World Fuel Services 2002 Annual Report Download - page 10

History
In 1984, we began our operations as a used oil-recycler in the southeast United States. However, after 16 years, in
February 2000, we exited this segment of our business through the sale of the stock of our International Petroleum
Corporation subsidiaries, to Dallas-based EarthCare Company ("EarthCare"). For additional information regarding this
transaction, refer to Note 2 to the consolidated financial statements, included herein, and “Item 3 – Legal Proceedings.”
In 1986, we diversified our operations by entering, through an acquisition, the aviation fuel services business. This
segment of our business expanded from a business primarily concentrated in Florida to an international sales company
covering airports throughout most of the world. This expansion resulted from acquisitions and the establishment of new
offices. In December 2000, we acquired a 50% interest in PAFCO L.L.C. (“PAFCO”) from Signature Flight Support
Services Corporation. PAFCO markets aviation fuel and related services. For additional information on the PAFCO
transaction, refer to Notes 1 and 7 to the consolidated financial statements included in this Form 10-K.
In 1995, we further diversified our fuel services operations and entered the marine fuel business by acquiring the Trans-
Tec Services group of companies. In 1999, we expanded our marine fuel business and our share of the world’s marine fuel
market with the acquisition of the Bunkerfuels group of companies. Since 1999, we have continued our expansion of the
marine business through the acquisitions of Norse Bunkers, based in Oslo, Norway; Marine Energy, located in Dubai, United
Arab Emirates; and the Oil Shipping group of companies, with operations in Singapore, the Netherlands and Hong Kong.
Since our entry into the marine fuel services business, we have opened various new offices in key strategic markets, such as
South Africa, Japan, Denmark, Greece, and Seattle, Washington. For additional information regarding our acquisitions since
1999, refer to Note 1 to the consolidated financial statements, included in this Form 10-K.
Description of Business
Our principal business is the marketing of marine fuel services to a broad base of international shipping companies and
to the United States and foreign militaries, and of aviation fuel services to passenger, cargo and charter airlines, as well as to
United States and foreign militaries. We currently employ a total of 370 people worldwide, of which 189 people are
employed in our marine fuel business, 126 people are employed in our aviation fuel business, and 55 people are employed in
corporate.
Marine Fuel Services
We market marine fuel and services to a broad base of customers, including international container and tanker fleets,
time charter operators, as well as to United States and foreign military vessels. Marine fuel and related services are provided
throughout most of the world.
Through our vast network of strategically located sales 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 related
services include management services for the procurement of fuel, cost control through the use of hedging instruments,
quality control and claims management. Our customers need cost effective and professional fuel services because the cost of
fuel is a major component of a vessel’s operating overhead.
As an increasing number of 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 operations, we act as a broker and as a source of market information for the end user, 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. For this service, we are paid a commission from the supplier. We also act as a reseller, when we
purchase the fuel from a supplier, mark it up, and resell the fuel to a customer.
We purchase our marine fuel from suppliers worldwide. Our cost of fuel is generally tied to spot pricing, market-based
formulas or is governmentally controlled. We are usually extended unsecured trade credit from our suppliers for our fuel
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