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SEGMENT AND RELATED INFORMATION:
 3 Months Ended
Mar. 31, 2015
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 Senior Management on the segment basis. Senior Management 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 March 31, 2015

(in millions)

 

 

 

Mexican
Open-Pit

 

Mexican

IMMSA Unit

 

Peruvian
Operations

 

Corporate, other
and eliminations

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales outside of segments

 

$
664.2

 

$
90.3

 

$
520.3

 

—

 

$
1,274.8

 

Intersegment sales

 

—

 
18.9

 

—

 

$
(18.9

)

—

 

Cost of sales (exclusive of depreciation, amortization and depletion)

 
299.2

 
89.9

 
303.0

 
(12.3

)
679.8

 

Selling, general and administrative

 
9.4

 
4.0

 
10.3

 
1.2

 
24.9

 

Depreciation, amortization and depletion

 
54.1

 
7.7

 
53.0

 
2.2

 
117.0

 

Exploration

 
0.8

 
2.3

 
2.7

 
4.5

 
10.3

 

Environmental remediation

 
5.9

 

—

 

—

 

—

 
5.9

 

Operating income

 

$
294.8

 

$
5.3

 

$
151.3

 

$
(14.5

)
436.9

 

Less:

 

 

 

 

 

 

 

 

 

 

 

Interest, net

 

 

 

 

 

 

 

 

 
(23.1

)

Other income (expense)

 

 

 

 

 

 

 

 

 
(3.7

)

Income taxes

 

 

 

 

 

 

 

 

 
(129.2

)

Equity earnings of affiliate

 

 

 

 

 

 

 

 

 
2.8

 

Non-controlling interest

 

 

 

 

 

 

 

 

 
(1.3

)

Net income attributable to SCC

 

 

 

 

 

 

 

 

 

$
282.4

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital investment

 

$
184.7

 

$
6.6

 

$
53.2

 

$
1.3

 

$
245.8

 

Property, net

 

$
4,502.6

 

$
388.3

 

$
2,560.4

 

$
94.3

 

$
7,545.6

 

Total assets

 

$
7,569.8

 

$
890.6

 

$
3,647.1

 

$
(859.6

)

$
11,247.9

 

 

Three Months Ended March 31, 2014

(in millions)

 

 

 

Mexican
Open-Pit

 

Mexican
IMMSA Unit

 

Peruvian
Operations

 

Corporate, other
and eliminations

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales outside of segments

 

$
648.2

 

$
95.9

 

$
610.3

 

—

 

$
1,354.4

 

Intersegment sales

 

 

 
24.4

 

 

 

$
(24.4

)

—

 

Cost of sales (exclusive of depreciation, amortization and depletion)

 
229.5

 
84.4

 
323.1

 
4.9

 
641.9

 

Selling, general and administrative

 
8.7

 
3.7

 
11.2

 
0.9

 
24.5

 

Depreciation, amortization and depletion

 
54.7

 
7.8

 
47.2

 
0.8

 
110.5

 

Exploration

 
0.9

 
5.0

 
1.9

 
6.8

 
14.6

 

Operating income

 

$
354.4

 

$
19.4

 

$
226.9

 

$
(37.8

)
562.9

 

Less:

 

 

 

 

 

 

 

 

 

 

 

Interest, net

 

 

 

 

 

 

 

 

 
(36.0

)

Other income (expense)

 

 

 

 

 

 

 

 

 
(4.2

)

Income taxes

 

 

 

 

 

 

 

 

 
(204.1

)

Equity earnings of affiliate

 

 

 

 

 

 

 

 

 
6.0

 

Non-controlling interest

 

 

 

 

 

 

 

 

 
(1.2

)

Net income attributable to SCC

 

 

 

 

 

 

 

 

 

$
323.4

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital investment

 

$
267.7

 

$
9.0

 

$
57.8

 

$
2.4

 

$
336.9

 

Property, net

 

$
3,764.7

 

$
380.8

 

$
2,454.2

 

$
85.8

 

$
6,685.5

 

Total assets

 

$
6,314.9

 

$
863.0

 

$
3,428.5

 

$
658.3

 

$
11,264.7