WORLD KINECT CORPWKC
WORLD KINECT CORP Fair Value Disclosure
5. Fair Value Measurements
The carrying amounts of cash and cash equivalents, net accounts receivable, accounts payable and accrued expenses and other current liabilities approximate fair value based on their short-term maturities. With the exception of the Convertible Notes, as discussed in Note 9. Debt, Interest Income, Expense, and Other Finance Costs, the carrying values of our debt and notes receivable approximate fair value as these instruments bear interest either at variable rates or fixed rates, which are not significantly different from market rates. The fair value measurements for our debt and notes receivable are considered to be Level 2 measurements based on the fair value hierarchy.
Recurring Fair Value Measurements
The following tables present information about our gross assets and liabilities that are measured at fair value on a recurring basis (in millions):
| Fair Value Measurements as of December 31, 2025 | ||||||||||||||||||||||||||
| Level 1 Inputs | Level 2 Inputs | Level 3 Inputs | Total Fair Value | |||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||
| Commodities contracts | $ | 113.4 | $ | 159.6 | $ | 10.7 | $ | 283.7 | ||||||||||||||||||
| Foreign currency contracts | — | 7.6 | — | 7.6 | ||||||||||||||||||||||
| Cash surrender value of life insurance | — | 20.1 | — | 20.1 | ||||||||||||||||||||||
| Total assets at fair value | $ | 113.4 | $ | 187.3 | $ | 10.7 | $ | 311.4 | ||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||||
| Commodities contracts | $ | 118.5 | $ | 96.4 | $ | 3.8 | $ | 218.6 | ||||||||||||||||||
| Foreign currency contracts | — | 9.8 | — | 9.8 | ||||||||||||||||||||||
| Total liabilities at fair value | $ | 118.5 | $ | 106.1 | $ | 3.8 | $ | 228.4 | ||||||||||||||||||
| Fair Value Measurements as of December 31, 2024 | ||||||||||||||||||||||||||
| Level 1 Inputs | Level 2 Inputs | Level 3 Inputs | Total Fair Value | |||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||
| Commodities contracts | $ | 157.4 | $ | 300.8 | $ | 9.4 | $ | 467.6 | ||||||||||||||||||
| Interest rate contract | — | 2.9 | — | 2.9 | ||||||||||||||||||||||
| Foreign currency contracts | — | 29.1 | — | 29.1 | ||||||||||||||||||||||
| Cash surrender value of life insurance | — | 20.0 | — | 20.0 | ||||||||||||||||||||||
| Total assets at fair value | $ | 157.4 | $ | 352.8 | $ | 9.4 | $ | 519.6 | ||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||||
| Commodities contracts | $ | 165.9 | $ | 209.1 | $ | 3.7 | $ | 378.7 | ||||||||||||||||||
| Foreign currency contracts | — | 22.9 | — | 22.9 | ||||||||||||||||||||||
| Total liabilities at fair value | $ | 165.9 | $ | 232.0 | $ | 3.7 | $ | 401.6 | ||||||||||||||||||
For our derivative contracts, we may enter into master netting, collateral and offset agreements with counterparties. These agreements provide us the ability to offset a counterparty's rights and obligations, request additional collateral when necessary, or liquidate the collateral in the event of counterparty default. We net the fair value of cash collateral paid or received against fair value amounts recognized for net derivative positions executed with the same counterparty under the same master netting or offset agreement.
We have elected to offset the recognized fair value amounts for multiple derivative instruments executed with the same counterparty in our financial statements when a legal right of offset exists. The following tables summarize those derivative balances subject to the right of offset as presented on our Consolidated Balance Sheets (in millions):
| Fair Value as of December 31, 2025 | ||||||||||||||||||||||||||||||||||||||
| Gross Amounts Recognized | Gross Amounts Offset | Net Amounts Presented | Cash Collateral | Gross Amounts Without Right of Offset | Net Amounts | |||||||||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||||||||||||
| Commodities contracts | $ | 283.7 | $ | 151.3 | $ | 132.4 | $ | 8.2 | $ | — | $ | 124.2 | ||||||||||||||||||||||||||
| Foreign currency contracts | 7.6 | 6.5 | 1.1 | — | — | 1.1 | ||||||||||||||||||||||||||||||||
| Total assets at fair value | $ | 291.3 | $ | 157.8 | $ | 133.5 | $ | 8.2 | $ | — | $ | 125.3 | ||||||||||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||||||||||||||||
| Commodities contracts | $ | 218.6 | $ | 151.3 | $ | 67.4 | $ | 6.0 | $ | — | $ | 61.3 | ||||||||||||||||||||||||||
| Foreign currency contracts | 9.8 | 6.5 | 3.3 | — | — | 3.3 | ||||||||||||||||||||||||||||||||
| Total liabilities at fair value | $ | 228.4 | $ | 157.8 | $ | 70.6 | $ | 6.0 | $ | — | $ | 64.6 | ||||||||||||||||||||||||||
| Fair Value as of December 31, 2024 | ||||||||||||||||||||||||||||||||||||||
| Gross Amounts Recognized | Gross Amounts Offset | Net Amounts Presented | Cash Collateral | Gross Amounts Without Right of Offset | Net Amounts | |||||||||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||||||||||||
| Commodities contracts | $ | 467.6 | $ | 253.2 | $ | 214.4 | $ | 0.1 | $ | — | $ | 214.3 | ||||||||||||||||||||||||||
| Interest rate contract | 2.9 | — | 2.9 | — | — | 2.9 | ||||||||||||||||||||||||||||||||
| Foreign currency contracts | 29.1 | 20.7 | 8.5 | — | — | 8.5 | ||||||||||||||||||||||||||||||||
| Total assets at fair value | $ | 499.6 | $ | 273.9 | $ | 225.8 | $ | 0.1 | $ | — | $ | 225.6 | ||||||||||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||||||||||||||||
| Commodities contracts | $ | 378.7 | $ | 253.2 | $ | 125.5 | $ | 12.1 | $ | — | $ | 113.4 | ||||||||||||||||||||||||||
| Foreign currency contracts | 22.9 | 20.7 | 2.3 | — | — | 2.3 | ||||||||||||||||||||||||||||||||
| Total liabilities at fair value | $ | 401.6 | $ | 273.9 | $ | 127.8 | $ | 12.1 | $ | — | $ | 115.6 | ||||||||||||||||||||||||||
At December 31, 2025 and 2024, we did not present any amounts gross on our Consolidated Balance Sheets where we had the right to offset.
Concentration of Credit Risk
Our individual over-the-counter ("OTC") counterparty exposure is managed within predetermined credit limits and includes the use of cash-call margins when appropriate, thereby reducing the risk of significant nonperformance. At December 31, 2025, none of our counterparties represented over 10% of our credit exposure to OTC derivative counterparties.
Nonrecurring Fair Value Measurements
The following table summarizes our goodwill and other asset impairment charges and related nonrecurring fair value measurements (in millions):
| Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
Goodwill impairment (1) | $ | 528.3 | $ | — | $ | — | ||||||||||||||
Land Fuel Transportation and Lubricants disposal group impairment (2) | 49.7 | — | — | |||||||||||||||||
Watson Fuels asset group impairment (3) | 44.5 | — | — | |||||||||||||||||
Falmouth disposal group impairment (4) | 35.0 | — | — | |||||||||||||||||
Intangible asset impairments (5) | 21.0 | — | — | |||||||||||||||||
Asset impairments associated with exit activities (6) | 5.8 | 3.1 | 11.2 | |||||||||||||||||
Cost method investment impairments (7)(8) | 5.4 | — | 5.0 | |||||||||||||||||
Equity method investment impairments (9) | — | 18.2 | 14.1 | |||||||||||||||||
Other | — | 7.7 | 2.5 | |||||||||||||||||
Goodwill and other asset impairments total | $ | 689.6 | $ | 29.0 | $ | 32.8 | ||||||||||||||
(1)See Note 7. Goodwill and Identifiable Intangible Assets for additional disclosures related to goodwill impairments recognized during the year ended December 31, 2025.
(2)See Note 2. Acquisitions and Divestitures for additional disclosures related to asset impairment charges related to the Land Fuel Transportation and Lubricants disposal group.
(3)During the first quarter of 2025, we identified an impairment indicator with respect to the Watson Fuels asset group within our land segment. We determined that the carrying amount was not recoverable and recognized an asset impairment charge of $44.5 million during the three months ended March 31, 2025. The fair value of the asset group was determined based on a market approach using the estimated sale proceeds for the Watson Fuels sale. The measurement is categorized as Level 2 within the fair value hierarchy. As discussed in Note 2. Acquisitions and Divestitures, we completed the Watson Fuels sale on April 9, 2025.
(4)During the second quarter of 2025, we identified impairment indicators with respect to the Falmouth asset group within our marine segment. We determined that the carrying amount of the Falmouth asset group was not recoverable and recognized an asset impairment charge of $31.6 million. The fair value of the asset group, excluding the related land, was determined to be nominal based on an income approach using a discounted cash flow methodology. As a result the full carrying amount of the long-lived assets, excluding the related land, was impaired. The fair value measurement is categorized as Level 3 within the fair value hierarchy. As discussed in 2. Acquisitions and Divestitures, during the fourth quarter of 2025, management further assessed the Falmouth asset group as a disposal group under the held for sale impairment model and recognized an additional impairment charge of $3.3 million.
(5)During the second quarter of 2025, we identified impairment indicators with respect to certain trade names and trademarks as a result of steps taken to consolidate branding within our land segment. We determined that the carrying value of the assets was not recoverable and recognized an asset impairment charge of $8.0 million, which represents a full impairment of the related intangible assets. The fair value measurement is categorized as Level 3 within the fair value hierarchy. During the fourth quarter of 2025, we recognized an asset impairment charge of $13.0 million related to certain trade names and trademarks as a result of a significant reduction in the projected cash flows for certain lines of business within our land segment. We determined that the carrying value of the assets was not recoverable and recognized a partial impairment of the related intangible assets to reduce the carrying value of the trade names and trademarks to their estimated fair value of $16.3 million.
(6)See Note 16. Restructuring and Exit Activities for additional disclosures related asset impairment charges recognized in connection with restructuring and exit activities.
(7)During the fourth quarter of 2025, we identified an impairment indicator with respect to one of our investees, accounted for as a cost method investment, which has experienced sustained deterioration in its financial condition and operating outlook, resulting in continued pressure on expected future cash flows and constrained access to external capital on terms sufficient to support the carrying value of our investment. As a result, the fair value of the investment was determined to be nominal and the investment was fully impaired. Due to the significance of unobservable inputs, the measurement is categorized as Level 3.
(8)During the fourth quarter of 2023, we identified an impairment indicator with respect to one of our investees, accounted for as a cost method investment, which we were notified is not able to raise capital and therefore intends to restructure its operations. As a result, the fair value of the investment was determined to be nominal and the investment was fully impaired. Due to the significance of unobservable inputs, the measurement is categorized as Level 3.
(9)During the fourth quarter of 2023, we identified an other-than-temporary impairment indicator with respect to an equity method investment in a non-core business within corporate and other due to the inability of the investee to sustain an earning capacity at its pre-pandemic levels. At that time, the investment was written down to its fair value of $19.1 million (15.0 million GBP) as of December 31, 2023, resulting in the recognition of an impairment loss of $14.1 million during the three months ended December 31, 2023. During the fourth quarter of 2024, we identified an impairment indicator with respect to the same investment, as the investee continues to incur operating losses and has been unable to achieve expected results. The fair value of the investment was determined to be nominal and as a result the full carrying amount of the investment was impaired. The fair value of the investment was measured in each period using a combination of an income approach based on estimated future cash flows available to us as of the measurement dates and a market approach using a selection of global companies comparable with the operations of the investee to derive market-based multiples. Due to the significance of unobservable inputs, the measurements are categorized as Level 3.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 24, 2026 | Showing above |
| 2024 | Feb 25, 2025 | |
| 2023 | Feb 23, 2024 | |
| 2022 | Feb 24, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Mar 1, 2021 | |
| 2019 | Mar 2, 2020 | |
| 2018 | Mar 1, 2019 | |
| 2017 | Feb 28, 2018 | |
| 2016 | Feb 21, 2017 | |
| 2015 | Feb 16, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.