World Fuel Services 2015 Annual Report Download - page 63

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Earnings per Common Share
Basic earnings per common share is computed by dividing net income attributable to World Fuel and available to common
shareholders by the sum of the weighted average number of shares of common stock, stock units, restricted stock entitled to
dividends not subject to forfeiture and vested RSUs outstanding during the period. Diluted earnings per common share is
computed by dividing net income attributable to World Fuel and available to common shareholders by the sum of the weighted
average number of shares of common stock, stock units, restricted stock entitled to dividends not subject to forfeiture and vested
RSUs outstanding during the period and the number of additional shares of common stock that would have been outstanding if
our outstanding potentially dilutive securities had been issued. Potentially dilutive securities include restricted stock subject to
forfeitable dividends, non-vested RSUs and SSAR Awards. The dilutive effect of potentially dilutive securities is reflected in diluted
earnings per common share by application of the treasury stock method. Under the treasury stock method, an increase in the fair
market value of our common stock can result in a greater dilutive effect from potentially dilutive securities.
The following table sets forth the computation of basic and diluted earnings per common share for the periods presented
(in millions, except per share amounts):
2015 2014 2013
Numerator:
Net income attributable to World Fuel $ 186.9 $ 221.7 $ 203.1
Denominator:
Weighted average common shares for basic earnings per common share 70.2 70.8 71.2
Effect of dilutive securities 0.5 0.5 0.6
Weighted average common shares for diluted earnings per common share 70.7 71.3 71.8
Weighted average securities which are not included in the calculation of
diluted earnings per common share because their impact is anti-dilutive or
their performance conditions have not been met 1.0 0.9 0.6
Basic earnings per common share $ 2.66 $ 3.13 $ 2.85
Diluted earnings per common share $ 2.64 $ 3.11 $ 2.83
Recent Accounting Pronouncements
Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. In January
2016, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) to address
certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The ASU supersedes
the guidance to classify equity securities with readily determinable fair values into different categories, and requires equity
securities (except those that are accounted for under the equity method or those that result in consolidation of the investee)
to be measured at fair value with changes in the fair value recognized through net income. It also simplifies the impairment
assessment of equity investments without readily determinable fair values by requiring assessment for impairment
qualitatively at each reporting period. This update is effective at the beginning of our 2018 fiscal year. We are currently
evaluating whether the adoption of this new guidance will have a significant impact on our consolidated financial statements
and disclosures.
Income Taxes: Balance Sheet Classification of Deferred Taxes. In November 2015, the FASB issued an ASU that changes
how deferred taxes are classified on organizations’ balance sheets. The ASU eliminates the current requirement for
organizations to present deferred tax liabilities and assets as current and noncurrent in a classified balance sheet. Instead,
organizations will be required to classify all deferred tax assets and liabilities as noncurrent. The adoption of this ASU
(pursuant to early adoption provisions) resulted in our deferred tax assets and liabilities being presented as non-current as
of December 31, 2015. The guidance has been applied prospectively; therefore, the accompanying consolidated balance
sheet as of December 31, 2014 was not adjusted.
Business Combinations: Simplifying the Accounting for Measurement – Period Adjustments. In September 2015, FASB
issued an ASU, to simplify the accounting for adjustments made to provisional amounts recognized in a business
combination; the amendments eliminate the requirement to retrospectively account for those adjustments. The ASU will
require that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in
the reporting period in which the adjustment amounts are determined. It also requires that the acquirer record, in the same
period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any,
as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition
date. This update is effective at the beginning of our 2016 fiscal year. We do not believe the adoption of this new guidance
will have a significant impact on our consolidated financial statements and disclosures.