Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Company Operations

We, AMCOL International Corporation (the "Company"), are a leading producer and marketer of diverse specialty materials with a core expertise in minerals and polymer science. Through five business segments, performance materials, construction technologies, energy services, transportation, and corporate, we create solutions that enhance the quality, efficiency and sustainability of our customers' products and services in a growing global marketplace.

Our performance materials segment is a leading supplier of bentonite related products.

Our construction technologies segment provides products for non-residential construction, environmental and infrastructure projects worldwide.

Our energy services segment offers a range of patented and non-patented technologies, products and services for both upstream and downstream oil and gas production.

Our transportation segment, which serves our domestic subsidiaries as well as third parties, is a dry van and flatbed carrier and freight brokerage service provider.

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 69% and 73% of the revenue elimination in the nine months ended September 30, 2013 and 2012, respectively, and 68% and 73% of the revenue elimination in the three months ended September 30, 2013 and 2012, respectively, represents elimination of shipping revenues between our transportation segment and its domestic sister companies.

A significant portion of the products sold by our performance materials segment and, to a lesser extent, our construction technologies segment, utilize a mineral called bentonite. Bentonite has several valuable characteristics, including its ability to bind, swell, adsorb, control rheology, soften fabrics, and have its surface modified through chemical and physical reactions. We also develop applications for other specialty minerals, most significantly chromite and leonardite.

We earn revenues from the sale of finished products, provision of services, rental of equipment, and charges for shipping goods and materials to customers. Our service revenues are derived primarily from our construction technologies, energy services, and transportation segments; our transportation segment is purely service based.

The composition of our revenues by segment is as follows:

	Nine Months Ended
	September 30,
	2013			2012
Performance materials		48	%		50	%
Construction technologies		21	%		24	%
Energy services		30	%		25	%
Transportation		5	%		5	%
Intersegment sales		-4	%		-4	%
		100	%		100	%

Further discussion of our segment information is included in Note 4, "Business Segment Information."

Basis of Presentation

The financial information included herein has been prepared by management, and other than the condensed consolidated balance sheet as of December 31, 2012, is unaudited. The condensed consolidated balance sheet as of December 31, 2012 has been derived from, but does not include all of the disclosures contained in, the audited consolidated financial statements for the year ended December 31, 2012. The information furnished herein includes all adjustments that are, in our opinion, necessary for a fair presentation of our results of operations and cash flows for the interim periods ended September 30, 2013 and 2012, and our financial position as of September 30, 2013, and all such adjustments are of a normal and recurring nature. The accompanying condensed consolidated financial information should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2012.

Certain items in the prior year's condensed consolidated financial statements contained herein and notes thereto have been reclassified to conform to the condensed consolidated financial statement presentation for the three and nine months ended September 30, 2013. These reclassifications did not have a material impact on our financial statements.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("US GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates.

The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year for a variety of reasons, including the seasonality of both our construction technologies segment, which varies due to the seasonal nature of the construction industry, and our energy services segment, which varies due to seasonal weather patterns in its various geographic markets.

Recently Adopted and Recently Issued Accounting Guidance

Adopted:

In February 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2013-02 codified in Accounting Standards Codification ("ASC") Topic 220 – Comprehensive Income which adds new disclosure requirements for items reclassified out of accumulated other comprehensive income. This ASU requires entities to disclose additional information about reclassification adjustments, including changes in accumulated other comprehensive income balances by component and significant items reclassified out of accumulated other comprehensive income. Other than additional disclosure requirements, the adoption of this ASU on January 1, 2013 had no impact on our financial statements.

In July 2012, the FASB issued ASU 2012-02, codified in ASC Topic 350 – Intangibles – Goodwill and Other. This ASU gives entities the option to first assess the qualitative factors to determine whether the existence of events and circumstances indicates that it is more likely than not that an indefinite-lived intangible asset is impaired. If impairment is indicated, the fair value of the indefinite-lived intangible asset should be determined and the quantitative impairment test should be performed by comparing the fair value with the carrying value in accordance with subtopic 350-30. If impairment is not indicated, the entity is not required to take further action. The adoption of this ASU on January 1, 2013 had no impact on our financial statements.

Issued:

In March 2013, the FASB issued ASU 2013-05 codified in ASC Topic 830 – Foreign Currency Matters. This ASU clarifies the applicable guidance relating to a parent entity's accounting for the cumulative translation adjustment upon derecognition of certain subsidiaries or groups of assets within a foreign entity or of an investment in a foreign entity. A parent entity is required to release any related cumulative foreign currency translation adjustment from accumulated other comprehensive income into net income in the following circumstances: (i) a parent entity ceases to have a controlling financial interest in a subsidiary or group of assets that is a business within a foreign entity if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided; (ii) a partial sale of an equity method investment that is a foreign entity; (iii) a partial sale of an equity method investment that is not a foreign entity whereby the partial sale represents a complete or substantially complete liquidation of the foreign entity that held the equity method investment; and (iv) the sale of an investment in a foreign entity. This ASU will become effective for us on January 1, 2014. The impact of this ASU on our financial statements will be considered in the event we initiate any of the transactions described above.