NOTE 3 – RESTATEMENT OF FINANCIAL STATEMENTS

The Company's 2012 consolidated financial statements have been restated for the effect of certain adjustments that were made in the preparation of AMAK's 2012 financial statements prepared in accordance with U.S. GAAP which the Company received in June 2013.

The Company had originally prepared its 2012 consolidated financial statements and applied the equity method of accounting for its investment in AMAK on the basis of AMAK's financial statements prepared in accordance with Saudi Arabian GAAP ("SA GAAP") and audited by a firm licensed in Saudi Arabia but not registered with the PCAOB and an analysis performed at that time to identify differences between SA GAAP and U. S. GAAP. In June 2013 the Company received AMAK's financial statements prepared in accordance with U.S. GAAP and audited by a firm of independent registered public accountants registered with the PCAOB to be filed by the Company under Rule 3-09 of Regulation S-X. The preparation and audit of those U.S. GAAP financial statements identified additional adjustments related to the timing of revenue recognition and the use of accelerated methods of depreciation and amortization. As a result of those adjustments the Company has had to restate its 2012 consolidated financial statements to adjust the amount recorded under the equity method of accounting for the Company's share of AMAK's net income (loss).

The effects of the restatement are as follows:

	December 31, 2012
	As Reported		As Restated
	(thousands of dollars)
Consolidated Balance Sheets
Investment in AMAK	$	38,971	$	37,894
Total Assets		121,453		120,376
Retained Earnings		36,428		35,351
Total Arabian American Development Company Stockholders' Equity		83,020		81,943
Total Equity		83,309		82,232
Total Liabilities and Equity		121,453		120,376

Consolidated Statements of Income
Equity in earnings (loss) of AMAK	$	866	$	(211	)
Income before income tax expense		17,302		16,226
Net income		11,398		10,321
Net income attributable to Arabian American Development Company		11,398		10,321
Net income per common share:
Basic earnings per share (dollars)	$	0.47	$	0.43
Diluted earnings per share (dollars)	$	0.46	$	0.42


Consolidated Statements of Comprehensive Income
Net Income	$	11,398	$	10,321
Comprehensive Income		11,566		10,489

Consolidated Statement of Stockholders' Equity
Net Income	$	11,398	$	10,321
Retained Earnings		36,428		35,351
Total		83,020		81,943
Total Equity		83,309		82,232

Consolidated Statements of Cash Flows
Operating Activities
Net income attributable to Arabian American Development Company	$	11,398		$	10,321
Equity in (income) loss of AMAK		(866	)		211