Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it ...

Core Insights - The article compares World Kinect (WKC) and Phillips 66 (PSX) as potential undervalued stocks in the Oil and Gas - Refining and Marketing sector [1] Valuation Metrics - WKC has a forward P/E ratio of 11.61, while PSX has a forward P/E of 25.77 [5] - WKC's PEG ratio is 1.18, compared to PSX's PEG ratio of 1.95 [5] - WKC's P/B ratio is 0.9, indicating a lower market value relative to its book value, while PSX has a P/B of 1.94 [6] Investment Ratings - Both WKC and PSX currently hold a Zacks Rank of 1 (Strong Buy), indicating positive earnings estimate revisions for both companies [3] - WKC has a Value grade of A, while PSX has a Value grade of C, suggesting WKC is the superior value option based on current valuation figures [6]

Core Insights - World Kinect (NYSE:WKC) reported Q2 2025 adjusted earnings per share of $0.59, exceeding analyst expectations of $0.48, while GAAP revenue was $9.04 billion, falling short of the $9.32 billion forecast and down 18% from Q2 2024 [1][2] - The quarter was impacted by significant one-off items, including $405 million in impairment and restructuring charges, reflecting a strategic overhaul, particularly in the Land segment [1][6] Financial Performance - Non-GAAP EPS for Q2 2025 was $0.59, a 23% increase from $0.48 in Q2 2024 [2] - GAAP revenue decreased to $9.04 billion from $10.97 billion in Q2 2024, representing an 18% decline [2] - Gross profit was reported at $232 million, down 5% from $245 million in Q2 2024 [2] - Adjusted EBITDA increased by 7% to $87 million compared to $81 million in the previous year [2] - Free cash flow fell sharply to $13 million, a 75% decrease from $53 million in Q2 2024 [2][7] Business Overview and Strategy - World Kinect focuses on delivering fuel and energy solutions across aviation, land transportation, and marine shipping, managing logistics for both conventional and sustainable products [3][10] - The company is prioritizing portfolio reshaping and operational efficiency, expanding into renewable energy, and optimizing global supply chains [4][11] Segment Performance - The Aviation segment showed strong results with an 8% year-over-year increase in gross profit and a 1.7% rise in volumes, while Land and Marine segments faced significant challenges [5][8] - The Land segment's gross profit dropped 17%, impacted by recent asset sales, including the divestment of the UK Land business, which resulted in an $82 million pre-tax loss [5][12] - Marine segment gross profit decreased by 26%, affected by a one-time tax settlement and weak sector demand [6][13] Impairments and Restructuring - The company reported over $430 million in impairment and restructuring costs for the first half of 2025, with $367 million related to goodwill in the Land segment [6][14] - Restructuring costs of $6 million were recognized as part of a global finance and accounting transformation initiative aimed at improving efficiency [7][14] Shareholder Returns - The board declared an 18% increase in the quarterly dividend, reflecting a commitment to returning capital to shareholders despite the challenging quarter [9][16] Future Outlook - The company anticipates that restructuring and asset sales will improve adjusted margins and streamline operations, although it did not upgrade margin or profit targets for the year [17][18]

[PART I. Financial Information](index=3&type=section&id=PART%20I.%20Financial%20Information) This section presents the company's unaudited interim financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements, including the balance sheets, statements of income and comprehensive income, statements of shareholders' equity, and statements of cash flows, along with their accompanying notes. It provides a detailed overview of the company's financial position, performance, and cash flows for the reported interim periods [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20as%20of%20June%2030%2C%202025%20and%20December%2031%2C%202024) This chapter provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific interim dates | Metric | Dec 31, 2024 (Millions) | Jun 30, 2025 (Millions) | Change (Millions) | | :-------------------------------- | :---------------------- | :---------------------- | :---------------- | | Total Assets | $6,731.8 | $6,054.0 | $(677.8) | | Total Liabilities | $4,775.8 | $4,449.2 | $(326.6) | | Total Equity | $1,955.9 | $1,604.8 | $(351.1) | | Cash and cash equivalents | $382.9 | $403.2 | $20.3 | | Accounts receivable, net | $2,432.6 | $2,143.3 | $(289.3) | | Goodwill | $1,181.7 | $825.8 | $(355.9) | | Total current liabilities | $3,437.8 | $3,149.0 | $(288.8) | [Condensed Consolidated Statements of Income and Comprehensive Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20and%20Comprehensive%20Income%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) This chapter presents the company's financial performance, including revenues, expenses, and net income or loss for the reported interim periods | Metric (Three Months Ended Jun 30) | 2025 (Millions) | 2024 (Millions) | Change (Millions) | Change (%) | | :--------------------------------- | :-------------- | :-------------- | :---------------- | :--------- | | Revenue | $9,043.3 | $10,965.2 | $(1,921.9) | -17.5% | | Gross profit | $232.4 | $245.2 | $(12.8) | -5.2% | | Total operating expenses | $577.5 | $200.0 | $377.5 | 188.8% | | Income (loss) from operations | $(345.1) | $45.2 | $(390.3) | -863.5% | | Net income (loss) attributable to World Kinect | $(339.4) | $108.3 | $(447.7) | -413.4% | | Basic earnings (loss) per common share | $(6.06) | $1.81 | $(7.87) | -434.8% | | Metric (Six Months Ended Jun 30) | 2025 (Millions) | 2024 (Millions) | Change (Millions) | Change (%) | | :------------------------------- | :-------------- | :-------------- | :---------------- | :--------- | | Revenue | $18,495.8 | $21,916.6 | $(3,420.8) | -15.6% | | Gross profit | $462.8 | $499.3 | $(36.5) | -7.3% | | Total operating expenses | $814.5 | $390.9 | $423.6 | 108.3% | | Income (loss) from operations | $(351.6) | $108.5 | $(460.1) | -424.1% | | Net income (loss) attributable to World Kinect | $(360.4) | $135.7 | $(496.1) | -365.6% | | Basic earnings (loss) per common share | $(6.38) | $2.27 | $(8.65) | -381.1% | [Condensed Consolidated Statements of Shareholders' Equity](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) This chapter details changes in the company's equity accounts, including retained earnings and accumulated other comprehensive income, over the interim periods | Equity Component | Dec 31, 2024 (Millions) | Jun 30, 2025 (Millions) | Change (Millions) | | :-------------------------------- | :---------------------- | :---------------------- | :---------------- | | Total World Kinect shareholders' equity | $1,948.7 | $1,598.6 | $(350.1) | | Retained earnings | $2,009.2 | $1,615.9 | $(393.3) | | Accumulated other comprehensive income (loss) | $(91.0) | $(17.9) | $73.1 | - Net loss for the three months ended June 30, 2025, was **$(339.4) million**, significantly impacting retained earnings[8](index=8&type=chunk) - Cash dividends declared totaled **$(20.6) million** for the six months ended June 30, 2025[8](index=8&type=chunk) - Purchases of common stock amounted to **$(45.5) million** for the six months ended June 30, 2025[8](index=8&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) This chapter outlines the company's cash inflows and outflows from operating, investing, and financing activities for the reported interim periods | Cash Flow Category (Six Months Ended Jun 30) | 2025 (Millions) | 2024 (Millions) | Change (Millions) | | :------------------------------------------- | :-------------- | :-------------- | :---------------- | | Net cash provided by (used in) operating activities | $142.6 | $178.1 | $(35.5) | | Net cash provided by (used in) investing activities | $(4.8) | $163.8 | $(168.6) | | Net cash provided by (used in) financing activities | $(131.1) | $(114.7) | $(16.4) | | Net increase (decrease) in cash and cash equivalents | $20.3 | $220.3 | $(200.0) | - Investing activities in 2025 included **$23.4 million** from the Watson Fuels sale, compared to **$200.4 million** from the Avinode sale in 2024[12](index=12&type=chunk) - Financing activities in 2025 included **$58.8 million** in net debt repayments and **$45.0 million** in common stock repurchases[12](index=12&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and additional information supporting the condensed consolidated financial statements [1. Basis of Presentation, New Accounting Standards, and Significant Accounting Policies](index=8&type=section&id=1.%20Basis%20of%20Presentation%2C%20New%20Accounting%20Standards%2C%20and%20Significant%20Accounting%20Policies) This note describes the basis of financial statement preparation, outlines recently adopted or evaluated accounting standards, and details significant accounting policies - World Kinect Corporation is a global energy management company providing fulfillment and related services across aviation, marine, and land-based transportation sectors, also supplying natural gas and power[15](index=15&type=chunk) - The company is evaluating ASU 2023-09 (Income Taxes) effective for fiscal years beginning after December 15, 2024, which will amend income tax disclosures[19](index=19&type=chunk) - The company is evaluating ASU 2024-03 (Expense Disaggregation) effective for annual reporting periods beginning after December 15, 2026, which will require disaggregation of certain expense captions in footnotes[20](index=20&type=chunk)[21](index=21&type=chunk) [2. Accounts Receivable](index=9&type=section&id=2.%20Accounts%20Receivable) This note provides details on the company's accounts receivable, including the allowance for expected credit losses and activities related to receivable purchase agreements | Metric | Dec 31, 2024 (Millions) | Jun 30, 2025 (Millions) | Change (Millions) | | :-------------------------------- | :---------------------- | :---------------------- | :---------------- | | Accounts receivable, net | $2,432.6 | $2,143.3 | $(289.3) | | Allowance for expected credit losses | $23.7 | $23.1 | $(0.6) | - **94%** of accounts receivable were outstanding less than 60 days as of June 30, 2025[26](index=26&type=chunk) - The company sold **$5.6 billion** in receivables under RPAs during the six months ended June 30, 2025, recognizing fees of **$16.5 million**[29](index=29&type=chunk) [3. Acquisitions and Divestitures](index=10&type=section&id=3.%20Acquisitions%20and%20Divestitures) This note details significant business acquisitions and divestitures, including the financial impact of sales like Watson Fuels and Avinode - Watson Fuels sale (U.K. land fuels business) on April 9, 2025, for **$42.8 million**, resulted in an **$81.7 million** pre-tax loss[30](index=30&type=chunk) - Avinode sale (aviation software products) on May 1, 2024, for **$200.1 million**, resulted in a **$96.0 million** pre-tax gain[31](index=31&type=chunk) [4. Goodwill](index=10&type=section&id=4.%20Goodwill) This note provides an overview of goodwill by segment and details any impairment charges recognized during the reporting period | Segment | Dec 31, 2024 (Millions) | Jun 30, 2025 (Millions) | Change (Millions) | | :------ | :---------------------- | :---------------------- | :---------------- | | Aviation | $354.4 | $354.5 | $0.1 | | Land | $827.3 | $471.3 | $(356.0) | | Total | $1,181.7 | $825.8 | $(355.9) | - A goodwill impairment charge of **$359.0 million** was recognized in the land reporting unit during Q2 2025 due to updated forecasts and macroeconomic pressures[33](index=33&type=chunk)[36](index=36&type=chunk) [5. Derivative Instruments](index=11&type=section&id=5.%20Derivative%20Instruments) This note describes the company's use of derivative instruments to manage exposures to commodity prices, foreign currency, and interest rates, along with their fair values - Derivative instruments are used to hedge risks related to commodity prices, foreign currency exchange rates, and interest rates[37](index=37&type=chunk)[38](index=38&type=chunk) | Derivative Type | Jun 30, 2025 (Millions) | Dec 31, 2024 (Millions) | | :-------------------------------- | :---------------------- | :---------------------- | | Total gross derivative assets | $422.1 | $499.6 | | Total gross derivative liabilities | $351.0 | $401.6 | | Non-designated Derivatives (Three Months Ended Jun 30) | 2025 (Millions) | 2024 (Millions) | | :--------------------------------------------------- | :-------------- | :-------------- | | Commodity contracts (net gain/loss) | $(5.4) | $(49.8) | | Foreign currency contracts (net gain/loss) | $(10.9) | $(1.9) | | Total gain (loss) | $(16.3) | $(51.7) | [6. Fair Value Measurements](index=15&type=section&id=6.%20Fair%20Value%20Measurements) This note provides information on assets and liabilities measured at fair value, categorized by the input levels used in their valuation | Fair Value Assets (Jun 30, 2025) | Level 1 (Millions) | Level 2 (Millions) | Level 3 (Millions) | Total (Millions) | | :------------------------------- | :----------------- | :----------------- | :----------------- | :--------------- | | Commodities contracts | $144.6 | $241.8 | $15.4 | $401.8 | | Foreign currency contracts | — | $20.3 | — | $20.3 | | Total assets at fair value | $144.6 | $282.0 | $15.4 | $441.9 | - Recognized a **$44.5 million** asset impairment charge for the Watson Fuels asset group in Q1 2025, measured using Level 2 inputs[55](index=55&type=chunk) - Recognized a **$31.6 million** asset impairment charge for the Falmouth asset group and an **$8.0 million** charge for certain trade names in Q2 2025, both measured using Level 3 inputs[57](index=57&type=chunk) [7. Supplier Financing Programs](index=18&type=section&id=7.%20Supplier%20Financing%20Programs) This note details the company's participation in supplier financing programs and the outstanding obligations confirmed under these arrangements | Metric | Jun 30, 2025 (Millions) | Dec 31, 2024 (Millions) | Change (Millions) | | :-------------------------------- | :---------------------- | :---------------------- | :---------------- | | Outstanding obligations confirmed under supplier finance programs | $148.1 | $168.8 | $(20.7) | [8. Debt, Interest Income, Expense, and Other Finance Costs](index=18&type=section&id=8.%20Debt%2C%20Interest%20Income%2C%20Expense%2C%20and%20Other%20Finance%20Costs) This note outlines the company's debt structure, including term loans and convertible notes, and details interest income and expenses | Debt Type | Jun 30, 2025 (Millions) | Dec 31, 2024 (Millions) | Change (Millions) | | :-------------------------------- | :---------------------- | :---------------------- | :---------------- | | Term loan | $443.0 | $455.3 | $(12.3) | | Convertible Notes | $342.1 | $340.9 | $1.2 | | Total debt | $818.4 | $880.8 | $(62.4) | - The company has a revolving credit facility of up to **$1.5 billion**, maturing in April 2027[61](index=61&type=chunk) | Interest Metric (Six Months Ended Jun 30) | 2025 (Millions) | 2024 (Millions) | Change (Millions) | | :---------------------------------------- | :-------------- | :-------------- | :---------------- | | Interest income | $6.3 | $3.7 | $2.6 | | Interest expense and other financing costs | $(54.8) | $(60.0) | $5.2 | | Net interest expense | $(48.5) | $(56.4) | $7.9 | [9. Commitments and Contingencies](index=19&type=section&id=9.%20Commitments%20and%20Contingencies) This note discloses significant commitments and potential liabilities, including ongoing legal and regulatory investigations and tax assessments - An investigation by the Finnish energy regulatory authority is ongoing regarding an erroneous bid submission in November 2023, which led to **$48.8 million** in extraordinary losses[63](index=63&type=chunk) - South Korean tax authorities issued assessments totaling approximately **$25.4 million** (KRW 34.3 billion) for alleged VAT invoice failures from 2011-2014, which the company is contesting[65](index=65&type=chunk) [10. Shareholders' Equity](index=20&type=section&id=10.%20Shareholders'%20Equity) This note provides details on changes in shareholders' equity, including dividends declared and components of accumulated other comprehensive income or loss | Dividend Period | Per Share | Total (Millions) | Payment Date | | :-------------- | :-------- | :--------------- | :----------- | | Q1 2025 | $0.17 | $9.6 | April 16, 2025 | | Q2 2025 | $0.20 | $11.0 | July 16, 2025 | | Q1 2024 | $0.17 | $10.1 | April 16, 2024 | | Q2 2024 | $0.17 | $10.1 | July 16, 2024 | | Accumulated OCI (Loss) Component | Jan 1, 2025 (Millions) | Jun 30, 2025 (Millions) | Change (Millions) | | :------------------------------- | :--------------------- | :---------------------- | :---------------- | | Foreign Currency Translation Adjustments | $(92.2) | $(17.9) | $74.3 | | Cash Flow Hedges | $1.2 | $0.1 | $(1.1) | | Total Accumulated OCI (Loss) | $(91.0) | $(17.9) | $73.1 | [11. Revenue from Contracts with Customers](index=21&type=section&id=11.%20Revenue%20from%20Contracts%20with%20Customers) This note disaggregates the company's revenue from contracts with customers by geographic area for the reported interim periods | Geographic Area (Six Months Ended Jun 30) | 2025 (Millions) | 2024 (Millions) | Change (Millions) | Change (%) | | :---------------------------------------- | :-------------- | :-------------- | :---------------- | :--------- | | Asia Pacific | $2,243.8 | $2,838.2 | $(594.4) | -20.9% | | EMEA | $3,925.4 | $4,936.7 | $(1,011.3) | -20.5% | | LATAM | $2,265.7 | $2,950.1 | $(684.4) | -23.2% | | North America | $10,043.0 | $11,309.6 | $(1,266.6) | -11.2% | | Total revenue | $18,495.8 | $21,916.6 | $(3,420.8) | -15.6% | [12. Income Taxes](index=22&type=section&id=12.%20Income%20Taxes) This note details the provision for income taxes, the effective income tax rate, and significant tax-related items, including ongoing tax audits and assessments | Income Tax Metric (Six Months Ended Jun 30) | 2025 (Millions) | 2024 (Millions) | Change (Millions) | | :------------------------------------------ | :-------------- | :-------------- | :---------------- | | Provision for income taxes | $(116.4) | $13.0 | $(129.4) | | Effective income tax rate | 24.4% | 8.8% | 15.6 pp | - The 2025 provision includes a net discrete income tax benefit of **$11.7 million**, partly from the Watson Fuels sale and changes in uncertain tax positions[76](index=76&type=chunk) - The company is under audit in Denmark, with final tax assessments of **$124.6 million** and proposed assessments of **$27.1 million**, which are being contested[80](index=80&type=chunk) [13. Business Segments](index=22&type=section&id=13.%20Business%20Segments) This note presents financial information by business segment, including revenue and operating income or loss for Aviation, Land, and Marine operations | Segment (Six Months Ended Jun 30, 2025) | Revenue (Millions) | Operating Income (Loss) (Millions) | | :-------------------------------------- | :----------------- | :--------------------------------- | | Aviation | $9,379.3 | $127.8 | | Land | $5,290.3 | $(412.2) | | Marine | $3,826.1 | $(10.8) | | Total | $18,495.8 | $(295.1) | - Land segment operating loss was primarily due to **$411.5 million** in goodwill and other asset impairments[83](index=83&type=chunk) | Segment (Six Months Ended Jun 30, 2024) | Revenue (Millions) | Operating Income (Loss) (Millions) | | :-------------------------------------- | :----------------- | :--------------------------------- | | Aviation | $10,512.9 | $112.0 | | Land | $6,709.0 | $14.2 | | Marine | $4,694.6 | $37.2 | | Total | $21,916.6 | $163.4 | [14. Earnings Per Common Share](index=26&type=section&id=14.%20Earnings%20Per%20Common%20Share) This note provides the calculation of basic and diluted earnings per common share for the reported interim periods | EPS Metric | Three Months Ended Jun 30, 2025 | Three Months Ended Jun 30, 2024 | Six Months Ended Jun 30, 2025 | Six Months Ended Jun 30, 2024 | | :---------------------------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Basic earnings (loss) per common share | $(6.06) | $1.81 | $(6.38) | $2.27 | | Diluted earnings (loss) per common share | $(6.06) | $1.81 | $(6.38) | $2.25 | - Weighted average common shares for diluted EPS decreased from **60.0 million** to **56.0 million** for the three months ended June 30, 2025, and from **60.3 million** to **56.5 million** for the six months ended June 30, 2025[86](index=86&type=chunk) [15. Restructuring and Exit Activities](index=26&type=section&id=15.%20Restructuring%20and%20Exit%20Activities) This note details charges and expected savings related to the company's restructuring plans and exit activities - The 2025 Restructuring Plan led to **$15.0 million** in charges in Q1 2025 for workforce alignment, with expected annualized compensation savings of approximately **$30 million**[87](index=87&type=chunk)[99](index=99&type=chunk) - An additional **$6.0 million** in restructuring charges were recognized in Q2 2025 for optimizing global finance and accounting operations, with expected total cost savings of approximately **$80 million** for 2026-2030[88](index=88&type=chunk)[100](index=100&type=chunk) | Accrual Activity (Six Months Ended Jun 30, 2025) | Amount (Millions) | | :----------------------------------------------- | :---------------- | | Accrued charges as of December 31, 2024 | $2.0 | | Restructuring and exit activity charges | $21.0 | | Paid during the period | $(10.1) | | Accrued charges as of June 30, 2025 | $12.9 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides a detailed analysis of the company's financial condition and results of operations, highlighting significant declines in revenue and net income for both the three and six months ended June 30, 2025, compared to the prior year. Key drivers include substantial goodwill and asset impairment charges, particularly in the land segment, and the impact of divestitures. The company is undergoing a restructuring plan to streamline operations and improve efficiency [Forward-Looking Statements](index=27&type=section&id=Forward-Looking%20Statements) This section highlights the inherent uncertainties and risks associated with forward-looking statements in the report - Forward-looking statements cover expectations on inflation, trade uncertainty, market conditions in aviation, land, and marine sectors, fuel prices, working capital, liquidity, capital expenditures, tax, legal, and accounting matters, and hedging strategy[91](index=91&type=chunk) - Important factors that could cause actual results to differ include tariffs, customer creditworthiness, energy price changes, inability to mitigate financial risks, and failure to achieve expected benefits from restructuring[93](index=93&type=chunk) [Business Overview](index=29&type=section&id=Business%20Overview) This section provides a high-level description of the company's global energy management business and its service offerings - The company is a global energy management company providing fuel distribution and related services in aviation, marine, and land transportation, as well as natural gas, power, and sustainability services[97](index=97&type=chunk) [Restructuring and Exit Activities](index=29&type=section&id=Restructuring%20and%20Exit%20Activities) This section discusses the company's strategic initiatives to streamline operations, including asset rationalization and workforce alignment - The Watson Fuels sale (U.K. land fuels business) was completed in April 2025 as part of asset rationalization[98](index=98&type=chunk) - The 2025 Restructuring Plan, initiated in Q1 2025, includes workforce alignment and optimization of global finance and accounting operations[99](index=99&type=chunk)[100](index=100&type=chunk) - The restructuring is expected to result in approximately **$30 million** in annualized compensation-related savings and total cost savings of about **$80 million** from 2026 through 2030[99](index=99&type=chunk)[100](index=100&type=chunk) [Reportable Segments](index=29&type=section&id=Reportable%20Segments) This section provides an overview of the company's operational segments: Aviation, Land, and Marine [Aviation Segment](index=29&type=section&id=Aviation%20Segment) This section details the performance and strategic focus of the company's aviation fuel and services business - Aviation segment benefited from growth in fuel and services, enhanced logistics, and geographic expansion[103](index=103&type=chunk) - Achieved higher returns in a high interest rate environment through improved working capital management[103](index=103&type=chunk) - Completed the sale of Avinode Group (aviation FBO software products) in Q2 2024 to focus on core businesses[104](index=104&type=chunk) [Land Segment](index=30&type=section&id=Land%20Segment) This section outlines the performance, strategic adjustments, and challenges faced by the company's land-based fuel distribution business - Focus on improving capital efficiency by optimizing asset utilization and realigning the operational platform[105](index=105&type=chunk) - Exited certain North American land operations, disposed of Brazil operations, and completed the Watson Fuels sale in April 2025[105](index=105&type=chunk) - Recognized a goodwill impairment charge in Q2 2025 following a reassessment of business lines, reflecting downward revisions to long-term forecasts and underperformance[106](index=106&type=chunk) [Marine Segment](index=30&type=section&id=Marine%20Segment) This section describes the performance and market dynamics of the company's marine fuel and services business - Marine business traditionally benefits from elevated fuel prices, volatility, and a constrained credit environment due to the spot nature of sales[107](index=107&type=chunk) - Positioned to generate moderate earnings in stable markets and additional value in volatile and credit-constrained markets[107](index=107&type=chunk) [Macroeconomic Environment](index=30&type=section&id=Macroeconomic%20Environment) This section discusses the impact of global economic factors, such as inflation, trade uncertainty, and interest rates, on the company's operations - Trade-related uncertainty can lead to volatility in global financial and commodity markets, declining consumer confidence, and reduced demand for fuel products[108](index=108&type=chunk) - Inflation decelerated in 2024, but prolonged high inflation or trade uncertainty could negatively impact results[108](index=108&type=chunk)[110](index=110&type=chunk) - Higher interest rates increase interest expense, but the company mitigates fuel price increases through hedging programs[109](index=109&type=chunk)[110](index=110&type=chunk) [Results of Operations](index=31&type=section&id=Results%20of%20Operations) This section provides a comparative analysis of the company's financial performance for the reported interim periods [Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024](index=31&type=section&id=Three%20Months%20Ended%20June%2030%2C%202025%20Compared%20to%20Three%20Months%20Ended%20June%2030%2C%202024) This section compares the company's financial results for the three-month periods, highlighting key changes and drivers [Consolidated Results of Operations](index=31&type=section&id=Consolidated%20Results%20of%20Operations) This section presents a consolidated overview of the company's financial performance for the three-month period, including revenue, gross profit, and net income | Metric (Three Months Ended Jun 30) | 2025 (Millions) | 2024 (Millions) | Change (Millions) | Change (%) | | :--------------------------------- | :-------------- | :-------------- | :---------------- | :--------- | | Revenue | $9,043.3 | $10,965.2 | $(1,921.9) | -17.5% | | Gross profit | $232.4 | $245.2 | $(12.8) | -5.2% | | Total operating expenses | $577.5 | $200.0 | $377.5 | 188.8% | | Income (loss) from operations | $(345.1) | $45.2 | $(390.3) | -863.5% | | Net income (loss) attributable to World Kinect | $(339.4) | $108.3 | $(447.7) | -413.4% | - Goodwill and other asset impairment charges of **$398.6 million** were the primary driver for the increase in operating expenses[114](index=114&type=chunk) - Net non-operating expense increased by **$175.0 million**, primarily due to an **$81.7 million** loss on the Watson Fuels sale in 2025 compared to a **$96.0 million** gain on the Avinode sale in 2024[115](index=115&type=chunk) [Aviation Segment Results of Operations](index=32&type=section&id=Aviation%20Segment%20Results%20of%20Operations) This section details the financial performance of the Aviation segment for the three-month period, including revenue, gross profit, and operating income | Metric (Three Months Ended Jun 30) | 2025 (Millions) | 2024 (Millions) | Change (Millions) | Change (%) | | :--------------------------------- | :-------------- | :-------------- | :---------------- | :--------- | | Revenue | $4,725.1 | $5,368.7 | $(643.6) | -12.0% | | Gross profit | $138.0 | $127.7 | $10.2 | 8.0% | | Income (loss) from operations | $71.7 | $68.0 | $3.7 | 5.4% | | Volumes (gallons) | 1,856.0 | 1,825.0 | 31.0 | 1.7% | | Average price per gallon | $2.31 | $2.74 | $(0.43) | -15.7% | - Gross profit increase was driven by higher profit contribution from operated airport locations in Europe and business/general aviation activities[118](index=118&type=chunk) [Land Segment Results of Operations](index=32&type=section&id=Land%20Segment%20Results%20of%20Operations) This section details the financial performance of the Land segment for the three-month period, including revenue, gross profit, and operating income or loss | Metric (Three Months Ended Jun 30) | 2025 (Millions) | 2024 (Millions) | Change (Millions) | Change (%) | | :--------------------------------- | :-------------- | :-------------- | :---------------- | :--------- | | Revenue | $2,425.0 | $3,292.4 | $(867.5) | -26.3% | | Gross profit | $67.4 | $80.8 | $(13.4) | -16.6% | | Income (loss) from operations | $(366.9) | $(4.2) | $(362.6) | -8633.3% | | Volumes (gallons) | 1,343.3 | 1,449.2 | $(106.0) | -7.3% | | Average price per gallon | $1.81 | $2.27 | $(0.47) | -20.7% | - Gross profit decrease was primarily due to the Watson Fuels sale, exit from certain North American land operations, and reduced demand in liquid fuel business[122](index=122&type=chunk) - Operating loss was significantly impacted by goodwill and other asset impairment charges recognized in Q2 2025[123](index=123&type=chunk) [Marine Segment Results of Operations](index=33&type=section&id=Marine%20Segment%20Results%20of%20Operations) This section details the financial performance of the Marine segment for the three-month period, including revenue, gross profit, and operating income or loss | Metric (Three Months Ended Jun 30) | 2025 (Millions) | 2024 (Millions) | Change (Millions) | Change (%) | | :--------------------------------- | :-------------- | :-------------- | :---------------- | :--------- | | Revenue | $1,893.2 | $2,304.1 | $(410.9) | -17.8% | | Gross profit | $27.0 | $36.7 | $(9.6) | -26.2% | | Income (loss) from operations | $(25.6) | $10.4 | $(36.0) | -346.2% | | Volumes (metric tons) | 3.9 | 4.2 | $(0.3) | -7.1% | | Average price per metric ton | $489.68 | $553.80 | $(64.12) | -11.6% | - Gross profit decline was due to an unfavorable transaction tax settlement and weaker performance at certain marine physical inventory locations[125](index=125&type=chunk) - Operating loss was impacted by asset impairment charges recognized in Q2 2025[126](index=126&type=chunk) [Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024](index=34&type=section&id=Six%20Months%20Ended%20June%2030%2C%202025%20Compared%20to%20Six%20Months%20Ended%20June%2030%2C%202024) This section compares the company's financial results for the six-month periods, highlighting key changes and drivers [Consolidated Results of Operations](index=34&type=section&id=Consolidated%20Results%20of%20Operations) This section presents a consolidated overview of the company's financial performance for the six-month period, including revenue, gross profit, and net income | Metric (Six Months Ended Jun 30) | 2025 (Millions) | 2024 (Millions) | Change (Millions) | Change (%) | | :------------------------------- | :-------------- | :-------------- | :---------------- | :--------- | | Revenue | $18,495.8 | $21,916.6 | $(3,420.8) | -15.6% | | Gross profit | $462.8 | $499.3 | $(36.5) | -7.3% | | Total operating expenses | $814.5 | $390.9 | $423.6 | 108.3% | | Income (loss) from operations | $(351.6) | $108.5 | $(460.1) | -424.1% | | Net income (loss) attributable to World Kinect | $(360.4) | $135.7 | $(496.1) | -365.6% | - Goodwill and other asset impairment charges of **$443.1 million** and increased restructuring charges were the primary drivers for the increase in operating expenses[129](index=129&type=chunk) - Net non-operating expense increased by **$163.8 million**, primarily due to an **$81.7 million** loss on the Watson Fuels sale in 2025 compared to a **$96.0 million** gain on the Avinode sale in 2024[130](index=130&type=chunk) [Aviation Segment Results of Operations](index=35&type=section&id=Aviation%20Segment%20Results%20of%20Operations) This section details the financial performance of the Aviation segment for the six-month period, including revenue, gross profit, and operating income | Metric (Six Months Ended Jun 30) | 2025 (Millions) | 2024 (Millions) | Change (Millions) | Change (%) | | :------------------------------- | :-------------- | :-------------- | :---------------- | :--------- | | Revenue | $9,379.3 | $10,512.9 | $(1,133.6) | -10.8% | | Gross profit | $253.6 | $236.2 | $17.5 | 7.4% | | Income (loss) from operations | $127.8 | $112.0 | $15.8 | 14.1% | | Volumes (gallons) | 3,556.2 | 3,498.1 | 58.1 | 1.7% | | Average price per gallon | $2.40 | $2.80 | $(0.40) | -14.3% | - Gross profit increase was primarily attributable to higher profit contribution from operated airport locations in Europe and business and general aviation activities[133](index=133&type=chunk) [Land Segment Results of Operations](index=36&type=section&id=Land%20Segment%20Results%20of%20Operations) This section details the financial performance of the Land segment for the six-month period, including revenue, gross profit, and operating income or loss | Metric (Six Months Ended Jun 30) | 2025 (Millions) | 2024 (Millions) | Change (Millions) | Change (%) | | :------------------------------- | :-------------- | :-------------- | :---------------- | :--------- | | Revenue | $5,290.3 | $6,709.0 | $(1,418.7) | -21.1% | | Gross profit | $146.4 | $178.1 | $(31.7) | -17.8% | | Income (loss) from operations | $(412.2) | $14.2 | $(426.4) | -3002.8% | | Volumes (gallons) | 2,837.6 | 3,047.4 | $(209.8) | -6.9% | | Average price per gallon | $1.86 | $2.20 | $(0.34) | -15.5% | - Gross profit decrease was primarily driven by lower profit contribution from liquid fuel business in North America and the Watson Fuels sale[137](index=137&type=chunk) - Operating loss was principally related to goodwill and other asset impairment charges recognized in Q2 2025[138](index=138&type=chunk) [Marine Segment Results of Operations](index=36&type=section&id=Marine%20Segment%20Results%20of%20Operations) This section details the financial performance of the Marine segment for the six-month period, including revenue, gross profit, and operating income or loss | Metric (Six Months Ended Jun 30) | 2025 (Millions) | 2024 (Millions) | Change (Millions) | Change (%) | | :------------------------------- | :-------------- | :-------------- | :---------------- | :--------- | | Revenue | $3,826.1 | $4,694.6 | $(868.5) | -18.5% | | Gross profit | $62.8 | $85.0 | $(22.3) | -26.2% | | Income (loss) from operations | $(10.8) | $37.2 | $(48.0) | -129.0% | | Volumes (metric tons) | 7.6 | 8.5 | $(0.9) | -10.6% | | Average price per metric ton | $504.30 | $552.90 | $(48.61) | -8.8% | - Gross profit decline was due to an unfavorable transaction tax settlement, lower bunker fuel prices, reduced volatility, and decreased demand[141](index=141&type=chunk) - Operating loss was impacted by asset impairment charges recognized in Q2 2025[142](index=142&type=chunk) [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) This section analyzes the company's ability to generate and manage cash, including sources and uses of liquidity [Sources of Liquidity and Factors Impacting Our Liquidity](index=37&type=section&id=Sources%20of%20Liquidity%20and%20Factors%20Impacting%20Our%20Liquidity) This section identifies the primary sources of the company's liquidity and discusses factors that may influence its cash availability - Liquidity sources include cash and cash equivalents and a **$1.5 billion** revolving Credit Facility maturing in April 2027[144](index=144&type=chunk)[147](index=147&type=chunk) - The Credit Facility is subject to a consolidated total leverage ratio covenant of not more than **4.75 to 1**[147](index=147&type=chunk) - **$350.0 million** aggregate principal amount of 3.250% Convertible Senior Notes are due in 2028[146](index=146&type=chunk) - Receivable purchase agreements allow the sale of qualifying accounts receivable for cash, providing additional liquidity[150](index=150&type=chunk) [Future Uses of Liquidity](index=39&type=section&id=Future%20Uses%20of%20Liquidity) This section outlines the company's expected allocation of cash for operational needs, strategic investments, and other financial commitments - Cash is primarily used for working capital, strategic acquisitions, and investments[152](index=152&type=chunk) - No material changes in expected future uses of liquidity since December 31, 2024[152](index=152&type=chunk) [Cash Flows](index=39&type=section&id=Cash%20Flows) This section provides a detailed breakdown of cash generated from or used in operating, investing, and financing activities | Cash Flow Category (Six Months Ended Jun 30) | 2025 (Millions) | 2024 (Millions) | Change (Millions) | | :------------------------------------------- | :-------------- | :-------------- | :---------------- | | Net cash provided by (used in) operating activities | $142.6 | $178.1 | $(35.5) | | Net cash provided by (used in) investing activities | $(4.8) | $163.8 | $(168.6) | | Net cash provided by (used in) financing activities | $(131.1) | $(114.7) | $(16.4) | - Decrease in operating cash flow due to derivative activities and income tax payments, partially offset by RPA activity and tax refunds[154](index=154&type=chunk) - Shift in investing activities from net provider to net user primarily due to the absence of large divestiture proceeds like the Avinode sale in 2024[155](index=155&type=chunk) - Increase in cash used in financing activities due to net debt repayments (**$58.8 million**) and common stock repurchases (**$45.0 million**)[156](index=156&type=chunk) [Critical Accounting Estimates](index=39&type=section&id=Critical%20Accounting%20Estimates) This section discusses accounting estimates that require significant judgment and could materially impact the financial statements [Goodwill Impairment Assessment](index=40&type=section&id=Goodwill%20Impairment%20Assessment) This section explains the process for evaluating goodwill for impairment and details any significant impairment charges recognized - Goodwill is evaluated for impairment at least annually, or more frequently if circumstances indicate impairment[159](index=159&type=chunk) - The land reporting unit has been at risk since Q4 2024 and incurred a **$359.0 million** goodwill impairment charge in Q2 2025[160](index=160&type=chunk)[161](index=161&type=chunk) - Significant judgment is involved in determining fair value, and actual results differing from assumptions could lead to additional impairment charges[159](index=159&type=chunk)[161](index=161&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) There have been no material changes to the company's exposures to commodity price, interest rate, or foreign currency risk since December 31, 2024. Further details on derivative instruments are provided in Note 5 - No material changes in exposure to commodity price, interest rate, or foreign currency risk since December 31, 2024[162](index=162&type=chunk) - Information on derivative instruments and their fair value positions is available in Note 5[163](index=163&type=chunk) [Item 4. Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2025. There were no material changes in internal control over financial reporting during the three months ended June 30, 2025 [Management's Evaluation of Disclosure Controls and Procedures](index=40&type=section&id=Management's%20Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section presents management's conclusion on the effectiveness of the company's disclosure controls and procedures - CEO and CFO concluded that disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2025[165](index=165&type=chunk) [Changes in Internal Control over Financial Reporting](index=40&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section reports on any material changes in the company's internal control over financial reporting during the period - No material changes in internal control over financial reporting during the three months ended June 30, 2025[166](index=166&type=chunk) [PART II. Other Information](index=41&type=section&id=PART%20II.%20Other%20Information) This section covers legal proceedings, equity security sales, other information, and exhibits [Item 1. Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings, including tax matters and ordinary course business claims. While no current proceedings are expected to have a material adverse effect, an unfavorable resolution of any matter could be material - The company is involved in various tax matters and ordinary course business claims, including environmental, commercial, and governmental contract claims[168](index=168&type=chunk)[169](index=169&type=chunk) - No current proceedings are expected to have a material adverse effect, but adverse resolutions could be material[171](index=171&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=41&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased 1,350 thousand shares of common stock for approximately $35.3 million during the three months ended June 30, 2025, at an average price of $26.12 per share. Approximately $191.7 million remained available under stock repurchase authorizations as of June 30, 2025 [Issuer Purchases of Equity Securities](index=41&type=section&id=Issuer%20Purchases%20of%20Equity%20Securities) This section provides a table detailing the company's common stock repurchases during the reporting period | Period | Total Number of Shares Purchased (Thousands) | Average Price Paid Per Share | | :----------------- | :------------------------------------------- | :--------------------------- | | 4/1/2025 - 4/30/2025 | 10 | $28.45 | | 5/1/2025 - 5/31/2025 | 1,304 | $26.06 | | 6/1/2025 - 6/30/2025 | 36 | $27.61 | | Total (Q2 2025) | 1,350 | $26.12 | - Approximately **$191.7 million** remained available under stock repurchase authorizations as of June 30, 2025[172](index=172&type=chunk) [Item 5. Other Information](index=42&type=section&id=Item%205.%20Other%20Information) No officers or directors adopted or terminated Rule 10b5-1 trading arrangements during the three months ended June 30, 2025 [Rule 10b5-1 Trading Plans](index=42&type=section&id=Rule%2010b5-1%20Trading%20Plans) This section confirms whether any officers or directors adopted or terminated Rule 10b5-1 trading arrangements - No officers or directors adopted or terminated Rule 10b5-1 trading arrangements during Q2 2025[173](index=173&type=chunk) [Item 6. Exhibits](index=42&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of the 10-Q Report, including indemnification agreements, the 2025 Omnibus Plan, CEO and CFO certifications, and XBRL formatted financial statements - Exhibits include Director Indemnification Agreement, 2025 Omnibus Plan, CEO and CFO certifications (Rule 13a-14(a) and Section 906), and XBRL formatted financial statements[174](index=174&type=chunk) [SIGNATURES](index=43&type=section&id=SIGNATURES) This section contains the official signatures of the company's principal executive and financial officers, certifying the report - The report was signed by Michael J. Kasbar (Chairman and CEO) and Ira M. Birns (President and CFO) on August 1, 2025[178](index=178&type=chunk)

Core Viewpoint - World Kinect (WKC) reported quarterly earnings of $0.59 per share, exceeding the Zacks Consensus Estimate of $0.48 per share, marking an earnings surprise of +22.92% [1][2] Financial Performance - The company posted revenues of $9.04 billion for the quarter ended June 2025, which was 7.68% below the Zacks Consensus Estimate and down from $10.97 billion year-over-year [2] - Over the last four quarters, World Kinect has surpassed consensus EPS estimates three times but has not beaten revenue estimates [2] Stock Performance and Outlook - World Kinect shares have increased by approximately 0.6% since the beginning of the year, underperforming compared to the S&P 500's gain of 8.2% [3] - The company's current Zacks Rank is 5 (Strong Sell), indicating expectations of underperformance in the near future [6] Future Earnings Expectations - The current consensus EPS estimate for the upcoming quarter is $0.64 on revenues of $10.01 billion, and for the current fiscal year, it is $2.17 on revenues of $39.04 billion [7] - The trend of estimate revisions for World Kinect was unfavorable prior to the earnings release, which may impact future stock movements [6][5] Industry Context - The Oil and Gas - Refining and Marketing industry, to which World Kinect belongs, is currently ranked in the bottom 26% of over 250 Zacks industries, suggesting potential challenges ahead [8]

Financial Data and Key Metrics Changes - In Q2 2025, total volume decreased by 3% year over year to $4.2 billion, while consolidated gross profit declined by 5% to $232 million, falling below the previous guidance range [13][14] - Adjusted operating income increased by 11% year over year, indicating improved overall operating performance despite the decline in gross profit [14] - Operating expenses were $173 million, down 10% year over year and below the guidance range [18][19] - Operating cash flow was $28 million, and free cash flow was $13 million, contributing to a year-to-date operating cash flow of $143 million and free cash flow of $113 million [20][24] Business Line Data and Key Metrics Changes - Aviation segment volume increased by 2% year over year to 1.9 billion gallons, with gross profit rising by 8% to $138 million, driven by strong performance in Europe [14][15] - Land segment volume decreased by 7% year over year, with gross profit down 17% to $67 million, primarily due to the sale of UK and Brazil operations and lower volumes in North America [15][16] - Marine segment volumes also declined by 7% year over year, with gross profit decreasing approximately 26%, impacted by an unfavorable transaction tax settlement and weaker performance in certain locations [17][18] Market Data and Key Metrics Changes - The company noted strong demand for commercial and business aviation fuel and services, particularly in Europe, which is expected to continue into Q3 [6][10] - The land segment faced challenges due to global economic uncertainty and demand weakness in North America, prompting a strategic exit from underperforming activities [7][8] Company Strategy and Development Direction - The company is focused on streamlining its portfolio to reduce complexity and enhance execution in high-value areas, including divesting underperforming assets [7][10] - A balanced approach to capital deployment is being maintained, with an increase in quarterly dividends reflecting confidence in cash flow generation capabilities [9][20] - The company aims to concentrate on core markets that offer predictable earnings contributions and sustainable value creation [8][22] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing macroeconomic headwinds but expressed confidence in the ability to generate consistent cash flow and drive long-term value [10][24] - The company expects sequential improvement in land performance in Q3, although year-over-year gross profit will remain lower due to previous portfolio changes [17][22] - Management highlighted the importance of operational discipline and cost management in navigating the current market complexities [19][23] Other Important Information - The company generated $64 million in returns to shareholders through share repurchases and dividends in the first half of the year [20][24] - The balance sheet remains strong with $415 million in net debt and over $1 billion in available liquidity, allowing for potential strategic investments [21] Q&A Session Summary Question: Regarding land disappointment and potential asset divestitures - Management indicated that there are still parts of the land business that could be optimized or divested, focusing on activities that are not scalable or profitable [30][32] Question: Insights on third-quarter expectations for each business segment - Aviation is expected to benefit from government activity, while Marine may see profit declines due to ongoing market conditions. Land is anticipated to have lower gross profit due to recent exits from unprofitable markets [36][44] Question: Investment opportunities and strategies moving forward - The company is looking for both organic and inorganic growth opportunities, particularly in aviation and land, as valuations improve and interest rates decrease [56][58] Question: Impact of tax settlement on Marine segment guidance - Without the tax settlement, Marine gross profit would have been within the guidance range [59]

Second Quarter 2025 Earnings Call July 31, 2025 www.world-kinect.com Copyright © 2025 World Kinect Corporation. All rights reserved. Disclaimer and Cautionary Note Regarding Forward-Looking Statements Certain statements, including comments about World Kinect Corporation's expectations regarding future plans, performance and acquisitions are forward-looking statements that are subject to a range of uncertainties and risks that could cause World Kinect's actual results to materially differ from the forward-lo ...

[Second Quarter 2025 Results Overview](index=1&type=section&id=Second%20Quarter%202025%20Results%20Overview) [Second Quarter 2025 Highlights](index=1&type=section&id=Second%20Quarter%202025%20Highlights) World Kinect Corporation reported **$232 million** total gross profit and a **$339 million** GAAP net loss in Q2 2025, driven by impairments and divestitures, with aviation gross profit up 8% Key Financial Metrics | Metric | Q2 2025 (Million USD) | Q2 2024 (Million USD) | Change | | :--- | :--- | :--- | :--- | | Total Gross Profit | $232 | $245 | (5)% | | GAAP Net Loss | $(339) | $107 | (417)% | | Adjusted Net Income | $33 | $29 | 14% | | Adjusted EBITDA | $87 | $81 | 8% | | Diluted EPS (GAAP) | $(6.06) | $1.81 | (435)% | | Adjusted Diluted EPS | $0.59 | $0.48 | 23% | - The company recognized **$367 million** in non-cash intangible asset impairment within its land business, with **$359 million** related to goodwill and **$8 million** to other intangible assets[4](index=4&type=chunk) - The marine business recorded **$32 million** in asset impairment related to an underperforming physical inventory location[4](index=4&type=chunk) - The completed sale of the UK land fuels business resulted in an **$82 million** pre-tax loss in Q2, including **$55 million** in cumulative currency translation losses[4](index=4&type=chunk) - A global finance and accounting operations optimization project, part of the company's transformation plan, led to **$6 million** in restructuring charges recognized in Q2[4](index=4&type=chunk) Segment Gross Profit Performance | Business Segment | Q2 2025 Gross Profit (Million USD) | Q2 2024 Gross Profit (Million USD) | YoY Change | Primary Reason | | :--- | :--- | :--- | :--- | :--- | | Aviation | $138.0 | $127.7 | +8% | Increased contributions from European airport operations and commercial and general aviation activities | | Land | $67.0 | $80.8 | -17% | Sale of UK land business, exit from certain North American land businesses, and reduced North American liquid fuel demand | | Marine | $27.0 | $36.7 | -26% | Unfavorable transaction tax settlements and underperforming physical inventory locations | [Management Commentary](index=2&type=section&id=Management%20Commentary) CEO Michael J. Kasbar highlighted strong aviation performance and land business reshaping, with CFO Ira M. Birns emphasizing efficient operations and shareholder value - CEO Michael J. Kasbar stated that the aviation business performed strongly in Q2, while the land business is being reshaped to focus on more resilient, predictable, and higher-return core activities[5](index=5&type=chunk) - CFO Ira M. Birns noted that recent divestitures and transformation initiatives demonstrate the company's commitment to building a more focused and efficient operating model[5](index=5&type=chunk) - The company enhanced shareholder value by increasing the quarterly dividend by **18%** and repurchasing **$35 million** of common stock, reflecting confidence in the business and its cash flow generation capabilities[5](index=5&type=chunk) [Company Information](index=2&type=section&id=Company%20Information) [About World Kinect Corporation](index=2&type=section&id=About%20World%20Kinect%20Corporation) World Kinect Corporation is a global energy management company providing fuel and related services across aviation, marine, and land, plus natural gas, electricity, and sustainability solutions - World Kinect Corporation is a global energy management company, headquartered in Miami, Florida[7](index=7&type=chunk) - The company provides fuel and related services to customers in the aviation, marine, and land transportation sectors[7](index=7&type=chunk) - Its operations also include supplying natural gas and electricity in the U.S. and Europe, and offering a wide range of sustainability-related products and services[7](index=7&type=chunk) [Investor Relations](index=2&type=section&id=Investor%20Relations) An investor conference call on July 31, 2025, will discuss Q2 results, with a webcast replay available, and investor relations contactable via email - An investor conference call will be held on July 31, 2025, at 5:00 PM ET to discuss Q2 results[6](index=6&type=chunk) - A webcast replay will be available shortly after the call[6](index=6&type=chunk) - Investors can contact investor relations at investor@worldkinect.com[8](index=8&type=chunk) [Consolidated Financial Statements](index=7&type=section&id=Consolidated%20Financial%20Statements) [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets decreased to **$6.054 billion**, liabilities to **$4.449 billion**, and equity to **$1.605 billion**, reflecting significant goodwill impairment Condensed Consolidated Balance Sheets | Metric | June 30, 2025 (Million USD) | Dec 31, 2024 (Million USD) | | :--- | :--- | :--- | | **Assets:** | | | | Cash and Cash Equivalents | 403.2 | 382.9 | | Accounts Receivable, Net | 2,143.3 | 2,432.6 | | Inventory | 474.9 | 513.5 | | Total Current Assets | 3,570.9 | 3,959.2 | | Goodwill | 825.8 | 1,181.7 | | Total Assets | 6,054.0 | 6,731.8 | | **Liabilities:** | | | | Accounts Payable | 2,536.4 | 2,726.5 | | Total Current Liabilities | 3,149.0 | 3,437.8 | | Long-Term Debt | 775.2 | 796.8 | | Total Liabilities | 4,449.2 | 4,775.8 | | **Equity:** | | | | Total World Kinect Stockholders' Equity | 1,598.6 | 1,948.7 | | Total Equity | 1,604.8 | 1,955.9 | - As of June 30, 2025, goodwill net decreased to **$825.8 million** from **$1,181.7 million** on December 31, 2024, primarily reflecting this quarter's impairment[19](index=19&type=chunk) [Condensed Consolidated Statements of Income and Comprehensive Income](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20and%20Comprehensive%20Income) Q2 2025 revenue declined **18%** to **$9.043 billion**, gross profit fell **5%** to **$232.4 million**, and operating expenses surged **189%** to **$577.5 million** due to impairments, resulting in a **$339.1 million** net loss Condensed Consolidated Statements of Income and Comprehensive Income | Metric | Q2 2025 (Million USD) | Q2 2024 (Million USD) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 9,043.3 | 10,965.2 | (18)% | | Cost of Sales | 8,810.9 | 10,720.0 | (18)% | | Gross Profit | 232.4 | 245.2 | (5)% | | Operating Expenses | 577.5 | 200.0 | 189% | | Income (Loss) from Operations | (345.1) | 45.2 | (864)% | | Net Income (Loss) Including Non-Controlling Interests | (339.1) | 106.9 | (417)% | | Net Income (Loss) Attributable to World Kinect | (339.4) | 108.3 | (413)% | | Diluted EPS (GAAP) | (6.06) | 1.81 | (435)% | - Goodwill and other asset impairment charges in Q2 2025 surged to **$398.6 million** from **$2.4 million** in the prior year, significantly contributing to the increase in operating expenses[21](index=21&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Q2 2025 net cash from operating activities was **$28.3 million**, investing activities provided **$1 million** (down due to lower business sale proceeds), and financing used **$98.6 million** for debt and stock repurchases Condensed Consolidated Statements of Cash Flows | Cash Flow Type | Q2 2025 (Million USD) | Q2 2024 (Million USD) | YoY Change | | :--- | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | 28.3 | 67.9 | (58)% | | Net Cash Provided by Investing Activities | 1.0 | 180.7 | (99)% | | Net Cash Used in Financing Activities | (98.6) | (50.5) | (95)% | | Net Increase (Decrease) in Cash and Cash Equivalents | (53.2) | 203.2 | (126)% | | Cash and Cash Equivalents at End of Period | 403.2 | 524.6 | (23)% | - Net proceeds from the sale of businesses decreased from **$200.4 million** in Q2 2024 to **$23.4 million** in Q2 2025, leading to a significant reduction in investing cash flow[23](index=23&type=chunk) - The company repurchased **$35 million** of common stock and paid **$9.6 million** in common stock dividends during Q2[23](index=23&type=chunk) [Business Segment Performance](index=11&type=section&id=Business%20Segment%20Performance) [Segment Revenue](index=11&type=section&id=Segment%20Revenue) All business segments (Aviation, Land, Marine) experienced year-over-year revenue declines in Q2 2025, with total revenue decreasing by **18%** Segment Revenue | Business Segment | Q2 2025 Revenue (Million USD) | Q2 2024 Revenue (Million USD) | YoY Change | | :--- | :--- | :--- | :--- | | Aviation | 4,725.1 | 5,368.7 | (12)% | | Land | 2,425.0 | 3,292.4 | (26)% | | Marine | 1,893.2 | 2,304.1 | (18)% | | Total Revenue | 9,043.3 | 10,965.2 | (18)% | [Segment Gross Profit](index=11&type=section&id=Segment%20Gross%20Profit) In Q2 2025, Aviation gross profit increased **8%** to **$138 million**, while Land and Marine segments saw declines of **17%** and **26%** respectively Segment Gross Profit | Business Segment | Q2 2025 Gross Profit (Million USD) | Q2 2024 Gross Profit (Million USD) | YoY Change | | :--- | :--- | :--- | :--- | | Aviation | 138.0 | 127.7 | 8% | | Land | 67.4 | 80.8 | (17)% | | Marine | 27.0 | 36.7 | (26)% | | Total Gross Profit | 232.4 | 245.2 | (5)% | [Segment Income (Loss) from Operations](index=11&type=section&id=Segment%20Income%20(Loss)%20from%20Operations) Q2 2025 Aviation operating income grew to **$71.7 million**, but Land reported a **$366.9 million** operating loss due to impairment, and Marine recorded a **$25.6 million** operating loss Segment Income (Loss) from Operations | Business Segment | Q2 2025 Income (Loss) from Operations (Million USD) | Q2 2024 Income (Loss) from Operations (Million USD) | YoY Change | | :--- | :--- | :--- | :--- | | Aviation | 71.7 | 68.0 | 5% | | Land | (366.9) | (4.2) | (8636)% | | Marine | (25.6) | 10.4 | (346)% | | Corporate Management Expenses - Unallocated | (24.2) | (29.0) | 17% | | Total Income (Loss) from Operations | (345.1) | 45.2 | (864)% | - The land segment's operating loss was primarily impacted by the **$367 million** intangible asset impairment recognized this quarter[4](index=4&type=chunk)[25](index=25&type=chunk) [Sales Volume by Segment](index=11&type=section&id=Sales%20Volume%20by%20Segment) Aviation sales volume slightly increased in Q2 2025, while Land and Marine volumes decreased, leading to a **3%** decline in consolidated total sales volume Sales Volume by Segment | Business Segment | Q2 2025 Sales Volume (Million Gallons) | Q2 2024 Sales Volume (Million Gallons) | YoY Change | | :--- | :--- | :--- | :--- | | Aviation | 1,856.0 | 1,825.0 | 2% | | Land | 1,343.3 | 1,449.2 | (7)% | | Marine | 1,020.7 | 1,098.4 | (7)% | | Consolidated Total | 4,219.9 | 4,372.6 | (3)% | [Non-GAAP Financial Measures](index=3&type=section&id=Non-GAAP%20Financial%20Measures) [Definitions of Non-GAAP Measures](index=3&type=section&id=Definitions%20of%20Non-GAAP%20Measures) Non-GAAP financial measures supplement GAAP results, aiding investors in assessing ongoing financial performance by excluding specific non-recurring or non-operating items - Non-GAAP financial measures aim to supplement GAAP information, providing a more transparent assessment of ongoing financial performance[8](index=8&type=chunk) - Common exclusions from non-GAAP measures include: acquisition and divestiture-related expenses, restructuring costs, impairments, gains or losses on sale of businesses, integration costs, non-operating legal settlements, and Finland bid error-related costs[10](index=10&type=chunk) - Adjusted Net Income, Adjusted Diluted EPS, Adjusted EBITDA, Adjusted Income from Operations, Adjusted Operating Margin, Adjusted Operating Expenses, Consolidated and Land Adjusted Gross Profit, and Free Cash Flow are the primary non-GAAP measures used by the company[12](index=12&type=chunk)[15](index=15&type=chunk) [Reconciliation of GAAP to Adjusted Net Income and EPS](index=12&type=section&id=Reconciliation%20of%20GAAP%20to%20Adjusted%20Net%20Income%20and%20EPS) Q2 2025 GAAP net loss was **$339.4 million** and diluted EPS **$(6.06)**; after adjustments for divestitures, impairments, and restructuring, adjusted net income was **$33.3 million** and adjusted diluted EPS **$0.59** Reconciliation of GAAP to Adjusted Net Income and EPS | Metric | Q2 2025 (Million USD) | Q2 2024 (Million USD) | | :--- | :--- | :--- | | GAAP Net Income (Loss) | (339.4) | 108.3 | | Gain (Loss) on Sale of Businesses Impact | 81.9 | (96.0) | | Goodwill and Other Asset Impairment | 398.6 | 2.4 | | Restructuring Charges | 6.0 | 5.6 | | Income Tax Impact | (113.9) | 8.0 | | Adjusted Net Income | 33.3 | 28.7 | | GAAP Diluted EPS | (6.06) | 1.81 | | Adjusted Diluted EPS | 0.59 | 0.48 | - In Q2 2025, GAAP diluted EPS was negative, so the impact of dilutive shares was considered when calculating adjusted diluted EPS, resulting in an adjusted weighted-average share count of **56.3 million** shares[30](index=30&type=chunk) [Reconciliation of GAAP to Adjusted EBITDA](index=12&type=section&id=Reconciliation%20of%20GAAP%20to%20Adjusted%20EBITDA) Q2 2025 GAAP net loss was **$339.1 million**, resulting in negative EBITDA of **$399.2 million**; adjusted EBITDA, after non-recurring items, increased **8%** to **$87.3 million** Reconciliation of GAAP to Adjusted EBITDA | Metric | Q2 2025 (Million USD) | Q2 2024 (Million USD) | | :--- | :--- | :--- | | Net Income (Loss) Including Non-Controlling Interests | (339.1) | 106.9 | | Interest Expense and Other Financing Costs, Net | 25.7 | 27.5 | | Provision (Benefit) for Income Taxes | (109.6) | 9.7 | | Depreciation and Amortization | 23.8 | 24.4 | | EBITDA | (399.2) | 168.5 | | Gain (Loss) on Sale of Businesses | 81.9 | (96.0) | | Goodwill and Other Asset Impairment | 398.6 | 2.4 | | Restructuring Charges | 6.0 | 5.6 | | Adjusted EBITDA | 87.3 | 80.9 | [Reconciliation of GAAP to Adjusted Operating Expenses and Income](index=12&type=section&id=Reconciliation%20of%20GAAP%20to%20Adjusted%20Operating%20Expenses%20and%20Income) Q2 2025 GAAP operating expenses were **$577.5 million**, leading to an operating loss of **$345.1 million**; adjusted operating expenses were **$172.8 million**, yielding adjusted operating income of **$59.6 million**, up **11%** Reconciliation of GAAP to Adjusted Operating Expenses and Income | Metric | Q2 2025 (Million USD) | Q2 2024 (Million USD) | | :--- | :--- | :--- | | GAAP Operating Expenses | 577.5 | 200.0 | | Goodwill and Other Asset Impairment | (398.6) | (2.4) | | Restructuring Charges | (6.0) | (5.6) | | Adjusted Operating Expenses | 172.8 | 191.6 | | GAAP Income (Loss) from Operations | (345.1) | 45.2 | | Goodwill and Other Asset Impairment | 398.6 | 2.4 | | Restructuring Charges | 6.0 | 5.6 | | Adjusted Income from Operations | 59.6 | 53.6 | [Reconciliation of GAAP to Free Cash Flow](index=13&type=section&id=Reconciliation%20of%20GAAP%20to%20Free%20Cash%20Flow) Q2 2025 net cash from operating activities was **$28.3 million**; after **$15 million** in capital expenditures, free cash flow was **$13.3 million**, a significant decrease from prior year Reconciliation of GAAP to Free Cash Flow | Metric | Q2 2025 (Million USD) | Q2 2024 (Million USD) | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | 28.3 | 67.9 | | Capital Expenditures | (15.0) | (14.6) | | Free Cash Flow | 13.3 | 53.3 | [Forward-Looking Statements and Risk Factors](index=5&type=section&id=Forward-Looking%20Statements%20and%20Risk%20Factors) [Information Relating to Forward-Looking Statements](index=5&type=section&id=Information%20Relating%20to%20Forward-Looking%20Statements) This press release contains forward-looking statements about future performance and operations, subject to risks disclosed in SEC filings, where actual results may differ materially from expectations - This press release contains forward-looking statements regarding the company's future performance, financial and accounting operations optimization efforts, and cash flow generation[14](index=14&type=chunk) - Forward-looking statements are subject to cautionary statements and risk factors contained in the company's SEC filings, including its most recent Annual Report on Form 10-K[14](index=14&type=chunk) - Actual results may differ materially from future results, performance, or achievements expressed or implied by forward-looking statements[14](index=14&type=chunk) [Risk Factors](index=5&type=section&id=Risk%20Factors) Significant factors that could cause actual results to differ from forward-looking statements include tariffs, credit risks, market price changes, industry conditions, financial hedging, restructuring benefits, and regulatory changes - Tariffs and other trade restrictions may lead to continued uncertainty and volatility in global financial and commodity markets, impacting fuel product demand[14](index=14&type=chunk) - Customer and counterparty credit risk, along with the company's ability to collect receivables and settle derivative contracts, are significant risks[14](index=14&type=chunk) - Changes in energy or commodity market prices, prolonged periods of extremely high or low fuel prices, and adverse conditions in customer industries can all affect company performance[14](index=14&type=chunk) - Other risks include: failure to effectively mitigate certain financial risks, inability to realize anticipated benefits from restructuring activities and cost reduction initiatives, labor disputes, non-compliance with debt covenants, cybersecurity incidents, changes in political, economic, or regulatory environments, greenhouse gas emission reduction programs, changes in supplier credit terms, non-performance by suppliers and customers, ability to integrate acquisitions, failure to meet financial forecasts, lower-than-expected cash flow and revenue, currency exchange rate fluctuations, inflationary pressures, utilization of technology and operating systems, product specification compliance, environmental risks, reputational damage, operations in high-risk regions, uninsured losses, seasonality, value of cash equivalents and investments, talent retention, changes in tax laws, deferred income tax assets, international conventions, and litigation and regulatory investigations[14](index=14&type=chunk)[16](index=16&type=chunk)

Core Viewpoint - World Kinect (WKC) is anticipated to report flat earnings of $0.48 per share for the quarter ended June 2025, with revenues expected to decline by 10.7% to $9.8 billion compared to the previous year [1][3]. Earnings Expectations - The earnings report could lead to a stock price increase if the actual results exceed expectations, while a miss could result in a decline [2]. - The consensus EPS estimate has been revised down by 9.93% over the last 30 days, indicating a bearish sentiment among analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that the Most Accurate Estimate for World Kinect is lower than the consensus estimate, resulting in an Earnings ESP of -4.83% [12]. - The stock currently holds a Zacks Rank of 5, suggesting a strong sell, which complicates the prediction of an earnings beat [12]. Historical Performance - In the last reported quarter, World Kinect had an earnings surprise of +6.67%, reporting $0.48 per share against an expectation of $0.45 [13]. - Over the past four quarters, the company has beaten consensus EPS estimates twice [14]. Conclusion - World Kinect does not appear to be a strong candidate for an earnings beat based on current estimates and rankings, but other factors should also be considered when evaluating the stock ahead of its earnings release [17].

[PART I. Financial Information](index=3&type=section&id=PART%20I.%20Financial%20Information) This section presents the unaudited financial statements, management's analysis of operations, market risk disclosures, and internal controls for the period [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The unaudited condensed consolidated financial statements for World Kinect Corporation for the three months ended March 31, 2025, show a shift from net income to a net loss compared to the prior year, driven by decreased revenue, lower gross profit, and increased operating expenses from asset impairments and restructuring. Despite this, operating cash flows remained positive and slightly increased, while cash used in investing and financing activities decreased **Consolidated Financial Highlights (Q1 2025 vs. Q1 2024):** | Metric | Q1 2025 (Millions) | Q1 2024 (Millions) | Change (Millions) | Change (%) | | :-------------------------------- | :----------------- | :----------------- | :---------------- | :--------- | | Revenue | $9,452.5 | $10,951.4 | $(1,498.9) | -13.7% | | Gross Profit | $230.4 | $254.1 | $(23.7) | -9.3% | | Net Income (Loss) attributable to World Kinect | $(21.1) | $27.4 | $(48.5) | -177.0% | | Net cash provided by operating activities | $114.4 | $110.2 | $4.2 | 3.8% | - Total assets decreased to **$6,589.1 million** as of March 31, 2025, from $6,731.8 million at December 31, 2024[6](index=6&type=chunk) - Total equity decreased to **$1,928.3 million** as of March 31, 2025, from $1,955.9 million at December 31, 2024[6](index=6&type=chunk)[9](index=9&type=chunk) [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The company's balance sheet as of March 31, 2025, shows a slight decrease in total assets and liabilities compared to December 31, 2024, with cash and cash equivalents increasing while accounts receivable and accounts payable decreased **Condensed Consolidated Balance Sheet Highlights (Millions):** | Metric | March 31, 2025 | December 31, 2024 | | :-------------------------- | :------------- | :---------------- | | Cash and cash equivalents | $456.4 | $382.9 | | Accounts receivable, net | $2,245.8 | $2,432.6 | | Total current assets | $3,829.9 | $3,959.2 | | Total assets | $6,589.1 | $6,731.8 | | Accounts payable | $2,529.7 | $2,726.5 | | Total current liabilities | $3,342.3 | $3,437.8 | | Total liabilities | $4,660.9 | $4,775.8 | | Total equity | $1,928.3 | $1,955.9 | [Condensed Consolidated Statements of Income and Comprehensive Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20and%20Comprehensive%20Income) For the three months ended March 31, 2025, the company reported a net loss attributable to World Kinect of $21.1 million, a significant decline from a net income of $27.4 million in the prior-year period, primarily due to decreased revenue, lower gross profit, and increased operating expenses including asset impairments and restructuring charges **Condensed Consolidated Statements of Income and Comprehensive Income (Millions, except per share data):** | Metric | Q1 2025 | Q1 2024 | | :------------------------------------- | :------ | :------ | | Revenue | $9,452.5 | $10,951.4 | | Gross profit | $230.4 | $254.1 | | Total operating expenses | $237.0 | $190.8 | | Income (loss) from operations | $(6.6) | $63.3 | | Net income (loss) attributable to World Kinect | $(21.1) | $27.4 | | Basic earnings (loss) per common share | $(0.37) | $0.46 | | Diluted earnings (loss) per common share | $(0.37) | $0.45 | - Total operating expenses increased by **$46.2 million**, or **24%**, primarily attributable to **$44.5 million** in asset impairment charges and **$15.0 million** in restructuring charges in Q1 2025[7](index=7&type=chunk)[96](index=96&type=chunk) [Condensed Consolidated Statements of Shareholders' Equity](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity) The company's total equity decreased from $1,955.9 million at December 31, 2024, to $1,928.3 million at March 31, 2025, primarily due to a net loss, cash dividends declared, and common stock repurchases, partially offset by other comprehensive income **Changes in Shareholders' Equity (Millions):** | Item | Q1 2025 Impact | | :------------------------------------- | :------------- | | Net income (loss) | $(21.1) | | Cash dividends declared | $(9.6) | | Purchases of common stock | $(10.1) | | Other comprehensive income (loss) | $10.0 | | Balance as of December 31, 2024 | $1,955.9 | | Balance as of March 31, 2025 | $1,928.3 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the three months ended March 31, 2025, net cash provided by operating activities increased slightly to $114.4 million, while net cash used in investing activities decreased to $5.8 million, and net cash used in financing activities significantly decreased to $32.4 million, leading to a net increase in cash and cash equivalents of $73.5 million **Condensed Consolidated Statements of Cash Flows (Millions):** | Cash Flow Activity | Q1 2025 | Q1 2024 | | :----------------------------------- | :------ | :------ | | Net cash provided by operating activities | $114.4 | $110.2 | | Net cash provided by (used in) investing activities | $(5.8) | $(16.9) | | Net cash provided by (used in) financing activities | $(32.4) | $(64.3) | | Net increase (decrease) in cash and cash equivalents | $73.5 | $17.1 | | Cash and cash equivalents, end of period | $456.4 | $321.3 | - The increase in operating cash flows was principally due to increased cash provided by RPA activity and transaction tax refunds, offset by cash used in derivative activities and a decrease in net income[121](index=121&type=chunk) - The decrease in net cash used in investing activities was primarily driven by lower capital expenditures and cash received from the net repayment of notes receivable[122](index=122&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed disclosures on the company's accounting policies, financial instruments, debt, equity, and segment information, highlighting recent divestitures, restructuring efforts, and ongoing legal and tax contingencies [Note 1. Basis of Presentation, New Accounting Standards, and Significant Accounting Policies](index=7&type=section&id=Note%201.%20Basis%20of%20Presentation,%20New%20Accounting%20Standards,%20and%20Significant%20Accounting%20Policies) World Kinect Corporation is a global energy management company. The financial statements are unaudited, prepared under U.S. GAAP, and do not include all disclosures required for complete annual statements. The company is evaluating new accounting standards for income taxes (ASU 2023-09) and expense disaggregation (ASU 2024-03), which are effective in future fiscal years. No significant changes to accounting policies were reported - World Kinect Corporation is a global energy management company offering fulfillment and related services across the aviation, marine, and land-based transportation sectors, also supplying natural gas and power and sustainability-related products[11](index=11&type=chunk) - The company is evaluating ASU 2023-09 (Income Taxes) and ASU 2024-03 (Expense Disaggregation Disclosures), which are effective for fiscal years beginning after **December 15, 2024**, and **December 15, 2026**, respectively[15](index=15&type=chunk)[16](index=16&type=chunk) - No significant changes in the company's accounting policies from those disclosed in its 2024 10-K Report[20](index=20&type=chunk) [Note 2. Accounts Receivable](index=8&type=section&id=Note%202.%20Accounts%20Receivable) The company's net accounts receivable decreased to $2.2 billion as of March 31, 2025, from $2.4 billion at December 31, 2024. The allowance for expected credit losses increased slightly to $24.4 million. The company utilizes Receivable Purchase Agreements (RPAs) to sell qualifying accounts receivable, selling $2.8 billion in Q1 2025, down from $3.0 billion in Q1 2024 **Accounts Receivable and Allowance for Credit Losses (Millions):** | Metric | March 31, 2025 | December 31, 2024 | | :-------------------------------- | :------------- | :---------------- | | Accounts receivable, net | $2,245.8 | $2,432.6 | | Allowance for expected credit losses | $24.4 | $23.7 | - **95%** of accounts receivable were outstanding less than 60 days as of March 31, 2025[23](index=23&type=chunk) **Receivable Purchase Agreements (RPAs) Activity (Millions):** | Metric | Q1 2025 | Q1 2024 | | :-------------------------------- | :------ | :------ | | Aggregate face value of receivables sold | $2,800.0 | $3,000.0 | | Fees recognized | $8.1 | $10.2 | [Note 3. Acquisitions and Divestitures](index=9&type=section&id=Note%203.%20Acquisitions%20and%20Divestitures) The company completed the sale of its U.K. land fuels business (Watson Fuels) on April 9, 2025, for estimated proceeds of $42.8 million, recognizing a $44.5 million asset impairment charge in Q1 2025. This follows the May 2024 sale of the Avinode Group, which resulted in a $96.0 million pre-tax gain - Sale of WFL (UK) Ltd. (Watson Fuels disposal group) closed on **April 9, 2025**, for total estimated proceeds of **$42.8 million**, with **$23.6 million** collected in cash at closing[27](index=27&type=chunk) - An asset impairment charge of **$44.5 million** was recognized in Q1 2025 with respect to the Watson Fuels disposal group assets[27](index=27&type=chunk)[49](index=49&type=chunk) - The sale of Avinode Group and aviation FBO software products was completed on **May 1, 2024**, for cash proceeds of **$200.1 million**, resulting in a pre-tax gain of **$96.0 million**[28](index=28&type=chunk) [Note 4. Derivative Instruments](index=9&type=section&id=Note%204.%20Derivative%20Instruments) World Kinect uses various derivative instruments, including fair value hedges, cash flow hedges, and non-designated derivatives, to manage exposure to commodity price, foreign currency, and interest rate risks. As of March 31, 2025, the company held gross derivative assets of $518.9 million and gross derivative liabilities of $436.1 million. Non-designated commodity contracts generated a net gain of $5.5 million in Q1 2025, a significant improvement from a $72.0 million loss in Q1 2024 - The company's risk management program includes Fair Value Hedges, Cash Flow Hedges, and Non-designated Derivatives to mitigate commodity price, foreign currency exchange rate, and interest rate risks[29](index=29&type=chunk)[30](index=30&type=chunk) **Gross Fair Value of Derivative Instruments (Millions):** | Metric | March 31, 2025 | December 31, 2024 | | :--------------------------------- | :------------- | :---------------- | | Total Gross Derivative Assets | $518.9 | $499.6 | | Total Gross Derivative Liabilities | $436.1 | $401.6 | **Realized and Unrealized Gains (Losses) on Non-designated Derivatives (Millions):** | Derivative Type | Q1 2025 | Q1 2024 | | :---------------------- | :------ | :------ | | Commodity contracts (net) | $5.5 | $(72.0) | | Foreign currency contracts (net) | $(5.2) | $(2.6) | [Note 5. Fair Value Measurements](index=13&type=section&id=Note%205.%20Fair%20Value%20Measurements) The company measures certain assets and liabilities at fair value on a recurring basis, primarily commodity and foreign currency contracts, using Level 1 and Level 2 inputs. As of March 31, 2025, total assets at fair value were $538.7 million and total liabilities at fair value were $436.1 million. A nonrecurring asset impairment charge of $44.5 million was recognized in Q1 2025 for the Watson Fuels asset group, measured using Level 2 inputs **Recurring Fair Value Measurements (March 31, 2025, Millions):** | Category | Level 1 Inputs | Level 2 Inputs | Level 3 Inputs | Total | | :-------------------------- | :------------- | :------------- | :------------- | :---- | | Assets: Commodities contracts | $160.3 | $337.8 | $7.3 | $505.4 | | Assets: Foreign currency contracts | — | $13.5 | — | $13.5 | | Liabilities: Commodities contracts | $195.4 | $215.4 | $4.1 | $414.9 | | Liabilities: Foreign currency contracts | — | $21.2 | — | $21.2 | - A nonrecurring asset impairment charge of **$44.5 million** was recognized in Q1 2025 for the Watson Fuels asset group within the land segment, with its fair value determined based on estimated sale proceeds (Level 2 measurement)[49](index=49&type=chunk) [Note 6. Supplier Financing Programs](index=15&type=section&id=Note%206.%20Supplier%20Financing%20Programs) The company participates in supplier finance programs, with outstanding obligations of $129.1 million as of March 31, 2025, a decrease from $168.8 million at December 31, 2024. These obligations are included in Accounts payable **Outstanding Obligations under Supplier Finance Programs (Millions):** | Date | Amount | | :---------------- | :----- | | March 31, 2025 | $129.1 | | December 31, 2024 | $168.8 | [Note 7. Debt, Interest Income, Expense, and Other Finance Costs](index=15&type=section&id=Note%207.%20Debt,%20Interest%20Income,%20Expense,%20and%20Other%20Finance%20Costs) Total debt slightly decreased to $879.0 million as of March 31, 2025. The company's debt primarily consists of a term loan ($449.1 million) and Convertible Senior Notes due 2028 ($341.5 million net carrying amount). Net interest expense decreased to $22.9 million in Q1 2025 from $28.9 million in Q1 2024 **Outstanding Debt (Millions):** | Debt Type | March 31, 2025 | December 31, 2024 | | :-------------------------- | :------------- | :---------------- | | Term loan | $449.1 | $455.3 | | Convertible Notes (net) | $341.5 | $340.9 | | Total debt | $879.0 | $880.8 | | Long-term debt | $792.3 | $796.8 | - The fair value of the Convertible Notes was approximately **$403.3 million** as of March 31, 2025[52](index=52&type=chunk) **Interest Income, Expense, and Other Financing Costs, net (Millions):** | Metric | Q1 2025 | Q1 2024 | | :------------------------------------- | :------ | :------ | | Interest income | $3.7 | $2.0 | | Interest expense and other financing costs | $(26.6) | $(30.9) | | Interest expense and other financing costs, net | $(22.9) | $(28.9) | [Note 8. Commitments and Contingencies](index=16&type=section&id=Note%208.%20Commitments%20and%20Contingencies) The company is involved in various legal and tax proceedings, including an investigation by the Finnish energy regulatory authority regarding an erroneous bid submission in 2023, and significant tax assessments in South Korea totaling approximately $23.3 million. While reserves for general claims are not material, an unfavorable resolution of these matters could have a material adverse effect on financial statements - An investigation by the Finnish energy regulatory authority was initiated in **December 2023** regarding an erroneous bid submission in the Finnish power market, which led to **$48.8 million** in extraordinary losses in Q4 2023[54](index=54&type=chunk) - The South Korean branch of a subsidiary received tax assessments totaling approximately **$23.3 million** (KRW 34.3 billion) for allegedly failing to issue VAT invoices and report certain transactions during 2011-2014[56](index=56&type=chunk) - As of March 31, 2025, reserves for claims and other matters where losses are probable and estimable were not material[57](index=57&type=chunk) [Note 9. Shareholders' Equity](index=17&type=section&id=Note%209.%20Shareholders'%20Equity) The Board declared quarterly cash dividends of $0.17 per common share for both Q1 2025 ($9.6 million) and Q1 2024 ($10.1 million). Accumulated other comprehensive income (loss) improved from $(91.0) million at January 1, 2025, to $(81.0) million at March 31, 2025, primarily due to positive foreign currency translation adjustments **Cash Dividends Declared (Millions):** | Period | Per Common Share | Total | | :-------------------------- | :--------------- | :---- | | Q1 2025 | $0.17 | $9.6 | | Q1 2024 | $0.17 | $10.1 | **Accumulated Other Comprehensive Income (Loss) (Millions):** | Metric | January 1, 2025 | March 31, 2025 | | :------------------------------------- | :-------------- | :------------- | | Balance | $(91.0) | $(81.0) | | Other comprehensive income (loss) before reclassifications | — | $11.7 | | Foreign currency translation adjustments | — | $12.6 | [Note 10. Revenue from Contracts with Customers](index=18&type=section&id=Note%2010.%20Revenue%20from%20Contracts%20with%20Customers) Total revenue for Q1 2025 was $9,452.5 million, a decrease from $10,951.4 million in Q1 2024. This decline was observed across all major geographic areas (Asia Pacific, EMEA, LATAM, North America) and segments (Aviation, Land, Marine) **Revenue from Contracts with Customers (Millions):** | Geographic Area | Q1 2025 | Q1 2024 | | :---------------- | :------ | :------ | | Asia Pacific | $1,149.6 | $1,445.1 | | EMEA | $1,999.0 | $2,358.5 | | LATAM | $1,287.2 | $1,604.2 | | North America | $4,992.3 | $5,620.2 | | Total revenue | $9,452.5 | $10,951.4 | **Revenue by Segment (Millions):** | Segment | Q1 2025 | Q1 2024 | | :-------- | :------ | :------ | | Aviation | $4,654.2 | $5,144.2 | | Land | $2,865.4 | $3,416.6 | | Marine | $1,932.9 | $2,390.5 | [Note 11. Income Taxes](index=19&type=section&id=Note%2011.%20Income%20Taxes) For Q1 2025, the company recognized an income tax benefit of $6.8 million, a significant change from an income tax expense of $3.3 million in Q1 2024. The effective income tax rate for Q1 2025 was 24.3%, up from 11.0% in Q1 2024, influenced by a reduction in income before taxes and changes in the mix of worldwide earnings, partially offset by increased net discrete tax expenses. The company is also facing a material tax audit in Denmark with proposed assessments of approximately $138.0 million **Income Tax Provision and Effective Rate (Millions, except rates):** | Metric | Q1 2025 | Q1 2024 | | :-------------------------- | :------ | :------ | | Provision for income taxes | $(6.8) | $3.3 | | Effective income tax rate | 24.3% | 11.0% | - The Q1 2025 provision includes a net discrete income tax expense of **$0.5 million**, primarily a **$2.6 million** valuation allowance against deferred tax assets of a foreign subsidiary[64](index=64&type=chunk) - A tax audit in Denmark has proposed tax assessments for 2015-2021 of approximately **$138.0 million** (DKK 951.5 million), excluding interest, which could be material[67](index=67&type=chunk) [Note 12. Business Segments](index=19&type=section&id=Note%2012.%20Business%20Segments) The company operates in three segments: aviation, land, and marine. For Q1 2025, the aviation segment reported an operating income of $56.2 million, while the land segment incurred an operating loss of $45.3 million, and the marine segment reported an operating income of $14.8 million. Overall, consolidated income from operations was $25.7 million before unallocated corporate expenses **Segment Operating Income (Loss) (Millions):** | Segment | Q1 2025 | Q1 2024 | | :-------- | :------ | :------ | | Aviation | $56.2 | $44.0 | | Land | $(45.3) | $18.5 | | Marine | $14.8 | $26.8 | | Total Operating Income - segment profit (loss) | $25.7 | $89.2 | **Segment Revenue (Millions):** | Segment | Q1 2025 | Q1 2024 | | :-------- | :------ | :------ | | Aviation | $4,654.2 | $5,144.2 | | Land | $2,865.4 | $3,416.6 | | Marine | $1,932.9 | $2,390.5 | **Total Assets by Reportable Segment (Millions):** | Segment | March 31, 2025 | December 31, 2024 | | :-------------------------- | :------------- | :---------------- | | Aviation segment | $2,466.6 | $2,548.2 | | Land segment | $2,989.1 | $2,970.6 | | Marine segment | $833.5 | $929.6 | | Total reportable segment assets | $6,289.2 | $6,448.5 | [Note 13. Earnings Per Common Share](index=22&type=section&id=Note%2013.%20Earnings%20Per%20Common%20Share) For Q1 2025, the company reported a basic and diluted loss per common share of $(0.37), a significant decrease from basic EPS of $0.46 and diluted EPS of $0.45 in Q1 2024, primarily due to the net loss attributable to World Kinect **Earnings Per Common Share (per share amounts):** | Metric | Q1 2025 | Q1 2024 | | :------------------------------------- | :------ | :------ | | Basic earnings (loss) per common share | $(0.37) | $0.46 | | Diluted earnings (loss) per common share | $(0.37) | $0.45 | - The net loss attributable to World Kinect was **$(21.1) million** in Q1 2025, compared to net income of $27.4 million in Q1 2024[72](index=72&type=chunk) [Note 14. Restructuring and Exit Activities](index=22&type=section&id=Note%2014.%20Restructuring%20and%20Exit%20Activities) In Q1 2025, the company initiated a company-wide transformation, recognizing $15.0 million in restructuring charges, primarily severance costs, with an expectation of approximately $30 million in annualized compensation-related savings. This follows 2024 actions to exit certain operations, including the sale of the U.K. land fuels business - Restructuring charges of **$15.0 million** were recognized during Q1 2025, composed principally of severance costs, with an expectation of approximately **$30 million** in annualized compensation-related savings[73](index=73&type=chunk)[84](index=84&type=chunk) **Accrued Restructuring and Exit Activity Charges (Millions):** | Segment | Accrued charges as of Dec 31, 2024 | Restructuring and exit activity charges (Q1 2025) | Paid during the period (Q1 2025) | Accrued charges as of Mar 31, 2025 | | :---------- | :--------------------------------- | :------------------------------------------ | :------------------------------- | :--------------------------------- | | Aviation | — | $2.2 | $(0.5) | $1.6 | | Land | $1.7 | $7.3 | $(3.3) | $5.7 | | Marine | — | $0.4 | $(0.2) | $0.3 | | Corporate | $0.3 | $5.2 | $(1.0) | $4.5 | | Consolidated | $2.0 | $15.0 | $(4.9) | $12.1 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion highlights World Kinect's global energy management business, ongoing restructuring and divestiture efforts (including the Watson Fuels sale), and segment-specific performance. The company experienced a consolidated revenue decline and operating loss in Q1 2025, attributed to lower fuel prices, reduced demand, and significant asset impairment and restructuring charges. Liquidity remains sufficient, supported by cash, credit facilities, and operating cash flows - World Kinect Corporation is a global energy management company primarily engaged in the distribution of fuel and related products and services in the aviation, land, and marine transportation industries[82](index=82&type=chunk) - The company initiated a company-wide transformation in Q1 2025, resulting in **$15.0 million** in restructuring charges and expected annualized compensation-related savings of approximately **$30 million**[84](index=84&type=chunk) - Consolidated revenue for Q1 2025 decreased by **14%** to **$9.5 billion**, and gross profit decreased by **9%** to **$230.4 million**, leading to an operating loss of **$6.6 million**[94](index=94&type=chunk)[95](index=95&type=chunk) - The company believes its cash and cash equivalents, available funds from its Credit Facility, and cash flows from operations are sufficient to fund working capital and capital expenditure requirements for at least the next twelve months[112](index=112&type=chunk) [Business Overview](index=25&type=section&id=Business%20Overview) World Kinect Corporation is a global energy management company focused on fuel distribution and related services across aviation, land, and marine transportation, also supplying natural gas and power and sustainability-related products - The company is a global energy management company offering fulfillment and related services across the aviation, marine, and land-based transportation sectors, and supplies natural gas and power in the United States and Europe[82](index=82&type=chunk) [Restructuring and Exit Activities](index=25&type=section&id=Restructuring%20and%20Exit%20Activities) The company is undergoing a company-wide transformation, initiating cost management actions in Q1 2025, resulting in $15.0 million in restructuring charges and expected annualized compensation savings of approximately $30 million. This follows 2024 actions to exit certain operations, including the sale of the U.K. land fuels business (Watson Fuels) for $42.8 million - In Q1 2025, the company began a company-wide transformation initiative, recognizing **$15.0 million** in restructuring charges, primarily severance costs, with an expectation of approximately **$30 million** in annualized compensation-related savings[84](index=84&type=chunk) - In 2024, the company took actions to exit certain operations, including rationalization of assets in its North American land business and disposal of operations in Brazil[83](index=83&type=chunk) - The sale of WFL (UK) Ltd. (U.K. land fuels business) closed in **April 2025** for total estimated proceeds of **$42.8 million**[83](index=83&type=chunk) [Reportable Segments](index=25&type=section&id=Reportable%20Segments) The company operates in aviation, land, and marine segments. The aviation segment has seen growth and higher returns, benefiting from working capital management and divesting Avinode Group. The land segment is focused on improving asset utilization and realigning operations, including recent divestitures. The marine segment is positioned for moderate earnings in stable markets and additional value in volatile conditions - Aviation segment has benefited from growth in fuel and related service offerings, enhanced logistics, and geographic expansion, achieving higher returns since **2023** through working capital management[86](index=86&type=chunk) - The land segment focuses on improving asset utilization and realigning its operational platform, including exiting certain operations in North America and Brazil in **2024**, and the Watson Fuels sale in **April 2025**[88](index=88&type=chunk) - The marine business traditionally benefits from elevated fuel prices and volatility, and a constrained credit environment, positioned to generate moderate earnings in stable markets and additional value in volatile markets[89](index=89&type=chunk) [Macroeconomic Environment](index=26&type=section&id=Macroeconomic%20Environment) The company faces ongoing uncertainty from U.S. trade policy, which can lead to volatility in global markets and impact demand. While inflation decelerated in 2024, a significant or prolonged period of trade uncertainty or high inflation, along with higher interest rates, could adversely affect results by increasing costs and interest expense - Significant uncertainty remains regarding the impact of U.S. trade policy on international trade and demand for global transportation services, potentially leading to volatility in financial and commodity markets[90](index=90&type=chunk) - Inflation decelerated in **2024**, but a prolonged period of trade uncertainty or high inflation, along with higher interest rates, could adversely impact the company's results of operations[90](index=90&type=chunk)[92](index=92&type=chunk) - The company mitigates the impact of increases in fuel prices through comprehensive hedging programs and financial derivative contracts[91](index=91&type=chunk) [Results of Operations](index=27&type=section&id=Results%20of%20Operations) Consolidated revenue for Q1 2025 decreased by 14% to $9.5 billion, leading to a 9% decrease in gross profit to $230.4 million and a shift from operating income to an operating loss of $6.6 million. This was primarily driven by lower average fuel prices and volumes across all segments, coupled with increased operating expenses from asset impairments and restructuring charges [Consolidated Results of Operations](index=27&type=section&id=Consolidated%20Results%20of%20Operations) Consolidated revenue for Q1 2025 decreased by 14% to $9.5 billion, and gross profit decreased by 9% to $230.4 million. The company reported an operating loss of $6.6 million, a significant decline from an operating income of $63.3 million in Q1 2024, primarily due to increased operating expenses from asset impairments and restructuring charges. Net non-operating expense decreased by $11.3 million due to lower interest expense and higher foreign currency exchange gains **Consolidated Results of Operations (Millions, except per share amounts):** | Metric | Q1 2025 | Q1 2024 | | :-------------------------------- | :------ | :------ | | Revenue | $9,452.5 | $10,951.4 | | Gross profit | $230.4 | $254.1 | | Total operating expenses | $237.0 | $190.8 | | Income (loss) from operations | $(6.6) | $63.3 | | Net income (loss) attributable to World Kinect | $(21.1) | $27.4 | | Basic earnings (loss) per common share | $(0.37) | $0.46 | - The **$1.5 billion** decrease in revenue was attributable to decreases in the land (**$551.2 million**), marine (**$457.6 million**), and aviation (**$490.0 million**) segments[94](index=94&type=chunk) - Operating expenses increased by **$46.2 million**, or **24%**, primarily due to **$44.5 million** in asset impairment charges and **$15.0 million** in restructuring charges[96](index=96&type=chunk) [Aviation Segment Results of Operations](index=28&type=section&id=Aviation%20Segment%20Results%20of%20Operations) Aviation segment revenue decreased by 10% to $4.7 billion in Q1 2025, primarily due to lower average jet fuel prices, despite a 2% increase in volumes. Gross profit increased by 7% to $115.7 million, and income from operations rose by 28% to $56.2 million, benefiting from higher profit contribution from European airport locations and physical inventory business, and lower operating expenses post-Avinode sale **Aviation Segment Results of Operations (Millions, except price per gallon):** | Metric | Q1 2025 | Q1 2024 | | :-------------------------- | :------ | :------ | | Revenue | $4,654.2 | $5,144.2 | | Gross profit | $115.7 | $108.4 | | Income (loss) from operations | $56.2 | $44.0 | | Aviation segment volumes (gallons) | 1,700.2 | 1,673.1 | | Aviation segment average price per gallon | $2.50 | $2.86 | - The increase in gross profit was primarily attributable to higher profit contribution from operated airport locations in Europe, physical inventory business, and business and general aviation activities[100](index=100&type=chunk) - Operating expenses decreased primarily due to lower compensation and general and administrative expenses associated with the Avinode sale[101](index=101&type=chunk) [Land Segment Results of Operations](index=28&type=section&id=Land%20Segment%20Results%20of%20Operations) Land segment revenue decreased by 16% to $2.9 billion in Q1 2025, driven by lower average fuel prices and a 6% decrease in volumes due to the sale of the Brazil fuel business and asset rationalization. Gross profit declined by 19% to $79.0 million, and the segment reported an operating loss of $45.3 million, a significant drop from a $18.5 million income in Q1 2024, primarily due to lower profit contribution and increased operating expenses from asset impairments and restructuring **Land Segment Results of Operations (Millions, except price per gallon):** | Metric | Q1 2025 | Q1 2024 | | :-------------------------- | :------ | :------ | | Revenue | $2,865.4 | $3,416.6 | | Gross profit | $79.0 | $97.3 | | Income (loss) from operations | $(45.3) | $18.5 | | Land segment volumes (gallons) | 1,494.3 | 1,598.1 | | Land segment average price per gallon | $1.92 | $2.14 | - The decrease in revenue was driven by lower average fuel prices (**10% decrease**) and a decrease in total volumes (**6% decrease**), primarily attributable to the sale of the Brazil fuel business and asset rationalization in North America[103](index=103&type=chunk) - Operating expenses increased due to asset impairment charges recognized in connection with the Watson Fuels sale and restructuring charges during Q1 2025[105](index=105&type=chunk) [Marine Segment Results of Operations](index=29&type=section&id=Marine%20Segment%20Results%20of%20Operations) Marine segment revenue decreased by 19% to $1.9 billion in Q1 2025, driven by lower average fuel prices and a 14% decrease in volumes due to reduced demand and market uncertainty. Gross profit declined by 26% to $35.7 million, and income from operations decreased by 45% to $14.8 million, primarily due to lower bunker fuel prices, reduced volatility, and lower margins in resale and physical businesses **Marine Segment Results of Operations (Millions, except price per metric ton):** | Metric | Q1 2025 | Q1 2024 | | :-------------------------- | :------ | :------ | | Revenue | $1,932.9 | $2,390.5 | | Gross profit | $35.7 | $48.4 | | Income (loss) from operations | $14.8 | $26.8 | | Marine segment volumes (metric tons) | 3.7 | 4.3 | | Marine segment average price per metric ton | $519.49 | $552.04 | - The decrease in gross profit was principally due to lower bunker fuel prices, reduced volatility, and lower margins in resale and physical businesses as a result of increasing market uncertainty[107](index=107&type=chunk) [Liquidity and Capital Resources](index=29&type=section&id=Liquidity%20and%20Capital%20Resources) The company believes its cash, Credit Facility, and operating cash flows are sufficient to fund working capital and capital expenditures for the next twelve months. Liquidity is influenced by customer receipts, supplier payments, and fuel prices. Key liquidity sources include $350.0 million Convertible Notes due 2028 and a $1.5 billion revolving Credit Facility, which has covenants that can impact availability - The company believes its cash and cash equivalents as of March 31, 2025, and available funds from its Credit Facility, together with cash flows generated by operations, are sufficient to fund working capital and capital expenditure requirements for at least the next twelve months[112](index=112&type=chunk) - Key liquidity sources include **$350.0 million** aggregate principal amount of 3.250% Convertible Senior Notes due 2028 and a revolving credit facility of up to **$1.5 billion** under the Fourth Amended and Restated Credit Agreement[113](index=113&type=chunk)[114](index=114&type=chunk) - Availability under the Credit Facility is limited by covenants, including a consolidated total leverage ratio of not more than **4.75 to 1**[114](index=114&type=chunk)[115](index=115&type=chunk) [Cash Flows](index=31&type=section&id=Cash%20Flows) For Q1 2025, net cash provided by operating activities increased slightly to $114.4 million, driven by RPA activity and tax refunds, offset by derivative activities. Net cash used in investing activities decreased to $5.8 million due to lower capital expenditures and notes receivable repayments. Net cash used in financing activities significantly decreased to $32.4 million, primarily due to lower deferred acquisition payments and net debt repayments, despite common stock repurchases **Major Categories of Cash Flows (Millions):** | Cash Flow Activity | Q1 2025 | Q1 2024 | | :----------------------------------- | :------ | :------ | | Net cash provided by operating activities | $114.4 | $110.2 | | Net cash provided by (used in) investing activities | $(5.8) | $(16.9) | | Net cash provided by (used in) financing activities | $(32.4) | $(64.3) | - The **$4.1 million** increase in operating cash flows was principally due to increased cash provided by RPA activity and the collection of transaction tax refunds[121](index=121&type=chunk) - Net cash used in financing activities decreased primarily due to lower payments of deferred consideration for acquisitions (**$0.4 million** in Q1 2025 vs. **$50.7 million** in Q1 2024) and net repayments under the Credit Facility[123](index=123&type=chunk) [Critical Accounting Estimates](index=31&type=section&id=Critical%20Accounting%20Estimates) The company's critical accounting estimates, including impairment assessments of goodwill, long-lived assets, and equity investments, remain unchanged from the 2024 10-K Report. The land reporting unit is considered at risk as of March 31, 2025, due to its fair value not exceeding its carrying amount by more than 10% - There have been no material changes to the Critical Accounting Estimates disclosed in the 2024 10-K Report[125](index=125&type=chunk) - The land reporting unit is considered at risk as of March 31, 2025, as its fair value does not exceed its carrying amount by more than **10%**[126](index=126&type=chunk) **Goodwill Balances by Reporting Unit (March 31, 2025, Millions):** | Reporting Unit | Goodwill Balance | | :------------- | :--------------- | | Land | $831.9 | | Aviation | $354.5 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=32&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) There have been no material changes to the company's exposures to commodity price, interest rate, or foreign currency risk since December 31, 2024 - No material changes to the company's exposures to commodity price, interest rate, or foreign currency risk since **December 31, 2024**[129](index=129&type=chunk) [Item 4. Controls and Procedures](index=32&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of March 31, 2025. There were no material changes in internal control over financial reporting during the three months ended March 31, 2025 - The CEO and CFO concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of **March 31, 2025**[132](index=132&type=chunk) - There were no changes in internal control over financial reporting that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting during the three months ended **March 31, 2025**[133](index=133&type=chunk) [PART II. Other Information](index=33&type=section&id=PART%20II.%20Other%20Information) This section details legal proceedings, equity security sales, director trading plans, and required exhibits [Item 1. Legal Proceedings](index=33&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal and tax proceedings, including ongoing tax audits in the U.S. and foreign jurisdictions (e.g., Denmark, South Korea) and claims arising in the ordinary course of business. While no current proceedings are expected to have a material adverse effect, an unfavorable resolution of any matter could be material to a specific reporting period - The company is under review by the IRS and various other domestic and foreign tax authorities regarding income tax and indirect tax matters[136](index=136&type=chunk) - The company is a party to various claims, complaints, and proceedings arising in the ordinary course of business, including environmental, commercial, governmental contract, and personal injury claims[137](index=137&type=chunk) - No current claim, complaint, or proceeding is expected to have a material adverse effect on the company's business or financial condition, but an adverse resolution could be material for a particular reporting period[139](index=139&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=33&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q1 2025, the company repurchased 351 thousand shares of common stock at an average price of $28.38 per share, totaling approximately $10.0 million. As of March 31, 2025, approximately $227.0 million remained available under the existing stock repurchase authorizations **Issuer Purchases of Equity Securities (Q1 2025):** | Metric | Value | | :-------------------------------- | :---- | | Total Number of Shares Purchased | 351 thousand | | Average Price Paid Per Share | $28.38 | | Approximate Dollar Value of Shares Purchased | $10.0 million | | Approximate Dollar Value of Shares that May Yet Be Purchased | $227.0 million | - The company has two stock repurchase programs, approved in **March 2020** and **September 2024**, authorizing a total of **$400.0 million** in common stock repurchases, with no expiration date[140](index=140&type=chunk) [Item 5. Other Information](index=34&type=section&id=Item%205.%20Other%20Information) A director, Jorge Benitez, adopted a Rule 10b5-1 trading plan on March 6, 2025, for the sale of up to 13,000 shares of common stock, expiring by March 6, 2026. No other officers or directors adopted or terminated such plans in Q1 2025 - On **March 6, 2025**, director Jorge Benitez adopted a Rule 10b5-1 trading plan for the sale of up to **13,000 shares** of common stock, expiring by **March 6, 2026**[141](index=141&type=chunk) - No other officers or directors adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the three months ended **March 31, 2025**[142](index=142&type=chunk) [Item 6. Exhibits](index=34&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of the 10-Q Report, including certifications from the CEO and CFO (Exhibits 31.1, 31.2, 32.1) and XBRL formatted financial statements (Exhibits 101, 104) - Exhibits include certifications from the Chief Executive Officer (**31.1**) and Chief Financial Officer (**31.2**) pursuant to Rule 13a-14(a) or Rule 15d-14(a), and under Section 906 of the Sarbanes-Oxley Act of 2002 (**32.1**)[143](index=143&type=chunk) - XBRL formatted financial statements (Condensed Consolidated Balance Sheets, Income, Equity, Cash Flows, and Notes) are filed as Exhibit **101**, with the cover page interactive file as Exhibit **104**[143](index=143&type=chunk) [SIGNATURES](index=35&type=section&id=SIGNATURES) This section provides the official signatures of the company's executive officers for the quarterly report [Signatures](index=35&type=section&id=Signatures) The Quarterly Report on Form 10-Q was signed on behalf of World Kinect Corporation by Michael J. Kasbar, Chairman and Chief Executive Officer, and Ira M. Birns, President and Chief Financial Officer, on April 25, 2025 - The report was signed by Michael J. Kasbar, Chairman and Chief Executive Officer, and Ira M. Birns, President and Chief Financial Officer[146](index=146&type=chunk) - The signing date for the report was **April 25, 2025**[146](index=146&type=chunk)