World Fuel Services 2012 Annual Report Download - page 92

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As discussed in Note 1, we currently use the Black-Scholes option pricing model to estimate the fair
value of SSAR Awards granted to employees and non-employee directors. There were no SSAR Awards
issued in 2012 and 2011. The weighted average fair value of the SSAR Awards for 2010 was $10.97 and
the assumptions used to determine such 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 awards, which is included as capital in excess of par value in the
accompanying consolidated balance sheets. The unrecognized compensation cost as of December 31,
2012 is expected to be recognized as compensation expense over a weighted average period of
1.5 years as follows (in thousands):
Year Ended December 31,
2013 $13,791
2014 10,706
2015 5,392
2016 2,680
2017 640
$33,209
Other Comprehensive Loss and Accumulated Other Comprehensive Loss
As of December 31, 2012 and 2011, our accumulated other comprehensive loss amounted to
$16.0 million and $6.5 million, respectively. Our other comprehensive loss consists of foreign currency
translation adjustments related to our subsidiaries that have a functional currency other than the U.S.
dollar and gains relating to cash flow hedges. Our foreign currency translation adjustments amounted to
losses of $9.6 million and $11.3 million in 2012 and 2011, respectively, and a net foreign currency
translation adjustment gain of $1.0 million in 2010. The foreign currency translation adjustment losses
for 2012 and 2011 were primarily due to the strengthening of the U.S. dollar as compared to the Brazilian
Real. We recorded gains of $0.1 million on our cash flow hedges in 2012.
8. Income Taxes
U.S. and foreign income (loss) before income taxes consist of the following (in thousands):
2011 2010
United States $ 49,021 $ 56,836 $ (2,886)
Foreign 190,574 181,367 180,416
$239,595 $238,203 $177,530
The income tax provision (benefit) related to income before income taxes consists of the following
components (in thousands):
2011 2010
Current:
U.S. federal statutory tax $ 6,858 $ 7,685 $12,245
State 938 2,767 1,358
Foreign 24,649 27,514 22,367
32,445 37,966 35,970
Deferred:
U.S. federal statutory tax 7,642 6,218 (3,776)
State 1,380 2,194 (1,926)
Foreign 643 (6,771) (1,677)
9,665 1,641 (7,379)
Non-current tax (income) expense (3,866) (606) 2,436
$38,244 $39,001 $31,027
73
2012
2012