World Fuel Services 2012 Annual Report Download - page 31

damage our reputation, our ability to conduct our business, impact our credit and risk exposure
decisions, cause us to lose customers or revenues, subject us to litigation and/or require us to incur
significant expense to address and remediate or otherwise resolve these issues, which could have a
material adverse effect on our business, financial condition, results of operations and cash flows.
We also have access to sensitive, confidential or personal data or information in certain of our
businesses, some of which may be subject to privacy and security laws, regulations and customer-
imposed controls. Despite our efforts to protect such information, our facilities and systems and those
of our third-party service providers may be vulnerable to security breaches, theft, misplaced or lost data,
programming and/or human errors that could potentially lead to the compromising of that information.
Although we have taken steps to address these concerns by implementing network security and internal
control measures, there can be no assurance that a system failure or data security breach will not have a
material adverse effect on our business, financial condition, results of operations and cash flows.
Changes in U.S. or foreign tax laws could adversely affect our business and future operating
results.
We are affected by various U.S. and foreign taxes, including income taxes and taxes imposed on the
purchase and sale of aviation, marine and land fuel products, such as sales, excise, value added tax,
energy, environmental and other taxes. From time to time, we may also benefit from special tax
concessions in certain jurisdictions. Changes in U.S. and foreign tax laws, our failure to comply with such
laws or the loss of tax concessions could adversely affect our business, financial condition, results of
operations and cash flows.
Furthermore, significant judgment is required in determining our worldwide provision for income taxes.
In the ordinary course of our business, there are many transactions and calculations where the ultimate
tax determination is uncertain. We regularly are under audit by tax authorities and, although we believe
our tax estimates are reasonable, the final determination of tax audits and any related litigation could be
materially different from our historical income tax provisions and accruals. The results of an audit or
litigation could have a material effect on our financial statements in the period or periods for which that
determination is made.
Finally, we earn a significant amount of our operating income from outside the U.S., and any repatriation
of funds currently held in foreign jurisdictions to the U.S. may result in higher effective income tax rates
for the Company. In addition, there have been proposals to change U.S. income tax laws that would
significantly impact how U.S. multinational corporations are taxed on foreign earnings. Although we
cannot predict whether or in what form any proposed legislation may pass, if enacted it could have a
material adverse impact on our income tax expense, financial condition, results of operations and cash
flows.
Our international operations require us to comply with applicable U.S and international laws
and regulations.
Doing business on a worldwide basis requires us to comply with the laws and regulations of the U.S.
government and various international jurisdictions. These regulations place restrictions on our
operations, trade practices and partners and investment decisions. In particular, our international
operations are subject to U.S. and foreign anti-corruption laws and regulations, such as the Foreign
Corrupt Practices Act (‘‘FCPA’’) and the U.K. Anti-Bribery Act, and economic sanction programs
administered by the U.S. Treasury Department’s Office of Foreign Assets Control (‘‘OFAC’’). The FCPA
prohibits us from providing anything of value to foreign officials for the purposes of influencing official
decisions or obtaining or retaining business and the U.K. Anti-Bribery Act prohibits bribery both in the
United Kingdom and internationally, as well as bribery across public and private sectors. As part of our
business, we regularly deal with state-owned business enterprises, the employees of which are
considered foreign officials for purposes of the FCPA. In addition, some of the international locations in
which we operate lack a developed legal system and have higher than normal levels of corruption.
Economic sanctions programs restrict our business dealings with certain countries and individuals. From
time to time, certain of our subsidiaries have had limited business dealings in countries subject to
comprehensive OFAC-administered sanctions, specifically Cuba, Iran, Syria and Sudan. These business
dealings, which represent an insignificant amount of our consolidated revenues and income, generally
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