World Fuel Services 2012 Annual Report Download - page 47

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Income from Operations. Our income from operations for 2012 was $257.0 million. Income from
operations during these periods was attributable to the following segments (in thousands):
2011 $ Change
Aviation segment $128,153 $146,411 $(18,258)
Marine segment 103,229 95,982 7,247
Land segment 75,291 62,049 13,242
306,673 304,442 2,231
Corporate overhead – unallocated 49,650 47,470 2,180
Total $257,023 $256,972 $ 51
Our aviation segment income from operations for 2012 was $128.2 million, a decrease of $18.3 million,
or 12.5%, as compared to 2011. This decrease resulted from $11.5 million in lower gross profit and
$6.8 million in increased operating expenses principally attributable to the inclusion of expenses from
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. This increase resulted from $12.9 million in higher gross profit, which was
partially offset by increased operating expenses of $5.7 million.
Our land segment income from operations for 2012 was $75.3 million, an increase of $13.2 million, or
21.3%, as compared to 2011. This increase resulted from $37.0 million in higher gross profit, which was
partially offset by increased operating expenses of $23.8 million. Of the increase in land segment
operating expenses, $16.6 million was related to the inclusion of expenses from acquired businesses
and $7.2 million was due to increased expenses to support our growing global business.
Corporate overhead costs not charged to the business segments for 2012 were $49.7 million, an
increase of $2.2 million, or 4.6%, as compared to 2011.
Non-Operating Expenses, net. For 2012, we had non-operating expenses, net of $17.4 million, a
decrease of $1.3 million, or 7.1%, as compared to 2011. This decrease was due to a $2.8 million positive
change related to foreign currency transaction gains and losses and a $1.8 million positive change
related to non-operating activities. This decrease was partially offset by a $3.3 million increase in interest
expense and other financng costs, net, as a result of higher average borrowings in 2012 as compared to
2011.
Income Taxes. For 2012, our effective income tax rate was 16.0% and our income tax provision was
$38.2 million, as compared to an effective income tax rate of 16.4% and an income tax provision of
$39.0 million for 2011. The lower effective income tax rate for 2012 resulted primarily from differences in
the actual results of our subsidiaries in tax jurisdictions with different income tax rates as compared to
2011, the reduction of certain income tax reserves for uncertain tax positions due to a discrete item
related to a change in estimate, statutes of limitation lapses and the settlement of an income tax audit.
Net Income and Diluted Earnings per Common Share. Our net income for 2012 was $189.3 million, a
decrease of $4.7 million, or 2.4%, as compared to 2011. Diluted earnings per common share for 2012
was $2.64 per common share, a decrease of $0.07 per common share, or 2.6%, as compared to 2011.
28
2012