(Mark One)
| (Mark One) |
| ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the fiscal year ended December 31, |
OR |
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to |
| COMMISSION FILE NUMBER 1-9533 |
COMMISSION FILE NUMBER 1-9533
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Florida | 59-2459427 | |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
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(Address of principal executive offices) | 33178 (Zip Code) | |
Registrant’s telephone number, including area code: (305) 428-8000 | ||
Securities registered pursuant to Section 12(b) of the Act: | ||
Title of each class: Common Stock, par value $0.01 per share | Name of each exchange on which registered: | |
| New York Stock Exchange | |
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$2,586,431,684.
Documents incorporated by reference:
Part III – Specified Portions of the Registrant’s Definitive Proxy Statement for the 2015 Annual Meeting of Shareholders.
| Documents incorporated by reference: | ||
| Part III - | Specified Portions of the Registrant’s Definitive Proxy Statement for the 2018 Annual Meeting of Shareholders. | |
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PART I
Financial information with respect to our business segments and the geographic areas
February 7, 2018, we employed more than 5,000 employees globally. Our principal executive office is located at 9800 Northwest 41
st Street,1
We purchase our aviation fuel from suppliers worldwide, which is then typicallymay be delivered into our customers’ aircraft or to a designated storage directly fromfacility located at one of our supplierslocations or our suppliers’ locations pursuant to arrangements with them or from our fuel inventory pursuant to contracts with various third parties.them. Inventory is purchased at airport locations or shipped via pipelines and held at multiple locations for strategic reasons. We typically hedge inventory in an effort to protect us against price risk. We also engage in both contract sales, which are sales made pursuant to fuel purchase contracts with customers who commit to purchasing fuel from us over the contract term, andterm. We also conduct spot sales, which are sales that do not involve continuing contractual obligations by our customers to purchase fuel from us. Our cost of fuel is generally tied to market‑based formulas or government-controlled prices.
During each of the years presented in the accompanying consolidated statements of income and comprehensive income, none of our aviation customers accounted for more than 10% of total consolidated revenue.
Marine Segment
Weextensive network, we market fuel, lubricants and related products and services to a broad base of marine customers, including international container and tanker fleets, commercial cruise lines, yachts and time‑chartertime-charter operators, the U.S. and foreign governments, as well as other fuel suppliers. Through our extensive network of offices, weWe provide our customers with real‑time global market intelligence and rapid access to quality, and competitively priced, marine fuel 24 hours a day, every day of the year. In addition, we offer card payment solutions and related processing services. Our marine fuel relatedfuel-related services include management services for the procurement of fuel, cost control through the use of price hedging instruments,risk management offerings, quality control, claims management, and claims management.
card payment solutions and related processing services.
During each of the years presented in the accompanying consolidated statements of income and comprehensive income, none of our marine customers accounted for more than 10% of total consolidated revenue.
Land Segment
In our land segment, we offer fuel, heating oil, lubricants and related products and services to petroleum distributors operating in the land transportation market, retail petroleum operators, and industrial, commercial, residential and government customers. Our land‑related services include management services for the procurement of fuel and price risk management. Additionally, we engage in crude oil marketing activities.
In addition, we offer transaction management services, which include card payment solutions, merchant processing services, payment solutions for tollsoperate globally across Europe, government payment systems for global fuel procurement and commercial payment programs in the land transportation industry.
In connectionindustries that are highly fragmented with our fuel marketing activities, we act as a reseller as we purchase fuel from a supplier and contemporaneously resell it to our customers through spot sales and contract sales. In general, fuel is delivered to our customers directly or at designated tanker truck loading terminals commonly referred to as “racks,” which are owned and operated by our suppliers or other third‑parties, or directly to customer locations through third party carriers. We also maintain inventory in certain locations including pipelines and ship inventory via railcar. Inventory held in storage or being shipped is typically hedged in an effort to protect us against price risk. Our cost of fuel is generally tied to market‑based formulas and our suppliers typically extend unsecured trade credit to us. We also enter into derivative contracts in order to mitigate the risk of market price fluctuations for certain of our transactions and to offer our customers fuel pricing alternatives to meet their needs.
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During each of the years presented in the accompanying consolidated statements of income and comprehensive income, none of our land customers accounted for more than 10% of total consolidated revenue.
Competitors
numerous competitors. Our competitors within the highly fragmented world‑wide downstream markets of aviation, marinerange in size and land fuel are numerous, rangingcomplexity from large multinational corporations, principally major oil producers, which have significantly greater capital resources than us, to relatively small and specialized firms. WeIn our fuel distribution activities, we compete with the major oil producers that market fuel directly to the large commercial airlines, shipping companies and petroleum distributors operating in the land transportation market as well as fuel resellers. We compete, among other things, on the basis of service, convenience, reliability, availability of trade credit and price. We believe that our extensive market knowledge, worldwide presence, logisticalfootprint, logistics expertise extension of credit and support, the use of derivatives to provideprice risk management offerings, and value-added benefits, including single-supplier convenience, fuel pricing alternativesquality control and fuel procurement outsourcing, give us the ability to compete inwithin those markets.
Employees
winter months and aviation and land fuel during the summer months, as well as other seasonal weather patterns. As such, our results of February 5, 2015, we employed 4,041 people worldwide.
operations may fluctuate from period to period.
Forward‑Looking
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joint ventures and alliances. These assumptions could prove inaccurate. Although we believe that the estimates and projections reflected in the forward-looking statements are reasonable, our expectations may prove to be incorrect.
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Any public statements or disclosures by us following this report that modify or impact any of the forward-looking statements contained in or accompanying this 2017 10-K Report will be deemed to modify or supersede such forward-looking statements.
Act.
We extend credit to certain of our customers in connection with their purchases of fuel and services from us.
industries within which we primarily do business.
institutions.
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While we generally attemptmonitor and manage our credit exposures to structure our agreements suchcounterparties, credit defaults may still occur and the actual recovery will depend on the financial condition of that counterparty and our ability to enforce any obligation owed to us. Accordingly, if we are able to recover from the non-performing counterparty any losses or costs we may incur, we may not always be ableunable to recover such amounts and may be exposed to claims for damages, penalties or other costs. Furthermore, although we have credit standards and perform credit evaluations of our customers and suppliers, our evaluations may be inaccurate and we cannot assure you that credit performance will not be materially worse than anticipated. Accordingly, should anylosses from a defaulting counterparty, fail to honor its obligations under our agreements, we could sustain significantsubstantial losses that would have a material adverse effect on our business, financial condition, results of operations and cash flows.
We, on behalf of DPTS Marketing, LLC (“DPM”), a crude oil marketing joint venture in which we owned a 50% membership interest, purchased crude oil from various producers in the Bakken region of North Dakota. Dakota Petroleum Transport Solutions, LLC (“DPTS”), a crude oil transloading joint venture in which we also owned a 50% membership interest, arranged for the transloading of the crude oil for DPM into tank cars at the joint venture’s facility in New Town, North Dakota. We leased the tank cars used in the transloading from a number of third party lessors and subleased these tank cars to DPM. We, on behalf of DPM, contracted with Canadian Pacific Railway (“CPR”) for the transportation of the tank cars and the crude oil from New Town, North Dakota to a customer in New Brunswick, Canada. CPR subcontracted a portion of that route to Montreal, Maine and Atlantic Railway (“MMA”). On July 6, 2013, the freight train operated by MMA with tank cars carrying approximately 50,000 barrels of crude oil derailed in Lac-Mégantic, Quebec. The derailment resulted in significant loss of life, damage to the environment from spilled crude oil and extensive property damage.
We, certain of our subsidiaries, DPM and DPTS, along with a number of third parties, including CPR, MMA and certain of its affiliates, several manufacturers and lessors of tank cars, as well as the intended purchaser and certain suppliers of the crude oil, have been named as defendants in lawsuits and proceedings related to the incident. In addition, orders were issued by the government of Quebec against CPR, MMA and us, requiring CPR, MMA and us to recover the spilled crude oil caused by the incident and to otherwise fully remediate the impact of the incident on the environment. For a more detailed discussion of these proceedings, see “Legal Proceedings” under Part I – Item 3 of this 2014 10 K Report.
In December 2014, we sold our 50% interest in DPM and DPTS to certain subsidiaries of Dakota Plains Holdings, Inc. (“DAKP”), our partner in the joint ventures. In connection with the sale transaction, we agreed to indemnify DAKP and certainour use of its affiliates, including DPM and DPTS, for third party claims for bodily injury or property damage arising from the derailment. Pursuant to the agreement, we will control the defense of DAKP and the joint ventures for claims associated with the derailment. In addition, DAKP assigned to us all recoveries from third parties and under applicable insurance policies held by DAKP and the joint ventures for claims arising out of the derailment. Finally, DAKP also agreed to indemnify us for certain costs and expenses arising out of the derailment up to $10.0 million.
Additional claims, lawsuits, proceedings, investigations and orders may be filed, commenced or issued with respect to the incident,derivatives which may involve civil claims for damages or governmental investigative, regulatory or enforcement actions against us. The adverse resolution of any proceedings related to these events could subject us to monetary damages, fines and other costs, which could have a negative and material impact on our business, prospects, results of operations and financial condition.
While we, DPM and DPTS, maintain insurance to mitigate the costs of environmental releases as well as other results of unexpected events, including loss of life, property damage and defense costs, there can be no guarantee that our insurance will be adequate to cover all liabilities that may be incurred as a result of this incident. However, we expect that substantially all of the legal costs we incur in defending against the proceedings described above will be covered by insurance.
We are also evaluating potential claims that we, DPM or DPTS may assert against third parties to recover costs and other liabilities that may be incurred as a result of this incident. We can provide no guarantee that any such claims, if brought by us, will be successful or, if successful, that the responsible parties will have the financial resources to address any such claims. Any losses not covered by insurance or otherwise not recoverable from third parties, if significant, could have a material adverse effect on our business, financial condition, results of operations or cash flows.
Our fuel storage and transportation operations have inherent risks that could negatively impact our stockoperations.
Operating fuel storage and distribution terminals and transportingfluctuations in fuel products, involve inherent risks including:
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Damage arising from such occurrences may result in fines and significant third party claims. We maintain insurance to mitigate these costs,the risk of fluctuations in foreign currency exchange rates. However, our efforts to hedge our exposure to fuel price and exchange rate fluctuations may be ineffective in certain instances. For example, we hedge jet fuel prices with derivatives tied to other petroleum products that have historically been correlated to aviation jet fuel (e.g. heating oil in the United States or gasoil in Europe or Asia). If the price of aviation jet fuel at a specific location experiences a divergence to historical correlations, our attempts to mitigate price risk associated with our aviation business may not be effective. Moreover, there may be times where the change in the price of jet fuel at a specific location is disrupted (e.g. hurricanes) and is not correlated to the underlying hedges when compared to historical prices.
In addition, if we are involved in a spill, leak, fire or other accident involving hazardous substances or if there are releases of fuel or fuel products we ownsell. Proprietary derivative transactions, by their nature, expose us to changes in commodity prices in relation to the proprietary positions taken. Although we have established limits on such exposure, any adverse changes could result in losses which can be further exacerbated by volatility in the financial and other markets. In addition, our employees failing to comply with our policies and procedures with respect to hedging or have custody of, our operations could be disrupted. We could also be subject to material liabilities,proprietary trading, such as the cost of investigating and remediating contaminated propertiesengaging in unauthorized trading activity, failing to hedge a specific price risk or claims by customers, employees or others who may have been injured, or whose property may have been damaged. These liabilities,failing to the extent not covered by insurance,comply with our internal limits on exposure, could have a material adverse effect on our business, financial condition, results of operations and cash flows. Some
| • | anti-money laundering, financial services, and funds transmission; and |
| • | regulatory reporting and licensing. |
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Although we have taken steps to address these concerns by implementing network security and internal control measures, there can be no assurance thatthese steps may not prevent a data security breach will notand any data security breach may have a material adverse effect on our business, financial condition, results of operations and cash flows.
Businesses we have acquired or may acquire in the future, as well as strategic investments such as joint venture arrangements, expose us to increased operating risks.
As part
| • | the need to implement internal controls, procedures and policies appropriate for a public company at companies that prior to the acquisition lacked such controls, procedures and policies. |
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Insurance coverage for some of our operations may be insufficient to cover losses, which may have a material adverse effect(iii) increased demands on our cash resources that may, among other things, impact our ability to explore other opportunities. If our acquisitions or strategic investments do not achieve the financial conditionresults anticipated, it could adversely affect our revenues and results of operations.
Furthermore, our ability to obtain and maintain adequate insuranceduplicative expenses and the realization of economies of scale and cost savings related to the integration of such insurance may be affected by significant claims, such as the Lac-Mégantic derailment, and conditions inacquired businesses following the insurance market over which we have no control. Ifcompletion of the costrecent acquisitions. Any of insurance increases, we may decide to discontinue certain insurance coverage, reduce our level of coverage or increase our deductibles/retentions in order to offset the cost increase. In addition, our existing types and levels of insurance coverage could become difficult or impossible to obtain in the future. The occurrence of an event that is not fully covered by insurance, the loss of insurance coverage or a significant increase in the cost of insurancethese factors could have a materialan adverse effect on our business, financial condition, results of operations and cash flows.
Third parties who failflows
We purchase fuelgoodwill and other products from suppliersidentifiable intangible assets. In accordance with applicable acquisition accounting rules, we are required to record as goodwill on our consolidated balance sheet the amount by which the purchase price exceeds the net fair value of the tangible and resell to customers. Ifintangible assets and liabilities acquired as of the fuelacquisition date. As of December 31, 2017, we had goodwill of $845.5 million and other products we sell fail to meetnet intangible assets of $279.7 million. We review our indefinite-lived intangible assets, including goodwill, for impairment annually in the specifications we have agreed to with customers, we could incur significant liabilities iffourth fiscal quarter or whenever events or changes in circumstances indicate that a customer initiates a claim or a lawsuit for which we settle or results in a decision against us. In addition, our relationship with our customers could be adversely affected and adverse publicity about any allegations of contaminated products may negatively affect us, regardless of whether the allegations are true. Although in most cases we have recourse against our suppliers for productspotential impairment exists. Factors that fail to meet contractual specifications, such recourse cannot be assured and may be costlyconsidered in assessing whether goodwill or intangible assets may be impaired include a decline in our stock price or market capitalization, reduced estimates of future cash flows in our annual operating plan and slower growth rates in our industry.
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and obligations under the agreement, under applicable foreign laws, and enforcing an agreementbe impaired in a foreign jurisdiction.future periods. Any significant liability in excess of any applicable insurance coverage couldresulting impairment loss would have a material adversenegative effect on our business, financial condition, results of operations and cash flows.
We also use third parties to provide various services to our customers, including into plane fueling at airports, fueling of vessels in port and at sea and delivering land based fuel. The failure of these third parties to perform these services in accordance with contractual terms for any reason, such as their inability to supply specified fuel or an interruption of their business because of weather, environmental or labor difficulties or political unrest, could affect our relationships with our customers and subject us to claims and other liabilities that could have a material adverse effect on our business, financial condition, results of operations and cash flows.
For example, the shipping industry has gone through a period of significant consolidation in recent years, which has created a concentration of volume among a smaller number of shipping companies. Larger shipping companies often have greater leverage, are more sophisticated purchasers of fuel and have greater ability to buy directly from major oil companies, which can negatively impact our value proposition to these types of customers.
We enter into financial derivative contracts in order to mitigate the risk of market price fluctuations in fuel products we sell, to offer our customers fuel pricing alternatives to meet their needs and to mitigate the risk of fluctuations in foreign currency exchange rates. However, our efforts to hedge our exposure to fuel price and exchange rate fluctuations could be ineffective in certain instances. For example, we hedge jet fuel prices with derivatives tied to other petroleum products that often bear some historical correlation to aviation jet fuel (e.g. heating oil in the United States or gasoil in Europe or Asia). If the price of aviation jet fuel and the price of any such products experience divergence in correlation, then it is more likely that our attempts to mitigate price risk associated with our aviation business would not be effective. For purposes of hedging, neither heating oil nor gasoil is a perfect substitute for aviation jet fuel and short term significant pricing differences may occur. There may be times where the change in the price of jet fuel increases or decreases based on market supply and demand fundamentals or disruptive events (e.g. hurricanes) while the change in the price of heating oil or gasoil remains relatively constant.
We also enter into proprietary derivative transactions, primarily intended to capitalize on arbitrage opportunities associated with basis, time, quality or geographic spreads related to fuel products we sell. Proprietary derivative transactions, by their nature, entail exposure to adverse changes in commodity prices in relation to our proprietary positions. Although we have established limits on such exposure, any such adverse changes could result in losses. The risks we face because of our use of financial derivatives can be exacerbated by volatility in the financial and other markets. In addition, we may fail to adequately hedge our risks or could otherwise incur losses if our employees fail to comply with our policies and procedures with respect to hedging or proprietary trading, for example by engaging in unauthorized trading activity, failing to hedge a specific financial risk or failing to observe limits on exposure, which could subject us to financial losses that would have a material adverse effect on our business, financial condition, results of operations and cash flows.
Finally, the majority of our derivatives are not designated as cash flow hedges for accounting purposes, and we therefore recognize changes in the fair market value of these derivatives as a component of revenue or cost of revenue (based on the underlying transaction type) in our consolidated statements of income and comprehensive income. Since the fair value of these derivatives are marked to market at the end of each quarter, changes in the fair value of our derivative instruments as a result of gains or losses may cause our earnings to fluctuate from period to period.
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If we fail to comply with laws or other government regulations applicable to our operations, we could suffer penalties or costs that could have a material adverse effect on our business.
We are required to comply with extensive and complex laws and other regulations at the international, federal, state and local government levels relating to, among other things:
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If we fail to comply with these laws or regulations, we could be subject to substantial fines or penalties or to civil or criminal liability. In addition, compliance with existing and future laws regulating the delivery of fuel by barge, truck or railcar, fuel storage terminals and underground storage tanks that we own or operate may require significant capital expenditures and increased operating and maintenance costs. To the extent that we use third parties in our operations, we are also subject to the risk that we would be held accountable for the failure of these third parties to comply with the laws and regulations of the U.S. and various international jurisdictions. Any significant fines and costs incurred as a result of such regulations could have a material adverse effect on our business and results of operations.
Our business is dependent on the ability to obtain financing to meet our capital requirements and fund our future growth, which may be particularly difficult to obtain if there is volatility in the credit or capital markets.
We rely on credit arrangements with banks, suppliers and other parties as a significant source of liquidity for capital requirements not satisfied by operating cash flow. Any inability to obtain credit as and when we need it on commercially reasonable terms or at all, such as in the event there is a substantial tightening of the global credit markets or a significant reduction in supplier trade credit, could have a negative impact on our business, financial condition, and cash flows, as well as our future development and growth. Furthermore, if we are unable to obtain debt financing and instead raise capital through an equity issuance, existing shareholders would be diluted. Even if we are able to obtain debt financing, the restrictions creditors may place on our operations and our increased interest expense and leverage could limit our ability to grow.
Reduced sales to our government customers could adversely affect our profitability.
U.S. and foreign government budget constraints and the scheduled withdrawal of armed forces from Afghanistan are expected to result in a decrease in defense spending, which in turn could cause a significant reduction in sales and related profit in our government services business. Furthermore, profitability associated with our government services business may fluctuate significantly from time to time as a result of the commencement, extension or completion of existing and new government contracts. As a result of complex logistics and extended payment terms for our government customers, sales of products and services to such customers generally carry higher margins than sales to other customers. Accordingly, a decrease in government sales could contribute disproportionately to a reduction in our gross margin and profitability and such decrease could be sudden. The loss of a significant government customer or a material reduction in sales to government customers could adversely affect our business, financial condition, results of operations and cash flows.
Changes in the market price of fuel may have a material adverse effect on our business.
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If fuel prices increase, our customers may not be able to purchase as much fuel from us because of their credit limits with us and the resulting adverse impact on their business could cause them to be unable to make payments owed to us for fuel purchased on credit. They may also choose to reduce the amount of fuel they consume in their operations to reduce costs or comply with new environmental regulations to obtain associated incentives. For example, in the shipping industry a number of container ships are sailingsail at reduced speeds, known as “slow steaming,” to conserve fuel and reduce carbon emissions. In any such event, there can be no assurance that the volume of orders from our customers will increase again or thatmay thereafter decrease and we willmay not be able to replace lost volumes with new or existing customers. In addition, if fuel prices increase, our own credit limits could prevent us from purchasing enough fuel from our suppliers to meet our customers’ demands or could require us to prepay for fuel purchases which would impair our liquidity.
We
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Due to our international operations, we are subject to
Doing business on a worldwide basis requires us to comply with the laws and regulationstake other actions that would change current trade policies of the U.S. government and various international jurisdictions. These regulations place restrictions on our operations, trade practices and partners and investment decisions. In particular, our international operations are subject to U.S. and foreign anti-corruption laws and regulations, such asWe cannot predict the Foreign Corrupt Practices Act (“FCPA”) and the U.K. Anti Bribery Act, and economic sanction programs administered by the U.S. Treasury Department’s Officeimpact, if any, of Foreign Assets Control (“OFAC”). The FCPA prohibits us from providing anything of value to foreign officials for the purposes of influencing official decisions or obtaining or
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retaining business and the U.K. Anti Bribery Act prohibits bribery both in the United Kingdom and internationally, as well as bribery across public and private sectors. As part of our business, we regularly deal with state owned business enterprises, the employees of which may be considered foreign officials for purposes of the FCPA. In addition, some of the international locations in which we operate lack a developed legal system and have higher than normal levels of corruption. Our activities in these countries create the risk of improper payments or offers of payments by one of our employees or other parties acting onproposed changes to our behalf.
Furthermore, economic sanctions programs are complex, restrict our business dealings with certain countries and individuals, and are constantly changing. Further restrictions may be enacted, amended, enforced or interpreted in a mannerbusiness. However, it is possible that materially impacts our operations. From time to time, certain of our subsidiaries have limited business dealings in countries subject to comprehensive OFAC administered sanctions, specifically Cuba, Iran, Syria and Sudan. These business dealings, which represent an insignificant amount of our consolidated revenues and income, generally consist of the purchase of overflight permits and the provision of flight support and fuel services pursuant to licenses issued by OFAC or as otherwise permitted by U.S. sanctions regulations. As a result of the above activities, we are exposed to a heightened risk of violating anti-corruption laws and OFAC regulations. Violations of these regulations are punishable by civil penalties, including fines, denial of export privileges, injunctions, asset seizures, debarment from government contracts and revocations or restrictions of licenses, as well as criminal fines and imprisonment.
We have established policies and procedures designed to assist with our compliance with applicable U.S. and international laws and regulations. However, there can be no assurance that our policies and procedures will effectively prevent us from violating these regulations in every transaction in which we may engage, and such a violation could adversely affect our reputation, business, financial condition, results of operations and cash flows. In addition, such a violation could also cause an event of default under our Credit Facility, which if not waived,proposed changes could adversely affect our business, financial condition and results of operationsoperations. It is likely that some policies adopted by the new administration will benefit us and cash flows. Finally, various stateothers will negatively affect us. Until we know what changes are enacted, we will not know whether in total we benefit from, or are negatively affected by such changes.
On December 8, 2009, we received an administrative subpoena from OFAC requesting information regarding our transactions involving Sudanese overflight payments since June 30, 2008. We responded toin the subpoena and identified a small number of sanctioned country related transactions which took place after our license had expired that may have resulted in violations of U.S. sanctions regulations or our OFAC issued license. In our response to OFAC, we noted that the transactions we identified as potential violations resulted in very small amounts of revenue to us. We have also taken various remedial actions to further strengthen our compliance related policies and procedures. Nevertheless, should OFAC determine that these activities constituted violations of U.S. sanctions regulations, civil penalties, including fines,future. Our business could be assessed against us. Additionally,adversely affected because of increased competition from these oil companies, who may choose to increase their direct marketing in the course of its ongoing review, OFAC could request additional information fromorder to compete with us in the form of additional subpoenas or otherwise,provide less advantageous price and we intendcredit terms to fully cooperate with any such additional subpoenas or requests. We cannot predict the ultimate outcome of the OFAC review, the total costsus than to be incurred in response to this review, the potential impact on our personnel, the effect of implementing any further measures that may be necessary to ensure full compliance with U.S. sanctions regulations or to what extent, if at all, we could be subject to fines, sanctions or other penalties.
fuel reseller competitors.
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to obtain working capital advances and letters of credit, any of which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
In addition,
Material disruptions in the availability or supply of fuel would adversely affect our business.
The success of a significant portion
financial condition, results of operations and cash flows.
Changes in U.S. or foreign tax laws could adversely affect our business and future operating results.
We are affected by various U.S. and foreign taxes, including income taxes and taxes imposed on the purchase and sale of aviation, marine and land fuel products, such as sales, excise, value added tax, energy, environmental and other taxes. From time to time, we may also benefit from special tax concessions in certain jurisdictions. Changes in U.S. and foreign tax laws, our failure to comply with such laws or the loss of tax concessions could adversely affect our business, financial condition, results of operations and cash flows.
Furthermore, significant judgment is required in determining our worldwide provision for income taxes. In the ordinary course of our business, there are many transactions and calculations where the ultimate tax determination is uncertain. We are regularly under audit by tax authorities and, although we believe our tax estimates are reasonable, the final determination of tax audits and any related litigation could be materially different from our historical income tax provisions and accruals. The results of an audit or litigation could have a material effect on our financial statements in the period or periods for which that determination is made.
Finally, we earn a significant amount of our operating income from outside the U.S., and any repatriation of funds currently held in foreign jurisdictions to the U.S. may result in higher effective income tax rates for the Company. In addition, there have been proposals to change U.S. income tax laws that would significantly impact how U.S. multinational corporations are taxed
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on foreign earnings. Although we cannot predict whether or in what form any proposed legislation may pass, if enacted it could have a material adverse impact on our income tax expense, financial condition, results of operations and cash flows.
Fluctuations in foreign exchange rates could materially affect our financial condition and results of operations.
We face intense competition and, if we are not able to effectively compete in our markets, our revenues and profits may decrease.
Competitive pressures in our markets could adversely affect our competitive position, leading to a possible loss of market share or a decrease in prices, either of which could result in decreased revenues and profits. Our competitors are numerous, ranging from large multinational corporations, which have significantly greater capital resources than we do, to relatively small and specialized firms. In addition to competing with fuel resellers, we also compete with the major oil producers that market fuel directly to the large commercial airlines, shipping companies and petroleum distributors. Although many major oil companies have been divesting their downstream assets, some continue to compete with us in certain markets while others may decide to reenter the market in the future. Our business could be adversely affected because of increased competition from these oil companies, who may choose to increase their direct marketing in order to compete with us or provide less advantageous price and credit terms to us than to our fuel reseller competitors.
Our cash equivalents and investments are subject to risks that may cause illiquidity and losses from declines in value.
Our cash equivalents, principally consisting of overnight investments, bank money market accounts and bank time deposits are subject to credit, liquidity, market and interest rate risk, which can be exacerbated by volatility in the capital markets. Adverse changes in this respect can result in the decline of the fair value of our cash equivalents and therefore our liquidity, which could materially affect our business, financial condition, results of operations and cash flows.
our hedging activity.
Asour business since these regulations are finalized, adopted and implemented,took effect in the E
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could significantlymaterially increase the cost of our derivative contracts (including through requirements to post collateral, which could adversely affect our cash flows and liquidity, or require us to obtain licenses and subject us directly or indirectly to additional reporting and other requirements), ;
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Location | Principal Use | Lease Expiration | ||||
| 9800 Northwest 41st Street Miami, FL 33178, USA | Executive, administrative, operations and sales office for corporate, aviation, land and marine |
| August 2031 | |||
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| 62 Buckingham Gate London, United Kingdom SW1E 6AJ | Administrative, operations and sales office for aviation, land and marine segments | June 2028 | ||||
| 238A Thompson Road #08‑01/10 Novena Square Tower A Singapore 307684 | Administrative, operations and sales office for aviation and marine segments | March 2020 | ||||
| Office No. 2003, Swiss Tower Plot No. Y3, Jumeirah Lakes Towers Dubai, United Arab Emirates | Sales and marketing office for aviation and marine segments | March 2022 | ||||
| Praia do Flamengo, 200, 22nd floor Rio de Janeiro, Brazil 22210 030 | Administrative, operations and sales office for aviation, land and marine segments | November 2021 | ||||
| Forum 2, Building N, Level 4, Radial Santa Ana Belén (Lindoral), Pozos, Santa Ana San José, Costa Rica | Administrative, operations and sales office for aviation and marine segments | December 2019 | ||||
| 605 North Highway 169, Suites 1100 & 1200 Plymouth, MN 55441, USA | Administrative, operations and sales office for land segment | June 2018 | ||||
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| 25 Mill Street Parish, NY 13131, USA | Administrative, operations and sales office for aviation |
| March 2020 | |||
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| Strommen 6 9400 Norresundby, Denmark | Administrative, operations and sales office for aviation and land segments |
| Month-to-month | |||
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| 6000 Metcalf Avenue Overland Park, KS 66202, USA | Administrative, operations and sales office for land segment | August 2024 | ||||
| 8650 College Boulevard Overland Park, KS 66210, USA | Administrative, operations and sales office for aviation, land and marine segments |
| August 2024 | |||
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| Administrative, operations and sales office for |
| Owned | |||
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| 300 Flint Ridge Road Webster, Texas 77598, USA | Administrative, operations and sales office for aviation segment |
| Owned | |||
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| Administrative, operations and sales office for land segment |
| November 2023 | |||
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| 2320 Milwaukee Way, Tacoma, Washington 98421, USA | Administrative, operations and sales office for land segment | June | ||||
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| Administrative, operations and sales office for land segment |
| Owned | |||
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| 1B North Mole Road (C.P. No. 1360) Gibraltar | Administrative, operations and sales office for marine segment | May 2021 | ||||
| The Docks, Falmouth, Cornwall, TR11 4NR, United Kingdom | Administrative, operations and sales office for marine segment | February 2037 | ||||
| Location | Principal Use | Lease Expiration | ||
| Huskisson Dock No.1 Regent Road Liverpool, United Kingdom | Administrative, operations and sales office for marine segment | February 2029 | ||
| Lange Kleiweg 28, 8th Floor Rijswijk, Netherlands 2228 | Administrative, operations and sales office for aviation, land and marine |
| September 2022 | |
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16
Lac‑Mégantic, Quebec
As described in Note 7 to
The plaintiffs subsequently filed a motion to have these actions remanded to state court. We filed a motion in the United States District Court for the District of Maine (the “ME District Court”), where MMA’s bankruptcy is pending, to transfer all of these actions to that court. On March 21, 2014, the ME District Court granted the transfer motion. On April 4, 2014, the plaintiffs filed a motion for reconsideration11 of the order granting the transfer motion and a motion requesting the ME District Court abstain from exercising jurisdiction over the cases. The motionaccompanying consolidated financial statements for reconsideration was denied and the motion for abstention remains pending. On May 1, 2014, the plaintiffs filed a notice stating their intention to appeal the order granting the transfer motion to the First Circuit Court of Appeals. On June 17, 2014, the ME District Court entered a consent order staying proceedings in the transferred cases pending the appeal. On November 11, 2014, the Bankruptcy Trustee and plaintiffs moved to amend the consent order staying proceedings in the transferred cases to allow plaintiffs to file additional cases in other jurisdictions. We and other parties opposed this motion which is currently pending before the court. We believe the plaintiffs’ claims against us,details regarding certain of our subsidiaries, DPM and DPTS are without merit and intend to vigorously defend against such claims and pursue any and all defenses available.
In 2013, we, certain of our subsidiaries, DPM and DPTS, along with a number of other third parties, including CPR, MMA and certain of its affiliates, several manufacturers and lessors of tank cars, as well as the intended purchaser and certain suppliers of the crude oil, were named as defendants in a motion filed in Quebec Superior Court to authorize the bringing of a class-action lawsuit seeking economic, compensatory and punitive damages, as well as costs. The motion generally alleges wrongful death and negligence in the failure to provide for the proper and safe transportation of crude oil. We believe these claims against us, certain of our subsidiaries, DPM and DPTS are without merit and intend to vigorously defend against such claims and pursue any and all defenses available.
In 2013, the Quebec Minister for Sustainable Development, Environment, Wildlife and Parks (the “Minister”) issued an order requiring MMA and us to recover the spilled crude oil caused by the incident and to otherwise fully remediate the impact of the incident on the environment. The Minister subsequently issued a modified order, to which CPR was added as a party. The requirements of the modified order with respect to us are not materially different from the initial order (the initial order and modified order are hereinafter collectively referred to as the “Order”). We have filed a contestation of the Order before the Tribunal administratif du Québec, an administrative body responsible for hearing such contestations, that challenges the legality and validity of the Order on various grounds. In July and September of 2014, we voluntarily entered into agreements with the government of Quebec to perform sediment characterization work in Lake Mégantic and the Chaudière River and certain remediation work in the Chaudière River. The associated cost of these activities is not significant and will be covered by insurance. These agreements were made without admission of liability and under full reservation of rights. We continue to challenge both the legality and validity of the Order.
On January 30, 2014, the Trustee for MMA’s U.S. bankruptcy estate (the “Trustee”) filed an adversary proceeding against us, and certain of our subsidiaries, in the United States Bankruptcy Court for the District of Maine alleging negligence in the failure to provide the proper and safe transportation of crude oil, and seeking economic damages, as well as costs and expenses associated with MMA’s lawsuits arising from the incident. On May 29, 2014, we and our named subsidiaries filed an answer to the Trustee’s complaint. In the quarter ended December 31, 2014, the Trustee moved for, and was granted, leave to file an amended complaint in the adversary proceeding naming CPR and Irving Oil Limited as defendants. We believe these claims against us and certain of our subsidiaries are without merit and intend to vigorously defend against such claims and pursue any and all defenses available.
The Trustee and the Monitor are continuing to explore a potential global settlement of all third party claims arising out of the incident. The Monitor has represented in court filings that those discussions resulted in firm commitments from certain third
17
parties of settlement funds totaling approximately C$200.0 million ($170.0 million). The Trustee and the Monitor continue to discuss global settlement with various other parties, including us.
In addition to these proceedings, we have received demands for defense and/or indemnification from certain tank car lessors pursuant to our lease agreements with such parties. In connection with these demands, three of our tank car lessors have filed actions against us seeking a declaratory judgment on their indemnification claims and reimbursement for the value of certain leased tank cars that were lost or destroyed in the derailment. Specifically, on July 28, 2014, The CIT Group/Equipment Financing, Inc. and CIT Group Inc. filed a complaint against us in the United States District Court for the District of Minnesota alleging breach of contract and seeking declaratory relief and economic damages, as well as costs. On September 19, 2014, we filed a motion to dismiss certain counts of the complaint, which has not yet been ruled on by the court. On October 10, 2014, CIT filed a motion for partial summary judgment, which motion is currently pending before the court. Furthermore, on September 5, 2014, General Electric Railcar Services Corporation (“GE”) filed a complaint against us in the United States District Court for the Southern District of Florida alleging breach of contract and seeking declaratory relief and economic damages, as well as costs. On December 5, 2014, GE amended its complaint and on December 22, 2014, we filed a motion to dismiss certain counts of the amended complaint, which the court has not yet decided. Finally, on November 11, 2014, SMBC Rail Services (“SMBC”) filed a complaint against us in the Northern District of Texas alleging breach of contract and seeking declaratory relief and economic damages, costs, and injunctive relief prohibiting us from entering into any settlement agreement that would impair the obligations owed to SMBC under the lease agreement. On November 18, 2014, SMBC filed a motion for a preliminary injunction that sought to prohibit us from continuing settlement negotiations with the Trustee, the Monitor or other parties. We filed an opposition to the preliminary injunction on December 2, 2014, and a motion to dismiss certain counts of the complaint the following day. On December 29, 2014, the court denied SMBC’s motion for a preliminary injunction. The court has not yet ruled on our motion to dismiss. We believe these claims against us are without merit and intend to vigorously defend against such claims and pursue any and all defenses available.
In December 2014, we sold our 50% interest in DPM and DPTS to certain subsidiaries of DAKP, our partner in the joint ventures. In connection with the sale transaction, we agreed to indemnify DAKP and certain of its affiliates, including DPM and DPTS, for third party claims for bodily injury or property damage arising from the derailment. Pursuant to the agreement, we will control the defense of DAKP and the joint ventures for claims associated with the derailment. In addition, DAKP assigned to us all recoveries from third parties and under applicable insurance policies held by DAKP and the joint ventures for claims arising out of the derailment. Finally, DAKP also agreed to indemnify us for certain costs and expenses arising out of the derailment up to $10.0 million.
Additional claims, lawsuits, proceedings, investigations and orders may be filed, commenced or issued with respect to the incident, which may involve civil claims for damages or governmental investigative, regulatory or enforcement actions against us.
Other Matters
We are a party to various claims, complaints and proceedings arising in the ordinary course of our business operations including, but not limited to: (i)to, environmental claims, commercial and governmental contract claims, such as property damage, demurrage, personal injury, billing and fuel quality claims, (ii) environmental claims, (iii)as well as bankruptcy preference claims and (iv) tax and administrative claims. We are not currently a party to any such claim, complaint or proceeding that we expect to have a material adverse effect on our business or financial condition. However, any adverse resolution of one or more such claims, complaints or proceedings during a particular reporting period could have a material adverse effect on our consolidated financial statements or disclosures for that period.
PART II Price High Low 2014 First quarter $ $ Second quarter Third quarter Fourth quarter 2013 First quarter $ $ Second quarter Third quarter Fourth quarter Our Credit Facility and Term Loans restrict the payment of cash dividends to a maximum of the sum of (i) Stock Performance (c) Number of securities (a) Maximum number of remaining available securities to be issued for future issuance under upon exercise of (b) Weighted average equity compensation plan outstanding exercise price of outstanding (excluding securities Plan name or description RSUs and SSAR Awards SSAR Awards reflected in column (a)) 2006 Omnibus Plan (amended and restated) $ (1) Total Number Approximate Dollar of Shares Purchased Value of Shares that Total Number as Part of Publicly May Yet Be Purchased of Shares Average Price Announced Plans or Under the Plans or Period Purchased (1) Paid Per Share Programs Programs (2) 10/1/14-10/31/14 — $ — — $ 11/1/14-11/30/14 — 12/1/14-12/31/14 — — — Total $ — $ These amounts include shares purchased as part of our publicly announced programs and shares owned and tendered by employees to satisfy the required withholding taxes related to share-based payment awards, which are not deducted from shares available to be purchased under publicly announced programs. In Item 6. Selected FinancialData States (“U.S. GAAP”). For the Year ended December 31, 2014 (1) 2013 (2) 2012 (3) 2011 (4) 2010 (5) Revenue $ $ $ $ $ Cost of revenue Gross profit Operating expenses (6) Income from operations Non-operating income (expenses), net (7) Income before income taxes Provision for income taxes Net income including noncontrolling interest Net (loss) income attributable to noncontrolling interest Net income attributable to World Fuel (7) $ $ $ $ $ Basic earnings per common share (7) $ $ $ $ $ Basic weighted average common shares Diluted earnings per common share (7) $ $ $ $ $ Diluted weighted average common shares Cash dividends declared per common share $ $ $ $ $ As of December 31, 2014 (1) 2013 (2) 2012 (3) 2011 (4) 2010 (5) Cash, cash equivalents and short-term investments $ $ $ $ $ Accounts receivable, net Total current assets Total assets Total current liabilities Total long-term liabilities Total equity (8) In 2013, we completed three acquisitions which were not material individually or in the aggregate. The financial position and results of operations of these acquisitions have been included in our consolidated financial statements since their respective acquisition dates. Included in operating expenses are total non‑cash compensation costs associated with share‑based payment awards of $21.2 million for 2017, $19.3 million for 2016, $17.0 million for 2015, $15.8 million for 2014, and $16.7 million for 2013 Included in non-operating income (expenses), net for 2014 is a gain of $18.1 million related to the sale of our crude oil joint venture interests. The after-tax gain, net of certain related operating expenses was $9.9 million, or $0.14 per basic and diluted share. In 2017, we repurchased 1.7 million shares of common stock for an aggregate value of $61.9 million. In 2016, we repurchased 1.0 million shares of common stock for an aggregate value of $41.2 million. In 2015, we repurchased 1.6 million shares of our common stock for an aggregate value of $70.5 million. In 2014, we repurchased In our aviation and land segments, we primarily purchase and resell fuel and other products, and we do not act as brokers. Profit from our aviation and land segments is primarily determined by the volume and the gross profit achieved on fuel 2016 $ Change Aviation segment $ $ $ Marine segment Land segment Total $ $ $ $ Change Aviation segment $ $ $ Marine segment Land segment Total $ $ $ the overall maritime industry. The lower fuel price environment combined with lower price volatility, led to decreased demand for our price risk management offerings, which contributed to lower overall unit margins. $ Change Compensation and employee benefits $ $ $ Provision for bad debt General and administrative Total $ $ $ expenses related to acquired businesses. $ Change Aviation segment $ $ $ Marine segment Land segment Corporate overhead – unallocated Total $ $ $ our U.S. and foreign military-related businesses. rates. Net income attributable to World Fuel $ $ Share-based compensation expense, net of income taxes of $4,661 and $5,534 for 2014 and 2013, respectively Intangible asset amortization expense, net of income taxes of $6,694 and $8,128 for 2014 and 2013, respectively Expenses related to acquisitions, net of income taxes of $232 for 2014 Gain on the sale of the crude oil joint venture interests (net of certain related operating expenses), net of income taxes of $6,185 — Executive non-renewal charge, net of income taxes of $1,757 — Non-GAAP net income attributable to World Fuel $ $ Diluted earnings per common share $ $ Share-based compensation expense, net of income taxes Intangible asset amortization expense, net of income taxes Expenses related to acquisitions, net of income taxes Gain on the sale of the crude oil joint venture interests (net of certain related operating expenses), net of income taxes — Executive non-renewal charge, net of income taxes — Non-GAAP diluted earnings per common share $ $ $ Change Aviation segment $ $ $ Marine segment Land segment Total $ $ $ $ Change Aviation segment $ $ $ Marine segment Land segment Total $ $ $ $ Change Compensation and employee benefits $ $ $ Provision for bad debt General and administrative Total $ $ $ $ Change Aviation segment $ $ $ Marine segment Land segment Corporate overhead – unallocated Total $ $ $ Net income attributable to World Fuel $ $ Share-based compensation expense, net of income taxes of $5,534 and $4,442 for 2013 and 2012, respectively Intangible asset amortization expense, net of income taxes of $8,128 and $4,090 for 2013 and 2012, respectively Expenses related to acquisitions, net of income taxes of $1,574 for 2012 Non-GAAP net income attributable to World Fuel $ $ Diluted earnings per common share $ $ Share-based compensation expense, net of income taxes Intangible asset amortization expense, net of income taxes Expenses related to acquisitions, net of income taxes Non-GAAP diluted earnings per common share $ $ Liquidity and Capital Resources Net cash provided by operating activities $ $ $ Net cash used in investing activities Net cash provided by financing activities 2016 2017. 2015. a $328.4 million conditions. 2021. optimize scalability, particularly when integrating future acquisitions. We planned to accomplish this in part by a global design and deployment of an upgrade to our existing ERP platform. We made certain provider determinations and completed design phases of the upgrade, and the overall costs incurred to date have not been material. Our digital transformation is predicated on bringing agility to business teams and driving improved operational performance through technology solutions. In connection with our recently announced restructuring plan, the organizational structure will be assessed and the ultimate solutions deployed by us will be geared towards facilitating an optimized and collaborative workforce, coupled with an exceptional experience to our customers and suppliers. These restructuring activities may have a material impact on our timing and overall expected cost of the project. If we fail to successfully implement the upgrade to our existing ERP platform, or other technology platforms we decide upon, or should we experience material delays, or fail to properly manage the project, our ability to grow our business could be adversely affected. Estimating the expected expenditures related to these activities is highly complex and is subject to variables that can materially change our costs. Should the actual costs exceed our estimates, our liquidity and results of operations could be adversely affected. Total < 1 year 1-3 years 3-5 years > 5 years Debt and interest obligations $ $ $ $ $ Operating lease obligations Employment agreement obligations — Derivatives obligations — — Purchase commitment obligations — — Other obligations Total $ $ $ $ $ Debt and Interest Obligations.These obligations include principal and interest payments on fixed‑rate and variable‑rate, fixed‑term debt based on the expected payment dates. Other Obligations. These obligations primarily consist of deferred compensation arrangements. requirements of $44.6 million as of December 31, 2017. Although we analyze customers’ payment history and creditworthiness, we cannot predict with certainty that the customers to whom we extend credit will be able to remit payments on a timely basis, or at all. Because we extend credit on an unsecured basis to most of our customers, there is a possibility that any accounts receivable not collected will ultimately need to be written off. Write-offs for the year ended December 31, 2017 did not have a material impact on our consolidated statement of operations. adverse effect on our results of operations. If credit losses exceed established allowances, our business, financial condition, results of operations and cash flows may be adversely affected. For additional information on the credit risks inherent in our business, see “Item 1A – Risk Factors” in this incurred. operations and financial condition could be adversely affected. fuel and fuel-related products. Revenue from the sale of fuel is recognized when delivery is made to our customers and title has passed, the sales price is our fuel inventory to capitalize on anticipated market opportunities. As of December 31, Weighted Weighted Average Average Mark-to- Fair Settlement Fixed Market Value Hedge Strategy Period Derivative Instrument Notional Unit Price Amount Amount Fair Value Hedge 2015 Commodity contracts for inventory hedging (long) BBL $ $ $ 2015 Commodity contracts for inventory hedging (short) BBL $ Non-Designated 2015 Commodity contracts (long) BBL $ $ $ 2015 Commodity contracts (short) BBL 2016 Commodity contracts (long) BBL 2016 Commodity contracts (short) BBL 2017 Commodity contracts (long) BBL 2017 Commodity contracts (short) BBL 2018 Commodity contracts (long) BBL 2018 Commodity contracts (short) BBL 2015 Foreign currency contracts AUD 2015 Foreign currency contracts BRL 2015 Foreign currency contracts CAD 2015 Foreign currency contracts CHF 2015 Foreign currency contracts CLP 2015 Foreign currency contracts COP 2015 Foreign currency contracts DKK 2015 Foreign currency contracts EUR 2015 Foreign currency contracts GBP 2015 Foreign currency contracts INR 2015 Foreign currency contracts JPY 2015 Foreign currency contracts MXN 2015 Foreign currency contracts NOK 2015 Foreign currency contracts PLN 2015 Foreign currency contracts RON 2015 Foreign currency contracts SGD 2015 Foreign currency contracts ZAR 2016 Foreign currency contracts GBP 2017 Foreign currency contracts GBP $ Item 8. FinancialStatements and Supplementary Data 2017. 2017. Changes in Internal Control over Financial Reporting 2017. PART III 2017. 2017. 2017. 2017. PART IV The following consolidated financial statements are filed as a part of this Consolidated financial statement schedules have been omitted either because the required information is set forth in the consolidated financial statements or notes thereto, or the information called for is not required. Agreement between World Fuel Services Corporation and Michael J. Kasbar, dated March 14, 2008 (incorporated by reference herein to Exhibit 10.2 to our Current Report on Form 8‑K filed on March 20, 2008). * 2006 Omnibus Plan (incorporated by reference herein to Appendix A to Form of Michael 101 PUBLIC ACCOUNTING FIRM As of December 31, Assets: Current assets: Cash and cash equivalents $ $ Accounts receivable, net Inventories Prepaid expenses Short-term derivative assets, net Other current assets Total current assets Property and equipment, net Goodwill Identifiable intangible and other non-current assets Total assets $ $ Liabilities: Current liabilities: Short-term debt $ $ Accounts payable Customer deposits Accrued expenses and other current liabilities Total current liabilities Long-term debt Non-current income tax liabilities, net Other long-term liabilities Total liabilities Commitments and contingencies Equity: World Fuel shareholders’ equity: Preferred stock, $1.00 par value; 100 shares authorized, none issued — — Common stock, $0.01 par value; 100,000 shares authorized, 72,082 and 71,883 shares issued and outstanding as of December 31, 2014 and 2013, respectively Capital in excess of par value Retained earnings Accumulated other comprehensive loss Total World Fuel shareholders’ equity Noncontrolling interest equity Total equity Total liabilities and equity $ $ WORLD FUEL SERVICES CORPORATION For the Year ended December 31, Revenue $ $ $ Cost of revenue Gross profit Operating expenses: Compensation and employee benefits Provision for bad debt General and administrative Income from operations Non-operating income (expenses), net: Interest expense and other financing costs, net Other income (expense), net Income before income taxes Provision for income taxes Net income including noncontrolling interest Net (loss) income attributable to noncontrolling interest Net income attributable to World Fuel $ $ $ Basic earnings per common share $ $ $ Basic weighted average common shares Diluted earnings per common share $ $ $ Diluted weighted average common shares Comprehensive income: Net income including noncontrolling interest $ $ $ Other comprehensive (loss) income: Foreign currency translation adjustments Cash flow hedges, net of income taxes of $36 for 2013 and 2012, respectively — Comprehensive income including noncontrolling interest Comprehensive (loss) income attributable to noncontrolling interest Comprehensive income attributable to World Fuel $ $ $ Capital Accumulated Total in Other World Fuel Noncontrolling Common Stock Excess of Retained Comprehensive Shareholders’ Interest Total Shares Amount Par Value Earnings Loss Equity Equity Equity Balance as of December 31, 2011 $ $ $ $ $ $ $ Net income — — — — Cash dividends declared — — — — — Distribution of noncontrolling interest — — — — — — Amortization of share-based payment awards — — — — — Issuance of common stock related to share-based payment awards including income tax benefit of $3,681 — — — Purchases of common stock tendered by employees to satisfy the required withholding taxes related to share-based payment awards — — — — Other comprehensive loss — — — — — Balance as of December 31, 2012 Net income — — — — Cash dividends declared — — — — — Investment by noncontrolling interest — — — — — — Distribution of noncontrolling interest — — — — — — Deconsolidation of crude oil transloading joint venture — — — — — — Amortization of share-based payment awards — — — — — Issuance of common stock related to share-based payment awards including income tax benefit of $3,301 — — — Purchases of common stock tendered by employees to satisfy the required withholding taxes related to share-based payment awards — — — — Purchases of common stock — — — Other comprehensive loss — — — — — Balance as of December 31, 2013 Net income (loss) — — — — Cash dividends declared — — — — — Initial noncontrolling interest upon acquisition of businesses — — — — — — Distribution of noncontrolling interest — — — — — — Amortization of share-based payment awards — — — — — Issuance of common stock related to share-based payment awards including income tax benefit of $1,028 — — — Purchases of common stock tendered by employees to satisfy the required withholding taxes related to share-based payment awards — — — Purchases of common stock — — — Other comprehensive loss — — — — — Balance as of December 31, 2014 $ $ $ $ $ $ $ WORLD FUEL SERVICES CORPORATION For the Year ended December 31, Cash flows from operating activities: Net income including noncontrolling interest $ $ $ Adjustments to reconcile net income including noncontrolling interest to net cash provided by operating activities: Depreciation and amortization Provision for bad debt Gain on the sale of crude oil joint venture interests — — Share-based payment award compensation costs Deferred tax provision (benefit) Extinguishment of liabilities Other Changes in assets and liabilities, net of acquisitions: Accounts receivable, net Inventories Prepaid expenses Short-term derivative assets, net Other current assets Cash collateral with financial counterparties Other non-current assets Accounts payable Customer deposits Accrued expenses and other current liabilities Non-current income tax, net and other long-term liabilities Total adjustments Net cash provided by operating activities Cash flows from investing activities: Acquisitions of businesses, net of cash acquired and other investments Capital expenditures Escrow payment related to an assumed obligation of an acquired business — — Proceeds from the sale of crude oil joint venture interests — — Purchase of investments — Proceeds from the sale of short-term investments — — Issuances of notes receivable — Repayment of notes receivable — Decrease in cash due to deconsolidation of crude oil transloading joint venture — — Net cash used in investing activities Cash flows from financing activities: Borrowings of debt Repayments of debt Dividends paid on common stock Investment by noncontrolling interest — — Distribution of noncontrolling interest Purchases of common stock — Federal and state tax benefits resulting from tax deductions in excess of the compensation cost recognized for share-based payment awards Purchases of common stock tendered by employees to satisfy the required withholding taxes related to share-based payment awards Other payments — Net cash provided by financing activities Effect of exchange rate changes on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents, as of beginning of year Cash and cash equivalents, as of end of year $ $ $ The accompanying notes are an integral part of these consolidated financial statements. WORLD FUEL SERVICES CORPORATION For the Year ended December 31, Supplemental Disclosures of Cash Flow Information Cash paid during the year for: Interest, net of capitalized interest $ $ $ Income taxes $ $ $ For the Year ended December 31, Assets acquired, net of cash $ $ $ Liabilities assumed $ $ $ The accompanying notes are an integral part of these consolidated financial statements. (pro forma) (pro forma) Revenue $ $ Net income attributable to World Fuel $ $ Earnings per common share: Basic $ $ Diluted $ $ A. Basis of Presentation and Assumptions D. Cash and Cash Equivalents Although we analyze customers’ payment history and creditworthiness, we cannot predict with certainty that the customers to whom we extend credit will be able to remit payments on a timely basis, or at all. Because we extend credit on an unsecured basis to most of our customers, there is a possibility that any accounts receivable not collected will ultimately need to be written off. Write-offs for the year ended December 31, 2017 did not have a material impact on our consolidated statement of operations. adverse effect on our results of operations. If credit losses exceed established allowances, our business, financial condition, results of operations and cash flows may be adversely affected. For more information on our derivatives, see Note 4. operations and financial condition could be adversely affected. assessment, see Note 7, Goodwill and Identifiable Intangible Assets. As of December 31, In recognition. forfeitures. period such determination is made. Numerator: Net income attributable to World Fuel $ $ $ Denominator: Weighted average common shares for basic earnings per common share Effect of dilutive securities Weighted average common shares for diluted earnings per common share Weighted average securities which are not included in the calculation of diluted earnings per common share because their impact is anti-dilutive or their performance conditions have not been met Basic earnings per common share $ $ $ Diluted earnings per common share $ $ $ 2. Accounts Receivable Balance as of beginning of period $ $ $ Charges to provision for bad debt Write-off of uncollectible accounts receivable Recoveries of bad debt Balance as of end of period $ $ $ exercised control, and as such, we consolidated Tobras in our financial statements. As a result of the acquisition of the remaining equity interest of Tobras, we recorded a $10.9 million adjustment to capital in excess of par value on our consolidated balance sheets, which consisted of $3.7 million of cash paid and $7.2 million of non-controlling interest equity. price volatility in forecasted transactions. inventory. Weighted Weighted Average Average Mark-to- Fair Settlement Fixed Market Value Hedge Strategy Period Derivative Instrument Notional Unit Price Amount Amount Fair Value Hedge 2015 Commodity contracts for inventory hedging (long) BBL $ $ $ 2015 Commodity contracts for inventory hedging (short) BBL $ Non-Designated 2015 Commodity contracts (long) BBL $ $ $ 2015 Commodity contracts (short) BBL 2016 Commodity contracts (long) BBL 2016 Commodity contracts (short) BBL 2017 Commodity contracts (long) BBL 2017 Commodity contracts (short) BBL 2018 Commodity contracts (long) BBL 2018 Commodity contracts (short) BBL 2015 Foreign currency contracts AUD 2015 Foreign currency contracts BRL 2015 Foreign currency contracts CAD 2015 Foreign currency contracts CHF 2015 Foreign currency contracts CLP 2015 Foreign currency contracts COP 2015 Foreign currency contracts DKK 2015 Foreign currency contracts EUR 2015 Foreign currency contracts GBP 2015 Foreign currency contracts INR 2015 Foreign currency contracts JPY 2015 Foreign currency contracts MXN 2015 Foreign currency contracts NOK 2015 Foreign currency contracts PLN 2015 Foreign currency contracts RON 2015 Foreign currency contracts SGD 2015 Foreign currency contracts ZAR 2016 Foreign currency contracts GBP 2017 Foreign currency contracts GBP $ The following table presents As of December 31, Balance Sheet Location Derivative assets: Derivatives designated as hedging instruments Derivatives designated as hedging instruments Commodity contracts Short-term derivative assets, net $ $ Commodity contracts Accrued expenses and other current liabilities — Derivatives not designated as hedging instruments Derivatives not designated as hedging instruments Commodity contracts Short-term derivative assets, net Commodity contracts Identifiable intangible and other non-current assets Commodity contracts Accrued expenses and other current liabilities Commodity contracts Other long-term liabilities Foreign currency contracts Short-term derivative assets, net Foreign currency contracts Identifiable intangible and other non-current assets — Foreign currency contracts Accrued expenses and other current liabilities — $ $ Derivative liabilities: Derivatives designated as hedging instruments Commodity contracts Short-term derivative assets, net $ $ Commodity contracts Accrued expenses and other current liabilities — Derivatives not designated as hedging instruments Commodity contracts Short-term derivative assets, net Commodity contracts Identifiable intangible and other non-current assets Commodity contracts Accrued expenses and other current liabilities Commodity contracts Other long-term liabilities Foreign currency contracts Short-term derivative assets, net Foreign currency contracts Identifiable intangible and other non-current assets — Foreign currency contracts Accrued expenses and other current liabilities — Foreign currency contracts Other long-term liabilities — $ $ 12. Derivative Realized and Unrealized Realized and Unrealized Instruments Location Gain (Loss) Hedged Items Location Gain (Loss) For the year ended December 31, For the year ended December 31, Commodity contracts Revenue $ — $ — $ Firm commitments Revenue $ — $ — $ Commodity contracts Cost of revenue — — Firm commitments Cost of revenue — — Commodity contracts Cost of revenue Inventories Cost of revenue $ $ $ $ $ $ Derivatives Location Realized and Unrealized Gain (Loss) For the Year ended December 31, Commodity contracts Revenue $ $ $ Commodity contracts Cost of revenue Foreign currency contracts Revenue Foreign currency contracts Other income (expense), net $ $ $ As of December 31, Estimated Useful Lives Land $ $ Indefinite Buildings and leasehold improvements 3 - 40 years Office equipment, furniture and fixtures 3 - 10 years Computer equipment and software costs 3 - 10 years Machinery, equipment and vehicles 3 - 40 years Accumulated depreciation and amortization $ $ As of December 31, Computer software costs $ $ Accumulated amortization Computer software costs, net $ $ The assets and accumulated amortization recorded under capital leases are as follows (in As of December 31, Capital leases $ $ Accumulated amortization Capital leases, net $ $ exit our marine business in certain international markets. Aviation Marine Land Segment Segment Segment Total As of December 31, 2012 $ $ $ 2013 acquisitions — — Adjustment of purchase price allocations – 2012 acquisitions — Foreign currency translation of non-USD functional currency subsidiary goodwill As of December 31, 2013 $ $ $ $ 2014 acquisitions Adjustment of purchase price allocations – 2013 acquisitions — — Foreign currency translation of non-USD functional currency subsidiary goodwill As of December 31, 2014 $ $ $ $ As of December 31, 2014 As of December 31, 2013 Gross Gross Carrying Accumulated Carrying Accumulated Amount Amortization Net Amount Amortization Net Intangible assets subject to amortization: Customer relationships $ $ $ $ $ $ Supplier agreements Others Intangible assets not subject to amortization: Trademark/trade name rights — — $ $ $ $ $ $ The future estimated amortization of our identifiable intangible assets is as follows (in Year Ended December 31, 2015 $ 2016 2017 2018 2019 Thereafter $ may therefore fluctuate from period to period. 2017. As of December 31, Credit Facility $ $ Term Loans Acquisition promissory notes Other Total debt Short-term debt Long-term debt $ $ The 2017. Year Ended December 31, 2015 $ 2016 2017 2018 2019 Thereafter $ Interest income $ $ $ Interest expense and other financing costs $ $ $ December 31, 2017 and 2016, respectively. Year Ended December 31, 2015 $ 2016 2017 2018 2019 Thereafter $ respectively with delivery dates from 2018 through 2023. Additionally, Agreements with Executive Officers and Key Employees Year Ended December 31, 2015 $ 2016 2017 2018 $ We offer a non-qualified deferred compensation (“NQDC”) plan to certain eligible employees, excluding our named executive officers, whereby the participants may defer a portion of their compensation. We do not match any participant deferrals under the NQDC plan. Participants can elect from a variety of investment choices for their deferred compensation and gains and losses on these investments are credited to their respective accounts. The deferred compensation payable amount under this NQDC plan is subject to the claims of our general creditors and was insurance policies, subject to eligibility requirements, deductibles, and aggregate caps. Although we continuously review the adequacy of our insurance coverage, we may lack adequate coverage for various risks, including environmental claims. operations or cash flows. Stock Repurchase Programs RSUs, where applicable). Remaining shares of common stock Restricted SSAR available for Plan name Stock RSUs Awards future issuance 2006 Plan (1) Unvested Restricted Stock Outstanding Weighted Weighted Average Average Remaining Unvested Grant-date Aggregate Vesting Restricted Fair Value Intrinsic Term Stock Price Value (in Years) As of December 31, 2011 $ $ Granted Vested Forfeited As of December 31, 2012 Granted Vested Forfeited As of December 31, 2013 Granted Vested Forfeited As of December 31, 2014 $ $ RSUs Outstanding RSUs Outstanding Weighted Average Weighted Remaining Average Aggregate Contractual Grant-date Intrinsic Life RSUs Fair Value Value (in Years) As of December 31, 2011 $ $ Granted Issued Forfeited As of December 31, 2012 Granted Issued Forfeited As of December 31, 2013 Granted Issued Forfeited As of December 31, 2014 $ $ SSAR Awards SSAR Awards Outstanding SSAR Awards Exercisable Weighted Weighted Average Average Weighted Remaining Weighted Remaining Average Aggregate Contractual Average Aggregate Contractual SSAR Exercise Intrinsic Life SSAR Exercise Intrinsic Life Awards Price Value (in Years) Awards Price Value (in Years) As of December 31, 2011 $ $ $ $ Exercised As of December 31, 2012 Granted Exercised Forfeited As of December 31, 2013 Exercised Forfeited As of December 31, 2014 $ $ $ $ respectively. the assumptions used to determine such fair value were as follows: expected term of 4.5 years, volatility of 29.8%, dividend yields of 0.5% and risk-free interest rates of 1.2%. The weighted average fair value of the SSAR Awards for 2015 was $14.78 and the assumptions used to determine such fair value were as follows: expected term of 4.3 years, volatility of 30.2%, dividend yields of 0.3% and risk-free interest rates of 1.2%. Year Ended December 31, 2015 $ 2016 2017 2018 2019 $ Other Comprehensive Loss and Accumulated Other Comprehensive Loss Foreign Accumulated Currency Other Translation Cash Comprehensive Adjustments Flow Hedges Loss Balance as of December 31, 2012 $ $ $ Other comprehensive loss Balance as of December 31, 2013 — Other comprehensive loss — Balance as of December 31, 2014 $ $ — $ United States $ $ $ Foreign $ $ $ Current: U.S. federal statutory tax $ $ $ State Foreign Deferred: U.S. federal statutory tax State Foreign Non-current tax expense (income) $ $ $ U.S. federal statutory tax rate % % % Foreign earnings, net of foreign taxes State income taxes, net of U.S. federal income tax benefit Other permanent differences Effective income tax rate % % % rates. For the remaining $1.7 billion accumulated foreign earnings that are actually or deemed repatriated, we have made a reasonable provisional estimate of the associated foreign withholding and state income tax effects of $13.8 million. As of December 31, Gross Deferred Tax Assets: Bad debt reserve $ $ Net operating loss Accrued and other share-based compensation Accrued expenses Unrealized derivative losses — Customer deposits Installment sale — Unrealized foreign exchange Total gross deferred tax assets Less: Valuation allowance — — Gross deferred tax assets, net of valuation allowance Deferred Tax Liabilities: Depreciation Goodwill and intangible assets Prepaid expenses, deductible for tax purposes Unrealized derivatives — Other Total gross deferred tax liabilities Net deferred tax liabilities $ $ Reported on the consolidated balance sheets as: Other current assets for deferred tax assets, current $ $ Identifiable intangible and other non-current assets for deferred tax assets, non-current $ $ Accrued expenses and other current liabilities for deferred tax liabilities, current $ $ Non-current income tax liabilities, net for deferred tax liabilities, non-current $ $ Puerto Rico, subjective evidence such as growth projections. the next five year period. Unrecognized Tax Liabilities – opening balance $ $ $ Gross increases – tax positions in prior period — Gross decreases – tax positions in prior period Gross increases – tax positions in current period Gross decreases – tax positions in current period — — — Settlements — — Lapse of statute of limitations Unrecognized Tax Liabilities – ending balance $ $ $ If our Examination not 2011 - 2014 United Kingdom Denmark The following table presents information about our gross assets and liabilities that are measured at fair value on a recurring basis as of December 31, Netting and Level 1 Level 2 Level 3 Sub-Total Collateral Total 2014 Assets: Commodity contracts $ $ $ $ $ $ Foreign currency contracts — — Cash surrender value of life insurance — — — Total $ $ $ $ $ $ Liabilities: Commodity contracts $ $ $ $ $ $ Foreign currency contracts — — — Inventories — — — Total $ $ $ $ $ $ 2013 Assets: Commodity contracts $ $ $ — $ $ $ Foreign currency contracts — — Inventories — — — Total $ $ $ — $ $ $ Liabilities: Commodity contracts $ $ $ — $ $ $ Foreign currency contracts — — Total $ $ $ — $ $ $ As of December 31, Commodity Contracts Assets: Short-term derivative assets, net $ $ Identifiable intangible and other non-current assets Total net assets $ $ Liabilities: Accrued expenses and other current liabilities $ $ Other long-term liabilities Total net liabilities $ $ Foreign Currency Contracts Assets: Short-term derivative assets, net $ $ Identifiable intangible and other non-current assets — Total net assets $ $ Liabilities: Accrued expenses and other current liabilities $ — $ Other long-term liabilities — Total net liabilities $ — $ Realized and Change in Unrealized Location of Realized Unrealized Gains Gains Relating to and Unrealized (Losses) Assets and Liabilities Gains (Losses) Beginning Included in Transfers End that are Held at Included in of Period Earnings Settlements into Level 3 of Period End of Period Earnings 2014 Assets: Commodity contracts $ — $ $ $ $ $ Revenue Liabilities: Commodity contracts $ — $ $ $ — $ $ Cost of revenue 2013 Liabilities: Commodity contracts $ — $ $ $ — $ — $ — Cost of revenue customers, including international container and tanker fleets, commercial cruise lines, yachts and time charter operators, offshore rig owners and operators, the U.S. and foreign governments as well as other fuel suppliers. For the Year ended December 31, Revenue: Aviation segment $ $ $ Marine segment Land segment $ $ $ Gross profit: Aviation segment $ $ $ Marine segment Land segment $ $ $ Income from operations: Aviation segment $ $ $ Marine segment Land segment Corporate overhead – unallocated $ $ $ Depreciation and amortization: Aviation segment, includes allocation from corporate $ $ $ Marine segment, includes allocation from corporate Land segment, includes allocation from corporate Corporate $ $ $ Capital expenditures: Aviation segment $ $ $ Marine segment Land segment Corporate $ $ $ Information concerning our accounts receivable, As of December 31, Accounts receivable, net: Aviation segment, net of allowance for bad debt of $7,864 and $9,351 as of December 31, 2014 and 2013, respectively $ $ Marine segment, net of allowance for bad debt of $8,434 and $9,845 as of December 31, 2014 and 2013, respectively Land segment, net of allowance for bad debt of $9,394 and $9,992 as of December 31, 2014 and 2013, respectively $ $ Goodwill: Aviation segment $ $ Marine segment Land segment $ $ Identifiable intangible assets, net: Aviation segment $ $ Marine segment Land segment $ $ Total assets: Aviation segment $ $ Marine segment Land segment Corporate $ $ For the Year ended December 31, Revenue: United States $ $ $ EMEA (1) Asia/Pacific (2) Americas, excluding United States Total $ $ $ Income from operations: United States $ $ $ EMEA Asia/Pacific Americas, excluding United States Total $ $ $ As of December 31, Non-current assets: United States $ $ EMEA Asia/Pacific Americas, excluding United States Total $ $ Total assets: United States $ $ EMEA Asia/Pacific Americas, excluding United States Total $ $ Includes revenue related to the Includes revenue related to Singapore of March 31, June 30, September 30, December 31, 2014 (1) 2014 (1)(2) 2014 (1)(2)(3) 2014 (1)(2)(3)(4) Revenue $ $ $ $ Gross profit $ $ $ $ Net income including noncontrolling interest $ $ $ $ Net income attributable to World Fuel $ $ $ $ Basic earnings per common share (5) $ $ $ $ Diluted earnings per common share $ $ $ $ March 31, June 30, September 30, December 31, Revenue $ $ $ $ Gross profit $ $ $ $ Net income including noncontrolling interest $ $ $ $ Net income attributable to World Fuel $ $ $ $ Basic earnings per common share (5) $ $ $ $ Diluted earnings per common share (5) $ $ $ $ Includes a valuation allowance on our U.S. deferred tax assets of $76.9 million, due to our U.S. operations generating a three-year cumulative loss during the Basic and diluted earnings per share are computed independently for each quarter and the full year based upon respective weighted average shares outstanding. Therefore, the sum of the quarterly basic and diluted earnings per share amounts may not equal the annual basic and diluted earnings per share amounts reported. 28, 2018. /s/ IRA M. BIRNS Signature /s/ KEN BAKSHI Ken Bakshi /s/ JOHN L. MANLEYNot applicable.18Item 5. Marketfor Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity SecuritiesOur common stock is traded on the New York Stock Exchange (“NYSE”) under the symbol INT. As of December 31, 2014,29, 2017, the closing price of our stock on the NYSE was $46.93.$28.14. The following table sets forth, for each quarter in 20142017 and 2013,2016, the high and low closing sales prices of our common stock as reported by the NYSE.45.66 41.40 49.23 42.75 49.24 39.92 48.21 36.87 45.11 37.84 41.88 37.03 41.62 35.00 43.21 36.79 Price High Low 2017 First quarter $ 47.49 $ 34.79 Second quarter 38.67 34.64 Third quarter 40.16 32.28 Fourth quarter 36.64 25.80 2016 First quarter $ 49.50 $ 35.13 Second quarter 51.01 42.95 Third quarter 49.38 44.14 Fourth quarter 47.30 38.79 As of February 5, 2015,7, 2018, there were 351370 shareholders of record of our common stock.Cash DividendsThe following table sets forth the amount, the declaration date, record date and payment date for each quarterly cash dividend declared in 20142017 and 2013.2016.Per Share AmountDeclaration DateRecord DatePayment Date2014First quarter$ Per Share Amount Declaration Date Record Date Payment Date 2017 First quarter $ 0.0600 March 3, 2017 March 17, 2017 April 7, 2017 Second quarter 0.0600 May 25, 2017 June 9, 2017 July 7, 2017 Third quarter 0.0600 October 4, 2017 October 16, 2017 November 6, 2017 Fourth quarter 0.0600 December 1, 2017 December 15, 2017 January 5, 2018 2016 First quarter $ 0.0600 March 3, 2016 March 18, 2016 April 8, 2016 Second quarter 0.0600 May 26, 2016 June 10, 2016 July 1, 2016 Third quarter 0.0600 September 12, 2016 September 23, 2016 October 12, 2016 Fourth quarter 0.0600 November 30, 2016 December 16, 2016 January 6, 2017 0.0375 March 7, 2014March 21, 2014April 4, 2014Second quarter0.0375 May 29, 2014June 20, 2014July 11, 2014Third quarter0.0375 September 3, 2014September 19, 2014October 10, 2014Fourth quarter0.0375 November 21, 2014December 19, 2014January 9, 20152013First quarter$0.0375 March 8, 2013March 22, 2013April 5, 2013Second quarter0.0375 May 31, 2013June 21, 2013July 5, 2013Third quarter0.0375 August 23, 2013September 20, 2013October 4, 2013Fourth quarter0.0375 November 26, 2013December 13, 2013January 3, 2014$50.0$100.0 million plus (ii) 50% of the cumulative consolidated net income for each fiscal quarter beginning with the fiscal quarter ended March 31, 2010,2016, plus (iii) 100% of the net proceeds of all equity issuances made after October 2013. For additional information regarding our Credit Facility and Term Loans, see Note 68 to the accompanying consolidated financial statements, included herein, and “Liquidity and Capital Resources” in “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations.”19This graph compares the total shareholder return on our common stock with the total return on the Russell 2000 Index and the S&P Energy Index for the five‑year period from December 31, 20092012 through December 31, 2014.2017. The cumulative return includes reinvestment of dividends.
Fiscal year ending December 31.Copyright© 2015 S&P, a division of The McGraw-Hill Companies Inc. All rights reserved.Copyright© 2015 Russell Investment Group. All rights reserved.
Equity Compensation PlansThe following table summarizes securities authorized for issuance related to outstanding restricted stock units (“RSUs”) and stock‑settled stock appreciation rights (“SSAR Awards”) under our equity compensation2016 omnibus plan (which was approved by our shareholders)(the “2016 Plan”) and available for future issuance under our equity compensation plan2016 Plan as of December 31, 20142017 (in thousands,millions, except weighted average price data):1,017 9.14 3,263 (1) Calculated without taking into account shares of common stock subject to, as well as the RSUs reported in column (a)2006 omnibus plan, as amended and that will become issuable following vesting of such RSUs without any cash consideration or other payment required.20Plan name or description (a) Maximum number of securities to be issued upon exercise of outstanding RSUs and SSAR Awards (b) Weighted average exercise price of outstanding RSUs and SSAR Awards(1) (c) Number of securities remaining available for future issuance under equity compensation plan (excluding securities reflected in column (a)) 2016 Plan 1.0 $ 14.68 3.4 2006 Plan 1.2 $ 9.71 — (1) Calculated without taking into account shares of common stock subject to the RSUs reported in column (a) and that will become issuable following vesting of such RSUs without any cash consideration or other payment required. Issuer Purchases of Equity SecuritiesThe following table presents information with respect to repurchases of common stock made by us during the quarterly period ended December 31, 20142017 (in thousands, except average price per share):55,000 9 44.21 55,000 55,000 9 44.21 55,000 Period Total Number of Shares Purchased (1) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2)10/1/2017 - 10/31/2017 — $ — — $ 100,000 11/1/2017 - 11/30/2017 — — — 100,000 12/1/2017 - 12/31/2017 — — — 100,000 Total — $ — — $ 100,000 (1) (2) May 2014,October 2017, our Board of Directors renewed its existingapproved a new common stock repurchase program by replacingwhich replaced the remainder of the existing program and authorizingauthorized the purchase of up to $65.0$100.0 million in common stock (the “Repurchase Program”). The Repurchase Program does not require a minimum number of shares of common stock to be purchased, has no expiration date and may be suspended or discontinued at any time. As of December 31, 2014, $55.02017, $100.0 million in common stock remains available for purchase under the Repurchase Program. The timing and amount of shares of common stock to be repurchased under the programRepurchase Program will depend on market conditions, share price, securities law and other legal requirements and factors.For information on repurchases of common stock for the first three quarters of 2014,2017, see the corresponding Quarterly Report on Form 10-Q.21The following selected consolidated financial data should be read in conjunction with the consolidated financial statements and related notes thereto and Part II, Item 7 of this report appearing under the caption, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other financial data and “Risk Factors” included elsewhere in this 20142017 10‑K Report. The historical results are not necessarily indicative of the operating results to be expected in the future. All financial information presented has been prepared in U.S. dollars and in accordance with accounting principles generally accepted (“GAAP”) in the United States.WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIESSELECTED CONSOLIDATED FINANCIAL DATA(In thousands,millions, except earnings and dividends per share data)43,386,389 41,561,947 38,945,338 34,622,854 19,131,147 42,572,767 40,809,189 38,271,891 33,987,851 18,689,006 813,622 752,758 673,447 635,003 442,141 544,474 488,400 416,424 378,031 261,275 269,148 264,358 257,023 256,972 180,866 403 (17,693) (17,428) (18,769) (3,336) 269,551 246,665 239,595 238,203 177,530 51,144 39,505 38,244 39,001 31,027 218,407 207,160 201,351 199,202 146,503 (3,340) 4,085 12,006 5,173 (362) 221,747 203,075 189,345 194,029 146,865 3.13 2.85 2.66 2.74 2.36 70,750 71,224 71,154 70,687 62,168 3.11 2.83 2.64 2.71 2.31 71,323 71,800 71,817 71,510 63,441 0.15 0.15 0.15 0.15 0.15 302,264 292,061 172,740 205,415 272,893 2,307,852 2,538,642 2,193,866 2,160,561 1,386,700 3,674,843 3,815,501 3,281,377 3,122,227 2,067,867 4,879,980 4,739,277 4,107,751 3,697,246 2,566,450 2,241,354 2,514,515 2,149,298 2,026,142 1,358,484 773,745 545,868 416,829 324,386 81,402 1,864,881 1,678,894 1,541,624 1,346,718 1,126,564 For the Year ended December 31, 2017 (1)(2) 2016 (3)(4) 2015 (4)(5) 2014 (4)(6) 2013 (4)(7) Revenue $ 33,695.5 $ 27,015.8 $ 30,381.4 $ 43,391.8 $ 41,559.9 Cost of revenue 32,763.3 26,116.8 29,520.4 42,572.7 40,807.8 Gross profit 932.2 899.0 861.0 819.1 752.2 Operating expenses (8)886.6 710.1 615.3 542.4 488.5 Income from operations 45.6 188.9 245.7 276.7 263.7 Non-operating expenses, net (9)(66.7 ) (46.7 ) (27.9 ) (1.9 ) (15.4 ) Income (loss) before income taxes (21.1 ) 142.1 217.7 274.8 248.3 Provision for income taxes 149.2 15.7 47.2 53.6 46.0 Net income (loss) including noncontrolling interest (170.3 ) 126.4 170.5 221.1 202.3 Net income (loss) attributable to noncontrolling interest (0.1 ) — (3.9 ) (3.3 ) 4.4 Net income (loss) attributable to World Fuel (10)$ (170.2 ) $ 126.5 $ 174.5 $ 224.5 $ 198.0 Basic earnings (loss) per common share (10)$ (2.50 ) $ 1.82 $ 2.49 $ 3.17 $ 2.78 Basic weighted average common shares 68.1 69.3 70.2 70.8 71.2 Diluted earnings (loss) per common share (10)$ (2.50 ) $ 1.81 $ 2.47 $ 3.15 $ 2.76 Diluted weighted average common shares 68.1 69.8 70.7 71.3 71.8 Cash dividends declared per common share $ 0.24 $ 0.24 $ 0.24 $ 0.15 $ 0.15 As of December 31, 2017 (1)(2) 2016 (3)(4) 2015 (4)(5) 2014 (4)(6) 2013 (4)(7) Cash and cash equivalents $ 372.3 $ 698.6 $ 582.5 $ 302.3 $ 292.1 Accounts receivable, net 2,705.6 2,344.0 1,812.6 2,308.2 2,538.6 Total current assets 3,940.4 3,836.6 3,246.0 3,675.2 3,815.5 Total assets 5,587.8 5,412.6 4,525.3 4,878.1 4,735.2 Total current liabilities 2,718.6 2,182.7 1,754.2 2,241.9 2,518.9 Total long-term liabilities 1,131.3 1,290.1 865.3 776.8 545.9 Total equity (10)1,738.0 1,940.0 1,905.9 1,859.4 1,670.5 (1) In 2017, we acquired the assets of certain ExxonMobil affiliates in Italy, Germany, Australia and New Zealand and completed five additional acquisitions which were not material, individually or in the aggregate. The financial position and results of operations of these acquisitions have been included in our consolidated financial statements since their respective acquisition dates. (2) Operating expenses for 2017 includes goodwill and other impairments of $91.9 million and restructuring related charges of $59.6 million. Provision for income taxes for 2017 includes a $143.7 million expense related to the one-time transition tax on accumulated foreign earnings recorded as a result of the Tax Act. (3) In 2016, we acquired the assets of certain ExxonMobil affiliates in Canada and two airports in France on November 1st, and the U.K. and one airport in France on December 1st, as well as all of the outstanding stock of PAPCO, Inc. (“PAPCO”) and Associated Petroleum Products, Inc. (“APP”) on July 1st. We also completed six additional acquisitions which were not material, individually or in the aggregate. The financial position and results of operations of these acquisitions have been included in our consolidated financial statements since their respective acquisition dates.(4) Certain prior period amounts have been revised to reflect the impact of adjustments made to our provision for income taxes. (5) In 2015, we acquired all the outstanding stock of Pester Marketing Company (“Pester”) on September 1st and completed four additional acquisitions which were not material, individually or in the aggregate. The financial position and results of operations of these acquisitions have been included in our consolidated financial statements since their respective acquisition dates.(6) In 2014, we acquired i) all of the outstanding stock of Watson Petroleum Limited (now known as WFL (UK) Limited) (“Watson Petroleum”) on March 7th,7th, ii) all of the outstanding stock of Colt International, L.L.C. (“Colt”) on July 29th,29th, and iii) completed three additional acquisitions which were not material, individually or in the aggregate. The financial position and results of operations of these acquisitions have been included in our consolidated financial statements since their respective acquisition dates.(2)(7) (3)(8) In 2012, we acquired i) certain assets of CarterEnergy Corporation, including the assets comprising its wholesale motor fuel distribution business (the “CarterEnergy business”) on September 1st, ii) certain assets of Multi Service Corporation, including the assets comprising its transaction management business, and all of the outstanding stock of its foreign subsidiaries (the “Multi Service business”) on December 31st and iii) completed three additional acquisitions which were not material individually or in the aggregate. The financial position and results of operations of these acquisitions have been included in our consolidated financial statements since their respective acquisition dates.22(4)In 2011, we acquired i) all of the outstanding stock of Nordic Camp Supply ApS and certain affiliates (“NCS”) and ii) all of the outstanding stock of Ascent Aviation Group, Inc. (“Ascent”) on March 1st and April 1st, respectively, and iii) completed six additional acquisitions which were not material individually or in the aggregate. The financial position and results of operations of these acquisitions have been included in our consolidated financial statements since their respective acquisition dates.(5)In 2010, we acquired i) certain assets of Lakeside Oil Company, Inc., including the assets comprising its wholesale motor fuel distribution business (the “Lakeside business”) on July 1st, ii) all of the outstanding stock of Western Petroleum Company (“Western”) on October 1st, iii) all of the outstanding stock of The Hiller Group Incorporated, Air Petro Corp. and all of the outstanding membership interests of HG Equipment, LLC and AHT Services, LLC (collectively, “Hiller”) on December 31st and iv) completed two additional acquisitions which were not material individually or in the aggregate. The financial position and results of operations of these acquisitions have been included in our consolidated financial statements since their respective acquisition dates.(6) $14.1 million for 2012, $11.0 million for 2011 and $10.1 million for 2010 and intangible amortization expense of $29.1$41.9 million for 2017, $39.7 million for 2016, $30.4 million for 2015, $27.0 million for 2014, $22.4and $22.6 million for 2013, $18.1 million for 2012, $25.0 million for 2011 and $9.8 million for 2010.(7)(9) (8)(10) 227,0000.2 million shares of our common stock for an aggregate value of $10.0 million pursuant to the Repurchase Program. In 2013, we repurchased 926,000 shares of our common stock for an aggregate value of $35.0 million pursuant to the Repurchase Program. In 2010, we completed a public offering of 9,200,000 shares of our common stock and received net proceeds of $218.8 million.Item 7. Management’sManagement’s Discussion and Analysis of Financial Condition and Results of OperationsThe following discussion should be read in conjunction with “Item 6 – Selected Financial Data,” and with the accompanying consolidated financial statements and related notes thereto appearing elsewhere in this 20142017 10‑K Report. The following discussion may contain forward‑looking statements, and our actual results may differ significantlymaterially from the results suggested by these forward‑looking statements. Some factors that may cause our results to differ materially from the results and events anticipated or implied by such forward‑ looking statements are described in “Item 1A – Risk Factors.Factors” and under “Forward-Looking Statements.”Business OverviewWe are a leading global fuel logistics, transaction management and payment processingservices company, principally engaged in the distribution of fuel and related products and services in the aviation, marine and land transportation industries. In recent years, we have expanded our product and service offerings to include energy advisory services and supply fulfillment with respect to natural gas and power and transaction and payment management solutions to commercial and industrial customers. Our intention is to become a leading global energy management company offering a full suite of energy advisory, management and fulfillment services and technology solutions across the energy product spectrum. We competealso seek to become a leading transaction and payment management company, offering payment management solutions to commercial and industrial customers, principally in the aviation, land and marine transportation industries.The overall aviation market remains strong, reflecting healthy airline financial performance and strong overall demand. Our aviation segment has benefited from our increased logistics capability and expanded footprint from the acquisition of international aviation fueling operations from various ExxonMobil affiliates, which has facilitated our expansion into additional airport locations. The aviation segment has also benefited from increased sales to government customers, which include the U.S. Defense Logistics Agency, the North Atlantic Treaty Organization (NATO) and other government and military customers. Sales to government customers account for a material portion of our aviation segment's profitability. We expect our government-related activity to remain strong, although we believe the related profit contribution will decrease in 2018 as a result of compressed margins associated with contract renewals. Sales to government customers are driven by providingglobal events and military-related activities and can therefore significantly change from period to period and materially impact our results of operations.Our land segment has grown primarily through acquisitions as we seek to build out our land fuel distribution capabilities, primarily in the U.S. and U.K. Recently, our land segment has been negatively impacted by lower profitability from our supply and trading activities as a result of market conditions, specifically within the U.S., which we do not expect will improve in the near future. In addition, our operating results in the U.S. and U.K. in recent years have been adversely impacted by unseasonably warm winter weather conditions. In contrast, our land segment has benefited from sales to government customers and we expect such activity to remain strong in the near term. We are focused on realizing the synergies associated with value‑added benefits, including single‑supplier convenience, competitive pricing,our acquisitions, implementing a single common technology platform and driving greater leverage and ratability in our operating model.Over the availabilitycourse of trade credit,2017, our marine segment was adversely impacted by the weak conditions within the global shipping and offshore oil exploration markets and as a result, our marine segment experienced lower overall volumes in our core resale business as compared to historical levels. We also experienced lower demand for our price risk management logistical support,products as a result of low fuel quality controlprices and fuel procurement outsourcing. limited market volatility. Due to growing competitive pressures in maritime markets, including the prolonged decline of maritime shipping volumes along with lower demand for price risk management products and our decision to exit our marine business in certain international markets, we expect lower than previously anticipated sales and operating margins.We havecontinue to rationalize our operating model to gain efficiencies through various initiatives that are ongoing throughout the company, including moving to cloud-based solutions. Furthermore, during the fourth quarter, we began an enterprise-wide restructuring plan that is designed to streamline the organization, and reallocate resources to better align our organizational structure and costs with our strategy, ultimately to improve operating efficiencies. The restructuring program involves reviewing non-core businesses and investments, our organizational structure, and expected commercial opportunities in the markets we serve. We will also consider our existing technology platforms in connection with our ongoing enterprise resource planning platform upgrade, specifically with an aim to more fully integrate recent acquisitions and increase associated profit contribution. While these activities are ongoing, we expect the majority of these activities to be completed over the course of 2018.Reportable SegmentsWe operate in three reportable operating business segments:segments consisting of aviation, marine,land and land. We primarily contract with third parties for the delivery and storage of fuel products, however, in some cases we own storage and transportation assets for strategic purposes.marine. In our aviation segment, we offer fuel and related products and services to major commercial airlines, second and third‑third tier airlines, cargo carriers, regional and low cost carriers, airports, fixed based operators, corporate fleets, fractional operators, private aircraft, military fleets and to the U.S. and foreign governments. In our marine segment, we offer fuel, lubricants and related products and services to a broad base of marine customers, including international container and tanker fleets, commercial cruise lines, yachts and time‑charter operators, the U.S. and foreign governments as well as other fuel suppliers.intergovernmental organizations. In our land segment, we offer fuel, lubricants, power and natural gas solutions through Kinect, our global energy management services platform, and related products and services to customers including petroleum distributors operating in the land transportation market, retail petroleum operators, and industrial, commercial, residential and government customerscustomers. Our marine segment product and we engage in crude oil marketing activities. In addition, we offer transaction management services which consist of card payment solutionsservice offerings include fuel, lubricants and merchant processingrelated products and services to a broad base of customers, inincluding international container and tanker fleets, commercial cruise lines, yachts and time charter operators, offshore rig owners and operators, the aviation, marineU.S. and land transportation industries.Reportable SegmentsWe have three reportable operating segments: aviation, marineforeign governments as well as other fuel suppliers. Within each of our segments we may enter into derivative contracts to mitigate the risk of market price fluctuations and land. Corporate expenses are allocatedalso to each segment based on usage, where possible, or on other factors accordingoffer our customers fuel pricing alternatives to the nature of the activity. We evaluate and manage our business segments using the performance measurement of income from operations.23The financial position, results of operations and cash flows of (i) Watson Petroleum have been included in our land segment commencing on March 7, 2014, its acquisition date and (ii) Colt have been included in our aviation segment commencing on July 29, 2014, its acquisition date.Selected financial information with respect to our business segments is provided in Note 11 to the accompanying consolidated financial statements included in this 2014 10‑K Report.Results of Operationsresalessales and a percentage of card payment and processing revenue. In our marine segment, we primarily purchase and resell fuel and also act as brokers for others. Profit from our marine segment is determined primarily by the volume and gross profit achieved on fuel resales and by the volume and commission rate of the brokering business. Our profitabilityProfitability in our segments also depends on our operating expenses, which may be significantlymaterially affected to the extent that we are required to provide for potential bad debt.Our revenue and cost of revenueCorporate expenses are significantly impacted by world oil prices, as evidenced in part by our revenue and cost of revenue fluctuations in previous fiscal years, while our gross profit is not necessarily impacted by changes in world oil prices. However, significant movements in fuel prices during any given financial period can have a significant impactallocated to each segment based on our gross profit, either positivelyusage, where possible, or negatively depending on other factors according to the direction, volatility and timing of such price movements.We may experience decreases in future sales volumes and margins as a resultnature of the ongoing deterioration inactivity. We evaluate and manage our business segments using the world economy,performance measurement of income from operations.The results of operations include the declineresults of the transportation industry, natural disasters and continued conflicts and instabilityfueling operations acquired from certain ExxonMobil affiliates in during 2017.Selected financial information with respect to our business segments is provided in Note 13 to the Middle East, Asia and Latin America, as well as potential future terrorist activities and possible military retaliation. In addition, because fuel costs represent a significant part of our customers’ operating expenses, volatile and/or high fuel prices can adversely affect our customers’ businesses, and, consequently, the demand for our services and our results of operations. Our hedging activities may not be effective to mitigate volatile fuel prices and may expose us to counterparty risk. See “Item 1A – Risk Factors” ofaccompanying consolidated financial statements included in this 20142017 10‑K Report.2014Results of Operations2017 compared to 2013Revenue. Our revenue for 20142017 was $43.4$33.7 billion, an increase of $1.8$6.7 billion, or 4.4%24.7%, as compared to 2013.2016. Our revenue during these periods was attributable to the following segments (in thousands)millions):2014 2013 17,268,834 16,087,611 1,181,223 13,843,307 14,790,342 (947,035) 12,274,248 10,683,994 1,590,254 43,386,389 41,561,947 1,824,442 Our 2017 2016 $ Change Aviation segment $ 14,538.2 $ 10,914.4 $ 3,623.9 Land segment 10,958.0 8,918.8 2,039.1 Marine segment 8,199.3 7,182.5 1,016.7 Total $ 33,695.5 $ 27,015.8 $ 6,679.7 Revenues in our aviation segment revenuewere $14.5 billion for 2014 was $17.3 billion,the year ended 2017, an increase of $1.2$3.6 billion, or 7.3%33.2% as compared to 2013. Of the2016. The increase in aviation segment revenue, $2.5 billionrevenues was due to increased volume attributable to new and existing customers, which was partially offsetdriven by $1.3 billion due to a decrease inhigher average jet fuel prices per gallon sold during the year ended 2017, where the average price per gallon sold as a result of lower average jet fuel prices in 2014was $1.83, as compared to 2013.Our marine segment$1.53 in 2016. The overall increase in revenue was also driven by higher volumes from foreign military-related activity and our international fueling operations, where total volumes for 2014 was $13.8the year ended 2017 were 7.9 billion a decreasegallons, an increase of $0.9 billion, or 6.4%11.4%, as compared to 2013. Of2016.Revenues in our land segment were $11.0 billion for the decreaseyear ended 2017, an increase of $2.0 billion, or 22.9%, as compared to 2016. The increase in land revenues primarily resulted from a higher average fuel price per gallon sold during the year ended 2017, where the average price per gallon sold was $1.84, as compared to $1.66 in 2016. The increase was also due to an increase in volumes from acquired businesses, where volumes for the year ended 2017 were 5.9 billion gallons, an increase of 10.7%, as compared to 2016.Revenues in our marine segment revenue, $0.5were $8.2 billion for the year ended 2017, an increase of $1.0 billion, or 14.2%, as compared to 2016. The increase was due to decreased volume and $0.4 billion was due todriven primarily by a decrease34.8% increase in the average price per metric ton sold, in 2014to $308.88 for the year ended 2017, as compared to 2013.Our land$229.2 in 2016. Volumes in our marine segment revenue for 2014 was $12.3 billion, an increasethe year ended 2017 were 26.5 million metric tons, a decrease of $1.6 billion,4.8 million metric tons or 14.9%15.3%, as compared to 2013. Of2016, driven principally by lower volumes in Asia.Gross Profit. Our gross profit for 2017 was $932.2 million, an increase of $33.3 million, or 3.7%, as compared to 2016. Our gross profit was attributable to the following segments (in millions): 2017 2016 $ Change Aviation segment $ 440.5 $ 401.0 $ 39.5 Land segment 365.8 348.5 17.3 Marine segment 126.0 149.5 (23.5 ) Total $ 932.2 $ 899.0 $ 33.3 Our aviation segment gross profit for the year ended 2017 was $440.5 million, an increase of $39.5 million, or 9.9%, as compared to 2016. The increase in aviation gross profit was due to increased activity from our government-related business, including certain spot government supply opportunities and increased volumes and profitability from our international fueling operations. These increases were partially offset by lower gross profit per gallon sold in our physical inventory business, as a result of unfavorable jet fuel price movements.Our land segment gross profit for the year ended 2017 was $365.8 million, an increase of $17.3 million, or 5.0%, as compared to 2016. The increase in land segment revenue, $2.1 billiongross profit was due to revenueprimarily driven by the benefit derived from recently acquired businesses, and $0.6 billion was due to increased volume attributable to new and existing customers, which waswere partially offset by $1.1 billioncontinued lower profits from our supply and trading activities in North America.Our marine segment gross profit for the year ended 2017 was $126.0 million, a decrease of $23.5 million, or 15.7%, as compared to 2016. Over the course of 2017, the marine segment continued to be adversely impacted by the prolonged weakness in the overall maritime industry, lower overall volumes and profitability in our core resale business, primarily in the Asia Pacific region, and our decision to exit certain markets, combined with further declines in profits from the sale of price risk management products globally.Operating Expenses. Total operating expenses for 2017 were $886.6 million, an increase of $176.5 million, or 24.9%, as compared to 2016. The following table sets forth our expense categories (in millions): 2017 2016 $ Change Compensation and employee benefits $ 428.2 $ 413.3 $ 14.9 General and administrative 306.9 296.8 10.1 Goodwill and other impairments 91.9 — 91.9 Restructuring charges 59.6 — 59.6 Total $ 886.6 $ 710.1 $ 176.5 The $14.9 million increase in compensation and employee benefits and the $10.1 million increase in general and administrative expenses was principally due to the inclusion of expenses of acquired businesses.Goodwill and other impairments of $91.9 million were primarily attributable to the $72.3 million impairment of goodwill in our marine segment, $7.9 million associated with intangible assets, primarily customer relationships in both the marine and land segments, and certain impairments of property and equipment within our marine segment. The restructuring charges of $59.6 million were comprised primarily of costs associated with exiting two business activities, our railcar business and an underperforming capital-intensive distributor program.Income (loss) from Operations. Our income from operations for 2017 was $45.6 million, a decrease of $143.3 million, or 75.9%, as compared to 2016. Income from operations during these periods was attributable to the following segments (in millions): 2017 2016 $ Change Aviation segment $ 192.9 $ 160.5 $ 32.4 Land segment (7.9 ) 70.8 (78.8 ) Marine segment (57.8 ) 30.2 (88.1 ) 127.2 261.5 (134.4 ) Corporate overhead - unallocated 81.6 72.7 8.9 Total $ 45.6 $ 188.9 $ (143.3 ) Our income from operations, including unallocated corporate overhead, for the year ended 2017 was $45.6 million, a decrease of $143.3 million as compared to 2016. The decline was primarily attributable to our marine and land segments, specifically as a result of the impairment of goodwill, intangible assets and the restructuring charges recorded in 2017. In our marine segment, loss from operations for the year ended 2017 was $57.8 million, a decrease of $88.1 million as compared to 2016. Our marine segment continued to be adversely impacted by the prolonged weakness in the overall maritime industry. Limited fuel price volatility continued to result in decreased demand for our price risk management offerings. The lower fuel price environment resulted in lower overall unit margins in 2017 as compared to 2016. In our land segment, loss from operations for the year ended 2017 was $7.9 million, a decrease of $78.8 million as compared to 2016. Our land segment continued to be adversely impacted by lower profits from our supply and trading activities in North America, as well as increased acquisition-related costs that were directly attributable to our acquired businesses. The declines in our income from operations in our marine and land segments were partially offset by an increase in our aviation segment of $32.4 million, or 20.2%, where our aviation segment benefited from increased profitability from our government-related business, and increased volumes and profitability from our international fueling operations.Non-Operating Expenses, net. We had non-operating expenses, net of $66.7 million and $46.7 million, for the year ended 2017 and 2016, respectively, driven principally by higher average borrowings, fees associated with our receivable purchase program and interest rates.Income Taxes. For the year ended 2017, our effective income tax rate was (707.1)% and our income tax provision was $149.2 million, as compared to an effective income tax rate of 11.0% and an income tax provision of $15.7 million in 2016. The higher effective income tax rate for 2017, as compared to 2016, resulted principally from the effects of the Tax Act's $143.7 million one-time transition tax on historical accumulated foreign earnings. Without the one-time tax charge, the effective tax rate for 2017 would have been (25.9)%.As a result of the Tax Act, we recorded an income tax charge of $157.4 million, payable over eight years, which includes the $143.7 million one-time transition tax. As we intend to use our U.S. net operating losses, we expect to only pay approximately $100.0 million over the eight-year period.Net Loss and Diluted Earnings per Common Share. Our net loss for the year ended 2017 was $170.2 million as compared to net income of $126.5 million in 2016. Diluted loss per common share for the year ended 2017 was $2.50 per common share as compared to diluted earnings per common share of $1.81 in 2016.2016 compared to 2015Revenue. Our revenue for 2016 was $27.0 billion, a decrease of $3.4 billion, or 11.1%, as compared to 2015. Our revenue during these periods was attributable to the following segments (in millions): 2016 2015 $ Change Aviation segment $ 10,914.4 $ 11,739.8 $ (825.4 ) Land segment 8,918.8 9,274.3 (355.5 ) Marine segment 7,182.5 9,367.2 (2,184.7 ) Total $ 27,015.8 $ 30,381.4 $ (3,365.6 ) Revenues in our aviation segment were $10.9 billion for the year ended 2016, a decrease of $0.8 billion, or 7.0% as compared to 2015. The decline in aviation revenues was driven by lower average jet fuel prices per gallon sold during the year ended 2016, where the average price per gallon sold as a result of lower average land fuel prices in 2014was $1.53, as compared to 2013.2412.4%, as compared to 2015.Revenues in our land segment were $8.9 billion for the year ended 2016, a decrease of $0.4 billion, or 3.8%, as compared to 2015. The decline in land revenues primarily resulted from a lower average fuel price per gallon sold during the year ended 2016, where the average price per gallon sold was $1.66, as compared to $1.88 in 2015. The overall decline was partially offset by an increase in volumes from new customers and acquired businesses, where volumes for the year ended 2016 were 5.4 billion gallons, an increase of $433.2 million, or 8.8%, as compared to 2015.Revenues in our marine segment were $7.2 billion for the year ended 2016, a decrease of $2.2 billion, or 23.3%, as compared to 2015. The decrease was driven primarily by a 20.1% decline in the average price per metric ton sold, to $229.17 for the year ended 2016, as compared to $286.9 in 2015. Volumes in our marine segment for the year ended 2016 were 31.4 million metric tons, a decrease of 1.3 million metric tons or 4.0%, as compared to 2015.Gross Profit. Our gross profit for 20142016 was $813.6$899.0 million, an increase of $60.9$38.0 million, or 8.1%4.4%, as compared to 2013.2015. Our gross profit during these periods was attributable to the following segments (in thousands)millions):2014 2013 321,596 327,178 (5,582) 205,612 177,052 28,560 286,414 248,528 37,886 813,622 752,758 60,864 2016 2015 $ Change Aviation segment $ 401.0 $ 361.9 $ 39.1 Land segment 348.5 309.5 39.0 Marine segment 149.5 189.6 (40.1 ) Total $ 899.0 $ 861.0 $ 38.0 Our aviation segment gross profit for 2014the year ended 2016 was $321.6$401.0 million, a decreasean increase of $5.6$39.1 million, or 1.7%10.8%, as compared to 2013. Of the decrease2015. The increase 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 newthe core resale business in North America and existing customers. This increase was partially offset by $17.0 millionEurope, as well as increased activity in lowerour U.S. and foreign military-related businesses.Our land segment gross profit per gallon sold principally duefor the year ended 2016 was $348.5 million, an increase of $39.0 million, or 12.6%, as compared to fluctuations2015. The increase in customer mix. Additionally, our crude oil transloading joint venture, which was deconsolidated effective December 31, 2013, generated $9.9 million inland segment gross profit was primarily driven by recently acquired businesses, including PAPCO, APP and acquisitions in 2013 and is not includedKinect, our global energy management services business. Increases in our land segment were partially offset by lower demand in the U.K. due to unseasonably warm weather conditions.Our marine segment gross profit for the year ended 2016 was $149.5 million, a decrease of $40.1 million, or 21.1%, as compared to 2015. The marine segment continued to be adversely impacted by the prolonged weakness in 2014.Operating Expenses. Total operating expenses for 20142016 were $544.5$710.1 million, an increase of $56.1$94.8 million, or 11.5%15.4%, as compared to 2013.2015. The following table sets forth our expense categories (in thousands)millions):2014 2013 319,842 288,021 31,821 3,757 11,745 (7,988) 220,875 188,634 32,241 544,474 488,400 56,074 The $31.8 2016 2015 $ Change Compensation and employee benefits $ 413.3 $ 365.8 $ 47.5 Provision for bad debt 15.4 7.5 8.0 General and administrative 281.4 242.1 39.3 Total $ 710.1 $ 615.3 $ 94.8 Of the $47.5 million increase in compensation and employee benefits, $29.4 million was principally due to the inclusion of $27.3 million of expenses fromrelated to acquired businesses and an executive non-renewal charge of $4.8$18.1 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.compensation for new hires to support our growing global business. The $32.2$39.3 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 20142016 was $269.1$188.9 million, an increasea decrease of $4.8$56.8 million, or 1.8%23.1%, as compared to 2013.2015. Income from operations during these periods was attributable to the following segments (in thousands)millions):2014 2013 142,303 150,886 (8,583) 90,029 73,770 16,259 90,335 84,767 5,568 322,667 309,423 13,244 53,519 45,065 8,454 269,148 264,358 4,790 2016 2015 $ Change Aviation segment $ 160.5 $ 132.2 $ 28.3 Land segment 70.8 101.4 (30.6 ) Marine segment 30.2 73.0 (42.7 ) 261.5 306.5 (45.0 ) Corporate overhead - unallocated 72.7 60.9 11.8 Total $ 188.9 $ 245.7 $ (56.8 ) Our aviation segment income from operations, including unallocated corporate overhead, for 2014the year ended 2016 was $142.3$188.9 million, a decrease of $8.6$56.8 million, or 5.7%23.1%, as compared to 2013. This decrease resulted from $5.6 million in lower gross profit2015. The decline was attributable to our marine segment 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.Ourour land segment. In our marine segment, income from operations for 2014the year ended 2016 was $90.0$30.2 million, an increasea decrease of $16.3$42.7 million, or 22.0%58.6%, as compared to 2013. This increase resulted from $28.6 million in higher gross profit, which was partially offset by an increase25of $12.3 million in operating expenses. The increase in2015. Our marine segment operating expenses was principally duecontinued to compensationbe adversely impacted by the prolonged weakness in the overall maritime industry. The lower fuel price environment, combined with lower price volatility and employee benefits.Ourto a lesser extent, increased competition, led to decreased demand for our price risk management offerings and lower overall unit margins in 2016 as compared to 2015. In addition, certain large marine customers experienced financial challenges, which created disruption and resulted in lower sales to such customers. In our land segment, income from operations for 2014the year ended 2016 was $90.3$70.8 million, an increasea decrease of $5.6$30.6 million, or 6.6%,30.1% as compared to 2013. This increase resulted2015 due to the higher compensation expenses and increased amortization expenses related to acquired businesses. The declines in our income from $37.9 millionoperations in higher gross profit which wasour marine and land segments were partially offset by an increaseincreases in our aviation segment of $32.3 million in operating expenses. Of the increase in land segment operating expenses, $40.0 million was due to the inclusion of acquired businesses, which was partially offset by a decrease of $7.7 million principally due to compensation and employee benefits and provision for bad debt.Corporate overhead costs not charged to the business segments for 2014 were $53.5 million, an increase of $8.5$28.3 million, or 18.8%21.4%, as compared to 2013. This increase was primarilywhere our aviation segment benefited from increased volume attributable to the $4.8 million executive non-renewal chargeour core resale business in North America and $3.8 millionEurope, and increased activity in increased professional fees.Non-Operating Income (Expenses), net. For 2014, weExpenses, net. We had non-operating income, net of $0.4 million, as compared to non-operating expenses, net of $17.7$46.7 million in 2013. This $18.1and $27.9 million, change was due to an $18.1for the year ended 2016 and 2015, respectively. Increased debt costs of $8.8 million gain on the sale of our crude oil joint venture interests in December 2014. Also impacting the change was a $8.0 million increase in interest expense and other financing costs, net, as a result ofresulted from higher average borrowings in 20142016 as compared to 2013,2015. Also, in connection with the December 2016 bankruptcy filing of our former joint venture partner, we wrote off approximately $7.5 million of outstanding amounts owed to us, during the three months ended December 31, 2016. These expenses were offset by a $5.4$4.4 million increase in earnings from our equity investments and a $2.6 million decrease in other non-operating expenses. The increase in earnings from our equity investments is principallypositive change related to foreign currency exchange during 2016 as compared to 2015.Income Taxes. For the 2013 deconsolidation of our crude oil transloading joint venture effective December 31, 2013, which thereafter was accounted for under the equity method until its sale in December 2014.Income Taxes. For 2014,year ended 2016, our effective income tax rate was 19.0%11.0% and our income tax provision was $51.1$15.7 million, as compared to an effective income tax rate of 16.0%21.7% and an income tax provision of $39.5$47.2 million for 2013.in 2015. The higherlower effective income tax rate is primarily attributablefor 2016, as compared to 2015, resulted principally from differences in the results of our subsidiaries in tax jurisdictions with different income tax rates and a U.S. gain on the sale of the crude oil joint venture interests as compared to 2013. Without the gain on the sale of the crude oil joint venture interests, for 2014, our effective income tax rate would have been 17.7%.Net (Loss) Income Attributable to Noncontrolling Interest. For 2014, net loss attributable to noncontrolling interest was $3.3 million as compared to net income attributable to noncontrolling interest of $4.1 million for 2013. This $7.4 million change is primarily related to the deconsolidation of our crude oil transloading joint venture effective December 31, 2013. Prior to the deconsolidation of this joint venture, its results were included in our results of operations and we recorded net income attributable to noncontrolling interest.Net Income and Diluted Earnings per Common Share.Share. Our net income for 2014the year ended 2016 was $221.7$126.5 million, an increasea decrease of $18.7$48.0 million, or 9.2%27.5%, as compared to 2013.2015. Diluted earnings per common share for 2014the year ended 2016 was $3.11$1.81 per common share, an increasea decrease of $0.28$0.66 per common share, or 9.9% as compared to 2013.Non‑GAAP Net Income and Non‑GAAP Diluted Earnings per Common Share. Our non‑GAAP net income for 2014 was $249.1 million, an increase of $18.6 million, or 8.1%26.7%, as compared to 2013. Non‑GAAP diluted earnings per common share for 2014 was $3.49 per common share, an increase of $0.27 per common share, or 8.4%, as compared to 2013. The following table sets forth the reconciliation between our net income and non‑GAAP net income for 2014 and 2013 (in thousands):2014 2013 221,747 203,075 9,942 11,182 22,401 14,448 1,894 1,822 (9,879) 2,994 249,099 230,527 26The following table sets forth the reconciliation between our diluted earnings per common share and our non‑GAAP diluted earnings per common share for 2014 and 2013:2014 2013 3.11 2.83 0.14 0.16 0.31 0.20 0.03 0.03 (0.14) 0.04 3.49 3.22 The non-GAAP financial measures exclude costs associated with share-based compensation, amortization of acquired intangible assets, expenses related to acquisitions, the gain on the sale of the crude oil joint venture interests (net of certain related operating expenses) 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, the expenses related to acquisitions, the gain on the sale of the crude oil joint venture interests (net of certain related operating) expenses 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.2013 compared to 2012Revenue. Our revenue for 2013 was $41.6 billion, an increase of $2.6 billion, or 6.7%, as compared to 2012. Our revenue during these periods was attributable to the following segments (in thousands):2013 2012 16,087,611 14,692,042 1,395,569 14,790,342 14,750,425 39,917 10,683,994 9,502,871 1,181,123 41,561,947 38,945,338 2,616,609 Our aviation segment revenue for 2013 was $16.1 billion, an increase of $1.4 billion, or 9.5% as compared to 2012. Of the increase in aviation segment revenue, $2.0 billion was due to increased volume attributable to new and existing customers, which was partially offset by $0.6 billion due to a decrease in the average price per gallon sold as a result of lower average jet fuel prices in 2013 as compared to 2012.Our marine segment revenue for 2013 and 2012 was $14.8 billion. Of the increase in marine segment revenue, $0.5 billion was due to increased volume attributable to new and existing customers, which was principally offset by a decrease in the average price per metric ton sold as a result of lower average marine fuel prices in 2013 as compared to 2012.Our land segment revenue for 2013 was $10.7 billion, an increase of $1.2 billion, or 12.4%, as compared to 2012. The increase in land segment revenue was principally due to revenue from acquired businesses.Gross Profit. Our gross profit for 2013 was $752.8 million, an increase of $79.3 million, or 11.8%, as compared to 2012. Our gross profit during these periods was attributable to the following segments (in thousands):272013 2012 327,178 294,601 32,577 177,052 208,028 (30,976) 248,528 170,818 77,710 752,758 673,447 79,311 Our aviation segment gross profit for 2013 was $327.2 million, an increase of $32.6 million, or 11.1%, as compared to 2012. Of the increase in aviation segment gross profit, $28.6 million was due to increased volume attributable to new and existing customers and $10.9 million was due to gross profit from acquired businesses. These increases were partially offset by $6.9 million in lower gross profit per gallon sold principally due to fluctuations in customer mix.Our marine segment gross profit for 2013 was $177.1 million, a decrease of $31.0 million, or 14.9%, as compared to 2012. Of the decrease in marine segment gross profit, $37.6 million was due to decreased gross profit per metric ton sold principally due to limited price volatility in 2013 and fluctuations in customer mix. This decrease was partially offset by $6.6 million due to increased volume attributable to new and existing customers.Our land segment gross profit for 2013 was $248.5 million, an increase of $77.7 million, or 45.5%, as compared to 2012. The increase in land segment gross profit was principally due to gross profit from acquired businesses.Operating Expenses. Total operating expenses for 2013 were $488.4 million, an increase of $72.0 million, or 17.3%, as compared to 2012. The following table sets forth our expense categories (in thousands):2013 2012 288,021 237,362 50,659 11,745 4,790 6,955 188,634 174,272 14,362 488,400 416,424 71,976 The $50.7 million increase in compensation and employee benefits was principally due to the inclusion of expenses from acquired businesses. The $7.0 million increase in provision for bad debt was principally due to an overall increase in the accounts receivable balance in 2013 as compared to 2012 and additional reserves for specific customers. The $14.4 million increase in general and administrative expenses was due to $26.2 million related to the inclusion of expenses from acquired businesses, which was partially offset by $11.8 million in decreased expenses due to efforts to drive greater operational efficiencies.Income from Operations. Our income from operations for 2013 was $264.4 million, an increase of $7.3 million, or 2.9%, as compared to 2012. Income from operations during these periods was attributable to the following segments (in thousands):2013 2012 150,886 128,153 22,733 73,770 103,229 (29,459) 84,767 75,291 9,476 309,423 306,673 2,750 45,065 49,650 (4,585) 264,358 257,023 7,335 Our aviation segment income from operations for 2013 was $150.9 million, an increase of $22.7 million, or 17.7%, as compared to 2012. This increase resulted from $32.6 million in higher gross profit, which was partially offset by $9.9 million in increased operating expenses attributable to the inclusion of acquired businesses.Our marine segment income from operations for 2013 was $73.8 million, a decrease of $29.5 million, or 28.5%, as compared to 2012. This decrease principally resulted from $31.0 million in lower gross profit.Our land segment income from operations for 2013 was $84.8 million, an increase of $9.5 million, or 12.6%, as compared to 2012. This increase resulted from $77.7 million in higher gross profit, which was partially offset by increased operating expenses of $68.2 million. Of the increase in land segment operating expenses, $67.1 million was related to the inclusion of acquired businesses.28Corporate overhead costs not charged to the business segments for 2013 were $45.1 million, a decrease of $4.6 million, or 9.2%, as compared to 2012. The decrease in corporate overhead costs not charged to the business segments was attributable to decreases in general and administrative expenses, principally professional fees.Non‑Operating Income (Expenses), net. For 2013, we had non‑operating expenses, net of $17.7 million, an increase of $0.3 million, or 1.5%, as compared to 2012.Income Taxes. For 2013, our effective income tax rate was 16.0% and our income tax provision was $39.5 million, as compared to an effective income tax rate of 16.0% and an income tax provision of $38.2 million for 2012. Although there was no net change in the overall effective income tax rate between 2013 and 2012, the rates continue to have various recurring components attributable to differences in the results of our subsidiaries in tax jurisdictions with different income tax rates and outstanding uncertain tax positions net of certain nonrecurring discrete tax items including statute lapses, audit settlements, and a change in estimate.Net (Loss) Income Attributable to Noncontrolling Interest. For 2013, net income attributable to noncontrolling interest was $4.1 million, a decrease of $7.9 million, or 66.0%, as compared to 2012. The decrease 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 2013 was $203.1 million, an increase of $13.7 million, or 7.3%, as compared to 2012. Diluted earnings per common share for 2013 was $2.83 per common share, an increase of $0.19 per common share, or 7.2% as compared to 2012.Non‑GAAP Net Income and Non‑GAAP Diluted Earnings per Common Share. Our non‑GAAP net income for 2013 was $230.5 million, an increase of $14.6 million, or 6.8%, as compared to 2012. Non‑GAAP diluted earnings per common share for 2013 was $3.22 per common share, an increase of $0.21 per common share, or 7.0%, as compared to 2012. The following table sets forth the reconciliation between our net income and non‑GAAP net income for 2013 and 2012 (in thousands):2013 2012 203,075 189,345 11,182 9,637 14,448 14,037 1,822 2,924 230,527 215,943 The following table sets forth the reconciliation between our diluted earnings per common share and our non‑GAAP diluted earnings per common share for 2013 and 2012:2013 2012 2.83 2.64 0.16 0.13 0.20 0.20 0.03 0.04 3.22 3.01 The non‑GAAP financial measures exclude costs associated with share based compensation, amortization of acquired intangible assets and expenses related to acquisitions 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 expenses related to acquisitions, 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 diluted29earnings 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.Cash FlowsThe following table reflects the major categories of cash flows for 2014, 20132017, 2016 and 2012.2015. For additional details, please see the consolidated statements of cash flows in the consolidated financial statements.2014 2013 2012 141,160 264,302 145,791 (297,087) (174,560) (246,622) 169,515 29,509 66,858 2014 2017 2016 2015 Net cash provided by operating activities $ 205.2 $ 205.2 $ 447.5 Net cash used in investing activities (180.1 ) (428.5 ) (144.8 ) Net cash provided by financing activities (361.6 ) 340.9 (17.0 ) 2017 compared to 2013Operating Activities. For 2014, netNet cash provided by operating activities was $141.2$205.2 million in each 2016 and 2017. Cash flows related to cash collateral with financial counterparties decreased $175.9 million as a result of reduced hedging activity. This change was offset by increased cash flows from net accounts receivable and accounts payable balances, which were $168.0 million higher primarily as a result of higher fuel prices during 2017, as compared to $264.32016. Operating cash flow impact of the year over year net income decrease of $296.7 million for 2013. The $123.1 million decrease in operating cash flows was primarily dueoffset by increased income taxes payable and deferred income tax liabilities as a result of the Tax Act, including the one-time transition tax on accumulated foreign earnings recorded in 2017 and the non-cash operating expenses related to unfavorable year-over-year changesthe goodwill and other impairment charges recorded in assets and liabilities, net of acquisitions.Investing Activities. For 2014,2017, net cash used in investing activities was $297.1$180.1 million as compared to $174.6$428.5 million for 2013.2016. The $122.5 million increase in cash used in investing activities was principally due to an increase in the cash used for the acquisition of businesses in 2014 as compared to 2013.Financing Activities. For 2014, net cash provided by financing activities was $169.5 million as compared to $29.5 million for 2013. The $140.0 million increase in cash provided by financing activities was principally due to increased net borrowings under our Credit Facility in 2014 as compared to 2013. 2013 compared to 2012Operating Activities. For 2013, net cash provided by operating activities was $264.3 million as compared to $145.8 million for 2012. The $118.5 million increase in operating cash flows was principally due to favorable year‑over‑year changes in assets and liabilities, net of acquisitions.Investing Activities. For 2013, net cash used in investing activities was $174.6 million as compared to $246.6 million for 2012. The $72.0$248.4 million decrease in cash used in investing activities was principally due to a $140.8decrease in the cash used for the acquisition of businesses in 2017 as compared to 2016.Financing Activities. For 2017, net cash used in financing activities was $361.6 million as compared to $340.9 million net cash provided by financing activities for 2016. The $702.5 million change was principally due to a $684.7 million decrease in net borrowing under our credit facility in 2017 as compared to 2016. This reduction in borrowing was facilitated by the ability to use foreign cash without incurring additional U.S. tax costs as a result of the recently enacted Tax Act. Additionally, cash used for common stock repurchases increased $20.8 million in 2017 as compared to 2016.2016 compared to 2015Operating Activities. For 2016, net cash provided by operating activities was $205.2 million as compared to $447.5 million for 2015. The $242.2 million decrease in operating cash flows was primarily due to year-over-year changes in assets and liabilities, net of acquisitions. Cash flows from changes in inventory resulted in a cash use of $130.9 million in 2016 as compared to 2015, primarily as a result of additional inventory in support of overall volume increases, specifically in our aviation and land segments. Additionally, cash flows from net accounts receivable and accounts payable balances, decreased $86.9 million primarily to fund the working capital needs of the aviation fueling business acquired. In 2016, changes in short-term derivative assets provided cash of 163.7 million as compared to $81.5 million in 2015. This $82.3 million positive cash flow change was offset by a $43.3 million negative cash flow change in short-term derivative liabilities, reported within accrued expenses and other current liabilities, both of which primarily related to a decline in fuel prices.Investing Activities. For 2016, net cash used in investing activities was $428.5 million as compared to $144.8 million for 2015. The $283.7 million increase in cash used in investing activities was principally due to a increase in the cash used for acquisitions and other investmentsthe acquisition of businesses in 20132016 as compared to 2012, which was partially offset by a $54.3 million increase in capital expenditures for the upgrade and expansion of certain inventory storage and crude oil transloading joint venture facilities in 2013.Financing Activities. For 2013,2016, net cash provided by financing activities was $29.5$340.9 million as compared to $66.9net cash used in financing activities of $17.0 million for 2012.2015. The $37.4$357.9 million decrease in cash provided by financing activitieschange was principally due to purchases of common stock of $35.0 million.Other Liquidity MeasuresCash and Cash Equivalents. As of December 31, 20142017 and 2013,2016, we had cash and cash equivalents of $302.3$372.3 million and $292.1$698.6 million, respectively. Our primary uses of cash and cash equivalents are to fund accounts receivable, purchase inventory and make strategic investments, primarily acquisitions.acquisitions, and to purchase inventory. We are usually extendedprovided unsecured trade credit fromby nearly all of our suppliers for our fuel purchases; however, certaina small number of suppliers require us to either prepay or provide a letter of credit. Increases in oil prices can negatively affect liquidity by increasing the amount of cash needed to fund fuel purchases as well as reducing the amount of fuel which we can purchase on an unsecured basis from our suppliers.Credit Facility and Term Loans.Loans. As of December 31, 2017, our Credit Facility permitted us to borrow up to $1.26 billion, with a sublimit of $400.0 million for the issuance of letters of credit and bankers' acceptances. We had outstanding borrowings under our Credit Facility totaling $60.0 million as of December 31, 2017 compared to $325.2 million as of December 31, 2016. Our issued letters of credit under the Credit Facility totaled $8.6 million as of December 31, 2017 compared to $8.3 million as of December 31, 2016. We also had $835.8 million in Term Loans outstanding as of December 31, 2017 compared to $840.0 million as of December 31, 2016. As of December 31, 2017, the unused portion of our Credit Facility was $1,191.4 million compared to $926.5 million, as of December 31, 2016. Borrowings under our Credit Facility and Term Loans related to base rate loans or Eurodollar rate loans bear floating interest rates plus applicable margins. As of December 31, 2017, the applicable margins for base rate loans and Eurodollar rate loans were 1.50% and 2.50%, respectively. Letters of credit issued under our Credit Facility are subject to letter ofcredit fees of 0.25% as of December 31, 2017, and the unused portion of our Credit Facility is subject to commitment fees of 0.35% as of December 31, 2017.On January 30, 2015,2018, we amended our Credit Facility and elected to among other things, increaseprepay $300.0 million of our outstanding Term Loans and decrease the maximum availability under theborrowing capacity of our Credit Facility from $1.10 billion to $1.26 billion and added a new $100.0 million term loan facility to our existing Term Loans, for a total amount outstanding of $341.3 million. Under theapproximately $1.16 billion. The Credit Facility continues to have a sublimit of $400.0 million for the issuance of letters of credit and bankers' acceptances and we have the right to request increases in available borrowings up to an additional $150.0$200.0 million, subject to the satisfaction of certain30Additionally, theThe Credit Facility has a sublimit of $400.0 million for the issuance of letters of credit and bankers’ acceptances and matures in October 2018. We had outstanding borrowings under our Credit Facility totaling $420.0 million and $200.0 million as of December 31, 2014 and 2013, respectively. Our issued letters of credit under the Credit Facility totaled $14.8 million and $7.4 million as of December 31, 2014 and 2013, respectively. We also had $241.3 million and $242.5 million in Term Loans outstanding as of December 31, 2014 and 2013, respectively. As of December 31, 2014 and 2013, the unused portion of our Credit Facility was $665.2 million and $892.6 million, respectively.Our liquidity, consisting of cash and cash equivalents and availability under the Credit Facility, fluctuates based on a number of factors, including the timing of receipts from our customers and payments to our suppliers as well as commodity prices. Availability under our Credit Facility is principally limited by the ratio of adjusted total debt to adjusted EBITDA, as defined in the agreement, which limits the total amount of indebtedness we may incur to not more than 3.5 to 1. Accordingly, our availability under the Credit Facility may fluctuate from period to period.Our Credit Facility and our Term Loans contain certain financial and other covenants with which we are required to comply. Our failure to comply with the covenants contained in our Credit Facility and our Term Loans could result in an event of default. An event of default, if not cured or waived, would permit acceleration of any outstanding indebtedness under the Credit Facility and our Term Loans, trigger cross‑defaults under certain other agreements to which we are a party and impair our ability to obtain working capital advances and issue letters of credit, which would have a material adverse effect on our business, financial condition, results of operations and cash flows. As of December 31, 2014,2017, we were in compliance with all financial and other covenants contained in our Credit Facility and our Term Loans.Other Credit Lines and Receivables Purchase Agreements.Additionally, we have other uncommitted credit lines primarily for the issuance of letters of credit, bank guarantees and bankers’ acceptances. These credit lines are renewable on an annual basis and are subject to fees at market rates. As of December 31, 20142017 and 2013,December 31, 2016, our outstanding letters of credit and bank guarantees under these credit lines totaled $211.4$272.0 million and $150.6$176.5 million, respectively. We also have Receivables Purchase Agreements (“RPAs”) that allow for the sale of up to an aggregate of $375.0 million of our accounts receivable. As of December 31, 2014, weWe had sold accounts receivable of $171.1$377.3 million and $235.5 million under the RPAs.Short‑Term Debt.RPAs, as of December 31, 2017 and 2016, respectively.Short-Term Debt. As of December 31, 2014,2017, our short‑termshort-term debt of $17.9$25.6 million primarily represents the current maturities (within the next twelve months) of Term Loan borrowings, certain promissory notes related to acquisitions and capital lease obligationsobligations.ERP. We previously committed to undertake a multi-year project designed to drive greater improvement in operating efficiencies and Term Loan borrowings.We believe that our cash and cash equivalents as of December 31, 2014 (of which $93.6 million was available for use by our U.S. subsidiaries without incurring additional costs)2017 and available funds from our Credit Facility, together with cash flows generated by operations, remain sufficient to fund our working capital and capital expenditure requirements for at least the next twelve months. In addition, to further enhance our liquidity profile, we may choose to raise additional funds which may or may not be needed for additional working capital, capital expenditures or other strategic investments. Our opinions concerning liquidity are based on currently available information. To the extent this information proves to be inaccurate, or if circumstances change, future availability of trade credit or other sources of financing may be reduced and our liquidity would be adversely affected. Factors that may affect the availability of trade credit or other forms of financing include our financial performance (as measured by various factors, including cash provided by operating activities), the state of worldwide credit markets, and our levels of outstanding debt. Depending on the severity and direct impact of these factors on us, financing may be limited or unavailable on terms favorable to us.Contractual Obligations and Off‑Balance Sheet ArrangementsOur significant contractual obligations and off‑balance sheet arrangements are set forth below. For additional information on any of the following and other contractual obligations and off‑balance sheet arrangements, see Notes 68 and 79 in the notes to the consolidated financial statements in Item 15 of this 20142017 10‑K Report.Contractual ObligationsAs of December 31, 2014, our contractual obligations were as follows (in thousands):761,378 36,776 75,342 648,843 417 159,300 37,766 54,739 30,237 36,558 10,355 5,815 2,290 2,250 42,035 17,598 24,437 56,636 52,778 3,858 13,575 6,819 6,150 450 156 1,043,279 157,552 166,816 681,780 37,131 31Unrecognized Income Tax Liabilities. As of December 31, 2014,2017, our gross liabilities for unrecognized income tax benefits (“Unrecognized Tax Liabilities”), including penalties and interest, were $33.0$72.6 million. The timing of any settlement of our Unrecognized Tax Liabilities with the respective taxing authority cannot be reasonably estimated.Off‑BalanceAs of December 31, 2017, our contractual obligations were as follows (in millions): Total < 1 year 1-3 years 3-5 years > 5 years Debt and interest obligations $ 1,011.0 $ 51.8 $ 147.2 $ 809.9 $ 2.0 Operating lease obligations 165.2 39.7 56.7 36.4 32.4 Employment agreement obligations 0.9 0.9 — — — Derivatives obligations 64.2 57.6 6.7 — — Purchase commitment obligations 516.4 502.2 14.2 — — Other obligations 20.9 10.2 9.0 1.3 0.5 Total $ 1,842.8 $ 719.9 $ 240.4 $ 847.6 $ 34.9 Additionally, we have certain purchase contracts, that run through 2026, under which we agreed to purchase annually between 1.72 million barrels and 2.00 million barrels of aviation fuel at future market prices.Off-Balance Sheet ArrangementsLetters of Credit and Bank Guarantees. In the normal course of business, we are required to provide letters of credit to certain suppliers. A majority of these letters of credit expire within one year from their issuance, and expired letters of credit are renewed as needed.As of December 31, 2014,2017, we had issued letters of credit and bank guarantees totaling $226.2$280.6 million under our Credit Facility and other uncommitted credit lines. For additional information on our Credit Facility and other credit lines, see the discussion in “Liquidity and Capital Resources” above.Surety Bonds. In the normal course of business, we are required to post bid, performance and garnishmentother surety-related bonds. The majority of the surety bonds primarily inposted relate to our aviation and land segments. As of December 31, 2014, weWe had $38.7 million in outstanding bonds that were arrangedexecuted in order to satisfy various security requirements.Critical Accounting Policies and EstimatesThe discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements included elsewhere in this 20142017 10‑K Report, which have been prepared in accordance with accounting principles generally accepted in the United States.U.S. GAAP. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to unbilled revenue and related costs of sales, bad debt, share‑based payment awards, derivatives, goodwill and identifiable intangible assets, and certain accrued liabilities.liabilities, and income taxes. We base our estimates on historical experience and on other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.We have identified the policies below as critical to our business operations and the understanding of our results of operations. For a detailed discussion on the application of these and other significant accounting policies, see Note 1 to the accompanying consolidated financial statements included in this 2014 10‑K2017 10-K Report.Accounts Receivable and Allowance for Bad DebtOur accounts receivables credit terms are generally 30-60 days. Accounts receivable balances that are not paid within the terms of the sales agreement are generally subject to finance fees, based on the outstanding balance. Credit extension, monitoring and collection are performed for each of our business segments. Each business segment has a credit committeefunction that is responsible for approvingestablishing credit limits and approving limits above certainpreviously approved amounts, setting and maintaining credit standards, and managing the overall quality of the credit portfolio. We perform ongoing credit evaluations of our customers and adjust credit limits based upon payment history and the customer’s current creditworthiness, as determined by our review of our customer’s credit information. We extend credit on an unsecured basis to most of our customers. Accounts receivable are deemed past due based on contractual terms agreed to with our customers.We continuously monitor the composition of accounts receivable, collections and payments from our customers and maintain a provision for estimated credit losses based upon our historical experience with our customers, current market and industry conditions affecting our customers and any specific customer collection issues that we have identified. Principally based on these factors, an internally derived risk-based reserve is established on a quarterly basis. In addition to a risk-based reserve, a specific reserve is established for certain customers, based on customer receivable balances, overall exposure, payment history, current and expected market conditions, business developments, and other factors that influence the likelihood of collectability.Historical payment trends may not be a usefulan accurate indicator of current or future credit worthiness of our customers, particularly in these difficult economic and financial markets. AccountsAs a result of the limited predictability inherent in estimating which customers are less likely or unlikely to remit amounts owed to us, our provision for estimated credit losses may not be sufficient. Any write-off of accounts receivable are reduced byin excess of our provision for estimated credit losses would have an allowance for bad debt.20142017 10‑K Report.InventoriesInventories are valued primarily using theweighted average cost, methodologyand first-in first-out in certain limited locations, and are stated at the lower of average cost or market.and net realizable value. We utilize a variety of fuel indices and other indicators of market value. Sharp negative changes in these indices can result in reduction of our inventory valuation, which could have an adverse impact on our results of operations in the period in which we take the adjustment. Historically, these adjustments have not had a material impact on our consolidated statements of operations. Components of inventory include fuel purchase costs, the related transportation costs and changes in the estimated fair market values for inventories included in a fair value hedge relationship.DerivativesBusiness CombinationsWe enter into financial derivative contracts in order to mitigateaccount for business combinations using the riskacquisition method of marketaccounting, under which the purchase price fluctuations in aviation, marine and land fuel, to offer our customers fuel pricing alternatives to meet their needs and to mitigate the risk of fluctuations in foreign currency exchange rates. We also enter into proprietary derivative transactions, primarily intended to capitalize on arbitrage opportunities related to basis or time spreads related to fuel products we sell. We have applied the normal purchase and32normal sales exception (“NPNS”), as provided by accounting guidance for derivative instruments and hedging activities, to certain of our physical forward sales and purchase contracts. While these contracts are considered derivative instruments under the guidance for derivative instruments and hedging activities, they are not recorded at fair value, but rather are recorded in our consolidated financial statements when physical settlement of the contracts occurs. If itacquisition is allocated to the assets acquired and liabilities assumed using the fair values determined that a transaction designatedby management as NPNS no longer meets the scope of the exception,acquisition date. We calculate the fair value of the related contract is recorded as an asset or liabilitybased on the consolidated balance sheet and the difference between the fair value and the contract amount is immediately recognized through earnings.Our derivatives that are subject to the accounting guidance for derivative instruments are recognized at their estimated fair market value in accordance with the accounting guidance for fair value measurements. If the derivative does not qualify as a hedge or is not designated as a hedge, changes in the estimated fair marketpresent value of the derivativeestimated future cash flows. The estimated future cash flows are recognized as a component of revenue, cost of revenue or other income (expense), net (basedbased on the underlying transaction type) in the consolidated statements of income and comprehensive income. Derivatives which qualify for hedge accounting may be designated as either a fair value or cash flow hedge. For our fair value hedges, changes in the estimated fair market value of the hedge instrument and the hedged item are recognized in the same line item as a component of either revenue or cost of revenue (based on the underlying transaction type) in the consolidated statements of income and comprehensive income. For our cash flow hedges, the effective portion of the changes in the fair market value of the hedge is recognized as a component of other comprehensive income in the shareholders’ equity section of the consolidated balance sheets and subsequently reclassified into the same line item as the forecasted transaction when both are settled, while the ineffective portion of the changes in the estimated fair market value of the hedge is recognized as a component of other income (expense), net in the consolidated statements of income and comprehensive income. Cash flows for our hedging instruments used in our hedges are classified in the same category as the cash flow from the hedged items. If for any reason hedge accounting is discontinued, then any cash flows subsequentbest information available to the date of discontinuance shall be classified in a manner consistent with the nature of the instrument.To qualify for hedge accounting, as either a fair value or cash flow hedge, the hedging relationship between the hedging instruments and hedged items must be highly effective over an extended period of time in achieving the offset of changes in fair values or cash flows attributable to the hedged riskus at the inception of the hedge. We usetime, acquisition-related costs incurred in connection with a regression analysis based on historical spot prices in assessing the qualification for our fair value hedges. However, our measurement of hedge ineffectiveness for our fair value inventory hedges utilizes spot prices for the hedged item (inventory) and forward or future prices for the hedge instrument. Therefore, the excluded component (forward or future prices) in assessing hedge qualification, along with ineffectiveness, is includedbusiness combination are expensed as a component of cost of revenue in earnings. Adjustments to the carrying amounts of hedged items are discontinued in instances where the related fair value hedging instrument becomes ineffective and any previously recorded fair market value changes are not adjusted until the fuel is sold.Goodwill and Identifiable Intangible AssetsGoodwill represents the future earnings and cash flow potential of acquired businesses in excess of the fair values that are assigned to all other identifiable assets and liabilities. Goodwill arises because the purchase price paid reflects numerous factors, including the strategic fit and expected synergies these acquisitions bring to our existing operations and the prevailing market value for comparable companies.operations. Goodwill is not subject to periodic amortization; instead, itrecorded at fair value and is reviewed at least annually at year‑endyear-end (or more frequently under certain circumstances) for impairment. We assessGoodwill is evaluated for impairment at the reporting unit level and is initially based on an assessment of qualitative factors to determine whether it is more likely than not that the fair value of any individual reporting unit is less than its carrying amount. In performingSuch events or circumstances could include a material adverse change in the qualitative assessment,markets where we assess relevant eventsoperate, similar to the current conditions within the shipping and circumstances that mayoffshore markets, limited market volatility, which adversely impact our supply and trading activities, among others.To determine whether goodwill is impaired, we would compare the fair value of ourthe reporting units includingto which goodwill was assigned to their respective carrying values to measure the following: (i) macroeconomic conditions, (ii) industryamount of goodwill impairment, if any. In calculating fair value, we use a combination of both an income and market considerations, (iii) earnings quality/sustainability, (iv) overall financial performance, (v) events affectingapproach as our primary indicator of fair value. Under the market approach we use a selection of global companies that correspond to each reporting unit (vi) share price and (vii) recent fair value calculation for our reporting units, if available. After assessingto derive a market-based multiple. Under the above described events and circumstances, ifincome approach, we determine that it is more likely than not thatcalculate the fair value of a reporting unit based on the present value of estimated future cash flows. The estimated future cash flows are based on the best information available to us at the time, including our annual operating plan, which is greater than itscompleted annually during the fourth quarter and is approved by our Board of Directors. Our estimates are considered supportable assumptions that we believe are reasonable based on information available to us at that time, and are based on a number of factors including industry experience, internal benchmarks and the economic environment. Our cash flow estimates are discounted using rates that correspond to a weighted-average cost of capital consistent with those used internally for investment decisions.If our annual operating plan is not achieved or if there are other variations to our estimates and assumptions, particularly in the expected growth rates and profitability embedded in our cash flow projections or the discount rate used, there is the potential for a partial or total impairment of the carrying value, then no further testing is required. Otherwise,amount of goodwill within one or more of our reporting units. If we would perform the first step of quantitative testing for goodwill impairment.Periodically, we will perform the first step of quantitative testing for goodwill impairment in lieu of performingare required to impair all or a qualitative assessment. The first stepsubstantial amount of the goodwill impairment test compares the estimated fair valueattributable to one or more of aour reporting unit with its carrying value. We estimate the fair valueunits, our financial results of a reporting unit using a discounted cash flow valuation methodology.In connection with our acquisitions, we record identifiable intangible assets existing at the datefair value. The determination of the acquisitionsfair values of our identifiable intangible assets involves a significant amount of forecasting and other assumptions associated with recently acquired businesses for customer relationships, supplier and non‑compete agreements, developed technology and trademark/trade name rights.which we may not have as much historical information or trend data as we would for our existing businesses. Identifiable intangible assets subject to amortization are amortized over their estimated useful lives and are reviewed for impairment and appropriate remaining useful lives whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable based on market factors and operational considerations. Forrecoverable. We assess identifiable intangible assets not subject to amortization we first assessduring the fourth quarter of each year for potential impairment. Our impairment analysis of our intangible assets not subject to amortization (primarily trademarks and/or trade names) generally involves the use of qualitative factorsand quantitative analyses to determineestimate whether it is more likely than not that an asset has been impaired. After assessing qualitative factors, if we determine that it is more likely than not that33the fair value of an asset isthese assets will be greater than itsor equal to the carrying value then no further testingassigned to such assets.Revenue RecognitionWe execute contracts with customers through a variety of methods including by executing a master supply or blanket sales agreement combined with a purchase order or delivery ticket, stand-alone contracts, or through spot transactions where fuel is required. Otherwise, we would reviewdelivered for impairment by comparingimmediate settlement. Our contracts primarily require us to deliver fuel and fuel-related products, while other arrangements require us to complete agreed-upon services. Our contracts may contain fixed or variable pricing or some combination of those.The majority of our consolidated revenues are generated through the fair valuesale of the intangible asset to its carrying value.Revenue Recognitionfixed or determinable and collectability is reasonably assured and title passes to the customer, which is when the delivery of fuel is made to our customer directly from us, the supplier or a third‑party subcontractor. assured.Our fuel sales are generated as a fuel reseller as well as from on‑hand inventory supply. When acting as a fuel reseller, we generally purchase fuel from the supplier, and contemporaneously resell the fuel to the customer, normally taking delivery for purchased fuel at the same place and time as the delivery is made to the customer.Revenue from services, including energy procurement advisory services and international trip planning support, and transaction and payment management processing, are recognized over the contract period when services have been performed and we have the right to invoice for those services.We record thefuel sales and services on a gross sale of the fuelbasis as we generally take inventory risk, have latitude in establishing the sales price, have discretion in the supplier selection, maintain credit risk and are the primary obligor in the sales arrangement.Revenue from fuel‑relatedWhether the services is recognizedhave been performed and when servicestitle and risk of loss passes to the customer are performed, the sales price is fixed orfactors we take into consideration in deciding when to recognize revenue. These factors are readily determinable and collectability is reasonably assured. We record the sale of fuel‑related services on a gross basis asconsistently applied throughout our business. Therefore, we generally have latitudenot needed to make material estimates or assumptions with respect to revenue recognition.Income TaxesOn December 22, 2017, the U.S. President signed into law the Tax Act. This legislation will significantly change the U.S. Internal Revenue Code, including taxation of U.S. corporations, by, among other things, limiting interest deductions, reducing the U.S. corporate income tax rate, altering the expensing of capital expenditures, adopting elements of a territorial tax system, GILTI, assessing a repatriation tax or “toll-charge” on undistributed earnings and profits of U.S.-owned foreign corporations, and introducing certain base erosion and anti-abuse minimum tax provisions. The legislation is unclear in establishing the sales price, have discretion in supplier selection, maintain credit riskcertain respects and are the primary obligor in the sales arrangement.Commission from fuel broker services is recognized when services are performedwill require interpretations and collectability is reasonably assured. When acting as a fuel broker, we are paid a commissionimplementing regulations by the supplier.Revenue from card payment and processing transactions is recognized at the time the purchase is made by the customer using the charge card. Revenue from charge card transactions is generated from processing fees.Share‑Based Payment AwardsWe account for share‑based payment awards on a fair value basis. Under fair value accounting, the grant‑date fair value of the share‑based payment award is amortized as compensation expense, on a straight‑line basis, over the vesting period for both graded and cliff vesting awards. Annual compensation expense for share‑based payment awards is reduced by an expected forfeiture amount on the outstanding share‑based payment awards.The estimated fair value of stock awards, such as restricted stock and RSUs is based on the grant‑date market value of our common stock, as defined in the respective plans under which the awards were granted. To determine the estimated fair value of SSAR Awards, we use the Black‑Scholes option pricing model. The estimation of the fair value of SSAR Awards on the date of grant using an option‑pricing model is affected by our stock priceIRS, as well as assumptions regarding a numberstate tax authorities, and the legislation could be subject to potential amendments and technical corrections, any of complex and subjective variables. These variables include our expected stock price volatility over the termwhich could increase certain adverse impacts of the awards, actuallegislation.Because of the complexity of the GILTI tax rules effective in 2018, we continue to evaluate this provision of the Tax Act and projected employee stock option exercise behaviors, risk‑free interest rates and expected dividends. The expected termthe application of SSAR Awards represents the estimatedASC 740, Income Taxes. Under US GAAP, we are allowed to make an accounting policy choice of either (1) treating taxes due on future US GILTI inclusions as a current period of time from grant until exerciseexpense when incurred (the "period cost method") or conversion and is based on vesting schedules and expected post‑vesting, exercise and employment termination behavior. Expected volatility is based on the historical volatility(2) factoring such amounts into our measurement of our common stock over the period that is equivalentdeferred taxes (the "deferred method"). Our selection of an accounting policy with respect to the award’s expected life. Anynew GILTI tax rules will depend, in part, on analyzing our global income and our global structure to determine whether we expect to have future U.S. inclusions in taxable income related to GILTI and the impacts thereof. We are currently analyzing this provision and have not made any adjustment related to potential GILTI tax in our financial statements and have not made a policy decision regarding whether to record deferred tax on GILTI since a reasonable amount cannot be determined.The changes included in the Tax Act are broad and complex. The final transition impacts of the Tax Act may differ from those recorded as of December 31, 2017, possibly materially, due in part to changes in interpretations of the Tax Act, any legislative action to address questions that arise as a result of the Tax Act, any changes in accounting standards for income taxes or related interpretations in response to the historical volatility as an indicatorTax Act, or any other updates to current tax estimates that may be required. In accordance with Staff Accounting Bulletin No. 118 regarding the application of future volatility would be based onASC Topic 740, Income Taxes, we anticipate that we will finalize our provisional estimates and determine the impact of any potential deferred tax related to historical volatilityGILTI during the measurement period and will reflect any necessary changes to those estimates in subsequent periods. Any material revisions in our computations could adversely affect our financial condition, results of significant non‑recurring events that would not be expected in the future. Risk‑free interest rates are based on the U.S. Treasury yield curve at the time of grant for the period that is equivalent to the award’s expected life. Dividend yields are based on the historical dividends of World Fuel over the period that is equivalent to the award’s expected life, as adjusted for stock splits.Cash flows from income tax benefits resulting from income tax deductions in excess of the compensation cost recognized for share‑based payment awards (excess income tax benefits) are classified as financingoperations and cash flows. These excess income tax benefits are credited to capital in excess of par value.Recent Accounting PronouncementsInformation regarding recent accounting pronouncementsstandards adopted during 2017 is included in Note 1 to the accompanying consolidated financial statements included in this 20142017 10‑K Report.Recently Issued Accounting StandardsRevenue Recognition (Topic 606): Revenue from Contracts with Customers. In May 2014, ASU 2014-09 was issued. Under this ASU and subsequently issued amendments, an entity is required to recognize the amount of revenue it expects to be entitled to for the transfer of promised goods or services to customers. The updated standard will replace most existing revenue recognition guidance in U.S. GAAP. This ASU provides alternative methods of transition, a full retrospective and a modified retrospective approach. The modified retrospective approach would result in recognition of the cumulative impact of a retrospective application as of the beginning of the period of initial application, which in our case is the period beginning January 1, 2018.In preparation for adoption, we initially developed a cross-functional team and utilized a third-party service provider to assist us throughout our evaluation. In addition, we factored in the adoption into our ongoing enterprise resource planning platform upgrade, which we previously committed to perform.We have completed our review of a representative sample of contracts across each of our revenue streams. Through this process, we have made determinations on how our revenue streams will be accounted for after adoption, concluding that we will have similar performance obligations and timing of revenue recognition under ASC 606, as compared to those prior to adoption.As a result of completing these activities, we have prepared and made accessible internally our revenue recognition policy, which captures those decisions. We conducted an initial training that was distributed to our finance and accounting organization and we are in the process of training our commercial and operational teams on the relevant facets of our revenue recognition policy. We execute contracts with customers through a variety of methods including by executing a master supply or blanket sales agreement combined with a purchase order, stand-alone contracts, or through spot transactions where fuel is delivered for immediate settlement. An important aspect of adoption is the design of our contract management review process and its impact on the control environment. The ongoing training activities will also serve as a platform to communicate certain process changes associated with our contract review process.We have selected the modified retrospective adoption approach, and there is no cumulative adjustment that would impact our financial statements materially. We anticipate certain disclosure changes, specifically as it relates to the financial statement line items where certain costs are recorded. Accordingly, the adoption of the new standard will not have a material impact on our financial statements after adoption.Leases (Topic 842). In February 2016, ASU 2016-02, Leases, was issued. This standard will require all lessees to recognize a right of use asset and a lease liability on the balance sheet, except for leases with durations that are less than twelve months. This standard is effective at the beginning of our 2019 fiscal year. We are currently evaluating whether the adoption of this new guidance will have a material impact on our consolidated financial statements and related disclosures.Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. In August 2016 ASU 2016-15 was issued. The ASU provides guidance on classification of eight specific cash flows items. This standard is effective at the beginning of our 2018 fiscal year. We do not believe the adoption of this new guidance will have a material impact on our consolidated financial statements and related disclosures.Business Combinations (Topic 805): Clarifying the Definition of a Business. In January 2017, ASU 2017-01 was issued. The update clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of businesses. This standard is effective at the beginning of our 2018 fiscal year. We do not believe the adoption of this new guidance will have a material impact on our consolidated financial statements and related disclosures.Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. In August 2017, ASU 2017-12 was issued. The ASU is targeted at simplifying the application of hedge accounting and is effective at the beginning of our 2019 fiscal year. The amended guidance aims at aligning the recognition and presentation of the effects of hedge instruments and hedge items. We are currently evaluating whether the adoption of this new guidance will have a material impact on our consolidated financial statements and related disclosures.Item 7A. Quantitativeand Qualitative Disclosures About Market RiskDerivativesThe following describes ourDerivative and Financial Instruments Market RiskWe use commodity-based derivative classifications:Cash Flow Hedges. Includescontracts and financial instruments, when we deem it appropriate, to manage the risks associated with changes in the prices of fuel and fuel-related products, fluctuations in foreign currency exchange rates and interest rates, or to capture market opportunities. We utilize hedge accounting and formally designate certain of our foreign currencyderivative instruments as either cash flow or fair value hedges. Derivative instruments that are not designated are considered non-designated hedges and are designed to achieve an economic offset of the underlying price risk exposure. Financial instruments and positions affecting our financial statements are described below and are held primarily for hedging purposes. As a result, any changes in income associated with our derivatives contracts are substantially offset by corresponding changes in the value of the underlying risk being mitigated.Commodity Price RiskOur commercial business segments use derivative instruments, primarily futures, forward, swap, and option contracts, we enter into in ordervarious markets to manage price risk inherent in the purchase and sale of fuel. Certain of these derivative instruments are utilized to mitigate the risk of currency exchange rate fluctuations.34Fair Value Hedges. Includes derivatives we enter intoprice volatility in order toforecasted transactions in a cash flow hedge price risk associated with our inventoryrelationship, and certain firm commitments relating to fixed price purchase and sale contracts.Non-designated Derivatives. Includes derivatives we primarily enter into in order to mitigate the risk of market price fluctuations in aviation, marine and land fuelchanges in the formprice of swaps or futures as well as certain fixed price purchase and sale contracts and proprietary trading.our inventory in a fair value hedge relationship. In addition, non-designatedwe use derivatives are also entered intoas economic hedges or to hedgeoptimize the riskvalue of currency rate fluctuations.2014,2017, and December 31, 2016, the notional and fair market values of our commodity-based derivative instruments at their respective fair value positionsposition were as follows (in thousands,millions, except weighted average fixed pricecontract price):Commodity Contracts (In millions of BBL) As of December, 31 2017 As of December, 31 2016 Hedge Strategy Derivative Instrument Settlement
Period Notional
Net
Long/(Short)Weighted
Average
ContractPriceFairValue
Amount Notional
Net
Long/(Short)Weighted
Average
ContractPriceFairValue
AmountDesignated hedge Commodity contracts hedging inventory 2017 — $ — $ — (3.2 ) $ 68.459 $ (10.7 ) 2018 (4.2 ) 77.808 (41.0 ) (1.0 ) 69.559 (5.0 ) (41.0 ) (15.7 ) Non-designated hedge Commodity contracts 2017 — — — 0.1 54.660 13.9 2018 (3.0 ) 31.774 15.9 0.2 62.461 5.5 2019 (1.3 ) 13.847 3.1 — 71.250 0.7 2020 (0.7 ) 11.149 1.5 — 17.080 0.6 2021 (0.1 ) 2.135 — — 4.340 0.1 Thereafter (0.2 ) 1.206 0.1 — — — 20.7 20.8 Total commodity derivative contracts $ (20.3 ) $ 5.1 Foreign Currency Exchange RiskWe hedge our exposure to currency exchange rate changes, such as foreign-currency-denominated trade receivables, payables, or local currency tax payments. The foreign currency exchange rate risk results primarily from our international operations and is economically hedged using forward and swap contracts. The changes in the fair value of these foreign currency exchange derivatives are recorded in earnings. Since the gains or losses on the forward and swap contracts are substantially offset by the gains or losses from remeasuring the hedged foreign-currency-denominated exposure, we do not believe that a hypothetical 10% change in exchange rates at December 31, 2017 would have a material impact on our income from operations.The foreign currency denominated notionals and fair values in U.S. dollars of our exposures from our foreign currency exchange derivatives at December 31, 2017 were primarily related to the following (in millions, except weighted average mark‑to‑market amount)contract price):305 74.110 (3.203) (977) 4,977 77.510 4.599 22,889 21,912 34,192 62.693 (15.594) (533,192) 27,013 83.370 20.735 560,114 1,131 89.989 (23.195) (26,234) 722 85.497 17.734 12,804 92 46.463 (6.696) (616) 109 54.430 7.743 844 1 25.922 (4.000) (4) 11 83.997 21.636 238 28,783 0.850 0.005 158 471 2.580 (0.013) (6) 61,577 1.140 0.020 1,215 112 0.960 0.036 4 4,764,256 602.490 0.000 27 31,884,747 2,174.000 0.000 408 126,778 5.950 0.001 64 77,278 1.250 0.019 1,464 208,786 1.610 0.023 4,903 135,879 63.040 0.000 24 1,390,740 113.080 0.000 295 2,382,533 13.920 (0.000) (321) 214,957 6.720 0.001 253 7,912 3.400 0.016 125 32,891 3.570 0.014 452 46,921 1.300 0.004 176 78,298 11.310 0.001 41 8,325 1.620 0.055 459 1,400 1.610 0.033 46 23,741 As of December, 31 2017 Settlement Period Unit NotionalNet Long/(Short) Weighted AverageContract Price Fair Value Amount 2018 CAD (60.0 ) 1.252 $ 0.4 2018 CLP (2,427.2 ) 631.619 (0.1 ) 2018 DKK (41.5 ) 6.290 (0.1 ) 2018 EUR (65.6 ) 1.182 (1.5 ) 2018 GBP (4.3 ) 1.328 (0.5 ) 2018 KRW (3,073.3 ) 1,136.582 (0.2 ) 2018 MXN (684.3 ) 19.109 1.6 2018 NOK (55.6 ) 8.030 0.5 2018 PLN (8.6 ) 3.626 (0.1 ) 2019 EUR (2.5 ) 1.143 (0.2 ) Total foreign currency exchange derivative contracts $ (0.2 ) The total fair value of these contracts at December 31, 2017 is $0.2 million, and will be settled in 2019. At December 31, 2016, the fair value of our foreign currency exchange derivatives was $9.6 million, the majority of which settled in 2017. Refer to Note 4 for additional details.Interest RateBorrowings under our Credit Facility and Term Loans related to base rate loans or Eurodollar rate loans bear floating interest rates plus applicable margins. As of December 31, 2014,2017, the applicable margins for base rate loans and Eurodollar rate loans were 1.25%1.50% and 2.25%2.50%, respectively. As of December 31, 2014,2017, we had outstanding borrowings under our Credit Facility totaling $420.0$60.0 million and $241.3$835.8 million in Term Loans. As of December 31, 2014,2017, the aggregate outstanding balance of our promissory notes issued in connection with our acquisitionscapital lease obligations was $12.6$10.4 million which bear interest at annual rates of approximately 1.2%ranging from 3.0% to 6.3%. Our remaining outstanding debt of $15.9$4.0 million as of December 31, 20142017 primarily relates to capital leasesacquisition promissory notes and loans payable to noncontrolling shareholders of a consolidated subsidiary which are payable in varying amounts throughout 2018 and bear interest at annual rates ranging from 2.2%3.5% to 6.3%. The8.6%.The weighted average interest rate on our short‑term debt was 2.2%2.7% as of December 31, 2014.2017. A 1.0% fluctuation in the interest rate on our outstanding debt would result in a $6.9$9.0 million change in interest expense during the next twelve months.Foreign CurrencyWe analyzed our assets and liabilities denominated in currencies other than their respective functional currencies to identify consolidated currency exposures as of December 31, 2014, including derivatives utilized to hedge such exposures. For these assets and liabilities, we then assessed the effect of a hypothetical uniform 10% strengthening in the value of the U.S.dollar relative to these other currencies. This analysis indicated that the effect on our income before income taxes would not be significant.The financial statements, together with the report thereon of PricewaterhouseCoopers LLP dated February 12, 2015,28, 2018, and the Selected Quarterly Financial Data (Unaudited), are set forth in Item 15 of this 20142017 10‑K Report.None.Management’s Evaluation of Disclosure Controls and ProceduresWe maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer (“CEO”) and our Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required financial disclosure.As of the end of the period covered by this report, we evaluated, under the supervision and with the participation of our CEO and CFO, the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 13a‑15(e). Based upon this evaluation, the CEO and CFO concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of December 31, 2014.Management’s Report on Internal Control over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a‑15(f). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures are being made only in accordance with authorizations of management and our directors; and (iii) provide reasonable assurance regarding prevention or timely detection of the unauthorized acquisition, use or disposition of assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.Management has assessed the effectiveness of our internal control over financial reporting as of December 31, 20142017 using the framework specified in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on such assessment, management has concluded that our internal control over financial reporting was effective as of December 31, 2014. Management has excluded Watson Petroleum and Colt, (the ‘‘Excluded Businesses’’) from its assessment of internal control over financial reporting as of December 31, 2014, because the Excluded Businesses were acquired during 2014. The total assets, including goodwill and identifiable intangible assets, and total revenues of the Excluded Businesses represent approximately 10.4% and 4.6%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2014.The effectiveness of our internal control over financial reporting as of December 31, 20142017 has been audited by PricewaterhouseCoopers LLP, an independent registered certified public accounting firm, as stated in their report appearing herein.36There were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting during the quarter ended December 31, 2014.It should be noted that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system will be met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Because of these and other inherent limitations of control systems, there is only the reasonable assurance that our controls will succeed in achieving their goals under all potential future conditions.None.37We have adopted a Code of Conduct that applies to all of our employees, officers (including our principal executive, financial and accounting officers) and directors. The Code of Conduct is located on our website at http://www.wfscorp.com under “Investor Relations – Corporate Governance – Governance Documents.Code of Conduct.” We intend to disclose any amendments to our Code of Conduct or waivers with respect to our Code of Conduct granted to our principal executive, financial and accounting officers on our website.The remaining information regarding our directors, executive officers and corporate governance is incorporated herein by reference from our Definitive Proxy Statement for the 20152018 Annual Meeting of Shareholders (“2018 Proxy”) to be filed pursuant to Regulation 14A within 120 days after the close of the fiscal year ended December 31, 2014.Information on executive compensation is incorporated herein by reference from our Definitive2018 Proxy Statement for the 2015 Annual Meeting of Shareholders to be filed pursuant to Regulation 14A within 120 days after the close of the fiscal year ended December 31, 2014.Item 12. SecurityOwnership of Certain Beneficial Owners and Management and Related Shareholder MattersInformation on security ownership of certain beneficial owners and management and related shareholder matters is incorporated herein by reference from our Definitive2018 Proxy Statement for the 2015 Annual Meeting of Shareholders to be filed pursuant to Regulation 14A within 120 days after the close of the fiscal year ended December 31, 2014.Information on certain relationships and related transactions and director independence is incorporated herein by reference from our Definitive2018 Proxy Statement for the 2015 Annual Meeting of Shareholders to be filed pursuant to Regulation 14A within 120 days after the close of the fiscal year ended December 31, 2014.Information on principal accounting fees and services is incorporated herein by reference from our Definitive2018 Proxy Statement for the 2015 Annual Meeting of Shareholders to be filed pursuant to Regulation 14A within 120 days after the close of the fiscal year ended December 31, 2014.2017.38(a)(1) 20142017 10‑K Report:43 44 45 46 47 49 (a)(2) (b)(b) The exhibits set forth in the following index of exhibits are filed or incorporated by reference as a part of this 20142017 10‑K Report:Exhibit No.Description3.1Description Restated Articles of Incorporation (incorporated by reference herein to Exhibit 99.2 to our Current Report on Form 8‑K filed on February 3, 2005). Articles of Amendment to Restated Articles of Incorporation (incorporated by reference herein to Exhibit 3.1 to our Current Report on Form 8‑K filed on November 23, 2009). By‑Laws, amended and restated as of August 26, 2011 (incorporated by reference herein to Exhibit 3.1 to our Current Report on Form 8‑K filed on August 29, 2011). Agreement between World Fuel Services Corporation and Paul H. Stebbins, dated March 14, 2008 (incorporated by reference herein to Exhibit 10.1 to our Current Report on Form 8‑K filed on March 20, 2008). *10.2Amendment No. 1, dated August 26, 2011, to Agreement between World Fuel Services Corporation and Paul H. Stebbins (incorporated by reference herein to Exhibit 10.2 to our Current Report on Form 8‑K filed on August 29, 2011). *10.310.4Amendment No. 1, dated August 26, 2011, to Agreement between World Fuel Services Corporation and Michael J. Kasbar (incorporated by reference herein to Exhibit 10.1 to our Current Report on Form 8‑K filed on August 29, 2011). * 10.5Amendment No. 2, dated April 9, 2012, to Agreement between World Fuel Services Corporation and Michael J. Kasbar (incorporated by reference herein to Exhibit 10.1 to our Current Report on Form 8‑K filed on April 13, 2012). * 10.6Amendment No. 3, dated April 11, 2014, to Agreement between World Fuel Services Corporation and Michael J. Kasbar (incorporated by reference herein to Exhibit 10.2 to our Current Report on Form 8‑K filed on April 11, 2014). * Executive Severance Agreement between World Fuel Services Corporation and Ira M. Birns, dated April 16, 2007 (incorporated by reference herein to Exhibit 10.2 to our Current Report on Form 8‑K filed on April 16, 2007). * 39Exhibit No.Description10.7Employment Agreement between World Fuel Services Inc. and Michael S. Clementi,Corporation Executive Severance Policy, effective January 1, 2008as of December 31, 2016 (incorporated by reference herein to Exhibit 10.3 to our Current Report on Form 8‑K filed on March 20, 2008). *10.8Amendment to Employment Agreement between World Fuel Services, Inc. and Michael S. Clementi, dated May 20, 2011 (incorporated by reference herein to Exhibit 10.1 to our Quarterly Report on Form 10‑Q10-Q for the quarter ended June 30, 20112017 filed on August 2, 2011)July 28, 2017). *10.91993 Non‑Employee Directors Stock Option Plan, as amended and restated (incorporated by reference herein to Exhibit 4.1 to our Registration Statement on Form S‑8 filed on December 20, 2005). *10.101996 Employee Stock Option Plan (incorporated by reference herein to Exhibit A to our Schedule 14A filed on June 25, 1998). *10.112001 Omnibus Plan, as amended and restated (incorporated by reference herein to Exhibit 4.2 to our Registration Statement on Form S‑8 filed on December 20, 2005). *10.12the Company'sour Definitive Proxy Statement on Schedule 14A filed with the SEC on April 27, 2009.2009). *10.13World Fuel Services Corporation 2013 Executive Incentive2016 Omnibus Plan (incorporated by reference herein to Exhibit 10.1 to our Current Report on Form 8‑K8-K filed on June 4, 2013)2, 2016). *10.14Form of Non-Employee Director Restricted Stock Unit Grant Agreement under the 2006 Omnibus Plan and 2016 Omnibus Plan (incorporated by reference herein to Exhibit 10.24 to our Annual Report on Form 10-K for the year ended December 31, 2015 filed on February 16, 2016). * Form of Named Executive Officer Restricted Stock Unit Grant Agreement under the 20062016 Omnibus Plan (incorporated by reference herein to Exhibit 10.4 to our Quarterly Report on Form 10‑Q for the quarter ended June 30, 2011 filed on August 2, 2011).Plan. *10.15Form of Named Executive Officer Long-Term Incentive Restricted Stock Agreement under the 2006 Omnibus Plan (incorporated by reference herein to Exhibit 10.5 to our Quarterly Report on Form 10‑Q for the quarter ended June 30, 2011 filed on August 2, 2011). *10.16Form of Stock‑Settled Stock Appreciation Right Agreement in connection with the 2006 Omnibus Plan (incorporated by reference herein to Exhibit 10.3 to our Current Report on Form 8‑K filed on November 7, 2006). *10.17Form of Named Executive Officer Performance‑Based Restricted StockUnit Grant Agreement under the 2006 Omnibus Plan (incorporated by reference herein to Exhibit 10.1 to our Quarterly Report on Form 10‑Q for the quarter ended SeptemberJune 30, 20122015 filed on November 1, 2012)July 30, 2015). *10.18Form of Named Executive Officer 2017 Performance-Based Restricted Stock Unit Grant Agreement under the 2016 Omnibus Plan. * Form of Named Executive Officer 2017 Performance-Based Stock-Settled Stock Appreciation Right Agreement under the 2016 Omnibus Plan. * Form of Michael J. Kasbar Restricted Stock Unit Grant Agreement under the 2006 and 2016 Omnibus Plan. * Form of Michael J. Kasbar Stock-Settled Stock Appreciation Right Agreement under the 2006 Omnibus Plan (incorporated by reference herein to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 filed on July 30, 2014). * Form of Michael J. Kasbar Stock-Settled Stock Appreciation Right Agreement (3-year Cliff Vesting) under the 2006 Omnibus Plan and 2016 Omnibus Plan (incorporated by reference herein to Exhibit 10.15 to our Annual Report on Form 10-K for the year ended December 31, 2016 filed on February 21, 2017). * Form of Ira M. Birns Restricted Stock Unit Grant Agreement dated March 15, 2010 (incorporated by reference herein to Exhibit 10.19 to our Annual Report on Form 10 K forunder the fiscal year ended December 31, 2011 filed on February 23, 2012).2006 and 2016 Omnibus Plan. *10.19Amendment to March 15, 2010Form of Ira M. Birns RestrictedStock-Settled Stock Unit GrantAppreciation Right Agreement dated February 3, 2011 (incorporated by reference herein to Exhibit 10.20 to our Annual Report on Form 10‑K forunder the fiscal year ended December 31, 2011 filed on February 23, 2012). *10.20Amendment to 2009, 2010 and 2011 Michael S. Clementi Restricted Stock Unit Grant Agreements, dated May 20, 20112006 Omnibus Plan (incorporated by reference herein to Exhibit 10.2 to our Quarterly Report on Form 10‑Q10-Q for the quarter ended June 30, 20112014 filed on August 2, 2011)July 30, 2014). *10.21Amendment to 2009, 2010 and 2011 Michael S. Clementi Restricted Stock Unit Grant Agreements, dated October 25, 2011 (incorporated by reference herein to Exhibit 10.1 to our Quarterly Report on Form 10‑Q for the quarter ended September 30, 2011 filed on November 1, 2011). *40Exhibit No.Description10.22 S. ClementiJ. Kasbar and Ira M. Birns 2016 Performance-Based Restricted Stock Unit Grant Agreement under the 2006 Omnibus Plan (incorporated by reference herein to Exhibit 10.18 to our Annual Report on Form 10-K for the year ended December 31, 2016 filed on February 21, 2017). *Form of Michael J. Crosby and John P. Rau 2015 Performance-Based Restricted Stock Unit Grant Agreement under the 2006 Omnibus Plan (incorporated herein by reference to Exhibit 10.3 to our Quarterly Report on Form 10 Q10-Q for the quarter ended June 30, 20112017 filed on August 2, 2011)July 28, 2017).*10.23Exhibit No. Description Form of 2013 Non-Employee DirectorMichael J. Crosby and John P. Rau 2016 Performance-Based Restricted Stock Unit AwardGrant Agreement under the 2006 Omnibus Plan. *Form of Michael J. Crosby and John P. Rau Restricted Stock Grant Agreement under the 2006 Omnibus Plan (incorporated herein by reference herein to Exhibit 10.2510.4 to our AnnualQuarterly Report on Form 10 K10-Q for the fiscal yearquarter ended December 31, 2013June 30, 2017 filed on February 14, 2014)July 28, 2017). *10.24 Form of John P. Rau Restricted Stock Settled Stock Appreciation RightGrant Agreement (Non-Employee Director) in connection withunder the 2006 Omnibus Plan (incorporated herein by reference herein to Exhibit 10.5 to our CurrentQuarterly Report on Form 8 K10-Q for the quarter ended June 30, 2017 filed on November 7, 2006)July 28, 2017). *10.25Form of Michael J. Crosby and John P. Rau Restricted Stock Unit Grant Agreement under the 2006 Omnibus Plan. * Performance-Based Restricted Stock Unit Grant Agreement, dated as of November 10, 2017, between World Fuel Services Corporation and Jeffrey P. Smith. * Fourth Amended and Restated Credit Agreement, dated as of October 10, 2013, among World Fuel Services Corporation, World Fuel Services Europe, Ltd. and World Fuel Services (Singapore) Pte Ltd, as borrowers, Bank of America, N.A., as administrative agent, and the financial institutions named therein as lenders (incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8 K8-K filed on October 11, 2013).*10.26First Amendment No. 1 to the Fourth Amended and Restated Credit Agreement, and Joinder Agreement, dated as of January 30, 2015, among World Fuel Services Corporation, World Fuel Services Europe, Ltd. and World Fuel Services (Singapore) Pte Ltd, as borrowers, Bank of America, N.A., as administrative agent, and the financial institutions named therein as lenders (incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8 K8-K filed on February 5, 2015).*21.1Amendment No. 2 to the Fourth Amended and Restated Credit Agreement, and Joinder Agreement, dated as of October 26, 2016, among World Fuel Services Corporation, World Fuel Services Europe, Ltd. and World Fuel Services (Singapore) Pte Ltd, as borrowers, Bank of America, N.A., as administrative agent, and the financial institutions named therein as lenders (incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on October 27, 2016). Amendment No. 3 to the Fourth Amended and Restated Credit Agreement, dated as of May 12, 2017, among World Fuel Services Corporation, World Fuel Services Europe, Ltd. and World Fuel Services (Singapore) Pte Ltd, as borrowers, Bank of America, N.A., as administrative agent, and the financial institutions named therein as lenders (incorporated herein by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2017 filed on July 28, 2017).Amendment No. 4 to the Fourth Amended and Restated Credit Agreement, dated as January 30, 2018, among World Fuel Services Corporation, World Fuel Services Europe, Ltd. and World Fuel Services (Singapore) Pte Ltd, as borrowers, Bank of America, N.A., as administrative agent, and the financial institutions named therein as lenders.Subsidiaries of the Registrant. Consent of Independent Registered Certified Public Accounting Firm.Certification of the Chief Executive Officer pursuant to Rule 13a‑14(a) or Rule 15d‑14(a). Certification of the Chief Financial Officer pursuant to Rule 13a‑14(a) or Rule 15d‑14(a). Statement of Chief Executive Officer and Chief Financial Officer under Section 906 of the Sarbanes‑Oxley Act of 2002 (18 U.S.C. Section 1350). The following materials from World Fuel Services Corporation’s Annual Report on Form 10‑K for the year ended December 31, 2014,2017, formatted in XBRL (Extensible Business Reporting Language); (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income and Comprehensive Income, (iii) Consolidated Statements of Shareholders’ Equity, (iv) Consolidated Statements of Cash Flows, and (v) Notes to the Consolidated Financial Statements.*Management contracts and compensatory plans or arrangements required to be filed as exhibits to this form, pursuant to Item 15(b).41REPORTREPORT OF INDEPENDENT REGISTERED CERTIFIEDTo the Shareholders and Board of Directors of World Fuel Services Corporation:In our opinion,CorporationOpinions on the Financial Statements and Internal Control over Financial ReportingWe have audited the accompanying consolidated balance sheets of World Fuel Services Corporation and its subsidiaries as of December 31, 2017 and 2016, and the related consolidated statements of income and comprehensive income, of shareholders’ equity and of cash flows for each of the three years in the period ended December 31, 2017, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of World Fuel Services Corporation and its subsidiaries (the “Company”) atthe Company as of December 31, 20142017 and 2013,December 31, 2016, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 20142017 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2014,2017, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). COSO.Basis for OpinionsThe Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management's Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on thesethe Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our integrated audits. We conducted our audits in accordanceare a public accounting firm registered with the standards of the Public Company Accounting Oversight Board (United States). ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supportingregarding the amounts and disclosures in the consolidated financial statements, assessingstatements. Our audits also included evaluating the accounting principles used and significant estimates made by management, andas well as evaluating the overall presentation of the consolidated financial statement presentation.statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.Definition and Limitations of Internal Control over Financial ReportingA company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.As described in Management's Report on Internal Control over Financial Reporting appearing in Item 9A of/s/PricewaterhouseCoopers LLPCertified Public AccountantsMiami, FloridaFebruary 28, 2018We have served as the Company’s 2014 Annual Report on Form 10-K, management has excluded Watson Petroleum and Colt from its assessment of internal control over financial reporting as of December 31, 2014 because these businesses were acquired in purchase business combinations during the year ended December 31, 2014. We have also excluded Watson Petroleum Limited (now known as WFL (UK) Limited) and Colt International, L.L.C. from our audit of internal control over financial reporting. Watson Petroleum Limited (now known as WFL (UK) Limited) and Colt International, L.L.C. are both wholly-owned subsidiaries whose total assets and revenues represent approximately 10.4% and 4.6%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2014./s/ PricewaterhouseCoopers LLPMiami, FloridaFebruary 12, 201542WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES(In thousands,millions, except per share data)2014 2013 302,264 292,061 2,307,852 2,538,642 437,566 655,046 76,936 120,205 303,599 16,879 246,626 192,668 3,674,843 3,815,501 202,716 129,685 656,078 483,591 346,343 310,500 4,879,980 4,739,277 17,914 14,647 1,850,134 2,210,427 138,803 111,068 234,503 178,373 2,241,354 2,514,515 671,954 449,064 82,454 82,532 19,337 14,272 3,015,099 3,060,383 721 719 496,402 495,199 1,418,450 1,207,299 (60,215) (29,319) 1,855,358 1,673,898 9,523 4,996 1,864,881 1,678,894 4,879,980 4,739,277 As of December 31, 2017 2016 Assets: Current assets: Cash and cash equivalents $ 372.3 $ 698.6 Accounts receivable, net 2,705.6 2,344.0 Inventories 505.0 458.0 Prepaid expenses 64.4 46.5 Short-term derivative assets, net 51.1 58.9 Other current assets 241.9 230.6 Total current assets 3,940.4 3,836.6 Property and equipment, net 329.8 311.2 Goodwill 845.5 835.8 Identifiable intangible and other non-current assets 472.1 429.1 Total assets $ 5,587.8 $ 5,412.6 Liabilities: Current liabilities: Current maturities of long-term debt and capital leases $ 25.6 $ 15.4 Accounts payable 2,239.7 1,770.4 Customer deposits 108.3 90.8 Accrued expenses and other current liabilities 344.9 306.0 Total current liabilities 2,718.6 2,182.7 Long-term debt 884.6 1,170.8 Non-current income tax liabilities, net 202.4 84.6 Other long-term liabilities 44.2 34.5 Total liabilities 3,849.8 3,472.6 Commitments and contingencies Equity: World Fuel shareholders' equity: Preferred stock, $1.00 par value; 0.1 shares authorized, none issued — — Common stock, $0.01 par value; 100.0 shares authorized, 67.7 and 69.9 issued and outstanding as of December 31, 2017 and December 31, 2016, respectively 0.7 0.7 Capital in excess of par value 354.9 399.9 Retained earnings 1,492.8 1,679.3 Accumulated other comprehensive loss (126.5 ) (154.8 ) Total World Fuel shareholders' equity 1,721.9 1,925.0 Noncontrolling interest 16.0 15.0 Total equity 1,738.0 1,940.0 Total liabilities and equity $ 5,587.8 $ 5,412.6 The accompanying notes are an integral part of these consolidated financial statements.43 AND SUBSIDIARIESCOMPREHENSIVE INCOME(In thousands,millions, except earnings per share data)2014 2013 2012 43,386,389 41,561,947 38,945,338 42,572,767 40,809,189 38,271,891 813,622 752,758 673,447 319,842 288,021 237,362 3,757 11,745 4,790 220,875 188,634 174,272 544,474 488,400 416,424 269,148 264,358 257,023 (25,237) (17,287) (19,097) 25,640 (406) 1,669 403 (17,693) (17,428) 269,551 246,665 239,595 51,144 39,505 38,244 218,407 207,160 201,351 (3,340) 4,085 12,006 221,747 203,075 189,345 3.13 2.85 2.66 70,750 71,224 71,154 3.11 2.83 2.64 71,323 71,800 71,817 218,407 207,160 201,351 (30,896) (13,189) (9,606) (112) 112 (30,896) (13,301) (9,494) 187,511 193,859 191,857 (3,340) 4,085 12,006 190,851 189,774 179,851 For the Year ended December 31, 2017 2016 2015 Revenue $ 33,695.5 $ 27,015.8 $ 30,381.4 Cost of revenue 32,763.3 26,116.8 29,520.4 Gross profit 932.2 899.0 861.0 Operating expenses: Compensation and employee benefits 428.2 413.3 365.8 General and administrative 306.9 296.8 249.5 Goodwill and other impairments 91.9 — — Restructuring charges 59.6 — — 886.6 710.1 615.3 Income from operations 45.6 188.9 245.7 Non-operating expenses, net: Interest expense and other financing costs, net (60.3 ) (39.2 ) (29.9 ) Other income (expense), net (6.4 ) (7.5 ) 2.0 (66.7 ) (46.7 ) (27.9 ) Income (loss) before income taxes (21.1 ) 142.1 217.7 Provision for income taxes 149.2 15.7 47.2 Net income (loss) including noncontrolling interest (170.3 ) 126.4 170.5 Net income (loss) attributable to noncontrolling interest (0.1 ) — (3.9 ) Net income (loss) attributable to World Fuel $ (170.2 ) $ 126.5 $ 174.5 Basic earnings (loss) per common share $ (2.50 ) $ 1.82 $ 2.49 Basic weighted average common shares 68.1 69.3 70.2 Diluted earnings (loss) per common share $ (2.50 ) $ 1.81 $ 2.47 Diluted weighted average common shares 68.1 69.8 70.7 Comprehensive income: Net income (loss) including noncontrolling interest $ (170.3 ) $ 126.4 $ 170.5 Other comprehensive income (loss): Foreign currency translation adjustments 30.1 (40.4 ) (45.4 ) Cash Flow hedges, net of income tax benefit of $0.3, $4.1, and $0.5 for 2017, 2016, and 2015, respectively (0.3 ) (6.6 ) (0.8 ) Other comprehensive income (loss): 29.8 (47.0 ) (46.2 ) Comprehensive income (loss) including noncontrolling interest (140.5 ) 79.5 124.3 Comprehensive income (loss) attributable to noncontrolling interest 1.5 1.6 (2.2 ) Comprehensive income (loss) attributable to World Fuel $ (142.0 ) $ 77.9 $ 126.4 The accompanying notes are an integral part of these consolidated financial statements.44WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES(In thousands)millions)71,154 712 502,551 836,222 (6,524) 1,332,961 13,757 1,346,718 189,345 189,345 12,006 201,351 (10,685) (10,685) (10,685) (1,313) (1,313) 13,610 13,610 13,610 1,028 9 6,401 6,410 6,410 (35) (4,973) (4,973) (4,973) (9,494) (9,494) (9,494) 72,147 721 517,589 1,014,882 (16,018) 1,517,174 24,450 1,541,624 203,075 203,075 4,085 207,160 (10,658) (10,658) (10,658) 17,524 17,524 (15,489) (15,489) (25,574) (25,574) 16,075 16,075 16,075 678 7 3,294 3,301 3,301 (16) (6,768) (6,768) (6,768) (926) (9) (34,991) (35,000) (35,000) (13,301) (13,301) (13,301) 71,883 719 495,199 1,207,299 (29,319) 1,673,898 4,996 1,678,894 221,747 221,747 (3,340) 218,407 (10,596) (10,596) (10,596) 19,448 19,448 (11,581) (11,581) 15,260 15,260 15,260 477 5 1,023 1,028 1,028 (51) (1) (5,083) (5,084) (5,084) (227) (2) (9,997) (9,999) (9,999) (30,896) (30,896) (30,896) 72,082 721 496,402 1,418,450 (60,215) 1,855,358 9,523 1,864,881 Common Stock Capital in Excess of Par Value Accumulated Other Comprehensive Loss Total World Fuel Shareholders’ Equity Noncontrolling Interest Shares Amount Retained Earnings Total Equity Balance as of December 31, 2014 72.1 $ 0.7 $ 496.4 $ 1,412.0 $ (59.2 ) $ 1,849.9 $ 9.5 $ 1,859.4 Net income — — — 174.5 — 174.5 (3.9 ) 170.5 Cash dividends declared — — — (16.8 ) — (16.8 ) — (16.8 ) Investment by noncontrolling interest — — — — — — 0.5 0.5 Distribution of noncontrolling interest — — — — — — (0.2 ) (0.2 ) Amortization of share-based payment awards — — 16.9 — — 16.9 — 16.9 Issuance (cancellation) of common stock related to share-based payment awards 0.4 — — — — — — — Purchases of common stock tendered by employees to satisfy the required withholding taxes related to share-based payment awards (0.1 ) — (7.3 ) — — (7.3 ) — (7.3 ) Purchases of common stock (1.6 ) — (70.5 ) — — (70.5 ) — (70.5 ) Other comprehensive income (loss) — — — (50.3 ) (50.3 ) 4.0 (46.2 ) Other — — (0.1 ) (0.3 ) — (0.4 ) 0.1 (0.3 ) Balance as of December 31, 2015 70.8 0.7 435.3 1,569.4 (109.5 ) 1,895.9 10.0 1,905.9 Net income — — — 126.5 — 126.5 — 126.4 Cash dividends declared — — — (16.6 ) — (16.6 ) — (16.6 ) Distribution of noncontrolling interest — — — — — — (0.5 ) (0.5 ) Amortization of share-based payment awards — — 19.7 — — 19.7 — 19.7 Issuance (cancellation) of common stock related to share-based payment awards including income tax benefit of $1.6 million 0.1 — 1.6 — — 1.6 — 1.6 Purchases of common stock tendered by employees to satisfy the required withholding taxes related to share-based payment awards (0.1 ) — (4.6 ) — — (4.6 ) — (4.6 ) Purchases of common stock (1.0 ) — (41.2 ) — — (41.2 ) — (41.2 ) Acquisition of remaining 49% equity interest — — (10.9 ) — — (10.9 ) 7.2 (3.7 ) Other comprehensive income (loss) — — — — (45.4 ) (45.4 ) (1.6 ) (47.0 ) Other — — (0.1 ) — — (0.1 ) — — Balance as of December 31, 2016 69.9 0.7 399.9 1,679.3 (154.8 ) 1,925.0 15.0 1,940.0 Net income — — — (170.2 ) — (170.2 ) (0.1 ) (170.3 ) Cash dividends declared — — — (16.3 ) — (16.3 ) — (16.3 ) Distribution of noncontrolling interest — — — — — — (0.4 ) (0.4 ) Amortization of share-based payment awards — — 21.3 — — 21.3 — 21.3 Issuance (cancellation) of common stock related to share-based payment awards (0.4 ) — — — — — — — Purchases of common stock tendered by employees to satisfy the required withholding taxes related to share-based payment awards (0.1 ) — (4.3 ) — — (4.3 ) — (4.3 ) Purchases of common stock (1.7 ) — (61.9 ) — — (61.9 ) — (61.9 ) Other comprehensive income (loss) — — — — 28.3 28.3 1.5 29.8 Balance as of December 31, 2017 67.7 $ 0.7 $ 354.9 $ 1,492.8 $ (126.5 ) $ 1,721.9 $ 16.0 $ 1,738.0 The accompanying notes are an integral part of these consolidated financial statements.45 AND SUBSIDIARIES(In thousands)millions)For the Year ended December 31, 2014 2013 2012 2017 2016 2015 218,407 207,160 201,351 Net income (loss) including noncontrolling interest $ (170.3 ) $ 126.4 $ 170.5 59,399 44,710 36,714 86.0 82.3 65.5 3,757 11,745 4,790 9.3 15.4 7.5 (18,082) 15,755 16,716 14,079 21.2 19.2 17.0 10,351 (8,243) 9,665 (5,250) (8,538) (11,199) Deferred income tax provision (benefit) 13.9 (36.0 ) 5.3 Goodwill and other impairments 91.9 — — Restructuring charges 25.7 — — Foreign currency losses (gains), net (0.6 ) (11.8 ) (7.3 ) (12,322) 2,065 (5,659) (1.2 ) (7.5 ) (5.0 ) 462,517 (328,969) 97,297 (366.6 ) (506.8 ) 485.0 232,258 (77,754) (90,847) (43.9 ) (49.5 ) 81.4 46,479 30,755 (51,155) (19.7 ) 7.7 10.8 (265,779) 3,534 2,577 (0.2 ) 163.7 81.5 (30,200) (22,591) (3,517) (13.9 ) (20.4 ) 34.0 (288,049) 9,920 (11,059) (26.7 ) 149.2 133.3 2,877 (19,638) 4,793 (30.3 ) 4.4 (1.9 ) (585,674) 385,482 (45,179) 451.2 423.4 (481.5 ) 12,816 13,874 (6,513) 13.4 (26.3 ) (17.5 ) 266,534 (3,549) 1,795 77.7 (121.9 ) (141.9 ) 15,366 7,623 (2,142) 88.4 (6.4 ) 11.0 (77,247) 57,142 (55,560) 375.5 78.8 276.9 141,160 264,302 145,791 205.2 205.2 447.5 (273,649) (76,954) (217,782) Acquisition of businesses, net of cash acquired and other investments (120.7 ) (430.8 ) (96.9 ) (50,153) (82,716) (28,454) (54.0 ) (36.1 ) (51.0 ) (21,724) 43,000 (2,104) (21,588) 21,588 (7,969) (787) 7,543 401 (6,921) Other investing activities, net (5.4 ) 38.4 3.2 (297,087) (174,560) (246,622) (180.1 ) (428.5 ) (144.8 ) 5,757,254 4,556,618 4,050,500 4,472.7 4,688.0 4,831.2 (5,551,509) (4,476,304) (3,965,960) (4,749.7 ) (4,280.3 ) (4,752.0 ) (10,595) (10,679) (10,685) (16.3 ) (16.6 ) (15.3 ) 17,519 (11,581) (15,489) (1,401) (9,999) (35,000) (61.9 ) (41.2 ) (70.5 ) 1,028 3,301 3,681 (5,083) (6,768) (4,973) (3,689) (4,304) 169,515 29,509 66,858 Other financing activities, net (6.3 ) (9.0 ) (10.5 ) Net cash provided by (used in) financing activities (361.6 ) 340.9 (17.0 ) (3,385) 70 1,298 10.3 (1.5 ) (5.5 ) 10,203 119,321 (32,675) (326.2 ) 116.1 280.2 292,061 172,740 205,415 302,264 292,061 172,740 Cash and cash equivalents, as of beginning of period 698.6 582.5 302.3 Cash and cash equivalents, as of end of period $ 372.3 $ 698.6 $ 582.5 46 AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS– (CONTINUED) (In thousands)millions)2014 2013 2012 29,151 19,131 17,227 40,785 34,557 26,529 For the Year ended December 31, 2017 2016 2015 Supplemental Disclosures of Cash Flow Information Cash paid during the year for: Interest, net of capitalized interest $ 64.9 $ 40.7 $ 33.1 Income taxes $ 50.8 $ 37.5 $ 44.0 Supplemental Schedule of Noncash Investing and Financing ActivitiesCash dividends declared, but not yet paid, were $2.6$4.0 million and $4.1 million as of December 31, 20142017 and December 31, 2013.We had accrued capital expenditures totaling $3.4 million and $1.8 million as of December 31, 2014 and December 31, 2013, respectively, which were recorded in accounts payable.In November 2014, we utilized £8.8 million ($13.8 million) of the £13.0 million ($21.7 million) escrow account balance for payment of assumed pension exit obligations. The escrow account balance will be used to pay the remaining assumed pension exit obligations and amounts due to the sellers.In 2013, due to a change in the operational control of our crude oil transloading joint venture from us to our joint venture partner, we recorded a reduction of $44.2 million and $25.6 million in net assets and noncontrolling interest equity, respectively, and an increase of $25.6 million in other investments. The aforementioned joint venture was subsequently sold in December 2014. For more information on the sale, see “Other Investments” in Note 1.In 2012, we granted equity awards to certain employees of which $2.7 million was previously recorded in accrued expenses and other current liabilities.In connection with an equity investment, we recorded a current liability and other investment of £10.0 million ($16.3 million) in 2012 and £2.0 million ($2.8 million) in 2013 related to contingent consideration. The aggregate amount of £12.0 million ($19.1 million) was paid in 2013.In connection with our acquisitions for the years presented, the following table presents the assets acquired, net of cash and liabilities assumed:2014 2013 2012 610,963 77,164 366,230 314,785 36,765 151,816 In connection with our acquisitions, we issued promissory notes totaling $9.0 million, $3.0 million and $7.2 million in 2014, 2013 and 2012, respectively.47WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES NOTESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS1. NatureBasis of Business, Acquisitions,Presentation and Significant Accounting Policies and Recent Accounting PronouncementsNature of BusinessWorld Fuel Services Corporation (the “Company”) was incorporated in Florida in July 1984 and along with its consolidated subsidiaries is referred to collectively in this Annual Report on Form 10‑K (“2017 10‑K Report”) as “World Fuel,” “we,” “our” and “us.”We are a leading global fuel logistics, transaction management and payment processingservices company, principally engaged in the distribution of fuel and related products and services in the aviation, marine and land transportation industries. We compete by providingIn recent years, we have expanded our customersproduct and service offerings to include energy advisory services and supply fulfillment with value-added benefits, including single supplier convenience, competitive pricing, the availability of trade credit, price riskrespect to natural gas and power and transaction and payment management logistical support, fuel quality control and fuel procurement outsourcing. We have three reportable operating business segments: aviation, marine, and land. We primarily contract with third parties for the delivery and storage of fuel products, however, in some cases we own storage and transportation assets for strategic purposes. In our aviation segment, we offer fuel and related products and servicessolutions to major commercial airlines, second and third‑tier airlines, cargo carriers, regional and low cost carriers, airports, fixed based operators, corporate fleets, fractional operators, private aircraft, military fleets and to the United States (“U.S.”) and foreign governments. In our marine segment, we offer fuel, lubricants and related products and services to a broad base of marine customers, including international container and tanker fleets, commercial cruise lines, yachts and time‑charter operators, the U.S. and foreign governments, as well as other fuel suppliers. In our land segment, we offer fuel, lubricants and related products and services to petroleum distributors operating in the land transportation market, retail petroleum operators, and industrial customers. Our intention is to become a leading global energy management company offering a full suite of energy advisory, management and fulfillment services and technology solutions across the energy product spectrum. We also seek to become a leading transaction and payment management company, offering payment management solutions to commercial residential and government customers. Additionally, we engage in crude oil marketing activities. In addition, we offer transaction management services, which consist of card payment solutions and merchant processing services toindustrial customers, principally in the aviation, marineland and landmarine transportation industries.Acquisitions2014 AcquisitionsOn March 7, 2014, we completed the acquisition of all of the outstanding stock of Watson Petroleum Limited (now known as WFL (UK) Limited) (“Watson Petroleum”) a leading distributor of gasoline, diesel, heating oil, lubricants and other products and related services. Watson Petroleum is headquartered in Brinkworth, England and is one of the largest fuel distributors in the United Kingdom. The estimated purchase price of Watson Petroleum was $173.9 million.On July 29, 2014, we completed the acquisition of all of the outstanding stock of Colt International, L.L.C. (“Colt”) a leading provider of contract fuel and international trip planning services in the general aviation marketplace. Colt is headquartered in Houston, Texas and offers services at more than 3,000 locations. The estimated purchase price of Colt was $72.9 million.In addition to the above acquisitions, in 2014, we completed two acquisitions in our aviation segment and one acquisition in our marine segment, which were not material individually or in the aggregate.The financial position, results of operations and cash flows of the 2014 acquisitions have been included in our consolidated financial statements since their respective acquisition dates.The following reconciles the estimated aggregate purchase price for the 2014 acquisitions to the cash paid for the acquisitions, net of cash acquired (in thousands):Estimated purchase price$296,962 Less: Cash acquired20,232 Estimated purchase price, net of cash acquired276,730 Less: Promissory notes issued9,000 Less: Amounts due to sellers12,228 Cash paid for acquisition of businesses$255,502 48The estimated purchase price for each of the 2014 acquisitions is subject to change based on the final value of the net assets acquired and was allocated to the assets acquired and liabilities assumed based on their estimated fair value as of the acquisition date. Since the valuations of the assets acquired and liabilities assumed in connection with the 2014 acquisitions have not been finalized, the allocation of the purchase price of these acquisitions may change. On an aggregate basis, the estimated purchase price allocation for the 2014 acquisitions is as follows (in thousands):Assets acquired:Cash and cash equivalents$20,232 Accounts receivable259,475 Inventories14,412 Property and equipment55,172 Identifiable intangible assets78,889 Goodwill180,683 Other current and long-term assets22,456 Liabilities assumed:Accounts payable(247,579)Accrued expenses and other current liabilities(51,579)Other long-term liabilities(15,751)Initial noncontrolling interest upon acquisition of businesses(19,448)Estimated purchase price$296,962 In connection with the acquisition of Watson Petroleum, we made a payment of £13.0 million ($21.7 million) to an escrow account related to an estimated assumed pension exit obligation and amounts due to sellers. In addition to the estimated amount of £3.2 million ($5.4 million) to be paid to the sellers from the escrow account, we have recorded additional estimated amounts due to sellers of £2.1 million ($3.5 million). The aggregate estimated amounts due to sellers as of December 31, 2014 were £5.3 million ($8.3 million). The escrow account balance is included in other current assets and the remaining assumed pension exit obligation is included in accrued expenses and other current liabilities in the accompanying consolidated balance sheets.For our 2014 acquisitions, we recorded goodwill of $180.7 million, of which $21.2 million is anticipated to be deductible for tax purposes. The aggregate identifiable intangible assets consisted of $54.0 million of customer relationships and $14.0 million of other identifiable intangible assets with weighted average lives of 4.9 years and 5.6 years, respectively, as well as $10.9 million of indefinite-lived trademark/trade name rights. The following presents the unaudited pro forma results for 2014 and 2013, as if the 2014 acquisitions had been completed on January 1, 2013 (in thousands, except per share data):2014 2013 44,071,793 44,098,881 226,608 216,429 3.20 3.04 3.18 3.01 In the aggregate, the 2014 acquisitions did not have a significant impact on our revenue and net income for 2014.492013 AcquisitionsIn 2013, we completed three acquisitions in our land segment, which were not material individually or in the aggregate. The financial position, results of operations and cash flows of the 2013 acquisitions have been included in our consolidated financial statements since their respective acquisition dates.The following reconciles the aggregate purchase price for the 2013 acquisitions to the cash paid for the acquisitions, net of cash acquired (in thousands):Purchase price$43,792 Less: Cash acquired3,335 Purchase price, net of cash acquired40,457 Less: Promissory notes issued3,000 Cash paid for acquisition of businesses$37,457 During 2014, we completed the valuation of the assets acquired and liabilities assumed for the 2013 acquisitions. As a result, during 2014, we completed the purchase price allocation which primarily resulted in a $0.4 million increase to goodwill and a $0.5 million reduction in identifiable intangible assets. Additionally, in 2014, we paid $0.1 million of the amounts due to sellers that were outstanding as of December 31, 2013.The purchase price for each of the 2013 acquisitions was allocated to the assets acquired and liabilities assumed based on their estimated fair value at the acquisition date. On an aggregate basis, the purchase price allocation for the 2013 acquisitions is as follows (in thousands):Assets acquired:Cash and cash equivalents$3,335 Accounts receivable31,287 Inventories8,839 Property and equipment3,901 Identifiable intangible assets13,548 Goodwill16,489 Other current and long-term assets2,717 Liabilities assumed:Accounts payable(29,631)Accrued expenses and other current liabilities(3,582)Other long-term liabilities(3,111)Purchase price$43,792 2012 AcquisitionsOn December 31, 2012, we acquired certain assets of Multi Service Corporation, including the assets comprising its transaction management business, and all of the outstanding stock of its foreign subsidiaries (the “Multi Service business”), a global transaction management company based in Overland Park, Kansas specializing in fleet, government, and commercial payment programs to expand our service offering within the transportation industry. The Multi Service product offering includes the Multi Service Fuel Card, accepted at more than 3,500 truck stops in the United States and Canada, payment solutions for tolls, bridges and tunnels across Europe, government payment systems for global fuel procurement, and commercial payment programs in the transportation industry. The purchase price of the Multi Service business was $155.3 million.On September 1, 2012, we acquired certain assets of CarterEnergy Corporation, including the assets comprising its wholesale motor fuel distribution business (the “CarterEnergy business”). We acquired the CarterEnergy business, based in Overland Park, Kansas, a distributor of branded gasoline and diesel fuel to more than 700 retail operators and a supplier to industrial, commercial and government customers, to expand our wholesale branded gasoline and diesel fuel business. The purchase price of the CarterEnergy business was $45.1 million.In addition to the above acquisitions, we completed three acquisitions, which were not material individually or in the aggregate. Of these acquisitions, two were in our aviation segment and the other was in our aviation and land segments.The financial position, results of operations and cash flows of the 2012 acquisitions have been included in our consolidated financial statements since their respective acquisition dates.50The following reconciles the aggregate purchase price for the 2012 acquisitions to the cash paid for the acquisitions, net of cash acquired (in thousands):Purchase price$226,449 Less: Cash acquired12,793 Purchase price, net of cash acquired213,656 Less: Promissory notes issued7,214 Less: Amounts due to sellers75 Cash paid for acquisition of businesses$206,367 During 2013, we completed the valuation of the assets acquired and liabilities assumed for the 2012 acquisitions. As a result, during 2013, we completed the purchase price allocation which primarily resulted in a $2.0 million reduction in goodwill, a $3.3 million increase in identifiable intangible assets, partially offset by a $0.9 million decrease in other acquired assets and a $0.4 million increase in assumed liabilities. Additionally, in 2013, we paid $17.5 million of the amounts due to sellers that were outstanding as of December 31, 2012.The purchase price for each of the 2012 acquisitions was allocated to the assets acquired and liabilities assumed based on their estimated fair value at the acquisition date. On an aggregate basis, the purchase price allocation for the 2012 acquisitions is as follows (in thousands):Assets acquired:Cash and cash equivalents$12,793 Accounts receivable134,966 Inventories7,311 Property and equipment10,323 Identifiable intangible assets87,150 Goodwill121,188 Other current and long-term assets4,851 Liabilities assumed:Accounts payable(130,297)Accrued expenses and other current liabilities(18,321)Other long-term liabilities(3,515)Purchase price$226,449 Significant Accounting PoliciesConsolidationThe accompanying consolidated financial statements and related notes include the accounts of our parent company and all wholly‑owned and majority‑owned subsidiaries and joint ventures where we exercise control. Our consolidated financial statements include the operations of an acquired business after the completion of the acquisition. The decision of whether or not to consolidate an entity requires consideration of majority voting interests, as well as effective economic or other control over the entity. The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Our fiscal year-end is as of and for the year ended December 31 for each year presented. All transactions among our businesses have been eliminated.For additional information pertaining to our acquisitions, refer to Note 3.Certain amounts in the consolidated financial statements and associated notes may not add due to rounding. All percentages have been calculated using unrounded amounts.B. New Accounting StandardsAdoption of New Accounting StandardsIntangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. In January 2017, Accounting Standards Update (“ASU”) 2017-04 was issued, which simplifies the accounting for goodwill impairment by eliminating the requirement to perform a hypothetical purchase price allocation. As a result, an entity should recognize an impairment charge for the amount by which the carrying value of a reporting unit exceeds its fair value, not to exceed the total amount of goodwill allocated to that reporting unit. We have early adopted ASU 2017-04 and applied the new guidance for our goodwill impairment tests that were performed during the fourth quarter.Accounting Standards Issued But Not Yet AdoptedRevenue Recognition (Topic 606): Revenue from Contracts with Customers. In May 2014, ASU 2014-09 was issued. Under this ASU and subsequently issued amendments, an entity is required to recognize the amount of revenue it expects to be entitled to for the transfer of promised goods or services to customers. The updated standard will replace most existing revenue recognition guidance in U.S. GAAP. This ASU provides alternative methods of transition, a full retrospective and a modified retrospective approach. The modified retrospective approach would result in recognition of the cumulative impact of a retrospective application as of the beginning of the period of initial application, which in our case is the period beginning January 1, 2018.In preparation for adoption, we initially developed a cross-functional team and utilized a third-party service provider to assist us throughout our evaluation. In addition, we factored in the adoption into our ongoing enterprise resource planning platform upgrade, which we previously committed to perform.We have completed our review of a representative sample of contracts across each of our revenue streams. Through this process, we have made determinations on how our revenue streams will be accounted for after adoption, concluding that we will have similar performance obligations and timing of revenue recognition under ASC 606, as compared to those prior to adoption.As a result of completing these activities, we have prepared and made accessible internally our revenue recognition policy, which captures those decisions. We conducted an initial training that was distributed to our finance and accounting organization and we continue to train our commercial and operational teams on the relevant facets of our revenue recognition policy. We identified and implemented appropriate changes to our business processes and controls to support our revenue recognition and associated disclosure requirements under the new standard. An important aspect of adoption is the design of our contract management review process and its impact on the control orenvironment. The ongoing training activities will also serve as a platform to communicate certain process changes associated with our contract review process.We have selected the modified retrospective adoption approach, and the cumulative adjustment did not have a primary benefitmaterial impact on our financial statements. We anticipate certain disclosure changes, specifically as it relates to the financial statement line items where certain costs are recorded. Accordingly, the adoption of its profits. All significant intercompany accounts,the new standard will not have a material impact on our financial statements after adoption.Leases (Topic 842): Leases. In February 2016, ASU 2016-02 was issued. This standard will require all lessees to recognize a right of use asset and a lease liability on the balance sheet, except for leases with durations that are less than twelve months. This standard is effective at the beginning of our 2019 fiscal year. We are currently evaluating whether the adoption of this new guidance will have a material impact on our consolidated financial statements and related disclosures.Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. In August 2016 ASU 2016-15 was issued. The ASU provides guidance on classification of eight specific cash flows items. This standard is effective at the beginning of our 2018 fiscal year. We are currently evaluating whether the adoption of this new guidance will have a material impact on our consolidated financial statements and related disclosures.Business Combinations (Topic 805): Clarifying the Definition of a Business. In January 2017, ASU 2017-01 was issued. The update clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of businesses. This standard is effective at the beginning of our 2018 fiscal year. We do not believe the adoption of this new guidance will have a material impact on our consolidated financial statements and profitsrelated disclosures.Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. In August 2017, ASU 2017-12 was issued. The ASU is targeted at simplifying the application of hedge accounting and is effective at the beginning of our 2019 fiscal year. The amended guidance aims at aligning the recognition and presentation of the effects of hedge instruments and hedge items. We are eliminated upon consolidation.Usecurrently evaluating whether the adoption of this new guidance will have a material impact on our consolidated financial statements and related disclosures.C. EstimatesThe preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United StatesU.S. GAAP requires us to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Accordingly, actual results could materially differ from estimated amounts. We evaluate our estimated assumptions based on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.Fair Value of Financial InstrumentsThe carrying amounts of cash, cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value based on the short maturities of these instruments.We measure our cash surrender value of life insurance contracts, derivative contracts and related hedged items at their fair value in accordance with accounting guidance for fair value measurement. We believe the carrying value of our debt approximates fair value since these obligations bear interest at variable rates or fixed rates which are not significantly different than market rates.51The accounting guidance on fair value measurements and disclosures establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of us. Unobservable inputs are inputs that reflect our assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available under the circumstances. The hierarchy is broken down into three levels based on the reliability of the inputs as follows:1.Level 1 Inputs – Quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access.2.Level 2 Inputs – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. We perform annual back‑testing to validate that these inputs represent observable inputs that market participants use in pricing an asset or liability.3.Level 3 Inputs – Inputs that are unobservable for the asset or liability.The availability of observable inputs can vary and is affected by a wide variety of factors. To the extent that valuation is based on inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by us in determining fair value is greatest for instruments categorized in Level 3. In certain cases, the inputs used to measure fair value of a specific asset or liability may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety.Fair value is a market‑based measure considered from the perspective of a market participant who holds the asset or owes the liability rather than an entity‑specific measure. Therefore, even when market assumptions are not readily available, our own assumptions are set to reflect those that we feel market participants would use in pricing the asset or liability at the measurement date.Assets and liabilities that are recorded at fair value have been categorized based upon the fair value hierarchy. Our Level 1 items consist of exchange traded futures. Our Level 2 items consist of commodity swaps, commodity collars, non‑designated derivatives in the form of physical forward purchase or sales commitments, hedged inventories and hedged physical forward purchase or sales commitments. Our Level 3 items consist of physical forward purchase or sales commitments, foreign currency forward contracts and the Earn‑out liability. Realized and unrealized gains and losses of our physical forward purchase or sales commitments measured at fair value on a recurring basis that utilized Level 3 inputs are recognized as a component of either revenue or cost of revenue (based on the underlying transaction type). Realized and unrealized gains and losses of our foreign currency forward contracts which were not treated as cash flow hedges, measured at fair value on a recurring basis that utilized Level 3 inputs are recognized as other expense/income. Realized and unrealized gains and losses of our short‑term investments measured at fair value on a recurring basis that utilized Level 3 inputs are recognized as other expense/income.Derivative instruments can have bid and ask prices that may be observed in the marketplace. Bid prices reflect the highest price that a market participant is willing to pay and ask prices reflect the lowest price that a market participant is willing to accept. Our policy is to consistently apply mid‑ market pricing for valuation of our derivative instruments.Fair value of derivative commodity contracts and hedged item commitments is derived using forward prices that take into account commodity prices, interest rates, credit risk ratings, option volatility and currency rates. In accordance with the guidance on fair value measurements and disclosures, the impact of our credit risk rating is also considered when measuring the fair value of liabilities. The fair value of derivative instruments may be based on a combination of valuation inputs that are on different hierarchy levels. The fair value disclosures are determined based on the lowest level input that is significant to the fair value measurement in its entirety. The nature of inputs that are considered Level 3 are model inputs. Commodity contracts categorized in Level 3 are due to the significance of the unobservable model inputs to their respective fair values. The unobservable model inputs, such as basis differentials, are based on the difference between the historical prices of our prior transactions and the underlying observable data as well as certain risks related to non-performance. The effect on our income before income taxes of a 10% change in the model input for non-performance risk would not be significant. Fair value of hedged item inventories is derived using spot commodity prices and basis differentials. Fair value of foreign currency contracts is derived using forward prices that take into account interest rates, credit risk ratings and currency rates. Factors that could warrant a Level 2 input to move to a Level 3 input may include lack of observable market data because of a decrease in market activity, a degradation of a short‑term investment which requires us to value the investment based52on a Level 3 input, or a change in significance of a Level 3 input to the fair value measurement in its entirety. Our policy is to recognize transfers between Level 1, 2 or 3 as of the beginning of the reporting period in which the event or change in circumstances caused the transfer to occur.There were no significant changes to our valuation techniques during 2014 and 2013.Our cash equivalents consist principally of overnight investments, bank money market accounts and bank time deposits which have an original maturity date of less than 90 days. These securities are carried at cost, which approximates market value.E. Accounts Receivable and Allowance for Bad DebtOur accounts receivables credit terms are generally 30-60 days. Accounts receivable balances that are not paid within the terms of the sales agreement are generally subject to finance fees, based on the outstanding balance. Credit extension, monitoring and collection are performed for each of our business segments. Each business segment has a credit committeefunction that is responsible for approvingestablishing credit limits and approving limits above certainpreviously approved amounts, setting and maintaining credit standards, and managing the overall quality of the credit portfolio. We perform ongoing credit evaluations of our customers and adjust credit limits based upon payment history and the customer’s current creditworthiness, as determined by our review of our customer’s credit information. We extend credit on an unsecured basis to most of our customers. Accounts receivable are deemed past due based on contractual terms agreed to with our customers.We continuously monitor the composition of accounts receivable, collections and payments from our customers and maintain a provision for estimated credit losses based upon our historical experience with our customers, current market and industry conditions affecting our customers and any specific customer collection issues that we have identified. Principally based on these factors, an internally derived risk-based reserve is established on a quarterly basis. In addition to a risk-based reserve, a specific reserve is established for certain customers, based on customer receivable balances, overall exposure, payment history, current and expected market conditions, business developments, and other factors that influence the likelihood of collectability.Historical payment trends may not be a usefulan accurate indicator of current or future credit worthiness of our customers, particularly in these difficult economic and financial markets. AccountsAs a result of the limited predictability inherent in estimating which customers are less likely or unlikely to remit amounts owed to us, our provision for estimated credit losses may not be sufficient. Any write-off of accounts receivable are reduced byin excess of our provision for estimated credit losses would have an allowance for bad debt.F. InventoriesInventories are valued primarily using theweighted average cost, methodologyand first-in first-out in certain limited locations, and are stated at the lower of average cost or market.net realizable value. We utilize a variety of fuel indices and other indicators of market value. Sharp negative changes in these indices can result in reduction of our inventory valuation, which could have an adverse impact on our results of operations in the period in which we take the adjustment. Historically these adjustments have not had a material impact on our consolidated statements of operations. Components of inventory include fuel purchase costs, the related transportation costs and changes in the estimated fair market values for inventories included in a fair value hedge relationship.G. Business CombinationsWe account for business combinations using the acquisition method of accounting, under which the purchase price of the acquisition is allocated to the assets acquired and liabilities assumed using the fair values determined by management as of the acquisition date. We calculate the fair value based on the present value of estimated future cash flows. The estimated future cash flows are based on the best information available to us at the time. Acquisition-related costs incurred in connection with a business combination are expensed as incurred.H. Fair Value of Financial InstrumentsWe measure the fair value of financial instruments using observable and unobservable inputs. Observable inputs reflect what market participants would use in pricing the instrument, based on publicly available market data obtained from sources independent of us. Unobservable inputs are inputs for which market data are not available and reflect internal market assumptions.The accounting guidance establishes the following fair value hierarchy:Level 1 Inputs - Quoted prices in active markets.Level 2 Inputs - Quoted prices for similar instruments in active markets other than quoted prices included within Level 1, quoted prices for identical or similar instruments in markets that are not active; and model based valuations whose inputs are observable.Level 3 Inputs - Inputs that are unobservable.Our policy is to recognize transfers between levels as of the beginning of the reporting period in which the event or change in circumstance caused the transfer to occur. There were no significant changes to our valuation techniques during 2017 and 2016. For additional information pertaining to our fair value measurements, see Note 12.I. DerivativesWe enter into financial derivative contracts in order to mitigate the risk of market price fluctuations in aviation, marineland and landmarine fuel, to offer our customers fuel pricing alternatives to meet their needs and to mitigate the risk of fluctuationsdue to changes in foreign currency exchange rates. We also enter into proprietaryWhile we currently believe that our derivative transactions, primarily intended to capitalize on arbitrage opportunities related to basis or time spreads related to fuel products we sell. We have appliedcontracts will be effective in mitigating the normal purchase and normal sales exception (“NPNS”), as provided by accounting guidance forassociated price risks, it is possible that our derivative instruments will be ineffective at mitigating material changes in prices, which could have an adverse impact on our financial position and results of operations. At the inception and on an ongoing basis, we assess the hedging activities,relationship to certain of our physical forward sales and purchase contracts. While these contracts are considered derivative instruments under the guidance for derivative instruments and hedging activities, they are not recorded atdetermine its effectiveness in offsetting changes in cash flows or fair value but rather are recorded in our consolidated financial statements when physical settlement of the contracts occurs. If it is determined that a transaction designated as NPNS no longer meets the scope of the exception, the fair value of the related contract is recorded as an asset or liability on the consolidated balance sheets and the difference between the fair value and the contract amount is immediately recognized through earnings.Our derivatives that are subjectattributable to the accounting guidance forhedged risk.Our derivative instrumentscontracts are recognized at their estimated fair market value in accordance with the accounting guidance for fair value measurements. The fair value of our derivatives is derived using observable and certain unobservable inputs, such as basis differentials, which are based on the difference between the historical prices of our prior transactions and the underlying observable data. Measurement of the fair value of our derivatives also requires the assessment of certain risks related to non-performance, which requires a significant amount of judgment. The effect on our income before income taxes of a 10% change in the model input for non-performance risk would not be material to our consolidated statements of operations.If the derivative does not qualify as a hedge orinstrument is not designated as a hedge, changes in the estimated fair market value of the derivative are recognized as a component of revenue, cost of revenue or other income (expense), net (based on the underlying transaction type) in the consolidated statements of income and comprehensive income. Derivatives which qualify for hedge accounting may be designated as either a fair value or cash flow hedge. For our fair value hedges, changes in the estimated fair market value of the hedgehedging instrument and the hedged item are recognized in the same line item as a component of either revenue or cost of revenue (based on the underlying transaction type)type in the consolidated statements of income and comprehensive income. For our cash flow hedges, the effective portion of the changes in the fair market value of the hedgehedging instrument is initially recognized as a component of other comprehensive income in the shareholders’ equity section of the consolidated balance sheets and subsequently reclassified into the same line item as the underlying forecasted transaction when both are settled while theor deemed probable of not occurring. The ineffective portion of the changes in the estimated fair market value of the hedgehedging instrument is recognized in the same line item as a component of other income (expense), netthe underlying transaction type in the consolidated statements of income and comprehensive income. Cash flows for our hedging instruments used in our hedges are classified in the same category as the cash flow from the hedged items. If for any reason hedge accounting is discontinued, then any cash flows subsequent to the date of discontinuance shallwill be classified in a manner consistent with the nature of the instrument.53To qualify for hedge accounting, as either a fair value or cash flow hedge, the hedging relationship between the hedging instruments and hedged items must be highly effective over an extended period of time in achieving the offset of changes in fair values or cash flows attributable to the hedged risk at the inception of the hedge. We use a regression analysis based on historical spot prices in assessing the qualification for our fair value hedges. However, our measurement of hedge ineffectiveness for our fair value inventory hedges utilizes spot prices for the hedged item (inventory) and forward or future prices for the hedge instrument. Therefore, the excluded component (forward or future prices) in assessing hedge qualification, along with ineffectiveness, is included as a component of cost of revenue in earnings. Adjustments to the carrying amounts of hedged items are discontinued in instances where the related fair value hedging instrument becomes ineffective and any previously recorded fair market value changes are not adjusted until the fuel is sold.3.J. Property and EquipmentProperty and equipment are carried at cost less accumulated depreciation and amortization. Depreciation and amortization are calculated primarily by using the straight‑line method over the estimated useful lives of the assets. Costs of major additions and improvements are capitalized while expenditures for maintenance and repairs, which do not extend the life of the asset, are expensed. Upon sale or disposition of property and equipment, the cost and related accumulated depreciation and amortization are eliminated from the accounts and any resulting gain or loss is credited or charged to income. Long‑lived assets held and used by us are reviewed based on market factors and operational considerations for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.Purchases of computer software are capitalized. External costs and certain internal costs (including payroll and payroll‑related costs of employees) directly associated with developing significant computer software applications for internal use are capitalized. Training and data conversion costs are expensed as incurred. Computer software costs are amortized using the straight‑line method over the estimated useful life of the software.K. Goodwill and Identifiable Intangible AssetsGoodwill represents the future earnings and cash flow potential of acquired businesses in excess of the fair values that are assigned to all other identifiable assets and liabilities. Goodwill arises because the purchase price paid reflects numerous factors, including the strategic fit and expected synergies these acquisitions bring to our existing operations and the prevailing market value for comparable companies.operations. Goodwill is not subject to periodic amortization; instead, itrecorded at fair value and is reviewed at least annually at year‑endyear-end (or more frequently under certain circumstances) for impairment. We assessGoodwill is evaluated for impairment at the reporting unit level and is initially based on an assessment of qualitative factors to determine whether it is more likely than not that the fair value of any individual reporting unit is less than its carrying amount. In performingSuch events or circumstances could include a material adverse change in the qualitative assessment,markets where we assess relevant eventsoperate, similar to the current conditions within the shipping and circumstances that mayoffshore markets, limited market volatility, which adversely impact our supply and trading activities, among others.To determine whether goodwill is impaired, we would compare the fair value of ourthe reporting units includingto which goodwill was assigned to their respective carrying values to measure the following: (i) macroeconomic conditions, (ii) industryamount of goodwill impairment, if any. In calculating fair value, we use a combination of both an income and market considerations, (iii) earnings quality/sustainability, (iv) overall financial performance, (v) events affectingapproach as our primary indicator of fair value. Under the market approach we use a selection of global companies that correspond to each reporting unit (vi) share price and (vii) recent fair value calculation for our reporting units, if available. After assessingto derive a market-based multiple. Under the above described events and circumstances, ifincome approach, we determine that it is more likely than not thatcalculate the fair value of a reporting unit based on the present value of estimated future cash flows. The estimated future cash flows are based on the best information available to us at the time, including our annual operating plan, which is greater than itscompleted annually during the fourth quarter and is approved by our Board of Directors. Our estimates are considered supportable assumptions that we believe are reasonable based on information available to us at that time, and are based on a number of factors including industry experience, internal benchmarks, and the economic environment. Our cash flow estimates are discounted using rates that correspond to a weighted-average cost of capital consistent with those used internally for investment decisions.If our annual operating plan is not achieved or if there are other variations to our estimates and assumptions, particularly in the expected growth rates and profitability embedded in our cash flow projections or the discount rate used, there is the potential for a partial or total impairment of the carrying value, then no further testing is required. Otherwise,amount of goodwill within one or more of our reporting units. If we would perform the first step of quantitative testing for goodwill impairment.Periodically, we will perform the first step of quantitative testing for goodwill impairment in lieu of performingare required to impair all or a qualitative assessment. The first stepsubstantial amount of the goodwill impairment test compares the estimated fair valueattributable to one or more of aour reporting unit with its carrying value. We estimate the fair valueunits, our financial results of a reporting unit using a discounted cash flow valuation methodology.In connection with our acquisitions, we record identifiable intangible assets existing at the datefair value. The determination of the acquisitionsfair values of our identifiable intangible assets involves a significant amount of forecasting and other assumptions associated with recently acquired businesses for customer relationships, supplier and non‑compete agreements, developed technology and trademark/trade name rights.which we may not have as much historical information or trend data as we would for our existing businesses. Identifiable intangible assets subject to amortization are amortized over their estimated useful lives and are reviewed for impairment and appropriate remaining useful lives whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable based on market factors and operational considerations. Forrecoverable. We assess identifiable intangible assets not subject to amortization we first assessduring the fourth quarter of each year for potential impairment. Our impairment analysis of our intangible assets not subject to amortization (primarily trademarks and/or trade names) generally involves the use of qualitative factorsand quantitative analyses to determineestimate whether it is more likely than not that an asset has been impaired. After assessing qualitative factors, if we determine that it is more likely than not that the fair valueestimated future cash flows generated as a result of an asset isthese assets will be greater than itsor equal to the carrying value then no further testing is required. Otherwise, we would review forassigned to such assets.For information pertaining to our 2017 impairment by comparing the fair value of the intangible asset to its carrying value.L. Other InvestmentsOur other investments consist primarily of equity investments, net of basis adjustments. These investments are accounted for under the equity method as we own less than 50 percent50% of the entities and exercise significant influence over the investee, but do not have operational or financial control.54During 2014, we made other investments, aggregating to $18.0 million. Additionally, in December 2014, we sold our crude oil joint venture interests for $43.0 million in cash and future contingent payments (“operational overrides”) equal to 22.5 cents per barrel of crude oil received at the Pioneer Terminal in New Town, North Dakota, up to a maximum of 80,000 barrels per day through December 2026. At the sale closing date, the present value, based on a 9% discount rate, of the maximum operational overrides was $49.2 million. We have elected to record the operational overrides in the periods in which they are realized (when the crude oil is received at the Pioneer Terminal), and for 2014, the amount of operation overrides recorded was not significant. The purchaser has the option to pay at any time the then-present value, using a 9% discount rate, of the maximum remaining future contingent payments. For 2014, we recorded a gain on the sale of such investments of $18.1 million, which is included in other income, net in the consolidated statements of income and comprehensive income. The after-tax gain, net of certain related operating expenses was $9.9 million, or $0.14 per basic and diluted share.20142017 and 2013,2016, we had other investments of $69.5$70.9 million and $83.8$67.2 million, respectively, which are included within identifiable intangible and other non‑current assets.Extinguishment of Liabilitiesthe normal course of business,2017, we accrue liabilitiesrecorded a $9.0 million other-than-temporary impairment charge for fuel and services received for which invoices have not yet been received. These liabilities are derecognized, or extinguished, if either (i) payment is made to relieve our obligation for the liability or (ii) we are legally released from our obligation for the liability, such as when our legal obligations with respect to such liabilities lapse or otherwise no longer exist. We derecognized vendor liability accruals due to the legal release of our obligationstwo underperforming investments in the amount of $5.3 million, $8.5 million and $11.2 million during 2014, 2013 and 2012, respectively,land segment, which is reflected as a reduction of cost of revenueincluded in the accompanyinggoodwill and other impairment on our consolidated statements of income and comprehensive income.M. Revenue RecognitionWe execute contracts with customers through a variety of methods including by executing a master supply or blanket sales agreement combined with a purchase order or delivery ticket, stand-alone contracts, or through spot transactions where fuel is delivered for immediate settlement. Our contracts primarily require us to deliver fuel and fuel-related products, while other arrangements require us to complete agreed-upon services. Our contracts may contain fixed or variable pricing or some combination of those.The majority of our consolidated revenues are generated through the sale of fuel and fuel-related products. Revenue from the sale of fuel is recognized when delivery is made to our customers and title has passed, the sales price is fixed or determinable, and collectability is reasonably assured and title passes to the customer, which is when the delivery of fuel is made to our customer directly from us, the supplier or a third‑party subcontractor. assured.Our fuel sales are generated as a fuel reseller as well as from on‑hand inventory supply. When acting as a fuel reseller, we generally purchase fuel from the supplier, and contemporaneously resell the fuel to the customer, normally taking delivery for purchased fuel at the same place and time as the delivery is made to the customer.Revenue from services, including energy procurement advisory services and international trip planning support, and transaction and payment management processing, are recognized over the contract period when services have been performed and we have the right to invoice for those services.We record thefuel sales and services on a gross sale of the fuelbasis as we generally take inventory risk, have latitude in establishing the sales price, have discretion in the supplier selection, maintain credit risk and are the primary obligor in the sales arrangement.Revenue from fuel‑relatedWhether the services is recognizedhave been performed and when servicestitle and risk of loss passes to the customer are performed, the sales price is fixed orfactors we take into consideration in deciding when to recognize revenue. These factors are readily determinable and collectability is reasonably assured. We record the sale of fuel‑related services on a gross basis asconsistently applied throughout our business. Therefore, we generally have latitude in establishing the sales price, have discretion in supplier selection, maintain credit risk and are the primary obligor in the sales arrangement.Commission from fuel broker services is recognized when services are performed and collectability is reasonably assured. When acting as a fuel broker, we are paid a commission by the supplier.Revenue from card payment and processing transactions is recognized at the time the purchase is made by the customer using the charge card. Revenue from charge card transactions is generated from processing fees.Vendor and Customer Rebates and Branding AllowancesWe receive vendor rebates and branding allowances from a number of our fuel suppliers. Typically, a portion of the rebates and allowances is passed onnot needed to our customers under the same terms as required by our fuel suppliers. Generally, volume rebates are received from vendors under structured programs based on the level of fuel purchasedmake material estimates or sold as specified in the applicable vendor agreements. Many of the vendor agreements require repayment of all or a portion of the amount received if we (or our customers, typically branded dealers) electassumptions with respect to discontinue selling the specified brand of fuel at certain locations. As of December 31, 2014, the estimated amount of fuel rebates and branding allowances that would have to be repaid upon de‑branding at these locations, net of the amount due to us from the branded dealers under similar agreements between us and such dealers were not significant. No liability is recorded for the amount of obligations which would become payable upon de‑branding.Some of these vendor rebate and branding allowance arrangements require that we make assumptions and judgments regarding, for example, the likelihood of attaining specified levels of purchases or selling specified volume of products. We routinely review the relevant, significant factors and make adjustments when the facts and circumstances dictate that an adjustment is warranted.55Vendor volume rebates are recognized as a reduction of cost of revenue in the period earned when realization is probable and estimatable and when certain other conditions are met. The rebates passed on to our customers are recognized as a reduction of revenue in the period earned in accordance with the applicable customer agreements. The rebate terms of the customer agreements are generally similar to those of the vendor agreements. We also receive branding allowances from fuel suppliers to defray the costs of branding and enhancing certain of our customer locations. The branding allowances received are recorded as a reduction of cost of revenue. The amounts recorded as a reduction of revenue related to volume rebates and branding allowance arrangements paid to our customers and the amounts recorded as a reduction to cost of revenue related to volume rebates received from vendors were not significant during each of the years presented on the consolidated statements of income and comprehensive income.N. Share‑Based Payment AwardsWe account for share‑based payment awards on a fair value basis. Under fair value accounting, the grant‑date fair value of the share‑based payment award is amortized as compensation expense, on a straight‑line basis, over the vesting period for both graded and cliff vesting awards. Annual compensation expense for share‑based payment awards is reduced by an expected forfeiture amount on outstanding share‑based payment awards.The We utilize our historical forfeiture rates to calculate future expected forfeitures. These estimates can vary significantly from actual forfeiture rates experienced. Our estimated fair value of stock awards, such as restricted stock and restricted stock units (“RSUs”) is based on the grant‑date market value of our common stock, as defined in the respective plans under which the awards were granted. To determine the estimated fair value of stock‑settled stock appreciation rights (“SSAR Awards”), we use the Black‑Scholes option pricing model. The estimation of the fair value of SSAR Awards on the date of grant using an option‑pricing model is affected by our stock price as well as assumptions regarding a number of complex and subjective variables. These variables include our expected stock price volatility over the term of the awards,forfeiture rates have historically approximated actual and projected employee stock option exercise behaviors, risk‑ free interest rates and expected dividends. The expected term of SSAR Awards represents the estimated period of time from grant until exercise or conversion and is based on vesting schedules and expected post‑vesting, exercise and employment termination behavior. Expected volatility is based on the historical volatility of our common stock over the period that is equivalent to the award’s expected life. Any adjustment to the historical volatility as an indicator of future volatility would be based on the impact to historical volatility of significant non‑recurring events that would not be expected in the future. Risk‑free interest rates are based on the U.S. Treasury yield curve at the time of grant for the period that is equivalent to the award’s expected life. Dividend yields are based on the historical dividends of World Fuel over the period that is equivalent to the award’s expected life, as adjusted for stock splits.Cash flows from income tax benefits resulting from income tax deductions in excess of the compensation cost recognized for share‑based payment awards (excess income tax benefits) are classified as financing cash flows. These excess income tax benefits are credited to capital in excess of par value.O. Foreign CurrencyThe functional currency of our U.S. and foreign subsidiaries is the U.S. dollar, except for certain subsidiaries which utilize their respective local currency as their functional currency. Foreign currency transaction gains and losses are recognized upon settlement of foreign currency transactions. In addition, for unsettled foreign currency transactions, foreign currency translation gains and losses are recognized for changes between the transaction exchange rates and month‑end exchange rates. Foreign currency transaction gains and losses are included in other income (expense), net, in the accompanying consolidated statements of income and comprehensive income in the period incurred. We recorded net foreign currency transaction losses of $1.0 million and $2.8 million in 2014 and 2013, respectively, and a gain of $0.1 million in 2012.Revenues and expenses of the subsidiaries that have a functional currency other than the U.S. dollar have been translated into U.S. dollars at average exchange rates prevailing during the period. The assets and liabilities of these subsidiaries have been translated at the rates of exchange on the balance sheet dates. The resulting translation gain and loss adjustments are recorded in accumulated other comprehensive income as a separate component of shareholders’ equity. We recorded net foreign currency translation adjustment losses of $30.8 million, $13.2 million and $9.6 million in 2014, 2013 and 2012, respectively. Cumulative foreign currency translation adjustments included in accumulated other comprehensive income amounted to losses of $60.1 million and $29.3 million as of December 31, 2014 and 2013, respectively.P. Income TaxesIncome taxes are accounted for under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and operating loss and income tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in income tax rates is recognized inrecorded as a component of the income tax provision in the period that includes the enactment date.56We must assessRegular assessments are made on the likelihood that our deferred tax assets will be recovered from our future taxable income. Our evaluation is based on estimates, assumptions, and includes an analysis of available positive and negative evidence, giving weight based on the evidence’s relative objectivity. Sources of positive evidence include estimates of future taxable income, future reversal of existing taxable temporary differences, taxable income in carryback years, and available tax planning strategies. Sources of negative evidence include current and cumulative losses in recent years, losses expected in early future years, any history of operating losses or tax credit carryforwards expiring unused, and unsettled circumstances that, if unfavorably resolved, would adversely affect future profit levels.The remaining carrying value of our deferred tax assets, after recording the valuation allowance on our deferred tax assets, is based on our present belief that it is more likely than not that we will be able to generate sufficient future taxable income in certain tax jurisdictions to utilize such deferred tax assets. The amount of the remaining deferred tax assets considered recoverable could be adjusted if our estimates of future taxable income during the carryforward period change favorably or unfavorably. To the extent we believe that recoveryit is more likely than not likely,that some or all of the remaining deferred tax assets will not be realized, we must establish a valuation allowance against those deferred tax assets. Deferred tax liabilities generally represent items for which we have already taken a deductionassets, resulting in ouradditional income tax return, butexpense in the period such determination is made. To the extent a valuation allowance currently exists, we havewill continue to monitor all positive and negative evidence until we believe it is more likely than not yet recognizedthat it is no longer necessary, resulting in an income tax benefit in the items as expenses in our results of operations.Significant judgment is required in evaluating our tax positions, and in determining our provisions for income taxes, our deferred tax assets and liabilities and any valuation allowance recorded against our net deferred tax assets. We establish reserves when, despite our belief that the income tax return positions are fully supportable, certain positions are likely to be challenged and we may ultimately not prevail in defending those positions.U.S. income taxes have not been recognized on undistributed earnings of foreign subsidiaries. Our intention is to reinvest these earnings permanently in active non‑U.S. business operations. Therefore, no income tax liability has been accrued for these earnings. Because of the availability of U.S. foreign tax credits, it is not practicable to determine the amount of U.S. income tax payable if such earnings are not reinvested indefinitely.Q. Earnings per Common ShareBasic earnings per common share is computed by dividing 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.stock. Diluted earnings per common share is computed by dividing 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. Potentially dilutive securities include restricted stock subject to forfeitable dividends, non‑vested RSUs and SSAR Awards. The dilutive effect of potentially dilutive securities is reflected in diluted earnings per common share by application of the treasury stock method. Under the treasury stock method, an increase in the fair market value of our common stock can result in a greater dilutive effect from potentially dilutive securities.The following table sets forth the computation of basic and diluted earnings per common share for the periods presented (in thousands,millions, except per share amounts):2014 2013 2012 2017 2016 2015 221,747 203,075 189,345 Net income (loss) attributable to World Fuel $ (170.2 ) $ 126.5 $ 174.5 70,750 71,224 71,154 68.1 69.3 70.2 573 576 663 — 0.5 0.5 71,323 71,800 71,817 68.1 69.8 70.7 881 594 603 1.4 1.3 1.0 3.13 2.85 2.66 3.11 2.83 2.64 Basic earnings (loss) per common share $ (2.50 ) $ 1.82 $ 2.49 Diluted earnings (loss) per common share $ (2.50 ) $ 1.81 $ 2.47 ReclassificationsCertain amounts in prior years have been reclassified to conform to current year’s presentation.Recent Accounting PronouncementsIncome Statement-Extraordinary and Unusual Items: Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items. In January 2015, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) which eliminates from generally accepted accounting principles in the United States the concept of extraordinary items. This update is effective at the beginning of our 2016 fiscal year. We do not believe the adoption of this new guidance will have a significant impact on our consolidated financial statements and disclosures.Business Combinations: Pushdown Accounting. In November 2014, the FASB issued an ASU which provides guidance for determining whether and at what threshold an acquired entity can apply pushdown accounting in its separate financial statements. This update became effective on November 18, 2014. The adoption of this ASU did not have a significant impact on our consolidated financial statements and disclosures.Derivatives and Hedging: Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity. In November 2014, the FASB issued an ASU which clarifies how current generallyaccepted accounting principles in the United States should be interpreted in evaluating the economic characteristics and risks of a host contract in a hybrid financial instrument that is issued in the form of a share. This update is effective at the beginning of our 2016 fiscal year. We do not believe the adoption of this new guidance will have a significant impact on our consolidated financial statements and disclosures.Presentation of Financial Statements-Going Concern: Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. In August 2014, the FASB issued an ASU which requires management of the Company to evaluate whether there is substantial doubt about the Company’s ability to continue as a going concern. This update is effective at the beginning of our 2017 fiscal year. We do not expect the adoption of this new guidance to have an impact on our financial statement disclosures.Compensation-Stock Compensation. Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. In June 2014, the FASB issued an ASU which includes guidance that requires a performance target that affects vesting and that could be achieved after the requisite service period to be treated as a performance condition. This update is effective at the beginning of our 2016 fiscal year. We do not believe the adoption of this new guidance will have a significant impact on our consolidated financial statements and disclosures.Transfers and Servicing: Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures. In June 2014, the FASB issued an ASU which changes the accounting for repurchase-to-maturity transactions and repurchase financing arrangements. It also requires additional disclosures about repurchase agreements and other similar transactions. This update is effective at the beginning of our 2015 fiscal year. We do not believe the adoption of this new guidance will have a significant impact on our consolidated financial statements and disclosures.Revenue from Contracts with Customers. In May 2014, the FASB issued an ASU which provides guidance for revenue recognition for any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of non-financial assets. The ASU will replace most existing revenue recognition guidance in generally accepted accounting principles in the United States when it becomes effective. This update is effective at the beginning of our 2017 fiscal year. We are currently evaluating whether the adoption of this new guidance will have a significant impact on our consolidated financial statements and disclosures.Presentation of Financial Statements and Property, Plant, and Equipment: Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. In April 2014, the FASB issued an ASU which changes the criteria for reporting discontinued operations and enhances disclosures in this area. It also addresses sources of confusion and inconsistent application related to financial reporting of discontinued operations guidance. This update is effective at the beginning of our 2015 fiscal year. We do not believe the adoption of this new guidance will have a significant impact on our consolidated financial statements and disclosures.Presentation of an Unrecognized Tax Benefit When a Net Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. In July 2013, the FASB issued an ASU on the presentation of an unrecognized tax benefit when a net operating loss carryforward exists. Under this guidance, an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward. This update became effective at the beginning of our 2014 fiscal year. The adoption of this ASU did not have a significant impact on our consolidated financial statements and disclosures.Foreign Currency Matters Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Foreign Subsidiaries. In March 2013, the FASB issued an ASU aimed at resolving the diversity in practice of accounting for the release of the cumulative translation adjustment into net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business within a foreign entity. In addition, the amendments in this ASU resolve the diversity in practice for the treatment of business combinations achieved in stages (sometimes also referred to as step acquisitions) involving a foreign entity. This update became effective at the beginning of our 2014 fiscal year. The adoption of this ASU did not have a significant impact on our consolidated financial statements and disclosures.Disclosure Obligations Resulting from Joint and Several Liability Arrangements. In February 2013, the FASB issued an ASU clarifying the guidance for the recognition, measurement and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this ASU is fixed at the reporting date, except for obligations addressed within existing guidance in U.S. GAAP. This update became effective at the beginning of our 2014 fiscal year. The adoption of this ASU did not have a significant impact on our consolidated financial statements58and disclosures.We had accounts receivable of $2.3$2.7 billion and $2.5$2.3 billion, net of an allowance for bad debt of $25.7$27.8 million and $29.2$24.9 million, as of December 31, 20142017 and 2013,2016, respectively. Accounts receivable are written‑offwritten-off when it becomes apparent based upon age or customer circumstances that such amounts will not be collected.We have Receivables Purchase Agreements (“RPAs”) with Wells Fargo and Citibank, that allows for the sale of our accounts receivable, in an amount equal to either 90% or 100%, depending on the customer, of total balance, less a discount margin equivalent to LIBOR plus 1% to 3% and certain other fees, as applicable. Receivables sold under the RPAs are excluded from accounts receivable, net on the accompanying consolidated balance sheet. Under the terms of the RPAs, we retain a beneficial interest in certain of the sold accounts receivable of 10%, which is included in accounts receivable, net in the accompanying consolidated balance sheet. Fees and interest paid under the RPAs is recorded within "Interest expense and other financing costs, net" in the Consolidated Statements of Comprehensive Income.We had sold accounts receivable of $377.3 million and $235.5 million under the RPAs, as of December 31, 2017 and 2016, respectively. In addition, we have a $15.9 million and $11.4 million retained beneficial interest in the transferred receivables as of December 31, 2017 and 2016, respectively. The fees and interest paid under the RPA were $12.4 million, $4.8 million, and $2.8 million, for 2017, 2016 and 2015, respectively. Under the RPAs, we sold $6.1 billion and $3.0 billion of accounts receivable during 2017 and 2016, respectively and collected $5.9 billion and $2.9 billion of accounts receivables during 2017 and 2016, respectively.The following table sets forth activities in our allowance for bad debt (in thousands)millions):2014 2013 2012 2017 2016 2015 29,188 23,719 24,301 $ 24.9 $ 25.0 $ 25.7 3,757 11,745 4,790 9.3 15.4 7.5 (8,074) (6,940) (6,025) (8.7 ) (15.9 ) (8.3 ) 821 664 653 2.0 0.3 0.5 Translation Adjustments 0.3 0.2 (0.4 ) 25,692 29,188 23,719 $ 27.8 $ 24.9 $ 25.0 Included3. Acquisitions and Divestitures2017 AcquisitionsDuring the first quarter of 2017, we completed the acquisition of certain aviation fueling operations in accounts receivableItaly, Germany, Australia and New Zealand associated with the ExxonMobil transaction, further described below. We also completed five acquisitions during 2017 which were not material individually or in the aggregate.The following table summarizes the aggregate consideration paid for acquisitions during 2017 and the provisional amounts of the assets acquired and liabilities assumed, recognized at the acquisition date. We are in the process of finalizing the valuations of certain intangible assets; thus, the provisional measurements of these acquired assets and assumed liabilities are subject to change and will be finalized no later than one year from the acquisition date.(In millions) Cash paid for acquisition of businesses, net of cash acquired $ 108.2 Cash and cash equivalents 4.5 Amounts due to sellers 0.7 Non-monetary consideration 4.2 Estimated purchase price $ 117.6 Assets acquired: Cash and cash equivalents $ 4.5 Property and equipment 10.6 Goodwill and identifiable intangible assets 105.2 Other current and long-term assets 10.2 Liabilities assumed: Accrued expenses and other current liabilities (3.7 ) Long-term liabilities and deferred tax liabilities (9.1 ) Estimated purchase price $ 117.6 In connection with the 2017 acquisitions, we recorded goodwill of $63.5 million, of which $29.5 million is anticipated to be deductible for tax purposes. The goodwill, of which $51.3 million and $12.2 million is assigned to the aviation segment and land segment, respectively, is attributable primarily to the expected synergies and other benefits that we believe will result from combining the operations of the acquired businesses with the operations of World Fuel Services' aviation and land segments. The identifiable intangible assets consist of $41.7 million of customer relationships with weighted average lives of 8.0 years.The financial position, results of operations and cash flows of the 2017 acquisitions have been included in our consolidated financial statements since their respective acquisition dates and did not have a retained beneficial interestmaterial impact on our consolidated revenue and net income for 2017. Accordingly, pro forma information for the 2017 acquisitions has not been provided as the impact is not material.2016 AcquisitionsExxonMobilIn the first quarter of 2016, we signed a definitive agreement to acquire from certain ExxonMobil affiliates their aviation fueling operations at more than 80 airport locations in Canada, the United Kingdom, Germany, Italy, France, Australia and New Zealand. The transaction closed in phases with the Canada, France and U.K. locations closing during the fourth quarter of 2016 and the remaining locations closing during the first quarter of 2017.On July 1, 2016, we acquired all of the outstanding capital stock of PAPCO, Inc. (“PAPCO”) and Associated Petroleum Products, Inc. (“APP”). PAPCO, headquartered in Virginia Beach, Virginia and APP, headquartered in Tacoma, Washington are leading distributors of gasoline, diesel, lubricants, propane and related services in the Mid-Atlantic and the Pacific Northwest region of the U.S., respectively.In addition to accounts receivable sold underthe above acquisitions, we completed six acquisitions in our receivablesland segment in 2016 which were not material individually or in the aggregate.The following table summarizes the aggregate consideration paid for the 2016 acquisitions and the amounts of the assets acquired and liabilities assumed recognized at the acquisition date. The purchase agreements.price allocation for the 2016 acquisitions is as follows:(In millions) Cash paid for acquisition of businesses, net of cash acquired $ 424.3 Cash acquired 2.6 Amounts due to sellers 20.0 Purchase price $ 446.9 Assets acquired: Cash and cash equivalents $ 2.6 Accounts and notes receivable 62.8 Inventories 39.0 Property and equipment 100.3 Goodwill and identifiable intangible assets 291.9 Other current and long-term assets 14.8 Liabilities assumed: Accrued expenses and other current liabilities (61.0 ) Non-current income tax liabilities and other long term liabilities (3.5 ) Purchase price $ 446.9 In connection with the 2016 acquisitions, we recorded goodwill of $173.3 million of which $133.4 million is anticipated to be deductible for tax purposes. The retained beneficial interest wasgoodwill, of which $95.6 million and $77.7 million is assigned to the aviation segment and land segment, respectively, is attributable primarily to the expected synergies and other benefits that we believe will result from combining the operations of the acquired businesses with the operations of World Fuel Services' land and aviation segments. The identifiable intangible assets consisted of $105.1 million of customer relationships and $3.9 million of other identifiable intangible assets with weighted average lives of 5.6 years and 2.1 years, respectively, as well as $9.5 million of indefinite-lived trademark/trade name rights.The following presents the unaudited pro forma results for 2016 and 2015 as if 2016 and 2015 acquisitions had been completed on January 1, 2015: 2016 2015 (pro forma) (pro forma) Revenue $ 27,925.0 $ 32,604.4 Net income attributable to World Fuel $ 146.1 $ 202.0 Earnings per common share: Basic $ 2.11 $ 2.88 Diluted $ 2.09 $ 2.86 The financial position, results of operations and cash flows of the 2016 acquisitions have been included in our consolidated financial statements since their respective acquisition dates and did not significant as ofhave a material impact on our revenue and net income for the year ended December 31, 20142016.Tobras Distribuidora de Combustiveis LimitadaOn June 23, 2016, we acquired the remaining 49% of the outstanding equity interest of Tobras from the minority owners for an aggregate purchase price of approximately $3.7 million in cash (the “Tobras Acquisition”). Prior to the Tobras Acquisition, we owned 51% of the outstanding shares of Tobras and 2013.3. Derivatives4. Derivative InstrumentsThe following describes our derivative classifications:Cash Flow Hedges. Includes certain of our foreign currency forwardderivative contracts we enter into in orderexecute to mitigate the risk of currency exchange rate fluctuations.Fair Value Hedges. Includes derivativesderivative contracts we enter into in orderhold to hedge the risk of changes in the price risk associated withof our inventory and certain firm commitments relating to fixed price purchase and sale contracts.Non-designated Derivatives. Includes derivatives we primarily enter into in ordertransact to mitigate the risk of market price fluctuations in aviation, marine and land fuel in the form of swapsswap or futures contracts as well as certain forward fixed price purchase and sale contracts, and proprietary trading.for portfolio optimization. In addition, non-designated derivatives are also entered intoheld to hedge the risk of currency rate fluctuations.For additional information on our derivatives accounting policy, see Note 1.59As of December 31, 2014, our derivative instruments, at their respective fair value positions were as follows (in thousands, except weighted average fixed price and weighted average mark‑to‑market amount):305 74.110 (3.203) (977) 4,977 77.510 4.599 22,889 21,912 34,192 62.693 (15.594) (533,192) 27,013 83.370 20.735 560,114 1,131 89.989 (23.195) (26,234) 722 85.497 17.734 12,804 92 46.463 (6.696) (616) 109 54.430 7.743 844 1 25.922 (4.000) (4) 11 83.997 21.636 238 28,783 0.850 0.005 158 471 2.580 (0.013) (6) 61,577 1.140 0.020 1,215 112 0.960 0.036 4 4,764,256 602.490 0.000 27 31,884,747 2,174.000 0.000 408 126,778 5.950 0.001 64 77,278 1.250 0.019 1,464 208,786 1.610 0.023 4,903 135,879 63.040 0.000 24 1,390,740 113.080 0.000 295 2,382,533 13.920 (0.000) (321) 214,957 6.720 0.001 253 7,912 3.400 0.016 125 32,891 3.570 0.014 452 46,921 1.300 0.004 176 78,298 11.310 0.001 41 8,325 1.620 0.055 459 1,400 1.610 0.033 46 23,741 60information aboutthe gross fair value of our derivative instruments measured at fair value at their gross amounts and their locations on the consolidated balance sheets (in thousands)millions):2014 2013 Gross Derivative Assets Gross Derivative Liabilities As of December 31, As of December 31, Derivative Instruments Balance Sheet Location 2017 2016 2017 2016 Derivatives designated as hedging instruments 18,844 735 Short-term derivative assets, net $ 0.4 $ 2.2 $ 0.5 $ 5.4 4,709 Identifiable intangible and other non-current assets — — — — Accrued expenses and other current liabilities 2.3 86.0 43.1 93.5 Other long-term liabilities — 5.1 — 10.1 Total derivatives designated as hedging instruments Total derivatives designated as hedging instruments $ 2.7 $ 93.3 $ 43.6 $ 108.9 23,553 735 Derivatives not designated as hedging instruments 398,924 47,062 Commodity contracts Short-term derivative assets, net $ 191.4 $ 160.3 $ 123.3 $ 86.7 12,063 1,642 234,077 1,141 4,849 874 21,244 5,003 513 Identifiable intangible and other non-current assets 18.2 17.1 5.2 6.2 Accrued expenses and other current liabilities 86.1 52.5 138.2 112.2 Other long-term liabilities 5.2 8.1 13.5 12.1 $ 300.9 $ 238.0 $ 280.2 $ 217.2 3,483 Foreign currency contracts Short-term derivative assets, net $ 4.5 $ 13.5 $ 2.8 $ 3.4 671,670 59,205 Identifiable intangible and other non-current assets — 0.9 — 0.1 695,223 59,940 Accrued expenses and other current liabilities 3.9 1.6 5.7 2.8 978 1,544 663 1,641 1,544 76,103 26,876 594 894 529,976 15,473 29,286 1,228 11,961 2,867 9 8,789 147 647,929 56,274 Other long-term liabilities — 0.2 649,570 57,818 $ 8.5 $ 16.0 $ 8.7 $ 6.4 Total derivatives not designated as hedging instruments Total derivatives not designated as hedging instruments $ 309.4 $ 253.9 $ 288.9 $ 223.6 Total derivatives $ 312.0 $ 347.2 $ 332.5 $ 332.5 For information regarding our derivative instruments measured at fair value after netting and collateral and their locations on the consolidated balance sheets, see Note 10.The following tables presenttable summarizes the gross notional values of our commodity and foreign currency exchange derivative contracts used for risk management purposes that were outstanding as of December 31, 2017 (in millions):As of December 31, Derivative Instruments Units 2017 Commodity contracts Buy / Long BBL 66.5 Sell / Short BBL (75.9 ) Foreign currency exchange contracts Sell U.S. dollar, buy other currencies USD (255.8 ) Buy U.S. dollar, sell other currencies USD 485.5 For additional information about our use of derivative instruments, see Item 7A. Quantitative and Qualitative Disclosures About Market Risk.The following table presents the effect of and financial statement location of our derivative instruments and related hedged items in fair value hedging relationships on our consolidated statements of income and comprehensive income (in thousands)millions):2014 2013 2012 2014 2013 2012 265 (201) (1,417) 739 Realized and Unrealized Gain (Loss) Realized and Unrealized Gain (Loss) For the Year Ended Realized and Unrealized Gain (Loss) For the Year Ended December 31, December 31, Derivative Instruments Location 2017 2016 2015 Hedged Items Location 2017 2016 2015 132,199 2,685 (19,717) (150,943) 3,059 23,972 Inventories 132,199 2,685 (20,869) (150,943) 3,059 24,510 Revenue $ — $ — $ 49.3 Revenue $ — $ — $ — Cost of revenue (35.7 ) (25.3 ) 37.5 Cost of revenue 13.0 10.8 (70.7 ) Total gain (loss) Total gain (loss) $ (35.7 ) $ (25.3 ) $ 86.8 Total gain (loss) $ 13.0 $ 10.8 $ (70.7 ) We recognized net losses in income representing hedge ineffectiveness of $22.7 million and $14.5 million for the years ended December 31, 2017 and 2016, respectively, and net gains of $16.1 million for the year ended December 31, 2015. There were no gains or losses for the year ended December 31, 2014, 20132017, 2016 and 20122015 that were excluded from the assessment of the effectiveness of our fair value hedges.There were noThe following table presents the effect and financial statement location of our derivative instruments in cash flow hedging activities during 2014relationships on our accumulated other comprehensive income and consolidated statements of income and comprehensive income (in millions):Amount of Gain (Loss) Recognized in Accumulated Other Comprehensive Income (Effective Portion) For the Year Ended Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Effective Portion) For the Year Ended December 31, December 31, Derivative Instruments 2017 2016 2015 Location 2017 2016 2015 Commodity contracts $ (7.8 ) $ (145.8 ) $ 106.5 Revenue $ (41.3 ) $ 18.1 $ 7.2 Commodity contracts (0.1 ) 178.1 (105.4 ) Cost of revenue 33.7 20.8 (5.3 ) Total gain (loss) $ (7.9 ) $ 32.3 $ 1.0 Total gain (loss) $ (7.6 ) $ 38.8 $ 1.8 Amount of Gain (Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)For the Year Ended December 31, Location 2017 2016 2015 Revenue $ 0.7 $ (13.7 ) $ 28.6 Cost of revenue (15.4 ) 9.4 (17.8 ) Total gain (loss) $ (14.8 ) $ (4.4 ) $ 10.8 The effective portion of the gains or losses on derivative instruments designated as cash flow hedging activities during 2013 were not significant.61forecasted transactions are initially reported as a component of accumulated other comprehensive income and subsequently reclassified into earnings once the future transaction affects earnings.The following table presents the effect and financial statement location of our derivative instruments not designated as hedging instruments on our consolidated statements of income and comprehensive income (in thousands)millions):2014 2013 2012 Amount of Realized and Unrealized Gain (Loss) For the Year Ended December 31, Derivative Instruments - Non-designated Location 2017 2016 2015 64,485 25,420 14,967 Commodity contracts 2,239 (5,391) 3,333 4,286 (55) (2,384) Revenue $ (0.5 ) $ 29.7 $ 171.7 Cost of revenue 62.3 (31.6 ) (139.0 ) $ 61.8 $ (1.9 ) $ 32.7 12,631 (3,998) (2,271) Foreign currency contracts 83,641 15,976 13,645 Revenue $ (3.2 ) $ 10.0 $ 4.1 Other (expense) income, net (7.8 ) (0.8 ) 9.5 $ (11.0 ) $ 9.2 $ 13.6 Total gain $ 50.8 $ 7.3 $ 46.3 Credit-Risk-Related Contingent FeaturesWe enter into derivative instrument contracts which may require us to periodically post collateral.collateral periodically. Certain of these derivative contracts contain clauses that are similar to credit-risk-related contingent features, including material adverse change, general adequate assurance and internalclauses which are triggered by credit review clauses thatevents. These credit events may requireinclude the requirement to post additional collateral to be posted and/or the immediate settlement of the derivative instruments upon the occurrence of a credit downgrade or if certain defined financial ratios fall below an established threshold. The following table presents the potential collateral requirements for derivative liabilities with credit-risk-contingent features (in millions): Potential Collateral Requirements forDerivative Liabilities withCredit-Risk-Contingent Features As of December 31, 2017 2016 Net derivative liability positions with credit contingent features $ 11.8 $ 15.2 Maximum potential collateral requirements $ 11.8 $ 15.2 At December 31, 2017 and 2016, there was no collateral held by our counterparties on these derivative contracts with credit-risk-contingent features.5. Restructuring ChargesDuring the fourth quarter of 2017, we began an enterprise-wide restructuring plan that is designed to streamline the organization, and reallocate resources to better align our organizational structure and costs with our strategy. While these activities are ongoing, we expect the majority of these activities to be completed over the course of 2018, and based on activities being reviewed, we cannot reasonably estimate the ultimate cost that will be incurred. Specifically, as the restructuring plan involves reviewing non-core businesses and assets, our organizational structure, and expected commercial opportunities in the eventmarkets we serve. We will also consider our existing technology platforms, specifically with an aforementioned clause is triggered. The triggering events are notaim to more fully integrate recent acquisitions and increase associated profit contribution.During the fourth quarter, we incurred $59.6 million in restructuring charges, comprised primarily of costs associated with exiting certain business lines, including completely exiting the railcar business, exiting a quantifiable measure; rather they are based on good faithlow return capital-intensive distributor program within the land segment, approximately $26.0 million non-cash impairment charge related to notes due from certain of those preferred distributors and reasonable determination by the counterparty that the triggers have occurred. employee and facility-related costs. As of December 31, 2014,2017, approximately $32.0 million of total restructuring charges is included in accrued expenses and other current liabilities on our consolidated balance sheet.A summary of the net liability position for such contracts is $111.7 million, the collateral posted is $89.4 million and the amount of assets required to be posted and/or to settle the positions should a credit-risk contingent feature be triggered is $22.3 million. As of December 31, 2013, the net liability position for derivative instrument contracts that contain credit-risk contingent features was not significant.4.restructuring charges we recorded by segment, are as follows: Aviation Land Marine Corporate Consolidated Business line exit costs $ — $ 50.3 $ — $ — $ 50.3 Employee and facility-related 0.9 2.1 1.4 5.1 9.4 Restructuring charges $ 0.9 $ 52.4 $ 1.4 $ 5.1 $ 59.6 6. Property and EquipmentThe amount of property and equipment and their respective estimated useful lives are as follows (in thousands, except estimated useful lives)millions): As of December 31, Estimated 2014 2013 2017 2016 Useful Lives 17,333 4,653 $ 28.0 $ 27.4 Indefinite 43,356 20,299 87.2 87.3 3 - 40 years 13,636 8,629 15.5 15.4 3 - 7 years 102,713 88,077 169.4 140.7 3 - 9 years 132,469 92,364 246.5 217.5 3 - 40 years 309,507 214,022 546.6 488.3 106,791 84,337 216.8 177.1 202,716 129,685 $ 329.8 $ 311.2 For 2014, 20132017, 2016 and 2012,2015, we recorded depreciation expense of $30.3$44.1 million, $22.0$42.5 million and $18.6$35.1 million, respectively.The amount of computer software costs, including capitalized internally developed software costs are as follows (in thousands)millions):As of December 31, 2014 2013 2017 2016 76,870 67,366 $ 108.0 $ 94.5 45,234 35,499 80.3 69.5 31,636 31,867 $ 27.7 $ 25.0 Included in capitalized computer software costs are costs incurred in connection with software development in progress of $4.7$27.6 million and $6.0$12.5 million as of December 31, 20142017 and 2013,2016, respectively. For 2014, 20132017, 2016 and 2012,2015, werecorded amortization expense related to computer software costs of $9.8$11.0 million, $7.8$13.7 million and $7.2$10.7 million, respectively.62thousands)millions):As of December 31, 2014 2013 2017 2016 17,658 5,268 $ 25.5 $ 24.4 5,484 1,869 16.0 8.2 12,174 3,399 $ 9.5 $ 16.2 5. 7.Goodwill and Identifiable Intangible AssetsIn 2014,2017, we performed the first stepused a combination of qualitative and quantitative testingfactors to review goodwill and identifiable intangible assets for goodwill impairment for all of our reporting units and we assessed qualitative factors to review our identifiable intangible assets not subject to amortization to determine whether it was more likely than not that an asset has been impaired.units. As a result of performing the aforementionedthese assessments, we determined that norecorded an impairment existed ascharge of December 31, 2014$80.2 million, of which $72.3 million was attributable to the write-off of goodwill in our marine segment, and therefore, there were no write‑downs to any of our goodwill or identifiable$7.9 million associated with intangible assets, not subjectprimarily customer relationships in both the marine and land segments. The impairment within our marine segment was driven principally by growing competitive pressures in maritime markets, including the decline of maritime shipping volumes along with lower demand for price risk management products and our ultimate decision in the fourth quarter to amortization.GoodwillThe following table provides information regarding changes in goodwill (in thousands)millions):109,332 69,931 291,243 470,506 16,077 16,077 6,500 (8,506) (2,006) (325) (843) 182 (986) 115,507 69,088 298,996 483,591 62,770 4,660 113,253 180,683 411 411 (134) (680) (7,793) (8,607) 178,143 73,068 404,867 656,078 AviationSegment LandSegment MarineSegment Total As of December 31, 2015 $ 173.7 $ 430.7 $ 71.4 $ 675.8 2016 acquisitions95.6 77.7 — 173.3 Adjustment of purchase price allocations 1.3 5.5 0.1 6.9 Foreign currency translation of non-USD functional currency subsidiary goodwill (3.7 ) (17.3 ) 0.7 (20.3 ) As of December 31, 2016 266.8 496.7 72.3 835.8 2017 acquisitions 51.2 12.2 — 63.5 Adjustment of purchase price allocations 6.2 (0.1 ) — 6.0 Impairment charge — — (72.3 ) (72.3 ) Foreign currency translation of non-USD functional currency subsidiary goodwill 2.7 9.8 — 12.5 As of December 31, 2017 $ 326.9 $ 518.5 $ — $ 845.5 Identifiable Intangible AssetsThe following table provides information about our identifiable intangible assets (in thousands)millions):As of December 31, 2017 As of December 31, 2016 Gross
Carrying
Amount Accumulated
Amortization (1) Net Gross
Carrying
Amount Accumulated
Amortization (1) Net 238,959 104,367 134,592 188,276 79,688 108,588 Customer relationships (2)$ 373.8 $ 171.4 $ 202.4 $ 353.8 $ 155.5 $ 198.3 33,648 9,052 24,596 33,648 7,310 26,338 38.7 15.4 23.4 38.7 13.3 25.4 33,750 11,308 22,442 19,738 8,634 11,104 40.0 26.3 13.7 37.2 20.2 17.0 306,357 124,727 181,630 241,662 95,632 146,030 452.5 213.1 239.4 429.7 189.1 240.7 31,961 31,961 21,172 21,172 40.3 40.3 41.7 41.7 338,318 124,727 213,591 262,834 95,632 167,202 $ 492.9 $ 213.1 $ 279.7 $ 471.4 $ 189.1 $ 282.3 (1) Includes the impact of foreign exchange(2) Reflects recorded impairment charges for 2017 of $4.1 million and $3.0 million in our Marine and Land segments, respectively, which is presented in "Goodwill and other impairments" on our Consolidated Statement of Income.Intangible amortization expense for 2014, 20132017, 2016 and 20122015 was $29.1$41.9 million, $22.4$39.7 million and $18.1$30.4 million, respectively.63thousands)millions):Year Ended December 31, 28,770 26,109 22,456 19,643 $ 41.0 16,271 34.5 2020 29.9 2021 26.6 2022 23.6 68,381 83.7 181,630 $ 239.4 6.8. DebtOn January 30, 2015,As of December 31, 2017, we amended our senior revolving credit facility (“Credit Facility”) to, among other things, increase the maximum availability under thehave a Credit Facility from $1.10 billionwhich permits borrowings up to approximately $1.26 billion, with a sublimit of $400.0 million for the issuance of letters of credit and added a new $100.0 million term loan facility to our existing senior term loans (“Term Loans”), for a total amount outstanding of $341.3 million.bankers' acceptances. Under the Credit Facility, we have the right to request increases in available borrowings up to an additional $150.0$200.0 million, subject to the satisfaction of certain conditions. Additionally, theThe Credit Facility has a sublimit of $400.0 million for the issuance of letters of credit and bankers’ acceptances and matures in October 2018.2021. We had outstanding borrowings under our Credit Facility totaling $420.0$60.0 million and $200.0$325.2 million as of December 31, 20142017 and 2013,2016, respectively. Our issued letters of credit under the Credit Facility totaled $14.8$8.6 million and $7.4$8.3 million as of December 31, 20142017 and 2013,2016, respectively. We also had $241.3$835.8 million and $242.5$840.0 million in Term Loans outstanding as of December 31, 20142017 and 2013,2016, respectively. As of December 31, 20142017 and 2013,2016, the unused portion of our Credit Facility was $665.2$1.19 billion and $926.5 million, respectively. Availability under our Credit Facility is principally limited by the ratio of adjusted total debt to adjusted EBITDA, as defined in the revolving credit facility, which limits the total amount of indebtedness we may incur, and $892.6 million, respectively.Borrowings under our Credit Facility and Term Loans related to base rate loans or Eurodollar rate loans bear floating interest rates plus applicable margins. As of December 31, 2014,2017, the applicable margins for base rate loans and Eurodollar rate loans were 1.25%1.50% and 2.25%2.50%, respectively. Letters of credit issued under our Credit Facility are subjectto letter of credit fees of 2.50%0.25% as of December 31, 2014,2017, and the unused portion of our Credit Facility is subject to commitment fees of 0.30%0.35% as of December 31, 2014.Our Credit Facility and our Term Loans contain certain financial and other covenants with which we are required to comply. Our failure to comply with the covenants contained in our Credit Facility and our Term Loans could result in an event of default. An event of default, if not cured or waived, would permit acceleration of any outstanding indebtedness under the Credit Facility and our Term Loans, trigger cross‑defaults under certain other agreements to which we are a party and impair our ability to obtain working capital advances and issue letters of credit, which would have a material adverse effect on our business, financial condition, results of operations and cash flows. As of December 31, 2014,2017, we were in compliance with all financial and other covenants contained in our Credit Facility and our Term Loans.On January 30, 2018, we elected to amend our Credit Facility (the “Amendment”), and prepay certain amounts on our Term Loans. The Amendment lowers the borrowing capacity of our Credit Facility to approximately $1.16 billion with a sublimit of $400.0 million for the issuance of letters of credit and bankers' acceptances. Under the Credit Facility, we have the right to request increases in available borrowings up to an additional $200.0 million, subject to the satisfaction of certain conditions. The Credit Facility matures in October 2021. In connection with the Amendment, we also elected to make a $300.0 million payment on the outstanding amounts owed on the Term Loans, representing additional capacity that is accessible by us. This payment was facilitated by an ability to use foreign cash without incurring additional U.S. tax costs as a result of the recently enacted Tax Act.Outside of our Credit Facility we have other uncommitted credit lines primarily for the issuance of letters of credit, bank guarantees and bankers’ acceptances. These credit lines are renewable on an annual basis and are subject to fees at market rates. As of December 31, 20142017 and 2013,2016, our outstanding letters of credit and bank guarantees under these credit lines totaled $211.4$272.0 million and $150.6$176.5 million, respectively.Substantially all of the letters of credit and bank guarantees issued under our Credit Facility and the uncommitted credit lines were provided to suppliers in the normal course of business and generally expire within one year of issuance. Expired letters of credit and bank guarantees are renewed as needed.Our debt consisted of the following (in thousands)millions):As of December 31, 2014 2013 2017 2016 420,000 200,000 $ 60.0 $ 325.2 241,288 242,500 835.8 840.0 12,635 13,403 Capital leases 10.4 12.6 15,945 7,808 4.0 8.5 689,868 463,711 910.2 1,186.3 17,914 14,647 Current maturities of long-term debt and capital leases 25.6 15.4 671,954 449,064 $ 884.6 $ 1,170.8 64acquisition promissory notes are payable in varying amounts from April 2015 to July 2017 and bear interest at annual rates of approximately 1.2% as of December 31, 2014. The other debt primarily relates to capital leases and loans payable to noncontrolling shareholders of a consolidated subsidiary whichlease obligations are payable in varying amounts through August 2021November 2023 and bear interest at annual rates ranging from 2.2%3.0% to 6.3% as of December 31, 2014. The weighted average interest rate on our short‑term debt was 2.2% and 2.1% as of December 31, 2014 and 2013, respectively.As of December 31, 2014,2017, the aggregate annual maturities of debt are as follows (in thousands)millions):Year Ended December 31, 17,914 18,042 20,833 631,901 $ 25.6 770 41.6 2020 55.8 2021 723.5 2022 61.7 408 1.9 689,868 $ 910.2 The following table provides additional information about our interest income, andinterest expense and other financing costs, net (in thousands)millions):2014 2013 2012 2017 2016 2015 5,993 3,882 908 $ 6.0 $ 4.5 $ 5.0 (31,230) (21,169) (20,005) (66.3 ) (43.7 ) (34.9 ) (25,237) (17,287) (19,097) $ (60.3 ) $ (39.2 ) $ (29.9 ) 7.9. Commitments and ContingenciesSurety BondsIn the normal course of business, we are required to post bid, performance and garnishmentother surety-related bonds. The majority of the surety bonds posted relate to our aviation and land segments. As of December 31, 2014 and 2013, weWe had outstanding bonds that were arrangedexecuted in order to satisfy various security requirements of $38.7$44.6 million and $34.1$52.8 million, respectively. Mostas of these bonds provide financial security for obligations which have already been recorded as liabilities.Lease CommitmentsAs of December 31, 2014,2017, our future minimum lease payments under non‑cancelablenon-cancelable operating leases were as follows (in thousands)millions):Year Ended December 31, 37,766 31,949 22,790 16,645 $ 39.7 13,592 31.0 2020 25.7 2021 21.3 2022 15.1 36,558 32.4 159,300 $ 165.2 We incurred rental expense for all properties and equipment of $29.2$40.3 million, $24.7$36.9 million and $27.3$31.6 million for 2014, 20132017, 2016 and 2012,2015, respectively. Minimum payments have not been reduced by minimum sublease rentals of $31.5$34.7 million due in the future under non-cancelable subleases.Sales and Purchase CommitmentsAs of December 31, 2014,2017, the notional value associated with fixed sales and purchase commitments under our derivative programs amounted to $266.7$921.4 million and $56.6$516.4 million, respectively.aswe have certain purchase contracts that extend through 2026, under which we agreed to purchase annually between 1.72 million barrels and 2.00 million barrels of December 31, 2014, we had entered into certain other fixed price sales commitments with corresponding fixed price purchase commitments, the majority of which were satisfied within one week. These sales and purchase commitments were made in the normal course of business. 65We have an agreement with our Chairman, President and Chief Executive Officer, Michael J. Kasbar (“Mr. Kasbar”), for his continued employment with the Companyus which provides for an annual base salary as determined by our Compensation Committee in its sole discretion (currently $750,000)$900,000), termination severance benefits, and such incentives and other compensation and amounts as our Compensation Committee may determine from time to time in its sole discretion. The current term of the Kasbar agreement, as amended, expiresexpired on December 31, 2016, unless terminated earlier,2017, and will automatically extendextends for successive one yearone-year terms unless either party provides written notice to the other at least one year prior to the expiration of the term that such party does not want to extend the term. Pursuant to his amended agreement, Mr. Kasbar is entitled to receive cash severance payments if: (a) we terminate his employment without cause following a change of control or for any reason other than death, disability or cause; (b) he resigns for good reason (generally a reduction in his responsibilities or compensation, or a breach by us), or resigns following a change of control; or (c) either he elects or we elect not to extend the term of the agreement, as amended. The severance payments are equal to $5.0 million for a termination following a change of control and $3.0 million in the other scenarios described above, a portion of which will be payable two years after the termination of Mr. Kasbar’s employment.All of Mr. Kasbar’s outstanding SSAR Awards, restricted stock and RSUs (collectively, “outstanding equity awards”) will immediately vest in each scenario described in (a) and (b) above following a change of control, except for awards assumed or substituted by a successor company, in which case, such awards shall continue to vest in accordance with their applicable terms. In each scenario described in (a), (b) or (c) above where there has not been a change of control, Mr. Kasbar’s outstanding equity awards will generally vest over a two year period following termination of his employment, with any remaining unvested awards vesting on the last day of such two year period. For each scenario described above, awards with multiple annual performance conditions must satisfy certain other requirements in order to have their vesting terms accelerated.We have also entered into employment agreements or separation agreements with certain of our other executive officers and key employees. These agreements provide for minimum salary levels, and, in most cases, bonuses which are payable if specified performance goals are attained. Some executive officers and key employees are also entitled to severance benefits upon termination or non-renewal of their contracts under certain circumstances.As of December 31, 2014,2017, the approximate future minimum commitments under these agreements, excluding discretionary and performance bonuses, are as follows (in thousands)millions):5,815 1,540 750 2,250 10,355 Year Ended December 31, 2018 $ 0.9 Executive Non-Renewal ChargeIn connection with the non-renewal of the employment agreement between the Company and Mr. Stebbins, the former Executive Chairman of the Board of Directors, we recorded an executive non-renewal charge totaling $4.8 million in May 2014, which included non-cash expenses of $1.1 million related to previously awarded stock compensation. As of December 31, 2014, $0.9 million of the cash portion of the executive non-renewal charge was included in accrued expenses and other current liabilities and $ 2.3 million was included in other long-term liabilities in the accompanying consolidated balance sheets.Deferred Compensation Plans and PensionWe maintain a 401(k) defined contribution plan which covers all U.S. employees who meet minimum requirements and elect to participate. We are currently making a match contributionscontribution of 50% for each 1% of the participants' contributions up to 6% of the participants' contributions. Annual contributions by us are made at our sole discretion, as approved by the Compensation Committee. Additionally, certain of our foreign subsidiaries have defined contribution plans, which allow for voluntary contributions by the employees. In some cases, we make employer contributions on behalf of the employees. The expenses for our contributions under these plans were not significantmaterial during each of the years presented on the consolidated statements of income and comprehensive income.66$2.3$5.8 million and $0.9$4.3 million as of December 31, 20142017 and December 31, 2013,2016, respectively, which was included in other long-term liabilities in the accompanying consolidated balance sheets.In connection with our acquisition of Watson Petroleum, we assumed their defined benefit pension plan (the “Watson Plan”), which provides participants benefits based on salary at retirement or an earlier date of leaving service. As part of the allocation of the estimated purchase price to assets acquired and liabilities assumed for Watson Petroleum, we recorded an assumed pension exit obligation of £9.8 million ($16.3 million). As of December 31, 2014, we have remaining an assumed exit pension obligation of £1.0 million ($1.5 million), which is included in accrued expenses and other current liabilities in the accompanying consolidated balance sheets. We expect to settle this amount in 2015. There are no other assets or liabilities on our consolidated balance sheet as of December 31, 2014 related to the Watson Plan. Additionally, the expenses for the Watson Plan recorded in our consolidated statements of income and comprehensive income for 2014 were not significant.As of December 31, 2014, the Watson Plan, through its Trustee, had assets comprised of a buy-in policy with an insurance company, which fully matches its estimated benefit obligations of £32.0 million ($49.8 million). The completion of our exit from the Watson Plan is anticipated to occur in the latter half of 2015 via buy-out policies between the insurance company and each individual participant.Environmental and Other Liabilities; Uninsured RisksWe provide various servicesOur business is subject to customers,numerous federal, state, local and foreign environmental laws and regulations, including into‑plane fueling at airports, fuelingthose relating to fuel storage and distribution, terminals, underground storage tanks, the release or discharge of vessels in‑portregulated materials into the air, water and at‑sea, andsoil, the generation, storage, handling, use, transportation and storagedisposal of fuelhazardous materials, and fuel products. We are therefore subjectthe exposure of persons to possible claims by customers, regulatorsregulated materials. A violation of, liability under, or noncompliance with these laws and others who may be injured by a fuel spillregulations, or other accident. In addition,any future environmental law or regulation, could result in material liabilities, including administrative, civil or criminal penalties, remediation costs for natural resource damages as well as third-party damages. From time to time, we may be held liableresponsible for damagesremediating contamination at properties we own or lease and can be entitled to the environment arising outreimbursement for certain of such events. Although we generally maintain liability insurance for these types of events, such insurance may be inadequate. If we are held liable for any damages, and the liability is not adequately covered by insurance and is of sufficient magnitude, our financial position and results of operations will be adversely affected.We have exited several businesses which handled hazardous and non‑hazardous waste. We treated and/or transported this waste to various disposal facilities. We may be held liable as a potentially responsible party for the clean‑up of such disposal facilities or be required to clean up facilities previously operated by us, pursuant to current U.S. federal and state laws and regulation. In addition, compliance with existing and future environmental laws regulating underground storage tanks located at the retail gasoline stations that we operate may require significant capital expenditures and increased operating and maintenance costs. The remediation costs and other costs required to clean up or treat contaminated sites could be substantial. We pay tank registration fees and other taxes to state trust funds established in our operating areas and maintain private insurance coverage in support of future remediation obligations. These state trust funds or other responsible third parties including insurers are expected to pay or reimburse us for remediation expenses less a deductible. To the extent third parties do not pay for remediation as we anticipate, we will be obligated to make these payments. These payments could materially adversely affect our financial condition, results of operations and cash flows. Reimbursements from state trust funds, will be dependent on the maintenanceas well as various third-party contractual indemnities and continued solvency of the various funds.Furthermore, our ability to obtain and maintain adequate insurance and the cost of such insurance may be affected by significant claims, such as the Lac‑Mégantic derailment described below, and conditions in the insurance market over whichIf we have no control. Anare uninsured or under‑insured for a claim or claims of sufficient magnitude arising out of our activities, if successful and of sufficient magnitude,it will have a material adverse effect on our financial position, results of operations and cash flows.LegalWe accrue for environmental assessment and remediation expenses when the future costs are probable and reasonably estimable. At December 31, 2017 and 2016, accrued liabilities for remediation were not material. It is not presently possible to estimate the ultimate amount of all remediation costs that might be incurred or the penalties that may be imposed.Tax MattersLac‑Mégantic, QuebecWe, on behalf of DPTS Marketing LLC ("DPM"), a crude oil marketing joint ventureFrom time to time, we are under review by various domestic and foreign tax authorities with regards to indirect tax matters and are involved in which we owned a 50% membership interest, purchased crude oil from various producerschallenges and litigation in the Bakken region of North Dakota. Dakota Petroleum Transport Solutions, LLC ("DPTS"), a crude oil transloading joint venture in which we also owned a 50% membership interest, arranged for the transloading of the crude oil for DPM into tank cars at the joint venture's facility in New Town, North Dakota. We leased the tank cars used in the transloading from a number of third party lessorscountries, including, in particular, Brazil and subleased these tank cars to DPM.67We, on behalf of DPM, contracted with Canadian Pacific Railway ("CPR") forSouth Korea, where the transportation of the tank cars and the crude oil from New Town, North Dakota to a customer in New Brunswick, Canada. CPR subcontracted a portion of that route to Montreal, Maine and Atlantic Railway ("MMA"). On July 6, 2013, the freight train operated by MMA with tank cars carrying approximately 50,000 barrels of the crude oil derailed in Lac-Mégantic, Quebec. The derailment resulted in significant loss of life, damage to the environment from spilled crude oil and extensive property damage. For additional information regarding the legal proceedings relating to this incident described below, see Part I — Item 3 of this 2014 10-K Report.In 2013, we, certain of our subsidiaries, DPM and DPTS, along with a number of third parties, including MMA and certain of its affiliates, as well as several manufacturers and lessors of tank cars, were named as defendants in twenty complaints filed in the state of Illinois. The complaints generally allege wrongful death and negligence in the failure to provide for the proper and safe transportation of crude oil and seek economic and compensatory damages, as well as costs. In addition, in 2013, we, certain of our subsidiaries, DPM and DPTS, along with a number of other third parties, including CPR, MMA and certain of its affiliates, several manufacturers and lessors of tank cars, as well as the intended purchaser and certain suppliers of the crude oil, were named as defendants in a motion filed in Quebec Superior Court to authorize the bringing of a class-action lawsuit seeking economic, compensatory and punitive damages, as well as costs. The motion generally alleges wrongful death and negligence in the failure to provide for the proper and safe transportation of crude oil.Furthermore, in 2013, an order was issued by the government of Quebec against MMA and us, which was subsequently modified and added CPR as a party. The orders require MMA, CPR and us to recover the spilled crude oil caused by the incident and to otherwise fully remediate the impact of the incident on the environment. We have filed a contestation of these orders before the Tribunal administratif du Québec, an administrative body responsible for hearing such proceedings, challenging the legality and validity of the orders on various grounds.In January 2014, the Trustee for MMA’s U.S. bankruptcy estate (the “Trustee”) filed an adversary proceeding against us, and certain of our subsidiaries, in the United States Bankruptcy Court for the District of Maine alleging negligence in the failure to provide for the proper and safe transportation of crude oil, and seeking economic damages, as well as costs and expenses associated with MMA’s lawsuits arising from the incident. The Trustee and the monitor in MMA’s Canadian bankruptcy (the “Monitor”) are continuing to explore a potential global settlement of all third party claims arising out of the incident. The Monitor has represented in court filings that those discussions have resulted in firm commitments from certain third parties of settlement funds totaling approximately C$200.0 million ($170.0 million). The Trustee and the Monitor continue to discuss global settlement with various other parties, including us.In addition to these proceedings, we have received demands for indemnification from certain tank car lessors pursuant to our lease agreements with such parties and three lessors subsequently filed declaratory judgment actions against us in connection with such indemnification demands during 2014. We are currently assessing the merits of these demands as well as of the underlying claims for which such indemnification is sought. Additional claims, lawsuits, proceedings, investigations and ordersamounts under controversy may be filed, commenced or issued with respect to the incident, which may involve civil claims for damages or governmental investigative, regulatory or enforcement actions against us.In December 2014, we sold our 50% interest in DPM and DPTS to certain subsidiaries of Dakota Plains Holdings, Inc. (“DAKP”), our partner in the joint ventures. In connection with the sale transaction, we agreed to indemnify DAKP and certain of its affiliates, including DPM and DPTS, for third party claims for bodily injury or property damage arising from the derailment. Pursuant to the agreement, we will control the defense of DAKP and the joint ventures for claims associated with the derailment. In addition, DAKP assigned to us all recoveries from third parties and under applicable insurance policies held by DAKP and the joint ventures for claims arising out of the derailment. Finally, DAKP also agreed to indemnify us for certain costs and expenses arising out of the derailment up to $10.0 million.While we, DPM and DPTS, maintain insurance to mitigate the costs of environmental releases as well as other results of unexpected events, including loss of life, property damage and defense costs, there can be no guarantee that our insurance will be adequate to cover all liabilities that may be incurred as a result of this incident.We are separately evaluating potential claims that we may assert against third parties to recover costs and other liabilities that may be incurred as a result of this incident. We can provide no guarantee that any such claims, if brought by us, will be successful or, if successful, that the responsible parties will have the financial resources to address any such claims. We are currently unable to determine the probability of loss, or reasonably estimate a range of potential losses related to the proceedings arising from the train derailment. Accordingly, we have not made any provision for these potential losses in our consolidated financial statements. However, based on estimated losses related to the value of the tank cars involved68in the incident, as well as legal and other costs incurred in connection with the incident, which we believe are probable and for which a reasonable estimate can be made, we have recorded total liabilities of $40.9 million.material. We believe that a substantial portion of these liabilitiesassessments are covered by insurancewithout merit and have recorded total receivables of $38.6 million. As of December 31, 2014,are currently appealing the remaining unpaid liabilities of $14.8 million are included primarily in accrued expenses and other current liabilities and the remaining uncollected receivable of $28.9 million is included in other current assets in the accompanying consolidated balance sheets.Other MattersIn connection with a theft of fuel product valued at approximately $18.0 million, we recorded an insurance receivable for the full amount of the loss, which is included in other current assets in the accompanying consolidated balance sheets. On July 31, 2014, our insurer, AGCS Marine Insurance Company (“AGCS”), filed a declaratory judgment action against us in the United States District Court for the Southern District of New York seeking a court ruling that the loss is not covered under our policy. actions.During the quarter ended December 31, 2014, we filed an answer to2016, the AGCS complaint and counterclaims against AGCS for declaratory judgment and breachKorean branch (“WFSK”) of contract seeking a court ruling that the loss is covered under the policy, an award of damages equal to the full amountone of our loss plus interest, as well as feessubsidiaries received assessments of approximately $10.6 million (KRW 11.9 billion) and costs.during the quarter ended June 30, 2017, an assessment for an additional $17.9 million (KRW 20.1 billion) from the regional tax authorities of Seoul, South Korea (“SRTO”). The assessments primarily consist of fines and penalties for allegedly failing to issue Value Added Tax ("VAT") invoices and report certain transactions during the period 2011-2014. These assessments do not involve failure to pay or collect VAT. We believe AGCS’ position isthat these assessments are without merit and are currently appealing the actions.We are also involved in a number of tax disputes with federal, state and municipal tax authorities in Brazil, relating primarily to VAT (ICMS) tax matters. These disputes are at various stages of the legal process, including the administrative review phase and the collection action phase, and include assessments of fixed amounts of principal and penalties, plus interest.When we intenddeem it appropriate and the amounts are reasonably estimable, we establish reserves for potential adjustments to vigorously pursue our rights. However, dueprovision for the accrual of indirect taxes that may result from examinations or other actions by tax authorities. If events occur which indicate payment of these amounts is unnecessary, the reversal of the liabilities would result in the recognition of benefits in the period we determine the liabilities are no longer necessary. If our estimates of any of our federal, state, and foreign indirect tax liabilities are less than the ultimate assessment, it could result in a further charge to expense. Except with respect to the complexities and uncertainties inherent in litigation,matters described above, we can provide no assurancebelieve that wethe final outcome of any pending examinations, agreements, administrative or judicial proceedings will recover the full amountnot have a material effect on our results of the loss.Other MattersWe are also a party to various claims, complaints and proceedings arising in the ordinary course of our business including, but not limited to, environmental claims, commercial and governmental contract claims, such as property damage, demurrage, personal injury, billing and fuel quality claims, as well as bankruptcy preference claims and tax and administrative claims. We have established loss provisions for these ordinary course claims as well as other matters in which losses are probable and can be reasonably estimated. As of December 31, 2014,2017, we had recorded certain reserves which were not significant.material. For those matters where a reserve has not been established and for which we believe a loss is reasonably possible, as well as for matters where a reserve has been recorded but for which an exposure to loss in excess of the amount accrued is reasonably possible, we believe that such losses will not have a material adverse effect on our consolidated financial statements. However, any adverse resolution of one or more such claims, complaints or proceedings during a particular period could have a material adverse effect on our consolidated financial statements or disclosures for that period.Our estimates regarding potential losses and materiality are based on our judgment and assessment of the claims utilizing currently available information. Although we will continue to reassess our reserves and estimates based on future developments, our objective assessment of the legal merits of such claims may not always be predictive of the outcome and actual results may vary from our current estimates.8.10. Shareholders’ EquityDividendsWe declared aggregate cash dividends of $0.15$0.24 per share of common stock for each of 2014, 20132017, 2016 and 2012.2015, respectively. Our Credit Facility and Term Loans have restrictions regarding the maximum amount of cash dividends allowed to be paid. The payment of the above‑referenced cash dividends was in compliance with the Credit Facility and Term Loans.69Our Board of Directors, from time to time, has authorized stock repurchase programs under the terms of which we may repurchase our common stock, subject to certain restrictions contained in our Credit Facility and Term Loans. In October 2008,2017, our Board of Directors authorizedapproved a $50.0 millionnew common stock repurchase program (the “Repurchase Program”). In 2013, we repurchased 926,000 shares of our common stock for an aggregate value of $35.0 million pursuant to the Repurchase Program. In May 2014, our Board of Directors renewed the Repurchase Program, replacingwhich replaced the remainder of the October 2008 share repurchaseexisting program and authorizingauthorized the purchase of up to $65.0$100.0 million in common stock.stock (the “Repurchase Program”). The Repurchase Program does not require a minimum number of shares of common stock to be purchased, has no expiration date and may be suspended or discontinued at any time. In 2014, we repurchased 227,000 shares of our common stock for an aggregate value of $10.0 million pursuant to the Repurchase Program. As of December 31, 2014, $55.02017, $100.0 million remains available for purchase under the Repurchase Program. The timing and amount of shares of common stock to be repurchased under the programRepurchase Program will depend on market conditions, share price, securities law and other legal requirements and factors. Share‑BasedUnder several of our repurchase programs, we repurchased 1.6 million shares of our common stock for an aggregate value of $70.5 million during 2015, 1.0 million shares of our common stock for an aggregate value of $41.2 million during 2016 and 1.7 million shares of our common stock for an aggregate value of $61.9 million in 2017.Share-Based Payment PlansPlan Summary and DescriptionIn 2006,May 2016, our shareholders approved the 2016 Omnibus Plan (the “2016 Plan”), which replaced our previously adopted 2006 Omnibus Plan, as amended and restated in 2009 our shareholders approved an amendment and restatement of such plan and, in 2014, our shareholders reapproved the material terms of the performance measures under such plan (collectively, the(the “2006 Plan”). The 20062016 Plan is administered by the Compensation Committee of the Board of Directors (the “Compensation Committee”). The purpose of the 20062016 Plan is to (i) attract and retain persons eligible to participate in the 20062016 Plan; (ii) motivate participants, by means of appropriate incentives, to achieve long‑range goals; (iii) provide incentive compensation opportunities that are competitive with those of other similar companies; and (iv) further align participants’ interests with those of our other shareholders through compensation that is based on the value of our common stock. The goal is to promote the long‑term financial interest of World Fuel and its subsidiaries, including the growth in value of our equity and enhancement of long‑term shareholder return. The persons eligible to receive awards under the 20062016 Plan are our employees, officers, and members of the Board of Directors, or any consultant or other person who performs services for us.The provisions of the 20062016 Plan authorize the grant of stock options which can be “qualified” or “nonqualified” under the Internal Revenue Code of 1986, as amended, restricted stock, RSUs, SSAR Awards, performance shares and performance units and other share‑based awards. The 20062016 Plan is unlimited in duration and, in the event of itstermination, the 20062016 Plan will remain in effect as long as any awards granted under it remain outstanding. No awards may be granted under the 20062016 Plan after June 2016.May 2026. The term and vesting period of awards granted under the 20062016 Plan are established on a per grant basis, but options and SSAR Awards may not remain exercisable after the seven‑year anniversary of the date of grant.Under the 20062016 Plan, 4,900,0002.5 million shares of common stock are authorized for issuance. Additionalissuance plus any shares of common stock that are authorized for issuance under the 2006 Plan include any shareswith respect to awards that were available for future grant under any of our prior stock plans, and any shares in respect of awards granted under the 2006 Plan or any prior plans that expire orbut are forfeited or canceled.Furthermore, any employee’s shares usedcanceled (e.g., due to the recipient's failure to satisfy the withholding taxes due upon vestingapplicable service or performance conditions) after May 2016. As of anyDecember 31, 2017, approximately 2.2 million shares of common stock were subject to outstanding awards granted under the 2016 and 2006 plan or exercisePlan (assuming maximum achievement of performance goals for restricted stock options are added to the maximum numberand target achievement of shares authorizedperformance goals for issuance under the 2006 Plan.The following table summarizes the outstanding awards issued pursuant to the 20062016 Plan described above as of December 31, 20142017 and the remaining shares of common stock available for future issuance (in thousands)millions):1,496 785 232 3,263 (1)Plan name Restricted Stock RSUs SSAR Awards Remaining shares of common stock available for future issuance 2016 Plan (1) — 0.6 0.4 3.4 2006 Plan (2) 0.3 0.9 0.3 (1)As of December 31, 2014, unvested restricted stock will vest between February 2015 and May 2019, unvested RSUs will vest between March 2015 and May 2019 and the outstanding SSAR Awards will expire between May 2015 and May 2018. RSUs granted to non‑employee directors under the 2006 Plan prior to 2011 remain outstanding until the date the non‑employee director ceases, for any reason, to be a member of the Board of Directors.70December 31, 2017, unvested RSUs will vest between February 2018 and August 2021 and the outstanding SSAR Awards will expire between March 2020 and May 2020.(2)As of December 31, 2017, unvested restricted stock will vest between February 2018 and February 2021, unvested RSUs will vest between February 2018 and May 2019 and the outstanding SSAR Awards will expire in March 2019. RSUs granted to non‑employee directors under the 2006 Plan prior to 2011 remain outstanding until the date the non‑employee director ceases, for any reason, to be a member of the Board of Directors.Restricted Stock AwardsThe following table summarizes the status of our unvested restricted stock outstanding and related transactions for each of the following years (in thousands,millions, except weighted average grant‑dategrant-date fair value price and weighted average remaining vesting term data):Unvested Restricted Stock Weighted Average Grant date Fair Value Price Aggregate Intrinsic Value Weighted Average Remaining Vesting Term (in Years) 446 34.07 18,707 2.2 As of December 31, 2014 1.5 $ 41.18 $ 70.2 2.1 798 40.19 0.2 49.95 (128) 26.26 (0.2 ) 39.63 (16) 37.24 (0.1 ) 41.84 1,100 39.38 45,295 3.4 As of December 31, 2015 1.4 42.69 54.9 1.4 342 41.83 0.1 42.92 (43) 37.00 (0.2 ) 40.40 (25) 38.89 (0.1 ) 43.30 1,374 40.07 59,307 2.7 As of December 31, 2016 1.2 43.10 55.7 0.8 308 44.18 — — (160) 38 (0.2 ) 43.69 (26) 39.58 (0.7 ) 41.50 1,496 41.18 70,212 2.1 As of December 31, 2017 0.3 $ 45.80 $ 9.7 0.9 The aggregate value of restricted stock which vested during 2014, 20132017, 2016 and 20122015 was $7.1$7.8 million, $1.7$9.6 million and $5.3$9.9 million, respectively, based on the average high and low market price of our common stock at the vesting date.RSU AwardsThe following table summarizes the status of our RSUs and related transactions for each of the following years (in thousands,millions, except for weighted average grant‑date fair value data and weighted average remaining contractual life):RSUs Outstanding RSUs Weighted Average Grant date Fair Value Price Aggregate Intrinsic Value Weighted Average Remaining Contractual Life (in Years) 901 25.59 37,373 1.7 As of December 31, 2014 0.8 $ 38.55 $ 36.9 1.5 369 40.98 0.3 51.00 (275) 16.12 Vested (0.3 ) 38.80 (14) 30.74 — 42.65 981 34.06 39,888 1.5 As of December 31, 2015 0.7 43.10 28.0 1.7 98 40.59 0.7 44.23 (287) 32.00 Vested (0.1 ) 42.78 (45) 35.92 (0.1 ) 44.78 747 35.61 31,775 1.3 As of December 31, 2016 1.2 43.28 55.7 1.6 310 44.34 0.6 37.74 (238) 36.67 Vested (0.2 ) 43.06 (34) 40.25 (0.1 ) 42.43 785 38.55 36,872 1.5 As of December 31, 2017 1.6 $ 41.01 $ 43.9 1.4 The aggregate intrinsic value of RSUs issued during 2014, 20132017, 2016 and 20122015 was $10.1$7.7 million, $11.3$6.2 million and $11.6$15.3 million, respectively.71The following table summarizes the status of our outstanding and exercisable SSAR Awards and related transactions for each of the following years (in thousands,millions, except weighted average exercise price and weighted average remaining contractual life data):SSAR Awards Outstanding SSAR Awards Exercisable SSAR Awards Weighted Average Exercise Price Aggregate Intrinsic Value Weighted Average Remaining Contractual Life (in Years) SSAR Awards Weighted Average Exercise Price Aggregate Intrinsic Value Weighted Average Remaining Contractual Life (in Years) 517 15.06 13,921 1.4 410 15.39 10,895 1.4 (95) 16.76 422 15.30 10,927 0.6 322 16.02 8,108 0.7 As of December 31, 2014 0.2 $ 40.06 $ 1.6 3.0 0.1 $ 35.81 $ 0.6 2.2 218 41.42 — 57.48 (366) 14.07 — 25.08 (2) 37.34 272 37.69 1,594 3.6 56 23.25 1,124 1.0 As of December 31, 2015 0.2 42.91 — 2.5 0.1 42.06 — 2.2 Granted 0.1 48.58 (36) 22.26 — 40.91 (4) 40.91 232 40.06 1,595 3.0 54 35.81 600 2.2 As of December 31, 2016 0.3 44.97 0.3 2.4 0.2 42.15 0.7 1.3 Granted 0.4 36.31 Exercised — 40.91 As of December 31, 2017 0.7 $ 40.27 $ — 3.0 0.2 $ 42.76 $ — 0.4 The aggregate intrinsic value of SSAR Awards exercised during 2014, 20132016 and 20122015 was $0.8 million, $9.1$0.1 million and $2.1$0.5 million, respectively, based on the difference between the average of the high and low market price of our common stock at the exercise date and the SSAR Award exercise price.As discussed in Note 1, we currently use the Black Scholes option pricing model to estimate the fair value of SSAR Awards granted to employees and non‑employee directors.employees. The weighted average fair value of the SSAR Awards for 20132017 was $11.65$8.82 and the assumptions used to determine such fair value were as follows: expected term of 4.14.3 years, volatility of 38.0%28.6%, dividend yields of 0.4%0.7% and risk‑freerisk-free interest rates of 0.6%1.8%. There were noThe weighted average fair value of the SSAR Awards issued in 2014for 2016 was $12.32 and 2012.Unrecognized Compensation CostAs of December 31, 2014,2017, there was $30.6$47.4 million of total unrecognized compensation cost related to unvested share‑basedshare-based payment awards, which is included as capital in excess of par value in the accompanying consolidated balance sheets. The unrecognized compensation cost as of December 31, 20142017 is expected to be recognized as compensation expense over a weighted average period of 1.4 years as follows (in thousands)millions):Year Ended December 31, 14,438 10,133 2,889 2,575 $ 18.8 561 19.6 2020 4.4 2021 4.5 2022 0.2 30,596 $ 47.4 72Our other comprehensive loss, consisting of foreign currency translation adjustments related to our subsidiaries that have a functional currency other than the U.S. dollar and cash flow hedges, was as follows (in thousands)millions):(16,130) 112 (16,018) (13,189) (112) (13,301) (29,319) (29,319) (30,896) (30,896) (60,215) (60,215) Foreign Currency Translation Adjustments Cash Flow Hedges Accumulated Other Comprehensive Loss Balance as of December 31, 2015 $ (108.7 ) $ (0.8 ) $ (109.5 ) Other comprehensive loss (40.4 ) (6.6 ) (47.0 ) Less: Net other comprehensive (income) loss attributable to noncontrolling interest 1.6 — 1.6 Balance as of December 31, 2016 (147.5 ) (7.4 ) (154.8 ) Other comprehensive income (loss) 30.1 (0.3 ) 29.8 Less: Net other comprehensive (income) loss attributable to noncontrolling interest (1.5 ) — (1.5 ) Balance as of December 31, 2017 $ (118.8 ) $ (7.7 ) $ (126.5 ) The foreign currency translation adjustment gains for 2017 were primarily due to the strengthening of the British Pound as compared to the U.S. dollar. The foreign currency translation adjustment losses for 20142016 were primarily due to the strengthening of the U.S. dollar as compared to the Brazilian Real and the British Pound. The foreign currency translation adjustment losses for 2013 and 2012 were primarily due to the strengthening of the U.S. dollar as compared to the Brazilian Real.9.11. Income TaxesU.S. and foreign income before income taxes consist of the following (in thousands)millions):2014 2013 2012 2017 2016 2015 56,575 31,823 49,021 $ (152.3 ) $ (85.4 ) $ 3.5 212,976 214,842 190,574 131.2 227.5 214.2 269,551 246,665 239,595 $ (21.1 ) $ 142.1 $ 217.7 The income tax provision (benefit) related to income before income taxes consists of the following components (in thousands)millions):2014 2013 2012 2017 2016 2015 14,829 8,167 6,858 $ 94.6 $ 7.5 $ (9.9 ) 2,540 1,822 938 5.6 0.8 0.7 22,016 36,254 24,649 34.2 30.4 27.0 39,385 46,243 32,445 134.4 38.7 17.8 10,707 2,171 7,642 15.1 (29.3 ) 4.6 2,674 566 1,380 8.9 (4.2 ) 3.0 (3,030) (10,980) 643 (10.0 ) (2.5 ) (2.3 ) 10,351 (8,243) 9,665 13.9 (36.0 ) 5.3 1,408 1,505 (3,866) 0.9 13.0 24.1 51,144 39,505 38,244 $ 149.2 $ 15.7 $ 47.2 Non‑currentNon-current tax expense (income) is primarily related to income tax associated with the reserve for uncertain tax positions.A reconciliation of the U.S. federal statutory income tax rate to our effective income tax rate is as follows:2014 2013 2012 2017 2016 2015 35.0 35.0 35.0 35.0 % 35.0 % 35.0 % (18.2) (18.7) (16.7) 245.4 (42.4 ) (28.3 ) 1.3 0.6 0.6 (51.8 ) (1.5 ) 1.1 U.S. tax on deemed dividends (14.0 ) 1.3 1.7 Tax Act impact (704.3 ) — — Deferred tax impact on foreign unrepatriated earnings (65.5 ) — — Goodwill impairment (81.5 ) — — Sale of subsidiary — 3.8 — Uncertain tax positions (4.1 ) 9.2 10.3 Tax authority settlements (10.0 ) — — Nontaxable interest income 36.9 — — Nondeductible interest expense (12.6 ) — — Valuation allowance (19.6 ) 2.0 0.3 0.9 (0.9) (2.9) (61.0 ) 3.6 1.6 19.0 16.0 16.0 (707.1 )% 11.0 % 21.7 % On December 22, 2017, the U.S. President signed into law the Tax Act. This legislation will significantly change the U.S. Internal Revenue Code, including taxation of U.S. corporations, by, among other things, limiting interest deductions,reducing the U.S. corporate income tax rate, altering the expensing of capital expenditures, adopting elements of a territorial tax system, GILTI, assessing a repatriation tax or “toll-charge” on undistributed earnings and profits of U.S.-owned foreign corporations, and introducing certain anti-base erosion provisions. The legislation is unclear in certain respects and will require interpretations and implementing regulations by the IRS, as well as state tax authorities, and the legislation could be subject to potential amendments and technical corrections, any of which could increase certain adverse impacts of the legislation.For 2014,the year ended 2017, our effective income tax rate was 19.0%(707.1)%, for anand our income tax provision of $51.1was $149.2 million, as compared to an effective income tax rate of 16.0%11.0% and an income tax provision of $39.5$15.7 million for 2013.2016. The higher effective income tax rate for 201473Table2017, as compared to 2016, resulted principally from the effects of ContentsFor 2016, our effective income tax rate was 11.0%, for an income tax provision of $15.7 million, as compared to an effective income tax rate of 21.7% and an income tax provision of $47.2 million for 2015. The lower effective income tax rate for 2016 resulted primarily from differences in the actual results of our subsidiaries in tax jurisdictions with different income tax rates and a U.S. gain on the sale of the crude oil joint venture interests as compared to 2013. Without the gain on the sale of the crude oil joint venture interests, for 2014, our effective income tax rate would have been 17.7%.For 2013,2015, our effective income tax rate was 16.0%21.7%, for an income tax provision of $39.5$47.2 million, as compared to an effective income tax rate of 16.0%19.5% and an income tax provision of $38.2$53.6 million for 2012.2014. The higher effective income tax rate for 2013 remained flat2015 compared to 2012. However, there were underlying2014, resulted primarily from differences in the actual results of our subsidiaries in tax jurisdictions with different income tax rates as comparedrates.Through September 30, 2017, we considered all of the earnings in our non-U.S. subsidiaries to 2012be indefinitely reinvested and, differencesaccordingly, recorded no deferred income taxes. The passage of the Tax Act in outstanding uncertain tax positions netDecember of certain nonrecurring discrete tax items including statute lapses, audit settlements, and a change in estimate.U.S. income taxes have not been provided on undistributed earnings2017 dramatically changed the US taxation of foreign subsidiaries. Asearnings. Following a transition period and one-time toll charge of December 31, 2014our foreign earnings and 2013, we had $1.3 billionprofits, foreign dividends will be exempt from US federal income tax.We have analyzed our global working capital and $1.1 billion, respectively, of earningscash requirements and the potential tax liabilities attributable to repatriation and have determined that we intend to continue our assertion to permanently reinvest $725 million of our foreign subsidiaries. Our intention is to reinvest these earnings permanently in active non‑U.S.non-US business operations. Therefore, no income tax liability has been accrued forFor these earnings. Because of the availability of U.S.investments, due to uncertainty in foreign tax credits,law, it is not practicablepractical to determine the amount of U.S. income taxdeferred taxes payable if such earnings are not reinvested indefinitely.The temporary differences which comprise our net deferred tax liabilities are as follows (in thousands)millions):As of December 31, 2014 2013 2017 2016 5,465 6,426 $ 3.5 $ 4.5 4,819 774 23.0 38.6 21,654 21,393 18.8 26.2 8,606 10,032 11.7 5.0 558 U.S. foreign income tax credits — 7.8 Other income tax credits 0.2 0.2 6,095 5,149 1.9 6.3 6,592 7,577 6,082 Investments 1.3 — Cash flow hedges 3.2 4.6 60,808 50,414 63.7 93.2 24.6 7.1 60,808 50,414 39.1 86.1 (13,133) (19,199) (6.4 ) (8.5 ) (45,294) (28,099) (43.6 ) (56.1 ) Unrealized foreign exchange (0.9 ) (8.0 ) (4,519) (3,452) (3.8 ) (5.8 ) Deferred tax costs on foreign unrepatriated earnings (13.8 ) — (8,188) (1.1 ) (2.4 ) (1,248) (740) (1.1 ) (0.7 ) (72,382) (51,490) (70.8 ) (81.5 ) (11,574) (1,076) Net deferred tax liability $ 31.7 $ — Net deferred tax asset — 4.6 22,825 32,118 15,555 16,342 $ 12.8 $ 20.6 492 3,229 49,462 46,307 $ 44.5 $ 16.0 As of December 31, 20142017 and 2013,2016, we had foreign net operating losses (“NOLs”) of approximately $19.9$240.3 million and $2.6$106.2 million, respectively. The NOLs as of December 31, 20142017 originated in various foreignU.S. states and countries including India,Argentina, Australia, South Africa, Brazil, 74the United KingdomFrance, Italy, Canada, and Thethe Netherlands. We have recorded a deferred tax asset of $4.8$23.0 million reflecting the benefit of the NOL carryforward as of December 31, 2014.2017. This deferred tax asset expires as follows (in thousands)millions):DeferredExpiration DateTax AssetDecember 31, 2016$73 December 31, 2021124 December 31, 2023189 December 31, 2024472 Indefinite3,961 Total$4,819 Expiration Date Deferred
Tax AssetDecember 31, 2020 $ 0.1 December 31, 2021 0.2 December 31, 2022 1.2 December 31, 2024 0.2 December 31, 2025 1.0 December 31, 2026 0.2 December 31, 2027 0.2 December 31, 2028 0.3 December 31, 2029 0.8 December 31, 2031 0.2 December 31, 2032 0.5 December 31, 2033 0.1 December 31, 2034 0.3 December 31, 2035 0.5 December 31, 2036 2.7 December 31, 2037 5.7 Indefinite 8.8 Total $ 23.0 In addition, as a result of certain realization requirements of accounting guidance on stock compensation,We assessed the table ofavailable positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets and liabilities shown above does not include certain deferred tax assetsassets. On the basis of this evaluation, as of December 31, 2014 and 2013 that arose directly from income2017, a valuation allowance of $24.6 million has been recorded to recognize only the portion of the deferred tax deductionsassets related to equity compensation in excess of compensation recognized for financial reporting. As of December 31, 2014NOLs and 2013, we had no foreignother deferred tax credits relatedassets that are more likely than not to the excess stock compensation deductions that resulted in an income tax deduction or credit before the realizationbe realized. The amount of the deferred tax asset considered realizable could be adjusted if estimates of future taxable income tax benefit fromduring the deductioncarryforward period change or credit. We useif objective negative evidence in the “withform of cumulative losses is no longer present and without” method for purposes of determining when excess income tax benefits have been realized.As of December 31, 2014 and 2013, our annual capital in excess of par value pool of windfall income tax benefits relatedadditional weight may be given to employee compensation was estimated to be $1.0 million and $3.3 million, respectively.We operated under a special income tax concession in Singapore which began January 1, 2008.Our current five year special income tax concession was effective on January 1, 2013. The special income tax concession is conditional upon our meeting certain employment and investment thresholds which, if not met in accordance with our agreement, may eliminate the benefit beginning with the first year in which the conditions are not satisfied. The income tax concession reduces the income tax rate on qualified sales and thederivative gains and losses. The impact of this income tax concession decreased (increased) foreign income taxes by $7.5$1.3 million, $6.2$2.7 million, and $5.5$(7.7) million for 2014, 20132017, 2016 and 2012,2015 respectively. The impact of the income tax concession on basic earnings per common share was $0.11$0.02, $0.04, and $(0.11) for 2014, $0.09 for 20132017, 2016 and $0.08 for 2012.2015 respectively. On a diluted earnings per common share basis, the impact was $0.10$0.02, $0.04, and $(0.11) for 2014, $0.092017, 2016 and 2015 respectively. The special income tax concession in Singapore has been renewed effective January 1, 2018 for 2013 and $0.08 for 2012.Income Tax ContingenciesWe recorded a decrease of $2.1$3.4 million of liabilities related to unrecognized income tax benefits (“Unrecognized Tax Liabilities”) and a decreasean increase of $4.5$19.8 million of assets related to unrecognized income tax benefits (“Unrecognized Tax Assets”) during 2014.2017. In addition, during 2014,2017, we recorded a decreasean increase of $0.5$1.4 million to our Unrecognized Tax Liabilities related to a foreign currency translation gain,loss, which is included in other income (expense), net, in the accompanying consolidated statements of income and comprehensive income. As of December 31, 2014,2017, our Unrecognized Tax Liabilities, including penalties and interest, were $33.0$72.6 million and our Unrecognized Tax Assets were $2.3$25.4 million.We During 2016, we recorded an increase of $4.1$14.4 million of liabilities related to Unrecognized Tax Liabilities and an increase of $1.8$3.2 million of assets related to Unrecognized Tax Assets during 2013.Assets. In addition, during 2013,2016, we recorded a decrease of $0.1 million to our Unrecognized Tax Liabilities related to a foreign currency translation gain, which is included in other income (expense), net, in the accompanying consolidated statements of income and comprehensive income. As of December 31, 2013,2016, our Unrecognized Tax Liabilities, including penalties and interest, were $36.2$62.2 million and our Unrecognized Tax Assets were $6.9$5.6 million.The following is a tabular reconciliation of the total amounts of gross unrecognized income tax benefitsliabilities for the year:year (in millions):2014 2013 2012 26,487 22,394 25,574 2017 2016 2015 Gross Unrecognized Tax Liabilities – opening balance $ 62.2 $ 47.8 $ 24.3 65 2,559 10.9 19.7 9.2 (2,833) (39) (7,659) — (15.4 ) (4.8 ) 6,636 4,999 5,730 10.7 12.9 22.0 — — — (3,597) (23.0 ) — — (2,414) (3,426) (1,251) (2.1 ) (2.8 ) (2.9 ) 24,344 26,487 22,394 Gross Unrecognized Tax Liabilities – ending balance $ 58.8 $ 62.2 $ 47.8 75uncertain tax positionsgross Unrecognized Tax Liabilities, net of our Unrecognized Tax Assets of $25.4 million, as of December 31, 20142017 are settled by the taxing authorities in our favor, our income tax expense would be reduced by $22.0$33.4 million (exclusive of interest and penalties) in the period the matter is considered settled in accordance with Accounting Standards Codification 740. This would have the impact of reducing our 20142017 effective income tax rate by 8.2%158.2%. As of December 31, 2014,2017, it does not appear that the total amount of our unrecognized income tax benefits will significantlymaterially increase or decrease within the next twelve months.We record accrued interest and penalties related to unrecognized income tax benefits as income tax expense. Related to the uncertain income tax benefits noted above, for interest we recorded expense of $3.4 million during 2017 and income of $0.6 million, $0.6$(0.7) million and $0.7an expense $0.9 million during 2014, 20132016 and 2012,2015, respectively. For penalties, we recorded expense of $0.1 million, $2.3 million and income of $0.3 million $0.3 millionduring 2017, 2016 and $1.5 million during 2014, 2013 and 2012,2015, respectively. As of December 31, 20142017 and 2013,2016, we had recognized liabilities of $4.2$7.3 million and $4.9$4.3 million for interest and $4.5$6.5 million and $4.8$6.5 million for penalties, respectively.During the quarters ended March 31, 2017 and June 30, 2017, the Korean Branch of one of our subsidiaries received income tax assessment notices for $9.7 million (KRW 10.4 billion) for the years 2011 through 2014 from the South Korea tax authorities. We disagree with the Korean tax authorities' assessment and are appealing.In many cases, our uncertain tax positions are related to tax years that remain subject to examination by the relevant taxing authorities. The following table summarizes these open tax years by jurisdiction with major uncertain tax positions:Open Tax Year Jurisdiction Examination
in progressExamination
yet initiatedJurisdiction2013 - 2016 in progressyet initiatedUnited States2011 2012 - 2014SingaporeNone2015 - 2017 2013 - 2015 None20042016 - 2014BrazilNone 2009 20102013 - 2014ChileNone None20092012 - 20142013 - 2015 2011 20122016 - 201410.12. Fair Value MeasurementsThe carrying amounts of cash and cash equivalents, accounts receivable, net, accounts payable and accrued expenses and other current liabilities approximate fair value based on the short‑term maturities of these instruments. We believe theThe carrying values of our debt and notes receivablereceivables approximate fair value since these instruments bear interest either at variable rates or fixed rates which are not significantlymaterially different than market rates. Based on the fair value hierarchy, our debt of $689.9$0.9 billion and $1.2 billion as of December 31, 2017 and December 31, 2016, respectively, and our notes receivable of $44.9 million and $16.9 million as of December 31, 20142017 and $463.7 million as of December 31, 2013 and our notes receivable of $7.0 million as of December 31, 2014 and $20.9 million as of December 31, 20132016, respectively are categorized in Level 3.2.7620142017 and 20132016 (in thousands)millions):173,688 495,628 4,150 673,466 (367,984) 305,482 21,757 21,757 (11,970) 9,787 2,224 2,224 2,224 173,688 519,609 4,150 697,447 (379,954) 317,493 306,360 329,887 1,353 637,600 (595,565) 42,035 11,970 11,970 (11,970) 22,889 22,889 22,889 306,360 364,746 1,353 672,459 (607,535) 64,924 11,574 39,880 51,454 (35,983) 15,471 8,486 8,486 (6,350) 2,136 1,483 1,483 1,483 11,574 49,849 61,423 (42,333) 19,090 14,032 31,983 46,015 (31,329) 14,686 11,803 11,803 (6,350) 5,453 14,032 43,786 57,818 (37,679) 20,139 Fair Value Measurements as of December 31, 2017 Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Fair Value Assets: Commodities contracts $ 196.3 $ 106.1 $ 1.2 $ 303.6 Foreign currency contracts — 8.5 — 8.5 Cash surrender value of life insurance — 5.6 — 5.6 Total assets at fair value $ 196.3 $ 120.2 $ 1.2 $ 317.7 Liabilities: Commodities contracts $ 210.6 $ 111.8 $ 1.4 $ 323.9 Foreign currency contracts — 8.7 — 8.7 Total liabilities at fair value $ 210.6 $ 120.5 $ 1.4 $ 332.5 Fair Value Measurements as of December 31, 2016 Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Fair Value Assets: Commodities contracts $ 273.6 $ 55.3 $ 2.3 $ 331.2 Foreign currency contracts — 16.0 — 16.0 Cash surrender value of life insurance — 4.0 — 4.0 Total assets at fair value $ 273.6 $ 75.3 $ 2.3 $ 351.2 Liabilities: Commodities contracts $ 236.6 $ 88.8 $ 0.7 $ 326.1 Foreign currency contracts — 6.4 — 6.4 Total liabilities at fair value $ 236.6 $ 95.2 $ 0.7 $ 332.5 There were no transfers between Level 1 and Level 2 during the periods presented. The cash surrender value of life insurance is in connection with the NQDC plan and was included in identifiable intangible and other non-current assets in the accompanying consolidated balance sheets.The following table presents information regarding the balance sheet locationfair values of our commodity contracts measured using Level 3 inputs were not material at December 31, 2017 and foreign currency contracts net assets and liabilities (in thousands):2014 2013 294,316 14,723 11,166 748 305,482 15,471 41,346 14,332 689 354 42,035 14,686 9,283 2,136 504 9,787 2,136 5,306 147 5,453 For our derivative contracts, we may enter into master netting, collateral and offset agreements with counterparties. These agreements provide us the ability to offset a counterparty’s rights and obligations, request additional collateral when necessary or liquidate the collateral in the event of counterparty default. We net fair value of cash collateral paid or received against fair value amounts recognized for net derivative positions executed with the same counterparty under the same master netting or offset agreement.77offset as presented on our consolidated balance sheet. We have elected to offset the recognized fair value amounts for multiple derivative instruments executed with the same counterparty in our financial statements when a legal right of offset exists.As of Fair Value as of December 31, 2017 Gross Amounts Recognized Gross Amounts Offset Net Amounts Presented Cash Collateral Gross Amounts Without Right of Offset Net Amounts Assets: Commodities contracts $ 303.6 $ 228.4 $ 75.1 $ 21.2 $ — $ 53.9 Foreign currency contracts 8.5 6.7 1.7 — — 1.7 Total assets at fair value $ 312.0 $ 235.2 $ 76.9 $ 21.2 $ — $ 55.7 Liabilities: Commodities contracts $ 323.9 $ 228.4 $ 95.4 $ 39.2 $ — $ 56.2 Foreign currency contracts 8.7 6.7 2.0 — — 2.0 Total liabilities at fair value $ 332.5 $ 235.2 $ 97.4 $ 39.2 $ — $ 58.2 Fair Value as of December 31, 2016 Gross Amounts Recognized Gross Amounts Offset Net Amounts Presented Cash Collateral Gross Amounts Without Right of Offset Net Amounts Assets: Commodities contracts $ 331.2 $ 249.7 $ 81.5 $ 27.1 $ — $ 54.5 Foreign currency contracts 16.0 5.1 10.9 — — 10.9 Total assets at fair value $ 347.2 $ 254.8 $ 92.4 $ 27.1 $ — $ 65.3 Liabilities: Commodities contracts $ 326.1 $ 249.7 $ 76.5 $ 2.0 $ — $ 74.5 Foreign currency contracts 6.4 5.1 1.2 — — 1.2 Total liabilities at fair value $ 332.5 $ 254.8 $ 77.7 $ 2.0 $ — $ 75.7 At December 31, 2014,2017 and 2016, we did not present any amounts gross on our consolidated balance sheet where we had $301.0 millionthe right of cash collateral deposits held by financial counterparties,setoff.Concentration of which $274.3 million have been offset againstCredit RiskThe individual over-the-counter (OTC) counterparty exposure is managed within predetermined credit limits and includes the total amountuse of commodity fair value liabilities incash-call margins when appropriate, thereby reducing the above table and the remaining $26.7 million is included in other current assets in the accompanying consolidated balance sheets. In addition, asrisk of significant nonperformance. At December 31, 2014, we have offset $46.7 million of cash collateral received from customers against the total amount of commodity fair value assets in the above table. As of December 31, 2013, we had $13.0 million of cash collateral deposits held by financial2017, two counterparties and there were no significant amounts of cash collateral that were offset against the total commodity fair value liabilities in the above table. Additionally, as of December 31, 2013, we had offset $4.7 million of cash collateral deposits received from customers against the total amount of commodity fair value assets in the above table. The following table presents information about our assets and liabilities that are measured at fair value on a recurring basis that utilized Level 3 inputs for the periods presented (in thousands):12,702 8,969 417 4,150 4,150 (1,439) 86 (1,353) (1,353) (20) 20 The nature of inputs that are considered Level 3 are model inputs. Commodity contracts categorized in Level 3 are placed there due to the significance of the unobservable model inputs to their respective fair values. The unobservable model inputs, such as basis differentials, are based on the difference between the historical priceseach represented over 10% of our prior transactions and underlying observable data as well as certaincredit exposure to OTC derivative counterparties for a total credit risk related to non-performance. The effect on our income before income taxes of a 10% change in the model input for non-performance risk would not be significant.7811.13. Business Segments, Geographic Information, and Major CustomersBusiness SegmentsBased on the nature of operations and quantitative thresholds pursuant to the accounting guidance on segment reporting, we haveWe operate in three reportable operating business segments:segments consisting of aviation, marineland and land.marine. Corporate expenses are allocated to the segments based on usage, where possible, or on other factors according to the nature of the activity. Please refer to Note 1 for the dates that the results of operations and related assets and liabilities of our acquisitions have been included in our operating segments. The accounting policies of the reportableOur operating segments are determined based on the samedifferent markets in which we provide products and services, which are defined primarily by the customers and the products and services provided to those customers. Accordingly, our aviation, land and marine segments are organized based on the specific markets their functional business components serve, which are primarily businesses and governmental customers operating in those respective markets.In our aviation segment, we offer fuel and related products and services to major commercial airlines, second and third tier airlines, cargo carriers, regional and low cost carriers, airports, fixed based operators, corporate fleets, fractional operators, private aircraft, military fleets and the U.S. and foreign governments as those describedwell as intergovernmental organizations. In addition, we supply products and services to U.S. and foreign government, intergovernmental and military customers, such as the U.S. Defense Logistics Agency and the North Atlantic Treaty Organization (NATO).In our land segment, we offer fuel, lubricants, power and natural gas solutions through Kinect, our global energy management services platform, and related products and services to customers including petroleum distributors operating in the Summaryland transportation market, retail petroleum operators, and industrial, commercial, residential and government customers.Our marine segment product and service offerings include fuel, lubricants and related products and services to a broad base of Significant Accounting Policies (see Note 1).Within each of our segments we may enter into derivative contracts to mitigate the risk of market price fluctuations and also to offer our customers fuel pricing alternatives to meet their needs.Information concerning our revenue, gross profit, income from operations, depreciation and amortization and capital expenditures by segment is as follows (in thousands)millions):For the Year ended December 31, 2014 2013 2012 2017 2016 2015 17,268,834 16,087,611 14,692,042 $ 14,538.2 $ 10,914.4 $ 11,739.8 Land segment 10,958.0 8,918.8 9,274.3 13,843,307 14,790,342 14,750,425 8,199.3 7,182.5 9,367.2 12,274,248 10,683,994 9,502,871 43,386,389 41,561,947 38,945,338 $ 33,695.5 $ 27,015.8 $ 30,381.4 321,596 327,178 294,601 $ 440.5 $ 401.0 $ 361.9 Land segment 365.8 348.5 309.5 205,612 177,052 208,028 126.0 149.5 189.6 286,414 248,528 170,818 813,622 752,758 673,447 $ 932.2 $ 899.0 $ 861.0 142,303 150,886 128,153 $ 192.9 $ 160.5 $ 132.2 Land segment (7.9 ) 70.8 101.4 90,029 73,770 103,229 (57.8 ) 30.2 73.0 90,335 84,767 75,291 322,667 309,423 306,673 127.2 261.5 306.5 53,519 45,065 49,650 Corporate overhead - unallocated (81.6 ) (72.7 ) (60.9 ) 269,148 264,358 257,023 $ 45.6 $ 188.9 $ 245.7 15,419 15,854 17,381 5,559 5,362 5,387 34,684 20,861 10,406 Aviation segment $ 26.8 $ 24.2 $ 22.6 Land segment 49.8 47.1 32.9 Marine segment 5.8 6.6 6.4 3,737 2,633 3,540 3.5 4.4 3.7 59,399 44,710 36,714 $ 86.0 $ 82.3 $ 65.5 9,017 5,737 4,713 $ 12.3 $ 4.9 $ 13.4 Land segment 21.0 12.3 16.4 13,854 17,326 8,981 1.5 6.1 8.0 15,962 54,360 7,243 12,948 5,293 7,517 19.1 14.5 10.6 51,781 82,716 28,454 $ 54.0 $ 37.7 $ 48.4 (1) Includes a $52.4 million of restructuring charges and a $12.8 million impairment charge attributable to certain long term assets in 2017. (2) Includes a $79.1 million impairment charge attributable to the impairment of goodwill and other long term assets, and $1.4 million of restructuring charges in 2017. 79 net, goodwill, identifiable intangible assets, net, and total assets by segment is as follows (in thousands)millions):As of December 31, 2014 2013 2017 2016 686,496 771,178 974,041 1,205,005 647,315 562,459 2,307,852 2,538,642 178,143 115,507 73,068 69,088 404,867 298,996 656,078 483,591 67,142 31,632 7,196 5,730 139,253 129,840 Aviation segment, net of allowance for bad debt of $10.8 and $6.6 as of December 31, 2017 and December 31, 2016, respectively $ 1,013.0 $ 776.0 Land segment, net of allowance for bad debt of $6.6 and $8.2 as of December 31, 2017 and December 31, 2016, respectively 874.7 737.5 Marine segment, net of allowance for bad debt of $10.4 and $10.2 as of December 31, 2017 and December 31, 2016, respectively 817.9 830.5 213,591 167,202 $ 2,705.6 $ 2,344.0 1,635,371 1,686,437 $ 2,240.4 $ 2,050.6 Land segment 2,091.4 1,928.5 1,483,077 1,536,817 1,097.1 1,287.7 1,570,623 1,304,436 190,909 211,587 158.9 145.8 4,879,980 4,739,277 $ 5,587.8 $ 5,412.6 Geographic InformationInformation concerning our revenue income from operations, non‑current assets and total assets,property and equipment, net, as segregated between the Americas, EMEA (Europe, Middle East and Africa) and the Asia/Asia Pacific regions, is presented as follows, based on the country of incorporation of the relevant subsidiary (in thousands)millions):2014 2013 2012 21,514,304 21,149,175 20,216,891 8,612,751 7,017,479 7,247,754 9,844,682 10,215,412 8,404,324 3,414,652 3,179,881 3,076,369 43,386,389 41,561,947 38,945,338 52,226 49,874 67,041 121,660 109,650 82,964 74,737 70,547 71,054 20,525 34,287 35,964 269,148 264,358 257,023 80 For the Year ended December 31, 2017 2016 2015 Revenue: United States $ 17,938.0 $ 14,368.8 $ 15,496.3 EMEA (1)7,553.3 6,018.6 6,382.2 Asia Pacific (2)4,923.0 4,271.1 5,863.4 Americas, excluding United States 3,281.2 2,357.2 2,639.5 Total $ 33,695.5 $ 27,015.8 $ 30,381.4 2014 2013 As of December 31, 2017 2016 Property and equipment, net: 549,521 560,623 $ 152.6 $ 137.7 591,481 319,339 120.2 122.9 12,351 2,050 Asia Pacific 10.4 1.4 51,784 41,764 46.7 49.1 1,205,137 923,776 $ 329.8 $ 311.2 1,909,541 2,239,479 1,695,200 1,347,020 922,705 817,887 352,534 334,891 4,879,980 4,739,277 (1) United KingdomU.K. of $6.2 billion, $5.0 billion, $4.1 billion and $5.2$4.7 billion for 2014, 20132017, 2016 and 2012,2015, respectively.(2) $9.7$4.8 billion, $10.1$4.2 billion and $8.4$5.8 billion for 2014, 20132017, 2016 and 2012,2015, respectively.Major CustomersDuring each of the years presented on the consolidated statements of income and comprehensive income, none of our customers accounted for more than 10% of total consolidated revenue.12. Sales to government customers, which includes sales to the U.S. Defense Logistics Agency and NATO, have accounted for a material portion of our profitability in recent years and we expect this to continue in the foreseeable future. The profitability associated with our government business can be significantly impacted by supply disruptions, border closures, road blockages, hostility-related product losses, inventory shortages and other logistical difficulties that can arise when sourcing and delivering fuel in areas that are actively engaged in war or other military conflicts. Our sales to government customers may fluctuate significantly from time to time as a result of the foregoing factors, as well as the level of troop deployments and related activity in a particular region or area or the commencement, extension, renewal or completion of existing and new government contracts. Furthermore, changes in military policies or priorities, such as the decision to withdraw or reduce armed force levels in different geographies, can be sudden, subjecting us to losses or higher expenses associated with disposing of unused inventory, removal or abandonment of equipment and relocation of employees.14. Summary Quarterly Information (Unaudited)The following is a summary of the unaudited quarterly results for 20142017 and 20132016 (in thousands,millions, except earnings per share data):10,550,896 11,342,475 11,713,463 9,779,555 188,032 191,516 214,608 219,466 50,506 46,384 54,460 67,057 50,727 48,226 55,660 67,134 0.72 0.68 0.79 0.95 0.71 0.68 0.78 0.94 March 31, June 30, September 30, December 31, 2013 2013 2013 2013 2017 2017 2017 (1) 2017 (2)10,184,029 10,479,604 10,493,661 10,404,653 $ 8,194.3 $ 8,086.2 $ 8,543.0 $ 8,872.0 182,379 188,458 186,341 195,580 $ 231.4 $ 231.0 $ 239.9 $ 229.9 51,111 52,357 50,297 53,395 $ 31.1 $ 30.3 $ (37.9 ) $ (193.7 ) 48,725 51,016 51,472 51,862 $ 31.3 $ 30.0 $ (38.5 ) $ (193.1 ) 0.68 0.71 0.72 0.73 0.68 0.71 0.72 0.73 Basic earnings per common share (3)$ 0.46 $ 0.44 $ (0.57 ) $ (2.86 ) Diluted earnings per common share (3)$ 0.45 $ 0.44 $ (0.57 ) $ (2.86 ) March 31, June 30, September 30, December 31, 2016 2016 2016 2016 Revenue $ 5,190.8 $ 6,633.0 $ 7,399.8 $ 7,792.1 Gross profit $ 221.5 $ 218.5 $ 236.7 $ 222.3 Net income including noncontrolling interest $ 51.6 $ 29.8 $ 43.0 $ 2.1 Net income attributable to World Fuel $ 51.8 $ 30.0 $ 42.7 $ 2.2 Basic earnings per common share (3)$ 0.74 $ 0.43 $ 0.62 $ 0.03 Diluted earnings per common share (3)$ 0.74 $ 0.43 $ 0.61 $ 0.03 (1) Watson Petroleum operations since March 7, 2014 as a result of the acquisition.(2) Includes after-tax executive non-renewal charge of $3.0 million, or $0.04 per basic and diluted share in the second quarter of 2014.(3)Includes the Colt operations since July 29, 2014 as a result of the acquisition.(4)Includes after-tax gain on the sale of the crude oil joint venture interests of $9.9 million, or $0.14 per basic and diluted share inIn the fourth quarter of 2014.(5)(3) 81Item 16. Form 10-K SummaryWe have elected not to include the voluntary, summary information required by Form 10-K under this Item 16.SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Form 10‑K to be signed on its behalf by the undersigned, thereunto duly authorized, on the 12th day of February 2015.WORLD FUEL SERVICES CORPORATION President and Chief Executive Officer/s/ MICHAEL J. KASBAR Michael J. Kasbar Chairman, President and Chief Executive Officer Ira M. Birns Executive Vice President and Chief Financial OfficerPursuant to the requirements of the Securities Exchange Act of 1934, this Form 10‑K has been signed below by the following persons on behalf of the registrant and in the capacities indicated on the 12th day of February 2015.28, 2018.SignatureTitleTitle /s/ MICHAEL J. KASBAR Michael J. KasbarChairman, President and Chief Executive Officer Michael J. Kasbar (Principal Executive Officer) /s/ IRA M. BIRNS Ira M. BirnsExecutive Vice President and Chief Financial Officer Ira M. Birns (Principal Financial and Accounting Officer) /s/ CARLOS M. VELAZQUEZCarlos M. VelazquezSenior Vice President and Chief Accounting Officer(Principal Accounting Officer)Ken BakshiDirector /s/ JORGE L. BENITEZ Director Jorge L. Benitez Director/s/ STEPHEN J. GOLD Director Stephen J. Gold /s/ RICHARD A. KASSAR Director Richard A. Kassar Director/s/ MYLES KLEINMyles KleinDirectorDirector John L. Manley Director/s/ J. THOMAS PRESBY Director J. Thomas Presby Director/s/ STEPHEN K. RODDENBERRY Director Stephen K. Roddenberry Director/s/ PAUL H. STEBBINS Director Paul H. Stebbins Director8292