<Page> SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 2001 Second Quarter FORM 10-Q --------- QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended June 30, 2001 Commission file number 1-14066 ------------- ------- SOUTHERN PERU COPPER CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 13-3849074 -------- ---------- (State or other jurisdiction of (I.R.S Employer Incorporation or organization) Identification No.) 1150 North 7th., Avenue, Tucson, Az. 85705-0747 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 520-798-7500 ------------ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes /X/ No / / As of July 31, 2000, there were outstanding 14,098,562 shares of Southern Peru Copper Corporation common stock, par value $0.01 per share. There were also outstanding 65,900,833 shares of Southern Peru Copper Corporation Class A common stock, par value $0.01 per share. <Page> Southern Peru Copper Corporation and Subsidiaries INDEX TO FORM 10-Q PAGE NO. PART I. FINANCIAL INFORMATION: Item 1. Financial Statements (unaudited) Condensed Consolidated Statement of Earnings Three Months and Six Months ended June 30, 2001 and 2000 2 Condensed Consolidated Balance Sheet June 30, 2001 and December 31, 2000 3 Condensed Consolidated Statement of Cash Flows Three Months and Six Months ended June 30, 2001 and 2000 4 Notes to Condensed Consolidated Financial Statements 5-7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8-12 Report of Independent Public Accountants 13 PART II. OTHER INFORMATION: Item 6 Exhibits on Form 10-Q 14 Signatures 15 Exhibit 15 - Independent Public Accountants Awareness Letter 16 -1- <Page> Southern Peru Copper Corporation and Subsidiaries CONDENSED CONSOLIDATED STATEMENT OF EARNINGS (Unaudited) <Table> <Caption> 3 Months Ended 6 Months Ended June 30, June 30, 2001 2000 2001 2000 --------- --------- --------- --------- (in thousands, except for per share amounts) <S> <C> <C> <C> <C> Net sales: Stockholders and affiliates $ 3,596 $ 17,094 $ 6,013 $ 33,432 Third parties 159,239 139,927 319,242 286,711 --------- --------- --------- --------- Total net sales 162,835 157,021 325,255 320,143 --------- --------- --------- --------- Operating costs and expenses: Cost of sales 115,274 100,852 218,288 210,655 Administrative and other expenses 8,672 6,935 15,786 14,138 Depreciation and depletion 18,760 18,587 39,585 37,225 Exploration expense 281 1,378 3,230 2,109 --------- --------- --------- --------- Total operating costs and expenses 142,987 127,752 276,889 264,127 --------- --------- --------- --------- Operating income 19,848 29,269 48,366 56,016 Interest income 6,498 645 9,252 1,073 Other income (expense) (740) 927 (1,113) 1,910 Interest expense 13,344 4,019 20,345 7,935 --------- --------- --------- --------- Earnings before taxes on income and minority interest of investment shares 12,262 26,822 36,160 51,064 Taxes on income 4,612 8,583 12,514 16,194 Minority interest of investment shares in income of Peruvian Branch 193 225 490 381 --------- --------- --------- --------- Net earnings $ 7,457 $ 18,014 $ 23,156 $ 34,489 ========= ========= ========= ========= Per common share amounts: Net earnings - basic and diluted $ 0.093 $ 0.225 $ 0.289 $ 0.432 Dividends declared $ 0.098 $ 0.050 $ 0.241 $ 0.110 Dividends paid $ 0.241 $ 0.050 $ 0.241 $ 0.110 Weighted average common shares outstanding: Basic 80,001 79,999 80,001 80,000 Diluted 80,006 80,017 80,006 80,026 </Table> The accompanying notes are an integral part of these financial statements. -2- <Page> Southern Peru Copper Corporation and Subsidiaries CONDENSED CONSOLIDATED BALANCE SHEET (unaudited) <Table> <Caption> June 30, December 31, 2001 2000 ---------- ------------ (in thousands) <S> <C> <C> ASSETS Current assets: Cash and cash equivalents $ 519,644 $ 149,088 Accounts receivable, net 71,827 142,457 Inventories 118,749 114,931 Other assets 36,030 35,371 ---------- ---------- Total current assets 746,250 441,847 Net property 1,324,475 1,298,130 Other assets 62,016 30,581 ---------- ---------- Total Assets $2,132,741 $1,770,558 ========== ========== LIABILITIES Current liabilities: Current portion of long-term debt $ 153,000 $ 24,339 Accounts payable 72,258 68,157 Accrued liabilities 37,928 39,884 ---------- ---------- Total current liabilities 263,186 132,380 ---------- ---------- Long-term debt 546,968 322,914 Deferred income taxes 97,575 94,891 Other liabilities 15,278 14,253 ---------- ---------- Total non-current liabilities 659,821 432,058 ---------- ---------- Minority interest of investment shares in the Peruvian Branch 14,202 14,465 ---------- ---------- STOCKHOLDERS' EQUITY Common stock (a) 261,584 261,584 Retained earnings 933,948 930,071 ---------- ---------- Total Stockholders' Equity 1,195,532 1,191,655 ---------- ---------- Total Liabilities, Minority Interest and Stockholders' Equity $2,132,741 $1,770,558 ========== ========== (a) Common shares: Authorized 34,099 34,099 Outstanding 14,100 14,100 Class A common shares Authorized and Outstanding 65,901 65,901 </Table> The accompanying notes are an integral part of these financial statements. -3- <Page> Southern Peru Copper Corporation and Subsidiaries CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited) <Table> <Caption> 3 Months Ended 6 Months Ended June 30, June 30, 2001 2000 2001 2000 --------- --------- --------- --------- (in thousands) (in thousands) <S> <C> <C> <C> <C> OPERATING ACTIVITIES Net earnings $ 7,457 $ 18,014 $ 23,156 $ 34,489 Adjustments to reconcile net earnings to net cash provided from operating activities: Depreciation and depletion 18,760 18,587 39,585 37,225 Provision for deferred income taxes 855 5,211 2,980 9,433 Foreign currency transaction losses (gains) 2,018 (145) 3,722 757 Minority interest of investment shares 193 225 490 381 Net changes in operating assets and liabilities: Accounts receivable (1,565) 6,116 70,404 3,295 Inventories 12,965 (5,211) (3,819) 5,023 Accounts payable and accrued liabilities (1,017) 1,623 2,211 (17,259) Other operating assets and liabilities 1,946 7,485 2,349 15,827 --------- --------- --------- --------- Net cash provided by operating activities 41,612 51,905 141,078 89,171 --------- --------- --------- --------- INVESTING ACTIVITIES Capital expenditures (40,222) (31,117) (67,745) (64,353) Sales of property 48 12 61 18 --------- --------- --------- --------- Net cash used in investing activities (40,174) (31,105) (67,684) (64,335) --------- --------- --------- --------- FINANCING ACTIVITIES Debt repayment (43,039) (8,185) (47,285) (8,185) Proceeds from borrowings -- 10,000 400,000 20,000 Escrow (deposits) withdrawals on long-term loans (32,063) 940 (32,063) 1,130 Dividends paid to common stockholders (19,279) (4,000) (19,279) (8,800) Distributions to minority interest (309) (71) (309) (157) Purchases of investment shares (361) (191) (756) (1,042) --------- --------- --------- --------- Net cash provided by (used in) financing activities (95,051) (1,507) 300,308 2,946 --------- --------- --------- --------- Effect of exchange rate changes on cash (1,244) 126 (3,146) (785) --------- --------- --------- --------- Increase (decrease)in cash and cash equivalents (94,857) 19,419 370,556 26,997 Cash and cash equivalents at beginning of period 614,501 18,174 149,088 10,596 --------- --------- --------- --------- Cash and cash equivalents at end of period $ 519,644 $ 37,593 $ 519,644 $ 37,593 ========= ========= ========= ========= </Table> The accompanying notes are an integral part of these financial statements. -4- <Page> Southern Peru Copper Corporation and Subsidiaries NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) A. In the opinion of Southern Peru Copper Corporation (the "Company" or "SPCC"), the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the Company's financial position as of June 30, 2001 and the results of operations and cash flows for the three and six months ended June 30, 2001 and 2000. Certain reclassifications have been made in the financial statements from amounts previously reported. The condensed financial statements as of June 30, 2001 and 2000 have been subjected to a review by Arthur Andersen, the Company's independent public accountants. The results of operations for the three and six-month periods are not necessarily indicative of the results to be expected for the full year. The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's 2000 annual report on Form 10-K. B. Inventories were as follows: (in millions) <Table> <Caption> June 30, December 31, 2001 2000 <S> <C> <C> Metals at lower of average cost or market: Finished goods $ 1.8 $ 1.9 Work-in-process 49.4 46.0 Supplies at average cost, net of reserves 67.5 67.0 ------ ------ Total inventories $118.7 $114.9 </Table> C. At June 30, 2001, the Company has recorded sales of 23.3 million pounds of copper, at a provisional price of $0.70 per pound. These sales are subject to final pricing based on the average monthly LME and COMEX copper prices in the month of settlement, which will occur in the third quarter of 2001. D. Financial Instruments: The Company uses derivative instruments to manage its exposure to market risk from changes in commodity prices. Derivative instruments, which are designated as hedges, must be deemed effective at reducing the risk associated with the exposure being hedged and must be designated as a hedge at the inception of the contract. Fuel swaps: The Company may enter into fuel swap agreements to limit the effect of changes in fuel prices on its production costs. A fuel swap establishes a fixed price for the quantity of fuel covered by the agreement. The difference between the published price for fuel and the price established in the contract for the month covered by the swap is recognized in production costs. At June 30, 2001, the Company held no fuel swaps. Foreign currency: The Company selectively uses foreign currency swaps to limit the effects of exchange rate changes on future cash flow obligations denominated in foreign currencies. A currency swap establishes a fixed dollar cost for a fixed amount or foreign currency required at a future date. The Company had entered into currency swap agreements on a portion of its capital cost contracted in Euros. At June 30, 2001, the Company held no foreign currency swaps. -5- <Page> E. Commitments and Contingencies: Litigation In April 1996, the Company was served with a complaint filed in Peru by approximately 800 former employees seeking the delivery of a substantial number of investment shares (formerly called "labor shares") of its Peruvian Branch, plus dividends. In October 1997, the Superior Court of Lima nullified a decision of a court of first instance, which had been adverse to the Company. The Superior Court remanded the case for a new trial. Plaintiffs filed an extraordinary appeal before the Peruvian Supreme Court. The Supreme Court may grant discretionary review in limited cases. In March 1999, the Company received official notification that the Supreme Court had denied plaintiffs' extraordinary appeal and affirmed the decision of the Superior Court of Lima, which remanded the case to the lower court for further proceedings. In December 1999, the lower court decided against the Company, ordering the delivery of the investment shares and dividends to the plaintiffs. The Company appealed this decision in January 2000. On October 10, 2000, the Superior Court of Lima affirmed the lower court's decision, which had been adverse to the Company. The Company has filed an extraordinary appeal before the Peruvian Supreme Court. The Supreme Court may grant discretionary review in limited cases. There is also pending against the Company a similar lawsuit filed by 127 additional former employees. In the third quarter of 1997, the court of first instance dismissed their complaint. Upon appeal filed by the plaintiffs, the Superior Court of Lima, in the third quarter of 1998, nullified the lower court's decision on technical grounds and remanded the case to the lower court for further proceedings. In December 1999, the lower court dismissed the complaint against the Company. Plaintiffs appealed this decision in January 2000 before the Superior Court. By the end of year 2000 the Superior Court rejected the appeal. Plaintiffs have filed an extraordinary appeal before the Supreme Court. The Supreme Court may grant discretionary review in limited cases. On December 28, 2000, a lawsuit was filed against the Company in federal court in New York City. The lawsuit seeks unspecified compensatory and punitive damages for alleged personal injuries to eight persons resident in Peru arising from alleged releases into the environment from the Company's operations in Peru. The lawsuit is similar to a suit filed in 1995 in Texas, which was dismissed in 1996 by a U. S. district judge. That ruling was affirmed unanimously by a three-judge federal appeals court. The court made it clear that the claims of Peruvian residents should be tried in the courts of Peru, not in the United States. It is the opinion of management that the outcome of the legal proceedings mentioned, as well as other miscellaneous litigation and proceedings now pending, will not materially adversely affect the financial position of the Company and its consolidated subsidiaries. However, it is possible that litigation matters could have a material effect on quarterly or annual operating results, when they are resolved in future periods. F. Impact of New Accounting Standards: Effective January 1, 2001, the Company has adopted the SFAS No. 133 "Accounting for Derivative Instruments and Hedging Activities" and SFAS No. 138 "Accounting for Certain Derivative Instruments and Certain Hedging Activities". Such adoption did not have a material impact on the condensed financial statements as of June 30, 2001. In June 2001, The Financial Accounting Standards Board (FASB) issued SFAS No. 142, "Goodwill and Other Intangible Assets". This statement addresses financial accounting and reporting for acquired goodwill and other intangible assets and supersedes APB Opinion No. 17, Intangible Assets. The provisions of -6- <Page> this statement are required to be applied starting with fiscal years beginning after December 15, 2001 and are required to be applied at the beginning of an entity's fiscal year to all goodwill and other intangible assets recognized in its financial statements at that date. Impairment losses for goodwill and indefinite-lived intangible assets that arise due to the initial application of this statement (resulting from a transitional impairment test) are to be reported as resulting from a change in accounting principle. Goodwill and intangible assets acquired after June 30, 2001, will be subject immediately to the nonamortization and amortization provisions of this statement. The Company will adopt this statement effective January 1, 2002 and its implementation will not materially affect its results of operations or financial condition. -7- <Page> Part I Item 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The Company reported net earnings of $7.5 million, or 9 cents per common share, for the second quarter ended June 30, 2001 compared with net earnings of $18.0 million, or 22 cents per common share, for the second quarter of 2000. For the first six months of 2001, net earnings were $23.2 million or 29 cents per common share, compared to $34.5 million or 43 cents per common share, for the same period of 2000. The decrease in earnings in the second quarter of 2001 is primarily a result of lower copper prices and decreased production. The average price for copper on the London Metal Exchange (LME) was 75 cents per pound for the second quarter of 2001 compared with 79 cents per pound in the second quarter of 2000. Average price for copper for the six months ended June 30, was 77 cents in 2001 and 80 cents in 2000. The average price for copper on the New York Commodity Exchange (COMEX) was 75 cents per pound for the second quarter of 2001 compared with 80 cents per pound in the second quarter of 2000. Average price for copper for the six months ended June 30, was 79 cents in 2001 and 81 cents in 2000. Mine copper production decreased 7.3% to 170.8 million pounds in the second quarter of 2001 compared with the second quarter of last year. This decrease of 13.4 million pounds included 15.8 million pounds from the Cuajone mine, an increase of 6.1 million pounds from Toquepala mine and a decrease of 3.7 million pounds in solvent extraction/electrowinning (SX/EW) production. The treated mineral production decreased 7% at the Cuajone mine during the second quarter of 2001, due to a 4-day stoppage caused by lack of energy and other damages to the facilities as a consequence of the June 23 earthquake in the south of Peru. Also, lower ore grades mined contributed to this decrease with respect to last year. Copper recovery was 3% higher than last year however; this did not compensate for the loss described above. Toquepala's increase in production was due to higher throughput at the Toquepala concentrator. The main reason for the 3.7 million pounds decrease in SX/EW production was a 4-day stoppage at the plant, because of a delay in transport of sulfuric acid caused by damage to the track lines of the Industrial Railroad occurred in the earthquake of June 23 and a decrease in the grade of PLS (Pregnant Leach Solution). The project to expand and protect the Cuajone mine from maximum flooding of the Torata river is under construction and reached 97% completion at the end of the second quarter of 2001, with an investment of $70.7 million out of the $75.5 million budget. The Torata River was diverted on June 30, 2000 to allow the beginning of the Cuajone pit expansion. Minor damages caused by the earthquake are being repaired and completion of the project is expected for the first quarter of 2002. On March 30, 2001, SPCC received a disbursement of $400 million under a line of credit contracted with a group of international financial institutions. This line of credit will be used by SPCC to finance its expansion and modernization plan that includes, among others, the expansion of the Toquepala mine and concentrator, an additional leaching section at the Cuajone mine, and the expansion and modernization of its Ilo smelter. INFLATION AND DEVALUATION OF THE PERUVIAN NUEVO SOL: A portion of the Company's operating costs is denominated in Peruvian nuevos soles. Since the revenues of the Company are primarily denominated in U.S. dollars, when inflation in Peru is not offset by a corresponding devaluation of the Peruvian nuevo sol, the financial position, results of operations and cash flows of the Company could be adversely affected. For the six months ended June 30, 2001 the inflation and devaluation rates were 0.49% and (0.37)%, respectively, and for the six month -8- <Page> periods ended June 30, 2000, the inflation and devaluation rate were 1.69% and (0.57)%, respectively. NET SALES: Net sales in the second quarter of 2001 increased $5.8 million to $162.8 million from the comparable period in 2000. Net sales for the first six months of 2001 totaled $325.3 million, compared with $320.1 million for the same period of 2000. The increase in net sales in both three months and six months periods of 2001 was principally a result of the increase in copper sales of 16.2 million pounds in the second quarter 2001. At June 30, 2001, the Company has recorded sales of 23.3 million pounds of copper, at a provisional price of $0.70 per pound. These sales are subject to final pricing based on the average monthly LME and COMEX copper prices in the month of settlement, which will occur in the third quarter of 2001. PRICES: Sales prices for the Company's metals are established principally by reference to prices quoted on the LME, the COMEX or Published in Platt's Metals Week for dealer oxide mean prices for molybdenum products. <Table> <Caption> Three Months Ended Six Months Ended June 30, June 30, Price/Volume Data: 2001 2000 2001 2000 <S> <C> <C> <C> <C> Average Metal Prices Copper (per pound-LME) $ 0.75 $ 0.79 $ 0.77 $ 0.80 Copper (per pound-Comex) $ 0.75 $ 0.80 $ 0.79 $ 0.81 Molybdenum (per pound) $ 2.46 $ 2.68 $ 2.35 $ 2.61 Silver (per ounce-COMEX) $ 4.38 $ 5.03 $ 4.45 $ 5.11 Sales Volume (in thousands): Copper (pounds) 193,996 177,800 371,925 361,300 Molybdenum (pounds) (1) 3,737 3,808 8,197 7,154 Silver (ounces) 890 881 1,810 1,756 </Table> - ---------- (1) The Company's molybdenum production is sold in concentrate form. Volume represents pounds of molybdenum contained in concentrates. FINANCIAL INSTRUMENTS: The Company may use derivative instruments to manage its exposure to market risk from changes in commodity prices. Derivative instruments which are designated as hedges must be deemed effective at reducing the risk associated with the exposure being hedged and must be designated as a hedge at the inception of the contract. FUEL SWAPS: The Company may enter into fuel swap agreements to limit the effect of changes in fuel prices on its production costs. A fuel swap establishes a fixed price for the quantity of fuel covered by the agreement. The difference between the published price for fuel and the price established in the contract for the month covered by the swap is recognized in production costs. At June 30, 2001 the Company held no fuel swaps agreements. FOREIGN CURRENCY: The Company selectively uses foreign currency swaps to limit the effects of exchange rate changes on future cash flow obligations denominated in foreign currencies. A currency swap establishes a fixed dollar cost for a fixed amount of foreign currency required at a future date. The Company had entered into currency swap agreements on a portion of its capital cost contracted in Euros. At June 30, 2001 the Company held no foreign currency swap. OPERATING COSTS AND EXPENSES: Operating costs and expenses were $143.0 million in the second quarter of 2001 compared with $127.8 million in the second quarter of -9- <Page> 2000. In the six months ended June 30, operating costs and expenses were $276.9 million in 2001, compared with $264.1 million in the comparable 2000 period. Cost of sales for the three months ended June 30, 2001 was $115.3 million compared with $100.9 million in the comparable 2000 period. In the six months ended June 30, 2001, cost of sales was $218.3 million, compared with $210.7 million in the comparable 2000 period. The increase in the second quarter was the result of higher copper sales volumes, as well as increased fuel oil and operating materials costs for both periods presented. Administrative and other expenses were $8.7 million in the three months ended June 30, 2001 and $6.9 million in the comparable 2000 period. In the six months ended June 30, 2001, administrative and other expenses were $15.8 million compared with $14.1 million in the six months ended June 30, 2000. The increase in the second quarter 2001 compared with the same period of 2000 is mainly due to consulting services booked on a monthly basis this year instead of in a lump sum as they were charged in October last year. Depreciation and depletion expense for the three months ended June 30, 2001 was $18.8 million compared with $18.6 million in the comparable 2000 period. In the six months ended June 30, 2001 depreciation and depletion expense was $39.6 million, compared with $37.2 million in the comparable 2000 period. The increase in 2001 is principally due to the depreciation of the new equipment and other assets acquired to expand and protect the Cuajone mine from maximum flooding of the Torata River. NON-OPERATING ITEMS: Interest income was $6.5 million in the second quarter of 2001, compared to $0.6 million in the comparable 2000 period. In the six months ended June 30, 2001 interest income was $9.3 million compared to $1.1 million for the same period of 2000. The increase reflects higher amounts of excess cash invested in year 2001. Interest expense was $13.3 million in the second quarter of 2001, compared to $4.0 million in the comparable 2000 period. In the six months ended June 30, 2001 interest expense was $20.3 million compared to $7.9 million for the same period of 2000. The increase reflects the interest cost of the $400 million drawdown of March 31, 2001. TAXES ON INCOME: Taxes on income for the six months ended June 30, 2001 were $12.5 million, compared with $16.2 million for the same period of 2000. The decrease was principally due to lower earnings in 2001, resulting from lower copper prices and lower production. CASH FLOWS: SECOND QUARTER: Net cash provided by operating activities was $41.6 million in the second quarter of 2001, compared with $51.9 million in the comparable 2000 period. The decrease was principally attributable to decreased operating income. Net cash used in investing activities was $40.2 million of capital expenditures in the second quarter of 2001. In the second quarter of 2000, net cash used in investing activities was $31.1 million and was principally due to capital expenditures. Net cash used for financing activities in the second quarter of 2001 was $95.1 million, compared with $1.5 million for the second quarter of 2000. The second quarter of 2001 includes a dividend distribution of $19.3 million, debt repayments of $ 43.0 million and escrow deposits of $ 32.0 million. -10- <Page> SIX MONTHS: Net cash provided by operating activities was $141.1 million for the six month period ended June 30, 2001, compared with $89.2 million in the comparable 2000 period. The increase was attributable primarily to reimbursements of pending I.G.V. drawbacks made by the government of $ 45.5 millions. Net cash used in investing activities was $67.7 million in the six-month period ended June 30, 2001, and was primarily due to capital expenditures. In the six month period ended June 30, 2000, net cash used in investing activities was $64.3 million and was primarily due to capital expenditures. Cash provided by financing activities for the six months ended June 30, 2001 was $300.3 million, compared with $2.9 million in the comparable 2000 period. The six months ended June 30, 2001 includes a disbursement of $ 400.0 million under a credit line contracted with a group of international financial institutions. LIQUIDITY AND CAPITAL RESOURCES: The Company expects that it will meet its cash requirements for 2001 and beyond from internally generated funds, cash on hand, from borrowings under existing credit facilities and from additional external financing. In the first quarter of 2001 the Company received a disbursement of $400.0 million under a line of credit contracted with a group of international financial institutions. This line of credit will be used by SPCC to finance its expansion and modernization plan that includes, among others, the expansion of the Toquepala mine and concentrator, an additional leaching section at the Cuajone mine, and the expansion and modernization of its smelter in Ilo. In the second quarter of 2001, the Company paid a dividend to shareholders of $19.3 million or 24 cents per share, compared with $4.0 million or 5 cents per share in the same period of 2000. On July 25, 2001, the Company declared a quarterly dividend of 4.7 cents per share payable August 29, 2001, to stockholders of record at the close of business on August 9, 2001. Certain financing agreements contain covenants, which limit the payment of dividends to stockholders. Under the most restrictive covenant, the Company may pay dividends to stockholders equal to 50% of the net income of the Company for any fiscal quarter as long as such dividends are paid by June 30 of the following year. IMPACT OF NEW ACCOUNTING STANDARDS: Effective January 1, 2001, the Company has adopted the SFAS No. 133 "Accounting for Derivate Instruments and Hedging Activities" and SFAS No. 138 "Accounting for Certain Derivate Instruments and Certain Hedging Activities". Such adoption did not have a material impact on the condensed financial statements as of June 30, 2001. In June 2001, The Financial Accounting Standards Board (FASB) issued SFAS No. 142, "Goodwill and Other Intangible Assets". This statement addresses financial accounting and reporting for acquired goodwill and other intangible assets and supersedes APB Opinion No. 17, Intangible Assets. The provisions of this statement are required to be applied starting with fiscal years beginning after December 15, 2001 and are required to be applied at the beginning of an entity's fiscal year to all goodwill and other intangible assets recognized in its financial statements at that date. Impairment losses for goodwill and indefinite-lived intangible assets that arise due to the initial application of this statement (resulting from a transitional impairment test) are to be reported as resulting from a change in accounting principle. Goodwill and intangible assets acquired after June 30, 2001, will be subject immediately to the nonamortization and amortization provisions of this statement. The Company will adopt this statement effective January 1, 2002 and its implementation will not materially affect its results of operations or financial condition. -11- <Page> CAUTIONARY STATEMENT: Forward-looking statements in this report and in other Company statements include statements regarding expected commencement dates of mining or metal production operations, projected quantities of future metal production, anticipated production rates, operating efficiencies, costs and expenditures as well as projected demand or supply for the Company's products. Actual results could differ materially depending upon factors including the availability of materials, equipment, required permits or approvals and financing, the occurrence of unusual weather or operating conditions, lower than expected ore grades, the failure of equipment or processes to operate in accordance with specifications, labor relations, environmental risks as well as political and economic risk associated with foreign operations. Results of operations are directly affected by metal prices on commodity exchanges, which can be volatile. -12- <Page> Arthur Andersen REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Stockholders and Board of Directors of Southern Peru Copper Corporation: We have reviewed the accompanying condensed consolidated balance sheet of Southern Peru Copper Corporation and subsidiaries (a Delaware Corporation) as of June 30, 2001 and the related condensed consolidated statements of income and cash flows for the three-month and six-month periods ended June 30, 2001 and 2000. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the condensed financial statements referred to above for them to be in conformity with accounting principles generally accepted in the United States of America. ARTHUR ANDERSEN LLP Phoenix, Arizona July 16, 2001 -13- <Page> Part II - OTHER INFORMATION Item 6 - Exhibits on form 10-Q 15 - Independent Public Accountants Awareness Letter. -14- <Page> SIGNATURES Pursuant to the requirement of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. SOUTHERN PERU COPPER CORPORATION (Registrant) Date: August 10, 2001 /s/ Oscar Gonzalez Rocha ------------------------ President Date: August 10, 2001 /s/ Daniel Tellechea Salido --------------------------- Vice President of Finance -15-