World Fuel Services 2011 Annual Report Download - page 49

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After assessing the above described events and circumstances, if we determine that it is more likely
than not that the fair value of a reporting unit is greater than its carrying value, then no further testing is
required. Otherwise, we would perform the first step of quantitative testing for goodwill impairment.
In connection with our acquisitions, we record identifiable intangible assets existing at the date of the
acquisitions for customer relationships, supplier and non-compete agreements and trademark/trade
name rights. Identifiable intangible assets subject to amortization are amortized over their estimated
lives and are reviewed for impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable based on market factors and operational
considerations. Identifiable intangible assets not subject to amortization are reviewed annually for
impairment by comparing the estimated fair value of the intangible asset with its carrying value.
Extinguishment of Liability
In the normal course of business, we accrue liabilities for fuel and services received for which invoices
have not yet been received. These liabilities are derecognized, or extinguished, if either (i) payment is
made to relieve our obligation for the liability or (ii) we are legally released from our obligation for the
liability, such as when our legal obligations with respect to such liabilities lapse or otherwise no longer
exist. We derecognized vendor liability accruals due to the legal release of our obligations in the amount
of $8.3 million, $9.8 million and $8.6 million during 2011, 2010 and 2009, respectively, which is reflected
as a reduction of cost of revenue in the accompanying consolidated statements of income.
Results of Operations
The results of operations include the results of (i) Ascent (aviation segment) commencing on April 1,
2011, (ii) NCS (aviation segment) commencing on March 1, 2011, (iii) Hiller (aviation segment)
commencing on December 31, 2010, (iv) Gib Oil (aviation, marine and land segments) commencing on
December 1, 2010, (v) Western (aviation and land segments) commencing on October 1, 2010, (vi) the
Lakeside business (land segment) commencing on July 1, 2010, (vii) the FOS business (marine segment)
commencing on January 1, 2010 and (viii) Henty (marine and land segments) and the TGS business (land
segment) commencing on April 1, 2009, the acquisition date of each of these acquired businesses.
2011 compared to 2010
Revenue. Our revenue for 2011 was $34.6 billion, an increase of $15.5 billion, or 81.0%, as compared to
2010. Our revenue during these periods was attributable to the following segments (in thousands):
2010 $ Change
Aviation segment $12,866,019 $ 7,132,749 $ 5,733,270
Marine segment 14,565,086 9,220,998 5,344,088
Land segment 7,191,749 2,777,400 4,414,349
Total $34,622,854 $19,131,147 $15,491,707
Our aviation segment contributed $12.9 billion in revenue for 2011, an increase of $5.7 billion, or 80.4%
as compared to 2010. Of the total increase in aviation segment revenue, $3.3 billion was due to an
increase in the average price per gallon sold as a result of higher world oil prices in 2011 as compared to
2010. The remaining increase of $2.4 billion was due to increased sales volume primarily from additional
sales to both new and existing customers as well as incremental sales derived from the NCS, Ascent,
Hiller and Western acquisitions.
Our marine segment contributed $14.6 billion in revenue for 2011, an increase of $5.3 billion, or 58.0%,
as compared to 2010. Of the total increase in marine segment revenue, $3.8 billion was due to an
increase in the average price per metric ton sold as a result of higher world oil prices in 2011 as
compared to 2010. The remaining increase of $1.5 billion was due to increased sales volume from
additional sales to both new and existing customers.
Our land segment contributed $7.2 billion in revenue for 2011, an increase of $4.4 billion as compared to
2010. Of the total increase in land segment revenue, $2.7 billion was primarily due to incremental sales
derived as a result of the Western and Lakeside business acquisitions as well as increased sales volume
to both new and existing customers. The remaining increase of $1.7 billion was due to an increase in the
average price per gallon sold as a result of higher world oil prices in 2011 as compared to 2010.
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2011