XML 23 R10.htm IDEA: XBRL DOCUMENT
v3.8.0.1

INCOME TAXES: | 9 Months Ended
--- | ---
Sep. 30, 2017
INCOME TAXES: |
INCOME TAXES: | NOTE 4 — INCOME TAXES: The income tax provision and the effective income tax rate for the nine months of 2017 and 2016 consisted of (in millions):
|  | 2017 |  | 2016 |
Statutory income tax provision |  | $ | 473.0 |  | $ | 268.5 |
Peruvian royalty |  | 0.5 |  | — |
Mexican royalty |  | 67.7 |  | 29.4 |
Peruvian special mining tax |  | 15.4 |  | 7.5 |
Total income tax provision |  | $ | 556.6 |  | $ | 305.4 |
Effective income tax rate |  | 35.7 | % | 34.1 | %
These provisions include income taxes for Peru, Mexico and the United States. In addition, a Mexican royalty tax, a portion of the Peruvian royalty tax and the Peruvian special mining tax are included in the income tax provision. The increase in the effective tax rate for the 2017 period from the same period of 2016 is primarily due to an increase in expected dividends from our Mexican subsidiaries. The Company’s Unrecognized Tax Benefits (UTB) are expected to change in the fourth quarter of 2017. The change is estimated to be $153 million and it is not expected to have a material effect on the Company’s financial statements because most of this change will be offset by corresponding adjustments to deferred tax balances. The UTB change is caused by the filing in early October 2017 of Internal Revenue Service (IRS) Form 3115 (Application for Change in Accounting Method) by the Company’s parent Americas Mining Corporation. The change is voluntary and is considered an automatic change pursuant to the guidelines published by the IRS. Peruvian income tax rate: In December 2016, the Peruvian Government enacted income tax law changes to both the income tax and dividend tax rate that became effective on January 1, 2017. The 2016 rates and the new rates are as follows:
Year |  | Income Tax Rate |  | Dividend Tax Rate |
2016 |  | 28.0 | % | 6.8 | %
2017 and later |  | 29.5 | % | 5 | %
Peruvian royalty and special mining tax: The mining royalty charge is based on operating income margins with graduated rates ranging from 1% to 12% of operating profits, with a minimum royalty charge assessed at 1% of net sales. If the operating income margin is 10% or less, the royalty charge is 1% and for each 5% increment in the operating income margin, the royalty charge rate increases by 0.75%, up to a maximum of 12%. The minimum royalty charge assessed at 1% of net sales is recorded as cost of sales and those amounts assessed against operating income are included in the income tax provision. The Company has accrued $15.4 million and $12.2 million of royalty charge in the nine months of 2017 and 2016, respectively, of which $0.5 million was included in income taxes in 2017; no amounts were included in income tax in the nine months of 2016. The special mining tax is based on operating income and its rate ranges from 2% to 8.4%. It begins at 2% for operating income margin up to 10% and increases by 0.4% of operating income for each addittoional 5% of operating income until 85% of operating income is reached. The Company has accrued $15.4 million and $7.5 million of special mining tax as part of the income tax provision for the nine months of 2017 and 2016, respectively. Mexican mining royalty: Mexico has a mining royalty charge of 7.5% on earnings before taxes as defined by Mexican tax regulations and an additional royalty charge of 0.5% over gross income from sales of gold, silver and platinum. The Company has accrued $67.7 million and $29.4 million of royalty taxes as part of the income tax provision for the nine months of 2017 and 2016, respectively. Accounting for uncertainty in income taxes: In the third quarter and nine months of 2017, there were no changes in the Company’s uncertain tax positions.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32537-109319 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration