NOTES TO CONDENSED C
ON
SOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in millions)
Note 1:
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
Company Operations
We, AMCOL International Corporation (the “Company”), are a global company focused on long-term profitability growth through the development and application of minerals and technology products and services for use in various industrial and consumer markets. We operate in five segments: minerals and materials, environmental, oilfield services, transportation and corporate.
Our minerals and materials segment mines, processes and distributes minerals and products for use in various industrial and consumer markets, including metalcasting, pet care, laundry care, and drilling industries. Additionally, this segment develops and manufactures synthetic materials principally for personal care applications.
Our environmental segment manufactures and distributes products for use as moisture and vapor barriers in commercial construction, landfills and a variety of other industrial and commercial applications and provides related services.
Our oilfield services segment provides both onshore and offshore water treatment filtration, well testing, pipeline separation, nitrogen, coil tubing and other services to the oil and natural gas industry.
Our transportation segment includes both a long-haul trucking business and a freight brokerage business serving our domestic subsidiaries as well as third parties.
Our corporate segment includes the elimination of intersegment sales as well as certain expenses associated with research and development, management, employee benefits and information technology activities for our Company. Approximately 71% and 82% of the revenue elimination in the three months ended March 31, 2012 and 2011, respectively, represents elimination of shipping revenues between our transportation segment and its domestic sister companies.
The composition of our revenues by segment is as follows:
|
|
Three Months Ended
March 31,
|
|
|
|
2012
|
|
|
2011
|
|
Minerals and materials
|
|
|
53
|
%
|
|
|
53
|
%
|
Environmental
|
|
|
22
|
%
|
|
|
24
|
%
|
Oilfield services
|
|
|
23
|
%
|
|
|
21
|
%
|
Transportation
|
|
|
5
|
%
|
|
|
6
|
%
|
Intersegment sales
|
|
|
-3
|
%
|
|
|
-4
|
%
|
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
Further discussion of our segment information is included in Note 5, “Business Segment Information.”
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in millions)
Basis of Presentation
The financial information included herein has been prepared by management, and other than the condensed consolidated balance sheet as of December 31, 2011, is unaudited. The condensed consolidated balance sheet as of December 31, 2011 has been derived from, but does not include all of the disclosures contained in, the audited consolidated financial statements for the year ended December 31, 2011. The information furnished herein includes all adjustments that are, in our opinion, necessary for a fair presentation of our results of operations and cash flows for the interim periods ended March 31, 2012 and 2011, and our financial position as of March 31, 2012, and all such adjustments are of a normal and recurring nature. The accompanying condensed consolidated financial information should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K/A for the year ended December 31, 2011.
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates.
The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year for a variety of reasons, including the seasonality of both our environmental segment, which varies due to the seasonal nature of the construction industry, and our oilfield services segment, which varies due to seasonal weather patterns in its various geographic markets.
Note 2:
|
CORRECTION OF ERRORS IN PREVIOUSLY REPORTED FINANCIAL STATEMENTS
|
We have corrected our previously issued financial statements for all periods prior to and including the twelve months ended December 31, 2011, in addition to the three months ended March 31, 2012 . For the three months ended March 31, 2012, these errors increased net income available to AMCOL shareholders by $0.6. Although there were several errors across various categories, we have summarized the errors and quantified the amount by which they increased (decreased) net income available to AMCOL shareholders into the following categories:
|
·
|
Spain - $0.3 decrease for errors associated with accounting for inventory and other items in our environmental segment’s Spanish operations;
|
|
·
|
South Africa – adjustments to correct errors related to the accounting for the acquisition of mineral rights in our minerals and materials segment’s chromite operations in South Africa;
|
|
·
|
Poland – $0.2 increase relating to inaccuracies in the accounting for long term contracts and bad debts in our environmental segment’s Polish operations;
|
|
·
|
Tax - $0.3 increase resulting from inaccuracies in the accounting for income tax deductions in our domestic operations; and
|
|
·
|
$0.4 increase for other insignificant errors we have aggregated together.
|
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in millions)
The effect of correcting these errors on our condensed consolidated statements of operations for the three months ended March 31, 2012 is as follows:
|
|
Quarter Ended March 31, 2012
|
|
|
|
Previously
Reported
|
|
|
Adjustments
|
|
|
As Adjusted
|
|
|
|
|
|
|
Spain
|
|
|
South
Africa
|
|
|
Poland
|
|
|
Tax
|
|
|
Other
|
|
|
Total
|
|
|
|
|
Continuing Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
235.8
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
(0.3
|
)
|
|
$
|
(0.3
|
)
|
|
$
|
235.5
|
|
Cost of sales
|
|
|
170.7
|
|
|
|
0.4
|
|
|
|
0.1
|
|
|
|
(0.2
|
)
|
|
|
|
|
|
|
(0.2
|
)
|
|
|
0.1
|
|
|
|
170.8
|
|
Gross profit
|
|
|
65.1
|
|
|
|
(0.4
|
)
|
|
|
(0.1
|
)
|
|
|
0.2
|
|
|
|
-
|
|
|
|
(0.1
|
)
|
|
|
(0.4
|
)
|
|
|
64.7
|
|
Selling, general and administrative expenses
|
|
|
43.6
|
|
|
|
(0.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.1
|
)
|
|
|
(0.3
|
)
|
|
|
43.3
|
|
Operating profit
|
|
|
21.5
|
|
|
|
(0.2
|
)
|
|
|
(0.1
|
)
|
|
|
0.2
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(0.1
|
)
|
|
|
21.4
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
(2.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
(2.7
|
)
|
Other, net
|
|
|
(2.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2.1
|
)
|
|
|
|
(4.8
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(4.8
|
)
|
Income before income taxes and income (loss) from affiliates and joint ventures
|
|
|
16.7
|
|
|
|
(0.2
|
)
|
|
|
(0.1
|
)
|
|
|
0.2
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(0.1
|
)
|
|
|
16.6
|
|
Income tax expense (benefit)
|
|
|
4.8
|
|
|
|
0.1
|
|
|
|
(0.1
|
)
|
|
|
|
|
|
|
(0.3
|
)
|
|
|
(0.1
|
)
|
|
|
(0.4
|
)
|
|
|
4.4
|
|
Income before income (loss) from affiliates and joint ventures
|
|
|
11.9
|
|
|
|
(0.3
|
)
|
|
|
-
|
|
|
|
0.2
|
|
|
|
0.3
|
|
|
|
0.1
|
|
|
|
0.3
|
|
|
|
12.2
|
|
Income (loss) from affiliates and joint ventures
|
|
|
1.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.1
|
|
|
|
0.1
|
|
|
|
1.3
|
|
Income (loss) from continuing operations
|
|
|
13.1
|
|
|
|
(0.3
|
)
|
|
|
-
|
|
|
|
0.2
|
|
|
|
0.3
|
|
|
|
0.2
|
|
|
|
0.4
|
|
|
|
13.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) on discontinued operations
|
|
|
(0.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.2
|
|
|
|
0.2
|
|
|
|
-
|
|
Net income (loss)
|
|
|
12.9
|
|
|
|
(0.3
|
)
|
|
|
-
|
|
|
|
0.2
|
|
|
|
0.3
|
|
|
|
0.4
|
|
|
|
0.6
|
|
|
|
13.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to noncontrolling interests
|
|
|
0.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
0.1
|
|
Net income (loss) attributable to AMCOL shareholders
|
|
$
|
12.8
|
|
|
$
|
(0.3
|
)
|
|
$
|
-
|
|
|
$
|
0.2
|
|
|
$
|
0.3
|
|
|
$
|
0.4
|
|
|
$
|
0.6
|
|
|
$
|
13.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding
|
|
|
32.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32.0
|
|
|
|
32.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common and common equivalent shares outstanding
|
|
|
32.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32.3
|
|
|
|
32.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts attributable to AMCOL shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations, net of tax
|
|
$
|
13.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0.4
|
|
|
$
|
13.4
|
|
Discontinued operations, net of tax
|
|
|
(0.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.2
|
|
|
|
-
|
|
Net income
|
|
$
|
12.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0.6
|
|
|
$
|
13.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share attributable to AMCOL shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
0.41
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0.01
|
|
|
$
|
0.42
|
|
Discontinued operations
|
|
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.01
|
|
|
|
-
|
|
Net income
|
|
$
|
0.40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0.02
|
|
|
$
|
0.42
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
0.41
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
-
|
|
|
$
|
0.41
|
|
Discontinued operations
|
|
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.01
|
|
|
|
-
|
|
Net income
|
|
$
|
0.40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0.01
|
|
|
$
|
0.41
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in millions)
The effect of correcting these errors, and other errors corrected in our 2011 and prior financial statements (as reflected in our 2011 Form 10-K/A), on our condensed consolidated statements of operations for the three months ended March 31, 2011 is as follows:
|
|
Quarter Ended March 31, 2011
|
|
|
|
Previously
Reported
|
|
|
Adjustments
|
|
|
As Adjusted
|
|
|
|
|
|
|
Spain
|
|
|
South
Africa
|
|
|
Malaysia
|
|
|
Poland
|
|
|
Tax
|
|
|
Other
|
|
|
Total
|
|
|
|
|
Continuing Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
217.8
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
0.6
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
0.2
|
|
|
$
|
0.8
|
|
|
$
|
218.6
|
|
Cost of sales
|
|
|
160.1
|
|
|
|
0.3
|
|
|
|
0.1
|
|
|
|
|
|
|
|
0.5
|
|
|
|
|
|
|
|
(0.3
|
)
|
|
|
0.6
|
|
|
|
160.7
|
|
Gross profit
|
|
|
57.7
|
|
|
|
(0.3
|
)
|
|
|
(0.1
|
)
|
|
|
0.6
|
|
|
|
(0.5
|
)
|
|
|
-
|
|
|
|
0.5
|
|
|
|
0.2
|
|
|
|
57.9
|
|
Selling, general and administrative expenses
|
|
|
39.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.2
|
)
|
|
|
(0.2
|
)
|
|
|
38.9
|
|
Operating profit
|
|
|
18.6
|
|
|
|
(0.3
|
)
|
|
|
(0.1
|
)
|
|
|
0.6
|
|
|
|
(0.5
|
)
|
|
|
-
|
|
|
|
0.7
|
|
|
|
0.4
|
|
|
|
19.0
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
(2.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.1
|
|
|
|
0.1
|
|
|
|
(2.6
|
)
|
Other, net
|
|
|
(0.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
(0.4
|
)
|
|
|
|
(3.1
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0.1
|
|
|
|
0.1
|
|
|
|
(3.0
|
)
|
Income before income taxes and income (loss) from affiliates and joint ventures
|
|
|
15.5
|
|
|
|
(0.3
|
)
|
|
|
(0.1
|
)
|
|
|
0.6
|
|
|
|
(0.5
|
)
|
|
|
-
|
|
|
|
0.8
|
|
|
|
0.5
|
|
|
|
16.0
|
|
Income tax expense (benefit)
|
|
|
4.3
|
|
|
|
|
|
|
|
0.1
|
|
|
|
0.1
|
|
|
|
|
|
|
|
(0.5
|
)
|
|
|
(0.2
|
)
|
|
|
(0.5
|
)
|
|
|
3.8
|
|
Income before income (loss) from affiliates and joint ventures
|
|
|
11.2
|
|
|
|
(0.3
|
)
|
|
|
(0.2
|
)
|
|
|
0.5
|
|
|
|
(0.5
|
)
|
|
|
0.5
|
|
|
|
1.0
|
|
|
|
1.0
|
|
|
|
12.2
|
|
Income (loss) from affiliates and joint ventures
|
|
|
1.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.1
|
)
|
|
|
-
|
|
|
|
(0.1
|
)
|
|
|
1.0
|
|
Income (loss) from continuing operations
|
|
|
12.3
|
|
|
|
(0.3
|
)
|
|
|
(0.2
|
)
|
|
|
0.5
|
|
|
|
(0.5
|
)
|
|
|
0.4
|
|
|
|
1.0
|
|
|
|
0.9
|
|
|
|
13.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) on discontinued operations
|
|
|
(0.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
(0.1
|
)
|
Net income (loss)
|
|
|
12.2
|
|
|
|
(0.3
|
)
|
|
|
(0.2
|
)
|
|
|
0.5
|
|
|
|
(0.5
|
)
|
|
|
0.4
|
|
|
|
1.0
|
|
|
|
0.9
|
|
|
|
13.1
|
|
Net income (loss) attributable to noncontrolling interests
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
-
|
|
Net income (loss) attributable to AMCOL shareholders
|
|
$
|
12.2
|
|
|
$
|
(0.3
|
)
|
|
$
|
(0.2
|
)
|
|
$
|
0.5
|
|
|
$
|
(0.5
|
)
|
|
$
|
0.4
|
|
|
$
|
1.0
|
|
|
$
|
0.9
|
|
|
$
|
13.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding
|
|
|
31.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.5
|
|
|
|
31.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common and common equivalent shares outstanding
|
|
|
32.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32.0
|
|
|
|
32.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts attributable to AMCOL shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations, net of tax
|
|
$
|
12.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0.9
|
|
|
$
|
13.2
|
|
Discontinued operations, net of tax
|
|
|
(0.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
(0.1
|
)
|
Net income
|
|
$
|
12.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0.9
|
|
|
$
|
13.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share attributable to AMCOL shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
0.39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0.03
|
|
|
$
|
0.42
|
|
Discontinued operations
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
-
|
|
Net income
|
|
$
|
0.39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0.03
|
|
|
$
|
0.42
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
0.38
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0.03
|
|
|
$
|
0.41
|
|
Discontinued operations
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
-
|
|
Net income
|
|
$
|
0.38
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0.03
|
|
|
$
|
0.41
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in millions)
The effect of correcting these errors, and other errors corrected in periods prior to and including December 31, 2011 (as reflected in our 2011 Form-10K/A), in our condensed consolidated balance sheet as of March 31, 2012 is as follows:
|
|
March 31, 2012
|
|
|
|
Previously
Reported
|
|
|
Adjustments
|
|
|
As Adjusted
|
|
ASSETS
|
|
|
|
|
Spain
|
|
|
South
Africa
|
|
|
Poland
|
|
|
Tax
|
|
|
Other
|
|
|
Total
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
16.9
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
16.9
|
|
Accounts receivable, net
|
|
|
204.0
|
|
|
|
(0.6
|
)
|
|
|
|
|
|
|
(0.3
|
)
|
|
|
|
|
|
|
(0.3
|
)
|
|
|
(1.2
|
)
|
|
$
|
202.8
|
|
Inventories
|
|
|
150.6
|
|
|
|
(2.3
|
)
|
|
|
0.3
|
|
|
|
|
|
|
|
|
|
|
|
(0.3
|
)
|
|
|
(2.3
|
)
|
|
|
148.3
|
|
Prepaid expenses
|
|
|
17.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
17.2
|
|
Deferred income taxes
|
|
|
6.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
6.2
|
|
Income tax receivable
|
|
|
5.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
5.7
|
|
Other
|
|
|
4.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
4.6
|
|
Total current assets
|
|
|
405.2
|
|
|
|
(2.9
|
)
|
|
|
0.3
|
|
|
|
(0.3
|
)
|
|
|
-
|
|
|
|
(0.6
|
)
|
|
|
(3.5
|
)
|
|
|
401.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncurrent assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant, equipment, and mineral rights and reserves:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Land
|
|
|
14.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1.8
|
)
|
|
|
(1.8
|
)
|
|
|
12.5
|
|
Mineral rights
|
|
|
43.8
|
|
|
|
|
|
|
|
11.2
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
11.2
|
|
|
|
55.0
|
|
Depreciable assets
|
|
|
500.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2.3
|
|
|
|
2.3
|
|
|
|
502.5
|
|
|
|
|
558.3
|
|
|
|
-
|
|
|
|
11.2
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0.5
|
|
|
|
11.7
|
|
|
|
570.0
|
|
Less: accumulated depreciation and depletion
|
|
|
285.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.1
|
|
|
|
0.1
|
|
|
|
285.2
|
|
|
|
|
273.2
|
|
|
|
-
|
|
|
|
11.2
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0.4
|
|
|
|
11.6
|
|
|
|
284.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill
|
|
|
70.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
70.2
|
|
Intangible assets, net
|
|
|
36.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.3
|
|
|
|
0.3
|
|
|
|
37.2
|
|
Investment in and advances to affiliates and joint ventures
|
|
|
27.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
27.1
|
|
Available-for-sale securities
|
|
|
2.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
2.9
|
|
Deferred income taxes
|
|
|
8.6
|
|
|
|
|
|
|
|
0.7
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
0.7
|
|
|
|
9.3
|
|
Other assets
|
|
|
26.0
|
|
|
|
|
|
|
|
|
|
|
|
(0.4
|
)
|
|
|
|
|
|
|
-
|
|
|
|
(0.4
|
)
|
|
|
25.6
|
|
Total noncurrent assets
|
|
|
444.9
|
|
|
|
-
|
|
|
|
11.9
|
|
|
|
(0.4
|
)
|
|
|
-
|
|
|
|
0.7
|
|
|
|
12.2
|
|
|
|
457.1
|
|
Total Assets
|
|
$
|
850.1
|
|
|
$
|
(2.9
|
)
|
|
$
|
12.2
|
|
|
$
|
(0.7
|
)
|
|
$
|
-
|
|
|
$
|
0.1
|
|
|
$
|
8.7
|
|
|
$
|
858.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in millions)
|
|
March 31, 2012
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
Previously
Reported
|
|
|
Adjustments
|
|
|
As Adjusted
|
|
|
|
|
|
|
Spain
|
|
|
South
Africa
|
|
|
Poland
|
|
|
Tax
|
|
|
Other
|
|
|
Total
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
47.7
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
47.7
|
|
Accrued income taxes
|
|
|
6.8
|
|
|
|
(0.2
|
)
|
|
|
0.1
|
|
|
|
|
|
|
|
(0.3
|
)
|
|
|
0.1
|
|
|
|
(0.3
|
)
|
|
|
6.5
|
|
Accrued liabilities
|
|
|
57.0
|
|
|
|
|
|
|
|
|
|
|
|
0.7
|
|
|
|
|
|
|
|
-
|
|
|
|
0.7
|
|
|
|
57.7
|
|
Total current liabilities
|
|
|
111.5
|
|
|
|
(0.2
|
)
|
|
|
0.1
|
|
|
|
0.7
|
|
|
|
(0.3
|
)
|
|
|
0.1
|
|
|
|
0.4
|
|
|
|
111.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncurrent liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
250.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
250.7
|
|
Pension liabilities
|
|
|
34.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
34.6
|
|
Deferred compensation
|
|
|
9.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
9.5
|
|
Deferred income tax
|
|
|
1.5
|
|
|
|
|
|
|
|
13.2
|
|
|
|
-
|
|
|
|
|
|
|
|
0.1
|
|
|
|
13.3
|
|
|
|
14.8
|
|
Other long-term liabilities
|
|
|
19.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
19.5
|
|
Total noncurrent liabilities
|
|
|
315.8
|
|
|
|
-
|
|
|
|
13.2
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0.1
|
|
|
|
13.3
|
|
|
|
329.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
0.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
0.3
|
|
Additional paid in capital
|
|
|
97.8
|
|
|
|
|
|
|
|
(0.2
|
)
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
(0.2
|
)
|
|
|
97.6
|
|
Retained earnings
|
|
|
326.6
|
|
|
|
(2.8
|
)
|
|
|
(0.8
|
)
|
|
|
(1.5
|
)
|
|
|
0.3
|
|
|
|
0.1
|
|
|
|
(4.7
|
)
|
|
|
321.9
|
|
Accumulated other comprehensive income (loss)
|
|
|
(4.7
|
)
|
|
|
0.1
|
|
|
|
|
|
|
|
0.1
|
|
|
|
|
|
|
|
(0.2
|
)
|
|
|
|
|
|
|
(4.7
|
)
|
Less: Treasury stock
|
|
|
(1.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
(1.7
|
)
|
Total AMCOL shareholders' equity
|
|
|
418.3
|
|
|
|
(2.7
|
)
|
|
|
(1.0
|
)
|
|
|
(1.4
|
)
|
|
|
0.3
|
|
|
|
(0.1
|
)
|
|
|
(4.9
|
)
|
|
|
413.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling interest
|
|
|
4.5
|
|
|
|
|
|
|
|
(0.1
|
)
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
(0.1
|
)
|
|
|
4.4
|
|
Total equity
|
|
|
422.8
|
|
|
|
(2.7
|
)
|
|
|
(1.1
|
)
|
|
|
(1.4
|
)
|
|
|
0.3
|
|
|
|
(0.1
|
)
|
|
|
(5.0
|
)
|
|
|
417.8
|
|
Total Liabilities and Shareholders' Equity
|
|
$
|
850.1
|
|
|
$
|
(2.9
|
)
|
|
$
|
12.2
|
|
|
$
|
(0.7
|
)
|
|
$
|
-
|
|
|
$
|
0.1
|
|
|
$
|
8.7
|
|
|
$
|
858.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As noted in the table above, our retained earnings decreased by $4.7. This includes $5.3 decrease relating to the errors corrected in periods prior to and including December 31, 2011 (as reflected in our 2011 Form-10K/A), in addition to the $0.6 increase relating to the errors corrected in the three months ended March 31, 2012.
With regards to our consolidated statement of comprehensive income for the three months ended March 31, 2012, correcting these errors increased total comprehensive income by $0.4, reflecting the $0.6 increase to net income as previously discussed in addition to $0.2 of losses resulting from the foreign currency translation effect of the errors.
With regards to our consolidated statement of comprehensive income for the three months ended March 31, 2011, correcting these errors increased total comprehensive income by $0.8, reflecting the $0.9 increase to net income as previously disclosed in addition to $0.1 of losses resulting from the foreign currency translation effect of the errors.
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in millions)
The effect of correcting these errors in our condensed consolidated statements of cash flows for the three months ended March 31, 2012 and March 31, 2011 is as follows:
|
|
Three Months Ended March 31, 2012
|
|
|
|
Previously
Reported
|
|
|
Adjustments
|
|
|
As Adjusted
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) operating activities
|
|
$
|
20.6
|
|
|
$
|
(0.1
|
)
|
|
$
|
20.5
|
|
Net cash (used in) investing activities
|
|
|
(15.3
|
)
|
|
|
(0.1
|
)
|
|
|
(15.4
|
)
|
Net cash provided by (used in) financing activities
|
|
|
(12.1
|
)
|
|
|
(0.2
|
)
|
|
|
(12.3
|
)
|
Net increase (decrease) in cash and cash equivalents
|
|
|
(6.8
|
)
|
|
|
(0.4
|
)
|
|
|
(7.2
|
)
|
Cash and cash equivalents at beginning of period
|
|
|
23.7
|
|
|
|
0.4
|
|
|
|
24.1
|
|
Cash and cash equivalents at end of period
|
|
$
|
16.9
|
|
|
$
|
-
|
|
|
$
|
16.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2011
|
|
|
|
Previously
Reported
|
|
|
Adjustments
|
|
|
As Adjusted
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) operating activities
|
|
$
|
10.3
|
|
|
|
|
|
$
|
10.3
|
|
Net cash (used in) investing activities
|
|
|
(10.3
|
)
|
|
|
0.5
|
|
|
|
(9.8
|
)
|
Net cash provided by (used in) financing activities
|
|
|
(6.3
|
)
|
|
|
|
|
|
|
(6.3
|
)
|
Effect of foreign currency rate changes on cash
|
|
|
0.2
|
|
|
|
|
|
|
|
0.2
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
(6.1
|
)
|
|
|
0.5
|
|
|
|
(5.6
|
)
|
Cash and cash equivalents at beginning of period
|
|
|
27.3
|
|
|
|
(0.5
|
)
|
|
|
26.8
|
|
Cash and cash equivalents at end of period
|
|
$
|
21.2
|
|
|
$
|
-
|
|
|
$
|
21.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note 3:
|
EARNINGS PER SHARE
|
The following table provides further share information used in computing our earnings per share for the periods presented herein. Basic earnings per share was computed by dividing net income attributable to AMCOL shareholders by the weighted average number of common shares outstanding during each period. Diluted earnings per share was computed by dividing net income attributable to AMCOL shareholders by the weighted average common shares outstanding after consideration of the dilutive effect of stock compensation awards outstanding during each period.
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in millions)
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2012
|
|
|
2011
|
|
Weighted average number of common shares outstanding
|
|
|
31,979,894
|
|
|
|
31,515,395
|
|
Dilutive impact of stock based compensation
|
|
|
311,864
|
|
|
|
476,464
|
|
Weighted average number of common and common equivalent shares outstanding for the period
|
|
|
32,291,758
|
|
|
|
31,991,859
|
|
Number of common shares outstanding at the end of the period
|
|
|
31,891,418
|
|
|
|
31,466,023
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of anti-dilutive shares excluded from the computation of diluted earnings per share
|
|
|
591,028
|
|
|
|
122,822
|
|
|
|
|
|
|
|
|
|
|
Note 4:
|
ADDITIONAL BALANCE SHEET INFORMATION
|
Our inventories at March 31, 2012 and December 31, 2011 are comprised of the following components:
|
|
March 31,
|
|
|
December 31,
|
|
|
|
2012
Restated
|
|
|
2011
Restated
|
|
Crude stockpile inventories
|
|
$
|
56.8
|
|
|
$
|
53.4
|
|
In-process and finished goods inventories
|
|
|
66.5
|
|
|
|
65.0
|
|
Other raw material, container, and supplies inventories
|
|
|
25.0
|
|
|
|
25.9
|
|
|
|
$
|
148.3
|
|
|
$
|
144.3
|
|
|
|
|
|
|
|
|
|
|
We mine various minerals using a surface mining process that requires the removal of overburden. In certain areas and under various governmental regulations, we are obligated to restore the land comprising each mining site to its original condition at the completion of the mining activity. We include an estimate of this reclamation liability in our condensed consolidated balance sheets; it is adjusted to reflect the passage of time and changes in estimated future cash outflows. A reconciliation of the activity within our reclamation liability is as follows:
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2012
|
|
|
2011
Restated
|
|
Balance at beginning of period
|
|
$
|
9.3
|
|
|
$
|
8.0
|
|
Settlement of obligations
|
|
|
(1.3
|
)
|
|
|
(0.5
|
)
|
Liabilities incurred and accretion expense
|
|
|
1.8
|
|
|
|
1.0
|
|
Foreign currency
|
|
|
0.1
|
|
|
|
-
|
|
Balance at end of period
|
|
$
|
9.9
|
|
|
$
|
8.5
|
|
|
|
|
|
|
|
|
|
|
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in millions)
Note 5:
|
BUSINESS SEGMENT INFORMATION
|
As previously mentioned, we operate in five segments. We determine our operating segments based on the discrete financial information that is regularly evaluated by our chief operating decision maker, our President and Chief Executive Officer, in deciding how to allocate resources and in assessing performance. Intersegment sales are not material and are eliminated in the corporate segment. Our reportable measure of profit or loss for each segment is operating profit, which is defined as net sales less cost of sales and selling, general and administrative expenses related to a segment’s operations. The costs deducted to arrive at operating profit do not include several items, such as net interest expense or income taxes. Segment assets are those assets used in the operations of that segment. Corporate assets include assets used in the operation of this segment as well as those used by or shared amongst our segments, including certain cash and equivalent assets, certain fixed assets, assets associated with certain employee benefit plans, and other miscellaneous assets.
The following tables set forth certain financial information by segment:
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2012
Restated
|
|
|
2011
Restated
|
|
Net sales:
|
|
|
|
|
|
|
Minerals and materials
|
|
$
|
125.2
|
|
|
$
|
115.8
|
|
Environmental
|
|
|
51.0
|
|
|
|
51.7
|
|
Oilfield services
|
|
|
55.3
|
|
|
|
45.6
|
|
Transportation
|
|
|
11.1
|
|
|
|
12.7
|
|
Intersegment sales
|
|
|
(7.1
|
)
|
|
|
(7.2
|
)
|
Total
|
|
$
|
235.5
|
|
|
$
|
218.6
|
|
|
|
|
|
|
|
|
|
|
Operating profit (loss):
|
|
|
|
|
|
|
|
|
Minerals and materials
|
|
$
|
21.5
|
|
|
$
|
16.0
|
|
Environmental
|
|
|
0.9
|
|
|
|
1.8
|
|
Oilfield services
|
|
|
4.8
|
|
|
|
5.8
|
|
Transportation
|
|
|
0.2
|
|
|
|
0.5
|
|
Corporate
|
|
|
(6.0
|
)
|
|
|
(5.1
|
)
|
Total
|
|
$
|
21.4
|
|
|
$
|
19.0
|
|
|
|
|
|
|
|
|
|
|
|
|
As of Mar. 31, 2012
|
|
|
As of Dec. 31, 2011
|
|
Assets:
|
|
|
|
|
|
|
|
|
Minerals and materials
|
|
$
|
437.1
|
|
|
$
|
430.8
|
|
Environmental
|
|
|
162.8
|
|
|
|
159.4
|
|
Oilfield services
|
|
|
189.9
|
|
|
|
194.7
|
|
Transportation
|
|
|
3.9
|
|
|
|
3.9
|
|
Corporate
|
|
|
65.1
|
|
|
|
60.3
|
|
Total
|
|
$
|
858.8
|
|
|
$
|
849.1
|
|
|
|
|
|
|
|
|
|
|
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in millions)
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2012
Restated
|
|
|
2011
Restated
|
|
Depreciation, depletion and amortization:
|
|
|
|
|
|
|
Minerals and materials
|
|
$
|
4.6
|
|
|
$
|
4.6
|
|
Environmental
|
|
|
1.4
|
|
|
|
1.3
|
|
Oilfield services
|
|
|
4.0
|
|
|
|
3.0
|
|
Transportation
|
|
|
-
|
|
|
|
-
|
|
Corporate
|
|
|
0.7
|
|
|
|
0.6
|
|
Total
|
|
$
|
10.7
|
|
|
$
|
9.5
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures:
|
|
|
|
|
|
|
|
|
Minerals and materials
|
|
$
|
6.5
|
|
|
$
|
2.8
|
|
Environmental
|
|
|
2.6
|
|
|
|
0.7
|
|
Oilfield services
|
|
|
6.0
|
|
|
|
6.4
|
|
Transportation
|
|
|
-
|
|
|
|
-
|
|
Corporate
|
|
|
1.5
|
|
|
|
0.5
|
|
Total
|
|
$
|
16.6
|
|
|
$
|
10.4
|
|
|
|
|
|
|
|
|
|
|
Research and development (income) expense:
|
|
|
|
|
|
|
|
|
Minerals and materials
|
|
$
|
1.7
|
|
|
$
|
1.6
|
|
Environmental
|
|
|
0.6
|
|
|
|
0.5
|
|
Oilfield services
|
|
|
0.1
|
|
|
|
-
|
|
Corporate
|
|
|
0.1
|
|
|
|
(0.2
|
)
|
Total
|
|
$
|
2.5
|
|
|
$
|
1.9
|
|
|
|
|
|
|
|
|
|
|
Note 6:
|
EMPLOYEE BENEFIT PLANS
|
Our net periodic benefit cost for our defined benefit pension plan was as follows:
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2012
|
|
|
2011
|
|
Service cost
|
|
$
|
0.4
|
|
|
$
|
0.4
|
|
Interest cost
|
|
|
0.7
|
|
|
|
0.6
|
|
Expected return on plan assets
|
|
|
(0.6
|
)
|
|
|
(0.7
|
)
|
Amortization of acturial loss
|
|
|
0.2
|
|
|
|
-
|
|
Net periodic benefit cost
|
|
$
|
0.7
|
|
|
$
|
0.3
|
|
|
|
|
|
|
|
|
|
|
As previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2011, we expect to contribute $1.7 to our pension plan in 2012, of which $0.8 was contributed in the three months ended March 31, 2012.
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in millions)
Our effective tax rate for the three months ended March 31, 2012 and 2011 was 26.5% and 23.8%, respectively. For both periods, the rate differs from the U.S. federal statutory rate of 35.0% largely due to depletion deductions, changes in tax reserves in 2011, and differences in local tax rates on the income from our foreign subsidiaries.
In the normal course of business, we are subject to examination by taxing authorities throughout the world. With few exceptions, we are no longer subject to income tax examinations by tax authorities for years prior to 2004. In general, the United States Internal Revenue Service (“IRS”) has examined our federal income tax returns for all years through 2009.
Note 8:
|
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
|
As a multinational corporation with operations throughout the world, we are subject to certain market risks. We use a variety of practices to manage these market risks, including, when considered appropriate, derivative financial instruments. We use derivative financial instruments only for risk management and not for trading or speculative purposes.
The following table sets forth the fair values of our derivative instruments and where they are recorded within our condensed consolidated balance sheet:
|
|
|
Fair Value as of
|
|
Liability Derivatives
|
Balance Sheet Location
|
|
March 31, 2012
|
|
|
December 31, 2011
|
|
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
Interest rate swaps
|
Other long-term liabilities
|
|
$
|
(8.7
|
)
|
|
$
|
(9.0
|
)
|
|
|
|
|
|
|
|
|
|
|
Cash flow hedges
|
|
Amount of Gain or (Loss)
|
|
|
|
Recognized in Other
|
|
|
|
(Effective Portion)
|
|
Derivatives in Cash Flow Hedging Relationships
|
|
Three Months Ended March
31,
|
|
|
|
2012
|
|
|
2011
Restated
|
|
Interest rate swaps, net of tax
|
|
$
|
0.2
|
|
|
$
|
0.5
|
|
|
|
|
|
|
|
|
|
|
We use interest rate swaps to manage floating interest rate risk on debt securities. Interest rate differentials are paid or received on these arrangements over the life of the swap. As of March 31, 2012 and 2011, we had interest rate swaps outstanding which effectively hedge the variable interest rate on $30.0 of our senior notes to a fixed rate of 5.6% per annum and $33.0 of our borrowings under our revolving credit agreement to a fixed rate of 3.3% per annum, plus credit spread.
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in millions)
Other
We are exposed to potential gains or losses from foreign currency fluctuations affecting net investments and earnings denominated in foreign currencies. We are particularly sensitive to currency exchange rate fluctuations between the following currency pairs: a) the Euro to the British pound (GBP) and the Polish Zloty (PLN), b) the South African Rand (ZAR) to the USD and the Australian dollar (AUD), c) the GBP to the Danish kroner (DKK) and the Swiss franc (SEK), and d) the USD to the Indian rupee (INR), the Thai baht (THB), and the Turkish lira (TRY). When considered appropriate, we enter into foreign exchange derivative contracts to mitigate the risk of fluctuations on these exposures.
We have not designated our foreign currency derivative contracts for hedge accounting treatment and therefore, changes in fair value of these contracts are recorded in earnings as follows:
|
|
|
Amount of Gain or
|
|
|
|
|
(Loss) Recognized in
|
|
|
|
|
Income on Derivatives
|
|
Derivatives Not Designated as Hedging Instruments
|
Location of Gain
|
|
Three Months Ended
|
|
|
or (Loss)
|
|
March 31,
|
|
|
Recognized in
|
|
|
|
|
|
|
|
Income on
|
|
2012
|
|
|
2011
|
|
|
Derivatives
|
|
Restated
|
|
|
Restated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency exchange contracts
|
Other, net
|
|
$
|
(0.4
|
)
|
|
$
|
(1.1
|
)
|
|
|
|
|
|
|
|
|
|
|
We did not have any significant foreign exchange derivative instruments outstanding as of March 31, 2012 or December 31, 2011.
Note 9:
|
FAIR VALUE MEASUREMENTS
|
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Our calculation of the fair value of derivative instruments includes several assumptions. The fair value hierarchy prioritizes these input assumptions in the following three broad levels:
Level 1 – Valuation is based on quoted prices (unadjusted) in active markets for identical assets or liabilities we have the ability to access at the measurement date.
Level 2 – Valuation is based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and model based valuations for which all significant inputs are observable in the market.
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in millions)
Level 3 – Valuation is based on model based techniques that use unobservable inputs for the asset or liability. These inputs reflect our own assumption about the assumption market participants would use in pricing the asset or liability.
The following tables categorize our fair value instruments, measured on a recurring basis, according to the assumptions used to calculate those values:
|
|
|
|
|
Fair Value Measurements Using
|
|
|
|
Asset /
(Liability)
Balance at
|
|
|
Quoted Prices in
Active Markets
for Identical
Assets
|
|
|
Significant
Other
Observable
Inputs
|
|
|
Significant
Unobservable
Inputs
|
|
Description
|
|
3/31/2012
|
|
|
(Level 1)
|
|
|
(Level 2)
|
|
|
(Level 3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swaps
|
|
$
|
(8.7
|
)
|
|
$
|
-
|
|
|
$
|
(8.7
|
)
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available-for-sale securities
|
|
|
2.9
|
|
|
|
2.9
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred compensation plan assets
|
|
|
9.0
|
|
|
|
-
|
|
|
|
9.0
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary pension plan assets
|
|
|
8.1
|
|
|
|
-
|
|
|
|
8.1
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements Using
|
|
|
|
Asset /
(Liability)
Balance at
|
|
|
Quoted Prices in
Active Markets
for Identical
Assets
|
|
|
Significant
Other
Observable
Inputs
|
|
|
Significant
Unobservable
Inputs
|
|
Description
|
|
12/31/2011
|
|
|
(Level 1)
|
|
|
(Level 2)
|
|
|
(Level 3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swaps
|
|
$
|
(9.0
|
)
|
|
$
|
-
|
|
|
$
|
(9.0
|
)
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available-for-sale securities
|
|
|
3.8
|
|
|
|
3.8
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred compensation plan assets
|
|
|
8.0
|
|
|
|
-
|
|
|
|
8.0
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary pension plan assets
|
|
|
7.6
|
|
|
|
-
|
|
|
|
7.6
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swaps are valued using discounted cash flows. The key input used is the LIBOR swap rate, which is observable at commonly quoted intervals for the full term of the swap. Available-for-sale securities are valued using quoted market prices. Deferred compensation and supplemental pension plan assets are valued using quoted prices for similar assets in active markets.
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in millions)
Note 10:
|
NONCONTROLLING INTEREST
|
In January 2011, we acquired the remaining noncontrolling interest in Volclay South Africa (Proprietary) Limited, a part of our chromite business, for approximately $5.6.
In February 2011, we sold 26% of our interest in Batlhako Mining Limited (“Batlhako”) to Vengawave (Proprietary) Limited, which is a Black Economic Empowerment enterprise (a “BEE”) in the Republic of South Africa. Batlhako is our subsidiary dedicated strictly to mining chromite ore and selling it to one of our other subsidiaries for further processing and sale to the end customer. South African law requires that we have a BEE as a partner in our mining operations and this transaction was consummated to comply with those regulations.
The following table sets forth the effects of these transactions on equity attributable to AMCOL’s shareholders:
|
|
Three Months Ended March 31,
|
|
|
|
2012
Restated
|
|
|
2011
Restated
|
|
Net income attributable to AMCOL shareholders
|
|
$
|
13.4
|
|
|
$
|
13.1
|
|
Transfers from noncontrolling interest:
|
|
|
|
|
|
|
|
|
Decrease in additional paid-in capital for purchase of the remaining noncontrolling interest in Volclay South Africa (Proprietary) Limited
|
|
|
-
|
|
|
|
(5.4
|
)
|
Decrease in additional paid-in capital for transfer of 26% interest in Batlhako
|
|
|
-
|
|
|
|
(3.4
|
)
|
Change from net income attributable to AMCOL shareholders and transfers from noncontrolling interest
|
|
$
|
13.4
|
|
|
$
|
4.3
|
|
|
|
|
|
|
|
|
|
|
We are party to a number of lawsuits arising in the normal course of business. Since the mid-1980s, we and/or our subsidiaries have been named as one of a number of defendants in product liability lawsuits relating to the minor free-silica content of our bentonite products used in the metalcasting industry. The plaintiffs in these lawsuits are primarily employees of our foundry customers. Our oilfield services segment is also party to two lawsuits alleging damages caused by our coiled tubing operations in Louisiana; one lawsuit alleges damages of $28 and the other of $9. We do not believe that any pending litigation will have a material adverse effect on our consolidated financial statements.