UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)



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

For the quarterly period ended March 31, ~~2019~~2020



☐	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 1-9533

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)	~~9800 N.W. 41~~st~~Street~~ ~~Miami, Florida 33178~~ (Address of Principal Executive Offices)~~(Zip~~ (Zip Code)							~~59-2459427~~ (I.R.S. Employer Identification No.)
	Registrant’s telephone number, including area code: ~~(305)~~
		(	305	)	428-8000
	Securities registered pursuant to Section 12(b) of the Act
Title of each class ~~Common Stock , $0.01 par value~~	Trading Symbol (s) ~~INT~~							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. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting 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 ~~67,251,473~~63,317,796 shares of common stock, par value $0.01 per share, issued and outstanding as of April ~~18, 2019.~~24, 2020.

Table of Contents



Part I.	Financial Information

	Item 1.	Financial Statements (Unaudited)
		Consolidated Balance Sheets as of March 31, ~~2019~~2020 and December 31, ~~2018~~2019	1
		Consolidated Statements of Income and Comprehensive Income for the Three Months ended March 31, ~~2019~~2020 and ~~2018~~2019	2
		Consolidated Statements of Shareholders’ Equity for the Three Months ended March 31, ~~2019~~2020 and ~~2018~~2019	3
		Consolidated Statements of Cash Flows for the Three Months ended March 31, ~~2019~~2020 and ~~2018~~2019	4
		Notes to the Consolidated Financial Statements	6

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30

	Item 4.	Controls and Procedures	30

Part II.	Other Information

	Item 1.	Legal Proceedings	31

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3133

	Item 6.	Exhibits	3235

Signatures			3336

Part I — Financial Information


Item 1.	Financial Statements

World Fuel Services Corporation

Consolidated Balance Sheets

(Unaudited - In millions, except per share data)


	As of						As of
	March 31,			December 31,			March 31,			December 31,
	2019			2018			2020			2019
Assets:
Current assets:
Cash and cash equivalents	$	194.0		$	211.7		$	537.0		$	186.1
Accounts receivable, net	2,728.7			2,739.6			1,985.1			2,891.9
Inventories	598.7			523.1			332.8			593.3
Prepaid expenses	55.3			65.7			59.3			80.6
Short-term derivative assets, net	47.3			155.2			278.5			59.5
Other current assets	270.7			279.5			341.0			358.8
Total current assets	3,894.7			3,974.8			3,533.8			4,170.1
Property and equipment, net	356.1			350.3			360.0			360.9
Goodwill	853.3			852.7			915.4			843.7
Identifiable intangible and other non-current assets	629.1			499.0			689.7			617.7
Total assets	$	5,733.2		$	5,676.9		$	5,498.9		$	5,992.4
Liabilities:
Current liabilities:
Current maturities of long-term debt and finance leases	$	45.8		$	41.1
Current maturities of long-term debt							$	53.6		$	54.1
Accounts payable	2,376.6			2,399.6			1,541.1			2,602.7
Customer deposits	93.5			118.2			128.8			126.7
Accrued expenses and other current liabilities	357.2			377.0			385.8			378.9
Total current liabilities	2,873.2			2,935.9			2,109.3			3,162.4
Long-term debt	649.7			659.9			1,145.9			574.7
Non-current income tax liabilities, net	190.6			194.6			208.6			210.1
Other long-term liabilities	164.0			54.9			184.9			151.3
Total liabilities	$	3,877.5		$	3,845.3		$	3,648.7		$	4,098.5
Commitments and contingencies
Equity:
World Fuel shareholders' equity:
Preferred stock, $1.00 par value; 0.1 shares authorized, none issued	—			—			—			—
Common stock, $0.01 par value; 100.0 shares authorized, 67.1 and 67.0 issued and outstanding as of March 31, 2019 and December 31, 2018, respectively	0.7			0.7
Common stock, $0.01 par value; 100.0 shares authorized, 63.2 and 65.2 issued and outstanding as of March 31, 2020 and December 31, 2019, respectively							0.6			0.7
Capital in excess of par value	343.0			340.4			218.2			274.7
Retained earnings	1,639.3			1,606.1			1,785.1			1,761.3
Accumulated other comprehensive loss	(142.7		)	(131.7		)	(157.5		)	(146.3		)
Total World Fuel shareholders' equity	1,840.3			1,815.4			1,846.4			1,890.4
Noncontrolling interest	15.5			16.1			3.7			3.5
Total equity	1,855.8			1,831.6			1,850.1			1,893.9
Total liabilities and equity	$	5,733.2		$	5,676.9		$	5,498.9		$	5,992.4

The accompanying notes are an integral part of these unaudited ~~consolidated financial statements.~~Consolidated Financial Statements.

World Fuel Services Corporation

Consolidated Statements of Income and Comprehensive Income

(Unaudited – In millions, except per share data)


	For the Three Months Ended						For the Three Months Ended
	March 31,						March 31,
	2019			2018			2020			2019
Revenue	$	8,678.8		$	9,181.3		$	8,015.2		$	8,678.8
Cost of revenue	8,427.7			8,937.9			7,756.4			8,427.7
Gross profit	251.1			243.4			258.7			251.1
Operating expenses:
Compensation and employee benefits	110.1			113.9			104.2			110.1
General and administrative	70.6			72.3			83.7			70.6
	180.7			186.2			187.9			180.7
Income from operations	70.4			57.2			70.8			70.4
Non-operating expenses, net:
Interest expense and other financing costs, net	(19.4		)	(16.3		)	(15.4		)	(19.4		)
Other income (expense), net	0.4			(2.3		)	2.2			0.4
	(19.0		)	(18.6		)	(13.2		)	(19.0		)
Income (loss) before income taxes	51.3			38.6			57.6			51.3
Provision for income taxes	14.0			7.3			16.0			14.0
Net income (loss) including noncontrolling interest	37.3			31.3			41.6			37.3
Net income attributable to noncontrolling interest	0.1			0.1
Net income (loss) attributable to noncontrolling interest							0.2			0.1
Net income (loss) attributable to World Fuel	$	37.2		$	31.2		$	41.4		$	37.2

Basic earnings per common share	$	0.55		$	0.46		$	0.64		$	0.55

Basic weighted average common shares	67.1			67.5			64.9			67.1

Diluted earnings per common share	$	0.55		$	0.46		$	0.63		$	0.55

Diluted weighted average common shares	67.4			67.9			65.4			67.4

Comprehensive income:
Net income (loss) including noncontrolling interest	$	37.3		$	31.3		$	41.6		$	37.3
Other comprehensive income (loss):
Foreign currency translation adjustments	0.2			10.2			(33.0		)	0.2
Cash flow hedges, net of income tax benefit of $4.1 and $4.2 for the three months ended March 31, 2019 and 2018, respectively	(11.9		)	(9.7		)
Other comprehensive income (loss):	(11.7		)	0.5
Cash flow hedges, net of income tax expense of $7.4 and income tax benefit of $4.1 for the three months ended March 31, 2020 and 2019, respectively							21.7			(11.9		)
Other comprehensive income (loss)							(11.3		)	(11.7		)
Comprehensive income (loss) including noncontrolling interest	25.6			31.8			30.4			25.6
Comprehensive income (loss) attributable to noncontrolling interest	(0.8		)	(0.3		)	—			(0.8		)
Comprehensive income (loss) attributable to World Fuel	$	26.3		$	32.1		$	30.4		$	26.3

The accompanying notes are an integral part of these unaudited ~~consolidated financial statements.~~Consolidated Financial Statements.

World Fuel Services Corporation

Consolidated Statements of Shareholders’ Equity

(Unaudited - In millions)

Common Stock
Capital in
Excess of
Par Value

Retained
Earnings

Accumulated
Other
Comprehensive
Loss

Total
World Fuel
Shareholders'
Equity

Noncontrolling
Interest
Equity

Shares Amount Total Equity
Balance as of December 31, 2018 67.0
$ 0.7
$ 340.4
$ 1,606.1
$ (131.7 ) $ 1,815.4
$ 16.1
$ 1,831.6
Net income —
—
—
37.2
—
37.2
0.1
37.3
Cash dividends declared —
—
—
(4.0 ) —
(4.0 ) —
(4.0 )
Amortization of share-based payment awards

4.0
—
—
4.0
—
4.0
Issuance of common stock related to share-based payment awards 0.1
—
—
—
—
—
—
—
Purchases of common stock tendered by employees to satisfy the required withholding taxes related to share-based payment awards —
—
(1.4 ) —
—
(1.4 ) —
(1.4 )
Other comprehensive income (loss) —
—
—
—
(11.0 ) (11.0 ) (0.8 ) (11.7 )
Balance as of March 31, 2019 67.1
$ 0.7
$ 343.0
$ 1,639.3
$ (142.7 ) $ 1,840.3
$ 15.5
$ 1,855.8



	Common Stock					Capital in Excess of Par Value			Retained Earnings			Accumulated Other Comprehensive Loss			Total World Fuel Shareholders' Equity			Noncontrolling Interest Equity
	Shares		Amount			Capital in Excess of Par Value			Retained Earnings			Accumulated Other Comprehensive Loss			Total World Fuel Shareholders' Equity			Noncontrolling Interest Equity		Total Equity
Balance as of December 31, 2019	65.2		$	0.7		$	274.7		$	1,761.3		$	(146.3	)	$	1,890.4		$	3.5	$	1,893.9
Cumulative effect of change in accounting principle	—		—			—			(11.1		)	—			(11.1		)	—		(11.1		)
Net income	—		—			—			41.4			—			41.4			0.2		41.6
Cash dividends declared	—		—			—			(6.5		)	—			(6.5		)	—		(6.5		)
Amortization of share-based payment awards	—		—			(1.8		)	—			—			(1.8		)	—		(1.8		)
Issuance (cancellation) of common stock related to share-based payment awards	0.2		—			1.2			—			—			1.2			—		1.2
Purchases of common stock tendered by employees to satisfy the required withholding taxes related to share-based payment awards	—		—			(1.5		)	—			—			(1.5		)	—		(1.5		)
Purchases of common stock	(2.2	)	—			(55.6		)	—			—			(55.6		)	—		(55.6		)
Other comprehensive income (loss)	—		—			—			—			(11.3		)	(11.3		)	—		(11.3		)
Other	—		(0.1		)	1.2			—			—			1.2			—		1.2
Balance as of March 31, 2020	63.2		$	0.6		$	218.2		$	1,785.1		$	(157.5	)	$	1,846.4		$	3.7	$	1,850.1

Common Stock
Capital in
Excess of
Par Value

Retained
Earnings

Accumulated
Other
Comprehensive
Loss

Total
World Fuel
Shareholders'
Equity

Noncontrolling
Interest
Equity

Shares Amount Total Equity
Balance as of December 31, 2017 67.7
$ 0.7
$ 354.9
$ 1,492.8
$ (126.5 ) $ 1,721.9
$ 16.0
$ 1,738.0
Net income —
—
—
31.2
—
31.2
0.1
31.3
Cash dividends declared —
—
—
(4.0 ) —
(4.0 ) —
(4.0 )
Amortization of share-based payment awards —
—
4.2
—
—
4.2
—
4.2
Cancellation of common stock related to share-based payment awards —
—
(0.3 ) —
—
(0.3 ) —
(0.3 )
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 )
Other comprehensive income —
—
—
—
0.8
0.8
(0.3 ) 0.5
Reclassification of certain tax effects from U.S. Tax Reform —
—
—
1.6
—
1.6
—
1.6
Balance as of March 31, 2018 67.7
$ 0.7
$ 358.6
$ 1,521.6
$ (125.7 ) $ 1,755.1
$ 15.9
$ 1,771.0



	Common Stock			Capital in Excess of Par Value			Retained Earnings			Accumulated Other Comprehensive Loss			Total World Fuel Shareholders' Equity			Noncontrolling Interest Equity
	Shares	Amount		Capital in Excess of Par Value			Retained Earnings			Accumulated Other Comprehensive Loss			Total World Fuel Shareholders' Equity			Noncontrolling Interest Equity			Total Equity
Balance as of December 31, 2018	67.0	$	0.7	$	340.4		$	1,606.1		$	(131.7	)	$	1,815.4		$	16.1		$	1,831.6
Net income	—	—		—			37.2			—			37.2			0.1			37.3
Cash dividends declared	—	—		—			(4.0		)	—			(4.0		)	—			(4.0		)
Amortization of share-based payment awards				4.0			—			—			4.0			—			4.0
Issuance of common stock related to share-based payment awards	0.1	—		—			—			—			—			—			—
Purchases of common stock tendered by employees to satisfy the required withholding taxes related to share-based payment awards	—	—		(1.4		)	—			—			(1.4		)	—			(1.4		)
Other comprehensive loss	—	—		—			—			(11.0		)	(11.0		)	(0.8		)	(11.7		)
Balance as of March 31, 2019	67.1	$	0.7	$	343.0		$	1,639.3		$	(142.7	)	$	1,840.3		$	15.5		$	1,855.8

Cash Dividends

During the three months ended March 31, 2020 , the Company's Board of Directors declared quarterly cash dividends of $0.10 per common share representing $6.5 million in total dividends, which were paid on April 9, 2020. During the three months ended March 31, 2019, ~~and 2018,~~ the Company's Board of Directors declared quarterly cash dividends of $0.06 per common share ~~respectively,~~ representing $4.0 million in total dividends, which were paid on April 12, ~~2019 and April 6, 2018, respectively.~~2019.

The accompanying notes are an integral part of these unaudited ~~consolidated financial statements.~~Consolidated Financial Statements.

World Fuel Services Corporation

Consolidated Statements of Cash Flows

(Unaudited - In millions)


	For the Three Months Ended						For the Three Months Ended
	March 31,						March 31,
	2019			2018			2020			2019
Cash flows from operating activities:
Net income including noncontrolling interest	$	37.3		$	31.3		$	41.6		$	37.3
Adjustments to reconcile net income including noncontrolling interest to net cash provided by operating activities:
Depreciation and amortization	22.3			18.8			21.8			22.3
Provision for bad debt	2.4			1.8			9.9			2.4
Share-based payment award compensation costs	4.2			4.2			(1.8		)	4.2
Deferred income tax benefit	(4.5		)	(7.1		)
Foreign currency losses, net	3.4			2.6
Deferred income tax expense (benefit)							(11.7		)	(4.5		)
Foreign currency (gains) losses, net							(19.8		)	3.4
Other	8.2			0.7			(40.9		)	8.2
Changes in assets and liabilities, net of acquisitions:
Accounts receivable, net (reduced by beneficial interests received in exchange for accounts receivables sold of $120.0 for the three months ended March 31, 2018)	11.2			(71.2		)
Accounts receivable, net							900.4			11.2
Inventories	(83.4		)	(84.8		)	245.3			(83.4		)
Prepaid expenses	8.7			6.1			20.7			8.7
Short-term derivative assets, net	164.2			(2.8		)	(189.3		)	164.2
Other current assets	27.3			(25.5		)	17.7			27.3
Cash collateral with financial counterparties	(32.6		)	21.2			(36.9		)	(32.6		)
Other non-current assets	27.3			(28.4		)	(29.5		)	27.3
Accounts payable	(10.9		)	(50.9		)	(1,057.5		)	(10.9		)
Customer deposits	(24.7		)	(5.3		)	3.7			(24.7		)
Accrued expenses and other current liabilities	(103.2		)	(30.2		)	101.5			(103.2		)
Non-current income tax, net and other long-term liabilities	(46.4		)	(9.3		)	34.3			(46.4		)
Total adjustments	(26.5		)	(260.1		)	(32.1		)	(26.5		)
Net cash provided by (used in) operating activities	10.8			(228.8		)	9.5			10.8
Cash flows from investing activities:
Cash receipts of retained beneficial interests in receivable sales	—			120.0
Acquisition of businesses, net of cash acquired	—			(22.0		)	(130.5		)	—
Capital expenditures	(21.8		)	(15.4		)	(17.4		)	(21.8		)
Other investing activities, net	3.3			3.6			(1.1		)	3.3
Net cash (used in) provided by investing activities	(18.5		)	86.1			(149.0		)	(18.5		)
Cash flows from financing activities:
Borrowings of debt	1,542.0			1,468.9			1,732.0			1,542.0
Repayments of debt	(1,547.5		)	(1,545.1		)	(1,161.3		)	(1,547.5		)
Dividends paid on common stock	(4.0		)	(4.0		)	(6.5		)	(4.0		)
Repurchases of common stock							(55.6		)	—
Other financing activities, net	(1.4		)	(0.5		)	(1.5		)	(1.4		)
Net cash (used in) financing activities	(10.9		)	(80.8		)
Net cash provided by (used in) financing activities							507.0			(10.9		)
Effect of exchange rate changes on cash and cash equivalents	0.9			4.1			(16.5		)	0.9
Net (decrease) increase in cash and cash equivalents	(17.7		)	(219.4		)
Net increase (decrease) in cash and cash equivalents							351.0			(17.7		)
Cash and cash equivalents, as of the beginning of the period	211.7			372.3			186.1			211.7
Cash and cash equivalents, as of the end of the period	$	194.0		$	152.9		$	537.0		$	194.0

The accompanying notes are an integral part of these unaudited ~~consolidated financial statements.~~Consolidated Financial Statements.

Supplemental Schedule of Noncash Investing and Financing Activities:

1. Cash dividends declared, but not yet paid, were $6.5 million and $4.0 million as of March 31, 2020 and 2019, ~~and 2018,~~ respectively.

2. Deferred consideration for acquisition of business was $30.0 million as of March 31,2020.

The accompanying notes are an integral part of these unaudited ~~consolidated financial statements.~~Consolidated Financial Statements.

World Fuel Services Corporation

Notes to the Consolidated Financial Statements

(Unaudited)

1. Basis of Presentation 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, marine and land transportation industries. In recent years, we have expanded our product and service offerings to include energy advisory services and supply fulfillment with respect to natural gas and power and transaction and payment management solutions to commercial and industrial customers. Our intention is to become a leading global energy management company offering a full suite of energy advisory, management and fulfillment services, ~~and~~ technology solutions as well as sustainability products and services across the energy product spectrum. We also ~~seek to become a leading transaction and payment management company, offering~~offer payment management solutions to commercial and industrial customers, principally in the aviation, land and marine transportation industries. We will continue to focus on enhancing the portfolio of products and services we provide based on changes in customer demand, including sustainability offerings and renewable fuel products.

We prepared the ~~consolidated financial statements~~Consolidated Financial Statements following the requirements of the United States (“U.S.”) Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by accounting principles generally accepted in the U.S. (“U.S. GAAP”) can be condensed or omitted.

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~~Consolidated Financial Statements and accompanying notes included in our ~~2018~~2019 Annual Report on Form 10-K (“~~2018~~2019 10-K Report”). Certain amounts in the ~~consolidated financial statements~~Consolidated Financial Statements and ~~associated~~accompanying notes may not add due to rounding. All percentages have been calculated using unrounded amounts.

~~Our net income~~COVID-19

The outbreak of COVID-19, which was declared a pandemic by the World Health Organization in March 2020, has created significant volatility, uncertainty and disruption in the global economy. The rapid spread of the virus has caused governments around the world to implement stringent measures to help control its spread, including, without limitation, quarantines, “stay-at-home” or “shelter-in-place” orders, social-distancing mandates, travel restrictions, and closures or reduced operations for businesses, governmental agencies, schools and other institutions, among others.

Beginning in the quarterly period ended March 31, 2020, the aviation, marine and land transportation industries, along with global economic conditions generally, have been significantly disrupted by the pandemic. A large number of our customers in these industries have experienced substantial reductions in their operations due to travel restrictions and stay-at-home orders, as well as the extended shutdown of various businesses in affected regions. Furthermore, government measures have also led to a precipitous decline in fuel prices in response to concerns about demand for fuel, further exacerbated by recent disagreements regarding crude oil production levels between the Organization of Petroleum Exporting Countries (OPEC) members and other oil-producing countries such as Russia, as well as related global storage considerations.

While the pandemic and associated impacts on economic activity had a limited adverse effect on our operating results for the ~~three months ending~~quarterly period ended March 31, ~~2019~~2020, we have since seen a significant decline in demand and related sales volume as large sectors of $37.2 million, or $0.55 per diluted common share, includes a discrete tax benefit of $3.2 million with respect to a foreign tax filing and $3.4 million of operating income ($2.3 million after-tax), each of which shouldthe global economy have been ~~recognized~~adversely impacted by the crisis. In response to these developments, in March 2020, we took swift action to ensure the safety of our employees and other stakeholders, and initiated a ~~prior period. Excluding these misstatements, which~~number of initiatives relating to cost reduction, liquidity and operating efficiencies.

We make estimates and assumptions that affect the reported amounts on our financial statements and accompanying notes as of the date of the financial statements. We assessed accounting estimates that require consideration of forecasted financial information, including, but not limited to, our allowance for credit losses, the carrying value of our goodwill, intangible assets, and other long-lived assets. This assessment was conducted in the context of information reasonably available to us, as well as our consideration of the future potential impacts of COVID-19 on our business as of March 31, 2020. At this time, we are unable to predict with specificity the ultimate impact of the crisis, as it will depend on the magnitude, severity and duration of the pandemic, as well as how quickly, and to what extent, normal economic and operating conditions resume on a sustainable basis globally. Accordingly, if the impact is more severe or longer in duration than we have ~~determined were not material to current or prior periods, our net income would have been $31.7 million, or $0.47 per diluted common share.~~assumed, such impact could potentially result in impairments and increases in credit allowances.

Significant Accounting Policies

There have been no significant changes, other than those related to the adopted new accounting standards below, in the Company's accounting policies from those disclosed in our ~~2018~~2019 10‑K Report. The significant accounting policies we use for quarterly financial reporting are disclosed in Note 11. Basis of Presentation, New Accounting Standards and Significant Accounting Policies of the ~~“Notes~~accompanying notes to the Consolidated Financial ~~Statements”~~Statements included in our ~~2018~~2019 10‑K Report, and in the ~~adopted accounting standards below.~~section below Adoption of New Accounting Standards.

Adoption of New Accounting ~~Standard~~Standards

~~Leases (Topic 842).~~ ~~In February 2016, ASU 2016-02 was issued. The primary objective~~We included below a description of ~~the~~recent new standard, which amends the existing lease guidance and adds additional disclosures, is to increase transparency and comparability among organizations by recognizing nearly all lease assets and lease liabilities on the balance sheet, including operating leasesaccounting standards or accounting standards updates that ~~under the prior standard were off-balance sheet.~~

~~Topic 842 defines a lease as a contract that conveys the right to control the use of~~had an identified asset for a period of time in exchange for consideration. Control over the use of the identified asset means that the customer has the right to obtain substantially all of the economic benefits from the use of the asset and the right to direct the use of the asset.

ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 (including interim periods within those periods) and early adoption is permitted. The Company adopted ASU 2016-02 in the first quarter of 2019 utilizing the modified retrospective transition method and applying the transition provisions at the effective date. We implemented the new standard using the package of practical expedients under the transition provisions that allows us not to reassess whether a contract contains a lease, how the lease is classified and if initial direct costs can be capitalized. For all the lessee arrangements, we have elected an accounting policy to combine non-lease components with the related lease components and treat the combined items as a lease for accounting purposes. Lastly, we have elected not to recognize the lease asset and related lease liability for leases with a lease term of 12 months or less.

~~As of the date of implementation on January 1, 2019, the~~ impact ~~of the adoption of the new lease standard resulted in the recognition of the right of use assets of $167.3 million and lease liability of $173.6 million~~ on the Company’s consolidated ~~balance sheet. The difference between the right of use assets~~financial statements. New accounting standards or accounting standards updates not listed below were assessed and ~~lease liabilities is primarily the result of accrued lease payments and cumulative lease prepayments as well as the remaining balance of lease incentives received. Subsequent~~determined to ~~adoption, the Company does~~be either not ~~anticipate the~~applicable or did not have a material impact on ~~its results of operations and cash flows to be material.~~

~~Accounting Standards Issued but Not Yet Adopted~~the Company’s consolidated financial statements or processes.

Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial ~~Instruments~~Instruments.. In June 2016, ~~ASU~~Accounting Standards Update ("ASU") 2016-13 was ~~issued.~~issued, which replaced the incurred loss impairment model with a model that reflects expected credit losses over the lifetime of the asset and requires consideration of a broader range of reasonable and supportable information to determine credit loss estimates. The ~~amendments~~guidance in this update, ~~will change~~including the subsequent related codification amendments, changed how entities account for credit impairment from trade and other receivables, net investments arising from sales-type and direct financing leases, debt securities, purchased-credit impaired financial assets and other instruments in addition to loans. ~~ASU 2018-19 issued in November 2018, clarifies that receivables arising from operating leases are not within the scope of Subtopic 326-20.~~ For receivables and certain other instruments that are not measured at fair value, entities ~~will be~~are required to estimate expected credit losses. Under the expected loss model, an entity recognizes a loss upon initial recognition of the asset that reflects all future events that ~~will~~could lead to a loss being realized, regardless of whether it is probable that the future event will occur.

The Company adopted ASU 2016-13, including the related codification amendments, in the first quarter of 2020 utilizing the modified retrospective transition method and applying the transition provisions at the effective date.

The ~~amendments in this update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted as~~Company implemented changes to business processes and internal controls that support the new standard. As of the ~~fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. An entity will apply most~~date of implementation on January 1, 2020, the Company recognized $11.1 million as a reduction to the opening retained earnings balance. The main drivers of the ~~amendments in this update using a modified-retrospective approach through a cumulative-effect adjustment~~consolidated impact at transition are related to ~~retained earnings as~~the inclusion of future economic conditions, the ~~beginning~~exclusion of freestanding credit enhancements when estimating the ~~first reporting period in which~~expected credit loss and estimating the ~~guidance is effective. We are currently evaluating the impact that the new standard would have on our consolidated financial statements and disclosures.~~lifetime credit losses of notes receivable.

Accounting Standards Issued but Not Yet Adopted

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

2. Accounts Receivable

Accounts receivable and allowance for credit losses

We extend credit on an unsecured basis to most of our customers. Our exposure to expected credit losses depends on the financial condition of our customers and other macroeconomic factors beyond our control, such as deteriorating conditions in the world economy or in the industries we serve, changes in oil prices and political instability. While we actively manage our credit exposure and work to respond to both changes in our customers’ financial conditions or macroeconomic events, there can be no guarantee we will be able to mitigate all of these risks successfully.

We perform ongoing credit evaluations of our customers and adjust credit limits based upon payment history and the customer’s current creditworthiness based on expected exposure. Our payment terms with customers are based on each customers' creditworthiness and are generally 30-60 days, although certain markets and other customer-specific factors may warrant longer payment terms. Accounts receivable balances that are not paid within the terms of the sales agreement may be subject to finance fees based on the outstanding balance. Although we analyze customers’ payment history and expected creditworthiness, since 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.

Accounts receivable are measured at amortized cost. The health of our receivables is continuously monitored using a risk-based model, taking into consideration both the timeliness and predictability of collections from our customers. We maintain a provision for expected credit losses based upon our historical experience with our customers, along with any specific customer collection issues that we have identified from current financial information and business prospects, as well as any political or economic conditions or other market factors, including certain assumptions based on reasonable forward-looking information from market sources. Principally, based on these credit risk factors, portfolio segments are defined and an internally derived risk-based credit loss reserve is established and applied to each portfolio segment. Customer account balances that are deemed to be at high risk of collectability are reserved at higher rates than customer account balances which we expect to collect without difficulty.

We had accounts receivable of $2.0 billion and $2.9 billion as of March 31, 2020 and December 31, 2019, respectively. We also had allowance for credit losses related to accounts receivables and other insignificant financing receivables of $56.1 million (including the $11.1 million cumulative transition adjustment to retained earnings related to the implementation of ASU 2016-13) and $35.5 million, as of March 31, 2020 and December 31, 2019, respectively. Changes to the expected credit loss provision during the three months ended March 31, 2020 include global economic outlook considerations as a result of the Company’s assessment of reasonable and supportable forward-looking information. Based on an aging analysis at March 31, 2020, 96% of our net accounts receivable were outstanding less than 60 days.

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



	Total
Balance as of January 1, 2020	$	46.6
Charges to provision for credit losses	9.9
Write-off of uncollectible receivables	(0.6		)
Recoveries of credit losses	$	0.1
Translation adjustments	—
Balance as of March 31, 2020	$	56.1

Financing programs

We have accounts receivable financing programs under receivables purchase agreements (“RPAs”) with Wells Fargo Bank, N.A. and Citibank, N.A. that allow for the sale of our accounts receivable in an amount up to ~~an aggregate limit of $725.0 million~~100% of our outstanding qualifying accounts ~~receivable.~~receivable balances and receive cash consideration equal to the total balance, less a discount margin equal to LIBOR plus 1% to 3%. Accounts receivable sold under the RPAs are accounted for as sales, in accordance with FASB ASC Topic 860, Transfers and Servicing, and excluded from Accounts receivable, net on the accompanying Consolidated Balance Sheets. Fees and interest paid under the RPAs are recorded within Interest expense and other financing costs, net on the Consolidated Statements of Comprehensive Income.

Under the RPAs, accounts receivable sold, which remained outstanding as of March 31, 2020 and December 31, 2019, were $288.3 million and $405.9 million, respectively. The fees and interest paid under the RPAs were $4.4 million and $5.8 million for the three months ended March 31, 2020 and 2019, respectively. For the three months ended March 31, 2020 and 2019, ~~and 2018,~~ cash

payments to the owners of ~~accounts receivable~~account receivables were ~~$2.0~~$1.8 billion and ~~$1.9~~$2.0 billion, respectively, and cash proceeds from the sale of ~~accounts receivable~~account receivables were $1.7 billion and $2.0 billion, ~~and $1.9 billion~~ respectively. The fees and financing costs under the RPA were $5.8 million and $4.0 million for the three months ended March 31, 2019 and 2018, respectively. As of March 31, 2019 and December 31, 2018, our sold accounts receivable under the RPAs was $479.0 million and $508.2 million, respectively.

3. Acquisitions

~~2018 Acquisitions~~2020 Acquisition

During the ~~first quarter of 2018,~~three months ended March 31, 2020, we completed ~~one~~the acquisition of the aviation fuel business from Universal Weather and Aviation, Inc. (“UVair fuel business”), which serves business and general aviation customers worldwide. The acquisition was accounted for as a business combination.

The following table summarizes the aggregate consideration paid for this acquisition and the provisional amounts of the assets acquired and liabilities assumed, recognized at the acquisition date. The Company is in the ~~land segment.~~ process of obtaining information to finalize the valuations of certain acquired assets and assumed liabilities. Thus, the provisional measurements of these acquired assets and assumed liabilities are subject to change and will be finalized no later than one year from the acquisition date (amounts in millions):



	Total
Cash paid for acquisition of business	$	131.0
Amounts due to sellers	30.0
Estimated purchase price	$	161.0

Assets acquired:
Accounts receivable	40.1
Goodwill and identifiable intangible assets	127.1
Other current and long-term assets	4.5

Liabilities assumed:
Accounts payable	(9.9		)
Other current and long-term liabilities	(0.9		)

Estimated purchase price	$	161.0

The goodwill of $82.9 million was assigned to the aviation segment, of which $73.5 million is anticipated to be deductible for tax purposes, and is attributable primarily to the expected synergies and other benefits that we believe will result from combining the acquired operations with the aviation segment operations. The identifiable intangible assets were $44.3 million, and primarily consisted of customer relationships and other identifiable assets.

The financial position, results of operations and cash flows of ~~the 2018~~this acquisition ~~has~~have been included in our ~~consolidated financial statements~~Consolidated Financial Statements since ~~its~~the acquisition date and did not have a material impact on our consolidated revenue and net income for the three months ended March 31, ~~2018.~~2020; accordingly, pro forma information for this acquisition has not been provided as the impact was not considered material.

4. ~~Derivatives~~

We enter into financial derivative contracts to mitigate the risk of market price fluctuations in aviation, land and marine fuel, to offer our customers fuel pricing alternatives to meet their needs and to mitigate the risk of fluctuations in foreign currency exchange rates. If the derivative instrument is not designated in a hedge relationship, changes in the estimated fair market value are recognized as a component of revenue, cost of revenue, or other income (expense) in the consolidated statements of income and comprehensive income.

Derivatives which qualify for hedge accounting may be designated as either a fair value or cash flow hedge. For our fair value hedges, changes in the estimated fair market value of the hedging instrument and the hedged item are recognized in the same line item as the underlying transaction type in the consolidated statements of income and comprehensive income. The gains or losses on derivative instruments designated as cash flow hedges of forecasted transactions are initially reported as a component of accumulated other comprehensive income (AOCI) and subsequently reclassified into earnings once the future transactions affect earnings. Cash flows for our hedging instruments are classified in the same category as the underlying hedged items. If for any reason hedge accounting is discontinued, then any cash flows subsequent to the date of discontinuance will be classified in a manner consistent with the nature of the instrument.Derivative Instruments

The following describes our derivative classifications:

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

Cash Flow Hedges. Includes ~~certain~~ derivative contracts we execute to mitigate the risk of price ~~or foreign currency~~and interest rate volatility in forecasted transactions.

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

In March 2020, we entered into a $300 million, one-month LIBOR, floating-for-fixed non-amortizing interest rate swap contract ("IR Swap") with a maturity date in March 2025. The IR Swap was designated as a cash flow hedge to mitigate potential adverse changes in interest rates related to certain variable rate debt obligations. The IR Swap is measured at fair value each reporting period and changes in fair value are recorded to Accumulated other comprehensive income or loss (AOCI) on our Consolidated Balance Sheets. The amounts recorded in AOCI are subsequently reclassified to our Consolidated Statements of Income and Comprehensive Income within Interest expense and other financing costs, net when the underlying hedged variable rate interest payments are accrued. The fair value of the IR Swap is recorded on our Consolidated Balance Sheets within Short-term derivative assets, net or Accrued expenses and other current liabilities for fair value associated with cash flows due within twelve months of March 31, 2020, and within Identifiable intangible and other non-current assets or Other long-term liabilities for the fair value associated with cash flows due after twelve months from March 31, 2020.

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


		Gross Derivative Assets				Gross Derivative Liabilities					Gross Derivative Assets				Gross Derivative Liabilities
		As of				As of					As of				As of
		March 31,		December 31,		March 31,		December 31,			March 31,		December 31,		March 31,		December 31,
		2019		2018		2019		2018			2020		2019		2020		2019
Derivative Instruments	Consolidated Balance Sheets location									Consolidated Balance Sheets location
Derivatives designated as hedging instruments	Derivatives designated as hedging instruments									Derivatives designated as hedging instruments
Commodity contracts	Short-term derivative assets, net	$	0.1	$	168.5	$	—	$	122.5	Short-term derivative assets, net	$	4.8	$	—	$	0.7	$	—
										Identifiable intangible and other non-current assets	—		—		—		—
										Accrued expenses and other current liabilities	416.1		1.7		362.4		20.0
										Other long-term liabilities	—		—		0.1		—
											$	421.0	$	1.7	$	363.1	$	20.0

Interest rate contracts										Short-term derivative assets, net	$	—	$	—	$	—	$	—
										Identifiable intangible and other non-current assets	$	—	$	—	$	—	$	—
	Identifiable intangible and other non-current assets	—		19.7		—		9.6		Accrued expenses and other current liabilities	—		—		0.7		—
	Accrued expenses and other current liabilities	111.0		0.1		123.9		—		Other long-term liabilities	$	—	$	—	$	1.3	$	—
Total derivatives designated as hedging instruments	Total derivatives designated as hedging instruments	$	111.1	$	188.2	$	123.9	$	132.2	Total derivatives designated as hedging instruments	$	421.0	$	1.7	$	365.1	$	20.0

Derivatives not designated as hedging instruments	Derivatives not designated as hedging instruments									Derivatives not designated as hedging instruments
Commodity contracts	Short-term derivative assets, net	$	65.4	$	537.6	$	18.5	$	429.0	Short-term derivative assets, net	$	397.6	$	65.7	$	115.1	$	7.2
	Identifiable intangible and other non-current assets	32.4		71.7		15.9		40.0		Identifiable intangible and other non-current assets	67.0		23.0		22.5		4.8
	Accrued expenses and other current liabilities	288.1		30.7		335.2		126.4		Accrued expenses and other current liabilities	486.4		161.0		721.3		203.4
	Other long-term liabilities	27.7		12.9		38.2		40.4		Other long-term liabilities	29.0		7.7		60.8		19.7
		$	413.6	$	652.9	$	407.8	$	635.8		$	980.0	$	257.3	$	919.7	$	235.0

Foreign currency contracts	Short-term derivative assets, net	$	0.8	$	4.4	$	0.5	$	0.8	Short-term derivative assets, net	$	25.5	$	1.2	$	5.3	$	0.2
	Identifiable intangible and other non-current assets	0.1		0.1		—		—		Identifiable intangible and other non-current assets	0.1		—		—		—
	Accrued expenses and other current liabilities	1.6		0.1		2.1		0.4		Accrued expenses and other current liabilities	1.5		0.9		4.5		11.4
		$	2.6	$	4.6	$	2.6	$	1.2		$	27.1	$	2.0	$	9.8	$	11.6
Total derivatives not designated as hedging instruments	Total derivatives not designated as hedging instruments	$	416.2	$	657.5	$	410.4	$	637.0	Total derivatives not designated as hedging instruments	$	1,007.0	$	259.4	$	929.5	$	246.6

Total derivatives		$	527.3	$	845.8	$	534.3	$	769.1		$	1,428.0	$	261.1	$	1,294.6	$	266.6

For information regarding our derivative instruments measured at fair value after netting and collateral, see Note 7. Fair Value Measurements.

The following table summarizes the gross notional values of our commodity and foreign currency exchange derivative contracts used for risk management purposes that were outstanding as of March 31, ~~2019~~2020 (in millions):



	As of March 31,
Derivative Instruments	Units	~~2019~~2020
Commodity contracts
Long	BBL	~~104.7~~81.4
Short	BBL	(~~96.4~~58.7	)

Foreign currency exchange contracts
Sell U.S. dollar, buy other currencies	USD	(~~24.4~~144.8	)
Buy U.S. dollar, sell other currencies	USD	~~255.5~~423.9

As of March 31, ~~2019,~~2020, and December 31, ~~2018,~~2019, the following amounts were recorded on ~~the consolidated balance sheets~~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	Carrying Amount of Hedged Asset/(Liabilities)				Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Asset/(Liabilities)					Carrying Amount of Hedged Asset/(Liabilities)				Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Asset/(Liabilities)
	As of				As of					As of				As of
	March 31, 2019		December 31, 2018		March 31, 2019		December 31, 2018			March 31, 2020		December 31, 2019		March 31, 2020			December 31, 2019
Inventory	$	45.0	$	44.7	$	1.6	$	(6.6	)	$	12.8	$	30.7	$	(14.5	)	$	2.3

The following table presents the effect of fair value and cash flow hedges on income and expense line items in our Consolidated Statements of Income and Comprehensive Income (in millions):

Location and Amount of Gain and (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships
For the Three Months Ended
March 31, 2019 March 31, 2018
Revenue Cost of Revenue Revenue Cost of Revenue
Total amounts of income and expense line items in which the effects of fair value or cash flow hedged are recorded $ 8,678.8
$ 8,427.7
$ 9,181.3
$ 8,937.9
Gains or Loss on fair value hedge relationships
Commodity contracts
Hedged Item —
16.2
—
5.5
Derivatives designated as hedging instruments —
(13.5 ) —
(5.6 )
Gains or Loss on cash flow hedge relationships
Commodity contracts
Amount of Gain (Loss) Reclassified from AOCI into Income (3.8 ) (8.4 ) (3.6 ) 18.2
Total amount of income and expense line items excluding the impact of hedges $ 8,682.6
$ 8,422.1
$ 9,184.9
$ 8,956.0



		Location and Amount of Gain and (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships
		For the Three Months Ended
		March 31, 2020							March 31, 2019
		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		$	8,015.2	$	7,756.4		$	16.2	$	8,678.8		$	8,427.7		$	20.5
Gains or Loss on fair value hedge relationships:
Commodity contracts:
	Hedged Item	—		(23.2		)	—		—			16.2			—
	Derivatives designated as hedging instruments	—		18.5			—		—			(13.5		)	—
Gains or Loss on cash flow hedge relationships:
Commodity contracts:
	Amount of Gain (Loss) Reclassified from AOCI into Income	14.0		(1.2		)	—		(3.8		)	(8.4		)	—
Interest rate contracts:
	Amount of Gain (Loss) Reclassified from AOCI into Income	—		—			—		—			—			—
Total amount of income and expense line items excluding the impact of hedges		$	8,001.1	$	7,750.5		$	16.2	$	8,682.6		$	8,422.1		$	20.5

For the three months ended March 31, ~~2019~~2020 and ~~2018,~~2019, there were no0 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, 2020, on a pre-tax basis for commodity cash flow hedges, $397.2 million and $385.1 million is scheduled to be reclassified from Accumulated other comprehensive loss as an increase to Revenue and increase to Cost of revenue, respectively, over the next twelve months.

The following table presents the effect and financial statement location of our derivative instruments in cash flow hedging relationships on ~~our accumulated~~Accumulated other comprehensive income and Consolidated Statements of Income and Comprehensive Income (in millions):


Amount of Gain (Loss) Recognized in Accumulated Other Comprehensive Income	For the Three Months Ended						Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income	For the Three Months Ended						For the Three Months Ended						Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income	For the Three Months Ended
	March 31,							March 31,						March 31,							March 31,
Derivative Instruments	2019			2018			Location	2019			2018			2020			2019			Location	2020			2019
Commodity contracts	$	(220.5	)	$	(2.3	)	Revenue	$	(3.8	)	$	(3.6	)	$	334.1		$	(220.5	)	Revenue	$	14.0		$	(3.8	)
Commodity contracts	196.4			10.2			Cost of Revenue	(8.4		)	18.2			(297.7		)	196.4			Cost of revenue	(1.2		)	(8.4		)
Foreign Currency contracts	—			(2.8		)	Other Income (expense) net	—			—
Total (Loss) Gain	$	(24.1	)	$	5.1		Total (Loss) Gain	$	(12.2	)	$	14.6
Interest rate contracts														(1.5		)	—			Interest expense and other financing costs, net	—			—
Total Gain (Loss)														$	34.9		$	(24.1	)	Total Gain (Loss)	$	12.9		$	(12.2	)

The following table presents the effect and financial statement location of our derivative instruments not designated as hedging instruments on our Consolidated Statements of Income and Comprehensive Income (in millions):


Amount of Realized and Unrealized Gain (Loss)		For the Three Months Ended								For the Three Months Ended
			March 31,								March 31,
Derivative Instruments - Non-designated	Location		2019			2018			Location		2020		2019
Commodity contracts
	Revenue		$	75.0		$	47.6		Revenue		$	79.1	$	75.0
	Cost of revenue		(65.9		)	(37.0		)	Cost of revenue		15.4		(65.9		)
			$	9.1		$	10.6				$	94.5	$	9.1
Foreign currency contracts
	Revenue		$	(0.1	)	$	(0.6	)	Revenue		$	0.5	$	(0.1	)
	Other (expense), net		0.5			(2.8		)	Other (expense), net		18.5		0.5
			$	0.4		$	(3.4	)			$	18.9	$	0.4
Total Gain (Loss)			$	9.5		$	7.2				$	113.5	$	9.5

Credit-Risk-Related Contingent Features

We enter into derivative ~~instrument~~ contracts which may require us to provide collateral periodically. ~~Certain~~Additionally, certain derivative contracts contain credit-risk-related contingent clauses which are triggered by credit events. These credit events may include the requirement to provide additional collateral or the immediate settlement of the derivative instruments upon the occurrence of asuch credit ~~downgrade~~event or ~~if certain defined financial ratios fall below an established threshold.~~default. The following table presents the potential collateral requirements for derivative liabilities with credit-risk-contingent features as of March 31, 2020 and December 31, 2019 (in millions):

Potential Collateral Requirements for
Derivative Liabilities with
Credit-Risk-Contingent Features
As of March 31, 2019 As of December 31, 2018
Net derivatives liability positions with credit contingent features $ 2.6
$ 7.2
Maximum potential collateral requirements $ 2.6
$ 7.2



	Potential Collateral Requirements for Derivative Liabilities with Credit-Risk-Contingent Features
	As of March 31, 2020			As of December 31, 2019
Net derivative liability positions with credit contingent features	$	95.2		$	45.6
Collateral posted and held by our counterparties	(48.2		)	—
Maximum additional potential collateral requirements	$	47.0		$	45.6

~~At March 31, 2019 and December 31, 2018, there was no collateral held by our counterparties on these derivative contracts with credit-risk-contingent features.~~

5. Goodwill

Goodwill arises because the purchase price paid for our acquisitions reflects numerous factors, including the strategic fit and expected synergies these acquisitions bring to our existing operations. Goodwill is recorded at fair value and is reviewed at least annually for impairment.

The following table provides the components of and changes in the carrying amount of goodwill for the three months ended March 31, 2020 (in millions):


	Aviation			Land		Total		Aviation			Land ⁽¹⁾			Total
Balance as of December 31, 2018	$	322.9		$	529.7	$	852.7
Balance as of December 31, 2019								$	323.6		$	520.1		$	843.7
Additions	—			—		—		82.9			—			82.9
Foreign exchange and other adjustments	(1.2		)	1.9		0.7		(1.4		)	(9.7		)	(11.1		)
Balance as of March 31, 2019	$	321.7		$	531.7	$	853.3
Balance as of March 31, 2020								$	405.1		$	510.4		$	915.4

⁽¹⁾At March 31, 2020, $445.7 million of the land segment's goodwill amount relates to the land reporting unit.

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

Our debt consisted of the following as of March 31, 2020 and December 31, 2019 (in millions):


	As of				As of
	March 31,		December 31,		March 31,		December 31,
	2019		2018		2020		2019
Credit Facility	$	170.0	$	170.0	$	630.0	$	55.0
Term Loans	506.4		514.8		512.6		515.6
Finance Leases	16.7		13.8		17.7		18.7
Other	2.4		2.3
Other*					39.2		39.5
Total debt	$	695.5	$	701.0	$	1,199.5	$	628.8
Current maturities of long-term debt and capital leases	$	45.8	$	41.1
Current maturities of long-term debt					$	53.6	$	54.1
Long-term debt	$	649.7	$	659.9	$	1,145.9	$	574.7

* Includes secured borrowings of $37.1 million (EUR 33.6 million), due within 12 months, for the transfer of tax receivables as of March 31, 2020.

The following table provides additional information about our interest income (expense), and other financing costs, net, for the periods presented for the three months ended March 31, 2020 and 2019 (in millions):


	For the Three Months Ended						For the Three Months Ended
	March 31,						March 31,
	2019			2018			2020			2019
Interest income	$	1.1		$	0.6		$	0.9		$	1.1
Interest expense and other financing costs	(20.5		)	(16.9		)	(16.2		)	(20.5		)
	$	(19.4	)	$	(16.3	)	$	(15.4	)	$	(19.4	)

7. Fair Value Measurements

The carrying amounts of cash and cash equivalents, net accounts receivable, ~~net,~~ accounts payable and accrued expenses and other current liabilities approximate fair value based on ~~the~~their short-term ~~maturities of these instruments.~~maturities. The carrying values of our debt and notes ~~receivables~~receivable approximate fair value since these instruments bear interest either at variable rates or fixed rates which are not significantly different from market rates. Based on the fair value hierarchy, our total debt of ~~$0.7~~$1.2 billion and ~~$0.7~~$0.6 billion as of March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively, and our notes receivable of ~~$27.3~~$24.5 million and ~~$28.2~~$21.0 million as of March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively, are categorized inas Level 2.

The following ~~table presents~~tables present information about our gross assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2020 and December 31, 2019 (in millions):


	Fair Value Measurements as of March 31, 2019									Fair Value Measurements as of March 31, 2020
		Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total			Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total
Assets:
Commodities contracts		$	416.7	$	107.8	$	0.3	$	524.7		$	930.1	$	426.2	$	44.6	$	1,400.9
Foreign currency contracts		—		2.6		—		2.6			—		27.1		—		27.1
Interest rate contract											—		—		—		—
Cash surrender value of life insurance		—		6.7		—		6.7			—		9.0		—		9.0
Total assets at fair value		$	416.7	$	117.0	$	0.3	$	534.0		$	930.1	$	462.3	$	44.6	$	1,437.0

Liabilities:
Commodities contracts		$	427.2	$	104.4	$	0.2	$	531.7		$	965.4	$	306.5	$	11.0	$	1,282.8
Foreign currency contracts		—		2.6		—		2.6			—		9.8		—		9.8
Interest rate contract											$	—	$	2.0	$	—	$	2.0
Total liabilities at fair value		$	427.2	$	106.9	$	0.2	$	534.3		$	965.4	$	318.3	$	11.0	$	1,294.6

	Fair Value Measurements as of December 31, 2018									Fair Value Measurements as of December 31, 2019
		Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total			Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total
Assets:
Commodities contracts		$	585.6	$	254.6	$	0.9	$	841.2		$	148.3	$	100.0	$	10.7	$	259.0
Foreign currency contracts		—		4.6		—		4.6			—		2.0		—		2.0
Cash surrender value of life insurance		—		6.3		—		6.3			—		9.4		—		9.4
Total assets at fair value		$	585.6	$	265.6	$	0.9	$	852.1		$	148.3	$	111.4	$	10.7	$	270.4

Liabilities:
Commodities contracts		$	556.5	$	211.2	$	0.2	$	767.9		$	177.6	$	69.3	$	8.1	$	255.0
Foreign currency contracts		—		1.2		—		1.2			—		11.6		—		11.6
Total liabilities at fair value		$	556.5	$	212.4	$	0.2	$	769.1		$	177.6	$	80.9	$	8.1	$	266.6

There were no transfers between Level 1 and Level 2 during the periods presented. Additionally, the fair values of our commodity contracts measured using Level 3 inputs were not material at March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively.

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.

The following tables summarize those ~~commodity~~ derivative balances subject to the right of offset as presented on our ~~consolidated balance sheet.~~Consolidated Balance Sheets as of March 31, 2020 and December 31, 2019. 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.


	Fair Value as of March 31, 2019													Fair Value as of March 31, 2020
										Gross Amounts													Gross Amounts
		Gross Amounts		Gross Amounts		Net Amounts		Cash		without					Gross Amounts		Gross Amounts		Net Amounts		Cash		without
		Recognized		Offset		Presented		Collateral		Right of Offset		Net Amounts			Recognized		Offset		Presented		Collateral		Right of Offset		Net Amounts
Assets:
Commodities contracts		$	524.7	$	462.8	$	61.9	$	3.3	$	—	$	58.6		$	1,400.9	$	1,069.8	$	331.2	$	28.4	$	—	$	302.8
Interest rate contract															—		—		—		—		—		—
Foreign currency contracts		2.6		2.2		0.4		—		—		0.4			27.1		6.8		20.3		—		—		20.3
Total assets at fair value		$	527.3	$	465.0	$	62.3	$	3.3	$	—	$	59.0		$	1,428.0	$	1,076.6	$	351.5	$	28.4	$	—	$	323.1

Liabilities:
Commodities contracts		$	531.7	$	462.8	$	68.9	$	14.2	$	—	$	54.8		$	1,282.8	$	1,069.8	$	213.1	$	76.7	$	—	$	136.4
Interest rate contract															2.0		—		2.0		—		—		2.0
Foreign currency contracts		2.6		2.2		0.4		—		—		0.4			9.8		6.8		3.0		—		—		3.0
Total liabilities at fair value		$	534.3	$	465.0	$	69.3	$	14.2	$	—	$	55.1		$	1,294.6	$	1,076.6	$	218.1	$	76.7	$	—	$	141.4


	Fair Value as of December 31, 2018													Fair Value as of December 31, 2019
										Gross Amounts													Gross Amounts
		Gross Amounts		Gross Amounts		Net Amounts		Cash		without					Gross Amounts		Gross Amounts		Net Amounts		Cash		without
		Recognized		Offset		Presented		Collateral		Right of Offset		Net Amounts			Recognized		Offset		Presented		Collateral		Right of Offset		Net Amounts
Assets:
Commodities contracts		$	841.2	$	646.0	$	195.1	$	3.0	$	—	$	192.1		$	259.0	$	130.0	$	129.0	$	—	$	—	$	129.0
Foreign currency contracts		4.6		0.9		3.7		—		—		3.7			2.0		1.0		1.0		—		—		1.0
Total assets at fair value		$	845.8	$	647.0	$	198.8	$	3.0	$	—	$	195.8		$	261.1	$	131.1	$	130.0	$	—	$	—	$	130.0

Liabilities:
Commodities contracts		$	767.9	$	646.0	$	121.9	$	—	$	—	$	121.9		$	255.0	$	130.0	$	125.0	$	29.3	$	—	$	95.7
Foreign currency contracts		1.2		0.9		0.3		—		—		0.3			11.6		1.0		10.5		—		—		10.5
Total liabilities at fair value		$	769.1	$	647.0	$	122.2	$	—	$	—	$	122.2		$	266.6	$	131.1	$	135.5	$	29.3	$	—	$	106.3

At March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, we did not present any amounts gross on our ~~consolidated balance sheet~~Consolidated Balance Sheets where we had the right of offset.

Concentration of Credit Risk

~~The~~Our individual over-the-counter ~~(OTC)~~("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, ~~2019, none~~2020, one of our counterparties with an exposure amount of $28.2 million represented over 10% of our credit exposure to OTC derivative counterparties.

8. Income Taxes

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


	For the Three Months Ended						For the Three Months Ended
	March 31,						March 31,
	2019			2018			2020			2019
Income tax provision	$	14.0		$	7.3		$	16.0		$	14.0

Effective income tax rate	27.3		%	19.0		%	27.7		%	27.3		%

Our provision for income taxes for the three months ended March 31, 2020 was $16.0 million, resulting in an effective income tax rate of 27.7%. The provision includes a net discrete tax expense of $1.0 million for the period. Without the $1.0 million in discrete items, the effective income tax rate would have been 25.9%.

Our provision for income taxes for the three months ended March 31, 2019 was $14.0 million resulting in an effective ~~income~~ tax rate of 27.3%. The provision includes a ~~$3.2 million~~net discrete ~~tax benefit that should have been recognized in a prior period~~

~~and which, together with certain other discrete tax items, resulted in a net~~ income tax benefit of $2.8 million for the period. Without the $2.8 million in discrete items, the effective income tax rate would have been 32.8%.

Our income tax concession in Singapore which reduces the income tax rate on qualified sales and derivative gains and losses decreased foreign income taxes by $2.0 million and $0.9 million for the three months ended March 31, ~~2019. See Note 1 - Basis~~2020 and 2019, respectively. The impact of ~~Presentation~~the income tax concession on basic earnings per common share was $0.03 and ~~Significant Accounting Policies~~$0.01 for ~~additional information.~~the three months ended March 31, 2020 and 2019, respectively. On a diluted earnings per common share basis, the impact was $0.03 and $0.01 for the three months ended March 31, 2020 and 2019, respectively.

Our provision for income taxes for the three months ended March 31, 2018 was $7.3 million resulting in an effective tax rate of 19%. Our provision for income taxes was adjusted for an income tax benefit of $4.9 million, net, for discrete items related to changes in estimates in uncertain tax positions, an adjustment for stock-based compensation,2020 and ~~changes in the valuation allowance in various jurisdictions. Without the $4.9 million in discrete items, the effective income tax rate would have been 31.7% for the three months ended March 31, 2018.~~

~~Our provision for income taxes for the three months ended March 31,~~ 2019 ~~and 2018~~ was calculated based on the estimated annual effective income tax rate for the ~~2019~~2020 and ~~2018~~2019 fiscal years. The actual effective income tax rate for the ~~2019~~2020 fiscal year may be materially different as a result of differences between estimated versus actual results and the geographic tax jurisdictions in which the results are earned.

We have various ~~income~~ tax returns under examination both in the U.S. and foreign jurisdictions. The most significant of these are in Denmark for the 2013 - 2015 tax years, South Korea for the 2011 to- 2014 ~~tax years, Denmark for the 2013 to 2015~~ tax years, and the U.S. for the ~~2013 to 2016~~2017 - 2018 tax years. In ~~2016,~~2018, one of our subsidiaries in Denmark received an audit inquiry from the ~~South~~Danish tax authorities regarding transfer pricing and other related matters for the tax years 2013-2015. In Q2 2019, it received a proposed income adjustment of approximately $1.7 million related to the 2013 tax year and on April 30, 2020, it received a proposed income adjustment of approximately $5.2 million related to the 2014 tax year. We are currently responding to the proposed income adjustments and other information requests from the Danish tax authorities. In 2017, the Korean ~~branch~~Branch of one of our subsidiaries received income tax assessment notices for ~~the years 2011 to 2014 totaling $9.9~~$9.3 million (KRW 11.3 billion). from the South Korea tax authorities. We believe that these assessments are without merit and are currently appealing the actions. ~~In addition, during the quarter ended~~On March 31, 2018, one of our Danish subsidiaries received an audit inquiry from the Danish tax authority relating to transfer pricing and related issues for the tax years 2013 to 2015. We have been responding to the request and related questions and in April 2019, we received a proposed tax adjustment for the 2013 tax year which is not material. We believe that the proposed adjustment is without merit and intend to defend our positions. Finally, in 2017, we received a notice of examination from11, 2020, the U.S. Internal Revenue Service ~~for~~began the ~~2013 to 2016~~audit of our 2017 and 2018 tax years, and we are ~~currently~~ responding to ~~the request.~~their information requests.

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

9. Revenue from Contracts with Customers

Our contracts with customers primarily require us to deliver fuel and fuel-related products, while other arrangements require us to complete agreed-upon services. Revenue from the sale of fuel is recognized when our customers obtain control of the fuel, which is typically upon delivery of each promised gallon or barrel to an agreed-upon delivery point. We generally recognize revenue for services provided over the contract period when services have been performed based on our right to invoice for those services.

Our contracts may contain fixed or variable pricing (such as market or index-based pricing) or some combination of those. Within our land and aviation segments, contracts with customers may include multi-year sales contracts, which are priced at market-based indices and require minimum volume purchase commitments from our customers. The consideration expected from

these contracts is considered variable due to the market-based pricing and the variability is not resolved until delivery is made to our customers. We have elected to apply the optional exemption from estimating and disclosing the variable consideration from our remaining performance obligations under these contracts.

We also have fixed price fuel and fuel-related product sale contracts with a contract term of less than one year (typically one month). For these contracts, we apply the optional exemption to not disclose the amount of transaction price allocated to remaining performance obligations. We also apply this exemption to those contracts in which the right to consideration corresponds directly with the value to the customer of the entity's performance to date. In limited cases, we may have multi-period fixed price contracts. Because our long-term supply arrangements that exceed one year are typically based on market index prices as previously discussed, the transaction price associated with remaining performance obligations under multi-year fixed price fuel sale contracts ~~are~~is not significant.

The following table presents our revenues from contracts with customers disaggregated by major geographic areas we conduct business ~~in. Prior period amounts have not been adjusted under~~in for the ~~modified retrospective method~~three months ended March 31, 2020 and 2019 (in millions).:


	For the Three Months Ended				For the Three Months Ended
	March 31,				March 31,
	2019		2018		2020		2019
Aviation	$	364.4	$	392.0	$	252.3	$	364.4
Land	4.8		1.1		4.7		4.8
Marine	708.9		799.6		924.6		708.9
Asia Pacific	$	1,078.1	$	1,192.7	$	1,181.7	$	1,078.1

Aviation	$	719.1	$	670.0	$	638.9	$	719.1
Land	640.5		679.8		618.2		640.5
Marine	654.7		637.4		611.2		654.7
EMEA	$	2,014.3	$	1,987.2	$	1,868.3	$	2,014.3

Aviation	$	545.7	$	490.2	$	560.7	$	545.7
Land	138.9		184.2		130.4		138.9
Marine	191.4		155.2		233.3		191.4
LATAM	$	876.0	$	829.7	$	924.5	$	876.0

Aviation	$	2,648.0	$	2,763.0	$	2,126.8	$	2,648.0
Land	1,634.4		1,958.3		1,329.4		1,634.4
Marine	334.5		279.9		342.1		334.5
North America	$	4,616.9	$	5,001.2	$	3,798.3	$	4,616.9

Other revenues (excluded from ASC 606)	$	93.5	$	170.6
Other revenues (excluded from ASC 606)*					$	242.3	$	93.5

	$	8,678.8	$	9,181.3	$	8,015.2	$	8,678.8

~~Other revenues (excluded from ASC 606) in the table above includes~~* Includes revenue from leases and other transactions that we account for ~~following~~under separate guidance. ~~Our contract assets and liabilities balances, and the changes in these balances, were not material for the three months ended March 31, 2019.~~

The nature of the receivables related to revenue from contracts with customers and other revenue are substantially similar, given that they are 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 considering 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 Consolidated Balance Sheet. Furthermore, as of March 31, 2020 and December 31, 2019, the contract assets and contract liabilities recognized by the Company were not material.

10. Business Segments

We operate in ~~three~~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 and the products and services provided to those customers. Accordingly, our aviation, land and marine segments are organized based on the specific markets their functional business components serve, which are primarily businesses and governmental customers operating in those respective markets.

In our aviation segment, we offer fuel and related products and services to major commercial airlines, second and third-tier airlines, cargo carriers, regional and low cost carriers, airports, fixed based operators, corporate fleets, fractional operators, private aircraft. In addition, we supply products and services to U.S. and foreign government, intergovernmental and military customers, such as the North Atlantic Treaty Organization (NATO) and the U.S. Defense Logistics Agency.

In our land segment, we offer fuel, lubricants, power and natural gas solutions through World Kinect, our ~~global~~ energy management services platform, and related products and services to customers including petroleum distributors operating in the land transportation market, retail petroleum operators, and industrial, commercial, residential and government customers.

Our marine segment product and service offerings include fuel, lubricants and related products and services to a broad base of customers, including international container and tanker fleets, commercial cruise lines, yachts and time charter operators, offshore rig owners and operators, the U.S. and foreign governments as well as other fuel suppliers.

Within each of our segments, we may enter into derivative contracts to mitigate the risk of market price fluctuations and also to offer our customers fuel pricing alternatives to meet their needs.

Information concerning our revenue, gross profit and income from operations by segment is as follows for the three months ended March 31, 2020 and 2019 (in millions):


	For the Three Months Ended						For the Three Months Ended
	March 31,						March 31,
Revenue:	2019			2018			2020			2019
Aviation segment	$	4,252.7		$	4,292.9		$	3,764.1		$	4,252.7
Land segment	2,493.6			2,860.7			2,106.0			2,493.6
Marine segment	1,932.5			2,027.7			2,145.0			1,932.5
	$	8,678.8		$	9,181.3		$	8,015.2		$	8,678.8

Gross profit:
Aviation segment	$	114.3		$	110.0		$	93.2		$	114.3
Land segment	101.5			102.2			106.3			101.5
Marine segment	35.2			31.2			59.3			35.2
	$	251.1		$	243.4		$	258.7		$	251.1

Income from operations:
Aviation segment	$	55.6		$	47.8		$	29.1		$	55.6
Land segment	21.0			19.6			25.7			21.0
Marine segment	13.5			8.6			33.9			13.5
	90.1			75.9			88.6			90.1
Corporate overhead - unallocated	(19.7		)	(18.7		)	(17.8		)	(19.7		)
	$	70.4		$	57.2		$	70.8		$	70.4

Information concerning our accounts receivable, net and total assets by segment is as follows as of March 31, 2020 and December 31, 2019 (in millions):


	As of				As of
	March 31,		December 31,		March 31,		December 31
	2019		2018		2020		2019
Accounts receivable, net:
Aviation segment, net of allowance for bad debt of $13.5 and $17.7 as of March 31, 2019 and December 31, 2018, respectively	$	976.8	$	992.2
Land segment, net of allowance for bad debt of $2.7 and $2.7 as of March 31, 2019 and December 31, 2018, respectively	941.5		846.1
Marine segment, net of allowance for bad debt of $18.8 and $19.0 as of March 31, 2019 and December 31, 2018, respectively	810.4		901.2
Aviation segment, net of allowance for credit losses of $22.2 and $14.6 as of March 31, 2020 and December 31, 2019, respectively					$	606.5	$	1,098.2
Land segment, net of allowance for credit losses of $8.3 and $2.8 as of March 31, 2020 and December 31, 2019, respectively					728.1		863.2
Marine segment, net of allowance for credit losses of $22.4 and $18.0 as of March 31, 2020 and December 31, 2019, respectively					650.5		930.5
	$	2,728.7	$	2,739.6	$	1,985.1	$	2,891.9
Total assets:
Aviation segment	$	2,283.7	$	2,261.0	$	2,215.2	$	2,416.5
Land segment	2,208.0		2,178.1		2,115.9		2,089.4
Marine segment	1,057.8		1,124.2		1,059.3		1,189.7
Corporate	183.8		113.6		108.5		296.8
	$	5,733.2	$	5,676.9	$	5,498.9	$	5,992.4

During each of the periods presented on the ~~consolidated statements~~Consolidated Statements of ~~income~~Income and ~~comprehensive income,~~Comprehensive Income, none of our customers accounted for more than 10% of total consolidated revenue. Sales to government customers, which principally consist of sales to NATO in support of military operations in Afghanistan, have accounted for a material portion of our profitability in recent years. The profitability associated with our government business can be significantly impacted by supply disruptions, border closures, road blockages, hostility-related product losses, inventory shortages and other logistical difficulties that can arise when sourcing and delivering fuel in areas that are actively engaged in war or other military conflicts. Our sales to government customers may fluctuate significantly from time to time as a result of the foregoing factors, as well as the level of troop deployments and related activity in a particular region or area or the commencement, extension, renewal or completion of existing and new government contracts. See ~~"Item 1A -~~Item 1A. Risk ~~Factors”~~Factors of our ~~2018~~2019 10-K ~~Report.~~Report for more information.

11. 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				For the Three Months Ended
	March 31,				March 31,
	2019		2018		2020		2019
Numerator:
Net income attributable to World Fuel	$	37.2	$	31.2	$	41.4	$	37.2
Denominator:
Weighted average common shares for basic earnings per common share	67.1		67.5		64.9		67.1
Effect of dilutive securities	0.2		0.4		0.5		0.2
Weighted average common shares for diluted earnings per common share	67.4		67.9		65.4		67.4

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	2.0		1.3		1.6		2.0

Basic earnings per common share	$	0.55	$	0.46	$	0.64	$	0.55

Diluted earnings per common share	$	0.55	$	0.46	$	0.63	$	0.55

12. Commitments and Contingencies

Tax Matters

From time to time, we are under review by various domestic and foreign tax authorities with regard to indirect tax matters and are involved in various challenges and litigation in a number of countries, including, in particular, Brazil and South Korea, where the amounts under controversy may be material. We believe that these assessments are without merit and are currently appealing the actions.

During the quarter ended December 31, 2016, the ~~South~~ Korean branch (“WFSK”) of one of our subsidiaries received assessments of approximately ~~$10.5~~$9.3 million (KRW ~~11.9~~11.3 billion) and during the quarter ended June 30, 2017, an assessment for an additional ~~$17.7~~$16.5 million (KRW 20.1 billion) from the regional tax authorities of Seoul, South ~~Korea.~~Korea (“SRTO”). The 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 a number of 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 an assessment of approximately $9.5 million (BRL 49.1 million) from the Brazilian tax authorities relating to the ICMS rate used for certain transactions. The ~~total amount of approximately $13.9 million (BRL 54.1 million)~~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.

When we deem it appropriate and the amounts are reasonably estimable, we establish reserves for potential adjustments to our provision for the accrual of indirect taxes that may result from examinations or other actions by tax authorities. If events occur which indicate payment of these amounts is unnecessary, the reversal of the liabilities would result in the recognition of benefits in the period we determine the liabilities are no longer necessary. If our estimates of any of our federal, state, and foreign indirect tax liabilities are less than the ultimate assessment, it could result in a further charge to expense. Except with respect to the matters described above, we believe that the final outcome of any pending examinations, agreements, administrative or judicial proceedings will not have a material effect on our results of operations or cash flows.

Other 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. We have established loss provisions for these ordinary course claims as well as other matters in which losses are probable and can be reasonably estimated. As of March 31, ~~2019,~~2020, we had recorded certain reserves which were not material. For those matters where a reserve has not been established and for which we believe a loss is reasonably possible, as well as for matters where a reserve has been recorded but for which an exposure to loss in excess of the amount accrued is reasonably possible, we believe that such losses will not have a material adverse effect on our ~~consolidated financial statements.~~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 ~~consolidated financial statements~~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.

13. Restructuring

~~During~~As a result of continued review of our land business and changes in the ~~fourth~~overall economic landscape for all reportable segments as result of the COVID-19 pandemic, we are implementing a restructuring initiative focused on further streamlining our operations and sharpening our deployment of resources in 2020. We are working to further define the plan for the restructuring during the second quarter of 2017, we initiated an enterprise-wide restructuring plan that was designed to streamline the organization and reallocate resources to better align our organizational structure and costs with our strategy. While these activities are ongoing, we expect the majority of these activities to be completed in 2019. The restructuring plan involves reviewing non-core businesses and assets, our organizational structure, and expected business prospects in the markets we serve, as well as our existing technology platforms. Accordingly, based on the nature of the activities being reviewed, we cannot reasonably estimate the ultimate cost that will be incurred. We are currently assessing the strategic fit of certain international operations where it has become increasingly more challenging to conduct our core operations and generate profits.2020.

For the three months ended March 31, ~~2019,~~2020, we incurred ~~$1.8~~$1.7 million in restructuring ~~charges,~~costs, comprised principally of certain employee-related costs ~~and~~ included in ~~compensation~~Compensation and employee benefits in our ~~consolidated statements~~Consolidated Statements of ~~income~~Income and ~~comprehensive income.~~Comprehensive Income. Our accrued restructuring charges as of March 31, ~~2019,~~2020 are included in ~~accrued~~Accrued expenses and other current liabilities on our ~~consolidated balance sheet.~~Consolidated Balance Sheet.

The following table provides a summary of our restructuring activities during the three months ended March 31, ~~2019~~2020 (in millions):

Aviation
Land
Marine
Corporate
Consolidated
Balance as of December 31, 2018 $ 1.4
$ 12.6
$ 2.6
$ 4.0
$ 20.7
Restructuring-related costs 0.2
0.7
0.2
0.7
1.8
Paid during the period (1.4 ) (5.2 ) (1.7 ) (3.6 ) (12.0 )
Restructuring charges as of March 31, 2019 $ 0.2
$ 8.1
$ 1.1
$ 1.1
$ 10.5

~~14. Leases~~

We enter into lease arrangements for the use of offices, operational facilities, vehicles, vessels, storage tanks and other assets for our operations around the world. Some of these leases are embedded within other arrangements. When an arrangement includes both lease and non-lease components, we have elected to combine them and treat them as a lease component for all of our current leased asset classes.

Determining whether a contract contains a lease includes judgment regarding whether the contract conveys the right to control the use of identified property, plant, or equipment for a period of time in exchange for consideration. Assessing whether we have obtained the right to substantially all of the economic benefits and the ability to direct how, and for what purpose, the asset is used requires more judgment in storage arrangements where we must determine whether our rights to capacity may represent substantially all of the available capacity at a location.

Some of these arrangements are for periods of twelve months or less, while others are for longer periods, and may include optional renewals, terminations or purchase options, which are considered in our assessments when they are reasonably certain to occur. In addition, certain of these arrangements contain payments based on an index, market-based escalation or volume which may impact future payments. Most of our leases typically contain general covenants, restrictions or requirements such as maintaining minimum insurance coverage.

We account for our lease-related assets and liabilities based on their classification as operating leases or finance leases, following the relevant accounting guidance. We measure lease related assets and liabilities based on the present value of lease payments, including in-substance fixed payments, variable payments that depend on an index or rate measured at the commencement date, and the amount we believe is probable we will pay the lessor under residual value guarantees when applicable. We discount lease payments based on our estimated incremental borrowing rate at lease commencement (or modification), which is primarily based on our estimated credit rating, the lease term at commencement, and the contract currency of the lease arrangement. We have elected to exclude short term leases (leases with an original lease term less than one year) from the measurement of lease related assets and liabilities.

~~For the quarter ended March 31, 2019, we recognized the following related to our lease arrangements (in millions):~~

For the Three Months Ended
For March 31, 2019
Finance lease cost:
Amortization of right-of-use assets $ 1.3
Interest on lease liabilities 0.2
Operating lease cost 13.1
Short-term lease cost 4.5
Variable lease cost 3.6
Sublease income (2.5 )
Total lease cost $ 20.2



	Aviation			Land			Marine			Corporate			Consolidated
Balance as of December 31, 2019	$	0.5		$	7.5		$	1.3		$	0.2		$	9.5
Severance costs	0.1			1.3			0.1			0.2			1.7
Payments	(0.4		)	(2.7		)	(0.8		)	(0.3		)	(4.2		)
Restructuring charges as of March 31, 2020	$	0.2		$	6.1		$	0.7		$	0.1		$	7.0

~~As of March 31, 2019, our remaining lease payments were as follows (in millions):~~

Operating Leases Finance Leases
2019 (excluding the three months ended March 31, 2019) $ 36.1
$ 3.2
2020 39.0
4.1
2021 31.5
3.2
2022 25.0
2.8
2023 20.2
2.2
Thereafter 59.6
3.3
Total remaining lease payments (undiscounted) 211.4
18.8
Less: imputed interest 39.5
2.1
Present value of lease liabilities $ 171.9
$ 16.7

~~As of December 31, 2018, our future minimum lease payments under noncancelable operating leases were as follows (in millions)~~

Year Ended December 31,
2019 $ 50.7
2020 37.1
2021 30.7
2022 23.7
2023 17.8
Thereafter 48.5
$ 208.6

~~Supplemental balance sheet information related to leases (in millions):~~

Classification As of March 31, 2019
Assets
Operating Lease Assets Identifiable intangible and other non-current assets $ 165.7
Finance Lease Assets Property and equipment, net 16.2

Liabilities
Operating Lease Liability - Current Accrued expenses and other current liabilities 39.2
Operating Lease Liability - Long Term Other long-term liabilities 132.7
Finance Lease Liability - Current Current maturities of long-term debt and capital leases 3.7
Finance Lease Liability - Long Term Long-term debt 13.0

~~Other information related to leases as of March 31, 2019:~~

Operating Leases Finance Leases
Weighted-average remaining lease term (years) 6.5
5.6
Weighted-average discount rate 6.0 % 2.7 %
Cash paid for amounts included in the measurement of lease liabilities (in millions):
Operating cash flows from finance leases $ —
$ 0.1
Operating cash flows from operating leases 13.3
—
Financing cash flows from finance leases —
0.9
Right of use assets obtained in exchange for new operating lease liability (noncash in millions) 8.4
—


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

The following discussion should be read in conjunction with our ~~2018~~2019 10-K Report and the ~~consolidated financial statements~~Consolidated Financial Statements and related notes in ~~“Item~~Item 1 — Financial ~~Statements”~~Statements appearing elsewhere in this 10-Q Report. 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~~Item 1A — Risk ~~Factors”~~Factors of our ~~2018~~2019 10-K Report as updated and supplemented by Part II - Item 1A of this 10-Q Report.

The preliminary financial information included in our earnings release dated April 25, 2019 ("First Quarter Earnings Release") reflected a discrete tax benefit of $8.8 million with respect to a foreign tax filing. The following discussion and the consolidated financial statements and related notes in “Item 1 - Financial Statements” appearing elsewhere in this 10-Q Report reflect a reserve of $5.6 million against the foregoing discrete tax benefit, which was not reflected in the First Quarter Earnings Release.

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,” “will likely result,” “plan,” or words or phrases of similar meaning. Specifically, this 10-Q Report includes forward-looking statements about (i) (i) the impact of COVID-19 on us and our customers in the second quarter of 2020 and the balance of the year, including our expectations about demand, volume, profitability and the impact of fuel prices, (ii) our expectations regarding the conditions in the aviation, land, and marine markets ~~including volume~~ and ~~fuel prices, and the~~their impact on our business, ~~(ii) our expectations about the financial impact of portfolio rationalization and our ability to redeploy such capital into activities with sustainable revenue and expected returns,~~ (iii) our expectations regarding government-related activity ~~including~~with the North Atlantic Treaty Organization (NATO), and the related profit contribution, (iv) our ~~beliefs regarding our competitive advantages and our ability to capitalize on these to drive growth, (v)~~ estimates regarding the ~~short and long-term savings and synergies~~expected benefits from our ~~cost-savings initiatives, (vi)~~actions to reduce cost and our restructuring initiative, (v) our expectations regarding our working capital, liquidity, capital expenditure requirements, ~~(vii)~~(vi) our expectations and estimates regarding certain tax, legal and accounting matters, including the impact on our financial statements, ~~(viii) our expectations regarding the financial and operational impact of our investments in automation and technology, (ix)~~(vii) our expectations regarding the financial impact of previous acquisitions, including estimates of future expenses and our ability to realize estimated synergies, and ~~(x)~~(viii) estimates regarding the financial impact of our derivative contracts. 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 that 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;~~contracts, particularly for those customers most significantly impacted by the COVID-19 pandemic;

~~sudden changes in~~ the ~~market price~~extent of ~~fuel;~~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;

loss of, or reduced sales to a significant government customer, such as NATO;

the availability of cash and sufficient liquidity to fund our working capital and strategic investment ~~needs;~~needs, particularly in light of the impact of the pandemic on the financial markets;

adverse conditions in the industries in which our customers operate such as the current global economic environment as a result of the coronavirus pandemic;

sudden changes in the market price of fuel or extremely high or low fuel prices that continue for an extended period of time, including as a result of disagreements between the Organization of Petroleum Exporting Countries ("OPEC") members and other oil producing countries such as Russia, as well as related global storage considerations;

our failure to comply with restrictions and covenants in our senior revolving credit facility (“Credit Facility”) and our senior term loans (“Term Loans”), including our financial covenants;

changes in the political, economic or regulatory environment generally and in the markets in which we operate, such as IMO 2020 (defined below);

our failure to effectively hedge certain financial risks and other risks associated with derivatives;

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;

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

our ability to meet financial forecasts associated with our operating plan;

lower than expected valuations associated with our cash flows and revenues, which could impair our ability to realize the value of recorded intangible assets and goodwill;

the impact of cyber and other information security-related incidents;

currency exchange fluctuations and the impacts associated with Brexit;

ability to effectively leverage technology and operating systems and realize the anticipated benefits;

failure of fuel and other products we sell to meet specifications;

our ability to effectively integrate and derive benefits from acquired businesses;

our ability to achieve the expected level of benefit from our restructuring activities and cost reduction initiatives;

~~material disruptions in the availability or supply of fuel;~~

•environmental and other risks associated with the storage, transportation and delivery of petroleum products;

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 losses;

the impact of natural disasters, such as earthquakes and hurricanes;

seasonal variability that adversely affects our revenues and operating results;

~~our failure to comply with restrictions and covenants in our senior revolving credit facility (“Credit Facility”) and our senior term loans (“Term Loans”);~~

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 (including the Tax Cuts and Jobs Act), 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 outcome of litigation and other proceedings, including the costs associated in defending any actions;

increases in interest rates; and

other risks, including those described in ~~“Item~~Item 1A - Risk ~~Factors”~~Factors in our ~~2018~~2019 10-K Report, ~~and~~Part II, Item 1A of this 10-Q Report, as well as 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 ~~Outlook~~Overview

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 product and service offerings to include energy advisory services and supply fulfillment ~~with respect to~~for natural gas and power and transaction and payment management solutions to commercial and industrial customers. ~~We endeavor~~Our intention is to become a leading global energy management company offering a full suite of energy advisory, management and fulfillment services, ~~and~~ technology solutions, as well as sustainability products and services across the energy product spectrum. We also ~~seek to become a leading transaction and payment management company, offering~~offer payment management solutions to commercial and industrial customers, principally in the aviation, land and marine transportation industries. We will continue to focus on enhancing the portfolio of products and services we provide based on changes in customer demand, including sustainability offerings and renewable fuel products.

~~The overall~~

COVID-19

Beginning in the first quarter of 2020 and through the date of this filing, the aviation, ~~market remains strong, benefiting from continued growth~~marine and land transportation industries, along with global economic conditions, have been significantly impacted by the COVID-19 pandemic. A large number of our customers in ~~global passenger~~these industries have experienced substantial reductions in their operations, especially commercial airlines and cruise lines which have been particularly impacted by the travel restrictions and stay-at-home orders. Customers in our marine and land segments have also been adversely affected by these restrictions as well as the extended shutdown of various businesses in affected regions.

While the pandemic and associated impacts on economic activity had a limited adverse effect on our results of operations and financial condition for the first quarter of 2020, we have since seen a sharp decline in demand and ~~airline profitability remains healthy.~~ related sales as large sectors of the global economy have been adversely impacted by the crisis. We expect that our results of operations will be more significantly impacted in the second quarter of 2020 as a result of the effects of the pandemic as described in greater detail below, since the level of activity in our business and that of our customers has historically been driven by the level of economic activity globally.

Aviation Segment

Our aviation segment has benefited from growth in our ~~increased~~fuel and related services offerings, as well as our improving logistics capability and ~~we have~~the impact of our expanded ~~our~~ aviation fueling operations footprint into additional international ~~territories and~~ airport locations. However, as a result of COVID-19, the overall aviation market, principally commercial passenger airlines, has been significantly impacted by the travel restrictions and sharp decrease in near-term demand for air travel. As a result, we began to experience a material decline in activity in our commercial aviation business in the latter part of the first quarter of 2020. In the second quarter, we expect an even greater decline in volumes and related profitability in our commercial aviation business and, to a somewhat lesser extent, our business and general aviation activities, some of which we believe will be at least partly offset by continued strength in air cargo activity. Our results of operations in these lines of business for the balance of 2020 will be highly contingent on the timing and extent to which the restrictions on air travel are lifted and the global economy begins to recover from the effects of the current crisis.

Our aviation segment has also benefited from ~~continued~~ strong ~~demand from government customers, principally~~sales to NATO in ~~Afghanistan. Sales to government customers~~Afghanistan, which account for a material portion of our aviation segment's ~~profitability,~~profitability. The current contract for these sales to NATO has been renewed through December 2020 and ~~while we expect our government-related activity to remain strong through the balance of 2019, we believe the related profit contribution will decrease as compared to 2018.~~has two additional one-year renewal options at NATO's discretion. Global events and military-related activities, as well as the level of troop deployments, ~~and related activity, drive~~can cause our government customer sales to ~~government customers and therefore can~~ vary significantly from period to period and materially impact our results of operations. Recently, the U.S. government announced its intention to significantly reduce the level of U.S. troops in the Middle East, including the troops supporting NATO in Afghanistan. The timing, extent and impact of any such withdrawal is currently uncertain, however, we expect to see a decline in this activity in 2020 based on recent trends in demand that began at the end of the first quarter of 2020 and has continued into the second quarter.

Land Segment

Our land segment ~~has grown~~ primarily ~~through acquisitions as we seek to build out our~~consists of land fuel distribution ~~capabilities~~ in the U.S. and the U.K. ~~Recently,~~further complemented by our expansion into energy advisory, brokerage and fulfillment solutions with respect to power, natural gas and other energy products. We also offer sustainability consulting, renewable fuel products, and carbon management and renewable energy solutions through our World Kinect energy management services brand. During the first quarter of 2020, improved operating results in our land segment ~~has been negatively impacted~~were driven primarily by improvements in the U.K., where we benefited from volatility in the latter part of the quarter, as well as continued growth in our ~~decision~~World Kinect operations.

Due to ~~reposition~~ the diverse portfolio of customers, businesses and ~~reduce certain supply~~activities within our land segment, the anticipated COVID-19 related impacts are more difficult to predict. However, we have recently seen, and ~~trading activities which were not generating~~expect to continue to see, a ~~sufficient or predictable economic return~~material decrease in sales to retail gasoline and diesel distributors as well as gas station operators in North America in the second quarter of 2020 as a result of ~~market conditions. In addition, our operating results~~the stay-at-home orders in effect throughout much of the U.S. The extent of any improvements in that part of our business will also be dependent on the timing and ~~U.K.~~extent to which these restrictions are ~~impacted by winter weather conditions~~

lifted and ~~accordingly, unseasonably warm winter weather has adversely impacted our results, including the first quarter of 2019.~~local business activity resumes. Meanwhile, our land segment has ~~benefited~~continued to benefit from ~~strong~~ sales to ~~government customers, including~~ NATO in Afghanistan, however, as described above, these sales can be significantly impacted by global events and we expect such activity to remain generally consistent throughout the balance of 2019. We continue to focus on supplying more sustainable end-user demand to provide greater leverage and ratability in our operating model,military-related activities, as well as ~~driving operational excellence and improving our technology platform~~the level of troop deployments. For the same reasons as those described above, we expect to ~~reduce transaction processing costs.~~see a decline in this activity in 2020.

Marine Segment

Our marine segment results have been strong in recent periods despite ~~the weak overall~~challenging conditions within the global shipping and offshore exploration markets. ~~We believe overall volumes in our marine segment have stabilized~~Overall, throughout 2019 and into 2020, higher average fuel prices, combined with ~~the effects of~~ our focus on reshaping our portfolio and cost ~~savings initiatives, have~~management, improved profitability. ~~The~~In addition, the implementation of the IMO 2020 mandatory ~~fuel standards, such as the International Maritime Organization's~~low sulfur regulations ~~limiting sulfur in fuel oil used on ships~~ that ~~will be effective~~went into effect on January 1, 2020 ~~("IMO 2020"), may provide additional opportunities for us~~resulted in certain supply imbalances and price volatility in late 2019 and through much of the first quarter of 2020 that positively impacted our operating results in those periods. However, in the latter part of the first quarter of 2020, we began to ~~create value-added solutions for our customers~~experience a decline in volume and ~~further enhance profitability.~~

Asprofitability as a result of the ~~challenges~~effects of the COVID-19 pandemic coupled with the significant decline in fuel prices. For the ~~markets where we operate, we continue to rationalize our operating model and portfolio~~second quarter of ~~businesses to gain efficiencies through various initiatives that are ongoing throughout the company. We are investing in automation and technology throughout our businesses, which~~2020, we expect ~~will ultimately lower~~ our ~~cost, reduce cycle time~~marine segment’s volume and ~~improve scalability. Furthermore, we continue~~profitability to ~~implement our enterprise-wide restructuring plan, designed~~be more meaningfully impacted by both the effects of the pandemic, particularly with respect to ~~streamline~~cruise lines and certain sectors of the organization and reallocate resources to align more effectively our organizational structure and costs with our ultimate strategy to improve operating efficiencies. The restructuring program involves rationalizing non-core businesses and investments, refining our organizational structure, and advancing business prospects in the markets we serve,shipping industry, as well as ~~exiting certain~~substantially lower fuel prices. However, we still expect our results for the second quarter of 2020 to generally be consistent with the second quarter of 2019.

Other Actions

With respect to our own operations, we have implemented our business ~~activities~~continuity and ~~reinventing~~emergency response plans in alignment with mandates from local authorities. To ensure the safety of our ~~core businesses~~employees who are continuing to ~~improve scalability.~~work, we have provided instructions on how to work safely in light of the pandemic and elevated our cleaning protocols for our offices, facilities and equipment. We ~~expect this portfolio rationalization will free up additional~~are maximizing remote work throughout our global offices and our employees are collaborating virtually with our customers, suppliers and each other using the information sharing tools and technology that we have invested in during the last several years.

Due to the ongoing and expected adverse impacts of the COVID-19 crisis, we immediately made cost-related decisions as the pandemic began impacting our business activities. For example, we immediately instituted a hiring freeze and implemented travel restrictions for our employees across the organization, postponed or eliminated all non-essential capital ~~to invest in activities with sustainable revenue~~expenditures and ~~adequate returns~~other projects and initiatives, significantly reduced or deferred professional fees, marketing expenses and other similar costs. In addition, while we ~~continue~~have continued to ~~manage~~focus on improving operating efficiencies and returns, we have also concentrated on lowering the operating costs of our ~~working capital~~land segment, which has historically had a higher expense ratio than other parts of our business. Accordingly, we have commenced a restructuring initiative focused on further streamlining our operations and ~~inventory~~sharpening our deployment of resources, not only in ~~a volatile fuel price environment.~~our land segment but also our other segments due to the expected adverse impacts of the pandemic.

The ultimate duration and impact of the COVID-19 pandemic on our business and our customers' operations is presently unclear. Furthermore, the extent to which we or our customers will ultimately be impacted by the pandemic is not presently ascertainable as it is closely related to the timing and extent to which the global economy, and the aviation land and marine transportation industries in particular, recover from the crisis. For additional discussion on the risks relating to the pandemic, see Item 1A. Risk Factors in Part II of this 10-Q Report.

Reportable Segments

We operate in three reportable segments consisting of aviation, land and marine, where we offer fuel and related products and services to commercial and industrial customers in each of these transportation industries. Within each of our segments, we may enter into derivative contracts to mitigate the risk of market price fluctuations and also to offer our customers fuel pricing alternatives to meet their needs.

In our aviation and land segments, we primarily purchase and resell fuel and other products. Profit from our aviation and land segments is primarily determined by the volume and the gross profit achieved on fuel sales and related services. In our marine segment, we primarily purchase and resell fuel and also act as brokers for others. Profit from our marine segment is determined mostly by the volume and gross profit achieved on fuel resales and by the volume and commission rate of the brokering business. Profitability in our segments also depends on our operating expenses, which may be materially affected to the extent that we are required to provide for potential bad debt.

Corporate expenses are allocated to each segment based on usage, where possible, or other factors according to the nature of the activity. We evaluate and manage our business segments using the performance measurement of income from operations. Selected financial information with respect to our business segments is provided in Note 10. toBusiness Segments accompanying the ~~accompanying consolidated financial statements~~Consolidated Financial Statements included in this 10‑Q Report.

Results of Operations

Three Months Ended March 31, ~~2019~~2020 Compared to Three Months Ended March 31, ~~2018~~2019

Revenue. Our revenue for the first quarter of ~~2019~~2020 was ~~$8.7~~$8.0 billion, a decrease of ~~$0.5~~$0.7 billion, or ~~5.5%~~7.6%, as compared to the first quarter of ~~2018.~~2019. Our revenue during these periods was attributable to the following segments (in millions):


	For the Three Months ended							For the Three Months ended
	March 31,							March 31,
	2019		2018		$ Change			2020		2019		$ Change
Aviation segment	$	4,252.7	$	4,292.9	$	(40.2	)	$	3,764.1	$	4,252.7	$	(488.6	)
Land segment	2,493.6		2,860.7		(367.1		)	2,106.0		2,493.6		(387.6		)
Marine segment	1,932.5		2,027.7		(95.2		)	2,145.0		1,932.5		212.5
	$	8,678.8	$	9,181.3	$	(502.5	)	$	8,015.2	$	8,678.8	$	(663.6	)

Revenues in our aviation segment were ~~$4.3~~$3.8 billion for the first quarter of ~~2019,~~2020, a decrease of ~~$40.2~~$488.6 million, or ~~0.9%~~11.5% as compared to the first quarter of ~~2018.~~2019. Lower average jet fuel prices drove the decrease in aviation revenue in the first quarter of ~~2019,~~2020, where the average price per gallon sold was ~~$2.16,~~$1.80, as compared to ~~$2.18~~$2.16 in the first quarter of ~~2018. Total~~2019. Additionally, as compared to the prior-year period in 2019, total aviation volumes for the first quarter of ~~2019 were 2.0~~2020 decreased by 126.0 million or 6.39% to 1.8 billion ~~gallons, which~~gallons. The volume decrease was ~~flat as compared~~due to the ~~comparable prior year period.~~significant decline in activity in our commercial aviation business during the last month of the quarter, resulting from the COVID-19 pandemic impact on air travel.

Revenues in our land segment were ~~$2.5~~$2.1 billion for the first quarter of ~~2019,~~2020, a decrease of ~~$367.1~~$387.6 million, or ~~12.8%~~15.5%, as compared to the first quarter of ~~2018.~~2019. The decrease in revenue was ~~influenced by~~due to lower average fuel prices in the first quarter of ~~2019,~~2020, as compared to the first quarter of ~~2018,~~2019, where the average price per gallon or gallon equivalent sold was ~~$1.84,~~$1.51 in 2020, as compared to ~~$1.95~~$1.84 in ~~2018.~~2019. Volumes in our land segment ~~also experienced a 7.7% decrease to 1.3 billion gallons~~ for the first quarter of ~~2019. The land volume decrease was drivenprincipally~~2020 increased by ~~our decision~~35.2 million or 2.62% to ~~reposition the portfolio and exit certain non-core supply and trading activities in North America which were not generating a sufficient economic return.~~1.4 billion gallons.

Revenues in our marine segment were ~~$1.9~~$2.1 billion for the first quarter of ~~2019, a decrease~~2020, an increase of ~~$95.2~~$212.5 million, or ~~4.7%~~11.0%, as compared to the first quarter of 2018. Volumes in our marine segment declined 10.0% to 5.2 million metric tons in the first quarter of 2019, as compared to 2018, driven principally by our decision to discontinue certain low margin, low return activities.2019. The ~~decrease~~increase in revenues ~~resulting from lower volumes~~ was ~~partly offset by~~mainly due to higher average bunker fuel prices, where we experienced ~~a 5.9%~~an 18.0% increase in the average price per metric ton sold to $438.6 in the first quarter of 2020 as compared to $371.7 in the first quarter of 2019, largely as a consequence of the shipping industry's shift from high sulfur fuel oil to very low sulfur fuel oil as a result of the International Maritime Organization's low sulfur requirements "IMO 2020" that became effective on January 1, 2020. Volumes in our marine segment declined by 0.3 million metric tons, or 5.9% to 4.9 million metric tons in the

first quarter of 2020, as compared to ~~$351.1~~2019, principally as a result of the continuing effort to shed activities that generate a low economic return, as well as the effects of the COVID-19 pandemic disruption to bunker fuel oil demand in ~~2018.~~the latter part of the quarter.

Gross Profit. Our gross profit for the first quarter of ~~2019~~2020 was ~~$251.1~~$258.7 million, an increase of $7.7 million, or 3.1%, as compared to the first quarter of ~~2018.~~2019.

Our gross profit during these periods was attributable to the following segments (in millions):


	For the Three Months ended							For the Three Months ended
	March 31,							March 31,
	2019		2018		$ Change			2020		2019		$ Change
Aviation segment	$	114.3	$	110.0	$	4.4		$	93.2	$	114.3	$	(21.2	)
Land segment	101.5		102.2		(0.7		)	106.3		101.5		4.8
Marine segment	35.2		31.2		4.0			59.3		35.2		24.1
	$	251.1	$	243.4	$	7.7		$	258.7	$	251.1	$	7.7

Our aviation segment gross profit for the first quarter of ~~2019~~2020 was ~~$114.3~~$93.2 million, ~~an increase~~a decrease of ~~$4.4~~$21.2 million, or ~~4.0%~~18.5%, as compared to the first quarter of ~~2018.~~2019. The ~~increase~~decrease in aviation gross profit was primarily due to ~~increased profitability~~lower margins in our physical inventory supply business, exacerbated by the rapid decline in jet fuel prices. Furthermore, the impact of air travel restrictions on commercial aviation activity in the latter part of the quarter as a consequence of the COVID-19 pandemic, and a reduction in our government-related ~~operations as well as growth~~activity in ~~our international fueling operations, partially offset by~~Afghanistan also contributed to the ~~negative impact of declining market prices through the first quarter of 2019.~~decrease in aviation gross profit.

Our land segment gross profit for the first quarter of ~~2019~~2020 was ~~$101.5~~$106.3 million, ~~a decrease~~an increase of ~~$0.7~~$4.8 million, or ~~0.7%~~4.7%, as compared to the first quarter of ~~2018.~~2019. The ~~decrease~~increase in land segment gross profit was primarily attributable to ~~weak demand~~improved results in the U.K. ~~due to an unseasonably warm winter and lower activity~~, continued growth in North America resulting from our decision to reposition the portfolio and exit certain non-core supply and trading activities. The decrease in gross profit was partially offset by higher profitability in our commercial, industrial, and retail activities in the U.S. as well as our Kinect global energy services ~~platform.~~platform, as well as growth in MultiService, our payment solutions business. The improved results in our land segment were partially offset by a decline in profitability in our retail and commercial and industrial activities in North America as a result of declining fuel prices through the first quarter of 2020.

Our marine segment gross profit for the first quarter of ~~2019~~2020 was ~~$35.2~~$59.3 million, an increase of ~~$4.0~~$24.1 million, or ~~12.8%~~68.4%, as compared to the first quarter of ~~2018.~~2019. The gross profit increase was ~~principally driven by higher profitability~~related to strong results in our core resale ~~business, partially offset~~activity principally driven by ~~a reduction in low margin activity in Asia.~~market volatility and higher fuel prices resulting from the shift to very low-sulfur fuel oil due to the implementation of IMO 2020 regulations.

Operating Expenses. Total operating expenses for the first quarter of ~~2019~~2020 were ~~$180.7~~$187.9 million, ~~a decrease~~an increase of ~~$5.5~~$7.3 million, or ~~2.9%~~4.0%, as compared to the first quarter of ~~2018.~~2019. The ~~decrease~~increase in operating expenses was ~~primarily due to reductions in base compensation and general and administrative costs~~driven principally as a result of ~~our ongoing cost initiatives.~~a higher provision for bad debt due in part to the higher risk environment associated with the effects of the COVID-19 pandemic. The following table sets forth our expense categories (in millions):


	For the Three Months ended							For the Three Months ended
	March 31,							March 31,
	2019		2018		$ Change			2020		2019		$ Change
Compensation and employee benefits	$	110.1	$	113.9	$	(3.8	)	$	104.2	$	110.1	$	(5.9	)
General and administrative	70.6		72.3		(1.7		)	83.7		70.6		13.2
	$	180.7	$	186.2	$	(5.5	)	$	187.9	$	180.7	$	7.3

Income from Operations. Income from operations during these periods was attributable to the following segments (in millions):


	For the Three Months ended									For the Three Months ended
	March 31,									March 31,
	2019			2018			$ Change			2020			2019			$ Change
Aviation segment	$	55.6		$	47.8		$	7.9		$	29.1		$	55.6		$	(26.5	)
Land segment	21.0			19.6			1.4			25.7			21.0			4.6
Marine segment	13.5			8.6			4.9			33.9			13.5			20.4
	90.1			75.9			14.2			88.6			90.1			(1.5		)
Corporate overhead - unallocated	(19.7		)	(18.7		)	(1.0		)	(17.8		)	(19.7		)	1.9
	$	70.4		$	57.2		$	13.2		$	70.8		$	70.4		$	0.4

Our income from operations for the first quarter of ~~2019~~2020 was ~~$70.4~~$70.8 million, an increase of ~~$13.2~~$0.4 million, or ~~23.0%~~0.6%, as compared to the first quarter of ~~2018, and includes $3.4 million of~~2019. The improved operating income to correct an item that should have been recognized in a prior period. All three reporting segments benefited from the improved operating efficiencies resulting from our ongoing cost initiatives. Within our aviation segment, the increase was primarily ~~due to~~the result of higher profitability in our ~~government-related operations~~land and ~~growth~~marine segments, however, those increases were largely offset by a decrease in ~~our international fueling operations. Within our marine segment, we experienced higher profitability as a result of improved~~ profitability in our ~~core resale business and lower operating costs,~~aviation segment.

Income from operations in our aviation segment for the first quarter of 2020 was $29.1 million, a decrease of $26.5 million or 47.7% as compared to the first quarter of ~~2018. Within~~2019. Our Aviation segment was primarily impacted by lower profitability from our physical inventory supply business, exacerbated by the dramatic decline in fuel prices, together with the impact of air travel restrictions on commercial aviation activity in the latter part of the quarter as a consequence of the COVID-19 pandemic, as well as a reduction in government-related activity in Afghanistan and a higher provision for bad debt.

In our land segment, income from operations for the first quarter of 2020 was $25.7 million, an increase of $4.6 million or 22.1% as compared to the first quarter of 2019. The improved profitability was ~~driven~~ primarily ~~by operating efficiencies~~attributable to weather related increases in the U.K. and growth in our Kinect global energy services platform, as well as growth in MultiService, our payment solutions business, partially offset by ~~weak demand~~a decline in ~~the U.K. due to unseasonably warm winter weather~~profitability in our retail and ~~lower activity~~commercial and industrial activities in North America as result of declining fuel prices through the first quarter of 2020.

Our marine segment income from operations for the first quarter of 2020 was $33.9 million, an increase of 20.4 million or 151.0% as compared to the first quarter of 2019. The increase in profitability was related to strong results in our core resale activity principally driven by market volatility and higher fuel prices resulting from ~~our decision~~the shift to ~~exit certain non-core supply and trading activities.~~very low sulfur fuel oil due to the implementation of the IMO 2020 regulations, partially offset by a higher provision for bad debt, as compared to the first quarter of 2019.

Corporate overhead costs not charged to the business segments for the first quarter of ~~2019~~2020 were ~~$19.7~~$17.8 million, ~~an increase~~a decrease of ~~$1.0~~$1.9 million, or ~~5.5%~~9.7%, as compared to the first quarter of ~~2018,~~2019, primarily attributable to ~~increases~~a decrease in ~~employee benefits and general and administrative expenses.~~incentive compensation.

Non-Operating Expenses, net. For the first quarter of ~~2019,~~2020, we had non-operating expenses of ~~$19.0~~$13.2 million, ~~an increase~~a decrease of ~~$0.4~~$5.8 million as compared to the first quarter of ~~2018,~~2019, driven principally by a reduction in interest expenses and fees associated with our receivable purchase programs.

Income Taxes. For the first quarter of ~~2019,~~2020, our effective income tax rate was ~~27.3%~~27.7% and our income tax provision was ~~$14.0~~$16.0 million, as compared to an effective income tax rate of ~~19.0%~~27.3% and an income tax provision of ~~$7.3~~$14.0 million for the first quarter of ~~2018.~~2019. The higher effective income tax rate ~~for the first quarter of 2019~~ was primarily related to differences in certain one-time discrete items ~~year over year.~~and the results of our subsidiaries in tax jurisdictions with different tax rates, offset by the favorable effect of the adoption of the base erosion and anti-abuse minimum tax proposed regulations released on December 2, 2019. See Note ~~8 -~~8. Income Taxes within this 10-Q Report for additional information.

Net Income Attributable to Noncontrolling Interest. For the first quarter of ~~2019,~~2020, net income attributable to noncontrolling interest was $0.2 million compared to $0.1 million ~~which was the same as~~for the first quarter of ~~2018.~~2019.

Net Income Attributable to World Fuel and Diluted Earnings per Common Share. For the first quarter of ~~2019,~~2020, we had a net income attributable to World Fuel of $41.4 million and diluted earnings per common share of $0.63 as compared to net income attributable to World Fuel of $37.2 million and diluted earnings per common share of $0.55 ~~as compared to net income of $31.2 million and diluted earnings per common share of $0.46~~ for the first quarter of ~~2018.~~2019.

Our net income for the first quarter of 2019 includes a discrete tax benefit of $3.2 million with respect to a foreign tax filing and $3.4 million of operating income ($2.3 million after-tax), each of which should have been recognized in a prior period. Excluding these misstatements, which we have determined were not material to current or prior periods, our net income would have been $31.7 million, or $0.47 per diluted share.

Liquidity and Capital Resources

Our liquidity, consisting of cash, ~~and~~ cash equivalents and availability under the 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 ~~changes in fuel prices. Availability~~our financial performance which drives availability under our Credit Facility. Our availability under our Credit Facility, for example, is ~~also~~ limited by, among other things, our ~~financial~~consolidated total leverage ratio, which ~~limits~~is defined in the ~~total amount~~Credit Facility and is based in part on our adjusted consolidated earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) for the four immediately preceding fiscal quarters. Accordingly, significant fluctuations in our Adjusted EBITDA for a particular quarter can impact our availability to the extent it significantly alters our Adjusted EBITDA for the applicable preceding four quarters. See Item 1A. Risk Factors in Part II of ~~indebtedness we may incur, and may, therefore, fluctuate from period to period.~~this 10-Q Report for additional information.

Cash and liquidity are significant priorities for us ~~particularly in a high fuel price environment. Our~~and our primary use of cash and liquidity is to fund working capital and strategic investments. Increases in fuel prices can negatively affect liquidity by increasing the amount of cash required to fund fuel purchases. In addition, while we are usually extended unsecured trade credit from our suppliers for our fuel purchases, ~~rising~~higher fuel prices may reduce the amount of fuel which we can purchase on an unsecured basis, and in certain cases, we may be required to prepay fuel purchases, which would negatively impact our liquidity. Fuel price increases may also negatively impact our customers, ~~whereby~~in that they may not be able to purchase as much fuel from us because of their credit limits with us and the resulting adverse impact on their business could cause them to be unable to make payments owed to us for fuel purchased on credit. They may also choose to reduce the amount of fuel they consume in their operations to reduce costs. In any such event, the volume of orders from our customers may thereafter decrease and we may not be able to replace lost volumes with new or existing customers.

WeAs described in greater detail above, the COVID-19 pandemic is expected to have an adverse impact on our customers, and therefore our own operating results, for the second quarter of 2020. Based on the information currently available, we believe that our cash and cash equivalents as of March 31, ~~2019~~2020 and available funds from our Credit Facility, together with cash flows generated by operations, ~~remain~~are sufficient to fund our working capital and capital expenditure requirements for at least the next twelve months. In addition, to further enhance our liquidity profile, we may choose to raise additional funds which may or may not be needed for additional working capital, capital expenditures or other strategic investments. Our opinions concerning liquidity are based on currently available ~~information. To~~information and to the extent this information proves to be inaccurate, or 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. Factors that may affect the availability of trade credit or other forms of financing include our financial performance (as measured by various factors, including cash provided by operating activities), the state of worldwide credit markets, and our levels of outstanding debt. Depending on the severity and direct impact of these factors on us, financing may be limited or unavailable on terms favorable to us.

Cash Flows

The following table reflects the major categories of cash flows for the three months ended March 31, ~~2019~~2020 and ~~2018~~2019 (in millions). For additional details, please see the ~~consolidated statements~~Consolidated Statements of ~~cash flows.~~Cash Flows in this Quarterly Report on Form 10‑Q.

For the Three Months Ended
March 31,
2019 2018
Net cash provided by (used in) operating activities $ 10.8
$ (228.8 )
Net cash (used in) provided by investing activities (18.5 ) 86.1
Net cash (used in) financing activities (10.9 ) (80.8 )

*The adoption of ASU 2016-15 resulted in operating cash flow decreases and investing cash flow increases of $120.0 million for the three months ended March 31, 2018.

At the beginning of 2018, accounting standards update 2016-15 (“ASU 2016-15”) became effective for us and provided revised guidance on the presentation of certain items, including those associated with retained beneficial interests in accounts receivable sale programs. Under the terms of our receivables purchase agreements (“RPAs”) with Wells Fargo and Citibank, we were entitled to retained beneficial interests, which gave us the right to receive additional cash consideration of either 10% or 6%, as a result of receiving cash consideration equal to either 90% or 94%, respectively of the total accounts receivables balance. Under the revised guidance, previously disclosed cash inflows attributable to held beneficial interests are no longer treated as a component of accounts receivables, net in operating activities, but instead are classified separately as an investing activity. However, during the quarter ended September 30, 2018, we amended the RPAs with Wells Fargo and Citibank to remove the retained beneficial interests, allowing us to sell 100% of our outstanding qualifying accounts receivable balances and receive cash consideration equal to the total balance, less a discount margin equal to LIBOR plus 1% to 3%.



	For the Three Months Ended
	March 31,
	2020			2019
Net cash provided by operating activities	$	9.5		$	10.8
Net cash used in investing activities	(149.0		)	(18.5		)
Net cash provided by (used in) financing activities	507.0			(10.9		)

Operating Activities. For the first three months of ~~2019,~~2020, net cash provided by operating activities was ~~$10.8~~$9.5 million as compared to net cash ~~used in~~provided by operating activities of ~~$228.8~~$10.8 million for the first three months of ~~2018.~~2019. The ~~$239.6~~$1.3 million change in operating cash flows was principally due to year-over-year change in net income of $4.3 million, an favorable net impact from adjustment for non-cash items of $78.5 million, offset by favorable net changes in ~~accounts receivables, accounts~~working capital, excluding cash, and other long term assets and liabilities of $72.8 million. Non-cash items were principally associated with unrealized derivatives and foreign currency remeasurements. The changes in working capital, excluding cash, reflected a $798.1 million net decrease in account payable, customer deposits and ~~derivatives. The increases~~

accrued expenses and other current liabilities, offset by a $880.1 million net decrease in accounts receivable, inventories, and ~~accounts payable were primarily associated with the timing of collections~~short-term derivatives. Net increase in other long term assets and payments. Cash flows from derivative contracts increased by $167.0 million as compared to the first three months of 2018, primarily as a result of roll off and realization of favorable positions during the period.liabilities was $9.2 million.

Investing Activities. For the first three months of ~~2019,~~2020, net cash used in investing activities was ~~$18.5~~$149.0 million as compared to net cash ~~provided by~~used in investing activities of ~~$86.1~~$18.5 million for the first three months of ~~2018.~~2019. The ~~$104.6~~$130.5 million change in investing activities cash flows was principally due to ~~decreased cash receipts~~the acquisition of ~~retained beneficial interests in receivables sales, resulting from the amendment of our RPA arrangement with Wells Fargo and Citibank.~~a business.

Financing Activities. For the first three months of ~~2019,~~2020, net cash ~~used in~~provided by financing activities was ~~$10.9~~$507.0 million as compared to net cash used in financing activities of ~~$80.8~~$10.9 million for the first three months of ~~2018.~~2019. The ~~$69.9~~$517.9 million change was principally due to ~~a $73.7~~$576.2 million ~~increase~~ in net ~~borrowing~~borrowings of debt under our credit facility, partially offset by $55.6 million of common stock repurchases in the first three months of ~~2019~~2020 as compared to the first three months of ~~2018.~~2019.

Other Liquidity Measures

Cash and Cash Equivalents. As of March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, we had cash and cash equivalents of ~~$194.0~~$537.0 million and ~~$211.7~~$186.1 million, respectively.

Credit Facility and Term Loans. ~~On January 30, 2018, we amended our Credit Facility and elected to prepay $300.0 million of our outstanding Term Loans and decrease the borrowing capacity of our Credit Facility to $1.2 billion.~~ We had ~~$506.4~~$512.6 million and ~~$514.8~~$515.6 million in Term Loans outstanding as of March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively. Our Credit Agreement, as amended through March 31, 2020, consists of a revolving loan under which up to $1.3 billion aggregate principal amount could be borrowed, repaid and redrawn, based upon specific financial ratios and subject to the satisfaction of other customary conditions to borrowing. Our Credit Facility includes a sublimit of $400.0 million for the issuance of letters of credit and bankers' acceptances. Under the Credit Facility, we have the right to request increases in available borrowings up to an additional $400.0 million, subject to the satisfaction of certain conditions and we have the right to request increases in available borrowings up to an additional $200.0 million, subject to the satisfaction of certain conditions. The credit facility matures ~~in October 2021. We~~July 2024 .

As of March 31, 2020 and December 31, 2019, we had outstanding borrowings under our Credit Facility totaling ~~$170.0~~$630.0 million ~~as of March 31, 2019~~ and ~~December 31, 2018.~~$55.0 million, respectively. Our issued letters of credit under the Credit Facility totaled ~~$3.8~~$12.0 million and ~~$4.1~~$4.3 million as of March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively. As of March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, the unused portion of our Credit Facility was ~~$986.2 million~~$0.6 billion and ~~$985.9 million.~~$1.2 billion. The unused portion of our Credit Facility is limited by, among other things, our financial leverage ratio, which limits the total amount of indebtedness we may incur, and may, therefore, fluctuate from period to period.

Our Credit Facility and Term Loans contain certain financial and other covenants with which we are required to comply. Our failure to comply with the covenants contained in our Credit Facility and our Term Loans 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, 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. As of March 31, ~~2019,~~2020, we were in compliance with all financial covenants contained in our Credit Facility and our Term Loans.

Other Agreements. Additionally, we have other uncommitted credit lines primarily for the issuance of letters of credit, bank guarantees and bankers’ acceptances. These credit lines are renewable on an annual basis and are subject to fees at market rates. As of March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, our outstanding letters of credit and bank guarantees under these credit lines totaled ~~$417.6~~$404.9 million and ~~$303.6~~$375.2 million, respectively.

We also have ~~RPAs~~accounts receivable financing programs under receivables purchase agreements (“RPAs”) with Wells Fargo Bank, N.A. and Citibank, N.A. that allow for the sale of our accounts receivable in an amount up to ~~an aggregate of $725.0 million~~100% of our ~~accounts receivable. Our sold~~outstanding qualifying accounts receivable ~~under~~balances and receive cash consideration equal to the total balance, less a discount margin equal to LIBOR plus 1% to 3%. The RPA agreements provide the banks with the ability to add or remove customers from these programs based on, among other things, the level of risk exposure the bank is willing to accept with respect to any customer. The fees the banks charge us to purchase the receivables from these customers can also be impacted for these reasons. Under the RPAs, ~~was $479.0 million and $508.2 million, as of~~accounts receivable sold which remained outstanding at March 31, ~~2019~~2020 and December 31, ~~2018,~~2019 were $288.3 million and $405.9 million, respectively. The reduction in accounts receivable sold for the first quarter of 2020 was driven primarilyby lower fuel prices and the decline in activity in our commercial aviation and marine business during the latter part of the quarter as a result of the COVID-19-related impact on air travel, cruise operations and fuel prices.

Short-Term Debt. As of March 31, ~~2019,~~2020, our short-term debt of ~~$45.8~~$53.6 million primarily represents the current maturities (within the next twelve months) of Term Loan borrowings, ~~certain promissory notes related to acquisitions~~finance lease obligations and ~~capital lease obligations.~~a secured borrowing associated with the transfer of tax receivables.

Contractual Obligations and Off-Balance Sheet Arrangements

Except for changes in the contractual obligations and off-balance sheet arrangements described below, there were no other material changes from December 31, ~~2018~~2019 to March 31, ~~2019.~~2020. For a discussion of these matters, refer to ~~“Contractual~~Item 7. Contractual Obligations and Off-Balance Sheet ~~Arrangements” in Item 7~~Arrangements of our ~~2018~~2019 Form 10-K Report.

Contractual Obligations

Derivative Obligations. As of March 31, ~~2019,~~2020, our net derivative obligations were ~~$57.2~~$124.9 million, principally due within one year.

Purchase Commitment Obligations. As of March 31, ~~2019,~~2020, fixed purchase commitments under our derivative programs amounted to ~~$38.8~~$85.9 million, principally due within one year.

Off-Balance Sheet Arrangements

Letters of Credit and Bank Guarantees. In the normal course of business, we are required to provide letters of credit to certain suppliers. A majority of these letters of credit expire within one year from their issuance, and expired letters of credit are renewed as needed. As of March 31, ~~2019,~~2020, we had issued letters of credit and bank guarantees totaling ~~$421.4~~$416.9 million under our Credit Facility and other uncommitted credit lines. For additional information on our Credit Facility and other credit lines, see the discussion in ~~“Liquidity~~Liquidity and Capital ~~Resources”~~Resources above.

Recent Accounting Pronouncements

Information regarding new accounting pronouncements is included in Note 1,1. Basis of Presentation and Significant Accounting Policies ~~in the “Notes to~~accompanying the Consolidated Financial ~~Statements”~~Statements in this 10-Q Report.


Item 3.	Quantitative and Qualitative Disclosures About Market Risk

~~Derivatives~~Derivative Instruments

In March 2020, we entered into a $300 million, one-month LIBOR, floating-for-fixed interest rate non-amortizing swap with a maturity date in March 2025. The swap agreement effectively locks in the variable interest cash flows we will pay for a portion of our Eurodollar rate loans at 0.55%. The fair value of the interest rate swap contract as of March 31, 2020, was a liability of $2.0 million.

There have been no material changes to our exposures to commodity price or foreign currency risk since December 31, 2019. Please refer to our 2019 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, ~~2019,~~2020, see ~~Notes to~~Note 4. Derivative Instruments accompanying the Consolidated Financial Statements – ~~Note 4. Derivatives.~~

There have been no material changes to our exposures to interest rate or foreign currency risk since December 31, 2018. Please refer to our 2018 10-K Report for a complete discussion of our exposure to these risks.within this 10-Q report.


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, ~~2019.~~2020.

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 ~~quarter~~three months ended March 31, ~~2019.~~2020.

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.

Part II — Other Information


Item 1.	Legal Proceedings

On July 20, 2016, we were informed that the U.S. Department of Justice (the “DOJ”) is conducting an investigation into the aviation fuel supply industry, including certain activities by us and other industry participants at an airport in Central America. In connection therewith, we were served with formal requests by the DOJ about our activities at that airport and our aviation fuel supply business more broadly. We are cooperating with the investigation.

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, ~~U.S.,~~ Brazil, Denmark, ~~and~~ South Korea and the U.S. where the amounts under controversy may be material. See Note 8. Income Taxes and Note 12. Commitments and Contingencies within this 10-Q Report as well as refer to Note 9. Commitments and Contingencies and Note 11. Income Taxes within Part IV. Item 15. Notes ~~8 and 12 of~~to the ~~accompanying consolidated financial statements~~Consolidated Financial Statements included in our 2019 10-K Report for additional details regarding certain tax matters.


Item 1A.	Risk Factors

We are supplementing the risk factors described under Part I, Item 1A, Risk Factors of our 2019 10-K Report (the “2019 10-K Risk Factors”) with the additional information and risk factor set forth below, which supplements, and to the extent inconsistent, supersedes the 2019 10-K Risk Factors. The following should be read in conjunction with the 2019 10-K Risk Factors and the information contained in this 10-Q Report, as well as our other reports filed with the SEC. The developments relating to the COVID-19 pandemic described below have heightened, and in certain cases, may exacerbate the risks disclosed in the 2019 10-K Risk Factors, and such risk factors are further qualified by the information relating to the pandemic that is described in this 10-Q Report. Except as updated herein, there have been no material changes with respect to the 2019 10-K Risk Factors and they are incorporated by reference herein.

Adverse conditions or events affecting the aviation, marine and land transportation industries may have a material adverse effect on our business.

Our business is focused on the marketing of fuel and other related products and services primarily to the aviation, marine and land transportation industries, which are generally affected by economic cycles. Therefore, weak economic conditions can have a negative impact on the business of our customers which may, in turn, have an adverse effect on our business. For example, the current coronavirus (COVID-19) pandemic has had a significant impact on the global economy generally, as well as the aviation, land and marine transportation industries, where companies operating in these sectors have been experiencing sharp declines in demand arising from the various measures enacted by governments around the world to contain the spread of the virus. Commercial passenger airlines and cruise lines have been particularly impacted by the travel restrictions and stay-at-home orders, and customers in our marine and land segments have also been adversely affected by such restrictions as well as the extended shutdown of various businesses in affected regions. As a result, we have recently experienced a decline in sales volume and profitability across our aviation, land and marine segments. Furthermore, if the pandemic continues for an extended period of time, the financial condition of our customers may deteriorate such that there is a greater risk of customer bankruptcies and credit losses, either of which could lead to significant increases in our bad debt expense. The ultimate magnitude and duration of these adverse impacts on our business will depend on the timing and extent to which the global economy, and our customers in the aviation land and marine transportation industries in particular, recover from the current crisis.

Additionally, our business and that of our customers can be adversely impacted by political instability, terrorist activity, piracy, military action, transportation, terminal or pipeline capacity constraints, natural disasters and other weather-related events that disrupt shipping, flight operations, land transportation or the availability of fuel, which may negatively impact sales of our products

and services. Any additional political or governmental developments or otherglobal health concerns or crises in the countries in which we or our customers operate, could also result in further social, economic or labor instability. Accordingly, the effects of any of the foregoing risks and uncertainties on us or our customers could have a material adverse effect on our business, results of operations and financial condition.

Lastly, our business could also be adversely affected by merger activity in the aviation, marine or land transportation industries, which may reduce the number of customers that purchase our products and services, as well as the prices we are able to charge for such products and services. For example, the shipping and aviation industries have gone through a period of significant consolidation, which has created a concentration of volume among a limited number of larger shipping companies and commercial airlines. Larger shipping companies and airlines often have greater leverage, are more sophisticated purchasers of fuel and have a greater ability to buy directly from major oil companies and suppliers. Accordingly, this can negatively impact our value proposition to these types of customers and increases the risk of disintermediation.

The COVID-19 pandemic and related global economic slowdown have recently had an adverse impact on our business and, depending on the duration of the pandemic, could have a material adverse effect on our business, results of operations, financial condition, liquidity and cash flows.

The outbreak of the novel coronavirus (COVID-19), which was declared a pandemic by the World Health Organization in March 2020, has created significant volatility, uncertainty and disruption in the global economy. The rapid spread of COVID-19 has caused governments around the world to implement stringent measures to help control the spread of the virus, including quarantines, “stay-at-home” or “shelter-in-place” orders, social-distancing mandates, travel restrictions, and closures or reduced operations for businesses, governmental agencies, schools and other institutions, among others. While, governments and central banks in several parts of the world have enacted fiscal and monetary stimulus policies to counteract the adverse effects of the pandemic, the effectiveness of such actions are still uncertain. Furthermore, the restrictions on travel, “stay-at-home” or “shelter-in-place” orders and business closures has also led to a precipitous decline in fuel prices in response to concerns about demand for fuel, further exacerbated by recent disagreements regarding crude oil production levels between the OPEC members and other oil producing countries such as Russia, as well as related global storage considerations.

In response to the pandemic and measures taken by applicable governmental authorities, we took prompt action to ensure the safety of our employees and other stakeholders, as well as commenced a number of initiatives relating to cost reduction, liquidity and operating efficiencies. While the pandemic and associated impacts on economic activity had a limited adverse effect on our results of operations and financial condition during the first quarter of 2020, we have since seen a sharp decline in demand and related sales volume as large sectors of the global economy have been adversely impacted by the crisis. Accordingly, we expect that our results of operations will be more significantly impacted in the second quarter of 2020 as a result of the crisis, and the extent of the impact on the balance of the year will be dependent on the duration of the pandemic and the eventual recovery.

Although we are unable to predict the ultimate impact of the COVID-19 pandemic at this time or enumerate all potential risks to our business, given the nature and significance of the crisis, we believe that in addition to the impacts described above, other current or potential impacts of this unprecedented event include, but are not limited to:

disruptions in our supply chains due to transportation delays, travel restrictions, cost increases, and closures of businesses or facilities;

disruptions resulting from office and facility closures, reductions in operating hours, and changes in operating procedures, including additional cleaning and disinfecting procedures;

possible infections or quarantining of our employees which could impact our ability to service our customers or operate our business;

impacts related to delayed customer payments and payment defaults associated with customer liquidity issues and bankruptcies, as well as other liquidity challenges, such as reduced availability under our senior credit facility due to financial covenant restrictions tied to our financial performance;

volatility in the global financial markets, which could have a negative impact on our ability to access capital and additional sources of financing in the future;

notices from customers, suppliers and other third parties asserting force majeure or other bases for their non-performance;

losses on hedging transactions with customers arising from the sharp decline in fuel prices and their inability to benefit from the reduced cost of fuel due to substantial reductions in their operations;

litigation risk and possible loss contingencies related to COVID-19 and its impact, including with respect to commercial contracts, employee matters and insurance arrangements;

extended periods of reduced demand and low fuel prices that impact our sales volume and related profitability;

heightened risk of cybersecurity issues, as digital technologies may become more vulnerable and experience a higher rate of cyber attacks in a remote connectivity environment;

reduction of our global workforce to adjust to market conditions, including increased costs associated with severance payments, retention issues, and an inability to hire employees when market conditions improve;

increased costs associated with rationalization of our portfolio of businesses and other restructuring activities;

a need to preserve liquidity, which could result in actions such as a reduction or suspension of our quarterly dividend or stock repurchases;

asset impairments, including an impairment of the carrying value of our goodwill, along with other accounting charges if expected future demand for our products and services materially decreases; and

a structural shift in the global economy and its demand for fuel and related products and services as a result of changes in the way people work, travel and interact, or in connection with a global recession.

We are monitoring and continue to assess the ongoing effects of the COVID-19 pandemic on our businesses and operations. Developments related to the pandemic have been rapidly changing, and additional impacts and risks may arise that we may not currently foresee. Furthermore, the full extent to which the pandemic may adversely impact us or our results is currently uncertain and difficult to assess or predict with meaningful precision. We are similarly unable to predict the degree to which the pandemic may ultimately impact our customers, suppliers, and other business partners’ financial condition, but a material effect on these parties could also adversely affect us.

The extent to which the pandemic will ultimately impact us will depend on numerous future developments that are highly uncertain, including the severity and duration of the crisis and the extent of any further actions taken by governments in response, the ultimate impact on global economic activity and how quickly, and to what extent, normal economic and operating conditions can resume on a sustainable basis globally, as well as the extent and duration of the effect of the crisis on consumer confidence and spending.

Finally, the effects of COVID-19 may remain prevalent for a significant period of time and may continue to adversely affect our business, results of operations and financial condition even after the outbreak has subsided. The pandemic may also have the effect of exacerbating many of the other risks discussed in our 10-K Risk Factors and this 10-Q Report, which could in turn have a material adverse effect on us. Accordingly, the occurrence of one or more the foregoing factors could increase our costs and/or reduce the demand for our products, which could therefore have a material adverse effect on our business, financial condition, results of operations, liquidity and cash flows. For additional information on the impact of the pandemic, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Business Overview” and for a discussion of the impact of changes in fuel prices on our business, see the 2019 10-K Risk Factors.


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 quarterly period ended March 31, ~~2019~~2020 (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)
1/1/2019 - 1/31/2019 —
$ 21.41
—
$ 79,986
2/1/2019 - 2/28/2019 3
23.99
—
79,986
3/1/2019 - 3/31/2019 —
—
—
79,986
Total 3
$ 23.89
—
$ 79,986



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)
1/1/2020 - 1/31/2020	—	$	—	—	$	114,580
2/1/2020 - 2/29/2020	1	39.20		—	114,580
3/1/2020 - 3/31/2020	2,200	25.28		2,200	258,944
Total	2,201	$	25.29	2,200	$	258,944

(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 October 2017, our Board of Directors (the "Board") approved a new common stock repurchase program (the “Repurchase Program”), which replaced the ~~remainder of the existing~~ program ~~and authorized the purchase of up to~~in place at that time, authorizing $100.0 million in common stock ~~(the “Repurchase Program”). The~~repurchases. In May 2019, the Board authorized an increase to the October 2017 repurchase authorization by $100.0 million, bringing the authorized repurchases at that time to $200.0 million. In March 2020, the Board approved a new stock repurchase program authorizing $200.0 million in common stock repurchases to begin upon the completion of the October 2017 Repurchase ~~Program does~~Program. Our repurchase programs do not require a minimum number of shares of common stock to be purchased, ~~has~~have no expiration date and may be suspended or discontinued at any time. As of March 31, ~~2019,~~2020, approximately ~~$80.0~~$258.9 million remains available for purchase under ~~the Repurchase Program.~~our repurchase programs. The timing and amount of shares of common stock to be repurchased under the ~~Repurchase Program~~repurchase programs will depend on market conditions, share price, securities law and other legal requirements and factors.


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, ~~2019,~~2020, formatted in XBRL (Extensible Business Reporting Language); (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income and Comprehensive Income, (iii) Consolidated Statements of Shareholders’ Equity, (iv) Consolidated Statements of Cash Flows, and (v) Notes to the Consolidated Financial Statements.

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: May ~~7, 2019~~5, 2020	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

3336



	Potential Collateral Requirements for Derivative Liabilities with Credit-Risk-Contingent Features
	As of March 31, 2019		As of December 31, 2018
Net derivatives liability positions with credit contingent features	$	2.6	$	7.2
Maximum potential collateral requirements	$	2.6	$	7.2



	For the Three Months Ended
	For March 31, 2019
Finance lease cost:
Amortization of right-of-use assets	$	1.3
Interest on lease liabilities	0.2
Operating lease cost	13.1
Short-term lease cost	4.5
Variable lease cost	3.6
Sublease income	(2.5		)
Total lease cost	$	20.2



	Operating Leases		Finance Leases
2019 (excluding the three months ended March 31, 2019)	$	36.1	$	3.2
2020	39.0		4.1
2021	31.5		3.2
2022	25.0		2.8
2023	20.2		2.2
Thereafter	59.6		3.3
Total remaining lease payments (undiscounted)	211.4		18.8
Less: imputed interest	39.5		2.1
Present value of lease liabilities	$	171.9	$	16.7



Year Ended December 31,
2019	$	50.7
2020	37.1
2021	30.7
2022	23.7
2023	17.8
Thereafter	48.5
	$	208.6



	Classification	As of March 31, 2019
Assets
Operating Lease Assets	Identifiable intangible and other non-current assets	$	165.7
Finance Lease Assets	Property and equipment, net	16.2

Liabilities
Operating Lease Liability - Current	Accrued expenses and other current liabilities	39.2
Operating Lease Liability - Long Term	Other long-term liabilities	132.7
Finance Lease Liability - Current	Current maturities of long-term debt and capital leases	3.7
Finance Lease Liability - Long Term	Long-term debt	13.0



	Operating Leases			Finance Leases
Weighted-average remaining lease term (years)	6.5			5.6
Weighted-average discount rate	6.0		%	2.7		%
Cash paid for amounts included in the measurement of lease liabilities (in millions):
Operating cash flows from finance leases	$	—		$	0.1
Operating cash flows from operating leases	13.3			—
Financing cash flows from finance leases	—			0.9
Right of use assets obtained in exchange for new operating lease liability (noncash in millions)	8.4			—