Economic and Market Conditions - Significant inflation in the U.S. and other jurisdictions has increased costs, potentially impacting financial results if costs rise faster than revenue[104] - The company faces intense competition from large multinational corporations and specialized firms, which may lead to a loss of market share or reduced prices[105] - The company relies on a limited number of suppliers for fuel and related products, which may affect its business if suppliers do not provide favorable terms[106] Regulatory and Compliance Risks - Climate change regulations and GHG emissions monitoring could significantly impact business operations and financial results[109] - The Inflation Reduction Act (IRA) imposes a fee on GHG emissions and provides funding for renewable energy, potentially affecting the use of petroleum-based fuels[111] - Increasing focus on ESG issues may lead to higher operational costs and compliance requirements, impacting the company's reputation and financial performance[121] - The company is subject to extensive environmental laws and regulations, which can result in significant liabilities and increased operating costs[124] - Compliance with evolving data privacy and protection laws may increase operational costs and expose the company to regulatory penalties[126] - The evolving nature of privacy laws in the U.S., E.U., and other jurisdictions may require costly changes to IT systems for data handling[127] - Non-compliance with data privacy regulations could lead to substantial fines, penalties, and adverse effects on business reputation and financial condition[128] - International operations are subject to anti-corruption laws, which may impose significant compliance costs and expose the company to civil and criminal penalties[129] - The company operates in countries with high corruption risks, increasing the likelihood of improper payments and enforcement actions[130] - Economic sanctions and international trade controls restrict business dealings with certain countries, impacting operations and compliance costs[131] - The company has established policies to comply with laws and regulations, but violations could lead to severe penalties and affect financial stability[134] Operational Risks - The company faces risks related to pandemics and infectious diseases, which could adversely impact operations and financial condition[135] Financial Instruments and Valuation - The notional and fair market values of commodity-based derivative instruments as of December 31, 2024, were $88.9 million and $122.7 million, respectively[238] - The total fair value of foreign currency exchange derivative contracts was a net asset of $6.2 million as of December 31, 2024[241] - A hypothetical 10% change in exchange rates is not expected to materially impact income from operations[239] - As of December 31, 2024, the company had a $455.3 million Term Loan with applicable margins of 0.875% for base rate loans and 1.875% for Eurodollar rate loans[242] - The aggregate outstanding balance of finance lease obligations was $29.9 million, with interest rates ranging from 2.6% to 7.2%[242] - The company entered into a $300 million Eurodollar floating-for-fixed interest rate swap, locking in a pay rate of 0.435%[243] - A fluctuation of 100 basis points in the interest rate would result in a $10.4 million change in interest expense over the next twelve months[244] - The fair value of the interest rate swap contract was $2.9 million as of December 31, 2024[244] - The fair value of outstanding Convertible Notes is influenced by the company's common stock price, which can increase or decrease their value[245] - Upon conversion of Convertible Notes, the company can settle in cash, shares, or a combination, potentially affecting market prices of its common stock[246] - The company entered into convertible note hedge transactions to reduce potential dilution upon conversion of the notes[247] - Warrant transactions related to the Convertible Notes could have a dilutive effect if the market price exceeds the strike price[247]
World Kinect(WKC) - 2024 Q4 - Annual Report