World Fuel Services 2013 Annual Report Download - page 74

We are separately evaluating potential claims that we, DPM or DPTS may assert against third parties to recover costs and other
liabilities that may be incurred as a result of this incident. We can provide no guarantee that any such claims, if brought by us, will be
successful or, if successful, that the responsible parties will have the financial resources to address any such claims.
We are currently unable to determine the probability of loss, or reasonably estimate a range of potential losses related to the above
proceedings. Accordingly, we have not made any provision for these potential losses in our consolidated financial statements.
We have recorded total liabilities of $21.0 million based on estimated losses related to the value of the tank cars involved in the
incident, as well as legal costs incurred in connection with the incident, which we believe are probable and for which a reasonable
estimate can be made. We believe that a substantial portion of these liabilities are covered by insurance and have recorded total
receivables of $20.9 million. As of December 31, 2013, the remaining unpaid liabilities of $9.9 million are included in accrued expenses
and other current liabilities and the remaining uncollected receivable of $14.7 million is included in other current assets in the
accompanying consolidated balance sheets.
Cathay Pacific Litigation
As of April 2012, one of our subsidiaries, World Fuel Services (Singapore) Pte Ltd. (‘‘WFSS’’) was involved in litigation with Cathay
Pacific Airways Limited (‘‘Cathay’’) arising out of the emergency landing of a Cathay aircraft in Hong Kong in 2010, which Cathay
alleged was caused by contaminated fuel supplied by WFSS. Cathay claimed damages relating to the incident of approximately
$34.0 million. Effective December 24, 2013, Cathay, WFSS and the party that supplied the subject fuel to WFSS, PT Pertamina
(Persero) (‘‘Pertamina’’), entered into a settlement agreement whereby Cathay, in consideration of payments from each of WFSS and
Pertamina, agreed to release and forever discharge any and all claims Cathay may have against WFSS and Pertamina arising out of the
incident without any admission of liability by WFSS or Pertamina. The amount paid to Cathay by WFSS under the settlement
agreement was not significant and fully covered by insurance.
Other Matters
We are a party to various claims, complaints and proceedings arising in the ordinary course of our business including, but not limited to,
environmental claims, commercial and governmental contract claims, such as property damage, demurrage, billing and fuel quality
claims, as well as bankruptcy preference claims. We have established loss provisions for these ordinary course claims as well as other
matters in which losses are probable and can be reasonably estimated. As of December 31, 2013, we had recorded certain reserves
which were not significant. For those matters where a reserve has not been established and for which we believe a loss is reasonably
possible, as well as for matters where a reserve has been recorded but for which an exposure to loss in excess of the amount accrued
is reasonably possible, we believe that such losses will not have a material adverse effect on our consolidated financial statements.
However, any adverse resolution of one or more such claims, complaints or proceedings during a particular period could have a
material adverse effect on our consolidated financial statements or disclosures for that period.
Our estimates regarding potential losses and materiality are based on our judgment and assessment of the claims utilizing currently
available information. Although we will continue to reassess our reserves and estimates based on future developments, our objective
assessment of the legal merits of such claims may not always be predictive of the outcome and actual results may vary from our
current estimates.
8. Shareholders’ Equity
Dividends
We declared cash dividends of $0.15 per share of common stock for each of 2013, 2012 and 2011. Our Credit Facility and Term Loans
restrict the payment of cash dividends to a maximum of the sum of (i) $50.0 million plus (ii) 50% of the cumulative consolidated net
income for each fiscal quarter beginning with the fiscal quarter ended March 31, 2010, plus (iii) 100% of the net proceeds of all equity
issuances made after October 2013. The payment of the above-referenced dividends was in compliance with the Credit Facility and
Term Loans.
Stock Repurchase Programs
Our Board of Directors, from time to time, has authorized stock repurchase programs under the terms of which we may repurchase
our common stock, subject to certain restrictions contained in our Credit Facility and Term Loans. In October 2008, our Board of
Directors authorized a $50.0 million common stock repurchase program (the ‘‘Repurchase Program’’). The Repurchase Program does
not require a minimum number of shares of common stock to be purchased and has no expiration date but may be suspended or
discontinued at any time. In 2013, we repurchased 926,000 shares of our common stock for an aggregate value of $35.0 million
pursuant to the Repurchase Program. We did not repurchase any shares of common stock under any stock repurchase program in
2012 or 2011. As of December 31, 2013, $15.0 million remains available for purchase under the Repurchase Program.
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