World Fuel Services 2008 Annual Report Download - page 58

WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. Nature of Business, Acquisitions and Significant Accounting Policies
Nature of Business
World Fuel Services Corporation (the “Company”) was incorporated in Florida in July 1984 and along with
its consolidated subsidiaries is referred to collectively as “World Fuel,” “we,” “our” and “us.” We commenced
business as a recycler and reseller of used oil and provider of aviation services. We have since ceased the
activities of a recycler and reseller of used oil. In 1986, we diversified our operations by entering the aviation
fuel services business. In 1995, we entered the marine fuel and related services business by acquiring the
Trans-Tec group of companies. In 2003, we started the land fuel and related services business.
We are engaged in the marketing and sale of marine, aviation and land fuel products and related services on
a worldwide basis. We compete by providing our customers value-added benefits, including single-supplier
convenience, competitive pricing, the availability of trade credit, price risk management, logistical support, fuel
quality control and fuel procurement outsourcing. We have three operating business segments: marine, aviation
and land. In our marine segment, we offer fuel and related services to a broad base of maritime customers,
including international container and tanker fleets and time-charter operators, as well as to the United States and
foreign governments. In our aviation segment, we offer fuel and related services to major commercial airlines,
second and third-tier airlines, cargo carriers, regional and low cost carriers, corporate fleets, fractional operators,
private aircraft, military fleets and to the United States and foreign governments, as well as a private label charge
card to purchase aviation fuel and related services by customers in the general aviation industry. In our land
segment, we offer fuel and related services to petroleum distributors operating in the land transportation market
and retail petroleum operators and other end users.
Acquisitions
2008 Acquisition
In June 2008, we completed the acquisition of certain assets of Texor Petroleum Company, Inc., including
the assets comprising its wholesale motor fuel distribution business and the Texor Petroleum trade name (the
“Texor business”). In connection with the acquisition, we also acquired the rights to operate eight retail gasoline
stations. The financial position and results of operations of the Texor business have been included in our
consolidated financial statements since June 1, 2008. The Texor business is primarily an independent distributor
of branded and unbranded gasoline and diesel fuel to retail petroleum operators and industrial, commercial and
government customers and operates a small number of retail gasoline stations. The aggregate purchase price of
the acquired net assets was $117.6 million, including acquisition costs of $0.5 million. The aggregate purchase
price consisted of $93.7 million in cash, $9.9 million in shares of our common stock and $14.0 million in the
form of a promissory note.
The purchase price of the acquisition of the Texor business was allocated to the acquired net assets based on
their estimated fair values. As of the acquisition date, we recorded identifiable intangible assets totaling $38.3
million. We recorded goodwill, representing the cost in excess of the estimated fair value of the assets acquired
and liabilities assumed for this acquisition, of approximately $66.0 million, which we anticipate will be entirely
deductible for tax purposes.
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