World Fuel Services 2012 Annual Report Download - page 52

Investing Activities. For 2012, net cash used in investing activities was $246.6 million as compared to
$144.6 million for 2011. The $102.0 million increase in cash used in investing activities was principally
due to an increase in cash used for the acquisition of businesses in 2012 as compared to 2011.
Financing Activities. For 2012, net cash provided by financing activities was $66.9 million as compared to
$222.6 million for 2011. The $155.7 million decrease in financing cash flows was principally due to
borrowings under our Credit Facility of $100.5 million in 2012 as compared to Term Loan borrowings of
$250.0 million in 2011.
2011 compared to 2010
Operating Activities. For 2011, net cash used in operating activities was $142.5 million as compared to
$35.7 million in 2010. The $106.8 million change in operating cash flows was primarily due to changes in
net operating assets and liabilities, primarily net working capital, driven by increased sales volume and
higher world oil prices as compared to 2010, which were partially offset by increased net income.
Investing Activities. For 2011, net cash used in investing activities was $144.6 million as compared to
$180.3 million in 2010. The $35.7 million decrease in cash used in investing activities in 2011 was
primarily due to a decrease in the amount paid for the acquisition of businesses, which was partially
offset by increased capital expenditures related to systems development in 2011 as compared to 2010.
Financing Activities. For 2011, net cash provided by financing activities was $222.6 million as compared
to $190.0 million in 2010. The $32.6 million increase in cash flows from financing activities was primarily
due to Term Loan borrowings of $250.0 million in 2011 as compared to proceeds from the sale of equity
shares of $218.8 million in 2010.
Other Liquidity Measures
Cash and Cash Equivalents. As of December 31, 2012, we had cash and cash equivalents of
$172.7 million, which is entirely available for us to use without incurring additional costs. As of
December 31, 2011, we had cash and cash equivalents of $205.4 million, of which $155.3 million was
available for us to use without incurring additional costs and the remaining amount of $50.1 million would
potentially be subject to additional costs if made available for us to use in the United States. Our primary
uses of cash and cash equivalents are to fund accounts receivable, purchase inventory and make
strategic investments, primarily acquisitions. We are usually extended unsecured trade credit from our
suppliers for our fuel purchases; however, certain suppliers require us to either prepay or provide a letter
of credit. Increases in oil prices can negatively affect liquidity by increasing the amount of cash needed to
fund fuel purchases as well as reducing the amount of fuel which we can purchase on an unsecured
basis from our suppliers.
Credit Facility and Term Loans. We have a senior revolving credit facility (‘‘Credit Facility’’) which permits
borrowings of up to $800.0 million with a sublimit of $300.0 million for the issuance of letters of credit
and bankers’ acceptances. Under the Credit Facility, we have the right to request increases in available
borrowings up to an additional $150.0 million, subject to the satisfaction of certain conditions. The Credit
Facility expires in July 2016. We had $100.5 million of outstanding borrowings under our Credit Facility
as of December 31, 2012 and no outstanding borrowings as of December 31, 2011. Our issued letters of
credit under the Credit Facility totaled $47.4 million and $45.3 million as of December 31, 2012 and 2011,
respectively. We also had $247.5 million and $250.0 million in senior term loans (‘‘Term Loans’’)
outstanding as of December 31, 2012 and 2011, respectively.
Our liquidity, consisting of cash and cash equivalents and availability under our Credit Facility fluctuate
based on a number of factors, including the timing of receipts from our customers and payments to our
suppliers as well as commodity prices. Our Credit Facility and our Term Loans contain certain financial
covenants with which we are required to comply. Our failure to comply with the financial covenants
contained in our Credit Facility and our Term Loans could result in an event of default. An event of default,
if not cured or waived, would permit acceleration of any outstanding indebtedness under the Credit
Facility and our Term Loans, trigger cross-defaults under other agreements to which we are a party and
impair our ability to borrow and issue letters of credit, which would have a material adverse effect on our
business, financial condition, results of operations and cash flows. As of December 31, 2012, we were in
compliance with all financial covenants contained in our Credit Facility and our Term Loans.
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