World Fuel Services 2011 Annual Report Download - page 85

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2. Accounts Receivable
We had accounts receivable of $2.2 billion and $1.4 billion, net of an allowance for bad debt of
$24.3 million and $20.2 million, as of December 31, 2011 and 2010, respectively. Accounts receivable
are written-off when it becomes apparent based upon age or customer circumstances that such
amounts will not be collected.
The following table sets forth activities in our allowance for bad debt (in thousands):
2010 2009
Balance at beginning of period $20,201 $19,690 $23,271
Charges to provision for bad debt 8,173 4,262 4,552
Write-off of uncollectible accounts receivable (4,681) (4,291) (8,800)
Recoveries of bad debt 608 540 667
Balance at end of period $24,301 $20,201 $19,690
Included in accounts receivable, as of December 31, 2011, 2010 and 2009, were net receivables due
from Signature, a related party, of $25.7 million, $21.2 million and $10.4 million, respectively. For 2011,
2010 and 2009, sales to Signature from Page Avjet Fuel Co. LLC (‘‘PAFCO’’), a controlled subsidiary
owned in conjunction with Signature, amounted to $388.5 million, $233.3 million and $107.7 million,
respectively. In addition to PAFCO’s sales to Signature, in the normal course of business, we utilize
Signature and Aircraft Service International Group (‘‘ASIG’’), a sister company of Signature, as
subcontractors to provide various services to customers, including into-plane fueling at airports, and
transportation and storage of fuel and fuel products. These activities with Signature and ASIG were not
considered to be significant.
3. Derivatives
The following describes our derivative classifications:
Cash Flow Hedges. Includes certain of our foreign currency forward contracts we enter into in order to
mitigate the risk of currency exchange rate fluctuations. There were no outstanding cash flow hedges as
of December 31, 2011 and 2010.
Fair Value Hedges. Includes derivatives we enter into in order to hedge price risk associated with our
inventory and certain firm commitments relating to fixed price purchase and sale contracts. As of
December 31, 2011 and 2010, we recorded an unrealized net gain of $2.4 million and an unrealized net
loss of $0.8 million, respectively, related to the ineffectiveness between our derivative hedging
instruments and hedged items on the respective dates.
Non-designated Derivatives. Includes derivatives we primarily enter into in order to mitigate the risk of
market price fluctuations in aviation, marine and land fuel in the form of swaps or futures as well as
certain fixed price purchase and sale contracts and proprietary trading. In addition, non-designated
derivatives are also entered into to hedge the risk of currency rate fluctuations. As of December 31, 2011
and 2010, we recorded an unrealized net gain of $11.1 million and an unrealized net loss of $0.1 million,
respectively, related to our non-designated derivative positions.
For additional information on our derivatives accounting policy, see Note 1.
61
2011