Edgar Filing: ADAMS RESOURCES & ENERGY, INC.

form_10q.htm

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM 10-Q

x	Quarterly report pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2011

Commission File Number 1-7908

ADAMS RESOURCES & ENERGY, INC.

(Exact name of Registrant as specified in its charter)

Delaware		74-1753147
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

4400 Post Oak Pkwy Ste 2700 , Houston, Texas 77027

(Address of principal executive office & Zip Code)

Registrant's telephone number, including area code (713) 881-3600

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 o

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 o

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 definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 126-2 of the Exchange Act. (Check one)

Large accelerated filer o Accelerated filer o Non-accelerated filer x Smaller Reporting Company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES o NO x

A total of 4,217,596 shares of Common Stock were outstanding at August 12, 2011.

PART 1 – FINANCIAL INFORMATION

Item 1. Financial Statements

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

	Six Months Ended						Three Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
REVENUES:
Marketing	$	1,480,678		$	1,047,518		$	802,320		$	529,428
Transportation		34,149			28,084			18,076			14,973
Oil and gas		6,571			5,324			3,814			2,740
		1,521,398			1,080,926			824,210			547,141
COSTS AND EXPENSES:
Marketing		1,466,847			1,040,099			795,870			526,337
Transportation		27,350			22,845			14,114			11,709
Oil and gas operations		3,835			2,799			2,033			1,595
Oil and gas property sale (gain)		(2,833	)		-			-			-
General and administrative		4,597			4,402			2,488			2,138
Depreciation, depletion and amortization		7,320			5,550			3,898			2,706
		1,507,116			1,075,695			818,403			544,485

Operating earnings		14,282			5,231			5,807			2,656

Other income (expense):
Interest income		91			30			43			19
Interest expense		(7	)		(31	)		(7	)		-

Earnings before income taxes		14,366			5,230			5,843			2,675

Income tax (provision)		(5,194	)		(1,751	)		(2,254	)		(990	)

Net earnings	$	9,172		$	3,479		$	3,589		$	1,685

EARNINGS PER SHARE:
Basic and diluted net earnings per common share	$	2.17		$	.82		$	.85		$	.39


DIVIDENDS PER COMMON SHARE	$	-		$	-		$	-		$	-

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

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

	June 30,			December 31,
	2011			2010
ASSETS
Current assets:
Cash and cash equivalents	$	27,939		$	29,032
Marketable securities		8,748			-
Accounts receivable, net of allowance for doubtful
accounts of $1,351 and $1,064, respectively		212,748			190,169
Inventories		20,393			14,591
Fair value contracts		7,805			2,764
Income tax receivable		407			2,316
Prepayments		8,480			8,104

Total current assets		286,520			246,976

Property and Equipment
Marketing		33,850			25,407
Transportation		51,096			43,131
Oil and gas (successful efforts method)		84,415			73,011
Other		192			188
		169,553			141,737

Less – Accumulated depreciation, depletion and amortization		(99,991	)		(94,148	)
		69,562			47,589
Other Assets:
Oil and gas property held for sale		-			3,389
Deferred income tax asset		275			374
Cash deposits and other		3,031			2,977
	$	359,388		$	301,305

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	237,450		$	200,763
Accounts payable – related party		95			9
Fair value contracts		6,011			1,478
Accrued and other liabilities		6,824			3,894
Current deferred income taxes		916			854
Total current liabilities		251,296			206,998

Other Liabilities:
Asset retirement obligations		1,412			1,390
Deferred taxes and other liabilities		7,353			2,762
		260,061			211,150
Commitments and Contingencies (Note 5)

Shareholders’ Equity:
Preferred stock - $1.00 par value, 960,000 shares
authorized, none outstanding		-			-
Common stock - $.10 par value, 7,500,000 shares
authorized, 4,217,596 shares outstanding		422			422
Contributed capital		11,693			11,693
Retained earnings		87,212			78,040
Total shareholders’ equity		99,327			90,155
	$	359,388		$	301,305

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

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Six Months Ended
	June 30,
	2011			2010
CASH PROVIDED BY OPERATIONS:
Net earnings	$	9,172		$	3,479
Adjustments to reconcile net earnings to net cash
from operating activities -
Depreciation, depletion and amortization		7,320			5,550
Property sale (gains)		(3,368	)		(119	)
Dry hole costs incurred		511			303
Impairment of oil and gas properties		562			789
Provision for doubtful accounts		287			2
Deferred income taxes		4,761			361
Net change in fair value contracts		(508	)		158
Decrease (increase) in accounts receivable		(22,866	)		11,171
Decrease (increase) in inventories		(5,802	)		3,710
Decrease (increase) in income tax receivable		1,909			967
Decrease (increase) in prepayments		(376	)		4,396
Increase (decrease) in accounts payable		36,681			(1,851	)
Increase (decrease) in accrued liabilities		2,379			421
Other changes, net		(91	)		32

Net cash provided by operating activities		30,571			29,369

INVESTING ACTIVITIES:
Property and equipment additions		(30,262	)		(8,025	)
Insurance and state collateral (deposits) refunds		-			(93	)
Proceeds from property sales		7,296			123
Investment in marketable securities		(11,098	)		-
Redemption of marketable securities		2,400			-

Net cash (used in) investing activities		(31,664	)		(7,995	)

Increase (decrease) in cash and cash equivalents		(1,093	)		21,374

Cash and cash equivalents at beginning of period		29,032			16,806

C Cash and cash equivalents at end of period	$	27,939		$	38,180

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

ADAMS RESOURCES & ENERGY, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - Basis of Presentation

The accompanying condensed consolidated financial statements are unaudited but, in the opinion of the Company's management, include all adjustments (consisting of normal recurring accruals) necessary for the fair presentation of its financial position at June 30, 2011, its results of operations for the three and six-month periods ended June 30, 2011 and 2010 and its cash flows for the six months ended June 30, 2011 and 2010. Certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to Securities and Exchange Commission rules and regulations. The impact on the accompanying unaudited condensed consolidated financial statements of events occurring after June 30, 2011 has been evaluated through the date these financials were issued.

Although the Company believes the disclosures made are adequate to make the information presented not misleading, it is suggested that these consolidated financial statements be read in conjunction with the financial statements, and the notes thereto, included in the Company's latest annual report on Form 10-K. The interim statement of operations is not necessarily indicative of results to be expected for a full year.

Note 2 - Summary of Significant Accounting Policies

Nature of Operations and Principles of Consolidation

The Company is engaged in the business of crude oil, natural gas and petroleum products marketing, as well as tank truck transportation of liquid chemicals and oil and gas exploration and production. Its primary area of operation is within a 1,000 mile radius of Houston, Texas. The accompanying consolidated financial statements include the accounts of Adams Resources & Energy, Inc., a Delaware corporation, and its wholly owned subsidiaries (the "Company") after elimination of all significant intercompany accounts and transactions.

Cash and Cash Equivalents

Cash and cash equivalents include any Treasury bill, commercial paper, money market funds or federal funds with maturity of 90 days or less. Cash and cash equivalents are maintained with major financial institutions and such deposits may exceed the amount of federally backed deposit insurance. While the Company regularly monitors the financial stability of such institutions, cash and cash equivalents ultimately remain at risk subject to the financial viability of such institutions.

Marketable Securities

Marketable securities consist of investment grade corporate bonds traded in liquid markets. They are held for the purpose of investing in liquid funds and are not generally intended to be retained on a long-term basis. Marketable securities are initially recognized at acquisition costs inclusive of transaction costs and are classified as trading securities. In subsequent periods marketable securities are valued at fair value. Changes of these fair values are recognized as gains or losses in the accompanying statement of operations under the caption “Costs and Expenses – Marketing”. Interest on marketable securities is recognized directly in the statement of operations during the period incurred.

Inventories

Crude oil and petroleum product inventories are carried at the lower of average cost or market price. Petroleum products inventory includes gasoline, lubricating oils and other petroleum products purchased for resale. Components of inventory are as follows (in thousands):

	June 30,		December 31,
	2011		2010
Crude oil	$	18,146	$	12,909
Petroleum products		2,247		1,682

	$	20,393	$	14,591

Prepayments

The components of prepayments and other are as follows (in thousands):

	June 30,		December 31,
	2011		2010

Cash collateral deposits for commodity purchases	$	5,245	$	5,150
Insurance premiums		2,713		1,954
Natural gas pipeline imbalances		73		330
Rents, license and other		449		670

	$	8,480	$	8,104

Property and Equipment

Expenditures for major renewals and betterments are capitalized, and expenditures for maintenance and repairs are expensed as incurred. Interest costs incurred in connection with major capital expenditures are capitalized and amortized over the lives of the related assets. When properties are retired or sold, the related cost and accumulated depreciation, depletion and amortization ("DD&A") is removed from the accounts and any gain or loss is reflected in earnings.

Oil and gas exploration and development expenditures are accounted for in accordance with the successful efforts method of accounting. Direct costs of acquiring developed or undeveloped leasehold acreage, including lease bonus, brokerage and other fees, are capitalized. Exploratory drilling costs are initially capitalized until the properties are evaluated and determined to be either productive or nonproductive. Such evaluations are made on a quarterly basis. If an exploratory well is determined to be nonproductive, the costs of drilling the well are charged to expense. Costs incurred to drill and complete development wells, including dry holes, are capitalized. As of June 30, 2011, the Company had no unevaluated or suspended exploratory drilling costs.

Depreciation, depletion and amortization of the cost of proved oil and gas properties is calculated using the unit-of-production method. The reserve base used to calculate depreciation, depletion and amortization for leasehold acquisition costs and the cost to acquire proved properties is the sum of proved developed reserves and proved undeveloped reserves. For lease and well equipment, development costs and successful exploration drilling costs, the reserve base includes only proved developed reserves. All other property and equipment is depreciated using the straight-line method over the estimated average useful lives of three to twenty years.

The Company periodically reviews its long-lived assets for impairment whenever there is evidence that the carrying value of such assets may not be recoverable. Any impairment recognized is permanent and may not be restored. Producing oil and gas properties are reviewed quarterly for impairment triggers on a field-by-field basis. For properties requiring impairment, the fair value is estimated based on an internal discounted cash-flow model. Cash flows are developed based on estimated future production and prices and then discounted using an internal rate of return consistent with that used by the Company in evaluating cash flows for other assets of a similar nature. For the six-month periods ended June 30, 2011 and 2010 there were zero and $6,000 in impairment provisions on producing oil and gas properties, respectively. There were no impairment provisions for the three-month periods ended June 30, 2011 and 2010, respectively.

On a quarterly basis, management also evaluates the carrying value of non-producing oil and gas properties and may deem them impaired for lack of drilling activity. Accordingly, impairment provisions on non-producing properties totaling $562,000 and $783,000 were recorded for the six-month periods ended June 30, 2011 and 2010, respectively. Such provisions totaled $335,000 and $382,000 for the three-month periods ended June 30, 2011 and 2010. For non-producing properties, impairments are determined based on management’s knowledge of current geological evaluations, drilling results and activity in the area and intent to drill as it relates to the remaining term of the underlying oil and gas leasehold interest.

Cash Deposits and Other Assets

The Company has established certain deposits to support its participation in its liability insurance program and remittance of state crude oil severance taxes and other state collateral deposits. Insurance collateral deposits are invested at the discretion of the Company’s insurance carrier and such investments primarily consist of intermediate term federal government bonds and bonds backed by federal agencies. Components of cash deposits and other assets are as follows (in thousands):

	June 30,		December 31,
	2011		2010
Insurance collateral deposits	$	2,368	$	2,291
State collateral deposits		166		166
Materials and supplies		497		520
	$	3,031	$	2,977

Revenue Recognition

Commodity purchase and sale contracts utilized by the Company’s marketing businesses qualify as derivative instruments. Further, all natural gas, as well as certain specifically identified crude oil purchase and sale contracts, are designated as trading activities. From the time of contract origination, such trading activity contracts are marked-to-market and recorded on a net revenue basis in the accompanying financial statements.

Substantially all crude oil and refined products purchase and sale contracts qualify and are designated as non-trading activities and the Company elects the normal purchases and sales methodology for such activity. For normal purchase and sale activities, the Company’s customers are invoiced monthly based upon contractually agreed upon terms and revenue is recognized in the month in which the physical product is delivered to the customer. Such sales are recorded gross in the financial statements because the Company takes title to and has risk of loss for the products, is the primary obligor for the purchase, establishes the sale price independently with a third party, and maintains credit risk associated with the sale of the product.

Certain crude oil contracts may be with a single counterparty to provide for similar quantities of crude oil to be bought and sold at different locations. These contracts are entered into for a variety of reasons, including effecting the transportation of the commodity, to minimize credit exposure, and/or to meet the competitive demands of the customer. Such buy/sell arrangements are reflected on a net revenue basis in the accompanying financial statements.

Transportation customers are invoiced, and the related revenue is recognized, as the service is provided. Oil and gas revenue from the Company’s interests in producing wells is recognized as title and physical possession of the oil and gas passes to the purchaser.

Concentration of Credit Risk

The Company’s largest customers consist of large multinational integrated oil companies and utilities. In addition, the Company transacts business with independent oil producers, major chemical concerns, crude oil and natural gas trading companies and a variety of commercial energy users. Within this group of customers the Company generally derives up to 50 percent of its revenues from two to three large crude oil refining concerns. While the Company has ongoing established relationships with certain domestic refiners of crude oil, alternative markets are readily available as the Company supplies less than one percent of U. S. domestic refiner demand. As a fungible commodity delivered to major Gulf Coast supply points, the Company’s crude oil sales can be readily delivered to alternative end markets. Management believes that a loss of any of those customers where it currently derives more than 10 percent of its revenues would not have a material adverse effect on the Company’s operations.

Accounts receivable associated with crude oil and natural gas marketing activities comprise approximately 90 percent of the Company’s total receivables and industry practice requires payment for such sales to occur within 25 days of the month following a transaction. The Company’s customer makeup, credit policies and the relatively short duration of receivables mitigate the uncertainty typically associated with receivables management.

Letter of Credit Facility

The Company maintains a Credit and Security Agreement with Wells Fargo Bank to provide a $40 million stand-by letter of credit facility that is used to support the Company’s crude oil and natural gas purchases within the marketing segment. This facility is collateralized by the eligible accounts receivable within those operations. Stand-by letters of credit issued totaled $31.4 million and $23.9 million as of June 30, 2011 and December 31, 2010, respectively. The issued stand-by letters of credit are cancelled as the underlying purchase obligations are satisfied by cash payment when due. The letter of credit facility places certain restrictions on the Company’s Gulfmark Energy, Inc. and Adams Resources Marketing, Ltd. subsidiaries. Such restrictions included the maintenance of a combined 1.1 to 1.0 current ratio as defined under the Credit and Security Agreement and the maintenance of positive net earnings excluding inventory valuation changes, as defined, among other restrictions. The Company is currently in compliance with all such financial covenants.

Statement of Cash Flows

Interest paid totaled $7,000 and $31,000 during the six-month periods ended June 30, 2011 and 2010, respectively, while taxes paid during these same periods totaled $508,000 and $297,000, respectively. The Company also received state and federal income tax refunds totaling $2,094,000 during the first six months of 2011. Non-cash investing activities for property and equipment in accounts payable were $3,511,000 and $532,000 as of June 30, 2011 and 2010, respectively and $2,868,000 and $440,000 as of December 31, 2010 and 2009, respectively. There were no significant non-cash financing activities in any of the periods reported.

Earnings Per Share

Earnings per share are based on the weighted average number of shares of common stock and potentially dilutive common stock shares outstanding during the period. The weighted average number of shares outstanding was 4,217,596 for 2011 and 2010. There were no potentially dilutive securities during those periods.

Share-Based Payments

During the periods presented herein, the Company had no stock-based employee compensation plans, nor any other share-based payment arrangements.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Examples of significant estimates used in the accompanying consolidated financial statements include the oil and gas reserve volumes that form the foundation for (1) calculating depreciation, depletion and amortization and (2) deriving cash flow estimates to assess impairment triggers or estimated values associated with oil and gas property, revenue accruals, the provision for bad debts, insurance related accruals, income taxes, contingencies and valuation of fair value contracts.

Income Taxes

Income taxes are accounted for using the asset and liability method. Under this approach, deferred tax assets and liabilities are recognized based on anticipated future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective income tax basis.

Use of Derivative Instruments

The Company’s marketing segment is involved in the purchase and sale of crude oil and natural gas. The Company seeks to make a profit by procuring such commodities as they are produced and then delivering such products to the end use or intermediate use marketplace. As is typical for the industry, such transactions are made pursuant to the terms of forward month commodity purchase and/or sale contracts. These contracts meet the definition of a derivative instrument and therefore, the Company accounts for such contracts at fair value, unless the normal purchase and sale exception is applicable. The Company’s objective of entering into commodity contracts is not to manage commodity price risk nor is the objective to trade or speculate on commodity prices. Rather, such underlying contracts are standard for the industry and are the governing document for the Company’s crude oil and natural gas wholesale distribution businesses. The accounting methodology utilized by the Company for its commodity contracts is further discussed below under the caption “Fair Value Measurements”.

None of the Company’s derivative instruments have been designated as hedging instruments and the estimated fair value of forward month commodity contracts (derivatives) is reflected in the accompanying Unaudited Condensed Consolidated Balance Sheet as of June 30, 2011 as follows (in thousands):

	Balance Sheet Location and Amount
	Current			Other		Current			Other
	Assets			Assets		Liabilities			Liabilities
Asset Derivatives
- Fair Value Forward Hydrocarbon Commodity
Contracts at Gross Valuation	$	9,885		$	-	$	-		$	-

Liability Derivatives
- Fair Value Forward Hydrocarbon Commodity
Contracts at Gross Valuation		-			-		8,091			-

Less Counterparty Offsets		(2,080	)		-		(2,080	)		-

As Reported Fair Value Contracts	$	7,805		$	-	$	6,011		$	-

Forward month commodity contracts (derivatives) are reflected in the accompanying Unaudited Condensed Consolidated Balance Sheet as of December 31, 2010 as follows (in thousands):

	Balance Sheet Location and Amount
	Current			Other		Current			Other
	Assets			Assets		Liabilities			Liabilities
Asset Derivatives
- Fair Value Forward Hydrocarbon Commodity
Contracts at Gross Valuation	$	8,094		$	-	$	-		$	-

Liability Derivatives
- Fair Value Forward Hydrocarbon Commodity
Contracts at Gross Valuation		-			-		6,808			-

Less Counterparty Offsets		(5,330	)		-		(5,330	)		-

As Reported Fair Value Contracts	$	2,764		$	-	$	1,478		$	-

The Company only enters into commodity contracts with credit worthy counterparties or obtains collateral support for such activities. No credit loss provision applies to the Company’s forward commodity contract valuations. As of June 30, 2011 and December 31, 2010, the Company was not holding nor has it posted any collateral to support its forward month fair value derivative activity. The Company is not subject to any credit-risk related trigger events.

Forward month commodity contracts (derivatives) are reflected in the accompanying Unaudited Condensed Consolidated Statement of Operations for the six and three months ended June 30, 2011 as follows (in thousands):

	Earnings (Loss)		Earnings (Loss)
	Six Months Ended		Three Months Ended
	June 30,		June 30,
Location	2011	2010	2011	2010

Revenues – marketing	$ 508	$ (158)	$ (306)	$ (172)

Fair Value Measurements

The carrying amount reported in the Unaudited Condensed Consolidated Balance Sheet for cash and cash equivalents, accounts receivable and accounts payable approximates fair value because of the immediate or short-term maturity of these financial instruments. Marketable securities are recorded at fair value based on market quotations from actively traded liquid markets.

Fair value contracts consist of derivative financial instruments and are recorded as either an asset or liability measured at its fair value. Changes in fair value are recognized immediately in earnings unless the derivatives qualify for, and the Company elects, cash flow hedge accounting. The Company had no contracts designated for hedge accounting during any current reporting periods.

Fair value estimates are based on assumptions that market participants would use when pricing an asset or liability and the Company uses a fair value hierarchy of three levels that prioritizes the information used to develop those assumptions. Currently, for all items presented herein, the Company utilizes a market approach to valuing its contracts. On a contract by contract, forward month by forward month basis, the Company obtains observable market data for valuing its contracts. The fair value hierarchy gives the highest priority to quoted prices in active markets and the lowest priority to unobservable data. The fair value hierarchy is summarized as follows:

Level 1 – quoted prices in active markets for identical assets or liabilities that may be accessed at the measurement date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. For Level 1 valuation of marketable securities, the Company utilizes market quotations provided by its primary financial institution and for the valuation of derivative financial instruments the Company utilizes the New York Mercantile Exchange “NYMEX”.

Level 2 – (a) quoted prices for similar assets or liabilities in active markets, (b) quoted prices for identical assets or liabilities but in markets that are not actively traded or in which little information is released to the public, (c) observable inputs other than quoted prices and (d) inputs derived from observable market data. Source data for Level 2 inputs include information provided by the New York Mercantile Exchange “NYMEX”, Intercontinental Exchange “ICE”, published price data and indices, third party price survey data and broker provided forward price statistics.

Level 3 – Unobservable market data inputs for assets or liabilities.

As of June 30, 2011, the Company’s fair value assets and liabilities are summarized and categorized as follows (in thousands):

	Market Data Inputs
	Level 1		Level 2			Level 3
	Quoted Prices		Observable			Unobservable		Total
Marketable Securities	$	8,748	$	-		$	-	$	8,748
Derivatives – Forward Hydrocarbon
Commodity Contracts
- Current assets		110		7,695			-		7,805
- Current liabilities		-		(6,011	)		-		(6,011	)
Net Value	$	8,858	$	1,684		$	-	$	10,542

As of December 31, 2010, the Company’s fair value assets and liabilities are summarized and categorized as follows (in thousands):

	Market Data Inputs
	Level 1			Level 2			Level 3
	Quoted Prices			Observable			Unobservable		Total
Derivatives – Forward Hydrocarbon Commodity Contracts
- Current assets	$			$	2,764		$	-	$	2,764
- Current liabilities		(118	)		(1,360	)		-		(1,478	)
Net Value	$	(118	)	$	1,404		$	-	$	1,286

When determining fair value measurements, the Company makes credit valuation adjustments to reflect both its own nonperformance risk and its counterparty’s nonperformance risk. When adjusting the fair value of derivative contracts for the effect of nonperformance risk, the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, and guarantees are considered. Credit valuation adjustments utilize Level 3 inputs, such as credit scores to evaluate the likelihood of default by the Company or its counterparties. As of June 30, 2011 and December 31, 2010, credit valuation adjustments were not significant to the overall valuation of the Company’s fair value contracts. As a result, applicable fair value assets and liabilities in their entirety are classified in Level 2 of the fair value hierarchy.

Recent Accounting Pronouncement

Management believes the impact of other recently issued standards and updates, which are not yet effective, will not have a material impact on the Company’s consolidated financial position, results of operations or cash flows upon adoption.

Note 3 – Segment Reporting

The Company is engaged in the business of crude oil, natural gas and petroleum products marketing as well as tank truck transportation of liquid chemicals and oil and gas exploration and production. Information concerning the Company’s various business activities is summarized as follows (in thousands):

- Six Month Comparison

			Segment		Depreciation		Property and
			Operating		Depletion and		Equipment
	Revenues		Earnings		Amortization		Additions
Period Ended June 30, 2011
Marketing
- Crude Oil	$	1,397,971	$	10,940	$	1,538	$	8,628
- Natural gas		2,693		1,080		2		56
- Refined products		80,014		59		212		55
Marketing Total		1,480,678		12,079		1,752		8,739
Transportation		34,149		4,925		1,874		9,128
Oil and gas		6,571		1,875		3,694		12,395
	$	1,521,398	$	18,879	$	7,320	$	30,262
Period Ended June 30, 2010
Marketing
- Crude Oil	$	979,688	$	4,446	$	1,056	$	1,678
- Natural gas		5,876		1,406		42		29
- Refined products		61,954		215		254		143
Marketing Total		1,047,518		6,067		1,352		1,850
Transportation		28,084		3,014		2,225		83
Oil and gas		5,324		552		1,973		6,092
	$	1,080,926	$	9,633	$	5,550	$	8,025

- Three Month Comparison

			Segment			Depreciation		Property and
			Operating			Depletion and		Equipment
	Revenues		Earnings			Amortization		Additions
Period Ended June 30, 2011
Marketing
- Crude Oil	$	754,288	$	4,613		$	810	$	5,168
- Natural gas		1,360		561			1		28
- Refined products		46,672		359			106		49
Marketing Total		802,320		5,533			917		5,245
Transportation		18,076		2,933			1,029		5,001
Oil and gas		3,814		(171	)		1,952		5,040
	$	824,210	$	8,295		$	3,898	$	15,286
Period Ended June 30, 2010
Marketing
- Crude Oil	$	492,109	$	1,403		$	558	$	251
- Natural gas		3,190		801			1		29
- Refined products		34,129		201			127		67
Marketing Total		529,428		2,405			686		347
Transportation		14,973		2,153			1,111		67
Oil and gas		2,740		236			909		3,804
	$	547,141	$	4,794		$	2,706	$	4,218

Segment operating earnings reflect revenues net of operating costs and depreciation, depletion and amortization. Segment earnings reconcile to earnings before income taxes as follows (in thousands):

	Six months ended						Three months ended
	June 30,						June 30,
	2011			2010			2011			2010
Segment operating earnings (loss)	$	18,879		$	9,633		$	8,295		$	4,794
- General and administrative		(4,597	)		(4,402	)		(2,488	)		(2,138	)
Operating earnings		14,282			5,231			5,807			2,656
- Interest income		91			30			43			19
- Interest expense		(7	)		(31	)		(7	)		-
Earnings before income taxes	$	14,366		$	5,230		$	5,843		$	2,675

Identifiable assets by industry segment are as follows (in thousands):

	June 30,		December 31,
	2011		2010
Marketing
- Crude oil	$	230,956	$	184,299
- Natural gas		17,483		19,948
- Refined products		16,045		11,594
Marketing Total		264,484		215,841
Transportation		25,475		17,378
Oil and gas		36,452		32,563
Other		32,977		35,523
	$	359,388	$	301,305

Intersegment sales are insignificant. Other identifiable assets are primarily corporate cash and assets not identified with any specific segment of the Company’s business. All sales by the Company occurred in the United States.

Note 4 - Transactions with Affiliates

Mr. K. S. Adams, Jr., Chairman and Chief Executive Officer, and certain of his family partnerships and affiliates, have participated as working interest owners with the Company’s subsidiary, Adams Resources Exploration Corporation. Mr. Adams and such affiliates participate on terms similar to those afforded other non-affiliated working interest owners. Such related party transactions generally result after the Company has first identified oil and gas prospects of interest. Typically the available dollar commitment to participate in such transactions is greater than the amount management is comfortable putting at risk. In such event, the Company first determines the percentage of the transaction it wants to obtain, which allows a related party to participate in the investment to the extent there is excess available. In those instances where there was no excess availability there has been no related party participation. Similarly, related parties are not required to participate, nor is the Company obligated to offer any such participation to a related or other party. When such related party transactions occur, they are individually reviewed and approved by the Audit Committee comprised of the independent directors on the Company’s Board of Directors. For the first half of 2011 and 2010, the Company’s investment commitments totaled approximately $12.4 million and $6.1 million, respectively, in those oil and gas projects where a related party was also participating in such investments. As of June 30, 2011 and December 31, 2010, the Company owed a combined net total of $95,000 and $9,000, respectively, to these related parties. In connection with the operation of certain oil and gas properties, the Company also charges such related parties for administrative overhead primarily as prescribed by the Council of Petroleum Accountants Society (“COPAS”) Bulletin 5. Such overhead recoveries totaled $84,000 and $78,000 in the six-month periods ended June 30, 2011 and 2010, respectively.

The Company also enters into certain transactions in the normal course of business with other affiliated entities including direct cost reimbursement for shared phone and secretarial services. For the six-month period ended June 30, 2011 and 2010, the affiliated entities charged the Company $25,000 and $21,000, respectively, of expense reimbursement and the Company charged the affiliates $59,000 and $59,000, respectively, for such expense reimbursements.

Note 5 - Commitments and Contingencies

Under certain of the Company’s automobile and workers compensation insurance policies, the Company can either receive a return of premium paid or be assessed for additional premiums up to pre-established limits. Additionally, under the policies in certain instances the risk of insured losses is shared with a group of similarly situated entities. Estimated loss accruals for potentially unknown losses are developed using actual loss histories and other relevant information. As of June 30, 2011, management has appropriately recognized estimated expenses and liabilities related to the program.

From time to time as incidental to its operations, the Company becomes involved in various lawsuits and/or disputes. Primarily as an operator of an extensive trucking fleet, the Company is a party to motor vehicle accidents, worker compensation claims and other items of general liability as would be typical for the industry. Management of the Company is presently unaware of any claims against the Company that are either outside the scope of insurance coverage, or that may exceed the level of insurance coverage, and could potentially represent a material adverse effect on the Company’s financial position or results of operations.

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

Results of Operations

- Marketing

Marketing segment revenues, operating earnings and depreciation were as follows (in thousands):

	Six Months Ended				Three Months Ended
	June 30,				June 30,
	2011		2010		2011		2010
Revenues
Crude oil	$	1,397,971	$	979,688	$	754,288	$	492,109
Natural gas		2,693		5,876		1,360		3,190
Refined products		80,014		61,954		46,672		34,129
Total	$	1,480,678	$	1,047,518	$	802,320	$	529,428

Operating Earnings
Crude oil	$	10,940	$	4,446	$	4,613	$	1,403
Natural gas		1,080		1,406		561		801
Refined products		59		215		359		201
Total	$	12,079	$	6,067	$	5,533	$	2,405

Depreciation
Crude oil	$	1,538	$	1,056	$	810	$	558
Natural gas		2		42		1		1
Refined products		212		254		106		127
Total	$	1,752	$	1,352	$	917	$	686

Supplemental volume and price information is as follows:

	Six Months Ended				Three Months Ended
	June 30,				June 30,
	2011		2010		2011		2010
Field Level Purchase Volumes – Per day (1)
Crude oil – barrels		77,051		68,035		78,637		66,321
Natural gas – mmbtu’s		189,960		268,474		175,325		294,624

Average Purchase Price
Crude oil – per barrel	$	97.37	$	75.91	$	102.50	$	75.42
Natural Gas – per mmbtu’s	$	4.17	$	4.55	$	4.25	$	4.17

_____________________________

(1) Reflects the volume purchased from third parties at the oil and gas field level.

Crude oil revenues were increased in the current comparative six-month and three-month periods reflecting increased prices and volumes as shown in the table above. Such increases resulted from the worldwide pricing scenario and increased production rates in the developing Eagle Ford shale trend of South Texas. The direction of change in price was also increasing during 2011 as the average acquisition cost of crude oil moved from the $88 per barrel level at the beginning of the year to the $99 per barrel level for June 2011. This event produced an inventory liquidation gain of $2,341,000 for the first six months of 2011 with such gain encompassing a $830,000 valuation loss during the second quarter of 2011 when crude prices reversed and were declining. Comparatively, overall during the first half of 2010, inventory prices were flat with increasing prices during the first quarter offset by declining prices during the second quarter. As of June 30, 2011 the Company held 181,712 barrels of crude oil inventory at an average price of $99.86 per barrel.

The impact of inventory liquidation gains and losses on crude oil operating earnings summarize as follows:

	Six Months Ended						Three Months Ended
	June 30,						June 30,
	2011			2010			2011		2010
As Reported Operating
Earnings	$	10,940		$	4,446		$	4,613	$	1,403

Inventory Liquidation
(Gains) Losses		(2,341	)		(46	)		830		1,221

Comparative Operating
Earnings	$	8,599		$	4,400		$	5,443	$	2,624

In addition to inventory valuation gains, per unit crude oil margins also improved in 2011, enhancing current operating earnings. Unit margins widened primarily because South Texas sourced crude oil is currently selling at a discount to the world oil prices due to its relative abundance in relation to the infrastructure available to deliver such oil to market. In addition, during the second quarter of 2011, the Company completed construction of a barge terminal facility at the Port of Victoria, Texas. This facility allows the Company to increase margins on production in the area by moving it into more advantageous markets.

Natural gas sales are reported net of underlying natural gas purchase costs and thus reflect gross margin. As shown above, such margins were reduced in the first half of 2011 as average field level purchase volumes were off twenty-nine percent for the period (see table above). Current volumes have declined because producers of natural gas curtailed drilling activity particularly in the non-shale areas due to low natural gas prices. The Company’s primary source of natural gas supply is the non-shale areas of Texas, Louisiana and the Gulf of Mexico. In addition, development of the nation’s natural gas infrastructure including more diverse areas of production and expanded pipeline and storage capacity have served to reduce purchase opportunities and per unit margins.

Historically, prices received for crude oil and natural gas as well as derivative products have been volatile and unpredictable with price volatility expected to continue.

- Transportation

Transportation segment revenues, earnings and depreciation are as follows (in thousands):

	Six Months Ended							Three Months Ended
	June 30,				Increase			June 30,				Increase
	2011		2010		(Decrease)			2011		2010		(Decrease)

Revenues	$	34,149	$	28,084		22	%	$	18,076	$	14,973		21	%

Operating earnings	$	4,925	$	3,014		63	%	$	2,933	$	2,153		36	%

Depreciation	$	1,874	$	2,225		(16	)%	$	1,029	$	1,111		(7	)%

Revenues and operating results improved for the transportation segment in 2011 due to increased customer demand. The Company’s customers predominately consist of the domestic petrochemical industry and demand for such products has substantially recovered in recent periods. Serving to improve customer demand was a recovering United States economy, relatively low natural gas prices and improved export demand for petrochemicals. In addition, during the recent economic downturn, the trucking industry reduced capacity by retiring older units without replacement. Following the recent upturn in demand, strained industry capacity has allowed rate increases and improved overall profitability. As transportation revenues increase or decrease, operating earnings will typically increase or decrease at an accelerated rate. This trend exists because the fixed cost components of the Company’s operation do not vary with changes in revenues. As currently configured, operating earnings project at break-even levels when quarterly revenues average $12.6 million. Above that level, operating earnings will grow and below that level, losses result.

Transportation segment depreciation decreased in 2011 as older model units became fully depreciated. Due to the age of the transportation fleet and the current market demand, 75 replacement tractors costing approximately $9.1 million were added to the fleet during the first half of 2011. An additional 75 tractors at an approximate cost of $9 million are planned for the second half of 2011.

- Oil and Gas

Oil and gas segment revenues and operating earnings are primarily a function of crude oil and natural gas prices and volumes. Comparative amounts for revenues, operating earnings and depreciation and depletion are as follows (in thousands):

	Six Months Ended								Three Months Ended
	June 30,					Increase			June 30,					Increase
	2011			2010		(Decrease)			2011			2010		(Decrease)
Revenues	$	6,571		$	5,324		23	%	$	3,814		$	2,740		39	%
Operating earnings (loss),
excluding gains from property sale	$	(958	)	$	552		(274	)%	$	(171	)	$	236		(172	)%

Depreciation and depletion	$	3,694		$	1,973		87	%	$	1,952		$	909		115	%

Oil and gas segment revenues improved due to increased natural gas volumes as new drilling results came on line in 2011. Operating earnings declined in 2011 as depreciation and depletion expense increased due to higher capitalized cost amortization in the current period following active drilling in 2010 and 2011. Further, dry hole expense was increased in 2011 as shown in the table below.

Production volumes and price information is as follows (in thousands):

	Six Months Ended				Three Months Ended
	June 30,				June 30,
	2011		2010		2011		2010
Crude Oil
Volume – barrels		23,492		26,003		12,700		12,783
Average price per barrel	$	101.72	$	76.30	$	104.82	$	75.82

Natural gas
Volume – mcf		856,670		642,186		426,712		350,047
Average price per mcf	$	4.88	$	5.20	$	5.82	$	5.06

As discussed further below, certain oil and gas properties were sold during the first quarter of 2011. Excluding the sales volumes from the properties sold, comparative production volume information would be as follows:

	Six Months Ended				Three Months Ended
	June 30,				June 30,
	2011		2010		2011		2010
Crude Oil
Volume – barrels		22,611		23,193		12,700		11,384

Natural gas
Volume – mcf		810,824		487,402		426,712		272,262

Comparative exploration costs were as follows (in thousands):

	Six Months Ended				Three Months Ended
	June 30,				June 30,
	2011		2010		2011		2010
Dry hole expense	$	511	$	303	$	149	$	282
Prospect impairments		562		789		335		382
Seismic and geological		193		23		162		5
Total	$	1,266	$	1,115	$	646	$	669

During the first six months of 2011, the Company participated in the drilling of 29 successful wells with five dry holes. Additionally, the Company has an interest in 30 wells that were in process on June 30, 2011. Evaluation on the in-process wells is anticipated during the third quarter of 2011. Participation in the drilling of approximately 41 wells is planned for the remainder of 2011 on the Company’s prospect acreage in Texas, Kansas, Arkansas and Louisiana.

- Oil and Gas Property Sales

In January 2011, the Company completed the sale of its interest in certain producing oil and gas properties located in the on-shore Gulf Coast region of Texas. Proceeds from the sale totaled $6.2 million and the pre-tax gain from this transaction totaled $2,708,000. Total proved reserves sold were approximately 26,000 barrels of crude oil and 2,148,000 mcf of natural gas. Sales negotiations were conducted by the third party operator of the properties on behalf of all working interest owners and the transaction was completed with a separate third party investment entity. The Company’s proportionate interest in the transaction was approximately 5 percent and the Company elected to participate in the sale due to attractive pricing. Also during the first quarter of 2011, the Company sold a portion of its interest in certain non-producing oil and gas properties located in West Texas. Total proceeds from the sale were $329,000 and the Company recorded a $125,000 gain from this transaction. Proceeds from the sales will be used for general working capital purposes and the Company is continuing with oil and gas exploration operations in the vicinity of the properties sold.

- Outlook

The recently completed storage and barge terminal facilities at Port of Victoria, Texas enable the Company to capture enhanced margins from its South Texas crude oil purchases and the current outlook from this operation is for increased margins and volumes. Transportation results look to be stable and within the oil and gas segment, the Company anticipates additional wells coming on line during 2011 to boost volumes and revenues.

Liquidity and Capital Resources

The Company’s liquidity primarily derives from net cash provided by operating activities and such amount was $30,571,000 and $29,369,000, respectively, for each of the six-month periods ended June 30, 2011 and 2010. As of June 30, 2011 and December 31, 2010, the Company had no bank debt or other forms of debenture obligations. Cash and cash equivalents totaled $27,939,000 as of June 30, 2011, and such balances are maintained in order to meet the timing of day-to-day cash needs. As of June 30, 2011, the Company also maintained $8,748,000 of marketable short-term investment grade securities that may be used to provide additional liquidity. Working capital, the excess of current assets over current liabilities, totaled $35,224,000 as of June 30, 2011.

Capital expenditures during the first six months of 2011 included $17,867,000 for marketing and transportation equipment additions and $12,395,000 in property additions associated with oil and gas exploration and production activities. For the remainder of 2011, the Company anticipates expending an additional approximate $14 million on oil and gas exploration projects to be funded from operating cash flow and available working capital. In addition, approximately $9 million will be expended during the fourth quarter of 2011 for the purchase of 75 trucks-tractors for the transportation segment and approximately $2 million will be expended for the purchase of 17 tractors for the marketing segment with funding for such purchase from available cash flow. The units will serve to replace a like number of older model units.

From time to time, the Company may make cash prepayments to certain suppliers of crude oil and natural gas for the Company’s marketing operations. Such prepayments totaled $5,245,000 as of June 30, 2011 and such amounts will be recouped and advanced from month to month as the suppliers deliver product to the Company. The Company also requires certain counterparties to post cash collateral with the Company in order to support their purchases from the Company. Such cash collateral held by the Company totaled $4,884,000 as of June 30, 2011. Management believes current cash balances, together with expected cash generated from future operations and the ease of financing truck and trailer additions through leasing arrangements (should the need arise) will be sufficient to meet short-term and long-term liquidity needs.

The Company utilizes cash from operations to make discretionary investments in its oil and natural gas exploration, marketing and transportation businesses, which comprise substantially all of the Company’s investing cash outflows for each of the periods in this filing. The Company does not look to proceeds from property sales to fund its cash flow needs. Except for an approximate $7 million commitment for transportation equipment operating leases and storage tank terminal arrangements and office lease space, the Company’s future commitments and planned investments can be readily curtailed if operating cash flows contract.

Historically, the Company pays an annual dividend in the fourth quarter of each year. In December 2010, the Company paid a $.54 per common share or $2,277,000 dividend to its shareholders. The most significant item affecting future increases or decreases in liquidity is earnings from operations and such earnings are dependent on the success of future operations (see “Item 1A Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010).

Critical Accounting Policies and Use of Estimates

There has been no material changes to the Company’s “Critical Accounting Policies and Use of Estimates” disclosures that have occurred since the disclosures provided in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

There has been no material changes to the Company’s “Quantitative and Qualitative Disclosures about Market Risk” that have occurred since the disclosures provided in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.

Forward-Looking Statements –Safe Harbor Provisions

This quarterly report for the period ended June 30, 2011 contains certain forward-looking statements covered by the safe harbors provided under Federal securities law and regulations. To the extent such statements are not recitations of historical fact, forward-looking statements involve risks and uncertainties. In particular, statements included herein and/or in the Company’s latest annual report on Form 10-K under the captions (a) Production and Reserve Information, (b) Regulatory Status and Potential Environmental Liability, (c) Management’s Discussion and Analysis of Financial Condition and Results of Operations, (d) Critical Accounting Policies and Use of Estimates, (e) Quantitative and Qualitative Disclosures about Market Risk, (f) Income Taxes, (g) Concentration of Credit Risk, (h) Price Risk Management Activities, and (i) Commitments and Contingencies, among others, contain forward-looking statements. Where the Company expresses an expectation or belief regarding future results of events, such expression is made in good faith and believed to have a reasonable basis in fact. However, there can be no assurance that such expectation or belief will actually result or be achieved.

With the uncertainties of forward looking statements in mind, the reader should consider the risks discussed elsewhere in this report and other documents filed with the Securities and Exchange Commission from time to time and the important factors described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010, under “Item 1A Risk Factors” that could cause actual results to differ materially from those expressed in any forward-looking statement made by or on behalf of the Company.

Item 4. Disclosure Controls and Procedures

The Company maintains “disclosure controls and procedures” (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), that are designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and is accumulated and communicated to management, including the Company’s Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely discussions regarding required disclosure. As of the end of the period covered by this quarterly report, an evaluation was carried out under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that there is a reasonable assurance that the disclosure controls and procedures as of the end of the period covered by this report are effective to ensure that information required to be disclosed in the Company’s Exchange Act filings is recorded, processed, summarized and reported within the periods specified in the Securities and Exchange Commission’s rules and forms.

Changes in Internal Control over Financial Reporting.

There have not been any changes in the Company’s internal control over financial reporting during the fiscal quarter ended June 30, 2011 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

From time to time as incident to its operations, the Company becomes involved in various lawsuits and/or disputes. Primarily as an operator of an extensive trucking fleet, the Company may be a party to motor vehicle accidents, worker compensation claims or other items of general liability as would be typical for the industry. Management of the Company is presently unaware of any claims against the Company that are either outside the scope of insurance coverage, or that may exceed the level of insurance coverage, and could potentially represent a material adverse effect on the Company’s financial position or results of operations.

Item 1A. Risk Factors

There are no material changes in the Company’s risk factors from those disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.

Item 2.

- None

Item 3. - None

Item 4. - Removed and reserved

Item 5.

- None

Item 6. Exhibits

31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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

	ADAMS RESOURCES & ENERGY, INC
	(Registrant)



Date: August 12, 2011	By /s/K. S. Adams, Jr.
	K. S. Adams, Jr.
	Chief Executive Officer


	By /s/Frank T. Webster
	Frank T. Webster
	President & Chief Operating Officer


	By /s/Richard B. Abshire
	Richard B. Abshire
	Chief Financial Officer

EXHIBIT INDEX

Exhibit
Number	Description

* 31.1	Certificate of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

* 31.2	Certificate of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

* 32.1	Certificate of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

* 32.2	Certificate of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

* **101.INS	XBRL Instance Document

* **101.SCH	XBRL Schema Document

* **101.CAL	XBRL Calculation Linkbase Document

* **101.LAB	XBLR Label Linkbase Document
* **101.PRE	XBRL Presentation Linkbase Document

*	Exhibits filed herewith

Attached as Exhibit 101 to this report are the following documents formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Statements of Income – Three Months Ended June 30, 2011 and 2010 and Six Months Ended June 30, 2011 and 2010, (ii) the Consolidated Balance Sheets – June 30, 2011 and December 31, 2010, (iii) the Consolidated Statements of Cash Flows – Six Months Ended June 30, 2011 and 2010 and (iv) Notes to Consolidated Financial Statements.