World Fuel Services 2008 Annual Report Download - page 10

waiver on our internet website or in a Current Report on Form 8-K. Our internet website and information
contained on our internet website are not part of this Form 10-K and are not incorporated by reference in this
Form 10-K.
Marine Segment
We market fuel and related services to a broad base of customers, including international container and
tanker fleets, commercial cruise lines and time-charter operators, as well as to the United States and foreign
governments. We provide marine fuel and related services throughout most of the world under the following
trade names: World Fuel, Trans-Tec, Bunkerfuels, Oil Shipping, Marine Energy, Norse Bunker, Casa Petro and
Tramp Oil.
Through our extensive network of offices, we provide our customers global market intelligence and rapid
access to quality and competitively priced marine fuel, 24 hours a day, every day of the year. Our marine fuel
related services include management services for the procurement of fuel, cost control through the use of price
hedging instruments, quality control and claims management. Our customers require cost effective and
professional fuel services, since the cost of fuel is a major component of a vessel’s operating overhead.
As ship owners, time charter operators and suppliers continue to outsource their marine fuel purchasing and/
or marketing needs, our value-added services have become an integral part of the oil and transportation
industries’ push to shed non-core functions and reduce costs. Suppliers use our global sales, marketing and
financial infrastructure to sell a spot or ratable volume of product to a diverse, international purchasing
community. End customers use our real-time analysis of the availability, quality, and price of marine fuels in
ports worldwide to maximize their competitive position.
In our marine segment, we primarily act as a reseller. When acting as a reseller, we contemporaneously
purchase fuel from a supplier, mark it up, and resell the fuel to a customer, normally taking delivery for
purchased fuel at the same place and time as we make delivery for fuel sold. We extend unsecured credit to most
of our customers. We also act as a broker. When acting as a broker, we negotiate the transaction by arranging the
fuel purchase contract between the supplier and the end user, and expedite the arrangements for the delivery of
fuel. When acting as a broker, we are paid a commission by the supplier.
We purchase our marine fuel from suppliers worldwide. We enter into derivative contracts in order to
mitigate the risk of market price fluctuations, and to offer our customers fuel pricing alternatives to meet their
needs. Our cost of fuel is generally tied to spot pricing, market-based formulas or is government controlled. We
are usually extended unsecured trade credit from our suppliers for our fuel purchases. However, certain suppliers
require us to provide a letter of credit. We may prepay our fuel purchases to take advantage of financial discounts
or when limited by the amount of credit extended to us by suppliers, or as required to transact business in certain
countries.
Because we typically arrange to have fuel delivered by our suppliers directly to our customers, inventory is
maintained only for competitive reasons at three locations and is hedged in an effort to protect us against price
risk. We have arrangements with our suppliers and other third parties for the storage and delivery of fuel.
We utilize subcontractors to provide various services to customers, including fueling of vessels in port and
at sea, and transportation of fuel and fuel products.
During each of the years presented in the accompanying consolidated statements of income, none of our
marine customers accounted for more than 10% of total consolidated revenue.
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