World Fuel Services 2015 Annual Report Download - page 54

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WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS
1. Nature of Business, Acquisitions, Significant Accounting Policies and Recent Accounting Pronouncements
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 in this Annual Report on Form 10-K (“2015 10-K Report”) as “World Fuel,” “we,” “our”
and “us.”
We are a global fuel logistics, transaction management and payment processing company, which provides energy
management solutions to the aviation, marine and land transportation industries. We compete by providing our customers
with 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 primarily contract with third
parties for the delivery and storage of fuel products, however, we also operate storage facilities and transportation
assets. We operate in three reportable segments consisting of aviation, marine and land. In our aviation segment, we offer
fuel and related products and services to major commercial airlines, second and third tier airlines, cargo carriers, regional
and low cost carriers, airports, fixed based operators, corporate fleets, fractional operators, private aircraft, military fleets
and to the United States (“U.S.”) and foreign governments as well as intergovernmental organizations. Our marine segment
product and service offerings include fuel, lubricants and related products and services to a broad base of customers,
including international container and tanker fleets, commercial cruise lines, yachts and time charter operators, offshore rig
owners and operators, the U.S. and foreign governments as well as other fuel suppliers. In our land segment, we offer fuel,
crude oil, lubricants, natural gas and related products and services to customers including petroleum distributors operating
in the land transportation market, retail petroleum operators, and industrial, commercial, residential and government
customers.
Acquisitions
2015 Acquisitions
On September 1, 2015, we completed the acquisition of all of the outstanding stock of Pester Marketing Company (“Pester”),
a leading distributor, transporter, and blender of branded motor fuels and lubricants to wholesale, industrial, commercial
and agricultural customers. Pester is headquartered in Denver, Colorado and is also a leading operator of retail convenience
stores in the Rocky Mountain region.
In addition to the above acquisition, in 2015 we completed three acquisitions in our land segment and one acquisition in our
aviation segment which were not material individually or in the aggregate.
The estimated aggregate purchase price for the 2015 acquisitions was 102.3 million, and is subject to change based on the
final value of the net assets acquired. The following reconciles the estimated aggregate purchase price for the 2015
acquisitions to the cash paid for the acquisitions, net of cash acquired (in millions):
Estimated purchase price $ 102.3
Less: Cash acquired 8.7
Estimated purchase price, net of cash acquired 93.6
Less: Amounts due to sellers and promissory notes issued 0.5
Cash paid for acquisition of businesses $ 93.1
The estimated purchase price of the 2015 acquisitions was allocated to the assets acquired and liabilities assumed based
on their estimated fair value as of the acquisition date. Since the valuations of the assets acquired and liabilities assumed
in connection with the 2015 acquisitions have not been finalized, the allocation of the purchase price of these acquisitions
may change. The estimated purchase price allocation for the 2015 acquisitions is as follows (in millions):