World Fuel Services 2005 Annual Report Download - page 22

letters of credit, which could have a material adverse effect on our business, financial condition and results of
operations.
Increases in interest rates, the failure of our interest rate protection arrangements to reduce our interest
rate volatility or both may increase our interest expense and adversely affect our cash flow and our ability
to service our indebtedness.
Borrowings under our revolving credit facility are subject to variable interest rates. However, from time to
time, we may enter into interest rate protection arrangements that, in effect, fix the rate of interest on our debt.
The amount of debt covered by such arrangements may change depending on our working capital needs. As of
December 31, 2005, we had entered into interest rate protection arrangements for the entire $20.0 million of
borrowings under our revolving credit facility. Our weighted average interest rate on borrowings under the
revolving credit facility adjusting for the interest rate protection arrangements was 5.2% per annum. An increase
in interest rates, our failure to maintain adequate interest rate protection arrangements or both would increase our
interest expense and adversely affect our cash flow and our ability to service our indebtedness.
If we are unable to retain our senior management and key employees, our business and results of
operations could be harmed.
Our ability to maintain our competitive position is dependent largely on the services of our senior
management and professional team. If we are unable to retain the existing senior management and professional
personnel, or to attract other qualified senior management and professional personnel, our business will be
adversely affected.
Businesses we may acquire in the future will expose us to increased operating risks.
As part of our growth strategy, we intend to explore acquisition opportunities of fuel resellers and other fuel
service businesses.
This expansion could expose us to additional business and operating risks and uncertainties, including:
• the ability to effectively integrate and manage acquired businesses;
• the ability to realize our investment in the acquired businesses;
• the diversion of management’s time and attention from other business concerns;
• the risk of entering markets in which we may have no or limited direct prior experience;
• the potential loss of key employees of the acquired businesses;
• the risk that an acquisition could reduce our future earnings; and
• exposure to unknown liabilities.
Although our management will endeavor to evaluate the risks inherent in any particular transaction, we
cannot assure you that we will properly ascertain all such risks. In addition, prior acquisitions have resulted, and
future acquisitions could result, in the incurrence of substantial additional indebtedness and other expenses.
Future acquisitions may also result in potentially dilutive issuances of equity securities. Difficulties encountered
with acquisitions may have a material adverse effect on our business, financial condition and results of
operations.
Changes in United States or foreign tax laws could adversely affect our business and future operating
results.
We are affected by various United States and foreign taxes imposed on the purchase and sale of marine and
aviation fuel products. These taxes include sales, excise, GST, VAT, and other taxes. Changes in United States
8