World Fuel Services 2011 Annual Report Download - page 55

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Non-GAAP Net Income and Non-GAAP Diluted Earnings per Common Share. The following table sets
forth the reconciliation between our net income and our non-GAAP net income for 2010 and 2009 (in
thousands):
2010 2009
Net income $146,865 $117,139
Share-based compensation expense, net of taxes 7,111 4,729
Intangible asset amortization expense, net of taxes 6,739 5,986
Non-GAAP net income $160,715 $127,854
The following table sets forth the reconciliation between our diluted earnings per common share and our
non-GAAP diluted earnings per common share for 2010 and 2009:
2010 2009
Diluted earnings per common share $2.31 $1.96
Share-based compensation expense, net of taxes 0.11 0.07
Intangible asset amortization expense, net of taxes 0.11 0.10
Non-GAAP diluted earnings per common share $2.53 $2.13
The non-GAAP financial measures exclude costs associated with share-based compensation and
amortization of acquired intangible assets, primarily because we do not believe they are reflective of the
Company’s core operating results. We believe the exclusion of share-based compensation from
operating expenses is useful given the variation in expense that can result from changes in the fair value
of our common stock, the effect of which is unrelated to the operational conditions that give rise to
variations in the components of our operating costs. Also, we believe the exclusion of the amortization of
acquired intangible assets is useful for purposes of evaluating operating performance of our core
operating results and comparing them period-over-period. We believe that these non-GAAP financial
measures, when considered in conjunction with our financial information prepared in accordance with
GAAP, are useful to investors to further aid in evaluating the ongoing financial performance of the
company and to provide greater transparency as supplemental information to our GAAP results.
Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial
information prepared in accordance with GAAP. In addition, our presentation of non-GAAP net income
and non-GAAP earnings per common share may not be comparable to the presentation of such metrics
by other companies. Investors are encouraged to review the reconciliation of these non-GAAP measures
to their most directly comparable GAAP financial measure.
Liquidity and Capital Resources
The following table reflects the major categories of cash flows for 2011, 2010 and 2009. For additional
details, please see the consolidated statements of cash flows in the consolidated financial statements.
2010 2009
Net cash (used in) provided by operating activities $(142,536) $ (35,698) $ 77,921
Net cash used in investing activities (144,632) (180,292) (61,828)
Net cash provided by (used in) financing activities 222,566 189,951 (34,436)
2011 compared to 2010
Operating Activities. For 2011, net cash used in operating activities totaled $142.5 million as compared
to $35.7 million in 2010. The $106.8 million change in operating cash flows was primarily due to changes
in net operating assets and liabilities, primarily net working capital, driven by increased sales volume and
higher world oil prices as compared to 2010, which were partially offset by increased net income.
Investing Activities. For 2011, net cash used in investing activities was $144.6 million as compared to
$180.3 million in 2010. The $35.7 million decrease in cash used in investing activities in 2011 was
primarily due to a decrease in the amount paid for the acquisition of businesses, which was partially
offset by increased capital expenditures related to systems development in 2011 as compared to 2010.
31
2011