Good afternoon. My name is Brianna, and I will be your conference operator today. At this time, I would like to welcome everyone to the World Fuel Services third quarter earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. (Operator instructions) Thank you. Mr. Frank Shea, Chief Risk and Administrative Officer, you may begin your conference.

Good evening, everyone, and welcome to the World Fuel Services third quarter conference call. I am Frank Shea, Executive Vice President and Chief Risk and Administrative Officer and as is evident, I’m doing the introductions on this evening’s call. Today’s call is also available via webcast. To access this webcast or future webcasts, please visit our website and click on the website icon. With us on the call today are Paul Stebbins, Chairman and Chief Executive Officer; Michael Kasbar, President and Chief Operating Officer; Ira Birns, Executive Vice President and Chief Financial Officer; and Paul Nobel, Senior Vice President and Chief Accounting Officer. By now, you should have all received a copy of our earnings release. If not, you can access our release on our website. Before we get started, I would like to review World Fuel’s Safe Harbor Statement. Some of the comments to be made on this evening’s call may include forward-looking statements under the Private Securities Reform Act of 1995. These statements involve risks and uncertainties that could cause actual results or facts to differ materially from such statements. Detailed information about these risks is contained in the company’s SEC filings, which are available on the company’s website or from the SEC. We will begin with several minutes of prepared remarks, which will then be followed by a question-and-answer period. For members of the press during the questions-and-answer period, please note that you should be in the listen-only mode. At this time, I would like to introduce our Chairman and Chief Executive Officer, Paul Stebbins.

Thanks, Frank. Good afternoon and thank you for joining us. There is not a person on this call today who has not been impacted personally and professionally by the extraordinary event that expired in Q3, a time of unprecedented upheaval and crisis in the global financial markets. Today, the bailout of Fannie Mae and Freddie Mac seem a distant memory when compared to the financial black hole created by the global credit crisis. The uncertainty over asset valuations brought bank liquidity to a standstill, while governments throughout the world struggled to respond and take radical action to restore confidence. The bankruptcy of Lehman Brothers sent shockwaves through the international markets, and triggered defaults and heightened concerns about counter-part risks in every major market in the world and the rapid deceleration of the global economy caused oil prices to plummet, while shipping rates and air traffic volumes abruptly declined. This perfect storm of events precipitated a collapse in investor confidence, a free fall in the equity markets, and the evaporation of trillions of dollars in valuation. No business model in the world was immune to these events, and World Fuel was no exception, but extraordinary market conditions call for extraordinary measures. While our corporate finance team focused on fortifying our balance sheet and strengthening liquidity, our global commercial team focused on using our financial strength to add value to our global customers and suppliers who are confronting the most challenging operating environment of recent history. At a time of maximum uncertainty, our strong balance sheet, excellent liquidity and robust global network provided safe harbor to both customers and suppliers who are deeply concerned about counter-party risks and reeling from a highly volatile and uncertain market. Our customers valued our ability to provide credit, operational and logistical support, and real-time visibility into…

Thanks, Paul, and good evening everybody. Revenue for the third quarter was $5.5 billion, down 4% sequentially, but up 51% compared to the third quarter of last year. Our marine segment revenues were $2.9 billion, down 4% sequentially, but up 46% year-over-year. The aviation segment generated revenues of $2 billion, down 9% sequentially, but up 42% from last year’s third quarter and finally, our land segment grew to $483 million, up 32% sequentially and 215% from last year’s third quarter, including the impact of the Texor acquisition, which we closed in June. Before I review our results by segment, while it may be obvious, I would like to point out that the year-over-year increases in revenue were significantly impacted by the increase in fuel prices. Our aviation segment sold 517 million gallons of fuel during the third quarter. That’s down 13% sequentially, and down 16% compared to the third quarter of last year. The sequential reduction in volume was principally due to our continued efforts to reduce exposure to low-margin, higher-risk accounts. Such decline was also impacted by the termination of a single account relationship as of July 1, which represented approximately 30 million gallons of quarterly volume. Based upon the actions we have already taken, it would be safe to assume that our overall aviation volumes will decline further in the fourth quarter. Our marine segment’s total business activity was seven million metric tons, down 6% sequentially, and relatively flat year-over-year. Fuel reselling activities constituted approximately 76% of total marine business activity in the quarter, generally consistent with the average percentage of such activity over the past several quarters. Our land segments sold 142 million gallons during the quarter, up 38% sequentially, and up over 100% compared to the same quarter a year ago. These amounts include Texor volumes…

Operator, we can now open it up for questions.

(Operator instructions) Your first question comes from the line of Jon Chappell from JP Morgan. Jon Chappell – JP Morgan: Thank you, good afternoon guys. Paul, you gave some color at the beginning. I was just looking for a little bit more detail. The way I understood it, your higher risk customers were your higher margin customers, needed to charge them more to take on that risk. In this quarter, your margins are through the roof, and you’ve improved your counter-party risk or your exposure towards quality customers, how are you able to kind of get the best-case scenario out of both of them?

Focus, I mean you’ve got an entire marketing team that’s trying to navigate one of the most extraordinary operating environments in the history, certainly unprecedented, and I would say that we are, we take a lot of comfort as I mentioned in my opening remarks about having made a strategic decision a couple of years ago to really concentrate our sales and marketing efforts on a best-in-class sort of part of the market. So we never made a migration deeper into the pool because we decided that really our value-added services were going to be appreciated by these large global fleets, that that should be the focus of our effort, and I think that by more deeply entangling ourselves with those customers by our better understanding of the markets, we were able to basically deliver a good result, and also add competitive value to those customers and allow them a great deal of comfort navigating a difficult market. So I think it’s just a combination of all of these factors coming together, a complex and volatile market, a fact that the competitive landscape has changed because in a market where there’s a tremendous amount of focus on counter-party risk and liquidity and balance sheet and visibility and transparency, some of the more, some of the privately-held groups that perhaps don’t have that same visibility were being challenged. Certainly, everybody is concerned about credit and counter-party risk in this market, which is a huge competitive differentiator for us given our transparency and the strength of our position. So there is a value to what we provide, and I think it’s a matter of just understanding that we can deliver that service, we can add the value to both customers and suppliers, and deliver a good result at the same time. Jon Chappell – JP Morgan: Is this the kind of market where you just, you don’t even care about market share, and how do you balance going after new customers or do you just focus on the customers you have right now, the ones that you know are the blue chips, you don’t mind trimming some of the lower margin risk of your business, and you can just focus on your value-added products with the current customer base?

Yes, no I think you said it pretty well. I think as we think about where our sweet spot is and where you should focus your energy, obviously in a market, if we’re going to be stewards of this franchise, which I believe we are, our focus should always be on mitigating risk. So from our perspective, it’s first, last, and always understanding who those customers are, understanding how much appetite we have, understanding how we can manage that and staying away there’s no need to go chase volume in a market that we perceive to have a degree of risk that’s different from perhaps a more stable market. So I would say that we’ve done an excellent job. I tell you, hats off to our credit team and to the business teams, who really have deep understanding of what they’re doing, and yes, we’re going to have our challenges from time to time, but I would say it’s all about deep focus, a lot of commitment and expertise, and then the ability to execute. So I think we’ve done a good job of navigating that, and market share per se is not so much the issue, although what I would say is that in a market like this, it does create opportunities to pick up some market share just because of the change in disposition of the oil companies. As you might imagine, their core competence is really looking at return on capital in the upstream market. So they don’t have a huge appetite for a lot of risk downstream, and I think they’re looking at us as a real value-add partner to help them navigate that market, to help insulate them from some of that risk, allow them to move volume, while reducing their own risk. So to some extent, I think that they could be the benefit of picking up some market share, but our real focus is not just getting market share. It’s protecting the franchise, mitigating the risk, and focusing on good performance and return. Jon Chappell – JP Morgan: Okay, one last one and I’ll turn it over. Opportunities to pick up new customers are probably pretty evident, but are there also opportunities to pick up either complementary businesses or direct competitors in your core businesses, and have you looked at maybe all three segments differently than you would have maybe six months ago now that you’re in a far better financial position than most of your competitors?

Yes, yes to all. I think that when you consider the landscape that we’re in, there is no better position to be in. in this kind of a market to have the kind of liquidity that we have and the financial strength that we have because I would say that there are going to be a number of opportunities available to us. Certainly, this kind of a market proves very challenging to a lot of companies, and some of them are very good companies, but they are being whip-sawed and pummeled by the chaos out there, and that’s going to create sort of some wounded antelopes that represent hunting opportunities. So, yes, we absolutely think that this market will open up strategic opportunities, and this is where all of the hard work of fortifying the balance sheet and focusing on liquidity and all that really comes back in a very positive way. So I would say that we are in a kind of unique competitive position in that sense in our markets, and we’re very excited about that. Jon Chappell – JP Morgan: Okay, very helpful. Thanks a lot, Paul.

Thanks, Jon.

Your next question comes from the line of Alex Brand with Stephens. Alex Brand – Stephens: Thanks, good evening guys. I have to say when a company beats my estimate by 130%, that’s not bad, not bad. Great quarter. I guess one thing that comes immediately to mind for me is just trying to understand some of the sustainability here. I mean, it looks like on the cost side particularly really getting the leverage now off of the systems and if you can just give some color. I know the market is always tough in terms of the top line, but is this really the first quarter of the benefit of the systems, and how good should we feel about sustainability here?

Look, it’s very difficult to give you a precise answer to that, and give you any position because we can’t read the future, and it’s not so easy to forecast, and you’ve just lived through a quarter like everybody else in the world where I’m not sure anybody would have quite forecasted exactly what happened. So, I think that I would say that we are cautious, and our disposition is cautious as we look forward. I think we’ve executed well in a very difficult environment. I think that we’ve demonstrated that we’ve got a skill set that is sort of second to none when it comes to protecting our interests and being able to navigate. Exactly what happens in the coming quarters with the changing economic environment and what that represents in terms of sustainability in the model, I don’t know. Do I believe that we’re getting some leverage off our efficiencies and about the tightening of our organization? I would say that the organizational work that Mike Kasbar has been driving for the last couple of years has just been phenomenal. It’s done more to tighten sort of the collective teamwork and the organizational maturity that’s come to bear across all functional areas. I would say it’s having a huge impact in terms of our ability to execute as one team all over the world. I would say certainly being able to have a powerful platform at our disposal, and having now worked out some of the integration kinks of going live with our ERP is beginning to reveal that there is definitely some leverage out of that. It’s hard to quantify, but certainly we see it in day-to-day operations. I think that Ira on board has done a good job with his team of making sure that we…

Yes, I mean I would say we’ll just sort of revisit some of the core themes. I mean, you can imagine with the world going through what it went through in this financial meltdown, counter-party risk is a serious issue. Liquidity is a very difficult issue. Banks were in – banks weren’t even lending to each other, let alone some of their customers. So when you consider that backdrop to be a company that had a lot of transparency, great corporate governance, deep relationships with suppliers and customers, very strong balance sheet, tremendous liquidity and being kind of, if you will, the value-add partner of choice, certainly that opens up opportunities for us to execute perhaps in a way that we might not have had the benefit of doing in other environments. I would say also you’ve had unprecedented volatility, and as you know, the marine business is a spot market. So it has a little bit different dynamic than aviation or land. So I think that that’s part of it. The ability to add all that value and be a good counter-party becomes an important part of how we generate our value. So I think it’s like I said before, I think all the planets aligned. I think it’s about execution, again I’m loathe to give you any sort of forecast on where that could go, but I think we’re certainly focused on the fact that we have tremendous competitive differentiation for our suppliers in the market and for our customers, so. Alex Brand – Stephens: That’s good color, Paul. Thanks for that. Just a housekeeping item for Ira. Can you tell us what Texor added to the quarter in terms of revenue and operating income?

I would say, I gave the operating income for the whole segment. That is principally a very large percentage of that is Texor is what I could tell you there on the operating profit. So you want that operating profit and? Alex Brand – Stephens: And revenue too.

And revenue, from a revenue standpoint, they contributed about a little over $250 million of revenue, which is consistent with the numbers that we shared on a full-year basis when we bought the company. Alex Brand – Stephens: Great, all right guys. Thanks for the time.

Your next question comes from the line of Steve Ferazani from Sidoti. Steve Ferazani – Sidoti: Good evening. I wanted to follow-up a little bit on some of the questions that were just asked in terms of the marine segment. The previous dynamic that you used to talk about was that segment tends to balance out over the course of a year. You have one strong quarter, but over the course, it balance out. Would you say that dynamic is out the window now, or how should we look at that segment?

I mean it’s difficult, Steve, I would say the thing that we’ve actually said in the past is that it’s variable because it’s a spot market and while there’s no specific seasonality, it isn’t like we could identify any one quarter that’s going to be up or down. It’s just the nature of the spot market. Remember there’s a lot of micro dynamics going on. You’ve got trade patterns within the fleets, so we might get concentrations depending on the arbitrage between certain markets that sometimes has an impact on the volume that we generate in any given market. So, if the West Coast is cheaper than the Far East, they might be lifting in one market or the other, and we might or might not be doing that volume. There’s a lot of variability just due to the fundamental nature that the marine is a spot business, but ultimately, I would say that throughout the year, it does kind of balance out. I think I would be very reluctant to characterize this quarter as being some new norm. I just don’t think that would be accurate. Obviously, Q3 was fraught with circumstances that were just remarkable for everybody in the world, including us. But, so I’m not sure I can give you the comfort that you want that this is somehow some new ratability or that there is going to be a natural balancing out, but I wouldn’t ascribe too much to this one quarter as being a ratable norm. Steve Ferazani – Sidoti: Okay, then moving forward, you mentioned the IATA numbers and then sort of the difficulties in the marine market. Is there any way to ring more profitability out if volumes don’t grow, and I guess the alternative question is do you think in a tighter market, you have the ability to grow volumes, or is that not a concern?

Well, as I said in one of the earlier answers, that hasn’t been our primary focus because I think, look when you go into the uncertainty of what’s a global recession, when you go through the economic upheaval that we’ve had, again, this is unprecedented. We haven’t had any event like this in this century, perhaps the Big Depression being an exception. So we’re navigating territory just like you’re navigating territory that’s a little hard to put in any real true perspective. So to ascribe any kind of norm out of what we’ve just been through is difficult, but I would say that there are definitely opportunities ahead for us because of what we’ve done to fortify our position in the market. I think that volume is going to come to us because I think the uncertainty caused by these markets definitely make us the partner of choice. Prices falling certainly make it easier for us to pick up volume because we can do more volumes under a credit line that we decide is appropriate. I would say that you know the shipping, there is a certain durability to shipping. Goods are not going to stop moving altogether. It’s just the nature of the beast. They may or may not always be full, the ships, but I think the fact remains that trade is not going to grind to a halt and again, we’re very focused on these highly capitalized fleets and I would say that more or less, when you consider what happened over the last five years, the financials health of the shipping market is quite extraordinary. We all grew up in the business years ago, it was feast and famine in shipping, and there would be long periods of real drought. Well, shipping had a five-year run…

No, I would say that actually we were really pleased with what Texor delivered, and I would say that they executed very well in this market and I think that it’s testimony to their business model, it’s part of what attracted us in the first place. And I would say that what we’ve learned is that we like the space and we like how that business works, and we’re going to be looking to do more. Steve Ferazani – Sidoti: Fair enough. Thanks a lot guys.

Your next question comes from the line of Jim Larkins from Wasatch. Jim Larkins – Wasatch: Couple of housekeeping items. Can you talk about the amortization expense that was in the quarter, and the stock option expense?

Going to the video tape here. Just a sec here. Jim, we’ll get that to you in a moment. Do you have another question? We’re just looking for the two numbers for you. Jim Larkins – Wasatch: Yes, could you just give some color on how bunker fuel and aviation fuel has been tracking crude? Maybe last quarter and into this quarter, how is it behaving?

Again, it depends on how narrow you dial the telescope. It’s sort of the, if you look at a normal chart, they would look like they track. I think that when you get into more discreet markets, you’re going to see that there is, that the bunker prices did not drop as quickly as crude was dropping because there were dynamics in the residual fuel market based on what’s going on on demand for middle distillates that has tightened up the resids space independent of what was going on in crude. So even though crude was coming down, there was a bit of a lag on bunker prices. It did not drop as quickly. So it depended on the particular markets, but in general, bunker prices have come down quite a bit from their highs of around 750 and 800. You’re now seeing in the high-200, 300 a ton. That’s a pretty sharp drop, but I would say that it lagged the move of the crude.

Hey Jim, I could give you the two numbers you were looking for on a tax adjusted basis, which is actually reflected not eh GAAP to non-GAAP statement in our earnings release. Stock-based comp after tax was just under $2.1 million, and the intangible amortization expense was $1.4 million. Jim Larkins – Wasatch: Okay, and then on your receivable facility, can I assume that you used the full 160 during the quarter, so when I look at the drop in receivables that you showed from quarter to quarter, that a $160 million of that was through the facility?

No, actually Jim we just closed that facility at the very end of the quarter. We haven’t utilized it for even $1 at this point, so the drop that you’re seeing in receivables is the result of two things principally; improvement in the trade cycle. I’d said earlier that we picked up two-and-a-half days in receivables, and the positive impact of the decline in fuel prices on our overall working capital division. So that’s all real reduction, which led to a big chunk of the $287 million of operating cash flow. Jim Larkins – Wasatch: Okay, so you have it there more as a source of liquidity when needed, you can shift receivables into that facility.

That’s right. It’s a very capital-efficient borrowing tool which supplements our revolving credit facility. Jim Larkins – Wasatch: And then just to understand the environment a little bit and what has happened with counter-parties, I understand that some investment banks pulled out of fuel trading maybe towards the end of the quarter, even after the end of the quarter. Is that some of the counter-party activities that you described that have driven maybe some volumes and profitability to your services, and maybe just kind of walk through the value chain and how that makes you more attractive to your customers?

Well yes, I think certainly there were, there’s the demise of some financial institution out there. For some of our customers that might have limited, if you will, the stable of people that they went to, and therefore we represent perhaps a more attractive alternative, if that’s what you’re driving at. I think we may have benefited from that. Was that the heart of your question? Jim Larkins – Wasatch: Yes, and does this mean that you are providing lines of credit or just terms that they couldn’t get elsewhere, or is it simply they weren’t even able to buy fuel any longer and they came to you because somebody else had just completely disappeared?

Yes, I mean I think, look I think the value-add that we provide as a global distribution group that’s got operational support, logistical support, all of that value-add I think is just simply more pronounced in this kind of an environment. So I don’t think that the fact that some of these big names went under specifically drove customers to us, but certainly it makes them a lot more alert to who they are doing business with, and again, our transparency becomes a huge competitive differentiator, not only for customers but also for suppliers. So I think we’ve benefited in a sense from the climate in that regard. Jim Larkins – Wasatch: Perfect, and has that environment changed much quarter-to-date so far?

I would say that perhaps we’ve not seen quite the drama that we were going through a month or so ago, with the front page was Hank Paulson every single day, but there’s a lot of anxiety, and I think that this genie isn’t going back in the bottle, I think any time soon. I think that there is anxiety. There isn’t a management team of any company that we know that isn’t asking their procurement department, “Who are you doing business with? Are they reliable? Are they transparent? There isn’t a supplier out there that isn’t sort of vetting their entire portfolio, and making decisions, hard decisions about who’s got the wherewithal the be a durable player over time. And I think that when those analyses get done, we end up rating at the absolute top of everybody’s list. So I think it’s good for us. There is anxiety. It’s certainly going to wash out some of the sort of mediocre players, or the players who weren’t as well capitalized or the players that were able to kind of go ahead and do business and nobody was really so focused on it. So I would say that the competitive landscape is changing, and as I said in my opening remarks, people are a lot more discerning now. So I would say that there is just a general sense of skittishness and anxiety, and as they look forward, I think it favors us because we’re going to stack up pretty good in that analysis. Jim Larkins – Wasatch: And then just a last question. It appears that marine has held up from a credit perspective as well as any of your businesses, and historically I don’t think marine has ever really popped up its head as a problem part of your business in credit. It seems like that’s a much more stable credit profile. Is that accurate?

Well historically, it’s been the cases, and again, there are a couple of things I would comment on. One, these are, typically our target customer has been a larger well capitalized global fleet. That’s just been a decision that we made as a company a couple of years ago even knowing that there might be opportunities to trade sort of in the middle or lower tier, but we made a decision not to do that. You will recall also that one of the things that we talked about for over many years is that there is an underlying maritime lien in shipping, where in the event that there is a default of a fleet, we do have the ability in some circumstances to exercise the maritime lien and arrest that vessel and secure our asset, which is the bunker receivable. So we’re pretty good at that. We have a lot of expertise. We have a great team. I would say that even though that’s not a silver bullet, it doesn’t solve every single situation there’s no guarantees, but the fact remains that it’s, this is an all hands-on focus kind of proposition. So there are two things going on. We feel good about our ability to protect our interests when things do get difficult. We believe that our leverage in the market gives us a competitive position that’s pretty strong, and we can be more selective and more discerning about the customer base we’re going to work with. I would also say that because of what’s happened in shipping over the last five years, Jim, you’ve got -- there’s been very, very good success. I think a lot of our target market is going to be in a position to weather the storm even if there is a deep recession through 2009, and certainly rates are going to come down and what have you, and that is going to stress the business models, but again, I think they’re pretty well fortified and most of our target customer base is going to be in a position to weather that storm pretty effectively. Jim Larkins – Wasatch: Thanks for the comments.

Your final question comes from the line of Edward Hemmelgarn from Shaker Investments. Edward Hemmelgarn – Shaker Investments: Yes, just wanted to ask a question, well a couple of questions, one about the aviation segment. I know you’ve talked about trying to reduce low-margin, I guess larger relationships. What I’m curious about is are you expanding, have you seen an expansion in the number of I guess lower-volume relationships that you’ve gotten, and is that one of the reasons why your gross profit per gallon sold has gone up?

I mean there is certainly a lot, yes, there is a lot of benefit to having a diversified portfolio in this kind of a market. We do focus a lot on concentration. So, again, it’s a little bit just good portfolio discipline. You just want to have a broad spectrum of diversified customers without huge concentrations and obviously, given what was going on in oil prices this year, we were very focused on return on working capital, and we didn’t want to be funding large-volume turnovers that ate up a lot of cash but low return, so we were pretty disciplined about moving out of that. And we also took a very disciplined approach to our inventory positions, which is to say the amount of self-supply that we had, we didn’t want to have huge amounts of cash tied up. It would tie up a lot of working capital if we weren’t just getting the return. So I think it’s been a combination of things, and I feel that the team has done a very, very strong job, and I think that you have to bear in mind too that when you look at the overall profitability as Ira mentioned in his notes, there’s been some impact just from the nature of how we, not only with the volatility, but that’s corresponding impact to that volatility on the way we do our accounting methodology and our average costing on inventory. So, there’s a couple of dynamics going on there, but as we look at the market opportunity, I would say that the last couple of years were a real shock to the aviation industry. The newspaper has been filled with all the difficult challenges that the aviation world has gone through. But these companies have been forced to take some pretty radical action, and I think they’ve done a lot to cut costs and reshape their business models, and I would say that they’re, many of them are actually better prepared than let’s say a year ago to handle some of the changes. So to us, it’s about focus, it’s about mitigating risks, it’s about making sure that we’re very disciplined on terms and collection, and again, very, very tight portfolio management disciplines. Edward Hemmelgarn – Shaker Investments: Okay, could I be a little bit more specific. I mean what, can you give us any indication of how the mix of general, corporate, and government business as a percentage of the overall aviation has changed from what it was one year ago to what it was in this quarter?

We don’t break that out in that kind of detail. I would just say generally that if you look at our fuel management portfolio, that’s probably an area that we’ve reduced somewhat. I mean, as we talked about, Ira talked about in the early remarks, some of our large contract business, one in particular that we ended in July, was 30 million gallons a quarter. We’ve shed some of that business. Edward Hemmelgarn – Shaker Investments: Okay, lastly, you talked about the opportunities; I know you can’t forecast acquisitions down the road. What sectors do you think likely will prove to be most attractive for you?

We see opportunities in all three segments. Edward Hemmelgarn – Shaker Investments: Okay great, thanks. Great quarter.

Thanks very much, appreciate it.

And there are no further questions. Are there any closing remarks?

We’d like to thank everybody for sort of standing by us during a wild quarter, and we know it probably wasn’t easy for our investors out there to be managing all that you’ve been managing in this volatile time, but we appreciate your support, and we look forward to speaking to you on the Q4. Thanks.