INT World Fuel Services Corporation

Record Volume, Revenue, Gross Profit, Net Income and EPS

World Fuel Services Corporation (NYSE: INT), a leading global fuel logistics company, principally engaged in the marketing, sale and distribution of aviation, marine and land fuel and related products and services, today reported third quarter net income of $55.7 million or $0.78 diluted earnings per share compared to $51.5 million or $0.72 diluted earnings per share in the third quarter of 2013. Non-GAAP net income and diluted earnings per share for the third quarter, excluding share-based compensation, amortization of acquired intangible assets and expenses related to recent acquisitions were $64.6 million and $0.91, respectively, compared to $57.9 million and $0.81 in 2013.

“We were pleased with our results this quarter as we posted record results despite continued global-economic headwinds,” stated Michael J. Kasbar, chairman and chief executive officer. “We remain focused on executing on the significant growth opportunities that exist across all of our business segments worldwide.”

The company’s aviation segment generated gross profit of $96.2 million, an increase of $14.4 million or 18% sequentially and $6.5 million or 7% year-over-year. The company’s marine segment generated gross profit of $49.4 million, an increase of $0.6 million or 1% sequentially and $9.2 million or 23% year-over-year. The company’s land segment posted gross profit of $69.0 million, an increase of $8.1 million or 13% sequentially and $12.6 million or 22% year-over-year.

“The record results posted this quarter are a testament to our successful growth strategies and our well-diversified business model,” said Ira M. Birns, executive vice president and chief financial officer. “In addition, we have now generated positive cash flow from operations for the ninth consecutive quarter, further contributing to the strength of our balance sheet and providing ample liquidity to continue investing in both organic initiatives and strategic investment opportunities.”

Non-GAAP Financial Measures

This press release includes selected financial information that has not been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). This information includes non-GAAP net income and non-GAAP diluted earnings per share. The non-GAAP financial measures exclude costs associated with share based compensation, amortization of acquired intangible assets, expenses related to the acquisition of Watson Petroleum Limited (“Watson Petroleum”) and Colt International, L.L.C. (“Colt”) and the executive non-renewal charge primarily because we do not believe they are reflective of the Company's core operating results. We believe the exclusion of share-based compensation from operating expenses is useful given the variation in expense that can result from changes in the fair value of our common stock, the effect of which is unrelated to the operational conditions that give rise to variations in the components of our operating costs. Also, we believe the exclusion of the amortization of acquired intangible assets, as well as the expenses related to the acquisition of Watson Petroleum and Colt and the executive non-renewal charge, are useful for purposes of evaluating operating performance of our core operating results and comparing them period-over-period. We believe that these non-GAAP financial measures, when considered in conjunction with our financial information prepared in accordance with GAAP, are useful to investors to further aid in evaluating the ongoing financial performance of the Company and to provide greater transparency as supplemental information to our GAAP results.

Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. In addition, our presentation of non-GAAP net income and non-GAAP diluted earnings per common share may not be comparable to the presentation of such metrics by other companies. Non-GAAP diluted earnings per common share is computed by dividing non-GAAP 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 period and the number of additional shares of common stock that would have been outstanding if our outstanding potentially dilutive securities had been issued. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures.

Information Relating to Forward-Looking Statements

This release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our expectations about growth opportunities and our future investment opportunities. These forward-looking statements are qualified in their entirety by cautionary statements and risk factor disclosures contained in the company’s Securities and Exchange Commission (“SEC”) filings, including the company’s Annual Report on Form 10-K filed with the SEC on February 14, 2014. Actual results may differ materially from any forward-looking statements due to risks and uncertainties, including, but not limited to: our ability to effectively integrate and derive benefits from acquired businesses, our ability to capitalize on new market opportunities, potential liabilities and the extent of any insurance coverage, the outcome of pending litigation and other proceedings, the impact of quarterly fluctuations in results, the creditworthiness of our customers and counterparties and our ability to collect accounts receivable, fluctuations in world oil prices or foreign currency, changes in political, economic, regulatory, or environmental conditions, adverse conditions in the markets or industries in which we or our customers and suppliers operate, our failure to effectively hedge certain financial risks associated with the use of derivatives, non-performance by counterparties or customers on derivatives contracts, loss of, or reduced sales, to a significant government customer, uninsured losses, the impact of natural disasters, adverse results in legal disputes, unanticipated tax liabilities, our ability to retain and attract senior management and other key employees and other risks detailed from time to time in the company’s SEC filings. New risks emerge from time to time and it is not possible for management to predict all such risk factors or to assess the impact of such risks on our business. Accordingly, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, changes in expectations, future events, or otherwise.

About World Fuel Services Corporation

Headquartered in Miami, Florida, World Fuel Services is a leading global fuel logistics company, principally engaged in the marketing, sale and distribution of aviation, marine and land fuel products and related services on a worldwide basis. World Fuel Services sells fuel and delivers services to its clients at more than 8,000 locations in more than 200 countries and territories worldwide.

The company's global team of market makers provides deep domain expertise in all aspects of aviation, marine and land fuel management. Aviation customers include commercial airlines, cargo carriers, private aircraft and fixed base operators (FBOs), as well as the United States and foreign governments. World Fuel Services' marine customers include international container and tanker fleets, cruise lines and time-charter operators, as well as the United States and foreign governments. Land customers include petroleum distributors, retail petroleum operators, and industrial, commercial, and government accounts. The company also offers transaction management services which consist of card payment solutions and merchant processing services to customers in the aviation, marine and land transportation industries. For more information, call 305-428-8000 or visit www.wfscorp.com.

  WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED - IN THOUSANDS)     As of September 30, December 31, 2014 2013   Assets: Current assets: Cash and cash equivalents $ 388,544 $ 292,061 Accounts receivable, net 2,837,050 2,538,642 Inventories 679,512 655,046 Prepaid expenses and other current assets   424,271   329,752   Total current assets 4,329,377 3,815,501   Property and equipment, net 204,794 129,685   Goodwill, identifiable intangible and other non-current assets   989,494   794,091   Total assets $ 5,523,665 $ 4,739,277   Liabilities and equity: Liabilities: Current liabilities: Short-term debt $ 16,390 $ 14,647 Accounts payable 2,455,915 2,210,427 Accrued expenses and other current liabilities   375,679   289,441   Total current liabilities 2,847,984 2,514,515   Long-term debt 750,885 449,064 Other long-term liabilities   113,086   96,804 Total liabilities   3,711,955   3,060,383   Equity: World Fuel shareholders' equity 1,808,364 1,673,898 Noncontrolling interest equity   3,346   4,996 Total equity   1,811,710   1,678,894   Total liabilities and equity $ 5,523,665 $ 4,739,277     WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED - IN THOUSANDS, EXCEPT EARNINGS PER SHARE DATA)         For the Three Months ended For the Nine Months ended September 30, September 30, 2014 2013 2014 2013     Revenue $ 11,713,463 $ 10,493,661 $ 33,606,834 $ 31,157,294 Cost of revenue   11,498,855     10,307,320     33,012,678     30,600,116     Gross profit   214,608     186,341     594,156     557,178     Operating expenses: Compensation and employee benefits 85,171 72,184 233,609 214,358 Provision for bad debt 1,193 1,863 3,533 5,675 General and administrative   54,141     48,091     158,795     137,265     Total operating expenses   140,505     122,138     395,937     357,298     Income from operations 74,103 64,203 198,219 199,880 Non-operating expenses, net   (6,202 )   (5,715 )   (11,905 )   (14,025 )   Income before income taxes 67,901 58,488 186,314 185,855 Provision for income taxes   13,441     8,191     34,964     32,090     Net income including noncontrolling interest 54,460 50,297 151,350 153,765 Net (loss) income attributable to noncontrolling interest   (1,200 )   (1,175 )   (3,263 )   2,552     Net income attributable to World Fuel $ 55,660   $ 51,472   $ 154,613   $ 151,213     Basic earnings per common share $ 0.79   $ 0.72   $ 2.18   $ 2.12     Basic weighted average common shares   70,796     71,371     70,770     71,387     Diluted earnings per common share $ 0.78   $ 0.72   $ 2.17   $ 2.10     Diluted weighted average common shares   71,346     71,877     71,340     71,970       WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED - IN THOUSANDS)         For the Three Months ended For the Nine Months ended September 30, September 30, 2014 2013 2014 2013   Cash flows from operating activities: Net income including noncontrolling interest $ 54,460   $ 50,297   $ 151,350   $ 153,765   Adjustments to reconcile net income including noncontrolling interest to net cash provided by operating activities: Depreciation and amortization 14,798 10,525 41,865 32,812 Provision for bad debt 1,193 1,863 3,533 5,675 Share-based payment award compensation costs 3,612 4,381 11,281 12,578 Other (6,387 ) (413 ) 2,771 (462 ) Change in cash collateral with financial counterparties (29,725 ) 20,516 (30,915 ) 19,793 Changes in assets and liabilities, net of acquisitions   (10,892 )   (25,712 )   (50,820 )   (10,414 ) Total adjustments   (27,401 )   11,160     (22,285 )   59,982   Net cash provided by operating activities   27,059     61,457     129,065     213,747     Cash flows from investing activities: Acquisition of businesses, net of cash acquired and other investments (66,510 ) (14,997 ) (230,715 ) (40,412 ) Capital expenditures (17,088 ) (25,642 ) (37,102 ) (50,286 ) Escrow payment related to an assumed obligation of an acquired business - - (21,724 ) - Purchase of investments (76 ) - (1,206 ) (21,588 ) Proceeds from the sale of short-term investments - - - 21,588 Other   278     (469 )   566     (469 ) Net cash used in investing activities   (83,396 )   (41,108 )   (290,181 )   (91,167 )   Cash flows from financing activities: Borrowings of debt, net 65,652 104,385 282,577 75,180 Dividends paid on common stock (2,648 ) (2,678 ) (7,948 ) (8,020 ) Other   (11,240 )   (22,025 )   (14,699 )   (28,431 ) Net cash provided by financing activities   51,764     79,682     259,930     38,729     Effect of exchange rate changes on cash and cash equivalents   (3,474 )   712     (2,331 )   (826 )   Net (decrease) increase in cash and cash equivalents (8,047 ) 100,743 96,483 160,483   Cash and cash equivalents, as of beginning of period   396,591     232,480     292,061     172,740     Cash and cash equivalents, as of end of period $ 388,544   $ 333,223   $ 388,544   $ 333,223         WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (UNAUDITED - IN THOUSANDS, EXCEPT EARNINGS PER SHARE DATA)     For the Three Months ended For the Nine Months ended September 30, September 30, 2014 2013 2014 2013   Non-GAAP financial measures and reconciliation:   GAAP net income attributable to World Fuel $ 55,660 $ 51,472 $ 154,613 $ 151,213 Share-based compensation expense, net of income taxes (1) 2,526 2,909 6,977 8,370 Intangible asset amortization expense, net of income taxes (2) 6,028 3,501 14,837 10,809 Expenses related to the acquisition of Watson Petroleum and Colt, net of income taxes(3) 396 - 1,536 - Executive non-renewal charge, net of income taxes (4)   -   -   2,994   - Non-GAAP net income attributable to World Fuel $ 64,610 $ 57,882 $ 180,957 $ 170,392   GAAP diluted earnings per common share $ 0.78 $ 0.72 $ 2.17 $ 2.10 Share-based compensation expense, net of income taxes (1) 0.04 0.04 0.10 0.12 Intangible asset amortization expense, net of income taxes (2) 0.08 0.05 0.21 0.15 Expenses related to the acquisition of Watson Petroleum and Colt, net of income taxes (3) 0.01 - 0.02 - Executive non-renewal charge, net of income taxes (4)   -   -   0.04   - Non-GAAP diluted earnings per common share $ 0.91 $ 0.81 $ 2.54 $ 2.37  

(1)The pre-tax amount of share-based compensation expense was $3,593 and $4,381 for the three months ended September 30, 2014 and 2013, respectively, and $10,160 and $12,578 for the nine months ended September 30, 2014 and 2013, respectively.

(2)The pre-tax amount of intangible asset amortization expense was $6,735 and $5,471 for the three months ended September 30, 2014 and 2013, respectively, and $19,826 and $16,910 for the nine months ended September 30, 2014 and 2013, respectively.

(3)The pre-tax amount of the expenses related to the acquisition of Watson Petroleum and Colt was $628 and $1,768 for the three and nine months ended September 30, 2014, respectively.

(4)The pre-tax amount of the executive non-renewal charge was $4,751 for the nine months ended September 30, 2014.

  WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES BUSINESS SEGMENTS INFORMATION (UNAUDITED - IN THOUSANDS)         For the Three Months ended For the Nine Months ended September 30, September 30, 2014 2013 2014 2013 Revenue: Aviation segment $ 4,675,530 $ 4,179,018 $ 13,361,838 $ 11,854,676 Marine segment 3,725,612 3,575,777 10,738,646 11,260,025 Land segment   3,312,321   2,738,866   9,506,350   8,042,593 $ 11,713,463 $ 10,493,661 $ 33,606,834 $ 31,157,294   Gross profit: Aviation segment $ 96,235 $ 89,758 $ 246,980 $ 242,783 Marine segment 49,404 40,223 146,087 134,237 Land segment   68,969   56,360   201,089   180,158 $ 214,608 $ 186,341 $ 594,156 $ 557,178   Income from operations: Aviation segment $ 47,330 $ 41,002 $ 114,553 $ 109,755 Marine segment 20,933 17,019 62,903 56,340 Land segment   19,108   15,106   60,020   63,608 87,371 73,127 237,476 229,703 Corporate overhead - unallocated   13,268   8,924   39,257   29,823 $ 74,103 $ 64,203 $ 198,219 $ 199,880  

World Fuel Services CorporationIra M. Birns, Executive Vice President &Chief Financial OfficerorGlenn Klevitz, Vice President & Assistant Treasurer305-428-8000