SEGMENT AND RELATED INFORMATION:

6 Months Ended

Jun. 30, 2014

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 it 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 Senior Management Officers on the segment basis.  The Senior Management Officers of the Company focus 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 June 30, 2014
	(in millions)
	Mexican Open-pit		Mexican IMMSA Unit		Peruvian Operations		Corporate, other and eliminations			Consolidated
Net sales outside of segments	$	772.3	$	87.5	$	627.6	—			$	1,487.4
Intersegment sales	—		22.4		—		$	(22.4	)	—
Cost of sales (exclusive of depreciation, amortization and depletion)	312.0		83.1		347.1		(15.6		)	726.6
Selling, general and administrative	9.1		3.9		11.2		1.2			25.4
Depreciation, amortization and depletion	54.9		7.8		48.4		5.0			116.1
Exploration	0.8		7.4		5.8		8.1			22.1
Operating income	$	395.5	$	7.7	$	215.1	$	(21.1	)	597.2
Less:
Interest, net										(33.2		)
Other income (expense)										(5.7		)
Income taxes										(225.8		)
Equity earnings of affiliate										5.9
Non-controlling interest										(1.1		)
Net income attributable to SCC										$	337.3
Capital expenditure	$	267.8	$	9.2	$	97.6	$	1.0		$	375.6
Property, net	$	3,918.8	$	379.8	$	2,503.8	$	131.3		$	6,933.7
Total assets	$	5,976.8	$	896.6	$	3,431.3	$	1,203.2		$	11,507.9

	Three Months Ended June 30, 2013
	(in millions)
	Mexican Open-pit		Mexican IMMSA Unit		Peruvian Operations		Corporate, other and eliminations			Consolidated
Net sales outside of segments	$	724.1	$	90.0	$	596.1	—			$	1,410.2
Intersegment sales	—		25.4		—		$	(25.4	)	—
Cost of sales (exclusive of depreciation, amortization and depletion)	336.9		88.4		317.6		(31.7		)	711.2
Selling, general and administrative	9.1		3.9		13.2		1.3			27.5
Depreciation, amortization and depletion	43.2		7.1		42.2		1.0			93.5
Exploration	0.8		6.6		2.5		1.7			11.6
Operating income	$	334.1	$	9.4	$	220.6	$	2.3		566.4
Less:
Interest, net										(46.5		)
Other income (expense)										16.9
Income taxes										(167.8		)
Equity earnings of affiliate										5.1
Non-controlling interest										(1.4		)
Net income attributable to SCC										$	372.7
Capital expenditure	$	307.6	$	13.5	$	63.9	$	0.5		$	385.5
Property, net	$	2,964.5	$	367.1	$	2,234.7	$	70.1		$	5,636.4
Total assets	$	4,927.8	$	865.7	$	3,411.0	$	1,449.8		$	10,654.3

	Six Months Ended June 30, 2014
	(in millions)
	Mexican Open-pit		Mexican IMMSA Unit		Peruvian Operations		Corporate, other and eliminations			Consolidated
Net sales outside of segments	$	1,420.3	$	183.6	$	1,237.9	—			$	2,841.8
Intersegment sales	—		46.8		—		$	(46.8	)	—
Cost of sales (exclusive of depreciation, amortization and depletion)	541.4		167.6		670.2		(10.7		)	1,368.5
Selling, general and administrative	17.7		7.6		22.4		2.2			49.9
Depreciation, amortization and depletion	109.6		15.6		95.6		5.7			226.5
Exploration	1.7		12.4		7.7		14.9			36.7
Operating income	$	749.9	$	27.2	$	442.0	$	(58.9	)	1,160.2
Less:
Interest, net										(69.3		)
Other income (expense)										(10.0		)
Income taxes										(429.9		)
Equity earnings of affiliate										11.9
Non-controlling interest										(2.3		)
Net income attributable to SCC										$	660.6
Capital expenditure	$	523.0	$	18.3	$	155.4	$	2.7		$	699.4
Property, net	$	3,918.8	$	379.8	$	2,503.8	$	131.3		$	6,933.7
Total assets	$	5,976.8	$	896.6	$	3,431.3	$	1,203.2		$	11,507.9

	Six Months Ended June 30, 2013
	(in millions)
	Mexican Open-pit		Mexican IMMSA Unit		Peruvian Operations		Corporate, other and eliminations			Consolidated
Net sales outside of segments	$	1,586.7	$	179.9	$	1,266.6	—			$	3,033.2
Intersegment sales	—		57.4		—		$	(57.4	)	—
Cost of sales (exclusive of depreciation, amortization and depletion)	717.5		161.5		630.7		(75.7		)	1,434.0
Selling, general and administrative	17.9		7.7		25.3		1.9			52.8
Depreciation, amortization and depletion	83.5		13.8		83.6		3.2			184.1
Exploration	1.7		12.7		4.9		2.7			22.0
Operating income	$	766.1	$	41.6	$	522.1	$	10.5		1,340.3
Less:
Interest, net										(93.5		)
Other income (expense)										17.8
Income taxes										(406.8		)
Equity earnings of affiliate										13.3
Non-controlling interest										(3.0		)
Net income attributable to SCC										$	868.1
Capital expenditure	$	567.2	$	31.4	$	103.2	$	0.5		$	702.3
Property, net	$	2,964.5	$	367.1	$	2,234.7	$	70.1		$	5,636.4
Total assets	$	4,927.8	$	865.7	$	3,411.0	$	1,449.8		$	10,654.3