EX-99.2 3 d330763dex992.htm EXHIBIT 99.2 Exhibit 99.2

Exhibit 99.2

First Quarter Report - 2012

 

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF EARNINGS

(In millions of United States dollars, except for per share amounts - Unaudited)

 

         

Three Months

Ended March 31

  
      Note       

 

2012

      2011  

 

Revenues

    6        $       1,349       $       1,216   

 

Mine operating costs

         

 

Production costs

    4          (559)         (451)   

 

Depreciation and depletion

    5(c) & 6          (158)         (164)   
            (717)         (615)   

 

Earnings from mine operations

         632         601   

 

Exploration and evaluation costs

    5(b)          (19)         (12)   

 

Share of net (losses) and earnings of associates

    5(g)          (22)         2   

 

Corporate administration

           (72)         (58)   

 

Earnings from operations and associates

    6          519         533   

 

(Losses) gains on securities

    8(b)          (5)         320   

 

Gains (losses) on derivatives, net

    8(a)          55         (57)   

 

Finance costs

         (6)         (6)   

 

Other income

           14         22   

 

Earnings before taxes

    6(g)          577         812   

 

Income taxes

    7 & 8(c)(iii)          (98)         (161)   

 

Net earnings attributable to shareholders of Goldcorp Inc.

         $ 479       $ 651   

 

Net earnings per share

         

 

Basic

    10        $ 0.59       $ 0.82   

 

Diluted

    10          0.51         0.81   

 

The accompanying notes form an integral part of these unaudited condensed interim consolidated financial statements.

 

GOLDCORP      1

First Quarter Report - 2012

 

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions of United States dollars - Unaudited)

 

         

Three Months

Ended March 31

  
      Note       

 

2012

      2011  

 

Net earnings attributable to shareholders of Goldcorp Inc.

         $             479       $             651   

 

Other comprehensive income (loss), net of tax

    8(b)          

Mark-to-market gains (losses) on securities

         12         (63)   

Reclassification adjustment for impairment losses included in net earnings

         5         -   

Reclassification adjustment for realized gain on disposition of securities included in net earnings

           -         (295)   
            17         (358)   

 

Total comprehensive income attributable to shareholders of Goldcorp Inc.

        

 

$

 

496

 

  

   

 

$

 

293

 

  

 

The accompanying notes form an integral part of these unaudited condensed interim consolidated financial statements.

 

GOLDCORP      2

First Quarter Report - 2012

 

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions of United States dollars - Unaudited)

 

         

Three Months

Ended March 31

  
      Note       

 

2012

      2011  

Operating Activities

         

 

Net earnings from continuing operations

       $ 479       $ 651   

 

Adjustments for:

         

 

Reclamation expenditures

         (5)         (4)   

 

Losses (gains) on securities

    8(b)          5         (320)   

 

Items not affecting cash

         

 

Depreciation and depletion

    5(c) & 6          158         164   

 

Share of net losses and (earnings) of associates

    5(g)          22         (2)   

 

Share-based compensation expense

    9(c) & (d)          28         22   

 

Unrealized (gains) losses on derivatives, net

    8(a)          (55)         49   

 

Accretion of reclamation and closure cost obligations

         4         3   

 

Deferred income tax recovery

    7          (155)         (100)   

 

Other

         (1)         -   

 

 

Change in working capital

    11          (158)         123   

 

Net cash provided by operating activities

           322         586   

 

 

Investing Activities

         

Expenditures on mining interests

    6(e)          (540)         (346)   

Deposits on mining interests expenditures

         (50)         (6)   

 

Interest paid

    5(a) & 6(e)          (9)         (9)   

 

Repayment of capital investment in Pueblo Viejo

    5(d)          -         64   

 

Purchases of securities and other investments

    11          (14)         (6)   

 

Proceeds from sales of securities and other investments, net

    8(b) & 11          273         519   

 

Other

           8         (4)   

Net cash (used in) provided by investing activities

           (332)         212   

Net cash provided by investing activities of discontinued operations

    11          5         -   

 

 

Financing Activities

         

 

Common shares issued, net of issue costs

    9(a)          6         11   

 

Dividends paid to shareholders

    10          (109)         (75)   

 

Net cash used in financing activities

           (103)         (64)   

 

Effect of exchange rate changes on cash and cash equivalents

           -         (10)   

 

 

(Decrease) increase in cash and cash equivalents

         (108)         724   

 

Cash and cash equivalents, beginning of period

           1,502         556   

 

 

Cash and cash equivalents, end of period

    11        $       1,394       $           1,280   

Supplemental cash flow information (note 11)

 

The accompanying notes form an integral part of these unaudited condensed interim consolidated financial statements.

 

GOLDCORP      3

First Quarter Report - 2012

 

CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS

(In millions of United States dollars - Unaudited)

 

      Note       

 

March 31
2012

      December 31
2011		  

 

Assets

         

 

Current assets

         

 

Cash and cash equivalents

    11        $ 1,394       $ 1,502   

 

Accounts receivable

    8(a)          691         473   

 

Inventories and stockpiled ore

         569         574   

 

Notes receivable

         35         40   

 

Other

           197         361   
            2,886         2,950   

 

Mining interests

         

 

Owned by subsidiaries

    5          22,930         22,673   

 

Investments in associates

    5          1,652         1,536   
     5          24,582         24,209   

 

Goodwill

         1,737         1,737   

 

Investments in securities

         221         207   

 

Note receivable

         42         42   

 

Deposits on mining interests expenditures

         106         73   

 

Other

           177         156   

 

Total assets

    6        $ 29,751       $ 29,374   

 

Liabilities

         

 

Current liabilities

         

 

Accounts payable and accrued liabilities

       $ 651       $ 619   

 

Income taxes payable

         140         48   

 

Derivative liabilities

    8(a)          109         65   

 

Other

           25         39   
        925         771   

 

Deferred income taxes

         5,405         5,560   

 

Long-term debt

         748         737   

 

Derivative liabilities

    8(a)          185         237   

 

Provisions

         382         375   

 

Income taxes payable

         113         113   

 

Other

           91         96   

 

Total liabilities

           7,849         7,889   

Equity

         

 

 

Shareholders’ equity

         

 

Common shares, stock options and restricted share units

         17,022         16,992   

 

Investment revaluation reserve

         60         43   

 

Retained earnings

           4,607         4,237   
        21,689         21,272   

 

 

Non-controlling interests

           213         213   

 

Total equity

           21,902         21,485   

 

Total liabilities and equity

         $       29,751       $    29,374   

 Commitments and contingencies (notes 8(c)(i) & (ii), & 12)

 

The accompanying notes form an integral part of these unaudited condensed interim consolidated financial statements.

 

GOLDCORP      4

First Quarter Report - 2012

 

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(In millions of United States dollars, shares in thousands - Unaudited)

 

    Common Shares                                      
    

Shares issued,

fully paid with

no par value

     Amount    

Stock options

and restricted

share units

    

Investment

revaluation
reserve

    

Retained

earnings

    

Attributable to

shareholders

of Goldcorp Inc.

    

Non-controlling

interests

     Total   

At January 1, 2012

     809,941       $     16,793        $       199        $         43      $     4,237        $          21,272          $            213      $ 21,485    

Total comprehensive income

                

Net earnings

     -         -        -        -        479        479          -        479    

Other comprehensive income

     -         -        -        17        -        17          -        17    
      -         -        -        17        479        496          -        496    

Stock options exercised and restricted share units vested (notes 9(a) & (b))

     331         15        (9)        -        -        6          -        6    

Share-based compensation expense (note 9(c))

     -         -        24        -        -        24          -        24    

Dividends (note 10)

     -         -        -        -        (109)        (109)          -        (109)    

At March 31, 2012

     810,272       $ 16,808        $       214        $         60      $ 4,607        $          21,689          $            213      $       21,902    
    Common Shares                                      
     Shares issued,
fully paid with
no par value		     Amount    

Stock options

and restricted
share units

     Investment
revaluation
reserve		     Retained
earnings		     Attributable to
shareholders of
Goldcorp Inc.		     Non-controlling
interests		     Total   

At January 1, 2011

     798,374       $ 16,258      $ 149        $ 460      $ 2,686      $ 19,553          $            213      $ 19,766    

Total comprehensive income

                

Net earnings

     -         -        -          -        651        651          -        651    

Other comprehensive loss

     -         -        -          (358)        -        (358)          -        (358)    
      -         -        -          (358)        651        293          -        293    

Stock options exercised and restricted share units issued and vested (notes 9(a) & (b))

     389         15        (4)          -        -        11          -        11    

Share-based compensation expense (note 9(c))

     -         -        20          -        -        20          -        20    

Dividends (note 10)

     -         -        -          -        (75)        (75)          -        (75)    

At March 31, 2011

     798,763       $ 16,273      $ 165        $ 102      $ 3,262      $ 19,802          $            213      $ 20,015    

 

The accompanying notes form an integral part of these unaudited condensed interim consolidated financial statements.

 

GOLDCORP      5

First Quarter Report - 2012

(In millions of United States dollars, except where noted - Unaudited)

 

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2012

 

1.

DESCRIPTION OF BUSINESS AND NATURE OF OPERATIONS

Goldcorp Inc. is the ultimate parent company of its consolidated group (“Goldcorp” or “the Company”). The Company is incorporated and domiciled in Canada, and its registered office is at Suite 3400 – 666 Burrard Street, Vancouver, British Columbia, V6C 2X8.

The Company is a gold producer engaged in the operation, exploration, development and acquisition of precious metal properties in Canada, the United States, Mexico, and Central and South America. The Company’s current sources of operating cash flows are primarily from the sale of gold, silver, copper, lead and zinc.

At March 31, 2012, the Company’s principal producing mining properties were comprised of the Red Lake, Porcupine and Musselwhite gold mines in Canada; the Peñasquito gold/silver/lead/zinc mine and the Los Filos and El Sauzal gold mines in Mexico; the Marlin gold/silver mine in Guatemala; the Alumbrera gold/copper mine (37.5% interest) in Argentina; and the Marigold (66.7% interest) and Wharf gold mines in the United States.

The Company’s significant development projects at March 31, 2012 were comprised of the Cerro Negro gold project in Argentina; the Éléonore and Cochenour gold projects in Canada; the Pueblo Viejo gold project (40% interest) in the Dominican Republic (note 12(b)); the El Morro gold/copper project (70% interest) in Chile (note 12(a)); the Noche Buena and Camino Rojo gold/silver projects in Mexico and the Cerro Blanco gold/silver project in Guatemala. The Company also owns a 35.3% equity interest in Primero Mining Corp. (“Primero”), a publicly traded company engaged in the production of precious metals with operations (primarily the San Dimas gold/silver mine (“San Dimas”)) in Mexico, and a 40.5% equity interest in Tahoe Resources Inc. (“Tahoe”), a publicly traded company focused on the exploration and development of resource properties, with a principal objective to develop the Escobal silver project in Guatemala (“Escobal”).

 

2.

BASIS OF PREPARATION

These unaudited condensed interim consolidated financial statements have been prepared in accordance with IAS 34 – Interim Financial Reporting as issued by the International Accounting Standards Board (“IASB”). Accordingly, certain disclosures included in annual financial statements prepared in accordance with International Financial Reporting Standards (“IFRSs”) as issued by the IASB have been condensed or omitted and these unaudited condensed interim consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2011.

The accounting policies applied in preparation of these unaudited condensed interim consolidated financial statements are consistent with those applied and disclosed in the Company’s consolidated financial statements for the year ended December 31, 2011, with the exception of certain amendments to accounting standards issued by the IASB, which were applicable from January 1, 2012. These amendments did not have a significant impact on the Company’s unaudited condensed interim consolidated financial statements.

The Company’s management makes judgements in its process of applying the Company’s accounting policies in the preparation of its unaudited condensed interim consolidated financial statements. In addition, the preparation of the financial data requires that the Company’s management make assumptions and estimates of effects of uncertain future events on the carrying amounts of the Company’s assets and liabilities at the end of the reporting period and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates as the estimation process is inherently uncertain. Estimates are reviewed on an ongoing basis based on historical experience and other factors that are considered to be relevant under the circumstances. Revisions to estimates and the resulting effects on the carrying amounts of the Company’s assets and liabilities are accounted for prospectively. The critical judgements and estimates applied in the preparation of the Company’s unaudited

 

GOLDCORP       6

First Quarter Report - 2012

(In millions of United States dollars, except where noted - Unaudited)

 

condensed interim consolidated financial statements are consistent with those applied and disclosed in notes 5 and 6 to the Company’s consolidated financial statements for the year ended December 31, 2011.

The Company’s interim results are not necessarily indicative of its results for a full year.

Basis of consolidation

These unaudited condensed interim consolidated financial statements include the accounts of the Company and its subsidiaries. All amounts are expressed in millions of United States (“US”) dollars, unless otherwise stated. References to C$ are to Canadian dollars. The principal subsidiaries (mine site and operating segments) of Goldcorp and their geographic locations at March 31, 2012 were as follows:

 

Direct parent company (mine site and operating

segment) (note 6)

    Location   

Ownership

interest

   

Mining properties and

development projects owned

(note 5)

Red Lake Gold Mines Ontario Partnership (“Red Lake”)

    Canada    100%    Red Lake and Campbell Complexes, and Cochenour project

Goldcorp Canada Ltd./Goldcorp Inc. (“Porcupine”)

    Canada    100%    Porcupine mines

Goldcorp Canada Ltd./Goldcorp Inc. (“Musselwhite”)

    Canada    100%    Musselwhite mine

Les Mines Opinaca Ltée (“Éléonore”)

    Canada    100%    Éléonore project

Minera Peñasquito S.A. de C.V. and Camino Rojo S.A.

de C.V. (“Peñasquito”)

    Mexico    100%    Peñasquito mine, and Camino Rojo and Noche Buena projects

Desarrollos Mineros San Luis S.A. de C.V. (“Los Filos”)

    Mexico    100%    Los Filos mines

Minas de la Alta Pimeria S.A. de C.V. (“El Sauzal”)

    Mexico    100%    El Sauzal mine

Montana Exploradora de Guatemala S.A. (“Marlin”)

    Guatemala    100%    Marlin mine (note 12(c))

Entre Mares de Guatemala S.A. (“Cerro Blanco”)

    Guatemala    100%    Cerro Blanco project

Oroplata S.A. (“Cerro Negro”)

    Argentina    100%    Cerro Negro project

Wharf Resources (USA) Inc. (“Wharf”)

    United States    100%    Wharf mine

Sociedad Contractual Minera El Morro (“El Morro”)

    Chile    70%    El Morro project (note 12(a))

 

Intercompany transactions and balances between the Company and its subsidiaries are eliminated.

 

These unaudited condensed interim consolidated financial statements also include the following significant investments in associates that are accounted for using the equity method and investments in a jointly controlled entity and jointly controlled assets that are proportionately consolidated:

 

      Location   

Ownership

interest

   

Mining properties and

development projects owned

(note 5)

Associates

         

 

Pueblo Viejo Dominicana Corporation (“Pueblo Viejo”)

   

 

Dominican

Republic

   

 

40%

   

 

Pueblo Viejo project (note 12(b))

 

Primero Mining Corp.

   

 

Mexico

   

 

35.3%

   

 

San Dimas mine

 

Tahoe Resources Inc.

   

 

Guatemala

   

 

40.5%

   

 

Escobal

Jointly controlled entity

         

 

Minera Alumbrera Limited (“Alumbrera”)

   

 

Argentina

   

 

37.5%

   

 

Alumbrera mine

Jointly controlled assets

         

 

Marigold Mining Company (“Marigold”)

   

 

United States

   

 

66.7%

   

 

Marigold mine

Intercompany transactions between the Company and its jointly controlled entity and jointly controlled assets are eliminated to the extent of the Company’s interest. Intercompany transactions between the Company and its associates are recognized only to the

 

GOLDCORP       7

First Quarter Report - 2012

(In millions of United States dollars, except where noted - Unaudited)

 

extent of unrelated investors’ interests in the associates. Intercompany balances between the Company and its associates are not eliminated. Where necessary, adjustments have been made to the financial statements of the Company’s subsidiaries, associates and joint ventures, to conform the significant accounting policies used in their preparation to those used by the Company.

 

3.

CHANGES IN ACCOUNTING STANDARDS

Accounting standards effective in 2013 and 2015 are disclosed in the Company’s consolidated financial statements for the year ended December 31, 2011. The Company anticipates that the most significant of these standards relate to the following:

Consolidation

IFRS 10 – Consolidated Financial Statements (“IFRS 10”), IFRS 11 – Joint Arrangements (“IFRS 11”), IFRS 12 – Disclosure of Interests in Other Entities (“IFRS 12”) and amendments to IAS 27 – Separate Financial Statements (“IAS 27”) and IAS 28 – Investments in Associates and Joint Ventures (“IAS 28”), effective for annual periods beginning on or after January 1, 2013. The suite of five new standards establishes control as the basis for consolidation and provides enhanced disclosure requirements for the Company’s interests in other entities and the effects of those interests on the Company’s consolidated financial statements.

The Company has undertaken a preliminary assessment of the impact that IFRS 11 is expected to have on its consolidated financial statements. As a result of the application of IFRS 11, the Company anticipates that its 37.5% interest in Alumbrera, which is currently proportionately consolidated in the Company’s unaudited condensed interim consolidated financial statements, will be required to be accounted for using the equity method and the Company’s share of net earnings and net assets will be separately disclosed in the Consolidated Statements of Earnings and Consolidated Balance Sheets, respectively. For the three months ended March 31, 2012, the net effect of accounting for Alumbrera using the equity method would be to remove the Company’s share of revenues and expenses of Alumbrera and increase Goldcorp’s share of earnings of equity investees by $36 million with no impact to net earnings (note 6).

The impact on the Condensed Interim Consolidated Balance Sheet for the three months ended March 31, 2012 would be a net increase to mining interests of $26 million and a decrease to other assets and total liabilities of $251 million and $225 million, respectively. Using the equity method to account for the Company’s share of Alumbrera’s operating, financing and investing cash flows would result in an increase to operating cash flows of $15 million and an increase to investing activities of $5 million for the three months ended March 31, 2012. The Company does not anticipate IFRS 10, IFRS 12 and the revised IAS 27 and IAS 28 to have a significant impact on the consolidated financial statements.

Stripping costs in the production phase of a surface mine

IFRIC 20 – Stripping Costs in the Production Phase of a Surface Mine, effective for annual periods beginning on or after January 1, 2013, clarifies the requirements for accounting for the costs of stripping activity in the production phase when two benefits accrue: (i) usable ore that can be used to produce inventory; and (ii) improved access to further quantities of material that will be mined in future periods. The Company is currently evaluating the impact the new guidance is expected to have on its consolidated financial statements.

Financial instruments

The IASB intends to replace IAS 39 – Financial Instruments: Recognition and Measurement (“IAS 39”) in its entirety with IFRS 9 – Financial Instruments (“IFRS 9”) and which will be effective for annual periods commencing on or after January 1, 2015. IFRS 9 is intended to reduce the complexity for the classification and measurement of financial instruments. The Company is currently evaluating the impact the final standard is expected to have on its consolidated financial statements.

 

GOLDCORP       8

First Quarter Report - 2012

(In millions of United States dollars, except where noted - Unaudited)

 

4.

PRODUCTION COSTS

 

Three months ended March 31  

 

2012

     

 

2011

  

 

Raw materials and consumables

   $               258       $           240   

 

Salaries and employee benefits (i)

     121         105   

 

Contractors

     87         70   

 

Royalties

     34         37   

 

Revisions in estimates and liabilities incurred on reclamation and closure cost obligations

     -         (7)   

 

Change in inventories (ii)

     11         (41)   

 

Other

     48         47   
    $ 559       $ 451   

 

  (i) 

Excludes $16 million (2011 – $14 million) of salaries and employee benefits included in corporate administration expense.

 

  (ii) 

The change in inventories represents a decrease in finished goods inventories of $33 million, a decrease of $1 million in stockpiled ore, and an increase of $23 million in work-in-process inventories (2011 – an increase of $36 million, a decrease of $1 million, and an increase of $6 million, respectively).

 

5.

MINING INTERESTS

 

    Mining properties                      
 

 

 

          
    Depletable      Non-depletable                      
 

 

 

          
     
 
 		 Reserves
and
resources		   
  
  		     
 
 		 Reserves
and
resources		   
  
  		     
 		 Exploration
potential		   
  		     
 		 Plant and
equipment		   
  		     
 
 		 Investments
in
associates(g)		   
  
  		     Total   

 Cost

                

 At January 1, 2012

     $      7,087         $      5,682         $     8,833         $      3,993         $     1,536        $   27,131   

 Expenditures on mining interests (a)(b)

     166         135         -         116         138        555   

 Share of net earnings and (losses) of

 associates (g)

     -         -         -         -         (22)        (22)   

 Transfers and other movements (f)

     180         179         (315)         (48)         -        (4)   

 At March 31, 2012

     7,433         5,996         8,518         4,061         1,652        27,660   

 Accumulated depreciation and depletion

                

 At January 1, 2012

     (1,780)         -         -         (1,142)         -        (2,922)   

 Depreciation and depletion (c)

     (83)         -         -         (77)         -        (160)   

 Transfers and other movements (f)

     (7)         -         -         11         -        4   

 At March 31, 2012

     (1,870)         -         -         (1,208)         -        (3,078)   

 Carrying amount - March 31, 2012

     $5,563         $5,996         $8,518         $2,853         $1,652        $24,582   

 

GOLDCORP       9

First Quarter Report - 2012

(In millions of United States dollars, except where noted - Unaudited)

 

     Mining properties                       
  

 

 

           
      Depletable      Non-depletable                       
  

 

 

           
     

Reserves

and

resources

     

Reserves

and

resources

     

Exploration

potential

     

Plant and

equipment

     

Investments

in

associates  (g)

      Total   

Cost

                  

At January 1, 2011

    $     6,147         $     4,995       $   9,649       $     3,403       $   1,251         $   25,445    

Expenditures on mining interests (a)(b)

      442           431         13         475         447           1,808    

Repayment of capital invested (d)

      -           -         -         -         (64)           (64)    

Share of net earnings and (losses) of associates (g)

      -           -         -         -         (98)           (98)    

Transfers and other movements (f)

     498           256         (829)         115         -           40    

At December 31, 2011

      7,087           5,682         8,833         3,993         1,536           27,131    

Accumulated depreciation and depletion

                  

At January 1, 2011

      (1,357)           -         -         (863)         -           (2,220)    

Depreciation and depletion (c)

      (423)           -         -         (307)         -           (730)    

Transfers and other movements (f )

     -           -         -         28         -           28    

At December 31, 2011

      (1,780)           -         -         (1,142)         -           (2,922)    

Carrying amount - December 31, 2011

    $ 5,307         $ 5,682       $ 8,833       $ 2,851       $ 1,536         $ 24,209    

A summary by property of the carrying amount of mining properties is as follows:

 

       Mining Properties                              
    

 

 

                
        Depletable        Non-depletable                              
    

 

 

                
       

 Reserves

 and

 resources

       

Reserves

and

resources

       

Exploration

potential

        Plant &
equipment		         

March 31

2012

       

December 31 

2011 

  

Red Lake (e)

      $ 591           $        850             $ 759            $ 431          $ 2,631         $ 2,592    

Porcupine

        266           47               -              139            452           442    

Musselwhite

        136           6               119              210            471           467    

Éléonore (a)

        -           1,076               -              245            1,321           1,235    

Peñasquito (a)(e)

       3,060           760               5,591              1,110            10,521           10,488    

Los Filos

        516           37               -              179            732           733    

El Sauzal

        80           -               -              15            95           101    

Marlin

        467           62               35              162            726           725    

Cerro Blanco

        -           132               -              10            142           129    

Alumbrera

        277           -               13              119            409           424    

Cerro Negro (a)

        -           1,850               1,780              98            3,728           3,670    

Marigold

        149           5               20              53            227           222    

Wharf

        21           -               -              13            34           36    

El Morro (a)

        -           1,171               115              13            1,299           1,272    

Corporate and other

        -           -               86              56              142           137    
       $ 5,563           $     5,996             $ 8,518            $ 2,853                    22,930                 22,673    

Investments in associates

                             

Pueblo Viejo (d)

                           1,191           1,052    

Primero (g)

                           81           100    

Tahoe

                                                     380           384    
                                                      1,652           1,536    
                                                    $ 24,582         $ 24,209    

 

GOLDCORP       10

First Quarter Report - 2012

(In millions of United States dollars, except where noted - Unaudited)

 

  (a)

Includes capitalized borrowing costs incurred during the three months ended March 31 as follows:

 

      2012      2011  

 

Éléonore

        $ 3       $ 2   

Camino Rojo

      2         2   

Cerro Negro

      6         6   

El Morro

      4         4   
    

 

    $

 

                15

 

  

    $                 14   

The amounts capitalized were determined by applying the weighted average cost of borrowings during the three months ended March 31, 2012 and 2011 of 8.57% proportionately to the accumulated qualifying expenditures on mining interests.

 

  (b)

During the three months ended March 31, 2012, the Company incurred $63 million (2011 – $32 million) in exploration and evaluation expenditures, of which $44 million (2011 – $20 million) have been capitalized and included in expenditures on mining interests. The remaining $19 million of expenditures (2011 – $12 million) were expensed.

 

  (c)

Depreciation and depletion expensed for the three months ended March 31, 2012 was $158 million (2011 – $164 million) as compared to total depreciation and depletion of $160 million (2011 – $177 million) due to the capitalization of depreciation of $12 million (2011 – $6 million) relating to development projects, and movements in amounts allocated to work in progress inventories of $10 million (2011 – $7 million).

 

  (d)

During the three months ended March 31, 2011, the Company received a $64 million repayment of its investment in Dominicana Holdings Inc., the entity that indirectly owns the Pueblo Viejo project, which has been accounted for as a reduction in the Company’s investments in associates balance included in mining interests. There were no repayments made during the three months ended March 31, 2012.

 

  (e)

The Company’s 100% interests in the Camino Rojo gold project in Mexico and the Cochenour gold project in Canada are included in the carrying amounts of the Peñasquito mining property and Red Lake mining property, respectively.

 

  (f)

Transfers and movements primarily represent the reclassification of carrying amounts of reserves, resources and exploration potential as a result of the conversion of the categories of mining properties, and deposits on mining interests which are capitalized and included in the carrying amounts of the related mining properties during the period.

 

  (g)

At March 31, 2012, the Company recognized an additional impairment expense of $19 million (year ended December 31, 2011 – $65 million) in respect of the Company’s investment in Primero as a result of a continued decline in Primero’s quoted market price during the three months ended March 31, 2012. The Company determined that the Company’s equity investment should be written down to the closing share price of Primero at March 31, 2012.

 

GOLDCORP       11

First Quarter Report - 2012

(In millions of United States dollars, except where noted - Unaudited)

 

6.

SEGMENTED INFORMATION

Significant information relating to the Company’s reportable operating segments is summarized in the tables below:

 

      Revenues (f)     

  Depreciation

  and depletion

     

  Earnings

  (loss) from

  operations and

  associates (d)(g)

     

 Expenditures

 on mining
 interests (e)

  
    

 

Three months ended March 31, 2012

  

Red Lake (a)

     $ 195          $ 18           $ 112        $ 61   

Porcupine

      103         13         39         22   

Musselwhite

      94         10         31         19   

Éléonore

      -         -         -         87   

Peñasquito (a)

      419         50         169         72   

Los Filos

      141         11         86         17   

El Sauzal

      35         9         13         3   

Marlin

      145         21         78         23   

Cerro Blanco

      -         -         -         12   

Alumbrera

      138         18         51         3   

Cerro Negro

      -         -         -         52   

Marigold

      45         4         22         10   

Wharf

      34         1         18         1   

El Morro

      -         -         -         28   

Pueblo Viejo

      -         -         1         138   

Other (c)

      -         3           (101)         7   

Total

     $   1,349          $   158           $ 519        $ 555   
     Three months ended March 31, 2011  

Red Lake (a)

   $ 256       $ 25       $ 167       $ 58   

Porcupine

      82         21         18         22   

Musselwhite

      96         10         40         18   

Éléonore

      -         -         -         37   

Peñasquito (a)

      259         40         106         18   

Los Filos

      130         14         75         19   

El Sauzal

      34         6         15         4   

Marlin

      169         26         107         19   

Cerro Blanco

      -         -         -         10   

Alumbrera

      139         15         45         -   

Cerro Negro

      -         -         -         18   

Marigold

      32         4         9         4   

Wharf

      19         1         5         1   

El Morro

      -         -         -         15   

Pueblo Viejo

      -         -         -         116   

Other (c)

      -         2         (54)         -   

Total

    $ 1,216       $ 164       $ 533       $ 359   

 

GOLDCORP       12

First Quarter Report - 2012

(In millions of United States dollars, except where noted - Unaudited)

 

     Total Assets    
     

March 31

2012

      December 31
2011		  

Red Lake (a)

    $ 3,080        $ 3,039   

Porcupine

      493         483   

Musselwhite

      500         488   

Éléonore

      1,274         1,269   

Peñasquito (a)

                11,516           11,363   

Los Filos

      1,267         1,226   

El Sauzal

      236         222   

Marlin

      908         1,159   

Cerro Blanco

      145         133   

Alumbrera

      660         632   

Cerro Negro

      4,807         4,732   

Marigold

      348         324   

Wharf

      107         105   

El Morro

      1,318         1,292   

Pueblo Viejo (b)

      1,191         1,052   

Other (c)

      1,901         1,855   

Total

    $ 29,751        $ 29,374   

 

  (a)

The Company’s 100% interests in the Camino Rojo gold project in Mexico and Cochenour gold project in Canada are included in total assets and earnings from operations and associates for the Peñasquito reportable operating segment and Red Lake reportable operating segment, respectively.

 

  (b)

Total assets include the reduction in the Company’s investment balance as a result of the $64 million repayment of the Company’s investment received during the year ended December 31, 2011.

 

  (c)

Includes corporate activities and corporate assets which have not been allocated to the above segments. Total corporate assets at March 31, 2012 were $1,355 million (December 31, 2011 – $1,285 million).

 

  (d)

Intersegment sales and transfers are eliminated in the above information reported to the Company’s chief operating decision maker.

 

  (e)

Segmented expenditures on mining interests include capitalized borrowing costs, net of investment tax credits and are presented on an accrual basis. Expenditures on mining interests and interest paid in the Condensed Interim Consolidated Statements of Cash Flows are presented on a cash basis. For the three months ended March 31, 2012, the change in accrued expenditures was an increase of $7 million (2011 – increase of $4 million).

 

  (f)

The Company’s principal product is gold doré with the refined gold bullion sold primarily in the London spot market. Concentrate produced at Peñasquito and Alumbrera, containing both gold and by-product metals, is sold to third party refineries.

 

GOLDCORP       13

First Quarter Report - 2012

(In millions of United States dollars, except where noted - Unaudited)

 

The Company’s revenues from continuing operations (excluding attributable share of revenues from associates) for the three months ended March 31 are as follows:

 

      2012      2011  

Gold

        $ 931       $ 874   

Silver

      235         173   

Copper

      88         90   

Zinc

      58         48   

Lead

      34         29   

Other

      3         2   
         $             1,349       $                 1,216   

 

  (g)

The $58 million of net income (2011 – net income of $279 million) which reconciles the Company’s total earnings from operations and associates of $519 million (2011 – $533 million) to the Company’s net earnings before tax of $577 million (2011 – $812 million) primarily arose from corporate activities and would be primarily allocated to the Other reportable operating segment.

 

7.

INCOME TAXES

 

Three months ended March 31    2012      2011  

Current income tax expense

          $ 253             $ 261   

Deferred income tax recovery

                (155)                   (100)   

Income taxes

          $ 98             $ 161   

Income tax expense differs from the amount that would result from applying the Canadian federal and provincial income tax rates to earnings before taxes. These differences result from the following items:

 

Three months ended March 31    2012      2011  

Earnings before taxes

    $ 577             $ 812   

Canadian federal and provincial income tax rates

      25.0%         26.5%   

Income tax expense based on Canadian federal and provincial income tax rates

      144         215   

Increase (decrease) attributable to:

      

Impact of foreign exchange on deferred income tax assets and liabilities (note 8(c)(iii))

      (55)         (27)   

Other impacts of foreign exchange (note 8(c)(iii))

      -         3   

Non-deductible expenditures

      8         6   

Effects of different foreign statutory tax rates on earnings of subsidiaries

      13         (3)   

Non-taxable portion of gain on disposition of securities (note 8(b)(i))

      -                     (45)   

Non-(taxable)/deductible mark-to-market (gains)/losses on warrants and convertible debt (note 8(a))

                        (13)         8   

Other

      1         4   
     $ 98             $ 161   

 

GOLDCORP       14

First Quarter Report - 2012

(In millions of United States dollars, except where noted - Unaudited)

 

8.

FINANCIAL INSTRUMENTS

 

  (a)

Financial assets and liabilities classified as at fair value through profit or loss (“FVTPL”)

The Company’s financial assets and liabilities classified as at FVTPL are as follows:

 

     

March 31

2012

     

At December 31

2011

  

Current derivative assets (1)

      

Foreign currency, heating oil, copper, lead, zinc and silver contracts

        $ 74           $ 21   

Investments in warrants

      -         1   
         $ 74           $ 22   

Current derivative liabilities

      

Foreign currency, heating oil, copper, lead, zinc and silver contracts

        $ (67)           $ (28)   

Non-financial contract to sell silver to Silver Wheaton (i)

      (42)         (37)   
         $ (109)           $ (65)   

Non-current derivative liabilities

      

Non-financial contract to sell silver to Silver Wheaton (i)

        $ (53)           $ (53)   

Conversion feature of convertible senior notes

      (132)         (184)   
         $           (185)           $   (237)   

 

  (1) 

Included in other current assets on the Condensed Interim Consolidated Balance Sheets.

In addition, accounts receivable arising from sales of metal concentrates have been designated and classified as at FVTPL by the Company as follows:

 

     

March 31

2012

     

     December 31

2011

  

Arising from sales of metal concentrates – classified as at FVTPL

        $             459           $   292   

Not arising from sales of metal concentrates – classified as loans and receivables

      232         181   

Accounts receivable

        $ 691           $ 473   

The net gains (losses) on derivatives for the three months ended March 31 were comprised of the following:

 

      2012                         2011  

Realized gains (losses)

      

Foreign currency, heating oil, copper, lead, zinc and silver contracts

    $ 5       $ (3)   

Non-financial contract to sell silver to Silver Wheaton (i)

      (5)         (5)   
       -         (8)   

Unrealized gains (losses)

      

Foreign currency, heating oil, copper, lead, zinc and silver contracts

      15         10   

Investments in warrants

      (1)         (3)   

Non-financial contract to sell silver to Silver Wheaton (i)

                      (11)         (26)   

Share purchase warrants

      -         (2)   

Conversion feature of convertible senior notes

      52         (28)   
       55         (49)   
     $ 55         $   (57)   

 

GOLDCORP       15

First Quarter Report - 2012

(In millions of United States dollars, except where noted - Unaudited)

 

  (i)

Non-financial contract to sell silver to Silver Wheaton Corporation (“Silver Wheaton”)

At March 31, 2012, management estimates that the fair value of the Company’s commitment to deliver 1.5 million ounces of silver to Silver Wheaton during each of the four contract years ending August 5, 2014 at a fixed price per ounce is $95 million (December 31, 2011 – $90 million). The fair value was estimated as the difference between the forward market prices of silver for the remainder of the four contract years ending August 5, 2014 ranging from $32.54 to $33.04 per ounce (December 31, 2011 – $28.04 to $29.55 per ounce) and the fixed price of $4.04 per ounce, subject to an annual adjustment for inflation, receivable from Silver Wheaton, multiplied by the remaining ounces to be delivered, and discounted using the Company’s after-tax weighted average cost of capital. The remaining total ounces to be delivered by the Company as at March 31, 2012 were 3.5 million ounces (December 31, 2011 – 3.9 million ounces).

 

  (b)

Financial assets designated as available-for-sale

The Company’s investments in marketable securities (included in other current assets) and other equity securities (classified as non-current) are designated as available-for-sale. The unrealized gains (losses) on available-for-sale investments recognized in other comprehensive income for the three months ended March 31 were as follows:

 

      2012      2011  

Mark-to-market gains (losses) on equity securities

    $ 14       $ (70)   

Deferred tax (expense) recovery in OCI

                (2)         7   

Unrealized gains (losses) on equity securities, net of tax

      12         (63)   

Reclassification adjustment for impairment losses included in net earnings

      5         -   

Reclassification adjustment for realized gains recognized in net earnings, net of tax of $nil (2011 - $42 million) (i)

      -         (295)   
     $ 17       $         (358)   

 

  (i)

On February 8, 2011, the Company disposed of its 10.1% interest in Osisko Mining Corporation to a syndicate of underwriters at a price of C$13.75 per common share held, for total gross proceeds of C$530 million ($536 million). On the date of disposition, the Company reclassified the cumulative mark-to-market gains previously recognized in OCI of $337 million to earnings for the period and recognized a gain on disposition of $320 million ($279 million after tax), net of selling costs of $17 million.

 

  (c)

Financial instruments and related risks

The Company manages its exposure to financial risks, including credit risk, liquidity risk, currency risk, interest rate risk and price risk, in accordance with its Risk Management Policy. The Company’s Board of Directors oversees management’s risk management practices by setting trading parameters and reporting requirements. The Risk Management Policy provides a framework for the Company to manage the risks it is exposed to in various markets and to protect itself against adverse price movements. All transactions undertaken are to support the Company’s ongoing business. The Company does not acquire or issue derivative financial instruments for trading or speculative purposes.

The following describes the types of risks that the Company is exposed to and its objectives and policies for managing those risk exposures.

 

  (i)

Credit risk

Credit risk is the risk that the counterparty to a financial instrument will cause a financial loss for the Company by failing to discharge its obligations. There has been no change in the Company’s objectives and policies for managing this risk during the three months ended March 31, 2012.

 

GOLDCORP       16

First Quarter Report - 2012

(In millions of United States dollars, except where noted - Unaudited)

 

The Company expects Primero to repay the outstanding $30 million principal amount of the convertible note receivable from Primero (“Primero Convertible Note”) in cash on or before the maturity date of August 6, 2012. If Primero elects to repay the Primero Convertible Note in Primero shares, the Company would receive approximately $21 million in Primero shares based on the Primero closing share price on March 31, 2012.

 

  (ii)

Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. There has been no significant change in the Company’s objectives and policies for managing this risk during the three months ended March 31, 2012.

During the three months ended March 31, 2012, the Company generated operating cash flows of $322 million (2011 – $586 million). At March 31, 2012, Goldcorp held cash and cash equivalents of $1,394 million (December 31, 2011 – $1,502 million), of which $81 million (December 31, 2011 – $89 million) is held by the Company’s joint ventures and which is not available for use by the Company. At March 31, 2012, the Company had working capital of $1,765 million (excluding working capital of the Company’s joint ventures) (December 31, 2011 – $2,045 million) which the Company defines as current assets less current liabilities.

At March 31, 2012, the Company had an undrawn $2.0 billion revolving credit facility available. At March 31, 2012, the Company had letters of credit outstanding and secured deposits in the amount of $393 million (December 31, 2011 – $308 million).

In the opinion of management, the working capital at March 31, 2012, together with future cash flows from operations and available funding facilities, is sufficient to support the Company’s commitments. The Company’s total planned capital expenditures for 2012 is $2.6 billion, 40% of which relate to operations and the remaining 60% to projects (Cerro Negro, Éléonore, Cochenour, El Morro, Camino Rojo and Pueblo Viejo).

At March 31, 2012, the Company’s committed capital expenditures payable over the next twelve months amounted to $1,058 million (December 31, 2011 – $765 million). Included in the committed capital expenditures at March 31, 2012 are $252 million relating to the Cerro Negro project, $176 million relating to the Éléonore project, $150 million relating primarily to the optimization of the processing lines and the Waste Rock Overland Conveyor system at Peñasquito, and $65 million relating to the El Morro project.

For the periods beyond 2012, the Company’s cash flows from operations and available funding under the Company’s loan and credit facilities are expected to sufficiently support further expansions and growth. Peñasquito will be the main driver of the Company’s gold production growth expected in the next five years, with significant contributions from Red Lake, Pueblo Viejo and Cerro Negro.

 

  (iii)

Market risk

Currency risk

Currency risk is the risk that the fair values or future cash flows of the Company’s financial instruments will fluctuate because of changes in foreign currency exchange rates. There has been no change in the Company’s objectives and policies for managing this risk during the three months ended March 31, 2012.

The Company is exposed to currency risk through financial assets and liabilities and deferred income tax assets and liabilities denominated in currencies other than US dollars (“the foreign currencies”).

 

GOLDCORP       17

First Quarter Report - 2012

(In millions of United States dollars, except where noted - Unaudited)

 

During the three months ended March 31, 2012, the Company recognized a net foreign exchange gain of $9 million (2011 – gain of $14 million). Based on the Company’s net exposures (other than those relating to taxes) at March 31, 2012, a 10% depreciation or appreciation of the foreign currencies against the US dollar would result in an approximate $5 million decrease or increase in the Company’s after-tax net earnings, respectively.

During the three months ended March 31, 2012, the Company recognized a net foreign exchange gain of $51 million in income tax expense on income taxes receivable/(payable) and deferred taxes (2011 – net gain of $16 million). Based on the Company’s net exposures relating to taxes at March 31, 2012, a 10% depreciation or appreciation of the foreign currencies against the US dollar would result in an approximate $88 million decrease or increase in the Company’s after-tax net earnings, respectively.

During the three months ended March 31, 2012 and in accordance with its Risk Management Policy, the Company entered into Canadian dollar and Mexican peso forward and option contracts to purchase and sell the respective foreign currencies at pre-determined US dollar amounts. These contracts were entered into to normalize operating expenses incurred by the Company’s foreign operations as expressed in US dollar terms.

Interest rate risk

Interest rate risk is the risk that the fair values and future cash flows of the Company’s financial instruments will fluctuate because of changes in market interest rates. The Company is exposed to interest rate risk primarily on its outstanding revolving credit facility, its share of the Pueblo Viejo project financing and its cash and cash equivalents.

There has been no significant change in the Company’s exposure to interest rate risk and there has been no change to its objectives and policies for managing these risks during the three months ended March 31, 2012.

Price risk

Price risk is the risk that the fair value or future cash flows of the Company’s financial instruments will fluctuate because of changes in market prices. There has been no change in the Company’s objectives and policies for managing this risk and no significant change to the Company’s exposure to price risk during the three months ended March 31, 2012.

 

 

9.

SHARE-BASED COMPENSATION AND OTHER RELATED INFORMATION

 

  (a)

Stock options

The Company granted 1.5 million stock options to its employees and officers during the three months ended March 31, 2012, which vest over a period of 3 years, are exercisable at C$48.72 per option, expire in 2017, and had a total fair value of $18 million at the date of grant. The Company granted 5.9 million stock options during the three months ended March 31, 2011, which vest over a period of 3 years, are exercisable at C$48.16 per option, expire in 2016 and had a total fair value of $79 million at the date of grant.

 

GOLDCORP       18

First Quarter Report - 2012

(In millions of United States dollars, except where noted - Unaudited)

 

The fair value of stock options granted during the three months ended March 31 was calculated as of the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions:

 

      2012      2011  

Expected life

      3 years         3 years   

Expected volatility

      37.6%         42.7%   

Expected dividend yield

      <1.1%         <1.0%   

Forfeiture rate

      9.0%         9.0%   

Risk-free interest rate

      1.1%         2.0%   

Weighted average share price

    C$ 48.72       C$ 48.16   

Weighted average fair value per option

    C$ 12.98       C$ 14.07   

The expected volatility assumption is based on the historical and implied volatility of Goldcorp’s Canadian dollar common share price on the Toronto Stock Exchange. The risk-free interest rate assumption is based on yield curves on Canadian government zero-coupon bonds with a remaining term equal to the stock options’ expected life.

The following table summarizes the changes in outstanding stock options during the three months ended March 31, 2012 and 2011:

 

     

Options
Outstanding

(000’s)

     

Weighted

Average

Exercise

Price

(C$/option)

  

At January 1, 2012

      17,574        $ 41.49   

Granted

      1,536         48.72   

Exercised

      (181)         34.45   

Forfeited

      (94)         45.52   

At March 31, 2012

      18,835       $ 42.13   

At January 1, 2011

      15,693       $ 37.41   

Granted

      5,946         48.16   

Exercised

      (372)         31.36   

Forfeited

      (167)         39.44   

At March 31, 2011

      21,100        $ 40.53   

During the three months ended March 31, 2012, the weighted average share price at the date stock options were exercised was C$47.15 (2011 – C$47.55).

 

GOLDCORP       19

First Quarter Report - 2012

(In millions of United States dollars, except where noted - Unaudited)

 

The following table summarizes information about the Company’s stock options outstanding at March 31, 2012:

 

    

 

Options Outstanding

 

     

Options Exercisable

 

  

Exercise Prices

(C$/option)

   

Options

Outstanding
(000’s)

     

Weighted

Average

Exercise

Price

(C$/option)

     

Weighted

Average

Remaining

Contractual

Life

(years)

     

Options

Outstanding

and

Exercisable
(000’s)

     

Weighted

Average

Exercise

Price

(C$/option)

     

Weighted

Average

Remaining

Contractual

Life

(years)

  

$16.87 - $19.23

      733       $ 18.51         2.7         733       $ 18.51         2.7     

$24.40 - $25.71

      640         25.64         5.2         640         25.64         5.2     

$28.84 - $31.93

      646         31.02         4.2         646         31.02         4.2     

$34.39 - $37.82

      2,618         35.70         2.1         1,296         35.79         2.2     

$39.36 - $40.79

      1,973         39.78         1.2         1,922         39.77         1.2     

$44.50 - $46.76

      4,990         44.53         3.1         1,323         44.51         3.1     

$48.16 - $48.72

      7,235         48.28         4.2         1,900         48.16         3.9     
       18,835       $ 42.13         3.3         8,460       $ 38.20         2.9     

 

  (b)

Restricted share units (“RSUs”)

The Company issued 1.2 million RSUs during the three months ended March 31, 2012, which vest over 3 years and which have a total fair value of $51 million based on the market value of the underlying shares at the date of issuance (weighted average fair value per RSU – C$48.72). There were 0.5 million RSUs issued during the three months ended March 31, 2011 which vest over three years and had a total fair value of $22 million at the date of issuance. At March 31, 2012, there were 1.7 million RSUs outstanding (December 31, 2011 – 0.7 million).

 

  (c)

Stock options and restricted share units compensation expense

Total stock options and RSUs vested during the three months ended March 31, 2012 and recorded as share-based compensation expense included in corporate administration in the Condensed Interim Consolidated Statements of Earnings with a corresponding credit to shareholders’ equity was $24 million (2011 – $20 million).

 

  (d)

Performance share units (“PSUs”) compensation expense

During the three months ended March 31, 2012, the Company issued 183,155 PSUs with a total fair value of $8 million at the date of issuance. During the three months ended March 31, 2011, the Company issued 277,865 PSUs with a total fair value of $15 million at the date of issuance. The fair value of PSUs granted during the three months ended March 31 was calculated as of the date of grant using a binomial pricing model with the following weighted average assumptions:

 

      2012      2011  

Expected life

        3 years         3 Years   

Expected volatility

      37.2%         24.6%   

Expected dividend yield

      <1.0%         <1.0%   

Forfeiture rate

      9.0%         9.1%   

Risk-free interest rate

      1.1%         3.4%   

Weighted average share price

    C$ 47.41       C$ 43.73   

Total share-based compensation expense included in corporate administration in the Condensed Interim Consolidated Statements of Earnings relating to PSUs for the three months ended March 31, 2012 and recorded as liabilities was $4 million (2011 – $2 million).

 

GOLDCORP       20

First Quarter Report - 2012

(In millions of United States dollars, except where noted - Unaudited)

 

At March 31, 2012, the carrying amount of PSUs outstanding and included in other non-current liabilities was $12 million (December 31, 2011 – $7 million). At March 31, 2012, the total intrinsic value of PSUs outstanding and vested was $nil (December 31, 2011 – $nil).

 

  (e)

Employee share purchase plan

During the three months ended March 31, 2012, the Company recorded compensation expense of $1 million (2011 – $1 million) in corporate administration in the Condensed Interim Consolidated Statements of Earnings, representing the Company’s contributions to the employee share purchase plan measured using the market price of the underlying shares at the dates of contribution.

 

  (f)

Issued share capital

The Company has an unlimited number of authorized shares. As at March 31, 2012, the Company has 46.5 million and approximately 4.2 million common shares reserved in connection with the exercise of stock options and the vesting of RSUs, respectively.

 

10.

PER SHARE INFORMATION

Net earnings per share for the three months ended March 31 were calculated based on the following:

 

     2012      2011  

 

  

Basic net earnings

     $         479        $ 651   

Effect of dilutive securities:

      

Share purchase warrants – change in fair value recognized in earnings

      -         2   

Conversion feature of convertible senior notes – change in fair value recognized in earnings

      (52)         -   

 

  

Diluted net earnings

     $ 427        $             653   

 

  

Net earnings per share for the three months ended March 31 were calculated based on the following:

 

(in thousands)    2012      2011  

 

  

Basic weighted average number of shares outstanding

              810,046                     798,462   

Effect of dilutive securities:

      

Stock options

      2,033         2,318   

Restricted share units

      1,726         912   

Share purchase warrants

      -         172   

Convertible senior notes

      17,975         -   

 

  

Diluted weighted average number of shares outstanding

       831,780          801,864   

 

  

The weighted average number of stock options outstanding during the three months ended March 31, 2012 was 17.8 million (2011 – 16.7 million), of which 11.6 million was dilutive (2011 – 9.6 million) and included in the above tables. The effect of the remaining 6.2 million stock options (2011 – 7.1 million) was anti-dilutive because the underlying exercise prices exceeded the average market price of the underlying common shares of C$46.42 (2011 – C$44.16).

For the three months ended March 31, 2011, the effect of the outstanding convertible senior notes was anti-dilutive and was therefore excluded from the computation of diluted net earnings per share. In the event that the convertible senior notes were dilutive for the three months ended March 31, 2011, the computation of diluted net earnings would include an addition of $28

 

GOLDCORP       21

First Quarter Report - 2012

(In millions of United States dollars, except where noted - Unaudited)

 

million for the change in fair value recognized in earnings and the computation of the diluted weighted average number of shares outstanding would include an addition of 17.975 million shares.

During the three months ended June 30, 2011, the Company’s share purchase warrants were exercised or expired (note 8(a)). The effect of 0.8 million share purchase warrants outstanding prior to the date of exercise or expiry for the three months ended March 31, 2011 was dilutive and has been included in the above tables. The effect of 8.4 million share purchase warrants was anti-dilutive because the underlying exercise price exceeded the average market price of the underlying common shares of C$44.16. In the event that these share purchase warrants were dilutive, the computation of diluted net earnings per share and net earnings per share for the three months ended March 31, 2011 would have included an additional negligible expense for the change in fair value of the anti-dilutive share purchase warrants recognized in net earnings.

Dividends declared:

During the three months ended March 31, 2012, the Company declared and paid to its shareholders dividends of $0.135 per share for total dividends of $109 million (2011 – $0.09 per share for total dividends of $75 million). For the period April 1, 2012 to April 25, 2012, the Company declared dividends payable of $0.045 per share for total dividends of approximately $36 million.

 

11.

SUPPLEMENTAL CASH FLOW INFORMATION

 

Three months ended March 31    2012      2011  

Change in operating working capital

      

Accounts receivable

    $         (228)       $ 65   

Inventories and stockpiled ore

      (3)         (49)   

Accounts payable and accrued liabilities

      25         (56)   

Income taxes payable

      46         171   

Other

      2         (8)   
     $ (158)       $ 123   
     
     
Three months ended March 31    2012      2011  

Operating activities include the following cash received (paid):

      

Interest received

    $ 1       $ 1   

Income taxes paid

      (204)                     (90)   

Investing activities include the following cash received (paid):

      

Purchases of money-market investments

      (10)         -   

Purchases of available-for-sale securities

      (4)         (6)   

Net proceeds from the sale of Osisko shares

      -         519   

Proceeds from the maturity of money-market investments and sale of other securities

      273         -   

Investing activities of discontinued operations include the following cash received:

      

Principal repayment on promissory note receivable from Primero

      5         -   

 

GOLDCORP       22

First Quarter Report - 2012

(In millions of United States dollars, except where noted - Unaudited)

 

          March 31
2012		     

December 31

2011

  

Cash and cash equivalents (a) are comprised of:

      

Cash

        $ 272           $ 160   

Short-term money market investments

      1,122         1,342   
         $ 1,394           $ 1,502   

 

  (a)

At March 31, 2012, $81 million (December 31, 2011 – $89 million) is held by the Company’s joint ventures and is not available for use by the Company.

 

12.

CONTINGENCIES

Due to the size, complexity and nature of the Company’s operations, various legal and tax matters are outstanding from time to time. In the event that management’s estimate of the future resolution of these matters changes, the Company will recognize the effects of the changes in its consolidated financial statements on the date such changes occur.

 

  (a)

The El Morro project was acquired from a subsidiary of New Gold Inc. (“New Gold”), the entity which acquired the El Morro project from Xstrata Copper Chile S.A. (“Xstrata Copper”), a subsidiary of Xstrata plc (“Xstrata”), pursuant to the exercise of the right of first refusal. The right of first refusal came into effect on October 12, 2009 when Barrick entered into an agreement with Xstrata Copper to acquire Xstrata Copper’s 70% interest in the El Morro project, subject to the right of first refusal not being exercised. On January 7, 2010, the New Gold subsidiary delivered notice to Xstrata Copper that it was exercising the right of first refusal. On January 13, 2010, Goldcorp received a statement of claim filed by Barrick in the Ontario Superior Court of Justice, against Goldcorp, New Gold, and certain of New Gold’s subsidiaries, relating to the exercise of the right of first refusal. Among the relief requested by Barrick is that the El Morro project be held in trust for the benefit of Barrick. As an alternative, Barrick seeks damages. Barrick subsequently filed a motion to amend its claim to add various Xstrata entities as defendants. All parties agreed to have all claims related to Goldcorp’s acquisition of its interest in the El Morro project heard by the Ontario courts, including the Supreme Court of Canada. Evidence regarding liability issues was heard in June 2011 and evidence regarding remedy issues was heard in October 2011. All parties have submitted their written arguments and oral arguments were heard during the week of January 30, 2012. The case was reserved following oral argument, and the matter is now before the trial court for its decision. Goldcorp’s management believes that Goldcorp has acted lawfully and appropriately in all aspects of this transaction and defended Goldcorp against Barrick’s claim.

On May 26, 2011, the Comunidad Agrícola Los Huasco Altinos (“CAHA”) filed a legal proceeding (“Recurso de Proteccion”) requesting the invalidation of the resolution approving the El Morro project’s Environmental Impact Study that was issued by the Chilean environmental authority on March 14, 2011. El Morro is participating in this action as an interested party/beneficiary of the administrative environmental authorization. Both the environmental authority and El Morro defended the validity of the environmental ruling before the Court of Appeals. The Court of Appeals granted the Recurso de Proteccion in late February 2012. The primary basis for the court’s ruling is that Chile did not comply with its obligations under ILO Convention N° 169 to consult with and compensate the Diaguita community, an indigenous people that are members of CAHA, with respect to the El Morro project. The Court of Appeal’s ruling is currently on appeal before the Supreme Court of Chile.

 

  (b)

In April 2010, Pueblo Viejo Dominicana Corporation (“PVDC”), the entity that owns the Pueblo Viejo project, received a copy of an action filed in the Dominican Republic by Fundacion Amigo de Maimon Inc., Fundacion Miguel L. De Pena Garcia Inc., Miguel De Pena and a number of individuals. The action alleges a variety of matters couched as violations of fundamental rights, including taking of private property, violations of mining and environmental and other laws, slavery, human trafficking

 

GOLDCORP       23

First Quarter Report - 2012

(In millions of United States dollars, except where noted - Unaudited)

 

 

and bribery of government officials. The complaint does not describe the relief sought, but the action is styled as an amparo remedy, which typically includes some form of injunctive relief. PVDC intends to vigorously defend the action. PVDC requested the Supreme Court in Santo Domingo to change the venue and the 9th Criminal Court of Santo Domingo was appointed to decide on the matter of Fundacion Amigo de Maimon Inc. No other procedure has occurred. As for Miguel De Pena, the Supreme Court annulled the judgment of the trial court of Cotui against PVDC which ordered PVDC to restore possession of Parcel 451-K to Miguel De Pena. The case was sent to a new trial court for issuance of ruling. The trial court ruled in favour of PVDC. Miguel De Pena has appealed the decision and such appeal is pending to be ruled by the Constitutional Court. Miguel De Pena also initiated litigation against PVDC to collect approximately $2 million and the 9th Criminal Court rejected the claim. Miguel de Pena also filed a criminal action against PVDC for property violation and the Trial Court of Cotui rejected the action. De Pena appealed the decision and the Appellate Court found that the Trial Judge committed procedural mistakes and remanded the action to a new Trial Court where the matter is pending.

In March 2012 Maria de la Cruz filed a damage and compensation claim against PVDC, its Directors and the Dominican Government. De la Cruz alleges personal and property damages due to environmental contamination and is seeking a compensation of approximately $7 million and remediation of environmental contamination, which includes historic contamination resulting from the operations of the Pueblo Viejo Mine by Rosario Dominicana (a company operated and owned by the Dominican Government) for which PVDC is not responsible in accordance with the Special Lease Agreement executed with the Dominican Government. Maria de la Cruz alone and together with her husband previously filed similar actions against PVDC and its Directors which the Trial Court declared invalid due to procedural reasons. PVDC intends to vigorously defend the action.

 

  (c)

As previously announced, on December 7, 2011 the Inter-American Commission on Human Rights (“IACHR”) notified the Government of Guatemala of its decision to modify the precautionary measures originally granted in May 2010. As modified, the precautionary measures no longer seek to have the Government suspend operations at the Marlin Mine. Instead, the precautionary measures now seek to have the Government take appropriate actions to protect the quality and quantity of water available to 18 Mayan communities. The Company continues to cooperate with the Government in its efforts to comply with the precautionary measures and to monitor the proceeding before the IACHR.

 

GOLDCORP       24

CORPORATE OFFICE
Park Place
Suite 3400 – 666 Burrard Street
Vancouver, BC V6C 2X8 Canada
Tel:   (604) 696-3000
Fax:   (604) 696-3001
www.goldcorp.com
TORONTO OFFICE
Suite 3201 – 130 Adelaide Street West
Toronto, ON M5H 3P5 Canada
Tel:   (416) 865-0326
Fax:   (416) 359-9787
RENO OFFICE
Suite 310 – 5190 Neil Road
Reno, NV 89502 United States
Tel:   (775) 827-4600
Fax:   (775) 827-5044
MEXICO OFFICE
Paseo de las Palmas 425 - 15
Lomas de Chapultepec
11000 Mexico, D.F.
Tel:   52 (55) 5200-9600
GUATEMALA OFFICE
5ta avenida 5-55 zona 14 Europlaza
Torre 1 Nivel 6 oficina 601
Guatemala City
Guatemala, 01014
Tel:   502 2329 2600
ARGENTINA OFFICE
Maipu 255, Piso 12
C1084ABE Capital Federal
Buenos Aires, Argentina
Tel:   54 114 323 7000
CHILE OFFICE
Avda. Apoquindo 4501, oficina 703
Las Condes
Santiago 7580125, Chile
Tel:   562 898 9300
STOCK EXCHANGE LISTING
Toronto Stock Exchange: G
New York Stock Exchange: GG
TRANSFER AGENT
CIBC Mellon Trust Company
(Canadian Stock Transfer Company Inc. acts as Administrative Agent for CIBC Mellon Trust Company)
Suite 1600 – 1066 West Hastings Street
Vancouver, BC V6E 3X1 Canada
Toll free in Canada and the US:
      (800) 387-0825
Outside of Canada and the US:
      (416) 643-5500

inquiries@cibcmellon.com

www.canstockta.com

AUDITORS
Deloitte & Touche LLP
Vancouver, BC
INVESTOR RELATIONS
Jeff Wilhoit
Vice President, Investor Relations
Toll free:   (800) 567-6223
Email:   info@goldcorp.com
REGULATORY FILINGS
The Company’s filings with the Ontario Securities Commission can be accessed on SEDAR at www.sedar.com.
The Company’s filings with the US Securities and Exchange Commission can be accessed on EDGAR at www.sec.gov.
 

 

GOLDCORP      25