World Fuel Services 2014 Annual Report Download - page 53

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48
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 as “World Fuel,” “we,” “our” and “us.”
We are a global fuel logistics, transaction management and payment processing company, principally engaged in the
distribution of fuel and related products and services in 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 have three reportable operating business segments: aviation, marine, and land. We primarily contract with third parties
for the delivery and storage of fuel products, however, in some cases we own storage and transportation assets for strategic
purposes. 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. In our marine
segment, we offer fuel, lubricants and related products and services to a broad base of marine customers, including
international container and tanker fleets, commercial cruise lines, yachts and time-charter operators, the U.S. and foreign
governments, as well as other fuel suppliers. In our land segment, we offer fuel, lubricants and related products and services
to petroleum distributors operating in the land transportation market, retail petroleum operators, and industrial, commercial,
residential and government customers. Additionally, we engage in crude oil marketing activities. In addition, we offer
transaction management services, which consist of card payment solutions and merchant processing services to customers
in the aviation, marine and land transportation industries.
Acquisitions
2014 Acquisitions
On March 7, 2014, we completed the acquisition of all of the outstanding stock of Watson Petroleum Limited (now known
as WFL (UK) Limited) (“Watson Petroleum”) a leading distributor of gasoline, diesel, heating oil, lubricants and other
products and related services. Watson Petroleum is headquartered in Brinkworth, England and is one of the largest fuel
distributors in the United Kingdom. The estimated purchase price of Watson Petroleum was $173.9 million.
On July 29, 2014, we completed the acquisition of all of the outstanding stock of Colt International, L.L.C. (“Colt”) a leading
provider of contract fuel and international trip planning services in the general aviation marketplace. Colt is headquartered
in Houston, Texas and offers services at more than 3,000 locations. The estimated purchase price of Colt was $72.9 million.
In addition to the above acquisitions, in 2014, we completed two acquisitions in our aviation segment and one acquisition
in our marine segment, which were not material individually or in the aggregate.
The financial position, results of operations and cash flows of the 2014 acquisitions have been included in our consolidated
financial statements since their respective acquisition dates.
The following reconciles the estimated aggregate purchase price for the 2014 acquisitions to the cash paid for the
acquisitions, net of cash acquired (in thousands):
Estimated purchase price $ 296,962
Less: Cash acquired 20,232
Estimated purchase price, net of cash acquired 276,730
Less: Promissory notes issued 9,000
Less: Amounts due to sellers 12,228
Cash paid for acquisition of businesses $ 255,502