World Fuel Services 2012 Annual Report Download - page 28

In addition, many of our customers are foreign and may be required to purchase U.S. dollars to pay for
our products and services. A rapid depreciation or devaluation in currency that affects our customers
could have an adverse effect on their operations and their ability to convert local currency to U.S. dollars
in order to make required payments to us. This could, in turn, increase our credit losses and adversely
affect our business, financial condition, results of operations and cash flows.
Third parties who fail to provide services to us or our customers as agreed could harm our
business.
We use third parties to provide various services to our customers, including into-plane fueling at airports,
fueling of vessels in port and at sea and delivering land-based fuel. The failure of these third parties to
perform these services in accordance with contractual terms for any reason, such as an interruption of
their business because of weather, environmental or labor difficulties or political unrest, could affect our
relationships with our customers and subject us to claims and other liabilities that could have a material
adverse effect on our business, financial condition, results of operations and cash flows.
To the extent that we use third parties in our operations in foreign markets, we are also subject to the risk
that we would be held accountable for the failure of these third parties to comply with the laws and
regulations of the U.S. and various international jurisdictions.
If the fuel we purchase from our suppliers fails to meet the 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, we could incur significant liabilities if a customer
initiates a claim or a lawsuit for which we settle or results in a decision against us. In addition, our
relationship with our customers could be adversely affected and adverse publicity about any allegations
of contaminated fuel may negatively affect us, regardless of whether the allegations are true. Although
in most cases we have recourse against our suppliers for fuel that fails to meet contractual
specifications, such recourse cannot be assured and may be costly to enforce. For example, several of
our supply agreements are with foreign entities, including foreign governments, and are governed by the
laws of foreign jurisdictions. If a supplier breaches such agreement, then we may incur the additional
costs of determining our rights and obligations under the agreement, under applicable foreign laws, and
enforcing an agreement in a foreign jurisdiction. Any significant liability in excess of any applicable
insurance coverage could 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 a significant portion 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 negotiating leverage over us, and if they are 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, which are generally affected by economic cycles. 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.
9