RESTATEMENT OF FINANCIAL STATEMENTS

The Company restated its previously issued consolidated financial statements as of September 30, 2011 and for the three and nine months then ended, to correct errors in the accounting for intra-period tax expense. Specifically, the Company's third quarter 2011 tax provision calculations reflected the use of certain net operating loss carryforwards related to the 2000 tax year reflected in the Company's 2001 tax return (prepared by external advisors) relied on by the Company in connection with the preparation of the third quarter 2011 tax provision, that based on new information, were subsequently determined to be currently unsupported. Accordingly, the Company increased noncash tax expense by $1.7 million for the three and nine months ended September 30, 2011. The resulting offsetting adjustment was credited to additional paid-in capital, not taxes payable, and accordingly, does not reflect cash taxes payable.

The following tables summarize the effects of the restatement on the specific items presented in our historical consolidated financial statements previously included in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2011:



	Three Months Ended September 30, 2011						Nine Months Ended September 30, 2011
	As Previously Reported			As Restated			As Previously Reported			As Restated
Statements of Income Data:
Provision for income taxes	$	(182	)	$	(1,889	)	$	(7,636	)	$	(9,343	)
Net income attributable to Acacia Research Corporation	12,510			10,803			27,002			25,295

Net income per common share attributable to Acacia Research Corporation:
Basic earnings per share	$	0.30		$	0.26		$	0.69		$	0.65
Diluted earnings per share	$	0.29		$	0.25		$	0.66		$	0.62

Balance Sheets Data:
Additional paid-in capital							$	382,576		$	384,283
Accumulated deficit							(59,189		)	(60,896		)

No financial statements prior to the financial statements for the quarterly period ended September 30, 2011 were affected by the issue described above. The effect on disclosures prior to the quarterly period ended September 30, 2011 was not material.