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Good day, everyone, and welcome to the World Kinect Corporation Second Quarter 2025 Earnings Conference Call. With us today are Michael J. Kasbar, Chairman and Chief Executive Officer; Ira M. Birns, President and Chief Financial Officer; and Braulio Medrano, Senior Director, FP&A and Investor Relations. [Operator Instructions] Now it's my pleasure to turn the call to Braulio Medrano, Senior Director, FP&A and Investor Relations. Please go ahead.

Thank you, Carmen, and good evening, everyone. Welcome to World Kinect's Second Quarter 2025 Earnings Conference Call, which will be presented alongside our live slide presentation. Today's presentation is also available via webcast on our Investor Relations website. I'm Braulio Medrano, Senior Director of FP&A and Investor Relations. With us on the call today is Michael Kasbar, Chairman and Chief Executive Officer; and Ira Birns, President and Chief Financial Officer. And now I'd like to review our safe harbor statement. Certain statements made today, including comments about our expectations regarding future plans and performance, are forward-looking statements that are subject to a range of uncertainties and risks that could cause actual results to materially differ. Factors that could cause results to materially differ can be found in our most recent Form 10-K and other reports filed with the Securities and Exchange Commission. We assume no obligation to revise or publicly release the results of any revisions to these forward-looking statements in light of new information or future events. This presentation also includes certain non-GAAP financial measures. A reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures is included in our press release and can be found on our website. We will begin with several minutes of prepared remarks, which will then be followed by a question-and-answer period. At this time, I would like to introduce our Chairman and Chief Executive Officer, Michael Kasbar.

Thank you, Braulio. Good evening, everyone, and welcome to our call today. I'd like to start by noting that our global commercial, business and general aviation fuel and services platform continues to perform very well. Demand for commercial and business aviation fuel and services remains strong, particularly in Europe, where our operated and inventory airport locations have continued to deliver strong results. With the strong summer travel season underway, we expect this momentum to continue into the third quarter. The past few months have also been a period of meaningful transformation for World Kinect. Despite continued macroeconomic headwinds, we are making deliberate and necessary moves to streamline our portfolio. This is reducing structural complexity and allowing us to focus and sharpen execution in the parts of our business that offer the greatest opportunity for sustainable value creation in the medium and long term. Consistent with this strategy that we have outlined in prior earnings calls, we have scaled down exposure or exited underperforming activities that have exhibited earnings volatility and refocused our capital and team to strengthen our capabilities in businesses and geographies that deliver recurring revenue and higher economic value. Our transformation accelerated recently with the sale of our U.K. land operations following a similar divestiture of certain Brazilian assets in late 2024 and continues with the ongoing refinement of the remaining portfolio of activities in our land segment. The Land segment, as you've seen, experienced another challenging quarter. In an environment of continued global economic uncertainty and demand weakness in parts of our North American liquid fuels business, we are making difficult but necessary choices to reshape our business around core markets that represent opportunities for a more predictable and more consistent earnings contribution. Aside from the impact of a discrete item that affected second quarter results, which Ira will describe shortly, our Global Marine segment delivered core results generally in line with expectations despite competitive market conditions. From a capital deployment standpoint, we continue to follow a balanced approach. During the second quarter, we took another step forward in our commitment to delivering shareholder value by increasing our quarterly dividend, an action that reflects both our confidence in the business and the strength of our cash flow generation capabilities. In a time of market complexity, our ability to generate consistent and sustainable cash flow allows us to reinvest in our highest performing platforms while also returning capital to shareholders in a disciplined and meaningful way without sacrificing the pursuit of strategic growth opportunities. In summary, while we are navigating a challenging macro environment, we continue investing in our most resilient and ratable platforms while shedding assets and exiting business activities that no longer meet our return and runway thresholds. This is increasing our focus on operational discipline and portfolio selection. While there's more work to do, I'm proud of the progress we've made so far and confident in our ability to continue to drive medium- and long-term value for our shareholders. With that, I'll turn it over to Ira for more detail on the quarter.

Thank you, Michael, and good evening, everyone. Before I review our second quarter operating results, I'd like to walk through several GAAP to non-GAAP adjustments recorded during the second quarter. Reconciliations are as always, on our Investor Relations website and today's webcast presentation. Our second quarter non-GAAP adjustments totaled approximately $487 million or $373 million after tax. The most significant adjustment relates to a noncash intangible asset impairment totaling $367 million within our land segment, $359 million of which is related to goodwill and $8 million related to other intangible assets in land. The goodwill impairment was driven by our reassessment of the remaining business activities within land and the related revisions to our long-term forecasts. As part of our disciplined capital allocation strategy, we continue to actively shed underperforming assets and streamline business activities that fall short of our return thresholds, enabling us to concentrate our operational focus on core activities with leverageable platforms, stronger returns and the most significant growth opportunities. $82 million of the non-GAAP adjustments relate to the sale of our U.K. land business that we completed in April. A significant portion of this overall adjustment, approximately $55 million relates to noncash unrealized foreign currency translation losses previously included within shareholders' equity. In our Marine segment, we recorded a $32 million asset impairment in the second quarter related to a physical inventory location that no longer aligns with our long-term strategic objectives. The remaining $6 million in non-GAAP adjustments principally consists of additional restructuring charges associated with the company-wide transformation, which we began in the first quarter. More specifically, these charges relate to an initiative to streamline our global finance back-office operations to enhance scalability and better support our medium- and long-term strategic objectives. Now let's turn to our second quarter operating results. And as a reminder, the following results exclude the impact of the non-GAAP adjustments that I just reviewed. On a consolidated basis, second quarter total volume was $4.2 billion, that's down 3% year-over-year, and consolidated gross profit declined 5% from last year's second quarter to $232 million. That's below the guidance range provided last quarter. While weaker- than-expected results in land were largely offset by stronger results in Aviation, consolidated gross profit came in below the range provided last quarter due largely to an unexpected unfavorable transaction tax settlement in our Marine business. While gross profit did decline 5% year-over-year, as a result of numerous strategic actions taken over the past year, adjusted operating income actually increased 11% year-over-year, demonstrating our continuing focus on improving our overall operating performance and returns. In the second quarter, our aviation volume was 1.9 billion gallons. That's up 2% year-over-year. Aviation gross profit was $138 million. That's an increase of $10 million or 8% year-over-year. This increase is principally attributable to our airport locations in Europe and our business and general aviation activities. Partially offsetting these increases is the impact of the Avinode sale, which was completed during the second quarter of last year. As we look to the seasonally strong third quarter for aviation, we expect aviation gross profit to be up meaningfully year-over-year, driven principally by our on-airport operations in Europe, but also a recent increase in government activity as well. In the second quarter, land volumes declined 7% year-over-year, primarily due to the impact of the sale of our U.K. and Brazil land businesses and also the strategic exit of certain North American operations in late 2024 as well as some softness in parts of our liquid fuels business in North America. Land gross profit was $67 million in the second quarter. That's down 17% year-over-year, again, principally related to the U.K. sale and the exit of certain North American land operations in the fourth quarter of '24, but also the impact from lower volumes in parts of our core liquid fuels business in North America that I just mentioned. Looking at the entire land business, the results we forecast in the beginning of the quarter simply did not materialize. This is due in part to the volume pressure I just mentioned, but also macroeconomic factors, which impacted our power business in Europe and even our sustainability-related products and service business activities. Looking ahead to the third quarter, we expect sequential seasonal improvement in land performance. However, year-over-year gross profit will remain lower, reflecting similar dynamics to those experienced in the second quarter, namely the impact of our portfolio changes and continued market challenges in parts of the business. We remain focused on proactively evaluating and addressing any remaining underperforming activities within the land segment, and we remain confident in our ability to further reshape our land business, which should drive improved returns and margins and a much clearer growth trajectory. In the second quarter, marine volumes declined 7% year-over-year, while gross profit decreased approximately 26%. While the volume decline was primarily related to ongoing global trade-related uncertainty, the decline in gross profit was primarily related to an unfavorable transaction tax settlement recorded in the second quarter and weaker performance at certain marine physical inventory locations in the U.S. In our core resale business, while volumes declined year-over-year, our team did a great job keeping gross profit generally flat despite what remains a quite competitive market environment. As we look to the third quarter, we expect marine gross profit to be down year- over-year, considering continuing weakness in certain physical interior locations in particular. As we look to the third quarter and with the backdrop of the related segment gross profit comments shared a moment ago, we expect consolidated gross profit to be in the range of $252 million to $262 million. Moving on to expenses. Consolidated operating expenses were $173 million in the second quarter, which is below the guidance range we provided last quarter and down 10% year-over-year. As we look ahead to the third quarter, we expect operating expenses to be in the range of $185 million to $189 million, down again year-over-year, driven in part by our recent divestitures, but also our ongoing efforts to further streamline our cost structure. We continue to maintain a disciplined approach to cost management and are actively pursuing further opportunities to streamline operations and enhance profitability, including the finance initiative I mentioned earlier. Interest expense, that was $26 million in the second quarter. That's down about 7% year-over-year and consistent with the guidance provided last quarter. For the third quarter, we expect interest expense to be in the range of $25 million to $28 million. Our second quarter adjusted effective tax rate was 11%, which was lower than anticipated going into the second quarter. This was driven in large part by the sale of the U.K. business as well as this quarter's goodwill impairment, which was largely related to our U.S. entities and impacted our global income mix. At this stage, we expect our adjusted effective tax rate for the full year to be in the range of 20% to 22%, which implies higher more normalized quarterly rates in the second half of the year. During the second quarter, we generated operating cash flow of $28 million and free cash flow of $13 million, increasing our year-to- date operating and free cash flow to $143 million and $113 million, respectively. This strong cash flow performance has enabled us to return approximately $64 million to shareholders, $45 million through share repurchases and $19 million in dividends in the first half of the year. This is evidence of our continued commitment to allocating a meaningful portion of our cash flow to buybacks and dividends to maximize shareholder value. With only $415 million of net debt currently and more than $1 billion of available liquidity, our balance sheet remains strong and liquid, enabling us to actively pursue an expanding pipeline of investment opportunities. We believe we have growing opportunities to accelerate growth in our core business activities through additional reasonably valued strategic and synergistic investments. In closing, I'd like to leave you with a few thoughts. Aviation clearly continues to shine with second quarter gross profit up 8% year-over-year, driven by strong performance at our on-airport operations in Europe and our business and general aviation activities and a strong summer season is underway. Aside from the impact of exiting certain markets and activities, land clearly underperformed our expectations going into the quarter, but contributions from our core activities were generally stable year-over-year. We are continuing to refine the land portfolio, placing a greater focus on core ratable activities with the strongest returns and greatest medium- and long-term growth opportunities. We believe these efforts position the land segment for improving performance looking forward. Marine's second quarter results were generally in line with expectations, while impacted by some weakness in certain physical inventory locations, our core resale profitability remained stable year-over-year despite competitive market conditions. Operating expenses came in below guidance for the second quarter and declined meaningfully year-over-year, reflecting our continued discipline in driving operating efficiencies, including our latest initiative intended to streamline back-office operations and finance which should pay nice dividends going forward. We generated $28 million in operating cash flow and $13 million in free cash flow during the second quarter, and we raised our quarterly dividend by 18%, and we have returned approximately $64 million to shareholders through share repurchases and dividends year-to-date. While macroeconomic and market conditions impacted portions of our business in the second quarter, we continue to take decisive steps to reshape our portfolio and focus on our most resilient, ratable and higher-return core activities that will support medium and long-term value creation. Our transformation initiatives are ongoing, and we continue our disciplined approach to managing costs. With a clear strategy, we remain committed to disciplined execution, operational efficiency and delivering sustainable returns for our shareholders. Thank you. I would now like to turn the call back over to our operator, Carmen, to begin the Q&A session.

[Operator Instructions] Our first question is from Ken Hoexter with Bank of America.

So just, I guess, thinking about the land disappointment here. I know you've worked on shedding out some assets. Are there more assets that you can look to get rid of? How much more room do you have? And what specific areas would you focus on? It sounded like when you wrap-up comments, you kind of talked about repeatable, ratable business. And maybe just delve into that a little bit.

Look, there are parts of that business that remains that are still ratable, meaning easily -- easy to forecast, easier to explain expected performance to someone like yourself and other members of the investment community. There are other pieces of the business that are not as simple. U.K. was an example where it was heavily dependent on weather. And if it didn't get cold in the winter, the pop that you would hope for in the fourth and first quarter didn't happen. So we're not in that business anymore, and we already told the story about Brazil. So I won't get into any specifics, but there are clearly additional parts of the business that we're seriously looking at to either find ways to better optimize -- better optimize assets that support parts of the business that require, for example, many trucks on the road or there may be activities that simply don't make sense anymore. And we'll -- when we get to that point and make that decision, we'll certainly let you know. But there's certainly more to be done, and that's an area we're spending a tremendous amount of time as we realize that we haven't had a lot to brag about in terms of the numbers that we shared in land, but we think we have many, many opportunities to begin improving that more and more as we continue down this path of analyzing every piece of the business and figuring out what the right answer for the future is. I think Mike may have something to add.

Yes, Ken, just to give a little bit of color, I agree 100% with Ira's comments. But certain trade activities, certain wholesale activities, some smaller subscale activities with some of the acquisitions, good businesses. But again, can you scale them? Can you get operating leverage on them? Some of the heavy logistics activities that I made reference to, really looking at digging into all of those pieces of the puzzle to understand the real true return allocations and digging deeper into those. And again, having fewer where we can get the focus, reduce overall cost in terms of shared services and the like. So really trying to get a hyper-focused business there on the areas that we really see are sizable or are clearly growing. So again, really trying to reduce and sharpen the portfolio. So some of those activities that for a while, we were fine, but realizing that if we're not going to be able to supersize them, it's go bigger, go home and just taking a closer look at all of those smaller activities. So I don't think there's anything large, but really, again, trying to sharpen the focus.

Let me ask one follow-up, but with 3 parts, right? If you can hit on each of the businesses and land, marine, aviation and talk about kind of how we should think about third quarter. You talked about aviation profit being up by government activity. What's driving the government activity in marine, you talked about product being down in third quarter gross profit. Is that just shipping coming back, container shipping? What's the key dynamic? And then same for land?

So if we look at it just walking across all 3 of them, aviation, we've got, I think, the preeminent independent aviation fuel services platform in the world. That's taken 4 decades to build. And we've got a phenomenal fuel and services platform, and we've made all of the right moves there. So we go from strength to strength there. And the government activity is largely aviation denominated. So our global platform is a great way for us to basically expand and flex into areas where you've got both commercial, governmental and our business aviation platform, our services, our trip support activity. All of these have taken a lifetime to basically put together, not easy to do, not easy to get into these locations, and we've got all of that. With some of the acquisitions that you've seen over the years, they've dovetailed very nicely. John Rao and the team have done a phenomenal job in terms of developing that aviation -- global aviation fuel and services platform. And the services part of it is critical. So -- and a large part of the government activity historically and currently is aviation dominated. There is a good amount of land activity and marine activity. So they worked out quite well. Our marine business, it's a spot business. The team has done a phenomenal job in terms of creating efficiency in that market. We've got a good physical capability there. So that business, we like. And then land, we've focused it on the U.S. and is looking at the core activities of the large diesel gasoline markets and really just trying to trim that to the areas that we're really going to lay our claim to. And then Ira and the rest of the team in terms of corporate and looking at some of the efficiencies of the back office, that, I think, is extremely encouraging and something that is permanent annuity in terms of dealing with some of those efficiencies in back office, and you've seen our ability to manage OpEx. So those are the things that we're focused on. We've got, I think, the preeminent global network in terms of energy services for marine and aviation. The land piece, we've shrunk to focus. The U.S. market is still the largest market in the world. We've added some additional talent there. So we feel good. It's been a long haul, obviously, but -- and you're seeing the returns come back to shareholders and the focus on that. But Aviation, very strong global platform. Marine, solid business, really focused on optimization and land really trying to get a much narrower focus on that.

So Mike nailed that, but I just want to add one comment about land because your original question was about the moves sequentially or the guidance that we gave at least year-over-year. So 2 stories for land. I said clearly that land would be down in the third quarter. From a gross profit perspective, that's true. Most of that relates to the fact that we've exited Brazil, the U.K. and then some activities in the U.S. Those businesses weren't very profitable. Actually, some of them were losing money. We don't normally give guidance on the operating results of the segment, we're talking about GP. But while gross profit will be down for those reasons, the operating income coming out of land should be pretty consistent with last year. Similar to my message on our consolidated gross profit earlier being down year-over-year, but operating income being up 11%, right? So we're seeing a drop in GP as we've exited a lot of activities. The more important number to focus on is where the operating profit is going. And of course, that's the number we're trying to drive in the right direction as much as we can.

And then the last comment I'll make, Ken, on the land piece, natural gas, power, sustainability. Our natural gas business is a nice business in the U.S. That's been a good producer for us. The power business, listen, power, we all know the electrification of the economy. That's going to continue to grow at 50% or more. Our participation model is the name of the game, and that's something that we're understanding the geography is important because these markets do behave differently in different areas. We've got the benefit of a global platform. So some work to be done there. But obviously, the dynamic between the molecule and the electron is extremely important. You need to -- for renewables, you've got to have some amount of power, and there's a dynamic there. And then sustainability -- and when I say power, that's solar. It could be looking at balancing for power providers and power users. And again, it's our advisory, our brokerage, our merchant and our services and some for digital. And then sustainability within carbon, -- that is something that has been highly politicized, but it's not going away. I mean there is going to be a continuing market for that. People -- you've got mandates that are coming through regardless of what certain countries are doing or certain parts of the world. States have got different activities. It's complicated the carbon accounting. So the operational integration that we're providing for our clients is another part of the service. We're a solutions provider. and selectively working that energy provisioning of energy for those customers whose core competency is moving goods or moving people or manufacturing. And the energy side is a significant percentage of their operating cost. It's not their core competency. It's complicated. That's continuing to be the value that we provide to both buyers and sellers, and it's really sharpening our participation model. So I feel pretty good about where we are. And any case, hopefully, that gives you a little bit of color.

[Operator Instructions] Our next question is from Justin Jenkins with Raymond James.

Ira, I wanted to go back to where you maybe ended your prepared comments, thinking about the investment cycle or the opportunity set in front of you here. Can you unpack that maybe just a little bit more what you're thinking of from an investment standpoint? Is that on the organic side? Is it M&A? Is it JVs, all of the above? Just any more color there would be helpful.

Not necessarily a JV, although you never rule that out. But no, it's obviously investing in the businesses that are businesses we feel have solid performance and solid opportunities longer term that we are generically referring to as the core. And we've already talked about shedding some of the things that don't necessarily have those characteristics. And then from an inorganic standpoint, it's finding investment opportunities that fit into those buckets that could accelerate growth, maybe fill in a market where we may not have the same density we have in other markets as an example. That could be aviation, land, theoretically marine, but mostly, I would say, aviation and land at the moment. And valuations have gotten a bit better from the craziness that we've seen in the recent past. Interest rates are starting to come down. So we did take a bit of a breather as we've been focusing a lot internally on some of the things that we talked about today. But as things are moving in the right direction, there seem to be more opportunities. So we're sinking our teeth into those, and I'm confident that we'll find some leverageable opportunities in those segments over the next few quarters.

Perfect. That's helpful. Second one for me is just a housekeeping one on the Marine segment itself. Without that tax settlement that you talked about in 2Q, would you have otherwise been within your guidance on gross profit dollars?

Yes. Yes, we would have been right in the middle of guidance without that item. It's a good question.

And this concludes our Q&A session for today. I will turn the call back to Michael Kasbar with his final remarks.

Well, first and foremost, I want to thank our fantastic global team. We're only here because of what our great World Kinect team does every day to keep the wheels of commerce, energy and transportation moving. So thank you to all of you and to our shareholders, thanks and look forward to chatting to you next quarter. Take care. Stay safe, stay well. Bye-bye now.