World Fuel Services 2014 Annual Report Download - page 30

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25
Gross Profit. Our gross profit for 2014 was $813.6 million, an increase of $60.9 million, or 8.1%, as compared to 2013. Our
gross profit during these periods was attributable to the following segments (in thousands):
2014 2013 $ Change
Aviation segment $ 321,596 $ 327,178 $ (5,582)
Marine segment 205,612 177,052 28,560
Land segment 286,414 248,528 37,886
Total $ 813,622 $ 752,758 $ 60,864
Our aviation segment gross profit for 2014 was $321.6 million, a decrease of $5.6 million, or 1.7%, as compared to 2013.
Of the decrease in aviation segment gross profit, $67.4 million was due to lower gross profit per gallon sold principally due
to changes in customer mix. This decrease was partially offset by an increase of $49.4 million due to increased volume
attributable to new and existing customers and $12.4 million due to gross profit from acquired businesses.
Our marine segment gross profit for 2014 was $205.6 million, an increase of $28.6 million, or 16.1%, as compared to 2013.
Of the increase in marine segment gross profit, $35.0 million was due to increased gross profit per metric ton sold principally
due to certain higher margin business activity, which was partially offset by $6.4 million due to decreased volume.
Our land segment gross profit for 2014 was $286.4 million, an increase of $37.9 million, or 15.2%, as compared to 2013.
Of the increase in land segment gross profit, $51.2 million was due to gross profit from acquired businesses and $13.6
million was due to increased volume attributable to new and existing customers. This increase was partially offset by $17.0
million in lower gross profit per gallon sold principally due to fluctuations in customer mix. Additionally, our crude oil
transloading joint venture, which was deconsolidated effective December 31, 2013, generated $9.9 million in gross profit in
2013 and is not included in our land segment gross profit in 2014.
Operating Expenses. Total operating expenses for 2014 were $544.5 million, an increase of $56.1 million, or 11.5%, as
compared to 2013. The following table sets forth our expense categories (in thousands):
2014 2013 $ Change
Compensation and employee benefits $ 319,842 $ 288,021 $ 31,821
Provision for bad debt 3,757 11,745 (7,988)
General and administrative 220,875 188,634 32,241
Total $ 544,474 $ 488,400 $ 56,074
The $31.8 million increase in compensation and employee benefits was principally due to the inclusion of $27.3 million of
expenses from acquired businesses and an executive non-renewal charge of $4.8 million related to the non-renewal of the
employment agreement of our former Executive Chairman of the Board of Directors. The $8.0 million decrease in provision
for bad debt was primarily due to an overall decrease in accounts receivable balances throughout the second half of the
year as a result of declining world oil prices. The $32.2 million increase in general and administrative expenses was due to
the inclusion of $24.6 million in expenses from acquired businesses and acquisition related expenses and $7.6 million
principally due to increased professional fees and general insurance expenses.
Income from Operations. Our income from operations for 2014 was $269.1 million, an increase of $4.8 million, or 1.8%, as
compared to 2013. Income from operations during these periods was attributable to the following segments (in thousands):
2014 2013 $ Change
Aviation segment $ 142,303 $ 150,886 $ (8,583)
Marine segment 90,029 73,770 16,259
Land segment 90,335 84,767 5,568
322,667 309,423 13,244
Corporate overhead – unallocated 53,519 45,065 8,454
Total $ 269,148 $ 264,358 $ 4,790
Our aviation segment income from operations for 2014 was $142.3 million, a decrease of $8.6 million, or 5.7%, as compared
to 2013. This decrease resulted from $5.6 million in lower gross profit and a $3.0 million increase in operating expenses.
Of the increase in aviation segment operating expenses, $9.6 million was due to the inclusion of acquired businesses, which
was partially offset by a decrease of $6.6 million principally due to compensation and employee benefits.
Our marine segment income from operations for 2014 was $90.0 million, an increase of $16.3 million, or 22.0%, as
compared to 2013. This increase resulted from $28.6 million in higher gross profit, which was partially offset by an increase