World Fuel Services 2011 Annual Report Download - page 99

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Tax Contingencies
We recorded a decrease of $0.9 million of liabilities related to unrecognized tax benefits (‘‘Unrecognized
Tax Liabilities’’) and a decrease of $0.3 million of assets related to unrecognized tax benefits
(‘‘Unrecognized Tax Assets’’) during 2011. In addition, during 2011, we recorded a decrease of
$0.2 million to our Unrecognized Tax Liabilities related to a foreign currency translation gain, which is
included in other (expense) income, net, in the accompanying consolidated statements of income. As of
December 31, 2011, our Unrecognized Tax Liabilities were $38.4 million and our Unrecognized Tax
Assets were $6.9 million.
We recorded an increase of $1.8 million of additional liabilities related to Unrecognized Tax Liabilities and
a decrease of $0.8 million of assets related to Unrecognized Tax Assets during 2010. In addition, during
2010, we recorded an increase of $0.2 million to our Unrecognized Tax Liabilities related to a foreign
currency translation expense, which is included in other (expense) income, net, in the accompanying
consolidated statements of income. As of December 31, 2010, our Unrecognized Tax Liabilities were
$39.5 million and our Unrecognized Tax Assets were $7.2 million.
The following is a tabular reconciliation of the total amounts of unrecognized tax benefits for the year:
2010 2009
Unrecognized tax benefit – opening balance $26,293 $27,158 $21,624
Gross decreases – tax positions in prior period — — (275)
Gross increases – tax positions in current period 5,890 4,095 6,596
Gross decreases – tax positions in current period (64) (1,629) —
Settlements (62) — —
Lapse of statute of limitations (6,483) (3,331) (787)
Unrecognized tax benefit – ending balance $25,574 $26,293 $27,158
If our uncertain tax positions as of December 31, 2011 are settled by the taxing authorities in our favor,
our income tax expense would be reduced by $19.4 million in the period the matter is considered settled
in accordance with ASC 740. As of December 31, 2011, it does not appear that the total amount of our
unrecognized tax benefits will significantly increase or decrease within the next 12 months.
We record accrued interest and penalties related to unrecognized tax benefits as income tax expense.
Related to the uncertain tax benefits noted above, for interest we recorded income of $0.6 million and
expense of $1.4 million and $0.8 million during 2011, 2010 and 2009, respectively. For penalties, we
recorded expense of $0.2 million, $1.2 million and $0.8 million during 2011, 2010 and 2009, respectively.
As of December 31, 2011 and 2010, we had recognized liabilities of $6.2 million and $6.8 million for
interest and $6.6 million and $6.4 million for penalties, respectively.
In many cases, our uncertain tax positions are related to tax years that remain subject to examination by
the relevant tax authorities. The following table summarizes these open tax years by jurisdiction with
major uncertain tax positions:
Open Tax Year
Jurisdiction Examination in progress Examination not yet initiated
United States 2008 2009-2011
Singapore None 2008-2011
United Kingdom None 2005-2011
Brazil None 2007-2011
South Korea None 2006-2011
Netherlands None 2007-2011
Chile None 2005-2011
Denmark None 2005-2011
75
2011