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At this time, I would like to introduce our Chairman and Chief Executive Officer, Michael Kasbar.

Michael Kasbar -- Chairman and Chief Executive Officer

Thank you, Glenn. Good afternoon, everyone and thank you for joining us today. As I've said, over the last few quarters, we continue to focus on three pillars driving our value creation strategy. Institutionalizing a continuous cost management culture sharpening our portfolio to ensure that we are allocating our capital and talent to develop durable profit streams that generate returns in excess of our -- of capital and achieving aggressive organic growth. The results that Ira will be sharing today will attest to the focus and commitment we have had to these core drivers and our continued commitment to them.

I'll pass the call over to Ira to walk us through the financials and then I will share some additional insights, before we begin our Q&A session.

Ira Birns -- Executive Vice President, Chief Financial Officer

Thank you, Mike, and good evening everyone. Our business performed very well in the third quarter, posting record results in our Aviation segment and the highest level of profitability in our Marine segment nearly three years resulting in consolidated adjusted EBITDA of more than $100 million for the first time. Adjusted net income was $42.5 million for the third quarter, up $1.6 million or 4% when compared to the third quarter of 2017 and adjusted diluted earnings per share was $0.63 in the third quarter, up $0.03 or 5% compared to the third quarter of last year.

Consolidated revenue for the third quarter was $10.4 billion, that's up $1.9 billion or 22% compared to the third quarter of 2017. Again this was principally due to the significant year-over-year increase in fuel prices. WTI, which reached a high of $74 per barrel during the third quarter, averaged $70 per barrel for the quarter, an increase of $22 or 45% year-over-year. The pricing impacts were offset in part by lower volume, in both the Marine and Land segments. For the quarter, our Aviation segment volume was up approximately 30 million gallons or 2% year-over-year to 2.1 billion gallons. Solid volume growth in our international fueling operations principally in Europe, drove the positive year-over-year volume growth.

Volume in our Marine segment for the third quarter was 6 million metric tons, down approximately 850,000 metric tons or 13% year-over-year, principally due to discontinuing certain low margin activities during 2018. Sequentially, Marine segment volume increased approximately 100,000 metric tons, representing a sequential volume increase for the second straight quarter. Our Land segment volume was 1.3 billion gallons during the third quarter, down approximately 150 million gallons or 10% compared to the third quarter of 2017. The decline in Land segment volume was principally related to our decision to reduce non-core low margin supply and trading activities in North America.

This decline in volume was partially offset by continued growth in our Kinect global energy services platform. Total consolidated volume in the third quarter was 5 billion gallons, a decrease of approximately 350 million gallons or 7% year-over-year. Before I continue with the core financial review, please note that the following figures exclude $5.5 million of pre-tax, non-operational expenses in the third quarter, as well as, non-operational items in periods previously reported as highlighted in our earnings release.

The non-operational expenses are principally comprised of severance costs, relating to our ongoing restructuring activities. To assist all of you in reconciling results published on our earnings release and 10-Q, the breakdown of the $5.5 million of non-operational expenses to be done on our website and on the last slide of the webcast presentation. Consolidated gross profit for the third quarter was a record $267 million, an increase of $27 million or 11% compared to the third quarter of 2017.

Our Aviation segment contributed a record $141 million of gross profit in the third quarter, an increase of $17 million or 14% compared to the third quarter of the previous year. Year-over-year, the increase in aviation gross profit was principally the result of continued strength in our government-related activity, growth in international fuel sales, including activity related to previously acquired locations and the negative impact of the disruption caused by hurricanes Harvey and Irma in the third quarter of 2017. As we look to the fourth quarter, we expect the traditional seasonal decline coming off the strong third quarter.

Our Marine segment generated third quarter gross profit of $43 million. That's an increase of $13 million or 41% year-over-year, representing the highest level of marine gross profit in a single quarter since 2015. The significant year-over-year gross profit increase was principally related to stronger margins driven by the sharp rise in bunker fuel prices and an increasingly constrained credit environment, which further enhances the value of our business model. Additionally, we benefited from certain higher-margin seasonal business during the third quarter. Looking ahead to the fourth quarter, we expect marine results to decline, driven principally by the drop-off in seasonal activity. Therefore, we anticipate our marine results for the fourth quarter that would be in line with or somewhat better than our second quarter results.

Our Land segment delivered gross profit of $83 million in the third quarter, a decrease of $2 million or 3% year-over-year. The decline was principally driven by unseasonably warm and dry weather in the UK, which had a significant impact on profitability related to agricultural customers, who utilize gas oil to dry their crops, as well as continued weakness in Brazil. The year-over-year decline was offset, in part, by increased activity in Kinect. We experienced solid performance from our Multi Service payment solutions business during the quarter as well. This business generated $17.5 million of gross profit in the third quarter, an increase of 12% compared to the third quarter of last year. Looking ahead, assuming seasonable weather patterns hold up, we expect meaningful sequential growth in our Land segment in the fourth quarter.

Operating expenses in the third quarter, excluding the provision for bad debt and non-operational items, were $180 million, which was up $3 million, excluding the impact of acquisitions, when compared to the third quarter of last year and flat sequentially. Through the first three quarters of the year, operating expenses, excluding bad debt and non-operational items as a percentage of gross profit, was 71.2% compared to 74.1% in 2017, representing a 290 basis point year-over-year improvement already exceeding the 250 basis point goal shared earlier this year, demonstrating our continued commitment to improving operating leverage across our business. We remain committed to driving further efficiencies in our business model, which will serve us well as we position ourselves for future growth. In the fourth quarter, we expect operating expenses, excluding bad debt and non-operational items, to be in the range of $175 million to $180 million.

Consolidated income from operations in the third quarter was $84 million. That's up $20 million or 31% year-over-year, again, reflecting solid gross profit performance, as well as the continuing benefit of cost savings initiatives already completed. Adjusted EBITDA was a record $104 million in the third quarter, up $20 million or 23% from the third quarter of 2017. Trailing 12-month EBITDA increased to $331 million, up $20 million as well or 6% from trailing 12-month EBITDA in the second quarter. We continue to believe that this is an important metric, in part, because it is the principal driver of availability under our credit agreement. And our organization remains focused on driving improvement in EBITDA through our three-pillar strategy of driving continuous cost management culture, sharpening our portfolio and aggressive organic growth.

In light of the complexities brought about by tax reform and the additional guidance which continues to be issued by taxing authorities, we are reviewing potential operating and structural changes to best address such complexities and stabilize our effective tax rate. Meanwhile, we believe EBITDA is currently the best measure of our overall performance. Non-operating expenses, which is principally comprised of interest expense and finance charges associated with our receivable purchase agreements, for the third quarter were $16 million. This represents an increase of $600,000 compared to the third quarter of 2017, principally related to higher average interest rates year-over-year. I would assume interest expense to be in the range of $17 million to $19 million for the fourth quarter.

I've already referred to tax reform and I will refer to it again. It has resulted in an effective tax rate of 36% in the third quarter, up sequentially and up significantly from the third quarter of last year. This rate is higher than forecast, driven principally by a higher-than-expected foreign profits, which continues to penalize us in a post tax reform world. We continue to focus on opportunities, which allow us to bring our effective tax rate down over time, but we do not expect any meaningful reduction in the near term. Therefore, for the fourth quarter, we expect our effective tax rate will be in the range of 34% to 36%, excluding the impact of any potential discrete items. As we look toward 2019, we believe we have opportunities to reduce our effective tax rate below 30% for the full year.

Our total accounts receivable balance was $3.1 billion at quarter-end, an increase of approximately $525 million year-over-year, driven by higher fuel prices. We generated cash flow from operating activities of $28 million for the third quarter, excluding the impact of a change in classification of $116 million of cash proceeds received from the beneficial interest in receivables sold from cash flow from operating activities to cash flow from investing activities due to the accounting standard adopted earlier this year.

Late in the third quarter, we amended our receivable sales facilities, which should reduce the impact of such accounting standard in the fourth quarter and likely eliminate such impact entirely by the first quarter of 2019. In the end, despite a significant increase in fuel prices during the quarter, we did a good job managing working capital, contributing to a reduction of net debt-to-adjusted EBITDA to 1.8 times. Lastly, we repurchased $20 million of our common stock during the quarter, reiterating our commitment to returning additional value to our shareholders.

In closing, our business performed very well in the third quarter, highlighted by record profitability in our Aviation segment and better-than-expected results in our Marine segment. We generated record adjusted EBITDA of more than $100 million during the quarter, driven by record gross profit as well as a continued focus on cost management. Our commitment to driving further efficiencies in our business model is evidenced by a 290 basis point improvement in operating leverage versus our share target of 250 basis points at the beginning of the year. Lastly, as we continue to focus on operating efficiencies, portfolio refinement and growth initiatives, we believe we are well-positioned for growth in 2019 and beyond.

I will now turn the call back over to Mr. Kasbar for additional commentary.

Michael Kasbar -- Chairman and Chief Executive Officer

Thank you, Ira. As I alluded to, in my opening remarks, we are focused on rationalizing our portfolio of businesses in order to shift more of our capital and talent toward businesses that produce more predictable and sustainable profit streams. We are also focused on leveraging our global platforms to drive increased customer penetration and accelerated customer acquisition, both of which translates into organic profit growth. Our commitment to continuous cost management is aimed at ensuring that a higher proportion of our organic growth flows through to earnings, resulting in improved operating leverage.

Our third quarter performance was further evidence that we are successfully executing on all three fronts. Our Aviation segment produced record gross profit and operating income in the quarter supported by organic growth, driven by the continuing expansion of our global supply network. Our aviation team has done an excellent job of leveraging the assets we acquired in early 2017 to enhance our supply capabilities to our existing customer base as well as building upon these assets to further expand our footprint to an additional 70 new airport locations, increasing our ability to bring value to prospective customers and enabling further organic growth.

Moreover, we continued to widen our portfolio of service offerings to the aviation market as a complement to our fuel supply to the extent that services in the third quarter constituted 20% of our total aviation gross profit. Our marine business performed well, following rigorous management of cost, which drove our OpEx ratio from 86% to 66%. We sharpened our portfolio of market segments and locations which enhance margins and we expanded physical operations which are reaching critical mass and driving organic growth. Our land business experienced an improvement in operations in North America largely due to cost management and gains in our commercial and industrial businesses, APP and PAPCO offset by one of the hottest and driest summers on record in the UK as Ira previously mentioned and recessionary pressures in Brazil.

In North America, we continue to execute on our deliberate strategy to exit certain non-core and trading activities that are dependent on market structure to generate profitability in favor of investments in supplying recurring and ratable end user demand that also improves returns. Kinect Energy Group, our expanding global gas and power energy management business recorded its second consecutive profitable quarter compared to a small loss in the prior year. We view Kinect as a key link between our legacy liquid fuels business in our gas and power business to bring a comprehensive set of integrated energy management solutions to a global customer base and expanding global customer base.

Kinect now has established a track record of profitability and is well positioned to increase its contribution to earnings in 2019 and beyond. Our Multi Service FinTech business remains on track to generate double-digit growth in both gross profit and operating income for 2018, they've expanded their offering to cater to a broader customer base. We are optimistic that Multi Service can continue to grow at a similar pace over the course of the next several years.

We continue to believe that the strength of World Fuel Services lies in the diversity of our end markets and the commonality of our offerings. Culturally, our commercial agility has and will continue to be a competitive differentiator in a changing marketplace. Above all, our customers value our responsiveness to their unique requirements and we pride ourselves in our ingenuity and meeting their needs and our financial stability to be their counterparty of choice. I truly have the honor of working alongside over 5,000 talented and dedicated professionals. I'm impressed within grateful for their deep commitment to World Fuel Services and its stakeholders and I am humbled by the important role we have in facilitating global commerce. I'd also like to thank our long-term shareholders for their continuing support.

Operator, if you can please open the line for questions.

Questions and Answers:

Operator

Thank you. (Operator Instructions) And our first question comes from line of Ben Nolan from Stifel. Please proceed with your question.

Ben Nolan -- Stifel -- Analyst

Yeah, thank you. So my first question has to do with the marine business, obviously that one was a bit of a surprise on the upside, at least to me. And I know that you said there is high grading of the customer base and improved levels of demand. Wondering if, Michael, you -- are you yet seeing any maybe flow through from the IMO 2020 regulations or are people looking to hedge? Is that having an impact or more people focused on working with you guys instead of going straight to the suppliers or just curious whether that's helping to contribute to the improvement there?

Michael Kasbar -- Chairman and Chief Executive Officer

Well, I wouldn't say that there is any particular impact on this quarter's results relative to IMO 2020. That -- I think that I'm going to take all the credit for our team, John Rau and all the rest of the marine team, I think gets all the credit for this quarter's results, obviously higher prices, a little bit of credit constraint and balance sheet constraints. But that was a function of cost management that we benefited from an being rather selective in the marketplace.

In terms of IMO 2020, there's certainly a lot of talk, certainly, folks have -- some of them made their decisions in terms of SOx gas scrubbers, there has been -- it's obviously the topic to shore (ph) not only in the marine world but just you're seeing it everywhere. But some folks are taking hedging positions, but that is minority for sure. And everyone is trying to figure out what they're going to do, some are just going to go straight to distillate. You certainly have some issues relative to the availability of high sulfur fuel oil, the supply and logistics for compatibility.

So it's going to be definitely a different type of market. Certainly that will benefit us from the perspective of the expertise that we bring in terms of sourcing, different qualities of fuels and making sure that it's available. So it's going to be a bit more work for the marine team without question but it's right up our alley, and we are well positioned for it, I don't want to over blow what the impact is going to be, because there is going to be some risk out there as well. So we're prepared as I've said before, whatever it may be, whether it's distillate, certainly we benefit from our land position, we understand the technical aspects of it and the logistics aspects of it. But we're not really seeing a whole lot of impact now, it's little bit premature.

Ben Nolan -- Stifel -- Analyst

Okay. And then just switching gears a little bit to the Land segment, that one seems like it's still at least in some areas, kind of the most in terms of work-in-progress. Was curious, I know that you're incubating a few projects, specifically, things like the Kinect business. As -- and I think earlier you said that that in that particular business, had finally gotten to the point where we're starting to generate a little bit of profitability. And curious as we look out into 2019, are things like that or that business in particular are -- how important could they be and sort of improving the margins of the business or is it possible to maybe frame in how much gross profit or something like that might be able to throw off for you guys?

Michael Kasbar -- Chairman and Chief Executive Officer

So, I'll just make sort of a general comment here on land to try to give a little bit of color. It's pretty much an aggregation of a number of different businesses. Brazil, as its own story, you've got complexity there simply because of everything that's going on there. We are rationalizing that as we've been rationalizing a lot of the activity within land. UK is somewhat weather implicated or constrained, we've got improved execution there. So those areas have their own sort of dynamics. Within North America, as I've commented on there has been material cost take-out. We've got improvements in our C&I or commercial and industrial businesses, those are doing well, PAPCO is rebounding, coming back from just a change in the trade flows and the supply flows there.

We've rationalized some of the supply and trading, that's cost us a little bit of gross profit there but giving us improved returns. So that was a sensible thing to do. We've been exiting small businesses even though they're OK, really just trying to focus the energy on businesses that we are going to scale, where the last sort of tranches of exiting our preferred supplier program as I think we've commented in previous calls. Kinect is interesting. I think we're looking at about 20% gross profit this year, and we're optimistic it's small mainly (ph) we talked about these things because they are distinct but we think being involved in gas and power is a sensible thing and it brings us an interesting commercial and industrial clients there. Multi Service is doing well. They have changed their program to go after larger, smaller, medium-sized businesses. So, we're optimistic. I mean we've got a more aggressive outlook for land in '19. We conglomerated a bunch of different businesses, and we haven't done the best job in terms of creating platforms there in the same way that we have done in aviation. So, you need to have that pinned, that's coming together. We're not firing on all of the cylinders there, but we do see that as a part of the future program, and it is coming together. It is taking longer than we would have liked.

Ben Nolan -- Stifel -- Analyst

Okay. That's helpful. I appreciate it. I'll turn it over. Used my two questions. Thanks, guys.

Michael Kasbar -- Chairman and Chief Executive Officer

Okay. Thanks, Ben.

Operator

And our next question comes from the line of Ken Hoexter from Merrill Lynch. Please proceed with your question.

Ken Hoexter -- Bank of America Merrill Lynch -- Analyst

Great. Good afternoon. If -- Michael, if I could just kind of -- I guess I'll take Ben's follow-up question before I ask a question. But on the land side, you mentioned eliminating some non-core trading. I just want to understand, maybe, if you could give us percentages? I've asked this on prior calls for different parts of the business. But what percent of the land is now providing fuel to gas stations? You mentioned the 12% that goes to the card, 20% is Kinect. So, I just want to understand what is the simple business of providing fuel to gas stations? And then, what is left in trading still that you can still look to eliminate?

Michael Kasbar -- Chairman and Chief Executive Officer

So, the trading, it was a wholesale business. Wholesale business is not a bad thing to have as long as you've got it sized appropriately. The non-ratability of it, obviously, is not something that fits within our quarter-by-quarter results, and you can get varying degrees of returns. So, we've opted to reduce that significantly. So, we've done that. We still have some of it. So, that was some of what the rationalization of the portfolio is. The core pieces of North America is the wholesale distribution to gas stations. That's about 25% of our gross profit in North America. And then, the other part of that is our commercial and industrial business, where we are delivering by truck and tank wagon to our customers, we're delivering it into, whatever, commercial, laundries, you name it, aggregate companies, and that's our commercial and industrial business. And that's the other sizable part of that North American business activity.

Ken Hoexter -- Bank of America Merrill Lynch -- Analyst

So, those way, is that an other 25%?

Ira Birns -- Executive Vice President, Chief Financial Officer

Yeah. Ken, it's Ira. Retail is about 25% of our global GP in land. And then, you got the 20% that Mike referred to earlier in Kinect. You've got multi-service, which rolls up into land. And that's about another 20-some-odd percent. And then, the rest of it is sprinkled around. We have our commercial industrial business, which is a little lower than that because it's a fairly new business for us and we've got a little bit of GP coming through in Brazil, and then, the rest is in the UK. We could give you the more detailed percentages, if you want later on.

Ken Hoexter -- Bank of America Merrill Lynch -- Analyst

No, that's helpful. Because that just describes kind of what you're focused on, right, the 40%, 50% that's in the distribution and C&I, and then, you have the other kind of sub-core. So, it's interesting to see that split. So, just on the cost-cutting side, I guess to get my question on the -- you mentioned the program is done, but then, Michael kind of sprinkled in on the land that there may still be more kind of rationalization to go. So, how do you think about this? Is this the -- Ira, you mentioned the 290 basis point improvement. Are we done with the cost-cutting focus portion of that overhaul or is there still more focus on pulling cost out and creating even further efficiencies?

Ira Birns -- Executive Vice President, Chief Financial Officer

Yeah, look, I don't think we'll ever be done. As we point the concept of continuous cost management, I think are our principal formal programs, there have been three, essentially completed some of those cost savings benefits won't be achieved until maybe the first half of 2019. But we are continuing to look for more opportunities. If you look at our cost ratios, we've done a phenomenal job of improving the marine cost ratio, as Mike alluded to, aviation's cost structure is in pretty good shape. We still have more work to do in land and a lot of the work that we did this year was in the corporate side of the house, where a very significant portion of that has been done, but we're always seeking out additional opportunities.

Mike doing things like migrating to the cloud as part of our IT infrastructure is going to generate savings for us over time. And there are lots of other areas on the IT side. I've restructured my finance organization this year, which is reducing the cost of that 600% plus organization worldwide. So we've got a lot going on and we are continuing to focus on it. But I would say, most of the low-hanging fruit or all the low-hanging fruit is behind us. But that doesn't mean we're not going to continue to try to find ways to be more efficient, and drive that cost ratio lower. You remember, our operating margin was 23% last year. We told everyone, we're going to try to get up to 25.5% this year and 28% by next year. I would say we're a little bit ahead of schedule in getting closer and closer to that target of 28% versus the 23% last year. So, there's a lot more heavy lifting to do, but we made a significant amount of progress already.

Ken Hoexter -- Bank of America Merrill Lynch -- Analyst

And then, Ira, just I guess my last one on marine. You kind of mentioned the ramp up in volumes and demand. Is that changing how you address the business or is the business -- was it just rebounding operations? Maybe, you can just dig into your thoughts on that?

Ira Birns -- Executive Vice President, Chief Financial Officer

I think the message on marine is, it's not a big volume story, volumes are actually down year-over-year. But the guys have done a great job, moving away from some business that probably didn't make a whole lot of sense for us in the first place, business that required a lot of working capital and generate a very low returns. So, we've done it a nice job there. And the core business has recently benefited from the sharply rising price environment. We've always talked about marine having a much higher correlation of margin to price because it's principally a spot business as opposed to aviation, which is more contract-oriented, which provides us opportunities over time as prices increase, and we saw a lot more of that this quarter than we've seen in a very long time.

How sustainable that is, is yet to be seen. And then, again, to next question, again, you start getting closer to 2020. So, I would say, we have more optimism in marine today than we did six months ago. The team did a great job in rightsizing the cost structure. And now, we're taking advantage of more opportunities in the marketplace with a much lower capital investment. So, our return on capital business has improved substantially year-over-year. So hopefully, that answers your question.

Ken Hoexter -- Bank of America Merrill Lynch -- Analyst

No, yeah, no, it does. I definitely saw the volume is down 12%, but the gross profit per ton up almost 60%. So, I was just asking if that was a shift in customer strategy or in terms of the wins or if it's -- but you just mentioned it's more the moves with spot. So, does that concern you as crude rolls over a little bit or have you shifted that business a bit?

Ira Birns -- Executive Vice President, Chief Financial Officer

Whether the prices moving up, in my opinion, price is moving down, it's not a very swift move in terms of the impact on margins. Prices have been going up for quite a while and it took a while for us to see the increase. Could they drop down to where they were a year ago overnight? Probably not. But they will move around a bit subject to price. Prices of crude prices as you've noted, come down a little bit, but not enough to make a massive difference. So, early part of the fourth quarter, we're seeing margins a little bit lower than where they were in the third quarter, but not materially lower. And that's why we made the statements about where we expect the fourth quarter to come out.

Ken Hoexter -- Bank of America Merrill Lynch -- Analyst

Great. Appreciate the time and thoughts. Thanks, guys.

Michael Kasbar -- Chairman and Chief Executive Officer

Thanks, Ken.

Operator

And Mr. Kasbar, there's no further question at this time. I will now turn the call back to you for closing remarks.

Michael Kasbar -- Chairman and Chief Executive Officer

Okay. Well, thanks very much to all of our shareholders on the phone, appreciate the support. And thank you to all of my colleagues and all of our colleagues around the world for all the hard work you do every day. It's a pleasure working here and let's keep doing it. So, thanks very much everybody. And we'll see you next quarter.

Operator

Ladies and gentlemen, that does conclude the conference call for today. We thank you for your participation. And ask that you please disconnect your line.

Duration: 38 minutes

Call participants:

Glenn Klevitz -- Vice President, Treasury & Investor Relations

Michael Kasbar -- Chairman and Chief Executive Officer

Ira Birns -- Executive Vice President, Chief Financial Officer

Ben Nolan -- Stifel -- Analyst

Ken Hoexter -- Bank of America Merrill Lynch -- Analyst

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