World Fuel Services 2011 Annual Report Download - page 83

Significant judgment is required in evaluating our tax positions, and in determining our provisions for
income taxes, our deferred tax assets and liabilities and any valuation allowance recorded against our net
deferred assets. We establish reserves when, despite our belief that the tax return positions are fully
supportable, certain positions are likely to be challenged and we may ultimately not prevail in defending
those positions.
U.S. income taxes have not been recognized on undistributed earnings of foreign subsidiaries. Our
intention is to reinvest these earnings permanently in active non-U.S. business operations. Therefore, no
tax liability has been accrued for these earnings. Because of the availability of U.S. foreign tax credits, it is
not practicable to determine the amount of U.S. income tax payable if such earnings are not reinvested
indefinitely.
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 SSAR Awards, restricted stock subject to forfeitable
dividends and non-vested RSUs. 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 thousands, except per share amounts):
2010 2009
Numerator:
Net income attributable to World Fuel $194,029 $146,865 $117,139
Denominator:
Weighted average common shares for basic earnings per common share 70,687 62,168 59,003
Effect of dilutive securities 823 1,273 898
Weighted average common shares for diluted earnings per common
share 71,510 63,441 59,901
Weighted average anti-dilutive securities which are not included in the
calculation of diluted earnings per common share 103 305 803
Basic earnings per common share $ 2.74 $ 2.36 $ 1.99
Diluted earnings per common share $ 2.71 $ 2.31 $ 1.96
Reclassifications
Certain amounts in prior years have been reclassified to conform to current year’s presentation.
Recent Accounting Pronouncements
Disclosure About Offsetting Assets and Liabilities. In December 2011, the Financial Accounting
Standards Board (‘‘FASB’’) issued an accounting standards update (‘‘ASU’’) which requires companies to
disclose information about financial instruments that have been offset and related arrangements to
enable users of its financial statements to understand the effect of those arrangements on its financial
position. Companies will be required to provide both net (offset amounts) and gross information in the
notes to the financial statements for relevant assets and liabilities that are offset. This update is effective
at the beginning of our 2013 fiscal year and will be applied retrospectively. We do not believe adoption of
this new guidance will have a significant impact on our consolidated financial statements and
disclosures.
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2011