World Fuel Services 2011 Annual Report Download - page 33

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If the fuel we purchase from our suppliers fails to meet our contractual specifications we
have agreed to supply to our customers, our business could be adversely affected.
We purchase the fuel we resell from various suppliers. If the fuel we resell fails to meet the
specifications we have agreed to with customers, our relationship with our customers could be
adversely affected and we could be subject to claims and other liabilities that could have a material
adverse effect on our business, financial condition, results of operations and cash flows. Although in
most cases we have recourse against our suppliers for fuel which fails to meet contractual
specifications, such recourse cannot be assured.
Non-performance of suppliers on their sale commitments and customers on their purchase
commitments could disrupt our business.
We enter into sale and purchase agreements with customers and suppliers for fuel at fixed prices. To the
extent either a customer or supplier fails to perform on their commitment, we may be required to sell or
purchase the fuel at prevailing market prices, which could be significantly different than the fixed price
within the sale and purchase agreements and therefore significant differences in these prices could
cause losses that would have a material adverse effect on our business, financial condition, results of
operations and cash flows.
Material disruptions in the availability or supply of fuel would adversely affect our business.
The success 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 services in certain markets. These parties may have significant negotiation
leverage over us, and should they be unable or unwilling to supply us on commercially reasonable terms,
our business would be adversely affected.
Adverse conditions in the aviation, marine and land transportation industries may have an
adverse effect on our business.
Our business is focused on the marketing of fuel and fuel-related services to the aviation, marine and
land transportation industries. These industries are generally affected by economic cycles and therefore
weak economic conditions can have a negative impact on the business of our customers which may, in
turn, have an adverse effect on our business. In addition, any political instability, natural disasters,
terrorist activity or military action that disrupts shipping, flight operations or land transportation will
adversely affect our customers and may reduce the demand for our products and services. Our business
could also be adversely affected by increased merger activity in the aviation, marine or land
transportation industries, which may reduce the number of customers that purchase our products and
services, as well as the prices we are able to charge for such products and services.
In addition, the aviation, marine and land transportation industries are subject to laws and regulations
related to environmental matters, including those mandating or incentivizing alternative energy sources
or otherwise addressing global climate change, which may reduce the demand for our products and
services. For example, some of our customers in the transportation industry may be required to
purchase allowances or offsets or incur other costs to comply with existing or future requirements
relating to GHG emissions. Although the ultimate impact of such requirements is very difficult to
accurately predict, they could have a material impact on our business and on the businesses of our
customers.
Insurance coverage for some of our operations may be insufficient to cover losses.
Although we maintain insurance to cover risks associated with the operation of our business, there can
be no assurance that the types of insurance we obtain or the level of coverage will be adequate. Also, if
we take, or fail to take, certain actions, our insurance carriers may refuse to pay particular claims. If the
cost of insurance increases, we may decide to discontinue certain insurance coverage or reduce our
level of coverage to offset the cost increase. In addition, insurance coverage that we currently have
could become difficult or impossible to obtain in the future. 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
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