World Kinect Corp (WKC) 2024 Q2 法說會逐字稿

Thank you for standing by, and welcome to World Kinect Corporation's second-quarter 2024 earnings conference call. (Operator Instructions)

感謝您的耐心等待，並歡迎參加 World Kinect Corporation 的 2024 年第二季財報電話會議。（操作員說明）

I would now like to hand the call over to Elsa Ballard, VP, Investor Relations and Communications. Please go ahead.

我現在想將電話轉交給投資者關係與傳播副總裁艾爾莎·巴拉德 (Elsa Ballard)。請繼續。

Good evening, everyone. And welcome to World Kinect's second-quarter 2024 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.

大家晚上好。歡迎參加 World Kinect 2024 年第二季財報電話會議，該電話會議將與我們的現場投影片簡報一起進行。今天的演示也可以透過我們的投資者關係網站上的網路廣播觀看。

I'm Elsa Ballard, VP of Investor Relations and Communications. With me on the call today is Michael Kasbar, our Chairman and Chief Executive Officer; and Ira Birns, our EVP and Chief Financial Officer.

我是艾爾莎‧巴拉德 (Elsa Ballard)，投資者關係與傳播副總裁。今天與我一起參加電話會議的是我們的董事長兼執行長 Michael Kasbar；以及我們的執行副總裁兼財務長 Ira Birns。

Before we get started, 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.

在我們開始之前，我想回顧一下我們的安全港聲明。今天發表的某些聲明，包括我們對未來計劃和業績的預期的評論，均為前瞻性聲明，受到一系列不確定性和風險的影響，可能導致實際結果出現重大差異。可能導致結果出現重大差異的因素可以在我們向美國證券交易委員會提交的最新 10-K 表格和其他報告中找到。我們不承擔根據新資訊或未來事件修改或公開發布這些前瞻性陳述的任何修改結果的義務。

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.

本簡報也包括某些非公認會計準則財務指標。這些非公認會計原則財務指標與其最直接可比較的公認會計原則財務指標的調節表包含在我們的新聞稿中，也可以在我們的網站上找到。

We will begin with several moments of prepared remarks, which will then be followed by a Q&A period. I would now like to introduce our Chairman and Chief Executive Officer, Michael Kasbar.

我們將從一些準備好的演講開始，然後是問答時間。現在我想介紹我們的董事長兼執行長邁克爾·卡斯巴爾。

Thank you, Elsa. And good evening, everyone.

謝謝你，艾莎。大家晚上好。

While we faced challenging market conditions in our land business this quarter, we remained focused on increasing our percentage of core recurring revenue activities and driving improved operating efficiency to deliver our medium-term targets, which we shared with you at our recent Investor Day. As I've highlighted over the prior few quarters, our management team's focus is on building a more ratable and leverageable business model across all of our businesses. Aviation is a great example of this.

儘管本季我們的土地業務面臨著充滿挑戰的市場狀況，但我們仍然專注於提高核心經常性收入活動的百分比，並提高營運效率，以實現我們的中期目標，我們在最近的投資者日與您分享了這些目標。正如我在前幾個季度所強調的那樣，我們的管理團隊的重點是在我們所有的業務中建立一個更具評級和槓桿作用的商業模式。航空業就是一個很好的例子。

Our aviation business continued to deliver strong performance and has excellent momentum heading into the second half of the year. Our optimized scale platform provides consistently high operating margins, and we continue to demonstrate our value to customers around the world in both business and commercial aviation. Aviation generated a very strong operating margin in the second quarter and continues to be a model of efficiency.

我們的航空業務持續表現強勁，下半年勢頭良好。我們優化的規模平台提供了持續的高營運利潤，並且我們繼續向世界各地的公務和商業航空客戶展示我們的價值。航空業在第二季產生了非常強勁的營業利潤，並且仍然是效率的典範。

Advancing our objective of sharpening the portfolio, the strategic divestiture of the Avinode business within the quarter further enhanced our liquidity and created economic value well beyond what we were able to achieve by retaining the business in our portfolio. This was followed by a tuck-in acquisition in business aviation that we signed today. This transaction will expand our bulk fuel distribution network by adding nearly 300 customers, including 100 FBO locations.

為了推進我們強化投資組合的目標，本季對 Avinode 業務的策略剝離進一步增強了我們的流動性，創造的經濟價值遠遠超出了我們透過將業務保留在投資組合中所能實現的水平。隨後，我們今天簽署了一項公務航空收購。此次交易將增加近 300 個客戶（包括 100 個 FBO 地點），從而擴大我們的散裝燃料分銷網絡。

Our market-leading business aviation distribution platform will be able to bring additional supply and solution capabilities to these locations as well as outstanding customer service and comprehensive operational support. While not initially a significant earnings contributor, this acquisition is an example of the type of synergistic and strategically complementary deals we will continue to seek.

我們市場領先的公務航空分銷平台將能夠為這些地點帶來額外的供應和解決方案能力以及出色的客戶服務和全面的營運支援。雖然這次收購最初並不是一個重要的獲利貢獻者，但它是我們將繼續尋求的協同和策略互補交易類型的一個例子。

While not at the ratability of aviation and while results were down year-over-year, our marine platform remains highly efficient and working capital light. Because marine is more of a spot business, it can deliver outsized results when market conditions are favorable, but creates value even in less beneficial environments. It is a consistent cash generator with minimal capital requirements and significant potential upside. We continue to appreciate the diversification and return profile of this business.

雖然不符合航空業的評級，而且業績年減，但我們的海運平台仍然高效且營運資金充足。由於海運更多的是現貨業務，因此當市場條件有利時，它可以帶來巨大的成果，但即使在不太有利的環境下也能創造價值。它是一個穩定的現金產生器，資本要求最低，具有巨大的潛在上升空間。我們繼續欣賞該業務的多元化和回報狀況。

Land is clearly where we are highly focused on building similar efficiencies. Unfortunately, in the second quarter, we experienced an unusual situation in which a number of our market forces negatively impacted several parts of the land business. Ira will cover this in more detail in his comments. We are actively working to grow in scale those parts of the land business that we believe are more ratable, have a better return, are less susceptible to market conditions, and provide the best platform for increased operating leverage.

土地顯然是我們高度關注建立類似效率的地方。不幸的是，在第二季度，我們經歷了一種不尋常的情況，我們的一些市場力量對土地業務的幾個部分產生了負面影響。艾拉將在他的評論中更詳細地介紹這一點。我們正在積極努力擴大土地業務中那些我們認為更值得評估、回報更好、不易受市場條件影響的部分，並為提高營運槓桿提供最佳平台。

Last week, I participated in a two-day management offsite with 50 of our key leaders. We focused exclusively on accelerating the transformation of our core US land business. There is little doubt in my mind that we have assembled and organized the best team we've ever had with a clear focus on flexing the capabilities we have across the company and a sense of urgency to install the processes and tools necessary for growth and operating leverage.

上週，我與 50 位主要領導者一起參加了為期兩天的異地管理活動。我們專注於加速美國核心土地業務的轉型。在我看來，毫無疑問，我們已經組建和組織了有史以來最好的團隊，明確專注於展示我們在整個公司擁有的能力，並具有安裝增長和運營所需的流程和工具的緊迫感槓桿作用。

Before I return the call to Ira, I want to stress that we believe that improvements in our land business remains a critical element of meeting our medium-term financial targets. The land result this quarter was clearly a disappointment, but in no way alters our commitment to attain our Investor Day objectives or impacting the confidence in our ability to achieve these objectives. If anything, the result underscores the need to move more quickly.

在回電給愛爾蘭共和軍之前，我想強調，我們相信，土地業務的改善仍然是實現我們中期財務目標的關鍵因素。本季的土地結果顯然令人失望，但絕不會改變我們實現投資者日目標的承諾，也不會影響我們實現這些目標的能力的信心。如果有什麼不同的話，那就是結果強調了加快行動的必要性。

To reiterate, we are committed to consolidating our offers and reallocating capital to improve operating leverage. This is our number one management priority, and we will be updating progress towards this objective quarterly.

重申一下，我們致力於整合我們的產品和重新分配資本，以提高營運槓桿。這是我們的首要管理重點，我們將每季更新實現這一目標的進度。

Now, I'd like to thank our fantastic global team for their consistent dedication to our business. Your passion for what we do shows and in an uncertain world, our customers, suppliers, and partners know that they can rely on us as they have for the nearly 40 years.

現在，我要感謝我們出色的全球團隊對我們業務的一貫奉獻。您對我們工作的熱情表明，在一個不確定的世界中，我們的客戶、供應商和合作夥伴知道他們可以像近 40 年來一樣信賴我們。

Thanks for listening. And now, Ira will give a financial and detailed business update.

感謝您的聆聽。現在，艾拉將提供財務和詳細的業務更新。

Thank you, Michael. And good evening, everyone.

謝謝你，麥可。大家晚上好。

Before I begin, please note that our second quarter non-GAAP results reflect approximately $88 million of pretax adjustments. This is primarily due to a $96 million pretax gain on the sale of Avinode, which was completed in early May, offset in part by certain restructuring costs and a single investment-related impairment. The after-tax gain on the Avinode sale was approximately $87 million, contributing $1.45 to GAAP diluted earnings per share for the quarter. Congratulations again to our team for successfully completing this transaction during the second quarter. Reconciliations of our non-GAAP measures are available on our Investor Relations website as well as today's webcast presentation.

在開始之前，請注意，我們第二季的非 GAAP 業績反映了約 8,800 萬美元的稅前調整。這主要是由於 5 月初完成的 Avinode 出售獲得了 9,600 萬美元的稅前收益，部分被某些重組成本和單一投資相關減損所抵銷。Avinode 出售的稅後收益約為 8,700 萬美元，為本季 GAAP 攤薄每股收益貢獻 1.45 美元。再次恭喜我們的團隊在第二季度成功完成了這筆交易。我們的非公認會計原則措施的調節可在我們的投資者關係網站以及今天的網路廣播演示中找到。

So now getting into the second quarter details. Consolidated results were clearly impacted by weaker-than-expected performance in our land segment, which was offset in part by solid results in aviation. Despite the underperformance in land, our expenses again declined year-over-year, our tax rate was lower than anticipated, and we generated strong cash flow, which contributed to a further reduction in interest expense. I'll now provide more color on the second quarter segment-by-segment results.

現在進入第二季的細節。陸路部門的業績低於預期顯然對合併業績產生了影響，但航空業務的穩健業績在一定程度上抵消了這一影響。儘管土地表現不佳，但我們的費用比去年同期再次下降，稅率低於預期，現金流強勁，利息支出進一步減少。我現在將提供有關第二季度逐個部門業績的更多資訊。

Starting with aviation, where as a reminder, results were modestly impacted by the Avinode sale, which we completed on May 1. Aviation volume was down slightly year-over-year. This was principally related to a reduction in low-margin activity over the past 12 months, including a 100 million gallon per quarter reduction in bulk activity that we discussed last quarter, offset by volume growth in much of our core aviation activities. Our efforts to improve returns in aviation contributed to a near record 53% operating margin for the quarter. Aviation gross profit was generally flat year-over-year with the benefit for margin improvements, generally offset by the impact of the Avinode sale. Just to note, since Avinode was a service business with no underlying volume, the divestiture will impact unit margins in aviation by approximately $0.005 per gallon going forward.

首先是航空業，提醒一下，我們在 5 月 1 日完成的 Avinode 銷售對業績產生了輕微影響。航空運輸量較去年同期略有下降。這主要與過去 12 個月低利潤活動的減少有關，包括我們上季度討論的散裝活動每季減少 1 億加侖，但被我們大部分核心航空活動的銷售成長所抵消。我們為提高航空業回報所做的努力使得本季營業利潤率達到了接近創紀錄的 53%。航空毛利與去年同期相比基本持平，利潤率提高帶來的好處，通常被 Avinode 出售的影響所抵消。需要注意的是，由於 Avinode 是一家沒有基礎銷售的服務企業，此次剝離將影響航空業的單位利潤率，未來每加侖約 0.005 美元。

As we look to the third quarter, if we exclude the impact of the Avinode sale, gross profit should be up meaningfully year-over-year, reflecting improved operating leverage from our growing global supply network. One of the numerous examples of year-over-year growth would be an expected incremental contribution from the Paris Olympics as we added Paris-Vatry Airport to our network earlier this year.

展望第三季度，如果排除 Avinode 出售的影響，毛利應同比大幅增長，反映出我們不斷增長的全球供應網絡帶來的營運槓桿的改善。眾多逐年增長的例子之一是巴黎奧運會的預期增量貢獻，因為我們今年早些時候將巴黎瓦特里機場添加到了我們的網絡中。

And looking towards the fourth quarter, we expect the aviation tuck-in transaction that Mike discussed earlier to be a strong strategic fit for our business aviation segment. While not a significant earnings contributor day one, this transaction will be modestly accretive and we expect it to close in the fall subject to customary closing conditions.

展望第四季度，我們預計麥克先前討論的航空整合交易將非常適合我們的公務航空部門。雖然這項交易在第一天並不是一個重要的獲利貢獻者，但它將帶來適度的增值，我們預計它將在符合慣例成交條件的情況下於秋季完成。

In our land business, while commercial and industrial retail and nat gas volumes actually increased year-over-year, overall volumes decreased slightly, principally driven by unfavorable market conditions in our North American wholesale activities. The percentage of land volume associated with our nat gas and power business was 33% in the second quarter, down from 41% in Q1 and modestly up from 31% in the second quarter of last year.

在我們的土地業務中，雖然商業和工業零售以及天然氣銷售實際上同比增長，但總體銷量略有下降，這主要是由於我們北美批發活動的不利市場條件所致。第二季與天然氣和電力業務相關的土地體積百分比為 33%，低於第一季的 41%，略高於去年第二季的 31%。

While volumes were generally flat, land second quarter was quite weak from a margin perspective, resulting in a 28% year-over-year decline in gross profit. The principal drivers of this decline were unfavorable supply dynamics in the renewable fuels market, principally on the West Coast, an oversupplied natural gas market, where inventories were 20% above the previous five-year average at the end of June, driving near record low prices and virtually no market volatility during the quarter and even Brazil, where exponential growth in cargo imports, which started impacting us in the first quarter has further driven down local market prices, resulting in further pressure on margins. And finally, while up sequentially, gross profit from our core sustainability-related offerings declined year-over-year, we are seeing growing opportunities for the second half of the year and beyond in many parts of this exciting business throughout the world. One example for the second half relates to renewable credits, where demand generally strengthens in the latter part of the year when customers firm up their carbon requirements before closing out their fiscal years.

雖然成交量整體持平，但從利潤率角度來看，第二季土地交易相當疲軟，導致毛利年減 28%。造成這種下降的主要驅動因素是再生燃料市場的不利供應動態，主要是在西海岸，天然氣市場供應過剩，6月底庫存比前五年平均水平高出20%，接近歷史低點本季幾乎沒有市場波動，甚至巴西的貨物進口指數成長（從第一季開始影響我們）進一步壓低了當地市場價格，導致利潤率進一步受到壓力。最後，雖然我們與永續發展相關的核心產品的毛利連續上升，但我們看到今年下半年及以後在全球這一令人興奮的業務的許多地方都有越來越多的機會。下半年的一個例子與再生能源信貸有關，當客戶在財政年度結束之前確定其碳需求時，需求通常會在下半年增強。

In summary, land's second quarter was clearly a bump in the road. We had made it clear that the work necessary to achieve our medium-term targets for land specifically would not be a straight upward arrow. So while we certainly aren't pleased with the second quarter outcome, we are confident in our ability to achieve these targets, and we remain very much committed to doing so.

總而言之，土地的第二季顯然是個坎坷。我們已經明確表示，實現中期土地目標所需的工作不會是直線上升的箭頭。因此，雖然我們對第二季的結果當然不滿意，但我們對實現這些目標的能力充滿信心，而且我們仍然非常致力於這樣做。

What are we doing here? Well, we remain focused on continuing to sharpen our portfolio of activities in land and significantly improving operating efficiencies. With the continued goal to migrate more and more of the business to higher margin, higher return, more leverageable and ratable activities, such as our cardlock and retail distribution networks. We also have the ability to utilize our strong liquidity position to capitalize on a growing pipeline of synergistic investment opportunities in these areas of our business, which should enable us to accelerate profitable growth and returns in the land business over time.

我們在這裡做什麼？嗯，我們仍然專注於繼續強化我們的土地活動組合併顯著提高營運效率。我們的持續目標是將越來越多的業務遷移到利潤率更高、回報更高、槓桿率更高、評級更高的活動，例如我們的卡鎖和零售分銷網絡。我們還有能力利用我們強大的流動性狀況，利用我們這些業務領域不斷增長的協同投資機會，這將使我們能夠隨著時間的推移加速土地業務的盈利增長和回報。

In the short term, while we are currently seeing a reversal of some of the unfavorable trends that impacted the second quarter, which should result in overall sequential improvement in land, third-quarter gross profit is still expected to be down when compared to an extremely strong third quarter in 2023. However, we should return to year-over-year gross profit growth in the fourth quarter while remaining focused on driving greater opportunities for growth and increasing returns in '25 and beyond.

短期來看，雖然我們目前看到影響第二季的一些不利趨勢出現逆轉，這應該會導致土地整體較上季改善，但與極端情況相比，第三季毛利預計仍將下降。季度表現強勁。然而，我們應該在第四季度恢復毛利年增，同時繼續專注於在 25 年及以後推動更大的成長機會和增加回報。

Moving on to marine. While volumes were essentially flat year-over-year, gross profit decreased about 13% driven principally by lower market volatility than experienced in the prior year period. While we anticipated a sequential margin decline heading into the second quarter, the actual decline was a bit more than it had been anticipated. As Mike mentioned earlier, while marine profitability is down from the highs of 2022, it remains an extremely efficient capital model and allows for strong returns and contributions to cash flow each quarter. As we look to the third quarter, we expect marine gross profit to be effectively flat when compared to the third quarter of 2023 as year-over-year volatility comparisons finally seem to be normalizing.

轉向海洋。雖然銷量與去年同期基本持平，但毛利下降了約 13%，這主要是由於市場波動性低於去年同期。雖然我們預期第二季利潤率將連續下降，但實際下降幅度略高於預期。正如麥克之前提到的，雖然海運盈利能力較2022 年的高點有所下降，但它仍然是一種極其高效的資本模式，並且每個季度都能帶來強勁的回報和對現金流的貢獻。展望第三季度，我們預期海運毛利與 2023 年第三季相比將基本持平，因為年比波動性比較似乎最終趨於正常化。

To help better frame our comments, unexpected year-over-year gross profit performance segment-by-segment we have decided to begin providing color on consolidated gross profit for the third quarter and going forward. With the backdrop of the related segment gross profit comments I've just shared, we expect consolidated gross profit to be in the range of $265 million to $274 million in the third quarter. Hopefully, this will be helpful for modeling purposes going forward.

為了幫助更好地表達我們的評論，我們決定開始提供第三季及未來綜合毛利的顏色。在我剛剛分享的相關部門毛利評論的背景下，我們預計第三季的綜合毛利將在2.65億美元至2.74億美元之間。希望這對未來的建模目的有所幫助。

Now, let's go to consolidated operating expenses. That was $192 million in the second quarter, down 7% from the second quarter of 2023 and below our guidance range provided last quarter. Second-quarter expenses were lower than anticipated, principally by reduced variable compensation but also lower G&A expenses, serving as evidence of our ongoing efforts to carefully manage all cost categories and across the entire business. The elimination of Avinode-related expenses was already reflected in the expense guidance we provided last quarter, so the Avinode sale did not contribute to our expenses being lower than forecasted for the second quarter.

現在，我們來看看綜合營運費用。第二季為 1.92 億美元，比 2023 年第二季下降 7%，低於我們上季提供的指導範圍。第二季費用低於預期，主要是由於可變薪酬減少，而且一般管理費用也減少，這證明我們正在努力認真管理整個業務的所有成本類別。與 Avinode 相關的費用的消除已經反映在我們上個季度提供的費用指引中，因此 Avinode 的出售並沒有導致我們的費用低於第二季的預測。

For the third quarter, we are expecting adjusted operating expenses to be in the range of $193 million to $197 million, another year-over-year reduction, in this case, benefiting in part from the elimination of Avinode expenses. We remain focused on our medium-term consolidated operating margin target. We discussed efforts in our land business earlier, but we also focused on driving cost efficiencies across the business, including our corporate back office functions. There were numerous ongoing initiatives aimed at further improving our cost structure.

對於第三季度，我們預計調整後的營運費用將在 1.93 億美元至 1.97 億美元之間，再次同比減少，在這種情況下，部分受益於 Avinode 費用的消除。我們仍專注於中期綜合營業利潤率目標。我們之前討論了我們在土地業務方面的努力，但我們也專注於提高整個業務的成本效率，包括我們的公司後台職能。有許多正在進行的措施旨在進一步改善我們的成本結構。

Interest expense was $27 million in the second quarter. That's down about 15% year-over-year as our team remains focused on optimizing our working capital position and related cash flow with additional benefit from last year's low coupon convertible notes issuance and the cash proceeds from the sale of Avinode this past quarter. As we've demonstrated over the past few quarters, we've been successful at reducing our quarterly run rate of interest expense by 25% from the peak level reached in the fourth quarter of 2022, and we expect another year-over-year decline in interest expense in the third quarter to $26 million to $27 million, with our full year '24 interest expense on track to come in 10% to 15% below fiscal year '23.

第二季利息支出為 2,700 萬美元。年減約 15%，因為我們的團隊仍然專注於優化我們的營運資金狀況和相關現金流，並從去年的低息可轉換票據發行和上個季度出售 Avinode 的現金收益中獲得額外收益。正如我們在過去幾個季度所證明的那樣，我們已成功地將季度利息費用運行率從 2022 年第四季度達到的峰值水平降低了 25%，並且我們預計將再次同比下降第三季度的利息支出達2,600 萬至2,700 萬美元，24 年全年利息支出預計將比23 財年減少10% 至15%。

Our adjusted effective tax rate for the second quarter was only 6% as our effective tax rate was positively impacted by a discrete tax benefit realized in the second quarter, resulting in an effective tax rate significantly lower than anticipated heading into the quarter. Based on what we know today, we expect our effective tax rate for the second half of the year to be down to approximately 19% to 22%, resulting in a forecasted full year rate of 15% to 18%.

我們第二季調整後的有效稅率僅為 6%，因為我們的有效稅率受到第二季實現的離散稅收優惠的正面影響，導致有效稅率顯著低於進入本季的預期。根據我們今天所知，我們預計下半年的有效稅率將降至約 19% 至 22%，從而預測全年稅率為 15% 至 18%。

We generated $68 million of operating cash flow and $53 million of free cash flow in the second quarter. This cash flow performance was positively impacted by our continuing efforts to drive efficiencies in our working capital model, resulting in a net trade cycle at just over two days for the second quarter. And our strong cash flow performance also enabled us to reduce our net debt to $355 million and our net-debt-to-adjusted EBITDA to below 1 time.

第二季我們產生了 6,800 萬美元的營運現金流和 5,300 萬美元的自由現金流。我們持續努力提高營運資本模型的效率，對現金流表現產生了正面影響，導致第二季的淨交易週期僅為兩天多一點。我們強勁的現金流表現也使我們能夠將淨債務減少至 3.55 億美元，並將淨債務與調整後 EBITDA 比率減少至 1 倍以下。

Returning capital through share buybacks and dividends, as always, remains an important part of our balanced capital allocation framework, and there are no changes to our priorities going forward. To underscore that commitment, in addition to our quarterly cash dividend, we repurchased $30 million of stock or approximately 1.2 million shares during the second quarter.

一如既往，透過股票回購和股息返還資本仍然是我們平衡資本配置框架的重要組成部分，我們未來的優先事項沒有變化。為了強調這項承諾，除了季度現金股利外，我們還在第二季回購了 3,000 萬美元的股票，約 120 萬股。

So in closing, yes, our land segment had a weak quarter due to a confluence of factors, which negatively impacted an unusually large number of business activities within a single quarter. And as already stated, while this was an unfortunate bump in the road, we remain focused on improving land operating efficiencies and profitability going forward, both by continuing to sharpen the portfolio of activities in which we participate, while significantly improving our cost structure is something we're focused on each and every day.

因此，最後，是的，由於多種因素的綜合作用，我們的土地部門出現了疲軟的季度，這對單一季度內異常大量的業務活動產生了負面影響。正如已經說過的，雖然這是一個不幸的坎坷，但我們仍然專注於提高未來的土地運營效率和盈利能力，透過繼續強化我們參與的活動組合，同時顯著改善我們的成本結構。每一天。

Our aviation business performed well as our team continues to deliver on our strong value proposition globally, and we see strong momentum heading into the second half of the year. We generated $68 million in operating cash flow and $53 million of free cash flow in the second quarter, plus approximately $200 million from the Avinode sale, further strengthening our liquidity profile.

我們的航空業務表現良好，我們的團隊繼續在全球範圍內實現我們強大的價值主張，我們看到下半年將出現強勁的勢頭。第二季我們產生了 6,800 萬美元的營運現金流和 5,300 萬美元的自由現金流，加上 Avinode 出售帶來的約 2 億美元，進一步增強了我們的流動性狀況。

Interest expense, again, continued to decline from peak levels of interest in late '22. And we were once again able to reduce operating expenses year-over-year by remaining laser-focused on cost controls. We repurchased approximately 2% of our outstanding shares, demonstrating our continued commitment to returning value to our shareholders. And finally, we remain focused on driving our EBITDA and operating margin towards our 2026 stated goals, which should deliver increasing levels of cash flow and an improvement in our overall return on capital.

利息支出再次從 22 年末的利息高峰水準繼續下降。透過持續專注於成本控制，我們再次能夠逐年減少營運費用。我們回購了約 2% 的已發行股票，這表明我們持續致力於為股東回報價值。最後，我們仍然專注於推動 EBITDA 和營業利潤率實現 2026 年既定目標，這應該會帶來現金流水準的提高和整體資本回報率的提高。

Nothing has changed there. We remain equally committed to achieving those goals. There's lots of work to be done, but our team remains relentlessly focused on driving towards these critical goals over the next several months and quarters to come.

那裡什麼都沒有改變。我們仍然同樣致力於實現這些目標。還有很多工作要做，但我們的團隊將在未來幾個月和幾季堅持不懈地致力於實現這些關鍵目標。

Thank you. I'll now turn the call back to our operator to open up the Q&A session.

謝謝。現在我將把電話轉回給我們的接線生以開始問答環節。

(Operator Instructions) John Royall, JPMorgan.

（操作員指令）John Royall，摩根大通。

Hi. Good evening. Thanks for taking my question. So my first question is on land. Can you talk a little more about the headwinds in renewable fuels on the West Coast that Ira spoke about for 2Q? And then what you're seeing in terms of the recovery there into the third quarter?

你好。晚安.感謝您提出我的問題。所以我的第一個問題是關於陸地的。您能多談談 Ira 在第二季度談到的西海岸再生燃料的逆風嗎？那麼您認為第三季的復甦情況如何？

Yeah. Thanks for the question, John. To try to answer it in a simplest way possible, there have been -- what I would best describe as logistics-related issues, which have both impacted our ability to push through volume on the West Coast and push it through as economically as we would like to.

是的。謝謝你的提問，約翰。為了嘗試以最簡單的方式回答這個問題，我最好將其描述為與物流相關的問題，這些問題既影響了我們在西海岸推動貨運量的能力，又影響了我們以經濟方式推動貨運量的能力。

What does that mean? There have been -- pipeline terminals have effectively been slow to convert to renewable diesel. So in many parts of the region, we're forced to move more product through rail and truck, and that's not as cost efficient. So that impacted us from a volume perspective and a bit from a margin perspective as well.

這意味著什麼？管道終端在轉換為再生柴油方面實際上進展緩慢。因此，在該地區的許多地方，我們被迫透過鐵路和卡車運輸更多的產品，這並不具有成本效益。因此，這從銷售角度和利潤角度都對我們產生了影響。

What does that mean going forward? There are discussions and activities going on each and every day, which hopefully will enable us to create more efficiencies in that network, but it's probably going to take a couple of months or so before we see any significant change there. But there are opportunities for that to improve. There's some new refineries that have come online that have impacted the market.

這意味著什麼？每天都會進行討論和活動，希望這將使我們能夠提高該網路的效率，但可能需要幾個月左右的時間才能看到任何重大變化。但這種情況還有改進的機會。一些新煉油廠的上線對市場產生了影響。

So there's a bunch of factors that when put all together had a meaningful enough impact on us for us to mention that as a factor in the second quarter.

因此，有許多因素綜合起來對我們產生了足夠有意義的影響，我們可以在第二季將其作為一個因素提及。

That's really helpful. Thanks. And then my follow-up is just a housekeeping question as I don't think we have the 10-Q yet. Can you talk about what's been received in cash on the Avinode sale and when the tax bill will be paid if it hasn't already? And should we think about the tax portion as just the $87 million gain times tax rate?

這真的很有幫助。謝謝。然後我的後續行動只是一個內務問題，因為我認為我們還沒有 10-Q。您能否談談 Avinode 銷售中收到的現金以及稅單何時支付（如果尚未支付）？我們是否應該將稅收部分視為 8700 萬美元收益乘以稅率？

Actually, the tax on that transaction is for all sorts of reasons, it's a relatively small number. So for starters, almost exactly $200 million is what came in, in May, you'll see that on the cash flow statement. And the related tax that would go out the door, I would say most likely in Q3 is only about $9 million.

事實上，由於種種原因，這筆交易的稅收是一個相對較小的數字。首先，5 月的收入幾乎剛好是 2 億美元，您會在現金流量表上看到這個數字。我認為第三季最有可能徵收的相關稅款僅為 900 萬美元左右。

Great. Thanks very much.

偉大的。非常感謝。

So net-net, it has a positive after-tax benefit from a cash perspective of about $190 million.

因此，從現金角度來看，它的稅後淨收益約為 1.9 億美元。

Great. Thank you.

偉大的。謝謝。

You're welcome.

不客氣。

Ben Nolan, Stifel.

本諾蘭，史蒂菲爾。

Thanks. A couple. First, just quickly, you talk about the tuck-in acquisition on the aviation side. Any context on how the capital outlay for that?

謝謝。一對。首先，請快速談談航空方面的收購。有關於如何進行資本支出的背景資訊嗎？

Thanks for the question. The capital outlay for that, is that the question?

謝謝你的提問。資本支出是這個問題嗎？

Yes. Right.

是的。正確的。

Yes, it's about -- total purchase price was around $45 million, of which several million dollars is deferred for a period of time. So it's somewhere around $40 million that will go out the door when we closed that transaction somewhere around the end of the third quarter.

是的，總購買價格約為 4500 萬美元，其中數百萬美元被推遲一段時間。因此，當我們在第三季末左右完成交易時，大約有 4000 萬美元將被支出。

Okay. Perfect. And I was going to also dig in a little bit on the land side. It did seem like some of these factors should have been -- we should have seen them in the first quarter as well. I'm curious whether that's the West Coast fuels or Brazil or any of the handful of things that you laid out there. I'm curious what changed from sort of how you were thinking about the business when you last reported and as compared to how it played out over the quarter? And maybe how it was in the first quarter versus how it was in the second quarter?

好的。完美的。我還打算在陸地一側挖一點。其中一些因素似乎確實應該是——我們也應該在第一季看到它們。我很好奇這是否是西海岸燃料或巴西或您在那裡列出的少數東西中的任何一個。我很好奇，您上次報告時對業務的看法與本季的表現相比有何變化？也許第一季與第二季的情況如何？

Sure. So great question. Thanks. So in the first quarter, thinking back, the largest year-over-year variance really related to weather issues that impacted both the UK that had a weaker quarter year-over-year and our nat gas business. So we highlighted those on something like Brazil, we did have an impact on the first quarter.

當然。很好的問題。謝謝。因此，回想起來，第一季最大的同比差異實際上與天氣問題有關，天氣問題影響了同比疲軟的英國和我們的天然氣業務。所以我們強調了像巴西這樣的事情，我們確實對第一季產生了影響。

But in terms of the overall year-over-year variance, it wasn't quite as significant. That situation deteriorated a bit further this quarter, and it became meaningful enough to call it out. But we were impacted by that one in Q1 as well. We weren't impacted as much on that renewable piece of the puzzle that I just described to John. And in terms of nat gas, we called nat gas out last quarter and this quarter, right?

但就整體同比差異而言，並沒有那麼顯著。本季這種情況進一步惡化，因此有足夠的意義來指出這一點。但我們在第一季也受到了影響。我們對我剛才向約翰描述的可再生難題的影響沒有那麼大。就天然氣而言，我們在上個季度和本季都取消了天然氣，對嗎？

So I think those are the principal moving parts. So again, biggest factors last quarter were the weather impact in Europe and the US. In this quarter, you had more significant impacts.

所以我認為這些是主要的移動部分。同樣，上季最大的因素是歐洲和美國的天氣影響。在本季度，您產生了更重大的影響。

There's a little bit of sustainability this week.

本周有一些可持續性。

Yeah. And then in this quarter, it's just our sustainability-related products and services, as I alluded to, were off a little bit. So we mentioned that as well, but not -- somewhat different than what we experienced in the first quarter.

是的。然後在本季度，正如我所提到的，只是我們與永續發展相關的產品和服務略有下降。所以我們也提到了這一點，但沒有——與我們在第一季經歷的情況有些不同。

Got it. All right. Appreciate it. Thank you, guys.

知道了。好的。欣賞它。謝謝你們，夥計們。

(Operator Instructions) Graham Price, Raymond James.

（操作員說明）Graham Price、Raymond James。

Hey. Good afternoon, guys. Thanks for taking the question. Maybe firstly, on aviation. Given that we've seen a lot of problems in the airline industry with the outages and whatnot. Just wondering if there's any impact from that you're seeing on Q3 guidance specifically?

嘿。下午好，夥計們。感謝您提出問題。也許首先是在航空方面。鑑於我們已經看到航空業存在許多問題，例如停駛等。只是想知道您認為這對第三季的指導是否有任何影響？

So far none. We know some of the airlines that got impacted. Obviously, capacity is a little bit more than what is optimum and there's adjustments being made but really no impact. Our network continues to increase and expand -- so being able to grab market share as the locations increase is a favorable development for us. But no impact, not expecting an impact. And if there is one, we're not expecting it to be impactful. So I think it's steady as she goes, and we'll sort of ride that.

到目前為止還沒有。我們知道一些受到影響的航空公司。顯然，容量比最佳容量稍多一些，並且正在進行調整，但實際上沒有影響。我們的網路不斷增加和擴大，因此隨著地點的增加能夠搶佔市場份額對我們來說是一個有利的發展。但沒有影響，預計不會有影響。即使有，我們也不指望它會產生影響。所以我認為她的發展是穩定的，我們會順其自然。

A lot of our business there is contractual. We do have a good amount of ad hoc is what we call it in the aviation market. So there's always the possibility, obviously, but that's not presently in our forecast. It's the opposite.

我們在那裡的許多業務都是合約性的。我們確實有大量的臨時項目，就是我們在航空市場上所說的。顯然，這種可能性總是存在的，但目前我們的預測並不包括在內。事實恰恰相反。

Great. Good to hear there. And then just a housekeeping question for my follow-up. What was the second quarter percentage of EBITDA from low carbon energy, I guess, the Kinect businesses?

偉大的。很高興在那裡聽到。然後是我後續的一個內務問題。第二季來自低碳能源（我猜是 Kinect 業務）的 EBITDA 百分比是多少？

In the second quarter, Graham, the number usually [get to bell] is GP actually, the percentage of that part of our business was about 8%. The EBITDA percentage this quarter was much lower on the back of principally of the much weaker performance on the nat gas side. But it was about 8% of gross profit.

Graham，第二季的數字通常是 GP，實際上，這部分業務占我們業務的比例約為 8%。本季的 EBITDA 百分比要低得多，主要是由於天然氣方面的表現大幅疲軟。但這大約佔毛利的8%。

Got it. Okay. And that GP number, that 8% compares to, I think you told us 12% last quarter.

知道了。好的。與 8% 的 GP 數字相比，我想您上個季度告訴我們的是 12%。

That's right.

這是正確的。

Okay. Got it. Thank you.

好的。知道了。謝謝。

You're welcome, Graham.

不客氣，格雷厄姆。

Thank you. I would now like to turn the conference back to Michael Kasbar for closing remarks. Sir?

謝謝。現在我想請邁克爾·卡斯巴爾 (Michael Kasbar) 致閉幕詞。先生？

Well, thank you, everyone, for listening this afternoon, this evening. Appreciate the interest and look forward to speaking to you next quarter. Be safe. Take care. Bye-bye.

好的，謝謝大家今天下午、今晚的收聽。感謝您的關注，並期待下個季度與您交談。確保安全。小心。再見。

This concludes today's conference call. Thank you for participating. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。