World Fuel Services 2015 Annual Report Download - page 17

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• terrorism, war, civil unrest and natural disasters.
In particular, we operate in certain international markets which have been plagued by corruption and have uncertain
regulatory environments, either of which could have a negative impact on our operations there. Furthermore, many countries
in which we operate have historically been, and may continue to be, susceptible to recessions or currency devaluation.
We also operate in certain high risk locations that have been experiencing military action, terrorist activity or continued
unrest which could disrupt the supply of fuel or otherwise disrupt our operations in those areas. An act of terror could result
in disruptions of fuel supply and oil markets, and our facilities could be direct or indirect targets. Terrorist activity may also
hinder our ability to transport fuel if our means of transportation become damaged as a result of an attack. In these high
risk locations, we may also incur substantial operating costs, including maintaining the safety of our personnel. Furthermore,
we cannot guarantee the safety of our personnel in these locations and there is a risk of serious injury or loss of life of
employees or subcontractors.
Material disruptions in the availability or supply of fuel would adversely affect our business.
The success of a significant portion of our business depends on our ability to purchase, sell and coordinate delivery of fuel
and fuel related services to our customers. Our business would be adversely affected to the extent that political instability,
natural disasters, terrorist activity, military action or other conditions disrupt the availability or supply of fuel. In addition, we
rely on a single or limited number of suppliers for the provision of fuel and related products and services in certain markets.
These parties may have significant negotiating leverage over us, and if they are unable or unwilling to supply us on
commercially reasonable terms, our business would be adversely affected.
We face intense competition and, if we are not able to effectively compete in our markets, our revenues and profits
may decrease.
Competitive pressures in our markets could adversely affect our competitive position, leading to a possible loss of market
share or a decrease in prices, either of which could result in decreased revenues and profits. Our competitors are numerous,
ranging from large multinational corporations, which have significantly greater capital resources than we do, to relatively
small and specialized firms. In addition to competing with fuel resellers, we also compete with the major oil producers that
market fuel directly to the large commercial airlines, shipping companies and petroleum distributors. Although many major
oil companies have been divesting their downstream assets, some continue to compete with us in certain markets while
others may decide to reenter the market in the future. Our business could be adversely affected because of increased
competition from these oil companies, who may choose to increase their direct marketing in order to compete with us or
provide less advantageous price and credit terms to us than to our fuel reseller competitors.
If we are unable to retain our senior management and key employees, our business and results of operations could
be harmed.
Our ability to maintain our competitive position is largely dependent on the services of our senior management and key
personnel. Although we have employment or severance agreements with certain of our key employees, these agreements
do not prevent those individuals from ceasing their employment with us at any time. If we are unable to retain existing senior
management and key personnel, or to attract other qualified senior management and key personnel on terms satisfactory
to us, our business could be adversely affected. While we maintain key man life insurance with respect to certain members
of senior management, our coverage levels may not be sufficient to offset any losses we may incur and there is no assurance
that we will continue to maintain key man life insurance in the future.
Our failure to comply with the requirements of our Credit Facility and Term Loans could adversely affect our
operating flexibility.
We have the ability to borrow money pursuant to a Credit Facility and Term Loans that impose certain operating and financial
covenants on us, which restrict our ability to (i) pay dividends, (ii) incur additional debt, (iii) create liens, (iv) make restricted
payments, (v) sell assets and (vi) engage in mergers or acquisitions. Our failure or inability to comply with the requirements
of these facilities, including meeting certain financial ratios or other covenants, could limit the availability under our Credit
Facility or result in an event of default. An event of default, if not cured or waived, would permit acceleration of any
outstanding indebtedness under these facilities, could trigger cross defaults under other agreements to which we are a party
(such as certain derivative contracts), and would impair our ability to obtain working capital advances and letters of credit,
any of which could have a material adverse effect on our business, financial condition, results of operations and cash flows.