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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549Form 10-Q(Mark One)QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the Quarterly Period Ended March 31,2024or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from_to_Commission File Number:001-31240 NEWMONT CORPORATION(Exact name of registrant as specified in its charter)Delaware84-1611629(State or Other Jurisdiction of Incorporation or Organization)(I.R.S.Employer Identification No.)6900 E Layton AveDenver,Colorado80237(Address of Principal Executive Offices)(Zip Code)Registrants telephone number,including area code(303)863-7414Securities registered or to be registered pursuant to Section 12(b)of the Act.Title of each classTrading SymbolName of each exchange on which registeredCommon stock,par value$1.60 per shareNEMNew York Stock ExchangeIndicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant was required to file such reports),and(2)has been subject to such filing requirements for the past 90 days.Yes NoIndicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months(or for such shorter period that the registrant was required to submit such files).Yes NoIndicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting company,or an emerging growth company.See definitions of“large accelerated filer,”“accelerated filer,”“smaller reporting company,”and“emerging growth company”in Rule 12-b2 of the Exchange Act.Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting companyEmerging growth companyIf an emerging growth company,indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the registrant is a shell company(as defined in Rule 12-b2 of the Exchange Act).Yes NoThere were 1,153,140,195 shares of common stock outstanding on April 22,2024.Table of ContentsTABLE OF CONTENTSPART I FINANCIAL INFORMATIONPageGLOSSARY OF ABBREVIATIONS1FIRST QUARTER 2024 RESULTS AND HIGHLIGHTS2ITEM 1.FINANCIAL STATEMENTS6Condensed Consolidated Statements of Operations6Condensed Consolidated Statements of Comprehensive Income(Loss)7Condensed Consolidated Balance Sheets8Condensed Consolidated Statements of Cash Flows9Condensed Consolidated Statements of Changes in Equity10Notes to Condensed Consolidated Financial Statements11Note 1 Basis of Presentation11Note 2 Summary of Significant Accounting Policies11Note 3 Business Acquisition12Note 4 Segment Information15Note 5 Assets and Liabilities Held for Sale15Note 6 Sales19Note 7 Reclamation and Remediation20Note 8 Other Expense,Net22Note 9 Other Income(Loss),Net22Note 10 Income and Mining Taxes22Note 11 Fair Value Accounting23Note 12 Derivative Instruments25Note 13 Investments28Note 14 Inventories29Note 15 Stockpiles and Ore on Leach Pads29Note 16 Debt29Note 17 Other Liabilities30Note 18 Accumulated Other Comprehensive Income(Loss)30Note 19 Net Change in Operating Assets and Liabilities31Note 20 Commitments and Contingencies31ITEM 2.MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS36Overview36Consolidated Financial Results37Results of Consolidated Operations40Foreign Currency Exchange Rates43Liquidity and Capital Resources44Environmental49Non-GAAP Financial Measures49Accounting Developments56Safe Harbor Statement56ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK58ITEM 4.CONTROLS AND PROCEDURES60PART II OTHER INFORMATIONITEM 1.LEGAL PROCEEDINGS61ITEM 1A.RISK FACTORS61ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS61ITEM 3.DEFAULTS UPON SENIOR SECURITIES61ITEM 4.MINE SAFETY DISCLOSURES61ITEM 5.OTHER INFORMATION62ITEM 6.EXHIBITS63SIGNATURES64Table of ContentsGLOSSARY:UNITS OF MEASURE AND ABBREVIATIONSUnitUnit of Measure$United States Dollar%PercentA$Australian DollarC$Canadian DollargramMetric GramounceTroy OuncepoundUnited States PoundtonneMetric TonAbbreviationDescriptionAISC(1)All-In Sustaining CostsARCAsset Retirement CostASCFASB Accounting Standard CodificationASUFASB Accounting Standard UpdateAUDAustralian DollarCADCanadian DollarCASCosts Applicable to SalesDTADeferred tax assetDTLDeferred tax liabilityEBITDA(1)Earnings Before Interest,Taxes,Depreciation and AmortizationEIAEnvironmental Impact AssessmentEPAU.S.Environmental Protection AgencyESGEnvironmental,Social and GovernanceExchange ActU.S.Securities Exchange Act of 1934FASBFinancial Accounting Standards BoardGAAPU.S.Generally Accepted Accounting PrinciplesGEO(2)Gold Equivalent OuncesGHGGreenhouse Gases,which are defined by the EPA as gases that trap heat in the atmosphereGITSMGlobal Industry Standard on Tailings ManagementIASBInternational Accounting Standards BoardIFRSInternational Financial Reporting StandardsLIBORLondon Interbank Offered RateLBMALondon Bullion Market AssociationLMELondon Metal ExchangeMD&AManagements Discussion and Analysis of Consolidated Financial Condition and Results of OperationsMINAMMinistry of the Environment of PeruMine ActU.S.Federal Mine Safety and Health Act of 1977MINEMMinistry of Energy and Mines of PeruMSHAFederal Mine Safety and Health AdministrationMXNMexican PesoNPDESNational Pollutant Discharge Elimination SystemSECU.S.Securities and Exchange CommissionSecurities ActU.S.Securities Act of 1933SOFRSecured Overnight Financing RateU.S.The United States of AmericaUSDUnited States DollarWTPWater Treatment Plant_(1)Refer to Non-GAAP Financial Measures within Part I,Item 2,MD&A.(2)Refer to Results of Consolidated Operations within Part I,Item 2,MD&A.Table of Contents1NEWMONT CORPORATIONFIRST QUARTER 2024 RESULTS AND HIGHLIGHTS(unaudited,in millions,except per share,per ounce and per pound)Three Months EndedMarch 31,20242023Financial Results:Sales$4,023$2,679 Gold$3,341$2,303 Copper$297$110 Silver$201$117 Lead$60$32 Zinc$124$117 Costs applicable to sales(1)$2,106$1,482 Gold$1,690$1,239 Copper$161$53 Silver$111$82 Lead$36$22 Zinc$108$86 Net income(loss)from continuing operations$175$351 Net income(loss)$179$363 Net income(loss)from continuing operations attributable to Newmont stockholders$166$339 Per common share,diluted:Net income(loss)from continuing operations attributable to Newmont stockholders$0.15$0.42 Net income(loss)attributable to Newmont stockholders$0.15$0.44 Adjusted net income(loss)(2)$630$320 Adjusted net income(loss)per share,diluted(2)$0.55$0.40 Earnings before interest,taxes and depreciation and amortization(2)$1,175$1,065 Adjusted earnings before interest,taxes and depreciation and amortization(2)$1,694$990 Net cash provided by(used in)operating activities of continuing operations$776$481 Free cash flow(2)$(74)$(45)Cash dividends paid per common share in the period ended March 31$0.25$0.40 Cash dividends declared per common share for the period ended March 31$0.25$0.40 _(1)Excludes Depreciation and amortization and Reclamation and remediation.(2)Refer to Non-GAAP Financial Measures within Part I,Item 2,MD&A.Table of Contents2NEWMONT CORPORATIONFIRST QUARTER 2024 RESULTS AND HIGHLIGHTS(unaudited,in millions,except per share,per ounce and per pound)Three Months EndedMarch 31,20242023Operating Results:Consolidated gold ounces(thousands):Produced 1,619 1,233 Sold 1,599 1,208 Attributable gold ounces(thousands):Produced(1)1,675 1,273 Sold(2)1,581 1,188 Consolidated and attributable gold equivalent ounces-other metals(thousands):(3)Produced 489 288 Sold 502 265 Consolidated and attributable-other metals:Produced copper:Pounds(millions)81 26 Tonnes(thousands)36 12 Sold copper:Pounds(millions)80 26 Tonnes(thousands)36 12 Produced silver(million ounces)9 7 Sold silver(million ounces)10 6 Produced lead:Pounds(millions)61 41 Tonnes(thousands)28 19 Sold lead:Pounds(millions)65 36 Tonnes(thousands)29 17 Produced zinc:Pounds(millions)127 102 Tonnes(thousands)58 46 Sold zinc:Pounds(millions)135 99 Tonnes(thousands)61 45 Average realized price:Gold(per ounce)$2,090$1,906 Copper(per pound)$3.72$4.18 Silver(per ounce)$20.41$19.17 Lead(per pound)$0.92$0.86 Zinc(per pound)$0.92$1.18 Consolidated costs applicable to sales:(4)(5)Gold(per ounce)$1,057$1,025 Gold equivalent ounces-other metals(per ounce)(3)$829$918 All-in sustaining costs:(5)Gold(per ounce)$1,439$1,376 Gold equivalent ounces-other metals(per ounce)(3)$1,148$1,322 _(1)Attributable gold ounces produced includes 54 and 60 thousand ounces for the three months ended March 31,2024 and 2023,respectively,related to the Pueblo Viejo mine,which is 40%owned by Newmont and accounted for as an equity method investment.For the three months ended March 31,2024,Attributable gold ounces produced also includes 21 thousand ounces related to the Fruta del Norte mine,which is wholly owned Table of Contents3by Lundin Gold,in which the Company holds a 31.9%interest at March 31,2024 and is accounted for as an equity method investment on a quarter lag.(2)Attributable gold ounces sold excludes ounces related to the Pueblo Viejo mine and the Fruta del Norte mine.(3)Gold equivalent ounces are calculated as pounds or ounces produced or sold multiplied by the ratio of the other metals price to the gold price.Refer to Results of Consolidated Operations within Part I,Item 2,MD&A for further information.(4)Excludes Depreciation and amortization and Reclamation and remediation.(5)Refer to Non-GAAP Financial Measures within Part I,Item 2,MD&A.Table of Contents4First Quarter 2024 Highlights(dollars in millions,except per share,per ounce and per pound amounts)Net income:Reported Net income(loss)from continuing operations attributable to Newmont stockholders of$166 or$0.15 per diluted share,a decrease of$173 from the prior-year quarter primarily due to the Loss on assets held for sale of$485 and an increase in Costs applicable to sales,partially offset by an increase in Sales resulting from higher sales volumes for all metals and a higher average realized price for gold,an increase to attributable net income of$224 related to the acquired Newcrest sites,and higher production at Tanami,compared to the prior period,due to significant rainfall in early 2023.Adjusted net income:Reported Adjusted net income of$630 or$0.55 per diluted share,an increase of$0.15 per diluted share from the prior-year quarter(see Non-GAAP Financial Measures within Part I,Item 2,MD&A).Adjusted EBITDA:Reported$1,694 in Adjusted EBITDA,an increase of 71%from the prior-year quarter(see Non-GAAP Financial Measures within Part I,Item 2,MD&A).Cash flow:Reported Net cash provided by(used in)operating activities of$776,an increase of 61%from the prior year,and free cash flow of$(74)(see Non-GAAP Financial Measures within Part I,Item 2,MD&A).Net cash provided by(used in)operating activities included a payment of$291 on the Stamp Duty,related to the Newcrest transaction,in the first quarter of 2024.Portfolio Updates:Announced intent to divest six non-core assets,which include CC&V,Musselwhite,Porcupine,lonore,Telfer and Akyem,as well as the Coffee development project in Canada.ESG:In April 2024,published our Annual Sustainability Report,providing a transparent view of ESG performance,and the Taxes and Royalties Contribution Report,providing an overview of the Companys tax strategy and economic contributions as part of its commitment to shared value creation.Attributable gold production:Produced 1.7 million attributable ounces of gold and 489 thousand attributable gold equivalent ounces from co-products.Financial strength:Ended the quarter with$2.3 billion of consolidated cash,cash of$342 included in Current assets held for sale,and$6.7 billion of total liquidity;declared a dividend of$0.25 per share in April 2024.Table of Contents5PART IFINANCIAL INFORMATIONITEM 1.FINANCIAL STATEMENTS.NEWMONT CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(unaudited,in millions except per share)Three Months EndedMarch 31,20242023Sales(Note 6)$4,023$2,679 Costs and expenses:Costs applicable to sales(1)2,106 1,482 Depreciation and amortization 654 461 Reclamation and remediation(Note 7)98 66 Exploration 53 48 Advanced projects,research and development 53 35 General and administrative 101 74 Loss on assets held for sale(Note 5)485 Other expense,net(Note 8)73 8 3,623 2,174 Other income(expense):Other income(loss),net(Note 9)121 99 Interest expense,net of capitalized interest(93)(65)28 34 Income(loss)before income and mining tax and other items 428 539 Income and mining tax benefit(expense)(Note 10)(260)(213)Equity income(loss)of affiliates(Note 13)7 25 Net income(loss)from continuing operations 175 351 Net income(loss)from discontinued operations 4 12 Net income(loss)179 363 Net loss(income)attributable to noncontrolling interests(Note 1)(9)(12)Net income(loss)attributable to Newmont stockholders$170$351 Net income(loss)attributable to Newmont stockholders:Continuing operations$166$339 Discontinued operations 4 12$170$351 Weighted average common shares(millions):Basic1,153794Effect of employee stock-based awards1Diluted1,153795Net income(loss)attributable to Newmont stockholders per common share:Basic:Continuing operations$0.15$0.42 Discontinued operations 0.02$0.15$0.44 Diluted:Continuing operations$0.15$0.42 Discontinued operations 0.02$0.15$0.44 _(1)Excludes Depreciation and amortization and Reclamation and remediation.The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.Table of Contents6NEWMONT CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(LOSS)(unaudited,in millions)Three Months EndedMarch 31,20242023Net income(loss)$179$363 Other comprehensive income(loss):Change in marketable securities,net of tax (1)Foreign currency translation adjustments 5 (1)Change in pension and other post-retirement benefits,net of tax (1)Change in cash flow hedges,net of tax(35)(3)Other comprehensive income(loss)(30)(6)Comprehensive income(loss)$149$357 Comprehensive income(loss)attributable to:Newmont stockholders$140$345 Noncontrolling interests 9 12$149$357 The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.Table of Contents7NEWMONT CORPORATIONCONDENSED CONSOLIDATED BALANCE SHEETS(unaudited,in millions)At March 31,2024At December 31,2023ASSETSCash and cash equivalents$2,336$3,002 Trade receivables(Note 6)782 734 Investments(Note 13)23 23 Inventories(Note 14)1,385 1,663 Stockpiles and ore on leach pads(Note 15)745 979 Derivative assets(Note 12)114 198 Other current assets 765 913 Current assets held for sale(Note 5)5,656 Current assets 11,806 7,512 Property,plant and mine development,net 33,564 37,563 Investments(Note 13)4,138 4,143 Stockpiles and ore on leach pads(Note 15)1,837 1,935 Deferred income tax assets 210 268 Goodwill 2,792 3,001 Derivative assets(Note 12)412 444 Other non-current assets 576 640 Total assets$55,335$55,506 LIABILITIESAccounts payable$698$960 Employee-related benefits 414 551 Income and mining taxes payable 136 88 Lease and other financing obligations 99 114 Debt(Note 16)1,923 Other current liabilities(Note 17)1,784 2,362 Current liabilities held for sale(Note 5)2,351 Current liabilities 5,482 5,998 Debt(Note 16)8,933 6,951 Lease and other financing obligations 436 448 Reclamation and remediation liabilities(Note 7)6,652 8,167 Deferred income tax liabilities 3,094 2,987 Employee-related benefits 610 655 Silver streaming agreement 753 779 Other non-current liabilities(Note 17)300 316 Total liabilities 26,260 26,301 Commitments and contingencies(Note 20)EQUITYCommon stock 1,855 1,854 Treasury stock(274)(264)Additional paid-in capital 30,436 30,419 Accumulated other comprehensive income(loss)(Note 18)(16)14(Accumulated deficit)Retained earnings (3,111)(2,996)Newmont stockholders equity 28,890 29,027 Noncontrolling interests 185 178 Total equity 29,075 29,205 Total liabilities and equity$55,335$55,506 The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.Table of Contents8NEWMONT CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(unaudited,in millions)Three Months EndedMarch 31,20242023Operating activities:Net income(loss)$179$363 Non-cash adjustments:Depreciation and amortization 654 461 Loss on assets held for sale(Note 5)485 Net(income)loss from discontinued operations(4)(12)Reclamation and remediation 94 61 Deferred income taxes 53 15 Change in fair value of investments(Note 9)(31)(41)Other non-cash adjustments 12 (4)Net change in operating assets and liabilities(Note 19)(666)(362)Net cash provided by(used in)operating activities 776 481 Investing activities:Additions to property,plant and mine development (850)(526)Proceeds from asset and investment sales 35 181 Return of investment from equity method investees 25 Purchases of investments (23)(525)Contributions to equity method investees(15)(41)Proceeds from maturities of investments 557 Other 30 12 Net cash provided by(used in)investing activities (798)(342)Financing activities:Proceeds from issuance of debt,net 3,476 Repayment of debt(3,423)Dividends paid to common stockholders(288)(318)Distributions to noncontrolling interests(41)(34)Funding from noncontrolling interests 22 41 Payments on lease and other financing obligations(18)(16)Payments for withholding of employee taxes related to stock-based compensation(10)(22)Other(17)(1)Net cash provided by(used in)financing activities(299)(350)Effect of exchange rate changes on cash,cash equivalents and restricted cash(3)(8)Net change in cash,cash equivalents and restricted cash,including cash and restricted cash reclassified to assets held for sale(324)(219)Less:cash and restricted cash reclassified to assets held for sale(1)(395)Net change in cash,cash equivalents and restricted cash(719)(219)Cash,cash equivalents and restricted cash at beginning of period 3,100 2,944 Cash,cash equivalents and restricted cash at end of period$2,381$2,725 Reconciliation of cash,cash equivalents and restricted cash:Cash and cash equivalents$2,336$2,657 Restricted cash included in other current assets 6 1 Restricted cash included in other non-current assets 39 67 Total cash,cash equivalents and restricted cash$2,381$2,725 _(1)During the first quarter of 2024,certain non-core assets were determined to meet the criteria for assets held for sale.As a result,the related assets and liabilities,including$342 of Cash and cash equivalents and$53 of restricted cash,included in Other current assets and Other non-current assets,were reclassified to Current assets held for sale and Current liabilities held for sale,respectively.Refer to Note 5 for additional information.The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.Table of Contents9NEWMONT CORPORATIONCONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY(unaudited,in millions)Common StockTreasury StockAdditionalPaid-InCapitalAccumulatedOtherComprehensiveIncome(Loss)RetainedEarnings(AccumulatedDeficit)NoncontrollingInterestsTotalEquitySharesAmountSharesAmountBalance at December 31,2023 1,159$1,854 (7)$(264)$30,419$14$(2,996)$178$29,205 Net income(loss)170 9 179 Other comprehensive income(loss)(30)(30)Dividends declared(1)(285)(285)Distributions declared to noncontrolling interests (35)(35)Cash calls requested from noncontrolling interests 33 33 Withholding of employee taxes related to stock-based compensation (10)(10)Stock-based awards and related share issuances 1 1 17 18 Balance at March 31,2024 1,160$1,855 (7)$(274)$30,436$(16)$(3,111)$185$29,075 _(1)Cash dividends paid per common share were$0.25 for the three months ended March 31,2024.Common StockTreasury StockAdditionalPaid-InCapitalAccumulatedOtherComprehensiveIncome(Loss)RetainedEarnings(AccumulatedDeficit)NoncontrollingInterestsTotalEquitySharesAmountSharesAmountBalance at December 31,2022 799$1,279 (6)$(239)$17,369$29$916$179$19,533 Net income(loss)351 12 363 Other comprehensive income(loss)(6)(6)Dividends declared(1)(319)(319)Distributions declared to noncontrolling interests (40)(40)Cash calls requested from noncontrolling interests 31 31 Withholding of employee taxes related to stock-based compensation (1)(22)(22)Stock-based awards and related share issuances 1 2 17 19 Balance at March 31,2023 800$1,281 (7)$(261)$17,386$23$948$182$19,559 _(1)Cash dividends paid per common share were$0.40 for the three months ended March 31,2023.The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.Table of Contents10NOTE 1 BASIS OF PRESENTATIONThe interim Condensed Consolidated Financial Statements(“interim statements”)of Newmont Corporation,a Delaware corporation and its subsidiaries(collectively,“Newmont,”“we,”“us,”or the“Company”)are unaudited.In the opinion of management,all normal recurring adjustments and disclosures necessary for a fair presentation of these interim statements have been included.The results reported in these interim statements are not necessarily indicative of the results that may be reported for the entire year.These interim statements should be read in conjunction with Newmonts Consolidated Financial Statements for the year ended December 31,2023 filed on February 29,2024 on Form 10-K.The year-end balance sheet data was derived from the audited financial statements and,in accordance with the instructions to Form 10-Q,certain information and footnote disclosures required by GAAP have been condensed or omitted.Newcrest TransactionOn November 6,2023,the Company completed its business combination transaction with Newcrest Mining Limited,a public Australian mining company limited by shares(Newcrest),whereby Newmont,through Newmont Overseas Holdings Pty Ltd,an Australian proprietary company limited by shares(“Newmont Sub”),acquired all of the ordinary shares of Newcrest in a fully stock transaction for total non-cash consideration of$13,549.Newcrest became a direct wholly owned subsidiary of Newmont Sub and an indirect wholly owned subsidiary of Newmont(such acquisition,the“Newcrest transaction”).The combined company continues to be traded on the New York Stock Exchange under the ticker NEM.The combined company is also listed on the Toronto Stock Exchange under the ticker NGT,on the Australian Securities Exchange under the ticker NEM,and on the Papua New Guinea Securities Exchange under the ticker NEM.Refer to Note 3 for further information.Noncontrolling InterestsNet loss(income)attributable to noncontrolling interest is comprised of income of$9 and$12 for the three months ended March 31,2024 and 2023,respectively,related to Suriname Gold project C.V.(“Merian”).Newmont consolidates Merian through its wholly-owned subsidiary,Newmont Suriname LLC.,in its Condensed Consolidated Financial Statements as the primary beneficiary of Merian,which is a variable interest entity.NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESRisks and UncertaintiesAs a global mining company,the Companys revenue,profitability and future rate of growth are substantially dependent on prevailing metal prices,primarily for gold,but also for copper,silver,lead,and zinc.Historically,the commodity markets have been very volatile,and there can be no assurance that commodity prices will not be subject to wide fluctuations in the future.A substantial or extended decline in commodity prices could have a material adverse effect on the Companys financial position,results of operations,cash flows,access to capital and on the quantities of reserves that the Company can economically produce.The carrying value of the Companys Property,plant and mine development,net;Inventories;Stockpiles and ore on leach pads;Investments;certain Derivative assets;Deferred income tax assets;and Goodwill are particularly sensitive to the outlook for commodity prices.A decline in the Companys price outlook from current levels could result in material impairment charges related to these assets.Our global operations expose us to risks associated with public health crises,including epidemics and pandemics such as COVID-19,and geopolitical and macroeconomic pressures such as the Russian invasion of Ukraine.The Company continues to experience the impacts from recent geopolitical and macroeconomic pressures.With the resulting volatile environment,the Company continues to monitor inflationary conditions,the effects of certain countermeasures taken by central banks,and the potential for further supply chain disruptions as well as an uncertain and evolving labor market.The following factors could have further potential short-and,possibly,long-term material adverse impacts on the Company including,but not limited to,volatility in commodity prices and the prices for gold and other metals,changes in the equity and debt markets or country specific factors adversely impacting discount rates,significant cost inflation impacts on production,capital and asset retirement costs,logistical challenges,workforce interruptions and financial market disruptions,energy market disruptions,as well as potential impacts to estimated costs and timing of projects.Refer to Note 20 below for further information on risks and uncertainties that could have a potential impact on the Company as well as Note 2 of the Consolidated Financial Statements included in Part II of the Companys Annual Report on Form 10-K for the year ended December 31,2023 filed with the SEC on February 29,2024.The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the accounting for and recognition and disclosure of assets,liabilities,equity,revenues and expenses.The Company must make these estimates and assumptions because certain information used is dependent on future events,cannot be calculated with a high degree of precision from data available or simply cannot be readily calculated based on generally accepted methodologies.Actual results could differ from these estimates.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)11Assets Held for SaleWe classify long-lived assets,or disposal groups comprising of assets and liabilities,as held for sale in the period in which the following six criteria are met,(i)management,having the authority to approve the action,commits to a plan to sell the property;(ii)the property is available for immediate sale in its present condition,subject only to terms that are usual and customary;(iii)an active program to locate a buyer and other actions required to complete the plan to sell have been initiated;(iv)the sale of the property is probable and is expected to be completed within one year;(v)the property is being actively marketed for sale at a price that is reasonable in relation to its current fair value;and(vi)actions necessary to complete the plan of sale indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.The Company ceases depreciation and amortization on long-lived assets(or disposal groups)classified as held for sale,and measures them at the lower of carrying value or estimated fair value less cost to sell.ReclassificationsCertain amounts and disclosures in prior years have been reclassified to conform to the current year presentation.Recently Adopted Accounting Pronouncements and Securities and Exchange Commission RulesEffects of Reference Rate ReformIn March 2020,ASU No.2020-04 was issued which provides optional guidance for a limited period of time to ease the potential burden on accounting for contract modifications caused by reference rate reform.In January 2021,ASU No.2021-01 was issued which broadened the scope of ASU No.2020-04 to include certain derivative instruments.In December 2022,ASU No.2022-06 was issued which deferred the sunset date of ASU No.2020-04.The guidance is effective for all entities as of March 12,2020 through December 31,2024.The guidance may be adopted over time as reference rate reform activities occur and should be applied on a prospective basis.The Company has completed its review of key contracts and does not expect the guidance to have a material impact to the consolidated financial statements or disclosures.The Company will continue to review new contracts to identify references to the LIBOR and implement adequate fallback provisions if not already implemented to mitigate the risks or impacts from the transition.Recently Issued Accounting Pronouncements and Securities and Exchange Commission RulesSEC Final Climate RuleIn March 2024,the SEC issued a final rule that requires registrants to disclose climate-related information in their annual reports and in registration statements.In April 2024,the SEC chose to stay the newly adopted rulemaking pending judicial review of related consolidated Eighth Circuit petitions.If the stay is lifted,certain disclosures may be required in annual reports for the year ending December 31,2025,filed in 2026.The Company is currently evaluating the impacts of the rules on its consolidated financial statements.Improvement to Income Tax DisclosuresIn December 2023,ASU 2023-09 was issued which requires disaggregated information about the effective tax rate reconciliation and additional information on taxes paid that meet a qualitative threshold.The new guidance is effective for annual reporting periods beginning after December 15,2024,with early adoption permitted.The Company is currently evaluating the impacts of the guidance on its consolidated financial statements.Segments ReportingIn November 2023,ASU 2023-07 was issued which improves disclosures about a public entitys reportable segments and addresses requests from investors and other allocators of capital for additional,more detailed information about a reportable segments expenses.The ASU applies to all public entities that are required to report segment information in accordance with ASC 280 and is effective starting in annual periods beginning after December 15,2023.The adoption is not expected to have a material impact on the Companys consolidated financial statements or disclosures.NOTE 3 BUSINESS ACQUISITIONOn November 6,2023(the“acquisition date”),Newmont completed its business combination transaction with Newcrest,a public Australian mining company limited by shares,whereby Newmont,through Newmont Sub,acquired all of the ordinary shares of Newcrest,pursuant to a court-approved scheme of arrangement under Part 5.1 of the Australian Corporations Act 2001(Cth)between Newcrest and its shareholders,as contemplated by a scheme implementation deed,dated as of May 15,2023,by and among Newmont,Newmont Sub and Newcrest,as amended from time to time.Upon implementation,Newmont completed the business acquisition of Newcrest,in which Newmont was the acquirer and Newcrest became a direct wholly owned subsidiary of Newmont Sub and an indirect wholly owned subsidiary of Newmont(such acquisition,the“Newcrest transaction”).The acquisition of Newcrest increased the Companys gold and other metal reserves and expanded the operating jurisdictions.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)12The acquisition date fair value of the consideration transferred consisted of the following:(in millions,except share and per share data)SharesPer SharePurchase ConsiderationStock ConsiderationShares of Newmont exchanged for Newcrest outstanding ordinary shares 357,691,627$37.88$13,549 Total Purchase Price$13,549 The Company retained an independent appraiser to determine the fair value of assets acquired and liabilities assumed.In accordance with the acquisition method of accounting,the purchase price of Newcrest has been allocated to the acquired assets and assumed liabilities based on their estimated acquisition date fair values.The fair value estimates were based on income,market and cost valuation methods.The excess of the total consideration over the estimated fair value of the amounts initially assigned to the identifiable assets acquired and liabilities assumed has been recorded as goodwill,which is not deductible for income tax purposes.The goodwill balance is mainly attributable to:(i)the acquisition of existing operating mines with access to an assembled workforce that cannot be duplicated at the same costs by new entrants;(ii)operating synergies anticipated from the integration of the operations of Newmont and Newcrest;and(iii)the application of Newmonts Full Potential program and potential strategic and financial benefits that include the increase in reserve base and opportunities to identify additional mineralization through exploration activities.As of March 31,2024,the Company had not yet fully completed the analysis to assign fair values to all assets acquired and liabilities assumed,and therefore the purchase price allocation for Newcrest is preliminary.At March 31,2024,remaining items to finalize include the fair value of materials and supplies inventories,property plant and mine development,goodwill,reclamation and remediation liabilities,employee-related benefits,unrecognized tax benefits,and deferred income tax assets and liabilities.The preliminary purchase price allocation will be subject to further refinement as the Company continues to implement Newmont accounting policies and refine its estimates and assumptions based on information available at the acquisition date.These refinements may result in material changes to the estimated fair value of assets acquired and liabilities assumed.The purchase price allocation adjustments can be made throughout the end of Newmonts measurement period,which is not to exceed one year from the acquisition date.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)13The following table summarizes the preliminary purchase price allocation for the Newcrest transaction as of March 31,2024:ASSETSMarch 31,2024Cash and cash equivalents$668 Trade receivables 212 Inventories 722 Stockpiles and ore on leach pads 137 Derivative assets 42 Other current assets 194 Current assets 1,975 Property,plant and mine development,net(1)13,509 Investments 990 Stockpiles and ore on leach pads 131 Deferred income tax assets(2)179 Goodwill(3)2,535 Derivative assets 362 Other non-current assets 93 Total assets 19,774 LIABILITIESAccounts payable 344 Employee-related benefits 143 Lease and other financing obligations 16 Debt 1,923 Other current liabilities 336 Current liabilities 2,762 Debt 1,373 Lease and other financing obligations 35 Reclamation and remediation liabilities 393 Deferred income tax liabilities(2)1,429 Employee-related benefits 222 Other non-current liabilities 11 Total liabilities 6,225 Net assets acquired$13,549 _(1)During the first quarter of 2024,measurement period adjustments of$326 increased Property,plant and mine development,net,from refinements to the preliminary valuation of the Canadian assets.(2)Deferred income tax assets and liabilities represent the future tax benefit or future tax expense associated with the differences between the preliminary fair value allocated to assets(excluding goodwill)and liabilities and a tax basis increase to the preliminary fair value of the assets acquired in Australia and the historical carryover tax basis of assets and liabilities in all other jurisdictions.No deferred tax liability is recognized for the basis difference inherent in the preliminary fair value allocated to goodwill.Current period adjustments resulted in deferred income tax assets decreasing by$10 and deferred income tax liabilities increasing by$98 during the quarter.(3)Preliminary goodwill is attributable to reportable segments as follows:$1,089 to Brucejack;$404 to Red Chris;$427 to Cadia;and$615 to Lihir.During the first quarter of 2024,the Company identified and recorded measurement period adjustments to the Companys preliminary purchase price allocation,as a result of additional analysis performed.These adjustments resulted in a reduction in Goodwill of$209.Sales and Net income(loss)attributable to Newmont stockholders in the Condensed Consolidated Statement of Operations includes Newcrest revenue of$992 and Newcrest net income(loss)of$224 for the three months ended March 31,2024.Pro Forma Financial InformationThe following unaudited pro forma financial information presents consolidated results assuming the Newcrest transaction occurred on January 1,2022.Three Months EndedMarch 31,2023Sales$3,862 Net income(loss)attributable to Newmont stockholders$593 Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)14NOTE 4 SEGMENT INFORMATIONThe Company regularly reviews its segment reporting for alignment with its strategic goals and operational structure as well as for evaluation of business performance and allocation of resources by Newmonts Chief Operating Decision Maker(CODM).The reportable segments of the Company comprise each of its 17 mining operations that it manages,which includes its 70.0%proportionate interest in Red Chris,and its 38.5%proportionate interest in Nevada Gold Mines(NGM)which it does not directly manage.In the following tables,Income(loss)before income and mining tax and other items from reportable segments does not reflect general corporate expenses,interest(except project-specific interest)or income and mining taxes.Intercompany revenue and expense amounts have been eliminated within each segment in order to report on the basis that management uses internally for evaluating segment performance.The Companys business activities and operating segments that are not considered reportable,including all equity method investments,are reported in Corporate and Other,which has been provided for reconciliation purposes.The financial information relating to the Companys segments is as follows:Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)15SalesCosts Applicable to SalesDepreciation and AmortizationAdvanced Projects,Research and Development and ExplorationIncome(Loss)before Income and Mining Tax and Other ItemsCapital Expenditures(1)Three Months Ended March 31,2024Brucejack(2)$72$74$35$(37)$16 Red Chris(2)Gold 16 7 2 Copper 46 31 8 Total Red Chris 62 38 10 2 11 35 Peasquito:Gold 92 38 15 Silver 201 111 44 Lead 60 36 14 Zinc 124 108 36 Total Peasquito 477 293 109 2 62 32 Merian 155 90 19 4 39 18 Cerro Negro 153 63 30 5 51 46 Yanacocha 186 88 28 2 20 24 Boddington:Gold 299 144 26 Copper 77 48 9 Total Boddington 376 192 35 1 157 28 Tanami 188 82 25 8 82 85 Cadia:(2)Gold 248 74 28 Copper 167 67 27 Total Cadia 415 141 55 5 222 111 Lihir(2)377 171 35 6 163 55 Ahafo 381 159 51 5 178 90 NGM 559 314 107 5 128 118 Corporate and Other 12 44 (562)4 Held for sale(3)CC&V 59 40 3 1 (92)5 Musselwhite 101 57 18 2 (59)26 Porcupine 125 63 23 2 34 40 lonore 116 80 19 4 12 21 Telfer:(2)Gold 59 70 8 Copper 7 15 2 Total Telfer 66 85 10 4 (24)10 Akyem 155 76 30 4 43 9 Consolidated$4,023$2,106$654$106$428$773 _(1)Includes a decrease in accrued capital expenditures of$77.Consolidated capital expenditures on a cash basis were$850.(2)Sites acquired through the Newcrest transaction.Refer to Note 3 for further information.(3)Refer to Note 5 for further information on held for sale.The Coffee development project disposal group is included in Corporate and other.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)16SalesCosts Applicable to SalesDepreciation and AmortizationAdvanced Projects,Research and Development and ExplorationIncome(Loss)before Income and Mining Tax and Other ItemsCapital Expenditures(1)Three Months Ended March 31,2023CC&V$91$51$7$3$27$10 Musselwhite 83 58 19 1 6 14 Porcupine 123 70 29 4 15 22 lonore 129 75 27 1 26 14 Peasquito:Gold 110 67 20 Silver 117 82 25 Lead 32 22 7 Zinc 117 86 24 Total Peasquito 376 257 76 3 22 35 Merian 159 85 18 3 53 14 Cerro Negro 116 70 31 2 7 35 Yanacocha 100 56 16 3 63 Boddington:Gold 381 167 28 Copper 110 53 9 Total Boddington 491 220 37 2 233 37 Tanami 123 61 19 4 40 74 Ahafo 249 130 39 6 71 90 Akyem 148 63 29 3 49 10 NGM 491 286 106 7 85 84 Corporate and Other 8 41 (95)6 Consolidated$2,679$1,482$461$83$539$508 _(1)Includes a decrease in accrued capital expenditures of$18;consolidated capital expenditures on a cash basis were$526.NOTE 5 ASSETS AND LIABILITIES HELD FOR SALEBased on a comprehensive review of the Companys portfolio of assets,the Companys Board of Directors approved a portfolio optimization program to divest six non-core assets and a development project in February 2024.The non-core assets to be divested include the CC&V,Musselwhite,Porcupine,lonore,Telfer,and Akyem reportable segments,and the Coffee development project which is included within Corporate and other.The Telfer disposal group also includes the Havieron development project,which is 70%owned by the Company and accounted for under proportionate consolidation,and other related assets.Based on progress made through the Companys active sales program and managements expectation that the sale is probable and will be completed within 12 months,the Company concluded that these non-core assets and the development project met the accounting requirements to be presented as held for sale in February 2024.As of December 31,2023,the aggregate net book value of the non-core assets and the development project was$3,419.Upon meeting the requirements to be presented as held for sale,the six non-core assets and the development project were recorded at the lower of the carrying value or fair value,less costs to sell,resulting in a write-down of$352 recognized for the three months ended March 31,2024 within Loss on assets held for sale.As a result,the aggregate net book value of the non-core assets and the development project was$3,305 at March 31,2024.The write-down resulted in a tax impact of$133,resulting in a total loss of$485 recognized for the three months ended March 31,2024 within Loss on assets held for sale.The estimated fair values were determined using the income approach and are considered a non-recurring level 3 fair value measurement.Significant inputs to the fair value measured included(i)cash flow information available to the Company,(ii)a short-term gold price of$2,175 per ounce,(iii)a long-term gold price of$1,700 per ounce,(iv)current estimates of reserves,resources,and exploration potential,and(v)a reporting unit specific discount rate in the range of 5.875%to 11.875%.Additional losses may be incurred as the Company continues its active sales program or as fair value estimates change.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)17The following table presents the carrying value of the major classes of assets and liabilities held for sale by disposal group,prior to recognition of the write-down of$352,as of March 31,2024:CC&VMusselwhitePorcupinelonoreTelferAkyemCoffeeProject(1)TotalAssets held for sale:Property,plant and mine development,net$82$991$1,366$706$380$522$321$4,368 Other assets 459 38 132 162 327 521 1 1,640 Carrying value of assets held for sale$541$1,029$1,498$868$707$1,043$322$6,008 Liabilities held for sale:Reclamation and remediation liabilities$279$78$543$83$207$398$3$1,591 Other liabilities 36 253 209 58 127 74 3 760 Carrying value of liabilities held for sale$315$331$752$141$334$472$6$2,351 _(1)The Coffee Project is included in Corporate and other.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)18NOTE 6 SALESThe following tables present the Companys Sales by mining operation,product and inventory type:Gold Sales from Dor ProductionSales from Concentrate and Other ProductionTotal SalesThree Months Ended March 31,2024Brucejack(1)$49$23$72 Red Chris:(1)Gold 16 16 Copper 46 46 Total Red Chris 62 62 Peasquito:Gold 92 92 Silver(2)201 201 Lead 60 60 Zinc 124 124 Total Peasquito 477 477 Merian 148 7 155 Cerro Negro 153 153 Yanacocha 186 186 Boddington:Gold 74 225 299 Copper 77 77 Total Boddington 74 302 376 Tanami 188 188 Cadia:(1)Gold 33 215 248 Copper 167 167 Total Cadia 33 382 415 Lihir(1)377 377 Ahafo 381 381 NGM(3)529 30 559 Held for sale(4)CC&V 59 59 Musselwhite 101 101 Porcupine 125 125 lonore 116 116 Telfer:(1)Gold 7 52 59 Copper 7 7 Total Telfer 7 59 66 Akyem 155 155 Consolidated$2,681$1,342$4,023 _(1)Sites acquired through the Newcrest transaction.Refer to Note 3 for further information.(2)Silver sales from concentrate includes$27 related to non-cash amortization of the silver streaming agreement liability.(3)The Company purchases its proportionate share of gold dor from NGM for resale to third parties.Gold dor purchases from NGM totaled$530 for the three months ended March 31,2024.(4)Refer to Note 5 for further information on held for sale.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)19Gold Sales from Dor ProductionSales from Concentrate and Other ProductionTotal SalesThree Months Ended March 31,2023CC&V$91$91 Musselwhite 83 83 Porcupine 123 123 lonore 129 129 Peasquito:Gold 15 95 110 Silver(1)117 117 Lead 32 32 Zinc 117 117 Total Peasquito 15 361 376 Merian 159 159 Cerro Negro 116 116 Yanacocha 94 6 100 Boddington:Gold 93 288 381 Copper 110 110 Total Boddington 93 398 491 Tanami 123 123 Ahafo 249 249 Akyem 148 148 NGM(2)473 18 491 Consolidated$1,896$783$2,679 _(1)Silver sales from concentrate includes$16 related to non-cash amortization of the silver streaming agreement liability.(2)The Company purchases its proportionate share of gold dor from NGM for resale to third parties.Gold dor purchases from NGM totaled$481 for the three months ended March 31,2023.Trade Receivables and Provisional SalesAt March 31,2024 and December 31,2023,Trade receivables primarily consisted of sales from provisionally priced concentrate and other production.The impact to Sales from changes in pricing on provisional sales was an increase of$40 and$22 for the three months ended March 31,2024 and 2023,respectively.At March 31,2024,Newmont had the following provisionally priced concentrate sales subject to final pricing over the next several months:Provisionally Priced SalesSubject to Final Pricing(1)Average Provisional Price(per ounce/pound)Gold(ounces,in thousands)209$2,222 Copper(pounds,in millions)76$3.99 Silver(ounces,in millions)5$24.82 Lead(pounds,in millions)46$0.92 Zinc(pounds,in millions)87$1.10 Molybdenum(pounds,in millions)(2)1$19.81 _(1)Includes provisionally priced by-product sales subject to final pricing,which are recognized in Costs applicable to sales.(2)Molybdenum is a by-product at the Cadia site and is recognized as a reduction to Costs applicable to sales.NOTE 7 RECLAMATION AND REMEDIATIONThe Companys mining and exploration activities are subject to various domestic and international laws and regulations governing the protection of the environment.These laws and regulations are continually changing and are generally becoming more restrictive.The Company conducts its operations to protect public health and the environment and believes its operations are in compliance with applicable laws and regulations in all material respects.The Company has made,and expects to make in the future,Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)20expenditures to comply with such laws and regulations,but cannot predict the full amount of such future expenditures.Estimated future reclamation and remediation costs are based principally on current legal and regulatory requirements.The Companys Reclamation and remediation expense consisted of:Three Months EndedMarch 31,20242023Reclamation adjustments and other$3$2 Reclamation accretion 85 60 Reclamation expense 88 62 Remediation adjustments and other 8 2 Remediation accretion 2 2 Remediation expense 10 4 Reclamation and remediation$98$66 The following are reconciliations of Reclamation and remediation liabilities:ReclamationRemediation2024202320242023Balance at January 1,(1)$8,385$6,731$401$373 Additions,changes in estimates,and other 5 Payments,net(53)(41)(6)(5)Accretion expense 85 60 2 2 Reclassification to Current liabilities held for sale(2)(1,571)(20)Balance at March 31,$6,846$6,750$382$370 _(1)The Newcrest transaction occurred on November 6,2023,resulting in an increase in the beginning balance at January 1,2024,as compared to the beginning balance at January 1,2023.Refer to Note 3 for further information.(2)During the first quarter of 2024,certain non-core assets were determined to meet the criteria for assets held for sale.As a result,the related assets and liabilities,including Reclamation and remediation liabilities,were reclassified to Current assets held for sale and Current liabilities held for sale,respectively.Refer to Note 5 for additional information.At March 31,2024At December 31,2023ReclamationRemediationTotalReclamationRemediationTotalCurrent(1)$510$66$576$558$61$619 Non-current(2)6,336 316 6,652 7,827 340 8,167 Total(3)$6,846$382$7,228$8,385$401$8,786 _(1)The current portion of reclamation and remediation liabilities are included in Other current liabilities.(2)The non-current portion of reclamation and remediation liabilities are included in Reclamation and remediation liabilities.(3)Total reclamation liabilities include$4,808 and$4,804 related to Yanacocha at March 31,2024 and December 31,2023,respectively.The Company is also involved in several matters concerning environmental remediation obligations associated with former,primarily historic,mining activities.Generally,these matters concern developing and implementing remediation plans at the various sites involved.The amounts accrued are reviewed periodically based upon facts and circumstances available at the time.Changes in estimates are recorded in Other current liabilities and Reclamation and remediation liabilities in the period estimates are revised.Included in Current assets held for sale at March 31,2024 is$53 of restricted cash held for purposes of settling reclamation and remediation obligations at Akyem.Included in Other non-current assets at March 31,2024 and December 31,2023 are$32 and$81,respectively,of non-current restricted cash held for purposes of settling reclamation and remediation obligations.The amounts at March 31,2024 primarily relate to Ahafo and Midnite Mine,included in Corporate and other.The amounts at December 31,2023 primarily relate to Ahafo and Akyem.Included in Other non-current assets at March 31,2024 and December 31,2023 are$20 and$21,respectively,of non-current restricted investments,which are legally pledged for purposes of settling reclamation and remediation obligations.The amounts at March 31,2024 and December 31,2023 primarily relate to San Jose Reservoir at Yanacocha.Refer to Note 20 for further discussion of reclamation and remediation matters.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)21NOTE 8 OTHER EXPENSE,NETThree Months EndedMarch 31,20242023Newcrest transaction and integration costs(1)$29$Settlement costs 21 Impairment charges 12 4 Restructuring and severance 6 2 Other 5 2 Other expense,net$73$8 _(1)Represents costs incurred related to the Newcrest Transaction.Refer to Note 3 for further information.NOTE 9 OTHER INCOME(LOSS),NETThree Months EndedMarch 31,20242023Interest income$39$36 Change in fair value of investments 31 41 Foreign currency exchange,net 28 (11)Insurance proceeds(1)10 Gain(loss)on asset and investment sales,net(2)9 36 Other 4 (3)Other income(loss),net$121$99 _(1)For the three months ended March 31,2024,primarily consists of insurance proceeds received of$10 related to a conveyor failure at Ahafo.(2)For the three months ended March 31,2024,primarily consists of the gain recognized on the purchase and sale of foreign currency bonds.For the three months ended March 31,2023,primarily consists of the gain recognized on the exchange of the previously held 28.5%investment in Maverix Metals,Inc.(Maverix)for 7.5%ownership interest in Triple Flag Precious Metals Corporation(Triple Flag)resulting from Triple Flags acquisition of all issued and outstanding common shares of Maverix in January 2023,partially offset by the loss on the sale of the Triple Flag investment in March 2023,resulting in a net gain of$36.NOTE 10 INCOME AND MINING TAXESA reconciliation of the U.S.federal statutory tax rate to the Companys effective income tax rate follows:Three Months Ended March 31,20242023Income(loss)before income and mining tax and other items$428$539 U.S.Federal statutory tax rate 21 213 Reconciling items:Change in valuation allowance on deferred tax assets(15)(65)2 9 Foreign rate differential 15 63 8 43 Mining and other taxes(net of associated federal benefit)10 43 5 29 Tax impact of foreign exchange 7 30 3 18 Akyem recognition of DTL for assets held for sale 27 117 Other(4)(18)1 1 Income and mining tax expense(benefit)61%$260 40%$213 _(1)Tax rates may not recalculate due to rounding.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)22NOTE 11 FAIR VALUE ACCOUNTINGThe following tables set forth the Companys assets and liabilities measured at fair value on a recurring(at least annually)or nonrecurring basis by level within the fair value hierarchy.As required by accounting guidance,assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.Refer to Note 13 of the Consolidated Financial Statements included in Part II of the Companys Annual Report on Form 10-K for the year ended December 31,2023 filed with the SEC on February 29,2024 for further information on the Companys assets and liabilities included in the fair value hierarchy presented below.Fair Value at March 31,2024TotalLevel 1Level 2Level 3Assets:Cash and cash equivalents$2,336$2,336$Restricted cash 45 45 Trade receivables from provisional concentrate sales,net 763 763 Assets held for sale(Note 5)(1)1,541 1,541 Marketable and other equity securities(Note 13)278 269 9 Restricted marketable debt securities(Note 13)20 20 Derivative assets(Note 12)526 1 525$5,509$2,670$773$2,066 Liabilities:Debt(2)$8,891$8,891$Derivative liabilities(Note 12)5 5$8,896$8,891$5 Fair Value at December 31,2023TotalLevel 1Level 2Level 3Assets:Cash and cash equivalents$3,002$3,002$Restricted cash 98 98 Trade receivables from provisional concentrate sales,net 734 734 Long-lived assets 22 22 Marketable and other equity securities(Note 13)252 243 9 Restricted marketable debt securities(Note 13)21 21 Derivative assets(Note 12)(3)642 7 635$4,771$3,364$750$657 Liabilities:Debt(2)$8,975$8,975$Derivative liabilities(Note 12)(3)5 5$8,980$8,975$5 _(1)The aggregate fair value of net assets held for sale subject to fair value remeasurement was$888 at March 31,2024.(2)Debt is carried at amortized cost.The outstanding carrying value was$8,933 and$8,874 at March 31,2024 and December 31,2023,respectively.Refer to Note 16 for further information.The fair value measurement of debt was based on an independent third party pricing source.(3)Derivative assets and liabilities include amounts for contingent consideration assets and liabilities,which were separately disclosed in prior filings.The Companys assets held for sale consist of the six non-core assets and development project that met the accounting requirements to be presented as Held for Sale in the first quarter of 2024.The assets are classified as non-recurring within Level 3 of the fair value hierarchy.Refer to Note 5 for further information.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)23The following tables set forth a summary of the quantitative and qualitative information related to the significant observable and unobservable inputs used in the calculation of the Companys Level 3 financial assets and liabilities at March 31,2024 and December 31,2023:DescriptionAt March 31,2024Valuation TechniqueSignificant InputRange,Point Estimate or AverageWeighted Average Discount RateAssets held for sale$1,541 Income-based approachVarious(1)Various(1)Various(1)Derivative assets:Derivative assets,not designated for hedging(2)$270 Discounted cash flowForward gold prices(per ounce)$1,860-$2,771 10.50%Hedging instruments(2)$116 Discounted cash flowForward electricity pricesA$43-A$321 6.42%Contingent consideration assets$139 Monte Carlo(3)Discount rate8.04%-26.43.52rivative liabilities$5 Discounted cash flowDiscount rate4.82%-6.15%5.62scriptionAt December 31,2023Valuation TechniqueSignificant InputRange,Point Estimate or AverageWeighted Average Discount RateLong-lived assets$22 Market-multipleVarious(4)Various(4)Various(4)Derivative assets:Derivative assets,not designated for hedging(2)$424 Discounted cash flowDiscount rate6.28%-10.50%9.03%Contingent consideration assets$211 Monte Carlo(3)Discount rate8.04%-26.43.18rivative liabilities$5 Discounted cash flowDiscount rate4.91%-6.15%5.65%_(1)Refer to Note 5 for information on the assumptions and inputs specific to the non-recurring fair value measurements performed in connection with assets held for sale.(2)The Stream Credit Facility Agreement and the Cadia Power Purchase Agreement,acquired as part of the Newcrest transaction,were not designated in a hedging relationship at December 31,2023.At January 1,2024,the Company designated the Cadia Power Purchase Agreement for hedge accounting.As such,the Cadia Power Purchase Agreement is captured in Hedging instruments at March 31,2024.Refer to Note 12 for further information.(3)A Monte Carlo valuation model is used for the fair value measurement of the Batu Hijau contingent consideration asset.All other contingent consideration assets are valued using a probability-weighted discounted cash flow model.(4)At December 31,2023,the Company recognized its proportionate share of the non-cash impairment charge on long-lived assets at NGM,which resulted in a remaining long-lived asset balance of$22.The estimated fair value was based on observable market values for comparable assets expressed as dollar per ounce of mineral resources and was considered a non-recurring level 3 fair value measurement.The following tables set forth a summary of changes in the fair value of the Companys recurring Level 3 financial assets and liabilities:Derivative Assets(1)Total AssetsDerivative LiabilitiesTotal LiabilitiesFair value at December 31,2023$635$635$5$5 Settlements/Reclassifications(2)(76)(76)Revaluation(34)(34)Fair value at March 31,2024$525$525$5$5 DerivativeAssets(1)Total AssetsDerivative Liabilities(3)Total LiabilitiesFair value at December 31,2022$188$188$3$3 Revaluation(1)(1)2 2 Fair value at March 31,2023$187$187$5$5 _(1)In 2024,the(loss)gain recognized on revaluation of derivative assets of$(6),$(32)and$4 is included in Other income(loss),net,Other comprehensive income(loss),and Net income(loss)from discontinued operations,respectively.In 2023,the(loss)gain recognized on revaluation derivative assets of$(7)and$6 is included in Other income(loss),net and Net income(loss)from discontinued operations,respectively.(2)In the first quarter of 2024,certain amounts relating to the Batu Hijau contingent consideration asset were reclassified from current Derivative assets to Other current assets in the Companys Condensed Consolidated Balance Sheets as a result of achieving certain contractual milestones.(3)In 2023,the loss recognized on revaluation of contingent consideration liabilities is included in Other income(loss),net.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)24NOTE 12 DERIVATIVE INSTRUMENTSAt March 31,2024At December 31,2023Current derivative assets:Derivative assets,not designated for hedging(1)$49$115 Contingent consideration assets 63 76 Hedging instruments(1)2 7$114$198 Non-current derivative assets:Derivative assets,not designated for hedging(1)$221$309 Contingent consideration assets 76 135 Hedging instruments(1)115$412$444 Current derivative liabilities:(2)Contingent consideration liabilities$3$3$3$3 Non-current derivative liabilities:(3)Contingent consideration liabilities$5$5$5$5 _(1)The Stream Credit Facility Agreement and the Cadia Power Purchase Agreement,acquired as part of the Newcrest transaction,were not designated in a hedging relationship at December 31,2023.At January 1,2024,the Company designated the Cadia Power Purchase Agreement for hedge accounting.As a result,the Cadia Power Purchase Agreement is captured in Hedging instruments at March 31,2024.See below for further information.(2)Included in Other current liabilities in the Companys Condensed Consolidated Balance Sheets.(3)Included in Other non-current liabilities in the Companys Condensed Consolidated Balance Sheets.Derivative Assets,Not Designated for HedgingDerivatives,not designated for hedging,consisted of the Stream Credit Facility Agreement at March 31,2024.Stream Credit Facility Agreement(SCFA)The SCFA was a non-revolving credit facility in relation to the Fruta del Norte mine,which is wholly owned and operated by Lundin Gold Inc.(Lundin Gold)in which the Company holds a 31.9%equity interest(refer to Note 13 for further information).The SCFA is a financial instrument that meets the definition of a derivative and is accounted for at fair value using a probability weighted discounted cash flow model,but is not designated for hedge accounting under ASC 815.The SCFA has a face value of$150 to be repaid in cash based on the Fruta del Norte mines gold and silver production.The SCFA has a stated interest rate of 7.5%.Repayments in excess of the principal and stated interest rate amount are recognized in Other income(loss),net in the Companys Condensed Consolidated Statement of Operations.The fair value of the SCFA was$270 at March 31,2024,of which$49 was recognized in the current portion of Derivative assets and$221 was recognized in non-current Derivative assets in the Companys Condensed Consolidated Balance Sheets.The fair value of the SCFA was$276 at December 31,2023,of which$113 was recognized in the current portion of Derivative assets and$163 was recognized in non-current Derivative assets in the Companys Condensed Consolidated Balance Sheets.In April 2024,Lundin Gold entered into a binding agreement with the Company to repurchase the SCFA and settle the rights under the Offtake agreement.Refer to Note 13 for further information on the Offtake agreement.Under the terms of the binding agreement,Lundin Gold has agreed to pay cash consideration of$330 for full settlement of the SCFA and revocation of the Offtake agreement.The cash consideration will be paid in two installments with final payment to occur in the third quarter of 2024.Hedging InstrumentsHedging instruments consisted of the Cadia Power Purchase Agreement and foreign currency cash flow hedges at March 31,2024.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)25Cadia Power Purchase Agreement(Cadia PPA)The Cadia PPA is a 15-year renewable power purchase agreement acquired by the Company through the Newcrest transaction.The Cadia PPA will partially hedge against future power price increases at the Cadia mine and will provide the Company with access to large scale generation certificates which the Company intends to surrender to achieve a reduction in its greenhouse gas emissions.At December 31,2023,the Cadia PPA was a financial instrument that met the definition of a derivative under ASC 815 and was accounted for at fair value using a probability weighted discounted cash flow model,but was not designated for hedging.At January 1,2024,the Company designated the Cadia PPA in a cash flow hedging relationship to mitigate the variability in cash flows related to approximately 40 percent of forecasted purchases of power at the Cadia mine for a 15 year period from the Cadia PPAs commercial operations date,which is expected in the third quarter of 2024.To minimize credit risk,the Company only enters into transactions with counterparties that meet certain credit requirements and periodically reviews the creditworthiness of these counterparties.The Company believes that the risk of counterparty default is low and its exposure to credit risk is minimal.The unrealized changes in fair value have been recorded in Accumulated other comprehensive income(loss)and will be reclassified to income during the period in which the hedged transaction affects earnings and is presented in the same income statement line item as the earnings effect of the hedged item.If the underlying hedge transaction becomes probable of not occurring,the related amounts in Accumulated other comprehensive income(loss)will be reclassified to earnings immediately.For the Cadia PPA cash flow hedge,amounts recorded in Accumulated other comprehensive income(loss)will be reclassified to earnings through Costs applicable to sales each period in which electricity is purchased beginning the commercial operations date.Foreign currency cash flow hedgesIn October 2022,the Company entered into A$574 of AUD-denominated fixed forward contracts to mitigate variability in the USD functional cash flows related to the AUD-denominated capital expenditures expected to be incurred in 2023 and 2024 during the construction and development phase of the Tanami Expansion 2 project.The fixed forward contracts were transacted for risk management purposes.The Company has designated the fixed forward contracts as foreign currency cash flow hedges against the forecasted AUD-denominated Tanami Expansion 2 capital expenditures.To minimize credit risk,the Company only enters into transactions with counterparties that meet certain credit requirements and periodically reviews the creditworthiness of these counterparties.The Company believes that the risk of counterparty default is low and its exposure to credit risk is minimal.The unrealized changes in fair value have been recorded in Accumulated other comprehensive income(loss)and are reclassified to income during the period in which the hedged transaction affects earnings and is presented in the same income statement line item as the earnings effect of the hedged item.If the underlying hedge transaction becomes probable of not occurring,the related amounts will be reclassified to earnings immediately.For the foreign currency cash flow hedges related to the Tanami Expansion 2 project,amounts recorded in Accumulated other comprehensive income(loss)will be reclassified to earnings through Depreciation and amortization after the project reaches commercial production.The following table provides the fair value of the Companys derivative instruments designated as cash flow hedges:At March 31,2024At December 31,2023Current hedging instruments:(1)Cadia PPA cash flow hedge(2)$1$Foreign currency cash flow hedges 1 7$2$7 Non-current hedging instruments:(3)Cadia PPA cash flow hedge(2)$115$115$_(1)Included in the current portion of Derivative assets in the Companys Consolidated Balance Sheets.(2)At January 1,2024,the Company designated the Cadia Power Purchase Agreement for hedge accounting.As a result,the Cadia PPA is captured in Derivative instruments,not designated for hedging at December 31,2023.See above for further information.(3)Included in non-current portion of Derivative assets in the Companys Consolidated Balance Sheets.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)26The following table provides the losses(gains)recognized in earnings related to the Companys derivative instruments:Three Months EndedMarch 31,20242023Loss(gain)on cash flow hedges:Interest rate contracts(1)$1$1$1$1 _(1)Interest rate contracts relate to swaps entered into,and subsequently settled,associated with the issuance of the 2022 Senior Notes,2035 Senior Notes,2039 Senior Notes,and 2042 Senior Notes.The related gains and losses are reclassified from Accumulated Other Comprehensive Income(Loss)and amortized to Interest expense,net over the term of the respective hedged notes.Contingent Consideration Assets and LiabilitiesContingent consideration assets and liabilities are comprised of contingent consideration to be received or paid by the Company in conjunction with various sales of assets and investments with future payment contingent upon meeting certain milestones.These contingent consideration assets and liabilities are accounted for at fair value and consist of financial instruments that meet the definition of a derivative but are not designated for hedge accounting under ASC 815.Refer to Note 11 for further information regarding the fair value of the contingent consideration assets and liabilities.The Company had the following contingent consideration assets and liabilities:At March 31,2024At December 31,2023Contingent consideration assets:Batu Hijau and Elang(1)$89$161 Red Lake(2)39 39 Cerro Blanco(2)6 6 Triple Flag(2)4 4 Other(2)1 1$139$211 Contingent consideration liabilities:Norte Abierto(3)$3$3 Red Chris(4)3 3 Galore Creek(3)2 2$8$8 _(1)Contingent consideration related to the sale of PT Newmont Nusa Tenggara in 2016.At March 31,2024,$63 is included in the current portion of Derivative assets and$26 is included in the non-current portion of Derivative assets in the Companys Condensed Consolidated Balance Sheets.At December 31,2023,$76 is included in the current portion of Derivative assets and$85 is included in the non-current portion of Derivative assets in the Companys Condensed Consolidated Balance Sheets.(2)Included in the non-current portion of Derivative assets in the Companys Condensed Consolidated Balance Sheets.(3)Included in Other non-current liabilities in the Companys Condensed Consolidated Balance Sheets.(4)Acquired through the Newcrest transaction and is included in Other current liabilities in the Companys Condensed Consolidated Balance Sheets.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)27NOTE 13 INVESTMENTSAt March 31,2024At December 31,2023Current investments:Marketable equity securities$23$23 Non-current investments:Marketable and other equity securities$255$229 Equity method investments:Pueblo Viejo Mine(40.0%)$1,471$1,489 NuevaUnin Project(50.0%)958 959 Lundin Gold Inc.(31.9%and 32.0%,respectively)925 938 Norte Abierto Project(50.0%)529 528 3,883 3,914$4,138$4,143 Non-current restricted investments:(1)Marketable debt securities$20$21 _(1)Non-current restricted investments are legally pledged for purposes of settling reclamation and remediation obligations and are included in Other non-current assets.Refer to Note 7 for further information regarding these amounts.Equity method investmentsIncome(loss)from the Companys equity method investments is recognized in Equity income(loss)of affiliates,which primarily consists of income from Pueblo Viejo.Income from Pueblo Viejo,recognized in Equity income(loss)of affiliates,consisted of$18 and$21,for the three months ended March 31,2024 and 2023,respectively.Pueblo ViejoAs of March 31,2024 and December 31,2023,the Company had outstanding shareholder loans to Pueblo Viejo of$420 and$429,with accrued interest of$12 and$14,respectively,included in the Pueblo Viejo equity method investment.Additionally,the Company has an unfunded commitment to Pueblo Viejo in the form of a revolving loan facility(Revolving Facility).There were no borrowings outstanding under the Revolving Facility as of March 31,2024.The Company purchases its portion(40%)of gold and silver produced from Pueblo Viejo at market price and resells those ounces to third parties.Total payments made to Pueblo Viejo for gold and silver purchased were$122 and$117 for the three months ended March 31,2024 and March 31,2023,respectively.These purchases,net of subsequent sales,are included in Other income(loss),net and the net amount is immaterial.There were no amounts due to or from Pueblo Viejo for gold and silver purchases as of March 31,2024 or December 31,2023.Lundin Gold Inc.Lundin Gold was acquired as part of the Newcrest transaction on November 6,2023 and is accounted for on a quarterly lag.The Company has the right to purchase 50%of gold produced from Lundin Gold at a price determined based on delivery dates and a defined quotational period and resells the ounces purchased to third parties under an offtake agreement acquired through the Newcrest transaction(the Offtake agreement).Total payments made to Lundin Gold under the Offtake agreement for gold purchased was$80 for the three months ended March 31,2024.These purchases,net of subsequent sales,are included in Other income(loss),net and the net amount is immaterial.There was$and$13 payable due to Lundin Gold for gold purchases as of March 31,2024 and December 31,2023,respectively.In April 2024,the Company entered into a binding agreement with Lundin Gold for the repurchase of the SCFA and the Offtake agreement.Refer to Note 12 for further information.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)28NOTE 14 INVENTORIESAt March 31,2024At December 31,2023Materials and supplies$1,078$1,247 In-process 124 160 Concentrate 98 134 Precious metals 85 122 Inventories(1)$1,385$1,663 _(1)During the first quarter of 2024,certain non-core assets were determined to meet the criteria for held for sale.As a result,the related assets,including Inventories of$305,and liabilities were reclassified to Current assets held for sale and Current liabilities held for sale,respectively.Refer to Note 5 for additional information.NOTE 15 STOCKPILES AND ORE ON LEACH PADSAt March 31,2024(1)At December 31,2023StockpilesOre on Leach PadsTotalStockpilesOre on Leach PadsTotalCurrent$566$179$745$746$233$979 Non-current 1,692 145 1,837 1,532 403 1,935 Total$2,258$324$2,582$2,278$636$2,914 _(1)During the first quarter of 2024,certain non-core assets were determined to meet the criteria for held for sale.As a result,the related assets,including Stockpiles and ore on leach pads of$545,and liabilities were reclassified to Current assets held for sale and Current liabilities held for sale,respectively.Refer to Note 5 for additional information.NOTE 16 DEBTScheduled minimum debt repayments are as follows:At March 31,2024Year Ending December 31,2024(for the remainder of 2024)$2025 2026 1,000 2027 2028 Thereafter 8,274 Total face value of debt 9,274 Unamortized premiums,discounts,and issuance costs(341)Debt$8,933 In connection with the Newcrest transaction,the Company acquired bilateral bank debt facilities held with 13 banks.The bilateral bank debt facilities had a total borrowing capacity of$2,000,of which$1,923 was outstanding as at December 31,2023,and$462 due February 7,2024,$769 due March 1,2024,and$692 due March 1,2026.On February 7,2024,the Company repaid the borrowing capacity of$462.On February 15,2024,the Company completed an amendment and restatement of its existing$3,000 revolving credit agreement dated as of April 4,2019(the“Existing Credit Agreement”).The Existing Credit Agreement was entered into with a syndicate of financial institutions and provided for borrowings in U.S.dollars and contained a letter of credit sub-facility.Per the amendment,the expiration date of the credit facility was extended from March 30,2026 to February 15,2029 and the borrowing capacity was increased to$4,000.Interest is based on Term SOFR plus a credit spread adjustment and margin.Facility fees vary based on the credit ratings of the Companys senior,uncollateralized,non-current debt.Debt covenants under the amendment are substantially the same as the Existing Credit Agreement.On February 20,2024,the Company utilized its$4,000 revolving credit agreement to repay the remaining$1,461 owed on the bilateral bank debt facilities.On March 7,2024,the Company issued$2,000 unsecured Senior Notes comprised of$1,000 due March 15,2026(“2026 Senior Notes”)and$1,000 due March 15,2034(2034 Senior Notes).Net proceeds from the 2026 and 2034 Senior Notes were$1,980.Interest will be paid semi-annually at a rate of 5.30%and 5.35%per annum for the 2026 and the 2034 Senior Notes,Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)29respectively.The proceeds from this issuance were used to repay the drawdown on the revolving credit facility resulting in no amounts outstanding on the revolving credit facility as of March 31,2024.NOTE 17 OTHER LIABILITIESAt March 31,2024At December 31,2023Other current liabilities:Reclamation and remediation liabilities$576$619 Accrued operating costs(1)442 473 Accrued capital expenditures 212 320 Payables to NGM(2)77 91 Stamp duty on Newcrest transaction(3)29 316 Other(4)448 543$1,784$2,362 Other non-current liabilities:Income and mining taxes(5)$175$177 Other(6)125 139$300$316 _(1)Includes an estimated compensation payment to the Worsley JV related to the waiver of certain rights within the cross-operation agreement that confers priority to the bauxite operations at the Boddington mine.(2)Primarily consists of amounts due to NGM representing Barricks 61.5%proportionate share of the amount owed to NGM for gold and silver purchased by Newmont.Newmonts 38.5%share of such amounts is eliminated upon proportionate consolidation of its interest in NGM.Receivables for Newmonts 38.5%proportionate share related to NGMs activities with Barrick are included in Other current assets.(3)Incurred as a result of the Newcrest transaction.In the first quarter of 2024,$291 was paid.Refer to Note 3 for further information on the Newcrest transaction.(4)Primarily consists of accrued interest on debt,accrued royalties and the current portion of the silver streaming agreement liability.(5)Primarily consists of unrecognized tax benefits,including penalties and interest.(6)Primarily consists of operating lease liabilities.NOTE 18 ACCUMULATED OTHER COMPREHENSIVE INCOME(LOSS)Unrealized Gain(Loss)on Marketable Debt SecuritiesForeign Currency Translation AdjustmentsPension and Other Post-retirement Benefit AdjustmentsUnrealized Gain(Loss)on Hedge InstrumentsTotalBalance at December 31,2023$(1)$121$(36)$(70)$14 Net current-period other comprehensive income(loss):Gain(loss)in other comprehensive income(loss)before reclassifications 5 (36)(31)(Gain)loss reclassified from accumulated other comprehensive income(loss)1 1 Other comprehensive income(loss)5 (35)(30)Balance at March 31,2024$(1)$126$(36)$(105)$(16)Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)30NOTE 19 NET CHANGE IN OPERATING ASSETS AND LIABILITIESNet cash provided by(used in)operating activities of continuing operations attributable to the net change in operating assets and liabilities is composed of the following:Three Months EndedMarch 31,2024(1)2023Decrease(increase)in operating assets:Trade and other receivables$(84)$(25)Inventories,stockpiles and ore on leach pads (193)(171)Other assets (7)19 Increase(decrease)in operating liabilities:Accounts payable(91)19 Reclamation and remediation liabilities (59)(46)Accrued tax liabilities 90 1 Other accrued liabilities(2)(322)(159)Net change in operating assets and liabilities$(666)$(362)_(1)During the first quarter of 2024,certain non-core assets were determined to meet the criteria for assets held for sale.As a result,the related assets and liabilities were reclassified to Current assets held for sale and Current liabilities held for sale,respectively.Amounts herein reflect the net change in the related operating assets and liabilities prior to being reclassified as held for sale.Refer to Note 5 for additional information.(2)For the three months ended March 31,2024,primarily consists of payment of$291 for stamp duty tax largely accrued in the fourth quarter of 2023 in connection with the Newcrest transaction.NOTE 20 COMMITMENTS AND CONTINGENCIESGeneralEstimated losses from contingencies are accrued by a charge to income when information available prior to issuance of the financial statements indicates that it is probable that a liability could be incurred,and the amount of the loss can be reasonably estimated.Legal expenses associated with the contingency are expensed as incurred.If a loss contingency is not probable or reasonably estimable,disclosure of the contingency and estimated range of loss,if determinable,is made in the financial statements when it is at least reasonably possible that a material loss could be incurred.Operating SegmentsThe Companys operating and reportable segments are identified in Note 4.Except as noted in this paragraph,all of the Companys commitments and contingencies specifically described herein are included in Corporate and Other.The Yanacocha matters relate to the Yanacocha reportable segment.The Newmont Ghana Gold and Newmont Golden Ridge matters relate to the Ahafo and Akyem reportable segments,respectively.The CC&V matter relates to the CC&V reportable segment.The Goldcorp Canada matter relates to the Porcupine reportable segment.The Cadia matter relates to the Cadia reportable segment.Environmental MattersRefer to Note 7 for further information regarding reclamation and remediation.Details about certain significant matters are discussed below.Minera Yanacocha S.R.L.-100%Newmont OwnedIn early 2015 and again in June 2017,the Peruvian government agency responsible for certain environmental regulations,MINAM,issued proposed modifications to water quality criteria for designated beneficial uses which apply to mining companies,including Yanacocha.These criteria modified the in-stream water quality criteria pursuant to which Yanacocha has been designing water treatment processes and infrastructure.In December 2015,MINAM issued the final regulation that modified the water quality standards.These Peruvian regulations allow time to formulate a compliance plan and make any necessary changes to achieve compliance.In February 2017,Yanacocha submitted a modification to its previously approved compliance achievement plan to the MINEM.In May 2022,Yanacocha submitted a proposed modification to this plan requesting an extension of time for coming into full compliance with the new regulations to 2027.In June 2023,Yanacocha received approval of its updated compliance plan from MINEM and was granted an extension to June 2026 to achieve compliance.The Company appealed this approval to the Mining Council requesting the regulatory extension until 2027,and in April 2024,MINEM approved the compliance schedule.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)31The Company currently operates five water treatment plants at Yanacocha that have been and currently meet all currently applicable water discharge requirements.The Company is conducting detailed studies to better estimate water management and other closure activities that will ensure water quality and quantity discharge requirements,including the modifications promulgated by MINAM,as referenced above,will be met.This also includes performing a comprehensive update to the Yanacocha reclamation plan to address changes in closure activities and estimated closure costs while preserving optionality for potential future projects at Yanacocha.These ongoing studies,which will extend beyond the current year,continue to evaluate and revise assumptions and estimated costs of changes to the reclamation plan.While certain estimated costs remain subject to revision,the Companys current asset retirement obligation includes plans for the construction and post-closure management of two new water treatment plants and initial consideration of known risks(including the associated risk that these water treatment estimates could change in the future as more work is completed).The ultimate construction costs of the two water treatment plants remain uncertain as ongoing study work and assessment of opportunities that incorporates the latest design considerations remain in progress.These and other additional risks and contingencies that are the subject of ongoing studies,including,but not limited to,a comprehensive review of the Companys tailings storage facility management,review of Yanacochas water balance and storm water management system,and review of post-closure management costs,could result in future material increases to the reclamation obligation at Yanacocha.Cripple Creek&Victor Gold Mining Company LLC-100%Newmont OwnedIn December 2021,Cripple Creek&Victor Gold Mining Company LLC(“CC&V”,a wholly-owned subsidiary of the Company)entered into a Settlement Agreement(“Settlement Agreement”)with the Water Quality Control Division of the Colorado Department of Public Health and Environment(the“Division”)with a mutual objective of resolving issues associated with the new discharge permits issued by the Division in January 2021 for the historic Carlton Tunnel.The Carlton Tunnel was a historic tunnel completed in 1941 with the purpose of draining the southern portion of the mining district,subsequently consolidated by CC&V.CC&V has held discharge permits for the Carlton Tunnel since 1983,but the January 2021 permit updates contained new water quality limits.The Settlement Agreement involves the installation of interim passive water treatment and ongoing monitoring over the next three years,and then more long-term water treatment installed with target compliance by November 2027.In 2022,the Company studied various interim passive water treatment options,reported the study results to the Division,and based on an evaluation of additional semi-passive options that involve the usage of power at the portal,updated the remediation liability to$20 in 2022.CC&V continues to study alternative long-term remediation plans for water discharged from the Carlton Tunnel,and as such,a compliance extension request was submitted in July 2023 to allow additional time for proper assessment of treatment alternatives.The Company is also working with regulators on the Discharger Specific Variance to identify highest feasible alternative treatment in the context,based on limits such as area topography.Depending on the plans that may ultimately be agreed with the Division,a material adjustment to the remediation liability may be required.Dawn Mining Company LLC(“Dawn”)-58.19%Newmont OwnedMidnite mine site and Dawn mill site.Dawn previously leased an open pit uranium mine,currently inactive,on the Spokane Indian Reservation in the State of Washington.The mine site is subject to regulation by agencies of the U.S.Department of Interior(the Bureau of Indian Affairs and the Bureau of Land Management),as well as the EPA.As per the Consent Decree approved by the U.S.District Court for the Eastern District of Washington on January 17,2012,the following actions were required of Newmont,Dawn,the Department of the Interior and the EPA:(i)Newmont and Dawn would design,construct and implement the cleanup plan selected by the EPA in 2006 for the Midnite mine site;(ii)Newmont and Dawn would reimburse the EPA for its past costs associated with overseeing the work;(iii)the Department of the Interior would contribute a lump sum amount toward past EPA costs and future costs related to the cleanup of the Midnite mine site;(iv)Newmont and Dawn would be responsible for all future EPA oversight costs and Midnite mine site cleanup costs;and(v)Newmont would post a surety bond for work at the site.During 2012,the Department of Interior contributed its share of past EPA costs and future costs related to the cleanup of the Midnite mine site.In 2016,Newmont completed the remedial design process,with the exception of the new WTP design which was awaiting the approval of the new NPDES permit.Subsequently,the new NPDES permit was received in 2017 and the WTP design commenced in 2018.The EPA approved the WTP design in 2021.Construction of the effluent pipeline began in 2021,and construction of the new WTP began in 2022.Both projects are scheduled to be completed in 2024.The Dawn mill site is regulated by the Washington Department of Health(the WDOH)and is in the process of being closed in accordance with the federal Uranium Mill Tailings Radiation Control Act,and associated Washington state regulations.Remediation at the Dawn mill site began in 2013.The Tailing Disposal Area 1-4 reclamation earthworks component was completed during 2017 with the embankment erosion protection completed in the second quarter of 2018.The remaining closure activities consist primarily of finalizing an Alternative Concentration Limit application(the ACL application)submitted in 2020 to the WDOH to address groundwater issues,and also evaporating the remaining balance of process water at the site.In the fourth quarter of 2022,the WDOH provided comments on the ACL application,which Newmont is evaluating and conducting studies to better understand and respond to the comments provided by the WDOH.These studies and the related comment process will extend beyond the current year and could result in future material increases to the remediation obligation.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)32The remediation liability for the Midnite mine site and Dawn mill site is approximately$210,assumed 100%by Newmont,at March 31,2024.Goldcorp Canada Ltd.-100%Newmont OwnedPorcupine mine site.The Porcupine complex is comprised of active open pit and underground mining operations as well as inactive,legacy sites from its extensive history of mining gold in and around the city of Timmins,Ontario since the early 1900s.As a result of these primarily historic mining activities,there are mine hazards in the area that could require some form of reclamation.The Company is conducting studies to better catalog,prioritize,and update its existing information of these historical mine hazards,to inform its closure plans and estimated closure costs.Based on work performed during 2023,a$46 reclamation adjustment was recorded at December 31,2023,however,on-going studies will extend beyond the current year and could result in future material increases to the reclamation obligation at Porcupine.Cadia Holdings Pty Ltd.-100%Newmont OwnedCadia mine site.Cadia Holdings Pty Ltd.(“Cadia Holdings”)is a wholly owned subsidiary of Newcrest,which was acquired by Newmont in November 2023.The mine site is subject to regulations by the New South Wales Environment Protection Authority(the“NSW EPA”).During the quarter ended June 2023,the NSW EPA issued variations to its Environment Protection License(“EPL”),a Prevention Notice and Notices to Provide Information regarding the management of,and investigation into potential breaches relating to,dust emissions and other air pollutants from Cadia Holdings tailings storage facilities and ventilation rises.The license variations largely formalized the actions Cadia Holdings had developed in consultation with the NSW EPA and was already undertaking across a range of measures.Cadia Holdings received a letter from the NSW EPA in June 2023 requiring it to immediately comply with specific statutory requirements and EPL conditions.Adjustments were implemented underground,including a reduction in mining rates,modifications to the ventilation circuit and the installation of additional dust sprays and spray curtains.Additional dust collection units were subsequently installed enabling normal mining rates to be restored.In August 2023,the NSW EPA commenced proceedings in the Land and Environment Court of NSW(the“NSW Land and Environment Court”)against Cadia Holdings,alleging that air emissions from Cadia on or about March 1,2022 exceeded the standard of concentration for total solid particles permitted under applicable laws due to the use of surface exhaust fans at the mine.On September 29,2023,Cadia Holdings entered a plea of guilty and the NSW Land and Environmental Court listed the case for a sentencing hearing on June 21,2024.On October 13,2023,the NSW EPA commenced additional proceedings in the NSW Land and Environment Court against Cadia Holdings,alleging two additional contraventions of applicable air emissions requirements between November 3 and 5,2021 and May 24 and 25,2023 and two contraventions related to alleged air pollution from tailings storage facilities on October 13 and 31,2022.On November 24,2023,Cadia Holdings entered a plea of guilty to the two additional charges relating to applicable air emissions requirements and the NSW Land and Environmental Court listed the case for a sentencing hearing on June 21,2024.The proceedings related to alleged air pollution from Cadia Holdings tailings storage facilities are adjourned for further directions on May 17,2024.The NSW EPAs investigation regarding the management of air emissions from the mine is ongoing.While no specific relief has been sought by the NSW EPA in its proceeding against Cadia Holdings before the NSW Land and Environmental Court,the court can impose penalties.Other Legal MattersNewmont Corporation,as well as Newmont Canada Corporation,and Newmont Canada FN Holdings ULC 100%Newmont OwnedKirkland Lake Gold Inc.,which was acquired by Agnico Eagle Mines Limited in 2022(still referred to herein as“Kirkland”for ease of reference),owns certain mining and mineral rights in northeastern Ontario,Canada,referred to here as the Holt-McDermott property,on which it suspended operations in April 2020.A subsidiary of the Company has a retained royalty obligation(“Holt royalty obligation”)to Royal Gold,Inc.(“Royal Gold”)for production on the Holt-McDermott property.In August 2020,the Company and Kirkland signed a Strategic Alliance Agreement(the“Kirkland Agreement”).As part of the Kirkland Agreement,the Company purchased an option(the“Holt option”)for$75 from Kirkland for the mining and mineral rights subject to the Holt royalty obligation.The Company has the right to exercise the Holt option and acquire ownership to the mineral interests subject to the Holt royalty obligation in the event Kirkland intends to resume operations and process material subject to the obligation.Kirkland has the right to assume the Companys Holt royalty obligation at any time,in which case the Holt option would terminate.On August 16,2021,International Royalty Corporation(“IRC”),a wholly-owned subsidiary of Royal Gold,filed an action in the Supreme Court of Nova Scotia against Newmont Corporation,Newmont Canada Corporation,Newmont Canada FN Holdings ULC(collectively Newmont),and certain Kirkland defendants(collectively Kirkland).IRC alleges the Kirkland Agreement is oppressive to the interests of Royal Gold under the Nova Scotia Companies Act and the Canada Business Corporations Act,and that,by entering into the Kirkland Agreement,Newmont breached its contractual obligations to Royal Gold.IRC seeks declaratory relief,and$350 in alleged royalty payments that it claims Newmont expected to pay under the Holt royalty obligation,but for the Kirkland Agreement.Kirkland filed a motion seeking dismissal of the case against it,which the court granted in October 2022.Newmont submitted its statement of defense on February 27,2023,and a motion for summary judgment on January 12,2024.The motion for summary judgment was Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)33heard before the Court on February 27 and 29,2024.Newmont intends to vigorously defend this matter but cannot reasonably predict the outcome.NWG Investments Inc.v.Fronteer Gold Inc.In April 2011,Newmont acquired Fronteer Gold Inc.(“Fronteer”).Fronteer acquired NewWest Gold Corporation(“NewWest Gold”)in September 2007.At the time of that acquisition,NWG Investments Inc.(“NWG”)owned approximately 86%of NewWest Gold and an individual named Jacob Safra owned or controlled 100%of NWG.Prior to its acquisition of NewWest Gold,Fronteer entered into a June 2007 lock-up agreement with NWG providing that,among other things,NWG would support Fronteers acquisition of NewWest Gold.At that time,Fronteer owned approximately 47%of Aurora Energy Resources Inc.(“Aurora”),which,among other things,had a uranium exploration project in Labrador,Canada.NWG contends that,during the negotiations leading up to the lock-up agreement,Fronteer represented to NWG,among other things,that Aurora would commence uranium mining in Labrador by 2013,that this was a firm date,that Aurora faced no current environmental issues in Labrador and that Auroras competitors faced delays in commencing uranium mining.NWG further contends that it entered into the lock-up agreement and agreed to support Fronteers acquisition of NewWest Gold in reliance upon these purported representations.On October 11,2007,less than three weeks after the Fronteer-NewWest Gold transaction closed,a member of the Nunatsiavut Assembly introduced a motion calling for the adoption of a moratorium on uranium mining in Labrador.On April 8,2008,the Nunatsiavut Assembly adopted a three-year moratorium on uranium mining in Labrador.NWG contends that Fronteer was aware during the negotiations of the NWG/Fronteer lock-up agreement that the Nunatsiavut Assembly planned on adopting this moratorium and that its adoption would preclude Aurora from commencing uranium mining by 2013,but Fronteer nonetheless fraudulently induced NWG to enter into the lock-up agreement.On September 24,2012,NWG served a summons and complaint on the Company,and then amended the complaint to add Newmont Canada Holdings ULC as a defendant.The complaint also named Fronteer Gold Inc.and Mark ODea as defendants.The complaint sought rescission of the merger between Fronteer and NewWest Gold and$750 in damages.In August 2013 the Supreme Court of New York,New York County issued an order granting the defendants motion to dismiss on forum non conveniens.Subsequently,NWG filed a notic
2024-10-29
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IBM RELEASES THIRD-QUARTER RESULTS Accelerated Software revenue growth,expanded gross profit margin,.
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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549FORM 10-Q(Mark One)QUARTERLY REPO.
2024-10-29
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Table of ContentsUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON,D.C.20549FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended September 30,2024oro TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from _ to _Commission file number:1-32853M COMPANY(Exact name of registrant as specified in its charter)Delaware41-0417775(State or other jurisdiction of incorporation)(IRS Employer Identification No.)3M Center,St.Paul,Minnesota55144-1000(Address of Principal Executive Offices)(Zip Code)(Registrants Telephone Number,Including Area Code)(651)733-1110Not Applicable(Former Name or Former Address,if Changed Since Last Report)Securities registered pursuant to Section 12(b)of the Act:Title of each classTrading Symbol(s)Name of each exchange on which registeredCommon Stock,Par Value$.01 Per ShareMMMNew York Stock ExchangeMMMChicago Stock Exchange,Inc.1.500%Notes due 2026MMM26New York Stock Exchange1.750%Notes due 2030MMM30New York Stock Exchange1.500%Notes due 2031MMM31New York Stock ExchangeNote:The common stock of the Registrant is also traded on the SIX Swiss Exchange.Indicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months(orfor such shorter period that the registrant was required to file such reports),and(2)has been subject to such filing requirements for the past 90 days.Yes No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T(232.405 of thischapter)during the preceding 12 months(or for such shorter period that the registrant was required to submit such files).Yes No Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting company,or an emerging growth company.See thedefinitions of“large accelerated filer,”“accelerated filer,”“smaller reporting company,”and“emerging growth company”in Rule 12b-2 of the Exchange Act.:Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting companyEmerging growth companyIf an emerging growth company,indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accountingstandards provided pursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act).Yes No Indicate the number of shares outstanding of each of the issuers classes of common stock,as of the latest practicable date.ClassOutstanding at September 30,2024Common Stock,$0.01 par value per share544,558,607 shares1Table of Contents3M COMPANYForm 10-Q for the Quarterly Period Ended September 30,2024TABLE OF CONTENTSPAGEPART I.Financial Information3Item 1.Financial Statements3Consolidated Statement of Income(Loss)3Consolidated Statement of Comprehensive Income(Loss)4Consolidated Balance Sheet5Consolidated Statement of Cash Flows6Notes to Consolidated Financial Statements7NOTE 1.Significant Accounting Policies7NOTE 2.Discontinued Operations7NOTE 3.Revenue9NOTE 4.Divestitures9NOTE 5.Goodwill and Intangible Assets10NOTE 6.Restructuring Actions11NOTE 7.Supplemental Income(Loss)Statement Information12NOTE 8.Supplemental Equity and Comprehensive Income(Loss)Information13NOTE 9.Income Taxes15NOTE 10.Earnings(Loss)Per Share16NOTE 11.Marketable Securities16NOTE 12.Long-Term Debt and Short-Term Borrowings17NOTE 13.Pension and Postretirement Benefit Plans18NOTE 14.Supplier Finance Program Obligations20NOTE 15.Derivatives20NOTE 16.Fair Value Measurements23NOTE 17.Commitments and Contingencies24NOTE 18.Stock-Based Compensation45NOTE 19.Business Segments46Item 2.Managements Discussion and Analysis of Financial Condition and Results of Operations48Overview48Results of Operations56Performance by Business Segment57Financial Condition and Liquidity61Item 3.Quantitative and Qualitative Disclosures About Market Risk66Item 4.Controls and Procedures66PART II.Other Information67Item 1.Legal Proceedings67Item 1A.Risk Factors67Item 2.Unregistered Sales of Equity Securities and Use of Proceeds75Item 3.Defaults Upon Senior Securities75Item 4.Mine Safety Disclosures75Item 5.Other Information75Item 6.Exhibits762Table of Contents3M COMPANYFORM 10-QFor the Quarterly Period Ended September 30,2024PART I.Financial InformationItem 1.Financial Statements3M Company and SubsidiariesConsolidated Statement of Income(Loss)(Unaudited)Three months endedSeptember 30,Nine months endedSeptember 30,(Millions,except per share amounts)2024202320242023Net sales$6,294$6,270$18,565$18,608 Operating expensesCost of sales3,647 3,716 10,703 11,188 Selling,general and administrative expenses1,062 5,419 3,322 18,182 Research,development and related expenses269 267 803 862 Gain on business divestitures(36)(36)Total operating expenses4,978 9,366 14,828 30,196 Operating income(loss)1,316(3,096)3,737(11,588)Other expense(income),net(405)206(323)334 Income(loss)from continuing operations before income taxes1,721(3,302)4,060(11,922)Provision(benefit)for income taxes348(777)771(2,893)Income(loss)from continuing operations of consolidated group1,373(2,525)3,289(9,029)Income(loss)from unconsolidated subsidiaries,net of taxes3 2 7 7 Net income(loss)from continuing operations including noncontrolling interest1,376(2,523)3,296(9,022)Less:Net income(loss)attributable to noncontrolling interest4 4 15 14 Net income(loss)from continuing operations attributable to 3M1,372(2,527)3,281(9,036)Net income(loss)from discontinued operations,net of taxes 452 164 1,096 Net income(loss)attributable to 3M$1,372$(2,075)$3,445$(7,940)Earnings(loss)per share attributable to 3M common shareholders:Weighted average 3M common shares outstanding basic550.6 554.3 553.1 553.7 Earnings(loss)per share from continuing operations basic$2.49$(4.56)$5.93$(16.32)Earnings(loss)per share from discontinued operations basic 0.82 0.30 1.98 Earnings(loss)per share basic$2.49$(3.74)$6.23$(14.34)Weighted average 3M common shares outstanding diluted552.7 554.3 554.5 553.7 Earnings(loss)per share from continuing operations diluted$2.48$(4.56)$5.92$(16.32)Earnings(loss)per share from discontinued operations diluted 0.82 0.29 1.98 Earnings(loss)per share diluted$2.48$(3.74)$6.21$(14.34)The accompanying Notes to Consolidated Financial Statements are an integral part of this statement.3Table of Contents3M Company and SubsidiariesConsolidated Statement of Comprehensive Income(Loss)(Unaudited)Three months endedSeptember 30,Nine months endedSeptember 30,(Millions)2024202320242023Net income(loss)attributable to 3M$1,372$(2,075)$3,445$(7,940)Net income(loss)attributable to noncontrolling interest4 4 15 14 Net income(loss)including noncontrolling interest1,376(2,071)3,460(7,926)Other comprehensive income(loss),net of tax:Cumulative translation adjustment368(365)15(224)Defined benefit pension and postretirement plans adjustment48 50 1,009 151 Cash flow hedging instruments(74)21(55)20 Total other comprehensive income(loss),net of tax342(294)969(53)Comprehensive income(loss)including noncontrolling interest1,718(2,365)4,429(7,979)Comprehensive(income)loss attributable to noncontrolling interest(3)(3)(14)(14)Comprehensive income(loss)attributable to 3M$1,715$(2,368)$4,415$(7,993)The accompanying Notes to Consolidated Financial Statements are an integral part of this statement.4Table of Contents3M Company and SubsidiariesConsolidated Balance Sheet(Unaudited)(Dollars in millions,except per share amount)September 30,2024December 31,2023AssetsCurrent assetsCash and cash equivalents$6,050$5,735 Marketable securities current1,245 50 Accounts receivable net of allowances of$65 and$623,528 3,601 InventoriesFinished goods1,974 1,842 Work in process1,190 1,242 Raw materials and supplies875 860 Total inventories4,039 3,944 Prepaids470 344 Other current assets967 326 Current assets of discontinued operations 2,379 Total current assets16,299 16,379 Property,plant and equipment23,794 23,494 Less:Accumulated depreciation(16,265)(15,804)Property,plant and equipment net7,529 7,690 Operating lease right of use assets606 657 Goodwill6,395 6,382 Intangible assets net1,242 1,323 Other assets8,804 6,806 Non-current assets of discontinued operations 11,343 Total assets$40,875$50,580 LiabilitiesCurrent liabilitiesShort-term borrowings and current portion of long-term debt$1,870$2,947 Accounts payable2,689 2,776 Accrued payroll703 695 Accrued income taxes473 304 Operating lease liabilities current168 192 Other current liabilities5,488 6,660 Current liabilities of discontinued operations 1,723 Total current liabilities11,391 15,297 Long-term debt11,319 13,088 Pension and postretirement benefits1,716 2,156 Operating lease liabilities443 464 Other liabilities11,312 14,021 Non-current liabilities of discontinued operations 686 Total liabilities36,181 45,712 Commitments and contingencies(Note 17)Equity3M Company shareholders equity:Common stock par value,$.01 par value;944,033,056 shares issued9 9 Shares outstanding-September 30,2024:544,558,607,December 31,2023:552,581,136Additional paid-in capital7,182 6,956 Retained earnings36,459 37,479 Treasury stock,at cost:(33,784)(32,859)Shares at September 30,2024:399,474,449,December 31,2023:391,451,920Accumulated other comprehensive income(loss)(5,224)(6,778)Total 3M Company shareholders equity4,642 4,807 Noncontrolling interest52 61 Total equity4,694 4,868 Total liabilities and equity$40,875$50,580 The accompanying Notes to Consolidated Financial Statements are an integral part of this statement.5Table of Contents3M Company and SubsidiariesConsolidated Statement of Cash Flows(Unaudited)Nine months endedSeptember 30,(Millions)20242023Cash Flows from Operating ActivitiesNet income(loss)including noncontrolling interest$3,460$(7,926)Adjustments to reconcile net income(loss)including noncontrolling interest to net cash provided by operating activitiesDepreciation and amortization1,041 1,450 Company pension and postretirement contributions(116)(85)Company pension and postretirement expense953 113 Stock-based compensation expense242 222 Gain on business divestitures(36)Deferred income taxes293(3,468)Changes in assets and liabilitiesAccounts receivable(87)(371)Inventories(172)236 Accounts payable8 118 Accrued income taxes(current and long-term)(152)(369)Other net(5,469)14,810 Net cash provided by(used in)operating activities1 4,694 Cash Flows from Investing ActivitiesPurchases of property,plant and equipment(PP&E)(890)(1,257)Proceeds from sale of PP&E and other assets55 114 Purchases of marketable securities and investments(2,220)(1,143)Proceeds from maturities and sale of marketable securities and investments1,022 1,292 Proceeds from sale of businesses,net of cash sold 60 Other net(27)28 Net cash provided by(used in)investing activities(2,060)(906)Cash Flows from Financing ActivitiesChange in short-term debt net(205)485 Repayment of debt(maturities greater than 90 days)(2,653)(2,434)Proceeds from debt(maturities greater than 90 days)8,367 2,011 Purchases of treasury stock(1,096)(31)Proceeds from issuance of treasury stock pursuant to stock option and benefit plans68 245 Dividends paid to shareholders(1,604)(2,483)Cash transferred to Solventum related to separation,net(616)Other net(83)(16)Net cash provided by(used in)financing activities2,178(2,223)Effect of exchange rate changes on cash and cash equivalents(2)(80)Net increase(decrease)in cash and cash equivalents117 1,485 Cash and cash equivalents at beginning of year5,933 3,655 Cash and cash equivalents at end of period$6,050$5,140 The accompanying Notes to Consolidated Financial Statements are an integral part of this statement.The Consolidated Statements of Cash Flows include the results of continuing and discontinued operations and,therefore,also include cash and cash equivalents associated with Solventumthrough its April 2024 separation from 3M that were presented in current assets of discontinued operations in the 3M Consolidated Balance Sheet.116Table of Contents3M Company and SubsidiariesNotes to Consolidated Financial Statements(Unaudited)NOTE 1.Significant Accounting PoliciesBasis of Presentation:The interim consolidated financial statements are unaudited but,in the opinion of management,reflect all adjustments necessary for a fair statement ofthe Companys consolidated financial position,results of operations and cash flows for the periods presented.These adjustments consist of normal,recurring items.The resultsof operations for any interim period are not necessarily indicative of results for the full year.The interim consolidated financial statements and notes are presented as permittedby the requirements for Quarterly Reports on Form 10-Q.This Quarterly Report on Form 10-Q should be read in conjunction with the Companys consolidated financialstatements and notes included in its Annual Report on Form 10-K.Certain amounts in prior periods consolidated financial statements have been reclassified to conform to current period presentation.Information provided herein reflects theimpact of these changes for all applicable periods presented.As discussed in Note 2,on April 1,2024,3M completed the previously announced separation of its Health Care business(the Separation)through a pro ratadistribution of 80.1%of the outstanding shares of Solventum Corporation(Solventum)to 3M stockholders.As a result of the Separation,Solventum became anindependent public company and 3M no longer consolidates Solventum into 3Ms financial results.In connection with the Separation,the historical net income ofSolventum and applicable assets and liabilities included in the Separation are reported in 3Ms consolidated financial statements as discontinued operations.3M made certain changes to the composition of segment information reviewed by 3Ms chief operating decision maker(CODM)effective in the second quarter of2024 largely as a result of the separation of Solventum and changes within its business segments effective in the first quarter of 2024 as further described in Note 19.To the extent these changes impacted 3Ms disclosed disaggregated revenue information,data in Note 3 has also been updated.New Accounting Pronouncements:Refer to Note 1 to the Consolidated Financial Statements in 3Ms 2023 Annual Report on Form 10-K for a discussion of applicablestandards issued and not yet adopted by 3M.Relevant New Standards Issued Subsequent to Most Recent Annual ReportIn March 2024,the SEC adopted rules under SEC Release No.33-11275,The Enhancement and Standardization of Climate-Related Disclosures for Investors,which require aregistrant to disclose information in annual reports and registration statements about climate-related risks that are reasonably likely to have a material impact on its business,results of operations,or financial condition.The information would include disclosure of a registrants greenhouse gas emissions.In addition,certain disclosures related tosevere weather events and other natural conditions would be required in a registrants audited financial statements.Annual disclosure requirements would be effective for 3M asearly as the fiscal year beginning January 1,2025.However,in April 2024,the SEC voluntarily stayed the final rules pending certain legal challenges.The Company isevaluating the impact of these rules on its disclosures.NOTE 2.Discontinued OperationsOn April 1,2024,3M completed the previously announced separation of its Health Care business(the Separation)through a pro rata distribution of 80.1%of the outstandingshares of Solventum Corporation(Solventum)to 3M stockholders.The spin-off transaction was intended to be tax-free for U.S.federal income tax purposes.To reflect thecompletion of the spin,3M recorded a decrease in shareholders equity for the net book value of applicable assets and liabilities included in the Separation,net of the book valueof 3Ms retained ownership.As a result of the Separation,Solventum became an independent public company and 3M no longer consolidates Solventum into 3Ms financialresults.In connection with the Separation,the historical net income of Solventum and applicable assets and liabilities included in the Separation are reported in 3Msconsolidated financial statements as discontinued operations.Following the Separation,as 3M no longer controls or has the ability to exert significant influence overSolventum,3M measures,at fair value on a recurring basis,its retained ownership interest in Solventum common stock(see additional information in Note 7).3M expects tomonetize its stake in Solventum over time.The Company entered into various agreements to effect the Separation and provide for the relationship between 3M and Solventum,including,among others,a separation anddistribution agreement;a tax matters agreement;and transition service,distribution,and contract manufacturing agreements;as well as certain commercial supply agreements.The transition service and distribution agreements have overall terms of two years following the Separation and each may be extended an additional year.The transitioncontract manufacturing agreements term is three years with an ability to extend under certain circumstances.Supply agreements,by which each company may provide productto the other,have initial three-year terms,but may extend for particular products up to ten or twelve years following the Separation,under certain circumstances.In addition,the companies had certain amounts due between them as of the Separation date.7Table of Contents3M continuing involvement with Solventum in the form of net sales under supply agreements and income from transition agreements is reflected in amounts disclosed in Note19 relative to Corporate and Unallocated(recorded as net sales and associated costs)and Other(recorded as a direct offset to associated costs),respectively.Solventumtransition agreement income for the three months ended September 30,2024 included in Other was approximately$5 million(approximately$0.2 billion gross fees,net ofassigned costs).Transition agreement income for the nine months ended September 30,2024 included in Other was approximately$40 million(approximately$0.4 billiongross fees,net of assigned costs).Transition services or purchases from Solventum are not material to 3M.Amounts due from Solventum and amounts due to Solventum underthe agreements described above were approximately$0.5 billion and$0.2 billion,respectively,as of September 30,2024.Information regarding net income(loss)from discontinued operations,net of taxes includes the following noting there was no material income(loss)from discontinuedoperations for the three months ended September 30,2024:Three months endedSeptember 30,Nine months endedSeptember 30,Net Income(Loss)from Discontinued Operations,Net of Taxes(millions)202320242023Net sales$2,042$1,987$6,060Cost of sales8648442,611Other operating expenses7368372,232Other expense(income),net(6)44(17)Income(loss)from discontinued operations before income taxes4482621,234Provision for income taxes(4)98138Net income(loss)from discontinued operations,net of taxes$452$164$1,096Major classes of assets and liabilities of discontinued operations include the following:Assets and Liabilities of Discontinued Operations(millions)December 31,2023AssetsCash and cash equivalents$198 Marketable securities current3 Accounts receivable net1,149 Inventories878 Other current assets151 Current assets of discontinued operations2,379 Property,plant and equipment net1,469 Operating lease right of use assets102 Goodwill6,545 Intangible assets net2,903 Other assets324 Non-current assets of discontinued operations11,343 LiabilitiesAccounts payable469 Accrued payroll209 Accrued income taxes61 Operating lease liabilities current33 Other current liabilities951 Current liabilities of discontinued operations1,723 Pension and postretirement benefits315 Operating lease liabilities70 Other liabilities301 Non-current liabilities of discontinued operations$686 Cash flows related to discontinued operations have not been segregated,and are included in the Consolidated Statement of Cash Flows for all periods presented.Selectedfinancial information related to cash flows from discontinued operations is below.Nine months endedSeptember 30,Selected Cash Flow Information from Discontinued Operations(millions)20242023Depreciation and amortization$139$416 Purchases of property,plant and equipment(PP&E)77 163 8Table of ContentsNOTE 3.RevenueDisaggregated Revenue Information:The Company views the following disaggregated disclosures as useful to understanding the composition of revenue recognized duringthe respective reporting periods:Three months endedSeptember 30,Nine months endedSeptember 30,Net Sales by Division(millions)2024202320242023Abrasives$323$330$975$1,005Automotive Aftermarket313316923933Electrical Markets333327969980Industrial Adhesives and Tapes5425161,5911,549Industrial Specialties Division287290856896Personal Safety8288402,5422,557Roofing Granules141132402375Total Safety and Industrial Business Segment2,7672,7518,2588,295Advanced Materials244274751880Automotive and Aerospace4695071,4561,446Commercial Branding and Transportation6596521,9411,962Electronics7677382,2382,124Total Transportation and Electronics Business Segment2,1392,1716,3866,412Consumer Safety and Well-Being285295831843Home and Auto Care291308898963Home Improvement4163911,1151,087Packaging and Expression307321858907Total Consumer Business Segment1,2991,3153,7023,800Corporate and Unallocated812619371Other872630Total Company$6,294$6,270$18,565$18,608Three months endedSeptember 30,Nine months endedSeptember 30,Net Sales by Geographic Area(millions)2024202320242023Americas$3,484$3,459$10,114$10,027 Asia Pacific1,783 1,758 5,272 5,348 Europe,Middle East and Africa1,027 1,053 3,179 3,233 Worldwide$6,294$6,270$18,565$18,608 Americas included United States net sales to customers of$2.8 billion and$8.1 billion for the three and nine months ended September 30,2024,respectively,and$2.7 billionand$8.0 billion for the three and nine months ended September 30,2023,respectively.Asia Pacific included China/Hong Kong net sales to customers of$0.7 billion and$2.1billion for the three and nine months ended September 30,2024,respectively,and$0.7 billion and$2.0 billion for the three and nine months ended September 30,2023,respectively.NOTE 4.DivestituresRefer to Note 3 to the Consolidated Financial Statements in 3Ms 2023 Annual Report on Form 10-K for more information on relevant pre-2024 divestitures.One of the 2023divestitures,the dental local anesthetic business,mentioned therein was part of the former Health Care business segment.Because this anesthetic business was divested prior tothe separation of Solventum,its operations are not reflected as discontinued operations and instead are reflected herein as part of Other for all applicable periods presented asdiscussed in Note 19.On April 1,2024,3M completed the separation of its Health Care business(the Separation)through a pro rata distribution of 80.1%of the outstanding shares of SolventumCorporation(Solventum)to 3M stockholders.See Note 2 for additional detail,including information regarding reporting the historical net income of Solventum and applicableassets and liabilities included in the Separation in 3Ms consolidated financial statements as discontinued operations.9Table of ContentsNOTE 5.Goodwill and Intangible AssetsGoodwill:The change in the carrying amount of goodwill by business segment was as follows:(Millions)Safety and IndustrialTransportation andElectronicsConsumerCorporate andUnallocatedTotal CompanyBalance as of December 31,2023$4,542$1,512$270$58$6,382Translation and other3 9 1 13 Balance as of September 30,2024$4,545$1,521$271$58$6,395The amounts in the“Translation and other”row in the above table primarily relate to changes in foreign currency exchange rates.As of September 30,2024,the Companys accumulated goodwill impairment loss is$0.3 billion.Acquired Intangible Assets:The carrying amount and accumulated amortization of acquired finite-lived intangible assets,in addition to the balance of non-amortizableintangible assets follow:(Millions)September 30,2024December 31,2023Customer related$1,343$1,337 Patents225 225 Other technology-based376 375 Definite-lived tradenames489 489 Other48 48 Total gross carrying amount2,481 2,474 Accumulated amortization customer related(939)(883)Accumulated amortization patents(225)(224)Accumulated amortization other technology-based(329)(317)Accumulated amortization definite-lived tradenames(295)(276)Accumulated amortization other(30)(31)Total accumulated amortization(1,818)(1,731)Total finite-lived intangible assets net663 743 Indefinite lived intangible assets(primarily tradenames)579 580 Total intangible assets net$1,242$1,323 Certain tradenames acquired by 3M are not amortized because they have been in existence for over 60 years,have a history of leading-market share positions,have been andare intended to be continuously renewed,and the associated products of which are expected to generate cash flows for 3M for an indefinite period of time.Amortization expense follows:Three months endedSeptember 30,Nine months endedSeptember 30,(Millions)2024202320242023Amortization expense$26$40$80$99 Expected amortization expense for acquired amortizable intangible assets recorded as of September 30,2024 follows:(Millions)Remainder of 202420252026202720282029After 2029Amortization expense$27$106$105$85$59$57$224 3M expenses the costs incurred to renew or extend the term of intangible assets.10Table of ContentsNOTE 6.Restructuring Actions2023 to 2025 Structural Reorganization Actions:As described in Note 5 in 3Ms 2023 Annual Report on Form 10-K,in the first quarter of 2023,3M announced it wouldundertake structural reorganization actions to reduce the size of the corporate center of the Company,simplify supply chain,streamline 3Ms geographic footprint,reduce layersof management,further align business go-to-market models to customers,and reduce manufacturing roles to align with production volumes.This aggregate initiative,beginningin the first quarter of 2023 and continuing through 2025,is expected(as updated to exclude discontinued operations)to impact approximately 8,000 positions worldwide withan expected pre-tax charge of$700 million to$800 million over that period.During 2023,management approved and committed to undertake associated actions resulting in a2023 pre-tax charge of$415 million.During 2024,management approved and committed to undertake additional actions under this initiative impacting approximately 900positions resulting in a pre-tax charge of$40 million and$178 million in the third quarter and nine months ended September 30,2024,respectively.Since its beginning in 2023through committed third quarter 2024 actions,this initiative has impacted approximately 6,600 positions worldwide.Remaining activities related to the restructuring actionsapproved and committed through September 30,2024 under this initiative are expected to be completed in 2025.3M expects to commit to further actions under this initiative.The related restructuring charges for periods presented were recorded in the income(loss)statement as follows:Three months endedSeptember 30,Nine months endedSeptember 30,(Millions)2024202320242023Cost of sales$19$2$23$61 Selling,general and administrative expenses18 53 141 224 Research,development and related expenses3 3 14 25 Total operating income impact$40$58$178$310 The business segment operating income(loss)impact of these restructuring charges is summarized as follows:Three months ended September 30,20242023(Millions)Employee RelatedAsset-Related andOtherTotalEmployee RelatedAsset-Related andOtherTotalSafety and Industrial$15$3$18$10$10 Transportation and Electronics8 1 9 9 9 Consumer4 9 13 3 3 Corporate and unallocated 4 32 36 Total operating expense$27$13$40$26$32$58 Nine months ended September 30,20242023(Millions)Employee RelatedAsset-Related andOtherTotalEmployee RelatedAsset-Related andOtherTotalSafety and Industrial$54$28$82$64$64 Transportation and Electronics24 19 43 46 46 Consumer13 20 33 19 19 Corporate and unallocated6 14 20 129 52 181 Total operating expense$97$81$178$258$52$310 Restructuring actions,including cash and non-cash impacts,follow:(Millions)Employee-RelatedAsset-Related andOtherTotalAccrued restructuring action balance as of December 31,2023$99$99 Incremental expense incurred in the first quarter of 202446 57 103 Incremental expense incurred in the second quarter of 202424 11 35 Incremental expense incurred in the third quarter of 202427 13 40 Non-cash changes(81)(81)Adjustments9 9 Cash payments(124)(124)Accrued restructuring action balance as of September 30,2024$81$81 11Table of Contents2023 to 2025 PFAS Exit Actions:As described in Note 5 in 3Ms 2023 Annual Report on Form 10-K,3M announced in 2022 that it will exit all PFAS manufacturing by theend of 2025.In 2023,3M management approved and committed to undertake certain related workforce actions resulting in a pre-tax charge of$64 million($40 million and$24million in the third and fourth quarter respectively)primarily impacting cost of sales.During 2024,management approved and committed to undertake additional relatedworkforce actions impacting approximately 100 positions resulting in a pre-tax charge of$7 million and$19 million primarily impacting cost of sales in the third quarter andnine months ended September 30,2024,respectively.These charges are reflected within the Transportation and Electronics business segment.This initiative,beginning in 2023through committed third quarter 2024 actions,has impacted approximately 650 positions worldwide.The remaining period of activities related to these approved andcommitted actions aligns with 3Ms PFAS exit timeframe.(Millions)Employee-RelatedAccrued restructuring action balance as of December 31,2023$60 Incremental expense incurred in the first quarter of 20244 Incremental expense incurred in the second quarter of 20248 Incremental expense incurred in the third quarter of 20247 Adjustments(5)Cash payments(33)Accrued restructuring action balance as of September 30,2024$41 NOTE 7.Supplemental Income(Loss)Statement InformationOther expense(income),net consists of the following:Three months endedSeptember 30,Nine months endedSeptember 30,(Millions)2024202320242023Interest expense$276$304$939$571Interest income(107)(72)(360)(160)Pension and postretirement net periodic benefit cost(benefit)7(26)792(77)Solventum ownership-change in value(581)(1,694)Total$(405)$206$(323)$334Beginning in the second quarter and third quarter of 2023,interest expense also includes imputed interest associated with the obligations resulting from the PWS Settlement andthe CAE Settlement,respectively(discussed in Note 17).Pension and postretirement net periodic benefit income described in the table above include all components of defined benefit plan net periodic benefit cost(benefit)exceptservice cost,which is reported in various operating expense lines.The non-service cost component above for the nine months ended September 30,2024 was impacted by a$795 million pension settlement charge.Refer to Note 13 for additional details on the components of pension and postretirement net periodic benefit cost(benefit).Solventum ownership-change in value relates to the change in value of 3Ms retained ownership interest in common stock of Solventum Corporation,an independent publiccompany.Solventum separated from 3M in April 2024(discussed in Note 2).At September 30,2024,the balance of net unrealized gain on this investment is$1.7 billion.12Table of ContentsNOTE 8.Supplemental Equity and Comprehensive Income(Loss)InformationCash dividends declared and paid totaled$1.51 for the first quarter of 2024 and$0.70 for each of the second and third quarters of 2024,respectively,and$1.50 per share foreach of the first,second and third quarters of 2023,or$2.91 and$4.50 per share for the first nine months of 2024 and 2023,respectively.The table below presents the consolidated changes in equity for three and nine months ended September 30,2024 and 2023:3M Company Shareholders(Millions)TotalCommon Stock andAdditional Paid-inCapitalRetainedEarningsTreasury StockAccumulated OtherComprehensive Income(Loss)Non-controllingInterestBalance at June 30,2024$3,988$7,155$35,475$(33,147)$(5,567)$72 Net income(loss)1,376 1,372 4 Other comprehensive income(loss),net of tax342 343(1)Solventum spin-off4 4 Dividends declared(383)(383)Stock-based compensation36 36 Reacquired stock(684)(684)Dividend to noncontrolling interest(23)(23)Issuances pursuant to stock option and benefit plans38(9)47 Balance at September 30,2024$4,694$7,191$36,459$(33,784)$(5,224)$52 Balance at June 30,2023$7,857$6,867$40,290$(32,926)$(6,433)$59 Net income(loss)(2,071)(2,075)4 Other comprehensive income(loss),net of tax(294)(293)(1)Dividends declared(828)(828)Stock-based compensation45 45 Reacquired stock(2)(2)Dividend to non controlling interest(3)(3)Issuances pursuant to stock option and benefit plans27(12)39 Balance at September 30,2023$4,731$6,912$37,375$(32,889)$(6,726)$59 3M Company Shareholders(Millions)TotalCommon Stock andAdditional Paid-inCapitalRetainedEarningsTreasury StockAccumulated OtherComprehensive Income(Loss)Non-controllingInterestBalance at December 31,2023$4,868$6,965$37,479$(32,859)$(6,778)$61 Net income(loss)3,460 3,445 15 Total other comprehensive income(loss),net of tax969 970(1)Solventum spin-off(2,165)(2,749)584 Dividends declared(1,604)(1,604)Stock-based compensation226 226 Reacquired stock(1,105)(1,105)Dividend to noncontrolling interest(23)(23)Issuances pursuant to stock option and benefit plans68(112)180 Balance at September 30,2024$4,694$7,191$36,459$(33,784)$(5,224)$52 Balance at December 31,2022$14,770$6,700$47,950$(33,255)$(6,673)$48 Net income(loss)(7,926)(7,940)14 Total other comprehensive income(loss),net of tax(53)(53)Dividends declared(2,483)(2,483)Stock-based compensation212 212 Reacquired stock(31)(31)Dividend to noncontrolling interest(3)(3)Issuances pursuant to stock option and benefit plans245(152)397 Balance at September 30,2023$4,731$6,912$37,375$(32,889)$(6,726)$59 13Table of ContentsThe table below presents the changes in accumulated other comprehensive income(loss)attributable to 3M(AOCI),including the reclassifications out of AOCI by componentfor three and nine months ended September 30,2024 and 2023:(Millions)Cumulative TranslationAdjustmentDefined Benefit Pension andPostretirement PlansAdjustmentCash Flow HedgingInstruments,UnrealizedGain(Loss)Total Accumulated OtherComprehensive Income(Loss)Balance at June 30,2024,net of tax:$(2,795)$(2,737)$(35)$(5,567)Other comprehensive income(loss),before tax:Amounts before reclassifications331 (70)261 Amounts reclassified out 63(21)42 Total other comprehensive income(loss),before tax331 63(91)303 Tax effect38(15)17 40 Total other comprehensive income(loss),net of tax369 48(74)343 Balance at September 30,2024,net of tax:$(2,426)$(2,689)$(109)$(5,224)Balance at June 30,2023,net of tax:$(2,688)$(3,737)$(8)$(6,433)Other comprehensive income(loss),before tax:Amounts before reclassifications(340)66(274)Amounts reclassified out 65(38)27 Total other comprehensive income(loss),before tax(340)65 28(247)Tax effect(24)(15)(7)(46)Total other comprehensive income(loss),net of tax(364)50 21(293)Balance at September 30,2023,net of tax:$(3,052)$(3,687)$13$(6,726)(Millions)Cumulative TranslationAdjustmentDefined Benefit Pension andPostretirement PlansAdjustmentCash Flow HedgingInstruments,UnrealizedGain(Loss)Total Accumulated OtherComprehensive Income(Loss)Balance at December 31,2023,net of tax:$(2,506)$(4,218)$(54)$(6,778)Other comprehensive income(loss),before tax:Amounts before reclassifications(70)285 14 229 Amounts reclassified out68 1,035(78)1,025 Total other comprehensive income(loss),before tax(2)1,320(64)1,254 Tax effect18(311)9(284)Total other comprehensive income(loss),net of tax16 1,009(55)970 Solventum spin-off64 520 584 Balance at September 30,2024,net of tax:$(2,426)$(2,689)$(109)$(5,224)Balance at December 31,2022,net of tax:$(2,828)$(3,838)$(7)$(6,673)Other comprehensive income(loss),before tax:Amounts before reclassifications(232)144(88)Amounts reclassified out39 194(119)114 Total other comprehensive income(loss),before tax(193)194 25 26Tax effect(31)(43)(5)(79)Total other comprehensive income(loss),net of tax(224)151 20(53)Balance at September 30,2023,net of tax:$(3,052)$(3,687)$13$(6,726)Includes tax expense(benefit)reclassified out of AOCI related to the following:Three months ended September 30,Nine months ended September 30,(millions)2024202320242023Cumulative Translation Adjustment$Defined benefit pension and postretirement plans adjustment(14)(15)(243)(43)Cash flow hedging instruments,unrealized gain/loss5 9 18 27 Income taxes are not provided for foreign translation relating to permanent investments in international subsidiaries,but tax effects within cumulative translation do includeimpacts from items such as net investment hedge transactions.The Company uses the portfolio approach for releasing income tax effects from accumulated othercomprehensive income.2222214Table of ContentsAdditional details on the amounts reclassified from accumulated other comprehensive income(loss)into consolidated income(loss)include:Cumulative translation adjustment:amounts were reclassified into selling,general and administrative expense.In 2024,this was associated with country exits as partof streamlining 3Ms geographic footprint(see Note 6).Defined benefit pension and postretirement plan adjustments:amounts were reclassified into other(expense)income,net(see Note 13).Cash flow hedging instruments,unrealized gain(loss):foreign currency forward/option contacts amounts were reclassified into cost of sales;interest rate contractamounts were reclassified into interest expense(see Note 15).The tax effects,if applicable,associated with these reclassifications were reflected in provision for income taxes.NOTE 9.Income TaxesThe effective tax rate on a continuing operations basis for the third quarter of 2024 was 20.3 percent on pre-tax income compared to 23.5 percent on a pre-tax loss in the prioryear.The effective tax rate for the first nine months of 2024 was 19.0 percent compared to 24.3 percent on a pre-tax loss in the prior year.The primary factors that impacted thecomparison of these rates year-over-year were the third quarter 2023 charge related to the settlement agreement to resolve CAE litigation(see Note 17),second quarter 2023charge related to the settlement agreement with public water systems in the United States regarding PFAS(see Note 17),and the tax rate associated with the 2024 benefitrelated to the change in value of the retained ownership interest in Solventum.The total amounts of unrecognized tax benefits that,if recognized,would affect the effective tax rate as of September 30,2024 and December 31,2023 on a continuingoperations basis are$710 million and$671 million,respectively.It is reasonably possible that the amount of unrecognized tax benefits could significantly change within thenext 12 months.At this time,the Company is not able to estimate the range by which these potential events could impact 3Ms unrecognized tax benefits in the next 12 months.Net deferred tax assets are included as components of Other Assets and Other Liabilities within the Consolidated Balance Sheet.As of September 30,2024,3Ms net noncurrent deferred tax asset balance was approximately$3.9 billion.This included a balance of approximately$3.0 billion as a result of the 2023 pre-tax charges related to thePWS Settlement and the CAE Settlement(both discussed in Note 17).As of September 30,2024 and December 31,2023,on a continuing operations basis,the Company hadvaluation allowances of$1.1 billion and$0.7 billion on its deferred tax assets,respectively,with the amounts impacted beginning in 2024 by a valuation allowance related tothe difference in basis of the retained ownership interest in Solventum.In connection with the completion of the separation of Solventum in April 2024,3M re-evaluated its global cash needs and certain unrepatriated earnings were no longerconsidered permanently reinvested,which resulted in a charge of approximately$100 million in the second quarter of 2024.Thereafter,3M provides for income taxesassociated with foreign earnings in certain subsidiaries that are not considered permanently reinvested.The Company has not provided deferred taxes on approximately$1.0 billion of undistributed earnings from non-U.S.subsidiaries as of September 30,2024 which are indefinitely reinvested in operations.Because of the multiple avenues bywhich to repatriate the earnings to minimize tax cost,and because a large portion of these earnings are not liquid,it is not practical to determine the income tax liability thatwould be payable if such earnings were not reinvested indefinitely.In 2021,the Organization for Economic Cooperation and Development(OECD)published Pillar Two Model Rules defining a global minimum tax,which calls for the taxationof large corporations at a minimum rate of 15%.The OECD has since issued administrative guidance providing transition and safe harbor rules around the implementation ofthe Pillar Two global minimum tax.Effective January 1,2024,a number of countries have proposed or enacted legislation to implement core elements of the Pillar Twoproposal.Pillar Two did not have a significant impact on 3Ms third quarter 2024 results.While 3M is monitoring developments and evaluating the potential impact on futureperiods,3M does not expect Pillar Two to have a significant impact on its 2024 financial results.15Table of ContentsNOTE 10.Earnings(Loss)Per ShareThe difference in the weighted average 3M shares outstanding for calculating basic and diluted earnings per share attributable to 3M common shareholders is the result of thedilution associated with the Companys stock-based compensation plans.Certain awards outstanding under these stock-based compensation plans were not included in thecomputation of diluted earnings per share attributable to 3M common shareholders because they would have had an anti-dilutive effect of 31.1 million and 32.3 million averageoptions for the three and nine months ended September 30,2024,respectively,and 35.6 million and 36.0 million average options for the three and nine months endedSeptember 30,2023,respectively.In periods of net losses,these anti-dilutive effects include all weighted option shares outstanding and weighted average shares is the same forthe calculations of both basic and diluted loss per share.The computations for basic and diluted earnings(loss)per share follow:Three months endedSeptember 30,Nine months endedSeptember 30,(Amounts in millions,except per share amounts)2024202320242023Numerator:Net income(loss)from continuing operations attributable to 3M$1,372$(2,527)$3,281$(9,036)Net income(loss)from discontinued operations,net of taxes 452 164 1,096 Net income(loss)attributable to 3M$1,372$(2,075)$3,445$(7,940)Denominator:Denominator for weighted average 3M common shares outstanding basic550.6 554.3 553.1 553.7 Dilution associated with stock-based compensation plans2.1 1.4 Denominator for weighted average 3M common shares outstanding diluted552.7 554.3 554.5 553.7 Earnings(loss)per share attributable to 3M common shareholders:Earnings(loss)per share from continuing operations basic$2.49$(4.56)$5.93$(16.32)Earnings(loss)per share from discontinued operations basic 0.82 0.30 1.98 Earnings(loss)per share basic$2.49$(3.74)$6.23$(14.34)Earnings(loss)per share from continuing operations diluted$2.48$(4.56)$5.92$(16.32)Earnings(loss)per share from discontinued operations diluted 0.82 0.29 1.98 Earnings(loss)per share diluted$2.48$(3.74)$6.21$(14.34)NOTE 11.Marketable SecuritiesThe Company invests in certificates of deposit/time deposits,commercial paper,and other securities.The following is a summary of amounts recorded on the ConsolidatedBalance Sheet for marketable securities(current and non-current).(Millions)September 30,2024December 31,2023Asset backed securities$12$Foreign corporate debt32 U.S.government securities41 Corporate debt securities459 Commercial paper390 Certificates of deposit/time deposits98 46 U.S.treasury securities209 U.S.municipal securities4 4 Current marketable securities1,245 50 U.S.municipal securities20 20 Non-current marketable securities20 20 Total marketable securities$1,265$70 At September 30,2024 and December 31,2023,gross unrealized,gross realized,and net realized gains and/or losses(pre-tax)were not material.16Table of ContentsThe balances at September 30,2024 for marketable securities by contractual maturity are shown below.Actual maturities may differ from contractual maturities because theissuers of the securities may have the right to prepay obligations without prepayment penalties.(Millions)Due in one year or less$1,201 Due after one year through five years64 Due after five years through ten years Total marketable securities$1,265 NOTE 12.Long-Term Debt and Short-Term Borrowings2023 issuances,maturities,and extinguishments of short-and long-term debt are described in Note 13 to the Consolidated Financial Statements in 3Ms 2023 Annual Report onForm 10-K.The Consolidated Statements of Cash Flows include the results of continuing and discontinued operations and,therefore,information regarding similar debt-relatedactivity for 2024 includes activity associated with Solventum through its April 2024 Separation.The Company had no commercial paper outstanding at September 30,2024,compared to$1.8 billion commercial paper outstanding as of December 31,2023.In the first quarter of 2024,Solventum,prior to the Separation discussed in Note 2,issued a total of$8.4 billion in aggregate principal amount of senior unsecured debt andterm loans.Also during the first quarter of 2024,Solventum further entered into a revolving credit facility of$2 billion which was undrawn as of March 31,2024.TheseSolventum items were guaranteed by 3M until the completion of the Separation on April 1,2024 and obligations under these notes,loans and facilities became,as transferredobligations,the sole responsibility of Solventum after the Separation.In February 2024,3M repaid$1.1 billion aggregate principal amount of medium-term notes that matured.Future Maturities of Long-term Debt:Maturities of long-term debt in the table below reflect the impact of put provisions associated with certain debt instruments and are netof the unamortized debt issue costs such that total maturities equal the carrying value of long-term debt as of September 30,2024.The maturities of long-term debt for theperiods subsequent to September 30,2024 are as follows(in millions):Remainder of 202420252026202720282029After 2029Total$53$1,869$1,575$847$821$1,790$6,234$13,189 17Table of ContentsNOTE 13.Pension and Postretirement Benefit PlansThe service cost component of defined benefit net periodic benefit cost is recorded in cost of sales;selling,general and administrative expenses;and research,development andrelated expenses.The other components of net periodic benefit cost are reflected in other expense(income),net.Effective April 1,2024,approximately$2.7 billion of benefitobligations and$2.4 billion of plan assets for certain pension and postretirement benefit plans,were transferred to Solventum,which is treated as a discontinued operation.Components of net periodic benefit cost and other supplemental information for the three and nine months ended September 30,2024 and 2023 follow:Three months ended September 30,Qualified and Non-qualified Pension BenefitsPostretirement BenefitsUnited StatesInternational(Millions)202420232024202320242023Net periodic benefit cost(benefit)Operating expenseService cost$28$42$15$21$5$6 Non-operating expenseInterest cost110 166 50 56 20 21 Expected return on plan assets(140)(243)(81)(76)(15)(20)Amortization of transition asset 1 Amortization of prior service benefit(3)(6)(6)(7)Amortization of net actuarial loss64 73 3 2 5 2 Settlements,curtailments,special termination benefits and other Total non-operating expense(benefit)31(10)(28)(17)4(4)Total net periodic benefit cost(benefit)59 32(13)4 9 2 Service cost-continuing operations$28$34$15$17$5$5 Service cost-discontinued operations 8 4 1 Total service cost28 42 15 21 5 6 Non-operating expense(benefit)-continuing operations31(6)(28)(17)4(3)Non-operating expense(benefit)-discontinued operations(4)(1)Total non-operating expense(benefit)31(10)(28)(17)4(4)Total net periodic benefit cost(benefit)-continuing operations59 28(13)9 2 Total net periodic benefit cost(benefit)-discontinued operations 4 4 Total net periodic benefit cost(benefit)$59$32$(13)$4$9$2 18Table of ContentsNine months ended September 30,Qualified and Non-qualified Pension BenefitsPostretirement BenefitsUnited StatesInternational(Millions)202420232024202320242023Net periodic benefit cost(benefit)Operating expenseService cost$94$128$50$60$17$18 Non-operating expenseInterest cost411 497 153 165 63 66 Expected return on plan assets(573)(731)(248)(226)(49)(58)Amortization of transition asset 2 2 Amortization of prior service benefit(11)(18)1 1(18)(23)Amortization of net actuarial loss242 220 9 6 15 6 Settlements,curtailments,special termination benefits and other795 Total non-operating expense(benefit)864(32)(83)(52)11(9)Total net periodic benefit cost(benefit)958 96(33)8 28 9 Service cost-continuing operations$87$104$45$48$16$15 Service cost-discontinued operations7 24 5 12 1 3 Total service cost94 128 50 60 17 18 Non-operating expense(benefit)-continuing operations864(20)(83)(50)11(7)Non-operating expense(benefit)-discontinued operations(12)(2)(2)Total non-operating expense(benefit)864(32)(83)(52)11(9)Total net periodic benefit cost(benefit)-continuing operations951 84(38)(2)27 8 Total net periodic benefit cost(benefit)-discontinued operations7 12 5 10 1 1 Total net periodic benefit cost(benefit)$958$96$(33)$8$28$9 For the nine months ended September 30,2024 contributions totaling$108 million were made to the Companys U.S.and international pension plans and$8 million to itspostretirement plans,including discontinued operations.Future contributions will depend on market conditions,interest rates and other factors.3M does not expect thepreviously disclosed range of$100 million to$200 million of expected 2024 cash contributions to its U.S.and international retirement plans to be materially impacted by theApril 1,2024 separation of Solventum(see Note 2).3Ms annual measurement date for pension and postretirement assets and liabilities is December 31 each year,which is alsothe date used for the related annual measurement assumptions.In the second quarter of 2024,3M recorded a non-cash pension settlement charge of approximately$795 million reflected in other expense(income),net as a result oftransferring approximately$2.5 billion of its U.S.pension payment obligations and related plan assets to an insurance company.The pension risk transfer requiredremeasurement of the plan prior to the calculation of the settlement charge.The net impact of the pension risk transfer and the remeasurement was a decrease of approximately$220 million in the non-current liability for pensions(and corresponding decrease in accumulated comprehensive loss,before deferred taxes).Assumptions used for thisremeasurement included discount rates determined using June 30,2024 market conditions and calculated using the same methodology as disclosed in Note 14 to theConsolidated Financial Statements in 3Ms 2023 Annual Report on Form 10-K.Using this methodology,the Company determined a discount rate of 5.43%for the U.S.pensionplan as of June 30,2024.The Company also reduced the expected return on assets assumption determined using June 30,2024 market conditions and calculated using the samemethodology as used at the annual measurement as of December 31,2023.All other assumptions were consistent with the December 31,2023 disclosures.This remeasurementimpacts net periodic benefit cost for the remainder of 2024.As of March 31,2024,3M transferred eligible U.S.Solventum employees and retirees to new U.S.defined benefit pension and postretirement plans with the same benefits oftheir current plans.The transfer required remeasurement of the plans prior to the calculation of this split.The net impact of the remeasurement was a decrease of approximately$70 million in the non-current liability for pension and postretirement benefits(and corresponding decrease in accumulated comprehensive loss,before deferred taxes).Assumptions used for this remeasurement included discount rates determined using March 31,2024 market conditions and calculated using the same methodology as disclosedin Note 14 to the Consolidated Financial Statements in 3Ms 2023 Annual Report on Form 10-K.All other assumptions were consistent with the December 31,2023disclosures.Using this methodology,the Company determined a discount rate of 5.22%for the U.S.pension plans and 5.19%for the U.S.postretirement benefit plans as ofMarch 31,2024,which are increases of 0.24 percentage points and 0.25 percentage points,respectively,from the rates used as of December 31,2023.This remeasurement didnot impact consolidated income for the three months ended March 31,2024,but will impact net periodic benefit cost for the remainder of 2024.As of March 31,2024,therewere several small international pension plans remeasured for purposes of transferring Solventum employees to new pension plans,the impact of which was not material.19Table of ContentsNOTE 14.Supplier Finance Program ObligationsUnder supplier finance programs,3M agrees to pay participating banks the stated amount of confirmed invoices from its designated suppliers on the original maturity dates ofthe invoices,generally within 90 days of the invoice date.3M or the banks may terminate the agreements with advance notice.Separately,the banks may have arrangementswith the suppliers that provide them the option to request early payment from the banks for invoices confirmed by 3M.3Ms outstanding balances of confirmed invoices in theprograms as of September 30,2024 and December 31,2023 were approximately$300 million and$270 million,respectively.These amounts are included within accountspayable on 3Ms consolidated balance sheet.NOTE 15.DerivativesThe Company uses interest rate swaps and forward and option contracts to manage risks generally associated with foreign exchange rate and interest rate fluctuations.Note 16to the Consolidated Financial Statements in 3Ms 2023 Annual Report on Form 10-K explains the types of derivatives and financial instruments used by 3M,how and why 3Muses such instruments,and how such instruments are accounted for.It also contains information regarding previously initiated contracts or instruments.Additional information with respect to derivatives is included elsewhere as follows:Impact on other comprehensive income of nonderivative hedging and derivative instruments is included in Note 8.Fair value of derivative instruments is included in Note 16.Derivatives and/or hedging instruments associated with the Companys long-term debt are described in Note 13 to the Consolidated Financial Statements in 3Ms 2023Annual Report on Form 10-K.Refer to the section below titled Statement of Income(Loss)Location and Impact of Cash Flow and Fair Value Derivative Instruments and Derivatives Not Designated asHedging Instruments for details on the location within the consolidated statements of income(loss)for amounts of gains and losses related to derivative instruments designatedas cash flow or fair value hedges(along with similar information relative to the hedged items)and derivatives not designated as hedging instruments.Additional informationrelative to cash flow hedges,fair value hedges,net investment hedges and derivatives not designated as hedging instruments is included below as applicable.Cash Flow Hedges:As of September 30,2024,the Company had a balance of$109 million associated with the after-tax net unrealized loss associated with cash flow hedginginstruments recorded in accumulated other comprehensive income(loss).This includes a remaining balance of$81 million(after-tax loss)related to forward starting interestrate swap and treasury rate lock contracts terminated in 2019 concurrent with associated debt issuances,which is being amortized over the respective lives of the underlyingnotes.Based on exchange rates as of September 30,2024 of the total after-tax net unrealized balance as of September 30,2024,3M expects to reclassify approximately$13million after-tax net unrealized loss over the next 12 months(with the impact offset by earnings/losses from underlying hedged items).The amount of pretax gain(loss)recognized in other comprehensive income(loss)related to derivative instruments designated as cash flow hedges is provided in the followingtable.Pretax Gain(Loss)Recognized in Other Comprehensive Income(Loss)on DerivativeThree months endedSeptember 30,Nine months endedSeptember 30,(Millions)2024202320242023Foreign currency forward/option contracts$(70)$66$14$144 Fair Value Hedges:The following amounts were recorded on the consolidated balance sheet related to cumulative basis adjustments for active fair value hedges,as well asremaining amounts for discontinued fair value hedges:Location on the Consolidated Balance Sheet(Millions)Carrying Value of the Hedged LiabilitiesCumulative Amount of Fair Value Hedging Adjustment Included in theCarrying Value of the Hedged LiabilitiesSeptember 30,2024December 31,2023September 30,2024December 31,2023Long-term debt$937$918$(65)$(84)20Table of ContentsNet Investment Hedges:At September 30,2024,the total notional amount of foreign exchange forward contracts designated in net investment hedges was approximately 100million euros,along with a principal amount of long-term debt instruments designated in net investment hedges totaling 1.8 billion euros.The maturity dates of these derivativeand nonderivative instruments designated in net investment hedges range from 2024 to 2031.The amount of gain(loss)excluded from effectiveness testing recognized in income relative to instruments designated in net investment hedge relationships is not material.Theamount of pre-tax gain(loss)recognized in other comprehensive income(loss)related to derivative and nonderivative instruments designated as net investment hedges are asfollows.Pretax Gain(Loss)Recognized as Cumulative Translation within OtherComprehensive Income(Loss)Three months endedSeptember 30,Nine months endedSeptember 30,(Millions)2024202320242023Foreign currency denominated debt$(77)$60$(21)$(5)Foreign currency forward contracts(6)5(1)2 Total$(83)$65$(22)$(3)Derivatives Not Designated as Hedging Instruments:Derivatives not designated as hedging instruments include de-designated foreign currency forward and option contractsthat formerly were designated in cash flow hedging relationships(as referenced in the Cash Flow Hedges section above).In addition,3M enters into foreign currency contractsthat are not designated in hedging relationships to offset,in part,the impacts of changes in value of various non-functional currency denominated items including certainintercompany financing balances.These derivative instruments are not designated in hedging relationships;therefore,fair value gains and losses on these contracts are recordedin earnings.The Company does not hold or issue derivative financial instruments for trading purposes.Statement of Income(Loss)Location and Impact of Cash Flow and Fair Value Derivative Instruments and Derivatives Not Designated as Hedging Instruments:Three months ended September 30,Nine months ended September 30,Cost of salesOther expense(income),netCost of salesOther expense(income),net(Millions)20242023202420232024202320242023Total consolidated financial statement line item amount$3,647$3,716$(405)$206$10,703$11,188$(323)$334 Pre-tax amounts recognized in income related to derivative instruments Information regarding cash flow and fair value hedging relationships:(Gain)or loss on cash flow hedging relationships:Foreign currency forward/option contracts:Amount of(gain)or loss reclassified from accumulated othercomprehensive income(loss)into income(23)(40)(84)(125)Interest rate contracts:Amount of(gain)or loss reclassified from accumulated othercomprehensive income(loss)into income 2 2 6 6(Gain)or loss on fair value hedging relationships:Interest rate contracts:Hedged items 29(21)20(18)Derivatives designated as hedging instruments (29)21 (20)18 Information regarding derivatives not designated as hedginginstruments:(Gain)or loss on derivatives not designated as instruments:Foreign currency forward/option contracts 1(13)2 76(7)(11)For periods prior to the April 1,2024 separation of Solventum,these include certain insignificant amounts attributable to discontinued operations.*21Table of ContentsLocation,Fair Value,and Gross Notional Amounts of Derivative Instruments:The following tables summarize the fair value of 3Ms derivative instruments,excludingnonderivative instruments used as hedging instruments,and their location in the consolidated balance sheet.Notional amounts below are presented at period end foreignexchange rates,except for certain interest rate swaps,which are presented using the inception dates foreign exchange rate.Gross Notional AmountAssetsLiabilities(Millions)LocationFair Value AmountLocationFair Value AmountSeptember 30,2024December 31,2023September 30,2024December 31,2023September 30,2024December 31,2023Derivatives designated as hedging instrumentsForeign currency forward/optioncontracts$1,668$2,109 Other current assets$34$68 Other currentliabilities$29$27 Foreign currency forward/optioncontracts840 342 Other assets7 11 Other liabilities19 5 Interest rate contracts800 800 Other assets Other liabilities68 88 Total derivatives designated ashedging instruments41 79 116 120 Derivatives not designated as hedging instrumentsForeign currency forward/optioncontracts1,164 1,023 Other current assets5 5 Other currentliabilities2 7 Total derivatives not designatedas hedging instruments5 5 2 7 Total derivative instruments$46$84$118$127 Credit Risk and Offsetting of Assets and Liabilities of Derivative Instruments:The Company is exposed to credit loss in the event of nonperformance by counterparties ininterest rate swaps,currency swaps,and forward and option contracts.However,the Companys risk is limited to the fair value of the instruments.The Company activelymonitors its exposure to credit risk through the use of credit approvals and credit limits,and by selecting major international banks and financial institutions as counterparties.3M enters into master netting arrangements with counterparties when possible to mitigate credit risk in derivative transactions.A master netting arrangement may allow eachcounterparty to net settle amounts owed between a 3M entity and the counterparty as a result of multiple,separate derivative transactions.The Company does not anticipatenonperformance by any of these counterparties.3M has elected to present the fair value of derivative assets and liabilities within the Companys consolidated balance sheet on a gross basis even when derivative transactionsare subject to master netting arrangements and may otherwise qualify for net presentation.3M determined that the impact of the amount of eligible offsetting derivative assetsand liabilities was not material if it had elected to offset the asset and liability balances of derivative instruments,netted in accordance with various criteria in the event ofdefault or termination as stipulated by the terms of netting arrangements with each of the counterparties.For each counterparty,if netted,the Company would offset the assetand liability balances of all derivatives at the end of the reporting period based on the 3M entity that is a party to the transactions.Derivatives not subject to master nettingagreements are not eligible for net presentation.For the periods presented,3M has not received cash collateral from derivative counterparties.Currency Effects:3M estimates that year-on-year foreign currency transaction effects,including hedging impacts,decreased pre-tax income from continuing operations byapproximately$21 million and$40 million for the three and nine months ended September 30,2024,respectively,and decreased pre-tax loss from continuing operations byapproximately$20 million and$82 million for the three and nine months ended September 30,2023,respectively.These estimates include transaction gains and losses,including derivative instruments designed to reduce foreign currency exchange rate risks.22Table of ContentsNOTE 16.Fair Value Measurements3M follows ASC 820,Fair Value Measurements and Disclosures,with respect to assets and liabilities that are measured at fair value on a recurring basis and nonrecurring basis.Refer to Note 17 to the Consolidated Financial Statements in 3Ms 2023 Annual Report on Form 10-K for a qualitative discussion of the assets and liabilities that are measuredat fair value on a recurring and nonrecurring basis,a description of the valuation methodologies used by 3M,and categorization within the valuation framework of ASC 820.The following table provides information by level for material assets and liabilities that are measured at fair value on a recurring basis at September 30,2024 and December 31,2023.Fair Value atFair Value Measurements Using Inputs Considered asLevel 1Level 2Level 3Description(Millions)September 30,2024December 31,2023September 30,2024December 31,2023September 30,2024December 31,2023September 30,2024December 31,2023Assets:Available-for-sale:Marketable securities:Asset backed securities$12$12$Foreign corporate debt32 32 U.S.government securities41 41 Corporate debt securities459 459 Commercial paper390 390 Certificates of deposit/time deposits98 46 98 46 U.S.treasury securities209 209 U.S.municipal securities24 24 24 24 Solventum common stock2,396 2,396 Derivative instruments assets:Foreign currency forward/option contracts46 84 46 84 Liabilities:Derivative instruments liabilities:Foreign currency forward/option contracts50 39 50 39 Interest rate contracts68 88 68 88 The Company had no material activity with level 3 assets and liabilities during the periods presented.Solventum Corporation common stock is carried at stock prices that are readily available from active markets and are representative of fair value.3M classifies this investmentas Level 1.It is included within other assets on the Companys consolidated balance sheet.In addition,the plan assets of 3Ms pension and postretirement benefit plans are measured at fair value on a recurring basis(at least annually).Refer to Note 14 to theConsolidated Financial Statements in 3Ms 2023 Annual Report on Form 10-K.Assets and Liabilities that are Measured at Fair Value on a Nonrecurring Basis:3M had no material measurements at fair value on a nonrecurring basis of applicableassets or liabilities for the third quarter and first nine months of 2024 and 2023.Fair Value of Financial Instruments:The Companys financial instruments include cash and cash equivalents,marketable securities,accounts receivable,certain investments,accounts payable,borrowings,and derivative contracts.The fair values of cash equivalents,accounts receivable,accounts payable,and short-term borrowings and currentportion of long-term debt approximated carrying values because of the short-term nature of these instruments.Available-for-sale marketable securities,in addition to certaininvestments and derivative instruments,are recorded at fair values as indicated in the preceding disclosures.To estimate fair values(classified as level 2)for its long-term debt,the Company utilized third-party quotes,which are derived all or in part from model prices,external sources,market prices,or the third-partys internal records.Informationwith respect to the carrying amounts and estimated fair values of these financial instruments follow:September 30,2024December 31,2023(Millions)Carrying ValueFair ValueCarrying ValueFair ValueLong-term debt,excluding current portion$11,319$10,449$13,088$11,859 The fair values reflected in the sections above consider the terms of the related debt absent the impacts of derivative/hedging activity.The carrying amount of long-term debtreferenced above is impacted by certain fixed-to-floating interest rate swaps that are designated as fair value hedges and by the designation of certain fixed rate Eurobondsecurities issued by the Company as hedging instruments of the Companys net investment in its European subsidiaries.23Table of ContentsNOTE 17.Commitments and ContingenciesLegal Proceedings:The Company and some of its subsidiaries are involved in numerous claims and lawsuits and regulatory proceedings worldwide.These claims,lawsuitsand proceedings relate to matters including,but not limited to,products liability(involving products that the Company now or formerly manufactured and sold),intellectualproperty,commercial,antitrust,federal healthcare program related laws and regulations,such as the False Claims Act and anti-kickback laws,securities,and environmental,health and safety laws in the United States and other jurisdictions.Unless otherwise stated,the Company is vigorously defending all such litigation and proceedings.From timeto time,the Company also receives subpoenas,investigative demands or requests for information from various government agencies in the United States and foreign countries.The Company generally responds in a cooperative,thorough and timely manner.These responses sometimes require time and effort and can result in considerable costs beingincurred by the Company.Such requests can also lead to the assertion of claims or the commencement of administrative,civil,or criminal legal proceedings against theCompany and others,as well as to settlements.The Company also from time to time becomes aware of certain writs of summons,pre-suit claims,demands or other preliminaryor informal assertions of potential future claims,and may engage in respect of such matters where it believes it would be appropriate to work towards a negotiated resolution ofsuch matters.The outcomes of legal proceedings and regulatory matters are often difficult to predict.Any determination that the Companys operations or activities are not,orwere not,in compliance with applicable laws or regulations could result in the imposition of fines,civil or criminal penalties,and equitable remedies,including disgorgement,suspension or debarment or injunctive relief.Process for Disclosure and Recording of Liabilities Related to Legal Proceedings:Many lawsuits and claims involve highly complex issues relating to causation,scientificevidence,and alleged actual damages,all of which are otherwise subject to substantial uncertainties.Assessments of lawsuits and claims can involve a series of complexjudgments about future events and can rely heavily on estimates and assumptions.The categories of legal proceedings in which the Company is involved may include multiplelawsuits and claims,may be spread across multiple jurisdictions and courts which may handle the lawsuits and claims differently,may involve numerous and different types ofplaintiffs,raising claims and legal theories based on specific allegations that may not apply to other matters,and may seek substantial compensatory and,in some cases,punitive,damages.These and other factors contribute to the complexity of these lawsuits and claims and make it difficult for the Company to predict outcomes and makereasonable estimates of any resulting losses.The Companys ability to predict outcomes and make reasonable estimates of potential losses is further influenced by the fact that aresolution of one or more matters within a category of legal proceedings may impact the resolution of other matters in that category in terms of timing,amount of liability,orboth.When making determinations about recording liabilities related to legal proceedings,the Company complies with the requirements of ASC 450,Contingencies,and relatedguidance,and records liabilities in those instances where it can reasonably estimate the amount of the loss and when the loss is probable.Where the reasonable estimate of theprobable loss is a range,the Company records as an accrual in its financial statements the most likely estimate of the loss,or the low end of the range if there is no one bestestimate.The Company either discloses the amount of a possible loss or range of loss in excess of established accruals if estimable,or states that such an estimate cannot bemade.The Company discloses significant legal proceedings even where liability is not probable or the amount of the liability is not estimable,or both,if the Company believesthere is at least a reasonable possibility that a loss may be incurred.Based on experience and developments,the Company reexamines its estimates of probable liabilities andassociated expenses and receivables each period,and whether a loss previously determined to not be reasonably estimable and/or not probable is now able to be reasonablyestimated or has become probable.Where appropriate,the Company makes additions to or adjustments of its reasonably estimated losses and/or accruals.As a result,thecurrent accruals and/or estimates of loss and the estimates of the potential impact on the Companys consolidated financial position,results of operations and cash flows for thelegal proceedings and claims pending against the Company will likely change over time.Because litigation is subject to inherent uncertainties,and unfavorable rulings or developments could occur,the Company may ultimately incur charges substantially in excessof presently recorded liabilities,including with respect to matters for which no accruals are currently recorded,because losses are not currently probable and reasonablyestimable.Many of the matters described herein are at varying stages,seek an indeterminate amount of damages or seek damages in amounts that the Company believes are notindicative of the ultimate losses that may be incurred.It is not uncommon for claims to be resolved over many years.As a matter progresses,the Company may receiveinformation,through plaintiff demands,through discovery,in the form of reports of purported experts,or in the context of settlement or mediation discussions that purport toquantify an amount of alleged damages,but with which the Company may not agree.Such information may or may not lead the Company to determine that it is able to make areasonable estimate as to a probable loss or range of loss in connection with a matter.However,even when a loss or range of loss is not probable and reasonably estimable,developments in,or the ultimate resolution of,a matter could be material to the Company and could have a material adverse effect on the Company,its consolidated financialposition,results of operations and cash flows.In addition,future adverse rulings or developments,or settlements in,one or more matters could result in future changes todeterminations of probable and reasonably estimable losses in other matters.24Table of ContentsProcess for Disclosure and Recording of Insurance Receivables Related to Legal Proceedings:The Company estimates insurance receivables based on an analysis of theterms of its numerous policies,including their exclusions,pertinent case law interpreting comparable policies,its experience with similar claims,and assessment of the natureof the claim and remaining coverage,and records an amount it has concluded is recognizable and expects to receive in light of the loss recovery and/or gain contingencymodels under ASC 450,ASC 610-30,and related guidance.For those insured legal proceedings where the Company has recorded an accrued liability in its financial statements,the Company also records receivables for the amount of insurance that it concludes as recognizable from the Companys insurance program.For those insured matters wherethe Company has not recorded an accrued liability because the liability is not probable or the amount of the liability is not estimable,or both,but where the Company hasincurred an expense in defending itself,the Company records receivables for the amount of insurance that it concludes as recognizable for the expense incurred.Impact of Solventum Spin-Off:On April 1,2024,the Company completed the planned spin-off of its Health Care business,known as Solventum,as an independent company.Concurrent with the spin-off,the Company and Solventum entered into various agreements,including transition agreements and a separation and distribution agreement that,among other things,identified the assets to be transferred,the liabilities to be assumed,indemnification and defense obligations,and the contracts to be transferred toSolventum and 3M as part of the spin-off.In general,and except as noted below and as set forth in the separation and distribution agreement,certain liabilities related toSolventum or the assets that are transferred to Solventum in connection with the spin-off will be retained by or transferred to Solventum.For example,potential liabilitiesassociated with the matters previously described under the Bair Hugger and Federal False Claims Act/Qui Tam Litigation sections of this Note 17 have been assumed bySolventum pursuant to the separation and distribution agreement,and Solventum will indemnify and defend the Company in these actions.The separation and distribution agreement governs the allocation of liabilities related to PFAS(as defined below)between the Company and Solventum,which liabilities willnot be subject to the general allocation principles otherwise set forth in the separation and distribution agreement.The Company will retain all PFAS-related liabilities resultingfrom the business,operations,and activities of(x)the Companys business(as defined in the separation and distribution agreement)and(y)Solventums business(as defined inthe separation and distribution agreement)prior to April 1,2024.Solventum will retain liability for all PFAS-related liabilities resulting from the business,operations,andactivities of its business at or after April 1,2024,other than liabilities from product claims alleging harm from the presence of PFAS in certain products of Solventums businesssold at or after April 1,2024,and prior to January 1,2026(subject to exceptions described in further detail below).The Company will retain liabilities related to site-basedPFAS contamination at any real property owned,leased or operated by the Company and liabilities for site-based PFAS contamination arising from third-party claims at sitesallocated to the Solventum group in the separation to the extent such liabilities relate to PFAS contamination existing at or prior to April 1,2024.Solventum assumes PFASliabilities from the Solventum sites to the extent resulting from an action taken by any member of the Solventum group following April 1,2024,or from any failure bySolventum following April 1,2024,to use commercially reasonable efforts that are consistent with then-current industry standards to avoid contamination.The Company willalso retain PFAS liabilities for product claims(x)arising from the Companys products,(y)arising from Solventums products sold prior to April 1,2024,and(z)arising fromcertain products sold by Solventum at or after April 1,2024,and prior to January 1,2026(subject to the exceptions described below).Clause(z)in the immediately precedingsentence will not extend to PFAS liabilities for product claims resulting from(i)new products introduced by Solventum following April 1,2024,that contain or are enabled byPFAS that is not supplied by the Company,(ii)products that are modified by Solventum after April 1,2024,to add,contain or become enabled by PFAS that is not supplied bythe Company,or with respect to which any modification made after April 1,2024,in the formulation or production of the product that changes the amount or type of PFAScontained in the product or the amount or type of PFAS enabling the product,in each case from and after the date of such modification,(iii)PFAS that is added to a Solventumproduct after it is sold by Solventum and(iv)PFAS that has accumulated in or on a Solventum product as a result of the use of the product(whether or not the product is beingused as directed),including through filtration,purification or similar application.Solventum will be responsible for the maintenance of certain PFAS containment measures atits properties after the effective time of the distribution.In addition,and consistent with the allocation described above,the Company will retain specifically identified PFAS-related liabilities,including those resulting from specified PFAS-related litigation matters and liabilities under the Companys settlement agreement with public water systemsin the United States,as described below.The following sections first describe the significant legal proceedings in which the Company is involved,and then describe the liabilities and associated insurance receivablesthe Company has accrued relating to its significant legal proceedings.Respirator Mask/Asbestos Litigation:As of September 30,2024,the Company is a named defendant,with multiple co-defendants,in numerous lawsuits in various courts thatpurport to represent approximately 4,045 individual claimants,compared to approximately 4,042 individual claimants with actions pending December 31,2023.25Table of ContentsThe vast majority of the lawsuits and claims resolved by and currently pending against the Company allege use of some of the Companys mask and respirator products andseek damages from the Company and other defendants for alleged personal injury from workplace exposures to asbestos,silica,coal mine dust or other occupational dustsfound in products manufactured by other defendants or generally in the workplace.A minority of the lawsuits and claims resolved by and currently pending against theCompany generally allege personal injury from occupational exposure to asbestos from products previously manufactured by the Company,which are often unspecified,as wellas products manufactured by other defendants,or occasionally at Company premises.The Companys current volume of new and pending matters is substantially lower than it experienced at the peak of filings in 2003.The number of claims alleging more seriousinjuries,including mesothelioma,other malignancies,and black lung disease,is expected to represent a greater percentage of total claims than in the past.Over the past twentyplus years,the Company has prevailed in nineteen of the twenty cases tried to a jury(including the lawsuits described below)and,in the last twelve months,3M hassuccessfully defended three respirator product liability trials.In November 2023,a jury in Hawaii delivered a defense verdict in favor of 3M,concluding that 3Ms 8710respirator was not a cause of plaintiffs mesothelioma.In February 2024,a jury in Kentucky delivered a defense verdict in favor of 3M,concluding that 3Ms 8710 and 8210respirators that the plaintiff claimed to have used were not defective.In April 2024,another jury in Kentucky returned a defense verdict in 3Ms favor and concluded that 3Ms8710 respirator that the plaintiff claimed to have used was not defective.The Company has demonstrated in these past trial proceedings that its respiratory protection products are effective as claimed when used in the intended manner and in theintended circumstances.Consequently,the Company believes that claimants are unable to establish that their medical conditions,even if significant,are attributable to theCompanys respiratory protection products.Nonetheless,the Companys litigation experience indicates that claims of persons alleging more serious injuries,includingmesothelioma,other malignancies,and black lung disease,are costlier to resolve than the claims of unimpaired persons,and it therefore believes the average cost of resolvingpending and future claims on a per-claim basis will continue to be higher than it experienced in prior periods when the vast majority of claims were asserted by medicallyunimpaired claimants.In the second half of 2020 and into 2021,the Company experienced an increase in the number of cases filed that allege injuries from exposures to coalmine dust,but the rate of coal mine dust-related case filings decelerated in 2022 and continues to stay significantly lower than in 2021.3M moved two cases involving over 400plaintiffs to federal court based on,among others,the Class Action Fairness Act.The federal district court remanded the cases to state court.In March 2023,the Sixth CircuitCourt of Appeals granted 3Ms petition to review the remand order,and in April 2023 reversed the district courts remand order;accordingly,those cases will remain in federalcourt.As previously reported,the State of West Virginia,through its Attorney General,filed a complaint in 2003 against the Company and two other manufacturers of respiratoryprotection products in the Circuit Court of Lincoln County,West Virginia,and amended its complaint in 2005.The amended complaint seeks substantial,but unspecified,compensatory damages primarily for reimbursement of the costs allegedly incurred by the State for workers compensation and healthcare benefits provided to all workers withoccupational pneumoconiosis and unspecified punitive damages.In October 2019,the court granted the States motion to sever its unfair trade practices claim,which seekscivil penalties of up to$5,000 per violation under the states Consumer Credit Protection Act relating to statements that the State contends were misleading about 3Msrespirators.In April 2024,the court set a trial date for the unfair trade practices claims in December 2024.In October 2024,the court moved the trial date to January 7,2025,for a bench trial only to determine if any liability exists;if liability is found by the judge,then damages would be determined in a separate trial with an advisory jury at a laterdate.An expert witness retained by the State has estimated that 3M sold over five million respirators into the state during the relevant time period,and the State alleges thateach respirator sold constitutes a separate violation under the Act.3M disputes the experts estimates and the States position regarding what constitutes a separate violation ofthe Act.3M has asserted various additional defenses,including that the Companys marketing did not violate the Act at any time,and that the States claims are barred under theapplicable statute of limitations.No liability has been recorded for any portion of this matter because the Company believes that liability is not probable and reasonablyestimable at this time.In addition,the Company is not able to estimate a possible loss or range of loss due to open factual and legal questions.Respirator Mask/Asbestos Liabilities and Insurance ReceivablesThe Company regularly conducts a comprehensive legal review of its respirator mask/asbestos liabilities.The Company reviews recent and historical claims data,includingwithout limitation,(i)the number of pending claims filed against the Company,(ii)the nature and mix of those claims(i.e.,the proportion of claims asserting usage of theCompanys mask or respirator products and alleging exposure to each of asbestos,silica,coal or other occupational dusts,and claims pleading use of asbestos-containingproducts allegedly manufactured by the Company),(iii)the costs to defend and resolve pending claims,and(iv)trends in filing rates and in costs to defend and resolve claims(collectively,the“Claims Data”).As part of its comprehensive legal review,the Company regularly provides the Claims Data to a third party with expertise in determining theimpact of Claims Data on future filing trends and costs.The third party assists the Company in estimating the costs to defend and resolve pending and future claims.TheCompany uses this analysis to develop its estimate of probable liability.26Table of ContentsDevelopments may occur that could affect the Companys estimate of its liabilities.These developments include,but are not limited to,significant changes in(i)the keyassumptions underlying the Companys accrual,including the number of future claims,the nature and mix of those claims,and the average cost of defending and resolvingclaims and in maintaining trial readiness(ii)trial and appellate outcomes,(iii)the law and procedure applicable to these claims,and(iv)the financial viability of other co-defendants and insurers.As a result of its review of its respirator mask/asbestos liabilities,of pending and expected lawsuits and of the cost of resolving claims of persons who claim more seriousinjuries,including mesothelioma,other malignancies,and black lung disease,the Company increased its accruals in the first nine months of 2024 for respirator mask/asbestosliabilities by$41 million.In the first nine months of 2024,the Company made payments for legal defense costs and settlements of$69 million related to the respiratormask/asbestos litigation.As of September 30,2024,the Company had an accrual for respirator mask/asbestos liabilities(excluding Aearo accruals)of$546 million.Thisaccrual represents the Companys estimate of probable loss and reflects an estimation period for future claims that may be filed against the Company approaching the year2050.The Company cannot estimate the amount or upper end of the range of amounts by which the liability may exceed the accrual the Company has established because of(i)the inherent difficulty in projecting the number of claims that have not yet been asserted or the time period in which future claims may be asserted,(ii)the fact that complaintsnearly always assert claims against multiple defendants where the damages alleged are typically not attributed to individual defendants so that a defendants share of liabilitymay turn on the law of joint and several liability,which can vary by state,(iii)the multiple factors described above that the Company considers in estimating its liabilities,and(iv)the several possible developments described above that may occur that could affect the Companys estimate of liabilities.As of September 30,2024,the Company had an immaterial receivable for insurance recoveries related to the respirator mask/asbestos litigation.In addition,the Companycontinues to seek coverage under the policies of certain insolvent and other insurers.Once those claims for coverage are resolved,the Company will have collectedsubstantially all of its remaining insurance coverage for respirator mask/asbestos claims.Respirator Mask/Asbestos Litigation Aearo Technologies:On April 1,2008,a subsidiary of the Company acquired the stock of Aearo Holding Corp.,the parent of AearoTechnologies(“Aearo”).Aearo manufactured and sold various products,including personal protection equipment,such as eye,ear,head,face,fall and certain respiratoryprotection products.Aearo and/or other companies that previously owned and operated Aearos respirator business(American Optical Corporation,Warner-Lambert LLC,AOCorp.and Cabot Corporation(“Cabot”)are named defendants,with multiple co-defendants,including the Company,in numerous lawsuits in various courts in which plaintiffsallege use of mask and respirator products and seek damages from Aearo and other defendants for alleged personal injury from workplace exposures to asbestos,silica-related,coal mine dust,or other occupational dusts found in products manufactured by other defendants or generally in the workplace.As of September 30,2024,the Company,through its Aearo subsidiary,had accruals of$53 million for product liabilities and defense costs related to current and future Aearo-related asbestos,silica-related and coal mine dust claims.Responsibility for legal costs,as well as for settlements and judgments,is shared in an informal arrangement amongAearo,Cabot,American Optical Corporation and a subsidiary of Warner Lambert and their respective insurers(the“Payor Group”).Liability is allocated among the partiesbased on the number of years each company sold respiratory products under the“AO Safety”brand and/or owned the AO Safety Division of American Optical Corporation andthe alleged years of exposure of the individual plaintiff.Aearos share of the contingent liability is further limited by an agreement entered into between Aearo and Cabot onJuly 11,1995.This agreement provides that,so long as Aearo pays to Cabot a quarterly fee of$100,000,Cabot will retain responsibility and liability for,and indemnify Aearoagainst,any product liability claims involving exposure to asbestos,silica,or silica products for respirators sold prior to July 11,1995.Because of the difficulty in determininghow long a particular respirator remains in the stream of commerce after being sold,Aearo and Cabot have applied the agreement to claims arising out of the alleged use ofrespirators involving exposure to asbestos,silica or silica products prior to January 1,1997.With these arrangements in place,Aearos potential liability is limited to exposuresalleged to have arisen from the use of respirators involving exposure to asbestos,silica,or silica products on or after January 1,1997.To date,Aearo has elected to pay thequarterly fee.Aearo could potentially be exposed to additional claims for some part of the pre-July 11,1995,period covered by its agreement with Cabot if Aearo elects todiscontinue its participation in this arrangement,or if Cabot is no longer able to meet its obligations in these matters.27Table of ContentsDevelopments may occur that could affect the estimate of Aearos liabilities.These developments include,but are not limited to:(i)significant changes in the number of futureclaims,(ii)significant changes in the average cost of resolving claims,(iii)significant changes in the legal costs of defending these claims,(iv)significant changes in the mixand nature of claims received,(v)trial and appellate outcomes,(vi)significant changes in the law and procedure applicable to these claims,(vii)significant changes in theliability allocation among the co-defendants,(viii)the financial viability of members of the Payor Group including exhaustion of available insurance coverage limits,and/or(ix)a determination that the interpretation of the contractual obligations on which Aearo has estimated its share of liability is inaccurate.The Company cannot determine theimpact of these potential developments on its current estimate of Aearos share of liability for these existing and future claims.If any of the developments described above wereto occur,the actual amount of these liabilities for existing and future claims could be significantly larger than the amount accrued.Because of the inherent difficulty inprojecting the number of claims that have not yet been asserted,the complexity of allocating responsibility for future claims among the Payor Group,and the several possibledevelopments that may occur that could affect the estimate of Aearos liabilities,the Company cannot estimate the amount or range of amounts by which Aearos liability mayexceed the accrual the Company has established.Environmental Matters and Litigation:The Companys operations are subject to environmental laws and regulations including those pertaining to air emissions,wastewaterdischarges,toxic or hazardous substances,and the handling and disposal of solid and hazardous wastes,which are enforceable by national,state,and local authorities aroundthe world,and many for which private parties in the United States and abroad may have rights of action.These laws and regulations can form the basis of,under certaincircumstances,claims for the investigation and remediation of contamination,for capital investment in pollution control equipment,for restoration of and/or compensation fordamages to natural resources,and for personal injury and property damages.The Company has incurred,and will continue to incur,costs and capital expenditures in complyingwith these laws and regulations,defending personal injury,natural resource,and property damage claims,and modifying its business operations in light of its environmentalresponsibilities.In its effort to satisfy its environmental responsibilities and comply with environmental laws and regulations,the Company has established,and periodicallyupdates,policies relating to environmental standards of performance for its operations worldwide.Under certain environmental laws,including the United States Comprehensive Environmental Response,Compensation and Liability Act of 1980(CERCLA)and similarstate laws,the Company may be jointly and severally liable,sometimes with other potentially responsible parties,for the costs of investigation and remediation ofenvironmental contamination at current or former facilities and at off-site locations where hazardous substances have been released or disposed of.The Company has identifiednumerous locations,many of which are in the United States,at which it may have some liability for remediation of contamination under applicable environmental laws.Pleaserefer to the section entitled“Environmental Liabilities and Insurance Receivables”that follows for information on the amount of the accrual for such liabilities.Environmental MattersAs previously reported,the Company has been voluntarily cooperating with ongoing reviews by local,state,federal(primarily the U.S.Environmental Protection Agency(EPA),and international agencies of possible environmental and health effects of various perfluorinated compounds,including perfluorooctanoate(PFOA),perfluorooctane sulfonate(PFOS),perfluorohexane sulfonic acid(PFHxS),perfluorobutane sulfonate(PFBS),hexafluoropropylene oxide dimer acid(HFPO-DA)andother per-and polyfluoroalkyl substances(collectively,PFAS).As a result of a phase-out decision in May 2000,the Company no longer manufactures certain PFAS compounds including PFOA,PFOS,PFHxS,and their precursorcompounds.The Company ceased manufacturing and using the vast majority of those compounds within approximately two years of the phase-out announcement and ceasedall manufacturing and the last significant use of those compounds by the end of 2008.The Company continues to manufacture a variety of shorter-chain-length PFAScompounds.These compounds are used as input materials to a variety of products,including engineered fluorinated fluids,fluoropolymers and fluorelastomers,as well assurfactants,additives,and coatings.Through its ongoing life cycle management and its raw material composition identification processes associated with the Companyspolicies covering the use of all persistent and bio-accumulative materials,the Company continues to review,control or eliminate the presence of certain PFAS in purchasedmaterials,as intended substances in products,or as byproducts in some of 3Ms current manufacturing processes,products,and waste streams.28Table of Contents3M announced in December 2022 it will take two actions with respect to PFAS:exiting all PFAS manufacturing by the end of 2025,and working to discontinue the use ofPFAS across its product portfolio by the end of 2025.3M is progressing toward the exit of all PFAS manufacturing by the end of 2025.3M is also working to discontinue theuse of PFAS across its product portfolio by the end of 2025 and has made progress in eliminating the use of PFAS across its product portfolio in a variety of applications.Withrespect to PFAS-containing products not manufactured by 3M in the Companys supply chains,the Company continues to evaluate the availability and feasibility of third-p
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Table of ContentsUnited StatesSecurities and Exchange CommissionWashington,D.C.20549_ Form 10-Q(Mark.
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Western Digital Fiscal Third Quarter2024 Financial ResultsApril 25,2024 2024 WESTERN DIGITAL CORPORA.
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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549Form 10-Q(Mark One)QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the Quarterly Period Ended September 30,2024or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from_to_Commission File Number:001-31240 NEWMONT CORPORATION(Exact name of registrant as specified in its charter)Delaware84-1611629(State or Other Jurisdiction of Incorporation or Organization)(I.R.S.Employer Identification No.)6900 E Layton AveDenver,Colorado80237(Address of Principal Executive Offices)(Zip Code)Registrants telephone number,including area code(303)863-7414Securities registered or to be registered pursuant to Section 12(b)of the Act.Title of each classTrading SymbolName of each exchange on which registeredCommon stock,par value$1.60 per shareNEMNew York Stock ExchangeIndicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant was required to file such reports),and(2)has been subject to such filing requirements for the past 90 days.Yes NoIndicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months(or for such shorter period that the registrant was required to submit such files).Yes NoIndicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting company,or an emerging growth company.See definitions of“large accelerated filer,”“accelerated filer,”“smaller reporting company,”and“emerging growth company”in Rule 12-b2 of the Exchange Act.Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting companyEmerging growth companyIf an emerging growth company,indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the registrant is a shell company(as defined in Rule 12-b2 of the Exchange Act).Yes NoThere were 1,138,450,479 shares of common stock outstanding on October 17,2024.Table of ContentsTABLE OF CONTENTSPART I FINANCIAL INFORMATIONPageGLOSSARY OF ABBREVIATIONS1THIRD QUARTER 2024 RESULTS AND HIGHLIGHTS2ITEM 1.FINANCIAL STATEMENTS6Condensed Consolidated Statements of Operations6Condensed Consolidated Statements of Comprehensive Income(Loss)7Condensed Consolidated Balance Sheets8Condensed Consolidated Statements of Cash Flows9Condensed Consolidated Statements of Changes in Equity11Notes to the Condensed Consolidated Financial Statements13Note 1 Basis of Presentation13Note 2 Summary of Significant Accounting Policies13Note 3 Business Acquisition15Note 4 Segment Information17Note 5 Assets and Liabilities Held for Sale17Note 6 Sales23Note 7 Reclamation and Remediation26Note 8 Other Expense,Net28Note 9 Other Income(Loss),Net28Note 10 Income and Mining Taxes29Note 11 Fair Value Accounting29Note 12 Derivative Instruments32Note 13 Investments35Note 14 Inventories36Note 15 Stockpiles and Ore on Leach Pads36Note 16 Debt36Note 17 Other Liabilities37Note 18 Accumulated Other Comprehensive Income(Loss)38Note 19 Net Change in Operating Assets and Liabilities38Note 20 Commitments and Contingencies38ITEM 2.MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS43Overview43Consolidated Financial Results44Results of Consolidated Operations51Foreign Currency Exchange Rates58Liquidity and Capital Resources59Environmental64Non-GAAP Financial Measures64Accounting Developments73Safe Harbor Statement73ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK75ITEM 4.CONTROLS AND PROCEDURES77PART II OTHER INFORMATIONITEM 1.LEGAL PROCEEDINGS78ITEM 1A.RISK FACTORS78ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS78ITEM 3.DEFAULTS UPON SENIOR SECURITIES78ITEM 4.MINE SAFETY DISCLOSURES78ITEM 5.OTHER INFORMATION79ITEM 6.EXHIBITS80SIGNATURES81Table of ContentsGLOSSARY:UNITS OF MEASURE AND ABBREVIATIONSUnitUnit of Measure$United States Dollar%PercentA$Australian DollarC$Canadian DollargramMetric GramounceTroy OuncepoundUnited States PoundtonneMetric TonAbbreviationDescriptionAISC(1)All-In Sustaining CostsARCAsset Retirement CostASCFASB Accounting Standard CodificationASUFASB Accounting Standard UpdateAUDAustralian DollarCADCanadian DollarCASCosts Applicable to SalesDTADeferred tax assetDTLDeferred tax liabilityEBITDA(1)Earnings Before Interest,Taxes,Depreciation and AmortizationEIAEnvironmental Impact AssessmentEPAU.S.Environmental Protection AgencyESGEnvironmental,Social and GovernanceExchange ActU.S.Securities Exchange Act of 1934FASBFinancial Accounting Standards BoardGAAPU.S.Generally Accepted Accounting PrinciplesGEO(2)Gold Equivalent OuncesGHGGreenhouse Gases,which are defined by the EPA as gases that trap heat in the atmosphereGISTMGlobal Industry Standard on Tailings ManagementIASBInternational Accounting Standards BoardIFRSInternational Financial Reporting StandardsLIBORLondon Interbank Offered RateLBMALondon Bullion Market AssociationLMELondon Metal ExchangeMD&AManagements Discussion and Analysis of Consolidated Financial Condition and Results of OperationsMINAMMinistry of the Environment of PeruMine ActU.S.Federal Mine Safety and Health Act of 1977MINEMMinistry of Energy and Mines of PeruMSHAFederal Mine Safety and Health AdministrationMXNMexican PesoNPDESNational Pollutant Discharge Elimination SystemSECU.S.Securities and Exchange CommissionSecurities ActU.S.Securities Act of 1933SOFRSecured Overnight Financing RateU.S.The United States of AmericaUSDUnited States DollarWTPWater Treatment Plant_(1)Refer to Non-GAAP Financial Measures within Part I,Item 2,MD&A.(2)Refer to Results of Consolidated Operations within Part I,Item 2,MD&A.Table of Contents1NEWMONT CORPORATIONTHIRD QUARTER 2024 RESULTS AND HIGHLIGHTS(unaudited,in millions,except per share,per ounce and per pound)Three Months EndedSeptember 30,Nine Months EndedSeptember 30,2024202320242023Financial Results:Sales$4,605$2,493$13,030$7,855 Gold$3,945$2,400$10,909$7,083 Copper$329$90$1,003$282 Silver$147$5$557$246 Lead$32$136$64 Zinc$152$(2)$425$180 Costs applicable to sales(1)$2,310$1,371$6,572$4,396 Gold$1,892$1,273$5,359$3,789 Copper$199$50$521$151 Silver$75$23$282$200 Lead$26$7$88$62 Zinc$118$18$322$194 Net income(loss)from continuing operations$875$162$1,892$666 Net income(loss)$924$163$1,960$681 Net income(loss)from continuing operations attributable to Newmont stockholders$873$157$1,877$649 Per common share,diluted:Net income(loss)from continuing operations attributable to Newmont stockholders$0.76$0.20$1.63$0.82 Net income(loss)attributable to Newmont stockholders$0.80$0.20$1.69$0.84 Adjusted net income(loss)(2)$936$286$2,400$872 Adjusted net income(loss)per share,diluted(2)$0.81$0.36$2.08$1.10 Earnings before interest,taxes and depreciation and amortization(2)$1,776$760$4,692$2,660 Adjusted earnings before interest,taxes and depreciation and amortization(2)$1,967$933$5,627$2,833 Net cash provided by(used in)operating activities of continuing operations$3,807$2,138 Free cash flow(2)$1,280$392 Cash dividends paid per common share in the period ended September 30,$0.25$0.40$0.75$1.20 Cash dividends declared per common share for the period ended September 30,$0.25$0.40$0.75$1.20 _(1)Excludes Depreciation and amortization and Reclamation and remediation.(2)Refer to Non-GAAP Financial Measures within Part I,Item 2,MD&A.Table of Contents2NEWMONT CORPORATIONTHIRD QUARTER 2024 RESULTS AND HIGHLIGHTS(unaudited,in millions,except per share,per ounce and per pound)Three Months EndedSeptember 30,Nine Months EndedSeptember 30,2024202320242023Operating Results:Consolidated gold ounces(thousands):Produced 1,574 1,260 4,727 3,696 Sold 1,568 1,250 4,710 3,669 Attributable gold ounces(thousands):Produced(1)1,668 1,291 4,950 3,804 Sold(2)1,551 1,229 4,660 3,614 Consolidated and attributable gold equivalent ounces-other metals(thousands):(3)Produced 430 58 1,396 602 Sold 412 59 1,367 575 Consolidated and attributable-other metals:Produced copper:Pounds(millions)81 23 245 75 Tonnes(thousands)37 10 111 34 Sold copper:Pounds(millions)77 25 241 76 Tonnes(thousands)35 11 110 34 Produced silver(million ounces)7 24 14 Sold silver(million ounces)6 24 12 Produced lead:Pounds(millions)43 148 86 Tonnes(thousands)19 67 39 Sold lead:Pounds(millions)36 144 72 Tonnes(thousands)17 66 33 Produced zinc:Pounds(millions)127 398 180 Tonnes(thousands)58 181 82 Sold zinc:Pounds(millions)134 (2)382 187 Tonnes(thousands)61 (1)174 85 Average realized price:Gold(per ounce)$2,518$1,920$2,316$1,930 Copper(per pound)$4.31$3.68$4.17$3.71 Silver(per ounce)(4)$25.98 N.M.$23.72$20.18 Lead(per pound)(4)$0.86 N.M.$0.94$0.90 Zinc(per pound)(4)$1.14 N.M.$1.11$0.97 Consolidated costs applicable to sales:(5)(6)Gold(per ounce)$1,207$1,019$1,138$1,033 Gold equivalent ounces-other metals(per ounce)(3)$1,015$1,636$887$1,056 All-in sustaining costs:(6)Gold(per ounce)$1,611$1,426$1,537$1,425 Gold equivalent ounces-other metals(per ounce)(3)$1,338$2,422$1,225$1,511 _(1)Attributable gold ounces produced includes 66 and 52 thousand ounces for the three months ended September 30,2024 and 2023,respectively,and 173 and 163 thousand ounces for the nine months ended September 30,2024 and 2023,respectively,related to the Pueblo Viejo mine,which is 40%owned by Newmont and accounted for as an equity method investment.For the three and nine months ended September 30,2024,Attributable gold ounces produced also includes 43 thousand ounces and 99 thousand ounces,respectively,related to the Fruta del Norte mine,which is wholly owned by Lundin Gold,in which the Company holds a 31.9%interest at September 30,2024 and is accounted for as an equity method investment on a quarter lag.(2)Attributable gold ounces sold excludes ounces related to the Pueblo Viejo mine and the Fruta del Norte mine.Table of Contents3(3)Gold equivalent ounces are calculated as pounds or ounces produced or sold multiplied by the ratio of the other metals price to the gold price.Refer to Results of Consolidated Operations within Part I,Item 2,MD&A for further information.(4)On June 7,2023,the Company suspended its operations at Peasquito due to the Union strike.As a result of the suspended operations,no production occurred during the third quarter of 2023.Sales activity recognized in the third quarter of 2023 is related to adjustments on provisionally priced concentrate sales subject to final settlement.Consequently,price per ounce/pound metrics are not meaningful(N.M.).(5)Excludes Depreciation and amortization and Reclamation and remediation.(6)Refer to Non-GAAP Financial Measures within Part I,Item 2,MD&A.Table of Contents4Third Quarter 2024 Highlights(dollars in millions,except per share,per ounce and per pound amounts,unless otherwise noted)Net income:Reported Net income(loss)from continuing operations attributable to Newmont stockholders of$873 or$0.76 per diluted share,an increase of$716 from the prior-year quarter primarily due to an increase to attributable net income related to the acquired Newcrest sites.Excluding the impact of acquired sites,the increase is primarily due to an increase in Sales at Peasquito as a result of the work stoppage due to a labor strike that began in June 2023(Peasquito labor strike),resulting in no sales at Peasquito in the third quarter of 2023.Additionally,Net income(loss)from continuing operations attributable to Newmont stockholders increased due to higher average realized prices primarily for gold.This increase was partially offset by the Loss on assets held for sale of$115 and higher Costs applicable to sales.Adjusted net income:Reported Adjusted net income of$936 or$0.81 per diluted share,an increase of$0.45 per diluted share from the prior-year quarter(refer to Non-GAAP Financial Measures within Part I,Item 2,MD&A).Adjusted EBITDA:Reported$1,967 in Adjusted EBITDA,an increase of 111%from the prior-year quarter(refer to Non-GAAP Financial Measures within Part I,Item 2,MD&A).Cash flow:Reported Net cash provided by(used in)operating activities of$3,807 for the nine months ended September 30,2024,an increase of 78%from the prior year,and free cash flow of$1,280(refer to Non-GAAP Financial Measures within Part I,Item 2,MD&A).Portfolio Updates:Completed the sale of the Batu and Elang contingent consideration assets for cash consideration of$153,which was received in September 2024.Announced agreement to sell the assets of the Telfer reportable segment,including Newmonts 70%interest in the Havieron development project and other related assets;the sale is expected to close in the fourth quarter of 2024.In October,announced agreement to sell the Akyem reportable segment;the sale is expected to close in the fourth quarter of 2024.Attributable gold production:Produced 1.7 million attributable ounces of gold and 430 thousand attributable gold equivalent ounces from co-products.Financial strength:Ended the quarter with$3.0 billion of consolidated cash,cash of$86 included in Assets held for sale,and$7.1 billion of total liquidity;redeemed$150 of senior notes;settled$347 of share repurchases from$1 billion share repurchase program.In October,declared a dividend of$0.25 per share and the Companys Board authorized an additional$2 billion share repurchase program to be executed at the Companys discretion,utilizing open market repurchases to occur from time to time throughout the next 24 months.Table of Contents5PART IFINANCIAL INFORMATIONITEM 1.FINANCIAL STATEMENTS.NEWMONT CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(unaudited,in millions except per share)Three Months EndedSeptember 30,Nine Months EndedSeptember 30,2024202320242023Sales(Note 6)$4,605$2,493$13,030$7,855 Costs and expenses:Costs applicable to sales(1)2,310 1,371 6,572 4,396 Depreciation and amortization 631 480 1,887 1,427 Reclamation and remediation(Note 7)132 166 324 298 Exploration 74 78 184 192 Advanced projects,research and development 47 53 149 132 General and administrative 113 70 314 215 Loss on assets held for sale(Note 5)115 846 Other expense,net(Note 8)55 37 187 86 3,477 2,255 10,463 6,746 Other income(expense):Other income(loss),net(Note 9)17 42 238 124 Interest expense,net of capitalized interest(86)(48)(282)(162)(69)(6)(44)(38)Income(loss)before income and mining tax and other items 1,059 232 2,523 1,071 Income and mining tax benefit(expense)(Note 10)(244)(73)(695)(449)Equity income(loss)of affiliates(Note 13)60 3 64 44 Net income(loss)from continuing operations 875 162 1,892 666 Net income(loss)from discontinued operations 49 1 68 15 Net income(loss)924 163 1,960 681 Net loss(income)attributable to noncontrolling interests(Note 1)(2)(5)(15)(17)Net income(loss)attributable to Newmont stockholders$922$158$1,945$664 Net income(loss)attributable to Newmont stockholders:Continuing operations$873$157$1,877$649 Discontinued operations 49 1 68 15$922$158$1,945$664 Weighted average common shares(millions):Basic1,1477951,151795Effect of employee stock-based awards211Diluted1,1497961,152795Net income(loss)attributable to Newmont stockholders per common share:Basic:Continuing operations$0.76$0.20$1.63$0.82 Discontinued operations 0.04 0.06 0.02$0.80$0.20$1.69$0.84 Diluted:Continuing operations$0.76$0.20$1.63$0.82 Discontinued operations 0.04 0.06 0.02$0.80$0.20$1.69$0.84 _(1)Excludes Depreciation and amortization and Reclamation and remediation.The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.Table of Contents6NEWMONT CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(LOSS)(unaudited,in millions)Three Months EndedSeptember 30,Nine Months EndedSeptember 30,2024202320242023Net income(loss)$924$163$1,960$681 Other comprehensive income(loss):Change in marketable securities,net of tax (1)Ownership interest in equity method investments(8)(10)Foreign currency translation adjustments (2)6 6 1 Change in pension and other post-retirement benefits,net of tax (2)(5)Change in cash flow hedges,net of tax 38 (9)11 (16)Other comprehensive income(loss)28 (5)7 (21)Comprehensive income(loss)$952$158$1,967$660 Comprehensive income(loss)attributable to:Newmont stockholders$950$153$1,952$643 Noncontrolling interests 2 5 15 17$952$158$1,967$660 The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.Table of Contents7NEWMONT CORPORATIONCONDENSED CONSOLIDATED BALANCE SHEETS(unaudited,in millions)At September 30,2024At December 31,2023ASSETSCash and cash equivalents$3,016$3,002 Trade receivables(Note 6)974 734 Investments(Note 13)43 23 Inventories(Note 14)1,487 1,663 Stockpiles and ore on leach pads(Note 15)688 979 Derivative assets(Note 12)42 198 Other current assets 753 913 Assets held for sale(Note 5)5,574 Current assets 12,577 7,512 Property,plant and mine development,net 33,697 37,563 Investments(Note 13)4,150 4,143 Stockpiles and ore on leach pads(Note 15)2,114 1,935 Deferred income tax assets 229 268 Goodwill 2,721 3,001 Derivative assets(Note 12)161 444 Other non-current assets 526 640 Total assets$56,175$55,506 LIABILITIESAccounts payable$772$960 Employee-related benefits 542 551 Income and mining taxes payable 317 88 Lease and other financing obligations 112 114 Debt(Note 16)1,923 Other current liabilities(Note 17)2,081 2,362 Liabilities held for sale(Note 5)2,584 Current liabilities 6,408 5,998 Debt(Note 16)8,550 6,951 Lease and other financing obligations 437 448 Reclamation and remediation liabilities(Note 7)6,410 8,167 Deferred income tax liabilities 2,883 2,987 Employee-related benefits 632 655 Silver streaming agreement 721 779 Other non-current liabilities(Note 17)238 316 Total liabilities 26,279 26,301 Commitments and contingencies(Note 20)EQUITYCommon stock 1,840 1,854 Treasury stock(276)(264)Additional paid-in capital 30,228 30,419 Accumulated other comprehensive income(loss)(Note 18)21 14(Accumulated deficit)Retained earnings (2,101)(2,996)Newmont stockholders equity 29,712 29,027 Noncontrolling interests 184 178 Total equity 29,896 29,205 Total liabilities and equity$56,175$55,506 The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.Table of Contents8NEWMONT CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(unaudited,in millions)Nine Months Ended September 30,20242023Operating activities:Net income(loss)$1,960$681 Non-cash adjustments:Depreciation and amortization 1,887 1,427 Loss on assets held for sale(Note 5)846 Net(income)loss from discontinued operations(68)(15)Reclamation and remediation 306 287 Stock-based compensation 66 58 Change in fair value of investments(Note 9)(39)42(Gain)loss on asset and investment sales,net(Note 9)(36)(34)Deferred income taxes(35)(3)Other non-cash adjustments 58 37 Net change in operating assets and liabilities(Note 19)(1,138)(342)Net cash provided by(used in)operating activities of continuing operations 3,807 2,138 Net cash provided by(used in)operating activities of discontinued operations 45 9 Net cash provided by(used in)operating activities 3,852 2,147 Investing activities:Additions to property,plant and mine development (2,527)(1,746)Proceeds from asset and investment sales 345 219 Purchases of investments (62)(545)Return of investment from equity method investees 55 30 Contributions to equity method investees(35)(90)Proceeds from maturities of investments 28 1,355 Other 42 24 Net cash provided by(used in)investing activities of continuing operations(2,154)(753)Net cash provided by(used in)investing activities of discontinued operations 153 Net cash provided by(used in)investing activities (2,001)(753)Financing activities:Repayment of debt(3,783)Proceeds from issuance of debt,net 3,476 Dividends paid to common stockholders(863)(954)Repurchases of common stock(448)Distributions to noncontrolling interests(113)(107)Funding from noncontrolling interests 87 107 Payments on lease and other financing obligations(62)(48)Payments for withholding of employee taxes related to stock-based compensation(12)(24)Other(28)(39)Net cash provided by(used in)financing activities(1,746)(1,065)Effect of exchange rate changes on cash,cash equivalents and restricted cash(15)(9)Net change in cash,cash equivalents and restricted cash,including cash and restricted cash reclassified to assets held for sale 90 320 Less:cash and restricted cash reclassified to assets held for sale(1)(140)Net change in cash,cash equivalents and restricted cash(50)320 Cash,cash equivalents and restricted cash at beginning of period 3,100 2,944 Cash,cash equivalents and restricted cash at end of period$3,050$3,264 Table of Contents9NEWMONT CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(unaudited,in millions)Nine Months Ended September 30,20242023Reconciliation of cash,cash equivalents and restricted cash:Cash and cash equivalents$3,016$3,190 Restricted cash included in Other current assets 3 1 Restricted cash included in Other non-current assets 31 73 Total cash,cash equivalents and restricted cash$3,050$3,264 _(1)During the first quarter of 2024,certain non-core assets were determined to meet the criteria for assets held for sale.As a result,the related assets and liabilities as of September 30,2024,including$86 of Cash and cash equivalents and$54 of restricted cash,previously included in Other current assets and Other non-current assets,were reclassified to Assets held for sale and Liabilities held for sale,respectively.Refer to Note 5 for additional information.The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.Table of Contents10NEWMONT CORPORATIONCONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY(unaudited,in millions)Common StockTreasury StockAdditionalPaid-InCapitalAccumulatedOtherComprehensiveIncome(Loss)RetainedEarnings(AccumulatedDeficit)NoncontrollingInterestsTotalEquitySharesAmountSharesAmountBalance at December 31,2023 1,159$1,854 (7)$(264)$30,419$14$(2,996)$178$29,205 Net income(loss)170 9 179 Other comprehensive income(loss)(30)(30)Dividends declared(1)(285)(285)Distributions declared to noncontrolling interests (35)(35)Cash calls requested from noncontrolling interests 33 33 Withholding of employee taxes related to stock-based compensation (10)(10)Stock-based awards and related share issuances 1 1 17 18 Balance at March 31,2024 1,160 1,855 (7)(274)30,436 (16)(3,111)185 29,075 Net income(loss)853 4 857 Other comprehensive income(loss)9 9 Dividends declared(1)(292)(292)Distributions declared to noncontrolling interests (36)(36)Cash calls requested from noncontrolling interests 31 31 Repurchase and retirement of common stock(2)(4)(66)(35)(105)Stock-based awards and related share issuances 24 24 Balance at June 30,2024 1,158 1,851 (7)(274)30,394 (7)(2,585)184 29,563 Net income(loss)922 2 924 Other comprehensive income(loss)28 28 Dividends declared(1)(287)(287)Distributions declared to noncontrolling interests (36)(36)Cash calls requested from noncontrolling interests 34 34 Repurchase and retirement of common stock(2)(7)(11)(185)(151)(347)Withholding of employee taxes related to stock-based compensation (2)(2)Stock-based awards and related share issuances 19 19 Balance at September 30,2024 1,151$1,840 (7)$(276)$30,228$21$(2,101)$184$29,896 _(1)Cash dividends paid per common share were$0.25 and$0.75 for the three and nine months ended September 30,2024,respectively.(2)In October 2024,an additional$302 of common stock was repurchased and retired.Table of Contents11NEWMONT CORPORATIONCONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY(unaudited,in millions)Common StockTreasury StockAdditionalPaid-InCapitalAccumulatedOtherComprehensiveIncome(Loss)RetainedEarnings(AccumulatedDeficit)NoncontrollingInterestsTotalEquitySharesAmountSharesAmountBalance at December 31,2022 799$1,279 (6)$(239)$17,369$29$916$179$19,533 Net income(loss)351 12 363 Other comprehensive income(loss)(6)(6)Dividends declared(1)(319)(319)Distributions declared to noncontrolling interests (40)(40)Cash calls requested from noncontrolling interests 31 31 Withholding of employee taxes related to stock-based compensation (1)(22)(22)Stock-based awards and related share issuances 1 2 17 19 Balance at March 31,2023 800 1,281 (7)(261)17,386 23 948 182 19,559 Net income(loss)155 155 Other comprehensive income(loss)(10)(10)Dividends declared(1)(318)(318)Distributions declared to noncontrolling interests (26)(26)Cash calls requested from noncontrolling interests 34 34 Stock-based awards and related share issuances 21 21 Balance at June 30,2023 800 1,281 (7)(261)17,407 13 785 190 19,415 Net income(loss)158 5 163 Other comprehensive income(loss)(5)(5)Dividends declared(1)(320)(320)Distributions declared to noncontrolling interests (41)(41)Cash calls requested from noncontrolling interests 32 32 Withholding of employee taxes related to stock-based compensation (2)(2)Stock-based awards and related share issuances 1 18 18 Balance at September 30,2023 801$1,281 (7)$(263)$17,425$8$623$186$19,260 _(1)Cash dividends paid per common share were$0.40 and$1.20 for the three and nine months ended September 30,2023,respectively.The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.Table of Contents12NOTE 1 BASIS OF PRESENTATIONThe interim Condensed Consolidated Financial Statements(“interim statements”)of Newmont Corporation,a Delaware corporation and its subsidiaries(collectively,“Newmont,”“we,”“us,”or the“Company”)are unaudited.In the opinion of management,all normal recurring adjustments and disclosures necessary for a fair presentation of these interim statements have been included.The results reported in these interim statements are not necessarily indicative of the results that may be reported for the entire year.These interim statements should be read in conjunction with Newmonts Consolidated Financial Statements for the year ended December 31,2023,as filed with the SEC on February 29,2024 on Form 10-K.The year-end balance sheet data was derived from the audited financial statements and,in accordance with the instructions to Form 10-Q,certain information and footnote disclosures required by GAAP have been condensed or omitted.Divestment of Non-Core AssetsTelferIn September 2024,the Company entered into a binding agreement to sell the assets of the Telfer reportable segment to Greatland Gold plc.The sale,which is subject to customary conditions and regulatory approvals,is expected to be completed in the fourth quarter of 2024.The Company recorded a loss on assets held for sale of$115 during the quarter,which is subject to change upon completion of the transaction,and is currently evaluating other potential impacts of the terms of the agreement on its consolidated financial statements.The Telfer assets and liabilities remain designated as held for sale as of September 30,2024.AkyemIn October 2024,the Company entered into a definitive agreement to sell the Akyem reportable segment to Zijin Mining Group Co.,Ltd.The sale,which is subject to customary conditions and regulatory approvals,is expected to be completed in the fourth quarter of 2024.The Company does not expect to record a loss on the completion of the transaction and is currently evaluating other potential impacts of the terms of the agreement on its consolidated financial statements.The Akyem assets and liabilities remain designated as held for sale as of September 30,2024.Refer to Note 5 for further information on the Companys assets and liabilities held for sale.Newcrest TransactionOn November 6,2023,the Company completed its business combination transaction with Newcrest Mining Limited,a public Australian mining company limited by shares(Newcrest),whereby Newmont,through Newmont Overseas Holdings Pty Ltd,an Australian proprietary company limited by shares(“Newmont Sub”),acquired all of the ordinary shares of Newcrest in a fully stock transaction for total non-cash consideration of$13,549.Newcrest became a direct wholly owned subsidiary of Newmont Sub and an indirect wholly owned subsidiary of Newmont(such acquisition,the“Newcrest transaction”).The combined company continues to be traded on the New York Stock Exchange under the ticker NEM.The combined company is also listed on the Toronto Stock Exchange under the ticker NGT,on the Australian Securities Exchange under the ticker NEM,and on the Papua New Guinea Securities Exchange under the ticker NEM.Refer to Note 3 for further information.Noncontrolling InterestsNet loss(income)attributable to noncontrolling interest is comprised of income of$2 and$5 for the three months ended September 30,2024 and 2023,respectively,and of$15 and$17 for the nine months ended September 30,2024 and 2023,respectively,related to Suriname Gold project C.V.(“Merian”).Newmont consolidates Merian through its wholly-owned subsidiary,Newmont Suriname LLC.,in its Condensed Consolidated Financial Statements as the primary beneficiary of Merian,which is a variable interest entity.Discontinued OperationsNet income(loss)from discontinued operations includes results related to the Batu Hijau and Elang contingent consideration assets associated with the sale of PT Newmont Nusa Tenggara in 2016.In the third quarter of 2024,the Company completed the sale of the Batu and Elang contingent consideration assets for cash consideration of$153,resulting in a gain of$15 included in Net income(loss)from discontinued operations.Refer to Note 12 for further information.NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESRisks and UncertaintiesAs a global mining company,the Companys revenue,profitability and future rate of growth are substantially dependent on prevailing metal prices,primarily for gold,but also for copper,silver,lead,and zinc.Historically,the commodity markets have been very volatile,and there can be no assurance that commodity prices will not be subject to wide fluctuations in the future.A substantial or extended decline in commodity prices could have a material adverse effect on the Companys financial position,results of operations,Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)13cash flows,access to capital and on the quantities of reserves that the Company can economically produce.The carrying value of the Companys Property,plant and mine development,net;Inventories;Stockpiles and ore on leach pads;Investments;certain Derivative assets;Deferred income tax assets;and Goodwill are particularly sensitive to the outlook for commodity prices.A decline in the Companys price outlook from current levels could result in material impairment charges related to these assets.The Companys global operations expose it to risks associated with public health crises,including epidemics and pandemics such as COVID-19,and geopolitical and macroeconomic pressures such as the Russian invasion of Ukraine.The Company continues to experience the impacts from recent geopolitical and macroeconomic pressures.With the resulting volatile environment,the Company continues to monitor inflationary conditions,the effects of certain countermeasures taken by central banks,and the potential for further supply chain disruptions as well as an uncertain and evolving labor market.The following factors could have further potential short-and,possibly,long-term material adverse impacts on the Company including,but not limited to,volatility in commodity prices and the prices for gold and other metals,changes in the equity and debt markets or country specific factors adversely impacting discount rates,significant cost inflation impacts on production,capital and asset retirement costs,logistical challenges,workforce interruptions and financial market disruptions,energy market disruptions,as well as potential impacts to estimated costs and timing of projects.Refer to Note 20 below for further information on risks and uncertainties that could have a potential impact on the Company as well as Note 2 of the Consolidated Financial Statements included in Part II,Item 8,of the Companys Annual Report on Form 10-K for the year ended December 31,2023,as filed with the SEC on February 29,2024.The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the accounting for and recognition and disclosure of assets,liabilities,equity,revenues and expenses.The Company must make these estimates and assumptions because certain information used is dependent on future events,cannot be calculated with a high degree of precision from data available or simply cannot be readily calculated based on generally accepted methodologies.Actual results could differ from these estimates.Assets Held for SaleA long-lived asset(or a disposal group for a long-lived asset comprising a group of assets and related liabilities)is classified as held for sale if it is probable that the asset will be recovered through sale rather than continuing use.The Company records assets held for sale at the lower of its carrying value or fair value less costs to sell and ceases depreciation and amortization on long-lived assets(or disposal groups).The following criteria are used to determine if a long-lived asset(or disposal group)is held for sale:(i)management,having the authority to approve the action,commits to a plan to sell the property;(ii)the property is available for immediate sale in its present condition,subject only to terms that are usual and customary;(iii)an active program to locate a buyer and other actions required to complete the plan to sell have been initiated;(iv)the sale of the property is probable and is expected to be completed within one year;(v)the property is being actively marketed for sale at a price that is reasonable in relation to its current fair value;and(vi)actions necessary to complete the plan of sale indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.In determining the fair value of the assets less costs to sell,the Company considers factors including current sales prices for comparable assets,discounted cash flow projections,third party valuations and indicative offer information,if applicable.The Companys assumptions about fair value require significant judgment because the current market is sensitive to changes in economic conditions,as well as asset-specific considerations.The Company estimates the fair value of assets held for sale based on current market conditions and assumptions made by management,which may differ from actual results and could result in future impairments if market conditions deteriorate.An impairment loss on the initial classification and subsequent measurement of an asset held for sale is recognized as an expense.Any subsequent increase in fair value less costs to sell(not exceeding the accumulated impairment loss that has been previously recognized)is recognized as a reversal of expense.The Company continues to evaluate the fair value of assets held for sale and monitors market conditions and other economic factors,which could result in additional impairments in the future.ReclassificationsCertain amounts and disclosures in prior years have been reclassified to conform to the current year presentation.Recently Adopted Accounting Pronouncements and Securities and Exchange Commission RulesEffects of Reference Rate ReformIn March 2020,ASU No.2020-04 was issued which provides optional guidance for a limited period of time to ease the potential burden on accounting for contract modifications caused by reference rate reform.In January 2021,ASU No.2021-01 was issued which broadened the scope of ASU No.2020-04 to include certain derivative instruments.In December 2022,ASU No.2022-06 was issued which deferred the sunset date of ASU No.2020-04.The guidance is effective for all entities as of March 12,2020 through Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)14December 31,2024.The guidance may be adopted over time as reference rate reform activities occur and should be applied on a prospective basis.The Company has completed its review of key contracts and does not expect the guidance to have a material impact to the consolidated financial statements or disclosures.The Company will continue to review new contracts to identify references to the LIBOR and implement adequate fallback provisions if not already implemented to mitigate the risks or impacts from the transition.Recently Issued Accounting Pronouncements and Securities and Exchange Commission RulesSEC Final Climate RuleIn March 2024,the SEC issued a final rule that requires registrants to disclose climate-related information in their annual reports and in registration statements.In April 2024,the SEC chose to stay the newly adopted rule pending judicial review of related consolidated Eighth Circuit petitions.If the stay is lifted,certain disclosures may be required in annual reports for the year ending December 31,2025,filed in 2026.The Company is currently evaluating the impacts of the rules on its consolidated financial statements.Improvement to Income Tax DisclosuresIn December 2023,ASU 2023-09 was issued which requires disaggregated information about the effective tax rate reconciliation and additional information on taxes paid that meet a qualitative threshold.The new guidance is effective for annual reporting periods beginning after December 15,2024,with early adoption permitted.The Company is currently evaluating the impacts of the guidance on its consolidated financial statements.Segments ReportingIn November 2023,ASU 2023-07 was issued which improves disclosures about a public entitys reportable segments and addresses requests from investors and other allocators of capital for additional,more detailed information about a reportable segments expenses.The ASU applies to all public entities that are required to report segment information in accordance with ASC 280 and is effective starting in annual periods beginning after December 15,2023.The adoption is not expected to have a material impact on the Companys consolidated financial statements or disclosures.NOTE 3 BUSINESS ACQUISITIONOn November 6,2023(the“acquisition date”),Newmont completed its business combination transaction with Newcrest,a public Australian mining company limited by shares,whereby Newmont,through Newmont Sub,acquired all of the ordinary shares of Newcrest,pursuant to a court-approved scheme of arrangement under Part 5.1 of the Australian Corporations Act 2001(Cth)between Newcrest and its shareholders,as contemplated by a scheme implementation deed,dated as of May 15,2023,by and among Newmont,Newmont Sub and Newcrest,as amended from time to time.Upon implementation,Newmont completed the business acquisition of Newcrest,in which Newmont was the acquirer and Newcrest became a direct wholly owned subsidiary of Newmont Sub and an indirect wholly owned subsidiary of Newmont(such acquisition,the“Newcrest transaction”).The acquisition of Newcrest increased the Companys gold and other metal reserves and expanded the operating jurisdictions.The acquisition date fair value of the consideration transferred consisted of the following:(in millions,except share and per share data)SharesPer SharePurchase ConsiderationStock ConsiderationShares of Newmont exchanged for Newcrest outstanding ordinary shares 357,691,627$37.88$13,549 Total Purchase Price$13,549 The Company retained an independent appraiser to determine the fair value of assets acquired and liabilities assumed.In accordance with the acquisition method of accounting,the purchase price of Newcrest has been allocated to the acquired assets and assumed liabilities based on their estimated acquisition date fair values.The fair value estimates were based on income,market and cost valuation methods.The excess of the total consideration over the estimated fair value of the amounts initially assigned to the identifiable assets acquired and liabilities assumed has been recorded as goodwill,which is not deductible for income tax purposes.The goodwill balance is mainly attributable to:(i)the acquisition of existing operating mines with access to an assembled workforce that cannot be duplicated at the same costs by new entrants;(ii)operating synergies anticipated from the integration of the operations of Newmont and Newcrest;and(iii)the application of Newmonts Full Potential program and potential strategic and financial benefits that include the increase in reserve base and opportunities to identify additional mineralization through exploration activities.As of September 30,2024,the Company had not yet fully completed the analysis to assign fair values to all assets acquired and liabilities assumed,and therefore the purchase price allocation for Newcrest is preliminary.At September 30,2024,remaining items to finalize include the fair value of materials and supplies inventories,property,plant and mine development,goodwill,reclamation and remediation liabilities,employee-related benefits,unrecognized tax benefits,and deferred income tax assets and Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)15liabilities.The preliminary purchase price allocation will be subject to further refinement as the Company continues to implement Newmont accounting policies and refine its estimates and assumptions based on information available at the acquisition date.These refinements may result in material changes to the estimated fair value of assets acquired and liabilities assumed.The purchase price allocation adjustments can be made throughout Newmonts measurement period,which is not to exceed one year from the acquisition date.The following table summarizes the preliminary purchase price allocation for the Newcrest transaction at September 30,2024:ASSETSAt September 30,2024Cash and cash equivalents$668 Trade receivables 212 Inventories 722 Stockpiles and ore on leach pads 137 Derivative assets 42 Other current assets 193 Current assets 1,974 Property,plant and mine development,net(1)13,588 Investments 990 Stockpiles and ore on leach pads 131 Deferred income tax assets(2)239 Goodwill(3)2,463 Derivative assets 362 Other non-current assets 94 Total assets 19,841 LIABILITIESAccounts payable 344 Employee-related benefits 143 Lease and other financing obligations 16 Debt 1,923 Other current liabilities 334 Current liabilities 2,760 Debt 1,373 Lease and other financing obligations 35 Reclamation and remediation liabilities(4)460 Deferred income tax liabilities(2)1,429 Employee-related benefits 225 Other non-current liabilities 10 Total liabilities 6,292 Net assets acquired$13,549 _(1)During 2024,measurement period adjustments totaling$405 increased Property,plant and mine development,net,from refinements to the preliminary valuation of the Canadian and Telfer assets.(2)Deferred income tax assets and liabilities represent the future tax benefit or future tax expense associated with the differences between the preliminary fair value allocated to assets(excluding goodwill)and liabilities and a tax basis increase to the preliminary fair value of the assets acquired in Australia and the historical carryover tax basis of assets and liabilities in all other jurisdictions.No deferred tax liability is recognized for the basis difference inherent in the preliminary fair value allocated to goodwill.During 2024,adjustments resulted in deferred income tax assets increasing by a total of$50 and deferred income tax liabilities increasing by a total of$98.(3)Preliminary goodwill is attributable to reportable segments as follows:$1,088 to Brucejack;$404 to Red Chris;$356 to Cadia;and$615 to Lihir.During 2024,the Company identified and recorded measurement period adjustments to the Companys preliminary purchase price allocation,as a result of additional analysis performed.These adjustments resulted in a total reduction in Goodwill of$281.(4)During 2024,measurement period adjustments of$67 increased Reclamation and remediation liabilities from refinements to the preliminary valuation of the Telfer asset.Sales and Net income(loss)attributable to Newmont stockholders in the Condensed Consolidated Statement of Operations includes Newcrest revenue of$1,160 and$3,292 and Newcrest net income(loss)of$145 and$621 for the three and nine months ended September 30,2024,respectively.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)16Pro Forma Financial InformationThe following unaudited pro forma financial information presents consolidated results assuming the Newcrest transaction occurred on January 1,2022.Three Months Ended September 30,2023Nine Months Ended September 30,2023Sales$3,517$11,235 Net income(loss)attributable to Newmont stockholders$281$1,268 NOTE 4 SEGMENT INFORMATIONThe Company regularly reviews its segment reporting for alignment with its strategic goals and operational structure as well as for evaluation of business performance and allocation of resources by Newmonts Chief Operating Decision Maker(CODM).The reportable segments of the Company comprise each of its 17 mining operations that it manages,which includes its 70.0%proportionate interest in Red Chris,and its 38.5%proportionate interest in Nevada Gold Mines(NGM)which it does not directly manage.In the following tables,Income(loss)before income and mining tax and other items from reportable segments does not reflect general corporate expenses,interest(except project-specific interest)or income and mining taxes.Intercompany revenue and expense amounts have been eliminated within each segment in order to report on the basis that management uses internally for evaluating segment performance.The Companys business activities and operating segments that are not considered reportable,including all equity method investments,are reported in Corporate and Other,which has been provided for reconciliation purposes.The financial information relating to the Companys segments is as follows:Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)17SalesCosts Applicable to SalesDepreciation and AmortizationAdvanced Projects,Research and Development and ExplorationIncome(Loss)before Income and Mining Tax and Other ItemsCapital Expenditures(1)Three Months Ended September 30,2024Brucejack(2)$252$98$70$7$75$17 Red Chris(2)Gold 24 21 7 Copper 51 71 22 Total Red Chris 75 92 29 5 (48)41 Peasquito:Gold 144 54 22 Silver 147 75 32 Lead 32 26 10 Zinc 152 118 43 Total Peasquito 475 273 107 2 51 32 Merian 158 113 24 6 13 14 Cerro Negro 150 91 31 4 20 58 Yanacocha 220 96 23 2 58 21 Boddington:Gold 326 136 25 Copper 73 44 9 Total Boddington 399 180 34 1 174 34 Tanami 248 98 30 8 99 108 Cadia:(2)Gold 298 80 30 Copper 205 80 31 Total Cadia 503 160 61 3 267 155 Lihir(2)317 206 37 2 66 44 Ahafo 551 192 55 14 293 102 NGM 611 320 103 5 178 103 Corporate and Other 1 11 48 (280)7 Held for sale(3)CC&V 94 54 3 1 33 7 Musselwhite 124 50 1 71 27 Porcupine 172 78 2 2 86 64 lonore 129 70 3 55 27 Telfer:(2)(4)Gold 13 39 1 Copper 4 Total Telfer 13 43 1 6 (158)15 Akyem(5)114 95 10 1 6 4 Consolidated$4,605$2,310$631$121$1,059$880 _(1)Includes an increase in accrued capital expenditures of$3.Consolidated capital expenditures on a cash basis were$877.(2)Sites acquired through the Newcrest transaction.Refer to Note 3 for further information.(3)Refer to Note 5 for further information on held for sale.The Coffee development project disposal group is included in Corporate and Other.(4)During the second quarter,seepage points were detected on the outer wall and around the tailings storage facility at Telfer and the Company temporarily ceased placing new tailings on the facility.Production resumed at the end of the third quarter.In September 2024,the Company entered into a binding agreement to sell the assets of the Telfer reportable segment.The sale is expected to close in the fourth quarter of 2024.Refer to Note 1 for further information.(5)In October 2024,the Company entered into a definitive agreement to sell the Akyem reportable segment.The sale is expected to close in the fourth quarter of 2024.Refer to Note 1 for further information.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)18SalesCosts Applicable to SalesDepreciation and AmortizationAdvanced Projects,Research and Development and ExplorationIncome(Loss)before Income and Mining Tax and Other ItemsCapital Expenditures(1)Three Months Ended September 30,2023CC&V$87$57$6$4$17$21 Musselwhite 92 50 21 2 19 29 Porcupine 118 73 29 5 8 37 lonore(2)91 63 22 3 3 29 Peasquito:(3)Gold(2)16 12 Silver 5 23 19 Lead 7 6 Zinc(2)18 16 Total Peasquito 1 64 53 3 (128)9 Merian 160 104 23 9 24 26 Cerro Negro 124 79 34 3 (1)44 Yanacocha 162 90 27 15 81 Boddington:Gold 350 157 28 Copper 90 50 8 Total Boddington 440 207 36 1 198 54 Tanami 238 81 30 7 157 98 Ahafo 265 133 47 12 82 73 Akyem 135 72 31 6 24 9 NGM 580 298 112 8 151 132 Corporate and Other 9 68 (337)10 Consolidated$2,493$1,371$480$131$232$652 _(1)Includes an increase in prepaid capital expenditures and accrued capital expenditures of$48.Consolidated capital expenditures on a cash basis were$604.(2)In June 2023,the Company evacuated lonore and temporarily shutdown the operation in response to the ongoing wildfires in Canada and continued to incur costs.The Company fully resumed operations during the third quarter of 2023.(3)In June 2023,the National Union of Mine and Metal Workers of the Mexican Republic(the Union)notified the Company of a strike action.In response to the strike notice,the Company suspended operations at Peasquito.The Company reached an agreement with the Union and operations at Peasquito resumed in the fourth quarter of 2023.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)19SalesCosts Applicable to SalesDepreciation and AmortizationAdvanced Projects,Research and Development and ExplorationIncome(Loss)before Income and Mining Tax and Other ItemsCapital Expenditures(1)Nine Months Ended September 30,2024Brucejack(2)$430$236$141$8$42$52 Red Chris(2)Gold 59 35 11 Copper 160 135 41 Total Red Chris 219 170 52 9 (11)125 Peasquito:Gold 385 145 59 Silver 557 282 117 Lead 136 88 36 Zinc 425 322 114 Total Peasquito 1,503 837 326 7 276 90 Merian 455 299 63 15 73 64 Cerro Negro 368 224 83 12 35 135 Yanacocha 587 261 74 8 100 54 Boddington:Gold 945 419 77 Copper 236 141 27 Total Boddington 1,181 560 104 3 506 91 Tanami 667 281 88 23 260 298 Cadia:(2)Gold 843 231 91 Copper 593 214 91 Total Cadia 1,436 445 182 12 790 400 Lihir(2)1,039 539 115 12 355 139 Ahafo 1,354 527 161 31 656 273 NGM 1,760 941 313 17 470 347 Corporate and Other 1 35 138 (1,027)15 Held for sale(3)CC&V 231 139 10 4 (35)20 Musselwhite 357 163 18 4 86 74 Porcupine 503 235 34 5 (29)159 lonore 392 239 21 8 121 77 Telfer:(2)(4)Gold 154 192 13 Copper 14 31 3 Total Telfer 168 223 16 12 (212)39 Akyem(5)380 252 51 5 67 20 Consolidated$13,030$6,572$1,887$333$2,523$2,472 _(1)Includes a decrease in accrued capital expenditures of$55.Consolidated capital expenditures on a cash basis were$2,527.(2)Sites acquired through the Newcrest transaction.Refer to Note 3 for further information.(3)Refer to Note 5 for further information on held for sale.The Coffee development project disposal group is included in Corporate and Other.(4)During the second quarter,seepage points were detected on the outer wall and around the tailings storage facility at Telfer and the Company temporarily ceased placing new tailings on the facility.Production resumed at the end of the third quarter.In September 2024,the Company entered into a binding agreement to sell the assets of the Telfer reportable segment.The sale is expected to close in the fourth quarter of 2024.Refer to Note 1 for further information.(5)In October 2024,the Company entered into a definitive agreement to sell the Akyem reportable segment.The sale is expected to close in the fourth quarter of 2024.Refer to Note 1 for further information.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)20SalesCosts Applicable to SalesDepreciation and AmortizationAdvanced Projects,Research and Development and ExplorationIncome(Loss)before Income and Mining Tax and Other ItemsCapital Expenditures(1)Nine Months Ended September 30,2023CC&V$260$157$19$10$65$44 Musselwhite 255 163 58 7 23 74 Porcupine 366 220 85 15 35 95 lonore(2)320 212 73 6 27 74 Peasquito:(3)Gold 203 123 47 Silver 246 200 78 Lead 64 62 25 Zinc 180 194 70 Total Peasquito 693 579 220 9 (163)81 Merian 423 269 56 17 80 61 Cerro Negro 340 232 99 6 (25)118 Yanacocha 394 225 65 9 6 209 Boddington:Gold 1,125 483 83 Copper 282 151 26 Total Boddington 1,407 634 109 4 657 128 Tanami 605 244 80 20 297 287 Ahafo 777 384 128 28 244 240 Akyem 381 189 86 14 85 31 NGM 1,634 888 323 25 376 339 Corporate and Other 26 154 (636)37 Consolidated$7,855$4,396$1,427$324$1,071$1,818 _(1)Includes an increase in prepaid capital expenditures and accrued capital expenditures of$72.Consolidated capital expenditures on a cash basis were$1,746.(2)In June 2023,the Company evacuated lonore and temporarily shutdown the operation in response to the ongoing wildfires in Canada and continued to incur costs.The Company fully resumed operations during the third quarter of 2023.(3)In June 2023,the Union notified the Company of a strike action.In response to the strike notice,the Company suspended operations at Peasquito.The Company reached an agreement with the Union and operations at Peasquito resumed in the fourth quarter of 2023.NOTE 5 ASSETS AND LIABILITIES HELD FOR SALEBased on a comprehensive review of the Companys portfolio of assets,the Companys Board of Directors approved a portfolio optimization program to divest six non-core assets and a development project in February 2024.The non-core assets to be divested include the CC&V,Musselwhite,Porcupine,lonore,Telfer,and Akyem reportable segments,and the Coffee development project which is included within Corporate and Other.The Telfer disposal group also includes the Havieron development project,which is 70%owned by the Company and accounted for under proportionate consolidation,and other related assets.In February 2024,based on progress made through the Companys active sales program and managements expectation that the sale is probable and will be completed within 12 months,the Company concluded that these non-core assets and the development project met the accounting requirements to be presented as held for sale.While the Company remains committed to a plan to sell these assets for a fair price,there is a possibility that the assets held for sale may exceed one year due to events or circumstances beyond the Companys control.As of December 31,2023,the aggregate net book value of the non-core assets and the development project was$3,419.Upon meeting the requirements to be presented as held for sale,the six non-core assets and the development project were recorded at the lower of the carrying value or fair value,less costs to sell,and will be periodically valued until sale occurs.As a result,a total loss of$115 and$846 was recognized within Loss on assets held for sale for the three and nine months ended September 30,2024,respectively.For the three and nine months ended September 30,2024,the loss is comprised of write-downs of$115 and$624,respectively,and a tax impact resulting in the establishment of a deferred tax asset which increased the respective carrying values and resulted in an additional loss of$and$222,respectively.The write-down resulted in an aggregate net book value of$2,990 at September 30,2024.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)21The estimated fair values were determined using the income approach in the absence of a binding sales agreement and are considered non-recurring level 3 fair value measurements.For fair values estimated using the income approach,the significant inputs included(i)cash flow information available to the Company,(ii)a short-term gold price of$2,575 per ounce,(iii)a long-term gold price of$1,700 per ounce,(iv)current estimates of reserves,resources,and exploration potential,and(v)a reporting unit specific discount rate in the range of 6.0%to 12.0%.The Telfer fair value measurement was based on the binding agreement announced in the third quarter of 2024 and is considered a non-recurring level 3 measurement based on the form of consideration which includes certain unobservable inputs.The Company will continue to monitor its estimates of the fair value of assets held for sale,which could result in additional future impairments based on unfavorable market conditions or other economic factors.The following table presents the carrying value of the major classes of assets and liabilities held for sale by disposal group as of September 30,2024,prior to recognition of the write-down of$624,excluding tax impacts,for the nine months ended September 30,2024:CC&VMusselwhitePorcupinelonoreTelfer(1)Akyem(2)Coffee Project(3)TotalAssets held for sale:Property,plant and mine development,net$97$1,039$1,486$761$496$533$321$4,733 Other assets 464 38 105 137 452 267 2 1,465 Carrying value of assets held for sale$561$1,077$1,591$898$948$800$323$6,198 Liabilities held for sale:Reclamation and remediation liabilities$284$79$546$85$277$404$3$1,678 Other liabilities 37 295 267 61 126 118 2 906 Carrying value of liabilities held for sale$321$374$813$146$403$522$5$2,584 _(1)In September 2024,the Company entered into a binding agreement to sell the assets of the Telfer reportable segment.The sale is expected to close in the fourth quarter of 2024.Refer to Note 1 for further information.(2)In October 2024,the Company entered into a definitive agreement to sell the Akyem reportable segment.The sale is expected to close in the fourth quarter of 2024.Refer to Note 1 for further information.(3)The Coffee Project is included in Corporate and Other in Note 4.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)22NOTE 6 SALESThe following tables present the Companys Sales by mining operation,product and inventory type:Gold Sales from Dor ProductionSales from Concentrate and Other ProductionTotal SalesThree Months Ended September 30,2024Brucejack(1)$161$91$252 Red Chris:(1)Gold 24 24 Copper 51 51 Total Red Chris 75 75 Peasquito:Gold 144 144 Silver(2)147 147 Lead 32 32 Zinc 152 152 Total Peasquito 475 475 Merian 151 7 158 Cerro Negro 150 150 Yanacocha 216 4 220 Boddington:Gold 89 237 326 Copper 73 73 Total Boddington 89 310 399 Tanami 248 248 Cadia:(1)Gold 25 273 298 Copper 205 205 Total Cadia 25 478 503 Lihir(1)317 317 Ahafo 551 551 NGM(3)574 37 611 Held for sale(4)CC&V 94 94 Musselwhite 124 124 Porcupine 172 172 lonore 129 129 Telfer:(1)(5)Gold 6 7 13 Copper Total Telfer 6 7 13 Akyem(6)114 114 Consolidated$3,121$1,484$4,605 _(1)Sites acquired through the Newcrest transaction.Refer to Note 3 for further information.(2)Silver sales from concentrate includes$15 related to non-cash amortization of the silver streaming agreement liability.(3)The Company purchases its proportionate share of gold dor from NGM for resale to third parties.Gold dor purchases from NGM totaled$581 for the three months ended September 30,2024.(4)Refer to Note 5 for further information on held for sale.(5)In September 2024,the Company entered into a binding agreement to sell the assets of the Telfer reportable segment.The sale is expected to close in the fourth quarter of 2024.Refer to Note 1 for further information.(6)In October 2024,the Company entered into a definitive agreement to sell the Akyem reportable segment.The sale is expected to close in the fourth quarter of 2024.Refer to Note 1 for further information.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)23Gold Sales from Dor ProductionSales from Concentrate and Other ProductionTotal SalesThree Months Ended September 30,2023CC&V$87$87 Musselwhite 92 92 Porcupine 118 118 lonore 91 91 Peasquito:(1)Gold (2)(2)Silver(2)5 5 Lead Zinc (2)(2)Total Peasquito 1 1 Merian 160 160 Cerro Negro 124 124 Yanacocha 162 162 Boddington:Gold 86 264 350 Copper 90 90 Total Boddington 86 354 440 Tanami 238 238 Ahafo 265 265 Akyem 135 135 NGM(3)559 21 580 Consolidated$2,117$376$2,493 _(1)Sales activity recognized in the third quarter of 2023 is related to adjustments on provisionally priced concentrate sales subject to final settlement.(2)No amortization of the silver streaming agreement liability was recognized in the third quarter of 2023 within sales from concentrate and other production due to the suspended operations at Peasquito.(3)The Company purchases its proportionate share of gold dor from NGM for resale to third parties.Gold dor purchases from NGM totaled$556 for the three months ended September 30,2023.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)24Gold Sales from Dor ProductionSales from Concentrate and Other ProductionTotal SalesNine Months Ended September 30,2024Brucejack(1)$291$139$430 Red Chris:(1)Gold 59 59 Copper 160 160 Total Red Chris 219 219 Peasquito:Gold 385 385 Silver(2)557 557 Lead 136 136 Zinc 425 425 Total Peasquito 1,503 1,503 Merian 435 20 455 Cerro Negro 368 368 Yanacocha 580 7 587 Boddington:Gold 254 691 945 Copper 236 236 Total Boddington 254 927 1,181 Tanami 667 667 Cadia:(1)Gold 90 753 843 Copper 593 593 Total Cadia 90 1,346 1,436 Lihir(1)1,039 1,039 Ahafo 1,354 1,354 NGM(3)1,664 96 1,760 Held for sale(4)CC&V 231 231 Musselwhite 357 357 Porcupine 503 503 lonore 392 392 Telfer:(1)(5)Gold 30 124 154 Copper 14 14 Total Telfer 30 138 168 Akyem(6)380 380 Consolidated$8,635$4,395$13,030 _(1)Sites acquired through the Newcrest transaction.Refer to Note 3 for further information.(2)Silver sales from concentrate includes$65 related to non-cash amortization of the silver streaming agreement liability.(3)The Company purchases its proportionate share of gold dor from NGM for resale to third parties.Gold dor purchases from NGM totaled$1,669 for the nine months ended September 30,2024.(4)Refer to Note 5 for further information on held for sale.(5)In September 2024,the Company entered into a binding agreement to sell the assets of the Telfer reportable segment.The sale is expected to close in the fourth quarter of 2024.Refer to Note 1 for further information.(6)In October 2024,the Company entered into a definitive agreement to sell the Akyem reportable segment.The sale is expected to close in the fourth quarter of 2024.Refer to Note 1 for further information.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)25Gold Sales from Dor ProductionSales from Concentrate and Other ProductionTotal SalesNine Months Ended September 30,2023CC&V$260$260 Musselwhite 255 255 Porcupine 366 366 lonore 320 320 Peasquito:Gold 34 169 203 Silver(1)246 246 Lead 64 64 Zinc 180 180 Total Peasquito 34 659 693 Merian 423 423 Cerro Negro 340 340 Yanacocha 386 8 394 Boddington:Gold 279 846 1,125 Copper 282 282 Total Boddington 279 1,128 1,407 Tanami 605 605 Ahafo 777 777 Akyem 381 381 NGM(2)1,571 63 1,634 Consolidated$5,997$1,858$7,855 _(1)Silver sales from concentrate includes$31 related to non-cash amortization of the silver streaming agreement liability.(2)The Company purchases its proportionate share of gold dor from NGM for resale to third parties.Gold dor purchases from NGM totaled$1,568 for the nine months ended September 30,2023.Trade Receivables and Provisional SalesAt September 30,2024 and December 31,2023,Trade receivables primarily consisted of sales from provisionally priced concentrate and other production.The impact to Sales from changes in pricing on provisional sales is an increase of$66 and$for the three months ended September 30,2024 and 2023,respectively,and$197 and$for the nine months ended September 30,2024 and 2023,respectively.At September 30,2024,Newmont had the following provisionally priced concentrate sales subject to final pricing over the next several months:Provisionally Priced SalesSubject to Final Pricing(1)Average Provisional Price(per ounce/pound)Gold(ounces,in thousands)231$2,642 Copper(pounds,in millions)87$4.48 Silver(ounces,in millions)3$31.18 Lead(pounds,in millions)18$0.94 Zinc(pounds,in millions)49$1.40 _(1)Includes provisionally priced by-product sales subject to final pricing,which are recognized as a reduction to Costs applicable to sales.NOTE 7 RECLAMATION AND REMEDIATIONThe Companys mining and exploration activities are subject to various domestic and international laws and regulations governing the protection of the environment.These laws and regulations are continually changing and are generally becoming more restrictive.The Company conducts its operations to protect public health and the environment and believes its operations are in compliance with applicable laws and regulations in all material respects.The Company has made,and expects to make in the future,expenditures to comply with such laws and regulations,but cannot predict the full amount of such future expenditures.Estimated future reclamation and remediation costs are based principally on current legal and regulatory requirements.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)26The Companys Reclamation and remediation expense consisted of:Three Months EndedSeptember 30,Nine Months EndedSeptember 30,2024202320242023Reclamation adjustments and other$13$53$17$61 Reclamation accretion 90 60 262 179 Reclamation expense 103 113 279 240 Remediation adjustments and other 26 51 39 52 Remediation accretion 3 2 6 6 Remediation expense 29 53 45 58 Reclamation and remediation$132$166$324$298 The following are reconciliations of Reclamation and remediation liabilities:ReclamationRemediation2024202320242023Balance at January 1,(1)$8,385$6,731$401$373 Additions,changes in estimates,and other(2)(3)(2)75 28 45 Acquisitions and divestitures(4)64 Payments,net(214)(163)(59)(28)Accretion expense 262 179 6 6 Reclassification to Liabilities held for sale(5)(1,658)(20)Balance at September 30,$6,837$6,822$356$396 _(1)The Newcrest transaction occurred on November 6,2023,resulting in an increase in the beginning balance at January 1,2024,as compared to the beginning balance at January 1,2023.Refer to Note 3 for further information.(2)The$75 addition to reclamation for the nine months ended September 30,2023 was primarily due to increased labor and post-closure maintenance costs,and higher estimated costs arising from recent tailings management review and monitoring requirements set forth by GISTM at non-operating portions of the Porcupine site operation,and higher estimated closure costs at NGM due to GISTM compliance at Phoenix.(3)The$28 addition to remediation for the nine months ended September 30,2024 was primarily due to the completion of haul road safety enhancements and continued clean up of contaminated materials and closure of the three mine portals at the Ross Adams mine.The$45 addition to remediation for the nine months ended September 30,2023 was primarily due to higher water management costs and project execution delays at the Midnite Mine.(4)During 2024,measurement period adjustments of$64 increased Reclamation and remediation liabilities from refinements to the preliminary valuation of the Telfer asset.(5)During the first quarter of 2024,certain non-core assets were determined to meet the criteria for assets held for sale.As a result,the related assets and liabilities,including Reclamation and remediation liabilities,were reclassified to Assets held for sale and Liabilities held for sale,respectively.Refer to Note 5 for additional information.At September 30,2024At December 31,2023ReclamationRemediationTotalReclamationRemediationTotalCurrent(1)$717$66$783$558$61$619 Non-current(2)6,120 290 6,410 7,827 340 8,167 Total(3)$6,837$356$7,193$8,385$401$8,786 _(1)The current portion of reclamation and remediation liabilities are included in Other current liabilities.(2)The non-current portion of reclamation and remediation liabilities are included in Reclamation and remediation liabilities.(3)Total reclamation liabilities include$4,759 and$4,804 related to Yanacocha at September 30,2024 and December 31,2023,respectively.The Company is also involved in several matters concerning environmental remediation obligations associated with former,primarily historic,mining activities.Generally,these matters concern developing and implementing remediation plans at the various sites involved.The amounts accrued are reviewed periodically based upon facts and circumstances available at the time.Changes in estimates are recorded in Other current liabilities and Reclamation and remediation liabilities in the period estimates are revised.Included in Assets held for sale at September 30,2024 is$54 of restricted cash held for purposes of settling reclamation and remediation obligations at Akyem.Included in Other non-current assets at September 30,2024 and December 31,2023 are$30 and$81,respectively,of non-current restricted cash held for purposes of settling reclamation and remediation obligations.The amounts at September 30,2024 Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)27primarily relate to Ahafo and San Jose Reservoir at Yanacocha.The amounts at December 31,2023 primarily relate to Ahafo and Akyem.Included in Other non-current assets at September 30,2024 and December 31,2023 are$15 and$21,respectively,of non-current restricted investments,which are legally pledged for purposes of settling reclamation and remediation obligations.The amounts at September 30,2024 and December 31,2023 primarily relate to San Jose Reservoir at Yanacocha.Refer to Note 20 for further discussion of reclamation and remediation matters.NOTE 8 OTHER EXPENSE,NETThree Months EndedSeptember 30,Nine Months EndedSeptember 30,2024202320242023Newcrest transaction and integration costs(1)$17$16$62$37 Impairment charges 18 2 39 10 Settlement costs 7 2 33 2 Restructuring and severance 5 7 20 19 Other 8 10 33 18 Other expense,net$55$37$187$86 _(1)Represents costs incurred related to the Newcrest transaction.Refer to Note 3 for further information.NOTE 9 OTHER INCOME(LOSS),NETThree Months EndedSeptember 30,Nine Months EndedSeptember 30,2024202320242023Interest income$37$35$114$108 Change in fair value of investments 17 (41)39 (42)Gain on asset and investment sales,net(28)(2)36 34 Gain on debt extinguishment,net(1)15 29 Foreign currency exchange,net(29)10 (26)(12)Insurance proceeds(2)37 12 37 Other,net 5 3 34 (1)Other income(loss),net$17$42$238$124 _(1)In the second and third quarter of 2024,the Company partially redeemed certain Senior Notes,resulting in a gain on extinguishment of$15 and$35 for the three and nine months ended September 30,2024,respectively.The gain on extinguishment for the nine months ended September 30,2024 is partially offset by the acceleration of$6 loss from Accumulated Other Comprehensive Income related to the previously terminated interest rate cash flow hedges.Refer to Note 16 for additional information.(2)For the nine months ended September 30,2024,primarily consists of insurance proceeds received of$12 related to a conveyor failure at Ahafo.Gain on asset and investment sales,net.For the three and nine months ended September 30,2024,Gain on asset and investment sales,net primarily consists of the gain recognized of$49 on the sale of the Stream Credit Facility Agreement(SCFA)in the second quarter,partially offset by a loss of$29 recognized on the abandonment of the near-pit sizing and conveying system at Peasquito in the third quarter of 2024.Refer to Note 12 for further information on the sale of the SCFA.For the nine months ended September 30,2023,Gain on asset and investment sales,net primarily consists of the gain recognized on the exchange of the previously held 28.5%investment in Maverix Metals,Inc.(Maverix)for 7.5%ownership interest in Triple Flag Precious Metals Corporation(Triple Flag)resulting from Triple Flags acquisition of all issued and outstanding common shares of Maverix in January 2023,partially offset by the loss on the sale of the Triple Flag investment in March 2023,resulting in a net gain of$36.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)28NOTE 10 INCOME AND MINING TAXESA reconciliation of the U.S.federal statutory tax rate to the Companys effective income tax rate follows:Three Months EndedSeptember 30,(1)Nine Months EndedSeptember 30,(1)2024202320242023Income(loss)before income and mining tax and other items$1,059$232$2,523$1,071 U.S.Federal statutory tax rate 212 21I 21S0 215 Reconciling items:Percentage depletion(1)(12)(6)(13)(2)(49)(4)(40)Change in valuation allowance on deferred tax assets(3)(37)30 69 (3)(82)12 126 Foreign rate differential 7 72 6 13 9 219 8 88 Effect of foreign earnings,net of credits 1 9 6 13 1 30 2 25 Mining and other taxes(net of associated federal benefit)5 55 4 9 6 150 5 58 Uncertain tax position reserve adjustment(1)(6)2 4 (2)(58)3 18 Tax impact of foreign exchange 2 25 (32)(72)(1)(33)(5)(52)Akyem recognition of DTL for assets held for sale(4)(37)1 44 Other(4)(47)1 (2)(56)1 Income and mining tax expense(benefit)23%$244 31%$73 28%$695 42%$449 _(1)Tax rates may not recalculate due to rounding.In the third quarter,Newmonts appeal of an Australian Taxation Office(“ATO”)assessment was heard by the Australian Federal Court.Refer to Note 20 for further information regarding the Australian tax court case.NOTE 11 FAIR VALUE ACCOUNTINGThe following tables set forth the Companys assets and liabilities measured at fair value on a recurring(at least annually)or nonrecurring basis by level within the fair value hierarchy.As required by accounting guidance,assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.Refer to Note 13 of the Consolidated Financial Statements included in Part II,Item 8,of the Companys Annual Report on Form 10-K for the year ended December 31,2023,as filed with the SEC on February 29,2024 for further information on the Companys assets and liabilities included in the fair value hierarchy presented below.Fair Value at September 30,2024TotalLevel 1Level 2Level 3Assets:Cash and cash equivalents(1)$3,016$3,016$Restricted cash 34 34 Trade receivables from provisional concentrate sales,net 946 946 Assets held for sale(Note 5)(2)3,783 3,783 Marketable and other equity securities(Note 13)(3)281 269 12 Restricted marketable debt securities(Note 13)15 15 Derivative assets(Note 12)203 50 153$8,278$3,334$1,008$3,936 Liabilities:Debt(4)$8,938$8,938$Derivative liabilities(Note 12)11 3 8$8,949$8,941$8 Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)29Fair Value at December 31,2023TotalLevel 1Level 2Level 3Assets:Cash and cash equivalents(1)$3,002$3,002$Restricted cash 98 98 Trade receivables from provisional concentrate sales,net 734 734 Long-lived assets 22 22 Marketable and other equity securities(Note 13)252 243 9 Restricted marketable debt securities(Note 13)21 21 Derivative assets(Note 12)642 7 635$4,771$3,364$750$657 Liabilities:Debt(4)$8,975$8,975$Derivative liabilities(Note 12)8 3 5$8,983$8,978$5 _(1)Cash and cash equivalents includes short-term deposits that have an original maturity of three months or less.(2)Assets held for sale at September 30,2024 includes assets held for sale that were written down to their fair value,excluding costs to sell,of$1,564,$1,383,and$836 at March 31,2024,June 30,2024,and September 30,2024,respectively.The aggregate fair value,excluding costs to sell,of net assets held for sale subject to fair value remeasurement was$916,$600,and$433 at March 31,2024,June 30,2024,and September 30,2024,respectively.(3)Excludes certain investments accounted for under the measurement alternative at September 30,2024.(4)Debt is carried at amortized cost.The outstanding carrying value was$8,550 and$8,874 at September 30,2024 and December 31,2023,respectively.Refer to Note 16 for further information.The fair value measurement of debt was based on an independent third-party pricing source.The Companys assets held for sale consist of the six non-core assets and a development project that met the accounting requirements to be presented as held for sale in the first quarter of 2024.The assets are classified as non-recurring within Level 3 of the fair value hierarchy.Refer to Note 5 for further information.The following tables set forth a summary of the quantitative and qualitative information related to the significant observable and unobservable inputs used in the calculation of the Companys Level 3 financial assets and liabilities at September 30,2024 and December 31,2023:DescriptionAt September 30,2024Valuation TechniqueSignificant InputRange,Point Estimate or AverageWeighted Average Discount RateAssets held for sale$3,783 Income-based approach(1)Various(1)Various(1)Various(1)Derivative assets:Hedging instruments(2)(3)$102 Discounted cash flowForward power pricesA$43-A$321 5.00%Contingent consideration assets$48 Discounted cash flowDiscount rate8.04%-26.43.29rivative liabilities(3)$5 Discounted cash flowDiscount rate4.82%-6.15%5.62scriptionAt December 31,2023Valuation TechniqueSignificant InputRange,Point Estimate or AverageWeighted Average Discount RateLong-lived assets$22 Market-multipleVarious(5)Various(5)Various(5)Derivative assets:Derivative assets,not designated for hedging(2)$424 Discounted cash flowDiscount rate6.28%-10.50%9.03%Contingent consideration assets$211 Monte Carlo(4)Discount rate8.04%-26.43.18rivative liabilities$5 Discounted cash flowDiscount rate4.91%-6.15%5.65%_(1)All assets held for sale,with the exception of Telfer,were valued using an income-based approach;refer to Note 5 for information on the assumptions and inputs specific to the non-recurring fair value measurements performed.As a binding agreement was reached for Telfer in the third quarter of 2024,the terms of the agreement were utilized to estimate the fair value of the Telfer assets held for sale at September 30,2024.(2)The SCFA and the Cadia Power Purchase Agreement(Cadia PPA),acquired as part of the Newcrest transaction,were not designated in a hedging relationship at December 31,2023.At January 1,2024,the Company designated the Cadia PPA for hedge accounting,and as a result is included within Hedging instruments at September 30,2024.Additionally,in the second quarter of 2024,the Company sold the SCFA.Refer to Note 12 for further information.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)30(3)At September 30,2024,the current portion of the Cadia PPA of$3 is in a liability position and the non-current portion of$105 is in an asset position.The current portion is included in Derivative liabilities within the fair value hierarchy table.(4)A Monte Carlo valuation model was used for the fair value measurement of the Batu Hijau contingent consideration asset,which was sold in the third quarter of 2024.All other contingent consideration assets are valued using a probability-weighted discounted cash flow model.(5)At December 31,2023,the Company recognized its proportionate share of the non-cash impairment charge on long-lived assets at NGM,which resulted in a remaining long-lived asset balance of$22.The estimated fair value was based on observable market values for comparable assets expressed as dollar per ounce of mineral resources and was considered a non-recurring Level 3 fair value measurement.The following tables set forth a summary of changes in the fair value of the Companys recurring Level 3 financial assets and liabilities:Derivative Assets(1)Total AssetsDerivative Liabilities(2)Total LiabilitiesFair value at December 31,2023$635$635$5$5 Settlements/Reclassifications(3)(76)(76)Revaluation(29)(29)3 3 Sales(4)(377)(377)Fair value at September 30,2024$153$153$8$8 DerivativeAssets(1)Total AssetsDerivative Liabilities(2)Total LiabilitiesFair value at December 31,2022$188$188$3$3 Revaluation 7 7 2 2 Fair value at September 30,2023$195$195$5$5 _(1)In 2024,the gain(loss)recognized on revaluation of derivative assets of$3,$(43)and$11 is included in Other income(loss),net,Other comprehensive income(loss),and Net income(loss)from discontinued operations,respectively.In 2023,the(loss)gain recognized on revaluation derivative assets of$(2)and$9 is included in Other income(loss),net and Net income(loss)from discontinued operations,respectively.(2)In 2024,the loss recognized on revaluation of derivative liabilities of$3 is included in Other comprehensive income(loss).In 2023,the loss recognized on revaluation of derivative liabilities of$2 is included in Other income(loss),net.(3)In the first quarter of 2024,certain amounts relating to the Batu Hijau contingent consideration asset were reclassified from current Derivative assets to Other current assets as a result of achieving certain contractual milestones.(4)In the second quarter of 2024,the Company sold the SCFA resulting in a decrease of$281.In the third quarter of 2024,the Company sold the Batu and Elang Contingent consideration assets resulting in a decrease of$96.Refer to Note 12 for further information.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)31NOTE 12 DERIVATIVE INSTRUMENTSAt September 30,2024At December 31,2023Current derivative assets:Derivative assets,not designated for hedging(1)$115 Contingent consideration assets(2)76 Hedging instruments 42 7$42$198 Non-current derivative assets:Derivative assets,not designated for hedging(1)$309 Contingent consideration assets(2)48 135 Hedging instruments(1)113$161$444 Current derivative liabilities:(3)Contingent consideration liabilities$3$3 Hedging instruments(1)3$6$3 Non-current derivative liabilities:(4)Contingent consideration liabilities$5$5 _(1)The SCFA and the Cadia PPA,acquired as part of the Newcrest transaction,were not designated in a hedging relationship at December 31,2023.At January 1,2024,the Company designated the Cadia PPA for hedge accounting,and as a result is included within Hedging instruments at September 30,2024.Additionally,in the second quarter of 2024,the Company sold the SCFA.See below for further information.(2)Contingent consideration assets at December 31,2023 included the Batu Hijau and Elang contingent consideration assets,which were sold in the third quarter of 2024.Refer below for further information.(3)Included in Other current liabilities.(4)Included in Other non-current liabilities.Derivative Assets,Not Designated for HedgingStream Credit Facility Agreement(SCFA)The SCFA was a non-revolving credit facility in relation to the Fruta del Norte mine,which is wholly owned and operated by Lundin Gold Inc.(Lundin Gold)in which the Company holds a 31.9%equity interest(refer to Note 13 for further information).The SCFA was a financial instrument that met the definition of a derivative and was accounted for at fair value using a probability weighted discounted cash flow model,but was not designated for hedge accounting under ASC 815.The fair value of the SCFA was$276 at December 31,2023,of which$113 was recognized in current Derivative assets and$163 was recognized in non-current Derivative assets.In the second quarter of 2024,the Company completed the sale of the SCFA and Offtake agreement in which Lundin Gold repurchased the SCFA and settled the rights under the Offtake agreement for cash consideration of$330,of which$180 and$150 was received in the second and third quarter of 2024,respectively.Refer to Note 13 for further information on the Offtake agreement.The sale resulted in a gain of$49 recognized in Other Income(loss),net.Hedging InstrumentsHedging instruments consisted of the foreign currency cash flow hedges and the Cadia PPA at September 30,2024.Foreign currency cash flow hedgesIn June 2024,the Company initiated a hedge program by entering into AUD-denominated fixed forward contracts,with A$717 entered into as of September 30,2024,to mitigate variability in the USD-functional cash flows related to the AUD-denominated capital expenditures to be incurred during the construction and development phase of the Tanami Expansion 2 project,Cadia PC1-2 and PC2-3(Cadia Block Caves)and Cadia Tailings Project(Cadia Tails)to be incurred between October 2024 and December 2025.The capital expenditures hedged for the Tanami Expansion 2 project under these fixed forward contracts will be for spend not covered by the hedges entered into in October 2022,as described below.The fixed forward contracts were transacted for risk management purposes.The Company has designated the fixed forward contracts as foreign currency cash flow hedges against the forecasted AUD-denominated capital expenditures for the Tanami Expansion 2,Cadia Block Caves,and Cadia Tails projects.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)32Additionally in June 2024,the Company entered into CAD-denominated and AUD-denominated fixed forward contracts,with C$398 and A$1,491 entered into as of September 30,2024,respectively,to mitigate variability in the USD-functional cash flows related to the CAD-denominated and AUD-denominated operating expenditures expected to be incurred between October 2024 and December 2025 at the Brucejack and Red Chris operating mines located in Canada and the Boddington,Tanami,and Cadia operating mines located in Australia,respectively.The fixed forward contracts were transacted for risk management purposes.The Company has designated the CAD-denominated and AUD-denominated fixed forward contracts as foreign currency cash flow hedges against the forecasted CAD-denominated and AUD-denominated operating expenditures,respectively.In October 2022,the Company entered into A$574 of AUD-denominated fixed forward contracts to mitigate variability in the USD-functional cash flows related to the AUD-denominated capital expenditures expected to be incurred in 2023 and 2024 during the construction and development phase of the Tanami Expansion 2 project.The fixed forward contracts were transacted for risk management purposes.The Company has designated the fixed forward contracts as foreign currency cash flow hedges against the forecasted AUD-denominated Tanami Expansion 2 capital expenditures.To minimize credit risk,the Company only enters into transactions with counterparties that meet certain credit requirements and periodically reviews the creditworthiness of these counterparties.The Company believes that the risk of counterparty default is low and its exposure to credit risk is minimal.The unrealized changes in fair value have been recorded in Accumulated other comprehensive income(loss)and are reclassified to income during the period in which the hedged transaction affects earnings and is presented in the same income statement line item as the earnings effect of the hedged item.If the underlying hedge transaction becomes probable of not occurring,the related amounts will be reclassified to earnings immediately.For the foreign currency cash flow hedges related to capital expenditures,amounts recorded in Accumulated other comprehensive income(loss)are reclassified to earnings through Depreciation and amortization after the respective project reaches commercial production.For the foreign currency cash flow hedges related to operating expenditures,amounts recorded in Accumulated other comprehensive income(loss)are reclassified to earnings through Costs applicable to sales in the month that the operating expenditures are incurred.Cadia Power Purchase Agreement(Cadia PPA)The Cadia PPA is a 15-year renewable power purchase agreement acquired by the Company through the Newcrest transaction.The Cadia PPA will partially hedge against future power price increases at the Cadia mine and will provide the Company with access to large scale generation certificates which the Company intends to surrender to achieve a reduction in its greenhouse gas emissions.At December 31,2023,the Cadia PPA was a financial instrument that met the definition of a derivative under ASC 815 and was accounted for at fair value using a probability weighted discounted cash flow model,but was not designated for hedging.At January 1,2024,the Company designated the Cadia PPA in a cash flow hedging relationship to mitigate the variability in cash flows related to approximately 40 percent of forecasted purchases of power at the Cadia mine for a 15 year period beginning in July 2024.To minimize credit risk,the Company only enters into transactions with counterparties that meet certain credit requirements and periodically reviews the creditworthiness of these counterparties.The Company believes that the risk of counterparty default is low and its exposure to credit risk is minimal.The unrealized changes in fair value have been recorded in Accumulated other comprehensive income(loss)and will be reclassified to income during the period in which the hedged transaction affects earnings and is presented in the same income statement line item as the earnings effect of the hedged item.If the underlying hedge transaction becomes probable of not occurring,the related amounts in Accumulated other comprehensive income(loss)will be reclassified to earnings immediately.For the Cadia PPA cash flow hedge,amounts recorded in Accumulated other comprehensive income(loss)will be reclassified to earnings through Costs applicable to sales the period in which the related hedged electricity is purchased,which began in July 2024.The following table provides the fair value of the Companys derivative instruments designated as cash flow hedges:At September 30,2024At December 31,2023Hedging instrument assets:Foreign currency cash flow hedges,current(1)$42$7 Cadia PPA cash flow hedge,non-current(2)(3)105 Foreign currency cash flow hedges,non-current(2)8$155$7 Hedging instrument liabilities:Cadia PPA cash flow hedge,current(3)(4)$3$3$_(1)Included in current Derivative assets.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)33(2)Included in non-current Derivative assets.(3)At January 1,2024,the Company designated the Cadia PPA for hedge accounting.As a result,the Cadia PPA is captured in Derivative instruments,not designated for hedging at December 31,2023.See above for further information.(4)Included in Other current liabilities.The following table provides the losses(gains)recognized in earnings related to the Companys derivative instruments:Three Months EndedSeptember 30,Nine Months EndedSeptember 30,2024202320242023Loss(gain)on cash flow hedges:Interest rate contracts(1)$2$2$10$4 Cadia PPA cash flow hedge(2)3 3 Foreign currency cash flow hedges(3)6 8$5$8$13$12 _(1)Interest rate contracts relate to swaps entered into,and subsequently settled,associated with the issuance of the 2022 Senior Notes,2035 Senior Notes,2039 Senior Notes,and 2042 Senior Notes.The related gains and losses are reclassified from Accumulated Other Comprehensive Income(Loss)and amortized to Interest expense,net over the term of the respective hedged notes.During the nine months ended September 30,2024,$6 was reclassified to Other income,net as a result of partial redemptions on the 2042 Senior Notes.See Note 16 for additional information.(2)As of September 30,2024,$10 is expected to be reclassified out of Accumulated other comprehensive income(loss)into earnings over the next 12 months.(3)As of September 30,2024,$30 is expected to be reclassified out of Accumulated other comprehensive income(loss)into earnings over the next 12 months.Contingent Consideration Assets and LiabilitiesContingent consideration assets and liabilities are comprised of contingent consideration to be received or paid by the Company in conjunction with various sales of assets and investments with future payment contingent upon meeting certain milestones.These contingent consideration assets and liabilities are accounted for at fair value and consist of financial instruments that meet the definition of a derivative but are not designated for hedge accounting under ASC 815.Refer to Note 11 for further information regarding the fair value of the contingent consideration assets and liabilities.The Company had the following contingent consideration assets and liabilities:At September 30,2024At December 31,2023Contingent consideration assets:Red Lake(1)$41$39 Cerro Blanco(1)4 6 Triple Flag(1)2 4 Batu Hijau and Elang(2)161 Other(1)1 1$48$211 Contingent consideration liabilities:Norte Abierto(3)$3$3 Red Chris(4)3 3 Galore Creek(3)2 2$8$8 _(1)Included in non-current Derivative assets.(2)The Batu Hijau and Elang contingent consideration assets were sold in the third quarter of 2024.Refer below for further information.At December 31,2023,$76 is included in current Derivative assets and$85 is included in non-current Derivative assets.(3)Included in Other non-current liabilities.(4)Acquired through the Newcrest transaction and is included in Other current liabilities.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)34Batu Hijau and Elang Contingent Consideration AssetsThe Batu Hijau and Elang contingent consideration assets relate to the sale of PT Newmont Nusa Tenggara in 2016.In the third quarter of 2024,the Company completed the sale of the Batu and Elang contingent consideration assets for cash consideration of$153.As a result of the sale,the Company recognized a tax benefit of$37 due to the release of the valuation allowance and a gain of$15,partially offset by a related tax impact of$3,recognized in Net income(loss)from discontinued operations.NOTE 13 INVESTMENTSAt September 30,2024At December 31,2023Current investments:Marketable and other equity securities$43$23 Non-current investments:Marketable and other equity securities(1)$263$229 Equity method investments:Pueblo Viejo Mine(40.0%)$1,469$1,489 NuevaUnin Project(50.0%)963 959 Lundin Gold Inc.(31.9%and 32.0%,respectively)922 938 Norte Abierto Project(50.0%)533 528 3,887 3,914$4,150$4,143 Non-current restricted investments:(2)Marketable debt securities$15$21 _(1)At September 30,2024,includes$25 accounted for under the measurement alternative.(2)Non-current restricted investments are legally pledged for purposes of settling reclamation and remediation obligations and are included in Other non-current assets.Refer to Note 7 for further information regarding these amounts.Equity method investmentsIncome(loss)from the Companys equity method investments is recognized in Equity income(loss)of affiliates,which primarily consists of income from Pueblo Viejo and Lundin Gold.Income(loss)from Pueblo Viejo consisted of$33 and$10,for the three months ended September 30,2024 and 2023,respectively,and$47 and$46 for the nine months ended September 30,2024 and 2023,respectively.Income(loss)from Lundin Gold consisted of$24 and$,for the three months ended September 30,2024 and 2023,respectively,and$16 and$for the nine months ended September 30,2024 and 2023,respectively.Pueblo ViejoAs of September 30,2024 and December 31,2023,the Company had outstanding shareholder loans to Pueblo Viejo of$418 and$429,with accrued interest of$9 and$14,respectively,included in the Pueblo Viejo equity method investment.Additionally,the Company has an unfunded commitment to Pueblo Viejo in the form of a revolving loan facility(Revolving Facility).There were no borrowings outstanding under the Revolving Facility as of September 30,2024.The Company purchases its portion(40%)of gold and silver produced from Pueblo Viejo at market price and resells those ounces to third parties.Total payments made to Pueblo Viejo for gold and silver purchased were$163 and$411 for the three and nine months ended September 30,2024.Total payments made to Pueblo Viejo for gold and silver purchased were$105 and$326 for the three and nine months ended September 30,2023,respectively.These purchases,net of subsequent sales,are included in Other income(loss),net and the net amount is immaterial.There were no amounts due to or from Pueblo Viejo for gold and silver purchases as of September 30,2024 or December 31,2023.Lundin Gold Inc.Lundin Gold was acquired as part of the Newcrest transaction on November 6,2023 and is accounted for on a quarterly lag.The Company had the right to purchase 50%of gold produced from Lundin Gold at a price determined based on delivery dates and a defined quotational period and resold the ounces purchased to third parties under an offtake agreement acquired through the Newcrest transaction(the Offtake agreement).In the second quarter of 2024,the Company completed the sale of the SCFA and Offtake agreement in which Lundin Gold repurchased the SCFA and settled the rights under the Offtake agreement,resulting in no activity for the third quarter of 2024.Refer to Note 12 for further information.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)35Total payments made to Lundin Gold under the Offtake agreement for gold purchased was$189 for the nine months ended September 30,2024.These purchases,net of subsequent sales,are included in Other income(loss),net and the net amount is immaterial.There was$13 payable due to Lundin Gold for gold purchases as of December 31,2023,respectively.NOTE 14 INVENTORIESAt September 30,2024At December 31,2023Materials and supplies$1,090$1,247 In-process 130 160 Concentrate 186 134 Precious metals 81 122 Inventories(1)$1,487$1,663 _(1)During the first quarter of 2024,certain non-co
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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549Form 10-Q(Mark One)QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the Quarterly Period Ended June 30,2024or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from_to_Commission File Number:001-31240 NEWMONT CORPORATION(Exact name of registrant as specified in its charter)Delaware84-1611629(State or Other Jurisdiction of Incorporation or Organization)(I.R.S.Employer Identification No.)6900 E Layton AveDenver,Colorado80237(Address of Principal Executive Offices)(Zip Code)Registrants telephone number,including area code(303)863-7414Securities registered or to be registered pursuant to Section 12(b)of the Act.Title of each classTrading SymbolName of each exchange on which registeredCommon stock,par value$1.60 per shareNEMNew York Stock ExchangeIndicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant was required to file such reports),and(2)has been subject to such filing requirements for the past 90 days.Yes NoIndicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months(or for such shorter period that the registrant was required to submit such files).Yes NoIndicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting company,or an emerging growth company.See definitions of“large accelerated filer,”“accelerated filer,”“smaller reporting company,”and“emerging growth company”in Rule 12-b2 of the Exchange Act.Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting companyEmerging growth companyIf an emerging growth company,indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the registrant is a shell company(as defined in Rule 12-b2 of the Exchange Act).Yes NoThere were 1,147,429,288 shares of common stock outstanding on July 18,2024.Table of ContentsTABLE OF CONTENTSPART I FINANCIAL INFORMATIONPageGLOSSARY OF ABBREVIATIONS1SECOND QUARTER 2024 RESULTS AND HIGHLIGHTS2ITEM 1.FINANCIAL STATEMENTS6Condensed Consolidated Statements of Operations6Condensed Consolidated Statements of Comprehensive Income(Loss)7Condensed Consolidated Balance Sheets8Condensed Consolidated Statements of Cash Flows9Condensed Consolidated Statements of Changes in Equity11Notes to the Condensed Consolidated Financial Statements13Note 1 Basis of Presentation13Note 2 Summary of Significant Accounting Policies13Note 3 Business Acquisition14Note 4 Segment Information17Note 5 Assets and Liabilities Held for Sale17Note 6 Sales23Note 7 Reclamation and Remediation26Note 8 Other Expense,Net28Note 9 Other Income(Loss),Net28Note 10 Income and Mining Taxes29Note 11 Fair Value Accounting29Note 12 Derivative Instruments31Note 13 Investments34Note 14 Inventories35Note 15 Stockpiles and Ore on Leach Pads35Note 16 Debt36Note 17 Other Liabilities37Note 18 Accumulated Other Comprehensive Income(Loss)37Note 19 Net Change in Operating Assets and Liabilities38Note 20 Commitments and Contingencies38ITEM 2.MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS43Overview43Consolidated Financial Results44Results of Consolidated Operations50Foreign Currency Exchange Rates57Liquidity and Capital Resources58Environmental62Non-GAAP Financial Measures63Accounting Developments72Safe Harbor Statement72ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK74ITEM 4.CONTROLS AND PROCEDURES76PART II OTHER INFORMATIONITEM 1.LEGAL PROCEEDINGS77ITEM 1A.RISK FACTORS77ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS77ITEM 3.DEFAULTS UPON SENIOR SECURITIES77ITEM 4.MINE SAFETY DISCLOSURES77ITEM 5.OTHER INFORMATION78ITEM 6.EXHIBITS78SIGNATURES79Table of ContentsGLOSSARY:UNITS OF MEASURE AND ABBREVIATIONSUnitUnit of Measure$United States Dollar%PercentA$Australian DollarC$Canadian DollargramMetric GramounceTroy OuncepoundUnited States PoundtonneMetric TonAbbreviationDescriptionAISC(1)All-In Sustaining CostsARCAsset Retirement CostASCFASB Accounting Standard CodificationASUFASB Accounting Standard UpdateAUDAustralian DollarCADCanadian DollarCASCosts Applicable to SalesDTADeferred tax assetDTLDeferred tax liabilityEBITDA(1)Earnings Before Interest,Taxes,Depreciation and AmortizationEIAEnvironmental Impact AssessmentEPAU.S.Environmental Protection AgencyESGEnvironmental,Social and GovernanceExchange ActU.S.Securities Exchange Act of 1934FASBFinancial Accounting Standards BoardGAAPU.S.Generally Accepted Accounting PrinciplesGEO(2)Gold Equivalent OuncesGHGGreenhouse Gases,which are defined by the EPA as gases that trap heat in the atmosphereGITSMGlobal Industry Standard on Tailings ManagementIASBInternational Accounting Standards BoardIFRSInternational Financial Reporting StandardsLIBORLondon Interbank Offered RateLBMALondon Bullion Market AssociationLMELondon Metal ExchangeMD&AManagements Discussion and Analysis of Consolidated Financial Condition and Results of OperationsMINAMMinistry of the Environment of PeruMine ActU.S.Federal Mine Safety and Health Act of 1977MINEMMinistry of Energy and Mines of PeruMSHAFederal Mine Safety and Health AdministrationMXNMexican PesoNPDESNational Pollutant Discharge Elimination SystemSECU.S.Securities and Exchange CommissionSecurities ActU.S.Securities Act of 1933SOFRSecured Overnight Financing RateU.S.The United States of AmericaUSDUnited States DollarWTPWater Treatment Plant_(1)Refer to Non-GAAP Financial Measures within Part I,Item 2,MD&A.(2)Refer to Results of Consolidated Operations within Part I,Item 2,MD&A.Table of Contents1NEWMONT CORPORATIONSECOND QUARTER 2024 RESULTS AND HIGHLIGHTS(unaudited,in millions,except per share,per ounce and per pound)Three Months EndedJune 30,Six Months EndedJune 30,2024202320242023Financial Results:Sales$4,402$2,683$8,425$5,362 Gold$3,623$2,380$6,964$4,683 Copper$377$82$674$192 Silver$209$124$410$241 Lead$44$32$104$64 Zinc$149$65$273$182 Costs applicable to sales(1)$2,156$1,543$4,262$3,025 Gold$1,777$1,277$3,467$2,516 Copper$161$48$322$101 Silver$96$95$207$177 Lead$26$33$62$55 Zinc$96$90$204$176 Net income(loss)from continuing operations$842$153$1,017$504 Net income(loss)$857$155$1,036$518 Net income(loss)from continuing operations attributable to Newmont stockholders$838$153$1,004$492 Per common share,diluted:Net income(loss)from continuing operations attributable to Newmont stockholders$0.73$0.19$0.87$0.62 Net income(loss)attributable to Newmont stockholders$0.74$0.19$0.89$0.64 Adjusted net income(loss)(2)$834$266$1,464$586 Adjusted net income(loss)per share,diluted(2)$0.72$0.33$1.27$0.74 Earnings before interest,taxes and depreciation and amortization(2)$1,741$835$2,916$1,900 Adjusted earnings before interest,taxes and depreciation and amortization(2)$1,966$910$3,660$1,900 Net cash provided by(used in)operating activities of continuing operations$2,170$1,137 Free cash flow(2)$520$(5)Cash dividends paid per common share in the period ended June 30,$0.25$0.40$0.50$0.80 Cash dividends declared per common share for the period ended June 30,$0.25$0.40$0.50$0.80 _(1)Excludes Depreciation and amortization and Reclamation and remediation.(2)Refer to Non-GAAP Financial Measures within Part I,Item 2,MD&A.Table of Contents2NEWMONT CORPORATIONSECOND QUARTER 2024 RESULTS AND HIGHLIGHTS(unaudited,in millions,except per share,per ounce and per pound)Three Months EndedJune 30,Six Months EndedJune 30,2024202320242023Operating Results:Consolidated gold ounces(thousands):Produced 1,534 1,203 3,153 2,436 Sold 1,543 1,211 3,142 2,419 Attributable gold ounces(thousands):Produced(1)1,607 1,240 3,282 2,513 Sold(2)1,528 1,197 3,109 2,385 Consolidated and attributable gold equivalent ounces-other metals(thousands):(3)Produced 477 256 966 544 Sold 453 251 955 516 Consolidated and attributable-other metals:Produced copper:Pounds(millions)83 26 164 52 Tonnes(thousands)38 12 74 24 Sold copper:Pounds(millions)84 25 164 51 Tonnes(thousands)39 11 75 23 Produced silver(million ounces)8 6 17 14 Sold silver(million ounces)8 6 18 12 Produced lead:Pounds(millions)44 45 105 86 Tonnes(thousands)20 20 48 39 Sold lead:Pounds(millions)43 36 108 72 Tonnes(thousands)20 16 49 33 Produced zinc:Pounds(millions)144 78 271 180 Tonnes(thousands)65 35 123 82 Sold zinc:Pounds(millions)113 90 248 189 Tonnes(thousands)52 41 113 86 Average realized price:Gold(per ounce)$2,347$1,965$2,216$1,936 Copper(per pound)$4.47$3.26$4.10$3.73 Silver(per ounce)$26.20$20.56$23.00$19.85 Lead(per pound)$1.05$0.92$0.97$0.89 Zinc(per pound)$1.31$0.73$1.10$0.96 Consolidated costs applicable to sales:(4)(5)Gold(per ounce)$1,152$1,054$1,103$1,040 Gold equivalent ounces-other metals(per ounce)(3)$836$1,062$832$988 All-in sustaining costs:(5)Gold(per ounce)$1,562$1,472$1,500$1,424 Gold equivalent ounces-other metals(per ounce)(3)$1,207$1,492$1,176$1,405 _(1)Attributable gold ounces produced includes 53 and 51 thousand ounces for the three months ended June 30,2024 and 2023,respectively,and 107 and 111 thousand ounces for the six months ended June 30,2024 and 2023,respectively,related to the Pueblo Viejo mine,which is 40%owned by Newmont and accounted for as an equity method investment.For the three and six months ended June 30,2024,Attributable gold ounces Table of Contents3produced also includes 35 thousand ounces and 56 thousand ounces,respectively,related to the Fruta del Norte mine,which is wholly owned by Lundin Gold,in which the Company holds a 32.0%interest at June 30,2024 and is accounted for as an equity method investment on a quarter lag.(2)Attributable gold ounces sold excludes ounces related to the Pueblo Viejo mine and the Fruta del Norte mine.(3)Gold equivalent ounces are calculated as pounds or ounces produced or sold multiplied by the ratio of the other metals price to the gold price.Refer to Results of Consolidated Operations within Part I,Item 2,MD&A for further information.(4)Excludes Depreciation and amortization and Reclamation and remediation.(5)Refer to Non-GAAP Financial Measures within Part I,Item 2,MD&A.Table of Contents4Second Quarter 2024 Highlights(dollars in millions,except per share,per ounce and per pound amounts,unless otherwise noted)Net income:Reported Net income(loss)from continuing operations attributable to Newmont stockholders of$838 or$0.73 per diluted share,an increase of$685 from the prior-year quarter primarily due to an increase to attributable net income related to the acquired Newcrest sites.Excluding the impact of acquired sites,the increase is primarily due to an increase in Sales,resulting from higher average realized prices for all metals,and lower Depreciation and amortization.This increase was partially offset by an increase in Costs applicable to sales and higher tax expense.Adjusted net income:Reported Adjusted net income of$834 or$0.72 per diluted share,an increase of$0.39 per diluted share from the prior-year quarter(see Non-GAAP Financial Measures within Part I,Item 2,MD&A).Adjusted EBITDA:Reported$1,966 in Adjusted EBITDA,an increase of 116%from the prior-year quarter(see Non-GAAP Financial Measures within Part I,Item 2,MD&A).Cash flow:Reported Net cash provided by(used in)operating activities of$2,170 for the six months ended June 30,2024,an increase of 91%from the prior year,and free cash flow of$520(see Non-GAAP Financial Measures within Part I,Item 2,MD&A).Net cash provided by(used in)operating activities included a payment of$291 on the Stamp Duty,related to the Newcrest transaction,in the first quarter of 2024.Portfolio Updates:Completed the sale of the Fruta del Norte Facilities in which Lundin Gold repurchased the Streaming Credit Facility agreement and settled the rights under the Offtake agreement for cash consideration of$330,of which$180 was received in June 2024.ESG:Published our climate performance update in May 2024 providing an overview of the Companys 2023 greenhouse gas emissions performance for the operating sites managed by Newmont prior to the acquisition of Newcrest.2023 climate data for all sites,including those acquired through the Newcrest transaction,will be published in the fourth quarter of 2024.Attributable gold production:Produced 1.6 million attributable ounces of gold and 477 thousand attributable gold equivalent ounces from co-products.Financial strength:Ended the quarter with$2.6 billion of consolidated cash,cash of$205 included in Assets held for sale,and$6.8 billion of total liquidity;declared a dividend of$0.25 per share in July 2024;settled$104 of share repurchases from$1 billion stock repurchase program;redeemed$250 of certain senior notes.Table of Contents5PART IFINANCIAL INFORMATIONITEM 1.FINANCIAL STATEMENTS.NEWMONT CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(unaudited,in millions except per share)Three Months EndedJune 30,Six Months EndedJune 30,2024202320242023Sales(Note 6)$4,402$2,683$8,425$5,362 Costs and expenses:Costs applicable to sales(1)2,156 1,543 4,262 3,025 Depreciation and amortization 602 486 1,256 947 Reclamation and remediation(Note 7)94 66 192 132 Exploration 57 66 110 114 Advanced projects,research and development 49 44 102 79 General and administrative 100 71 201 145 Loss on assets held for sale(Note 5)246 731 Other expense,net(Note 8)59 41 132 49 3,363 2,317 6,986 4,491 Other income(expense):Other income(loss),net(Note 9)100 (17)221 82 Interest expense,net of capitalized interest(103)(49)(196)(114)(3)(66)25 (32)Income(loss)before income and mining tax and other items 1,036 300 1,464 839 Income and mining tax benefit(expense)(Note 10)(191)(163)(451)(376)Equity income(loss)of affiliates(Note 13)(3)16 4 41 Net income(loss)from continuing operations 842 153 1,017 504 Net income(loss)from discontinued operations 15 2 19 14 Net income(loss)857 155 1,036 518 Net loss(income)attributable to noncontrolling interests(Note 1)(4)(13)(12)Net income(loss)attributable to Newmont stockholders$853$155$1,023$506 Net income(loss)attributable to Newmont stockholders:Continuing operations$838$153$1,004$492 Discontinued operations 15 2 19 14$853$155$1,023$506 Weighted average common shares(millions):Basic1,1537951,153794Effect of employee stock-based awards211Diluted1,1557951,154795Net income(loss)attributable to Newmont stockholders per common share:Basic:Continuing operations$0.73$0.19$0.87$0.62 Discontinued operations 0.01 0.02 0.02$0.74$0.19$0.89$0.64 Diluted:Continuing operations$0.73$0.19$0.87$0.62 Discontinued operations 0.01 0.02 0.02$0.74$0.19$0.89$0.64 _(1)Excludes Depreciation and amortization and Reclamation and remediation.The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.Table of Contents6NEWMONT CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(LOSS)(unaudited,in millions)Three Months EndedJune 30,Six Months EndedJune 30,2024202320242023Net income(loss)$857$155$1,036$518 Other comprehensive income(loss):Change in marketable securities,net of tax (1)Ownership interest in equity method investments(2)(2)Foreign currency translation adjustments 3 (4)8 (5)Change in pension and other post-retirement benefits,net of tax (2)(3)Change in cash flow hedges,net of tax 8 (4)(27)(7)Other comprehensive income(loss)9 (10)(21)(16)Comprehensive income(loss)$866$145$1,015$502 Comprehensive income(loss)attributable to:Newmont stockholders$862$145$1,002$490 Noncontrolling interests 4 13 12$866$145$1,015$502 The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.Table of Contents7NEWMONT CORPORATIONCONDENSED CONSOLIDATED BALANCE SHEETS(unaudited,in millions)At June 30,2024At December 31,2023ASSETSCash and cash equivalents$2,602$3,002 Trade receivables(Note 6)955 734 Investments(Note 13)50 23 Inventories(Note 14)1,467 1,663 Stockpiles and ore on leach pads(Note 15)681 979 Derivative assets(Note 12)71 198 Other current assets 874 913 Assets held for sale(Note 5)5,370 Current assets 12,070 7,512 Property,plant and mine development,net 33,655 37,563 Investments(Note 13)4,141 4,143 Stockpiles and ore on leach pads(Note 15)2,002 1,935 Deferred income tax assets 273 268 Goodwill 2,792 3,001 Derivative assets(Note 12)181 444 Other non-current assets 564 640 Total assets$55,678$55,506 LIABILITIESAccounts payable$683$960 Employee-related benefits 457 551 Income and mining taxes payable 264 88 Lease and other financing obligations 104 114 Debt(Note 16)1,923 Other current liabilities(Note 17)1,819 2,362 Liabilities held for sale(Note 5)2,405 Current liabilities 5,732 5,998 Debt(Note 16)8,692 6,951 Lease and other financing obligations 429 448 Reclamation and remediation liabilities(Note 7)6,620 8,167 Deferred income tax liabilities 3,046 2,987 Employee-related benefits 616 655 Silver streaming agreement 733 779 Other non-current liabilities(Note 17)247 316 Total liabilities 26,115 26,301 Commitments and contingencies(Note 20)EQUITYCommon stock 1,851 1,854 Treasury stock(274)(264)Additional paid-in capital 30,394 30,419 Accumulated other comprehensive income(loss)(Note 18)(7)14(Accumulated deficit)Retained earnings (2,585)(2,996)Newmont stockholders equity 29,379 29,027 Noncontrolling interests 184 178 Total equity 29,563 29,205 Total liabilities and equity$55,678$55,506 The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.Table of Contents8NEWMONT CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(unaudited,in millions)Six Months Ended June 30,20242023Operating activities:Net income(loss)$1,036$518 Non-cash adjustments:Depreciation and amortization 1,256 947 Loss on assets held for sale(Note 5)731 Net(income)loss from discontinued operations(19)(14)Reclamation and remediation 182 120(Gain)loss on asset and investment sales,net(Note 9)(64)(36)Stock-based compensation 44 42 Deferred income taxes(42)21 Change in fair value of investments(Note 9)(22)1 Other non-cash adjustments(3)7 Net change in operating assets and liabilities(Note 19)(929)(469)Net cash provided by(used in)operating activities of continuing operations 2,170 1,137 Net cash provided by(used in)operating activities of discontinued operations 34 7 Net cash provided by(used in)operating activities 2,204 1,144 Investing activities:Additions to property,plant and mine development (1,650)(1,142)Proceeds from asset and investment sales 252 214 Purchases of investments (106)(542)Return of investment from equity method investees 41 30 Contributions to equity method investees(20)(64)Proceeds from maturities of investments 981 Other 44 23 Net cash provided by(used in)investing activities (1,439)(500)Financing activities:Repayment of debt(3,650)Proceeds from issuance of debt,net 3,476 Dividends paid to common stockholders(577)(636)Repurchases of common stock(104)Distributions to noncontrolling interests(77)(66)Funding from noncontrolling interests 53 75 Payments on lease and other financing obligations(40)(32)Payments for withholding of employee taxes related to stock-based compensation(10)(22)Other(28)(3)Net cash provided by(used in)financing activities(957)(684)Effect of exchange rate changes on cash,cash equivalents and restricted cash(14)(4)Net change in cash,cash equivalents and restricted cash,including cash and restricted cash reclassified to assets held for sale(206)(44)Less:cash and restricted cash reclassified to assets held for sale(1)(258)Net change in cash,cash equivalents and restricted cash(464)(44)Cash,cash equivalents and restricted cash at beginning of period 3,100 2,944 Cash,cash equivalents and restricted cash at end of period$2,636$2,900 Table of Contents9NEWMONT CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(unaudited,in millions)Six Months Ended June 30,20242023Reconciliation of cash,cash equivalents and restricted cash:Cash and cash equivalents$2,602$2,829 Restricted cash included in Other current assets 6 1 Restricted cash included in Other non-current assets 28 70 Total cash,cash equivalents and restricted cash$2,636$2,900 _(1)During the first quarter of 2024,certain non-core assets were determined to meet the criteria for assets held for sale.As a result,the related assets and liabilities as of June 30,2024,including$205 of Cash and cash equivalents and$53 of restricted cash,included in Other current assets and Other non-current assets,were reclassified to Assets held for sale and Liabilities held for sale,respectively.Refer to Note 5 for additional information.The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.Table of Contents10NEWMONT CORPORATIONCONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY(unaudited,in millions)Common StockTreasury StockAdditionalPaid-InCapitalAccumulatedOtherComprehensiveIncome(Loss)RetainedEarnings(AccumulatedDeficit)NoncontrollingInterestsTotalEquitySharesAmountSharesAmountBalance at December 31,2023 1,159$1,854 (7)$(264)$30,419$14$(2,996)$178$29,205 Net income(loss)170 9 179 Other comprehensive income(loss)(30)(30)Dividends declared(1)(285)(285)Distributions declared to noncontrolling interests (35)(35)Cash calls requested from noncontrolling interests 33 33 Withholding of employee taxes related to stock-based compensation (10)(10)Stock-based awards and related share issuances 1 1 17 18 Balance at March 31,2024 1,160$1,855 (7)$(274)$30,436$(16)$(3,111)$185$29,075 Net income(loss)853 4 857 Other comprehensive income(loss)9 9 Dividends declared(1)(292)(292)Distributions declared to noncontrolling interests (36)(36)Cash calls requested from noncontrolling interests 31 31 Repurchase and retirement of common stock(2)(2)(4)(66)(35)(105)Stock-based awards and related share issuances 24 24 Balance at June 30,2024 1,158$1,851 (7)$(274)$30,394$(7)$(2,585)$184$29,563 _(1)Cash dividends paid per common share were$0.25 and$0.50 for the three and six months ended June 30,2024,respectively.(2)In July 2024,an additional$146 of common stock was repurchased and retired.Table of Contents11NEWMONT CORPORATIONCONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY(unaudited,in millions)Common StockTreasury StockAdditionalPaid-InCapitalAccumulatedOtherComprehensiveIncome(Loss)RetainedEarnings(AccumulatedDeficit)NoncontrollingInterestsTotalEquitySharesAmountSharesAmountBalance at December 31,2022 799$1,279 (6)$(239)$17,369$29$916$179$19,533 Net income(loss)351 12 363 Other comprehensive income(loss)(6)(6)Dividends declared(1)(319)(319)Distributions declared to noncontrolling interests (40)(40)Cash calls requested from noncontrolling interests 31 31 Withholding of employee taxes related to stock-based compensation (1)(22)(22)Stock-based awards and related share issuances 1 2 17 19 Balance at March 31,2023 800$1,281 (7)$(261)$17,386$23$948$182$19,559 Net income(loss)155 155 Other comprehensive income(loss)(10)(10)Dividends declared(1)(318)(318)Distributions declared to noncontrolling interests (26)(26)Cash calls requested from noncontrolling interests 34 34 Stock-based awards and related share issuances 21 21 Balance at June 30,2023 800$1,281 (7)$(261)$17,407$13$785$190$19,415 _(1)Cash dividends paid per common share were$0.40 and$0.80 for the three and six months ended June 30,2023,respectively.The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.Table of Contents12NOTE 1 BASIS OF PRESENTATIONThe interim Condensed Consolidated Financial Statements(“interim statements”)of Newmont Corporation,a Delaware corporation and its subsidiaries(collectively,“Newmont,”“we,”“us,”or the“Company”)are unaudited.In the opinion of management,all normal recurring adjustments and disclosures necessary for a fair presentation of these interim statements have been included.The results reported in these interim statements are not necessarily indicative of the results that may be reported for the entire year.These interim statements should be read in conjunction with Newmonts Consolidated Financial Statements for the year ended December 31,2023 filed on February 29,2024 on Form 10-K.The year-end balance sheet data was derived from the audited financial statements and,in accordance with the instructions to Form 10-Q,certain information and footnote disclosures required by GAAP have been condensed or omitted.Newcrest TransactionOn November 6,2023,the Company completed its business combination transaction with Newcrest Mining Limited,a public Australian mining company limited by shares(Newcrest),whereby Newmont,through Newmont Overseas Holdings Pty Ltd,an Australian proprietary company limited by shares(“Newmont Sub”),acquired all of the ordinary shares of Newcrest in a fully stock transaction for total non-cash consideration of$13,549.Newcrest became a direct wholly owned subsidiary of Newmont Sub and an indirect wholly owned subsidiary of Newmont(such acquisition,the“Newcrest transaction”).The combined company continues to be traded on the New York Stock Exchange under the ticker NEM.The combined company is also listed on the Toronto Stock Exchange under the ticker NGT,on the Australian Securities Exchange under the ticker NEM,and on the Papua New Guinea Securities Exchange under the ticker NEM.Refer to Note 3 for further information.Noncontrolling InterestsNet loss(income)attributable to noncontrolling interest is comprised of income of$4 and$for the three months ended June 30,2024 and 2023,respectively,and of$13 and$12 for the six months ended June 30,2024 and 2023,respectively,related to Suriname Gold project C.V.(“Merian”).Newmont consolidates Merian through its wholly-owned subsidiary,Newmont Suriname LLC.,in its Condensed Consolidated Financial Statements as the primary beneficiary of Merian,which is a variable interest entity.NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESRisks and UncertaintiesAs a global mining company,the Companys revenue,profitability and future rate of growth are substantially dependent on prevailing metal prices,primarily for gold,but also for copper,silver,lead,and zinc.Historically,the commodity markets have been very volatile,and there can be no assurance that commodity prices will not be subject to wide fluctuations in the future.A substantial or extended decline in commodity prices could have a material adverse effect on the Companys financial position,results of operations,cash flows,access to capital and on the quantities of reserves that the Company can economically produce.The carrying value of the Companys Property,plant and mine development,net;Inventories;Stockpiles and ore on leach pads;Investments;certain Derivative assets;Deferred income tax assets;and Goodwill are particularly sensitive to the outlook for commodity prices.A decline in the Companys price outlook from current levels could result in material impairment charges related to these assets.Our global operations expose us to risks associated with public health crises,including epidemics and pandemics such as COVID-19,and geopolitical and macroeconomic pressures such as the Russian invasion of Ukraine.The Company continues to experience the impacts from recent geopolitical and macroeconomic pressures.With the resulting volatile environment,the Company continues to monitor inflationary conditions,the effects of certain countermeasures taken by central banks,and the potential for further supply chain disruptions as well as an uncertain and evolving labor market.The following factors could have further potential short-and,possibly,long-term material adverse impacts on the Company including,but not limited to,volatility in commodity prices and the prices for gold and other metals,changes in the equity and debt markets or country specific factors adversely impacting discount rates,significant cost inflation impacts on production,capital and asset retirement costs,logistical challenges,workforce interruptions and financial market disruptions,energy market disruptions,as well as potential impacts to estimated costs and timing of projects.Refer to Note 20 below for further information on risks and uncertainties that could have a potential impact on the Company as well as Note 2 of the Consolidated Financial Statements included in Part II of the Companys Annual Report on Form 10-K for the year ended December 31,2023 filed with the SEC on February 29,2024.The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the accounting for and recognition and disclosure of assets,liabilities,equity,revenues and expenses.The Company must make these estimates and assumptions because certain information used is dependent on future events,cannot be calculated with a high degree of precision from data available or simply cannot be readily calculated based on generally accepted methodologies.Actual results could differ from these estimates.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)13Assets Held for SaleWe classify long-lived assets,or disposal groups comprising of assets and liabilities,as held for sale in the period in which the following six criteria are met,(i)management,having the authority to approve the action,commits to a plan to sell the property;(ii)the property is available for immediate sale in its present condition,subject only to terms that are usual and customary;(iii)an active program to locate a buyer and other actions required to complete the plan to sell have been initiated;(iv)the sale of the property is probable and is expected to be completed within one year;(v)the property is being actively marketed for sale at a price that is reasonable in relation to its current fair value;and(vi)actions necessary to complete the plan of sale indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.The Company ceases depreciation and amortization on long-lived assets(or disposal groups)classified as held for sale,and measures them at the lower of carrying value or estimated fair value less cost to sell.ReclassificationsCertain amounts and disclosures in prior years have been reclassified to conform to the current year presentation.Recently Adopted Accounting Pronouncements and Securities and Exchange Commission RulesEffects of Reference Rate ReformIn March 2020,ASU No.2020-04 was issued which provides optional guidance for a limited period of time to ease the potential burden on accounting for contract modifications caused by reference rate reform.In January 2021,ASU No.2021-01 was issued which broadened the scope of ASU No.2020-04 to include certain derivative instruments.In December 2022,ASU No.2022-06 was issued which deferred the sunset date of ASU No.2020-04.The guidance is effective for all entities as of March 12,2020 through December 31,2024.The guidance may be adopted over time as reference rate reform activities occur and should be applied on a prospective basis.The Company has completed its review of key contracts and does not expect the guidance to have a material impact to the consolidated financial statements or disclosures.The Company will continue to review new contracts to identify references to the LIBOR and implement adequate fallback provisions if not already implemented to mitigate the risks or impacts from the transition.Recently Issued Accounting Pronouncements and Securities and Exchange Commission RulesSEC Final Climate RuleIn March 2024,the SEC issued a final rule that requires registrants to disclose climate-related information in their annual reports and in registration statements.In April 2024,the SEC chose to stay the newly adopted rulemaking pending judicial review of related consolidated Eighth Circuit petitions.If the stay is lifted,certain disclosures may be required in annual reports for the year ending December 31,2025,filed in 2026.The Company is currently evaluating the impacts of the rules on its consolidated financial statements.Improvement to Income Tax DisclosuresIn December 2023,ASU 2023-09 was issued which requires disaggregated information about the effective tax rate reconciliation and additional information on taxes paid that meet a qualitative threshold.The new guidance is effective for annual reporting periods beginning after December 15,2024,with early adoption permitted.The Company is currently evaluating the impacts of the guidance on its consolidated financial statements.Segments ReportingIn November 2023,ASU 2023-07 was issued which improves disclosures about a public entitys reportable segments and addresses requests from investors and other allocators of capital for additional,more detailed information about a reportable segments expenses.The ASU applies to all public entities that are required to report segment information in accordance with ASC 280 and is effective starting in annual periods beginning after December 15,2023.The adoption is not expected to have a material impact on the Companys consolidated financial statements or disclosures.NOTE 3 BUSINESS ACQUISITIONOn November 6,2023(the“acquisition date”),Newmont completed its business combination transaction with Newcrest,a public Australian mining company limited by shares,whereby Newmont,through Newmont Sub,acquired all of the ordinary shares of Newcrest,pursuant to a court-approved scheme of arrangement under Part 5.1 of the Australian Corporations Act 2001(Cth)between Newcrest and its shareholders,as contemplated by a scheme implementation deed,dated as of May 15,2023,by and among Newmont,Newmont Sub and Newcrest,as amended from time to time.Upon implementation,Newmont completed the business acquisition of Newcrest,in which Newmont was the acquirer and Newcrest became a direct wholly owned subsidiary of Newmont Sub and an indirect wholly owned subsidiary of Newmont(such acquisition,the“Newcrest transaction”).The acquisition of Newcrest increased the Companys gold and other metal reserves and expanded the operating jurisdictions.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)14The acquisition date fair value of the consideration transferred consisted of the following:(in millions,except share and per share data)SharesPer SharePurchase ConsiderationStock ConsiderationShares of Newmont exchanged for Newcrest outstanding ordinary shares 357,691,627$37.88$13,549 Total Purchase Price$13,549 The Company retained an independent appraiser to determine the fair value of assets acquired and liabilities assumed.In accordance with the acquisition method of accounting,the purchase price of Newcrest has been allocated to the acquired assets and assumed liabilities based on their estimated acquisition date fair values.The fair value estimates were based on income,market and cost valuation methods.The excess of the total consideration over the estimated fair value of the amounts initially assigned to the identifiable assets acquired and liabilities assumed has been recorded as goodwill,which is not deductible for income tax purposes.The goodwill balance is mainly attributable to:(i)the acquisition of existing operating mines with access to an assembled workforce that cannot be duplicated at the same costs by new entrants;(ii)operating synergies anticipated from the integration of the operations of Newmont and Newcrest;and(iii)the application of Newmonts Full Potential program and potential strategic and financial benefits that include the increase in reserve base and opportunities to identify additional mineralization through exploration activities.As of June 30,2024,the Company had not yet fully completed the analysis to assign fair values to all assets acquired and liabilities assumed,and therefore the purchase price allocation for Newcrest is preliminary.At June 30,2024,remaining items to finalize include the fair value of materials and supplies inventories,property,plant and mine development,goodwill,reclamation and remediation liabilities,employee-related benefits,unrecognized tax benefits,and deferred income tax assets and liabilities.The preliminary purchase price allocation will be subject to further refinement as the Company continues to implement Newmont accounting policies and refine its estimates and assumptions based on information available at the acquisition date.These refinements may result in material changes to the estimated fair value of assets acquired and liabilities assumed.The purchase price allocation adjustments can be made throughout the end of Newmonts measurement period,which is not to exceed one year from the acquisition date.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)15The following table summarizes the preliminary purchase price allocation for the Newcrest transaction as of June 30,2024:ASSETSJune 30,2024Cash and cash equivalents$668 Trade receivables 212 Inventories 722 Stockpiles and ore on leach pads 137 Derivative assets 42 Other current assets 194 Current assets 1,975 Property,plant and mine development,net(1)13,509 Investments 990 Stockpiles and ore on leach pads 131 Deferred income tax assets(2)179 Goodwill(3)2,535 Derivative assets 362 Other non-current assets 93 Total assets 19,774 LIABILITIESAccounts payable 344 Employee-related benefits 143 Lease and other financing obligations 16 Debt 1,923 Other current liabilities 336 Current liabilities 2,762 Debt 1,373 Lease and other financing obligations 35 Reclamation and remediation liabilities 393 Deferred income tax liabilities(2)1,429 Employee-related benefits 222 Other non-current liabilities 11 Total liabilities 6,225 Net assets acquired$13,549 _(1)During the first quarter of 2024,measurement period adjustments of$326 increased Property,plant and mine development,net,from refinements to the preliminary valuation of the Canadian assets.No measurement period adjustments occurred in the second quarter of 2024.(2)Deferred income tax assets and liabilities represent the future tax benefit or future tax expense associated with the differences between the preliminary fair value allocated to assets(excluding goodwill)and liabilities and a tax basis increase to the preliminary fair value of the assets acquired in Australia and the historical carryover tax basis of assets and liabilities in all other jurisdictions.No deferred tax liability is recognized for the basis difference inherent in the preliminary fair value allocated to goodwill.During the first quarter of 2024,adjustments resulted in deferred income tax assets decreasing by$10 and deferred income tax liabilities increasing by$98.No measurement period adjustments occurred in the second quarter of 2024.(3)Preliminary goodwill is attributable to reportable segments as follows:$1,089 to Brucejack;$404 to Red Chris;$427 to Cadia;and$615 to Lihir.During the first quarter of 2024,the Company identified and recorded measurement period adjustments to the Companys preliminary purchase price allocation,as a result of additional analysis performed.These adjustments resulted in a reduction in Goodwill of$209.No measurement period adjustments occurred in the second quarter of 2024.Sales and Net income(loss)attributable to Newmont stockholders in the Condensed Consolidated Statement of Operations includes Newcrest revenue of$1,140 and$2,132 and Newcrest net income(loss)of$252 and$476 for the three and six months ended June 30,2024,respectively.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)16Pro Forma Financial InformationThe following unaudited pro forma financial information presents consolidated results assuming the Newcrest transaction occurred on January 1,2022.Three Months Ended June 30,2023Six Months Ended June 30,2023Sales$3,856$7,718 Net income(loss)attributable to Newmont stockholders$394$987 NOTE 4 SEGMENT INFORMATIONThe Company regularly reviews its segment reporting for alignment with its strategic goals and operational structure as well as for evaluation of business performance and allocation of resources by Newmonts Chief Operating Decision Maker(CODM).The reportable segments of the Company comprise each of its 17 mining operations that it manages,which includes its 70.0%proportionate interest in Red Chris,and its 38.5%proportionate interest in Nevada Gold Mines(NGM)which it does not directly manage.In the following tables,Income(loss)before income and mining tax and other items from reportable segments does not reflect general corporate expenses,interest(except project-specific interest)or income and mining taxes.Intercompany revenue and expense amounts have been eliminated within each segment in order to report on the basis that management uses internally for evaluating segment performance.The Companys business activities and operating segments that are not considered reportable,including all equity method investments,are reported in Corporate and Other,which has been provided for reconciliation purposes.The financial information relating to the Companys segments is as follows:Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)17SalesCosts Applicable to SalesDepreciation and AmortizationAdvanced Projects,Research and Development and ExplorationIncome(Loss)before Income and Mining Tax and Other ItemsCapital Expenditures(1)Three Months Ended June 30,2024Brucejack(2)$106$64$36$1$4$19 Red Chris(2)Gold 19 7 2 Copper 63 33 11 Total Red Chris 82 40 13 2 26 49 Peasquito:Gold 149 53 22 Silver 209 96 41 Lead 44 26 12 Zinc 149 96 35 Total Peasquito 551 271 110 3 163 26 Merian 142 96 20 5 21 32 Cerro Negro 65 70 22 3 (36)31 Yanacocha 181 77 23 4 22 9 Boddington:Gold 320 139 26 Copper 86 49 9 Total Boddington 406 188 35 1 175 29 Tanami 231 101 33 7 79 105 Cadia:(2)Gold 297 77 33 Copper 221 67 33 Total Cadia 518 144 66 4 301 134 Lihir(2)345 162 43 4 126 40 Ahafo 422 176 55 12 185 81 NGM 590 307 103 7 164 126 Corporate and Other 12 46 (185)4 Held for sale(3)CC&V 78 45 4 2 24 8 Musselwhite 132 56 1 74 21 Porcupine 206 94 9 1 (149)55 lonore 147 89 2 1 54 29 Telfer:(2)(4)Gold 82 83 4 Copper 7 12 1 Total Telfer 89 95 5 2 (30)14 Akyem 111 81 11 18 7 Consolidated$4,402$2,156$602$106$1,036$819 _(1)Includes an increase in accrued capital expenditures of$19.Consolidated capital expenditures on a cash basis were$800.(2)Sites acquired through the Newcrest transaction.Refer to Note 3 for further information.(3)Refer to Note 5 for further information on held for sale.The Coffee development project disposal group is included in Corporate and Other.(4)During the second quarter,seepage points were detected on the outer wall and around the tailings storage facility at Telfer and we have temporarily ceased placing new tailings on the facility.Remediation of the facility has commenced and we expect production to commence during the fourth quarter of 2024.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)18SalesCosts Applicable to SalesDepreciation and AmortizationAdvanced Projects,Research and Development and ExplorationIncome(Loss)before Income and Mining Tax and Other ItemsCapital Expenditures(1)Three Months Ended June 30,2023CC&V$82$49$6$3$21$13 Musselwhite 80 55 18 4 (2)31 Porcupine 125 77 27 6 12 36 lonore(2)100 74 24 2 (2)31 Peasquito:(3)Gold 95 40 15 Silver 124 95 34 Lead 32 33 12 Zinc 65 90 30 Total Peasquito 316 258 91 3 (57)37 Merian 104 80 15 5 3 21 Cerro Negro 100 83 34 1 (31)39 Yanacocha 132 79 22 6 (9)65 Boddington:Gold 394 159 27 Copper 82 48 9 Total Boddington 476 207 36 1 226 37 Tanami 244 102 31 9 100 115 Ahafo 263 121 42 10 91 77 Akyem 98 54 26 5 12 12 NGM 563 304 105 10 140 123 Corporate and Other 9 45 (204)21 Consolidated$2,683$1,543$486$110$300$658 _(1)Includes an increase in prepaid capital expenditures and accrued capital expenditures of$42.Consolidated capital expenditures on a cash basis were$616.(2)In June 2023,the Company evacuated lonore and temporarily shutdown the operation in response to the ongoing wildfires in Canada and continued to incur costs.The Company fully resumed operations during the third quarter of 2023.(3)In June 2023,the National Union of Mine and Metal Workers of the Mexican Republic(the Union)notified the Company of a strike action.In response to the strike notice,the Company suspended operations at Peasquito.The Company reached an agreement with the Union and operations at Peasquito resumed in the fourth quarter of 2023.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)19SalesCosts Applicable to SalesDepreciation and AmortizationAdvanced Projects,Research and Development and ExplorationIncome(Loss)before Income and Mining Tax and Other ItemsCapital Expenditures(1)Six Months Ended June 30,2024Brucejack(2)$178$138$71$1$(33)$35 Red Chris(2)Gold 35 14 4 Copper 109 64 19 Total Red Chris 144 78 23 4 37 84 Peasquito:Gold 241 91 37 Silver 410 207 85 Lead 104 62 26 Zinc 273 204 71 Total Peasquito 1,028 564 219 5 225 58 Merian 297 186 39 9 60 50 Cerro Negro 218 133 52 8 15 77 Yanacocha 367 165 51 6 42 33 Boddington:Gold 619 283 52 Copper 163 97 18 Total Boddington 782 380 70 2 332 57 Tanami 419 183 58 15 161 190 Cadia:(2)Gold 545 151 61 Copper 388 134 60 Total Cadia 933 285 121 9 523 245 Lihir(2)722 333 78 10 289 95 Ahafo 803 335 106 17 363 171 NGM 1,149 621 210 12 292 244 Corporate and Other 24 90 (747)8 Held for sale(3)CC&V 137 85 7 3 (68)13 Musselwhite 233 113 18 3 15 47 Porcupine 331 157 32 3 (115)95 lonore 263 169 21 5 66 50 Telfer:(2)(4)Gold 141 153 12 Copper 14 27 3 Total Telfer 155 180 15 6 (54)24 Akyem 266 157 41 4 61 16 Consolidated$8,425$4,262$1,256$212$1,464$1,592 _(1)Includes a decrease in accrued capital expenditures of$58.Consolidated capital expenditures on a cash basis were$1,650.(2)Sites acquired through the Newcrest transaction.Refer to Note 3 for further information.(3)Refer to Note 5 for further information on held for sale.The Coffee development project disposal group is included in Corporate and Other.(4)During the second quarter,seepage points were detected on the outer wall and around the tailings storage facility at Telfer and we have temporarily ceased placing new tailings on the facility.Remediation of the facility has commenced and we expect production to commence during the fourth quarter of 2024.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)20SalesCosts Applicable to SalesDepreciation and AmortizationAdvanced Projects,Research and Development and ExplorationIncome(Loss)before Income and Mining Tax and Other ItemsCapital Expenditures(1)Six Months Ended June 30,2023CC&V$173$100$13$6$48$23 Musselwhite 163 113 37 5 4 45 Porcupine 248 147 56 10 27 58 lonore(2)229 149 51 3 24 45 Peasquito:(3)Gold 205 107 35 Silver 241 177 59 Lead 64 55 19 Zinc 182 176 54 Total Peasquito 692 515 167 6 (35)72 Merian 263 165 33 8 56 35 Cerro Negro 216 153 65 3 (24)74 Yanacocha 232 135 38 9 (9)128 Boddington:Gold 775 326 55 Copper 192 101 18 Total Boddington 967 427 73 3 459 74 Tanami 367 163 50 13 140 189 Ahafo 512 251 81 16 162 167 Akyem 246 117 55 8 61 22 NGM 1,054 590 211 17 225 207 Corporate and Other 17 86 (299)27 Consolidated$5,362$3,025$947$193$839$1,166 _(1)Includes an increase in prepaid capital expenditures and accrued capital expenditures of$24.Consolidated capital expenditures on a cash basis were$1,142.(2)In June 2023,the Company evacuated lonore and temporarily shutdown the operation in response to the ongoing wildfires in Canada and continued to incur costs.The Company fully resumed operations during the third quarter of 2023.(3)In June 2023,the Union notified the Company of a strike action.In response to the strike notice,the Company suspended operations at Peasquito.The Company reached an agreement with the Union and operations at Peasquito resumed in the fourth quarter of 2023.NOTE 5 ASSETS AND LIABILITIES HELD FOR SALEBased on a comprehensive review of the Companys portfolio of assets,the Companys Board of Directors approved a portfolio optimization program to divest six non-core assets and a development project in February 2024.The non-core assets to be divested include the CC&V,Musselwhite,Porcupine,lonore,Telfer,and Akyem reportable segments,and the Coffee development project which is included within Corporate and Other.The Telfer disposal group also includes the Havieron development project,which is 70%owned by the Company and accounted for under proportionate consolidation,and other related assets.In February 2024,based on progress made through the Companys active sales program and managements expectation that the sale is probable and will be completed within 12 months,the Company concluded that these non-core assets and the development project met the accounting requirements to be presented as held for sale.While the Company remains committed to a plan to sell these assets for a fair price,there is a possibility that the assets held for sale may exceed one year due to events or circumstances beyond the Companys control.As of December 31,2023,the aggregate net book value of the non-core assets and the development project was$3,419.Upon meeting the requirements to be presented as held for sale,the six non-core assets and the development project were recorded at the lower of the carrying value or fair value,less costs to sell,and will be periodically valued until sale occurs.As a result,a write-down of$157 and$509 was recognized for the three and six months ended June 30,2024,respectively,within Loss on assets held for sale,resulting in an aggregate net book value of$2,965 at June 30,2024.The write-down resulted in a tax impact of$89 and$222 for the three and six months ended June 30,2024,respectively,resulting in a total loss of$246 and$731 recognized for the three and six months ended June 30,2024,respectively,within Loss on assets held for sale.The estimated fair values were determined using the income approach and are considered a non-recurring level 3 fair value measurement.Significant inputs to the fair value measured included(i)cash flow information available to the Company,(ii)a short-term gold price of$2,275 per ounce,(iii)a long-term gold price of$1,700 per ounce,(iv)current estimates of reserves,resources,and Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)21exploration potential,and(v)a reporting unit specific discount rate in the range of 5.875%to 11.875%.Additional losses may be incurred as the Company continues its active sales program or as fair value estimates change.The following table presents the carrying value of the major classes of assets and liabilities held for sale by disposal group as of June 30,2024,prior to recognition of the write-down of$509 for the six months ended June 30,2024:CC&VMusselwhitePorcupinelonoreTelferAkyemCoffee Project(1)TotalAssets held for sale:Property,plant and mine development,net$90$1,012$1,421$734$387$530$321$4,495 Other assets 466 35 108 140 260 373 2 1,384 Carrying value of assets held for sale$556$1,047$1,529$874$647$903$323$5,879 Liabilities held for sale:Reclamation and remediation liabilities$282$78$546$84$208$401$3$1,602 Other liabilities 33 261 237 64 129 76 3 803 Carrying value of liabilities held for sale$315$339$783$148$337$477$6$2,405 _(1)The Coffee Project is included in Corporate and Other in Note 4.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)22NOTE 6 SALESThe following tables present the Companys Sales by mining operation,product and inventory type:Gold Sales from Dor ProductionSales from Concentrate and Other ProductionTotal SalesThree Months Ended June 30,2024Brucejack(1)$81$25$106 Red Chris:(1)Gold 19 19 Copper 63 63 Total Red Chris 82 82 Peasquito:Gold 149 149 Silver(2)209 209 Lead 44 44 Zinc 149 149 Total Peasquito 551 551 Merian 136 6 142 Cerro Negro 65 65 Yanacocha 178 3 181 Boddington:Gold 91 229 320 Copper 86 86 Total Boddington 91 315 406 Tanami 231 231 Cadia:(1)Gold 32 265 297 Copper 221 221 Total Cadia 32 486 518 Lihir(1)345 345 Ahafo 422 422 NGM(3)561 29 590 Held for sale(4)CC&V 78 78 Musselwhite 132 132 Porcupine 206 206 lonore 147 147 Telfer:(1)Gold 17 65 82 Copper 7 7 Total Telfer 17 72 89 Akyem 111 111 Consolidated$2,833$1,569$4,402 _(1)Sites acquired through the Newcrest transaction.Refer to Note 3 for further information.(2)Silver sales from concentrate includes$23 related to non-cash amortization of the silver streaming agreement liability.(3)The Company purchases its proportionate share of gold dor from NGM for resale to third parties.Gold dor purchases from NGM totaled$559 for the three months ended June 30,2024.(4)Refer to Note 5 for further information on held for sale.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)23Gold Sales from Dor ProductionSales from Concentrate and Other ProductionTotal SalesThree Months Ended June 30,2023CC&V$82$82 Musselwhite 80 80 Porcupine 125 125 lonore 100 100 Peasquito:Gold 19 76 95 Silver(1)124 124 Lead 32 32 Zinc 65 65 Total Peasquito 19 297 316 Merian 104 104 Cerro Negro 100 100 Yanacocha 130 2 132 Boddington:Gold 100 294 394 Copper 82 82 Total Boddington 100 376 476 Tanami 244 244 Ahafo 263 263 Akyem 98 98 NGM(2)539 24 563 Consolidated$1,984$699$2,683 _(1)Silver sales from concentrate includes$15 related to non-cash amortization of the silver streaming agreement liability.(2)The Company purchases its proportionate share of gold dor from NGM for resale to third parties.Gold dor purchases from NGM totaled$531 for the three months ended June 30,2023.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)24Gold Sales from Dor ProductionSales from Concentrate and Other ProductionTotal SalesSix Months Ended June 30,2024Brucejack(1)$130$48$178 Red Chris:(1)Gold 35 35 Copper 109 109 Total Red Chris 144 144 Peasquito:Gold 241 241 Silver(2)410 410 Lead 104 104 Zinc 273 273 Total Peasquito 1,028 1,028 Merian 284 13 297 Cerro Negro 218 218 Yanacocha 364 3 367 Boddington:Gold 165 454 619 Copper 163 163 Total Boddington 165 617 782 Tanami 419 419 Cadia:(1)Gold 65 480 545 Copper 388 388 Total Cadia 65 868 933 Lihir(1)722 722 Ahafo 803 803 NGM(3)1,090 59 1,149 Held for sale(4)CC&V 137 137 Musselwhite 233 233 Porcupine 331 331 lonore 263 263 Telfer:(1)Gold 24 117 141 Copper 14 14 Total Telfer 24 131 155 Akyem 266 266 Consolidated$5,514$2,911$8,425 _(1)Sites acquired through the Newcrest transaction.Refer to Note 3 for further information.(2)Silver sales from concentrate includes$50 related to non-cash amortization of the silver streaming agreement liability.(3)The Company purchases its proportionate share of gold dor from NGM for resale to third parties.Gold dor purchases from NGM totaled$1,088 for the six months ended June 30,2024.(4)Refer to Note 5 for further information on held for sale.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)25Gold Sales from Dor ProductionSales from Concentrate and Other ProductionTotal SalesSix Months Ended June 30,2023CC&V$173$173 Musselwhite 163 163 Porcupine 248 248 lonore 229 229 Peasquito:Gold 34 171 205 Silver(1)241 241 Lead 64 64 Zinc 182 182 Total Peasquito 34 658 692 Merian 263 263 Cerro Negro 216 216 Yanacocha 224 8 232 Boddington:Gold 193 582 775 Copper 192 192 Total Boddington 193 774 967 Tanami 367 367 Ahafo 512 512 Akyem 246 246 NGM(2)1,012 42 1,054 Consolidated$3,880$1,482$5,362 _(1)Silver sales from concentrate includes$31 related to non-cash amortization of the silver streaming agreement liability.(2)The Company purchases its proportionate share of gold dor from NGM for resale to third parties.Gold dor purchases from NGM totaled$1,012 for the six months ended June 30,2023.Trade Receivables and Provisional SalesAt June 30,2024 and December 31,2023,Trade receivables primarily consisted of sales from provisionally priced concentrate and other production.The impact to Sales from changes in pricing on provisional sales is an increase(decrease)of$91 and$(22)for the three months ended June 30,2024 and 2023,respectively,and$131 and$for the six months ended June 30,2024 and 2023,respectively.At June 30,2024,Newmont had the following provisionally priced concentrate sales subject to final pricing over the next several months:Provisionally Priced SalesSubject to Final Pricing(1)Average Provisional Price(per ounce/pound)Gold(ounces,in thousands)204$2,332 Copper(pounds,in millions)75$4.35 Silver(ounces,in millions)5$29.25 Lead(pounds,in millions)28$0.99 Zinc(pounds,in millions)80$1.32 Molybdenum(pounds,in millions)(2)1$22.74 _(1)Includes provisionally priced by-product sales subject to final pricing,which are recognized as a reduction to Costs applicable to sales.(2)Molybdenum is a by-product at the Cadia site and is recognized as a reduction to Costs applicable to sales.NOTE 7 RECLAMATION AND REMEDIATIONThe Companys mining and exploration activities are subject to various domestic and international laws and regulations governing the protection of the environment.These laws and regulations are continually changing and are generally becoming more restrictive.The Company conducts its operations to protect public health and the environment and believes its operations are in Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)26compliance with applicable laws and regulations in all material respects.The Company has made,and expects to make in the future,expenditures to comply with such laws and regulations,but cannot predict the full amount of such future expenditures.Estimated future reclamation and remediation costs are based principally on current legal and regulatory requirements.The Companys Reclamation and remediation expense consisted of:Three Months EndedJune 30,Six Months EndedJune 30,2024202320242023Reclamation adjustments and other$1$6$4$8 Reclamation accretion 87 59 172 119 Reclamation expense 88 65 176 127 Remediation adjustments and other 5 (1)13 1 Remediation accretion 1 2 3 4 Remediation expense 6 1 16 5 Reclamation and remediation$94$66$192$132 The following are reconciliations of Reclamation and remediation liabilities:ReclamationRemediation2024202320242023Balance at January 1,(1)$8,385$6,731$401$373 Additions,changes in estimates,and other 1 5 (2)Payments,net(136)(99)(30)(12)Accretion expense 172 119 3 4 Reclassification to Liabilities held for sale(2)(1,582)(20)Balance at June 30,$6,839$6,752$359$363 _(1)The Newcrest transaction occurred on November 6,2023,resulting in an increase in the beginning balance at January 1,2024,as compared to the beginning balance at January 1,2023.Refer to Note 3 for further information.(2)During the first quarter of 2024,certain non-core assets were determined to meet the criteria for assets held for sale.As a result,the related assets and liabilities,including Reclamation and remediation liabilities,were reclassified to Assets held for sale and Liabilities held for sale,respectively.Refer to Note 5 for additional information.At June 30,2024At December 31,2023ReclamationRemediationTotalReclamationRemediationTotalCurrent(1)$512$66$578$558$61$619 Non-current(2)6,327 293 6,620 7,827 340 8,167 Total(3)$6,839$359$7,198$8,385$401$8,786 _(1)The current portion of reclamation and remediation liabilities are included in Other current liabilities.(2)The non-current portion of reclamation and remediation liabilities are included in Reclamation and remediation liabilities.(3)Total reclamation liabilities include$4,787 and$4,804 related to Yanacocha at June 30,2024 and December 31,2023,respectively.The Company is also involved in several matters concerning environmental remediation obligations associated with former,primarily historic,mining activities.Generally,these matters concern developing and implementing remediation plans at the various sites involved.The amounts accrued are reviewed periodically based upon facts and circumstances available at the time.Changes in estimates are recorded in Other current liabilities and Reclamation and remediation liabilities in the period estimates are revised.Included in Assets held for sale at June 30,2024 is$53 of restricted cash held for purposes of settling reclamation and remediation obligations at Akyem.Included in Other non-current assets at June 30,2024 and December 31,2023 are$20 and$81,respectively,of non-current restricted cash held for purposes of settling reclamation and remediation obligations.The amounts at June 30,2024 primarily relate to Ahafo.The amounts at December 31,2023 primarily relate to Ahafo and Akyem.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)27Included in Other non-current assets at June 30,2024 and December 31,2023 are$17 and$21,respectively,of non-current restricted investments,which are legally pledged for purposes of settling reclamation and remediation obligations.The amounts at June 30,2024 and December 31,2023 primarily relate to San Jose Reservoir at Yanacocha.Refer to Note 20 for further discussion of reclamation and remediation matters.NOTE 8 OTHER EXPENSE,NETThree Months EndedJune 30,Six Months EndedJune 30,2024202320242023Newcrest transaction and integration costs(1)$16$21$45$21 Settlement costs 5 26 Impairment charges 9 4 21 8 Restructuring and severance 9 10 15 12 Other 20 6 25 8 Other expense,net$59$41$132$49 _(1)Represents costs incurred related to the Newcrest transaction.Refer to Note 3 for further information.NOTE 9 OTHER INCOME(LOSS),NETThree Months EndedJune 30,Six Months EndedJune 30,2024202320242023Interest income$38$37$77$73 Gain on asset and investment sales,net 55 64 36 Change in fair value of investments(9)(42)22 (1)Gain on debt extinguishment,net(1)14 14 Insurance proceeds(2)2 12 Foreign currency exchange,net(25)(11)3 (22)Other,net 25 (1)29 (4)Other income(loss),net$100$(17)$221$82 _(1)In June 2024,the Company partially redeemed certain Senior Notes,resulting in a gain on extinguishment of$20,partially offset by the acceleration of$6 loss from Accumulated Other Comprehensive Income related to the previously terminated interest rate cash flow hedges for the three and six months ended June 30,2024.Refer to Note 16 for additional information.(2)For the six months ended June 30,2024,primarily consists of insurance proceeds received of$12 related to a conveyor failure at Ahafo.Gain on asset and investment sales,net.For the three and six months ended June 30,2024,Gain on asset and investment sales,net primarily consists of the gain recognized of$49 on the sale of the Stream Credit Facility Agreement(SCFA)in the second quarter and the purchase and sale of foreign currency bonds.Refer to Note 12 of the Condensed Consolidated Financial Statements for further information on the sale of the SCFA.For the six months ended June 30,2023,Gain on asset and investment sales,net primarily consists of the gain recognized on the exchange of the previously held 28.5%investment in Maverix Metals,Inc.(Maverix)for 7.5%ownership interest in Triple Flag Precious Metals Corporation(Triple Flag)resulting from Triple Flags acquisition of all issued and outstanding common shares of Maverix in January 2023,partially offset by the loss on the sale of the Triple Flag investment in March 2023,resulting in a net gain of$36.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)28NOTE 10 INCOME AND MINING TAXESA reconciliation of the U.S.federal statutory tax rate to the Companys effective income tax rate follows:Three Months Ended June 30,(1)Six Months Ended June 30,(1)2024202320242023Income(loss)before income and mining tax and other items$1,036$300$1,464$839 U.S.Federal statutory tax rate 21!8 21c 2107 216 Reconciling items:Change in valuation allowance on deferred tax assets 2 20 16 48 (3)(45)7 57 Foreign rate differential 8 84 10 32 10 147 9 75 Mining and other taxes(net of associated federal benefit)5 52 7 20 6 95 6 49 Uncertain tax position reserve adjustment(5)(50)1 3 (4)(52)2 14 Tax impact of foreign exchange (9)(88)1 3 (4)(58)2 21 Akyem recognition of DTL for assets held for sale(3)(36)6 81 Other(1)(9)(2)(6)(1)(24)(2)(16)Income and mining tax expense(benefit)18%$191 54%$163 31%$451 45%$376 _(1)Tax rates may not recalculate due to rounding.NOTE 11 FAIR VALUE ACCOUNTINGThe following tables set forth the Companys assets and liabilities measured at fair value on a recurring(at least annually)or nonrecurring basis by level within the fair value hierarchy.As required by accounting guidance,assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.Refer to Note 13 of the Consolidated Financial Statements included in Part II of the Companys Annual Report on Form 10-K for the year ended December 31,2023 filed with the SEC on February 29,2024 for further information on the Companys assets and liabilities included in the fair value hierarchy presented below.Fair Value at June 30,2024TotalLevel 1Level 2Level 3Assets:Cash and cash equivalents(1)$2,602$2,602$Restricted cash 34 34 Time deposits(Note 13)28 28 Trade receivables from provisional concentrate sales,net 943 943 Assets held for sale(Note 5)(2)2,947 2,947 Marketable and other equity securities(Note 13)(3)268 259 9 Restricted marketable debt securities(Note 13)17 17 Derivative assets(Note 12)252 2 250$7,091$2,912$982$3,197 Liabilities:Debt(4)$8,582$8,582$Derivative liabilities(Note 12)10 3 7$8,592$8,585$7 Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)29Fair Value at December 31,2023TotalLevel 1Level 2Level 3Assets:Cash and cash equivalents(1)$3,002$3,002$Restricted cash 98 98 Trade receivables from provisional concentrate sales,net 734 734 Long-lived assets 22 22 Marketable and other equity securities(Note 13)252 243 9 Restricted marketable debt securities(Note 13)21 21 Derivative assets(Note 12)642 7 635$4,771$3,364$750$657 Liabilities:Debt(4)$8,975$8,975$Derivative liabilities(Note 12)8 3 5$8,983$8,978$5 _(1)Cash and cash equivalents includes short-term deposits that have an original maturity of three months or less.(2)Assets held for sale at June 30,2024 includes assets held for sale that were written down to their fair value,excluding costs to sell,of$1,564 and$1,383 at March 31,2024 and June 30,2024,respectively.The aggregate fair value,excluding costs to sell,of net assets held for sale subject to fair value remeasurement was$916 and$600 at March 31,2024 and June 30,2024,respectively.(3)Excludes certain investments accounted for under the measurement alternative at June 30,2024.(4)Debt is carried at amortized cost.The outstanding carrying value was$8,692 and$8,874 at June 30,2024 and December 31,2023,respectively.Refer to Note 16 for further information.The fair value measurement of debt was based on an independent third party pricing source.The Companys assets held for sale consist of the six non-core assets and a development project that met the accounting requirements to be presented as held for sale in the first quarter of 2024.The assets are classified as non-recurring within Level 3 of the fair value hierarchy.Refer to Note 5 for further information.The following tables set forth a summary of the quantitative and qualitative information related to the significant observable and unobservable inputs used in the calculation of the Companys Level 3 financial assets and liabilities at June 30,2024 and December 31,2023:DescriptionAt June 30,2024Valuation TechniqueSignificant InputRange,Point Estimate or AverageWeighted Average Discount RateAssets held for sale$2,947 Income-based approachVarious(1)Various(1)Various(1)Derivative assets:Hedging instruments(2)(3)$102 Discounted cash flowForward power pricesA$43-A$321 6.92%Contingent consideration assets$146 Monte Carlo(4)Discount rate8.04%-26.43.50rivative liabilities(3)$5 Discounted cash flowDiscount rate4.82%-6.15%5.62scriptionAt December 31,2023Valuation TechniqueSignificant InputRange,Point Estimate or AverageWeighted Average Discount RateLong-lived assets$22 Market-multipleVarious(5)Various(5)Various(5)Derivative assets:Derivative assets,not designated for hedging(2)$424 Discounted cash flowDiscount rate6.28%-10.50%9.03%Contingent consideration assets$211 Monte Carlo(4)Discount rate8.04%-26.43.18rivative liabilities$5 Discounted cash flowDiscount rate4.91%-6.15%5.65%_(1)Refer to Note 5 for information on the assumptions and inputs specific to the non-recurring fair value measurements performed in connection with assets held for sale.(2)The SCFA and the Cadia Power Purchase Agreement(Cadia PPA),acquired as part of the Newcrest transaction,were not designated in a hedging relationship at December 31,2023.At January 1,2024,the Company designated the Cadia PPA for hedge accounting,and as a result is included within Hedging instruments at June 30,2024.Additionally,in the second quarter of 2024,the Company sold the SCFA.Refer to Note 12 for further information.(3)At June 30,2024,the current portion of the Cadia PPA of$2 is in a liability position and the non-current portion of$104 is in an asset position.The current portion is included in Derivative liabilities within the fair value hierarchy table.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)30(4)A Monte Carlo valuation model is used for the fair value measurement of the Batu Hijau contingent consideration asset.All other contingent consideration assets are valued using a probability-weighted discounted cash flow model.(5)At December 31,2023,the Company recognized its proportionate share of the non-cash impairment charge on long-lived assets at NGM,which resulted in a remaining long-lived asset balance of$22.The estimated fair value was based on observable market values for comparable assets expressed as dollar per ounce of mineral resources and was considered a non-recurring Level 3 fair value measurement.The following tables set forth a summary of changes in the fair value of the Companys recurring Level 3 financial assets and liabilities:Derivative Assets(1)Total AssetsDerivative Liabilities(2)Total LiabilitiesFair value at December 31,2023$635$635$5$5 Settlements/Reclassifications(3)(76)(76)Revaluation(28)(28)2 2 Sales(4)(281)(281)Fair value at June 30,2024$250$250$7$7 DerivativeAssets(1)Total AssetsDerivative Liabilities(2)Total LiabilitiesFair value at December 31,2022$188$188$3$3 Revaluation(1)(1)2 2 Fair value at June 30,2023$187$187$5$5 _(1)In 2024,the gain(loss)recognized on revaluation of derivative assets of$5,$(44)and$11 is included in Other income(loss),net,Other comprehensive income(loss),and Net income(loss)from discontinued operations,respectively.In 2023,the(loss)gain recognized on revaluation derivative assets of$(7)and$6 is included in Other income(loss),net and Net income(loss)from discontinued operations,respectively.(2)In 2024,the loss recognized on revaluation of derivative liabilities of$2 is included in Other comprehensive income(loss).In 2023,the loss recognized on revaluation of derivative liabilities of$2 is included in Other income(loss),net.(3)In the first quarter of 2024,certain amounts relating to the Batu Hijau contingent consideration asset were reclassified from current Derivative assets to Other current assets as a result of achieving certain contractual milestones.(4)In the second quarter of 2024,the Company sold the SCFA.Refer to Note 12 for further information.NOTE 12 DERIVATIVE INSTRUMENTSAt June 30,2024At December 31,2023Current derivative assets:Derivative assets,not designated for hedging(1)$115 Contingent consideration assets 69 76 Hedging instruments 2 7$71$198 Non-current derivative assets:Derivative assets,not designated for hedging(1)$309 Contingent consideration assets 77 135 Hedging instruments(1)104$181$444 Current derivative liabilities:(2)Contingent consideration liabilities$3$3 Hedging instruments(1)2$5$3 Non-current derivative liabilities:(3)Contingent consideration liabilities$5$5$5$5 _(1)The SCFA and the Cadia PPA,acquired as part of the Newcrest transaction,were not designated in a hedging relationship at December 31,2023.At January 1,2024,the Company designated the Cadia PPA for hedge accounting,and as a result is included within Hedging instruments at June 30,2024.Additionally,in the second quarter of 2024,the Company sold the SCFA.See below for further information.(2)Included in Other current liabilities.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)31(3)Included in Other non-current liabilities.Derivative Assets,Not Designated for HedgingStream Credit Facility Agreement(SCFA)The SCFA was a non-revolving credit facility in relation to the Fruta del Norte mine,which is wholly owned and operated by Lundin Gold Inc.(Lundin Gold)in which the Company holds a 32.0%equity interest(refer to Note 13 for further information).The SCFA was a financial instrument that met the definition of a derivative and was accounted for at fair value using a probability weighted discounted cash flow model,but was not designated for hedge accounting under ASC 815.The fair value of the SCFA was$276 at December 31,2023,of which$113 was recognized in current Derivative assets and$163 was recognized in non-current Derivative assets.In the second quarter of 2024,the Company completed the sale of the SCFA and Offtake agreement in which Lundin Gold repurchased the SCFA and settled the rights under the Offtake agreement for cash consideration of$330,of which$180 was received in June 2024.Refer to Note 13 for further information on the Offtake agreement.The final payment of$150 is expected in the third quarter of 2024 and is included in Other current assets.The sale resulted in a gain of$49 recognized in Other Income(loss),net.Hedging InstrumentsHedging instruments consisted of the foreign currency cash flow hedges and Cadia PPA at June 30,2024.Foreign currency cash flow hedgesIn June 2024,the Company initiated a hedge program by entering into AUD-denominated fixed forward contracts,with A$136 entered into as of June 30,2024,to mitigate variability in the USD functional cash flows related to the AUD-denominated capital expenditures to be incurred during the construction and development phase of the Tanami Expansion 2 project,Cadia PC1-2 and PC2-3(Cadia Block Caves)and Cadia Tailings Project(Cadia Tails)to be incurred between October 2024 and December 2025.The capital expenditures hedged for the Tanami Expansion 2 project under these fixed forward contracts will be for spend not covered by the hedges entered into in October 2022,as described below.The fixed forward contracts were transacted for risk management purposes.The Company has designated the fixed forward contracts as foreign currency cash flow hedges against the forecasted AUD-denominated capital expenditures for the Tanami Expansion 2,Cadia Block Caves,and Cadia Tails projects.Additionally in June 2024,the Company entered into CAD-denominated and AUD-denominated fixed forward contracts,with C$105 and A$413 entered into as of June 30,2024,respectively,to mitigate variability in the USD functional cash flows related to the CAD-denominated and AUD-denominated operating expenditures expected to be incurred between October 2024 and December 2025 at the Brucejack and Red Chris operating mines located in Canada and the Boddington,Tanami,and Cadia operating mines located in Australia,respectively.The fixed forward contracts were transacted for risk management purposes.The Company has designated the CAD-denominated and AUD-denominated fixed forward contracts as foreign currency cash flow hedges against the forecasted CAD-denominated and AUD-denominated operating expenditures,respectively.In October 2022,the Company entered into A$574 of AUD-denominated fixed forward contracts to mitigate variability in the USD functional cash flows related to the AUD-denominated capital expenditures expected to be incurred in 2023 and 2024 during the construction and development phase of the Tanami Expansion 2 project.The fixed forward contracts were transacted for risk management purposes.The Company has designated the fixed forward contracts as foreign currency cash flow hedges against the forecasted AUD-denominated Tanami Expansion 2 capital expenditures.To minimize credit risk,the Company only enters into transactions with counterparties that meet certain credit requirements and periodically reviews the creditworthiness of these counterparties.The Company believes that the risk of counterparty default is low and its exposure to credit risk is minimal.The unrealized changes in fair value have been recorded in Accumulated other comprehensive income(loss)and are reclassified to income during the period in which the hedged transaction affects earnings and is presented in the same income statement line item as the earnings effect of the hedged item.If the underlying hedge transaction becomes probable of not occurring,the related amounts will be reclassified to earnings immediately.For the foreign currency cash flow hedges related to capital expenditures,amounts recorded in Accumulated other comprehensive income(loss)are reclassified to earnings through Depreciation and amortization after the respective project reaches commercial production.For the foreign currency cash flow hedges related operating expenditures,amounts recorded in Accumulated other comprehensive income(loss)are reclassified to earnings through Costs applicable to sales in the month that the operating expenditures are incurred.Cadia Power Purchase Agreement(Cadia PPA)The Cadia PPA is a 15-year renewable power purchase agreement acquired by the Company through the Newcrest transaction.The Cadia PPA will partially hedge against future power price increases at the Cadia mine and will provide the Company with access to large scale generation certificates which the Company intends to surrender to achieve a reduction in its greenhouse gas Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)32emissions.At December 31,2023,the Cadia PPA was a financial instrument that met the definition of a derivative under ASC 815 and was accounted for at fair value using a probability weighted discounted cash flow model,but was not designated for hedging.At January 1,2024,the Company designated the Cadia PPA in a cash flow hedging relationship to mitigate the variability in cash flows related to approximately 40 percent of forecasted purchases of power at the Cadia mine for a 15 year period from the Cadia PPAs commercial operations date,which is expected in the third quarter of 2024.To minimize credit risk,the Company only enters into transactions with counterparties that meet certain credit requirements and periodically reviews the creditworthiness of these counterparties.The Company believes that the risk of counterparty default is low and its exposure to credit risk is minimal.The unrealized changes in fair value have been recorded in Accumulated other comprehensive income(loss)and will be reclassified to income during the period in which the hedged transaction affects earnings and is presented in the same income statement line item as the earnings effect of the hedged item.If the underlying hedge transaction becomes probable of not occurring,the related amounts in Accumulated other comprehensive income(loss)will be reclassified to earnings immediately.For the Cadia PPA cash flow hedge,amounts recorded in Accumulated other comprehensive income(loss)will be reclassified to earnings through Costs applicable to sales each period in which electricity is purchased beginning the commercial operations date.The following table provides the fair value of the Companys derivative instruments designated as cash flow hedges:At June 30,2024At December 31,2023Hedging instrument assets:Foreign currency cash flow hedges,current(1)$2$7 Cadia PPA cash flow hedge,non-current(2)(3)104$106$7 Hedging instrument liabilities:Cadia PPA cash flow hedge,current(3)(4)$2$2$_(1)Included in current Derivative assets.(2)Included in non-current Derivative assets.(3)At January 1,2024,the Company designated the Cadia PPA for hedge accounting.As a result,the Cadia PPA is captured in Derivative instruments,not designated for hedging at December 31,2023.See above for further information.(4)Included in Other current liabilities.The following table provides the losses(gains)recognized in earnings related to the Companys derivative instruments:Three Months EndedJune 30,Six Months EndedJune 30,2024202320242023Loss(gain)on cash flow hedges:Interest rate contracts(1)$7$1$8$2 Foreign currency cash flow hedges(2)2 2$7$3$8$4 _(1)Interest rate contracts relate to swaps entered into,and subsequently settled,associated with the issuance of the 2022 Senior Notes,2035 Senior Notes,2039 Senior Notes,and 2042 Senior Notes.The related gains and losses are reclassified from Accumulated Other Comprehensive Income(Loss)and amortized to Interest expense,net over the term of the respective hedged notes.During the three and six months ended June 30,2024,$6 was reclassified to Other income,net as a result of partial redemptions on the 2042 Senior Notes.See Note 16 for additional information.(2)Foreign currency cash flow hedges related to contracts entered into,and subsequently settled,in 2023 to mitigate the variability of CAD and AUD denominated operating expenditures.The amounts are reclassified out of Accumulated other comprehensive income(loss)into earnings in the month that the operating expenditures are incurred.The losses(gains)recognized in earnings are included in Costs applicable to sales.Contingent Consideration Assets and LiabilitiesContingent consideration assets and liabilities are comprised of contingent consideration to be received or paid by the Company in conjunction with various sales of assets and investments with future payment contingent upon meeting certain milestones.These contingent consideration assets and liabilities are accounted for at fair value and consist of financial instruments that meet the definition of a derivative but are not designated for hedge accounting under ASC 815.Refer to Note 11 for further information regarding the fair value of the contingent consideration assets and liabilities.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)33The Company had the following contingent consideration assets and liabilities:At June 30,2024At December 31,2023Contingent consideration assets:Batu Hijau and Elang(1)$96$161 Red Lake(2)39 39 Cerro Blanco(2)6 6 Triple Flag(2)4 4 Other(2)1 1$146$211 Contingent consideration liabilities:Norte Abierto(3)$3$3 Red Chris(4)3 3 Galore Creek(3)2 2$8$8 _(1)At June 30,2024,$69 is included in current Derivative assets and$27 is included in non-current Derivative assets.At December 31,2023,$76 is included in current Derivative assets and$85 is included in non-current Derivative assets.(2)Included in non-current Derivative assets.(3)Included in Other non-current liabilities.(4)Acquired through the Newcrest transaction and is included in Other current liabilities.Batu Hijau and Elang Contingent Consideration AssetsThe Batu Hijau and Elang contingent consideration assets relate to the sale of PT Newmont Nusa Tenggara in 2016.In July 2024,the Company executed an agreement for the sale of the Batu and Elang contingent consideration assets for cash consideration of approximately$153,expected to be received in the third quarter of 2024.NOTE 13 INVESTMENTSAt June 30,2024At December 31,2023Current investments:Time deposits(1)$28$Marketable equity securities 22 23 50 23 Non-current investments:Marketable and other equity securities(2)$271$229 Equity method investments:Pueblo Viejo Mine(40.0%)$1,461$1,489 NuevaUnin Project(50.0%)959 959 Lundin Gold Inc.(32.0%and 32.0%,respectively)921 938 Norte Abierto Project(50.0%)529 528 3,870 3,914$4,141$4,143 Non-current restricted investments:(3)Marketable debt securities$17$21 _(1)At June 30,2024,Time deposits primarily includes deposits with an original maturity of more than three months but less than one year.(2)At June 30,2024,includes$25 accounted for under the measurement alternative.(3)Non-current restricted investments are legally pledged for purposes of settling reclamation and remediation obligations and are included in Other non-current assets.Refer to Note 7 for further information regarding these amounts.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)34Equity method investmentsIncome(loss)from the Companys equity method investments is recognized in Equity income(loss)of affiliates,which primarily consists of income from Pueblo Viejo.(Loss)income from Pueblo Viejo consisted of$(3)and$15,for the three months ended June 30,2024 and 2023,respectively,and$14 and$36 for the six months ended June 30,2024 and 2023,respectively.Pueblo ViejoAs of June 30,2024 and December 31,2023,the Company had outstanding shareholder loans to Pueblo Viejo of$434 and$429,with accrued interest of$21 and$14,respectively,included in the Pueblo Viejo equity method investment.Additionally,the Company has an unfunded commitment to Pueblo Viejo in the form of a revolving loan facility(Revolving Facility).There were no borrowings outstanding under the Revolving Facility as of June 30,2024.The Company purchases its portion(40%)of gold and silver produced from Pueblo Viejo at market price and resells those ounces to third parties.Total payments made to Pueblo Viejo for gold and silver purchased were$126 and$248 for the three and six months ended June 30,2024.Total payments made to Pueblo Viejo for gold and silver purchased were$104 and$221 for the three and six months ended June 30,2023,respectively.These purchases,net of subsequent sales,are included in Other income(loss),net and the net amount is immaterial.There were no amounts due to or from Pueblo Viejo for gold and silver purchases as of June 30,2024 or December 31,2023.Lundin Gold Inc.Lundin Gold was acquired as part of the Newcrest transaction on November 6,2023 and is accounted for on a quarterly lag.The Company had the right to purchase 50%of gold produced from Lundin Gold at a price determined based on delivery dates and a defined quotational period and resold the ounces purchased to third parties under an offtake agreement acquired through the Newcrest transaction(the Offtake agreement).Total payments made to Lundin Gold under the Offtake agreement for gold purchased was$109 and$189 for the three and six months ended June 30,2024.These purchases,net of subsequent sales,are included in Other income(loss),net and the net amount is immaterial.There was$10 and$13 payable due to Lundin Gold for gold purchases as of June 30,2024 and December 31,2023,respectively.In the second quarter of 2024,the Company completed the sale of the SCFA and Offtake agreement in which Lundin Gold repurchased the SCFA and settled the rights under the Offtake agreement.Refer to Note 12 for further information.NOTE 14 INVENTORIESAt June 30,2024At December 31,2023Materials and supplies$1,111$1,247 In-process 109 160 Concentrate 155 134 Precious metals 92 122 Inventories(1)$1,467$1,663 _(1)During the first quarter of 2024,certain non-core assets were determined to meet the criteria for held for sale.As a result,the related assets,including Inventories of$253,and liabilities were reclassified to Assets held for sale and Liabilities held for sale,respectively.Refer to Note 5 for additional information.NOTE 15 STOCKPILES AND ORE ON LEACH PADSAt June 30,2024(1)At December 31,2023StockpilesOre on Leach PadsTotalStockpilesOre on Leach PadsTotalCurrent$516$165$681$746$233$979 Non-current 1,844 158 2,002 1,532 403 1,935 Total$2,360$323$2,683$2,278$636$2,914 _(1)During the first quarter of 2024,certain non-core assets were determined to meet the criteria for held for sale.As a result,the related assets,including Stockpiles and ore on leach pads of$586,and liabilities were reclassified to Assets held for sale and Liabilities held for sale,respectively.Refer to Note 5 for additional information.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)35NOTE 16 DEBTScheduled minimum debt repayments are as follows:At June 30,2024Year Ending December 31,2024(for the remainder of 2024)$2025 2026 928 2027 2028 Thereafter 8,096 Total face value of debt 9,024 Unamortized premiums,discounts,and issuance costs(332)Debt$8,692 Corporate Revolving Credit Facilities and Letters of Credit FacilitiesIn connection with the Newcrest transaction,the Company acquired bilateral bank debt facilities held with 13 banks.The bilateral bank debt facilities had a total borrowing capacity of$2,000,of which$1,923 was outstanding at December 31,2023,and$462 due February 7,2024,$769 due March 1,2024,and$692 due March 1,2026.On February 7,2024,the Company repaid$462 of the amount outstanding.On February 15,2024,the Company completed an amendment and restatement of its existing$3,000 revolving credit agreement dated as of April 4,2019(the“Existing Credit Agreement”).The Existing Credit Agreement was entered into with a syndicate of financial institutions and provided for borrowings in U.S.dollars and contained a letter of credit sub-facility.Per the amendment,the expiration date of the credit facility was extended from March 30,2026 to February 15,2029 and the borrowing capacity was increased to$4,000.Interest is based on Term SOFR plus a credit spread adjustment and margin.Facility fees vary based on the credit ratings of the Companys senior,uncollateralized,non-current debt.Debt covenants under the amendment are substantially the same as the Existing Credit Agreement.On February 20,2024,the Company utilized its$4,000 revolving credit agreement to repay the remaining$1,461 owed on the bilateral bank debt facilities.2026 and 2034 Senior NotesOn March 7,2024,the Company issued$2,000 unsecured Senior Notes comprised of$1,000 due March 15,2026(“2026 Senior Notes”)and$1,000 due March 15,2034(2034 Senior Notes).Net proceeds from the 2026 and 2034 Senior Notes were$1,980.Interest will be paid semi-annually at a rate of 5.30%and 5.35%per annum for the 2026 and the 2034 Senior Notes,respectively.The proceeds from this issuance were used to repay the drawdown on the revolving credit facility resulting in no amounts outstanding on the revolving credit facility as of June 30,2024.Debt ExtinguishmentIn June 2024,the Company partially redeemed certain Senior Notes resulting in a gain on extinguishment of$20 recognized in Other income(loss),net for the three and six months ended June 30,2024.The gain includes the write-off of unamortized premiums,discounts,and issuance costs of$3 related to the partially redeemed Senior Notes.The following table summarizes the partial redemptions:Settled Notional AmountTotal Repurchase Amount(1)$1,000 5.30%Senior Notes due March 2026$72$74$700 2.80%Senior Notes due October 2029 3 3$650 3.25%Senior Notes due May 2030 1 1$1,000 2.25%Senior Notes due October 2030 36 31$1,000 2.60%Senior Notes due July 2032 100 85$1,000 4.875%Senior Notes due March 2042(2)38 36$250$230 _(1)Includes$3 of accrued interest.(2)As a result of the partial redemption,the Company accelerated a loss of$6 from Accumulated other comprehensive income(loss)to Other income(loss),net for the three and six months ended June 30,2024 related to previously terminated interest rate swaps.Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)36NOTE 17 OTHER LIABILITIESAt June 30,2024At December 31,2023Other current liabilities:Reclamation and remediation liabilities$578$619 Accrued operating costs(1)439 473 Accrued capital expenditures 222 320 Payables to NGM(2)73 91 Stamp duty on Newcrest transaction(3)29 316 Other(4)478 543$1,819$2,362 Other non-current liabilities:Income and mining taxes(5)$123$177 Other(6)124 139$247$316 _(1)Includes an estimated compensation payment to the Worsley JV related to the waiver of certain rights within the cross-operation agreement that confers priority to the bauxite operations at the Boddington mine.(2)Primarily consists of amounts due to NGM representing Barricks 61.5%proportionate share of the amount owed to NGM for gold and silver purchased by Newmont.Newmonts 38.5%share of such amounts is eliminated upon proportionate consolidation of its interest in NGM.Receivables for Newmonts 38.5%proportionate share related to NGMs activities with Barrick are included in Other current assets.(3)Incurred as a result of the Newcrest transaction;refer to Note 3 for further information on the Newcrest transaction.Payment of$291 occurred in the first quarter of 2024.(4)Primarily consists of accrued interest on debt,accrued royalties and the current portion of the silver streaming agreement liability.(5)Primarily consists of unrecognized tax benefits,including penalties and interest.(6)Primarily consists of operating lease liabilities.NOTE 18 ACCUMULATED OTHER COMPREHENSIVE INCOME(LOSS)Unrealized Gain(Loss)on Marketable Debt SecuritiesOwnership Interest in Equity Method InvestmentForeign Currency Translation AdjustmentsPension and Other Post-retirement Benefit AdjustmentsUnrealized Gain(Loss)on Hedge InstrumentsTotalBalance at December 31,2023$(1)$121$(36)$(70)$14 Net current-period other comprehensive income(loss):Gain(loss)in other comprehensive income(loss)before reclassifications (2)8 (34)(28)(Gain)loss reclassified from accumulated other comprehensive income(loss)7 7 Other comprehensive income(loss)(2)8 (27)(21)Balance at June 30,2024$(1)$(2)$129$(36)$(97)$(7)Table of ContentsNEWMONT CORPORATIONNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited,dollars in millions,except per share,per ounce and per pound amounts)37NOTE 19 NET CHANGE IN OPERATING ASSETS AND LIABILITIESNet cash provided by(used in)operating activities of continuing operations attributable to the net change in operating assets and liabilities is composed of the following:Six Months EndedJune 30,2024(1)2023Decrease(increase)in operating assets:Trade and other receivables$(224)$175 Inventories,stockpiles and ore on leach pads (378)(261)Other assets 56 15 Increase(decrease)in operating liabilities:Accounts payable(123)(84)Reclamation and remediation liabilities (166)(111)Accrued tax liabilities 142 (91)Other accrued liabilities(2)(236)(112)Net change in operating assets and liabilities$(929)$(469)_(1)During the first quarter of 2024,certain non-core assets were determined to meet the criteria for assets held for sale.As a result,the related assets and liabilities were reclassified to Assets held for sale and Liabilities held for sale,respectively.Amounts herein reflect the net change in the related operating assets and liabilities prior to being reclassified as held for sale.Refer to Note 5 for additional information.(2)For the six months ended June 30,2024,primarily consists of payment of$291 made in the first quarter for stamp duty tax largely accrued in the fourth quarter of 2023 in connection with the Newcrest transaction.NOTE 20 COMMITMENTS AND CONTINGENCIESGeneralEstimated losses from contingencies are accrued by a charge to income when information available prior to issuance of the financial statements indicates that it is probable that a liability could be incurred,and the amount of the loss can be reasonably estimated.Legal expenses associated with the contingency are expensed as incurred.If a loss contingency is not probable or reasonably estimable,disclosure of the contingency and estimated range of loss,if determinable,is made in the financial statements when it is at least reasonably possible that a material loss could be incurred.Operating SegmentsThe Companys operating and reportable segments are identified in Note 4.Except as noted in this paragraph,all of the Companys commitments and contingencies specifically described herein are included in Corporate and Other.The Yanacocha matters relate to the Yanacocha reportable segment.The Newmont Ghana Gold and Newmont Golden Ridge matters relate to the Ahafo and Akyem reportable segments,respectively.The CC&V matter relates to the CC&V reportable segment.The Goldcorp Canada matter relates to the Porcupine reportable segment.The Cadia matter relates to the Cadia reportable segment.Environmental MattersRefer to Note 7 for further information regarding reclamation and remediation.Details about certain significant matters are discussed below.Minera Yanacocha S.R.L.-100%Newmont OwnedIn early 2015 and again in June 2017,the Peruvian government agency responsible for certain environmental regulations,MINAM,issued proposed modifications to water quality criteria for designated beneficial uses which apply to mining companies,including Yanacocha.These criteria modified the in-stream water quality criteria pursuant to which Yanacocha has been designing water treatment processes and infrastructure.In December 2015,MINAM issued the final regulation that modified the water quality standards.These Peruvian regulations allow time to formulate a compliance plan and make any necessary changes to achieve compliance.In February 2017,Yanacocha submitted a modification to its previously approved compliance achievement plan to the MINEM.In May 2022,Yanacocha submitted a proposed modification to this plan requesting an extension of time for coming into full compliance with the new regulations to 2027.In June 2023,Yanacocha received approval of its updated compliance plan from MINEM and was granted an extension to
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UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549_FORM 10-Q _ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended March 31,2024 or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from _ to _ Commission file number:001-10898 _The Travelers Companies,Inc.(Exact name of registrant as specified in its charter)_Minnesota 41-0518860(State or other jurisdiction ofincorporation or organization)(I.R.S.EmployerIdentification No.)485 Lexington Avenue New York,NY 10017(Address of principal executive offices)(Zip Code)(917)778-6000(Registrants telephone number,including area code)_Securities registered pursuant to Section 12(b)of the Act:Title of each class Trading Symbol(s)Name of each exchange on which registeredCommon stock,without par value TRV New York Stock ExchangeIndicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant was required to file such reports),and(2)has been subject to such filing requirements for the past 90 days.Yes No o Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period that the registrant was required to submit such files).Yes No o Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting company,or an emerging growth company.See the definitions of“large accelerated filer,”“accelerated filer,”“smaller reporting company,”and“emerging growth company”in Rule 12b-2 of the Exchange Act.Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting companyEmerging growth companyIf an emerging growth company,indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a)of the Exchange Act.oIndicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act).Yes No The number of shares of the Registrants Common Stock,without par value,outstanding at April 11,2024 was 228,993,392.The Travelers Companies,Inc.Quarterly Report on Form 10-Q For Quarterly Period Ended March 31,2024 _ TABLE OF CONTENTS Page Part I Financial Information Item 1.Financial Statements:Consolidated Statement of Income(Unaudited)Three Months Ended March 31,2024 and 2023 .3 Consolidated Statement of Comprehensive Income(Loss)(Unaudited)Three Months Ended March 31,2024 and 2023 .4 Consolidated Balance Sheet March 31,2024(Unaudited)and December 31,2023 .5 Consolidated Statement of Changes in Shareholders Equity(Unaudited)Three Months Ended March 31,2024 and 2023 .6 .Consolidated Statement of Cash Flows(Unaudited)Three Months Ended March 31,2024 and 2023 .7 Notes to Consolidated Financial Statements(Unaudited).8 .Item 2.Managements Discussion and Analysis of Financial Condition and Results of Operations .29 .Item 3.Quantitative and Qualitative Disclosures About Market Risk .57 .Item 4.Controls and Procedures .57 Part II Other Information Item 1.Legal Proceedings .58 .Item 1A.Risk Factors .58 .Item 2.Unregistered Sales of Equity Securities and Use of Proceeds .58 .Item 5.Other Information .59 .Item 6.Exhibits .59 .SIGNATURES .60 2PART 1 FINANCIAL INFORMATION Item 1.FINANCIAL STATEMENTS THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESCONSOLIDATED STATEMENT OF INCOME(Unaudited)(in millions,except per share amounts)Three Months EndedMarch 31,20242023RevenuesPremiums .$10,126$8,854 Net investment income .846 663 Fee income .109 106 Net realized investment gains .35 6 Other revenues .112 75 Total revenues .11,228 9,704 Claims and expensesClaims and claim adjustment expenses .6,656 5,959 Amortization of deferred acquisition costs .1,698 1,462 General and administrative expenses .1,406 1,267 Interest expense .98 88 Total claims and expenses .9,858 8,776 Income before income taxes.1,370 928 Income tax expense(benefit).247 (47)Net income .$1,123$975 Net income per shareBasic .$4.87$4.18 Diluted .$4.80$4.13 Weighted average number of common shares outstandingBasic .229.0 231.7 Diluted .232.0 234.4 Cash dividends declared per common share .$1.00$0.93 The accompanying notes are an integral part of the consolidated financial statements.3THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESCONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME(Unaudited)(in millions)Three Months EndedMarch 31,20242023Net income .$1,123$975 Other comprehensive income(loss):Changes in net unrealized gains(losses)on investment securities:Having no credit losses recognized in the consolidated statement of income .(752)1,308 Having credit losses recognized in the consolidated statement of income .2 Net changes in benefit plan assets and obligations .(1)(3)Net changes in unrealized foreign currency translation .(71)37 Other comprehensive income(loss)before income taxes .(822)1,342 Income tax expense(benefit).(162)283 Other comprehensive income(loss),net of taxes .(660)1,059 Comprehensive income .$463$2,034 The accompanying notes are an integral part of the consolidated financial statements.4THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESCONSOLIDATED BALANCE SHEET(in millions)March 31,2024December 31,2023(Unaudited)AssetsFixed maturities,available for sale,at fair value(amortized cost$82,712 and$81,781;allowance for expected credit losses of$3 and$5).$77,991$77,807 Equity securities,at fair value (cost$557 and$553).689 608 Real estate investments .958 959 Short-term securities .4,682 5,137 Other investments .4,337 4,299 Total investments .88,657 88,810 Cash .667 650 Investment income accrued .648 688 Premiums receivable(net of allowance for expected credit losses of$68 and$69).10,829 10,282 Reinsurance recoverables(net of allowance for estimated uncollectible reinsurance of$117 and$118).8,100 8,143 Ceded unearned premiums .1,535 1,150 Deferred acquisition costs .3,380 3,306 Deferred taxes .1,639 1,504 Contractholder receivables(net of allowance for expected credit losses of$19 and$20).3,266 3,249 Goodwill .4,251 3,976 Other intangible assets .376 277 Other assets .4,062 3,943 Total assets .$127,410$125,978 Liabilities Claims and claim adjustment expense reserves .$62,487$61,627 Unearned premium reserves .21,307 20,872 Contractholder payables .3,285 3,269 Payables for reinsurance premiums .887 518 Debt .8,032 8,031 Other liabilities .6,390 6,740 Total liabilities .102,388 101,057 Shareholders equity Common stock(1,750.0 shares authorized;229.0 and 228.2 shares issued and outstanding).25,163 24,906 Retained earnings .46,483 45,591 Accumulated other comprehensive loss .(5,131)(4,471)Treasury stock,at cost(561.0 and 559.2 shares).(41,493)(41,105)Total shareholders equity .25,022 24,921 Total liabilities and shareholders equity .$127,410$125,978 The accompanying notes are an integral part of the consolidated financial statements.5THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESCONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY(Unaudited)(in millions)Three Months EndedMarch 31,20242023Common stock Balance,beginning of period .$24,906$24,565 Employee share-based compensation .179 68 Compensation amortization under share-based plans and other changes .78 70 Balance,end of period .25,163 24,703 Retained earnings Balance,beginning of period .45,591 43,516 Net income .1,123 975 Dividends .(232)(218)Other .1 Balance,end of period .46,483 44,273 Accumulated other comprehensive loss,net of tax Balance,beginning of period .(4,471)(6,445)Other comprehensive income(loss).(660)1,059 Balance,end of period .(5,131)(5,386)Treasury stock,at cost Balance,beginning of period .(41,105)(40,076)Treasury stock acquired share repurchase authorizations .(250)(400)Net shares acquired related to employee share-based compensation plans .(138)(62)Balance,end of period .(41,493)(40,538)Total shareholders equity .$25,022$23,052 Common shares outstanding Balance,beginning of period .228.2 232.1 Treasury stock acquired share repurchase authorizations .(1.2)(2.2)Net shares issued under employee share-based compensation plans .2.0 1.1 Balance,end of period .229.0 231.0 The accompanying notes are an integral part of the consolidated financial statements.6THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESCONSOLIDATED STATEMENT OF CASH FLOWS(Unaudited)(in millions)Three Months Ended March 31,20242023Cash flows from operating activities Net income .$1,123$975 Adjustments to reconcile net income to net cash provided by operating activities:.Net realized investment gains .(35)(6)Depreciation and amortization .196 204 Deferred federal income tax expense .42 32 Amortization of deferred acquisition costs .1,698 1,462 Equity in income from other investments .(68)(30)Premiums receivable .(557)(557)Reinsurance recoverables .33 (24)Deferred acquisition costs .(1,776)(1,629)Claims and claim adjustment expense reserves .928 381 Unearned premium reserves .457 893 Other .(583)(689)Net cash provided by operating activities .1,458 1,012 Cash flows from investing activities Proceeds from maturities of fixed maturities .1,709 1,538 Proceeds from sales of investments:Fixed maturities .942 2,364 Equity securities .21 28 Other investments .55 64 Purchases of investments:Fixed maturities .(3,738)(4,335)Equity securities .(26)(34)Real estate investments .(13)(14)Other investments .(90)(139)Net sales of short-term securities .454 228 Securities transactions in the course of settlement .111 (35)Acquisition,net of cash acquired .(381)Other .(81)(120)Net cash used in investing activities .(1,037)(455)Cash flows from financing activities Treasury stock acquired share repurchase authorizations .(250)(398)Treasury stock acquired net employee share-based compensation .(110)(62)Dividends paid to shareholders .(229)(215)Issuance of common stock employee share options .190 82 Net cash used in financing activities.(399)(593)Effect of exchange rate changes on cash .(5)4 Net increase(decrease)in cash .17 (32)Cash at beginning of year .650 799 Cash at end of period .$667$767 Supplemental disclosure of cash flow information Income taxes paid(received).$24$(16)Interest paid .$60$60 Supplemental disclosure of noncash financing activitiesIssuance of common stock net share settlement of employee options .$28$The accompanying notes are an integral part of the consolidated financial statements.71.BASIS OF PRESENTATION AND ACCOUNTING POLICIESBasis of PresentationThe interim consolidated financial statements include the accounts of The Travelers Companies,Inc.(together with its subsidiaries,the Company).These financial statements are prepared in conformity with U.S.generally accepted accounting principles(GAAP)and are unaudited.In the opinion of the Companys management,all adjustments necessary for a fair presentation have been reflected.Certain financial information that is normally included in annual financial statements prepared in accordance with GAAP,but that is not required for interim reporting purposes,has been omitted.All material intercompany transactions and balances have been eliminated.The accompanying interim consolidated financial statements and related notes should be read in conjunction with the Companys consolidated financial statements and related notes included in the Companys Annual Report on Form 10-K for the year ended December 31,2023(the Companys 2023 Annual Report).The preparation of the interim consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim consolidated financial statements and the reported amounts of revenues and claims and expenses during the reporting period.Actual results could differ from those estimates.To the extent that the Company changes its accounting for,or presentation of,items in the financial statements,the presentation of such amounts in prior periods is changed to conform to the current period presentation,if appropriate,and disclosed,if material.On January 2,2024,the Company completed its previously announced acquisition of all issued and outstanding shares of Corvus Insurance Holdings,Inc.(Corvus),a cyber insurance managing general underwriter,for consideration transferred of approximately$427 million.The acquisition provides the Company the opportunity to renew Corvuss book of business and to leverage Corvuss capabilities to enhance the return profile of Travelers existing cyber portfolio.At the acquisition date,the Company recorded at fair value$478 million of assets acquired and$51 million of liabilities assumed as part of purchase accounting,including$390 million of identifiable intangible assets and goodwill.The assets acquired from Corvus were included in the Companys Bond&Specialty Insurance segment,effective at the acquisition date.The Company funded this transaction from internal resources.A provisional amount of$19 million has been recorded as a deferred tax asset and included on the consolidated balance sheet.As the tax return for Corvus for the 2023 fiscal year will not be finalized until the third quarter of 2024,a measurement period adjustment is expected to be recorded in the third quarter of 2024.Income TaxesThe Company recognized a one-time tax benefit of$211 million in the first quarter of 2023 due to the expiration of the statute of limitations with respect to a tax item impacted by the repeal of Internal Revenue Code Section 847,which related to the discounting of property-casualty loss reserves.2.SEGMENT INFORMATIONNature of OperationsThe Companys results are reported in the following three business segments Business Insurance,Bond&Specialty Insurance and Personal Insurance.These segments reflect the manner in which the Companys businesses are currently managed and represent an aggregation of products and services based on the type of customer,how the business is marketed and the manner in which risks are underwritten.For more information regarding the Companys nature of operations,see the“Nature of Operations”section of note 1 of the notes to the consolidated financial statements in the Companys 2023 Annual Report.THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited)8The following tables summarize the components of the Companys revenues,income and total assets by reportable business segments:(For the three months ended March 31,in millions)BusinessInsuranceBond&SpecialtyInsurancePersonalInsuranceTotalReportableSegments2024 Premiums .$5,160$956$4,010$10,126 Net investment income .609 90 147 846 Fee income .101 8 109 Other revenues .77 9 26 112 Total segment revenues(1).$5,947$1,055$4,191$11,193 Segment income(1).$764$195$220$1,179 2023 Premiums .$4,477$875$3,502$8,854 Net investment income .473 73 117 663 Fee income .99 7 106 Other revenues .47 5 23 75 Total segment revenues(1).$5,096$953$3,649$9,698 Segment income(1).$756$207$83$1,046 _(1)Segment revenues for reportable business segments exclude net realized investment gains(losses)and revenues included in“interest expense and other.”Segment income for reportable business segments excludes the after-tax impact of net realized investment gains(losses)and income(loss)from“interest expense and other.”THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited),Continued2.SEGMENT INFORMATION,Continued9Business Segment Reconciliations Three Months EndedMarch 31,(in millions)20242023Revenue reconciliation Earned premiums Business Insurance:Domestic:Workers compensation .$880$850 Commercial automobile .860 761 Commercial property .873 709 General liability.847 760 Commercial multi-peril .1,270 1,100 Other .17 18 Total Domestic .4,747 4,198 International .413 279 Total Business Insurance .5,160 4,477 Bond&Specialty Insurance:Domestic:Fidelity and surety .340 306 General liability.426 398 Other .56 54 Total Domestic .822 758 International .134 117 Total Bond&Specialty Insurance .956 875 Personal Insurance:Domestic:Automobile .1,874 1,624 Homeowners and Other .1,972 1,724 Total Domestic .3,846 3,348 International .164 154 Total Personal Insurance .4,010 3,502 Total earned premiums .10,126 8,854 Net investment income .846 663 Fee income .109 106 Other revenues .112 75 Total segment revenues .11,193 9,698 Net realized investment gains .35 6 Total revenues .$11,228$9,704 Income reconciliation,net of tax Total segment income .$1,179$1,046 Interest Expense and Other(1).(83)(76)Core income .1,096 970 Net realized investment gains .27 5 Net income .$1,123$975 _(1)The primary component of Interest Expense and Other was after-tax interest expense of$77 million and$70 million for the three months ended March 31,2024 and 2023,respectively.THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited),Continued2.SEGMENT INFORMATION,Continued10(in millions)March 31,2024December 31,2023Asset reconciliation Business Insurance .$94,393$93,565 Bond&Specialty Insurance .12,136 11,478 Personal Insurance .20,003 20,072 Total assets by reportable segment .126,532 125,115 Other assets(1).878 863 Total consolidated assets .$127,410$125,978 _(1)The primary components of other assets at both March 31,2024 and December 31,2023 were the over-funded benefit plan assets related to the Companys qualified domestic pension plan and other intangible assets.3.INVESTMENTSFixed MaturitiesThe amortized cost and fair value of investments in fixed maturities classified as available for sale were as follows:Amortized CostAllowance for Expected Credit LossesGross UnrealizedFair Value(at March 31,2024,in millions)GainsLossesU.S.Treasury securities and obligations of U.S.government and government agencies and authorities .$6,489$1$250$6,240 Obligations of U.S.states,municipalities and political subdivisions:Local general obligation .18,138 41 1,455 16,724 Revenue .9,419 27 700 8,746 State general obligation .1,156 3 67 1,092 Pre-refunded .952 2 4 950 Total obligations of U.S.states,municipalities and political subdivisions.29,665 73 2,226 27,512 Debt securities issued by foreign governments .970 1 32 939 Mortgage-backed securities,collateralized mortgage obligations and pass-through securities .9,076 68 224 8,920 Corporate and all other bonds .36,512 3 103 2,232 34,380 Total .$82,712$3$246$4,964$77,991 THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited),Continued2.SEGMENT INFORMATION,Continued11 Amortized CostAllowance for Expected Credit LossesGross UnrealizedFair Value(at December 31,2023,in millions)GainsLossesU.S.Treasury securities and obligations of U.S.government and government agencies and authorities .$6,591$8$231$6,368 Obligations of U.S.states,municipalities and political subdivisions:Local general obligation .18,374 90 1,265 17,199 Revenue .9,748 52 616 9,184 State general obligation .1,209 7 59 1,157 Pre-refunded .963 5 2 966 Total obligations of U.S.states,municipalities and political subdivisions .30,294 154 1,942 28,506 Debt securities issued by foreign governments .1,035 2 31 1,006 Mortgage-backed securities,collateralized mortgage obligations and pass-through securities .7,874 120 176 7,818 Corporate and all other bonds .35,987 5 187 2,060 34,109 Total .$81,781$5$471$4,440$77,807 Pre-refunded bonds of$950 million and$966 million at March 31,2024 and December 31,2023,respectively,were bonds for which U.S.states or municipalities have established irrevocable trusts that are almost exclusively comprised of U.S.Treasury securities and obligations of U.S.government and government agencies and authorities.These trusts were created to fund the payment of principal and interest due under the bonds.Proceeds from the sales of fixed maturities classified as available for sale were$942 million and$2.36 billion during the three months ended March 31,2024 and 2023,respectively.Gross gains of$2 million and$17 million and gross losses of$39 million and$27 million were realized on those sales during the three months ended March 31,2024 and 2023,respectively.Equity SecuritiesThe cost and fair value of investments in equity securities were as follows:(at March 31,2024,in millions)CostGross GainsGross LossesFair ValueCommon stock .$512$142$13$641 Non-redeemable preferred stock .45 3 48 Total .$557$145$13$689(at December 31,2023,in millions)CostGross GainsGross LossesFair ValueCommon stock .$508$93$41$560 Non-redeemable preferred stock .45 3 48 Total .$553$96$41$608 For the three months ended March 31,2024 and 2023,the Company recognized$79 million and$17 million of net gains on equity securities still held as of March 31,2024 and 2023,respectively.THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited),Continued3.INVESTMENTS,Continued12Unrealized Investment LossesThe following tables summarize,for all fixed maturities classified as available for sale in an unrealized loss position at March 31,2024 and December 31,2023,the aggregate fair value and gross unrealized loss by the length of time those securities have been continuously in an unrealized loss position.The fair value amounts reported in the tables are estimates that are prepared using the process described in note 4 herein and in note 4 of the notes to the consolidated financial statements in the Companys 2023 Annual Report.The Company also relies upon estimates of several factors in its review and evaluation of individual investments,using the process described in note 1 of the notes to the consolidated financial statements in the Companys 2023 Annual Report to determine whether a credit loss impairment exists.Less than 12 months12 months or longerTotal(at March 31,2024,in millions)FairValueGrossUnrealizedLossesFairValueGrossUnrealizedLossesFairValueGrossUnrealizedLossesFixed maturities U.S.Treasury securities and obligations of U.S.government and government agencies and authorities .$2,866$17$2,869$233$5,735$250 Obligations of U.S.states,municipalities and political subdivisions .6,958 67 15,198 2,159 22,156 2,226 Debt securities issued by foreign governments .134 1 696 31 830 32 Mortgage-backed securities,collateralized mortgage obligations and pass-through securities .3,106 29 1,689 195 4,795 224 Corporate and all other bonds .2,957 28 25,668 2,204 28,625 2,232 Total .$16,021$142$46,120$4,822$62,141$4,964 Less than 12 months12 months or longerTotal(at December 31,2023,in millions)FairValueGrossUnrealizedLossesFairValueGrossUnrealizedLossesFairValueGrossUnrealizedLossesFixed maturities U.S.Treasury securities and obligations of U.S.government and government agencies and authorities .$1,864$7$2,985$224$4,849$231 Obligations of U.S.states,municipalities and political subdivisions .3,868 31 14,351 1,911 18,219 1,942 Debt securities issued by foreign governments 30 763 31 793 31 Mortgage-backed securities,collateralized mortgage obligations and pass-through securities .1,215 9 1,433 167 2,648 176 Corporate and all other bonds .1,016 9 26,444 2,051 27,460 2,060 Total .$7,993$56$45,976$4,384$53,969$4,440 THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited),Continued3.INVESTMENTS,Continued13The following tables summarize,for all fixed maturities reported at fair value for which fair value was less than 80%of amortized cost at March 31,2024 and December 31,2023,the gross unrealized investment loss by length of time those securities have continuously been in an unrealized loss position of greater than 20%of amortized cost:Period For Which Fair Value is Less Than 80%of Amortized Cost(at March 31,2024,in millions)3 months or lessGreater than 3 months,6 months or lessGreater than 6 months,12 months or lessGreater than 12 monthsTotalFixed maturitiesU.S.Treasury securities and obligations of U.S.government and government agencies and authorities .$Obligations of U.S.states,municipalities and political subdivisions .224 8 708 940 Debt securities issued by foreign governments .Mortgage-backed securities,collateralized mortgage obligations and pass-through securities .44 44 Corporate and all other bonds .41 2 1 23 67 Total .$309$2$9$731$1,051 Period For Which Fair Value is Less Than 80%of Amortized Cost(at December 31,2023,in millions)3 months or lessGreater than 3 months,6 months or lessGreater than 6 months,12 months or lessGreater than 12 monthsTotalFixed maturitiesU.S.Treasury securities and obligations of U.S.government and government agencies and authorities .$Obligations of U.S.states,municipalities and political subdivisions .2 31 642 675 Debt securities issued by foreign governments .Mortgage-backed securities,collateralized mortgage obligations and pass-through securities .Corporate and all other bonds .1 3 22 25 51 Total .$1$5$53$667$726 Increases in interest rates resulted in the gross unrealized investment losses disclosed in the tables above;however,the net unrealized loss is considered temporary in nature as the decrease in value is not due to credit impairments and there is no impact on expected contractual cash flows from fixed maturities.THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited),Continued3.INVESTMENTS,Continued14Impairment ChargesThe following table presents changes in the allowance for expected credit losses on fixed maturities classified as available for sale for the category of Corporate and All Other Bonds(no other categories of fixed maturities currently have an allowance for expected credit losses):Fixed MaturitiesCorporate and All Other BondsAt and For the Three Months Ended(in millions)March 31,2024 March 31,2023Balance,beginning of period .$5$3 Additions for expected credit losses on securities where no credit losses were previously recognized .3 Additions for expected credit losses on securities where credit losses were previously recognized .1 Reductions due to sales/defaults of credit-impaired securities .(5)Reductions for impairments of securities which the Company intends to sell or more likely than not will be required to sell .Balance,end of period .$3$4 Total net impairment charges,including credit impairments,reported in net realized investment gains in the consolidated statement of income,were$3 million and$1 million for the three months ended March 31,2024 and 2023,respectively.Credit losses related to the fixed maturity portfolio for both the three months ended March 31,2024 and 2023 represented less than 1%of the fixed maturity portfolio on a pre-tax basis and less than 1%of shareholders equity on an after-tax basis.Other InvestmentsIncluded in other investments are private equity,hedge fund and real estate partnerships that are accounted for under the equity method of accounting and typically report their financial statement information to the Company one month to three months following the end of the reporting period.Accordingly,net investment income from these other investments is generally reflected in the Companys financial statements on a quarter lag basis.4.FAIR VALUE MEASUREMENTSThe Companys estimates of fair value for financial assets and financial liabilities are based on the framework established in the fair value accounting guidance.The framework is based on the inputs used in valuation,gives the highest priority to quoted prices in active markets and requires that observable inputs be used in the valuations when available.The disclosure of fair value estimates in the fair value accounting guidance hierarchy is based on whether the significant inputs into the valuation are observable.In determining the level of the hierarchy in which the estimate is disclosed,the highest priority is given to unadjusted quoted prices in active markets and the lowest priority to unobservable inputs that reflect the Companys significant market assumptions.The level in the fair value hierarchy within which the fair value measurement is reported is based on the lowest level input that is significant to the measurement in its entirety.The three levels of the hierarchy are as follows:Level 1-Unadjusted quoted market prices for identical assets or liabilities in active markets that the Company has the ability to access.Level 2-Quoted prices for similar assets or liabilities in active markets;quoted prices for identical or similar assets or liabilities in inactive markets;or valuations based on models where the significant inputs are observable(e.g.,interest rates,yield curves,prepayment speeds,default rates,loss severities,etc.)or can be corroborated by observable market data.Level 3-Valuations based on models where significant inputs are not observable.The unobservable inputs reflect the Companys own assumptions about the inputs that market participants would use.THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited),Continued3.INVESTMENTS,Continued15Valuation of Investments Reported at Fair Value in Financial StatementsThe Company utilized a pricing service to estimate fair value measurements for approximately 99%of its fixed maturities at both March 31,2024 and December 31,2023.While the vast majority of the Companys fixed maturities are included in Level 2,the Company holds a number of corporate bonds which are not valued by the pricing service and estimates the fair value of these bonds using either another internal pricing matrix,a present value income approach,or a broker quote(collectively,the other methodologies).The other methodologies include some unobservable inputs that are significant to the valuation.Due to the limited amount of observable market information available in the estimation of fair value,the Company includes the fair value estimates for bonds that are valued using the other methodologies in Level 3.For certain investments in non-public common and preferred equity securities,the fair value estimate is determined either internally or by an external fund manager based on the impact of recent observable transactions on the investment,recent filings,operating results,balance sheet stability,growth and other business and market sector fundamentals.Due to the significant unobservable inputs in these valuations,the Company included the fair value estimate of$37 million for these investments at both March 31,2024 and December 31,2023 in the amounts disclosed in Level 3.For more information regarding the valuation of the Companys fixed maturities,equity securities and other investments,see note 4 of the notes to the consolidated financial statements in the Companys 2023 Annual Report.Fair Value HierarchyThe following tables present the level within the fair value hierarchy at which the Companys financial assets and financial liabilities are measured on a recurring basis.(at March 31,2024,in millions)TotalLevel 1Level 2Level 3Invested assets:Fixed maturities U.S.Treasury securities and obligations of U.S.government and government agencies and authorities .$6,240$6,240$Obligations of U.S.states,municipalities and political subdivisions .27,512 27,512 Debt securities issued by foreign governments .939 939 Mortgage-backed securities,collateralized mortgage obligations and pass-through securities .8,920 8,899 21 Corporate and all other bonds .34,380 34,125 255 Total fixed maturities .77,991 6,240 71,475 276 Equity securities Common stock .641 634 7 Non-redeemable preferred stock .48 15 3 30 Total equity securities .689 649 3 37 Other investments .18 18 Total .$78,698$6,907$71,478$313 THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited),Continued4.FAIR VALUE MEASUREMENTS,Continued16(at December 31,2023,in millions)TotalLevel 1Level 2Level 3Invested assets:Fixed maturities U.S.Treasury securities and obligations of U.S.government and government agencies and authorities .$6,368$6,368$Obligations of U.S.states,municipalities and political subdivisions .28,506 28,506 Debt securities issued by foreign governments .1,006 1,006 Mortgage-backed securities,collateralized mortgage obligations and pass-through securities .7,818 7,818 Corporate and all other bonds .34,109 33,851 258 Total fixed maturities .77,807 6,368 71,181 258 Equity securities Common stock .560 553 7 Non-redeemable preferred stock .48 16 2 30 Total equity securities .608 569 2 37 Other investments .18 18 Total .$78,433$6,955$71,183$295 There was no significant activity in Level 3 of the hierarchy during the three months ended March 31,2024.Financial Instruments Disclosed,But Not Carried,At Fair ValueThe following tables present the carrying value and fair value of the Companys financial assets and financial liabilities disclosed,but not carried,at fair value,and the level within the fair value hierarchy at which such assets and liabilities are categorized.(at March 31,2024,in millions)CarryingValueFairValueLevel 1Level 2Level 3Financial assets Short-term securities .$4,682$4,682$999$3,634$49 Financial liabilities Debt .$7,932$7,406$7,406$Commercial paper .100 100 100 (at December 31,2023,in millions)CarryingValueFairValueLevel 1Level 2Level 3Financial assets Short-term securities .$5,137$5,137$1,171$3,912$54 Financial liabilities Debt .$7,931$7,645$7,645$Commercial paper .100 100 100 The Company had no material assets or liabilities that were measured at fair value on a non-recurring basis during the three months ended March 31,2024 or the year ended December 31,2023.THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited),Continued4.FAIR VALUE MEASUREMENTS,Continued175.ALLOWANCE FOR EXPECTED CREDIT LOSSESPremiums ReceivableThe following table presents the balances of premiums receivable,net of the allowance for expected credit losses,at March 31,2024 and 2023,and the changes in the allowance for expected credit losses for the three months ended March 31,2024 and 2023.At and For the Three Months Ended March 31,2024At and For the Three Months Ended March 31,2023(in millions)Premiums Receivable,Net of Allowance for Expected Credit LossesAllowance for Expected Credit LossesPremiums Receivable,Net of Allowance for Expected Credit LossesAllowance for Expected Credit Losses Balance,beginning of period .$10,282$69$8,922$77 Current period change for expected credit losses .12 10 Write-offs of uncollectible premiums receivable .13 10 Balance,end of period .$10,829$68$9,483$77 Reinsurance RecoverablesThe following table presents the balances of reinsurance recoverables,net of the allowance for estimated uncollectible reinsurance,at March 31,2024 and 2023,and the changes in the allowance for estimated uncollectible reinsurance for the three months ended March 31,2024 and 2023.At and For the Three Months Ended March 31,2024At and For the Three Months Ended March 31,2023(in millions)Reinsurance Recoverables,Net of Allowance for Estimated Uncollectible ReinsuranceAllowance for Estimated Uncollectible ReinsuranceReinsurance Recoverables,Net of Allowance for Estimated Uncollectible ReinsuranceAllowance for Estimated Uncollectible Reinsurance Balance,beginning of period .$8,143$118$8,063$132 Current period change for estimated uncollectible reinsurance .(1)(1)Write-offs of uncollectible reinsurance recoverables .Balance,end of period .$8,100$117$8,091$131 Of the total reinsurance recoverables at March 31,2024,$5.70 billion,or 87%,were rated by A.M.Best Company,after deducting mandatory pools and associations and before allowances for estimated uncollectible reinsurance.The Company utilizes updated A.M.Best credit ratings on a quarterly basis when determining the allowance.Of the total rated by A.M.Best Company,94%were rated A-or better.The remaining 13%of reinsurance recoverables comprised the following:6%related to captive insurance companies,1%related to the Companys participation in voluntary pools and 6%were balances from other companies not rated by A.M.Best Company.Certain of the Companys reinsurance recoverables are collateralized by letters of credit,funds held or trust agreements.THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited),Continued18Contractholder ReceivablesThe following table presents the balances of contractholder receivables,net of the allowance for expected credit losses,at March 31,2024 and 2023,and the changes in the allowance for expected credit losses for the three months ended March 31,2024 and 2023.At and For the Three Months Ended March 31,2024At and For the Three Months Ended March 31,2023(in millions)Contractholder Receivables,Net of Allowance for Expected Credit LossesAllowance for Expected Credit LossesContractholder Receivables,Net of Allowance for Expected Credit LossesAllowance for Expected Credit Losses Balance,beginning of period .$3,249$20$3,579$17 Current period change for expected credit losses .(1)2 Write-offs of uncollectible contractholder receivables .Balance,end of period .$3,266$19$3,598$19 6.GOODWILL AND OTHER INTANGIBLE ASSETSGoodwillThe following table presents the carrying amount of the Companys goodwill by segment.Each reportable segment includes goodwill associated with the Companys international business which is subject to the impact of changes in foreign currency exchange rates.(in millions)March 31,2024December 31,2023Business Insurance .$2,579$2,585 Bond&Specialty Insurance(1).835 550 Personal Insurance .811 815 Other .26 26 Total .$4,251$3,976 _(1)Goodwill at March 31,2024 included$285 million associated with the acquisition of Corvus in the first quarter of 2024,which is primarily attributable to Corvuss cyber underwriting and support capabilities and workforce,and it is not deductible for tax purposes.THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited),Continued5.ALLOWANCE FOR EXPECTED CREDIT LOSSES,Continued19Other Intangible AssetsThe following tables present a summary of the Companys other intangible assets by major asset class.(at March 31,2024,in millions)GrossCarryingAmountAccumulatedAmortizationNetSubject to amortization Customer-related(1).$186$63$123 Contract-based(2).204 194 10 Marketing-related(3).18 1 17 Total subject to amortization .408 258 150 Not subject to amortization .226 226 Total .$634$258$376(at December 31,2023,in millions)GrossCarryingAmountAccumulatedAmortizationNetSubject to amortization Customer-related .$100$59$41 Contract-based(2).204 194 10 Total subject to amortization .304 253 51 Not subject to amortization .226 226 Total .$530$253$277 _(1)Customer-related intangibles of$87 million were recorded in connection with the acquisition of Corvus in the first quarter of 2024.The customer-related intangible assets include Corvuss broker and policyholder relationships and were valued using the excess earnings method income approach,a valuation technique that provides an estimate of fair value based on the cash flows that the asset can be expected to generate over its remaining useful life.Broker relationships represent the relationships Corvus has with its existing brokers through which new business is placed with policyholders.Policyholder relationships represent the renewal of existing policies.Significant inputs to the fair valuation include estimates of revenue growth,broker retention rates,policyholder attrition rates and weighted average cost of capital.(2)Contract-based intangible assets subject to amortization are comprised of fair value adjustments on claims and claim adjustment expense reserves,reinsurance recoverables and other contract-related intangible assets.Fair value adjustments recorded in connection with insurance acquisitions were based on managements estimate of nominal claims and claim adjustment expense reserves and reinsurance recoverables.The method used calculated a risk adjustment to a risk-free discounted reserve that would,if reserves ran off as expected,produce results that yielded the assumed cost-of-capital on the capital supporting the loss reserves.The fair value adjustments are reported as other intangible assets on the consolidated balance sheet,and the amounts measured in accordance with the acquirers accounting policies for insurance contracts have been reported as part of the claims and claim adjustment expense reserves and reinsurance recoverables.The intangible assets are being recognized into income over the expected payment pattern.Because the time value of money and the risk adjustment(cost of capital)components of the intangible assets run off at different rates,the amount recognized in income may be a net benefit in some periods and a net expense in other periods.(3)Marketing-related intangibles of$18 million were recorded in connection with the acquisition of Corvus in the first quarter of 2024.The marketing-related intangible assets include trade names and a non-compete agreement.The trade names were valued using a relief from royalty method,a valuation technique which estimates the fair value of an asset based on the present value of the royalties saved because the company owns the asset.Significant inputs to the fair valuation include estimates of future revenue,appropriate rates of return associated with certain assets and weighted average cost of capital.The fair value of the non-compete agreement is based on an estimate of the income that would be lost if the agreement were not in place and the individual chose to compete.Significant inputs to the fair valuation include estimates of projected cash flows and weighted average cost of capital.THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited),Continued6.GOODWILL AND OTHER INTANGIBLE ASSETS,Continued20The following table presents a summary of the other intangible assets recorded in connection with the acquisition of Corvus by major asset class as of the acquisition date.(in millions)AmountWeighted Average Amortization PeriodSubject to amortizationCustomer-related .$87 14 yearsMarketing-related .18 7 yearsTotal .$105 13 years7.INSURANCE CLAIM RESERVESClaims and claim adjustment expense reserves were as follows:(in millions)March 31,2024December 31,2023Property-casualty .$62,482$61,621 Accident and health .5 6 Total .$62,487$61,627 The following table presents a reconciliation of beginning and ending property casualty reserve balances for claims and claim adjustment expenses:Three Months Ended March 31,(in millions)20242023Claims and claim adjustment expense reserves at beginning of year .$61,621$58,643 Less reinsurance recoverables on unpaid losses .7,817 7,790 Net reserves at beginning of year .53,804 50,853 Estimated claims and claim adjustment expenses for claims arising in the current year .6,679 6,025 Estimated decrease in claims and claim adjustment expenses for claims arising in prior years .(49)(90)Total increases .6,630 5,935 Claims and claim adjustment expense payments for claims arising in:Current year .1,275 1,177 Prior years .4,435 4,382 Total payments .5,710 5,559 Unrealized foreign exchange(gain)loss .(61)28 Net reserves at end of period .54,663 51,257 Plus reinsurance recoverables on unpaid losses .7,819 7,801 Claims and claim adjustment expense reserves at end of period .$62,482$59,058 Gross claims and claim adjustment expense reserves at March 31,2024 increased by$861 million from December 31,2023,primarily reflecting the impacts of(i)catastrophe losses in the first three months of 2024,(ii)higher volumes of insured exposures and(iii)loss cost trends for the current accident year,partially offset by(iv)claim payments made during the first three months of 2024 and(v)net favorable prior year reserve development.Reinsurance recoverables on unpaid losses at March 31,2024 increased by$2 million from December 31,2023.THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited),Continued6.GOODWILL AND OTHER INTANGIBLE ASSETS,Continued21Prior Year Reserve DevelopmentThe following disclosures regarding reserve development are on a“net of reinsurance”basis.For the three months ended March 31,2024 and 2023,estimated claims and claim adjustment expenses incurred included$49 million and$90 million,respectively,of net favorable development for claims arising in prior years,including$91 million and$105 million,respectively,of net favorable prior year reserve development,and$11 million of accretion of discount in each period.Business Insurance.There was no net prior year reserve development in the first quarter of 2024,as better than expected loss experience in the domestic operations workers compensation product line for multiple accident years was offset primarily by higher than expected loss experience in the general liability product line for recent accident years,as well as an addition to reserves related to run-off operations.Net favorable prior year reserve development in the first quarter of 2023 totaled$19 million,primarily driven by better than expected loss experience in the domestic operations workers compensation product line for multiple accident years,partially offset by higher than expected loss experience in the general liability product line for excess coverages for multiple accident years.Bond&Specialty Insurance.Net favorable prior year reserve development in the first quarter of 2024 totaled$24 million,primarily driven by better than expected loss experience in multiple product lines within domestic operations.Net favorable prior year reserve development in the first quarter of 2023 totaled$58 million,primarily driven by better than expected loss experience in the domestic operations fidelity and surety product lines and in the general liability product line for management liability coverages for recent accident years.Personal Insurance.Net favorable prior year reserve development in the first quarter of 2024 totaled$67 million,primarily driven by better than expected loss experience in the domestic operations automobile product line for recent accident years.Net favorable prior year reserve development in the first quarter of 2023 totaled$28 million,primarily driven by better than expected loss experience in the domestic operations homeowners and other product line for recent accident years.8.OTHER COMPREHENSIVE INCOME(LOSS)AND ACCUMULATED OTHER COMPREHENSIVE INCOME(LOSS)The following table presents the changes in the Companys accumulated other comprehensive income(loss)(AOCI)for the three months ended March 31,2024.Changes in Net Unrealized Gains(Losses)on Investment Securities (in millions)Having No CreditLosses Recognized inthe ConsolidatedStatement of IncomeHaving Credit Losses Recognized in the ConsolidatedStatement of IncomeNet Benefit Plan Assets andObligationsRecognized inShareholders EquityNet UnrealizedForeign CurrencyTranslationTotal AccumulatedOtherComprehensiveIncome(Loss)Balance,December 31,2023 .$(3,309)$180$(458)$(884)$(4,471)Other comprehensive income(loss)(OCI)before reclassifications,net of tax .(626)2 (67)(691)Amounts reclassified from AOCI,net of tax .32 (1)31 Net OCI,current period .(594)2 (1)(67)(660)Balance,March 31,2024 .$(3,903)$182$(459)$(951)$(5,131)THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited),Continued7.INSURANCE CLAIM RESERVES,Continued22The following table presents the pre-tax components of the Companys other comprehensive income(loss)and the related income tax expense(benefit).Three Months EndedMarch 31,(in millions)20242023Changes in net unrealized losses on investment securities:Having no credit losses recognized in the consolidated statement of income .$(752)$1,308 Income tax expense(benefit).(158)278 Net of taxes .(594)1,030 Having credit losses recognized in the consolidated statement of income .2 Income tax expense .Net of taxes .2 Net changes in benefit plan assets and obligations .(1)(3)Income tax expense(benefit).(1)Net of taxes .(1)(2)Net changes in unrealized foreign currency translation .(71)37 Income tax expense(benefit).(4)6 Net of taxes .(67)31 Total other comprehensive income(loss).(822)1,342 Total income tax expense(benefit).(162)283 Total other comprehensive income(loss),net of taxes .$(660)$1,059 THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited),Continued8.OTHER COMPREHENSIVE INCOME(LOSS)AND ACCUMULATED OTHER COMPREHENSIVE INCOME(LOSS),Continued23The following table presents the pre-tax and related income tax(expense)benefit components of the amounts reclassified from the Companys AOCI to the Companys consolidated statement of income.Three Months EndedMarch 31,(in millions)20242023Reclassification adjustments related to unrealized gains(losses)on investment securities:Having no credit losses recognized in the consolidated statement of income(1).$40$11 Income tax benefit(2).8 2 Net of taxes .32 9 Having credit losses recognized in the consolidated statement of income(1).Income tax benefit(2).Net of taxes .Reclassification adjustment related to benefit plan assets and obligations:Claims and claim adjustment expenses(benefit)(3).(1)General and administrative expenses(benefit)(3).(1)(2)Total .(1)(3)Income tax(expense)benefit(2).Net of taxes .(1)(3)Reclassification adjustment related to foreign currency translation(1).Income tax benefit(2).Net of taxes .Total reclassifications .39 8 Total income tax benefit .8 2 Total reclassifications,net of taxes .$31$6 _(1)(Increases)decreases net realized investment gains on the consolidated statement of income.(2)(Increases)decreases income tax expense(benefit)on the consolidated statement of income.(3)Increases(decreases)expenses on the consolidated statement of income.9.COMMON SHARE REPURCHASESDuring the three months ended March 31,2024,the Company repurchased 1.2 million common shares under its share repurchase authorizations for a total cost of$250 million.The average cost per share repurchased was$217.31.In addition,the Company acquired 0.6 million common shares for a total cost of$138 million during the three months ended March 31,2024 that were not part of its publicly announced share repurchase authorizations.These shares consisted of shares retained to cover payroll withholding taxes in connection with the vesting of restricted stock unit awards and performance share awards,and shares used by employees to cover the exercise price,as well as the related payroll withholding taxes,with respect to certain stock options that were exercised.Included in the cost of treasury stock acquired pursuant to common share repurchases is the 1%excise tax imposed on common share repurchase activity,net of common share issuances,as part of the Inflation Reduction Act of 2022.During the three months ended March 31,2024,there was no net excise tax included in the cost of treasury stock acquired,as common share issuances exceeded common share repurchase activity.At March 31,2024,the Company had$5.79 billion of capacity remaining under its share repurchase authorizations.THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited),Continued8.OTHER COMPREHENSIVE INCOME(LOSS)AND ACCUMULATED OTHER COMPREHENSIVE INCOME(LOSS),Continued2410.EARNINGS PER SHAREThe following is a reconciliation of the income and share data used in the basic and diluted earnings per share computations for the periods presented:Three Months EndedMarch 31,(in millions,except per share amounts)20242023Basic and DilutedNet income,as reported .$1,123$975 Participating share-based awards allocated income .(8)(7)Net income available to common shareholders basic and diluted .$1,115$968 Common SharesBasicWeighted average shares outstanding .229.0 231.7 DilutedWeighted average shares outstanding .229.0 231.7 Weighted average effects of dilutive securities stock options and performance shares .3.0 2.7 Total .232.0 234.4 Net Income per Common ShareBasic .$4.87$4.18 Diluted .$4.80$4.13 11.SHARE-BASED INCENTIVE COMPENSATIONThe following information relates to fully vested stock option awards at March 31,2024:Stock OptionsNumberWeightedAverageExercisePriceWeightedAverageContractualLifeRemainingAggregateIntrinsicValue($in millions)Vested at end of period(1).6,832,710$146.39 6.0 years$572 Exercisable at end of period .5,162,950$132.57 5.1 years$504 _(1)Represents awards for which the requisite service has been rendered,including those that are retirement eligible.The total compensation cost for all share-based incentive compensation awards recognized in earnings was$79 million and$69 million for the three months ended March 31,2024 and 2023,respectively.The related tax benefits recognized in earnings were$12 million and$11 million for the three months ended March 31,2024 and 2023,respectively.The total unrecognized compensation cost related to all nonvested share-based incentive compensation awards at March 31,2024 was$380 million,which is expected to be recognized over a weighted-average period of 2.2 years.THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited),Continued2512.PENSION PLANS,RETIREMENT BENEFITS AND SAVINGS PLANSThe following table summarizes the components of net periodic benefit cost(benefit)for the Companys pension and postretirement benefit plans recognized in the consolidated statement of income for the three months ended March 31,2024 and 2023.Pension PlansPostretirement Benefit Plans(for the three months ended March 31,in millions)2024202320242023Net Periodic Benefit Cost(Benefit):Service cost .$29$27$Non-service cost(benefit):Interest cost on benefit obligation .43 44 1 1 Expected return on plan assets .(75)(78)Amortization of unrecognized:Prior service benefit .(1)(1)Net actuarial(gain)loss .2 (2)(2)Total non-service cost(benefit).(30)(34)(2)(2)Net periodic benefit cost(benefit).$(1)$(7)$(2)$(2)The following table indicates the line items in which the respective service cost and non-service cost(benefit)are presented in the consolidated statement of income for the three months ended March 31,2024 and 2023.Pension PlansPostretirement Benefit Plans(for the three months ended March 31,in millions)2024202320242023Service Cost:Claims and claim adjustment expenses .$11$11$General and administrative expenses .18 16 Total service cost .29 27 Non-Service Cost(Benefit):Claims and claim adjustment expenses .(12)(14)(1)(1)General and administrative expenses .(18)(20)(1)(1)Total non-service cost(benefit).(30)(34)(2)(2)Net periodic benefit cost(benefit).$(1)$(7)$(2)$(2)13.LEASESThe Company enters into lease agreements for real estate that is primarily used for office space in the ordinary course of business.These leases are accounted for as operating leases,whereby lease expense is recognized on a straight-line basis over the term of the lease,and a right-of-use asset and lease liability is recognized as part of other assets and other liabilities,respectively,in the consolidated balance sheet.Most leases include an option to extend or renew the lease term.The exercise of the renewal option is at the Companys discretion.The operating lease liability includes lease payments related to options to extend or renew the lease term if the Company is reasonably certain of exercising those options.The Company,in determining the present value of lease payments,utilizes either the rate implicit in the lease,if that rate is readily determinable,or the Companys incremental secured borrowing rate commensurate with the term of the underlying lease.THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited),Continued26Lease expense is included in general and administrative expenses in the consolidated statement of income.Additional information regarding the Companys real estate operating leases is as follows:Three Months EndedMarch 31,(in millions)20242023Lease costOperating leases .$19$19 Short-term leases(1).1 1 Lease expense .20 20 Less:sublease income(2).Net lease cost .$20$20 Other information on operating leasesCash payments to settle a lease liability reported in cash flows .$22$21 Right-of-use assets obtained in exchange for new lease liabilities .$10$10 Weighted average discount rate .2.91%2.44%Weighted average remaining lease term .4.1 years4.4 years_(1)Leases with a term of twelve months or less are not recorded on the consolidated balance sheet.(2)Sublease income consists of rent from third parties of office space and is recognized as part of other revenues in the consolidated statement of income.14.CONTINGENCIES,COMMITMENTS AND GUARANTEESContingenciesThe major pending legal proceedings,other than ordinary routine litigation incidental to the business,to which the Company or any of its subsidiaries is a party or to which any of the Companys properties is subject are described below.Asbestos and Environmental Claims and LitigationIn the ordinary course of its insurance business,the Company has received and continues to receive claims for insurance arising under policies issued by the Company asserting alleged injuries and damages from asbestos-and environmental-related exposures that are the subject of related coverage litigation.The Company is defending asbestos-and environmental-related litigation vigorously and believes that it has meritorious defenses;however,the outcomes of these disputes are uncertain.In this regard,the Company employs dedicated specialists and comprehensive resolution strategies to manage asbestos and environmental loss exposure,including settling litigation under appropriate circumstances.Currently,it is not possible to predict legal outcomes and their impact on future loss development for claims and litigation relating to asbestos and environmental claims.Any such development could be affected by future court decisions and interpretations,as well as future changes,if any,in applicable legislation.Because of these uncertainties,additional liabilities may arise for amounts in excess of the Companys current insurance reserves.In addition,the Companys estimate of ultimate claims and claim adjustment expenses may change.These additional liabilities or changes in estimates,or a range of either,cannot now be reasonably estimated and could result in income statement charges that could be material to the Companys results of operations in future periods.Other Proceedings Not Arising Under Insurance Contracts or Reinsurance AgreementsThe Company is involved in other lawsuits,including lawsuits alleging extra-contractual damages relating to insurance contracts or reinsurance agreements,that do not arise under insurance contracts or reinsurance agreements.The legal costs associated with such lawsuits are expensed in the period in which the costs are incurred.Based upon currently available information,the Company does not believe it is reasonably possible that any such lawsuit or related lawsuits would be material to the Companys results of operations or would have a material adverse effect on the Companys financial position or liquidity.THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited),Continued13.LEASES,Continued27Other Commitments and GuaranteesCommitmentsInvestment Commitments The Company has unfunded commitments to private equity limited partnerships,real estate partnerships and other investments.These commitments totaled$1.59 billion and$2.05 billion at March 31,2024 and December 31,2023,respectively.GuaranteesThe maximum amount of the Companys contingent obligation for indemnifications related to the sale of businesses that are quantifiable was$351 million at March 31,2024.The maximum amount of the Companys obligation related to the guarantee of certain insurance policy obligations of a former insurance subsidiary was$480 million at March 31,2024,all of which is indemnified by a third party.For more information regarding the Companys guarantees,see note 17 of the notes to the consolidated financial statements in the Companys 2023 Annual Report.THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited),Continued14.CONTINGENCIES,COMMITMENTS AND GUARANTEES,Continued28THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESItem 2.MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe following is a discussion and analysis of the Companys financial condition and results of operations.FINANCIAL HIGHLIGHTS2024 First Quarter Consolidated Results of OperationsNet income of$1.12 billion,or$4.87 per share basic and$4.80 per share dilutedNet earned premiums of$10.13 billionCatastrophe losses of$712 million($563 million after-tax)Net favorable prior year reserve development of$91 million($71 million after-tax)Combined ratio of 93.9%Net investment income of$846 million($698 million after-tax)Net realized investment gains of$35 million($27 million after-tax)Operating cash flows of$1.46 billion2024 First Quarter Consolidated Financial ConditionTotal investments of$88.66 billion;fixed maturities and short-term securities comprised 93%of total investmentsTotal assets of$127.41 billionTotal debt of$8.03 billion,resulting in a debt-to-total capital ratio of 24.3%(21.8%excluding net unrealized investment losses,net of tax)Total capital returned to shareholders of$620 million,comprising$388 million of share repurchases and$232 million of dividendsShareholders equity of$25.02 billionNet unrealized investment losses of$4.72 billion($3.72 billion after-tax)Book value per common share of$109.28Holding company liquidity of$1.62 billion 29CONSOLIDATED OVERVIEWConsolidated Results of Operations Three Months EndedMarch 31,(in millions,except ratio and per share amounts)20242023Revenues Premiums .$10,126$8,854 Net investment income .846 663 Fee income .109 106 Net realized investment gains .35 6 Other revenues .112 75 Total revenues .11,228 9,704 Claims and expenses Claims and claim adjustment expenses .6,656 5,959 Amortization of deferred acquisition costs .1,698 1,462 General and administrative expenses.1,406 1,267 Interest expense .98 88 Total claims and expenses .9,858 8,776 Income before income taxes .1,370 928 Income tax expense(benefit).247 (47)Net income .$1,123$975 Net income per share Basic .$4.87$4.18 Diluted.$4.80$4.13 Combined ratio Loss and loss adjustment expense ratio .65.2f.7%Underwriting expense ratio .28.7 28.7 Combined ratio .93.9.4%The following discussions of the Companys net income and segment income are presented on an after-tax basis.Discussions of the components of net income and segment income are presented on a pre-tax basis,unless otherwise noted.Discussions of net income per common share are presented on a diluted basis.OverviewDiluted net income per share of$4.80 in the first quarter of 2024 increased by 16%over diluted net income per share of$4.13 in the same period of 2023.Net income of$1.12 billion in the first quarter of 2024 increased by 15%over net income of$975 million in the same period of 2023.The higher rate of increase in diluted net income per share reflected the impact of share repurchases in recent periods.The increase in income before income taxes in the first quarter of 2024 primarily reflected the pre-tax impacts of(i)higher underwriting margins excluding catastrophe losses and prior year reserve development(“underlying underwriting margins”)and(ii)higher net investment income,partially offset by(iii)higher catastrophe losses.Catastrophe losses in the first quarters of 2024 and 2023 were$712 million and$535 million,respectively.Net favorable prior year reserve development in the first quarters of 2024 and 2023 was$91 million and$105 million,respectively.The higher underlying underwriting margins in the first quarter of 2024 were driven by Personal Insurance,Business Insurance and Bond&Specialty Insurance.The Company recorded income tax expense in the first quarter of 2024 compared with an income tax benefit in the same period of 2023.The change in income taxes primarily reflected a one-time tax benefit of$211 million in the first quarter of 2023 due to the expiration of the statute of limitations with respect to a tax item and impact of the increase in income before income taxes.The Company has insurance operations in Canada,the United Kingdom,the Republic of Ireland and throughout other parts of the world as a corporate member of Lloyds,as well as in Brazil and Colombia through joint ventures.Because these operations are conducted in local currencies other than the U.S.dollar,the Company is subject to changes in foreign currency THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIES MANAGEMENTS DISCUSSION AND ANALYSIS,Continued30exchange rates.For the three months ended March 31,2024 and 2023,changes in foreign currency exchange rates impacted reported line items in the statement of income by insignificant amounts.The impact of these changes was not material to the Companys net income or segment income for the periods reported.RevenuesEarned PremiumsEarned premiums in the first quarter of 2024 were$10.13 billion,$1.27 billion or 14%higher than in the same period of 2023.In Business Insurance,earned premiums in the first quarter of 2024 increased by 15%over the same period of 2023.In Bond&Specialty Insurance,earned premiums in the first quarter of 2024 increased by 9%over the same period of 2023.In Personal Insurance,earned premiums in the first quarter of 2024 increased by 15%over the same period of 2023.Factors contributing to the changes in earned premiums in each segment are discussed in more detail in the segment discussions that follow.Net Investment IncomeThe following table sets forth information regarding the Companys investments.Three Months EndedMarch 31,(dollars in millions)20242023Average investments(1).$94,677$88,740 Pre-tax net investment income .846 663 After-tax net investment income .698 557 Average pre-tax yield(2).3.6%3.0%Average after-tax yield(2).2.9%2.5%_(1)Excludes net unrealized investment gains and losses and reflects cash,receivables for investment sales,payables on investment purchases and accrued investment income.(2)Excludes net realized and net unrealized investment gains and losses.Net investment income in the first quarter of 2024 was$846 million,$183 million or 28%higher than in the same period of 2023.Net investment income from fixed maturity investments in the first quarter of 2024 was$692 million,$117 million higher than in the same period of 2023.The increase primarily resulted from higher long-term average yields and a higher average level of fixed maturity investments.Net investment income from short-term securities in the first quarter of 2024 was$70 million,$23 million higher than in the same period of 2023.The increase primarily resulted from higher short-term average yields.The Companys remaining investment portfolios had net investment income of$98 million in the first quarter of 2024,$45 million higher than in the same period of 2023,primarily reflecting higher private equity partnership returns.Included in other investments are private equity,hedge fund and real estate partnerships that are accounted for under the equity method of accounting and typically report their financial statement information to the Company one month to three months following the end of the reporting period.Accordingly,net investment income from these other investments is generally reflected in the Companys financial statements on a quarter lag basis.Fee IncomeFee income in the first quarter of 2024 was$109 million,$3 million higher than in the same period of 2023.The National Accounts market in Business Insurance is the primary source of the Companys fee-based business and is discussed in the Business Insurance segment discussion that follows.THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIES MANAGEMENTS DISCUSSION AND ANALYSIS,Continued31Net Realized Investment Gains(Losses)The following table sets forth information regarding the Companys net realized investment gains(losses).Three Months EndedMarch 31,(in millions)20242023Impairment losses:Fixed maturities .$(3)$(1)Net realized investment gains on equity securities still held .79 17 Other net realized investment gains(losses),including from sales .(41)(10)Total .$35$6 Net realized investment gains on equity securities still held of$79 million and$17 million in the first quarters of 2024 and 2023,respectively,were both driven by the impact of changes in fair value attributable to favorable equity markets.Other RevenuesOther revenues in the first quarter of 2024 were$112 million,$37 million higher than in the same period of 2023.Other revenues include revenues from Simply Business,installment premium charges and other policyholder service charges.Claims and ExpensesClaims and Claim Adjustment ExpensesClaims and claim adjustment expenses in the first quarter of 2024 were$6.66 billion,$697 million or 12%higher than in the same period of 2023,primarily reflecting the impacts of(i)higher business volumes,(ii)higher catastrophe losses and(iii)other loss activity in Business Insurance,partially offset by(iv)loss activity related to the disruption in the banking sector in the prior year quarter in Bond&Specialty Insurance.Catastrophe losses in the first quarter of 2024 primarily resulted from severe wind and hail storms in the central and eastern regions of the United States.Catastrophe losses in the first quarter of 2023 primarily resulted from severe wind and hail storms in multiple states.Factors contributing to net prior year reserve development during the first quarters of 2024 and 2023 are discussed in more detail in note 7 of the notes to the unaudited consolidated financial statements.Significant Catastrophe LossesThe following table presents the amount of losses recorded by the Company for significant catastrophes that occurred in the three months ended March 31,2024 and 2023,the amount of net unfavorable(favorable)prior year reserve development recognized in the three months ended March 31,2024 and 2023 for significant catastrophes that occurred in 2023 and 2022,and the estimate of ultimate losses for those catastrophes at March 31,2024 and December 31,2023.For purposes of the table,a significant catastrophe is an event for which the Company estimates its ultimate losses will be$100 million or more after reinsurance and before taxes.The Companys threshold for disclosing catastrophes is primarily determined at the reportable segment level and for 2024 ranged from$20 million to$30 million of losses before reinsurance and taxes.For the Companys definition of a catastrophe,refer to“Part IIItem 7Managements Discussion and Analysis of Financial Condition and Results of Operations Consolidated Overview”in the Companys 2023 Annual Report.THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIES MANAGEMENTS DISCUSSION AND ANALYSIS,Continued32 Losses Incurred/Unfavorable(Favorable)Prior Year Reserve Development Three Months EndedMarch 31,Estimated Ultimate Losses(in millions,pre-tax and net of reinsurance)(1)20242023March 31,2024December 31,20232022PCS Serial Number:33 Severe wind and hail storms .1 (7)139 13835 Severe wind and hail storms .2 (2)186 18443 Severe wind and hail storms .1 (10)117 11661 Hurricane Ian .(2)(53)149 15173 Winter storm .5 143 675 6702023PCS Serial Number:25 Severe wind and hail storms .(2)148 151 15332 Severe wind and hail storms .1 119 141 14033 Severe wind and hail storms .n/a 199 19935 Severe wind and hail storms .(2)n/a 138 14038 Severe wind and hail storms .n/a 110 11042 Severe wind and hail storms .9 n/a 142 13348 Severe wind and hail storms .n/a 150 15049 Severe wind and hail storms .(1)n/a 132 13351 Severe wind and hail storms .n/a 265 26563 Severe wind and hail storms .n/a 125 12575 Severe wind and hail storms .1 n/a 191 1902024PCS Serial Number:26 Severe wind and hail storms .259 n/a 259 n/a_n/a:not applicable.(1)Amounts are reported pre-tax and net of recoveries under all applicable reinsurance treaties,except for the Companys 2022 Underlying Property Aggregate Catastrophe Excess-of-Loss Treaty,the terms of which are described in“Part IItem 1Business”in the Companys 2022 Annual Report.The treaty covered the accumulation of certain property losses arising from one or multiple occurrences(both catastrophe and non-catastrophe events)for the period January 1,2022 through and including December 31,2022.As a result,the benefits from those treaties are not included in the table above as the allocation of the treatys benefit to each identified catastrophe changes each time there are additional events or changes in estimated losses from any covered event.Amortization of Deferred Acquisition CostsAmortization of deferred acquisition costs in the first quarter of 2024 was$1.70 billion,$236 million or 16%higher than in the same period of 2023,generally consistent with the increase in earned premiums.Amortization of deferred acquisition costs is discussed in more detail in the segment discussions that follow.General and Administrative ExpensesGeneral and administrative expenses in the first quarter of 2024 were$1.41 billion,$139 million or 11%higher than in the same period of 2023,primarily reflecting the impact of costs associated with higher business volumes.General and administrative expenses are discussed in more detail in the segment discussions that follow.Interest ExpenseInterest expense in the first quarter of 2024 was$98 million,compared with$88 million in the same period of 2023.THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIES MANAGEMENTS DISCUSSION AND ANALYSIS,Continued33Income Tax Expense(Benefit)Income tax expense in the first quarter of 2024 was$247 million,compared with an income tax benefit of$47 million in the same period of 2023.The change in income taxes primarily reflected the one-time tax benefit of$211 million in the first quarter of 2023 due to the expiration of the statute of limitations with respect to a tax item and the impact of the$442 million increase in income before income taxes in the first quarter of 2024.The Companys effective tax rate was 18%and(5)%in the first quarters of 2024 and 2023,respectively.The effective tax rate in the first quarter of 2023 was reduced by the impact of the one-time tax benefit discussed above.The effective tax rate for all periods reflected the impact of tax-exempt investment income on the calculation of the Companys income tax provision.Combined RatioThe combined ratio of 93.9%in the first quarter of 2024 was 1.5 points lower than the combined ratio of 95.4%in the same period of 2023.The loss and loss adjustment expense ratio of 65.2%in the first quarter of 2024 was 1.5 points lower than the loss and loss adjustment expense ratio of 66.7%in the same period of 2023.The underwriting expense ratio of 28.7%in the first quarter of 2024 was comparable with the underwriting expense ratio in the same period of 2023.Catastrophe losses in the first quarters of 2024 and 2023 accounted for 7.1 points and 6.0 points,respectively,of the combined ratio.Net favorable prior year reserve development in the first quarters of 2024 and 2023 provided 0.9 points and 1.2 points of benefit,respectively,to the combined ratio.The combined ratio excluding prior year reserve development and catastrophe losses(“underlying combined ratio”)in the first quarter of 2024 was 2.9 points lower than the 2023 ratio on the same basis,primarily reflecting the impact of the benefit of earned pricing.The combined ratio continues to be impacted by the tort environment,including more aggressive attorney involvement in insurance claims.Written PremiumsConsolidated gross and net written premiums were as follows:Gross Written Premiums Three Months EndedMarch 31,(in millions)20242023Business Insurance .$6,383$5,828 Bond&Specialty Insurance .1,076 1,010 Personal Insurance .3,851 3,509 Total .$11,310$10,347 Net Written Premiums Three Months EndedMarch 31,(in millions)20242023Business Insurance .$5,596$5,157 Bond&Specialty Insurance .943 886 Personal Insurance .3,643 3,353 Total .$10,182$9,396 Gross and net written premiums in the first quarter of 2024 increased by 9%and 8%,respectively,over the same period of 2023.Factors contributing to the changes in gross and net written premiums in each segment are discussed in more detail in the segment discussions that follow.THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIES MANAGEMENTS DISCUSSION AND ANALYSIS,Continued34RESULTS OF OPERATIONS BY SEGMENTBusiness InsuranceResults of Business Insurance were as follows:Three Months EndedMarch 31,(dollars in millions)20242023Revenues Earned premiums .$5,160$4,477 Net investment income .609 473 Fee income .101 99 Other revenues .77 47 Total revenues .5,947 5,096 Total claims and expenses .5,013 4,383 Segment income before income taxes .934 713 Income tax expense(benefit).170 (43)Segment income .$764$756 Loss and loss adjustment expense ratio .63.6c.8%Underwriting expense ratio .29.7 29.8 Combined ratio.93.3.6%OverviewSegment income in the first quarter of 2024 was$764 million,$8 million or 1%higher than segment income of$756 million in the same period of 2023.The increase in segment income before income taxes primarily reflected the pre-tax impacts of(i)higher net investment income and(ii)higher underlying underwriting margins,partially offset by(iii)no net prior year reserve development in the first quarter of 2024,compared with net favorable prior year reserve development of$19 million in the same period of 2023.Catastrophe losses in the first quarters of 2024 and 2023 were$209 million and$199 million,respectively.The higher underlying underwriting margins primarily reflected the impacts of(i)higher business volumes and(ii)the benefit of earned pricing,partially offset by(iii)other loss activity.The segment recorded income tax expense in the first quarter of 2024,compared with an income tax benefit in the first quarter of 2023.The change in income taxes primarily reflected a one-time tax benefit of$171 million in the first quarter of 2023 due to the expiration of the statute of limitations with respect to a tax item and the impact of the increase in segment income before income taxes.RevenuesEarned PremiumsEarned premiums in the first quarter of 2024 were$5.16 billion,$683 million or 15%higher than in the same period of 2023,primarily reflecting the increase in net written premiums over the preceding twelve months.Net Investment IncomeNet investment income in the first quarter of 2024 was$609 million,$136 million or 29%higher than in the same period of 2023.Refer to the“RevenuesNet Investment Income”section of the“Consolidated Results of Operations”discussion herein for a description of the factors contributing to the increase in the Companys consolidated net investment income in the first quarter of 2024 compared with the same period of 2023.In addition,refer to note 2 of the notes to the consolidated financial statements in the Companys 2023 Annual Report for a discussion of the Companys net investment income allocation methodology.Fee IncomeNational Accounts is the primary source of fee income due to revenue from its large deductible policies and service businesses,which include risk management,claims administration,loss control and risk management information services provided to third parties,as well as policy issuance and claims management services to workers compensation residual market pools.Fee income in the first quarter of 2024 was$101 million,$2 million or 2%higher than in the same period of 2023.THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIES MANAGEMENTS DISCUSSION AND ANALYSIS,Continued35Other RevenuesOther revenues in the first quarter of 2024 were$77 million,$30 million higher than in the same period of 2023.Other revenues include revenues from Simply Business,installment premium charges and other policyholder service charges.Claims and ExpensesClaims and Claim Adjustment ExpensesClaims and claim adjustment expenses in the first quarter of 2024 were$3.33 billion,$424 million or 15%higher than in the same period of 2023,primarily reflecting the impacts of(i)higher business volumes,(ii)loss cost trends and(iii)other loss activity.Factors contributing to net prior year reserve development during the first quarters of 2024 and 2023 are discussed in more detail in note 7 of the notes to the unaudited consolidated financial statements.Amortization of Deferred Acquisition CostsAmortization of deferred acquisition costs in the first quarter of 2024 was$864 million,$122 million or 16%higher than the same period of 2023,generally consistent with the increase in earned premiums.General and Administrative ExpensesGeneral and administrative expenses in the first quarter of 2024 were$818 million,$84 million or 11%higher than in the same period of 2023,primarily in support of business growth.Income Tax Expense(Benefit)Income tax expense in the first quarter of 2024 was$170 million,compared with an income tax benefit of$43 million in the same period of 2023.The change in income taxes primarily reflected the one-time tax benefit of$171 million in the first quarter of 2023 due to the expiration of the statute of limitations with respect to a tax item and the impact of the$221 million increase in income before income taxes.Combined RatioThe combined ratio of 93.3%in the first quarter of 2024 was 0.3 points lower than the combined ratio of 93.6%in the same period of 2023.The loss and loss adjustment expense ratio of 63.6%in the first quarter of 2024 was 0.2 points lower than the loss and loss adjustment expense ratio of 63.8%in the same period of 2023.The underwriting expense ratio of 29.7%in the first quarter of 2024 was 0.1 points lower than the underwriting expense ratio of 29.8%in the same period of 2023.Catastrophe losses in the first quarters of 2024 and 2023 accounted for 4.1 points and 4.4 points,respectively,of the combined ratio.There was no net prior year reserve development in the first quarter of 2024.Net favorable prior year reserve development in the first quarter 2023 provided 0.4 points of benefit to the combined ratio.The underlying combined ratio in the first quarter of 2024 was 0.4 points lower than the 2023 ratio on the same basis.Written PremiumsBusiness Insurances gross and net written premiums by market were as follows:Gross Written Premiums Three Months EndedMarch 31,(in millions)20242023Domestic:Select Accounts .$1,004$924 Middle Market .3,452 3,129 National Accounts .527 493 National Property and Other .851 747 Total Domestic .5,834 5,293 International .549 535 Total Business Insurance .$6,383$5,828 THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIES MANAGEMENTS DISCUSSION AND ANALYSIS,Continued36 Net Written Premiums Three Months EndedMarch 31,(in millions)20242023Domestic:Select Accounts .$974$908 Middle Market .3,213 2,926 National Accounts .327 294 National Property and Other .642 590 Total Domestic .5,156 4,718 International .440 439 Total Business Insurance .$5,596$5,157 Gross and net written premiums in the first quarter of 2024 increased by 10%and 9%,respectively,over the same period of 2023.Select Accounts.Net written premiums of$974 million in the first quarter of 2024 increased by 7%over the same period of 2023.Retention rates remained strong in the first quarter of 2024 but decreased slightly from the same period of 2023.Renewal premium changes in the first quarter of 2024 remained positive and were higher than the same period of 2023.New business premiums in the first quarter of 2024 increased over the same period of 2023.Middle Market.Net written premiums of$3.21 billion in the first quarter of 2024 increased by 10%over the same period of 2023.Retention rates remained strong in the first quarter of 2024 but decreased from the same period of 2023.Renewal premium changes in the first quarter of 2024 remained positive and were higher than the same period of 2023.New business premiums in the first quarter of 2024 decreased from the same period of 2023.National Accounts.Net written premiums of$327 million in the first quarter of 2024 increased by 11%over the same period of 2023.Retention rates remained strong in the first quarter of 2024 and increased over the same period of 2023.Renewal premium changes in the first quarter of 2024 remained positive but were slightly lower than the same period of 2023.New business premiums in the first quarter of 2024 increased over the same period of 2023.National Property and Other.Net written premiums of$642 million in the first quarter of 2024 increased by 9%over the same period of 2023.Retention rates remained strong in the first quarter of 2024 but decreased slightly from the same period of 2023.Renewal premium changes in the first quarter of 2024 remained positive but were lower than in the same period of 2023.New business premiums in the first quarter of 2024 increased over the same period of 2023.International.Net written premiums of$440 million in the first quarter of 2024 were comparable with the same period of 2023.THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIES MANAGEMENTS DISCUSSION AND ANALYSIS,Continued37Bond&Specialty InsuranceResults of Bond&Specialty Insurance were as follows:Three Months EndedMarch 31,(dollars in millions)20242023Revenues Earned premiums .$956$875 Net investment income .90 73 Other revenues .9 5 Total revenues .1,055 953 Total claims and expenses .815 705 Segment income before income taxes .240 248 Income tax expense .45 41 Segment income .$195$207 Loss and loss adjustment expense ratio .44.4C.0%Underwriting expense ratio .40.1 37.0 Combined ratio.84.5.0%OverviewSegment income in the first quarter of 2024 was$195 million,$12 million or 6%lower than segment income of$207 million in the same period of 2023.The decrease in segment income before income taxes primarily reflected the pre-tax impacts of(i)lower net favorable prior year reserve development,partially offset by(ii)higher net investment income and(iii)higher underlying underwriting margins.Net favorable prior year reserve development in the first quarters of 2024 and 2023 was$24 million and$58 million,respectively.Catastrophe losses in the first quarters of both 2024 and 2023 were$5 million.The higher underlying underwriting margins primarily reflected the impacts of(i)higher business volumes and(ii)loss activity related to the disruption in the banking sector in the prior year quarter,partially offset by(iii)higher general and administrative expenses.Income tax expense in the first quarter of 2024 was higher than in the same period of 2023,primarily reflecting a one-time tax benefit of$9 million in the first quarter of 2023 due to the expiration of the statute of limitations with respect to a tax item,partially offset by the impact of the decrease in segment income before income taxes.RevenuesEarned PremiumsEarned premiums in the first quarter of 2024 were$956 million,$81 million or 9%higher than in the same period of 2023,primarily reflecting increases in net written premiums in prior quarters,including the impact of longer duration surety bonds and multi-year management liability policies.Net Investment IncomeNet investment income in the first quarter of 2024 was$90 million,$17 million or 23%higher than in the same period of 2023.Included in Bond&Specialty Insurance are certain legal entities whose invested assets and related net investment income are reported exclusively in this segment and not allocated among all business segments.Refer to the“RevenuesNet Investment Income”section of“Consolidated Results of Operations”herein for a discussion of the factors contributing to the increase in the Companys consolidated net investment income in the first quarter of 2024 compared with the same period of 2023.In addition,refer to note 2 of the notes to the consolidated financial statements in the Companys 2023 Annual Report for a discussion of the Companys net investment income allocation methodology.Claims and ExpensesClaims and Claim Adjustment ExpensesClaims and claim adjustment expenses in the first quarter of 2024 were$428 million,$48 million or 13%higher than in the same period of 2023,primarily reflecting the impacts of(i)higher business volumes and(ii)lower net favorable prior year reserve development,partially offset by(iii)loss activity related to the disruption in the banking sector in the prior year quarter.THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIES MANAGEMENTS DISCUSSION AND ANALYSIS,Continued38Factors contributing to net favorable prior year reserve development during the first quarters of 2024 and 2023 are discussed in more detail in note 7 of the notes to the unaudited consolidated financial statements.Amortization of Deferred Acquisition CostsAmortization of deferred acquisition costs in the first quarter of 2024 was$182 million,$22 million or 14%higher than in the same period of 2023,generally consistent with the increase in earned premiums.General and Administrative ExpensesGeneral and administrative expenses in the first quarter of 2024 were$205 million,$40 million or 24%higher than in the same period of 2023,primarily reflecting the acquisition of Corvus,as well as higher employee and technology related expenses.Income Tax ExpenseIncome tax expense in the first quarter of 2024 was$45 million,$4 million or 10%higher than in the same period of 2023,primarily reflecting the one-time tax benefit of$9 million in the first quarter of 2023 due to the expiration of the statute of limitations with respect to a tax item,partially offset by the impact of the$8 million decrease in segment income before income taxes.Combined RatioThe combined ratio of 84.5%in the first quarter of 2024 was 4.5 points higher than the combined ratio of 80.0%in the same period of 2023.The loss and loss adjustment expense ratio of 44.4%in the first quarter of 2024 was 1.4 points higher than the loss and loss adjustment expense ratio of 43.0%in the same period of 2023.The underwriting expense ratio of 40.1%in the first quarter of 2024 was 3.1 points higher than the underwriting expense ratio of 37.0%in the same period of 2023.Net favorable prior year reserve development in the first quarters of 2024 and 2023 provided 2.5 points and 6.7 points of benefit,respectively,to the combined ratio.Catastrophe losses in the first quarters of 2024 and 2023 accounted for 0.5 points and 0.6 points,respectively,of the combined ratio.The underlying combined ratio in the first quarter of 2024 was 0.4 points higher than the 2023 ratio on the same basis.Written PremiumsThe Bond&Specialty Insurance segments gross and net written premiums were as follows:Gross Written Premiums Three Months EndedMarch 31,(in millions)20242023Domestic:Management Liability .$611$564 Surety .349 303 Total Domestic .960 867 International .116 143 Total Bond&Specialty Insurance .$1,076$1,010 Net Written Premiums Three Months EndedMarch 31,(in millions)20242023Domestic:Management Liability .$543$511 Surety .296 257 Total Domestic .839 768 International .104 118 Total Bond&Specialty Insurance .$943$886 THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIES MANAGEMENTS DISCUSSION AND ANALYSIS,Continued39Gross and net written premiums in the first quarter of 2024 increased by 7%and 6%,respectively,over the same period of 2023.Domestic.Net written premiums of$839 million in the first quarter of 2024 increased by 9%over the same period of 2023.Excluding the surety line of business,for which the following are not relevant measures,retention rates remained strong in the first quarter of 2024 and increased slightly over the same period of 2023.Renewal premium changes in the first quarter of 2024 remained positive but were lower than in the same period of 2023.New business premiums in the first quarter of 2024 increased over the same period of 2023.International.Net written premiums of$104 million in the first quarter of 2024 decreased by 12%from the same period of 2023,primarily driven by decreases in the United Kingdom and broader Europe.Personal InsuranceResults of Personal Insurance were as follows:Three Months EndedMarch 31,(dollars in millions)20242023Revenues Earned premiums .$4,010$3,502 Net investment income .147 117 Fee income .8 7 Other revenues .26 23 Total revenues .4,191 3,649 Total claims and expenses .3,924 3,591 Segment income before income taxes .267 58 Income tax expense(benefit).47 (25)Segment income .$220$83 Loss and loss adjustment expense ratio .72.2v.3%Underwriting expense ratio .24.7 25.2 Combined ratio.96.91.5%OverviewSegment income in the first quarter of 2024 was$220 million,$137 million or 165%higher than in the same period of 2023.The increase in segment income before income taxes was driven by the pre-tax impacts of(i)higher underlying underwriting margins,(ii)higher net favorable prior year reserve development and(iii)higher net investment income,partially offset by(iv)higher catastrophe losses.Catastrophe losses in the first quarters of 2024 and 2023 were$498 million and$331 million,respectively.Net favorable prior year reserve development in the first quarters of 2024 and 2023 was$67 million and$28 million,respectively.The higher underlying underwriting margins primarily reflected the impacts of(i)the benefit of earned pricing in both the automobile and homeowners and other product lines and(ii)higher business volumes.The segment recorded income tax expense in the first quarter of 2024 compared with an income tax benefit in the same period of 2023.The change in income taxes primarily reflected the impact of the increase in segment income before income taxes and a one-time tax benefit of$31 million in the first quarter of 2023 due to the expiration of the statute of limitations with respect to a tax item.RevenuesEarned PremiumsEarned premiums in the first quarter of 2024 were$4.01 billion,$508 million or 15%higher than in the same period of 2023,primarily reflecting the increase in net written premiums over the preceding twelve months.THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIES MANAGEMENTS DISCUSSION AND ANALYSIS,Continued40Net Investment IncomeNet investment income in the first quarter of 2024 was$147 million,$30 million or 26%higher than in the same period of 2023.Refer to the“RevenuesNet Investment Income”section of the“Consolidated Results of Operations”discussion herein for a description of the factors contributing to the increase in the Companys consolidated net investment income in the first quarter of 2024 compared with the same period of 2023.In addition,refer to note 2 of the notes to the consolidated financial statements in the Companys 2023 Annual Report for a discussion of the Companys net investment income allocation methodology.Other RevenuesOther revenues in the first quarters of 2024 and 2023 primarily consisted of installment premium charges.Claims and ExpensesClaims and Claim Adjustment ExpensesClaims and claim adjustment expenses in the first quarter of 2024 were$2.90 billion,$225 million or 8%higher than in the same period of 2023,primarily reflecting the impacts of(i)higher business volumes,(ii)higher catastrophe losses and(iii)loss cost trends,partially offset by(iv)higher net favorable prior year reserve development.Factors contributing to net favorable prior year reserve development during the first quarters of 2024 and 2023 are discussed in more detail in note 7 of the notes to the unaudited consolidated financial statements.Amortization of Deferred Acquisition CostsAmortization of deferred acquisition costs in the first quarter of 2024 was$652 million,$92 million or 16%higher than in the same period of 2023,generally consistent with the increase in earned premiums.General and Administrative ExpensesGeneral and administrative expenses in the first quarter of 2024 were$375 million,$16 million or 4%higher than in the same period of 2023,primarily reflecting higher employee and technology related expenses.Income Tax Expense(Benefit)The segment recorded income tax expense of$47 million in the first quarter of 2024,compared with an income tax benefit of$25 million in the same period of 2023.The change in income taxes primarily reflected the impact of the$209 million increase in segment income before income taxes and the one-time tax benefit of$31 million in the first quarter of 2023 due to the expiration of the statute of limitations with respect to a tax item.Combined RatioThe combined ratio of 96.9%in the first quarter of 2024 was 4.6 points lower than the combined ratio of 101.5%in the same period of 2023.The loss and loss adjustment expense ratio of 72.2%in the first quarter of 2024 was 4.1 points lower than the loss and loss adjustment expense ratio of 76.3%in the same period of 2023.The underwriting expense ratio of 24.7%in the first quarter of 2024 was 0.5 points lower than the underwriting expense ratio of 25.2%in the same period of 2023.Catastrophe losses in the first quarters of 2024 and 2023 accounted for 12.4 points and 9.4 points,respectively,of the combined ratio.Net favorable prior year reserve development in the first quarters of 2024 and 2023 provided 1.6 points and 0.8 points of benefit,respectively,to the combined ratio.The underlying combined ratio in the first quarter of 2024 was 6.8 points lower than the 2023 ratio on the same basis,primarily reflecting the impact of the benefit of earned pricing in both the automobile and homeowners and other product lines.THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIES MANAGEMENTS DISCUSSION AND ANALYSIS,Continued41Written PremiumsPersonal Insurances gross and net written premiums were as follows:Gross Written Premiums Three Months EndedMarch 31,(in millions)20242023Domestic:Automobile .$1,867$1,661 Homeowners and Other .1,831 1,711 Total Domestic .3,698 3,372 International .153 137 Total Personal Insurance .$3,851$3,509 Net Written Premiums Three Months EndedMarch 31,(in millions)20242023Domestic:Automobile .$1,859$1,654 Homeowners and Other .1,635 1,565 Total Domestic .3,494 3,219 International .149 134 Total Personal Insurance .$3,643$3,353 Gross and net written premiums in the first quarter of 2024 increased by 10%and 9%,respectively,over the same period of 2023.DomesticAutomobile net written premiums of$1.86 billion in the first quarter of 2024 increased by 12%over the same period of 2023.Retention rates remained strong in the first quarter of 2024 and were comparable with the same period of 2023.Renewal premium changes in the first quarter of 2024 remained positive and were higher than in the same period of 2023.New business premiums in the first quarter of 2024 increased slightly over the same period of 2023.Homeowners and Other net written premiums of$1.64 billion in the first quarter of 2024 increased by 4%over the same periods of 2023.Retention rates remained strong in the first quarter of 2024 and were comparable with the same period of 2023.Renewal premium changes in the first quarter of 2024 remained positive but were lower than in the same period of 2023.New business premiums in the first quarter of 2024 decreased from the same period of 2023.For its Domestic business,Personal Insurance had approximately 9.0 million and 9.2 million active policies at March 31,2024 and 2023,respectively.InternationalInternational net written premiums of$149 million in the first quarter of 2024 increased by 11%over the same period of 2023,driven by increases in the automobile product line.For its International business,Personal Insurance had approximately 450,000 and 448,000 active policies at March 31,2024 and 2023,respectively.THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIES MANAGEMENTS DISCUSSION AND ANALYSIS,Continued42Interest Expense and Other Three Months EndedMarch 31,(in millions)20242023Income(loss).$(83)$(76)The Income(loss)for Interest
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UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549_FORM 10-Q _ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended September 30,2024 or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from _ to _ Commission file number:001-10898 _The Travelers Companies,Inc.(Exact name of registrant as specified in its charter)_Minnesota 41-0518860(State or other jurisdiction ofincorporation or organization)(I.R.S.EmployerIdentification No.)485 Lexington Avenue New York,NY 10017(Address of principal executive offices)(Zip Code)(917)778-6000(Registrants telephone number,including area code)_Securities registered pursuant to Section 12(b)of the Act:Title of each class Trading Symbol(s)Name of each exchange on which registeredCommon stock,without par value TRV New York Stock ExchangeIndicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant was required to file such reports),and(2)has been subject to such filing requirements for the past 90 days.Yes No o Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period that the registrant was required to submit such files).Yes No o Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting company,or an emerging growth company.See the definitions of“large accelerated filer,”“accelerated filer,”“smaller reporting company,”and“emerging growth company”in Rule 12b-2 of the Exchange Act.Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting companyEmerging growth companyIf an emerging growth company,indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a)of the Exchange Act.oIndicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act).Yes No The number of shares of the Registrants Common Stock,without par value,outstanding at October 14,2024 was 227,018,963.The Travelers Companies,Inc.Quarterly Report on Form 10-Q For Quarterly Period Ended September 30,2024 _ TABLE OF CONTENTS Page Part I Financial Information Item 1.Financial Statements:Consolidated Statement of Income(Unaudited)Three and Nine Months Ended September 30,2024 and 2023 .3 Consolidated Statement of Comprehensive Income(Loss)(Unaudited)Three and Nine Months Ended September 30,2024 and 2023 .4 Consolidated Balance Sheet September 30,2024(Unaudited)and December 31,2023 .5 Consolidated Statement of Changes in Shareholders Equity(Unaudited)Three and Nine Months Ended September 30,2024 and 2023 .6 .Consolidated Statement of Cash Flows(Unaudited)Nine Months Ended September 30,2024 and 2023 .7 Notes to Consolidated Financial Statements(Unaudited).8 .Item 2.Managements Discussion and Analysis of Financial Condition and Results of Operations .33 .Item 3.Quantitative and Qualitative Disclosures About Market Risk .66 .Item 4.Controls and Procedures .66 Part II Other Information Item 1.Legal Proceedings .67 .Item 1A.Risk Factors .67 .Item 2.Unregistered Sales of Equity Securities and Use of Proceeds .67 .Item 5.Other Information .68 .Item 6.Exhibits .68 .SIGNATURES .69 2PART 1 FINANCIAL INFORMATION Item 1.FINANCIAL STATEMENTS THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESCONSOLIDATED STATEMENT OF INCOME(Unaudited)(in millions,except per share amounts)Three Months EndedSeptember 30,Nine Months EndedSeptember 30,2024202320242023RevenuesPremiums .$10,704$9,718$31,073$27,788 Net investment income .904 769 2,635 2,144 Fee income .121 112 345 324 Net realized investment gains(losses).55 (65)25 (94)Other revenues .120 101 337 275 Total revenues .11,904 10,635 34,415 30,437 Claims and expensesClaims and claim adjustment expenses .6,996 7,149 21,025 20,335 Amortization of deferred acquisition costs .1,790 1,604 5,166 4,585 General and administrative expenses .1,460 1,312 4,344 3,887 Interest expense .98 98 294 278 Total claims and expenses .10,344 10,163 30,829 29,085 Income before income taxes.1,560 472 3,586 1,352 Income tax expense(benefit).300 68 669 (13)Net income .$1,260$404$2,917$1,365 Net income per shareBasic .$5.50$1.75$12.68$5.89 Diluted .$5.42$1.74$12.51$5.83 Weighted average number of common shares outstandingBasic .227.4 228.8 228.3 230.0 Diluted .230.6 231.1 231.3 232.5 Cash dividends declared per common share .$1.05$1.00$3.10$2.93 The accompanying notes are an integral part of the consolidated financial statements.3THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESCONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME(LOSS)(Unaudited)(in millions)Three Months EndedSeptember 30,Nine Months EndedSeptember 30,2024202320242023Net income .$1,260$404$2,917$1,365 Other comprehensive income(loss):Changes in net unrealized gains(losses)on investment securities:Having no credit losses recognized in the consolidated statement of income .2,370 (2,391)1,294 (1,986)Having credit losses recognized in the consolidated statement of income .1 4 Net changes in benefit plan assets and obligations .(1)(3)(4)(10)Net changes in unrealized foreign currency translation .120 (118)24 13 Other comprehensive income(loss)before income taxes .2,490 (2,512)1,318 (1,983)Income tax expense(benefit).513 (509)280 (416)Other comprehensive income(loss),net of taxes .1,977 (2,003)1,038 (1,567)Comprehensive income(loss).$3,237$(1,599)$3,955$(202)The accompanying notes are an integral part of the consolidated financial statements.4THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESCONSOLIDATED BALANCE SHEET(in millions)September 30,2024December 31,2023(Unaudited)AssetsFixed maturities,available for sale,at fair value(amortized cost$86,657 and$81,781;allowance for expected credit losses of$0 and$5).$83,985$77,807 Equity securities,at fair value (cost$547 and$553).702 608 Real estate investments .901 959 Short-term securities .5,482 5,137 Other investments .4,380 4,299 Total investments .95,450 88,810 Cash .772 650 Investment income accrued .665 688 Premiums receivable(net of allowance for expected credit losses of$70 and$69).11,271 10,282 Reinsurance recoverables(net of allowance for estimated uncollectible reinsurance of$120 and$118).8,075 8,143 Ceded unearned premiums .1,502 1,150 Deferred acquisition costs .3,579 3,306 Deferred taxes .1,336 1,504 Contractholder receivables(net of allowance for expected credit losses of$18 and$20).3,292 3,249 Goodwill .4,273 3,976 Other intangible assets .368 277 Other assets .4,005 3,943 Total assets .$134,588$125,978 Liabilities Claims and claim adjustment expense reserves .$64,746$61,627 Unearned premium reserves .22,783 20,872 Contractholder payables .3,310 3,269 Payables for reinsurance premiums .921 518 Debt .8,033 8,031 Other liabilities .7,099 6,740 Total liabilities .106,892 101,057 Shareholders equity Common stock(1,750.0 shares authorized;227.0 and 228.2 shares issued and outstanding).25,339 24,906 Retained earnings .47,789 45,591 Accumulated other comprehensive loss .(3,433)(4,471)Treasury stock,at cost(563.3 and 559.2 shares).(41,999)(41,105)Total shareholders equity .27,696 24,921 Total liabilities and shareholders equity .$134,588$125,978 The accompanying notes are an integral part of the consolidated financial statements.5THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESCONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY(Unaudited)(in millions)Three Months EndedSeptember 30,Nine Months EndedSeptember 30,2024202320242023Common stock Balance,beginning of period .$25,245$24,776$24,906$24,565 Employee share-based compensation .31 8 231 102 Compensation amortization under share-based plans and other changes .63 47 202 164 Balance,end of period .25,339 24,831 25,339 24,831 Retained earnings Balance,beginning of period .46,773 44,026 45,591 43,516 Net income .1,260 404 2,917 1,365 Dividends .(243)(232)(720)(683)Other .(1)1 Balance,end of period .47,789 44,198 47,789 44,198 Accumulated other comprehensive income(loss),net of tax Balance,beginning of period .(5,410)(6,009)(4,471)(6,445)Other comprehensive income(loss).1,977 (2,003)1,038 (1,567)Balance,end of period .(3,433)(8,012)(3,433)(8,012)Treasury stock,at cost Balance,beginning of period .(41,746)(40,938)(41,105)(40,076)Treasury stock acquired share repurchase authorizations .(250)(100)(750)(900)Net shares acquired related to employee share-based compensation plans .(3)(1)(144)(63)Balance,end of period .(41,999)(41,039)(41,999)(41,039)Total shareholders equity .$27,696$19,978$27,696$19,978 Common shares outstanding Balance,beginning of period .227.9 228.9 228.2 232.1 Treasury stock acquired share repurchase authorizations .(1.1)(0.6)(3.4)(5.0)Net shares issued under employee share-based compensation plans .0.2 0.1 2.2 1.3 Balance,end of period .227.0 228.4 227.0 228.4 The accompanying notes are an integral part of the consolidated financial statements.6THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESCONSOLIDATED STATEMENT OF CASH FLOWS(Unaudited)(in millions)Nine Months Ended September 30,20242023Cash flows from operating activities Net income .$2,917$1,365 Adjustments to reconcile net income to net cash provided by operating activities:.Net realized investment(gains)losses .(25)94 Depreciation and amortization .552 552 Deferred federal income tax benefit .(102)(107)Amortization of deferred acquisition costs .5,166 4,585 Equity in income from other investments .(220)(144)Premiums receivable .(987)(1,422)Reinsurance recoverables .73 (204)Deferred acquisition costs .(5,439)(5,079)Claims and claim adjustment expense reserves .3,067 3,053 Unearned premium reserves .1,904 2,817 Other .104 97 Net cash provided by operating activities .7,010 5,607 Cash flows from investing activitiesProceeds from maturities of fixed maturities .5,990 4,909 Proceeds from sales of investments:Fixed maturities .1,475 4,619 Equity securities .93 117 Real estate investments .64 Other investments .211 166 Purchases of investments:Fixed maturities .(12,360)(13,054)Equity securities .(80)(80)Real estate investments .(34)(46)Other investments .(283)(375)Net purchases of short-term securities .(342)(1,018)Securities transactions in the course of settlement .382 60 Acquisition,net of cash acquired .(382)Other .(305)(335)Net cash used in investing activities .(5,571)(5,037)Cash flows from financing activities Treasury stock acquired share repurchase authorizations .(747)(894)Treasury stock acquired net employee share-based compensation .(112)(63)Dividends paid to shareholders .(711)(676)Issuance of debt .738 Issuance of common stock employee share options .245 117 Net cash used in financing activities.(1,325)(778)Effect of exchange rate changes on cash .8 2 Net increase(decrease)in cash .122 (206)Cash at beginning of year .650 799 Cash at end of period .$772$593 Supplemental disclosure of cash flow informationIncome taxes paid .$947$152 Interest paid .$255$234 Supplemental disclosure of noncash financing activitiesIssuance of common stock net share settlement of employee options .$32$The accompanying notes are an integral part of the consolidated financial statements.71.BASIS OF PRESENTATION AND ACCOUNTING POLICIESBasis of PresentationThe interim consolidated financial statements include the accounts of The Travelers Companies,Inc.(together with its subsidiaries,the Company).These financial statements are prepared in conformity with U.S.generally accepted accounting principles(GAAP)and are unaudited.In the opinion of the Companys management,all adjustments necessary for a fair presentation have been reflected.Certain financial information that is normally included in annual financial statements prepared in accordance with GAAP,but that is not required for interim reporting purposes,has been omitted.All material intercompany transactions and balances have been eliminated.The accompanying interim consolidated financial statements and related notes should be read in conjunction with the Companys consolidated financial statements and related notes included in the Companys Annual Report on Form 10-K for the year ended December 31,2023(the Companys 2023 Annual Report).The preparation of the interim consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim consolidated financial statements and the reported amounts of revenues and claims and expenses during the reporting period.Actual results could differ from those estimates.To the extent that the Company changes its accounting for,or presentation of,items in the financial statements,the presentation of such amounts in prior periods is changed to conform to the current period presentation,if appropriate,and disclosed,if material.On January 2,2024,the Company completed its previously announced acquisition of all issued and outstanding shares of Corvus Insurance Holdings,Inc.(Corvus),a cyber insurance managing general underwriter,for consideration transferred of approximately$427 million.The acquisition provides the Company the opportunity to renew Corvuss book of business and to leverage Corvuss capabilities to enhance the return profile of Travelers existing cyber portfolio.At the acquisition date,the Company recorded at fair value$478 million of assets acquired and$51 million of liabilities assumed as part of purchase accounting,including$390 million of identifiable intangible assets and goodwill.The assets acquired from Corvus were included in the Companys Bond&Specialty Insurance segment,effective at the acquisition date.The Company funded this transaction from internal resources.A provisional amount of$19 million was recorded as a deferred tax asset and included on the consolidated balance sheet on January 2,2024,the date of the acquisition.As the tax return for Corvus for the 2023 fiscal year will not be finalized until the fourth quarter of 2024,a measurement period adjustment is expected to be recorded in the fourth quarter of 2024.Income TaxesThe Company recognized a one-time tax benefit of$211 million in the first quarter of 2023 due to the expiration of the statute of limitations with respect to a tax item impacted by the repeal of Internal Revenue Code Section 847,which related to the discounting of property-casualty loss reserves.2.SEGMENT INFORMATIONNature of OperationsThe Companys results are reported in the following three business segments Business Insurance,Bond&Specialty Insurance and Personal Insurance.These segments reflect the manner in which the Companys businesses are currently managed and represent an aggregation of products and services based on the type of customer,how the business is marketed and the manner in which risks are underwritten.For more information regarding the Companys nature of operations,see the“Nature of Operations”section of note 1 of the notes to the consolidated financial statements in the Companys 2023 Annual Report.THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited)8The following tables summarize the components of the Companys revenues,income(loss)and total assets by reportable business segments:(For the three months ended September 30,in millions)BusinessInsuranceBond&SpecialtyInsurancePersonalInsuranceTotalReportableSegments2024 Premiums .$5,474$1,009$4,221$10,704 Net investment income .642 101 161 904 Fee income .109 12 121 Other revenues .89 7 24 120 Total segment revenues(1).$6,314$1,117$4,418$11,849 Segment income(1).$698$222$384$1,304 2023 Premiums .$4,956$935$3,827$9,718 Net investment income .551 86 132 769 Fee income .102 10 112 Other revenues .71 6 24 101 Total segment revenues(1).$5,680$1,027$3,993$10,700 Segment income(loss)(1).$468$265$(193)$540 _(1)Segment revenues for reportable business segments exclude net realized investment gains(losses)and revenues included in“interest expense and other.”Segment income(loss)for reportable business segments excludes the after-tax impact of net realized investment gains(losses)and income(loss)from“interest expense and other.”(For the nine months ended September 30,in millions)BusinessInsuranceBond&SpecialtyInsurancePersonalInsuranceTotalReportableSegments2024Premiums .$15,802$2,942$12,329$31,073 Net investment income .1,883 285 467 2,635 Fee income .315 30 345 Other revenues .243 22 72 337 Total segment revenues(1).$18,243$3,249$12,898$34,390 Segment income(1).$2,118$587$451$3,156 2023Premiums .$14,077$2,721$10,990$27,788 Net investment income .1,533 237 374 2,144 Fee income .299 25 324 Other revenues .185 18 72 275 Total segment revenues(1).$16,094$2,976$11,461$30,531 Segment income(loss)(1).$1,626$702$(648)$1,680 _(1)Segment revenues for reportable business segments exclude net realized investment gains(losses)and revenues included in“interest expense and other.”Segment income(loss)for reportable business segments excludes the after-tax impact of net realized investment gains(losses)and income(loss)from“interest expense and other.”THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited),Continued2.SEGMENT INFORMATION,Continued9Business Segment Reconciliations Three Months EndedSeptember 30,Nine Months EndedSeptember 30,(in millions)2024202320242023Revenue reconciliation Earned premiums Business Insurance:Domestic:Workers compensation .$858$876$2,602$2,584 Commercial automobile .915 816 2,649 2,375 Commercial property .915 828 2,682 2,297 General liability.871 804 2,563 2,312 Commercial multi-peril .1,374 1,211 3,890 3,456 Other .21 21 51 55 Total Domestic .4,954 4,556 14,437 13,079 International .520 400 1,365 998 Total Business Insurance .5,474 4,956 15,802 14,077 Bond&Specialty Insurance:Domestic:Fidelity and surety .359 333 1,049 964 General liability.454 414 1,317 1,218 Other .58 57 172 168 Total Domestic .871 804 2,538 2,350 International .138 131 404 371 Total Bond&Specialty Insurance .1,009 935 2,942 2,721 Personal Insurance:Domestic:Automobile .1,973 1,772 5,766 5,084 Homeowners and Other .2,083 1,896 6,069 5,434 Total Domestic .4,056 3,668 11,835 10,518 International .165 159 494 472 Total Personal Insurance .4,221 3,827 12,329 10,990 Total earned premiums .10,704 9,718 31,073 27,788 Net investment income .904 769 2,635 2,144 Fee income .121 112 345 324 Other revenues .120 101 337 275 Total segment revenues .11,849 10,700 34,390 30,531 Net realized investment gains(losses).55 (65)25 (94)Total revenues .$11,904$10,635$34,415$30,437 Income reconciliation,net of tax Total segment income .$1,304$540$3,156$1,680 Interest Expense and Other(1).(86)(86)(257)(241)Core income .1,218 454 2,899 1,439 Net realized investment gains(losses).42 (50)18 (74)Net income .$1,260$404$2,917$1,365 _(1)The primary component of Interest Expense and Other was after-tax interest expense of$77 million and$78 million for the three months ended September 30,2024 and 2023,respectively,and$232 million and$220 million for the nine months ended September 30,2024 and 2023,respectively.THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited),Continued2.SEGMENT INFORMATION,Continued10(in millions)September 30,2024December 31,2023Asset reconciliation Business Insurance .$99,192$93,565 Bond&Specialty Insurance .13,060 11,478 Personal Insurance .21,430 20,072 Total assets by reportable segment .133,682 125,115 Other assets(1).906 863 Total consolidated assets .$134,588$125,978 _(1)The primary components of other assets at both September 30,2024 and December 31,2023 were the over-funded benefit plan assets related to the Companys qualified domestic pension plan and other intangible assets.3.INVESTMENTSFixed MaturitiesThe amortized cost and fair value of investments in fixed maturities classified as available for sale were as follows:Amortized CostAllowance for Expected Credit LossesGross UnrealizedFair Value(at September 30,2024,in millions)GainsLossesU.S.Treasury securities and obligations of U.S.government and government agencies and authorities .$6,048$13$136$5,925 Obligations of U.S.states,municipalities and political subdivisions:Local general obligation .18,482 100 1,159 17,423 Revenue .9,244 59 544 8,759 State general obligation .1,125 8 54 1,079 Pre-refunded .832 4 1 835 Total obligations of U.S.states,municipalities and political subdivisions.29,683 171 1,758 28,096 Debt securities issued by foreign governments .949 8 15 942 Mortgage-backed securities,collateralized mortgage obligations and pass-through securities .11,880 253 134 11,999 Corporate and all other bonds .38,097 348 1,422 37,023 Total .$86,657$793$3,465$83,985 THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited),Continued2.SEGMENT INFORMATION,Continued11 Amortized CostAllowance for Expected Credit LossesGross UnrealizedFair Value(at December 31,2023,in millions)GainsLossesU.S.Treasury securities and obligations of U.S.government and government agencies and authorities .$6,591$8$231$6,368 Obligations of U.S.states,municipalities and political subdivisions:Local general obligation .18,374 90 1,265 17,199 Revenue .9,748 52 616 9,184 State general obligation .1,209 7 59 1,157 Pre-refunded .963 5 2 966 Total obligations of U.S.states,municipalities and political subdivisions .30,294 154 1,942 28,506 Debt securities issued by foreign governments .1,035 2 31 1,006 Mortgage-backed securities,collateralized mortgage obligations and pass-through securities .7,874 120 176 7,818 Corporate and all other bonds .35,987 5 187 2,060 34,109 Total .$81,781$5$471$4,440$77,807 Pre-refunded bonds of$835 million and$966 million at September 30,2024 and December 31,2023,respectively,were bonds for which U.S.states or municipalities have established irrevocable trusts that are almost exclusively comprised of U.S.Treasury securities and obligations of U.S.government and government agencies and authorities.These trusts were created to fund the payment of principal and interest due under the bonds.Proceeds from the sales of fixed maturities classified as available for sale were$1.48 billion and$4.62 billion during the nine months ended September 30,2024 and 2023,respectively.Gross gains of$2 million and$26 million and gross losses of$57 million and$93 million were realized on those sales during the nine months ended September 30,2024 and 2023,respectively.Included in net realized investment gains(losses)for the nine months ended September 30,2024 and 2023 were$34 million and$0 million,respectively,of losses resulting from the early redemption of fixed maturities by the issuer prior to the bonds maturity date.Equity SecuritiesThe cost and fair value of investments in equity securities were as follows:(at September 30,2024,in millions)CostGross GainsGross LossesFair ValueCommon stock .$501$158$7$652 Non-redeemable preferred stock .46 4 50 Total .$547$162$7$702(at December 31,2023,in millions)CostGross GainsGross LossesFair ValueCommon stock .$508$93$41$560 Non-redeemable preferred stock .45 3 48 Total .$553$96$41$608 For the nine months ended September 30,2024 and 2023,the Company recognized$102 million and$(11)million of net gains(losses)on equity securities still held as of September 30,2024 and 2023,respectively.THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited),Continued3.INVESTMENTS,Continued12Unrealized Investment LossesThe following tables summarize,for all fixed maturities classified as available for sale in an unrealized loss position at September 30,2024 and December 31,2023,the aggregate fair value and gross unrealized loss by the length of time those securities have been continuously in an unrealized loss position.The fair value amounts reported in the tables are estimates that are prepared using the process described in note 4 herein and in note 4 of the notes to the consolidated financial statements in the Companys 2023 Annual Report.The Company also relies upon estimates of several factors in its review and evaluation of individual investments,using the process described in note 1 of the notes to the consolidated financial statements in the Companys 2023 Annual Report to determine whether a credit loss impairment exists.Less than 12 months12 months or longerTotal(at September 30,2024,in millions)FairValueGrossUnrealizedLossesFairValueGrossUnrealizedLossesFairValueGrossUnrealizedLossesFixed maturities U.S.Treasury securities and obligations of U.S.government and government agencies and authorities .$105$3,052$136$3,157$136 Obligations of U.S.states,municipalities and political subdivisions .1,771 8 15,819 1,750 17,590 1,758 Debt securities issued by foreign governments .13 539 15 552 15 Mortgage-backed securities,collateralized mortgage obligations and pass-through securities .523 3 1,527 131 2,050 134 Corporate and all other bonds .927 5 23,413 1,417 24,340 1,422 Total .$3,339$16$44,350$3,449$47,689$3,465 Less than 12 months12 months or longerTotal(at December 31,2023,in millions)FairValueGrossUnrealizedLossesFairValueGrossUnrealizedLossesFairValueGrossUnrealizedLossesFixed maturities U.S.Treasury securities and obligations of U.S.government and government agencies and authorities .$1,864$7$2,985$224$4,849$231 Obligations of U.S.states,municipalities and political subdivisions .3,868 31 14,351 1,911 18,219 1,942 Debt securities issued by foreign governments 30 763 31 793 31 Mortgage-backed securities,collateralized mortgage obligations and pass-through securities .1,215 9 1,433 167 2,648 176 Corporate and all other bonds .1,016 9 26,444 2,051 27,460 2,060 Total .$7,993$56$45,976$4,384$53,969$4,440 THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited),Continued3.INVESTMENTS,Continued13The following tables summarize,for all fixed maturities reported at fair value for which fair value was less than 80%of amortized cost at September 30,2024 and December 31,2023,the gross unrealized investment loss by length of time those securities have continuously been in an unrealized loss position of greater than 20%of amortized cost:Period For Which Fair Value is Less Than 80%of Amortized Cost(at September 30,2024,in millions)3 months or lessGreater than 3 months,6 months or lessGreater than 6 months,12 months or lessGreater than 12 monthsTotalFixed maturitiesU.S.Treasury securities and obligations of U.S.government and government agencies and authorities .$Obligations of U.S.states,municipalities and political subdivisions .48 581 629 Debt securities issued by foreign governments .Mortgage-backed securities,collateralized mortgage obligations and pass-through securities .Corporate and all other bonds .2 3 5 Total .$50$584$634 Period For Which Fair Value is Less Than 80%of Amortized Cost(at December 31,2023,in millions)3 months or lessGreater than 3 months,6 months or lessGreater than 6 months,12 months or lessGreater than 12 monthsTotalFixed maturitiesU.S.Treasury securities and obligations of U.S.government and government agencies and authorities .$Obligations of U.S.states,municipalities and political subdivisions .2 31 642 675 Debt securities issued by foreign governments .Mortgage-backed securities,collateralized mortgage obligations and pass-through securities .Corporate and all other bonds .1 3 22 25 51 Total .$1$5$53$667$726 Increases in interest rates resulted in the gross unrealized investment losses disclosed in the tables above;however,the net unrealized loss is considered temporary in nature as the decrease in value is not due to credit impairments and there is no impact on expected contractual cash flows from fixed maturities.THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited),Continued3.INVESTMENTS,Continued14Impairment ChargesThe following tables present changes in the allowance for expected credit losses on fixed maturities classified as available for sale for the category of Corporate and All Other Bonds(no other categories of fixed maturities currently have an allowance for expected credit losses):Fixed MaturitiesCorporate and All Other BondsAt and For the Three Months Ended(in millions)September 30,2024 September 30,2023Balance,beginning of period .$1$4 Additions for expected credit losses on securities where no credit losses were previously recognized .Additions(reductions)for expected credit losses on securities where credit losses were previously recognized .(1)Reductions due to sales/defaults of credit-impaired securities .Reductions for impairments of securities which the Company intends to sell or more likely than not will be required to sell .Balance,end of period .$4 Fixed MaturitiesCorporate and All Other BondsAt and For the Nine Months Ended(in millions)September 30,2024September 30,2023Balance,beginning of period .$5$3 Additions for expected credit losses on securities where no credit losses were previously recognized .3 Additions(reductions)for expected credit losses on securities where credit losses were previously recognized .(1)1 Reductions due to sales/defaults of credit-impaired securities .(7)Reductions for impairments of securities which the Company intends to sell or more likely than not will be required to sell .Balance,end of period .$4 Total net impairment charges,including credit impairments,reported in net realized investment gains(losses)in the consolidated statement of income were$5 million and$1 million for the three months ended September 30,2024 and 2023,respectively,and$8 million and$2 million for the nine months ended September 30,2024 and 2023,respectively.Credit losses related to the fixed maturity portfolio for both the three and nine months ended September 30,2024 and 2023 represented less than 1%of the fixed maturity portfolio on a pre-tax basis and less than 1%of shareholders equity on an after-tax basis.Other InvestmentsIncluded in other investments are private equity,hedge fund and real estate partnerships that are accounted for under the equity method of accounting and typically report their financial statement information to the Company one month to three months following the end of the reporting period.Accordingly,net investment income from these other investments is generally reflected in the Companys financial statements on a quarter lag basis.THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited),Continued3.INVESTMENTS,Continued154.FAIR VALUE MEASUREMENTSThe Companys estimates of fair value for financial assets and financial liabilities are based on the framework established in the fair value accounting guidance.The framework is based on the inputs used in valuation,gives the highest priority to quoted prices in active markets and requires that observable inputs be used in the valuations when available.The disclosure of fair value estimates in the fair value accounting guidance hierarchy is based on whether the significant inputs into the valuation are observable.In determining the level of the hierarchy in which the estimate is disclosed,the highest priority is given to unadjusted quoted prices in active markets and the lowest priority to unobservable inputs that reflect the Companys significant market assumptions.The level in the fair value hierarchy within which the fair value measurement is reported is based on the lowest level input that is significant to the measurement in its entirety.The three levels of the hierarchy are as follows:Level 1-Unadjusted quoted market prices for identical assets or liabilities in active markets that the Company has the ability to access.Level 2-Quoted prices for similar assets or liabilities in active markets;quoted prices for identical or similar assets or liabilities in inactive markets;or valuations based on models where the significant inputs are observable(e.g.,interest rates,yield curves,prepayment speeds,default rates,loss severities,etc.)or can be corroborated by observable market data.Level 3-Valuations based on models where significant inputs are not observable.The unobservable inputs reflect the Companys own assumptions about the inputs that market participants would use.Valuation of Investments Reported at Fair Value in Financial StatementsThe Company utilized a pricing service to estimate fair value measurements for approximately 99%of its fixed maturities at both September 30,2024 and December 31,2023.While the vast majority of the Companys fixed maturities are included in Level 2,the Company holds a number of corporate bonds which are not valued by the pricing service and estimates the fair value of these bonds using either another internal pricing matrix,a present value income approach or a broker quote(collectively,the other methodologies).The other methodologies include some unobservable inputs that are significant to the valuation.Due to the limited amount of observable market information available in the estimation of fair value,the Company includes the fair value estimates for bonds that are valued using the other methodologies in Level 3.For certain investments in non-public common and preferred equity securities,the fair value estimate is determined either internally or by an external fund manager based on the impact of recent observable transactions on the investment,recent filings,operating results,balance sheet stability,growth and other business and market sector fundamentals.Due to the significant unobservable inputs in these valuations,the Company included the fair value estimate of$38 million and$37 million for these investments at September 30,2024 and December 31,2023,respectively,in the amounts disclosed in Level 3.For more information regarding the valuation of the Companys fixed maturities,equity securities and other investments,see note 4 of the notes to the consolidated financial statements in the Companys 2023 Annual Report.Fair Value HierarchyThe following tables present the level within the fair value hierarchy at which the Companys financial assets and financial liabilities are measured on a recurring basis.THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited),Continued16(at September 30,2024,in millions)TotalLevel 1Level 2Level 3Invested assets:Fixed maturities U.S.Treasury securities and obligations of U.S.government and government agencies and authorities .$5,925$5,925$Obligations of U.S.states,municipalities and political subdivisions .28,096 28,096 Debt securities issued by foreign governments .942 942 Mortgage-backed securities,collateralized mortgage obligations and pass-through securities .11,999 11,999 Corporate and all other bonds .37,023 5 36,763 255 Total fixed maturities .83,985 5,930 77,800 255 Equity securities Common stock .652 645 7 Non-redeemable preferred stock .50 16 3 31 Total equity securities .702 661 3 38 Other investments .20 20 Total .$84,707$6,611$77,803$293(at December 31,2023,in millions)TotalLevel 1Level 2Level 3Invested assets:Fixed maturities U.S.Treasury securities and obligations of U.S.government and government agencies and authorities .$6,368$6,368$Obligations of U.S.states,municipalities and political subdivisions .28,506 28,506 Debt securities issued by foreign governments .1,006 1,006 Mortgage-backed securities,collateralized mortgage obligations and pass-through securities .7,818 7,818 Corporate and all other bonds .34,109 33,851 258 Total fixed maturities .77,807 6,368 71,181 258 Equity securities Common stock .560 553 7 Non-redeemable preferred stock .48 16 2 30 Total equity securities .608 569 2 37 Other investments .18 18 Total .$78,433$6,955$71,183$295 There was no significant activity in Level 3 of the hierarchy during the nine months ended September 30,2024.Financial Instruments Disclosed,But Not Carried,At Fair ValueThe following tables present the carrying value and fair value of the Companys financial assets and financial liabilities disclosed,but not carried,at fair value,and the level within the fair value hierarchy at which such assets and liabilities are categorized.THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited),Continued4.FAIR VALUE MEASUREMENTS,Continued17(at September 30,2024,in millions)CarryingValueFairValueLevel 1Level 2Level 3Financial assets Short-term securities .$5,482$5,482$2,013$3,419$50 Financial liabilities Debt .$7,933$7,604$7,604$Commercial paper .100 100 100 (at December 31,2023,in millions)CarryingValueFairValueLevel 1Level 2Level 3Financial assets Short-term securities .$5,137$5,137$1,171$3,912$54 Financial liabilities Debt .$7,931$7,645$7,645$Commercial paper .100 100 100 The Company had no material assets or liabilities that were measured at fair value on a non-recurring basis during the nine months ended September 30,2024 or the year ended December 31,2023.5.ALLOWANCE FOR EXPECTED CREDIT LOSSESPremiums ReceivableThe following tables present the balances of premiums receivable,net of the allowance for expected credit losses,at September 30,2024 and 2023,and the changes in the allowance for expected credit losses for the three and nine months ended September 30,2024 and 2023.At and For the Three Months Ended September 30,2024At and For the Three Months Ended September 30,2023(in millions)Premiums Receivable,Net of Allowance for Expected Credit LossesAllowance for Expected Credit LossesPremiums Receivable,Net of Allowance for Expected Credit LossesAllowance for Expected Credit Losses Balance,beginning of period .$11,491$69$10,327$72 Current period change for expected credit losses .16 11 Write-offs of uncollectible premiums receivable .15 15 Balance,end of period .$11,271$70$10,345$68 THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited),Continued4.FAIR VALUE MEASUREMENTS,Continued18At and For the Nine Months Ended September 30,2024At and For the Nine Months Ended September 30,2023(in millions)Premiums Receivable,Net of Allowance for Expected Credit LossesAllowance for Expected Credit LossesPremiums Receivable,Net of Allowance for Expected Credit LossesAllowance for Expected Credit Losses Balance,beginning of period .$10,282$69$8,922$77 Current period change for expected credit losses .41 28 Write-offs of uncollectible premiums receivable .40 37 Balance,end of period .$11,271$70$10,345$68 Reinsurance RecoverablesThe following tables present the balances of reinsurance recoverables,net of the allowance for estimated uncollectible reinsurance,at September 30,2024 and 2023,and the changes in the allowance for estimated uncollectible reinsurance for the three and nine months ended September 30,2024 and 2023.At and For the Three Months Ended September 30,2024At and For the Three Months Ended September 30,2023(in millions)Reinsurance Recoverables,Net of Allowance for Estimated Uncollectible ReinsuranceAllowance for Estimated Uncollectible ReinsuranceReinsurance Recoverables,Net of Allowance for Estimated Uncollectible ReinsuranceAllowance for Estimated Uncollectible Reinsurance Balance,beginning of period .$8,132$117$8,121$121 Current period change for estimated uncollectible reinsurance .3 Write-offs of uncollectible reinsurance recoverables .Balance,end of period .$8,075$120$8,267$121 At and For the Nine Months Ended September 30,2024At and For the Nine Months Ended September 30,2023(in millions)Reinsurance Recoverables,Net of Allowance for Estimated Uncollectible ReinsuranceAllowance for Estimated Uncollectible ReinsuranceReinsurance Recoverables,Net of Allowance for Estimated Uncollectible ReinsuranceAllowance for Estimated Uncollectible Reinsurance Balance,beginning of period .$8,143$118$8,063$132 Current period change for estimated uncollectible reinsurance .2 (11)Write-offs of uncollectible reinsurance recoverables .Balance,end of period .$8,075$120$8,267$121 THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited),Continued5.ALLOWANCE FOR EXPECTED CREDIT LOSSES,Continued19Of the total reinsurance recoverables at September 30,2024,$5.85 billion,or 88%,were rated by A.M.Best Company,after deducting mandatory pools and associations and before allowances for estimated uncollectible reinsurance.The Company utilizes updated A.M.Best credit ratings on a quarterly basis when determining the allowance.Of the total rated by A.M.Best Company,94%were rated A-or better.The remaining 12%of reinsurance recoverables comprised the following:6%related to captive insurance companies,1%related to the Companys participation in voluntary pools and 5%were balances from other companies not rated by A.M.Best Company.Certain of the Companys reinsurance recoverables are collateralized by letters of credit,funds held or trust agreements.Contractholder ReceivablesThe following tables present the balances of contractholder receivables,net of the allowance for expected credit losses,at September 30,2024 and 2023,and the changes in the allowance for expected credit losses for the three and nine months ended September 30,2024 and 2023.At and For the Three Months Ended September 30,2024At and For the Three Months Ended September 30,2023(in millions)Contractholder Receivables,Net of Allowance for Expected Credit LossesAllowance for Expected Credit LossesContractholder Receivables,Net of Allowance for Expected Credit LossesAllowance for Expected Credit Losses Balance,beginning of period .$3,274$18$3,449$20 Current period change for expected credit losses .Write-offs of uncollectible contractholder receivables .Balance,end of period .$3,292$18$3,467$20 At and For the Nine Months Ended September 30,2024At and For the Nine Months Ended September 30,2023(in millions)Contractholder Receivables,Net of Allowance for Expected Credit LossesAllowance for Expected Credit LossesContractholder Receivables,Net of Allowance for Expected Credit LossesAllowance for Expected Credit Losses Balance,beginning of period .$3,249$20$3,579$17 Current period change for expected credit losses .(2)3 Write-offs of uncollectible contractholder receivables .Balance,end of period .$3,292$18$3,467$20 THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited),Continued5.ALLOWANCE FOR EXPECTED CREDIT LOSSES,Continued206.GOODWILL AND OTHER INTANGIBLE ASSETSGoodwillThe following table presents the carrying amount of the Companys goodwill by segment.Each reportable segment includes goodwill associated with the Companys international business which is subject to the impact of changes in foreign currency exchange rates.(in millions)September 30,2024December 31,2023Business Insurance .$2,601$2,585 Bond&Specialty Insurance(1).835 550 Personal Insurance .811 815 Other .26 26 Total .$4,273$3,976 _(1)Goodwill at September 30,2024 included$285 million associated with the acquisition of Corvus in the first quarter of 2024,which is primarily attributable to Corvuss cyber underwriting and support capabilities and workforce and is not deductible for tax purposes.THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited),Continued21Other Intangible AssetsThe following tables present a summary of the Companys other intangible assets by major asset class.(at September 30,2024,in millions)GrossCarryingAmountAccumulatedAmortizationNetSubject to amortization Customer-related(1).$190$73$117 Contract-based(2).205 196 9 Marketing-related(3).18 2 16 Total subject to amortization .413 271 142 Not subject to amortization .226 226 Total .$639$271$368(at December 31,2023,in millions)GrossCarryingAmountAccumulatedAmortizationNetSubject to amortization Customer-related .$100$59$41 Contract-based(2).204 194 10 Total subject to amortization .304 253 51 Not subject to amortization .226 226 Total .$530$253$277 _(1)Customer-related intangibles of$87 million were recorded in connection with the acquisition of Corvus in the first quarter of 2024.The customer-related intangible assets include Corvuss broker and policyholder relationships and were valued using the excess earnings method income approach,a valuation technique that provides an estimate of fair value based on the cash flows that the asset can be expected to generate over its remaining useful life.Broker relationships represent the relationships Corvus has with its existing brokers through which new business is placed with policyholders.Policyholder relationships represent the renewal of existing policies.Significant inputs to the fair valuation include estimates of revenue growth,broker retention rates,policyholder attrition rates and weighted average cost of capital.(2)Contract-based intangible assets subject to amortization are comprised of fair value adjustments on claims and claim adjustment expense reserves,reinsurance recoverables and other contract-related intangible assets.Fair value adjustments recorded in connection with insurance acquisitions were based on managements estimate of nominal claims and claim adjustment expense reserves and reinsurance recoverables.The method used calculated a risk adjustment to a risk-free discounted reserve that would,if reserves ran off as expected,produce results that yielded the assumed cost-of-capital on the capital supporting the loss reserves.The fair value adjustments are reported as other intangible assets on the consolidated balance sheet,and the amounts measured in accordance with the acquirers accounting policies for insurance contracts have been reported as part of the claims and claim adjustment expense reserves and reinsurance recoverables.The intangible assets are being recognized into income over the expected payment pattern.Because the time value of money and the risk adjustment(cost of capital)components of the intangible assets run off at different rates,the amount recognized in income may be a net benefit in some periods and a net expense in other periods.(3)Marketing-related intangibles of$18 million were recorded in connection with the acquisition of Corvus in the first quarter of 2024.The marketing-related intangible assets include trade names and a non-compete agreement.The trade names were valued using a relief from royalty method,a valuation technique which estimates the fair value of an asset based on the present value of the royalties saved because the company owns the asset.Significant inputs to the fair valuation include estimates of future revenue,appropriate rates of return associated with certain assets and weighted average cost of capital.The fair value of the non-compete agreement is based on an estimate of the income that would be lost if the agreement were not in place and the individual chose to compete.Significant inputs to the fair valuation include estimates of projected cash flows and weighted average cost of capital.THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited),Continued6.GOODWILL AND OTHER INTANGIBLE ASSETS,Continued22The following table presents a summary of the other intangible assets recorded in connection with the acquisition of Corvus by major asset class as of the acquisition date.(in millions)AmountWeighted Average Amortization PeriodSubject to amortizationCustomer-related .$87 14 yearsMarketing-related .18 7 yearsTotal .$105 13 years7.INSURANCE CLAIM RESERVESClaims and claim adjustment expense reserves were as follows:(in millions)September 30,2024December 31,2023Property-casualty .$64,741$61,621 Accident and health .5 6 Total .$64,746$61,627 The following table presents a reconciliation of beginning and ending property casualty reserve balances for claims and claim adjustment expenses:Nine Months Ended September 30,(in millions)20242023Claims and claim adjustment expense reserves at beginning of year .$61,621$58,643 Less reinsurance recoverables on unpaid losses .7,817 7,790 Net reserves at beginning of year .53,804 50,853 Estimated claims and claim adjustment expenses for claims arising in the current year .21,276 20,205 Estimated increase(decrease)in claims and claim adjustment expenses for claims arising in prior years .(321)62 Total increases .20,955 20,267 Claims and claim adjustment expense payments for claims arising in:Current year .7,255 7,305 Prior years .10,545 10,031 Total payments .17,800 17,336 Unrealized foreign exchange(gain)loss .38 (1)Net reserves at end of period .56,997 53,783 Plus reinsurance recoverables on unpaid losses .7,744 7,920 Claims and claim adjustment expense reserves at end of period .$64,741$61,703 Gross claims and claim adjustment expense reserves at September 30,2024 increased by$3.12 billion from December 31,2023,primarily reflecting the impacts of(i)catastrophe losses in the first nine months of 2024,(ii)higher volumes of insured exposures and(iii)loss cost trends for the current accident year,partially offset by(iv)claim payments made during the first nine months of 2024 and(v)net favorable prior year reserve development.Reinsurance recoverables on unpaid losses at September 30,2024 decreased by$73 million from December 31,2023.THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited),Continued6.GOODWILL AND OTHER INTANGIBLE ASSETS,Continued23Prior Year Reserve DevelopmentThe following disclosures regarding reserve development are on a“net of reinsurance”basis.For the nine months ended September 30,2024 and 2023,estimated claims and claim adjustment expenses incurred included$321 million and$(62)million,respectively,of net favorable(unfavorable)development for claims arising in prior years,including$447 million and$11 million,respectively,of net favorable prior year reserve development,and$33 million and$34 million,respectively,of accretion of discount.Business Insurance.Net unfavorable prior year reserve development in the third quarter of 2024 totaled$91 million,primarily driven by an addition to asbestos reserves of$242 million,partially offset by better than expected loss experience in the domestic operations workers compensation product line for multiple accident years.Net unfavorable prior year reserve development in the third quarter of 2023 totaled$263 million,primarily driven by(i)an addition to asbestos reserves of$284 million and higher than expected loss experience in the domestic operations,(ii)general liability product line(excluding asbestos),including additions to reserves attributable to childhood sexual molestation and environmental claims in the Companys run-off operations and(iii)commercial automobile product line for recent accident years,partially offset by(iv)better than expected loss experience in the workers compensation product line for multiple accident years.Net unfavorable prior year reserve development in the first nine months of 2024 totaled$57 million,primarily driven by(i)higher than expected loss experience in the domestic operations general liability product line(excluding asbestos)for recent accident years,(ii)an addition to asbestos reserves of$242 million and(iii)an addition to reserves related to run-off operations,partially offset by(iv)better than expected loss experience in the workers compensation product line for multiple accident years.Net unfavorable prior year reserve development in the first nine months of 2023 totaled$345 million,primarily driven by(i)higher than expected loss experience in the domestic operations general liability product line(excluding asbestos)for multiple accident years,including additions to reserves attributable to childhood sexual molestation and environmental claims in the Companys run-off operations,(ii)an addition to asbestos reserves of$284 million and(iii)higher than expected loss experience in the domestic operations commercial automobile product line for recent accident years,partially offset by(iv)better than expected loss experience in the domestic operations workers compensation product line for multiple accident years.The first nine months of 2024 and 2023 also included an increase to environmental reserves.Bond&Specialty Insurance.Net favorable prior year reserve development in the third quarter and first nine months of 2024 totaled$36 million and$84 million,respectively,primarily driven by better than expected loss experience in the domestic operations fidelity and surety product lines for recent accident years.Net favorable prior year reserve development in the third quarter and first nine months of 2023 totaled$72 million and$249 million,respectively,primarily driven by better than expected loss experience in the domestic operations fidelity and surety product lines and in the general liability product line for management liability coverages for recent accident years.Personal Insurance.Net favorable prior year reserve development in the third quarter and first nine months of 2024 totaled$181 million and$420 million,respectively,primarily driven by better than expected loss experience in the domestic operations in both the homeowners and other and automobile product lines for recent accident years.Net favorable prior year reserve development in the third quarter and first nine months of 2023 totaled$37 million and$107 million,respectively,primarily driven by better than expected loss experience in the domestic operations homeowners and other product line for recent accident years.THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited),Continued7.INSURANCE CLAIM RESERVES,Continued248.OTHER COMPREHENSIVE INCOME(LOSS)AND ACCUMULATED OTHER COMPREHENSIVE INCOME(LOSS)The following tables present the changes in the Companys accumulated other comprehensive income(loss)(AOCI)for the three and nine months ended September 30,2024.Changes in Net Unrealized Gains(Losses)on Investment Securities (in millions)Having No CreditLosses Recognized inthe ConsolidatedStatement of IncomeHaving Credit Losses Recognized in the ConsolidatedStatement of IncomeNet Benefit Plan Assets andObligationsRecognized inShareholders EquityNet UnrealizedForeign CurrencyTranslationTotal AccumulatedOtherComprehensiveIncome(Loss)Balance,June 30,2024 .$(4,158)$182$(460)$(974)$(5,410)Other comprehensive income(loss)(OCI)before reclassifications,net of tax .1,850 1 (1)113 1,963 Amounts reclassified from AOCI,net of tax .14 14 Net OCI,current period .1,864 1 (1)113 1,977 Balance,September 30,2024 .$(2,294)$183$(461)$(861)$(3,433)Changes in Net Unrealized Gains(Losses)on Investment Securities (in millions)Having No CreditLosses Recognized inthe ConsolidatedStatement of IncomeHaving Credit Losses Recognized in the ConsolidatedStatement of IncomeNet Benefit Plan Assets andObligationsRecognized inShareholders EquityNet UnrealizedForeign CurrencyTranslationTotal AccumulatedOtherComprehensiveIncome(Loss)Balance,December 31,2023 .$(3,309)$180$(458)$(884)$(4,471)Other comprehensive income(loss)(OCI)before reclassifications,net of tax .942 3 23 968 Amounts reclassified from AOCI,net of tax .73 (3)70 Net OCI,current period .1,015 3 (3)23 1,038 Balance,September 30,2024 .$(2,294)$183$(461)$(861)$(3,433)THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited),Continued25The following table presents the pre-tax components of the Companys other comprehensive income(loss)and the related income tax expense(benefit).Three Months EndedSeptember 30,Nine Months EndedSeptember 30,(in millions)2024202320242023Changes in net unrealized gains(losses)on investment securities:Having no credit losses recognized in the consolidated statement of income .$2,370$(2,391)$1,294$(1,986)Income tax expense(benefit).506 (501)279 (418)Net of taxes .1,864 (1,890)1,015 (1,568)Having credit losses recognized in the consolidated statement of income .1 4 Income tax expense .1 Net of taxes .1 3 Net changes in benefit plan assets and obligations .(1)(3)(4)(10)Income tax expense(benefit).(1)(1)(2)Net of taxes .(1)(2)(3)(8)Net changes in unrealized foreign currency translation .120 (118)24 13 Income tax expense(benefit).7 (7)1 4 Net of taxes .113 (111)23 9 Total other comprehensive income(loss).2,490 (2,512)1,318 (1,983)Total income tax expense(benefit).513 (509)280 (416)Total other comprehensive income(loss),net of taxes$1,977$(2,003)$1,038$(1,567)THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited),Continued8.OTHER COMPREHENSIVE INCOME(LOSS)AND ACCUMULATED OTHER COMPREHENSIVE INCOME(LOSS),Continued26The following table presents the pre-tax and related income tax(expense)benefit components of the amounts reclassified from the Companys AOCI to the Companys consolidated statement of income.Three Months EndedSeptember 30,Nine Months EndedSeptember 30,(in millions)2024202320242023Reclassification adjustments related to unrealized gains(losses)on investment securities:Having no credit losses recognized in the consolidated statement of income(1).$17$35$92$68 Income tax benefit(2).3 7 19 14 Net of taxes .14 28 73 54 Having credit losses recognized in the consolidated statement of income(1).Income tax benefit(2).Net of taxes .Reclassification adjustment related to benefit plan assets and obligations:Claims and claim adjustment expenses(benefit)(3).(2)(1)(4)General and administrative expenses(benefit)(3).(1)(2)(3)(6)Total .(1)(4)(4)(10)Income tax(expense)benefit(2).(1)(1)(1)(2)Net of taxes .(3)(3)(8)Reclassification adjustment related to foreign currency translation(1).Income tax benefit(2).Net of taxes .Total reclassifications .16 31 88 58 Total income tax benefit .2 6 18 12 Total reclassifications,net of taxes .$14$25$70$46 _(1)(Increases)decreases net realized investment gains(losses)on the consolidated statement of income.(2)(Increases)decreases income tax expense(benefit)on the consolidated statement of income.(3)Increases(decreases)expenses on the consolidated statement of income.9.COMMON SHARE REPURCHASESDuring the three and nine months ended September 30,2024,the Company repurchased 1.1 million and 3.4 million common shares,respectively,under its share repurchase authorizations for total cost of$250 million and$750 million,respectively.The average cost per share repurchased was$222.58 and$216.94,respectively.In addition,the Company acquired 14,298 shares and 0.7 million common shares for a total cost of$3 million and$144 million during the three and nine months ended September 30,2024,respectively,that were not part of its publicly announced share repurchase authorizations.These shares consisted of shares retained to cover payroll withholding taxes in connection with the vesting of restricted stock unit awards and performance share awards,and shares used by employees to cover the exercise price,as well as the related payroll withholding taxes,with respect to certain stock options that were exercised.Included in the cost of treasury stock acquired pursuant to common share repurchases is the 1%excise tax imposed on common share repurchase activity,net of common share issuances,as part of the Inflation Reduction Act of 2022.At September 30,2024,the Company had$5.29 billion of capacity remaining under its share repurchase authorizations.THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited),Continued8.OTHER COMPREHENSIVE INCOME(LOSS)AND ACCUMULATED OTHER COMPREHENSIVE INCOME(LOSS),Continued2710.EARNINGS PER SHAREThe following is a reconciliation of the income and share data used in the basic and diluted earnings per share computations for the periods presented:Three Months EndedSeptember 30,Nine Months EndedSeptember 30,(in millions,except per share amounts)2024202320242023Basic and Diluted Net income,as reported .$1,260$404$2,917$1,365 Participating share-based awards allocated income .(10)(3)(22)(10)Net income available to common shareholders basic and diluted .$1,250$401$2,895$1,355 Common Shares Basic Weighted average shares outstanding .227.4 228.8 228.3 230.0 Diluted Weighted average shares outstanding .227.4 228.8 228.3 230.0 Weighted average effects of dilutive securities stock options and performance shares .3.2 2.3 3.0 2.5 Total .230.6 231.1 231.3 232.5 Net Income per Common Share Basic .$5.50$1.75$12.68$5.89 Diluted .$5.42$1.74$12.51$5.83 11.SHARE-BASED INCENTIVE COMPENSATIONThe following information relates to fully vested stock option awards at September 30,2024:Stock OptionsNumberWeightedAverageExercisePriceWeightedAverageContractualLifeRemainingAggregateIntrinsicValue($in millions)Vested at end of period(1).6,639,395$148.24 5.6 years$570 Exercisable at end of period .4,926,954$134.01 4.7 years$493 _(1)Represents awards for which the requisite service has been rendered,including those that are retirement eligible.The total compensation cost for all share-based incentive compensation awards recognized in earnings was$63 million and$46 million for the three months ended September 30,2024 and 2023,respectively,and$202 million and$162 million for the nine months ended September 30,2024 and 2023,respectively.The related tax benefits recognized in the consolidated statement of income were$11 million and$8 million for the three months ended September 30,2024 and 2023,respectively,and$33 million and$27 million for the nine months ended September 30,2024 and 2023,respectively.The total unrecognized compensation cost related to all nonvested share-based incentive compensation awards at September 30,2024 was$296 million,which is expected to be recognized over a weighted-average period of 1.9 years.THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited),Continued28 12.PENSION PLANS,RETIREMENT BENEFITS AND SAVINGS PLANSThe following table summarizes the components of net periodic benefit cost(benefit)for the Companys pension and postretirement benefit plans recognized in the consolidated statement of income for the three months ended September 30,2024 and 2023.Pension PlansPostretirement Benefit Plans(for the three months ended September 30,in millions)2024202320242023Net Periodic Benefit Cost(Benefit):Service cost .$29$27$Non-service cost(benefit):Interest cost on benefit obligation .43 44 1 2 Expected return on plan assets .(74)(77)Amortization of unrecognized:Prior service benefit .(1)(1)Net actuarial(gain)loss .2 (3)(3)Total non-service cost(benefit).(29)(34)(2)(2)Net periodic benefit cost(benefit).$(7)$(2)$(2)The following table indicates the line items in which the respective service cost and non-service cost(benefit)are presented in the consolidated statement of income for the three months ended September 30,2024 and 2023.Pension PlansPostretirement Benefit Plans(for the three months ended September 30,in millions)2024202320242023Service Cost:Claims and claim adjustment expenses .$11$11$General and administrative expenses .18 16 Total service cost .29 27 Non-Service Cost(Benefit):Claims and claim adjustment expenses .(11)(14)(1)General and administrative expenses .(18)(20)(2)(1)Total non-service cost(benefit).(29)(34)(2)(2)Net periodic benefit cost(benefit).$(7)$(2)$(2)THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited),Continued29The following table summarizes the components of net periodic benefit cost(benefit)for the Companys pension and postretirement benefit plans recognized in the consolidated statement of income for the nine months ended September 30,2024 and 2023.Pension PlansPostretirement Benefit Plans(for the nine months ended September 30,in millions)2024202320242023Net Periodic Benefit Cost(Benefit):Service cost .$87$81$Non-service cost(benefit):Interest cost on benefit obligation .129 132 3 4 Expected return on plan assets .(223)(233)Amortization of unrecognized:Prior service benefit .(1)(2)(3)Net actuarial(gain)loss .5 (7)(7)Total non-service cost(benefit).(89)(102)(6)(6)Net periodic benefit cost(benefit).$(2)$(21)$(6)$(6)The following table indicates the line items in which the respective service cost and non-service cost(benefit)are presented in the consolidated statement of income for the nine months ended September 30,2024 and 2023.Pension PlansPostretirement Benefit Plans(for the nine months ended September 30,in millions)2024202320242023Service Cost:Claims and claim adjustment expenses .$34$33$General and administrative expenses .53 48 Total service cost .87 81 Non-Service Cost(Benefit):Claims and claim adjustment expenses .(34)(41)(2)(3)General and administrative expenses .(55)(61)(4)(3)Total non-service cost(benefit).(89)(102)(6)(6)Net periodic benefit cost(benefit).$(2)$(21)$(6)$(6)13.LEASESThe Company enters into lease agreements for real estate that is primarily used for office space in the ordinary course of business.These leases are accounted for as operating leases,whereby lease expense is recognized on a straight-line basis over the term of the lease,and a right-of-use asset and lease liability is recognized as part of other assets and other liabilities,respectively,in the consolidated balance sheet.Most leases include an option to extend or renew the lease term.The exercise of the renewal option is at the Companys discretion.The operating lease liability includes lease payments related to options to extend or renew the lease term if the Company is reasonably certain of exercising those options.The Company,in determining the present value of lease payments,utilizes either the rate implicit in the lease,if that rate is readily determinable,or the Companys incremental secured borrowing rate commensurate with the term of the underlying lease.THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited),Continued12.PENSION PLANS,RETIREMENT BENEFITS AND SAVINGS PLANS,Continued30Lease expense is included in general and administrative expenses in the consolidated statement of income.Additional information regarding the Companys real estate operating leases is as follows:Three Months EndedSeptember 30,Nine Months EndedSeptember 30,(in millions)2024202320242023Lease costOperating leases .$18$19$56$57 Short-term leases(1).1 1 2 2 Lease expense .19 20 58 59 Less:sublease income(2).Net lease cost .$19$20$58$59 Other information on operating leasesCash payments to settle a lease liability reported in cash flows .$18$22$60$65 Right-of-use assets obtained in exchange for new lease liabilities .$31$12$45$25 Weighted average discount rate .3.32%2.64%3.32%2.64%Weighted average remaining lease term .4.2 years4.2 years4.2 years4.2 years_(1)Leases with a term of twelve months or less are not recorded on the consolidated balance sheet.(2)Sublease income consists of rent from third parties of office space and is recognized as part of other revenues in the consolidated statement of income.14.CONTINGENCIES,COMMITMENTS AND GUARANTEESContingenciesThe major pending legal proceedings,other than ordinary routine litigation incidental to the business,to which the Company or any of its subsidiaries is a party or to which any of the Companys properties is subject are described below.Asbestos and Environmental Claims and LitigationIn the ordinary course of its insurance business,the Company has received and continues to receive claims for insurance arising under policies issued by the Company asserting alleged injuries and damages from asbestos-and environmental-related exposures that are the subject of related coverage litigation.The Company is defending asbestos-and environmental-related litigation vigorously and believes that it has meritorious defenses;however,the outcomes of these disputes are uncertain.In this regard,the Company employs dedicated specialists and comprehensive resolution strategies to manage asbestos and environmental loss exposure,including settling litigation under appropriate circumstances.Currently,it is not possible to predict legal outcomes and their impact on future loss development for claims and litigation relating to asbestos and environmental claims.Any such development could be affected by future court decisions and interpretations,as well as future changes,if any,in applicable legislation.Because of these uncertainties,additional liabilities may arise for amounts in excess of the Companys current insurance reserves.In addition,the Companys estimate of ultimate claims and claim adjustment expenses may change.These additional liabilities or changes in estimates,or a range of either,cannot now be reasonably estimated and could result in income statement charges that could be material to the Companys results of operations in future periods.Other Proceedings Not Arising Under Insurance Contracts or Reinsurance AgreementsThe Company is involved in other lawsuits,including lawsuits alleging extra-contractual damages relating to insurance contracts or reinsurance agreements,that do not arise under insurance contracts or reinsurance agreements.The legal costs associated with such lawsuits are expensed in the period in which the costs are incurred.Based upon currently available information,the Company does not believe it is reasonably possible that any such lawsuit or related lawsuits would be material to the Companys results of operations or would have a material adverse effect on the Companys financial position or liquidity.THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited),Continued13.LEASES,Continued31Other Commitments and GuaranteesCommitmentsInvestment Commitments The Company has unfunded commitments to private equity limited partnerships,real estate partnerships and other investments.These commitments totaled$1.51 billion and$2.05 billion at September 30,2024 and December 31,2023,respectively.GuaranteesThe maximum amount of the Companys contingent obligation for indemnifications related to the sale of businesses that are quantifiable was$351 million at September 30,2024.The maximum amount of the Companys obligation related to the guarantee of certain insurance policy obligations of a former insurance subsidiary was$480 million at September 30,2024,all of which is indemnified by a third party.For more information regarding the Companys guarantees,see note 17 of the notes to the consolidated financial statements in the Companys 2023 Annual Report.THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited),Continued14.CONTINGENCIES,COMMITMENTS AND GUARANTEES,Continued32THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIESItem 2.MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe following is a discussion and analysis of the Companys financial condition and results of operations.FINANCIAL HIGHLIGHTS2024 Third Quarter Consolidated Results of OperationsNet income of$1.26 billion,or$5.50 per share basic and$5.42 per share dilutedNet earned premiums of$10.70 billionCatastrophe losses of$939 million($739 million after-tax)Net favorable prior year reserve development of$126 million($99 million after-tax)Combined ratio of 93.2%Net investment income of$904 million($742 million after-tax)Net realized investment gains of$55 million($42 million after-tax)Operating cash flows of$3.88 billion2024 Third Quarter Consolidated Financial ConditionTotal investments of$95.45 billion;fixed maturities and short-term securities comprised 94%of total investmentsTotal assets of$134.59 billionTotal debt of$8.03 billion,resulting in a debt-to-total capital ratio of 22.5%(21.2%excluding net unrealized investment losses,net of tax)Total capital returned to shareholders of$496 million,comprising$253 million of share repurchases and$243 million of dividendsShareholders equity of$27.70 billionNet unrealized investment losses of$2.67 billion($2.11 billion after-tax)Book value per common share of$122.00Holding company liquidity of$1.82 billion33CONSOLIDATED OVERVIEWConsolidated Results of Operations Three Months EndedSeptember 30,Nine Months EndedSeptember 30,(in millions,except ratio and per share amounts)2024202320242023Revenues Premiums .$10,704$9,718$31,073$27,788 Net investment income .904 769 2,635 2,144 Fee income .121 112 345 324 Net realized investment gains(losses).55 (65)25 (94)Other revenues .120 101 337 275 Total revenues .11,904 10,635 34,415 30,437 Claims and expenses Claims and claim adjustment expenses .6,996 7,149 21,025 20,335 Amortization of deferred acquisition costs .1,790 1,604 5,166 4,585 General and administrative expenses .1,460 1,312 4,344 3,887 Interest expense .98 98 294 278 Total claims and expenses .10,344 10,163 30,829 29,085 Income before income taxes .1,560 472 3,586 1,352 Income tax expense(benefit).300 68 669 (13)Net income .$1,260$404$2,917$1,365 Net income per share Basic .$5.50$1.75$12.68$5.89 Diluted .$5.42$1.74$12.51$5.83 Combined ratio Loss and loss adjustment expense ratio .64.8s.0g.1r.6%Underwriting expense ratio .28.4 28.0 28.6 28.4 Combined ratio .93.21.0.71.0%The following discussions of the Companys net income and segment income(loss)are presented on an after-tax basis.Discussions of the components of net income and segment income(loss)are presented on a pre-tax basis,unless otherwise noted.Discussions of net income per common share are presented on a diluted basis.OverviewDiluted net income per share of$5.42 in the third quarter of 2024 increased by 211%over diluted net income per share of$1.74 in the same period of 2023.Net income of$1.26 billion in the third quarter of 2024 increased by 212%over net income of$404 million in the same period of 2023.The increase in income before income taxes in the third quarter of 2024 primarily reflected the pre-tax impacts of(i)higher underwriting margins excluding catastrophe losses and prior year reserve development(“underlying underwriting margins”),(ii)net favorable prior year reserve development compared to net unfavorable prior year reserve development in the same period of 2023,(iii)higher net investment income and(iv)net realized investment gains compared to net realized investment losses in the same period of 2023,partially offset by(v)higher catastrophe losses.Net favorable prior year reserve development in the third quarter of 2024 was$126 million.Net unfavorable prior year reserve development in the third quarter of 2023 was$154 million.Catastrophe losses in the third quarters of 2024 and 2023 were$939 million and$850 million,respectively.The higher underlying underwriting margins in the third quarter of 2024 were driven by Personal Insurance and Business Insurance,partially offset by Bond&Specialty Insurance.Income tax expense in the third quarter of 2024 was higher than in the same period of 2023,primarily reflecting the impact of the increase in income before income taxes.THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIES MANAGEMENTS DISCUSSION AND ANALYSIS,Continued34Diluted net income per share of$12.51 in the first nine months of 2024 increased by 115%over diluted net income per share of$5.83 in the same period of 2023.Net income of$2.92 billion in the first nine months of 2024 increased by 114%over net income of$1.37 billion in the same period of 2023.The higher rate of increase in diluted net income per share reflected the impact of share repurchases in recent periods.The increase in income before income taxes primarily reflected the pre-tax impacts of(i)higher underlying underwriting margins,(ii)higher net investment income,(iii)higher net favorable prior year reserve development and(iv)net realized investment gains compared to net realized investment losses in the same period of 2023,partially offset by(v)higher catastrophe losses.Net favorable prior year reserve development in the first nine months of 2024 and 2023 was$447 million and$11 million,respectively.Catastrophe losses in the first nine months of 2024 and 2023 were$3.16 billion and$2.87 billion,respectively.The higher underlying underwriting margins in the first nine months of 2024 were driven by Personal Insurance and Business Insurance,partially offset by Bond&Specialty Insurance.The Company recorded income tax expense in the first nine months of 2024 compared with an income tax benefit in the same period of 2023.The change in income taxes primarily reflected the impact of the increase in income before income taxes and a one-time tax benefit of$211 million in the first quarter of 2023 due to the expiration of the statute of limitations with respect to a tax item.The Company has insurance operations in Canada,the United Kingdom,the Republic of Ireland and throughout other parts of the world as a corporate member of Lloyds,as well as in Brazil and Colombia through joint ventures.Because these operations are conducted in local currencies other than the U.S.dollar,the Company is subject to changes in foreign currency exchange rates.For the three months and nine months ended September 30,2024 and 2023,changes in foreign currency exchange rates impacted reported line items in the statement of income by insignificant amounts.The impact of these changes was not material to the Companys net income or segment income(loss)for the periods reported.RevenuesEarned PremiumsEarned premiums in the third quarter of 2024 were$10.70 billion,$986 million or 10%higher than in the same period of 2023.Earned premiums in the first nine months of 2024 were$31.07 billion,$3.29 billion or 12%higher than in the same period of 2023.In Business Insurance,earned premiums in the third quarter and first nine months of 2024 increased by 10%and 12%,respectively,over the same periods of 2023.In Bond&Specialty Insurance,earned premiums in both the third quarter and first nine months of 2024 increased 8%over the same periods of 2023.In Personal Insurance,earned premiums in the third quarter and first nine months of 2024 increased by 10%and 12%,respectively,over the same periods of 2023.Factors contributing to the changes in earned premiums in each segment are discussed in more detail in the segment discussions that follow.Net Investment IncomeThe following table sets forth information regarding the Companys investments.Three Months EndedSeptember 30,Nine Months EndedSeptember 30,(dollars in millions)2024202320242023Average investments(1).$97,736$91,591$96,042$90,048 Pre-tax net investment income .904 769 2,635 2,144 After-tax net investment income .742 640 2,167 1,791 Average pre-tax yield(2).3.7%3.4%3.7%3.2%Average after-tax yield(2).3.0%2.8%3.0%2.7%_(1)Excludes net unrealized investment gains and losses and reflects cash,receivables for investment sales,payables on investment purchases and accrued investment income.(2)Excludes net realized and net unrealized investment gains and losses.Net investment income in the third quarter of 2024 was$904 million,$135 million or 18%higher than in the same period of 2023.Net investment income in the first nine months of 2024 was$2.64 billion,$491 million or 23%higher than in the same period of 2023.Net investment income from fixed maturity investments in the third quarter and first nine months of 2024 was$749 million and$2.15 billion,respectively,$118 million and$353 million higher,respectively,than in the same periods of 2023.The increases in both periods of 2024 primarily resulted from higher long-term average yields and a higher average level of fixed maturity investments.Net investment income from short-term securities in the third quarter and first nine months of 2024 was$77 million and$217 million,respectively,$10 million and$48 million higher,respectively,than in the same periods of 2023.The increase in the third quarter of 2024 primarily resulted from a higher level of short-term investments.The increase in the first nine months of 2024 primarily resulted from a higher level of short-term investments and higher short-term THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIES MANAGEMENTS DISCUSSION AND ANALYSIS,Continued35average yields.The Companys remaining investment portfolios had net investment income of$90 million and$306 million,respectively,in the third quarter and first nine months of 2024,$8 million and$93 million higher,respectively,than in the same periods of 2023.The increases in both periods of 2024 primarily reflected higher private equity partnership returns.Included in other investments are private equity,hedge fund and real estate partnerships that are accounted for under the equity method of accounting and typically report their financial statement information to the Company one month to three months following the end of the reporting period.Accordingly,net investment income from these other investments is generally reflected in the Companys financial statements on a quarter lag basis.Fee IncomeFee income in the third quarter of 2024 was$121 million,$9 million higher than in the same period of 2023.Fee income in the first nine months of 2024 was$345 million,$21 million higher than in the same period of 2023.The National Accounts market in Business Insurance is the primary source of the Companys fee-based business and is discussed in the Business Insurance segment discussion that follows.Net Realized Investment Gains(Losses)The following table sets forth information regarding the Companys net realized investment gains(losses).Three Months EndedSeptember 30,Nine Months EndedSeptember 30,(in millions)2024202320242023Impairment gains(losses):Fixed maturities .$(5)$(1)$(8)$(2)Net realized investment gains(losses)on equity securities still held .51 (14)102 (11)Other net realized investment gains(losses),including from sales .9 (50)(69)(81)Total .$55$(65)$25$(94)Net realized investment gains on equity securities still held of$51 million and$102 million,respectively,in the third quarter and first nine months of 2024 were driven by the impact of changes in fair value attributable to favorable equity markets.Net realized investment losses on equity securities still held of$14 million in the third quarter of 2023 were driven by the impact of changes in fair value attributable to unfavorable equity markets.Net realized investment losses on equity securities still held of$11 million in the first nine months of 2023 were driven by a net unfavorable change in fair value on the individual securities held in the Companys portfolio.Other RevenuesOther revenues in the third quarter of 2024 were$120 million,$19 million higher than in the same period of 2023.Other revenues in the first nine months of 2024 were$337 million,$62 million higher than in the same period of 2023.Other revenues include revenues from Simply Business,installment premium charges and other policyholder service charges.Claims and ExpensesClaims and Claim Adjustment ExpensesClaims and claim adjustment expenses in the third quarter of 2024 were$7.00 billion,$153 million or 2%lower than in the same period of 2023,primarily reflecting the impacts of(i)net favorable prior year reserve development compared to net unfavorable prior year reserve development in the same period of 2023 and(ii)lower non-catastrophe weather-related losses,lower physical damage losses in the automobile product line and lower non-weather water and fire losses in the homeowners and other product line in Personal Insurance,partially offset by(iii)higher business volumes,(iv)higher catastrophe losses and(v)loss cost trends in Business Insurance and Bond&Specialty Insurance.Catastrophe losses in the third quarter of 2024 primarily resulted from Hurricane Helene and severe wind and hail storms in multiple states.Catastrophe losses in the third quarter of 2023 primarily resulted from numerous severe wind and hail storms in multiple states.THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIES MANAGEMENTS DISCUSSION AND ANALYSIS,Continued36Claims and claim adjustment expenses in the first nine months of 2024 were$21.03 billion,$690 million or 3%higher than in the same period of 2023,primarily reflecting the impacts of(i)higher business volumes,(ii)higher catastrophe losses,(iii)loss cost trends and higher other losses in Business Insurance and(iv)loss cost trends in Bond&Specialty Insurance,partially offset by(v)higher net favorable prior year reserve development,(vi)lower physical damage losses in the automobile product line,lower non-catastrophe weather-related losses and lower non-weather water and fire losses in the homeowners and other product line in Personal Insurance and(vii)the comparison to an elevated level of losses in the same period of 2023 from both a small number of surety accounts and loss activity related to the disruption in the banking sector in Bond&Specialty Insurance.Catastrophe losses in the first nine months of 2024 included the third quarter events described above,as well as numerous severe wind and hail storms in multiple states in the first six months of 2024.Catastrophe losses in the first nine months of 2023 included the third quarter events described above,as well as numerous severe wind and hail storms in multiple states in the first six months of 2023.Factors contributing to net prior year reserve development during the third quarters and first nine months of 2024 and 2023 are discussed in more detail in note 7 of the notes to the unaudited consolidated financial statements.Significant Catastrophe LossesThe following table presents the amount of losses recorded by the Company for significant catastrophes that occurred in the three months and nine months ended September 30,2024 and 2023,the amount of net unfavorable(favorable)prior year reserve development recognized in the three months and nine months ended September 30,2024 and 2023 for significant catastrophes that occurred in 2023 and 2022,and the estimate of ultimate losses for those catastrophes at September 30,2024 and December 31,2023.For purposes of the table,a significant catastrophe is an event for which the Company estimates its ultimate losses will be$100 million or more after reinsurance and before taxes.The Companys threshold for disclosing catastrophes is primarily determined at the reportable segment level and for 2024 ranged from$20 million to$30 million of losses before reinsurance and taxes.For the Companys definition of a catastrophe,refer to“Part IIItem 7Managements Discussion and Analysis of Financial Condition and Results of Operations Consolidated Overview”in the Companys 2023 Annual Report.THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIES MANAGEMENTS DISCUSSION AND ANALYSIS,Continued37 Losses Incurred/Unfavorable(Favorable)Prior Year Reserve Development Three Months EndedSeptember 30,Nine Months EndedSeptember 30,Estimated Ultimate Losses(in millions,pre-tax and net of reinsurance)(1)2024202320242023September 30,2024December 31,20232022PCS Serial Number:33 Severe wind and hail storms .(1)17 (6)9 132 13835 Severe wind and hail storms .(1)3 (1)184 18443 Severe wind and hail storms .3 3 (11)119 11661 Hurricane Ian .(2)(2)(2)(76)149 15173 Winter storm .3 1 12 169 682 6702023PCS Serial Number:25 Severe wind and hail storms .(1)(3)152 150 15332 Severe wind and hail storms .(2)(2)138 138 14033 Severe wind and hail storms .(2)18(6)190 193 19935 Severe wind and hail storms .1 (6)(2)115 138 14038 Severe wind and hail storms .3 n/a 5 n/a 115 11042 Severe wind and hail storms .2 (2)5 144 138 13348 Severe wind and hail storms .1 (9)(5)140 145 15049 Severe wind and hail storms .2 (6)(2)149 131 13351 Severe wind and hail storms .(12)10(33)280 232 26563 Severe wind and hail storms .14 120 7 120 132 12575 Severe wind and hail storms .(6)196(17)196 173 1902024PCS Serial Number:26 Severe wind and hail storms .15 n/a 266 n/a 266 n/a39 Severe wind and hail storms .35 n/a 256 n/a 256 n/a42 Severe wind and hail storms .(30)n/a 159 n/a 159 n/a44 Severe wind and hail storms .(22)n/a 182 n/a 182 n/a45 Severe wind and hail storms .(13)n/a 151 n/a 151 n/a46 Severe wind and hail storms .29 n/a 187 n/a 187 n/a61 Severe wind and hail storms .159 n/a 159 n/a 159 n/a77 Hurricane Helene .547 n/a 547 n/a 547 n/a_n/a:not applicable.(1)Amounts are reported pre-tax and net of recoveries under all applicable reinsurance treaties,except for the Companys 2022 Underlying Property Aggregate Catastrophe Excess-of-Loss Treaty,the terms of which are described in“Part IItem 1Business”in the Companys 2022 Annual Report.The treaty covered the accumulation of certain property losses arising from one or multiple occurrences(both catastrophe and non-catastrophe events)for the period January 1,2022 through and including December 31,2022.As a result,the benefits from those treaties are not included in the table above as the allocation of the treatys benefit to each identified catastrophe changes each time there are additional events or changes in estimated losses from any covered event.Amortization of Deferred Acquisition CostsAmortization of deferred acquisition costs in the third quarter of 2024 was$1.79 billion,$186 million or 12%higher than in the same period of 2023.Amortization of deferred acquisition costs in the first nine months of 2024 was$5.17 billion,$581 million or 13%higher than in the same period of 2023.The increases in both periods were generally consistent with the increases in earned premiums.Amortization of deferred acquisition costs is discussed in more detail in the segment discussions that follow.THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIES MANAGEMENTS DISCUSSION AND ANALYSIS,Continued38General and Administrative ExpensesGeneral and administrative expenses in the third quarter of 2024 were$1.46 billion,$148 million or 11%higher than in the same period of 2023.General and administrative expenses in the first nine months of 2024 were$4.34 billion,$457 million or 12%higher than in the same period of 2023.The increases in both periods of 2024 primarily reflected the impact of costs associated with higher business volumes.General and administrative expenses are discussed in more detail in the segment discussions that follow.Interest ExpenseInterest expense in the third quarter and first nine months of 2024 was$98 million and$294 million,respectively,compared with$98 million and$278 million,respectively,in the same periods of 2023.Income Tax Expense(Benefit)Income tax expense in the third quarter of 2024 was$300 million,$232 million or 341%higher than in the same period of 2023,primarily reflecting the impact of the$1.09 billion increase in income before income taxes in the third quarter of 2024.Income tax expense in the first nine months of 2024 was$669 million,compared with an income tax benefit of$13 million in the same period of 2023.The change in income taxes primarily reflected the impact of the$2.23 billion increase in income before income taxes in the first nine months of 2024 and the one-time tax benefit of$211 million in the first quarter of 2023 due to the expiration of the statute of limitations with respect to a tax item.The Companys effective tax rate was 19%and 14%in the third quarters of 2024 and 2023,respectively.The Companys effective tax rate was 19%and(1)%in the first nine months of 2024 and 2023,respectively.The effective tax rate in the first nine months of 2023 was reduced by the impact of the one-time tax benefit discussed above.The effective tax rate for all periods reflected the impact of tax-exempt investment income on the calculation of the Companys income tax provision.Combined RatioThe combined ratio of 93.2%in the third quarter of 2024 was 7.8 points lower than the combined ratio of 101.0%in the same period of 2023.The loss and loss adjustment expense ratio of 64.8%in the third quarter of 2024 was 8.2 points lower than the loss and loss adjustment expense ratio of 73.0%in the same period of 2023.The underwriting expense ratio of 28.4%in the third quarter of 2024 was 0.4 points higher than the underwriting expense ratio of 28.0%in the same period of 2023.Catastrophe losses in the third quarters of both 2024 and 2023 accounted for 8.8 points of the combined ratio.Net favorable prior year reserve development in the third quarter of 2024 provided 1.2 points of benefit to the combined ratio.Net unfavorable prior year reserve development in the third quarter of 2023 accounted for 1.6 points of the combined ratio.The combined ratio excluding prior year reserve development and catastrophe losses(“underlying combined ratio”)in the third quarter of 2024 was 5.0 points lower than the 2023 ratio on the same basis,primarily reflecting the impacts of(i)the benefit of earned pricing and(ii)lower non-catastrophe weather-related losses,lower physical damage losses in the automobile product line and lower non-weather water and fire losses in the homeowners and other product line in Personal Insurance.The combined ratio of 95.7%in the first nine months of 2024 was 5.3 points lower than the combined ratio of 101.0%in the same period of 2023.The loss and loss adjustment expense ratio of 67.1%for the first nine months of 2024 was 5.5 points lower than the loss and loss adjustment expense ratio of 72.6%in the same period of 2023.The underwriting expense ratio of 28.6%for the first nine months of 2024 was 0.2 points higher than the underwriting expense ratio of 28.4%in the same period of 2023.Catastrophe losses in the first nine months of 2024 and 2023 accounted for 10.2 points and 10.3 points,respectively,of the combined ratio.Net favorable prior year reserve development in the first nine months of 2024 and 2023 provided 1.5 points and 0.1 points of benefit,respectively,to the combined ratio.The underlying combined ratio in the first nine months of 2024 was 3.8 points lower than the 2023 ratio on the same basis,primarily reflecting the impacts of(i)the benefit of earned pricing,(ii)lower physical damage losses in the automobile product line,lower non-catastrophe weather-related losses and lower non-weather water and fire losses in the homeowners and other product line in Personal Insurance and(iii)the comparison to an elevated level of losses in the same period of 2023 from both a small number of surety accounts and loss activity related to the disruption in the banking sector in Bond&Specialty Insurance,partially offset by(iv)higher other losses in Business Insurance.The combined ratio continues to be impacted by the tort environment,including more aggressive attorney involvement in insurance claims.THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIES MANAGEMENTS DISCUSSION AND ANALYSIS,Continued39Written PremiumsConsolidated gross and net written premiums were as follows:Gross Written Premiums Three Months EndedSeptember 30,Nine Months EndedSeptember 30,(in millions)2024202320242023Business Insurance .$6,173$5,685$18,725$17,175 Bond&Specialty Insurance .1,165 1,082 3,368 3,127 Personal Insurance .4,811 4,496 13,231 12,215 Total .$12,149$11,263$35,324$32,517 Net Written Premiums Three Months EndedSeptember 30,Nine Months EndedSeptember 30,(in millions)2024202320242023Business Insurance .$5,517$5,080$16,652$15,412 Bond&Specialty Insurance .1,072 1,003 3,055 2,853 Personal Insurance .4,728 4,410 12,907 11,942 Total .$11,317$10,493$32,614$30,207 Gross and net written premiums in the third quarter of 2024 both increased by 8%over the same period of 2023.Gross and net written premiums in the first nine months of 2024 increased by 9%and 8%,respectively,over the same period of 2023.Factors contributing to the changes in gross and net written premiums in each segment are discussed in more detail in the segment discussions that follow.THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIES MANAGEMENTS DISCUSSION AND ANALYSIS,Continued40RESULTS OF OPERATIONS BY SEGMENTBusiness InsuranceResults of Business Insurance were as follows:Three Months EndedSeptember 30,Nine Months EndedSeptember 30,(dollars in millions)2024202320242023Revenues Earned premiums .$5,474$4,956$15,802$14,077 Net investment income .642 551 1,883 1,533 Fee income .109 102 315 299 Other revenues .89 71 243 185 Total revenues .6,314 5,680 18,243 16,094 Total claims and expenses .5,454 5,111 15,634 14,327 Segment income before income taxes .860 569 2,609 1,767 Income tax expense .162 101 491 141 Segment income .$698$468$2,118$1,626 Loss and loss adjustment expense ratio .66.6p.0e.5h.0%Underwriting expense ratio .29.2 29.1 29.6 29.7 Combined ratio .95.8.1.1.7%OverviewSegment income in the third quarter of 2024 was$698 million,$230 million or 49%higher than segment income of$468 million in the same period of 2023.The increase in segment income before income taxes primarily reflected the pre-tax impacts of(i)lower net unfavorable prior year reserve development,(ii)higher underlying underwriting margins and(iii)higher net investment income,partially offset by(iv)higher catastrophe losses.Net unfavorable prior year reserve development in the third quarters of 2024 and 2023 was$91 million and$263 million,respectively.Catastrophe losses in the third quarters of 2024 and 2023 were$340 million and$203 million,respectively.The higher underlying underwriting margins primarily reflected the impacts of(i)higher business volumes and(ii)the benefit of earned pricing,partially offset by(iii)higher general and administrative expenses.Income tax expense in the third quarter of 2024 was higher than in the same period of 2023,primarily reflecting the impact of the increase in segment income before income taxes.Segment income in the first nine months of 2024 was$2.12 billion,$492 million or 30%higher than segment income of$1.63 billion in the same period of 2023.The increase in segment income before income taxes primarily reflected the pre-tax impacts of(i)higher net investment income,(ii)higher underlying underwriting margins and(iii)lower net unfavorable prior year reserve development,partially offset by(iv)higher catastrophe losses.Net unfavorable prior year reserve development in the first nine months of 2024 and 2023 was$57 million and$345 million,respectively.Catastrophe losses in the first nine months of 2024 and 2023 were$938 million and$798 million,respectively.The higher underlying underwriting margins primarily reflected the impacts of(i)higher business volumes and(ii)the benefit of earned pricing,partially offset by(iii)higher other losses and(iv)higher general and administrative expenses.Income tax expense in the first nine months of 2024 was higher than in the same period of 2023,primarily reflecting the impact of the increase in income before income taxes and a one-time tax benefit of$171 million in the first quarter of 2023 due to the expiration of the statute of limitations with respect to a tax item.RevenuesEarned PremiumsEarned premiums in the third quarter of 2024 were$5.47 billion,$518 million or 10%higher than in the same period of 2023.Earned premiums in the first nine months of 2024 were$15.80 billion,$1.73 billion or 12%higher than in the same period of 2023.The increases in both periods of 2024 primarily reflected the increase in net written premiums over the preceding twelve months.THE TRAVELERS COMPANIES,INC.AND SUBSIDIARIES MANAGEMENTS DISCUSSION AND ANALYSIS,Continued41Net Investment IncomeNet investment income in the third quarter of 2024 was$642 million,$91 million or 17%higher than in the same period of 2023.Net investment income in the 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