World Fuel Services 2011 Annual Report Download - page 51

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Income from Operations. Our income from operations for 2011 was $257.0 million, an increase of
$76.1 million, or 42.1%, as compared to 2010. Income from operations during these periods was
attributable to the following segments (in thousands):
2010 $ Change
Aviation segment $146,411 $118,351 $28,060
Marine segment 95,982 84,656 11,326
Land segment 62,049 15,948 46,101
304,442 218,955 85,487
Corporate overhead – unallocated 47,470 38,089 9,381
Total $256,972 $180,866 $76,106
Our aviation segment income from operations was $146.4 million for 2011, an increase of $28.1 million,
or 23.7%, as compared to 2010. This increase resulted from $91.0 million in higher gross profit, which
was partially offset by increased operating expenses of $62.9 million. The increase in aviation segment
operating expenses was attributable to higher compensation and employee benefits, provision for bad
debt and general and administrative expenses primarily attributable to the inclusion of the operating
results of the NCS, Ascent, Hiller and Western acquisitions.
Our marine segment earned $96.0 million in income from operations for 2011, an increase of
$11.3 million, or 13.4%, as compared to 2010. This increase resulted from $29.8 million in higher gross
profit, which was partially offset by increased operating expenses of $18.5 million. The increase in
marine segment operating expenses was attributable to higher compensation and employee benefits,
provision for bad debt and general and administrative expenses.
Our land segment income from operations was $62.0 million for 2011, an increase of $46.1 million as
compared to 2010. This increase resulted from $72.1 million in higher gross profit, which was partially
offset by increased operating expenses of $26.0 million. The increase in land segment operating
expenses was due to higher compensation and employee benefits, provision for bad debt and general
and administrative expenses primarily attributable to the inclusion of a full year of the operations of the
Western and Lakeside business acquisitions.
Corporate overhead costs not charged to the business segments were $47.5 million for 2011, an
increase of $9.4 million, or 24.6%, as compared to 2010. The increase in corporate overhead costs not
charged to the business segments was attributable to higher compensation and employee benefits and
general and administrative expenses incurred.
Non-Operating Expenses, net. For 2011, we had non-operating expenses, net of $18.8 million, an
increase of $15.4 million as compared to 2010. This increase was primarily due to an increase in interest
expense and other financing costs, net, as a result of higher average borrowings as compared to 2010,
additional fees attributable to the Credit Facility amendments in 2011 and the borrowings under the Term
Loan Facility.
Taxes. For 2011, our effective tax rate was 16.4% and our income tax provision was $39.0 million, as
compared to an effective tax rate of 17.5% and an income tax provision of $31.0 million for 2010. The
lower effective tax rate for 2011 resulted primarily from differences in the actual results of our
subsidiaries in tax jurisdictions with different tax rates as compared to 2010 and the reduction of certain
tax reserves for uncertain tax positions due to the lapse of their respective statutes of limitation.
Net Income and Diluted Earnings per Common Share. Our net income for 2011 was $194.0 million, an
increase of $47.2 million, or 32.1%, as compared to 2010. Diluted earnings per common share for 2011
was $2.71 per common share, an increase of $0.40 per common share, or 17.3%, as compared to 2010.
27
2011