World Kinect(WKC) - 2025 Q2 - Quarterly Report

PART I. Financial Information 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) 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 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 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 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] - Cash dividends declared totaled $(20.6) million for the six months ended June 30, 2025[8] - Purchases of common stock amounted to $(45.5) million for the six months ended June 30, 2025[8] Condensed Consolidated Statements of Cash Flows 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] - Financing activities in 2025 included $58.8 million in net debt repayments and $45.0 million in common stock repurchases[12] Notes to the Condensed Consolidated Financial Statements 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 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] - 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] - 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][21] 2. Accounts Receivable 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] - 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] 3. Acquisitions and Divestitures 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] - Avinode sale (aviation software products) on May 1, 2024, for $200.1 million, resulted in a $96.0 million pre-tax gain[31] 4. Goodwill 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][36] 5. Derivative Instruments 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][38] | 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 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] - 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] 7. Supplier Financing Programs 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 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] | 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 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] - 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] 10. Shareholders' Equity 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 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 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] - 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] 13. Business Segments 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] | 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 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] 15. Restructuring and Exit Activities 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][99] - 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][100] | 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 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 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] - 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] Business Overview 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] Restructuring and Exit Activities 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] - The 2025 Restructuring Plan, initiated in Q1 2025, includes workforce alignment and optimization of global finance and accounting operations[99][100] - 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][100] Reportable Segments This section provides an overview of the company's operational segments: Aviation, Land, and Marine Aviation Segment 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] - Achieved higher returns in a high interest rate environment through improved working capital management[103] - Completed the sale of Avinode Group (aviation FBO software products) in Q2 2024 to focus on core businesses[104] Land Segment 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] - Exited certain North American land operations, disposed of Brazil operations, and completed the Watson Fuels sale in April 2025[105] - Recognized a goodwill impairment charge in Q2 2025 following a reassessment of business lines, reflecting downward revisions to long-term forecasts and underperformance[106] Marine Segment 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] - Positioned to generate moderate earnings in stable markets and additional value in volatile and credit-constrained markets[107] Macroeconomic Environment 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] - Inflation decelerated in 2024, but prolonged high inflation or trade uncertainty could negatively impact results[108][110] - Higher interest rates increase interest expense, but the company mitigates fuel price increases through hedging programs[109][110] Results of Operations 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 This section compares the company's financial results for the three-month periods, highlighting key changes and drivers Consolidated Results of Operations 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] - 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] Aviation Segment Results of Operations 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] Land Segment Results of Operations 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] - Operating loss was significantly impacted by goodwill and other asset impairment charges recognized in Q2 2025[123] Marine Segment Results of Operations 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] - Operating loss was impacted by asset impairment charges recognized in Q2 2025[126] Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024 This section compares the company's financial results for the six-month periods, highlighting key changes and drivers Consolidated Results of Operations 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] - 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] Aviation Segment Results of Operations 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] Land Segment Results of Operations 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] - Operating loss was principally related to goodwill and other asset impairment charges recognized in Q2 2025[138] Marine Segment Results of Operations 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] - Operating loss was impacted by asset impairment charges recognized in Q2 2025[142] Liquidity and Capital Resources 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 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][147] - The Credit Facility is subject to a consolidated total leverage ratio covenant of not more than 4.75 to 1[147] - $350.0 million aggregate principal amount of 3.250% Convertible Senior Notes are due in 2028[146] - Receivable purchase agreements allow the sale of qualifying accounts receivable for cash, providing additional liquidity[150] Future Uses of Liquidity 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] - No material changes in expected future uses of liquidity since December 31, 2024[152] Cash Flows 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] - 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] - Increase in cash used in financing activities due to net debt repayments ($58.8 million) and common stock repurchases ($45.0 million)[156] Critical Accounting Estimates This section discusses accounting estimates that require significant judgment and could materially impact the financial statements Goodwill Impairment Assessment 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] - The land reporting unit has been at risk since Q4 2024 and incurred a $359.0 million goodwill impairment charge in Q2 2025[160][161] - Significant judgment is involved in determining fair value, and actual results differing from assumptions could lead to additional impairment charges[159][161] Item 3. Quantitative and Qualitative Disclosures About Market Risk 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] - Information on derivative instruments and their fair value positions is available in Note 5[163] Item 4. Controls and Procedures 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 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] Changes in Internal Control over Financial Reporting 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] PART II. Other Information This section covers legal proceedings, equity security sales, other information, and exhibits Item 1. Legal Proceedings 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][169] - No current proceedings are expected to have a material adverse effect, but adverse resolutions could be material[171] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 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 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] Item 5. Other Information 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 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] Item 6. Exhibits 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] 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]