World Fuel Services 2011 Annual Report Download - page 56

Financing Activities. For 2011, net cash provided by financing activities was $222.6 million as compared
to $190.0 million in 2010. The $32.6 million increase in cash flows from financing activities was primarily
due to borrowings of $250.0 million under the Term Loan Facility in 2011 as compared to proceeds from
the sale of equity shares of $218.8 million in 2010.
2010 compared to 2009
Operating Activities. For 2010, net cash used in operating activities totaled $35.7 million as compared to
net cash provided by operating activities of $77.9 million in 2009. The $113.6 million change in operating
cash flows was primarily due to changes in net operating assets and liabilities, primarily accounts
receivable, net, inventories and prepaid expenses, driven by increased sales volume and world oil prices
as compared to 2009, which were partially offset by increased net income.
Investing Activities. For 2010, net cash used in investing activities was $180.3 million as compared to
$61.8 million in 2009. The $118.5 million increase in cash used in investing activities in 2010 was
primarily due to increased cash used in the acquisition of businesses and increased capital expenditures
related to systems development in 2010 as compared to 2009, which was partially offset by the sale of
short-term investments.
Financing Activities. For 2010, net cash provided by financing activities was $190.0 million as compared
to net cash used in financing activities of $34.4 million in 2009. The $224.4 million change in cash flows
from financing activities was primarily due to proceeds from the sale of equity shares. In September
2010, we completed a public offering of 9.2 million shares of our common stock at a price of $25.00 per
common share. We received net proceeds of $218.8 million from the offering, after deducting
$10.4 million in commissions paid to the underwriters and an estimated $0.8 million in other expenses
incurred in connection with the offering.
Other Liquidity Measures
Cash and Cash Equivalents. As of December 31, 2011 and 2010, we had cash and cash equivalents of
$205.4 million and $272.9 million, respectively, of which $50.1 million and $225.4 million, respectively,
were held by our foreign subsidiaries and not available to fund our domestic operations without incurring
additional costs. Our primary uses of cash and cash equivalents are to fund accounts receivable,
purchase inventory and make strategic investments, primarily acquisitions. We are usually extended
unsecured trade credit from our suppliers for our fuel purchases; however, certain suppliers require us to
either prepay or provide a letter of credit. Increases in oil prices can negatively affect liquidity by
increasing the amount of cash needed to fund fuel purchases as well as reducing the amount of fuel
which we can purchase on an unsecured basis from our suppliers.
Credit Facility and Term Loan Facility. Our Credit Facility permits borrowings of up to $800.0 million with
a sublimit of $300.0 million for the issuance of letters of credit and bankers’ acceptances. Under the
Credit Facility, we have the right to request increases in available borrowings up to an additional
$150.0 million, subject to the satisfaction of certain conditions. The Credit Facility expires in July 2016.
We had no outstanding borrowings under our Credit Facility as of December 31, 2011 and 2010. Our
issued letters of credit under the Credit Facility totaled $45.3 million and $72.0 million as of
December 31, 2011 and 2010, respectively.
During 2011, we received a $250.0 million Term Loan Facility with principal payments as follows:
$2.5 million in 2012, $7.5 million in 2013, $12.5 million in 2014, $17.5 million in 2015 and $210.0 million
at maturity in July 2016.
Our liquidity consisting of cash and cash equivalents and availability under the Credit Facility fluctuate
based on a number of factors, including the timing of receipts from our customers and payments to our
suppliers as well as commodity prices. Our Credit Facility and our Term Loan Facility contain certain
financial covenants with which we are required to comply. Our failure to comply with the financial
covenants contained in our Credit Facility and our Term Loan Facility could result in an event of default.
An event of default, if not cured or waived, would permit acceleration of any outstanding indebtedness
under the Credit Facility and our Term Loan Facility, trigger cross-defaults under other agreements to
which we are a party and impair our ability to obtain working capital advances and letters of credit, which
would have a material adverse effect on our business, financial condition, results of operations and cash
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