Ladies and gentlemen, thank you for standing by. Welcome to the World Fuel Services 2014 Second Quarter Earnings Conference Call. My name is Ash, and I will be coordinating the call this evening. During the presentation, all participants will be in a listen-only mode. After the speakers' remarks, there will be a question-and-answer session. Instructions on how to ask a question will be given at the beginning of the Q&A session. (Operator Instructions). As a reminder, this conference is being recorded Wednesday, July 30, 2014. I would now like to turn the conference over to Mr. Glenn Klevitz, World Fuels' Assistant Treasurer. Mr. Klevitz, you may begin your conference.

Thank you, Ash. Good evening, everyone. Welcome to the World Fuel Services second quarter earnings conference call. My name is Glenn Klevitz, World Fuels' Assistant Treasurer, and I'll be doing the introductions on this evening's call, alongside our live slide presentation. This call is also available via webcast. To access the webcast or future webcasts, please visit our website, www.wfscorp.com and click on the webcast icon. With us on the call today are Michael Kasbar, Chairman, President and Chief Executive Officer; and Ira Birns, Executive Vice President and Chief Financial Officer. By now, you should have all received a copy of our earnings release. If not, you can access the release on our website. Before I get started, I would like to review World Fuel's Safe Harbor statement. Certain statements made today including comments about World Fuel's expectations regarding future plans and performance are forward-looking statements that are subject to a range of uncertainties and risks that could cause World Fuel's actual results to materially differ from the forward-looking information. A description of the Risk Factors that could cause results to materially differ from these projections can be found in World Fuels' Form 10-K for the year ended December 31, 2013, and other reports filed with the Securities and Exchange Commission. World Fuel assumes no obligation to revise or publicly release the results of any revisions to these forward-looking statements in light of new information or future events. This presentation also includes non-GAAP financial measures as defined in Regulation G. A reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures is included in World Fuels' press release and can be found on its website. We’ll begin with several minutes of prepared remarks, which will then be followed by a question-and-answer period. At this time, I would like to introduce our Chairman, President and Chief Executive Officer, Michael Kasbar.

Thank you, Glenn, and good afternoon, everyone. Today, we announced second quarter earnings of $51 million or $0.72 per diluted share excluding the impact of a one-time charge. The diversity and resiliency of our business model once again allowed us to produce solid results. Where our land segment produced record results last quarter making up for some of the shortfalls in our aviation segment, this quarter our aviation segment’s profitability bounced back to make up for the declines we witnessed in some of our land activities. This diversified approach allows us to weather the inevitable cycles and market dynamics we face in various business segments while continuing to focus on our long-term strategic vision of building a diversified global downstream distribution business providing fuel and energy solutions for transportation, commercial and industrial wholesalers and end users. As we indicated on the last quarter’s call, the aviation segment realized an increasing profitability due to increased activity coming from our government business in Afghanistan. Although the level of business has been experiencing a general decline over the past few years, recent announcements regarding the continued presence of forces in the region suggest that opportunities for our company to provide mission support should continue through 2015 and beyond. Additionally, in the second quarter, our commercial aviation business observed the usual seasonal increases in results coming from our resale activities in North America, Europe and Asia. We expect to see continued seasonal increases again in the third quarter, as the summer months have historically experienced an increase in performance. We are also encouraged by expanding passenger demand and financial strength throughout the industry, which provides greater opportunities to expand customer relationships in various existing and new markets. The long-term trend for growth in passenger miles over the next 20 years is robust further supporting…

Thank you, Mike, and good evening, everybody. Before I comment on our results, I would like to note that our second quarter land and consolidated results include a full quarter of operating results for Watson Petroleum compared to less than one month in the first quarter as the Watson acquisition closed in early March of this year. Consolidated revenue for the second quarter was $11.3 billion, up 8% sequentially and year-over-year. Approximately 55% of the year-over-year increase was related to increases in volume and the remainder was a result of higher average fuel prices. Our aviation segment generated revenues of $4.4 billion, an increase of 4% sequentially and 18% year-over-year. Approximately 85% of the year-over-year increase was a result of increased volume and the remainder was the result of higher average fuel prices. Our marine revenues were $3.5 billion, up 2% sequentially but down 11% year-over-year. The entire year-over-year decrease was related to a decrease in volume offset partially by an increase in fuel prices. Finally, the land segment generated revenues of $3.4 billion, up 20% sequentially and 22% year-over-year. The year-over-year increase was principally related to volume from acquired businesses. Our aviation segment sold 1.4 billion gallons of fuel during the second quarter, an increase of 75 million gallons or 6% sequentially and approximately 200 million gallons or 17% year-over-year. Volume in our marine segment for the second quarter was 6.1 million metric tons, up 1% sequentially but down approximately 1.3 million metric tons or 17% year-over-year. Our land segment volume in the second quarter was 1.06 billion gallons, up 100 million gallons or 10% sequentially and approximately 150 million gallons or 17% from the second quarter of 2013. Our land segment has now achieved an annual run rate of over 4 billion gallons for the first time, a…

Thank you. (Operator Instructions). Our first question comes from the line of Jon Chappell with Evercore. Please proceed with your question.

Thanks. Mike, I wanted to ask about the land business first. So, obviously, there is some seasonality involved here. You talked about the impact of winter in the first quarter, that helped and then (indiscernible) there is a sequential impact there. But is there any way to kind of quantify what you would consider one-time or seasonal impacts on the land business, because if you just look sequentially, it sound pretty meaningfully from the first quarter and even the fourth quarter and then if you compare it to the second quarter of last year, it was flat but you’ve also made some acquisitions in the meantime. So just trying to figure out a better kind of normalized run rate to use for that land business going forward?

We’ve got a lot of moving pieces in that, Jonathan, and I’d sort of apologize for that as we kind of work our way through all of the different pieces of our growing land empire, if you will, as we started this journey back in 2008 in earnest with the gasoline business. It was a nice business. It’s nice and ratable, not so easy to grow it organically. So we put a few other pieces into it, our crude oil activity, the natural gas which we brought on about a year ago from U.S. Energy was a significant impact last quarter with the TransCanada pipeline blowing up and that was an opportunity not likely to be repeated. The thing with all of our businesses is that you are going to have these disruptions and certainly you look at our government business activity, you’re seeing activity coming there. In terms of getting this predictable ratability to it, we’re not quite there. So, I don’t know if you want to sort of add some more color to that?

Yes, just one thing, Jon, in terms of your question about one-time, I’d say there’s about a $10 million drop-off in GP sequentially. You can probably attribute half of that to what was of the kind of one-time variety in the first quarter, which was the nat gas related pickup because of the historic winter that we had here in the States. The rest of it relates to what I described earlier in terms of margin pressures in both Brazil and the crude marketing business.

Okay, that’s helpful. For my follow up I wanted to push a little bit more on the government piece. It’s always been this kind of sword that’s been hanging over you for a while. You knew it was going to kind of bleed away at some point and it’s still kind of happening. But it sounds like there is potential for – I don’t know if recovery is the right word, but a little bit of a snapback maybe in 2015 as you look at opportunities out there. Is there any way to kind of put some quantitative thoughts around when it bottoms out but then what the opportunity for snapback could be maybe in 2015?

Yes, it certainly will – well, I’d take back the word certainly, but based on what we’re seeing today the expectation is that in the second half of this year, the level of activity will most likely decline although you never know. And in 2015 if there are some opportunities, it’s impossible to quantify what they may be. I think the point we were trying to raise, I believe the assumption for many, were that after we got through the rest of this year, we were probably down to zero. And I guess the point we’re trying to make is that’s not necessarily the case but we don’t have any concrete evidence to support a number at this point. But there are greater opportunities than we would have assumed there were going back a quarter or two.

Right, okay, understood. Thanks, guys.

Thanks, Jon.

Our next question comes from the line of Gregory Lewis from Credit Suisse. Please proceed.

Yes, thank you and good afternoon, guys.

Hi, Greg.

Hi, Greg.

Could you talk a little bit more about the Colt acquisition? And clearly this is sort of the evolution of World Fuel developing? I guess any sense on what the potential is for margins from Colt would be pretty helpful?

Well, without giving you an exact number, our general aviation business generally operates as you could imagine or we’ve discussed in the past at a higher margin than our overall aviation business which mixes in everything from government business in Afghanistan to large commercial airlines here in the U.S. So while it would benefit margins a bit, it is a relatively small piece compared to the overall aviation business. So it’s not going to move the needle materially but it’s certainly a positive as opposed to a negative if you want to look at it that way.

Okay, great. And then just shifting gears over to the opportunities in natural gas, Michael, as you think about the landscape over the next two years in land. I mean clearly, there’s been a lot of conversations about World Fuel for you guys finding opportunities in the land side of the business. I guess when it comes to natural gas, is this something really where it’s going to have to be organically built or are there actually opportunities for you to go out and find the acquisitions in sort of the nat gas space?

There’s absolutely acquisitions and we certainly have a lot on the table and we’ve kind of moved into a lot of houses at the same time, if you will. If you look at some of the last acquisitions that we’ve made between Multi Service on the technology side, Watson on the logistics and distribution and then U.S. Energy on natural gas. We’ve got a lot going on at the same time and we’re doing I think a significantly better job of integrating those companies into the company having the center provide better services. So we feel really good about the U.S. Energy business. Natural gas is a very happening source of energy certainly in this country and we’re seeing it for a variety of reasons not only economic but also environmental is becoming a fuel of choice and an energy source of choice. So we’ll definitely grow that organically. We know how to do but there are opportunities to expand that through acquisitions. So, as we get that [humming] (ph) along, we’ll definitely go after that. We’ve already started to expand it organically into new geographies because it is a global business. So the beauty of all the things we’re doing is they’re all global. So once we get those mouse traps working properly, our global platform becomes a great way to expand it.

All right, perfect, guys. Thank you very much.

Thanks, Greg.

Our next question comes from the line of Jack Atkins with Stephens. Please proceed with your question.

Good evening, guys. Thanks for the time.

Hi, Jack.

So I guess just to kind of go back to the Colt acquisition for a moment. If I’m understanding the business correctly, there’s a component of that that’s tied to I guess aviation payment cards and I think it complements your existing aviation payment processing business. Could you maybe comment on is that a significant portion of Colt’s business? And I’m just sort of curious overall within your aviation gross profit line, how much of your aviation gross profit is tied to that high margin fee-based business, because I think that’s something that I think investors would give you a bigger multiple for if they kind of knew how much that was?

So the Colt addition to our group, they’re focus is on fuel and ITPS, international trip planning services. And a big chunk of that business activity is going on that fuel card. We haven’t broken that out from essentially Multi Service. That essentially hosts that activity for us and we’ve consolidated that into the overall segment that represents. But Colt was a significant player within the business aviation space. It’s going to be pretty additive to that aviation payment side. But as I mentioned earlier, we’ve moved into a lot of houses at the same time and we haven’t seen the growth that we’re looking for within those technology offerings. We won a significant contract with the U.S. military. We have our [ad card] (ph) business that we picked up in 2007. We picked up a handful of merchant software businesses in the business aviation space. All of that we put under Multi Service’s roof. So they’ve taken that. That was the logical way to consolidate that. I think we’re still looking for the type of growth that we’re going to see out of that, so thanks Jack for calling that out, but we’re not exactly there in terms of seeing the type of traction but it certainly is our intention. And that I think is something that you’ll see over the next 12 months.

Okay, that’s helpful. Mike, just given all the geopolitical instability that’s sort of popped up here over the last several months whether it’s in Eastern Europe or the issues in the Middle East. Are you seeing more volatility out there in the fuel markets? Generally speaking, volatility helps drive better profitability for your business. I mean, are you seeing anything that – granted these are very challenging times geopolitically, but are you seeing anything to make you think that volatility is maybe creeping back into the fuel markets to some degree?

Thanks for asking the question, Jack, because I’m not sure that – if you look at the environment that we operate in, you’ve got oversupply, overcapacity of almost everything in the marketplace today whether it’s refining, whether it’s shipping. I’d say the U.S. airlines have done a pretty good job in terms of working their capacity. Some of the foreign carriers I think are losing a little bit track of that. You look at low interest rates. Some part of what we’re doing is financing. And then you look at the disruptions in the marketplace. All of those disruptions would have caused significant volatility and some amount of turmoil, which we sort of thrive on. We obviously smooth out that for the marketplace. But the U.S. market [share oil] (ph), all of that has really been subdued. So the market is remarkably stable. You look at Libya and some of the other things that are going on in the marketplace whether it’s Russia, Ukraine, so it’s just remarkably stable which is certainly good for those folks who were trying to plan their businesses against the price of energy but it doesn’t show – some of our best capabilities is managing volatility. So, considering all of the markets and the environment, I think we’re not doing bad. We certainly are looking for significantly better results than what we have on the table and we’re continuing to invest in our platform. I think we got a fantastic group of people and a fantastic business where we handle about 1 million barrels a day of liquid energy. So we are a significant participant in global energy markets. I don’t know how many companies can talk about that and dealing with end users. So, volatility has not been there despite everything that’s going on and that’s because the market is oversupplied and you don’t have a lot of demand. And the new sources of supply has offset the disruptions that in another market environment you would have seen prices going haywire. So, anyway, kind of a longwinded answer but there you have it.

No, that’s very, very helpful, Mike. Thank you for that insight. And then one last follow up, if I might. Ira, looking at the operating expenses ex-bad debt expense and the executive charge, they were a good bit lower in the second quarter than I think you told us to sort of think about in the last conference call. I think you were saying like $130 million to $134 million. I guess, is that a reflection of flexibility in your cost structure and you guys are sort of managing that with the issues in the land segment or was there something else there that maybe took cost lower than what you were expecting? And then if you could help us sort of bridge the sequential increase in those core operating expenses, I think that would be helpful, just a portion of that is tied to the acquisition and what portion of that is just general inflation within the business?

Sure. I’ll try my best at both, Jack. On the first part, I would say the principal driver of why the number was lower than what I projected on last quarter’s call is that our forecast for overall compensation principally incentive comp which is the variable was higher than where it actually came out in the quarter. So we kind of overestimated that one. It’s a very complex set of calculations that get us there and that number tends to move around a bit quarter-over-quarter. It’s moved around more from a favorable standpoint in Q2. If you take the 126 million which excludes the one-time charge and you want to bridge the gap to the forecast for next quarter, I’d say the midpoint in the forecast is [130.25] (ph), so that’s a $6.5 million increase. I would say about two-thirds of that relate to the Colt acquisition including their core operating expenses plus about $1 million of one-time expenses related to the deal that we will book in the third quarter and the rest of that is kind of, as you described it, inflationary numbers in terms of forecasting not being an exact science. So there’s a couple million dollars of that in there in addition to Colt.

Okay, great. Thanks again for the time, guys.

Thanks, Jack.

Our next question comes from the line of Kevin Sterling with BB&T Capital Markets. Please proceed with your question. Kevin Sterling - BB&T Capital Markets: Thanks. Good evening, gentlemen.

Hi, Kevin.

Hi, Kev. Kevin Sterling - BB&T Capital Markets: Hi. You guys have talked for a while about the acquisition pipeline being full and I’m not asking if two specific market segments you’re finding more attractive, but maybe rather the size of acquisitions you’re targeting. If I’m not mistaken, Watson was your largest to-date, roughly 190 million; Colt was sizable, over 63 million. Are you finding more opportunities with companies with existing scale and size or are you seeing just too much opportunities with companies such as U.S. Energy where you can pick up a smaller company and kind of grow that business organically?

It’s pretty much all over the board, Kevin. There are plenty of tuck-ins, bolt-ons. We’ve been looking historically at these companies that have been the size that you’ve seen, looking at larger companies, something that we review from time to time. So it’s pretty much all over the board. But there is certainly plenty of these smaller companies that fit within all of the areas that we’re active in and fit with division of that downstream side, the supply and trading side, the technology and software and the marketing and underwriting side. So it’s continuing to look at the geographic expansion. Certainly Asia is an area that we’d like to focus on as well with the growth and the long-term growth prospects there. We’re looking at that more closely today than we have in the past. We’ve got a fantastic organization all throughout Asia. So, it’s really all over. And Watson was a good size, Multi Service was a good size, so you’re starting to see the size of these acquisitions pick up but there’s a lot out there. As you’d imagine with a company of our size and global footprint, the opportunity set we have is significant and we’re continuing to evolve and define more clear runways in technology and software, marketing and underwriting, logistics and distribution, supply and trading, so all of those are candidates for us. So it’s pretty endless to be honest with you. Kevin Sterling - BB&T Capital Markets: Right, okay. Thanks. That was some good color. Some of the smaller acquisitions, you look at the tuck-ins and (indiscernible) but some of these small guys, is it still the kind of the same story we’ve heard a couple of years. They just don’t have the working capital or the balance sheet to grow, they don’t have the scale and that’s why they’re good with you guys because you do have that ability to grow?

Yes, I mean it depends what business they’re in. On the natural gas side, there is interesting opportunities there. On the infrastructure side, there has not been a surplus of people that understand the technology to be able to put together all of the pieces to get LNG for marine or micro-LNG within various different markets. You’ve got a tremendous amount of natural gas in this country. It’s inexpensive, it’s economic but that requires a certain amount of technical skill and it requires an infrastructure build out. So those opportunities are interesting for us. We like that. It’s happening. So it’s across the board. You’ve got generational issues as you’d imagine, so it really just depends. On the technology side, that has other attributes to it as well. So, typically, there is some missing component and we provide, I think, a great place for showing owners and shareholders to put their companies in a good place and for some of those individuals to be able to express themselves in ways that they could and working for their own businesses. Kevin Sterling - BB&T Capital Markets: Right, okay, thank you. And last question here. You guys talked about the strength in aviation and talked about strong passenger demand you’re seeing. As we go forward in aviation the next couple of years when you look at the Boeing and the Airbus order book and how massive they are, these larger planes coming on line, but they also are more fuel efficient. Does that possibly damper your potential growth in aviation or is it something we just kind of track monitoring passenger activity? How should we kind of think looking forward aviation with the strength we saw this quarter possibly continuing?

Yes. Boeing just released their market forecast, I forget what they call it, but… Kevin Sterling - BB&T Capital Markets: Full year forecast.

That’s right. So they show over the next 20 years practically a doubling of passenger – mostly passenger aircraft. Freighters increased too but it’s largely passenger aircraft related. Today, new aircraft are about 20% fuel efficient. How much more fuel efficient they’re going to be 20 years from now, who knows. I think it’s safe to say that you’re going to have increased consumption. That’s I think a fair position to take. You’re going to have alternative fuels. We’re very much all over alternative fuels. We’ve made some investments into some of the best ventures along those lines. We’ve also diversified into services, technology. Airlines typically are focused on running their airline, servicing their passengers, so procuring energies and dealing with energy and fuel and dealing with the logistics on ground handling is another part of our business and it’s a growing part of our business. And we’re doing that not only on business aircraft but also on commercial aircraft whether it’s ferrying flights or providing pilots any number of different levels of service. So it’s really about doing this the surround sound to our clients, providing for them what we can provide more efficiently than at scale than they can provide individually. So it’s beyond fuel. Kevin Sterling - BB&T Capital Markets: Right, okay. Thanks so much for your time and sorry about the loss of Lebron James.

Yes.

It’s all right, Kevin. We’ll get you back for that one.

Our next question comes from the line of Shawn Collins with Bank of America. Please proceed with your question.

Great. Thank you. Hi, Michael. Hi, Ira. How are you?

Hi, Shawn.

Hi, Shawn.

Just on the marine segment, you referenced a shipping industry slump. Are you seeing any signs of a turnaround there or any change in the end market? And if not, what type of conditions are you seeing there?

It’s really not a great market. I mean you do have some pockets, some specialty businesses perhaps chemical, offshore but the bulk of the marketplace, the bulk market, the containers, the tanker, the vast majority of ocean transportation is not doing well. So we tried to and we have successfully gone into different specialty markets that requires specialty services and that’s been a good thing for us. It’s good to be challenged with the market because you’ve got to come up with some innovation and creativity and our team has done an excellent job of that. But overall the market is very sluggish. I don’t think everyone is forecasting – a lot of people have been forecasting that we’ve seen the last of it, but I think we’re in it for a little while longer. It’s all really a function; supply/demand global economic growth. The shipping industry is able to push out a ship a whole lot quicker today than it used to, so it’s really probably not unlike the aviation industry where you’re coming up with discipline, with capacity, but I don’t know if we’ve ever really going to see that. You’ve got private equity that’s coming to the mix as values of assets are extremely low. So, a tough place to do business that’s for sure. So we understand it. We’ve got a tremendous risk management team and it’s really continuing to diversify our position within that shipping space and also from a corporate perspective diversify our participation in just transportation, logistics and energy.

Okay, great. I appreciate the thoughts. Just a real quick follow up. I know we’re getting late here, but on the Colt acquisition, the international trip planning services segment I suspect that has a different business profile than the rest of your businesses. And can you just talk about how it fits in with your other business and kind of how you thought about it as part of that segment?

So we’ve been in the trip planning space since 1998 when we acquired BaseOps and what that is, as it relates to business aviation, they need a flight plan, they need weather routing, they need over-flight permits, they need ground handling. So that’s what our trip planning services does for those corporate aircraft or general aviation and we provide that around the world. We also do that for commercial aircraft. So we’ve been doing that for a long, long time and Colt has excellence in that space and we got some tremendous synergies between what Colt does, what World Fuel does through our Spire brand and BaseOps does. So we’re not stranger to it. We’ve been in it for a while. We’ve got specialized software for it and experts around the world that provide those logistical support services and flight services to both commercial and private aircraft.

Okay, that’s great. Thank you for that color. That’s all from me. Thank you for the time and the insight.

Okay.

Thanks, Shawn.

Mr. Kasbar, there are no further questions at this time. I will now turn the call back to you for closing remarks.

I just want to thank everyone for the support, especially our shareholders and our fantastic employees. It’s tough global economic conditions, everybody knows that and I feel like our company is performing well. We look forward to talking to you next quarter with continuing reports on our results and activities.

Ladies and gentlemen, that does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your line.