World Kinect Corporation

04/24/2026 | Press release | Distributed by Public on 04/24/2026 14:21

Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with our 2025 10-K Report and the unaudited Condensed Consolidated Financial Statements and related Notes in Item 1 - Financial Statements of this 10-Q Report. A reference to a "Note" herein refers to the accompanying Notes to the Condensed Consolidated Financial Statements contained in Item 1 - Financial Statements. The following discussion may contain forward-looking statements, and our actual results may differ materially from the results suggested by these forward-looking statements. Some factors that may cause our results to differ are disclosed in Item 1A - Risk Factors of our 2025 10-K Report.
Forward-Looking Statements
This 10-Q Report and the information incorporated by reference in it, or made by us in other reports, filings with the U.S. Securities and Exchange Commission (the "SEC"), press releases, teleconferences, industry conferences or otherwise, contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and may contain the words "believe," "anticipate," "expect," "estimate," "project," "could," "would," "will," "might," "continue," "plan," "ability," "achieve," "can," "intend," "may," "potential," "remain," "strategy," "design," "future," "forecast," or words or phrases of similar meaning. Specifically, this 10-Q Report includes forward-looking statements regarding [(i) expectations regarding macroeconomic conditions, including inflation and its impact on us, (ii) conditions in the aviation, land, and marine markets and their impact on our business, (iii) growth in our core businesses, (iv) the impact of fuel prices and our working capital, liquidity, and capital expenditure requirements, (v) our expectations and estimates regarding tax, legal and accounting matters, including the impact on our financial statements, (vi) our hedging strategy, (vii) our acquisitions, divestitures, restructurings and other strategic transactions (viii) global trade trends and patterns, including the impact of tariffs and global conflicts, and (ix) estimates regarding the financial impact of our derivative and other trading contracts.] Our forward-looking statements are qualified in their entirety by cautionary statements and risk factor disclosures contained in our SEC filings.
These forward-looking statements are estimates and projections reflecting our best judgment and involve risks, uncertainties or other factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control. Although we believe the estimates and projections reflected in the forward-looking statements are reasonable, our expectations may prove to be incorrect. Our actual results may differ materially from the future results, performance or achievements expressed or implied by the forward-looking statements.
Important factors that could cause actual results to differ materially from the results and events anticipated or implied by such forward-looking statements include, but are not limited to:
•the imposition of tariffs or retaliatory tariffs and other trade measures, or renegotiation of existing trade arrangements;
•customer and counterparty creditworthiness and our ability to collect accounts receivable and settle derivative contracts;
•changes in the market prices of, or an unexpected shortage or disruption in the supply of, energy or commodities or extremely high or low fuel prices that continue for an extended period of time;
•adverse conditions in the industries in which our customers operate;
•our inability to effectively mitigate certain financial risks and other risks associated with derivatives and our physical fuel products;
•our ability to achieve the expected level of benefit from our restructuring activities and cost reduction initiatives;
•relationships with our employees and potential labor disputes associated with employees covered by collective bargaining agreements;
•our failure to comply with restrictions and covenants governing our outstanding indebtedness;
•the impact of cyber and other information technology or security related incidents on us, our customers or other parties;
•changes in the political, economic or regulatory environment generally and in the markets in which we operate, including as a result of the current conflicts in Eastern Europe and the Middle East, and uncertainty in Venezuela;
•greenhouse gas reduction programs and other environmental and climate change legislation adopted by governments around the world, including cap and trade regimes, carbon taxes, increased efficiency standards and mandates for renewable energy, each of which could increase our operating and compliance costs as well as adversely impact our sales of fuel products;
•changes in credit terms extended to us from our suppliers;
•non-performance of suppliers on their sale commitments and customers on their purchase commitments;
•non-performance of third-party service providers;
•our ability to effectively integrate and derive benefits from acquired businesses or fully realize the anticipated benefits of our acquisitions, divestitures and other strategic transactions;
•our ability to effectively complete divestitures in accordance with anticipated timing;
•our ability to meet financial forecasts associated with our operating plan;
•lower than expected cash flows and revenues, which could impair our ability to realize the value of recorded intangible assets and goodwill;
•the availability of cash and sufficient liquidity to fund our working capital and strategic investment needs;
•currency exchange fluctuations;
•inflationary pressures and their impact on our customers or the global economy, including sudden or significant increases in interest rates or a global recession;
•our ability to effectively leverage technology and operating systems and realize the anticipated benefits;
•the proliferation of alternative fuel which could result in lower global demand for certain energy sources;
•failure to meet fuel and other product specifications agreed with our customers;
•environmental and other risks associated with the storage, transportation and delivery of petroleum products;
•reputational harm from adverse publicity arising out of spills, environmental contamination or public perception about the impacts on climate change by us or other companies in our industry;
•risks associated with operating in high-risk locations, including supply disruptions, border or route closures and other logistical difficulties that arise when working in these areas;
•uninsured or underinsured losses;
•seasonal variability that adversely affects our revenues and operating results, as well as the impact of natural disasters, such as earthquakes, hurricanes and wildfires;
•pandemics, terrorism, global conflicts, power outages, and other events that could impact demand for fuel;
•declines in the value and liquidity of cash equivalents and investments;
•our ability to retain and attract senior management and other key employees;
•changes in U.S. or foreign tax laws, interpretations of such laws, changes in the mix of taxable income among different tax jurisdictions, or adverse results of tax audits, assessments, or disputes;
•our failure to generate sufficient future taxable income in jurisdictions with material deferred tax assets and net operating loss carryforwards;
•changes in multilateral conventions, treaties, tariffs and trade measures or other arrangements between or among sovereign nations;
•our ability to comply with U.S. and international laws and regulations, including those related to anti-corruption, economic sanction programs and environmental matters;
•the outcome of litigation, regulatory investigations and other legal matters, including the associated legal and other costs; and
•other risks, including those described in Item 1A - Risk Factors in our 2025 10-K Report, together with those described from time to time in our other filings with the SEC.
We operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for us to predict all of those risks, nor can we assess the impact of all of those risks on our business or the extent to which any factor may cause actual results to differ materially from those contained in any forward-looking statement. Further, forward-looking statements speak only as of the date they are made, and unless required by law, we expressly disclaim any obligation or undertaking to publicly update any of them in light of new information, future events, or otherwise. Any public statements or disclosures by us following this 10-Q Report that modify or impact any of the forward-looking statements contained in or accompanying this 10-Q Report will be deemed to modify or supersede such forward-looking statements.
For these statements, we claim the protection of the safe harbor for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Business Overview
We are a leading global provider of aviation, marine, and ground-based transportation fuels and complementary services. Through an integrated global supply and logistics network, we source and distribute products and services to meet customer needs across more than 200 countries and territories throughout the world, including lower-carbon fuels to support our customers' energy-transition objectives. In the United States, we also market natural gas and related solutions.
Restructuring and Exit Activities
Exit Activities
During the fourth quarter of 2025, management committed to and initiated actions to execute a plan to exit certain operations within the land segment, including direct fuel transportation services, lubricants, heating oil, power, and certain advisory and sustainability offerings, that are no longer profitable or not aligned with the Company's core business and corporate strategy. As a result of the actions taken, we recognized charges for exit activities totaling $57.8 million, comprised of severance and compensation costs of $26.2 million, charges associated with various legal matters and contract termination costs of $21.7 million, write-offs of receivables and other assets of $5.1 million, and a loss on the sale of assets of $4.7 million. In addition, we recognized asset impairment charges of $5.8 million related to assets no longer in use or expected to provide nominal future economic benefit.
Management continued to execute these plans in 2026, and as a result of the actions taken during the first quarter of 2026, we recognized charges for exit activities totaling $1.0 million, comprised of charges associated with various legal matters and contract termination costs of $7.8 million and severance and compensation costs of $0.9 million, which were partially offset by a net noncash gain on the sale of assets of $7.7 million.
See Note 2. Acquisitions and Divestitures and Note 14. Restructuring and Exit Activities for additional information.
2025 Restructuring Plan
During the first quarter of 2025, in alignment with ongoing efforts to rationalize our assets and operations, we began the 2025 Restructuring Plan, a company-wide restructuring initiative designed to further streamline our operating model and enhance organizational efficiency and effectiveness. As part of this initiative, we undertook cost management actions in response to the current and projected business needs, including the closure of certain open positions and the elimination of other roles to better align the workforce with our current strategic priorities. These actions are expected to result in approximately $30 million in annualized compensation related savings. As a component of the 2025 Restructuring Plan, in June 2025, we launched a program intended to optimize our global finance and accounting operations. We expect this initiative to result in some initial cost savings beginning in 2026 and with increased savings in following years. Total cost savings for the five-year period from 2026 through 2030 are expected to be approximately $80 million. During the fourth quarter of 2025, we also announced an executive transition as a component of the 2025 Restructuring Plan.
As a result of the actions taken under the 2025 Restructuring Plan, we recognized $45.2 million of restructuring charges associated with the 2025 Restructuring Plan during the year ended December 31, 2025, including $32.7 million of severance and other compensation costs and $12.6 million of other transition related costs. During the three months ended March 31, 2026, we recognized $5.7 million of charges associated with the 2025 Restructuring Plan, consisting primarily of costs associated with the global finance and accounting optimization program as well as additional severance and other compensation costs. We plan to complete the transition activities associated with
the global finance and accounting optimization in the fourth quarter of 2026 and expect to recognize an additional $8.0 million in transition costs and one-time charges associated with the planned global finance and accounting initiatives during the year ending December 31, 2026.
See Note 14. Restructuring and Exit Activities for additional information.
Reportable Segments
We operate in three reportable segments consisting of aviation, land, and marine. For additional discussion on our reportable segments, see "Reportable Segments" under Part I, Item 1 - Business in our 2025 10-K Report. Selected financial information with respect to our business segments is provided in Note 12. Business Segments.
Aviation Segment
Our aviation segment has benefited from growth in our fuel and related service offerings, as well as our enhanced logistics capabilities and the geographic expansion of our aviation fueling operations into additional international airport locations. We have successfully achieved higher returns in a high interest rate environment, driven in part by targeted improvements in working capital management consistent with our strategy to rationalize lower-return business activity. In connection with our efforts to accelerate growth in our core businesses, we completed the acquisition of Universal TSS in the fourth quarter of 2025 for a total purchase price of approximately $207.0 million. See Note 2. Acquisitions and Divestitures for additional information.
Land Segment
In our land segment, we continue to focus on improving capital efficiency by optimizing asset utilization, leveraging the capabilities of our acquisitions, and realigning our operational platform. In 2025, we launched an initiative designed to further streamline our operating model and enhance organizational efficiency and effectiveness. On April 9, 2025, we closed the Watson Fuels sale, and in the fourth quarter of 2025 and into 2026, we committed to and initiated actions to exit certain operations within the land segment, including direct fuel transportation services, lubricants, heating oil, power, and certain advisory and sustainability offerings, that are no longer profitable or not aligned with the Company's core business and corporate strategy. See Note 2. Acquisitions and Divestitures and Note 14. Restructuring and Exit Activities for additional information about the actions taken and related impairment charges.
Marine Segment
We believe that our marine business is well-positioned to generate relatively moderate levels of earnings in stable markets and provide additional value in volatile and credit constrained markets. Due to the generally spot nature of sales in our marine business, we have traditionally benefited from elevated fuel prices and volatility as well as a constrained credit environment, as seen during the first quarter of 2026, with the increase in global oil prices and related volatility resulting in a significant improvement in marine segment profitability.
Macroeconomic Environment
The current global environment, including ongoing geopolitical conflicts and changes in U.S. trade policy, may impact commodity prices, international trade, supply availability, and overall demand for global transportation services. Tariffs, route closures, and other trade restrictions can lead to continuing uncertainty and volatility in global financial and commodity markets, declining consumer confidence, lower personal and business travel and consequent demand for our fuel products. The escalation of conflict in the Middle East has created increased geopolitical and economic uncertainty, particularly within global energy markets. These developments have contributed to heightened volatility in fuel and energy prices worldwide. While we are often able to benefit from periods of market volatility, extended volatility could result in reduced demand or supply uncertainties, which could adversely impact our results.
In recent years, inflation in the United States and other jurisdictions in which we do business increased significantly, driven in part by supply chain disruptions, labor shortages and increased commodity prices, which generally resulted in higher costs. In a rising cost environment, there may be offsetting benefits either inherent in certain parts of our business or that may result from proactive measures we take to reduce the impact of inflation on our net operating results. These benefits can include higher commodity prices that typically result in a constrained credit environment, often creating favorable market conditions that increase demand for our services, as well as our ability to renegotiate prices due to many of our sales contracts being 12 months or less in duration. Additionally, we take measures to mitigate the impact of increases in fuel prices through comprehensive hedging programs and the use of financial derivative contracts.
We have seen some impact associated with changes in U.S. policy and trade-related uncertainty. While a February 20, 2026 Supreme Court ruling struck down a sweeping series of tariffs that had been imposed in 2025, substantial uncertainty remains with respect to how the ruling will be interpreted and whether some of such tariffs might be reimposed under different legal authority. A significant or prolonged period of trade uncertainty or high inflation could adversely impact our results. Higher interest rates also typically increase the interest expense associated with our credit arrangements with banks and other parties that serve as important sources of liquidity for us, which can therefore negatively impact our results of operations for a particular period.
See "We extend credit to many of our customers in connection with their purchase of fuel and services from us, and our business, financial condition, results of operations and cash flows will be adversely affected if we are unable to collect accounts receivable," "Changes in the market prices of energy and commodities may have a material adverse effect on our business," "Our business depends on our ability to adequately finance our capital requirements and fund our investments, which, if not available to us, would impact our ability to conduct our operations," "Significant inflation and higher interest rates may adversely affect our business and financial condition," and "Our derivative transactions with customers, suppliers, merchants and financial institutions expose us to price and credit risks, which could have a material adverse effect on our business" in Item 1A. - Risk Factors in our 2025 10-K Report for additional discussion of these risks.
Results of Operations
Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025
Consolidated Results of Operations
The following provides a summary of our consolidated results of operations for the periods indicated (in millions, except per share amounts):
For the Three Months Ended March 31,
2026 2025
Revenue $ 9,685.0 $ 9,452.5
Cost of revenue 9,413.8 9,222.1
Gross profit 271.2 230.4
Operating expenses:
Compensation and employee benefits 130.8 105.1
General and administrative 77.4 72.4
Goodwill and other asset impairments
- 44.5
Restructuring charges 6.7 15.0
Total operating expenses 214.9 237.0
Income (loss) from operations 56.3 (6.6)
Non-operating income (expenses), net:
Interest expense and other financing costs, net (26.3) (22.9)
Other income (expense), net 2.2 1.3
Total non-operating income (expense), net (24.1) (21.5)
Income (loss) before income taxes 32.2 (28.1)
Provision for income taxes 6.6 (6.8)
Net income (loss) including noncontrolling interest 25.6 (21.3)
Net income (loss) attributable to noncontrolling interest (0.7) (0.2)
Net income (loss) attributable to World Kinect $ 26.2 $ (21.1)
Basic earnings (loss) per common share $ 0.51 $ (0.37)
Diluted earnings (loss) per common share $ 0.50 $ (0.37)
Revenue. Our consolidated revenue for the three months ended March 31, 2026 was $9.7 billion, an increase of $232.5 million, or 2%, compared to the three months ended March 31, 2025, attributable to increased revenue of $390.9 million and $131.0 million in our aviation and marine segments, respectively, partially offset by decreased revenue of $289.4 million in our land segment, as discussed further below.
Gross Profit. Our gross profit for the three months ended March 31, 2026 was $271.2 million, an increase of $40.8 million, or 18%, compared to the three months ended March 31, 2025, attributable to increased gross profit of $30.7 million and $22.6 million in our marine and aviation segments, respectively, partially offset by decreased gross profit of $12.5 million in our land segment, as discussed further below.
Operating Expenses. Total operating expenses for the three months ended March 31, 2026 were $214.9 million, a decrease of $22.1 million, or 9%, compared to the three months ended March 31, 2025. The decrease in operating expenses was primarily attributable to lower asset impairment charges and exit activity and restructuring charges compared to the three months ended March 31, 2025 as well as the impact of the Watson Fuels sale, partially offset by costs associated with the Universal TSS business acquired in the fourth quarter of 2025 and an increase in compensation and employee benefit costs, primarily driven by higher incentive compensation costs in our marine segment.
Non-Operating Income (Expense), net. For the three months ended March 31, 2026, we had net non-operating expense of $24.1 million compared to net non-operating expense of $21.5 million for the three months ended March 31, 2025. The increase in non-operating expense of $2.6 million during the three months ended March 31, 2026 was primarily attributable to lower interest income.
Income Taxes. For the three months ended March 31, 2026, we recognized an income tax expense of $6.6 million, compared to income tax benefit of $6.8 million for the three months ended March 31, 2025. The increase of $13.4 million was primarily attributable to lower asset impairment charges and changes in the mix of our worldwide earnings, partially offset by an increase in net discrete tax benefits of $2.6 million during the three months ended March 31, 2026 compared to the three months ended March 31, 2025. See Note 11. Income Taxes for additional information.
Aviation Segment Results of Operations
The following provides a summary of our aviation segment results of operations for the periods indicated (in millions, except price per gallon):
For the Three Months Ended March 31,
2026 2025 Change
Revenue $ 5,045.1 $ 4,654.2 $ 390.9
Gross profit $ 138.2 $ 115.7 $ 22.6
Operating expenses
80.6 59.5 21.1
Income (loss) from operations
$ 57.6 $ 56.2 $ 1.5
Operational metrics:
Aviation segment volumes (gallons) 1,622.9 1,700.2 (77.3)
Aviation segment average price per gallon $ 2.81 $ 2.50 $ 0.32
Revenues in our aviation segment were $5.0 billion for the three months ended March 31, 2026, an increase of $390.9 million, or 8%, compared to the three months ended March 31, 2025. The increase in revenue was driven by higher average prices, partially offset by a decrease in volume. Average jet fuel price per gallon sold increased by 13%. Total aviation volumes decreased by 77.3 million gallons, or 5%, to 1.6 billion gallons, driven primarily by a reduction in lower margin activity.
Aviation segment gross profit for the three months ended March 31, 2026 was $138.2 million, an increase of $22.6 million, or 20%, compared to the three months ended March 31, 2025. The increase in gross profit was primarily attributable to the contribution from Universal TSS acquired in the fourth quarter of 2025 as well as increased contributions from our core resale business, principally in Europe, and government activity.
Income from operations in our aviation segment for the three months ended March 31, 2026 was $57.6 million, an increase of $1.5 million, or 3%, compared to the three months ended March 31, 2025, driven by the increase in gross profit discussed above, partially offset by an increase in operating expenses. The increase in operating expenses was primarily attributable to increased costs associated with the Universal TSS acquisition during the fourth quarter of 2025, as well as a higher allowance for credit losses as a result of increased accounts receivable exposure driven by elevated jet fuel prices during the first quarter of 2026.
Land Segment Results of Operations
The following provides a summary of our land segment results of operations for the periods indicated (in millions, except price per gallon):
For the Three Months Ended March 31,
2026 2025 Change
Revenue $ 2,575.9 $ 2,865.4 $ (289.4)
Gross profit $ 66.6 $ 79.0 $ (12.5)
Operating expenses
64.3 124.3 (60.0)
Income (loss) from operations
$ 2.2 $ (45.3) $ 47.5
Operational metrics:
Land segment volumes (gallons) (1)
1,357.2 1,494.3 (137.1)
Land segment average price per gallon
$ 1.90 $ 1.92 $ (0.02)
(1)Includes gallons and gallon equivalents of British Thermal Units (BTU) for our natural gas sales and Kilowatt Hours (kWh) for our power business.
Revenues in our land segment were $2.6 billion for the three months ended March 31, 2026, a decrease of $289.4 million, or 10%, compared to the three months ended March 31, 2025. The decrease in revenue was principally driven by a decrease in volume. Total volumes decreased by 137.1 million, or 9%, to 1.4 billion gallons or gallon equivalents, primarily attributable to the sale of Watson Fuels, as well as decreased volumes in our European power business, which is considered non-core and in the process of being exited.
Land segment gross profit for the three months ended March 31, 2026 was $66.6 million, a decrease of $12.5 million, or 16%, compared to the three months ended March 31, 2025. The decrease in gross profit was principally due to the Watson Fuels sale as well as unfavorable market conditions in our natural gas business, partially offset by higher contributions from our cardlock network and retail operations in North America.
Income from operations in our land segment for the three months ended March 31, 2026 was $2.2 million, an increase of $47.5 million, or 105%, compared to the three months ended March 31, 2025, driven by a decrease in operating expenses, partially offset by the decrease in gross profit discussed above. The decrease in operating expenses was primarily attributable to lower asset impairment charges and exit activity and restructuring charges compared to the three months ended March 31, 2025, as well as the impact of the Watson Fuels sale.
Marine Segment Results of Operations
The following provides a summary of our marine segment results of operations for the periods indicated (in millions, except price per metric ton):
For the Three Months Ended March 31,
2026 2025 Change
Revenue $ 2,063.9 $ 1,932.9 $ 131.0
Gross profit $ 66.4 $ 35.7 $ 30.7
Operating expenses
33.4 20.9 12.5
Income (loss) from operations
$ 33.0 $ 14.8 $ 18.2
Operational metrics:
Marine segment volumes (metric tons)
3.9 3.7 0.1
Marine segment average price per metric ton
$ 533.22 $ 519.49 $ 13.73
Revenues in our marine segment were $2.1 billion for the three months ended March 31, 2026, an increase of $131.0 million, or 7%, compared to the three months ended March 31, 2025. The increase in revenue was driven by higher average fuel prices and an increase in volume. The average price per metric ton of bunker fuel sold increased by 3%. Total volumes increased by 0.1 million metric tons, or 4%, to 3.9 million, largely due to the lower demand seen during the three months ended March 31, 2025 as a result of market uncertainty with respect to international trade.
Marine segment gross profit for the three months ended March 31, 2026 was $66.4 million, an increase of $30.7 million, or 86%, primarily attributable to a higher profit contribution from our core resale business, driven by increased bunker fuel prices and elevated market price volatility, as well as from certain physical locations.
Income from operations in our marine segment for the three months ended March 31, 2026 was $33.0 million, an increase of $18.2 million, or 123%, compared to the three months ended March 31, 2025, driven by the increase in gross profit discussed above, partially offset by an increase in operating expenses primarily attributable to higher incentive compensation costs.
Liquidity and Capital Resources
Liquidity to fund working capital, as well as make strategic investments, is a significant priority for us. Our views concerning liquidity are based on currently available information and if circumstances change significantly, the future availability of trade credit or other sources of financing may be reduced, and our liquidity would be adversely affected accordingly.
Sources of Liquidity and Factors Impacting Our Liquidity
Our liquidity, consisting principally of cash and availability under our Credit Facility, as described below, fluctuates based on a number of factors, including the timing of receipts from our customers and payments to our suppliers, changes in fuel prices, as well as our financial performance.
Based on the information currently available, we believe that our cash and cash equivalents as of March 31, 2026 and available funds from our Credit Facility, together with cash flows generated by operations, are sufficient to fund our working capital and capital expenditure requirements for at least the next twelve months after the financial statements are issued and the foreseeable future thereafter.
Convertible Notes. As of March 31, 2026, we have outstanding $350.0 million aggregate principal amount of Convertible Notes which mature on July 1, 2028, unless earlier converted, redeemed or repurchased. The Convertible Notes are senior, unsecured obligations that bear interest at a rate of 3.250% per year, payable semiannually in arrears on January 1 and July 1 of each year. Upon conversion, the Convertible Notes will be settled in cash up to the aggregate principal amount of the Convertible Notes to be converted, and in cash, shares of common stock or any combination thereof, at our option, in respect of the remainder, if any, of our conversion obligation in excess of the aggregate principal amount. See Note 7. Debt, Interest Income, Expense, and Other Finance Costs for additional information.
Credit Agreement. The Credit Agreement matures in November 2030 and provides for a term loan as well as the Credit Facility of up to $1.65 billion. Our availability under the Credit Facility is limited by, among other things, our consolidated total leverage ratio, which is defined in the Credit Agreement and is based, in part, on our consolidated earnings before interest, taxes, depreciation and amortization, and share-based compensation, with such adjustments as specified therein, for the four immediately preceding fiscal quarters. The Credit Agreement generally limits the total amount of indebtedness we may incur to a consolidated total leverage ratio of not more than 4.75 to 1.
As a result of the foregoing, as well as other covenants and restrictions contained in our Credit Agreement, our availability under the Credit Facility may fluctuate from period to period. In addition, our failure to comply with the covenants contained in our Credit Agreement could result in an event of default. An event of default, if not cured or waived, would permit acceleration of any outstanding indebtedness under the Credit Facility and our term loan, trigger cross-defaults under certain other agreements to which we are a party, and impair our ability to obtain working capital advances and issue letters of credit, which would have a material adverse effect on our business, financial condition, results of operations and cash flows.
See Note 7. Debt, Interest Income, Expense, and Other Finance Costs for additional information.
Receivables Purchase Agreements. We also have accounts receivable programs under RPAs that allow us to sell a specified amount of qualifying accounts receivable and receive cash consideration equal to the total balance, less an associated fee, which varies based on the outstanding accounts receivable at any given time. The RPAs provide the constituent banks with the ability to add or remove customers from these programs in their discretion based on, among other things, the level of risk exposure the bank is willing to accept with respect to any particular customer. The fees the banks charge us to purchase the receivables from these customers can also be impacted for these reasons. See Note 3. Accounts Receivable for additional information.
Supplier Financing Programs. Under various supplier finance programs, we agree to pay counterparties engaged as paying agents the stated amount of confirmed invoices from our designated suppliers on the original maturity date of the invoices. Under certain of these arrangements, we may also pay fees for the supplier finance platform and related support. See Note 6. Supplier Financing Programs for additional information.
Future Uses of Liquidity
Cash is primarily used to fund working capital to support our operations as well as for strategic acquisitions and investments. There were no material changes in our expected future uses of liquidity from December 31, 2025 to March 31, 2026. For a discussion of these matters, refer to "Liquidity and Capital Resources" under Part II, Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations of our 2025 10-K Report.
Cash Flows
The following table reflects the major categories of cash flows for the three months ended March 31, 2026 and 2025 (in millions). For additional details, please see the unaudited Condensed Consolidated Statements of Cash Flows within this 10-Q Report.
For the Three Months Ended March 31,
2026 2025
Net cash provided by (used in) operating activities $ (46.4) $ 114.4
Net cash provided by (used in) investing activities (11.6) (5.8)
Net cash provided by (used in) financing activities 15.4 (32.4)
Operating Activities. For the three months ended March 31, 2026, net cash used in operating activities was $46.4 million, compared to $114.4 million net cash provided during the three months ended March 31, 2025. The $160.8 million decrease in operating cash flows was principally due to an increase in cash used for inventory and in our derivative activities, driven by the increasing price environment during the three months ended March 31, 2026, partially offset by an increase in net cash provided by accounts payable and accounts receivable attributable to the the Watson Fuels sale and other divestitures and business exits.
Investing Activities. For the three months ended March 31, 2026, net cash used in investing activities was $11.6 million, compared to net cash used of $5.8 million during the three months ended March 31, 2025. The net cash used in investing activities for the three months ended March 31, 2026 was primarily driven by capital expenditures of $13.8 million. Net cash used in investing activities for the three months ended March 31, 2025 was primarily driven by capital expenditures of $15.2 million, partially offset by $9.3 million of cash received from the net repayment of notes receivable.
Financing Activities. For the three months ended March 31, 2026, net cash provided by financing activities was $15.4 million compared to net cash used of $32.4 million for the three months ended March 31, 2025. The net cash provided by financing activities for the three months ended March 31, 2026 was principally attributable to net borrowings under our Credit Facility of $102.8 million, partially offset by repurchases of common stock of $75.0 million and dividend payments of $10.7 million. Net cash used in financing activities for the three months ended March 31, 2025 was primarily attributable to repurchases of common stock of $10.0 million, dividend payments of $9.7 million, and net repayments under our Credit Facility of $6.3 million.
Critical Accounting Estimates
The unaudited Condensed Consolidated Financial Statements are prepared in accordance with accounting principles generally accepted in the United States of America. The significant accounting policies used are disclosed in Item 15 - Financial Statement Schedules, Note 1. Basis of Presentation, New Accounting Standards, and Significant Accounting Policies to the Consolidated Financial Statements in our 2025 10-K Report.
We make estimates and assumptions that affect the reported amounts on our unaudited Condensed Consolidated Financial Statements and accompanying Notes as of the date of the unaudited Condensed Consolidated Financial Statements. There have been no material changes to the Critical Accounting Estimates disclosed in our 2025 10-K Report.
World Kinect Corporation published this content on April 24, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on April 24, 2026 at 20:22 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]