Company: WKC
Filing Date: 2025-08-01
Form Type: 10-Q
Source: 0000789460-25-000019
Chunk: 5

Company: WORLD KINECT CORP
Filing Date: 2025-08-01
Form: 10-Q
Item: Part I, Item 2
Chunk 5
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 efficiency and effectiveness. Additionally, on April 9, 2025, we closed the Watson Fuels sale. 

During the second quarter of 2025, following our exit from the U.K. land fuels business, as part of the evolution of our strategy we completed our reassessment of the remaining business lines within the land reporting unit. Through this process, we updated key assumptions regarding certain lines of business and made related downward revisions to our long-term forecasts versus prior projections, reflecting both our efforts to optimize the land portfolio to focus on core activities with the highest return potential and the unanticipated persistence of macroeconomic pressures and underperformance against financial expectations. These changes led us to conclude that it was more likely than not that the fair value of the land reporting unit may be less than its carrying value. As a result, we conducted a quantitative impairment test as of June 30, 2025. The resulting goodwill impairment for the land reporting unit reflects our disciplined capital allocation strategy, which emphasizes portfolio optimization and a sharpened focus on areas aligned with our long-term growth objectives. See Note 4. Goodwill for additional information.

Marine Segment

Due to the generally spot nature of sales in our marine business, we have traditionally benefited from elevated fuel prices and volatility as well as a constrained credit environment. We believe that our marine business is well-positioned to generate relatively moderate levels of earnings in stable markets and provide additional value in volatile and credit constrained markets.

Macroeconomic Environment

Significant uncertainty remains regarding the extent to which recent changes in U.S. trade policy will impact international trade and demand for global transportation services. Tariffs and other trade restrictions can lead to continuing uncertainty and volatility in global financial and commodity markets, declining consumer confidence, lower personal and business travel and consequent demand for our fuel products. Additionally, in recent years, inflation in the United States and other jurisdictions in which we do business increased significantly, driven in part by supply chain disruptions, labor shortages and increased commodity prices, which generally resulted in higher costs. Inflation, however, decelerated in 2024 as supply chains stabilized. 

In a rising cost environment, there may be offsetting benefits either inherent in certain parts of our business or that may result from proactive measures we take to reduce the impact of inflation on our net operating results. These benefits can include higher commodity prices that typically result in a constrained credit environment, often creating favorable market conditions that increase demand for our services, as well as our ability to renegotiate prices due to many of our sales contracts being