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INCOME TAXES: (Tables)

12 Months Ended

Dec. 31, 2012

INCOME TAXES:

Components of the provision for income taxes

		Years ended December 31,
(in millions)		2012			2011			2010
U.S. federal and state:
Current		$	(0.1	)	$	(2.4	)	$	(11.2	)
Deferred		(108.6		)	(45.3		)	6.2
Uncertain tax positions		147.4			(0.4		)	34.8
		38.7			(48.1		)	29.8
Foreign (Peru and Mexico):
Current		1,025.1			1,238.7			843.5
Deferred		17.1			(86.3		)	(5.2		)
		1,042.2			1,152.4			838.3
Total provision for income taxes		$	1,080.9		$	1,104.3		$	868.1

Schedule of source of income

		For the years ended December 31,
(in millions)		2012			2011			2010
Earnings by location:
U.S.		$	(0.1	)	$	(1.1	)	$	(1.0	)
Foreign
Peru		846.0			1,351.9			1,544.7
Mexico		2,127.6			2,097.9			887.1
		2,973.6			3,449.8			2,431.8
Earnings before taxes on income		$	2,973.5		$	3,448.7		$	2,430.8

Reconciliation of the statutory income tax rate to the effective tax rate

The reconciliation of the statutory income tax rate to the effective tax rate is as follows (in percentage points):

		For the years ended December 31,
		2012		2011		2010
Expected tax		30.0	%	30.0	%	30.0	%
Effect of income taxed at a rate other than the statutory rate		1.6		4.3		5.3
Percentage depletion		(4.2	)	(4.0	)	(4.3	)
Other permanent differences		3.7		1.2		1.8
Peru tax on net income deemed distributed		1.3		1.3		2.0
Special mining tax		1.6		0.5		—
Mexican tax on dividends		—		—		0.4
Increase (decrease) in unrecognized tax benefits for uncertain tax positions		5.0		—		4.6
Repatriated foreign earnings		(1.7	)	2.1		—
Amounts (over) / under provided in prior years		(0.6	)	(3.5	)	(4.5	)
Other		(0.4	)	0.1		0.4
Effective income tax rate		36.3	%	32.0	%	35.7	%

Schedule of deferred tax assets and liabilities

		As of December 31,
(in millions)		2012			2011
Assets:
Inventories		$	23.6		$	23.2
Trade receivables		—			18.1
Capitalized exploration expenses		24.4			31.9
U.S. foreign tax credit carryforward		202.3			174.4
U.S tax effect of Peruvian deferred tax liability		33.4			3.7
Reserves		77.5			69.7
Mexican tax loss carryforward		26.9			35.7
Labor share buyback		30.0			30.1
Other		32.6			14.0
Total deferred tax assets		450.7			400.8
Liabilities:
Property, plant and equipment		(125.0		)	(166.2		)
Deferred charges		(81.6		)	(35.3		)
Mexican tax on consolidated dividends		(34.6		)	(32.6		)
Outside basis difference		(41.3		)	(91.6		)
Metal hedging		—			(4.0		)
Other		(0.5		)	(2.1		)
Total deferred tax liabilities		(283.0		)	(331.8		)
Total net deferred tax assets / (liabilities)		$	167.7		$	69.0

Schedule of reconciliation of amount of unrecognized tax benefits

The total amount of unrecognized tax benefits in 2012, 2011 and 2010, was as follows (in millions):

		2012			2011			2010
Unrecognized tax benefits, opening balance		$	70.6		$	75.7		$	30.7
Gross increases — tax positions in prior period		39.7			21.6			46.3
Gross decreases — tax positions in prior period		0.2			(26.8		)	(1.8		)
Gross increases — current-period tax positions		110.7			0.1			0.5
		150.6			(5.1		)	45.0
Unrecognized tax benefits, ending balance		$	221.2		$	70.6		$	75.7

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Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years.

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Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets.

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Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations.

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Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.



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