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Share Name | Share Symbol | Market | Type |
---|---|---|---|
WEX Inc | NYSE:WEX | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.53 | 0.25% | 211.30 | 214.15 | 210.84 | 213.59 | 203,812 | 00:01:17 |
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
01–0526993
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
97 Darling Avenue, South Portland, Maine
|
|
04106
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Large accelerated filer
|
☒
|
|
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
|
|
Smaller reporting company
|
☐
|
|
|
|
|
Emerging growth company
|
☐
|
|
|||
|
|||
PART I—FINANCIAL INFORMATION
|
|||
|
|
|
|
Item 1.
|
|
||
Item 2.
|
|
||
Item 3.
|
|
||
Item 4.
|
|
||
PART II—OTHER INFORMATION
|
|
||
|
|
|
|
Item 1.
|
|
||
Item 1A.
|
|
||
Item 2.
|
|
||
Item 6.
|
|
||
|
|
•
|
the effects of general economic conditions on fueling patterns as well as payment and transaction processing activity;
|
•
|
the impact of foreign currency exchange rates on the Company’s operations, revenue and income;
|
•
|
changes in interest rates;
|
•
|
the impact of fluctuations in fuel prices;
|
•
|
the effects of the Company’s business expansion and acquisition efforts;
|
•
|
potential adverse changes to business or employee relationships, including those resulting from the completion of an acquisition;
|
•
|
competitive responses to any acquisitions;
|
•
|
uncertainty of the expected financial performance of the combined operations following completion of an acquisition;
|
•
|
the ability to successfully integrate the Company’s acquisitions;
|
•
|
the ability to realize anticipated synergies and cost savings;
|
•
|
unexpected costs, charges or expenses resulting from an acquisition;
|
•
|
the Company
’
s ability to successfully acquire, integrate, operate and expand commercial fuel card programs
|
•
|
the failure of corporate investments to result in anticipated strategic value;
|
•
|
the impact and size of credit losses;
|
•
|
the impact of changes to the Company’s credit standards;
|
•
|
breaches of the Company’s technology systems or those of the Company
’
s third-party service providers and any resulting negative impact on our reputation, liabilities or relationships with customers or merchants;
|
•
|
the Company
’
s failure to maintain or renew key commercial agreements;
|
•
|
failure to expand the Company’s technological capabilities and service offerings as rapidly as the Company’s competitors;
|
•
|
failure to successfully implement the Company’s information technology strategies and capabilities in connection with its technology outsourcing and insourcing arrangements and any resulting cost associated with that failure;
|
•
|
the actions of regulatory bodies, including banking and securities regulators, or possible changes in banking or financial regulations impacting the Company’s industrial bank, the Company as the corporate parent or other subsidiaries or affiliates;
|
•
|
the impact of the Company’s outstanding notes on its operations;
|
•
|
the impact of increased leverage on the Company’s operations, results or borrowing capacity generally, and as a result of acquisitions specifically;
|
•
|
the incurrence of impairment charges if our assessment of the fair value of certain of our reporting units changes;
|
•
|
the uncertainties of litigation; as well as
|
•
|
other risks and uncertainties identified in Item 1A of our annual report on Form 10–K for the year ended December 31, 2017 filed with the Securities and Exchange Commission on
March 1, 2018
.
|
2016 Credit Agreement
|
Credit agreement entered into on July 1, 2016 by and among the Company and certain of its subsidiaries, as borrowers, WEX Card Holding Australia Pty Ltd., as designated borrower, and Bank of America, N.A., as administrative agent on behalf of the lenders, as amended.
|
2017 Tax Act
|
2017 Tax Cuts and Jobs Act
|
Adjusted Net Income or ANI
|
A non-GAAP measure that adjusts net income attributable to shareholders to exclude unrealized gains and losses on financial instruments, net foreign currency remeasurement gains and losses, acquisition-related intangible amortization, other acquisition and divestiture related items, stock-based compensation, restructuring and other costs, impairment charges, debt restructuring and debt issuance cost amortization, adjustments attributed to our non-controlling interest and certain tax related items.
|
Segment adjusted operating income
|
A non-GAAP measure that adjusts operating income to exclude specified items that the Company’s management excludes in evaluating segment performance, including acquisition and divestiture related expenses and adjustments including the amortization of purchased intangibles, impairment charges, the expense associated with stock-based compensation, restructuring and other costs, debt restructuring costs and unallocated corporate expenses.
|
AOC
|
AOC Solutions and one of its affiliate companies, 3Delta Systems, Inc.
|
ASU 2014–09
|
Accounting Standards Update No. 2014–09 Revenue from Contracts with Customers (Topic 606)
|
ASU 2016–01
|
Accounting Standards Update No. 2016–01 Financial Instruments – Overall (Subtopic 825–10): Recognition and Measurement of Financial Assets and Financial Liabilities
|
ASU 2016–02
|
Accounting Standards Update No. 2016–02 Leases (Topic 842)
|
ASU 2016–09
|
Accounting Standards Update No. 2016–09 Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting
|
ASU 2016–13
|
Accounting Standards Update No. 2016–13 Financial Instruments–Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments
|
ASU 2016–18
|
Accounting Standards Update No. 2016–18 Statement of Cash Flows (Topic 230): Restricted Cash
|
ASU 2017–07
|
Accounting Standards Update 2017–07 Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost
|
ASU 2018–15
|
Accounting Standards Update No. 2018–15 Intangibles–Goodwill and Other–Internal-Use Software (Subtopic 350–40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract
|
Australian Securitization Subsidiary
|
Southern Cross WEX 2015–1 Trust, a bankruptcy-remote subsidiary consolidated by the Company
|
Company
|
WEX Inc. and all entities included in the unaudited condensed consolidated financial statements
|
EBITDA
|
A non-GAAP measure that adjusts income before income taxes to exclude interest, depreciation and amortization
|
EFS
|
Electronic Funds Source, LLC, a provider of customized corporate payment solutions for fleet and corporate customers with a focus on the large and mid-sized over-the-road fleets. On July 1, 2016, the Company acquired WP Mustang Topco LLC, the indirect parent of Electronic Funds Source, LLC and Warburg Pincus Private Equity XI (Lexington), LLC, an affiliated entity, from investment funds affiliated with Warburg Pincus LLC
|
European Securitization Subsidiary
|
Gorham Trade Finance B.V., a bankruptcy-remote subsidiary consolidated by the Company
|
FASB
|
Financial Accounting Standards Board
|
FDIC
|
Federal Deposit Insurance Corporation
|
GAAP
|
Generally Accepted Accounting Principles in the United States
|
GILTI
|
Global Intangible Low Taxed Income
|
ICS
|
Insured Cash Sweep
|
Indenture
|
The Notes were issued pursuant to an indenture dated as of January 30, 2013 among the Company, the guarantors listed therein, and The Bank of New York Mellon Trust Company, N.A., as trustee
|
NYSE
|
New York Stock Exchange
|
Notes
|
$400 million notes with a 4.75% fixed rate, issued on January 30, 2013
|
Over-the-road
|
Typically heavy trucks traveling long distances
|
Payment solutions purchase volume
|
Total amount paid by customers for transactions
|
Payment processing transactions
|
Funded payment transactions where the Company maintains the receivable for total purchase
|
SaaS
|
Software-as-a-service
|
SEC
|
Securities and Exchange Commission
|
Total fuel transactions
|
Total of transaction processing and payment processing transactions of our Fleet Solutions segment
|
WEX Latin America
|
UNIK S.A., the Company’s Brazilian subsidiary, which has been subsequently branded WEX Latin America
|
WEX
|
WEX Inc.
|
WEX Health
|
Evolution1 and Benaissance, collectively
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Payment processing revenue
|
$
|
182,871
|
|
|
$
|
145,702
|
|
|
$
|
530,063
|
|
|
$
|
423,434
|
|
Account servicing revenue
|
78,748
|
|
|
71,322
|
|
|
236,168
|
|
|
198,538
|
|
||||
Finance fee revenue
|
53,703
|
|
|
50,879
|
|
|
154,958
|
|
|
136,336
|
|
||||
Other revenue
|
67,368
|
|
|
56,099
|
|
|
187,206
|
|
|
160,935
|
|
||||
Total revenues
|
382,690
|
|
|
324,002
|
|
|
1,108,395
|
|
|
919,243
|
|
||||
Cost of services
|
|
|
|
|
|
|
|
||||||||
Processing costs
|
79,580
|
|
|
69,119
|
|
|
235,508
|
|
|
202,682
|
|
||||
Service fees
|
13,818
|
|
|
19,658
|
|
|
39,847
|
|
|
57,413
|
|
||||
Provision for credit losses
|
21,435
|
|
|
19,614
|
|
|
46,930
|
|
|
47,927
|
|
||||
Operating interest
|
10,268
|
|
|
7,537
|
|
|
28,281
|
|
|
17,049
|
|
||||
Depreciation and amortization
|
19,013
|
|
|
18,879
|
|
|
60,058
|
|
|
54,639
|
|
||||
Total cost of services
|
144,114
|
|
|
134,807
|
|
|
410,624
|
|
|
379,710
|
|
||||
General and administrative
|
51,799
|
|
|
51,538
|
|
|
155,720
|
|
|
133,788
|
|
||||
Sales and marketing
|
54,611
|
|
|
41,585
|
|
|
168,849
|
|
|
121,726
|
|
||||
Depreciation and amortization
|
29,054
|
|
|
32,349
|
|
|
88,817
|
|
|
95,788
|
|
||||
Impairment charges
|
2,424
|
|
|
—
|
|
|
2,424
|
|
|
16,175
|
|
||||
Operating income
|
100,688
|
|
|
63,723
|
|
|
281,961
|
|
|
172,056
|
|
||||
Financing interest expense
|
(25,718
|
)
|
|
(25,754
|
)
|
|
(78,560
|
)
|
|
(81,449
|
)
|
||||
Net foreign currency (loss) gain
|
(1,094
|
)
|
|
14,611
|
|
|
(27,438
|
)
|
|
33,578
|
|
||||
Net unrealized gain (loss) on financial instruments
|
2,157
|
|
|
(150
|
)
|
|
18,371
|
|
|
(849
|
)
|
||||
Income before income taxes
|
76,033
|
|
|
52,430
|
|
|
194,334
|
|
|
123,336
|
|
||||
Income taxes
|
18,751
|
|
|
18,570
|
|
|
48,278
|
|
|
43,760
|
|
||||
Net income
|
57,282
|
|
|
33,860
|
|
|
146,056
|
|
|
79,576
|
|
||||
Less: Net (loss) income from non-controlling interest
|
(40
|
)
|
|
(111
|
)
|
|
803
|
|
|
(886
|
)
|
||||
Net income attributable to shareholders
|
$
|
57,322
|
|
|
$
|
33,971
|
|
|
$
|
145,253
|
|
|
$
|
80,462
|
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to WEX Inc. per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
1.33
|
|
|
$
|
0.79
|
|
|
$
|
3.37
|
|
|
$
|
1.87
|
|
Diluted
|
$
|
1.31
|
|
|
$
|
0.79
|
|
|
$
|
3.33
|
|
|
$
|
1.87
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
43,191
|
|
|
43,014
|
|
|
43,141
|
|
|
42,963
|
|
||||
Diluted
|
43,615
|
|
|
43,101
|
|
|
43,558
|
|
|
43,092
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income
|
$
|
57,282
|
|
|
$
|
33,860
|
|
|
$
|
146,056
|
|
|
$
|
79,576
|
|
Changes in investment securities, net of tax (benefit) expense of $(10) and $53 for the three and nine months ended September 30, 2017, respectively
|
—
|
|
|
(12
|
)
|
|
—
|
|
|
97
|
|
||||
Foreign currency translation
|
(9,250
|
)
|
|
11,042
|
|
|
(32,728
|
)
|
|
33,744
|
|
||||
Comprehensive income
|
48,032
|
|
|
44,890
|
|
|
113,328
|
|
|
113,417
|
|
||||
Less: Comprehensive (loss) income attributable to non-controlling interest
|
(109
|
)
|
|
122
|
|
|
540
|
|
|
(112
|
)
|
||||
Comprehensive income attributable to WEX Inc.
|
$
|
48,141
|
|
|
$
|
44,768
|
|
|
$
|
112,788
|
|
|
$
|
113,529
|
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
533,361
|
|
|
$
|
508,072
|
|
Restricted cash
|
22,696
|
|
|
18,866
|
|
||
Accounts receivable (net of allowances of $38,103 in 2018 and $30,207 in 2017)
|
3,124,204
|
|
|
2,517,980
|
|
||
Securitized accounts receivable, restricted
|
142,575
|
|
|
150,235
|
|
||
Prepaid expenses and other current assets
|
85,842
|
|
|
69,413
|
|
||
Total current assets
|
3,908,678
|
|
|
3,264,566
|
|
||
Property, equipment and capitalized software (net of accumulated depreciation of $312,921 in 2018
and $264,928 in 2017) |
166,999
|
|
|
163,908
|
|
||
Goodwill
|
1,838,909
|
|
|
1,876,132
|
|
||
Other intangible assets (net of accumulated amortization of $480,950 in 2018 and $392,827 in 2017)
|
1,069,116
|
|
|
1,154,047
|
|
||
Investment securities
|
24,088
|
|
|
23,358
|
|
||
Deferred income taxes, net
|
8,610
|
|
|
7,752
|
|
||
Other assets
|
143,342
|
|
|
253,088
|
|
||
Total assets
|
$
|
7,159,742
|
|
|
$
|
6,742,851
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
||||
Accounts payable
|
$
|
1,160,661
|
|
|
$
|
811,362
|
|
Accrued expenses
|
308,021
|
|
|
315,346
|
|
||
Short-term deposits
|
878,071
|
|
|
986,989
|
|
||
Short-term debt, net
|
238,864
|
|
|
397,218
|
|
||
Other current liabilities
|
26,848
|
|
|
24,795
|
|
||
Total current liabilities
|
2,612,465
|
|
|
2,535,710
|
|
||
Long-term debt, net
|
2,140,875
|
|
|
2,027,752
|
|
||
Long-term deposits
|
386,770
|
|
|
306,865
|
|
||
Deferred income taxes, net
|
140,478
|
|
|
119,283
|
|
||
Other liabilities
|
29,897
|
|
|
32,683
|
|
||
Total liabilities
|
5,310,485
|
|
|
5,022,293
|
|
||
Commitments and contingencies (Note 13)
|
|
|
|
||||
Stockholders’ Equity
|
|
|
|
||||
Common Stock $0.01 par value; 175,000 shares authorized; 47,528 shares issued in 2018 and 47,352 in 2017;
43,100 shares outstanding in 2018 and 43,022 in 2017 |
475
|
|
|
473
|
|
||
Additional paid-in capital
|
584,047
|
|
|
569,319
|
|
||
Retained earnings
|
1,550,577
|
|
|
1,404,683
|
|
||
Accumulated other comprehensive loss
|
(123,260
|
)
|
|
(90,795
|
)
|
||
Treasury stock at cost; 4,428 shares in 2018 and 2017
|
(172,342
|
)
|
|
(172,342
|
)
|
||
Total WEX Inc. stockholders’ equity
|
1,839,497
|
|
|
1,711,338
|
|
||
Non-controlling interest
|
9,760
|
|
|
9,220
|
|
||
Total stockholders’ equity
|
1,849,257
|
|
|
1,720,558
|
|
||
Total liabilities and stockholders’ equity
|
$
|
7,159,742
|
|
|
$
|
6,742,851
|
|
|
Common Stock Issued
|
|
Additional
Paid-In Capital |
|
Accumulated Other Comprehensive Loss
|
|
Treasury Stock
|
|
Retained
Earnings |
|
Non-Controlling Interest
|
|
Total Stockholders’
Equity
|
|||||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|
|
|||||||||||||||||||||
Balance at December 31, 2016
|
47,173
|
|
|
$
|
472
|
|
|
$
|
547,627
|
|
|
$
|
(122,839
|
)
|
|
$
|
(172,342
|
)
|
|
$
|
1,244,271
|
|
|
$
|
8,558
|
|
|
$
|
1,505,747
|
|
Cumulative-effect adjustment
1
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
261
|
|
|
—
|
|
|
261
|
|
|||||||
Balance at January 1, 2017
|
47,173
|
|
|
$
|
472
|
|
|
$
|
547,627
|
|
|
$
|
(122,839
|
)
|
|
$
|
(172,342
|
)
|
|
$
|
1,244,532
|
|
|
$
|
8,558
|
|
|
$
|
1,506,008
|
|
Stock issued
|
176
|
|
|
1
|
|
|
594
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
595
|
|
|||||||
Share repurchases for tax withholdings
|
—
|
|
|
—
|
|
|
(9,420
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,420
|
)
|
|||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
22,354
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22,354
|
|
|||||||
Changes in investment securities, net of tax expense of $53
|
—
|
|
|
—
|
|
|
—
|
|
|
97
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
97
|
|
|||||||
Foreign currency translation
|
—
|
|
|
—
|
|
|
—
|
|
|
32,970
|
|
|
—
|
|
|
—
|
|
|
774
|
|
|
33,744
|
|
|||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
80,462
|
|
|
(886
|
)
|
|
79,576
|
|
|||||||
Balance at September 30, 2017
|
47,349
|
|
|
$
|
473
|
|
|
$
|
561,155
|
|
|
$
|
(89,772
|
)
|
|
$
|
(172,342
|
)
|
|
$
|
1,324,994
|
|
|
$
|
8,446
|
|
|
$
|
1,632,954
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance at December 31, 2017
|
47,352
|
|
|
$
|
473
|
|
|
$
|
569,319
|
|
|
$
|
(90,795
|
)
|
|
$
|
(172,342
|
)
|
|
$
|
1,404,683
|
|
|
$
|
9,220
|
|
|
$
|
1,720,558
|
|
Cumulative-effect adjustment
2
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
641
|
|
|
—
|
|
|
641
|
|
|||||||
Balance at January 1, 2018
|
47,352
|
|
|
$
|
473
|
|
|
$
|
569,319
|
|
|
$
|
(90,795
|
)
|
|
$
|
(172,342
|
)
|
|
$
|
1,405,324
|
|
|
$
|
9,220
|
|
|
$
|
1,721,199
|
|
Stock issued
|
176
|
|
|
2
|
|
|
2,243
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,245
|
|
|||||||
Share repurchases for tax withholdings
|
—
|
|
|
—
|
|
|
(12,172
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,172
|
)
|
|||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
24,657
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24,657
|
|
|||||||
Foreign currency translation
|
—
|
|
|
—
|
|
|
—
|
|
|
(32,465
|
)
|
|
—
|
|
|
—
|
|
|
(263
|
)
|
|
(32,728
|
)
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
145,253
|
|
|
803
|
|
|
146,056
|
|
|||||||
Balance at September 30, 2018
|
47,528
|
|
|
$
|
475
|
|
|
$
|
584,047
|
|
|
$
|
(123,260
|
)
|
|
$
|
(172,342
|
)
|
|
$
|
1,550,577
|
|
|
$
|
9,760
|
|
|
$
|
1,849,257
|
|
|
Nine Months Ended September 30,
|
||||||
|
2018
|
|
2017
|
||||
Cash flows from operating activities
|
|
|
|
||||
Net income
|
$
|
146,056
|
|
|
$
|
79,576
|
|
Adjustments to reconcile net income to net cash used for operating activities:
|
|
|
|
||||
Net unrealized loss
|
3,871
|
|
|
6,411
|
|
||
Stock-based compensation
|
24,657
|
|
|
22,354
|
|
||
Depreciation and amortization
|
148,875
|
|
|
150,428
|
|
||
Debt restructuring and debt issuance cost amortization
|
7,717
|
|
|
5,935
|
|
||
Provision for deferred taxes
|
20,127
|
|
|
29,924
|
|
||
Provision for credit losses
|
46,930
|
|
|
47,927
|
|
||
Impairment charge
|
2,424
|
|
|
16,175
|
|
||
Changes in operating assets and liabilities, net of effects of acquisitions:
|
|
|
|
||||
Accounts receivable and securitized receivables
|
(685,441
|
)
|
|
(595,804
|
)
|
||
Prepaid expenses and other current and other long-term assets
|
111,489
|
|
|
(17,590
|
)
|
||
Accounts payable
|
371,421
|
|
|
228,284
|
|
||
Accrued expenses
|
(5,385
|
)
|
|
(7,740
|
)
|
||
Income taxes
|
4,530
|
|
|
(2,799
|
)
|
||
Other current and other long-term liabilities
|
(8,411
|
)
|
|
1,300
|
|
||
Amounts due under tax receivable agreement
|
(5,727
|
)
|
|
(8,927
|
)
|
||
Net cash provided by (used for) operating activities
|
183,133
|
|
|
(44,546
|
)
|
||
Cash flows from investing activities
|
|
|
|
||||
Purchases of property, equipment and capitalized software
|
(53,416
|
)
|
|
(56,095
|
)
|
||
Purchase of equity investment
|
(2,617
|
)
|
|
—
|
|
||
Purchases of investment securities
|
(1,627
|
)
|
|
(355
|
)
|
||
Maturities of investment securities
|
181
|
|
|
445
|
|
||
Net cash used for investing activities
|
(57,479
|
)
|
|
(56,005
|
)
|
||
Cash flows from financing activities
|
|
|
|
||||
Repurchase of share-based awards to satisfy tax withholdings
|
(12,172
|
)
|
|
(9,420
|
)
|
||
Proceeds from stock option exercises
|
2,245
|
|
|
595
|
|
||
Net change in deposits
|
(28,485
|
)
|
|
(29,052
|
)
|
||
Increase in borrowed federal funds
|
—
|
|
|
28,462
|
|
||
Net activity on other debt
|
(44,201
|
)
|
|
39,554
|
|
||
Borrowings on revolving credit facility
|
1,219,693
|
|
|
3,385,316
|
|
||
Repayments of revolving credit facility
|
(1,355,931
|
)
|
|
(3,241,719
|
)
|
||
Borrowings on term loans
|
178,000
|
|
|
—
|
|
||
Repayments on term loans
|
(26,971
|
)
|
|
(26,063
|
)
|
||
Debt issuance costs
|
(5,310
|
)
|
|
(438
|
)
|
||
Net change in securitized debt
|
(7,826
|
)
|
|
29,874
|
|
||
Net cash (used for) provided by financing activities
|
(80,958
|
)
|
|
177,109
|
|
||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(15,577
|
)
|
|
(15,247
|
)
|
||
Net change in cash, cash equivalents and restricted cash
|
29,119
|
|
|
61,311
|
|
||
Cash, cash equivalents and restricted cash, beginning of period
(a)
|
526,938
|
|
|
213,342
|
|
||
Cash, cash equivalents and restricted cash, end of period
(a)
|
$
|
556,057
|
|
|
$
|
274,653
|
|
|
|
|
|
||||
Supplemental disclosure of non-cash investing and financing activities
|
|
|
|
||||
Capital expenditures incurred but not paid
|
$
|
5,608
|
|
|
$
|
7,553
|
|
|
Nine Months Ended September 30,
|
||||||
|
2018
|
|
2017
|
||||
Cash and cash equivalents at beginning of period
|
$
|
508,072
|
|
|
$
|
190,930
|
|
Restricted cash at beginning of period
|
18,866
|
|
|
22,412
|
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
$
|
526,938
|
|
|
$
|
213,342
|
|
|
|
|
|
||||
Cash and cash equivalents at end of period
|
$
|
533,361
|
|
|
$
|
251,118
|
|
Restricted cash at end of period
|
22,696
|
|
|
23,535
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
556,057
|
|
|
$
|
274,653
|
|
1.
|
Basis of Presentation
|
•
|
Processing costs -
The Company’s processing costs consist of expenses related to processing transactions, servicing customers and merchants and cost of goods sold related to hardware and other product sales.
|
•
|
Service fees -
The Company incurs costs from third-party networks utilized to deliver payment solutions. Additionally, other third-parties are utilized in performing services directly related to generating revenue. With the adoption of Topic 606 effective January 1, 2018, fees paid to third-party payment processing networks are no longer recorded as service fees and are now presented as a reduction of revenues.
|
•
|
Provision for credit losses -
Changes in the reserve for credit loss are the result of changes in management’s estimate of the losses in the Company’s outstanding portfolio of receivables, including losses from fraud.
|
•
|
Operating interest -
The Company incurs interest expense on the operating debt obtained to provide liquidity for its short-term receivables.
|
•
|
Depreciation and amortization -
The Company has identified those tangible and intangible assets directly associated with providing a service that generates revenue and records the depreciation and amortization associated with those assets under this category. Such assets include processing platforms and related infrastructure, acquired developed technology intangible assets and other similar asset types.
|
•
|
General and administrative -
General and administrative includes compensation and related expenses for executive, finance and accounting, other information technology, human resources, legal and other corporate functions. Also included are corporate facilities expenses, certain third-party professional service fees and other corporate expenses.
|
•
|
Sales and marketing -
The Company’s sales and marketing expenses relate primarily to compensation, benefits, sales commissions and related expenses for sales, marketing and other related activities. With the adoption of Topic 606 effective January 1, 2018, certain payments to partners are now classified as sales and marketing expenses.
|
•
|
Depreciation and amortization -
The depreciation and amortization associated with tangible and intangible assets that are not considered to be directly associated with providing a service that generates revenue are recorded as other operating expenses. Such assets include corporate facilities and information technology assets and acquired intangible assets other than those included in cost of services.
|
2.
|
Recent Accounting Pronouncements
|
ASU 2016–18
|
|
This standard clarifies the classification and presentation of restricted cash in the statement of cash flows. Upon adoption, the statement of cash flows must explain the change during the period in the total of cash and cash equivalents and amounts described as restricted cash or cash equivalents.
|
|
The Company retrospectively adopted ASU 2016–18 effective January 1, 2018.
|
|
This retrospective adoption resulted in including restricted cash in cash, cash equivalents and restricted cash when reconciling the beginning of year and end of year amounts presented on the unaudited condensed consolidated statements of cash flows.
A reconciliation of cash, cash equivalents and restricted cash as reported within our unaudited condensed consolidated balance sheets is included within our unaudited condensed consolidated statements of cash flows.
|
|
|
|
|
|
|
|
ASU 2016–01
|
|
This standard requires equity investments, except those accounted for under the equity method of accounting, or those that result in consolidation of the investee, to be measured at fair value with changes in fair value recognized in net income.
|
|
The Company adopted ASU 2016–01 effective
January 1, 2018. |
|
Changes in the fair value of investment securities are now reflected as non-operating income within our unaudited condensed consolidated statements of income. The adoption did not have a material impact on our results of operations, balance sheet or cash flows.
|
Not Yet Adopted as of September 30, 2018
|
||||||
ASU 2016–02
|
|
This standard increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Certain qualitative and quantitative disclosures are required.
|
|
The Company plans to adopt ASU 2016
–
02 effective January 1, 2019
using the modified retrospective method provided under ASU 2018–11 Leases (Topic 842): Targeted Improvements.
|
|
The Company has established an ASU 2016–02 committee whose primary objectives include implementing a new software solution, reviewing and summarizing lease contracts, establishing completeness over the lease population, determining which practical expedients, if any, we will utilize to facilitate compliance and updating the Company’s accounting policies and procedures.
The Company expects to recognize right-of-use assets and corresponding lease liabilities on the Company’s consolidated balance sheet following the adoption of ASU 2016–02, but the Company is not able to quantify the impact of adoption at this time. The Company is also evaluating the impact the standard will have on its consolidated statement of operations, consolidated statement of cash flows and related disclosures
|
|
|
|
|
|
|
|
ASU 2016
–
13
|
|
This standard requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. The measurement of expected credit losses will be based on historical experience, current conditions and reasonable and supportable forecasts that impact the collectability of the reported amount.
|
|
The standard is effective January 1, 2020.
|
|
The Company is evaluating the impact the standard will have on its consolidated financial statements and related disclosures.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASU 2018
–
15
|
|
This standard clarifies the accounting for capitalizing implementation costs in a cloud computing arrangement that is a service contract. The standard provides that implementation costs be treated using the same criteria used for internal-use software development costs, with amortization expense being recorded in the same income statement expense line as the hosted service costs and over the expected term of the hosting arrangement.
|
|
The standard is effective January 1, 2020.
|
|
The Company is evaluating the impact the standard will have on its consolidated financial statements and related disclosures.
|
3.
|
Revenue
|
|
Three Months Ended September 30, 2018
|
|
Nine Months Ended September 30, 2018
|
||||||||||||||||||||
(In thousands)
|
Prior to Adoption
|
|
Impact of Topic 606
|
|
As Reported
|
|
Prior to Adoption
|
|
Impact of Topic 606
|
|
As Reported
|
||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Payment processing revenue
|
$
|
174,170
|
|
|
$
|
8,701
|
|
|
$
|
182,871
|
|
|
$
|
501,674
|
|
|
$
|
28,389
|
|
|
$
|
530,063
|
|
Account servicing revenue
|
78,748
|
|
|
—
|
|
|
78,748
|
|
|
236,168
|
|
|
—
|
|
|
236,168
|
|
||||||
Finance fee revenue
|
53,703
|
|
|
—
|
|
|
53,703
|
|
|
154,958
|
|
|
—
|
|
|
154,958
|
|
||||||
Other revenue
|
65,682
|
|
|
1,686
|
|
|
67,368
|
|
|
183,997
|
|
|
3,209
|
|
|
187,206
|
|
||||||
Total revenues
|
372,303
|
|
|
10,387
|
|
|
382,690
|
|
|
1,076,797
|
|
|
31,598
|
|
|
1,108,395
|
|
||||||
Cost of services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Processing costs
|
79,580
|
|
|
—
|
|
|
79,580
|
|
|
235,508
|
|
|
—
|
|
|
235,508
|
|
||||||
Service fees
|
17,234
|
|
|
(3,416
|
)
|
|
13,818
|
|
|
53,310
|
|
|
(13,463
|
)
|
|
39,847
|
|
||||||
Provision for credit losses
|
21,435
|
|
|
—
|
|
|
21,435
|
|
|
46,930
|
|
|
—
|
|
|
46,930
|
|
||||||
Operating interest
|
10,268
|
|
|
—
|
|
|
10,268
|
|
|
28,281
|
|
|
—
|
|
|
28,281
|
|
||||||
Depreciation and amortization
|
19,013
|
|
|
—
|
|
|
19,013
|
|
|
60,058
|
|
|
—
|
|
|
60,058
|
|
||||||
Total cost of services
|
147,530
|
|
|
(3,416
|
)
|
|
144,114
|
|
|
424,087
|
|
|
(13,463
|
)
|
|
410,624
|
|
||||||
General and administrative
|
51,799
|
|
|
—
|
|
|
51,799
|
|
|
155,720
|
|
|
—
|
|
|
155,720
|
|
||||||
Sales and marketing
|
40,846
|
|
|
13,765
|
|
|
54,611
|
|
|
123,996
|
|
|
44,853
|
|
|
168,849
|
|
||||||
Depreciation and amortization
|
29,054
|
|
|
—
|
|
|
29,054
|
|
|
88,817
|
|
|
—
|
|
|
88,817
|
|
||||||
Impairment charge
|
2,424
|
|
|
—
|
|
|
2,424
|
|
|
2,424
|
|
|
—
|
|
|
2,424
|
|
||||||
Operating income
|
100,650
|
|
|
38
|
|
|
100,688
|
|
|
281,753
|
|
|
208
|
|
|
281,961
|
|
||||||
Financing interest expense
|
(25,718
|
)
|
|
—
|
|
|
(25,718
|
)
|
|
(78,560
|
)
|
|
—
|
|
|
(78,560
|
)
|
||||||
Net foreign currency loss
|
(1,094
|
)
|
|
—
|
|
|
(1,094
|
)
|
|
(27,438
|
)
|
|
—
|
|
|
(27,438
|
)
|
||||||
Net unrealized gain on financial instruments
|
2,157
|
|
|
—
|
|
|
2,157
|
|
|
18,371
|
|
|
—
|
|
|
18,371
|
|
||||||
Income before income taxes
|
75,995
|
|
|
38
|
|
|
76,033
|
|
|
194,126
|
|
|
208
|
|
|
194,334
|
|
||||||
Income taxes
|
18,741
|
|
|
10
|
|
|
18,751
|
|
|
48,222
|
|
|
56
|
|
|
48,278
|
|
||||||
Net income
|
57,254
|
|
|
28
|
|
|
57,282
|
|
|
145,904
|
|
|
152
|
|
|
146,056
|
|
||||||
Less: Net (loss) income from non-controlling interest
|
(40
|
)
|
|
—
|
|
|
(40
|
)
|
|
803
|
|
|
—
|
|
|
803
|
|
||||||
Net income attributable to shareholders
|
$
|
57,294
|
|
|
$
|
28
|
|
|
$
|
57,322
|
|
|
$
|
145,101
|
|
|
$
|
152
|
|
|
$
|
145,253
|
|
|
Three Months Ended September 30, 2018
|
||||||||||||||
(In thousands)
|
Fleet Solutions
|
|
Travel and Corporate Solutions
|
|
Health and Employee Benefit Solutions
|
|
Total
|
||||||||
Topic 606 revenues
|
|
|
|
|
|
|
|
||||||||
Payment processing revenue
|
$
|
116,023
|
|
|
$
|
54,345
|
|
|
$
|
12,503
|
|
|
$
|
182,871
|
|
Account servicing revenue
|
6,920
|
|
|
9,120
|
|
|
26,818
|
|
|
42,858
|
|
||||
Other revenue
|
11,721
|
|
|
1,063
|
|
|
6,359
|
|
|
19,143
|
|
||||
Total Topic 606 revenues
|
$
|
134,664
|
|
|
$
|
64,528
|
|
|
$
|
45,680
|
|
|
$
|
244,872
|
|
|
|
|
|
|
|
|
|
||||||||
Non-Topic 606 revenues
|
|
|
|
|
|
|
|
||||||||
Account servicing revenue
|
$
|
35,890
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
35,890
|
|
Finance fee revenue
|
51,644
|
|
|
670
|
|
|
1,389
|
|
|
53,703
|
|
||||
Other revenue
|
27,414
|
|
|
17,612
|
|
|
3,199
|
|
|
48,225
|
|
||||
Total non-Topic 606 revenues
|
$
|
114,948
|
|
|
$
|
18,282
|
|
|
$
|
4,588
|
|
|
$
|
137,818
|
|
|
|
|
|
|
|
|
|
||||||||
Total revenues
|
$
|
249,612
|
|
|
$
|
82,810
|
|
|
$
|
50,268
|
|
|
$
|
382,690
|
|
|
Nine Months Ended September 30, 2018
|
||||||||||||||
(In thousands)
|
Fleet Solutions
|
|
Travel and Corporate Solutions
|
|
Health and Employee Benefit Solutions
|
|
Total
|
||||||||
Topic 606 revenues
|
|
|
|
|
|
|
|
||||||||
Payment processing revenue
|
$
|
335,896
|
|
|
$
|
150,411
|
|
|
$
|
43,756
|
|
|
$
|
530,063
|
|
Account servicing revenue
|
20,770
|
|
|
27,584
|
|
|
80,545
|
|
|
128,899
|
|
||||
Other revenue
|
39,288
|
|
|
3,386
|
|
|
19,775
|
|
|
62,449
|
|
||||
Total Topic 606 revenues
|
$
|
395,954
|
|
|
$
|
181,381
|
|
|
$
|
144,076
|
|
|
$
|
721,411
|
|
|
|
|
|
|
|
|
|
||||||||
Non-Topic 606 revenues
|
|
|
|
|
|
|
|
||||||||
Account servicing revenue
|
$
|
107,269
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
107,269
|
|
Finance fee revenue
|
140,436
|
|
|
1,157
|
|
|
13,365
|
|
|
154,958
|
|
||||
Other revenue
|
77,788
|
|
|
42,815
|
|
|
4,154
|
|
|
124,757
|
|
||||
Total non-Topic 606 revenues
|
$
|
325,493
|
|
|
$
|
43,972
|
|
|
$
|
17,519
|
|
|
$
|
386,984
|
|
|
|
|
|
|
|
|
|
||||||||
Total revenues
|
$
|
721,447
|
|
|
$
|
225,353
|
|
|
$
|
161,595
|
|
|
$
|
1,108,395
|
|
•
|
Our Fleet Solutions segment interchange income primarily relates to revenue earned on transactions processed through the Company’s proprietary closed-loop fuel networks. In closed-loop fuel network arrangements, written contracts are entered into between the Company and merchants, which determine the interchange fee charged on transactions. The Company extends short-term credit to the fleet cardholder and pays the merchant the purchase price for the cardholder’s transaction, less the interchange fees the Company retains. The Company collects the total purchase price from the fleet cardholder. In Europe, interchange income is specifically derived from the difference between the negotiated price of fuel from the supplier and the agreed upon price paid by fleet cardholders.
|
•
|
Interchange income in our Travel and Corporate Solutions and Health and Employee Benefit Solutions segments relates to revenue earned on transactions processed through open-loop networks. In open-loop network arrangements, there are several intermediaries involved between the merchant and the cardholder and written contracts between all parties involved in the process do not exist. Rather, the transaction is governed by the rates determined by the payment network at the point-of-sale. This framework dictates the interchange rate, the risk of loss, dispute procedures and timing of payment. For these transactions, there is an implied contract between the Company and the merchant. In our Travel and Corporate Solutions segment, the Company remits payment to the card network for the purchase price of the cardholder transaction, less the interchange fees the Company earns. The Company collects the total purchase price from the cardholder. In our Health and Employee Benefit Solutions segment, funding of transactions and collections from cardholders is performed by third-party sponsor banks, who remit a portion of the interchange fee to us.
|
(In thousands)
|
|
|
|
|
|
|
||||
Contract balance
|
|
Location on the unaudited condensed consolidated balance sheets
|
|
September 30, 2018
|
|
January 1, 2018
|
||||
Receivables
1
|
|
Accounts receivable, net
|
|
$
|
27,738
|
|
|
$
|
30,386
|
|
Contract assets
|
|
Prepaid expenses and other current assets
|
|
$
|
7,709
|
|
|
$
|
7,053
|
|
Contract assets
|
|
Other assets
|
|
$
|
47,646
|
|
|
$
|
49,068
|
|
Contract liabilities
|
|
Other current liabilities
|
|
$
|
23,723
|
|
|
$
|
26,592
|
|
(In thousands)
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
Thereafter
|
|
Total
|
||||||||||||||
Minimum monthly fees
1
|
$
|
17,265
|
|
|
$
|
57,108
|
|
|
$
|
35,176
|
|
|
$
|
19,648
|
|
|
$
|
9,803
|
|
|
$
|
2,226
|
|
|
$
|
141,226
|
|
Professional services
2
|
3,401
|
|
|
9,796
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,197
|
|
|||||||
Total remaining performance obligations
|
$
|
20,666
|
|
|
$
|
66,904
|
|
|
$
|
35,176
|
|
|
$
|
19,648
|
|
|
$
|
9,803
|
|
|
$
|
2,226
|
|
|
$
|
154,423
|
|
4.
|
Business Acquisition
|
(In thousands)
|
As Reported
December 31, 2017
|
|
Measurement Period Adjustments
|
|
Final
September 30, 2018
|
||||||
Total consideration
|
$
|
129,828
|
|
|
$
|
—
|
|
|
$
|
129,828
|
|
Less:
|
|
|
|
|
|
||||||
Cash
|
15,546
|
|
|
—
|
|
|
15,546
|
|
|||
Accounts receivable
|
4,171
|
|
|
100
|
|
|
4,271
|
|
|||
Property and equipment
|
2,530
|
|
|
(1,329
|
)
|
|
1,201
|
|
|||
Customer relationships
(a)
|
15,000
|
|
|
200
|
|
|
15,200
|
|
|||
Developed technologies
(b)
|
24,100
|
|
|
—
|
|
|
24,100
|
|
|||
Trademarks and trade names
(c)
|
1,460
|
|
|
10
|
|
|
1,470
|
|
|||
In-process research and development
|
—
|
|
|
21,600
|
|
|
21,600
|
|
|||
Other liabilities
|
(685
|
)
|
|
(772
|
)
|
|
(1,457
|
)
|
|||
Recorded goodwill
|
$
|
67,706
|
|
|
$
|
(19,809
|
)
|
|
$
|
47,897
|
|
5.
|
Accounts Receivable
|
Delinquency Status
|
September 30, 2018
|
|
December 31, 2017
|
||
29 days or less past due
|
97
|
%
|
|
95
|
%
|
59 days or less past due
|
99
|
%
|
|
97
|
%
|
|
Nine Months Ended September 30,
|
||||||
(In thousands)
|
2018
|
|
2017
|
||||
Balance, beginning of year
|
$
|
30,207
|
|
|
$
|
20,092
|
|
Provision for credit losses
|
46,930
|
|
|
47,927
|
|
||
Charges to other accounts
1
|
14,408
|
|
|
12,221
|
|
||
Charge-offs
|
(58,532
|
)
|
|
(53,044
|
)
|
||
Recoveries of amounts previously charged-off
|
5,439
|
|
|
5,085
|
|
||
Currency translation
|
(349
|
)
|
|
431
|
|
||
Balance, end of period
|
$
|
38,103
|
|
|
$
|
32,712
|
|
6.
|
Earnings per Share
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income attributable to shareholders
|
$
|
57,322
|
|
|
$
|
33,971
|
|
|
$
|
145,253
|
|
|
$
|
80,462
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding – Basic
|
43,191
|
|
|
43,014
|
|
|
43,141
|
|
|
42,963
|
|
||||
Dilutive impact of share-based compensation awards
|
424
|
|
|
87
|
|
|
417
|
|
|
129
|
|
||||
Weighted average common shares outstanding – Diluted
|
43,615
|
|
|
43,101
|
|
|
43,558
|
|
|
43,092
|
|
7.
|
Derivative Instruments
|
|
Tranche A
|
|
Tranche B
|
|
Tranche C
|
|
Tranche D
|
|
Tranche E
|
Notional amount at inception (in thousands)
|
$300,000
|
|
$200,000
|
|
$400,000
|
|
$150,000
|
|
$250,000
|
Amortization
|
N/A
|
|
N/A
|
|
5% annually
|
|
N/A
|
|
N/A
|
Maturity date
|
12/30/2022
|
|
12/30/2022
|
|
12/31/2020
|
|
12/31/2020
|
|
12/31/2018
|
Fixed interest rate
|
2.204%
|
|
2.212%
|
|
1.108%
|
|
1.125%
|
|
0.896%
|
(In thousands)
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
Derivatives
Not Designated as Hedging Instruments
|
Location of Gain (Loss) Recognized in Income Statement
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|||||||||
Interest rate swap agreements –
unrealized portion
|
|
Net unrealized gain (loss) on financial instruments
|
|
$
|
2,340
|
|
|
$
|
(150
|
)
|
|
$
|
19,792
|
|
|
$
|
(849
|
)
|
Interest rate swap agreements –
realized portion
|
|
Financing interest income (expense)
|
|
$
|
1,866
|
|
|
$
|
377
|
|
|
$
|
3,542
|
|
|
$
|
(243
|
)
|
8.
|
Deposits
|
(In thousands)
|
September 30, 2018
|
|
December 31, 2017
|
||||
Interest-bearing brokered money market deposits
|
$
|
238,382
|
|
|
$
|
285,899
|
|
Customer deposits
|
108,800
|
|
|
70,211
|
|
||
Certificates of deposit with maturities within 1 year
(a)
|
530,889
|
|
|
630,879
|
|
||
Short-term deposits
|
878,071
|
|
|
986,989
|
|
||
Certificates of deposit with maturities greater than 1 year and less than 5 years
(a)
|
386,770
|
|
|
306,865
|
|
||
Total deposits
|
$
|
1,264,841
|
|
|
$
|
1,293,854
|
|
|
|
|
|
||||
Weighted average cost of funds on certificates of deposit outstanding
|
2.16
|
%
|
|
1.51
|
%
|
||
Weighted average cost of interest-bearing brokered money market deposits
|
2.24
|
%
|
|
1.49
|
%
|
9.
|
Financing and Other Debt
|
(In thousands)
|
September 30, 2018
|
|
December 31, 2017
|
||||
Revolving line-of-credit facility under 2016 Credit Agreement
(a)
|
$
|
—
|
|
|
$
|
136,535
|
|
Term loans under 2016 Credit Agreement
(a)
|
1,753,904
|
|
|
1,602,875
|
|
||
Notes outstanding
(a)
|
400,000
|
|
|
400,000
|
|
||
Securitized debt
|
111,556
|
|
|
126,901
|
|
||
Participation debt
|
140,965
|
|
|
184,990
|
|
||
WEX Latin America debt
|
7,808
|
|
|
9,747
|
|
||
Total gross debt
|
$
|
2,414,233
|
|
|
$
|
2,461,048
|
|
|
|
|
|
||||
Current portion of gross debt
|
$
|
245,608
|
|
|
$
|
404,233
|
|
Less: Unamortized debt issuance costs
|
(6,744
|
)
|
|
(7,015
|
)
|
||
Short-term debt, net
|
$
|
238,864
|
|
|
$
|
397,218
|
|
|
|
|
|
||||
Long-term gross debt
|
$
|
2,168,625
|
|
|
$
|
2,056,815
|
|
Less: Unamortized debt issuance costs
|
(27,750
|
)
|
|
(29,063
|
)
|
||
Long-term debt, net
|
$
|
2,140,875
|
|
|
$
|
2,027,752
|
|
|
|
|
|
||||
Supplemental information under 2016 Credit Agreement:
|
|
|
|
||||
Letters of credit
(b)
|
$
|
53,718
|
|
|
$
|
27,500
|
|
Borrowing capacity
(c)
|
$
|
666,282
|
|
|
$
|
405,965
|
|
10.
|
Off–Balance Sheet Arrangements
|
11.
|
Fair Value
|
•
|
Level 1 – Quoted prices for identical instruments in active markets.
|
•
|
Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.
|
•
|
Level 3 – Instruments whose significant value drivers are unobservable.
|
(In thousands)
|
Fair Value Hierarchy
|
September 30, 2018
|
|
December 31, 2017
|
||||
Assets
|
|
|
|
|
||||
Municipal bonds
|
2
|
$
|
400
|
|
|
$
|
534
|
|
Asset-backed securities
|
2
|
319
|
|
|
345
|
|
||
Mortgage-backed securities
|
2
|
275
|
|
|
305
|
|
||
Fixed-income mutual fund
|
1
|
23,094
|
|
|
22,174
|
|
||
Investment securities
(a)
|
|
$
|
24,088
|
|
|
$
|
23,358
|
|
Executive deferred compensation plan trust
(b)
|
1
|
$
|
6,971
|
|
|
$
|
6,798
|
|
Interest rate swaps
(c)
|
2
|
$
|
34,014
|
|
|
$
|
19,595
|
|
Liabilities
|
|
|
|
|
||||
Interest rate swaps
(d)
|
2
|
$
|
—
|
|
|
$
|
5,373
|
|
12.
|
Income Taxes
|
13.
|
Commitments and Contingencies
|
14.
|
Stock–Based Compensation
|
|
|
2018
|
|
2017
|
||||
Weighted average expected life (in years)
|
|
6.0
|
|
|
6.0
|
|
||
Weighted average exercise price
|
|
$
|
158.23
|
|
|
$
|
104.95
|
|
Expected stock price volatility
|
|
27.35
|
%
|
|
30.67
|
%
|
||
Risk-free interest rate
|
|
2.69
|
%
|
|
2.13
|
%
|
||
Weighted average fair value
|
|
$
|
51.27
|
|
|
$
|
35.58
|
|
15.
|
Restructuring Activities
|
2015 Restructuring Initiative
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Balance, beginning of period
|
$
|
1,143
|
|
|
$
|
3,008
|
|
|
$
|
2,680
|
|
|
$
|
5,231
|
|
Restructuring (reversals) charges
|
(30
|
)
|
|
431
|
|
|
(77
|
)
|
|
1,964
|
|
||||
Cash paid
|
(313
|
)
|
|
(656
|
)
|
|
(1,804
|
)
|
|
(3,492
|
)
|
||||
Liability transfer to 2016 Restructuring Initiative
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,158
|
)
|
||||
Foreign currency translation
|
(4
|
)
|
|
(22
|
)
|
|
(3
|
)
|
|
216
|
|
||||
Balance, end of period
|
$
|
796
|
|
|
$
|
2,761
|
|
|
$
|
796
|
|
|
$
|
2,761
|
|
2016 Restructuring Initiative
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Balance, beginning of period
|
$
|
410
|
|
|
$
|
4,342
|
|
|
$
|
738
|
|
|
$
|
3,662
|
|
Restructuring charges
|
28
|
|
|
88
|
|
|
58
|
|
|
(226
|
)
|
||||
Cash paid
|
(199
|
)
|
|
(1,778
|
)
|
|
(555
|
)
|
|
(2,265
|
)
|
||||
Liability transfer from 2015 Restructuring Initiative
|
—
|
|
|
—
|
|
|
—
|
|
|
1,158
|
|
||||
Foreign currency translation
|
(2
|
)
|
|
35
|
|
|
(4
|
)
|
|
358
|
|
||||
Balance, end of period
|
$
|
237
|
|
|
$
|
2,687
|
|
|
$
|
237
|
|
|
$
|
2,687
|
|
Acquisition Integration Restructuring Initiative
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Balance, beginning of period
|
$
|
32
|
|
|
$
|
1,333
|
|
|
$
|
5,093
|
|
|
$
|
1,764
|
|
Restructuring charges
|
—
|
|
|
4,120
|
|
|
240
|
|
|
5,061
|
|
||||
Cash paid
|
(32
|
)
|
|
(937
|
)
|
|
(5,355
|
)
|
|
(2,416
|
)
|
||||
Other
|
—
|
|
|
—
|
|
|
22
|
|
|
107
|
|
||||
Balance, end of period
|
$
|
—
|
|
|
$
|
4,516
|
|
|
$
|
—
|
|
|
$
|
4,516
|
|
Total Restructuring Initiatives
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Balance, beginning of period
|
$
|
1,585
|
|
|
$
|
8,683
|
|
|
$
|
8,511
|
|
|
$
|
10,657
|
|
Restructuring charges
|
(2
|
)
|
|
4,639
|
|
|
221
|
|
|
6,799
|
|
||||
Cash paid
|
(544
|
)
|
|
(3,371
|
)
|
|
(7,714
|
)
|
|
(8,173
|
)
|
||||
Other
|
—
|
|
|
—
|
|
|
22
|
|
|
107
|
|
||||
Foreign currency translation
|
(6
|
)
|
|
13
|
|
|
(7
|
)
|
|
574
|
|
||||
Balance, end of period
|
$
|
1,033
|
|
|
$
|
9,964
|
|
|
$
|
1,033
|
|
|
$
|
9,964
|
|
16.
|
Segment Information
|
•
|
Fleet Solutions
provides customers with payment and transaction processing services specifically designed for the needs of commercial and government fleets. This segment also provides information management services to these fleet customers.
|
•
|
Travel and Corporate Solutions
focuses on the complex payment environment of business-to-business payments, providing customers with payment processing solutions for their corporate payment and transaction monitoring needs.
|
•
|
Health and Employee Benefit Solutions
provides healthcare payment products and SaaS consumer directed platforms, as well as payroll related benefits to customers.
|
|
Three Months Ended September 30, 2018
|
||||||||||||||
(In thousands)
|
Fleet Solutions
|
|
Travel and Corporate Solutions
|
|
Health and Employee
Benefit Solutions
|
|
Total
|
||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Payment processing revenue
|
$
|
116,023
|
|
|
$
|
54,345
|
|
|
$
|
12,503
|
|
|
$
|
182,871
|
|
Account servicing revenue
|
42,810
|
|
|
9,120
|
|
|
26,818
|
|
|
78,748
|
|
||||
Finance fee revenue
|
51,644
|
|
|
670
|
|
|
1,389
|
|
|
53,703
|
|
||||
Other revenue
|
39,135
|
|
|
18,675
|
|
|
9,558
|
|
|
67,368
|
|
||||
Total revenues
|
$
|
249,612
|
|
|
$
|
82,810
|
|
|
$
|
50,268
|
|
|
$
|
382,690
|
|
|
|
|
|
|
|
|
|
||||||||
Interest income
|
$
|
1,092
|
|
|
$
|
172
|
|
|
$
|
543
|
|
|
$
|
1,807
|
|
|
Three Months Ended September 30, 2017
|
||||||||||||||
(In thousands)
|
Fleet Solutions
|
|
Travel and Corporate Solutions
|
|
Health and Employee Benefit Solutions
|
|
Total
|
||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Payment processing revenue
|
$
|
90,270
|
|
|
$
|
44,177
|
|
|
$
|
11,255
|
|
|
$
|
145,702
|
|
Account servicing revenue
|
44,858
|
|
|
206
|
|
|
26,258
|
|
|
71,322
|
|
||||
Finance fee revenue
|
40,773
|
|
|
87
|
|
|
10,019
|
|
|
50,879
|
|
||||
Other revenue
|
36,177
|
|
|
16,556
|
|
|
3,366
|
|
|
56,099
|
|
||||
Total revenues
|
$
|
212,078
|
|
|
$
|
61,026
|
|
|
$
|
50,898
|
|
|
$
|
324,002
|
|
|
|
|
|
|
|
|
|
||||||||
Interest income
|
$
|
944
|
|
|
$
|
208
|
|
|
$
|
10,899
|
|
|
$
|
12,051
|
|
|
Nine Months Ended September 30, 2018
|
||||||||||||||
(In thousands)
|
Fleet Solutions
|
|
Travel and Corporate Solutions
|
|
Health and Employee Benefit Solutions
|
|
Total
|
||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Payment processing revenue
|
$
|
335,896
|
|
|
$
|
150,411
|
|
|
$
|
43,756
|
|
|
$
|
530,063
|
|
Account servicing revenue
|
128,039
|
|
|
27,584
|
|
|
80,545
|
|
|
236,168
|
|
||||
Finance fee revenue
|
140,436
|
|
|
1,157
|
|
|
13,365
|
|
|
154,958
|
|
||||
Other revenue
|
117,076
|
|
|
46,201
|
|
|
23,929
|
|
|
187,206
|
|
||||
Total revenues
|
$
|
721,447
|
|
|
$
|
225,353
|
|
|
$
|
161,595
|
|
|
$
|
1,108,395
|
|
|
|
|
|
|
|
|
|
||||||||
Interest income
|
$
|
3,127
|
|
|
$
|
715
|
|
|
$
|
11,698
|
|
|
$
|
15,540
|
|
|
Nine Months Ended September 30, 2017
|
||||||||||||||
(In thousands)
|
Fleet Solutions
|
|
Travel and Corporate Solutions
|
|
Health and Employee Benefit Solutions
|
|
Total
|
||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Payment processing revenue
|
$
|
264,210
|
|
|
$
|
119,328
|
|
|
$
|
39,896
|
|
|
$
|
423,434
|
|
Account servicing revenue
|
122,238
|
|
|
528
|
|
|
75,772
|
|
|
198,538
|
|
||||
Finance fee revenue
|
113,754
|
|
|
469
|
|
|
22,113
|
|
|
136,336
|
|
||||
Other revenue
|
103,003
|
|
|
43,414
|
|
|
14,518
|
|
|
160,935
|
|
||||
Total revenues
|
$
|
603,205
|
|
|
$
|
163,739
|
|
|
$
|
152,299
|
|
|
$
|
919,243
|
|
|
|
|
|
|
|
|
|
||||||||
Interest income
|
$
|
2,764
|
|
|
$
|
569
|
|
|
$
|
23,253
|
|
|
$
|
26,586
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Segment adjusted operating income
|
|
|
|
|
|
|
|
||||||||
Fleet Solutions
|
$
|
113,731
|
|
|
$
|
92,698
|
|
|
$
|
329,364
|
|
|
$
|
267,718
|
|
Travel and Corporate Solutions
|
39,377
|
|
|
28,995
|
|
|
99,074
|
|
|
69,697
|
|
||||
Health and Employee Benefit Solutions
|
10,482
|
|
|
11,507
|
|
|
42,444
|
|
|
41,897
|
|
||||
Total segment adjusted operating income
|
$
|
163,590
|
|
|
$
|
133,200
|
|
|
$
|
470,882
|
|
|
$
|
379,312
|
|
|
|
|
|
|
|
|
|
||||||||
Reconciliation:
|
|
|
|
|
|
|
|
||||||||
Total segment adjusted operating income
|
$
|
163,590
|
|
|
$
|
133,200
|
|
|
$
|
470,882
|
|
|
$
|
379,312
|
|
Less:
|
|
|
|
|
|
|
|
||||||||
Unallocated corporate expenses
|
13,414
|
|
|
12,935
|
|
|
42,378
|
|
|
38,056
|
|
||||
Acquisition-related intangible amortization
|
33,439
|
|
|
38,510
|
|
|
103,596
|
|
|
114,603
|
|
||||
Other acquisition and divestiture related items
|
1,536
|
|
|
1,006
|
|
|
2,792
|
|
|
3,380
|
|
||||
Debt restructuring costs
|
317
|
|
|
2,519
|
|
|
3,798
|
|
|
2,519
|
|
||||
Stock-based compensation
|
9,799
|
|
|
8,483
|
|
|
25,659
|
|
|
22,354
|
|
||||
Restructuring and other costs
|
1,973
|
|
|
6,024
|
|
|
8,274
|
|
|
10,169
|
|
||||
Impairment charges
|
2,424
|
|
|
—
|
|
|
2,424
|
|
|
16,175
|
|
||||
Operating income
|
100,688
|
|
|
63,723
|
|
|
281,961
|
|
|
172,056
|
|
||||
Financing interest expense
|
(25,718
|
)
|
|
(25,754
|
)
|
|
(78,560
|
)
|
|
(81,449
|
)
|
||||
Net foreign currency (loss) gain
|
(1,094
|
)
|
|
14,611
|
|
|
(27,438
|
)
|
|
33,578
|
|
||||
Net unrealized gain (loss) on financial instruments
|
2,157
|
|
|
(150
|
)
|
|
18,371
|
|
|
(849
|
)
|
||||
Income before income taxes
|
$
|
76,033
|
|
|
$
|
52,430
|
|
|
$
|
194,334
|
|
|
$
|
123,336
|
|
17.
|
Supplementary Regulatory Capital Disclosure
|
(In thousands)
|
Actual Amount
|
|
Ratio
|
|
Minimum for Capital Adequacy Purposes Amount
|
|
Ratio
|
|
Minimum to Be Well Capitalized Under Prompt Corrective Action Provisions Amount
|
|
Ratio
|
|||||||||
September 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total Capital to risk-weighted assets
|
$
|
353,314
|
|
|
12.61
|
%
|
|
$
|
224,084
|
|
|
8.0
|
%
|
|
$
|
280,104
|
|
|
10.0
|
%
|
Tier 1 Capital to average assets
|
$
|
335,847
|
|
|
10.93
|
%
|
|
$
|
122,925
|
|
|
4.0
|
%
|
|
$
|
153,656
|
|
|
5.0
|
%
|
Common equity to risk-weighted assets
|
$
|
335,847
|
|
|
11.99
|
%
|
|
$
|
126,047
|
|
|
4.5
|
%
|
|
$
|
182,068
|
|
|
6.5
|
%
|
Tier 1 Capital to risk-weighted assets
|
$
|
335,847
|
|
|
11.99
|
%
|
|
$
|
168,063
|
|
|
6.0
|
%
|
|
$
|
224,084
|
|
|
8.0
|
%
|
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total Capital to risk-weighted assets
|
$
|
316,129
|
|
|
13.38
|
%
|
|
$
|
188,991
|
|
|
8.0
|
%
|
|
$
|
236,239
|
|
|
10.0
|
%
|
Tier 1 Capital to average assets
|
$
|
304,555
|
|
|
12.50
|
%
|
|
$
|
97,452
|
|
|
4.0
|
%
|
|
$
|
121,815
|
|
|
5.0
|
%
|
Common equity to risk-weighted assets
|
$
|
304,555
|
|
|
12.89
|
%
|
|
$
|
106,308
|
|
|
4.5
|
%
|
|
$
|
153,555
|
|
|
6.5
|
%
|
Tier 1 Capital to risk-weighted assets
|
$
|
304,555
|
|
|
12.89
|
%
|
|
$
|
141,743
|
|
|
6.0
|
%
|
|
$
|
188,991
|
|
|
8.0
|
%
|
18.
|
Subsequent Events
|
•
|
Overview
|
•
|
Summary
|
•
|
Results of Operations
|
•
|
Liquidity and Capital Resources
|
•
|
Critical Accounting Policies and Estimates
|
•
|
Recently Adopted Accounting Standards
|
•
|
Processing costs -
The Company’s processing costs consist of expenses related to processing transactions, servicing customers and merchants and cost of goods sold related to hardware and other product sales.
|
•
|
Service fees -
The Company incurs costs from third-party networks utilized to deliver payment solutions; additionally, other third-parties are utilized in performing services directly related to generating revenue. With the adoption of Topic 606 effective January 1, 2018, fees paid to third-party payment processing networks are no longer recorded as service fees and are now presented as a reduction of revenues.
|
•
|
Provision for credit losses -
Changes in the reserve for credit loss are the result of changes in management’s estimate of the losses in the Company’s outstanding portfolio of receivables, including losses from fraud.
|
•
|
Operating interest -
The Company incurs interest expense on the operating debt obtained to provide liquidity for its short-term receivables.
|
•
|
Depreciation and amortization -
The Company has identified those tangible and intangible assets directly associated with providing a service that generates revenue and records the depreciation and amortization associated with those assets under this category. Such assets include processing platforms and related infrastructure, acquired developed technology intangible assets and other similar asset types.
|
•
|
General and administrative -
General and administrative includes compensation and related expenses for executive, finance and accounting, other information technology, human resources, legal and other corporate functions. Also included are corporate facilities expenses, certain third-party professional service fees and other corporate expenses.
|
•
|
Sales and marketing -
The Company’s sales and marketing expenses relate primarily to compensation, benefits, sales commissions and related expenses for sales, marketing and other related activities. With the adoption of Topic 606 effective January 1, 2018, certain payments to partners are now classified as sales and marketing expenses.
|
•
|
Depreciation and amortization -
The depreciation and amortization associated with tangible and intangible assets that are not considered to be directly associated with providing a service that generates revenue are recorded as other operating expenses. Such assets include corporate facilities and information technology assets, and acquired intangible assets other than those included in cost of services.
|
•
|
Average number of vehicles serviced
increased
6 percent
from the
third
quarter of
2017
to approximately
11.7 million
for the
third
quarter of
2018
, resulting entirely from organic growth.
|
•
|
Total fuel transactions processed increased
7 percent
from the
third
quarter of
2017
to
141.7 million
for the
third
quarter of
2018
. Total payment processing transactions in our Fleet Solutions segment
increased
7 percent
to
117.7 million
for the
third
quarter of
2018
as compared to the same period last year resulting entirely from organic growth.
|
•
|
The average U.S. fuel price per gallon during the
third
quarter of
2018
was
$3.06
, a
22 percent
increase
from the same period last year.
|
•
|
Our Travel and Corporate Solutions’ purchase volume grew by approximately
$958.0 million
from the
third
quarter of
2017
to
$9.6 billion
for the
third
quarter of
2018
, an
increase
of
11 percent
, driven by higher customer purchase volumes, most significantly within the U.S. travel business.
|
•
|
Our Health and Employee Benefit Solutions’ average number of U.S. SaaS accounts grew by approximately
1.5 million
, a
16 percent
increase from the same period in the prior year, due primarily to customer signings. Likewise, U.S. purchase volume grew by
$105.6 million
, an
11 percent
increase from the same period of the prior year.
|
•
|
Our effective tax rate was
24.7 percent
for the
third
quarter of
2018
as compared to
35.4 percent
in the same period last year. The decline in our tax rate was primarily due to the 2017 Tax Act, which reduced the U.S. federal corporate income tax rate from 35 percent to 21 percent effective January 1, 2018. Our effective rate may fluctuate due to changes in estimates made under the 2017 Tax Act as more guidance and clarification is released by the regulators, the mix of earnings among different tax jurisdictions, as well as from impacts that statutory tax rate and earnings mix changes have on our net deferred tax assets.
|
|
Three Months Ended September 30,
|
|
Increase (Decrease)
|
|
Nine Months Ended September 30,
|
|
Increase (Decrease)
|
||||||||||||||||||||||
(In thousands, except per transaction and per gallon data)
|
2018
|
|
2017
|
|
Amount
|
|
Percent
|
|
2018
|
|
2017
|
|
Amount
|
|
Percent
|
||||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Payment processing revenue
|
$
|
116,023
|
|
|
$
|
90,270
|
|
|
$
|
25,753
|
|
|
29
|
%
|
|
$
|
335,896
|
|
|
$
|
264,210
|
|
|
$
|
71,686
|
|
|
27
|
%
|
Account servicing revenue
|
42,810
|
|
|
44,858
|
|
|
(2,048
|
)
|
|
(5
|
)%
|
|
128,039
|
|
|
122,238
|
|
|
5,801
|
|
|
5
|
%
|
||||||
Finance fee revenue
|
51,644
|
|
|
40,773
|
|
|
10,871
|
|
|
27
|
%
|
|
140,436
|
|
|
113,754
|
|
|
26,682
|
|
|
23
|
%
|
||||||
Other revenue
|
39,135
|
|
|
36,177
|
|
|
2,958
|
|
|
8
|
%
|
|
117,076
|
|
|
103,003
|
|
|
14,073
|
|
|
14
|
%
|
||||||
Total revenues
|
$
|
249,612
|
|
|
$
|
212,078
|
|
|
$
|
37,534
|
|
|
18
|
%
|
|
$
|
721,447
|
|
|
$
|
603,205
|
|
|
$
|
118,242
|
|
|
20
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Key operating statistics
(a)(b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Payment processing revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Payment processing transactions
|
117,680
|
|
|
110,047
|
|
|
7,633
|
|
|
7
|
%
|
|
343,426
|
|
|
320,946
|
|
|
22,480
|
|
|
7
|
%
|
||||||
Payment processing fuel spend
|
$
|
9,723,609
|
|
|
$
|
7,688,903
|
|
|
$
|
2,034,706
|
|
|
26
|
%
|
|
$
|
27,658,802
|
|
|
$
|
22,168,768
|
|
|
$
|
5,490,034
|
|
|
25
|
%
|
Average price per gallon of fuel – Domestic – ($USD/gal)
|
$
|
3.06
|
|
|
$
|
2.51
|
|
|
$
|
0.55
|
|
|
22
|
%
|
|
$
|
2.95
|
|
|
$
|
2.44
|
|
|
$
|
0.51
|
|
|
21
|
%
|
Net payment processing rate
|
1.19
|
%
|
|
1.17
|
%
|
|
0.02
|
%
|
|
2
|
%
|
|
1.21
|
%
|
|
1.19
|
%
|
|
0.02
|
%
|
|
2
|
%
|
|
Three Months Ended September 30,
|
|
Increase (Decrease)
|
|
Nine Months Ended September 30,
|
|
Increase (Decrease)
|
||||||||||||||||||||||
(In thousands)
|
2018
|
|
2017
|
|
Amount
|
|
Percent
|
|
2018
|
|
2017
|
|
Amount
|
|
Percent
|
||||||||||||||
Finance income
|
$
|
41,641
|
|
|
$
|
32,994
|
|
|
$
|
8,647
|
|
|
26
|
%
|
|
$
|
112,130
|
|
|
$
|
93,517
|
|
|
$
|
18,613
|
|
|
20
|
%
|
Factoring fee revenue
|
9,999
|
|
|
7,580
|
|
|
2,419
|
|
|
32
|
%
|
|
27,720
|
|
|
19,869
|
|
|
7,851
|
|
|
40
|
%
|
||||||
Cardholder interest income
|
4
|
|
|
199
|
|
|
(195
|
)
|
|
(98
|
)%
|
|
586
|
|
|
368
|
|
|
218
|
|
|
59
|
%
|
||||||
Finance fee revenue
|
$
|
51,644
|
|
|
$
|
40,773
|
|
|
$
|
10,871
|
|
|
27
|
%
|
|
$
|
140,436
|
|
|
$
|
113,754
|
|
|
$
|
26,682
|
|
|
23
|
%
|
|
Three Months Ended September 30,
|
|
Increase (Decrease)
|
|
Nine Months Ended September 30,
|
|
Increase (Decrease)
|
||||||||||||||||||||||
(In thousands)
|
2018
|
|
2017
|
|
Amount
|
|
Percent
|
|
2018
|
|
2017
|
|
Amount
|
|
Percent
|
||||||||||||||
Cost of services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Processing costs
|
$
|
50,394
|
|
|
$
|
45,283
|
|
|
$
|
5,111
|
|
|
11
|
%
|
|
$
|
147,198
|
|
|
$
|
131,701
|
|
|
$
|
15,497
|
|
|
12
|
%
|
Service fees
|
$
|
1,889
|
|
|
$
|
1,495
|
|
|
$
|
394
|
|
|
26
|
%
|
|
$
|
5,493
|
|
|
$
|
4,111
|
|
|
$
|
1,382
|
|
|
34
|
%
|
Provision for credit losses
|
$
|
17,408
|
|
|
$
|
19,277
|
|
|
$
|
(1,869
|
)
|
|
(10
|
)%
|
|
$
|
41,396
|
|
|
$
|
46,999
|
|
|
$
|
(5,603
|
)
|
|
(12
|
)%
|
Operating interest
|
$
|
4,532
|
|
|
$
|
2,449
|
|
|
$
|
2,082
|
|
|
85
|
%
|
|
$
|
11,370
|
|
|
$
|
6,044
|
|
|
$
|
5,325
|
|
|
88
|
%
|
Depreciation and amortization
|
$
|
9,943
|
|
|
$
|
12,424
|
|
|
$
|
(2,482
|
)
|
|
(20
|
)%
|
|
$
|
29,749
|
|
|
$
|
36,436
|
|
|
$
|
(6,688
|
)
|
|
(18
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Other operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
General and administrative
|
$
|
18,004
|
|
|
$
|
22,299
|
|
|
$
|
(4,295
|
)
|
|
(19
|
)%
|
|
$
|
57,894
|
|
|
$
|
55,161
|
|
|
$
|
2,733
|
|
|
5
|
%
|
Sales and marketing
|
$
|
38,727
|
|
|
$
|
30,395
|
|
|
$
|
8,332
|
|
|
27
|
%
|
|
$
|
115,331
|
|
|
$
|
89,210
|
|
|
$
|
26,121
|
|
|
29
|
%
|
Depreciation and amortization
|
$
|
19,394
|
|
|
$
|
23,647
|
|
|
$
|
(4,252
|
)
|
|
(18
|
)%
|
|
$
|
60,497
|
|
|
$
|
70,087
|
|
|
$
|
(9,590
|
)
|
|
(14
|
)%
|
Impairment charge
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(12,212
|
)
|
|
(100
|
)%
|
|
$
|
—
|
|
|
$
|
12,212
|
|
|
$
|
(12,212
|
)
|
|
(100
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Operating income
|
$
|
89,321
|
|
|
$
|
54,809
|
|
|
$
|
34,512
|
|
|
63
|
%
|
|
$
|
252,519
|
|
|
$
|
151,244
|
|
|
$
|
101,275
|
|
|
67
|
%
|
|
Three Months Ended September 30,
|
|
Increase (Decrease)
|
|
Nine Months Ended September 30,
|
|
Increase (Decrease)
|
||||||||||||||||||||||
(In thousands, except payment solutions purchase volume in millions)
|
2018
|
|
2017
|
|
Amount
|
|
Percent
|
|
2018
|
|
2017
|
|
Amount
|
|
Percent
|
||||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Payment processing revenue
|
$
|
54,345
|
|
|
$
|
44,177
|
|
|
$
|
10,168
|
|
|
23
|
%
|
|
$
|
150,411
|
|
|
$
|
119,328
|
|
|
$
|
31,083
|
|
|
26
|
%
|
Account servicing revenue
|
9,120
|
|
|
206
|
|
|
8,914
|
|
|
NM
|
|
|
27,584
|
|
|
528
|
|
|
27,056
|
|
|
NM
|
|
||||||
Finance fee revenue
|
670
|
|
|
87
|
|
|
583
|
|
|
670
|
%
|
|
1,157
|
|
|
469
|
|
|
688
|
|
|
147
|
%
|
||||||
Other revenue
|
18,675
|
|
|
16,556
|
|
|
2,119
|
|
|
13
|
%
|
|
46,201
|
|
|
43,414
|
|
|
2,787
|
|
|
6
|
%
|
||||||
Total revenues
|
$
|
82,810
|
|
|
$
|
61,026
|
|
|
$
|
21,784
|
|
|
36
|
%
|
|
$
|
225,353
|
|
|
$
|
163,739
|
|
|
$
|
61,614
|
|
|
38
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Key operating statistics
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Payment processing revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Payment solutions purchase volume
|
$
|
9,621
|
|
|
$
|
8,663
|
|
|
$
|
958
|
|
|
11
|
%
|
|
$
|
26,492
|
|
|
$
|
22,939
|
|
|
$
|
3,553
|
|
|
15
|
%
|
|
Three Months Ended September 30,
|
|
Increase (Decrease)
|
|
Nine Months Ended September 30,
|
|
Increase (Decrease)
|
||||||||||||||||||||||
(In thousands)
|
2018
|
|
2017
|
|
Amount
|
|
Percent
|
|
2018
|
|
2017
|
|
Amount
|
|
Percent
|
||||||||||||||
Cost of services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Processing costs
|
$
|
10,999
|
|
|
$
|
4,595
|
|
|
$
|
6,405
|
|
|
139
|
%
|
|
$
|
33,967
|
|
|
$
|
14,949
|
|
|
$
|
19,019
|
|
|
127
|
%
|
Service fees
|
$
|
7,151
|
|
|
$
|
15,344
|
|
|
$
|
(8,193
|
)
|
|
(53
|
)%
|
|
$
|
21,102
|
|
|
$
|
45,433
|
|
|
$
|
(24,331
|
)
|
|
(54
|
)%
|
Provision for credit losses
|
$
|
3,862
|
|
|
$
|
(418
|
)
|
|
$
|
4,280
|
|
|
NM
|
|
|
$
|
5,687
|
|
|
$
|
(575
|
)
|
|
$
|
6,262
|
|
|
NM
|
|
Operating interest
|
$
|
4,061
|
|
|
$
|
2,377
|
|
|
$
|
1,684
|
|
|
71
|
%
|
|
$
|
10,043
|
|
|
$
|
6,016
|
|
|
$
|
4,027
|
|
|
67
|
%
|
Depreciation and amortization
|
$
|
2,807
|
|
|
$
|
1,288
|
|
|
$
|
1,519
|
|
|
118
|
%
|
|
$
|
12,034
|
|
|
$
|
3,626
|
|
|
$
|
8,409
|
|
|
232
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Other operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
General and administrative
|
$
|
7,150
|
|
|
$
|
4,617
|
|
|
$
|
2,533
|
|
|
55
|
%
|
|
$
|
19,985
|
|
|
$
|
12,257
|
|
|
$
|
7,728
|
|
|
63
|
%
|
Sales and marketing
|
$
|
10,478
|
|
|
$
|
5,719
|
|
|
$
|
4,759
|
|
|
83
|
%
|
|
$
|
36,076
|
|
|
$
|
15,691
|
|
|
$
|
20,385
|
|
|
130
|
%
|
Depreciation and amortization
|
$
|
3,903
|
|
|
$
|
2,573
|
|
|
$
|
1,330
|
|
|
52
|
%
|
|
$
|
10,818
|
|
|
$
|
7,814
|
|
|
$
|
3,004
|
|
|
38
|
%
|
Impairment charges
|
$
|
2,424
|
|
|
$
|
—
|
|
|
$
|
2,424
|
|
|
NM
|
|
|
$
|
2,424
|
|
|
$
|
3,963
|
|
|
$
|
(1,539
|
)
|
|
(39
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Operating income
|
$
|
29,975
|
|
|
$
|
24,932
|
|
|
$
|
5,043
|
|
|
20
|
%
|
|
$
|
73,217
|
|
|
$
|
54,566
|
|
|
$
|
18,651
|
|
|
34
|
%
|
|
Three Months Ended September 30,
|
|
Increase (Decrease)
|
|
Nine Months Ended September 30,
|
|
Increase (Decrease)
|
||||||||||||||||||||||
(In thousands, except purchase volume in millions)
|
2018
|
|
2017
|
|
Amount
|
|
Percent
|
|
2018
|
|
2017
|
|
Amount
|
|
Percent
|
||||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Payment processing revenue
|
$
|
12,503
|
|
|
$
|
11,255
|
|
|
$
|
1,248
|
|
|
11
|
%
|
|
$
|
43,756
|
|
|
$
|
39,896
|
|
|
$
|
3,860
|
|
|
10
|
%
|
Account servicing revenue
|
26,818
|
|
|
26,258
|
|
|
560
|
|
|
2
|
%
|
|
80,545
|
|
|
75,772
|
|
|
4,773
|
|
|
6
|
%
|
||||||
Finance fee revenue
|
1,389
|
|
|
10,019
|
|
|
(8,630
|
)
|
|
(86
|
)%
|
|
13,365
|
|
|
22,113
|
|
|
(8,748
|
)
|
|
(40
|
)%
|
||||||
Other revenue
|
9,558
|
|
|
3,366
|
|
|
6,192
|
|
|
184
|
%
|
|
23,929
|
|
|
14,518
|
|
|
9,411
|
|
|
65
|
%
|
||||||
Total revenues
|
$
|
50,268
|
|
|
$
|
50,898
|
|
|
$
|
(630
|
)
|
|
(1
|
)%
|
|
$
|
161,595
|
|
|
$
|
152,299
|
|
|
$
|
9,296
|
|
|
6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Key operating statistics (U.S. only)
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Payment processing revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Purchase volume
|
$
|
1,061,215
|
|
|
$
|
955,652
|
|
|
$
|
105,563
|
|
|
11
|
%
|
|
$
|
3,817,924
|
|
|
$
|
3,429,725
|
|
|
$
|
388,199
|
|
|
11
|
%
|
Account servicing revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Average number of SaaS accounts
|
11,057
|
|
|
9,566
|
|
|
1,491
|
|
|
16
|
%
|
|
10,876
|
|
|
9,025
|
|
|
1,851
|
|
|
21
|
%
|
|
Three Months Ended September 30,
|
|
Increase (Decrease)
|
|
Nine Months Ended September 30,
|
|
Increase (Decrease)
|
||||||||||||||||||||||
(In thousands)
|
2018
|
|
2017
|
|
Amount
|
|
Percent
|
|
2018
|
|
2017
|
|
Amount
|
|
Percent
|
||||||||||||||
Cost of services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Processing costs
|
$
|
18,189
|
|
|
$
|
19,240
|
|
|
$
|
(1,051
|
)
|
|
(5
|
)%
|
|
$
|
54,345
|
|
|
$
|
56,031
|
|
|
$
|
(1,686
|
)
|
|
(3
|
)%
|
Service fees
|
$
|
4,777
|
|
|
$
|
2,818
|
|
|
$
|
1,959
|
|
|
70
|
%
|
|
$
|
13,251
|
|
|
$
|
7,868
|
|
|
$
|
5,383
|
|
|
68
|
%
|
Provision for credit losses
|
$
|
164
|
|
|
$
|
755
|
|
|
$
|
(591
|
)
|
|
(78
|
)%
|
|
$
|
(154
|
)
|
|
$
|
1,503
|
|
|
$
|
(1,657
|
)
|
|
NM
|
|
Operating interest
|
$
|
1,676
|
|
|
$
|
2,711
|
|
|
$
|
(1,035
|
)
|
|
(38
|
)%
|
|
$
|
6,869
|
|
|
$
|
4,989
|
|
|
$
|
1,880
|
|
|
38
|
%
|
Depreciation and amortization
|
$
|
6,263
|
|
|
$
|
5,167
|
|
|
$
|
1,096
|
|
|
21
|
%
|
|
$
|
18,275
|
|
|
$
|
14,577
|
|
|
$
|
3,698
|
|
|
25
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Other operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
General and administrative
|
$
|
7,337
|
|
|
$
|
5,954
|
|
|
$
|
1,383
|
|
|
23
|
%
|
|
$
|
18,891
|
|
|
$
|
16,882
|
|
|
$
|
2,009
|
|
|
12
|
%
|
Sales and marketing
|
$
|
5,398
|
|
|
$
|
5,409
|
|
|
$
|
(11
|
)
|
|
—
|
%
|
|
$
|
17,389
|
|
|
$
|
16,710
|
|
|
$
|
679
|
|
|
4
|
%
|
Depreciation and amortization
|
$
|
5,348
|
|
|
$
|
5,705
|
|
|
$
|
(357
|
)
|
|
(6
|
)%
|
|
$
|
16,203
|
|
|
$
|
16,796
|
|
|
$
|
(593
|
)
|
|
(4
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Operating income
|
$
|
1,116
|
|
|
$
|
3,139
|
|
|
$
|
(2,023
|
)
|
|
(64
|
)%
|
|
$
|
16,526
|
|
|
$
|
16,943
|
|
|
$
|
(417
|
)
|
|
(2
|
)%
|
|
Three Months Ended September 30,
|
|
Increase (Decrease)
|
|
Nine Months Ended September 30,
|
|
Increase (Decrease)
|
||||||||||||||||||||||
(In thousands)
|
2018
|
|
2017
|
|
Amount
|
|
Percent
|
|
2018
|
|
2017
|
|
Amount
|
|
Percent
|
||||||||||||||
Other operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
General and administrative
|
$
|
19,309
|
|
|
$
|
18,668
|
|
|
$
|
641
|
|
|
3
|
%
|
|
$
|
58,951
|
|
|
$
|
49,489
|
|
|
$
|
9,462
|
|
|
19
|
%
|
Sales and marketing
|
$
|
6
|
|
|
$
|
62
|
|
|
$
|
(56
|
)
|
|
(90
|
)%
|
|
$
|
51
|
|
|
$
|
115
|
|
|
$
|
(64
|
)
|
|
(56
|
)%
|
Depreciation and amortization
|
$
|
409
|
|
|
$
|
425
|
|
|
$
|
(16
|
)
|
|
(4
|
)%
|
|
$
|
1,299
|
|
|
$
|
1,092
|
|
|
$
|
207
|
|
|
19
|
%
|
|
Three Months Ended September 30,
|
|
Increase (Decrease)
|
|
Nine Months Ended September 30,
|
|
Increase (Decrease)
|
||||||||||||||||||||||
(In thousands)
|
2018
|
|
2017
|
|
Amount
|
|
Percent
|
|
2018
|
|
2017
|
|
Amount
|
|
Percent
|
||||||||||||||
Financing interest expense
|
$
|
(25,718
|
)
|
|
$
|
(25,754
|
)
|
|
$
|
(36
|
)
|
|
—
|
%
|
|
$
|
(78,560
|
)
|
|
$
|
(81,449
|
)
|
|
$
|
(2,889
|
)
|
|
(4
|
)%
|
Net foreign currency (loss) gain
|
$
|
(1,094
|
)
|
|
$
|
14,611
|
|
|
$
|
(15,705
|
)
|
|
NM
|
|
|
$
|
(27,438
|
)
|
|
$
|
33,578
|
|
|
$
|
(61,016
|
)
|
|
NM
|
|
Net unrealized gain (loss) on financial instruments
|
$
|
2,157
|
|
|
$
|
(150
|
)
|
|
$
|
2,307
|
|
|
NM
|
|
|
$
|
18,371
|
|
|
$
|
(849
|
)
|
|
$
|
19,220
|
|
|
NM
|
|
Income taxes
|
$
|
18,751
|
|
|
$
|
18,570
|
|
|
$
|
181
|
|
|
1
|
%
|
|
$
|
48,278
|
|
|
$
|
43,760
|
|
|
$
|
4,518
|
|
|
10
|
%
|
Net income (loss) from non-controlling interest
|
$
|
(40
|
)
|
|
$
|
(111
|
)
|
|
$
|
71
|
|
|
(64
|
)%
|
|
$
|
803
|
|
|
$
|
(886
|
)
|
|
$
|
1,689
|
|
|
NM
|
|
•
|
Exclusion of the non-cash, mark-to-market adjustments on financial instruments, including interest rate swap agreements and investment securities, helps management identify and assess trends in the Company’s underlying business that might otherwise be obscured due to quarterly non-cash earnings fluctuations associated with these financial instruments. Additionally, the non-cash, mark-to-market adjustments on financial instruments are difficult to forecast accurately, making comparisons across historical and future quarters difficult to evaluate.
|
•
|
Net foreign currency gains and losses primarily result from the remeasurement to functional currency of cash, receivable and payable balances, certain intercompany notes denominated in foreign currencies and any gain or loss on foreign currency hedges relating to these items. The exclusion of these items helps management compare changes in operating results between periods that might otherwise be obscured due to currency fluctuations.
|
•
|
The Company considers certain acquisition-related costs, including certain financing costs, investment banking fees, warranty and indemnity insurance, certain integration-related expenses and amortization of acquired intangibles, as well as gains and losses from divestitures to be unpredictable, dependent on factors that may be outside of our control and unrelated to the continuing operations of the acquired or divested business or the Company. In prior periods, the Company has adjusted for goodwill impairments, acquisition-related asset impairments and gains and losses on divestitures. In addition, the size and complexity of an acquisition, which often drives the magnitude of acquisition-related costs, may not be indicative of such future costs. The Company believes that excluding acquisition-related costs and gains or losses of divestitures facilitates the comparison of our financial results to the Company’s historical operating results and to other companies in our industry.
|
•
|
Stock-based compensation is different from other forms of compensation, as it is a non-cash expense. For example, a cash salary generally has a fixed and unvarying cash cost. In contrast, the expense associated with an equity-based award is generally unrelated to the amount of cash ultimately received by the employee, and the cost to the Company is based on a stock-based compensation valuation methodology and underlying assumptions that may vary over time.
|
•
|
Restructuring and other costs are related to certain identified initiatives to further streamline the business, improve the Company’s efficiency, create synergies and to globalize the Company’s operations, all with an objective to improve scale and increase profitability going forward. This also includes other immaterial costs that the Company has incurred and are non-operational and non-recurring. We exclude these items when evaluating our continuing business performance as such items are not consistently occurring and do not reflect expected future operating expense, nor do they provide insight into the fundamentals of current or past operations of our business.
|
•
|
Impairment charges represent non-cash asset write-offs, which do not reflect recurring costs that would be relevant to the Company’s continuing operations. The Company believes that excluding these nonrecurring expenses facilitates the comparison of our financial results to the Company’s historical operating results and to other companies in its industry.
|
•
|
Debt restructuring and debt issuance cost amortization are unrelated to the continuing operations of the Company. Debt restructuring costs are not consistently occurring and do not reflect expected future operating expense, nor do they provide insight into the fundamentals of current or past operations of our business. In addition, since debt issuance cost amortization is dependent upon the financing method which can vary widely company to company, we believe that excluding these costs helps to facilitate comparison to historical results as well as to other companies within our industry.
|
•
|
The adjustments attributable to non-controlling interest have no significant impact on the ongoing operations of the business.
|
•
|
The tax related items are the difference between the Company’s GAAP tax provision and a pro forma tax provision based upon the Company’s adjusted net income before taxes as well as the impact from certain discrete tax items. The methodology utilized for calculating the Company’s adjusted net income tax provision is the same methodology utilized in calculating the Company’s GAAP tax provision.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income attributable to shareholders
|
$
|
57,322
|
|
|
$
|
33,971
|
|
|
$
|
145,253
|
|
|
$
|
80,462
|
|
Unrealized (gains) losses on financial instruments
|
(2,157
|
)
|
|
150
|
|
|
(18,371
|
)
|
|
849
|
|
||||
Net foreign currency remeasurement losses (gains)
|
1,094
|
|
|
(14,611
|
)
|
|
27,438
|
|
|
(33,578
|
)
|
||||
Acquisition-related intangible amortization
|
33,439
|
|
|
38,510
|
|
|
103,596
|
|
|
114,603
|
|
||||
Other acquisition and divestiture related items
|
1,536
|
|
|
1,006
|
|
|
2,792
|
|
|
3,380
|
|
||||
Stock-based compensation
|
9,799
|
|
|
8,483
|
|
|
25,659
|
|
|
22,354
|
|
||||
Restructuring and other costs
|
1,973
|
|
|
6,024
|
|
|
8,274
|
|
|
10,169
|
|
||||
Impairment charges
|
2,424
|
|
|
—
|
|
|
2,424
|
|
|
16,175
|
|
||||
Debt restructuring and debt issuance cost amortization
|
2,216
|
|
|
4,287
|
|
|
11,515
|
|
|
8,450
|
|
||||
ANI adjustments attributable to non-controlling interest
|
(351
|
)
|
|
(207
|
)
|
|
(889
|
)
|
|
(1,162
|
)
|
||||
Tax related items
|
(11,936
|
)
|
|
(16,130
|
)
|
|
(42,819
|
)
|
|
(53,131
|
)
|
||||
Adjusted net income attributable to shareholders
|
$
|
95,359
|
|
|
$
|
61,483
|
|
|
$
|
264,872
|
|
|
$
|
168,571
|
|
|
Nine Months Ended September 30,
|
||||||
(In thousands)
|
2018
|
|
2017
|
||||
Cash flows provided by (used for) operating activities
|
$
|
183,133
|
|
|
$
|
(44,546
|
)
|
Cash flows used for investing activities
|
$
|
(57,479
|
)
|
|
$
|
(56,005
|
)
|
Cash flows (used for) provided by financing activities
|
$
|
(80,958
|
)
|
|
$
|
177,109
|
|
•
|
Certain amounts paid to partners in our Fleet Solutions and Travel and Corporate Solutions segments have been determined to fall under the “cost to obtain a contract” guidance. As a result, these amounts, which were previously presented as a reduction of revenues, are now reflected within sales and marketing on our unaudited condensed consolidated statements of income. This change increased both reported revenues and expenses for the three and
nine months ended
September 30, 2018
by approximately
$13.8 million
and
$44.9 million
, respectively.
|
•
|
Network fees paid to third party payment processing networks by all three of our segments, but primarily by our Travel and Corporate Solutions segment, are now presented as a reduction of revenues in our unaudited condensed consolidated statements of income. Prior to January 1, 2018, these amounts were included within service fees. This change reduced both reported revenues and expenses by approximately
$3.4 million
and
$13.5 million
, respectively, for the three and
nine months ended
September 30, 2018
.
|
•
|
Certain costs to obtain a contract, such as sales commissions, are to be capitalized and amortized over the life of the customer relationship, with a practical expedient available for contracts under one year in duration. The vast majority of the Company’s commissions will continue to be expensed as incurred.
|
|
Exhibit No.
|
|
Description
|
|
3.1
|
|
|
|
3.2
|
|
|
|
3.3
|
|
|
*
|
10.1
|
|
|
*
|
31.1
|
|
|
*
|
31.2
|
|
|
*
|
32.1
|
|
|
*
|
32.2
|
|
|
*
|
101.INS
|
|
XBRL Instance Document
|
*
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
*
|
101.CAL
|
|
XBRL Taxonomy Calculation Linkbase Document
|
*
|
101.LAB
|
|
XBRL Taxonomy Label Linkbase Document
|
*
|
101.PRE
|
|
XBRL Taxonomy Presentation Linkbase Document
|
*
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
*
|
These exhibits have been filed with this Quarterly Report on Form 10–Q.
|
|
WEX INC.
|
||
|
|
|
|
November 8, 2018
|
By:
|
|
/s/ Roberto Simon
|
|
|
|
Roberto Simon
|
|
|
Chief Financial Officer
|
|
|
|
(principal financial officer and principal accounting officer)
|
1 Year WEX Chart |
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