World Fuel Services 2011 Annual Report Download - page 103

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each 1% of the participants’ contributions up to 6% of the participants’ contributions. Annual
contributions by us are made at our sole discretion, as approved by the Compensation Committee. We
recorded expense for our contributions of $1.5 million, $1.2 million and $1.0 million for 2011, 2010 and
2009, respectively.
Certain of our foreign subsidiaries have defined contribution plans, which allow for voluntary
contributions by the employees. The foreign subsidiaries paid all general and administrative expenses of
the plans and in some cases made employer contributions on behalf of the employees. We recorded
expense for our contributions of $2.0 million, $1.2 million and $1.0 million for 2011, 2010 and 2009,
respectively.
Environmental and Other Liabilities; Uninsured Risks
We utilize subcontractors to provide various services to customers, including into-plane fueling at
airports, fueling of vessels in-port and at-sea, and transportation and storage of fuel and fuel products.
We are subject to possible claims by customers, regulators and others who may be injured by a fuel spill
or other accident. In addition, we may be held liable for damages to the environment arising out of such
events. Although we generally require our subcontractors to carry liability insurance, not all
subcontractors carry adequate insurance. Our marine and land businesses do not have liability insurance
to cover the acts or omissions of our subcontractors. None of our liability insurance covers acts of war
and terrorism. If we are held responsible for any acts of war or terrorism, accident or other event, and the
liability is not adequately covered by insurance and is of sufficient magnitude, our financial position and
results of operations will be adversely affected.
We have exited several businesses which handled hazardous and non-hazardous waste. We treated
and/or transported this waste to various disposal facilities. We may be held liable as a potentially
responsible party for the clean-up of such disposal facilities or be required to clean up facilities previously
operated by us, pursuant to current U.S. federal and state laws and regulation. In addition, compliance
with existing and future environmental laws regulating underground storage tanks located at the retail
gasoline stations that we operate may require significant capital expenditures and increased operating
and maintenance costs. The remediation costs and other costs required to clean up or treat
contaminated sites could be substantial. We pay tank registration fees and other taxes to state trust
funds established in our operating areas and maintain private insurance coverage in support of future
remediation obligations. These state trust funds or other responsible third parties including insurers are
expected to pay or reimburse us for remediation expenses less a deductible. To the extent third parties
do not pay for remediation as we anticipate, we will be obligated to make these payments. These
payments could materially adversely affect our financial condition, results of operations and cash flows.
Reimbursements from state trust funds will be dependent on the maintenance and continued solvency
of the various funds.
Although we continuously review the adequacy of our insurance coverage, we may lack adequate
coverage for various risks, such as environmental claims. An uninsured or under-insured claim arising out
of our activities, if successful and of sufficient magnitude, will have a material adverse effect on our
financial position, results of operations and cash flows.
Legal Matters
Brendan Airways Litigation
One of our subsidiaries, World Fuel Services, Inc. (‘‘WFSI’’) was involved in a dispute with Brendan
Airways, LLC (‘‘Brendan’’), an aviation fuel customer, with respect to certain amounts Brendan claimed
to have been overcharged in connection with fuel sale transactions from 2003 to 2006. In August 2007,
WFSI filed an action in the state circuit court in and for Miami-Dade County, Florida seeking declaratory
relief with respect to the matters disputed by Brendan. In October 2007, Brendan filed a counterclaim
against WFSI. In February 2008, the court dismissed WFSI’s declaratory action. Brendan’s counterclaim
remained pending as a separate lawsuit against WFSI, and Brendan sought $4.5 million in damages, plus
interest and attorney’s fees. In December 2011, the matter was settled through a confidential
settlement agreement. The settlement did not have a material impact on our financial condition, results
of operations or cash flows.
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