Amcol International 10-Q 2011 Q2 Quarterly report

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

(x) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended                                                 June 30, 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)	(IRS Employer Identification No.)
2870 Forbs Avenue, Hoffman Estates, IL	60192
(Address of principal executive offices)	(Zip Code)

(847) 851-1500

(Registrant’s telephone number, including area code)

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 whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act).

Large accelerated filer  ¨	Accelerated filer  x	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 Exchange Act).    Yes  ¨    No  x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding at July 29, 2011
(Common stock, $.01 par value)	31,647,359 Shares

1

AMCOL INTERNATIONAL CORPORATION

INDEX

		Page No.
Part I - Financial Information
Item 1:	Financial Statements Condensed Consolidated Balance Sheets – June 30, 2011 and December 31, 2010		3
	Condensed Consolidated Statements of Operations – three and six months ended June 30, 2011 and 2010		5
	Condensed Consolidated Statements of Comprehensive Income – three and six months ended June 30, 2011 and 2010		6
	Condensed Consolidated Statements of Changes in Equity – six months ended June 30, 2011 and 2010		7
	Condensed Consolidated Statements of Cash Flows – six months ended June 30, 2011 and 2010		8
	Notes to Condensed Consolidated Financial Statements		9
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations		19
Item 3:	Quantitative and Qualitative Disclosures About Market Risk		36
Item 4:	Controls and Procedures		36
Part II - Other Information
Item 5:	Other Information		36
Item 6:	Exhibits		38

2

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

Item 1: Financial Statements

ASSETS	June 30, 2011 (unaudited)		December 31, 2010 *
Current assets:
Cash and cash equivalents	$	17,928	$	27,262
Accounts receivable, net		228,525		193,968
Inventories		120,279		107,515
Prepaid expenses		18,297		12,581
Deferred income taxes		5,668		5,553
Income tax receivable		12,810		8,474
Other		336		6,211
Total current assets		403,843		361,564
Noncurrent assets:
Property, plant, equipment, and mineral rights and reserves:
Land		11,237		11,591
Mineral rights		49,140		51,435
Depreciable assets		477,513		454,351
		537,890		517,377
Less: accumulated depreciation and depletion		273,528		256,889
		264,362		260,488
Goodwill		71,729		70,909
Intangible assets, net		39,259		42,590
Investment in and advances to affiliates and joint ventures		22,580		19,056
Available-for-sale securities		6,552		14,168
Deferred income taxes		5,898		7,570
Other assets		24,418		22,748
Total noncurrent assets		434,798		437,529
Total Assets	$	838,641	$	799,093

Continued…

3

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

LIABILITIES AND SHAREHOLDERS’ EQUITY	June 30, 2011 (unaudited)			December 31, 2010 *
Current liabilities:
Accounts payable	$	61,279		$	53,167
Accrued liabilities		72,120			59,308
Total current liabilities		133,399			112,475
Noncurrent liabilities:
Long-term debt		240,532			236,171
Pension liabilities		21,738			21,338
Deferred compensation		9,547			8,686
Other long-term liabilities		19,035			19,987
Total noncurrent liabilities		290,852			286,182
Shareholders’ Equity:
Common stock		320			320
Additional paid in capital		91,364			95,074
Retained earnings		297,828			283,189
Accumulated other comprehensive income		24,398			28,936
Less: Treasury stock		(4,380	)		(8,945	)
Total AMCOL shareholders’ equity		409,530			398,574
Noncontrolling interest		4,860			1,862
Total equity		414,390			400,436
Total Liabilities and Shareholders’ Equity	$	838,641		$	799,093

*Condensed from audited financial statements.

  The accompanying notes are an integral part of these condensed consolidated financial statements.

4

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share amounts)

	Six Months Ended June 30,						Three Months Ended June 30,
	2011			2010			2011			2010
Net sales	$	473,248		$	395,664		$	250,833		$	220,713
Cost of sales		352,334			290,342			188,039			159,938
Gross profit		120,914			105,322			62,794			60,775
General, selling and administrative expenses		80,214			70,818			40,664			37,031
Operating profit		40,700			34,504			22,130			23,744
Other income (expense):
Interest expense, net		(5,484	)		(4,550	)		(2,802	)		(2,334	)
Other, net		113			(117	)		489			330
		(5,371	)		(4,667	)		(2,313	)		(2,004	)
Income before income taxes and income (loss) from affiliates and joint ventures		35,329			29,837			19,817			21,740
Income tax expense		10,331			7,701			5,966			5,519
Income before income (loss) from affiliates and joint ventures		24,998			22,136			13,851			16,221
Income (loss) from affiliates and joint ventures		996			(71	)		(93	)		20
Net income (loss)		25,994			22,065			13,758			16,241
Net income (loss) attributable to noncontrolling interests		4			(212	)		3			92
Net income (loss) attributable to AMCOL shareholders	$	25,990		$	22,277		$	13,755		$	16,149
Weighted average common shares outstanding		31,611			31,092			31,706			31,141
Weighted average common and common equivalent shares outstanding		32,099			31,467			32,206			31,515
Basic earnings per share attributable to AMCOL shareholders	$	0.82		$	0.72		$	0.43		$	0.52
Diluted earnings per share attributable to AMCOL shareholders	$	0.81		$	0.71		$	0.43		$	0.51
Dividends declared per share	$	0.36		$	0.36		$	0.18		$	0.18

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(In thousands)

	Total				AMCOL Shareholders				Noncontrolling Interest
	Six Months Ended June 30,				Six Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010		2011		2010
Net income (loss)	$	25,994	$	22,065	$	25,990	$	22,277	$	4	$	(212)
Other comprehensive income (loss):
Foreign currency translation adjustment		2,356		(12,902)		2,355		(12,838)		1		(64)
Unrealized gain (loss) on available-for-sale securities, net of tax		(6,593)		(668)		(6,593)		(668)		-		-
Unrealized gain (loss) on interest rate swap agreements, net of tax		(350)		(2,374)		(350)		(2,374)		-		-
Pension adjustment, net of tax		50		64		50		64		-		-
Comprehensive income (loss)	$	21,457	$	6,185	$	21,452	$	6,461	$	5	$	(276)

	Total				AMCOL Shareholders				Noncontrolling Interest
	Three Months Ended June 30,				Three Months Ended June 30,				Three Months Ended June 30,
	2011		2010		2011		2010		2011		2010
Net income (loss)	$	13,758	$	16,241	$	13,755	$	16,149	$	3	$	92
Other comprehensive income (loss):
Foreign currency translation adjustment		443		(11,564)		410		(11,508)		33		(56)
Unrealized gain (loss) on available-for-sale securities, net of tax		(3,701)		1,318		(3,701)		1,318		-		-
Unrealized gain (loss) on interest rate swap agreements, net of tax		(807)		(1,788)		(807)		(1,788)		-		-
Pension adjustment, net of tax		25		34		25		34		-		-
Comprehensive income (loss)	$	9,718	$	4,241	$	9,682	$	4,205	$	36	$	36

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited)

(In thousands)

				AMCOL Shareholders
	Total Equity			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Common Stock		Treasury Stock			Paid-in Capital			Noncontrolling Interest
Balance at December 31, 2009	$	379,772		$	275,200		$	32,174		$	320	$	(14,377	)	$	84,830		$	1,625
Net income (loss)		22,065			22,277														(212	)
Cash dividends		(11,149	)		(11,149	)
Issuance of treasury shares pursuant to employee stock compensation plans		4,061											3,000			1,061
Tax benefit from employee stock compensation plans		89														89
Vesting of common stock in connection with employee stock compensation plans		1,618														1,618
Other comprehensive income (loss)		(15,880	)					(15,816	)										(64	)
Balance at June 30, 2010		380,576			286,328			16,358			320		(11,377	)		87,598			1,349
Balance at December 31, 2010	$	400,436		$	283,189		$	28,936		$	320	$	(8,945	)	$	95,074		$	1,862
Net income (loss)		25,994			25,990														4
Cash dividends		(11,351	)		(11,351	)
Issuance of treasury shares pursuant to employee stock compensation plans		6,486											4,565			1,921
Tax benefit from employee stock compensation plans		600														600
Vesting of common stock in connection with employee stock compensation plans		2,361														2,361
Purchase of noncontrolling interest		(5,735	)													(5,189	)		(546	)
Sale of subsidiary shares to noncontrolling interest		-						(1,390	)							(3,403	)		4,793
Deconsolidation of variable interest entity		(1,254	)																(1,254	)
Other comprehensive income (loss)		(3,147	)					(3,148	)										1
Balance at June 30, 2011		414,390			297,828			24,398			320		(4,380	)		91,364			4,860

The accompanying notes are an integral part of these condensed consolidated financial statements.

7

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

	Six Months Ended June 30,
	2011		2010
Cash flow from operating activities:
Net income	$	25,994	$	22,065
Adjustments to reconcile from net income (loss) to net cash provided by (used in) operating activities:
Depreciation, depletion, and amortization		19,731		17,022
Other non-cash charges		2,891		3,655
Changes in assets and liabilities, net of effects of acquisitions:
Decrease (increase) in current assets		(57,469)		(49,570)
Decrease (increase) in noncurrent assets		(843)		(1,832)
Increase (decrease) in current liabilities		22,016		14,667
Increase (decrease) in noncurrent liabilities		1,528		843
Net cash provided by (used in) operating activities		13,848		6,850
Cash flow from investing activities:
Capital expenditures		(24,800)		(25,939)
Investments in and advances to affiliates and joint ventures		(1,276)		(1,985)
Other		1,718		1,493
Net cash (used in) investing activities		(24,358)		(26,431)
Cash flow from financing activities:
Net change in outstanding debt		4,530		17,808
Proceeds from sales of treasury stock		6,619		2,904
Dividends		(11,351)		(11,149)
Excess tax benefits from stock-based compensation		651		164
Net cash provided by (used in) financing activities		449		9,727
Effect of foreign currency rate changes on cash		727		(779)
Net increase (decrease) in cash and cash equivalents		(9,334)		(10,633)
Cash and cash equivalents at beginning of period		27,262		27,669
Cash and cash equivalents at end of period	$	17,928	$	17,036

The accompanying notes are an integral part of these condensed consolidated financial statements.

8

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(In thousands)

Note 1:           SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Company Operations

We, AMCOL International Corporation (the “Company”), are a global company focused on long term profitable growth through the development and application of minerals and technology products and services to various industrial and consumer markets. We operate in five segments: minerals and materials, environmental, oilfield services, transportation and corporate. Our minerals and materials segment mines, processes and distributes minerals and products with similar applications for use in various industrial and consumer markets, including metalcasting, pet care, laundry care, and drilling industries. Additionally, this segment develops and manufactures synthetic materials principally for personal care applications. Our environmental segment manufactures and distributes products and provides related services for use as moisture and vapor barriers in commercial construction, landfills and a variety of other industrial and commercial applications. Our oilfield services segment provides both onshore and offshore water treatment filtration, well testing, pipeline separation, nitrogen, coil tubing and other services to the oil and natural gas industry. Our transportation segment includes both a long-haul trucking business and a freight brokerage business for our domestic subsidiaries as well as third parties. Our corporate segment includes the elimination of intersegment sales as well as certain expenses associated with research and development, management, employee benefits and information technology activities for our Company. Approximately 77% and 100% of the revenue elimination in the six months ended June 30, 2011 and 2010, respectively, and 74% and 100% of the revenue elimination in the three months ended June 30, 2011 and 2010, respectively, represents elimination of shipping revenues between our transportation segment and its domestic sister companies. The composition of our revenues by segment is as follows:

	Six  Months Ended June 30,
	2011	2010
Minerals and materials	50%	52%
Environmental	29%	26%
Oilfield services	19%	18%
Transportation	6%	6%
Intersegment sales	-4%	-2%
	100%	100%

Further discussion of 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, 2010, is unaudited. The condensed consolidated balance sheet as of December 31, 2010 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, 2010. The information furnished herein includes all adjustments that are, in our opinion, necessary

9

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(In thousands)

for a fair presentation of our results of operations and cash flows for the interim periods ended June 30, 2011 and 2010, and our financial position as of June 30, 2011, 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, 2010.

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

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

Recently Issued Accounting Pronouncements

Accounting pronouncements that have not yet become effective with respect to our consolidated financial statements are detailed as follows, together with our assessment of the potential impact they may have on our consolidated financial statements.

In June 2011, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update (“ASU”) 2011-05, codified in Accounting Standard Codification (“ASC”) Topic 220 – Comprehensive Income. The objective of this ASU is 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. It also requires any reclassification adjustments between OCI and net income to be presented separately on the face of the financial statements. This ASU is not expected to have a material impact on our financial statements when we adopt it on January 1, 2012.

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, the guidance requires additional disclosures for fair value measurements that are based on significant inputs. This ASU is not expected to have a material impact on our financial statements when we adopt it on January 1, 2012.

Note 2:           EARNINGS PER SHARE

The table below provides further share information used in computing our earnings per share for the periods presented herein. Basic earnings per share was computed by dividing net income attributable to AMCOL shareholders by the weighted average number of common shares outstanding

10

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(In thousands)

during each period. Diluted earnings per share was computed by dividing net income attributable to AMCOL shareholders by the weighted average common shares outstanding after consideration of the dilutive effect of stock based compensation outstanding during each period.

	Six Months Ended June 30,				Three Months Ended June 30,
	2011		2010		2011		2010
Weighted average number of common shares outstanding		31,611,265		31,091,659		31,706,082		31,141,368
Dilutive impact of stock based compensation		487,247		375,680		499,683		373,522
Weighted average number of common and common equivalent shares outstanding for the period		32,098,512		31,467,339		32,205,765		31,514,890
Number of common shares outstanding at the end of the period		31,645,359		31,034,171		31,645,359		31,034,171
Weighted average number of anti-dilutive shares excluded from the computation of diluted earnings per share		175,614		554,056		230,665		610,295

Note 3:        ADDITIONAL BALANCE SHEET INFORMATION

Our inventories at June 30, 2011 and December 31, 2010 are comprised of the following components:

	June 30, 2011		December 31, 2010
Crude stockpile inventories	$	41,850	$	35,308
In-process and finished goods inventories		56,038		47,510
Other raw material, container, and supplies inventories		22,391		24,697
	$	120,279	$	107,515

We mine various minerals using a surface mining process that requires the removal of overburden. In certain areas and under various governmental regulations, we are obligated to restore the land comprising each mining site to its original condition at the completion of the mining activity. We include an estimate of this reclamation liability in our Condensed Consolidated Balance Sheets; it is adjusted to reflect the passage of time and changes in estimated future cash outflows. A reconciliation of the activity within our reclamation liability is as follows:

	Six Months Ended June 30,
	2011			2010
Balance at beginning of period	$	7,529		$	6,584
Settlement of obligations		(1,267	)		(692	)
Liabilities incurred and accretion expense		2,022			906
Foreign currency		(28	)		(24	)
Balance at end of period	$	8,256		$	6,774

11

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(In thousands)

We own shares of Ashapura Minechem Limited (“Ashapura”), a public company traded on the Bombay Stock Exchange Limited. We include this investment at its fair value within our Condensed Consolidated Balance Sheets with the unrealized gains or losses, resulting from fluctuations in its fair value, as a component of accumulated other comprehensive income within equity. The following table sets forth the gains recorded in accumulated comprehensive income (loss) within equity in Condensed Consolidated Balance Sheet:

	��	June 30,          2011		December 31, 2010
Unrealized gain on avaliable-for-sale securities		$	5,254	$	12,869
Tax expense			-		1,022
Unrealized gain on avaliable-for-sale securities, net of tax expense		$	5,254	$	11,847

Note 4:        BUSINESS SEGMENT INFORMATION

As previously mentioned, we operate in five segments. Our segments are fairly diverse with respect to the products and services they offer as well as the customers they serve. Accordingly, we organize our segments based on the products provided and industries they serve. We measure segment performance based on operating profit, which is defined as net sales less cost of sales and general, selling and administrative expenses related to a segment’s operations. The costs deducted to arrive at operating profit do not include several items, such as net interest expense or income taxes. Segment assets are those assets used in the operations of that segment. Corporate assets include cash and cash equivalents, corporate leasehold improvements, assets associated with certain employee benefit plans, and other miscellaneous equipment.

12

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(In thousands)

The following summaries set forth certain financial information by segment:

	Six Months Ended June 30,				Three Months Ended June  30,
	2011		2010		2011		2010
Net sales:
Minerals and materials	$	236,731	$	204,085	$	119,851	$	106,397
Environmental		136,553		103,334		81,220		65,159
Oilfield services		89,581		69,848		44,837		39,644
Transportation		27,454		25,703		14,780		13,583
Intersegment sales		(17,071)		(7,306)		(9,855)		(4,070)
Total	$	473,248	$	395,664	$	250,833	$	220,713
Operating profit (loss):
Minerals and materials	$	30,870	$	30,632	$	14,699	$	16,326
Environmental		10,502		7,797		8,219		8,014
Oilfield services		8,295		5,781		3,423		4,553
Transportation		1,150		1,210		685		699
Corporate		(10,117)		(10,916)		(4,896)		(5,848)
Total	$	40,700	$	34,504	$	22,130	$	23,744
	As of Jun. 30, 2011		As of Dec. 31, 2010
Assets:
Minerals and materials	$	403,874	$	402,640
Environmental		180,812		160,053
Oilfield services		185,191		173,239
Transportation		4,852		4,071
Corporate		63,912		59,090
Total	$	838,641	$	799,093

13

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(In thousands)

	Six Months Ended June 30,				Three Months Ended June 30,
	2011		2010		2011		2010
Depreciation, depletion and amortization:
Minerals and materials	$	9,819	$	7,772	$	5,276	$	3,976
Environmental		2,615		2,579		1,330		1,195
Oilfield services		6,122		5,779		3,120		2,855
Transportation		34		20		19		12
Corporate		1,141		872		580		432
Total	$	19,731	$	17,022	$	10,325	$	8,470
Capital expenditures:
Minerals and materials	$	9,055	$	19,070	$	6,271	$	6,069
Environmental		1,868		955		1,153		502
Oilfield services		12,898		4,906		6,466		2,404
Transportation		154		38		154		1
Corporate		825		970		338		886
Total	$	24,800	$	25,939	$	14,382	$	9,862
Research and development (income) expense:
Minerals and materials	$	3,140	$	2,759	$	1,528	$	1,436
Environmental		1,050		1,274		562		628
Oilfield services		204		322		145		163
Corporate		(153)		40		33		(41)
Total	$	4,241	$	4,395	$	2,268	$	2,186

Note 5:        EMPLOYEE BENEFIT PLANS

Our net periodic benefit cost for our defined benefit pension plan was as follows:

	Six Months Ended June 30,				Three Months Ended June  30,
	2011		2010		2011		2010
Service cost	$	758	$	700	$	379	$	350
Interest cost		1,304		1,246		652		623
Expected return on plan assets		(1,429)		(1,308)		(715)		(654)
Amortization of prior service cost		32		32		16		16
Net periodic benefit cost	$	665	$	670	$	332	$	335

As previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2010, we expect to contribute up to $1,500 to our pension plan in 2011, of which $500 was contributed in the first quarter ended March 31, 2011.

14

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(In thousands)

Note 6:        INCOME TAXES

Our effective tax rate for the six months ended June 30, 2011 and 2010 was 29.2% and 25.8%, respectively. For both periods, the rate differs from the U.S. federal statutory rate of 35.0% largely due to depletion deductions, changes in tax reserves, and differences in local tax rates on the income from our foreign subsidiaries.

In the normal course of business, we are subject to examination by taxing authorities throughout the world. With few exceptions, we are no longer subject to income tax examinations by tax authorities for years prior to 2004. In general, the United States Internal Revenue Service (“IRS”) has examined our federal income tax returns for all years through 2007.

Note 7:        DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITES

As a multinational corporation with operations throughout the world, we are subject to certain market risks. We use a variety of practices to manage these market risks, including, when considered appropriate, derivative financial instruments. We use derivative financial instruments only for risk management and not for trading or speculative purposes.

The following table sets forth the fair values of our derivative instruments and where they are recorded within our Condensed Consolidated Balance Sheet:

Liability Derivatives	Balance Sheet Location	Fair Value as of
		June 30, 2011			December 31, 2010
Derivatives designated as hedging instruments:
Interest rate swaps	Other long-term liabilities	$	(7,218	)	$	(6,666	)

Cash flow hedges

Derivatives in Cash Flow Hedging Relationships	Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives (Effective Portion)
	Six Months Ended June 30,						Three Months Ended June 30,
	2011			2010			2011			2010
Interest rate swaps, net of tax	$	(350	)	$	(2,374	)	$	(807	)	$	(1,788	)

15

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(In thousands)

We use interest rate swaps to manage floating interest rate risk on debt securities. Interest rate differentials are paid or received on these arrangements over the life of the agreements. As of June 30, 2011 and 2010, we had interest rate swaps outstanding which effectively hedge the variable interest rate on $30,000 of our senior notes to a fixed rate of 5.6% per annum and $33,000 of our borrowings under our revolving credit agreement to a fixed rate of 3.3% per annum plus credit spread.

Other

We are exposed to potential gains or losses from foreign currency fluctuations affecting net investments and earnings denominated in foreign currencies. Our primary U.S. dollar exposures are to fluctuations in the Euro, British Pound, Polish Zloty and South African Rand. We also have significant exposure to fluctuations in exchange rates between the British Pound and the Euro as well as between the Polish Zloty and the Euro. When we believe it appropriate, we enter into foreign exchange derivative contracts to mitigate the risk of fluctuations in these foreign currency exchange rates.

We have not designated our foreign currency derivative contracts for hedge accounting treatment and therefore, changes in fair value of these contracts are recorded in earnings as follows:

Derivatives Not Designated as Hedging Instruments	Location of Gain or (Loss) Recognized in Income on Derivatives	Amount of Gain or (Loss)  Recognized in Income on Derivatives
		Six Months Ended June 30,						Three Months Ended June 30,
		2011			2010			2011			2010
Foreign currency exchange contracts	Other, net	$	(1,324	)	$	(189	)	$	(215	)	$	(190	)

We did not have any significant foreign exchange derivative instruments outstanding as of June 30, 2011 or December 31, 2010.

Note 8:        FAIR VALUE MEASUREMENTS

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Our calculation of the fair value of derivative instruments includes several assumptions. The fair value hierarchy prioritizes these input assumptions in the following three broad levels:

Level 1 – Valuation is based on quoted prices (unadjusted) in active markets for identical assets or liabilities we have the ability to access at the measurement date.

Level 2 – Valuation is based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and model based valuations for which all significant inputs are observable in the market.

16

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(In thousands)

Level 3 – Valuation is based on model based techniques that use unobservable inputs for the asset or liability. These inputs reflect our own assumption about the assumption market participants would use in pricing the asset or liability.

The following tables categorize our fair value instruments, measured on a recurring basis, according to the assumptions used to calculate those values:

				Fair Value Measurements Using
Description	Asset / (Liability) Balance at 6/30/2011			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Interest rate swaps	$	(7,218	)	$	-	$	(7,218	)	$	-
Available-for-sale securities		6,552			6,552		-			-
Deferred compensation plan assets		8,865			-		8,865			-
Supplementary pension plan assets		8,007			-		8,007			-

				Fair Value Measurements Using
Description	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.

17

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(In thousands)

Note 9:        NONCONTROLLING INTEREST

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

In February 2011, we sold 26% of our interest in Batlhako Mining Limited (“Batlhako”) to Vengawave (Proprietary) Limited, which is a Black Economic Empowerment enterprise (a “BEE”) in the Republic of South Africa. Batlhako is our subsidiary dedicated strictly to mining 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.

Following table sets forth the effects of these transactions on equity attributable to AMCOL’s shareholders.

	Six Months Ended June  30, 2011
Net income attributable to AMCOL shareholders	$	25,990
Transfers from noncontrolling interest:
Decrease in additional paid-in capital for purchase of the remaining noncontrolling interest in South Africa (Proprietary) Limited		(5,189)
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	$	17,398

Note 10:        CONTINGENCIES

We are party to a number of lawsuits arising in the normal course of business. We do not believe that any pending litigation will have a material adverse effect on our consolidated financial statements.

Note 11:        SUBSEQUENT EVENTS

In July 2011, we reached a successful conclusion to our efforts to recover certain expenses previously paid to a vendor serving our South African chrome sand operations. As a result, we will recognize a $1,464 reduction of our cost of sales within our Consolidated Statement of Operations for the three and nine month periods ending September 30, 2011.

18

Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

From time to time, certain statements we make, including statements in this Management’s Discussion and Analysis of Financial Condition and Results of Operations section, constitute “forward-looking statements” made in reliance upon the safe harbor contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include statements relating to our Company or our operations that are preceded by terms such as “expects,” “believes,” “anticipates,” “intends” and similar expressions, and statements relating to anticipated growth and levels of capital expenditures. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Our actual results, performance or achievements could differ materially from the results, performance or achievements expressed in, or implied by, these forward-looking statements as a result of various factors, including without limitation the following: actual performance in our various markets; conditions in the metalcasting and construction markets; oil and gas prices and conditions in those industries; operating costs; seasonality of our environmental and oilfield services segments; competition and regulation; currency exchange rates and devaluations; delays in development, production and marketing of new products; integration of acquired businesses; conducting and expanding operations in international markets; and other factors set forth from time to time in our reports filed with the Securities and Exchange Commission (SEC). We undertake no duty to update any forward looking statements to actual results or changes in our expectations.

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, and bringing additional products and services to markets we already 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 revenue 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, Russia, Azerbaijan and Mexico. We also market and 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 has several unique characteristics including 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 core components of our longevity and future prospects.

19

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 chromite mine in South Africa. Our oilfield services segment principally operates in North America’s 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 performs trucking services for our domestic minerals and materials and environmental businesses 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 industrial construction industries, impacts our revenues. Our fastest growing markets are in the Asia-Pacific and European regions.

Sustainable, long-term profitable 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 Eastern 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 a majority 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.

20

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

A number of risks will challenge us in meeting these long-term objectives, and there can be no assurance that we will achieve success in implementing any one or more of them. We describe certain risks throughout this report as well as under “Item 1A. Risk Factors” and “Item 7A. Quantitative and Qualitative Disclosure About Market Risk” within our Annual Report on Form 10-K for the year ended December 31, 2010. In general, the significance of these risks has not materially changed since our Annual Report on Form 10-K for the period ended December 31, 2010.

Critical Accounting Policies and Estimates

Management’s Discussion and Analysis of our Financial Condition and Results of Operations describes relevant aspects of our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. We evaluate the accounting policies and estimates used to prepare the financial statements on an ongoing basis. We consider the accounting policies used in preparing our financial statements to be critical accounting policies when they are both important to the portrayal of our financial condition and results of operations, and require us to make estimates, complex judgments, and assumptions, including with respect to events which are inherently uncertain. As a result, actual results could differ from these estimates. For more information on our critical accounting policies, please read our Annual Report on Form 10-K for the year ended December 31, 2010.

Analysis of Results of Operations

Following is a discussion and analysis that describes certain factors that have affected, and may continue to affect, our financial position and operating results. This discussion should be read with the accompanying condensed consolidated financial statements.

The following consolidated income statement review and segment analysis discuss the results for the three and six months periods ended June 30, 2011 and the comparable results in the prior year. In each section, a discussion of our consolidated results is presented first, followed by more detailed discussion of performance within our segments.

21

Three months ended June 30, 2011 vs. June, 2010

Consolidated Income Statement Review

The table below compares our operating results for the quarters ended June 30, 2011 and 2010.

Consolidated	Three Months Ended June 30,
	2011		2010		2011 vs. 2010
	(Dollars in Thousands, Except Per Share Amounts)
Net sales	$	250,833	$	220,713		13.6%
Cost of sales		188,039		159,938
Gross profit		62,794		60,775		3.3%
margin %		25.0%		27.5%
General, selling and administrative expenses		40,664		37,031		9.8%
Operating profit		22,130		23,744		-6.8%
margin %		8.8%		10.8%
Other income (expense):
Interest expense, net		(2,802)		(2,334)		20.1%
Other, net		489		330		48.2%
		(2,313)		(2,004)
Income before income taxes and income (loss) from affiliates and joint ventures		19,817		21,740
Income tax expense		5,966		5,519		8.1%
effective tax rate		30.1%		25.4%
Income before income (loss) from affiliates and joint ventures		13,851		16,221
Income (loss) from affiliates and joint ventures		(93)		20		NA
Net income (loss)		13,758		16,241
Net income (loss) attributable to noncontrolling interests		3		92		-96.7%
Net income (loss) attributable to AMCOL shareholders	$	13,755	$	16,149		-14.8%
Basic earnings per share attributable to AMCOL shareholders	$	0.43	$	0.52		-17.3%
Diluted earnings per share attributable to AMCOL shareholders	$	0.43	$	0.51		-15.7%

We measure sales fluctuations by the relevant components: organic, acquisitions, and foreign currency translation. Fluctuation due to foreign currency translation is measured as the change in revenues resulting from differences in currency exchange rates between periods. Fluctuation due to acquisitions is measured as the changes in revenues resulting from acquired businesses within the first year (twelve consecutive months) we own them. Any remaining fluctuation is due to organic components. The following table details the consolidated sales fluctuations by components over the prior year’s comparable period:

22

	Organic		Acquisitions		Currency   Translation		Total
Minerals and materials		4.7%		0.0%		1.4%		6.1%
Environmental		5.9%		0.0%		1.4%		7.3%
Oilfield services		1.9%		0.0%		0.5%		2.4%
Transportation & intersegment shipping		-2.2%		0.0%		0.0%		-2.2%
Total		10.3%		0.0%		3.3%		13.6%
% of change		75.5%		0.0%		24.5%		100.0%

The following table shows the distribution of sales across our three principal geographic regions (Americas; Europe, Middle East, and Africa (EMEA); and Asia Pacific) and the comparable total from the prior year’s period:

	Americas		EMEA		Asia Pacific		Total
Minerals and materials		28.1%		8.7%		10.4%		47.2%
Environmental		15.7%		14.5%		1.9%		32.1%
Oilfield services		15.4%		0.9%		1.4%		17.7%
Transportation & intersegment shipping		3.0%		0.0%		0.0%		3.0%
Total - current year’s period		62.2%		24.1%		13.7%		100.0%
Total from prior year’s comparable period		64.8%		21.2%		14.0%		100.0%

Net sales:

Approximately 75.5% of our net sales growth was derived organically with the remainder being driven by favorable foreign currency translation. We continue to experience growth in our metalcasting markets due to new products and strong demand resulting from increased production of automobiles and heavy equipment and machinery worldwide. Net sales increased in each of our segments with the majority of the increase occurring in our Environmental segment. Growth in our European Environmental segment and our South African chrome sand operations in Minerals and Materials segment helped increase the concentration of our sales from the EMEA region as compared to the prior year’s period.

Gross profit:

Overall gross profit increased due to the increase in sales mentioned above. However, gross margins decreased overall with each segment experiencing a decrease in gross margins as discussed later herein.

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

SG&A expenses increased overall due to increases in employee compensation and related costs. Unfavorable foreign currency exchange rate movements accounted for approximately 28.6% of the increase.

23

Operating profit:

Operating profit decreased as the increase in our SG&A expenses exceeded the increase in our gross profits. Again, the decrease in gross margins across all segments primarily accounts for the decrease in operating profit and operating profit margin as SG&A expenses as a percentage of net sales actually decreased as compared to the prior year’s period.

Income tax expense:

We provide for income taxes each quarter based on our estimate of expected, annual pre-tax income in each business worldwide and the statutory tax rates for each of those businesses. Our effective tax rate increased 470 basis points to 30.1% due to changes in our expected distribution of income between foreign and domestic businesses. In 2011, we are expecting our pre-tax income to be more heavily concentrated in our domestic businesses than in previous years.

Net income attributable to AMCOL shareholders:

Net income decreased due to the decrease in operating profit coupled with the increase in our effective tax rate, as previously mentioned.

Diluted earnings per share (EPS):

Diluted EPS decreased commensurate with the decrease in net income. The change in weighted average shares outstanding did not have a material effect on diluted earnings per share.

Quarterly Review of Each Segment’s Results

Following is a review of operating results for each of our five reporting segments:

Minerals and Materials Segment

Minerals and Materials	Three Months Ended June 30,
	2011			2010			2011 vs. 2010
	(Dollars in Thousands)
Net sales	$	119,851	100.0%	$	106,397	100.0%	$	13,454	12.6%
Cost of sales		92,862	77.5%		79,057	74.3%
Gross profit		26,989	22.5%		27,340	25.7%		(351)	-1.3%
General, selling and administrative expenses		12,290	10.3%		11,014	10.4%		1,276	11.6%
Operating profit		14,699	12.2%		16,326	15.3%		(1,627)	-10.0%

24

Minerals and Materials Product Line Sales	Three Months Ended June 30,
	2011		2010		% change
	(Dollars in Thousands)
Metalcasting	$	64,686	$	49,857		29.7	%
Specialty materials		26,015		27,055		-3.8	%
Pet products		12,998		14,453		-10.1	%
Basic minerals		11,498		13,429		-14.4	%
Other product lines		4,654		1,603		190.3	%
Total		119,851		106,397		12.6	%

Increased volumes in our domestic and Asian businesses, especially in our metalcasting markets, along with increased sales of our new chrome sand products accounted for the majority of the increase in net sales. Favorable fluctuations in foreign currency exchange rates comprised approximately 22.3% of the increase in net sales. Our metalcasting product line, which includes chrome sand sales to foundry customers, continue to experience an increase in demand due to growth in demand for automobile and heavy equipment castings at our customers.

Gross profits decreased slightly while gross profit margins decreased significantly. The decrease in margins occurred in our Asian and domestic businesses, which experienced increased manufacturing costs. Our start up chrome sand operations, which began late in the second quarter of 2010, also contributed to the decreased margins as these operations suffer from low production yield and throughput. Our chrome sand operations negatively impacted our gross margin by 160 basis points and 80 basis points in the three months ended June 30, 2011 and 2010, respectively.

SG&A expenses increased due to employee and employee related expenses. The growth in SG&A expenses combined with the lower gross profits account for the decrease in operating profits and operating profit margins. Our chrome sand operations negatively impacted our operating margin by 190 basis points and 130 basis points in the three months ended June 30, 2011 and 2010, respectively.

Environmental Segment

Environmental	Three Months Ended June 30,
	2011			2010			2011 vs. 2010
	(Dollars in Thousands)
Net sales	$	81,220	100.0%	$	65,159	100.0%	$	16,061	24.6%
Cost of sales		58,642	72.2%		45,037	69.1%
Gross profit		22,578	27.8%		20,122	30.9%		2,456	12.2%
General, selling and administrative expenses		14,359	17.7%		12,108	18.6%		2,251	18.6%
Operating profit		8,219	10.1%		8,014	12.3%		205	2.6%

25

Environmental Product Line Sales	Three Months Ended June 30,
	2011		2010		% change
	(Dollars in Thousands)
Lining technologies	$	32,621	$	35,022		-6.9	%
Building materials		21,159		13,540		56.3	%
Contracting services		18,980		10,425		82.1	%
Drilling products		8,460		6,172		37.1	%
Total		81,220		65,159		24.6	%

Organic demand for our environmental products increased over the prior year period, when the recession was more pronounced in the commercial construction market. Approximately 19.8% of the increase in net sales was derived from fluctuations in foreign currency exchange rates used to translate results of our international businesses. Excluding favorable fluctuations in foreign currency exchange rates, operating profits decreased due to decreased operating profit margins.

Our contracting services business, especially in the U.S., experienced significant revenue growth due to its ability to win larger contracts in addition to the economic recession that existed in the prior year’s period; however, these projects generated minimal operating profits. Our building materials business also experienced increased revenues due in part to increased success of new product introductions. Our lining technologies business continues to experience increased competition worldwide.

The increase in gross profits results from the increased sales levels. Gross margins, however, decreased due to increased competition in our lining technologies business and a greater concentration (23.4% versus 16.0%) of revenues in our lower margin, contracting services businesses. Increased production and raw material costs, especially in resins, also contributed to the decrease in gross margins.

Approximately 77.2% of the increase in SG&A expenses occurred in our European operations due to expansion of our revenue base into new geographic markets and fluctuations in foreign currency exchange rates.

Oilfield Services Segment

Oilfield Services	Three Months Ended June 30,
	2011			2010			2011 vs. 2010
	(Dollars in Thousands)
Net sales	$	44,837	100.0%	$	39,644	100.0%	$	5,193		13.1%
Cost of sales		33,372	74.4%		27,874	70.3%
Gross profit		11,465	25.6%		11,770	29.7%		(305	)	-2.6%
General, selling and administrative expenses		8,042	17.9%		7,217	18.2%		825		11.4%
Operating profit		3,423	7.7%		4,553	11.5%		(1,130	)	-24.8%

The majority of the revenue increase was due to greater demand for our domestic coiled tubing services due to growth in our onshore services in oil and gas bearing shale formations. Although we experienced growth in several other service lines, we also experienced decreased revenues in our

26

filtration services, which suffer from lack of demand resulting from a slow-down in permits being granted for offshore drilling in the Gulf of Mexico.

Although revenues increased, the mix of services comprising these revenues changed significantly and account for the decrease in gross profits and gross profit margins. Our revenues were more concentrated in lower margin, onshore work as opposed to higher margin, offshore work; the decrease in revenues within our filtration services accounts for a significant portion of the decrease in gross profits and gross profit margins.

SG&A expenses increased due to increased compensation, benefits, and employee related expenses. The changes in operating profits and related margin followed from the changes in gross profits and gross profit margin.

Transportation Segment

Transportation	Three Months Ended June 30,
	2011			2010			2011 vs. 2010
	(Dollars in Thousands)
Net sales	$	14,780	100.0%	$	13,583	100.0%	$	1,197		8.8%
Cost of sales		13,140	88.9%		12,040	88.6%
Gross profit		1,640	11.1%		1,543	11.4%		97		6.3%
General, selling and administrative expenses		955	6.5%		844	6.2%		111		13.2%
Operating profit		685	4.6%		699	5.2%		(14	)	-2.0%

Fuel surcharges comprised the increase in revenues. This segment continues to see an increase in services being provided to divisions within our other domestic subsidiaries, principally our metalcasting and pet products divisions; these intercompany revenues are eliminated in the corporate segment.

Corporate Segment

Corporate	Three Months Ended June 30,
	2011			2010			2011 vs. 2010
	(Dollars in Thousands)
Intersegment sales	$	(9,855	)	$	(4,070	)		(5,785	)
Intersegment cost of sales		(9,977	)		(4,070	)
Gross profit (loss)		122			-			122
General, selling and administrative expenses		5,018			5,848			(830	)	-14.2	%
Operating loss		(4,896	)		(5,848	)		952		-16.3	%

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. Eliminations of intersegment sales and cost of sales have increased along with increased growth in each segment.

27

Corporate SG&A expenses decreased due to decreased employee benefit related expenses.

Six Months Ended June 30, 2011 vs. June, 2010

Consolidated Income Statement Review

The table below compares our operating results for the periods ended June 30, 2011 and 2010.

Consolidated	Six Months Ended June 30,
	2011		2010		2011 vs. 2010
	(Dollars in Thousands, Except Per Share Amounts)
Net sales	$	473,248	$	395,664		19.6%
Cost of sales		352,334		290,342
Gross profit		120,914		105,322		14.8%
margin %		25.5%		26.6%
General, selling and administrative expenses		80,214		70,818		13.3%
Operating profit		40,700		34,504		18.0%
margin %		8.6%		8.7%
Other income (expense):
Interest expense, net		(5,484)		(4,550)		20.5%
Other, net		113		(117)		-196.6%
		(5,371)		(4,667)
Income before income taxes and income (loss) from affiliates and joint ventures		35,329		29,837
Income tax expense		10,331		7,701		34.2%
effective tax rate		29.2%		25.8%
Income before income (loss) from affiliates and joint ventures		24,998		22,136
Income (loss) from affiliates and joint ventures		996		(71)		NA
Net income (loss)		25,994		22,065
Net income (loss) attributable to noncontrolling interests		4		(212)		NA
Net income (loss) attributable to AMCOL shareholders	$	25,990	$	22,277		16.7%
Basic earnings per share attributable to AMCOL shareholders	$	0.82	$	0.72		13.9%
Diluted earnings per share attributable to AMCOL shareholders	$	0.81	$	0.71		14.1%

We measure sales fluctuations in three components: organic, acquisitions, and foreign currency translation. Fluctuation due to foreign currency translation is measured as the change in revenues resulting from differences in currency exchange rates between periods. Fluctuation due to acquisitions is measured as the changes in revenues resulting from acquired businesses within the first year (twelve consecutive months) we own them. Any remaining fluctuation is due to organic components. The following table details the consolidated sales fluctuations by components over the prior year’s comparable period:

28

	Organic		Acquisitions		Foreign Exchange		Total
Minerals and materials		7.2%		0.0%		1.1%		8.3%
Environmental		7.2%		0.2%		1.0%		8.4%
Oilfield services		4.6%		0.0%		0.4%		5.0%
Transportation & intersegment shipping		-2.0%		0.0%		0.0%		-2.0%
Total		17.0%		0.2%		2.5%		19.7%
% of growth		86.4%		1.0%		12.6%		100.0%

The following table shows the distribution of sales across our three principal geographic regions (Americas; Europe, Middle East, and Africa (EMEA); and Asia Pacific) and the comparable total from the prior year’s period:

	Americas		EMEA		Asia Pacific		Total
Minerals and materials		29.3%		9.7%		10.6%		49.6%
Environmental		14.2%		12.6%		1.6%		28.4%
Oilfield services		17.0%		0.8%		1.2%		19.0%
Transportation & intersegment shipping		3.0%		0.0%		0.0%		3.0%
Total - current year’s period		63.5%		23.1%		13.4%		100.0%
Total from prior year’s comparable period		65.0%		20.5%		14.5%		100.0%

Net sales:

Net sales increased largely due to organic growth in all segments with our metalcasting, contracting services, coil tubing businesses experiencing the largest growth. Foreign currency translation accounted for 12.6% of the growth. The increase in revenues in our EMEA region results from growth in our South African chrome sand operations, which started late in the second quarter of 2010, and growth in our European businesses within our environmental segment.

Gross profit:

Overall gross profit increased due to the increase in sales mentioned above. Gross profit margins decreased in all segments, however. The decreased margins in our Minerals & Materials segment had the largest impact on the overall decrease in gross profit margins as discussed later herein.

Selling, General & administrative expenses (SG&A):

Approximately 14.7% of the increase in SG&A expenses results from fluctuations in foreign currency exchange rates. The majority of the remaining increase is primarily due to expenses associated with our employees, including compensation, benefits and other related costs.

Operating profit:

Operating profit increased due to the increase in gross profit mentioned earlier, partially offset by the increase in SG&A expenses. Our overall operating margin remained relatively stable on a year-to-date basis. However, this is due to the significant increase in our operating profit margins in the first quarter of 2011 being offset by decreased margins in the second quarter, both as compared to the prior year’s performance.

29

Interest expense, net:

Approximately 49.5% of the increase in interest expense, net results from increased interest rates on our variable rate debt. The remaining increase results from increased debt levels to fund our cash needs.

Income from affiliates and joint ventures:

Our affiliates and joint ventures generated increased income as most of the businesses are experiencing growth due to a recovery from the recession that existed in the prior year, especially our Japanese business. In addition, we have experienced reduced losses in our Belgian and Russian joint-ventures, both investments of which were completely written off in the fourth quarter of 2010.

Diluted earnings per share:

Diluted EPS decreased as decreased earnings in the second quarter of 2011 were larger than the increased earnings in the first quarter, both as compared to the prior year’s period. The change in weighted average shares outstanding accounted for $0.02 per share of the decrease in EPS in the six months ending June 30, 2011.

Furthermore, our chrome sand operations have generated losses of approximately $0.05 per share through the six months ending June 30, 2011. For the last six months of 2011, we expect these operations to lose between $0.08 and $0.12 per share. This excludes a $0.05 per share contingent gain we expect to record in the third quarter of 2011 relating to the recovery of certain expenses as discussed more fully in Note 11 of our Notes to Condensed Consolidated Financial Statements included in this Form 10-Q. Thus, we expect to lose between $0.08 and $0.12 per share for the full year of 2011.

Year-to-Date Review of Each Segment’s Results

Following is a review of operating results for each of our five reporting segments:

Minerals and Materials Segment

Minerals and Materials	Six Months Ended June 30,
	2011			2010			2011 vs. 2010
	(Dollars in Thousands)
Net sales	$	236,731	100.0%	$	204,085	100.0%	$	32,646	16.0%
Cost of sales		181,281	76.6%		152,535	74.7%
Gross profit		55,450	23.4%		51,550	25.3%		3,900	7.6%
General, selling and administrative expenses		24,580	10.4%		20,918	10.2%		3,662	17.5%
Operating profit		30,870	13.0%		30,632	15.1%		238	0.8%

30

Minerals and Materials Product Line Sales	Six Months Ended June 30,
	2011		2010		% change
	(Dollars in Thousands)
Metalcasting	$	124,838	$	94,197		32.5%
Specialty materials		52,036		52,863		-1.6%
Pet products		28,069		30,891		-9.1%
Basic minerals		23,040		22,775		1.2%
Other product lines		8,748		3,359		160.4%
Total		236,731		204,085		16.0%

Increased volumes in metalcasting products accounted for 93.9% of the increase in revenues due to increased demand for automobile and heavy equipment castings. Our metalcasting revenues are earned in all our geographic regions, including South Africa where our chrome sand operations started generating revenues late in the second quarter of 2010.

Gross profits increased due to the increased sales, however gross profit margins decreased due to the distribution of these sales and cost increases. A significant portion of the increase in sales in 2011 were driven by the increase in sales from our chrome sand operations; these sales continue to generate minimal gross profits as we experience significant yield losses and low throughput at the start-up manufacturing plant in South Africa. Our domestic operations also increased manufacturing costs.

SG&A expenses increased due to increased employee compensation and employee benefits expenses. However, these expenses also increased as the prior year’s period includes increased gains on sales of fixed assets and insurance proceeds recovered for losses incurred in prior periods.

Environmental Segment

Environmental	Six Months Ended June 30,
	2011			2010			2011 vs. 2010
	(Dollars in Thousands)
Net sales	$	136,553	100.0%	$	103,334	100.0%	$	33,219	32.1%
Cost of sales		97,919	71.7%		72,216	69.9%
Gross profit		38,634	28.3%		31,118	30.1%		7,516	24.2%
General, selling and administrative expenses		28,132	20.6%		23,321	22.6%		4,811	20.6%
Operating profit (loss)		10,502	7.7%		7,797	7.5%		2,705	34.7%

Environmental Product Line Sales	Six Months Ended June 30,
	2011		2010		% change
	(Dollars in Thousands)
Lining technologies	$	53,725	$	51,587		4.1%
Building materials		38,215		26,041		46.7%
Contracting services		30,210		14,639		106.4%
Drilling products		14,403		11,067		30.1%
Total		136,553		103,334		32.1%

31

Net sales increased due to increased demand for our products and services over the prior year, when the recession was more pronounced in the commercial construction market. Our contracting services business has been more successful in winning new construction contracts and our building materials group has also experienced growth due to the introduction of new products.

Gross profits have increased due to the increase in revenues. The decrease in gross profit margins on a year-to-date period results from the decreased gross profit margins generated in the second quarter of 2011. For a further explanation, please refer to the discussion of our Environmental segment’s results for the second quarter of 2011.

SG&A expenses have increased due in large part to increased employee compensation and related expenses in addition to expenses incurred to expand our presence in growing markets in Europe. Overall operating profits and related margins have largely followed the trends in gross profits and gross profit margins.

Oilfield Services Segment

Oilfield Services	Six Months Ended June 30,
	2011			2010			2011 vs. 2010
	(Dollars in Thousands)
Net sales	$	89,581	100.0%	$	69,848	100.0%	$	19,733	28.3%
Cost of sales		65,452	73.1%		50,064	71.7%
Gross profit		24,129	26.9%		19,784	28.3%		4,345	22.0%
General, selling and administrative expenses		15,834	17.7%		14,003	20.0%		1,831	13.1%
Operating profit		8,295	9.2%		5,781	8.3%		2,514	43.5%

Our domestic coil tubing and well testing services more than account for the increase in revenues within this segment. Both services have experienced increased revenues due to increased penetration in the oil and gas bearing shale formations in Louisiana and Texas. Our domestic filtration business, on the other hand, has experienced a significant decrease in revenues resulting from decreased customer activity in our more profitable, offshore services due to the lack of drilling permits being granted in the Gulf of Mexico.

Gross profits increased due to the aforementioned increases in sales. Our coil tubing, well testing, and filtration services operations are some of our larger, variable cost structured businesses; thus, the decrease in revenues in our filtration services overshadowed the increased margins in our well testing and coil tubing services, both of which face increased competition as their activities are also more concentrated in onshore activities due to the lack of permitting as discussed above.

SG&A expenses increased due to increased compensation and personnel costs and increased expenses to grow our presence in Texas. The changes in operating profits and related margin followed from the changes in gross profits and gross profit margin.

32

Transportation Segment

Transportation	Six Months Ended June 30,
	2011			2010			2011 vs. 2010
	(Dollars in Thousands)
Net sales	$	27,454	100.0%	$	25,703	100.0%	$	1,751	6.8%
Cost of sales		24,411	88.9%		22,833	88.8%
Gross profit		3,043	11.1%		2,870	11.2%		173	6.0%
General, selling and administrative expenses		1,893	6.9%		1,660	6.5%		233	14.0%
Operating profit		1,150	4.2%		1,210	4.7%		(60)	-5.0%

Fuel surcharges comprised the increase in revenues. However, cost pressures within our logistics services, as opposed to our brokerage services, have increased, leading to a decrease in operating profit.

Corporate Segment

Corporate	Six Months Ended June 30,
	2011		2010		2011 vs. 2010
	(Dollars in Thousands)
Intersegment sales	$	(17,071)	$	(7,306)		(9,765)
Intersegment cost of sales		(16,729)		(7,306)
Gross profit (loss)		(342)		-		(342)
General, selling and administrative expenses		9,775		10,916		(1,141)	-10.5%
Operating loss		(10,117)		(10,916)		799	-7.3%

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. Eliminations of intersegment sales and cost of sales have increased along with increased growth in each segment.

Corporate SG&A expenses decreased due to decreased employee benefit related expenses.

Balance Sheet Review

In the first six months of 2011, our total assets have increased by $39.5 million. We have increased our overall investments in working capital in response to the growth in sales and overall activity that we have experienced. We have also increased our investments in property, plant and equipment, mostly in our Oilfield Services and Minerals and Materials segments to help grow and maintain those businesses. We have funded these investments mostly through increased cash utilization, as evidenced by the decrease in our cash balance from the prior year end, rather than through increased debt levels as has occurred in the past. We believe our future cash needs will be funded through debt rather than continuing to reduce our cash balance.

33

Our other current assets decreased as a $5.0 million loan receivable from our South African partner was exchanged as part of the consideration for our purchase of the noncontrolling interest in our chrome sand operations in South Africa. Our available-for-sale securities reflect our equity ownership in Ashapura Minechem Limited, a company listed on the Bombay stock exchange, the value of which has fluctuated as shares trade on that exchange.

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 our unused and committed credit facility will be adequate to support our current business needs for the foreseeable future. Should the need arise or should we choose to, we may issue additional equity or debt instruments on a publicly traded securities exchange via a shelf registration which became effective with the SEC in January 2010.

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 our Annual Report on Form 10-K filed for 2010. Terms of any new facilities, especially interest rates or covenants, may be significantly different from those we currently have.

Following is a discussion and analysis of our cash flow activities as presented in the Condensed Consolidated Statement of Cash Flows presented within Part 1, Item 1 of this report.

Cash Flows ($ in millions)	Six Months Ended June 30,
	2011			2010
Net cash provided by operating activities	$	13.8		$	6.9
Net cash used in investing activities	$	(24.4	)	$	(26.4	)
Net cash provided by (used in) financing activities	$	0.4		$	9.7

Cash flows from operating activities increased from the prior year period due to the increase in net income and non-cash charges. Historically, working capital levels increase in the early and middle parts of the year and then decrease later in the year in conjunction with the seasonality of our business; we do not see a reason why this trend would not continue.

Capital expenditures for the first six months of 2011 and 2010 were $24.8 million and $25.9 million, respectively. In each of these periods, the expenditures include $2.8 million and $13.4, respectively, of expenditures associated with establishing our South African chrome sand mine and processing facilities. In the six months ended June 30, 2011, the majority of our capital expenditures occurred in our Oilfield Services segment (to increase the size of our equipment fleet) and our Minerals & Materials segment (mostly for maintenance capital to ensure stability as the business experiences growth). We expect our capital expenditure levels in 2011 to exceed the levels experienced in recent

34

years, which, if this were to occur, would imply increased spending in the remaining quarters of 2011 as compared to both the prior year periods as well as the amount spent in the six months ended June 30, 2011.

Our cash inflows from financing activities decreased significantly in the current year’s period as borrowings under our debt facilities decreased. Our non-cash working capital as a percentage of sales has decreased as we have more efficiently employed our working capital to fund growth in our business. We also experienced increased cash proceeds from the exercise of stock compensation awards. Year-to-date dividends were $0.36 per share in both periods.

Financial Position ($ in millions)	As at
	June 30, 2011		December 31, 2010
Non-cash working capital	$	252.5	$	221.8
Goodwill & intangible assets	$	111.0	$	113.5
Total assets	$	838.6	$	799.1
Long-term debt	$	240.5	$	236.2
Other long-term obligations	$	50.3	$	50.0
Total equity	$	414.4	$	400.4

Non-cash working capital at June 30, 2011 increased $30.7 million over the amount at December 31, 2010 due to increased working capital required to support the growth in the business, especially in accounts receivable. Given the seasonality of our environmental and oilfield services segments as well as the project nature of some of our services provided in the Oilfield Services segment, working capital needs are typically greater in the second and third quarters of the year. We see no reason why that pattern would not continue.

Long-term debt increased $4.4 million to $240.5 million since our prior year-end, and we reduced our cash balance by $9.3 million to $17.9 million during that time, mainly to fund our increase in capital expenditures. Long-term debt relative to total capitalization did not change significantly as shown in the chart above. We have approximately $121.0 million of borrowing capacity available from our revolving credit facility as of June 30, 2011. We are in compliance with the financial covenants related to the revolving credit facility as of the period covered by this report.

Since the mid 1980’s, we have been named as one of a number of defendants in product liability lawsuits relating to the minor free-silica content within our bentonite products used in the metalcasting industry. The plaintiffs in these lawsuits are primarily employees of our former and current customers. To date, we have not incurred significant costs in defending these matters. We believe we have adequate insurance coverage and do not believe the litigation will have a material adverse impact on our financial position, liquidity or results of operations.

Contractual Obligations and Off-Balance Sheet Arrangements

Item 7 of our Annual Report on Form 10-K, for the year ended December 31, 2010 discloses our contractual obligations and off-balance sheet arrangements. There were no material changes in our contractual obligations and off-balance sheet arrangements.

35

Item 3: Quantitative and Qualitative Disclosures About Market Risk

There were no material changes in our market risk from the disclosures made in our Annual Report on Form 10-K for the year ended December 31, 2010 other than those discussed in Part 1, Item 2 of this report.

Item 4: Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated 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, they concluded that, as of the end of such period, our disclosure controls and procedures were effective in recording, processing, summarizing, and reporting, on a timely basis, information we are required to disclose in the reports we file or submit under the Exchange Act.

Changes in Internal Control Over Financial Reporting

In the first quarter, we implemented new software to consolidate our financial statements and improve that consolidation process. While there may be risks in implementing any new system, we believe we are maintaining and monitoring appropriate internal controls over our use of this software. There have been no other changes in our internal control over financial reporting during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 5: Other Information

Dodd-Frank Act Disclosure of Mine Safety and Health Administration Safety Data

We have in place health and safety programs that include extensive employee training, accident prevention, workplace inspection, emergency response, accident investigation, regulatory compliance and program auditing. The objectives of our health and safety programs are to eliminate workplace incidents, comply with all mining-related regulations and improve mine safety.

The operation of our domestic mines is subject to regulation by the federal Mine Safety and Health Administration (“MSHA”) under the Federal Mine Safety and Health Act of 1977 (the “Mine Act”). MSHA inspects our mines on a regular basis and issues various citations and orders when it believes a violation has occurred under the Mine Act. We present information below regarding certain mining safety and health citations which MSHA has issued with respect to our mining operations.

36

For the three-month period ended June 30, 2011, none of our mining operations received written notice from MSHA of (i) an order issued under section 104(b) of the Mine Act; (ii) a citation or order for unwarrantable failure to comply with mandatory health or safety standards under section 104 (d) of the Mine Act; (iii) a flagrant violation under section 110(b)(2) of the Mine Act; (iv) an imminent danger order under section 107(a) of the Mine Act; (v) a pattern of violations of mandatory health or safety standards that are of such nature as could have significantly and substantially contributed to the cause and effect of our mine health or safety hazards under section 104(e) of the Mine Act; or (vi) the potential to have such a pattern. For the three-month period ended June 30, 2011, we did not have a fatality.

The table below sets forth by mining complex the total number of citations and/or orders issued during the three-month period ended June 30, 2011 by MSHA to AMCOL and its subsidiaries under the indicated provisions of the Mine Act, together with the total dollar value of proposed MSHA assessments.

Mine	Section 104 (1)	Proposed MSHA Assessments (2)
(Amounts are actual, not thousands)
Gascoyne Mine & Mill	2	$11,480
Belle Fourche Mill	-	1,305
Lovell Mill	-	200
Colony West Mill	-	243
Colony East Mill	-	-
Yellowtail Mine	-	-
Belle Fourche / Colony Mine	-	-
Sandy Ridge Mill	-	-

1. Total number of violations of mandatory health or safety standards that could significantly and substantially contribute to the cause and effect of a mine safety or health hazard under section 104 of the Mine Act for which AMCOL and its subsidiaries received a citation from MSHA

2. Total dollar amount of proposed assessments received from MSHA during the three-month period ended June 30, 2011.

As of June 30, 2011, we have a total of 20 matters pending before the Federal Mine Safety and Health Review Commission. This includes legal actions that were initiated prior to the three-month period ended June 30, 2011 and which do not necessarily relate to the citations, orders or proposed assessments issued by MSHA during such three month period.

In evaluating this information, consideration should be given to factors such as: (i) the number of citations and orders will vary depending on the size of the mine, (ii) the number of citations issued will vary from inspector to inspector and mine to mine, and (iii) citations and orders can be contested and appealed, and in that process, are often reduced in severity and amount, and are sometimes dismissed.

37

Item 6: Exhibits

Exhibit Number
31.1	Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a)
31.2	Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a)
32	Certification of Periodic Financial Report Pursuant to 18 U.S.C. Section 1350
101	The following information from our Quarterly Report on Form 10-Q for the period ended June 30, 2011, formatted in XBRL (eXtensible Business Reporting Language): (i)     Condensed Consolidated Balance Sheets at June 30, 2011, and December 31, 2010, (ii)   Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2011 and 2010, (iii)  Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2011 and 2010, (iv)  Condensed Consolidated Statements of Changes in Equity for six months ended June 30, 2011 and 2010, (v)    Condensed Consolidated Statements of Cash Flows for six months ended June 30, 2011 and 2010, and (vi)  Notes to Condensed Consolidated Financial Statements.

38

SIGNATURES

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

AMCOL INTERNATIONAL CORPORATION

Date:	August 09, 2011	/s/ Ryan F. McKendrick
		Ryan F. McKendrick
		President and Chief Executive Officer

Date:	August 09, 2011	/s/ Donald W. Pearson
		Donald W. Pearson
		Vice President and Chief Financial Officer

39

INDEX TO EXHIBITS

31.1	Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a)
31.2	Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a)
32	Certification of Periodic Financial Report Pursuant to 18 U.S.C. Section 1350
101	The following information from our Quarterly Report on Form 10-Q for the period ended June 30, 2011, formatted in XBRL (eXtensible Business Reporting Language): (i)     Condensed Consolidated Balance Sheets at June 30, 2011, and December 31, 2010, (ii)   Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2011 and 2010, (iii)  Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2011 and 2010, (iv)  Condensed Consolidated Statements of Changes in Equity for six months ended June 30, 2011 and 2010, (v)    Condensed Consolidated Statements of Cash Flows for six months ended June 30, 2011 and 2010, and (vi)  Notes to Condensed Consolidated Financial Statements.

40