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STOCKHOLDERS' EQUITY:
 3 Months Ended
Mar. 31, 2017
STOCKHOLDERS' EQUITY:  
STOCKHOLDERS' EQUITY:

 

NOTE 11 — STOCKHOLDERS’EQUITY:

 

Treasury Stock:

 

Activity in treasury stock in the three-month period ended March 31, 2017 and 2016 is as follows (in millions):

 

 

 

2017

 

2016

 

Southern Copper common shares

 

 

 

 

 

Balance as of January 1,

 

$
2,769.0

 

$
2,697.6

 

Purchase of shares

 

—

 
53.7

 

 

 

 

 

 

 

Balance as of March 31,

 
2,769.0

 
2,751.3

 

 

 

 

 

 

 

 

 

 

 

 

 

Parent Company (Grupo Mexico) common shares

 

 

 

 

 

Balance as of January 1,

 
218.6

 
211.3

 

Other activity, including dividend, interest and foreign currency transaction effect

 
2.1

 
3.7

 

 

 

 

 

 

 

Balance as of March 31,

 
220.7

 
215.0

 

 

 

 

 

 

 

 

 

 

 

 

 

Treasury stock balance as of March 31,

 

$
2,989.7

 

$
2,966.3

 

 

 

 

 

 

 

 

 

 

Southern Copper Common Shares:

 

At March 31, 2017 and 2016, there were in treasury 111,579,617 and 110,889,016 SCC’s common shares, respectively.

 

SCC share repurchase program:

 

In 2008, the Company’s Board of Directors (“BOD”) authorized a $500 million share repurchase program that has since been increased by the BOD and is currently authorized to $3 billion. Pursuant to this program, the Company purchased common stock as shown in the table below. These shares are available for general corporate purposes. The Company may purchase additional shares of its common stock from time to time, based on market conditions and other factors. This repurchase program has no expiration date and may be modified or discontinued at any time.

 

Period

 

Total Number
of Shares
Purchased

 

Average
Price Paid
per Share

 

Total Number of
Shares Purchased
as Part of Publicly
Announced Plan

 

Maximum
Number of Shares
that May Yet Be
Purchased Under
the Plan
@ $35.89(1)

 

Total Cost
($ in
millions)

 

From

 

To

 

 

 

 

 

 

 

 

 

 

 

2008

 

2012

 
46,914,486

 

$
18.72

 
46,914,486

 

 

 
878.1

 

2013:

 

 

 
10,245,000

 
27.47

 
57,159,486

 

 

 
281.4

 

2014:

 

 

 
22,711,428

 
30.06

 
79,870,914

 

 

 
682.8

 

2015:

 

 

 
36,689,052

 
27.38

 
116,559,966

 

 

 
1,004.4

 

2016:

 

 

 

 

 

 

 

 

 

 

 

 

 

01/01/16

 

01/31/16

 
2,235,200

 
24.05

 
118,795,166

 

 

 
53.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total first quarter

 

 

 
2,235,200

 
24.05

 

 

 

 

 
53.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

08/01/16

 

08/31/16

 
115,000

 
25.88

 
118,910,166

 

 

 
3.0

 

09/01/16

 

09/30/16

 
587,601

 
25.55

 
119,497,767

 

 

 
15.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total third quarter

 

 

 
702,601

 
25.61

 

 

 

 

 
18.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total 2016

 

 

 
2,937,801

 
24.42

 

 

 

 

 
71.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total purchased

 

 

 
119,497,767

 

$
24.42

 

 

 
2,274,543

 

$
2,918.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(*) NYSE closing price of SCC common shares at March 31, 2017.

 

As a result of the repurchase of shares of SCC’s common stock, Grupo Mexico’s direct and indirect ownership was 88.9% as of March 31, 2017. There was no activity in the SCC share repurchase program during the first quarter of 2017.

 

Parent Company common shares:

 

At March 31, 2017 and 2016 there were in treasury 112,457,204 and 118,278,037 of Grupo Mexico’s common shares, respectively.

 

Employee Stock Purchase Plan:

 

2010 Plan: During 2010, the Company offered to eligible employees a stock purchase plan through a trust that acquires series B shares of Grupo Mexico stock for sale to its employees, employees of subsidiaries, and certain affiliated companies. The purchase price was established at 26.51 Mexican pesos (approximately $1.28) for the initial subscription. Every two years employees were able to acquire title to 50% of the shares paid in the previous two years. The employees paid for shares purchased through monthly payroll deductions over the eight year period of the plan. At the end of the eight year period, the Company granted the participant a bonus of one share for every ten shares purchased by the employee.

 

The participants were entitled to receive dividends in cash for dividends paid by Grupo Mexico for all shares that were fully purchased and paid by the employee as of the date that the dividend is paid. If the participant had only partially paid for shares, the entitled dividends were used to reduce the remaining liability owed for purchased shares.

 

In the case of voluntary or involuntary resignation/termination of the employee, the Company paid to the employee the fair market sales price at the date of resignation/termination of the fully paid shares, net of costs and taxes. When the fair market sales value of the shares was higher than the purchase price, the Company applied a deduction over the amount to be paid to the employee based on a decreasing schedule specified in the plan.

 

In case of retirement or death of the employee, the Company rendered the buyer or his legal beneficiary, the fair market sales value as of the date of retirement or death of the shares effectively paid, net of costs and taxes.

 

The stock based compensation expense for the first quarter 2017 and 2016 and the unrecognized compensation expense under this plan were as follows (in millions):

 

 

 

2017

 

2016

 

Stock based compensation expense

 

$
0.1

 

$
0.1

 

Unrecognized compensation expense

 

$
0.7

 

$
1.3

 

 

The unrecognized compensation expense under this plan is expected to be recognized over the remaining one year and nine month period.

 

The following table presents the activity of this plan for the three months ended March 31, 2017 and 2016:

 

 

 

Shares

 

Unit Weighted Average
Grant Date Fair Value

 

 

 

 

 

 

 

Outstanding shares at January 1, 2017

 
1,401,096

 

$
2.05

 

Granted

 

—

 

—

 

Exercised

 

—

 
2.05

 

Forfeited

 

—

 

—

 

 

 

 

 

 

 

Outstanding shares at March 31, 2017

 
1,401,096

 

$
2.05

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding shares at January 1, 2016

 
2,227,582

 

$
2.05

 

Granted

 

—

 

—

 

Exercised

 
(338,989

)

—

 

Forfeited

 

—

 

—

 

 

 

 

 

 

 

Outstanding shares at March 31, 2016

 
1,888,593

 

$
2.05

 

 

 

 

 

 

 

 

 

2015 Plan: In January 2015, the Company offered to eligible employees a new stock purchase plan (the “New Employee Stock Purchase Plan”) through a trust that acquires series B of shares of Grupo Mexico stock for sale to its employees, and employees of subsidiaries, and certain affiliated companies.

 

The purchase price was established at 38.44 Mexican pesos (approximately $1.86) for the initial subscription, which expires on January 2023. Every two years employees will be able to acquire title to 50% of the shares paid in the previous two years. The employees will pay for shares purchased through monthly payroll deductions over the eight year period of the plan. At the end of the eight year period, the Company will grant the participant a bonus of 1 share for every 10 shares purchased by the employee. Any future subscription will be at the average market price at the date of acquisition or the grant date.

 

If Grupo Mexico pays dividends on shares during the eight year period, the participants will be entitled to receive the dividend in cash for all shares that have been fully purchased and paid as of the date that the dividend is paid. If the participant has only partially paid for shares, the entitled dividends will be used to reduce the remaining liability owed for purchased shares.

 

In the case of voluntary or involuntary resignation/termination of the employee, the Company will pay to the employee the fair market sales price at the date of resignation of the fully paid shares, net of costs and taxes. When the fair market sales value of the shares is higher than the purchase price, the Company will apply a deduction over the amount to be paid to the employee based on a decreasing schedule specified in the plan.

 

In case of retirement or death of the employee, the Company will render the buyer or his legal beneficiary, the fair market sales value as of the date of retirement or death of the shares effectively paid, net of costs and taxes.

 

The stock based compensation expense for the first quarter 2017 and 2016 and the unrecognized compensation expense under this plan were as follows (in millions):

 

 

 

2017

 

2016

 

Stock based compensation expense

 

$
0.2

 

$
0.2

 

Unrecognized compensation expense

 

$
3.4

 

$
4.2

 

 

The following table presents the activity of this plan for the three months ended March 31, 2017 and 2016:

 

 

 

Shares

 

Unit Weighted Average
Grant Date Fair Value

 

 

 

 

 

 

 

Outstanding shares at January 1, 2017

 
2,540,223

 

$
2.63

 

Granted

 

—

 

—

 

Exercised

 
(228,430

)
2.63

 

Forfeited

 

—

 

—

 

 

 

 

 

 

 

Outstanding shares at March 31, 2017

 
2,311,793

 

$
2.63

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding shares at January 1, 2016

 

—

 

—

 

Granted

 
2,652,386

 

$
2.63

 

Exercised

 

—

 

—

 

Forfeited

 

—

 

—

 

 

 

 

 

 

 

Outstanding shares at March 31, 2016

 
2,652,386

 

$
2.63

 

 

 

 

 

 

 

 

 

Non-controlling interest:

 

The following table presents the non-controlling interest activity for the three months ended March 31, 2017 and 2016:

 

 

 

2017

 

2016

 

Balance as of January 1,

 

$
38.6

 

$
36.3

 

Net earnings

 
0.9

 
0.6

 

Dividend paid

 
(0.2

)

—

 

 

 

 

 

 

 

Balance as of March 31,

 

$
39.3

 

$
36.9