World Fuel Services 2011 Annual Report Download - page 50

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Gross Profit. Our gross profit for 2011 was $635.0 million, an increase of $192.9 million, or 43.6%, as
compared to 2010. Our gross profit during these periods was attributable to the following segments (in
thousands):
2010 $ Change
Aviation segment $306,112 $215,130 $ 90,982
Marine segment 195,109 165,344 29,765
Land segment 133,782 61,667 72,115
Total $635,003 $442,141 $192,862
Our aviation segment gross profit for 2011 was $306.1 million, an increase of $91.0 million, or 42.3%, as
compared to 2010. The increase in aviation segment gross profit was due to $68.1 million in increased
sales volume and $22.9 million in increased gross profit per gallon sold as a result of sales derived from
the NCS, Ascent, Hiller and Western acquisitions as well as increased sales volume in our organic
business to both new and existing customers.
Our marine segment gross profit for 2011 was $195.1 million, an increase of $29.8 million, or 18.0%, as
compared to 2010. The increase in marine segment gross profit was due to $28.0 million of increased
sales volume to both new and existing customers. The remaining increase of $1.8 million was due to
increased gross profit per metric ton sold primarily due to fluctuations in customer mix.
Our land segment gross profit for 2011 was $133.8 million, an increase of $72.1 million as compared to
2010. The increase in land segment gross profit was due to $53.4 million in increased sales volume and
$18.7 million in increased gross profit per gallon sold as a result of sales derived from the Western and
Lakeside business acquisitions, which were included in 2011 for a full year, as well as increased sales
volume in our organic business to both new and existing customers.
Operating Expenses. Total operating expenses for 2011 were $378.0 million, an increase of $116.8
million, or 44.7%, as compared to 2010. The following table sets forth our expense categories (in
thousands):
2010 $ Change
Compensation and employee benefits $215,275 $162,451 $ 52,824
Provision for bad debt 8,173 4,262 3,911
General and administrative 154,583 94,562 60,021
Total $378,031 $261,275 $116,756
Of the total increase in operating expenses, $52.8 million was related to compensation and employee
benefits, $3.9 million was related to provision for bad debt and $60.0 million was related to general and
administrative expenses. The increase in compensation and employee benefits was primarily due to
compensation related to the inclusion of the acquired businesses, increases in incentive-based
compensation and compensation for new hires to support our growing global business. The increase in
provision for bad debt was due to the increase in accounts receivable as a result of increased volume and
higher world oil prices and changes in the customer mix in the 2011 receivable portfolio as compared to
2010. The increase in general and administrative expenses was primarily due to the inclusion of the
acquired businesses, including related amortization of acquired identifiable intangible assets, as well as
increases related to professional fees and depreciation.
26
2011
2011