World Fuel Services 2013 Annual Report Download - page 63

Disclosure About Offsetting Assets and Liabilities. In December 2011, the FASB issued an ASU which requires companies to disclose
information about financial instruments that have been offset and related arrangements to enable users of its financial statements to
understand the effect of those arrangements on its financial position. Companies will be required to provide both net (offset amounts)
and gross information in the notes to the financial statements for relevant assets and liabilities that are offset. In January 2013, the
FASB issued an ASU clarifying that the requirement to disclose information about financial instruments that have been offset and
related arrangements applies only to derivatives, repurchase agreements and reverse purchase agreements, and securities borrowing
and lending transactions that are either offset in accordance with specific criteria contained in the FASB Accounting Standards
Codification or subject to a master netting arrangement or similar agreement. This update became effective at the beginning of our
2013 fiscal year. The adoption of this ASU did not have a significant impact on our consolidated financial statements and disclosures.
2. Accounts Receivable
We had accounts receivable of $2.5 billion and $2.2 billion, net of an allowance for bad debt of $29.2 million and $23.7 million, as of
December 31, 2013 and 2012, respectively. Accounts receivable are written-off when it becomes apparent based upon age or
customer circumstances that such amounts will not be collected.
The following table sets forth activities in our allowance for bad debt (in thousands):
2013 2012 2011
Balance as of beginning of period $23,719 $24,301 $20,201
Charges to provision for bad debt 11,745 4,790 8,173
Write-off of uncollectible accounts receivable (6,940) (6,025) (4,681)
Recoveries of bad debt 664 653 608
Balance as of end of period $29,188 $23,719 $24,301
Included in accounts receivable is a retained beneficial interest related to accounts receivable sold under our receivables purchase
agreements. The retained beneficial interest was not significant as of December 31, 2013 and 2012.
3. Derivatives
The following describes our derivative classifications:
Cash Flow Hedges. Includes certain of our foreign currency forward contracts we enter into in order to mitigate the risk of currency
exchange rate fluctuations. As of December 31, 2013, there were no outstanding cash flow hedges. As of December 31, 2012, we
recorded a net gain of $0.1 million associated with our outstanding cash flow hedges.
Fair Value Hedges. Includes derivatives we enter into in order to hedge price risk associated with our inventory and certain firm
commitments relating to fixed price purchase and sale contracts. As of December 31, 2013 and 2012, we recorded net gains of
$0.7 million and $1.0 million, respectively, related to the ineffectiveness between our derivative hedging instruments and hedged
items on the respective dates.
Non-designated Derivatives. Includes derivatives we primarily enter into in order to mitigate the risk of market price fluctuations in
aviation, marine and land fuel in the form of swaps or futures as well as certain fixed price purchase and sale contracts and proprietary
trading. In addition, non-designated derivatives are also entered into to hedge the risk of currency rate fluctuations. As of
December 31, 2013 and 2012, we recorded net gains of $2.9 million and $9.8 million, respectively, associated with our outstanding
non-designated derivatives.
For additional information on our derivatives accounting policy, see Note 1.
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