INT World Fuel Services Corporation

World Fuel Services Corporation (NYSE: INT), a global leader in the marketing and sale of marine, aviation and land fuel products and related services, today reported second quarter net income of $37.0 million or $0.61 diluted earnings per share compared to $27.7 million or $0.46 diluted earnings per share in the second quarter of 2009. Non-GAAP net income for the second quarter, which excludes share-based compensation and amortization of acquired intangible assets, was $40.2 million or $0.66 non-GAAP diluted earnings per share compared to $30.7 million or $0.51 non-GAAP diluted earnings per share in the second quarter of 2009. Our second quarter GAAP and non-GAAP results were favorably affected by a gain of $1.9 million relating to a commercial paper investment for which a $1.9 million impairment charge was taken in the third quarter of 2007. The after-tax effect of the gain was $1.4 million, or $0.02 per share.

The company’s aviation segment generated record gross profit of $52.9 million in the second quarter of 2010, an increase of $4.5 million or 9% sequentially, and an increase of $13.1 million or 33% year over year. The marine segment generated gross profit of $43.2 million, increases of $3.8 million or 10% sequentially, and $2.9 million or 7% from last year’s results. The company’s land segment posted gross profit of $11.5 million in the second quarter, an increase of 4% sequentially, and flat year over year.

“We posted strong results in the second quarter with record aviation volume as well as sequential and year over year volume increases in both the marine and land segments,” said Paul H. Stebbins, chairman and chief executive officer of World Fuel Services Corporation. “We continue to focus on driving profitable growth while maintaining our risk management discipline, which positions us well as end markets begin to recover.”

“We saw improvements in the marine segment, which achieved the highest level of quarterly gross profit since the first quarter of 2009,” stated Michael J. Kasbar, president and chief operating officer. “Furthermore, as evidenced by the recent Lakeside Oil acquisition, we remain committed to growth, both organically and through strategic acquisitions.”

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 and amortization of acquired intangible assets, primarily because we do not believe they are reflective of the company’s core operating results. We believe that these non-GAAP financial measures, when considered in conjunction with our financial information prepared in accordance with GAAP, are useful for investors to evaluate our core operating results and trends.

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 earnings per share may not be comparable to the presentation of such metrics by other companies. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measure. A reconciliation of GAAP to non-GAAP results has been provided in the financial statement tables included in this press release.

Information Relating to Forward-Looking Statements

With the exception of historical information in this news release, this document includes forward-looking statements that involve risks and uncertainties, including, but not limited to, quarterly fluctuations in results, the creditworthiness of customers and counterparties and our ability to collect accounts receivable and settle derivatives contracts, 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 operate, our failure to effectively hedge certain financial risks associated with the use of derivatives, non-performance by counterparties or customers on derivatives contracts, the integration of acquired businesses, uninsured losses, our ability to retain and attract senior management and other key employees and other risks detailed from time to time in the Company’s Securities and Exchange Commission filings. Actual results may differ materially from any forward-looking statements set forth herein.

About World Fuel Services Corporation

Headquartered in Miami, Florida, World Fuel Services is a global leader in the marketing and sale of marine, aviation and land fuel products, as well as related services. World Fuel Services sells fuel and delivers services to its clients at more than 6,000 locations in 200 countries, including airports, seaports, tanker truck loading terminals and other customer storage locations. With 44 strategically located global offices, World Fuel Services offers its clients a value-added outsource service for the supply, quality control, logistical support and price risk management of marine, aviation and land fuel.

The Company’s global team of market makers provides deep domain expertise in all aspects of marine, aviation and land fuel management. World Fuel Services’ marine customers include international container and tanker fleets and time-charter operators, as well as the United States and foreign governments. Aviation customers include commercial airlines, cargo carriers and corporate clientele, as well as the United States and foreign governments. Land customers include petroleum distributors, retail petroleum operators, and industrial, commercial and government accounts. For more information, call (305) 428-8000 or visit http://www.wfscorp.com.

  WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED - IN THOUSANDS, EXCEPT PER SHARE DATA)         For the Three Months ended For the Six Months ended June 30, June 30, 2010 2009 2010 2009     Revenue $ 4,397,275 $ 2,533,340 $ 8,315,296 $ 4,547,283 Cost of revenue   4,289,706   2,441,772   8,108,909   4,368,380   Gross profit   107,569   91,568   206,387   178,903   Operating expenses: Compensation and employee benefits 38,900 35,079 73,701 68,872 Provision for bad debt 1,696 464 2,065 922 General and administrative   21,909   19,898   43,432   39,877   Total operating expenses   62,505   55,441   119,198   109,671   Income from operations 45,064 36,127 87,189 69,232 Non-operating expenses, net   248   561   852   1,917   Income before income taxes 44,816 35,566 86,337 67,315 Provision for income taxes   7,765   7,623   15,446   13,553   Net income including noncontrolling interest 37,051 27,943 70,891 53,762 Less: net income attributable to noncontrolling interest   74   201   211   190   Net income attributable to World Fuel $ 36,977 $ 27,742 $ 70,680 $ 53,572   Basic earnings per share $ 0.62 $ 0.47 $ 1.19 $ 0.91   Basic weighted average common shares   59,418   58,864   59,371   58,586   Diluted earnings per share $ 0.61 $ 0.46 $ 1.17 $ 0.91   Diluted weighted average common shares   60,685   59,846   60,646   59,132   WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED - IN THOUSANDS)     As of June 30, December 31, 2010 2009   Assets: Current assets: Cash and cash equivalents $ 297,386 $ 298,843 Short-term investments 10,000 8,100 Accounts receivable, net 1,115,878 951,398 Inventories 140,693 126,793 Short-term derivative assets, net 10,171 11,853 Prepaid expenses and other current assets   81,082   66,991   Total current assets 1,655,210 1,463,978   Property and equipment, net 47,840 38,777   Goodwill, identifiable intangible and other assets   240,393   238,473   Total assets $ 1,943,443 $ 1,741,228   Liabilities and equity: Liabilities: Current liabilities: Short-term debt $ 6,259 $ 6,684 Accounts payable 947,214 796,978 Short-term derivative liabilities, net 10,970 9,133 Customer deposits 52,582 63,967 Accrued expenses and other current liabilities   71,106   70,980   Total current liabilities 1,088,131 947,742   Long-term debt 4,728 9,925 Other long-term liabilities   49,607   50,312 Total liabilities   1,142,466   1,007,979   Equity: World Fuel shareholders' equity 800,538 733,021 Noncontrolling interest equity   439   228 Total equity   800,977   733,249   Total liabilities and equity $ 1,943,443 $ 1,741,228   WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED - IN THOUSANDS)         For the Three Months ended For the Six Months ended June 30, June 30, 2010 2009 2010 2009   Cash flows from operating activities: Net income including noncontrolling interest $ 37,051   $ 27,943   $ 70,891   $ 53,762  

Adjustments to reconcile net income including noncontrolling interest to net cash provided by operating activities:

Depreciation and amortization 4,205 4,302 8,624 8,140 Provision for bad debt 1,696 464 2,065 922 Gain on short-term investments (1,900 ) - (1,900 ) - Deferred income tax provision (benefit) 183 5,657 (1,272 ) 3,184 Share-based payment award compensation costs 2,411 2,094 3,717 3,885 Foreign currency losses (gains), net 68 (405 ) 428 (192 ) Other (6 ) 289 (96 ) 525 Changes in assets and liabilities, net of acquisitions   (36,502 )   (8,965 )   (58,685 )   50,759   Total adjustments   (29,845 )   3,436     (47,119 )   67,223   Net cash provided by operating activities   7,206     31,379     23,772     120,985     Cash flows used in investing activities, net   (3,262 )   (59,169 )   (12,468 )   (60,472 )   Cash flows used in financing activities, net   (9,314 )   (6,595 )   (11,411 )   (22,883 )  

Effect of exchange rate changes on cash and cash equivalents

  (324 )   868     (1,350 )   829     Net (decrease) increase in cash and cash equivalents (5,694 ) (33,517 ) (1,457 ) 38,459   Cash and cash equivalents, beginning of period   303,080     386,328     298,843     314,352     Cash and cash equivalents, end of period $ 297,386   $ 352,811   $ 297,386   $ 352,811     WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (UNAUDITED - IN THOUSANDS, EXCEPT PER SHARE DATA)         For the Three Months ended For the Six Months ended June 30, June 30, 2010 2009 2010 2009   Non-GAAP financial measures and reconciliation:   GAAP net income attributable to World Fuel $ 36,977 $ 27,742 $ 70,680 $ 53,572 Share-based compensation expense, net of taxes 1,741 1,325 2,744 2,526 Intangible asset amortization expense, net of taxes   1,447   1,592   2,941   2,857 Non-GAAP net income attributable to World Fuel $ 40,165 $ 30,659 $ 76,365 $ 58,955   GAAP diluted earnings per share $ 0.61 $ 0.46 $ 1.17 $ 0.91 Share-based compensation expense, net of taxes 0.03 0.02 0.05 0.04 Intangible asset amortization expense, net of taxes   0.02   0.03   0.05   0.05 Non-GAAP diluted earnings per share $ 0.66 $ 0.51 $ 1.27 $ 1.00   WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES BUSINESS SEGMENT INFORMATION (UNAUDITED - IN THOUSANDS)       For the Three Months ended For the Six Months ended June 30, June 30, 2010 2009 2010 2009 Revenue: Marine segment $ 2,276,651 $ 1,381,496 $ 4,375,263 $ 2,484,358 Aviation segment 1,691,042 832,166 3,150,766 1,542,581 Land segment   429,582     319,678     789,267     520,344   $ 4,397,275   $ 2,533,340   $ 8,315,296   $ 4,547,283     Gross profit: Marine segment $ 43,204 $ 40,347 $ 82,593 $ 87,439 Aviation segment 52,887 39,744 101,262 71,765 Land segment   11,478     11,477     22,532     19,699   $ 107,569   $ 91,568   $ 206,387   $ 178,903     Income from operations: Marine segment $ 23,972 $ 22,639 $ 43,980 $ 51,981 Aviation segment 28,701 17,727 55,395 29,399 Land segment   1,780     3,882     4,128     4,971   54,453 44,248 103,503 86,351 Corporate overhead   (9,389 )   (8,121 )   (16,314 )   (17,119 ) $ 45,064   $ 36,127   $ 87,189   $ 69,232