World Fuel Services 2005 Annual Report Download - page 36

to an increase in interest income in 2005 associated with higher average invested cash balances and interest rates
versus 2004, partially offset by higher net interest expense and other financing costs associated with our
revolving credit facility.
Taxes. For 2005, our effective tax rate was 27.7%, based upon an income tax provision of $15.5 million, as
compared to 19.4% and an income tax provision of $7.0 million for 2004. The increase in the effective tax rate
for 2005 resulted primarily from our decision to repatriate $40.0 million in foreign earnings pursuant to the
special taxing provisions contained in the American Jobs Creation Act of 2004. We recorded additional tax
expense in 2005 of approximately $2.8 million, or $0.12 per basic share and $0.11 per diluted share, related to
this decision to repatriate foreign earnings. This repatriation increased our effective tax rate for 2005 by
approximately 5.1%. The remaining increase in the effective tax rate is due to profit fluctuations of our
subsidiaries in tax jurisdictions with different tax rates and return to provision adjustments for foreign income tax
returns completed during 2005.
Net Income and Diluted Earnings per Share. Net income for 2005 was $39.6 million, an increase of $11.1
million, or 38.7%, as compared to 2004. Diluted earnings per share for 2005 was $1.57 per share, an increase of
$0.35 per share, or 28.7%, as compared to 2004.
2004 compared to 2003
Revenue. Our revenue for 2004 was $5.7 billion, an increase of $3.0 billion, as compared to 2003. Our
revenue during these periods was attributable to the following segments (in thousands):
2003 2004 $ Change
Marine segment .......................... $1,644,598 $3,031,474 $1,386,876
Aviation segment ......................... 1,026,959 2,622,899 1,595,940
Total .............................. $2,671,557 $5,654,373 $2,982,816
Our marine segment contributed $3.0 billion in revenue for 2004, an increase of $1.4 billion, or 84.3%, over
2003. Of the total increase in marine revenue, $1.3 billion pertained to increased business volume, primarily due
to the acquisition of Tramp Oil, as well as additional sales to new and existing customers. The remaining revenue
increase of $134.4 million was due to a 6.8% increase in the average price per metric ton sold.
Our aviation segment contributed $2.6 billion in revenue for 2004, an increase of $1.6 billion over 2003.
Increased volume in aviation contributed $970.0 million of the total increase in aviation revenue, with the
remaining revenue increase of $626.0 million pertaining to a 30.4% increase in the average price per gallon sold.
The increase in aviation sales volume was largely due to the growth in our fuel management business, new
commercial business, and the consolidation of PAFCO, our aviation joint venture.
Gross Profit. Our gross profit for 2004 was $130.0 million, an increase of $28.8 million, or 28.5%, as
compared to 2003. Our gross profit during these periods was attributable to the following segments (in
thousands):
2003 2004 $ Change
Marine segment ............................... $ 48,747 $ 63,148 $14,401
Aviation segment .............................. 52,376 66,808 14,432
Total .................................... $101,123 $129,956 $28,833
Our marine segment gross profit for 2004 was $63.1 million, an increase of $14.4 million, or 29.5%, as
compared to 2003. Of the total increase in marine segment gross profit, $21.5 million related to higher unit sales
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