World Fuel Services 2007 Annual Report Download - page 84

Download and view the complete annual report

Please find page 84 of the 2007 World Fuel Services annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 100

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100

ˆ1KGX9SH6RFFBDMWfŠ
1KGX9SH6RFFBDMW
64435 TX 76WORLD FUEL SERVICES
ANNUAL REPORT
28-Feb-2008 10:13 EST
CLN PSTAM
RR Donnelley ProFile SER raynj0da 9*
PMT 2C
TX8724AC351002
9.9.26
WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
9. Commitments and Contingencies
Surety Bonds
In the normal course of business, we are required to post bid, performance and garnishment bonds. The
majority of the surety bonds posted relate to our aviation segment. As of December 31, 2007 and 2006, we had
outstanding bonds that were arranged in order to satisfy various security requirements of $19.2 million and $16.6
million, respectively. Most of these bonds provide financial security for obligations which have already been
recorded as liabilities.
Lease Commitments
As of December 31, 2007, our future minimum lease payments under non-cancelable operating leases were
as follows (in thousands):
Year Ended December 31,
2008 .............................................................................. $ 5,058
2009 .............................................................................. 4,590
2010 .............................................................................. 3,474
2011 .............................................................................. 2,998
2012 .............................................................................. 2,470
Thereafter .......................................................................... 3,637
$22,227
We incurred rental expense for all properties and equipment of $5.3 million, $4.6 million and $4.1 million
for 2007, 2006 and 2005, respectively.
In the normal course of business, we may enter into service contracts with minimum service fee
commitments. As of December 31, 2007, we had certain telecommunication contracts with minimum service fee
commitments of $3.7 million over the next two years. All other service contracts had insignificant minimum
service fee commitments.
Sales and Purchase Commitments
As of December 31, 2007, fixed sales and purchase commitments under our derivative programs amounted
to approximately $167.9 million and $184.0 million, respectively.
Additionally, as of December 31, 2007, we had entered into certain fixed price purchase commitments with
corresponding fixed price sales commitments, the majority of which were satisfied within a two week period.
These purchase and sales commitments were made in the normal course of business.
Employment Agreements
Both our Chairman and CEO and President and Chief Operating Officer (“COO”) have employment
agreements, which among other provisions, provide for an individual base salary of approximately $0.5 million,
and termination severance benefits. The CEO and COO employment agreements were extended for a one year
period from July 2007 under the same terms and conditions. In March 2006, the Compensation Committee of the
Board of Directors approved an increase in the base salary of the CEO and COO to approximately $0.6 million.
Pursuant to these employment agreements, our CEO and COO are eligible to receive an annual bonus upon
achievement of performance targets. Additional information on the annual incentive bonus of our CEO and COO
is provided below in “Executive Incentive Plan.”
76