UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, ~~2022~~2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to ___________

COMMISSION FILE NUMBER 001-09533

WORLD FUEL SERVICES CORPORATION

(Exact name of registrant as specified in its charter)

Florida

9800 N.W. 41st Street,

Miami,

Florida

33178

59-2459427

(State or other jurisdiction of
incorporation or organization)

(Address of Principal Executive Offices) (Zip Code)

(I.R.S. Employer
Identification No.)

Registrant’s telephone number, including area code:

(

305

)

428-8000

Securities registered pursuant to Section 12(b) of the Act

Title of each class

Trading Symbol (s)

Name of each exchange on which registered

Common Stock, , $0.01 par value

INT

New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated ~~filer"~~filer," "smaller reporting company," and ~~"smaller reporting~~"emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer þ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ

The registrant had a total of ~~63,015,413~~62,129,131 shares of common stock, par value $0.01 per share, issued and outstanding as of April ~~22, 2022.~~21, 2023.

TABLE OF CONTENTS


~~Part~~P ART I.	Financial Information

	Item 1.	Financial Statements (Unaudited)
		Condensed Consolidated Balance Sheets as of March 31, ~~2022~~2023 and December 31, ~~2021~~2022	1
		Condensed Consolidated Statements of Income and Comprehensive Income for the Three Months Ended March 31, ~~2022~~2023 and ~~2021~~2022	2
		Condensed Consolidated Statements of Shareholders' Equity for the Three Months Ended March 31, ~~2022~~2023 and ~~2021~~2022	3
		Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, ~~2022~~2023 and ~~2021~~2022	4
		Notes to the Condensed Consolidated Financial Statements	5

	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	2018

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2927

	Item 4.	Controls and Procedures	2927

~~Part~~P ART II.	Other Information

	Item 1.	Legal Proceedings	3128



	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3128

	Item 6.	Exhibits	3229

~~Signatures~~SIGNATURES			33

Part I — Financial Information

Item 1. Financial Statements

WORLD FUEL SERVICES CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited - In millions, except per share data)


		March 31, 2022		December 31, 2021			March 31, 2023		December 31, 2022
Assets:	Assets:					Assets:
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	266.2	$	652.2	Cash and cash equivalents	$	216.7	$	298.4
Accounts receivable, net of allowance for credit losses of $17.2 million and $26.1 million as of March 31, 2022 and December 31, 2021, respectively		3,510.2		2,355.3
Accounts receivable, net of allowance for credit losses of $14.5 million and $14.1 million as of March 31, 2023 and December 31, 2022, respectively						Accounts receivable, net of allowance for credit losses of $14.5 million and $14.1 million as of March 31, 2023 and December 31, 2022, respectively	2,997.2		3,294.1
Inventories	Inventories	680.5		477.9		Inventories	618.6		779.9
Prepaid expenses	Prepaid expenses	59.3		59.2		Prepaid expenses	81.4		83.6
Short-term derivative assets, net	Short-term derivative assets, net	293.8		169.2		Short-term derivative assets, net	244.0		302.1
Other current assets	Other current assets	215.3		305.9		Other current assets	455.9		479.9
Total current assets	Total current assets	5,025.3		4,019.7		Total current assets	4,613.8		5,238.1
Property and equipment, net	Property and equipment, net	473.9		348.9		Property and equipment, net	497.0		484.2
Goodwill	Goodwill	1,244.6		861.9		Goodwill	1,234.3		1,233.0
Identifiable intangible assets, net	Identifiable intangible assets, net	369.5		189.1		Identifiable intangible assets, net	327.0		336.2
Other non-current assets	Other non-current assets	854.7		522.8		Other non-current assets	813.7		873.2
Total assets	Total assets	$	7,968.0	$	5,942.4	Total assets	$	7,485.8	$	8,164.6
Liabilities:	Liabilities:					Liabilities:
Current liabilities:	Current liabilities:					Current liabilities:
Current maturities of long-term debt	Current maturities of long-term debt	$	15.0	$	30.6	Current maturities of long-term debt	$	18.2	$	15.8
Accounts payable	Accounts payable	3,447.5		2,399.6		Accounts payable	3,213.2		3,529.5
Short-term derivative liabilities, net	Short-term derivative liabilities, net	317.1		168.4		Short-term derivative liabilities, net	252.8		325.2
Customer deposits		234.9		205.5
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	398.0		292.7		Accrued expenses and other current liabilities	669.2		738.2
Total current liabilities	Total current liabilities	4,412.5		3,096.7		Total current liabilities	4,153.5		4,608.6
Long-term debt	Long-term debt	869.1		478.1		Long-term debt	708.4		829.9
Non-current income tax liabilities, net		208.4		213.9
Other long-term liabilities	Other long-term liabilities	532.5		236.8		Other long-term liabilities	610.0		735.3
Total liabilities	Total liabilities	6,022.6		4,025.6		Total liabilities	5,471.8		6,173.8

Commitments and contingencies						Commitments and contingencies
Equity:	Equity:					Equity:
World Fuel shareholders' equity:	World Fuel shareholders' equity:					World Fuel shareholders' equity:
Preferred stock, $1.00 par value; 0.1 shares authorized, none issued	Preferred stock, $1.00 par value; 0.1 shares authorized, none issued	—		—		Preferred stock, $1.00 par value; 0.1 shares authorized, none issued	—		—
Common stock, $0.01 par value; 100.0 shares authorized, 63.0 and 61.7 issued and outstanding as of March 31, 2022 and December 31, 2021, respectively		0.6		0.6
Common stock, $0.01 par value; 100.0 shares authorized, 62.1 and 62.0 issued and outstanding as of March 31, 2023 and December 31, 2022, respectively						Common stock, $0.01 par value; 100.0 shares authorized, 62.1 and 62.0 issued and outstanding as of March 31, 2023 and December 31, 2022, respectively	0.6		0.6
Capital in excess of par value	Capital in excess of par value	206.7		168.1		Capital in excess of par value	188.2		182.4
Retained earnings	Retained earnings	1,899.4		1,880.6		Retained earnings	1,976.7		1,962.5
Accumulated other comprehensive income (loss)	Accumulated other comprehensive income (loss)	(165.4)		(136.7)		Accumulated other comprehensive income (loss)	(157.1)		(160.6)
Total World Fuel shareholders' equity	Total World Fuel shareholders' equity	1,941.4		1,912.7		Total World Fuel shareholders' equity	2,008.3		1,984.9
Noncontrolling interest	Noncontrolling interest	4.1		4.1		Noncontrolling interest	5.7		5.9
Total equity	Total equity	1,945.5		1,916.8		Total equity	2,014.0		1,990.7
Total liabilities and equity	Total liabilities and equity	$	7,968.0	$	5,942.4	Total liabilities and equity	$	7,485.8	$	8,164.6

The accompanying Notes are an integral part of these unaudited Condensed Consolidated Financial Statements.

WORLD FUEL SERVICES CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND

COMPREHENSIVE INCOME

(Unaudited – In millions, except per share data)


		For the Three Months Ended March 31,				For the Three Months Ended March 31,
		2022		2021				2023		2022
Revenue	Revenue	$	12,382.0	$	5,957.9		Revenue	$	12,481.6	$	12,382.0
Cost of revenue	Cost of revenue	12,151.1		5,766.3			Cost of revenue	12,218.9		12,151.1
Gross profit	Gross profit	230.9		191.6			Gross profit	262.7		230.9
Operating expenses:	Operating expenses:						Operating expenses:
Compensation and employee benefits	Compensation and employee benefits	114.9		92.5			Compensation and employee benefits	119.2		114.9
General and administrative	General and administrative	74.7		59.4			General and administrative	79.0		74.7

Restructuring charges		—		2.1

Total operating expenses	Total operating expenses	189.6		154.0			Total operating expenses	198.2		189.6
Income from operations	Income from operations	41.3		37.6			Income from operations	64.6		41.3
Non-operating income (expenses), net:	Non-operating income (expenses), net:						Non-operating income (expenses), net:
Interest expense and other financing costs, net	Interest expense and other financing costs, net	(14.3)		(8.7)			Interest expense and other financing costs, net	(34.3)		(14.3)
Other income (expense), net	Other income (expense), net	5.7		(1.2)			Other income (expense), net	(3.5)		5.7
Total non-operating income (expense), net	Total non-operating income (expense), net	(8.7)		(10.0)			Total non-operating income (expense), net	(37.8)		(8.7)
Income (loss) before income taxes	Income (loss) before income taxes	32.6		27.6			Income (loss) before income taxes	26.7		32.6
Provision for income taxes	Provision for income taxes	6.4		8.8			Provision for income taxes	4.2		6.4
Net income (loss) including noncontrolling interest	Net income (loss) including noncontrolling interest	26.3		18.8			Net income (loss) including noncontrolling interest	22.6		26.3
Net income (loss) attributable to noncontrolling interest	Net income (loss) attributable to noncontrolling interest	(0.1)		—			Net income (loss) attributable to noncontrolling interest	(0.2)		(0.1)
Net income (loss) attributable to World Fuel	Net income (loss) attributable to World Fuel	$	26.3	$	18.9		Net income (loss) attributable to World Fuel	$	22.8	$	26.3
Basic earnings (loss) per common share	Basic earnings (loss) per common share	$	0.42	$	0.30		Basic earnings (loss) per common share	$	0.37	$	0.42
Basic weighted average common shares	Basic weighted average common shares	63.4		63.0			Basic weighted average common shares	62.2		63.4
Diluted earnings (loss) per common share	Diluted earnings (loss) per common share	$	0.41	$	0.30		Diluted earnings (loss) per common share	$	0.36	$	0.41
Diluted weighted average common shares	Diluted weighted average common shares	63.7		63.6			Diluted weighted average common shares	62.8		63.7
Comprehensive income:	Comprehensive income:						Comprehensive income:
Net income (loss) including noncontrolling interest	Net income (loss) including noncontrolling interest	$	26.3	$	18.8		Net income (loss) including noncontrolling interest	$	22.6	$	26.3
Other comprehensive income (loss):	Other comprehensive income (loss):						Other comprehensive income (loss):
Foreign currency translation adjustments	Foreign currency translation adjustments	(9.4)		(4.0)			Foreign currency translation adjustments	5.7		(9.4)
Cash flow hedges, net of income tax expense (benefit) of ($7.0) and $5.6 for the three months ended March 31, 2022 and 2021, respectively		(19.3)		16.4
Cash flow hedges, net of income tax expense (benefit) of ($0.7) and ($7.0) for the three months ended March 31, 2023 and 2022, respectively							Cash flow hedges, net of income tax expense (benefit) of ($0.7) and ($7.0) for the three months ended March 31, 2023 and 2022, respectively	(2.2)		(19.3)
Total other comprehensive income (loss)	Total other comprehensive income (loss)	(28.7)		12.4			Total other comprehensive income (loss)	3.5		(28.7)
Comprehensive income (loss) including noncontrolling interest	Comprehensive income (loss) including noncontrolling interest	(2.4)		31.2			Comprehensive income (loss) including noncontrolling interest	26.1		(2.4)
Comprehensive income (loss) attributable to noncontrolling interest	Comprehensive income (loss) attributable to noncontrolling interest	(0.1)		—			Comprehensive income (loss) attributable to noncontrolling interest	(0.2)		(0.1)
Comprehensive income (loss) attributable to World Fuel	Comprehensive income (loss) attributable to World Fuel	$	(2.3)	$	31.2		Comprehensive income (loss) attributable to World Fuel	$	26.3	$	(2.3)

The accompanying Notes are an integral part of these unaudited Condensed Consolidated Financial Statements.

WORLD FUEL SERVICES CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(Unaudited - In millions)


		Common Stock			Capital in Excess of Par Value				Retained Earnings		Accumulated Other Comprehensive Income (Loss)					Total World Fuel Shareholders' Equity			Noncontrolling Interest Equity				Total Equity			Common Stock				Capital in Excess of Par Value				Retained Earnings				Accumulated Other Comprehensive Income (Loss)				Total World Fuel Shareholders' Equity				Noncontrolling Interest Equity				Total Equity
		Shares	Amount												Shares						Amount
Balance as of December 31, 2021		61.7	$	0.6			$	168.1					$	1,880.6				$	(136.7)			$	1,912.7			$	4.1	$	1,916.8
Balance as of December 31, 2022																									Balance as of December 31, 2022	62.0		$	0.6			$	182.4			$	1,962.5			$	(160.6)			$	1,984.9			$	5.9			$	1,990.7
Net income (loss)	Net income (loss)	—	—		—				26.3		—					26.3			(0.1)				26.3		Net income (loss)	—		—		—				22.8				—				22.8				(0.2)				22.6

Cash dividends declared	Cash dividends declared	—	—		—				(7.6)		—					(7.6)			—				(7.6)		Cash dividends declared	—		—		—				(8.6)				—				(8.6)				—				(8.6)
Amortization of share-based payment awards	Amortization of share-based payment awards	—	—		3.7				—		—					3.7			—				3.7		Amortization of share-based payment awards	—		—		6.1				—				—				6.1				—				6.1
Issuance (cancellation) of common stock related to share-based payment awards	Issuance (cancellation) of common stock related to share-based payment awards	0.1	—		—				—		—					—			—				—		Issuance (cancellation) of common stock related to share-based payment awards	0.1		—		—				—				—				—				—				—
Issuance of common stock for acquisition of a business		1.8	—		50.0				—		—					50.0			—				50.0

Purchases of common stock tendered by employees to satisfy the required withholding taxes related to share-based payment awards	Purchases of common stock tendered by employees to satisfy the required withholding taxes related to share-based payment awards	—	—		(1.3)				—		—					(1.3)			—				(1.3)		Purchases of common stock tendered by employees to satisfy the required withholding taxes related to share-based payment awards	—		—		(0.3)				—				—				(0.3)				—				(0.3)
Purchases of common stock		(0.5)	—		(13.7)				—		—					(13.7)			—				(13.7)

Other comprehensive income (loss)	Other comprehensive income (loss)	—	—		—				—		(28.7)					(28.7)			—				(28.7)		Other comprehensive income (loss)	—		—		—				—				3.5				3.5				—				3.5

Balance as of March 31, 2022		63.0	$	0.6	$	206.7			$	1,899.4	$	(165.4)				$	1,941.4		$	4.1			$	1,945.5
Balance as of March 31, 2023																									Balance as of March 31, 2023	62.1		$	0.6	$	188.2			$	1,976.7			$	(157.1)			$	2,008.3			$	5.7			$	2,014.0


		Common Stock			Capital in Excess of Par Value				Retained Earnings		Accumulated Other Comprehensive Income (Loss)					Total World Fuel Shareholders' Equity			Noncontrolling Interest Equity				Total Equity			Common Stock				Capital in Excess of Par Value				Retained Earnings				Accumulated Other Comprehensive Income (Loss)				Total World Fuel Shareholders' Equity				Noncontrolling Interest Equity				Total Equity
		Shares	Amount												Shares						Amount
Balance as of December 31, 2020		62.9	$	0.6			$	204.6					$	1,836.7				$	(132.6)			$	1,909.3			$	3.6	$	1,912.9
Balance as of December 31, 2021																									Balance as of December 31, 2021	61.7		$	0.6			$	168.1			$	1,880.6			$	(136.7)			$	1,912.7			$	4.1			$	1,916.8
Net income (loss)																									Net income (loss)	—		—		—				26.3				—				26.3				(0.1)				26.3

Net income (loss)		—	—		—				18.9		—					18.9			—				18.8
Cash dividends declared	Cash dividends declared	—	—		—				(7.5)		—					(7.5)			—				(7.5)		Cash dividends declared	—		—		—				(7.6)				—				(7.6)				—				(7.6)
Amortization of share-based payment awards	Amortization of share-based payment awards	—	—		8.7				—		—					8.7			—				8.7		Amortization of share-based payment awards	—		—		3.7				—				—				3.7				—				3.7
Issuance (cancellation) of common stock related to share-based payment awards	Issuance (cancellation) of common stock related to share-based payment awards	0.1	—		—				—		—					—			—				—		Issuance (cancellation) of common stock related to share-based payment awards	0.1		—		—				—				—				—				—				—
Issuance of common stock for acquisition of a business																									Issuance of common stock for acquisition of a business	1.8		—		50.0				—				—				50.0				—				50.0
Purchases of common stock tendered by employees to satisfy the required withholding taxes related to share-based payment awards	Purchases of common stock tendered by employees to satisfy the required withholding taxes related to share-based payment awards	—	—		(2.4)				—		—					(2.4)			—				(2.4)		Purchases of common stock tendered by employees to satisfy the required withholding taxes related to share-based payment awards	—		—		(1.3)				—				—				(1.3)				—				(1.3)
Purchases of common stock																									Purchases of common stock	(0.5)		—		(13.7)				—				—				(13.7)				—				(13.7)
Other comprehensive income (loss)																									Other comprehensive income (loss)	—		—		—				—				(28.7)				(28.7)				—				(28.7)

Other comprehensive income (loss)		—	—		—				—		12.4					12.4			—				12.4
Other		—	—		—				0.2		—					0.2			—				0.2
Balance as of March 31, 2021		63.0	$	0.6	$	210.8			$	1,848.3	$	(120.3)				$	1,939.5		$	3.5			$	1,943.0
Balance as of March 31, 2022																									Balance as of March 31, 2022	63.0		$	0.6	$	206.7			$	1,899.4			$	(165.4)			$	1,941.4			$	4.1			$	1,945.5

The accompanying Notes are an integral part of these unaudited Condensed Consolidated Financial Statements.

WORLD FUEL SERVICES CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited - In millions)
For the Three Months Ended March 31,
2022 2021
Cash flows from operating activities:
Net income (loss) including noncontrolling interest $ 26.3 $ 18.8
Adjustments to reconcile net income including noncontrolling interest to net cash provided by operating activities:
Depreciation and amortization 27.2 19.8
Provision for credit losses 2.0 3.6
Share-based payment award compensation costs 3.7 8.7
Deferred income tax expense (benefit) (4.0) (6.8)
Foreign currency (gains) losses, net (3.7) (12.9)
Other (16.9) (5.5)
Changes in assets and liabilities, net of acquisitions and divestitures:
Accounts receivable, net (1,051.3) (438.8)
Inventories (140.6) 11.0
Prepaid expenses 3.1 (3.0)
Short-term derivative assets, net (210.6) 77.3
Other current assets 72.3 69.3
Cash collateral with counterparties 56.3 (4.4)
Other non-current assets (108.9) (4.0)
Accounts payable 996.7 394.3
Customer deposits 31.5 (22.8)
Accrued expenses and other current liabilities 158.3 0.8
Non-current income tax, net and other long-term liabilities 86.6 (1.8)
Total adjustments (98.3) 84.6
Net cash provided by (used in) operating activities (72.0) 103.4
Cash flows from investing activities:
Acquisition of business, net of cash acquired (639.4) —
Capital expenditures (16.7) (2.0)
Other investing activities, net (1.3) (0.6)
Net cash provided by (used in) investing activities (657.3) (2.7)
Cash flows from financing activities:
Borrowings of debt 1,745.8 0.2
Repayments of debt (1,369.7) (4.5)
Dividends paid on common stock (7.4) (6.1)
Repurchases of common stock (13.7) —
Other financing activities, net (11.3) (10.4)
Net cash provided by (used in) financing activities 343.7 (20.8)
Effect of exchange rate changes on cash and cash equivalents (0.3) (3.5)
Net increase (decrease) in cash and cash equivalents (386.0) 76.5
Cash and cash equivalents, as of the beginning of the period 652.2 658.8
Cash and cash equivalents, as of the end of the period $ 266.2 $ 735.3

~~Supplemental Schedule of Noncash Investing and Financing Activities:~~

~~Cash dividends declared, but not yet paid, were $7.6 million and $7.5 million for the three months ended March 31, 2022 and 2021, respectively.~~


	For the Three Months Ended March 31,
	2023		2022
Cash flows from operating activities:
Net income (loss) including noncontrolling interest	$	22.6	$	26.3
Adjustments to reconcile net income including noncontrolling interest to net cash provided by operating activities:
Unrealized (gain) loss on derivatives	(94.1)		(15.5)
Depreciation and amortization	25.8		27.2
Provision for credit losses	0.3		2.0
Share-based payment award compensation costs	6.1		3.7
Deferred income tax expense (benefit)	(2.8)		(4.0)

Unrealized foreign currency (gains) losses, net	(18.8)		(3.7)

Other	(0.1)		(1.4)
Changes in assets and liabilities, net of acquisitions and divestitures:
Accounts receivable, net	295.7		(1,051.3)
Inventories	161.4		(140.6)
Prepaid expenses	2.0		3.1
Short-term derivative assets, net	163.2		(210.6)
Other current assets	8.7		72.3
Cash collateral with counterparties	96.9		56.3
Other non-current assets	56.0		(108.9)
Accounts payable	(322.3)		996.7
Short-term derivative liabilities, net	(164.9)		168.0
Accrued expenses and other current liabilities	(53.9)		21.8
Other long-term liabilities	(38.8)		86.6
Net cash provided by (used in) operating activities	143.0		(72.0)
Cash flows from investing activities:
Acquisition of business, net of cash acquired	—		(639.4)

Capital expenditures	(18.8)		(16.7)
Other investing activities, net	(4.7)		(1.3)
Net cash provided by (used in) investing activities	(23.5)		(657.3)
Cash flows from financing activities:
Borrowings of debt	2,101.0		1,745.8
Repayments of debt	(2,224.1)		(1,369.7)
Dividends paid on common stock	(8.6)		(7.4)
Repurchases of common stock	—		(13.7)
Payments of deferred consideration for acquisitions	(60.8)		(10.0)
Other financing activities, net	(0.3)		(1.3)
Net cash provided by (used in) financing activities	(192.8)		343.7
Effect of exchange rate changes on cash and cash equivalents	(8.3)		(0.3)
Net increase (decrease) in cash and cash equivalents	(81.7)		(386.0)
Cash and cash equivalents, as of the beginning of the period	298.4		652.2
Cash and cash equivalents, as of the end of the period	$	216.7	$	266.2

The accompanying Notes are an integral part of these unaudited Condensed Consolidated Financial Statements.

WORLD FUEL SERVICES CORPORATION NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Basis of Presentation, New Accounting Standards, and Significant Accounting Policies

General

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 Quarterly Report on Form 10-Q ("10-Q Report") as "World Fuel," "we," "our" and "us."

We are a leading global fuel services company, principally engaged in the distribution of fuel and related products and services in the aviation, land and marine transportation industries. In recent years, we have expanded our land product and service offerings to include energy advisory services and supply fulfillment for natural gas and power to commercial, industrial and government customers. Our intention is to become a leading global energy management company, offering a ~~full~~broad suite of energy advisory, management and fulfillment services, digital and other technology ~~solutions, payment management~~ solutions, as well as sustainability products and services across the energy product spectrum. We ~~will continue to focus on enhancing the portfolio of~~are principally involved in providing energy procurement and related products and services ~~we provide based on changes~~to commercial and industrial customers in ~~customer demand, including increasing~~the aviation, land, and marine transportation industries. We have also expanded our product and service offerings to include energy advisory services, sustainability ~~offerings~~ and renewable energy solutions, ~~in light of the continued global focus on climate change~~as well as supply fulfillment for natural gas and ~~the related impacts.~~power.

The Condensed Consolidated Financial Statements and related Notes include our parent company and all subsidiaries where we exercise control, and include the operations of acquired businesses after the completion of their acquisition. The decision of whether or not to consolidate an entity requires consideration of majority voting interests, as well as effective economic or other control over the entity. The Condensed Consolidated Financial Statements are prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"), the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by ~~generally accepted accounting principles~~U.S. GAAP for complete financial statements. However, except as disclosed herein, there has been no material change in the information disclosed in the Notes included in our ~~2021~~2022 Annual Report on Form 10-K ("~~2021~~2022 10-K Report"). All intercompany transactions among our businesses have been eliminated.

Revenues, expenses, assets and liabilities can vary during each quarter of the year. Therefore, the results and trends in these interim financial statements may not be representative of those for the full year. In our opinion, all adjustments necessary for a fair statement of the financial statements, which are of a normal and recurring nature, have been made for the interim periods reported. The information included in this 10-Q Report should be read in conjunction with the Consolidated Financial Statements and accompanying Notes included in our ~~2021~~2022 10-K Report. Certain amounts in the Condensed Consolidated Financial Statements and accompanying Notes may not add due to rounding; however, all percentages have been calculated using unrounded amounts. Certain prior period amounts have been reclassified to conform to the current presentation.

~~COVID-19~~

Throughout 2020 and 2021, the COVID-19 pandemic had a significant impact on the global economy as a whole, and the transportation industries in particular. Many of our customers in these industries, especially commercial airlines, have experienced a substantial decline in business activity arising from the various measures enacted by governments around the world to contain the spread of the virus. While travel and economic activity has begun to improve in various regions, activity in certain parts of the world continues to be negatively impacted by travel restrictions and other quarantine mandates.

New Accounting Standards

Adoption of New Accounting Standards

~~During~~Disclosure of Supplier Finance Program Obligations. In September 2022, ~~there have been no accounting standards that, upon~~Accounting Standards Update ("ASU") 2022-04 was issued to require the buyer in a supplier finance program to disclose the key terms of the program, outstanding confirmed amounts as of the end of the period, a rollforward of such amounts during each annual period, and a description of where in the financial statements outstanding amounts are presented. The amendments do not affect the recognition, measurement or financial statement presentation of supplier finance program obligations. The amendments are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The amendments should be applied retrospectively to each period in which a balance sheet is presented, except for the rollforward, which should be applied prospectively. Early adoption ~~had a material impact~~was permitted. The Company adopted ASU 2022-04 in the first quarter of 2023 and has included all relevant disclosures below.

Supplier Finance Programs

Under various supplier finance programs, we agree to pay counterparties engaged as paying agents the stated amount of confirmed invoices from our designated suppliers on the ~~Company's unaudited~~original maturity date of the invoices. Under certain of these arrangements, we may also pay fees for the supplier finance platform and related support.

Outstanding obligations confirmed under our supplier finance programs were $194.1 million and $246.8 million as of March 31, 2023 and December 31, 2022, respectively, and are included in Accounts payable within our Condensed Consolidated ~~Financial Statements or processes.~~Balance Sheets.

Accounting Standards Issued but Not Yet Adopted

There ~~have been~~are no recently issued accounting standards not yet adopted by us ~~which~~that are expected, upon adoption, to have a material impact on the Company’s Consolidated Financial Statements or processes.

Significant Accounting Policies

There have been no significant changes in the Company's accounting policies from those disclosed in our ~~2021~~2022 10-K Report. The significant accounting policies we use for quarterly financial reporting are disclosed in Note 1. Basis of Presentation, New Accounting Standards, and Significant Accounting Policies of the accompanying Notes to the Consolidated Financial Statements included in our ~~2021~~2022 10-K Report.

2. Accounts Receivable

Accounts Receivable and Allowance for Credit Losses

When we extend credit on an unsecured basis, our exposure to credit losses depends on the financial condition of our customers and ~~other~~ macroeconomic factors beyond our control, such as global economic conditions or adverse impacts in the industries we serve, changes in oil prices and political instability.

We actively monitor and manage our credit exposure and work to respond to both changes in our customers' financial conditions orand macroeconomic events. Based on the ongoing credit evaluations of our customers, we adjust credit limits based upon payment history and our customers' current creditworthiness. However, because we extend credit on an unsecured basis to most of our customers, there is a possibility that any accounts receivable not collected may ultimately need to be written off.

We had accounts receivable, net, of ~~$3.5~~$3.0 billion and ~~$2.4~~$3.3 billion and an allowance for expected credit losses, primarily related to accounts receivable, of ~~$21.0~~$16.6 million and ~~$29.8~~$17.3 million, as of March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively. Changes to the expected credit loss provision during the three months ended March 31, ~~2022~~2023 include global economic outlook considerations as a result of the Company's assessment of reasonable and supportable forward-looking information, including the continued global recovery from the pandemic. Write-offs of uncollectible receivables during the three months ended March 31, 2022 resulted from pre-existing financial difficulties experienced by certain customers.information. Based on an aging analysis as of March 31, ~~2022, 96%~~2023, 91% of our accounts receivable were outstanding less than 60 days.

The following table sets forth activities in our allowance for expected credit losses (in millions):


		For the Three Months Ended March 31,					For the Three Months Ended March 31,
		2022		2021			2023		2022
Balance as of January 1,	Balance as of January 1,	$	29.8	$	57.3	Balance as of January 1,	$	17.3	$	29.8
Charges to allowance for credit losses	Charges to allowance for credit losses	2.0		3.6		Charges to allowance for credit losses	0.3		2.0
Write-off of uncollectible receivables	Write-off of uncollectible receivables	(11.3)		(13.8)		Write-off of uncollectible receivables	(1.1)		(11.3)
Recoveries of credit losses	Recoveries of credit losses	0.3		0.4		Recoveries of credit losses	0.1		0.3
Translation adjustments	Translation adjustments	0.2		—		Translation adjustments	—		0.2
Balance as of March 31,	Balance as of March 31,	$	21.0	$	47.5	Balance as of March 31,	$	16.6	$	21.0

Receivable ~~Sale Programs~~Purchase Agreements

We have receivable purchase agreements ("RPAs") that allow for the sale of our qualifying accounts receivable in exchange for cash consideration equal to the total balance, less a discount margin, depending on the outstanding accounts receivable at any given time. Accounts receivable sold under the RPAs are accounted for as sales and excluded from Accounts receivable, net of allowance for credit losses on the accompanying Condensed Consolidated Balance Sheets. Fees paid under the RPAs are recorded within Interest expense and other financing costs, net on the Condensed Consolidated Statements of Income and Comprehensive Income.

During the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, we sold receivables under the RPAs with an aggregate face value of ~~$2.6~~$3.0 billion and ~~$2.0~~$2.6 billion, respectively, and ~~paid~~recognized fees of ~~$5.5~~$11.7 million and ~~$4.4~~$5.5 million, respectively.

3. Acquisitions

2022 Acquisition

~~On October 28, 2021,~~During the first quarter of 2022, we ~~entered into a definitive agreement (the "Purchase Agreement") to acquire all~~completed the acquisition of ~~the outstanding equity interest in~~ Flyers Energy Group, LLC ("Flyers"). Flyers' operations include transportation, commercial fleet fueling, lubricants distribution, and the supply of wholesale, branded and renewable fuels.

The acquisition closed on January 3, 2022 for total estimated consideration of $792.2 million, subject to customary adjustments relating to net working capital, indebtedness and transaction expenses. At closing, $642.7 million, inclusive of $19.7 million for estimated net working capital adjustments, was paid in cash and, at the election of the Company, $50.0 million was satisfied through the delivery of 1,768,034 shares of the Company's common stock at a price of $28.28 per share. The remaining $100.0 million was held back to satisfy potential indemnification and other obligations of the seller, with one-half to be released on the first and second anniversary of the closing of the acquisition, in each case subject to reduction in respect to amounts claimed under the Purchase Agreement. The total purchase ~~consideration also includes a receivable~~price of ~~$0.5~~$795.0 million ~~from~~included deferred payments totaling $100.0 million. In January 2023, $50 million was paid to the seller ~~for~~and the ~~estimated working capital adjustment.~~

~~The acquisition was accounted for~~remaining $50 million outstanding as ~~a business combination and is reported in the land segment. We are in the process~~ of obtaining information to identify and measure all assets acquired and liabilities assumed. The following preliminary purchase price allocation was estimated based on the information obtained to date andMarch 31, 2023 is expected to be ~~completed~~settled in 2022. The following table summarizes the estimated fair value of the aggregate consideration, and the preliminary allocation of the purchase price to the fair value of the assets acquired and liabilities assumed (in millions):


	~~Total~~
~~Consideration:~~
~~Cash paid~~	$	~~642.7~~
~~Estimated working capital adjustment receivable from seller~~	~~(0.5)~~
~~Common stock issued to seller~~	~~50.0~~
~~Amount due to sellers~~	~~100.0~~
~~Total fair value of consideration~~	$	~~792.2~~

~~Assets acquired and liabilities assumed:~~
~~Cash~~	$	~~3.3~~
~~Accounts receivable~~	~~109.2~~
~~Inventory~~	~~50.9~~
~~Property, plant and equipment~~	~~126.6~~
~~Identifiable intangible assets subject to amortization~~ ~~(1)~~	~~162.9~~
~~Identifiable intangible assets not subject to amortization~~ ~~(2)~~	~~29.3~~
~~Accounts payable~~	~~(38.0)~~
~~Other assets and liabilities, net~~ ~~(3)~~	~~(39.0)~~
~~Net identifiable assets acquired~~	~~405.1~~
~~Goodwill~~ ~~(4)~~	~~387.1~~
~~Net assets acquired~~	$	~~792.2~~

~~(1)~~Identifiable intangible assets subject to amortization primarily consist of customer and network relationships and other identifiable assets which will be amortized over a weighted average life of 11.6 years.

~~(2)Identifiable intangible assets not subject to amortization include trademarks and trade names acquired.~~

~~(3)Includes the recognition of right of use assets of $45.0 million and lease liabilities of $46.0 million.~~

~~(4)~~Goodwill is attributable primarily to the expected synergies and other benefits that we believe will result from combining the acquired operations with the operations of our land segment. We anticipate that all of the goodwill assigned to the land segment will be deductible for tax purposes.

Total revenue and income before income taxes of Flyers included in the Company's Condensed Consolidated Statement of Income for the period from the date of acquisition through March 31, 2022 were $752.5 million and $18.1 million, respectively.

~~The following presents unaudited pro forma combined financial information of the Company for the three months ended March 31, 2021 as if the acquisition of Flyers had been completed on~~ January ~~1, 2021 (in millions, except per share data):~~


~~(unaudited)~~	~~Three Months Ended March 31, 2021~~
~~Revenue~~	$	~~6,335.6~~
~~Net income attributable to World Fuel~~	$	~~20.2~~

The unaudited pro forma combined financial information was based on the historical financial information of World Fuel and Flyers and includes (i) incremental amortization expense to be incurred based on the preliminary fair values of the identifiable intangible assets acquired; (ii) additional interest expense associated with the incremental borrowings under our Credit Facility to finance the acquisition; (iii) nonrecurring transaction costs recognized in connection with the transaction; and (iv) the tax effect of the pro forma adjustments as well as the recognition of income tax expense associated with Flyers' historical statements, calculated using statutory tax rates, as Flyers was comprised of limited liability companies not subject to federal and state income taxes prior to the acquisition. The unaudited pro forma combined financial information does not necessarily reflect what the combined company's financial condition or results of operations would have been had the transaction and the related financing occurred on the dates indicated. The unaudited pro forma financial information also may not be useful in predicting the future financial condition and results of operations of the combined company following the transaction. In addition, the unaudited pro forma combined financial information does not give effect to any cost savings, operating synergies or revenue synergies that may result from the transaction, or the costs to achieve any such synergies.

~~2021 Acquisition~~

On October 1, 2021, we completed the acquisition of a liquid fuel business which services business and residential customers for a total purchase price of $41.4 million. The transaction was accounted for as a business combination and is reported in our land segment.2024.

4. ~~Goodwill~~

~~The following table provides information regarding changes in goodwill during the three months ended March 31, 2022 and 2021 (in millions):~~

Aviation
Segment Land
Segment Total
As of December 31, 2021 $ 400.1 $ 461.8 $ 861.9
2022 acquisition (1)
— 387.1 387.1
Foreign currency translation of non-USD functional currency subsidiary goodwill (0.8) (3.5) (4.3)
As of March 31, 2022 $ 399.3 $ 845.4 $ 1,244.6

~~(1)See Note 3. Acquisitions for additional information.~~

5. Derivative Instruments

We are exposed to a variety of risks including but not limited to, changes in the prices of commodities that we buy or sell, changes in foreign currency exchange rates, changes in interest rates, and the creditworthiness of each of our counterparties. While we attempt to mitigate these fluctuations through hedging, such hedges may not be fully effective.

Our risk management program includes the following types of derivative instruments:

Fair Value Hedges. Derivative contracts we hold to hedge the risk of changes in the price of our inventory.

Cash Flow Hedges. Derivative contracts we execute to mitigate the risk of price and interest rate volatility in forecasted transactions.

Non-designated Derivatives. Derivatives we primarily transact to mitigate the risk of market price fluctuations in swaps or futures contracts, as well as certain forward fixed price purchase and sale contracts to hedge the risk of currency rate fluctuations and for portfolio optimization.

~~With the exception of the interest rate swap agreement, which matures in March 2025, the majority of our derivative contracts are expected to settle within the next year.~~ The following table summarizes the gross notional values of our derivative contracts used for risk management purposes (in millions):

Unit

March 31, ~~2022~~2023

Commodity contracts

Long

BBL

~~55.2~~85.9

Short

BBL

~~(51.6)~~(84.8)

Foreign currency exchange contracts

Sell U.S. dollar, buy other currencies

USD

~~(301.9)~~(718.8)

Buy U.S. dollar, sell other currencies

USD

~~536.9~~862.2

Interest rate contracts

Interest rate swap

USD

300.0

While the majority of our foreign currency exchange contracts and the volume related to our commodities contracts are expected to settle within the next year, our interest rate swap agreement matures in March 2025.

Assets and Liabilities

The following table presents the gross fair value of our derivative instruments and their locations on the Condensed Consolidated Balance Sheets (in millions):


			Gross Derivative Assets				Gross Derivative Liabilities
		Condensed Consolidated Balance Sheets Location	March 31,		December 31,		March 31,		December 31,			Condensed Consolidated Balance Sheets Location	Gross Derivative Assets				Gross Derivative Liabilities
Derivative Instruments	Derivative Instruments		2022		2021		2022		2021		Derivative Instruments		March 31, 2023		December 31, 2022		March 31, 2023		December 31, 2022
Derivatives designated as hedging instruments	Derivatives designated as hedging instruments										Derivatives designated as hedging instruments
Commodity contracts	Commodity contracts	Short-term derivative assets, net	$	13.6	$	1.8	$	12.4	$	9.7	Commodity contracts	Short-term derivative assets, net	$	1.4	$	—	$	—	$	—

		Short-term derivative liabilities, net	0.4		0.1		1.4		0.4			Short-term derivative liabilities, net	1.2		3.4		3.3		6.7

Interest rate contracts	Interest rate contracts	Short-term derivative assets, net	3.7		—		—		—		Interest rate contracts	Short-term derivative assets, net	12.4		12.9		—		—
		Other non-current assets	13.3		5.4		—		—			Other non-current assets	8.4		11.9		—		—
		Short-term derivative liabilities, net	—		—		—		0.3

Total derivatives designated as hedging instruments	Total derivatives designated as hedging instruments		31.1		7.3		13.8		10.4		Total derivatives designated as hedging instruments		23.4		28.2		3.3		6.7

Derivatives not designated as hedging instruments	Derivatives not designated as hedging instruments										Derivatives not designated as hedging instruments
Commodity contracts	Commodity contracts	Short-term derivative assets, net	880.7		516.3		542.6		337.5		Commodity contracts	Short-term derivative assets, net	454.5		376.4		182.9		42.3
		Other non-current assets	270.8		112.2		116.2		27.6			Other non-current assets	238.4		293.3		64.6		66.9
		Short-term derivative liabilities, net	211.6		117.6		529.8		286.6			Short-term derivative liabilities, net	266.4		423.1		626.3		936.3
		Other long-term liabilities	51.8		15.5		192.5		82.1			Other long-term liabilities	167.6		201.8		312.3		399.8

Foreign currency contracts	Foreign currency contracts	Short-term derivative assets, net	2.2		3.8		0.6		1.7		Foreign currency contracts	Short-term derivative assets, net	19.9		21.8		6.9		18.5
		Other non-current assets	0.2		0.1		0.1		—			Other non-current assets	0.8		0.7		—		0.1
		Short-term derivative liabilities, net	5.3		0.8		11.1		2.6			Short-term derivative liabilities, net	6.0		2.0		15.7		19.8
												Other long-term liabilities	0.2		0.2		0.4		0.4
Total derivatives not designated as hedging instruments	Total derivatives not designated as hedging instruments		1,422.7		766.3		1,392.9		738.1		Total derivatives not designated as hedging instruments		1,153.7		1,319.2		1,209.1		1,484.1
Total derivatives	Total derivatives		$	1,453.8	$	773.6	$	1,406.8	$	748.5	Total derivatives		$	1,177.1	$	1,347.4	$	1,212.4	$	1,490.8

For information regarding our derivative instruments measured at fair value after netting and collateral, see Note 8.5. Fair Value Measurements.

The following amounts were recorded on our Consolidated Balance Sheets related to cumulative basis adjustments for fair value hedges (in millions):


Line item in the Consolidated Balance Sheets in which the hedged item is included	Line item in the Consolidated Balance Sheets in which the hedged item is included	Carrying Amount of Hedged Assets/(Liabilities)				Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Asset/(Liabilities)				Line item in the Consolidated Balance Sheets in which the hedged item is included	Carrying Amount of Hedged Assets/(Liabilities)				Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Asset/(Liabilities)
		March 31, 2022		December 31, 2021		March 31, 2022		December 31, 2021			March 31, 2023		December 31, 2022		March 31, 2023		December 31, 2022
Inventory	Inventory	$	77.5	$	59.3	$	14.6	$	0.6	Inventory	$	61.1	$	60.7	$	1.0	$	1.2

Earnings and Other Comprehensive Income (Loss)

Derivatives Designated as Hedging Instruments

The following table presents, on a pre-tax basis, the location and amount of gains (losses) on fair value and cash flow hedges recognized in income in our Condensed Consolidated Statements of Income and Comprehensive Income (in millions):


		For the Three Months Ended													For the Three Months Ended March 31,
		March 31, 2022						March 31, 2021							March 31, 2023						March 31, 2022
		Revenue		Cost of revenue		Interest expense and other financing costs, net		Revenue		Cost of revenue		Interest expense and other financing costs, net			Revenue		Cost of revenue		Interest expense and other financing costs, net		Revenue		Cost of revenue		Interest expense and other financing costs, net
Total amounts of income and expense line items in which the effects of fair value or cash flow hedged are recorded	Total amounts of income and expense line items in which the effects of fair value or cash flow hedged are recorded	$	12,382.0	$	12,151.1	$	14.3	$	5,957.9	$	5,766.3	$	11.1	Total amounts of income and expense line items in which the effects of fair value or cash flow hedged are recorded	$	12,481.6	$	12,218.9	$	34.3	$	12,382.0	$	12,151.1	$	14.3
Gains (losses) on fair value hedge relationships:	Gains (losses) on fair value hedge relationships:													Gains (losses) on fair value hedge relationships:
Commodity contracts:	Commodity contracts:													Commodity contracts:
Hedged item	Hedged item	—		28.6		—		—		12.0		—		Hedged item	—		(3.3)		—		—		28.6		—
Derivatives designated as hedging instruments	Derivatives designated as hedging instruments	—		(41.2)		—		—		(8.4)		—		Derivatives designated as hedging instruments	—		3.8		—		—		(41.2)		—

Amount excluded from effectiveness testing recognized in earnings based on amortization approach														Amount excluded from effectiveness testing recognized in earnings based on amortization approach	—		—		—		—		—		—
Gains (losses) on cash flow hedge relationships:	Gains (losses) on cash flow hedge relationships:													Gains (losses) on cash flow hedge relationships:
Commodity contracts:	Commodity contracts:													Commodity contracts:
Amount of gain (loss) reclassified from Accumulated other comprehensive income (loss) into net income	Amount of gain (loss) reclassified from Accumulated other comprehensive income (loss) into net income	(33.0)		—		—		(11.7)		21.0		—		Amount of gain (loss) reclassified from Accumulated other comprehensive income (loss) into net income	(0.5)		(0.1)		—		(33.0)		—		—
Amount excluded from effectiveness testing recognized in earnings based on changes in fair value														Amount excluded from effectiveness testing recognized in earnings based on changes in fair value	—		—		—		—		—		—
Interest rate contracts:	Interest rate contracts:													Interest rate contracts:
Amount of gain (loss) reclassified from Accumulated other comprehensive income (loss) into net income	Amount of gain (loss) reclassified from Accumulated other comprehensive income (loss) into net income	—		—		(0.3)		—		—		(0.2)		Amount of gain (loss) reclassified from Accumulated other comprehensive income (loss) into net income	—		—		3.1		—		—		(0.3)

Amount excluded from effectiveness testing recognized in earnings based on changes in fair value														Amount excluded from effectiveness testing recognized in earnings based on changes in fair value	—		—		—		—		—		—
Total amount of income and expense line items excluding the impact of hedges	Total amount of income and expense line items excluding the impact of hedges	$	12,415.0	$	12,138.6	$	14.0	$	5,969.6	$	5,791.0	$	10.8	Total amount of income and expense line items excluding the impact of hedges	$	12,482.1	$	12,219.3	$	37.4	$	12,415.0	$	12,138.6	$	14.0

The following table presents, on a pre-tax basis, the amounts not recorded in Accumulated other comprehensive income (loss) due to intra-period settlement but recognized in Revenue and Cost of revenue in our Condensed Consolidated Statements of Income and Comprehensive Income (in millions):


Gain (Loss) Not Recorded in Accumulated other comprehensive income (loss) Due to Intra-Period Settlement	Gain (Loss) Not Recorded in Accumulated other comprehensive income (loss) Due to Intra-Period Settlement		For the Three Months Ended March 31,				Gain (Loss) Not Recorded in Accumulated other comprehensive income (loss) Due to Intra-Period Settlement				For the Three Months Ended March 31,
		Location	2022		2021			Gain (Loss) Not Recorded in Accumulated other comprehensive income (loss) Due to Intra-Period Settlement		Location		2023				2022
Commodity contracts	Commodity contracts	Revenue	$	(75.3)	$	(76.8)				Revenue		$	(0.4)			$	(75.3)
Commodity contracts	Commodity contracts	Cost of revenue	$	1.4	$	7.2			Commodity contracts		Cost of revenue			$	(1.7)			$	1.4

For the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, there were no gains or losses recognized in earnings related to our fair value or cash flow hedges that were excluded from the assessment of hedge effectiveness.

As of March 31, ~~2022,~~2023, on a pre-tax basis, ~~$47.3~~$0.1 million is scheduled to be reclassified from Accumulated other comprehensive income (loss) over the next twelve months as ~~a decrease~~an increase to ~~Revenue~~Cost of revenue related to designated commodity cash flow hedges that will mature within the next twelve months.

109

The following tables present the effect and financial statement location of our derivative instruments in cash flow hedging relationships on Accumulated other comprehensive income (loss) and in our Condensed Consolidated Statements of Income and Comprehensive Income (in millions):


Amount of Gain (Loss) Recognized in Accumulated other comprehensive income (loss), Net of Income Tax (Expense) Benefit	Amount of Gain (Loss) Recognized in Accumulated other comprehensive income (loss), Net of Income Tax (Expense) Benefit	For the Three Months Ended March 31,				Amount of Gain (Loss) Recognized in Accumulated other comprehensive income (loss), Net of Income Tax (Expense) Benefit		For the Three Months Ended March 31,
		2022		2021			Amount of Gain (Loss) Recognized in Accumulated other comprehensive income (loss), Net of Income Tax (Expense) Benefit			2023				2022
Commodity contracts (Revenue)	Commodity contracts (Revenue)	$	(52.7)	$	(62.8)					$	0.7			$	(52.7)
Commodity contracts (Cost of revenue)	Commodity contracts (Cost of revenue)	—		84.6					Commodity contracts (Cost of revenue)			(0.4)				—
Interest rate contracts (Interest expense and other financing costs, net)	Interest rate contracts (Interest expense and other financing costs, net)	8.6		3.6					Interest rate contracts (Interest expense and other financing costs, net)			(0.7)				8.6
Total gain (loss)	Total gain (loss)	$	(44.1)	$	25.5				Total gain (loss)			$	(0.3)			$	(44.1)


Amount of Gain (Loss) Reclassified from Accumulated other comprehensive income (loss) into Net income (loss), Net of Income Tax (Expense) Benefit	Amount of Gain (Loss) Reclassified from Accumulated other comprehensive income (loss) into Net income (loss), Net of Income Tax (Expense) Benefit		For the Three Months Ended March 31,				Amount of Gain (Loss) Reclassified from Accumulated other comprehensive income (loss) into Net income (loss), Net of Income Tax (Expense) Benefit				For the Three Months Ended March 31,
		Location	2022		2021			Amount of Gain (Loss) Reclassified from Accumulated other comprehensive income (loss) into Net income (loss), Net of Income Tax (Expense) Benefit		Location		2023				2022
Commodity contracts	Commodity contracts	Revenue	$	(24.6)	$	(11.7)				Revenue		$	(0.4)			$	(24.6)
Commodity contracts	Commodity contracts	Cost of revenue	—		21.0				Commodity contracts		Cost of revenue			(0.1)				—
Interest rate contracts	Interest rate contracts	Interest expense and other financing costs, net	(0.2)		(0.2)				Interest rate contracts		Interest expense and other financing costs, net			2.3				(0.2)
Total gain (loss)	Total gain (loss)		$	(24.8)	$	9.1			Total gain (loss)					$	1.8			$	(24.8)

Derivatives Not Designated as Hedging Instruments

The following table presents the amount and financial statement location in our Condensed Consolidated Statements of Income and Comprehensive Income of realized and unrealized gains (losses) recognized on derivative instruments not designated as hedging instruments (in millions):


			For the Three Months Ended March 31,					For the Three Months Ended March 31,
Derivative Instruments - Non-designated	Derivative Instruments - Non-designated	Location	2022		2021		Derivative Instruments - Non-designated	Location	2023		2022
Commodity contracts	Commodity contracts	Revenue	$	76.9	$	(303.8)	Commodity contracts	Revenue	$	(90.3)	$	76.9
		Cost of revenue	(6.4)		313.0			Cost of revenue	(7.1)		(6.4)
			70.5		9.2				(97.4)		70.5
Foreign currency contracts	Foreign currency contracts	Revenue	(0.6)		0.4		Foreign currency contracts	Revenue	(3.6)		(0.6)
		Other (expense), net	(2.3)		3.3			Other (expense), net	3.8		(2.3)
			(2.9)		3.7				0.2		(2.9)
Total gain (loss)	Total gain (loss)		$	67.6	$	12.9	Total gain (loss)		$	(97.2)	$	67.6

Credit-Risk-Related Contingent Features

We enter into derivative contracts which may require us to post collateral periodically. Certain of these derivative contracts contain credit-risk-related contingent clauses which are triggered by credit events. These credit events may include the requirement to post additional collateral or the immediate settlement of the derivative instruments upon the occurrence of a credit downgrade or if certain defined financial ratios fall below an established threshold.

The following table presents the potential collateral requirements for derivative liabilities with credit-risk-contingent features (in millions):

March 31, 2022 December 31, 2021
Net derivative liability positions with credit contingent features $ 11.0 $ 3.3
Collateral posted and held by our counterparties — —
Maximum additional potential collateral requirements $ 11.0 $ 3.3

~~As of March 31, 2022 and December 31, 2021, there was no collateral held by our counterparties on these derivative contracts with credit-risk-contingent features.~~


	March 31, 2023		December 31, 2022
Net derivative liability positions with credit contingent features	$	76.9	$	72.5
Collateral posted and held by our counterparties	(10.5)		(28.7)
Maximum additional potential collateral requirements	$	66.4	$	43.8

1110

~~6. Debt, Interest Income, Expense, and Other Finance Costs~~

~~Credit Facility~~

On April 1, 2022, the Company entered into Amendment No. 8 to Fourth Amended and Restated Credit Agreement (the "Amendment") to: (i) increase the revolving credit facility to $1.5 billion; (ii) provide a new term loan of $500 million, thereby increasing the total borrowing capacity under the credit facility to $2.0 billion; (iii) modify the pricing of the loans, including the reference rates for various currencies to reflect the discontinuation of LIBOR; (iv) extend the maturity to April 1, 2027; and (v) modify certain financial and other covenants to provide greater operating flexibility.

~~Long-Term Debt~~

~~Our outstanding debt consists of the following (in millions):~~

March 31, 2022 December 31, 2021
Credit Facility $ 424.8 $ —
Term loans 436.7 484.1
Finance leases 19.5 21.2
Other 3.2 3.3
Total debt 884.2 508.7
Less: Current maturities of long-term debt and finance leases (1)
15.0 30.6
Long-term debt $ 869.1 $ 478.1

~~(1)Current maturities as of March 31, 2022 reflect the terms of the Credit Facility amendment effective April 1, 2022 as discussed above.~~

~~Interest Expense~~

~~The following table provides additional information about our Interest income (expense), and other financing costs, net (in millions):~~

For the Three Months Ended March 31,
2022 2021
Interest income $ 2.5 $ 2.3
Interest expense and other financing costs (16.8) (11.1)
Interest expense and other financing costs, net $ (14.3) $ (8.7)

~~7. Shareholders' Equity~~

~~Cash Dividends~~

During the three months ended March 31, 2022, the Company's Board of Directors declared quarterly cash dividends of $0.12 per common share representing $7.6 million in total dividends, which were paid on April 8, 2022. During the three months ended March 31, 2021, the Company's Board of Directors declared quarterly cash dividends of $0.12 per common share representing $7.5 million in total dividends, which were paid on April 9, 2021.

~~Accumulated Other Comprehensive Income (Loss)~~

Our Accumulated other comprehensive income (loss), consists of foreign currency translation adjustments related to our subsidiaries that have a functional currency other than the U.S. dollar and unrealized gains (losses) from derivative instruments designated as cash flow hedges. The after-tax changes in Accumulated other comprehensive income (loss) by component were as follows (in millions):

Balance as of Foreign Currency Translation Adjustments Cash Flow Hedges Accumulated Other Comprehensive Income (Loss)
Balance as of January 1, 2022 $ (134.0) $ (2.7) $ (136.7)
Other comprehensive income (loss) before reclassifications (9.4) (44.1) (53.5)
Amounts reclassified from accumulated other comprehensive income (loss) — 24.8 24.8
Less: Net other comprehensive (income) loss attributable to noncontrolling interest — — —
Balance as of March 31, 2022 $ (143.4) $ (22.0) $ (165.4)
Balance as of January 1, 2021 $ (120.3) $ (12.3) $ (132.6)
Other comprehensive income (loss) before reclassifications (4.0) 25.5 21.5
Amounts reclassified from accumulated other comprehensive income (loss) — (9.1) (9.1)
Less: Net other comprehensive (income) loss attributable to noncontrolling interest — — —
Balance as of March 31, 2021 $ (124.3) $ 4.0 $ (120.3)

8.5. Fair Value Measurements

The carrying amounts of cash and cash equivalents, net accounts receivable, accounts payable and accrued expenses and other current liabilities approximate fair value based on their short-term maturities. The carrying values of our debt and notes receivable approximate fair value as these instruments bear interest either at variable rates or fixed rates, which are not significantly different from market rates. The fair value measurements for our debt and notes receivable are considered to be Level 2 measurements based on the fair value hierarchy.

Recurring Fair Value Measurements

The following tables present information about our gross assets and liabilities that are measured at fair value on a recurring basis (in millions):


		Fair Value Measurements as of March 31, 2022									Fair Value Measurements as of March 31, 2023
		Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total			Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total
Assets:	Assets:									Assets:
Commodities contracts	Commodities contracts	$	873.0	$	547.9	$	8.1	$	1,429.0	Commodities contracts	$	496.5	$	628.2	$	4.8	$	1,129.5
Interest rate contract	Interest rate contract	—		17.0		—		17.0		Interest rate contract	—		20.7		—		20.7
Foreign currency contracts	Foreign currency contracts	—		7.7		—		7.7		Foreign currency contracts	—		26.8		—		26.8
Cash surrender value of life insurance	Cash surrender value of life insurance	—		14.8		—		14.8		Cash surrender value of life insurance	—		15.2		—		15.2
Total assets at fair value	Total assets at fair value	$	873.0	$	587.4	$	8.1	$	1,468.5	Total assets at fair value	$	496.5	$	690.9	$	4.8	$	1,192.2

Liabilities:	Liabilities:									Liabilities:
Commodities contracts	Commodities contracts	$	598.5	$	790.7	$	5.8	$	1,395.0	Commodities contracts	$	537.4	$	649.7	$	2.2	$	1,189.4

Foreign currency contracts	Foreign currency contracts	—		11.8		—		11.8		Foreign currency contracts	—		23.0		—		23.0
Total liabilities at fair value	Total liabilities at fair value	$	598.5	$	802.5	$	5.8	$	1,406.8	Total liabilities at fair value	$	537.4	$	672.8	$	2.2	$	1,212.4


		Fair Value Measurements as of December 31, 2021									Fair Value Measurements as of December 31, 2022
		Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total			Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total
Assets:	Assets:									Assets:
Commodities contracts	Commodities contracts	$	513.3	$	247.6	$	2.6	$	763.5	Commodities contracts	$	496.2	$	797.6	$	4.2	$	1,298.0
Interest rate contract	Interest rate contract	—		5.4		—		5.4		Interest rate contract	—		24.7		—		24.7
Foreign currency contracts	Foreign currency contracts	—		4.7		—		4.7		Foreign currency contracts	—		24.7		—		24.7
Cash surrender value of life insurance	Cash surrender value of life insurance	—		14.6		—		14.6		Cash surrender value of life insurance	—		14.4		—		14.4
Total assets at fair value	Total assets at fair value	$	513.3	$	272.3	$	2.6	$	788.3	Total assets at fair value	$	496.2	$	861.4	$	4.2	$	1,361.8

Liabilities:	Liabilities:									Liabilities:
Commodities contracts	Commodities contracts	$	361.5	$	378.6	$	3.8	$	743.9	Commodities contracts	$	497.4	$	951.2	$	3.4	$	1,452.1
Interest rate contract		—		0.3		—		0.3

Foreign currency contracts	Foreign currency contracts	—		4.3		—		4.3		Foreign currency contracts	—		38.7		—		38.7
Total liabilities at fair value	Total liabilities at fair value	$	361.5	$	383.2	$	3.8	$	748.5	Total liabilities at fair value	$	497.4	$	989.9	$	3.4	$	1,490.8

For our derivative contracts, we may enter into master netting, collateral and offset agreements with counterparties. These agreements provide us the ability to offset a counterparty's rights and obligations, request additional collateral when necessary, or liquidate the collateral in the event of counterparty default. We net the fair value of cash collateral paid or received against fair value amounts recognized for net derivative positions executed with the same counterparty under the same master netting or offset agreement.

We have elected to offset the recognized fair value amounts for multiple derivative instruments executed with the same counterparty in our financial statements when a legal right of offset exists. The following tables summarize those derivative balances subject to the right of offset as presented on our Condensed Consolidated Balance Sheets (in millions):


		Fair Value as of March 31, 2022													Fair Value as of March 31, 2023
		Gross Amounts Recognized		Gross Amounts Offset		Net Amounts Presented		Cash Collateral		Gross Amounts without Right of Offset		Net Amounts			Gross Amounts Recognized		Gross Amounts Offset		Net Amounts Presented		Collateral		Gross Amounts without Right of Offset		Net Amounts
Assets:	Assets:													Assets:
Commodities contracts	Commodities contracts	$	1,429.0	$	937.2	$	491.8	$	70.1	$	—	$	421.7	Commodities contracts	$	1,129.5	$	682.3	$	447.2	$	93.9	$	—	$	353.3
Interest rate contract	Interest rate contract	17.0		—		17.0		—		—		17.0		Interest rate contract	20.7		—		20.7		—		—		20.7
Foreign currency contracts	Foreign currency contracts	7.7		6.0		1.7		—		—		1.7		Foreign currency contracts	26.8		14.3		12.5		—		—		12.5
Total assets at fair value	Total assets at fair value	$	1,453.8	$	943.3	$	510.5	$	70.1	$	—	$	440.5	Total assets at fair value	$	1,177.1	$	696.6	$	480.5	$	93.9	$	—	$	386.6

Liabilities:	Liabilities:													Liabilities:
Commodities contracts	Commodities contracts	$	1,395.0	$	937.2	$	457.8	$	7.4	$	—	$	450.3	Commodities contracts	$	1,189.4	$	682.3	$	507.1	$	178.2	$	—	$	328.8

Foreign currency contracts	Foreign currency contracts	11.8		6.0		5.8		—		—		5.8		Foreign currency contracts	23.0		14.3		8.8		—		—		8.8
Total liabilities at fair value	Total liabilities at fair value	$	1,406.8	$	943.3	$	463.5	$	7.4	$	—	$	456.1	Total liabilities at fair value	$	1,212.4	$	696.6	$	515.8	$	178.2	$	—	$	337.6


		Fair Value as of December 31, 2021													Fair Value as of December 31, 2022
		Gross Amounts Recognized		Gross Amounts Offset		Net Amounts Presented		Cash Collateral		Gross Amounts without Right of Offset		Net Amounts			Gross Amounts Recognized		Gross Amounts Offset		Net Amounts Presented		Collateral		Gross Amounts without Right of Offset		Net Amounts
Assets:	Assets:													Assets:
Commodities contracts	Commodities contracts	$	763.5	$	513.1	$	250.4	$	7.6	$	—	$	242.8	Commodities contracts	$	1,298.0	$	756.8	$	541.1	$	79.3	$	—	$	461.9
Interest rate contract	Interest rate contract	5.4		—		5.4		—		—		5.4		Interest rate contract	24.7		—		24.7		—		—		24.7
Foreign currency contracts	Foreign currency contracts	4.7		2.6		2.1		—		—		2.1		Foreign currency contracts	24.7		20.9		3.8		—		—		3.8
Total assets at fair value	Total assets at fair value	$	773.6	$	515.6	$	258.0	$	7.6	$	—	$	250.4	Total assets at fair value	$	1,347.4	$	777.7	$	569.7	$	79.3	$	—	$	490.5

Liabilities:	Liabilities:													Liabilities:
Commodities contracts	Commodities contracts	$	743.9	$	513.1	$	230.8	$	3.2	$	—	$	227.7	Commodities contracts	$	1,452.1	$	755.6	$	696.4	$	243.1	$	—	$	453.3
Interest rate contract		0.3		—		0.3		—		—		0.3

Foreign currency contracts	Foreign currency contracts	4.3		2.6		1.7		—		—		1.7		Foreign currency contracts	38.7		22.1		16.7		—		—		16.7
Total liabilities at fair value	Total liabilities at fair value	$	748.5	$	515.6	$	232.8	$	3.2	$	—	$	229.7	Total liabilities at fair value	$	1,490.8	$	777.7	$	713.1	$	243.1	$	—	$	470.0

At March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, we did not present any amounts gross on our Condensed Consolidated Balance Sheets where we had the right of offset.

Concentration of Credit Risk

Our individual over-the-counter ("OTC") counterparty exposure is managed within predetermined credit limits and includes the use of cash-call margins when appropriate, thereby reducing the risk of significant nonperformance. At March 31, ~~2022,~~2023, one of our counterparties with a total exposure of ~~$81.5~~$105.2 million represented over 10% of our credit exposure to OTC derivative ~~counterparties.~~counterparties, for which we held cash collateral of $21.7 million.

Nonrecurring Fair Value Measurements

The fair values of nonrecurring assets or liabilities measured using Level 3 inputs were not material as of March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively. ~~The Flyers assets acquired and liabilities assumed were measured and recorded at their acquisition date fair values during the three months ended March 31, 2022 as discussed in Note 3. Acquisitions.~~

1512

9.6. Debt, Interest Income, Expense, and Other Finance Costs

Credit Agreement

The Fourth Amended and Restated Credit Agreement matures in April 2027 and provides for a term loan as well as a revolving credit facility of up to $1.5 billion (the "Credit Facility").

Long-Term Debt

Our outstanding debt consists of the following (in millions):


	March 31, 2023		December 31, 2022
Credit Facility	$	220.0	$	339.0
Term loan	485.4		488.4
Finance leases	18.3		15.4
Other	2.9		2.9
Total debt	726.6		845.7
Less: Current maturities of long-term debt and finance leases	18.2		15.8
Long-term debt	$	708.4	$	829.9

Interest Expense

The following table provides additional information about our Interest income (expense), and other financing costs, net (in millions):


	For the Three Months Ended March 31,
	2023		2022
Interest income	$	1.6	$	2.5
Interest expense and other financing costs	(35.9)		(16.8)
Interest expense and other financing costs, net	$	(34.3)	$	(14.3)

7. Revenue from Contracts with Customers

Disaggregated revenue

The following table presents our revenues from contracts with customers disaggregated by major geographic areas in which we conduct business (in millions):


		For the Three Months Ended March 31,				For the Three Months Ended March 31,
		2022		2021				2023		2022
Aviation	Aviation	$	225.3	$	121.4		Aviation	$	272.3	$	225.3
Land	Land	48.6		5.6			Land	4.3		48.6
Marine	Marine	1,145.4		718.8			Marine	1,110.3		1,145.4
Asia Pacific	Asia Pacific	1,419.3		845.7			Asia Pacific	1,386.9		1,419.3

Aviation	Aviation	641.9		266.9			Aviation	824.7		641.9
Land	Land	1,038.4		609.9			Land	1,057.1		1,038.4
Marine	Marine	831.0		487.2			Marine	525.4		831.0
EMEA	EMEA	2,511.3		1,363.9			EMEA	2,407.2		2,511.3

Aviation	Aviation	953.2		349.1			Aviation	1,218.0		953.2
Land	Land	198.4		122.7			Land	217.7		198.4
Marine	Marine	278.6		125.6			Marine	287.1		278.6
LATAM	LATAM	1,430.1		597.3			LATAM	1,722.8		1,430.1

Aviation	Aviation	3,291.8		1,431.3			Aviation	3,897.9		3,291.8
Land	Land	3,049.6		1,460.5			Land	2,707.9		3,049.6
Marine	Marine	559.4		255.6			Marine	445.5		559.4
North America	North America	6,900.8		3,147.4			North America	7,051.3		6,900.8

Other revenues (excluded from ASC 606) (1)	Other revenues (excluded from ASC 606) (1)	120.5		3.5			Other revenues (excluded from ASC 606) (1)	(86.6)		120.5

Total revenue	Total revenue	$	12,382.0	$	5,957.9		Total revenue	$	12,481.6	$	12,382.0

(1) Includes revenue from derivatives, leases, and other transactions that we account for under separate guidance.

Accounts receivable, contract assets and contract liabilities

The nature of the receivables related to revenue from contracts with customers and other revenues (excluded from ASC 606) are substantially similar, as they are both generated from transactions with the same type of counterparties (e.g., separate fuel sales and storage lease with the same counterparty) and are entered into utilizing the same credit approval and monitoring procedures for all customers. As such, we believe the risk associated with the cash flows from the different types of receivables is not meaningful to separately disaggregate the accounts receivable balance presented on our Condensed Consolidated Balance Sheets. As of March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, the contract assets and contract liabilities recognized by the Company were not material.

~~10.~~

8. Income Taxes

Our income tax provision and the respective effective income tax rates are as follows (in millions, except for income tax rates):

For the Three Months Ended March 31,
2022 2021
Income tax provision $ 6.4 $ 8.8
Effective income tax rate 19.5 % 31.8 %


	For the Three Months Ended March 31,
	2023			2022
Provision for income taxes	$	4.2		$	6.4
Effective income tax rate	15.6		%	19.5		%

Our provision for income taxes for the three months ended March 31, ~~2022~~2023 includes a discrete income tax benefit of $3.8 million, net, which relates to a tax benefit of $3.1 million for the reversal of a valuation allowance previously recorded against a U.S. state's deferred tax assets and a tax benefit of $0.7 million, net, related to other worldwide tax adjustments including changes resulting from tax return filings. For the three months ended March 31, 2022, the provision includes a net discrete income tax benefit of $1.2 million ~~net~~ which relates to a tax benefit of $4.1 million for the remeasurement of an uncertain tax position, a tax expense of $2.0 million for changes related to our state apportionment factors and state net operating loss positions, and a tax expense of $0.8 million related to other worldwide adjustments. For the three months ended March 31, 2021, our provision for income taxes included a discrete income tax benefit of $1.2 million, net of which $1.6 million related to a tax adjustment for the final purchase price allocation on the sale of the MultiService payment solutions business ("MSTS").

Our income tax provisions for the three months ended March 31, ~~2022~~2023 and ~~2021~~2022 were calculated based on the estimated annual effective income tax rates for the ~~2022~~2023 and ~~2021~~2022 years, respectively. The actual effective income tax rate for the ~~2022~~2023 year may be materially different for several reasons including differences between estimated versus actual results and the geographic tax jurisdictions in which the results are earned.

We have various tax returns under examination both in the U.S. and foreign jurisdictions. The most material of these ~~are~~is in Denmark for the 2013 - 2019 tax ~~years, South Korea for the 2011 - 2014 tax years, and the U.S. for the 2019 tax year. One~~year, where one of our subsidiaries ~~in Denmark~~ has been under audit ~~for its 2013 - 2015 tax years~~ since ~~2018 and was notified in March 2021 that its 2016 - 2019 tax years were also under examination.~~2018. Through ~~the three months ended~~ March 31, ~~2022,~~2023, we have received final tax assessments for the 2013 and 2014 tax years that were immaterial, ~~and~~ a proposed tax assessment for the 2015 tax year of approximately ~~$14.3~~$14.0 million (DKK 96.1 million)~~. In April 2022, we received a~~, and proposed tax ~~assessment~~assessments for the 2016 and 2017 tax years of approximately ~~$19.9~~$19.5 million (DKK 133.8 million) and ~~$23.1~~$22.6 million (DKK 155.5 million), respectively. We believe these assessments are without merit and are vigorously defending against the actions. We have not yet received any proposed assessments related to the 2018 -or 2019 tax years, which could be materially larger than the previous assessments if a similar methodology is applied.

In ~~March 2022,~~April, 2023, we received ~~a proposed settlement for~~notification that the ~~2011-2014 tax years~~U.S. examinations of the Korean branch of one of our subsidiaries related to income tax assessment notices received in 2017 totaling $9.3 million (KRW 11.3 billion) and revised in 2021 to $8.8 million (KRW 10.6 billion). The proposed settlement reduces the total South Korean assessment for the 2011 - 2014 tax years to approximately $1.6 million (KRW 2.0 billion), including tax, interest, and penalties. We agreed to the settlement on April 25, 2022 and anticipate ultimately resolving the audit in 2022.

The U.S. IRS examination for our 2019 tax year began in February 2022 and we are currently responding to information requests. In March 2022, we accepted and agreed to the remaining notices of proposed assessment received from the IRS in December 2021 for our 2017 and 2018 tax ~~years. These assessments did not have a material impact on our income tax or financial results and no additional proposed assessments~~years are ~~expected for the 2017 and 2018 years.~~closed as expected.

An unfavorable resolution of one or more of the above matters could have a material adverse effect on our operating results or cash flows in the quarter or year in which the adjustments are recorded, or the tax is due or paid. As examinations are still in process or have not yet reached the final stages of the appeals process, the timing of the ultimate resolution or payments that may be required cannot be determined at this time.

~~11. Business Segments~~

We operate in 3 reportable segments consisting of aviation, land and marine. Corporate expenses are allocated to the segments based on usage, where possible, or on other factors according to the nature of the activity. Our operating segments are determined based on the different markets in which we provide products and services, which are defined primarily by the customers (businesses and governmental) and the products and services provided to those customers. As discussed in Note 3. Acquisitions, Flyers is reported as part of our land segment subsequent to the acquisition on January 3, 2022. We use Income from operations as our primary measure of profit as we believe it is the most meaningful measure to allocate resources and assess the performance or our segments.

~~Information concerning our Revenue and Income from operations by reportable segment is as follows (in millions):~~

For the Three Months Ended March 31,
Revenue: 2022 2021
Aviation segment $ 5,010.5 $ 2,095.0
Land segment 4,380.8 2,188.2
Marine segment 2,990.6 1,674.7
Total revenue $ 12,382.0 $ 5,957.9
Income from operations:
Aviation segment $ 7.5 $ 23.0
Land segment 33.4 32.8
Marine segment 23.1 6.4
Corporate overhead - unallocated (22.8) (24.5)
Total income from operations $ 41.3 $ 37.6

~~Information concerning our Accounts receivable, net of allowance for credit losses and Total assets by reportable segment is as follows (in millions):~~

March 31, 2022 December 31, 2021
Accounts receivable, net:
Aviation segment, net of allowance for credit losses of $9.6 and $18.4 as of March 31, 2022 and December 31, 2021, respectively $ 1,339.9 $ 972.9
Land segment, net of allowance for credit losses of $4.6 and $3.8 as of March 31, 2022 and December 31, 2021, respectively 1,096.4 664.7
Marine segment, net of allowance for credit losses of $3.0 and $3.9 as of March 31, 2022 and December 31, 2021, respectively 1,073.9 717.7
Total accounts receivable, net $ 3,510.2 $ 2,355.3
Total assets:
Aviation segment $ 2,719.5 $ 2,305.6
Land segment 3,516.1 2,106.1
Marine segment 1,403.7 1,022.7
Corporate 328.7 507.9
Total assets $ 7,968.0 $ 5,942.4

~~12. Earnings Per Common Share~~

~~The following table sets forth the computation of basic and diluted earnings per common share for the periods presented (in millions, except per share amounts):~~

For the Three Months Ended March 31,
2022 2021
Numerator:
Net income attributable to World Fuel $ 26.3 $ 18.9
Denominator:
Weighted average common shares for basic earnings per common share 63.4 63.0
Effect of dilutive securities 0.3 0.6
Weighted average common shares for diluted earnings per common share 63.7 63.6
Basic earnings (loss) per common share $ 0.42 $ 0.30
Diluted earnings (loss) per common share $ 0.41 $ 0.30
Weighted average securities which are not included in the calculation of diluted earnings per common share because their impact is anti-dilutive or their performance conditions have not been met 1.5 1.1

~~13.~~9. Commitments and Contingencies

In December 2021, judgments were entered against one of our subsidiaries in the Singapore High Court in companion actions filed by a financing bank of two of our subsidiary’s suppliers. Each of the claims arose out of a financing arrangement between our subsidiary's supplier and the bank. The resulting judgments, including principal and interest, aggregated to approximately $33 million, which we paid to the bank pending the appeals of the Singapore court judgments. In January 2023, we entered into a settlement agreement with the bank pursuant to which the parties settled for approximately $13 million. As a result, we recognized a loss of $6.5 million during the year ended December 31, 2022. Pursuant to the settlement, in the first quarter of 2023 we recovered approximately $20 million in funds we had previously paid to the bank. In connection with the settlement, we have withdrawn our appeals and the parties have exchanged full and final releases in respect of the matters.

We are also a party to various claims, complaints and proceedings arising in the ordinary course of our business including, but not limited to, environmental claims, commercial and governmental contract claims, such as property damage, demurrage, personal injury, billing and fuel quality claims, as well as bankruptcy preference claims and tax and administrative claims. For example, in December 2021, a judgment was entered against one of our subsidiaries in the Singapore High Court in respect of an action filed by a financing bank of two of our subsidiary’s suppliers. The claims arose out of a financing arrangement between the suppliers and the bank and the resulting judgments, including principal and interest, are in the aggregate amount of approximately $33 million. We believe the claims are without merit, have appealed the judgments and are vigorously defending against the claims.

From time to time, we are also under review by various domestic and foreign tax authorities regarding indirect tax matters and are involved in various challenges and litigation in a number of countries, including, in particular, South Korea and Brazil, where the amounts ~~under~~in controversy may be material. During 2016 and 2017, the South Korean

branch of one of our subsidiaries received assessments totaling approximately ~~$28.2~~$26.3 million (KRW 34.3 billion) from the regional tax authorities of Seoul, South Korea. The ~~assessment~~assessments primarily consist of fines and penalties for allegedly failing to issue Value Added Tax ("VAT") invoices and report certain transactions during the period 2011-2014. These assessments do not involve failure to pay or collect VAT. We believe that these assessments are without merit and are currently appealing the actions.

We are also involved in several tax disputes with federal, state and municipal tax authorities in Brazil, relating primarily to a VAT tax known as ICMS. These disputes are at various stages of the legal process, including the administrative review phase and the collection action phase, and include assessments of fixed amounts of principal and penalties, plus interest. One of our Brazilian subsidiaries is currently ~~appealing~~contesting an assessment of approximately ~~$12.6~~$12.5 million (BRL ~~59.6~~64.1 million) from the Brazilian tax authorities relating to the ICMS rate used for certain transactions. The assessment primarily consists of interest and penalties. We believe that the assessment is without merit and are pursuing our remedies in the judicial court system.

We have established loss provisions for claims and other matters in which losses are probable and can be reasonably estimated. As of March 31, ~~2022,~~2023, these reserves were not material. For those matters where a reserve has not been established and for which we believe a loss is reasonably possible, we believe that such losses will not have a material adverse effect on our Condensed Consolidated Financial Statements. However, any adverse resolution of one or more such claims, complaints or proceedings during a particular period could have a material adverse effect on our Condensed Consolidated Financial Statements or disclosures for that period.

Our estimates regarding potential losses and materiality are based on our judgment and assessment of the claims utilizing currently available information. Although we will continue to reassess our reserves and estimates based on future developments, our objective assessment of the legal merits of such claims may not always be predictive of the outcome and actual results may vary from our current estimates.

10. Shareholders' Equity

Cash Dividends

During the three months ended March 31, 2023, the Company's Board of Directors (the "Board") declared quarterly cash dividends of $0.14 per common share representing $8.6 million in dividends, which were paid on April 21, 2023. During the three months ended March 31, 2022, the Board declared quarterly cash dividends of $0.12 per common share representing $7.6 million in dividends, which were paid on April 8, 2022.

Accumulated Other Comprehensive Income (Loss)

Our Accumulated other comprehensive income (loss) consists of foreign currency translation adjustments related to our subsidiaries that have a functional currency other than the U.S. dollar and unrealized gains (losses) from derivative instruments designated as cash flow hedges. The after-tax changes in Accumulated other comprehensive income (loss) by component were as follows (in millions):


	Foreign Currency Translation Adjustments		Cash Flow Hedges		Accumulated Other Comprehensive Income (Loss)
Balance as of January 1, 2023	$	(179.5)	$	18.9	$	(160.6)
Other comprehensive income (loss) before reclassifications	5.7		(0.3)		5.4
Amounts reclassified from accumulated other comprehensive income (loss)	—		(1.8)		(1.8)

Balance as of March 31, 2023	$	(173.8)	$	16.7	$	(157.1)

Balance as of January 1, 2022	$	(134.0)	$	(2.7)	$	(136.7)
Other comprehensive income (loss) before reclassifications	(9.4)		(44.1)		(53.5)
Amounts reclassified from accumulated other comprehensive income (loss)	—		24.8		24.8

Balance as of March 31, 2022	$	(143.4)	$	(22.0)	$	(165.4)

11. Business Segments

We operate in three reportable segments consisting of aviation, land and marine. Our operating segments are determined based on the different markets in which we provide products and services, which are defined primarily by the customers (businesses and governmental) and the products and services provided to those customers. We use Income from operations as our primary measure of profit as we believe it is the most meaningful measure to allocate resources and assess the performance or our segments. Corporate expenses are allocated to the segments based on usage, where possible, or on other factors according to the nature of the activity.

Information concerning our Revenue and Income from operations by reportable segment is as follows (in millions):


	For the Three Months Ended March 31,
Revenue:	2023		2022
Aviation segment	$	6,222.8	$	5,010.5
Land segment	3,891.3		4,380.8
Marine segment	2,367.5		2,990.6
Total revenue	$	12,481.6	$	12,382.0

Income from operations:
Aviation segment	$	34.0	$	7.5
Land segment	26.2		33.4
Marine segment	30.8		23.1
Corporate overhead - unallocated	(26.4)		(22.8)
Total income from operations	$	64.6	$	41.3

Information concerning our Accounts receivable, net of allowance for credit losses and Total assets by reportable segment is as follows (in millions):


	March 31, 2023		December 31, 2022
Accounts receivable, net:
Aviation segment, net of allowance for credit losses of $5.5 and $4.9 as of March 31, 2023 and December 31, 2022, respectively	$	1,579.1	$	1,452.4
Land segment, net of allowance for credit losses of $5.8 and $5.8 as of March 31, 2023 and December 31, 2022, respectively	884.7		1,141.9
Marine segment, net of allowance for credit losses of $3.2 and $3.4 as of March 31, 2023 and December 31, 2022, respectively	533.4		699.8
Total accounts receivable, net	$	2,997.2	$	3,294.1

Total assets:
Aviation segment	$	2,965.7	$	3,036.2
Land segment	3,116.6		3,710.1
Marine segment	818.2		1,007.4
Corporate	585.2		410.8
Total assets	$	7,485.8	$	8,164.6

12. Earnings Per Common Share

The following table sets forth the computation of basic and diluted earnings per common share for the periods presented (in millions, except per share amounts):


	For the Three Months Ended March 31,
	2023		2022
Numerator:
Net income attributable to World Fuel	$	22.8	$	26.3
Denominator:
Weighted average common shares for basic earnings per common share	62.2		63.4
Effect of dilutive securities	0.5		0.3
Weighted average common shares for diluted earnings per common share	62.8		63.7
Basic earnings (loss) per common share	$	0.37	$	0.42
Diluted earnings (loss) per common share	$	0.36	$	0.41
Weighted average securities which are not included in the calculation of diluted earnings per common share because their impact is anti-dilutive or their performance conditions have not been met	1.3		1.5

2018

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with our ~~2021~~2022 10-K Report and the unaudited Condensed Consolidated Financial Statements and related Notes in Item 1 -– Financial Statements of this 10-Q Report. A reference to a "Note" herein refers to the accompanying Notes to the Condensed Consolidated Financial Statements contained in Item 1 -– Financial Statements. The following discussion may contain forward-looking statements, and our actual results may differ materially from the results suggested by these forward-looking statements. Some factors that may cause our results to differ are disclosed in Item 1A -– Risk Factors of our ~~2021~~2022 10-K Report.

Forward-Looking Statements

This 10-Q Report and the information incorporated by reference in it, or made by us in other reports, filings with the SEC, press releases, teleconferences, industry conferences or otherwise, contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and may contain the words "believe," "anticipate," "expect," "estimate," "project," "could," "would," "will," "will be," "will continue," "plan," or words or phrases of similar meaning. Specifically, this 10-Q Report includes forward-looking statements regarding (i) the conditions in the aviation, land, and marine markets and their impact on our business, (ii) ~~the effectiveness of our initiatives to reduce cost, improve liquidity and increase efficiencies, as well as~~growth strategies, the impact of ~~such initiatives on our business, (iii) growth strategies~~fuel prices and our working capital, liquidity, and capital expenditure requirements, ~~(iv) the expected benefit of our land segment restructuring and its ability to create efficiencies and allow for greater scalability and quicker integration of new businesses to capture synergies, (v)~~(iii) our expectations and estimates regarding ~~certain~~ tax, legal and accounting matters, including the impact on our financial statements, ~~(vi)~~(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, (vii)~~(v) estimates regarding the financial impact of our derivative contracts, and ~~(viii)~~(vi) our role in the ~~ultimate impact of the coronavirus pandemic, or COVID-19, and related travel restrictions on us and our customers, including our expectations about demand, volume, profitability~~transition to lower carbon alternatives and the impact of ~~fuel prices.~~our services on such transition. These forward-looking statements are qualified in their entirety by cautionary statements and risk factor disclosures contained in our SEC filings.

These forward-looking statements are estimates and projections reflecting our best judgment and involve risks, uncertainties or other factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control. Although we believe the estimates and projections reflected in the forward-looking statements are reasonable, our expectations may prove to be incorrect. Our actual results may differ materially from the future results, performance or achievements expressed or implied by the forward-looking statements.

Important factors that could cause actual results to differ materially from the results and events anticipated or implied by such forward-looking statements include, but are not limited to:

•customer and counterparty creditworthiness and our ability to collect accounts receivable and settle derivative contracts;

•~~adverse conditions in the industries in which our customers operate;~~

•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 ~~ability to effectively integrate and derive benefits from acquired businesses;~~customers operate;

•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 ingoverning our senior revolving credit facility ("Credit Facility") and our senior term ~~loans ("Term Loans"),~~loan, including ~~our~~ financial covenants;

•the impact of cyber and other information ~~security-related~~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 ~~("GHG")~~ 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;

•~~increases in interest rates;~~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;

•~~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;

•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;

•the extent of the impact of the pandemic, including the duration, spread, severity and scope of related government orders and restrictions, on ours and our customers' sales, profitability, operations and supply chains;

•~~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 our ~~2021~~2022 10-K Report, and those described from time to time in our other filings with the SEC.

We operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for us to predict all of those risks, nor can we assess the impact of all of those risks on our business or the extent to which any factor may cause actual results to differ materially from those contained in any forward-looking statement. Further, forward-looking statements speak only as of the date they are made, and unless required by law, we expressly disclaim any obligation or undertaking to publicly update any of them in light of new information, future events, or otherwise. Any public statements or disclosures by us following this report that modify or impact any of the forward-looking statements contained in or accompanying this 10-Q Report will be deemed to modify or supersede such forward-looking statements.

For these statements, we claim the protection of the safe harbor for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act, as amended (the "Exchange Act").

Business Overview

We are a leading global ~~fuel~~energy management company, offering a broad suite of energy advisory, management and fulfillment services, ~~company,~~digital and other technology solutions, as well as sustainability products and services across the energy product spectrum. We are principally ~~engaged~~involved in ~~the distribution of fuel~~providing energy procurement and related products and services to commercial and industrial customers in the aviation, land, and marine transportation industries. ~~In recent years, we~~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~~power. We are continuing to commercial, industrial and government customers. 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. We believe that we can have a significant impactfocus 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.

~~COVID-19~~

Throughout 2020 and 2021, the COVID-19 pandemic had a significant impact on the global economy as a whole, and the transportation industries in particular. Many of our customers in these industries, especially commercial airlines, experienced a substantial decline in business activity arising from the various measures enacted by governments around the world to contain the spread of the virus. While travel and economic activity has been improving recently in various regions, activity in certain parts of the world continues to be negatively impacted by travel restrictions and other quarantine mandates. For additional discussion on the risks relating to the pandemic, see Item 1A - Risk Factors in our 2021 10-K Report.

Reportable Segments

We operate in three reportable segments consisting of aviation, land, and marine.For additional discussion on our reportable segments, see "Reportable Segments" under Part I, Item 1.1 – Business in our ~~2021 10-K.~~2022 10-K Report. Selected financial information with respect to our business segments is provided in Note 11. Business Segments.

Aviation Segment

Our aviation segment has benefited from growth in our fuel and related services offerings, as well as our ~~improving~~enhanced logistics ~~capability~~capabilities and the geographic expansion of our aviation fueling operations into additional international airport locations. As part of our growth strategy, we have also increased the level of inventory that we hold ~~for strategic reasons at certain locations.~~in order to meet the needs of our customers. 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 ~~trade~~traded at significantly lower levels than the then current market price. Our results of operations in our aviation segment have been significantly affected during the last two fiscal years by the effects of the COVID-19 pandemic, as well as the withdrawal of the troops in Afghanistan by the U.S. and NATO that concluded in the third quarter of 2021. However, the gradual relaxation of global travel restrictions in conjunction with higher vaccination distribution and lower COVID-19 case rates has contributed to a substantial recovery in global aviation volumes as compared to pre-pandemic levels.

Land Segment

We believe our land segment is ~~well positioned~~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 ~~commercial and industrial platforms~~business to deliver value-added solutions to ~~customers across the U.S. In addition,~~our land fuel customers.

We have also expanded our product and service offerings to ~~participate in accelerating the~~include energy ~~transition, we~~advisory services, sustainability solutions, as well as supply fulfillment for natural gas and power. We continue to focus on supporting the ~~expansion of~~energy transition through various initiatives and expanding our sustainability offerings, ~~which include consulting,~~including renewable fuel products, and carbon management and renewable energy solutions through World Kinect, our global energy management brand. ~~In connection with our efforts~~We are continuing to ~~sharpen our portfolio of businesses and~~invest in talent in this area, which we believe will help accelerate growth in our core business activities, we have also divested of certain businesses and focused on investing in businesses that we believe will drive enhanced operating efficiencies and generate long-term shareholder value. With the addition of Flyers' operations we acquired in January 2022, we believe our expanded national platform will continue to accelerate the delivery of value-added solutions to commercial and industrial customers across the United States. See Note 3. Acquisitions for additional information. Finally, our results of operations in our land segment can be significantly affected by market volatility and weather conditions. In periods where we experience historically extreme or unseasonable weather conditions, demand for our products may be affected, both positively and negatively. In addition, our land segment also similarly benefited from sales to NATO in Afghanistan in recent years, however, such activity materially declined and ultimately concluded in 2021 in connection with the withdrawal of the U.S. and NATO troops in the area.these activities.

Marine Segment

~~Our~~Due to the generally spot nature of sales in our marine ~~segment has~~business, we have traditionally benefited from elevated fuel ~~price~~prices and volatility, supply uncertainty, and a constrained credit environment. ~~Through much~~Over the last several years, we have spent a considerable amount of ~~2019~~time reorganizing our business to drive internal efficiencies so that we can generate relatively moderate levels of earnings in stable markets and ~~into early 2020, we experienced improved profitability~~yet remain poised to provide additional value in volatile and credit constrained markets. In 2022, our marine segment due to higher average fuel prices, combined with our heightened focus on cost management and the continued reshaping of our business portfolio. In addition, the IMO 2020 regulations resulted in certain supply imbalances and price volatility which positively impacted our operatingdelivered exceptional results ~~in those periods. Beginning in the latter part of the first quarter of 2020 and continuing through 2021, we experienced a material decline in volume and related profitability primarily~~ due to the ~~impact of~~market conditions arising from the ~~COVID-19 pandemic on the marine transportation industry. The recent~~dramatic increase in global oil prices and higher interest rates, as well as the disruption of traditional supply patterns and related price volatility. However, with lower global oil prices and reduced market volatility ~~experienced~~forecasted for 2023, we expect our marine segment's performance to be materially lower than the extraordinary results produced in 2022.

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 and the first quarter of ~~2022 contributed~~2023. However, to the ~~improvement~~extent that a rising cost environment impacts our results, there are typically offsetting benefits either inherent in ~~marine segment profitability.~~certain parts of our business or that may result from proactive measures we take to reduce the impact of inflation on our net operating results. These benefits can include higher commodity prices that typically result in a constrained credit environment, often creating favorable market conditions that increase demand for our services, as well as our ability to renegotiate prices due to many of our sales contracts being 12 months or less in duration.

2421

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. However, a significant or prolonged period of high inflation, particularly when combined with rising interest rates due to actions taken by governments to attempt to control inflation, could adversely impact our results if costs, including employee compensation driven by competitive job market conditions, were to increase at a rate greater than the increase in the revenues we generate. Higher interest rates also typically increase the interest expense associated with our credit arrangements with banks and other parties that serve as important sources of liquidity for us, which can therefore negatively impact our results of operations for a particular period.

See “We extend credit to 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 in our 2022 10-K Report for additional discussion of these risks.

Results of Operations

Three Months Ended March 31, ~~2022~~2023 Compared to Three Months Ended March 31, ~~2021~~2022

Consolidated Results of Operations

The following provides a summary of our consolidated results of operations for the periods indicated (in ~~millions)~~millions, except per share amounts):
For the Three Months Ended March 31,
2022 2021
Revenue $ 12,382.0 $ 5,957.9
Cost of revenue 12,151.1 5,766.3
Gross profit 230.9 191.6
Operating expenses:
Compensation and employee benefits 114.9 92.5
General and administrative 74.7 59.4
Restructuring charges — 2.1
Total operating expenses 189.6 154.0
Income from operations 41.3 37.6
Non-operating income (expenses), net:
Interest expense and other financing costs, net (14.3) (8.7)
Other income (expense), net 5.7 (1.2)
Total non-operating income (expense), net (8.7) (10.0)
Income (loss) before income taxes 32.6 27.6
Provision for income taxes 6.4 8.8
Net income (loss) including noncontrolling interest 26.3 18.8
Net income (loss) attributable to noncontrolling interest (0.1) —
Net income (loss) attributable to World Fuel $ 26.3 $ 18.9
Basic earnings (loss) per common share 0.42 0.30
Diluted earnings (loss) per common share 0.41 0.30


	For the Three Months Ended March 31,
	2023		2022
Revenue	$	12,481.6	$	12,382.0
Cost of revenue	12,218.9		12,151.1
Gross profit	262.7		230.9
Operating expenses:
Compensation and employee benefits	119.2		114.9
General and administrative	79.0		74.7


Total operating expenses	198.2		189.6
Income (loss) from operations	64.6		41.3
Non-operating income (expenses), net:
Interest expense and other financing costs, net	(34.3)		(14.3)
Other income (expense), net	(3.5)		5.7
Total non-operating income (expense), net	(37.8)		(8.7)
Income (loss) before income taxes	26.7		32.6
Provision for income taxes	4.2		6.4
Net income (loss) including noncontrolling interest	22.6		26.3
Net income (loss) attributable to noncontrolling interest	(0.2)		(0.1)
Net income (loss) attributable to World Fuel	$	22.8	$	26.3

Basic earnings (loss) per common share	$	0.37	$	0.42

Diluted earnings (loss) per common share	$	0.36	$	0.41

Revenue. Our consolidated revenue for the three months ended March 31, ~~2022~~2023 was ~~$12.4~~$12.5 billion, an increase of ~~$6.4 billion,~~$99.6 million, or ~~108%~~1%, compared to the three months ended March 31, ~~2021,~~2022, due to higher prices and ~~increased~~ volumes ~~our~~in the aviation segment offset by decreased revenues in the marine and land ~~and marine~~ segments, ~~respectively,~~ as discussed further below.

Gross Profit. Our gross profit for the three months ended March 31, ~~2022~~2023 was ~~$230.9~~$262.7 million, an increase of ~~$39.4~~$31.8 million, or ~~21%~~14%, compared to the three months ended March 31, ~~2021,~~2022, attributable to increased gross profit of ~~$30.3~~$36.4 million and ~~$21.5~~$5.1 million in the ~~land~~aviation and marine segments, respectively, partially offset by a decrease of ~~$12.5~~$9.6 million in the ~~aviation~~land segment, as discussed further below.

Operating Expenses. Total operating expenses for the three months ended March 31, ~~2022~~2023 were ~~$189.6~~$198.2 million, an increase of ~~$35.7~~$8.5 million, or ~~23%~~4%, compared to the three months ended March 31, ~~2021.~~2022. The increase in operating expenses was ~~partially attributable to the addition of Flyers' operating expenses of $18.4 million, as well as increased compensation and employee benefit costs, together with higher~~primarily driven by an increase in general and administrative expenses and higher compensation costs ~~associated with more normalized levels of~~as business ~~activity.~~activities continued to normalize.

Non-Operating Income (Expense), net. For the three months ended March 31, ~~2022,~~2023, we had net non-operating expense of ~~$8.7~~$37.8 million compared to net non-operating expense of ~~$10.0~~$8.7 million for the three months ended March 31, ~~2021.~~2022. The ~~decrease~~increase of ~~$1.3~~$29.2 million ~~was primarily attributable to equity in earnings and foreign currency gains, partially offset by an increase in interest expense of $5.6 million primarily driven by incremental borrowings~~ during the three months ended March 31, ~~2022 related~~2023 was primarily attributable to ~~the Flyers acquisition.~~an increase in interest expense as well as foreign currency losses. The increase in interest expense was primarily driven by higher interest rates and an increase in fees associated with sales of accounts receivable under our Receivables Purchase Agreements ("RPAs").

Income Taxes. ~~Our~~For the three months ended March 31, 2023, we recognized an income tax ~~provision was~~expense of $4.2 million, compared to income tax expense of $6.4 million for the three months ended March 31, ~~2022, compared to an income tax provision of $8.8 million for the three months ended March 31, 2021.~~2022. The decrease of ~~$2.4~~$2.2 million was primarily attributable to differences in ~~the results of our subsidiaries in~~discrete tax ~~jurisdictions with different tax rates.~~items. See Note ~~10.~~8. Income Taxes for additional information.

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 Three Months Ended March 31,							For the Three Months Ended March 31,
		2022		2021		Change			2023		2022		Change
Revenue	Revenue	$	5,010.5	$	2,095.0	$	2,915.5	Revenue	$	6,222.8	$	5,010.5	$	1,212.3

Gross profit	Gross profit	$	64.2	$	76.7	$	(12.5)	Gross profit	$	100.6	$	64.2	$	36.4
Operating expenses	Operating expenses	56.7		53.7		3.0		Operating expenses	66.6		56.7		9.9
Income from operations		$	7.5	$	23.0	$	(15.5)
Income (loss) from operations								Income (loss) from operations	$	34.0	$	7.5	$	26.5

Operational metrics:	Operational metrics:							Operational metrics:
Aviation segment volumes (gallons)	Aviation segment volumes (gallons)	1,655.4		1,143.4		512.1		Aviation segment volumes (gallons)	1,777.1		1,655.4		121.7
Aviation segment average price per gallon	Aviation segment average price per gallon	$	2.91	$	1.72	$	1.20	Aviation segment average price per gallon	$	3.30	$	2.91	$	0.38

Revenues in our aviation segment were ~~$5.0~~$6.2 billion for the three months ended March 31, ~~2022,~~2023, an increase of ~~$2.9~~$1.2 billion, or ~~139%~~24%, compared to the three months ended March 31, ~~2021.~~2022. The increase in revenue was driven by higher average prices and increased volumes. Average jet fuel price per gallon sold increased by ~~70%~~13% in the three months ended March 31, ~~2022~~2023 compared to the three months ended March 31, ~~2021 as a result of the rise in global oil prices.~~2022. Total aviation volumes increased by ~~512.1~~121.7 million gallons, or ~~45%~~7%, to ~~1.7~~1.8 billion gallons, ~~as global travel restrictions eased and demand for air travel continued to recover.~~driven largely by growth in international passenger airline demand.

~~Our aviation~~Aviation segment gross profit for the three months ended March 31, ~~2022~~2023 was ~~$64.2~~$100.6 million, ~~a decrease~~an increase of ~~$12.5~~$36.4 million, or ~~16%~~57%, compared to the three months ended March 31, ~~2021.~~2022. The ~~decrease~~increase was attributable to higher contribution from growth in ~~gross profit was primarily attributable to~~volume and related service offerings during the quarter, as well as the impact of inventory losses driven by significant price volatility and backwardation that occurred during the ~~three months~~quarter ended March 31, 2022 and the reduction in our government-related activity in Afghanistan as a result of the military withdrawal which concluded during the third quarter of 2021, partially offset by increased volumes from the continued recovery in demand for air travel.2022.

Income from operations in our aviation segment for the three months ended March 31, ~~2022~~2023 was ~~$7.5~~$34.0 million, ~~a decrease~~an increase of ~~$15.5~~$26.5 million, or ~~67%~~352%, compared to the three months ended March 31, ~~2021. In addition to the decrease in~~2022. The higher gross profit discussed above ~~income from operations~~ was ~~also impacted~~partially offset by a ~~$3.0~~$9.9 million increase in operating ~~expenses. The~~expenses arising from higher compensation costs and an increase in ~~operating~~marketing and travel-related expenses ~~was driven by higher general and administrative costs, such as employee travel and professional fees, as~~to support the growth in business activity ~~resumed to more normalized levels.~~and improved financial performance.

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 Three Months Ended March 31,							For the Three Months Ended March 31,
		2022		2021		Change			2023		2022		Change
Revenue	Revenue	$	4,380.8	$	2,188.2	$	2,192.7	Revenue	$	3,891.3	$	4,380.8	$	(489.6)

Gross profit	Gross profit	$	119.8	$	89.5	$	30.3	Gross profit	$	110.1	$	119.8	$	(9.6)
Operating expenses	Operating expenses	86.4		56.7		29.7		Operating expenses	83.9		86.4		(2.4)
Income from operations		$	33.4	$	32.8	$	0.6
Income (loss) from operations								Income (loss) from operations	$	26.2	$	33.4	$	(7.2)

Operational metrics:	Operational metrics:							Operational metrics:
Land segment volumes (gallons)(1)	Land segment volumes (gallons)(1)	1,582.6		1,303.0		279.5		Land segment volumes (gallons)(1)	1,564.7		1,582.6		(17.9)
Land segment average price per gallon	Land segment average price per gallon	$	2.77	$	1.68	$	1.09	Land segment average price per gallon	$	2.49	$	2.77	$	(0.28)

(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.

Revenues in our land segment were ~~$4.4~~$3.9 billion for the three months ended March 31, ~~2022, an increase~~2023, a decrease of ~~$2.2 billion,~~$489.6 million, or ~~100%~~11%, compared to the three months ended March 31, ~~2021.~~2022. The ~~increase~~decrease in revenue was principally driven by ~~higher average~~an 10% decrease in prices ~~and the acquisition of Flyers. The average price per gallon, or gallon equivalent sold, increased by 65% in~~for the three months ended March 31, ~~2022~~2023 compared to the three months ended March 31, ~~2021 as a result of the rise in global oil prices.~~2022. Total volumes ~~increased~~decreased by ~~279.5~~17.9 million, or ~~21%~~1%, to 1.6 billion gallons or gallon equivalents in the three months ended March 31, ~~2022~~2023 compared to the three months ended March 31, ~~2021, primarily due to the acquisition of Flyers~~2022 driven by extreme weather conditions experienced in ~~January 2022.~~

our liquid fuel business in North America, partially offset by increased activity in our natural gas business.

Our land segment gross profit for the three months ended March 31, ~~2022~~2023 was ~~$119.8~~$110.1 million, ~~an increase~~a decrease of ~~$30.3~~$9.6 million, or ~~34%~~8%, compared to the three months ended March 31, ~~2021.~~2022. The ~~increase~~decrease in gross profit was primarily attributable to ~~Flyers gross profit of $36.1 million~~extreme weather conditions experienced in our liquid fuel business in North America and lower contributions from our U.K. business, which benefited from significant price volatility in the ~~three months ended March 31,~~first quarter of 2022, partially offset by ~~the reduction in our government-related activity in Afghanistan as well as a decline~~improved performance in our natural gas, ~~activities relative to the exceptional results during the three months ended March 31, 2021, which benefited from extreme weather conditions.~~power and sustainability-related offerings.

In our land segment, income from operations for the three months ended March 31, ~~2022~~2023 was ~~$33.4~~$26.2 million, ~~an increase~~a decrease of ~~$0.6~~$7.2 million, or 2%22%, compared to the three months ended March 31, ~~2021.~~2022. The ~~increase in income from operations attributable to Flyers of $17.6 million during the three months ended March 31, 2022 was partially offset by the reductions~~decrease in gross profit discussed above ~~as well as increased~~was partially offset by a decrease in operating expenses ~~driven by higher compensation~~principally related to lower general and ~~employee benefit costs, as described under Consolidated Results of Operations above.~~administrative costs.

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):


		For the Three Months Ended March 31,							For the Three Months Ended March 31,
		2022		2021		Change			2023		2022		Change
Revenue	Revenue	$	2,990.6	$	1,674.7	$	1,315.9	Revenue	$	2,367.5	$	2,990.6	$	(623.1)

Gross profit	Gross profit	$	47.0	$	25.4	$	21.5	Gross profit	$	52.0	$	47.0	$	5.1
Operating expenses	Operating expenses	23.8		19.1		4.7		Operating expenses	21.2		23.8		(2.6)
Income from operations		$	23.1	$	6.4	$	16.8
Income (loss) from operations								Income (loss) from operations	$	30.8	$	23.1	$	7.6

Operational metrics:	Operational metrics:							Operational metrics:
Marine segment volumes (metric tons)	Marine segment volumes (metric tons)	4.7		4.2		0.5		Marine segment volumes (metric tons)	4.3		4.7		(0.4)
Marine segment average price per metric ton	Marine segment average price per metric ton	$	637.61	$	395.65	$	241.96	Marine segment average price per metric ton	$	553.16	$	637.61	$	(84.45)

Revenues in our marine segment were ~~$3.0~~$2.4 billion for the three months ended March 31, ~~2022, an increase~~2023, a decrease of ~~$1.3 billion,~~$623.1 million, or ~~79%~~21%, compared to the three months ended March 31, ~~2021.~~2022. The ~~increase~~decrease in revenue was principally driven by a ~~61% increase~~13% decrease in the average price per metric ton of bunker fuel sold in the three months ended March 31, ~~2022~~2023 compared to the three months ended March 31, ~~2021. In addition, total~~2022. Total volumes ~~increased~~decreased by ~~0.5~~0.4 million metric tons, or ~~11%~~9%, ~~to 4.7~~from 4.3 million metric tons infor the three months ended March 31, ~~2022~~2023 compared to ~~the~~4.7

million metric tons for three months ended March 31, ~~2021.~~2022 primarily due to reduced demand in our core resale businesses.

~~Our marine~~Marine segment gross profit for the three months ended March 31, ~~2022~~2023 was ~~$47.0~~$52.0 million, an increase of ~~$21.5~~$5.1 million, or ~~85%~~11%, compared to the three months ended March 31, ~~2021. The increase in gross profit was~~2022 principally ~~attributable to the impact~~as a result of ~~the rise in global oil prices~~a higher interest rate and ~~the resulting constrained credit~~credit-constrained environment.

Our marine segment income from operations for the three months ended March 31, ~~2022~~2023 was ~~$23.1~~$30.8 million, an increase of ~~$16.8~~$7.6 million, or ~~264%~~33%, compared to the three months ended March 31, ~~2021, driven by~~2022, primarily due to the increase in gross profit ~~partially offset by~~as well as a ~~$4.7~~$2.6 million ~~increase~~decrease in operating expenses, largely driven by ~~increased~~lower compensation ~~and employee benefit costs as described in Consolidated Results of Operations above.~~costs.

Liquidity and Capital Resources

Liquidity to fund working capital, as well as make strategic investments to further our growth strategy, is a significant priority for us. Our views concerning liquidity are based on currently available information and if circumstances change significantly, ~~whether as a result of the COVID-19 pandemic or otherwise,~~ the future availability of trade credit or other sources of financing may be reduced, and our liquidity would be adversely affected accordingly.

Sources of Liquidity and Factors Impacting Our Liquidity

Our liquidity, consisting principally of cash and availability under our Credit Facility, fluctuates based on a number of factors, including the timing of receipts from our customers and payments to our suppliers, changes in fuel prices, as well as our financial performance.

Based on the information currently available, we believe that our cash and cash equivalents as of March 31, ~~2022~~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.

Credit ~~Facility and Term Loans.~~Agreement. ~~On April 1, 2022, we entered into Amendment No. 8 to~~The Fourth Amended and Restated Credit Agreement ~~(the "Amendment"~~(as amended, the "Credit Agreement") ~~to amend certain terms~~, matures in April 2027 and ~~conditions of our Credit Facility, including: (i) increasing the~~provides for a term loan as well as a revolving credit facility toof $1.5 billion; (ii) providing a new term loan of $500 million, thereby increasing the total borrowing capacity under the credit facility to $2.0 billion; (iii) modifying the pricing of the loans, including the reference rates for various currencies to reflect the discontinuation of LIBOR; (iv) extending the maturity to April 1, 2027; and (v) modifying certain financial and other covenants to provide greater operating flexibility.billion (the "Credit Facility"). Our availability under ~~our~~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 ~~adjusted~~ consolidated earnings before interest, taxes, depreciation and amortization, ~~("Adjusted EBITDA")~~and share-based compensation, with such adjustments as specified therein, for the four immediately preceding fiscal quarters. The Credit ~~Facility~~Agreement generally limits the total amount of indebtedness we may incur to a consolidated total leverage ratio of not more than 4.75 to 1.

As a result of the foregoing, as well as other covenants and restrictions contained in our Credit ~~Facility,~~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 ~~Facility and our Term Loans~~Agreement could result in an event of default. An event of default, if not cured or waived, would permit acceleration of any outstanding indebtedness under the Credit Facility and our ~~Term Loans,~~term loan, trigger cross-defaults under certain other agreements to which we are a party, and impair our ability to obtain working capital advances and issue letters of credit, which would have a material adverse effect on our business, financial condition, results of operations and cash flows. See Note 6. Debt, Interest Income, Expense, and Other Finance Costs for additional information.

Receivables Purchase Agreements. We also have accounts receivable programs under ~~receivables purchase agreements ("RPAs")~~RPAs that allow us to sell a specified amount of qualifying accounts receivable and receive cash consideration equal to the total balance, less ~~a discount margin,~~an associated fee, which varies based on the outstanding accounts receivable at any given time. The ~~RPA agreements~~RPAs provide the constituent banks with the ability to add or remove customers from these programs in their discretion based on, among other things, the level of risk exposure the bank is willing to accept with respect to any particular customer. The fees the banks charge us to purchase the receivables from these customers can also be impacted for these reasons. ~~During~~See Note 2. Accounts Receivable for additional information.

Cash Flows

The following table reflects the major categories of cash flows for the three months ended March 31, 2023 and 2022 (in millions). For additional details, please see the unaudited Condensed Consolidated Statements of Cash Flows in this Quarterly Report on Form 10-Q.


	For the Three Months Ended March 31,
	2023		2022
Net cash provided by (used in) operating activities	$	143.0	$	(72.0)
Net cash provided by (used in) investing activities	(23.5)		(657.3)
Net cash provided by (used in) financing activities	(192.8)		343.7

Operating Activities. For the three months ended March 31, 2023, net cash provided by operating activities was $143.0 million, compared to $72.0 million net cash used during the three months ended March 31, 2022. The $215.0 million increase in operating cash flows was principally due lower average fuel prices compared to the prior year, which reduced our cost of inventory and decreased both our accounts receivable and accounts payable (net of activity under our RPA programs, as discussed under "Sources of Liquidity and Factors Impacting Our Liquidity" above) offset by increased interest payments driven by higher interest rates. These operating cash inflows were partially offset by a decrease 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 foreign exchange losses) of $95.6 million.

Investing Activities. For the three months ended March 31, 2023, net cash used in investing activities was $23.5 million, compared to net cash used of $657.3 million during the three months ended March 31, 2022. The net cash used in investing activities for the three months ended March 31, 2023 was primarily driven by capital expenditures of $18.8 million. Net cash used in investing activities for the three months ended March 31, 2022 was principally driven by $639.4 million net cash paid for the acquisition of Flyers, as discussed in Note 3. Acquisitions, and ~~2021, we sold receivables~~$16.7 million for capital expenditures.

Financing Activities. For the three months ended March 31, 2023, net cash used in financing activities was $192.8 million compared to net cash provided of $343.7 million for the three months ended March 31, 2022. The net cash used in financing activities for the three months ended March 31, 2023 was primarily attributable to net repayments under our Credit Facility of $123.1 million, payments of deferred consideration related to prior acquisitions of $60.8 million, and dividend payments of $8.6 million. Net cash provided by financing activities for the ~~RPAs with an aggregate face value~~three months ended March 31, 2022 of ~~$2.6 billion~~$343.7 million was primarily driven by net borrowings of debt under our Credit Facility of $376.0 million, primarily driven by incremental borrowings related to the acquisition of Flyers, partially offset by common stock repurchases of $13.7 million, payments for deferred consideration related to prior acquisitions of $10.0 million, and ~~$2.0 billion, respectively. See Note 2. Accounts Receivable for additional information.~~dividend payments on our common stock of $7.4 million.

Future Uses of Liquidity

Cash is primarily used to fund working capital to support our operations as well as for strategic acquisitions and investments. There were no material changes in our expected future uses of liquidity from December 31, ~~2021~~2022 to March 31, ~~2022.~~2023. For a discussion of these matters, refer to "Liquidity and Capital Resources" under Part II, Item 7 ~~- Liquidity~~– Management's Discussion and ~~Capital Resources~~Analysis of Financial Condition and Results of Operations of our ~~2021~~2022 10-K Report.

~~Cash Flows~~

The following table reflects the major categories of cash flows for the three months ended March 31, 2022 and 2021 (in millions). For additional details, please see the unaudited Condensed Consolidated Statements of Cash Flows in this Quarterly Report on Form 10-Q.

For the Three Months Ended March 31,
2022 2021
Net cash provided by (used in) operating activities $ (72.0) $ 103.4
Net cash provided by (used in) investing activities (657.3) (2.7)
Net cash provided by (used in) financing activities 343.7 (20.8)

~~Operating Activities.~~ For the three months ended March 31, 2022, net cash used in operating activities was $72.0 million, compared to $103.4 million net cash provided during the three months ended March 31, 2021. The $175.4 million decrease in operating cash flows was principally attributable to a $161.6 million increase in working capital driven by higher fuel prices and increased volumes during the three months ended March 31, 2022.

~~Investing Activities.~~ For the three months ended March 31, 2022, net cash used in investing activities was $657.3 million, compared to net cash used of $2.7 million during the three months ended March 31, 2021. The net cash used in investing activities for the three months ended March 31, 2022 was primarily driven by $639.4 million net cash paid for the acquisition of Flyers, as discussed in Note 3. Acquisitions, and $14.6 million for capital expenditures. Net cash used in investing activities for the three months ended March 31, 2021 was principally due to capital expenditures of $2.0 million.

~~Financing Activities.~~ For the three months ended March 31, 2022, net cash provided by financing activities was $343.7 million compared to net cash used of $20.8 million for the three months ended March 31, 2021. The net cash provided by financing activities for the three months ended March 31, 2022 was primarily attributable to a net increase in borrowings from our credit facility of $380.3 million, primarily driven by incremental borrowings related to the acquisition of Flyers, partially offset by $13.7 million in purchases of our common stock and dividend payments of $7.4 million. Net cash used in financing activities for the three months ended March 31, 2021 was primarily driven by dividend payments on our common stock of $6.1 million and repayments of debt under our Credit Facility of $4.5 million.

Critical Accounting Estimates

The unaudited Condensed Consolidated Financial Statements are prepared in accordance with accounting principles generally accepted in the United States of ~~America ("U.S. GAAP").~~America. The significant accounting policies used are disclosed in Item 15 -– Financial Statement Schedules, Note 1. Basis of Presentation, New Accounting Standards and Significant Accounting Policies to the Consolidated Financial Statements in our ~~2021~~2022 10-K report.

We make estimates and assumptions that affect the reported amounts on our unaudited Condensed Consolidated Financial Statements and accompanying Notes as of the date of the unaudited Condensed Consolidated Financial Statements. There have been no material changes to the Critical Accounting Estimates disclosed in our ~~2021~~2022 10-K report.

Impairment Assessments of Goodwill, Long-Lived Assets, and Equity Investments

We assess accounting estimates that require consideration of forecasted financial information. Significant judgment is involved in performing these estimates as they are developed based on forecasted assumptions. As of March 31, ~~2022,~~2023, the assumptions used in these assessments, particularly the expected growth rates, the profitability

embedded in the projected cash flows provided by our legacy and newly acquired businesses, the discount rate and the market-based multiples, were defined based on available information considering current market volatility and geopolitical risks. Management also considered the volatility in the Company's market capitalization and evaluated the potential impact that this volatility may have on the estimated fair value of our reporting units.

Based on the assessments performed, and supported by the available information as of March 31, ~~2022,~~2023, 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. If our results differ significantly from our assumptions, such impact could potentially result in impairments.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to our exposures to commodity price, interest rate, or foreign currency risk since December 31, ~~2021.~~2022. Please refer to our ~~2021~~2022 10-K Report for a complete discussion of our exposure to these risks.

For information about our derivative instruments at their respective fair value positions as of March 31, ~~2022,~~2023, see Note 5.4. Derivative Instruments.

Item 4. Controls and Procedures

Management's Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer ("CEO") and our Chief Financial Officer ("CFO"), as appropriate, to allow timely decisions regarding required financial disclosure.

As of the end of the period covered by this 10-Q Report, we evaluated, under the supervision and with the participation of our CEO and CFO, the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(e). Based upon this evaluation, the CEO and CFO concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of March 31, ~~2022.~~2023.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting during the three months ended March 31, ~~2022.~~

2023.

It should be noted that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system will be met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Because of these and other inherent limitations of control systems, there is only the reasonable assurance that our controls will succeed in achieving their goals under all potential future conditions.

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Part II — Other Information

Item 1. 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. See Note ~~10.~~8. Income Taxes and Note ~~13.~~9. Commitments and Contingencies within this 10-Q Report as well as ~~Note 9.~~Notes 10. Income Taxes and 11. Commitments and Contingencies ~~and Note 11. Income Taxes~~ within Part IV. Item 15 -– Notes to the Consolidated Financial Statements in our ~~2021~~2022 10-K Report for additional details regarding certain tax matters.

We are also a party to various claims, complaints and proceedings arising in the ordinary course of our business including, but not limited to, environmental claims, commercial and governmental contract claims, such as property damage, demurrage, personal injury, billing and fuel quality claims, as well as bankruptcy preference claims and administrative claims. We 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. 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 ~~13.~~9. Commitments and Contingencies for additional information.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

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 (1)
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 (2)
1/1/2022 - 1/31/2022 — $ — — $ 195,767
2/1/2022 - 2/28/2022 — — — 195,767
3/1/2022 - 3/31/2022 500 27.41 500 182,053
Total 500 $ 27.41 500 $ 182,053

~~(1)~~ These amounts include shares purchased as part of our publicly announced programs and shares owned and tendered by employees to satisfy the required withholding taxes related to share-based payment awards, which are not deducted from shares available to be purchased under publicly announced programs.

~~(2)~~In March 2020, the Company's Board of Directors approved a stock repurchase program authorizing $200.0 million in common stock repurchases (the "2020 Repurchase Program"). Our repurchase ~~programs do~~program does not require a minimum number of shares of common stock to be purchased, ~~have~~has no expiration date, and repurchases may be suspended or discontinued at any time. As of March 31, ~~2022,~~2023, approximately ~~$182.1~~$147.1 million remains available for purchase under the 2020 Repurchase Program. The 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. We did not repurchase any shares during the first quarter of 2023.

3128

Item 6. Exhibits

The exhibits set forth in the following index of exhibits are filed as part of this 10-Q Report:


Exhibit No.						Description
31.1						Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d — 14(a).

31.2						Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d — 14(a).

32.1						Certification of Chief Executive Officer and Chief Financial Officer under Section 906 of the Sarbanes-Oxley Act of 2002.

101						The following materials from World Fuel Services Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, ~~2022,~~2023, formatted in XBRL (Extensible Business Reporting Language); (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Income and Comprehensive Income, (iii) Condensed Consolidated Statements of Shareholders’ Equity, (iv) Condensed Consolidated Statements of Cash Flows, and (v) Notes to the Condensed Consolidated Financial Statements.

104						Cover page interactive file (formatted in Inline XBRL and contained in Exhibit 101).

3229

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



Date: April ~~29, 2022~~28, 2023			World Fuel Services Corporation


			/s/ Michael J. Kasbar
			Michael J. Kasbar
			Chairman, President and Chief Executive Officer


			/s/ Ira M. Birns
			Ira M. Birns
			Executive Vice President and Chief Financial Officer

3330


	Aviation Segment		Land Segment		Total
As of December 31, 2021	$	400.1	$	461.8	$	861.9
2022 acquisition (1)	—		387.1		387.1
Foreign currency translation of non-USD functional currency subsidiary goodwill	(0.8)		(3.5)		(4.3)
As of March 31, 2022	$	399.3	$	845.4	$	1,244.6


Balance as of	Foreign Currency Translation Adjustments		Cash Flow Hedges		Accumulated Other Comprehensive Income (Loss)
Balance as of January 1, 2022	$	(134.0)	$	(2.7)	$	(136.7)
Other comprehensive income (loss) before reclassifications	(9.4)		(44.1)		(53.5)
Amounts reclassified from accumulated other comprehensive income (loss)	—		24.8		24.8
Less: Net other comprehensive (income) loss attributable to noncontrolling interest	—		—		—
Balance as of March 31, 2022	$	(143.4)	$	(22.0)	$	(165.4)

Balance as of January 1, 2021	$	(120.3)	$	(12.3)	$	(132.6)
Other comprehensive income (loss) before reclassifications	(4.0)		25.5		21.5
Amounts reclassified from accumulated other comprehensive income (loss)	—		(9.1)		(9.1)
Less: Net other comprehensive (income) loss attributable to noncontrolling interest	—		—		—
Balance as of March 31, 2021	$	(124.3)	$	4.0	$	(120.3)


Period	Total Number of Shares Purchased (1)	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 (2)
1/1/2022 - 1/31/2022	—	$	—	—	$	195,767
2/1/2022 - 2/28/2022	—	—		—	195,767
3/1/2022 - 3/31/2022	500	27.41		500	182,053
Total	500	$	27.41	500	$	182,053