World Fuel Services 2014 Annual Report Download - page 28

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(4) In 2011, we acquired i) all of the outstanding stock of Nordic Camp Supply ApS and certain affiliates (“NCS”) and ii) all
of the outstanding stock of Ascent Aviation Group, Inc. (“Ascent”) on March 1st and April 1st, respectively, and iii)
completed six additional acquisitions which were not material individually or in the aggregate. The financial position and
results of operations of these acquisitions have been included in our consolidated financial statements since their
respective acquisition dates.
(5) In 2010, we acquired i) certain assets of Lakeside Oil Company, Inc., including the assets comprising its wholesale
motor fuel distribution business (the “Lakeside business”) on July 1st, ii) all of the outstanding stock of Western
Petroleum Company (“Western”) on October 1st, iii) all of the outstanding stock of The Hiller Group Incorporated, Air
Petro Corp. and all of the outstanding membership interests of HG Equipment, LLC and AHT Services, LLC (collectively,
“Hiller”) on December 31st and iv) completed two additional acquisitions which were not material individually or in the
aggregate. The financial position and results of operations of these acquisitions have been included in our consolidated
financial statements since their respective acquisition dates.
(6) Included in operating expenses are total non-cash compensation costs associated with share-based payment awards
of $15.8 million for 2014, $16.7 million for 2013, $14.1 million for 2012, $11.0 million for 2011 and $10.1 million for 2010
and intangible amortization expense of $29.1 million for 2014, $22.4 million for 2013, $18.1 million for 2012, $25.0 million
for 2011 and $9.8 million for 2010.
(7) Included in non-operating income (expenses), net for 2014 is a gain of $18.1 million related to the sale of our crude oil
joint venture interests. The after-tax gain, net of certain related operating expenses was $9.9 million, or $0.14 per basic
and diluted share.
(8) In 2014, we repurchased 227,000 shares of our common stock for an aggregate value of $10.0 million pursuant to the
Repurchase Program. In 2013, we repurchased 926,000 shares of our common stock for an aggregate value of
$35.0 million pursuant to the Repurchase Program. In 2010, we completed a public offering of 9,200,000 shares of our
common stock and received net proceeds of $218.8 million.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with “Item 6 – Selected Financial Data,” and with the accompanying
consolidated financial statements and related notes thereto appearing elsewhere in this 2014 10-K Report. The following
discussion may contain forward-looking statements, and our actual results may differ significantly from the results suggested
by these forward-looking statements. Some factors that may cause our results to differ materially from the results and events
anticipated or implied by such forward- looking statements are described in “Item 1A – Risk Factors.”
Overview
We are a global fuel logistics, transaction management and payment processing company, principally engaged in the
distribution of fuel and related products and services in the aviation, marine and land transportation industries. We compete
by providing our customers with value-added benefits, including single-supplier convenience, competitive pricing, the
availability of trade credit, price risk management, logistical support, fuel quality control and fuel procurement outsourcing.
We have three reportable operating business segments: aviation, marine, and land. We primarily contract with third parties
for the delivery and storage of fuel products, however, in some cases we own storage and transportation assets for strategic
purposes. In our aviation segment, we offer fuel and related products and services to major commercial airlines, second
and third-tier airlines, cargo carriers, regional and low cost carriers, airports, fixed based operators, corporate fleets,
fractional operators, private aircraft, military fleets and to the U.S. and foreign governments. In our marine segment, we
offer fuel, lubricants and related products and services to a broad base of marine customers, including international
container and tanker fleets, commercial cruise lines, yachts and time-charter operators, the U.S. and foreign governments
as well as other fuel suppliers. In our land segment, we offer fuel, lubricants and related products and services to petroleum
distributors operating in the land transportation market, retail petroleum operators, and industrial, commercial, residential
and government customers and we engage in crude oil marketing activities. In addition, we offer transaction management
services which consist of card payment solutions and merchant processing services to customers in the aviation, marine
and land transportation industries.
Reportable Segments
We have three reportable operating segments: aviation, marine and land. Corporate expenses are allocated to each
segment based on usage, where possible, or on other factors according to the nature of the activity. We evaluate and
manage our business segments using the performance measurement of income from operations.