WorldFuel 2003AnnualReport

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  • 1. 2003 ANNUAL REPORT
  • 2. CORPORATE OVERVIEW W orld Fuel Services Corporation is a global leader in the downstream marketing and financing of aviation and marine fuel products and related services. The major oil companies’ marketer of choice in the aviation and shipping industries, World Fuel Services provides fuel to commercial and corporate aircraft and ships at more than 2,200 airports and seaports worldwide. The Company’s market share is estimated at 2% of the global aviation market and 12% of the global marine market. FINANCIAL HIGHLIGHTS O ur mission is to sustain long-term, profitable growth for share- holders and maintain a global leadership position in the downstream marketing and financing of aviation and marine fuel products and related services. We will accomplish this by providing exceptional service and value to customers and suppliers and maintain- ing a corporate environment that provides employees with opportunities for personal and professional advancement.
  • 3. W O R L D F U E L S E RV I C E S C O R P O R A T I O N FINANCIAL HIGHLIGHTS As of, and for the As of, and for the Year Nine Months As of, and for the Year Ended December 31, Ended December 31, Ended March 31, 2003 2002 Change 2002 2001 2002 2001 (In thousands, except diluted earnings per share data and financial ratios) Income Statement Data Revenue $2,661,790 $1,898,181 40.2% $1,546,897 $1,013,781 $1,365,065 $1,529,242 Income from operations 26,990 20,169* 33.8% 13,786 14,906 21,289 14,152 Net income 21,874 14,345** 52.5% 9,872 12,762 17,235 10,634 Diluted earnings per share $1.96 $1.32** 48.5% $0.91 $1.20 $1.62 $1.00 Diluted weighted average shares 11,169 10,895 2.5% 10,900 10,652 10,646 10,663 Balance Sheet Data Total assets $ 357,678 $ 312,287 $ 312,287 $ 209,693 $ 257,923 $ 222,165 Stockholders’ equity 148,379 127,730 127,730 113,792 116,439 103,860 Financial Ratios Current ratio 1.5 1.5 1.5 1.9 1.6 1.7 Debt/equity ratio 2.4% 4.6% 4.6% 5.3% 8.6% 5.3% Return on assets 6.8% 5.3%** 4.6% 7.7% 7.6% 4.8% Return on equity 15.9% 12.1%** 11.0% 15.7% 15.7% 10.5% REVENUE NET INCOME TOTAL ASSETS STOCKHOLDERS’ EQUITY (in millions) (in millions) (in millions) (in millions) $2,661.8 $357.7 $148.4 $21.9 $312.3 $127.7 $14.3 $1,898.2 ’02** ’03 ’02 ’03 ’02 ’03 ’02 ’03 * Includes non-recurring executive severance charges of $4.5 million. ** Reflects two non-recurring, after-tax charges totaling $3.7 million, or $0.34 per diluted share, relating to executive severance and debt settlement. 1
  • 4. PROVIDING MARINE AND TO OUR SHAREHOLDERS: A global team animated by a keen sense of shared mission can achieve extraordinary things. Never has this been more clearly demonstrated than it was this last year at World Fuel. The Company reported record levels of revenue, volume and earnings for 2003 and it is with great pride that we applaud each and every one of our people for their contribution to this collec- tive success. Of course, true success is measured in many ways. Certainly, it is about financial per- formance, good corporate governance and transparency. But, as important are the more intangible metrics of success: passion, hard work, integrity, determination, commitment to excellence and a universal appreciation that (as Andy Grove, of Intel Corporation once said) “No one of us is as smart as all of us.” Success is about having a deep-rooted belief that we have something of genuine value to offer our customers, suppliers and partners around the world. Success is projecting confi- dence. Success is building a culture of responsiveness and communication. Success is about solid consistent execution. Success is about the open exchange of ideas and challenging the status quo. Ultimately, success is about character. And it is the character of the people who make up the World Fuel team we most value and appreciate. It is character which informs our sense of corporate citi- zenship and defines our relationship with the market. It is character which will drive this Company’s continued transformation and serve as an essential ingredient in future growth and expansion. FOR YEAR 2003: THE For calendar 2003, total revenue for the Company was $2.7 billion, an increase of $764 million, or 40%, versus calendar 2002. The revenue increase was a result of both growth in volume and increased prices. Diluted earnings per share increased by 49% from $1.32 to $1.96. Included in the results for 2002 were the effects of the non-recurring, after- tax charges of the executive severance and a debt settlement. Excluding these non-recurring after-tax charges, diluted earnings per share would have been $1.66 for the calendar year 2002. Our day sales outstanding improved to 25 days, reflecting the continued suc- cess of the Company’s effort to improve the overall quality of its Paul H. Stebbins Michael J. Kasbar accounts receivables. Chairman and President and Chief Executive Officer Chief Operating Officer 2
  • 5. W O R L D F U E L S E RV I C E S C O R P O R A T I O N AVIATION FUEL WORLDWIDE FINANCIAL STRENGTHS: World Fuel Services is anchored by a solid balance sheet. At December 31, 2003, our cash balance was $76 million, with working capital of $106 million and shareholders’ equity of $148 million. Total assets at World Fuel exceeded $357 million. On December 19, 2003, the Company announced a new $100 million revolving credit facility with LaSalle Bank, HSBC, Merrill Lynch, Commercebank and IDB. Arranging this facility pro- vided an opportunity for a number of banks to conduct an in-depth review of our financials and our business model and we are pleased that the offering was over-subscribed. We could not be hap- pier with the final list of participating banks and feel confident that they will not only support our current plans for business growth, but will be able to continue to grow with us in the years ahead. AVIATION DIVISION: In the aviation segment, 2003 was a year of significant developments across the spectrum. Our corporate flight divi- AVIATION sion, Baseops, had a very good year with continued growth INCOME FROM REVENUE in the sale of fuel and flight services to a diversified portfo- OPERATIONS (in millions) lio of corporate and commercial customers. Our partnership (in millions) with Jeppesen continues to grow, has added hundreds of new $1,024.8 fuel customers and led to a broader global collaboration with $21.8 Baseops in international flight services. Closer to home, our $18.9 partnership with Signature Flight Support has expanded as we increased our volume of supply to their network of FBO’s and worked on joint marketing initiatives with their ASIG $615.1 division. On the fuel management front, we continued to expand our service offering with the announcement of an out-sourcing agreement with America West and a processing agreement with United Airlines and Morgan Stanley. Both initiatives represent significant strategic developments which will create economies of scale and have enhanced and complimented our core business in the cargo, charter and passenger markets. Looking forward we will continue to grow volume, improve our service offering, focus on helping ’02 ’03 ’02 ’03 our customers with price risk management and refine our expertise in processing. 3
  • 6. W O R L D F U E L S E RV I C E S C O R P O R A T I O N FINANCIALLY AND CULTURALLY STRONG MARINE DIVISION: MARINE In our marine segment, our global team demonstrated their ability to INCOME FROM REVENUE respond quickly to the changing economic climate. As the shipping indus- OPERATIONS (in millions) try recovered throughout 2003, so did our overall results. Traded volume, (in millions) sales, gross profit and operating income were all up this year as a direct $1,637.0 result of the shift in industry fortunes and the highly focused initiatives of $18.3 our sales force. And while we continue to grow organically, we also contin- $1,283.1 ued to pursue our strategy for growth through acquisition. On April 2, $13.6 2004, we were very pleased to announce the acquisition of the Tramp Oil group of companies based in the U.K., one of the largest marine fuel services groups in the market. The acquisition of Tramp, largest in the Company’s history, brings a tremendous team of seasoned professionals, expands our global footprint, increases our market share, adds a complimen- tary portfolio of business and will be accretive to earnings. We are excited about the acquisition and will dedicate the remainder of the year to the challenges of careful integration. Looking forward we will continue to emphasize deeper penetration of global accounts with a focus on our pur- chasing out-source model, supply specialization and custom tailored product offerings in the area of price risk management. ’02 ’03 ’02 ’03 FUTURE OUTLOOK: It is a very exciting time at World Fuel Services Corporation. We are extremely proud of our global team and the outstanding performance delivered by our aviation and marine segments. We have successfully expanded our business model and laid a strong foundation for future growth. With our unique global position, robust service offerings and strong balance sheet, we know that the future holds great promise for World Fuel. And as we grow, we remain committed to transparency, good governance and value creation for our shareholders, customers, suppliers and business partners around the world. We also remain committed to creating opportunity and prosperity for our employees while contributing to the global community we serve. Sincerely, Paul H. Stebbins Michael J. Kasbar Chairman and Chief Executive Officer President and Chief Operating Officer 4
  • 7. CORPORATE INFORMATION BOARD OF DIRECTORS EXECUTIVE OFFICERS STOCK LISTING Paul H. Stebbins Paul H. Stebbins Common Stock is traded on the Chairman and Chief Executive Officer Chairman and Chief Executive Officer New York Stock Exchange (NYSE) World Fuel Services Corporation World Fuel Services Corporation under the symbol: INT Michael J. Kasbar Michael J. Kasbar President and Chief Operating Officer President and Chief Operating Officer TRANSFER AGENT AND REGISTRAR World Fuel Services Corporation World Fuel Services Corporation Ken Bakshi Francis X. Shea For change of address, lost stock certifi- Member of the Compensation Committee Executive Vice President and cates and other stock certificate-related President and Chief Executive Officer Chief Financial Officer inquiries, please contact: Row 2 Technologies Michael S. Clementi (Software Development) American Stock Transfer & President and Chief Operating Officer Trust Company John R. Benbow Aviation Fuel Services 59 Maiden Lane Chairman of the Compensation Committee Robert S. Tocci New York, New York 10038 and Member of the Audit Committee President and Chief Operating Officer President, Benbow & Associates, Inc. Telephone: (800) 937-5449 Marine Fuel Services (Construction Management) Telephone: (718) 921-8124 Fax: (718) 236-2641 Richard A. Kassar Website: www.amstock.com Member of the Audit Committee MARINE FUEL SERVICES Senior Vice President and Chief Financial Robert S. Tocci Officer, The Meow Mix Company President and Chief Operating Officer STOCKHOLDER INQUIRIES (Consumer Products) Steven A. Scoppetuolo For copies of the Company’s recent news Myles Klein Chief Financial Officer Chairman of the Audit Committee and releases and Securities and Exchange Member of the Compensation Committee Commission (SEC) filings, including Francis Lee Partner, Klein & Barreto, P.A. Forms 10-K and 10-Q, free of charge, Asia Regional Manager (Certified Public Accountants) please contact: Wade DeClaris J. Thomas Presby North Pacific Rim Regional Manager Investor Relations Member of the Audit Committee Alexander Garcia Retired Partner, Deloitte & Touche Tohmatsu William Mergenthaler Senior Vice President of Finance (Certified Public Accountants) U.S. East Coast Regional Manager World Fuel Services Corporation Jerome Sidel Karel Peters Telephone: (305) 428-8064 Member of the Compensation Committee Europe Regional Manager Fax: (305) 392-5621 President, New York Store Leasing, Inc. e-mail: algarcia@wfscorp.com (Services) investors@wfscorp.com AVIATION FUEL SERVICES Luis R. Tinoco Partner, Lara, Lopez, Matamoros, Public Relations Michael Clementi Rodriquez and Tinoco Allen & Caron Inc. President and Chief Operating Officer (Law Firm, Costa Rica) 156 Fifth Avenue, Suite 934 Carlos M. Velazquez New York, New York 10010 Chief Financial Officer Telephone: (212) 691-8087 CORPORATE HEADQUARTERS Fax: (212) 691-8116 World Fuel Services Corporation e-mail: michaelm@allencaron.com LEGAL COUNSEL 9800 Northwest 41st Street, Suite 400 Miami, Florida 33178 For copies of materials filed by the R. Alexander Lake, Jr. Telephone: (305) 428-8000 General Counsel and Corporate Secretary Company with the SEC, please contact: Fax: (305) 392-5600 World Fuel Services Corporation SEC’s Public Reference Room Website: www.worldfuel.com Shutts & Bowen LLP 450 Fifth Street, N.W. Miami, Florida Washington, D.C. 20549 ANNUAL MEETING Telephone: (800) SEC-0330 INDEPENDENT The Annual Meeting is to be held The SEC also maintains a website of PUBLIC ACCOUNTANTS May 27, 2004 at 10:00 a.m. at the materials electronically filed by the Company’s corporate headquarters. PricewaterhouseCoopers LLP Company, such as reports, proxy and Miami, Florida information statements, and other information, at www.sec.gov.
  • 8. MARINE FUEL DIRECTORY OFFICES OF United States China Germany Cyprus 9800 N.W. 41st Street, Suite 400 No. 1 Pudong Avenue Bremer Str. 2 P.O. Box 56384 Miami, Florida 33178 Marine Tower, Room 1206 D-28816 Stuhr CY-3306 Telephone: (305) 428-8001 Shanghai 200120, China Brinkum, Germany Limassol, Cyprus Fax: (305) 392-5620 Telephone: 86 21 6886 0671 Telephone: 49 421 165 6100 Telephone: 357 25873 524 Fax: 86 21 6886 1547 Fax: 49 421 165 6161 Fax: 357 25311 505 Raritan Plaza III 101 Fieldcrest Avenue, Suite 2B Hong Kong Norway South Africa Edison, New Jersey 08837 18/F, Yam Tze Commercial Bldg. Niels Juels Fate 11B The Foundry, 4th Floor, Unit 1 Telephone: (732) 623-2400 23 Thomson Road 0272 Oslo, Norway Cardiff Road, Green Point Fax: (732) 623-2401 Wanchai, Hong Kong Telephone: 47 2308 6780 Cape Town, South Africa 8001 2 Greenwich Office Park Telephone: 852 2520 0157 Fax: 47 2308 6799 Telephone: 27 21 425 4443 Greenwich, Connecticut 06830 Fax: 852 2865 1700 Fax: 27 21 425 4052 Telephone: (203) 863-0001 Netherlands Fax: (203) 863-0055 Japan Vasteland 6 Costa Rica 4th Floor, Tozan Building, 4-4-2 3011 BK Rotterdam, Netherlands Oficentro Ejecutivo La Sabana Sur 1101 Fifth Avenue, Suite 280 Nihonbashi Hon-cho, Chuo-Ku Telephone: 31 10 4000 888 Edificio 5, Primer Piso San Rafael, California 94901 Tokyo 103-0023 Fax: 31 10 4117 593 San Jose, Costa Rica Telephone: (415) 925-1995 Telephone: 81 3 3245 0379 Telephone: 506 220 0716 Fax: (415) 925-1998 Fax: 81 3 3245 2789 Greece Fax: 506 290 0893 Poseidonos 60 Avenue, Third Floor Singapore United Kingdom GlyFada 166-75 Chile 101 Thomson Road #13-03/04 Westminster Tower Athens, Greece Avenida Libertad 798 – Suite 301 United Square, Singapore 307591 3 Albert Embankment Telephone: 30 210 898 5920 Vina del Mar, Chile Telephone: 65 6223 6977 London, England SE1 7SP Fax: 30 210 898 3680 Telephone: 56 32 460 155 Fax: 65 6223 0977 Telephone: 44 207 828 3299 Fax: 56 32 460 105 70 Shenton Way Fax: 44 207 834 4951 United Arab Emirates #17-01A Marina House Al Moosa Tower II Brazil Wells House Singapore 079118 Office No. 904 Av Rio Branco 181/3004 15-17 Elmfield Road Telephone: 65 6221 1255 Shk Zayed Road Rio de Janeiro, 20040 007 RJ, Bromley, Kent Fax: 65 6227 0420 P.O. Box 24676 Brazil England BR1 1LT Dubai, United Arab Emirates Telephone: 55 21 3231 2080 Telephone: 44 2083 157777 South Korea Telephone: 971 4 3310400 Fax: 55 21 3231 2070 Fax: 44 20 8315 7788 Rm 403, Anglican Church Bldg. Fax: 971 4 3310078 3-7, Chung-Dong, Chung-Ku 7 Priory Tec Park Argentina Seoul 100-120, South Korea Saxon Way, Hessle Turkey Tucuman Telephone: 82 2 739 0437 Hull, East Yorkshire Yener Sok, Ayaz Apr No. 12 373 piso 3, 1049 CF Fax: 82 2 739 0599 England HU13 9PB D-3 Erenkoy, Istanbul, Turkey Buenos Aires, Argentina Telephone: 44 1482 629669 Telephone: 90 216 411 4127 Telephone: 54 11 4312 2600 Rm 1206, 12th Fl., Doryum Bldg. Fax: 44 1482 629691 Fax: 90 216 411 4160 Fax: 54 11 4312 9496 60 Doryum-Dong Chongro-Ku, Seoul, Korea Denmark Russia Telephone: 82 2 720 1255 Gammelbyvej 2 34 ap. 3 Georgiy Kimitrov Str Fax: 82 2 737 0420 Karise, Denmark 4653 236000 Kaliningrad, Russia Telephone: 45 5678 8200 Telephone: 7 011 255 1036 Fax: 45 5678 8222 Fax: 7 011 255 5150 AVIATION FUEL DIRECTORY OFFICES OF United States 6011 West Tree Drive United Kingdom Mexico 9800 N.W. 41st Street, Suite 400 Anchorage, Alaska 99507 Kingfisher House, Northwood Park Avenida Fuerza Aerea Miami, Florida 33178 Telephone: (907) 346-4419 Gatwick Road, Crawley Mexicana 465, Colonia Federal Telephone: (305) 428-8001 Fax: (907) 346-4421 West Sussex, England RH10 2XN 15700 Mexico, D.F. Fax: (305) 392-5621 Telephone: 44 1293 400333 (World Fuel) Telephone: 52 55 717 812 325 North Road Fax: 44 1293 404333 (World Fuel) Fax: 52 55 717 818 333 Cypress Run, Suite 200 Senoia, Georgia 30276 Telephone: 44 1293 400777 (Baseops) Houston, Texas 77094 Telephone: (770) 599-3162 Telephone: 44 1293 400888 (AirData) Colombia Telephone: (281) 556-2400 Fax: (770) 599-1370 Fax: 44 1293 400666 (AirData) Calle 93B No. 11A-44, oficina 303 Fax: (281) 556-2500 Bogota, Colombia Singapore 4995 East Anderson Avenue Costa Rica Telephone: 57 1 618 4858 101 Thomson Road #13-03/04 Fresno, California 93727 Oficentro Ejecutivo La Sabana Sur Fax: 57 1 618 4857 United Square, Singapore 307591 Telephone: (559) 252-7140 Edificio 5, Primer Piso Telephone: 65 6256 3166 Fax: (559) 252-7180 San Jose, Costa Rica Russia Fax: 65 6356 3166 Telephone: 506 296 4328 Slavjanskaya Business Ctr, 8th Fl. 201 S. Orange Avenue, Suite 1575 Fax: 506 296 4338 Europe Square 2, Moscow 121059 Orlando, Florida 32801 Russian Federation Telephone: (407) 206-5300 Telephone: 7 095 941 8640 Fax: (407) 206-5369 Fax: 7 095 941 8639
  • 9. SENIOR MANAGEMENT Paul H. Stebbins Michael J. Kasbar Chairman and President and Chief Executive Officer Chief Operating Officer Michael S. Clementi Francis X. Shea Robert S. Tocci President and Executive Vice President President and Chief Operating Officer and Chief Financial Officer Chief Operating Officer Aviation Division Marine Division R. Alexander Lake, Jr. General Counsel and Corporate Secretary
  • 10. 9800 N.W. 41st Street • Suite 400 • Miami, Florida 33178 (305) 428-8001 • (305) 392-5621 Fax • www.worldfuel.com • (NYSE: INT)