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What changed in WORLD KINECT CORP's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of WORLD KINECT CORP's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+280 added−260 removedSource: 10-K (2024-02-23) vs 10-K (2023-02-24)

Top changes in WORLD KINECT CORP's 2023 10-K

280 paragraphs added · 260 removed · 208 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

42 edited+11 added−7 removed50 unchanged
Biggest changeImportant 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: • customer and counterparty creditworthiness and our ability to collect accounts receivable and settle derivative contracts; • sudden changes in the market price of fuel 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 ability to effectively integrate and derive benefits from acquired businesses; • our inability to effectively mitigate certain financial risks and other risks associated with derivatives and our physical fuel products; • 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 senior revolving credit facility ("Credit Facility") and our senior term loan ("Term Loan"), including our financial covenants; • the impact of cyber and other information security-related incidents; • changes in the political, economic or regulatory environment generally and in the markets in which we operate, such as the current conflict in Eastern Europe; • 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 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; • failure to meet fuel and other product specifications agreed with our customers; • our ability to achieve the expected level of benefit from our restructuring activities and cost reduction initiatives; • 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 closures and other logistical difficulties that arise when working in these areas; • uninsured or underinsured losses; 7 Table of Contents • seasonal variability that adversely affects our revenues and operating results, as well as the impact of natural disasters, such as earthquakes, hurricanes and wildfires; • 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; • the impact of the U.K.'s exit from the European Union, known as Brexit, on our business, operations and financial condition; • our ability to comply with U.S. and international laws and regulations, including those related to anti-corruption, economic sanction programs and environmental matters; • global health developments and economic uncertainty following the COVID-19 pandemic; • the outcome of litigation and other proceedings, including the costs associated in defending any actions; and • other risks, including those described in Item 1A. – Risk Factors in this 2022 10-K Report and those described from time to time in our other filings with the SEC.
Biggest changeImportant 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: • customer and counterparty creditworthiness and our ability to collect accounts receivable and settle derivative contracts; • changes in the market prices 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 security related incidents; • changes in the political, economic or regulatory environment generally and in the markets in which we operate, such as the current conflicts in Eastern Europe and the Middle East; • 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; • 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; • 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; 7 Table of Contents • risks associated with operating in high-risk locations, including supply disruptions, border 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; • 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 or other arrangements between or among sovereign nations, including the U.K.'s exit from the E.U.; • 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 this 2023 10-K Report and those described from time to time in our other filings with the SEC.
Furthermore, changes in regulatory policies or increased awareness and any adverse publicity in the global marketplace about potential impacts on climate change by us or other companies in our industry, which could result in a reduction in the demand for hydrocarbon products that are deemed to contribute to GHGs, harm our reputation and adversely impact our sales of fuel products.
Furthermore, changes in regulatory policies or increased awareness and any adverse publicity in the global marketplace about potential impacts on climate change by us or other companies in our industry could result in a reduction in the demand for hydrocarbon products that are deemed to contribute to GHGs, harm our reputation and adversely impact our sales of fuel products.
Forward-Looking Statements This 2022 10-K Report and the information incorporated by reference in it, or made by us in other reports, filings with 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.
Forward-Looking Statements This 2023 10-K Report and the information incorporated by reference in it, or made by us in other reports, filings with 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.
See Item 1A. – Risk Factors. Other Regulations As a global organization with customers and operations around the world, we are subject to an often complicated, multi-jurisdictional matrix of laws and regulations that govern international trade, including laws relating to anti-corruption, anti-money-laundering, export controls, economic sanctions, anti-boycott rules, currency exchange controls and transfer pricing rules.
See Item 1A. – Risk Factors. 4 Table of Contents Other Regulations As a global organization with customers and operations around the world, we are subject to an often complicated, multi-jurisdictional matrix of laws and regulations that govern international trade, including laws relating to anti-corruption, anti-money-laundering, export controls, economic sanctions, anti-boycott rules, currency exchange controls and transfer pricing rules.
These initiatives include providing unconscious bias training to our managers, mandating diverse interview panels in our recruiting process and actively participating in veteran programs that provide employment opportunities and educational support to military veterans and their families.
These initiatives include providing unconscious bias training to our managers, promoting diverse interview panels in our recruiting process and actively participating in veteran programs that provide employment opportunities and educational support to military veterans and their families.
We believe that our extensive market knowledge, worldwide footprint, logistics expertise and support, the use of price risk management offerings, and value-added benefits, including single-supplier convenience, fuel quality control and fuel procurement outsourcing, give us the ability to compete within those markets. Seasonality Our operating results are subject to seasonal variability.
We believe that our extensive market knowledge, worldwide footprint, logistics expertise and support, the use of price risk management offerings, and value-added benefits, including single-supplier convenience, fuel quality control and fuel procurement outsourcing, give us the ability to compete within those markets. Seasonality Our operating results can be subject to seasonal variability.
Our aviation-related service offerings include fuel management, price risk management, ground handling, 24/7 global dispatch services, and trip planning services, including flight planning and scheduling, weather reports and overflight permits. We also supply fuel and provide services to U.S. 1 Table of Contents and foreign government and military customers, such as the U.S.
Our aviation-related service offerings include fuel management, price risk management, ground handling, 24/7 global dispatch services, and trip planning services, including flight planning and scheduling, weather reports and overflight permits. We also supply fuel and provide 1 Table of Contents services to U.S. and foreign government and military customers.
Any public statements or disclosures by us following this report that modify or impact any of the forward-looking statements contained in or accompanying this 2022 10-K Report will be deemed to modify or supersede such forward-looking statements.
Any public statements or disclosures by us following this report that modify or impact any of the forward-looking statements contained in or accompanying this 2023 10-K Report will be deemed to modify or supersede such forward-looking statements.
We have launched various programs designed to build a global culture that promotes and celebrates employee health and well-being in our locations around the world. The goal of these programs is to integrate employee health and well-being into the World Fuel Services culture through fun and educational events, webinars, activities and fitness challenges.
We have launched various programs designed to build a global culture that promotes and celebrates employee health and well-being in our locations around the world. The goal of these programs is to integrate employee health and well-being into the World Kinect culture through fun and educational events, webinars, activities and fitness challenges.
A reference to a "Note" herein refers to the accompanying Notes to the Consolidated Financial Statements within Part IV. Item 15. Notes to the Consolidated Financial Statements included in this 2022 10-K Report.
A reference to a "Note" herein refers to the accompanying Notes to the Consolidated Financial Statements within Part IV. Item 15. – Notes to the Consolidated Financial Statements included in this 2023 10-K Report.
Also posted on our website are our Code of Conduct ("Code of Conduct"), Board of Directors’ committee charters and Corporate Governance Principles. Our internet website and information contained on our internet website are not part of this 2022 10-K Report and are not incorporated by reference in this 2022 10-K Report.
Also posted on our website are our Code of Conduct ("Code of Conduct"), Board of Directors’ committee charters and Corporate Governance Principles. Our website and information contained on our website are not part of this 2023 10-K Report and are not incorporated by reference in this 2023 10-K Report.
Although we believe the estimates and projections reflected in the 6 Table of Contents 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.
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.
See the section entitled Item 1A, "Risk Factors" for additional information regarding the impacts of government regulation on our business. Human Capital Resources At World Fuel Services, we believe that our people's passion and expertise are what differentiates us and investing in our people is a top priority.
See Item 1A. – Risk Factors for additional information regarding the impacts of government regulation on our business. Human Capital Resources At World Kinect, we believe that our people's passion and expertise are what differentiates us and investing in our people is a top priority.
In our fuel distribution activities, we compete with major oil companies that market fuel directly to the large commercial airlines, shipping companies and petroleum distributors operating in the land transportation market as well as fuel resellers. We compete, among other things, on the basis of service, convenience, reliability, availability of trade credit and price.
In our fuel distribution activities, we compete with major oil companies that market fuel and other energy products directly to large commercial airlines, shipping companies, petroleum distributors operating in the land transportation market, fuel resellers and other commercial and industrial customers. We compete, among other things, on the basis of service, convenience, reliability, availability of trade credit and price.
In certain instances, we serve as a reseller, where we purchase fuel from a supplier and contemporaneously resell it to our customers through spot and contract sales. We also maintain inventory in certain strategic locations, the cost of which is generally tied to market-based formulas.
These transactions may be pursuant to fuel purchase contracts or through spot sales. In certain instances, we serve as a reseller, where we purchase fuel from a supplier and contemporaneously resell it to our customers through spot and contract sales. We also maintain inventory in certain strategic locations, the cost of which is generally tied to market-based formulas.
In this regard, we are committed to working on increasing transparency around our talent recruitment, development and retention efforts, as well as our diversity, equity and inclusion initiatives.
In this regard, we are working on increasing transparency across our company, particularly around our talent recruitment, development and retention efforts, as well as our diversity, equity and inclusion initiatives.
Our principal executive office is located at 9800 Northwest 41st Street, Miami, Florida 33178 and our telephone number at this address is 305‑428‑8000. Our internet address is https://www.wfscorp.com and the investor relations section of our website is located at https://ir.wfscorp.com.
Our principal executive office is located at 9800 N.W. 41st Street, Miami, Florida 33178 and our telephone number at this address is 305‑428‑8000. Our internet address is https://www.world-kinect.com and the investor relations section of our website is located at https://ir.worldkinect.com.
Competitors We operate globally across industries that are highly fragmented with numerous competitors. Our competitors range in size and complexity from large multinational corporations, which have significantly greater capital resources than us, to relatively small and specialized firms.
Competitors We operate globally across industries that are highly fragmented with numerous competitors. Our competitors range from large multinational corporations, which have significantly greater capital resources than us, to relatively small and specialized firms that compete with us in a particular line of business.
Land Segment In our land segment, we primarily offer fuel, lubricants, heating oil, natural gas, power, and related products and related services to commercial, industrial, residential and government customers, as well as retail petroleum operators.
Land Segment In our land segment, we primarily offer fuel, lubricants, heating oil, and related products and services to commercial, industrial, residential and government customers, as well as retail petroleum operators. We provide energy advisory services, sustainability solutions, as well as supply fulfillment for natural gas and power.
Violations of these sanctions can result in significant penalties and civil and criminal liabilities. 4 Table of Contents We are also subject to a variety of other U.S. and foreign laws and regulations, relating to: • labor and employment; • workplace and driver safety; • consumer protection; • data privacy and protection; • cybersecurity; • commodities trading, brokerage, derivatives and advisory services; • credit and payment card processing and payment services; • petroleum marketing; • human rights and modern slavery; • antitrust and competition; and • other regulatory reporting and licensing requirements.
We are also subject to a variety of other U.S. and foreign laws and regulations, relating to: • labor and employment; • workplace and driver safety; • consumer protection; • data privacy and protection; • cybersecurity; • commodities trading, brokerage, derivatives and advisory services; • credit and payment card processing and payment services; • petroleum marketing; • human rights and modern slavery; • antitrust and competition; and • other regulatory reporting and licensing requirements.
As a result of the military conflict in Eastern Europe, the U.S., the E.U., the U.K. and other countries in which we operate have imposed sanctions on Russia and other individuals and entities with connections to the Russian state. These sanctions continue to evolve and have become significantly more stringent over time.
As a result of the military conflict in Eastern Europe, countries in which we operate have imposed sanctions on Russia and other individuals and entities with connections to the Russian state. These sanctions continue to evolve and have become significantly more stringent over time. Violations of these sanctions can result in significant penalties and civil and criminal liabilities.
Some environmental laws may also impose strict liability for remediation of spills and releases of oil and hazardous substances, which could subject us to liability without regard to whether we were negligent or at fault. See Item 1A. – Risk Factors. Climate Change Climate change continues to be an area of focus at the local, national and international levels.
Some environmental laws may also impose strict liability for remediation of spills and releases of oil and hazardous substances, which could subject us to liability without regard to whether we were negligent or at fault. See Item 1A. – Risk Factors.
We are committed to creating a positive impact in our communities, encouraging our employees to support the communities in which they live and in which we operate, and engaging with and supporting charities in all aspects of society.
Community Engagement As a global company, we are focused on creating a positive impact, encouraging our employees to support the communities in which they live, and engaging with and supporting charities in all aspects of society.
The following charts provide information about our global workforce as of December 31, 2022: Health and Safety As a global energy management company, we are committed to doing the right thing in all that we do and we continually seek to protect the health and safety of our employees, contractors, customers, suppliers and the communities in which we operate.
The following charts provide information about our global workforce as of December 31, 2023: 5 Table of Contents Health and Safety As a global energy management company, we are committed to doing the right thing in all that we do.
We have established a set of "Rules to Live By" to help strengthen our existing Integrated Management System and drive appropriate safety behaviors and practices, which we believe are vital to preventing workplace incidents. These rules are designed to ensure the safety of our employees, contractors, customers, suppliers and communities around the world.
We have established a set of "Rules to Live By" to help strengthen our existing Integrated Management System and drive appropriate safety behaviors and practices that we believe are vital to preventing workplace incidents. These rules are designed to ensure we execute our operations safely and securely for all our stakeholders.
The fuel is generally delivered to our customers directly or to a designated tanker truck loading terminal commonly referred to as "racks," which are owned and operated by our suppliers or other third-parties. On January 3, 2022, we closed the acquisition of all of the outstanding equity interest in Flyers Energy Group, LLC ("Flyers").
The fuel is generally delivered to our customers directly or to a designated tanker truck loading terminal commonly referred to as "racks," which are owned and operated by our suppliers or other third-parties.
In other non-E.U. countries, regulations include the adoption of cap and trade regimes, carbon taxes, restrictive permitting, increased efficiency standards, and incentives or mandates for renewable energy.
In other non-E.U. countries, regulations include the adoption of cap and trade regimes, carbon taxes, restrictive permitting, increased efficiency standards, and incentives or mandates for renewable energy. Regulatory requirements related to ESG or sustainability reporting have been adopted and may continue to be introduced in various jurisdictions.
As a result, a number of countries have adopted, or are considering the adoption of, regulatory frameworks to reduce greenhouse gas ("GHG") emissions. In the U.S., the U.S.
Climate Change and Sustainability Climate change continues to be an area of focus at the local, national and international levels. As a result, a number of countries have adopted, or are considering the adoption of, regulatory frameworks to reduce greenhouse gas ("GHG") emissions. In the U.S., the U.S.
We believe the breadth of our service offerings combined with our global supplier network is a strategic differentiator that allows customers to secure fuel and high-quality services in locations worldwide. We purchase our aviation fuel from suppliers worldwide.
We have developed an extensive network of on-airport fueling operations and third-party suppliers and service providers that enable us to provide aviation fuel and related services throughout the world. We believe the breadth of our service offerings combined with our global supplier network is a strategic differentiator that allows customers to secure fuel and high-quality services in locations worldwide.
We are a signatory to the United Nations ("U.N.") Global Compact and are focused on supporting the U.N.'s principles on human rights, labor, the environment and anti-corruption through progressing our goals and objectives.
We also supply natural gas and power in the United States and Europe along with a growing suite of other sustainability-related products and services. We are a signatory to the United Nations ("U.N.") Global Compact and are focused on supporting the U.N.'s principles on human rights, labor, the environment and anti-corruption through progressing our goals and objectives.
We have developed what we believe to be a comprehensive process designed to identify, assess and manage HSE risks in our operations. We set targets for performance improvements and regularly measure, audit and report on our performance both internally and in accordance with applicable laws.
We have developed what we believe to be a comprehensive process designed to identify, assess and manage HSE risks in our operations. We set targets for performance improvements, regularly measure, audit and report on our performance, and investigate near misses and incidents to determine root causes to prevent similar incidents from occurring in the future.
Our cost of fuel is generally tied to market-based formulas or government-controlled prices. Additionally, we have been taking actions designed to increase the availability of renewable and lower-carbon fuels such as sustainable aviation fuel ("SAF") and are working to expand and develop our supply chain with the vision to make SAF an everyday purchase.
Additionally, we have been taking actions designed to increase the availability of renewable and lower-carbon fuels such as sustainable aviation fuel ("SAF") and are working to expand and develop our supply chain to meet customer demand.
Citizenship We believe that fostering sustainable growth is about conducting our business in a manner that promotes a healthy environment and strengthens the local communities where we operate. At World Fuel Services, we and all of our employees are dedicated to being a good neighbor and charitable partner in the communities where we conduct our operations.
We believe that fostering sustainable growth is about conducting our business in a manner that promotes a healthy environment and strengthens the local communities where we operate.
Specifically, this 2022 10-K Report includes forward-looking statements regarding (i) the conditions in the aviation, land, and marine markets and their impact on our business, (ii) growth strategies, the impact of fuel prices and our working capital, liquidity, and capital expenditure requirements, (iii) our expectations and estimates regarding tax, legal and accounting matters, including the impact on our financial statements, (iv) our expectations regarding the financial impact and other benefits of previous acquisitions, including estimates of future expenses and our ability to realize estimated synergies, (v) estimates regarding the financial impact of our derivative contracts, and (vi) our role in the transition to lower carbon alternatives and the impact of our services on such transition.
Specifically, this 2023 10-K Report includes forward-looking statements regarding (i) expectations regarding inflation and its impact on us, (ii) the conditions in the aviation, land, and marine markets and their impact on our business, (iii) our growth strategies, including the position of our land segment to gain market share, (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) 6 Table of Contents estimates regarding the financial impact of our derivative and other trading contracts and (viii) estimated savings arising out of various cost reduction efforts.
Business Overview World Fuel Services Corporation (the "Company") was incorporated in Florida in July 1984 and along with its consolidated subsidiaries is referred to collectively in this Annual Report on Form 10-K ("2022 10-K Report") as "World Fuel," "we," "our," and "us." We are a leading global energy management company, offering a broad suite of energy advisory, management and fulfillment services, digital and other technology solutions, as well as sustainability products and services across the energy product spectrum.
Item 1. Business Overview World Kinect Corporation (the "Company") was incorporated in Florida in July 1984 and along with its consolidated subsidiaries is referred to collectively in this Annual Report on Form 10-K ("2023 10-K Report") as "World Kinect," "we," "our," and "us." In June 2023, the Company changed its name from World Fuel Services Corporation to World Kinect Corporation.
We also expect our contractors to manage HSE matters in line with our policies and strive to maintain an open dialogue with our stakeholders to better align our policies with the priorities within the communities where we operate. 5 Table of Contents Diversity, Equity and Inclusion We place a high degree of focus on growth in position and career enhancement paths for our employees by providing professional development opportunities and cultivating a diverse talent pool.
Diversity, Equity and Inclusion We place a high degree of focus on growth in position and career enhancement paths for our employees by providing professional development opportunities and cultivating a diverse talent pool.
Fuel may be delivered into our customers’ aircraft or to a designated storage facility located at one of our locations or our suppliers’ locations pursuant to arrangements with them. Inventory is purchased at airport locations or shipped, typically via pipelines or truck, and held at multiple locations in order to meet the needs of our customers.
We purchase our aviation fuel from suppliers worldwide. Fuel may be delivered into our customers’ aircraft or to a designated storage facility located at one of our locations or our suppliers’ locations pursuant to arrangements with them.
We also distribute heating oil to residential customers and unbranded fuel to numerous other customers, including commercial and industrial customers, such as manufacturing, mining, agriculture, construction, and oil and gas exploration companies. These transactions may be pursuant to fuel purchase contracts or through spot sales.
In connection with our fuel marketing activities, we distribute fuel under long-term contracts to branded and unbranded distributors, convenience stores and retail fuel outlets operated by third parties. We also distribute heating oil to residential customers and unbranded fuel to numerous other customers, including commercial and industrial customers, such as manufacturing, mining, agriculture, construction, and oil and gas exploration companies.
We engage in contract sales, which are sales made pursuant to fuel purchase contracts with customers who commit to purchasing fuel from us over the contract term. We also conduct spot sales, which are sales that do not involve continuing contractual obligations by our customers to purchase fuel from us.
We also conduct spot sales, which are sales that do not involve continuing contractual obligations by our customers to purchase fuel from us. Our cost of fuel is generally tied to market-based formulas or government-controlled prices.
We have also expanded our offerings to include lower carbon alternatives, such as renewable diesel (also known as hydrotreated vegetable oil or "HVO"), biodiesel, and renewable natural gas (biogas). We primarily conduct these activities throughout most of the U.S. as well as parts of the United Kingdom ("U.K.") and Brazil.
We primarily conduct these activities throughout most of the U.S. as well as parts of the United Kingdom ("U.K.") and Brazil.
Defense Logistics Agency and the North Atlantic Treaty Organization ("NATO") (collectively, "government customers"). In addition, we offer a growing suite of digital and technology solutions, including payment and processing services, as well as operate a web-based marketplace platform that facilitates aircraft charter arrangements.
In addition, we offer payment and processing services, as well as operate a web-based marketplace platform that facilitates aircraft charter arrangements. Given that fuel is a major component of an aircraft’s operating costs, our customers require cost-effective and professional fuel services.
Our seasonality results from numerous factors, including traditionally higher demand for natural gas and home heating oil during the winter months and aviation and land fuel during the summer months, as well as other seasonal weather patterns. As such, our results of operations may fluctuate from period to period.
Our seasonality may result from numerous factors, including demand changes related to seasonal travel and weather patterns. Our results for the second and third quarters of the year have historically been stronger for our aviation segment and our results for the fourth and first quarters of the year have historically been stronger for our land segment.
Removed
We are principally involved in providing energy procurement and related products and services to commercial and industrial customers in the aviation, land, and marine transportation industries. We have also expanded our product and service offerings to include energy advisory services, sustainability and renewable energy solutions, as well as supply fulfillment for natural gas and power.
Added
We believe our new name reflects our ongoing transformation into a more resilient, diversified energy and solutions provider.
Removed
We are continuing to focus on advancing the energy transition to lower carbon alternatives through expanding our portfolio of energy solutions and providing customers with greater access to sustainably sourced energy as well as mechanisms to compensate for residual emissions in the near term.
Added
Since the name change, our common stock is listed on the New York Stock Exchange under our new name as well as our new ticker symbol, "WKC." We are a global energy management company offering fulfillment and related services to more than 150,000 customers across the aviation, marine, and land-based transportation sectors.
Removed
Given that fuel is a major component of an aircraft’s operating costs, our customers require cost-effective and professional fuel services. We have developed an extensive network consisting of on-airport fueling operations and third-party suppliers and service providers that enable us to provide aviation fuel and related services throughout the world.
Added
Inventory is purchased at airport locations or shipped, typically via pipelines or trucks, and held at multiple locations in order to meet the needs of our customers. We engage in contract sales, which are sales made pursuant to fuel purchase contracts with customers who commit to purchasing fuel from us over the contract term.
Removed
Our services include energy procurement management, price risk management, as well as sustainability solutions, such as carbon management and renewable energy solutions through World Kinect, our global energy management brand. In connection with our fuel marketing activities, we distribute fuel under long-term contracts to branded and unbranded distributors, convenience stores and retail fuel outlets operated by third parties.
Added
We continue to focus on supporting the energy transition through various initiatives and expanding our sustainability offerings, including renewable fuel products, and carbon management and renewable energy solutions, such as renewable diesel (also known as hydrotreated vegetable oil or "HVO"), biodiesel, and renewable natural gas (biogas).
Removed
Flyers' operations include transportation, commercial fleet fueling, lubricants distribution, and the supply of wholesale, branded and renewable fuels. See Note 3. Acquisitions and Divestitures for additional information.
Added
We are continuing to invest in talent in this area, which we believe will help accelerate growth in these activities.
Removed
We have developed a set of commitments for our business, including initiatives aimed at increasing the representation of minorities and military veterans throughout our organization, as well as the representation of women in senior management.
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We believe our land segment is well-positioned to continue growing market share, both organically and through leveraging the capabilities of our acquisitions, including Flyers Energy Group, LLC ("Flyers"), which we acquired in January 2022, serving to further enhance our business to deliver value-added solutions to our land fuel customers.
Removed
Some of the charities in which we have participated recently include: Disasters Emergency Committee; Electriciens sans frontières; Red Cross; Muscular Dystrophy Association (MDA); Jet Blue Swing for Good, which supports youth-oriented charities; and many more local and global institutions and organizations.
Added
For example, the EU Corporate Sustainability Reporting Directive became effective in 2023 and applies to both EU and certain non-EU entities.
Added
In October 2023, California enacted the Climate Corporate Data Accountability Act and the Climate Related Financial Risk Act that will require large public and private companies that do business within the state to disclose their Scopes 1, 2 and 3 greenhouse gas ("GHG") emissions, with third party assurance of GHG emissions information for certain entities, and issue public reports on their climate-related financial risk and related mitigation measures.
Added
In 2023, California also enacted the Voluntary Carbon Market Disclosures Act, which requires companies that operate within the state and make certain climate-related claims to provide enhanced disclosure around the achievement of such claims. We expect regulatory disclosure requirements related to ESG matters to continue to expand globally.
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We continually seek to minimize the impact of our operations and ensure the health and safety of our employees, contractors, customers, suppliers and the communities in which we operate.
Added
We also expect our contractors to manage HSE matters in line with our policies and strive to maintain an open dialogue with our stakeholders and within the communities where we operate.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

79 edited+22 added−20 removed114 unchanged
Biggest changeTax rates in the various jurisdictions in which we and our subsidiaries are organized and conduct operations may also change significantly because of political or economic factors beyond our control. Ongoing developments regarding the projects by the Organisation for Economic Co-operation and Development ("OECD") including global minimum tax and other initiatives, could adversely affect our worldwide effective tax rate.
Biggest changeFor example, the impact of discrete items and non-deductible expenses on our effective tax rate is greater when our pre-tax income is lower. Tax rates in the various jurisdictions in which we and our subsidiaries are organized and conduct operations may also change significantly because of political or economic factors beyond our control.
Acquiring and integrating businesses may place a strain on our management, operational and financial resources, and expose us to additional risks and unexpected expenses, some of which we have experienced in the past and which we may experience in the future, including: • increased operating costs and difficulties in efficiently integrating the operations, financial reporting, IT systems, technology, and personnel of acquired businesses; • challenges managing acquired businesses while maintaining uniform standards, controls and risk management processes appropriate for a public company; • using estimates and judgments when evaluating the various risks and opportunities of the acquired business that may ultimately prove to be incorrect; • diversion of management's time and attention from other business concerns; • negative impacts of changes in management on existing business relationships and other disruptions of the acquired business; • entry into markets in which we may have no or limited direct prior experience; • challenges in retaining key employees, customers or suppliers of the acquired businesses; • reduced liquidity or increased indebtedness if we use a material portion of our available cash or borrowing capacity to fund acquisitions; • assumption of material liabilities, exposure to litigation, regulatory noncompliance or unknown liabilities associated with the acquired businesses; and • limited indemnities, or security supporting such indemnities, from sellers in an acquisition or ongoing indemnity obligations to purchasers in a divestiture.
Acquiring and integrating businesses may place a strain on our management, operational and financial resources, and expose us to additional risks and unexpected expenses, some of which we have experienced in the past and which we may experience in the future, including: • increased operating costs and difficulties in efficiently integrating the operations, financial reporting, IT systems, technology, and personnel of acquired businesses or of new business operations; • challenges managing acquired businesses while maintaining uniform standards, controls and risk management processes appropriate for a public company; • using estimates and judgments when evaluating the various risks and opportunities of the acquired business that may ultimately prove to be incorrect; • diversion of management's time and attention from other business concerns; • negative impacts of changes in management on existing business relationships and other disruptions of the acquired business; • entry into markets in which we may have no or limited direct prior experience; • challenges in retaining key employees, customers or suppliers of the acquired businesses; • reduced liquidity or increased indebtedness if we use a material portion of our available cash or borrowing capacity to fund acquisitions; • assumption of material liabilities, exposure to litigation, regulatory noncompliance or unknown liabilities associated with the acquired businesses; and • limited indemnities, or security supporting such indemnities, from sellers in an acquisition or ongoing indemnity obligations to purchasers in a divestiture.
For example, in the first six months of 2022, our aviation segment was significantly and adversely affected by severe backwardation, a market condition in which oil futures forward prices trade at lower levels than the current market price. Our enhanced efforts to limit our exposure to this type of market risk may not be fully effective in the future.
For example, in the first six months of 2022, our aviation segment was significantly and adversely affected by severe backwardation, a market condition in which oil futures forward prices trade at lower levels than the current market price. Our efforts to limit our exposure to this type of market risk may not be fully effective in the future.
Our business may be adversely affected by consolidation in the aviation, land or marine transportation industries, which may reduce the number of customers that purchase our products and services. Larger shipping companies and airlines often have greater leverage and have a greater ability to buy directly from major oil companies and suppliers.
Our business may also be adversely affected by consolidation in the aviation, land or marine transportation industries, which may reduce the number of customers that purchase our products and services. Larger shipping companies and airlines often have greater leverage and have a greater ability to buy directly from major oil companies and suppliers.
For example, we have benefited from an income tax concession in Singapore since 2008, which reduces the income tax rate on qualified sales and derivative gains and losses. We recently renewed the concession for an additional five-year period beginning January 1, 2023.
For example, we have benefited from an income tax concession in Singapore since 2008, which reduces the income tax rate on qualified sales and derivative gains and losses. We renewed the concession for an additional five-year period beginning January 1, 2023.
Improper or illegal activities, including those caused by our subcontractors, could also subject us to civil or criminal penalties or administrative sanctions, including contract termination, fines, forfeiture of fees, suspension of payment and suspension or debarment from doing business with government agencies, any of which could 12 Table of Contents materially adversely affect our reputation, business, financial condition or results of operations.
Improper or illegal activities, including those caused by our subcontractors, could also subject us to civil or criminal penalties or administrative sanctions, including contract termination, fines, forfeiture of fees, suspension of 13 Table of Contents payment and suspension or debarment from doing business with government agencies, any of which could materially adversely affect our reputation, business, financial condition or results of operations.
To the extent that a pandemic, epidemic or other outbreak of infectious disease adversely affects our business, results of operations and financial condition, it may also have the effect of exacerbating many of the other risks discussed in this 2022 10-K Report or any of our other periodic reports, which could have a material adverse effect on us and our results of operations.
To the extent that a pandemic, epidemic or other outbreak of infectious disease adversely affects our business, results of operations and financial condition, it may also have the effect of exacerbating many of the other risks discussed in this 2023 10-K Report or any of our other periodic reports, which could have a material adverse effect on us and our results of operations.
Despite our efforts to properly handle and protect this information in compliance with such requirements, our facilities and systems and those of our third-party service providers may be vulnerable to security breaches, theft, misplaced or lost data, and programming, procedural or human errors that could potentially lead to such information being compromised or handled improperly.
Despite our efforts to properly handle and protect this information in compliance with such requirements, our facilities and systems and those of our third-party service providers may be vulnerable to security breaches, theft, misplaced or lost data, and programming, procedural or human errors that may lead to such information being compromised or handled improperly.
The concession remains conditioned upon our meeting certain employment and investment thresholds which, if not met, may eliminate the benefit beginning with the first year in which the conditions are not satisfied. Our effective tax rate can be more or less volatile based on the amount of pre-tax income or loss.
The concession remains conditioned upon our meeting certain employment and investment thresholds which, if not met, may eliminate the benefit beginning with the first year in which the conditions are not satisfied. Our effective tax rate can be volatile based on the amount of pre-tax income or loss.
Item 1A. Risk Factors You should carefully consider each of the following risks and all the other information contained in this 2022 10-K Report in evaluating us and our common stock. Although the risks are organized by headings, and each risk is discussed separately, many are interrelated.
Item 1A. Risk Factors You should carefully consider each of the following risks and all the other information contained in this 2023 10-K Report in evaluating us and our common stock. Although the risks are organized by headings, and each risk is discussed separately, many are interrelated.
Anti-corruption laws generally prohibit us from providing anything of value to foreign officials for the purposes of improperly influencing official decisions or improperly obtaining or retaining business and may also apply to commercial bribery. As part of our business, we operate in countries with a high degree of corruption and frequently interact with state-owned enterprises and government officials.
Anti-corruption laws generally prohibit us from providing anything of value to foreign officials for the purposes of improperly influencing official decisions or improperly obtaining or retaining business and may also apply to commercial bribery. 19 Table of Contents As part of our business, we operate in countries with a high degree of corruption and frequently interact with state-owned enterprises and government officials.
Fuel prices are volatile and can be impacted by many factors beyond our control, including: expectations about future supply and demand for fuel products; oil and gas production levels set and maintained by the Organization of Petroleum Exporting Countries ("OPEC") as well as non-OPEC countries; global economic and political conditions that impact or create uncertainty in the global energy markets, such as the ongoing military conflict in Eastern Europe, threatened or actual acts of terrorism, war or civil unrest; laws, regulations or taxes related to environmental matters, including those mandating or incentivizing alternative energy sources or otherwise addressing global climate change; energy conservation efforts and technological advances affecting energy consumption or supply; regulatory changes in commodities markets; and extreme weather and other natural disasters.
Energy and commodity prices are volatile and can be impacted by many factors beyond our control, including: expectations about future supply and demand for petroleum products; oil and gas production levels set and maintained by the Organization of Petroleum Exporting Countries ("OPEC") as well as non-OPEC countries; global economic and political conditions that impact or create uncertainty in the global energy markets, such as the ongoing military conflicts in Eastern Europe and the Middle East, threatened or actual acts of terrorism, war or civil unrest; laws, regulations or taxes related to environmental matters, including those mandating or incentivizing alternative energy sources or otherwise addressing global climate change; energy conservation efforts and technological advances affecting energy consumption or supply; regulatory changes in commodities markets; and extreme weather and other natural disasters.
Any of the foregoing could result in distribution difficulties and disruptions, environmental pollution, government-imposed fines or clean-up obligations, personal injury or wrongful death claims, or damage to our properties or the properties of others.
Any of the foregoing can result in distribution difficulties and disruptions, environmental pollution, government-imposed fines or clean-up obligations, personal injury or wrongful death claims, or damage to our properties or the properties of others.
Sudden and unexpected negative changes in the financial condition of our customers, including insolvency 8 Table of Contents or bankruptcy, could have a negative impact on our sales, make it more difficult to collect on receivables, and may cause us to incur bad debt expense at levels higher than we have historically experienced.
Sudden and unexpected negative changes in the financial condition of our customers, including insolvency or bankruptcy, could have a negative impact on our sales, make it more difficult to collect on receivables, and may cause us to incur bad debt expense at levels higher than we have historically experienced.
Our reliance on email transmissions over public networks also exposes us to risks associated with the failure of our employees, customers, business partners and other third parties to use appropriate controls to protect sensitive information, due to risks associated with social engineering (e.g., phishing and impersonation), fraud and email scams.
Our reliance on email transmissions over public networks also exposes us to risks associated with the failure of our employees, customers, business partners and other third parties to use appropriate controls to protect sensitive information, due to risks associated with social engineering (e.g., phishing and impersonation), fraud and email 10 Table of Contents scams.
Proprietary derivative transactions, by their nature, expose us to changes in the underlying commodity prices of the proprietary positions taken. Although we have 19 Table of Contents established limits on such exposure, any adverse changes could result in losses which can be further exacerbated by volatility in the financial and other markets.
Proprietary derivative transactions, by their nature, expose us to changes in the underlying commodity prices of the proprietary positions taken. Although we have established limits on such exposure, any adverse changes could result in losses which can be further exacerbated by volatility in the financial and other markets.
Although most of our agreements with suppliers provide that we have recourse against them for products that fail to meet contractual specifications, such recourse may be time-barred or otherwise insufficient to adequately cover the 10 Table of Contents liability we may incur and our ability to enforce such recourse may be limited or costly.
Although most of our agreements with suppliers provide that we have recourse against them for products that fail to meet contractual specifications, such recourse may be time-barred or otherwise insufficient to adequately cover the liability we may incur and our ability to enforce such recourse may be limited or costly.
Strategic & Operational Risks We extend credit to most of our customers in connection with their purchase of fuel and services from us, and our financial condition, results of operations and cash flows will be adversely affected if we are unable to collect accounts receivable.
Strategic & Operational Risks 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.
Certain of our customers are affected by variations in demand for business and leisure travel. Business travel can be impacted by increased use of conferencing and collaboration technology, increased remote work and cost-driven business travel limitations, while leisure travel demand can be impacted by reductions in consumer discretionary income and other economic factors.
Certain of our customers are affected by variations in demand for business and leisure travel. Business travel can be impacted 9 Table of Contents by increased use of conferencing and collaboration technology, increased remote work and cost-driven business travel limitations, while leisure travel demand can be impacted by reductions in consumer discretionary income and other economic factors.
There have also been significant governmental incentives and consumer pressures to increase the use of alternative fuels in the U.S. and throughout the world. Automotive, industrial and power generation manufacturers are developing more fuel-efficient engines, hybrid engines and alternative clean power systems.
There have also been significant governmental incentives and consumer pressures to increase the use of alternative fuels in the U.S. and throughout the world. Automotive, industrial and power generation manufacturers 16 Table of Contents are developing more fuel-efficient engines, hybrid engines and alternative clean power systems.
Our business could be adversely affected and subject to the risk of disintermediation if our 14 Table of Contents suppliers choose to increase their direct marketing to our customers to compete with us or provide less advantageous price and credit terms to us than to our other competitors.
Our business could be adversely affected and subject to the risk of disintermediation if our suppliers choose to increase their direct marketing to our customers to compete with us or provide less advantageous price and credit terms to us than to our other competitors.
In certain markets, we also rely on a single or limited number of suppliers to sell us fuel or provide services on our behalf. We may have limited alternatives if such supplier fails to meet applicable standards or requirements.
In certain markets, we also rely on a single or limited 12 Table of Contents number of suppliers to sell us fuel or provide services on our behalf. We may have limited alternatives if such supplier fails to meet applicable standards or requirements.
Government sales can be materially impacted by factors such as administration policy changes, supply disruptions, border closures, road blockages, inventory shortages and other logistical difficulties that can arise when conducting business in areas with active military conflicts, natural disasters or other severe circumstances.
Government sales can be materially impacted by factors such as administration policy changes, supply disruptions, inventory shortages and other logistical difficulties that can arise when conducting business in areas with active military conflicts, natural disasters or other severe circumstances.
Our failure or inability to comply with the requirements of these facilities, including meeting certain financial ratios or other covenants, could limit the availability under our Credit Facility or result in an event of default.
Our failure or inability to comply with these requirements, including financial ratios or other covenants, could limit the availability under our Credit Facility or result in an event of default.
If there is a sudden a significant change in fuel prices, the amount of cash necessary to cover margin calls can be material and impact our liquidity. We are exposed to various risks in connection with our use of derivatives, which could have a material adverse effect on our results of operations.
If there is a sudden a significant change in fuel prices, the amount of cash necessary to cover margin calls can be material and impact our liquidity. 11 Table of Contents We are exposed to various risks in connection with trading activities and our use of derivatives, which could have a material adverse effect on our results of operations.
For example, the E.U.'s General Data Protection Regulation imposes strict rules on handling personal data related to the E.U. and imposes significant sanctions for violations. We have substantial operations in the E.U. and are therefore subject to 17 Table of Contents these heightened standards.
For example, the E.U.'s General Data Protection Regulation imposes strict rules on handling personal data related to the E.U. and imposes significant sanctions for violations. We have substantial operations in the E.U. and are therefore subject to these heightened standards.
Public health crises, epidemics, and pandemics, such as the COVID-19 pandemic, have impacted our operations directly and may in the future impact us directly, or may disrupt the operations of our business partners, suppliers and customers in ways that could have an adverse effect on our business, results of operations and financial 18 Table of Contents condition.
Public health crises, such as the COVID-19 pandemic, have impacted our operations directly and may in the future impact us directly, or may disrupt the operations of our business partners, suppliers and customers in ways that could have an adverse effect on our business, results of operations and financial condition.
Additionally, cyber attacks can affect third-party networks outside of our control that are required to operate trading platforms, pipelines, and other infrastructure we rely on to conduct our business. For example, in 2021, Colonial Pipeline Company temporarily shut down its pipeline system following a ransomware attack on its systems.
Cybersecurity incidents can also affect third-party networks outside of our control that are required to operate trading platforms, pipelines, and other infrastructure we rely on to conduct our business. For example, in 2021, Colonial Pipeline Company temporarily shut down its pipeline system following a ransomware attack on its systems.
Any strike, work stoppage or other dispute with our unionized employees or those of third parties who provide us services or operate assets upon which we rely to distribute our products could have a material adverse effect on our results of operations and cash flows.
Any strike, work stoppage or other dispute with unions representing our employees (or representing employees of third parties who provide us services or operate assets or upon which we otherwise rely to distribute products or deliver services) could have a material adverse effect on our results of operations and cash flows.
We may recognize additional tax expense and be subject to additional tax 15 Table of Contents liabilities, including other liabilities for tax collection obligations due to changes in laws, regulations, administrative practices, and interpretations related to tax.
We may recognize additional tax expense and be subject to additional tax liabilities, including other liabilities for tax collection obligations due to changes in laws, regulations, administrative practices, and interpretations related to tax.
We have incurred, and expect to continue incurring, expenses related to the integration of businesses we acquire. The success of our inorganic growth strategy will depend, in part, on our ability to successfully combine our existing business with acquired businesses and realize the anticipated benefits from such acquisitions, including synergies, cost savings, earnings growth, and operational efficiencies.
We have incurred, and expect to continue incurring, expenses related to the integration of businesses we acquire. The success of our acquisitions depends on our ability to successfully combine our existing business with acquired businesses and realize the anticipated benefits from such acquisitions, including synergies, cost savings, earnings growth, and operational efficiencies.
Moreover, there is a risk of serious injury or loss of life for our employees or subcontractors operating in high-risk locations.
Moreover, there can be a risk of serious injury or loss of life for our employees or subcontractors when operating in high-risk locations.
Therefore, weak economic conditions generally have a negative impact on our customers' business which may, in turn, have an adverse effect on our business.
Weak economic conditions that have a negative impact on our customers' business may, in turn, have an adverse effect on our business.
Because we offer fuel products and services on a worldwide basis, our business is subject to risks associated with doing business internationally, such as: • trade protection measures and import, export and other licensing requirements, which could increase our costs or prevent us from doing certain business internationally; • higher costs associated with hiring and retaining senior management for overseas operations; • difficulty in staffing and managing widespread operations, which could reduce our productivity; • changes in regulatory requirements, which may be costly and require significant time to implement; • laws that restrict us from repatriating profits earned from our activities within certain foreign countries; • fluctuations in foreign currency exchange rates and severe currency devaluations; • governmental actions that may result in expropriation, the deprivation of our contractual rights or the inability to obtain or retain authorizations required to conduct our business; • political risks, including changes in governments, corruption and uncertain regulatory environments; and • terrorism, war, civil unrest, natural disasters and other severe weather-related events.
Because we offer fuel products and services on a worldwide basis, our business is subject to risks associated with doing business internationally, such as: • trade protection measures and import, export and other licensing requirements, which could increase our costs or prevent us from doing certain business internationally; • higher costs associated with hiring and retaining senior management for overseas operations; • difficulty in staffing and managing widespread operations, which could reduce our productivity; • changes in regulatory requirements, which may be costly and require significant time to implement; • laws that restrict us from repatriating profits earned from our activities within certain foreign countries; • fluctuations in foreign currency exchange rates and severe currency devaluations; • governmental actions that may result in expropriation, the deprivation of our contractual rights or the inability to obtain or retain authorizations required to conduct our business; • political risks, including changes in governments, corruption and uncertain regulatory environments; • changes in multilateral conventions, treaties, tariffs or other arrangements between or among sovereign nations, including, for example, the U.K.'s exit from the E.U., which can increase costs and lead to legal uncertainties and potentially divergent national laws and regulations with regard to tax, licensing and other regulatory rights and obligations; and • terrorism, war, civil unrest, natural disasters and other severe weather-related events.
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. For additional information on the effects of inflation on our business, see Item 7.
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.
Adverse conditions or events affecting the aviation, marine and land transportation industries may have a material adverse effect on our business. Our business is focused on the marketing of energy and other related products and services primarily to the aviation, land and marine transportation industries, which are generally affected by economic cycles and other global events.
Conditions and events affecting the aviation, marine and land transportation industries can affect our business. Our business is focused on the marketing of energy and other related products and services primarily to the aviation, land and marine transportation industries, which are generally affected by economic cycles and other global events.
Furthermore, our credit risk is concentrated in the aviation, land and marine transportation industries, which exposes us to greater risk when there are global impacts to these industries, such as what occurred during the COVID-19 pandemic. Our exposure to credit losses depends primarily on the financial condition of our customers and other factors beyond our control.
Furthermore, our credit risk is concentrated in the aviation, land and marine transportation industries, which exposes us to greater risk when there are global impacts to these industries. 8 Table of Contents Our exposure to credit losses depends primarily on the financial condition of our customers and other factors beyond our control.
Significant inflation and higher interest rates may adversely affect our business and financial condition. After being relatively moderate in recent years, inflation in the United States and other jurisdictions in which we do business increased significantly in late 2021 into 2022, driven in part by supply chain disruptions, labor shortages and increased commodity prices.
Significant inflation and higher interest rates may adversely affect our business and financial condition. Inflation in the United States and other jurisdictions in which we do business increased significantly in late 2021 into 2022, driven in part by supply chain disruptions, labor shortages and increased commodity prices, which has generally resulted in higher costs in 2022 and 2023.
We rely heavily on the proper functioning and availability of both internal and third-party information technology systems, including network infrastructure and cloud applications and services, to support a variety of business processes and activities across our global operations.
We rely heavily on the proper functioning and availability of both internal and third-party information technology systems, including network infrastructure and cloud applications and services, to support a variety of business processes and activities across our global operations. All information technology systems are subject to disruptions, outages, failures, and security breaches or incidents.
Item 1. – Business for additional information about laws and regulations applicable to our business. Laws and regulations relating to environmental protection and occupational safety and health, can be particularly complex and can impose strict liability on us for remediation of spills and releases of oil and hazardous substances without regard to whether we were negligent or at fault.
Laws and regulations relating to environmental protection and occupational safety and health can be particularly complex and can impose strict 18 Table of Contents liability on us for remediation of spills and releases of oil and hazardous substances without regard to whether we were negligent or at fault.
To our knowledge, we have not experienced any material losses relating to cybersecurity attacks. However, there can be no assurance that we will not suffer material losses in the future.
We and our third party providers have experienced, and expect to continue to experience, cybersecurity incidents. To our knowledge, we have not experienced any material losses relating to cybersecurity attacks. However, there can be no assurance that we will not suffer material losses in the future.
An event of default, if not cured or waived, would permit acceleration of any outstanding indebtedness under these facilities, could trigger cross-defaults under other agreements to which we are a party (such as certain derivative contracts), and would impair our ability to obtain working capital advances and letters of credit, any of which could have a material adverse effect on our business, financial condition, results of operations and cash flows. 13 Table of Contents Our business is subject to seasonal variability, which has caused our revenues and operating results to fluctuate and can adversely affect the market price of our shares.
An event of default, if not cured or waived, would permit acceleration of any outstanding indebtedness under these facilities, could trigger cross-defaults under other agreements to which we are a party (such as certain derivative contracts), and would impair our ability to obtain working capital advances and letters of credit, any of which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Therefore, changes in the fair market value of these derivatives are reflected as a component of revenue or cost of revenue (based on the underlying transaction type) in our consolidated statements of income and comprehensive income.
Finally, many of our derivative transactions are not designated as hedges for accounting purposes. Therefore, changes in the fair market value of these derivatives are reflected as a component of revenue or cost of revenue (based on the underlying transaction type) in our Consolidated Statements of Income and Comprehensive Income.
We currently maintain insurance to protect against cybersecurity risks and incidents, but this insurance may not be sufficient to cover the financial, legal, business or reputational losses that may result from such incidents.
We currently maintain insurance to protect us from certain losses arising as a result of cybersecurity incidents, but this insurance may not be sufficient to cover the financial, legal, business or reputational losses that may result from such incidents.
Management’s Discussion and Analysis of Financial Condition and Results of Operations. We face intense competition and, if we are not able to effectively compete in our markets, our revenues and profits may decrease.
For additional information on the effects of inflation on our business, see Item 7. – Management’s Discussion and Analysis of Financial Condition and Results of Operations. We face intense competition and, if we are not able to effectively compete in our markets, our revenues and profits may decrease.
The achievement of initiatives we may undertake relating to the reduction of GHG emissions or other ESG matters, however, may increase our costs, particularly if they require significant changes to our operations, infrastructure or businesses.
We, along with many of our customers and suppliers, are seeking to reduce carbon emissions throughout our supply chains. The achievement of initiatives we may undertake relating to the reduction of GHG emissions or other ESG matters, however, may increase our costs, particularly if they require significant changes to our operations, infrastructure or businesses.
For example, as a result of the military conflict in Eastern Europe, the U.S., the E.U., the U.K. and other countries in which we operate have imposed numerous sanctions on Russia and certain other individuals and entities with connections to the Russian state.
For example, as a result of the military conflict in Eastern Europe, the U.S., the E.U., the U.K. and other countries in which we operate have imposed sanctions on Russia and certain other individuals and entities with connections to the Russian state. Additional restrictions may be enacted, amended, enforced or interpreted in a manner that materially impacts our operations.
Our tax expense includes estimates of additional tax that may be incurred for tax exposures and reflects various estimates and assumptions, including assessments of future earnings that could affect the realizability of our net deferred tax assets.
Furthermore, significant judgment is required in determining our worldwide provision for income taxes and other tax liabilities. Our tax expense includes estimates of additional tax that may be incurred for tax exposures and reflects various estimates and assumptions, including assessments of future earnings that could affect the realizability of our net deferred tax assets.
Furthermore, the enforceability of our derivative transactions may depend on our compliance with applicable statutory, commodity and other regulatory requirements, which if violated could lead to our derivative transaction being voided, as well as penalties and fines.
Furthermore, the enforceability of our transactions may depend on our compliance with applicable statutory, commodity and other regulatory requirements, which if violated could lead to our derivative transaction being voided, as well as penalties and fines. The impact of any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and cash flows.
As such, our results for the second and third quarters of the year tend to be the strongest for our aviation segment and our results for the fourth and first quarters of the year tend to be the strongest for our land segment.
As such, our results for the second and third quarters of the year have historically been stronger for our aviation segment and our results for the fourth and first quarters of the year have historically been stronger for our land segment.
Accordingly, we may be forced to incur significant costs in maintaining or even exiting a physical location, which would have an adverse effect on our results of operations. Some of our workforce is unionized, and we may face labor disruptions and cost increases that adversely affect our business.
Accordingly, we may be forced to incur significant costs in maintaining or even exiting a physical location, which would have an adverse effect on our results of operations.
Some of our employees, including certain of our drivers that transport and deliver fuel products, are represented by labor unions under collective bargaining agreements. Additional unionization of our workforce or any renegotiation of current collective bargaining agreements may result in terms that are less favorable to us.
Some of our employees, including many of our drivers that transport fuel products, are represented by labor unions under collective bargaining agreements. Additional unionization of our workforce, wage negotiations with unions or renegotiation of collective bargaining agreements may result in increased labor costs or other terms that are less favorable to us, or a strike or work stoppage.
This could adversely affect the market price of our common stock, inhibit our ability to pay dividends or otherwise restrict our operations. Information technology failures and data security breaches, including as a result of cybersecurity attacks, could negatively impact our results of operations and financial condition, subject us to increased operating costs, and expose us to litigation.
Information technology failures and data security breaches, including as a result of cybersecurity attacks, could negatively impact our results of operations and financial condition, subject us to increased operating costs, and expose us to litigation.
While we cannot yet determine the full impact such laws, regulations, and requirements may have on our business, our failure to adequately comply with them could lead to substantial fines, penalties, third-party liability, remediation costs, potential cancellation of existing contracts and the inability to compete for future business.
Our failure to adequately comply with these requirements could lead to substantial fines, penalties, third-party liability, remediation costs, potential cancellation of existing contracts and the inability to compete for future business.
Industry developments, such as fuel price transparency, procurement technology tools, increased regulation and increasing customer sophistication may, over time, reduce demand for our services and thereby exacerbate the risks associated with competition. In addition, we rely on a single or limited number of suppliers for the provision of fuel and related products and services in certain markets.
Industry developments, such as fuel price transparency, procurement technology tools, increased regulation and increasing customer sophistication may, over time, reduce demand for our services and thereby exacerbate the risks associated with competition.
In connection with various businesses we operate, we have access to sensitive, confidential or personal data from our employees, customers (both corporate and individual consumers), suppliers and other third parties, some of which may be subject to privacy, security or residency laws, regulations and customer-imposed controls.
We have access to sensitive, confidential or personal data from our employees, customers (both corporate and individual consumers), suppliers and other third parties, some of which is subject to privacy, security or residency laws, regulations and customer-imposed controls. In the ordinary course of business, we collect, retain, process, and transmit such data across national boundaries.
Accordingly, violations could adversely affect, among other things, our reputation, business, financial condition, results of operations and cash flows. General Risks A pandemic, epidemic, or other outbreak of infectious disease may adversely affect our business, results of operations and financial condition.
Accordingly, violations could adversely affect, among other things, our reputation, business, financial condition, results of operations and cash flows. General Risks We face various risks related to pandemics, epidemics and other outbreaks of infectious disease, which may adversely affect our business, results of operations and financial condition.
These include the adoption of cap -and -trade regimes, carbon taxes, trade tariffs, minimum renewable usage requirements, restrictive permitting, increased efficiency standards, and incentives or mandates for renewable energy.
These include the adoption of cap-and-trade regimes, carbon taxes, trade tariffs, minimum renewable usage requirements, restrictive permitting, increased efficiency standards, and incentives or mandates for renewable energy. In the U.S., various federal, state and local laws and regulations have been enacted relating to GHG emissions.
Furthermore, numerous institutional investors and financial institutions have indicated a focus on matters affecting the environment, which may result in reduced investments in, or financing available to, industries that emit GHG emissions.
Furthermore, numerous institutional investors and financial institutions have indicated a focus on matters affecting the environment, which may result in reduced investments in, or financing available to, industries that emit GHG emissions. Many of these groups believe that climate change will significantly influence companies' long-term prospects and have developed ESG standards and guidelines to measure companies' performance.
Our business is subject to extensive laws and regulations, including environmental protection, health and safety, that can result in material costs and liabilities. We are required to comply with extensive and complex laws and other regulations at the international, federal, state/provincial and local government levels in the countries in which we operate. See Part I.
We are required to comply with extensive and complex laws and other regulations at the international, federal, state/provincial and local government levels in the countries in which we operate. See Part I. Item 1. – Business for additional information about laws and regulations applicable to our business.
Since the fair market value of these derivatives is marked to market at the end of each quarter, changes in the value of our derivative instruments because of gains or losses may cause our earnings to fluctuate from period to period. Item 1B. Unresolved Staff Comments None.
Since the fair market value of these derivatives is marked to market at the end of each quarter, changes in the value of our derivative instruments because of gains or losses may cause our earnings to fluctuate from period to period. If we fail to provide products or services to our customers as agreed, it could adversely affect our business.
Accordingly, this can negatively impact our value proposition to these types of customers and increases the risk of disintermediation. Our physical operations have inherent risks that could negatively impact our business, financial condition and results of operations.
Accordingly, this can negatively impact our value proposition to these types of customers and increases the risk of disintermediation. Our operations are subject to business interruptions and casualty losses.
In addition to competing with resellers, we also compete with the major oil producers that market fuel and other energy products directly to large commercial airlines, shipping companies and commercial and industrial users. In recent years, a lower fuel price environment caused many major oil companies to remain in or re-enter the downstream markets.
In addition to competing with resellers, we also compete with the major oil producers that market fuel and other energy products directly to large commercial airlines, shipping companies, petroleum distributors operating in the land transportation market, fuel resellers, and other commercial and industrial customers.
These parties may have significant negotiating leverage over us, and if they are unable or unwilling to supply us on commercially reasonable terms, our business would be adversely affected.
In addition, we rely on a single or limited number of suppliers for the provision of fuel 15 Table of Contents and related products and services in certain markets. These parties may have significant negotiating leverage over us, and if they are unable or unwilling to supply us on commercially reasonable terms, our business would be adversely affected.
Additionally, political or governmental developments or other 9 Table of Contents global health concerns or crises in the countries in which we or our customers operate, could also result in further social, economic or labor instability.
Additionally, political or governmental developments or other global health concerns or crises in the countries in which we or our customers operate, could also result in further social, economic or labor instability. Further, personnel or other shortages can impact our customers’ ability to meet demand, which may in turn adversely affect their demand for our fuel products.
We may be unable to successfully integrate our acquisitions or fully realize the anticipated benefits of our acquisitions and other strategic investments. As part of our business strategy, we may pursue acquisition opportunities and strategic investments, as well as divest certain businesses to enable us to invest in our core business activities.
We may be unable to successfully integrate our acquisitions or fully realize the anticipated benefits of our acquisitions and other strategic transactions. As part of our business strategy, we may pursue acquisition and other strategic transactions. The integration of acquired businesses with our existing business can be complex, costly and time-consuming.
Substantial credit losses could have a material adverse effect on our financial condition, results of operations and cash flows. Changes in the market price of fuel may have a material adverse effect on our business.
Our efforts to manage our credit exposure and respond to changes in our customers' financial condition and other macroeconomic events may not be sufficient to mitigate these risks. Substantial credit losses could have a material and adverse effect on our business, financial condition, results of operations and cash flows.
Given the nature of cyber attacks, some incidents can remain undetected for a period of time despite efforts to detect and respond to them in a timely manner. Furthermore, cyber attacks are becoming more sophisticated, including those carried out by state-sponsored actors, and increasingly target critical infrastructure.
Cybersecurity attacks are increasing in number, attackers are increasingly organized and well-financed, and at times supported by state-sponsored actors, and attacks often target critical infrastructure. Cybersecurity incidents can remain undetected for a period of time despite efforts to detect and respond to them in a timely manner.
Further, personnel or other shortages can impact our customers’ ability to meet demand, which may in turn adversely affect their demand for our fuel products. Accordingly, the effects of any of the foregoing risks and uncertainties on us or our customers could have a material adverse effect on our business, results of operations and financial condition.
Accordingly, the effects of any of the foregoing risks and uncertainties on us or our customers could have a material adverse effect on our business, results of operations and financial condition.
Our operating results are subject to seasonal variability. Seasonality results from numerous factors, including demand changes related to seasonal travel and weather patterns.
Our business is subject to seasonal variability, which can cause our financial results to fluctuate and can adversely affect the market price of our shares. Our operating results can be subject to seasonal variability. Seasonality results from numerous factors, including demand changes related to seasonal travel and weather patterns.
However, extreme or unseasonable weather conditions can substantially reduce the demand for our products and services or significantly increase the prices of the fuel products we sell, which can in turn adversely impact our results of operations.
However, extreme or unseasonable weather conditions can affect seasonal demand patterns and the prices of the products we sell, which can in turn adversely impact our results of operations. Furthermore, we cannot provide any assurances that the seasonal variability will continue in future periods.
Our customers may also experience strikes, labor negotiations, labor disputes and work stoppages that could reduce their demand for our products and services or their ability to pay for products and services already provided. If we fail to provide products or services to our customers as agreed, it could adversely affect our business.
Our customers may also experience strikes or other labor disputes that could reduce their demand for our products and services or their ability to pay for products and services already provided. Financial, Economic & Market Risks Economic, political and other risks associated with international sales and operations could adversely affect our business and future operating results.
Our effective tax rate is subject to significant variation due to numerous factors, including variability in our pre-tax and taxable income and loss and the mix of jurisdictions to which they relate, intercompany transactions, and the applicability of tax concessions.
Our effective tax rate is subject to significant variation due to numerous factors, including variability in our pre-tax and taxable income and loss, changes to our corporate structure, changes in the mix of earnings in countries with differing statutory tax rates, foreign currency fluctuations, intercompany transactions, changes in the valuation of deferred tax assets and liabilities, changes in tax laws or in their interpretation or enforcement, and the applicability of tax concessions.
Finally, our Credit Agreement imposes certain operating and financial covenants on us, which, among other things, restrict our ability to pay dividends or make certain other restricted payments, incur additional debt, create liens and sell a material amount of assets.
Adverse changes in our payment terms from principal suppliers, including shortened payment cycles or requiring prepayment, could impact our liquidity, business, results of operations and cash flows. 14 Table of Contents Certain of the agreements governing our credit arrangements impose certain operating and/or financial covenants on us, which, among other things, restrict our ability to pay dividends or make certain other restricted payments, incur additional debt, create liens and sell a material amount of assets.
Unfavorable ratings under these evolving standards or benchmarks could adversely impact our reputation, business, stock price or access to capital. Non-compliance with any applicable laws, regulations or standards may also result in potential cost increases, litigation, fines, penalties, sales restrictions or loss of customers.
Non-compliance with any applicable laws, regulations or standards may also result in potential cost increases, litigation, fines, penalties, sales restrictions or loss of customers. Our business is subject to extensive laws and regulations, including environmental protection, health and safety, that can result in material costs and liabilities.
Countries including the U.K. have begun the process to introduce the OECD model rules on a global minimum tax and other OECD initiatives into their tax regimes; South Korea enacted minimum tax rules that will be effective for our 2024 year.
Ongoing developments regarding the projects by the Organisation for Economic Co-operation and Development ("OECD") including global minimum tax and other initiatives, could adversely affect our worldwide effective tax rate. Countries have begun the process to introduce the OECD model rules on a global minimum tax and other OECD initiatives into their tax 17 Table of Contents regimes.
In addition, our employees may fail to comply with our policies and procedures with respect to hedging or proprietary trading, such as engaging in unauthorized trading activity, failing to hedge a specific price risk or failing to comply with our internal limits on exposure or any applicable statutory or regulatory requirements.
For example, our employees may fail to comply with our policies and procedures, may engage in unauthorized trading activity, may fail to comply with our internal limits on exposure or any applicable statutory or regulatory requirements, or may otherwise make errors in connection with the trading process. These and other risks may result in substantial losses.
See Part I. Item 1. – Business of this 2022 10-K Report for additional details regarding applicable laws and regulations. Financial, Economic & Market Risks Economic, political and other risks associated with international sales and operations could adversely affect our business and future operating results.
See Part I. Item 1. – Business of this 2023 10-K Report for additional details regarding applicable laws and regulations. Some of our workforce is unionized, and we may face labor disruptions and cost increases that adversely affect our business.
Operating fuel storage and distribution terminals and transporting fuel products involve inherent risks, including: • fires, collisions and other catastrophic disasters; • traffic accidents, injuries and loss of life; • spills, discharges, contaminations and other releases; • severe damage and destruction of property and equipment; and • loss of product and business interruption.
Our operations are subject to business interruptions and casualty losses, such as fires, floods and other catastrophic incidents or events; vehicle collisions, injuries and loss of life; spills, discharges, contaminations and other releases; severe damage and destruction of property and equipment; and loss of product and business interruption.
Removed
For example, our provision for bad debt in our aviation segment was materially higher during 2020 due to the impact of the COVID-19 pandemic on the aviation industry. Our efforts to manage our credit exposure and respond to changes in our customers' financial condition and other macroeconomic events may not be sufficient to mitigate these risks.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAs of February 17, 2023, the majority of our principal properties are leased on commercially reasonable terms and we do not anticipate that we will experience difficulty in renewing or replacing any leases upon expiration in any material respect.
Biggest changeAs of February 16, 2024, the majority of our principal properties are leased on commercially reasonable terms and we do not anticipate that we will experience difficulty in renewing or replacing any leases upon expiration in any material respect.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe are not currently a party to any such claim, complaint or proceeding that we expect to have a material adverse effect on our business or financial condition.
Biggest changeWe have elected to use a threshold of $1 million for purposes of determining whether the disclosure of any such environmental proceeding is required. We are not currently a party to any claim, complaint or proceeding that we expect to have a material adverse effect on our business or financial condition.
However, any adverse resolution of one or more such claims, complaints or proceedings during a particular reporting period could have a material adverse effect on our Consolidated Financial Statements or disclosures for that period. See Note 11. Commitments and Contingencies for additional information. Item 4. Mine Safety Disclosures Not applicable. PART II 20 Table of Contents
However, any adverse resolution of one or more such claims, complaints or proceedings during a particular reporting period could have a material adverse effect on our Consolidated Financial Statements or disclosures for that period. See Note 11. Commitments and Contingencies for additional information. Item 4. Mine Safety Disclosures Not applicable. 22 Table of Contents PART II
See Notes 11. Commitments and Contingencies and 10. Income Taxes for additional details regarding certain tax matters.
Income Taxes and 11. Commitments and Contingencies for additional details regarding certain tax matters.
Legal Proceedings From time to time, we are under review by the IRS and various other domestic and foreign tax authorities with regards to income tax and indirect tax matters and are involved in various inquiries, audits, challenges and litigation in a number of countries, including, in particular, Brazil, Denmark, South Korea and the U.S. where the amounts under controversy may be material.
Item 3. Legal Proceedings From time to time, we are under review by the IRS and various other domestic and foreign tax authorities with regards to income tax and indirect tax matters and are involved in various inquiries, audits, challenges and litigation in a number of countries, and the amounts under controversy may be material. See Notes 10.
Added
In addition, Item 103 of Regulation S-K promulgated by the SEC requires disclosure of certain environmental matters when a governmental authority is a party to the proceedings and such proceedings involve potential monetary sanctions, unless we reasonably believe that the matter will result in no monetary sanctions, or in monetary sanctions, exclusive of interest and costs, of less than a specified threshold.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe timing and amount of shares of common stock to be repurchased under the 2020 Repurchase Program will depend on market conditions, share price, securities law and other legal requirements and factors. 21 Table of Contents We did not repurchase any shares during the fourth quarter of 2022.
Biggest changeThe timing and amount of shares of common stock to be repurchased under the 2020 Repurchase Program will depend on market conditions, share price, securities law and other legal requirements and factors. For information on repurchases of common stock for the first three quarters of 2023, see the corresponding Quarterly Reports on Form 10-Q. Item 6. [Reserved]
Our repurchase program does not require a minimum number of shares of common stock to be purchased, has no expiration date, and repurchases may be suspended or discontinued at any time. As of December 31, 2022, approximately $147.1 million remains available for purchase under the 2020 Repurchase Program.
Our repurchase program does not require a minimum number of shares of common stock to be purchased, has no expiration date, and may be suspended or discontinued at any time. As of December 31, 2023, approximately $137.0 million remains available for purchase under the 2020 Repurchase Program.
As of February 17, 2023, there were 74 shareholders of record of our common stock. Stock Performance This graph compares the total shareholder return on our common stock with the total return on the Russell 2000 Index and the S&P 500 Energy Index for the five‑year period from December 31, 2017 through December 31, 2022.
As of February 16, 2024, there were 72 shareholders of record of our common stock. Stock Performance This graph compares the total shareholder return on our common stock with the total return on the Russell 2000 Index and the S&P 500 Energy Index for the five‑year period from December 31, 2018 through December 31, 2023.
Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities Our common stock is traded on the New York Stock Exchange ("NYSE") under the symbol INT. As of December 30, 2022, the closing price of our stock on the NYSE was $27.33.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is traded on the New York Stock Exchange ("NYSE") under the symbol WKC. As of December 29, 2023, the closing price of our stock on the NYSE was $22.78.
Removed
The cumulative return includes reinvestment of dividends. Issuer Purchases of Equity Securities In March 2020, the Board approved a stock repurchase program authorizing $200.0 million in common stock repurchases (the "2020 Repurchase Program").
Added
The cumulative return includes reinvestment of dividends. 23 Table of Contents Issuer Purchases of Equity Securities The following table presents information with respect to repurchases of common stock made by us during the periods presented (in thousands, except average price paid per share): Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1) 10/1/2023 - 10/31/2023 — $ — — $ 147,053 11/1/2023 - 11/30/2023 511 19.65 511 $ 137,002 12/1/2023 - 12/31/2023 1 20.00 1 $ 136,986 Total 512 $ 19.65 512 $ 136,986 (1) In March 2020, the Board approved a stock repurchase program authorizing $200.0 million in common stock repurchases (the "2020 Repurchase Program").
Removed
For information on repurchases of common stock for the first three quarters of 2022, see the applicable Quarterly Reports on Form 10-Q. Item 6. Reserved

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeSee “We extend credit to most of our customers in connection with their purchase of fuel and services from us, and our financial condition, results of operations and cash flows will be adversely affected if we are unable to collect accounts receivable,” “Changes in the market price of fuel 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 within this 2022 10-K Report. 23 Table of Contents Results of Operations Year Ended December 31, 2022 Compared to Year Ended December 31, 2021 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 Year Ended December 31, 2022 2021 Revenue $ 59,043.1 $ 31,337.0 Cost of revenue 57,954.1 30,548.8 Gross profit 1,089.1 788.2 Operating expenses: Compensation and employee benefits 507.4 386.7 General and administrative 308.7 247.6 Asset impairments 0.6 4.7 Restructuring charges (0.8) 6.6 Total operating expenses 815.8 645.6 Income from operations 273.2 142.6 Non-operating income (expenses), net: Interest expense and other financing costs, net (110.6) (40.2) Other income (expense), net (17.5) (2.3) Total non-operating income (expense), net (128.1) (42.5) Income (loss) before income taxes 145.1 100.0 Provision for income taxes 29.2 25.8 Net income (loss) including noncontrolling interest 115.9 74.2 Net income (loss) attributable to noncontrolling interest 1.7 0.5 Net income (loss) attributable to World Fuel $ 114.1 $ 73.7 Basic earnings (loss) per common share $ 1.83 $ 1.17 Diluted earnings (loss) per common share $ 1.82 $ 1.16 Revenue .
Biggest changeResults of Operations Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 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 Year Ended December 31, 2023 2022 Revenue $ 47,710.6 $ 59,043.1 Cost of revenue 46,652.4 57,954.1 Gross profit 1,058.2 1,089.1 Operating expenses: Compensation and employee benefits 512.3 507.4 General and administrative 308.0 308.7 Asset impairments 32.8 0.6 Restructuring charges 7.2 (0.8) Total operating expenses 860.2 815.8 Income (loss) from operations 198.0 273.2 Non-operating income (expenses), net: Interest expense and other financing costs, net (127.7) (110.6) Other income (expense), net (3.6) (17.5) Total non-operating income (expense), net (131.3) (128.1) Income (loss) before income taxes 66.7 145.1 Provision for income taxes 13.0 29.2 Net income (loss) including noncontrolling interest 53.7 115.9 Net income (loss) attributable to noncontrolling interest 0.8 1.7 Net income (loss) attributable to World Kinect $ 52.9 $ 114.1 Basic earnings (loss) per common share $ 0.86 $ 1.83 Diluted earnings (loss) per common share $ 0.86 $ 1.82 Revenue .
Fair Value Measurements for additional information. (4) We have fixed purchase commitments associated with our risk management program, as well as a purchase contract, that runs through 2026, under which we agreed to purchase annually between 1.9 million barrels and 2.0 million barrels of aviation fuel at future market prices. See Note 11.
Fair Value Measurements for additional information. (4) We have fixed purchase commitments associated with our risk management program, as well as a purchase contract, that runs through 2026, under which we agreed to purchase annually between 1.9 million barrels and 2.0 million barrels of aviation fuel at future market prices. See Note 11. Commitments and Contingencies for additional information.
To the extent we prevail in matters for which unrecognized tax benefit liabilities have been established, or are required to pay amounts in excess of our recorded unrecognized tax benefit liabilities, our effective tax rate in a given financial statement period could be materially affected. 31 Table of Contents Description Judgments and Uncertainties Effect if Actual Results Differ from Assumptions Derivatives We enter into financial derivative contracts to mitigate our risk of fuel market price fluctuations in aviation, land, and marine as well as changes in interest and foreign currency exchange rates and also to offer our customers fuel pricing alternatives to meet their needs.
To the extent we prevail in matters for which unrecognized tax benefit liabilities have been established, or are required to pay amounts in excess of our recorded unrecognized tax benefit liabilities, our effective tax rate in a given financial statement period could be materially affected. 34 Table of Contents Description Judgments and Uncertainties Effect if Actual Results Differ from Assumptions Derivatives We enter into financial derivative contracts to mitigate our risk of fuel market price fluctuations in aviation, land, and marine as well as changes in interest and foreign currency exchange rates and also to offer our customers fuel pricing alternatives to meet their needs.
Any write-off of accounts receivable in excess of our provision for credit losses could adversely affect our results of operations and cash flow. 30 Table of Contents Description Judgments and Uncertainties Effect if Actual Results Differ from Assumptions Business Combinations A business combination occurs when an entity obtains control of a "business." To conclude if the definition of a business is met, we assess whether or not substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, which requires the use of significant judgment to determine the fair value.
Any write-off of accounts receivable in excess of our provision for credit losses could adversely affect our results of operations and cash flow. 33 Table of Contents Description Judgments and Uncertainties Effect if Actual Results Differ from Assumptions Business Combinations A business combination occurs when an entity obtains control of a "business." To conclude if the definition of a business is met, we assess whether or not substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, which requires the use of significant judgment to determine the fair value.
We periodically evaluate whether the carrying value of long-lived assets (property and equipment, identifiable intangible assets, and leases) and equity investments have been impaired when circumstances indicate the carrying value of those assets may not be recoverable. These assessments require us to make accounting estimates that require consideration of forecasted financial information.
We periodically evaluate whether the carrying value of long-lived assets (property and equipment, identifiable intangible assets, and leases), cost method investments, and equity method investments have been impaired when circumstances indicate the carrying value of those assets may not be recoverable. These assessments require us to make accounting estimates that require consideration of forecasted financial information.
As of December 31, 2022, the assumptions used, particularly the expected growth rates, the profitability embedded in the projected cash flow provided by our legacy and newly acquired businesses, the discount rate and the market-based multiples, were defined on available information considering current market volatility and geopolitical risks.
As of December 31, 2023, the assumptions used, particularly the expected growth rates, the profitability embedded in the projected cash flow provided by our legacy and newly acquired businesses, the discount rate and the market-based multiples, were defined on available information considering current market volatility and geopolitical risks.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with the accompanying Consolidated Financial Statements and Notes thereto appearing within Part IV. Item 15. Notes to the Consolidated Financial Statements in this 2022 10‑K Report.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with the accompanying Consolidated Financial Statements and Notes thereto appearing within Part IV. Item 15. – Notes to the Consolidated Financial Statements in this 2023 10‑K Report.
Critical Accounting Estimates Management's discussion and analysis of our financial condition and results of operations are based upon our Consolidated Financial Statements included in this 2022 10‑K Report, which has been prepared in accordance with U.S. GAAP.
Critical Accounting Estimates Management's discussion and analysis of our financial condition and results of operations are based upon our Consolidated Financial Statements included in this 2023 10‑K Report, which has been prepared in accordance with U.S. GAAP.
Additionally, we take measures to mitigate the impact of increases in fuel prices through comprehensive hedging programs and the use of financial derivative contracts. For these reasons, the increased cost environment, caused in part by inflation, has not had a material impact on our historical results of operations for the periods presented in this report.
Additionally, we take measures to mitigate the impact of increases in fuel prices through comprehensive hedging programs and the use of financial derivative contracts. 25 Table of Contents For these reasons, the increased cost environment, caused in part by inflation, has not had a material impact on our historical results of operations for the periods presented in this report.
Aviation Segment Our aviation segment has benefited from growth in our fuel and related services offerings, as well as our enhanced logistics capabilities and the geographic expansion of our aviation fueling operations into additional international airport locations.
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 identified the areas described below as critical to our business operations and the understanding of our results of operations given the uncertainties associated with the assumptions underlying each estimate. For a detailed discussion on the application of these and other significant accounting policies, see Note 1. Basis of Presentation, New Accounting Standards, and Significant Accounting Policies.
We have identified the areas described below as critical to our business operations and the understanding of our results of operations given the uncertainties associated with the assumptions underlying each estimate. For a detailed discussion on the application of these and other significant accounting policies, see Note 1.
Over the last several years, we have spent a considerable amount of time reorganizing our business to drive internal efficiencies so that we can generate relatively moderate levels of earnings in stable markets and yet remain poised to provide additional value in volatile and credit constrained markets.
We have spent a considerable amount of time reorganizing our business to drive internal efficiencies so that we can generate relatively moderate levels of earnings in stable markets and yet remain poised to provide additional value in volatile and credit constrained markets.
Based on the information currently available, we believe that our cash and cash equivalents as of December 31, 2022 and available funds from our Credit Facility, as described below, 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. Credit Facility and Term Loan.
Based on the information currently available, we believe that our cash and cash equivalents as of December 31, 2023 and available funds from our Credit Facility, as described below, 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. Convertible Notes.
A majority of these letters of credit expire within one year from their issuance and expired letters of credit are renewed as needed. As of December 31, 2022, we had issued letters of credit and bank guarantees totaling $561.4 million under our Credit Facility and other uncommitted credit lines. Surety Bonds.
A majority of these letters of credit expire within one year from their issuance and expired letters of credit are renewed as needed. As of December 31, 2023, we had issued letters of credit and bank guarantees totaling $575.2 million under our Credit Facility and other uncommitted credit lines. Surety Bonds.
In 2023, we expect our capital expenditures to be generally consistent with the year ended December 31, 2022. Unrecognized Income Tax Liabilities. As of December 31, 2022, we have recorded gross liabilities for unrecognized income tax benefits ("Unrecognized Tax Liabilities"), including penalties and interest, of $93.5 million.
In 2024, we expect our capital expenditures to be generally consistent with the year ended December 31, 2023. Unrecognized Income Tax Liabilities. As of December 31, 2023, we have recorded gross liabilities for unrecognized income tax benefits ("Unrecognized Tax Liabilities"), including penalties and interest, of $106.4 million.
Based on the assessments performed, and supported by the available information as of December 31, 2022, we concluded that the carrying value of our long-lived assets and equity investments were recoverable and that the fair value of our land and aviation reporting units were not less than their respective carrying values.
Based on the assessments performed, and supported by the available information as of December 31, 2023, we concluded that the fair value of our land and aviation reporting units were not less than their respective carrying values, however we concluded that the carrying value of certain of our long-lived assets and equity investments were not recoverable. See Note 5.
Description Judgments and Uncertainties Effect if Actual Results Differ from Assumptions Impairment Assessments of Goodwill, Long-Lived Assets, and Equity Investments We evaluate goodwill for impairment at least annually, and whenever events or changes in circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount.
Basis of Presentation, New Accounting Standards, and Significant Accounting Policies. 32 Table of Contents Description Judgments and Uncertainties Effect if Actual Results Differ from Assumptions Impairment Assessments of Goodwill, Long-Lived Assets, and Equity Investments We evaluate goodwill for impairment at least annually, and whenever events or changes in circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount.
As of December 31, 2022 and 2021, our outstanding letters of credit and bank guarantees under these credit lines totaled $523.1 million and $404.0 million, respectively. Receivables Purchase Agreements.
As of December 31, 2023 and 2022, our outstanding letters of credit and bank guarantees under these credit lines totaled $437.1 million and $523.1 million, respectively. Receivables Purchase Agreements.
The net cash used in investing activities for the year ended December 31, 2022 was primarily driven by $643.9 million net cash paid for the acquisition of businesses, principally Flyers, as discussed in Note 3. Acquisitions and Divestitures, and $78.6 million for capital expenditures.
Net cash used in investing activities in 2022 was principally driven by $643.9 million net cash paid for the acquisition of businesses, principally Flyers, as discussed in Note 3. Acquisitions, and $78.6 million for capital expenditures. Financing Activities.
Net cash provided by financing activities for the year ended December 31, 2022 was primarily attributable to net borrowings of $333.6 million, primarily driven by incremental borrowings under our Credit Facility related to the acquisition of Flyers and 29 Table of Contents increased working capital requirements, partially offset by $48.7 million in purchases of our common stock and dividend payments of $31.0 million.
Net cash provided by financing activities in 2022 was primarily attributable to net borrowings of $333.6 million, primarily driven by incremental borrowings under our Credit Facility related to the acquisition of Flyers and increased working capital requirements, partially offset by $48.7 million in purchases of our common stock, dividend payments of $31.0 million, and payments for deferred consideration related to prior acquisitions of $12.0 million.
Management’s Discussion and Analysis of Financial Condition and Results of Operations located in our Form 10-K for the fiscal year ended December 31, 2021 (herein incorporated by reference), filed with the SEC on February 25, 2022, for management's discussion of the fiscal year ended December 31, 2020.
Refer to Item 7. – Management’s Discussion and Analysis of Financial Condition and Results of Operations located in our Form 10-K for the fiscal year ended December 31, 2022 (herein incorporated by reference), filed with the SEC on February 24, 2023 ("2022 10-K Report"), for management's discussion of the fiscal year ended December 31, 2021.
Commitments and Contingencies for additional information. 28 Table of Contents Future material cash requirements and off-balance sheet arrangements, in addition to the contractual obligations in the table above, include the following: Acquisition of Flyers. During the year ended December 31, 2022, we closed the acquisition of Flyers as discussed in Note 3. Acquisitions and Divestitures.
Future material cash requirements and off-balance sheet arrangements, in addition to the contractual obligations in the table above, include the following: Acquisition of Flyers. During the year ended December 31, 2022, we completed the acquisition of Flyers as discussed in Note 3. Acquisitions.
Macroeconomic Environment After being relatively moderate in recent years, inflation in the United States and other jurisdictions in which we do business increased significantly in late 2021 into 2022, primarily driven by supply chain disruptions, labor shortages and increased commodity prices, which generally resulted in higher costs in 2022.
Macroeconomic Environment Inflation in the United States and other jurisdictions in which we do business increased significantly beginning in late 2021 into 2022, driven in part by supply chain disruptions, labor shortages and increased commodity prices, which has generally resulted in higher costs in 2022 and 2023.
Investing Activities. For the year ended December 31, 2022, net cash used in investing activities was $724.9 million, compared to net cash used of $58.3 million for the year ended December 31, 2021.
For the year ended December 31, 2023, net cash used in investing activities was $101.1 million, compared to net cash used of $724.9 million during the year ended December 31, 2022.
For the Years Ended December 31, 2022 2021 2020 Net cash provided by (used in) operating activities $ 138.5 $ 173.2 $ 604.1 Net cash provided by (used in) investing activities (724.9) (58.3) 72.8 Net cash provided by (used in) financing activities 237.3 (113.6) (213.0) Operating Activities.
For the Years Ended December 31, 2023 2022 2021 Net cash provided by (used in) operating activities $ 271.3 $ 138.5 $ 173.2 Net cash provided by (used in) investing activities (101.1) (724.9) (58.3) Net cash provided by (used in) financing activities (152.4) 237.3 (113.6) Operating Activities.
The increase in revenue was principally driven by a 55% increase in the average price per metric ton of bunker fuel sold in the year ended December 31, 2022 compared to the year ended December 31, 2021.
The decrease in revenue was principally 28 Table of Contents driven by a decrease of 19% in the average price per metric ton of bunker fuel sold in the year ended December 31, 2023 compared to the year ended December 31, 2022.
We continue to focus on supporting the energy transition through various initiatives and expanding our sustainability offerings, including renewable fuel products, and carbon management and renewable energy solutions through World Kinect, our global energy management 22 Table of Contents brand. We are continuing to invest in talent in this area, which we believe will help accelerate growth in these activities.
We continue to focus on supporting the energy transition by expanding our sustainability offerings, including renewable fuel products, as well as carbon management and renewable energy solutions. We are continuing to invest in talent in this area, which we believe will help accelerate growth in these activities.
For the year ended December 31, 2022, we had net non-operating expense of $128.1 million, compared to net non-operating expense of $42.5 million for the year ended December 31, 2021.
Non-Operating Income (Expenses), net. For the year ended December 31, 2023, we had net non-operating expense of $131.3 million, compared to net non-operating expense of $128.1 million for the year ended December 31, 2022.
For the year ended December 31, 2022, net cash provided by operating activities was $138.5 million compared to net cash provided of $173.2 million for the year ended December 31, 2021.
For the year ended December, 31 2023, net cash provided by operating activities was $271.3 million, compared to $138.5 million net cash provided during the year ended December 31, 2022.
Our availability under our 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. 27 Table of Contents 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.
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.
Aviation Segment Results of Operations The following provides a summary of the aviation segment results of operations for the periods indicated (in millions, except price per gallon): For the Year Ended December 31, 2022 2021 Change Revenue $ 26,799.9 $ 12,824.3 $ 13,975.5 Gross profit $ 357.2 $ 386.9 $ (29.7) Operating expenses 257.7 223.5 34.2 Income (loss) from operations $ 99.5 $ 163.4 $ (63.9) Operational metrics: Aviation segment volumes (gallons) 7,127.6 5,857.5 1,270.2 Aviation segment average price per gallon $ 3.61 $ 2.08 $ 1.53 Revenues in our aviation segment were $26.8 billion for the year ended December 31, 2022, an increase of $14.0 billion, or 109%, compared to the year ended December 31, 2021.
Aviation Segment Results of Operations The following provides a summary of the aviation segment results of operations for the periods indicated (in millions, except price per gallon): For the Year Ended December 31, 2023 2022 Change Revenue $ 23,275.1 $ 26,799.9 $ (3,524.8) Gross profit $ 485.8 $ 357.2 $ 128.6 Operating expenses 277.0 257.7 19.3 Income (loss) from operations $ 208.8 $ 99.5 $ 109.3 Operational metrics: Aviation segment volumes (gallons) 7,328.0 7,127.6 200.4 Aviation segment average price per gallon $ 2.97 $ 3.61 $ (0.64) Revenues in our aviation segment were $23.3 billion for the year ended December 31, 2023, a decrease of $3.5 billion, or 13%, compared to the year ended December 31, 2022.
Operating Expenses . Consolidated total operating expenses for the year ended December 31, 2022 were $815.8 million, an increase of $170.2 million, or 26%, compared to the year ended December 31, 2021.
Operating Expenses. Consolidated total operating expenses for the year ended December 31, 2023 were $860.2 million, an increase of $44.4 million, or 5%, compared to the year ended December 31, 2022.
Marine Segment Results of Operations The following provides a summary of the marine segment results of operations for the periods indicated: Year Ended December 31, 2022 2021 Change Revenue $ 12,959.6 $ 8,085.8 $ 4,873.8 Gross profit 256.0 100.3 155.7 Operating expenses 100.5 79.6 20.9 Income from operations $ 155.5 $ 20.7 $ 134.8 Operational metrics: Marine segment volumes (metric tons) 19.1 18.4 0.6 Marine segment average price per metric ton $ 679.17 $ 438.31 $ 240.85 Revenues in our marine segment were $13.0 billion for the year ended December 31, 2022, an increase of $4.9 billion, or 60%, compared to the year ended December 31, 2021.
Marine Segment Results of Operations The following provides a summary of the marine segment results of operations for the periods indicated (in millions, except price per metric ton): Year Ended December 31, 2023 2022 Change Revenue $ 9,245.6 $ 12,959.6 $ (3,714.0) Gross profit 172.6 256.0 (83.4) Operating expenses 90.4 100.5 (10.2) Income from operations $ 82.3 $ 155.5 $ (73.2) Operational metrics: Marine segment volumes (metric tons) 16.8 19.1 (2.3) Marine segment average price per metric ton $ 549.64 $ 679.17 $ (129.52) Revenues in our marine segment were $9.2 billion for the year ended December 31, 2023, a decrease of $3.7 billion, or 29%, compared to the year ended December 31, 2022.
Our consolidated gross profit for the year ended December 31, 2022 was $1.1 billion, an increase of $300.9 million, or 38%, compared to the year ended December 31, 2021, driven by increased gross profit of $174.9 million and $155.7 million in the land and marine segments, respectively, partially offset by a decrease of $29.7 million in the aviation segment, as discussed further below.
Our consolidated gross profit for the year ended December 31, 2023 was $1.1 billion, a decrease of $30.8 million, or 3%, compared to the year ended December 31, 2022, attributable to decreased gross profit of $83.4 million and $76.1 million in the marine and land segments, respectively, partially offset by increased gross profit of $128.6 million in our aviation segment, as discussed further below.
The increase in operating expenses was driven principally by higher compensation and employee benefit costs as well as higher general and administrative costs, primarily travel and marketing expenses, as business activity continued to normalize. 25 Table of Contents Land Segment Results of Operations The following provides a summary of the land segment results of operations for the periods indicated (in millions, except price per gallon): For the Year Ended December 31, 2022 2021 Change Revenue $ 19,283.7 $ 10,426.8 $ 8,856.9 Gross profit 475.9 301.1 174.9 Operating expenses 350.3 256.4 93.9 Income from operations $ 125.6 $ 44.6 $ 81.0 Operational metrics: Land segment volumes (gallons) (1) 6,166.2 5,254.1 912.1 Land segment average price per gallon $ 3.13 $ 1.98 $ 1.14 (1) Includes gallons and gallon equivalents of British Thermal Units (BTU) for our natural gas sales and Kilowatt Hours (kWh) for our World Kinect power business.
The increase in gross profit discussed above was partially offset by a $19.3 million increase in operating expenses primarily driven by higher headcount-related compensation costs and general and administrative expenses to support the increased level of operating activity, as well as asset impairment and restructuring charges recognized during the year ended December 31, 2023. 27 Table of Contents Land Segment Results of Operations The following provides a summary of the land segment results of operations for the periods indicated (in millions, except price per gallon): For the Year Ended December 31, 2023 2022 Change Revenue $ 15,189.9 $ 19,283.7 $ (4,093.8) Gross profit 399.8 475.9 (76.1) Operating expenses 359.7 350.3 9.4 Income from operations $ 40.1 $ 125.6 $ (85.5) Operational metrics: Land segment volumes (gallons) (1) 6,237.6 6,166.2 71.4 Land segment average price per gallon $ 2.44 $ 3.13 $ (0.69) (1) Includes gallons and gallon equivalents of British Thermal Units (BTU) for our natural gas sales and Kilowatt Hours (kWh) for our power business.
While we generally enter into financial derivative contracts to mitigate price risk exposure associated with our inventory, depending on market pricing dynamics, we may experience negative impacts on our results, particularly in a market pricing environment experiencing severe backwardation, such as in the first half of 2022, where oil futures forward prices traded at significantly lower levels than the current market price.
While we generally enter into financial derivative contracts to mitigate price risk exposure associated with our inventory, market pricing dynamics may still negatively impact our results. In the first half of 2022, oil futures forward prices traded at significantly lower levels than then-current market prices, resulting in elevated price volatility and a severely backwardated market that negatively impacted our results.
See Part I, Item 1. – Business and Note 14. Business Segments, Geographic Information, and Major Customers for additional information about our business segments.
See Note 15. Restructuring for additional information. Reportable Segments We operate in three reportable segments consisting of aviation, land, and marine. See Part I. Item 1. – Business and Note 14. Business Segments, Geographic Information, and Major Customers for additional information about our business segments.
On January 3, 2023, $50.0 million of the remaining purchase consideration was paid to the seller, with the remaining $50.0 million expected to be settled on January 3, 2024. Capital Expenditures. During the year ended December 31, 2022, we incurred capital expenditures in the ordinary course of business of approximately $78.6 million.
In January 2024, $49.8 million of the $50.0 million that remained due as of December 31, 2023 was paid to the seller. Capital Expenditures. During the year ended December 31, 2023, we incurred capital expenditures in the ordinary course of business of approximately $87.6 million.
In the normal course of business, we are required to post bid, performance and other surety-related bonds. The majority of the surety bonds posted relate to our aviation and land segments. We had outstanding bonds that were executed in order to satisfy various security requirements of $59.7 million as of December 31, 2022.
In the normal course of business, we are required to post bid, performance and other surety-related bonds. The majority of the surety bonds posted relate to our aviation and land segments.
Our land segment income from operations for the year ended December 31, 2022 was $125.6 million, an increase of $81.0 million, or 182%, compared to the year ended December 31, 2021.
Our aviation segment income from operations for the year ended December 31, 2023 was $208.8 million, an increase of $109.3 million, or 110%, compared to the year ended December 31, 2022.
Management also considered the volatility in the company's market capitalization and evaluated the potential impact that this volatility may have had on the estimated fair value of our reporting units.
Specifically for goodwill, management also considered the volatility in the company's market capitalization and evaluated the potential impact that this volatility may have had on the estimated fair value of our reporting units. For our cost and equity method investments, the profitability embedded in the projected cash flows provided by our investees are a critical estimate.
Our aviation segment gross profit for the year ended December 31, 2022 was $357.2 million, a decrease of $29.7 million, or 8%, compared to the year ended December 31, 2021.
Our marine segment gross profit for the year ended December 31, 2023 was $172.6 million, a decrease of $83.4 million, or 33%, compared to the year ended December 31, 2022.
Land Segment We believe our land segment is well-positioned to continue growing market share, both organically and through leveraging the capabilities of our acquisitions, including Flyers which we acquired in January 2022, serving to further enhance our business to deliver value-added solutions to our land fuel customers. See Note 3. Acquisitions and Divestitures for additional information.
Land Segment We believe our land segment is well-positioned to continue growing market share organically, in part by improving asset utilization and leveraging the capabilities of our acquisitions, including Flyers, which we acquired in January 2022, serving to further enhance our capability to deliver value-added solutions to our customers through an increasingly streamlined operational platform as discussed under "2023 Restructuring Plan" above.
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.
In addition, our failure to comply with the covenants contained in our Credit Agreement could result in an event of default.
Our marine segment income from operations for the year ended December 31, 2022 was $155.5 million, an increase of $134.8 million, or 652%, compared to the year ended December 31, 2021, principally due to the increase in gross profit, partially offset by a $20.9 million increase in operating expenses driven largely by higher incentive compensation as well as higher general and administrative costs.
Our marine segment income from operations for the year ended December 31, 2023 was $82.3 million, a decrease of $73.2 million, or 47%, compared to the year ended December 31, 2022, primarily due to the decrease in gross profit, partially offset by a $10.2 million decrease in operating expenses, largely driven by lower incentive compensation costs compared to 2022.
For contracts for which quoted market prices are not available, fair value is determined based on pricing models developed primarily from historical information and the expected relationship with quoted market prices. Measurement of the fair value of our derivatives also requires the assessment of certain risks related to non-performance, which requires a significant amount of judgment.
When available, quoted market prices or prices obtained through external sources are used to determine a contract's fair value. For contracts for which quoted market prices are not available, fair value is determined based on pricing models developed primarily from historical information and the expected relationship with quoted market prices.
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 materially from the results and events anticipated or implied by such forward-looking statements are described in Item 1A – Risk Factors and under Forward-Looking Statements.
Some factors that may cause our results to differ materially from the results and events anticipated or implied by such forward-looking statements are described in Item 1A. – Risk Factors and in Item 1. – Business under the section titled "Forward-Looking Statements." We have elected to omit discussion on the earliest of the three years covered by the Consolidated Financial Statements presented in this 2023 10‑K Report.
However, with lower global oil prices and reduced market volatility forecasted for 2023, we expect our marine segment's performance to be materially lower than the extraordinary results produced in 2022.
The lower global oil prices and reduced market volatility experienced in 2023 have impacted our marine segment's performance as expected for the full year 2023, which results are materially lower than the exceptional returns produced in 2022.
In addition, total volumes increased by 0.9 billion, or 17%, to 6.2 billion gallon or gallon equivalents in the year ended December 31, 2022 compared to the year ended December 31, 2021, primarily due to the acquisition of Flyers and the increased activity in our natural gas and power businesses.
In addition, total volumes increased by 0.1 billion, or 1%, to 6.2 billion gallon or gallon equivalents in the year ended December 31, 2023 compared to the year ended December 31, 2022 primarily attributable to our natural gas businesses offset by extreme weather conditions experienced in our core fuel business in North America in early 2023.
The increase in revenue was driven by higher average prices and increased volumes. Average jet fuel price per gallon sold increased by $1.53, or 73%, in the year ended December 31, 2022 compared to the year ended December 31, 2021 as a result of the rise in global oil prices.
The decrease in revenue was driven by lower average prices, partially offset by increased volumes. Average jet fuel price per gallon sold decreased by $0.64, or 18%, in the year ended December 31, 2023 compared to the year ended December 31, 2022.
The increase of $3.4 million was primarily attributable to an increase in income before taxes, partially offset by additional discrete tax benefits as compared to the year ended December 31, 2021. See Note 10. Income Taxes for additional information.
For the year ended December 31, 2023, we recognized income tax expense of $13.0 million, compared to income tax expense of $29.2 million in 2022. The decrease of $16.3 million was primarily attributable to significantly lower foreign earnings and total pre-tax earnings, partially offset by lower net discrete tax items. See Note 10. Income Taxes for additional information.
Revenues in our land segment were $19.3 billion for the year ended December 31, 2022, an increase of $8.9 billion, or 85%, compared to the year ended December 31, 2021. The increase in revenue was principally driven by higher average prices and the acquisition of Flyers.
Revenues in our land segment were $15.2 billion for the year ended December 31, 2023, a decrease of $4.1 billion, or 21%, compared to the year ended December 31, 2022. The decrease in revenue was principally driven by lower average fuel prices, with average fuel prices decreasing by 22% in the year ended December 31, 2023 compared to 2022.
Our consolidated revenue for the year ended December 31, 2022 was $59.0 billion, an increase of $27.7 billion, or 88%, compared to the year ended December 31, 2021, due to higher fuel prices and increased volumes in the aviation, land, and marine segments, respectively, as discussed further below. Gross profit .
Our consolidated revenue for the year ended December 31, 2023 was $47.7 billion, a decrease of $11.3 billion, or 19%, compared to the year ended December 31, 2022, primarily driven by lower fuel prices across all segments as well as lower volumes in our marine segment, as discussed further below. 26 Table of Contents Gross profit .
The fees the banks charge us to purchase the receivables from these customers can also be impacted for these reasons. See Note 2. Accounts Receivable for additional information. See Item 1A. – Risk Factors in Part 1 within this 2022 10-K Report for additional information.
The fees the banks charge us to purchase the receivables from these customers can also be impacted for these reasons. During 2023, we amended one of our RPAs to, among other things, reduce the overall fee structure. See Note 2. Accounts Receivable for additional information.
Cash Flows The following table reflects the major categories of cash flows (in millions). For additional details, please see the Consolidated Statements of Cash Flows.
We had outstanding bonds that were executed in order to satisfy various security requirements of $71.9 million as of December 31, 2023. 31 Table of Contents Cash Flows The following table reflects the major categories of cash flows (in millions). For additional details, please see the Consolidated Statements of Cash Flows.
These instruments may be designated as cash flow or fair value hedges, or accounted for as non-designated derivatives. All derivative instruments are measured and recorded at fair value. When available, quoted market prices or prices obtained through external sources are used to determine a contract's fair value.
These instruments may be designated as cash flow or fair value hedges, or accounted for as non-designated derivatives. All derivative instruments are measured and recorded at fair value. We also assess convertible notes and other related contracts to determine if those contracts or embedded components of those contracts meet the definition of a derivative that require separate accounting.
Acquisitions and Divestitures, partially offset by net cash proceeds of $25.0 million from the collection of a note receivable related to the sale of MSTS. Financing Activities. For the year ended December 31, 2022, net cash provided by financing activities was $237.3 million, compared to net cash used of $113.6 million for the year ended December 31, 2021.
For the year ended December 31, 2023, net cash used in financing activities was $152.4 million compared to net cash provided of $237.3 million for the year ended December 31, 2022.
Our aviation segment income from operations for the year ended December 31, 2022 was $99.5 million, a decrease of $63.9 million, or 39%, compared to the year ended December 31, 2021. In addition to the decrease in gross profit discussed above, income from operations was also impacted by a $34.2 million increase in operating expenses.
Our land segment income from operations for the year ended December 31, 2023 was $40.1 million, a decrease of $85.5 million, or 68%, compared to the year ended December 31, 2022.
The increase in gross profit discussed above was partially offset by an increase in operating expenses, driven by the acquisition of Flyers, as well as higher compensation and employee benefit costs and general and administrative costs as described under Consolidated Results of Operations above.
In addition to the decrease in gross profit discussed above, the decrease in operating income was driven by an increase in operating expenses principally related to asset impairment and restructuring charges, partially offset by lower general and administrative costs and incentive compensation.
In addition, total volumes increased by 0.6 million metric 26 Table of Contents tons, or 3%, to 19.1 million metric tons in the year ended December 31, 2022 compared to the year ended December 31, 2021.
In addition, total volumes decreased by 2.3 million metric tons, or 12%, to 16.8 million metric tons in the year ended December 31, 2023 compared to the year ended December 31, 2022 primarily due to reduced demand in our resale businesses.
Net cash used in investing activities for the year ended December 31, 2021 was primarily driven by $39.2 million for capital expenditures and $37.1 million cash paid for the acquisition of a business in the land segment in the fourth quarter of 2021, as discussed in Note 3.
The net cash used in investing activities in 2023 was primarily driven by capital expenditures of $87.6 million and cash paid for the acquisition of a business of $13.7 million, which was partially offset by proceeds received from the sale of a business of $9.3 million.
In addition, during the year ended December 31, 2022 we recognized a loss related to the contingent consideration associated with the 24 Table of Contents sale of our Multi Service payment solutions business ("MSTS"), as discussed in Note 3. Acquisitions and Divestitures, and a non-operating legal settlement as described in Note 11. Commitments and Contingencies. Income Taxes .
The increase of $3.2 million was primarily attributable to an increase in interest expense driven by higher interest rates, which was partially offset by the impact of losses recognized during the year ended December 31, 2022 related to contingent consideration associated with the sale of our Multiservice payment solutions businesses and a non-operating legal settlement. Income Taxes .
These negative impacts on our operating cash flow were partially offset by an increase in net income (see “Results of Operations” for further details of the drivers impacting our net income) adjusted for noncash items (primarily related to unrealized derivative activity and depreciation) of $252.6 million and an increase in sales of accounts receivable under our RPA programs (as discussed under “Sources of Liquidity and Factors Impacting Our Liquidity” above).
These increases were offset by a decrease in our net income (see "Results of Operations" for further details of the drivers impacting our net income) adjusted for noncash items, lower utilization of our RPA programs, as discussed under "Sources of Liquidity and Factors Impacting Our Liquidity" above, as well as a decrease in customer prepayments. Investing Activities.
For additional discussion on our businesses, climate change and the associated risks, see Part I, Item 1. – Business and Item 1A – Risk Factors within this 2022 10-K Report. Reportable Segments We operate in three reportable segments consisting of aviation, land, and marine, where we offer fuel and related products and services to customers in these transportation industries.
For additional discussion on our businesses, climate change and the associated risks, see Part I, Item 1. – Business and Item 1A. – Risk Factors within this 2023 10-K Report. 2023 Restructuring Plan In November 2023, we approved and began implementing a restructuring plan to realign our operational focus with the purpose of simplifying our business, enabling us to focus more clearly on growing our core businesses and our new sustainability-related activities, and improving our cost structure.
If our estimates of fair value are inaccurate, we may be exposed to losses or gains that could be material. See Item 7A. – Quantitative and Qualitative Disclosures About Market Risks for additional information.
See Item 7A. – Quantitative and Qualitative Disclosures About Market Risks for additional information.
Our marine segment gross profit for the year ended December 31, 2022 was $256.0 million, an increase of $155.7 million, or 155%, compared to the year ended December 31, 2021.
Total aviation volumes increased by 0.2 billion, or 3%, to 7.3 billion gallons, driven largely by growth in passenger airline demand offset by the rationalization of lower-return volume. Our aviation segment gross profit for the year ended December 31, 2023 was $485.8 million, an increase of $128.6 million, or 36%, compared to the year ended December 31, 2022.
If our results differ significantly from our assumptions, such impact could potentially result in impairments.
Fair Value Measurements and Note 15. Restructuring for additional information regarding impairment charges recognized during the year ended December 31, 2023. If our results differ significantly from our assumptions, such impact could potentially result in additional impairments.
As of December 31, 2022, our contractual obligations were as follows (in millions): Current Long-Term Total Debt and interest obligations (1) $ 31.7 $ 888.0 $ 919.6 Operating lease obligations (2) 43.2 204.6 247.8 Finance lease obligations (2) 4.2 12.7 17.0 Derivatives obligations (3) 325.2 165.0 490.2 Purchase commitment obligations (4) 64.5 59.3 123.8 Other obligations 1.3 5.1 6.4 Total $ 470.1 $ 1,334.6 $ 1,804.7 (1) Debt and interest obligations include principal and interest payments on fixed-rate and variable-rate, fixed-term debt based on their maturity dates.
Future Uses of Liquidity Cash is primarily used to fund working capital to support our operations as well as for strategic acquisitions and investments, such as the acquisition of Flyers discussed below. 30 Table of Contents As of December 31, 2023, our contractual obligations were as follows (in millions): Current Long-Term Total Debt and interest obligations (1) $ 114.9 $ 893.3 $ 1,008.2 Operating lease obligations (2) 39.4 188.8 228.2 Finance lease obligations (2) 3.7 13.1 16.8 Derivatives obligations (3) 128.2 51.5 179.7 Purchase commitment obligations (4) 363.8 184.9 548.7 Other obligations 1.5 6.9 8.4 Total $ 651.5 $ 1,338.5 $ 1,990.0 (1) Debt and interest obligations include principal and interest payments on fixed-rate and variable-rate, fixed-term debt based on their maturity dates, and includes $53.6 million of secured borrowings related to the transfer of tax receivables.
Our land segment gross profit for the year ended December 31, 2022 was $475.9 million, an increase of $174.9 million, or 58%, compared to the year ended December 31, 2021.
Our land segment gross profit for the year ended December 31, 2023 was $399.8 million, a decrease of $76.1 million, or 16%, compared to the year ended December 31, 2022. The decrease in gross profit was primarily attributable to extraordinary losses associated with an erroneous bid submitted in the Finnish power market as discussed in Note 11.
Removed
We have elected to omit discussion on the earliest of the three years covered by the Consolidated Financial Statements presented in this 2022 10‑K Report. Refer to Item 7.
Added
The following discussion may contain forward-looking statements, and our actual results may differ materially from the results suggested by these forward-looking statements.
Removed
Our intention is to become a leading global energy management company offering a full suite of energy advisory, management and fulfillment services, technology solutions, payment management solutions, as well as sustainability products and services across the energy product spectrum.
Added
As part of this plan, we identified open positions that were eliminated and other positions that were closed to better align the workforce necessary to execute the revised strategy. During the year ended December 31, 2023, we recognized restructuring charges of $7.2 million, composed of severance and other compensation costs.
Removed
As part of our growth strategy, we have also increased the level of inventory that we hold in order to meet the needs of our customers.
Added
We estimate that the plan could result in approximately $15.6 million in annualized savings related to compensation.
Removed
Our results of operations in our aviation segment have also been significantly affected in recent years by the effects of the COVID-19 pandemic, as well as the withdrawal of the troops from Afghanistan by the U.S. and NATO that concluded in the third quarter of 2021.
Added
We also decided to shift future investments away from underperforming businesses and to continue assessing our global office footprint, resulting in impairment charges of $11.2 million during the fourth quarter of 2023. 24 Table of Contents We expect to continue assessing potential initiatives during the first quarter of 2024, which could result in additional restructuring charges, with the intent of completing the restructuring activities during the second quarter of 2024.
Removed
However, the relaxation of global travel restrictions has contributed to a substantial recovery in global aviation volumes as compared to pre-pandemic levels.
Added
During 2023, we 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. As part of our business strategy, we hold inventory in order to meet the needs of our customers.
Removed
We have also expanded our product and service offerings to include energy advisory services, sustainability solutions, as well as supply fulfillment for natural gas and power.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

9 edited+7 added−1 removed7 unchanged
Biggest changeSince the gains or losses on the forward and swap contracts are substantially offset by the gains or losses from remeasuring the hedged foreign-currency-denominated exposure, we do not believe that a hypothetical 10% change in exchange rates at December 31, 2022 would have a material impact on our income from operations. 33 Table of Contents As of December 31, 2022, the foreign currency denominated notional amounts and fair value in U.S. dollars of our exposures from our foreign currency exchange derivatives, were primarily related to the following (in millions, except weighted average contract price): Settlement Period Unit Notional Net Long/(Short) Weighted Average Contract Price Fair Value Amount 2023 AUD (17.9) 0.653 $ (0.7) 2023 CAD (38.8) 1.358 (0.5) 2023 CHF (1.4) 0.975 (0.1) 2023 CLP (1,229.2) 963.670 (0.1) 2023 COP (66,939.1) 4,774.820 0.2 2023 CZK (15.1) 24.798 (0.1) 2023 DKK 410.3 6.630 3.8 2023 EUR 29.8 1.033 (1.5) 2023 GBP (8.6) 1.183 (1.9) 2023 HUF (393.4) 418.490 (0.4) 2023 KRW (19,860.4) 1,066.255 (1.4) 2023 MXN (1,700.0) 19.965 (3.7) 2023 NOK (1,808.7) 10.110 (9.3) 2023 NZD (1.0) 0.596 (0.2) 2023 PHP 115.2 57.590 0.1 2023 PLN 0.7 4.706 (0.2) 2023 RON (24.3) 4.871 (0.3) 2023 SEK 130.0 10.624 1.4 2023 SGD 4.9 1.417 0.3 2024 EUR 6.0 1.070 0.4 2025 EUR 1.4 1.056 0.1 Total foreign currency exchange derivative contracts $ (14.1) The total fair value our foreign currency exchange derivative contracts was a net liability of $14.1 million and a net asset of $0.4 million as of December 31, 2022 and 2021, respectively.
Biggest changeSince the gains or losses on the forward and swap contracts are substantially offset by the gains or losses from remeasuring the hedged foreign-currency-denominated exposure, we do not believe that a hypothetical 10% change in exchange rates at December 31, 2023 would have a material impact on our income from operations. 36 Table of Contents As of December 31, 2023, the foreign currency denominated notional amounts and fair value in U.S. dollars of our exposures from our foreign currency exchange derivatives, were primarily related to the following (in millions, except weighted average contract price): Settlement Period Unit Notional Net Long/(Short) Weighted Average Contract Price Fair Value Amount 2024 AUD (41.8) 0.645 $ (1.6) 2024 CAD (94.9) 1.360 (1.7) 2024 CHF (3.5) 0.891 (0.2) 2024 CLP (1,410.0) 897.508 (0.2) 2024 COP (138,660.7) 4,235.151 (2.9) 2024 DKK 274.7 5.978 2.2 2024 EUR 152.9 1.084 61.9 2024 GBP (53.2) 1.243 (51.8) 2024 HUF (828.4) 362.114 (0.1) 2024 KRW (12,065.5) 1,332.613 (0.3) 2024 MXN 434.4 17.939 2.9 2024 NOK (844.0) 10.396 (4.6) 2024 NZD (4.5) 0.609 (0.1) 2024 PLN (5.7) 4.183 (0.1) 2024 RON (28.5) 4.675 (0.2) 2024 SEK 227.5 8.989 2.2 2024 SGD (3.8) 1.353 (0.1) 2024 ZAR 110.3 18.804 0.1 2026 EUR 7.0 1.123 0.1 Total foreign currency exchange derivative contracts $ 5.5 The total fair value our foreign currency exchange derivative contracts was a net asset of $5.5 million and a net liability of $14.1 million as of December 31, 2023 and 2022, respectively.
We utilize hedge accounting and formally designate certain of our derivative instruments as either cash flow or fair value hedges. Derivative instruments that are not designated are considered non-designated hedges and are designed to achieve an economic offset of the underlying price risk exposure.
We utilize hedge accounting and formally designate certain of our derivative instruments as either cash flow or fair value hedges. Derivative instruments that are not designated are designed to achieve an economic offset of the underlying price risk exposure.
Financial Statements and Supplementary Data The financial statements, together with the report thereon of PricewaterhouseCoopers LLP dated February 24, 2023, are set forth in Item 15 of this 2022 10‑K Report. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.
Financial Statements and Supplementary Data The financial statements, together with the report thereon of PricewaterhouseCoopers LLP dated February 23, 2024, are set forth in Item 15 of this 2023 10‑K Report. Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure None.
In addition, we use derivatives as economic hedges or to optimize the value of our fuel inventory to capitalize on anticipated market opportunities. 32 Table of Contents The notional and fair market values of our commodity-based derivative instrument positions were as follows (in millions, except weighted average contract price): As of December 31, Commodity Contracts (In millions of BBL) 2022 2021 Hedge Strategy Derivative Instrument Settlement Period Notional Net Long/ (Short) Weighted Average Contract Price Fair Value Amount Notional Net Long/ (Short) Weighted Average Contract Price Fair Value Amount Designated hedge Commodity contracts hedging inventory 2022 — $ — $ — (2.8) $ 92.26 $ (8.2) 2023 (0.7) 102.63 (3.3) — — — (3.3) (8.2) Non-designated hedge Commodity contracts 2022 — — — 4.6 4.63 10.1 2023 3.7 30.15 (179.2) 0.1 14.20 7.8 2024 (0.4) 20.95 14.9 0.1 12.27 6.5 2025 (0.3) 18.46 9.2 — 12.35 2.0 2026 0.1 17.21 1.5 — — — 2027 (0.6) 10.94 2.3 — — — Thereafter — 10.24 0.4 (0.2) 12.50 1.4 (150.8) 27.8 Total commodity derivative contracts $ (154.1) $ 19.6 Foreign Currency Exchange Risk We hedge our exposure to currency exchange rate changes, such as foreign-currency-denominated trade receivables, payables, or local currency tax payments.
In addition, we use derivatives as economic hedges or to optimize the value of our fuel inventory to capitalize on anticipated market opportunities. 35 Table of Contents The notional and fair market values of our commodity-based derivative instrument positions were as follows (in millions, except weighted average contract price): As of December 31, Commodity Contracts (In millions of BBL) 2023 2022 Hedge Strategy Derivative Instrument Settlement Period Notional Net Long/ (Short) Weighted Average Contract Price Fair Value Amount Notional Net Long/ (Short) Weighted Average Contract Price Fair Value Amount Designated hedge Commodity contracts hedging inventory 2023 — $ — $ — (0.7) $ 102.63 $ (3.3) 2024 (0.4) 94.97 3.8 — — — 2025 (0.1) 105.07 0.3 — — — 4.1 (3.3) Non-designated hedge Commodity contracts 2023 — — — 3.7 30.15 (179.2) 2024 0.8 4.93 92.6 (0.4) 20.95 14.9 2025 (0.8) 14.55 19.0 (0.3) 18.46 9.2 2026 (0.5) 16.36 4.1 0.1 17.21 1.5 2027 (0.2) 12.44 1.2 (0.6) 10.94 2.3 2028 (0.1) 14.61 0.9 — 10.24 0.4 Thereafter 0.1 14.26 0.5 — — — 118.5 (150.8) Total commodity derivative contracts $ 122.7 $ (154.1) Foreign Currency Exchange Risk We hedge our exposure to currency exchange rate changes, such as foreign-currency-denominated trade receivables, payables, or local currency tax payments.
The fair value of the interest rate swap contract was an asset of $24.7 million and an asset of $5.1 million as of December 31, 2022 and 2021, respectively. 34 Table of Contents The following table presents the contractual weighted average interest rates and expected cash flows by maturity dates (in millions, except weighted average interest rates): Expected Maturities as of December 31, 2022 Interest Rate Swap 2023 2024 2025 Fair Value Notional Value: $300 $ 24.7 Variable to Fixed (1) $ 12.9 $ 10.0 $ 1.9 Average pay rate 0.535 % 0.535 % 0.535 % Average receive rate 5.00 % 4.00 % 3.00 % (1) Represents discounted net cash flow receipts or (payments).
The fair value of the interest rate swap contract was an asset of $14.8 million and an asset of $24.7 million as of December 31, 2023 and 2022, respectively. 37 Table of Contents The following table presents the contractual weighted average interest rates and expected cash flows by maturity dates (in millions, except weighted average interest rates): Expected Maturities as of December 31, 2023 Interest Rate Swap 2024 2025 Fair Value Notional Value: $300 $ 14.8 Variable to Fixed (1) $ 12.7 $ 2.2 Average pay rate 0.435 % 0.435 % Average receive rate 4.67 % 3.51 % (1) Represents discounted net cash flow receipts or (payments).
As of December 31, 2022, the applicable margins for base rate loans and Eurodollar rate loans were 0.75% and 1.75%, respectively. As of December 31, 2022, we had $339.0 million in outstanding borrowings under our Credit Facility and a $488.4 million Term Loan.
As of December 31, 2023, the applicable margins for base rate loans and Eurodollar rate loans were 0.875% and 1.875%, respectively. As of December 31, 2023, we had no outstanding borrowings under our Credit Facility and a $476.4 million Term Loan.
A fluctuation of 100 bps in the interest rate would result in a $12.5 million change in interest expense with respect to these agreements during the next twelve months. Item 8.
A fluctuation of 100 bps in the interest rate as of December 31, 2023 would result in a $8.9 million change in interest expense during the next twelve months with respect to the outstanding amounts as of December 31, 2023 under these agreements.
We also have other agreements, such as our RPAs, with exposure to interest rate risk. See Note 2. Accounts Receivable and Note 7. Debt, Interest Income, Expense, and Other Finance Costs for additional information. We entered into a $300 million, one-month Eurodollar, floating-for-fixed interest rate non-amortizing swap with a maturity date in March 2025 (the "Swap").
Debt, Interest Income, Expense, and Other Finance Costs for additional information. We entered into a $300 million, one-month Eurodollar, floating-for-fixed interest rate non-amortizing swap with a maturity date in March 2025 (the "Swap"). The Swap agreement effectively locks in the floating interest rate we will pay for a portion of our Eurodollar rate loans at 0.435%.
As of December 31, 2022, the aggregate outstanding balance of our finance lease obligations was $15.4 million, which bear interest at annual rates ranging from 1.0% to 5.9%. Our remaining outstanding debt of $2.9 million, as of December 31, 2022, primarily relates to loans payable in varying amounts which bear interest at annual rates ranging from zero to 3.5%.
As of December 31, 2023, the aggregate outstanding balance of our finance lease obligations was $15.7 million, which bear interest at annual rates ranging from 1.0% to 6.7%. We also have other agreements, such as our RPAs, with exposure to interest rate risk. See Note 2. Accounts Receivable and Note 7.
Removed
The Swap agreement effectively locks in the floating interest rate we will pay for a portion of our Eurodollar rate loans at 0.535%.
Added
Equity Price Risk The fair value of our outstanding Convertible Notes is subject to market risk and other factors due to the convertible feature. The fair value of the Convertible Notes will generally increase as our common stock price increases and will generally decrease as our common stock price declines in value.
Added
The Convertible Notes are carried at amortized cost and their fair value is presented for disclosure purposes only. The interest and market value changes affect the fair value of our Convertible Notes, but do not impact our financial position, cash flows, or results of operations due to the fixed nature of the debt obligation.
Added
Upon conversion of the notes, we have the option to pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock in respect of the portion, if any, of our conversion obligation in excess of the aggregate principal amount of the notes being converted.
Added
If we elect to settle the portion, if any, of our conversion obligation in excess of the aggregate principal amount of the notes being converted in shares of our common stock or a combination of cash and shares of our common stock, any sales in the public market of our common stock issuable upon such conversion could adversely affect prevailing market prices of our common stock.
Added
In connection with the pricing of the notes, we have entered into convertible note hedge transactions with certain of the initial purchasers or affiliates thereof and certain other financial institutions. We also entered into warrant transactions.
Added
The convertible note hedge transactions are expected generally to reduce the potential dilution upon conversion of the notes and/or offset any cash payments we are required to make in excess of the principal amount of converted notes, as the case may be.
Added
However, the warrant transactions could separately have a dilutive effect on our common stock to the extent that the market price per share of our common stock exceeds the strike price of the warrants. See Note 7. Debt, Interest Income, Expense, and Other Finance Costs for additional information. Item 8.

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