UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K/A

(Amendment No. 1)

(Mark one)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2011

Or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to _________

Commission File Number:   1-14447

AMCOL INTERNATIONAL CORPORATION

(Exact Name of Registrant as Specified in its Charter)

DELAWARE	36-0724340
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
2870 Forbs Avenue
Hoffman Estates, Illinois	60192
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (847) 851-1500

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:	Name of Exchange on which registered:
$0.01 par value Common Stock	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.Yes  ¨  No  x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes  ¨  No  x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  x  No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  x  No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  x Accelerated filer ¨ Non-accelerated filer  ¨ Smaller reporting company  ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes  ¨  No  x

The aggregate market value of the registrant’s $.01 par value Common Stock held by non-affiliates of the registrant (based upon the per share closing price of $38.16 per share on June 30, 2011, and, for the purpose of this calculation only, the assumption that all of the registrant’s directors and executive officers are affiliates) was approximately $957.8 million.

Registrant had 31,857,733 shares of $.01 par value Common Stock outstanding as of February 6, 2012.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Company’s definitive proxy statement, which will be filed with the Securities and Exchange Commission not later than 120 days after the end of the fiscal year covered by this Form 10-K, are incorporated by reference into Part III hereof.

Explanatory Note

AMCOL International Corporation (the “Company” or “AMCOL”) is filing this Amendment No. 1 (the “Form 10-K/A”) to our Annual Report on Form 10-K for the year ended December 31, 2011 (the “Annual Report”) in order to restate our audited financial statements for the fiscal years ended December 31, 2009, December 31, 2010 and December 31, 2011 as more fully described in Note 2 to the Consolidated Financial Statements contained in this Amendment No. 1. The Form 10-K/A also reports that we have determined that a material weakness in our internal controls over financial reporting existed as of December 31, 2011 and that our disclosure controls and procedures were not effective as of December 31, 2011.

The following Items of Part II are amended in the Form 10-K/A: Item 6. Selected Financial Data; Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations; Item 8. Financial Statements and Supplementary Data; and Item 9A. Controls and Procedures.  In addition, Part IV, Item 15.  Exhibits and Financial Statement Schedule is amended and restated.

In connection with the filing of this Form 10-K/A and pursuant to SEC rules, we are including currently dated certifications of our Chief Executive Officer and Chief Financial Officer.  This Form 10-K/A does not otherwise update or amend any other Items or Exhibits as originally filed and does not otherwise reflect events occurring after the original filing date of the Annual Report.

3

PART II

Item 6. Selected Financial Data

The following is selected financial data for the Company for each of the below annual periods ending December 31st.  As more fully described in Note 2 to the Consolidated Financial Statements contained in this Amendment No. 1, certain of the amounts presented below have been restated.

 SUMMARY OF OPERATIONS

(In thousands, except ratios and share and per share amounts)

	2011			2010			2009			2008			2007
	Restated			Restated			Restated			Restated
Operations Data
Net sales	$	943,796		$	826,277		$	687,485		$	851,587			$	720,992
Gross profit		252,317			214,185			184,291			219,201				193,153
Selling, general and administrative  expenses		166,231			145,173			134,947			143,495				120,290
Operating profit		86,086			69,012			49,344			75,706				72,863
Net interest expense		(11,070	)		(9,584	)		(11,994	)		(12,152	)			(8,915	)
Net other income (expense)		233			1,241			(315	)		(5,543	)			(1,133	)
Pretax income		75,249			60,669			37,035			58,011				62,815
Income taxes		20,786			20,302			5,363			13,898				15,614
Income (loss) from affiliates and joint ventures		5,235			(10,997	)		6			(21,714	)			8,389
Income from continuing operations		59,698			29,370			31,678			22,399				55,590
Discontinued operations		(1,162	)		(887	)		259			1,862				1,140
Net income		58,536			28,483			31,937			24,261				56,730
Net income attributable to AMCOL shareholders		58,521			29,235			32,042			24,530				56,735
Per Share Data
Basic earnings (loss) per share attributable to AMCOL shareholders
Continuing operations		1.89			0.97			1.03			0.75				1.84
Discontinued operations		(0.04	)		(0.03	)		0.01			0.06				0.04
Net income		1.85			0.94			1.04			0.81				1.88
Diluted earnings (loss) per share attributable to AMCOL shareholders
Continuing operations		1.86			0.96			1.02			0.73				1.79
Discontinued operations		(0.04	)		(0.03	)		0.01			0.06				0.04
Net income		1.82			0.93			1.03			0.79				1.83
Dividends		0.72			0.72			0.72			0.68				0.60

Continued…

4

SUMMARY OF OPERATIONS

(In thousands, except ratios and share and per share amounts)

	2011			2010			2009			2008			2007
	Restated			Restated			Restated			Restated
Shares Outstanding Data
End of period		31,728,969			31,032,791			30,773,908			30,437,984			30,093,828
Weighted average for the period-basic		31,708,949			31,178,813			30,764,282			30,445,882			30,164,697
Incremental impact of stock equivalents		436,824			368,778			269,432			543,751			794,724
Weighted average for the period-diluted		32,145,773			31,547,591			31,033,714			30,989,633			30,959,421
Balance Sheet Data (at end of period)
Current assets	$	406,475		$	355,074		$	293,125		$	371,304		$	304,630
Net property and equipment		273,568			271,680			248,351			191,562			176,590
Other long-term assets		169,099			180,501			205,359			182,357			170,926
Total assets		849,142			807,255			746,835			745,223			652,146
Current liabilities		117,999			112,488			92,109			109,813			102,107
Long-term debt		260,670			235,668			207,017			256,821			164,232
Other long-term liabilities		75,587			65,040			72,170			51,147			33,157
Total equity		394,886			394,059			375,539			327,442			352,650
Other Statistics for Continuing  Operations
Depreciation, depletion and amortization	$	42,132		$	36,342		$	36,731		$	34,057		$	29,219
Capital expenditures		61,029			47,305			50,767			44,068			46,004
Capital expenditures - corporate building		-			-			9,651			16,672			7,050
Gross profit margin		26.7	%		25.9	%		26.8	%		25.7	%		26.8	%
Operating profit  margin		9.1	%		8.4	%		7.2	%		8.9	%		10.1	%
Pretax profit margin		8.0	%		7.3	%		5.4	%		6.8	%		8.7	%
Effective tax rate		27.6	%		33.5	%		14.5	%		24.0	%		24.9	%
Net profit from continuing operations margin		6.3	%		3.6	%		4.6	%		2.6	%		7.7	%
Return on average equity		14.8	%		7.6	%		9.1	%		7.2	%		17.5	%

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

We are a global company focused on long term profitability growth through the development and application of minerals and technology products and services to various industrial and consumer markets.  The majority of our revenue growth has been achieved by sustaining our products’ technological advantages, developing new products and applying them in innovative ways, bringing additional products and services to markets we already serve, and overall growth in the industries we serve.  We focus our research and development activities in areas where we can either leverage our current customer relationships and mineral reserves or enhance existing or related products and services.

The principal mineral that we utilize to generate revenues is bentonite.  We own or lease bentonite reserves in the U.S., Australia, China and Turkey.  Additionally, through our affiliates and joint ventures, we have access to bentonite reserves in Egypt, India, and Mexico.   We also develop applications for other minerals, including chromite ore from our mine in South Africa.

Bentonite is surface mined when it is commercially feasible to have it shipped to a plant for further processing, including crushing, drying, milling and packaging.  Bentonite deposits have varying physical properties which require us to identify which markets our reserves can serve.  Nicknamed the mineral of a thousand uses, bentonite’s unique characteristics include its ability to bind, swell, adsorb, control rheology, soften fabrics, and have its surface modified through chemical and physical reactions.  Our research and development activities, including our understanding of bentonite properties, mining methods, processing and application to markets are some of the core components of our longevity and future prospects.

5

We operate in five segments:  minerals and materials, environmental, oilfield services, transportation and corporate.  Both our minerals and materials and environmental segments operate manufacturing facilities in North America, Europe, and the Asia-Pacific region.  Our minerals and materials segment also owns and operates a chrome mine in South Africa.  Our oilfield services segment principally operates in the Gulf of Mexico and surrounding states and also has a growing presence in South America, Africa and Asia.  Additionally, we have a transportation segment that provides trucking services for our domestic minerals and materials and environmental segments as well as third parties.

Our customers are engaged in various end-markets and geographic regions. Customers in the minerals and materials segment range from foundries that produce castings for automotive, industrial, and transportation equipment, including heavy-duty trucks and railroad cars, to producers of consumer goods, including cat litter, cosmetics and laundry care.  Customers in our environmental segment include construction contractors, engineering contractors and government agencies.  The oilfield services segment’s customer base is primarily comprised of oil and natural gas service or exploration companies.

A significant portion of our products have been used in the same applications for decades and have experienced minimal technological obsolescence.  A majority of our sales are made pursuant to short-term agreements; therefore, terms of sale, such as pricing and volume, can change within our fiscal year.

A majority of our revenues are generated in the Americas, principally North America.  Consequently, the state of the U.S. economy, and especially the metalcasting and commercial construction industries, impacts our revenues.  Our fastest growing markets are in the Asia-Pacific and European regions, which have continued to outpace the U.S. in economic growth.

Sustainable, long-term profit growth is our primary objective.  We employ a number of strategic initiatives to achieve this goal:

● Organic growth:  The central component of our growth strategy is expansion of our product lines and market presence.  We have a history of commitment to research and development activities directed at bringing innovative products to market.  We believe this approach to growth offers the best probability of achieving our long-term goals at the lowest risk.

● Globalization:  As we have done for decades, we continue to expand our manufacturing and marketing organizations into emerging geographic markets.  We see significant opportunities in the Asia-Pacific and European regions for expanding our revenues and earnings over the long-term as a number of markets we serve, such as metalcasting and lining technologies, are expected to grow in these areas.  We expect to take advantage of these growth areas, either through our wholly-owned subsidiaries or investments in affiliates and joint ventures.

● Mineral development: Bentonite is a component in many of the products we supply.  Since it is a natural material, we must continually expand our reserve base to maintain a long-term business.  Our goal is to add new reserves to replace the bentonite mined each year.  Furthermore, we need to assure that new reserves meet the physical property requirements for our diverse product lines and are economical to mine.  Our organization is committed to developing its global reserve base to meet these requirements.

● Acquisitions: We continually seek to acquire complementary businesses, as appropriate, when we believe those businesses are fairly valued and fit into our growth strategy.

There can be no assurance that we will achieve success in implementing any one or more of the strategic initiatives described above.

6

A number of risks will challenge us in meeting our long-term objectives.  We describe certain of these risks, such as competition and our reliance on economically sensitive markets, under “Item 1A. Risk Factors” and “Item 7A. Quantitative and Qualitative Disclosures About Market Risk.”  We intend to manage these risks actively, but there can be no assurance of our success to do so.

Critical Accounting Policies and Estimates

Management’s Discussion and Analysis of Financial Condition and Results of Operations describes relevant aspects of our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the U.S.  The preparation of these financial statements requires us to select accounting policies that are appropriate for our business, and to make certain estimates, judgments and assumptions about matters that are inherently uncertain in applying those policies.  On an ongoing basis, we re-evaluate these estimates, judgments and assumptions for reasonableness because of the critical impact that these factors have on the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented.  Actual results may differ from these estimates.

Our financial statements are based in part upon critical accounting policies that involve complex and subjective decisions and assessments.  Our senior management has discussed the development, selection and disclosure of these policies with the members of the Audit Committee of our Board of Directors.  We believe our selection of accounting policies has resulted in actual results approximating the estimated amounts in each respective area.  These policies are discussed below and also in Note 1 of the Notes to Consolidated Financial Statements.  The discussion which follows should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K/A.

Valuation of Accounts Receivable

We provide credit to customers in the ordinary course of business and perform ongoing credit evaluations.  Our customer base is diverse and includes customers located throughout the world.  Payment terms in certain of the foreign countries in which we do business are longer than those that are customary in the U.S., and, as a result, may give rise to additional credit risk related to outstanding accounts receivable from these non-U.S. customers.  Likewise, a change in the financial position, liquidity or prospects of any of our customers could have an impact on our ability to collect amounts due.  While concentrations of credit risk related to trade receivables are somewhat limited by our large customer base, we do extend significant credit to some of our customers.

We make estimates of the amounts of our gross accounts receivable that will not be collectible, and record an allowance for doubtful accounts to reduce the carrying value of accounts receivable to the amount that is expected to be realized.  The allowance for doubtful accounts is established based upon our historical bad debt experience, a review of the overall aging of the accounts, and an analysis of specific customer accounts, particularly those with past-due balances.  The recorded allowance for doubtful accounts is intended to cover specific customer collection issues identified by management at the balance sheet date and to provide for potential losses from other accounts based on our historical experience.  Increases in the allowance for doubtful accounts are recorded as an expense and included in general, selling and administrative expenses in the period identified.  Our estimate of the required allowance for doubtful accounts is a critical accounting estimate because it is susceptible to changes in customer payment patterns, dynamics of the industries in which we operate, our judgments about the future collectibility of customer accounts, and other factors.

Inventory Valuation

Inventories are recorded at the lower of cost or net realizable value.  In addition, we regularly review inventory quantities on hand and evaluate significant items to determine whether they are excess or obsolete.  We record the value of estimated excess or obsolete inventory as a reduction of inventory and as an expense in cost of sales in the period it is identified.  Our estimate of excess and obsolete inventory is a critical accounting estimate because it is susceptible to changes in estimates of the future demand for inventory, customer purchasing behaviors, competition, and other factors.

7

Our process to evaluate inventories for excess or obsolete items is comprehensive.  We quantify the amount of inventory on hand that, based on projected demand, is not anticipated to be sold within the next 12 to 24 months or, based on our current product offerings, is excess or obsolete.  This involves a review by sales and production management personnel to determine whether this list of potential excess or obsolete inventory is complete.  Factors which impact this evaluation include, for example, whether there has been a change in the market or packaging for particular products, and whether there are components of inventory that incorporate obsolete formulations or technology.  In certain businesses in which we are engaged, such as our domestic cat litter and personal care business, product and packaging changes can occur rapidly and expose us to excess and obsolete inventories.

Goodwill and Long-lived Assets

Our goodwill and intangible assets have largely arisen from business combinations or acquisitions that we have completed.  We follow the guidance in Accounting Standard Codification (“ASC”) Topic 805 related to business combinations when initially recognizing the fair value of assets and liabilities acquired in a business combination.  Under these guidelines, we are required to recognize the fair value of the intangible assets we acquire in a business combination.  These are typically customer related assets, trademarks and trade names and non-compete agreements.  We are required to make significant estimates as to the nature of these customer relationships including future profitability and longevity of the relationships. We are also required to make significant estimates regarding the probability and impact of competition from former owners or management employees of businesses we acquire.  These estimates are critical as we make them from the viewpoint of a market participant; they involve forecasting future results; and they contain uncertainties regarding the customers served by the acquired business.

For property, plant and equipment and intangible assets with finite lives, we evaluate the recoverability of these assets whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable.  For goodwill and indefinite lived intangible assets, we perform our impairment assessment annually or more frequently if impairment indicators arise.  This assessment is made at the reporting unit level for goodwill and at the individual asset level for indefinite lived intangible assets.

In conducting our goodwill impairment tests and in testing the recoverability of long-lived assets, we primarily use discounted cash flow models to estimate the fair value of our reporting units and long-lived assets.  Critical assumptions used in conducting these tests include expectations of our business performance and financial results, useful lives of assets, and discount rates as well as comparable market data and our market capitalization.

In evaluating the recoverability of our indefinite lived intangible assets, we make several critical assumptions as to the applicable market royalty rate and discount rates as well as the future performance of the assets underpinning those intangibles.

Our estimates related to the carrying values of these assets are considered to be critical accounting estimates because they are susceptible to change from period to period based on our judgments about a variety of factors and due to the uncontrollable variability of market factors underlying them.  For example, judgment is required to determine whether events or changes in circumstances indicate that the carrying value of the assets may not be recoverable.  In addition, in performing assessments of the carrying values of these assets, we must make judgments about our future business; economic, regulatory, and political conditions affecting these assets; appropriate risk-related rates for discounting estimated future cash flows; and reasonable estimates of disposal values.

Based on business conditions and market values that existed at October 1, 2011, we concluded that no impairment loss was required.  However, the market value of our common stock continues to fluctuate and if, among other factors, (1) our equity value declines, (2) the fair value of our reporting units decline, (3) we don’t achieve our expected future results, or (4) the adverse impacts of economic or competitive factors are worse than anticipated, we could conclude in future periods that impairment losses are required in order to reduce the carrying value of our goodwill, other intangible assets, or other long-lived assets.  Depending on the severity of the changes in the key factors underlying the respective impairment tests, such losses could be significant.

8

Retirement Benefits

We sponsor a qualified defined benefit pension plan for substantially all of our U.S. employees hired before January 1, 2004.  We also sponsor a supplementary pension plan (“SERP”) that provides benefits in excess of qualified plan limitations for certain employees.  In order to measure the expense and obligations associated with these retirement benefits, we estimate various factors used in valuing the associated assets and liabilities, such as discount rates, expected return on plan assets, rate of compensation increases, employee turnover rates, retirement rates, mortality rates and other factors.  Our benefit plan committee determines the key assumptions related to the discount rate, expected investment rate of return, long term rate of compensation increases, and other assumptions based on consultation with our actuaries.  The most important assumptions that affect the computations are the discount rate and the expected long-term rate of return on plan assets.

Our discount rate assumption is intended to reflect the rate at which the retirement benefits could be effectively settled based upon the assumed timing of the benefit payments.  In determining the discount rate for December 31, 2011, we utilized the Aon Hewitt AA Bond Universe yield curve, which is a hypothetical double A yield curve comprised of a series of annualized individual discount rates. The discount rates are derived from hypothetical zero coupon bonds which are given equal maturities within their maturity groups.  The discount rate used to determine our retirement pension benefit obligation at December 31, 2011 was 4.70% for the qualified defined benefit plan and 4.63% for our SERP.  A 50 basis point decrease in this discount rate would have increased the benefit obligation at December 31, 2011 by $5.7 million and would increase our net cost expected in 2012 by 16%, or $625 thousand.  Likewise at December 31, 2011, a 50 basis point increase in the discount rate would have decreased the benefit obligation by $5.1 million and would decrease our net cost expected in 2012 by 15%, or $568 thousand.

The expected long-term rate of return on defined benefit plan assets was based on our current asset allocations and their historical long-term performance, adjusted for existing market conditions.  Information regarding our asset allocations is included in the Notes to Consolidated Financial Statements in "Item 8. ­Financial Statements and Supplementary Data."  We assumed a weighted-average expected long-term rate of return on pension plan assets of 7.50% to determine our net defined benefit pension plan expense in 2011.  A 50 basis point decrease in the expected return would increase the net cost expected in 2012 by approximately 6%, or $173 thousand.  Likewise, a 50 basis point increase in the expected return would decrease the net cost expected in 2012 by approximately 6%, or $173 thousand.

Income Taxes

Our effective tax rate is based on the income, statutory tax rates and tax planning opportunities available to us in the various jurisdictions in which we operate.  Significant judgment is required in determining our effective tax rate and in evaluating our tax positions.  We account for our tax positions in accordance with the guidance for accounting for uncertainty in income taxes codified in ASC Topic 740, and thus our effective tax rate includes the impact of changes to our liability for uncertain tax positions.

Our estimates of income tax items, expenses and reserves are considered to be critical accounting estimates because they are susceptible to change from period to period based on rulings by various taxing authorities, changes in tax laws, changes in projected levels of taxable income and availability of future tax planning strategies.  On a quarterly basis, these estimates are more critical as they involve estimates of our taxable income expected for the remainder of the fiscal year by taxing jurisdiction.

In addition, our effective tax rate reflects the impact of certain undistributed foreign earnings for which no U.S. taxes have been provided because such earnings are planned to be reinvested indefinitely outside the U.S.  Most of the amounts held outside the U.S. could be repatriated to the U.S., but would be subject to U.S. federal income taxes and foreign withholding taxes, less applicable foreign tax credits or deductions.

Valuation allowances are recorded, if necessary, to measure a deferred tax asset at the amount that will more likely than not be realized.  Both positive and negative evidence are considered in forming our judgment as to whether a valuation allowance is appropriate.  Changes in a valuation allowance are recorded in the period when we determine events have occurred that will impact the realizable value of the asset.

9

A number of years may elapse before a particular matter is audited and finally resolved.  Audits of our U.S. federal income tax returns have been completed for our income tax returns relating to fiscal years of 2009 and prior.  State income tax returns are audited less frequently.  Unfavorable settlement of any particular issue would require use of our cash and could result in the recording of additional tax expense.  Favorable resolution would be recognized as a reduction to our tax provision in the year of resolution.

Accounting for Long Term Contracts

Our Environmental and Oilfield Services segments generate sales and revenues under long term contracts with customers.  Where applicable, these revenues and related costs are accounted for under the percentage of completion revenue recognition method whereby revenues are recognized as completion occurs, which can be generally measured by either the costs incurred in relation to the total expected costs to complete the contract or the amount of product installed in relation to the total amount expected to be installed.  In addition, we recognize losses on contracts in the period in which we first forecast a loss will occur on the overall contract.  This revenue recognition methodology requires that we continually update our estimates of costs to complete a contract.  Thus, our sales and revenues and related costs are subject to fluctuation depending on changes in estimates of the costs to complete a contract overall.

10

Results of Operations for the Three Years Ended December 31, 2011

The discussion below references the consolidated statement of operations included in “Item 8. Financial Statements and Supplementary Data” and, as more fully described in Note 2 to the Consolidated Financial Statements contained in this Amendment No. 1, is based on amounts which have been restated.

Consolidated Income Statement Review

The following table compares our operating results for the past three years.

	Year Ended December 31,
Consolidated	2011  Restated			2010 Restated			2009 Restated			2011 vs. 2010			2010 vs. 2009
	(Dollars in Thousands)
Continuing Operations
Net sales	$	943,796		$	826,277		$	687,485			14.2	%		20.2	%
Cost of sales		691,479			612,092			503,194
Gross profit		252,317			214,185			184,291			17.8	%		16.2	%
margin %		26.7	%		25.9	%		26.8	%
Selling, general and administrative expenses		166,231			145,173			134,947			14.5	%		7.6	%
Operating profit		86,086			69,012			49,344			24.7	%		39.9	%
margin %		9.1	%		8.4	%		7.2	%
Other income (expense):
Interest expense, net		(11,070	)		(9,584	)		(11,994	)		15.5	%		-20.1	%
Other, net		233			1,241			(315	)		*			*
		(10,837	)		(8,343	)		(12,309	)
Income before income taxes and income (loss) from affiliates and joint ventures		75,249			60,669			37,035
Income tax expense		20,786			20,302			5,363			2.4	%		278.6	%
Income before income (loss) from affiliates and joint ventures		54,463			40,367			31,672
Income (loss) from affiliates and joint ventures		5,235			(10,997	)		6			*			*
Income from continuing operations		59,698			29,370			31,678
Discontinued Operations
Income (loss) on discontinued operations		(1,162	)		(887	)		259			*			*
Net income (loss)		58,536			28,483			31,937			105.5	%		-10.8	%
Net income (loss) attributable to noncontrolling interests		15			(752	)		(105	)		*			*
Net income attributable to AMCOL shareholders		58,521			29,235			32,042			100.2	%		-8.8	%
* Not meaningful

11

The following analysis comments on the significant fluctuations in our results for the past three years by material category.  The comments are organized in relation to our company’s overall results in general followed by a detailed discussion of these general comments as they relate to each segment individually and in detail.

Net sales

 The following tables detail components of consolidated 2011 and 2010 sales changes over their respective prior years:

2011 vs. 2010 Restated	Base Business			Acquisitions			Foreign Exchange			Total
Minerals and materials		6.8	%		0.0	%		0.5	%		7.3	%
Environmental		2.4	%		0.1	%		0.7	%		3.2	%
Oilfield services		4.7	%		0.0	%		0.3	%		5.0	%
Transportation & intersegment sales		-1.3	%		0.0	%		0.0	%		-1.3	%
Total		12.6	%		0.1	%		1.5	%		14.2	%
% of change		88.9	%		0.7	%		10.4	%		100.0	%

2010 vs. 2009 Restated	Base Business			Acquisitions			Foreign Exchange			Total
Minerals and materials		10.7	%		0.0	%		1.0	%		11.7	%
Environmental		2.8	%		0.2	%		0.3	%		3.3	%
Oilfield services		4.5	%		0.0	%		0.4	%		4.9	%
Transportation & intersegment sales		0.3	%		0.0	%		0.0	%		0.3	%
Total		18.3	%		0.2	%		1.7	%		20.2	%
% of change		90.6	%		1.0	%		8.4	%		100.0	%

Base or organic business represents operations owned for more than one year whereas acquisitions are those owned less than one year.  We did not make any significant acquisitions in the past three years.  Foreign exchange isolates the impact of currency changes over the prior-year period.

The impact of the 2008 – 2009 recession is evident in our revenue fluctuations as shown in the above tables.  As the global economic recovery was underway in 2010, sales increased organically in most of our segments.  The largest increase was in our minerals and materials segment, which significantly benefitted from increased sales of its metalcasting products, especially to those service customers supplying the automotive industry.  This growth continued into 2011 with approximately 47% of our consolidated revenue growth occurring in our metalcasting product line within our minerals and materials segment.  Growth in our oilfield services segment comprised approximately 35% of our overall revenue growth in 2011, notably due to growth in our coil tubing services.

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The following table provides a comparison of consolidated sales by geographical region over the last three years:

	2011 Restated			2010 Restated			2009 Restated
Americas		62.5	%		62.6	%		63.7	%
EMEA *		23.3	%		22.5	%		24.4	%
Asia Pacific		14.2	%		14.9	%		11.9	%
Total		100.0	%		100.0	%		100.0	%

* Europe, Middle East and Africa

Inter-regional sales in the table above are eliminated in Americas.

In 2010, we experienced strong growth in our Asia Pacific revenues largely led by growth of our metalcasting and laundry care products.  In 2011, our EMEA revenues increased as a percentage of total revenues given the growth in our chromite related products, which are sourced from our South African operations.

Gross profit

Approximately 80% of the increase in gross profits in 2011 results from increased sales.  As to the remaining increase, our minerals and materials segment incurred $5.7 million of unusual costs in 2010 associated with operational issues in our domestic personal care product line.  Excluding these unusual costs, 2010 gross margin would have been 26.6%, or roughly equivalent to the 26.7% gross margin in 2011.

Gross profit increased in 2010 due to the increase in sales.  The increase in gross margins in our minerals and materials segment, which suffered from the $5.7 million of unusual costs within our domestic personal care product line, was overshadowed by the decrease in margins in all of our other segments.

Selling, general, and administrative expenses (SG&A)

In 2011, SG&A expenses increased across all segments.  See each segment’s analysis and discussion of results later herein for further details.  In 2010, SG&A expenses increased mostly due to increased employee compensation and related expenses.  Amounts for 2010 also include $2.7 million of expenses associated with the retirement of our previous Chief Executive Officer.

Operating profit

In both 2011 and 2010, the increase in operating profit follows the increase in gross profit and was generated from organic growth as opposed to acquisitions or currency movements.  Operating profit in 2010 includes $6.3 million of unusual expenses in our domestic personal care business, as previously discussed, as well as $2.7 million of expenses associated with the retirement of our previous chief executive officer.  Excluding both of these expenses, operating profit margin in 2011 (9.1%) is not significantly different to 2010’s margin (9.4%).  Operating profit in 2010 increased over the 2009 amount due to the operating leverage; that is, the incremental sales were generated without commensurate increases in costs.

Net interest expense

Net interest expense increased in 2011 mostly due to increased average debt levels throughout the year.  As our business grew throughout the year, we increased our debt levels to fund the corresponding increases in working capital required to fuel that growth.  We had $247.3 million of average debt outstanding during 2011 at an average interest rate of 4.5%.

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Net interest expense decreased in 2010 due to a decrease in average debt levels.  Average debt went from $237.0 million in 2009 to $221.1 million in 2010 while average interest rates decreased from 5.1% in 2009 to 4.3% in 2010.

Other, net

Other, net is primarily comprised of gains and losses on foreign currency transactions and foreign currency derivative instruments. We are particularly sensitive to currency exchange rate fluctuations between the following currency pairs: a) the Euro to the British pound (GBP) and the Polish zloty (PLN), b) the South African Rand (ZAR) to the USD and Australian dollar (AUD), c) the GBP to the Danish kroner (DKK) and the Swiss franc (SEK), and d) the USD to the Indian rupee (INR), the Thai baht (THB), and the Turkish lira (TRY). We continue to work to reduce the effect of foreign currency exposures in order to record neither a gain nor a loss on our foreign currency transactions.  Where possible, we identify currency fluctuation exposures and attempt to mute their impact through the effective use of derivative instruments.  Our future levels of losses or gains on foreign currency transactions and derivatives will depend on fluctuations in the currency rates we are exposed to as well as the hedging activities we undertake, if any.

The fluctuations in Other, net between each year of 2009 to 2011 reflect the effectiveness of the actions we have taken, or not taken as the case may be, to hedge our currency exposures.

Income taxes

The largest factors giving rise to the changes in our effective income tax rates between years lies in the amount of depletion deductions and income generated in domestic versus foreign jurisdictions, which have lower tax rates.  A schedule reconciling the U.S. federal statutory income tax rate to our effective rate is included in Note 8 of the Notes to Consolidated Financial Statements.

Our effective income tax rate was 27.6%, 33.5%, and 14.5% in 2011, 2010, and 2009, respectively.  Our effective tax rate in 2011 is less than that in 2010 due to the fact that 2010 includes expenses of $3.4 million to reserve for income tax benefits in our foreign operations which may not be realized.

As compared to 2009, income tax expense in 2010 increased due to the previously mentioned $3.4 million reserve.  In addition, 2009 benefitted from the fact that a greater portion of our income was generated in our foreign operations, an approximate $3.4 million benefit, and the resolution to certain audit matters.  The resolution of these matters resulted in increased income taxes upon settlement (a $2.1 million increase in expense) and the elimination of a reserve for some uncertain tax matters (a $2.7 million benefit).

Income (loss) from affiliates and joint ventures

In 2010, we recorded losses of $7.2 million and $6.9 million from our Russian and Belgian joint ventures, respectively, which accounted for the overall loss from our affiliates and joint ventures.  We recorded an impairment on our investment in the Russian joint venture due to the continued poor financial performance of that entity which was not expected to recover.  Our Belgian joint venture impaired its fixed assets due to its inability to generate profits and our opinion that it will not be able to do so given the fundamentals of the business and the environment in which it operates.  Our investments in these ventures was reduced to zero as of December 31, 2010.

In 2011, we sold our Belgian and Russian joint ventures and recorded $1.4 million of income from these ventures in this year.

Excluding our investments in Russia and Belgium, we recorded income of $3.8 million, $3.1 million and $1.7 million from our affiliates and joint ventures in each of 2011, 2010 and 2009, respectively.  Income generated from these investments increased in each of 2010 and 2011 due to improved financial performance of our Japanese joint venture and our Mexican joint venture.  The Japanese venture has benefitted from the economic recovery in Japan in 2010 and increased sales of environmental segment related products after the tsunami in March 2011.  Our Mexican joint venture has experienced improved performance in its laundry care business.

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Income (loss) on discontinued operations

In 2011, we sold our domestic contracting services business due to its continued poor financial performance.  The amounts reflected in Income (loss) from discontinued operations relate solely to these domestic operations, and, as of December 31, 2011, our Consolidated Balance Sheet includes a $5.7 million receivable owed to us as a result of the sale of these operations.

Net income attributable to AMCOL shareholders

The increase in net income attributable to AMCOL shareholders in 2011 is due to increased operating profit in our minerals and materials and oilfield services segments and increased income from affiliates and joint ventures.

The decreased income attributable to AMCOL shareholders in 2010 resulted from an increase in operating profit being offset by increased income tax expense and losses from joint ventures and affiliates.

Earnings per share (diluted)

Our weighted average number of shares of common stock and common stock equivalent shares outstanding  increased 1.9% in 2011 and 1.7% in 2010 due to exercises of stock compensation awards.  The increases have reduced our diluted earnings per share by $0.04 in 2011 and $0.01 in 2010.  The remaining fluctuations in our diluted earnings per share results from the changes in Net income attributable to AMCOL shareholders, as previously discussed.

Segment Reviews

The following discussions highlight the operating results for each of our five segments.  Unless otherwise stated, the fluctuations in operating profit and operating profit margin reflect the changes in gross profit, gross margin, and SG&A expenses.

Minerals and Materials Segment

	Year Ended December 31,
Minerals and Materials	2011 Restated				2010 Restated				2009 Restated				2011 vs. 2010			2010 vs. 2009
	(Dollars in Thousands)
Net sales	$	476,700	100.0	%	$	416,495	100.0	%	$	336,272	100.0	%		14.5	%		23.9	%
Cost of sales		360,169	75.6	%		320,375	76.9	%		265,150	78.8	%
Gross profit		116,531	24.4	%		96,120	23.1	%		71,122	21.2	%		21.2	%		35.1	%
Selling, general and administrative expenses		49,387	10.4	%		42,571	10.2	%		37,429	11.1	%		16.0	%		13.7	%
Operating profit		67,144	14.0	%		53,549	12.9	%		33,693	10.1	%		25.4	%		58.9	%

Revenues Originating From- Minerals and Materials	Americas			EMEA			Asia Pacific			Total
Fiscal year:
2011 Restated		59.8	%		19.6	%		20.6	%		100.0	%
2010 Restated		61.2	%		18.4	%		20.4	%		100.0	%
2009 Restated		63.0	%		20.1	%		16.9	%		100.0	%

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Minerals and Materials Product Line Sales	Year Ended December 31,
	2011 Restated		2010 Restated		2009 Restated		2011 vs. 2010			2010 vs. 2009
	(Dollars in Thousands)
Metalcasting	$	251,565		196,663	$	139,949		27.9	%		40.5	%
Specialty materials		105,800		107,287		97,989		-1.4	%		9.5	%
Pet products		56,208		61,971		66,441		-9.3	%		-6.7	%
Basic minerals		54,615		48,886		27,901		11.7	%		75.2	%
Other product lines		8,512		1,688		3,992		404.3	%		-57.7	%
Total		476,700		416,495		336,272

Overall trends

Revenues in our Asia-Pacific region continue to comprise a greater portion of our overall revenues due to growth in that region, especially China.  In addition, our chromite operations are experiencing strong revenue growth in 2011 given the nescient nature of these products – they increased $20.7 million in 2011 and account for the increase in EMEA revenues as a percentage of our total revenues.

Our metalcasting revenues increased each year from 2009 as we continue to see strong demand from the automobile and heavy equipment industries.  This is especially true in the USA and China, our two largest markets.  In addition, this product line includes sales of our core chromite products, which generated sales of $5.7 million, $9.1million, and $33.7 million in 2009, 2010, and 2011, respectively.

Our pet product sales have decreased in the three year period due mostly to two factors:   a $2.2 million decrease in bulk sales in 2010 and a $3.6 million decrease in sales to a large, big box retailer in 2011.  The bulk sales decreased due to price sensitivity from one of our customers after we increased our selling prices.  One of our big box retailers underwent an internal product re-launch and is also shifting its focus towards proprietary branded product rather than its private labeled product we supply. These events adversely affected our sales.

Basic minerals includes revenues principally from our petroleum or drilling products and agriculture products.  Our petroleum product revenues have increased from $15.2 million in 2009 to $29.1 million in 2011 due to increased drilling activities for oil and gas wells.  Our agriculture products, primarily additives for animal feed, have increased in revenues from $4.8 million in 2009 to $11.0 million in 2011 due principally to increased demand from a European customer.

Our other product line is comprised mostly of environmental segment products sold by entities in our minerals and materials segment in geographic markets where the environmental segment does not have a presence.

2011 vs. 2010

In 2011, our minerals and materials segment continued its strong performance from 2010 for largely the same reasons.  Sales increased in three of our product lines:  metalcastings by $54.9 million, basic minerals by $5.7 million (due to growth in our agriculture products), and other product lines by $6.8 million (due to increased sales of environmental segment products in Turkey).  We continued to raise selling prices around the world, but most significantly in the USA and Asia Pacific due to the strong demand for our metalcasting products.  Price increases accounted for approximately 13% of the increase in metalcasting sales. In addition, we increased our volumes as well, led by demand for new chromite product from our South Africa mine. Increased volume accounted for approximately 87% of the increase in metalcasting sales.

Our gross profits increased due to the increase in sales, and gross margins increased 130 basis points.  However, the 2010 gross margin was depressed due to the inclusion of $5.7 million of costs included within cost of sales that we believe were unusual and resulted from operational issues in our domestic personal care business.  Excluding this $5.7 million from 2010 results, gross margin would have been 24.4% in both 2010 and 2011.  The relatively stable gross margin reflects selling price increases, as previously noted, substantially offset by increases in production costs, such as fuel, transportation rates, and other raw materials.

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SG&A expenses increased in 2011 to support the growth in business.  Approximately $2.8 million of the increase resulted from headcount, compensation and benefits increases, and $3.1 million of the amount resulted from increases in support functions and investments.

2010 vs. 2009

Our minerals and materials segment achieved strong performance in 2010 mostly due to our metalcasting business and growth in the Asia Pacific region.  Sales to the metalcasting market increased 41% in 2010 and comprise 71% of the total segment’s increase in revenues.  The increase results from increased demand for automobiles, heavy equipment, and related castings following the global economic recovery from the recession in 2008-2009.  Also, sales in the Asia Pacific region continue to benefit from investments we’ve made in that region; our basic minerals product line sales increased $21.0 million due to increased demand for drilling fluids for oil and gas well drilling.

The increase in sales led to the increase in gross profits.  Nearly all of the increase in metalcasting sales was due to increased volumes.  Given our emphasis on streamlining operations over the last several years, we were able to achieve these volumes with greater production efficiencies, leading to enhanced gross margins.  We did, however, have $5.7 million of costs included within cost of sales that we believe were unusual and resulted from operational issues in our domestic personal care business.

SG&A expenses increased due to increased employee headcount, employee compensation, and employee benefit expenses.

Environmental Segment

Environmental	Year Ended December 31,
	2011 Restated				2010 Restated				2009 Restated				2011 vs. 2010			2010 vs. 2009
	(Dollars in Thousands)
Net sales	$	251,907	100.0	%	$	225,544	100.0	%	$	202,511	100.0	%		11.7	%		11.4	%
Cost of sales		177,982	70.7	%		156,177	69.2	%		133,649	66.0	%
Gross profit		73,925	29.3	%		69,367	30.8	%		68,862	34.0	%		6.6	%		0.7	%
Selling, general and administrative expenses		56,576	22.5	%		48,920	21.7	%		44,938	22.2	%		15.7	%		8.9	%
Operating profit		17,349	6.8	%		20,447	9.1	%		23,924	11.8	%		-15.2	%		-14.5	%

Revenues Originating From - Environmental	Americas			EMEA			Asia Pacific			Total
Fiscal year:
2011 Restated		44.0	%		48.0	%		8.0	%		100.0	%
2010		44.9	%		45.9	%		9.2	%		100.0	%
2009 Restated		44.8	%		47.4	%		7.8	%		100.0	%

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Environmental Product Line Sales	Year Ended December 31,
	2011 Restated		2010 Restated		2009 Restated		2011 vs. 2010			2010 vs. 2009
	(Dollars in Thousands)
Lining technologies	$	105,623	$	111,075	$	100,743		-4.9	%		10.3	%
Building materials		78,303		58,759		54,724		33.3	%		7.4	%
Contracting services		36,027		30,968		25,426		16.3	%		21.8	%
Drilling products		31,954		24,742		21,618		29.1	%		14.5	%
Total		251,907		225,544		202,511

2011 vs. 2010

Approximately 22% of the growth in revenues was derived from favorable foreign currency exchange rate movements, mostly between the USD and the PLN and GBP, with the remainder coming from organic growth.

Substantially all of the increase in our building materials product line revenues is due to increases in volume resulting from greater traction of sales within our distribution network as well as increased sales of polymer based products and associated ancillary products.  Our drilling product line also experienced strong revenue growth due to increased sales of value added, polymer based products and expansion into new geographic markets in Europe.  Contracting services revenue represents revenues earned overseas as we sold our domestic contracting services business in 2011; in the near future, we intend to reduce our footprint in our Irish contracting services product line by closing the facility providing those services.

Gross profits increased due to the increase in sales.  Gross profit margins, however, decreased 150 basis points due to increased production and raw material costs in addition to decreased profitability of jobs within our contracting services product line.  In the US, we experienced increased overhead costs as volumes decreased, thereby spreading the overhead costs amongst a smaller volume of products produced.  In Europe, resin costs increased to levels not seen in recent years and production costs increased as a result of the need to reduce the moisture content of minerals used in production.  In addition, the profitability of contracts in our contracting services product line deteriorated due to increased costs to complete our performance under these contracts.

SG&A expenses increased $7.7 million, most of which occurred in the US and Europe.  Approximately 13% of the total increase relates to fluctuations in foreign currency exchange rates between the USD and other European currencies.  In Europe, we recorded $2.3 million of bad debt expenses, approximately $1.2 of which was for a single contracting services customer in our Irish branch.  We also had $0.7 million of increased legal expenses.  In the US, employee compensation increased $1.6 million due to improved performance of our building materials and drilling product lines.  We also increased expenses by $0.9 million to expand our product lines, including establishing a presence in India.

2010 vs. 2009

Base business accounted for 84% of the increase in net sales.  Favorable foreign currency exchange rate movements, mostly of the U.S. dollar versus the Polish zloty and the British pound, and acquisitions split the remaining growth.

Although we do not believe the construction market has fully recovered, the growth in revenues in 2010 occurred across all product lines in response to increased construction activity and a general increase in economic activity.   In addition, we’ve also increased our contracting services presence in Europe by installing our products on job sites, especially as they relate to infrastructure projects.

Gross profit and gross margin decreased due to increased competition in lower margin businesses, such as lining technologies and contracting services.  Our lining technologies business continues to suffer from price competition.  Our contracting services revenues were concentrated in projects which were less value added to the end customer, were competitively bid, and experienced significant increases in costs.

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SG&A expenses increased mostly due to increased costs associated with expanding our presence in Ireland and Poland.  Operating profit and operating margin decreased due to the decrease in gross profits and increased GS&A expenses.

Oilfield Services Segment

Oilfield Services	Year Ended December 31,
	2011 Restated				2010 Restated				2009 Restated				2011 vs. 2010			2010 vs. 2009
	(Dollars in Thousands)
Net sales	$	194,735	100.0	%	$	153,550	100.0	%	$	119,821	100.0	%		26.8	%		28.1	%
Cost of sales		138,778	71.3	%		110,681	72.1	%		81,101	67.7	%
Gross profit		55,957	28.7	%		42,869	27.9	%		38,720	32.3	%		30.5	%		10.7	%
Selling, general and administrative expenses		34,731	17.8	%		29,215	19.0	%		26,459	22.1	%		18.9	%		10.4	%
Operating profit		21,226	10.9	%		13,654	8.9	%		12,261	10.2	%		55.5	%		11.4	%

Revenues Orginating From - Oilfield services	Americas			EMEA			Asia Pacific			Total
Fiscal year:
2011 Restated		87.2	%		4.4	%		8.5	%		100.0	%
2010 Restated		84.1	%		4.4	%		11.4	%		100.0	%
2009		89.2	%		3.3	%		7.5	%		100.0	%

Overall trends

Our oilfield services segment is comprised of various product lines which differ in their proprietary technology, the demand for their services, and the location of where services are performed.  Our most value added services center around our proprietary water treatment technologies.  After the Deepwater Horizon oil spill (unrelated to our company) in April 2010, less oil well drilling activity has occurred in the Gulf of Mexico and thus the demand for our water treatment services has decreased.  As a result of the decrease for offshore services, many oilfield service providers relocated assets to onshore activities.  The onshore market for our services has been more competitive and thus this shift in customer assets decreased the pricing for our services due to increased competition.

However, recent technologies in horizontal drilling (a service we do not provide) have allowed oil and gas producers to increase the productivity of oil and gas wells in shale regions.  Our coil tubing services provide oil and gas producers the ability to increase production of their already horizontally drilled wells through a process called hydraulic fracturing or “fracking”, whereby they create holes / fractures in the shale bed to increase the flow of oil and gas reserves to the well head.  Thus, we have experienced significant growth in our coil tubing services, which provide service technologies to the well operators to aid in the fracking process.  Currently, we are focused on providing coil tubing services to oil well as opposed to gas well operators.

We have typically entered our foreign markets by securing contracts and forming relationships with large exploration and production companies in a particular region, most recently in Brazil and Australia.  The fluctuations in revenue derived from our Asia Pacific region as a percentage of total revenues reflects the $5.5 million of revenues earned in our Australia facility from two large customer contracts that ended in 2010.

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2011 vs. 2010

Approximately 60% of the increase in revenues occurred in our coil tubing services due to the growth in fracking jobs in the US shale regions, primarily in Texas and Louisiana where our services and equipment are based.  The remaining growth occurred primarily in our well testing services and pipeline services.  Well testing is benefitting from increased demand in the shale regions due to the growth in production there and an increase in offshore work as compared to the significantly depressed level of activity in the Gulf of Mexico in 2010 after the Horizon spill.  Pipeline services are benefitting from increased demand due to increased prices for oil.

Gross profits increased with the increase in revenues and gross margins increased slightly, reflective of the increased profitability of our foreign operations.

Approximately half of the increase in SG&A expenses is due to increased employee compensation, mostly variable components such as commissions and bonuses, due to the improved financial performance of the segment.  The remaining increase is comprised of various factors (such as increased sales and use tax expenses, information technology equipment expenses, and increased selling expenses related to gaining new business from customers) that are each individually insignificant.

2010 vs. 2009

Nearly all of the growth in revenues was derived organically, and our coil tubing operations accounted for approximately half of the increase.  In 2010, we restructured our coil tubing operations and management which, when combined with the resurgence in activity within our onshore domestic market, led to significant increases in revenues and profitability.  The remaining increase in revenues was derived from our foreign operations, which has been an area of focus for us.  For example, our Australian facility generated $5.5 million of revenue from two large contracts in that region.

Gross profit increased due to the increased revenues and increased margins generated from our coil tubing operations.  Overall, however, our gross margins decreased due to decreases in our other service lines.  The decrease resulted from a decrease in revenues in our larger service offerings, such as filtration and well testing, which have a greater fixed cost structure.  In addition, 2010 had a decrease in the mix of services as revenues were less concentrated in higher profit businesses, such as our pipeline and filtration services, partly due to the drilling moratorium that existed for much of 2010 after the Horizon accident.  The last factor affecting the decrease in margins across other business lines was an increase in costs to service some customers in international markets.

SG&A expenses increased due to increased employee compensation and benefits as well as increased bad debt expenses.

Transportation Segment

Transportation	Year Ended December 31,
	2011				2010				2009				2011 vs. 2010			2010 vs. 2009
	(Dollars in Thousands)
Net sales	$	54,113	100.0	%	$	52,225	100.0	%	$	46,642	100.0	%		3.6	%		12.0	%
Cost of sales		47,972	88.7	%		46,360	88.8	%		41,114	88.1	%
Gross profit		6,141	11.3	%		5,865	11.2	%		5,528	11.9	%		4.7	%		6.1	%
Selling, general and administrative expenses		3,900	7.2	%		3,435	6.6	%		3,365	7.2	%		13.5	%		2.1	%
Operating profit		2,241	4.1	%		2,430	4.6	%		2,163	4.7	%		-7.8	%		12.3	%

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2011 vs. 2010

In 2011, revenues increased due to $3.1 million of increased fuel surcharges, which overshadowed the decrease in overall number of loads shipped.  The number of loads shipped reflects a change in supply as opposed to a change in demand as competition for drivers has increased with the growth in jobs, mostly in the oil and gas industry due to the growth in fracking work in the North Dakota shale and surrounding region.  Gross profits increased due to the increase in sales.

2010 vs. 2009

In 2010, revenues increased almost equally between increased fuel surcharges and overall increased demand for consumer product shipments.  The increased concentration of revenues in fuel surcharges also contributed to the decrease in gross margins as, for the most part, we pass these costs through to customers.  Operating profits increased commensurate with increased sales and gross profit levels.

Corporate Segment

Corporate	Year Ended December 31,
	2011 Restated			2010 Restated			2009 Restated			2011 vs. 2010			2010 vs. 2009
	(Dollars in Thousands)
Intersegment sales	$	(33,659	)	$	(21,537	)	$	(17,761	)
Intersegment cost of sales		(33,422	)		(21,501	)		(17,820	)
Gross profit		(237	)		(36	)		59
Corporate selling, general and administrative expenses		21,637			21,032			22,756			2.9	%		-7.6	%
Operating loss		(21,874	)		(21,068	)		(22,697	)

Intersegment sales occur most notably for sales a) from our transportation segment to our minerals and materials and environmental segments and b) from our minerals and materials segment to our environmental and oilfield services segments.  Intersegment sales and costs reported above reflect the elimination of these transactions and are related to changes in sales in each of these businesses.  As evidenced by the small amount of gross profit eliminated above, these intersegment sales are not material to the individual segments or their operating profit, our measure of segment performance.

In general, our corporate SG&A costs include costs for our corporate executive team, public company stewardship expenses, and certain centralized administration costs, especially as they relate to human resource, information technology, corporate research and development, and finance functions.

2011 vs. 2010

Excluding the $2.7 million of expenses incurred in 2010 for the retirement of our former Chief Executive Officer, SG&A expenses increased $3.3 million.  The increase relates to expenses incurred to address issues at our South African operations, increased expenses associated with overseeing strategic initiatives in our foreign operations, and increased infrastructure expenses to support our overall operations, such as new human resource management initiatives.

2010 vs. 2009

SG&A expenses in 2010 include approximately $2.7 million of costs associated with the retirement of our former Chief Executive Officer.  Excluding these expenses, SG&A costs decreased largely due to decreased employee benefit costs.

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Consolidated Balance Sheet Review

The following paragraphs under this Consolidated Balance Sheet Review heading discuss the fluctuations in and balances of certain asset, liability and equity components of our Consolidated Balance Sheet as of December 31, 2011 as compared to the amounts as of December 31, 2010.

Our total assets increased by $41.9 million in 2011.  We increased our investment in non-cash working capital by $48.6 million due to increases in our inventory ($39.0 million) and accounts receivable ($14.6 million) to support our revenue growth.  We also increased our investment in property, plant and equipment, mostly in our oilfield services and minerals and materials segments, to help grow and maintain those businesses.  We funded these investments mainly through profits from our operations as well as additional borrowings on our revolving debt facility.

Of the $12.5 million decrease in our mineral rights assets, $2.6 million decrease relates to depletion and the remaining $9.9 million decrease reflects the decreased value, as opposed to decreased quantity, of chromite mineral rights stemming from the devaluation of the ZAR versus the USD, our reporting currency.

The $5.5 million increase in our investments and advances to joint ventures and affiliates primarily relates to advances we made to Ashapura Volclay Limited, one of our Indian investments, to provide necessary capital for expanded production capabilities.

Our available-for-sale securities reflect the value of our equity ownership in Ashapura Minechem Limited (Ashapura), a company listed on the Bombay stock exchange, and decreased $10.4 million in value as a result of the decrease in value of that stock as quoted on the exchange.

Our pension liabilities increased $13.5 million from prior year end mainly due to unfavorable changes in the discount rate and return on asset assumptions underlying estimates used to calculate those liabilities.

Our accumulated other comprehensive income decreased $43.5 million, of which $24.1 million relates to the revaluation of the net assets of our foreign subsidiaries into our reporting currency, USD, during consolidation.  The exchange rates between the USD and the functional currencies of several of our entities, including the ZAR and TRY, have fluctuated significantly, causing the majority of the decrease.  In addition, the other items included in our Statement of Other Comprehensive Income, such as unrealized losses on our available-for-sale securities, interest rate swaps, and pension related adjustments, accounted for an additional $19.4 million of the decrease, net of tax.

Liquidity and Capital Resources

Cash flows from operations, an ability to issue new debt instruments, an ability to lease equipment, and borrowings from our revolving credit facility have historically been our sources of funds to provide working capital, make capital expenditures, acquire businesses, repurchase common stock, and pay dividends to shareholders.  We believe cash flows from operations and borrowings from the unused portion of our committed credit facility will be adequate to support our business needs for the foreseeable future.

We may need additional debt or equity facilities in order to pursue acquisitions, when and if these opportunities become available, and we may or may not be able to obtain such facilities on terms substantially similar to our current facilities as discussed in Item 1A – Risk Factors of Form 10-K for fiscal year ended December 31, 2011.  Terms of any new facilities, especially interest rates or covenants, may be significantly different to those we currently have.

Cash flows from operating activities have varied over the last three years due to fluctuations in working capital levels, net income, and other non-cash items, such as depreciation expense and undistributed losses (earnings) from affiliates and joint-ventures.  These undistributed losses (earnings) represent the non-cash income or loss that we record in our Consolidated Statement of Operations, adjusted for distributions or dividends received from our joint-ventures.

22

In periods of growth, such as in 2011 and 2010, our working capital levels increase a) as our receivables grow in response to increased sales and b) as we invest in incremental inventory levels to meet the growing demand for our products.    However in 2009, our working capital levels decreased as the economic recession weakened demand for our products.  Non-cash working capital was approximately $264.4 million and $215.8 million as of December 31, 2011 and 2010, respectively.  The current ratio (current assets divided by current liabilities) was 3.4-to-1 and 3.2-to-1 as of the end of 2011 and 2010, respectively.

Our cash flows from investing activities largely depend upon our levels of capital expenditures and acquisitions of new businesses.  Capital expenditures in 2011, 2010 and 2009 were $61.0 million, $47.3 million, and $60.4 million, respectively.  Capital expenditures included approximately $8.2 million and $14.9 million in 2011 and 2010, respectively, of expenditures in relation to our chromite operations in South Africa after having purchased a mine there in 2009.  Capital expenditures in 2009 included $23.0 million of expenditures to acquire the chromite mineral rights and begin constructing a plant there to process the chromite.  Excluding the expenditures relating to our South Africa operations, the majority of our remaining capital expenditure in all three years occurred in our oilfield services segment (to increase the size of our equipment fleet) and our minerals and materials segment (mostly for maintenance capital to ensure stability as the business experiences growth).

Cash provided by financing activities is largely dependent upon our needs for external capital and uses of internally generated capital.  In 2011 and 2010, we borrowed more debt (net of repayments) to fund our activities as previously mentioned.  In 2009, we generated significant cash flow from operations which we used to pay down external debt (net of borrowings).

In financing activities, our dividends have fluctuated with our outstanding share levels as dividends declared remained constant at $0.72 per share in 2011, 2010 and 2009.  The purchase of non-controlling interest as shown in our cash flow statement in 2010 relates to the purchase of the remaining 47% minority interest in our South Africa subsidiary from its previous owner.

As of December 31, 2011, we had net outstanding debt (net of cash and cash equivalents) of $236.6 million versus $208.9 million at the end of the prior year.  Total long-term debt represented 40%, 37%, and 36% of total capitalization at December 31, 2011, 2010 and 2009, respectively.  We attempt to have a majority of our debt instruments contain fixed rates of interest; we achieve this partly through the use of interest rate swap derivatives.  As of December 31, 2011, 63% of our debt is fixed at an average interest rate of 5.48%; the remainder of our debt contains interest rates which vary mostly in response to changes in LIBOR.

Contractual Obligations and Off-balance Sheet Arrangements

The following schedule sets forth details of our long-term contractual obligations at December 31, 2011:

Table of Contractual Obligations (in millions)	Payments due by Period
	Total		Less than 1 Year		2-3 Years		4-5 Years		After 5 Years
Bank debt and capital lease obligations	$	261.4		0.7		1.0		-		259.7
Operating lease obligations		90.4		12.6		20.0		12.8		45.0
Interest rate swaps		9.0		-		0.5		2.3		6.2
Unconditional purchase obligation		5.2		5.2		-		-		-
Pension plan funding obligation		1.7		1.7
Capital expenditures		1.3		0.7		0.6		-		-
Other liabilities		0.5		0.5		-		-		-
Total contractual cash obligations		369.5		21.4		22.1		15.1		310.9

23

Amounts included within our financial statements

At December 31, 2011, long-term debt on our Consolidated Balance Sheet includes bank debt of approximately $179.1 million due under our revolving credit agreement, which was terminated and replaced by a new agreement in January 2012 that provides a borrowing commitment from various lenders of $300 million and matures in January 2017.   Long-term debt also includes $125 million of debt for our senior notes, of which $75 million are payable at maturity on April 2, 2017 and $50 million are payable at maturity on April 29, 2020.  Payments relating to these debt instruments are included in the Bank debt and capital lease obligations in the Table of Contractual Obligations.  Further information about these debt instruments is included in our Notes to Consolidated Financial Statements.

We have recorded a liability of $9.0 million for interest rate swap derivatives which effectively hedge the variable interest rate of our senior notes and a portion of our debt under our revolving credit agreement.  The amounts included in the table above will most likely differ from the amount at maturity due to future changes in the fair value of the interest rate swap, which is largely dependent upon changes in interest rates and market expectations.  Further information about these interest rate swap derivatives is included in our Notes to Consolidated Financial Statements.

We have committed to contribute $1.7 million of cash to our defined benefit pension plan in 2012.

We have recorded liabilities to satisfy the land reclamation obligations discussed in our Notes to Consolidated Financial Statements.  These amounts are excluded from our table of contractual obligations as we cannot estimate the timing of these payments since they are not contractually due until the expiration of individual mining permits, which are frequently renewed.

Amounts excluded from our financial statements

Operating leases relate to non-cancelable obligations for corporate facilities, transportation equipment, machinery and equipment, computer and office equipment, automobiles, and office and plant facilities.  Included in the table of contractual obligations are amounts for rent due under our operating lease commitment for our corporate facility, which requires lease payments in 2012 of $2.7 million with 2% annual increases thereafter through December 2028, the end of the lease term.  Additional information regarding operating leases is disclosed in our Notes to the Consolidated Financial Statements.

We occasionally enter into unconditional purchase obligations that contemplate future, irrevocable payments, typically for inventory items, under enforceable contracts which cannot be cancelled without penalty.  We also have commitments with vendors for the purchase of property, plant and equipment under noncancelable purchase orders included in capital expenditures.  Both commitments are presented in the table of contractual obligations but are excluded from our financial statements.

At December 31, 2011, we had outstanding standby letters of credit of $3.7 million and outstanding performance bonds of $27.7 million, neither of which are included in our table of contractual obligations.  These letters of credit and bonds typically serve to guarantee performance to customers under long-term service contracts within our construction service product line and guarantee performance of our obligations related to land reclamation and worker’s compensation claims.  We have recognized the estimated costs of our obligations related to land reclamation and workers’ compensation claims in our consolidated balance sheets as of December 31, 2011 and 2010.

Item 8. Financial Statements and Supplementary Data

See the Index to Financial Statements and Exhibits and Financial Statement Schedule in Part IV of this Form 10-K/A.  Such financial statements and schedule are incorporated herein by reference.

24

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has reevaluated the effectiveness of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this report.  Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period and due to the material weakness in internal control over financial reporting outlined below in “Management’s Report on Internal Control Over Financial Reporting”, our disclosure controls and procedures were not effective as of December 31, 2011.  Notwithstanding the foregoing and for the periods presented, we believe the financial statements included within this report fairly present in all material respects the financial position and results of operations of the Company in conformity with generally accepted accounting principles in the United States.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) of the Exchange Act.  Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs.  The design of any system of controls is also based, in part, upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.  Over time, control systems may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.  Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we reevaluated the effectiveness of our internal control over financial reporting based on criteria established in the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.  Based on this evaluation and due to the material weakness cited below, we conclude that our internal control over financial reporting was not effective as of December 31, 2011.  A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

The material weakness we identified in our internal control over financial reporting specifically relates to inadequate financial oversight of the European operations within our Environmental segment, especially as it relate to the contracting services product line in which we began reducing our participation in 2011.  Specifically, our internal control over financial reporting did not provide sufficient financial review of these operations by our European leaders and gave certain tasks to employees unqualified to perform them.  These control weaknesses led to errors in our financial statements relating to accounting for inventories, long term customer contracts, and the recognition of bad debt expenses.  As more fully described in Note 2 to the Consolidated Financial Statements presented in this Form 10-K/A, these errors led to our restating the financial statements to correctly account for these items as presented in this Form 10-K/A for the annual periods ending December 31, 2009, 2010 and 2011.

Our independent registered public accounting firm has audited our internal control over financial reporting as of the end of the period covered by this report as stated in their report, which appears in Part IV of this Form 10-K/A.

25

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting during the quarter ended December 31, 2011 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Even before identification of the aforementioned material weakness in internal control over financial reporting and in the normal course of business, we had begun, during the fiscal year ending December 31, 2012, making improvements in our internal control over financial reporting.  These 2012 improvements included:

● Created a new finance position – We created a new position titled Finance Director - EMEA.  This position reports to our Chief Financial Officer and consolidates all financial reporting responsibility for EMEA operations with one person whereas previously it resided with two people who reported to our European management.  A new individual was hired in 2012 to fulfill the responsibilities of this role, including exercising oversight and review of all our European operations.

● Changed the reporting relationship of our accounting staff - In conjunction with the hiring of the new Finance Director - EMEA, we changed the reporting relationships of our finance and accounting staff such that they now report up through our Chief Financial Officer whereas they had previously reported up through their local country general managers.

● Augmented our accounting staff - In addition to the Finance Director - EMEA position, we replaced and in some cases hired additional staff in our foreign operations, including Europe.

● Increased oversight from our domestic accounting staff – Our domestic accounting staff made additional visits to our foreign operations, including those in Europe, to review their local accounting operations and the propriety of accounting for local transactions.  In addition, our domestic accounting staff instituted monthly telephonic reviews with our finance leaders worldwide to discuss the monthly financial results and other accounting matters relating to each subsidiary.  They also instituted quarterly analytical reviews of our foreign entities’ financial statements to vet those results before they are reviewed by our segment finance staff.

● Formalized monthly financial reviews – We formalized and expanded monthly financial statement reviews between our finance and business management team members within all our subsidiaries wherein the discussions of financial results, initiatives, and action items are now documented in a monthly memo.

26

PART IV

Item 15. Exhibits and Financial Statement Schedule

(a)	1.  See Index to Financial Statements and Financial Statement Schedule below.
	2.  See Index to Financial Statements and Financial Statement Schedule below.
	Such Financial Statements and Schedule are incorporated herein by reference.
	3.  See Index to Exhibits immediately following the signature page.
(b)	See Index to Exhibits immediately following the signature page.
(c)	See Index to Financial Statements and Financial Statement Schedule below.

Item 15(a) Index to Financial Statements and Financial Statement Schedule

		Page
(1)	Financial Statements:
	Reports of Independent Registered Public Accounting Firm	28
	Consolidated Balance Sheets, December 31, 2011 and 2010	31
	Consolidated Statements of Operations, Years ended December 31, 2011, 2010 and 2009	33
	Consolidated Statements of Comprehensive Income, Years ended December 31, 2011, 2010 and 2009	34
	Consolidated Statements of Equity, Years ended December 31, 2011, 2010 and 2009	35
	Consolidated Statements of Cash Flows, Years ended December 31, 2011, 2010 and 2009	36
	Notes to Consolidated Financial Statements	37

All other schedules called for under Regulation S-X are not submitted because they are not applicable or not required, or because the required information is not material.

27

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders of AMCOL International Corporation

We have audited the accompanying consolidated balance sheets of AMCOL International Corporation and Subsidiaries as of December 31, 2011 and 2010, and the related consolidated statements of operations, comprehensive income, equity, and cash flows for each of the three years in the period ended December 31, 2011.  These financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our auditsprovide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of AMCOL International Corporation and Subsidiaries at December 31, 2011 and 2010, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2011, in conformity with U.S. generally accepted accounting principles.

As discussed in Note 2 to the consolidated financial statements, the consolidated financial statements for each of the three years in the period ended December 31, 2011 have been restated to correct for errors described in Note 2.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), AMCOL International Corporation’s internal control over financial reporting as of December 31, 2011, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 29, 2012, except for the effects of the material weakness described in the sixth paragraph as to which the date is April 3, 2013, expressed an adverse opinion thereon.

/s/  Ernst & Young LLP

Chicago, Illinois

February 29, 2012, except for Note 2, as to which the date is

April 3, 2013

28

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders of AMCOL International Corporation

We have audited AMCOL International Corporation and Subsidiaries’ internal control over financial reporting  as of December 31, 2011, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria).  AMCOL International Corporation and Subsidiaries’ management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting.  Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.  Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.  We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.  A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our report dated February 29, 2012, we expressed an unqualified opinion on internal control over financial reporting.  As described in the following paragraph, a material weakness was subsequently identified as a result of the restatement of the previously issued financial statements.  Accordingly, management has revised its assessment about the effectiveness of the Company’s internal controls over financial reporting and our present opinion on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2011, as expressed herein, is different from that expressed in our previous opinion.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. The following material weakness has been identified and included in management’s assessment. Management has identified a material weakness in controls related to the financial oversight of the European operations in the company’s Environmental segment.

29

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of the Company as of December 31, 2011 and 2010, and the related consolidated statements of income, changes in shareholders’ equity, comprehensive income, and cash flows for each of the three years in the period ended December 31, 2011. This material weakness was considered in determining the nature, timing and extent of audit tests applied in our audit of those consolidated financial statements and this report does not affect our report dated February 29, 2012, except for Note 2, as to which the date is April 3, 2013, which expressed an unqualified opinion on those financial statements.

In our opinion, because of the effect of the material weakness described above on the achievement of the objectives of the control criteria, AMCOL International Corporation and Subsidiaries has not maintained effective internal control over financial reporting as of December 31, 2011 based on the COSO criteria.

/s/  Ernst & Young LLP

Chicago, Illinois

February 29, 2012, except for the effects of the material weakness described in the sixth paragraph as to which the date is

April 3, 2013

30

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

(In thousands, except share and per share amounts)

	December 31,
ASSETS	2011 Restated		2010 Restated
Current assets:
Cash and cash equivalents	$	24,116	$	26,808
Accounts receivable		204,419		189,772
Inventories		144,310		105,284
Prepaid expenses		15,220		12,992
Deferred income taxes		4,099		5,533
Income taxes receivable		8,215		8,474
Other		6,096		6,211
Total current assets		406,475		355,074
Noncurrent assets:
Property, plant, equipment, and mineral rights and reserves:
Land		12,103		10,875
Mineral rights		52,482		65,018
Depreciable assets		484,753		452,647
		549,338		528,540
Less: accumulated depreciation and depletion		275,770		256,860
		273,568		271,680
Goodwill		69,509		70,909
Intangible assets		36,871		41,869
Investment in and advances to affiliates and joint ventures		26,407		20,904
Available-for-sale securities		3,802		14,168
Deferred income taxes		8,098		9,147
Other assets		24,412		23,504
Total noncurrent assets		442,667		452,181
		849,142		807,255

Continued…

31

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

(In thousands, except share and per share amounts)

	December 31,
LIABILITIES AND SHAREHOLDERS' EQUITY	2011 Restated			2010 Restated
Current liabilities:
Accounts payable	$	56,451		$	51,394
Accrued income taxes		2,296			5,308
Accrued liabilities		59,252			55,786
Total current liabilities		117,999			112,488
Noncurrent liabilities:
Long-term debt		260,670			235,668
Pension liabilities		34,840			21,338
Deferred compensation		8,927			9,006
Deferred income tax		12,672			16,254
Other long-term liabilities		19,148			18,442
Total noncurrent liabilities		336,257			300,708
Equity:
Common stock, par value $.01 per share, 100,000,000 shares authorized; 32,015,771 shares issued in 2011 and 2010		320			320
Additional paid in capital		94,316			95,074
Retained earnings		314,278			278,519
Accumulated other comprehensive income (loss)		(14,719	)		28,740
		394,195			402,653
Less:
Treasury stock (286,802 and 768,946 shares in 2011 and 2010, respectively)		3,426			8,945
Total AMCOL shareholders' equity		390,769			393,708
Noncontrolling interest		4,117			351
Total equity		394,886			394,059
		849,142			807,255

See accompanying notes to consolidated financial statements.

32

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Operations

(In thousands, except share and per share amounts)

	Year Ended December 31,
	2011 Restated			2010 Restated			2009 Restated
Continuing Operations
Net sales	$	943,796		$	826,277		$	687,485
Cost of sales		691,479			612,092			503,194
Gross profit		252,317			214,185			184,291
Selling, general and administrative expenses		166,231			145,173			134,947
Operating profit		86,086			69,012			49,344
Other income (expense):
Interest expense, net		(11,070	)		(9,584	)		(11,994	)
Other, net		233			1,241			(315	)
		(10,837	)		(8,343	)		(12,309	)
Income before income taxes and income (loss) from affiliates and joint ventures		75,249			60,669			37,035
Income tax expense		20,786			20,302			5,363
Income before income (loss) from affiliates and joint ventures		54,463			40,367			31,672
Income (loss) from affiliates and joint ventures		5,235			(10,997	)		6
Income (loss) from continuing operations		59,698			29,370			31,678
Discontinued Operations
Income (loss) on discontinued operations		(1,162	)		(887	)		259
Net income (loss)		58,536			28,483			31,937
Net income (loss) attributable to noncontrolling interests		15			(752	)		(105	)
Net income (loss) attributable to AMCOL shareholders		58,521			29,235			32,042

See accompanying notes to consolidated financial statements.

Continued…

33

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Operations

(In thousands, except share and per share amounts)

	Year Ended December 31,
	2011 Restated			2010 Restated			2009 Restated
Earnings per share attributable to AMCOL shareholders
Basic earnings (loss) per share
Continuing operations	$	1.88		$	0.97		$	1.03
Discontinued operations		(0.04	)		(0.03	)		0.01
Net income		1.84			0.94			1.04
Diluted earnings (loss) per share
Continuing operations	$	1.86		$	0.96		$	1.02
Discontinued operations		(0.04	)		(0.03	)		0.01
Net income		1.82			0.93			1.03
Amounts attributable to AMCOL shareholders
Income from continuing operations, net of tax	$	59,683		$	30,122		$	31,783
Discontinued operations, net of tax		(1,162	)		(887	)		259
Net income		58,521			29,235			32,042
Dividends declared per share		0.72			0.72			0.72

Consolidated Statements of Comprehensive Income

(In thousands)

	Year Ended December 31,
	2011 Restated			2010 Restated			2009 Restated			2011 Restated			2010 Restated			2009 Restated			2011 Restated			2010 Restated			2009 Restated
	Total									AMCOL Shareholders									Noncontrolling Interest
Net income (loss)	$	58,536		$	28,483		$	31,937		$	58,521		$	29,235		$	32,042		$	15		$	(752	)	$	(105	)
Other comprehensive income (loss) -
Pension adjustment		(13,502	)		(401	)		5,736			(13,502	)		(401	)		5,736			-			-			-
Tax benefit (expense)		4,985			160			(2,226	)		4,985			160			(2,226	)		-			-			-
Unrealized gain (loss) on interest rate swap agreement		(2,373	)		(3,584	)		2,915			(2,373	)		(3,584	)		2,915			-			-			-
Tax benefit (expense)		889			1,320			(1,136	)		889			1,320			(1,136	)		-			-			-
Unrealized gain (loss) on available-for-sale securities		(10,366	)		(11,395	)		24,265			(10,366	)		(11,395	)		24,265			-			-			-
Tax benefit (expense)		1,022			4,119			(5,141	)		1,022			4,119			(5,141	)		-			-			-
Foreign currency translation adjustment		(24,856	)		7,458			12,796			(24,114	)		6,518			12,423			(742	)		940			373
Total other comprehensive income (loss)		(44,201	)		(2,323	)		37,209			(43,459	)		(3,263	)		36,836			(742	)		940			373
Comprehensive income (loss)		14,335			26,160			69,146			15,062			25,972			68,878			(727	)		188			268

See accompanying notes to consolidated financial statements.

34

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Equity

(In thousands, except share and per share amounts)

	AMCOL Shareholders
	Common Stock										Accumulated
											Other
	Number		Amount		Additional						Comprehensive
	of				Paid-in			Retained			Income			Treasury			Noncontrolling			Total
	Shares				Capital			Earnings			(Loss)			Stock			Interest			Equity
Balance at December 31, 2008 (previously reported)		32,015,771	$	320	$	86,350		$	262,453		$	(4,721	)	$	(18,196	)		2,149			328,355
Cumulative effect of restatement on prior years (see Note 2)									(801	)		(112	)								(913	)
Balance at December 31, 2008 (restated)		32,015,771		320		86,350			261,652			(4,833	)		(18,196	)		2,149			327,442
Net income (loss) (restated)									32,042									(105	)		31,937
Cash dividends ($0.72 per share)									(22,052	)											(22,052	)
Issuance of 335,924 treasury shares pursuant  shares pursuant to stock compensation plans and acquisitions						(282	)								3,819						3,537
Tax benefit from employee stock compensation plans						730															730
Vesting of common stock in connection with employee stock compensation plans						2,570															2,570
Purchase of noncontrolling interest shares						(4,538	)											(990	)		(5,528	)
Other (restated)																		(306	)		(306	)
Other Comprehensive income (loss) (restated)												36,836						373			37,209
Balance at December 31, 2009 (restated)		32,015,771		320		84,830			271,642			32,003			(14,377	)		1,121			375,539
Net income (loss) (restated)									29,235									(752	)		28,483
Cash dividends ($0.72 per share)									(22,358	)											(22,358	)
Issuance of 472,917 treasury shares pursuant to employee stock compensation plans						2,723									5,432						8,155
Tax benefit from employee stock compensation plans						285															285
Vesting of common stock in connection with employee stock compensation plans						4,535															4,535
Purchase of noncontrolling interest shares						2,701															2,701
Deconsolidation of variable interest entity (restated)																		(958	)		(958	)
Other Comprehensive income (loss) (restated)												(3,263	)					940			(2,323	)
Balance at December 31, 2010 (restated)		32,015,771		320		95,074			278,519			28,740			(8,945	)		351			394,059
Net income (loss) (restated)									58,521									15			58,536
Cash dividends ($0.72 per share)									(22,762	)											(22,762	)
Issuance of 482,144 treasury shares pursuant to employee stock compensation plans						2,569									5,519						8,088
Tax benefit from employee stock compensation plans						593															593
Vesting of common stock in connection with employee stock compensation plans						4,885															4,885
Purchase of noncontrolling interest (restated)						(5,402	)											(300	)		(5,702	)
Sale of subsidiary shares to noncontrolling interest						(3,403	)					(1,390	)					4,793			0
Other Comprehensive income (loss) (restated)												(42,069	)					(742	)		(42,811	)
Balance at December 31, 2011 (restated)		32,015,771	$	320	$	94,316		$	314,278		$	(14,719	)	$	(3,426	)	$	4,117			394,886

See accompanying notes to consolidated financial statements.

35

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(In thousands)

	Year Ended December 31,
	2011 Restated			2010 Restated			2009 Restated
Cash flow from operating activities:
Net income (loss)	$	58,536		$	28,483		$	31,937
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation, depletion, and amortization		42,132			36,342			36,731
Undistributed losses (earnings) from affiliates and joint ventures		(3,599	)		11,490			800
Increase (decrease) in allowance for doubtful accounts		5,058			301			438
Decrease (increase) in deferred income taxes		6,763			5,205			2,554
Tax benefit from employee stock plans		593			285			730
(Gain) loss on sale of depreciable assets		(807	)		214			(422	)
Impairment charge		110			1,045			1,980
Stock compensation expense		4,885			4,535			2,570
Excess tax benefits on stock option exercises		(716	)		(436	)		(639	)
Other		612			(382	)		(659	)
(Increase) decrease in current assets, net of effects of acquisitions:
Accounts receivable		(37,153	)		(45,654	)		39,766
Income taxes receivable		245			(6,751	)		1,636
Inventories		(46,140	)		(11,262	)		26,400
Prepaid expenses		(3,614	)		3,194			(400	)
Other assets		(59	)		0			0
Increase (decrease) in current liabilities, net of effects of acquisitions:
Accounts payable		9,952			12,561			(1,149	)
Accrued liabilities and income taxes		4,428			9,186			(10,210	)
(Increase) decrease in other noncurrent assets		(643	)		(4,388	)		(8,132	)
Increase (decrease) in other noncurrent liabilities		(1,315	)		4,302			(1,564	)
Net cash provided by operating activities		39,268			48,270			122,367
Cash flow from investing activities:
Proceeds from sale of depreciable assets		1,913			841			2,988
Proceeds from sale of corporate building		-			-			9,651
Capital expenditures		(61,029	)		(47,305	)		(50,767	)
Capital expenditures - corporate building		-			-			(9,651	)
Investments in and advances to affiliates and joint ventures		(2,933	)		(2,722	)		(1,387	)
Proceeds from sale of interests in affliates and businesses		6,211			-			-
Acquisition of businesses, net of cash acquired		-			(400	)		(650	)
Receipts from (advances to) Chrome Corp		-			-			6,000
Other		1,666			847			(216	)
Net cash used in investing activities		(54,172	)		(48,739	)		(44,032	)
Cash flow from financing activities:
Proceeds from issuance of debt		1,344,967			1,228,952			540,139
Principal payments of debt		(1,319,673	)		(1,201,281	)		(592,486	)
Purchase of noncontrolling interest		-			(11,873	)		-
Proceeds from exercise of stock awards		8,091			5,346			2,500
Excess tax benefits on stock option exercises		716			436			639
Dividends		(22,762	)		(22,358	)		(22,052	)
Net cash provided by (used in) financing activities		11,339			(778	)		(71,260	)
Effect of foreign currency rate changes on cash		873			386			1,153
Net increase (decrease) in cash and cash equivalents		(2,692	)		(861	)		8,228
Cash and cash equivalents at the beginning of the year		26,808			27,669			19,441
Cash and cash equivalents at end of the year		24,116			26,808			27,669
Supplemental disclosures of cash flow information:
Cash paid for:
Interest, net	$	9,798		$	9,223		$	12,281
Income taxes, net	$	9,610		$	18,843		$	2,506

See accompanying notes to consolidated financial statements.

36

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

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.  This ASU will not have a material impact on our financial statements when we adopt it on January 1, 2012.

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 will 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 will not have a material impact on our financial statements.

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.

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 77% of the revenue elimination in the year ended December 31, 2011 and 100% of the revenue elimination in the years ending December 31, 2010 and 2009, represent the elimination of shipping revenues between our transportation segment and its domestic sister companies.

37

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(In millions, except share and per share amounts)

Segments

The composition of consolidated revenues by segment is as follows:

	Percentage of Net Sales
	2011 Restated			2010 Restated			2009 Restated
Minerals and materials		51	%		50	%		49	%
Environmental		27	%		27	%		29	%
Oilfield services		21	%		19	%		17	%
Transportation		6	%		6	%		7	%
Intersegment sales		-5	%		-2	%		-2	%
		100	%		100	%		100	%

Further descriptions of our products, principal markets and the relative significance of our segment operations are included in Note 3.

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.  We record these sales as revenue and 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 environmental and oilfield services segments.  We recognize these revenues in the period such services are performed and collectibility is reasonably assured.

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.

38

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(In millions, except share and per share amounts)

Translation of Foreign Currencies

Foreign entities 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 market 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 1st or more frequently if indications exist which may suggest the carrying value is not recoverable.  This review is a two step process.  The first step involves comparing the estimated fair value of each reporting unit to the carrying value of that reporting unit.  If the fair value of the reporting unit exceeds the carrying value, the goodwill is not considered impaired and the second step is unnecessary.  If the fair value is less than the carrying value, the second step of the test would be performed to measure the amount of impairment loss to be recorded, if any.

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.

39

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(In millions, except share and per share amounts)

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, 2011 and 2010.

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 within the income tax line item of our Consolidated Statement of Operations.

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.

40

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(In millions, except share and per share amounts)

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:

	2011		2010		2009
Weighted average common shares outstanding for the year		31,708,949		31,178,813		30,764,282
Dilutive impact of stock equivalents		436,824		368,778		269,432
Weighted average common and common equivalent shares for the year		32,145,773		31,547,591		31,033,714
Common shares outstanding at December 31		31,728,969		31,032,791		30,773,908
Weighted average anti-dilutive shares excluded from the computation of diluted earnings per share		189,768		470,097		938,546

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) Correction of Errors in Previously Reported Financial Statements

We have restated our previously issued financial statements for the periods prior to and including the twelve months ended December 31, 2011 to correct for certain errors which decreased net income available to AMCOL shareholders by $5.3.  Although there were several errors across various categories, we have summarized the errors and quantified the amount by which they increased (decreased) net income available to AMCOL shareholders into the following categories:

● Spain - $2.5 decrease for errors associated with accounting for inventory and other items in our environmental segment’s Spanish operations;

● Poland - $1.8 decrease relating to inaccuracies in the accounting for long term contracts and bad debts in our environmental segment’s Polish operations;

41

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(In millions, except share and per share amounts)

● South Africa - $0.8 decrease for errors related to the accounting for the acquisition of mineral rights in our minerals and materials segment’s chromite operations in South Africa;

● Tax - $0.1 decrease resulting largely from inaccuracies in the accounting for income tax expense in our international operations;

● Malaysia - $0.3 increase resulting from correcting errors in our oilfield services segment’s Malaysian operations, largely relating to improper recognition of expenses and errors in accounting for revenues;

● DongMing – adjustments to correct errors made in accounting for accounts payable in this China subsidiary within our minerals and materials segment; and

● $0.4 decrease for other insignificant errors we have aggregated together.

Adjustments by category and increase (decrease) to Net income available to AMCOL sharesholders attributable to each category	Prior to			Twelve Months Ended December 31,
	2009			2009			2010			2011			Total
Spain	$	-		$	(0.8	)	$	(0.6	)	$	(1.1	)	$	(2.5	)
Poland					(0.3	)		(0.3	)		(1.2	)		(1.8	)
South Africa		-			(0.3	)		-			(0.5	)		(0.8	)
Tax		(0.5	)		(0.5	)		(0.6	)		1.5			(0.1	)
Malaysia		-			-			(0.4	)		0.7			0.3
DongMing		0.2			0.1			0.2			(0.5	)		-
Other		(0.4	)		(1.0	)		0.5			0.5			(0.4	)
Total	$	(0.7	)	$	(2.8	)	$	(1.2	)	$	(0.6	)	$	(5.3	)

42

Corrections to annual periods ended December 31, 2009, December 31, 2010 and 2011 and as of December 31, 2010 and 2011

The effect of correcting these errors on our condensed consolidated statements of operations for the years ended December 31, 2009, 2010 and 2011 is as follows:

	Year Ended December 31, 2009
	Previously Reported			Adjustments																					As Adjusted
				Spain			Poland			South Africa			Tax			DongMing			Other			Total
Continuing Operations
Net sales	$	691.9		$	-		$	(0.1	)	$	-		$	-		$	-		$	(4.3	)	$	(4.4	)	$	687.5
Cost of sales		505.6			0.7			0.2			0.5			-			-			(3.8	)		(2.4	)		503.2
Gross profit		186.3			(0.7	)		(0.3	)		(0.5	)		-			-			(0.5	)		(2.0	)		184.3
Selling, general and administrative expenses		133.4			0.3						0.1						(0.1	)		1.3			1.6			135.0
Operating profit		52.9			(1.0	)		(0.3	)		(0.6	)		-			0.1			(1.8	)		(3.6	)		49.3
Other income (expense):
Interest expense, net		(12.2	)		-			-			-			-			-			0.2			0.2			(12.0	)
Other, net		(0.9	)		-			-			-			-			-			0.6			0.6			(0.3	)
		(13.1	)		-			-			-			-			-			0.8			0.8			(12.3	)
Income before income taxes and income (loss) from affiliates and joint ventures		39.8			(1.0	)		(0.3	)		(0.6	)		-			0.1			(1.0	)		(2.8	)		37.0
Income tax expense (benefit)		5.3			(0.2	)					(0.1	)		0.5			-			(0.1	)		0.1			5.4
Income before income (loss) from affiliates and joint ventures		34.5			(0.8	)		(0.3	)		(0.5	)		(0.5	)		0.1			(0.9	)		(2.9	)		31.6
Income (loss) from affiliates and joint ventures		0.1																		(0.1	)		(0.1	)		-
Income (loss) from continuing operations		34.6			(0.8	)		(0.3	)		(0.5	)		(0.5	)		0.1			(1.0	)		(3.0	)		31.6
Discontinued Operations
Income (loss) on discontinued operations		0.3			-			-			-			-			-			-			-			0.3
Net income (loss)		34.9			(0.8	)		(0.3	)		(0.5	)		(0.5	)		0.1			(1.0	)		(3.0	)		31.9
Net income (loss) attributable to noncontrolling interests		0.1			-			-			(0.2	)		-			-			-			(0.2	)		(0.1	)
Net income (loss) attributable to AMCOL shareholders	$	34.8		$	(0.8	)	$	(0.3	)	$	(0.3	)	$	(0.5	)	$	0.1		$	(1.0	)	$	(2.8	)	$	32.0
Weighted average common shares outstanding		30.8																					30.8			30.8
Weighted average common and common equivalent shares outstanding		31.0																					31.0			31.0
Amounts attributable to AMCOL shareholders
Income from continuing operations, net of tax	$	34.5																				$	(2.8	)	$	31.7
Discontinued operations, net of tax		0.3																					-			0.3
Net income	$	34.8																				$	(2.8	)	$	32.0
Earnings per share attributable to AMCOL shareholders:
Basic earnings (loss) per share:
Continuing operations	$	1.12																				$	(0.09	)	$	1.03
Discontinued operations		0.01																					-			0.01
Net income	$	1.13																				$	(0.09	)	$	1.04
Diluted earnings (loss) per share:
Continuing operations	$	1.11																				$	(0.09	)	$	1.02
Discontinued operations		0.01																					-			0.01
Net income	$	1.12																				$	(0.09	)	$	1.03

43

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(In millions, except share and per share amounts)

	Year Ended December 31, 2010
	Previously Reported			Adjustments																								As Adjusted
				Spain			Poland			South Africa			Tax			Malaysia			DongMing			Other			Total
Continuing Operations
Net sales	$	841.0		$	-		$	(0.1	)	$	-		$	-		$	(0.6	)	$	-		$	(14.0	)	$	(14.7	)	$	826.3
Cost of sales		624.1			0.6			0.1															(12.7	)		(12.0	)		612.1
Gross profit		216.9			(0.6	)		(0.2	)		-			-			(0.6	)		-			(1.3	)		(2.7	)		214.2
Selling, general and administrative expenses		146.9						0.1			(0.1	)								(0.3	)		(1.4	)		(1.7	)		145.2
Operating profit		70.0			(0.6	)		(0.3	)		0.1			-			(0.6	)		0.3			0.1			(1.0	)		69.0
Other income (expense):
Interest expense, net		(9.7	)																				0.1			0.1			(9.6	)
Other, net		1.2																					0.1			0.1			1.3
		(8.5	)		-			-			-			-			-			-			0.2			0.2			(8.3	)
Income before income taxes and income (loss) from affiliates and joint ventures		61.5			(0.6	)		(0.3	)		0.1			-			(0.6	)		0.3			0.3			(0.8	)		60.7
Income tax expense (benefit)		19.4									0.1			0.6			(0.2	)		0.1			0.3			0.9			20.3
Income before income (loss) from affiliates and joint ventures		42.1			(0.6	)		(0.3	)		-			(0.6	)		(0.4	)		0.2			0.0			(1.7	)		40.4
Income (loss) from affiliates and joint ventures		(11.3	)																				0.3			0.3			(11.0	)
Income (loss) from continuing operations		30.8			(0.6	)		(0.3	)		-			(0.6	)		(0.4	)		0.2			0.3			(1.4	)		29.4
Discontinued Operations
Income (loss) on discontinued operations		(0.9	)																				-			-			(0.9	)
Net income (loss)		29.9			(0.6	)		(0.3	)		-			(0.6	)		(0.4	)		0.2			0.3			(1.4	)		28.5
Net income (loss) attributable to noncontrolling interests		(0.5	)																				(0.2	)		(0.2	)		(0.7	)
Net income (loss) attributable to AMCOL shareholders	$	30.4		$	(0.6	)	$	(0.3	)	$	-		$	(0.6	)	$	(0.4	)	$	0.2		$	0.5		$	(1.2	)	$	29.2
Weighted average common shares outstanding		31.2																								31.2			31.2
Weighted average common and common equivalent shares outstanding		31.5																								31.5			31.5
Amounts attributable to AMCOL shareholders
Income from continuing operations, net of tax	$	31.3																							$	(1.2	)	$	30.1
Discontinued operations, net of tax		(0.9	)																							-			(0.9	)
Net income	$	30.4																							$	(1.2	)	$	29.2
Earnings per share attributable to AMCOL shareholders:
Basic earnings (loss) per share:
Continuing operations	$	1.00																							$	(0.03	)	$	0.97
Discontinued operations		(0.03	)																							-			(0.03	)
Net income	$	0.97																							$	(0.03	)	$	0.94
Diluted earnings (loss) per share:
Continuing operations	$	0.99																							$	(0.04	)	$	0.96
Discontinued operations		(0.03	)																							-			(0.03	)
Net income	$	0.96																							$	(0.04	)	$	0.93

44

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(In millions, except share and per share amounts)

	Year Ended December 31, 2011
	Previously Reported			Adjustments																								As Adjusted
				Spain			Poland			South Africa			Tax			Malaysia			DongMing			Other			Total
Continuing Operations
Net sales	$	942.4		$	-		$	-		$	-		$	-		$	0.6		$	-		$	0.8		$	1.4		$	943.8
Cost of sales		689.5			1.2			0.6			0.3			-			-			-			(0.2	)		1.9			691.4
Gross profit		252.9			(1.2	)		(0.6	)		(0.3	)		-			0.6			-			1.0			(0.5	)		252.4
Selling, general and administrative expenses		165.2			0.1			0.6			-			-			(0.2	)		0.7			(0.1	)		1.1			166.3
Operating profit		87.7			(1.3	)		(1.2	)		(0.3	)		-			0.8			(0.7	)		1.1			(1.6	)		86.1
Other income (expense):
Interest expense, net		(11.5	)					-			-			-			-			-			0.5			0.5			(11.0	)
Other, net		0.2						-			-			-			-			-			-			-			0.2
		(11.3	)		-			-			-			-			-			-			0.5			0.5			(10.8	)
Income before income taxes and income (loss) from affiliates and joint ventures		76.4			(1.3	)		(1.2	)		(0.3	)		-			0.8			(0.7	)		1.6			(1.1	)		75.3
Income tax expense (benefit)		21.8			(0.2	)		-			0.3			(1.8	)		0.1			(0.2	)		0.8			(1.0	)		20.8
Income before income (loss) from affiliates and joint ventures		54.6			(1.1	)		(1.2	)		(0.6	)		1.8			0.7			(0.5	)		0.8			(0.1	)		54.5
Income (loss) from affiliates and joint ventures		5.5			-			-			-			(0.3	)		-			-			-			(0.3	)		5.2
Income (loss) from continuing operations		60.1			(1.1	)		(1.2	)		(0.6	)		1.5			0.7			(0.5	)		0.8			(0.4	)		59.7
Discontinued Operations
Income (loss) on discontinued operations		(0.9	)		-			-			-			-			-			-			(0.3	)		(0.3	)		(1.2	)
Net income (loss)		59.2			(1.1	)		(1.2	)		(0.6	)		1.5			0.7			(0.5	)		0.5			(0.7	)		58.5
Net income (loss) attributable to noncontrolling interests		0.1			-			-			(0.1	)		-			-			-			-			(0.1	)		-
Net income (loss) attributable to AMCOL shareholders	$	59.1		$	(1.1	)	$	(1.2	)	$	(0.5	)	$	1.5		$	0.7		$	(0.5	)	$	0.5		$	(0.6	)	$	58.5
Weighted average common shares outstanding		31.7																								31.7			31.7
Weighted average common and common equivalent shares outstanding		32.1																								32.1			32.1
Amounts attributable to AMCOL shareholders
Income from continuing operations, net of tax	$	60.0																							$	(0.3	)	$	59.7
Discontinued operations, net of tax		(0.9	)																							(0.3	)		(1.2	)
Net income	$	59.1																							$	(0.6	)	$	58.5
Earnings per share attributable to AMCOL shareholders:
Basic earnings (loss) per share:
Continuing operations	$	1.89																							$	(0.01	)	$	1.88
Discontinued operations		(0.03	)																							(0.01	)		(0.04	)
Net income	$	1.86																							$	(0.02	)	$	1.84
Diluted earnings (loss) per share:
Continuing operations	$	1.87																							$	(0.01	)	$	1.86
Discontinued operations		(0.03	)																							(0.01	)		(0.04	)
Net income	$	1.84																							$	(0.02	)	$	1.82

45

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(In millions, except share and per share amounts)

The effect of correcting these errors in our condensed consolidated balance sheets as of December 31, 2010 and 2011 is as follows:

	December 31, 2010
ASSETS	Previously Reported		Adjustments																					As Adjusted
			Spain			Poland			South Africa		Tax		Malaysia			DongMing		Other			Total
Current assets:
Cash and cash equivalents	$	27.3	$	-		$	-		$	-	$	-	$	-		$	-	$	(0.5	)	$	(0.5	)	$	26.8
Accounts receivable, net		194.0		(0.4	)		(0.3	)						(1.1	)				(2.4	)		(4.2	)		189.8
Inventories		107.5		(1.0	)														(1.2	)		(2.2	)		105.3
Prepaid expenses		12.6																	0.4			0.4			13.0
Deferred income taxes		5.5																	-						5.5
Income tax receivable		8.5																	-						8.5
Other		6.2																	-						6.2
Total current assets		361.6		(1.4	)		(0.3	)		-		-		(1.1	)		-		(3.7	)		(6.5	)		355.1
Noncurrent assets:
Property, plant, equipment, and mineral rights and reserves:
Land		11.6																	(0.7	)		(0.7	)		10.9
Mineral rights		51.4								13.6									-			13.6			65.0
Depreciable assets		454.4																	(1.8	)		(1.8	)		452.6
		517.4		-			-			13.6		-		-			-		(2.5	)		11.1			528.5
Less: accumulated depreciation and depletion		256.9																	-			-			256.9
		260.5		-			-			13.6		-		-			-		(2.5	)		11.1			271.6
Goodwill		70.9																							70.9
Intangible assets, net		42.6																	(0.7	)		(0.7	)		41.9
Investment in and advances to affiliates and joint ventures		19.0																	1.9			1.9			20.9
Available-for-sale securities		14.2																	-						14.2
Deferred income taxes		7.6								1.6									-			1.6			9.2
Other assets		22.7												0.5					0.3			0.8			23.5
Total noncurrent assets		437.5		-			-			15.2		-		0.5			-		(1.0	)		14.7			452.2
Total Assets	$	799.1	$	(1.4	)	$	(0.3	)	$	15.2	$	-	$	(0.6	)	$	-	$	(4.7	)	$	8.2		$	807.3

46

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(In millions, except share and per share amounts)

	December 31, 2010
LIABILITIES AND SHAREHOLDERS' EQUITY	Previously Reported		Adjustments																								As Adjusted
			Spain			Poland			South Africa			Tax			Malaysia			DongMing			Other			Total
Current liabilities:
Accounts payable	$	53.2	$	-					$	-					$	-		$	(0.7	)	$	(1.1	)	$	(1.8	)	$	51.4
Accrued income taxes		4.1		(0.1	)								1.5			(0.2	)		0.2			(0.2	)		1.2			5.3
Accrued liabilities		55.2		0.1			0.3															0.2			0.6			55.8
Total current liabilities		112.5		-			0.3			-			1.5			(0.2	)		(0.5	)		(1.1	)		-			112.5
Noncurrent liabilities:
Long-term debt		236.2																				(0.5	)		(0.5	)		235.7
Pension liabilities		21.3																				-						21.3
Deferred compensation		8.7																				0.3			0.3			9.0
Deferred income tax		0.4								15.8			0.1									-			15.9			16.3
Other long-term liabilities		19.6																				(1.1	)		(1.1	)		18.5
Total noncurrent liabilities		286.2		-			-			15.8			0.1			-			-			(1.3	)		14.6			300.8
Shareholders' Equity:
Common stock		0.3																				-						0.3
Additional paid in capital		95.1																				-						95.1
Retained earnings		283.2		(1.4	)		(0.6	)		(0.3	)		(1.6	)		(0.4	)		0.5			(0.9	)		(4.7	)		278.5
Accumulated other comprehensive income (loss)		28.9								(0.1	)											(0.1	)		(0.2	)		28.7
Less: Treasury stock		8.9																				-						8.9
Total AMCOL shareholders' equity		398.6		(1.4	)		(0.6	)		(0.4	)		(1.6	)		(0.4	)		0.5			(1.0	)		(4.9	)		393.7
Noncontrolling interest		1.8								(0.2	)											(1.3	)		(1.5	)		0.3
Total equity		400.4		(1.4	)		(0.6	)		(0.6	)		(1.6	)		(0.4	)		0.5			(2.3	)		(6.4	)		394.0
Total Liabilities and Shareholders' Equity	$	799.1	$	(1.4	)	$	(0.3	)	$	15.2		$	-		$	(0.6	)	$	-		$	(4.7	)	$	8.2		$	807.3

47

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(In millions, except share and per share amounts)

	December 31, 2011
ASSETS	Previously Reported		Adjustments																						As Adjusted
			Spain			Poland			South Africa		Tax			Malaysia			DongMing		Other			Total
Current assets:
Cash and cash equivalents	$	23.7	$	-		$	-		$	-	$	-		$	-		$	-	$	0.4		$	0.4		$	24.1
Accounts receivable, net		206.8		(1.6	)		(0.9	)							(0.7	)				0.8			(2.4	)		204.4
Inventories		146.6		(1.8	)					0.2										(0.7	)		(2.3	)		144.3
Prepaid expenses		15.7																		(0.5	)		(0.5	)		15.2
Deferred income taxes		5.9										(1.8	)							-			(1.8	)		4.1
Income tax receivable		6.9										1.3								-			1.3			8.2
Other		6.7																		(0.5	)		(0.5	)		6.2
Total current assets		412.3		(3.4	)		(0.9	)		0.2		(0.5	)		(0.7	)		-		(0.5	)		(5.8	)		406.5
Noncurrent assets:
Property, plant, equipment, and mineral rights and reserves:
Land		13.9																		(1.8	)		(1.8	)		12.1
Mineral rights		41.9								10.6										-			10.6			52.5
Depreciable assets		482.3																		2.4			2.4			484.7
		538.1		-			-			10.6		-			-			-		0.6			11.2			549.3
Less: accumulated depreciation and depletion		275.5																		0.3			0.3			275.8
		262.6		-			-			10.6		-			-			-		0.3			10.9			273.5
Goodwill		69.5																								69.5
Intangible assets, net		36.6																		0.3			0.3			36.9
Investment in and advances to affiliates and joint ventures		26.4																		-						26.4
Available-for-sale securities		3.8																		-						3.8
Deferred income taxes		7.8								0.7		(0.4	)							-			0.3			8.1
Other assets		23.7													0.7					-			0.7			24.4
Total noncurrent assets		430.4		-			-			11.3		(0.4	)		0.7			-		0.6			12.2			442.6
Total Assets	$	842.7	$	(3.4	)	$	(0.9	)	$	11.5	$	(0.9	)	$	-		$	-	$	0.1		$	6.4		$	849.1

48

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(In millions, except share and per share amounts)

	December 31, 2011
LIABILITIES AND SHAREHOLDERS' EQUITY	Previously Reported			Adjustments																							As Adjusted
				Spain			Poland			South Africa			Tax			Malaysia			DongMing		Other			Total
Current liabilities:
Accounts payable	$	56.4		$	-		$	-		$	-		$	-		$	-		$	-	$	0.1		$	0.1		$	56.5
Accrued income taxes		2.7			(0.3	)								-								(0.1	)		(0.4	)		2.3
Accrued liabilities		59.0			(0.8	)		0.7									(0.3	)				0.6			0.2			59.2
Total current liabilities		118.1			(1.1	)		0.7			-			-			(0.3	)		-		0.6			(0.1	)		118.0
Noncurrent liabilities:
Long-term debt		260.7																				-						260.7
Pension liabilities		34.8																				-						34.8
Deferred compensation		8.9																				-						8.9
Deferred income tax		0.8									12.6			(0.8	)		-					0.1			11.9			12.7
Other long-term liabilities		19.2																				(0.1	)		(0.1	)		19.1
Total noncurrent liabilities		324.4			-			-			12.6			(0.8	)		-			-		-			11.8			336.2
Shareholders' Equity:
Common stock		0.3																				-						0.3
Additional paid in capital		94.5									(0.2	)										-			(0.2	)		94.3
Retained earnings		319.6			(2.5	)		(1.8	)		(0.8	)		(0.1	)		0.3			-		(0.4	)		(5.3	)		314.3
Accumulated other comprehensive income (loss)		(15.0	)		0.2			0.2														(0.1	)		0.3			(14.7	)
Less: Treasury stock		3.4																				-						3.4
Total AMCOL shareholders' equity		396.0			(2.3	)		(1.6	)		(1.0	)		(0.1	)		0.3			-		(0.5	)		(5.2	)		390.8
Noncontrolling interest		4.2									(0.1	)										-			(0.1	)		4.1
Total equity		400.2			(2.3	)		(1.6	)		(1.1	)		(0.1	)		0.3			-		(0.5	)		(5.3	)		394.9
Total Liabilities and Shareholders' Equity	$	842.7		$	(3.4	)	$	(0.9	)	$	11.5		$	(0.9	)	$	-		$	-	$	0.1		$	6.4		$	849.1

The correction of these errors had no effect on the previously reported amounts of operating, investing, and financing cash flows in our condensed consolidated statement of cash flows for the year ended December 31, 2009.  The effect of correcting these errors in our condensed consolidated statements of cash flows for the years ended December 31, 2010 and 2011 is as follows:

	Year Ended December 31, 2010
	Previously Reported			Adjustments			As Adjusted
Net cash provided by (used in) operating activities	$	48.1		$	0.1		$	48.2
Net cash (used in) investing activities		(48.1	)		(0.6	)		(48.7	)
Net cash provided by (used in) financing activities		(0.8	)		-			(0.8	)
Effect of foreign currency rate changes on cash		0.4			-			0.4
Net increase (decrease) in cash and cash equivalents		(0.4	)		(0.5	)		(0.9	)
Cash and cash equivalents at beginning of period		27.7			-			27.7
Cash and cash equivalents at end of period	$	27.3		$	(0.5	)	$	26.8

49

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(In millions, except share and per share amounts)

	Year Ended December 31, 2011
	Previously reported			Adjustments			As Adjusted
Net cash provided by (used in) operating activities	$	38.6		$	0.7		$	39.3
Net cash (used in) investing activities		(54.7	)		0.5			(54.2	)
Net cash provided by (used in) financing activities		11.6			(0.3	)		11.3
Effect of foreign currency rate changes on cash		0.9			-			0.9
Net increase (decrease) in cash and cash equivalents		(3.6	)		0.9			(2.7	)
Cash and cash equivalents at beginning of period		27.3			(0.5	)		26.8
Cash and cash equivalents at end of period	$	23.7		$	0.4		$	24.1

With regards to our consolidated statement of comprehensive income for the year ended December 31, 2009, correcting these errors reduced total comprehensive income by $3.0 resulting from the $3.0 decrease to net income as previously discussed.

With regards to our consolidated statement of comprehensive income for the year ended December 31, 2010, correcting these errors reduced total comprehensive income by $1.2, reflecting the $1.4 decrease to net income as previously discussed in addition to $0.2 of income resulting from the foreign currency translation effect of these errors.

With regards to our consolidated statement of comprehensive income for the year ended December 31, 2011, correcting these errors reduced total comprehensive income by $0.2, reflecting the $0.7 decrease to net income as previously discussed in addition to $0.5 of income resulting from the foreign currency translation effect of these errors.

With regards to our consolidated statements of equity, our retained earnings at January 1, 2009 decreased by $0.8 resulting from the decrease to net income for the years prior to 2009.

50

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

(3) 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.  Intersegment sales are not material and are eliminated in the corporate segment.  Our reportable measure of profit or loss for each segment is operating profit, which is defined as net sales less cost of sales and selling, general and administrative expenses related to a segment’s operations.  The costs deducted to arrive at operating profit do not include several items, such as net interest expense or income taxes.

Our five segments are as follows:

· Minerals  and 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;

· Environmental - 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;

· Oilfield 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 eliminated in our corporate segment.  These are most notably sales between our transportation segment and our minerals and materials and environmental segments as well as sales between our minerals and materials segment to our environmental and oilfield services segments.  Corporate segment also includes expenses associated with certain research and development, management, benefits and information technology activities.

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 cash and cash equivalents, certain fixed assets, assets associated with certain employee benefit plans, and other miscellaneous assets.

51

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

The following table sets forth certain financial information as of and for the years ended December 31, 2011, 2010 and 2009:

	2011 Restated			2010 Restated			2009 Restated
Net sales:
Minerals and materials	$	476,700		$	416,495		$	336,272
Environmental		251,907			225,544			202,511
Oilfield services		194,735			153,550			119,821
Transportation		54,113			52,225			46,642
Intersegment sales		(33,659	)		(21,537	)		(17,761	)
Total		943,796			826,277			687,485
Operating profit (loss):
Minerals and materials	$	67,144		$	53,549		$	33,693
Environmental		17,349			20,447			23,924
Oilfield services		21,226			13,654			12,261
Transportation		2,241			2,430			2,163
Corporate		(21,874	)		(21,068	)		(22,697	)
Total		86,086			69,012			49,344
Assets:
Minerals and materials	$	430,832		$	410,401		$	398,280
Environmental		159,365			160,969			150,237
Oilfield services		194,708			172,521			146,161
Transportation		3,912			3,977			3,494
Corporate		60,325			59,387			48,663
Total		849,142			807,255			746,835
Depreciation, depletion and amortization:
Minerals and materials	$	20,639		$	17,202		$	16,813
Environmental		5,389			5,352			6,219
Oilfield services		13,363			11,888			11,901
Transportation		76			46			38
Corporate		2,665			1,854			1,760
Total		42,132			36,342			36,731
Capital expenditures:
Minerals and materials	$	27,306		$	29,700		$	35,659
Environmental		8,343			2,557			2,325
Oilfield services		23,097			13,249			11,095
Transportation		198			92			39
Corporate		2,085			1,707			11,300
Total		61,029			47,305			60,418
Research and development expenses:
Minerals and materials	$	6,488		$	5,913		$	5,344
Environmental		2,311			2,284			2,339
Oilfield services		238			697			659
Corporate		42			337			315
Total		9,079			9,231			8,657

52

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

The following table sets forth certain geographic financial information as of and for the three years ending December 31st.  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.

	2011 Restated		2010 Restated		2009 Restated
Sales to unaffiliated customers shipped from:
Americas	$	590,074	$	516,852	$	438,194
EMEA		220,100		185,591		167,482
Asia Pacific		133,622		123,834		81,809
Total		943,796		826,277		687,485
Operating profit from sales from:
Americas	$	57,534	$	45,800	$	26,742
EMEA		10,236		5,625		11,848
Asia Pacific		18,316		17,587		10,754
Total		86,086		69,012		49,344
Accounts receivable in:
Americas	$	112,325	$	105,979	$	76,598
EMEA		51,875		46,518		40,951
Asia Pacific		40,219		37,275		29,706
Total		204,419		189,772		147,255
Property, plant, equipment, and mineral rights and reserves in:
Americas	$	116,020	$	107,670	$	108,405
EMEA		108,688		114,263		92,541
Asia Pacific		48,860		49,747		47,405
Total		273,568		271,680		248,351
Identifiable assets in:
Americas	$	420,427	$	428,689	$	453,599
EMEA		289,416		265,459		211,100
Asia Pacific		139,299		113,107		82,136
Total		849,142		807,255		746,835

Net sales by product line for each fiscal year are as follows:

	2011 Restated			2010 Restated			2009 Restated
Metalcasting	$	251,546		$	196,663		$	139,949
Oilfield services		194,735			153,550			119,821
Specialty materials		105,789			107,287			98,097
Lining technologies		104,220			110,806			102,419
Building materials		80,686			58,860			55,823
Pet products		56,133			61,971			66,441
Basic minerals		55,088			49,199			27,901
Contracting services		36,027			30,968			25,426
Drilling products		31,385			26,285			22,727
Transportation		54,113			52,225			46,642
Intersegment shipping revenue		(25,926	)		(21,537	)		(17,761	)
Total		943,796			826,277			687,485

53

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

We generate revenues based on sales of products, provision of services and rental equipment, and shipment of goods to customers.  A breakdown of each of these revenue generating activities and their related cost of goods sold for each of the past three years ending December 31 is shown in the following table.

	2011 Restated		2010 Restated		2009 Restated
Net sales by source
Net sales of tangible goods	$	709,310	$	628,839	$	522,003
Services revenues		206,299		166,750		136,601
Freight revenues		28,187		30,688		28,881
Total		943,796		826,277		687,485
Cost of sales:
Cost of tangible goods sold		512,489		461,177		383,752
Cost of services rendered		157,037		126,056		96,148
Cost associated with freight revenue		21,953		24,859		23,294
Total		691,479		612,092		503,194

(4) 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:

	2011 Restated			2010 Restated			2009 Restated
Balance at the beginning of the year	$	6,635		$	6,334		$	5,896
Charged to expense (income)		3,648			2,429			3,138
Write-offs and currency translation adjustments		(2,737	)		(2,128	)		(2,700	)
Balance at the end of the year		7,546			6,635			6,334

Inventories at December 31 consisted of:

	2011 Restated		2010 Restated
Crude stockpile inventories	$	53,385	$	33,576
In-process and finished goods inventories		65,049		47,600
Other raw material, container, and supplies inventories		25,876		24,108
		144,310		105,284

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:

54

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

	2011			2010			2009
Balance at the beginning of the year	$	2,730		$	2,136		$	1,989
Charged to costs and expenses		2,126			4,001			917
Disposals and currency translation adjustments		(2,705	)		(3,407	)		(770	)
Balance at the end of the year		2,151			2,730			2,136

 The following table presents our reclamation liability at the end of and changes during each of the years presented:

	2011 Restated			2010 Restated
Balance at beginning of the year	$	7,980		$	6,782
Settlement of obligations		(4,304	)		(2,185	)
Liabilities incurred and accretion expense		6,026			3,271
Currency translation adjustments		(446	)		112
Balance at the end of the year		9,256			7,980

Accrued liabilities at December 31 consisted of:

	2011 Restated		2010 Restated
Bonus	$	9,752	$	8,213
Employee benefits and related costs		10,161		8,698
Dividends payable		5,698		5,612
Other		33,641		33,263
		59,252		55,786

Accumulated other comprehensive income (loss) at December 31 was comprised of the following components:

	2011 Restated			2010 Restated
Cumulative foreign currency translation	$	595		$	24,709
Prior service cost on pension plans (net of tax benefit of $113 in 2011 and $134 in 2010)		(195	)		(232	)
Net actuarial loss on pension plans (net of tax benefit of $6,944 in 2011 and $1,938 in 2010)		(11,912	)		(3,358	)
Unrealized loss on interest rate swap agreement (net of tax benefit of $3,329 in 2011 and $2,440 in 2010)		(5,710	)		(4,226	)
Unrealized gain on available-for-sale securities (net of tax expense of $0 in 2011 and $1,022 in 2010)		2,503			11,847
		(14,719	)		28,740

55

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

(5) Property, Plant, Equipment and Mineral Rights and Reserves

Property, plant, equipment and mineral rights and reserves consisted of the following:

	December 31,
	2011 Restated		2010 Restated
Mineral rights and reserves	$	52,482	$	65,018
Land		12,103		10,875
Buildings and improvements		97,167		86,410
Machinery and equipment		362,379		350,952
Construction in progress		25,207		15,285
		549,338		528,540

The range of useful lives to depreciate plant and equipment is as follows:

Buildings and improvements	3-50 years
Machinery and equipment	1-25 years

Depreciation and depletion were charged to income as follows:

	2011 Restated		2010 Restated		2009 Restated
Depreciation expense	$	35,036	$	30,106	$	28,932
Depletion expense		2,574		1,180		883
		37,610		31,286		29,815

(6) Goodwill and Intangible Assets

The balance of goodwill by segment and the activity occurring in the past two fiscal years is as follows:

	Minerals and Materials			Environmental			Oilfield Services		Consolidated
Balance at December 31, 2009	$	18,426		$	21,762		$	30,968	$	71,156
Change in goodwill relating to:
Acquisitions		-			761			-		761
Foreign exchange translation		(225	)		(783	)		-		(1,008	)
Total changes		(225	)		(22	)		-		(247	)
Balance at December 31, 2010		18,201			21,740			30,968		70,909
Change in goodwill relating to:
Sale of business		-			(156	)		-		(156	)
Foreign exchange translation		(817	)		(427	)		-		(1,244	)
Total changes		(817	)		(583	)		-		(1,400	)
Balance at December 31, 2011		17,384			21,157			30,968		69,509

56

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

Intangible assets were as follows:

	December 31, 2011							December 31, 2010 Restated
	Gross Carrying Value		Accumulated Amortization			Net Carrying Value		Gross Carrying Value		Accumulated Amortization			Net Carrying Value
Intangibles subject to amortization:
Trademarks	$	1,623	$	(1,533	)	$	90	$	1,690	$	(1,283	)	$	407
Patents		6,890		(6,807	)		83		6,824		(6,701	)		123
Customer related assets		47,069		(19,678	)		27,391		47,453		(16,395	)		31,058
Non-compete agreements		2,153		(2,053	)		100		2,153		(2,021	)		132
Developed technology		4,040		(1,998	)		2,042		4,040		(1,592	)		2,448
Other		2,492		(1,411	)		1,081		3,159		(1,542	)		1,617
Subtotal		64,267		(33,480	)		30,787		65,319		(29,534	)		35,785
Intangibles not subject to amortization:
Trademarks and tradenames		6,084		-			6,084		6,084		-			6,084
Total		70,351		(33,480	)		36,871		71,403		(29,534	)		41,869

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, 2011, 2010, and 2009 was $4,522, $5,056, and $6,916, respectively.  We estimate amortization expense of intangible assets for the future years ending December 31 will approximate the following amounts:

	Amount
2012	$	4,209
2013		3,965
2014		3,637
2015		3,466
2016		3,436

57

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

(7) Equity Investees

Information about our investments in and advances to affiliates and joint ventures at December 31, 2011 is as follows:

	Ownership Interest
Ashapura Volclay Limited		50	%
CETCO-Bentonit Uniao Technologias Ambientais Ltda.		50	%
Egypt Mining & Drilling Co. and Egypt Bentonite & Derivatives 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 2011, we recorded income of $5,235 from our joint venture and affiliated entities, of which $2,104 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 $10,997 from our joint venture and affiliated entities.  Of these losses $7,196 is from Albagle Enterprise Limited and $6,875 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.

In 2009, we reduced our ownership percentage in Ashapura Minechem Limited (Ashapura), a publicly traded company on the Bombay Stock Exchange Limited, and began accounting for this investment as an available-for-sale security as of December 31, 2009.

(8) Income Taxes

Total income tax expense (benefit) for the years ended December 31 was comprised of the following:

	2011 Restated			2010 Restated			2009 Restated
Continuing operations	$	20,786		$	20,302		$	5,363
Discontinued operations		(597	)		(735	)		175
		20,189			19,567			5,538

58

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

Income from continuing operations before income taxes and income (loss) from affiliates and joint ventures was comprised of the following:

	2011 Restated		2010 Restated		2009 Restated
Income from continuing operations before income taxes and income (loss) from affiliates and joint ventures:
Domestic	$	53,803	$	43,590	$	16,272
Foreign		21,446		17,079		20,763
		75,249		60,669		37,035

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:

	2011 Restated			2010 Restated		2009 Restated
Provision (benefit) for income taxes:
Federal:
Current	$	5,167		$	7,406	$	(1,683	)
Deferred		6,420			2,077		3,710
State:
Current		2,958			2,420		428
Deferred		376			35		257
Foreign:
Current		7,974			7,343		4,179
Deferred		(2,109	)		1,021		(1,528	)
		20,786			20,302		5,363

59

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(In thousands, 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:

	2011 Restated			2010 Restated
Deferred tax assets attributable to:
Accounts receivable	$	1,107		$	1,345
Inventories		1,701			2,513
Employee benefit plans		25,638			19,070
Accrued liabilities		534			763
Employee incentive plans		1,305			-
Tax credit carryforwards		7,208			3,029
Available-for-sale securities		2,759			-
Other		734			6,265
Total deferred tax assets		40,986			32,985
Deferred tax liabilities attributable to:
Plant and equipment		(17,593	)		(10,910	)
Land and mineral reserves		(13,492	)		(16,774	)
Joint ventures		(1,797	)		(1,541	)
Available-for-sale securities		-			(1,035	)
Intangible assets		(1,692	)		(694	)
Other		(550	)		-
Total deferred tax liabilities		(35,124	)		(30,954	)
Valuation allowances		(6,750	)		(3,932	)
Net deferred tax asset (liability)		(888	)		(1,901	)

We believe it is more likely than not that the deferred tax assets above will be realized in the normal course of business.

60

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

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:

	2011 Restated						2010 Restated						2009 Restated
	Amount			Percent of Pretax Income			Amount			Percent of Pretax Income			Amount			Percent of Pretax Income
Provision for income taxes at
U.S. statutory rates	$	26,337			35.0	%	$	21,234			35.0	%	$	12,962			35.0	%
Increase (decrease) in taxes resulting from:
Percentage depletion		(4,900	)		-6.5	%		(3,870	)		-6.4	%		(3,257	)		-8.8	%
State taxes, net of federal benefit		2,185			2.9	%		1,546			2.6	%		754			2.0	%
Foreign tax rates		(1,045	)		-1.4	%		(924	)		-1.5	%		(4,356	)		-11.7	%
Change in reserve for tax uncertainties		(710	)		-0.9	%		64			0.1	%		(2,741	)		-7.4	%
Audit settlement		(118	)		-0.1	%		-			0.0	%		2,083			5.6	%
Discrete items related to foreign tax filings		(210	)		-0.3	%		178			0.3	%		-			0.0	%
Foreign tax credits		(2,359	)		-3.1	%		(2,178	)		-3.6	%		(879	)		-2.4	%
Changes to valuation allowance		(216	)		-0.3	%		3,354			5.6	%		28			0.1	%
Tax from foreign disregarded entities		262			0.3	%		1,358			2.2	%		142			0.4	%
Other		1,560			2.0	%		(460	)		-0.8	%		627			1.7	%
		20,786			27.6	%		20,302			33.5	%		5,363			14.5	%

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 deprecation 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 $113,646 and $121,620 of undistributed earnings from international subsidiaries as of December 31, 2011 and 2010, 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 $106, $464 and $1,559 in 2011, 2010 and 2009, respectively, representing benefits of $0.00, $0.01 and $0.05 to diluted earnings per share in 2011, 2010 and 2009, respectively.

61

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

Our agreement with the Polish tax authorities expired in 2010.  This agreement made us eligible, based on certain terms and conditions, for a tax holiday exemption for all income tax activities through 2009.  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 2004.  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, 2011, we have $1,793 of various income tax credits, which we expect to utilize within the ten year carryforward period.  We have foreign and state net operating loss carryovers that have resulted in a deferred tax asset of $3,345 at December 31, 2011, against which we have recorded a full valuation allowance as it is more likely than not that we will not be able to utilize the loss in the carryforward period.

Unrecognized Tax Benefits

The following table summarizes the activity related to our unrecognized tax benefits:

	2011 Restated			2010 Restated		2009 Restated
Balance at beginning of the year	$	810		$	705	$	5,146
Increases related to prior year tax positions		-			105		120
Increases related to current year tax positions		-			-		319
Decreases related to the expiration of statue of limitation / settlement of audits		(810	)		-		(4,880	)
Balance at the end of the year		-			810		705

We report penalties and interest relating to uncertain tax positions within the income tax expense line item within our consolidated statement of operations.

62

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

(9) Long-term Debt

Amounts of long-term debt were as follows:

	December 31,
	2011			2010 Restated
Borrowings under revolving credit agreement	$	120,906		$	88,249
Senior notes		125,000			125,000
Industrial revenue bond		-			4,800
Other notes payable		15,502			18,253
		261,408			236,302
Less: current portion		(738	)		(634	)
		260,670			235,668

As of December 2011, we had a revolving credit agreement that provided a committed $225,000 revolving line of credit through April 1, 2013, of which $103,888 remained available to us as at December 31, 2011.  It was a multi-currency arrangement that allowed us to borrow certain foreign currencies at an adjusted LIBOR rate plus 1.00% to 2.00%, depending upon the ratio of our debt to EBITDA as defined therein.  The revolving credit agreement required us to maintain certain financial covenants and ratios; we were in compliance with all of the covenants and ratios at December 31, 2011.

In January 2012, we entered into a new revolving credit agreement to replace the one mentioned above.  The new credit agreement provides us with a $300,000 unsecured line of credit, which can be increased to $400,000 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.

We had interest rate swaps outstanding which effectively hedge the variable interest rate on $33,000 of our borrowings as of December 31, 2011 and 2010, 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, 2011 carried an average interest rate of 2.95%.

A qualified institution holds $75,000 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) $45,000 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) $30,000 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, 2011 and 2010, we had an interest rate swap outstanding which effectively hedges the variable interest rate of $30,000 of Tranche 2 senior notes to a fixed rate of 5.6% per annum.  

On April 29, 2010, we issued and sold an additional $50,000 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 29th and October 29th of each year, beginning on October 29, 2010.  Our obligations under the Note Purchase Agreement mature on April 29, 2020.

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AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

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 $15,000, of which $6,564 was outstanding as of December 31, 2011 at an interest rate of 2.13%.

Maturities of long-term debt outstanding at December 31, 2011 were as follows:

	2012		2013		2014		2015		2016		Thereafter
Borrowings under:
Revolving credit agreement	$	-	$	-	$	-	$	-	$	-	$	120,906
Senior notes		-		-		-		-		-		125,000
Other notes payable		738		680		279		33		3		13,769
		738		680		279		33		3		259,675

At December 31, 2011 and 2010, we had outstanding standby letters of credit of approximately $3,715 and $10,926, 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, 2011 and 2010.

(10) 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 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	2011			2010
Derivatives designated as hedging instruments:
Interest rate swaps	Other long-term liabilities	$	(9,039	)	$	(6,666	)

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,
	2011			2010
Interest rate swaps	$	(1,484	)	$	(2,264	)

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, 2011 and 2010, we had an interest rate swap outstanding which effectively hedges the variable interest rate on $30,000 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 $33,000 of our borrowings as of December 31, 2011 and 2010, under our revolving credit agreement, to a fixed rate of 3.3% per annum, plus credit spread.

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AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

Other

We are exposed to potential gains or losses from foreign currency fluctuations affecting net investments and earnings denominated in foreign currencies.  We are particularly sensitive to currency exchange rate fluctuations between the following currency pairs: a) the Euro to the British pound (GBP) and the Polish zloty (PLN), b) the South African Rand (ZAR) to the USD and Australian dollar (AUD), c) the GBP to the Danish kroner (DKK) and the Swiss franc (SEK), and d) the USD to the Indian rupee (INR), the Thai baht (THB), and the Turkish lira (TRY).  Occasionally, we enter into foreign exchange derivative contracts to mitigate the risk of currency 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:

We did not have any significant foreign exchange derivative instruments outstanding as of December 31, 2011 or 2010.

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	2011			2010			2009
Foreign exchange derivative instruments	Other, net	$	(484	)	$	(772	)	$	(4,932	)

(11) 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.

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:

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AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

Description				Fair Value Measurements Using
	Asset / (Liability) Balance at 12/31/2011			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Interest rate swaps	$	(9,039	)	$	-	$	(9,039	)	$	-
Available-for-sale securities		3,802			3,802		-			-
Deferred compensation plan assets		7,973			-		7,973			-
Supplementary pension plan assets		7,632			-		7,632			-

Description				Fair Value Measurements Using
	Asset / (Liability) Balance at 12/31/2010			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Interest rate swaps	$	(6,666	)	$	-	$	(6,666	)	$	-
Available-for-sale securities		14,168			14,168		-			-
Deferred compensation plan assets		8,358			-		8,358			-
Supplementary pension plan assets		7,676			-		7,676			-

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.

(12) Asset Impairment Charge

During the third quarter ended September 30, 2009, our minerals and materials segment recorded a non-cash impairment charge of $1,980 to write down certain fixed assets to their estimated fair values based on a third-party appraisal (Level 2 inputs).  The impairment charge is related to the closing of a plant within our minerals and materials segment due to reduced demand.  This impairment charge was recorded within cost of sales within our Consolidated Statement of Operations.  In addition, we increased our inventory reserve by $293 (also recorded within the cost of sales) to record the excess of cost over net realizable value of the inventory located at this plant, bringing the total expense associated with this write-off to $2,273.

(13) Noncontrolling Interest

In January 2011, we acquired the remaining noncontrolling interest in Volclay South Africa (Proprietary) Limited (“VSA”), which operates our chromite business, for approximately $5,600.

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AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

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 chrome sand 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, 2011 Restated
Net income attributable to AMCOL shareholders	$	58,521
Transfers from noncontrolling interest:
Decrease in additional paid-in capital for purchase of the remaining noncontrolling interest in  South Africa (Proprietary) Limited		(5,402	)
Decrease in additional paid-in capital for transfer of 26% interest in Batlhako		(3,403	)
Change from net income attributable to AMCOL shareholders and transfers from noncontrolling interest	$	49,716

(14) Discontinued Operations

In September 2011, our environmental segment sold CETCO Contracting Services Company, which comprised our domestic contracting services business.  The operations of this business for current and prior years, 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.

(15) Leases

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 2011, 2010 and 2009 approximate $2,634 , $2,583, and $2,532, 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 $14,449, $12,485 and $10,714 in 2011, 2010 and 2009, 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, 2011:

	Minimum Lease Payments
	Domestic		Foreign		Total
Year ending December 31:
2012	$	12,065	$	1,836	$	13,901
2013		11,377		1,005		12,382
2014		8,773		789		9,562
2015		7,346		526		7,872
2016		5,284		268		5,552
Thereafter		44,983		167		45,150
Total		89,828		4,591		94,419

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AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

(16) 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
	2011			2010			2011			2010
Change in benefit obligations:
Beginning projected benefit obligation	$	48,018		$	42,829		$	9,220		$	9,029
Service cost		1,516			1,400			196			320
Interest cost		2,607			2,493			485			533
Actuarial (gain)/loss		7,239			2,510			2,043			(516	)
Benefits paid		(1,273	)		(1,214	)		(376	)		(146	)
Ending projected benefit obligation		58,107			48,018			11,568			9,220
Change in plan assets:
Beginning fair value		35,755			31,455			-			-
Actual return		(1,516	)		4,014			-			-
Company contribution		1,500			1,500			376			146
Benefits paid		(1,273	)		(1,214	)		(376	)		(146	)
Ending fair value		34,466			35,755			-			-
Funded status of the plan		(23,641	)		(12,263	)		(11,568	)		(9,220	)

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:

	Defined Benefit Pension Plan									Supplementary Pension Plan
	2011			2010			2009			2011		2010		2009
Service cost – benefits earned during the year	$	1,516		$	1,400		$	1,647		$	196	$	320	$	216
Interest cost on accumulated benefit obligation		2,607			2,493			2,605			485		533		450
Expected return on plan assets		(2,858	)		(2,618	)		(2,146	)		-		-		-
Net amortization and deferral		65			64			490			88		131		74
Net periodic pension cost		1,330			1,339			2,596			769		984		740

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AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

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
	2011		2010		2011	2010
Discount rate		4.70%	5.51%		4.63%		5.36%
Rate of compensation increase		4.00%	4.00%		4.00%		4.00%
Long-term rate of return on plan assets		7.50%	8.00%		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
		2011	2010	2009		2011	2010	2009
Discount rate		5.51%	5.91%	6.25%		5.36%	5.95%		6.25%
Rate of compensation increase		4.00%	4.00%	5.75%		4.00%	4.00%		4.00%
Long-term rate of return on plan assets		8.00%	8.25%	8.25%		N/A	N/A		N/A

We expect to contribute up to $1,693 to the defined benefit pension plan in 2012.  The accumulated benefit obligation (ABO) for our defined benefit pension plan was $49,301 and $40,949 at December 31, 2011 and 2010, respectively.  The ABO for our supplementary pension plan was $8,537 and $7,606 at December 31, 2011 and 2010, 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
2012	$	1,687	$	379
2013		1,853		378
2014		2,113		394
2015		2,307		451
2016		2,575		448
2017 through 2021		16,457		3,598

Note 3 shows the amounts included within accumulated other comprehensive income as of December 31, 2011 and 2010 that have not yet been recognized as components of net periodic benefit cost.  Of these balances at December 31, 2011, the amounts expected to be amortized in the next fiscal year are $59 and $1,153 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 2011 and 2010, are as follows:

	2011			2010
Recognized in Other Comprehensive Income:
Net actuarial loss (gain)	$	13,657		$	597
Amortization of net actuarial loss (gain)		(96	)		(137	)
Amortization of prior service cost (credit)		(59	)		(59	)
Total change in other comprehensive income		13,502			401

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AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

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, 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	$	727	$	-	$	727	$	-
Equity securities:
US equity securities		11,244		-		11,244		-
International equity securities		5,959		2,028		3,931		-
AMCOL International common stock		1,880		1,880		-		-
Fixed income securities and bonds
Governmental agencies		1,011		1,011		-		-
Corporate bonds		4,981		4,981		-		-
Guaranteed investment contracts		2,473		-		2,473		-
Other investments
Real estate index funds		601		-		601		-
Commodities linked funds		1,693		1,693		-		-
Hedge funds		3,897		-		-		3,897
Total		34,466		11,593		18,976		3,897

	Fair Value Measurements as of December 31, 2010
			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	$	612	$	-	$	612	$	-
Equity securities:
US equity securities		10,781		-		10,781		-
International equity securities		9,489		3,367		6,122		-
AMCOL International common stock		2,170		2,170		-		-
Fixed income securities and bonds
Governmental agencies		1,774		831		943		-
Corporate bonds		2,477		2,477		-		-
Guaranteed investment contracts		3,633		-		3,633		-
Other investments
Real estate index funds		656		-		656		-
Commodities linked funds		1,996		1,996		-		-
Hedge funds		2,167		-		-		2,167
Total		35,755		10,841		22,747		2,167

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.

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AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

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, 2009		1,596
Purchases, sales, and settlements		500
Actual return on plan assets still held at reporting date		71
Ending balance at December 31, 2010		2,167
Purchases, sales, and settlements		1,815
Actual return on plan assets still held at reporting date		(85	)
Ending balance at December 31, 2011		3,897

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.

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 $1,778, $1,248 and $1,021 in 2011, 2010 and 2009, respectively.

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AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

401(k) Savings Plan

We also have a savings plan for our U.S. personnel.  In 2011, 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 $3,422 in 2011, $2,842 in 2010 and $2,803 in 2009.

Other

We also have a deferred compensation plan and a 401(k) restoration plan for our executives.

(17) Stock Compensation Plans

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:

	2011			2010			2009
Risk-free interest rate		2.2	%		2.7	%		1.7	%
Expected life of option in years		5.51			5.61			4
Expected dividend yield of stock		2.5	%		3.2	%		4.8	%
Expected volatility of stock price		49.0	%		50.8	%		70.5	%
Weighted-average per share fair value of options granted	$	11.42		$	8.62		$	5.97

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.

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Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

Changes in options outstanding are summarized as follows:

1998 Long-Term Incentive Plan	December 31, 2011					December 31, 2010					December 31, 2009
	Shares			Weighted Average Exercise Price		Shares			Weighted Average Exercise Price		Shares			Weighted Average Exercise Price
Options outstanding at January 1		413,710		$	19.88		720,791		$	18.19		1,057,519		$	15.13
Granted		-			-		-			-		-			-
Exercised		(243,659	)		18.54		(306,548	)		15.93		(329,728	)		8.26
Forfeited		-			-		-			-		-			-
Expired		(1,000	)		14.79		(533	)		4.76		(7,000	)		24.31
Options outstanding at December 31		169,051			21.82		413,710			19.88		720,791			18.19
Options exercisable at December 31		169,051			21.82		413,710			19.88		720,791			18.19

2006 Long-Term Incentive Plan

2006 Long-Term Incentive Plan	December 31, 2011					December 31, 2010					December 31, 2009
	Awards			Weighted Average Exercise Price		Awards			Weighted Average Exercise Price		Awards			Weighted Average Exercise Price
Awards outstanding at January 1		1,389,598		$	23.02		1,060,057		$	22.89		709,258		$	27.11
Granted		-			-		390,750			23.24		372,750			15.11
Exercised		(170,998	)		24.04		(29,862	)		21.62		(500	)		24.25
Forfeited		(20,087	)		20.48		(22,722	)		19.92		(7,166	)		22.89
Expired		(9,501	)		23.64		(8,625	)		29.62		(14,285	)		29.22
Awards outstanding at December 31		1,189,012			22.91		1,389,598			23.02		1,060,057			22.89
Awards exercisable at December 31		885,003			23.67		754,622			24.86		339,365			27.99

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.

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Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

2010 Long-Term Incentive Plan

2010 Long-Term Incentive Plan	December 31, 2011
	Awards			Weighted Average Exercise Price
Awards outstanding at January 1		-		$	-
Granted		379,425			30.66
Exercised		-			-
Forfeited		(23,375	)		30.66
Expired		-			-
Awards outstanding at December 31		356,050			30.66
Awards exercisable at December 31		-			-

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	2011		2010		2009
Intrinsic value of awards exercised during the year	$	5,085	$	3,899	$	4,352
Fair value of awards vested during the year		2,431		3,857		2,760
Grant date fair value of awards granted during the year		4,333		3,368		2,225

The following table summarizes information about stock compensation awards outstanding and exercisable at December 31, 2011:

All Stock Compensation Plans	Number of Awards		Weighted Average Exercise Price		Intrinsic Value		Weighted Average Remaining Contractual Life (Yrs.)
Awards outstanding at December 31, 2011		1,714,113	$	24.41	$	6,362		5.42
Awards exercisable at December 31, 2011		1,054,054		23.37		4,495		3.48

74

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

The following table summarizes information about our nonvested stock compensation awards outstanding:

All Stock Compensation Plans - Nonvested Awards	December 31, 2011					December 31, 2010					December 31, 2009
	Awards			Weighted Average Grant date Fair value		Awards			Weighted Average Grant date Fair value		Awards			Weighted Average Grant date Fair value
Nonvested awards outstanding at January 1		634,976		$	7.87		720,692		$	7.46		677,111		$	8.81
Granted		379,425			11.42		390,750			8.62		372,750			5.97
Vested		(311,630	)		7.80		(453,744	)		8.50		(322,003	)		8.57
Forfeited		(43,462	)		9.77		(22,722	)		7.59		(7,166	)		8.10
Nonvested awards outstanding at December 31		659,309			9.80		634,976			7.87		720,692			7.46

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, as the performance targets were met.

In 2009, we granted 40,000 shares of performance based restricted stock 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, and will vest 100% in December 2012, if certain established performance targets are met.

(18) Contingencies

We are party to a number of lawsuits arising in the normal course of business.  Since the mid-1980s, we and/or our subsidiaries have been named as one of a number of defendants in product liability lawsuits relating to the minor free-silica content of our bentonite products used in the metalcasting industry.  The plaintiffs in these lawsuits are primarily employees of our foundry customers.  Our oilfield operations are 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 pending litigation will have a material adverse effect on our consolidated financial statements.

75

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

(19) Quarterly Results (Unaudited)

Unaudited summarized results for each quarter of the last two years are as follows:

	2011 Quarters Restated
	First			Second			Third			Fourth
Minerals and materials	$	115,928		$	118,237		$	122,209		$	120,326
Environmental		51,683			74,831			70,999			54,394
Oilfield services		45,580			45,104			50,175			53,876
Transportation		12,674			14,780			14,877			11,782
Intersegment sales		(7,216	)		(9,855	)		(10,343	)		(6,245	)
Net sales		218,649			243,097			247,917			234,133
Minerals and materials	$	28,090		$	26,156		$	31,555		$	30,730
Environmental		15,273			22,210			21,845			14,597
Oilfield services		13,499			11,733			15,377			15,348
Transportation		1,403			1,640			1,775			1,323
Intersegment gross profit		(370	)		122			(200	)		211
Gross profit		57,895			61,861			70,352			62,209
Minerals and materials	$	16,100		$	13,440		$	19,515		$	18,089
Environmental		1,814			7,985			6,994			556
Oilfield services		5,707			3,691			5,787			6,041
Transportation		465			685			770			321
Corporate		(5,103	)		(4,896	)		(7,251	)		(4,624	)
Operating profit		18,983			20,905			25,815			20,383
Income (loss) from continuing operations	$	13,163		$	12,925		$	20,792		$	12,818
Income (loss) on discontinued operations	$	(87	)	$	192		$	(1,267	)	$	-
Net income (loss)	$	13,076		$	13,117		$	19,525		$	12,818
Net income (loss) attributable to noncontrolling interests	$	(7	)	$	(32	)	$	(6	)	$	60
Net income (loss) attributable to AMCOL shareholders	$	13,083		$	13,149		$	19,531		$	12,758
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 minerals and materials segment recorded the following in the third quarter ended September 30, 2011:

- Reduction to cost of sales of $1,464 resulting from the recovery of certain mining costs in our chromite operations.

- Income from affiliates and joint ventures of $2,104 resulting from the sale of our Belgian joint venture.

As discussed in Note 2, we have restated our 2011 and prior financial statements.  We have summarized the impact of errors that were material to the results of the quarters as noted below:

- Increase in cost of sales of $792, $411, $359 and $236 in the first, second, third and fourth quarter, respectively, relating to inaccuracies in the accounting for inventory and long term contracts in our environmental segment’s European operations.

76

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

- Increase in selling, general and administrative expenses of $519 and $198 in the third and fourth quarter, respectively, relating to errors in accounting for bad debt expense in our environmental segment’s European operations.

- Increase in sales of $597 in the first quarter in our oilfield services segment’s Malaysian operations largely relating to errors in accounting for revenues.

- Reduction to tax expense of $482 and $1,399 in the first and third quarter, respectively, resulting from inaccuracies in the accounting for income tax expense in our domestic and international operations.

- The errors increased (decreased) net income attributable to AMCOL shareholders by $848, $(606), $106, $(938) in the first, second, third and fourth quarter, respectively.

- The errors increased (decreased) diluted earnings per share attributable to AMCOL shareholders by $0.03, ($0.02), $0.01, and ($0.03) per share in the first, second, third and fourth quarterly, respectively.

	2010 Quarters Restated
	First			Second			Third			Fourth
Minerals and materials	$	94,809		$	103,169		$	107,038		$	111,479
Environmental		38,470			64,522			69,170			53,382
Oilfield services		30,204			39,658			40,774			42,914
Transportation		12,120			13,583			14,284			12,238
Intersegment sales		(4,701	)		(5,535	)		(6,207	)		(5,094	)
Net sales		170,902			215,397			225,059			214,919
Minerals and materials	$	23,169		$	26,629		$	24,105		$	22,217
Environmental		11,363			20,318			21,258			16,428
Oilfield services		8,014			11,785			11,525			11,545
Transportation		1,327			1,543			1,630			1,365
Intersegment gross profit		-			-			-			(36	)
Gross profit		43,873			60,275			58,518			51,519
Minerals and materials	$	13,604		$	15,963		$	12,869		$	11,113
Environmental		342			8,339			8,764			3,002
Oilfield services		1,336			4,569			3,648			4,101
Transportation		511			699			754			466
Corporate		(4,677	)		(5,848	)		(3,203	)		(7,340	)
Operating profit		11,116			23,722			22,832			11,342
Income from continuing operations	$	6,360		$	16,320		$	17,126		$	(10,436	)
Income (loss) on discontinued operations	$	(519	)	$	(140	)	$	(132	)	$	(96	)
Net income	$	5,841		$	16,180		$	16,994		$	(10,532	)
Net income (loss) attributable to noncontrolling interests	$	(354	)	$	(4	)	$	(155	)	$	(239	)
Net income (loss) attributable to AMCOL shareholders	$	6,195		$	16,184		$	17,149		$	(10,293	)
Basic earnings per share attributable to AMCOL shareholders (A)	$	0.20		$	0.52		$	0.55		$	(0.33	)
Diluted earnings per share attributable to AMCOL shareholders (A)	$	0.20		$	0.51		$	0.54		$	(0.32	)

(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.

77

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(In thousands, except share and per share amounts)

Our minerals and materials segment recorded expenses of $2,224 and $2,779 in the third quarter ending September 30, 2010 and fourth quarter ending December 31, 2010, respectively, resulting from operational issues in our domestic personal care products business within our minerals and materials segment.

We also recorded the following charges during our fourth quarter ended December 31, 2010:

- Non-cash losses from impairments associated with two of our joint ventures of $11,705, as disclosed more fully in Note 7;

- Expenses of $2,665 associated with the retirement of our retired CEO; and

- Tax expenses of $3,352 associated with the recognition of valuation allowances in foreign jurisdictions.

As discussed in Note 2, we have restated our prior year financial statements.  We have summarized the impact of errors that were material to the results of the quarters as noted below:

- Reduction to sales of $91 and $655 in the third and fourth quarter, respectively, in our oilfield services segment’s Malaysian operations relating to errors in accounting for revenues.

- Increase/(decrease) to tax expenses of $(472), $601 and $507 in the first, third and fourth quarter, respectively, resulting from inaccuracies in the accounting for income tax expense in our domestic and international operations.

- The impact of correcting the errors increased (decreased) net income attributable to AMCOL shareholders by $67, $35, $(268) and $(946) in the first, second, third and fourth quarter, respectively.

- The impact of correcting the errors increased (decreased) diluted earnings per share attributable to AMCOL shareholders by ($0.01) and ($0.02) per share in the third and fourth quarter, respectively.

78

SIGNATURES

Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, the registrant has duly caused this amendment to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: April 3, 2013

AMCOL INTERNATIONAL CORPORATION
By:	/s/ Ryan F. McKendrick
	Ryan F. McKendrick
	President and Chief Executive Officer

INDEX TO EXHIBITS

Exhibit Number
3.1	Restated Certificate of Incorporation of the Company (1), as amended (2), as amended (3)
3.2	Bylaws of the Company as amended and restated (4), as amended (22)
4	Article Four of the Company’s Restated Certificate of Incorporation (1), as amended (3)
10.1	AMCOL International Corporation Nonqualified Deferred Compensation Plan (5)
10.2	AMCOL International Corporation 1998 Long-Term Incentive Plan (6), as amended* (7)
10.3	AMCOL International Corporation 2006 Long-Term Incentive Plan (8), as amended * (5)
10.4	AMCOL International Corporation Annual Cash Incentive Plan* (8)
10.5	AMCOL International Corporation Discretionary Cash Incentive Plan* (8)
10.6	AMCOL International Corporation Amended and Restated Supplementary Pension Plan for Employees* (5)
10.7	Employment Agreement effective as of March 25, 2009 by and between Registrant and Lawrence E. Washow* (9)
10.8	Employment Agreement effective as of February 2, 2009 by and between Registrant and Donald W. Pearson* (9)
10.9	Employment Agreement effective as of March 25, 2009 by and between Registrant and Gary Castagna* (9)
10.10	Employment Agreement effective as of March 25, 2009 by and between Registrant and Ryan F. McKendrick* (9)
10.11	A written description of compensation for the Board of Directors of the Company is set forth under the caption “Director Compensation” in the definitive Proxy Statement to be filed with the Securities and Exchange Commission and delivered to the Company’s shareholders in connection with the Annual Meeting of Shareholders held on May 5, 2011, and is hereby incorporated by reference.*
10.12	Credit Agreement by and among AMCOL International Corporation and Harris Trust and Savings Bank, individually and as agent, Wells Fargo Bank, N.A., Bank of America N.A. and the Northern Trust Company dated November 10, 2005 (10), as amended (11), as further amended (12), as further amended (13), as further amended (14)
10.13	Form of Indemnification Agreement between the Company and its directors and executive officers (4)
10.14	Employment Agreement effective as of January 1, 2010 by and between Registrant and Michael Johnson* (15)
10.15	Employment Agreement effective as of January 1, 2010 by and between Registrant and Robert Trauger* (15)
10.16	Form of Restricted Stock Award Agreement between Registrant and Gary Castagna and Ryan F. McKendrick* (16)
10.17	Note Purchase Agreement dated as of April 29, 2010 by and among the Registrant and the Lincoln National Life Insurance Company and the Lincoln Life and Annuity Company of New York (17)
10.18	AMCOL International Corporation 2010 Long-Term Incentive Plan* (18)
10.19	AMCOL International Corporation 2010 Cash Incentive Plan* (18)
10.20	Form of Option Award Agreement* (18)
10.21	Form of Annual Cash Award Agreement* (18)
10.22	Transition and Retirement Agreement dated as of November 19, 2010 by and between Registrant and Lawrence E. Washow* (19)
10.23	Performance based Restricted Stock Form Award Agreement * (20)
10.24	Credit Agreement dated as of January 20, 2012, by and among AMCOL International Corporation, certain wholly-owned AMCOL subsidiaries, B.M.O. Harris Bank N.A., as administrative agent, and certain other financial institutions as lenders therein (23)

10.25	Changes of Control Agreements dated March 11, 2011 by and between AMCOL International Corporation and Gary L. Castagna, Michael Johnson, Ryan F. McKendrick, Donald W. Pearson, and Robert Trauger * (21)
21	AMCOL International Subsidiary Listing***
23.1	Consent of Independent Registered Public Accounting Firm
31.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32	Certification of Periodic Financial Report Pursuant to 18 U.S.C. Section 1350
95.1	Mine Safety Disclosure***
101	Interactive Data File**

(1)	Exhibit is incorporated by reference to the Registrant’s Form S-3 filed with the Securities and Exchange Commission on September 15, 1993.
(2)	Exhibit is incorporated by reference to the Registrant’s Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 1995.
(3)	Exhibit is incorporated by reference to the Registrant’s Form 10-Q filed with the Securities and Exchange Commission for the quarter ended June 30, 1998.
(4)	Exhibit is incorporated by reference to the Registrant’s Form 8-K filed the Securities and Exchange Commission on February 13, 2009.
(5)	Exhibit is incorporated by reference to the Registrant’s Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2008.
(6)	Exhibit is incorporated by reference to the Registrant’s Form S-8 (File 333-56017) filed with the Securities and Exchange Commission on June 4, 1998.
(7)	Exhibit is incorporated by reference to the Registrant’s Form S-8 (File 333-68664) filed with the Securities and Exchange Commission on August 30, 2001.
(8)	Exhibit is incorporated by reference to the Registrant’s Form 8-K filed with the Securities and Exchange Commission on May 12, 2006.
(9)	Exhibit is incorporated by reference to the Registrant’s Form 8-K filed with the Securities and Exchange Commission on February 5, 2009.
(10)	Exhibit is incorporated by reference to the Registrant’s Form 8-K filed with the Securities and Exchange Commission on November 15, 2005.
(11)	Exhibit is incorporated by reference to the Registrant’s Form 8-K filed with the Securities and Exchange Commission on June 19, 2006.
(12)	Exhibit is incorporated by reference to the Registrant’s Form 8-K filed with the Securities and Exchange Commission on March 13, 2007.
(13)	Exhibit is incorporated by reference to the Registrant’s Form 8-K filed the Securities and Exchange Commission on May 23, 2008.
(14)	Exhibit is incorporated by reference to the Registrant’s Form 8-K filed with the Securities and Exchange Commission on September 23, 2009.
(15)	Exhibit is incorporated by reference to the Registrant’s Form 8-K filed with the Securities and Exchange Commission on January 5, 2010.
(16)	Exhibit is incorporated by reference to the Registrant’s Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2009.
(17)	Exhibit is incorporated by reference to the Registrant’s Form 8-K filed with the Securities and Exchange Commission on April 30, 2010.
(18)	Exhibit is incorporated by reference to the Registrant’s Form 8-K filed with the Securities and Exchange Commission on May 7, 2010.
(19)	Exhibit is incorporated by reference to the Registrant’s Form 8-K filed with the Securities and Exchange Commission on November 22, 2010.
(20)	Exhibit is incorporated by reference to the Registrant’s Form 8-K filed with the Securities and Exchange Commission on February 14, 2011.
(21)	Exhibit is incorporated by reference to the Registrant’s Form 8-K filed with the Securities and Exchange Commission on March 16, 2011.
(22)	Exhibit is incorporated by reference to the Registrant’s Form 8-K filed with the Securities and Exchange Commission on November 17, 2011.
(23)	Exhibit is incorporated by reference to the Registrant’s Form 8-K filed with the Securities and Exchange Commission on January 23, 2012.

*Management compensatory plan or arrangement

** As provided in Rule 406T of Regulation S-T, this information is deemed not filed or part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act of 1933, and is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and is not otherwise subject to liability under these sections.

*** Filed with our Form 10-K on February 29, 2012.