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World Fuel Services Corporation 2012 Annual Report

Table of contents

  • Page 1
    World Fuel Services Corporation 2012 Annual Report

  • Page 2
    Table of Contents To Our Shareholders / 3 Aviation / 4 Marine / 6 Land / 8 Our Leadership / 10 Financial Overview / 12 Our Offices / 13 Corporate Information / 13

  • Page 3
    World Fuel Services Corporation (NYSE: INT) is a global leader in: Services Technology Fuel Risk Management Global Network Logistics We specialize in the marketing, sale and distribution of aviation, marine and land fuel products. We offer single supplier convenience, competitive pricing, trade ...

  • Page 4
    ... and Cash Equivalents Debt World Fuel Shareholders' Equity Gross Profit $ in Millions Income from Operations $ in Millions Net Income $ in Millions 2010 $442 2011 $635 2012 $673 2010 $181 2011 $257 2012 $257 2010 $147 2011 $194 2012 $189 Gross Profit 5-Year Compound Annual Growth Rate (2007...

  • Page 5
    Business Segments Aviation Gross Profit $ in Millions Gross Profit 5-Year Compound Annual Growth Rate (2007-2012) 19.1% 2012 2010 $215 2011 $306 2012 $295 2007 Income from Operations 5-Year Compound Annual Growth Rate (2007-2012) 16.1% 2007 2012 Marine Gross Profit $ in Millions Gross ...

  • Page 6
    Our Values Vision Become the world's leading provider of credit, finance, services and logistics to the energy and transportation markets. Build a world-class organization that drives sustained growth through a high-performance culture and entrepreneurial agility. Mission To create value for our ...

  • Page 7
    ... the unwavering expertise and value that has differentiated World Fuel Services from our competitors for years. I am grateful to you, our shareholders, for your belief in our vision and your ongoing support of the growth of our enterprise. Michael J. Kasbar President and Chief Executive Officer 3

  • Page 8
    Aviation Volume of Fuel Sold Volume in Billions (Gallons) 2010 2.9 2011 3.9 2012 4.4

  • Page 9
    About Aviation With more than 3,000 locations around the world, World Fuel Services (WFS) proudly markets fuel and related services to commercial airlines, cargo carriers, private aircraft and fixed base operators (FBOs), as well as the United States and foreign governments. In 2012, the aviation ...

  • Page 10
    Marine Volume of Fuel Sold Volume in Millions (Metric Tons) 2010 23.7 2011 26.1 2012 25.8

  • Page 11
    ... marine team successfully expanded into new markets and new regions. Furthermore, we expanded our presence in the specialized mega yacht industry while our global supply team expanded our capabilities in fuel sourcing, self-supply, marine lubricants and offshore logistics. By delivering financial...

  • Page 12
    Land Volume of Fuel Sold Volume in Billions (Gallons) 2010 1.2 2011 2.4 2012 3.1

  • Page 13
    About Land WFS supplies land transportation industries in the United States, Brazil and the United Kingdom with refined petroleum products, alternative fuels and related services. Through more than 1,000 distribution locations, WFS provides more than 3 billion gallons of fuel products annually to ...

  • Page 14
    Our Leadership Paul H. Stebbins Michael J. Kasbar Ken Bakshi John L. Manley J. Thomas Presby Myles Klein Abby F . Kohnstamm Stephen K. Roddenberry Richard A. Kassar

  • Page 15
    ... Paul H. Stebbins Executive Chairman World Fuel Services Corporation Michael J. Kasbar President and Chief Executive Officer World Fuel Services Corporation Ken Bakshi Chairman and Chief Executive Officer, Amala Inc. (Consumer Products) Managing Partner, Trishul Capital Group (Venture Capital...

  • Page 16
    ...our customers and suppliers and provide new avenues for growth. Our operating cash flow contributed to our very strong and liquid balance sheet, enabling us to further fuel organic growth and make additional strategic acquisitions. " Ira M. Birns Executive Vice President and Chief Financial Officer

  • Page 17
    WORLD FUEL SERVICES CORPORATION 2012 FORM 10-K

  • Page 18
    ... COMMISSION FILE NUMBER 1-9533 23FEB201211430447 WORLD FUEL SERVICES CORPORATION (Exact name of registrant as specified in its charter) Florida (State or other jurisdiction of incorporation or organization) 9800 Northwest 41st Street, Suite 400 Miami, Florida (Address of principal executive offices...

  • Page 19
    ... About Market Risk Financial Statements and Supplementary Data Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Controls and Procedures Other Information 18 21 22 35 37 37 37 38 Directors, Executive Officers and Corporate Governance Executive Compensation...

  • Page 20
    ... located in the United States, the United Kingdom, Denmark, Norway, the Netherlands, Germany, Greece, Turkey, the United Arab Emirates, Russia, Taiwan, South Korea, Singapore, Japan, Hong Kong, Costa Rica, Brazil, Chile, Argentina, Mexico, Colombia, Puerto Rico, Canada, South Africa, Gibraltar...

  • Page 21
    ... consolidated statements of income and comprehensive income, none of our aviation customers accounted for more than 10% of total consolidated revenue. Marine Segment We market fuel and related services to a broad base of marine customers, including international container and tanker fleets...

  • Page 22
    ...more than 10% of total consolidated revenue. Competitors Our competitors within the highly fragmented world-wide downstream markets of aviation, marine and land fuel are numerous, ranging from large multinational corporations, principally major oil producers, which have significantly greater capital...

  • Page 23
    ... affect our operations, earnings and competitive position. Forward-Looking Statements Certain statements made in this report and the information incorporated by reference in it, or made by us in other reports, filings with the SEC, press releases, teleconferences, industry conferences or otherwise...

  • Page 24
    ... letters of credit with other suppliers of fuel and other services. While no single customer represents more than 10% of our total consolidated revenue, diversification of credit risk is limited because we sell primarily within the aviation, marine and land transportation industries. Our exposure to...

  • Page 25
    ... on our business. On July 21, 2010, President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act into law, including Title VII, titled ''Wall Street Transparency and Accountability Act of 2010'' (the ''Act''). Among other things, the Act provides for new federal regulation of...

  • Page 26
    ...which could have an adverse effect on our results of operations. We enter into financial derivative contracts in order to mitigate the risk of market price fluctuations in aviation, marine and land fuel, to offer our customers fuel pricing alternatives to meet their needs and to mitigate the risk of...

  • Page 27
    ... results. Because we offer fuel products and services on a worldwide basis, our business is subject to risks associated with doing business internationally. Our business and future operating results could be harmed by a variety of factors, including: • trade protection measures and import or...

  • Page 28
    ... reasonable terms, our business would be adversely affected. Adverse conditions in the aviation, marine and land transportation industries may have an adverse effect on our business. Our business is focused on the marketing of fuel and fuel-related services to the aviation, marine and land...

  • Page 29
    ... of an event that is not fully covered by insurance or the loss of insurance coverage could have a material adverse effect on our business, financial condition, results of operations and cash flows. Our failure to comply with the restrictions of our Credit Facility and Term Loans could adversely...

  • Page 30
    ... associated with entering into businesses or markets in which we may have no or limited direct prior experience; • the potential loss of key employees, customers or suppliers of the acquired businesses; • the ability to integrate the information technology (''IT'') systems of acquired businesses...

  • Page 31
    ...to time, certain of our subsidiaries have had limited business dealings in countries subject to comprehensive OFAC-administered sanctions, specifically Cuba, Iran, Syria and Sudan. These business dealings, which represent an insignificant amount of our consolidated revenues and income, generally 12

  • Page 32
    ..., financial condition, results of operations and cash flows. In addition, various state and municipal governments, universities and other investors maintain prohibitions or restrictions on investments in companies that do business with sanctioned countries, which could adversely affect the market...

  • Page 33
    ..., employees or others who may have been injured, or whose property may have been damaged. These liabilities, to the extent not covered by insurance, could have a material adverse effect on our business, financial condition, results of operations and cash flows. Some environmental laws impose...

  • Page 34
    ... settlement, judgment, penalty or fine. Although we maintain insurance to mitigate certain costs, there can be no assurance that costs associated with lawsuits or other legal proceedings will not exceed the limits of insurance policies. Our business, financial condition, results of operations and...

  • Page 35
    ...respect. WORLD FUEL SERVICES CORPORATION and SUBSIDIARIES PROPERTIES Location 9800 Northwest 41st Street Miami, FL 33178, USA 3340 S. Harlem Avenue Riverside, IL 60546, USA Portland House 10th and 13th Floor Bressenden Place London, UK SW1E 5BH Kingfisher House North Park Gatwick Road Crawley, West...

  • Page 36
    ...our subsidiaries, World Fuel Services (Singapore) Pte Ltd. (''WFSS'') alleging property damage and bodily injuries arising out of the emergency landing of a Cathay aircraft in Hong Kong on April 13, 2010, which Cathay alleges was caused by contaminated fuel supplied by WFSS. Cathay also alleges that...

  • Page 37
    ... stock is traded on the New York Stock Exchange (''NYSE'') under the symbol INT. As of February 13, 2013, there were 341 shareholders of record of our common stock and the closing price of our stock on the NYSE was $43.93. The following table sets forth, for each quarter in 2012 and 2011, the high...

  • Page 38
    ... 2007 through December 31, 2012. The cumulative return includes reinvestment of dividends. Comparison of 5 Year Cumulative Total Return Among World Fuel, the Russell 2000 Index, .... Copyright஽ 2013 S&P, a division of The McGraw-Hill Companies Inc. All rights reserved. Equity Compensation Plans The ...

  • Page 39
    .../31/12 Total Total Number of Shares Average Price... tendered by employees to satisfy the...market conditions, share price, securities law and other legal requirements and other factors. For information on repurchases of common stock for the first three quarters of 2012, see the corresponding 10-Q Report...

  • Page 40
    ...Multi Service business have been included in our consolidated financial statements since their respective acquisition dates. (2) In 2011, we acquired all of the outstanding stock of Nordic Camp Supply ApS and certain affiliates (''NCS'') and all of the outstanding stock of Ascent Aviation Group, Inc...

  • Page 41
    ...our consolidated financial statements since their respective acquisition dates. (4) In April 2009, we acquired all of the outstanding stock of Henty Oil Limited, Tank and Marine Engineering Limited and Henty Shipping Services Limited (collectively, ''Henty'') and certain assets of TGS Petroleum, Inc...

  • Page 42
    ... may not be effective to mitigate volatile fuel prices and may expose us to counterparty risk. See ''Item 1A - Risk Factors'' of this 2012 10-K Report. Reportable Segments We have three reportable operating segments: aviation, marine and land. Corporate expenses are allocated to each segment based...

  • Page 43
    ... for bad debt. If credit losses exceed established allowances, our business, financial condition, results of operations and cash flows may be adversely affected. For additional information on the credit risks inherent in our business, see ''Item 1A - Risk Factors'' in this 2012 10-K Report. 24

  • Page 44
    ... included in a fair value hedge relationship. Derivatives We enter into financial derivative contracts in order to mitigate the risk of market price fluctuations in aviation, marine and land fuel, to offer our customers fuel pricing alternatives to meet their needs and to mitigate the risk of...

  • Page 45
    ...NCS (aviation and land segments) commencing on March 1, 2011, (iv) Hiller (aviation segment) commencing on December 31, 2010, (v) Western (aviation and land segments) commencing on October 1, 2010 and (vi) the Lakeside business (land segment) commencing on July 1, 2010. 2012 compared to 2011 Revenue...

  • Page 46
    ... of higher world oil prices in 2012 as compared to 2011. Our land segment revenue for 2012 was $9.5 billion, an increase of $2.3 billion, or 32.1%, as compared to 2011. The increase in land segment revenue was due to $0.7 billion attributable to the inclusion of revenue from acquired businesses...

  • Page 47
    ...): 2012 Aviation segment Marine segment Land segment Corporate overhead - unallocated Total $128,153 103,229 75,291 306,673 49,650 $257,023 2011 $...acquired businesses. Our marine segment income from operations for 2012 was $103.2 million, an increase of $7.2 million, or 7.6%, as compared to 2011...

  • Page 48
    ... GAAP financial measure. 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): 2011 Aviation segment Marine segment Land segment...

  • Page 49
    ...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. Of the remaining increase, $1.3 billion was due to incremental sales derived from the NCS, Ascent, Hiller and Western acquisitions...

  • Page 50
    ... business. 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): 2011 Aviation segment Marine segment Land...

  • Page 51
    ... share $2.71 0.11 0.27 $3.09 2010 $2.31 0.11 0.11 $2.53 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...

  • Page 52
    ... ability to borrow and issue letters of credit, which would have a material adverse effect on our business, financial condition, results of operations and cash flows. As of December 31, 2012, we were in compliance with all financial covenants contained in our Credit Facility and our Term Loans. 33

  • Page 53
    ...an annual basis and are subject to fees at market rates. As of December 31, 2012 and 2011, our outstanding letters of credit and bank guarantees... to the consolidated financial statements in Item 15 of this 2012 10-K Report. Contractual Obligations As of December 31, 2012, our contractual obligations...

  • Page 54
    ... in aviation, marine and land fuel in the form of swaps or futures as well as certain fixed price purchase and sale contracts and proprietary trading. In addition, non-designated derivatives are also entered into to hedge the risk of currency rate fluctuations. As of December 31, 2012 and 2011, we...

  • Page 55
    ...Unit Price 1,758 EUR 310 BBL 2,227 BBL 0.81 122.75 121.97 0.79 $ 246 (0.69) (1,539) $ (1,293) Non-Designated 2013 2013 2014 2014 2015 2015 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013... our Term Loans. As of December 31, 2012, the...

  • Page 56
    ... assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States of America. Our internal control over financial reporting includes those policies and...

  • Page 57
    ... has been audited by PricewaterhouseCoopers LLP, an independent registered certified public accounting firm, as stated in their report appearing herein. Changes in Internal Control over Financial Reporting As of December 31, 2012, we have included NCS and Ascent, which were acquired in 2011, in our...

  • Page 58
    ...our Code of Conduct granted to our principal executive, financial and accounting officers on our website. The remaining information regarding our directors, executive officers and corporate governance is incorporated herein by reference from our Definitive Proxy Statement for the 2013 Annual Meeting...

  • Page 59
    ...in the following index of exhibits are filed or incorporated by reference as a part of this 2012 10-K Report: Description Asset Purchase Agreement by and among World Fuel Services Corporation, World Fuel Services, Inc., Texor Petroleum Company, Inc., Thomas E. Gleitsman and Anthony E. Speiser, dated...

  • Page 60
    ... to Employment Agreement between World Fuel Services, Inc. and Michael S. Clementi, dated May 20, 2011 (incorporated by reference herein to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2011 filed on August 2, 2011). * 1993 Non-Employee Directors Stock Option Plan...

  • Page 61
    ... among World Fuel Services, Inc., World Fuel Services Europe, Ltd., World Fuel Services (Singapore) Pte Ltd, World Fuel Services Trading DMCC, World Fuel Services Aviation Limited as the sellers, World Fuel Services Corporation, as the parent, and Wells Fargo Bank, National Association, dated...

  • Page 62
    ...Fuel Services, Inc., World Fuel Services Europe, Ltd., World Fuel Services (Singapore) Pte Ltd, World Fuel Services Trading DMCC, World Fuel Services Aviation Limited as the sellers, World Fuel Services Corporation, as the parent, and Wells Fargo Bank, National Association, dated as of June 25, 2012...

  • Page 63
    ... total revenues of the CarterEnergy business and the Multi Service business represent approximately 8.1% and 1.5%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2012. /s/ PricewaterhouseCoopers LLP Miami, Florida February 21, 2013 44

  • Page 64
    WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except per share data) As of December 31, 2012 2011 Assets: Current assets: Cash and cash ...346,718 $3,697,246 The accompanying notes are an integral part of these consolidated financial statements. 45

  • Page 65
    ... FUEL SERVICES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (In thousands, except earnings per share data) For the Year ended December 31, 2012 2011 2010 $38,945,338 $34,622,854 $19,131,147 38,271,891 33,987,851 18,689,006 673,447 635,003 442,141 Revenue...

  • Page 66
    WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (In thousands) Accumulated Other Retained Comprehensive Earnings (Loss) Income Total Noncontrolling World Fuel Interest Shareholders' Equity Equity (Deficit) Common Stock Shares Amount Capital in ...

  • Page 67
    WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) For the Year ended December 31, 2012 2011 2010 Cash flows from operating activities: Net income including noncontrolling interest Adjustments to reconcile net income including noncontrolling ...

  • Page 68
    WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS - (CONTINUED) (In thousands) For the Year ended December 31, 2012 2011 2010 Supplemental Disclosures of Cash Flow Information Cash paid during the year for: Interest, net of capitalized interest Income taxes $ 17,...

  • Page 69
    WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 1. Nature of Business, Acquisitions, Significant Accounting Policies and Recent Accounting Pronouncements Nature of Business World Fuel Services Corporation (the ''Company'') was incorporated in Florida ...

  • Page 70
    ... consolidated financial statements is not material, either individually or in the aggregate. 2011 Acquisitions On April 1, 2011, we completed the acquisition of all of the outstanding stock of Ascent Aviation Group, Inc. (''Ascent'') based in Parish, New York. Ascent supplies branded aviation fuel...

  • Page 71
    ... of the outstanding stock of Nordic Camp Supply ApS and certain affiliates (''NCS'') based in Aalborg, Denmark. NCS is a full-service supplier of aviation fuel and related logistics solutions supporting NATO, U.S. and other European armed forces operations in Iraq and Afghanistan. In addition to the...

  • Page 72
    ... of certain assets of Falmouth Oil Services Limited (the ''FOS business''). The FOS business is primarily a marine oil terminal for fuel oil and diesel strategically located in the United Kingdom, which we used for fuel storage prior to the acquisition. On July 1, 2010, we completed the acquisition...

  • Page 73
    ... in the United States requires us to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period...

  • Page 74
    ...quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. We perform annual back-testing to validate that these inputs represent observable inputs that market... either revenue or cost of revenue (based...of our short-term investments measured at ...

  • Page 75
    ... included in a fair value hedge relationship. Derivatives We enter into financial derivative contracts in order to mitigate the risk of market price fluctuations in aviation, marine and land fuel, to offer our customers fuel pricing alternatives to meet their needs and to mitigate the risk of...

  • Page 76
    ... recorded fair market value changes are not adjusted until the fuel is sold. For more information on our ...internal costs (including payroll and payroll-related costs of employees) directly associated with developing significant computer software applications for internal use are capitalized. Training...

  • Page 77
    ... value of our reporting units, including the following: (i) macroeconomic conditions, (ii) industry and market considerations, (iii) earnings quality/sustainability, (iv) overall financial performance, (v) events affecting a reporting unit, (vi) share price and (vii) recent fair value calculation...

  • Page 78
    ... is made by the customer using the charge card. Revenue from charge card transactions is generated from processing fees. Vendor and Customer Rebates and Branding Allowances We receive vendor rebates and branding allowances from a number of our fuel suppliers. Typically, a portion of the rebates and...

  • Page 79
    ..., in the accompanying consolidated statements of income and comprehensive income in the period incurred. We recorded a net foreign currency transaction gain of $0.1 million in 2012, and losses of $2.7 million and $1.8 million in 2011 and 2010, respectively. Revenues and expenses of the subsidiaries...

  • Page 80
    ... 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...

  • Page 81
    ... in aviation, marine and land fuel in the form of swaps or futures as well as certain fixed price purchase and sale contracts and proprietary trading. In addition, non-designated derivatives are also entered into to hedge the risk of currency rate fluctuations. As of December 31, 2012 and 2011, we...

  • Page 82
    ... Average Fixed Notional Unit Price 1,758 EUR 310 BBL 2,227 BBL 0.81 122.75 121.97 0.79 $ 246 (0.69) (1,539) $ (1,293) Non-Designated 2013 2013 2014 2014 2015 2015 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2014 2014 Commodity...

  • Page 83
    ...locations on the consolidated balance sheets (in thousands): As of December 31, 2012 2011 Balance Sheet Location...assets Non-current other assets Accrued expenses and other current liabilities Other long-term liabilities Other current assets Non-current other assets Accrued expenses and other current...

  • Page 84
    ...12,563) $(20,869) $(21,357) $ (3,262) Firm commitments Firm commitments Inventories Hedged Items Location Realized and Unrealized Gain (Loss) For the year ended December 31, 2012 2011 2010 Revenue $ (201) $(12,973) $(7,494) Cost of revenue 739 7,771 (797) Cost of revenue 23,972 38,377 21,419 $24,510...

  • Page 85
    ... Derivatives Location Realized and Unrealized Gain (Loss) 2012 Commodity contracts Commodity contracts Foreign currency contracts Foreign currency contracts Revenue Cost of revenue Revenue Other income (expense), net $14,967 3,333 (2,384) (2,271) $13,645 For the Year ended December 31, 2011 2010 $14...

  • Page 86
    ... million, respectively. The adjustment of purchase price allocations for 2011 acquisitions made in 2012 resulted in a reclassification of $2.9 million in goodwill from our aviation segment to our land segment, an increase in aviation segment goodwill of $1.8 million and a decrease in identifiable...

  • Page 87
    ...credit, which would have a material adverse effect on our business, financial condition, results of operations and cash flows. As of December 31, 2012, we were in compliance with all financial covenants contained in our Credit Facility and our Term Loans. Outside of our Credit Facility we have other...

  • Page 88
    ... The weighted average interest rate on our short-term debt was 2.4% and 2.5% as of December 31, 2012 and 2011, respectively. As of December 31, 2012, the aggregate annual maturities of debt are as follows (in thousands): Year Ended December 31, 2013 2014 2015 2016 $ 26,065 24,848 18,202 311,203 $380...

  • Page 89
    ... that are competitive with those of other similar companies; and (iv) further align participants' interests with those of our other shareholders through compensation that is based on the value of our common stock. The goal is to promote the long-term financial interest of World Fuel and its...

  • Page 90
    ... 31, 2012, unvested restricted stock will vest between March 2013 and March 2018, unvested RSUs will vest between January 2013 and May 2017 and the outstanding SSAR Awards will expire between March 2013 and October 2015. RSUs granted to non-employee directors under the 2006 Plan prior to 2011 remain...

  • Page 91
    ...2010 Granted Issued Forfeited As of December 31, 2011 Granted Issued Forfeited As of December 31, 2012...issued during 2012, 2011 and 2010 was $11... 2010 Exercised Forfeited As of December 31, 2011 Exercised As of December 31, 2012 ...of SSAR Awards exercised during 2012, 2011 and 2010 was $2.1 million, $10...

  • Page 92
    ... fair value were as follows: expected term of 4.0 years, volatility of 58.0%, dividend yields of 0.5% and risk-free interest rates of 1.7%. Unrecognized Compensation Cost As of December 31, 2012, there was $33.2 million of total unrecognized compensation cost related to unvested share-based payment...

  • Page 93
    ...associated with the reserve for uncertain tax positions. A reconciliation of the U.S. federal statutory income tax rate to our effective income tax rate is as follows: 2012 U.S. federal... estimate, statute of limitation lapses, and the settlement of an income tax audit. For 2011, our effective income ...

  • Page 94
    ... certain deferred income tax assets as of December 31, 2012 and 2011 that arose directly from income tax deductions related to equity compensation in excess of compensation recognized for financial reporting. As of December 31, 2012 and 2011, we had no foreign tax credits related to the excess...

  • Page 95
    ...share was $0.08 for 2012 and $0.12 for 2011 and 2010. We anticipate that we will continue to operate under the same special income tax concession in Singapore for the next five years, subject to final approval. The special income tax concession will be conditional upon our meeting certain employment...

  • Page 96
    ... with Executive Officers and Key Employees In March 2008, we entered into agreements with Paul H. Stebbins and Michael J. Kasbar for their continued employment with the Company. In August 2011, each of the agreements was amended to reflect the transition of Mr. Kasbar from President and Chief...

  • Page 97
    ... the agreements, taken together with any amounts or benefits otherwise payable to the executive by us or any affiliated company, are subject to excise tax payments or parachute payments under Section 4999 of the Internal Revenue Code, such amounts or benefits will be reduced but only if and to the...

  • Page 98
    ... Ended December 31, 2013 2014 2015 2016 $ 3,463 2,265 1,825 1,825 $ 9,378 Named Executive Officer Annual Incentive Awards In 2012, Paul H. Stebbins, Michael J. Kasbar, Ira M. Birns and Michael S. Clementi, referred to collectively in this 2012 10-K Report as the Named Executive Officers (or ''NEOs...

  • Page 99
    ...our subsidiaries, World Fuel Services (Singapore) Pte Ltd. (''WFSS'') has been involved in litigation with Cathay Pacific Airways Limited (''Cathay'') arising out of the emergency landing of a Cathay aircraft in Hong Kong in 2010, which Cathay alleges was caused by contaminated fuel supplied by WFSS...

  • Page 100
    ...such losses will not have a material adverse effect on our business or financial condition. However, any adverse resolution of one or more such ... than market rates. Based on the fair value hierarchy, our debt of $380.3 million as of December 31, 2012 and $287.1 million as of December 31, 2011 and ...

  • Page 101
    ... the collateral in the event of counterparty default. We...2012, we have offset $6.6 million of cash collateral received from customers against the total amount of commodity fair value assets in the above table. As of December 31, 2011, we had $11.8 million of cash collateral deposits held by financial...

  • Page 102
    ... 2012 Assets: Commodity contracts Liabilities: Earn-out 2011 Assets: Commodity contracts Liabilities: Earn-out $ 5,012 $ 90 $ 4,194 $ - Total Gains (Losses) Included in Earnings Settlements End of Period Location of Total Gains (Losses) Included in Earnings $1,271 $1,271 $ - $ - Revenue...

  • Page 103
    ... Segments, Geographic Information, and Major Customers Business Segments Based on the nature of operations and quantitative thresholds pursuant to the accounting guidance on segment reporting, we have three reportable operating business segments: aviation, marine and land. Corporate expenses are...

  • Page 104
    ... of December 31, 2012 2011 Accounts receivable, net: Aviation segment, net of allowance for bad debt of $8,997 and $8,441 as of December 31, 2012 and 2011, respectively Marine segment, net of allowance for bad debt of $7,742 and $9,495 as of December 31, 2012 and 2011, respectively Land segment, net...

  • Page 105
    ... between the Americas, EMEA (Europe, Middle East and Africa) and the Asia/Pacific regions, is presented as follows, based on the country of incorporation of the relevant subsidiary (in thousands): For the Year ended December 31, 2011 2010 2012 Revenue: Americas (1) EMEA (2) Asia/Pacific (3) $23,293...

  • Page 106
    ...50,062 0.70 0.70 (1) Includes the CarterEnergy business operations since September 1, 2012 as a result of the acquisition. (2) Includes NCS operations since March 1, 2011 as a result of the acquisition. (3) Includes Ascent operations since April 1, 2011 as a result of the acquisition. (4) Basic and...

  • Page 107
    ...to be signed on its behalf by the undersigned, thereunto duly authorized, on the 21st day of February 2013. WORLD FUEL SERVICES CORPORATION /s/ MICHAEL J. KASBAR Michael J. Kasbar President and Chief Executive Officer /s/ IRA M. BIRNS Ira M. Birns Executive Vice President and Chief Financial Officer...

  • Page 108
    ... Solutions, Inc. NCS Afghanistan Limited NCS US, Inc. Nordic Camp Supply ApS Nordic Camp Supply B.V. Norse Bunkers AS Oil Shipping (Bunkering) B.V. Page Avjet Fuel Co., L.L.C. Petro Air, Corp. Petroleum Transport Solutions, LLC PetroServicios de Costa Rica, S.R.L. ´ PetroServicios de Mexico S.A. de...

  • Page 109
    ... Limited World Fuel Services Trading DMCC World Fuel Services, Inc. World Fuel Singapore Holding Company I Pte Ltd World Fuel Singapore Holding Company II Pte Ltd Yacht Fuel Services Limited * These entities are inactive. Jurisdiction Brazil Germany Germany Argentina Chile United Kingdom Costa Rica...

  • Page 110
    .... 333-130528 and No. 333-68276) of World Fuel Services Corporation of our report dated February 21, 2013 relating to the financial statements and the effectiveness of internal control over financial reporting, which appears in this Form 10-K. /s/ PricewaterhouseCoopers LLP Miami, Florida February 21...

  • Page 111
    ... information; and b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: February 21, 2013 /s/ MICHAEL J. KASBAR Michael J. Kasbar President and Chief Executive Officer

  • Page 112
    ... information; and b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: February 21, 2013 /s/ IRA M. BIRNS Ira M. Birns Executive Vice President and Chief Financial Officer

  • Page 113
    ... Michael J. Kasbar, the President and Chief Executive Officer of World Fuel Services Corporation (the ''Company''), and Ira M. Birns, Executive Vice President and Chief Financial Officer of the Company, certify for the purposes of Section 1350 of Chapter 63 of Title 18 of the United States Code that...

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    ..., KS Miami, FL Minneapolis, MN Ontario, CA Parish, NY Salem, OR San Jose, CA San Rafael, CA Tampa, FL Teterboro, NJ Marine Argentina Buenos Aires Australia Perth Brazil Rio de Janeiro Chile Viña del Mar Costa Rica San José Denmark Køge Copenhagen Germany Bremen Gibraltar Greece Athens Hong Kong...

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