World Fuel Services 2013 Annual Report Download - page 35

The $22.1 million increase in compensation and employee benefits was due to $13.5 million in increased expenses to support our
growing global business and $8.6 million related to the inclusion of expenses from acquired businesses. We had a lower increase in
our accounts receivable balance in 2012 as compared to 2011, resulting in a $3.4 million decrease in provision for bad debt in 2012. The
$19.7 million increase in general and administrative expenses was due to $10.3 million related to the inclusion of expenses from
acquired businesses, $4.9 million in increased expenses to support our growing global business and $4.5 million in expenses related to
the acquisition of the Multi Service business in December 2012.
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):
2012 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 financing 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 Attributable to Noncontrolling Interest. For 2012, net income attributable to noncontrolling interest was $12.0 million, an
increase of $6.8 million as compared to 2011. The increase was principally due to the results of our crude oil marketing joint venture.
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.
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