SOUTHERN COPPER CORP/ Goodwill & Intangibles Disclosure
NOTE 6—INTANGIBLE ASSETS:
As of December 31, | ||||||
(in millions) | | 2025 | | 2024 | ||
Mining concessions | $ | 121.2 | $ | 121.2 | ||
Mine engineering and development studies |
| 19.8 |
| 19.8 | ||
Software |
| 83.0 |
| 77.8 | ||
| 224.0 |
| 218.8 | |||
Accumulated amortization: |
| |||||
Mining concessions | (48.4) | (46.4) | ||||
Mine engineering and development studies | (19.8) | (19.8) | ||||
Software | (75.4) | (69.9) | ||||
(143.6) | (136.1) | |||||
Goodwill |
| 41.9 |
| 41.9 | ||
Intangible assets, net | $ | 122.4 | $ | 124.6 | ||
Amortization of intangibles for the years ended December 31, 2025, 2024 and 2023 totaled $7.5 million, $9.1 million and $7.9 million, respectively. Estimated amortization is as follows:
Estimated amortization expense (in millions): | | ||
2026 | $ | 5.4 | |
2027 | 3.4 | ||
2028 | 2.4 | ||
2029 | 2.3 | ||
2030 | 2.2 | ||
Total 2026 - 2030 | $ | 15.7 | |
Average annual | $ | 3.1 |
Goodwill includes $17.0 million generated in 1997 as a result of purchasing a third party interest in the Buenavista mine. It also includes $24.9 million representing the amount of the purchase price in excess of the fair value of the net assets acquired from El Pilar mine. This goodwill is attributable to future benefits that the Company expects to realize from the mine and will not be deductible for income tax purposes.
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.