World Fuel Services 2007 Annual Report Download - page 45

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64435 TX 37WORLD FUEL SERVICES
ANNUAL REPORT
28-Feb-2008 14:59 EST
CLN PSTAM
RR Donnelley ProFile SER lowel0da 6*
PMT 2C
TX8724AC350840
9.9.26
Interest Rate
Borrowings under our $475.0 million 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, 2007, we had two interest rate protection arrangements in the form of interest rate swaps in the
amount of $10.0 million each to reduce our exposure to increases in interest rates. These interest rate protection
arrangements expire in March and April 2008. As of December 31, 2007, our total borrowing under our Credit
Facility was $40.0 million and our weighted average interest rate on borrowings under the Credit Facility,
adjusting for the interest rate swaps, was 5.6% per annum. Based on our outstanding borrowings at December 31,
2007, our sensitivity to interest rates, inclusive of the interest rate swaps, with an assumed 1.0% change would
increase or decrease net income by $0.2 million, or basic and diluted earnings of $0.01 per share.
Foreign Currency
The majority of our business transactions are denominated in United States dollars. However, in certain
markets, primarily Mexico, Colombia, Chile, Brazil, Singapore, Canada and the United Kingdom, payments to
our aviation fuel suppliers and from some of our customers are denominated in local currencies. This subjects us
to foreign currency exchange risk. Although we use hedging strategies to manage and attempt to minimize the
impact of foreign currency exchange risk, at any given time, only a portion of such risk may be hedged.
As of December 31, 2007, we had the following foreign currency purchase contracts (in thousands):
Settlement
Period Hedge Strategy
Foreign
Currency
Amount
United States
Currency
Amount
Fair Value
Asset
(Liability)
January 2008 Non-designated BRL 593 $ 333 $ (3)
Non-designated CLP 5,645,513 11,339 (20)
$(23)
Item 8. Financial Statements and Supplementary Data
The financial statements, together with the report thereon of PricewaterhouseCoopers LLP dated
February 28, 2008, and the Selected Quarterly Financial Data (Unaudited), are set forth in Item 15 of this Form
10-K.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Management’s Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be
disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated
and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as
appropriate, to allow timely decisions regarding required financial disclosure.
As of the end of the period covered by this report, we evaluated, under the supervision and with the
participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of the design and
operation of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(e). Based upon this
evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and
procedures were effective as of December 31, 2007.
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