World Fuel Services 2005 Annual Report Download - page 20

• the costs of hiring and retaining senior management in overseas operations;
• difficulty in staffing and managing widespread operations, which could reduce our productivity;
• unexpected changes in regulatory requirements, which may be costly and require significant time to
implement;
• laws restricting us from repatriating profits earned from our activities within foreign countries, including
the payment of distributions;
• political risks specific to foreign jurisdictions; and
• terrorism, war or civil unrest and natural disasters.
Fluctuations in foreign exchange rates could materially affect our reported results.
The majority of our business transactions are denominated in United States dollars. However, in certain
markets, primarily in Mexico, Colombia and the United Kingdom, payments to our aviation fuel suppliers and
from some of our customers are denominated in local currency. This subjects us to foreign currency exchange
risk. Although we use hedging strategies to manage and minimize the impact of foreign currency exchange risk,
at any given time, only a portion of such risk may be hedged. As a result, fluctuations in foreign exchange rates
could adversely affect our profitability.
In addition, many of our customers are foreign customers and may be required to purchase United States
dollars to pay for our products and services. A rapid depreciation or devaluation in currency affecting our
customers could have an adverse effect on our customers’ operations and their ability to convert local currency to
United States dollars to make required payments to us. This would in turn increase our credit losses which would
adversely affect our business, financial condition and results of operations.
Third parties who fail to provide services to us and our customers as agreed could harm our business.
We use third parties to provide various services to our customers, including into-plane fueling at airports
and fueling of vessels in port and at sea. The failure of these third parties to perform these services in accordance
with the agreed terms could affect our relationships with our customers and subject us to claims and other
liabilities which might have a material adverse effect on our business, financial condition and results of
operations.
We also use third parties to store our fuel inventory and to transport fuel. If these third parties become
bankrupt or otherwise fail to meet their commitments to creditors, our fuel could be seized and applied against
amounts owed to such creditors. This could cause both disruptions in our business and financial losses.
If the fuel we purchase from our suppliers fails to meet the specifications we have agreed to supply to our
customers, our business could be adversely affected.
We purchase the fuel we resell from various suppliers. If the fuel fails to meet the specifications we have
agreed to supply to our customers, our relationship with our customers could be adversely affected and we could
be subject to claims and other liabilities which could have a material adverse effect on our business, financial
condition and results of operations.
We are exposed to various risks in connection with the price risk management services we offer to our
customers.
As part of our price risk management services, we offer our customers various pricing structures on future
purchases of fuel, as well as derivative products designed to assist our customers in hedging their exposure to
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