Southern Copper Corp/: Form 10-Q for the period ended Sep 30, 2026

The following discussion provides information that management believes is relevant to an assessment and understanding of the condensed consolidated financial condition and results of operations of Southern Copper Corporation and its subsidiaries (collectively, “SCC”, “the Company”, “our”, and “we”). This item should be read in conjunction with our interim unaudited Condensed Consolidated Financial Statements and the notes thereto included in this quarterly report. Additionally, the following discussion and analysis should be read in conjunction with the Management Discussion and Analysis of Financial Condition and Results of Operations and the Consolidated Financial Statements included in Part II of our annual report on Form 10-K for the year ended December 31, 2025.

EXECUTIVE OVERVIEW

Business: Our business is primarily the production and sale of copper. In the process of producing copper, a number of valuable metallurgical by-products are recovered, which we also produce and sell. Market forces outside of our control largely determine the sale prices for our products. Our management, therefore, focuses on value creation through copper production, cost control, production enhancement and maintaining a prudent capital structure to remain profitable. We endeavor to achieve these goals through capital spending programs, exploration efforts and cost reduction programs. Our aim is to remain profitable during periods of low copper prices and to maximize financial performance in periods of high copper prices.

We are one of the world’s largest copper mining companies in terms of production and sales and our principal operations are in Peru and Mexico. We also have exploration programs in Chile and Argentina. In addition to copper, we produce significant amounts of other metals, either as a by-product of the copper process or through a number of dedicated mining facilities in Mexico.

Outlook: Various key factors will affect our outcome. These include, but are not limited to, the following:

• Sales structure: In the third quarter of 2026, 73.6% of our revenue came from the sale of copper; 12.1% from molybdenum; 7.3% from silver; 3.6% from zinc; and 3.4% from other products, including gold, sulfuric acid, and other materials.
• Copper: In the third quarter of 2026, copper prices per pound were exceptional. The LME price increased from $4.44 to $6.41 (+44.4%) and the COMEX price rose from $4.83 to $6.48 (+34.2%) compared to the same period in 2025. Based on current supply and demand dynamics, we estimate a slight copper market surplus for 2026. Copper inventories worldwide stood at 1,105,000 tonnes as of October 9, 2026. We estimate that this inventory can currently cover approximately 14 days of global demand.
• Molybdenum: Accounted for 12.1% of our sales in the third quarter of 2026. Prices for molybdenum averaged $32.93 per pound in the third quarter of 2026, compared to $24.30 in the same period of 2025, representing a 35.5% increase.

Molybdenum is mainly used in the production of special alloys for stainless steel that require significant hardness, corrosion and heat resistance. New uses for this metal are associated with lubricants, sulfur filtering of heavy oils and shale gas production.

• Silver: Represented 7.3% of our sales in the third quarter of 2026. Prices averaged $62.80 per ounce in the third quarter of 2026, compared to $39.56 in the same period of 2025 (+58.7%). We believe that industrial demand will strongly support silver prices.
• Zinc: Average zinc prices increased 35.9% in the third quarter of 2026 versus the same period of 2025. Zinc represented 3.6% of our sales in the third quarter of 2026.
• Production: In 2026, we expect our copper production to reach 918,000 tonnes, which is 0.7% above our planned target of 911,400 tonnes.

Regarding by-products, we expect to produce 163,400 tonnes of zinc in 2026, which is 1.0% below our initial plan. We also expect to produce 29,000 tonnes of molybdenum in 2026, which represents an increase of 11.7% compared to our initial plan. For silver, we expect to comply with our plan to produce 24 million ounces of this metal.

• Capital Investments: In the nine months of 2026, we spent $1,380.5 million on capital investments; this represented 27.3% of net income and an increase of 52.9% compared to the amount registered in the same period of 2025.

KEY MATTERS

Below, we discuss several matters that we believe are important to understand the results of our operations and financial condition. These matters include, (i) our earnings, (ii) our production, (iii) our “operating cash costs” as a measure of our performance, (iv) metal prices, (v) business segments, (vi) the effect of inflation and other local currency issues, and (vii) our capital investment and exploration program.

Earnings: The table below highlights key financial and operational data of our Company for the three-month and nine-month periods ended September 30, 2026 and 2025 (in millions, except copper price, percentages and per share amounts):

Net sales in the third quarter of 2026 totaled $4,696.6 million, which represented a 39.1% increase compared to the figure recorded in the same period in 2025. This increase was primarily driven by an increase in the sales volumes of zinc (+0.8%) and higher prices for copper (LME, +44.4%; COMEX, +34.2%), molybdenum (+35.5%), silver (+58.7%), and zinc (+35.9%); growth in net sales occurred despite a drop in the sales volumes for copper (-0.4%), molybdenum (-0.2%), and silver (-12.2%).

Net income attributable to SCC for the third quarter of 2026 reached $1,801.8 million, which represented a 62.7% increase compared to the figure recorded in the same period in 2025. This increase was primarily driven by an increase in net sales (+39.1%), which reflected higher metal prices across all our products, while operating costs increased at a considerably lower rate (+17.0%); in this scenario, operating income was up 59.2%.

Net sales in the nine-month period of 2026 rose 38.6% compared to the same period in 2025. This increase was primarily driven by an increase in the sales volumes of zinc (+2.0%) and higher prices for copper (LME, +40.6%; COMEX, +30.6%), molybdenum (+34.3%), silver (+108.2%), and zinc (+26.2%); growth in net sales occurred despite a reduction in the sales volumes for copper (-2.3%), molybdenum (-5.3%), and silver (-3.6%).

Net income attributable to SCC for the nine-month period of 2026 increased by 66.8% compared to the same period of 2025. This increase was primarily driven by higher net sales (+38.6%), which reflected higher metal prices across all our products, while operating costs increased at a considerably lower rate (+14.2%), resulting in a 61.9% increase in operating income.

Production: The table below highlights our mine production data for the three-month and nine-month periods ended September 30, 2026 and 2025:

The table below highlights our copper mine production data for the three-month and nine-month periods ended September 30, 2026 and 2025:

Third quarter: Copper mine production in the third quarter of 2026 stood at 512.3 million pounds, reflecting a 1.1% decrease compared to the same period in 2025. This decline was mainly attributable to lower production at Toquepala (-6.8%, due to a drop in ore grades, mineral milled and SX-EW production), Cuajone (-5.0%; due to lower ore grades), and La Caridad (-7.1%; due to lower ore grades). These declines were partially offset by higher production at Buenavista (+5.2%; fueled by an increase in SX-EW production) and IMMSA (+14.8%; due to higher ore grades).

Molybdenum production decreased 2.2% in the third quarter of 2026 compared to the same period in 2025. This decline was driven by lower production at Buenavista (-8.3%) and La Caridad (-12.5%), which was pressured downward mainly by lower ore grades. These declines were partially offset by higher production at Toquepala (+8.9%) and Cuajone (+6.1%).

Silver mine production decreased 1.9% in the third quarter of 2026 compared to the figure registered in the same period in 2025. This decline was driven by lower production at Toquepala (-1.5%), Cuajone (-0.6%), La Caridad (-5.0%), and Buenavista (-7.1%). These declines were partially offset by higher production at the IMMSA (+4.6%) operations.

Zinc production decreased 7.9% in the third quarter of 2026 compared to the figure registered in the same period in 2025. This decline was driven by lower production at our Buenavista zinc concentrator (-8.1%) and the IMMSA operations (-7.5%).

Nine months: Mined copper production in the nine-month period of 2026 was 1,529.1 million pounds, which represented a 2.9% decrease compared to the figure for the same period in 2025. This decline was primarily attributable to lower production at Toquepala (-10.0%; due to a drop in ore grades, mineral milled, and SX-EW production), Cuajone (-8.3%; due to lower ore grades and mineral milled), and La Caridad (-0.5%; due to lower ore grades). These declines were partially offset by higher production at our Buenavista (+2.4%; due to an increase in both ore grades and SX-EW production) and IMMSA operations (+6.6%; due to higher ore grades).

Molybdenum production decreased 5.2% in the nine-month period of 2026 compared to the figure reported for the same period in 2025. This decline was primarily attributable to lower production at our Toquepala (-2.7%), Buenavista (-13.4%), and La Caridad (-5.7%) mines, driven by a drop in ore grades. These declines were partially offset by higher production at Cuajone (+2.0%).

Silver mine production increased 1.5% in the nine-month period of 2026 compared to the print for the same period in 2025. This evolution was driven by higher production at our Buenavista (+0.9%), La Caridad (+5.7%), and IMMSA (+5.9%) operations, and partially offset by lower production at our Toquepala (-5.4%) and Cuajone (-5.3%) mines.

Zinc production decreased 7.2% in the nine-month period of 2026 compared to the figure for the same period in 2025. This decline was primarily attributable to lower production at both our Buenavista zinc concentrator (-10.1%) and IMMSA operations (-1.7%).

Operating Cash Costs: An overall benchmark that we use, which is a common industry metric to measure performance is operating cash costs per pound of copper produced. Operating cash cost is a non-GAAP measure that does not have a standardized meaning and may not be comparable to similarly titled measures provided by other companies. This non-GAAP information should not be considered in isolation or as substitute for measures of performance determined in accordance with GAAP. A reconciliation of our operating cash cost per pound of copper produced to the cost of sales (exclusive of depreciation, amortization and depletion) as presented in the consolidated statement of earnings is presented under the subheading, “Non-GAAP Information Reconciliation” on page 62. We disclose operating cash cost per pound of copper produced, both before and net of by-product revenues.

We define operating cash cost per pound of copper produced before by-product revenues as cost of sales (exclusive of depreciation, amortization and depletion), plus selling, general and administrative charges, treatment and refining charges net of sales premiums; less the cost of purchased concentrates, workers’ participation and other miscellaneous charges, including royalty charges, and the change in inventory levels; divided by total pounds of copper produced by our own mines.

In our calculation of operating cash cost per pound of copper produced, we exclude depreciation, amortization and depletion, which are considered non-cash expenses. Exploration is considered a discretionary expenditure and is also excluded. Workers’ participation provisions are determined on the basis of pre-tax earnings and are also excluded. Additional exclusions from operating cash costs are items of a non-recurring nature and the mining royalty charge as it is based on various calculations of taxable income, depending on which jurisdiction, Peru or Mexico, is imposing the charge. We believe these adjustments allow our management and stakeholders to more fully visualize our controllable cash cost, which we believe is one of the lowest of all copper-producing companies of similar size.

We define operating cash cost per pound of copper produced net of by-product revenues as operating cash cost per pound of copper produced, as defined in the previous paragraph, less by-product revenues and net revenue (loss) on sale of metal purchased from third parties.

In our calculation of operating cash cost per pound of copper produced, net of by-product revenues, we credit against our costs the revenues from the sale of all our by-products, including, molybdenum, zinc, silver, gold, etc. and the net revenue (loss) on sale of metals purchased from third parties. We disclose this measure including the by-product revenues in this way because we consider our principal business to be the production and sale of copper. As part of our copper production process, much of our by-products are recovered. These by-products, as well as the processing of copper purchased from third parties, are a supplemental part of our production process and their sales value contribute to covering part of our incurred fixed costs. We believe that our Company is viewed by the investment community as a copper company, and is valued, in large part, by the investment community’s view of the copper market and our ability to produce copper at a reasonable cost.

We believe that both of these measures are useful tools for our management and our stakeholders. Our cash costs before by-product revenues allow us to monitor our cost structure and address areas of concern within operating management. The measure operating cash cost per pound of copper produced net of by-product revenues is a common measure used in the copper industry and is a useful management tool that allows us to track our performance and better allocate our resources. This measure is also used in our investment project evaluation process to determine a project’s potential contribution to our operations, its competitiveness and its relative strength in different price scenarios. The expected contribution of by-products is generally a significant factor used by the copper industry to determine whether to move forward or not in the development of a new mining project. As the price of our by-product commodities can have significant fluctuations from period to period, the value of its contribution to our costs can be volatile.

Our operating cash cost per pound of copper produced, before and net of by-product revenues, is presented in the table below for the three-month and nine-month periods ended September 30, 2026 and 2025:

Operating cash cost per pound of copper produced (1)

(In millions, except cost per pound and percentages)

(1) These are non-GAAP measures. Please see page 62 for reconciliation to GAAP measure.

(2) Net of metallurgical losses.

In the third quarter of 2026, the operating cash cost per pound before by-product revenues increased from $2.23 in 3Q25 to $2.46 (+10.2%). This increase was primarily attributable to an increase in production costs (+12.3%), which were pushed upward by higher fuel and energy costs; the upward trajectory of these costs was partially offset by a drop in treatment and refining charges due to market conditions. By-product revenues per pound increased by 30.6%, from $1.81 to $2.36. As a result, the operating cash cost per pound net of by-product revenues decreased significantly, from $0.42 per pound to $0.09 per pound, primarily reflecting higher by-product revenues from silver, molybdenum and zinc.

For the nine-month period of 2026, the operating cash cost per pound before by-product revenues increased from $2.13 in the nine-month period of 2025 to $2.35 (+10.3%). This increase was primarily attributable to the unit cost effect of a decrease in copper production (-2.3%) and an increase in production costs (+8.9%). These costs reflected an increase in fuel, labor, and operating material costs, which were partially offset by decreases in repair material costs and treatment and refining charges, the latter of which reflected market conditions. By-product revenues per pound increased by 53.6%, from $1.52 to $2.34. As a result, the operating cash cost per pound net of by-product revenues decreased significantly, from $0.61 per pound to $0.01 per pound, primarily reflecting higher by-product revenues from silver, molybdenum and zinc.

Metal Prices: The profitability of our operations is dependent on, and our financial performance is significantly affected by, the international market prices for the products we produce, and for copper, molybdenum, zinc and silver in particular.

We are subject to market risks arising from the volatility of copper and other metal prices. For the remaining three months of 2026, assuming that expected metal production and sales are achieved; tax rates remain unchanged and giving no effects relative to potential cost changes, metal price sensitivity factors would indicate the following change in estimated net income attributable to SCC resulting from metal price changes:

Business Segments: We view our Company as having three reportable segments and manage it on the basis of these segments. These segments are (1) our Peruvian operations, (2) our Mexican open-pit operations and (3) our Mexican underground operations, known as our IMMSA unit. Our Peruvian operations include the Toquepala and Cuajone mine complexes and the smelting and refining plants, industrial railroad and port facilities that service both mines. The Peruvian operations produce copper, with significant by-product production of molybdenum, silver and other material. Our Mexican open-pit operations include the La Caridad-Pilares and Buenavista mine complexes, the smelting and refining plants and support facilities, which service these mines. The Mexican open-pit operations produce copper, with significant by-product production of molybdenum, silver and other material. Our IMMSA unit includes three operating underground mines and several industrial processing facilities.

Segment information is included in our review of “Results of Operations” in this item and also in Note 14 “Segment and Related Information” of our condensed consolidated financial statements.

Inflation and Exchange Rate Effect of the Peruvian Sol and the Mexican Peso: Our functional currency is the U.S. dollar and our revenues are primarily denominated in U.S. dollars. Significant portions of our operating costs are denominated in Peruvian sol and Mexican pesos. Accordingly, when inflation and currency devaluation/appreciation of the Peruvian currency and Mexican currency occur, our operating results can be affected. In recent years, exchange rate volatility has been high but has had a limited effect on our results. Please see Item 3 “Quantitative and Qualitative Disclosures about Market Risk” for more detailed information.

Capital Investment Programs: We made capital investments of $1,380.5 million in the nine-month period of 2026, compared to $902.7 million in the same period of 2025. In general, the capital investments and investment projects described below are intended to increase production, decrease costs or address social and environmental commitments.

Set forth below are descriptions of some of our current expected capital investment programs. We expect to meet the cash requirements for these projects by utilizing cash on hand; internally generated funds and additional external financing, including funding received in June 2026. All capital spending plans will continue to be reviewed and adjusted to respond to changes in the economy and market conditions.

Projects in Peru:

Our investments in Peruvian projects that are being built or for which basic or detail engineering or environmental studies are being conducted could surpass $10.3 billion in the next decade.

The openness of the Peruvian government and institutions to private investment; strong support from local communities; and respect for the rule of law underpin our aggressive investment program. With the backing and assistance of Peruvian authorities, the Company is moving forward to secure the administrative permits and licenses required before initiating investment. The projects’ construction and subsequent operating phases will generate new poles of development; create significant job opportunities; and drive growth in tax revenues at both, national and regional levels.

Tia Maria - Arequipa: This greenfield project, located in Arequipa, Peru, will use state of the art SX-EW technology that meets the highest international environmental standards and will produce 120,000 tonnes of SX- EW copper cathodes per year in the early years. Operations are expected to begin in the first half of 2028.

Project update: As of September 30, 2026, the Company has invested $884.3 million in project execution and committed $1,101 million to cover diverse activities, acquisitions and related contracts. Large-scale earthworks have concluded, and 18.9 million metric tonnes of material have been transferred to the La Tapada stripping deposit. Most work orders for the project’s primary equipment have been issued. Purchase orders for the leaching process have been placed to secure the main equipment— which will be outfitted with cutting-edge technology—as well as secondary equipment and materials.

On the energy supply front, work is advancing at the main electrical sub-stations, and the 220 kV transmission line is in its final stage of construction. In parallel, large-scale earthworks to develop dry and wet areas have been completed. At the project’s main installations, civil work is advancing alongside efforts to assemble metal structures and the main components of the crushing equipment for the primary, secondary, and tertiary crushing circuits (dry area). In the wet area, work to build the solvent extraction (SX) and electrodeposition (EW) facilities, among others, is progressing.

As of September 30, 2026, the Tia Maria project was 49.6% complete. Additionally, 6,817 new jobs had been created, 1,181 of which were filled by local applicants. To the extent possible, the Company intends to cover the estimated 7,000 jobs that will be created during Tia Maria’s construction phase with workers from the Islay province.

Projects in Mexico:

SCC has several projects in its Mexican pipeline that may boost organic growth if they are found to be of value for both stakeholders and the communities in which we operate. We are engaged in talks with the current administration to continue rolling out SCC’s Mexican investments for $10.2 billion.

El Pilar - Sonora: This project is located in Sonora, Mexico, approximately 45 kilometers from Cananea and Buenavista mine. Its copper oxide mineralization contains estimated proven and probable reserves of 317 million tonnes of ore with an average copper grade of 0.249% and a life of mine of 18 years. It will operate as an open-pit mine with an annual production capacity of 36,000 tonnes of copper cathode, utilizing cost-efficient and environmentally friendly SX-EW (Solvent Extraction and Electrowinning) technology. With an investment of $551 million, this project will employ a direct workforce of 450 people during the construction phase and 300 during the operational phase.

Project update: This new copper project has obtained the necessary environmental permits. Early site preparation began in September 2026 to develop energy lines and build onsite construction offices. Contracts and studies related to the substation and transmission line are in the works. Basic engineering contracts for the access road, railway spur, substations and power lines have been signed. The EPCM bidding process for SX-EW plant is underway and expected to culminate before year-end. Project construction will commence in the first quarter of 2027, and production is expected to begin in the second half of 2029.

Potential projects:

We have a number of other projects that we may develop in the future. We continuously evaluate new projects on the basis of our long-term corporate objectives, expected return on investment, environmental concerns, required investment and estimated production, among other considerations. All capital spending plans will continue to be reviewed and adjusted to respond to changes in the economy and market conditions.

Los Chancas - Apurimac: This greenfield project, located in Apurimac, Peru, is a copper and molybdenum porphyry deposit. Current estimates of indicated copper mineral resources are 98 million tonnes of oxides with a copper content of 0.45% and 52 million tonnes of sulfides with a copper content of 0.59%. The Los Chancas project envisions an open-pit mine with a combined operation of concentrator and SX-EW processes that are expected to produce 130,000 tonnes of copper and 7,500 tonnes of molybdenum annually. The estimated capital investment is $2,600 million and the project is expected to begin operating in 2031.

Project update: Social and environmental management programs are currently being implemented in the communities within the project’s direct area of influence, in accordance with the Framework Agreement signed for the Development of the Tiaparo Peasant Community and the Los Chancas Mining Project. In addition, measures are being taken to regain control of the project area, which has been threatened by illegal miners. Regaining control is essential if we are to continue developing our Los Chancas project.

Michiquillay Project - Cajamarca: In June 2018, Southern Copper signed a contract for the acquisition of the Michiquillay project in Cajamarca, Peru. Michiquillay is a world-class mining project with inferred mineral resources of 2,288 million tonnes and an estimated copper grade of 0.43%. When developed, we expect Michiquillay to produce 225,000 tonnes of copper per year (along with by-products of molybdenum, gold and silver) for an initial mine life of more than 25 years. We estimate an investment of approximately $2.5 billion will be required and expect production start-up by 2032.

Project update: The deposit’s Mineral Resource Estimation and Classification report has been developed with geological information obtained from drilling programs and geological models and complies with SEC’s S-K 1300 mining disclosure standards. A conceptual study is underway to determine where a conventional and/or filtered tailings storage facility should be located; hydrological, hydrogeological, and geotechnical studies are also being conducted.

Cuajone Expansion - Moquegua: To maintain or potentially increase production levels, the Company is evaluating expanding the Cuajone operation from its current milling capacity of 90,000 tonnes per day to 120,000 tonnes per day (a 33% increase). The expansion will require additional mining equipment and a new production line at the Cuajone concentrator. Current estimates point to a capital cost of $680 million to produce an average of 55,000 tonnes of copper and 1,400 tonnes of molybdenum per year.

As part of a thoughtful review of the matter, studies are underway to determine the viability of expanding to 150,000 tonnes of milling capacity per day.

El Arco - Baja California: This is a world-class copper deposit located in the central part of the Baja California peninsula with ore reserves of over 1,230 million tonnes of sulfides with an average ore grade of 0.40% and 141 million tonnes of leach material with an average ore grade of 0.27%. The project includes an open-pit mine with a combined 120 ktpd concentrator and 28 ktpy SX-EW operations.

Under the Mexican constitution, the government is solely responsible for electric energy transmission. The Comisión Federal de Electricidad (CFE), as the competent government entity, must interconnect the Baja California peninsula with the rest of the country. In this context, our project’s initiation is dependent on action at the Mexican government level.

Detailed engineering is still underway for the concentrator, SX-EW plant, water desalination facilities, logistics infrastructure and power delivery.

Additional projects in the Mexican pipeline are Angangueo and Chalchihuites (which are part of the Mexican copper circuit) and the Empalme Smelter, which are expected to bolster our position as a fully integrated copper producer.

The aforementioned information is based solely on estimates. We cannot make any assurances that we will undertake any of these projects or that the information noted is accurate.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE (“ESG”) PRACTICES

Our sustainability ratings continue to improve. In its Corporate Sustainability Assessment 2026 (CSA), S&P Global increased SCC’s rating by two points over last year’s print. The Company ranks among the top three performers in the mining sector, with a rating double that of the industry average. Some of SCC’s individual ratings were top-of-class for the sector: i) transparency and reporting, ii) materiality, iii) risk management, iv) business ethics, v) energy, vi) biodiversity, and vii) community relations.

Silver Helmet Award for best safety performance. Four operations in Sonora —lime plant, La Caridad mine, the Minera Mexico’s copper smelter and refinery— were awarded the “Silver Helmet” by the Mexican Mining Chamber (CAMIMEX) for their safety and accident prevention metrics. This is the first time that four operations in Sonora received this award simultaneously, which attests to our teams’ commitment to strengthen preventive practices, safety controls and worker protection.

Participative environmental monitoring in Michiquillay. As part of our commitment to promote stakeholders’ active participation in new project development, the Participative Environmental Committee for the Michiquillay project in Peru completed its third verification of environmental performance in 2026. Community leaders and representatives of private entities sit on this Committee, which has the technical capabilities to collect soil, water and air samples and interpret results. Their participation in project development strengthens actions and measures to prevent or manage impacts on the environment and communities.

Forging Futures program continues to bear fruit in Peru. For the past 14 years, our program “Forjando Futuro” (Forging Futures) has been developing capacities and providing access to local job opportunities in the areas of influence of our operations in Peru and Mexico. Currently, 17% of the jobs on the Tia Maria project are held by locals, who access these opportunities through our onsite offices or in coordination with local contractors. Under this program, we have awarded 700 scholarships to young people to obtain certifications to operate heavy equipment or engage in welding and topography. These efforts strengthen participants’ technical competencies and broaden capacities to successfully insert in the job market.

ACCOUNTING ESTIMATES

Our discussion and analysis of financial condition and results of operations, as well as quantitative and qualitative disclosures about market risks, are based upon our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. Preparation of these consolidated financial statements requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We make our best estimate of the ultimate outcome for these items based on historical trends and other information available when the financial statements are prepared. Changes in estimates are recognized in accordance with the accounting rules for the estimate, which is typically in the period when new information becomes available to management. Areas where the nature of the estimate makes it reasonably possible that actual results could materially differ from amounts estimated include: ore reserves, revenue recognition, ore stockpiles on leach pads and related amortization, estimated impairment of assets, asset retirement obligations, determination of discount rates related to the financial lease liabilities, classification of operating leases versus finance leases, valuation allowances for deferred tax assets, unrecognized tax benefits and fair value of financial instruments. We base our estimates on historical experience and on various other assumptions that we believe reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.

BENEFIT PLANS

At the Company’s July 2025 Board of Directors meeting, approval was granted by the Board to terminate the Retirement Benefit Plan for Salaried Employees of Southern Copper Corporation (the “Plan”) effective December 1, 2025. The Termination proceeded as a standard termination. Since November of 2000, the Plan has been frozen and closed to new participants and accruals of benefits. Retirees who received their monthly benefits from The Metropolitan Life Insurance Company (“MetLife”) will continue to receive their monthly benefit from MetLife. Plan participants that begin drawing their benefits for the first time after October 1, 2025, will receive their benefit from Midland Insurance Company.

Settlement charges related to the Plan termination, which included the recognition of accumulated gains and losses recorded within other comprehensive income on the Company’s balance sheet, were recorded in the fourth quarter of 2025. The Plan’s termination had no material impact on the Company’s financial statements; the termination process was completed on April 30, 2026.

RESULTS OF OPERATIONS

The following highlights key financial results for the three-month and nine-month periods ended September 30, 2026 and 2025:

Net sales in the third quarter of 2026 totaled $4,696.6 million, which represented a 39.1% increase compared to the figure for the same period in 2025. This increase was primarily driven by an increase in sales volumes of zinc (+0.8%) and higher prices for copper (LME, +44.4%; COMEX, +34.2%), molybdenum (+35.5%), silver (+58.7%), and zinc (+35.9%), despite a drop in sales volumes of copper (-0.4%), molybdenum (-0.2%), and silver (-12.2%).

Net income attributable to SCC for the third quarter of 2026 reached $1,801.8 million, which represented a 62.7% increase compared to the print for the same period in 2025. This increase was primarily driven by an increase in net sales (+39.1%), which reflected higher metal prices across all our products, while operating costs increased at a considerably lower rate (+17.0%), resulting in a 59.2% increase in operating income.

Net sales in the nine-month period of 2026 increased by 38.6% compared to the print for the same period in 2025. This increase was primarily driven by an increase in sales volumes of zinc (+2.0%) and by higher prices for copper (LME, +40.6%; COMEX, +30.6%), molybdenum (+34.3%), silver (+108.2%), and zinc (+26.2%), despite a reduction in the sales volumes of copper (-2.3%), molybdenum (-5.3%), and silver (-3.6%).

Net income attributable to SCC for the nine-month period of 2026 increased by 66.8% compared to the same period in 2025. This increase was primarily driven by an increase in net sales (+38.6%), which reflected higher metal prices across all our products, while operating costs increased at a considerably lower rate (+14.2%), resulting in a 61.9% increase in operating income.

The table below outlines the average published market metal prices for our metals for the three-month and nine-month periods ended September 30, 2026 and 2025:

(1) Platts Metals Week Dealer Oxide

The table below provides our metal sales as a percentage of our total net sales for the three-month and nine-month periods ended September 30, 2026 and 2025:

The table below provides our copper sales by type of product for the three-month and nine-month periods ended September 30, 2026 and 2025. The difference in value between products is the level of processing. At the market price, concentrates take a discount since they require smelting and refining processes, while refined and rod copper receive premiums due to their purity and presentation.

The table below provides our copper sales volume by type of product as a percentage of our total copper sales volume for the three-month and nine-month periods ended September 30, 2026 and 2025:

OPERATING COSTS AND EXPENSES

The table below summarizes the production cost structure by major components as a percentage of total production cost:

Third quarter: Operating costs and expenses were $1,881.5 million for the third quarter of 2026, compared to $1,608.5 million for the same period in 2025. The increase of $273.0 million was primarily due to:

Nine months: Operating costs and expenses were $5,318.3 million for the nine-month period of 2026, compared to $4,658.9 million for the same period in 2025. The increase of $659.4 million was primarily due to:

Operating cost and expenses for the nine months of 2025 ​ ​ ​ $ 4,658.9

Plus: ​ ​ ​

• Increase in other cost of sales (exclusive of depreciation, amortization and depletion), which is mainly attributable to: 457.3

​ - Fuel 113.4 ​ ​

​ - Workers participation 101.2 ​ ​

​ - Solidarity contribution for social and development programs in Sonora, Mexico 57.4 ​ ​

​ - Labor expenses 56.7 ​ ​

​ - Leachable material 36.3 ​ ​

​ - Sales expenses 31.5 ​ ​

​ - Energy costs 14.4 ​ ​

​ - Water costs 9.1 ​ ​

​ - Operating contractors 7.8 ​ ​

​ - Other net 29.5 ​ ​

• Increase in volume and cost of metals purchased from third parties. ​ ​ 142.4
• Increase in depreciation, amortization and depletion expense. ​ ​ 44.3

52

NON-OPERATING INCOME (EXPENSE)

Non-operating income (expense) represented a net expense of $(35.0) million and $(95.0) million for the three and nine months ended September 30, 2026, compared to a net expense of $(44.6) million and $(144.7) million for the three and nine months ended September 30, 2025, respectively.

Third quarter: The $9.6 million decrease in the expense level was due to:

• $23.6 million increase in interest income due to higher cash balances, partially offset by,
• $9.8 million increase in interest expense, net of capitalized interest due to the debt issuance in June 2026, and
• $4.2 million increase in net miscellaneous expenses.

Nine months: The $49.7 million decrease in the expense level was due to:

• $26.0 million increase in interest income due to higher cash balances.
• $25.4 million decrease in net miscellaneous expenses, mainly due to a decrease in expenses related to the disposal of fixed assets at our Mexican operations, and partially offset by,
• $1.8 million increase in interest expense, net of capitalized interest.

INCOME TAXES

In addition to the income taxes of Peru, Mexico and the United States, the provision for income taxes also includes the mining royalties from Peru and Mexico and the Peruvian special mining tax.

SEGMENT RESULT ANALYSIS

We have three segments: the Peruvian operations, the Mexican open-pit operations and the Mexican underground mining operations.

The table below presents information regarding the volume of our copper sales by segment for the three-month and nine-month periods ended September 30, 2026 and 2025:

The table below presents information regarding the volume of sales by segment of our significant by-products for the three-month and nine-month periods ended September 30, 2026 and 2025:

Peruvian Open-pit Operations:

Net sales in the third quarter of 2026 increased by $415.6 million compared to the figure reported for same period in 2025. This increase was primarily driven by an increase in the sales volumes of molybdenum (+11.1%) and higher prices for copper (LME, +44.4%), molybdenum (+35.5%), and silver (+58.7%); growth in net sales occurred despite a drop in sales volumes of copper (-9.9%) and silver (-34.6%).

Operating costs and expenses were $705.1 million in the third quarter of 2026 compared to $630.9 million in the same period of 2025. The increase of $74.2 million was primarily due to:

Net sales in the nine-month period of 2026 increased by $1,137.2 million compared to the print for the same period in 2025. This increase was primarily driven by an increase in prices for copper (LME, +40.6%), molybdenum (+34.3%), and silver (+108.2%), and occurred despite a drop in sales volumes of copper (-10.9%), molybdenum (-1.5%) and silver (-28.9%).

Operating costs and expenses were $2,011.2 million for the nine-month period of 2026 compared to $1,930.5 million for the same period in 2025. The increase of $80.7 million was primarily due to:

Mexican Open-pit Operations:

Net sales in the third quarter of 2026 increased by $829.8 million compared to the figure reported for the same period of 2025. This increase was primarily driven by an increase in the sales volumes of copper (+6.0%) and higher prices for copper (COMEX, +34.2%), molybdenum (+35.5%), silver (+58.7%) and zinc (+35.9%); net sales were up despite a drop in the sales volumes of molybdenum (-10.1%), silver (-10.8%), and zinc (-12.5%).

Operating costs and expenses were $1,037.0 million for the third quarter of 2026 compared to $882.0 million for the same period of 2025. The increase of $155.0 million was primarily due to:

Net sales in the nine-month period of 2026 increased by $2,281.1 million compared to the same period of 2025. This increase was primarily driven by an increase in the sales volumes of copper (+4.0%) and silver (+3.0%) and higher prices for copper (COMEX, +30.6%), molybdenum (+34.3%), silver (+108.2%) and zinc (+26.2%); growth in net sales occurred despite a drop in the sales volumes of molybdenum (-8.7%) and zinc (-11.3%).

Operating costs and expenses were $2,954.2 million for the nine-month period of 2026 compared to $2,431.7 million for the same period in 2025. The increase of $522.4 million was primarily due to:

57

Mexican Underground Operations (IMMSA):

Net sales in the third quarter of 2026 increased by $78.3 million compared to the figure reported for the same period in 2025. This increase was primarily driven by an increase in the sales volumes of copper (+12.4%), silver (+6.3%), and zinc (+2.5%), and higher prices for copper (COMEX, +34.2%), silver (+58.7%), and zinc (+35.9%).

Operating costs and expenses were $201.9 million in the third quarter of 2026 compared to $153.5 million for the same period in 2025. The increase of $48.3 million was primarily due to:

Operating costs and expenses for the third quarter of 2025 ​ ​ ​ $ 153.5

Plus: ​ ​ ​

• Increase in other cost of sales (exclusive of depreciation, amortization and depletion), which is mainly attributable to: 58.9

​ - Inventory variance 27.8 ​ ​

​ - Exchange rate variance 10.8 ​ ​

​ - Workers participation 7.7 ​ ​

​ - Labor expenses 3.7 ​ ​

​ - Operations contractors 1.9 ​ ​

​ - Repairing materials, principally heavy equipment spare parts 1.0 ​ ​

​ - Other net 5.8 ​ ​

• Increase in exploration expense. ​ ​ 2.5

Less: ​ ​ ​

• Decrease in volume and cost of metals purchased from third parties. ​ ​ (11.3)
• Decrease in selling, general and administrative expenses. ​ ​ (1.1)
• Decrease in depreciation, amortization and depletion expense. ​ ​ (0.6)

Operating costs and expenses for the third quarter of 2026 ​ $ 201.9

Net sales in the nine-month period of 2026 increased by $330.1 million compared to the figure for the same period in 2025. This increase was primarily driven by an increase in the sales volumes of copper (+14.0%), silver (+5.0%), and zinc (+3.9%), and higher prices for copper (COMEX, +30.6%), silver (+108.2%), and zinc (+26.2%).

Operating costs and expenses were $559.5 million for the nine-month period of 2026 compared to $452.0 million in the same period of 2025. The increase of $107.5 million was primarily due to:

Operating costs and expenses for the nine months of 2025 ​ ​ ​ $ 452.0

Plus: ​ ​ ​

• Increase in other cost of sales (exclusive of depreciation, amortization and depletion), which is mainly attributable to: 76.3

​ - Inventory variance 19.9 ​ ​

​ - Operations contractors 14.5 ​ ​

​ - Labor expenses 13.7 ​ ​

​ - Repairing materials, principally heavy equipment spare parts 6.2 ​ ​

​ - Sales expenses 5.8 ​ ​

​ - Exchange rate variance 4.3 ​ ​

​ - Other net 11.8 ​ ​

• Increase in volume and cost of metals purchased from third parties. ​ ​ 30.5
• Increase in exploration expense. ​ ​ 3.1
• Increase in depreciation, amortization and depletion expense. ​ ​ 0.2

Less: ​ ​ ​

• Decrease in selling, general and administrative expenses. ​ ​ (2.6)

Operating costs and expenses for the nine months of 2026 ​ $ 559.5

Intersegment Eliminations and Adjustments:

The net sales, operating costs and expenses and operating income discussed above will not be directly equal to amounts in our condensed consolidated statement of earnings because the adjustments of intersegment operating revenues and expenses must be taken into account. Please see Note 14 “Segment and Related Information” of the condensed consolidated financial statements.

LIQUIDITY AND CAPITAL RESOURCES

Cash flow:

The following table shows the cash flow for the nine-month periods ended September 30, 2026 and 2025 (in millions):

Net cash provided by operating activities:

The change in net cash from operating activities for the nine-month periods ended September 30, 2026 and 2025 include, in millions, the following significant items:

Nine-month period ended September 30, 2026: Net income was $5,063.5 million, which represented approximately 85.7% of the net operating cash flow. Working capital variances provided $233.8 million of cash, primarily reflecting the following:

• $594.8 million increase in accounts payable and accrued liabilities.
• $61.6 million net decrease in inventory, primarily driven by a reduction in leachable material inventory.
• $(395.9) million increase in trade accounts receivable, mainly attributable to higher metal prices during the period.
• $(26.6) million increase in other operating assets and liabilities, net.

Nine-month period ended September 30, 2025: Net income was $3,036.7 million, which represented approximately 93.2% of the net operating cash flow. The cash flow from operating assets and liabilities dropped by $479.0 million due to the following:

• $(529.8) million increase in trade accounts receivable, which was mainly attributable to an increase in metal prices and in reported sales volumes in the first nine months of 2025.
• $(25.9) million decrease in accounts payable and accrued liabilities.
• $15.2 million net decrease in inventory, which was primarily driven by a reduction in the work in process inventory.
• $61.6 million decrease in other operating assets and liabilities, net.

Net cash used in investing activities:

Nine-month period ended September 30, 2026: Net cash used in investing activities included $1,380.5 million for capital investments. The capital investments included:

• $576.5 million of investments at our Mexican operations:
• $102.7 million for the IMMSA unit,
• $81.0 million for the tailings deposits of the new concentrator at Buenavista,
• $56.5 million for land for new projects,
• $39.0 million for wells and recovered water conduction,
• $297.8 million for replacement, maintenance expenditures and other projects, and
• $(0.5) million increase in capital expenditures incurred but not yet paid.
• $804.0 million of investments at our Peruvian operations:
• $505.9 million for the Tia Maria project,
• $14.2 million for the relocation of the leaching crusher at Toquepala,
• $12.1 million for the relocation of the electrical room and conveyor belt at the Cuajone concentrator,
• $11.9 million for the new maintenance workshop at the Cuajone concentrator,
• $10.1 million for the cathode stripping machine at the Ilo refinery,
• $234.0 million for replacement, maintenance expenditures and other projects,
• $52.6 million for other minor projects with a budget below $1 million, and
• $(36.8) million increase in capital expenditures incurred but not yet paid.

Investment activities in the nine-month period of 2026 included $2,634.6 million of net purchase of short-term investments.

Nine-month period ended September 30, 2025: Net cash used in investing activities included $902.7 million for capital investments. The capital investments included:

• $533.9 million of investments at our Mexican operations:
• $147.3 million for the new tailings disposal deposit at Buenavista mine,
• $78.8 million for the IMMSA unit,
• $26.7 million for the water supply system at La Churea,
• $22.0 million for wells and recovered water conduction,
• $21.0 million for land for new projects,
• $245.7 million for replacement and maintenance expenditures, and
• $(7.6) million increase in capital expenditures incurred but not yet paid.
• $368.8 million of investments at our Peruvian operations:
• $46.0 million for the Tia Maria project,
• $43.7 million for the purchase of land at the Los Chancas project,
• $24.2 million for the relocation of the leaching crusher at Toquepala,
• $18.4 million for the cathode stripping machine at the Ilo refinery,
• $8.3 million for the modernization of the delamination machine at Toquepala,
• $6.0 million for the pump and cooling pipe replacement at the Ilo oxygen plant,
• $4.9 million for the electric cogeneration at Ilo smelter,
• $63.7 million for other minor projects with a budget below $1 million,
• $143.1 million for replacement and maintenance expenditures, and
• $10.6 million decrease in capital expenditures incurred but not yet paid.

Investment activities in nine-month period of 2025 included $330.6 million of net purchase of short-term investments.

Dividends:

On October 15, 2026, the Board of Directors authorized a quarterly cash dividend of $1.30 per share of common stock and a stock dividend of 0.0106 shares of common stock per share of common stock, payable on November 19, 2026 to shareholders of record at the close of business on November 3, 2026.

In lieu of fractional shares, cash will be distributed to each shareholder who would otherwise have been entitled to receive a fractional share, based on a share price of $197.83, which is the average of the high and low share price on October 15, 2026.

Factoring in both the cash dividend and the equivalent value of the stock dividend (calculated at $2.10 based on the average high and low share price of $197.83 per share on October 15, 2026), the total estimated dividend payment is $3.40 per share.

Capital Investment and Exploration Programs:

A discussion of our capital investment programs is an important part of understanding our liquidity and capital resources. We expect to meet the cash requirements for these capital investments from cash on hand, internally generated funds and from additional external financing, including funding received in June 2026. For information regarding our capital investment programs, please see the discussion under the caption “Capital Investment Programs” under this Item 2.

Contractual Obligations:

The following information updates our significant contractual obligations disclosed in Part II, Item 7 of our 2025 annual report on Form 10-K as filed with the SEC on February 27, 2026:

In May 2026, the Company entered into a power purchase agreement for a total of 200MW with Orygen Perú S.A.A. (“Orygen”), under which Orygen will supply energy for the Peruvian operations for ten years starting on May 1, 2027 and ending on April 30, 2037. Orygen will initially supply 120MW of power to the Company, effective between May 1, 2027 and April 30, 2029. Beginning on May 1, 2029, and until the contract end date on April 30, 2037, the contract amount will increase to 200MW. It is projected this new contract will reduce power costs for the Peruvian operations by approximately 22%.

NON-GAAP INFORMATION RECONCILIATION

Operating cash cost: Following is a reconciliation of “Operating Cash Cost” (see page 44) to cost of sales (exclusive of depreciation, amortization and depletion) as reported in our condensed consolidated statement of earnings, in millions of dollars and dollars per pound of copper in the table below:

(1) By-product revenues included in our presentation of operating cash cost contain the following:

(2) Net of metallurgical losses.

Commodity price risk:

For additional information on metal price sensitivity, refer to “Metal Prices” in Part I, Item 2 of this quarterly report on Form 10-Q for the period ended September 30, 2026.

Foreign currency exchange rate risk:

Our functional currency is the U.S. dollar. Portions of our operating costs are denominated in Peruvian soles and Mexican pesos. Given that our revenues are primarily denominated in U.S. dollars, when inflation or deflation in our Mexican or Peruvian operations is not offset by a change in the exchange rate of the sol or the peso to the dollar, our financial position, results of operations and cash flows could be affected by local cost conversion when expressed in U.S. dollars. In addition, the dollar value of our net monetary assets denominated in soles or pesos can be affected by an exchange rate variance of the sol or the peso, resulting in a re-measurement gain or loss in our financial statements. Recent inflation and exchange rate variances are provided in the table below for the three-month and nine-month periods ended September 30, 2026 and 2025:

Change in monetary position:

Assuming an exchange rate variance of 10% at September 30, 2026, we estimate our net monetary position in Peruvian sol and Mexican peso would increase (decrease) our net earnings as follows:

($ in millions)

Open sales risk:

Our provisional copper and molybdenum sales contain an embedded derivative that is required to be separate from the host contract for accounting purposes. The host contract is the receivable from the sale of copper and molybdenum concentrates at prevailing market prices at the time of the sale. The embedded derivative, which does not qualify for hedge accounting, is marked to market through earnings each period prior to settlement. See Note 13 to our condensed consolidated financial statements for further information about these provisional sales.

Short-term Investments:

For additional information on our trading securities and available-for-sale investments, refer to “Short-term Investments” in Part I, Item 1 of this quarterly report on Form 10-Q for the period ended September 30, 2026.

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 risks and uncertainties relating to general U.S. and international economic and political conditions, the cyclical and volatile prices of copper, other commodities and supplies, including fuel and electricity, availability of materials, insurance coverage, equipment, required permits or approvals and financing, the occurrence of unusual weather or operating conditions, lower than expected ore grades, water and geological problems, the failure of equipment or processes to operate in accordance with specifications, failure to obtain financial assurance to meet closure and remediation obligations, labor relations, litigation and 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 that can be volatile.

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

As of September 30, 2026, the Company conducted an evaluation under the supervision and with the participation of the Company’s disclosure committee and the Company’s management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness and the design and operation of the Company’s disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)). Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that the Company’s disclosure controls and procedures are effective as of September 30, 2026, to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is:

1. Recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and

2. Accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There were no changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended) that occurred during the three months ended September 30, 2026 that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Southern Copper Corporation:

Results of Review of Interim Financial Statements

We have reviewed the accompanying condensed consolidated balance sheet of Southern Copper Corporation and subsidiaries (the “Company”) as of September 30, 2026, the related condensed consolidated statements of earnings, comprehensive income, cash flows and changes in equity for the three-month and nine-month periods ended September 30, 2026 and 2025, and the related notes (collectively referred to as the “interim financial information”). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial information for it to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, 2025, and the related consolidated statements of earnings, comprehensive income, cash flows and changes in equity for the year then ended (not presented herein); and in our report dated February 27, 2026, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2025, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

This interim financial information is the responsibility of the Company’s management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our reviews in accordance with standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the consolidated financial statements taken as a whole. Accordingly, we do not express such an opinion.

Galaz, Yamazaki, Ruiz Urquiza, S.C.

Affiliate of a Member Firm of Deloitte Touche Tohmatsu Limited

The Company's operations and financial results are subject to various risks and uncertainties, including those described in “Risk Factors” included in Part I, Item 1A of our Annual report on Form 10-K for the year ended December 31, 2025 filed with the SEC on February 27, 2026. The following supplements and updates the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.

Geopolitical tensions and potential military conflicts may materially affect our business, financial condition and results of operations.

Current and potential military conflicts, along with heightened geopolitical tensions globally, including the ongoing conflict between Israel/Iran and instability in Eastern Europe could adversely impact our operations, global economic conditions and commodity markets. Such events may cause significant disruptions to global supply chains, such as delays in shipping through critical routes like the Strait of Hormuz, increased costs for fuel and energy, and restricted access to key raw materials for our operations. These conditions may result in higher operating costs and reduced margins.

Such conflicts may also contribute to market volatility, fluctuation in foreign currency exchange rates, access to capital and investor sentiment, which could adversely affect our stock price and the cost of financing. Furthermore, the imposition of economic sanctions, export controls or other trade restrictions by the U.S. or other governments may limit our ability to conduct business in certain regions, disrupt international trade flows and affect demand for our products.

Although we maintain risk management and mitigation programs, we cannot assure that these measures will successfully prevent or lessen the impact of political, regulatory, and trade-related risks on our operations and financial results. If these tensions escalate or persist, our financial condition and results of operations could be materially and adversely affected.

Our business depends upon information technology systems that may be adversely affected by disruptions, damage, cyber-attacks, failure and risks associated with implementation and integration.

Our operations depend upon information technology systems that may be subject to disruption, damage or failure from different sources, including, without limitation, the installation of malicious software, security breaches, cyber attacks and defects in design. In recent years, cybersecurity incidents have increased in frequency and include, but are not limited to, malicious software, attempts to gain unauthorized access to data and other electronic security breaches that could lead to disruptions in systems, unauthorized release of confidential or otherwise protected information and the corruption of data. Evolving cybersecurity risks, including the use of artificial intelligence (AI) and machine learning by attackers to enable sophisticated attack techniques or methods, as well as risks arising from compromised, misused, or autonomous AI systems, including frontier large language models and AI agents. Advanced AI technologies may increase the speed, scale, and sophistication of cyber-attacks through the exploitation of previously unknown vulnerabilities and the rapid identification and combination of weaknesses and misconfigurations that are increasingly difficult to predict and detect.

We have implemented measures for managing and treating potential risks through an information security management system that conducts ongoing monitoring, and ensures the application of controls that are frequently reviewed and tested (as described in Form 10-K, Item 1-C, Cybersecurity).

Given the unpredictability of the timing, nature and scope of information technology disruptions, we could potentially be subject to manipulation or improper use of our systems and networks, operational delays, situations that compromise confidential or otherwise protected information, destruction or corruption of data, security breaches, reputational damage and erosion of stakeholder trust, or financial losses from remedial actions, any of which could have a material adverse effect on the cash flows, competitive position, business operations, financial condition, or results of our operations.