2.Correction of Previously Issued Financial Information

During the second quarter of 2016, we identified a correction to our provision for income taxes for certain prior periods, due to the accounting for the tax effects of foreign currency translation changes on intercompany loans that are considered to be of a long-term investment nature. The Company determined that it had incorrectly applied the accounting guidance in ASC 740, Income Taxes and recorded a deferred tax asset related to foreign currency translation losses in the provision for income taxes, resulting in the Company reporting a lower provision for income taxes in the periods that were impacted.

In accordance with Staff Accounting Bulletin (“SAB”) No. 99, Materiality, and SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, management evaluated the materiality of the error from qualitative and quantitative perspectives, and concluded the error was not material to its previously issued annual and interim financial statements. The cumulative amounts of the corrections were approximately $20.0 million, of which approximately $12.5 million was attributable to the year ended December 31, 2015. The cumulative amount of the prior period adjustments would have been material to our current Statement of Income and Comprehensive Income had we made the correction in the current period, and accordingly we revise our previously issued financial statements prospectively to correct these errors.

The corrections associated with the provision for income taxes line items as well as other immaterial adjustments are reflected in this 10-Q Report for all periods presented and those corrections will be reflected in our future fillings.

The following tables present the effect of the correction on the previously reported consolidated balance sheet as of December 31, 2015 and the statements of income and comprehensive income for the three and six months ended June 30, 2015:

Consolidated Balance Sheets

(Unaudited - In millions, except per share data)





	As of December 31, 2015
	As
	Reported		Adjustment	Revised
Assets:
Current assets:
Cash and cash equivalents	$	582.5	-	$	582.5
Accounts receivable, net		1,812.6	-		1,812.6
Inventories		359.1	-		359.1
Prepaid expenses		57.9	-		57.9
Short-term derivative assets, net		227.2	(6.8)		220.4
Other current assets		209.8	(1.8)		208.0
Current assets held for sale		5.5	-		5.5
Total current assets		3,254.6	(8.6)		3,246.0

Property and equipment, net		225.6	-		225.6
Goodwill		675.8	-		675.8
Identifiable intangible and other non-current assets		356.9	(15.5)		341.4
Non-current assets held for sale		36.5	-		36.5
Total assets	$	4,549.4	(24.1)	$	4,525.3

Liabilities:
Current liabilities:
Short-term debt	$	25.5	-	$	25.5
Accounts payable		1,349.6	-		1,349.6
Customer deposits		118.3	-		118.3
Accrued expenses and other current liabilities		263.8	(8.6)		255.2
Current liabilities held for sale		5.6	-		5.6
Total current liabilities		1,762.8	(8.6)		1,754.2

Long-term debt		746.7	-		746.7
Non-current income tax liabilities, net		87.7	-		87.7
Other long-term liabilities		25.8	-		25.8
Non-current liabilities held for sale		5.0	-		5.0
Total liabilities		2,628.0	(8.6)		2,619.4

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 shares authorized, 70.8 issued and outstanding as of December 31, 2015		0.7	-		0.7
Capital in excess of par value		435.3	-		435.3
Retained earnings		1,588.6	(19.2)		1,569.4
Accumulated other comprehensive loss		(113.2)	3.7		(109.5)
Total World Fuel shareholders' equity		1,911.4	(15.5)		1,895.9
Noncontrolling interest equity		10.0	-		10.0
Total equity		1,921.4	(15.5)		1,905.9
Total liabilities and equity	$	4,549.4	(24.1)	$	4,525.3

Consolidated Statement of Income and Comprehensive Income

(Unaudited - In millions, except per share data)



	For the Three Months ended					For the Six Months ended
	June 30, 2015					June 30, 2015
	As Reported		Adjustment	Revised		As Reported		Adjustment	Revised
Revenue	$	8,496.4	—	$	8,496.4	$	15,837.1	—	$	15,837.1
Cost of revenue		8,306.0	—		8,306.0		15,431.3	1.8		15,433.1
Gross profit		190.4	—		190.4		405.8	(1.8)		404.0
Operating expenses:
Compensation and employee benefits		87.5	—		87.5		176.2	—		176.2
Provision for bad debt		2.3	—		2.3		3.6	—		3.6
General and administrative		59.0	—		59.0		113.0	2.0		115.0
		148.8	—		148.8		292.8	2.0		294.8
Income from operations		41.6	—		41.6		113.0	(3.8)		109.2
Non-operating expenses, net:
Interest expense and other financing costs, net		(6.4)	—		(6.4)		(13.7)	—		(13.7)
Other (expense), net		(1.6)	—		(1.6)		(1.3)	—		(1.3)
		(8.0)	—		(8.0)		(15.0)	—		(15.0)
Income before income taxes		33.6	—		33.6		98.0	(3.8)		94.2
Provision for income taxes		5.2	(0.6)		4.6		15.1	0.8		15.9
Net income including noncontrolling interest		28.4	0.6		29.0		82.9	(4.6)		78.3
Net loss attributable to noncontrolling interest		(1.5)	—		(1.5)		(2.6)	—		(2.6)
Net income attributable to World Fuel	$	29.9	0.6	$	30.5	$	85.5	(4.6)	$	80.9

Basic earnings per common share	$	0.42	0.01	$	0.43	$	1.21	(0.07)	$	1.14

Basic weighted average common shares		70.7	—		70.7		70.7	—		70.7

Diluted earnings per common share	$	0.42	0.01	$	0.43	$	1.20	(0.06)	$	1.13

Diluted weighted average common shares		71.2	—		71.2		71.3	—		71.3

Comprehensive income:
Net income including noncontrolling interest	$	28.4	0.6	$	29.0	$	82.9	(4.6)	$	78.3
Other comprehensive income (loss):			—					—
Foreign currency translation adjustments		22.0	(0.6)		21.4		(11.8)	1.2		(10.6)
Other comprehensive income (loss)		22.0	(0.6)		21.4		(11.8)	1.2		(10.6)
Comprehensive income including noncontrolling interest		50.4	—		50.4		71.1	(3.4)		67.7
Comprehensive loss attributable to noncontrolling interest		(1.2)	—		(1.2)		(0.1)	—		(0.1)
Comprehensive income attributable to World Fuel	$	51.6	—	$	51.6	$	71.2	(3.4)	$	67.8