Notes to Consolidated Financial Statements
(In millions, except share and per share amounts)
|
(1)
|
Summary of Significant Accounting Policies
|
Recently Adopted Accounting Pronouncements
In September 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2011-08, codified in Accounting Standards Codification (“ASC”) Topic 350 –
Intangibles – Goodwill and Other
. ASU 2011-08 simplifies how entities test goodwill for impairment. It permits an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. This assessment can then be used to determine whether it is necessary to perform the two-step goodwill impairment test described in Topic 350. The adoption of this ASU on January 1, 2012 did not have a material impact on our financial statements.
In June 2011, the FASB issued ASU 2011-05, codified in ASC Topic 220 –
Comprehensive Income
to increase the prominence of items reported in other comprehensive income (“OCI”). This ASU requires presentation of items of net income, items of OCI and total comprehensive income either in one continuous statement or two separate but consecutive statements. This ASU does not change the items which must be reported in OCI, how such items are measured or when they must be reclassified to net income. The FASB subsequently deferred the effective date of certain provisions of this ASU pertaining to the reclassification of items out of accumulated other comprehensive income, pending the issuance of further guidance on that matter. The adoption of this ASU on January 1, 2012 did not have a material impact on our financial statements.
In May 2011, the FASB issued ASU 2011-04, codified in ASC Topic 820 –
Fair Value Measurements
. This ASU includes amendments that clarify the intent about the application of existing fair value measurement requirements. Specifically, it requires additional disclosures for fair value measurements that are based on significant inputs. The adoption of this ASU on January 1, 2012 did not have a material impact on our financial statements.
Accounting Pronouncements not yet adopted
In February 2013, the FASB issued ASU 2013-02 codified in ASC Topic 220 –
Comprehensive Income
which adds new disclosure requirements for items reclassified out of accumulated other comprehensive income. This ASU requires entities to disclose additional information about reclassification adjustments, including changes in accumulated other comprehensive income balances by component and significant items reclassified out of accumulated other comprehensive income. This ASU will primarily impact our disclosures for reclassification adjustments and as such is not expected to have a material impact on our financial statements when we adopt it on January 1, 2013.
In July 2012, the FASB issued ASU 2012-02, codified in ASC Topic 350
– Intangibles – Goodwill and Other
. This ASU gives entities the option to first assess the qualitative factors to determine whether the existence of events and circumstances indicates that it is more likely than not that an indefinite-lived intangible asset is impaired. If impairment is indicated, the fair value of the indefinite-lived intangible asset should be determined and the quantitative impairment test should be performed by comparing the fair value with the carrying value in accordance with subtopic 350-30. If impairment is not indicated, the entity is not required to take further action. The ASU will not have a material impact on our financial statements when we adopt it on January 1, 2013.
Principles of Consolidation
The consolidated financial statements include the accounts of our domestic and foreign subsidiaries as well as variable interest entities for which we have determined that we are the primary beneficiary. We consolidate all subsidiaries in which we own more than 50% of their equity. We use the equity method of accounting to incorporate the results of our investments in companies in which we have significant influence.
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(In millions, except share and per share amounts)
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 77% of the revenue elimination in the years ended December 31, 2012 and 2011, respectively, and 100% of the revenue elimination in the year ended December 31, 2010 represent the elimination of shipping revenues between our transportation segment and its domestic sister companies.
Segments
In the fourth quarter of 2012, we renamed three of our segments to better reflect their business operations. The minerals and materials, environmental, and oilfield services segments are now named performance materials, construction technologies, and energy services, respectively. We also restructured some of our product lines within the performance materials segment by including the results of our agriculture related operations in our specialty materials product line as opposed to our basic minerals product line where it had previously been included.
The composition of consolidated revenues by segment is as follows:
|
|
|
Percentage of Net Sales
|
|
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
Performance materials
|
|
|
50
|
%
|
|
|
51
|
%
|
|
|
50
|
%
|
|
Construction technologies
|
|
|
23
|
%
|
|
|
27
|
%
|
|
|
27
|
%
|
|
Energy services
|
|
|
26
|
%
|
|
|
21
|
%
|
|
|
19
|
%
|
|
Transportation
|
|
|
4
|
%
|
|
|
6
|
%
|
|
|
6
|
%
|
|
Intersegment sales
|
|
|
-3
|
%
|
|
|
-5
|
%
|
|
|
-2
|
%
|
|
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Further descriptions of our products, principal markets and the relative significance of our segment operations are included in Note 2.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the amount of assets, liabilities, revenues and expenses reported in our financial statements as well as certain disclosures contained therein. Actual results may differ from those estimates.
Revenue Recognition
We recognize revenue from sales of products when title passes to the customer, the customer assumes the risks and rewards of ownership, and collectibility is reasonably assured; generally, this occurs when we ship product to customers. We record allowances for discounts, rebates, and estimated returns at the time of sale and report these as reductions to revenue. We generate some sales through independent, third-party representatives and record the commission paid to the representative as an expense within selling, general and administrative expenses.
We recognize revenue for freight delivery services within our transportation segment when the service is provided. We accrue amounts payable for purchased transportation, commissions and insurance when the related revenue is recognized.
Service and rental revenues are primarily generated in our construction technologies and energy services segments. We recognize these revenues in the period such services are performed and collectibility is reasonably assured.
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(In millions, except share and per share amounts)
We record revenue from long-term construction contracts using the percentage-of-completion method. Progress is generally based upon costs incurred to date as compared to the total estimated costs to complete the work under the contract or the amount of product installed in relation to the total amount expected to be installed. All known or anticipated losses on contracts are provided when they become evident. Cost adjustments that are in the process of being negotiated with customers for extra work or changes in scope of work are included in revenue when collection is reasonably assured.
Translation of Foreign Currencies
Foreign entities generally utilize their local currency as the functional currency. We record gains and losses resulting from foreign currency transactions in net income, and we reflect the adjustments resulting from the translation of financial statements into our reporting currency during consolidation as a component of accumulated other comprehensive income within equity. The assets and liabilities of subsidiaries located outside of the United States are translated into U.S. dollars at the rates of exchange at the balance sheet dates. The statements of operations are translated using average exchange rates throughout the period.
Cash Equivalents
We classify all short-term, highly liquid investments with original maturities of three months or less as cash and cash equivalents.
Inventories
Inventories are valued at the lower of cost or
net realizable
value. Cost is determined by the first-in, first-out (FIFO) method. Mineral exploration costs are expensed as incurred.
Receivables and Allowance for Doubtful Accounts
We carry our receivables at their face amount less an allowance for bad debts. We establish the allowance for bad debts based on a review of several factors, including historical collection experience, current aging status of the customer accounts, and the financial condition of our customers.
Property, Plant, Equipment, and Mineral Rights and Reserves
Property, plant, equipment, and mineral rights and reserves are carried at cost less accumulated depreciation and depletion. Depreciation is computed using the straight-line method for substantially all of the assets. Certain other assets, primarily field and stockpile related equipment and mineral rights and reserves, are depreciated on the units-of-production method.
Goodwill
Goodwill represents the excess of the purchase price over the fair value of the net assets of acquired businesses. Fair value reflects the price a market participant would be willing to pay in a potential sale of the reporting unit. We review the carrying value of goodwill in each reporting unit for impairment annually as of October 1
st
or more frequently if indications exist which may suggest the carrying value is not recoverable. Such indicators may include deterioration in general economic conditions, negative developments in equity and credit market, adverse changes in the market in which we operate, increase in input costs that have a negative impact on earnings and cash flows, or a trend of negative or declining cash flows over multiple periods, among others.
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(In millions, except share and per share amounts)
In conducting our 2012 annual goodwill impairment assessment, we relied on both the qualitative and quantitative assessment methodologies.
For the reporting units assessed using the qualitative method, we identified various events and circumstances (or factors) that would affect the estimated fair value of our reporting units and determined the level of impact a particular factor would have on the estimated fair value. In addition, we considered the results of the most recent two-step quantitative impairment test completed for each reporting unit and compared the weighted average cost of capital between the current and prior years for each reporting unit. We concluded that it was not more likely than not that any of our reporting units’ fair value under qualitative assessment were less than their carrying value. As such, no further analysis was required.
For the reporting unit assessed using quantitative method, we performed a two-step quantitative impairment test. We used a discounted cash flow model (income approach) to estimate the fair value of our reporting unit as we believe that the forecasted cash flows are the best indicator of such fair value. A number of significant assumptions and estimates, including expectations of our reporting unit’s business performance, financial results, useful life of assets, discount rate, and comparable market data, were involved in developing the discounted cash flow model. We concluded that the fair value was not less than the carrying value and no further analysis was required.
Other Intangible Assets
Other intangible assets with a finite useful life are amortized on the straight-line method over the expected periods to be benefited.
Impairment of Long-Lived Assets
We review the carrying values of long-lived assets, including property, plant and equipment and intangible assets with a finite useful life whenever facts and circumstances indicate that the assets may be impaired. Recoverability of assets to be held and used is measured by comparing the carrying amount of an asset to the future net undiscounted cash flows we expect it to generate. If we consider an asset to be impaired, we record an impairment charge equal to the amount by which the carrying value of the asset exceeds the fair value. We report an asset to be disposed of at the lower of its carrying value or fair value, less costs of disposal.
In the case of intangible assets with indefinite lives, we review them annually for impairment. This review involves comparing the fair value of the intangible asset with its carrying amount. If its carrying amount exceeds its fair value, we recognize an impairment loss equal to that excess.
Available-for-Sale Securities
We record available-for-sale securities at their fair value using quoted market prices. We report their unrealized gains and losses, net of applicable taxes, as a component of accumulated other comprehensive income within equity. We have one equity security that we have accounted for as an available-for-sale security as of December 31, 2012 and 2011.
Income Taxes
We recognize deferred tax assets and liabilities relating to the future tax consequences of differences between the financial statement carrying value of existing assets and liabilities and their respective tax values. We measure deferred tax assets and liabilities using tax rates in effect in the years in which those temporary differences are expected to be recovered or settled. We recognize the effect that changes in tax rates have on deferred tax assets and liabilities in income in the period that the change is enacted. Valuation allowances are recorded to reduce deferred tax assets to amounts that are more likely than not to be realized. We classify interest and penalties associated with income taxes, including uncertain tax positions, within the income tax expense line item of our Consolidated Statement of Operations.
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(In millions, except share and per share amounts)
Freight and Sales Taxes
We report amounts charged to customers for shipping and handling fees as revenues and we report amounts incurred for these costs within cost of sales in the consolidated statements of operations (i.e. gross presentation with revenues and cost of sales). Also, we report amounts charged to customers for sales taxes and the related costs incurred for sales tax remittances to governmental agencies within net sales in the Consolidated Statement of Operations (i.e. net presentation within revenues).
Product Liability & Warranty Expenses
We report expenses incurred for warranty and product liability costs in general, selling and administrative expenses in our Consolidated Statement of Operations. Our warranty accrual is based on known warranty issues as of the balance sheet date as well as a reserve for unidentified claims based on historical experience.
Legal Fees
We report expenses for fees, including legal costs associated with loss contingencies, when services are performed.
Land Reclamation
We mine land for various minerals using a surface-mining process that requires the removal of overburden. In many instances, we are obligated to restore the land upon completion of the mining activity. As we remove overburden, we recognize this liability for land reclamation based on the estimated fair value of the obligation. We adjust the obligation to reflect the passage of time and changes in estimated future cash outflows.
Research and Development
Research and development costs are expensed as incurred within selling, general and administrative expenses.
Earnings per Share
Basic earnings per share is computed by dividing net income attributable to AMCOL shareholders by the weighted average number of common shares outstanding. Diluted earnings per share is similarly computed, except the denominator is increased to include the dilutive effects of stock compensation awards and other share equivalents. Stock compensation awards are antidilutive and therefore excluded from our diluted earnings per share calculation when their exercise would result in a net decrease in the weighted average number of common shares outstanding. A reconciliation between the shares used to compute basic and diluted earnings per share follows:
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(In millions, except share and per share amounts)
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
Weighted average common shares outstanding for the year
|
|
|
32,050,538
|
|
|
|
31,708,949
|
|
|
|
31,178,813
|
|
|
Dilutive impact of stock equivalents
|
|
|
347,827
|
|
|
|
436,824
|
|
|
|
368,778
|
|
|
Weighted average common and common equivalent shares for the year
|
|
|
32,398,365
|
|
|
|
32,145,773
|
|
|
|
31,547,591
|
|
|
Common shares outstanding at December 31
|
|
|
32,184,110
|
|
|
|
31,728,969
|
|
|
|
31,032,791
|
|
Weighted average anti-dilutive shares excluded from the computation of diluted
earnings per share
|
|
|
402,485
|
|
|
|
189,768
|
|
|
|
470,097
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-Based Compensation
We account for stock-based compensation using the grant date fair value, which is based on the Black-Scholes option-pricing model. We recognize compensation cost over the requisite service period, which is generally the vesting period of the award.
Derivative Instruments and Hedging Activities
From time to time, we use derivative financial instruments to manage exposures to changes in interest rates and foreign currency exchange rates. We do not use derivative instruments for trading or other speculative purposes. We recognize our derivative instruments as either assets or liabilities in the balance sheet at their fair value. Our recognition of changes in the fair value (i.e. gains and losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and the type of that relationship. Hedges designated as cash flow hedges result in the changes in fair value being recorded in accumulated other comprehensive income. Changes in the fair value of derivative financial instruments for which hedge accounting is not applied, are recorded within Other, net within our Consolidated Statement of Operations.
|
(2)
|
Segment, Geographic, and Market Information
|
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. 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 or income tax expense.
Our five segments are as follows:
|
|
·
|
Performance materials - mines, processes and distributes minerals and products for use in various industrial and consumer markets, including metalcasting, pet care, laundry care, and drilling industries;
|
|
|
·
|
Construction technologies - provides services relating to and processes and distributes clay-based and other products for use as a moisture barrier in commercial construction, landfill liners and in a variety of other industrial and commercial applications;
|
|
|
·
|
Energy services - provides a variety of services and equipment rentals for both onshore and offshore applications to customers in the oil and natural gas industry;
|
|
|
·
|
Transportation - includes a long-haul trucking business and a freight brokerage business that provides services domestically to our subsidiaries as well as third-party customers; and
|
|
|
·
|
Corporate – intersegment sales are not material and are eliminated in our corporate segment. These are most notably sales between our transportation segment and our performance materials and construction technologies segments as well as sales between our performance materials segment to our construction technologies and energy services segments. Corporate segment also includes expenses associated with certain research and development, management, benefits and information technology activities.
|
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(In millions, except share and per share amounts)
Segment assets are those assets used within each 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 cash equivalents, fixed assets, assets associated with certain employee benefit plans, and other miscellaneous assets.
The following table sets forth certain financial information as of and for the years ended December 31, 2012, 2011 and 2010:
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
Net sales:
|
|
|
|
|
|
|
|
|
|
|
Performance materials
|
|
$
|
491.9
|
|
|
$
|
476.7
|
|
|
$
|
416.5
|
|
|
Construction technologies
|
|
|
223.1
|
|
|
|
251.9
|
|
|
|
225.5
|
|
|
Energy services
|
|
|
257.3
|
|
|
|
194.7
|
|
|
|
153.6
|
|
|
Transportation
|
|
|
44.0
|
|
|
|
54.1
|
|
|
|
52.2
|
|
|
Intersegment sales
|
|
|
(30.7
|
)
|
|
|
(33.6
|
)
|
|
|
(21.5
|
)
|
|
Total
|
|
|
985.6
|
|
|
|
943.8
|
|
|
|
826.3
|
|
|
Operating profit (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance materials
|
|
$
|
76.3
|
|
|
$
|
67.1
|
|
|
$
|
53.5
|
|
|
Construction technologies
|
|
|
15.6
|
|
|
|
17.3
|
|
|
|
20.4
|
|
|
Energy services
|
|
|
28.7
|
|
|
|
21.3
|
|
|
|
13.7
|
|
|
Transportation
|
|
|
0.8
|
|
|
|
2.2
|
|
|
|
2.4
|
|
|
Corporate
|
|
|
(23.3
|
)
|
|
|
(21.8
|
)
|
|
|
(21.0
|
)
|
|
Total
|
|
|
98.1
|
|
|
|
86.1
|
|
|
|
69.0
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance materials
|
|
$
|
454.0
|
|
|
$
|
430.8
|
|
|
$
|
410.4
|
|
|
Construction technologies
|
|
|
157.6
|
|
|
|
159.4
|
|
|
|
161.0
|
|
|
Energy services
|
|
|
225.8
|
|
|
|
194.7
|
|
|
|
172.5
|
|
|
Transportation
|
|
|
4.0
|
|
|
|
3.9
|
|
|
|
4.0
|
|
|
Corporate
|
|
|
69.2
|
|
|
|
60.3
|
|
|
|
59.4
|
|
|
Total
|
|
|
910.6
|
|
|
|
849.1
|
|
|
|
807.3
|
|
|
Depreciation, depletion and amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance materials
|
|
$
|
19.6
|
|
|
$
|
20.6
|
|
|
$
|
17.2
|
|
|
Construction technologies
|
|
|
5.5
|
|
|
|
5.4
|
|
|
|
5.4
|
|
|
Energy services
|
|
|
17.1
|
|
|
|
13.3
|
|
|
|
11.9
|
|
|
Transportation
|
|
|
0.1
|
|
|
|
0.1
|
|
|
|
-
|
|
|
Corporate
|
|
|
3.0
|
|
|
|
2.7
|
|
|
|
1.8
|
|
|
Total
|
|
|
45.3
|
|
|
|
42.1
|
|
|
|
36.3
|
|
|
Capital expenditures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance materials
|
|
$
|
29.4
|
|
|
$
|
27.3
|
|
|
$
|
29.7
|
|
|
Construction technologies
|
|
|
8.3
|
|
|
|
8.3
|
|
|
|
2.6
|
|
|
Energy services
|
|
|
31.5
|
|
|
|
23.1
|
|
|
|
13.2
|
|
|
Transportation
|
|
|
0.1
|
|
|
|
0.2
|
|
|
|
0.1
|
|
|
Corporate
|
|
|
5.2
|
|
|
|
2.1
|
|
|
|
1.7
|
|
|
Total
|
|
|
74.5
|
|
|
|
61.0
|
|
|
|
47.3
|
|
|
Research and development expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance materials
|
|
$
|
7.2
|
|
|
$
|
6.5
|
|
|
$
|
5.9
|
|
|
Construction technologies
|
|
|
2.3
|
|
|
|
2.3
|
|
|
|
2.3
|
|
|
Energy services
|
|
|
0.9
|
|
|
|
0.2
|
|
|
|
0.7
|
|
|
Corporate
|
|
|
-
|
|
|
|
0.1
|
|
|
|
0.3
|
|
|
Total
|
|
|
10.4
|
|
|
|
9.1
|
|
|
|
9.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(In millions, except share and per share amounts)
The following table sets forth certain geographic financial information as of and for the three years ending December 31
st
. EMEA includes the European, Middle East and African geographic regions. Geographic sales and operating profit are determined based on origin of the sale as opposed to destination of the sale. Inter-regional sales and operating profit are eliminated in Americas.
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
Sales to unaffiliated customers shipped from:
|
|
|
|
|
|
|
|
|
|
|
Americas
|
|
$
|
630.7
|
|
|
$
|
590.0
|
|
|
$
|
516.9
|
|
|
EMEA
|
|
|
191.6
|
|
|
|
220.1
|
|
|
|
185.6
|
|
|
Asia Pacific
|
|
|
163.3
|
|
|
|
133.7
|
|
|
|
123.8
|
|
|
Total
|
|
|
985.6
|
|
|
|
943.8
|
|
|
|
826.3
|
|
|
Operating profit from sales from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
|
$
|
65.5
|
|
|
$
|
57.5
|
|
|
$
|
45.8
|
|
|
EMEA
|
|
|
10.4
|
|
|
|
10.3
|
|
|
|
5.6
|
|
|
Asia Pacific
|
|
|
22.2
|
|
|
|
18.3
|
|
|
|
17.6
|
|
|
Total
|
|
|
98.1
|
|
|
|
86.1
|
|
|
|
69.0
|
|
|
Accounts receivable in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
|
$
|
109.9
|
|
|
$
|
112.3
|
|
|
$
|
106.0
|
|
|
EMEA
|
|
|
45.3
|
|
|
|
51.9
|
|
|
|
46.5
|
|
|
Asia Pacific
|
|
|
47.5
|
|
|
|
40.2
|
|
|
|
37.3
|
|
|
Total
|
|
|
202.7
|
|
|
|
204.4
|
|
|
|
189.8
|
|
|
Property, plant, equipment, and mineral rights and reserves in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
|
$
|
134.8
|
|
|
$
|
116.0
|
|
|
$
|
107.7
|
|
|
EMEA
|
|
|
112.3
|
|
|
|
108.7
|
|
|
|
114.3
|
|
|
Asia Pacific
|
|
|
54.8
|
|
|
|
48.8
|
|
|
|
49.7
|
|
|
Total
|
|
|
301.9
|
|
|
|
273.5
|
|
|
|
271.7
|
|
|
Identifiable assets in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
|
$
|
448.3
|
|
|
$
|
420.4
|
|
|
$
|
428.7
|
|
|
EMEA
|
|
|
303.3
|
|
|
|
289.4
|
|
|
|
265.5
|
|
|
Asia Pacific
|
|
|
159.0
|
|
|
|
139.3
|
|
|
|
113.1
|
|
|
Total
|
|
|
910.6
|
|
|
|
849.1
|
|
|
|
807.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales by product line for each fiscal year are as follows:
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
Metalcasting
|
|
$
|
265.5
|
|
|
$
|
247.3
|
|
|
$
|
196.7
|
|
|
Oilfield services
|
|
|
257.3
|
|
|
|
194.7
|
|
|
|
153.6
|
|
|
Specialty materials
|
|
|
106.6
|
|
|
|
116.8
|
|
|
|
112.7
|
|
|
Lining technologies
|
|
|
90.5
|
|
|
|
104.4
|
|
|
|
111.0
|
|
|
Building materials
|
|
|
78.5
|
|
|
|
80.7
|
|
|
|
58.7
|
|
|
Pet products
|
|
|
52.9
|
|
|
|
56.1
|
|
|
|
62.0
|
|
|
Basic minerals
|
|
|
55.2
|
|
|
|
48.2
|
|
|
|
43.8
|
|
|
Contracting services
|
|
|
18.8
|
|
|
|
36.0
|
|
|
|
31.0
|
|
|
Drilling products
|
|
|
38.2
|
|
|
|
31.4
|
|
|
|
26.1
|
|
|
Transportation
|
|
|
22.1
|
|
|
|
28.2
|
|
|
|
30.7
|
|
|
Total
|
|
|
985.6
|
|
|
|
943.8
|
|
|
|
826.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(In millions, except share and per share amounts)
|
(3)
|
Balance Sheet Related Information
|
We are exposed to credit risk on certain assets, primarily accounts receivable. We provide credit to customers in the ordinary course of business and perform ongoing credit evaluations. Concentrations of credit risk with respect to trade receivables are limited due to the large number of customers comprising our customer base. We believe our allowance for doubtful accounts is sufficient to cover customer credit risks. The allowance for doubtful accounts as of and the activity for the years ended December 31 was as follows:
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
Balance at the beginning of the year
|
|
$
|
7.5
|
|
|
$
|
6.6
|
|
|
$
|
6.3
|
|
|
Charged to expense (income)
|
|
|
5.3
|
|
|
|
3.6
|
|
|
|
2.4
|
|
|
Write-offs and currency translation adjustments
|
|
|
(1.8
|
)
|
|
|
(2.7
|
)
|
|
|
(2.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at the end of the year
|
|
|
11.0
|
|
|
|
7.5
|
|
|
|
6.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventories at December 31 consisted of:
|
|
|
2012
|
|
|
2011
|
|
|
Crude stockpile inventories
|
|
$
|
60.8
|
|
|
$
|
53.4
|
|
|
In-process and finished goods inventories
|
|
|
70.5
|
|
|
|
65.0
|
|
|
Other raw material, container, and supplies inventories
|
|
|
22.5
|
|
|
|
25.9
|
|
|
|
|
|
153.8
|
|
|
|
144.3
|
|
|
|
|
|
|
|
|
|
|
|
Included within Other raw material, container, and supplies inventories in the table above is our reserve for slow moving and obsolete inventory. The balance of this reserve as of and the activity for the years ended December 31 was as follows:
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at the beginning of the year
|
|
$
|
2.1
|
|
|
$
|
2.7
|
|
|
$
|
2.1
|
|
|
Charged to costs and expenses
|
|
|
2.1
|
|
|
|
2.1
|
|
|
|
4.0
|
|
|
Disposals and currency translation adjustments
|
|
|
(1.6
|
)
|
|
|
(2.7
|
)
|
|
|
(3.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at the end of the year
|
|
|
2.6
|
|
|
|
2.1
|
|
|
|
2.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(In millions, except share and per share amounts)
The following table presents our reclamation liability at the end of and changes during each of the years presented:
|
|
|
2012
|
|
|
2011
|
|
|
Balance at beginning of the year
|
|
$
|
9.3
|
|
|
$
|
8.0
|
|
|
Settlement of obligations
|
|
|
(3.9
|
)
|
|
|
(4.3
|
)
|
|
Liabilities incurred and accretion expense
|
|
|
4.2
|
|
|
|
6.0
|
|
|
Currency translation adjustments
|
|
|
(0.1
|
)
|
|
|
(0.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Balance at the end of the year
|
|
|
9.5
|
|
|
|
9.3
|
|
|
|
|
|
|
|
|
|
|
|
Accrued liabilities at December 31 consisted of:
|
|
|
2012
|
|
|
2011
|
|
|
Bonus
|
|
$
|
11.5
|
|
|
$
|
9.7
|
|
|
Employee benefits and related costs
|
|
|
10.8
|
|
|
|
10.2
|
|
|
Dividends payable
|
|
|
6.4
|
|
|
|
5.7
|
|
|
Other
|
|
|
29.7
|
|
|
|
33.6
|
|
|
|
|
|
58.4
|
|
|
|
59.2
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated other comprehensive income (loss) at December 31 was comprised of the following components:
|
|
|
2012
|
|
|
2011
|
|
|
Cumulative foreign currency translation
|
|
$
|
6.0
|
|
|
$
|
0.6
|
|
|
Prior service cost on pension plans (net of tax benefit of $0.1 in 2012 and $0.1 in 2011)
|
|
|
(0.2
|
)
|
|
|
(0.2
|
)
|
|
Net actuarial loss on pension plans (net of tax benefit of $7.8 in 2012 and $6.9 in 2011)
|
|
|
(12.0
|
)
|
|
|
(11.9
|
)
|
|
Unrealized loss on interest rate swap agreement (net of tax benefit of $3.3 in 2012 and $3.3 in 2011)
|
|
|
(5.1
|
)
|
|
|
(5.7
|
)
|
|
Unrealized gain on available-for-sale securities (net of tax expense of $1.2 in 2012 and $0 in 2011)
|
|
|
12.1
|
|
|
|
2.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.8
|
|
|
|
(14.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
(4)
|
Property, Plant, Equipment and Mineral Rights and Reserves
|
Property, plant, equipment and mineral rights and reserves consisted of the following:
|
|
|
December 31,
|
|
|
|
|
2012
|
|
|
2011
|
|
|
Mineral rights and reserves
|
|
$
|
48.6
|
|
|
$
|
52.5
|
|
|
Land
|
|
|
13.0
|
|
|
|
12.1
|
|
|
Buildings and improvements
|
|
|
104.9
|
|
|
|
97.5
|
|
|
Machinery and equipment
|
|
|
414.5
|
|
|
|
362.0
|
|
|
Construction in progress
|
|
|
32.6
|
|
|
|
25.2
|
|
|
|
|
|
613.6
|
|
|
|
549.3
|
|
|
|
|
|
|
|
|
|
|
|
The range of useful lives to depreciate plant and equipment is as follows:
|
|
|
|
Buildings and improvements
|
3-50 years
|
|
Machinery and equipment
|
1-24 years
|
|
|
|
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(In millions, except share and per share amounts)
Depreciation and depletion were charged to income as follows:
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
Depreciation expense
|
|
$
|
39.3
|
|
|
$
|
35.0
|
|
|
$
|
30.1
|
|
|
Depletion expense
|
|
|
1.6
|
|
|
|
2.6
|
|
|
|
1.2
|
|
|
|
|
|
40.9
|
|
|
|
37.6
|
|
|
|
31.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5)
|
Goodwill and Intangible Assets
|
The balance of goodwill by segment and the activity occurring in the past two fiscal years is as follows:
|
|
|
Performance Materials
|
|
|
Construction Technologies
|
|
|
Energy Services
|
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2010
|
|
$
|
18.2
|
|
|
$
|
21.7
|
|
|
$
|
31.0
|
|
|
$
|
70.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in goodwill relating to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale of business
|
|
|
-
|
|
|
|
(0.2
|
)
|
|
|
-
|
|
|
|
(0.2
|
)
|
|
Foreign exchange translation
|
|
|
(0.8
|
)
|
|
|
(0.4
|
)
|
|
|
-
|
|
|
|
(1.2
|
)
|
|
Total changes
|
|
|
(0.8
|
)
|
|
|
(0.6
|
)
|
|
|
-
|
|
|
|
(1.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2011
|
|
|
17.4
|
|
|
|
21.1
|
|
|
|
31.0
|
|
|
|
69.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in goodwill relating to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange translation
|
|
|
0.4
|
|
|
|
0.3
|
|
|
|
-
|
|
|
|
0.7
|
|
|
Total changes
|
|
|
0.4
|
|
|
|
0.3
|
|
|
|
-
|
|
|
|
0.7
|
|
|
Balance at December 31, 2012
|
|
|
17.8
|
|
|
|
21.4
|
|
|
|
31.0
|
|
|
|
70.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible assets were as follows:
|
|
|
December 31, 2012
|
|
|
December 31, 2011
|
|
|
|
|
Gross Carrying Value
|
|
|
Accumulated Amortization
|
|
|
Net Carrying Value
|
|
|
Gross Carrying Value
|
|
|
Accumulated Amortization
|
|
|
Net Carrying Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangibles subject to amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trademarks
|
|
$
|
1.6
|
|
|
$
|
(1.6
|
)
|
|
$
|
-
|
|
|
$
|
1.6
|
|
|
$
|
(1.5
|
)
|
|
$
|
0.1
|
|
|
Patents
|
|
|
6.9
|
|
|
|
(6.9
|
)
|
|
|
-
|
|
|
|
6.9
|
|
|
|
(6.8
|
)
|
|
|
0.1
|
|
|
Customer related assets
|
|
|
47.1
|
|
|
|
(23.0
|
)
|
|
|
24.1
|
|
|
|
47.1
|
|
|
|
(19.7
|
)
|
|
|
27.4
|
|
|
Non-compete agreements
|
|
|
2.2
|
|
|
|
(2.2
|
)
|
|
|
-
|
|
|
|
2.2
|
|
|
|
(2.1
|
)
|
|
|
0.1
|
|
|
Developed technology
|
|
|
4.0
|
|
|
|
(2.4
|
)
|
|
|
1.6
|
|
|
|
4.0
|
|
|
|
(2.0
|
)
|
|
|
2.0
|
|
|
Other
|
|
|
3.9
|
|
|
|
(1.8
|
)
|
|
|
2.1
|
|
|
|
2.5
|
|
|
|
(1.4
|
)
|
|
|
1.1
|
|
|
Subtotal
|
|
|
65.7
|
|
|
|
(37.9
|
)
|
|
|
27.8
|
|
|
|
64.3
|
|
|
|
(33.5
|
)
|
|
|
30.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangibles not subject to amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trademarks and tradenames
|
|
|
6.1
|
|
|
|
-
|
|
|
|
6.1
|
|
|
|
6.1
|
|
|
|
-
|
|
|
|
6.1
|
|
|
Total
|
|
|
71.8
|
|
|
|
(37.9
|
)
|
|
|
33.9
|
|
|
|
70.4
|
|
|
|
(33.5
|
)
|
|
|
36.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(In millions, except share and per share amounts)
Intangible assets with finite lives are being amortized primarily on a straight-line basis over their estimated useful lives. The weighted average amortization period of our intangible assets with finite lives is 11 years. We did not recognize any material impairment charge in either of the years included above with respect to intangible assets. Amortization expense on intangible assets for each of the years ended December 31, 2012, 2011, and 2010 was $4.3, $4.8, and $5.1, respectively. We estimate amortization expense of intangible assets for the future years ending December 31 will approximate the following amounts:
|
|
|
Amount
|
|
|
|
|
|
|
|
2013
|
|
$
|
4.3
|
|
|
2014
|
|
|
4.0
|
|
|
2015
|
|
|
3.8
|
|
|
2016
|
|
|
3.8
|
|
|
2017
|
|
|
3.0
|
|
|
|
|
|
|
|
Information about our investments in and advances to affiliates and joint ventures at December 31, 2012 is as follows:
|
|
|
Ownership Interest
|
|
|
Ashapura Volclay Limited
|
|
|
50
|
%
|
|
CETCO-Bentonit Uniao Technologias Ambientais Ltda.
|
|
|
50
|
%
|
|
Egypt Bentonite & Derivatives Co.
|
|
|
30
|
%
|
|
Egypt Mining & Drilling Co.
|
|
|
31
|
%
|
|
Egypt Nano Technologies Co.
|
|
|
27
|
%
|
|
Maprid Tech Cast, S.A. de C.V.
|
|
|
49
|
%
|
|
Volclay de Mexico, S.A. de C.V.
|
|
|
49
|
%
|
|
Volclay Japan Co., Ltd.
|
|
|
50
|
%
|
|
|
|
|
|
|
We account for all of the above investments under the equity method. We record the majority of our equity in the earnings of our investments in affiliates and joint ventures on a one quarter lag. None of our equity investees are publicly traded, and the difference between our investment and the underlying net equity of the investee is immaterial.
In 2012, we recorded income of $3.9 from our joint venture and affiliated entities, which was primarily generated from Ashapura Volclay Limited, Volclay Japan Co. Ltd, and Volclay de Mexico, SA. de C.V.
In 2011, we recorded income of $5.2 from our joint venture and affiliated entities, of which $2.1 related to the sale of Ashapura AMCOL N.V., our Belgian joint-venture which we sold in the second quarter of 2011. The remaining income was primarily generated from Ashapura Volclay Limited, Volclay Japan Co. Ltd, and Volclay de Mexico, SA. de C.V. In the third quarter of 2011, we sold our interest in Albagle Enterprise Limited, our Cypriot joint-venture whose operations were mainly in Russia, at an immaterial loss.
In 2010, we recorded losses of $11.0 from our joint venture and affiliated entities. Of these losses $7.2 is from Albagle Enterprise Limited and $6.9 is from Ashapura AMCOL N.V. We recorded an impairment on Albagle Enterprise Limited due to its continued poor financial performance which was not expected to recover. Ashapura AMCOL N.V. impaired its fixed assets due its inability to generate profits. Our investments in these ventures had been reduced to zero as of December 31, 2010.
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(In millions, except share and per share amounts)
Total income tax expense (benefit) for the years ended December 31 was comprised of the following:
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
Continuing operations
|
|
$
|
23.3
|
|
|
$
|
20.8
|
|
|
$
|
20.3
|
|
|
Discontinued operations
|
|
|
|
|
|
|
(0.6
|
)
|
|
|
(0.7
|
)
|
|
|
|
|
23.3
|
|
|
|
20.2
|
|
|
|
19.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations before income taxes and income (loss) from affiliates and joint ventures was comprised of the following:
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations before income taxes and income (loss)from affiliates and joint ventures:
|
|
|
|
|
|
|
|
|
|
|
Domestic
|
|
$
|
56.4
|
|
|
$
|
53.8
|
|
|
$
|
43.6
|
|
|
Foreign
|
|
|
27.9
|
|
|
|
21.5
|
|
|
|
17.1
|
|
|
|
|
|
84.3
|
|
|
|
75.3
|
|
|
|
60.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The components of the provision for income taxes attributable to income from continuing operations before income taxes and income (loss) from affiliates and joint ventures for the years ended December 31 consisted of:
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
Provision (benefit) for income taxes:
|
|
|
|
|
|
|
|
|
|
|
Federal:
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
$
|
14.0
|
|
|
$
|
5.2
|
|
|
$
|
7.4
|
|
|
Deferred
|
|
|
0.8
|
|
|
|
6.4
|
|
|
|
2.1
|
|
|
State:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
2.8
|
|
|
|
2.9
|
|
|
|
2.4
|
|
|
Deferred
|
|
|
(1.9
|
)
|
|
|
0.4
|
|
|
|
-
|
|
|
Foreign:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
8.4
|
|
|
|
8.0
|
|
|
|
7.4
|
|
|
Deferred
|
|
|
(0.8
|
)
|
|
|
(2.1
|
)
|
|
|
1.0
|
|
|
|
|
|
23.3
|
|
|
|
20.8
|
|
|
|
20.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(In millions, except share and per share amounts)
The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and liabilities as of December 31 were as follows:
|
|
|
2012
|
|
|
2011
|
|
|
Deferred tax assets attributable to:
|
|
|
|
|
|
|
|
Accounts receivable
|
|
$
|
2.1
|
|
|
$
|
1.1
|
|
|
Inventories
|
|
|
2.7
|
|
|
|
1.7
|
|
|
Employee benefit plans
|
|
|
28.3
|
|
|
|
25.6
|
|
|
Accrued liabilities
|
|
|
0.6
|
|
|
|
0.5
|
|
|
Employee incentive plans
|
|
|
2.4
|
|
|
|
1.3
|
|
|
Tax credit carryforwards
|
|
|
6.9
|
|
|
|
7.2
|
|
|
Available-for-sale securities
|
|
|
-
|
|
|
|
2.8
|
|
|
Other
|
|
|
0.3
|
|
|
|
0.8
|
|
|
Total deferred tax assets
|
|
|
43.3
|
|
|
|
41.0
|
|
|
Deferred tax liabilities attributable to:
|
|
|
|
|
|
|
|
|
|
Plant and equipment
|
|
|
(17.7
|
)
|
|
|
(17.6
|
)
|
|
Land and mineral reserves
|
|
|
(12.7
|
)
|
|
|
(13.5
|
)
|
|
Joint ventures
|
|
|
(2.0
|
)
|
|
|
(1.8
|
)
|
|
Intangible assets
|
|
|
(2.7
|
)
|
|
|
(1.7
|
)
|
|
Available-for-sale securities
|
|
|
(1.2
|
)
|
|
|
-
|
|
|
Other
|
|
|
(0.8
|
)
|
|
|
(0.5
|
)
|
|
Total deferred tax liabilities
|
|
|
(37.1
|
)
|
|
|
(35.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Valuation allowances
|
|
|
(5.1
|
)
|
|
|
(6.8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net deferred tax asset (liability)
|
|
|
1.1
|
|
|
|
(0.9
|
)
|
|
|
|
|
|
|
|
|
|
|
We believe it is more likely than not that the deferred tax assets above will be realized in the normal course of business.
The following analysis reconciles the U.S. statutory federal income tax rate to the effective tax rates related to income from continuing operations before income taxes and equity income (loss) of affiliates and joint ventures:
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
|
|
Amount
|
|
|
Percent
of Pretax
Income
|
|
|
Amount
|
|
|
Percent
of Pretax
Income
|
|
|
Amount
|
|
|
Percent
of Pretax
Income
|
|
|
Provision for income taxes at
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. statutory rates
|
|
$
|
29.5
|
|
|
|
35.0
|
%
|
|
$
|
26.3
|
|
|
|
35.0
|
%
|
|
$
|
21.2
|
|
|
|
35.0
|
%
|
|
Increase (decrease) in taxes resulting from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage depletion
|
|
|
(5.0
|
)
|
|
|
-6.0
|
%
|
|
|
(4.9
|
)
|
|
|
-6.5
|
%
|
|
|
(3.9
|
)
|
|
|
-6.4
|
%
|
|
State taxes, net of federal benefit
|
|
|
1.7
|
|
|
|
2.1
|
%
|
|
|
2.2
|
|
|
|
2.9
|
%
|
|
|
1.5
|
|
|
|
2.6
|
%
|
|
Foreign tax rates
|
|
|
(3.9
|
)
|
|
|
-4.6
|
%
|
|
|
(1.0
|
)
|
|
|
-1.4
|
%
|
|
|
(0.9
|
)
|
|
|
-1.5
|
%
|
|
Change in reserve for tax uncertainties
|
|
|
-
|
|
|
|
0.0
|
%
|
|
|
(0.7
|
)
|
|
|
-0.9
|
%
|
|
|
0.1
|
|
|
|
0.1
|
%
|
|
Domestic manufacturing deduction
|
|
|
(1.6
|
)
|
|
|
-1.9
|
%
|
|
|
(0.8
|
)
|
|
|
-1.1
|
%
|
|
|
(0.5
|
)
|
|
|
-0.8
|
%
|
|
Change in state tax rates
|
|
|
(1.9
|
)
|
|
|
-2.2
|
%
|
|
|
-
|
|
|
|
0.0
|
%
|
|
|
(0.1
|
)
|
|
|
-0.2
|
%
|
|
Foreign witholding tax
|
|
|
1.6
|
|
|
|
2.0
|
%
|
|
|
1.0
|
|
|
|
1.3
|
%
|
|
|
0.6
|
|
|
|
1.0
|
%
|
|
Foreign tax credits
|
|
|
(3.2
|
)
|
|
|
-3.8
|
%
|
|
|
(2.4
|
)
|
|
|
-3.1
|
%
|
|
|
(2.2
|
)
|
|
|
-3.6
|
%
|
|
Changes to valuation allowance
|
|
|
1.9
|
|
|
|
2.2
|
%
|
|
|
(0.2
|
)
|
|
|
-0.3
|
%
|
|
|
3.4
|
|
|
|
5.6
|
%
|
|
Tax from foreign disregarded entities
|
|
|
0.4
|
|
|
|
0.5
|
%
|
|
|
0.3
|
|
|
|
0.3
|
%
|
|
|
1.4
|
|
|
|
2.2
|
%
|
|
Other
|
|
|
3.8
|
|
|
|
4.3
|
%
|
|
|
1.0
|
|
|
|
1.4
|
%
|
|
|
(0.3
|
)
|
|
|
-0.6
|
%
|
|
|
|
|
23.3
|
|
|
|
27.6
|
%
|
|
|
20.8
|
|
|
|
27.6
|
%
|
|
|
20.3
|
|
|
|
33.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(In millions, except share and per share amounts)
Percentage Depletion
Depletion deductions are federal income tax deductions that arise from extracting minerals from the ground. There are two methods of calculating depletion: cost depletion and percentage depletion. Cost depletion deduction is similar to depreciation in that it allows us to recover the cost of an asset over the resources’ productive life. Percentage depletion deduction is computed on the basis of the income from the property rather than capitalization costs. It is different from depreciation and cost depletion deductions, however, in that percentage depletion deduction in excess of cost is a permanent book to tax difference, whereas depreciation and cost depletion deductions are temporary in nature. Hence, percentage depletion deduction affects the effective tax rate whereas depreciation and cost depletion deductions do not. We calculate depletion under the percentage depletion method based upon revenues and costs from our mining activities in the U.S.
Tax on Reinvested Earnings
We have not provided for United States federal income tax and foreign income withholding taxes on approximately $138.9 and $113.6 of undistributed earnings from international subsidiaries as of December 31, 2012 and 2011, respectively, because such earnings are intended to be reinvested indefinitely outside of the U.S. If these earnings were distributed, foreign tax credits may become available under current law to reduce or eliminate the resulting income tax liability in the United States.
Tax Holidays
We have benefitted from tax holidays in both Poland and Thailand as a result of our locating and investing in special economic zones in each country. These tax holidays resulted in reductions to our income tax expense of $0.2, $0.1, and $0.5 in 2012, 2011 and 2010, respectively, representing benefits of $0.01, $0.00 and $0.01 to diluted earnings per share in 2012, 2011 and 2010, respectively.
Our agreement with the Polish tax authorities expired in 2010. We continue to pursue other opportunities in an effort to minimize income tax within the country.
Our agreement with the Thai tax authorities provides for tax holidays on several investments. The most significant tax exemption is on all income from manufacturing operations (distributed goods are still subject to taxation) related to our initial investment. These initial manufacturing activities were taxable at 50% in years 2006 through 2010. An additional tax holiday was granted in 2007 for the expansion of our Thai facility. Income generated from this expansion is granted a 100% tax holiday from corporate income tax for eight (8) years beginning in 2007 and then taxable at 50% for five (5) years starting in 2015. We attempt to modify and obtain tax concessions when possible.
Exams
In the normal course of business, we are subject to examination by tax authorities throughout the world. With few exceptions, we are no longer subject to income tax examinations by tax authorities for years prior to 2010. The United States Internal Revenue Service (“IRS”) has examined our federal income tax returns for all open years through 2009.
NOLs and Credit Carryforwards
At December 31, 2012, we have $0.9 of various income tax credits, which we expect to utilize within the ten year carryforward period. Due to the expiration of state operating loss carryovers, we have written off the related deferred tax asset of $0.6 and the corresponding full valuation allowance at December 31, 2012.
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(In millions, except share and per share amounts)
Unrecognized Tax Benefits
The following table summarizes the activity related to our unrecognized tax benefits:
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at beginning of the year
|
|
$
|
-
|
|
|
$
|
0.8
|
|
|
$
|
0.7
|
|
|
Increases related to prior year tax positions
|
|
|
|
|
|
|
|
|
|
|
0.1
|
|
|
Increases related to current year tax positions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Decreases related to the expiration of statue of limitation / settlement of audits
|
|
|
|
|
|
|
(0.8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at the end of the year
|
|
|
-
|
|
|
|
-
|
|
|
|
0.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts of long-term debt were as follows:
|
|
|
December 31,
|
|
|
|
|
2012
|
|
|
2011
|
|
|
Borrowings under revolving credit agreement
|
|
$
|
114.6
|
|
|
$
|
120.9
|
|
|
Senior notes
|
|
|
125.0
|
|
|
|
125.0
|
|
|
Other notes payable
|
|
|
10.2
|
|
|
|
15.5
|
|
|
|
|
|
249.8
|
|
|
|
261.4
|
|
|
Less: current portion
|
|
|
(1.0
|
)
|
|
|
(0.7
|
)
|
|
|
|
|
248.8
|
|
|
|
260.7
|
|
|
|
|
|
|
|
|
|
|
|
In January 2012, we entered into a new revolving credit agreement that replaced our previous revolving credit agreement. The new credit agreement provides us with a $300 unsecured line of credit, which can be increased to $400 subject to certain customary conditions and approvals. It is a multi-currency arrangement that will allow us to borrow certain foreign currencies at an adjusted LIBOR rate plus 1.00% to 1.75%, depending upon the ratio of our debt to EBITDA as defined therein. The new credit agreement expires on January 20, 2017, and contains certain restrictive covenants, including covenants relating to the maintenance of net worth, leverage ratios and interest coverage ratios. As of December 31, 2012, $185.4 remained available to us under this revolving credit line and we were in compliance with all of the covenants and ratios.
We had interest rate swaps outstanding which effectively hedge the variable interest rate on $33 of our borrowings as of December 31, 2012 and 2011, to a fixed rate of 3.3% per annum, plus credit spread. Including the effect of this interest rate swap agreement, our borrowings under the credit agreement as of December 31, 2012 carried an average interest rate of 2.95%.
A qualified institution holds $75 of our senior notes which mature on April 2, 2017, subject to certain acceleration features upon an event of default, should one occur. These senior notes are comprised of (a) $45 aggregate principal amount of Series 2007-A Adjustable Fixed Rate Guaranteed Senior Notes, Tranche 1, due April 2, 2017 (the “Tranche 1” notes) and (b) $30 aggregate principal amount of Series 2007-A Adjustable Floating Rate Guaranteed Senior Notes, Tranche 2 (the “Tranche 2” notes). Tranche 1 bears interest at 5.78%, payable semi-annually in arrears on April 2nd and October 2nd of each year. Tranche 2 bears interest at an annual rate of 0.55% plus LIBOR in effect from time to time, adjusted quarterly, and is payable quarterly in arrears.
As of December 31, 2012 and 2011, we had an interest rate swap outstanding which effectively hedges the variable interest rate of $30 of Tranche 2 senior notes to a fixed rate of 5.6% per annum.
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(In millions, except share and per share amounts)
On April 29, 2010, we issued and sold an additional $50 of senior notes to other qualified institutional buyers pursuant to a note purchase agreement (the “Note Purchase Agreement”). These senior notes bear interest at a fixed annual rate of 5.46%, payable semi-annually in arrears on April 29
th
and October 29
th
of each year, beginning on October 29, 2010. Our obligations under the Note Purchase Agreement mature on April 29, 2020.
Our obligations under our revolving credit agreement, the Tranche 1 and Tranche 2 notes, and the Note Purchase Agreement are guaranteed by certain of our subsidiaries.
We also have an uncommitted, short-term credit facility maturing on November 15, 2013 that allows for maximum borrowings of $15, of which $8.5 was outstanding as of December 31, 2012 at an interest rate of 2.00%.
As of December 31, 2012, 65% of our debt is fixed at an average rate of 5.12%, the remainder of our debt contains interest rates which vary mostly in response to the changes in LIBOR.
Maturities of long-term debt outstanding at December 31, 2011 were as follows:
|
|
|
2013
|
|
|
2014
|
|
|
2015
|
|
|
2016
|
|
|
2017
|
|
|
Thereafter
|
|
|
Borrowings under:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revolving credit agreement
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
114.6
|
|
|
$
|
-
|
|
|
Senior notes
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
75.0
|
|
|
|
50.0
|
|
|
Other notes payable
|
|
|
1.0
|
|
|
|
0.5
|
|
|
|
0.1
|
|
|
|
-
|
|
|
|
8.6
|
|
|
|
-
|
|
|
|
|
|
1.0
|
|
|
|
0.5
|
|
|
|
0.1
|
|
|
|
-
|
|
|
|
198.2
|
|
|
|
50.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2012 and 2011, we had outstanding standby letters of credit of approximately $4.2 and $3.7, respectively, which are not included in our Consolidated Balance Sheets. These letters of credit typically serve to guarantee performance of our land reclamation and workers’ compensation obligations; we have recorded amounts owed under these obligations in our Consolidated Balance Sheets as of December 31, 2012 and 2011.
|
(9)
|
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 Consolidated Balance Sheet:
|
|
|
|
Fair Value as of December 31,
|
|
|
Liability Derivatives
|
Balance Sheet Location
|
|
2012
|
|
|
2011
|
|
|
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swaps
|
Other long-term liabilities
|
|
$
|
(8.4
|
)
|
|
$
|
(9.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(In millions, except share and per share amounts)
Cash Flow Hedges
|
Derivatives in Cash Flow Hedging Relationships
|
|
Amount of Gain or (Loss) Recognized
in OCI on Derivatives, net of tax
|
|
|
|
|
(Effective Portion)
|
|
|
|
|
Year Ended December 31,
|
|
|
|
|
2012
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
Interest rate swaps
|
|
$
|
0.6
|
|
|
$
|
(1.5
|
)
|
|
|
|
|
|
|
|
|
|
|
We use interest rate swaps to manage variable interest rate risk on debt securities. Interest rate differentials are paid or received on these arrangements over the life of the swap. As of December 31, 2012 and 2011, we had an interest rate swap outstanding which effectively hedges the variable interest rate on $30 of our senior notes to a fixed rate of 5.6% per annum. We also had other interest rate swaps outstanding which effectively hedge the variable interest rate on $33 of our borrowings as of December 31, 2012 and 2011, under our revolving credit agreement, to a fixed rate of 3.3% per annum, plus credit spread.
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 for the following currencies: British pound sterling (GBP), Chinese renminbi (CYN), Danish kroner (DKK), Euro, Indian rupee (INR), Malaysian ringgit (MYR), Norwegian krone (NOK), Polish zloty (PLN), South African Rand (ZAR), Swiss franc (SEK), Thai baht (THB), and 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 these contracts for hedge accounting treatment and therefore, changes in fair value of these contracts are recorded in earnings as follows:
|
Derivatives Not Designated as Hedging Instruments
|
Location of
Gain or (Loss)
Recognized in
|
|
Amount of Gain or (Loss) Recognized in
Income on Derivatives
|
|
|
|
Income on
|
|
Year Ended December 31,
|
|
|
|
Derivatives
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange derivative instruments
|
Other, net
|
|
$
|
(0.4
|
)
|
|
$
|
(0.5
|
)
|
|
$
|
(0.8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
We did not have any foreign exchange derivative instruments outstanding as of December 31, 2012 or 2011.
|
(10)
|
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 that the company has the ability to access at the measurement date.
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(In millions, except share and per share amounts)
Level 2 – Valuation is based on quoted prices for similar assets or liabilities in active market, 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.
Level 3 – Valuation is based on model based techniques that use unobservable inputs for the asset or liability. These inputs reflect our own views about the assumption market participants would use in pricing the asset or liability.
The following table categorizes our fair value instruments according to the assumptions used to calculate those values at the end of each of the past two years:
|
|
|
|
|
|
Fair Value Measurements Using
|
|
|
|
|
Asset /
|
|
|
Quoted Prices in
|
|
|
|
|
|
Significant
|
|
|
Description
|
|
(Liability)
|
|
|
Active Markets for
|
|
|
Significant Other
|
|
|
Unobservable
|
|
|
|
|
Balance at
|
|
|
Identical Assets
|
|
|
Observable Inputs
|
|
|
Inputs
|
|
|
|
|
12/31/2012
|
|
|
(Level 1)
|
|
|
(Level 2)
|
|
|
(Level 3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swaps
|
|
$
|
(8.4
|
)
|
|
$
|
-
|
|
|
$
|
(8.4
|
)
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available-for-sale securities
|
|
|
14.6
|
|
|
|
14.6
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred compensation plan assets
|
|
|
9.4
|
|
|
|
-
|
|
|
|
9.4
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary pension plan assets
|
|
|
8.2
|
|
|
|
-
|
|
|
|
8.2
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements Using
|
|
|
|
|
Asset /
|
|
|
Quoted Prices in
|
|
|
|
|
|
Significant
|
|
|
Description
|
|
(Liability)
|
|
|
Active Markets for
|
|
|
Significant Other
|
|
|
Unobservable
|
|
|
|
|
Balance at
|
|
|
Identical Assets
|
|
|
Observable Inputs
|
|
|
Inputs
|
|
|
|
|
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 supplementary pension plan assets are valued using quoted prices for similar assets in active markets.
The carrying value of our long-term debt approximates its fair value as the interest rate is near the current market rate yield. The fair value of our long-term debt is determined using current applicable rates for similar instruments as of the balance sheet date. The fair value of long-term debt for disclosure purpose is a Level 3 liability within the fair value category.
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(In millions, except share and per share amounts)
|
(11)
|
Noncontrolling Interest
|
In January 2011, we acquired the remaining noncontrolling interest in Volclay South Africa (Proprietary) Limited (“VSA”), a part of our chromite operations, 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 VSA’s subsidiary dedicated strictly to mining chromite 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 the 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.
|
|
|
Twelve Months Ended December 31,
|
|
|
|
|
2012
|
|
|
2011
|
|
|
Net income attributable to AMCOL shareholders
|
|
$
|
65.1
|
|
|
$
|
58.5
|
|
|
Transfers from noncontrolling interest:
|
|
|
|
|
|
|
|
|
|
Decrease in additional paid-in capital for purchase of the remaining noncontrolling interest in 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
|
|
$
|
65.1
|
|
|
$
|
49.7
|
|
|
|
|
|
|
|
|
|
|
|
|
(12)
|
Discontinued Operations
|
In September 2011, our construction technologies segment sold CETCO Contracting Services Company, which comprised our domestic contracting services business. The operations of this business, including the immaterial loss recorded on the sale, have been reclassified and are recorded net of income tax within Income (loss) on discontinued operations within our Consolidated Statement of Operations.
In 2008, we entered into a sale-leaseback transaction involving the construction of a new corporate facility. Under terms of the operating lease, rental payments in fiscal 2012, 2011 and 2010 approximate $2.7 , $2.6, and $2.6, respectively, and increase 2% annually thereafter through December 2028.
We have several noncancelable leases for equipment, software, and plant facilities. Total rent expense under operating lease agreements was approximately $20.1, $14.4 and $12.5 in 2012, 2011 and 2010, respectively.
The following is a schedule of future minimum lease payments for operating leases (with initial terms in excess of one year) as of December 31, 2012:
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(In millions, except share and per share amounts)
|
|
|
Minimum Lease
|
|
|
|
|
Payments
|
|
|
|
|
Domestic
|
|
|
Foreign
|
|
|
Total
|
|
|
Year ending December 31:
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
$
|
17.4
|
|
|
$
|
2.6
|
|
|
$
|
20.0
|
|
|
2014
|
|
|
14.4
|
|
|
|
1.9
|
|
|
|
16.3
|
|
|
2015
|
|
|
11.5
|
|
|
|
1.1
|
|
|
|
12.6
|
|
|
2016
|
|
|
8.4
|
|
|
|
0.7
|
|
|
|
9.1
|
|
|
2017
|
|
|
6.0
|
|
|
|
0.5
|
|
|
|
6.5
|
|
|
Thereafter
|
|
|
45.4
|
|
|
|
1.1
|
|
|
|
46.5
|
|
|
Total
|
|
|
103.1
|
|
|
|
7.9
|
|
|
|
111.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(14)
|
Employee Benefit Plans
|
We have a defined benefit pension plan covering substantially all of our domestic employees hired before January 1, 2004. The benefits are based upon years of service and qualifying compensation. Our funding is calculated using the actuarially determined unit credit cost method. Contributions are intended to provide not only for benefits attributed to services to date, but also for those expected to be earned in the future.
In addition to the qualified plan, we sponsor a supplementary pension plan (SERP) that provides benefits in excess of qualified plan limitations for certain employees.
The following tables set forth our pension obligations and funded status at December 31:
|
|
|
Pension Benefits
|
|
|
|
|
Defined Benefit Pension Plan
|
|
|
Supplementary Pension Plan
|
|
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
|
|
Change in benefit obligations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning projected benefit obligation
|
|
$
|
58.1
|
|
|
$
|
48.0
|
|
|
$
|
11.6
|
|
|
$
|
9.2
|
|
|
Service cost
|
|
|
1.7
|
|
|
|
1.5
|
|
|
|
0.3
|
|
|
|
0.2
|
|
|
Interest cost
|
|
|
2.7
|
|
|
|
2.6
|
|
|
|
0.5
|
|
|
|
0.5
|
|
|
Actuarial (gain)/loss
|
|
|
2.6
|
|
|
|
7.2
|
|
|
|
1.2
|
|
|
|
2.0
|
|
|
Benefits paid
|
|
|
(1.3
|
)
|
|
|
(1.2
|
)
|
|
|
(0.4
|
)
|
|
|
(0.3
|
)
|
|
Ending projected benefit obligation
|
|
|
63.8
|
|
|
|
58.1
|
|
|
|
13.2
|
|
|
|
11.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in plan assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning fair value
|
|
|
34.5
|
|
|
|
35.8
|
|
|
|
-
|
|
|
|
-
|
|
|
Actual return
|
|
|
4.3
|
|
|
|
(1.5
|
)
|
|
|
|
|
|
|
-
|
|
|
Company contribution
|
|
|
1.7
|
|
|
|
1.5
|
|
|
|
0.4
|
|
|
|
0.4
|
|
|
Benefits paid
|
|
|
(1.4
|
)
|
|
|
(1.3
|
)
|
|
|
(0.4
|
)
|
|
|
(0.4
|
)
|
|
Ending fair value
|
|
|
39.1
|
|
|
|
34.5
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funded status of the plan
|
|
|
(24.7
|
)
|
|
|
(23.6
|
)
|
|
|
(13.2
|
)
|
|
|
(11.6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The liabilities associated with our SERP plan and our defined benefit pension plan (net of the defined benefit plan assets) are included within Pension liabilities in our Consolidated Balance Sheet. Included within Other Noncurrent Assets within our Consolidated Balance Sheet are invested assets for the benefit of the employees covered by the supplemental pension plan.
Pension cost in each of the following years was comprised of:
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(In millions, except share and per share amounts)
|
|
|
Defined Benefit Pension Plan
|
|
|
Supplementary Pension Plan
|
|
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
Service cost – benefits earned during the year
|
|
$
|
1.7
|
|
|
$
|
1.5
|
|
|
$
|
1.4
|
|
|
$
|
0.3
|
|
|
$
|
0.2
|
|
|
$
|
0.3
|
|
|
Interest cost on accumulated benefit obligation
|
|
|
2.7
|
|
|
|
2.6
|
|
|
|
2.4
|
|
|
|
0.5
|
|
|
|
0.5
|
|
|
|
0.5
|
|
|
Expected return on plan assets
|
|
|
(2.6
|
)
|
|
|
(2.9
|
)
|
|
|
(2.6
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Net amortization and deferral
|
|
|
1.0
|
|
|
|
0.1
|
|
|
|
0.1
|
|
|
|
0.2
|
|
|
|
0.1
|
|
|
|
0.1
|
|
|
Net periodic pension cost
|
|
|
2.8
|
|
|
|
1.3
|
|
|
|
1.3
|
|
|
|
1.0
|
|
|
|
0.8
|
|
|
|
0.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table summarizes the assumptions used in determining our pension obligations at the end of each of our last two years:
|
|
|
Defined Benefit Pension Plan
|
|
|
Supplementary Pension Plan
|
|
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
|
|
Discount rate
|
|
|
4.17
|
%
|
|
|
4.70
|
%
|
|
|
4.00
|
%
|
|
|
4.63
|
%
|
|
Rate of compensation increase
|
|
|
3.00
|
%
|
|
|
4.00
|
%
|
|
|
3.00
|
%
|
|
|
4.00
|
%
|
|
Long-term rate of return on plan assets
|
|
|
7.50
|
%
|
|
|
7.50
|
%
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table summarizes the assumptions used in determining our net periodic benefit cost in the years ended December 31:
|
|
|
Defined Benefit Pension Plan
|
|
|
Supplementary Pension Plan
|
|
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
Discount rate
|
|
|
4.70
|
%
|
|
|
5.51
|
%
|
|
|
5.91
|
%
|
|
|
4.63
|
%
|
|
|
5.36
|
%
|
|
|
5.95
|
%
|
|
Rate of compensation increase
|
|
|
4.00
|
%
|
|
|
4.00
|
%
|
|
|
4.00
|
%
|
|
|
4.00
|
%
|
|
|
4.00
|
%
|
|
|
4.00
|
%
|
|
Long-term rate of return on plan assets
|
|
|
7.50
|
%
|
|
|
8.00
|
%
|
|
|
8.25
|
%
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
We expect to contribute up to $1.2 to the defined benefit pension plan in 2013. The accumulated benefit obligation (ABO) for our defined benefit pension plan was $56.4 and $49.3 at December 31, 2012 and 2011, respectively. The ABO for our supplementary pension plan was $9.4 and $8.5 at December 31, 2012 and 2011, respectively.
The estimated future benefit payments contemplated under these plans, reflecting expected future service, as appropriate, are presented in the following table:
|
|
|
Defined Benefit Pension Plan
|
|
|
Supplementary Pension Plan
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
$
|
1.8
|
|
|
$
|
0.4
|
|
|
2014
|
|
|
2.1
|
|
|
|
0.4
|
|
|
2015
|
|
|
2.3
|
|
|
|
0.4
|
|
|
2016
|
|
|
2.5
|
|
|
|
0.5
|
|
|
2017
|
|
|
2.8
|
|
|
|
0.7
|
|
|
2018 through 2022
|
|
|
17.5
|
|
|
|
4.0
|
|
|
|
|
|
|
|
|
|
|
|
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(In millions, except share and per share amounts)
Note 3 shows the amounts included within accumulated other comprehensive income as of December 31, 2012 and 2011 that have not yet been recognized as components of net periodic benefit cost. Of these balances at December 31, 2012, the amounts expected to be amortized in the next fiscal year are $0.1 and $1.2 for the unrecognized prior service cost and unrecognized net actuarial loss, respectively. Excluding the effect of income taxes, the amounts recognized within other comprehensive income and the prior service cost for 2012 and 2011, are as follows:
|
|
|
2012
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
Recognized in Other Comprehensive Income:
|
|
|
|
|
|
|
|
Net actuarial loss (gain)
|
|
$
|
2.1
|
|
|
$
|
13.7
|
|
|
Amortization of net actuarial loss (gain)
|
|
|
(1.1
|
)
|
|
|
(0.1
|
)
|
|
Amortization of prior service cost (credit)
|
|
|
(0.1
|
)
|
|
|
(0.1
|
)
|
|
Total change in other comprehensive income
|
|
|
0.9
|
|
|
|
13.5
|
|
|
|
|
|
|
|
|
|
|
|
Defined Benefit Pension Plan
Fair values of our defined benefit pension plan assets at December 31, by asset category, are as follows:
|
|
|
Fair Value Measurements as of December 31, 2012
|
|
|
|
|
|
|
|
Quoted Prices in Active Markets for Identical Assets
|
|
|
Significant Observable Inputs
|
|
|
Significant Unobservable Inputs
|
|
|
|
|
Total
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Short term investment funds
|
|
$
|
0.6
|
|
|
$
|
-
|
|
|
$
|
0.6
|
|
|
$
|
-
|
|
|
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
US equity securities
|
|
|
14.0
|
|
|
|
1.4
|
|
|
|
12.6
|
|
|
|
-
|
|
|
International equity securities
|
|
|
9.5
|
|
|
|
4.5
|
|
|
|
5.0
|
|
|
|
-
|
|
|
AMCOL International common stock
|
|
|
2.1
|
|
|
|
2.1
|
|
|
|
-
|
|
|
|
-
|
|
|
Fixed income securities and bonds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Governmental agencies
|
|
|
0.7
|
|
|
|
-
|
|
|
|
0.7
|
|
|
|
-
|
|
|
Corporate bonds
|
|
|
5.4
|
|
|
|
5.4
|
|
|
|
-
|
|
|
|
-
|
|
|
Guaranteed investment contracts
|
|
|
1.3
|
|
|
|
-
|
|
|
|
1.3
|
|
|
|
-
|
|
|
Other investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate index funds
|
|
|
0.8
|
|
|
|
-
|
|
|
|
0.8
|
|
|
|
-
|
|
|
Commodities linked funds
|
|
|
0.7
|
|
|
|
0.7
|
|
|
|
-
|
|
|
|
-
|
|
|
Hedge funds
|
|
|
4.0
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4.0
|
|
|
Total
|
|
|
39.1
|
|
|
|
14.1
|
|
|
|
21.0
|
|
|
|
4.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(In millions, except share and per share amounts)
|
|
|
Fair Value Measurements as of December 31, 2011
|
|
|
|
|
|
|
|
Quoted Prices in Active Markets for Identical Assets
|
|
|
Significant Observable Inputs
|
|
|
Significant Unobservable Inputs
|
|
|
|
|
Total
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Short term investment funds
|
|
$
|
0.7
|
|
|
$
|
-
|
|
|
$
|
0.7
|
|
|
$
|
-
|
|
|
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
US equity securities
|
|
|
11.2
|
|
|
|
-
|
|
|
|
11.2
|
|
|
|
-
|
|
|
International equity securities
|
|
|
6.0
|
|
|
|
2.0
|
|
|
|
4.0
|
|
|
|
-
|
|
|
AMCOL International common stock
|
|
|
1.9
|
|
|
|
1.9
|
|
|
|
-
|
|
|
|
-
|
|
|
Fixed income securities and bonds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Governmental agencies
|
|
|
1.0
|
|
|
|
1.0
|
|
|
|
-
|
|
|
|
-
|
|
|
Corporate bonds
|
|
|
5.0
|
|
|
|
5.0
|
|
|
|
-
|
|
|
|
-
|
|
|
Guaranteed investment contracts
|
|
|
2.5
|
|
|
|
-
|
|
|
|
2.5
|
|
|
|
-
|
|
|
Other investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate index funds
|
|
|
0.6
|
|
|
|
-
|
|
|
|
0.6
|
|
|
|
-
|
|
|
Commodities linked funds
|
|
|
1.7
|
|
|
|
1.7
|
|
|
|
-
|
|
|
|
-
|
|
|
Hedge funds
|
|
|
3.9
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3.9
|
|
|
Total
|
|
|
34.5
|
|
|
|
11.6
|
|
|
|
19.0
|
|
|
|
3.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets classified as Level 1 are valued using quoted prices on the major stock exchange on which individual assets are traded. Our Level 2 assets are valued using net asset value. The net asset value is quoted on a private market that is not active; however, the unit price is based on underlying investments that are traded on an active market. Our Level 3 assets are estimated at fair value based on the most recent financial information available for the underlying securities, which are not traded on active market, and represents significant unobservable input.
The following is a reconciliation of changes in fair value measurements of plan assets using significant unobservable inputs (Level 3):
|
|
|
Hedge Funds
|
|
|
Beginning balance at December 31, 2010
|
|
$
|
2.2
|
|
|
Purchases, sales, and settlements
|
|
|
1.8
|
|
|
Actual return on plan assets still held at reporting date
|
|
|
(0.1
|
)
|
|
Ending balance at December 31, 2011
|
|
|
3.9
|
|
|
Purchases, sales, and settlements
|
|
|
-
|
|
|
Actual return on plan assets still held at reporting date
|
|
|
0.1
|
|
|
Ending balance at December 31, 2012
|
|
|
4.0
|
|
|
|
|
|
|
|
We employ a total return investment approach whereby we use a mix of equities and fixed income investments to maximize the long-term return of plan assets with a prudent level of risk. Risk tolerance is established through careful consideration of plan liabilities, plan funded status, and our corporate financial condition. The investment portfolio contains a diversified blend of equity, fixed-income investments and alternative investments. The investment objectives emphasize maximizing returns consistent with ensuring that sufficient assets are available to meet liabilities, and minimizing corporate cash contributions. Our defined benefit plan assets are managed so as to include investments that balance income and capital appreciation.
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(In millions, except share and per share amounts)
Our defined benefit plan has a target range for different types of investments: equity securities (between 41% and 69%), fixed income securities and bonds (between 18% and 31%), alternative investments (between 5% and 23%), and cash (between 0% and 10%). This allocation takes into account factors such as the average age of employees covered by the Plan (benefit obligations) as well as overall market conditions. Interim portfolio reviews result in investment allocations being evaluated at least twice a year by the Pension Committee and rebalancing takes place as needed. Equity investments are diversified across U.S. and non-U.S. stocks, as well as growth, value, and small and large capitalizations. Fixed income securities and bonds include both government and corporate investment vehicles. These include a series of laddered debt securities as well as bond funds.
Historical markets are studied and long-term historical relationships between equities and fixed-income are preserved consistent with the widely accepted capital market principle that assets with higher volatility generate a greater return over the long run. Current market factors such as inflation and interest rates are evaluated before long-term capital market assumptions are determined. The long-term rate of return for plan assets is established via a building block approach with proper consideration of diversification and rebalancing.
Defined Contribution Plan
Employees hired on or after January 1, 2004 do not participate in our defined benefit pension plan or SERP. Instead, they participate in a defined contribution plan whereby we make a retirement contribution into the employee’s savings plan equal to 3% of their compensation. We made total contributions to this plan of $1.9, $1.8 and $1.2 in 2012, 2011 and 2010, respectively.
401(k) Savings Plan
We also have a savings plan for our U.S. personnel. In 2012, we made a contribution in an amount equal to an employee’s contributions up to a maximum of 4% of the employee’s annual earnings. We make contributions to this plan using either cash or our own common stock which we purchase in the open market. Our contributions under the savings plan were $3.8 in 2012, $3.4 in 2011 and $2.8 in 2010.
Other
We also have a deferred compensation plan and a 401(k) restoration plan for our executives.
|
(15)
|
Stock Compensation Plans
|
Nonqualified stock options, incentive stock options, and stock appreciation rights
We provide compensation to certain employees using stock based awards. For purposes of calculating compensation cost, we estimate the fair value of each award on the date of grant using the Black-Scholes option-pricing model. We used the following assumptions in calculating the fair value of awards granted in each of the following years:
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
Risk-free interest rate
|
|
|
1.0
|
%
|
|
|
2.2
|
%
|
|
|
2.7
|
%
|
|
Expected life of option in years
|
|
|
5.39
|
|
|
|
5.51
|
|
|
|
5.61
|
|
|
Expected dividend yield of stock
|
|
|
2.3
|
%
|
|
|
2.5
|
%
|
|
|
3.2
|
%
|
|
Expected volatility of stock price
|
|
|
56.4
|
%
|
|
|
49.0
|
%
|
|
|
50.8
|
%
|
|
Weighted-average per share fair value of options granted
|
|
$
|
12.36
|
|
|
$
|
11.42
|
|
|
$
|
8.62
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(In millions, except share and per share amounts)
1998 Long-Term Incentive Plan
This plan provides for the award of incentive stock options, nonqualified stock options, restricted stock, stock appreciation rights and phantom stock. We reserved 3,900,000 shares of our common stock for issuance to our officers, directors and key employees. Different terms and conditions apply to each form of award made under the plan. Awards granted since 2003 vest ratably over a three year period and expire six years after the date of grant, except in the event of termination, retirement or death of the optionee or a change in control of the Company. Options awarded under this plan prior to 2003 generally vest 40% after two years and continue to vest at the rate of 20% per year for each year thereafter until they are fully vested. These options are exercisable as they vest and expire 10 years after the date of grant, except in the event of termination, retirement or death of the optionee or a change in control of the Company.
Changes in options outstanding are summarized as follows:
|
|
|
December 31, 2012
|
|
|
December 31, 2011
|
|
|
December 31, 2010
|
|
|
1998 Long-Term Incentive Plan
|
|
Shares
|
|
|
|
|
|
Shares
|
|
|
|
|
|
Shares
|
|
|
|
|
|
Options outstanding at January 1
|
|
|
169,051
|
|
|
$
|
21.82
|
|
|
|
413,710
|
|
|
$
|
19.88
|
|
|
|
720,791
|
|
|
$
|
18.19
|
|
|
Granted
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Exercised
|
|
|
(165,401
|
)
|
|
|
21.80
|
|
|
|
(243,659
|
)
|
|
|
18.54
|
|
|
|
(306,548
|
)
|
|
|
15.93
|
|
|
Forfeited
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Expired
|
|
|
(3,650
|
)
|
|
|
22.57
|
|
|
|
(1,000
|
)
|
|
|
14.79
|
|
|
|
(533
|
)
|
|
|
4.76
|
|
|
Options outstanding at December 31
|
|
|
-
|
|
|
|
-
|
|
|
|
169,051
|
|
|
|
21.82
|
|
|
|
413,710
|
|
|
|
19.88
|
|
|
Options exercisable at December 31
|
|
|
-
|
|
|
|
-
|
|
|
|
169,051
|
|
|
|
21.82
|
|
|
|
413,710
|
|
|
|
19.88
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2006 Long-Term Incentive Plan
|
|
|
December 31, 2012
|
|
|
December 31, 2011
|
|
|
December 31, 2010
|
|
|
2006 Long-Term Incentive Plan
|
|
Awards
|
|
|
|
|
|
Awards
|
|
|
|
|
|
Awards
|
|
|
|
|
|
Awards outstanding at January 1
|
|
|
1,189,012
|
|
|
$
|
22.91
|
|
|
|
1,389,598
|
|
|
$
|
23.02
|
|
|
|
1,060,057
|
|
|
$
|
22.89
|
|
|
Granted
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
390,750
|
|
|
|
23.24
|
|
|
Exercised
|
|
|
(297,528
|
)
|
|
|
23.11
|
|
|
|
(170,998
|
)
|
|
|
24.04
|
|
|
|
(29,862
|
)
|
|
|
21.62
|
|
|
Forfeited
|
|
|
(3,125
|
)
|
|
|
23.24
|
|
|
|
(20,087
|
)
|
|
|
20.48
|
|
|
|
(22,722
|
)
|
|
|
19.92
|
|
|
Expired
|
|
|
(5,250
|
)
|
|
|
23.89
|
|
|
|
(9,501
|
)
|
|
|
23.64
|
|
|
|
(8,625
|
)
|
|
|
29.62
|
|
|
Awards outstanding at December 31
|
|
|
883,109
|
|
|
|
22.84
|
|
|
|
1,189,012
|
|
|
|
22.91
|
|
|
|
1,389,598
|
|
|
|
23.02
|
|
|
Awards exercisable at December 31
|
|
|
781,574
|
|
|
|
22.79
|
|
|
|
885,003
|
|
|
|
23.67
|
|
|
|
754,622
|
|
|
|
24.86
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Our AMCOL International Corporation 2006 Long-Term Incentive Plan permits a total of 1,500,000 shares of AMCOL common stock to be awarded to eligible directors and employees through the use of nonqualified stock options, incentive stock options, restricted stock or restricted stock units, and stock appreciation rights. Different terms and conditions apply to each form of award made under the plan. Awards granted prior to 2009 have a six year life from the date of grant and vest ratably over a three year period from the date of grant. Awards granted in 2009 have a ten year life from the date of grant and vest ratably over a three year period from the date of the grant. No awards could be made pursuant to this plan after May 2010 when the AMCOL International Corporation 2010 Long-Term Incentive Plan was adopted as discussed later herein.
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(In millions, except share and per share amounts)
2010 Long-Term Incentive Plan
|
|
|
December 31, 2012
|
|
|
December 31, 2011
|
|
|
2010 Long-Term Incentive Plan
|
|
Awards
|
|
|
|
|
|
Awards
|
|
|
|
|
|
Awards outstanding at January 1
|
|
|
356,050
|
|
|
$
|
30.66
|
|
|
|
|
|
$
|
-
|
|
|
Granted
|
|
|
417,420
|
|
|
|
29.80
|
|
|
|
379,425
|
|
|
|
30.66
|
|
|
Exercised
|
|
|
(567
|
)
|
|
|
30.66
|
|
|
|
-
|
|
|
|
-
|
|
|
Forfeited
|
|
|
(22,107
|
)
|
|
|
30.12
|
|
|
|
(23,375
|
)
|
|
|
30.66
|
|
|
Expired
|
|
|
(500
|
)
|
|
|
30.66
|
|
|
|
-
|
|
|
|
-
|
|
|
Awards outstanding at December 31
|
|
|
750,296
|
|
|
|
30.20
|
|
|
|
356,050
|
|
|
|
30.66
|
|
|
Awards exercisable at December 31
|
|
|
117,219
|
|
|
|
30.66
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
On May 6, 2010, our shareholders approved the AMCOL International Corporation 2010 Long-Term Incentive Plan. This plan permits a total of 2,000,000 shares of AMCOL common stock to be awarded to eligible directors and employees through the use of nonqualified stock options, incentive stock options, restricted stock or restricted stock units, and stock appreciation rights. Different terms and conditions apply to each form of award under the plan. Awards granted under this plan have a ten year life from the date of grant and vest ratably over a three year period from the date of the grant. At any time, the Board of Directors may amend the plan, which automatically expires on May 7, 2020.
All Stock Compensation Plans
|
All Stock Compensation Plans
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intrinsic value of awards exercised during the year
|
|
$
|
3.6
|
|
|
$
|
5.1
|
|
|
$
|
3.9
|
|
|
Fair value of awards vested during the year
|
|
|
2.9
|
|
|
|
2.4
|
|
|
|
3.9
|
|
|
Grant date fair value of awards granted during the year
|
|
|
5.2
|
|
|
|
4.3
|
|
|
|
3.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table summarizes information about stock compensation awards outstanding and exercisable at December 31, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
Average
|
|
|
All Stock Compensation Plans
|
|
Number
|
|
|
Average
|
|
|
|
|
|
Remaining
|
|
|
|
|
of
|
|
|
Exercise
|
|
|
Intrinsic
|
|
|
Contractual
|
|
|
|
|
Awards
|
|
|
Price
|
|
|
Value
|
|
|
Life (Yrs.)
|
|
|
Awards outstanding at December 31, 2012
|
|
|
1,633,405
|
|
|
$
|
26.22
|
|
|
$
|
7.3
|
|
|
|
6.29
|
|
|
Awards exercisable at December 31, 2012
|
|
|
898,793
|
|
|
|
23.82
|
|
|
|
6.2
|
|
|
|
4.46
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table summarizes information about our nonvested stock compensation awards outstanding:
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(In millions, except share and per share amounts)
|
|
|
December 31, 2012
|
|
|
December 31, 2011
|
|
|
December 31, 2010
|
|
|
All Stock Compensation Plans-
Nonvested Awards
|
|
Awards
|
|
|
|
|
|
Awards
|
|
|
|
|
|
Awards
|
|
|
|
|
|
Nonvested awards outstanding at January 1
|
|
|
660,059
|
|
|
$
|
9.80
|
|
|
|
635,726
|
|
|
$
|
7.87
|
|
|
|
721,442
|
|
|
$
|
7.46
|
|
|
Granted
|
|
|
417,420
|
|
|
|
12.36
|
|
|
|
379,425
|
|
|
|
11.42
|
|
|
|
390,750
|
|
|
|
8.62
|
|
|
Vested
|
|
|
(317,635
|
)
|
|
|
8.99
|
|
|
|
(311,630
|
)
|
|
|
7.80
|
|
|
|
(453,744
|
)
|
|
|
8.50
|
|
|
Forfeited
|
|
|
(25,232
|
)
|
|
|
11.59
|
|
|
|
(43,462
|
)
|
|
|
9.77
|
|
|
|
(22,722
|
)
|
|
|
7.59
|
|
|
Nonvested awards outstanding at December 31
|
|
|
734,612
|
|
|
|
11.55
|
|
|
|
660,059
|
|
|
|
9.80
|
|
|
|
635,726
|
|
|
|
7.87
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
We recorded stock compensation expense of $4.5, $3.2 and $4.1 in 2012, 2011 and 2010, respectively. At December 31, 2012, we had approximately $3.0 of unrecognized stock compensation expense, which is expected to be recognized over a weighted-average period of 1.4 years. We expect to satisfy the exercise of stock compensation awards by issuing new shares of common stock.
Restricted Stock Awards
The tables above exclude the impact of all restricted stock awards.
Restricted stock awards are subject to performance conditions established by the Compensation Committee of the Board of Directors. The cost of these awards, determined to be the fair market value of the shares at the date of the grant, is expensed ratably over the performance period.
In February 2011, we granted 75,000 shares of performance based restricted stock to our executive officers pursuant to our 2010 Long-Term Incentive Plan. These restricted stock awards have a grant date fair value of $30.66 per share, and vest ratably over a three-year period from grant date, provided that the Company, or certain reporting segments, meet certain established performance targets. One-third of these shares vested in February 2012, and another one-third of these shares vested in February 2013, as the performance targets were met.
In 2009, we granted 40,000 shares of performance based restricted stock with December 2012 vest date to our executive officers pursuant to our 2006 Long-Term Incentive Plan. These restricted awards have a grant date fair value of $28.42 per share. All these shares were cancelled in December 2012 as the performance targets were not met.
We recorded expense of $0.0, $1.7 and $0.5 for our restricted stock awards in 2012, 2011 and 2010, respectively. We expect to satisfy any future distribution of shares of restricted stock by issuing new shares of common stock.
We are party to a number of lawsuits arising in the normal course of business. Our energy services segment is also party to two lawsuits alleging damages caused by our coiled tubing operations in Louisiana; one lawsuit alleges damages of $28 million and the other of $9 million. We do not believe that any of the aforementioned pending litigation will have a material adverse effect on our consolidated financial statements.
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(In millions, except share and per share amounts)
|
(17)
|
Quarterly Results (Unaudited)
|
Unaudited summarized results for each quarter of the last two years are as follows:
|
|
|
2012 Quarters
|
|
|
|
|
First
|
|
|
Second
|
|
|
Third
|
|
|
Fourth
|
|
|
Performance materials
|
|
$
|
125.2
|
|
|
$
|
131.1
|
|
|
$
|
121.0
|
|
|
$
|
114.6
|
|
|
Construction technologies
|
|
|
50.9
|
|
|
|
61.4
|
|
|
|
60.6
|
|
|
|
50.2
|
|
|
Energy services
|
|
|
55.3
|
|
|
|
61.1
|
|
|
|
69.1
|
|
|
|
71.8
|
|
|
Transportation
|
|
|
11.1
|
|
|
|
11.7
|
|
|
|
10.7
|
|
|
|
10.5
|
|
|
Intersegment sales
|
|
|
(7.1
|
)
|
|
|
(7.8
|
)
|
|
|
(7.9
|
)
|
|
|
(7.9
|
)
|
|
Net sales
|
|
|
235.4
|
|
|
|
257.5
|
|
|
|
253.5
|
|
|
|
239.2
|
|
|
Performance materials
|
|
$
|
33.4
|
|
|
$
|
35.6
|
|
|
$
|
31.2
|
|
|
$
|
26.7
|
|
|
Construction technologies
|
|
|
14.6
|
|
|
|
18.7
|
|
|
|
20.1
|
|
|
|
15.1
|
|
|
Energy services
|
|
|
15.4
|
|
|
|
19.2
|
|
|
|
17.7
|
|
|
|
18.8
|
|
|
Transportation
|
|
|
1.2
|
|
|
|
1.2
|
|
|
|
1.1
|
|
|
|
1.1
|
|
|
Intersegment gross profit
|
|
|
0.1
|
|
|
|
-
|
|
|
|
(0.3
|
)
|
|
|
0.2
|
|
|
Gross profit
|
|
|
64.7
|
|
|
|
74.7
|
|
|
|
69.8
|
|
|
|
61.9
|
|
|
Performance materials
|
|
$
|
21.5
|
|
|
$
|
22.5
|
|
|
$
|
18.0
|
|
|
$
|
14.3
|
|
|
Construction technologies
|
|
|
0.9
|
|
|
|
6.3
|
|
|
|
7.0
|
|
|
|
1.4
|
|
|
Energy services
|
|
|
4.8
|
|
|
|
7.7
|
|
|
|
7.9
|
|
|
|
8.3
|
|
|
Transportation
|
|
|
0.2
|
|
|
|
0.3
|
|
|
|
0.2
|
|
|
|
0.1
|
|
|
Corporate
|
|
|
(6.0
|
)
|
|
|
(5.7
|
)
|
|
|
(5.0
|
)
|
|
|
(6.6
|
)
|
|
Operating profit
|
|
|
21.4
|
|
|
|
31.1
|
|
|
|
28.1
|
|
|
|
17.5
|
|
|
Income (loss) from continuing operations
|
|
$
|
13.5
|
|
|
$
|
21.4
|
|
|
$
|
19.0
|
|
|
$
|
11.0
|
|
|
Income (loss) on discontinued operations
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
Net income (loss)
|
|
$
|
13.5
|
|
|
$
|
21.4
|
|
|
$
|
19.0
|
|
|
$
|
11.0
|
|
|
Net income (loss) attributable to noncontrolling interests
|
|
$
|
0.1
|
|
|
$
|
(0.3
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
Net income (loss) attributable to AMCOL shareholders
|
|
$
|
13.4
|
|
|
$
|
21.7
|
|
|
$
|
19.0
|
|
|
$
|
11.0
|
|
|
Basic earnings per share attributable to AMCOL shareholders (A)
|
|
$
|
0.42
|
|
|
$
|
0.68
|
|
|
$
|
0.59
|
|
|
$
|
0.34
|
|
|
Diluted earnings per share attributable to AMCOL shareholders (A)
|
|
$
|
0.41
|
|
|
$
|
0.67
|
|
|
$
|
0.59
|
|
|
$
|
0.34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(A) Earnings per share (EPS) for each quarter is computed using the weighted-average number of shares outstanding during the quarter, while EPS for the year is computed using the weighted-average number of shares outstanding during the year. Thus, the sum of the EPS for each of the four quarters may not equal the EPS for the year.
Our construction technologies segment recorded an expense of $1.8 and $0.6 in other non-operating expense to provide for estimated losses on certain non-operating assets in the first quarter ended March 31, 2012 and fourth quarter ended December 31, 2012, respectively.
Our corporate segment recorded $0.7 of selling, general and administrative expense relating to impairment of certain corporate information technology assets in the first quarter ended March 31, 2012.
AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(In millions, except share and per share amounts)
|
|
|
2011 Quarters
|
|
|
|
|
First
|
|
|
Second
|
|
|
Third
|
|
|
Fourth
|
|
|
Performance materials
|
|
$
|
115.8
|
|
|
$
|
118.3
|
|
|
$
|
122.2
|
|
|
$
|
120.4
|
|
|
Construction technologies
|
|
|
51.7
|
|
|
|
74.8
|
|
|
|
71.0
|
|
|
|
54.4
|
|
|
Energy services
|
|
|
45.6
|
|
|
|
45.1
|
|
|
|
50.1
|
|
|
|
53.9
|
|
|
Transportation
|
|
|
12.7
|
|
|
|
14.8
|
|
|
|
14.9
|
|
|
|
11.7
|
|
|
Intersegment sales
|
|
|
(7.2
|
)
|
|
|
(9.8
|
)
|
|
|
(10.3
|
)
|
|
|
(6.3
|
)
|
|
Net sales
|
|
|
218.6
|
|
|
|
243.2
|
|
|
|
247.9
|
|
|
|
234.1
|
|
|
Performance materials
|
|
$
|
28.1
|
|
|
$
|
26.2
|
|
|
$
|
31.5
|
|
|
$
|
30.7
|
|
|
Construction technologies
|
|
|
15.3
|
|
|
|
22.2
|
|
|
|
21.8
|
|
|
|
14.6
|
|
|
Energy services
|
|
|
13.5
|
|
|
|
11.7
|
|
|
|
15.4
|
|
|
|
15.4
|
|
|
Transportation
|
|
|
1.4
|
|
|
|
1.6
|
|
|
|
1.8
|
|
|
|
1.3
|
|
|
Intersegment gross profit
|
|
|
(0.4
|
)
|
|
|
0.1
|
|
|
|
(0.1
|
)
|
|
|
0.2
|
|
|
Gross profit
|
|
|
57.9
|
|
|
|
61.8
|
|
|
|
70.4
|
|
|
|
62.2
|
|
|
Performance materials
|
|
$
|
16.1
|
|
|
$
|
13.4
|
|
|
$
|
19.5
|
|
|
$
|
18.1
|
|
|
Construction technologies
|
|
|
1.8
|
|
|
|
8.0
|
|
|
|
7.0
|
|
|
|
0.5
|
|
|
Energy services
|
|
|
5.7
|
|
|
|
3.7
|
|
|
|
5.8
|
|
|
|
6.1
|
|
|
Transportation
|
|
|
0.5
|
|
|
|
0.7
|
|
|
|
0.7
|
|
|
|
0.3
|
|
|
Corporate
|
|
|
(5.1
|
)
|
|
|
(4.9
|
)
|
|
|
(7.2
|
)
|
|
|
(4.6
|
)
|
|
Operating profit
|
|
|
19.0
|
|
|
|
20.9
|
|
|
|
25.8
|
|
|
|
20.4
|
|
|
Income from continuing operations
|
|
$
|
13.2
|
|
|
$
|
12.9
|
|
|
$
|
20.8
|
|
|
$
|
12.8
|
|
|
Income (loss) on discontinued operations
|
|
$
|
(0.1
|
)
|
|
$
|
0.2
|
|
|
$
|
(1.3
|
)
|
|
$
|
-
|
|
|
Net income
|
|
$
|
13.1
|
|
|
$
|
13.1
|
|
|
$
|
19.5
|
|
|
$
|
12.8
|
|
|
Net income (loss) attributable to noncontrolling interests
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
-
|
|
|
$
|
-
|
|
|
Net income (loss) attributable to AMCOL shareholders
|
|
$
|
13.1
|
|
|
$
|
13.1
|
|
|
$
|
19.5
|
|
|
$
|
12.8
|
|
|
Basic earnings per share attributable to AMCOL shareholders (A)
|
|
$
|
0.42
|
|
|
$
|
0.41
|
|
|
$
|
0.61
|
|
|
$
|
0.40
|
|
|
Diluted earnings per share attributable to AMCOL shareholders (A)
|
|
$
|
0.41
|
|
|
$
|
0.41
|
|
|
$
|
0.61
|
|
|
$
|
0.40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(A) Earnings per share (EPS) for each quarter is computed using the weighted-average number of shares outstanding during the quarter, while EPS for the year is computed using the weighted-average number of shares outstanding during the year. Thus, the sum of the EPS for each of the four quarters may not equal the EPS for the year.
Our performance materials segment recorded the following in the third quarter ended September 30, 2011:
|
|
-
|
Reduction to cost of sales of $1.5 resulting from the recovery of certain mining costs in our chromite operations.
|
|
|
-
|
Income from affiliates and joint ventures of $2.1 resulting from the sale of our Belgian joint venture.
|