World Fuel Services 2005 Annual Report Download - page 64

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WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
foreign currency exchange gains and losses on transactions are included in other, net in the accompanying
consolidated statements of income, in the period incurred.
The following table identifies the unrealized and realized foreign currency gains and losses included in
other, net in the accompanying consolidated statements of income (in thousands):
2003 2004 2005
Unrealized foreign currency (losses) gains, net ............. $(592) $(542) $ 1,173
Realized foreign currency gains (losses), net ............... $ 70 $ (84) $(1,347)
Income Taxes
Income tax expense is provided for using the asset and liability method, under which deferred tax assets and
liabilities are determined based upon the temporary differences between the financial statement and income tax
bases of assets and liabilities using currently enacted tax rates. Deferred tax assets are reduced by a valuation
allowance if, based on the weight of available evidence, it is more likely than not that all or a portion of the
recorded deferred tax assets will not be realized in future periods. As of and for the year ended December 31,
2005, we recorded a valuation allowance of $0.8 million to reduce the value of US foreign tax credit
carryforwards to the estimated realizable amount.
Comprehensive Income
The only item affecting OCI relates to qualifying cash flow hedges related to derivatives. The following
reconciles our reported net income with comprehensive income for all periods presented (in thousands):
2003 2004 2005
Net income, as reported ........................... $22,161 $28,559 $39,609
Net unrealized income on qualifying cash flow hedges,
net of income tax provision of $90 for 2005 ......... — — 143
Comprehensive income ........................... $22,161 $28,559 $39,752
Stock Split
On January 20, 2005, we announced a two-for-one split of our common stock. The additional shares issued
pursuant to the stock split were distributed on February 15, 2005 to stockholders of record as of February 1,
2005. In connection with the stock split, on January 31, 2005, our Board of Directors approved an increase in
World Fuel’s authorized common stock from 25 million shares to 50 million shares. Stockholders’ equity has
been adjusted to give retroactive recognition to the stock split for all periods presented by reclassifying the par
value of the additional shares arising from the split from capital in excess of par value to common stock. All
references in the financial statements and notes to number of shares and per share amounts reflect the stock split.
Earnings per Share
Basic earnings per share is computed based on the weighted average number of common shares outstanding.
Diluted earnings per share is based on the sum of the weighted average number of common shares outstanding,
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