World Fuel Services 2008 Annual Report Download - page 43

Contractual Obligations
As of December 31, 2008, our contractual obligations were as follows (in thousands):
Total < 1 year 1-3 years 3-5 years > 5 years
Debt and interest obligations . . . . . . . . . . $ 35,205 $ 24,824 $10,286 $ 95 —
Operating lease obligations . . . . . . . . . . . . 37,509 7,233 11,466 8,579 10,231
Service contract obligations . . . . . . . . . . . 2,970 2,350 620 — —
Employment agreement obligations . . . . . 12,481 5,081 7,400 — —
Derivatives obligations . . . . . . . . . . . . . . . 66,302 66,302 — — —
Purchase commitment obligations . . . . . . 86,818 86,818 — — —
Other obligations . . . . . . . . . . . . . . . . . . . . 3,638 1,133 1,324 671 510
Total . . . . . . . . . . . . . . . . . . . . . . . . . $244,923 $193,741 $31,096 $9,345 $10,741
Debt and interest obligations. These obligations include principal and interest payments on fixed-rate and
variable-rate, fixed-term debt, based on the expected payment dates.
Service contract obligations. These obligations consist of contracts with minimum service fees. The
minimum service fee amount is shown in the table above using the straight-line method over the service years.
Derivatives obligations. See Item 7A—“Quantitative and Qualitative Disclosures About Market Risk”
included in this Form 10-K, for a discussion of our derivatives.
FIN 48 Liabilities obligations. As of December 31, 2008, our FIN 48 liabilities were $30.5 million. The
timing of any settlement of our FIN 48 liabilities with the respective taxing authority cannot be reasonably
estimated.
Off-Balance Sheet Arrangements
Letters of Credit. In the normal course of business, we are required to provide letters of credit to certain
suppliers. A majority of these letters of credit expire within one year from their issuance, and expired letters of
credit are renewed as needed. As of December 31, 2008, we had issued letters of credit totaling $71.1 million
under our Credit Facility and other unsecured credit lines. For additional information on our Credit Facility and
other unsecured credit lines, see the discussion thereof in “Liquidity and Capital Resources” above.
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, 2008, we had
$27.6 million in outstanding bonds that were arranged in order to satisfy various security requirements.
Recent Accounting Pronouncements
Information regarding recent accounting pronouncements is included in Note 1 to the accompanying
consolidated financial statements included in this Form 10-K.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
We enter into derivative contracts in order to mitigate the risk of market price fluctuations in marine,
aviation and land fuel, and to offer our customers fuel pricing alternatives to meet their needs. We also enter into
derivatives in order to mitigate the risk of fluctuation in foreign currency exchange rates. We have applied the
normal purchase and normal sales exception (“NPNS”), as provided by FAS No. 133, “Accounting for Derivative
Instruments and Hedging Activities,” to certain of our physical forward sales and purchase contracts. While these
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