Filed by Americas Mining Corporation
Filed by Grupo México, S.A.B. de C.V.
Pursuant to Rule 425 under the Securities Act of 1933Subject Company: Southern Copper Corporation
Commission File No.: 001-14066
ADDITIONAL INFORMATION AND WHERE TO FIND IT
Americas Mining Corporation (AMC) and Southern Copper Corporation (Southern Copper) will file an Information Statement/Prospectus with the Securities and Exchange Commission. Investors and security holders are urged to read carefully the Information Statement/Prospectus regarding the proposed transaction when it becomes available, because it will contain important information. Investors and security holders may obtain a free copy of the Information Statement/Prospectus (when it is available) and other documents containing information about Southern Copper, without charge, at the SEC's web site at http://www.sec.gov. Free copies of the Information Statement/Prospectus may be obtained by directing a request to Americas Mining Corporation, 1150 North 7th Avenue, Tucson, AZ 85705, USA, Attention: General Counsel. Free copies of Southern Copper Corporation's filings may be obtained by directing a request to Southern Copper Corporation, 11811 North Tatum Blvd., Suite 2500, Phoenix, AZ 85028, USA, Attention: Investor Relations Department.
FORWARD-LOOKING STATEMENTS
Statements in this release that are "forward-looking statements" are based on currently available information, operating plans and projections about future events and trends. They inherently involve risks and uncertainties that could cause actual results to differ materially from those predicted in such forward-looking statements. Such risks and uncertainties include, but are not limited to: AMC's ability to enter into definitive agreements with respect to the proposed transaction; the results of a due diligence review of Southern Copper; AMC's ability to achieve the synergies and value creation contemplated by the proposed transaction; AMC's ability to promptly and effectively integrate the businesses of Southern Copper and ASARCO; the costs associated with the proposed transaction; the timing to consummate the proposed transaction; any necessary actions to obtain required regulatory approvals; the ability to obtain existing lender and other required third-party consents; increased costs; metal prices; unfavorable economic conditions; changes in the legal and regulatory environment; and unstable political conditions, civil unrest or other developments. Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made. Neither Grupo México nor AMC undertake any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.
*****
The following is a press release issued by Grupo Mexico on July 28, 2010.
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Second Quarter 2010 Results
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Mexico City, July 28, 2010 - Grupo México, S.A.B. de C.V. (“Grupo México” - BMV: GMEXICOB) reports its results for the second quarter of 2010 (“2Q10”).
Grupo México
Financial Highlights in Dollars1
|
Investor
Contact:
Jorge Pulido
(52 55) 1103-5320
E-mail:
ir@mm.gmexico.com
Web Page:
www.gmexico.com
 |
·
|
Consolidated sales for 2Q10 were US$1.896 billion compared to US$1.079 billion for 2Q09, an increase of 76% mainly due to greater production by the Mining Division following the recovery of Asarco and higher metals prices. The Transportation Division reported a relevant increase of 33% in sales over 2Q09.
|
|
·
|
The cost of sales for 2Q10 was US$984 million, increasing 66% compared to 2Q09. This increase is mainly explained by the incorporation of Asarco (61%), higher fuel and energy prices (8%), and purchase of minerals (5%).
|
|
|
·
|
The EBITDA for the quarter totaled US$886 million, which compared to US$449 million in 2Q09, represents a significant increase of 98%. The EBITDA margin for 2Q10 represented 47% of sales.
|
|
|
·
|
Net consolidated earnings were US$310 million compared to US$239 million for 2Q09, increasing 30% and represented 16% of sales.
|
|
|
·
|
The total consolidated debt as of June 30, 2010 amounted to US$4.003 billion, with a cash balance of US$2.634 billion, which represents US$1.369 billion in net debt. During first half 2010 prepayments were made to the AMC loan and the note Asarco issued for the asbestos creditors for a total of US$930 million.
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|
|
·
|
On July 23, 2010, the Board of Directors approved a dividend payment in cash of $0.17 pesos per outstanding share, to be paid in single exhibition starting September 10, 2010.
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Financial Highlights for Grupo México
|
Second Quarter
|
Variance
|
January - June
|
Variance
|
|||||||||||||||||||||||||||||
|
(Thousand US Dollars)
|
2010
|
2009
|
US$000
|
%
|
2010
|
2009
|
US$000
|
%
|
||||||||||||||||||||||||
|
Sales
|
1,896,347 | 1,078,657 | 817,690 | 75.8 | 3,829,108 | 1,929,293 | 1,899,815 | 98.5 | ||||||||||||||||||||||||
|
Cost of Sales
|
983,615 | 593,241 | 390,374 | 65.8 | 1,976,744 | 1,126,072 | 850,672 | 75.5 | ||||||||||||||||||||||||
|
Operating Income
|
719,260 | 348,802 | 370,458 | 106.2 | 1,464,743 | 534,195 | 930,548 | 174.2 | ||||||||||||||||||||||||
|
EBITDA
|
886,197 | 448,608 | 437,589 | 97.5 | 1,813,787 | 735,501 | 1,078,286 | 146.6 | ||||||||||||||||||||||||
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Margin EBITDA (%)
|
46.7% | 41.6% | 47.4% | 38.1% | ||||||||||||||||||||||||||||
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Net Income
|
309,621 | 238,601 | 71,020 | 29.8 | 658,859 | 258,413 | 400,446 | 155.0 | ||||||||||||||||||||||||
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Margin Profit (%)
|
16.3% | 22.1% | 17.2% | 13.4% | ||||||||||||||||||||||||||||
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Investments/Capex
|
116,256 | 202,323 | (86,066 | ) | (42.5 | ) | 206,211 | 291,689 | (85,478 | ) | (29.3 | ) | ||||||||||||||||||||
|
Employees
|
22,972 | 18,536 | 4,436 | 23.9 | 22,972 | 18,536 | 4,436 | 23.9 | ||||||||||||||||||||||||
Number of Shares Outstanding 7,785,000,000 as of June 30, 2010
__________________________
1 All figures are expressed in US dollars following GAAP accounting principles, unless otherwise stated.
|
Second Quarter 2010 Results
|
 |
Highlights
Mining Division
Americas Mining Corporation
|
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·
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Combination of Asarco and Southern Copper .- Americas Mining Corporation (AMC), has submitted to the Board of Directors of Southern Copper Corporation (SCC) a non-binding indication of interest to combine the operations of Southern Copper and Asarco, in which all public stockholders of SCC would receive 1.237 common shares of AMC in exchange for their SCC shares. The exchange ratio implies an equity value of Asarco of approximately US$5.94 billion. AMC would become a U.S. SEC registrant NYSE-listed, Mexico Stock Exchange-listed, and Lima Stock Exchange-listed. If the transactions is completed, AMC would own 100% equity of SCC and 100% of Asarco.
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GMexico believes the combination would solidify the combined company as the one with largest copper reserves, and as one of the leading copper producer companies in the world. The transaction would result in a combined operation that would provide all of Southern Copper’s stockholders the opportunity to benefit from: (i) additional estimated reserves of 8.3 million tons of contained copper; (ii) additional production estimated at 200,000 tons of contained copper per year; (iii) expanded geographic production footprints, production flexibility and a larger scale of operations; (iv) benefits from economies of scale; and (v) a stronger capital structure with more financial flexibility with the integration of Asarco and its strong cash flow generation, no debt and environmental liabilities.
GMexico is convinced that a combination of SCC and ASARCO would provide important synergies, including cost reductions in operations, transportation and overhead, and capital expenditure savings, which would benefit all stockholders of the combined entity.
Southern Copper Corporation (SCC)
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·
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Cananea.- The Board of Directors approved a 5 year $3.8 billion capital investment program in the state of Sonora, Mexico. With this investment, the Company expects to expand annual copper production at Cananea 150% by increasing from 180,000 tons to 450,000 tons of copper contained The increase of 270,000 tons of copper is the result of a new concentrator with an estimated annual production of 188,000 tons of copper, and a two SX-EW plants with their Quebalix circuit which will have a total copper capacity of 82,000 tons per year. In addition, the Board approved the construction of the first in Cananea, which will produce 2,000 tons per year. This aggressive expansion plan will generate 6,000 jobs during the expansion and operation of this mining unit, as well as an important economic spill-over in benefit of Cananea and the State of Sonora.
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The Company will continue to implement its social, educational and cultural programs that it usually conducts in all its mining operations in conjunction with the local communities. These programs were temporarily put on hold due to the union labor disputes.
After the termination of the labor relations by enforcement of the law, the Company has immediately initiated the diagnostics and repair tasks. There are currently more than 3,000 workers, contractors personnel and technicians working directly at the mine. The estimated cost to restore this mining unit is approximately $114 million. The Company estimates to initiate copper production by September of this year and reach its full capacity of 180,000 tons by February of 2011.
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2Q10
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Page 2
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Second Quarter 2010 Results
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The following table provides details of the investment by project:
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Location
|
Projects
in the
State of Sonora
|
Previous
Cu Capacity
(Tons)
|
Additional
Cu Production
(Tons)
|
Previous + Additional
(Tons)
|
Investment
(US$ Million)
|
|
Cananea
|
Concentrator
|
125,000
|
188,000
|
313,000
|
$1,200
|
|
SX/EW Plant & Quebalix
|
55,000
|
82,000
|
137,000
|
$690
|
|
|
Mine Equipment & Infraestructure
|
-
|
-
|
$150
|
||
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Molybdenum Plant
|
-
|
2,000 Mo
|
$30
|
||
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Subtotal Cananea
|
180,000
|
270,000
|
450,000
|
$2,070
|
|
|
Projects related to the expansion of Cananea
|
|||||
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Empalme
|
Copper Smelter
|
-
|
350,000 (capacity)
|
$800
|
|
|
Copper Refinery
|
-
|
330,000 (capacity)
|
$500
|
||
|
Total Cananea
|
$3,370
|
||||
|
La Caridad
|
Pilares
|
-
|
40,000
|
40,000
|
$195
|
|
BC El Arco
|
SX/EW Plant
|
-
|
32,000
|
$240
|
|
|
Total
|
$342,000
|
$490,000
|
$3,805
|
||
|
|
·
|
Tia Maria Project.- The Tia Maria Project is underway. The technical group conformed by the Peruvian Government, the Company and local communities is partially formed and is scheduled to initiate the review of the Environmental Impact Assessment (“EIA”). The group will evaluate which of the three alternatives for water supply is more plausible. The Company has offered to build a dam with a capacity of approximately forty million cubic meters of water, that currently drains to the Pacific Ocean. The Company would only use seven million cubic meters per year of this dam. The remaining thirty-three million cubic meters would be available for the benefit of the Tambo valley agricultural communities and the Islay population. The second alternative for water supply is the direct extraction of underground water through wells, and the third alternative is the desalinization of seawater. With the latter two alternatives, the local communities will be deprived of the benefit of the additional thirty-three million cubic meters of water. We expect to receive the resolution during the 4Q10. In the meantime, we continue with the development of the detailed engineering studies, as well as with the equipment acquisitions. Company anticipates to begin production during 2012. The Tia Maria mining unit will produce through its leaching process 120,000 tons of copper.
|
|
Location
|
Projects in Peru
|
Previous
Cu Capacity
(Tons)
|
Additional
Production
(Tons)
|
Previous + Additional
(Tons)
|
Investment
(US$ Million)
|
|
Toquepala
|
Mine and Concentrator - Copper
|
165,000
|
100,000
|
265,000
|
$600
|
|
- Molybdenum
|
4,200
|
3,100
|
7,300
|
||
|
Cuajone
|
Mine and Concentrator - Copper
|
190,000
|
72,000
|
262,000
|
$300
|
|
- Molybdenum
|
5,300
|
500
|
5,800
|
||
|
Tia Maria
|
SX EW Copper
|
120,000
|
120,000
|
$934
|
|
|
Total Peruvian Operations - Copper
|
355,000
|
292,000
|
647,000
|
$1,834
|
|
|
- Molybdenum
|
9,500
|
3,600
|
13,100
|
||
|
|
·
|
Toquepala Expansion.- During the first semester, the Company has spent a total of $100 million on the Toquepala concentrator expansion. Detailed engineering is in progress. The use of high pressure rinding rolls (HPGR) at the tertiary crushing stage was approved; wet screening instead of dry screening is under evaluation. The EIA for this project is in its final stage and will be presented to the government at the end of August. An explanation of the project was recently presented to the local community.
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2Q10
|
Page 3
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|
Second Quarter 2010 Results
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Asarco
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|
·
|
Cost Reduction.- Asarco continues to reduce its operating costs (cash cost), lowering its unit cost to US$1.16 per pound of copper in 2Q10 from US$1.57 in 2Q09. This improvement resulted from greater productivity and operating efficiencies, in addition to better byproduct prices.
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|
|
·
|
Exploration Program.- During the 2Q10 an aggressive exploration and drilling program began at the Company's mine operations in the US. The initial results confirm the expectation that this program will increase Asarco’s reserves considerably and lead the way to increased mine production through the modernization of its mines and metallurgic plants.
|
Transportation Division
|
|
·
|
Favorable Ruling on Ferrosur Acquisition.- On May 12, the Federal Court of Justice on Tax and Administrative Matters (TGJFA) resolved as approved the acquisition of Ferrosur by Infraestructura y Transportes México (ITM), subsidiary of GMexico. Related parties expect to be notified shortly.
The final resolution is expected to be released in next months and the Company hopes that the CFC does not submit a revision resource, since it would represent a useless cost of technical and economic resources in a case that has already been solved by the overwhelming vote of eight judges.
|
|
|
·
|
Ferromex.- the first six months of 2010 posted a historic record both in the number of loaded rail cars transported and net tons/kilometers. Ferromex increased its general freight by 21.8% and containers by 41.1% when compared to the previous year. In terms of net tons/kilometer, freight increased 18.6% over 2009 and 12.1% over the previous record in 2008.
In general rail freight (excluding Intermodal), Ferromex was the railroad with the second largest volume growth in North America during the first six months of 2010, growing 19.7% over same period of 2009. For reference, US railroads grew an average of 9% during the same period (Source: Association of American Railroads).
Sales for the 2Q10 totaled US$309 million, compared to US$232 million in 2Q09, which represents an increase of 33%. Accumulated sales for the 1H10 were US $573 million, compared to US $431 million for the same period 2009, which represents an increase of 33% as well. EBITDA for the 2Q10 was US $105 million that when compared to US $71 million in the 2Q09 represents an increase of 49%. Accumulated EBITDA for the 1H10 was US $197 million, compared to US $126 million for the same period 2009, which represents an increase of 56%.
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|
|
·
|
Ferrosur.- During the first six months of 2010, Ferrosur increased 4.6% its net tons/km and 9.1% its loaded cars compared to the same period in 2009. The energy segment increased loaded cars by 151%, metals increased 47%, and automotive 29% during this period.
Sales for the 2Q10 totaled US$71 million, compared to US$57 million in 2Q09, which represents an increase of 25%. Accumulated sales for the 1H10 were US $134 million, compared to US $107 million for the same period 2009, which represents an increase of 25% as well. EBITDA for the 2Q10 was US $18 million that when compared to US $15 million in the 2Q09 represents an increase of 20%. Accumulated EBITDA for the 1H10 was US $35 million, compared to US $30 million for the same period 2009, which represents an increase of 18%.
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|
2Q10
|
Page 4
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|
Second Quarter 2010 Results
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|
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|
·
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Railroad Capital Expenditures.- The Railroad Division (including Ferrosur) invested US$31.9 million during the first six months of 2010 to improve infrastructure throughout its routes, to modernize its operating systems for greater safety and to improve its commercial systems. For 2010, the Railroad Division expects to invest a total of US $146 million, mainly in infrastructure renewal and the development of a rail yard at Río Escondido, Coahuila, which will support international car transportation at the Piedras Negras border crossing.
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|
|
·
|
Damages from hurricane “Alex”.- Rail service in northern Mexico was affected by hurricane Alex, which hit on June 30. However, repairs have been made to reopen the lines at the Eagle Pass - Piedras Negras crossing and also at the Torreón and Monterrey lines. Service is partial on the Monterrey - Altamira route while repairs are being completed on the Linares bridge; service is expected to return to normal by the first week of August. We do not expect Ferromex operations to be significantly affected in the third quarter as a result. A total of US$4 million is expected to be invested for the repair of tracks.
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* * * * *
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|
·
|
New Website for GMexico.- GMexico recently launched its new website with a new design and significantly expanding its informational content for the benefit of investors. The new website includes information on the different business divisions that comprise GMexico and can be found at: www.gmexico.com.mx or www.gmexico.com.
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2Q10
|
Page 5
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Second Quarter 2010 Results
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Financing
The net financing cost as of June 30, 2010 was US$136.6 million.
Debt Profile
|
As of June 30
|
||||||||||||||||||||
|
2010
|
2009
|
|||||||||||||||||||
|
(US$000)
|
Gross
Debt
|
Cash &
Banks
|
Net
Debt
|
Gross
Debt
|
Var.
Debt
|
|||||||||||||||
|
Grupo Mexico
|
10,033 | 53,854 | (43,821 | ) | - | - | ||||||||||||||
|
Americas Mining Corporation
|
867,770 | 102,222 | 765,548 | - | - | |||||||||||||||
|
Southern Copper Corporation
|
2,765,126 | 2,144,623 | 620,503 | 1,285,112 | 115.2 | |||||||||||||||
|
Asarco
|
- | 22,495 | (22,495 | ) | - | - | ||||||||||||||
|
Infraestructura y Transportes México (ITM)
|
- | 183,741 | (183,741 | ) | - | - | ||||||||||||||
|
GFM - Ferromex
|
360,254 | 126,876 | 233,378 | 385,212 | (6.5 | ) | ||||||||||||||
|
Grupo México (Consolidated)
|
4,003,183 | 2,633,811 | 1,369,372 | 1,670,324 | 139.7 | |||||||||||||||
A prepayment on the US$1.5 billion syndicated loan that AMC secured on December 9, 2009, for the reorganization of Asarco was made during the first half 2010 amounting to US$650 million. Additionally, Asarco prepaid the US$280 million note that was due December 9, 2010. At June 30, 2010 Asarco has no debt outstanding.
On April 16, 2010, SCC issued a US$1.5 billion note on 10 and 30 years. The offering was divided into US$400 million at a rate of 5.375% due 2020 and US$1.1 billion at 6.750% due 2040.
Ferrosur’s debt amounted to US$150.3 million as of June 30, 2010, which represents a net debt of US$64.9 million after deducting cash and cash equivalent balance of US$85.4 million.
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2Q10
|
Page 6
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|
Second Quarter 2010 Results
|
|
Mining Division
Americas Mining Corporation
Metals Market
The second quarter was a difficult period for commodities as a result of the general aversion to risk motivated by continued concern for the situation in Europe and the anticipated deceleration of China's growth. Average copper and zinc prices fell 2.7% and 11.5%, respectively, in 2Q10, compared to 1Q10. Meanwhile, molybdenum, gold, and silver posted increases of 2.0%, 7.8%, and 8.5% respectively, in their average prices during this same period.
Despite the correction of the copper prices seen since April and the high volatility maintained up until now, copper inventories have continued to drop, demonstrating a positive balance between the offer and demand for this metal. The withdrawal of speculative capital from copper and other commodities in light of the outlook for a slower global recovery has caused copper prices to operate closer to their fundamental bases, which continue to stand out among the most favorable in the sector.
Molybdenum prices have been less affected by external sentiment and continue to operate within a narrow range around $15 per pound, as the demand for this metal continues to improve gradually in many industry sectors, including increased use in alternative energy sources.
Average Metals Prices
|
Var. %
|
Var.
|
January - June
|
Var.
|
||||||||||||||||||||||||||||||
| 1Q10 | 2Q10 | 2Q09 | 2Q10-2Q09 | 2Q10-1Q10 | 2010 | 2009 |
%
|
||||||||||||||||||||||||||
|
Copper
|
($cts/Pound)
|
328.00 | 319.00 | 211.51 | 50.8 | (2.7 | ) | 323.00 | 184.00 | 75.5 | |||||||||||||||||||||||
|
Molybdenum
|
($dlls/Pound)
|
15.78 | 16.10 | 9.10 | 76.9 | 2.0 | 15.94 | 8.93 | 78.5 | ||||||||||||||||||||||||
|
Zinc
|
($cts/Pound)
|
103.82 | 91.90 | 66.83 | 37.5 | (11.5 | ) | 97.86 | 60.00 | 63.1 | |||||||||||||||||||||||
|
Silver
|
($dlls/Ounce)
|
16.91 | 18.35 | 13.75 | 33.5 | 8.5 | 17.63 | 13.19 | 33.7 | ||||||||||||||||||||||||
|
Gold
|
($dlls/Ounce)
|
1,108.90 | 1,195.68 | 921.51 | 29.8 | 7.8 | 1,152.29 | 915.11 | 25.9 | ||||||||||||||||||||||||
|
Lead
|
($cts/Pound)
|
100.76 | 88.47 | 68.00 | 30.1 | (12.2 | ) | 94.62 | 60.25 | 57.0 | |||||||||||||||||||||||
|
Sulfuric Acid
|
($dlls/Ton)
|
47.65 | 58.73 | 48.24 | 21.75 | 23.3 | 52.76 | 49.56 | 6.5 | ||||||||||||||||||||||||
Source: Copper, Zinc & Gold - LME; Silver - COMEX; Molybdenum - Metals Week Dealer Oxide Sulf Acid - AMC
Mining Production and Sales
Copper production in 2Q10 was 166,894 tons, 39.9% higher than that for the same period in 2009. The reincorporation of Asarco contributed with 53,357 tons of the total, while Southern Copper's production decreased by 5,740 tons due to an anticipated lower ore grade primarily at our Peruvian mines.
|
2Q10
|
Page 7
|
|
Second Quarter 2010 Results
|
|
|
Mining Divison
|
Second Quarter
|
Variance
|
January - December
|
Variance
|
|||||||||||||||||||||||||||||
|
2010
|
2009
|
US$000
|
%
|
2010
|
2009
|
US$000
|
%
|
||||||||||||||||||||||||||
|
Copper
|
(m.t.)
|
||||||||||||||||||||||||||||||||
|
Production
|
166,894 | 119,277 | 47,617 | 39.9 | 166,894 | 119,277 | 47,617 | 39.9 | |||||||||||||||||||||||||
|
Sales
|
165,099 | 122,893 | 42,206 | 34.3 | 165,099 | 122,893 | 42,206 | 34.3 | |||||||||||||||||||||||||
|
Molybdenum*
|
(m.t.)
|
||||||||||||||||||||||||||||||||
|
Production
|
5,510 | 4,389 | 1,121 | 25.5 | 5,510 | 4,389 | 1,121 | 25.5 | |||||||||||||||||||||||||
|
Sales
|
5,559 | 4,411 | 1,148 | 26.0 | 5,559 | 4,411 | 1,148 | 26.0 | |||||||||||||||||||||||||
|
Zinc*
|
(m.t.)
|
||||||||||||||||||||||||||||||||
|
Production
|
25,426 | 27,644 | (2,218 | ) | (8.0 | ) | 25,426 | 27,644 | (2,218 | ) | (8.0 | ) | |||||||||||||||||||||
|
Sales
|
24,311 | 25,023 | (712 | ) | (2.8 | ) | 24,311 | 25,023 | (712 | ) | (2.8 | ) | |||||||||||||||||||||
|
Silver
|
(Koz)
|
||||||||||||||||||||||||||||||||
|
Production
|
3,739 | 3,362 | 377 | 11.2 | 3,739 | 3,362 | 377 | 11.2 | |||||||||||||||||||||||||
|
Sales
|
4,849 | 4,311 | 538 | 12.5 | 4,849 | 4,311 | 538 | 12.5 | |||||||||||||||||||||||||
|
Gold*
|
(Oz)
|
||||||||||||||||||||||||||||||||
|
Production
|
3,973 | 3,724 | 250 | 6.7 | 3,973 | 3,724 | 250 | 6.7 | |||||||||||||||||||||||||
|
Sales
|
18,567 | 15,411 | 3,156 | 20.5 | 18,567 | 15,411 | 3,156 | 20.5 | |||||||||||||||||||||||||
*Asarco does not produce this mineral.
Molybdenum production reported a historic high at 5,510 tons in 2Q10, 25.5% above the same 2009 period. This increase is primarily due to better ore grades at Toquepala and improved recovery at Toquepala, La Caridad, and Cuajone.
Sales Distribution
The following chart reflects the cumulative sales share by metal as of June 30, 2010:
Southern Copper Corporation
Financial Highlights
|
Second Quarter
|
Variance
|
January - June
|
Variance
|
|||||||||||||||||||||||||||||
|
(Thousand US Dollars)
|
2010
|
2009
|
US$000
|
%
|
2010
|
2009
|
US$000
|
%
|
||||||||||||||||||||||||
|
Sales
|
1,173,240 | 824,509 | 348,731 | 42.3 | 2,392,645 | 1,446,507 | 946,138 | 65.4 | ||||||||||||||||||||||||
|
Cost of Sales
|
522,298 | 419,476 | 102,822 | 24.5 | 1,021,496 | 794,931 | 226,565 | 28.5 | ||||||||||||||||||||||||
|
Operating Income
|
540,423 | 303,196 | 237,227 | 78.2 | 1,149,194 | 447,324 | 701,870 | 156.9 | ||||||||||||||||||||||||
|
EBITDA
|
612,424 | 380,416 | 232,008 | 61.0 | 1,303,881 | 606,128 | 697,753 | 115.1 | ||||||||||||||||||||||||
|
Margin EBITDA (%)
|
52.2% | 46.1% | 54.5% | 41.9% | ||||||||||||||||||||||||||||
|
Net Income
|
313,387 | 174,968 | 138,419 | 79.1 | 696,631 | 253,660 | 442,971 | 174.6 | ||||||||||||||||||||||||
|
Margin Profit (%)
|
26.7% | 21.2% | 29.1% | 17.5% | ||||||||||||||||||||||||||||
|
Investments/Capex
|
92,925 | 142,725 | (49,800 | ) | (34.9 | ) | 168,288 | 206,181 | (37,892 | ) | (18.4 | ) | ||||||||||||||||||||
SCC sales in 2Q10 amounted to US$1.1732 billion, compared to US$825 million in the same 2009 period. This significant increase is due to higher metal prices and higher molybdenum volumes sold (26.0%), which contributed to maintaining an EBITDA margin level over 50%.
|
2Q10
|
Page 8
|
|
Second Quarter 2010 Results
|
|
Asarco²
Financial Highlights
|
Second Quarter
|
Variance
|
January - June
|
Variance
|
|||||||||||||||||||||||||||||
|
(Thousand US Dollars)
|
2010
|
2009
|
US$000
|
%
|
2010
|
2009
|
US$000
|
%
|
||||||||||||||||||||||||
|
Sales
|
395,153 | 271,206 | 123,947 | 45.7 | 812,756 | 490,524 | 322,232 | 65.7 | ||||||||||||||||||||||||
|
Cost of Sales
|
238,136 | 218,516 | 19,620 | 9.0 | 525,964 | 383,276 | 142,688 | 37.2 | ||||||||||||||||||||||||
|
Operating Income
|
109,677 | 37,713 | 71,964 | 190.8 | 194,094 | 76,959 | 117,135 | 152.2 | ||||||||||||||||||||||||
|
EBITDA
|
168,670 | 48,950 | 119,720 | 244.6 | 357,294 | 104,039 | 253,255 | 243.4 | ||||||||||||||||||||||||
|
Margin EBITDA (%)
|
42.7% | 18.0% | 44.0% | 21.2% | ||||||||||||||||||||||||||||
|
Net Income
|
63,049 | (30,279 | ) | 93,328 | (308.2 | ) | 107,185 | (37,337 | ) | 144,522 | (387.1 | ) | ||||||||||||||||||||
|
Margin Profit (%)
|
16.0% | -11.2% | 13.2% | -7.6% | ||||||||||||||||||||||||||||
|
Investments / Capex
|
2,465 | 24,533 | (22,068 | ) | (90.0 | ) | 6,715 | 40,323 | (33,608 | ) | (83.3 | ) | ||||||||||||||||||||
²The Asarco operation consolidated again with GMexico results as of December 10, 2009. The figures for 2Q09 are provided for comparative purposes only.
Asarco sales in 2Q10 amounted to US$395.1 million, increasing 46% over 2Q09, mainly due to increased copper production and higher metals prices.
The cost of sales during 2Q10 was US$238.1 million, compared to US$218.5 million in 2Q09, however they were 19.3% lower than 1Q10 mainly due to a $17 million adjustment during this quarter in terms of the inventory revaluation performed after December 10, 2009, when Asarco was reincorporated.
The production cost per pound of copper, net of byproducts gains, decreased to US$1.16 per pound in 2Q10 from US$1.57 in 2Q09. This improvement resulted from greater productivity, and operating efficiencies, as well as higher byproduct prices.
EBITDA for 2Q10 reached US$168.7 million, equivalent to 42.7% of sales. EBITDA increased of 244.6% when compared to 2Q09.
As of June 30, 2010 Asarco reports no debt outstanding, as it already prepaid the US$280 million note to the asbestos creditors that was due on December 9, 2010.
Asarco's copper production in 2Q10 was 53,357 tons, an 11.3% increase over 2Q09. This increase is due primarily to better ore grades at the Mission mine and stronger recovery at Ray.
|
2Q10
|
Page 9
|
|
Second Quarter 2010 Results
|
|
Transportation Division
ITM/Ferromex
Financial Highlights
|
Second Quarter
|
Variance
|
January - June
|
Variance
|
|||||||||||||||||||||||||||||
|
(Thousand US Dollars)
|
2010
|
2009
|
US$000
|
%
|
2010
|
2009
|
US$000
|
%
|
||||||||||||||||||||||||
|
Load Volume (MillionTons/Km)
|
11,939 | 10,261 | 1,678 | 16.4 | 22,365 | 18,852 | 3,513 | 18.6 | ||||||||||||||||||||||||
|
Sales
|
308,675 | 231,957 | 76,718 | 33.1 | 573,490 | 430,543 | 142,947 | 33.2 | ||||||||||||||||||||||||
|
Cost of Sales
|
195,160 | 155,181 | 39,979 | 25.8 | 366,805 | 290,046 | 76,759 | 26.5 | ||||||||||||||||||||||||
|
Operating Income
|
79,706 | 47,184 | 32,522 | 68.9 | 139,468 | 83,455 | 56,013 | 67.1 | ||||||||||||||||||||||||
|
EBITDA
|
104,873 | 70,545 | 34,328 | 48.7 | 197,080 | 126,266 | 70,814 | 56.1 | ||||||||||||||||||||||||
|
Margin EBITDA (%)
|
34.0% | 30.4% | 34.4% | 29.3% | ||||||||||||||||||||||||||||
|
Net Income
|
49,552 | 40,037 | 9,515 | 23.8 | 90,577 | 59,615 | 30,962 | 51.9 | ||||||||||||||||||||||||
|
Margin Profit (%)
|
16.1% | 17.3% | 15.8% | 13.8% | ||||||||||||||||||||||||||||
|
Investments / Capex
|
17,348 | 38,472 | (21,124 | ) | (54.9 | ) | 25,708 | 55,599 | (29,891 | ) | (53.8 | ) | ||||||||||||||||||||
Note: ITM does not consolidate Ferrosur as the resolution from the CFC remains pending
Volume transported during 2Q10 increased 16.4%, transporting 11.939 billion net tons-kilometer, compared to 10.261 billion transported during the same 2009 period. The sectors that experienced the strongest recovery were: siderurgical with 59%, automotive with 39%, intermodal with 36%, agricultural with 35%, and minerals with 12%.
Revenues for the Transportation Division increased 33.1% to US$308.7 million in 2Q10, compared to US$231.9 million in 2Q09. This improvement is explained by the mentioned volume increase as a result of the economic recovery in addition to more favorable rates and improved traffic mix.
The following chart shows revenue contribution by segment, as of June 30, 2010:
The operating cost for 2Q10 was US$195.1 million, 25.8% higher than 2Q09. This increase is due to increased freight volume, a 9.5% increase in the peso price of diesel, salary increases and exchange rate effects, all of which were partially mitigated by better performance by our locomotives.
EBITDA for 2Q10 was US$104.9 million, representing an increase of 48.7% compared to 2Q09.
|
2Q10
|
Page 10
|
|
Second Quarter 2010 Results
|
|
Ferrosur
Financial Highlights
|
Second Quarter
|
Variance
|
January - June
|
Variance
|
|||||||||||||||||||||||||||||
|
(Thousand US Dollars)
|
2010
|
2009
|
US$000
|
%
|
2010
|
2009
|
US$000
|
%
|
||||||||||||||||||||||||
|
Load Volume (MilionTons/Km)
|
1,845 | 1,769 | 1,678 | 4.3 | 3,565 | 3,408 | 157 | 4.6 | ||||||||||||||||||||||||
|
Sales
|
70,636 | 56,711 | 13,925 | 24.6 | 134,178 | 107,145 | 27,033 | 25.2 | ||||||||||||||||||||||||
|
Cost of Sales
|
49,118 | 40,012 | 9,106 | 22.8 | 93,116 | 74,832 | 18,284 | 24.4 | ||||||||||||||||||||||||
|
Operating Income
|
12,493 | 8,947 | 3,546 | 39.6 | 23,567 | 17,341 | 6,226 | 35.9 | ||||||||||||||||||||||||
|
EBITDA
|
17,999 | 14,962 | 3,037 | 20.3 | 35,322 | 29,864 | 5,458 | 18.3 | ||||||||||||||||||||||||
|
Margin EBITDA (%)
|
25.5% | 26.4% | 26.3% | 27.9% | ||||||||||||||||||||||||||||
|
Net Income
|
7,912 | 6,809 | 1,103 | 16.2 | 12,710 | 11,713 | 997 | 8.5 | ||||||||||||||||||||||||
|
Investments / Capex
|
5,285 | 4,947 | 338 | 6.8 | 6,255 | 6,110 | 146 | 2.4 | ||||||||||||||||||||||||
Ferrosur’s sales in 2Q10 were US$70.6 million, 24.6% higher than 2Q09. This gain was driven by a 4.3% increase in the net tons-kilometer transported, which increased to 1.845 billion in 2Q10 from 1.769 billion in 1Q09.
EBITDA for Ferrosur for 2Q10 of US$18.0 million was 20.3% higher than in the same 2009 period, representing a margin of 25.5%.
The following chart shows revenue contribution by segment, as of June 30, 2010:
The average exchange rate in 2Q10 was $12.56 compared to $13.35 for the same period in 2009, which had a negative impact in the cost of sales because of the more costly peso expenditures.
* * * * *
|
2Q10
|
Page 11
|
|
Second Quarter 2010 Results
|
|
Company Profile
Grupo México (“GMéxico”) is a holding company whose main activities are: (i) mining, being one of the world's largest integrated copper producers; (ii) railroad service with the most extensive network in Mexico; and (iii) drilling, engineering, procurement, and construction services. These lines of business are grouped under the following subsidiaries:
The mining division of GMéxico is represented by its subsidiary Americas Mining Corporation (“AMC”), whose principal subsidiaries are Southern Copper Corporation (“SCC”) in Mexico and Peru, and Asarco in the United States. The sum of both companies holds the world's largest copper reserves. SCC trades on the New York and Peru exchanges, while its stockholders, directly or through subsidiaries, are: Grupo México (80%) and other stockholders (20%). The company has mines, metallurgic plants, and exploration projects in Peru, Mexico, and Chile. Asarco, our fully owned US subsidiary, was reincorporated into GMéxico on December 9, 2009. Asarco has 3 mines and 1 smelting plant in Arizona and 1 refinery in Texas.
The transportation division of GMéxico is represented by its subsidiary Infraestructura y Transportes México, S.A. de C.V. (“ITM”), whose principal subsidiaries are (i) Grupo Ferroviario Mexicano, S.A. de C.V. (“GFM”), (ii) Ferrocarril Mexicano, S.A. de C.V. (“Ferromex”), (iii) Intermodal México, S.A. de C.V., and (iv) Texas Pacifico, LP, Inc. Ferromex is the largest railroad company with the most extensive coverage in Mexico. Ferromex has a network of 8,111 kilometers of track that cover approximately 71% of Mexico. Ferromex’s lines connect to five border points with the United States, four ports on the Pacific Coast and two on the Gulf of Mexico. Ferromex is controlled by Grupo México, holding 55.5%, with the remaining participation split between Union Pacific(26%) and Grupo Carso-Sinca Inbursa (18.5%). On November 24, 2005, Grupo México incorporated Ferrosur through Infraestructura y Transportes Ferroviarios, S.A. de C.V. (“ITF”); this acquisition is reported in the financial statements under the participation method. Ferrosur has a track network of 1,813 kilometers covering the central and southeastern part of the country, serving principally the states of Tlaxcala, Puebla, Veracruz, and Oaxaca, and has access to the ports of Veracruz and Coatzacoalcos on the Gulf of Mexico. Ferrosur is controlled by Grupo México, holding 74.99%, with Grupo Carso-Sinca Inbursa holding the remaining 25.01%.
The infrastructure and construction division of GMéxico is represented by its subsidiaries (i) México Proyectos y Desarrollos, S.A. de C.V. (“MPD”), (ii) México Constructora Industrial, SA de C.V. (“MCI”), (iii) México Compañía Constructora, S.A. de C.V. (“MCC”), (iv) Servicios de Ingeniería Consutec, S.A. de C.V., and (v) Compañía Perforadora México, S.A. de C.V. (“PEMSA”). MPD, PEMSA, MCI, and MCC are wholly owned by GMéxico. MPD, MCI and MCC are active in engineering, procurement, and infrastructure works construction projects. PEMSA offers oil and water drilling services and related value added services such as cementation engineering and directional or slated drilling. Consutec engages in integral project engineering activities.
_______________________________
This report includes forward-looking statements. In addition to the risk and uncertainties noted in the report, there are certain factors that could cause results to differ materially from those anticipated by some of the statements made. Many of these risks and uncertainties are related to factors beyond the reasonable control of Grupo México or that cannot be accurately estimated, such as future market conditions, metals prices, the behavior of other market stakeholders and the actions of government regulators, which are described in detail in the Company's annual report. Grupo Mexico does not assume any obligation whatsoever regarding the publication of a review to these projections to reflect events or circumstances occurring after the date of this report
|
2Q10
|
Page 12
|
|
Second Quarter 2010 Results
|
|
GRUPO MÉXICO (GM)
CONSOLIDATED FINANCIAL STATEMENTS (US GAAP)
|
(Thousands of US Dollars)
|
Quarters
|
Accumulated
|
|||||||
|
STATEMENT OF EARNINGS
|
Q2-10
|
Q2-09
|
Variance
|
2010
|
2009
|
Variance
|
|||
|
Net Sales
|
1,896,347
|
1,078,657
|
817,690
|
3,829,108
|
1,929,293
|
(1,202,624)
|
|||
|
Cost of Sales
|
983,615
|
593,241
|
390,373
|
1,976,744
|
1,126,072
|
(413,550)
|
|||
|
Gross Profit
|
912,733
|
485,416
|
427,317
|
1,852,364
|
803,221
|
(789,074)
|
|||
|
Gross Margin
|
48%
|
45%
|
48%
|
42%
|
|||||
|
Administrative expenses
|
48,371
|
37,047
|
11,324
|
97,360
|
72,418
|
(40,149)
|
|||
|
EBITDA
|
886,197
|
448,608
|
437,589
|
1,813,787
|
735,501
|
(778,181)
|
|||
|
Depreciation and Amortization
|
145,102
|
99,567
|
45,535
|
290,260
|
196,608
|
(3,255)
|
|||
|
Operating Income
|
719,260
|
348,802
|
370,458
|
1,464,743
|
534,195
|
(745,670)
|
|||
|
Operating Margin
|
38%
|
32%
|
38%
|
28%
|
|||||
|
Interest expense
|
79,515
|
6,643
|
72,872
|
142,027
|
53,423
|
(31,912)
|
|||
|
Interest capitalized
|
–
|
3,368
|
(3,368)
|
–
|
5,443
|
4,620
|
|||
|
Interest income
|
34,665
|
(37,872)
|
72,537
|
(5,385)
|
(53,222)
|
27,171
|
|||
|
Financial Coverage
|
1,438
|
(7,352)
|
8,790
|
2,263
|
4,827)
|
(81,590)
|
|||
|
Other expense, net
|
(7,740)
|
(38,076)
|
30,337
|
20,281
|
(15,234)
|
(90,918)
|
|||
|
Earnings before Tax
|
611,381
|
422,091
|
189,290
|
1,305,558
|
548,612
|
(573,041)
|
|||
|
Taxes
|
213,381
|
132,789
|
80,592
|
456,275
|
213,908
|
(228,865)
|
|||
|
Participation of partner
|
(9,151)
|
(8,032)
|
(1,120)
|
(14,323)
|
(13,429)
|
(169,582)
|
|||
|
Non controlling interest in consolidated subsidiaries.
|
97,529
|
58,733
|
38,797
|
204,747
|
89,720
|
14,369
|
|||
|
Net Earnings
|
309,621
|
238,601
|
71,021
|
658,859
|
258,413
|
(188,963)
|
|||
|
BALANCE SHEET
|
|||||||||
|
Cash and cash equivalents
|
2,633,811
|
1,287,758
|
1,346,053
|
2,633,811
|
1,287,758
|
1,346,053
|
|||
|
Marketable securities
|
50,146
|
40,732
|
9,414
|
50,146
|
40,732
|
9,414
|
|||
|
Restricted Cash
|
171,346
|
–
|
171,346
|
171,346
|
–
|
171,346
|
|||
|
Notes and Accounts receivable
|
682,699
|
467,752
|
214,946
|
682,699
|
467,752
|
214,946
|
|||
|
Inventories
|
804,524
|
490,884
|
313,640
|
804,524
|
490,884
|
313,640
|
|||
|
Prepaid and others current assets
|
331,522
|
218,716
|
112,807
|
331,522
|
218,716
|
112,807
|
|||
|
Total Current Assets
|
4,674,048
|
2,505,843
|
2,168,206
|
4,674,048
|
2,505,843
|
2,168,206
|
|||
|
Property, net
|
6,648,072
|
5,001,103
|
1,646,970
|
6,648,072
|
5,001,103
|
1,646,970
|
|||
|
Leachable material, net
|
186,160
|
131,778
|
54,381
|
186,160
|
131,778
|
54,381
|
|||
|
Other Long term Assets
|
2,110,683
|
933,079
|
1,177,604
|
2,110,683
|
933,079
|
1,177,604
|
|||
|
Total Assets
|
13,618,964
|
8,571,803
|
5,047,161
|
13,618,964
|
8,571,803
|
5,047,161
|
|||
|
Current portion of long-term debt
|
207,908
|
45,953
|
161,954
|
207,908
|
45,953
|
161,954
|
|||
|
Accumulated Liabilities
|
1,160,263
|
742,714
|
417,550
|
1,160,263
|
742,714
|
417,550
|
|||
|
Current Liabilities
|
1,368,171
|
788,667
|
579,504
|
1,368,171
|
788,667
|
579,504
|
|||
|
Long-term Debt
|
3,795,275
|
1,624,815
|
2,170,459
|
3,795,275
|
1,624,815
|
2,170,459
|
|||
|
Other non-current Liabilities
|
1,551,029
|
318,047
|
1,232,982
|
1,551,029
|
318,047
|
1,232,982
|
|||
|
Total Liabilities
|
6,714,475
|
2,731,529
|
3,982,946
|
6,714,475
|
2,731,529
|
3,982,946
|
|||
|
Stockholders Equity
|
2,000,446
|
2,000,446
|
–
|
2,000,446
|
2,000,446
|
–
|
|||
|
Other equity accounts
|
(345,032)
|
(262,948)
|
(82,084)
|
(345,032)
|
(262,948)
|
(82,084)
|
|||
|
Retaining Earnings
|
3,820,238
|
2,858,765
|
961,474
|
3,820,238
|
2,858,765
|
961,474
|
|||
|
Total Stockholders' equity
|
5,475,652
|
4,596,263
|
879,390
|
5,475,652
|
4,596,263
|
879,390
|
|||
|
Non controlling Interest.
|
1,428,837
|
1,244,011
|
184,825
|
1,428,837
|
1,244,011
|
184,825
|
|||
|
Total Liabilities and Stockholders' Equity
|
13,618,964
|
8,571,803
|
5,047,161
|
12,618,964
|
8,571,803
|
5,047,161
|
|||
|
CASH FLOW
|
|||||||||
|
Net Income
|
309,621
|
238,601
|
71,020
|
658,859
|
258,413
|
400,446
|
|||
|
Depreciation and Amortization
|
145,102
|
99,567
|
45,535
|
290,260
|
196,608
|
93,652
|
|||
|
Deferred Income Taxes
|
(44,428)
|
60,930
|
(105,358)
|
(55,923)
|
55,762
|
(111,685)
|
|||
|
Capitalized leachable material
|
(25,288)
|
–
|
(25,288)
|
(44,645)
|
–
|
(44,645)
|
|||
|
Non controlling interest.
|
97,530
|
58,735
|
38,795
|
204,747
|
89,720
|
115,027
|
|||
|
Operating assets and liabilities
|
452,146
|
36,597
|
415,549
|
670,237
|
(495,481)
|
1,165,718
|
|||
|
Other Net
|
(6,011)
|
(3,408)
|
(2,603)
|
(894)
|
(5,978)
|
5,084
|
|||
|
Net cash provided by operating activities
|
928,672
|
491,022
|
437,650
|
1,722,641
|
99,044
|
1,623,597
|
|||
|
Add property & equipment
|
(116,256)
|
(202,323)
|
86,067
|
(206,211)
|
(291,689)
|
85,478
|
|||
|
Operating cash flow
|
812,416
|
288,699
|
523,717
|
1,516,430
|
(192,645)
|
1,709,075
|
|||
|
Debt incurred
|
1,499,799
|
71
|
1,499,728
|
1,499,874
|
140
|
1,499,734
|
|||
|
Debt amortization
|
(445,129)
|
(26,281)
|
(418,848)
|
(952,641)
|
(37,111)
|
(915,530)
|
|||
|
Purchase of marketable securities
|
(30,066)
|
17,091
|
(47,157)
|
147,858
|
131,670
|
16,188
|
|||
|
Dividends paid
|
(191,435)
|
(80,846)
|
(110,589)
|
(396,331)
|
(156,835)
|
(239,496)
|
|||
|
Other Net
|
–
|
(10)
|
10
|
–
|
(71,566)
|
71,566
|
|||
|
Investment in ASARCO
|
–
|
–
|
–
|
–
|
–
|
–
|
|||
|
Capital Reimbursement
|
(293,156)
|
(320,494)
|
27,338
|
(377,787)
|
(158,873)
|
(218,914)
|
|||
|
Net cash used in financing activities
|
540,013
|
(410,469)
|
950,482
|
(79,027)
|
(292,575)
|
213,548
|
|||
|
Effect of exchange rate changes on cash
|
(8,550)
|
5,866
|
(14,416)
|
9,439
|
(12,435)
|
21,874
|
|||
|
Increase in cash & cash equivalent
|
1,343,879
|
(115,904)
|
1,459,783
|
1,446,842
|
(497,655)
|
1,944,497
|
|||
|
Cash & cash equivalents at begin yr.
|
1,461,278
|
1,403,662
|
57,616
|
1,358,315
|
1,785,413
|
(427,098)
|
|||
|
Cash & cash equivalents at yr. end
|
2,805,157
|
1,287,758
|
1,517,399
|
2,805,157
|
1,287,758
|
1,517,399
|
|||
|
2Q10
|
Page 13
|
|
Second Quarter 2010 Results
|
|
SOUTHERN COPPER CORPORATION & SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS (US GAAP)
|
(Thousands of US Dollars)
|
Quarters
|
Accumulated
|
||||||
|
STATEMENT OF EARNINGS
|
Q2-10
|
Q2-09
|
Variance
|
2010
|
2009
|
Variance
|
||
|
Net Sales
|
1,173,240
|
824,508
|
348,732
|
2,392,645
|
1,446,507
|
946,138
|
||
|
Cost of Sales
|
522,299
|
419,476
|
102,823
|
1,021,497
|
794,931
|
226,566
|
||
|
Exploration
|
10,065
|
5,021
|
5,044
|
18,530
|
10,423
|
8,107
|
||
|
Gross Profit
|
640,876
|
400,012
|
240,865
|
1,352,618
|
641,153
|
711,465
|
||
|
Gross Margin
|
55%
|
49%
|
57%
|
44%
|
||||
|
Administrative expenses
|
21,964
|
18,101
|
3,863
|
43,682
|
36,893
|
6,789
|
||
|
EBITDA
|
612,424
|
380,416
|
232,008
|
1,303,880
|
606,129
|
697,752
|
||
|
Depreciation and Amortization
|
78,490
|
78,715
|
(225)
|
159,743
|
156,936
|
2,806
|
||
|
Operating Income
|
540,422
|
303,195
|
237,227
|
1,149,193
|
447,324
|
701,870
|
||
|
Operating Margin
|
46%
|
37%
|
48%
|
31%
|
||||
|
Interest expense
|
45,050
|
18,574
|
26,476
|
68,838
|
38,389
|
30,449
|
||
|
Interest capitalized
|
–
|
3,368
|
(3,368)
|
–
|
5,443
|
(5,443)
|
||
|
Interest income
|
(1,329)
|
(899)
|
(430)
|
(3,380)
|
(5,173)
|
1,793
|
||
|
Financial Coverage
|
–
|
(6,785)
|
6,785
|
–
|
(4,181)
|
4,181
|
||
|
Other expense (income), net
|
6,489
|
1,495
|
4,994
|
5,056
|
(1,868)
|
6,924
|
||
|
Earnings before Tax
|
490,212
|
287,443
|
202,769
|
1,078,679
|
414,714
|
663,966
|
||
|
Taxes
|
174,902
|
111,414
|
63,488
|
378,142
|
159,438
|
218,704
|
||
|
Non controlling interest in consolidated subsidiaries.
|
1,924
|
1,061
|
863
|
3,907
|
1,615
|
2,291
|
||
|
Net Earnings
|
313,386
|
174,968
|
138,418
|
696,631
|
253,660
|
442,970
|
||
|
BALANCE SHEET
|
||||||||
|
Cash and cash equivalents
|
2,144,623
|
235,540
|
1,909,083
|
2,144,623
|
235,540
|
1,909,083
|
||
|
Marketable securities
|
–
|
–
|
–
|
–
|
–
|
–
|
||
|
Notes and Accounts receivable
|
386,167
|
315,408
|
70,759
|
386,167
|
315,408
|
70,759
|
||
|
Inventories
|
446,670
|
456,529
|
(9,859)
|
446,670
|
456,529
|
(9,859)
|
||
|
Prepaid and others current assets
|
144,593
|
195,192
|
(50,600)
|
144,593
|
195,192
|
(50,600)
|
||
|
Total Current Assets
|
3,122,053
|
1,202,671
|
1,919,383
|
3,122,053
|
1,202,671
|
1,919,383
|
||
|
Property, net
|
4,011,329
|
3,876,384
|
134,945
|
4,011,329
|
3,876,384
|
134,945
|
||
|
Leachable material, net
|
86,291
|
131,778
|
(45,488)
|
86,291
|
131,778
|
(45,488)
|
||
|
Other Long term Assets
|
229,810
|
230,918
|
(1,108)
|
229,810
|
230,918
|
(1,108)
|
||
|
Total Assets
|
7,449,483
|
5,441,751
|
2,007,732
|
7,449,483
|
5,441,751
|
2,007,732
|
||
|
Current portion of long-term debt
|
10,000
|
10,000
|
–
|
10,000
|
10,000
|
–
|
||
|
Accumulated Liabilities
|
539,670
|
403,579
|
136,091
|
539,670
|
403,579
|
136,091
|
||
|
Current Liabilities
|
549,670
|
413,579
|
136,091
|
549,670
|
413,579
|
136,091
|
||
|
Long-term Debt
|
2,755,126
|
1,275,112
|
1,480,014
|
2,755,126
|
1,275,112
|
1,480,014
|
||
|
Other non-current Liabilities
|
300,526
|
310,804
|
(10,278)
|
300,526
|
310,804
|
(10,278)
|
||
|
Total Liabilities
|
3,605,322
|
1,999,495
|
1,605,827
|
3,605,322
|
1,999,495
|
1,605,827
|
||
|
Stockholders Equity
|
8,846
|
8,846
|
–
|
8,846
|
8,846
|
–
|
||
|
Other equity accounts
|
410,978
|
409,112
|
1,866
|
410,978
|
409,112
|
1,866
|
||
|
Retaining Earnings
|
3,405,502
|
3,008,950
|
396,552
|
3,405,502
|
3,008,950
|
396,552
|
||
|
Total Stockholders' equity
|
3,825,326
|
3,426,908
|
398,418
|
3,825,326
|
3,426,908
|
398,418
|
||
|
Non controlling interest.
|
18,835
|
15,348
|
3,487
|
18,835
|
15,348
|
3,487
|
||
|
Total Liabilities and Stockholders' Equity
|
7,449,483
|
5,441,751
|
2,007,732
|
7,449,483
|
5,441,751
|
2,007,732
|
||
|
CASH FLOW
|
||||||||
|
Net Income
|
313,386
|
174,968
|
138,418
|
696,631
|
253,660
|
442,970
|
||
|
Depreciation and Amortization
|
78,490
|
78,715
|
(225)
|
159,743
|
156,936
|
2,807
|
||
|
Deferred Income Taxes
|
(19,871)
|
43,445
|
(63,316)
|
(13,796)
|
65,462
|
(79,258)
|
||
|
Capitalized leachable material
|
–
|
–
|
–
|
–
|
–
|
–
|
||
|
Non controlling interest.
|
1,924
|
1,061
|
863
|
3,907
|
1,615
|
2,292
|
||
|
Operating assets and liabilities
|
147,574
|
(192,358)
|
339,931
|
(21,767)
|
(571,333)
|
549,566
|
||
|
Other Net
|
(1,901)
|
4,080
|
(5,982)
|
2,122
|
9,766
|
(7,644)
|
||
|
Net cash provide by operating activities
|
519,601
|
109,912
|
409,689
|
826,839
|
(83,894)
|
910,733
|
||
|
Add property & equipment
|
(92,925)
|
(142,725)
|
49,799
|
(168,288)
|
(206,181)
|
37,893
|
||
|
Operating cash flow
|
426,676
|
(32,813)
|
459,489
|
658,551
|
(290,075)
|
948,626
|
||
|
Debt incurred
|
1,489,799
|
70
|
1,489,729
|
1,489,874
|
140
|
1,489,734
|
||
|
Debt amortization
|
(5,000)
|
(5,000)
|
–
|
(5,000)
|
(5,000)
|
–
|
||
|
Dividends paid
|
(384,322)
|
(38,440)
|
(345,882)
|
(750,969)
|
(137,806)
|
(613,163)
|
||
|
Purchase of marketable securities
|
–
|
–
|
–
|
–
|
–
|
–
|
||
|
Purchase of share SCC
|
–
|
–
|
–
|
–
|
(71,566)
|
71,566
|
||
|
Other
|
(29,806)
|
20,938
|
(50,743)
|
(21,610)
|
33,055
|
(54,665)
|
||
|
Net cash used in financing activities
|
1,070,671
|
(22,432)
|
1,093,104
|
712,295
|
(181,177)
|
893,472
|
||
|
Effect of exchange rate changes on cash
|
(4,687)
|
(490)
|
(4,197)
|
1,471
|
(9,948)
|
11,419
|
||
|
Net increase (decrease) cash & cash eq.
|
1,492,660
|
(55,735)
|
1,548,395
|
1,372,317
|
(481,200)
|
1,853,517
|
||
|
Cash & cash equivalents at begin yr.
|
651,964
|
291,275
|
360,688
|
772,306
|
716,740
|
55,566
|
||
|
Cash & cash equivalents at yr. end
|
2,144,623
|
235,540
|
1,909,084
|
2,144,623
|
235,540
|
1,909,084
|
||
|
2Q10
|
Page 14
|
|
Second Quarter 2010 Results
|
|
ASARCO LLC
CONSOLIDATED FINANCIAL STATEMENTS (US GAAP)
|
(Thousands of US Dollars)
|
Quarters
|
Accumulated
|
||||||
|
STATEMENT OF EARNINGS
|
Q2-10
|
Q2-09
|
Variance
|
2010
|
2009
|
Variance
|
||
|
Net Sales
|
395,153
|
271,206
|
123,947
|
812,756
|
490,524
|
322,232
|
||
|
Cost of Sales
|
238,137
|
218,516
|
19,621
|
525,964
|
383,276
|
142,688
|
||
|
Gross Profit
|
157,016
|
52,690
|
104,326
|
286,792
|
107,248
|
179,688
|
||
|
Gross Margin
|
40%
|
19%
|
35%
|
22%
|
||||
|
Administrative expenses
|
5,111
|
4,487
|
624
|
10,184
|
8,286
|
1,897
|
||
|
EBITDA
|
168,668
|
48,950
|
119,718
|
357,294
|
104,039
|
253,256
|
||
|
Depreciation and Amortization
|
42,229
|
10,490
|
31,739
|
82,515
|
22,003
|
60,512
|
||
|
Operating Income
|
109,676
|
37,713
|
71,963
|
194,094
|
76,959
|
117,135
|
||
|
Operating Margin
|
28%
|
14%
|
24%
|
16%
|
||||
|
Interest expense
|
636
|
36,688
|
(38,052)
|
4,264
|
77,496
|
(73,232)
|
||
|
Interest income
|
(1,093)
|
(1,346)
|
253
|
(1,381)
|
(2,761)
|
1,380
|
||
|
Financial Coverage
|
(1,863)
|
27,962
|
(29,825)
|
466
|
39,767
|
(39,301)
|
||
|
Other expense, net
|
632
|
(747)
|
1,379
|
175
|
(5,077)
|
5,252
|
||
|
Earnings before Tax
|
111,364
|
(26,844)
|
138,208
|
190,570
|
(32,466)
|
223,035
|
||
|
Taxes
|
41,583
|
–
|
41,583
|
71,120
|
–
|
71,120
|
||
|
Non controlling interest in consolidated subsidiaries.
|
6,734
|
3,435
|
3,299
|
12,265
|
4,871
|
7,394
|
||
|
Net Earnings
|
63,047
|
(30,279)
|
93,326
|
107,185
|
(37,337)
|
144,522
|
||
|
BALANCE SHEET
|
||||||||
|
Cash and cash equivalents
|
22,495
|
1,289,746
|
(1,267,250)
|
22,495
|
1,289,746
|
(1,267,250)
|
||
|
Restricted Cash
|
171,346
|
23,331
|
148,014
|
171,346
|
23,331
|
148,014
|
||
|
Notes and Accounts receivable
|
101,479
|
77,431
|
24,048
|
101,479
|
77,431
|
24,048
|
||
|
Inventories
|
318,068
|
270,923
|
47,145
|
318,068
|
270,923
|
47,145
|
||
|
Prepaid and others Current assets
|
329,886
|
54,944
|
274,943
|
329,886
|
54,944
|
274,943
|
||
|
Total Current Assets
|
943,275
|
1,716,375
|
(773,100)
|
943,275
|
1,716,375
|
(773,100)
|
||
|
Property, net
|
1,439,939
|
572,727
|
867,212
|
1,439,939
|
572,727
|
867,212
|
||
|
Leachable material, net
|
99,869
|
–
|
99,869
|
99,869
|
–
|
99,869
|
||
|
Other Long term Assets
|
1,556,898
|
58,566
|
1,498,332
|
1,556,899
|
58,566
|
1,498,332
|
||
|
Total Assets
|
4,039,981
|
2,347,668
|
1,692,313
|
4,039,981
|
2,347,668
|
1,692,313
|
||
|
Long-term Debt
|
–
|
–
|
–
|
–
|
–
|
–
|
||
|
Other non-current Liabilities
|
217,012
|
304,036
|
(87,024)
|
217,012
|
304,036
|
(87,024)
|
||
|
Environmental remediation obligations-current
|
8,130
|
1,661,877
|
(1,653,747)
|
8,130
|
1,661,877
|
(1,653,747)
|
||
|
Current Liabilities
|
225,142
|
1,965,913
|
(1,740,771)
|
225,142
|
1,965,913
|
(1,740,771)
|
||
|
Long Term Debt
|
–
|
447,751
|
(447,751)
|
–
|
447,751
|
(447,751)
|
||
|
Other Long Term Liabilities
|
1,257,516
|
643,652
|
613,864
|
1,257,516
|
643,652
|
613,864
|
||
|
Liabilities subject to compromise
|
–
|
1,696,195
|
(1,696,195)
|
–
|
1,696,195
|
(1,696,195)
|
||
|
Total Liabilities
|
1,482,658
|
4,753,511
|
(3,270,853)
|
1,482,658
|
4,753,511
|
(3,270,853)
|
||
|
Stockholders Equity
|
2,352,524
|
613,422
|
1,739,102
|
2,352,524
|
613,422
|
1,739,102
|
||
|
Other equity accounts
|
11,292
|
(383,816)
|
395,108
|
11,292
|
(383,816)
|
395,108
|
||
|
Retained Earnings
|
113,136
|
(2,651,571)
|
2,764,707
|
113,136
|
(2,651,571)
|
2,764,707
|
||
|
Total Stockholders equity
|
2,476,952
|
(2,421,965)
|
4,898,917
|
2,476,952
|
(2,421,965)
|
4,898,917
|
||
|
Non controlling interest
|
80,372
|
16,123
|
64,249
|
80,372
|
16,123
|
64,249
|
||
|
Total Liabilities and Stockholders' Equity
|
4,039,981
|
2,347,668
|
1,692,313
|
4,039,981
|
2,347,668
|
1,692,313
|
||
|
Cash Flow
|
||||||||
|
Net Income
|
63,047
|
(30,278)
|
93,325
|
107,184
|
(37,337)
|
144,521
|
||
|
Depreciation and Amortization
|
42,229
|
3,106
|
39,123
|
82,249
|
22,718
|
58,531
|
||
|
Deferred Income Taxes
|
–
|
–
|
–
|
–
|
–
|
–
|
||
|
Capitalized leachable material
|
(23,594)
|
–
|
(23,594)
|
(44,645)
|
–
|
(44,645)
|
||
|
Non controlling interest
|
6,734
|
3,435
|
3,299
|
12,265
|
4,871
|
7,394
|
||
|
Operating assets and liabilities
|
180,141
|
30,833
|
149,308
|
168,279
|
26,683
|
– 141,595
|
||
|
Others Net
|
4,575
|
–
|
4,575
|
4,575
|
–
|
4,575
|
||
|
Net cash provided by operating activities
|
273,132
|
7,096
|
266,036
|
329,907
|
16,935
|
312,971
|
||
|
Add property & equipment
|
(2,465)
|
(24,533)
|
22,068
|
(6,715)
|
(40,323)
|
33,609
|
||
|
Operating cash flow
|
270,667
|
(17,437)
|
288,104
|
323,192
|
(23,388)
|
346,580
|
||
|
Debt incurred
|
–
|
–
|
–
|
–
|
–
|
–
|
||
|
Debt amortization
|
(80,069)
|
(254)
|
(79,815)
|
(280,271)
|
(1,120)
|
(279,151)
|
||
|
Dividends paid
|
(6,000)
|
(2,500)
|
(3,500)
|
(10,250)
|
(2,500)
|
(7,750)
|
||
|
Investment from AMC
|
–
|
–
|
–
|
–
|
–
|
–
|
||
|
Purchase of share SCC
|
–
|
–
|
–
|
–
|
–
|
–
|
||
|
Current investments
|
(226)
|
61
|
(287)
|
(298)
|
(389)
|
91
|
||
|
Others Net
|
(196,042)
|
(1,354)
|
(194,688)
|
(125,781)
|
(3,978)
|
(121,803)
|
||
|
Net cash used in financing activities
|
(282,337)
|
(4,047)
|
(278,290)
|
(416,599)
|
(7,987)
|
(408,613)
|
||
|
Effect of exchange rate changes on cash
|
–
|
–
|
–
|
–
|
–
|
–
|
||
|
Net increase (decrease) cash & cash eq.
|
(11,670)
|
(21,484)
|
9,814
|
(93,407)
|
(31,374)
|
(62,033)
|
||
|
Cash & cash equivalents at begin yr.
|
34,167
|
1,311,232
|
(1,277,065)
|
115,905
|
1,321,121
|
(1,205,217)
|
||
|
Cash & cash equivalents at yr. end
|
22,497
|
1,289,748
|
(1,267,251)
|
22,497
|
1,289,748
|
(1,267,251)
|
||
|
2Q10
|
Page 15
|
|
Second Quarter 2010 Results
|
|
INFRAESTRUCTURA Y TRANSPORTES MEXICO SA DE CV Y SUBSIDIARIAS
CONSOLIDATED FINANCIAL STATEMENTS (US GAAP)
|
(Thousands of US Dollars)
|
Quarters
|
Accumulated
|
||||||
|
STATEMENT OF EARNINGS
|
Q2-10
|
Q2-09
|
Variance
|
2010
|
2009
|
Variance
|
||
|
Net Sales
|
308,675
|
231,957
|
76,718
|
573,490
|
430,543
|
142,947
|
||
|
Cost of Sales
|
195,160
|
155,181
|
39,979
|
366,805
|
290,046
|
76,759
|
||
|
Gross Profit
|
113,515
|
76,776
|
36,739
|
206,685
|
140,497
|
66,188
|
||
|
Gross Margin
|
37%
|
33%
|
36%
|
33%
|
||||
|
Administrative expenses
|
12,332
|
10,572
|
1,760
|
25,371
|
20,951
|
4,420
|
||
|
EBITDA
|
104,873
|
70,545
|
34,328
|
197,080
|
126,266
|
70,814
|
||
|
Depreciation and Amortization
|
21,447
|
19,020
|
2,457
|
41,846
|
36,091
|
5,755
|
||
|
Operating Income
|
79,706
|
47,184
|
32,522
|
139,468
|
83,455
|
56,013
|
||
|
Operating Margin
|
26%
|
20%
|
24%
|
19%
|
||||
|
Interest expense
|
7,398
|
5,285
|
2,113
|
13,619
|
12,107
|
1,512
|
||
|
Interest income
|
(3,049)
|
(1,880)
|
(1,169)
|
(5,561)
|
(4,139)
|
(1,422;
|
||
|
Other expense, net
|
(3,542)
|
(15,146)
|
11,604
|
(18,561)
|
(9,042)
|
(9,519;
|
||
|
Earnings before Tax
|
78,899
|
58,925
|
19,974
|
149,971
|
84,529
|
65,442
|
||
|
Taxes
|
24,708
|
15,907
|
8,801
|
47,162
|
22,792
|
24,370
|
||
|
Noncontrolling Interest
|
13,786
|
11,003
|
2,783
|
26,555
|
15,544
|
11,011
|
||
|
Profit before Extraordinary loss
|
40,405
|
32,015
|
8,390
|
76,254
|
46,193
|
30,061
|
||
|
Participation in Subsidiary not consolidated and Associated
|
(9,147)
|
(8,022)
|
(1,125)
|
(14,323)
|
(13,422)
|
(901)
|
||
|
Net Earnings
|
49,552
|
40,037
|
9,515
|
90,577
|
59,615
|
30,962
|
||
|
BALANCE SHEET
|
||||||||
|
Cash and cash equivalents
|
310,617
|
141,631
|
168,986
|
310,617
|
141,631
|
168,986
|
||
|
Notes and Accounts receivable
|
144,476
|
132,789
|
11,687
|
144,476
|
132,789
|
11,687
|
||
|
Inventories
|
25,922
|
25,516
|
406
|
25,922
|
25,516
|
406
|
||
|
Prepaid and others Current assets
|
49,362
|
60,006
|
(10,644)
|
49,362
|
60,006
|
(10,644)
|
||
|
Total Current Assets
|
530,377
|
359,942
|
170,435
|
530,377
|
359,942
|
170,435
|
||
|
Property, Plant and Equipment Net
|
1,093,272
|
1,047,808
|
45,464
|
1,093,272
|
1,047,808
|
45,464
|
||
|
Other Long term Assets
|
401,043
|
362,270
|
38,773
|
401,043
|
362,270
|
38,773
|
||
|
Total Assets
|
2,024,692
|
1,770,020
|
254,672
|
2,024,692
|
1,770,020
|
254,672
|
||
|
Liabilities and Investments
|
||||||||
|
Current portion of long-term debt
|
32,535
|
35,953
|
(3,418)
|
32,535
|
35,953
|
(3,418)
|
||
|
Accumulated Liabilities
|
178,119
|
126,845
|
51,274
|
178,119
|
126,845
|
51,274
|
||
|
Current Liabilities
|
210,654
|
162,798
|
47,856
|
210,654
|
162,798
|
47,856
|
||
|
Long Term Debt
|
327,719
|
349,259
|
(21,540)
|
327,719
|
349,259
|
(21,540)
|
||
|
Other non-current Liabilities
|
(32,522)
|
(16,081)
|
(16,441)
|
(32,522)
|
(16,081)
|
(16,441)
|
||
|
Other Liabilities
|
5,084
|
3,832
|
1,252
|
5,084
|
3,832
|
1,252
|
||
|
Total Liabilities
|
510,935
|
499,808
|
11,127
|
510,935
|
499,808
|
11,127
|
||
|
Stockholders Equity
|
379,240
|
379,240
|
-
|
379,240
|
379,240
|
-
|
||
|
Other equity accounts
|
(217,010)
|
(274,162)
|
57,152
|
(217,010)
|
(274,162)
|
57,152
|
||
|
Retained Earnings
|
1,104,037
|
951,968
|
152,069
|
1,104,037
|
951,968
|
152,069
|
||
|
Total Stockholders equity
|
1,266,267
|
1,057,046
|
209,221
|
1,266,267
|
1,057,046
|
209,221
|
||
|
Non controlling interest
|
247,490
|
213,166
|
34,324
|
247,490
|
213,166
|
34,324
|
||
|
Total Liabilities and Stockholders' Equity
|
2,024,692
|
1,770,020
|
254,672
|
2,024,692
|
1,770,020
|
254,672
|
||
|
Cash Flow
|
||||||||
|
Net Income
|
49,552
|
40,037
|
9,515
|
90,577
|
59,615
|
30,962
|
||
|
Depreciation and Amortization
|
21,477
|
19,020
|
2,457
|
41,846
|
36,091
|
5,755
|
||
|
Deferred Income Taxes
|
(1,299)
|
(1,236)
|
(63)
|
(13,841)
|
(8,941)
|
(4,900)
|
||
|
Participation in Subsidiary not consolidated and associated
|
(9,147)
|
(8,022)
|
(1,125)
|
(14,323)
|
(13,422)
|
(901)
|
||
|
Operating assets and liabilities
|
(6,034)
|
2,449
|
(8,483)
|
(13,838)
|
(8,800)
|
(5,038)
|
||
|
Other Net
|
15,135
|
1,688
|
13,447
|
25,704
|
15,150
|
10,554
|
||
|
Net cash provided by operating activities
|
69,684
|
53,936
|
15,748
|
116,125
|
79,693
|
36,432
|
||
|
Add property & equipment
|
(17,348)
|
(38,472)
|
21,124
|
(25,708)
|
(55,599)
|
29,891
|
||
|
Purchase shares
|
16,893
|
(328)
|
17,221
|
(4,171)
|
4,171
|
|||
|
Other
|
1,723
|
-
|
1,723
|
1,723
|
1,723
|
|||
|
Operating cash flow
|
70,952
|
15,136
|
55,816
|
92,140
|
19,923
|
72,217
|
||
|
Debt incurred
|
-
|
-
|
-
|
_
|
-
|
|||
|
Debt amortization
|
(8,969)
|
(8,781)
|
(188)
|
(16,273)
|
(19,611)
|
3,338
|
||
|
Dividends paid
|
-
|
-
|
-
|
(26,000)
|
(26,000)
|
|||
|
Other
|
-
|
-
|
-
|
-
|
-
|
-
|
||
|
Net cash used in financing activities
|
(8,969)
|
(8,781)
|
(188)
|
(42,273)
|
(19,611)
|
(22,662)
|
||
|
Effect of exchange rate changes on cash
|
(2,744)
|
11,422
|
(14,166)
|
8,129
|
2,578
|
5,551
|
||
|
Net increase (decrease) cash & cash eq.
|
59,239
|
17,777
|
41,462
|
57,996
|
2,890
|
55,106
|
||
|
Cash & cash equivalents at begin yr.
|
251,378
|
123,854
|
127,524
|
252,621
|
138,741
|
113,880
|
||
|
Cash & cash equivalents at yr. end
|
310,617
|
141,631
|
168,986
|
310,617
|
141,631
|
168,986
|
||
|
2Q10
|
Page 16
|