SEGMENT AND RELATED INFORMATION:

9 Months Ended

Sep. 30, 2013

SEGMENT AND RELATED INFORMATION:

SEGMENT AND RELATED INFORMATION:

NOTE 10 — SEGMENT AND RELATED INFORMATION:

Company management views Southern Copper as having three reportable segments and manages on the basis of these segments.  The reportable segments identified by the Company are: the Peruvian operations, the Mexican open-pit operations and the Mexican underground mining operations segment identified as the IMMSA unit.

The three reportable segments identified are groups of mines, each of which constitute an operating segment, with similar economic characteristics, type of products, processes and support facilities, similar regulatory environments, similar employee bargaining contracts and similar currency risks. In addition, each mine within the individual group earns revenues from similar type of customers for their products and services and each group incurs expenses independently, including commercial transactions between groups.

Financial information is regularly prepared for each of the three segments and the results of the Company’s operations are regularly reported to the Chief Operating Officer on the segment basis.  The Chief Operating Officer of the Company focuses on operating income and on total assets as measures of performance to evaluate different segments and to make decisions to allocate resources to the reported segments.  These are common measures in the mining industry.

Financial information relating to Southern Copper’s segments is as follows:

	Three Months Ended September 30, 2013
	(in millions)
	Mexican Open-pit		Mexican IMMSA Unit		Peruvian Operations		Corporate, other and eliminations			Consolidated
Net sales outside of segments	$	641.0	$	88.2	$	655.3		—		$	1,384.5
Intersegment sales	—		18.2		—		$	(18.2	)	—
Cost of sales (exclusive of depreciation, amortization and depletion)	265.4		74.2		340.9		(14.5		)	666.0
Selling, general and administrative	8.2		3.5		11.7		0.7			24.1
Depreciation, amortization and depletion	46.2		7.6		43.6		4.1			101.5
Exploration	0.7		6.7		4.6		—			12.0
Operating income	$	320.5	$	14.4	$	254.5	$	(8.5	)	580.9
Less:
Interest, net										(43.7		)
Other income (expense)										1.7
Income taxes										(195.2		)
Equity earnings of affiliate										1.8
Non-controlling interest										(1.3		)
Net income attributable to SCC										$	344.2
Capital expenditure	$	335.0	$	13.1	$	122.1	$	18.0		$	488.2
Property, net	$	3,266.5	$	372.5	$	2,330.5	$	62.6		$	6,032.1
Total assets	$	5,474.7	$	882.0	$	3,527.8	$	1,051.2		$	10,935.7

	Three Months Ended September 30, 2012
	(in millions)
	Mexican Open-pit		Mexican IMMSA Unit		Peruvian Operations		Corporate, other and eliminations			Consolidated
Net sales outside of segments	$	784.7	$	86.6	$	681.1	—			$	1,552.4
Intersegment sales	—		22.3		—		$	(22.3	)	—
Cost of sales (exclusive of depreciation, amortization and depletion)	294.5		60.7		341.4		(25.7		)	670.9
Selling, general and administrative	8.4		3.6		11.0		0.7			23.7
Depreciation, amortization and depletion	36.9		6.3		40.1		(2.0		)	81.3
Exploration	1.0		8.3		3.2		—			12.5
Legal fees related to SCC shareholder derivative lawsuit	—		—		—		316.2			316.2
Operating income	$	443.9	$	30.0	$	285.4	$	(311.5	)	447.8
Less:
Interest, net										(25.8		)
Other income (expense)										3.5
Income taxes										(219.8		)
Equity earnings of affiliate										13.6
Non-controlling interest										(1.4		)
Net income attributable to SCC										$	217.9
Capital expenditure	$	133.7	$	12.4	$	70.1	$	42.0		$	258.2
Property, net	$	2,244.6	$	341.2	$	2,146.8	$	123.6		$	4,856.2
Total assets	$	4,082.3	$	807.5	$	3,184.3	$	2,767.7		$	10,841.8

	Nine Months Ended September 30, 2013
	(in millions)
	Mexican Open-pit		Mexican IMMSA Unit		Peruvian Operations		Corporate, other and eliminations			Consolidated
Net sales outside of segments	$	2,227.7	$	268.1	$	1,921.9	—			$	4,417.7
Intersegment sales	—		75.6		—		$	(75.6	)	—
Cost of sales (exclusive of depreciation, amortization and depletion)	982.9		235.7		976.5		(90.1		)	2,105.0
Selling, general and administrative	26.1		11.2		37.0		2.6			76.9
Depreciation, amortization and depletion	129.6		21.4		127.2		7.4			285.6
Exploration	2.4		19.4		12.2		—			34.0
Operating income	$	1,086.7	$	56.0	$	769.0	$	4.5		$	1,916.2
Less:
Interest, net										(137.3		)
Other income (expense)										19.5
Income taxes										(596.9		)
Equity earnings of affiliate										15.2
Non-controlling interest										(4.4		)
Net income attributable to SCC										$	1,212.3
Capital expenditure	$	881.0	$	44.5	$	225.3	$	39.7		$	1,190.5
Property, net	$	3,266.5	$	372.5	$	2,330.5	$	62.6		$	6,032.1
Total assets	$	5,474.7	$	882.0	$	3,527.8	$	1,051.2		$	10,935.7

	Nine Months Ended September 30, 2012
	(in millions)
	Mexican Open-pit		Mexican IMMSA Unit		Peruvian Operations		Corporate, other and eliminations			Consolidated
Net sales outside of segments	$	2,483.3	$	281.3	$	2,253.6	—			$	5,018.2
Intersegment sales	—		98.1		—		$	(98.1	)	—
Cost of sales (exclusive of depreciation, amortization and depletion)	926.2		206.0		1,033.3		(104.8		)	2,060.7
Selling, general and administrative	25.5		10.8		35.6		2.7			74.6
Depreciation, amortization and depletion	106.2		18.9		118.1		(6.6		)	236.6
Exploration	4.2		21.2		8.4		—			33.8
Legal fees related to SCC shareholder derivative lawsuit	—		—		—		316.2			316.2
Operating income	$	1,421.2	$	122.5	$	1,058.2	$	(305.6	)	2,296.3
Less:
Interest, net										(107.0		)
Other income (expense)										29.1
Income taxes										(848.5		)
Equity earnings of affiliate										38.2
Non-controlling interest										(5.3		)
Net income attributable to SCC										$	1,402.8
Capital expenditure	$	537.0	$	40.5	$	158.2	$	(69.8	)	$	665.9
Property, net	$	2,244.6	$	341.2	$	2,146.8	$	123.6		$	4,856.2
Total assets	$	4,082.3	$	807.5	$	3,184.3	$	2,767.7		$	10,841.8