World Fuel Services 2008 Annual Report Download - page 68

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WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
deferred tax assets and liabilities and any valuation allowance recorded against our net deferred assets. We
establish reserves when, despite our belief that the tax return positions are fully supportable, certain positions are
likely to be challenged and we may ultimately not prevail in defending those positions.
U.S. income and foreign withholding taxes have not been recognized on undistributed earnings of foreign
subsidiaries. It is not practicable to estimate the amount of taxes that might be payable, if distributed. Our
intention is to reinvest these undistributed earnings permanently or to repatriate the undistributed earnings only
when it is tax effective to do so.
Comprehensive Income
Our comprehensive income is calculated by adjusting net income for the unrealized gains or losses on the
mark-to-market of derivatives which qualify and are designated as cash flow hedges and foreign currency
translation adjustments.
The following reconciles our reported net income with comprehensive income for all years presented (in
thousands):
2008 2007 2006
Net income, as reported . . . . . . . . . . . . . . . . . . . . . . . . . . $105,039 $64,773 $63,948
Net unrealized (loss) income on qualifying cash flow
hedges and the mark-to-market of short-term
investments, net of income tax benefit of $433 and
$81 for 2008 and 2007, respectively and net of
income tax provision of $13 for 2006 . . . . . . . . . . . . . (1,096) (129) 21
Foreign currency translation adjustment . . . . . . . . . . . . . (3,340) — —
Comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . $100,603 $64,644 $63,969
Earnings per Share
Basic earnings per share is computed by dividing net income by the weighted average number of shares of
common stock, stock units and vested RSUs outstanding. Diluted earnings per share is computed by dividing net
income by the sum of the weighted average number of shares of common stock, stock units and vested RSUs
outstanding and the common stock equivalents arising out of weighted average number of ‘in-the-money’ Option
Awards, restricted stock and non-vested RSUs outstanding, using the treasury stock method. Our net income is
the same for basic and diluted earnings per share calculations.
Shares used to calculate earnings per share are as follows (in thousands):
2008 2007 2006
Weighted average shares used in the calculation of basic
earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,697 28,102 27,467
Common stock equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . 332 960 1,456
Weighted average shares used in the calculation of diluted
earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,029 29,062 28,923
Weighted average shares subject to stock options, SSARs,
restricted stock and non-vested RSUs which are not
included in the calculation of diluted earnings per share
because their impact is antidilutive or the awards’
performance conditions have not yet been met . . . . . . . . . . 1,477 1,062 714
60