World Fuel Services 2012 Annual Report Download - page 22

Land Segment
In our land segment, we offer fuel and related services to petroleum distributors operating in the land
transportation market, retail petroleum operators, and industrial, commercial and government
customers. Our land-related services include management services for the procurement of fuel and
price risk management. Additionally, we engage in crude oil marketing activities. We conduct these
activities throughout most of the United States as well as parts of Brazil and the United Kingdom. In
addition, we offer transaction management services, which include card payment solutions, merchant
processing services, payment solutions for tolls across Europe, government payment systems for global
fuel procurement and commercial payment programs in the land transportation industry.
In connection with our fuel marketing activities, we act as a reseller as we purchase fuel from a supplier,
mark it up and contemporaneously resell it to our customers through spot sales and contract sales. Fuel
is delivered to our customers directly or at designated tanker truck loading terminals commonly referred
to as ‘‘racks’’, which are owned and operated by our suppliers or other third-parties, or directly to
customer locations through third party carriers. We also maintain inventory in certain locations including
pipelines and ship inventory via railcar. Inventory held in storage or being shipped is typically hedged in an
effort to protect us against price risk. Our cost of fuel is generally tied to market-based formulas and our
suppliers typically extend unsecured trade credit to us. We also enter into derivative contracts in order to
mitigate the risk of market price fluctuations for certain of our transactions and to offer our customers
fuel pricing alternatives to meet their needs.
During each of the years presented in the accompanying consolidated statements of income and
comprehensive income, none of our land customers accounted for more than 10% of total consolidated
revenue.
Competitors
Our competitors within the highly fragmented world-wide downstream markets of aviation, marine and
land fuel are numerous, ranging from large multinational corporations, principally major oil producers,
which have significantly greater capital resources, to relatively small and specialized firms. We compete
with the major oil producers that market fuel directly to the large commercial airlines, shipping
companies and petroleum distributors operating in the land transportation market as well as fuel
resellers. We believe that our extensive market knowledge, worldwide presence, logistical expertise,
extension of credit and use of derivatives to provide fuel pricing alternatives give us the ability to
compete in the marketplace.
Employees
As of February 13, 2013, we employed 2,490 people worldwide.
Regulation
Our current and past activities are subject to substantial regulation by federal, state and local
government agencies, inside and outside the United States, which enforce laws and regulations
governing the transportation, sale, storage and disposal of fuel and the collection, transportation,
processing, storage, use and disposal of hazardous substances and wastes, including waste oil and
petroleum products. For example, U.S. federal and state environmental laws applicable to us include
statutes that: (i) allocate the cost of remedying contamination among specifically identified parties and
prevent future contamination; (ii) impose national ambient standards and, in some cases, emission
standards, for air pollutants that present a risk to public health or welfare; (iii) govern the management,
treatment, storage and disposal of hazardous wastes; and (iv) regulate the discharge of pollutants into
waterways. International treaties also prohibit the discharge of petroleum products at sea. The penalties
for violations of environmental laws include injunctive relief, recovery of damages for injury to air, water
or property, and fines for non-compliance. See ‘‘Item 1A – Risk Factors,’’ and ‘‘Item 3 – Legal
Proceedings.’’
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