Annual report pursuant to section 13 and 15(d)

CHANGE IN ACCOUNTING PRINCIPLE FOR INVESTMENT IN AMAK

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CHANGE IN ACCOUNTING PRINCIPLE FOR INVESTMENT IN AMAK
12 Months Ended
Dec. 31, 2012
CHANGE IN ACCOUNTING PRINCIPLE FOR INVESTMENT IN AMAK [Abstract]  
CHANGE IN ACCOUNTING PRINCIPLE FOR INVESTMENT IN AMAK
NOTE 2 – CHANGE IN ACCOUNTING PRINCIPLE FOR INVESTMENT IN AMAK

As discussed in Note 10, in 2012 the Company determined that changes in the level of its participation in the management of AMAK now indicated that the Company had significant influence over the financial and operating policies of AMAK.  Accordingly, the Company changed from the cost method of accounting for its investment in AMAK to the equity method of accounting for the investment.  In accordance with ASC 323-10-35-33, the financial statements for the prior periods have been retrospectively restated to account for the investment in AMAK for all periods.

The effects of the retrospective application of the equity method of accounting to 2011 are as follows:

   
December 31, 2011
 
   
As Reported
   
As Restated
 
   
(thousands of dollars)
 
Consolidated Balance Sheet
           
Investment in AMAK
  $ 30,884     $ 38,105  
Total assets
    110,612       117,833  
Deferred income tax liability – long term
    7,016       9,394  
Total liabilities
    44,374       46,751  
Retained earnings
    20,187       25,030  
Total Arabian American Development Company stockholders' equity
    65,949       70,793  
Total equity
    66,238       71,082  
Total liabilities and equity
    110,612       117,833  

   
December 31, 2011
 
   
As Reported
   
As Restated
 
   
(thousands of dollars)
 
Consolidated Statement of Income
           
Equity in loss of AMAK
  $ -     $ 1,018
Gain from additional equity issued by AMAK
    -       8,850  
Income before income tax expense
    12,557       20,389  
Income tax expense
    4,127       6,505  
Net income
    8,430       13,884  
Net income attributable to Arabian American Development Company
    8,430       13,884  
Net income per common share
               
Basic
  $ 0.35     $ 0.58  
Diluted
  $ 0.35     $ 0.57  

   
December 31, 2011
 
   
As Reported
   
As Restated
 
   
(thousands of dollars)
 
Consolidated Statement of Stockholders' Equity
           
Comprehensive income
  $ 8,419     $ 13,872  

   
December 31, 2011
 
   
As Reported
   
As Restated
 
   
(thousands of dollars)
 
Consolidated Statement of Cash Flows
           
Operating activities
           
Net income attributable to Arabian American Development Company
  $ 8,430     $ 13,884  
Deferred income taxes
    860       3,238  
Equity in loss of AMAK
    -       1,018  
Gain from additional equity issued by AMAK
    -       (8,850 )

The effects of the retrospective application of the equity method of accounting to 2010 are as follows:

   
December 31, 2010
 
   
As Reported
   
As Restated
 
   
(thousands of dollars)
 
Consolidated Balance Sheet
           
Investment in AMAK
  $ 30,884     $ 30,273  
Total assets
    92,528       91,917  
Retained earnings
    11,756       11,145  
Total Arabian American Development Company stockholders' equity
    56,551       55,940  
Total equity
    56,840       56,230  
Total liabilities and equity
    92,528       91,917  

   
December 31, 2010
 
   
As Reported
   
As Restated
 
   
(thousands of dollars)
 
Consolidated Statement of Income
           
Equity in loss of AMAK
  $ 263     $ 874  
Income before income tax expense
    4,388       3,778  
Net income
    2,686       2,075  
Net income attributable to Arabian American Development Company
    2,686       2,075  
Net income per common share
               
Basic
  $ 0.11     $ 0.09  
Diluted
  $ 0.11     $ 0.09  

   
December 31, 2010
 
   
As Reported
   
As Restated
 
   
(thousands of dollars)
 
Consolidated Statement of Stockholders' Equity
           
Comprehensive income
  $ 2,790     $ 2,180  

   
December 31, 2010
 
   
As Reported
   
As Restated
 
   
(thousands of dollars)
 
Consolidated Statement of Cash Flows
           
Operating activities
           
Net income attributable to Arabian American Development Company
  $ 2,686     $ 2,075  
Equity in loss of AMAK
    263       874  

AMAK's activities through December 31, 2009, were limited to the construction of facilities to begin the commercial development of the interests.  As a result, AMAK did not have significant income or loss through December 31, 2009, and the change to the equity method of accounting had no effect on the January 1, 2010, beginning balance of retained earnings.