Quarterly report pursuant to Section 13 or 15(d)

INVESTMENT IN AL MASANE AL KOBRA MINING COMPANY ("AMAK")

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INVESTMENT IN AL MASANE AL KOBRA MINING COMPANY ("AMAK")
 9 Months Ended
Sep. 30, 2014
INVESTMENT IN AL MASANE AL KOBRA MINING COMPANY ("AMAK") [Abstract]  
INVESTMENT IN AL MASANE AL KOBRA MINING COMPANY ("AMAK")
13. INVESTMENT IN AL MASANE AL KOBRA MINING COMPANY (“AMAK”)

As of September 30, 2014, and December 31, 2013, the Company had a non-controlling equity interest (35%) of approximately $53.4 million and $54.1 million, respectively. This investment is accounted for under the equity method. There were no events or changes in circumstances that may have an adverse effect on the fair value of our investment in AMAK at September 30, 2014.

AMAK’s financial statements were prepared in the functional currency of AMAK which is the Saudi Riyal (SR).  In June 1986 the SR was officially pegged to the U. S. Dollar (USD) at a fixed exchange rate of 1 USD to 3.75 SR.

The summarized results of operation and financial position for AMAK are as follows:
 
Results of Operations

   
Three Months Ended September 30,
    
Nine Months Ended September 30,
  
   
2014
    
2013
    
2014
    
2013
  
   
(Thousands of Dollars)
  
Sales
  
$
16,957
    
$
17,815
    
$
47,655
    
$
64,310
  
Gross Profit
    
1,785
      
6,994
      
6,469
      
25,028
  
General, administrative and other expenses
    
3,714
      
4,256
      
11,285
      
14,071
  
Net Income (loss)
  
$
(1,929
)
  
$
2,738
    
$
(4,816
)
  
$
10,957
  

Financial Position

   
September 30,
    
December 31,
  
   
2014
    
2013
  
   
(Thousands of Dollars)
  
Current assets
  
$
23,839
    
$
32,923
  
Noncurrent assets
    
264,318
      
264,997
  
Total assets
  
$
288,157
    
$
297,920
  
                 
Current liabilities
  
$
18,353
    
$
22,497
  
Long term liabilities
    
75,023
      
75,826
  
Shareholders' equity
    
194,781
      
199,597
  
   
$
288,157
    
$
297,920
  

The equity in the income or loss of AMAK reflected on the consolidated statement of income for the three and nine months ended September 30, 2014, and 2013, is comprised of the following:

   
Three months ended
September 30,
    
Nine months ended
September 30,
  
   
2014
    
2013
    
2014
    
2013
  
   
(Thousands of Dollars)
  
Company’s share of income (loss) reported by AMAK
  
$
(680
)
  
$
965
    
$
(1,698
)
  
$
3,991
  
Amortization of difference between Company’s investment in AMAK and Company’s share of net assets of AMAK
    
337
      
337
      
1,011
      
1,010
  
Gain from additional equity issuance by AMAK
    
-
      
-
      
-
      
3,997
  
Equity in income (loss) of AMAK
  
$
(343
)
  
$
1,302
    
$
(687
)
  
$
8,998
  

At December 31, 2013, we had an outstanding advance to AMAK of approximately $0.5 million for interim funding on a short term basis.  The entire balance owed was paid in the second quarter of 2014; therefore, at September 30, 2014, there was no amount outstanding.

See our Annual Report on Form 10-K for the year ended December 31, 2013, for additional information.