World Fuel Services 2005 Annual Report Download - page 79

WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
We maintain long-term service programs under which certain key employees receive cash awards for long-
term service. Our liabilities under these programs were $0.1 million and $0.2 million at December 31, 2004 and
2005, respectively.
As of December 31, 2004 and 2005, deferred sales bonus of $2.1 million and $3.4 million was accrued in
deferred compensation and other long-term liabilities in the accompanying balance sheets.
We maintain a 401(k) defined contribution plan which covers all U.S. employees who meet minimum
requirements and elect to participate. Participants may contribute up to 15% of their compensation, subject to
certain limitations. During each of the periods presented on the consolidated statements of income, we made
matching contributions of 25% of each 1% of the participants’ contributions up to the first 4% contributed.
Annual contributions by us are made at our sole discretion, as approved by the Compensation Committee. We
recorded expenses for our contribution of approximately $0.1 million for 2003 and 2004 and $0.2 million for
2005.
Certain of our foreign subsidiaries have defined contribution benefit plans, which allow for voluntary
contributions by the employees. The foreign subsidiaries paid all general and administrative expenses of the
plans and in some cases made employer contributions on behalf of the employees. We recorded expenses for our
contribution of approximately $0.2 million, $0.3 million and $0.6 million for 2003, 2004 and 2005, respectively.
Environmental and Other Liabilities; Uninsured Risks
We utilize subcontractors to provide various services to customers, including into-plane fueling at airports,
fueling of vessels in-port and at-sea, and transportation and storage of fuel and fuel products. We are subject to
possible claims by customers, regulators and others who may be injured by a fuel spill or other accident. In
addition, we may be held liable for damages to the environment arising out of such events. Although we
generally require our subcontractors to carry liability insurance, not all subcontractors carry adequate insurance.
Our marine business does not have liability insurance to cover the acts or omissions of our subcontractors. None
of our liability insurance covers acts of war and terrorism. If we are held responsible for any acts of war or
terrorism, accident or other event, and the liability is not adequately covered by insurance and is of sufficient
magnitude, our financial position and results of operations will be adversely affected.
We have exited several businesses which handled hazardous and non-hazardous waste. We treated and/or
transported this waste to various disposal facilities. We may be held liable as a potentially responsible party for
the clean-up of such disposal facilities, or required to clean up facilities previously operated by us, pursuant to
current U.S. federal and state laws and regulations.
We continuously review the adequacy of our insurance coverage. However, we lack coverage for various
risks, including environmental claims. An uninsured claim arising out of our activities, if successful and of
sufficient magnitude, will have a material adverse effect on our financial position and results of operations.
Legal Matters
Miami Airport Litigation
In April 2001, Miami-Dade County, Florida (the “County”) filed suit (the “County Suit”) against 17
defendants to seek reimbursement for the cost of remediating environmental contamination at Miami
International Airport (the “Airport”). One of our subsidiaries, Page Avjet Fuel Corporation, now known as Page
Avjet Fuel Co., LLC (“PAFCO”), is a defendant. We acquired a 50% interest in PAFCO from Signature Flight
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