UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark one)

x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
	EXCHANGE ACT OF 1934
	For the Fiscal Year Ended December 31, 2011
	Or
¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
	EXCHANGE ACT OF 1934
	For the transition period from                      to
	Commission File Number: 1-14447

AMCOL INTERNATIONAL CORPORATION

(Exact Name of Registrant as Specified in its Charter)

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

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

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

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

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

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

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

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

Yes  x  No  ¨

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

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

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

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

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

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

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

DOCUMENTS INCORPORATED BY REFERENCE

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

PART I

Item 1. Business

INTRODUCTION

AMCOL International Corporation was originally incorporated in South Dakota in 1924, reincorporated in Delaware in 1959, became publicly listed in 1987 on the NASDAQ, and moved to and remains listed on the New York Stock Exchange since 1998. Except as otherwise noted or indicated by context, the term “Company” refers to AMCOL International Corporation and its subsidiaries.

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. 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.

We operate in five segments: minerals and materials, environmental, oilfield services, transportation and corporate. Our minerals and materials segment mines, processes and distributes minerals and products for use in various industrial and consumer markets, including metalcasting, pet care, laundry care, and drilling industries. Additionally, this segment develops and manufactures synthetic materials principally for personal care applications. Our environmental segment manufactures and distributes products and 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 serving our domestic subsidiaries as well as third parties. Our corporate segment includes the elimination of intersegment revenues as well as certain expenses associated with research and development, management, employee benefits and information technology activities for our Company.

A significant portion of our minerals and materials and, to a lesser extent, our environmental segments utilize a mineral called bentonite in their products, and we have bentonite reserves located throughout the world. 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. We also develop applications for other minerals, most significantly chromite; we began acquiring a chromite ore mine in South Africa in 2008 and purchased the remaining interests in this mine in 2011.

We earn revenues from the sales of finished products, provision of services, rental of equipment, and charges for shipping goods and materials to customers. Revenues derived from services are primarily generated in our environmental, oilfield services, and transportation segments, the latter being purely service based.

The following table sets forth the percentage of our revenues generated from each segment for each of our last three fiscal years:

	Percentage of Net Sales
	2011		2010		2009
Minerals and materials		51%		51%		49%
Environmental		26%		26%		29%
Oilfield services		21%		18%		17%
Transportation		6%		6%		7%
Intersegment sales		-4%		-1%		-2%
		100%		100%		100%

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Net revenues, operating profit, assets, depreciation, depletion and amortization, capital expenditures and research and development expenditures attributable to each of our segments are set forth in our Notes to Consolidated Financial Statements included later herein.

MINERALS AND MATERIALS SEGMENT

This segment conducts its business through wholly-owned subsidiaries and investments in affiliates and joint ventures throughout the world. Our principal products are marketed under various internationally registered trade names, including VOLCLAY^®, PANTHER CREEK^®, PREMIUM GEL^®, ADDITROL^®, and Hevi-Sand^®.

Our principal mineral is bentonite. Commercially produced bentonite is a type of montmorillonite clay found in beds ranging in thickness from two to 50 feet beneath overburden of up to 60 feet. There are two basic types of bentonite, sodium bentonite and calcium bentonite, and each has different chemical and physical properties. Sodium bentonite is generally referred to as Western bentonite because it predominately exists in the Western United States, although sodium bentonites of lesser purity do exist outside the United States (“U.S.”). Calcium bentonite is sometimes referred to as Southern bentonite in the U.S. and as Fuller’s Earth outside the U.S. Calcium bentonites mined outside the U.S. are sometimes activated with sodium carbonate or similar compounds to produce properties similar to natural sodium bentonite.

In 2009, we purchased a chromite ore mine in South Africa. Chromite ore is located in seams within certain rock formations that can descend over 100 feet below ground. We are particularly interested in mining chromite ore that has physical properties suited for metalcasting applications.

Principal Products and Markets

Metalcasting. In the formation of sand molds for metalcastings, sand is bonded with minerals and various other additives to yield desired casting form and surface finish. Our products are sold in the foundry and casting industry to help customers reduce waste from metalcasting defects, improve the efficiency and recycling of sand blends in mold sand systems, and improve air quality by reducing volatile organic compound emissions. We employ a consultative sales process to sell custom-blended mineral and non-mineral products to strengthen sand molds for casting auto parts; farm and construction equipment; oil and gas production equipment; power generation turbine castings; and rail car components.

In the ferrous casting market, we specialize in blending bentonite of various grades by themselves or with mineral binders containing sodium bentonite, calcium bentonite, seacoal and other ingredients. We also have a line of formulated additives that introduce silicon and carbon in the melt phase of the casting process.

In the steel alloy casting market, we sell a chromite product with a particle size distribution specific to a customer’s needs. One of chromite’s better qualities is its ability to abstract heat. Thus, we market the product for use in making very large, high integrity, steel alloy castings where the chromite is better suited to withstand the high heat and pressure resulting from the significant amount of alloy poured in the casting. We market our chromite product under the trade name Hevi-Sand^®.

Specialty Materials. Our specialty materials products are sold in markets with generally lower volume applications where our material acts as a performance additive. The following are the major markets for such mineral applications:

• Laundry. We supply high-grade, agglomerated bentonite and other mineral additives used in laundry care products. Bentonite performs as a softening agent in certain powdered-detergent formulations, and it can also act as a carrier for colorants and fragrances. Amongst other things, our laundry care products lower pollution by eliminating phosphates, reduce packaging requirements due to our agglomeration technology which results in a greater density particle, and can lower an end-user’s energy costs in cold wash applications.

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• Personal Care. We manufacture adsorbent polymers and purified grades of bentonite ingredients for sale to manufacturers of personal skin care products. The adsorbent polymers are used to deliver high-value actives in skin-care products. Microsponge^® and Poly-Pore^® are the principal trade names under which these products are sold. Bentonite-based materials act as thickening, suspension and dispersion agent emollients.

• Paper Manufacturing. Bentonite is used to improve processing and waste control in manufacturing a broad range of printable paper surfaces.

Pet Products. We produce and market sodium bentonite-based scoopable (clumping), traditional and alternative cat litters as well as specialty pet products to grocery and drug stores, mass merchandisers, wholesale clubs and pet specialty stores throughout the U.S. Our scoopable products’ clump-forming capability traps urine, thereby reducing the waste of litter by allowing for easy removal of only the odor-producing elements from the litter box. Our products are marketed under various trade names.

Basic Minerals. We supply minerals in industrial applications where they are used as a component of the end product to the consumer. Our markets and applications include:

• Drilling Fluid Additives. Sodium bentonite and leonardite, a form of oxidized lignite which we mine and process in North Dakota, are components of drilling fluids used in oil and gas well drilling. Bentonite imparts thickening and suspension properties, which facilitate the transport of rock cuttings to the surface during the drilling process. Drilling fluids lubricate the drilling bit and coat the underground formations to prevent hole, collapse and drill-bit seizing. Our primary trademark for this application is the trade name PREMIUM GEL^®.

• Other Industrial. We produce bentonite and bentonite blends for the construction industry, which are used as a plasticizing agent in cement, plaster and bricks, and as an emulsifier in asphalt. We also supply grades of bentonite used for pellitizing other materials for ease of use. Examples of this application are the pelletizing of iron ore and livestock feed.

• Ferro Alloys. A by-product of our chromite processing operations for foundry products includes a chromite ore which has physical properties suited for use in producing ferrochrome. The ore generally needs to have a chromite content in excess of 42% to meet metallurgical grade specifications. Manufacturers of stainless steel are the primary users of ferrochrome.

Sales and Distribution

In 2011, the top ten customers of the minerals and materials segment accounted for approximately 31% of this segment’s sales worldwide. Approximately 59% of our sales in this segment are generated in the Americas. Metalcasting is our largest product line in the Americas and all of our pet products sales are in this region as well. Our sales in EMEA (Europe, Middle East and Africa) represent approximately 19% of segment sales and are comprised of our laundry care, basic minerals, and chromite products. The Asia-Pacific region represents approximately 22% of segment sales with metalcasting being our largest product line.

This segment sells minerals and materials not only to third party customers but also to other segments, principally our environmental segment. Bentonite is a key material included within several products in our environmental segment, most notably the lining technology products.

A large majority of our sales and distribution is conducted by our own personnel. We have established industry-specialized sales groups staffed with technically oriented salespersons serving each of our major markets. Certain products have networks of distributors and representatives, including companies that warehouse products at strategic locations.

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We believe our strong, global market position in the metalcasting industry is largely due to our technical service capabilities and our distribution network. We provide training courses and laboratory testing for customers who use our products and blends in the metalcasting process. Our technical sales personnel provide expertise not only to educate our customers on the bentonite blend properties but also to aid them in producing castings efficiently and productively.

In pet products, we are primarily a private-label producer of cat litter. These products are sold solely in the U.S. from three principal sites from which we package and distribute finished goods. Our transportation segment provides logistics services for the cat litter group, and is a key component of our capability in supplying customers on a national basis.

Serving certain specialty material markets requires considerable technical expertise. In laundry care, we not only supply cost-effective products and additives but also provide product development capabilities to adapt to our customers’ product requirements. We experience similar requirements for our personal care business, which makes use of several patents with various durations.

In drilling fluid additives, we market products, including bentonite, under our own and private-label trade names. At least two drilling fluid service competitors have captive bentonite operations while others are party to long-term bentonite supply agreements. The potential customers for our products, therefore, are generally limited to those service organizations that neither are vertically integrated nor have long-term supply arrangements with other bentonite producers.

Competition

We are one of the largest producers of bentonite products globally. There is substantial domestic and international competition, which is essentially a matter of product quality, price, logistics, service and technical support. There are several producers of sodium bentonite or sodium activated calcium bentonite throughout the world, some of which import into the U.S. market. There are also numerous major producers of calcium bentonite and various regional suppliers in the areas we serve. Some of our competitors, especially in the chromite market, are companies primarily in other lines of business with substantially greater financial resources than ours.

Seasonality

We do not consider our minerals and materials segment to be seasonal in nature.

ENVIRONMENTAL SEGMENT

Principal Products and Markets

The business is principally conducted through wholly-owned subsidiaries and joint ventures throughout the world. Many of these companies utilize our CETCO^® brand name. Our five principal markets are as follows:

Lining Technologies. We sell a variety of lining and other products to landfill, mining, and other construction markets for a variety of applications, most of which are directed to preserving or remediating environmental issues.

• Lining Technologies. We help customers protect ground water and soil through the sale of geosynthetic clay liner products containing bentonite. We market these products under the BENTOMAT^® and CLAYMAX^® trade names principally for lining and capping landfills, mine waste disposal sites, water and wastewater lagoons, secondary containments in tank farms, and other contaminated sites. We also provide associated geosynthetic materials for these applications, including geotextiles and drainage geocomposites.

• Remediation Technologies. In remediation technologies, we provide engineered solutions for challenging environmental site-remediation projects, usually with the goal of redeveloping contaminated industrial sites.

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Such projects often involve contaminated sediment and soil capping, waste solidification and stabilization, water treatment, sludge dewatering, hazardous waste clean-up and engineered remedial barriers. Products offered include Liquid Boot^®, a liquid applied vapor barrier system; REACTIVE CORE-MAT™, an in-situ sediment capping material; ORGANOCLAY^®, which absorbs organic containments; and QUIK-SOLID^®, a super absorbent media.

Building Materials. We supply many roofing and waterproofing materials to the non-residential construction industry. This group’s products include VOLTEX^®, a waterproofing composite comprised of two polypropylene geotextiles filled with sodium bentonite; ULTRASEAL^®, an advanced membrane using a unique active polymer core; and COREFLEX^®, featuring heat-welded seams for protection of critical infrastructure. In addition to these membrane materials, we also provide roofing products and a variety of sealants and other accessories required to create a functional waterproofing system.

Contracting Services. Our contracting services group provides geo-environmental solutions for a variety of construction projects but is focused on installation of our own products in construction sites. This group is largely domiciled in Europe as, in 2011, we sold our domestic operations. This group operates in the commercial and environmental construction industries utilizing our own and third-party products.

Drilling. Our drilling products are used in environmental and geotechnical drilling applications, horizontal directional drilling, mineral exploration and foundation construction. The products are used to install monitoring wells, facilitate horizontal and water well drilling, and seal abandoned exploration drill holes. VOLCLAY GROUT™, HYDRAUL-EZ^®, BENTOGROUT^® and VOLCLAY TABLETS™ are among the trade names for products used in these applications. Ground source heat loop systems utilizing GEOTHERMAL GROUT™ represent a developing area for drilling products. We also offer a range of drilling products used in the excavation of foundations for large buildings, bridges and dams; these products include SHORE PAC^® and PREMIUM GEL^®.

Sales and Distribution

On an individual customer basis, we generated less than $5 million of sales from each of the top five customers in the environmental segment. Approximately 45% of sales are in the Americas where the U.S. is our largest geographical market for all product lines. Approximately 49% of sales are in EMEA and the remaining 6% in the Asia-Pacific region.

Sales and distribution of the lining technologies products and our contracting services are primarily performed through our own personnel and facilities. Service revenues from our contracting services are primarily generated under medium to short-term contracts. For both groups, our staff includes sales professionals and technical support engineers who analyze the suitability of our products in relation to the customer’s specific application and the conditions that products will endure or the environment in which they will operate.

The building materials products are sold through our own sales professionals as well as through an integrated distributor and dealer network. The end-users of our products are generally building sub-contractors who are responsible for installing the products. These products have with a longer term warranty in instances where we can control or monitor the installation of the final product on the job site.

Our drilling product lines are generally sold through an extensive distribution network coordinated by our regional sales managers. The end customers for these products are typically small well drilling companies and general contractors.

Our remediation technologies products are primarily sold through approved contractors who are environmental project specialists. Our sales and technical staff typically assist project designers by providing technical data to engineers and architects who specify our products in the design of building structures or remediation sites.

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Competition

Our lining technologies group competes with geosynthetic clay liner manufacturers worldwide, several suppliers of alternative lining technologies, and providers of soil and environmental remediation solutions and products. The building materials product lines compete in a highly fragmented market comprised of a wide variety of alternative technologies. Competitors in our contracting services primarily include other specialty and general contractors, some of which have substantially greater resources. A number of integrated bentonite companies compete against us in the drilling products market. Competition in all product lines is based on product quality, service, price, technical support and product availability.

Seasonality

Most of the products in the environmental segment are impacted by weather and soil conditions. Many of the products cannot be applied in wet or winter weather conditions and, as such, sales and profits tend to be larger during the period from April through October. As a result, we consider the business of this segment to be seasonal.

OILFIELD SERVICES SEGMENT

Principal Services and Markets

Our oilfield services segment provides both onshore and offshore water treatment, well testing, pipeline separation, nitrogen, coil tubing and other services to the oil and natural gas industry. We sell products and services through subsidiaries located in Australia, Brazil, Malaysia, Nigeria, the United Kingdom, and the U.S., principally in the Gulf of Mexico and surrounding on-shore area. The following are the principal services we provide:

Water Treatment.     We help customers protect the environment, especially marine environments, and comply with regulatory requirements by providing equipment, technologies, personnel and filtration media to help them discharge waste water generated during oil production.

Well Testing.    We provide equipment and personnel to help customers control well production as well as to clean up, unload, separate, measure component flow, and dispose of fluids from oil and gas wells.

Pipeline.     Our personnel utilize engineered equipment that separates, filters, cleans and allows treatment of effluents arising from pipeline testing and maintenance activities.

Nitrogen Services.    Liquid nitrogen is commonly used in the pipeline, refinery, and oil and natural gas business. By providing liquid nitrogen that is then changed into nitrogen gas with our personnel and mobile equipment, we help customers perform maintenance activities in a safe environment on their production platforms, pipeline operations, and refineries. Acquired in 2008, these services are provided in jetting wells that are loaded with fluid; stimulating wells, including fracturizing and acidizing; displacing completion fluids prior to perforating; airing up cans for offshore floating installations; and pressure testing and other maintenance activities.

Coil Tubing.    Acquired in 2008, our coil tubing services utilize a long, continuous length of pipe which is wound on a spool or reel. We rent the coil tubing and provide operating personnel to pump fluids through the tubing into boreholes or to assist in certain well-drilling applications. Before being pushed into a well head, the pipe is straightened, then pumped with fluid. When finished, it is finally rewound or coiled back onto the reel housed on our transport units. Our coil tubing services are typically provided in areas of nitrogen displacement, acidizing, cleanouts, and other workovers and provide a benefit over traditional well intervention methods as fluids can be pumped at any time regardless of the position and direction of travel.

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Competition

Our oilfield services group competes with other oil services companies. Several of these competitors have significantly more resources than we do and consequently may be better able to compete in periods of economic downturn, especially in terms of selling prices. However, we believe we offer several competitive advantages, especially in the area of water treatment services, due to superior and innovative technologies that we have developed internally and the combination of services that we can provide.

Sales and Distribution

The top ten customers in our oilfield services segment accounted for 47% of the segment sales worldwide. However, the composition of customers within this group varies from year to year and is significantly dependent on the type of activities each customer is undertaking within the year, regulations, and overall dynamics of the oil and gas industry. Approximately 88% of sales are in the Americas. Our largest geographical market is the U.S., and more specifically the Gulf of Mexico region. Approximately 8% of sales are in the Asia-Pacific region and 4% are in EMEA.

Employees in this segment primarily sell and distribute products and services on a direct basis. Our principal customers are oil and natural gas companies who maintain substantial offshore and onshore drilling and production platforms for both oil and gas.

Seasonality

Much of the business in the oilfield services segment is impacted by weather conditions. Our business is concentrated in the Gulf of Mexico and surrounding states where our customers’ oil and gas production facilities are subject to natural disasters, such as hurricanes. Given this, our sales could be lower in the June to November months. It can also experience periods of growth after a hurricane as customers require our services to start their operations back up.

TRANSPORTATION SEGMENT

We operate a long-haul trucking business and a freight brokerage business primarily for delivery of finished products throughout the continental U.S. These services are provided to our subsidiaries as well as third-party customers. Through our transportation business, we are better able to control costs, maintain delivery schedules and assure equipment availability in the delivery of our products. In 2011, approximately 48% of the revenues of this operation involved services provided to our domestic minerals and materials and environmental segments.

MINERAL RESERVES AND MINING

Mineral Reserves

We have reserves of sodium and calcium bentonite at various locations in the U.S., including Wyoming, South Dakota, Montana and Alabama, as well as in Australia, China, and Turkey. Through our investments in affiliates and joint ventures, we also have access to bentonite deposits in Egypt, India, and Mexico. At 2011 consumption rates and product mix, we have proven, assigned reserves of commercially usable sodium bentonite for the next 31 years. We have proven, assigned reserves of commercially usable calcium bentonite for the next 12 years. While we believe that our reserve estimates are reasonable and our title and mining rights to our reserves are valid, we have not obtained any independent verification of such reserve estimates or such title or mining rights.

We own or control the properties on which reserves are located through long-term leases, royalty agreements and patented and unpatented mining claims. A majority of our bentonite reserves are owned. No single or group of mining claims or leases is significant or material to the financial condition or operations of our Company or our segments. However, our mineral rights associated with our chrome business in South Africa are significant in that they comprise 86% of the total value of our mineral rights as recorded in our Consolidated Balance Sheet at December 31, 2011.

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A majority of our current bentonite mining activities in the U.S. do not occur on reserves we own. Rather, the majority of our current bentonite mining in the U.S. occurs on reserves comprised of over eighty mining lease and royalty agreements (including easement and right of way agreements) and 2,000 mining claims. The majority of these are with private parties and located in Montana, South Dakota and Wyoming. The bentonite deposits underlying these claims and leases generally lie in parcels of land varying between 20 and 40 acres.

In general, our bentonite-reserves are immediately adjacent to, or within sixty miles of, one of seven related processing plants. All of the properties on which our reserves are located are either physically accessible for the purposes of mining and hauling or the cost of obtaining physical access would not be material. Access to processing facilities from the mining areas is generally by private road, public highways, or railroads. For each leased property and mining claim, there are multiple means of access.

To retain possessory rights in unpatented mining claims in North America, a fee of $140 per year for each unpatented mining claim is required. The validity of title to unpatented mining claims is dependent upon numerous factual matters. We believe that the unpatented mining claims that we own are in compliance with all applicable federal, state and local mining laws, rules and regulations. We are not aware of any material conflicts with other parties concerning our claims. From time to time, members of Congress and members of the executive branch of the federal government have proposed amendments to existing federal mining laws. The various amendments would have had a prospective effect on mining operations on federal lands and include, among other things, the imposition of royalty fees on the mining of unpatented claims, the elimination or restructuring of the patent system and an increase in fees for the maintenance of unpatented claims. To the extent that future proposals may result in the imposition of royalty fees on unpatented lands, the mining of our unpatented claims may become uneconomic and royalty rates for privately leased lands may be affected. We cannot predict the effect any potential amendments may have or whether or when any such amendments might be adopted.

We maintain a continuous program of worldwide exploration for additional reserves and attempt to acquire reserves sufficient to replenish our consumption each year, but we cannot assure that additional reserves will continue to become available.

We oversee all of our mining operations, including our exploration activity and securing the necessary permits from appropriate government agencies.

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The following table shows a summary of our mineral sales from active mining areas for the last 3 years in short tons, as well as mineral reserves by major mineral category.

	Tons Sold (000s)						Wet Tons of Reserves (000s)		Assigned Reserves (000s)		Unassigned Reserves (000s)		Conversion Factor		Mining Claims
	2011		2010		2009										Owned		Unpatented **		Leased
Sodium Bentonite
Assigned
Australia		13		9		9		1,508		1,508		—		80%		—		—		1,508
Belle/Colony, WY/SD		1,125		1,121		1,012		35,709		35,709		—		77%		1,029		904		33,776
Lovell, WY		598		605		372		29,761		29,761		—		86%		15,038		12,018		2,705
TOTAL ASSIGNED		1,736		1,735		1,393		66,978		66,978		—				16,067		12,922		37,989
Unassigned
SD, WY, MT		-		-		-		60,786		-		60,786		82%		55,189		3,857		1,740
TOTAL UNASSIGNED		-		-		-		60,786		-		60,786				55,189		3,857		1,740
TOTAL SODIUM BENTONITE		1,736		1,735		1,393		127,764		66,978		60,786				71,256		16,779		39,729
										52%		48%				56%		13%		31%
Calcium Bentonite
Assigned
Chao Yang, Liaoning, China		351		261		177		1,506		1,506		-		76%		-		-		1,506
Nevada		2		2		1		35		35		-		76%		35		-		-
Sandy Ridge, AL		91		89		66		5,991		5,991		-		76%		1,707		-		4,284
Turkey		140		134		86		1,397		1,397		-		77%		-		-		1,397
Vici, OK		-		-		-		-		-		-		76%		-		-		-
TOTAL ASSIGNED		584		486		330		8,929		8,929		-				1,742		-		7,187
Unassigned
Nevada, Vici, OK		-		-		-		599		-		599		76%		-		500		99
TOTAL UNASSIGNED		-		-		-		599		-		599				-		500		99
TOTAL CALCIUM BENTONITE		584		486		330		9,528		8,929		599				1,742		500		7,286
										94%		6%				18%		5%		76%
Leonardite
Gascoyne, ND		52		52		35		809		809		-		73%		-		-		809
										100%										100%
Other
Assigned
South Africa		121		122		60		1,352		1,352		-		75%		1,352		-		-
TOTAL ASSIGNED		121		122		60		1,352		1,352		-				1,352		-		-
Unassigned
Nevada		-		-		-		2,997		-		2,997		80%				-		2,997
TOTAL UNASSIGNED		-		-		-		2,997		-		2,997				-		-		2,997
TOTAL OTHER		121		122		60		4,349		1,352		2,997				1,352		-		2,997
										31%		69%				31%		0%		69%
GRAND TOTALS		2,493		2,395		1,818		142,450		78,068		64,382				74,350		17,279		50,821
										55%		45%				52%		12%		36%

** Quantity of reserves that would be owned if patent was granted.

Assigned reserves are reserves which could be reasonably expected to be processed in existing plants. Unassigned reserves are reserves which will require additional expenditures for processing facilities. Conversion factor is the percentage of reserves that will be available for sale after processing. Our estimates of assigned and unassigned reserves in the above table require us to make certain key assumptions. These assumptions relate to consistency of clay beds in relation to drilling samples obtained with respect to both quantity and quality of reserves contained therein; the ratio of overburden to mineral deposits; any environmental or social impact of mining the minerals; and profitability of extracting those minerals, including haul distance to processing plants, applicability of minerals to various end markets and selling prices within those markets, and our past experiences in the mineral beds, several of which we have been operating in for over 80 years. We estimate that available supplies of other materials utilized in our minerals and materials business are sufficient to meet our production requirements for the foreseeable future.

10

Mining and Processing

Bentonite is surface mined, generally with large earthmoving scrapers, and then loaded into trucks and off-highway-haul wagons for movement to processing plants. The mining and hauling of our clay is done by us and by independent contractors.

At the processing plants, bentonite is dried, crushed and sent through grinding mills, where it is sized to customer requirements, then chemically modified where needed and transferred to silos for automatic bagging or bulk shipment. Most of the production is shipped as processed rather than stored for inventory.

Chromite is mined from open cast pits from our property in South Africa and transported to our nearby processing facility. In our facility, the ore is further crushed, milled, washed, and separated from impurities. We are operationalizing our production facility to give it the ability to manufacture a range of precisely specified materials, such as ones with specific particle sizes, that provide value to our customer’s operations and efficiency.

CROSS SEGMENT FUNCTIONS

Product Development and Patents

We work actively with customers in each of our major markets to develop and commercialize new products and applications of existing products to solve customer problems. We maintain research centers and laboratory testing facilities in Hoffman Estates, Illinois; Birkenhead, England; and Tianjin, China. When we perceive a need for a product that will accomplish a particular goal, we work to develop the product, research its marketability and study the feasibility of its production. We also co-develop products with customers, or others, as needs arise. Our development efforts emphasize markets with which we are familiar and products for which we believe there is a viable market.

We hold a number of U.S. and international patents. We follow the practice of obtaining patents on new developments whenever feasible. However, we do not consider that any one or any combination of such patents is material to our business as a whole.

Research and Development

Our business segments share research and laboratory facilities, and technological developments are shared among our subsidiaries, subject to license agreements where appropriate. Further information on research and development activities is included in our Notes to Consolidated Financial Statements contained in Item 8 of this report.

Regulation and Environmental

We believe we are in material compliance with current, applicable mining regulations. Since reclamation of exhausted mining sites has been a regular part of our surface mining operations since 1973, maintaining compliance with current regulations has not had a material effect on mining costs. Reclamation costs are reflected in the cost of the bentonite sold.

The grinding and handling of dried clay is part of the production process, and, because these processes generate dust, our mineral processing plants are subject to applicable clean air standards (including Title V of the Clean Air Act). All of our plants are equipped with dust collection systems. We have not had, and do not presently anticipate, any significant regulatory problems in connection with our dust emission, though we expect ongoing expenditures for the maintenance of our dust collection systems and required annual fees.

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Our operations are also subject to other federal, state, local and foreign laws and regulations relating to the environment and to health and safety matters. Certain of these laws and regulations provide for the imposition of substantial penalties for noncompliance. While the costs of compliance with, and penalties imposed under, these laws and regulations have historically not had a material adverse effect on us, future events, such as changes in or modified interpretations of existing laws and regulations, enforcement policies, or further investigation or evaluation of potential health hazards of certain products, may give rise to additional compliance and other costs that could have a material adverse effect on us.

FOREIGN OPERATIONS AND EXPORT SALES

Approximately 38% of our 2011 net sales were generated in countries outside the Americas. Our foreign operations have typically comprised about a third of our income from continuing operations before income taxes, income from affiliates and joint-ventures, and non-controlling interest. However, in 2009, they comprised approximately 58% of that income as the economic recession more heavily affected our domestic operations than our foreign operations. Of our tons sold from our domestic mineral deposits in 2011, approximately 28% of these shipments were made to our sister companies and third party customers located outside the United States as compared to 21% and 17% in 2009 and 2010, respectively.

To enhance our overseas market presence, we maintain mineral processing plants in the United Kingdom, China, Australia, South Korea, Poland, Thailand, South Africa and Turkey. Chartered vessels deliver large quantities of our bulk, dried U.S. sodium bentonite to the plants outside the U.S. where it is processed and mixed with other clays and distributed throughout EMEA and the Asia-Pacific region. In addition, we maintain a worldwide network of independent dealers, distributors and representatives to support sales and distribution.

We manufacture geosynthetic clay liners in the United Kingdom, Spain, Poland, China, South Korea and India. These international operations provide a cost-effective means of supplying the EMEA and Asia-Pacific markets.

Our oilfield services segment maintains offices and operations centers in Australia, Brazil, Malaysia, Nigeria and Scotland to service customers in those local markets.

Our international operations are subject to the usual risks of doing business abroad and in developing countries, such as currency fluctuations and devaluation, restrictions on the transfer of funds, and import and export duties.

The Notes to Consolidated Financial Statements included in Item 8 of this report present further details on our sales by geographic region. These Notes are incorporated by reference for sales attributed to foreign operations and export sales from the U.S.

EMPLOYEES

As of December 31, 2011, we employed 2,563 people in our global organization, 1,283 of whom were employed outside of the United States. Operating plants are adequately staffed, and no significant labor shortages are presently foreseen. Labor relations have been satisfactory.

AVAILABLE INFORMATION

We file annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy any reports, statements and other information filed by the Company at the SEC’s Public Reference Room at 100 F. Street N.E., Washington, D.C., 20549. Please call (800) SEC-0330 for further information on the Public Reference Room. The SEC maintains a website that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. Our filings are available to the public at this website, www.sec.gov.

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Our principal Internet address is www.amcol.com. Our annual, quarterly and current reports, and amendments to those reports, are available free of charge on www.amcol.com, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

Item 1A. Risk Factors

Certain statements we make from time to time, including statements in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section hereafter, constitute “forward-looking statements” made in reliance upon the safe harbor contained in Section 21 E 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, acquisitions, levels of capital expenditures, future dividends, expansion into global markets and the development of new products. Such forward-looking statements speak only as of the date hereof and 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. We undertake no duty to update any forward-looking statements to conform the statements to actual results or changes in our expectations.

A number of risks will challenge us in meeting our long-term profit and strategic objectives, and there can be no assurance that we will achieve success in implementing any one or more of them. Specifically, the risks outlined below could affect the achievement of our expected results. In addition, political, economic, or credit crises occur from time to time in our geographic markets, and these crises could affect or heighten the risks outlined below, especially with regard to our reliance on key industries, the volatility of our stock price, and increased exchange rate sensitivity. The credit crisis may also affect our ability to obtain capital or finance acquisitions or other activities on terms substantially similar to our current debt facilities should that need arise in the future. Any of these factors or the risks outlined below could affect our business opportunities and results:

Reliance on Metalcasting & Construction Markets

Approximately 53% of our minerals and materials segment’s sales in 2011 were to the metalcasting market. Our environmental segment’s sales are predominantly derived from the commercial construction and infrastructure markets. All of these markets depend heavily upon the strength of the domestic and international economies. If these economies weaken, demand for our products sold to these markets may decline and our business or future financial results may be adversely affected.

Susceptibility to Oil and Natural Gas Markets

Revenues from our oilfield services segment in 2011 represent 21% of consolidated revenues and 23% of consolidated operating income. Oil and natural gas production activities are heavily influenced by the benchmark price of these commodities, which can be influenced by both economic and political events and, in turn, affect our customers’ demand for our products and services. Thus, the benchmark prices of oil and natural gas may ultimately affect the performance of this segment.

In addition, oil and natural gas exploration and production activities depend heavily on the location of these natural resources within the earth’s geology and geographic location as well as technologies available to profitably extract them. For example, the recent application of horizontal drilling technologies allow oil and natural gas production companies to extract significantly greater amounts of oil and natural gas in geological deposits located in areas where we currently do not have a significant presence. Thus, the performance of our oilfield services segment is affected by changes in technologies, locations of customers’ targeted reserves, and competition in various geographic markets.

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Sensitivity to Energy and Petroleum Related Products

We purchase a significant amount of raw materials which are derived from petrochemical products. Our production processes also consume a significant amount of energy, primarily electricity, diesel fuel, natural gas and coal. We use diesel fuel to operate our mining and processing equipment and our freight costs are heavily dependent upon fuel prices and surcharges.

On a combined basis, these factors represent a large exposure to petrochemical and energy products which may be subject to significant price fluctuations. While we have been successful in attaining price increases in certain markets to offset some of these rising costs, there can be no assurance that we will be successful in continuing to achieve these price increases or protecting our margins.

Availability and Cost of Shipping

We rely on shipping bulk cargos of bentonite from the United States and China to customers, as well as our own subsidiaries, and we are sensitive to our ability to recover these shipping costs. In the last few years, bulk cargo shipping rates have been very volatile, and, to a lesser extent, the availability of bulk cargo containers has been suspect. If we can not secure our container requirements or offset additional shipping costs with price increases to customers, our profitability could be impacted.

Seasonality of Our Oilfield Services and Environmental Segments

Our oilfield services and environmental segments are affected by seasonal weather patterns. A majority of our oilfield services revenues are derived from the Gulf of Mexico and surrounding states, which are susceptible to hurricanes that typically occur in the Fall months. In addition, it is affected by customers’ demands for natural gas. Natural gas is affected by weather patterns as colder winters increase the demand for natural gas to heat homes and warmer summers increase the demand for natural gas to fuel generators providing electricity to run air conditioners. Actual or threatened hurricanes or changes in the demand for natural gas can result in volatile demand for services provided by our oilfield services segment.

Our environmental segment is affected by weather patterns which determine the feasibility of construction activities. Typically, less construction activity occurs in winter months and thus this segment’s revenues tend to be greatest in the second and third quarters when weather patterns in our geographic markets are more conducive to construction activities.

Cyclicality of Our Segments

All of our segments are affected by economic cycles. During periods of economic slowdown, our customers often reduce their capital expenditures and defer or cancel pending projects. Such developments occur even amongst customers that are not experiencing financial difficulties. These risks are more predominant in our environmental and minerals and materials segments.

In our environmental segment, the construction and infrastructure markets are heavily dependent upon the strength of domestic and international economies. In our minerals and materials segment, the metalcasting market is dependent upon the demand for castings for automobile components, farm and construction equipment, oil and gas production equipment, power generation turbine castings, and rail car components. Many of these types of equipment are sensitive to fluctuations in demand during periods of recession or tough economies, which ultimately may affect the demand for our environmental and minerals and materials segments’ products and services.

Moreover, in periods of lower economic productivity or recession, oil and natural gas prices tend to decrease, which in turn causes exploration companies to reduce their capital expenditures and production and exploration activities. This has the effect of decreasing the demand and increasing competition for the services that our oilfield services segment provides.

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Risks of International Expansion & Operation

An important part of our business strategy is to expand internationally by establishing our own presence in new markets when possible or through acquisitions, joint ventures or other strategic alliances. Sales and earnings from our overseas operations have increased considerably in recent years and comprise a significant portion of our financial results, including our joint ventures. As we expand and operate internationally, we will be subject to a myriad of risks, especially in less developed countries whose economies increase at rates faster than more developed nations. These risks relate to currency exchange rates, political and economic environments, business and trade laws, and regulatory and compliance issues. These risks are beyond our control and can lead to sudden, and potentially prolonged, changes in demand for our products, difficulty in enforcing agreements, losses in the realizability of our assets, or fluctuations in our earnings due to the impact from our joint ventures.

Regulatory and Legal Matters

Our operations are subject to various federal, state, local and foreign laws and regulations relating to environmental and to health and safety matters. Substantial penalties may be imposed if we violate certain of these laws and regulations, even if the violation was inadvertent or unintentional. If these laws or regulations are changed or interpreted differently in the future, it may become more difficult or expensive for us to comply. In addition, investigations or evaluations of our products by government agencies may require us to adopt additional safety measures or precautions. If our costs to comply with such laws and regulations in the future materially increase, our business and future financial results could be materially and adversely affected. We may also be subject to adverse litigation results in addition to increased compliance costs arising from future changes in laws and regulations that may negatively impact our operations and profits. Last, certain of our customers are subject to various federal and foreign laws and regulations relating to environmental and health and safety matters, especially our oilfield customers who are subject to drilling permits, wastewater disposal and other regulations. To the extent that these laws and regulations affecting our customers change, demand for our products and services could also change and thereby affect our financial results.

Ability to Complete, Integrate & Finance Acquisitions

Our business strategy includes pursuing acquisitions of complementary businesses, through either our own wholly-owned subsidiaries or our investments in affiliates and joint ventures. The success of any future acquisitions or investments will be dependent upon our ability to locate attractive businesses at a reasonable attractive price and our ability to successfully integrate them into our existing operations.

In addition, we have typically financed our acquisitions and investments with debt available to us under our various credit facilities and our ability to issue new debt. However, we may decide to pay all or a portion of the purchase price of any future acquisition or investment with shares of our common stock. If we use our common stock in this way, the price of our stock may decrease.

Ability to Pay Dividends

We currently declare and pay regular cash dividends on our common stock. Any future payment of cash dividends will depend upon our financial condition, earnings, legal requirements, restrictions in our debt agreements and other factors deemed relevant by our board of directors. Our board of directors may decrease or discontinue payment of dividends at any time.

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Impact of Competition

Our businesses have many competitors, some of whom are larger and have more resources than we do. We also face competition for some of our products from alternative products, and some of the competition we face comes from competitors in lower-cost production countries like China and India. Many factors could change the level of competition we face in our markets, which could result in decreased demand for our products and services and negatively affect our financial performance.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

We operate the following principal plants, mines and other facilities, all of which are owned, except as noted below. We also have numerous other facilities which blend ADDITROL ^®, package cat litter and chromite sand, warehouse products and serve as sales offices.

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LOCATION	PRINCIPAL FUNCTION
MINERALS AND MATERIALS
Colony, WY (two plants)	Mine and manufacture sodium bentonite, package cat litter
Lovell, WY (1)	Mine and manufacture sodium bentonite
Sandy Ridge, AL	Mine and manufacture calcium bentonite; blend ADDITROL®
Chao Yang, Liaoning, China	Mine and manufacture calcium bentonite
Enez, Turkey	Mine and manufacture calcium bentonite
Laemchabang, Thailand	Manufacture sodium and calcium bentonite and laundry care products
Ruighoek Farm, Northwest Province, South Africa	Mine and manufacture chromite ore
Yangbuk-Myeun, Kyeung-buk, South Korea	Manufacture metalcasting products
Tianjin, China	Manufacture metalcasting and laundry care products
Winsford, Cheshire, U.K.	Manufacture bentonite, other minerals, and laundry care products
ENVIRONMENTAL
Cartersville, GA	Manufacture components for geosynthetic clay liners; manufacture Bentomat® and Claymax® geosynthetic clay liners; manufactures other building materials products
Lovell, WY (1)	Manufacture Bentomat® and Claymax® geosynthetic clay liners and other building materials products
Birkenhead, Merseyside, U.K. (1)(2)	Manufacture Bentomat® geosynthetic clay liner; research laboratory; headquarters for CETCO (Europe) Ltd.
Segovia, Spain	Manufacture Bentomat® geosynthetic clay liners
Suzhou, China	Center for China operations; manufactures lining and waterproofing products for China and greater Asian markets
Szczytno, Poland	Manufacture Bentomat® and Claymax® geosynthetic clay liners
OILFIELD SERVICES
Beckville, TX (2)	Well testing services
Broussard, LA (2)	Central operations and distribution
Covington, LA (2)	Headquarters
Driscoll, TX (2)	Coil tubing services
Harvey, LA (2)	Nitrogen sales and service
Kenamen, Malaysia (2)	Filtration services and sales
New Iberia, LA (2)	Coil tubing services
Springtown, TX (2)	Well testing services
TRANSPORTATION
Scottsbluff, NE	Transportation headquarters and terminal
CORPORATE
Hoffman Estates, IL (2)	Corporate headquarters; Environmental headquarters; Minerals & Materials headquarters; research laboratory

⁽¹⁾  Shared facilities between minerals and materials and environmental segments.

⁽²⁾  Certain offices and facilities are leased.

We consider our plants in the Western U.S. to be of strategic importance given their production capacity, products manufactured, and proximity to our mineral reserves. All of our pet products are manufactured either in our Lovell, WY plant or one of our Colony, WY plants given their granularization capabilities and the fact that their location provides freight cost savings to key customers. Our Sandy Ridge, AL facility supplies calcium bentonite to our U.S. blending plants as an ingredient for production of ADDITROL^®. The blending plants have collective importance since they produce customized products for metalcasting customers.

Item 3. Legal Proceedings

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

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Since the mid-1980’s, we and/or our subsidiaries have been named as one of a number of defendants in product liability lawsuits relating to the minor free-silica content of our bentonite products used in the metalcasting industry. The plaintiffs in these lawsuits are primarily employees of our foundry customers.

To date, we have not incurred significant costs in defending these matters. We believe we have adequate insurance coverage and do not believe the litigations will have a material adverse impact on our financial condition, liquidity or results of our operations.

We have neither been nor expect to be assessed any tax shelter penalties by the United States Internal Revenue Service for tax shelter transactions that either the IRS deems abusive or have significant tax avoidance penalties.

Item 4. Mine Safety Disclosures

The information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95.1 to this Form 10-K.

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Executive Officers of Registrant

NAME	AGE		PRINCIPAL OCCUPATION FOR LAST FIVE YEARS
James W. Ashley		62	Vice President and General Counsel of the company since January 2012; prior thereto, Partner at Locke Lord LLP since 2008; prior thereto, Partner at Lord Bissell & Brook LLP.
Patrick E. Carpenter		49	Vice President of the company and President of the environmental segment since January 2012; prior thereto, Vice President of Business Development of Colloid Environmental Technologies Company from January 2010 through December 2011, and its Vice President of Construction Materials from January 2007 through December 2009.
Gary L. Castagna		50	Senior Vice President of the company and President of our minerals and materials segment since May 2008; prior thereto, Senior Vice President, Chief Financial Officer and Treasurer of the company since February 2001; prior thereto, a consultant to AMCOL since June 2000; prior thereto, Vice President of the company and President of Chemdal International Corporation (this business is a former subsidiary of AMCOL, and consisted of the absorbent polymers business that was sold to BASF AG in June 2000) since August 1997; since January 2000, Director of M~Wave Incorporated, a manufacturer and distributor of printed circuit boards.
Michael R. Johnson		53	Vice President of the company since January 2010; President of the oilfield services segment since 2003; prior thereto, Vice President of CETCO Oilfield Services since 2000.
Ryan F. McKendrick		60	Chief Executive Officer of the company since January 1, 2011; prior thereto, Chief Operating Officer of the company since January 1, 2010; prior thereto, Senior Vice President of the company and President of our environmental segment since November 1998; and President of Volclay International Corporation since 2002.
Donald W. Pearson		50	Vice President, Chief Financial Officer and Treasurer of the company since May 2008; prior thereto, Vice President Finance, UPM - Kymmene Corporation North America (a manufacturer of magazine paper), May 2006 through May 2008; Financial Controller UPM - Kymmene Corporation North America, February 2004 through May 2006; prior thereto, Senior Vice President, Business Planning, Information Resources, Inc. (an information services provider), August 2000 through February 2004.
Robert J. Trauger		49	Vice President of Colloid Environmental Technologies Company since January 2012; prior thereto, Vice President of the company and President of our environmental segment since January 2010; prior thereto, Vice President of Operations and International Development for our environmental segment since 2004. Mr. Trauger ceased being an executive officer effective January 2012.

All executive officers of the Company are elected annually by the Board of Directors for a term expiring at the annual meeting of directors following their election or when their respective successors are elected and shall have qualified.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Our common stock trades on the New York Stock Exchange under the symbol “ACO.” The following table sets forth, for the periods indicated, the high and low sale prices of the common stock, as reported by the New York Stock Exchange, and cash dividends declared per share.

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		Stock Price				Cash Dividends
		High		Low		Declared Per Share
	1st Quarter		$        36.00		$        28.92		$            0.18
Fiscal Year Ended December 31, 2011:	2nd Quarter		38.62		32.45		0.18
	3rd Quarter		39.85		23.37		0.18
	4th Quarter		35.09		21.60		0.18
	1st Quarter		$        30.50		$        23.22		$            0.18
Fiscal Year Ended December 31, 2010:	2nd Quarter		32.60		23.45		0.18
	3rd Quarter		31.15		22.12		0.18
	4th Quarter		31.57		25.63		0.18

We have paid cash dividends every year since 1938. As of February 15, 2012, there were approximately 9,979 holders of record of the common stock, including shares held in street name.

Purchases of Equity Securities

We did not repurchase any of our outstanding common stock in 2011.

Equity Compensation Plan Information

The following table summarizes information about our equity compensation plans as of December 31, 2011. All outstanding awards relate to our common stock. Shares issued under all of the following plans may be from the Company’s treasury, newly issued or both.

Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and rights	Number of securities remaining  available for future issuance under equity compensation plans (excluding  securities reflected in the first column)
Equity compensation plans approved by security holders	1,714,113(1)	$24.41	1,568,950(2)
Equity compensation plans not approved by security holders	N/A	N/A	N/A
Total	1,714,113(1)	$24.41	1,568,950(2)

(1)     Includes stock options and stock settled appreciation rights issued and outstanding under the following AMCOL plans: 1998 Long-Term Incentive Plan; 2006 Long-Term Incentive Plan; and 2010 Long-Term Incentive Plan.

(2)     Subject to issuance pursuant to our 2010 Long-Term Incentive Plan.

Performance Graph

The graph below sets forth a comparison of cumulative total shareholder returns for the past five years for: (i) our stock as traded on the NYSE, (ii) the S&P SmallCap600 Index, and (iii) a custom peer group of publicly traded companies selected in good faith by us (the “Peer Group”). The graph assumes that $100 was invested at the close of business on December 31, 2006. All returns were calculated assuming dividend reinvestment on a quarterly basis. The returns of each company in the Peer Group have been weighted according to market capitalization. We believe the Peer Group is representative of companies whose businesses, sales sizes, market capitalization and stock trading volumes are similar to

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AMCOL. The Peer Group consists of the following companies: Compass Minerals International, Inc., Dycom Industries, Inc., Lufkin Industries, Inc., Martin Marietta Materials Inc., Minerals Technologies Inc., Oil-Dri Corporation, Rockwood Holdings Inc., RPM International Inc., and Superior Energy Services Inc.

INDEX RETURNS Years Ending
	Base Period
Company Name / Index	12/2006		12/2007		12/2008		12/2009		12/2010		12/2011
AMCOL International Corporation		100		132.47		78.94		111.22		124.63		110.51
S&P SmallCap 600 Index		100		99.70		68.72		86.29		108.99		110.10
Peer Group		100		117.89		74.69		98.40		130.68		121.26

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Item  6. Selected Financial Data

The following is selected financial data for the Company for each of the below annual periods ending December 31^st.

SUMMARY OF OPERATIONS

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

	2011			2010			2009			2008			2007
Operations Data
Net sales	$	942,369		$	841,037		$	691,864		$	858,763		$	720,992
Gross profit		252,875			216,926			186,270			219,847			193,153
Selling, general and administrative expenses		165,222			146,885			133,393			144,162			120,290
Operating profit		87,653			70,041			52,877			75,685			72,863
Net interest expense		(11,519	)		(9,725	)		(12,118	)		(12,152	)		(8,915	)
Net other income (expense)		311			1,147			(927	)		(4,931	)		(1,133	)
Pretax income		76,445			61,463			39,832			58,602			62,815
Income taxes		21,849			19,391			5,335			13,688			15,614
Income (loss) from affiliates and joint ventures		5,566			(11,261	)		115			(21,714	)		8,389
Income from continuing operations		60,162			30,811			34,612			23,200			55,590
Discontinued operations		(916	)		(887	)		259			1,862			1,140
Net income		59,246			29,924			34,871			25,062			56,730
Net income attributable to AMCOL shareholders		59,111			30,347			34,799			25,331			56,735
Per Share Data
Basic earnings (loss) per share attributable to AMCOL shareholders
Continuing operations		1.89			1.00			1.12			0.77			1.84
Discontinued operations		(0.03	)		(0.03	)		0.01			0.06			0.04
Net income		1.86			0.97			1.13			0.83			1.88
Diluted earnings (loss) per share attributable to AMCOL shareholders
Continuing operations		1.87			0.99			1.11			0.76			1.79
Discontinued operations		(0.03	)		(0.03	)		0.01			0.06			0.04
Net income		1.84			0.96			1.12			0.82			1.83
Dividends		0.72			0.72			0.72			0.68			0.60

Continued…

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SUMMARY OF OPERATIONS

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

	2011		2010		2009		2008		2007
Shares Outstanding Data
End of period		31,728,969		31,032,791		30,773,908		30,437,984		30,093,828
Weighted average for the period-basic		31,708,949		31,178,813		30,764,282		30,445,882		30,164,697
Incremental impact of stock equivalents		436,824		368,778		269,432		543,751		794,724
Weighted average for the period-diluted		32,145,773		31,547,591		31,033,714		30,989,633		30,959,421
Balance Sheet Data (at end of period)
Current assets	$	412,268	$	361,564	$	294,030	$	371,187	$	304,630
Net property and equipment		262,577		260,488		236,246		191,343		176,590
Other long-term assets		167,857		177,041		203,984		182,050		170,926
Total assets		842,702		799,093		734,260		744,580		652,146
Current liabilities		118,080		112,475		90,316		108,494		102,107
Long-term debt		260,670		236,171		207,017		256,821		164,232
Other long-term liabilities		63,732		50,011		57,155		50,910		33,157
Total equity		400,220		400,436		379,772		328,355		352,650
Other Statistics for Continuing Operations
Depreciation, depletion and amortization	$	41,836	$	36,306	$	35,906	$	33,985	$	29,219
Capital expenditures		61,029		47,305		50,767		44,068		46,004
Capital expenditures-corporate building		-		-		9,651		16,672		7,050
Gross profit margin		26.8%		25.8%		26.9%		25.6%		26.8%
Operating profit margin		9.3%		8.3%		7.6%		8.8%		10.1%
Pretax profit margin		8.1%		7.3%		5.8%		6.8%		8.7%
Effective tax rate		28.6%		31.5%		13.4%		23.4%		24.9%
Net profit from continuing operations margin		6.4%		3.7%		5.0%		2.7%		7.7%
Return on average equity		14.8%		7.8%		9.8%		7.4%		17.5%

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

Overview

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Critical Accounting Policies and Estimates

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

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

Valuation of Accounts Receivable

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

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

Inventory Valuation

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

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

Goodwill and Long-lived Assets

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

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

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

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

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

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

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Retirement Benefits

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

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

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

Income Taxes

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

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

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

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

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

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

The discussion below references the consolidated statement of operations included in “Item 8. Financial Statements and Supplementary Data.”

Consolidated Income Statement Review

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

	Year Ended December 31,
Consolidated	2011		2010		2009		2011  vs. 2010		2010  vs. 2009
	(Dollars in Thousands)
Continuing Operations
Net sales	$	942,369	$	841,037	$	691,864		12.0%		21.6%
Cost of sales		689,494		624,111		505,594
Gross profit		252,875		216,926		186,270		16.6%		16.5%
margin %		26.8%		25.8%		26.9%
Selling, general and administrative expenses		165,222		146,885		133,393		12.5%		10.1%
Operating profit		87,653		70,041		52,877		25.1%		32.5%
margin %		9.3%		8.3%		7.6%
Other income (expense):
Interest expense, net		(11,519)		(9,725)		(12,118)		18.4%		-19.7%
Other, net		311		1,147		(927)		-72.9%		-223.7%
		(11,208)		(8,578)		(13,045)
Income before income taxes and income (loss) from affiliates and joint ventures		76,445		61,463		39,832
Income tax expense		21,849		19,391		5,335		12.7%		263.5%
Income before income (loss) from affiliates and joint ventures		54,596		42,072		34,497
Income (loss) from affiliates and joint ventures		5,566		(11,261)		115		-149.4%		-9892.2%
Income from continuing operations		60,162		30,811		34,612
Discontinued Operations
Income (loss) on discontinued operations		(916)		(887)		259		-		-442.5%
Net income (loss)		59,246		29,924		34,871		98.0%		-14.2%
Net income (loss) attributable to noncontrolling interests		135		(423)		72		-131.9%		-687.5%
Net income attributable to AMCOL shareholders		59,111		30,347		34,799		94.8%		-12.8%

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

Net sales

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

		000000000000		000000000000		000000000000		000000000000
2011 vs. 2010	Base Business		Acquisitions		Foreign Exchange		Total
Minerals and materials		5.8%		0.0%		0.5%		6.3%
Environmental		2.4%		0.1%		0.6%		3.1%
Oilfield services		4.3%		0.0%		0.3%		4.6%
Transportation & intersegment sales		-2.0%		0.0%		0.0%		-2.0%
Total		10.5%		0.1%		1.4%		12.0%
% of change		87.1%		0.8%		12.1%		100.0%

		000000000000		000000000000		000000000000		000000000000
2010 vs. 2009	Base Business		Acquisitions		Foreign Exchange		Total
Minerals and materials		12.5%		0.0%		1.0%		13.5%
Environmental		2.0%		0.2%		0.3%		2.5%
Oilfield services		4.6%		0.0%		0.4%		5.0%
Transportation & intersegment sales		0.6%		0.0%		0.0%		0.6%
Total		19.7%		0.2%		1.7%		21.6%
% of change		91.1%		1.0%		7.9%		100.0%

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

The impact of the 2008 – 2009 recession is evident in our revenue fluctuations as shown in the above tables. As the global economic recovery was underway in 2010, sales increased organically across all segments but most notably in our minerals and materials segment, which significantly benefitted from increased sales of its metalcasting products, especially to those service customers supplying the automotive industry. This growth continued into 2011 with almost half of the revenue growth occurring organically in our metalcasting product line within our minerals and materials segment, some of this due to our new chromite product offering. Our oilfield services segment also contributed significantly to the 2011 growth in revenues due to growth in our coil tubing services.

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

		00000000000000000		00000000000000000		00000000000000000
	2011		2010		2009
Americas		62.5%		63.2%		63.8%
EMEA *		23.4%		22.1%		24.3%
Asia Pacific		14.1%		14.7%		11.9%
Total		100.0%		100.0%		100.0%

^* Europe, Middle East and Africa

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

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

Gross profit

Gross profit increased in 2011 due to the increase in sales. In 2010, our minerals and materials segment incurred $6.3 million of unusual costs associated with operational issues in our domestic personal care product line. Excluding these unusual costs, gross margin between the two years is not significantly different – 26.8% in 2011 vs 26.5% in 2010.

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

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

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

Operating profit

In both 2011 and 2010, the increase in operating profit follows the increase in gross profit and was generated from organic growth as opposed to acquisitions or currency movements. Operating profit in 2010 includes $6.9 million of unusual expenses in our domestic personal care business, as previously discussed, as well as $2.7 million of expenses associated with the retirement of our previous chief executive officer. Excluding both of these expenses, operating profit margin in 2011 was 9.3% as compared to 9.5% in 2010. Operating profit in 2010 increased over the 2009 amount due to the operating leverage; that is, the incremental sales were generated without commensurate increases in costs.

Net interest expense

Net interest expense increased in 2011 mostly due to increased average debt levels throughout the year. As our business grew throughout the year, we increased our debt levels to fund the corresponding increases in working capital required to fuel that growth. We had $247.3 million of debt outstanding during 2011 at an average interest rate of 4.7%.

On the contrary, net interest expense decreased in 2010 due to a decrease in average debt levels. Average debt went from $237.0 million in 2009 to $221.6 million in 2010 while average interest rates decreased from 5.1% in 2009 to 4.4% in 2010.

Other, net

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

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

Income taxes

The largest factors giving rise to the changes in our effective income tax rates between years lies in the amount of depletion deductions and income generated in domestic versus foreign jurisdictions, which have lower tax rates. A schedule reconciling the U.S. federal statutory income tax rate to our effective rate is included in Note 7 of the Notes to Consolidated Financial Statements.

Our effective income tax rate was 28.6%, 31.5%, and 13.4% in 2011, 2010, and 2009, respectively. Our effective tax rate in 2011 is less than that in 2010 due to the fact that 2010 includes expenses of $2.7 million to reserve for income tax benefits in our foreign operations which may not be realized.

As compared to 2009, income tax expense in 2010 increased due to the aforementioned $2.7 million reserve. In addition, 2009 benefitted from the fact that a greater portion of our income was generated in our foreign operations, an approximate $3.3 million benefit, and the resolution to certain audit matters. The resolution of the matters resulted in increased income taxes upon settlement (a $2.1 million increase in expense) and the elimination of a reserve for certain uncertain tax matters (a $3.0 million benefit).

Income (loss) from affiliates and joint ventures

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

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

Excluding our investments in Russia and Belgium, we recorded income of $4.1 million, $2.8 million and $1.8 million from our affiliates and joint ventures in each of 2011, 2010 and 2009, respectively. Income generated from these investments increased in each of 2010 and 2011 due to improved financial performance of our Japanese joint venture and our Mexican joint venture. The Japanese venture has benefitted from the economic recovery in Japan in 2010 and increased sales of environmental segment related products after the tsunami in March 2011. Our Mexican joint venture has experienced improved performance due to its laundry care business.

Income (loss) on discontinued operations

In 2011, we sold our domestic contracting services business due to its continued poor financial performance. The amounts reflected in Income (loss) from discontinued operations relate solely to these domestic operations, and, as of December 31, 2011, our Consolidated Balance Sheet includes a $6.3 million receivable owed to us as a result of the sale of these operations.

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Net income attributable to AMCOL shareholders

The increase in net income attributable to AMCOL shareholders in 2011 is due to the increased operating profit performance of our minerals and materials and oilfield services segments. See a discussion of each segment for factors affecting each of them. In 2011, the increase is not only due to the improved operating performance offset affected by the increased interest expense and benefited by the increase in income from affiliates and joint ventures.

The decrease income attributable to AMCOL shareholders in 2010 is generated from the favorable increase in operating profit being offset by increased income tax expense and losses from joint ventures and affiliates, all as previously discussed.

Earnings per share (diluted)

Our weighted average number of shares of common stock and common stock equivalent shares outstanding increased 1.9% in 2011 and 1.7% in 2010 due to exercises of stock compensation awards. The increases have reduced our diluted earnings per share by $0.03 in each of 2011 and 2010. The remaining fluctuations in our diluted earnings per share results from the changes in Net income attributable to AMCOL shareholders, as previously discussed.

Segment Reviews

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

Minerals and Materials Segment

		000000000	000000000		000000000	000000000		000000000	000000000		000000000		000000000
	Year Ended December 31,
Minerals and Materials	2011			2010			2009			2011 vs. 2010		2010 vs. 2009
	(Dollars in Thousands)
Net sales	$	481,898	100.0%	$	429,270	100.0%	$	336,172	100.0%		12.3%		27.7%
Cost of sales		363,040	75.3%		330,297	76.9%		264,545	78.7%
Gross profit		118,858	24.7%		98,973	23.1%		71,627	21.3%		20.1%		38.2%
Selling, general and administrative expenses		49,776	10.3%		44,393	10.3%		36,838	11.0%		12.1%		20.5%
Operating profit		69,082	14.4%		54,580	12.8%		34,789	10.3%		26.6%		56.9%

Revenues Originating From - Minerals and Materials	Americas		EMEA		Asia Pacific		Total
Fiscal year:
2011		59.1%		19.3%		21.6%		100.0%
2010		61.9%		18.1%		20.0%		100.0%
2009		62.8%		20.1%		17.0%		100.0%

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		000000000000		000000000000		000000000000		000000000000		000000000000
Minerals and Materials Product Line Sales	Year Ended December 31,
	2011		2010		2009		2011 vs. 2010		2010 vs. 2009
	(Dollars in Thousands)
Metalcasting	$	251,486	$	204,577	$	139,849		22.9%		46.3%
Specialty materials		105,798		107,287		97,989		-1.4%		9.5%
Pet products		55,999		61,971		66,441		-9.6%		-6.7%
Basic minerals		54,615		48,886		27,901		11.7%		75.2%
Other product lines		14,000		6,549		3,992		113.8%		64.1%
Total		481,898		429,270		336,172

Overall trends

Revenues in our Asia-Pacific region continue to comprise a greater portion of our overall revenues due to growth in that region, especially China. In addition, our chromite operations in South Africa started to make a significant contribution to revenues in 2011 – they increased $20.7 million in 2011 and account for the increase in EMEA revenues as a percentage of our total revenues.

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

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

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

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

2011 vs. 2010

In 2011, our minerals and materials segment continued its strong performance from 2010 for largely the same reasons. Sales increased in three of our product lines: metalcastings by $46.9 million, basic minerals by $5.7 million (due to growth in our agriculture products), and other product lines by $7.5 million (due to increased sales of environmental segment products in Turkey). We continued to raise selling prices around the world, but most significantly in the USA and Asia Pacific due to the strong demand for our metalcasting products. In addition, we increased our volumes as well, led by demand for new chromite product from our South Africa mine.

Our gross profits increased due to the increase in sales, and gross margins increased 160 basis points. However, the 2010 gross margin was depressed due to the inclusion of $6.3 million of costs included within cost of sales that we believe were unusual and resulted from operational issues in our domestic personal care business. Excluding this $6.3 million from 2010 results, the 2010 gross margin would have been 24.5%, or roughly equivalent to the 24.7% experienced in 2011. The relatively stable gross margin reflects selling price increases, as previously noted, substantially offset by increases in production costs, such as fuel, transportation rates, and other raw materials.

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

2010 vs. 2009

Our minerals and materials segment achieved strong performance in 2010 mostly due our metalcasting business and our businesses within the Asia Pacific region. Sales to the metalcasting market increased 46% in 2010 as demand for automobiles, heavy equipment, and related castings increased following the global economic recovery from the recession in 2008-2009. Also, our businesses in the Asia Pacific region continue to benefit from investments we’ve made in that region and our basic minerals division experienced a strong increase in sales due to increased demand for drilling fluids for oil and gas well drilling.

The increase in sales led to the increase in gross profits. Nearly all of the increase in metalcasting sales was due to increased volumes. Given our emphasis on streamlining operations over the last several years, we were able to achieve these volumes with greater production efficiencies, leading to enhanced gross margins. We did, however, have $6.3 million of costs included within cost of sales that we believe were unusual and resulted from operational issues in our domestic personal care business.

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

Environmental Segment

		000000000	000000000		000000000	000000000		000000000	000000000		000000000		000000000
Environmental	Year Ended December 31,
	2011			2010			2009			2011 vs. 2010		2010 vs. 2009
	(Dollars in Thousands)
Net sales	$	246,385	100.0%	$	220,598	100.0%	$	203,231	100.0%		11.7%		8.5%
Cost of sales		173,032	70.2%		152,450	69.1%		132,836	65.4%
Gross profit		73,353	29.8%		68,148	30.9%		70,395	34.6%		7.6%		-3.2%
Selling, general andadministrative expenses		54,912	22.3%		48,334	21.9%		45,305	22.3%		13.6%		6.7%
Operating profit		18,441	7.5%		19,814	9.0%		25,090	12.3%		-6.9%		-21.0%

Revenues Originating From - Environmental	Americas		EMEA		Asia Pacific		Total
Fiscal year:
2011		45.0%		49.0%		6.0%		100.0%
2010		44.9%		45.9%		9.2%		100.0%
2009		44.7%		47.6%		7.7%		100.0%

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		000000000000		000000000000		000000000000		000000000000		000000000000
	Year Ended December 31,
Environmental Product Line Sales	2011		2010		2009		2011 vs. 2010		2010 vs. 2009
	(Dollars in Thousands)
Lining technologies	$	103,458	$	107,974	$	101,370		-4.2%		6.5%
Building materials		76,144		57,220		54,724		33.1%		4.6%
Contracting services		35,407		31,075		25,519		13.9%		21.8%
Drilling products		31,376		24,329		21,618		29.0%		12.5%
Total		246,385		220,598		203,231

2011 vs. 2010

Approximately 20% of the growth in revenues was derived from favorable foreign currency exchange rate movements, mostly between the USD and the PLN and GBP, with the remainder coming from organic growth.

Our building materials product line generated significant increases in revenues due to the launching of new products that utilize polymer technologies as opposed to mineral technologies. Also increasing sales is the improvement made in our distribution network in our foreign markets. Our drilling product line also experienced strong revenue growth due to increased sales of value added, polymer based products and expansion into new geographic markets in Europe. The contracting services revenue included in our product line sales represents revenues earned overseas as we sold our domestic contracting services business in 2011; in the near future we intend to reduce our footprint in our Irish contracting services product line by closing the facility providing those services.

Gross profits increased due to the increase in sales. Gross profit margins, however, decreased 110 basis points due to increased production and raw material costs. In the US, we experienced increased overhead costs as volumes decreased, thereby spreading the overhead costs amongst a smaller population of products produced. In Europe, resin costs increased to levels not seen in recent years and production costs increased as a result of the need to reduce the moisture content of minerals used in production.

SG&A expenses increased $6.6 million, most of which occurred in the US and Europe. Approximately 14% of the total increase relates to fluctuations in foreign currency exchange rates between the USD and other European currencies. In Europe, we recorded $1.2 million as a bad debt expense for a contracting services customer in our Irish branch, which we intend to close in 2012. We also had $0.7 million of increased legal expenses. In the US, employee compensation increased $1.6 million due to improved performance of our building materials and drilling product lines. We also increased expenses by $0.9 million to expand our product lines, including establishing a presence in India.

2010 vs. 2009

Base business accounted for 80% of the increase in net sales. Favorable foreign currency exchange rate movements, mostly of the U.S. dollar versus the Polish zloty and the British pound, and acquisitions split the remaining growth.

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

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

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

Oilfield Services Segment

Oilfield Services	Year Ended December 31,
	2011			2010			2009			2011 vs. 2010		2010 vs. 2009
		(Dollars in Thousands)
Net sales	$	193,632	100.0%	$	154,621	100.0%	$	119,821	100.0%		25.2%		29.0%
Cost of sales		138,778	71.7%		110,681	71.6%		81,101	67.7%
Gross profit		54,854	28.3%		43,940	28.4%		38,720	32.3%		24.8%		13.5%
Selling, general and administrative expenses		34,973	18.1%		29,322	19.0%		25,967	21.7%		19.3%		12.9%
Operating profit		19,881	10.2%		14,618	9.4%		12,753	10.6%		36.0%		14.6%

Revenues Originating From - Oilfield services	Americas		EMEA		Asia Pacific		Total
Fiscal year:
2011		87.4%		4.4%		8.2%		100.0%
2010		83.8%		4.4%		11.7%		100.0%
2009		89.2%		3.3%		7.5%		100.0%

Overall trends

Our oilfield services segment is comprised of various product lines which differ in their proprietary technology, the demand for their services, and the location of where services are performed. Our most value added and greatest margin services center around our proprietary water treatment technologies. After the Deepwater Horizon oil spill (unrelated to our company) in April 2010, less oil well drilling activity has occurred in the Gulf of Mexico and thus the demand for our water treatment services has decreased. As a result of the decrease for offshore services, many oilfield service providers relocated assets to onshore activities, thereby increasing the supply and decreasing the price for those services.

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

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

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2011 vs. 2010

Approximately 62% of the increase in revenues occurred in our coil tubing services due to the growth in fracking jobs in the US shale regions, primarily in Texas and Louisiana where our services and equipment are based. The remaining growth occurred primarily in our well testing services and pipeline services. Well testing is benefitting from increased demand in the shale regions due to the growth in production there and an increase in offshore work as compared to the significant depression of activity in the Gulf of Mexico in 2010 after the Horizon spill. Pipeline services are benefitting from increased demand due to increased prices for oil.

Gross profits increased with the increase in revenues and gross margins remained fairly stable.

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

2010 vs. 2009

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

Gross profit increased due to the increased revenues and increased margins generated from our coil tubing operations. Overall, however, our gross margins decreased due to decreases in our other service lines. This segment experienced a significant decrease in margins in the first quarter of 2010 resulting from a decrease in revenues in our larger service offerings, such as filtration and well testing, which contain a greater fixed cost structure. The decrease in margins from the first quarter was difficult to overcome throughout the rest of the year when compared to a full year’s activity in 2009. In addition, 2010 had a decrease in the mix of services as revenues were less concentrated in higher profit businesses, such as our pipeline and filtration services, partly due to the drilling moratorium that existed for much of 2010 after the Horizon accident. The last factor affecting the decrease in margins across other business lines was an increase in costs to service some customers in international markets.

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

Transportation Segment

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

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2011 vs. 2010

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

2010 vs. 2009

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

Corporate Segment

	Year Ended December 31,
Corporate	2011		2010		2009		2011 vs. 2010		2010 vs. 2009
		(Dollars in Thousands)
Intersegment sales	$	(33,659)	$	(15,677)	$	(14,002)
Intersegment cost of sales		(33,328)		(15,677)		(14,002)
Gross profit		(331)		-		-
Corporate selling, general and administrative expenses		21,661		21,401		21,918		1.2%		-2.4%
Operating loss		(21,992)		(21,401)		(21,918)

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

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

2011 vs. 2010

Excluding the $2.7 million of expenses incurred in 2010 for the retirement of our former CEO, SG&A expenses increased $2.9 million. The increase relates to expenses incurred to address issues at our South African operations, increased expenses associated with overseeing strategic initiatives in our foreign operations, and increased infrastructure expenses to support our overall operations, such as new human resource management initiatives.

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2010 vs. 2009

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

Consolidated Balance Sheet Review

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

Our total assets increased by $43.6 million in 2011 to $842.7 million. We increased our investment in non-cash working capital by $48.9 million due to increases in our inventory ($39.1 million) and accounts receivable ($12.9 million) to support our revenue growth. We also increased our investment in property, plant and equipment, mostly in our oilfield services and minerals and materials segments, to help grow and maintain those businesses. We funded these investments mainly through profits from our operations as well as additional borrowings on our revolving debt facility.

The $9.6 million decrease in our mineral rights assets reflects the decreased value, as opposed to decreased quantity, of chromite mineral rights stemming from the devaluation of the ZAR versus the USD, our reporting currency.

The $7.4 million increase in our investments and advances to joint ventures and affiliates reflects advances we made to Ashapura Volclay Limited, one of our Indian investments, to provide necessary capital for expanded production capabilities as well as the inclusion of our Mexican investment in this account after we deconsolidated it in 2011.

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

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

Our accumulated other comprehensive income decreased $43.9 million, of which $24.6 million relates to the revaluation of the net assets of our foreign subsidiaries into our reporting currency, USD, during consolidation. The exchange rates between the USD and the functional currencies of several of our entities, including the ZAR and TRY, have fluctuated significantly, causing the majority of the decrease. In addition, the other items included in our Statement of Other Comprehensive Income, such as unrealized losses on our available-for-sale securities and pension adjustments, accounted for an additional $17.9 million of the decrease, net of tax.

Liquidity and Capital Resources

Cash flows from operations, an ability to issue new debt instruments, an ability to lease equipment, and borrowings from our revolving credit facility have historically been our sources of funds to provide working capital, make capital expenditures, acquire businesses, repurchase common stock, and pay dividends to shareholders. We believe cash flows from operations and borrowings from the unused portion of our committed credit facility will be adequate to support our business needs for the foreseeable future. Should the need arise or should we choose to, we can 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 this Form 10-K. Terms of any new facilities, especially interest rates or covenants, may be significantly different to those we currently have.

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

In periods of growth, such as in 2011 and 2010, our working capital levels increase a) as our receivables grow in response to increased sales and b) as we invest in incremental inventory levels to meet the growing demand for our products. However in 2009, our working capital levels decreased as the economic recession weakened demand for our products. Non-cash working capital was approximately $270.5 million and $221.8 million as of December 31, 2011 and 2010, respectively. The current ratio (current assets divided by current liabilities) was 3.5-to-1 and 3.2-to-1 as of the end of 2011 and 2010, respectively.

Our cash flows from investing activities largely depend upon our levels of capital expenditures and acquisitions of new businesses. Capital expenditure in 2011, 2010 and 2009 were $61.2 million, $47.3 million, and $60.4 million, respectively. Capital expenditure included approximately $8.2 million and $14.9 million in 2011 and 2010, respectively, of expenditures in relation to our chromite operations in South Africa after having purchased a mine there in 2009. Capital expenditure in 2009 included $23.0 million of expenditure to acquire the chromite mineral rights and begin constructing a plant there to process the chromite. Excluding the expenditures relating to our South Africa operations, the majority of our remaining capital expenditure in all three years occurred in our oilfield services segment (to increase the size of our equipment fleet) and our minerals and materials segment (mostly for maintenance capital to ensure stability as the business experiences growth).

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

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

As of December 31, 2011, we had net outstanding debt (net of cash and cash equivalents) of $237.0 million versus $208.9 million at the end of the prior year. Total long-term debt represented 39%, 37%, and 35% of total capitalization at December 31, 2011, 2010 and 2009, respectively. We attempt to have a majority of our debt instruments contain fixed rates of interest; we achieve this partly through the use of interest rate swap derivatives. As of December 31, 2011, 63% of our debt is fixed at an average interest rate of 5.48%; the remainder of our debt contains interest rates which vary mostly in response to changes in LIBOR.

Contractual Obligations and Off-balance Sheet Arrangements

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

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

Amounts included within our financial statements

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

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

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

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

Amounts excluded from our financial statements

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

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

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

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risk from fluctuations in foreign currency exchange rates, interest rates, credit risk, and market risks on certain publicly traded securities. We use a variety of practices to manage these market risks, including derivative financial instruments when appropriate. Our treasury and risk management policies prohibit us from using derivative instruments for trading or speculative purposes. We also do not use leveraged derivative instruments or derivatives with complex features.

Exchange Rate Sensitivity

As we operate in over 25 countries with many international subsidiaries, we are exposed to currency fluctuations related to manufacturing and selling our products and services. This foreign currency risk is diversified and involves assets, liabilities and cash flows denominated in currencies other than the USD. Our major foreign currency exposures involve our subsidiaries in Europe, Southeast Asia, and South Africa, although all foreign subsidiaries are subject to foreign currency exchange rate risk versus the USD. Exchange rates between these currencies and the USD have fluctuated significantly in recent years and may continue to do so in the future.

We manage our foreign currency exchange risk in part through operational means, including managing same currency revenues versus same currency costs as well as same currency assets versus same currency liabilities. We also have subsidiaries with the same currency exposures which may offset each other, providing a natural hedge against one another’s currency risk. From time to time, we also use derivative instruments to reduce these foreign currency exchange rate risks. At December 31, 2011, we did not have any foreign currency derivative contracts outstanding.

Assets and liabilities of our international subsidiaries are translated to their parent company’s reporting currency at current exchange rates during consolidation; gains and losses stemming from these translations are included as a component of Other Comprehensive Income and reported within Accumulated Comprehensive Income within our consolidated balance sheet. Income and expenses of our international subsidiaries are translated at average exchange rates for the period and, when included within retained earnings in the balance sheet at current exchange rates, the differences to those average exchange rates is included within Other Comprehensive Income and reported within Accumulated Comprehensive Income. When our subsidiaries transact business in currencies other than their functional currency, those transactions are revalued in their functional currency and differences resulting from such revaluations are included within Other income, net within our Consolidated Statement of Operations.