareholders. Consistent with that strategy, we aim to self-fund development projects and make strategic

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partnerships focused on profitable growth, while reducing our debt and returning cash to stockholders through dividends and share repurchases.

During 2020, the COVID-19 pandemic has had a material impact on the global economy, the scale and duration of which remain uncertain. In an effort to protect the health and safety of our workforce, their families and neighboring communities in which we operate, we put five mine sites temporarily into care and maintenance during March and April 2020, while the remaining sites continued to operate. We worked closely with local stakeholders to resume operations at all five mine sites during the second quarter of 2020. As of December 31, 2020, all sites were fully operational, with the exception of Cerro Negro that continues to progress its ramp up.

Depending on the duration and extent of the impact of the COVID-19 pandemic, additional sites could be placed into care and maintenance; transportation industry disruptions could occur, including limitations on shipping produced metals; refineries or smelters could be temporarily closed; our supply chain could be disrupted; or we could incur credit related losses of certain financial assets, which could materially impact the Company’s results of operations, cash flows and financial condition. As of December 31, 2020, we believe our available liquidity allows us to manage the near-term impacts of the COVID-19 pandemic on our business.

In January 2021, the Company announced that the Board of Directors authorized a new stock repurchase program for up to $1 billion of common stock to be repurchased in the next 18 months. The Company’s management will continue to evaluate the extent to which the Company repurchases its shares, and the timing of such repurchases, based upon a variety of factors, including trading volume, market conditions, legal requirements, business conditions, impacts of the COVID-19 pandemic and other factors.

In 2020, the Board approved a dividend framework to share incremental free cash flow with shareholders at higher gold prices. The framework returns 40 to 60 percent of incremental attributable free cash flow to shareholders that is generated above a $1,200 per ounce gold price. This framework is non-binding and will be periodically reviewed and reassessed by the Board of Directors. The declaration and payment of future dividends remains at the full discretion of the board and will depend on the Company’s financial results, cash requirements, future prospects, COVID-19 impacts and other factors deemed relevant by the board.

In 2020, the Company and Barrick entered into an agreement with Pueblo Viejo to provide additional funding of up to $1,300 ($520 attributable to Newmont's 40% ownership interest) through a loan facility for the expansion of Pueblo Viejo's operations. Under the terms of the agreement, the Company and Barrick will distribute funds based on their respective proportionate ownership interest in Pueblo Viejo. See Note 20 to the Consolidated Financial Statements for more information.

At December 31, 2020, the Company had $5,540 in Cash and cash equivalents, of which $1,423 was held in foreign subsidiaries and is primarily held in U.S. dollar denominated accounts with the remainder in foreign currencies readily convertible to U.S. dollars. At December 31, 2020, $440 of the consolidated cash and cash equivalents was attributable to noncontrolling interests primarily related to our Peru and Suriname operations, which is being held to fund those operations. At December 31, 2020, $1,187 in consolidated cash and cash equivalents ($764 attributable to Newmont) was held at certain foreign subsidiaries that, if repatriated, may be subject to withholding taxes. We expect that there would be no additional tax burden upon repatriation after considering the cash cost associated with the withholding taxes. We believe that our liquidity and capital resources are adequate to fund our operations and corporate activities.

We believe our existing consolidated Cash and cash equivalents, available capacity on our revolving credit facility, and cash generated from continuing operations will be adequate to satisfy working capital needs, fund future growth, meet debt obligations, pay dividends, complete our stock repurchase program and meet other liquidity requirements for the foreseeable future. At December 31, 2020, our borrowing capacity on our revolving credit facility was $2,928 and we had no borrowings outstanding under the revolving credit facility. We do not expect any limitations on our ability to access our revolving credit facility as a result of the COVID-19 pandemic. We continue to remain compliant with covenants and there have been no impacts to-date, nor do we anticipate any negative impacts from COVID-19, on our ability to access funds available on this facility.

Our financial position was as follows:

At December 31, 2020At December 31, 2019
Debt$6,031$6,138
Lease and other financing obligations671696
Less: Cash and cash equivalents(5,540)(2,243)
Net debt$1,162$4,591
Borrowing capacity on revolving credit facility$2,928$2,940
Total liquidity (1)$8,468$5,183

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(1)Total liquidity is calculated as the total of our Cash and cash equivalents and the borrowing capacity on our revolving credit facility.

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Cash Flows

Our Consolidated Statements of Cash Flows are summarized as follows:

Years Ended December 31,
202020192018
Net cash provided by (used in) operating activities of continuing operations$4,890$2,876$1,837
Net cash provided by (used in) operating activities of discontinued operations(8)(10)(10)
Net cash provided by (used in) operating activities$4,882$2,866$1,827
Net cash provided by (used in) investing activities of continuing operations$166$(1,226)$(1,177)
Net cash provided by (used in) investing activities of discontinued operations(75)——
Net cash provided by (used in) investing activities$91$(1,226)$(1,177)
Net cash provided by (used in) financing activities$(1,680)$(2,777)$(455)

Net cash provided by (used in) operating activities of continuing operations was $4,890 in 2020, an increase of $2,014 from the year ended December 31, 2019, primarily due to a higher average realized gold price, a decrease in costs related to the Newmont Goldcorp transaction and formation of NGM, a decrease in payments of accrued liabilities and an increase in collections on receivable balances, partially offset by an increase in care and maintenance expenses due to five sites being temporarily placed into care and maintenance for a portion of 2020.

Net cash provided by (used in) investing activities of continuing operations was $166 in 2020, an increase in cash provided of $1,392 from the year ended December 31, 2019, primarily due to the sale of the Kalgoorlie and Red Lake operations, the sale of our investment in Continental and a reduction of capital expenditures for Additions to property, plant and mine development in 2020, partially offset by net cash and cash equivalents acquired in the Newmont Goldcorp transaction in 2019 and lower Return of investment from equity method investees related to Pueblo Viejo in 2020.

Net cash provided by (used in) investing activities of discontinued operations was $(75) in 2020, an increase in cash used of $75 from the year ended December 31, 2019, due to the payment for the option to acquire mining and mineral rights subject to the Holt royalty obligation as part of the Kirkland Agreement. See Note 14 to our Consolidated Financial Statements for further information.

Net cash provided by (used in) financing activities was $(1,680) in 2020, a decrease in cash used of $1,097 from the year ended December 31, 2019, primarily due to lower debt payments and the issuance of 2030 Senior Notes in 2020 and the 2019 payment of a one-time special dividend related to the Newmont Goldcorp transaction, partially offset by higher regular dividends in 2020.

Capital Expenditures

Cash generated from operations is used to execute our capital priorities, which include sustaining and developing our global portfolio of long-lived assets. We consider sustaining capital as those capital expenditures that are necessary to maintain current production and execute the current mine plan. Capital expenditures to develop new operations or related to projects at existing operations, where these projects will enhance production or reserves, are considered non-sustaining or development capital. In addition, the Company continues to evaluate strategic priorities and deployment of capital to projects in the pipeline to ensure it executes on its capital priorities and provides long term value to shareholders. The Company’s decision to reprioritize, sell or abandon a development project, which may include returning mining concessions to host governments, could result in a future impairment charge.

For the years ended December 31, 2020, 2019 and 2018 we had Additions to property, plant and mine development as follows:

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202020192018
Development ProjectsSustaining CapitalTotalDevelopment ProjectsSustaining CapitalTotalDevelopment ProjectsSustaining CapitalTotal
North America$49$269$318$81$295$376$—$29$29
South America9311120417312429711880198
Australia1322483806118524632150182
Africa4410314712312324622480304
Nevada811602415020725744249293
Corporate and other7424911213211213
Accrual basis$406$933$1,339$499$955$1,454$419$600$1,019
Decrease (increase) in non-cash adjustments(37)913
Cash basis$1,302$1,463$1,032

For the year ended December 31, 2020, development projects included Musselwhite Materials Handling, Pamour and Éléonore Lower Mine Material Handling System in North America; Quecher Main, Yanacocha Sulfides and Emilia in South America; Tanami Expansion 2 in Australia; Subika Mining Method Change and Ahafo North in Africa; and Goldrush Complex, Turquoise Ridge 3rd shaft and Range Front Declines at Cortez in Nevada. For the year ended December 31, 2019, development projects included Borden, Musselwhite Materials Handling and Éléonore Lower Mine Material Handling System in North America; Quecher Main and Yanacocha Sulfides projects in South America; Tanami Expansion 2 project in Australia; Ahafo North, Subika Underground, and the Ahafo Mill Expansion in Africa; and Goldrush Complex and Turquoise Ridge joint venture 3rd shaft in Nevada. For the year ended December 31, 2018, development projects included Quecher Main and the Merian crusher in South America; Tanami Expansion 2 in Australia; Ahafo North, Subika Underground and Ahafo Mill Expansion in Africa; and Twin Creeks Underground in Nevada.

For the years ended December 31, 2020, 2019 and 2018, sustaining capital included the following:

  • North America. Capital expenditures primarily related to surface and underground mine development, tailings facility construction, mining equipment and capitalized component purchases;

  • South America. Capital expenditures primarily related to capitalized component purchases, mining equipment, reserves drilling conversion, underground mine development, tailings facility construction and infrastructure improvements;

  • Australia. Capital expenditures primarily related to equipment and capitalized component purchases, underground mine development and tailings and support facilities;

  • Africa. Capital expenditures primarily related to underground mine development, capitalized component purchases and tailings facility expansion; and

  • Nevada. Capital expenditures primarily related to surface and underground mine development, tailings facility construction and capitalized component purchases.

During 2020, 2019 and 2018, $117, $112 and $117, respectively, of drilling and related costs were capitalized and included in mine development costs. These capitalized costs included $9 at North America, $15 at South America, $72 at Australia, $4 at Africa and $17 at Nevada in 2020; $23 at North America, $20 at South America, $51 at Australia, $11 at Africa and $7 at Nevada in 2019; and $3 at North America, $13 at South America, $66 at Australia, $8 at Africa and $27 at Nevada in 2018.

During 2020, 2019 and 2018, $—, $43, and $40, respectively, of pre-stripping costs were capitalized and included in mine development costs. Pre-stripping costs included the Quecher Main project at Yanacocha in South America and South Arturo in Nevada in 2019; and the Quecher Main project at Yanacocha in South America and Globe Hill at CC&V in North America in 2018.

Refer to our global project pipeline discussion above for additional details. Refer to Note 4 to our Consolidated Financial Statements and "Non-GAAP Financial Measures" within Part II, Item 7, Management’s Discussion and Analysis for further information.

Debt

Our future debt maturities include $550 in 2021, $492 in 2022, $414 in 2023 and $4,624 maturing at various times after 2023. See Note 25 to our Consolidated Financial Statements for further information. We generally expect to be able to fund maturities of debt from Net cash provided by (used in) operating activities, current investments, existing cash balances and available credit facilities.

Depending upon market conditions and strategic considerations, we may choose to refinance some maturing debt in the capital markets. In 2020, we completed a public offering of 2.25% Senior Notes that yielded $985 in net proceeds, which were used together with existing Cash and cash equivalents, to repurchase portions of our 3.50% 2022 Senior Notes and 3.70% 2023 Senior Notes (including $99 of Existing Goldcorp Notes) totaling approximately $1,000. In 2019, we completed a public offering of 2.80% Senior Notes that yielded $690 in net proceeds, which were used primarily to repay $626 outstanding balance on the 5.125% Senior Notes maturing in 2019.

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See Note 25 to the Consolidated Financial Statements for more information.

Debt Covenants

Our senior notes and revolving credit facility contain various covenants and default provisions including payment defaults, limitation on liens, leases, sales and leaseback agreements and merger restrictions. Furthermore, our senior notes and corporate revolving credit facility contain covenants that include, limiting the sale of all or substantially all of our assets, certain change of control provisions and a negative pledge on certain assets.

The corporate revolving credit facility contains a financial ratio covenant requiring us to maintain a net debt (total debt net of cash and cash equivalents) to total capitalization ratio of less than or equal to 62.50% in addition to the covenants noted above.

At December 31, 2020 and 2019, we were in compliance with all existing debt covenants and provisions related to potential defaults.

Letters of Credit and Other Guarantees

In September 2013, the Company entered into a committed Letter of Credit Facility Agreement (“LC Agreement”) with BNP Paribas, New York Branch ("BNP") which established a $175 letter of credit facility for a three year period, subsequently extended to September 30, 2020, to support reclamation obligations. In September 2020, the LC Agreement terminated and the Company entered into an uncommitted Letter of Credit Facility Agreement with BNP which established a $175 uncommitted letter of credit facility for a one-year period to support reclamation obligations.

We have off-balance sheet arrangements of $1,807 of outstanding surety bonds, bank letters of credit and bank guarantees (see Note 31 to the Consolidated Financial Statements). At December 31, 2020, $72 of the $3,000 corporate revolving credit facility was used to secure the issuance of letters of credit, primarily supporting reclamation obligations.

Supplemental Guarantor Information

In September 2018, we filed a shelf registration statement with the SEC on Form S-3 under the Securities Act, of 1933, as amended, which enables us to issue an indeterminate number or amount of common stock, preferred stock, depository shares, debt securities, guarantees of debt securities, warrants and units (the “Shelf Registration Statement”) from time to time at indeterminate prices, subject to the limitations of the Delaware General Corporation Law, our certification of incorporation and our bylaws. Under the Shelf Registration Statement, our debt securities may be guaranteed by Newmont USA Limited (“Newmont USA”), one of our consolidated subsidiaries. These guarantees are full and unconditional, and no other of our subsidiaries guarantees any security issued and outstanding. There are no restrictions on the ability of Newmont, as issuer, or Newmont USA, as guarantor (collectively, the “Obligor Group”), to obtain funds from its subsidiaries by dividend, loan or otherwise. Additionally, the cash provided by operations of the Obligor Group and all of its subsidiaries is available to satisfy debt repayments as they become due, except to the extent of any rights of noncontrolling interests. Net assets attributable to noncontrolling interests were $837 at December 31, 2020. All noncontrolling interests relate to non-guarantor subsidiaries.

Newmont and Newmont USA are primarily holding companies with no material operations, sources of income or assets other than equity interest in their subsidiaries and intercompany receivables or payables. Newmont USA’s primary investments are comprised of its 38.5% interest in NGM and 51.35% interest in Yanacocha. Prior to July 1, 2019, Newmont USA included certain operations from our existing Nevada mining operations, which were contributed in exchange for our 38.5% interest in NGM. For further information regarding these operations, see Note 4 to our Consolidated Financial Statements and "Results of Consolidated Operations" within Part II, Item 7, Management’s Discussion and Analysis. For further information regarding Newmont’s other operations, see our Consolidated Financial Statements and "Results of Consolidated Operations" within Part II, Item 7, Management’s Discussion and Analysis.

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In addition to equity interests in subsidiaries, the Obligor Group’s balance sheets consisted primarily of the following intercompany assets, intercompany liabilities and external debt. The remaining assets and liabilities of the Obligor Group are considered immaterial at December 31, 2020.

Obligor GroupNewmont USA
December 31, 2020December 31, 2020
Current intercompany assets$11,641$4,882
Non-current intercompany assets$2,120$282
Current intercompany liabilities$8,840$1,934
Current external debt$473$—
Non-current external debt$5,382$—

Newmont USA's subsidiary guarantees (the “subsidiary guarantees”) are general unsecured senior obligations of Newmont USA and rank equal in right of payment to all of Newmont USA's existing and future senior unsecured indebtedness and senior in right of payment to all of Newmont USA's future subordinated indebtedness. The subsidiary guarantees are effectively junior to any secured indebtedness of Newmont USA to the extent of the value of the assets securing such indebtedness.

At December 31, 2020, Newmont USA had approximately $5,855 of consolidated indebtedness (including guaranteed debt), all of which relates to the guarantees of indebtedness of Newmont.

Under the terms of the subsidiary guarantees, holders of Newmont’s securities subject to such subsidiary guarantees will not be required to exercise their remedies against Newmont before they proceed directly against Newmont USA.

Newmont USA will be released and relieved from all its obligations under the subsidiary guarantees in certain specified circumstances, including, but not limited to, the following:

  • upon the sale or other disposition (including by way of consolidation or merger), in one transaction or a series of related transactions, of a majority of the total voting power of the capital stock or other interests of Newmont USA (other than to Newmont or any of Newmont’s affiliates);

  • upon the sale or disposition of all or substantially all the assets of Newmont USA (other than to Newmont or any of Newmont’s affiliates); or

  • upon such time as Newmont USA ceases to guarantee more than $75 aggregate principal amount of Newmont’s debt (at December 31, 2020, Newmont USA guaranteed $600 aggregate principal amount of debt of Newmont that did not contain a similar fall-away provision).

Newmont’s debt securities are effectively junior to any secured indebtedness of Newmont to the extent of the value of the assets securing such indebtedness, and structurally subordinated to all debt and other liabilities of Newmont’s non-guarantor subsidiaries. At December 31, 2020, (i) Newmont’s total consolidated indebtedness was approximately $6,702, none of which was secured (other than $671 of Lease and other financing obligations), and (ii) Newmont’s non-guarantor subsidiaries had $6,280 of total liabilities (including trade payables, but excluding intercompany and external debt and reclamation and remediation liabilities), which would have been structurally senior to Newmont’s debt securities.

For further information on Newmont’s debt subject to the subsidiary guarantees, see Note 25 to our Consolidated Financial Statements.

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Contractual Obligations

Our contractual obligations at December 31, 2020 are summarized as follows:

Payments Due by Period
Contractual ObligationsTotalCurrentNon-Current
Debt (1)$9,659$798$8,861
Finance lease and other financing obligations (2)964104860
Remediation and reclamation liabilities (3)4,9431934,750
Employee-related benefits (4)1,055128927
Uncertain income tax liabilities and interest (5)372—372
Operating leases1317124
Minimum royalty payments (6)49651445
Purchase obligations (7)1,155310845
Other (8)585261324
$19,360$1,852$17,508

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(1)Debt includes principal of $6,080 and estimated interest payments of $3,579 on Senior Notes, assuming no early extinguishment.

(2)Finance lease and other financing obligations includes finance lease payments of $926 and additional payments of $38 for finance leases that have not yet commenced.

(3)Mining operations are subject to extensive environmental regulations in the jurisdictions in which they operate. Pursuant to environmental regulations, we are required to close our operations and reclaim and remediate the lands that operations have disturbed. The estimated undiscounted cash outflows of these Reclamation and remediation liabilities are reflected here. For more information regarding reclamation and remediation liabilities, see Note 6 to the Consolidated Financial Statements.

(4)Contractual obligations for Employee-related benefits include severance, workers’ participation, pension and other benefit plans. Pension plan benefit payments beyond 2030 cannot be reasonably estimated given variable market conditions and actuarial assumptions and are not included.

(5)We are unable to reasonably estimate the timing of our uncertain income tax liabilities and interest payments due to uncertainties in the timing of the effective settlement of tax positions.

(6)Minimum royalty payments are related to continuing operations and are presented net of recoverable amounts.

(7)Purchase obligations are not recorded in the Consolidated Financial Statements. Purchase obligations represent contractual obligations for purchase of power, materials and supplies, consumables, inventories and capital projects.

(8)Other includes service contracts and other obligations not recorded in our Consolidated Financial Statements, as well as the Norte Abierto and Galore Creek deferred payment obligations accrued in Other current liabilities and Other non-current liabilities.

Environmental

Our mining and exploration activities are subject to various federal and state laws and regulations governing the protection of the environment. We have made, and expect to make in the future, expenditures to comply with such laws and regulations, but cannot predict the full amount of such future expenditures. We perform a comprehensive review of our reclamation and remediation liabilities annually and review changes in facts and circumstances associated with these obligations at least quarterly. At December 31, 2020 and 2019, $3,719 and $3,334, respectively, were accrued for reclamation costs relating to currently or recently producing or development stage mineral properties, of which $164 and $125, respectively, were classified as current liabilities.

In addition, we are involved in several matters concerning environmental obligations associated with former, primarily historic, mining activities. Based upon our best estimate of our liability for these matters, $313 and $299 were accrued for such obligations at December 31, 2020 and 2019, respectively, of which $50 and $44, respectively, were classified as current liabilities. We spent $25, $31 and $39 during 2020, 2019, and 2018, respectively, for environmental obligations related to the former mining activities.

Reclamation and remediation adjustments during 2020 primarily related to increased lime consumption and water treatment costs at inactive Yanacocha sites and updated project cost estimates at inactive Porcupine sites and Midnite mine and Dawn mill sites. Reclamation and remediation adjustments during 2019 primarily related to increased water management costs at inactive Yanacocha sites, updated project costs estimates at Dawn, Mule Canyon and Northumberland sites, increased water management costs at the Con mine and higher reclamation and remediation costs from the Newmont Goldcorp transaction.

During the year ended 2020, 2019, and 2018, capital expenditures were approximately $23, $65, and $81, respectively, to comply with environmental regulations.

For more information on the Company’s reclamation and remediation liabilities, see Notes 6, 25 and 31 to the Consolidated Financial Statements.

Forward-Looking Statements

The foregoing discussion and analysis, as well as certain information contained elsewhere in this Annual Report, contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the

Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbor created thereby. For a more detailed discussion of risks and other factors that might impact forward-looking statements and other important information about forward-looking statements, see the discussion in Forward-Looking Statements in Item 1, Business and Item 1A, Risk Factors.

Non-GAAP Financial Measures

Non-GAAP financial measures are intended to provide additional information only and do not have any standard meaning prescribed by U.S. generally accepted accounting principles (“GAAP”). These measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. Unless otherwise noted, we present the Non-GAAP financial measures of our continuing operations in the tables below. For additional information regarding our discontinued operations, see Note 14 to the Consolidated Financial Statements.

Earnings before interest, taxes and depreciation and amortization and Adjusted earnings before interest, taxes and depreciation and amortization

Management uses Earnings before interest, taxes and depreciation and amortization (“EBITDA”) and EBITDA adjusted for non-core or certain items that have a disproportionate impact on our results for a particular period (“Adjusted EBITDA”) as non-GAAP measures to evaluate the Company’s operating performance. EBITDA and Adjusted EBITDA do not represent, and should not be considered an alternative to, net income (loss), operating income (loss), or cash flow from operations as those terms are defined by GAAP, and do not necessarily indicate whether cash flows will be sufficient to fund cash needs. Although Adjusted EBITDA and similar measures are frequently used as measures of operations and the ability to meet debt service requirements by other companies, our calculation of Adjusted EBITDA is not necessarily comparable to such other similarly titled captions of other companies. The Company believes that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and Board of Directors. Management’s determination of the components of Adjusted EBITDA are evaluated periodically and based, in part, on a review of non-GAAP financial measures used by mining industry analysts. Net income (loss) attributable to Newmont stockholders is reconciled to EBITDA and Adjusted EBITDA as follows:

Years Ended December 31,
202020192018
Net income (loss) attributable to Newmont stockholders$2,829$2,805$341
Net income (loss) attributable to noncontrolling interests(38)7939
Net (income) loss from discontinued operations (1)(163)72(61)
Equity loss (income) of affiliates(189)(95)33
Income and mining tax expense (benefit)704832386
Depreciation and amortization2,3001,9601,215
Interest expense, net308301207
EBITDA$5,751$5,954$2,160
Adjustments:
(Gain) loss on asset and investment sales (2)$(677)$(30)$(100)
Change in fair value of investments (3)(252)(166)50
Reclamation and remediation charges (4)21312021
Impairment of investments (5)93242
Pension settlements and curtailments (6)92(20)—
COVID-19 specific costs (7)92——
Loss on debt extinguishment (8)77——
Settlement costs (9)58510
Impairment of long-lived and other assets (10)495369
Goldcorp transaction and integration costs (11)23217—
Restructuring and severance (12)18710
Gain on formation of Nevada Gold Mines (13)—(2,390)—
Nevada JV transaction and integration costs (14)—30—
Emigrant leach pad write-down (15)——22
Adjusted EBITDA (16)$5,537$3,734$2,584

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(1)For additional information regarding our discontinued operations, see Note 14 to our Consolidated Financial Statements.

(2)(Gain) loss on asset and investment sales, included in Gain on asset and investment sales, net, primarily represents gains on the sale of Kalgoorlie and Continental and a gain on the sale of certain royalty interests to Maverix in 2020; a gain on the sale of exploration land in 2019; and a gain from the exchange of certain royalty interests for cash consideration and an equity ownership and warrants in Maverix in 2018 . For additional information, see Note 10 to our Consolidated Financial Statements.

(3)Change in fair value of investments, included in Other income, net, primarily represents unrealized holding gains and losses on marketable equity securities and our investment instruments. For additional information regarding our investments, see Note 20 to our Consolidated Financial Statements.

(4)Reclamation and remediation charges, included in Reclamation and remediation, represent revisions to the reclamation and remediation plans and cost estimates at the Company’s former operating properties and historic mining operations that have entered the closure phase and have no substantive future economic value. The 2020 charges include increased lime consumption and water treatment costs at inactive Yanacocha sites and updated project cost estimates at inactive Porcupine sites, the Midnite mine site and Dawn mill site. The 2019 charges include updated water management costs at inactive Yanacocha sites, updated project cost estimates at the Mule Canyon and Northumberland mine sites and a review of the project cost estimates at the Midnite and Dawn remediation site, as well as increased water management costs at the Con mine. The 2018 charges include adjustments at the Idarado, Lone Tree and Rain remediation and closure sites.

(5)Impairment of investments, included in Other income, net, primarily represents other-than-temporary impairment of other investments, including the impairment of the TMAC investment in 2020.

(6)Pension settlements and curtailments, included in Other income, net, primarily represents pension settlement charges due to lump sum payments to participants in 2020 and pension curtailments gains in 2019. See Note 17 to our Consolidated Financial Statements for further information.

(7)COVID-19 specific costs, included in Other expense, net, represents incremental direct costs incurred as a result of actions taken to protect against the impacts of the COVID-19 pandemic. See Note 9 to our Consolidated Financial Statements for further information.

(8)Loss on debt extinguishment, included in Other income, net, primarily represents losses on the extinguishment of a portion of the 2022 Senior Notes and 2023 Senior Notes during 2020.

(9)Settlement costs, included in Other expense, net, primarily represents costs related to the ecological tax obligation at Peñasquito in Mexico, mineral interest settlements at Ahafo and Akyem in Africa, the Cedros community agreement at Peñasquito in Mexico, a water related settlement at Yanacocha in Peru and other related costs in 2020, and certain costs associated with legal and other settlements for 2019 and 2018.

(10)Impairment of long-lived and other assets, included in Impairment of long-lived and other assets, represents non-cash write-downs of various assets that are no longer in use. Impairments include $366 related to long-lived assets in Nevada in 2018. See Note 8 to our Consolidated Financial Statements for further information.

(11)Goldcorp transaction and integration costs, included in Other expense, net, primarily represents costs incurred related to the Newmont Goldcorp transaction completed during 2019 as well as subsequent integration costs.

(12)Restructuring and severance, included in Other expense, net, primarily represents severance and related costs associated with significant organizational or operating model changes implemented by the Company for all periods presented.

(13)Gain on formation of Nevada Gold Mines, included in Gain on formation of Nevada Gold Mines, represents the difference between the fair value of our 38.5% interest in NGM and the carrying value of the Nevada mining operations contributed on July 1, 2019.

(14)Nevada JV transaction and integration costs, included in Other expense, net, primarily represents costs incurred related to the Nevada JV Agreement, including hostile defense fees, during 2019.

(15)The Emigrant leach pad write-down, included in Costs applicable to sales, represents a write-down to reduce the carrying value of the leach pad to net realizable value at Emigrant due to a change in mine plan resulting in a significant decrease in mine life in 2018.

(16)Adjusted EBITDA has not been adjusted for $178 of cash care and maintenance costs, included in Care and maintenance, which primarily represent costs incurred associated with our Musselwhite, Éléonore, Peñasquito, Yanacocha and Cerro Negro mine sites being temporarily placed into care and maintenance in response to the COVID-19 pandemic during a portion of the year ended December 31, 2020.

Additionally, the Company uses Pueblo Viejo EBITDA as a non-GAAP measure to evaluate the operating performance of its investment in the Pueblo Viejo mine. Pueblo Viejo EBITDA does not represent, and should not be considered an alternative to, Equity income (loss) of affiliates, as defined by GAAP, and does not necessarily indicate whether cash distributions from Pueblo Viejo will match Pueblo Viejo EBITDA or earnings from affiliates. Although the Company has the ability to exert significant influence, it does not have direct control over the operations or resulting revenues and expenses, nor does it proportionately consolidate its investment in Pueblo Viejo. The Company believes that Pueblo Viejo EBITDA provides useful information to investors and others in understanding and evaluating the operating results of its investment in Pueblo Viejo, in the same manner as management and the Board of Directors. Equity income (loss) of affiliates is reconciled to Pueblo Viejo EBITDA as follows:

Years Ended December 31,
202020192018
Equity income (loss) of affiliates$189$95$(33)
Equity (income) loss of affiliates, excluding Pueblo Viejo (1)42933
Equity income (loss) of affiliates, Pueblo Viejo (1)193124—
Reconciliation of Pueblo Viejo on attributable basis:
Income and mining tax expense (benefit)16969—
Depreciation and amortization7252—
Pueblo Viejo EBITDA$434$245$—

____________________________

(1)See Note 13 to the Consolidated Financial Statements.

Adjusted net income (loss)

Management uses Adjusted net income (loss) to evaluate the Company’s operating performance and for planning and forecasting future business operations. The Company believes the use of Adjusted net income (loss) allows investors and analysts to understand the results of the continuing operations of the Company and its direct and indirect subsidiaries relating to the sale of

products, by excluding certain items that have a disproportionate impact on our results for a particular period. Adjustments to continuing operations are presented before tax and net of our partners’ noncontrolling interests, when applicable. The tax effect of adjustments is presented in the Tax effect of adjustments line and is calculated using the applicable regional tax rate. Management’s determination of the components of Adjusted net income (loss) are evaluated periodically and based, in part, on a review of non-GAAP financial measures used by mining industry analysts. Net income (loss) attributable to Newmont stockholders is reconciled to Adjusted net income (loss) as follows:

Year Ended December 31, 2020
per share data (1)
basicdiluted
Net income (loss) attributable to Newmont stockholders$2,829$3.52$3.51
Net loss (income) attributable to Newmont stockholders from discontinued operations (2)(163)(0.20)(0.20)
Net income (loss) attributable to Newmont stockholders from continuing operations2,6663.323.31
(Gain) loss on asset and investment sales (3)(677)(0.84)(0.84)
Change in fair value of investments (4)(252)(0.31)(0.31)
Reclamation and remediation charges, net (5)1600.200.20
Impairment of investments (6)930.110.11
Pension settlement (7)920.110.11
COVID-19 specific costs, net (8)840.100.10
Loss on debt extinguishment (9)770.090.09
Settlement costs, net (10)550.070.07
Impairment of long-lived and other assets (11)490.060.06
Goldcorp transaction and integration costs (12)230.030.03
Restructuring and severance, net (13)170.020.02
Tax effect of adjustments (14)620.080.08
Valuation allowance and other tax adjustments, net (15)(309)(0.38)(0.37)
Adjusted net income (loss) (16)$2,140$2.66$2.66
Weighted average common shares (millions): (17)804806

____________________________

(1)Per share measures may not recalculate due to rounding.

(2)For additional information regarding our discontinued operations, see Note 14 to our Consolidated Financial Statements.

(3)(Gain) loss on asset and investment sales, included in Gain on asset and investment sales, net, primarily represents gains on the sale of Kalgoorlie and Continental and a gain on the sale of royalty interests to Maverix. For additional information, see Note 10 to our Consolidated Financial Statements.

(4)Change in fair value of investments, included in Other income, net, primarily represents unrealized holding gains and losses on marketable equity securities and our investment instruments. For additional information regarding our investments, see Note 20 to our Consolidated Financial Statements.

(5)Reclamation and remediation charges, net, included in Reclamation and remediation, represent revisions to remediation plans at the Company’s former operating properties and historic mining operations that have entered the closure phase and have no substantive future economic value, including adjustments related to increased lime consumption and water treatment costs at inactive Yanacocha sites and updated project cost estimates at inactive Porcupine sites, the Midnite mine site and Dawn mill site. Amount is presented net of income (loss) attributable to noncontrolling interests of $(53).

(6)Impairment of investments, included in Other income, net, primarily represents the other-than-temporary impairment of the TMAC investment.

(7)Pension settlements, included in Other income, net, represents pension settlement charges due to lump sum payments to participants. See Note 17 to our Consolidated Financial Statements for further information.

(8)COVID-19 specific costs, net, included in Other expense, net, represents incremental direct costs incurred as a result of actions taken to protect against the impacts of the COVID-19 pandemic. Amount is presented net of income (loss) attributable to noncontrolling interests of $(8). See Note 9 to our Consolidated Financial Statements for further information.

(9)Loss on debt extinguishment, included in Other income, net, primarily represents losses on the extinguishment of a portion of the 2022 Senior Notes and 2023 Senior Notes during 2020.

(10)Settlement costs, net, included in Other expense, net, primarily represents costs related to the ecological tax obligation at Peñasquito in Mexico, mineral interest settlements at Ahafo and Akyem in Africa, the Cedros community agreement at Peñasquito in Mexico, a water related settlement at Yanacocha in Peru and other related costs. Amount is presented net of income (loss) attributable to noncontrolling interests of $(3).

(11)Impairment of long-lived and other assets, included in Impairment of long-lived and other assets, represents non-cash write-downs of various assets that are no longer in use.

(12)Goldcorp transaction and integration costs, included in Other expense, net, primarily represents costs incurred related to the Newmont Goldcorp transaction completed during 2019 as well as subsequent integration costs.

(13)Restructuring and severance, net, included in Other expense, net, primarily represents severance and related costs associated with significant organizational or operating model changes implemented by the Company. Amounts are presented net of income (loss) attributable to noncontrolling interests of $(1).

(14)The tax effect of adjustments, included in Income and mining tax benefit (expense), represents the tax effect of adjustments in footnotes (3) through (13), as described above, and are calculated using the applicable regional tax rate.

(15)Valuation allowance and other tax adjustments, net, included in Income and mining tax benefit (expense), is recorded for items such as foreign tax credits, alternative minimum tax credits, capital losses, disallowed foreign losses, and the effects of changes in foreign currency exchange rates on deferred tax assets and deferred tax liabilities. The adjustment is due to the benefit recognized on the sale of Kalgoorlie and related tax capital loss of $(353), net increase or (decrease) to net operating losses, tax credit carryovers and other deferred tax assets subject to valuation allowance of $186, the effects of changes in foreign exchange rates on deferred tax assets and liabilities of $(98), net reductions to the reserve for uncertain tax positions of $(21) and other tax adjustments of $39. Total amount is presented net of income (loss) attributable to noncontrolling interests of $(62).

(16)Adjusted net income (loss) has not been adjusted for $165 of cash and $85 of non-cash care and maintenance costs, included in Care and maintenance and Depreciation and amortization, respectively, which primarily represent costs associated with our Musselwhite, Éléonore, Peñasquito, Yanacocha and Cerro Negro sites being temporarily placed into care and maintenance in response to the COVID-19 pandemic during a portion of the year ended December 31, 2020, respectively. Amounts are presented net of income (loss) attributable to noncontrolling interests of $13 and $3, respectively.

(17)Adjusted net income (loss) per diluted share is calculated using diluted common shares, which are calculated in accordance with U.S. GAAP.

Year Ended December 31, 2019
per share data (1)
basicdiluted
Net income (loss) attributable to Newmont stockholders$2,805$3.82$3.81
Net loss (income) attributable to Newmont stockholders from discontinued operations (2)720.100.10
Net income (loss) attributable to Newmont stockholders from continuing operations2,8773.923.91
Gain on formation of Nevada Gold Mines (3)(2,390)(3.25)(3.24)
Goldcorp transaction and integration costs (4)2170.290.29
Change in fair value of investments (5)(166)(0.23)(0.23)
Reclamation and remediation charges, net (6)990.130.13
Nevada JV transaction and integration costs (7)300.040.04
Loss (gain) on asset and investment sales, net (8)(28)(0.04)(0.04)
Pension curtailment (9)(20)(0.03)(0.03)
Restructuring and severance, net (10)60.010.01
Settlement costs (11)50.010.01
Impairment of long-lived and other assets, net (12)4——
Impairment of investments (13)2——
Tax effect of adjustments (14)4180.570.57
Valuation allowance and other tax adjustments, net (15)(84)(0.10)(0.10)
Adjusted net income (loss)$970$1.32$1.32
Weighted average common shares (millions): (16)735737

____________________________

(1)Per share measures may not recalculate due to rounding.

(2)For additional information regarding our discontinued operations, see Note 14 to our Consolidated Financial Statements.

(3)Gain on formation of Nevada Gold Mines, included in Gain on formation of Nevada Gold Mines, represents the difference between the fair value of our 38.5% interest in NGM and the carrying value of the Nevada mining operations contributed.

(4)Goldcorp transaction and integration costs, included in Other expense, net, primarily represents costs incurred related to the Newmont Goldcorp transaction during 2019.

(5)Change in fair value of investments, included in Other income, net, primarily represents unrealized holding gains and losses on marketable equity securities and our investment instruments in Continental.

(6)Reclamation and remediation charges, net, included in Reclamation and remediation, represent revisions to remediation plans at the Company’s former operating properties and historic mining operations that have entered the closure phase and have no substantive future economic value, including adjustments related to updated water management costs at inactive Yanacocha sites, updated project cost estimates at the Mule Canyon and Northumberland mine sites and a review of the project cost estimates at the Midnite and Dawn remediation site, as well as increased water management costs at the Con mine. Amount is presented net of income (loss) attributable to noncontrolling interests of $(21).

(7)Nevada JV transaction and integration costs, included in Other expense, net, primarily represents costs incurred related to the Nevada JV Agreement, including hostile defense fees.

(8)Loss (gain) on asset and investment sales, net, included in Other income, net, primarily represents a gain on the sale of exploration land. Amount is presented net of income (loss) attributable to noncontrolling interest of $2.

(9)Pension curtailment, included in Other income, net, primarily represents curtailment charges recognized due to a significant amount of employees being terminated as a result of establishing NGM.

(10)Restructuring and severance, net, included in Other expense, net, primarily represents certain costs associated with severance and legal costs. Amount is presented net of income (loss) attributable to noncontrolling interests of $(1).

(11)Settlement costs, included in Other expense, net, primarily represents certain costs associated with legal and other settlements.

(12)Impairment of long-lived and other assets, net, included in Impairment of long-lived and other assets, represents non-cash write-downs of various assets that are no longer in use. Amount is presented net of income (loss) attributable to noncontrolling interests of $(1).

(13)Impairment of investments, included in Other income, net, represents other-than-temporary impairments of other investments.

(14)The tax effect of adjustments, included in Income and mining tax benefit (expense), represents the tax effect of adjustments in footnotes (3) through (13), as described above, and are calculated using the applicable regional tax rate.

(15)Valuation allowance and other tax adjustments, net, included in Income and mining tax benefit (expense), is recorded for items such as foreign tax credits, alternative minimum tax credits, capital losses, disallowed foreign losses, and the effects of changes in foreign currency exchange rates on deferred tax assets and deferred tax liabilities. The adjustment is due to a net increase or (decrease) to net operating losses, tax credit carryovers and other deferred tax assets subject to valuation allowance of $(262), the effects of changes in foreign exchange rates on deferred tax assets and liabilities of $(95), the effects related to the amendment of the 2014 U.S. federal income tax return and related carrybacks of $150, additions to the reserve for uncertain tax positions of $70, the expiration of U.S. capital loss carryovers of $34, and other tax adjustments of $28. Total amount is presented net of income (loss) attributable to noncontrolling interests of $(9).

(16)Adjusted net income (loss) per diluted share is calculated using diluted common shares, which are calculated in accordance with U.S. GAAP.

Year Ended December 31, 2018
per share data (1)
basicdiluted
Net income (loss) attributable to Newmont stockholders$341$0.64$0.64
Net loss (income) attributable to Newmont stockholders from discontinued operations (2)(61)(0.11)(0.11)
Net income (loss) attributable to Newmont stockholders from continuing operations2800.530.53
Impairment of long-lived and other assets (3)3690.690.69
Loss (gain) on asset and investment sales (4)(100)(0.19)(0.19)
Change in fair value of investments (5)500.090.09
Impairment of investments (6)420.080.07
Emigrant leach pad write-down (7)290.050.05
Reclamation and remediation charges (8)210.040.04
Settlement costs, net (9)90.020.02
Restructuring and severance, net (10)70.010.01
Tax effect of adjustments (11)(99)(0.18)(0.18)
Re-measurement due to the Tax Cuts and Jobs Act (12)(14)(0.03)(0.03)
Tax restructuring related to the Tax Cuts and Jobs Act (13)(34)(0.06)(0.06)
Valuation allowance and other tax adjustments, net (14)1580.300.30
Adjusted net income (loss)$718$1.35$1.34
Weighted average common shares (millions): (15)533535

____________________________

(1)Per share measures may not recalculate due to rounding.

(2)For additional information regarding our discontinued operations, see Note 14 to our Consolidated Financial Statements.

(3)Impairment of long-lived and other assets, included in Impairment of long-lived and other assets, represents non-cash write-downs of various assets that are no longer in use. The amount includes $366 related to long-lived assets in Nevada. See Note 8 to our Consolidated Financial Statements for further information.

(4)Loss (gain) on asset and investment sales, included in Other income, net, primarily represents a gain from the exchange of certain royalty interests for cash consideration and an equity ownership and warrants in Maverix.

(5)Change in fair value of investments, included in Other income, net, primarily represents unrealized holding gains and losses on marketable equity securities and our investment instruments in Continental.

(6)Impairment of investments, included in Other income, net, represents other-than-temporary impairments of other investments.

(7)The Emigrant leach pad write-down, included in Costs applicable to sales and Depreciation and amortization, represents a write-down to reduce the carrying value of the leach pad to net realizable value at Emigrant due to a change in mine plan resulting in a significant decrease in mine life.

(8)Reclamation and remediation charges, included in Reclamation and remediation, represent revisions to reclamation and remediation plans and cost estimates at the Company’s former operating properties and historic mining operations that have entered the closure phase and have no substantive future economic value, including adjustments at the Idarado, Lone Tree and Rain remediation and closure sites.

(9)Settlement costs, net, included in Other expense, net, primarily represents certain costs associated with legal and other settlements. Amount is presented net of income (loss) attributable to noncontrolling interests of $(1).

(10)Restructuring and severance, net, included in Other expense, net, primarily represents certain costs associated with severance and legal costs. Amount is presented net of income (loss) attributable to noncontrolling interests of $(3).

(11)The tax effect of adjustments, included in Income and mining tax benefit (expense), represents the tax effect of adjustments in footnotes (3) through (10), as described above, and are calculated using the applicable regional tax rate.

(12)Re-measurement due to the Tax Cuts and Jobs Act, included in Income and mining tax benefit (expense), represents the re-measurement of our U.S. deferred tax assets and liabilities from 35% to the reduced tax rate of 21%. Amount reflects the final adjustments to the provisional re-measurement expense.

(13)Tax restructuring related to the Tax Cuts and Jobs Act, included in Income and mining tax benefit (expense), represents changes resulting from restructuring our holding of non-U.S. operations for U.S. federal income tax purposes. Amount reflects the final adjustments to the provisional restructuring charge.

(14)Valuation allowance and other tax adjustments, net, included in Income and mining tax benefit (expense), predominantly represent adjustments to remove the impact of our valuation allowances for items such as foreign tax credits, alternative minimum tax credits, capital losses and disallowed foreign losses. We believe that these valuation allowances cause significant fluctuations in our financial results that are not indicative of our underlying financial performance. The adjustment is due to an increase to the valuation allowance on U.S. net operating losses, credit carryovers, and other U.S. deferred tax assets of $191, other tax adjustments of $(3), and a decrease to the valuation allowance on U.S. capital losses of $(15). Total amount is presented net of income (loss) attributable to noncontrolling interests of $(15).

(15)Adjusted net income (loss) per diluted share is calculated using diluted common shares, which are calculated in accordance with U.S. GAAP.

Free Cash Flow

Management uses Free Cash Flow as a non-GAAP measure to analyze cash flows generated from operations. Free Cash Flow is Net cash provided by (used in) operating activities less Net cash provided by (used in) operating activities of discontinued operations less Additions to property, plant and mine development as presented on the Consolidated Statements of Cash Flows. The Company believes Free Cash Flow is also useful as one of the bases for comparing the Company’s performance with its competitors. Although Free Cash Flow and similar measures are frequently used as measures of cash flows generated from operations by other companies, the Company’s calculation of Free Cash Flow is not necessarily comparable to such other similarly titled captions of other companies.

The presentation of non-GAAP Free Cash Flow is not meant to be considered in isolation or as an alternative to net income as an indicator of the Company’s performance, or as an alternative to cash flows from operating activities as a measure of liquidity as those terms are defined by GAAP, and does not necessarily indicate whether cash flows will be sufficient to fund cash needs. The Company’s definition of Free Cash Flow is limited in that it does not represent residual cash flows available for discretionary expenditures due to the fact that the measure does not deduct the payments required for debt service and other contractual obligations or payments made for business acquisitions. Therefore, the Company believes it is important to view Free Cash Flow as a measure that provides supplemental information to the Company’s Consolidated Statements of Cash Flows.

The following table sets forth a reconciliation of Free Cash Flow, a non-GAAP financial measure, to Net cash provided by (used in) operating activities, which the Company believes to be the GAAP financial measure most directly comparable to Free Cash Flow, as well as information regarding Net cash provided by (used in) investing activities and Net cash provided by (used in) financing activities.

Years Ended December 31,
202020192018
Net cash provided by (used in) operating activities$4,882$2,866$1,827
Less: Net cash used in (provided by) operating activities of discontinued operations81010
Net cash provided by (used in) operating activities of continuing operations4,8902,8761,837
Less: Additions to property, plant and mine development(1,302)(1,463)(1,032)
Free Cash Flow$3,588$1,413$805
Net cash provided by (used in) investing activities (1)$91$(1,226)$(1,177)
Net cash provided by (used in) financing activities$(1,680)$(2,777)$(455)

____________________________

(1)Net cash provided by (used in) investing activities includes Additions to property, plant and mine development, which is included in the Company’s computation of Free Cash Flow.

Costs applicable to sales per ounce/gold equivalent ounce

Costs applicable to sales per ounce/gold equivalent ounce are non-GAAP financial measures. These measures are calculated by dividing the costs applicable to sales of gold and other metals by gold ounces or gold equivalent ounces sold, respectively. These measures are calculated for the periods presented on a consolidated basis. Costs applicable to sales per ounce/gold equivalent ounce statistics are intended to provide additional information only and do not have any standardized meaning prescribed by GAAP and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. The measures are not necessarily indicative of operating profit or cash flow from operations as determined under GAAP. Other companies may calculate these measures differently.

The following tables reconcile these non-GAAP measures to the most directly comparable GAAP measures.

Gold (1)GEO (2)
Years Ended December 31,Years Ended December 31,
202020192018202020192018
Costs applicable to sales (3)$4,408$4,663$3,906$606$532$187
Gold/GEO sold (thousand ounces) (4)5,8316,4655,5161,062621238
Costs applicable to sales per ounce (5)$756$721$708$571$858$782

____________________________

(1)Includes by-product credits of $128, $91 and $50 in 2020, 2019, and 2018, respectively.

(2)Includes by-product credits of $2, $3 and $3 in 2020, 2019, and 2018, respectively.

(3)Excludes Depreciation and amortization and Reclamation and remediation.

(4)Gold equivalent ounces is calculated as pounds or ounces produced multiplied by the ratio of the other metals price to the gold price, using Gold ($1,200/oz.), Copper ($2.75/lb.), Silver ($16.00/oz.), Lead ($0.95/lb.) and Zinc ($1.20/lb.) pricing for 2020, Gold ($1,200/oz.), Copper ($2.75/lb.), Silver ($15.00/oz.), Lead ($0.90/lb.) and Zinc ($1.05/lb.) pricing for 2019 and Gold ($1,250/oz.) and Copper ($2.70/lb.) pricing for 2018.

(5)Per ounce measures may not recalculate due to rounding.

All-In Sustaining Costs

Newmont has developed a metric that expands on GAAP measures, such as cost of goods sold, and non-GAAP measures, such as costs applicable to sales per ounce, to provide visibility into the economics of our mining operations related to expenditures, operating performance and the ability to generate cash flow from our continuing operations.

Current GAAP measures used in the mining industry, such as cost of goods sold, do not capture all of the expenditures incurred to discover, develop and sustain production. Therefore, we believe that all-in sustaining costs is a non-GAAP measure that provides additional information to management, investors and analysts that aid in the understanding of the economics of our operations and performance compared to other producers and provides investors visibility by better defining the total costs associated with production.

All-in sustaining cost (“AISC”) amounts are intended to provide additional information only and do not have any standardized meaning prescribed by GAAP and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. The measures are not necessarily indicative of operating profit or cash flow from operations as determined under GAAP. Other companies may calculate these measures differently as a result of differences in the underlying accounting principles, policies applied and in accounting frameworks such as in International Financial Reporting Standards (“IFRS”), or by reflecting the benefit from selling non-gold metals as a reduction to AISC. Differences may also arise related to definitional differences of sustaining versus development (i.e. non-sustaining) activities based upon each company’s internal policies.

The following disclosure provides information regarding the adjustments made in determining the all-in sustaining costs measure:

Costs applicable to sales. Includes all direct and indirect costs related to current production incurred to execute the current mine plan. We exclude certain exceptional or unusual amounts from Costs applicable to sales (“CAS”), such as significant revisions to recovery amounts. CAS includes by-product credits from certain metals obtained during the process of extracting and processing the primary ore-body. CAS is accounted for on an accrual basis and excludes Depreciation and amortization and Reclamation and remediation, which is consistent with our presentation of CAS on the Consolidated Statements of Operations. In determining AISC, only the CAS associated with producing and selling an ounce of gold is included in the measure. Therefore, the amount of gold CAS included in AISC is derived from the CAS presented in the Company’s Consolidated Statements of Operations less the amount of CAS attributable to the production of other metals at our Peñasquito, Boddington, and Phoenix mines. The other metals CAS at those mine sites is disclosed in Note 4 to the Consolidated Financial Statements. The allocation of CAS between gold and other metals at the Peñasquito, Boddington, and Phoenix mines is based upon the relative sales value of gold and other metals produced during the period.

Reclamation costs. Includes accretion expense related to reclamation liabilities and the amortization of the related Asset Retirement Cost (“ARC”) for the Company’s operating properties. Accretion related to the reclamation liabilities and the amortization of the ARC assets for reclamation does not reflect annual cash outflows but are calculated in accordance with GAAP. The accretion and amortization reflect the periodic costs of reclamation associated with current production and are therefore included in the measure. The allocation of these costs to gold and other metals is determined using the same allocation used in the allocation of CAS between gold and other metals at the Peñasquito, Boddington, and Phoenix mines.

Advanced projects, research and development and exploration. Includes incurred expenses related to projects that are designed to sustain current production and exploration. We note that as current resources are depleted, exploration and advanced projects are necessary for us to replace the depleting reserves or enhance the recovery and processing of the current reserves to sustain production at existing operations. As these costs relate to sustaining our production, and are considered a continuing cost of a mining company, these costs are included in the AISC measure. These costs are derived from the Advanced projects, research and development and Exploration amounts presented in the Consolidated Statements of Operations less incurred expenses related to the development of new operations, or related to major projects at existing operations where these projects will materially benefit the

operation in the future. The allocation of these costs to gold and other metals is determined using the same allocation used in the allocation of CAS between gold and other metals at the Peñasquito, Boddington, and Phoenix mines.

General and administrative. Includes costs related to administrative tasks not directly related to current production, but rather related to support our corporate structure and fulfill our obligations to operate as a public company. Including these expenses in the AISC metric provides visibility of the impact that general and administrative activities have on current operations and profitability on a per ounce basis.

Care and maintenance and Other expense, net. Care and maintenance primarily includes direct operating costs incurred at the mine sites during the period that these sites were temporarily placed into care and maintenance in response to the COVID-19 pandemic. For Other expense, net we exclude certain exceptional or unusual expenses, such as restructuring, as these are not indicative to sustaining our current operations. Furthermore, this adjustment to Other expense, net is also consistent with the nature of the adjustments made to Net income (loss) attributable to Newmont stockholders as disclosed in the Company’s non-GAAP financial measure Adjusted net income (loss). The allocation of these costs to gold and other metals is determined using the same allocation used in the allocation of CAS between gold and other metals at the Peñasquito, Boddington, and Phoenix mines.

Treatment and refining costs. Includes costs paid to smelters for treatment and refining of our concentrates to produce the salable metal. These costs are presented net as a reduction of Sales on our Consolidated Statements of Operations. The allocation of these costs to gold and other metals is determined using the same allocation used in the allocation of CAS between gold and other metals at the Peñasquito, Boddington, and Phoenix mines.

Sustaining capital and finance lease payments. We determined sustaining capital and finance lease payments as those capital expenditures and finance lease payments that are necessary to maintain current production and execute the current mine plan. We determined development (i.e. non-sustaining) capital expenditures and finance lease payments to be those payments used to develop new operations or related to projects at existing operations where those projects will materially benefit the operation and are excluded from the calculation of AISC. The classification of sustaining and development capital projects and finance leases is based on a systematic review of our project portfolio in light of the nature of each project. Sustaining capital and finance lease payments are relevant to the AISC metric as these are needed to maintain the Company’s current operations and provide improved transparency related to our ability to finance these expenditures from current operations. The allocation of these costs to gold and other metals is determined using the same allocation used in the allocation of CAS between gold and other metals at the Peñasquito, Boddington, and Phoenix mines.

Year Ended December 31, 2020Costs Applicable to Sales (1)(2)(3)Reclamation Costs (4)Advanced Projects, Research and Development and Exploration (5)General and AdministrativeCare and Maintenance and Other Expense, Net (6)(7)Treatment and Refining CostsSustaining Capital and Lease Related Costs (8)(9)All-In Sustaining CostsOunces (000) SoldAll-In Sustaining Costs Per oz. (10)
Gold
CC&V$245$6$11$—$1$—$41$304270$1,125
Red Lake45—1———450421,182
Musselwhite11727—25—27178971,838
Porcupine244214———39299319935
Éléonore18124—26—452582081,248
Peñasquito2864——204853411512806
Other North America——4103—118——
North America1,11816411075482101,5181,4481,049
Yanacocha345579130—374793391,414
Merian328441——41378464813
Cerro Negro16632—60—332642311,147
Other South America——3103——16——
South America83964181293—1111,1371,0341,100
Boddington579133——111257316681,094
Tanami251110———104366492745
Other Australia——1121—721——
Australia8301414121112361,1181,160964
Ahafo3759212—78467476980
Akyem234241—1—26286377757
Other Africa———7———7——
Africa60933383—104760853890
Nevada Gold Mines1,0121223102101601,2291,336920
Nevada1,0121223102101601,2291,336920
Corporate and Other——75217——42334——
Total Gold$4,408$139$174$269$174$69$863$6,0965,831$1,045
Gold equivalent ounces - other metals (11)
Peñasquito$499$7$1$—$19$142$106$774934$828
Boddington1072———6231381281,080
Total Gold Equivalent Ounces$606$9$1$—$19$148$129$9121,062$858
Consolidated$5,014$148$175$269$193$217$992$7,008

____________________________

(1)Excludes Depreciation and amortization and Reclamation and remediation.

(2)Includes by-product credits of $130 and excludes co-product revenues of $1,147.

(3)Includes stockpile and leach pad inventory adjustments of $18 at Yanacocha and $24 at NGM.

(4)Reclamation costs include operating accretion and amortization of asset retirement costs of $88 and $60, respectively, and exclude accretion and reclamation and remediation adjustments at former operating properties and historic mining operations that have entered the closure phase and have no substantive future economic value of $52 and $226, respectively.

(5)Advanced projects, research and development and Exploration excludes development expenditures of $4 at CC&V, $3 at Porcupine, $1 at Éléonore, $2 at Peñasquito, $4 at Other North America, $3 at Yanacocha, $7 at Merian, $2 at Cerro Negro, $28 at Other South America, $6 at Tanami, $15 at Other Australia, $20 at Ahafo, $8 at Akyem, $3 at Other Africa, $19 at NGM and $9 at Corporate and Other, totaling $134 related to developing new operations or major projects at existing operations where these projects will materially benefit the operation.

(6)Care and maintenance includes $28 at Musselwhite, $26 at Éléonore, $38 at Peñasquito, $27 at Yanacocha, $56 at Cerro Negro and $3 at Other South America of cash care and maintenance costs associated with the sites temporarily being placed into care and maintenance or operating at reduced levels in response to the COVID-19 pandemic, during the period ended December 31, 2020 that we would have continued to incur if the sites were not temporarily placed into care and maintenance.

(7)Other expense, net is adjusted for incremental costs of responding to the COVID-19 pandemic of $92, settlement costs of $58, Goldcorp transaction and integration costs of $23 and restructuring and severance of $18.

(8)Includes sustaining capital expenditures of $269 for North America, $111 for South America, $248 for Australia, $103 for Africa, $160 for Nevada, and $42 for Corporate and Other, totaling $933 and excludes development capital expenditures, capitalized interest and the change in accrued capital totaling $369. The following are major development projects: Musselwhite Materials Handling, Pamour, Éléonore Lower Mine Material Handling System, Quecher Main, Yanacocha Sulfides, Emilia, Tanami Expansion 2, Subika Mining Method Change, Ahafo North, Goldrush Complex, Turquoise Ridge 3rd shaft and Range Front Declines at Cortez.

(9)Includes finance lease payments for sustaining projects of $59 and excludes finance lease payments for development projects of $38.

(10)Per ounce measures may not recalculate due to rounding.

(11)Gold equivalent ounces is calculated as pounds or ounces produced multiplied by the ratio of the other metals price to the gold price, using Gold ($1,200/oz.), Copper ($2.75/lb.), Silver ($16.00/oz.), Lead ($0.95/lb.) and Zinc ($1.20/lb.) pricing for 2020.

Year Ended December 31, 2019Costs Applicable to Sales (1)(2)(3)Reclamation Costs (4)Advanced Projects, Research and Development and Exploration (5)General and AdministrativeOther Expense, Net (6)Treatment and Refining CostsSustaining Capital and Lease Related Costs**(7)(8)**All-In Sustaining CostsOunces (000) SoldAll-In Sustaining Costs Per oz. (9)
Gold
CC&V$290$4$6$1$3$—$38$342319$1,071
Red Lake13627———291741121,570
Musselwhite1326———254668,174
Porcupine18524———30221235935
Éléonore21414——1472672641,013
Peñasquito1162———2391591441,100
Other North America——1631—873——
North America954132864432161,2821,0801,187
Yanacocha400541028—33507529959
Merian297442——56363526689
Cerro Negro21021311—35262349753
Other South America———11———11——
South America9076027169—1241,1431,404814
Boddington575113——1466669710942
Tanami26629———82359500717
Kalgoorlie21643———312542281,114
Other Australia——4101—924——
Australia1,0571719101141881,3061,438908
Ahafo393520—1—98517630820
Akyem235323—4—28302421718
Other Africa——291——12——
Africa628372596—1268311,051791
Nevada Gold Mines49461255597624693901
Carlin3583931—644384081,076
Phoenix1163—1—7101371181,149
Twin Creeks113131——23141177800
Long Canyon361—1——74596466
Other Nevada——6———410——
Nevada1,1171430116122051,3951,492935
Corporate and Other——622033—21289——
Total Gold$4,663$141$191$313$29$29$880$6,2466,465$966
Gold equivalent ounces - other metals (10)
Peñasquito$387$7$3$—$7$66$116$586438$1,339
Boddington1172———812139145954
Phoenix282———133438894
Total Gold Equivalent Ounces$532$11$3$—$7$75$131$759621$1,222
Consolidated$5,195$152$194$313$36$104$1,011$7,005

____________________________

(1)Excludes Depreciation and amortization and Reclamation and remediation.

(2)Includes by-product credits of $94 and excludes co-product revenues of $691.

(3)Includes stockpile and leach pad inventory adjustments of $12 at CC&V, $16 at Yanacocha, $19 at Boddington, $20 at Akyem, $10 at NGM, $33 at Carlin, and $2 at Twin Creeks.

(4)Reclamation costs include operating accretion and amortization of asset retirement costs of $85 and $67, respectively, and exclude accretion and reclamation and remediation adjustments at former operating properties and historic mining operations that have entered the closure phase and have no substantive future economic value of $53 and $142, respectively.

(5)Advanced projects, research and development and Exploration excludes development expenditures of $7 at CC&V, $1 at Musselwhite, $10 at Porcupine, $4 at Éléonore, $3 at Peñasquito, $4 at Other North America, $14 at Yanacocha, $7 at Merian, $9 at Cerro Negro, $40 at Other South America, $3 at Tanami, $3 at Kalgoorlie, $20 at Other Australia, $13 at Ahafo, $11 at Akyem, $4 at Other Africa, $10 at NGM, $6 at Carlin, $1 at Phoenix, $2 at Twin Creeks, $12 at Long Canyon, $2 at Other Nevada and $35 at Corporate and Other, totaling $221 related to developing new operations or major projects at existing operations where these projects will materially benefit the operation.

(6)Other expense, net is adjusted for Goldcorp transaction and integration costs of $217, Nevada JV transaction and integration costs of $30, restructuring and severance of $7 and settlement costs of $5.

(7)Includes sustaining capital expenditures of $295 for North America, $124 for South America, $185 for Australia, $123 for Africa, $207 for Nevada and $21 for Corporate and Other, totaling $955 and excludes development capital expenditures, capitalized interest and the increase in accrued capital totaling $508. The following are major development projects: Borden, Musselwhite Materials Handling, Éléonore Lower Mine Material Handling System, Quecher Main, Yanacocha Sulfides, Tanami Expansion 2, Ahafo North, Subika Underground, Ahafo Mill Expansion, Goldrush Complex and Turquoise Ridge 3rd shaft.

(8)Includes finance lease payments for sustaining projects of $56 and excludes finance lease payments for development projects of $31.

(9)Per ounce measures may not recalculate due to rounding.

(10)Gold equivalent ounces is calculated as pounds or ounces produced multiplied by the ratio of the other metals price to the gold price, using Gold ($1,200/oz.), Copper ($2.75/lb.), Silver ($15.00/oz.), Lead ($0.90/lb.) and Zinc ($1.05/lb.) pricing.

Year Ended December 31, 2018Costs Applicable to Sales (1)(2)(3)Reclamation Costs (4)Advanced Projects, Research and Development and Exploration (5)General and AdministrativeOther Expense, Net (6)Treatment and Refining CostsSustaining Capital and Lease Related Costs (7)All-In Sustaining CostsOunces (000) SoldAll-In Sustaining Costs Per oz. (8)
Gold
CC&V$260$3$5$2$1$—$29$300357$840
Other North America——————————
North America2603521—29300357840
Yanacocha4254752——26505522967
Merian2752411—54337538627
Other South America———91——10——
South America700499122—808521,060804
Boddington5719———2146647726891
Tanami297217—1—68385505763
Kalgoorlie23244—1—21262322813
Other Australia—2510(5)—517——
Australia1,100172610(3)211401,3111,553845
Ahafo3233614—40377436864
Akyem22722112—40293415705
Other Africa——26———8——
Africa55025986—80678851794
Carlin76010247——1529539291,027
Phoenix20264219232472371,043
Twin Creeks2402921—40294359820
Long Canyon722—1——1186170505
Other Nevada——71——1523——
Nevada1,274204413292411,6031,695928
Corporate and Other——631991—12275——
Total Gold$3,884$114$156$244$9$30$582$5,0195,516$909
Gold equivalent ounces - other metals (9)
Boddington$132$2$—$—$—$12$10$156173$898
Phoenix5521——1867651,035
Total Gold Equivalent Ounces$187$4$1$—$—$13$18$223238$935
Consolidated$4,071$118$157$244$9$43$600$5,242

____________________________

(1)Excludes Depreciation and amortization and Reclamation and remediation.

(2)Includes by-product credits of $53 and excludes co-product revenues of $303.

(3)Includes stockpile and leach pad inventory adjustments of $5 at CC&V, $39 at Yanacocha, $33 at Ahafo, $34 at Akyem, $92 at Carlin and $32 at Twin Creeks. Total stockpile and leach pad inventory adjustments at Carlin of $114 were adjusted above by $22 related to the write-down at Emigrant due to a change in mine plan, resulting in a significant decrease in mine life in the third quarter of 2018.

(4)Reclamation costs include operating accretion and amortization of asset retirement costs of $60 and $58, respectively, and exclude accretion and reclamation and remediation adjustments at former operating properties and historic mining operations that have entered the closure phase and have no substantive future economic value of $44 and $59, respectively.

(5)Advanced projects, research and development and Exploration excludes development expenditures of $5 at CC&V, $49 at Yanacocha, $9 at Merian, $34 at Other South America, $6 at Kalgoorlie, $7 at Other Australia, $11 at Ahafo, $12 at Akyem, $3 at Other Africa, $10 at Carlin, $3 at Twin Creeks, $23 at Long Canyon, $16 at Other Nevada and $5 at Corporate and Other, totaling $193 related to developing new operations or major projects at existing operations where these projects will materially benefit the operation.

(6)Other expense, net is adjusted for settlement costs of $10 and restructuring and severance of $10.

(7)Excludes development capital expenditures, capitalized interest and changes in accrued capital, totaling $432. The following are major development projects during the period: Quecher Main, the Merian crusher, Tanami Expansion 2, Ahafo North, Subika Underground, Ahafo Mill Expansion and Twin Creeks Underground.

(8)Per ounce measures may not recalculate due to rounding.

(9)Gold equivalent ounces is calculated as pounds or ounces produced multiplied by the ratio of the other metals price to the gold price, using Gold ($1,250/oz.) and Copper ($2.70/lb.) pricing.

Accounting Developments

For a discussion of Recently Adopted and Recently Issued Accounting Pronouncements, see Note 2 to the Consolidated Financial Statements.

COVID-19 Assessment

In light of the COVID-19 pandemic described above we have reviewed and evaluated our long-lived assets for events or changes in circumstances that indicate that the related carrying amounts may not be recoverable. As of December 31, 2020, we determined that no impairment indicators existed at the balance sheet date, as the pandemic-related restrictions are viewed as temporary and are not expected to have a material impact on the Company’s ability to recover the carrying amounts of its long-lived assets, including those assets temporarily placed on care and maintenance during 2020.

We completed our annual goodwill impairment analysis of our reporting units as of December 31, 2020 and concluded there was no goodwill impairment. During the year, five of our mine sites were placed in care and maintenance. In spite of this, the fair value of these mine sites were not materially impacted as the mines were placed into care and maintenance for a temporary period only, with all of them being fully operational as of December 31, 2020, with the exception of Cerro Negro which continues to progress its ramp up.

We have been closely monitoring the COVID-19 pandemic and its impacts and potential impacts on our business. However, because of the changing developments with respect to the spread of COVID-19 and the unprecedented nature of the pandemic, we are unable to predict the extent and duration of any potential adverse financial impact of COVID-19 on our business, financial condition and results of operations. Future developments could impact our assessment and result in material impairments to our long-lived assets or goodwill.

Critical Accounting Estimates

Listed below are the accounting policies that we believe are critical to our financial statements due to the degree of uncertainty regarding the estimates or assumptions involved and the magnitude of the asset, liability, revenue or expense being reported. Our discussion of financial condition and results of operations is based upon the information reported in our Consolidated Financial Statements. The preparation of these Consolidated Financial Statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires us to make assumptions and estimates that affect the reported amounts of assets, liabilities, revenues, and expenses, as well as the disclosure of contingent assets and liabilities as of the date of our financial statements. We base our assumptions and estimates on historical experience and various other sources that we believe to be reasonable under the circumstances. Actual results may differ from the estimates we calculate due to changes in circumstances, global economics and politics, and general business conditions. A summary of our significant accounting policies is detailed in Note 2 to the Consolidated Financial Statements. We have outlined below those policies identified as being critical to the understanding of our business and results of operations and that require the application of significant management judgment.

Depreciation and amortization

Expenditures for new facilities or equipment and expenditures that extend the useful lives of existing facilities or equipment are capitalized and depreciated using the straight-line method at rates sufficient to amortize such costs over the estimated future lives of such facilities or equipment and their components. Facilities and equipment acquired as a part of a finance lease, build-to-suit or

other financing arrangement are capitalized and recorded based on the contractual lease terms. The facilities and equipment are depreciated using the straight-line method at rates sufficient to depreciate such costs over the lesser of the lease terms or the estimated productive lives of such facilities. These lives do not exceed the estimated mine life based on proven and probable reserves as the useful lives of these assets are considered to be limited to the life of the relevant mine.

Costs incurred to develop new properties are capitalized as incurred where it has been determined that the property can be economically developed based on the existence of proven and probable reserves. At our surface mines, these costs include costs to further delineate the ore body and remove overburden to initially expose the ore body. At our underground mines, these costs include the cost of building access ways, shaft sinking and access, lateral development, drift development, ramps and infrastructure development. All such costs are amortized using the units-of-production (“UOP”) method over the estimated life of the ore body based on estimated recoverable ounces to be produced from proven and probable reserves.

Major mine development costs incurred after the commencement of production, that are capitalized, are amortized using the UOP method based on estimated recoverable ounces to be produced from proven and probable reserves. To the extent that such costs benefit the entire ore body, they are amortized over the estimated recoverable ounces or pounds in proven and probable reserves of the entire ore body. Costs incurred to access specific ore blocks or areas that only provide benefit over the life of that block or area are amortized over the estimated recoverable ounces or pounds in proven and probable reserves of that specific ore block or area.

Capitalized asset retirement costs incurred are amortized according to how the related assets are being depreciated. Open pit and underground mining costs are amortized using the UOP method based on recoverable ounces by source. Other costs, including leaching facilities, tailing facilities, and mills and other infrastructure costs, are amortized using the straight-line method over the same estimated future lives of the associated assets.

The calculation of the UOP rate of amortization, and therefore the annual amortization charge to operations, could be materially impacted to the extent that actual production in the future is different from current forecasts of production based on proven and probable reserves. This would generally occur to the extent that there were significant changes in any of the factors or assumptions used in determining reserves. These changes could include: (i) an expansion of proven and probable reserves through exploration activities; (ii) differences between estimated and actual costs of production, due to differences in grade, metal recovery rates and foreign currency exchange rates; and (iii) differences between actual commodity prices and commodity price assumptions used in the estimation of reserves. If reserves decreased significantly, amortization charged to operations would increase; conversely, if reserves increased significantly, amortization charged to operations would decrease. Such changes in reserves could similarly impact the useful lives of assets depreciated on a straight-line basis, where those lives are limited to the life of the mine, which in turn is limited to the life of the proven and probable reserves.

The expected useful lives used in depreciation and amortization calculations are determined based on applicable facts and circumstances, as described above. Significant judgment is involved in the determination of useful lives, and no assurance can be given that actual useful lives will not differ significantly from the useful lives assumed for the purpose of depreciation and amortization calculations.

Carrying value of stockpiles

Stockpiles represent ore that has been extracted from the mine and is available for further processing. Mine sequencing may result in mining material at a faster rate than can be processed. We generally process the highest ore grade material first to maximize metal production; however, a blend of gold ore stockpiles may be processed to balance hardness and/or metallurgy in order to maximize throughput and recovery. Processing of lower grade stockpiled ore may continue after mining operations are completed. Sulfide copper ores are subject to oxidation over time which can reduce expected future recoveries. Stockpiles are measured by estimating the number of tons added and removed from the stockpile, the number of contained ounces or pounds (based on assay data), and the estimated metallurgical recovery rates (based on the expected processing method). Stockpile ore tonnages are verified by periodic surveys. Costs are added to stockpiles based on current mining costs, including applicable overhead and depreciation and amortization relating to mining operations and removed at each stockpile’s average cost per recoverable unit as material is processed.

We record stockpiles at the lower of average cost or net realizable value, and carrying values are evaluated at least quarterly. Net realizable value represents the estimated future sales price based on short-term and long-term metals price assumptions that are applied to expected short-term (12 months or less) and long-term sales from stockpiles, less estimated costs to complete production and bring the product to sale. The primary factors that influence the need to record write-downs of stockpiles include declines in short-term or long-term metals prices, increases in costs for production inputs such as labor, fuel and energy, materials and supplies, as well as realized ore grades and recovery rates. The significant assumption in determining the stockpile net realizable value for each mine site at December 31, 2020 is a long-term gold price of $1,500 per ounce. A decrease of $100 per ounce in the long-term gold price assumption will not result in a material write-down to the carrying value of the stockpiles.

Other assumptions include future operating and capital costs, metal recoveries, production levels, commodity prices, proven and probable reserve quantities, engineering data and other factors unique to each operation based on the life of mine plans, as well as long-term commodity prices and applicable U.S. dollar long-term exchange rates. If short-term and long-term commodity prices decrease, estimated future processing costs increase, or other negative factors occur, it may be necessary to record a write-down of

stockpiles. A high degree of judgment is involved in determining such assumptions and estimates and no assurance can be given that actual results will not differ significantly from those estimates and assumptions.

Refer to Note 22 of the Consolidated Financial Statements for further information regarding stockpiles.

Carrying value of ore on leach pads

Ore on leach pads represent ore that has been mined and placed on leach pads where a solution is applied to the surface of the heap to dissolve the gold, copper or silver. Costs are added to ore on leach pads based on current mining costs, including applicable depreciation and amortization relating to mining operations. Costs are removed from ore on leach pads as ounces are recovered based on the average cost per estimated recoverable ounce of gold or silver or pound of copper on the leach pad.

Estimates of recoverable ore on the leach pads are calculated from the quantities of ore placed on the leach pads (measured tons added to the leach pads), the grade of ore placed on the leach pads (based on assay data) and a recovery percentage (based on ore type). In general, leach pads recover between 50% and 95% of the recoverable ounces in the first year of leaching, declining each year thereafter until the leaching process is complete.

Although the quantities of recoverable metal placed on the leach pads are reconciled by comparing the grades of ore placed on pads to the quantities of metal actually recovered (metallurgical balancing), the nature of the leaching process inherently limits the ability to precisely monitor inventory levels. As a result, the metallurgical balancing process is constantly monitored and estimates are refined based on actual results over time. Historically, our operating results have not been materially impacted by variations between the estimated and actual recoverable quantities of metal on our leach pads. Variations between actual and estimated quantities resulting from changes in assumptions and estimates that do not result in write-downs to net realizable value are accounted for on a prospective basis. The significant assumption in determining the net realizable value for each mine site at December 31, 2020 is a long-term gold price of $1,500 per ounce. A decrease of $100 per ounce in the long-term gold price assumption will not result in a material write-down to the carrying value of the leach pads.

Other assumptions include future operating and capital costs, metal recoveries, production levels, proven and probable reserve quantities, engineering data and other factors unique to each operation based on the life of mine plans, as well as a long-term metal prices. If short-term and long-term commodity prices decrease, estimated future processing costs increase, or other negative factors occur, it may be necessary to record a write-down of ore on leach pads to net realizable value.

Refer to Note 22 of the Consolidated Financial Statements for further information regarding ore on leach pads.

Carrying value of long-lived assets

We review and evaluate our long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Significant negative industry or economic trends, adverse social or political developments, declines in our market capitalization, geo-technical difficulties, reduced estimates of future cash flows from our reporting segments or other disruptions to our business are a few examples of events that we monitor, as they could indicate that the carrying value of the Company’s long-lived assets, including development projects, may not be recoverable. In such cases, a recoverability test may be necessary to determine if an impairment charge is required.

For development projects, including our Conga project which is discussed further below, we review and evaluate changes to project plans and timing to determine continued technical, economic and social viability of the projects. If the Company determines to sell or abandon a project due to uncertainty from changes in circumstances related to technical, economic, social, political or community factors, or other evolving circumstances indicate that the carrying value may not be recoverable, then a recoverability test is performed to determine if an impairment charge should be recorded.

An impairment loss is measured and recorded based on the estimated fair value of the long-lived assets being tested for impairment and their carrying amounts. Fair value is typically determined through the use of an income approach utilizing estimates of discounted pre-tax future cash flows or a market approach utilizing recent transaction activity for comparable properties. These approaches are considered Level 3 fair value measurements. Occasionally, such as when an asset is held for sale, market prices are used. We believe our estimates and models used to determine fair value are similar to what a market participant would use.

The estimated undiscounted cash flows used to assess recoverability of long-lived assets and to measure the fair value of our mining operations are derived from current business plans, which are developed using short-term price forecasts reflective of the current price environment and our projections for long-term average metal prices. In addition to short- and long-term metal price assumptions, other assumptions include estimates of commodity-based and other input costs; proven and probable mineral reserves estimates, including the timing and cost to develop and produce the reserves; value beyond proven and probable reserve estimates; estimated future closure costs; and the use of appropriate discount rates.

The significant assumption in determining the future cash flows for each mine site at December 31, 2020 is a long-term gold price of $1,500 per ounce. A decrease of $100 per ounce in the long-term gold price assumption could result in an impairment of our

long-lived assets, including goodwill, of up to approximately $2,500 before consideration of other value beyond proven and probable reserves which may significantly decrease the amount of any potential impairment charge.

Other assumptions include proven and probable mineral reserve estimates, value beyond proven and probable reserve estimates, the timing and cost to develop and produce the reserves, commodity-based and other input costs, future closure costs and discount rates unique to each operation, as well as a long-term metal prices and applicable U.S. dollar long-term exchange rates. Refer to Quantitative and Qualitative Disclosures.

As discussed above under Depreciation and amortization, various factors could impact our ability to achieve our forecasted production schedules from proven and probable reserves which could impact the carrying value of our long-lived assets. The ability to achieve the estimated quantities of recoverable minerals from exploration stage mineral interests involves further risks in addition to those factors applicable to mineral interests where proven and probable reserves have been identified, due to the lower level of confidence that the identified mineralized material could ultimately be mined economically. Assets classified as exploration potential have the highest level of risk that the carrying value of the asset can be ultimately realized, due to the still lower level of geological confidence and economic modeling.

Events that could result in additional impairment of our long-lived assets include, but are not limited to, decreases in future metal prices, unfavorable changes in foreign exchange rates, increases in future closure costs, and any event that might otherwise have a material adverse effect on mine site cash flows.

Refer to Note 8 of the Consolidated Financial Statements for further information regarding impairments.

Goodwill

Goodwill represents the excess of the purchase price over the estimated fair value of the net assets acquired in a business acquisition. Goodwill is allocated to reporting units and tested for impairment annually as of December 31, 2020 and when events or changes in circumstances indicate that the carrying value of a reporting unit exceeds its fair value.

The Company generally elects to utilize the optional qualitative assessment for goodwill to determine whether it is more likely than not that the carrying value of a reporting unit is higher than its fair value. If it is determined that the fair value is more likely than not to be lower than the carrying value, a quantitative goodwill impairment test is performed by determining the fair value of the reporting unit. The fair value of a reporting unit is determined using either the income approach utilizing estimates of discounted future cash flows or the market valuation approach utilizing recent transaction activity for comparable properties. These approaches are considered Level 3 fair value measurements. If the carrying amount of the reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. Any impairment loss recognized in the current period is not reversed in the future periods. The Company recognizes its pro rata share of Goodwill and any subsequent goodwill impairment losses recorded by entities that are proportionately consolidated.

The estimated undiscounted cash flows used to assess the fair value of a reporting unit are derived from the Company’s current business plans, which are developed using short-term price forecasts reflective of the current price environment and management’s projections for long-term average metal prices. In addition to short- and long-term metal price assumptions, other assumptions include estimates of commodity-based and other input costs; proven and probable mineral reserves estimates, including the timing and cost to develop and produce the reserves; value beyond proven and probable estimates; and the use of appropriate discount rates.

Carrying value of Conga

We review and evaluate the Company’s Conga development project for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. We have considered a variety of technical, economic, social and political developments related to the Conga project during our evaluation of impairment indicators since November 2011, when construction and development activities at the project were largely suspended. Project activities in recent years have focused on continued engagement with the local communities and maintaining and protecting existing project infrastructure and equipment through our active care and maintenance program. Although we have reclassified Conga reserves to mineralized material and reallocated exploration and development capital to other projects, we continue to evaluate long-term options to progress development of the Conga project. From time to time, the Company will continue to evaluate opportunities to sell or find alternative uses for equipment and assets originally acquired for the Conga project that are currently in care and maintenance. We have reprioritized the Yanacocha Sulfides project ahead of the Conga project and expect it to provide an improved path to the future development of the Conga project through improved social and political acceptance in the neighboring area and region. The Company also periodically updates the economic model for its Conga project to understand changes to the estimated capital costs, cash flows, and economic returns from the project. As of December 31, 2020, we have not identified events or changes in circumstances that indicate that the carrying value of the Conga project is not recoverable.

Reclamation and remediation obligations

Reclamation costs are allocated to expense over the life of the related assets and are periodically adjusted to reflect changes in the estimated present value resulting from the passage of time and revisions to the estimates of either the timing or amount of the reclamation costs. Reclamation obligations are based on when the spending for an existing environmental disturbance will occur. Changes in reclamation estimates at mines that are not currently operating, as the mine or portion of the mine site has entered the closure phase and has no substantive future economic value, are reflected in earnings in the period an estimate is revised. We review, on at least an annual basis, the reclamation obligation at each mine.

Remediation costs are accrued based on management’s best estimate at the end of each period of the costs expected to be incurred at a site. Such cost estimates may include ongoing care, maintenance and monitoring costs. Changes in remediation estimates at inactive mines are reflected in earnings in the period an estimate is revised. Water treatment costs included in environmental remediation obligations are discounted to their present value as cash flows are readily estimable. All other costs of future expenditures for environmental remediation obligations are not discounted to their present value.

Accounting for reclamation and remediation obligations requires management to make estimates unique to each mining operation of the future costs we will incur to complete the reclamation and remediation work required to comply with existing laws and regulations. Any such changes in future costs, the timing of reclamation activities, scope, or the exclusion of certain costs not considered reclamation and remediation costs, could materially impact the amounts charged to earnings for reclamation and remediation. Additionally, future changes to environmental laws and regulations could increase the extent of reclamation and remediation work required.

Refer to Note 6 of the Consolidated Financial Statements for further information regarding reclamation and remediation obligations.

Income and mining taxes

We account for income taxes using the liability method, recognizing certain temporary differences between the financial reporting basis of our liabilities and assets and the related income tax basis for such liabilities and assets. This method generates either a net deferred income tax liability or asset for us, as measured by the statutory tax rates in effect. We derive our deferred income tax charge or benefit by recording the change in either the net deferred income tax liability or asset balance for the year. The financial statement effects of changes in tax law are recorded as discrete items in the period enacted as part of income tax expense or benefit from continuing operations, regardless of the category of income or loss to which the deferred taxes relate.

Mining taxes represent state and provincial taxes levied on mining operations and are classified as income taxes as such taxes are based on a percentage of mining profits. With respect to the earnings that we derive from the operations of our consolidated subsidiaries, in those situations where the earnings are indefinitely reinvested, no deferred taxes have been provided on the unremitted earnings (including the excess of the carrying value of the net equity of such entities for financial reporting purposes over the tax basis of such equity) of our consolidated companies.

Our operations are in multiple jurisdictions where uncertainties arise in the application of complex tax regulations. Some of these tax regimes are defined by contractual agreements with the local government, while others are defined by general tax laws and regulations. We are subject to reviews of our income tax filings and other tax payments, and disputes can arise with the taxing authorities over the interpretation of its contracts or laws. We recognize potential liabilities and record tax liabilities for anticipated tax audit issues in the U.S. and other tax jurisdictions based on our estimate of whether, and the extent to which, additional taxes will be due. We adjust these reserves in light of changing facts and circumstances; however, due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from our current estimate of the tax liabilities. If our estimate of tax liabilities proves to be less than the ultimate assessment, an additional charge to expense would result. If the estimate of tax liabilities proves to be greater than the ultimate assessment, a tax benefit would result. We recognize interest and penalties, if any, related to unrecognized tax benefits in Income and mining tax benefit (expense). In certain jurisdictions, we must pay a portion of the disputed amount to the local government in order to formally appeal the assessment. Such payment is recorded as a receivable if we believe the amount is ultimately collectible.

Valuation of deferred tax assets

Our deferred income tax assets include certain future tax benefits. We record a valuation allowance against any portion of those deferred income tax assets when we believe, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred income tax asset will not be realized. We review the likelihood that we will realize the benefit of our deferred tax assets and therefore the need for valuation allowances on a quarterly basis, or more frequently if events indicate that a review is required. In determining the requirement for a valuation allowance, the historical and projected financial results of the legal entity or consolidated group recording the net deferred tax asset is considered, along with all other available positive and negative evidence.

Certain categories of evidence carry more weight in the analysis than others based upon the extent to which the evidence may be objectively verified. We look to the nature and severity of cumulative pretax losses (if any) in the current three-year period ending on the evaluation date or the expectation of future pretax losses and the existence and frequency of prior cumulative pretax losses.

We utilize a rolling twelve quarters of pre-tax income or loss as a measure of our cumulative results in recent years. Concluding that a valuation allowance is not required is difficult when there is significant negative evidence which is objective and verifiable, such as cumulative losses in recent years. However, a cumulative three year loss is not solely determinative of the need for a valuation allowance. We also consider all other available positive and negative evidence in our analysis.

Other factors considered in the determination of the probability of the realization of the deferred tax assets include, but are not limited to:

  • Earnings history;

  • Projected future financial and taxable income based upon existing reserves and long-term estimates of commodity prices;

  • The duration of statutory carry forward periods;

  • Prudent and feasible tax planning strategies readily available that may alter the timing of reversal of the temporary difference;

  • Nature of temporary differences and predictability of reversal patterns of existing temporary differences; and

  • The sensitivity of future forecasted results to commodity prices and other factors.

The Company assesses available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize the existing deferred tax assets. A significant piece of objective negative evidence is recent pretax losses and/or expectations of future pretax losses. Such objective evidence limits the ability to consider other subjective evidence including projections for future growth. On the basis of this evaluation, a valuation allowance has been recorded in Peru. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight may be given to subjective evidence such as our projections for growth.

See Note 12 to the Consolidated Financial Statements for additional detail on the valuation allowance.

For additional risk factors that could impact the Company’s ability to realize the deferred tax assets, see Note 2 to the Consolidated Financial Statements.

Business Combinations

We recognize and measure the assets acquired and liabilities assumed in a business combination based on their estimated fair values at the acquisition date, while transaction and integration costs related to business combinations are expensed as incurred. Any excess of the purchase consideration when compared to the fair value of the net tangible and intangible assets acquired, if any, is recorded as goodwill. For material acquisitions, we engage independent appraisers to assist with the determination of the fair value of assets acquired, liabilities assumed, noncontrolling interest, if any, and goodwill, based on recognized business valuation methodologies. An income, market or cost valuation method may be utilized to estimate the fair value of the assets acquired, liabilities assumed, and noncontrolling interest, if any, in a business combination. The income valuation method represents the present value of future cash flows over the life of the asset using: (i) discrete financial forecasts, which rely on management’s estimates of reserve quantities and exploration potential, costs to produce and develop reserves, revenues, and operating expenses; (ii) long-term growth rates; (iii) appropriate discount rates; and (iv) expected future capital requirements (“income valuation method”). The market valuation method uses prices paid for a similar asset by other purchasers in the market, normalized for any differences between the assets (“market valuation method”). The cost valuation method is based on the replacement cost of a comparable asset at the time of the acquisition adjusted for depreciation and economic and functional obsolescence of the asset (“cost valuation method”). The fair value of property, plant and mine development is estimated to include the fair value of asset retirement costs of related long-lived tangible assets. If the initial accounting for the business combination is incomplete by the end of the reporting period in which the acquisition occurs, an estimate will be recorded. Subsequent to the acquisition date, and not later than one year from the acquisition date, we will record any material adjustments to the initial estimate based on new information obtained that would have existed as of the date of the acquisition. Any adjustment that arises from information obtained that did not exist as of the date of the acquisition will be recorded in the period the adjustments arises.

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