Good afternoon. My name is Marcello and I will be your conference operator today. At this time I would like to welcome everyone to the World Fuel Services fourth quarter and year end 2008 earnings 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. I would now like to turn the call over to Mr. Frank Shea, Chief Risk and Administrative Officer. Mr. Shea, you may begin.

Good evening everyone and welcome to the World Fuel Services fourth quarter conference call. I am Frank Shea, Executive Vice President and Chief Risk and Administrative Officer, and as is evident, I am doing the introductions on this evenings call. Today's call is also available via webcast. To access this webcast or future webcasts, please visit our website and click on the webcast 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 Noble, 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 at 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 evenings call may include forward-looking statements under the Private Securities Reform Act of 1995. These statements involve risks and uncertainties including, but not limited to, quarterly fluctuations in results, the credit worthiness of customers and counterparties and our ability to collect accounts receivable and settle derivative contracts, fluctuations in world oil prices and foreign currency, changes in political, economic, regulatory or environmental conditions, adverse conditions in the markets or industries in which we and our customers operate, our failure to effectively hedge certain financial risks associated with the use of derivatives, non performance by counterparties or customers on derivatives contracts, the integration of acquired businesses, uninsured losses, our ability to retain and attract senior management and other key employees and other risks detailed from time to time in the company's Securities and Exchange Commission filing. Actual results or facts could differ materially from such statements. Detailed information about these risks is contained in the company's SEC filings which are available on the 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. At this time, I would like to introduce our Chairman and Chief Executive Officer, Paul Stebbins.

Thank you, Frank. Good afternoon and thank you for joining us today. Today, we announced earnings of $29 million or $0.98 per diluted share for the fourth quarter of fiscal 2008. Our earnings for the year were $105 million, or $3.62 per diluted share, a 62% increase over fiscal 2007. In Q4, our return on working capital increased to 69%, our return on equity was 19% and our net trade cycle fell to six days. Our operating cash inflow in the quarter was $195 million. Our cash balance at the end of the quarter was $314. Shareholders equity was $608 million and we ended the year with over $900 million in liquidity. Notwithstanding an extremely challenging operating environment, we were able to deliver record performance as a result of our continued focus on four key metrics. Credit and counterparty risk management, liquidity, margin, and return on working capital. By any measure the company had an exceptional year. But the financial metrics don't tell the full story. As you all know, Q4 was the period of continued upheaval in the global financial market. Credit and liquidity remained tight. The global economy continued to deteriorate and the operating environment for our customers and suppliers remained challenging. In response to these market conditions, we became more discerning in our customer base and conservative in our appetite for credit risk, and because our unique position in the market gave us a competitive advantage in procurement, we were able to maintain margins despite the drop in oil prices. The hard work we did in Q2 and Q3 to derisk our business resulted in a significant improvement in our receivables portfolio and no increase to our provision in the quarter. Given the difficult operating environment, our global team did a very good job in Q4 of…

Thank you Paul and good afternoon everybody. I would like to thank our team for the tremendous efforts that were made during this past year. We experienced global market conditions unlike anything seen before and our performance is a testament to the hard work and dedication that was put forth by everyone at World Fuel Services. Before I review our results by segment, I would like to point out that the sequential and year-over-year decreases in quarterly revenue were significantly impacted by the sharp decrease in fuel prices, which continued through the fourth quarter. Also, it is worthwhile noting that our extraordinary results in the third quarter of 2008 significantly impact the sequential comparisons of gross profit and operating income, despite our very strong performance in the fourth quarter. Revenue for the fourth quarter was $2.9 million, down 47% sequentially, and 30% compared to the fourth quarter of last year. Our Marine segment revenues were $1.5 billion, down 48% sequentially and 35% year-over-year. The Aviation segment generated revenues of $1.1 billion, down 45% sequentially and 31% from last years fourth quarter. And finally our Land segment generated revenues of $260 million, down 46% sequentially, but up 44% from last years fourth quarter, principally driven by the acquisition of Texor last June. Our Aviation segment sold 453 million gallons of fuel during the fourth quarter, down 13% sequentially and 25% compared to the fourth quarter of last year. The sequential and year-over-year reduction in volume was principally due to our efforts to reduce exposure to low margin, higher risk accounts which continued through the fourth quarter. Our volumes have declined sequentially over the past three quarters. We now expect volumes to stabilize during the first half of 2009. Our Marine segment total business activity for the fourth quarter was 6.6 million…

Thank you, sir. (Operator Instructions). Our first question is from the line of Alex Brand with Stephens. Please go ahead with your question.

Thanks. Hey, guys. So a decent quarter; kidding, a good quarter.

Easy.

I want to make sure that I understand Ira, your commentary about the inventory. I think you said a $15 million hit which is kind of enormous, but the inventory level is very low now. So, should we expect little to or maybe not no, but much less, volatility quarter-to-quarter going forward on that inventory?

Yes. So let me cover both of your points. First off, the $15 million number is a combination of two things. Last quarter, we reported that we had about a $10 million positive impact. In this quarter we had a few million dollar negative impact. So, on an aggregate basis, it gets close to that $15 million. Now that we are down a little, about 15 million gallons, it really depends on volatility. If you focus on the fourth quarter of 2008, the level of volatility was enormous. We saw a 50% reduction in price from the end of September to the end of December. So, despite the fact that our position was much lower than where it had been over the last several quarters, we still had a few million dollar impact. Arguably that number would have been a lot larger had we been sitting on 30 million gallons of fuel. So, the opportunity for volatility is still there, but it is certainly muted by the fact that we are sitting on lower levels of inventory and I do not know what your assumptions are for prices going forward, but with the price of barrel of fuel at about 40 bucks, the level of volatility that we saw is kind of difficult to repeat, but you just do not know in this world, which directions prices will go down the road.

All right, let me use the volatility as segue. Volatility is helping Marine gross margins which were sounds like, again, pretty good. I do not know if they were around $9 again or what, but as I think about that going forward, how are you guys thinking about the fact that you are now more focused on return than ever so you are trying to do everything you can to keep that margin high versus if the volatility comes down and the bunker market stabilizes, how much margin do you think is at risk?

Sure. Alex, this is Paul. As you know, margin historically is a composite of a lot of different factors. You have a market environment which is ever changing, you have credit issues and a sense of what the risk profile is, you have a mixture of what is going on in the actual portfolio itself, and a broad spectrum of different accounts throughout the segment. All of these things are impacting margin in addition to the economic backdrop and just other issues like counterparty risk and what have you. Remember, there is also another key factor in there, which is the maturity of our model is such that we enjoy some competitive advantage in terms of just our procurement skills. So, the fact that we can achieve pretty good results just by being very, very good efficient buyers in the market allows us some competitive advantage that our other competitors just cannot achieve because of our scale and our aggregate position in the market, which means we can not only achieve margin but we can deliver very competitive pricing to our customers and of course being the kind of counterparty that we are, that is a very, very valuable asset in today's world. There is more scrutiny on that issue than there ever has been in the past, and again, as I indicated in my comments, this is a welcome trend for World Fuel because it allows us to completely standalone from the pack. So in terms of the go forward, I cannot predict with any precision what will happen to margins and as you know we do not discuss that net level of granularity. But I would say it is not just as simple as prices went down and therefore margin might be reduced. It is not that is not necessarily a conclusion that we would reach. We are certainly focused on return as any good business should be, but I would say that the market has changed enormously in the last 12 months and I think that our ability to use our mature system to buy effectively is a very key component of it as well.

All right, that was a very thoughtful answer Paul, and I appreciate it, but I want to attack in a little bit more simply if I could. I think last quarter you guys were very explicit that $9 was unusually high that that would not be reasonable to extrapolate that going forward. Now, I also think there is a lot of concern out there about when you look back at the history of World Fuel, it has been $3 and $4 and $5 a ton, and could you comment sort of in that context, $9 what you said before, probably was not sustainable. Do we have risk that we go back to $3 or $4?

I mean, I think I would not view it as being quite that extreme a shift. I would say that when we did talk about this in Q3, we did talk about the extraordinary nature of what was going on and that it might be difficult to do that going forward and I think that that's still an accurate statement. So, our focus is on a market that is fundamentally a spot market. We believe that the margin is a function of many, many different factors. I would say that we are going to obviously work to try to preserve margin, but we can not give you any visibility with precision on what that would be. But I would simply bring to your attention that, again it is important to understand that there are many different components going into margin. And while we might have articulated some concern about the sustainability of those margins in Q3, I think that was correct. But I would also say we are going to a market where the factors are far, it is a very different economic scenario today. So we are going to do our best to continue to protect margin and buy better and continue to look at our mix of business. All of that is going to play into what happens with margin going forward.

Okay. Thank you for that color. Again, if I can just ask one more question. With respect to the commentary that aviation volume took a big hit, which you guys felt the right tradeoff for better margins and lower risk, but you now think aviation stabilizes. I know marine is a spot-oriented business and harder to call, but is there a same thought process there that you have sort of called out most of what you think you need to and so something more stable is the right way to think about it?

I would say there are different things going on in the two segments. As you know, given the extraordinary market conditions of 2008, our hat goes off to the Aviation segment and the risk management team that worked very aggressively under very extraordinary circumstances to sort of rationalize that portfolio, reduce low margin business, extract ourselves from volumes, that were not generating returns or relative to the risk. And I think they did a very, very good job of getting us to some bedrock there and really building some foundation that we felt we have hit some hard ground there. And I think that puts us in a good position to begin to select, to rebuild those volumes as we look forward into 2009. So it is a little bit different dynamic. With Marine, as we have talked about many times, you have a couple of things going on. First and foremost, it is a spot business. So there is always going to be just an inherent variability on volume relative to what is going on in the trade. I would also say that as a secular backdrop, we all know that there have been some changes in the whole dynamic in the shipping industry and I would say that as a secular trend, trade is down in the shipping industry and has backed off some of its highs that we experienced over the last five years. So that is going to have some impact. However, having said that, I would say that our business model has certainly been validated and as you know, strategically we made a decision to sort of focus to higher end of the market. So, the customers that we have historically targeted in the last several years have been the more well-capitalized groups. The ones who we expect have sustainable positions in the market. And while some of their volumes may retreat, we think that we are going to sort of do better than others in terms of being able to protect some of our market share. But certainly when you look at the backdrop and you look at what is going on in trade, it would be unrealistic to think that there might be some threat to volumes going forward. But again, we do not have the crystal ball any better than anybody does. All I know is that we are better positioned than anybody in terms of our strategic position relative to that overall volume market.

Okay. Thank you for that. I appreciate the time, guys.

Thanks, Alex.

Our next question is from the line of Jon Chappell with JPMorgan. Please go ahead with your question.

Thank you. Good afternoon, guys.

Hey, Jon.

Paul displayed all the good things you have been doing. I have to imagine that some of the margin improvement is just a function of your competitive advantage given the transparency of your balance sheet and liquidity of your balance sheet. And, despite a lot of wounded animals out there, I would think in some of our core markets, outside of what you have been doing in land, been a little bit quite on the acquisition front. Do you see a lot of good potential opportunities in either the Marine or the Aviation side to pickup some good people, potentially on the cheap because of the problems with your competitors?

Yes to all of the above and I am glad you asked that question. Certainly, I would characterize that 2008 was largely, it was a world in which we were defending the franchise. The whole world had gone crazy. You had extraordinary volatility in prices. You had an economic meltdown of extraordinary proportions. The whole world was facing very difficult time. And I think our team did a phenomenal job kind of defending the franchise, building the thick walls for the fortress, building a moat around our franchise, fortifying the balance sheet, making sure our liquidity was there because we, like everybody else, had no absolute clarity as to where all this is going to go. All that hard work paid off and again as we enter 2009 with a very, very strong foundation. So our focus is now shifting towards not, certainly we have to continue to execute very well on our core competence. But I would absolutely tell you that we are focused strategically on horizon, where we believe that the crisis has created an enormous amount of opportunity. There is huge upheaval in these major industry segments energy, transportation, logistics, finance, these are all things that are that have just been sort of stunned and shocked by what's gone on the economy. And I think that we could not be more excited about the strategic landscape and the opportunity to explore things in all three of our segments. So we are not in a position to give you specific color on any of those things now. But I would certainly hold out to you that the acquisition that we signed, our intent to acquire TGS Petroleum is certainly evidence of our intent to move very quickly and take advantage of the opportunity. So I think I would just ask you to stay tuned. We have got a war chest. We are in a good position. We are executing well and we're disciplined in this whole process. So you will not see anything rash. But I think it is definitely a good climate for us.

Okay. And organically, if I remember correctly, you have done a lot of growth of your own sales force and I think now you are probably getting to the point where the scale is building up and we are seeing the revenue drop to the bottom line a lot quicker. Are you out there hiring organically as well or do you feel you have the right people system in place right now to take advantage of opportunities that may present themselves?

We certainly believe that we could achieve a lot with the team that we have, and I think that a lot of work, as you know for the last two years, Mike Kasbar has been driving, is just relentlessly transformation of this company into a more a mature organization, and driving efficiency and team work and a level of collaboration and systems, robust systems that have been unprecedented in this company's history. And he has dragged this company from being sort of the entrepreneurial energy ball that we were into a far more mature, disciplined, rigorous company, focused on execution. I think that that allows us a platform to execute in a way that we couldn't before, and while we are always opportunistically looking for talent. Look, this company historically has been a magnet for talent. We said that a million times we are first class and always about people. We will continue. We would like to pride ourselves on being a company that can attract innovation and entrepreneurism and talent and we will continue to do that. But it is not the first priority. We think we have a pretty good team and a pretty good platform and there is a lot we can do. And I think a lot of that robust growth that Mike has brought in the last two years has really put us in a great position as we enter 2009 to execute on that.

All right, sounds good. And there is one last real quick question. Are you disclosing the price of the TGS acquisition?

No Jon. Due to the relatively small size of that particular acquisition, we decided not to disclose the price.

All right, I understand. Thanks a lot Paul, thanks Ira.

Our next question is from the line of Steve Ferazani with Sidoti & Company. Please go ahead with your question. Steve Ferazani - Sidoti & Company: Good evening. I just wanted to touch on the TGS again. Seems like the Midwest has been getting the best retail, rack to retail spreads. I mean, is that part of the strategy? Do you look at the stronger markets or do you look at the best acquisitions in terms of expanding geographically? Can you explain out the strategy a little bit there?

Hi Steve, this is Mike Kasbar. Well, it is a combination. Certainly you have to look at markets. They do tend to be local. Not every market is a good market despite the fact that we think we selected a pretty good space, within the diesel and gasoline distribution. In the whole game plan there was to leverage the Texor platform. We have a great team there. So this is just a plug and play tuck-in, really nice acquisition. We are very happy about it. So it is a combination of staying true to the strategy and looking to get an acquisition that brings a lot of juice to the bottom line. Steve Ferazani - Sidoti & Company: How much can you benefit from scale there as you expand, if you go into markets that may be are not as quite as strong, it is offset by the benefits of scale?

Well, clearly the beauty of this acquisition is does not come with a lot of assets or people. So we are looking to leverage what we think is a superior platform there. We have the opportunity to take that same business model to other geographies and we will just see how it all plays out. But for the time being, I think we are delighted that in less than nine months, we have bagged a pretty nice acquisition in Chicago and we are going some economies of scale. Steve Ferazani - Sidoti & Company: Going to have to circle back again on the gross spread issue a little bit. Now that we are three months, four months out from the initial credit crisis shock and you are seeing fuel prices come down substantially, so I am assuming working capital constraints on both competitors, customers weakening a bit. Are you starting to see any pushback?

Yes. Steve, I think as Paul has said both in his initial remarks and then with Alex just a few moments ago, the world is still a pretty rocky place. There is still a lot of risk out there. So I think a combination of our procurement skill, the scale of business that we have in the marketplace, combination of just the value add on looking at price risk management, it is a good opportunity to be looking at pricing. I think most everybody thinks that the price is more likely to go up then go down. That factors into our skill at dealing with price risk management. There are a lot of business development opportunities in the marketplace today. Everyone's interested in conserving cash and eliminating risk. We have a lot of skill at being able to bring solutions to both customers and suppliers. This market is ideal for our skill set. We have been focusing on these solutions, essentially our entire lives. So whether there is going to be pushback or not, I think we feel pretty confidently positioned to be able to deliver a reasonable result. Certainly 2008 is completely different than 2009. Planning, man plans and God laughs. Right, so the whole name of the game today is to be extremely flexible and responsive and that is really what we are focused on. Steve Ferazani - Sidoti & Company: Okay. Last question, just on risk assessments, and certainly the big risk here, your commercial aviation customers, three, six months ago was the high jet fuel prices and how they cope with that. Now I guess it is declining volumes. Is that never changing risk assessment? Does your customer base, who you would accept as customers change?

Yes. I mean, I think there is no more discipline within this company that we take more seriously than risk assessment and it is a moving target. I think one of the things that we learned out of last year in aviation is that when you consider what happened in the high prices, there were many companies that moved very aggressively to rationalize their entire structures in the face of very high oil prices. Those same companies benefited tremendously when the oil prices came down because they did a lot of very hard work on slashing capacity and dialing back their asset positions. So, in some ways, there were companies that did the hard work in June and July that actually benefited later on in the year. We certainly understand that the economic backdrop is challenging, but all air travel and all air cargo has not stopped. It will not stop completely. And I think that again, as we talked about earlier, Steve, we did a pretty good job of getting ourselves to some bedrock, and frankly, we see opportunities to grow the volume going forward without in any way impairing our risk. So, I think it is about just making sure that you are fast, and as Mike just said, we have always been very good at being responsive. It is all about being able to look at what is happening and the changing dynamics and respond accordingly and it is something that I think we are very proud in terms of Frank and his team and the leadership in the aviation segment, Michael Clementi and his group and what they did to rationalize that portfolio. They are also the same people who see the opportunities to grow that volume now going forward. So, it is just about being good at what we do. Steve Ferazani - Sidoti & Company: Great. I appreciate it.

Steve.

And our next question is from the line of Michael Novak with Frontier Capital. Please go ahead with your question.

Good evening.

Hi, Mike.

So, despite your multiple, I think you have proven that your business model is better than anyone including me ever thought it would be. So going back to the gross spreads, if they really were to contract meaningfully, would it take a material improvement in the overall environment and would that lead to probably substantially stronger volumes? So to some degree the business models offsetting so yield spreads, yields expand when things are very difficult very. The credit crisis is out there and then when if they were to come down materially, it would be because the general environment is much better.

Yes Michael, this is Mike Kasbar. Our business model is perfectly suited for this marketplace. We have the ability to pivot and respond. We are not welded to any particular position and just reflecting back on the previous comment in terms of the business development, the need for cash, the need for cost cutting, as revenue is challenge for all these companies, they are looking for solutions. They are opening their eyes to different ways of doing business and that's certainly good for us. We have the ability to modulate. We take a progressive revenue management disposition. So if we have to dial one lever, we can move the other way. So, I think we feel like we are in a good position. We are not exactly sure exactly what's going to transpire, but we are pretty much prepared for anything.

I think historically, Mike, we have been able to demonstrate over and over again and we have been able to execute in a whole variety of different market conditions. One of the things that are significant to note is that the competitive landscape has changed. This last year, it was a very powerful stress lever on a lot of the privately held, less well capitalized groups out there and competitive landscape. The supply community had to completely reevaluate its commitment to the downstream and do a lot of hard thinking about who they were going to be rationalizing their channel distribution through and I think that all of those trends favor us. So there is a lot of things going on in this as we look forward and I think its back to this is where all the years of the hard work and the investment in this platform have given us a really unique position in the market, and I think that you are right, some of these metrics are going to change. But I think it would be much too simplistic of to say that just simply because prices have come down and maybe the economy comes back a little bit that it is going to stress all the margins and it is going to hurt your ability to succeed. I would say on the contrary, I think we are better positioned than anybody to take advantage of this market.

My second question goes more to the balance sheet with 37% of the market value of the company in net cash and the share repurchase out there, and I think you said your priority was acquisitions. How robust is your pipeline today? What is the priority for acquisitions? How material can you see it being over the next 12 months, and can you talk about acquisition multiples to where they have been historically.

Is there anything else you would like to know Mike? Let us put it this way. We have been, I think, careful and prudent. We have had the ability over a period of time to do a number of different things and we have not gone hog-wild. If anything, perhaps, we can be accused of being too conservative. But the reason we have done that is because we are keeping our eye on the ball and sticking to or admitting. We have, I think, stuck to strategic selective acquisitions. There is certainly a lot available on the marketplace. We are a little bit picky in terms of the type of people that we want to spend our time with. And it has been a heck of a year, we went live with our EOT, 2008 was a challenge. So we have arrived through that and Ira has acquired, I do not know, about 70 or 80 companies in his spare time over the years. So, we are geared up and we are ready to roll and we think that it is certainly a good time to buy.

How much cash do you want to leave on the balance sheet to maintain that sense of comfort with suppliers, that competitive advantage and also hedge the risk that fuel prices go up materially?

It is hard to give you that with any precision Mike. But I would say that we certainly believe that we are in a very strong position. And I think that we have plenty of room to execute what we think are some of the opportunities out there. But I would be low, to put a precise number on that. We can all do the math on various oil prices. As you can imagine, we pay a lot of attention to all of our liquidity modeling. We spent a lot of time last June focusing on $200 barrel oil and we've won every scenario in between. So, our first and foremost responsibility is to protect the franchise, defend it and be able to execute our business model at scale in the whole varieties of scenarios. But even having said that, despite our most sort of conservative assessments of that, we believe we have ample room to execute quite a bit on the strategic side.

Just to add Mike, I think we really look at the overall liquidity as opposed to cash specifically and we are, as Mike mentioned, for other reasons on the M&A front, we are somewhat conservative bunch and always want to make sure we have adequate liquidity on hand to weather whatever storm maybe thrown in front of us. 2008 was a great example of that and that will be a combination of some cash and a certain level of committed capital, such as our over $600 million of committed capital is completely unutilized today. So that is something we focus on a regular basis.

One last quick question. I know the Texor acquisition was more of a platform acquisition. Does it have the platform to manage the land business in multiple geographies, so outside of the Midwest, or is it more of a regional business and you will need to buy more companies like that in other geographies?

Well, today we are supplying unbranded product in 28 states throughout the US.

Not through Texor, is it?

No, not through Texor, but I mentioned that as what we started in World Fuel a number of years ago. So we have a good amount of talent within World Fuel already and by virtue of our ERP and our systems are getting smarter and sharper every day. A big part of that business is very system dependent. So by virtue of the competency that we pickup with Texor, some very smart people, and a great business model combined with our unbranded wholesale rack business, I think that we are building a very interesting platform. And certainly with some additional acquisitions in that space, I think you're starting to see something emerge that could be very exciting. Additionally, we have, although it is quite small, I would say, pledging operations in Brazil and the UK. So what we call the land space is pretty exciting. It is significantly bigger than our marine and aviation space combined in terms of volume.

Thank you.

Thanks Mike.

Our next question is from the line of Edward Hemmelgarn with Shaker Investments. Please go ahead with your question.

Yes, thanks. Congratulations on a good quarter. A couple of questions here. One, just to think of the new acquisition. Basically as you are just buying the assets and it is just going to be rolled pretty much, there are no additional expenses associated with operating it.

Absolutely.

That is correct. There are very limited incremental expenses related to the acquisition once we put it together with Texor.

Okay. You said that Texor's about a 100 million gallons per year.

Yes. Per year or per quarter, okay.

Per year, okay. Next question Ira. Could you talk a little bit about the foreign currency loss that you recognize this quarter relating to prior translation? I mean, how did that arise and how was it not identified earlier?

Well, at the end of the day, we had some losses related to significant volatility in the second half of the year that were not deemed to be overly material, some of which related to prior quarters in the year. Arguably we could have identified them a little bit earlier. But we identified the issue in the fourth quarter and we recorded the $4 million adjustment at that point in time. But, once again, if you look at the full year. there is no real material impact on the results for the year.

No, I understand. I was just wondering how it would arise or something. Is it that you would recognize in the fourth quarter but not in prior quarters or something? I mean, just how would that be emerge or identify itself?

It was result of our year-end review in preparing for our full year results when we did a complete review of all of our foreign exchange activity, the impact on previous four quarters were material. That is really the best way to describe it for you.

Okay, when you said a figure on about a million dollars in interest expenses that for the first quarter that is not what you view your net number at is it but rather?

Well, it is only a combination of two things, a good question Ed. Obviously, we do not have a lot of debt on the balance sheet and we have a significant amount of cash. We are pretty conservative today in terms of where we are investing our cash in this fragile economic environment. So I would ordinarily be embarrassed to say this, but I am actually not in saying that our yield is about close to zero as you could got, because we are focused more on the preservation of capital than taking chances in an environment where many banks are on the edge at the moment. What also goes into that line are the amortization of fees related to most of our bank facility and our accounts receivable, securitization facility which are reported as interest and that is principally the number, a big part of the number, that I estimated for the first quarter.

Okay, the last question then. Could you, just getting back to the gross margin issue, like everyone has, the spears of trying to get an idea where this number goes, but to what extent would you say that the improvement in operations or in your ability to whether its information systems now or your just general knowledge has driven parity and ability to drive gross profit versus? If you could quantify it from a percentage standpoint, as opposed to the gross profit improvement that you saw from market volatility or liquidity issue volatility?

Well, I think we are on our way. We spent a lot of money putting our global BOP system on. Ira's initiatives on cost management have kicked in. You are getting visibility on OpEx. Our group is certainly maturing. So that certainly is the name of the game. Both on being able to take all of our capability on procurement as Paul commented on and certainly squeezed more out of that in a net margin. So that is clearly where we want to go to be the low cost provider. And that is basically the objective. So it is been a long time coming, in terms of building up the organization. Certainly last year, a lot of investment went into that. So it is up to us as a management team to start squeezing that out.

Okay. Fair enough, thanks.

Ed. Thank you.

And our next question is from the line of Brian Delaney with EnTrust. Please go ahead with your question.

Consistent with the prior question, can you help us understand? We are thinking about the gross spreads and the improvements in gross spreads, trying to just say 80% of it came from your better procurement versus filling the credit hole versus calling some of the lower margin, higher risk business. I mean, how would you break it down in terms of the improvement?

You know Brian, again this is now, I think, one of several questions on this call, all trying to get visibility on how we would predict this margin going forward, which we are not in a position to do with any precision. And to ascribe these various percentages to it in the way that you would like also is not easy to do. We came through what was an extraordinary market, confluence of events in 2008 and we achieved. We drove much better returns on a high priced market. We held onto those returns as the prices came down because counterparty risk is more important than ever. We are looking forward at an overall economic backdrop which is uncertain and I do not think there is anybody on this call either on this side of the call or on your side of the call that can give us any real visibility with certainty about what the future may hold in this economy. So, for us to give you any predictive or any precise indication of where all that is going to shake out the margin, I think, would be difficult, particularly in terms of breaking it down in percentages of these components. What I would tell you is that this company has done a lot of work to become best-in-class at executing on many different levels. It is systems driven. It is team driven. It is procurement expertise. It is counterparties. It is balance sheets and liquidity. It is market platform. It is 44 offices in 23 countries. It is the ability to understand customer at a very granular level. All of these things go into what ultimately drives as margin. And I wish I could give you with precision what that would be going forward but it just eludes easy capture. I would say that we do have a lot of confidence in our ability to execute. I would say that a lot of hard work was done to get those margins up to where we had seen them in 2008. Whether we can hold on to them in a market that has a tough economic backdrop and perhaps some drop in price. You have the offsetting dynamic of perhaps improved volumes. There is just a lot of dynamics going on. As Mike said, in a low price market you are now looking forward into managing the forward curve. So, there are a lot of issues around being able to structure forward pricing. I just wish it was as simple as being able to tell you that it is 20% this, 20% that, 20% another thing. It just unfortunately does not work that way. But I have a lot of confidence that we execute well. So we will do our best.

I am sorry. I was not asking for forward-looking guidance. I was just saying, from a historical perspective, when you analyze the business and you analyze the improvements, is it evenly spread just to give us a little bit more granularity around it? Not, whether or not sustainable or not but just helping us understand the major component whether it was all just better buying around volatility in oil prices. Can you explain a little bit further in terms of just the concept of having margin improvement because we are culling the higher risk, lower margin customers? I would have thought it would have been the higher the risk, the higher margin as oppose to the opposite. Am I thinking about that incorrectly? If we are getting rid of higher risk customers, I would think that would be an adverse margin scenario because historically you would want to be charging more the higher the risk.

Well, yes, again, you are reducing this to a set of I would say very primary components and there is a lot more culling on in the margin equation in terms of what is a long-term contract margin that might have been high risk that we shed because we did not want the volume or we were not getting the return at one price level, or it started out as a contract at a good price level but when then when the prices changed on it was no longer getting us the returns, so we made a decision. We have also done very well by using forward curve and price management and procurement expertise to make good margins across a broad spectrum of cluster. It is not necessarily and intuitively that the only way we get margin is because they are high risk. That has not been our model. Anybody who has followed this company for a long time knows that we made a very strategic decision to move upstream, if you will, in terms of customer quality and portfolio management and that has been our strategy for the last several years and I would say that it is part of the reason why we feel so comfortable with our fundamental risk management expertise is that we really deliberately did that. So, when we look at 2008, again, there was a whole lot of stuff going on. You had some volatility. You had prices that were very much up and you had them going down. You had a very robust shipping market at one end of the spectrum and then it also became more stressed as the economy changed. You have aviation that was under radical stress early in the year that actually did better towards the end of the year. So again, you throw all this in the mix. You get a lot of offsetting components. The real issue is back to what Mike Kasbar said earlier, is how fast can we pivot? How fast can we respond? How well does our risk management teamwork in concert with our commercial execution in the market and I would say nobody does it better. So unfortunately, I cannot give you that clear crisp model that you would like, but I would tell you we have a long track record of executing pretty well and we are now several quarters into executing pretty well in one of the most bizarre environments in history. So I think that is as much as we can give you.

Okay. Great and last question. When I look back Q3 to Q4 historically on a sequential basis, there is improvement and you started the call by saying Q3 was just a very good call. So when you think about the sequential trends and the gross profit going down, it is just because we had a very good Q3. When we think about Q4 going forward, Q4 it looks like the second best from an absolute dollar perspective quarter the company has had. Will Q4 also then end up being somewhat of a high watermark on a sequential basis or how should I think about it leaving the experience we just had here in the fourth quarter?

I think that is starts broaching on forward-looking guidance which we do not provide. So we really cannot help you in terms of comparing Q4 to what Q1 or Q2 of 2009 will look like.

Okay. Thank you.

Okay. Thanks.

And there are no further questions at this time. Mr. Stebbins, do you have any closing comments you would like to make?

We would just like to say thank you to all of our shareholders and all the people making time to join us on this call. It has been an extraordinary market. We are proud of the results and we appreciate your support. We look forward to talking with you at the end of Q1. Thanks.