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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

For the quarterly period ended September 30, 2012

or

For the transition period from             to

Commission File Number:  001-33783

THOMPSON CREEK METALS COMPANY INC.

(Exact name of registrant as specified in its charter)

(303) 761-8801

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

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 (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. x Yes o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). x Yes o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 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). o Yes x No

As of November 9, 2012, there were 168,726,984 shares of our common stock, no par value, outstanding.

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THOMPSON CREEK METALS COMPANY INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

See accompanying notes to consolidated financial statements.

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THOMPSON CREEK METALS COMPANY INC.

CONSOLIDATED STATEMENTS OF OPERATIONS and COMPREHENSIVE (LOSS) INCOME

(Unaudited)

See accompanying notes to consolidated financial statements.

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THOMPSON CREEK METALS COMPANY INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

See accompanying notes to consolidated financial statements.

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THOMPSON CREEK METALS COMPANY INC.

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

Nine Months Ended September 30, 2012

(Unaudited)

See accompanying notes to consolidated financial statements.

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THOMPSON CREEK METALS COMPANY INC.

Notes to the Consolidated Financial Statements — Unaudited

(US dollars in millions, except per share amounts)

1. Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q.  In compliance with those instructions, certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States (“US GAAP”) have been condensed or omitted. This report should be read in conjunction with Thompson Creek Metals Company Inc.’s (“TCM” or the “Company”) consolidated financial statements and notes contained in its Annual Report on Form 10-K for the year ended December 31, 2011 (the “2011 Form 10-K”) filed with the Securities and Exchange Commission (“SEC”). The information furnished herein reflects all adjustments which are, in the opinion of management, necessary for a fair statement of the results for the interim periods reported.  Operating results for the three and nine months ended September 30, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012.

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. TCM bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances.  Accordingly, actual results may differ significantly from these estimates under different assumptions or conditions.  Certain comparative information has been reclassified to conform to the current year’s presentation.

The consolidated financial statements include the accounts of TCM and its subsidiaries, and intercompany accounts and transactions have been eliminated in consolidation.  Financial amounts are presented in United States (“US”) dollars unless otherwise stated.  References to C$ are Canadian dollars.

2. Accounts Receivable

Accounts receivable are carried at their estimated collectible amounts. Accounts receivable include trade receivables of $26.6 million and other receivables of $12.2 million as of September 30, 2012. Accounts receivable as of December 31, 2011 included trade receivables of $41.9 million and other receivables of $29.9 million. Other receivables primarily consist of $7.0 million and $25.8 million of Canadian Harmonized Sales Tax refundable to TCM as of September 30, 2012 and December 31, 2011, respectively.

3. Inventory

The carrying value of product inventory is as follows:

As of September 30, 2012, the carrying value of our inventory was $106.5 net of lower-of-cost-or-market-write-downs.  Total write-downs were $29.5 million and $57.2 million for the three and nine months ended September 30, 2012, respectively. Inventory write-downs in the accompanying consolidated statements of operations and comprehensive (loss) income for the three and nine months ended September 30, 2012 include $21.6 million and $42.5 million, respectively, of inventory write-downs in operating expenses and $7.9 million and $14.7 million, respectively, of inventory write-downs in depreciation, depletion and amortization.

As of September 30, 2011, the carrying value of TCM’s inventory exceeded the market value resulting in write-downs of $12.9 million and $18.6 million for the three and nine months ended September 30, 2011, respectively. During 2011, lower-of-cost-or-market inventory write-downs were recognized as operating expenses.  Beginning in the second quarter of 2012, lower-of-cost-or-market inventory write-downs were allocated between operating expenses and depreciation.  Amounts in the financial statements for the three and nine months ended September 30, 2011 have been reclassified to conform to the current year’s presentation.  The effect of the

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THOMPSON CREEK METALS COMPANY INC.

Notes to the Consolidated Financial Statements — Unaudited

(US dollars in millions, except per share amounts)

reclassification for the three and nine months ended September 30, 2011was an increase to depreciation, depletion and amortization and a decrease to operating expenses of $1.7 million and $5.6 million, respectively.

4. Property, Plant, Equipment and Development

Property, plant, equipment and development is comprised of the following:

The construction in progress balance includes nil and $403.5 million related to the mill expansion project at the Endako Mine and $1,008.4 million and $553.8 million related to the Mt. Milligan project as of September 30, 2012 and December 31, 2011, respectively.  No depreciation is currently being recognized on construction in progress related to the Mt. Milligan project as it has not been completed or placed into service.

Through its acquisition of Terrane, TCM obtained a 51% joint venture interest in the Howard’s Pass property.  Pursuant to a 2005 option agreement, a counterparty obtained an option to purchase 100% of the Howard’s Pass property, provided that it made specified yearly option payments and performed specified amounts of work to develop the property. On August 10, 2012, the counterparty fulfilled its obligations under the Option Agreement, and, in doing so, acquired the Howard’s Pass property.  In connection therewith, TCM obtained certain royalty interests in the property. Following this transaction, TCM’s remaining royalty interest of $8.7 million has been reclassified from Mineral Properties to Other.

5. Goodwill

During the third quarter of 2012, TCM suspended waste stripping activity associated with the next phase of production at TC Mine.  This decision coupled with declines in molybdenum prices represented significant changes in our business requiring us to evaluate our goodwill for impairment on an enterprise-wide basis at September 30, 2012. For purposes of this evaluation, estimates of after-tax discounted future cash flows of the individual reporting units were used.  The estimated cash flows were derived from life-of-mine plans developed using long-term analyst consensus pricing reflective of the current price environment and management’s projections for operating costs. As a result of this evaluation, an impairment charge of $47.0 million was recorded for the three and nine months ended September 30, 2012.

6. Derivative Financial Instruments

TCM enters into various derivative financial instruments in its normal course of operations.  None of TCM’s derivative instruments are treated as hedges for accounting purposes, and all are recorded on the consolidated balance sheets at fair value with changes in fair value recorded to the consolidated statements of operations and comprehensive (loss) income, except those contracts for which TCM has elected to apply the normal purchases and normal sales scope exception. TCM is exposed to credit loss when counterparties with which it has entered into derivative transactions are unable to pay. To reduce counterparty credit exposure, TCM deals only with large credit-worthy financial institutions and companies and limits credit exposure to each. TCM believes the counterparties to the contracts to be credit-worthy entities, and therefore, TCM believes credit risk of counterparty non-performance is relatively low.  For information regarding the nature and types of TCM’s derivatives, see the references noted in the following tables.

The following table summarizes the location and fair value amounts of all derivative financial instruments in the consolidated balance sheets:

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THOMPSON CREEK METALS COMPANY INC.

Notes to the Consolidated Financial Statements — Unaudited

(US dollars in millions, except per share amounts)

The following table sets forth the gains (losses) on derivative instruments for the three and nine months ended September 30, 2012 and 2011:

(a)           Forward Currency Contracts

TCM transacts business in various currencies in the normal course of its operations and for capital expenditures.  In addition, with all of its revenues denominated in US dollars, TCM has on-going foreign exchange risk with respect to its Canadian operations.  To help mitigate this risk, TCM, from time to time, enters into various derivative instruments such as foreign currency forward contracts, options and collars. The terms of these instruments are typically less than one year.  TCM records its currency contracts at fair value using a market approach based on observable quoted exchange rates and contracted notional amounts.  As of September 30, 2012, TCM had no open foreign currency contracts.

(b)                                 Commodity Contract

TCM has commodity risk related to its natural gas purchases. To manage this risk, TCM has entered into a commodity forward contract with a supplier. TCM records the fair value of this contract using a market approach based on quoted New York Mercantile Exchange rates. This derivative contract is not designated as a cash flow hedge. Therefore, the periodic change in fair value of this contract is recorded directly to earnings.

(c)                                  Common Stock Purchase Warrant Derivatives

TCM accounts for its common stock purchase warrants as derivative liabilities with the changes in fair value recorded to earnings.

The following table summarizes common share warrant transactions during the nine months ended September 30, 2012:

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THOMPSON CREEK METALS COMPANY INC.

Notes to the Consolidated Financial Statements — Unaudited

(US dollars in millions, except per share amounts)

During the second quarter of 2012 approximately 7.5 million warrants were exercised.  In connection with this exercise approximately 388,000 shares of common stock were issued and $0.4 million was paid in cash. All TCM warrants were exercised or expired as of June 30, 2012.

For the nine months ended September 30, 2012, TCM recorded a non-cash increase to common stock of $1.2 million representing the fair value of warrants exercised on the date of such exercise.

(d)           Provisionally-Priced Contracts

TCM also enters into provisionally-priced molybdenum purchase contracts that also contain an embedded derivative, which is bifurcated and accounted for as a derivative.  Changes to the fair values of the embedded derivatives related to provisionally-priced molybdenum purchases are included in operating expenses in the consolidated statements of operations and comprehensive (loss) income as the product is sold.

TCM determines the fair value of its provisionally-priced contracts using a market approach based upon observable inputs from published market prices and contract terms.

The following table sets forth TCM’s outstanding provisionally-priced contracts as of September 30, 2012, which all mature in 2012:

(e)                                  Fixed-Priced Contracts

TCM’s results of operations and operating cash flows are affected by changes in market prices for molybdenum. To mitigate a portion of this risk, TCM enters into certain molybdenum sales contracts pursuant to which it sells future production at fixed prices. These fixed prices may be different than the quoted market prices at the date of sale.  Forward molybdenum sales contracts in place at September 30, 2012 cover the period through May 31, 2014.

7. Fair Value Measurement

US GAAP accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The standards establish a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

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THOMPSON CREEK METALS COMPANY INC.

Notes to the Consolidated Financial Statements — Unaudited

(US dollars in millions, except per share amounts)

The following table sets forth TCM’s financial assets and liabilities measured at fair value by level within the fair value hierarchy. As required, assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

The following table summarizes the fair value activity of TCM’s Level 3 financial liabilities for the nine months ended September 30, 2012:

The sensitivity to changes in the unobservable inputs and their impact on the fair value measurement of senior unsecured notes can be significant.  The significant unobservable inputs for the senior unsecured notes are risk-free interest rates and credit spread assumptions.  The risk-free interest rate is negatively correlated to the fair value measure. An increase (decrease) in risk-free interest rates will decrease (increase) the fair value measure.  The credit spread is negatively correlated to the fair value measure.  An increase (decrease) in the credit spread will decrease (increase) the fair value measure.

There were no transfers into or out of Level 3 during the nine months ended September 30, 2012.  TCM’s policy is to recognize transfers into and out of Level 3 as of the actual date of the event or change in circumstances.

8.  Capital Leases

On March 30, 2011, TCM entered into an equipment financing facility, which was amended and restated on December 9, 2011 (the “Equipment Facility”), pursuant to which Caterpillar Financial Services Limited (“Caterpillar”) agreed to underwrite up to $132.0 million in mobile fleet equipment financing for the Mt. Milligan project. Each borrowing under the Equipment Facility represents a capital lease and has a term of 48 or 60 months. Interest on the amounts borrowed under the Equipment Facility is payable

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THOMPSON CREEK METALS COMPANY INC.

Notes to the Consolidated Financial Statements — Unaudited

(US dollars in millions, except per share amounts)

at either floating or fixed rates, at TCM’s option. TCM’s ability to borrow under the Equipment Facility terminates in December 2013 (or such later date as may be agreed upon by Caterpillar), and any unused commitments under the Equipment Facility will then terminate and no longer be available to TCM. At the end of each 48 or 60-month lease period, TCM has the option to purchase the underlying equipment for a nominal sum. Under the terms of the Equipment Facility, TCM is required to be in compliance with the financial covenants contained in TCM’s revolving credit facility described below. As of September 30, 2012, TCM had $61.7 million in outstanding borrowings under the Equipment Facility and was in compliance with its covenants. Interest pertaining to the Equipment Facility is allocable to the cost of developing mining properties and is capitalized until assets are ready for their intended use. For the three and nine months ended September 30, 2012, TCM capitalized $0.5 million and $0.8 million, respectively, of the interest and debt issuance costs associated with the Equipment Facility.

During the third quarter of 2012, TCM entered into sale-leaseback transactions with Caterpillar with respect to certain equipment pursuant to the Equipment Facility. As of September 30, 2012, TCM received $49.3 million in cash from Caterpillar for the sale of equipment, which was subsequently leased back. Interest payments are based on LIBOR plus a margin. The leases are considered to be capital leases resulting in an increase to capital lease obligation of $44.4 million after upfront payments of $4.9 million.

TCM’s total capital leases consists of the following:

9. Debt

TCM’s total debt consists of the following:

Credit Facility

TCM has in place a $300 million senior secured revolving credit facility governed by the terms of a credit agreement (the “Credit Agreement”). On August 10, 2012, the Company executed a fifth amendment to the Credit Agreement which revised and put in place new reporting requirements, financial covenants and measurements.  Pursuant to the Credit Agreement, TCM (1) must meet a minimum quarterly EBITDA covenant commencing in the fourth quarter of 2012, (2) must maintain minimum consolidated liquidity of at least $100 million as of the last date of each fiscal quarter through the completion of Mt. Milligan, (3) is not permitted to allow its Consolidated Leverage Ratio (as defined in the credit agreement) to exceed 3.00:1.00 for any period of four quarters beginning with the period ending March 31, 2014, (4) must maintain a Consolidated Interest Coverage Ratio (as defined in the credit agreement) of 3.00:1.00 for any period of four fiscal quarters beginning with the period ending March 31, 2014, (5) must meet certain liquidity thresholds for borrowings and repayments and (6) must meet certain conditions precedent for borrowings, including a condition precedent that TCM’s cash balance be lower than $50 million.  As of September 30, 2012, TCM was in compliance with the Credit Agreement’s financial covenants.

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THOMPSON CREEK METALS COMPANY INC.

Notes to the Consolidated Financial Statements — Unaudited

(US dollars in millions, except per share amounts)

The Credit Agreement will terminate and all amounts outstanding thereunder will be due and payable on December 10, 2014.  TCM can prepay amounts outstanding under the Credit Agreement at any time, and the Credit Agreement can be voluntarily terminated by TCM at any time prior to the December 10, 2014 maturity date without premium or penalty.  Borrowings under the credit facility can be in US dollars or Canadian dollars.  TCM may elect that revolving loans under the Credit Agreement denominated in US dollars bear interest at either the ABR (as defined in the Credit Agreement ) or the Eurodollar Rate (as defined in the Credit Agreement), plus a margin that varies depending on TCM’s Consolidated Leverage Ratio (as defined in the Credit Agreement).  TCM may elect that revolving loans under the Credit Agreement denominated in Canadian dollars bear interest at either the Canadian Prime Rate (as defined in the Credit Agreement) or the CDOR Rate (as defined in the Credit Agreement), plus a margin that varies depending on our Consolidated Leverage Ratio.  TCM’s obligations under the Credit Agreement are secured by a senior lien on substantially all of our tangible and intangible assets.

During 2012, TCM’s reclamation bond at TC Mine increased from $25.5 million to $42.3 million, and its share of reclamation costs at Endako Mine increased from $5.2 million to $11.6 million.  The $42.3 million reclamation bond at TC Mine was issued in the form of a surety bond, and the original escrow reclamation deposit of $19.1 million was released.  The $15.6 million reclamation bond at Endako Mine was issued in the form of a letter of credit under TCM’s Credit Agreement, and the original $5.2 million reclamation deposit was released. As of September 30, 2012, TCM had no outstanding borrowings under the Credit Agreement and had issued and outstanding $24.9 million in letters of credit under the Credit Agreement, including $0.1 million related to Berg. Commitment fees for the three and nine months ended September 30, 2012 related to the Credit Agreement were $0.7 million and $2.0 million, respectively. For the three and nine months ended September 30, 2012, TCM capitalized $0.1 million and $0.2 million, respectively, of issuance costs associated with letters of credit of $9.2 million for Mt. Milligan under the Credit Agreement. At September 30, 2012, TCM had undrawn borrowing capacity of $275.1 million under the revolving credit facility.

7.375% Senior Unsecured Notes

On May 20, 2011, TCM issued $350 million of 7.375% senior unsecured notes (the “2018 Notes”).  The proceeds received in the offering were $339.9 million, which were net of financing fees of $10.1 million. For the three and nine months ended September 30, 2012, TCM capitalized $6.7 million and $20.4 million, respectively, of the interest and debt issuance costs associated with the 2018 Notes. TCM is utilizing the net proceeds from the 2018 Notes offering to fund the development of Mt. Milligan and for general working capital purposes. The 2018 Notes are guaranteed on a senior basis by substantially all of TCM’s subsidiaries.

The 2018 Notes mature on June 1, 2018 and accrue interest from May 20, 2011 until maturity at a fixed rate of 7.375% per year. Interest is payable in cash semi-annually in arrears on June 1 and December 1 to the holders of record at the close of business on the May 15 and November 15 prior to each interest payment date, and the first interest payment occurred on December 1, 2011.

The 2018 Notes are redeemable at TCM’s option, in whole or in part, at any time prior to June 1, 2014 at a price equal to 100% of the principal amount of the 2018 notes, plus accrued and unpaid interest and a make whole premium. TCM may also redeem up to 35% of the original principal amount of the 2018 Notes at any time prior to June 1, 2014 with the proceeds of certain equity offerings at a redemption price of 107.375% of the principal amount of the 2018 Notes, together with accrued and unpaid interest to, but not including, the date of redemption. TCM may also redeem the 2018 Notes at any time on or after June 1, 2014 at the redemption prices specified in the indenture together with accrued and unpaid interest to, but not including, the date of redemption. Finally, the Company may redeem the 2018 Notes at any time upon the occurrence of specified events relating to Canadian tax law at a redemption price of 100% of the principal amount of the 2018 Notes plus accrued and unpaid interest to, but not including, the date of redemption.

For purposes of the fair market value disclosed in Note 7, the carrying values of the 2018 Notes as of September 30, 2012 and December 31, 2011 were higher than the fair values of approximately $273.4 million and $309.0 million, respectively.  TCM determined the fair values of the 2018 Notes using a discounted cash flow valuation model, consisting of inputs such as risk-free interest rates and credit spreads.

The 2018 Notes include both standard financial and non-financial covenants, including, among others, limitations on incurring additional indebtedness, making restricted payments and allowing new liens.  As of September 30, 2012, TCM was in compliance with these covenants.

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THOMPSON CREEK METALS COMPANY INC.

Notes to the Consolidated Financial Statements — Unaudited

(US dollars in millions, except per share amounts)

12.5% Senior Unsecured Notes

On May 11, 2012, TCM issued $200 million of 12.5% senior unsecured notes (the “2019 Notes”). The proceeds received in the offering were $193.1 million, which were net of financing fees of $6.9 million.  For the three and nine months ended September 30, 2012, TCM capitalized $6.6 million and $10.2 million, respectively, of the interest and debt issuance costs associated with the 2019 Notes. TCM is utilizing the net proceeds from the 2019 Notes offering to fund the development of Mt. Milligan and for general working capital purposes. The 2019 Notes are guaranteed on a senior basis by substantially all of TCM’s subsidiaries.

The 2019 Notes mature on May 1, 2019 and accrue interest from May 1, 2012 until maturity at a fixed rate of 12.5% per year. Interest on the 2019 Notes is payable on May 1 and November 1 of each year, commencing November 1, 2012, to the holders of record at the close of business on the April 15 and October 15 prior to each interest payment date.

The 2019 Notes are redeemable at TCM’s option at any time prior to May 1, 2016 at a price equal to 100% of the principal amount of the 2019 Notes, plus accrued and unpaid interest and a make-whole premium.  TCM may also redeem up to 35% of the original principal amount of the 2019 Notes at any time prior to May 1, 2015 with the proceeds of certain equity offerings at a redemption price of 112.5% of the principal amount of the 2019 Notes, together with accrued and unpaid interest to, but not including, the date of redemption. TCM may also redeem the 2019 Notes at any time on or after May 1, 2016 at the redemption prices specified in the indenture together with accrued and unpaid interest to, but not including, the date of redemption. Finally, TCM may redeem the 2019 Notes at any time upon the occurrence of specified events relating to Canadian tax law at a redemption price of 100% of the principal amount of the 2019 Notes plus accrued and unpaid interest to, but not including, the date of redemption.

For purposes of the fair market value disclosed in Note 7, the carrying value of the 2019 Notes as of September 30, 2012 was higher than the fair value of approximately $189.1 million.  TCM determined the fair value of the 2019 Notes using a discounted cash flow valuation model, consisting of inputs such as risk-free interest rates and credit spreads.

The 2019 Notes include both standard financial and non-financial covenants, including, among others, limitations on incurring additional indebtedness, making restricted payments and allowing new liens.  As of September 30, 2012, TCM was in compliance with these covenants.

Mobile Mining Equipment Loans

On December 8, 2010, TCM executed an equipment financing agreement with Caterpillar in the amount of $12.8 million secured by six units of mobile mining equipment purchased by TCM during 2010. This fixed rate loan bears interest at 3.6%, is scheduled to mature no later than December 8, 2015 and has an outstanding payable amount of $8.6 million as of September 30, 2012. TCM has an additional fixed rate loan bearing interest at 5.9% that is scheduled to mature no later than October 31, 2013 and has an outstanding payable of $3.6 million as of September 30, 2012.

10.  Gold Stream Arrangement

On August 8, 2012, TCM entered into an amendment to its amended and restated gold stream agreement with Royal Gold pursuant to which TCM agreed to sell to Royal Gold an additional 12.25% of the refined gold production from Mt. Milligan for $200 million, plus $435 per ounce, or the prevailing market rate if lower than $435 per ounce, when the gold is delivered.  After giving effect to this transaction, TCM has agreed to sell to Royal Gold an aggregate total of 52.25% of the refined gold production from its Mt. Milligan project, and Royal Gold’s aggregate investment (including amounts previously funded and commitments for future funding) in the refined gold from Mt. Milligan has increased to $781.5 million.

During the third quarter, Royal Gold made a cash payment to TCM of $120 million. The amendment provides for future scheduled payments by Royal Gold to TCM in an aggregate amount of $206.9 million, to be paid on a quarterly basis as follows:  $95 million on December 1, 2012; $62 million on March 1, 2013; $37 million on June 1, 2013; and $12.9 million on September 1, 2013.  Following the September 1, 2013 payment, Royal Gold will have satisfied its obligations to make quarterly payments to TCM.

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THOMPSON CREEK METALS COMPANY INC.

Notes to the Consolidated Financial Statements — Unaudited

(US dollars in millions, except per share amounts)

11. Tangible Equity Units (tMEDS)

On May 11, 2012, TCM completed a public offering of 8,800,000 tMEDS with a stated value of $25.00. Each tMEDS unit consists of a prepaid common stock purchase contract and a senior amortizing note due May 15, 2015. The prepaid common stock purchase contracts were recorded as additional paid-in-capital (a component of shareholders’ equity), net of issuance costs, and the senior amortizing notes have been recorded as long-term debt. Issuance costs associated with the debt component were recorded as a prepaid expense, which will be amortized using the effective interest rate method over the term of the instrument to May 15, 2015. TCM allocated the proceeds from the issuance of the tMEDS to equity and debt based on the relative fair values of the respective components of each tMEDS unit. The proceeds received in the offering were $212.3 million, which were net of financing fees of $7.7 million.  For the three and nine months ended September 30, 2012, TCM capitalized $1.2 million and $1.8 million, respectively, of the interest and debt issuance costs associated with the tMEDS. The aggregate values assigned upon issuance to each component of the tMEDS are as follows:

(unaudited — US$ in millions except per unit amounts)