Newmont Corporation (NEM) Cash Flow Statement

The consistent OCF/NI ratio above 1.0, reaching as high as 4.67 in 2024Q1, suggests that reported earnings are backed by actual cash generation, not aggressive accruals. The gap between net income and operating cash flow is minimal, with D&A and working capital changes largely offsetting each other. This implies that earnings quality is solid, though the 2026Q2 net income included non-operating gains that may not recur.

The trajectory shows a clear upward trend, with FCF margins improving from mid-teens in 2024 to over 60% in 2026Q2, driven by higher gold prices and disciplined cost control. However, the 2025Q4 FCF of $5.8 billion was inflated by a positive $2.2 billion CapEx adjustment, likely a sale-leaseback or asset sale, which is not recurring. Excluding that, FCF remains strong but more volatile, indicating that investors should focus on the underlying cash generation capacity rather than one-off items.

The capital intensity is consistent with a mature gold producer, where most CapEx is sustaining rather than growth-oriented. The 2025Q4 positive CapEx of $2.2 billion is anomalous and likely represents a disposal or reimbursement, not a reversal of investment. The steady quarterly CapEx around $700-800 million suggests that Newmont is maintaining its asset base without significant expansion, which may limit future production growth but supports current cash flow.

The persistent negative working capital changes suggest that Newmont is investing in inventory and receivables as production and sales grow, which is typical for a mining company with long sales cycles. The 2025Q4 outflow was particularly large, possibly due to year-end inventory builds or slower collections. However, the 2025Q2 positive change of $156 million shows that these swings can reverse, and the overall impact on cash flow is manageable given the strong operating cash generation.

The capital deployment strategy has shifted from a conservative stance in early 2024 to aggressive buybacks in 2026, funded by record free cash flow. Dividends have remained stable at around $280 million per quarter, while buybacks have become the primary vehicle for returning excess cash. This suggests that management views the current gold price environment as favorable for reducing share count, but investors should monitor whether this pace is sustainable if gold prices decline.

The cumulative gap of $9.3 billion between operating cash flow and net income is largely explained by non-cash charges like D&A and working capital timing. This divergence is a positive signal, as it suggests that Newmont's earnings are backed by real cash generation, not accounting adjustments. However, the gap has narrowed in recent quarters as net income has surged, implying that the quality of earnings may be slightly lower at peak gold prices.